/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110607.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, June 7, 2011, Vol. 15, No. 156 Headlines 2930 MOJAVE: Files for Chapter 7 Bankruptcy Protection 524 HOWARD: Taps Napoleon L. Forte to Appraise California Property 6333 CORP: Case Summary & 2 Largest Unsecured Creditors A-NGAE1 LLC: Bankruptcy Court Confirms Amended Plan AFY INC: Ch.7 Trustee Wins Bid to Collect $4.5MM From Affiliate AIRPARK VILLAGE: To Reorganize Through New Debt or Asset Sale ALL SERVICE: Files for Chapter 7 Bankruptcy Protection ALLY FINANCIAL: Promotes Several Executives From Within Firm ALLY FINANCIAL: Has Applied for NYSE Listing Under "ALLY" Symbol ALTER COMMS: Confirmation Order Reversed to Allow Competing Plans AMERICAN PACIFIC: Amends Plan to Outline Treatment of Creditors AMT LLC: Sec. 341 Creditors' Meeting Set for June 30 AMT LLC: Asks Court to Approve Wilson Harrell Employment ANGEL ACQUISITION: Continues Development of Angels in Action APOLLO MEDICAL: Raouf Khalil Resigns as Director ARCH COAL: Moody's Confirms 'Ba3' CFR; Outlook Stable ATHENS INVESTORS: Owes About $53,000 in Taxes to Athens Country BARNES BAY: Anguilla Re Wants Changes in Releases under Plan BERKELEY DELAWARE: Files Schedules of Assets and Liabilities BERNARD L. MADOFF: Ex-Employee Pleas Guilty to Falsifying Records BERNARD L. MADOFF: JPMorgan Chase Seeks to Dismiss 13 of 21 Claims BIOPACK ENVIRONMENTAL: Awaits Judgment on Landlord's Claim BORDERS GROUP: Hopes to File Chapter 11 Plan by End of June BORDERS GROUP: Seattle's Best Reacts to Contract Rejection BORDERS GROUP: Wins Approval to Reject 100 Contracts BOWE BELL: Wins Approval for Richards Layton as Counsel BOWE BELL: Can Hire Tory's LLP to Handle Canadian Proceedings BOWE BELL: Court Approves Focus Management as Financial Advisor BOWE BELL: Affiliates File Schedules of Assets and Liabilities BOWE BELL: Committee Taps BDO Consulting as Financial Advisor BPP TEXAS: Takes Step Toward Bankruptcy Exit With Sale Request BROWARD COUNTY: Moody's Cuts Ratings on Revenue Bonds to 'B' BRUGNARA PROPERTIES VI: U.S. Trustee Wants Case Converted to Ch. 7 C&S MARINE: Case Summary & 4 Largest Unsecured Creditors CARLYLE MODENA: Moody's Upgrades Rating on Class D Notes to 'B3' CASTELLO EXCAVATION: Case Summary & 20 Largest Unsecured Creditors CATHOLIC CHURCH: Milw. Panel Wants Lift Stay for Depositions CATHOLIC CHURCH: Wilmington Plan Set for Confirmation July 8 CATHOLIC CHURCH: Wilm. Committee Has Berkeley as Fin'l Advisor CENTRAL LEASING: Ch. 7 Trustee Taps Becker Meisel as Counsel CENTRAL LEASING: Reorganization Case Converted to Liquidation CENTRAL LEASING: Trustee Taps Bederson & Company as Accountant CFRI/GREENLAW: Plan Filing Exclusivity Extended to Aug. 19 COLTS RUN: Wants to Tap Cash Collateral to Pay Professional Fees COMPTON PETROLEUM: Reports $2.47-Mil. First Quarter Net Earnings CORRECTIONS CORP: Moody's Raises Sr. Unsecured Rating to 'Ba1' COTTON 303: Bankruptcy Court Considers Case Dismissal Plea Today CROSS BORDER: Enters Into Separation Agreement with BDR Inc. CRYSTAL CATHEDRAL: Plans Bidding Process for Church Property CRYSTALLEX INTERNATIONAL: Notified of Amex Panel Appeal Decision DAAT ASSET: Files for Chapter 7 Bankruptcy Protection DIABLO VILLAGE: Case Summary & 9 Largest Unsecured Creditors DUOYUAN PRINTING: To Continue Appeal of NYSE Delisting DYNASTY DEVELOPMENT: Creditors Wants Reorganization Case Dismissed DYNASTY DEVELOPMENT: Files Schedules of Assets and Liabilities ELITE PHARMACEUTICALS: Trellus Management Has 7.26% Equity Stake EMMIS COMMUNICATIONS: Number of Directors Decreased to Eight FABRICATED STEEL: Files for Chapter 7 Liquidation FAIRFAX CROSSING: Amends Plan, to Consolidate Subsidiaries FAST CAR: Files for Chapter 7 Bankruptcy Protection FRE REAL ESTATE: Denied Cash Collateral Use, Seeks Reconsideration GENBAND INC: Moody's Downgrades Corporate Family Rating to 'B3' GENCORP INC: SPH Group Discloses 6.9% Equity Stake GENERAL GROWTH: Asks for Final Decree Closing 136 Ch. 11 Cases GENERAL GROWTH: May Spin-Off Properties in $1.8-Bil. Deal GENERAL GROWTH: Court OKs $199-Mil. in Professional Fees GEORGIA GULF: S&P Ups Corp. Credit Rating to B+; Outlook Stable GIORDANO'S ENTERPRISES: Trustee Taps Popowcer as Accountants GIORDANO'S ENTERPRISES: Trustee Taps Quarles & Brady as Counsel GIORDANO'S ENTERPRISES: Trustee Taps William Blair as Inv. Banker GIORDANO'S ENTERPRISES: Trustee Taps William Dart for Tax Appeals GIORDANO'S ENTERPRISES: Amends DIP Loan Pact Amount to $3.5-Mil. GRAMERCY PARK: StabFund Given Go Signal to Foreclose NY Property GREAT ATLANTIC: Forges New Deal With C&S Wholesale Grocers, Inc. HARRY & DAVID: Disclosure Statement Hearing Set for June 24 HARRY & DAVID: Noteholders to Backstop Company's Rights Offering HARRY & DAVID: Can Use Cash Collateral & Access $100-Mil. Loans HARTSTRINGS L.L.C.: Files for Chapter 7 Bankruptcy Protection HEARUSA INC: Secures Approval of Loan From William Demant HIGHVIEW POINT: Chapter 11 Case Dismissed on Consent HOLLIFIELD RANCHES: Has Permission to Ink $1.4-Mil. Secured Loan HOLLYWOOD CASTING: Files for Chapter 7 Bankruptcy Protection HOWREY LLP: Moves to Convert Ch. 7 Involuntary to Voluntary Ch. 11 HUBBARD PROPERTIES: Court Sets July 21 Confirmation Hearing Date HUSKY INT'L: Moody's Assigns 'B2' Corporate Family Rating IMAGE METRICS: Amends Licensing Agreement with Largest Customer IMPERIAL CAPITAL: FDIC Objects to Adequacy of Disclosure Statement INTEGRATED TECH: Files for Chapter 7 Bankruptcy Protection INTERNATIONAL LEASE: Fitch Affirms IDR at 'BB'; Outlook Stable INTERPUBLIC GROUP: S&P Rates Sr. Unsec. Revolver Facility at BB+ INTERTAPE POLYMER: Eight Directors Elected at Annual Meeting ISTAR FINANCIAL: Seven Directors Elected at Annual Meeting JILL HOLDINGS: S&P Gives 'B' Corp. Credit Rating; Outlook Negative JNL FUNDING: Court Okays Disc. Statement, Plan Hearing on June 13 JOE TECCE: Blames 'Big Dig' Construction for Bankruptcy Filing JS WESTON'S: Judge David Adams Dismisses Chapter 11 Case KENTUCKIANA MEDICAL: Has Until July 18 to File Chapter 11 Plan K-V PHARMACEUTICAL: AmediusTec Owns 5% of Class A Common Shares KIOWA POWER: S&P Affirms Rating on $73.5MM Bonds at 'BB-' LARRY SCHAIDT: Voluntary Chapter 11 Case Summary LAX ROYAL: MSCI Wants Stay Lifted as to West Century Property LEHMAN BROTHERS: Citigroup, et al., Want $1-Bil. Suit Dismissed LEHMAN BROTHERS: Weil Seeks $38 Million for 4 Months of Work LEHMAN BROTHERS: SIPC Trustee Supports $861-Mil. Deal with JPM LEHMAN BROTHERS: Citi Wants LBI Claims Reduced by $296-Mil. LEHMAN BROTHERS: Unveils Plan to Settle Derivatives Claims LEHMAN BROTHERS: Investors Sue Lehman Over $640MM Contributions LEHMAN BROTHERS: Judge Dismisses in Part Ballyrock ABS Lawsuit LEHR CONSTRUCTION: Trustee Hires Golenbock Eiseman as Counsel LEHR CONSTRUCTION: Trustee Taps Wolf Haldenstein as Counsel LODGENET INTERACTIVE: Two Directors Elected at Annual Meeting LOWER BUCKS: Has Until July 8 to Propose Chapter 11 Plan LPATH, INC: Enters Into Lease Agreement with Sorrento Science LT 266: Stay Lifted for VASOS to Pursue NY Foreclosure Action M. SLAVIN & SONS: 3 Brooklyn Properties Set for Auction June 16 MADISON HOTEL: Sec. 341 Creditors' Meeting Set for June 30 MAJESTIC CAPITAL: Section 341(a) Meeting of Creditors Tomorrow MAJESTIC CAPITAL: Court Approves Day Seckler as Fin'l Advisors MAJESTIC CAPITAL: Court Approves Genova & Malin as Local Counsel MARONDA HOMES: Court OKs Manion McDonough as Bankruptcy Counsel MILLENNIUM REAL ESTATE: Case Summary & Largest Unsecured Creditors MP-TECH AMERICA: Committee Taps Johnson Barton as Counsel NEOMEDIA TECHNOLOGIES: To Sell $450,000 Debenture to YA Global NEW ORIENTAL: Common Stock Delisted from Nasdaq NLC UNITRUST: Hires Weir & Partners as Special Litigation Counsel NORTEL NETWORKS: Justice Agency Keeps Close Eye on Bidding Process NORTEL NETWORKS: Seeks to Employ Cassidy Turley as Broker NORTEL NETWORKS: Wants Official Retiree Panel Established NURSERYMEN'S EXCHANGE: Selling Licensing Deals at July 13 Auction ON THE LEVEL: Voluntary Chapter 11 Case Summary PACKET360 INC: Files Chapter 7 Liquidation PARMALAT SPA: Bondi Wants Grant Thornton Cases Moved to Illinois PARMALAT SPA: C Tanzi Jailed After Conviction in Market Abuse Case PDPA INC: Case Summary & 16 Largest Unsecured Creditors PETERSON LAW: Case Summary & 20 Largest Unsecured Creditors PHILADELPHIA RITTENHOUSE: Appeals Dismissal of Chapter 11 Case PRADERAS DEL: Case Summary & 16 Largest Unsecured Creditors PROLOGIS INC: Fitch Upgrades Credit Ratings Following Merger PROLOGIS INC: S&P Lowers Rating on Preferred Securities to 'BB' QIMONDA AG: $11.75MM Settlement With G2 Technology Approved QUANTUM COMPUTER: Voluntary Chapter 11 Case Summary QUANTUM FUEL: Amends 2.67MM Registration Statement RANCHO HOUSING: 341 Meeting on July 1; Status Hearing on July 19 RASER TECHNOLOGIES: Approved Loan Requires Plan by Sept. 30 RASER TECHNOLOGIES: Unit Gets Notice of Default from Anaheim REOSTAR ENERGY: To File SEC Form 15 to Deregister Common Stock REVLON, INC: Eleven Directors Elected at Annual Meeting ROBERTS LAND: Files List of Two Largest Unsecured Creditors ROBERTS LAND: Asks Court to Bar Lender From Going After Owners ROSE IN BLOOM: Case Summary & 2 Largest Unsecured Creditors SADDLEWOOD APARTMENTS: Case Summary & 18 Largest Unsec. Creditors SBARRO INC: Moody's Assigns'Ba2' Rating to $35-Mil. DIP Facility SHAW FAMILY: Case Summary & 11 Largest Unsecured Creditors SINCLAIR BROADCAST: Eight Directors Elected at Annual Meeting SIVEC SRL: Chapter 15 Case Summary SMURFIT-STONE: RockTenn to Close Three Container Facilities SONRISA REALTY: Bank's $5 Mil. Wins Auction for Property SOUTH LOUISIANA: Will Accept Bids for Ethanol Plant Until June 9 SOUTH PADRE: Court Approves Tim Schultz as Accountant SUNVALLEY SOLAR: Inks $1.56MM Photovoltaic Contract with Diamond SWISS CHALET: Asks Court to OK Hiring of Cuprill Law Firm SWISS CHALET: Seeks to Hire Carrasquillo as Fin'l Consultants SWISS CHALET: Sec. 341(a) Creditors' Meeting Set for June 30 SYNAGRO TECHNOLOGIES: S&P Raises CCR to 'B-'; Outlook is Stable TASTY BAKING: Suspending Filing of Reports with SEC TBS INTERNATIONAL: Joseph Royce Owns 42.6% of Class A Shares TBS INTERNATIONAL: Gregg McNelis Holds 15.6% of Class A Shares THREE LIGHTS: Case Summary & 19 Largest Unsecured Creditors TOLL BROTHERS: Moody's Revises Outlook to Stable from Negative TOWN & COUNTRY: Case Summary & 20 Largest Unsecured Creditors TRADE UNION: Seeks to Employ Lan Liu & Company as Accountant TRIBUNE CO: Committee Wants to Termination Event Until Aug. 15 TRIBUNE CO: Homestead Has Ok to Sell Property for $3.85-Mil. TRIBUNE CO: Committee Hires Seitz van Ogrtrop as Conflicts Counsel TRICO MARINE: Has Until July 29 to Solicit Ch. 11 Plan Acceptances TRIMAS CORP: Moody's Rates New Credit Facility at 'Ba2' TRIUS THERAPEUTICS: 4 Class I Directors Elected at Annual Meeting UNION LAND: Files Schedule of Assets and Liabilities UNION LAND: Asks Court to Approve Decker Law Firm Employment UNION LAND: Sec. 341(a) Creditors' Meeting Set for July 6 USA BANK OF PORT CHESTER: FDIC Probes Greenwich Official VILLAS AT 39TH: Case Summary & 3 Largest Unsecured Creditors VITRO SAB: Sun Capital Wins Auction for U.S. Assets WELCOME HOSPITALITY: Case Summary & 17 Largest Unsecured Creditors * Running Cities Like Companies is Risky Business, Experts Say * Cohen & Grigsby Certified as Business Bankruptcy Specialists * Large Companies With Insolvent Balance Sheets ********* 2930 MOJAVE: Files for Chapter 7 Bankruptcy Protection ------------------------------------------------------ Daily News Los Angeles reports that 2930 Mojave Court Title Holding Trust, at 4910 Libbit Ave., in Encino, California, filed for Chapter 7 protection in Los Angeles (Bankr. C.D. Calif. Case No. 11-16138). 524 HOWARD: Taps Napoleon L. Forte to Appraise California Property ------------------------------------------------------------------ The Hon. Dennis Montali of the U.S. Bankruptcy Court for the Northern District of California authorized 524 Howard, LLC, to employ Napoleon L. Forte as appraiser for the purpose of valuing certain real property. The Debtor requires an appraisal of a certain real property located at 524 Howard Street in San Francisco, California. A dispute between the Debtor and Howard Street Property Investors, LLC, holder of the senior lien, has arisen over the value of the property. The Debtor will pay Mr. Forte the cost of the appraisal amounting to $5,500. To the best of the Debtor's knowledge, Mr. Forte is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Iain A. Macdonald, Esq. Reno F.R. Fernandez III, Esq. MACDONALD & ASSOCIATES 221 Sansome Street, Third Floor San Francisco, CA 94104 Tel: (415) 362-0449 Fax: (415) 394-5544 About 524 Howard, LLC San Francisco, California-based 524 Howard, LLC, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 11-30594) on Feb. 17, 2011. Iain A. Macdonald, Esq., and Reno F.R. Fernandez, Esq., at Macdonald and Associates, in San Francisco, serve as the Debtor's bankruptcy counsel. An affiliate, CMR Mortgage Fund, LLC, sought Chapter 11 protection (Bankr. N.D. Calif. Case No. 08-32220) on Nov. 18, 2008. Affiliates CMR Mortgage Fund II, LLC (Bankr. N.D. Calif. Case No. 09-30788) and CMR Mortgage Fund III, LLC (Bankr. N.D. Calif. Case No. 09-30802) filed Chapter 11 petitions on March 31, 2009. 524 Howard disclosed $38,859,147 in assets and $29,326,164 in liabilities as of the Chapter 11 filing. 6333 CORP: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------- Debtor: 6333 Corp. 6333 N. Northwest Hwy. Chicago, IL 60646 Bankruptcy Case No.: 11-23366 Chapter 11 Petition Date: June 1, 2011 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtor's Counsel: Scott R. Clar, Esq. CRANE HEYMAN SIMON WELCH & CLAR 135 S Lasalle Suite 3705 Chicago, IL 60603 Tel: (312) 641-6777 Fax: (312) 641-7114 E-mail: sclar@craneheyman.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ilnb11-23366.pdf The petition was signed by Michael Kinsch, president. A-NGAE1 LLC: Bankruptcy Court Confirms Amended Plan --------------------------------------------------- On Feb. 17, 2011, Debtor A-NGAE1, LLC, and its parent, N.G.A.#2, LLC, filed the disclosure statement for the Debtor's Plan of Reorganization dated July 27, 2009, and the Amended Plan of Reorganization dated Feb. 17, 2011. On May 18, 2011, the Bankruptcy Court approved the disclosure statement and confirmed the Amended Plan. The New Operating Agreement is approved and will govern the affairs of the Debtor on and after the Effective Date without further of the Bankruptcy Court. On the Effective Date, the promissory note dated as of July 11, 2006, in the original principal of $9,900,000 issued by N.G.A. #2, LLC, and assumed by the Debtor prior to the Petition Date ("Note") will be automatically canceled and any liens on the property pursuant to the Deed of Trust will be automatically discharged withouth further of the Court. The Debtor will issue the Class A Membership Interests to the Lenders and the Class B Membership Interests to the Parent as required by the Amended Plan. As reported in the TCR on May 6, 2011, the Amended Plan modifies the initial plan by removing Section 5.5. Section 5.5 provides that approval of the plan by lenders holding 51% or more of the total amount of allowed note claims will be deemed to constitute an action by those lenders to release the guarantor from all of its obligations under the guarantee, and will be binding upon all lenders. The removal of Section 5.5 will not affect the amount or percentage of Class A Membership Interests that the lenders will receive on account of their note claims or the voluntary releases granted by the lenders that voted in favor of the original plan. If the amended plan is confirmed, those releases will be effective notwithstanding the removal of the provision. As reported in the TCR on Feb. 28, 2011, the Debtor will adopt a new operating agreement, which will supersede all other operating agreements in respect of the Debtor. The new operating agreement will provide at all times that, upon the sale of the Debtor's property, the proceeds will be paid first to reimburse the makers of the supplemental capital contributions for any amounts contributed plus an 8% annual return; second, to the makers of the additional capital contributions for any amounts contributed plus an 8% annual return; third, until the holders of Class A Membership Interests have received the initial Class A amount (in the amount of $9,900,000 increased on a monthly basis at 1% p.a.), (a) 90% to the holders of Class A Membership Interests on a pro rata basis, provided that the pro rata distributions of the Class A members will be adjusted so that the makers of the supplemental capital contributions receive an additional 12% annual return at the expense of the Class A members that didn't make an additional capital contribution, and (b) 10% to the Parent, and, fourth, 70% to the holders of Class A Membership Interests on a pro rata basis and 30% to the Parent. The Debtor will be managed by LEHM, LLC, which will be established for the purpose of managing the Debtor after the effective date, and the steering committee. The Manager, with the assistance of the developer Focus Investment Group, LLC, will perform all of the pre-development and entitlement work that is necessary and reasonable to prepare the Property for sale and improve the entitlement and master planning status of the Property. The Manager will also market and sell the Property when commercially reasonable, subject to the approval of the Steering Committee and the holders of Class A Membership Interests. A copy of the amended plan is available for free at: http://bankrupt.com/misc/A-ngaE1_amendedPlan.pdf About A-NGAE1, LLC Las Vegas, Nevada-based A-NGAE1, LLC, a Nevada limited liability company, filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-18719) on May 12, 2010. Georganne W. Bradley, Esq., at Kaempfer Crowell Renshaw Gronauer & Fiorentino, in Las Vegas, Nev., serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed assets of $14,621,820 and liabilities of $9,900,000 as of the Petition Date. Affiliates B-SWDE3, LLC (Bankr. D. Nev. Case No. 09-29051), et al., filed separate Chapter 11 petitions. AFY INC: Ch.7 Trustee Wins Bid to Collect $4.5MM From Affiliate --------------------------------------------------------------- Chief Judge Thomas L. Saladino granted the request for summary judgment filed by the chapter 7 trustee of AFY Inc., in the lawsuit, Joseph H. Badami, Chapter 7 Trustee, v. Ainsworth Feed Yards, LLC, Adv. Proc. No. 10-4060 (Bankr. D. Neb.). The bankruptcy trustee filed the lawsuit to attempt to collect a scheduled $4.5 million debt allegedly owed by Ainsworth Feed Yards, LLC, to the Debtor. The debtor and the LLC are owned and operated by the same persons. The LLC has suggested the "debt" should more appropriately be characterized as a capital contribution. At a status conference in the case, the defendant's attorney stated that his conversations with the debtor's accountant led him to believe the transfer of funds should properly have been listed as a capital contribution rather than a debt. He also represented that the LLC has no assets from which this debt could be collected. The Court gave the parties time to conduct discovery from the accountant to clear up the matter, but the LLC has put forth no evidence in support of its position. As a result, the Court held that the defendant has not demonstrated the existence of a genuine issue of material fact, there is no triable controversy, and the trustee is entitled to summary judgment. A copy of the Court's June 1, 2011 Order is available at http://is.gd/kRFeXQfrom Leagle.com. About AFY Inc. Ainsworth, Nebraska-based AFY, Inc., doing business as Ainsworth Feed Yards Company, Inc., filed for Chapter 11 bankruptcy protection (Bankr. D. Neb. Case No. 10-40875) on March 25, 2010. Jerrold L. Strasheim, Esq., in Omaha, served as the Debtor's counsel. AFY estimated its assets and debts at $10 million to $50 million as of the bankruptcy filing. Affiliates Robert A. Sears and Korley B. Sears filed Chapter 11 petitions (Bankr. D. Neb. Case Nos. 10-40275 and 10-40277) on Feb. 12, 2010. Mr. Strasheim also represented the Sears Debtors. Disputes arose in the three cases as to who actually owned or controlled the voting rights of the shares of stock in AFY. The disputes were between Robert and Korley Sears on the one hand and members of the Sears family on the other hand. Partly due to this dispute over the ownership and control of AFY, on April 29, 2010, the Bankruptcy Court granted a motion to appoint a Chapter 11 trustee. Joseph H. Badami was subsequently appointed as the Chapter 11 trustee. Mr. Strasheim withdrew as attorney for AFY in June 2010. The case was converted to one under Chapter 7 on the trustee's motion. AIRPARK VILLAGE: To Reorganize Through New Debt or Asset Sale ------------------------------------------------------------- Airpark Village, LLC, filed with the U.S. Bankruptcy Court for the District of Colorado a plan of reorganization, dated May 17, 2011, which provides for the restructuring of the Company's debts and obligations through new financing, or provide for an orderly sale by auction of the "Project," and/or various tracts of property that comprise the Project no later than Nov. 1, 2011. The Debtor owns approximately 152 acres of real property in Fort Collins, Colorado commonly known by street and number as 2200 Airway Avenue, Fort Collins, Colorado 80524, termed as the "Project." The Project consists of several airplane hangers, a former airline terminal, several outbuildings as well as runways and taxiways. The Project is the former downtown airport in Fort Collins, Colorado. Airport operations ceased many years prior to the bankruptcy filing. Most, if not all, of the buildings on the Project are presently leased, including the airplane hangers and terminal building. These classes of claims under the Plan are unimpaired and are not entitled to vote: -- Class 1 Priority Claims -- Class 2 Larimer County Treasurer Secured Claims -- Class 3 City of Fort Collins, Colorado Secured Claims These classes of claims under the Plan are impaired and are entitled to vote: -- Class 4 Mile High Banks Secured Claim -- Class 5 Joseph Coors, Jr. (2nd Lien Position) Secured Claim -- Class 6 Mark McCullick Secured Claim -- Class 7 Joseph Coors, Jr. (4th Lien Position) Secured Claim -- Airpark Second Deed of Trust, LLC (5th Lien Position) Secured Claim Class 9 Unsecured Claims will receive a pro-rata distribution of the Net Proceeds which remain from sale or refinance of the Project after Classes 2 through 6 claims are paid in full. Class 9 will not be paid until after all senior creditor classes have been paid. Class 9 claimants will not receive more than payment of their Allowed Claims in full and will be paid not less than a pro-rata distribution of the sum of $100,000. Class 10 includes the Interests in Airpark Village, LLC held by the pre-confirmation members. Class 10 is impaired under the Plan. On the Effective Date of the Plan all membership interests in Airpark held by Class 10 will be retained by existing members, subject to the provisions of the Plan. The sale or refinancing of the Project is subject to the following additional requirements and conditions: a. The Debtor will sell or refinance the Project (or any other parcels as Debtor may reconfigure to enhance the sale) to enable the payoff of Classes 2 through 8 in their entirety on or before November 1, 2011. b. The Debtor will retain a Sheldon Good & Company as its auctioneer, to sell the Project prior to the Sale Date. The Debtor will work with the secured creditors on the terms of retention and agreed compensation of Sheldon Good & Company. All auctioneer fees, expenses and commissions of Sheldon Good & Company will be paid first out of the proceeds of any auction of the Project pursuant to an agreement between the Debtor and Sheldon Good & Company, in consultation with the secured creditors. c. All collateral securing the debt owed to the Bank, Mr. Coors, Mr. McCullick, and Airpark Second Deed of Trust, LLC, is to be auctioned subject to the creditors' credit bids as allowed under the Plan. The Debtor is allowed to have bidders submit separate bids on separate portions or parcels of the Project, but no bids will be accepted on any of the Debtor's property unless the aggregate net from the separate bids is sufficient to pay the Class 2 through 8 claims in full. The collateral for those creditors includes all real property and other rights in which those creditors hold a valid a security interest in their respective order of priority, subject to the terms of the Plan. d. The Bank is allowed to credit bid at the auction sale all that is owed to it as provided by the Plan in its order of priority. Mr. Coors is allowed to credit bid at the auction sale all that is owed to him under Classes 5 and 7, as provided by the Plan in his order of priority, respectively. Mr. McCullick is allowed to credit bid and Class 6 claim, as provided by the Plan in his order of priority. Airpark Second Deed of Trust, LLC, is allowed to credit bid and Class 8 claim, as provided by the Plan in its order of priority. e. The highest bidder at the auction will acquire the Project free and clear of liens, claims, interests and encumbrances. If a secured creditor's credit bid is the highest bid, the successful bidding secured creditor will acquire all of the Project sold free and clear of any liens, claims, interests and encumbrances without having to conduct a foreclosure sale. A full-text copy of the May 17 Plan is available for free at: http://bankrupt.com/misc/AIRPARKVILLAGE_plan.pdf Aurora, Colorado-based Airpark Village, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No. 11-12790) on Feb. 16, 2011. Kenneth J. Buechler, Esq., at Buechler Law Office LLC, serves as the Debtor's bankruptcy counsel. The Debtor disclosed $15,112,195 in assets and $8,564,158 in liabilities as of the Chapter 11 filing. ALL SERVICE: Files for Chapter 7 Bankruptcy Protection ------------------------------------------------------ Daily News Los Angeles reports that All Service Prime Enterprises Inc., at 2044 Ridgeview Drive, in Glendale, California, filed for Chapter 7 in Los Angeles County (Bankr. C.D. Calif. Case No. 11- 30746). The Company disclosed $1,900 in assets and $149,409 in debts. ALLY FINANCIAL: Promotes Several Executives From Within Firm ------------------------------------------------------------ Ally Financial Inc. announced management appointments designed to "fully leverage the senior leadership capability" within the Company as it continues its transformation. The appointments are effective immediately. Jeffrey Brown, 38, formerly Ally's corporate treasurer, has been named to the newly created position of senior executive vice president of Finance and Corporate Planning. In this role, Mr. Brown reports to Ally Chief Executive Officer Michael A. Carpenter and has oversight of the finance, treasury and corporate strategy activities for the company. James Mackey, 43, has been named as chief financial officer from his former role as interim CFO and reports to Brown. Mackey has responsibility for Ally's financial planning and analysis, accounting, investor relations and business planning. Christopher Halmy, 42, formerly Ally's structured funding executive, has been named corporate treasurer. In this role, he will report to Brown and have responsibility for global treasury activities, including funding and balance sheet management. Corey Pinkston, 44, will continue to lead Ally's strategic financing activities, reporting to Carpenter, including the process surrounding the proposed initial public offering and the company's plans to repay the U.S. taxpayer's investment. "One of Ally's key strengths over the past several years has been the dedication and capability of its management team, and I'm pleased to announce these new appointments," said Carpenter. "Each of these leaders has made significant contributions toward Ally's success, and more closely connecting these disciplines will enable the longer-term strategic planning that will be critical as we continue to grow the company." In addition to the above appointments, Ally also announced that William Muir, president and head of the company's Global Automotive Services operation, has postponed his previously announced retirement and will remain with the company indefinitely. "Bill has been a key part of Ally's success in the auto finance business, and I'm delighted he has decided to remain with the company during this important time," Carpenter said. Executive Biographies Jeffrey Brown - Brown joined Ally as corporate treasurer in March 2009 and has responsibility for all global treasury activities, including funding and balance sheet management. Prior to joining Ally, Brown was the corporate treasurer for Bank of America where he had responsibility for the core treasury functions for funding the company, capital management and managing interest rate risk. He was at Bank of America for 10 years, beginning his career in finance and later joining the balance sheet management division. He was also a member of the company's Asset/Liability Management committee. James Mackey - Mackey was appointed Ally interim CFO in April 2010 and joined the company in 2009 as group vice president and senior finance executive responsible for financial planning and analysis, investor relations, and corporate treasury finance. Prior to joining Ally, he served as CFO for the corporate investments, corporate treasury, and private equity divisions at Bank of America. Earlier in his tenure there, he served as managing director within the Global Structured Products group. Mackey also served in the financial institutions practice group at PricewaterhouseCoopers LLP, specializing in capital markets accounting and consulting. Chris Halmy - Halmy joined Ally in 2009 as the structured funding executive and was responsible for the strategy, planning and execution of securitizations and structured funding globally as well as managing bank relationships. Prior to joining Ally, Halmy was the Global Funding executive at Bank of America where he was responsible for all funding and liquidity activities. During his tenure at Bank of America, he also led the mortgage and auto securitization group. Prior to joining Bank of America in 1997, he held treasury, finance and accounting positions at MBNA America, Merrill Lynch & Co., JP Morgan & Co. and Deloitte & Touche, where he became a certified public accountant. About Ally Financial Ally Financial Inc., formerly GMAC Inc., -- http://www.ally.com/ -- is one of the world's largest automotive financial services companies. The company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3% stake. Private equity firm Cerberus Capital Management LP keeps 14.9%, while General Motors Co. owns 6.7%. The Company has tapped Goldman Sachs Group Inc. and Citigroup Inc. to advise on a range of issues, including strategic alternatives for the mortgage business and repayment of taxpayer funds. * * * In January 2011, Standard & Poor's Ratings Services raised its rating on the preferred stock of Ally Financial Inc. (Ally; B/Stable/C) to 'CC' from 'C'. The ratings firm noted that Ally improved its liquidity position and alleviated some funding pressure at its holding Company in recent months, making it easier to meet obligations on its preferred stock. Nevertheless, the Company faces significant debt maturities at its holding Company in 2011 and 2012, which is reflected in the 'CC' rating. As reported by the TCR on May 6, 2011, Standard & Poor's Ratings Services raised its long-term counterparty credit ratings on both Ally Financial Inc. (formerly GMAC Inc.) and subsidiary Residential Capital LLC (ResCap) to 'B+' from 'B'. The outlook on both ratings is stable. "Ally, an automobile- and mortgage- finance and servicing company, and ResCap, its mortgage subsidiary, improved their capital, credit quality, earnings, and liquidity in recent months," said Standard & Poor's credit analyst Brendan Browne. They also settled a material portion of their mortgage repurchase risk and have been profitable. In February 2011, Moody's Investors Service upgraded the issuer and senior unsecured ratings of Ally Financial Inc. and its supported subsidiaries to B1 from B3. Concurrently, Moody's upgraded the senior secured (second lien) and senior unsecured ratings of mortgage finance subsidiary Residential Capital LLC to Caa3 and Ca, respectively, from C. The rating outlook for both Ally and ResCap is stable. Moody's said the Ally and ResCap upgrades reflect a decline in ResCap's exposure to portfolio under-performance and mortgage repurchase risks and an associated decrease in contingent risks to Ally relating to its support of ResCap. Additional factors supporting Ally's upgrade include its strengthened liquidity and capital positions and prospects for continued profitability in its core auto finance and mortgage businesses based upon positive asset quality performance trends. ALLY FINANCIAL: Has Applied for NYSE Listing Under "ALLY" Symbol ---------------------------------------------------------------- Ally Financial Inc. filed with the U.S. Securities and Exchange Commission Amendment No. 2 to Form S-1 registration statement relating to The United States Department of the Treasury's offering to sell [ ] shares of common stock of Ally Financial Inc. Ally Financial Inc. will not receive any of the proceeds from the sale of shares of common stock by the selling stockholder. This is the Company's initial public offering and no public market exists for the Company's shares. The Company anticipates that the initial public offering price will be between $[ ] and $ [ ] per share. The Company has applied to list the common stock on the New York Stock Exchange under the symbol "ALLY". The selling stockholder has granted the underwriters the right to purchase up to [ ] additional shares of common stock to cover over-allotments, if any, at the public offering price, less the underwriters' discount, within 30 days from the date of this prospectus. Concurrently with this offering, Treasury is also making a public offering of [ ] tangible equity units issued by the Company. Treasury has granted the underwriters of that offering the right to purchase up to [ ] additional Units to cover over- allotments, if any, at the public offering price of the Units, less the underwriters' discount for the Units, within 30 days from the date of the prospectus for the concurrent Units offering. The closing of the offering of Units is conditioned upon the closing of the offering of the Company's common stock, and the closing of the offering of the Company's common stock is conditioned upon the closing of the offering of Units. A full-text copy of the amended prospectus is available for free at http://is.gd/qYqegV About Ally Financial Ally Financial Inc., formerly GMAC Inc., -- http://www.ally.com/ -- is one of the world's largest automotive financial services companies. The company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3% stake. Private equity firm Cerberus Capital Management LP keeps 14.9%, while General Motors Co. owns 6.7%. The Company has tapped Goldman Sachs Group Inc. and Citigroup Inc. to advise on a range of issues, including strategic alternatives for the mortgage business and repayment of taxpayer funds. * * * In January 2011, Standard & Poor's Ratings Services raised its rating on the preferred stock of Ally Financial Inc. (Ally; B/Stable/C) to 'CC' from 'C'. The ratings firm noted that Ally improved its liquidity position and alleviated some funding pressure at its holding Company in recent months, making it easier to meet obligations on its preferred stock. Nevertheless, the Company faces significant debt maturities at its holding Company in 2011 and 2012, which is reflected in the 'CC' rating. As reported by the TCR on May 6, 2011, Standard & Poor's Ratings Services raised its long-term counterparty credit ratings on both Ally Financial Inc. (formerly GMAC Inc.) and subsidiary Residential Capital LLC (ResCap) to 'B+' from 'B'. The outlook on both ratings is stable. "Ally, an automobile- and mortgage- finance and servicing company, and ResCap, its mortgage subsidiary, improved their capital, credit quality, earnings, and liquidity in recent months," said Standard & Poor's credit analyst Brendan Browne. They also settled a material portion of their mortgage repurchase risk and have been profitable. In February 2011, Moody's Investors Service upgraded the issuer and senior unsecured ratings of Ally Financial Inc. and its supported subsidiaries to B1 from B3. Concurrently, Moody's upgraded the senior secured (second lien) and senior unsecured ratings of mortgage finance subsidiary Residential Capital LLC to Caa3 and Ca, respectively, from C. The rating outlook for both Ally and ResCap is stable. Moody's said the Ally and ResCap upgrades reflect a decline in ResCap's exposure to portfolio under-performance and mortgage repurchase risks and an associated decrease in contingent risks to Ally relating to its support of ResCap. Additional factors supporting Ally's upgrade include its strengthened liquidity and capital positions and prospects for continued profitability in its core auto finance and mortgage businesses based upon positive asset quality performance trends. ALTER COMMS: Confirmation Order Reversed to Allow Competing Plans ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the decision by the U.S. Supreme Court in a 1999 case called 203 North LaSalle means that an expert's opinion about value "simply cannot suffice as it does not expose the stock in the reorganized debtors to the actual market," a U.S. District Court in Maryland ruled on June 3. Mr. Rochelle relates that 203 North LaSalle involved a cramdown, where existing shareholders retained the stock even though the class of unsecured creditors voted against the plan. The Bankruptcy Code provisions allowing cramdown require that the plan be "fair and equitable" if there is a dissenting class. Interpreting the fair and equitable requirement in the LaSalle case, the Supreme Court ruled that existing shareholders cannot retain ownership through a cramdown without subjecting the business to a "market valuation." The high court didn't specify what would suffice as market valuation. According to Mr. Rochelle, in H.G. Roebuck & Sons Inc. v. Alter Communications Inc., U.S. District Judge Richard D. Bennett in Baltimore set aside confirmation of a reorganization plan using cramdown, ruling that LaSalle requires either competitive bidding or ending the bankrupt company's exclusive right to propose a Chapter 11 plan. Because the objecting creditor said it would pay more for the new stock, Judge Bennett reversed the plan's approval and sent the case back to the bankruptcy court with instructions to allow the filing of competing plans. About Alter Communications Based in Baltimore, Maryland, Alter Communications publishes the Baltimore Jewish Times. Other publications include the magazine Style, with 90,000 circulation, and Chesapeake Life, with a circulation of 57,000. Alter Communications filed for Chapter 11 (Bankr. D. Md. Case No. 10-18241) on April 14, 2010. Alan M. Grochal, Esq., and Maria Ellena Chavez-Ruark, Esq., at Tydings and Rosenberg, in Baltimore, serve as the Debtor's bankruptcy counsel. The Debtor estimated assets and debts between $1 million and $10 million in its Chapter 11 petition. A judgment in favor of the printer precipitated the Chapter 11 filing. The Debt or successfully appealed after the bankruptcy court approved the reorganization plan in a confirmation order in December. Insiders retained ownership of 85 percent of the new stock by paying $35,000. AMERICAN PACIFIC: Amends Plan to Outline Treatment of Creditors --------------------------------------------------------------- American Pacific Financial Corporation amended its plan of liquidation on April 27, 2011, to provide for the classification and treatment of claims. Class 1 Secured Creditors Class 1 Secured Creditors, consisting of all Allowed Secured Claims secured by the Debtor's vacant land in San Bernardino County, California, are impaired under the Plan and are entitled to vote. Class 1A through 1H will retain their liens on the Property securing payment of their Allowed Secured Claims. Those claimholders will have the election to either: (1) receive their collateral on the Effective Date, or (2) provided all holders of the liens on any particular parcel agree, to have their collateral assigned to, managed and marketed by the Liquidating Trust for a period of up to five years. At the conclusion of the five-year period, all collateral securing Class 1 claims will either be sold or abandoned. If Class 1A-1H creditors elect to have their collateral assigned to the Trust, and if the Liquidating Trustee agrees to accept the Collateral, the Trust will manage and sell the collateral and pay all holding costs associated with the collateral. In that event, Class 1 will receive the Net Proceeds from sale of their collateral. Net Proceeds will be distributed to each holder of an Allowed Secured Claim in accordance with the priority of their liens. All collateral will be sold free and clear of liens, claims and encumbrances except for San Bernardino's tax lien classified as Claim 1I. Each holder of an Allowed Class 1 Claim will have the right to credit bid at the sale of any of the Class 1 collateral; however, the credit bid must include a cash component in an amount sufficient to satisfy: (1) the costs of the Liquidating Trust for marketing and selling the collateral; (2) and an amount sufficient to satisfy the allocated administrative overhead of the trust, trustee's fees and related professional fees and (3) satisfaction of the Class 1I claim relating to the parcel being sold. Class 1I Creditor Class 1I (San Bernardino County) will retain its liens securing payment of its Allowed Secured Claim. On or before the Effective Date, at the election of the Liquidating Trustee, provided, and to the extent the holders of claims in Class 1A through 1H agree, the property securing the Class 1I Claim will either be abandoned or transferred to the Liquidating Trust subject to the Class 1I claim. If the Liquidating Trust acquires the property, the Liquidating Trustee will pay the Class 1I Claim over 5 years and the Class 1I payment will constitute a deduction from the Net Sale Proceeds. Payments will start on the Effective Date. The claim will be paid in full with all applicable costs, fees, charges, (including late charges) and interest in accordance with Sections 506(b) and 511 of the Bankruptcy Code and in the manner described in Section 1129(c). The secured claimant will retain its liens until the secured claim is paid in full. The current taxes for the year 2011-12 will also be paid timely in the normal and ordinary course of business in full with all applicable costs, fees, charges, (including late charges) and interest. The Class 1I Claim will be paid upon the sale or transfer of the real property, to the extent sale proceeds are sufficient to pay the claim. Payment will be made at the close of escrow and directly from the sale proceeds in full. In the event the Trust abandons any parcel of real property securing the Class 1I Claim, the Secured Tax Claim will continue to remain as a lien on that parcel and the Debtor, the Estate and the Trust will be not liable for the Secured Tax Claim. The Trust will have no liability for any deficiency owing to Class 1I after its collateral is sold or abandoned. All property securing the Class 1I claim will be sold or abandoned within five years from the Effective Date. Class 2 Priority Creditors Class 2 Priority Creditors are impaired. Class 2 Priority Wage and Tax Claims will receive trust certificates for payment of their claims without interest. The Priority Wage claims will be paid from liquidation of Trust Assets before payment to Class 3 and Class 4 Claims. Classes 3 and 4 Unsecured Creditors Classes 3 and 4 Unsecured Creditors are impaired. General unsecured creditors are divided into two classes. Class 4 is an "administrative convenience" class, consisting of small claims ($5,000 or less). Class 4 will receive a cash payment of 50% of their claims out of the first Trust distribution after Administrative Claims and Class 1 and 2 Claims are paid in full. The remaining creditors (Class 3) will receive beneficial interests in a Creditor's Trust which will entitle them to the Net Sale Proceeds of the Trust Assets. The Trustee, and will be responsible for funding the costs and expenses of the Trust, including Trustee compensation and expense reimbursement, from Trust Assets. A full-text copy of the 2nd Amended Plan, dated April 27, 2011, is available for free at http://ResearchArchives.com/t/s?7621 About American Pacific Financial Las Vegas, Nevada-based American Pacific Financial Corporation has been involved in private equity and sub-debt investment in various types of companies since 1978. APFC's assets include loans and investments in distressed real estate development projects and in other types of distressed operating companies throughout various industries. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-27855) on Sept. 21, 2010. Kaaran Thomas, Esq., and Ryan J. Works, Esq., at McDonald Carano Wilson, LLP, in Las Vegas, Nevada, represent the Debtor. The Company disclosed $16,597,647 in assets and $160,977,435 in liabilities as of the Chapter 11 filing. As reported in the TCR on April 27, 2011, August B. Landis, the Acting U.S. Trustee for Region 17, asked the U.S. Bankruptcy Court for the District of Nevada to appoint a Chapter 11 trustee in the bankruptcy case of American Pacific Financial Corporation. The hearing on the Motion was set for April 18, 2011, but the Court rescheduled it to May 4, 2011 at 9:30 a.m. AMT LLC: Sec. 341 Creditors' Meeting Set for June 30 ---------------------------------------------------- The United States Trustee for the Northern District of Florida will convene a meeting of creditors pursuant to Sec. 341(a) of the Bankruptcy Code in the chapter 11 case of AMT LLC on June 30, 2011, at 11:30 a.m. at Pensacola (Rm. 66, Winston E. Arnow Fed. Bldg., 100 N. Palafox St.). Proofs of claim are due Sept. 30, 2011. Government proofs of claim are due Dec. 27, 2011. The Debtor has obtained an order from the Court authorizing it to continue operations while in bankruptcy. AMT, LLC, in Destin, Florida, filed for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 11-30933) on May 27, 2011. Judge William S. Shulman presides over the case. J. Steven Ford, Esq., at Wilson, Harrell, Farrington, serves as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in debts. The petition was signed by Michael Smallwood, its manager. AMT LLC: Asks Court to Approve Wilson Harrell Employment -------------------------------------------------------- AMT LLC asks the Bankruptcy Court to approve its hiring of J. Steven Ford, Esq., at Wilson, Harrell, Farrington, Ford, Wilson, Spain & Parsons P.A., to serve as its counsel under a general retainer. Mr. Ford attests that his firm has no interest adverse to the Debtor or its estate in any matters upon which they are to be engaged. AMT, LLC, in Destin, Florida, filed for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 11-30933) on May 27, 2011. Judge William S. Shulman presides over the case. In its petition, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in debts. The petition was signed by Michael Smallwood, its manager. ANGEL ACQUISITION: Continues Development of Angels in Action ------------------------------------------------------------ Angel Acquisition Corp announced that Gate Global Impact, LLC, has increased their involvement and participation in Angels In Action (www.angelsinaction.tv). The Company is working on strategic improvements of the AIA platform and a roll-out plan. The Company will update its shareholders on a regular basis as its partnership with Gate Impact enhances and accelerates its capabilities to penetrate and deliver good via its micro-lending efforts specifically targeting US Based entrepreneurs. Angels in Action brings together entrepreneurs and investors in the underserved markets in the United States. AIA provides an opportunity to help America fill the financial void that has not been adequately addressed by the U.S. banking system. About GATE Global Impact, LLC Gate Global Impact, LLC, is the impact investing-focused subsidiary of GATE Technologies, LLC. Launched in 2011, GATE Impact provides market infrastructure and related services for the emerging impact investment and banking industries - public and private investments with a sustainable social or environmental component that also generate a healthy rate of financial return. (www.gateimpact.com) About Angel Acquisition Carson City, Nev.-based Angel Acquisition Corp. was incorporated under the laws of the state of Nevada on March 10, 1999, under the name Palomar Enterprises, Inc. On February 5, 2008, the Company changed its name to Angel Acquisition Corp. to properly reflect the change in business direction. The Company assists private companies in the process of going public as well as being a licensed mortgage broker and developer. As reported by the TCR on April 13, 2011, Gruber & Company, LLC, Lake Saint Louis, Missouri, expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The independent auditor noted that the Company has been unable to generate sufficient operating revenues and has incurred operating losses. The Company's balance sheet at March 31, 2011, showed $617,760 in total assets, $1.31 million in total liabilities and a $694,727 total stockholders' deficit. APOLLO MEDICAL: Raouf Khalil Resigns as Director ------------------------------------------------ Raouf Khalil resigned as a director of Apollo Medical Holdings, Inc., effective June 1, 2011. About Apollo Medical Glendale, Calif.-based Apollo Medical Holdings, Inc., provides hospitalist services in the Greater Los Angeles, California area. Hospitalist medicine is organized around the admission and care of patients in an inpatient facility such as a hospital or skilled nursing facility and is focused on providing, managing and coordinating the care of hospitalized patients. As reported in the Troubled Company Reporter on June 2, 2010, Kabani & Company, Inc., in Los Angeles, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for the fiscal year ended Jan. 31, 2010. The independent auditors noted that the Company has an accumulated deficit of $1.24 million as of Jan. 31, 2010, working capital of $1.07 million and cash flows used in operating activities of $338,141. The Company reported a net loss of $156,331 on $3.89 million of revenue for the year ended Jan. 31, 2011, compared with a net loss of $196,280 on $2.44 million of revenue during the prior year. The Company's balance sheet at Jan. 31, 2011, showed $1.25 million in total assets, $1.34 million in total liabilities, and a $83,194 total stockholders' deficit. ARCH COAL: Moody's Confirms 'Ba3' CFR; Outlook Stable ----------------------------------------------------- Moody's Investors Service confirmed the Ba3 corporate family rating (CFR) of Arch Coal, Inc. (Arch Coal), assigned a B1 rating to the company's proposed $2 billion senior note offering, and confirmed the B1 ratings for the company's existing senior notes, including those issued by Arch Western Finance, LLC. This concludes Moody's review for possible downgrade that began on May 2, 2011, when Arch Coal announced its $3.8 billion acquisition of International Coal Group, Inc. (ICG). If, as expected, Arch Coal retires all of ICG's debt in connection with the merger, Moody's will withdraw ICG's ratings, including its B2 CFR. Arch Coal has a stable rating outlook. Arch Coal plans to finance the ICG merger with $2 billion of new senior notes, approximately $550 million of borrowings under its amended and restated credit facility, and $1.3 billion of new common equity. ICG's debt is planned to be retired in connection with the merger. The company priced the new equity on June 2, issuing 48 million shares excluding any over-allotments. On May 31, the waiting period under the Hart-Scott-Rodino Act expired, which leaves the tender offer for the ICG stock as the primary hurdle to complete before the ICG transaction can close. Arch Coal expects the merger to conclude at mid-June. RATINGS RATIONALE Moody's rating confirmation considers Arch Coal's improving financial performance, which has seen margin expansion stemming from rising coal prices, as well as the prospects for further strengthening of credit metrics and cash flow due to strong metallurgical (met) coal prices and international coal demand. As a result, Moody's believes leverage, as measured by adjusted debt to EBITDA, will improve from its pro forma level of 4.4x as of March 31, 2011. The merger with ICG improves Arch Coal's east-west balance of revenues and EBITDA and increases exposure to higher- priced eastern U.S. coals and met coal, especially as the Tygart Valley #1 mining complex is developed between now and 2014. The rating confirmation also considers the potential to realize the $70 million of marketing, operating and administrative synergies that should accrue from the business combination. Arch Coal's Ba3 CFR also reflects its geographic and operating diversity, low level of legacy liabilities, extensive high quality and low-cost reserves, relatively stable operating profile, and access to multiple transportation options. Factors that constrain the rating include high leverage, high capital expenditures, possible weakness for thermal coal prices in the wake of flat coal-fired electricity generation and low natural gas prices, the uncertain longevity of record high met coal prices, inflationary cost pressures, and the inherent geological and operating risk associated with mining. Furthermore, coal mine productivity and costs have been adversely impacted by more strict mine safety inspections and greater difficulty in permitting mines and refuse disposal sites due to heightened environmental concerns. Arch Coal's stable outlook reflects its strong liquidity pro forma for the new financing arrangements, the stability of demand for thermal coal, and favorable met coal demand and prices. Credit metrics that would indicate a readiness for an upgrade include sustainable leverage below 3.3x EBITDA (all ratios include Moody's adjustments), free cash flow to debt above 7.5%, and EBIT to interest above 2.8x, as well as the successful integration of ICG. Factors that could lead to a downgrade include a deterioration of coal prices, persistent cost increases, and permitting, regulatory, or litigation matters that impact output and costs. An increase in leverage above 4.5x EBITDA, persistently negative free cash flow, or an erosion of liquidity would be signs pointing to a possible downgrade. The principal methodology used in rating Arch Coal was the Global Mining Industry Methodology, published in May 2009. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Arch Coal, Inc., headquartered in St. Louis, Missouri, is one of the largest coal companies in the U.S. and had revenues of approximately $3.2 billion in 2010. International Coal Group, Inc., headquartered in Scott Depot, West Virginia, operates 13 coal mining complexes in Central Appalachia, Northern Appalachia, and the Illinois Basin. ICG had revenues of approximately $1.2 billion in 2010. ATHENS INVESTORS: Owes About $53,000 in Taxes to Athens Country --------------------------------------------------------------- Jim Phillips at the Athens News reports that in a court filing connected to a foreclosure action on the Baymont Inn & Suites in Athens, Ohio, the Athens County treasurer has indicated that the company that operates the hotel owes the county more than $53,620 in delinquent property taxes. According to the report, the amount puts the 100-room Baymont's owners, a company called Athens Investors, LLC, among the parties with the top 10 highest overdue-tax bills in the county. On May 2, a lender called CB 2010, LLC, based in New York, filed a foreclosure action in Athens County Common Pleas Court, naming as defendants Athens Investors, and also serving notice of the suit on People's Bank in Marietta and the Athens County treasurer, says Mr. Phillips. Athens News relates that the complaint alleged that in 2006, Athens Investors entered into a loan agreement with Republic Bank to borrow $3.6 million. To secure payment of the loan, the hotel also signed an agreement to assign rents to the lender, and signed over the mortgage on the building. Since the loan agreement was signed, Citizens Bank, which merged with Republic Bank, has assigned its interest in the agreement to CB 2010. The foreclosure complaint claims that Athens Investors is in default on the note and mortgage. As of April 25, it claims, the unpaid balance was almost $3.14 million, plus accrued and unpaid interest of more than $256,000, and late fees of more than $21,000. CB 2010 has asked Judge L. Alan Goldsberry to grant it judgment of more than $3.4 million against Athens Investors, plus continuing interest on the principal of the loan. It wants the mortgage foreclosed, and for the judge to order Athens Investors to sell off its interests in the hotel and apply the money to its debt, says Mr. Phillips. Based in Dublin, Ohio, Athens Investors LLC dba Baymont Inn & Suites- Athens filed for Chapter 11 bankruptcy protection on June 25, 2010 (Bankr. S.D. Ohio Case No. 10-57646). Judge C. Kathryn Preston presides over the case. Robert J. Morje, Esq., represents the Debtor. The Company estimated both assets and debts of between $1 million and $10 million. BARNES BAY: Anguilla Re Wants Changes in Releases under Plan ------------------------------------------------------------ Anguilla RE, LLC, asks the U.S. Bankruptcy Court for the District of Delaware to deny approval of the disclosure statement explaining the plan of reorganization filed by Barnes Bay Development, Ltd., and its debtor affiliates unless it is modified. Anguilla RE, which says it is an assignee of David Small's interests, complains that the disclosure statement fails to detail the "good and valuable consideration" offered by released parties to justify their releases. Kathleen A. Murphy, Esq., at Reed Smith, LLP, in Wilmington, Delaware, on behalf of Anguilla RE, points out that the Plan seeks a release of the guaranty provided by Lubert Adler, a non-debtor affiliate of Barnes Bay, of the Debtors' obligations under a purchase and sale agreement entered with David B. Small for the purchase of a unit at the Villas of Anguilla resort. Mr. Small, through a series of assignments, assigned his interest in the PSA to Anguilla RE. 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. C.R. Hodge & Associates is the Committee's foreign counsel. FTI Consulting, Inc., serves as the Committee's financial advisors. BERKELEY DELAWARE: Files Schedules of Assets and Liabilities ------------------------------------------------------------ Berkeley Delaware Court, LLC, filed with the U.S. Bankruptcy Court for the Southern District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $20,000,000 B. Personal Property $0 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $13,100,000 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $612,428 ----------- ----------- TOTAL $20,000,000 $13,712,428 San Diego, California-based, Berkeley Delaware Court, LLC, filed for Chapter 11 protection (Bankr. S.D. Calif. Case No. 11-07128) of April 29, 2011. Dennis Winters, Esq., at Winters Law Firm, represents the Debtor in its restructuring effort. BERNARD L. MADOFF: Ex-Employee Pleas Guilty to Falsifying Records ----------------------------------------------------------------- Chad Bray, writing for Dow Jones Newswires, reports that Eric S. Lipkin, 37, a former employee of Bernard Madoff, admitted to creating false records that were submitted to the Securities and Exchange Commission and lying to a bank to receive a construction loan. Mr. Lipkin said he made fake records that falsely reflected trading positions in some Madoff customers' accounts. He also said that he falsely reported certain people as being Madoff employees when they weren't, so that they could receive 401(k) and other retirement benefits. Dow Jones notes that in his plea, Mr. Lipkin made no statement as to whether he knew about the underlying Ponzi scheme. His lawyer declined to comment after the hearing. Mr. Lipkin worked in the investment-advisory arm of Bernard L. Madoff Investment Securities LLC. He is is the third person, beyond Mr. Madoff himself, to admit guilt in connection with the decades-long fraud since it came to light 2-1/2 years ago. Dow Jones also reports that Mr. Lipkin, without or denying wrongdoing, separately agreed to a partial judgment settling a civil fraud lawsuit filed by the SEC on Monday. In its complaint, the SEC alleging he helped Mr. Madoff mislead investors and regulators about Mr. Madoff's fraud for more than a decade. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping $50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of Feb. 18, 2011, a total of $6.85 billion in claims by investors has been allowed, with $791.1 million to be paid by the Securities Investor Protection Corp. Investors are expected to receive additional distributions from money recovered by Mr. Picard from lawsuits or settlements. BERNARD L. MADOFF: JPMorgan Chase Seeks to Dismiss 13 of 21 Claims ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that JPMorgan Chase & Co. filed papers in U.S. District Court on June 3 seeking dismissal of 13 of 21 claims brought against the New York-based bank by the trustee for Bernard L. Madoff Investment Securities Inc. The trustee's suit, originally filed in bankruptcy court, seeks $6.4 billion. The trustee is suing JPMorgan for its role as Mr. Madoff's principal bank and broker. The suit alleges among other things that JPMorgan aided and abetted the fraud and ignored its anti-money-laundering obligations. JPMorgan, according to the report, contends the trustee has no right to sue for the recovery of damages sustained by Madoff customers. Mr. Rochelle discloses the trustee is already on record arguing that the rule applying to ordinary bankruptcy trustees don't apply in broker liquidations under the Securities Investor Protection Act. The Madoff trustee says that SIPA gives him the right to sue for damages to customers because provisions in the act allow the trustee to take over customers' claims when they are paid with money from the Securities Investor Protection Corp. Mr. Rochelle says that JPMorgan argues that other claims in the lawsuit must be dismissed under a federal law called the Securities Litigation Uniform Standards Act. The trustee is already on record citing rulings by other courts saying SLUSA doesn't apply to bankruptcy trustees. On the merits of the claims, JPMorgan contends the complaint is legally insufficient because it never alleges the bank actually knew Madoff was a fraud. It only says the bank "could" or "should" have known it was a fraud, JPMorgan argued. JPMorgan, Mr. Rochelle notes, isn't attempting to have the district court dismiss claims alleging the receipt of preferential payments or fraudulent transfers. JPMorgan's motion to dismiss will be decided by U.S. District Judge Colleen McMahon in New York. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping $50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of Feb. 18, 2011, a total of $6.85 billion in claims by investors has been allowed, with $791.1 million to be paid by the Securities Investor Protection Corp. Investors are expected to receive additional distributions from money recovered by Mr. Picard from lawsuits or settlements. BIOPACK ENVIRONMENTAL: Awaits Judgment on Landlord's Claim ---------------------------------------------------------- The People's Court of Guandong Jiangmen Pengjiang District held a hearing relating to Biopack Environmental Solution Inc.'s landlord's claim for unpaid rent for the Company's factory plus penalty interest and other claims. The landlord has made a claim for payment of overdue rent in the amount of RMB 1,236,000, penalty interest in the amount of RMB 1,067,930 and a claim for potential loss of income in the amount of RMB 618,000, for a total amount claimed of RMB 2,921,930 (approximately $451,379). At the hearing, the Company was informed that the court intends to issue a judgment on June 14, 2011. If a settlement with the landlord with respect to this matter is not reached by then, the Company expects that its factory assets will be seized and the process of selling them by auction to satisfy the claim will begin on June 14, 2011. The Company anticipates the enforcement date will be effective 7 to 10 days from June 14, 2011. The Company understands that the court will randomly select a valuation company and an auction company to assist it in this process and that this auction proceeding will last two to three months. Once the assets are sold, the court will decide on the distribution of the proceeds from the auction proceeding. About Biopack Environmental Kowloon, Hong Kong-based Biopack Environmental Solutions Inc. develops, manufactures, distributes and markets bio-degradable food containers and disposable industrial packaging for consumer products. The Company supplies its biodegradable food containers and industrial packaging products to multinational corporations, supermarket chains and restaurants located across North America, Europe and Asia. The Company has a factory in Jiangmen City in the People's Republic of China. The Company reported a net loss $472,596 on $3,594 of revenue for the three months ended March 31, 2011, compared with net profit of $28,966 on $68,639 of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $959,834 in total assets, $3.45 million in total liabilities and a $2.49 million total stockholders' deficit. Going Concern As reported by the TCR on April 26, 2011, Wong Lam Leung & Kwok C.P.A. Limited, in Hong Kong, expressed substantial doubt about Biopack Environmental's ability to continue as a going concern. The independent auditors noted that the Company incurred a net loss of $2.4 million for the year ended Dec. 31, 2010, and had an accumulated deficit of $7.3 million and a working capital deficit of $2.2 million as of Dec. 31, 2010. In the Form 10-Q, the Company noted that it had a loss for the three month period ended March 31, 2011, of $472,596 and, on March 31, 2011, it had an accumulated deficit of $7,749,519 and a working capital deficit of $2,287,474. These conditions raise substantial doubt as to the Company's ability to continue as a going concern, according to the quarterly report. The Company said that its future is dependent upon its attaining profitable operations and raising the capital it will require in order to achieve profitable operations through the issuance of equity securities, borrowings or a combination thereof. BORDERS GROUP: Hopes to File Chapter 11 Plan by End of June ----------------------------------------------------------- Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York extended Borders Group, Inc. and its debtor affiliates' exclusive deadline to formulate a Chapter 11 plan and solicit acceptances of that plan, after a lawyer for the bookseller said the chain hopes to have a plan in place to sell most or all of the Company's assets by the end of the month, Joseph Checkler of The Wall Street Journal reports. Judge Glenn extended the Debtors' exclusive deadlines to: (i) file a Chapter 11 plan through and including October 14, 2011, and (ii) solicit acceptances of that plan through and including December 13, 2011. The extension order is without prejudice to the Debtors' rights to seek a further extension or extensions of the Exclusive Periods, or of parties-in-interest to seek reductions of the same Periods. Andrew K. Glenn, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, bankruptcy counsel for Borders, told the bankruptcy judge at the June 2, 2011, hearing that Company's sale process is significantly more robust than it was weeks ago, with multiple parties expressing interest in a majority or nearly all of Borders' stores, Reuters relays in another report. According to the Reuters report, Mr. Glenn believes the sale process could conclude in two to four weeks. The Journal noted that while Mr. Glenn did not rule out the possibility that Borders could eventually come up with a plan to reorganize, a plan to sell stores to a third party is more imminent. The Journal was first to report on June 1, 2011, that Borders is in talks with private equity firm Gores Group LLC for the sale of more than 225 of the bookseller's 405 remaining outlets. Mr. Glenn stated that he expects to file a motion to sell the Company within two to four weeks but "hopefully two," The Journal relates. "We've been getting slaughtered in the press," Mr. Glenn stated at the hearing, citing recent reports with respect to Borders' request to reject a master licensing agreement with Seattle's Best Coffee, Reuters relays. "We want to send a message to everyone that we're proceeding along the right path and will continue to proceed along the right path," the lawyer said. "We have made significant progress to date and remain focused on moving forward as expeditiously as possible," Borders spokesperson Stefanie Goodsell added after the June 2 hearing, The Journal relays. On Borders being "slaughtered in the press," Mr. Glenn has all but accused the Official Committee of Unsecured Creditors of leaking to the media information about the identity of a potential buyer, The Journal states. A creditors' committee counsel denied that charge, The Journal notes. Counsel to the Creditors' Committee, Bruce Buechler, Esq., at Lowenstein Sandler PC, in New York, told Judge Glenn that creditors would like to see a sale but have not been able to get enough information as to how Borders intends to exit bankruptcy, Serena Saitto and Tiffany Kary of Bloomberg News report in another article. "I don't know if there is a plan of reorganization, or a plan of liquidation that would be filed after a sale," the Creditors' Committee lawyer stated. Before the entry of the Court's ruling, the Creditors' Committee objected to Borders' request to extend the Exclusive Periods. The Creditors' Committee complained that the Debtors neither have a stalking horse bidder nor a draft Chapter 11 plan. Mr. Buechler also pointed out that the Debtors have reported losses at an alarming rate -- the Debtors' monthly operating reports for the period from the Petition Date to April 30, 2011, a mere 2 1/2 months after filing for bankruptcy, show more than $180 million in losses. According to Mr. Buechler, the Creditors' Committee is concerned that granting the Debtors an additional four months of untethered exclusivity will: (i) create opportunities for the Debtors to pursue strategies inconsistent with their current mandate and working agreement with the Creditors' Committee to go forward with a sale process; (ii) handcuff the Creditors' Committee; and (iii) ultimately prove harmful and expensive to the estates if the Debtors were to file a plan of reorganization without Committee approval. The Creditors' Committee thus proposed (i) that it and the Debtors be granted the exclusive right to file a plan within the extended period, or in the alternative, (ii) the 120-day extension should not be granted. In response, Mr. Glenn, counsel to the Debtors, emphasized that it was at the Creditors' Committee's request that the Debtors have pursued a dual-track process of a potential sale of all of their assets and a stand-alone plan of reorganization. The Creditors' Committee's dislike of the Debtors' proposed business plan or any of the Debtors' other proposals in these Chapter 11 cases is not a basis to terminate exclusivity, Mr. Glenn contended. Notably, the Creditors' Committee does not have its own plan proposal; nor does it claim to have done any preliminary work formulating its own plan, he pointed out. More importantly, the sale process that the Creditors' Committee demanded is now at its most sensitive stage, Mr. Glenn told the bankruptcy judge. "Terminating exclusivity will send the wrong message to buyers and create confusion in the process without any benefit to the Debtors' estates," Mr. Glenn insisted. Court Explains Exclusivity Ruling Judge Glenn entered a 15-page memorandum of opinion, holding that the Debtors have established cause to extend exclusivity. Granting the Debtors' Exclusivity Motion, however, does not mean that developments in the Debtors' Chapter 11 case -- for better or for worse -- might justify reducing or increasing the Exclusive Periods in the future, the bankruptcy judge clarified. Judge Glenn held that the Debtors have provided evidence of the substantial efforts they have been making to stabilize their business and develop a viable exit strategy. "While the Creditors' Committee raised valid concerns, its objection is premature at this early stage of this very large case," the bankruptcy judge opined. He further noted that if significant adverse developments occur in these Chapter 11 case during the Debtors' exclusivity period, the Creditors' Committee may seek to reduce the exclusive periods for cause. "At this stage, however, the Creditors' Committee's and the Debtors' time is better spent working cooperatively to develop an appropriate exit strategy," Judge Glenn said. Judge Glenn recognized that the Debtors' illiquid assets make it difficult for the Debtors to market and sell them within the first 120 days of their Chapter 11 cases. He, however, found that the Creditors' Committee has not shown that the Debtors are "dragging their heels" in pursuing a sale option. The sale process is likely to proceed most efficiently if the Debtors retain exclusivity and can manage the sale process, Judge Glenn said. Any Section 363 sale of substantially all of the Debtors' business as a going concern is likely to be followed by a Chapter 11 liquidation plan, usually not a time-consuming process to develop, the bankruptcy judge added. Judge Glenn noted that at this early stage, he cannot conclude that a stand-alone reorganization plan would not be viable. Still, he found that the Debtors appear willing to work with the Committee and share draft plan proposals once they know the outcome of the sale process and the Debtors have made further progress in formulating their business plan. He also acknowledged that the June 1, 2010 claims bar date is important so that the Debtors can understand the number, nature and amount of valid claims against their estates. The Debtors need a reasonable amount of time to review and evaluate these claims, the bankruptcy judge added. Judge Glenn said it is important for him to consider the Debtors' DIP Loan. The Debtors have stated that the termination of exclusivity will cause them to default under the DIP Loan. "Such a result would lead to disastrous consequence for the Debtors and their creditors," Judge Glenn found. Terminating exclusivity at this time would create a situation where the estates could be saddled with multiple and competing plans, the bankruptcy judge concluded. For the reasons cited, Judge Glenn overruled the Creditors' Committee Objection. A full-text copy of the Debtors' Memorandum of Opinion dated June 2, 2011, is available for free at: http://bankrupt.com/misc/Borders_June2ExclusivtyOpinion.pdf 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: Seattle's Best Reacts to Contract Rejection ---------------------------------------------------------- Seattle's Best Coffee LLC and Bunn-O-Matic Corporation oppose the Borders Group's request to reject to the SBC Master Licensing Agreement. Counsel to Hugh R. McCullough, Esq., at Davis Wright Tremaine LLP, in Seattle, Washington, counsel to SBC, states that SBC understands that Borders, Inc. can reject the Licensing Agreement; however, SBC objects to Borders' stated business rationale for rejection. Specifically, SBC disagrees that the financial terms of the Licensing Agreement are "excessive." SBC's terms are competitive with comparable industry licensed/franchised arrangements, Mr. McCullough asserts. Contrary to Borders' allegation that it lacked flexibility in food sourcing, Borders has always had the right under the Agreement to procure food and other products from other sources, subject only to SBC's approval as to quality, he clarifies. SBC does not believe that Borders will ultimately save money by rejecting the Licensing Agreement and believes Borders' decision to reject the agreement is ill-advised, Mr. McCullough specifies. Mr. McCullough further contends that Borders is not entitled to both terminate the Licensing Agreement and continue to use SBC's trademarks, trade dress, products, copyrights, trade secrets and other intellectual property, that is SBC's "brand" in the operation of the cafes. This is in light of Borders' failure to articulate a clear alternative plan: the Debtors' Motion says only that Borders will either open and operate cafes on its own or use another provider to do so, he maintains. "SBC does not want the brand it has worked to developed used to promote a different and likely inferior product offering," Mr. McCullough tells Judge Glenn. Just like the 225 stores closed by Borders, Borders' right to use SBC's brand under the Licensing Agreement should cease on the effective date of rejection of the Licensing Agreement, SBC insists. Thus, SBC asks Judge Glenn to clarify that any order authorizing rejection of the Licensing Agreement should: (i) require Borders to comply with the provisions of the Licensing Agreement governing de-identification; (ii) require compliance with the Licensing Agreement pending rejection, including maintenance of product and service standards and payment of royalties; and (iii) provide that rejection of the Licensing Agreement should only be effective upon completion by Borders of the required de-identification process. SBC further seeks that the Court's order should confirm that SBC's enforcement of its post-rejection rights under the Licensing Agreement is not subject to the automatic stay, and that SBC is not required to ship products to Borders after rejection. In a related request, SBC seeks the Court's permission to redact portions of its objection to the Debtors' Motion to Reject the Agreement and related supporting declaration filed by Robert Dilworth. While SBC does not believe that the portions of the Licensing Agreement cited in the Objection and the Declaration contain any particularly sensitive information, in an abundance of caution and in recognition that the Agreement as a whole should remain confidential, SBC seeks to redact the detailed references to the Agreement. Robert Dilworth, vice president for finance and business development for SBC, filed a declaration in support of SBC's Objection. Contents of the declaration were redacted. Bunn-O-Matic, for its part, complains that Borders cannot simply reject the SBC Licensing Agreement without accepting its obligation to pay Bunn for postpetition services provided to the Debtor under a services agreement. Bunn-O-Matic and Starbucks Corporation, parent company of SBC, are parties to a Services Agreement - Starbucks Directed Services for Licensee-owned V801 and Mastrena (TM). Bunn alleges that it has provided services to Borders as a Starbucks licensee after the Petition Date, totaling $103,681, which remains unpaid. Accordingly, Bunn asks Judge Glenn to include in any order with respect to the Debtors' Rejection Motion: (i) an acknowledgement by the Debtor of its obligation to pay Bunn, as an administrative expense priority, for any postpetition services already provided or to be provided by Bunn to the Debtor under the Services Agreement; and (ii) language requiring the Debtor to pay those amounts as they come due. Debtors Respond to Objections To address SBC's concerns, the Debtors have agreed to make the effective date of the rejection as the date that the de-branding process is completed, which should occur by July 22, 2011, counsel to the Debtors, Andrew K. Glenn, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, tells the Court. The Debtors will also continue to make royalty payments in accordance with the SBC Licensing Agreement on a location-by-location basis until the de-branding process is completed, he says. Once de- branding is completed, the Debtors will file a notice with the Court advising parties that the SBC Licensing Agreement's rejection is effective. Mr. Glenn asserts that the Debtors are more than willing to embark on a good faith, reasonable de-branding process to avoid infringement of SBC's intellectual property rights, but this is qualitatively different than strict compliance with SBC's contractual rights to compel de-branding. Moreover, SBC's purported request for relief from the automatic stay is also premature and improper because no infringement has occurred, he contends. As to Bunn-O-Matic's Objection, it contains nothing more than a misplaced request to litigate the claims administration process in the context of a motion to reject an executory contract, Mr. Glenn argues. Nothing in the Debtors' Rejection Motion or the proposed order prohibits Bunn-O-Matic from asserting an administrative expense claim at a later date, he points out. Consistent with their reply, the Debtors filed with the Court a revised proposed order on their request to reject the SBC Licensing Agreement, a full-text copy of which is available for free at http://bankrupt.com/misc/Borders_RevPropSBCPactRejOrd.pdf The Debtors also submitted a revised proposed order on their request to file under seal the SBC Licensing Agreement. Under the proposed order, the Licensing Agreement and its contents will not be disclosed to any parties in these Chapter 11 cases other than the Debtors, SBC, the Official Committee of Unsecured Creditors, and the U.S. Trustee for Region 2, in the redacted form provided by SBC's counsel to the Debtors' counsel on May 19, 2011. * * * At a hearing held on June 2, 2011, Judge Glenn said he will approve the Debtors' request to reject the Licensing Agreement, Serena Saitto and Tiffany Kary of Bloomberg News report. According to the news source, Borders' motion will have to be changed to address some of SBC's objections. 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: Wins Approval to Reject 100 Contracts ---------------------------------------------------- Borders Group Inc. and its units received the Bankruptcy Court's permission to reject 100 executory contracts as of June 2, 2011. The contracts proposed to be rejected include water cooler leases, linen rental agreements, maintenance agreements and security agreements related to the closing stores, and certain other contracts for services no longer required by the Debtors. A schedule of the 100 contracts for rejection is available for free at http://bankrupt.com/misc/Borders_ContractRejSched.pdf The Debtors disclose that in the 12 months before the Petition Date, they paid an aggregate of $9.4 million to counterparties to the contracts for rejection for services under those agreements. The Debtors further asked Judge Glenn to approve these uniform procedures to govern the future rejection of the remaining contracts: (1) The Debtors will file on the docket for their Chapter 11 cases a notice setting forth the proposed rejection of one or more Contracts, and will serve the Rejection Notice via Federal Express or other overnight mail delivery service and e-mail or fax on: (i) the non-Debtor counterparty; (ii) counsel to the Official Committee of Unsecured Creditors; (iii) counsel to the DIP Agents; and (iv) the U.S. Trustee for Region 2. (2) The Rejection Notice must set forth: (i) the contract to be rejected; (ii) the name and address of the counterparties to that contract; (iii) the proposed effective date for the rejection of each Contract; (iv) the deadlines and procedures for filing objections to the Rejection Notice, which must state that, although no party is required to object to the proposed relief, if no objection is timely filed and served, the Court may grant the proposed relief; (iv) notice of the bar date for claims arising from the rejection of the contracts if the motion to reject is granted with respect to those contracts; and which complies with Rule 6006(f) of the Federal Rules of Bankruptcy Procedure. All Rejection Notices will be accompanied by a copy of the order granting the Motion to Reject. (3) If party-in-interest objects to the Debtors' proposed rejection of a Contract, that party must file and serve a written objection so that the objection is filed with the Court and actually received by these parties no later than 10 days after the date the Rejection Notice is filed: (i) counsel to the Debtors; (ii) the U.S. Trustee,; (iii) counsel to the Creditors' Committee; and (iv) counsel to the DIP Agents. (4) If no objection to a Rejection Notice is timely filed and served, the applicable Contract will be deemed rejected on the effective date set forth in the Rejection Notice, or, if no date is set forth, the date the Rejection Notice is filed with the Court. If a timely objection to a Rejection Notice is filed and received in accordance with the Rejection Procedures, and not withdrawn or otherwise resolved, the Debtors will schedule a hearing on the objection and will provide at least five days' notice of that hearing to the objecting party and the Objection Notice Parties. (5) Claims arising from the rejection of Contracts must be filed, on or before the later of (i) the deadline for filing proofs of claim established by the Court in the Debtors' Chapter 11 cases, or (ii) 45 days after the Rejection Date. If no proof of claim is timely filed, the claimant will be forever barred from asserting a claim for rejection damages and from participating in any distributions that may be made in connection with these Chapter 11 cases. (6) If the Debtors have deposited funds with a Contract counterparty as a security deposit or other arrangement, the Contract counterparty may not setoff or otherwise use the deposit without the prior authority of the Court or agreement of the parties. In connection with the proposed Rejection Procedures, the Debtors also seek to execute and deliver all instruments and documents, and take other actions as may be necessary or appropriate to implement and effectuate the Rejection Procedures as approved by the Court and that entry of the sought order be without prejudice to the Debtors' right to seek further, other, or different relief regarding the Contracts. 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) BOWE BELL: Wins Approval for Richards Layton as Counsel ------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware authorized Bowe Systec, Inc., et al., to employ Richards, Layton & Finger, P.A. as their bankruptcy counsel. RL&F is representing the Debtors in the bankruptcy proceedings. Prior to the Petition Date, RL&F received a total retainer of $725,000 in connection with and in contemplation of the Chapter 11 cases. The Court ordered that that the retainer monies paid to RL&F and not expended for prepetition services and disbursements be treated as an evergreen retainer to be held by RL&F as security throughout the Chapter 11 cases. To the best of the Debtors' knowledge, RL&F is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Bowe Bell Headquartered in Wheeling, Illinois Bowe Bell + Howell -- http://www.bowebellhowell.com/-- provides high-performance document management solutions and services. In 1936, the company pioneered gripper arm mail-inserting systems and has one of the world's largest installed bases of such inserters as a result of the technology's flexibility, performance and reliability. The company's complete portfolio of inserting, sorting, plastic card, integrity, cutting, packaging, print-on-demand and software solutions is one of the most comprehensive product offerings for paper-based communications. These solutions are supported by one of the largest dedicated service organizations in the industry. In addition to its headquarters offices, the company maintains major manufacturing and service locations in Durham, N.C. and Bethlehem, Penn. Bowe Bell + Howell sought bankruptcy protection in the U.S. as part of a deal to itself to creditor Versa Capital Management Inc. to pay off debt. Bowe Systec, Inc., Bowe Bell + Howell Holdings, Inc., and other affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 11-11186) on April 18, 2011. Bowe Systec estimated assets and debt of $100 million to $500 million as of the bankruptcy filing. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel. McDermott Will & Emery is the Debtors' special corporate counsel. Focus Management Group is the Debtors' financial advisors. Lazard Middle Market LLC is the Debtors' investment banker. The Garden City Group, Inc is the Debtors' claims and notice agent. Bowe Bell + Howell International Ltd., BBH's Canadian subsidiary, commenced parallel ancillary proceeding under Part IV of the Companies' Creditors Arrangement Act. BBH Canada, as the proposed foreign representative for the Debtors in the ancillary proceeding, will ask an Ontario Superior Court judge to recognize the bankruptcy proceedings in the U.S. PricewaterhouseCoopers Inc. is the prospective Information Officer in the Canadian Proceeding. BOWE BELL: Can Hire Tory's LLP to Handle Canadian Proceedings ------------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware authorized Bowe Systec, Inc., et al., to employ Torys LLP as its Canadian counsel. As reported in the Troubled Company Reporter on May 16, 2011, Bowe Bell submits it is essential to employ Canadian counsel to fully protect their rights. The Debtors by separate applications, are seeking to employ, Richards, Layton & Finger, P.A. as general bankruptcy and reorganization counsel; and McDermott Will & Emery as special corporate counsel. Torys is assisting Bowe Bell in connection with carrying out its duties and responsibilities under the Bankruptcy Code during the Chapter 11 cases. The hourly rates of Torys' personnel are: Partners C$500 - C$1,050 Associates C$350 - C$700 Law Clerks (Paralegals) C$275 - C$450 The Debtors related that prior to the Petition Date, Torys received a C$349,980 retainer, of which C$287,500 has been applied on account of prepetition services. The remaining cash retainer amounts to C$62,479. The Court ordered that the prepetition monies paid to Torys and not expended for prepetition services and disbursements will be held by Torys as security throughout the Chapter 11 cases. To the best of the Debtors' knowledge, Torys is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code.e. About Bowe Bell Headquartered in Wheeling, Illinois Bowe Bell + Howell -- http://www.bowebellhowell.com/-- provides high-performance document management solutions and services. In 1936, the company pioneered gripper arm mail-inserting systems and has one of the world's largest installed bases of such inserters as a result of the technology's flexibility, performance and reliability. The company's complete portfolio of inserting, sorting, plastic card, integrity, cutting, packaging, print-on-demand and software solutions is one of the most comprehensive product offerings for paper-based communications. These solutions are supported by one of the largest dedicated service organizations in the industry. In addition to its headquarters offices, the company maintains major manufacturing and service locations in Durham, N.C. and Bethlehem, Penn. Bowe Bell + Howell sought bankruptcy protection in the U.S. as part of a deal to itself to creditor Versa Capital Management Inc. to pay off debt. Bowe Systec, Inc., Bowe Bell + Howell Holdings, Inc., and other affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 11-11186) on April 18, 2011. Bowe Systec estimated assets and debt of $100 million to $500 million as of the bankruptcy filing. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel. McDermott Will & Emery is the Debtors' special corporate counsel. Focus Management Group is the Debtors' financial advisors. Lazard Middle Market LLC is the Debtors' investment banker. The Garden City Group, Inc is the Debtors' claims and notice agent. Bowe Bell + Howell International Ltd., BBH's Canadian subsidiary, commenced parallel ancillary proceeding under Part IV of the Companies' Creditors Arrangement Act. BBH Canada, as the proposed foreign representative for the Debtors in the ancillary proceeding, will ask an Ontario Superior Court judge to recognize the bankruptcy proceedings in the U.S. PricewaterhouseCoopers Inc. is the prospective Information Officer in the Canadian Proceeding. BOWE BELL: Court Approves Focus Management as Financial Advisor --------------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware authorized Bowe Systec, Inc., et al., to employ Focus Management Group USA, Inc., as financial advisor and restructuring management consultant. As reported in the Troubled Company Reporter on May 16, 2011, Focus is performing certain financial advisory and management consulting services for the Debtors. The hourly rates of Focus' personnel are: Managing Directors $450 Senior Consultants $400 The rates were discounted from Focus' standard hourly rates. The personnel's time spent traveling will be charged at 50% of the hourly rates. The Debtors relate that prepetition, they made aggregate fee payments to Focus of $363,958. After deducting fees and expenses previously billed (and paid) for prepetition services rendered, $138,791 remains as a retainer. The $138,791 balance will be available to be applied to post petition services. To the best of the Debtors' knowledge, Focus is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Bowe Bell Headquartered in Wheeling, Illinois Bowe Bell + Howell -- http://www.bowebellhowell.com/-- provides high-performance document management solutions and services. In 1936, the company pioneered gripper arm mail-inserting systems and has one of the world's largest installed bases of such inserters as a result of the technology's flexibility, performance and reliability. The company's complete portfolio of inserting, sorting, plastic card, integrity, cutting, packaging, print-on-demand and software solutions is one of the most comprehensive product offerings for paper-based communications. These solutions are supported by one of the largest dedicated service organizations in the industry. In addition to its headquarters offices, the company maintains major manufacturing and service locations in Durham, N.C. and Bethlehem, Penn. Bowe Bell + Howell sought bankruptcy protection in the U.S. as part of a deal to itself to creditor Versa Capital Management Inc. to pay off debt. Bowe Systec, Inc., Bowe Bell + Howell Holdings, Inc., and other affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 11-11186) on April 18, 2011. Bowe Systec estimated assets and debt of $100 million to $500 million as of the bankruptcy filing. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel. McDermott Will & Emery is the Debtors' special corporate counsel. Focus Management Group is the Debtors' financial advisors. Lazard Middle Market LLC is the Debtors' investment banker. The Garden City Group, Inc is the Debtors' claims and notice agent. Bowe Bell + Howell International Ltd., BBH's Canadian subsidiary, commenced parallel ancillary proceeding under Part IV of the Companies' Creditors Arrangement Act. BBH Canada, as the proposed foreign representative for the Debtors in the ancillary proceeding, will ask an Ontario Superior Court judge to recognize the bankruptcy proceedings in the U.S. PricewaterhouseCoopers Inc. is the prospective Information Officer in the Canadian Proceeding. BOWE BELL: Affiliates File Schedules of Assets and Liabilities -------------------------------------------------------------- BBH, Inc., a debtor-affiliate of Bowe Systec, Inc., filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $7,812,514 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $121,740,728 E. Creditors Holding Unsecured Priority Claims *Unknown F. Creditors Holding Unsecured Non-priority Claims $17,161,318 ----------- ----------- TOTAL $7,812,514 $138,902,046* * plus unknown A full-text copy of the schedules is available for free at: http://bankrupt.com/misc/BOWESYSTEC_bbhsal.pdf Other debtor-affiliates filed their respective schedules disclosing: Bowe Bell + Howell Holdings, Inc. assets: $0 liabilities: $121,802,132 Bowe Bell + Howell Postal Systems Company assets: $2,867,205 liabilities: $121,759,096 Bowe Systec, Inc. assets: $0 liabilities: Unknown Bowe Bell + Howell International Ltd. assets: C$$8,540,067 liabilities: C$1,201,751 BCC Software, Inc. assets: $7,862,180 liabilities: $122,983,554 About Bowe Bell Headquartered in Wheeling, Illinois Bowe Bell + Howell -- http://www.bowebellhowell.com/-- provides high-performance document management solutions and services. In 1936, the company pioneered gripper arm mail-inserting systems and has one of the world's largest installed bases of such inserters as a result of the technology's flexibility, performance and reliability. The company's complete portfolio of inserting, sorting, plastic card, integrity, cutting, packaging, print-on-demand and software solutions is one of the most comprehensive product offerings for paper-based communications. These solutions are supported by one of the largest dedicated service organizations in the industry. In addition to its headquarters offices, the company maintains major manufacturing and service locations in Durham, N.C. and Bethlehem, Penn. Bowe Bell + Howell sought bankruptcy protection in the U.S. as part of a deal to itself to creditor Versa Capital Management Inc. to pay off debt. Bowe Systec, Inc., Bowe Bell + Howell Holdings, Inc., and other affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 11-11186) on April 18, 2011. Bowe Systec estimated assets and debt of $100 million to $500 million as of the bankruptcy filing. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel. McDermott Will & Emery is the Debtors' special corporate counsel. Focus Management Group is the Debtors' financial advisors. Lazard Middle Market LLC is the Debtors' investment banker. The Garden City Group, Inc is the Debtors' claims and notice agent. Bowe Bell + Howell International Ltd., BBH's Canadian subsidiary, commenced parallel ancillary proceeding under Part IV of the Companies' Creditors Arrangement Act. BBH Canada, as the proposed foreign representative for the Debtors in the ancillary proceeding, will ask an Ontario Superior Court judge to recognize the bankruptcy proceedings in the U.S. PricewaterhouseCoopers Inc. is the prospective Information Officer in the Canadian Proceeding. BOWE BELL: Committee Taps BDO Consulting as Financial Advisor ------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Bowe Systec, Inc., et al., asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain BDO Consulting as financial advisor. BDO Consulting is a division of BDO USA, LLP BDO Consulting will, among other things: -- analyze transactions with the Debtors' financing institutions; -- attend auctions of the Debtors' assets; and -- analyze transactions with insiders, related and affiliated companies. The hourly rates of BDO Consulting's personnel are: Partners/Managing Directors $475 - $795 Directors and Senior Managers $375 - $525 Managers $325 - $425 Seniors $200 - $350 Staff $150 - $225 To the best of the Committee's knowledge, BDO Consulting is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Committee set a June 15 hearing on its request to retain BDO Consulting. Objections, if any, are due June 8, at 4:00 p.m. (prevailing Eastern Time). About Bowe Bell BBH, Inc., a debtor-affiliate of Bowe Systec, Inc., disclosed $7,812,514 in assets and $138,902,046 plus unknown amount in liabilities as of the Chapter 11 filing. Headquartered in Wheeling, Illinois Bowe Bell + Howell -- http://www.bowebellhowell.com/-- provides high-performance document management solutions and services. In 1936, the company pioneered gripper arm mail-inserting systems and has one of the world's largest installed bases of such inserters as a result of the technology's flexibility, performance and reliability. The company's complete portfolio of inserting, sorting, plastic card, integrity, cutting, packaging, print-on-demand and software solutions is one of the most comprehensive product offerings for paper-based communications. These solutions are supported by one of the largest dedicated service organizations in the industry. In addition to its headquarters offices, the company maintains major manufacturing and service locations in Durham, N.C. and Bethlehem, Penn. Bowe Bell + Howell sought bankruptcy protection in the U.S. as part of a deal to itself to creditor Versa Capital Management Inc. to pay off debt. Bowe Systec, Inc., Bowe Bell + Howell Holdings, Inc., and other affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 11-11186) on April 18, 2011. Bowe Systec estimated assets and debt of $100 million to $500 million as of the bankruptcy filing. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel. McDermott Will & Emery is the Debtors' special corporate counsel. Focus Management Group is the Debtors' financial advisors. Lazard Middle Market LLC is the Debtors' investment banker. The Garden City Group, Inc is the Debtors' claims and notice agent. Bowe Bell + Howell International Ltd., BBH's Canadian subsidiary, commenced parallel ancillary proceeding under Part IV of the Companies' Creditors Arrangement Act. BBH Canada, as the proposed foreign representative for the Debtors in the ancillary proceeding, will ask an Ontario Superior Court judge to recognize the bankruptcy proceedings in the U.S. PricewaterhouseCoopers Inc. is the prospective Information Officer in the Canadian Proceeding. BPP TEXAS: Takes Step Toward Bankruptcy Exit With Sale Request -------------------------------------------------------------- Dow Jones' DBR Small Cap reports that the owner of 22 Wyndham Hotel Group-branded hotels is looking to sell one of its Texas properties as it pitches a bankruptcy-exit plan that calls for the company to shed properties over time so as not to flood the market. About BPP Texas Pittsburgh, Pennsylvania-based BPP Texas, LLC, along with BPP Illinois, LLC, BPP Iowa, LLC, BPP Michigan, LLC, BPP Minnesota, LLC, and BPP Wisconsin, LLC, own and operate 22 hotels located in Texas, Illinois, Iowa, Michigan, Minnesota, and Wisconsin. BPP Texas and several affiliates filed for Chapter 11 bankruptcy protection (Bankr. E.D. Tex. Lead Case No. 10-44378) on Dec. 21, 2010. Davor Rukavina, Esq., and Jonathan Lindley Howell, Esq., at Munsch Hardt Kopf & Harr, P.C., serve as the Debtors' bankruptcy counsel. BPP Texas estimated its assets at $1 million to $10 million and debts at $50 million to $100 million. Affiliates BPP Illinois, BPP Iowa, BPP Michigan, BPP Minnesota, and BPP Wisconsin filed separate Chapter 11 bankruptcy petitions. BPP Wisconsin estimated its assets at $10 million to $50 million and debts at $50 million to $100 million. BROWARD COUNTY: Moody's Cuts Ratings on Revenue Bonds to 'B' ------------------------------------------------------------ Moody's has downgraded the ratings of Broward County Housing Finance Authority Single Family Mortgage Revenue Bonds Series 2007A and B to Ba1 from Aaa, upgraded the Series 2007C bonds to Ba1 from Ba3 and removed the bonds from Watchlist for Possible Downgrade. Rating Rationale The downgrade and removal from Watchlist for Possible Downgrade of the Series 2007A and B (Senior) bonds is based on cash flow projections which demonstrate that there is likely to be insufficient revenue to fully pay the debt service on the bonds in the future, assuming a high level of subordinate loan losses. The upgrade and removal from Watchlist of the Series 2007C (Subordinate) bonds is based on improved cash flow projections . Security and Basis for the Rating Both the senior and subordinate bonds are secured by revenues from both mortgage-backed securities guaranteed as to full and timely payment of principal and interest by the Government National Mortgage Association, Fannie Mae and Freddie Mac and from second mortgages issued in connection with some of the mortgages backing the MBS. Priority of payments to bondholders is governed by a Master Indenture of Trust. Under the indenture, revenues from both MBS and second mortgages, including any principle repayments under the MBS, are used to pay debt service on the senior bonds first. Any prepayments of principle on the second mortgages and all remaining revenue, after paying defined expenses under the indenture, are used to redeem subordinate bonds and pay interest on the bonds. Recent Developments Moody's recently learned that proceeds securing the Series 2007A and B bonds that did not purchase MBS were used, in accordance with the indenture, to redeem approximately $250,000 in subordinate Series 2007C bonds. Moody's believes this created a weakness in the structure of the senior bonds, lowering the overcollateralization level at which cash flow sufficiency can be maintained under most scenarios. As a result, cash flow projections demonstrate a decline in the ratio of MBS and other assets securing the senior bonds throughout the life of the bonds. Furthermore, MBS prepayments increase stress on the transaction's ability to maintain sufficient revenues to pay off debt service, due to the difference between the interest earnings on the assets held by the trustee and the higher interest cost of the bonds. Analysis The 2007A and B bonds: Cash flow projections demonstrate that if loan losses on the subordinate mortgages exceed 68%, the bonds have a high likelihood of default within approximately 20 years. Moody's believes that the probability of such losses occurring is moderately high. Moody's also project that the expected loss will be less than 1%. In determining the rating, Moody's evaluated two factors: the Probability of Default (PD), which is the risk that loan losses on the subordinate mortgages will default at very high rates, and; the Loss Given Default (LGD), which is the possible loss to bondholders resulting from losses on the subordinate mortgages. The expected loss is the combination of the LGD and PD under all scenarios. Moody's believes that an appropriate PD for the transaction is moderate to high, based on Moody's review of current and projected levels of default of the subordinate mortgages, the small pool of current mortgages and the continuing poor performance of the housing market in the Ft. Lauderdale MSA. All of the second mortgages securing the Series 2007C bonds were issued in connection with the issuance of a first mortgage that was securitized into Mortgaged Backed Securities (MBS). Of an original pool of 27 second mortgages, 19 are current, based on recent servicer reports. Since the second mortgages are unenhanced, bondholders will recover only the value of any paid principal and interest from these current mortgages. Moody's believes that the high default rate on the second mortgages (approximately 26% of the second mortgages have already defaulted) will continue to show weakness and reflects the distressed local real estate market, the small pool of original loans and the size of the loans in relation to the total mortgage amount. The Ft. Lauderdale MSA, in which Broward County is located, has experienced some of the greatest housing declines in the country and is one of the leaders in delinquencies and foreclosures. The second loans were issued as "80/20" or "down payment assistance" loans, which financed most of the down payment equity for which the homeowner would have been responsible. Consequently, the size of the loans is large, averaging approximately $30,000. Based on current default rates, further defaults in the second mortgages and declines in the asset-to-debt ratio is highly likely. Moody's believes that the LGD on a present value basis will be low, under 1%, for the weighted average of all scenarios. Given, however, the moderately high probability of default because of projected losses on the subordinate mortgages, the transaction no longer exhibits investment grade qualities. The 2007C bonds: Moody's decision to upgrade the rating on the 2007C bonds was based on cash flow projections demonstrating a low dependency on the performance of the second mortgages and high likelihood of repayment of repayment of principal under most scenarios. The rating additionally reflects the small number of mortgages securing the bonds and the strong overcollateralization of second mortgages to Series 2007C bonds. What could change the rating - UP Series 2007A and B and 2007C * An issuer contribution of funds designed to mitigate losses based on cash flow projections What could change the rating - DOWN Series 2007A and B * Higher than anticipated loan losses on the subordinate loans. Series 2006B * Rapid prepayment of the MBS and higher than projected losses on the subordinate loans. The principal methodology used in this rating was evaluating factors believed to be relevant to the credit profile of the Broward County Housing Finance Authority, Series 2007A and B and 2007C Bonds including i) the projected performance of the mortgages and MBS securing the bonds over the near to intermediate term, ii) the nature of the dedicated revenue stream pledged to the bonds, iii) the debt service coverage provided by such revenue stream, vii) the legal structure that documents the revenue stream and the source of payment, and viii) the issuer's management and governance structure related to payment. These attributes were compared against other issuers both within and outside of the Broward County Housing Finance Authority's core peer group, ratings of the Series 2007A and B and C Bonds are believed to be comparable to ratings assigned to other issuers of similar credit risk. BRUGNARA PROPERTIES VI: U.S. Trustee Wants Case Converted to Ch. 7 ------------------------------------------------------------------ August B. Landis, Acting United States Trustee for Region 17, asks the U.S. Bankruptcy Court for the Northern District of California for an order converting the Chapter 11 case of Brugnara Properties VI, LLC, to one under Chapter 7 of the Bankruptcy Code. The U.S. Trustee presents the following justifications in support of his motion: -- Debtor has failed to propose a viable reorganization plan, while accruing debt, constituting "cause" to convert or dismiss this case under 11 U.S.C. Section 1112 (b)(4)(A); -- Debtor has, without excuse, failed to satisfy timely the reporting requirements set forth in 11 U.S.C. Section 704(a) (8), B.L.R. 2015-2 and F.R.B.P. 2015.3, which constitutes "cause" to convert or dismiss a Chapter 11 case, within the meaning of 11 U.S.C. Section 1112(b)(4)(F); and -- Debtor has failed to provide information requested by the United States Trustee, specifically, furnishing signature cards for a debtor-in-possession account and evidence of adequate insurance to cover the value of Debtor's sole asset -- residential real property located at 224 Sea Cliff Avenue in San Francisco, California. Failure to provide information reasonably requested by the United States Trustee constitutes cause to convert or dismiss a Chapter 11 case, within the meaning of 11 U.S.C. Section 1112(b)(4)(H). Debtor filed a plan and disclosure statement on Dec. 16, 2010, and an amended plan and disclosure statement on Jan. 18, 2011. The disclosure statement for the amended plan is currently scheduled for hearing on June 3, 2011, at 10:00 a.m. The U.S. Trustee has objected to the adequacy of disclosure, citing the Debtor's plan lacks sufficient specificity as to how the Debtor expects to meet obligations, and is particularly vague about what, if any, obligations the Debtor has under the plan. About Brugnara Properties VI San Francisco, California-based Brugnara Properties VI owns a residential real property located at 224 Sea Cliff Avenue, San Francisco, California. The Company filed for Chapter 11 protection (Bankr. N.D. Calif. Case No. 10-33637) on Sept. 17, 2010. The designated responsible individual is Kay L. Brugnara. Joel K. Belway, Esq., at the Law Offices of Joel K. Belway, in San Francisco, Calif., represents the Debtor as counsel. In its schedules, the Debtor disclosed $17,800,000 in assets and $11,667,750 in liabilities as of the Chapter 11 filing. This is Debtor's second filing since 2009. Debtor's prior case, In re Brugnara Properties VI, Case No. 09-30038, was filed on Jan. 7, 2009. The prior case was dismissed on Aug. 27, 2009, at the request of the Debtor. C&S MARINE: Case Summary & 4 Largest Unsecured Creditors -------------------------------------------------------- Debtor: C&S Marine Inc. 4500 Lakeland Drive Flowood, MS 39232 Bankruptcy Case No.: 11-01953 Chapter 11 Petition Date: June 1, 2011 Court: U.S. Bankruptcy Court Southern District of Mississippi (Jackson Divisional Office) Judge: Edward Ellington Debtor's Counsel: J. Walter Newman, IV, Esq. NEWMAN & NEWMAN 248 East Capitol Street, Suite 539 Jackson, MS 39201 Tel: (601) 948-0586 Fax: (601) 948-0588 E-mail: wnewman95@msn.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A list of the Company's four largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/mssb11-01953.pdf The petition was signed by Jerry Scott, president. CARLYLE MODENA: Moody's Upgrades Rating on Class D Notes to 'B3' ---------------------------------------------------------------- Moody's Investors Service has upgraded the ratings of these notes issued by Carlyle Modena CLO, Ltd.: -- US$24,000,000 Class B Floating Rate Deferrable Revolving Notes Due 2016 (current balance of $10,331,610), Upgraded to Aa2 (sf); previously on October 6, 2010 Upgraded to A2 (sf); -- US$27,750,000 Class C Floating Rate Notes Due 2016, Upgraded to A2 (sf); previously on October 6, 2010 Upgraded to Baa3 (sf); -- US$20,250,000 Class D Floating Rate Notes Due 2016 (current balance of $21,101,230), Upgraded to B3 (sf); previously on September 22, 2009 Downgraded to Caa3 (sf). RATINGS RATIONALE According to Moody's, the rating actions taken on the notes result primarily from improvement in the overcollateralization of the notes due to delevering of the Class A Notes, which have been paid down by approximately 42% or $76 million since the last rating action in October 2010. A substantial proportion of this paydown is attributable to principal prepayments on the underlying loans. As of the latest trustee report dated May 3, 2011, the Senior overcollateralization ratio is reported at 145.88% versus the September 2010 level of 123.32%. Notwithstanding improvements in the overcollateralization ratio, the Class D Notes are currently deferring interest due to the diversion of excess interest to pay down the senior notes before paying the Class D Notes' interest. This results from a deal structural feature which specifies that net principal losses must be repaid from (i) first, excess interest before payment of the Class D Notes' interest, and if there are not enough interest proceeds available, (ii) second, from draws on the Class B Revolving Notes. In addition, the Class B Revolving Notes' funded balance is repaid before the Class D Notes' interest in the interest waterfall of the transaction. As such, there will be no excess interest available to pay the Class D Notes' interest until the funded balance on the Class B Revolving Notes is paid in full. Moody's also notes that credit profile of the underlying portfolio has deteriorated moderately since the last rating action. Based on the May 2011 trustee report, the weighted average rating factor is 2716 compared to 2591 in September 2010, and securities rated Caa1/CCC+ and below make up approximately 17.6% of the underlying portfolio versus 15.3% in September 2010. Due to the impact of revised and updated key assumptions referenced in "Moody's Approach to Rating Collateralized Loan Obligations" and "Annual Sector Review (2009): Global CLOs," key model inputs used by Moody's in its analysis, such as par, weighted average rating factor, diversity score, and weighted average recovery rate, may be different from the trustee's reported numbers. In its base case, Moody's analyzed the underlying collateral pool to have a performing par and principal proceeds of $176 million, defaulted par of $5 million, weighted average default probability of 23.4% (implying a WARF of 3700), a weighted average recovery rate upon default of 43.8%, and a diversity score of 46. These default and recovery properties of the collateral pool are incorporated in cash flow model analysis where they are subject to stresses as a function of the target rating of each CLO liability being reviewed. The default probability is derived from the credit quality of the collateral pool and Moody's expectation of the remaining life of the collateral pool. The average recovery rate to be realized on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance trends, and collateral manager latitude for trading the collateral are also factors. Carlyle Modena CLO, Ltd., issued in September 22, 2004, is a collateralized loan obligation backed primarily by a portfolio of senior secured loans. The principal methodology used in this rating was "Moody's Approach to Rating Collateralized Loan Obligations" published in August 2009. Moody's Investors Service did not receive or take into account a third-party due diligence report on the underlying assets or financial instruments related to the monitoring of this transaction in the past six months. Moody's modeled the transaction using the Binomial Expansion Technique, as described in Section 2.3.2.1 of the "Moody's Approach to Rating Collateralized Loan Obligations" rating methodology published in August 2009. In addition to the base case analysis described above, Moody's also performed sensitivity analyses to test the impact on all rated notes of various default probabilities. Below is a summary of the impact of different default probabilities (expressed in terms of WARF levels) on all rated notes (shown in terms of the number of notches' difference versus the current model output, whereby a positive difference corresponds to lower expected losses), assuming that all other factors are held equal: Moody's Adjusted WARF - 20% (2960) Class A: 0 Class B: +1 Class C: +2 Class D: +2 Moody's Adjusted WARF + 20% (4440) Class A: 0 Class B: -1 Class C: -2 Class D: -1 Moody's notes that this transaction is subject to a high level of macroeconomic uncertainty, as evidenced by 1) uncertainties of credit conditions in the general economy and 2) the large concentration of speculative-grade debt maturing between 2012 and 2014 which may create challenges for issuers to refinance. CDO notes' performance may also be impacted by 1) the manager's investment strategy and behavior and 2) divergence in legal interpretation of CDO documentation by different transactional parties due to embedded ambiguities. Sources of additional performance uncertainties are: 1) Delevering: The main source of uncertainty in this transaction is whether delevering from unscheduled principal proceeds will continue and at what pace. Delevering may accelerate due to high prepayment levels in the loan market and/or collateral sales by the manager, which may have significant impact on the notes' ratings. 2) Recovery of defaulted assets: Market value fluctuations in defaulted assets reported by the trustee and those assumed to be defaulted by Moody's may create volatility in the deals' overcollateralization levels. Further, the timing of recoveries and the manager's decision to work out versus selling defaulted assets create additional uncertainties. Moody's analyzed defaulted recoveries assuming the lower of the market price and the recovery rate in order to account for potential volatility in market prices. 