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/raid1/www/Hosts/bankrupt/TCR_Public/110624.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, June 24, 2011, Vol. 15, No. 173 Headlines 4KIDS ENTERTAINMENT: Selects BDO Capital as Fin'l Advisors ALLEN FAMILY: Rival Mountaire Farms to Buy Most of Assets AMERICAN SCIENTIFIC: Enters Into NSOs with Two Directors ANGARAKA LIMITED: Court Moves Case Dismissal Hearing to July 25 ANGARAKA LIMITED: Court Defers Chapter 11 Plan Hearing to July 25 ANGELO & MAXIE'S: Sells and Sets Aug. 3 Confirmation ANNA NICOLE SMITH: Supreme Court Rejects $449-Mil. Inheritance APPLIED MINERALS: Four Directors Elected at Annual Meeting ART ONE: Court Junks Cash Collateral Motion as Moot BANKRATE INC: S&P Upgrades Corporate Credit Rating to 'BB-' BERNARD L MADOFF: Feeder Funds Alter $212 Million Settlement BLOCKBUSTER INC: Icahn Loses Bid for Sanctions vs. Small Law Firm BOCA BRIDGE: Can Use Cash Collateral Until June 30 BOOMERANG SYSTEMS: To Effect 1-for-20 Reverse Stock Split BROADVIEW NETWORKS: Moody's Cuts Corp. Family Rating to 'Caa1' CAPMARK FINANCIAL: Court Approves Sale of Loans to Bancorp CATALYST PAPER: To Assess Improvements to Capital Structure CAVICO CORP: Receives NASDAQ Non-Compliance Notice CDC PROPERTIES II: Files Schedules of Assets & Liabilities CIT GROUP: Sues Tyco to Halt End-Run on Chapter 11 Plan CLAUDIO OSORIO: Investor Opposes Discharge of $4 Mil. Debt CLEARWATER NATURAL: Howell-Kinzer Loses Bid to Reinstate Claim CLS RENTAL: Owner of Nashville Properties in Chapter 11 CONOLOG CORPORATION: Posts $349,600 Net Loss in April 30 Quarter CRACKER BARREL: S&P Affirms 'BB-' Corporate Credit Rating CROWN MEDIA: Plans to Offer $300 Million of Senior Notes Due 2019 CYBEX INTERNATIONAL: Gets Non-Compliance Notice from NASDAQ DELTA AIR LINES: Fitch Affirms 'B-' Issuer Default Rating DELTRON INC: Chris Kelliher as Board Member DOLE FOOD: Moody's Rates Senior Secured Term Loans 'Ba2' DOWLING COLLEGE: Moody's Maintains 'B3' Bond Rating on Watchlist DRUMM INVESTORS: S&P Assigns 'B+' Corporate Credit Rating DYNA-GO PROPERTIES: Trustee Approves Appraiser for Land Swap DYNEGY INC: Seven Directors Elected at Annual Meeting E.DIGITAL CORPORATION: Recurring Losses Prompt Going Concern Doubt EL PASO PIPELINE: S&P Affirms Issue-Level Rating at 'BB' ELLICOTT SPRINGS: Kutner Miller Removed from Reorganization Case EMMIS COMMUNICATIONS: To Sell Controlling Interest in Stations ENCOMPASS GROUP: J.H. Cohn LLP Raises Going Concern Doubt EVANS INDUSTRIES: 5th Cir. Says Insurance Transferred to Buyer EVANS OIL: Has Until July 14 to Propose Chapter 11 Plan FAIRFAX CROSSING: Modifies Second Amended Plan FKF MADISON: Committee Seeks More Time to Challenge Lender's Liens FRASSATI RESIDENCE: Moody's Upgrades Letter of Credit Rating GAMETECH INT'L: Amends Loan Agreement with U.S. Bank, et al. GENERAL MOTORS: Dist. Court Says Ex-Employee's Suit Can't Proceed GRAHAM PACKAGING: Fitch Revises Watch Status on 'B' IDR to Neg. GRAMERCY PARK: Stay Lifted on Sole Assets, Wants Case Dismissed GRAPHIC PACKAGING: S&P Upgrades Corporate Credit Rating to 'BB' GRUBB & ELLIS: Rispoli & Engel to Receive Transaction Bonuses GSC GROUP: Settles With SEC Over Magnetar CDO Disclosure HAWAIIAN TELCOM: Moody's Assigns 'B1' Corporate Family Rating HILL TOP: To Sell Assets to Weatherford Artificial for $3.7MM HINESLEY FAMILY: Founder's Son Allowed $92,200 Gen. Unsec. Claim HONDO MINERALS: Posts $376,800 Net Loss in April 30 Quarter HORIZON BANCORP: Six Directors Elected at Annual Meeting INDIANA EQUITY: Court Approves Crane Heyman as Attorneys INDIANA EQUITY: Files Schedules of Assets And Liabilities INNKEEPERS USA: Shareholders Defend $3.5 Million from Plan JACKSON HEWITT: Trustee Forms Three-Member Creditors Committee JACKSON HEWITT: Committee to Fight Reorganization Plan L-1 IDENTITY: S&P Lowers Corporate Credit Rating to 'B' LAS VEGAS MONORAIL: To Present Plan for Confirmation on Sept. 14 LAS VEGAS MONORAIL: Receives Tentative Nod of Plan Outline LE-NATURE'S INC: Podlucky Pleads Guilty to Fraud Charges LOUISIANA TRANPORTATION: Fitch Downgrades Loan Rating to 'B-' MARVKY CORP: Court Confirms Third Amended Plan MIDWEST THEATRES: Converted to Ch. 7; Theatres to Remain Open NEWPORT TELEVISION: S&P Affirms 'B-' Corporate Credit Rating NO FEAR RETAIL: Seeks Termination of Foreign Trademark Rights NUANCE COMMUNICATIONS: S&P Keeps 'BB-' Corporate Credit Rating OLSEN AGRICULTURAL: To Tap Lender's Cash Collateral PARLIAMENT COACH: Settles With Creditors to Emerge From Bankruptcy PATRICIA KLUGE: Files for Chapter 7 Bankruptcy Protection PARTSEARCH TECHNOLOGIES: WARN Suit Accord Approved on Final Basis PETRA FUND: Parent Puts Two Properties on Auction Block PHILADELPHIA ORCHESTRA: Bankrupt But CEO Gets $597,000 A Year PHILADELPHIA ORCHESTRA: Committee Taps Deloitte Fin'l Advisor PHILADELPHIA ORCHESTRA: Morgan Lewis OK'd for ERISA Advice PHILADELPHIA ORCHESTRA: Center Members Name New Directors PILGRIM'S PRIDE: Won't Violate Debt Covenants, CEO Says PIONEER VILLAGE: Emerges From Chapter 11 Bankruptcy Protection PJ FINANCE: Wants Lease Decision Period Extended Until Oct. 3 PLATINUM PROPERTIES: PPV Files Schedules of Assets and Liabilities PRM DEVELOPMENT: Court Confirms Third Amended Plan PROJECT ORANGE: Wins Court Approval of Creditor-Payment Plan PSGAMEGEAR SPORTS: Files For Chapter 11 Bankruptcy Protection R. SHAWN ELLIS: Elk Valley Cautions Investors on New Venture RAY ANTHONY: Seeks to Sell Equipment to Red White for $9.6MM RAY ANTHONY: Wins Nod to Hire Swartz Campbell as Special Counsel RAY ANTHONY: Court Lifts Stay for Liquidation of Collateral RASER TECHNOLOGIES: Plan to Give 100% of Equity to Linden, et al. READER'S DIGEST: S&P Affirms 'B' Corporate Credit Rating RIVIERA HOLDINGS: Moody's Assigns 'B3' Corporate Family Rating ROBB & STUCKY: Samson Chair Buys Name, Other IP Assets ROTHSTEIN ROSENFELDT: US Doesn't Want Rothstein Deposed by Others ROTHSTEIN ROSENFELDT: Judge OKs Settlement With Kimberly ROZANNA MULHOLLEN: Lender Still Awaiting for Fin'l Documents ROOSEVELT LOFTS: To Sell Assets to Greystar for $95 Million RICHARD HAISFIELD: Creditor Wants Liquidation to Pay Claims ROBINO BAY COURT: Seeks Approval to Sell Substantially All Assets ROCHA DAIRY: U.S. Trustee Forms 5-Member Creditors' Panel ROSSCO HOLDINGS: Hearing on College Station Sale Reset to June 28 RUDERMAN CAPITAL: Poker Losses Partly Recovered in Fraud Lawsuit SATELITES MEXICANOS: Incurs $13.88 Million Net Loss in 2010 SEARS HOLDINGS: Fitch Downgrades 'B' Issuer Default Rating SECOND AVENUE: To Remain Open Through Bankruptcy SECURESOLUTIONS LLC: Cites Effects of 2006 Fraud for Woes SHAMROCK-SHAMROCK: Seeks to Employ Sue Ranto as Accountant S.H.S. RESORT: Judge Williamson Approves Restructuring Plan SIX FLAGS: Files S-3 for Shares Distributed After Emergence SKY LOFTS: Files 2nd Amended Chapter 11 Plan SONJA MORGAN: Appeals Court Upholds $7-Mil. Ruling Against Her SONFISH LLC: To Close Four to Six Locations SOUTH OF THE STADIUM: Chapter 11 Filing Delays Foreclosure SUPER STOP: Owners of 8 Gas Stations in Chapter 11 SOMERSET PROPERTIES: Court Enters 7th Interim Cash Coll. Order SPOT MOBILE: Incurs $1.25 Million Net Loss in April 30 Quarter STRATEGIC AMERICAN: Incurs $8.3-Mil. Net Loss in April 30 Qtr. STRATUS MEDIA: Secures 95% Ownership of ProElite SUD PROPERTIES: Leland, NC Developer in Chapter 11 SYMBION INC: S&P Raises Corporate Credit Rating to 'B' TARRAGON CORP: CB Richard Acquires 800 Madison Luxury Building TERRESTAR NETWORKS: Dish's $1.375-Bil. Offer to Lead Auction THORNBURG MORTGAGE: Trustee Investigates BofA and Countrywide TIMOTHY BLIXSETH: CrossHarbor Buys Yellowstone Club Compound TODD BRUNNER: Real Estate Owner Filed Personal Bankruptcy Case TOM LOCHTEFELD: July 1 Hearing on Key Lease Dispute TRANS-LUX: Board Approves Comprehensive Restructuring Package TRANSWEST RESORT: Gets Extension to Use Cash Coll. Until Sept. 1 TRICO MARINE: Has Final OK to Use Cash Collateral Until July 31 TRICO MARINE: Court to Tackle Tennenbaum Claims at July 18 Hearing TRUE NORTH: Has Disputes With Competitor, Big Law Firm UBRAN BRANDS: Wants Until July 20 to File Chapter 11 Plan US AIRWAYS: S&P Assigns Prelim. B Rating on Class C Certificates US AIRWAYS: Moody's Assigns 'B3' Rating to Class C Certificates USA SPRINGS: Plans to Borrow $60 Million From Malom Group VALENCE TECHNOLOGY: Enters Into Amendment No.4 to Wm Sales Pact VENTO FAMILY: Gets OK to Use Rental Income to Fund Bankruptcy VICTORVILLE PARTNERS: Files for Chapter 11 Bankruptcy Protection VICTOR VALLEY: 2nd Amended Liquidating Plan Approved VILICA LLC: Court Approves Coldwell Banker as Real Estate Broker VILICA LLC: Court Approves Weaverville as Real Estate Broker W&K STEEL: Judge Orders Chapter 7 Liquidation WAGSTAFF MINNESOTA: Committee Taps Freeborn & Peters as Counsel WASHINGTON MUTUAL: Investors Renew Fight For Insider Trading Docs WASHINGTON MUTUAL: Noteholders Group Object to Sixth Amended Plan WCK INC: Files List of Largest Unsecured Creditors WESTRIM INC: Die Cuts Purchases Assets & IP Property of Blue Moon WORLDGATE COMMUNICATIONS: J. Calarco Resigns as Controller & VP Z TRIM HOLDINGS: Inks 3-Year Agreement with Dept. of Agriculture ZOEY ESTATES: Files List of Largest Unsecured Creditors * Court Decision Maintains Limits on Specialty Court Authority * 10th Circuit Sides With 9th on Supreme Court Question * JPMorgan, RBS Units Sued Over $800M in Risky MBS * State to Take Charge of Turning Around Detroit's Worst Schools * Bridgewater Associates Launches Largest New Hedge Fund * Kramer Levin Named Law Firm of the Year by ACG/M&A Advisor * BOOK REVIEW: Courts and Doctors ********* 4KIDS ENTERTAINMENT: Selects BDO Capital as Fin'l Advisors ---------------------------------------------------------- 4Kids Entertainment, the global children's entertainment and merchandise licensing company, announced that it has selected BDO Capital Advisors, LLC as its exclusive financial advisor and investment banker to assist the Company through a Chapter 11 restructuring. 