3) Long-dated assets: The presence of assets that mature beyond the CLO's legal maturity date exposes the deal to liquidation risk on those assets. Moody's assumes an asset's terminal value upon liquidation at maturity to be equal to the lower of an assumed liquidation value (depending on the extent to which the asset's maturity lags that of the liabilities) and the asset's current market value. CASTELLO EXCAVATION: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Castello Excavation & Grading, Inc. 7565 Commercial Way, Suite A Henderson, NV 8901 Bankruptcy Case No.: 11-18720 Chapter 11 Petition Date: June 2, 2011 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Timothy S. Cory, Esq. TIMOTHY S. CORY & ASSOCIATES 8831 W. Sahara Avenue Lakes Business Park Las Vegas, NV 89117 Tel: (702) 388-1996 E-mail: tim.cory@corylaw.us Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/nvb11-18720.pdf The petition was signed by Marianne Castello, president. CATHOLIC CHURCH: Milw. Panel Wants Lift Stay for Depositions ------------------------------------------------------------ The Official Committee of Unsecured Creditors in the bankruptcy case of the Archdiocese of Milwaukee asks the Bankruptcy Court to lift the automatic stay to allow parties-in-interest to take the depositions of elderly witnesses in a state court litigation pending against the Archdiocese in the Wisconsin Circuit Court. In addition, the Committee asks the Court to enter an order allowing a party-in-interest to the State Court Cases relief from the automatic stay to file a motion with the applicable state court to modify a "State Court Stay" to allow depositions of individuals who are 70 years or older. Any party-in-interest who opposes the motion would do so in state court. As of the Petition Date, the Archdiocese was a defendant in 12 state-court lawsuits brought by 17 individuals who were sexually abused within the Archdiocese of Milwaukee. The Archdiocese notes that additional survivors of sexual abuse are preparing additional lawsuits. The State Court Cases have been pending for years. In a set of cases filed in 2005, the Debtor argued that the claims against it were barred by the statute of limitations because the abuse that triggered these lawsuits had occurred 20 to 40 years prior to the cases' commencement. In 2007, the Wisconsin Supreme Court held that allegations of fraud against the Archdiocese, arising from decades of child abuse, were not barred by the statute of limitations. After this ruling, additional lawsuits were brought against the Archdiocese and then Archbishop Dolan admitted, "I have to admit, these decisions [by the Archdiocese] are a particularly ugly example of how the Church made some dreadful mistakes in its handling of these cases." After the survivors overcame the Debtor's statute of limitations arguments, they almost immediately faced another set of litigation obstacles. In October 2007, the Debtor's insurer, OneBeacon Insurance Company f/k/a Commercial Union Insurance Company moved to intervene, bifurcate the issues of the Debtor's liability from the issue of the Debtor's insurance coverage, and stay litigation of the Debtor's liability until the insurance coverage could be resolved. Although the state court granted the insurer's motion, it also acknowledged that the acts at issue had occurred decades ago, and that perpetrators and witnesses were growing infirm and dying. Accordingly, the state court imposed a "State Court Stay," but allowed the plaintiff survivors to depose witnesses who were 80 years or older. Later, in October 2009, the "cut off" age was lowered to 75 years or older. The parties treated the State Court Stay and the "cut off" age for depositions as applying to each of the State Court Cases. In the years since the State Court Stay was imposed, additional perpetrators have reached the age of 75 and dozens more have been identified. Additional abuse survivors have also come forward. Therefore, the list of witnesses in the State Court Cases has changed. James I. Stang, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, California, notes that since 2007, the plaintiffs have deposed eight aged witnesses. The individuals that need to be deposed are: * Bishop Richard Sklba (75 years old); * Former Archbishop Rembert Weakland (84 years old); * Fr. Daniel Budzynski (83 years old); * Fr. Joseph Janicki (72 or 73 years old); * Other potential deponents: -- Raymond Adamsky (79 years old); -- James Arimond (72 years old); -- Jerome Lanser (78 years old); -- Gale Leifeld (82 years old); -- Michael Neuberger (73 years old); and -- Donald Peters (86 years old). Mr. Stang says that the Committee is concerned that perpetrators and other witnesses are aging and testimony must be preserved in the event of their deaths or incapacity. He contends that the depositions will preserve information that is relevant to insurance coverage and liability, which in turn, will facilitate plan negotiation and claims resolution. Mr. Stang further argues that lifting the stay will not enable any party to pursue any litigation to judgment. It will merely allow parties to conduct depositions to preserve critical testimony that could otherwise be forever lost to the parties and preserve evidence. Jeff Anderson and Associates P.A. joins in the Committee's request. About the Archdiocese of Milwaukee The Diocese of Milwaukee was established on November 28, 1843, and was elevated to an Archdiocese on February 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Wilmington Plan Set for Confirmation July 8 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has formally approved the Catholic Diocese of Wilmington, Inc.'s disclosure statement explaining its Chapter 11 Plan of Reorganization on May 24, 2011. The court issued an initial order approving the disclosure statement on May 20, 2011, but issued another order after an amended Chapter 11 Plan and Disclosure Statement were filed on May 23, 2011. Judge Sontchi ruled that the Disclosure Statement contains adequate information within the meaning of Section 1125 of the Bankruptcy Code. The Court established: * May 20, 2011, as the voting record date for determining which creditors are entitled to vote on the Plan. * June 30, 2011, 5:00 p.m., as the voting deadline for purposes of the Court's order and solicitation of votes with respect to the Plan. The confirmation hearing on the Plan will be held July 8, 2011, at 10:00 a.m. Objections must be filed no later than June 30, 2011, at 4:00 p.m. The Debtor's replies will be filed on or before July 6, 2011, at 4:00 p.m. The Debtor will publish notice of the Confirmation Hearing and related deadlines once each in the national edition of "USA Today" and "The Delaware News Journal" at least 28 days before the Confirmation Objection Deadline. Additionally, the Debtor will post the Confirmation Hearing Notice electronically on the reorganization Web site maintained by The Garden City Group, Inc. at http://www.cdowreorganization.com The Court directed the Debtor to mail or cause to be mailed to holders of Claims in Classes 3A, 3B, 3C, 3D, 3E, and 3F under the Plan on or before May 24, 2011, a solicitation package containing: (a) the Confirmation Hearing Notice, which will set forth (i) the Court's approval of the Disclosure Statement, (ii) the Voting Deadline with respect to the Plan, (iii) the date and time of the Confirmation Hearing, and (iv) the deadline and procedures for filing objections to confirmation of the Plan; (b) a CD containing a copy of the Disclosure Statement; and (c) the appropriate Ballots to accept or reject the Plan and a self- addressed, return envelope. Solicitation Packages to holders of Class 3A Claims represented by counsel will be served solely upon the counsel, at the law firms and addresses set forth in the holder's Tort Proof of Claim Form, if filed, unless the holder has directed otherwise. To avoid unnecessary duplication of documents, the Debtor may serve counsel representing more than one holder of a Class 3A Claim a master Solicitation Package containing (a) a single Confirmation Hearing Notice; (b) a single copy of the Disclosure Statement Order; (c) a single CD containing a copy of the Disclosure Statement; and (d) the appropriate Ballots to accept or reject the Plan with self-addressed, return envelopes, provided, however, that the Debtor will provide additional copies of the items referenced in (a) to (c). The Debtor will cause to be served, on or before the Solicitation Commencement Date, a Solicitation Package excluding the Ballot upon (a) the United States Trustee, (b) counsel to the Official Committee of Unsecured Creditors, (c) counsel to the Lay Employees' Committee, (d) any party that filed a Notice of Appearance, and (e) any counterparty to an executory contract or unexpired lease identified on Schedule G of the Debtor's schedules of liabilities filed pursuant to Section 521 of the Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure who did not file a proof of claim prior to the Voting Record Date. To aid in the voting tabulation, counsel representing more than one Creditor holding a Class 3A Claim will, on or before June 15, 2011, file a verified statement setting forth each Creditor's (i) name (if public) or alias and (ii) Confidential Tort Proof of Claim Number. The Balloting Agent will file a report of Ballots received by July 6, 2011, at 4:00 p.m. (prevailing Eastern Time). The Ballot Summary will identify individuals who filed Tort Proof of Claim forms solely by reference to their claim numbers on the official register and their counsel, if any, and will not include any personally identifiable information regarding the individual claimants. Copies of the May 20 and May 24 Disclosure Statement Orders are available for free at: http://bankrupt.com/misc/WChrchDSORD0520.pdf http://bankrupt.com/misc/WChrch_DSORD524.pdf Second Amended Plan & Disclosure Statement The Catholic Diocese of Wilmington, Inc., filed a modified Second Amended Chapter 11 Plan of Reorganization and Disclosure Statement on May 23, 2011, after Judge Sontchi said at a hearing held May 16, 2011, that he is willing to approve the Disclosure Statement after certain revisions are made. The Modified Second Amended Plan and Disclosure Statement contain changes requested by parties-in-interest and the U.S. Bankruptcy Court for the District of Delaware at the May 16 and 20, 2011 hearings. Among the modifications is the addition of a provision that notwithstanding the discharge of the Debtor's obligations under the Lay Pension Plan, the Debtor will use its best efforts to gain Court approval of a Lay Pension Plan reaffirmation agreement to be filed not less than seven days before the June 30, 2011 voting deadline of the Chapter 11 Plan. The Modified Disclosure Statement explains that "reaffirmation" is a process whereby, with Court approval, the Reorganized Debtor would bind itself to honor a discharged debt, which agreement will become legally enforceable notwithstanding a bankruptcy discharge. However, the Chapter 11 Plan requires that the Lay Pension Plan Reaffirmation Agreement (i) require the Reorganized Debtor to pay all accrued and vested benefits under the Lay Pension Plan through Dec. 31, 2011, (ii) specify that benefits need not be paid the form of a third-party annuity contract, and (iii) require the Reorganized Debtor to contribute at least $2 million per year to the Lay Pension Plan Trust until the Lay Pension Plan is fully funded on an actuarial basis. Holders of Lay Pension Claims should note that while the Chapter 11 Plan requires the Debtor to use its best efforts to gain approval of the Lay Pension Plan Reaffirmation Agreement by the Court, an approval is not a condition of effectiveness of the Chapter 11 Plan. If the Court does not approve the Lay Pension Plan Reaffirmation Agreement, it is nonetheless expected that the Reorganized Debtor would honor the terms of the agreement. However, without Court approval, the Lay Pension Plan Reaffirmation Agreement would be legally unenforceable against the Reorganized Debtor. The Modified Disclosure Statement further explains that in consideration of the Non-Debtor Catholic Entities' agreement to provide the NDCE Settlement Contribution and other consideration set in the Chapter 11 Plan, and to withdraw a certain appeal of judgment, an order confirming the Plan will (i) provide that, subject to the occurrence of the Effective Date, the Phase I Judgment and Orders are vacated and the PIA Litigation is dismissed, with prejudice, (ii) declare that, subject to the occurrence of the Effective Date, the Disputed Non-Debtor PIA Funds are not property of the estate; and (iii) effective immediately upon entry of the Confirmation Order, authorize the transfer of Cash proceeds of Disputed Non-Debtor PIA Funds to the Settlement Trust in an aggregate amount not to exceed the NDCE Settlement Contribution. As soon as practicable after the Effective Date, the Debtor and the Non-Debtor Catholic Entities Party to the PIA Litigation will withdraw their appeal of the Phase I judgment and orders. The Modified Disclosure Statement notes that it is expected that, after deducting amounts pledged by Non-Debtor Pooled Investors toward consummation of a Settlement Plan, the resolution of the PIA Litigation would result in the reversion of approximately $27 million of Disputed Non-Debtor PIA Funds to the Non-Debtor Pooled Investors. The largest share of these assets -- approximately $10 million -- would revert to Charities and its related entities, which would continue to use the income from the assets to underwrite Charities' general operating budget and, particularly, its ministries to children. Approximately $7.8 million would revert to DOW Schools for the benefit of St. Mark's High School, St. Thomas More Preparatory School, Christ the Teacher Catholic School, and Most Blessed Sacrament Catholic School. Approximately $4.9 million would revert to Cemeteries, which would continue to use the income from the assets for the perpetual care and maintenance of cemeteries. With regard to the disputed clergy pension plan, the Modified Disclosure Statement points out that in accordance with a stipulated order dismissing the Debtor's request to continue providing pensions, sustenance or medical coverage to certain retired or removed priests accused of sexual abuse, the Debtor does not currently provide pension benefits to Rev. John Sarro or Rev. Douglas Dempster, both of whom were removed from the public ministry and are currently subject to laicization proceedings before the Vatican on account of admitted, corroborated or otherwise substantiated allegations of sexual abuse of minors. Upon their laicization, Messrs. Sarro and Dempster would no longer be eligible for benefits under the Clergy Pension Plan. Copies of the Modified Second Amended Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/WChrchMod2ndPlan.pdf http://bankrupt.com/misc/WChrchMod2ndDS.pdf About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Wilm. Committee Has Berkeley as Fin'l Advisor -------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 case of the Catholic Diocese of Wilmington, Inc., asks the Bankruptcy Court for authority to retain Berkeley Research Group LLC, as successor in interest to LEGC LLC, as its financial advisor nunc pro tunc to March 1, 2011. The Committee tells the Court that the members of LECG who were primarily responsible for the services attendant to the case left LEGC, and joined BRG, effective as of March 1, 2011. The professional services that BRG will render to the Committee include, but will not be limited to: a. assisting the Committee in the review of financial related disclosures required by the Court and/or Bankruptcy Code, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs, and Monthly Operating Reports; b. analyzing the Debtor's accounting reports and financial statements to assess the reasonableness of the Debtor's financial disclosures; c. assisting the Committee in the evaluation of the Debtor's organizational structure, including its relationship with the Parishes and other non-debtor organizations and charities; d. assisting the Committee in evaluating the Debtor's cash management system, including the Debtor's pooled investor account; e. assisting the Committee in evaluating the Debtor's ownership interests of property alleged to be held in trust by the Debtor for the benefit of third parties or property alleged to be owned by non-debtor juridic entities; f. assisting the Committee in analyzing the Debtor's assets and liabilities, and participating in and reviewing any proposed asset sales, or any other any asset dispositions; g. assisting the Committee in the review of financial information distributed by the Debtor to creditors and others, including, but not limited to, cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is sought; h. attendance at meetings and assistance in discussions with the Debtor, the Committee, the U.S. Trustee, and other parties-in-interest and professionals hired by the parties as requested; i. assisting in the review or preparation of information and analysis necessary for the confirmation of a plan, or for the objection to any plan filed in this case which the Committee opposes; j. assisting the Committee in investigating the assets, liabilities and financial condition of the Debtor, the Debtor's operations and the desirability of the continuance of any portion of those operations; k. providing forensic accounting and investigations with respect to transfers of the Debtor's assets; 1. assisting the Committee with the evaluation and analysis of claims (including any alleged pension claims or obligations of the Debtor), and on any litigation matters, including avoidance actions for fraudulent conveyances and preferential transfers, and actions concerning the property of the Debtor's estate; m. assisting the Committee with respect to any adversary proceedings that may be filed in the Debtor's case; and n. providing other services to the Committee as may be necessary in the case. In exchange for its services, BRG will be paid on an hourly basis, and will be reimbursed for actual, necessary expenses and other charges incurred by the firm. The schedule of BRG's 2011 billing rates are: Principal/Director $595 - 770 per hour Senior Managing Consultant $410 - 455 per hour Consultant/Managing Consultant $345 - 360 per hour Associate/Senior Associate $235 - 255 per hour Paraprofessionals $100 - 170 per hour Consultant/Managing Consultant $345 - 360 per hour Associate/Senior Associate $235 - 255 per hour Paraprofessionals $100 - 170 per hour Marvin Tenenbaum, a member of BRG, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CENTRAL LEASING: Ch. 7 Trustee Taps Becker Meisel as Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of New Jersey authorized Stacey L. Meisel, Chapter 7 trustee for the estate of Central Leasing Co. of NJ, LLC, to employ Becker Meisel LLC as its counsel. Becker Meisel is assisting the trustee in the administration of the assets of the estate. Becker Meisel is also assisting the trustee in the immediate legal review of the estate's potential assets and substantial putative secured debt, with potential accruing administrative debt. The hourly rates of Becker Meisel's personnel are: Partners $350 - $495 Associates $200 - $325 Paralegals and Law Clerks $100 - $150 To the best of the trustee's knowledge, Becker Meisel is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Central Leasing Midland Park, New Jersey-based Central Leasing Co. of NJ, LLC, leases machinery and equipment. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. N.J. Case No. 11-11917) on Jan. 24, 2011. Michael J. Muller, Esq., in New Jersey, served as the Debtor's bankruptcy counsel. The Debtor disclosed $12,212,082 in assets and $10,229,575 in liabilities as of the Chapter 11 filing. On April 27, 2011, the Court entered an order converting the case to one under Chapter 7 of the Bankruptcy Code. CENTRAL LEASING: Reorganization Case Converted to Liquidation ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey converted the Chapter 11 case of Central Leasing Co. of NJ, LLC, to one under Chapter 7 of the Bankruptcy Code. As reported in the Troubled Company Reporter on March 30, 2011, New York Commercial Bank asked the Court to convert the Debtor's case stating that: -- The Rents from the Lases constitute NYCB's "cash collateral" within the meaning of Section 363(a) of the Bankruptcy Code. NYCB contends that the Debtor is in violation of Section 363(c)(2) of the Bankruptcy Code, having failed to seek Court approval to use NYCB's collateral although the Debtor's case has been pending since January. -- There is continuing loss to the estate and the absence of a reasonable likelihood of rehabilitation of the Debtor. The Debtor's principal had testified at the Section 341 meeting that all of the Debtor's Leases listed in Schedule G of the Debtor's Petition and Schedules are in default. -- There is no ability to re-establish its business operations and the Debtor's ongoing business prospects do not justify continuance of its reorganization efforts. In fact, there is no business to be run or reorganized in the first place. Upon information and belief, all of the Leases terminate within a short time and there are no further Leases being entered into by the Debtor. -- A Chapter 7 trustee is in the best position to analyze the Leases and either collect the income stream and sell the Equipment at termination, sell the Leases prior to termination, or terminate them and take back and liquidate the Equipment. -- There has also been mismanagement of the Company by the Debtor's principal, as well as misrepresentation (at least as to NYCB). -- Further, the Debtor's principal has, upon information and belief, granted security interest in the same assets to multiple lending institutions. There may have also been numerous fraudulent conveyance and preference actions as a result of payments to "favored" lending institutions which the Chapter 7 trustee is the appropriate authority to investigate and commence. -- The Debtor's principal has been lax in seeking compliance the Lessee's payment obligations under the Leases, which a trustee has incentive to collect for the benefit of the estate. NYCB said the Debtor owes it $2,821,663, secured by the Equipment purchased through the line of credit provided by NYCB. NYCB also asserts a security interest in the leases made by the Debtor to its end-lessees including the rental stream derived therefrom. About Central Leasing Midland Park, New Jersey-based Central Leasing Co. of NJ, LLC, leases machinery and equipment. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. N.J. Case No. 11-11917) on Jan. 24, 2011. Michael J. Muller, Esq., in New Jersey, served as the Debtor's bankruptcy counsel. The Debtor disclosed $12,212,082 in assets and $10,229,575 in liabilities as of the Chapter 11 filing. CENTRAL LEASING: Trustee Taps Bederson & Company as Accountant -------------------------------------------------------------- The U.S. Bankruptcy Cout for the District of New Jersey authorized Stacey L. Meisel, Chapter 7 trustee for the estate of Central Leasing Co. of NJ, LLC, to employ Bederson & Company LLP as its accountant. Bederson & Company is performing general accounting functions relating to the record of the Debtor, including but not limited to, investigation of possible preferences, fraudulent conveyances, preparartion of tax returns and assisting the trustee and her counsel as may be appropriate. The hourly rates of Bederson & Company's personnel are: Partners $335 - $575 Directors $300 Managers $295 Senior Accountants $225 Semi Senior Accountants $185 Staff Accountants $150 Paraprofessionals $135 To the best of the trustee's knowledge, Bederson & Company is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Central Leasing Midland Park, New Jersey-based Central Leasing Co. of NJ, LLC, leases machinery and equipment. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. N.J. Case No. 11-11917) on Jan. 24, 2011. Michael J. Muller, Esq., in New Jersey, served as the Debtor's bankruptcy counsel. The Debtor disclosed $12,212,082 in assets and $10,229,575 in liabilities as of the Chapter 11 filing. On April 27, 2011, the Court entered an order converting the case to one under Chapter 7 of the Bankruptcy Code. CFRI/GREENLAW: Plan Filing Exclusivity Extended to Aug. 19 ---------------------------------------------------------- On May 17, 2011, the U.S. Bankruptcy Court for the Central District of California extended CFRI/Greenlaw Dyer Road, LLC's exclusivity periods to file a plan of reorganization and gain acceptances of its plan through and including Aug. 19, 2011, and Oct. 21, 2011, respectively. On or before Aug. 19, 2011, the Debtor will serve notice to pre- petition creditors advising of the bar date. The date by which pre-petition creditors will file claims against the estate will be 60 days after the date Debtor's counsel serves notice to said creditors advising of the bar date. As reported in the TCR on May 10, 2011, CFRI/Greenlaw Dyer Road, LLC, asked the Bankruptcy Court to extend its exclusive periods for filing a Chapter 11 plan and gaining acceptance for that plan until Aug. 19, 2011, and Oct. 21, respectively, citing that it is working with U.S. Bank to satisfy their respective obligations under the Global Settlement Agreement. On Feb. 22, U.S. Bank and Taylor B. Grant, the receiver sold the property to a third party in a receiver sale. Since the sale, the Debtor and U.S. Bank have been discussing resolution of a number of amounts owed to pre-petition creditors and U.S. Bank and the Debtor's respective obligations under the Global Settlement Agreement with respect thereto. The ultimate resolution of these issues will impact any proposed plan to be filed by the Debtor. About CFRI/Greenlaw Dyer Road, LLC Santa Ana, California-based CFRI/Greenlaw Dyer Road, LLC, is a Delaware limited liability company that was formed on June 25, 2007. Its principal asset is a commercial building located at 2001 East Dyer Road, Santa Ana, CA 92705, which consists of approximately 366,471 square feet of industrial space, including office and data center uses, located on 19.1 acres of land. CFRI/Greenlaw filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 10-19345) on July 8, 2010. Howard J. Weg, Esq., David B. Shemano, Esq., and Lorie Ball, Esq., at Peitzman, Weg & Kempinsky LLP, in Los Angeles, serve as the Debtor's bankruptcy counsel. The Debtor disclosed $30,101,904 in total assets and $33,610,022 in total liabilities. COLTS RUN: Wants to Tap Cash Collateral to Pay Professional Fees ---------------------------------------------------------------- Colts Run, L.L.C., asks permission from the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, to use certain cash and cash equivalents that serve as collateral for claims asserted against the Debtor and its property by PNC Bank to pay certain allowed administrative claims composed of payment for professional fees. David K. Welch, Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago, Illinois, relates that the Court has entered orders last year allowing interim compensation to the Debtor's counsel in the amount of $93,782, less the firm's prepetition retainer of $50,000, and to the Debtor's accountants in the amount of $17,792, less the firm's postpetition retainer of $10,000. PNC Bank, the Debtor's primary secured creditor, objected to the payment of the professional fees and sought to impose its default interest, fees, expenses and other costs upon the Debtor. Mr. Welch asserts that payment of the allowed interim fees and expenses to the Debtor's counsel and accountants should be authorized since the secured interests of the Bank are adequately protected and the Property has equity. The Court, in April, determined the value of the Property to be $23,940,914. The Debtor's Property is composed of the "Colts Run Apartments," comprised of 252 residential rental apartment units located in 21 buildings spread over 13.77 acres of land. The Property also comprises a clubhouse and eight garage buildings. A hearing on the request is scheduled for July 20, 2011, at 10:30 a.m. About Colts Run, LLC Lake Forest, Illinois-based Colts Run, LLC, owns and operates a residential apartment project located in Lexington, Kentucky, known as Colts Run Apartments. The Company filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 10-18071) on April 23, 2010. David K. Welch, Esq., at Crane Heyman Simon Welch & Clar, represents the Debtor in its restructuring effort. The Company estimated its assets and debts at $10 million to $50 million as of the Petition Date. COMPTON PETROLEUM: Reports $2.47-Mil. First Quarter Net Earnings ---------------------------------------------------------------- Compton Petroleum Corporation reported net earnings of $2.47 million on $42.70 million of sales revenue for the three months ended March 31, 2011, compared with net earnings of $25.22 million on $71.26 million of sales revenue for the same period during the prior year. As of March 31, 2011, the Company had $368.98 million in total facility and notes and $190.21 million in total equity. Revenue decreased in 2011 compared to 2010 due to reduced production volumes and natural gas prices. Average production volumes were lower quarter-over-quarter due to production declines, the impact of reduced capital expenditures and the impact of asset sales completed in 2010. These factors also impacted cash flow and net earnings, which was 64% and 90% lower in the first quarter of 2011 compared to the same period in 2010, respectively. Compton will host a conference call and web cast on Monday, June 6, 2011 at 9:00 a.m. MST (11:00 a.m. EST) to discuss the first quarter financial and operating results. The format of the call will be as a question and answer session for analysts and investors after a brief summary of results and strategy. To participate in the conference call, please contact the Conference Operator ten minutes prior to the call at 1-888-231-8191 or 1-647- 427-7450. To participate in the web cast, please visit: www.comptonpetroleum.com. The web cast will be archived two hours after the presentation at the Company's Web site. For a replay of this call, please dial: 1-800-642-1687 or 1-416-849-0833 and enter access code 72047010# until June 13, 2011. A full-text copy of the press release announcing the financial results is available for free at http://is.gd/LKFU0U About Compton Petroleum Compton Petroleum Corporation is an exploration and production company. The Company explores for, develops, and produces oil and gas in western Canada. Compton's interests include the areas of Shekille, Senex, Deep Basin, Rimbey, and Vulcan/Gladys, all in Alberta, Canada. The Company's balance sheet at Dec. 31, 2010 showed $1.38 billion in total assets, $712.29 million in liabilities and $664.03 million in shareholders' equity. * * * Moody's Investors Service has withdrawn Compton Petroleum's ratings following the repayment of its rated debt. Ratings withdrawn include the 'Caa1' Corporate Family Rating and Probability of Default Rating, and the 'Caa2' senior unsecured notes rating. As reported by the Troubled Company Reporter on Dec. 1, 2010, Standard & Poor's Ratings Services withdrew its 'B' long- term corporate credit rating on Compton Petroleum Corp. At the same time, Standard & Poor's withdrew its 'B-' senior unsecured rating and '5' recovery rating on subsidiary Compton Petroleum Finance Corp.'s US$193.5 million senior unsecured notes. S&P withdrew the ratings at the Company's request. CORRECTIONS CORP: Moody's Raises Sr. Unsecured Rating to 'Ba1' -------------------------------------------------------------- Moody's Investors Service raised the senior unsecured rating of Corrections Corporation of America to Ba1 from Ba2 and revised the outlook to stable from positive. The rating agency believes the upgrade is warranted given the firm's ability to maintain size and solid debt protection measures despite critical budgetary pressure at every level government, representing many of CCA's customers. RATINGS RATIONALE According to Moody's, CCA maintains superior liquidity, as evidenced by over $425 million in annual EBITDA, no payout requirement (CCA is a C-Corp and does not pay a dividend), no debt maturities until March 2013 and a $450 million line of credit (expandable by $300 million and due December 2012) on which $134 million was drawn at March 31, 2011. Importantly, CCA's 5.8x fixed charge coverage is high for similarly-rated REITs and commercial real estate firms, as well as for similarly-rated non-bank corporate firms. As well, CCA maintains total debt at 2.5x EBITDA scores very strong in comparison with REITs and for corporate issuers in the same rating category. Moody's chief concerns with respect to CCA remain low alternative use for correctional facilities, reliance on the government appropriations process and budgetary pressures which could lead to payment delays, contract cancellations or inmate population declines. Moody's also believe that the presence of headline risk requires careful public relations management, while legal and political issues slow or impede private corrections growth in many states. The stable ratings outlook reflects Moody's belief that CCA will fill its unoccupied beds and continue to prudently grow the number of beds it owns and operates while sustaining fixed charge coverage above 4.5x and debt less than 3.5x EBITDA. Moody's also expects that margins-supported by a higher portion of more profitable wholly-owned beds-will remain above 20% and that secured debt will remain mostly absent from the balance sheet while the company maintains its leadership. Moody's indicated that it would revisit the rating with a positive bias should CCA continue as the leading owner and operator of beds in the US adult private corrections industry, with all private corrections beds continuing to grow as a proportion of all US corrections beds. Additionally, CCA could also achieve an upgrade with growth in assets approaching $4 billion coupled with revenues exceeding $2 billion, without meaningful deterioration in leverage or coverage levels and with little or no secured debt. Should CCA sustain total debt 4x or greater than EBITDA or fixed charge coverage less than 4x, Moody's would likely lower the rating. Other factors which could create negative ratings pressure include: managed-only beds in excess of 25% of EBITDA; secured debt approaching 10% of gross assets; sudden and material loss of contracts which results in total occupancy loss of 10% or more; and revenues dropping below $1.5 billion on a trailing 12 months basis. These ratings were upgraded with a stable outlook: * Corrections Corporation of America -- (P)Baa3 senior secured, from (P)Ba1; Ba1 senior unsecured, from Ba2; (P)Ba1 senior unsecured shelf, from (P)Ba2; (P)Ba2 senior subordinated shelf, from (P)Ba3. The Moody's last rating action with respect to Corrections Corporation took place on September 17, 2009 when the Ba2 rating was affirmed and the rating outlook was revised to positive from stable. The principal methodology used in this rating was the Global Rating Methodology for REITs and Other Commercial Property Firms published in July 2010. Corrections Corporation of America (NYSE: CXW) is an owner and operator of private correction and detention facilities in the United States. CCA currently operates 66 facilities, including 45 company-owned facilities, with a total design capacity of approximately 90,000 beds in 19 states and the District of Columbia. CCA specializes in owning, operating and managing prisons and other correctional facilities and providing inmate residential and prisoner transportation services for governmental agencies. COTTON 303: Bankruptcy Court Considers Case Dismissal Plea Today ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada will convene a hearing today, June 7, 2011, at 10:00 a.m., to consider Cotton 303, LLC's request to dismiss its Chapter 11 case. The Debtor and its major creditor City National Bank, N.A., reached an agreement for the resolution of its debt. The Debtor related that it is now in a position to pay all other creditors in full. Henderson, Nevada-based Cotton 303, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-20380) on June 3, 2010. Terry V. Leavitt, Esq., who has an office in Las Vegas, Nevada, assists the Company in its restructuring effort. The Company estimated assets at $10 million to $50 million and $1 million to $10 million. The U.S. Trustee for Region 17 was unable to appoint an official committee of Unsecured Creditors in the Debtor's case. CROSS BORDER: Enters Into Separation Agreement with BDR Inc. ------------------------------------------------------------ Cross Border Resources, Inc., entered into a Separation Agreement and Release with BDR, Inc., on May 31, 2011. As disclosed in the Company's Form 8-K filing dated March 24, 2011, the Company and BDR, Inc., entered into a Consulting Agreement dated March 24, 2011, that began on Jan. 31, 2011, pursuant to which BDR, Inc., would provide consulting services to the Company. As disclosed in the Company's Form 10-Q filed on May 16, 2011, BDR, Inc., resigned as a consultant to the Company on April 8, 2011. The terms of the Separation Agreement provide for the mutual release of claims by the Company and BDR, Inc., related to the Consulting Agreement and certain indebtedness of the Company. Pursuant to the Separation Agreement, BDR, Inc., received $90,000, the title to a Company provided vehicle used by the consultant, and waiver of its obligation to reimburse the Company for other nominal expenses. BDR, Inc., forfeited its vested and unvested options granted under the Consulting Agreement and other agreements with the Company. A full-text copy of the Separation Agreement and Release is available for free at http://is.gd/4g0zYp About Cross Border Resources Cross Border Resources, Inc. f/k/a Doral Energy Corp. (OTC BB: DRLY) -- http://www.DoralEnergy.com/-- is a licensed oil and gas operator in the state of New Mexico. The Company is headquartered in Midland, Texas. The Company's balance sheet at March 31, 2011, showed $24.91 million in total assets, $11.98 million in total liabilities and $12.93 million in total stockholders' equity. As reported in the Troubled Company Reporter on Nov. 23, 2010, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about Doral Energy'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 negative working capital and recurring losses from operations. CRYSTAL CATHEDRAL: Plans Bidding Process for Church Property ------------------------------------------------------------ Deepa Bharath at the Orange County Register reports that Marc Winthrop, Esq., attorney of Crystal Cathedral, told Judge Robert Kwan that he would soon file a motion specifying the bidding procedures to help obtain the "highest and best bid for the church property." According to the report, last week, the church filed a plan to come out of bankruptcy. The plan consisted of selling the cathedral and surrounding buildings to Greenlaw Partners LLC. and leasing back the cathedral to the ministry. After four years, the ministry would have the right to buy back the cathedral, parking lots and most other buildings for $30 million. Greenlaw would build apartments on a portion of the church's property, according to the plan. Mr. Winthrop said the developer is contemplating calling the development Crystal Gardens. Greenlaw offered to buy the Family Life Center for $16 million and the cathedral and core church buildings for $30 million. About Crystal Cathedral Crystal Cathedral Ministries is a Southern California-based megachurch founded by television evangelist Robert Schuller. The church is known for its television show "The Hour of Power." Crystal Cathedral filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. 10-24771) on Oct. 18, 2010. The Debtor disclosed $72,872,165 in assets and $48,460,826 in liabilities as of the Chapter 11 filing. The U.S. Trustee for Region 16 appointed seven members to the official committee of unsecured creditors in the Chapter 11 case of Crystal Cathedral Ministries. CRYSTALLEX INTERNATIONAL: Notified of Amex Panel Appeal Decision ---------------------------------------------------------------- Crystallex International Corporation has been advised by the NYSE Amex that its May 24, 2011 Appeal of the Exchange's delisting determination has been denied. Crystallex has the right to appeal this decision to the full Committee on Securities, within 15 calendar days, which it intends to do. The Company understands that the NYSE Amex will suspend trading of Crystallex shares on the NYSE Amex while this next Appeal is ongoing. The Company continues to trade on the TSX Exchange and has been advised by OTC Markets Group Inc., which operates the world's largest electronic marketplace for broker-dealers to trade unlisted stocks, that its securities will be immediately eligible for quotation on the OTCQB upon the suspension of trading on the NYSE Amex. The Company is continuing to pursue its objectives of diligently advancing the arbitration claim against Venezuela, while proceeding with the sale of equipment, the ongoing evaluation of opportunities in the mining sector and debt refinancing and restructuring initiatives. About Crystallex International Based in Toronto, Canada, Crystallex International Corporation (TSX: KRY) (NYSE Amex: KRY) -- http://www.crystallex.com/-- is a Canadian-based company, which has been granted the Mine Operating Contract to develop and operate the Las Cristinas gold properties located in Bolivar State, Venezuela. The Company reported a net loss of $48.19 million for the year ended Dec. 31, 2010, compared with a net loss of $313.90 million during the prior year. The Company's balance sheet at Dec. 31, 2010, showed $51.81 million in total assets, $98.46 million in outstanding debt, and a $60.62 million shareholders' deficiency. Crystallex International Corporation confirmed that the auditors' report received from its independent public accounting firm on its audited financial statements for the fiscal year ended Dec. 31, 2010, contained a going concern explanatory note. Crystallex's Annual Financial Statements were included in Crystallex's Form 40- F filed with the Securities and Exchange Commission on April 1, 2011. DAAT ASSET: Files for Chapter 7 Bankruptcy Protection ----------------------------------------------------- Daily News Los Angeles reports that Daat Asset Management Inc., at 2260 Townsgate Road, Suite 740, in Westlake Village, California, filed for Chapter 7 protection in San Fernando Valley, California (Bankr. C.D. Calif. Case No. 11-16110). The Company reported assets of $5,800, and debts of $52,804. DIABLO VILLAGE: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Diablo Village, LLC 3650 N. Rancho Drive, #104 Las Vegas, NV 89130-3151 Bankruptcy Case No.: 11-18688 Chapter 11 Petition Date: June 1, 2011 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Samuel A. Schwartz, Esq. THE SCHWARTZ LAW FIRM 701 E. Bridger Avenue, Suite 120 Las Vegas, NV 89101 Tel: (702) 385-5544 Fax: (702) 385-2741 E-mail: sam@schwartzlawyers.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's nine largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/nvb11-18688.pdf The petition was signed by Bradley F. Burns, member of manager. DUOYUAN PRINTING: To Continue Appeal of NYSE Delisting ------------------------------------------------------ Duoyuan Printing, Inc., previously received a notice on March 28, 2011 indicating that NYSE Regulation, Inc. has determined that the Company is subject to delisting and that the common stock of the Company should be suspended prior to the opening on April 4, 2011. The decision was reached in view of the fact that the Company is a late filer and was under review by NYSE Regulation in light of the delay in filing with the Securities and Exchange Commission of its June 30, 2010 Form 10-K and certain of its fiscal 2011 Form 10-Q filings. On April 4, 2011, the Company's stock was suspended from trading on the NYSE and commenced trading on the over-the-counter market following the suspension. On April 11, 2011, the Company requested a review of NYSE Regulation's determinations. The Company did not request that the suspension be lifted pending the appeal. On May 4, 2011, NYSE Regulation, Inc. Board of Directors' Committee for Review granted the Company a hearing date of September 12, 2011. On May 5, 2011, the Company received a notice from NYSE Regulation requesting the provision of certain information pursuant to the Company's listing agreement with the NYSE. In particular, NYSE Regulation requested information mainly concerning: * details and the status of the Company's internal investigation, * all documents provided to, collected by or gathered in connection with the Company's internal investigation or the SEC investigation, * copies of all correspondence between the Company and the SEC regarding the SEC investigation and copies of all documents and information provided or produced to the SEC in connection with the SEC investigation, * details and the status of the Company's retention of an independent auditor, * complete biographical data for current members of the Board of Directors and the Audit Committee, and * a detailed analysis of the Company's current shareholders' equity, including any support for the financial and operating data disclosed in the Company's March 21, 2011 Form 8-K. In the May 5 letter, NYSE Regulation also reiterated that it would continue to monitor the Company's compliance with the other qualitative and quantitative continued listing standards applicable to the Company. The Company in a June 6 statement said it has since provided a response to NYSE Regulation's May 5 letter as well as responses to subsequent follow-up requests from NYSE Regulation and its counsel, including, in part, the Company's assertion of attorney- client and work product privileges over NYSE Regulation's request for documents provided to, collected by or gathered in connection with the Company's internal investigation or the SEC Investigation. On May 31, 2011, the Company received a notice from NYSE Regulation informing the Company that NYSE Regulation has determined there are additional grounds that render the Company as no longer suitable for continued listing under Section 802.01 of the NYSE's Listed Company Manual. The additional grounds include determinations that: * the Company and/or its management has engaged in operations which, in the opinion of the NYSE, are contrary to the public interest and make further dealings or listing of the Company's common stock on the NYSE inadvisable or unwarranted, which are based on the circumstances under which the Company (a) terminated Deloitte after it identified questionable activity and reported difficulty obtaining information and documentation necessary to complete its audit, (b) disregarded the opinions of the Company's former independent directors with respect to terminating Deloitte, (c) has yet to have retained an independent auditor and has not presented any evidence to NYSE Regulation that it will be able to retain one at any time in the near future, and (d) experienced the resignations of its Chief Financial Officer and two independent directors (including the chair of the Audit Committee), * the Company has failed to provide support for its $50 million stockholders' equity calculation, leading NYSE Regulation to determine that the Company has failed to observe good accounting practices in reporting its earnings and financial position, * the Company's responses to the May 5th letter and subsequent correspondence has failed to comply with its disclosure obligations to the NYSE under its listing agreement, and * the Company has failed to comply with quantitative continued listing standards. At this time, the Company intends to continue pursuing the appeal of NYSE Regulation's determinations. The Company will address the allegations raised by NYSE Regulation at a hearing at NYSE's offices in New York City scheduled on September 12, 2011. About Duoyuan Printing Duoyuan Printing, Inc. -- http://www.duoyuan.com/-- is a leading manufacturer of commercial offset printing presses in China. The Company combines technical innovation and precision engineering to offer a broad range of printing equipment and solutions. Duoyuan Printing, Inc. has manufacturing and research and development facilities in Langfang, Hebei Province and Shaoyang, Hunan Province in addition to a distribution and service network with over 85 distributors that operate in over 65 cities and 28 provinces in China. Headquartered in Beijing, the Company is one of the largest non-government owned major offset printing equipment and solutions providers in China. DYNASTY DEVELOPMENT: Creditors Wants Reorganization Case Dismissed ------------------------------------------------------------------ Paul Alanis and Jess M. Ravich, creditors and parties-in-interest in the Chapter 11 case of Dynasty Development Group, LLC, ask the U.S. Bankruptcy Court for the Southern District of Mississippi to dismiss the Debtor's case. The creditors relate that the Debtor's filing for bankruptcy was a classic bad faith filing in order to grant it some sort of litigation advantage to avoid its obligations in the civil action. According to the creditors, the Debtor has: -- no list of secured creditors; -- only a few unsecured creditors and those creditors appear to be insiders; and -- one asset - its interest in the Company. DDJ Capital Management, LLC, as agent for certain lenders party to ha Third Amended and Restated Loan Agreement dated as of March 18, 2009, supports the motion to dismiss the Debtor's case. The lender is concerned that the window of opportunity for maximizing the value of the Company may be lost if its equity stakeholders are unable to approve a sale as a result of the Debtor's Chapter 11 filing. The Court will convene a hearing on June 21, 2011, at 9:00 a.m., consider the motions to dismiss the Debtor's case. About Dynasty Development Group, LLC Headquartered in Las Vegas, Nevada, Dynasty Development Group, LLC, dba Paradise Bay Hotel & Casino filed for Chapter 11 protection (Bankr. S.D. Miss. Case No. 11-50997) on April 29, 2011. Bankruptcy Judge Katharine M. Samson presides over the case. William R. Armstrong, Jr., P.A., represents the Debtor in its restructuring effort. The Debtor disclosed $5,221,834 in assets and $1,775,000 in liabilities as of the Chapter 11 filing. DYNASTY DEVELOPMENT: Files Schedules of Assets and Liabilities -------------------------------------------------------------- Dynasty Development Group, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Mississippi its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $43,000 B. Personal Property $5,178,834 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $1,775,000 ----------- ----------- TOTAL $5,221,834 $1,775,000 Las Vegas, Nevada-based Dynasty Development Group, LLC, dba Paradise Bay Hotel & Casino filed for Chapter 11 protection (Bankr. S.D. Miss. Case No. 11-50997) on April 29, 2011. Bankruptcy Judge Katharine M. Samson presides over the case. William R. Armstrong, Jr., P.A., represents the Debtor in its restructuring effort. ELITE PHARMACEUTICALS: Trellus Management Has 7.26% Equity Stake ---------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Trellus Management Company, LLC, and its affiliates disclosed that they beneficially own 17,678,063 shares of common stock of Elite Pharmaceuticals, Inc., representing 7.26% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/bsgDTy About Elite Pharmaceuticals Northvale, N.J.-based Elite Pharmaceuticals, Inc. (OTC BB: ELTP) -- http://www.elitepharma.com/-- is a pharmaceutical firm that develops and manufactures oral, controlled-release products using proprietary technology. Elite developed and manufactures for its partner, ECR Pharmaceuticals, Lodrane 24(R) and Lodrane 24D(R), for allergy treatment and expects to launch soon three approved generic products. Elite also has a pipeline of additional generic drug candidates under active development and the Company is developing ELI-216, an abuse resistant oxycodone product, and ELI- 154, a once-a-day oxycodone product. Elite conducts research, development and manufacturing in its facility in Northvale, New Jersey. The Company's balance sheet at Dec. 31, 2010, showed $10.89 million in total assets, $17.46 million in total liabilities, and $6.57 million in total stockholders' deficit. Demetrius & Company, L.L.C., in Wayne, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's results for fiscal year ended March 31, 2010. The independent auditors noted that the Company has experienced significant losses and negative operating cash flows resulting in a working capital deficiency and shareholders' deficit. The Company reported a net loss $8.1 million on $3.3 million of revenue for the fiscal year ended March 31, 2010, compared with a net loss of $6.6 million on $2.3 million of revenue for the year ended March 31, 2009. EMMIS COMMUNICATIONS: Number of Directors Decreased to Eight ------------------------------------------------------------ The Board of Directors of Emmis Communications Corporation amended Section 3.2(a) of Emmis' Second Amended and Restated Code of By-Laws to decrease the number of directors on the Board from nine to eight, as such number may be increased under Section 2.11(h) of the Bylaws during any period of time in which the holders of Emmis' 6.25% Series A Cumulative Convertible Preferred Stock are entitled to elect two directors to the Board. This change to the By-Laws merely conforms the number of directors specified in the By-Laws to the number of directors currently serving on the Board. A full-text copy of the Second Amended and Restated Code of By-laws is available for free at http://is.gd/mDUuz7 About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. The Company reported a consolidated net loss of $11.54 million on $251.31 million of net revenues for the year ended Feb. 28, 2011, compared with a consolidated net loss of $118.49 million on $242.56 million of net revenues during the prior year. The Company's balance sheet at Feb. 28, 2011, showed $472.47 million in total assets, $474.00 million in total liabilities, $140.45 million in series A cumulative convertible preferred stock, $0.01 par value, and a $141.98 million total deficit. * * * In November 2010, Moody's Investors Service affirmed the 'Caa2' Corporate Family Rating and 'Caa3' Probability of Default rating for Emmis Communications Corporation, as well as its SGL-4 speculative grade liquidity rating. Operating performance improved with the economic recovery, but absent debt reduction with proceeds from an asset sale or equity infusion Emmis will likely breach its leverage covenant when the covenant suspension period ends for the quarter ending November 30, 2011, in Moody's opinion. Emmis' CFR and PDR incorporate expectations for a covenant breach in November 2011. Moody's considers the Company's capital structure unsustainable, and its operations in the cyclical advertising business magnify this challenge. Furthermore, Emmis relies on two markets, Los Angeles and New York, for approximately 50% of its revenue, although its ownership of stations in top markets including Chicago as well as NY and LA, support the rating. The negative outlook incorporates Moody's expectations that Emmis will not comply with its maximum leverage covenant when effective for the quarter ending November 30, 2011. FABRICATED STEEL: Files for Chapter 7 Liquidation ------------------------------------------------- Alex Gary at Rockford Register Star reports that Fabricated Steel Products Inc. filed for Chapter 7 liquidation. The Company, which was a subcontractor for the new federal courthouse being completed in downtown Rockford, Illinois, disclosed $8,500 in assets and $1,395,889 in debts. FAIRFAX CROSSING: Amends Plan, to Consolidate Subsidiaries ---------------------------------------------------------- Fairfax Crossing LLC and Fairfax Crossing II LLC filed a second amended plan of reorganization providing for the substantial consolidation of the two debtors into one reorganized company. As of the Effective Date, the members, distributional interest holder, and managers of Fairfax immediately prior to the Effective Date will be deemed to be the members, distributional interest holder, and managers of the Reorganized Debtor without any further action by any party. Pursuant to Section 1129(a)(5) of the Bankruptcy Code, each of Ronald E. Marcus and Christopher B. Shultz, will continue to hold 50% of the membership interests and a 33.33% distributional interest in the Reorganized Debtor and the estate of Terry L. Marcus will continue to hold a 33.33% distributional interest in the Reorganized Debtor. Each of Ronald E. Marcus and Christopher B. Shultz will be a manager of the Reorganized Debtor. Claims are classified and will be paid according to this table: Class Description Treatment ----- ----------- --------- 1 Secured Claim of BB&T Impaired, Entitled to Vote Recovery: 100% 2 Secured Turf Guaranty Claim Impaired, Entitled to Vote Recovery: 100% 3 Secured Claim of Glendwell Impaired, Entitled to Vote and Jo Ann Lloyd Recovery: 100% 4 Unsecured Claim of Perry Impaired, Entitled to Vote Engineering Recovery: 100% 5 Unsecured Claims of Impaired, Entitled to Vote Unrelated Parties other Recovery: 100% than Perry Engineering 6 Unsecured Claims of Impaired, Entitled to Vote Related Parties Recovery: 100% 7 Equity Interests Unimpaired, Not Entitled to Vote Recovery: Retain Equity Interests in Reorganized Debtor A full-text copy of the Second Amended Plan, dated May 10, 2011, is available for free at http://ResearchArchives.com/t/s?7622 Hearing on the confirmation of the Plan was scheduled for May 31, 2011, at 03:00 p.m. About Fairfax Crossing Based in Charles Town, West Virginia, Fairfax Crossing LLC filed for Chapter 11 Bankruptcy Protection on June 29, 2010 (Bankr. N.D. W.V. Case No. 10-01362). Judge Patrick M. Flatley presides over the Debtor's case. The Debtor estimated both assets and debts of between $1 million and $10 million. Debtor-affiliate Charles Town, West Virginia-based Fairfax Crossing II LLC filed a separate petition for Chapter 11 bankruptcy protection on June 29, 2010 (Bankr. N.D. W.V. Case No. 10-01368). Fairfax Crossing II disclosed $24,270,748 in assets and $5,589,190 in liabilities as of the petition date. Richard G. Gay, Esq., at the Law Office of Richard G. Gay, L.C., in Berkeley Springs, W. Va., and Lawrence J. Yumkas, Esq, at Vidmar & Sweeney, LLC, in Annapolis, Md., represent the Debtors as counsel. The cases are jointly consolidated under Case No. 10-01362. Fairfax is the developer of Lakeland Place at Fairfax Crossing, a community comprised of single family residences and townhomes in Ranson, West Virginia. Fairfax II is a real estate development company that holds title to a 19.1139 acre residential and commercial parcel in Fairfax Crossing and also holds title to an adjoining 31.13 acre parcel which Fairfax plans to develop into a residential community called Lloyd's Landing. FAST CAR: Files for Chapter 7 Bankruptcy Protection --------------------------------------------------- Daily News Los Angeles reports that Fast Car Towing Inc., at 18418 Vanowen St., in Reseda, California, filed for Chapter 7 protection in San Fernando Valley (Bankr. C.D. Calif. Case No. 11-15855). FRE REAL ESTATE: Denied Cash Collateral Use, Seeks Reconsideration ------------------------------------------------------------------ Judge D. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas denied Fre Real Estate, Inc.'s request for authority to use cash collateral. The Debtor owns four separate parcels of real property: -- two seven-story office towers located at 1501-1503 and 1505 1507 LBJ Freeway in Farmer's Branch, Texas 7523; -- 4.7 acres of undeveloped land adjacent to Fenton Centre on LBJ Freeway; -- a 177,805 square foot building in Farmer's Branch, Texas, off of Valley View Lane, just east of Mercer Crossing; and -- 6.60 acres of vacant land in Mercer Crossing, just off Valley View Lane, alongside Whittington. The Debtor's primary source of income comes from rents generated from Fenton Centre. The Debtor is indebted to its mortgage lender, NexBank, in the amount of approximately $60,400,000. NexBank's note is collateralized by Fenton Centre pursuant to a Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing executed on or about January 19, 2007. In April, the Debtor filed its motion for authority to use Cash Collateral. The Motion acknowledged that rents from the Debtor's Property are collateral for NexBank's loan and sought a Court order authorizing the Debtor to use the cash collateral to pay its operating expenses. Highland Capital Management, L.P., the special servicer for NexBank, objected to the Motion. In a letter ruling, the Court concluded that the documents governing the NexBank loan create an absolute assignment of rents. The Court concluded that one sentence in Paragraph 10.1 of the Deed of Trust required the Court to disregard all other provisions and hold that the assignment of rents was absolute. Specifically, the Court determined that because that sentence contained the word "notwithstanding," it negates all other language in the Deed of Trust and must be read in isolation. The Debtor seeks reconsideration of the Ruling for three reasons: (1) The Court's conclusions do not address or otherwise account for the plain language in Section 541(a)(6) of the Bankruptcy Code, which specifically makes postpetition "rents" property of the Debtor's bankruptcy estate, with no exception for rents subject to an absolute assignment executed by the Debtor prepetition. (2) The Court's conclusion is incompatible with the strong presumption under Texas law that the parties did not create an absolute assignment of rents; a presumption that can only be rebutted by "especially clear evidence." One word buried within one section of a 40-page Deed of Trust cannot satisfy Highland's evidentiary burden as a matter of law. As the Court pointed out in its letter ruling, the Deed of Trust is rife with language purporting to create a security interest. Texas substantive law and Texas rules of contract construction required the Court to focus on that language, rather than one word in one sentence, buried in Section 10.1 of the Deed of Trust. Moreover, because the purported absolute assignment is not automatic and self executing, Texas law requires that it be construed as a lien. (3) The Court's conclusion produces an inequitable result. Section 541(a)(6) of the Bankruptcy Code and the Texas law presumption against absolute assignments of rents are specifically designed to prevent rulings based solely on linguistic technicalities. Moreover, the Court's conclusion has the practical effect of denying Chapter 11 relief to all debtors who rely on rents as their principal source of income, as mortgage lenders routinely place such language in their loan documents. Because Section 10.1 of the Deed of Trust constitutes a "forfeiture clause," the Court should not have enforced that provision if the document, read as a whole, could be construed in any other way. Highland Capital wants the Debtor's reconsideration motion junked arguing that the provisions of Paragraph 10.1 are intended to control the interpretation of the Deed of Trust, as the Court confirmed by the use of the word "notwithstanding." The Debtor's reconsideration argument contradicts the controlling case law of the Fifth Circuit and is merely a desperate attempt to get a "second bite at the apple," Highland Capital further argued. About FRE Real Estate Fort Worth, Texas-based FRE Real Estate, Inc., aka Fenton Real Estate, Inc., owns a commercial real estate complex comprising two seven-story office towers totaling approximately 696,458 square feet and two five-level parking garages located at 1501-1503 and 1505-1507 LBJ Freeway in Farmer's Branch, Texas 75234. FRE Real Estate filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 11-42042) on April 4, 2011. Robert A. Simon, Esq., at Barlow Garsek & Simon, LLP, serves as the Debtor's bankruptcy counsel. The Debtor disclosed $70,635,902 in assets and $66,887,513 in liabilities as of the Chapter 11 filing. The Debtor intends to recast the mortgage through a plan note with a longer maturity, at the same interest rate. Alternatively, the Debtor may elect to sell the Property in a controlled liquidation. Because the mortgage grants a lien on the rents and other charges generated by the Property, NexBank has a lien on the Debtor's cash. FRE Real Estate previously filed for Chapter 11 bankruptcy protection on Jan. 4, 2011 (Bankr. N.D. Tex. Case No. 11-30210). John P. Lewis, Jr., at the Law Office of John P. Lewis, Jr., served as the Debtor's bankruptcy counsel. Wells Fargo Capital Finance, a major secured creditor of the Debtor, however, asked the Bankruptcy Court to dismiss the Debtor's Chapter 11 bankruptcy case on the grounds that the petition was filed in bad faith. Bankruptcy Judge Barbara J. Houser agreed to dismiss the case, acknowledging that there was no "good business justification" for TCI Texas Properties LLC to transfer 10 properties securing the Wells Fargo loan to FRE -- and at the same time other affiliates of TCI transferring numerous properties to FRE -- then later have FRE file for bankruptcy. Judge Houser said that absent the "new debtor syndrome", bankruptcy law would have put each mortgage lender "substantially in control, if not in complete control." To date, no committee of unsecured creditors has been appointed. GENBAND INC: Moody's Downgrades Corporate Family Rating to 'B3' --------------------------------------------------------------- Moody's Investors Service downgraded GENBAND Inc.'s corporate family rating to B3 from B2 and senior secured term to B3 from B2. The downgrade was based on the below plan financial performance and cash balances since acquiring the Nortel's CVAS assets in May 2010. The ratings outlook is stable. RATINGS RATIONALE GENBAND's B3 rating reflects the company's lower than originally projected revenue and cash flow since acquiring Nortel's CVAS business and lower than expected cash balances. The ratings take into consideration GENBAND's market leading positions in the carrier grade VoIP equipment market and its well established customer base though also considers the evolving nature of carrier network architectures. While much of the heavy lifting of the CVAS integration is behind them, free cash flow is not expected to be positive until late in 2011. The ratings could face upward pressure if the company is able to demonstrate revenue growth and positive free cash flow (as defined by cash flow from operations less capital expenditures) in the second half of 2011 and that a significant increase in profits and cash flow is expected to be sustained for some time. Backlog levels are currently above prior year levels and if the company is successful in growing revenues, debt to EBITDA could fall well below 3x in 2012. The stable outlook reflects Moody's view that although revenues are below Moody's original expectations, the company remains a major player in the carrier VoIP equipment market, booking trends are encouraging and most of the integration expense of the Nortel acquisition is behind them. These ratings were downgraded: -- Corporate family rating: to B3 from B2 -- Probability of default: to B3 from B2 -- Senior secured term loan due 2015 to B3, LGD3 (47%) from B2, LGD3 (45%) Ratings outlook: stable All of the senior secured term debt is held at this time by One Equity Partners, which is the private equity firm that owns GENBAND. Moody's most recent communication on GENBAND was April 20, 2010 when Moody's assigned first time ratings. The principal methodology used in rating Genband was Moody's Global Communications Equipment Methodology, published in June 2008. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. GENBAND, headquartered in Plano, Texas, is a leading provider of carrier VoIP equipment. GENCORP INC: SPH Group Discloses 6.9% Equity Stake -------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, SPH Group Holdings LLC and its affiliates disclosed that they beneficially own 4,055,737 shares of common stock of GenCorp Inc. representing 6.9% of the shares outstanding. A full-text copy of the regulatory filing is available at no charge at http://is.gd/e5AG6N About GenCorp Inc. Rancho Cordova, Calif.-based GenCorp Inc. (NYSE: GY) -- http://www.GenCorp.com/-- is a manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the re-zoning, entitlement, sale, and leasing of the Company's excess real estate assets. The Company's balance sheet at Feb. 28, 2011 showed $989.60 million in total assets, $1.16 billion in total liabilities, $4.90 million in redeemable common stock, and a $182.60 million shareholders' deficit. * * * Standard & Poor's in February 2011 has raised its corporate credit rating on GenCorp Inc. to 'B' from 'B-'. S&P also raised its rating on the company's first-lien secured debt to 'BB-' from 'B+' and on the subordinated debt to 'CCC+' from 'CCC'. The recovery rating on the first-lien secured debt remains unchanged at '1', and the recovery rating on the subordinated debt remains unchanged at '6'. The outlook is stable. "We are raising its ratings on GenCorp by one notch to reflect the company's improved liquidity position," said Standard & Poor's credit analyst Lisa Jenkins. "The ratings on GenCorp reflect its highly leveraged capital structure, weak financial performance, limited diversity, and modest scale of operations compared with competitors. Offsetting these challenges to some extent is the company's good niche positions in aerospace propulsion and solid backlog. S&P characterize GenCorp Inc.'s business profile as weak and its financial profile as highly leveraged." As reported by the TCR on May 24, 2011, Moody's Investors Service upgraded the corporate family and probability of default ratings of GenCorp Inc. to B1 from B2. The upgrade reflects the Company's steady improvement to operating results, as a leading niche supplier of solid and liquid rocket propulsion systems to prime defense contractors. Operating margins have grown to above 11% (inclusive of Moody's standard adjustments) in the most recent twelve-month period, resulting from growth in defense programs that GenCorp supplies (THAAD, Aegis, PAC-3) and good cost controls. GenCorp's funded backlog has grown steadily over several years, and is now about 90% of sales. The level of backlog provides good forward revenue visibility and compares favorably with other defense suppliers. GENERAL GROWTH: Asks for Final Decree Closing 136 Ch. 11 Cases -------------------------------------------------------------- Pursuant to Section 350 of the Bankruptcy Code and Rule 3022 of the Federal Rules of Bankruptcy Procedure, GGP, Inc. and its debtor affiliates ask Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York to enter a final decree closing the Chapter 11 cases of 136 Reorganized Debtors. A. Group 1 Reorganized Debtors GGP proposes to close the Chapter 11 cases of 67 Reorganized Debtors -- Group 1 Reorganized Debtors -- effective on or prior June 30, 2011: Closing Debtors Case No. --------------- -------- 10190 Covington Cross, LLC 09-12041 Bay Shore Mall II L.L.C. 09-12065 Burlington Town Center II LLC 09-12477 Chico Mall L.L.C. 09-12084 Deerbrook Mall, LLC 09-12094 Fallen Timbers Shops, LLC 09-12106 Fashion Place Anchor Acquisition, LLC 09-12110 Gateway Crossing L.L.C. 09-12116 Gateway Overlook Business Trust 09-12117 GGP Acquisition, L.L.C. 09-12119 GGP Ivanhoe II, Inc. 09-12125 GGP Knollwood Mall, LP 09-12128 GGP Village at Jordan Creek L.L.C. 09-12029 GGP/Homart Services, Inc. 09-12132 GGP-Canal Shoppes L.L.C. 09-12136 GGP-Grandville Land L.L.C. 09-12140 GGP-Lansing Mall, Inc. 09-12143 GGP-Maine Mall Holding L.L.C. 09-12145 GGP-Maine Mall L.L.C. 09-12144 GGP-Maine Mall Land L.L.C. 09-12146 GGP-North Point Land L.L.C. 09-12016 GGP-Pecanland II, L.P. 09-11991 GGP-Pecanland, Inc. 09-12151 GGP-Steeplegate, Inc. 09-12154 Grand Traverse Mall Holding, Inc. 09-12483 Harborplace Borrower, LLC 09-12162 Kalamazoo Mall, Inc. 09-12485 Lakeside Mall Holding, LLC 09-12181 Mall of Louisiana Land, LP 09-12192 Mall of the Bluffs, LLC 09-12194 Mall St. Matthews Company, LLC 09-12195 Natick Retail, LLC 09-12202 NewPark Mall L.L.C. 09-12204 North Plains Mall, LLC 09-12205 North Star Anchor Acquisition, LLC 09-12206 Parcit-IIP Lancaster Venture 09-12486 Parcity L.L.C. 09-12487 Parcity Trust 09-12488 Park City Holding, Inc. 09-12489 PC Lancaster Trust 09-12491 PDC-Red Cliffs Mall L.L.C. 09-12222 Phase II Mall Subsidiary, LLC 09-12032 Piedmont Mall, LLC 09-12225 Providence Place Holdings, LLC 09-12233 River Falls Mall, LLC 09-12239 River Hills Land, LLC 09-12240 River Hills Mall, LLC 09-12241 Rouse-Oakwood Shopping Center, LLC 09-12259 Rouse-Phoenix Theatre Limited Partnership 09-12011 Rouse-Portland, LLC 09-12264 Running Brook Business Trust 09-12475 Silver Lake Mall, LLC 09-12271 St. Cloud Mall Holding L.L.C. 09-12281 Stonestown Shopping Center Holding L.L.C. 09-12479 Stonestown Shopping Center L.L.C. 09-12282 Summerlin Corporation 09-12285 The Hughes Corporation 09-12177 The Rouse Company at Owings Mills, LLC 09-12244 The Rouse Company BT, LLC 09-12036 The Rouse Company of Florida, LLC 09-12245 Two Arizona Center, LLC 09-12295 Valley Hills Mall, Inc. 09-12299 Ward Gateway-Industrial-Village, LLC 09-12312 White Marsh Mall Associates 09-12001 White Marsh Mall, LLC 09-12317 White Marsh Phase II Associates 09-12002 White Mountain Mall, LLC 09-12318 B. Group 2 Reorganized Debtors GGP asks Judge Gropper to close the Chapter 11 cases of any of 69 Reorganized Debtors -- Group 2 Reorganized Debtors -- that settles, disallows or otherwise resolves any remaining open claims in its Chapter 11 case on or prior to June 30, 2011, so that no claims would remain active in its Chapter 11 case as of June 30, 2011: Closing Debtors Case No. --------------- -------- 10 CCC Business Trust 09-12457 10000 Covington Cross, LLC 09-12324 20 CCC Business Trust 09-12458 30 CCC Business Trust 09-12459 Apache Mall, LLC 09-12054 Baltimore Center Associates Limited Partnership 09-12006 Bellis Fair Partners 09-11968 Boulevard Associates 09-12074 Cache Valley, LLC 09-12079 Capital Mall L.L.C. 09-12462 Chapel Hills Mall L.L.C. 09-12082 Chula Vista Center, LLC 09-12085 Columbia Mall L.L.C. 09-12089 Coronado Center L.L.C. 09-12090 Country Hills Plaza, LLC 09-12093 Eagle Ridge Mall, L.P. 09-12097 Eden Prairie Mall L.L.C. 09-12101 Faneuil Hall Marketplace, LLC 09-12108 Fashion Place, LLC 09-12109 GGP Jordan Creek L.L.C. 09-12028 GGP Kapiolani Development L.L.C. 09-12127 GGP Natick Residence LLC 09-12129 GGP-Brass Mill, Inc. 09-12134 GGP-Gateway Mall L.L.C. 09-12467 GGP-Grandville L.L.C. 09-11971 GGP-Moreno Valley, Inc. 09-12147 GGP-Newgate Mall, LLC 09-12148 GGP-North Point, Inc. 09-12150 GGP-UC L.L.C. 09-12156 Harbor Place Associates Limited Partnership 09-12009 Howard Hughes Properties V, LLC 09-12173 Kapiolani Condominium Development, LLC 09-12178 Lakeview Square Limited Partnership 09-12183 Lancaster Trust 09-12473 Lockport L.L.C. 09-11966 Mondawmin Business Trust 09-12474 Northgate Mall L.L.C. 09-12209 Owings Mills Limited Partnership 09-12217 Park Mall L.L.C. 09-12219 Park Square Limited Partnership 09-12022 Parkside Limited Partnership 09-12021 Parkview Office Building Limited Partnership 09-12020 PDC Community Centers L.L.C. 09-12220 PDC-Eastridge Mall L.L.C. 09-12221 Pine Ridge Mall L.L.C. 09-12227 Pioneer Office Limited Partnership 09-12228 Pioneer Place Limited Partnership 09-12229 Ridgedale Center, LLC 09-12237 Rio West L.L.C. 09-12238 Rogue Valley Mall L.L.C. 09-12242 Rouse Providence LLC 09-12252 Rouse-Arizona Retail Center Limited Partnership 09-12012 Rouse-Phoenix Corporate Center Limited Partnership 09-12262 Sierra Vista Mall, LLC 09-12269 Sikes Senter, LLC 09-12270 South Shore Partners, L.P. 09-11993 Southwest Plaza L.L.C. 09-12278 St. Cloud Mall L.L.C. 09-12033 The Burlington Town Center LLC 09-12025 The Village of Cross Keys, LLC 09-12306 Town Center East Business Trust 09-12476 Town East Mall, LLC 09-12288 Tracy Mall Partners, L.P. 09-12290 Tysons Galleria L.L.C. 09-12297 VCK Business Trust 09-12301 Victoria Ward Entertainment Center L.L.C. 09-12303 Victoria Ward, Limited 09-12304 Ward Plaza-Warehouse, LLC 09-12313 White Marsh General Partnership 09-12000 Because the full list of the Group 2 Reorganized Debtors will not be known until June 30, 2011, GGP proposes to file, on or before July 8, 2011, the final list of the Group 2 Reorganized Debtors whose Chapter 11 cases were fully administered on or before June 30, 2011. The Reorganized Debtors also propose to leave open the Chapter 11 cases of any remaining Reorganized Debtor whose case is not fully administered on or before June 30, 2011. On March 31, 2011, the Court entered a final decree closing the Chapter 11 cases of 128 reorganized debtors. As a result, 260 Reorganized Debtors' Chapter 11 cases remain open. As of June 3, 2011, the claims asserted against the Group 1 Debtors had been settled, resolved, disallowed and expunged so that no additional administration in those Reorganized Debtors' cases, Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges LLP, in New York, tells Judge Gropper. In addition, GGP expects to finally administer the claims asserted against the Group 2 Reorganized Debtors, she discloses. Ms. Goldstein tells the Court that the Chapter 11 cases of the Group 1 Reorganized Debtors and the Group 2 Reorganized Debtors have been "fully administered" or will have been fully administered on or prior to June 30, 2011 within the meaning of Section 350 of the Bankruptcy Code, and the Project Debtors' Joint Plan of Reorganization and the TopCo's Third Amended Joint Plan of Reorganization have been substantially consummated within the meaning of Section 1101(2) of the Bankruptcy Code, making it appropriate for the Court to enter a final decree closing those cases. Indeed, the confirmation orders entered with respect to the Confirmed Plans have become final and non-appealable, she points out. Ms. Goldstein asserts that the factors set forth in the Advisory Committee Note to Rule 3022 of the Federal Rules of Bankruptcy Procedure have been satisfied with respect to each of the Closing Debtors' reorganization cases, namely: * the Reorganized Debtors have emerged from Chapter 11 as reorganized entities; * all property proposed to be transferred pursuant to the Confirmed Plans has been transferred; * the Reorganized Debtors have assumed the business and management of the property dealt with by the Confirmed Plans; and * allowed and undisputed payments required under the Project Debtor Plan are completed or substantially underway with respect to the TopCo Plan. The Court will consider the Reorganized Debtors' request on June 23, 2011. Objections are due no later than June 17. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 protection on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, serve as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. General Growth Properties on Nov. 9, 2010, successfully completed the final steps of its financial restructuring and emerged from Chapter 11. GGP successfully restructured approximately $15 billion of project-level debt Recapitalized with $6.8 billion in new equity capital Paid all creditor claims in full achieved substantial recovery for equity holders. As part of its plan of reorganization, GGP has split itself into two separate and independent publicly traded corporations. GGP shareholders as of the record date of Nov. 1, 2010, received common stock in both companies. The new GGP, which will commence trading Nov. 10 on The New York Stock Exchange under the ticker symbol "GGP," is the second-largest shopping mall owner and operator in the country, with more than 183 regional malls in 43 states. The spin-off company, The Howard Hughes Corporation, consists of GGP's portfolio of master planned communities and other strategic real estate development opportunities. This company will trade under the ticker symbol "HHC" on The New York Stock Exchange. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: May Spin-Off Properties in $1.8-Bil. Deal --------------------------------------------------------- General Growth Properties, Inc., ("New GGP") is considering spinning off three dozen of its less lucrative properties in a deal potentially valued at $1.8 billion, according to people familiar with the matter, Kris Hudson of The Wall Street Journal reports. The spin-off is being discussed by New GGP's management and has not yet received approval from the company's board, the people said, according to Mr. Hudson. If the Company follows through, it would conduct a rights offering, giving the shareholders option to buy stock in the spin-off company at a set price, Mr. Hudson relates. He adds that the company would then backstop the offering by purchasing any unsold shares. A separate report by Ilaina Jonas of Reuters relates that New GGP will place the properties to be spun off into a real estate investment trust, according to two sources familiar with the plans. Eastdil Securities is handling the deal, according to Reuters' sources. The assets going into the REIT consist of neighborhood strip malls, office properties, and weaker regional malls the company has planned to sell or return to lenders, the Reuters sources said. News on the spin-off sent the company' shares, which had been up 0.6%, down 1.6% to close at $16.23 on the New York Stock Exchange, according to the Reuters report dated June 3, 2011. "GGP has publicly said we will pare our portfolio to our core properties. No final decision has been made nor will it be until we explore all viable options," GGP spokesperson David Keating said in an e-mailed statement, Reuters relays. A REIT is a real estate-linked company that can avoid paying U.S. corporate income taxes if it distributes at least 90% of its taxable income to shareholders, Reuters relates. It is unclear whether the REIT to be created by New GGP would be publicly traded, Reuters says. The Journal recalled that since its emergence last November, the mall owner spun off several properties as Howard Hughes Corp. The Company also announced its plans to forfeit up to 11 malls to its lenders and to sell 19 malls, leaving in its portfolio about 150 of its strongest malls, the report notes. The spin-off, if completed, would happen in lieu of GGP selling the 19 malls, The Journal states. The exact composition or number of malls in the spinoff is not yet set, The Journal relates. GGP's "unexpected step may have resulted from an inability to get desired pricing on its non-core assets," Benjamin Yang, analyst at Keefe, Bruyette & Woods, wrote in a report distributed to his firm's clients on June 3, the Journal relays. "We also believe pricing for (lesser) quality malls has been all over the map in recent months, and the market demand may not have been as deep as previously thought." According to the Journal, the company's not regularly selling its weaker malls in the years before its 2009 bankruptcy filing, left it with several properties that are generating sales far below the industry average. Indeed, New GGP owns 21 malls generating annual sales per square foot of less than $300, according to Green Street Advisors, The Journal relays. The industry average is $351, the report notes. Reuters adds that GGP owned more than 180 malls. New GGP Chief Executive Officer Sandeep Mathrani in April said he planned to trim that number to 150, Reuters notes. GGP now owns about 169 malls, the report adds. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 protection on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, serve as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. General Growth Properties on Nov. 9, 2010, successfully completed the final steps of its financial restructuring and emerged from Chapter 11. GGP successfully restructured approximately $15 billion of project-level debt Recapitalized with $6.8 billion in new equity capital Paid all creditor claims in full achieved substantial recovery for equity holders. As part of its plan of reorganization, GGP has split itself into two separate and independent publicly traded corporations. GGP shareholders as of the record date of Nov. 1, 2010, received common stock in both companies. The new GGP, which will commence trading Nov. 10 on The New York Stock Exchange under the ticker symbol "GGP," is the second-largest shopping mall owner and operator in the country, with more than 183 regional malls in 43 states. The spin-off company, The Howard Hughes Corporation, consists of GGP's portfolio of master planned communities and other strategic real estate development opportunities. This company will trade under the ticker symbol "HHC" on The New York Stock Exchange. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GENERAL GROWTH: Court OKs $199-Mil. in Professional Fees -------------------------------------------------------- Bankruptcy Judge Allan Gropper granted the final fee applications of 23 professionals in the Chapter 11 cases of GGP, Inc., formerly known as General Growth Properties, Inc., and its debtor affiliates for the fee period from April 16, 2009 to November 30, 2010. The Allowed Fees for the Final Fee Period total $199,300,236 and the Allowed Expenses for the same fee period total $6,094,688. The awarded professionals are Akin Gump Strauss Hauer & Feld LLP; AlixPartners, LLP; Assessment Technologies Ltd; Bracewell & Giuliani; Cantor Fitzgerald & Co.; Cushman & Wakefield, Inc.; Deloitte & Touche LLP; Deloitte Tax LLP; Epiq Bankruptcy Solutions, LLC; Ernst & Young LLP; Grant Thornton LLP; Halperin Battaglia Raicht, LLP; Hewitt Associates LLC; Houlihan Lokey Howard & Zukin Capital, Inc.; Hughes Hubbard & Reed LLP; Jenner & Block LLP; Kirkland & Ellis LLP; KPMG LLP; Miller Buckfire & Co.; LLC; PricewaterhouseCoopers LLP; Saul Ewing LLP; The Weitzman Group, Inc.; and Weil Gotshal & Manges LLP. The Reorganized Debtors will release, to the extent of any award granted pursuant to this order, any outstanding fee holdbacks imposed in these Chapter 11 cases. Judge Gropper stated that several of the Professionals agreed to certain reductions with respect to the first interim applications, which were reflected in the First Interim Fee Order dated March 26, 2010. The final and expense figures set forth in the fees and expenses sought already incorporate the reductions taken by the Professionals and approved by the Court pursuant to the First Interim Fee Order, Judge Gropper acknowledged. A schedule of the amounts approved by the Court pursuant to the First Interim Fee Order is available for free at: http://bankrupt.com/misc/ggp_remainingfeesawarded.pdf Judge Gropper noted that the Allowed Fees reflect voluntary reductions, where applicable, per discussions with the Fee Committee and as reflected in the Fee Committee Report. Certain professionals agreed to lump-sum reductions in their requested fees and expenses, and the Fee Committee agreed it was unnecessary to allocate the reduction between fees expenses. Thus, the fees awarded to these professionals reflect the entire lump-sum reduction agreed by each of the professionals and the Fee Committee: Firm Fees Awarded ---- ------------ Akin Gump $15,254,474 Bracewell & Giuliani $1,429,760 Ernst & Young $1,300,667 Weil Gotshal $53,522,595 Judge Gropper also acknowledged that Weil Gotshal's requested fees of $54,652,445 reflects the firm's revised request, which was communicated to the Fee Committee but not otherwise incorporated into an amended application. The fees awarded to Kirkland & Ellis, totaling $26,112,484, incorporates a $7,276 reduction in fees that was not disclosed in the firm's application. The bankruptcy judge explained that the $2,050,000 in fees and $10,159 in expenses awarded to Cantor Fitzgerald, and the $5,259,267 in fees and expenses totaling $128,482 awarded to Saul Ewing, do not include the fee enhancements sought by the firms, which requests will be heard separately by the Court. Judge Gropper further stated that Saul Ewing's requested expenses totaling $129,482 include a final expense request of $11,948, representing final expense reimbursement requests of the Official Committee of Equity Security Holders' members. A chart of the Court-approved Fees and Expenses is available for free at http://bankrupt.com/misc/ggp_AllowedFinalFees.pdf Judge Gropper separately awarded, on a final basis, UBS Securities LLC fees totaling $18,070,967 and expenses totaling $139,735 for the period from December 16, 2009 to October 21, 2010. Saul Ewing Defends Fee Enhancement "The fact that many contributed to an exemplary and largely consensual Chapter 11 effort and deserved commendation for doing so does not, as the Reorganized Debtors and the U.S. Trustee for Region 2 suggest, preclude one of the participants from seeking a fee enhancement if warranted as Saul Ewing believes it is for the relatively nominal amount it seeks," John J. Jerome, Esq., at Saul Ewing LLP, in New York, argues. Mr. Jerome asserts that it is irrelevant in considering the merits of Saul Ewing's request that no other law firm has sought a fee enhancement and none of the authorities on the subject of fee enhancements suggests otherwise. What is highly relevant is that major creditors and equity holders of GGP during the reorganization process and key Investors in the Company support Saul Ewing's Fee Enhancement request, he contends. Saul Ewing believes that its $975,000 Fee Enhancement request is relatively modest in a case in which in excess of $220 million in fees are sought to be awarded, billions of dollars were paid to creditors and Saul Ewing made a critical contribution to the recovery for equity, as recognized by key equity holders, Mr. Jerome insists. This circumstance is exactly the rare and exceptional result for which fee enhancement awards should be reserved, he maintains. In support of Saul Ewing's fee enhancement and Cantor Fitzgerald's success fee, Marshall Eisenberg, president of General Trust Company; Roy J. Katzovicz, chief legal officer of Pershing Square Capital Management L.P.; Joshua J. Angel, counsel to Fairholme Capital Management, LLC; Steven H. Shepsman, chair of the Official Committee of Equity Security Holders; and Mr. Jerome filed separate declarations. Mr. Eisenberg stated that the Equity Committee's legal professionals, including Saul Ewing and Cantor Fitzgerald encouraged the involvement of Fairholme Capital Management, LLC to commit $2.7 billion as one of the three cornerstore Investors. "This commitment ensured sufficient funds would be available to pay unsecured creditors, in full, under the Cornerstone Investors-sponsored Plan," he pointed out. Mr. Eisenberg related that Cantor helped the Equity Committee in assisting the Company to re-engage with Simon Property Group, Inc., which resulted in an improved Simon proposal from $9 to $15 per share. Saul Ewing and Cantor also advocated for improved governance practices at GGP and The Howard Hughes Corporation and for significant improvements in the separation documents for THHC, he added. Mr. Katzovicz said the Equity Committee supported Pershing Square's initiative to counter the Simon Offer with a $2.5 billion bid from Brookfield Asset Management Inc. and a recapitalization commitment of $1.1 billion from the Pershing Square Funds. He recognized that the Equity Committee and its advisors were instrumental in keeping Simon engaged in bidding and fostered a competitive process, which the Equity Committee and its professionals used to negotiate improvements in equity's favor under the Investment Agreements. Joshua J. Angel, Esq., at Herrick, Feinstein, LLP, counsel to Fairholme, told Judge Gropper that Mr. Jerome of Saul Ewing smoothed the way for the subsequent meetings between Fairholme and Pershing Square. As a consequence of those meetings with Pershing Square, Fairholme decided to invest $2.7 billion in GGP's stand-alone plan, Mr. Angel said. Mr. Shepsman stated that Saul Ewing and Cantor contributed to equity's recovery in significant and quantifiable ways not anticipated and not reflected in the compensation arrangements approved for Saul Ewing and Cantor. The critical participation of the Equity Committee's advisors, including Cantor, in the Bidding Procedures process helped to assure that billions of dollars in equity were preserved for equity's benefit and that a $15 per share floor price was set, subject to further upward market adjustment, instead of what would have been a premature acceptance or a lock-in of a low-ball $9 per share offer by Simon, emphasized. Mr. Jerome stated, "My timely meeting with Fairholme at a critical junction in the emerging competitive process encouraged Fairholme to consider GGP's stand-alone Plan and to meet with Pershing Square, instead of joining with Simon." Upon filing of the Cornerstone Investor sponsored Plan, Saul Ewing and Cantor worked closely with Pershing Square and the Company and their professionals in obtaining a non-staggered board and best governance provisions in the newly-proposed charters and bylaws of New GGP and THHC, which enhanced market value for these entities, he related. Mr. Jerome disclosed that when hiring a financial advisor to the Equity Committee, he asked Cantor to agree to a fee of $2.050 million, hoping that its role in advising the Equity Committee would be relatively limited. However, it was understood that Cantor would apply for a success fee at the end of the Reorganized Debtors' Chapter 11 cases, if justified, he pointed out. The areas in which Cantor provided creative solutions, included, providing advice on the capital raise and structure, improving the corporate governance of GGP and THHC, and working closely with the Equity Committee counsel and GGP to protect the interests of THHC, he stated. Mr. Jerome filed with the Court an amended declaration, which is substantially similar to his original declaration dated May 20, 2011. About General Growth Based in Chicago, Illinois, General Growth Properties, Inc. -- http://www.ggp.com/-- is the second-largest U.S. mall owner, having ownership interest in, or management responsibility for, more than 200 regional shopping malls in 44 states, as well as ownership in master planned community developments and commercial office buildings. The Company's portfolio totals roughly 200 million square feet of retail space and includes more than 24,000 retail stores nationwide. General Growth is a self- administered and self-managed real estate investment trust. The Company's common stock is trading in the pink sheets under the symbol GGWPQ. General Growth Properties Inc. and its affiliates filed for Chapter 11 protection on April 16, 2009 (Bankr. S.D.N.Y., Case No. 09-11977). Marcia L. Goldstein, Esq., Gary T. Holtzer, Esq., Adam P. Strochak, Esq., and Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, serve as bankruptcy counsel. Kirkland & Ellis LLP is co-counsel. Kurtzman Carson Consultants LLC has been engaged as claims agent. The Company also hired AlixPartners LLP as financial advisor and Miller Buckfire Co. LLC, as investment bankers. The Debtors disclosed $29,557,330,000 in assets and $27,293,734,000 in debts as of Dec. 31, 2008. General Growth Properties on Nov. 9, 2010, successfully completed the final steps of its financial restructuring and emerged from Chapter 11. GGP successfully restructured approximately $15 billion of project-level debt Recapitalized with $6.8 billion in new equity capital Paid all creditor claims in full achieved substantial recovery for equity holders. As part of its plan of reorganization, GGP has split itself into two separate and independent publicly traded corporations. GGP shareholders as of the record date of Nov. 1, 2010, received common stock in both companies. The new GGP, which will commence trading Nov. 10 on The New York Stock Exchange under the ticker symbol "GGP," is the second-largest shopping mall owner and operator in the country, with more than 183 regional malls in 43 states. The spin-off company, The Howard Hughes Corporation, consists of GGP's portfolio of master planned communities and other strategic real estate development opportunities. This company will trade under the ticker symbol "HHC" on The New York Stock Exchange. Bankruptcy Creditors' Service, Inc., publishes General Growth Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Growth Properties Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) GEORGIA GULF: S&P Ups Corp. Credit Rating to B+; Outlook Stable --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Georgia Gulf Corp. to 'B+' from 'B'. The outlook is positive. At the same time, Standard & Poor's raised its issue- level rating on the company's existing senior secured debt to 'B+' from 'B'. The recovery rating on the senior secured debt remains '3', indicating the expectation for meaningful (50%-70%) recovery in the event of a payment default. Standard & Poor's raised its ratings on the company's senior subordinated notes to 'B-' from 'CCC+'. The recovery ratings on the notes remain '6', indicating the expectation for negligible (0%-10%) recovery in the event of a payment default. "The upgrade reflects improvement in the company's operating performance and debt measures, as well as our expectation that Georgia Gulf will be able to at least maintain its improved credit metrics in the future," said Standard & Poor's credit analyst Paul Kurias. "The positive outlook reflects our view that the company's credit quality has the potential to improve modestly because of current gradual economic growth." The company lowered its debt partially via a debt restructuring in 2009 that included a debt for equity exchange. More recently, lower interest costs contributed to the improvement in credit metrics. Better operating performance, including increased sales as a result of volume gains and margin improvement, have supported stronger EBITDA. Standard & Poor's expects operating performance to continue to improve, albeit gradually, given its outlook for a gradual recovery in the economy and still-weak housing market, a key source of demand for the company. Still, demand for the company's products remains susceptible to cyclical downturns while operating performance is vulnerable to large supply additions by competitors. In addition, a recent increase in PVC exports, which has offset weakness in domestic demand, depends at least partly on favorable ethylene prices and exchange rates. Georgia Gulf is an integrated producer of PVC building and home improvement products, PVC resin, and aromatic chemicals, with annual revenue of nearly $3 billion as of March 31, 2011. The company also sells caustic soda, a co-product resulting from its backward integration into chlorine, which is used in PVC production. Georgia Gulf is among the top four producers of PVC in the domestic market. GIORDANO'S ENTERPRISES: Trustee Taps Popowcer as Accountants ------------------------------------------------------------ Philip V. Martino, the duly appointed Chapter 11 trustee in the bankruptcy cases of Giordano's Enterprises, Inc., et al., asks the U.S. Bankruptcy Court for the Northern District of Illinois to retain Lois West and the firm of Popowcer Katten, Ltd. as his accountants. West and Popowcer will provide the trustee with general accounting services and tax services necessary to comply with federal, state, and local tax laws and regulations. The trustee relates that the hourly rates for Popowcer's professionals range from $120 to $290. To the best of Trustee's knowledge, West and Popowcer are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. About Giordano's Enterprises Chicago, Illinois-based Giordano's Enterprises, Inc., was founded in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren and Joseph Boglio. In 1988, John and Eva Apostolou purchased control of Giordano's. Although this casual dining eatery offers a broad array of fine Italian cuisine, it is primarily know for its "Chicago's World Famous Stuffed Pizza". At present, Giordano's operates six company owned stores in Chicagoland, four joint venture stores, and thirty-five franchisee locations. In addition, Giordano's operates Americana Foods, Inc., located in Mount Prospect, Illinois, that serves as the commissary for the majority of food products purchased by the Illinois locations. An affiliated real estate holding company, Randolph Partners, LP, owns 12 restaurant buildings that are leased to four of the company-owned locations, two of the joint venture locations and six of the franchisee locations. The other 33 locations are leased from third party landlords; two for the Giordano's locations, two for the joint venture locations and 29 for the franchise locations. Giordano's is the lessee and subleases the restaurant facility for 22 of the 29 franchise third party leases. JBA Equipment Finance, Inc, another affiliated entity, leases restaurant equipment packages to eight franchisee locations. Giordano's Enterprises and 26 affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on Feb. 16, 2011. Six additional affiliates filed for Chapter 11 protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A. Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at Arnstein & Lehr, LLP, in Chicago, serve as the Debtors' bankruptcy counsel. Giordano's Enterprises disclosed $59,387 in assets and $45,538,574 in liabilities as of the Chapter 11 filing. Certain of the Debtors owe Fifth Third Bank not than $13,560,662, pursuant to loans and financial accommodations, and $31,927,998 under a business loan as of the Petition Date. Fifth Third has agreed to provide DIP financing of up to $35,983,563 to the Debtors. Philip V. Martino is the duly appointed Chapter 11 trustee in the Debtors' bankruptcy cases. GIORDANO'S ENTERPRISES: Trustee Taps Quarles & Brady as Counsel --------------------------------------------------------------- Philip V. Martino, the Chapter 11 trustee in the bankruptcy cases of Giordano's Enterprises, Inc., et al., asks the U.S. Bankruptcy Court for the Northern District of Illinois for permission to retain Quarles & Brady LLP as his general bankruptcy counsel. Christopher Combest, and the other attorneys and paraprofessionals associated with Q&B will represent the trustee in all phases of the Debtors' Chapter 11 case. To the best of the trustee's knowledge, Q&B is a "disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code. Q&B can be reached at: Christopher Combest, Esq. QUARLES & BRADY LLP 300 N. LaSalle Street, Suite 4000 Chicago, IL 60654 Tel: (312) 715-5000 Fax: (312) 632-1727 E-mail: christopher.combest@quarles.com About Giordano's Enterprises Chicago, Illinois-based Giordano's Enterprises, Inc., was founded in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren and Joseph Boglio. In 1988, John and Eva Apostolou purchased control of Giordano's. Although this casual dining eatery offers a broad array of fine Italian cuisine, it is primarily know for its "Chicago's World Famous Stuffed Pizza". At present, Giordano's operates six company owned stores in Chicagoland, four joint venture stores, and thirty-five franchisee locations. In addition, Giordano's operates Americana Foods, Inc., located in Mount Prospect, Illinois, that serves as the commissary for the majority of food products purchased by the Illinois locations. An affiliated real estate holding company, Randolph Partners, LP, owns 12 restaurant buildings that are leased to four of the company-owned locations, two of the joint venture locations and six of the franchisee locations. The other 33 locations are leased from third party landlords; two for the Giordano's locations, two for the joint venture locations and 29 for the franchise locations. Giordano's is the lessee and subleases the restaurant facility for 22 of the 29 franchise third party leases. JBA Equipment Finance, Inc, another affiliated entity, leases restaurant equipment packages to eight franchisee locations. Giordano's Enterprises and 26 affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on Feb. 16, 2011. Six additional affiliates filed for Chapter 11 protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A. Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at Arnstein & Lehr, LLP, in Chicago, serve as the Debtors' bankruptcy counsel. Giordano's Enterprises disclosed $59,387 in assets and $45,538,574 in liabilities as of the Chapter 11 filing. Certain of the Debtors owe Fifth Third Bank not than $13,560,662, pursuant to loans and financial accommodations, and $31,927,998 under a business loan as of the Petition Date. Fifth Third has agreed to provide DIP financing of up to $35,983,563 to the Debtors. Philip V. Martino is the duly appointed Chapter 11 trustee in the Debtors' bankruptcy cases. GIORDANO'S ENTERPRISES: Trustee Taps William Blair as Inv. Banker ----------------------------------------------------------------- Philip V. Martino, the duly appointed Chapter 11 trustee in the bankruptcy cases of Giordano's Enterprises, Inc., et al., asks the U.S. Bankruptcy Court for the Northern District of Illinois to retain William Blair & Company, L.L.C. as his investment banker and Hilco Real Estate, LLC, as his real estate advisor. The trustee also asks authorization that certain documents ancillary to that retention to be filed under seal. The Trustee will retain Blair and Hilco to advise in connection with: (a) an M&A Transaction, and (b) a Lease Transaction. a. An M&A Transaction is a transaction involving, among other things: (a) an acquisition, merger, consolidation or other transaction with another party through which any assets of the Company are, directly or indirectly, combined with or transferred to another party outside the ordinary course of business; (b) the acquisition, directly or indirectly, by a buyer or buyers of equity interests or options, or any combination thereof constituting a majority or controlling portion of the stock of the Company or possessing a majority or controlling portion of the voting power of the Company; and (c) any other purchase or acquisition, directly or indirectly, by a buyer or buyers of a majority or controlling portion of the securities or other interests of the Company (through, merger, sale, exchange or otherwise). b. A Lease Transaction is referred to as a transaction, at the Company's direction, regarding a real property lease of the Company providing for a rent reduction, term shortening, or non-economic modifications, or extensions or new leases on owned property. Blair and Hilco will perform these services in connection with a Possible Transaction as the Company may reasonably request: a. familiarize themselves to the extent they deem appropriate with the business, operations, financial condition and prospects of the Company; b. prepare an analysis of strategic alternatives and recommend the strategy intended to achieve the optimal outcome for the Company; and c. report to and participate in discussions with the Company's trustee concerning each possible transaction; As consideration for the services to be provided Blair and Hilco will receive: 1. A monthly fee in the amount of $75,000. 2. Upon the consummation of an M&A Transaction, Blair will be paid a fee: Incremental Aggregate Consideration (in millions) Fee -------------------- ---- $0 up to but not including $25 0.00% of Aggregate Consideration in such range $25 1.50% of Aggregate Consideration More than $25, up to but not including $35 3.00% of Aggregate Consideration in such range $35 up to 3.50% of Aggregate Consideration but not including $45 in such range $45 up to 5.50% of Aggregate Consideration but not including $55 in such range $55 and above 6.00% of Aggregate Consideration in such range 3. Lease Transaction: i. Rent Reductions: 5% of any lease savings achieved with respect to any leases successfully renegotiated; ii. Term Shortening: 1.75% of the gross lease savings secured over any shortened term; iii. Non-Economic Modifications: $1,500 per lease; iv. Other: a fee equal to the greater of (i) $10,000 or (ii) 3% of the projected base rent payable over the term of a lease extension new lease executed on an owned property. 4. Process Break. Upon a voluntary termination of Blair's engagement by the Company in writing, the Company will pay to Blair a fee with respect to any Secured Debt Transaction in an amount less than the fees that would otherwise be payable under the Engagement Agreement, and as to the extent agreed to in writing between Blair and the Company on the date hereof. About Giordano's Enterprises Chicago, Illinois-based Giordano's Enterprises, Inc., was founded in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren and Joseph Boglio. In 1988, John and Eva Apostolou purchased control of Giordano's. Although this casual dining eatery offers a broad array of fine Italian cuisine, it is primarily know for its "Chicago's World Famous Stuffed Pizza". At present, Giordano's operates six company owned stores in Chicagoland, four joint venture stores, and thirty-five franchisee locations. In addition, Giordano's operates Americana Foods, Inc., located in Mount Prospect, Illinois, that serves as the commissary for the majority of food products purchased by the Illinois locations. An affiliated real estate holding company, Randolph Partners, LP, owns 12 restaurant buildings that are leased to four of the company-owned locations, two of the joint venture locations and six of the franchisee locations. The other 33 locations are leased from third party landlords; two for the Giordano's locations, two for the joint venture locations and 29 for the franchise locations. Giordano's is the lessee and subleases the restaurant facility for 22 of the 29 franchise third party leases. JBA Equipment Finance, Inc, another affiliated entity, leases restaurant equipment packages to eight franchisee locations. Giordano's Enterprises and 26 affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on Feb. 16, 2011. Six additional affiliates filed for Chapter 11 protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A. Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at Arnstein & Lehr, LLP, in Chicago, serve as the Debtors' bankruptcy counsel. Giordano's Enterprises disclosed $59,387 in assets and $45,538,574 in liabilities as of the Chapter 11 filing. Certain of the Debtors owe Fifth Third Bank not than $13,560,662, pursuant to loans and financial accommodations, and $31,927,998 under a business loan as of the Petition Date. Fifth Third has agreed to provide DIP financing of up to $35,983,563 to the Debtors. Philip V. Martino is the duly appointed Chapter 11 trustee in the Debtors' bankruptcy cases at the behest of the U.S. Trustee. Mr. Martino filed a $3,000,000 bond. GIORDANO'S ENTERPRISES: Trustee Taps William Dart for Tax Appeals ----------------------------------------------------------------- Philip V. Martino, the duly appointed Chapter 11 trustee in the Chapter 11 cases of Giordano's Enterprises, Inc., et al., asks the U.S. Bankruptcy Court for the Northern District of Illinois for permission to retain the firm of William Dart, LLC, as his special counsel for the purpose of prosecuting two real estate tax appeals. Prepetition, WD was retained by Debtors to prosecute two certain real estate tax appeals in Illinois, which work includes, but is not necessarily limited to, seeking reductions in the assessed value of the properties at issue and pursuing claims for real estate tax refunds, in connection properties owned by Debtors and located at 9411-15 W. Higgins Road in Rosemont Illinois, and at 740 N. Rush Street, in Chicago, Illinois. The trustee proposes to retain William E. Dart (a non-attorney), attorney George Cahill. WD will receive compensation on a contingency basis, with WD'S fee to be a percentage of the amount of tax savings achieved or tax refund obtained for the Debtors. WD agreed to cap its fee with regard to any reduction in the 2010 assessed valuation for the rush property (Parcel No. 17-10-101- 013) obtained from the Assessor or the Board of Review at $15,000. Moreover, to the extent WD obtains tax refunds for the Debtors' estates with regard to the rush property, payment will not be due WD until the amount of any refund has been received by the trustee in immediately available funds. To the best of the trustee's knowledge, WD is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Giordano's Enterprises Chicago, Illinois-based Giordano's Enterprises, Inc., was founded in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren and Joseph Boglio. In 1988, John and Eva Apostolou purchased control of Giordano's. Although this casual dining eatery offers a broad array of fine Italian cuisine, it is primarily know for its "Chicago's World Famous Stuffed Pizza". At present, Giordano's operates six company owned stores in Chicagoland, four joint venture stores, and thirty-five franchisee locations. In addition, Giordano's operates Americana Foods, Inc., located in Mount Prospect, Illinois, that serves as the commissary for the majority of food products purchased by the Illinois locations. An affiliated real estate holding company, Randolph Partners, LP, owns 12 restaurant buildings that are leased to four of the company-owned locations, two of the joint venture locations and six of the franchisee locations. The other 33 locations are leased from third party landlords; two for the Giordano's locations, two for the joint venture locations and 29 for the franchise locations. Giordano's is the lessee and subleases the restaurant facility for 22 of the 29 franchise third party leases. JBA Equipment Finance, Inc, another affiliated entity, leases restaurant equipment packages to eight franchisee locations. Giordano's Enterprises and 26 affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on Feb. 16, 2011. Six additional affiliates filed for Chapter 11 protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A. Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at Arnstein & Lehr, LLP, in Chicago, serve as the Debtors' bankruptcy counsel. Giordano's Enterprises disclosed $59,387 in assets and $45,538,574 in liabilities as of the Chapter 11 filing. Certain of the Debtors owe Fifth Third Bank not than $13,560,662, pursuant to loans and financial accommodations, and $31,927,998 under a business loan as of the Petition Date. Fifth Third has agreed to provide DIP financing of up to $35,983,563 to the Debtors. Philip V. Martino is the duly appointed Chapter 11 trustee in the Debtors' bankruptcy cases. GIORDANO'S ENTERPRISES: Amends DIP Loan Pact Amount to $3.5-Mil. ---------------------------------------------------------------- Philip V. Martino, the duly appointed and serving Chapter 11 trustee for the estates of Giordano's Enterprises, Inc., and its debtor affiliates, asks the U.s. Bankruptcy Court for the Northern District of Illinois, Eastern Division, to approve further amendments to the DIP Loan Agreement with Fifth Third Bank. Among other things, the DIP Loan Agreement is amended to increase the maximum amount of the loans to be made by Fifth Third Bank from $2,500,000 to "$3,500,000, plus, in DIP Lender's discretion, such other amounts to the extent necessary to repay interest, fees, costs and other charges payable to DIP Lender hereunder and to enable Borrowers to pay the 'Carveout' required and defined under the Final Financing Order." According to Christopher Combest, Esq., at Quarles & Brady LLP, in Chicago, Illinois, says the increase in the amount of the DIP Revolver Commitment is necessary in order for the Trustee to pay administrative expenses on an ongoing basis and, thus, to preserve the going concern value of the Debtors' estates. Under the DIP Loan Agreement, the Borrowers are required to cause the performance and delivery of certain items relating to the retention of an investment banker and a process for the sale of assets, on or before specified dates. The Trustee and Fifth Third Bank decided to extend the deadlines for the Sale Covenants: May 31, 2011 -- Borrowers will obtain one or more Bankruptcy Court orders approving the retention of a nationally recognized investment banker June 10, 2011 -- Investment Banker will distribute a memorandum to notify and generate interest among potential purchasers with respect to a sale of all or substantially all of the Debtors' assets and businesses as going concerns June 14, 2011 -- Investment Banker will establish a substantially complete data room June 24, 2011 -- Investment Banker will distribute an offering memorandum regarding Borrowers' assets and businesses to potential purchasers July 12, 2011 -- Borrowers will have delivered to DIP Lender one or more letters of intent or other written indications of interest from prospective purchasers regarding the Sale July 26, 2011 -- Borrowers will have delivered to DIP Lender a form of asset purchase agreement to be proposed by Borrowers to potential purchasers to govern the Sale Aug. 5, 2011 -- Borrowers will file one or more sale motions or a joint plan of reorganization with the Bankruptcy Court seeking approval of the Sale and seeking approval of bidding procedures acceptable to DIP Lender Aug. 22, 2011 -- Borrowers will obtain one or more Bankruptcy Court orders approving the procedures for the Sale Sept.7, 2011 -- Borrowers will conduct one or more auctions for the sale of all or substantially all of the Borrowers' assets Sept. 14, 2011 -- Borrowers will obtain one or more orders of the Bankruptcy Court approving the sale of all or substantially all of the Borrowers' assets Sept. 23, 2011 -- Borrowers will consummate one or more sales of substantially all of the Borrowers' assets In line with the amendments to the DIP Loan Agreement, Trustee also asks the Court to amend the Final Cash Collateral and DIP Financing Order to reflect the increase in the amount of the DIP Revolver Commitment, the change in the dates of the Sale Covenants, and the other changes. Fifth Third Bank has also agreed to an amendment to the Final Cash Collateral/DIP Financing Order to provide a Carveout for (a) the Trustee, (b) Quarles & Brady LLP, as counsel to the Trustee, and (c) Blair and Hilco as Carveout Professionals. About Giordano's Enterprises Chicago, Illinois-based Giordano's Enterprises, Inc., was founded in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren and Joseph Boglio. In 1988, John and Eva Apostolou purchased control of Giordano's. Although this casual dining eatery offers a broad array of fine Italian cuisine, it is primarily know for its "Chicago's World Famous Stuffed Pizza". At present, Giordano's operates six company owned stores in Chicagoland, four joint venture stores, and thirty-five franchisee locations. In addition, Giordano's operates Americana Foods, Inc., located in Mount Prospect, Illinois, that serves as the commissary for the majority of food products purchased by the Illinois locations. An affiliated real estate holding company, Randolph Partners, LP, owns 12 restaurant buildings that are leased to four of the company-owned locations, two of the joint venture locations and six of the franchisee locations. The other 33 locations are leased from third party landlords; two for the Giordano's locations, two for the joint venture locations and 29 for the franchise locations. Giordano's is the lessee and subleases the restaurant facility for 22 of the 29 franchise third party leases. JBA Equipment Finance, Inc, another affiliated entity, leases restaurant equipment packages to eight franchisee locations. Giordano's Enterprises and 26 affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on Feb. 16, 2011. Six additional affiliates filed for Chapter 11 protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A. Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at Arnstein & Lehr, LLP, in Chicago, serve as the Debtors' bankruptcy counsel. Giordano's Enterprises estimated assets and debts of $0 to $50,000 in its Chapter 11 petition. Certain of the Debtors owe Fifth Third Bank not than $13,560,662, pursuant to loans and financial accommodations, and $31,927,998 under a business loan as of the Petition Date. Fifth Third has agreed to provide DIP financing of up to $35,983,563 to the Debtors. GRAMERCY PARK: StabFund Given Go Signal to Foreclose NY Property ---------------------------------------------------------------- Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York, at the request of StabFund (USA), Inc., lifted the automatic stay to allow StabFund to take all steps necessary in connection with the foreclosure action it filed against Gramercy Park Land LLC. Judge Peck also lifted the automatic stay to allow StabFund to pursue the judgment of foreclosure and sale respecting Gramercy Park's property, including, without limitation, completing its pending foreclosure sale of the property and any subsequent proceedings to evict or remove the Debtor from the property and liquidation of any deficiency claim remaining after completion of the foreclosure action. About Gramercy Park New York-based Gramercy Park Land, LLC, filed for Chapter 11 bankruptcy protection on March 29, 2011 (Bankr. S.D.N.Y. Case No. 11-11385). Avrum J. Rosen, Esq., at The Law Offices of Avrum J. Rosen, PLLC, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates LT 266 Third Avenue, LLC (Bankr. S.D.N.Y. Case No. 11- 11386) and NK 266 Third Avenue, LLC (Bankr. S.D.N.Y. Case No. 11- 11387) simultaneously filed separate Chapter 11 petitions on March 29, 2011. GREAT ATLANTIC: Forges New Deal With C&S Wholesale Grocers, Inc. ---------------------------------------------------------------- The Great Atlantic & Pacific Tea Company, Inc. will enter into a new supply and logistics agreement with its principal wholesale supplier, C&S Wholesale Grocers, Inc., pending approval of the U.S. Bankruptcy Court for the Southern District of New York. The Company estimates the revised contract will generate a run- rate of more than $50 million in annual savings, which will be realized in cash beginning upon the Company's emergence from Chapter 11 pursuant to a plan of reorganization. The new agreement will also help the Company generate cash savings in the near-term by significantly and immediately improving supply chain and operational efficiency, as well as provide the Company with key service enhancements. "The approval of this new supply and logistics contract with C&S will mark a key milestone for A&P as we move forward with our restructuring," said A&P President and Chief Executive Officer Sam Martin. "The agreement will strengthen our existing relationship with C&S, as we work together to drive service delivery and reliability enhancements and substantial efficiencies across our operations. The anticipated annual savings will significantly reduce A&P's cost structure upon emergence from Chapter 11, while ensuring consistent product availability in our stores and greater diversity of products for our customers." As part of the agreement, A&P will partner more closely with C&S to take advantage of its access to competitive rates from key manufacturers and producers, creating greater economies of scale and enhanced supplier relationships that position the Company to further distinguish its product offerings in key categories. The Company anticipates that the Bankruptcy Court will consider its motion on the new C&S contract at a hearing later this month. About Great Atlantic & Pacific Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific is a leading supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid- Atlantic and Northeastern United States. It operates 395 supermarkets, combination food and drug stores, beer, wine, and liquor stores, and limited assortment food stores in Connecticut, Delaware, Massachusetts, Maryland, New Jersey, New York, Pennsylvania, Virginia, and the District of Columbia. "Banners" include A&P (101 stores), Food Basics (12 stores), Pathmark (128 stores), Super Fresh (57 stores), The Food Emporium (16 stores), and Waldbaum's (59 stores). A&P employs roughly 41,000 employees, including roughly 28,000 part-time employees. Roughly 95% of the workforce are covered by collective bargaining agreements. A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Case No. 10-24549) on Dec. 12, 2010 in White Plains, New York. In its petition, A&P reported total assets of $2.5 billion and liabilities of $3.2 billion as of Sept. 11, 2010. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. Lazard Freres & Co. LLC is the financial advisor. Huron Consulting Group is the management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent the Official Committee of Unsecured Creditors. HARRY & DAVID: Disclosure Statement Hearing Set for June 24 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware scheduled the hearing regarding the disclosure statement explaining the Joint Plan of Reorganization of Harry & David Holdings, Inc., and its debtor affiliates for June 24, 2011 at 2:00 p.m. According to a May 24, 2011 report by The Troubled Company Reporter, the Plan has the support of the Official Committee of Unsecured Creditors and the holders of approximately 81% of the Company's public notes. With this filing, the Company intends to exit bankruptcy in late Summer 2011. Kay Hong, Chief Restructuring Officer and interim Chief Executive Officer, said, "The filing of our Plan of Reorganization and Disclosure Statement is a vital step toward Harry and David's successful emergence from the Chapter 11 reorganization process. Our employees, customers, suppliers and other supporters have been instrumental in our ability to reach this important milestone, and we deeply appreciate their support." The Company expects to emerge from its financial restructuring with a significantly improved balance sheet and with substantially less debt. The proposed Plan will allow the Company to convert all of its approximately $200 million of outstanding public notes into equity of the reorganized company. The Plan also includes an equity capital raise that will generate $55 million in equity financing upon the Company's emergence from chapter 11. A group of the Company's existing noteholders have agreed to backstop the equity capital raise. The Company will utilize proceeds from the equity capital raise to satisfy obligations arising from its $55 million post-petition term loan. Additionally, the Company has a $100 million revolving loan commitment to finance its operations after the Company exits chapter 11 which will replace its current $100 million post-petition revolving loan facility. As part of this process, the Company anticipates holding a hearing on the adequacy of the Disclosure Statement in June 2011. After receiving approval of its Disclosure Statement, the Company expects to solicit approval of the Plan by the necessary classes of creditors and hold a confirmation hearing on the Plan. Harry & David's investment banker is Rothschild Inc., its legal advisor is Jones Day, and its financial advisor is Alvarez & Marsal. The Company's bondholders are being advised by Stroock & Stroock & Lavan LLP, as legal counsel, and Moelis & Company as financial advisor. About Harry & David Medford, Oregon-based Harry & David Holdings, Inc. -- aka Bear Creek Corporation; Bear Creek Direct Marketing, Inc.; Bear Creek Stores, Inc.; Bear Creek Operations, Inc.; and Bear Creek Orchards, Inc. -- is a multi-channel specialty retailer and producer of branded premium gift-quality fruit and gourmet food products and gifts marketed under the Harry & David(R), Wolferman's(R) and Cushman's(R) brands. It has 70 stores across the country. Harry & David Holdings filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-10884) on March 28, 2011. Affiliates Harry and David (Bankr. D. Del. Case No. 11-10885), Harry & David Operations, Inc. (Bankr. D. Del. Case No. 11-10886), and Bear Creek Orchards, Inc. (Bankr. D. Del. Case No. 11-10887) filed separate Chapter 11 petitions. The cases are jointly administered, with Harry David Holdings as lead case. Daniel J. DeFranceschi, Esq.; Paul Noble Heath, Esq.; and Zachary Shapiro, Esq., at Richards Layton & Finger, serve as the Debtors' local counsel. David G. Heiman, Esq.; Brad B. Erens, Esq.; and Timothy W. Hoffman, Esq., at Jones Day, are the Debtors' legal counsel. Rothschild Inc. is the Debtors' investment banker. Alvarez & Marsal LLC is the Debtors' financial advisor. Garden City Group Inc. is the Debtors' claims and notice agent. McKinsey Recovery & Transformation Services U.S. LLC is being tapped as management consultants. The Debtor also tapped DJM Realty Services, LLC, as real estate consultants; Alvarez & Marsal North America to provide the Debtors an interim chief executive officer and chief restructuring officer and certain additional officers; and McKinsey Recovery & Transformation Services U.S. LLC as their management consultant. Kristopher M. Hansen, Esq., and Erez E. Gilad, Esq., at Stroock & Stroock & Lavan LLP; Thomas B. Walper, Esq., at Munger, Tolles & Olson LLP; and Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP are counsel to principal noteholders. Moelis & Company is the financial advisor to the principal noteholders. Lowenstein Sandler has been retained as counsel to the unsecured creditors committee in the Harry & David bankruptcy case. The Debtors disclosed $304.3 million in total assets and $360.8 million in total debts as of Dec. 25, 2010. The Debtors' proposed Plan of Reorganization will allow the Company to convert all of its approximately $200 million of outstanding public notes into equity of the reorganized company. The Plan also includes an equity capital raise that will generate $55 million in equity financing upon the Company's emergence from chapter 11. The Plan has the support of the Official Committee of Unsecured Creditors and the holders of approximately 81% of the Company's public notes. HARRY & DAVID: Noteholders to Backstop Company's Rights Offering ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved the backstop agreement entered into as of March 27, 2011, among Harry & David Holdings, Inc., Harry and David, an Oregon corporation, and a group of investment firms composed of: * CC Arbitrage, Ltd. * CC ARB SIF I, Ltd. * 2B LLC * Investin Pro FMBA Dalton Distressed Credit * Dalton Distressed Credit * Ellen T. Horing * Citigroup Pension * Joel D. Tauber * Steinberg Joseph S. and Diane H., Trustees * Oppenheimer Distressed Opportunities, LP * LC Capital Master Fund, ltd. * Litespeed Master Fund Ltd. * Lloyd I. Miller Trust A-4 * Newport Global Credit Fund (Master) LP * Normandy Hill Capital L.P. * Northeast Investors Trust * Prospect Mountain Fund Ltd. * Ore Hill Hub Fund Ltd. * Passport Agriculture Master Fund SPC Ltd. * Scoggin Capital Management II, LLC * Scoggin Worldwide Fund, Ltd. * Scoggin International Fund, Ltd. * Singer Children's Management Trust * UBS Securities, LLC * Wassertein Partners, LP The Debtors intend to restructure in accordance with the terms of the Backstop Agreement. Under the Agreement, each eligible holder of an allowed general unsecured claim against the Debtors and each eligible holder of the Senior Floating Rate Notes due 2012 and the 9.0% Senior Notes due 2013 that is an accredited investor or qualified institutional buyer will be issued non-transferable subscription rights to purchase, on a pro rata basis, up to $55 million in new common stock. In order to facilitate the rights offering, each of the Backstop Providers, severally, has agreed to purchase on the Effective Date, at the $75.00 per share Exercise Price, the rights offering shares that have not been subscribed for by the rights offering participants in an amount equal to that backstop provider's backstop commitment amount. If a competing transaction occurs prior to the closing of the backstop commitment, the Debtors will pay to the non-defaulting backstop providers a cash fee in the aggregate amount of $1,100,000. A full-text copy of the Order, dated May 10, 2011, together with the Backstop Agreement and the Plan Term Sheet, is available for free at http://ResearchArchives.com/t/s?7623 About Harry & David Medford, Oregon-based Harry & David Holdings, Inc. -- aka Bear Creek Corporation; Bear Creek Direct Marketing, Inc.; Bear Creek Stores, Inc.; Bear Creek Operations, Inc.; and Bear Creek Orchards, Inc. -- is a multi-channel specialty retailer and producer of branded premium gift-quality fruit and gourmet food products and gifts marketed under the Harry & David(R), Wolferman's(R) and Cushman's(R) brands. It has 70 stores across the country. Harry & David Holdings filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-10884) on March 28, 2011. Affiliates Harry and David (Bankr. D. Del. Case No. 11-10885), Harry & David Operations, Inc. (Bankr. D. Del. Case No. 11-10886), and Bear Creek Orchards, Inc. (Bankr. D. Del. Case No. 11-10887) filed separate Chapter 11 petitions. The cases are jointly administered, with Harry David Holdings as lead case. Daniel J. DeFranceschi, Esq.; Paul Noble Heath, Esq.; and Zachary Shapiro, Esq., at Richards Layton & Finger, serve as the Debtors' local counsel. David G. Heiman, Esq.; Brad B. Erens, Esq.; and Timothy W. Hoffman, Esq., at Jones Day, are the Debtors' legal counsel. Rothschild Inc. is the Debtors' investment banker. Alvarez & Marsal LLC is the Debtors' financial advisor. Garden City Group Inc. is the Debtors' claims and notice agent. McKinsey Recovery & Transformation Services U.S. LLC is being tapped as management consultants. The Debtor also tapped DJM Realty Services, LLC, as real estate consultants; Alvarez & Marsal North America to provide the Debtors an interim chief executive officer and chief restructuring officer and certain additional officers; and McKinsey Recovery & Transformation Services U.S. LLC as their management consultant. Kristopher M. Hansen, Esq., and Erez E. Gilad, Esq., at Stroock & Stroock & Lavan LLP; Thomas B. Walper, Esq., at Munger, Tolles & Olson LLP; and Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP are counsel to principal noteholders. Moelis & Company is the financial advisor to the principal noteholders. Lowenstein Sandler has been retained as counsel to the unsecured creditors committee in the Harry & David bankruptcy case. The Debtors disclosed $304.3 million in total assets and $360.8 million in total debts as of Dec. 25, 2010. The Debtors' proposed Plan of Reorganization will allow the Company to convert all of its approximately $200 million of outstanding public notes into equity of the reorganized company. The Plan also includes an equity capital raise that will generate $55 million in equity financing upon the Company's emergence from chapter 11. The Plan has the support of the Official Committee of Unsecured Creditors and the holders of approximately 81% of the Company's public notes. HARRY & DAVID: Can Use Cash Collateral & Access $100-Mil. Loans --------------------------------------------------------------- Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware authorized, on a final basis, Harry & David Holdings, Inc., and its debtor affiliates to obtain postpetition financings. Judge Walrath also authorized, on a final basis, the Debtors to use cash collateral securing their prepetition indebtedness. Harry and David, an Oregon corporation, is authorized to obtain secured postpetition financing in the form of a senior secured, super-priority revolving asset-based credit facility with commitments in an aggregate principal amount of up to $100 million pursuant to a credit agreement, dated March 29, 2011, by and among the Borrower, Harry & David Holdings, Inc., Bear Creek Orchards, Inc., and Harry & David Operations, Inc., as guarantors, the lenders, UBS Securities LLC, as lead arranger, UBS Loan Finance LLC, as a lender and as a swingline lender, UBS AG, Stamford Branch, as issuing bank, administrative collateral agent and administrative agent for the lenders, and Ally Commercial Finance LLC, as collateral agent for the lenders, as documentation agent and as a lender. Harry and David is also authorized to obtain secured postpetition financing, consisting of a super-priority junior DIP notes facility in an aggregate amount not to exceed $55 million pursuant to a note purchase agreement, dated March 29, 2011, by and among the Debtors, Wilmington Trust FSB, as administrative agent, and several DIP Note Purchasers. The Debtors will make non-refundable payments of the principal, interest, fees, expenses and other amounts payable under each of the DIP Documents to the DIP Agents, Lenders, and DIP Note Purchasers. The Debtors will grant security interests, liens and super- priority claims on all of the DIP Collateral to secured the Debtors' DIP obligations. These security interests, liens and super-priority claims are subject to a carve-out. Carve-Out means (1) all unpaid fees required to be paid to the Clerk of the Court and to the Office of the U.S. Trustee; (2) all reasonable and documented unpaid fees, costs, disbursements and expenses, including success, financing, completion or similar fees; and (3) all professional fees allowed by the Court in an aggregate amount not to exceed $1,750,000. A full-text copy of the Final DIP Order is available for free at: http://ResearchArchives.com/t/s?7624 About Harry & David Medford, Oregon-based Harry & David Holdings, Inc. -- aka Bear Creek Corporation; Bear Creek Direct Marketing, Inc.; Bear Creek Stores, Inc.; Bear Creek Operations, Inc.; and Bear Creek Orchards, Inc. -- is a multi-channel specialty retailer and producer of branded premium gift-quality fruit and gourmet food products and gifts marketed under the Harry & David(R), Wolferman's(R) and Cushman's(R) brands. It has 70 stores across the country. Harry & David Holdings filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-10884) on March 28, 2011. Affiliates Harry and David (Bankr. D. Del. Case No. 11-10885), Harry & David Operations, Inc. (Bankr. D. Del. Case No. 11-10886), and Bear Creek Orchards, Inc. (Bankr. D. Del. Case No. 11-10887) filed separate Chapter 11 petitions. The cases are jointly administered, with Harry David Holdings as lead case. Daniel J. DeFranceschi, Esq.; Paul Noble Heath, Esq.; and Zachary Shapiro, Esq., at Richards Layton & Finger, serve as the Debtors' local counsel. David G. Heiman, Esq.; Brad B. Erens, Esq.; and Timothy W. Hoffman, Esq., at Jones Day, are the Debtors' legal counsel. Rothschild Inc. is the Debtors' investment banker. Alvarez & Marsal LLC is the Debtors' financial advisor. Garden City Group Inc. is the Debtors' claims and notice agent. McKinsey Recovery & Transformation Services U.S. LLC is being tapped as management consultants. The Debtor also tapped DJM Realty Services, LLC, as real estate consultants; Alvarez & Marsal North America to provide the Debtors an interim chief executive officer and chief restructuring officer and certain additional officers; and McKinsey Recovery & Transformation Services U.S. LLC as their management consultant. Kristopher M. Hansen, Esq., and Erez E. Gilad, Esq., at Stroock & Stroock & Lavan LLP; Thomas B. Walper, Esq., at Munger, Tolles & Olson LLP; and Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP are counsel to principal noteholders. Moelis & Company is the financial advisor to the principal noteholders. Lowenstein Sandler has been retained as counsel to the unsecured creditors committee in the Harry & David bankruptcy case. The Debtors disclosed $304.3 million in total assets and $360.8 million in total debts as of Dec. 25, 2010. The Debtors' proposed Plan of Reorganization will allow the Company to convert all of its approximately $200 million of outstanding public notes into equity of the reorganized company. The Plan also includes an equity capital raise that will generate $55 million in equity financing upon the Company's emergence from chapter 11. The Plan has the support of the Official Committee of Unsecured Creditors and the holders of approximately 81% of the Company's public notes. HARTSTRINGS L.L.C.: Files for Chapter 7 Bankruptcy Protection ------------------------------------------------------------- Maria Panaritis at Philly.com reports that Children's clothing retailer Hartstrings L.L.C. has declared Chapter 7 bankruptcy in the U.S. Bankruptcy Court in Wilmington and plans to dissolve the business. The Company owes secured and unsecured creditors more than $39 million. All but a few hundred thousand dollars of that is owed to American Capital. According to the report, the filing comes less than two months after the terminations of both president and chief executive officer Kevin Mahoney and chief financial officer Jean Lewis, Bankruptcy Court records show. Mr. Mahoney has since taken a job as president of Not Your Daughter's Jeans in Vernon, California. All of the company's outstanding secured debts with American Capital originated in 2005 and 2006, says Philly.com. Philly.com says the filings with securities regulators showed American Capital had lent millions to Hartstrings: In March, $7.6 million in senior debt was set to mature; in May, $7 million more, according to a recent quarterly financial filing by American Capital. Between April 18 and its bankruptcy declaration, Hartstrings made $7.3 million in payments to American Capital. Meanwhile, its top two executives received more than a million dollars combined: CEO Mahoney received about $726,000 in compensation, a sale bonus, and auto and rent payments between April 11 and May 24; CFO Lewis collected $453,317 in compensation, a sale bonus, and a fee for future services, according to court records, notes Mr. Panaritis. Also on April 18, nearly $6.2 million worth of assets were transferred to New York-based Parigi Enterprises, L.L.C., a clothing manufacturer. It was not listed in the bankruptcy filing as a creditor. Based in the Philadelphia, Hartstrings L.L.C. is owned by the Maryland private-equity firm American Capital L.P. HEARUSA INC: Secures Approval of Loan From William Demant --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that HearUSA Inc. received final approval last week for $10 million in financing from the prospective buyer, William Demant Holdings A/S. The loan is secured by a lien junior to existing bank credits. William Demant, based in Denmark, has an agreement to buy the business for $80 million. The financing requires the bankruptcy court approve procedures not later than today providing for the auction and sale of the business. About HearUSA, Inc. HearUSA, Inc., which sells hearing aids in 10 states, filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 11-23341) on May 16, 2011, to sell the business for $80 million to William Demant Holdings A/S. The Debtor said that assets are $65.6 million against debt of $64.7 million as of March 31, 2010. Judge Erik P. Kimball presides over the case. Brian K. Gart, Esq., Paul Steven Singerman, Esq., and Debi Evans Galler, Esq., at Berger Singerman, P.A., represent the Debtor. The Debtor selected Bryan Cave LLP as special counsel; Sonenshine Partners LLC, investment banker; Development Specialist Inc., restructuring advisor; and AlixPartners LLC, as communications consultant. Trustee Services, Inc., serves as claims and notice agent. HIGHVIEW POINT: Chapter 11 Case Dismissed on Consent ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the reorganization of Highview Point Partners LLC was dismissed last week at the Company's own request. According to the report, Highview is under investigation by the Securities and Exchange Commission with regard to involvement in a suspected Ponzi scheme involving Kenwood Capital Management LLC. The receiver for Kenwood had a motion on file for dismissal. He contended the Chapter 11 filing was a bad faith attempt to preclude him from taking over Highview. Highview filed a Chapter 11 petition just before the SEC was to appear in U.S. District Court seeking to have the Kenwood receiver take over Highview as well. The receiver called Highview a non- operating investment adviser that directed "fraudulent and illegal transfers" between Highview funds and Kenwood funds. He said principals of Highview have been under investigation by the SEC and the U.S. Attorney in Connecticut. Highview Point Partners LLC, a Connecticut investment management firm focused on emerging markets, filed a Chapter 11 petition (Bankr. D. Del. Case No. 11-11432) on May 6, 2011. Highview Point, based in Stamford, estimated as much as $500,000 in assets. Highview Point Offshore Ltd. and Highview Point Master Fund Ltd., both based in the Cayman Islands, and Highview Point LP in Stamford, are atop the list of 20 largest unsecured creditors. David B. Stratton, Esq. and Evelyn J. Meltzer, Esq., at Pepper Hamilton LLP, in Wilmington, Delaware, serve as bankruptcy counsel to the Debtor. Attorneys at Morrison & Foerster, LLP, serve as co-counsel. HOLLIFIELD RANCHES: Has Permission to Ink $1.4-Mil. Secured Loan ---------------------------------------------------------------- Hollifield Ranches, Inc., sought and obtained authority from Judge Jim D. Pappas of the U.S. Bankruptcy Court for the District of Idaho to enter into a secured loan with either the J.R. Simplot Company or Valley Agronomics, LLC, in an amount not to exceed $1,400,000. The secured loan is for the purpose of obtaining fertilizer and chemicals and to spray crops at an interest rate of 4.5%, with the amount due and payable upon demand, but not later than March 1, 2012. Either JRS or VA will have a first and paramount lien against debtor's crops, including products and proceeds thereof, in compliance with Idaho Code Section 28-9-502. KeyBank National Association will be subordinate to either JRS or VA's lien, as to crops and crop proceeds, to the extent that either JRS or VA provides value to debtor. The debtor is limited on its expenditures for fertilizer and chemicals through the end of the 2011 crop year so that expenditures are not made in preparation for the 2012 crop year without first obtaining an order from the Court allowing for the incurring of said secured debt. Because of the increase in costs for fertilizer and chemicals, the amount available in the cash collateral budget for fertilizer, chemicals, spraying and spreading may be increased up to no more than $1,400,000. Holders of the first mortgages and all other creditors are refrained from disturbing the debtor or the secured party in the planting, tilling, harvesting and marketing of the crop. About Hollifield Ranches, Inc. Hansen, Idaho-based Hollifield Ranches, Inc., filed for Chapter 11 bankruptcy protection on September 9, 2010 (Bankr. D. Idaho Case No. 10-41613). Brent T. Robinson, Esq., in Rupert, Idaho, represents the Debtor. The Debtor estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. Robert D. Miller, Jr. ,the United States Trustee for Region 18, has appointed three creditors to serve as members of the Unsecured Creditors' Committee in the Chapter 11 case of Hollifield Ranches, Inc. J. Justin May, Esq., at May, Browning & May represents the Official Committee of Unsecured Creditors. HOLLYWOOD CASTING: Files for Chapter 7 Bankruptcy Protection ------------------------------------------------------------ Daily News Los Angeles reports that Hollywood Casting Inc., at 4827 Ledge Ave., in North Hollywood, California, filed for Chapter 7 in San Fernando Valley (Bankr. C.D. Calif. Case No. 11-15997). HOWREY LLP: Moves to Convert Ch. 7 Involuntary to Voluntary Ch. 11 ------------------------------------------------------------------ Howrey LLP has filed a motion to convert the involuntary bankruptcy petition that was filed by three of the firm's small creditors from a Chapter 7 involuntary proceeding into a Chapter 11 voluntary proceeding. This will not affect Howrey's motion to change the venue of the proceedings from San Francisco to the District of Columbia. The Bankruptcy Court in San Francisco is scheduled to hear the venue motion on June 29, 2011. Howrey has concluded that Chapter 11 will give better order to the wind-down process and provide the clearest and quickest path to satisfying all of the firm's creditors. Howrey has retained the Washington, DC-based law firm Wiley Rein LLP as its lead counsel and Richmond, VA-based Protiviti Inc. as its financial advisor in the Chapter 11 case. Founded in 1983, Wiley Rein LLP counsels leaders in numerous industries nationwide and around the world. Recognized for excellence, integrity and efficiency, we have over 275 attorneys practicing in more than two dozen specialties of law. HUBBARD PROPERTIES: Court Sets July 21 Confirmation Hearing Date ---------------------------------------------------------------- On May 11, 2011, the U.S. Bankruptcy Court for the Middle District of Florida entered an amended order conditionally approving the disclosure statement explaining the plan of reorganization of Hubbard Properties, LLC, dated as of April 27, 2011. Any written objections to the Disclosure Statement will be filed with the Bankruptcy Court no later than seven (7) days prior to the date of the hearing on confirmation, currently scheduled for July 21, 2011, at 1:30 p.m. If no objections are filed within the time fixed, the conditional approval of the Disclosure Statement will become final. Any objections or requests to modify the Disclosure Statement will be considered at the Confirmation Hearing. Parties in interest will file with the Bankruptcy Court their written ballots accepting or rejecting the Plan no later than eight (8) days before the date of the Confirmation Hearing. Plan Terms Pursuant to the Plan terms, the amount of the Allowed IWA Secured Claim will be (a) as stipulated between the Debtor and IWA or (b) as determined by the Bankruptcy Court, pursuant to Section 506(a) of the Bankruptcy Code. The Debtor estimates the value of the IWA Secured Claim at $12 million based on the value of the collateral. In full satisfaction of the IWA Secured Claim, the Holder thereof will receive the IWA Note on the Effective Date from the Reorganized Debtor. The IWA Note will provide for deferred Cash payments (i) of (a) interest only determined at the IWA Interest Rate for the first 24 months following the Effective Date and (b) monthly payments of principal and interest therefor based on a 25- year amortization with a balloon payment of all unpaid principal and interest due 120 months from the Effective Date or (ii) as determined by the Bankruptcy Court to total at least the amount of the Allowed Secured Claim and have a value, as of the Effective Date, of at least the value of the Allowed IWA Secured Claim. Subject to IWA making an election pursuant to Section 111(b) of the Bankruptcy Code, under which IWA elects to have its claim treated as fully secured up to the full amount of its claim, then the terms of the IWA Note will provide for monthly Cash payments over the 360 months following the Effective Date that will equal in sum the total amount of the Allowed IWA Claim and having a value, as of the Effective Date that is equal to the IWA Collateral on the Effective Date as determined by the Bankruptcy Court or pursuant to agreement between the Debtor and IWA. General unsecured creditors who elect to receive an accelerated payment of their claim will receive the lesser of (a) 40% of the amount of the Claim or (b) $200,000, payable in four (4) equal installments, payable first on the Effective Date and again on 6th, 12th, and 18th month after the Effective Date. Any unsecured creditor that does not make the foregoing election and any Allowed Deficiency Claim of IWA will be paid an annual payment equal to said creditors' pro rata share of 25% of the Debtor's Excess Cash Flow (as defined in the Plan) for 2011 and 50% of the Debtor's Excess Cash Flow for years 2012-2021. All existing Equity Interests in the Debtor will be retained by or reissued to the Members or affiliated Entities on account of the Exit Funding. Equity Interests are Unimpaired and are deemed to have accepted the Plan. Pursuant to the Plan terms, the Debtor's continuing operations and payments to be made under the Plan will be funded by (1) Cash on hand on the Effective Date, (2) the Exit Funding, (3) payments to be made under collections from the BP Claim, or (4) Cash generated and/or collected by the Reorganized Debtor in the ordinary course of business on and after the Effective Date. The amount of the Exit Funding is anticipated to be $300,000. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/hubbardproperties.DS.pdf About Hubbard Properties Hubbard Properties owns and operates a retail and a retail and entertainment complex located in Madeira Beach, Florida, commonly known as the John's Pass Boardwalk. The Property consists of approximately 39,862 square feet of retail space located in five buildings and a 322-car parking garage. Portions of the Property are currently leased to 11 tenants. Investors Warranty of America claims that the principal amount owed to it in connection with the redevelopment of the Property is approximately $28.4 million secured by mortgages and security interests in the Property. The principal balance owed under the latest loan documents and Second Amended and Restated Renewal Secured Promissory Note dated May 1, 2008, is $22.6 million. IWA claims additional amounts are owed for accrued interest, late charges, fees, pre-payment penalties, and other costs or advances which the Debtor disputes. Hubbard Properties, LLC, filed for Chapter 11 protection (Bankr. M.D. Fla. Case No. 11-01274) in Tampa on Jan. 27, 2011. David S. Jennis, Esq., Kathleen I. DiSanto, Esq., and J. A. McPheeters, Esq., at Jennis & Bowen, P.L., in Tampa, Fla., serve as bankruptcy counsel. In its schedules, the Debtor disclosed $12,572,058 in assets and $23,829,629 in liabilities as of the petition date. Te Official Committee of General Unsecured Creditors of Hubbard Properties, LLC, selected Hill, Ward & Henderson, P.A., as its legal counsel. HUSKY INT'L: Moody's Assigns 'B2' Corporate Family Rating --------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Husky International Ltd., consisting of a B2 corporate family rating, B2 probability of default rating, Ba3 senior secured ratings to its new $110 million revolver (undrawn at closing) and $920 million term loan 'B', and a Caa1 rating to its new $ 570 million senior unsecured notes. The ratings outlook is stable. The ratings are being assigned subject to review of final documentation. Proceeds from the debt issues, together with $690 million of equity contribution, primarily from its financial sponsors, Berkshire Partners and OMERS Private Equity, will be used to fund the acquisition of Husky from Onex Corporation and its affiliated funds, with an expected close in June 2011. RATINGS RATIONALE "Husky's B2 corporate family rating reflects its leading global market position in a very narrow product range, with good geographic and customer diversity, but with high leverage and modest free cash flow to reduce debt", said Darren Kirk, vice president and senior analyst with Moody's. Demand for the company's PET plastic beverage container preform molding equipment is fairly cyclical, driven by the capital expenditure trends of its customer base, which ultimately include the world's largest beverage brands. However, this equipment sales cyclicality is tempered by a steadily increasing stream of high margin tooling and aftermarket service revenues, the ongoing trend towards PET as a packaging substrate and Husky's significant exposure to developing markets, where the majority of the industry growth is occurring. The strength of the company's market position, evidenced by its strong mid-teen operating margin, is defensible in Moody's opinion given Husky's continuing technological leadership. "After expanding significantly in recent years, Husky's margin is strong for a manufacturer in Moody's view, which provides key support to its rating", said Kirk. Low single digit top line growth should enable Husky's EBITDA to steadily improve and generate modest free cash flow after significant interest expense, modest capex and an expected absence of dividends in the next few years. These funds can be used to reduce its significant pro-forma adjusted leverage (Debt/EBITDA) towards 6x through the next 12 to 18 months. "In the event that the economy unexpectedly weakens, downside protection is provided by Husky's good liquidity position and resilient cash flow characteristics", added Kirk. The stable outlook stems from Moody's expectation that over the next 12-18 months Husky will use its modest free cash flow, in the $50 million range, to steadily reduce its adjusted debt of $1.6 billion to a level that solidifies its positioning within the B2 CFR. Upward rating action could be considered should Husky improve its adjusted Debt/ EBITDA comfortably under 5.5x and adjusted EBIT/ Interest towards 2x. Downward rating pressure could arise if Husky's Debt/ EBITDA was sustained above 6.5x or EBIT/ Interest coverage was likely to remain near 1.25x. The principal methodology used in rating Husky International Ltd. was the Global Heavy Manufacturing Rating Methodology, published November 2009. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Headquartered in Bolton, Ontario, Canada, Husky International Ltd. is a leading global manufacturer of injection molding equipment and related components and services for plastic beverage container manufacturers. Revenues for the last twelve months ended March 31, 2011 were about $1.2 billion. IMAGE METRICS: Amends Licensing Agreement with Largest Customer --------------------------------------------------------------- Image Metrics, Inc., amended its services agreement with its largest customer on May 13, 2011. The amendment was for the initial licensing of the Company's newly released product, FaceWare. FaceWare is a Software-as-a-Service offering that enables 3D animators to utilize in an automated, intelligent fashion, video-based actor performances as the underlying source for 3D character animation. The product became commercially available in March 2011. In addition to the license of FaceWare, the Company is required to provide the customer with research and development support on new technology as well as on improvements and modifications to Faceware and other current software applications of the Company. The Company is also required to provide support for FaceWare for the next 20 years. The term of the contract is up to 20 years in length. The Company earned a fee of $3.5 million for the license and services, which had been received by the Company under a previous agreement with the customer. About Image Metrics Santa Monica, Calif.-based Image Metrics, Inc., provides technology-based facial animation solutions to the interactive entertainment industry. Using proprietary software and mathematical algorithms that "read" human facial expressions, the Company's technology converts video footage of real-life actors into 3D computer generated animated characters. Examples of the Company's facial animation projects include the 2008 "Grand Theft Auto IV" video game, the 2009 computer generated aging of Brad Pitt in the feature film "The Curious Case of Benjamin Button," the 2009 Black Eyed Peas' "Boom Boom Pow" music video, and the 2010 "Red Dead Redemption" video game. The Company's key intellectual property consists of one patent registered in the United States, four additional patents in process, the identification of 16 potential new patents, and significant well-documented trade secrets. BDO USA, LLP, in Los Angeles, after auditing the Company's financial statements for the year ended Sept. 30, 2010, expressed substantial doubt about Image Metrics, Inc.'s ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency. The Company reported a net loss of $9.7 million on $5.9 million of revenue for fiscal 2010, compared to a net loss of $6.8 million on $4.0 million of revenue for fiscal 2009. The Company's balance sheet at March 31, 2011, showed $4.66 million in total assets, $15.31 million in total liabilities, and a $10.65 million total shareholders' deficit. IMPERIAL CAPITAL: FDIC Objects to Adequacy of Disclosure Statement ------------------------------------------------------------------ The Federal Deposit Insurance Corporation, as Receiver of Imperial Capital Bank, has objected to the Amended Disclosure Statement explaining the Debtor's Amended Chapter 11 Liquidating Plan of Reorganization, dated April 15, 2011. In its capacity as receiver for the Bank, the FDIC-R has filed claims against the estate in excess of $88.9 million, consisting primarily of: (1) $48.2 million pursuant to 11 U.S.C. Section 365(o) (the "Section 365(o) Claim"); and (2) $29.2 million for tax refunds attributed to taxes paid directly by the Bank, or remitted to ICBI for payment based upon consolidated returns filed pursuant to a Tax Allocation Agreement (the "TAA"), and where all or substantially all of the tax refunds are attributable to losses incurred by the Bank. The Section 365(o) Claim is now the subject of a claim objection and motion to withdraw the reference pending before the District Court, while the Tax Refund Claim is the subject of an adversary proceeding also now before the District Court. The Debtor has been further pursuing litigation on its claims against the Bank's receivership estate under 12 U.S.C. Section 182(d), which is also subject of litigation before the District Court (the "FIRREA Action"). The outcome of the Section 365(o) Litigation, Tax Refund Litigation and FIRREA Action will therefore have a significant impact on the Debtor's proposed Liquidating Plan which is the subject of the Amended Disclosure Statement, according to FDIC-R. FDIC-R makes the following arguments in support of its objection: -- The Amended Disclosure Statement fails to set forth "adequate information" as required pursuant to 11 U.S.C. Section 1125(b). -- The Amended Disclosure Statement fails to disclose the executory contracts being assumed and how potential rejection of the TAA, of which there is no mention in the Amended Disclosure Statement, may impact the Tax Refund Claim. -- The Amended Disclosure Statement fails to provide an Adequate Liquidation Analysis to enable creditors to compare their recovery under the Liquidating Plan to a Chapter 7 Liquidation. -- There is no disclosure as to the likely impact on the pursuit of the "Recovery Rights," including claims against current or former officers and members of the Board, other than the disclosure that Mr. Anthony Rusnak, currently the Debtor's general counsel, secretary, and chief operating officer, is to become the "Liquidating Trustee." Where the Liquidating Trustee is a member of a Debtor's prior and current management team, the lack of information directly impacts the feasibility of the proposed Liquidating Plan, FDIC-R argued. A copy of FDIC-R's objection to the Amended Disclosure Statement is available at: http://bankrupt.com/misc/imperialcapital.FDICojbectiontoDS.pdf As previously reported in the TCR, on May 5, 2011, Imperial Capital Bancorp, Inc., provided a copy of the proposed Liquidating Plan of Reorganization and a copy of the disclosure statement, as it was most recently amended and filed with the Bankruptcy Court on April 28, 2011. As described in the proposed Liquidating Plan of Reorganization and the disclosure statement, based upon assets available for distribution, creditors of the Company will not be paid in full under the Plan. Consequently, the Company predicts that, after payment to the Company's unsecured creditors, there will be no assets available for distribution to the holders of the Company's common stock. A complete text of the proposed Liquidating Plan of Reorganization is available for free at http://is.gd/LYmMPr A copy of the Disclosure Statement as filed on April 28, 2011, is available for free at http://is.gd/QqHPAn About Imperial Capital Bancorp La Jolla, California-based Imperial Capital Bancorp, Inc., filed for Chapter 11 bankruptcy protection (Bankr. S.D. Calif. Case No. 09-19431) on Dec. 18, 2009. Gregory K. Jones, Esq., at Stutman, Treister & Glatt, P.C., serves as the Company's bankruptcy counsel. The Company estimated its assets at $10 million to $50 million and debts at $100 million in its Chapter 11 petition. INTEGRATED TECH: Files for Chapter 7 Bankruptcy Protection ---------------------------------------------------------- Daily News Los Angeles reports that Integrated Technologies Consulting Inc., at 15549 Devonshire St., Suite 6, in Mission Hills, California filed for Chapter 7 in San Fernando Valley (Bankr. C.D. Calif. Case No. 11-15925). INTERNATIONAL LEASE: Fitch Affirms IDR at 'BB'; Outlook Stable -------------------------------------------------------------- Fitch Ratings has affirmed International Lease Finance Corp.'s (ILFC) Issuer Default Rating (IDR) at 'BB'. The Rating Outlook is revised to Stable from Evolving. Approximately $21.8 billion of debt is affected by the rating actions. ILFC's IDR is indicative of the company's creditworthiness on a standalone basis and reflects Fitch's view that ILFC is not a core part of American International Group's (AIG) overall franchise. Until a sale or divestiture is executed, Fitch believes that AIG will likely continue to take prudent and reasonable steps to maximize the value of its investment in ILFC. However, the current ratings do not anticipate further financial support from AIG, if it is needed. The rating affirmation incorporates progress the company has made over the past year, including the replacement of all key top level executives who left the firm and various initiatives undertaken to strengthen liquidity, lengthen debt maturities and reduce leverage. Other rating factors supporting the affirmation include the company's sizeable market position in the aircraft leasing sector, well-defined operating strategy, and demonstrated ability, via its diverse customer base and broad mix of commercial passenger aircraft, to navigate and to generate a stable level of cashflow through sector and economic cycles. . Fitch notes that secured funding now comprises roughly one-third of the ILFC's funding base. Affirmation of the senior unsecured debt rating reflects the company's underlying financial flexibility to access both secured and unsecured debt and ability to maintain sufficient unencumbered aircraft assets to support repayment of the unsecured debt. Fitch also notes the mix of unencumbered aircraft supporting repayment of unsecured debt remains comparable to aircraft assets provided as collateral for secured financings. Notching of ILFC's $750 million senior secured term loan and the $3.9 billion senior secured note ratings above the IDR reflects a combination of superior collateral coverage and structural protection. Collateral on the $750 million term loan consists of perfected security interests in 43 aircraft, which includes a significant number of newer, more fuel efficient narrow-bodied aircraft, Boeing 737s and Airbus A320s. Collateral for the $3.9 billion senior secured notes consists of perfected interests in 172 aircraft, which also includes a significant number of newer, fuel efficient, narrow-bodied aircraft. Given the age, fuel efficiency and breadth of the underlying user base for these aircraft, demand tends to remain stable which helps to maintain the underlying market value. Additional structural protection for both the $750 million term loan and the $3.9 billion of senior secured notes includes minimum loan-to-value requirements and aircraft and lessee concentration limits. The rating on the $550 million secured term facility, issued through ILFC's subsidiary, Delos Aircraft Inc, does not warrant notching above ILFC's IDR and reflects the lack of a potential first priority claim on aircraft provided as collateral and would result in a claim that is pari passu with ILFC's unsecured creditors if ILFC were to ever file bankruptcy. The Stable Outlook reflects the company's successful efforts over the past year to replace the senior management team, to further solidify liquidity and to reduce leverage. The Stable Outlook also reflects Fitch's expectation that near-term performance of the aircraft fleet will remain solid, generating sufficient operating cash flows to support ongoing funding requirements. However, Fitch recognizes that higher funding costs and the potential for further recognition of aircraft impairment charges, albeit at a significantly lower level than last year, may continue to dampen profitability over the near-term. Over the near term, Fitch does not think ILFC's credit profile supports an IDR in the investment grade category. Key rating drivers that would generate positive rating momentum longer-term and support migration of ratings to the investment grade category include consistency and improvement in profitability and related operating metrics, continued stability of cash flows though sector and cyclical downturns and/or potential capital market disruptions, reductions in leverage, improved funding flexibility, and further development of back-up liquidity sources to minimize the need to access the capital markets or sell aircraft assets to meet ongoing funding requirements. Drivers that may lead to lower ratings include deterioration in financial performance and a material decline in operating cashflow resulting from significant weakening of sector or economic conditions or exogenous shocks resulting from terrorism, political instability or pandemic. Additionally, a sale or divestiture that results in higher leverage and weakens the existing capital structure could also yield negative rating momentum. ILFC is an indirect, wholly owned subsidiary of AIG, Inc and is headquartered in Los Angeles, CA. ILFC is the one of world's largest aircraft operating lessors with a portfolio of 937 commercial aircraft as of March 31, 2011. Fitch has affirmed these ratings: ILFC -- Long-term IDR at 'BB'; -- $3.9 billion senior secured notes at 'BBB-'; -- $750 million senior secured notes at 'BBB-'; -- Senior unsecured debt at 'BB'; -- Preferred stock at 'B'. Delos Aircraft Inc. -- Senior secured debt at 'BB'. ILFC E-Capital Trust I -- Preferred stock at 'B'. ILFC E-Capital Trust II -- Preferred stock at 'B'. Fitch has also assigned these ratings: ILFC -- $1 billion senior unsecured notes due in 2016 at 'BB'; -- $1.25 billion senior unsecured notes due in 2019 at 'BB'. The Rating Outlook for ILFC is revised to Stable from Evolving. INTERPUBLIC GROUP: S&P Rates Sr. Unsec. Revolver Facility at BB+ ---------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'BB+' issue-level rating and '3' recovery rating to Interpublic Group of Cos. Inc.'s (IPG) amended and restated senior unsecured revolving credit facility. Under terms of the amendment, the capacity under the revolving credit facility will be increased to $1 billion from $650 million, and the maturity will be extended to May 2016 from July 2013. In addition, the company will benefit from modestly lower pricing and less restrictive covenants. "We view the amendment as a credit positive from a liquidity and financial flexibility standpoint," S&P noted. IPG has not historically drawn on its committed revolving credit facility, and uses the facility for letters of credit (LOCs), primarily to support obligations of subsidiaries. The amended facility has a limit on LOCs of $200 million, similar to the previous facility. Upgrade potential for IPG hinges on progress toward peer-level EBITDA margins, which will entail consistent momentum in new business wins, market share gains, and positive organic revenue growth. The 'BB+' corporate credit rating on the company remains unchanged. Ratings List Interpublic Group of Cos. Inc. Corporate Credit Rating BB+/Stable/-- New Rating Interpublic Group of Cos. Inc. Senior Unsecured $1 bil revolving credit facility due 2016 BB+ Recovery Rating 3 INTERTAPE POLYMER: Eight Directors Elected at Annual Meeting ------------------------------------------------------------ Intertape Polymer Group Inc. held on June 3, 2011, its annual meeting of shareholders. The eight nominees proposed by management (Eric E. Baker, Melbourne F. Yull, Robert M. Beil, George J. Bunze, Torsten A. Schermer, Jorge N. Quintas, Robert J. Foster and Gregory A. Yull) were elected on a vote by show of hands. Raymond Chabot Grant Thornton LLP, Chartered Accountants, were appointed as Intertape's auditors. 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. 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. * * * 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. ISTAR FINANCIAL: Seven Directors Elected at Annual Meeting ---------------------------------------------------------- iStar Financial Inc. held its 2011 Annual Meeting of Shareholders in New York on June 1, 2011. At the annual meeting, seven directors were elected for terms expiring in 2012, namely: Jay Sugarman, Glenn R. August, Robert W. Holman, Jr., Robin Josephs, John G. McDonald, George R. Puskar and Dale Anne Reiss. At the annual meeting, the shareholders ratified the selection of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the year ending Dec. 31, 2011. The stockholders approved,, on an advisory basis, the compensation of iStar Financial's named executive officers and other named officers. The stockholders recommend the proposal to conduct a shareholder vote every year to approve the compensation of the Company's named executive officers and other named officers. About iStar Financial New York-based iStar Financial Inc. (NYSE: SFI) provides custom- tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust, provides innovative and value added financing solutions to its customers. The Company's balance sheet at March 31, 2011, showed $8.88 billion in total assets, $7.11 billion in total liabilities, and $1.77 billion in total equity. * * * As reported by the TCR on March 29, 2011, Fitch Ratings has upgraded the Issuer Default Rating to 'B-' from 'C'. The upgrade of iStar's IDR is based on the improved liquidity profile of the company, pro forma for the new senior secured credit agreement (the new financing) that extends certain of the company's debt maturities, relieving the overhang of significant secured debt maturities in June 2011. In July 2010, Standard & Poor's Ratings Services lowered its long- term counterparty credit rating on iStar Financial to 'CCC' from 'B-'. The outlook is negative. iStar's limited funding flexibility and the severe credit quality deterioration in its loan portfolio continue to put negative pressure on the rating, S&P said. As reported by the Troubled Company Reporter on March 22, 2011, Standard & Poor's said that it raised its counterparty credit rating on iStar Financial Inc. to 'B+' from 'CCC' and removed it from CreditWatch where it was placed with positive implications on Feb. 23. The outlook is stable. "The upgrade reflects the company's closing of a $2.95 billion senior secured credit facility, which it will use to refinance the company's existing secured bank facilities and repay a portion of the company's unsecured debt," said Standard & Poor's credit analyst Jeffrey Zaun. If S&P's analysis of the new secured facility indicates 100% or more collateral coverage, S&P will rate the issue 'BB-'. If S&P's analysis of collateral indicates less than 100% coverage, S&P will rate the issue 'B+'. JILL HOLDINGS: S&P Gives 'B' Corp. Credit Rating; Outlook Negative ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Quincy, Mass.-based Jill Holdings LLC. The outlook is negative. "At the same time, we assigned our 'B' issue-level rating to subsidiary JJ Lease Funding Corp.'s $120 million senior secured term loan, with a recovery rating of '4'. Our '4' recovery rating indicates our expectation of average (30%-50%) recovery in the event of a payment default. According to the company, it intends to use the proceeds from the term loan to repurchase existing debt, finance its acquisition by an additional private-equity sponsor, and for general corporate purposes," S&P stated. "The ratings on Jill, a women's specialty apparel retailer, reflect our expectation that credit measures will weaken as commodity cost increases will likely offset benefits from the company's cost-saving initiatives," said Standard & Poor's credit analyst Helena Song. "We anticipate that sales will be modestly higher as the company adds new stores," S&P added. JNL FUNDING: Court Okays Disc. Statement, Plan Hearing on June 13 ----------------------------------------------------------------- Judge Alan S. Trust of the U.S. Bankruptcy Court for the Eastern District of New York approved the second amended disclosure statement explaining the plan of reorganization filed by JNL Funding, Corp., and Joseph G. Forgione, the consolidated Official Committee of Unsecured Creditors, and Textron Financial Corporation and TD Bank, N.A. Hearing on the confirmation of the Plan is scheduled for June 13, 2011 at 10:00 a.m. Objections to the Plan are due June 6. A full-text copy of the Second Amended Disclosure Statement, filed on May 10, 2011, is available for free at: http://ResearchArchives.com/t/s?7625 About JNL Funding JNL Funding Corp. is a specialized real estate finance company which originates and invests in a diversified portfolio of first mortgage assets in the residential real estate market. JNL is a "hard money" lender investing primarily in real estate related first mortgages and construction loans, making loans secured by first priority mortgages primarily on single family and multi- family residential real properties. JNL's loans typically are made to real estate investors seeking to purchase and renovate properties for investment purposes. Most of JNL's loans are made to repeat customers who have multiple loans from JNL at any given time. JNL's recent loans typically bear interest at the rate of 14% per annum, and JNL typically receives four (4.0) percentage points for originating the loan. JNL Funding filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 10-73724) on May 14, 2010. Pryor & Mandelup, LLP, assists the Debtor in its restructuring effort. The Company estimated its assets and debts at $50 million to $100 million as of the Chapter 11 filing. JNL also disclosed that its combined general unsecured debts total $19,509,090, for total debts of $50,677,195. On June 8, 2010, the United States Trustee appointed an Official Committee of Unsecured Creditors. The Court approved the Joint Administration of JNL's case and Joseph Forgione's case (Bankr. E.D.N.Y. Case No. 10-73726) on October 27, 2010. Mr. Forgione filed for bankruptcy on May 14, 2010. On Oct. 28, 2010, the U.S. Trustee appointed a creditors committee in the jointly administered cases. Counsel for the Committee is: Richard G. Gertler, Esq. THALER & GERTLER LLP 90 Merrick Avenue, Suite 400 East Meadow, NY 11554 Telephone: 516-228-3553 Counsel for secured lender Textron Financial Corp.: Steven E. Fox, Esq. EPSTEIN BECKER & GREEN P.C. 250 Park Avenue, 11th Flr New York, NY 10177-121 Telephone: 212-351-3733 Facsimile: 212-878-8688 E-mail: SFox@ebglaw.com JOE TECCE: Blames 'Big Dig' Construction for Bankruptcy Filing -------------------------------------------------------------- Rachel Feintzeig, writing for Dow Jones' Daily Bankruptcy Review, reports that Joe Tecce Inc., which operates Joe Tecce's Ristorante, a staple in Boston's historic North End neighborhood, entered bankruptcy protection Thursday. According to papers filed in Court, DBR relates Joe Tecce blamed its collapse to the construction of the "Big Dig," one of the longest, expensive and most controversial projects ever to disrupt America's streets, which gave Boston a rerouted central artery, a new tunnel and a big headache for more than 20 years. DBR says with the building housing Tecce's just "inches away from the new tunnel," according to court papers, the restaurant struggled. Access to the eatery was restricted, and construction noises and vibrations adversely impacted the experience of those that did venture in for a bite, it said in court papers. In its petition, the restaurant cited assets and debts each ranging between $100,001 and $500,000. The company said it has about $300,000 in trade debt plus $200,000 of tax liability. DBR also reports the petition was followed by a bid to dole out employee wages, with pay day looming and the company stressing that its 35 employees were among its greatest assets. A judge assigned to the new case approved the request on Friday. Restaurant founder Joseph Tecce started with a fruit stand in the 1940s and later opened the Fabulous Joe Tecce's Restaurant after a fire destroyed a pizza shop he eventually launched, according to an article in the Boston Globe. Joseph Tecce died in 2006 at age 94. JS WESTON'S: Judge David Adams Dismisses Chapter 11 Case -------------------------------------------------------- The Hon. David H. Adams of the U.S. Bankruptcy Court for the Middle District of Florida has granted the motion of the United States Trustee for the dismissal of J.S. Weston's, Inc.'s Chapter 11 case. Neither the Debtor nor a representative for the Debtor nor counsel for the Debtor appeared at the hearing. As reported in the TCR on March 4, 2011, Don Walton, the United States Trustee for Region 21, requested the U.S. Bankruptcy Court for the Middle District of Florida to dismiss J.S. Weston's Inc.'s bankruptcy case, citing, among other things: a) a Disclosure Statement and Chapter 11 Plan has not been filed. b) the State Court Receiver is still in possession of the principal assets of the bankruptcy estate. c) Virtual Realty Enterprises, LLC, an asserted secured lender with what appears to be a first mortgage on the real estate holdings of the Debtor obtained stay relief at the hearing on Feb. 17, 2011. d) the entity has failed to pay quarterly fees since filing. e) the Receiver reports that have been filed through Jan. 31, 2011, indicates that there is a continuing loss to or diminution of the estate together with an absence of a a reasonable likelihood of rehabilitation. About J.S. Weston's Englewood, Florida-based J.S. Weston's, Inc., filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 10-27273) on Nov. 11, 2010. Rodney L. Salvati, Esq., who has an office in Venice, Florida, represents the Debtor. The Company disclosed $12,882,561 in assets and $8,945,052 in liabilities as of the Chapter 11 filing. KENTUCKIANA MEDICAL: Has Until July 18 to File Chapter 11 Plan -------------------------------------------------------------- Ben Hershberg at Courier-Journal reports that a U.S. bankruptcy judge set July 18, 2011, as deadline for the Kentuckiana Medical Center to develop a plan to solve its financial problems. "That will be the final extension of exclusivity," Courier-Journal quotes Judge Basil Lorch III, as stating, referring to his order after the Clarksville Hospital declared bankruptcy in September allowing the hospital's managers to create a reorganization plan. Clarksville, Indiana-based Kentuckiana Medical Center LLC filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ind. Case No. 10-93039) on Sept. 19, 2010. David M. Cantor, Esq., at Seiller Waterman LLC, represents the Debtor. The Debtor scheduled $9,496,899 in assets, and $25,029,083 in liabilities. K-V PHARMACEUTICAL: AmediusTec Owns 5% of Class A Common Shares --------------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, AmediusTec Ltd. disclosed that it beneficially owns 2,636,345 shares of Class A common stock of K-V Pharmaceutical Company representing 5% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/bx6Is8 About K-V Pharmaceutical Company K-V Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. K-V Pharmaceutical has not timely filed its Form 10-K for the year ended March 31, 2010, and its Form 10-Qs for the subsequent quarterly periods. The Company's independent accounting firm, KPMG, resigned on June 25, 2010, and the Company has tapped BDO USA, LLP, to audit the fiscal 2010 financial statements. The Company's balance sheet at Sept. 30, 2010 showed $294.21 million in total assets, $500.75 million in total liabilities and $206.54 million in total shareholders' deficit. KIOWA POWER: S&P Affirms Rating on $73.5MM Bonds at 'BB-' --------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook to negative from stable and affirmed its 'BBB-' rating on Kiowa Power Partners (KPP) LLC's $642 million senior secured bonds due in 2013 and 2021. "The negative outlook reflects our view of the potential for KPP's financial performance to weaken further due to higher tax costs and a greater operational risk profile," S&P stated. At the same time, Standard & Poor's revised its outlook to negative from stable and affirmed its 'BB-' rating on Tenaska Oklahoma I L.P.'s (TOILP) $73.5 million senior secured bonds due 2014 because Tenaska Oklahoma pays debt with distributions from KPP. "The negative outlooks on KPP and TOILP are a result of the continual underestimation of property taxes and increased operational risk at the plant," said Standard & Poor's credit analyst Grace Drinker. "For 2011, the project's property tax assessment is nearly four times initial expectations." "KPP continues to experience one-time issues that have increased the operational risk of the plant, in our view. Most recently, KPP experienced outages on both Blocks 1 and 2 as a result of tube leaks in the project's heat recovery steam generator (HRSG); repair costs and loss of revenue for these outages were not covered under the long-term service agreement or electrical maintenance agreement," S&P stated. "We will likely lower the rating if property taxes remain elevated compared to pro forma estimates and long-term debt service coverage ratios remain below 1.4x, or if the financial impacts of operational outages are borne by the project," Ms. Drinker said. LARRY SCHAIDT: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Larry Schaidt, LLC aka Lawrence J. Schaidt, LLC 1167 142nd Avenue, Route 1 Wayland, MI 49348 Bankruptcy Case No.: 11-06202 Chapter 11 Petition Date: June 2, 2011 Court: U.S. Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: Scott W. Dales Debtor's Counsel: Perry G. Pastula, Esq. DUNN SCHOUTEN & SNOAP PC 2745 DeHoop Avenue SW Wyoming, MI 49509 Tel: (616) 538-6380 E-mail: bankruptcy@dunnsslaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Lawrence J. Schaidt III, president. LAX ROYAL: MSCI Wants Stay Lifted as to West Century Property ------------------------------------------------------------- MSCI 2006-IQ11 West Century Limited Partnership asks the U.S. Bankruptcy Court for the Central District of California to lift the automatic stay with respect to the real property owned by Lax Royal Airport Center, LP, at 5933 West Century Boulevard, in Los Angeles, California. MSCI asserts that its interest in the property is not adequately protected. MSCI also asserts that the fair market value of the property is declining and the Debtor has not made payments due to MSCI sufficient to protect its interest against that decline. MSCI is represented by: H. Mark Mersel, Esq. Sheri Kanesaka, Esq. Bryan Cave LLP Irvine, CA 92612 Tel: (949)223-7000 Fax: (949)223-7100 E-mail: mark.mersel@bryancave.com In response, the Debtor asks the Court to deny MSCI's motion in its entirety on the grounds that sufficient equity exists in the Property to adequately protect MSCI's secured interest; the Property is necessary for an effective reorganization; and there is a reasonable probability that the Debtor can confirm a Chapter 11 Plan in a reasonable time. About LAX Royal Airport Center, LP Los Angeles, California-based LAX Royal Airport Center, LP, filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-12333) on Jan. 19, 2011. The Debtor estimated assets at $10 million to $50 million and debts at $1 million to $10 million. No request for the appointment of a trustee or examiner was made. LEHMAN BROTHERS: Citigroup, et al., Want $1-Bil. Suit Dismissed --------------------------------------------------------------- Citigroup Inc. and its subsidiaries have filed a motion to dismiss the $1 billion lawsuit filed by the trustee overseeing the liquidation of Lehman Brothers Inc. James Giddens, the court-appointed trustee, filed the lawsuit to recover more than $1 billion, which LBI posted as collateral to ensure that Citibank N.A. would continue providing clearing services for the brokerage firm's foreign exchange transactions. He alleged that the funds were obtained under coercion. The funds were reportedly deposited with Citibank as security for any resulting exposure to LBI. When LBI, however, requested the return of the funds, Citibank said it had set the deposit off against other obligations the brokerage firm owed to the bank. In a court filing, Claudia Hammerman, Esq., at Paul Weiss Rifkind Wharton & Garrison LLP, in New York, argued that the trustee's claims to recover the funds are without merit. Ms. Hammerman said the safe harbor provisions for swap agreements protect the $1 billion setoff. She argued that the foreign exchange transactions Citibank settled for LBI and the agreement under which the bank settled those transactions are all swap agreements pursuant to the safe harbor provisions. The Citigroup lawyer also argued that the complaint fails to state a claim for violation of the automatic stay, pointing out that the bank set off the funds before the commencement of LBI's liquidation proceeding. The automatic stay is an injunction that halts actions by creditors against a company in bankruptcy protection. Ms. Hammerman further said that Citibank did not receive the $1 billion to obtain a right to set off existing debt but to secure the bank's future extensions of credit to LBI. LBI Trustee Seeks Issuance of Letter Rogatory The LBI Trustee sought and obtained from the Court an order directing issuance of a letter rogatory for service of process on defendant Banco de Chile in the Republic of Chile. The LBI Trustee also sought and obtained from the Court an order, directing the signing of three original Letters Rogatory and compelling that the original letters be returned to counsel for forwarding along with the Complaint and Summons in the action to the U.S. Department of Justice. Discovery Schedule The Court, at the proposal of LBI and Citibank, has set these dates to govern the discovery related to the Citibank adversary complaint: Sept. 26, 2011 -- Document discovery must be substantially completed, with documents produced on a rolling basis Oct. 26, 2011 -- Logging of privileged documents must be substantially completed Feb. 6, 2012 -- Fact discovery, including depositions, must be completed March 6, 2012 -- Parties will disclose the identities of any testifying expert witnesses and serve any expert reports April 6, 2012 -- Any party's expert report intended to rebut any other expert will be served May 7, 2012 -- All expert depositions will be completed June 6, 2012 -- Any dispositive motions will be filed and served 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: Weil Seeks $38 Million for 4 Months of Work -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Weil Gotshal & Manges LLP, the principal bankruptcy lawyers for Lehman Brothers Holdings Inc., filed papers yesterday seeking court approval for the payment of about $38 million in fees and expenses for the period Oct. 1 through Jan. 31. Weil's partners, associates and paralegals billed 62,900 hours to Lehman for the period, at an average hourly rate of $638 for lawyers. Top Weil partners bill $1,000 an hour. Mr. Rochelle notes that the bankruptcy court previously approved almost $200 million in payments to New York-based Weil for work from the beginning of the case in September 2008 through May 2010. A request is still pending for approval of $43.7 million for the four-month period ended Sept. 30. Mr. Rochelle adds that the fee request for the four months ended Jan. 31 is the second-lowest for Weil since the case began. The largest fee application sought $55.1 million for the period just after the case started. The smallest request for four months was $40.3 million. Meanwhile, the bankruptcy judge issued orders, allowing the interim payment of fees and reimbursement of expenses incurred by these professionals for the period February 1 to May 31, 2010: Professional Fees Expenses ------------ ---------- -------- Bingham McCutchen, LLP $2,616,539 $103,363 Bortstein Legal, LLC $436,439 $0 Curtis, Mallet-Prevost, Colt $3,440,334 $113,036 & Mosle LLP Dechert LLP $611,775 $10,981 Deloitte Tax LLP $110,856 $126 Ernst & Young LLP $23,734 $0 FTI Consulting, Inc. $9,658,001 $83,174 Gibson Dunn & Crutcher LLP $651,642 $10,422 Houlihan Lokey Howard & $1,823,299 $53,107 Zurkin Capital, Inc. Jenner & Block LLP $3,303,960 $324,275 Jones Day $12,748,365 $348,623 Kasowitz, Benson, Torres $158,914 $125,292 & Friedman, LLP Kleyr Grasso Associes $123,264 $3,780 Latham & Watkins LLP $192,805 $8,732 Lazard FrSres & Co. LLC $3,250,000 $633,764 Milbank, Tweed, Hadley & $19,041,118 $847,210 McCloy LLP Momo-o, Matsuo & Namba $107,620 $5,628 The O'Neil Group $275,995 $27,654 Pachulski, Stang, Ziehl $350,611 $2,688 & Jones LLP Paul, Hastings, Janofsky & $296,514 $149 Walker LLP PricewaterhouseCoopers LLP $161,151 $2,055 Quinn, Emanuel, Urquhart $3,366,004 $278,398 & Sullivan, LLP Reilly Pozner, LLP $999,282 $113,127 Richard Sheldon QC $16,794 $0 Simpson Thacher & Bartlett LLP $104,919 $1,610 Sutherland Asbill & Brennan LLP $224,703 $1,024 Weil, Gotshal & Manges LLP $45,941,292 $1,088,391 Windels Marx Lane & $458,354 $5,714 Mittendorf, LLP 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: SIPC Trustee Supports $861-Mil. Deal with JPM -------------------------------------------------------------- The Securities Investor Protection Corporation asks the Bankruptcy Court to approve the settlement between the trustee of Lehman Brothers Inc. and JP Morgan Chase Bank, N.A., J.P. Morgan Securities LLC, and J.P. Morgan Clearing Corp., noting that the LBI Trustee's investigation of, and settlement with, JPMorgan reflects and in part fulfills the statutory mandate for the SIPA to protect customers in the event of the financial failure of a broker-dealer. As reported in the May 20, 2011 edition of the Troubled Company Reporter, before the Petition Date, 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. Kenneth J. Caputo, Esq., senior associate general counsel for the SIPC, in Washington, D.C., relates that, shortly after his appointment, the LBI Trustee commenced an investigation of JPMorgan's activities and relationships with LBI. The exhaustive, two-year investigation entailed the review and analysis of the acts and conduct of the parties based on, among other things, voluminous documentation and interviews with numerous personnel of LBI and JPMorgan, Mr. Caputo points out. The LBI Trustee, and his investigatory team, met and conferred regularly with SIPC, and SIPC participated in numerous meetings, which served to refine and narrow the outstanding facts and issues among the parties, and enabled the parties to work constructively towards completion of the compromise and settlement that is the subject of the LBI Trustee's present motion, Mr. Caputo further relates. Accordingly, the SIPC maintains that the proposed settlement furthers SIPA's mandate and the LBI Trustee's duties to maximize the pool of assets available for distribution to customers of LBI. 