4Kids Entertainment, Inc., together with certain of its affiliates, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York on April 6, 2011. On June 21, 2011, the Bankruptcy Court approved the retention of BDO Capital as the exclusive financial advisor and investment banker to 4Kids. "We selected BDO Capital to assist us based on their extensive knowledge and experience with the Chapter 11 process and their recent success in the children's media space," said Bruce Foster, Executive Vice President and Chief Financial Officer of 4Kids. BDO Capital advised the debtor in the Chapter 11 filing of WordWorld, LLC, a children's media and education company that resulted in an investment of fresh capital from a large institutional investor. "We were pleased with the response by the capital markets in the children's media space in WordWorld, and we look forward to re-engaging with interested parties on behalf of 4Kids," said Jeffrey R. Manning, a Managing Director at BDO Capital and head of its special situations practice. Jeffrey T. Varsalone, a Director at BDO Capital echoed Manning's sentiments, adding "We have already received reverse inquiries from interested parties. BDO Capital is working with the Company on refining the business model for the future, and together we are starting to reach out to key partners to discuss the restructuring and timing of the potential recapitalization. We will also be exploring other strategic alternatives for the Company," said Varsalone. "We are excited about the future of 4Kids," said Foster. "We look forward to emerging from Chapter 11 well positioned to capitalize on future opportunities." About 4Kids Entertainment New York-based 4Kids Entertainment, Inc., dba 4Kids, is a diversified entertainment and media company specializing in the youth oriented market, with operations in the following business segments: (i) licensing, (ii) advertising and media broadcast, and (iii) television and film production/distribution. The parent entity, 4Kids Entertainment, was organized as a New York corporation in 1970. 4Kids Entertainment, along with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-11607) on April 6, 2011. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims and notice agent. The Debtors disclosed $23,372,877 in total assets and $16,526,747 in total debts as of the Chapter 11 filing. An official committee of unsecured creditors has not yet been appointed by the Office of the United States Trustee. ALLEN FAMILY: Rival Mountaire Farms to Buy Most of Assets --------------------------------------------------------- Deborah Gates at DelmarvaNow.com reports that Mountaire Farms Inc. has a purchase agreement to buy most assets of local competitor Allen Family Foods Inc. of Seaford. Seaford Milling Co., a newly formed affiliate of Mountaire Farms of Delaware Inc., would buy Allen hatcheries in Seaford and Dagsboro, the Seaford administrative office, a Seaford feed mill, processing plants in Harbeson and Cordova and a rendering plant called JCR Enterprises in Linkwood. According to the report, a bankruptcy court is expected to decide in up to 45 days on a bidding process for Allen assets and the purchase agreement between Mountaire and Allen, said Michael Tirrell, vice president of human resources and business services at Mountaire in Millsboro. About Allen Family Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry company. Allen Family Foods, along with two affiliates, filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-11764) on June 9, 2011. It estimated assets and liabilities between $50 million and $100 million in its petition. Affiliates that filed separate Chapter 11 petitions are Allen's Hatchery Inc. and JCR Enterprises Inc. Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as counsel to the Debtors. BMO Capital Markets is the Debtors' investment banker. Epiq Systems, Inc., is the claims and notice agent. AMERICAN SCIENTIFIC: Enters Into NSOs with Two Directors -------------------------------------------------------- American Scientific Resources, Incorporated, entered into a Non- qualified Stock Option Agreement with each of Mr. Thomas W. Materna, a director of the Company, and Mr. Felix Reznick, also a director of the Company. Pursuant to their respective NSO's, Mr. Materna and Mr. Reznick were granted a non-qualified stock purchase option to purchase up to an aggregate of 260,000 shares and 650,000 shares, respectively, of common stock, par value $0.0001, of the Company. Subject to the terms and conditions of the American Scientific Resources, Inc., 2011 Incentive Stock Plan, the Non-qualified Options vest immediately upon issuance and have an exercise price of $0.40, which is at least 100% of the closing price. The NSO Exercise price may be paid, among other things, on a cashless basis, and are exercisable during the term that the Optionee serves as a director. The Non-qualified Options expire, and all rights to purchase the NSO Shares shall terminate, on June 9, 2016. Upon (i) the occurrence certain circumstances described in the NSO, the Company may repurchase all or any portion of the NSO Shares of an Optionee, at the applicable price set forth in the NSO. In the event that an Optionee desires to transfer any NSO Shares during such Optionee's lifetime, the Optionee shall first offer to sell such NSO Shares to the Company. The Company entered into an Incentive Stock Option Agreement with Mr. Christopher F. Tirotta, the Company's Chief Executive Officer, and Mr. Jason Roth, the Company's Senior Vice President and Director of Business Development. Pursuant to their respective ISO's, each ISO Optionee was granted incentive stock purchase options to purchase up to an aggregate of 1,300,000 shares of common stock, par value $0.0001, of the Company. Subject to the terms and conditions of the Plan, the Incentive Stock Options vest immediately upon issuance, have an exercise price of $0.40, which is at least 110% of the closing price. The Incentive Stock Options are exercisable during the term that the Optionee is an employee of the Company. The Incentive Stock Options shall expire, and all rights to purchase the ISO Shares shall terminate on, June 9, 2016. Under certain circumstances described in the ISO's, the Company may repurchase all or any portion of the ISO Shares of an ISO Optionee at the applicable price set forth in the ISO. In the event that an ISO Optionee desires to transfer any ISO Shares during his lifetime, such ISO Optionee will first offer to sell his ISO Shares to the Company. On June 10, 2010, the Company entered into an Incentive Stock Option Agreement with Mr. Christopher F. Tirotta, the Company's Chief Executive Officer, and Mr. Jason Roth, the Company's Senior Vice President and Director of Business Development. About American Scientific Weston, Fla.-bases American Scientific Resources, Inc., provides healthcare and medical products. The Company develops, manufactures and distributes healthcare and medical products primarily to retail drug chains, retail stores specializing in sales of products for babies and medical supply dealers. The Company does sub-component assembly and packaging for the Disintegrator product line. All of the Company's other products are manufactured by third parties. The Company was comprised of three subsidiaries: (i) Kidz-Med, Inc., (ii) HeartSmart, Inc., and (iii) Ulster Scientific, Inc., of which only Kidz-Med was active until Dec. 31, 2010. All subsidiaries are currently inactive. The Company's balance sheet at March 31, 2011, showed $1.0 million in total assets, $6.0 million in total liabilities, and a stockholders' deficit of $5.0 million. Rosenberg Rich Baker Berman & Company, in Somerset, New Jersey, expressed substantial doubt about American Scientific Resources' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has suffered recurring losses, its current liabilities exceed its current assets and it is in default with certain of its obligations. ANGARAKA LIMITED: Court Moves Case Dismissal Hearing to July 25 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District Of Texas continued until July 25, 2011, at 10:30 a.m., (prevailing central time), the hearing to consider Texas Comptroller of Public Accounts' request to dismiss the Chapter 11 case of Angaraka Limited Partnership. In February, the Texas Comptroller filed a motion seeking a dismissal of the Chapter 11 case. The Texas Comptroller explained that under the Texas Business Organizations Code, an entity that has had its corporate charter forfeited is required to wind up its operations and cease operating its business in the ordinary course, except to the extent necessary to wind up its business. It added that while the Debtor, a dissolved Texas partnership on the Petition Date, is permitted to file bankruptcy to propose a liquidating plan under Chapter 11 or a Chapter 7 liquidation, it is not eligible to file a plan of reorganization under Chapter 11 to carry on its business. About Angaraka Limited Partnership Newport Beach, California-based Angaraka Limited Partnership, in November 2005, acquired and assumed indebtedness secured by, among other things, a Deed of Trust on four, Class B/C, garden-apartment properties located in the Dallas/Fort-Worth Metroplex. The Properties -- Woodchase, Clarendon, Keller Oaks, and Sycamore Hills -- total 750 units and range in date of construction from 1979 to 1983. The Company filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-33868) on May 31, 2010. Vincent P. Slusher, Esq., and J. Seth Moore, Esq. at DLA Piper LLP US, in Dallas, Texas, assist the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million. ANGARAKA LIMITED: Court Defers Chapter 11 Plan Hearing to July 25 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas continued the hearing on the confirmation of Angaraka Limited Partnership and C-III Asset Management LLC's proposed Chapter 11 plan of reorganization until July 25, 2011, at 10:30 a.m. As reported in the May 11, 2011 edition of the Troubled Company Reporter on May 11, 2011, the parties are set to conduct discovery in connection with C-III Asset's objection to the Debtor's proposed plan, and need additional time to complete the discovery prior to the confirmation hearing. Angaraka and C-III Asset were set to conduct discovery next week, during which expert reports will be exchanged. Depositions will be conducted in the subsequent three weeks. Last year, the Debtor filed a proposed plan that contemplates that the Debtor will continue to operate the business and will payoff claims from funds generated from business operations. Under the plan, the lender will receive a note in the amount due of its secured claim, with the note payable