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: Citi Wants LBI Claims Reduced by $296-Mil. ----------------------------------------------------------- Citibank, N.A., together with its affiliates Citigroup Global Markets, Inc., Citibank Japan Ltd., Citigroup Pty Limited, Banco Nacional de Mexico SA, Citibank International plc, Bank Handlowy W Warszawie SA, Citibank AS, Citibank del Peru SA, Citibank Europe plc, Citibank Maghreb, and ZAO KB Citibank seek authority from the Bankruptcy Court to exercise certain contractual, common law, and statutory rights, including rights of setoff, against or in respect of LBI's deposit accounts with Citi. As of the commencement of Lehman Brothers Inc.'s liquidation proceeding under the Securities Investor Protection Act, Citi had claims against LBI, totaling approximately $296 million. Likewise, Citi has identified LBI claims against it, totaling approximately $435 million. The LBI claims arise from Citi's maintenance of cash deposit and securities custody accounts for LBI, derivatives transactions, securities repurchase transactions, and securities clearing transactions. Against this backdrop, Citi asserts contractual, common law, and statutory rights to reduce LBI's claims against it by at least $296 million. Citi also seeks entitlement to relief from any applicable stay under the Bankruptcy Code or SIPA to enforce its rights. According to Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, argues that the "safe harbor" provisions and other applicable provisions of the Bankruptcy Code and SIPA compel enforcement of Citi's contractual, common law, and statutory rights to reduce LBI's claims against Citi by amounts owed to Citi by LBI. Accordingly, Citi asks the Bankruptcy Court to: (a) under Sections 362(b)(6), 362(b)(7), 362(b)(17), 362(o), 555, 559, and 560 of the Bankruptcy Code, Sections 78eee(b)(2)(C) and 78fff(b) of the Commerce and Trade Code, and the District Court Liquidation Order, (x) determine that its proposed exercise of contractual, common law, and statutory rights is not subject to any stay under the Bankruptcy Code or SIPA, and (y) authorizing it to enforce its rights as requested in the motion; (b) in the alternative, lift the stay to permit the exercise of its contractual, common law and statutory rights to reduce or set off LBI's claims against it by the amount of the Citi claims against LBI, and to liquidate any collateral posted by LBI, all as requested in the motion; and (c) in the further alternative, under Sections 361 and 506(a) of the Bankruptcy Code, grant adequate protection of its interests in the Deposit Accounts and other LBI Claims to the extent that the Court determines that relief from the stay cannot be granted at this time. Citibank, in a separate filing, asks permission from the Court to file, under seal, confidential material related to its motion. The confidential material relates to information of CLS Bank International and CLS Services Ltd. Stephen J. Shimshak, Esq., a member of Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, counsel to Citibank, filed a declaration attaching documents related to the motion, including the relevant documents to be filed under seal. 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: Unveils Plan to Settle Derivatives Claims ---------------------------------------------------------- Lehman Brothers Holdings Inc. is proposing a deal to settle its outstanding derivatives trades with its largest counterparties in a bid to speed the resolution of its bankruptcy case, according to a May 31, 2011 report by Dow Jones Daily Bankruptcy Review. LBHI proposed the deal with 13 of its largest derivatives counterparties, which include some of Wall Street's biggest banks, the report said. The company is offering to settle the claims using a common valuation method in exchange for seeking to reduce those claims in litigation, the report added. The company has been in talks for months with banks holding the largest derivatives claims including Bank of America Corp., Bank of New York Mellon Corp., Citibank, Deutsche Bank, Credit Suisse Group and J.P. Morgan Chase & Co. For the settlement to work, at least 10 of the big banks must sign off on the deal by June 30, 2011. Without the approval, LBHI said it will contest the claims and will "seek to reduce such claims to amounts lower than the derivatives framework," Dow Jones reported. According to LBHI's most recent Chapter 11 plan, about 30 financial institutions filed $22 billion in derivatives claims against the company and its derivatives subsidiary. Lehman representatives, however, have argued that the figure is inflated and that if the derivatives claims are calculated according to new framework, those claims would total about $10 billion, Dow Jones reported. At the time of its collapse, LBHI was a party to or had guaranteed more than 10,000 derivative contracts representing more than 1.7 million transactions, according to the report. 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: Investors Sue Lehman Over $640MM Contributions --------------------------------------------------------------- Lehman Brothers Holdings Inc. real estate units and executives were slapped with a lawsuit by investors who claimed they contributed part of $640 million in 2008 to properties for which the company overpaid, Bloomberg News reported. The investors, including Barbara Fried of Virginia, described themselves in a court filing as limited partners of Lehman Brothers Real Estate Partners III and 10 other partnerships formed by LBHI mostly in 2007. The group seeks unspecified damages and fees, according to the report. While Lehman was writing down commercial real estate in 2007, the partnerships "spoke only of future market opportunities." Overvalued assets were bought and "warehoused" for the funds, which planned to borrow $1.2 billion to buy them and did not disclose the risk, the investors alleged. The case is Fried v. Lehman Brothers Real Estate Associates, 651461/2011, New York State Supreme Court (Manhattan). 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: Judge Dismisses in Part Ballyrock ABS Lawsuit -------------------------------------------------------------- U.S. Bankruptcy Judge James Peck granted in part and denied in part the motion to dismiss the adversary complaint by Ballyrock ABS CDO 2007-1 Limited. The Adversary Proceeding raises questions relating to the enforceability in bankruptcy of a contractual provision triggered by the default and early termination of certain transactions under a credit default swap entered in July 2007 by Lehman Brothers Special Financing Inc. and Ballyrock, pursuant to which Ballyrock, a special purpose entity formed solely for the transaction, agreed to pay LBSF if losses were incurred on certain assets. In return, LB Special Financing agreed to pay a periodic premium to Ballyrock, similar to an insurance premium. LBSF filed the adversary proceeding to protect its contractual right to more than $400 million from Ballyrock, and to enjoin Wells Fargo, N.A., acting in its capacity as trustee, from improperly distributing to Ballyrock's investors the remaining assets -- more than $137 million. LBSF maintains it is the rightful owner of the remaining assets. The Court denied the motion to dismiss in relation to the two counts that seek to invalidate the "Defaulted Synthetic Termination Payment Clause" as an ipso facto clause or to enjoin the "Proposed Distribution." The Court, however, granted the motion to dismiss as to count II of the Complaint, which allege that ineffective steps were taken to terminate the Credit Default Swap Agreement. The surviving counts are counts I ("Declaratory Judgment -- The Proposed Distribution is Improper") and III ("Request for Temporary Restraining Order and Preliminary and Permanent Injunction Pursuant to Rules 7001(7) and 7065 of the Federal Rules of Bankruptcy Procedure and Section 105(a) of the Bankruptcy Code of the Complaint.) The Court notes that the Complaint asserts viable claims that the Defaulted Synthetic Termination Payment Clause violates the Bankruptcy Code's prohibition against ipso facto clauses. "The Bankruptcy Code of 1978 effected a change in the treatment of contract or lease clauses that" sought to "modify the relationships of contracting parties due to the filing of a bankruptcy petition" -- the so-called ipso facto clauses, Judge Peck noted, citing In re Reloeb Co. v. LTV Corp. (In re Chateaugay Corp.), 1993 U.S. Dist. LEXIS 6130, *14 (S.D.N.Y. 1993). It is now axiomatic that ipso facto clauses are unenforceable in bankruptcy, he further noted. Section 541 of the Bankruptcy Code, in addition to describing what constitutes property of the bankruptcy estate, also invalidates ipso facto clauses, providing that a debtor's interest in property, Judge Peck stated. The safe harbor provisions of Section 560 of the Bankruptcy Code were enacted to protect a non-defaulting swap participant's contractual rights to: (i) liquidate, terminate or accelerate "one or more swap agreements because of a condition of the kind specified in section 365(e)(1)" of the Bankruptcy Code, or (ii) "offset or net out any termination values or payment amounts arising under or in connection with the termination, liquidation, or acceleration of one or more swap agreements . . .," Judge Peck pointed out in his May 12 memorandum. According to Judge Peck, courts have refrained from interpreting the language of Section 560 beyond the plain meaning of the words "liquidation, termination, or acceleration," citing In re Calpine Energy Servs, L.P. v. Reliant Energy Elec. Solutions, LLC, (In re Calpine Corp.), 2009 WL 1578282, at *6-*7 (Bankr. S.D.N.Y. 2009). Accordingly, the Defaulted Synthetic Termination Payment Clause, once activated by the default of a bankruptcy filing, would change the flow of funds in a manner that would deprive LBSF of pre-existing distribution rights, Judge Peck noted. "Such a mandated elimination of a substantive right to receive funds that existed prior to the bankruptcy of LBHI should not be entitled to any protection under safe harbor provisions that, by their express terms, are limited exclusively to preserving the right to liquidate, terminate and accelerate a qualifying financial contract." Count II of the Complaint seeks a declaratory judgment that Ballyrock improperly terminated the Credit Default Swap Agreement, and, as a result, both that agreement and the underlying transactions remain in effect. This count is premised on the allegation that the Credit Default Swap Agreement, by custom and practice of the market, includes both the Ballyrock Master Agreement and the related Transactions. LBSF contended that Ballyrock was unable to terminate the Credit Default Swap Agreement without first satisfying certain prerequisites described in the Indenture. Specifically, LBSF argues that section 7.8(a)(xi) of the Indenture prohibits Ballyrock from "terminat[ing] the Credit Default Swap Agreement unless (A) no Transactions remain outstanding . . . or (B) [Ballyrock] has entered into a replacement" swap agreement. LBSF asserted that those conditions to termination were not met when Ballyrock sent the September 16 Letter purporting to terminate the outstanding Transactions and accordingly, the agreement and the transactions remain in effect despite the purported termination. "This proposed interpretation of the governing documents is unpersuasive and ignores the fact that the Indenture's defined term 'Credit Default Swap Agreement' refers to the Ballyrock Master Agreement and does not directly embrace the Transactions contemplated by that agreement," Judge Peck opined. Judge Peck granted the motion as to Count II, pointing out that Count II does not state a claim upon which relief can be granted because even if Ballyrock failed to observe the Indenture's requirements for termination of the Credit Default Swap Agreement, the Transactions themselves were terminated and termination of the Transactions by itself would be sufficient to establish a right to the termination payments at issue in the Adversary Proceeding. 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) LEHR CONSTRUCTION: Trustee Hires Golenbock Eiseman as Counsel ------------------------------------------------------------- Jonathan L. Flaxer, the Chapter 11 Trustee of Lehr Construction Corp., seeks permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Golenbock Eiseman Assor Bell & Peskoe as his general counsel. The firm can be reached at: Douglas L. Furth, Esq. Dallas Alabaugh, Esq. Michael S. Weinstein, Esq. GOLENBOCK EISEMAN ASSOR BELL & PESKOE LLP 437 Madison Avenue New York, NY 10022 Tel: (202) 907-7300 E-mail: dfurth@golenbock.com dalbaugh@golenbock.com mweinstein@golenbock.com As the Trustee's counsel, GEABP will, among other things: (a) provide legal advice and all legal services necessary to assist the Trustee in his efforts to wind down the the Debtor's affairs, maximizing the value of the Estate and investigate the Estate's assets and financial affairs; (b) evaluate and pursue potential causes of action under chapter 5 of the Bankruptcy Code, if any; (c) prepare or review on behalf of the Trustee, such necessary motions, applications, answers, orders, reports and other papers in connection with the administration of the Debtor's Estate; and (d) at the request of the Trustee, take such action as may be necessary to protect and preserve the Estate, including the prosecution of actions on the Trustee's or Debtor's behalf, the defense of any actions commenced against the Debtor or the Trustee, and the prosecution objections to claims designated by the Trustee as subject to objection. The Trustee will hire GEABP on an hourly basis and will reimburse reasonable expenses incurred in connection with performing such services. The Trustee assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Lehr Construction New York-based Lehr Construction Corp. was founded in 1979. It specializes in interior construction and serves clients mainly throughout the New York metropolitan area. It serves as construction manager and general contractor for its clients Lehr filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 11-10723) on Feb. 21, 2011. James A. Beldner, Esq., at Cooley LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. LEHR CONSTRUCTION: Trustee Taps Wolf Haldenstein as Counsel ----------------------------------------------------------- Jonathan L. Flaxer, the Chapter 11 Trustee of Lehr Construction Corp., asks authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Wolf Haldenstein Adler Freeman & Hertz as conflicts counsel to the Trustee. The firm will represent the Trustee in any dispute with HSBC Bank USA, National Association or any of its affiliates. The Debtor recently completed projects for HSBC at its Columbus Avenue and Broadway locations and has an incomplete project for HSBC at its Fifth Avenue location. To the best of the Trustee's knowledge, there are no issues or disputes relating to the three HSBC projects. In the event that disputes between the Estate and HSBC arise, the Trustee proposes that WH will represent him in connection with such dispute. WH will charge for services rendered on an hourly basis and for reimbursement for reasonable expenses incurred. The Trustee assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Lehr Construction New York-based Lehr Construction Corp. was founded in 1979. It specializes in interior construction and serves clients mainly throughout the New York metropolitan area. It serves as construction manager and general contractor for its clients Lehr filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 11-10723) on Feb. 21, 2011. James A. Beldner, Esq., at Cooley LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. LODGENET INTERACTIVE: Two Directors Elected at Annual Meeting ------------------------------------------------------------- R. F. Leyendecker, who has served as a director of Lodgenet Interactve Corporation for more than 20 years, has decided to retire from the Board effective June 2, 2011, and chose not to stand for re-election at the annual meeting held on June 2, 2011. The Board does not intend to fill the director vacancy at this time. The Board believes it can effectively represent the shareholders and carry out its responsibilities with an eight member board. On June 2, 2011, LodgeNet held its 2011 Annual Meeting. At the meeting, the holders of 22,828,546 shares were represented in person or by proxy. Vikki Pachera and Edward L. Shapiro were elected as directors. The Shareholder Rights Plan adopted by the Stockholders in May 2008 was ratified. The appointment of PricewaterhouseCoopers LLP as LodgeNet's independent registered public accounting firm for the fiscal year ending Dec. 31, 2011, was ratified. Executive compensation was approved with an advisory vote. Shareholders approved the recommendation to hold an advisory vote to approve executive compensation every year. About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET), formerly LodgeNet Entertainment Corp. -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. The Company reported a net loss of $11.68 million on $452.17 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $10.15 million on $484.49 million of total revenue during the prior year. The Company's balance sheet at March 31, 2011 showed $439.21 million in total assets, $490.67 million in total liabilities, and $51.46 million in total stockholders' deficiency. * * * Lodgenet carries a 'B3' long term corporate family rating and a 'Caa1' probability of default rating, with 'stable' outlook, from Moody's. It has 'B' long term foreign and local issuer credit ratings, with 'stable' outlook, from Standard & Poor's. "In Moody's opinion, continued cautious investment from LodgeNet's hotel customers will hamper intermediate term growth in its core hospitality services business, and over the long term competing forms of entertainment will pressure this revenue stream as the company seeks to defend its relevance to both hotel operators and hotel guests. The B3 corporate family rating incorporates these weak growth prospects, mitigated somewhat by the company's moderately high financial risk profile and demonstrated capacity to generate positive free cash flow throughout challenging economic conditions, along with a measure of stability from the monthly fees it receives from hotels regardless of occupancy," Moody's said in October 2010. LOWER BUCKS: Has Until July 8 to Propose Chapter 11 Plan -------------------------------------------------------- The Hon Eric L. Frank of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania extended Lower Bucks Hospital. et al.'s exclusive periods to file a solicit acceptances for the proposed chapter 11 plan until July 8, 2011, and Sept. 6, respectively. As reported in the Troubled Company Reporter on April 27, the Debtors asked for the extensions to pitch it exclusively to creditors for their approval. This is the seventh exclusivity extension requested by the Debtor. The TCR also reported that the Company could emerge from bankruptcy as early as September, if the court approves what will likely be its last request for more time to file its restructuring plan. The Company said that absent an extension, a tentative deal it has reached with its bond trustee holder would be jeopardized. The hospital says it has reached a tentative agreement to resolve pending litigation with its bondholder. The agreement is contingent upon an agreement between the hospital and the Pension Benefit Guaranty Corp. The hospital is seeking to have the PBGC take over its employee pensions. About Lower Bucks Hospital Bristol, Pennsylvania-based Lower Bucks Hospital is a non-profit hospital based in Bristol, Pennsylvania. The Hospital is currently licensed to operate 183 beds. Together with affiliates Advanced Primary Care Physicians and Lower Bucks Health Enterprises, Inc., Lower Bucks owns a 36-acre campus with several medical facilities. The Hospital's emergency room serves approximately 30,000 patients annually. For the fiscal year ending June 30, 2009, Lower Bucks had $114 million in consolidated revenues. The Hospital filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 10-10239) on Jan. 13, 2010. The Hospital's affiliates -- Lower Bucks Health Enterprises, Inc, and Advanced Primary Care Physicians also filed Chapter 11 petitions. Jeffrey C. Hampton, Esq., and Adam H. Isenberg, at Saul Ewing LLP, assist the Hospital in its restructuring effort. Donlin, Recano & Company, Inc., is the Hospital's claims and notice agent. The Debtors tapped Zelenkofske Axelrod LLC for the provision of tax preparation services. The Hospital estimated assets and liabilities at $50 million to $100 million . LPATH, INC: Enters Into Lease Agreement with Sorrento Science ------------------------------------------------------------- Lpath, Inc., and Sorrento Science Park, LLC, entered into a lease agreement for Lpath, Inc.'s new corporate headquarters in San Diego, California. The Lease term is 64 months commencing in July 2011. Monthly payments for the 11,960 square foot space will be $25,116, with annual escalations of up to 3%. The Company has one five-year renewal option under the Lease. The Company will vacate its current office space when the lease expires in July 2011. A full-text copy of the Lease is available for free at: http://is.gd/YF1ygC About Lpath, Inc. 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. 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. 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. LT 266: Stay Lifted for VASOS to Pursue NY Foreclosure Action ------------------------------------------------------------- Judge James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York lifted the automatic stay in the Chapter 11 cases of LT 266 Third Avenue and NK 266 Third Avenue LLC to allow VASOS LLC to exercise its rights in a civil action it filed in the Supreme Court County of New York. Prior to the Petition Date, VASOS, a secured creditor, filed the civil action to foreclose on its interest in the property located at 266-270 Third Avenue, in New York. LT 266 Third Avenue, LLC, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 11-11386) in Manhattan on March 29, 2011. Avrum J. Rosen, Esq., at The Law Offices of Avrum J. Rosen, PLLC, represents the Debtor. M. SLAVIN & SONS: 3 Brooklyn Properties Set for Auction June 16 --------------------------------------------------------------- Adrianne Pasquarelli at Crains New York reports that three Brooklyn properties belonging to M. Slavin & Sons are now up for sale. The sites, which are located in the Brownsville section and total around 37,000 square feet of building and land, will be auctioned off later this month as part of M. Slavin's Chapter 11 bankruptcy proceedings. The report says the first property, located at 31-39 Belmont Ave., boasts a nearly 8,000-square-foot building and 7,500 square feet of land. The second property, at 447 Rockaway Ave., has a 10,000- square-foot building and 17,000 square feet of land. Both properties have both refrigerated and retail space. A third parcel, at 97-99 Thatford Ave. and 120-122 Osborn St., consists of about 10,000 square feet of vacant land that is currently used as a parking lot. Richard Maltz, vice president of the real estate auction division at David R. Maltz & Co., the Plainview, N.Y.-based firm handling the auction proceedings, expects the properties to sell either individually or as a bundle to an investment firm which may use the sites for retail purposes such as apparel, grocery or professional services. He noted that most potential buyers will not specialize in food wholesaling, as M. Slavin did. The auction will take place on June 16 in Plainview. The suggested opening bid for all three sites is $700,000-a far cry from the property's $6.5 million pre-bankruptcy listing. About M. Slavin & Sons M. Slavin & Sons, Ltd., is a seafood vendor based in Bronx, New York. Founded in the early 1900s, the Company also operates a processing facility in Point Judith, Rhode Island. The Company delivers seafood, including whole fish, fillets, live shellfish and breaded, smoked, canned or frozen products, to more than 1,000 customers in the tri-state area. M. Slavin & Sons filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 11-10589) on Feb. 14, 2011. Gerard R. Luckman, Esq. at Silvermanacampora, LLP, in Jericho, New York, represents the Debtor. The Debtor estimated assets of $1 million to $10 million and debts of $10 million to $50 million as of the Chapter 11 filing. MADISON HOTEL: Sec. 341 Creditors' Meeting Set for June 30 ---------------------------------------------------------- The United States Trustee for Region 2 will convene a meeting of creditors pursuant to Sec. 341(a) of the Bankruptcy Code in the bankruptcy case of Madison Hotel, LLC, on June 30, 2011, at 2:30 p.m., 80 Broad St., 4th Floor, USTM. The Debtor's schedules of assets and liabilities and statement of financial affairs are due to be filed June 10. Madison Hotel, LLC, based in New York, filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 11-12560) on May 27, 2011. Judge Martin Glenn presides over the case. Mark A. Frankel, Esq., at Backenroth Frankel & Krinsky, LLP, serves as bankruptcy counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Benzion Suky, managing member of 62 Madison LLC, the Debtor's managing member. MAJESTIC CAPITAL: Section 341(a) Meeting of Creditors Tomorrow -------------------------------------------------------------- The U.S. Trustee for Region 2 will convene a meeting of creditors of Majestic Capital Ltd. fdba CRM Holdings Inc. on June 8, 2011, at 1:00 p.m., at Office of the United States Trustee, 355 Main Street in Poughkeepsie, New York. 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. MAJESTIC CAPITAL: Court Approves Day Seckler as Fin'l Advisors -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Majestic Capital, Ltd., et al., to employ Day Seckler, LLP, as accountants and financial advisors. Day Seckler will, among other things: -- assist the Debtors' legal counsel and other advisors in planning for the bankruptcy filing; and -- advise the Debtors' management team, as requested, with respect to communications with customers, vendors, employees, creditors and other parties in interest during the bankruptcy process. G. Wayne Day, a partner at Day Seckler, told the Court that his hourly rate is $350 and David Dannenburg's hourly rate is $250. Mr. Day added that Day Seckler received a $20,000 retainer for services rendered during the Chapter 11 cases. Day Seckler has received no other prepetition payments from the Debtors. Mr. Day assured the Court that Day Seckler is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. Michelman & Robinson, LLP, serves as the Debtors' special counsel. The Debtor disclosed $436,191,000 in assets and $421,757,000 in liabilities as of Dec. 31, 2010. MAJESTIC CAPITAL: Court Approves Genova & Malin as Local Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Majestic Capital, Ltd., et al., to employ Genova & Malin, Attorneys at Law, as local counsel. G&M will, among other things: -- coordinate and file of all necessary applications, motions, memoranda, orders reports and other legal pleadings; -- appear in Court and at various meetings in coordination with Murphy & King, Professional Corporation, to represent the interests of the Debtors; and -- perform of all other legal services for the Debtors in connection with these Chapter 11 cases. G&M will coordinate with M&K, as the Debtors' general bankruptcy counsel to avoid duplication of efforts. The hourly rates of G&M's personnel are: Partners $350 Associates $225 Legal Assistants $100 The Debtors related that G&M was provided with a $25,000 retainer for services G&M has agreed to provide the Debtors during the Chapter 11 Cases. G&M has received no other prepetition payments from the Debtors. To the best of the Debtors' knowledge, G&M is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtors are represented by: GENOVA & MALIN, ATTORNEYS AT LAW Thomas Genova, Esq. 1136 Route 9 Wappingers Falls, NY 12590-4905 Tel: (845) 298-1600 Fax: (845) 298-1265 MURPHY & KING, PROFESSIONAL CORPORATION Harold B. Murphy, Esq. Andrew G. Lizotte, Esq. One Beacon Street Boston, MA 02108 Tel: (617) 423-0400 Fax: (617) 556-8985 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. Michelman & Robinson, LLP, serves as the Debtors' special counsel. The Debtor disclosed $436,191,000 in assets and $421,757,000 in liabilities as of Dec. 31, 2010. MARONDA HOMES: Court OKs Manion McDonough as Bankruptcy Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Pennsylvania authorized Maronda Homes, Inc., to employ Manion McDonough & Lucas, P.C., as bankruptcy counsel. Manion McDonough is representing the Debtor in the Chapter 11 proceedings. As reported in the Troubled Company Reporter on April 25, 2011, the hourly rates of Manion McDonough personnels are: Joseph F. McDonough $435 James G. McLean $350 Associates $185 - $315 Paralegals $115 Joseph F. McDonough, Esq., a member at Manion McDonough, assured the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Maronda Homes Maronda Homes, Inc., based in Clinton, Pennsylvania, near Pittsburgh, builds homes in Florida, Pennsylvania, Georgia and Kentucky. It filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 11-22418) on April 18, 2011. Joseph F. McDonough, Esq., at Manion Mcdonough & Lucas, serves as the Debtor's bankruptcy counsel. The Company disclosed $83,784,549 in assets and $91,773,703 in liabilities. Affiliates Maronda Homes, Inc. of Ohio (Bankr. W.D. Pa. Case No. 11-22422) and Maronda Homes of Cincinnati, LLC (Bankr. W.D. Pa. Case No. 11-22424) simultaneously filed separate Chapter 11 petitions on April 18, 2011. The U.S. Trustee was unable to appoint an official committee of unsecured creditors in the Debtor's Chapter 11 case. MILLENNIUM REAL ESTATE: Case Summary & Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Millennium Real Estate Services, LLC 112 Nottingham Road Bedford Hills, NY 10507 Bankruptcy Case No.: 11-23103 Chapter 11 Petition Date: June 1, 2011 Court: U.S. Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Dawn K. Arnold, Esq. RATTET PASTERNAK, LLP 550 Mamaroneck Avenue Harrison, NY 10528 Tel: (914) 381-7400 Fax: (914) 381-7406 E-mail: darnold@rattetlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 10 largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/nysb11-23103.pdf The petition was signed by Peter Iovino, managing member. MP-TECH AMERICA: Committee Taps Johnson Barton as Counsel --------------------------------------------------------- The Official Committee of Unsecured Creditors of the Chapter 11 cases of MP-Tech America, LLC, asks the U.S. Bankruptcy Court for the Middle District of Alabama for permission to retain Johnson Barton Proctor & Rose LLP as its counsel. As the Committee's counsel, Johnson Barton will, among other things: (a) investigate, file, and prosecute litigation on behalf of the Committee; (b) represent the Committee at hearings and other pleadings; (c) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the of the Committee's interests and objectives; and (d) perform such other legal services as may be required and are deemed to be in the interests of the Committee in accordance with the Committee's powers and duties. Compensation will be payable to Johnson Barton on an hourly basis, plus reimbursement of actual, necessary expenses and other charges incurred by the firm. The standard hourly rates of its professionals are: Designations Hourly Rates ------------ ------------ Partners $235 - $450 Counsel $255 - $345 Associates $200 - $295 Legal Assistants $120 - $160 To the best of the Committee's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About MP-Tech America Cusseta, Alabama-based MP-Tech America, LLC, is the maker of parts for Kia Motors Corp. and Hyundai Motor Co. at their plants in Georgia and Alabama. It filed a Chapter 11 petition (Bankr. M.D. Ala. Case No. 11-30895) on April 8, 2011. The Debtor estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. The Debtor has a $15 million secured debt to Korea Development Bank. The Debtor has tapped Fritz Hughes & Hill LLC in Montgomery, Alabama, as co-counsel. NEOMEDIA TECHNOLOGIES: To Sell $450,000 Debenture to YA Global -------------------------------------------------------------- NeoMedia Technologies, Inc., entered into an Agreement to issue and sell a secured convertible debenture to YA Global Investments, L.P., in the principal amount of $450,000. The closing of the transaction was held on May 31, 2011. In addition to the Debenture, the Company also issued a warrant to the Buyer to purchase 1,000,000 shares of the Company's common stock, par value $0.001 per share, for an exercise price of $0.15 per share. The Debenture will mature on July 29, 2012, and will accrue interest at a rate equal to 14% per annum and that interest will be paid on the Maturity Date in cash or, provided that certain Equity Conditions are satisfied. At any time, the Buyer will be entitled to convert any portion of the outstanding and unpaid principal and accrued interest thereon into fully paid and non- assessable shares of Common Stock at a price equal to the lesser of $0.10 and 95% of the lowest volume weighted average price of the Common Stock during the 60 trading days immediately preceding each conversion date. The Debenture is secured by certain pledges made with respect to the assets of the Company and its subsidiaries as set forth in the Tenth Ratification Agreement dated May 31, 2011, and that certain Security Agreement and Patent Security Agreement both dated July 29, 2008, by and among the Company, each of the Company's subsidiaries made a party thereto, and the Buyer. In connection with the Agreement, the Company also entered into those certain Irrevocable Transfer Agent Instructions with the Buyer, an escrow agent and WorldWide Stock Transfer, LLC, the Company's transfer agent. The Company will not affect any conversion, and the Buyer will not have the right to convert any portion of the Debenture to the extent that after giving effect to such conversion, the Buyer would beneficially own in excess of 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to such conversion, except for not less than 65 days prior written notice from the Buyer. The Company will have the right to redeem a portion or all amounts outstanding in the Debenture via Optional Redemption by paying the amount equal to the principal amount being redeemed plus a redemption premium equal to 10% of the principal amount being redeemed, and accrued interest. About NeoMedia Technologies Atlanta, Ga.-based NeoMedia Technologies, Inc., provides mobile barcode scanning solutions. The Company's technology allows mobile devices with cameras to read 1D and 2D barcodes and provide "one click" access to mobile content. The Company reported a net income of $35.09 million on $1.52 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $67.38 million on $1.66 million of revenue during the prior year. The Company's balance sheet at March 31, 2011, showed $8.26 million in total assets, $79.42 million in total liabilities, all current, $7.52 million in Series C convertible preferred stock, $2.50 million in Series D convertible preferred stock, and a $81.18 million total shareholders' deficit. Kingery & Crouse, P.A, in Tampa, Fla., expressed substantial doubt about the Company's ability to continue as a going concern. The accounting firm noted that the Company has suffered recurring losses from operations and has ongoing requirements for additional capital investment. NEW ORIENTAL: Common Stock Delisted from Nasdaq ----------------------------------------------- The Nasdaq Stock Market, Inc., has determined to remove from listing the common stock of New Oriental Energy & Chemical Corp., effective at the opening of the trading session on June 13, 2011. Based on review of information provided by the Company, Nasdaq Staff determined that the Company no longer qualified for listing on the Exchange pursuant to Listing Rule 5550(b)(1). The Company was notified of the Staff's determination on Sept. 10, 2010. The Company appealed the determination to a Hearing Panel. Upon review of the information provided by the Company, the Panel issued a decision dated Dec. 14, 2010, granting the Company's continued listing because it had regained compliance with 5550(b)(1), but putting the Company on a Panel Monitor through Dec. 15, 2011, to ensure continued compliance. On March 11, 2011, the Staff notified the Company that its failure to pay fees was an additional basis for delisting pursuant to Listing Rule 5250(f), and gave the Company an opportunity to seek review with the Panel. However, the Company did not seek a review with the Panel within the applicable time frame. On March 22, 2011, the Panel issued a final delisting determination and notified the Company that trading in the Company's securities would be suspended on March 23, 2011. The Company did not request a review of the Panel's decision by the Nasdaq Listing and Hearing Review Council. The Listing Council did not call the matter for review. The Panel's determination to delist the Company became final on May 6, 2011. About New Oriental New Oriental Energy & Chemical Corp. (NASDAQ: NOEC) -- http://www.neworientalenergy.com/-- was incorporated in the State of Delaware on November 15, 2004. The Company is an emerging coal-based alternative fuels and specialty chemical manufacturer based in Henan Province, in the Peoples' Republic of China. The Company's core products are urea and other coal-based chemicals primarily utilized as fertilizers. All of the Company's sales are made through a network of distribution partners in the Peoples' Republic of China. The Company's balance sheet at Dec. 31, 2010, showed $54.3 million in total assets, $51.4 million in total liabilities, and stockholders' equity of $2.9 million. As reported in the Troubled Company Reporter on July 2, 2010, Weinberg & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern, following its results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company incurred a net loss of $12.8 million and has negative cash flows from operations of $7.5 million for the year ended March 31, 2010, and has a working capital deficit of $44.1 million at March 31, 2010. NLC UNITRUST: Hires Weir & Partners as Special Litigation Counsel ----------------------------------------------------------------- N.L.C. Unitrust Partners seeks permission from the U.S. Bankruptcy Court for the District of Delaware to employ Weir & Partners LLP as special litigation counsel to prosecute certain claims in certain litigation pending in the Court of Common Pleas of Philadelphia County. The State Court Litigation, generally, involves the prosecution of claims of fraud, breach of fiduciary duty and conversion against former officers, directors and control persons, and certain transferees of the Debtor and its wholly owned subsidiary Unicon Holding Inc. W &P's hourly rates range from $300 to $465 per hour for partners, from $185 to $285 per hour for associates, and from $125 to $140 for paralegals. The Debtor will also reimburse W&P for expenses it incurred or will incur. The Debtor believes that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Sedona, Arizona-based N.L.C. Unitrust Partners filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-14074) on Dec. 15, 2010. Ciardi Ciardi & Astin is retained as counsel to the Debtor. In its schedules, the Debtor disclosed $35,802,500 in assets and $4,780,000 in liabilities. NORTEL NETWORKS: Justice Agency Keeps Close Eye on Bidding Process ------------------------------------------------------------------ Joseph Deaux at The Street reports that the Justice Department is reportedly keeping a close eye on the bidding process for the massive amount of patents being offered up by bankrupt Nortel Networks later this month in an effort to stay ahead of any anti- competitive ramifications. According to The Wall Street Journal, the department's antitrust division was reviewing an opening bid of $900 milion from Google Inc. for the portfolio but added that no potential issues had surfaced as yet. Apple, Inc., may be another story, however, according to the article, which notes Steve Jobs & Co. are known to be sticklers about intellectual property. The WSJ said the Justice Department has "greater concerns" about Apple, and that the company has already been talking with the agency to address these concerns. About Nortel Networks Nortel Networks Inc. (OTC BB: NRTLQ) -- http://www.nortel.com/-- was once North America's largest communications equipment provider. It has sold most of the businesses while in bankruptcy. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009. Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. On May 28, 2009, at the request of the Administrators, the Commercial Court of Versailles, France ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in this Court for recognition of the English Proceedings as foreign main proceedings under chapter 15 of the Bankruptcy Code. Nortel Networks divested off key assets while in Chapter 11. So far, Nortel has raised $3.2 billion by selling its operations as it prepares to wind up a two-year liquidation due to insolvency. Nortel Networks has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. In June 2011, Nortel will auction off its remaining patent portfolio. Google Inc. is the lead bidder with a $900 million offer. NORTEL NETWORKS: Seeks to Employ Cassidy Turley as Broker --------------------------------------------------------- Nortel Networks Inc. and its affiliates ask permission from the U.S. Bankruptcy Court for the District of Delaware to employ Cassidy Turley CPS as broker for the Debtors in connection with the negotiation of the sublease of certain real property located in Santa Clara, California, nunc pro tunc to March 31, 2011. The Debtor proposed that Cassidy Turley be compensated pursuant to the proposed commission agreement. The Debtors assure the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Nortel Networks Nortel Networks Inc. (OTC BB: NRTLQ) -- http://www.nortel.com/-- was once North America's largest communications equipment provider. It has sold most of the businesses while in bankruptcy. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009. Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. On May 28, 2009, at the request of the Administrators, the Commercial Court of Versailles, France ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in this Court for recognition of the English Proceedings as foreign main proceedings under chapter 15 of the Bankruptcy Code. Nortel Networks divested off key assets while in Chapter 11. So far, Nortel has raised $3.2 billion by selling its operations as it prepares to wind up a two-year liquidation due to insolvency. Nortel Networks has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. In June 2011, Nortel will auction off its remaining patent portfolio. Google Inc. is the lead bidder with a $900 million offer. NORTEL NETWORKS: Wants Official Retiree Panel Established --------------------------------------------------------- Peg Brickley, writing for Dow Jones' Daily Bankruptcy Review, reports that Nortel Networks Corp. on Thursday asked the Bankruptcy Court to appoint an official retiree committee to negotiate over ending or modifying health-care benefits the company attempted to cut off last year. Nortel said it had spent $19 million on U.S. retiree and disability benefits since being thwarted by a July 2010 appeals court decision related to the bankruptcy case of car parts maker Visteon Corp. that said companies must talk to retirees before terminating their benefits. According to DBR, with costs running at about $2 million per month, Nortel wants to end "or modify" its retiree health care offerings and disability pay to staunch the flow of cash going out. DBR notes negotiating with an official panel is a required step under the appeals-court ruling. The Court will consider the request at a hearing for June 21. DBR notes the Pension Benefit Guaranty Corp. absorbs the pension plans of failed companies but doesn't guarantee full pay for retirees. The agency's limits mean many Nortel U.S. retirees will see their income slashed. According to DBR, court papers reflect claims from several Nortel executives for monthly pensions of $8,000 or more. The top monthly benefit the PBGC set for Nortel workers is $4,500. About Nortel Networks Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was once North America's largest communications equipment provider. It has sold most of the businesses while in bankruptcy. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009. Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. On May 28, 2009, at the request of the Administrators, the Commercial Court of Versailles, France ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in this Court for recognition of the English Proceedings as foreign main proceedings under chapter 15 of the Bankruptcy Code. Nortel Networks divested off key assets while in Chapter 11. In March 2009, the U.S. Bankruptcy Court entered an order approving the sale of the Layer 4-7 assets to Radware Ltd. as the successful bidder at auction. In July 2009, Nortel sold its CDMA and LTE-related assets to Telefonaktiebolaget LM Ericsson (Publ). In September 2009, the Court Nortel sold its Enterprise Solutions business to Avaya Inc. In October 2009, the Court approved the sale of assets associated with Nortel's Next Generation Packet Core network components to Hitachi, Ltd. On Dec. 2, 2009, the Court approved the sale of assets associated with Nortel's GSM/GSM-R business to Telefonaktiebolaget LM Ericsson (Publ) and Kapsch Carriercom AG. In December 2009, the Debtors sold their Metro Ethernet Networks business to Ciena Corporation. In March 2010, Nortel sold its Carrier Voice Over IP and Application Solutions business to GENBAND Inc. In September 2010, Nortel sold its Multi-Service Switch business to Ericsson. Nortel Networks filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. NURSERYMEN'S EXCHANGE: Selling Licensing Deals at July 13 Auction ----------------------------------------------------------------- Katy Stech, writing for Dow Jones' Daily Bankruptcy Review, reports that Nurserymen's Exchange Inc.'s licensing agreements with plant breeders and retailers are up for sale along with the rest of the 475-acre nursery's assets. The company is proposing to sell itself at a July 13 auction to pay off the debt that followed. Half Moon Bay, California-based Nurserymen's Exchange is a family- owned broker between plant growers and retail outlets. Founded in 1941, Nurserymen's has long been among the Coastside's biggest employers. Nurserymen's Exchange filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 11-31985) in San Francisco, California, on May 23, 2011. Stephen D. Finestone, Esq., in San Francisco, serves as counsel to the Debtor. Omni Management Group, LLC, is the claims and notice agent. C&A, Inc., serves as financial advisor. The Debtor disclosed $34,755,036 in assets and $24,772,945 in liabilities in its schedules. ON THE LEVEL: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: On The Level Construction & Excavation, Inc. 165 Forge Village Road Groton, MA 01450 Bankruptcy Case No.: 11-42362 Chapter 11 Petition Date: June 1, 2011 Court: United States Bankruptcy Court District of Massachusetts (Worcester) Judge: Melvin S. Hoffman Debtor's Counsel: John M. McAuliffe, Esq. MCAULIFFE & ASSOCIATES, P.C. 430 Lexington Street Newton, MA 02466 Tel: (617) 558-6889 E-mail: mcauliffeassociates@hotmail.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by James D. Bresnick, president. PACKET360 INC: Files Chapter 7 Liquidation ------------------------------------------ Louis Llovio at the Richmond Times-Dispatch reports that Packet360 Inc. has filed for Chapter 7 liquidation after abruptly shutting down and telling employees that they were losing their jobs. The Times-Dispatch relates that the company, once ranked 164 on the Inc. 500 list of the fastest-growing private companies in the U.S., estimated $1 to $50,000 in estimated assets and between $1 million and $10 million in estimated liabilities, according to its filing with the U.S. Bankruptcy Court in Richmond, Virginia. Earlier on May 31, the report says, Packet360 had a sign taped to the door of its offices on East Shore Drive off Nuckols Road that read "Notice: Packet360 is closed." The company's website also was down, the Times-Dispatch adds. A group of stunned, suddenly unemployed workers who gathered in the hall outside its offices on May 31 said they'd been notified by email Monday that the company was closing. They were not given a reason. Henrico County, Virginia-based Packet360 Inc. provides technology consulting and systems integration. The Company posted revenue growth of 1,148% from 2005 to 2008, according to Inc. magazine when the company made the list in 2009. The company had revenue of $25.6 million in 2008, an increase of 125% compared with 2007. It had about 50 employees in 2009. PARMALAT SPA: Bondi Wants Grant Thornton Cases Moved to Illinois ---------------------------------------------------------------- Parmalat Capital Finance Limited and Dr. Enrico Bondi, was appointed Extraordinary Commissioner in each of the Parmalat cases, ask the U.S. District Court for the Southern District of New York to abstain from hearing the two lawsuits filed against Grant Thornton International and Grant Thornton, LLP, among other defendants. Parmalat and Dr. Bondi also ask the District Court to remand the cases to the Cook County, Illinois state court where they were originally filed. To recall, the U.S. Court of Appeals for the Second Circuit remanded the cases to the District Court. The Appeals Court also vacated the District Court's order denying mandatory abstention under Section 1334(c)(2) of the Judiciary and Judicial Procedures. Specifically, the Appeals Court held that the impact of the state court proceedings on a securities class action is immaterial to the question of timely adjudication unless it would prolong the administration or liquidation of the foreign estates. The Appeals Court held that four factors come into play in evaluating timeliness: (1) the backlog of the state court's calendar relative to the federal court's calendar; (2) the complexity of the issues presented and the respective expertise of each forum; (3) the status of the title 11 bankruptcy proceeding to which the state law claims are related; and (4) whether the state court proceeding would prolong the administration or liquidation of the estate. Kathleen M. Sullivan, Esq., at Quinn Emanuel Urquhart & Sullivan LLP, in New York, in support of the request for abstention and remand, argues that each of the four factors points strongly toward a conclusion that the Illinois State Court will "timely adjudicate" the Grant Thornton cases, and, therefore, abstention is required. Ms. Sullivan contends that current statistics suggest that the Illinois courts might well act more expeditiously than their federal counterparts given that the case would be adjudicated by the Cook County, Illinois Commercial Calendar Section, whose calendar delivers quicker resolution of cases than do the courts outside of that Section in the General Law Division. She adds that the average duration of civil cases in the Illinois state courts is only minimally longer than in the New York District Court, where the Grant Thornton cases would be tried in the absence of abstention given its transfer under Section 1404(a) of the Judiciary and Judicial Procedures. Ms. Sullivan further argues that the complexity of the issues presented and the expertise of each forum clearly favors abstention because one of the key issues in this case -- the defense of in pari delicto -- is a matter of Illinois state law and there is some doubt as to the nature and reach of the defense. "Resolving unsettled issues of Illinois state agency and tort law is an essential threshold task in these cases that is far more clearly within the competence of the Illinois courts than the federal courts," Ms. Sullivan contends. Ms. Sullivan also asserts that the status of the related bankruptcy proceedings weighs strongly in favor of abstention because those proceedings were brought not in connection with any domestic reorganization or liquidation, but rather under Section 304 of the Bankruptcy Code for the limited purpose of protecting the foreign bankruptcy estates from U.S. suits. Abstention would not unduly prolong the administration or liquidation of the foreign estates, Ms. Sullivan notes. She adds that Old Parmalat successfully reorganized several years ago into New Parmalat, and, she points out, New Parmalat does not need the proceeds from the litigation to survive; any proceeds will be distributed according to a fixed procedure when received by New Parmalat, no matter when that occurs. Similarly, the Joint Official Liquidators in the Caymans are determining which claims to allow against the Parmalat estate, but the process will go forward whatever the outcome of PCFL's case against Grant Thornton, et al., and any proceeds from the case will be distributed to approve claimants no matter when that outcome is reached, Ms. Sullivan tells the Court. Grant Thornton Entities Object Parmalat and Dr. Bondi's continued argument for abstention should be rejected for what it is -- a blatant attempt to get a second bite at the apple, James L. Bernard, Esq., at Stroock & Stroock & Lavan LLP, in New York, argues, on behalf of the Grant Thornton Entities. "After more than five years of motion practice in this Court, Plaintiffs now hope to start over in Cook County," Mr. Bernard says. Mr. Bernard argues that the mandatory abstention provision is not designed to give litigants a do-over. He says Congress provided for mandatory abstention only where the case can be "timely adjudicated" in state court but under the analysis by the Appeals Court; that is not so here. The Appeals Court's decision begins by affirming that the New York District Court does, in fact, have jurisdiction over these cases, Mr. Bernard points out. It then turns to mandatory abstention, articulating factors that bear on how quickly the case can be adjudicated in state court relative to federal court and whether that pace is sufficiently swift, given the need for timely administration of the estate, he adds. Under this analysis, sending these cases to state court would be flatly inconsistent with the timely administration of the estates, Mr. Bernard contends. He argues that statistics show that litigation in Cook County is materially slower than in federal court and that problem is only magnified when the legal, factual, and "present tense" procedural posture of these cases is taken into account. Parmalat and Dr. Bondi's demand for abstention carries with it the promise that issues already resolved by the District Court will be relitigated before a judge with no previous expertise in the case, Mr. Bernard argues. Thus, no matter what one assumes about the outcome of the in pari delicto issue on appeal, these cases will almost certainly face unnecessary delay if they are remanded to state court, he further argues. Mr. Bernard relates that Parmalat and Dr. Bondi's only answer is to suggest that they are now indifferent to timely adjudication, given the late stage of their foreign bankruptcies, but that is inconsistent with their prior representations in the U.S. Courts. A disappointed litigant cannot invoke mandatory abstention merely by claiming indifference to the time it would take to litigate in state court, Mr. Bernard argues. For these reasons, the Grant Thornton Entities assert that the Court should refuse mandatory abstention and allow the cases to proceed in federal court. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court declared the units insolvent. On June 22, 2004, Dr. Bondi, on behalf of the Italian entities, sought protection from U.S. creditors by filing a petition under Sec. 304 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 04-14268). Parmalat's U.S. operations filed for Chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represented the U.S. Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Three special-purpose vehicles established by Parmalat S.p.A. -- Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. -- commenced separate winding up proceedings before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. were appointed liquidators in the cases. On Jan. 20, 2004, the Liquidators filed a Sec. 304 petition (Bankr. S.D.N.Y. Case No. 04-10362). Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represented the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presided over the Parmalat Debtors' U.S. cases and Sec. 304 cases. In 2007, Parmalat obtained a permanent injunction in the Sec. 304 cases. PARMALAT SPA: C Tanzi Jailed After Conviction in Market Abuse Case ------------------------------------------------------------------ Parmalat S.p.A. founder, Calisto Tanzi, was jailed in Parma, Italy on May 5 after an Italian court's May 4 definitive ruling in a market abuse case stemming from the dairy company's collapse in 2003, Bloomberg News reported, citing news agency Ansa. Mr. Tanzi's sentence was reduced to eight years from 10 years in prison, according to Bloomberg. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court declared the units insolvent. On June 22, 2004, Dr. Bondi, on behalf of the Italian entities, sought protection from U.S. creditors by filing a petition under Sec. 304 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 04-14268). Parmalat's U.S. operations filed for Chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represented the U.S. Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Three special-purpose vehicles established by Parmalat S.p.A. -- Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. -- commenced separate winding up proceedings before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. were appointed liquidators in the cases. On Jan. 20, 2004, the Liquidators filed a Sec. 304 petition (Bankr. S.D.N.Y. Case No. 04-10362). Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represented the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presided over the Parmalat Debtors' U.S. cases and Sec. 304 cases. In 2007, Parmalat obtained a permanent injunction in the Sec. 304 cases. PDPA INC: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------- Debtor: PDPA, Inc., a Corporation 269 Mountain Road West West Hartford, CT 06107 Bankruptcy Case No.: 11-21704 Chapter 11 Petition Date: June 2, 2011 Court: United States Bankruptcy Court District of Connecticut (Hartford) Judge: Albert S. Dabrowski Debtor's Counsel: Anthony S. Novak, Esq. LOBO & NOVAK, LLP 280 Adams Street Manchester, CT 06042-1975 Tel: (860) 645-0006 Fax: (860) 645-1110 E-mail: AnthonySNovak@aol.com Scheduled Assets: $2,000,000 Scheduled Debts: $4,439,539 A list of the Company's 16 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ctb11-21704.pdf The petition was signed by Ahmed A. Dadi, vice president. PETERSON LAW: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Petersen Law Group, a Law Corp 3334 East Coast Highway, #447 Corona Del Mar, CA 92625 Bankruptcy Case No.: 11-17849 Chapter 11 Petition Date: June 2, 2011 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: Daniel I. Barness, Esq. BARNESS & BARNESS LLP 11377 W Olympic Blvd, Ste.2000 Los Angeles, CA 90064 Tel: (310) 235-2463 Fax: (310) 235-2496 E-mail: daniel@barnesslaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb11-17849.pdf The petition was signed by Gregory G. Petersen, president. PHILADELPHIA RITTENHOUSE: Appeals Dismissal of Chapter 11 Case -------------------------------------------------------------- Philadelphia Rittenhouse Developer LP is appealing the decision by a bankruptcy judge dismissing its Chapter 11 proceedings and siding with lender iStar Financial Inc. As reported by the Troubled Company Reporter on May 30, 2011, Bankruptcy Judge Stephen Raslavich dismissed the Chapter 11 case of Philadelphia Rittenhouse Developer, at the behest of the Debtor's mortgagee, iStar Tara LLC. iStar sought dismissal of the Chapter 11 case for cause, including a lack of good faith, or, in the alternative, relief from the automatic stay. The Court held that the Debtor's Plan fails to provide adequate protection to iStar, either pre or post confirmation, and that the Plan is patently unconfirmable. The Debtor has no other source of funds, and that for want of adequate protection, stay relief in this single asset realty case is justified. The Court also denied a request by the Debtor for authority to use cash collateral. A copy of the Court's May 25, 2011 Opinion is available at http://is.gd/1yzoW2from Leagle.com. The Debtor timely filed a Proposed Plan of Reorganization on March 7, 2011, and filed an Amended Plan and Disclosure Statement shortly thereafter. According to the Court, the Amended Plan and Disclosure Statement are pending and, while dismissal and stay relief hearings are not typically intended to be turned into "mini-confirmation" hearings, the viability of the proposed plan had an overarching bearing on the merits of iStar's dismissal motion and the Debtor's cash collateral motion, such that its terms and its feasibility perforce figured prominently in the combined evidentiary hearing. The Plan calls for the Debtor to retain control of its project and sell unsold condominium units to third party purchasers over whatever period of time it takes to do so. This time period, sometimes referred to as the "absorption rate," has been variously estimated to be 3 to 4 years. The parties agree that iStar is an under-secured creditor, although they disagree both on the amount iStar is owed, as well as the degree to which the iStar indebtedness exceeds the value of its collateral. That said, the Debtor's plan, generally, contemplates that as units sell iStar will be paid from the sales proceeds an amount dependent on the size of the sold unit. Specifically, the plan calls for iStar to receive $517 per square foot on sales of residential units. The $517 figure is based on the proposition that the aggregate value of the property today is $140 million and that the iStar principal debt is $190 million. Broadly speaking, the $517 figure is the product of dividing an assumed value of the secured portion of iStar's claim into the gross square footage of all of the remaining unsold residential units. The Plan calls for iStar to release its mortgage lien on a unit upon its receipt of $517 per square foot. The balance of sales proceeds from each unit are to be deposited into a "Plan Fund," from which both the operating expenses of the Project and administrative expenses will be paid on a going forward basis. Excess sales proceeds over and beyond the foregoing are to be retained in the Plan Fund until the outcome of the pending State Court litigation, and any Bankruptcy Court litigation, against iStar. These litigations, say the Debtor, will determine the amount iStar is actually owed. Once that figure is fixed, then distributions from the Plan Fund are to be made to unsecured creditors, including iStar, if it is shown to hold an unsecured deficiency claim, and other unsecured creditors. To the extent of funds remaining after full payment of the aforesaid, DVREIF would be repaid its mezzanine loan. The Debtor estimates that the "sell- out" of the condominium units in the manner contemplated will generate net sales proceeds of $231 million, and that unsecured creditors will, as a consequence, receive 100% payment on their claims. The hearing to approve the Disclosure Statement was originally continued to June 16. In April, the Debtor won an extension of its exclusive plan filing period through June 30, and its exclusive solicitation period through July 31. A copy of the Debtor's Disclosure Statement explaining the Amended Plan is available at no charge at: http://bankrupt.com/misc/RITTENHOUSEAmendedDS.pdf iStar claims that the Debtor's plan is patently unconfirmable, citing, among others, the creditor classification scheme. The Plan classifies creditors into 5 classes and relegates interest holders to Class 6. iStar maintains that the Debtor will not be able to confirm the Plan because it will not have the acceptance of all creditor classes and that confirmation of the Plan will have to be sought by way of the "cram-down" provisions of Bankruptcy Code Sec. 1129(b). Under such circumstances, the Debtor must meet the requirements of Sec. 1129(a)(10), which provides that at least one class of claims impaired under the Plan has accepted the Plan, such determination to be made without including acceptance of the plan by any insider. iStar argues that none of the classes impaired under the terms of the Debtor's Plan can be relied on for this purpose. iStar also strongly argues that the construct of the Plan is fatally flawed to the extent it proposes to utilize portions of unit sales proceeds to fund operations and pay junior creditors before the full payment of iStar's secured claim. iStar characterizes this aspect of the Debtor's Plan as being an improper diversion of its collateral and an attempt to transform its fixed term construction loan into a revolving line of credit. iStar also argues that the Plan violates the absolute priority rule contained in Sec. 1129(b)(2)(B)(ii), because the proposed payment scheme contemplates that current equity interest holders will retain their equity interests and control of the Project during the years anticipated to sell-out the units, over the objection of senior classes who will not have had their claims satisfied on the effective date of the Plan. iStar further challenges the feasibility of the Plan. iStar contends that the Debtor's revenue and expense projections are materially inaccurate in virtually all respects. iStar argues that, even if one accepts the Debtor's revenue and expense projections, the net funds realized will fall far short of the amount needed to pay all creditor claims. iStar also argues that the case is separately subject to dismissal as having been commenced in bad faith. About Philadelphia Rittenhouse Philadelphia Rittenhouse Developer, L.P. is a joint venture between ARC Properties, Inc., based in Clifton, New Jersey, and Philadelphia-based Wheeler Brothers Holdings, LLC. The Company was formed to develop 10 Rittenhouse Square, a 33-story condominium building in Philadelphia. Rittenhouse filed for chapter 11 bankruptcy in response to an action in Pennsylvania state court seeking to appoint a receiver for the development project, which was brought by one of the Company's lenders, iStar Tara, LLC. Rittenhouse filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 10-31201) on Dec. 30, 2010. Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, P.C., serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $100 million to $500 million. iStar Tara, LLC is represented in the chapter 11 case by the firm of Blank Rome LLP. The U.S. Trustee appointed three members to the official committee of unsecured creditors in the case. PRADERAS DEL: Case Summary & 16 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Praderas Del Rio Flores Inc. P.O. Box 346 San German, PR 0068 Bankruptcy Case No.: 11-04776 Chapter 11 Petition Date: June 2, 2011 Court: U.S. Bankruptcy Court District of Puerto Rico (Ponce) Debtor's Counsel: Wigberto Lugo Mender, Esq. LUGO MENDER & CO Centro Internacional De Mercadeo Carr 165 Torre 1 Suite 501 Guaynabo, PR 00968 Tel: (787) 707-0404 E-mail: wlugo@lugomender.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 16 largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/prb11-04776.pdf The petition was signed by Pedro E. Llunch Martinez, president. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Las Lomas Construction S.E. 11-04774 06/02/11 PROLOGIS INC: Fitch Upgrades Credit Ratings Following Merger ------------------------------------------------------------ Following shareholder approval of the merger between ProLogis and AMB Property Corporation, Fitch Ratings has upgraded the credit ratings of ProLogis: ProLogis -- Issuer Default Rating (IDR) to 'BBB-' from 'BB+'; -- Global line of credit facility to 'BBB-' from 'BB+'; -- Senior notes to 'BBB-' from 'BB+'; -- Convertible senior notes to 'BBB-' from 'BB+'; -- Preferred stock to 'BB' from 'BB-'. Fitch has also removed ProLogis from Rating Watch Positive and withdrawn the IDR and global line of credit facility rating for ProLogis. The senior notes and convertible senior notes issued by ProLogis have been exchanged for corresponding notes of ProLogis, L.P. (formerly known as AMB Property, L.P.) and the preferred stock issued by ProLogis has been exchanged for corresponding preferred stock of ProLogis, Inc. (NYSE: PLD, formerly known as AMB Property Corporation). The withdrawn ratings on ProLogis reflect that this entity will no longer file financial statements with the Securities and Exchange Commission and that any outstanding bonds issued by ProLogis that were not exchanged will be held in an indirect subsidiary of ProLogis, L.P. The IDR and global line of credit facility rating for ProLogis are no longer considered by Fitch to be relevant to the agency's coverage. Fitch has also downgraded these credit ratings of ProLogis, Inc., ProLogis, L.P., and AMB Japan Finance Y.K. (collectively PLD), and removed them from Rating Watch Negative: ProLogis, Inc. (Formerly known as AMB Property Corporation) -- IDR to 'BBB-' from 'BBB'; -- Preferred stock to 'BB' from 'BB+'. ProLogis, L.P. (Formerly known as AMB Property, L.P.) -- IDR to 'BBB-' from 'BBB'; -- Bank credit facilities to 'BBB-' from 'BBB'; -- Senior unsecured notes to 'BBB-' from 'BBB'; AMB Japan Finance Y.K. -- Unsecured revolving credit facility to 'BBB-' from 'BBB'; -- Unsecured term loan to 'BBB-' from 'BBB'. The Rating Outlook is Stable. The 'BBB-' IDR reflects PLD's global industrial property enterprise with a broad tenant base and improving fixed charge coverage driven in part by organic rental income growth from build-to-suit land monetizations and general and administrative expense synergies. PLD also has a strong track record of accessing multiple sources of capital, a staggered debt maturity schedule, and consistent covenant protections for unsecured bondholders in light of the exchange of ProLogis notes for corresponding notes that will be obligations of ProLogis, L.P. Credit concerns include PLD's increased ownership in ProLogis European Properties (PEPR), which results in a transient weakening of liquidity prior to PEPR's recapitalization into a new fund. Even after an assumed recapitalization of PEPR, leverage is expected to remain somewhat high for the rating category. In addition, the company maintains an unencumbered asset coverage of unsecured debt ratio that is pressured by sizeable non-income producing land holdings and is low for the 'BBB-' IDR. PLD's platform is highly diversified in terms of geography and customers, limiting exposure to regional market pressures and individual tenant credit risk. The portfolio will span approximately 600 million square feet and will be comprised of $46 billion of assets under management ($20 billion in the wholly- owned portfolio), including 2,670 buildings in 22 countries in the Americas, Europe and Asia. The portfolio will provide significant economies of scale across major logistics markets. PLD will have limited exposure to any given tenant, as the largest customers include DHL at 2.6% of combined annualized base rent, Kuehne + Nagel at 1.2%, and Home Depot (IDR rated 'BBB+' with a Stable Outlook by Fitch) at 1.1%. Fitch projects that PLD's fixed charge coverage ratio (defined as recurring operating EBITDA including Fitch's estimate of recurring cash distributions from unconsolidated entities less recurring capital expenditures and straight-line rents divided by total interest incurred and preferred stock dividends) will be approximately 2.0 times (x) over the next two years. Factors positively impacting Fitch's base case fixed charge coverage include relatively flat same-store results in 2011 followed by low-single digit same-store growth in 2012. Other factors include incremental rent revenue from build-to-suit development, reduced general and administrative expenses of $80 million, and a lower cost of debt capital. For the trailing 12 months ended March 31, 2011, ProLogis' stand- alone fixed charge coverage ratio was 1.5x, up from 1.3x and 1.2x for full years 2010 and 2009, respectively. AMB's fixed charge coverage ratio was 2.0x for the trailing 12 months ended March 31, 2011, compared with 2.0x and 2.1x for full years 2010 and 2009, respectively. In a more adverse case than anticipated by Fitch over the next 12 to 24 months, a lack of significant general and administrative expense reductions would result in fixed charge coverage not reaching 2.0x, while if same-store NOI turns negative, coverage could approach 1.5x, which would be weak for the 'BBB-' IDR. PLD should benefit from strong access to capital and a staggered debt maturity schedule that should allow the company to address refinancings methodically. As of March 31, 2011 pro forma for the merger, PLD's combined consolidated debt maturity schedule has 5.9% of total debt maturing in 2011, followed by 17.5% in 2012 and 11% in 2013, with no single subsequent year exceeding 12% of total maturities. The combined company's fund debt maturities are also largely well distributed with consolidated and pro rata share of unconsolidated debt maturities of 6.3% of the total maturities as of March 31, 2011 and pro forma for the merger, followed by 15.5% in 2012 and 12.4% in 2013. Overall, Fitch views refinance risk as limited due to both AMB and ProLogis' track record of accessing multiple sources of capital throughout market cycles. The recent exchange of ProLogis notes for a corresponding series of notes of comparable terms with ProLogis, L.P. as obligor has multiple benefits to bondholders, including a single obligor for all legacy AMB Property, L.P. notes and ProLogis exchanged notes, a single reporting requirement, and aligned indentures, which will include a ProLogis, Inc. guarantee. Per the Form S-4 filed by AMB on May 3, 2011, the ProLogis notes will not be secured by any collateral following the exchange. Thus, PLD will be an unsecured borrower going forward; while AMB Property, L.P. was previously an unsecured borrower, ProLogis' senior creditors previously received the benefit of intercompany receivables as collateral. Interim results of the exchange offer announced on May 17, 2011 resulted in a like-kind exchange of 94.2% of the ProLogis notes. On May 18, 2011, PLD increased its ownership in PEPR, a Luxembourg closed-ended investment fund, to 89.6% of PEPR's ordinary units (currently 92%) and 94.6% of PEPR's preferred units for EUR615.5 million via the incurrence of borrowings under ProLogis' global line of credit and a EUR500 million bridge facility. PLD's leverage, measured as net debt to recurring operating EBITDA including Fitch's estimate of recurring cash distributions from unconsolidated entities, is expected to be in the mid-to-high 8.0x range following the recapitalization of PEPR. Fitch projects PLD's leverage to approach 8.0x over the next 12 to 24 months principally due to organic EBITDA growth via the stabilized portfolio and development as well as general and administrative expense reductions. In Fitch's downside scenario in which general and administrative expense synergies are not materially realized, leverage would exceed 9.0x, which would provide less cushion for the 'BBB-' rating. As of March 31, 2011, PLD's stand-alone leverage was 8.9x compared with 8.8x and 12.0x as of Dec. 31, 2010 and 2009, respectively. As of March 31, 2011, AMB's leverage was 9.0x compared with 9.0x and 8.5x as of Dec. 31, 2010 and Dec. 31, 2009, respectively. PLD is expected to have adequate liquidity after a recapitalization of PEPR. Sources of liquidity (unrestricted cash, availability under the company's contemplated $1.75 billion unsecured revolving credit facility after retaining a 20% interest in PEPR and projected retained cash flows from operating activities after dividends and distributions) divided by uses of liquidity (consolidated and pro rata fund debt maturities pro forma for a 20% interest in PEPR and projected recurring capital expenditures) result in a liquidity coverage ratio of 1.0x through year-end 2012. Moreover, liquidity coverage would be 1.6x if 90% of upcoming secured debt is refinanced, and AMB Japan Finance Y.K. has a credit facility with a borrowing limit of 45 billion Yen. As of March 31, 2011, PLD had a stand-alone liquidity coverage ratio of 0.9x for April 1, 2011 through Dec. 31, 2012. However, Fitch expects liquidity to weaken temporarily due to the increase in ownership of PEPR; as of March 31, 2011, AMB had a stand-alone liquidity coverage ratio of 1.0x for April 1, 2011 through Dec. 31, 2012. PLD's unencumbered asset base provides contingent liquidity, but unencumbered asset coverage is adversely impacted by sizeable land holdings. Fitch calculates that unencumbered asset coverage of unsecured debt (estimated 1Q'11 annualized unencumbered NOI divided by a capitalization rate of 7% to unsecured debt) was 1.7x; unencumbered asset coverage based on a stressed capitalization rate of 8% was 1.5x. On a gross book value basis that ascribes value to land, unencumbered asset coverage was 2.0x. As property fundamentals continue to improve, the combined entity continues to maintain a sizeable land portfolio that Fitch expects to be monetized gradually and be additive to unencumbered NOI. As of Dec. 31, 2010 and pro forma for the merger, PLD's land comprised 8.6% of total assets, compared with 9.1% as of Dec. 31, 2010 for AMB and 10.3% as for Dec. 31, 2010 for PLD. The improvement stems from positive purchase accounting estimated fair value adjustments to AMB's assets, as opposed to any meaningful land monetizations during first quarter-2011 (1Q'11). The Stable Outlook reflects Fitch's expectations that fixed charge coverage will remain at approximately 2.0x and leverage to remain in the 8.0x to 8.5x range over the next 12-24 months. The two-notch difference between PLD's IDR and preferred stock rating is consistent with Fitch's criteria for corporate entities with an IDR of 'BBB-.' Based on the criteria report, 'Equity Credit for Hybrids & Other Capital Securities,' PLD's preferred stock is 75% equity-like and 25% debt-like since it is perpetual and has no covenants but has a cumulative deferral option. The merger has resulted in 8.45% series C, 6.75% series F, and 6.75% series G preferred shares originally issued by ProLogis to be series Q, R, and S preferred shares of ProLogis, Inc., along with 6.5% series L, 6.75% series M, 7% series O, and 6.85% series P preferred stock originally issued by AMB Property Corporation. Fitch cites these factors as possibly resulting in positive momentum on the ratings and/or Outlook: -- Fixed charge coverage sustaining above 2.0x (fixed charge coverage ratio would be 1.6x as of Dec. 31, 2010 pro forma for initial merger synergies); -- Net debt to recurring operating EBITDA sustaining below 8.0x (leverage would be 8.6x as of Dec. 31, 2010 pro forma for initial merger synergies and a recapitalization of PEPR); -- Unencumbered asset coverage sustaining above 2.0x (unencumbered asset coverage would be 1.7x as of Dec. 31, 2010 pro forma for the merger and recapitalization of PEPR). Conversely, these factors may result in negative momentum on the ratings and/or outlook: -- An inability to recapitalize PEPR under its existing ownership structure via either a new fund or other form of de-levering equity raise; -- An inability to sustain a sustained liquidity coverage ratio of above 1.0x; -- Fixed charge coverage sustaining below 1.5x; -- Net debt to recurring operating EBITDA sustaining above 9.0x. AMB and ProLogis agreed to a merger through an agreement dated Jan. 30, 2011, which was subsequently amended March 9, 2011. The effective date of the merger is June 3, 2011. The corporate headquarters of ProLogis, Inc. is located in San Francisco, California and the operational headquarters of ProLogis, Inc. is located in Denver, Colorado. The portfolio is expected to consist of $46 billion of distribution facilities owned, managed or under development in 22 countries, and PLD is expected to have a pro forma equity market capitalization of $15.7 billion. PROLOGIS INC: S&P Lowers Rating on Preferred Securities to 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on ProLogis Inc. (formerly AMB Property Corp.) and ProLogis L.P. (formerly AMB Property L.P.) to 'BBB-' from 'BBB'. The outlook is stable. "At the same time, we lowered our issue-level rating on the company's senior notes to 'BBB-' from 'BBB' and preferred securities to 'BB' from 'BB+'. We removed all ratings on the company from CreditWatch, where we placed them with negative implications on Jan. 28, 2011," S&P stated. S&P continued, "We also assigned our 'BBB-' rating to new senior notes issued by ProLogis L.P. through an exchange offer for senior notes originally issued by legacy ProLogis. Additionally, we also assigned our 'BB' rating to three series of preferred stock issued by ProLogis Inc. in exchange for preferred securities originally issued by legacy ProLogis." "Concurrently, we affirmed ProLogis' 'BBB-' corporate credit rating and senior note rating (nonexchanged bonds). ProLogis will continue to operate as a wholly owned subsidiary of ProLogis Inc.," S&P related These actions affect roughly $7 billion of rated debt and preferred securities. "The downgrades of ProLogis Inc. and ProLogis L.P. reflects our view that certain credit metrics will remain weak but adequate for the 'BBB-' rating," said credit analyst George Skoufis. "The 'BBB- ' rating acknowledges that initially weak credit metrics and potential integration risk given the size of the merger are somewhat mitigated by our view of the company's adequate liquidity, well-laddered debt maturities, good access to capital, and the strategic benefits of the combination." "The stable outlook reflects our view that key credit ratios should not deteriorate from current levels and could improve over the next 12-18 months. The outlook also acknowledges the benefits of the company's combined operating platform, including scale and diversity, along with opportunities to improve portfolio performance if industrial demand continues to strengthen. A negative rating action could occur if operating performance is materially weaker than we expected or ProLogis pursues a more aggressive financial policy (such as debt financed speculative development) causing debt-to-EBITDA and fixed-charge coverage to weaken from current levels. We currently see this scenario as less likely. A positive rating action is possible if industrial fundamentals are better than we expected, resulting in strong cash flow growth. We also may upgrade the company if integration goes well and the company deleverages such that debt-to-EBITDA falls in the 7x-8x range and fixed-charge coverage improves to 2.2x or above (assuming pro-rata consolidation of off-balance-sheet investment activity)," S&P elaborated. QIMONDA AG: $11.75MM Settlement With G2 Technology Approved ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Qimonda North America Corp. received no objections to the proposed settlement where G2 Technology Inc. will pay $11.75 million for release of claims arising from an alleged breach of contract. Mr. Rochelle recounts that following the Chapter 11 filing in February 2009, Qimonda initiated an arbitration against G2, seeking $8.4 million. The creditors' committee took over and prosecuted the arbitration. The arbitrator awarded Qimonda the full amount sought plus pre-judgment interest. The total award worked out to $12.27 million. G2 agreed to settle and pay $11.75 million. About Qimonda AG Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading global memory supplier with a diversified DRAM product portfolio. The Company generated net sales of EUR1.79 billion in financial year 2008 and had -- prior to its announcement of a repositioning of its business -- approximately 12,200 employees worldwide, of which 1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond, Va. Qimonda AG commenced insolvency proceedings in a local court in Munich, Germany, on Jan. 23, 2009. On June 15, 2009, QAG filed a petition (Bankr. E.D. Va. Case No. 09-14766) for relief under Chapter 15 of the U.S. Bankruptcy Code. Qimonda North America Corp., an indirect and wholly owned subsidiary of QAG, is the North American sales and marketing subsidiary of QAG. QNA is also the parent company of Qimonda Richmond LLC. QNA and QR sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10589) on Feb. 20, 2009. Mark D. Collins, Esq., Michael J. Merchant, Esq., and Maris J. Finnegan, Esq., at Richards Layton & Finger PA, represent the Debtors. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed seven creditors to serve on an official committee of unsecured creditors. Jones Day and Ashby & Geddes represent the Committee. In its bankruptcy petition, Qimonda Richmond, LLC, estimated more than US$1 billion in assets and debts. The information, the Debtors said, was based on Qimonda Richmond's financial records which are maintained on a consolidated basis with Qimonda North America Corp. QUANTUM COMPUTER: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Quantum Computer Services, Inc. aka Digitrace Duplicating and Machine Works, Ltd Digitrace, Ltd 1167 142nd, ROUTE 1 Wayland, MI 49348 Bankruptcy Case No.: 11-06201 Chapter 11 Petition Date: June 2, 2011 Court: U.S. Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: James D. Gregg Debtor's Counsel: Perry G. Pastula, Esq. DUNN SCHOUTEN & SNOAP PC 2745 DeHoop Avenue SW Wyoming, MI 49509 Tel: (616) 538-6380 E-mail: bankruptcy@dunnsslaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Lawrence J. Schaidt III, president. QUANTUM FUEL: Amends 2.67MM Registration Statement -------------------------------------------------- Quantum Fuel Systems Technologies Worldwide, Inc., filed with the U.S. Securities and Exchange Commission Amendment No.1 to Form S-1 registration statement relating to resale by the selling stockholders of up to 2,672,040 shares of the Company's common stock, consisting of (i) 1,518,737 shares of common stock that were issued in a private placement that the Company closed on Feb. 18, 2011, and (ii) 1,153,303 shares of the Company's common stock issuable upon the exercise of warrants that were issued in the private placement. The Company is not selling any shares of common stock in this offering and, therefore, will not receive any proceeds from this offering. The Company will, however, receive proceeds from the exercise price of the warrants if and when these warrants are exercised by the selling stockholders for cash. The Company will bear all of the expenses and fees incurred in registering the shares offered by this prospectus. The Company's common stock is quoted on The Nasdaq Global Market. The Company's symbol is "QTWW." The last reported sale price of the Company's common stock on March 28, 2011, was $4.53 per share. The Company's warrants are not and will not be listed for trading on any exchange. A full-text copy of the amended prospectus is available for free at http://is.gd/UrLQrJ 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. RANCHO HOUSING: 341 Meeting on July 1; Status Hearing on July 19 ---------------------------------------------------------------- The United States Trustee for the Central District of California will convene a meeting of creditors pursuant to 11 U.S.C. Sec. 341(a) in the bankruptcy case of Rancho Housing Alliance, Inc., on July 1, 2011, at 2:30 p.m. at RM 200C, 3685 Main Street, 2nd Floor, in Riverside. Judge Scott C. Clarkson will hold a Status Conference hearing on July 19, 2011, at 1:30 p.m. at RM 126, 3420 Twelfth St., also in Riverside. The Debtor is set to file its schedules of assets and liabilities and statement of financial affairs on June 10. About Rancho Housing Alliance Based in Coachella, California, Rancho Housing Alliance, Inc., filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-27519) on May 27, 2011. Judge Scott C. Clarkson presides over the case. Michael B. Reynolds, Esq., at Snell & Wilmer LLP, serves as the Debtor's counsel. In its petition, the Debtor reported $10 million to $50 million in assets and debts. The petition was signed by Jeffrey A. Hays, executive director. RASER TECHNOLOGIES: Approved Loan Requires Plan by Sept. 30 ----------------------------------------------------------- Raser Technologies Inc. received final approval last week for a modified loan agreement providing $12.5 million in financing for the reorganization effort. The official creditors' committee dropped opposition to the loan in return for halting procedures where the business would have been sold quickly to secured lenders. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the DIP financing requires confirmation of a reorganization plan by Sept. 30. The lenders are given the right to buy the business with secured debt rather than cash, and the committee gave up the right to challenge the validity of secured claims. Raser had been seeking an auction July 25. Before the April 29 Chapter 11 filing, Raser reached agreement on a reorganization plan where Linden Advisors LP and Tenor Capital Management LP would acquire all the new stock for $19.7 million, including $2.5 million cash and the remainder by exchange for secured debt. Linden and Tenor are providing financing for the Chapter 11 case. They already own about half the $57.2 million owing on 8 percent convertible senior unsecured notes. 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. RASER TECHNOLOGIES: Unit Gets Notice of Default from Anaheim ------------------------------------------------------------ In a regulatory filing Friday, Raser Technologies Inc. discloses that on May 30, 2011, it received a copy of a notice from the City of Anaheim Public Utilities Department ("Anaheim") to Thermo No. BE-01, LLC ("Thermo"), claiming that its wholly owned subsidiary Thermo is a "Defaulting Party" as defined in its agreement with Thermo pursuant to which Anaheim purchases all of the electricity current produced at the Company's Thermo No. 1 geothermal project, and enumerating several alleged defaults by Thermo under the Agreement. The notice requests that Thermo respond, and Thermo plans to respond, to Anaheim's claims. On April 29, 2011, Thermo filed a voluntary Chapter 11 bankruptcy petition with the U.S. Bankruptcy Court for the District of Delaware as Case No. 11-11339. A copy of the notice from Anaheim is available at: http://is.gd/qezbdH The Company also received notification from the Financial Regulatory Authority (FINRA) that, by reason of its failure to file its report on Form 10-Q for the quarter ended March 31, 2011, due May 16, 2011, the Company, according to FINRA, is not current in its reporting obligations, and "pursuant to NASD Rule 6530, unless the delinquent filing is received and time stamped by the Commission's EDGAR system by 5:30 p.m. EST on 6/17/2011, the securities of the Company will not be eligible for quotation on the OTC Bulletin Board ("OTCBB") and, therefore, will be removed." As disclosed in the Company's current report on Form 8-K, filed May 16, 2011, during the pendency of the Company's Chapter 11 case, the Company intends to file the monthly operating reports otherwise required under the Bankruptcy Code in place of the periodic reports on Form 10-Q and Form 10-K required under the Securities Exchange Act of 1934, as amended (consistent with SEC Release No. 34-9660. and SEC Staff Legal Bulletin No. 2). Furthermore, as disclosed in the Company's current report on Form 8-K, filed May 3, 2011, it is contemplated that all existing equity in the Company, including common stock, options and warrants, will be canceled and will receive no property or other consideration under the plan of reorganization to be proposed by the Company. Accordingly, the Company does not intend to file the Form 10-Q for the quarter ended March 31, 2011. A copy of the notification from FINRA is available at: http://is.gd/GNVHbc 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. REOSTAR ENERGY: To File SEC Form 15 to Deregister Common Stock -------------------------------------------------------------- On June 1, 2011, the Board of Directors of ReoStar Energy Corporation unanimously voted to terminate the registration of the Company's common stock under the Securities and Exchange Act of 1934, as amended, and to suspend the Company's obligation to file reports under Section 15(d) of the Exchange Act. The Company is eligible to deregister by filing a Form 15 because it has fewer than 300 holders of record of its common stock. The Company plans to file a Form 15 with the Securities and Exchange Commission to effect the deregistration of its common stock on or about June 13, 2011. Upon the filing of the Form 15, the Company's obligations to file certain reports with the SEC, including Forms 10-K, 10-Q, and 8-K will immediately cease. The Company expects the deregistration to become effective ninety (90) days after filing the Form 15 with the SEC. About ReoStar Energy Fort Worth, Texas-based ReoStar Energy Corporation is engaged in the exploration, development and acquisition of oil and gas properties, primarily located in the state of Texas. The Company owns roughly 9,000 acres of leasehold, which include 5,000 acres of exploratory and developmental prospects as well as 4,000 acres of enhanced oil recovery prospects. The Company filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-47176) on Nov. 1, 2010. Bruce W. Akerly, Esq., and Arthur A. Stewart, Esq., at Cantey Hanger LLP, in Dallas, represent the Debtors in their restructuring efforts. Greenberg Taurig, LLP, serves as special corporate/securities counsel. Reostar Energy disclosed $15,335,337 in assets and $16,391,412 in liabilities. ReoStar Energy's bankruptcy case is jointly administered with ReoStar Gathering, Inc., ReoStar Leasing, Inc., and ReoStar Operating, Inc. ReoStar Energy is the lead case. No trustee was appointed in the Debtors' cases. On Jan. 10, 2011, Michael McConnell was appointed as Chapter 11 examiner in the Debtors cases. REVLON, INC: Eleven Directors Elected at Annual Meeting ------------------------------------------------------- Revlon, Inc., held its 2011 Annual Stockholders' Meeting at which the Company's stockholders: (i) approved the re-election of each of the 11 director nominees standing for re-election and named in the Company's proxy statement, dated April 19, 2011, to serve as directors until the next annual stockholders' meeting and until such directors' respective successors are elected and will have been qualified, consisting of: Ronald O. Perelman, Alan S. Bernikow, Paul J. Bohan, Alan T. Ennis, Meyer Feldberg, David L. Kennedy, Debra L. Lee, Tamara Mellon, Richard J. Santagati, Barry F. Schwartz and Kathi P. Seifert; (ii) ratified the selection by the Audit Committee of the Company's Board of Directors of KPMG LLP as the Company's independent registered public accounting firm for 2011; (iii) approved, on an advisory, non-binding basis, the Company's executive compensation and (iv) recommended, on an advisory, non-binding basis, that the Company conduct future "say- on-pay" votes every three years. About Revlon Inc. Headquartered in New York City, Revlon, Inc. (NYSE: REV) -- http://www.revloninc.com/-- is a worldwide cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirants/deodorants and personal care products company. The Company's brands, which are sold worldwide, include Revlon(R), Almay(R), Mitchum(R), Charlie(R), Gatineau(R), and Ultima II(R). The Company's balance sheet at March 31, 2011, showed $1.10 billion in total assets, $1.79 billion in total liabilities and a $686.50 million in total stockholders' deficiency. ROBERTS LAND: Files List of Two Largest Unsecured Creditors ----------------------------------------------------------- Roberts Land & Timber Investment Corp. filed a list of its Largest Unsecured Creditors on June 1, 2011: Creditor Nature of Claim Amount -------- --------------- ------ TAMCO Capital Trade debt $8,792 Corporation 4830 W. Kennedy Blvd., Suite 650 Tampa, FL 33609 Mercantile Bank Bank loan $500,000 Post Office Box 100201 Columbia, SC 29202 About Roberts Land Roberts Land & Timber Investment Corp. filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 11-03851) in Jacksonville, Florida, on May 25, 2011. Andrew J. Decker, III, Esq., at The Decker Law Firm, P.A., in Live Oak, Florida, serves as counsel to the Debtor. Affiliate Union Land & Timber Corp. also sought Chapter 11 protection (Case No. 11-03853). Roberts Land is a real estate developer in north Florida. In its schedules, the Debtor disclosed assets of $26.7 million with debt totaling $12.2 million, all secured. The principal properties are 1,500 acres in Baker County, Florida and 3,300 acres in Union County, Florida. ROBERTS LAND: Asks Court to Bar Lender From Going After Owners -------------------------------------------------------------- Roberts Land & Timber Investment Corp. commenced an adversary proceeding against Farm Credit of Florida, ACA, as successor by merger to Farm Credit of North Florida, ACA, seeking injunctive relief or the extension of the automatic stay to bar Farm Credit from exercising any of its available legal remedies against Avery C. Roberts or Twyla J. Roberts, who are guarantors of the loan obligations Roberts Land owed to Farm Credit. Avery and Twyla Roberts also mortgaged real property owned by them to secure Roberts Land's loan obligations. Roberts Land borrowed these funds from Farm Credit: Amount Note Date ------ ---- ---- $5,000,000 Variable Rate Note 01/06/2006 $2,000,000 Revolving Variable Rate Note 01/10/2006 $4,700,000 Fixed Rate Note 09/06/2006 $460,000 Non-revolving Variable 12/29/2008 Rate Note for Advance The Farm Credit loans are all cross-collateralized by various tracts of land owned by Roberts Land, affiliate Union Land, and Avery Roberts. Based on the most recent available appraisal reports for the tracts, Roberts Land said the value of Farm Credit's Collateral is $26.7 million. Roberts Land said it would suffer irreparable injury if the injunctive were not granted. Avery and Twyla Roberts provide financial support and security to the Debtor which the Debtor relies heavily upon to maintain its normal business operations. Without the financial support and security provided by them, the Debtor would suffer irreparable damage and harm and would no longer be able to maintain its business operations. Roberts Land said it is likely to achieve a successful reorganization and that it is proposing a Plan that will pay its creditors 100% of the scheduled or claim amounts. Avery Roberts is the sole director and shareholder of the Debtor and provides all of the operational oversight and management services to the Debtor as well as is the primary personal guarantor for all of the Debtor's debts. Mr. Avery Roberts also provides indirect financial support which is generated through income streams provided by several other affiliated entities he owns and controls. According to Roberts Land, if Mr. Roberts were required to seek the protection of the bankruptcy court for himself and the other entities he owns and manages, he would no longer be able to provide the much needed financial backing to the Debtor that is required for its business operations. As an immediate and direct consequence of a bankruptcy filing by Mr. Roberts, the lenders with respect to his affiliated entities such as R & E Environmental Services, Inc., R & E Site Development, Inc. and North Florida Reforestation Services, Inc. would regard his filing as an event of default that would result in increasing the interest rate charged on his loans and the termination or limitation of lines of credit he uses for operation purposes. Roberts Land also said a bankruptcy filing by Mr. Roberts would require him to provide compensation for his prospective Chapter 11 attorney that would have been earmarked to assist the Debtor in making its payments to creditors under the Plan of Reorganization for the Chapter 11 Case of Roberts Land. In addition, a Chapter 11 filing by Mr. Roberts personally would almost certainly result in the affiliated entities, R & E Environmental Services, Inc., R & E Site Development, Inc. and North Florida Reforestation Services, Inc., having credit lines and funding restricted causing them to file for Chapter 11 relief. The legal and administrative fees incurred directly by such additional debtor entities as well as the attorney's fees of the creditors of these entities which would ultimately be borne by Mr. Roberts would irreparably harm Roberts Land's ability to successfully reorganize and pay its creditors in full. Roberts Land also said the Roberts' Woodstock Industrial Site property in Baker County, which the Debtor proposes to convey in indubitable satisfaction of the debt owed to Farm Credit is an industrial site with highway, land use, railroad, infrastructure concurrency and entitlement features that provide it with a unique location and functionality as an "inland port." About Roberts Land Roberts Land & Timber Investment Corp. filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 11-03851) in Jacksonville, Florida, on May 25, 2011. Andrew J. Decker, III, Esq., at The Decker Law Firm, P.A., in Live Oak, Florida, serves as counsel to the Debtor. Affiliate Union Land & Timber Corp. also sought Chapter 11 protection (Case No. 11-03853). Roberts Land is a real estate developer in north Florida. In its schedules, the Debtor disclosed assets of $26.7 million with debt totaling $12.2 million, all secured. The principal properties are 1,500 acres in Baker County, Florida and 3,300 acres in Union County, Florida. ROSE IN BLOOM: Case Summary & 2 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Rose in Bloom, Inc. 7070 NW 81st Terrace Parkland, FL 33067 Bankruptcy Case No.: 11-25280 Chapter 11 Petition Date: June 1, 2011 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Raymond B. Ray Debtor's Counsel: Donna A. Bumgardner, Esq. BUMGARDNER & ASSOCIATES, P.A. 7707 N University Dr #103 Tamarac, FL 33321 Tel: (954) 724-4366 E-mail: donnabkclaw@aol.com Scheduled Assets: $3,460,651 Scheduled Debts: $1,132,600 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flsb11-25280.pdf The petition was signed by Alta Locke, president. SADDLEWOOD APARTMENTS: Case Summary & 18 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Saddlewood Apartments Phase I, LLC 18851 W. 153rd CT Olathe, KS 66062 Bankruptcy Case No.: 11-21663 Chapter 11 Petition Date: June 1, 2011 Court: United States Bankruptcy Court District of Kansas (Kansas City) Judge: Dale L. Somers Debtor's Counsel: Jeffrey A. Deines, Esq. LENTZ CLARK DEINES PA 9260 Glenwood Overland Park, KS 66212 Tel: (913) 648-0600 Fax: (913) 648-0664 E-mail: jdeines@lcdlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 18 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ksb11-21663.pdf The petition was signed by Robert J. Crow, managing member. SBARRO INC: Moody's Assigns'Ba2' Rating to $35-Mil. DIP Facility ---------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to the $35 million super priority senior secured delayed draw new money term loan (DIP Facility) of Sbarro, Inc. (Sbarro) as Debtor-in-Possession (DIP). The DIP Facility matures on October 4, 2011, with a three month extension at the option of the company. RATINGS RATIONALE The ratings reflect the size of the aggregate DIP Facility versus an estimated recovery value under either a going concern or liquidation scenario. Other key considerations include the structural features of the DIP facility, the nature of the bankruptcy and reorganization, and the DIP size as a percentage of pre-petition debt. Moody's withdrew all previous ratings for Sbarro in April 2011 following its bankruptcy filing. The rating on the DIP Facility is being assigned on a "point-in-time" basis and will not be monitored going forward. There is no outlook assigned to the rating. Ratings assigned: - Ba2 rating on the $35 million super priority senior secured delayed draw term loan of Sbarro, Inc. as Debtor-in-Possession Several factors led to Sbarro's declining operating performance and subsequent Chapter 11 filing, including an erosion in brand perception over the past few years, intense competition, high operating costs, commodity inflation, weak consumer spending and lower mall traffic. Meanwhile, debt levels and interest expense associated with the 2007 purchase of the company by private equity firm MidOcean Partners, LLC were high and unsustainable. The company was unable to comply with the minimum EBITDA financial covenant at the end of 2010, and had decided to miss its February 2, 2011 interest payment on its senior notes in an effort to preserve liquidity. The company filed for Chapter 11 bankruptcy on April 4, 2011. Although Sbarro has yet to formulate a definitive reorganization plan, the bankruptcy process should, at a minimum, enable the company to reduce debt and interest expense to more manageable levels. There is also the potential for reduced costs by closing unprofitable stores and renegotiating unfavorable leases. As reported by Sbarro, it is pursuing a possible sale of the company which could alter and/or delay filing a plan of reorganization. In Moody's opinion, Sbarro must overcome numerous challenges in order to successfully complete a restructuring and exit from Chapter 11 bankruptcy over the term of the DIP Facility. The extended period of underperformance has resulted in brand erosion which may be difficult to reverse over the near term. Moody's expects Sbarro to be cash flow negative through the term of the DIP Facility. As a result, the primary source of liquidity during the next six months will be balance sheet cash and cash provided by the DIP Facility. Given the seasonality of Sbarro's cash flow, the company could find itself with the need to seek additional financing should the bankruptcy process extend well into the fourth quarter of 2011. Like many restaurants, Sbarro's business model results in a relatively low level of tangible asset value. The use of operating leases limits real estate ownership, while the value of inventories is limited by its perishable nature. Customer use of either cash or credit cards as their primary source of payment limits receivables to relatively low levels. However, when combined with a conservative valuation of Sbarro's brand name, Moody's believes that these assets would be sufficient to cover the $35 million DIP Facility. Moody's also evaluated the possible coverage of the DIP Facility using a conservative valuation of Sbarro's enterprise value, and believes the valuation would also be sufficient to cover the size of the DIP Facility. Sbarro's DIP Facility is guaranteed by all domestic operating subsidiaries, and is secured by a super priority first lien on substantially all assets of the company and guarantor subsidiaries, including all deposit accounts, working capital, intangibles, intellectual property and equipment. The DIP Facility also received first priority priming liens on all assets securing pre-petition debt. The facility contains two financial covenants - - a cumulative cash flow test and limitation of capital expenditures. The principal methodology used in rating Sbarro's DIP credit facility was Moody's Debtor-In-Possession Lending rating methodology, March 2009, which can be found at www.moodys.com in the Credit Policy and Methodologies directory. Sbarro, Inc. (Sbarro) headquartered in Melville, NY, is a quick service restaurant (QSR) operator that serves Italian specialty foods, with 472 company-owned restaurants and 555 franchised. Annual revenues are approximately $340 million. SHAW FAMILY: Case Summary & 11 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Shaw Family Archives, Ltd. 143 Independence Avenue Tappan, NY 10983 Bankruptcy Case No.: 11-23099 Chapter 11 Petition Date: June 1, 2011 Court: U.S. Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Lawrence F. Morrison, Esq. THE MORRISON LAW OFFICES PC 140 East 45th Street, 18th Floor New York, NY 10017 Tel: (212) 655-3582 Fax: (646) 390-5095 E-mail: morrlaw@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 11 largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/nysb11-23099.pdf The petition was signed by Edith Marcus, president. SINCLAIR BROADCAST: Eight Directors Elected at Annual Meeting ------------------------------------------------------------- The annual meeting of shareholders of Sinclair Broadcast Group, Inc., was held on June 2, 2011. At the meeting, four items were submitted to the shareholders for a vote. The shareholders elected eight persons nominated for directors for a term expiring at the next annual shareholders meeting in 2012 or until their respective successors have been elected and qualified: (1) David D. Smith (2) Frederick G. Smith (3) J. Duncan Smith (4) Robert E. Smith (5) Basil A. Thomas (6) Lawrence E. McCanna (7) Daniel C. Keith (8) Martin R. Leader The shareholders ratified the appointment of PricewaterhouseCoopers, LLP, as the Company's independent auditors for the fiscal year ended Dec. 31, 2011. The shareholders approved by a non-binding advisory vote the Company's executive compensation. The shareholders approved by a non-binding advisory vote a triennial advisory vote on the Company's executive compensation. 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. SIVEC SRL: Chapter 15 Case Summary ---------------------------------- Chapter 15 Debtor: SIVEC Srl as successor in Liquidation to Sirz Srl c/o Gabriele Bordin Via N. Tommaseo No. 8/A 35131 Padua, Italy Chapter 15 Case No.: 11-80799 Type of Business: The company is into manufacturing. Chapter 15 Petition Date: June 2, 2011 Court: Eastern District of Oklahoma (Okmulgee) Judge: Tom R. Cornish Chapter 15 Petitioner's Counsel: Thomas E. Steichen, Esq. ELDRIDGE COOPER STEICHEN et al 111 West 7th Street Tulsa, OK 74103-4287 Tel: (918) 388-5562 Fax: (918) 388-5654 E-mail: tsteichen@ecslok.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 SMURFIT-STONE: RockTenn to Close Three Container Facilities ----------------------------------------------------------- Kathie Dickerson at Coshocton Tribune notes that RockTenn Co. said it will close three container plants to eliminate redundancy. These plants produce corrugated containers. The closures do not affect the local plant, 500 N. Fourth St., in Coshocton, which produces paperboard used in the manufacturing of corrugated containers. RockTenn completed its $3.5 billion acquisition of Smurfit-Stone Container Corp. this past week. About Smurfit-Stone Smurfit-Stone Container Corp. -- http://www.smurfit-stone.com/-- is one of the leading integrated manufacturers of paperboard and paper-based packaging in North America and one of the world's largest paper recyclers. The Company operates 162 manufacturing facilities that are primarily located in the United States and Canada. The Company also owns roughly one million acres of timberland in Canada and operates wood harvesting facilities in Canada and the United States. The Company employs roughly 21,250 employees, 17,400 of which are based in the United States. For the quarterly period ended September 30, 2008, the Company reported roughly US$7.450 billion in total assets and US$5.582 billion in total liabilities on a consolidated basis. Smurfit-Stone and its U.S. and Canadian subsidiaries filed for Chapter 11 protection on January 26, 2009 (Bankr. D. Del. Lead Case No. 09-10235). Certain of the company's affiliates, including Smurfit-Stone Container Canada Inc., a wholly owned subsidiary of SSCE, and certain of its affiliates, filed to reorganize under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice in Canada. Smurfit-Stone joined pulp- and paper-related bankruptcies as rising Internet use hurts magazines and newspapers. Corporacion Durango SAB, Mexico's largest papermaker, sought U.S. bankruptcy in October. Quebecor World Inc., a magazine printer and Pope & Talbot Inc., a pulp-mill operator, also sought cross-border bankruptcies for their operations in the U.S. and Canada. James F. Conlan, Esq., Matthew A. Clemente, Esq., Dennis M. Twomey, Esq., and Bojan Guzina, Esq., at Sidley Austin LLP, in Chicago, Illinois; and Robert S. Brady, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor in Wilmington, Delaware, served as the Debtors' bankruptcy counsel. PricewaterhouseCoopers LLC, served as the Debtors' financial and investment consultants. Lazard Freres & Co. LLC served as the Debtors' investment bankers. Epiq Bankruptcy Solutions LLC acted as the Debtors' notice and claims agent. The Company's Plan of Reorganization, which was confirmed by the U.S. Bankruptcy Court on June 21, 2010, and recognized by a Canadian court order, became effective July 1, 2010. The Plan provides that 2.25% of the new Smurfit-Stone common stock pool will be distributed pro rata to the Company's previous preferred stockholders and 2.25% of the New Smurfit-Stone common stock pool will be distributed pro rata to the Company's previous common stockholders. SONRISA REALTY: Bank's $5 Mil. Wins Auction for Property -------------------------------------------------------- Laura Elder at the Galveston Daily News reports that Compass Bank was the highest bidder at an auction for about 95 acres of prime League City land, including 35 acres where Tanger Factory Outlets had considered building a 95-store outlet mall. According to the report, Compass Bank bid $5 million for the 95 contiguous acres west of Interstate 45 and north of FM 646. The land belonged to Sonrisa Realty GP LLC, whose principal was League City developer RandalHall. Tanger announced plans to build the mall in January. But the transaction was complicated. Compass Bank sued Sonrisa Realty and affiliated entities for a defaulted $8.2 million loan. About Sonrisa Properties Sonrisa Properties, Ltd., and Sonrisa Realty Partners, Ltd., each of which is a single asset real estate entity, own unimproved real property located in League City, Texas. Sonrisa Properties filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 10-80012) on Jan. 4, 2010, to stop Compass Bank, the largest secured creditor, from foreclosing on the property. Sonrisa Realty Partners also filed for Chapter 11 protection (Bankr. S.D. Tex. Case No. 10-30084) on the same day. The two cases are not jointly administered. Karen R. Emmott, Esq., in Houston, Texas, represents both Debtors. Sonrisa Properties disclosed $21,098,818 in assets and $8,420,540 in liabilities as of the Petition Date. Sonrisa Realty Partners estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. In February 2010, the Sonrisa Realty Partners case was transferred to the Galveston Division (Bankr. S.D. Tex. Case No. 10-80026). SOUTH LOUISIANA: Will Accept Bids for Ethanol Plant Until June 9 ---------------------------------------------------------------- Holly Jessen at Ethanol Producer Magazine reports that South Louisiana Ethanol LLC placed its ethanol plant, which built in the late '80s and upgraded to 66 Mmgy, on the auction block. According to the report, the bankruptcy auction will have two phases. First, sealed bids will be accepted until June 9, 2011. Those bids can be for the entire package, everything from the land, facility and equipment, or for just the real estate minus certain pieces of equipment, said Bruce Schneider, president of St. Louis, Mo.