over 24 months, and bearing interest at a rate of 4.35% per year. Each holder of an allowed unsecured claim will receive over a period of six months from the Effective Date, two equal payments payable on each quarterly distribution date until the claim is paid in full. The holders of equity interests will retain their interests in the reorganized Debtor. A full-text copy of the explanatory disclosure statement is available for free at http://bankrupt.com/misc/AngarakaLimited_DS.pdf About Angaraka Limited Partnership Newport Beach, California-based Angaraka Limited Partnership, in November 2005, acquired and assumed indebtedness secured by, among other things, a Deed of Trust on four, Class B/C, garden-apartment properties located in the Dallas/Fort-Worth Metroplex. The Properties -- Woodchase, Clarendon, Keller Oaks, and Sycamore Hills -- total 750 units and range in date of construction from 1979 to 1983. The Company filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-33868) on May 31, 2010. Vincent P. Slusher, Esq., and J. Seth Moore, Esq. at DLA Piper LLP US, in Dallas, Texas, assist the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $10 million to $50 million. ANGELO & MAXIE'S: Sells and Sets Aug. 3 Confirmation ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Angelo & Maxie's will hold a confirmation hearing on its reorganization plan on Aug. 3, according to Jonathan Pasternak, a lawyer for the restaurant. A bankruptcy judge ruled at a June 21 hearing that he will approve the explanatory disclosure statement, Mr. Pasternak said in an e-mail. Mr. Rochelle recounts that the restaurant sold the business to Landry's Restaurants Inc. Landry's, based in Houston, paid about $3 million for the 230-seat restaurant. From the total, $1.19 million covered secured debt that Landry's acquired while $160,000 was set aside for unsecured creditors and $225,000 went toward expenses of the Chapter 11 case. An additional $339,000 was used to cure breaches of the lease. According to the report, unsecured creditors with about $530,000 in claims are to split up the $160,000, plus recoveries from lawsuits. The official creditors' committee supports the plan, Mr. Pasternak said. Angelo & Maxie's, LLC, owns and operates Angelo & Maxie's, a deco-style steakhouse at 19th Street and Park Avenue South in Manhattan. The Company filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 11-11112) in Manhattan on March 14, 2011. Dawn K. Arnold, Esq., at Rattet Pasternak, LLP, in Harrison, New York, serves as counsel. The Debtor estimated up to $1 million in assets and debts of $1 million to $10 million as of the Chapter 11 filing. ANNA NICOLE SMITH: Supreme Court Rejects $449-Mil. Inheritance -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Supreme Court, for the second time in less than 30 years, ruled that Congress violated the Constitution by giving too much power to bankruptcy judges. The case involved the late Anna Nicole Smith, a former Playboy model, and the estate of J. Howard Marshall, a Texas billionaire to whom she was briefly married. The 5-4 decision clamps down on the ability of bankruptcy judges to make rulings on disputes governed by state law. The decision "passes the ball back to Congress and the Judicial Conference to try to figure how to administer the bankruptcy system efficiently," said Jay Westbrook, a law professor at the University of Texas in Austin. The ruling also ended any chance for Smith's heirs to collect a $449 million judgment against the Marshall estate, said Eric Brunstad, a lawyer for the estate with Dechert LLP in Hartford, Connecticut, and a professor at Yale Law School. Mr. Rochelle recounts that the Supreme Court ruled in 1982 that changes to bankruptcy law made in 1978 violated the Constitution, by giving bankruptcy judges powers that may be exercised only by so-called Article III district judges who have life tenure, are confirmed by the Senate, and are protected from having their salaries reduced. In the 1982 opinion, called Northern Pipeline, the court said bankruptcy law was unconstitutional because it gave bankruptcy judges the right to make final rulings on issues of state contract law. In Smith's bankruptcy, the Marshall estate filed a claim and Smith, in turn, filed a counterclaim for defamation against Marshall's son, the executor. Chief Justice John Roberts, in a 38-page opinion for the majority, ruled that Smith's counterclaim was a core proceeding as defined in bankruptcy law. That would entitle the bankruptcy judge to issue a final ruling. Chief Justice Roberts, though, said the law violated the Constitution by giving powers to the bankruptcy judge that are reserved for Article III judges. While Northern Pipeline argued that it was unconstitutional to allow bankruptcy judges to make final rulings on state-law contract claims, Justice Roberts said the same holds true for state-law tort claims such as defamation. Justice Stephen G. Breyer, in a 17-page dissenting opinion joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan, found no violation of the Constitution and said the 1984 law was in accord with the 1982 Northern Pipeline ruling. About Anna Nicole Smith Anna Nicole Smith, formally known as Vickie Lynn Hogan, filed under Chapter 11 in 1996 as part of a struggle over the estate of J. Howard Marshall, whom she married in 1994 when she was 26 and died barely a year after they were wed. Ms. Smith, a former Playboy model and actress, died in February 2007. Mr. Marshall left his estate to his son, E. Pierce Marshall, and nothing to Ms. Smith. Ms. Smith, alleging that her husband had promised to leave her a large share of the estate, won a ruling from a bankruptcy judge in 2000 awarding her $475 million from Mr. Marshall's estate. A federal judge in 2002 reduced that amount to $89 million. The U.S. Court of Appeals for the Ninth Circuit in San Francisco threw out the judgment in 2004, holding that the bankruptcy court didn't have jurisdiction over probate matters. The U.S. Supreme Court in May 2006 issued a decision, overruling the appeals court and finding that the bankruptcy court had jurisdiction, even though the issues also could have been decided in the Texas probate court. The Supreme Court remanded the case for the federal appellate court to decide whether her victory in the bankruptcy and district courts was knocked out because a Texas probate court had entered judgment first against her. On remand from the Supreme Court, the 9th Circuit issued its decision in March 2010, concluding that the bankruptcy court didn't have so-called core jurisdiction. The 9th Circuit noted that before the U.S. district court was able to enter judgment in her favor, the Texas probate court had entered judgment against her saying she was entitled to nothing from her deceased husband's estate. In September 2010, the Supreme Court agreed to take a second look at disputes arising in and related to Ms. Smith's 1996 bankruptcy case and her entitlement to payment of the $449 million bankruptcy court judgment. APPLIED MINERALS: Four Directors Elected at Annual Meeting ---------------------------------------------------------- Applied Minerals, Inc., held its 2011 Annual Meeting of Shareholders at Grand Hyatt New York, which was simultaneously webcast at www.virtualshareholdermeeting.com/AMNL2011. The Shareholders elected four members to the board of directors, each to serve until the next annual meeting of shareholders or until their successors are elected and qualified: (1) John Levy, (2) Evan Stone, (3) David Taft and (4) Andre Zeitoun. The Shareholders also ratified the appointment of PMB Helin Donovan as the Company's independent registered public accounting firm. About Applied Minerals New York City-based Applied Minerals, Inc. (OTC BB: AMNL) is a leading global producer of halloysite clay used in the development of advanced polymer, catalytic, environmental remediation, and controlled release applications. The Company operates the Dragon Mine located in Juab County, Utah, the only commercial source of halloysite clay in the western hemisphere. Halloysite is an aluminosilicate clay that forms naturally occurring nanotubes. The Company reported a net loss of $4.77 million for 2010, compared with a net loss of $6.77 million for 2009. The Dragon Mine property has yet to produce any significant revenue and, as such, the Company generated no gross profit for the twelve months ended Dec. 31, 2010, and 2009. The Company's balance sheet at March 31, 2011, showed $5.23 million in total assets, $5.77 million in total liabilities and a $543,994 total stockholders' deficit. As reported by the TCR on April 28, 2011, PMB Helin Donovan, LLP, in Spokane, Washington, after auditing the Company's financial statements for the year ended Dec. 31, 2010, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has an accumulated deficit from operations and a net deficiency in working capital. Applied Minerals in its Form 10-Q acknowledged that it has incurred material recurring losses from operations. At March 31, 2011, the Company had aggregate accumulated deficits prior to and during the exploration stage of $33,239,435, in addition to limited cash and unprofitable operations. For the period ended March 31, 2011 and 2010, the Company sustained net losses before discontinued operations of $1,343,240 and $1,084,299, respectively. These factors indicate that the Company may be unable to continue as a going concern for a reasonable period of time, according to the quarterly report. ART ONE: Court Junks Cash Collateral Motion as Moot --------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, dismissed ART One Hickory Corporation's motion for authority to use cash collateral as moot. The order came after the Court approved a stipulation resolving motion of Cathay Bank for orders (A) dismissing ART One Hickory Corporation's Chapter 11 case or, in the alternative, (B) (i) granting Cathay Bank relief from the automatic stay, as to the mortgaged properties, and (ii) prohibiting the Debtor from using Cathay Bank's cash collateral. As of the Petition Date, the total mortgage obligation due and owing to Cathay Bank is $18,049,592, plus accrued attorneys' fees and costs, along with post-petition interest, fees and costs as may be allowed. As stipulated, the parties, among others, agreed: -- The automatic stay is lifted as to Cathay Bank and the mortgaged properties to permit Cathay Bank to foreclose its liens. Upon the closing of the sale of the properties, the Debtor will collect, or cause to be collected, the rents from the properties and pay operating expenses from the collected rents pursuant to a cash collateral budget, mutually agreeable to the Debtor and Cathay Bank. -- The Debtor's Chapter 11 case is dismissed effective on July 31, 2011. -- The Debtor will cause Regis Property Management, LLC, to to take any and all actions necessary to insure that TCR, Prime, JMJ, UHF, Lawyers Assistance and the Law Offices vacate the properties on or before Aug. 31, 2011. -- Within 3 business days of the closing of the sale of the properties, Cathay Bank will report to the Debtor in writing the price paid at the foreclosure sale. Within 2 business days following the receipt of the Sales Report, the Debtor or Regis will turn-over, or cause to be turned-over, to Cathay Bank any and all cash collateral in their possession, including, without limitation, any rents and security deposits with respect to the properties. -- Effective upon the closing of the sale of the properties by Cathay Bank, and except as otherwise expressly provided, Cathay Bank and the Debtor forever release one another from all claims and obligations relating to the Financing Agreements; provided, however, the release provided by Cathay Bank does not release the Debtor from any and all claims and obligations with respect to any damage by the Debtor and the Debtor Related Entities with respect to the properties. Effective upon the closing of the sale of the properties by Cathay Bank, and except as otherwise expressly provided, Cathay Bank forever releases TCI from all claims and obligations relating to its guarantee of the obligations owed to Cathay under the Financing Agreements, including the obligations under the TCR Guaranty Agreements; provided, however, the release provided by Cathay Bank does not release TCR from any and all claims and obligations with respect to any damage by the Debtor and the Debtor Related Entities with respect to the properties. As reported in the TCR on June 1, 2011, Cathay Bank asked the Bankruptcy Court to dismiss the Chapter 11 case of ART One Hickory Corporation as it was filed in bad faith. Cathay Bank further asked that it be granted relief from the automatic stay to continue with the foreclosure/public auction of the real properties owned by the Debtor and upon which Cathay Bank holds liens. The real property are encumbered by, among other things, liens granted to Cathay Bank by the Debtor in connection with certain financing provided by Cathay Bank to the Debtor and over $1 million in tax lien. Cathay Bank said the case should be dismissed to stop the substantial and continuing diminution of the Debtor's bankruptcy estate as it continues to accrue substantial operating expenses without sufficient income to fund these expenditures. Cathay Bank relates that the Debtor lacks any reasonable likelihood of rehabilitation. About ART One Fort Worth, Texas-based ART One Hickory Corporation, aka ART Two Hickory Corporation owns two four-story office buildings in North Dallas, Texas. The first is located at 1800 Valley View Lane, Dallas, Texas 75234, and is approximately 102,612 square feet. The second is located at 1750 Valley View Lane, Dallas, Texas 75234, and is approximately 96,124 square feet. ART One filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 11-42024) on April 4, 2011. Robert A. Simon, Esq., and Spencer D. Solomon, Esq., at Barlow Garsek & Simon, LLP, in Fort Worth, Tex., serve as the Debtor's bankruptcy counsel. The Debtor disclosed $24,770,573 in assets and $19,558,705 in liabilities as of the Chapter 11 filing. BANKRATE INC: S&P Upgrades Corporate Credit Rating to 'BB-' ----------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit and existing secured debt ratings on North Palm Beach, Fla.-based Bankrate Inc. to 'BB-' from 'B'. "We also removed all existing ratings from CreditWatch, where they had been placed with positive implications on June 7, 2011," S&P related. "Additionally, we assigned Bankrate's $30 million superpriority revolving credit facility due July 15, 2015, our issue-level rating of 'BB+' (two notches higher than the corporate credit rating) with a recovery rating of '1', indicating our expectation of very high (90%-100%) recovery in the event of a default. We assigned the $70 million senior secured revolving credit facility due July 15, 2015, our issue level rating of 'BB-' (the same as the corporate credit rating) with a recovery rating of '4', indicating our expectation of average (30%-50%) recovery in the event of a default," S&P said. "We also raised the issue-level rating on the existing secured financing to 'BB-'. The recovery rating remains at '4'," according to S&P. "The 'BB-' corporate credit rating incorporates our assumption of moderate debt leverage over the intermediate term as Bankrate continues to benefit from the growth in online advertising," said Standard & Poor's credit analyst Andy Liu. "Our base case 2011 scenario assumes revenue growth of 60% leading to 54% growth in EBITDA, mainly as a consequence of the acquisition of NetQuote Holdings Inc. and CreditCards.com Inc. completed in 2010. Over the medium term, we are expecting mid- to high-single-digit percent organic revenue growth." The stable rating outlook reflects Standard & Poor's expectation that Bankrate will experience healthy growth over the medium term and that acquisitions will not significantly elevate debt leverage. BERNARD L MADOFF: Feeder Funds Alter $212 Million Settlement ------------------------------------------------------------ Hilary Russ at Bankruptcy Law360 reports that two bankrupt feeder funds for Bernard L. Madoff's massive Ponzi scheme proposed changes Tuesday in New York to a $212 million settlement to appease investors who had balked at the deal. According to Law360, Greenwich Sentry LP and Greenwich Sentry Partners LP said they had met with attorneys for various parties and decided to limit what had been an expansive injunction that would have barred anyone other than Irving Picard, the trustee overseeing the liquidation of Madoff's investment firm, from suing the two funds' management. 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. BLOCKBUSTER INC: Icahn Loses Bid for Sanctions vs. Small Law Firm ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Carl Icahn lost his bid June 22 to penalize a small law firm for filing an unsuccessful lawsuit against him in the Chapter 11 case of Blockbuster Inc. The suit, dismissed by the bankruptcy judge in March, alleged on unproven facts that Mr. Icahn had traded in Blockbuster securities using non-public information. The bankruptcy judge said sanctions weren't appropriate against McMillan Law Firm APC of La Mesa, California. The judge said the position taken by the firm was "supported somewhat by case law." About Blockbuster Inc. Based in Dallas, Texas, Blockbuster Inc. (Pink Sheets: BLOKA, BLOKB) -- http://www.blockbuster.com/-- is a global provider of rental and retail movie and game entertainment. It has a library of more than 125,000 movie and game titles. Blockbuster Inc. and 12 U.S. affiliates initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan (Bankr. S.D.N.Y. Case No. 10-14997) on Sept. 23, 2010. It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Blockbuster's non-U.S. operations and its domestic and international franchisees, all of which are legally separate entities, were not included in the filings and are not parties to the Chapter 11 proceedings. Martin A. Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. A steering group of senior secured noteholders is represented by James P. Seery, Esq., and Paul S. Caruso, Esq., at Sidley Austin LLP. U.S. Bank National Association as trustee and collateral agent for the senior secured notes is represented by David McCarty, Esq., and Kyle Mathews, Esq., at Sheppard Mullin Richter & Hampton LLP. BDO Consulting is the financial advisor for U.S. Bank. Lenders led by Wilmington Trust FSB are providing the DIP financing. The DIP Agent is represented by Peter Neckles, Esq. and Alexandra Margolis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York. The Official Committee of Unsecured Creditors has retained Cooley LLP as its counsel. The Bank of New York Trust Company, N.A., as trustee under that certain indenture, dated as of Aug. 20, 2004, with respect to the 9% Senior Subordinated Notes due 2012 issued by Blockbuster Inc., is represented by Edward P. Zujkowski, Esq., at Emmet, Marvin & Martin, LLP. The Ad Hoc Studio Committee of Blockbuster Inc. et al. is represented by Robert J. Feinstein, Esq., at Pachulski Stang Ziehl & Jones LLP. Blockbuster on Feb. 21, 2011, entered into an Asset Purchase and Sale Agreement providing for the sale of substantially all of their assets or the proceeds of those assets to a newly formed entity named Cobalt Video Holdco LLC. For purposes of entering into the Purchase Agreement, the Purchaser was established by Monarch Alternative Capital LP, Owl Creek Asset Management LP, Stonehill Capital Management, LLC, and Varde Partners, Inc. who collectively hold more than 50% of the Senior Secured Notes and each of which is a member of the Steering Committee. Cobalt Video Holdco LLC, the stalking horse purchaser, was represented by Mark Shinderman, Esq., at Milbank, Tweed, Hadley & McCloy LLP. Dish Network Corp. won an auction for Blockbuser Inc.'s assets with an offer having a gross value of $320 million. The sale was completed in April. BOCA BRIDGE: Can Use Cash Collateral Until June 30 -------------------------------------------------- Boca Bridge, LLC, and JMP Boca Bridge Lender, LLC, as assignee of NS/CS Boca, LLC, the Debtor's prepetition lender, ask the U.S. Bankruptcy Court for the Southern District of Florida, West Palm Beach Division, to approve a stipulation for the Debtor's continued use of cash collateral to make payments pursuant to a budget through and until June 30, 2011. A full-text copy of the stipulation and budget is available for free at http://ResearchArchives.com/t/s?7647 On August 19, 2010, 10 creditors owed $69,400 filed an involuntary Chapter 11 petition (Bankr. S.D. Fla. Case No. 10-34538) FOR Boca Bridge LLC, the owner of the Boca