-based Schneider Industries. He added that the location could also be purchased by another industry other than ethanol, such as bulk liquid storage, oil and gas storage or an agricultural company. After the June 9 date, the bank and the bankruptcy court will decide whether to accept the high bid. If no bids are received or accepted, an open public auction will be held June 30 and everything will be sold off piece by piece, according to Ethanol Producer. About South Louisiana Ethanol South Louisiana Ethanol LLC is the owner of a non-operating ethanol plant in Belle Chasse, Louisiana. South Louisiana purchased the non-operating plant in 2006 with plans for rebuilding. When financing fell through, it shut down the construction project in September 2007. The Company filed for Chapter 11 on (Bankr. E.D. La. Case No. 09-12676) on Aug. 25, 2009. Emile L. Turner Jr., Esq., represents the Debtor in its restructuring effort. In its petition, the Debtor estimated $10 million to $50 million in assets and $50 million to $100 million in debts. SOUTH PADRE: Court Approves Tim Schultz as Accountant ----------------------------------------------------- Bankruptcy Judge Richard s. Schmidt of the U.S. Bankruptcy Court of Southern District of Texas has approved the retention and employment of Tim Schultz, P.C. as bankruptcy accountant. South Padre Investment tapped the firm to provide accounting services in connection with its Chapter 11 plan. These services include preparing financial statements to form the basis of the plan and to assist South Padre Investment's management in funding the plan and distributing payments to creditors. Tim Schultz PC will also conduct preliminary survey of South Padre Investment's books of account as well as prepare its income tax returns. Among the firm's professionals who is anticipated to provide the services include Tom Burt and his associates, John Millice and Julie Smith. South Padre Investment proposed to pay Mr. Burt $195 per hour for his services. Meanwhile, Mr. Millice and Ms. Smith will be paid at an hourly rate of $125 and $100, respectively. In an affidavit, Tim Schultz disclosed that it does not represent any interest adverse to South Padre Investment and its estate. South Padre Investment, LP, filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 11-20056) on Jan. 29, 2011 in Corpus Christi, Texas. Judge Richard S. Schmidt presides over the case. James S. Wilkins, Esq., at WILLIS & WILKINS, serves as bankruptcy counsel to the Debtor. The Debtor disclosed $14,743,370 in assets and $9,077,613 in liabilities. SUNVALLEY SOLAR: Inks $1.56MM Photovoltaic Contract with Diamond ---------------------------------------------------------------- Sunvally Solar, Inc., entered into a Photovoltaic System Contract with Diamond Wipes Int'l, Inc., of Chino, California. Under the Contract, the Company has been engaged to install a 336,000 kW photovoltaic solar power system for an estimated total price of $1,562,400 to be paid as follows: -- 5% down payment of $78,120, with $28,120 due upon signature of the Contract, $20,000 due two months after signature of the Contract, and $30,000 due when the system is placed into service; -- A lump sum payment of $468,720 to be paid within five business days after the customer receives an anticipated cash grant for the project from the U.S. Treasury Department; -- A stream of monthly payments estimated to total $394,434. These monthly payments will commence when the customer begins to receive incentive payments related to the project from Southern California Edison. The actual monthly payments will be equal to the monthly incentive payments received by the customer. -- A stream of monthly payments totaling $621,126, to be paid in 84 equal installments of $7,394.36, with payments to begin within five days after the system is approved by the local utility company. In addition, the Company has agreed to provide certain warranties to the customer regarding workmanship, minimum nominal power outputs of the system, and other matters. The Company expects to begin work on the system in July of 2011. A full-text copy of the Photovoltaic System Contract is available for free at http://is.gd/Xki9eu About Sunvally Solar Sunvalley Solar, Inc., is a California-based solar power technology and system integration company. Since the inception of its business in 2007, the company has focused on developing its expertise and proprietary technology to install residential, commercial and governmental solar power systems. The Company's balance sheet at March 31, 2011, showed $3.11 million in total assets, $3.25 million in total liabilities, and a stockholders' deficit of $137,028. As reported in the TCR on April 8, 2011, Sadler, Gibb and Associates, LLC, in Salt Lake City, Utah, expressed substantial doubt about Sunvalley Solar's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company had losses from operations of $375,839 and accumulated deficit of $958,924. SWISS CHALET: Asks Court to OK Hiring of Cuprill Law Firm --------------------------------------------------------- Swiss Chalet Inc. seeks Bankruptcy Court permission to employ Charles A. Cuprill, P.S.C. Law Offices as its bankruptcy counsel. The Debtor has paid the firm a $92,500 retainer. The firm's hourly rates are: Charles A. Cuprill-Herndandez, Esq. $350 per hour Associates $225 per hour Paralegals $75 per hour Mr. Cuprill attests that his firm is a disinterested person as defined in 11 U.S.C. Section 101(14). About Swiss Chalet The Swiss Chalet Inc., which owns the Best Western Hotel Pierre in San Juan, Puerto Rico, filed a Chapter 11 petition (Bankr. D. P.R. Case No. 11-04414) on May 27, 2011. CPA Luis R. Carrasquillo & Co. is the financial consultant. In its Schedules, the Debtor disclosed total assets of $118,521,510 and total debts of $132,741,094. The petition was signed by Arnold Benus, director. SWISS CHALET: Seeks to Hire Carrasquillo as Fin'l Consultants ------------------------------------------------------------- Swiss Chalet Inc. said it is in need of a financial consultant to assist it in the financial restructuring of its affairs by providing advice in strategic planning, preparing a plan of reorganization and disclosure statement, determining the Debtor's assets, and participating in the Debtor's negotiations with creditors and parties in interest. In this regard, the Debtor asked the Court to approve its hiring of CPA Luis R. Carrasquillo & Co., P.S.C. The Debtor has made a $50,000 advanced payment to the firm. Mr. Carrasquillo and the members of the accounting firm are disinterested as defined in 11 U.S.C. Section 101(14). The firm may be reached at: Luis R. Carrasquillo Ruiz CPA Luis R. Carrasquillo & Co., P.S.C. 28th Street, #TI-26 Turabo Gardens Avenue Caguas, Puerto Rico 00725 Tel: (787) 746-4555 (787) 746-4556 Fax: (787) 746-4564 E-mail: luis@cpacarrasquillo.com About Swiss Chalet The Swiss Chalet Inc., which owns the Best Western Hotel Pierre in San Juan, Puerto Rico, filed a Chapter 11 petition (Bankr. D. P.R. Case No. 11-04414) on May 27, 2011. Charles A. Cuprill, P.S.C. Law Offices serves as its bankruptcy counsel. In its Schedules, the Debtor disclosed total assets of $118,521,510 and total debts of $132,741,094. The petition was signed by Arnold Benus, director. SWISS CHALET: Sec. 341(a) Creditors' Meeting Set for June 30 ------------------------------------------------------------ Monsita Lecaroz Arribas of the Office of the U.S. Trustee in San Juan, Puerto Rico, will convene a meeting of creditors under Sec. 341(a) of the Bankruptcy Code in the bankruptcy case of Swiss Chalet Inc., on June 30, 2011, at 2:00 p.m. at 341 Meeting Room, Ochoa Building, 500 Tanca Street, First Floor, in San Juan. The last day to oppose discharge or dischargeability is Aug. 29, 2011. Proofs of claim are due by Sept. 28, 2011. Government proofs of claim are due by Nov. 28, 2011. About Swiss Chalet The Swiss Chalet Inc., which owns the Best Western Hotel Pierre in San Juan, Puerto Rico, filed a Chapter 11 petition (Bankr. D. P.R. Case No. 11-04414) on May 27, 2011. Charles A. Cuprill, P.S.C. Law Offices serves as its bankruptcy counsel. CPA Luis R. Carrasquillo & Co., P.S.C., serves as its financial consultants. In its Schedules, the Debtor disclosed total assets of $118,521,510 and total debts of $132,741,094. The petition was signed by Arnold Benus, director. SYNAGRO TECHNOLOGIES: S&P Raises CCR to 'B-'; Outlook is Stable --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on organic residuals and biosolids services provider Synagro Technologies Inc. by one notch to 'B-' from 'CCC+'. The rating outlook is stable. At the same time, Standard & Poor's raised its ratings on Synagro's senior secured and second-lien debt issues by one notch. Standard & Poor's also lowered its recovery ratings on the company's first-lien facilities to '4' from '3' following a reassessment of recovery prospects in a default scenario. The '4' recovery rating for the first-lien lenders indicates the expectation of average recovery (30%-50%) in the event of a payment default. The ratings on Houston-based Synagro Technologies Inc. reflect the company's highly leveraged financial risk profile, marked by high debt and weak cash flow protection measures. Although the essential nature of its services and the high percentage of sales under long-term contracts provide stability to the top line, Synagro derives more than 90% of its revenues from municipalities, which still face budgetary pressures. Given this backdrop, Standard & Poor's believes Synagro's volumes and pricing could continue to be weak. "However, through recent debt repurchases and improved operating profitability, the company has improved liquidity and increased the level of headroom under its financial covenants, providing incremental flexibility to cope with the economic environment," said Standard & Poor's credit analyst James Siahaan. Synagro, which has annual revenues of about $280 million, manages the organic, nonhazardous biosolids generated by water and wastewater treatment facilities. (Materials that meet government regulations for beneficial reuse are referred to as biosolids.) Its size and scope of operations are limited to wastewater residuals management, though the company is a leading national provider in its market. "Until the company expands the business model or introduces new services, its somewhat high customer concentration will remain a weakness," Mr. Siahaan said. In addition, Synagro's operations are subject to Part 503 regulations under the federal Clean Water Act, and any changes to environmental laws concerning wastewater residuals treatment could lead to additional costs for the company. Although Synagro's weak performance in the first quarter underscores some uncertainty regarding the consistency or reliability of the earnings stream, Standard & Poor's expects the company's operating performance to improve in subsequent quarters as the company attempts to replace the revenues and income associated with a lost contract. TASTY BAKING: Suspending Filing of Reports with SEC --------------------------------------------------- Tasty Baking Company filed a Form 15 notifying the Securities and Exchange Commission of the suspension of its duty under Section 15(d) to file reports with respect to its common stock, $.50 par value per share. As of June 3, 2011, there was only one holder of record of the common shares. About Tasty Baking Company Tasty Baking Company (NasdaqGM: TSTY) -- http://www.tastykake.com/ -- founded in 1914 and headquartered in Philadelphia, Pa., is one of the country's leading bakers of snack cakes, pies, cookies, and donuts. The company has manufacturing facilities in Philadelphia and Oxford, Pa. The company offers more than 100 products under the Tastykake brand name. The Company reported a net loss of $45.18 million on $171.67 million of net sales for the 52 weeks ended Dec. 25, 2010, compared with a net loss of $3.39 million on $180.56 million of net sales for the 52 weeks ended Dec. 26, 2009. The Company's balance sheet at March 26, 2011, showed $153.32 million in total assets, $172.18 million in total liabilities and a $18.86 million total shareholders' deficit. PricewaterhouseCoopers LLP, in Philadelphia, Pennsylvania, noted that that the Company's cumulative losses, substantial indebtedness that is due June 30, 2011, in addition to its current liquidity situation, raise substantial doubt about its ability to continue as a going concern. Forbearance Agreement, Going Concern Doubt On Jan. 5, 2011, Tasty Baking obtained initial two-week waiver agreements from several of its creditors, which waived certain payments that were due and certain financial covenant requirements. The Company said it was experiencing extremely tight liquidity due to (i) certain production difficulties during the optimization of its new Philadelphia bakery that caused the Company to not achieve the expected operational cash savings from this bakery during the fourth quarter of 2010; (ii) the impact of the recent bankruptcy filing by The Great Atlantic & Pacific Tea Company, Inc.; and (iii) a sharp rise in commodity costs. At the conclusion of the two-week waiver period, on Jan. 14, 2011, the Company entered into arrangements with certain creditors, including: (i) a Seventh Amendment to the Company's Bank Credit Facility; (ii) a Forbearance and Amendment Agreement with the PIDC Local Development Corporation, which also included a new $2 million loan from PIDC; (iii) a letter agreement with the Machinery and Equipment Fund of the Department of Community and Economic Development of the Commonwealth of Pennsylvania, along with a new $1 million loan from MELF; and (iv) a letter agreement with the Company's landlords at the Philadelphia Navy Yard for its bakery and offices. Also on Jan. 14, 2011, the Company issued $3.5 million of unsecured 12% promissory notes due Dec. 31, 2011 to a group of accredited investors. The Creditor Amendments generally permit the Company to delay certain payments to PIDC, MELF and Liberty Property until June 30, 2011. The Creditor Amendments also generally provide that the creditor will waive certain specified defaults, but not any other defaults that may occur in the future that are not specifically waived in the Creditor Amendments. In addition, the Bank Amendment, among other things, (i) changed the maturity date of the Bank Credit Facility to June 30, 2011; (ii) reduced the letter of credit limit to the aggregate amount of letters of credit currently outstanding, while not permitting the Company to issue new letters of credit or extend outstanding letters of credit; and (iii) set new financial covenants, a breach of which could cause a default to occur prior to June 30, 2011. The Bank Amendment also required that the Company engage in a process -- pursuant to an agreed upon timeline with milestones -- to consummate a sale of the Company before June 30, 2011 in an amount sufficient to pay all obligations of the Company under the Bank Credit Facility and all transaction costs. The Company has delayed the filing of its 2010 annual report on Form 10-K. The Company anticipates that the Form 10-K for fiscal year ended Dec. 25, 2010, will include an explanatory paragraph from the Company's independent registered public accounting firm expressing substantial doubt about the Company's ability to continue as a going concern. TBS INTERNATIONAL: Joseph Royce Owns 42.6% of Class A Shares ------------------------------------------------------------ In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Joseph E. Royce disclosed that he beneficially owns 12,658,164 Class A ordinary shares of TBS International plc representing 42.6% of the share outstanding. Elaine M. Royce also owns 4,778,958 Class A ordinary shares. A full-text copy of the filing is available for free at http://is.gd/7Viudq About TBS International plc Dublin, Ireland-based TBS International plc (NASDAQ: TBSI) -- http://www.tbsship.com/-- provides worldwide shipping solutions to a diverse client base of industrial shippers through its Five Star Service: ocean transportation, projects, operations, port services and strategic planning. The TBS shipping network operates liner, parcel and dry bulk services, supported by a fleet of multipurpose tweendeckers and handysize/handymax bulk carriers, including specialized heavy-lift vessels and newbuild tonnage. TBS has developed its franchise around key trade routes between Latin America and China, Japan and South Korea, as well as select ports in North America, Africa, the Caribbean and the Middle East. The Company reported a net loss of US$247.76 million on US$411.83 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of US$67.04 million on US$302.51 million of total revenue during the prior year. The Company's balance sheet at March 31, 2011, showed $681.39 million in total assets, $406.22 million in total liabilities and $275.17 million in total shareholders' equity. PricewaterhouseCoopers LLP expressed substantial doubt about the Company's ability to continue as a going concern. PwC believes that the Company will not be in compliance with the financial covenants under its credit facilities during 2011, which under the agreements would make the debt callable. According to PwC, this has created uncertainty regarding the Company's ability to fulfill its financial commitments as they become due. As reported in the TCR on Feb. 8, 2011, TBS International on Jan. 31, 2011, announced that it had entered into amendments to its credit facilities with all of its lenders, including AIG Commercial Equipment, Commerzbank AG, Berenberg Bank and Credit Suisse and syndicates led by Bank of America, N.A., The Royal Bank of Scotland plc and DVB Group Merchant Bank (the "Credit Facilities"). The amendments restructure the Company's debt obligations by revising the principal repayment schedules under the Credit Facilities, waiving any existing defaults, revising the financial covenants, including covenants related to the Company's consolidated leverage ratio, consolidated interest coverage ratio and minimum cash balance, and modifying other terms of the Credit Facilities. The Company currently expects to be in compliance with all financial covenants and other terms of the amended Credit Facilities through maturity. As a condition to the restructuring of the Company's credit facilities, three significant shareholders who also are key members of TBS' management agreed on Jan. 25, 2011, to provide up to US$10 million of new equity in the form of Series B Preference Shares and deposited funds in an escrow account to facilitate satisfaction of this obligation. In partial satisfaction of this obligation, on Jan. 28, 2011, these significant shareholders purchased an aggregate of 30,000 of the Company's Series B Preference Shares at US$100 per share directly from TBS in a private placement. TBS INTERNATIONAL: Gregg McNelis Holds 15.6% of Class A Shares -------------------------------------------------------------- In a Schedule 13D filing of the U.S. Securities and Exchange Commission, Gregg L. McNelis disclosed that he beneficially owns 3,242,354 Class A ordinary shares of TBS International plc representing 15.6% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/eO7RXw About TBS International plc Dublin, Ireland-based TBS International plc (NASDAQ: TBSI) -- http://www.tbsship.com/-- provides worldwide shipping solutions to a diverse client base of industrial shippers through its Five Star Service: ocean transportation, projects, operations, port services and strategic planning. The TBS shipping network operates liner, parcel and dry bulk services, supported by a fleet of multipurpose tweendeckers and handysize/handymax bulk carriers, including specialized heavy-lift vessels and newbuild tonnage. TBS has developed its franchise around key trade routes between Latin America and China, Japan and South Korea, as well as select ports in North America, Africa, the Caribbean and the Middle East. The Company reported a net loss of US$247.76 million on US$411.83 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of US$67.04 million on US$302.51 million of total revenue during the prior year. The Company's balance sheet at March 31, 2011, showed $681.39 million in total assets, $406.22 million in total liabilities and $275.17 million in total shareholders' equity. PricewaterhouseCoopers LLP expressed substantial doubt about the Company's ability to continue as a going concern. PwC believes that the Company will not be in compliance with the financial covenants under its credit facilities during 2011, which under the agreements would make the debt callable. According to PwC, this has created uncertainty regarding the Company's ability to fulfill its financial commitments as they become due. As reported in the TCR on Feb. 8, 2011, TBS International on Jan. 31, 2011, announced that it had entered into amendments to its credit facilities with all of its lenders, including AIG Commercial Equipment, Commerzbank AG, Berenberg Bank and Credit Suisse and syndicates led by Bank of America, N.A., The Royal Bank of Scotland plc and DVB Group Merchant Bank (the "Credit Facilities"). The amendments restructure the Company's debt obligations by revising the principal repayment schedules under the Credit Facilities, waiving any existing defaults, revising the financial covenants, including covenants related to the Company's consolidated leverage ratio, consolidated interest coverage ratio and minimum cash balance, and modifying other terms of the Credit Facilities. The Company currently expects to be in compliance with all financial covenants and other terms of the amended Credit Facilities through maturity. As a condition to the restructuring of the Company's credit facilities, three significant shareholders who also are key members of TBS' management agreed on Jan. 25, 2011, to provide up to US$10 million of new equity in the form of Series B Preference Shares and deposited funds in an escrow account to facilitate satisfaction of this obligation. In partial satisfaction of this obligation, on Jan. 28, 2011, these significant shareholders purchased an aggregate of 30,000 of the Company's Series B Preference Shares at US$100 per share directly from TBS in a private placement. THREE LIGHTS: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Three Lights Development, LLC 935 Curtiss St., Suite 4 Downers Grove, IL 60515 Bankruptcy Case No.: 11-23323 Chapter 11 Petition Date: June 1, 2011 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: John H. Squires Debtor's Counsel: Scott R. Clar, Esq. CRANE HEYMAN SIMON WELCH & CLAR 135 S Lasalle Suite 3705 Chicago, IL 60603 Tel: (312) 641-6777 Fax: (312) 641-7114 E-mail: sclar@craneheyman.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 19 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ilnb11-23323.pdf The petition was signed by David A. Weiher, member. TOLL BROTHERS: Moody's Revises Outlook to Stable from Negative -------------------------------------------------------------- Moody's Investors Service revised the rating outlook for Toll Brothers, Inc. to stable from negative and affirmed its existing ratings, including its Ba1 corporate family rating, Ba1 probability of default rating, Ba1 senior unsecured debt rating, and SGL-1 speculative grade liquidity rating. RATINGS RATIONALE The stabilization of the rating outlook for Toll Brothers reflects the company's ability to generate improving operating results and credit metrics even as it faces the same daunting headwinds experienced by the homebuilding industry and its peers. Over the past several quarters the company has delivered increasing gross margins, declining homebuilding debt leverage, and positive net income. Toll Brothers is one of the few homebuilders to generate positive net income after the downturn, and the company was profitable in three of the last four quarters. Between Q1 2010 and Q1 2011, the company's quarterly gross margins (including Moody's standard adjustments) consistently improved to 18.0% from 13.8%, and adjusted homebuilding debt leverage declined to 40% from 47%. Additionally, Toll Brothers' year-over-year changes in deliveries and new orders appear to have entered positive territory, while the majority of homebuilders continue to suffer significant year- over-year declines. The company's year-over-year deliveries fell 4% in Q1 2011 and grew 9% in Q2 2011, and new orders increased 4% and 7%, respectively. Moody's believes that Toll Brothers will continue to generate positive net income and its credit metrics will continue to gradually improve as the conditions in the residential housing market slowly improve from their historic lows. The revision of the outlook to stable also reflects the company's performance in its high density mid- and high-rise tower business, which has exceeded Moody's previous expectations, as well as the company's solid liquidity profile. Moody's recognizes, however, that Toll Brothers continues to face the same challenges affecting the rest of the homebuilding industry, including the substantial overhang of foreclosed properties, weak pricing, and high unemployment. In addition, the company's expansion goals for its tower and high density mid-rise business and the inherently more volatile operating characteristics and financial requirements of this segment alter its formerly low business risk profile. Moody's also recognizes that Toll Brothers is ramping up its purchases of land parcels that it views as being distressed, hence reducing its cash position and generating negative cash flow from operations. The Ba1 ratings are supported by Toll Brothers' leadership position in its upper end homebuilding niche; its solid liquidity profile, as captured in its SGL-1 rating; and an ability to greatly restrict, or even shut off entirely, its land spend for relatively long periods of time without incurring the need to race to catch up when the market turns. This latter characteristic permits the company generally to control how much cash flow it wishes to generate or even whether it wishes the figure to be positive or not. At the same time, in Moody's view, the overall general economy and macro housing outlook will remain constrained and are not likely to allow for substantial improvement in operating performance and credit metrics for the company in 2011 and 2012. The SGL-1 speculative grade liquidity rating reflects Toll Brothers' very good liquidity position, which at April 30, 2011 was supported by a $1.25 billion cash balance, $784 million of availability under its credit facility, substantial room under financial covenants, and the size of its land supply, which could be monetized if necessary. The ratings could benefit if Moody's were to project that the company's credit metrics begin to resemble those of an investment grade homebuilder. Specifically, Moody's would need to see debt leverage falling below 40%, interest coverage rising to the mid- single digit range, gross margins improving to above 23%, and total revenues and net income beginning to migrate towards pre- recession levels. The outlook and/or ratings could be lowered if the company's gross margins and net income generation weaken, it incurred a significant pre-impairment loss in any one quarter, operating cash flow was heavily negative in 2011 and 2012, liquidity was materially impaired, and/or the company re-levered its balance sheet above 50%. The principal methodology used in rating Toll Brothers, Inc. was the Global Homebuilding Industry Methodology, published March 2009. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Based in Horsham, Pennsylvania, Toll Brothers, Inc. is the nation's leading builder of luxury homes, serving move-up, empty- nester, and active adult buyers in 19 states and four regions around the country. Total revenues and consolidated net income for the twelve months ended April 30, 2011 were $1.5 billion and $60 million, respectively. TOWN & COUNTRY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Town & Country Estate LLC P.O. Box 1088 Monsey, NY 10952 Bankruptcy Case No.: 11-23110 Chapter 11 Petition Date: June 1, 2011 Court: U.S. Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Joshua N. Bleichman, Esq. BLEICHMAN & KLEIN 268 Route 59 Spring Valley, NY 10977 Tel: (845) 425-2510 Fax: (845) 425-7362 E-mail: bleichmanklein@yahoo.com Scheduled Assets: $2,801,000 Scheduled Debts: $12,454,779 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/nysb11-23110.pdf The petition was signed by Isack D. Weiss, managing partner. TRADE UNION: Seeks to Employ Lan Liu & Company as Accountant ------------------------------------------------------------ Trade Union International, Inc., and Duck House, Inc., seek authority from the U.S. Bankruptcy Court for the Central District of California, Riverside Division, to employ Lan Liu & Company as their accountant, nunc pro tunc to Jan. 31, 2011. The Debtors said the firm has been performing accounting and tax preparation services for the Debtors since 1986 and is familiar with the Debtors' financial affairs. The professional services to be rendered by Lan Liu are: -- Prepare the Debtors' 2010 federal and state income tax returns. The Firm may perform related bookkeeping services necessary for preparation of the tax returns as well; -- Assist the Debtors in the preparation of 2010 year-end financial statements and review as necessary in the ordinary course of the Debtors' financial affairs and as necessary to complete tax returns; -- If necessary, assist the Debtors in the analysis of the tax implications of various plan or administrative alternatives; -- To perform any and all other accounting, tax and business advice and services incident and necessary as the Debtors may require of the Firm in connection with these Chapter 11 cases and as necessary to preserve assets for the benefit of the Debtors' bankruptcy estates and their creditors. The Firm estimates that the combined fees for its services to be performed for the Debtors during the cases will not exceed $25,000 (including the fees of $6,750 billed from February 1, 2011 through May 1, 2011.) U.S. Trustee's Objection Peter C. Anderson, U.S. Trustee for Region 16, asks the U.S. Bankruptcy Court for the Central District of California, Riverside Division, to deny Trade Union International, Inc., and Duck House, Inc.'s request to employ Lan Liu & Company as the Debtors' accountant. The U.S. Trustee explains that the Debtors' have not demonstrated "extraordinary circumstances" to justify nunc pro tunc employment. The U.S. Trustee relates that the Debtors' believed the approval of the employment of the accountant was unnecessary as Lan Lui was performing tasks within the ordinary course of the Debtors' business. "The Debtors' explanation of the failure to request employment, resting on the proposition that the services of an accountant were provided in the ordinary course of the Debtors' business, is not persuasive. The Debtors' have employed experienced bankruptcy counsel to assist them. Counsel should be well aware of the need to seek approval of the Accountant in a bankruptcy case." About Trade Union Montclair, California-based Trade Union International Inc. supplies aftermarket aluminum alloy wheels and wheel and truck accessories. It filed for Chapter 11 bankruptcy protection on January 31, 2011 (Bankr. C.D. Calif. Case No. 11-13071). James C. Bastian, Jr., Esq., at Shulman Hodges & Bastian LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliate Duck House, Inc., a California corporation, filed a separate Chapter 11 petition on January 27, 2011 (Bankr. C.D. Calif. Case No. 11-13072). TRIBUNE CO: Committee Wants to Termination Event Until Aug. 15 -------------------------------------------------------------- The Official Committee of Unsecured Creditors in Tribune Co.'s cases asks Judge Kevin Carey to extend the "Termination Event" to Aug. 15, 2011. Since entry of the Standing Orders, the Creditors' Committee has filed certain complaints and negotiated tolling agreements with respect to statutes of limitations, all as contemplated by and consistent with the terms of the Standing Orders. None of the litigation that the Creditors' Committee has commenced pursuant to the authority it was granted in the Standing Orders has settled. In addition, consistent with the Standing Orders, the litigation the Committee has commenced is stayed pending the occurrence of a Termination Event. At least one "Termination Event" -- the occurrence of the date of June 15, 2011 -- will occur. Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, avers that the litigation or resolution of the LBO litigation is central to the Competing Plans and was the focus of the evidence presented at the confirmation hearing. The limitations on settlement of litigation brought by the Creditors' Committee and the broad stay of the litigation appropriately preserve the status quo while the Court considers the Competing Plans, he notes. Consequently, the proposed extension of the June 15 Termination Event will permit the parties to continue to enjoy the benefits of the Standing Orders while the Competing Plans are litigated, a ruling is made, or a settlement is achieved, he maintains. The Creditors' Committee further asks the Court to permit the proponents of the Competing Plans to jointly amend further the definition of Section "(iii)" of the term "Termination Event" in the Standing Orders upon filing a proposed order under certification of counsel within 10 day's notice to parties who have requested notice pursuant to Rule 2002 of the Federal Rules of Bankruptcy Procedure. The Court will consider the Creditors' Committee's request on June 13, 2011. Objections are due no later than June 6. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. And Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Homestead Has Ok to Sell Property for $3.85-Mil. ------------------------------------------------------------ Homestead Publishing Co., debtor-affiliate of Tribune Co., received permission from the Bankruptcy Court to sell a real property commonly known as 10750 Little Patuxent Parkway, in Columbia, Maryland, free and clear of all liens, to 175 LLC, for $3,850,000. The Columbia Property is a commercial property consisting of a 29,450-square foot office building on approximately 2.18 acres of real property. The Columbia Property was used for the publication of a local newspaper and housed all newspaper personnel, including sales people, editors, and reports. However, in a consolidation effort aimed towards greater efficiency, those operations were moved in February 2011 from the Columbia Property to already-owned vacant space in a facility, which houses operations for The Baltimore Sun in Baltimore, Maryland. The Columbia Property has thus been vacant for the past three months. The Columbia Property was not actively marketed before negotiations with the Purchaser. However, just prior to the Columbia Property becoming vacant, Homestead was approached by the Purchaser with an offer to purchase the Columbia Property for $3,200,000. Since that time, Homestead and the Purchaser have been in negotiations regarding the terms and sale price of the Columbia Property. As a result of those negotiations, Homestead and the Purchaser have negotiated and executed a Purchase and Sale Agreement governing the Debtor's sale of the Columbia Property to the Purchaser. The key terms of the Sale Agreement are: * The Purchaser will pay $3,850,000 as purchase price for the Columbia Property. * No personal property will be transferred as part of the transaction, and there are no leases applicable to the Columbia Property. * Of the Purchase Price, $100,000 is to be deposited in an escrow account as earnest money within three business days of entry of an order approving the Debtor's Motion. An additional $200,000 is to be deposited into the escrow account upon expiration of a Study Period provided by the Sale Agreement. * At Closing, those deposits will be credited towards the Purchase Price, and the balance of the Purchase Price will be immediately payable. * Upon the Effective Date of the Sale Agreement, the Purchaser will have a 90-day Study Period during which it can investigate the Columbia Property to determine, in the Purchaser's sole and absolute discretion, if the Columbia Property is acceptable to the Purchaser and suitable for the Purchaser's use and development. The Sale Agreement contemplates that the Closing will occur within 60 days from the expiration of the Study Period. A full-text copy of the Sale Agreement is available for free at: http://bankrupt.com/misc/Tribune_ColumbiaPropPSA.pdf Bryan Krakauer, Esq., at Sidley Austin LLP, in Chicago, Illinois, relates that neither Homestead nor any of the Debtors have conducted business operations on the Columbia Property, nor do any of the Debtors anticipate having any need to use the Columbia Property in the future. The Columbia Property also has substantial annual carrying costs, he points out. Thus, the proposed sale of the Columbia Property allows Homestead to quickly monetize a surplus asset pursuant to a sale to a third party for a price that in the commercial judgment of the Debtors, roughly approximates the value of the Columbia Property and eliminates substantial yearly carrying costs, he asserts. By selling pursuant to a private sale, Homestead has also avoided a seller-side broker commission that the Debtors anticipate could be over $100,000 for the Columbia Property, he adds. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. And Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Committee Hires Seitz van Ogrtrop as Conflicts Counsel ------------------------------------------------------------------ The Official Committee of Unsecured Creditors for Tribune Co. received the Bankruptcy Court's authority to retain Seitz Van Ogtrop & Green, P.A., as special conflicts counsel, nunc pro tunc to April 21, 2011. SVG will provide to the Committee services in connection with the leveraged buy-out lender complaint, solely with respect to matters involving the Goldman Sachs & Co. affiliates. SVG will be paid its current hourly rates: Partners and Counsel $300-$490 Associates $200-$250 Paraprofessionals $100-$125 SVG will also be reimbursed for any necessary out-of-pocket expenses it incurs. James S. Green, Esq., at Seitz Van Ogtrop & Green, P.A., assures the Court that his firm 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 Debtors, their estates, and their creditors About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection on December 8, 2008 (Bankr. D. Del. Lead Case No. 08- 13141). The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. And Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of December 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRICO MARINE: Has Until July 29 to Solicit Ch. 11 Plan Acceptances ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware extended until July 29, 2011, Trico Marine Services, Inc., e al.'s exclusive periods to solicit acceptances for the proposed Chapter 11 plan. The Debtors related that the extension of their solicitation period will increase the likelihood of a greater distribution to their stakeholders by facilitating an orderly, efficient, and cost-effective sale and plan process for the benefit of all creditors. As reported in the Troubled Company Reporter on June 3, Trico Marine won approval of a disclosure statement explaining the Chapter 11 plan. The confirmation hearing for approval of the plan is scheduled for July 18. The parent's plan will distribute its portion of the former subsidiaries' stock to the parent's creditors. The TCR also reported that non-bankrupt Trico subsidiaries known as Trico Supply and Trico Shipping completed their recapitalization and were spun off to be owned mostly by creditors with $400 million in 11.875% secured notes. As part of the transaction, the Trico parent received 5% of the stock in the former subsidiaries and warrants for another 10%. The spinoff was part of a settlement with the subsidiaries approved by the bankruptcy court in February. 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. TRIMAS CORP: Moody's Rates New Credit Facility at 'Ba2' ------------------------------------------------------- Moody's Investors Service has assigned a Ba2 rating to TriMas Company LLC's , a wholly owned subsidiary of TriMas Corporation $300 million credit facility and affirmed the company's CFR and PDR at B1. The company's Speculative Grade Liquidity rating was affirmed at SGL-2. The ratings outlook remains positive. The new $300 million credit facilities are being issued by TriMas Company LLC. The facilities are guaranteed by TriMas Corporation and are comprised of a $75 million revolver and a $225 million term loan B. Proceeds from the $225 million term loan B are expected to be applied towards refinancing the company's current term loans. The company's new $75 million revolver is anticipated to be undrawn at the close although the availability is decreased by approximately $23 million in outstanding letters of credit against the facility. The new facilities' Ba2 rating reflects the first lien pledge of the assets of domestic subsidiaries and 65% stock pledge of the company's foreign subsidiaries. The term loan will mature 6 years after the closing date and amortize at 0.25% per quarter during the period of 5 years and nine months with the balance due at maturity. The revolver will mature 5 years after the closing date. The ratings on the existing credit facilities will be withdrawn upon the closing of the transaction. Adjustments/Affirmations: Issuer: TriMas Corporation -- Senior Secured Regular Bond/Debenture, affirmed at B2; LGD changed to LGD4, 68% from LGD5, 71% Assignments: Issuer: TriMas Company LLC -- Senior Secured Bank Credit Facility, Assigned a Ba2, LGD2- 22% RATINGS RATIONALE The company's B1 CFR and the positive ratings outlook reflect Moody's view that the company is well positioned to see further operating improvement as global economic activity strengthens. Recent trends are supportive of the positive ratings outlook. In particular, revenues grew by 17% in 2010 and its operating margin increased to 12.7% from 6.9% in 2009. The company's leverage (Debt to EBITDA) improved to 3.6 times in 2010 from 5.7 times for 2009 and is expected to improve further over the next couple of years. The ratings benefit from a broad mix of industry verticals that provide diversity and help mitigate risk. The company's Speculative Grade Liquidity Rating was maintained at SGL-2, reflecting Moody's view that the company has good liquidity. The company's liquidity benefits from positive cash flow, expected full revolver availability and the belief that the company will be able to meet its cash needs from internal sources. A rating upgrade to Ba3 could occur if the company reports a track record over the next twelve months that shows positive revenue growth, improving margins, sustainable debt to EBITDA below 3.5 times and EBITA to interest coverage approaching 3 times. Also important to positive rating traction is good liquidity including effective working capital management. The rating could be downgraded if the company's leverage (debt to EBITDA) was to increase to over 4.5 times, or if its free cash flow to debt was anticipated to be below 7% on a consistent basis. Currently, all five of the company's operations are performing well. If one or more of its business segments was expected to experience meaningful year over year contraction, the rating could revert to stable. The outlook could also revert to stable if the company's leverage was to trend towards 4 times. The principal methodology used in rating TriMas was the Global Manufacturing Industry Methodology, published December 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. TriMas Corporation is a diversified industrial manufacturer. The Company is engaged in five business segments with diverse products and market channels in packaging, energy, aerospace & defense, and engineered components. Last twelve months revenues through March 31, 2011 totaled approximately $992 million. TRIUS THERAPEUTICS: 4 Class I Directors Elected at Annual Meeting ----------------------------------------------------------------- Trius Therapeutics, Inc.'s 2011 Annual Meeting of Stockholders was held on June 2, 2011. The Company had 23,667,333 shares of common stock outstanding and entitled to vote as of April 12, 2011, the record date for the Annual Meeting. At the Annual Meeting, 18,965,057 shares of common stock were present in person or represented by proxy for the two proposals specified below. At the Annual Meeting, stockholders: (1) elected Brian G. Atwood, David S. Kabakoff, Ph.D., Nina Kjellson and Brendan O'Leary, Ph.D. as Class I directors to hold office until the 2014 Annual Meeting of Stockholders; and (2) ratified the selection of Ernst & Young LLP as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2011. About Trius Therapeutics San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) -- http://www.triusrx.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of innovative antibiotics for serious, life-threatening infections. The Company's first product candidate, torezolid phosphate, is an IV and orally administered second generation oxazolidinone being developed for the treatment of serious gram-positive infections, including those caused by MRSA. In addition to the company's torezolid phosphate clinical program, it is currently conducting two preclinical programs using its proprietary discovery platform to develop antibiotics to treat infections caused by gram-negative bacteria. The Company has incurred losses since its inception and it anticipates that it will continue to incur losses for at least the next several years. The Company does not anticipate that its existing working capital, including the funds received on Aug. 6, 2010, from its IPO, alone will be sufficient to fund its operations through the successful development and commercialization of torezolid phosphate or any other products it develops. As a result, the Company says it will need to raise additional capital to fund its operations and continue to conduct clinical trials to support potential regulatory approval of torezolid phosphate and any other product candidates. The Company reported a net loss of $23.86 million on $8.03 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $22.68 million on $5.01 million of total revenues during the prior year. The Company's balance sheet at March 31, 2011, showed $41.16 million in total assets, $4.90 million in total liabilities, all current, $238,000 in deferred revenue and $36.02 million in total stockholders' equity. UNION LAND: Files Schedule of Assets and Liabilities ---------------------------------------------------- Union Land & Timber Corp. filed its schedule of assets and liabilities, disclosing: NAME OF SCHEDULE ASSETS LIABILITIES ---------------- ------ ----------- A - Real Property $2,375,000 B - Personal Property $1,170 C - Property Claimed as exempt D - Creditors Holding Secured Claims $11,945,819 E - Creditors Holding Unsecured Priority Claims $0 F - Creditors Holding Unsecured Nonpriority Claims $0 ------ ----------- Total $2,376,170 $11,945,819 Lake City, Florida-based Union Land & Timber Corp. and affiliate Roberts Land & Timber Investment Corp. filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case Nos. 11-03853 and 11-03851) on May 25, 2011. Judge Paul M. Glenn presides over the cases. Andrew J. Decker, III, Esq., at The Decker Law Firm, P.A., serves as bankruptcy counsel. The petition was signed by Avery C. Roberts, president. UNION LAND: Asks Court to Approve Decker Law Firm Employment ------------------------------------------------------------ Union Land & Timber Corp. seeks Bankruptcy Court authority to employ The Decker Law Firm, P.A. as its counsel. Reorganization for the Debtor but may include other legal services. The Debtor said The Decker Law Firm represents no interest adverse to the Debtor or its estate in the matters upon which it is to be engaged, and the employment of The Decker Law Firm is necessary and would be in the best interest of the estate. Lake City, Florida-based Union Land & Timber Corp. and affiliate Roberts Land & Timber Investment Corp. filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case Nos. 11-03853 and 11-03851) on May 25, 2011. Judge Paul M. Glenn presides over the cases. Union Land's petition was signed by Avery C. Roberts, president. In its Schedules, Union Land listed $2,376,170 in total assets and $11,945,819 in total liabilities. Union Land has no unsecured creditors. UNION LAND: Sec. 341(a) Creditors' Meeting Set for July 6 --------------------------------------------------------- The United States Trustee for the Middle District of Florida will convene a meeting of creditors in the bankruptcy cases of Union Land & Timber Corp., and Roberts Land & Timber Investment Corp. pursuant to Sec. 341(a) of the Bankruptcy Code on July 6, 2011, at 1:00 p.m. at Jacksonville, Florida (3-40) - Suite 1-200, 300 North Hogan St. The last day to oppose discharge or dischargeability is Sept. 6, 2011. Proofs of claim are due by Oct. 4, 2011. The Debtors are seeking joint administration of their cases. The Court will hold a Preliminary Hearing on the Motion for Joint Administration on July 6 at 9:30 a.m. The Court has issued an order authorizing Union Land to continue operate its business while in bankruptcy. Lake City, Florida-based Union Land & Timber Corp. and affiliate Roberts Land & Timber Investment Corp. filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case Nos. 11-03853 and 11-03851) on May 25, 2011. Judge Paul M. Glenn presides over the cases. Union Land's petition was signed by Avery C. Roberts, president. In its Schedules, Union Land disclosed $2,376,170 in total assets and $11,945,819 in total liabilities. Union Land has no unsecured creditors. USA BANK OF PORT CHESTER: FDIC Probes Greenwich Official -------------------------------------------------------- Teri Buhl at Connecticut Watchdog reports that an elected Greenwich official, Fred DeCaro III, is under investigation by the Federal Deposit Insurance Corp. for alleged bank fraud. DeCaro III was chairman of a community bank called USA Bank from 2008 till its seizure by the FDIC in July 2010. According to the report, the bank, which serviced the wealthy enclaves of Fairfield County and parts of Westchester County, New York, was founded by his father Fred DeCaro Jr. who is also part of the investigation focusing on alleged lending abuse and possible securities fraud. Dealflow Media, The Distressed Debt Report, was first to report the FDIC's investigation into the father-son banking duo. Connecticut Watchdog relates that at the center of the investigation are moves Mr. DeCaro III allegedly executed to make defaulting loans appear performing when the bank was under the gun to raise risk-based capital levels or face being shut down by regulators. In 2008 DeCaro III was elected the Republican Register of Voters for the city of Greenwich; a part-time position that pays $30,000 a year without benefits but affords him an office in Town Hall. Connecticut Watchdog reports that one founding bank investor, a successful real estate developer Ruth Jones of New Canaan, told regulators DeCaro III played the role of bagman when loans were not performing. Ms. Jones, who says she helped raise more than $3 million for the bank and invested $1 million in it, eventually received 27 construction loans for 12 properties from the bank, including second and third loans. Ms. Jones showed investigators second lien account statements with a balance due in April 2009 of $172,655 which was magically paid down to only $55 one year later. Ms. Jones states she did not pay off these loans but thinks someone directed by the banks executives made the balances `go away'. Ms. Jones also said her name was forged on lending documents and that she was unaware of certain loans taken out in her name. The forgery was acknowledged by Mr. DeCaro Jr. in this notarized letter, which also says the bank employee forging Ms. Jones' name was fired. About USA Bank USA Bank of Port Chester, N.Y., was closed on Friday, July 9, 2010, by the New York State Banking Department, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with New Century Bank (doing business as Customer's 1st Bank) of Phoenixville, Pa., to assume all of the deposits of the failed bank. As of March 31, 2010, the failed bank had approximately $193.3 million in total assets and $189.9 million in total deposits. New Century Bank did not pay the FDIC a premium for the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, New Century Bank agreed to purchase essentially all of the failed bank's assets. VILLAS AT 39TH: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Villas at 39th LLC 2321 NW 41st Street Gainesville, FL 32606 Bankruptcy Case No.: 11-10249 Chapter 11 Petition Date: June 1, 2011 Court: United States Bankruptcy Court Northern District of Florida (Gainesville) Debtor's Counsel: Ryan E. Davis, Esq. WINDERWEEDLE, HAINES, WARD & WOODMAN P.O. Box 1391 Orlando, FL 32801-1391 Tel: (407) 423-4246 Fax: (407) 423-7014 E-mail: rdavis@whww.com Scheduled Assets: $2,790,646 Scheduled Debts: $2,412,965 A list of the Company's three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flnb11-10249.pdf The petition was signed by Thomas C. Spain, managing member. VITRO SAB: Sun Capital Wins Auction for U.S. Assets --------------------------------------------------- Vitro, S.A.B. de C.V., said that American Glass Enterprises LLC, an affiliate of Sun Capital Partners Inc., emerged the winning bidder for the U.S. businesses in Chapter 11 reorganization in Dallas. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Vitro, S.A.B. de C.V., said that $55.1 million was the highest bid from American Glass. According to the Bloomberg report, Grey Mountain Partners LLC from Boulder, Colorado's bid came in second place at the auction. Sun Capital acquired Vitro competitor Arch Aluminum & Glass Co. Inc. out of bankruptcy for $53.8 million in January 2010. The sale is scheduled for approval at a June 9 hearing. Jenni Chase at Glass Magazine reports that Sun Capital's winning bid was approximately $61 million, a substantial increase over the original $44 million price. Sun Capital must close the sale by June 17, 2011, or Grey Mountain, the back-up bidder, can step back in. Mr. Rochelle recounts that when the U.S. subsidiaries put themselves into Chapter 11 in April, they already had a $44 million bid in hand from an affiliate of Grey Mountain. Sun Capital immediately announced it would top the bid by at least $1 million. Ultimately, the auction increased the price by 25%. About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global glass producer, serving the construction and automotive glass markets and glass containers needs of the food, beverage, wine, liquor, cosmetics and pharmaceutical industries. Vitro is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009, and sought to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. Concurso Mercantil & Chapter 15 Proceedings Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, commencing its voluntary concurso mercantil proceedings -- the Mexican equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on Dec. 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. The judge said Vitro couldn't push through a plan to buy back or swap US$1.2 billion in debt from bondholders based on the vote of US$1.9 billion of intercompany debt when third-party creditors were opposed. Vitro as a result dismissed the first Chapter 15 petition following the ruling by the Mexican court. On April 12, 2011, an appellate court in Mexico reinstated the reorganization. Accordingly, Vitro SAB on April 14 re-filed a petition for recognition of its Mexican reorganization in U.S. Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11-11754). In the present Chapter 15 case, the Debtor seeks to block any creditor suits in the U.S. pending the reorganization in Mexico. Chapter 11 Proceedings A group of noteholders opposed the exchange -- namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P. Together, they held US$75 million, or approximately 6% of the outstanding bond debt. The Noteholder group commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders, known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. The U.S. affiliates subject to the involuntary petitions are Vitro Chemicals, Fibers & Mining, LLC (Bankr. N.D. Tex. Case No. 10- 47472); Vitro America, LLC (Bankr. N.D. Tex. Case No. 10-47473); Troper Services, Inc. (Bankr. N.D. Tex. Case No. 10-47474); Super Sky Products, Inc. (Bankr. N.D. Tex. Case No. 10-47475); Super Sky International, Inc. (Bankr. N.D. Tex. Case No. 10-47476); VVP Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47477); Amsilco Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47478); B.B.O. Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47479); Binswanger Glass Company (Bankr. N.D. Tex. Case No. 10-47480); Crisa Corporation (Bankr. N.D. Tex. Case No. 10-47481); VVP Finance Corporation (Bankr. N.D. Tex. Case No. 10-47482); VVP Auto Glass, Inc. (Bankr. N.D. Tex. Case No. 10-47483); V-MX Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47484); and Vitro Packaging, LLC (Bankr. N.D. Tex. Case No. 10-47485). A bankruptcy judge in Fort Worth, Texas, denied involuntary Chapter 11 petitions filed against four U.S. subsidiaries. On April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro America LLC and three other U.S. subsidiaries -- that were subject to the involuntary petitions into voluntary Chapter 11. The Texas Court on April 21 denied involuntary petitions against the eight U.S. subsidiaries that didn't consent to being in Chapter 11. Kurtzman Carson Consultants is the claims and notice agent to Vitro America, et al. Alvarez & Marsal North America LLC, is the Debtors' operations and financial advisor. The official committee of unsecured creditors appointed in the Chapter 11 cases of Vitro America, et al., has selected Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, as counsel. WELCOME HOSPITALITY: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Welcome Hospitality, LLC dba Comfort Inn - Orange Park 341 Park Avenue Orange Park, FL 32073 Bankruptcy Case No.: 11-04071 Chapter 11 Petition Date: June 1, 2011 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Judge: Jerry A. Funk Debtor's Counsel: Buddy D. Ford, Esq. BUDDY D. FORD, P.A. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 E-mail: Buddy@tampaesq.com Scheduled Assets: $1,843,360 Scheduled Debts: $5,327,540 A list of the Company's 17 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb11-04071.pdf The petition was signed by Pareshkumar "Paresh" D. Patel, managing member. * Running Cities Like Companies is Risky Business, Experts Say -------------------------------------------------------------- Dow Jones' DBR Small Cap reports that when times were good, Stockton, Calif., used a tax-revenue surge to get down to business: building a boat marina, a baseball stadium and a sports arena. * Cohen & Grigsby Certified as Business Bankruptcy Specialists -------------------------------------------------------------- Cohen & Grigsby, a business law firm with headquarters in Pittsburgh, PA and an office in Bonita Springs, FL, disclosed that attorney Thomas D. Maxson was recently certified as a Business Bankruptcy Specialist by the American Board of Certification (ABC), a specialty certification organization sponsored by the American Bankruptcy Institute and the Commercial Law League of America. At the same time, attorney William E. Kelleher, Jr., who was first certified in 1996, has received his recertification, which is required every five years. "On behalf of the firm, I am proud to congratulate Tom and Bill for devoting time to the arduous task of ABC certification," said Jack Elliott, president and CEO of Cohen & Grigsby. "The successful operation of the bankruptcy system depends on the involvement of attorneys with specialized knowledge, and the certification process provides a meaningful and objective measure of their skill and expertise in the bankruptcy field." ABC provides a public service by enabling potential clients to choose highly qualified bankruptcy and creditors' rights counsel. ABC certification encourages attorneys to strive for excellence and recognizes those who have met the rigorous ABC standards. Attorneys must undergo a recertification process every five years. Maxson is a director in the Bankruptcy & Creditors' Rights and Litigation Practice Groups, representing clients in various aspects of commercial law. His practice includes secured lending transactions, bankruptcy, preference and fraudulent transfer actions, mortgage foreclosures, enforcement of judgments, contract litigation, collection matters, commercial lien disputes, and general corporate transactions. Maxson is a member of the American Bankruptcy Institute and the Allegheny County Bar Association's Bankruptcy and Commercial Law Section. He is admitted to practice before the U. S. Courts of Appeal for the Third and Sixth Circuits; The Pennsylvania Supreme Court, as well as the U. S. District Courts for the Western District of Pennsylvania and the Western District of Michigan. He received his J.D. from the University of Pittsburgh School of Law and a bachelor's degree in economics from Indiana University at Bloomington. Kelleher chairs the Bankruptcy & Creditors' Rights Group, which concentrates on all aspects of bankruptcy, creditors' rights, financing transactions and commercial law, as well as litigation. Kelleher earned his J.D. from the Duquesne University School of Law and his B.A. in economics and political science from the University of Pittsburgh. He is admitted to practice before multiple courts, including the U.S. Supreme Court; the U.S. Courts of Appeal for the Third, Fifth, Sixth and Eleventh Circuits; the Supreme Court of Pennsylvania; and the U.S. District Courts in the Western and Middle Districts of Pennsylvania and the Western and Eastern Districts of Michigan. Kelleher is a member of the American Bankruptcy Institute, the American Bar Association and is a past Chair of the Allegheny County Bar Association's Bankruptcy and Commercial Law Section. He is a Master in the Western Pennsylvania Bankruptcy American Inn of Court. He is listed by The Best Lawyers in America(R) in Bankruptcy and Creditor - Debtor Rights Law, and also has been named a "Pennsylvania Super Lawyer" by Philadelphia Magazine. About Cohen & Grigsby Established in 1981 in Pittsburgh, PA, Cohen & Grigsby is a business law firm with headquarters in Pittsburgh and an office in Bonita Springs, FL. Cohen & Grigsby attorneys cultivate a culture of performance by serving as business counselors as well as legal advisors to an extensive list of clients that includes private and publicly held businesses, nonprofits, multinational corporations, individuals and emerging companies. The firm has more than 130 lawyers in eight practice groups - Business & Tax, Labor & Employment, Immigration/International Business, Real Estate, Intellectual Property, Litigation, Bankruptcy & Creditors' Rights, and Estates & Trusts. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- A&W REV ROYAL-UT AW-U CN 179.2 (147.6) 3.6 ABSOLUTE SOFTWRE ABT CN 116.3 (12.0) (12.6) ACCO BRANDS CORP ABD US 1,094.2 (77.0) 293.1 ALASKA COMM SYS ALSK US 609.8 (27.4) 6.3 AMER AXLE & MFG AXL US 2,167.8 (415.4) 60.4 AMR CORP AMR US 27,113.0 (3,949.0) (1,028.0) ANOORAQ RESOURCE ARQ SJ 1,024.0 (77.0) 20.9 AUTOZONE INC AZO US 5,884.9 (1,119.5) (655.3) BLUEKNIGHT ENERG BKEP US 323.5 (35.1) (85.8) BOSTON PIZZA R-U BPF-U CN 148.2 (100.1) 1.3 CABLEVISION SY-A CVC US 8,962.9 (6,462.4) (309.5) CC MEDIA-A CCMO US 16,938.6 (7,280.4) 1,644.2 CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) CENVEO INC CVO US 1,439.5 (333.5) 208.1 CHENIERE ENERGY CQP US 1,776.3 (547.6) 24.4 CHENIERE ENERGY LNG US 2,564.4 (509.7) 87.4 CHOICE HOTELS CHH US 412.4 (49.0) (1.9) CLOROX CO CLX US 4,051.0 (82.0) (28.0) COLUMBIA LABORAT CBRX US 27.8 (2.6) 11.5 CUMULUS MEDIA-A CMLS US 318.9 (324.4) 12.4 DENNY'S CORP DENN US 296.8 (102.3) (36.9) DIRECTV-A DTV US 20,593.0 (678.0) 2,813.0 DISH NETWORK-A DISH US 10,280.6 (502.5) 705.1 DISH NETWORK-A EOT GR 10,280.6 (502.5) 705.1 DOMINO'S PIZZA DPZ US 487.4 (1,167.7) 167.9 DUN & BRADSTREET DNB US 1,825.5 (615.8) (321.8) EASTMAN KODAK EK US 5,882.0 (1,274.0) 954.0 EPICEPT CORP EPCT SS 12.4 (6.0) 6.0 EXELIXIS INC EXEL US 495.7 (68.7) 126.1 FREESCALE SEMICO FSL US 4,097.0 (5,076.0) 1,468.0 GENCORP INC GY US 989.6 (177.7) 83.8 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GRAHAM PACKAGING GRM US 2,943.5 (501.5) 313.1 HANDY & HARMAN L HNH US 372.2 (23.9) 13.2 HCA HOLDINGS INC HCA US 23,809.0 (7,788.0) 2,719.0 HOVNANIAN ENT-B HOVVB US 1,670.1 (401.3) 1,042.4 IDENIX PHARM IDIX US 54.9 (40.6) 19.6 INCYTE CORP INCY US 459.6 (104.0) 315.8 IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 131.7 (161.7) 6.6 JUST ENERGY GROU JE CN 1,760.9 (328.6) (339.4) KNOLOGY INC KNOL US 823.7 (4.0) 42.7 KV PHARM-A KV/A US 296.2 (233.4) (134.5) KV PHARM-B KV/B US 296.2 (233.4) (134.5) LIN TV CORP-CL A TVL US 797.4 (127.9) 38.6 LIZ CLAIBORNE LIZ US 1,255.8 (124.5) (26.5) LORILLARD INC LO US 3,590.0 (449.0) 1,290.0 MAINSTREET EQUIT MEQ CN 453.0 (10.2) - MANNKIND CORP MNKD US 254.8 (203.5) 26.2 MEAD JOHNSON MJN US 2,465.4 (250.4) 572.3 MERITOR INC MTOR US 2,675.0 (1,006.0) 205.0 MOODY'S CORP MCO US 2,524.4 (223.2) 498.6 MORGANS HOTEL GR MHGC US 692.8 (29.2) 205.1 NATIONAL CINEMED NCMI US 796.4 (327.0) 74.0 NAVISTAR INTL NAV US 9,279.0 (832.0) 2,002.0 NEXSTAR BROADC-A NXST US 582.6 (181.2) 40.0 NPS PHARM INC NPSP US 158.3 (159.7) 117.8 NYMOX PHARMACEUT NYMX US 10.0 (3.3) 6.8 ODYSSEY MARINE OMEX US 25.7 (8.1) (14.0) OTELCO INC-IDS OTT US 319.2 (7.6) 22.4 OTELCO INC-IDS OTT-U CN 319.2 (7.6) 22.4 PALM INC PALM US 1,007.2 (6.2) 141.7 PDL BIOPHARMA IN PDLI US 248.7 (371.2) (161.6) PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PRIMEDIA INC PRM US 208.0 (91.7) 3.6 PROTECTION ONE PONE US 562.9 (61.8) (7.6) QUALITY DISTRIBU QLTY US 281.4 (124.4) 40.9 QUANTUM CORP QTM US 431.0 (61.1) 97.9 QWEST COMMUNICAT Q US 16,849.0 (1,560.0) (2,828.0) RADNET INC RDNT US 556.6 (81.8) 11.0 REGAL ENTERTAI-A RGC US 2,323.2 (541.6) (114.5) RENAISSANCE LEA RLRN US 49.9 (31.4) (36.6) REVLON INC-A REV US 1,105.5 (686.5) 132.7 RSC HOLDINGS INC RRR US 2,817.4 (62.2) (71.6) RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SALLY BEAUTY HOL SBH US 1,707.0 (340.6) 418.5 SINCLAIR BROAD-A SBGI US 1,571.2 (144.6) 60.4 SINCLAIR BROAD-A SBTA GR 1,571.2 (144.6) 60.4 SMART TECHNOL-A SMT US 546.2 (43.3) 173.7 SMART TECHNOL-A SMA CN 546.2 (43.3) 173.7 SPIRIT AIRLINES SAVE US 545.2 (97.0) 27.6 SUN COMMUNITIES SUI US 1,160.1 (111.7) - SWIFT TRANSPORTA SWFT US 2,555.7 (9.8) 204.6 TAUBMAN CENTERS TCO US 2,535.6 (512.8) - TEAM HEALTH HOLD TMH US 832.2 (25.7) 44.8 THERAVANCE THRX US 315.1 (27.8) 266.9 TOWN SPORTS INTE CLUB US 460.0 (4.7) (15.4) UNISYS CORP UIS US 2,949.3 (692.1) 547.6 UNITED RENTALS URI US 3,692.0 (29.0) 123.0 US AIRWAYS GROUP LCC US 8,217.0 (30.0) (104.0) VECTOR GROUP LTD VGR US 924.6 (61.4) 294.8 VENOCO INC VQ US 815.6 (21.6) 8.1 VERISK ANALYTI-A VRSK US 1,286.4 (109.1) (180.8) VERSO PAPER CORP VRS US 1,458.2 (49.2) 169.5 VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) VONAGE HOLDINGS VG US 251.7 (102.0) (39.2) WARNER MUSIC GRO WMG US 3,617.0 (254.0) (650.0) WEIGHT WATCHERS WTW US 1,126.0 (636.6) (345.4) WESTMORELAND COA WLB US 788.0 (173.9) (1.0) WORLD COLOR PRES WC CN 2,641.5 (1,735.9) 479.2 WORLD COLOR PRES WCPSF US 2,641.5 (1,735.9) 479.2 WORLD COLOR PRES WC/U CN 2,641.5 (1,735.9) 479.2 ********* 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 ***