Raton Bridge Hotel. A federal bankruptcy judge in West Palm Beach, Florida entered a ruling placing Boca Bridge into Chapter 11. Harry J. Ross, Esq, in Boca Raton, serves as counsel to the petitioners. The creditors include Lundy Shacter, P.A., owed $21,713, and Arrow Security Corp., owed $15,118. BOOMERANG SYSTEMS: To Effect 1-for-20 Reverse Stock Split --------------------------------------------------------- Boomerang Systems, Inc., has filed a Certificate of Amendment to its Certificate of Incorporation to implement a 1-for-20 reverse stock split of its common stock, $0.001 par value per share. The Amendment became effective on June 20, 2011. The Amendment did not change the par value of the Company's Common Stock, which remains at $0.001 per share, or the number of shares of common stock the Company is authorized to issue, which remains at 400,000,000 shares. Stockholders of a majority of the Company's outstanding shares of Common Stock approved, by way of a written consent dated Jan. 19, 2011, proposals authorizing the Board of Directors, in its discretion, to implement the reverse split and file the Amendment. In addition, the Company mailed to its stockholders of record on Jan. 19, 2011, an information statement describing the reverse split. At the Effective Time, immediately and without further action by Boomerang's stockholders, every 20 shares of Boomerang's pre-split Common Stock, par value $0.001 per share, will automatically be converted into one share of post-split Common Stock, par value $0.001 per share. Accordingly, the Company's approximately 145.5 million pre-split shares of common stock outstanding will be combined into approximately 7.3 million post-split shares outstanding. The reverse stock split affects all issued and outstanding shares of the Company's Common Stock immediately prior to the Effective Time of the reverse stock split. In addition, proportional adjustments will be made to the Company's equity awards, outstanding warrants and convertible notes. The split-adjusted shares of Boomerang's Common Stock will begin trading on the OTCQB on Wednesday June 22, 2011, under the symbol "BMERD," with a "D" added for 20 trading days to signify that the reverse stock split has occurred. A new CUSIP number has been assigned to the Company's Common Stock as a result of the reverse split. American Stock Transfer & Trust Company, Boomerang's transfer agent, will act as exchange agent for the exchange. Stockholders will receive forms and notices to exchange their existing shares for new shares from the exchange agent or their broker. No fractional shares will be issued. Stockholders who otherwise would be entitled to receive fractional shares because they hold a number of shares not evenly divisible by 20, will automatically receive one whole share of Common Stock in lieu of the fractional share. Additional details related to the reverse stock split may be obtained from the Company's Information Statement (DEF-14C) dated Feb. 9, 2011. About Boomerang Systems Headquartered in Morristown, New Jersey, Boomerang Systems, Inc. (Pink Sheets: BMER) through its wholly owned subsidiary, Boomerang Utah, is engaged in the design, development, and marketing of automated racking and retrieval systems for automobile parking and automated racking and retrieval of containerized self-storage units. For the fiscal year ended Sept. 30, 2010, the Company had a net loss of $15,789,559 compared with a net loss of $9,693,734 during the prior year. Revenues were $718,530 for the fiscal year ended Sept. 30, 2010 compared with $0 for the fiscal year ended Sept. 30, 2009. The Company's balance sheet at March 31, 2011, showed $4.91 million in total assets, $4.47 million in total liabilities, and $440,063 in total stockholders' equity. Liebman Goldberg & Hymowitz, LLP, in Garden City, New York, expressed substantial doubt about the Company and its subsidiaries' ability to continue as a going concern, following its results for the fiscal year ended September 30, 2009. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency. BROADVIEW NETWORKS: Moody's Cuts Corp. Family Rating to 'Caa1' -------------------------------------------------------------- Moody's Investors Service downgraded Broadview Networks Holdings, Inc.'s $300 million senior secured debt (due 2012) to Caa1 (LGD-4, 54%)and downgraded the company's Corporate Family Rating and Probability of Default Rating to Caa1 from B3. The outlook has been changed to stable from negative. The $25 million ABL Revolver (approximately $17.1 million outstanding as of March 31, 2011) is not rated. The downgrade of Broadview's CFR reflects the recent announcement that its recent tender offer for the senior secured bonds due Sep 2012 has been canceled and Moody's expectation that the company will continue to face challenges driven by a highly levered balance sheet, strong market competition from other carriers and cable companies, and in Moody's opinion, the equity value in the capital structure could deteriorate if results should fall short of expectations. A summary of the rating actions are listed below: Issuer: Broadview Networks Holdings, Inc. -- Corporate Family Rating, Downgraded to Caa1 (from B3) -- Probability of Default Rating, Downgraded to Caa1 (from B3) -- $300 million Senior Secured Notes due 2012, Downgraded to Caa1 (from B3) (LGD-4, 54%) RATING RATIONALE Broadview's Caa1 rating reflect the company's weak capital structure and the modest equity value which may deteriorate if results are below plan (using Moody's valuation assumption of 4x - 5x equity) with leverage as of March 31, 2011 around 5.1x (incorporating Moody's standard adjustments and excluding the company's preferred shares or 8.6x including partial debt attribution to the preferred). Broadview's rating is also constrained by its lack of scale, below average EBITDA margins as compared to Moody's rated comparable firms and limited free cash flow generation. Moody's believes the company's strategy of focusing on higher end customers with new cloud based data products and advanced services is a sound strategy however its highly levered balance sheet limits its ability to successfully execute this goal. Moody's remains concerned about Broadview's ability to differentiate their services and successfully grow and maintain high-margin customers in a highly competitive industry which includes substantially larger competitors with stronger balance sheets. Broadview's rating are somewhat supported by the company's modestly improved adjusted EBITDA margins of 19.3% (from 16.6% in 2008) as a result of the company targeting larger customers with higher margin products. Moody's expects the company's focus on cloud based technologies and advanced product offering to improve gross margins and reduce churn rates for higher end customers. This could lead to modestly higher sales expenses as the company focuses its sales force on selling higher end products. The ratings derive support from an experienced management team with a long history of operating as a CLEC. Broadview's rating reflects Moody's expectation that the company may face a tight liquidity profile if it is unable to refinance its revolver in February 2012.Moody'sexpects the company will be able to generate sufficient cash to cover debt service requirements over the rating horizon, but the company will likely use any remaining cash to fund capital expenditures leaving little remaining free cash flow to repay debt. In the event that results are less than expected, capex spending could be pressured which could further reduce the company's competitive position which is a concern given the large number of competitors that have substantial resources to commit to advanced product offerings. As of the end of March, 2011, the company had $26 million in cash and cash equivalents and a $25mm revolver with $17 million drawn that matures in February 2012. If the revolver is not refinanced prior to maturity, the company is expected to have cash to meet the revolver's maturity, but would reduce its liquidity position going forward. The company's bonds mature in September 2012 and could prove difficult to refinance depending on market conditions. The stable outlook reflects Moody's expectation that the company will continue to generate sufficient cash flow to cover debt services over the rating horizon, but will struggle to grow the business and attract new customers as competition from other voice and data providers increases. Broadview's ratings could experience a downgrade should the company begin aggressively losing customers resulting in meaningful revenue and EBITDA declines and ultimately putting further pressure on the company's valuation and leverage metrics. In addition, should the company be unable to refinance its revolver and bond debt in a timely manner or experience a prolonged period of negative free cash flow, Moody's would consider a downgrade. An upgrade to the ratings is unlikely in the near term, but Moody's would consider an upgrade to Broadview's ratings if the company is able to successfully refinance its debt obligations while demonstrating the ability to attract and maintain new high margin customers resulting in lower leverage, and EBITDA growth. A deleveraging strategic transaction could also be a positive catalyst for an upgrade. The principal methodology used in rating Broadview Networks Holdings, Inc. was Moody's Global Telecommunications Methodology (December 2007). Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. CAPMARK FINANCIAL: Court Approves Sale of Loans to Bancorp ---------------------------------------------------------- BankruptcyData.com reports that the U.S. Bankruptcy Court approved Capmark Financial Group's motion for an order authorizing Capmark Finance to (I) purchase new market tax credit loans owned by non- Debtor affiliate Capmark Bank and (II) sell the newly-acquired loans to U.S. Bancorp Community Development and U.S. Bancorp Community Investment, free and clear of all liens, claims and encumbrances. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- provides financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On Oct. 25, 2009, Capmark Financial and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Lead Case No. 09-13684). Capmark disclosed assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Capmark's financial advisors are Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel is Dewey & LeBoeuf LLP. Richards, Layton & Finger, P.A., serves as local counsel. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP is tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. The Official Committee of Unsecured Creditors in Capmark Financial Group Inc.'s cases tapped Kramer Levin Naftalis & Frankel LLP as its counsel and JR Myriad LLC as its commercial real estate business advisors. The Committee also retained Cutler Pickering Hale and Dorr LLP as its attorneys for the special purpose of providing legal services in connection with Federal Deposit Insurance Corporation matters. Protech Holdings C LLC, an affiliate of Capmark, filed for Chapter 11 protection on July 29, 2010 (Bankr. D. Del. Case No. 10-12387). The Debtor estimated assets and debts in excess of $1 billion as of the filing date. Since filing for Chapter 11, Capmark completed three sales to generate more than $1 billion in cash. Berkshire Hathaway Inc. and Leucadia National Corp. bought most of the business for $468 million. In April 2011, Greenline Ventures LLC completed the acquisition of the New Markets Tax Credit division of Capmark Financial Group Inc. Since inception of the NMTC program, Capmark's NMTC division has closed over $1.1 billion of NMTC investment funds and financed over $2.5 billion of projects and businesses in low income communities nationwide. CATALYST PAPER: To Assess Improvements to Capital Structure ----------------------------------------------------------- Catalyst Paper announced that it is reviewing alternatives to address its capital structure. The review will focus on alternatives for its US$250 million of 7.375% senior unsecured notes which mature March 31, 2014. "With the recently announced extension and amendment of our asset based lending facility, the next step is to identify appropriate opportunities to improve our balance sheet," said Chief Financial Officer Brian Baarda. Catalyst has engaged UBS Securities to assist in this process. There can be no assurance that the review referred to in this release will lead to any transaction taking place or as to the timing of any such transaction if it does. About Catalyst Paper Catalyst Paper -- http://www.catalystpaper.com/-- manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With four mills, located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 1.9 million tons. The Company is headquartered in Richmond, British Columbia, Canada and its common shares trade on the Toronto Stock Exchange under the symbol CTL. The Company posted a net loss of C$398.2 million on sales of C$1.229 billion during 2010. The Company's net loss in 2009 was C$5.6 million on sales of C$1.224 billion. The Company's balance sheet at March 31, 2011, showed C$1.64 billion in total assets, C$1.25 billion in total Liabilities, and C$389.60 million in equity. * * * Catalyst Paper carried Moody's Investors Service's 'Caa1' corporate family rating. Outlook in Negative. The Company also carries Standard & Poor's CCC+ long-term corporate credit rating, Outlook is Stable. CAVICO CORP: Receives NASDAQ Non-Compliance Notice -------------------------------------------------- Cavico Corp. disclosed that on June 17, 2011, Cavico Corp. received a letter from the NASDAQ Stock Market notifying the Company that it no longer meets the NASDAQ's continued listing requirement under Listing Rule 5450(a)(1), in that the Company's common stock has traded below $1.00 per share for 30 consecutive business days. The notification letter states that the Company will be afforded 180 calendar days, or until December 14, 2011, to regain compliance with the minimum bid price continued listing requirement. To regain compliance, the closing bid price of the common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days. If the Company does not regain compliance by December 14, 2011, NASDAQ will provide written notification to the Company that its securities are subject to delisting. During this time, the Company will continue to monitor the closing bid price for its common stock and consider its available options to regain compliance with the NASDAQ minimum bid price requirement. About Cavico Corp. Cavico Corp. is focused on large infrastructure projects, which include the construction of hydropower facilities, dams, bridges, tunnels, roads, mines and urban buildings. Cavico is also making investments in hydropower facilities, cement production plants, mineral exploration and urban developments in Vietnam. The company employs more than 3,000 employees on projects worldwide, with offices throughout Vietnam and a satellite office in Australia. The Company now has three subsidiaries, Cavico Mining (hsx:MCV), Cavico Industry & Mineral (hnx:CMI), and Cavico Construction Manpower & Services (hnx:CMS), which are listed in Vietnam on the Ho Chi Minh and Hanoi Stock Exchanges. CDC PROPERTIES II: Files Schedules of Assets & Liabilities ---------------------------------------------------------- CDC Properties II, LLC, filed with the U.S. Bankruptcy Court for the Western District of Washington, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $30,567,000 B. Personal Property $466,650 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $31,014,471 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $26,259 ----------- ----------- TOTAL $31,033,650 $31,040,730 A full-text copy of the Schedules of Assets and Liabilities is available at http://ResearchArchives.com/t/s?764c Tacoma, Washington-based CDC Properties II LLC filed for Chapter 11 bankruptcy (Bank. W.D. Wash. Case No. 11-44554) on June 2, 2011. Judge Paul B. Snyder presides over the case. Brad A. Goergen, Esq., at Graham & Dunn PC, serves as bankruptcy counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Thomas W. Price, member/manager. Affiliate CDC Properties I, LLC, sought Chapter 11 protection (Case No. 10-41010) on Feb. 2, 2010. Prium Kent Retail, LLC. Prium Lakewood Buildings, and Prium Meeker Mall LLC filed separate Chapter 11 petitions in 2010. CIT GROUP: Sues Tyco to Halt End-Run on Chapter 11 Plan ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that CIT Group Inc. sued Tyco International Ltd. in bankruptcy court to stop what it contends is an attempt at an end run on the prepackaged reorganization that CIT confirmed in December 2009 after less than six weeks in Chapter 11. Mr. Rochelle discloses that the dispute involves the right to tax advantages stemming from Tyco's brief ownership of CIT. Tyco began arbitration on June 13 claiming rights under agreements predating the bankruptcy. CIT, according to the report, responded on June 21 by the suit in bankruptcy court to halt the arbitration and declare the right of the bankruptcy judge to rule on all disputes regarding the Chapter 11 plan. CIT is seeking a temporary restraining order on an emergency basis halting the arbitration. About CIT Group Founded in 1908, CIT Group Inc. (NYSE: CIT) -- http://www.cit.com/ -- is a bank holding company with more than $35 billion in finance and leasing assets. It provides financing and leasing capital to its more than one million small business and middle market clients and their customers across more than 30 industries. CIT Group Inc. and affiliate CIT Group Funding Company of Delaware LLC announced a Chapter 11 filing on Nov. 1, 2009 (Bankr. S.D.N.Y. Case No. 09-16565). Evercore Partners, Morgan Stanley and FTI Consulting served as the Company's financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel in connection with the restructuring plan. Sullivan & Cromwell served as legal advisor to CIT's Board of Directors. CIT emerged from bankruptcy protection on Dec. 11, 2009, after receiving confirmation of its prepackaged Chapter 11 plan of reorganization. * * * In May 2011, Moody's Investors Service upgraded CIT Group Inc.'s Corporate Family Rating to 'B2' from 'B3'. The rating outlook is stable. The upgrade reflects the progress CIT has made addressing its most immediate organizational, operational, and financial challenges subsequent to its bankruptcy reorganization in December 2009. Moody's, however, notes that CIT's weak margins and uncertainty regarding the pace and adequacy of future margin improvements are constraints on the firm's ratings. By repaying and refinancing high-cost debt, CIT has reduced its cost of funds and improved its net finance margin, adjusted to exclude accretion income associated with fresh-start accounting (FSA) and other distortions such as debt prepayment expense. However, CIT's pre- tax margins are well below pre-crisis levels, a function of high funding costs and elevated, though declining credit costs. CLAUDIO OSORIO: Investor Opposes Discharge of $4 Mil. Debt ---------------------------------------------------------- Paul Brinkmann at the South Florida Business Journal reports that investor Chris Korge has filed a motion to deny Claudio Osorio and his wife, Amarilis, the right to discharge their $4 million debt to him in a Chapter 11 case. According to the report, other high-profile investors, including NBA star Carlos Boozer and Osorio's neighbors on Star Island, have filed motions indicating they will follow suit. American Express filed a similar motion for $55,000 in credit card debt. Mr. Osorio has been ordered to provide more information or access to foreign bank accounts by June 29. The Osorios, the Business Journal recounts, filed for Chapter 11 in March after allegations of investor fraud brought down their company, InnoVida Holdings. An attorney who took over InnoVida, Mark Meland, has said some money was transferred offshore in the year before the bankruptcy filing. The Osorios filed their Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 11-17075) on March 17, 2011. CLEARWATER NATURAL: Howell-Kinzer Loses Bid to Reinstate Claim -------------------------------------------------------------- District Judge Karen K. Caldwell affirmed the Bankruptcy Court order denying indemnification claims filed Howell Properties, LLC and Kinzer Drilling Company, LLC, for $1,287,846.70 in the bankruptcy cases of Clearwater Natural Resources, L.P., and Miller Bros. Coal, LLC. The judge also upheld the lower court's decision denying Howell-Kinzer's motion to alter or amend the original order. The case before the District Court is Howell Properties, LLC and Kinzer Drilling Company, LLC, Appellants, v. Clearwater Natural Resources, LLC, Miller Bros. Coal, LLC, Bank of America, N.A., and The Official Committee of Unsecured Creditors, Appellees, Civil Action No. 7:10-cv-122-KKC (E.D. Ky.). A copy of the District Court's June 20, 2011 Opinion and Order is available at http://is.gd/3mPV4Sfrom Leagle.com. About Clearwater Natural Headquartered in Kansas City, Mo., Clearwater Natural Resources LP mines coal in the Central Appalachian region. In August 2005, the Company acquired 100% interest in Miller Bros. that became a wholly-owned operating subsidiary of the company. The Company also acquired in October 2006 all interest in Knott Floyd Land Company, a medium scale coal mining company and its operations were subsequently consolidated into Miller. Through Miller, the Company produces and sells coal from eleven mining operations in Eastern Kentucky and provide contracts mining services for two third-party owned mines located within the Appalachian region. The Company and two of its affiliates, Clearwater Natural Resources LLC and Miller Bros. Coal LLC, sought Chapter 11 protection (Bankr. E.D. Kent. Lead Case No. 09-70011) on January 7, 2009. Mary L. Fullington, Esq., at Wyatt, Tarrant & Combs LLP, and Erika A. Tristan, Esq., James A. Reeder, Jr., Esq., Stacy M. Neal, Esq., Tracey R. Keegan, Esq., at Vinson & Elkins LLP in Houston, Tex., represent the Debtors in their restructuring efforts. Administar Services Group LLC serves as the claims and noticing agent. Richard Clippard, the United States Trustee for Region 8, appointed three creditors of Debtor Miller Bros. Coal LLC to serve on an official committee of unsecured creditors. Blank Rome LLP represents the Committee. When the Debtors filed for protection from their creditors, they estimated their assets and debts at $100 million to $500 million. The Debtors filed a chapter 11 plan and disclosure statement in April 2009. CLS RENTAL: Owner of Nashville Properties in Chapter 11 ------------------------------------------------------- Annie Johnson at the Nashville Business Journal reports that Madison-based CLS Rental Properties owns properties throughout the Nashville, Tennessee area. The Company in its schedules attached to its bankruptcy petition disclosed $1.95 million in liabilities and $2.42 million in assets. The largest secured creditors are Cadence Bankand Greenbank, with which CLS Rental Properties has mortgages out on nearly 30 properties around Nashville. CLS Rental Properties, LLC, formerly CLS Investment Properties, Inc., filed a Chapter 11 petition (Bankr. M.D. Tenn. Case No. 11- 06110) on June 17, 2011. Steven L. Lefkovitz, Esq., at Law Offices Lefkovitz & Lefkovitz, in Nashville, Tennessee, serves as counsel to the Debtor. CONOLOG CORPORATION: Posts $349,600 Net Loss in April 30 Quarter ---------------------------------------------------------------- Conolog Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $349,612 on $501,967 of product revenue for the three months ended April 30, 2011, compared with net income of $8.03 million on $515,897 of product revenue for the three months ended April 30, 2010. The decrease in net income can mainly be attributed to noncash transactions related to the subscription agreement entered into in August 2009, which resulted in a gain on derivative financial instrument of $9.05 million. The Company recorded a net loss of $3.62 million on $1.18 million of product revenue for the nine month period ended April 30, 2011, as compared to a net loss of $29.25 million on $1.10 million of product revenue for the nine month period ended April 30, 2010. The Company's balance sheet at April 30, 2011, showed $1.14 million in total assets, $1.24 million in total liabilities, and a stockholders' deficit of $98,401. As reported in the TCR on Dec. 7, 2010, WithumSmith+Brown, PC, in Somerville, New Jersey, expressed substantial doubt about Conolog'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 had recurring losses from operations of $3.53 million and $1.62 million and used cash from operations in the amounts of $1.64 million and $1.26 million for the years ended July 31, 2010, and 2009, respectively. A copy of the Form 10-Q is available at http://is.gd/iGXaLV Somerville, N.J.-based Conolog Corporation is engaged in the design, production (directly and/or through subcontractors) and distribution of small electronic and electromagnetic components and sub-assemblies for use in telephone, radio and microwave transmission and reception and other communication areas that are used in both military and commercial applications. CRACKER BARREL: S&P Affirms 'BB-' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Lebanon, Tenn.-based Cracker Barrel Old Country Store Inc. "At the same time, we revised our outlook to stable from positive," S&P related. "In addition, we affirmed our 'BB-' issue ratings on the company's senior secured credit facility, which consists of a $165 million revolving credit facility (due January 2013) and a term loan B (due April 2013 and April 2016). The '3' recovery ratings on the debt indicate our expectation of meaningful (50% to 70%) recovery for creditors in the event of a payment default. At April 29, 2011, CBRL had about $575.3 million of reported debt outstanding," S&P stated. "The ratings reflect our analysis that further credit measure improvement is limited," said Standard & Poor's credit analyst Brian Milligan, "with adjusted leverage likely to remain in the mid-3x area through 2012." "Comparable restaurant sales returned to negative territory in the third quarter (ended April 29, 2011), while guest traffic declined in each of the first four calendar months of 2011. We believe CBRL has been more vulnerable to rising fuel prices since about 85% of its locations are along interstate highways." "We view the company's business risk profile as weak, even after considering its loyal customer base," added Mr. Milligan. "Our credit measure forecasts and financial policy expectations lead us to view the company's financial risk profile as aggressive." CROWN MEDIA: Plans to Offer $300 Million of Senior Notes Due 2019 ----------------------------------------------------------------- Crown Media Holdings, Inc., intends to commence an offering in a private placement of $300 million in aggregate principal amount of senior notes due 2019. The Offering is expected to be completed by mid-July 2011, subject to market and other conditions. The Notes will be senior unsecured obligations of Crown Media, will be guaranteed by each of Crown Media's subsidiaries and will bear interest at a fixed rate. In conjunction with the Offering, Crown Media also intends to enter into new senior secured credit facilities which will be secured by all of the assets of Crown Media and its subsidiaries and will be guaranteed by each of its subsidiaries. The consummation of the Offering is conditioned on Crown Media entering into such Senior Secured Credit Facilities. A special committee consisting of Crown Media's independent directors has been reviewing and will make recommendations to the Board of Directors with respect to the fairness of the terms of the Offering and the Senior Secured Credit Facilities. Crown Media expects that the proceeds from the Offering and the Senior Secured Credit Facilities will be used to extinguish obligations under Crown Media's existing term credit facilities, redeem its preferred stock and for general corporate purposes. The Notes will be offered in the United States only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and outside the United States pursuant to Regulation S under the Securities Act. The proposed Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This notice is issued pursuant to Rule 135c of the Securities Act, and is for informational purposes only, and it does not constitute an offer to sell the Notes, nor a solicitation for an offer to purchase the Notes. A full-text copy of the press release is available for free at: http://is.gd/twQcNK About Crown Media Studio City, Calif.-based Crown Media Holdings, Inc. (NASDAQ: CRWN) -- http://www.hallmarkchannel.com/-- owns and operates cable television channels dedicated to high quality, broad appeal, entertainment programming. The Company currently operates and distributes Hallmark Channel in both high definition (HD) and standard definition (SD) to 90 million subscribers in the U.S. Crown Media also operates a second 24-hour linear channel, Hallmark Movie Channel, available in both HD and SD, which focuses on family-friendly movies with a mix of classic theatrical films, presentations from the acclaimed Hallmark Hall of Fame library, original Hallmark Channel movies and special events. The Company's balance sheet at March 31, 2011, showed $736.97 million in total assets, $636.17 million in total liabilities, $199.73 million in redeemable preferred stock, and a $98.93 million total stockholders' deficit. Going Concern KPMG LLP, in Denver, the Company's independent registered public accounting firm, rendered a going concern opinion in connection with the financial statements included in the Company's annual report on form 10-k for the year ended Dec. 31, 2009. The independent auditors noted of the Company's significant short-term debt obligations. KPMG LLP, however, did not issue a going concern opinion in its report on the Company's 2010 financial statements. CYBEX INTERNATIONAL: Gets Non-Compliance Notice from NASDAQ ----------------------------------------------------------- Cybex International, Inc., received a letter from the NASDAQ Stock Market notifying Cybex that it no longer meets the NASDAQ's continued listing requirement under Listing Rule 5450(a)(1), in that the Company's common stock has traded below $1.00 per share for 30 consecutive business days. This notification has no effect at this time on the listing of the Company's common stock, which will continue to trade on the NASDAQ Global Market. The notification letter states that the Company will be afforded 180 calendar days, or until Dec. 13, 2011, to regain compliance with the minimum bid price continued listing requirement. To regain compliance, the closing bid price of the common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days. If Cybex does not regain compliance by Dec. 13, 2011, NASDAQ will provide written notification to Cybex that its securities are subject to delisting. During this time, Cybex will continue to monitor the closing bid price for its common stock and consider its available options to regain compliance with the NASDAQ minimum bid price requirement, which may include applying for an extension of the compliance period or an appeal to a NASDAQ Listing Qualifications Panel. As previously reported, Cybex on April 15, 2001, received a letter from NASDAQ notifying Cybex that it does not comply with the minimum stockholders' equity requirement of $10 million for continued listing on the NASDAQ Global Market and affording 45 calendar days to submit a plan advising NASDAQ of the action the Company has taken, or plans to take, to regain compliance with the minimum stockholders' equity continued listing requirement. Cybex has submitted a plan of compliance and NASDAQ has granted an extension of time to Oct. 3, 2011, to regain compliance with the minimum stockholders' equity requirement. About Cybex International Medway, Mass.-based Cybex International, Inc. (NASDAQ: CYBI) -- http://www.cybexintl.com/--is a manufacturer of exercise equipment and develops, manufactures and markets strength and cardiovascular fitness equipment products for the commercial and, to a lesser extent, consumer markets. The Company reported a net loss of $58.2 million on $123.0 million of sales for 2010, compared with a net loss of $2.4 million on $120.5 million of sales for 2009. The Company's balance sheet at March 26, 2011, showed $84.35 million in total assets, $98.82 million in total liabilities and a $14.47 million total stockholders' deficit. KPMG LLP, in Pittsburgh, Pa., expressed substantial doubt about Cybex International's ability to continue as a going concern. The independent auditors noted that a December 2010 jury verdict in a product liability suit apportions a significant amount of liability to the Company. "The Company does not have the resources to satisfy a judgment in this matter that has not been substantially reduced from the jury verdict, which raises substantial doubt about the Company's ability to continue as a going concern." DELTA AIR LINES: Fitch Affirms 'B-' Issuer Default Rating --------------------------------------------------------- Fitch Ratings has affirmed the debt ratings of Delta Air Lines, Inc. The airline's Issuer Default Rating has been affirmed at 'B-', and the Rating Outlook has been revised to Positive from Stable. The ratings apply to approximately $2.7 billion in outstanding debt. Delta's 'B-' IDR reflects the airline's still highly leveraged capital structure, volatile cash flow generation through the cycle, and exposure to sharp increases in jet fuel costs against a backdrop of turmoil in world energy markets in 2011. The carrier has made significant progress toward lease-adjusted debt reduction over the past 18 months as the U.S. airline industry revenue environment has strengthened. Moving into this summer's peak demand period, the outlook for passenger revenue per available seat mile growth remains good, and Fitch expects DAL to report solid passenger yield growth, helping to offset significantly higher fuel costs during the summer. Despite persistent fuel cost pressure, Fitch expects DAL to generate substantially positive free cash flow in 2011, driven in large part by relatively modest capital spending commitments. FCF in the first half of the year will likely exceed $1.0 billion, and continued strength in unit revenue trends in the fall and winter would allow the airline to push balance sheet debt down to approximately $14 billion by the end of the year. Forecasted 2011 capex of $1.2 billion reflects the absence of fleet growth as older, less fuel-efficient aircraft are retired. Liquidity remains sufficient to guard against significant follow- on fuel price shocks. Following the refinancing of the airline's exit credit facility, total unrestricted liquidity (including $1.8 billion of total revolver availability) exceeds $5.5 billion. Scheduled debt maturities are relatively heavy but manageable over the next three years, providing DAL with an opportunity to direct FCF toward debt reduction and de-levering through 2013. Scheduled maturities total $1.9 billion in 2012 and $1.6 billion in 2013. DAL's competitive position in the global airline industry remains strong, with the integration of Northwest Airlines and the implementation of the trans-Atlantic joint venture with Air France KLM completed. Given its expansive global route network and strengthened presence in key high-yielding business markets, Fitch views DAL's ability to expand margins through the cycle as stronger than that of most other global carriers. DAL's unit cost position remains competitive, and ongoing initiatives to reduce headcount and park older, high-cost aircraft should help the airline achieve relatively flat non-fuel unit operating costs by year-end. Recently announced schedule cuts for the fall reflect managements' willingness to reduce scheduled flying in the face of higher fuel costs. Particularly across the Atlantic and in its small Memphis hub, capacity adjustments were necessary to restore route profitability. The planned 4% pull-down of post-Labor Day capacity should help maintain a relatively strong 2H'11 RASM performance. Industry capacity discipline and a series of fare hikes rolled out earlier in the year have helped boost yields for all U.S. carriers, and as yet there are no clear signs of significant demand destruction. A weaker economic growth scenario in the second half of the year, however, could begin to erode unit revenue growth and squeeze second half margins. Unlike 2008, when energy prices ran up quickly in the face of flagging air travel demand and a weak economy, DAL and the other large U.S. airlines have been successful in recovering much of the fuel cost pressure via fare hikes and modest capacity trimming in the 2H'11 schedule. DAL's revenue performance has been generally solid through the first five months of 2011, with Q1 passenger RASM growing by 7% on a 5% increase in available seat mile (ASM) capacity, 12% higher yields and weaker load factors. The weak link in DAL's route network this year has been in the Atlantic, where PRASM fell by 1% year over year in the first quarter. Actions to adjust capacity have been targeted at Atlantic markets (together with SkyTeam partners Air France KLM, which have also announced capacity cuts). DAL has altered its fuel hedging approach somewhat in recent weeks, as the spread between West Texas Intermediate and Brent crude prices has widened. As of early May, all WTI-based derivative positions had been terminated in favor of a hedge book consisting primarily of Brent crude and heating oil cashless collars. The Q1 average fuel price of $2.86 per gallon compared with $2.23 per gallon paid a year earlier. DAL's unrestricted liquidity position has been stable in recent quarters as FCF generation rebounded in 2010 and the company successfully refinanced some maturing debt while paying down other obligations. In April, the carrier closed on a new secured revolver and term loan totaling $2.6 billion. Relative to United Continental, which holds more cash on the balance sheet, DAL has favored a thinner liquidity cushion; however, revolver availability provides ample room to respond in the event of a more extreme fuel shock or a sharp deterioration in demand patterns. DAL retains defined benefit pension plans for pre-merger Delta non-pilot groups as well as pre-merger Northwest's unionized employees. All of these plans have been closed to new entrants and frozen for future benefit accruals. Under the 2006 Pension Protection Act, airlines were allowed to apply special funding rules that allow under-funded benefit liabilities to be amortized over a 17-year period. DAL's unfunded DB liability of $9.3 billion as of 12/31/10 was down slightly from YE09's $9.5 billion, driven primarily by better 2010 plan asset returns. Fitch assumes that DAL will cash fund DB plans at approximately $700 million annually over the next several years, in line with actual 2010 cash pension contributions. Significant asset return shortfalls, however, could widen the unfunded gap materially and force the company to direct more cash toward pension contributions. While the extended amortization period provides airlines with more time to address unfunded gaps, a funded status below 50% cannot be sustained for an extended period, given assumed volatility in plan asset returns. An upgrade in the IDR to 'B' could follow later in 2011 or next year if DAL remains on track to de-lever in line with its plan to reduce lease-adjusted debt by an additional $3.5 billion by the second half of 2013. This would likely require a leveling off of fuel prices or a decline in jet fuel to less than $3.00 per gallon in coming quarters. A return of the Rating Outlook to Stable could follow if a sharp follow-on fuel price spike or revenue shock undermines DAL's FCF outlook in 2012. Issue ratings affirmed in this action are: Senior Secured Bank Credit Facilities: -- $1.225 billion Senior Secured Revolving Credit Facility due 2016 'BB-/RR1'; -- $1.375 billion Senior Secured Term Loan due 2017 'BB-/RR1'; -- $500 million Revolving Credit Facility (Pacific routes) due 2013 'BB-/RR1'; -- $750 million Senior Secured First Lien Notes due 2014 'BB-/RR1'; -- $600 million Senior Second Lien Notes due 2015 'B-/RR4'. DELTRON INC: Chris Kelliher as Board Member ------------------------------------------- Chris Kelliher was appointed as a member of the Board of Directors of Deltron, Inc. Mr. Kelliher started his career in 1982 in his family's construction business, Keystone Construction in California, learning various skills applicable to the home construction business. He worked there for a number of years until, upon moving to the Hawaiian Islands, he worked as a commercial fisherman for ten years. He then returned to Santa Barbara to manage the family business for a ten year period. Most recently, in the past six years, Mr. Kelliher has worked on the island of Oahu, Hawaii building military housing. He graduated from Lahaina Luna High School on Maui in 1982. He is 46 years old. There are no family relationships between Mr. Kelliher and any member of the Board of Directors or any other officer of the Company. There have been no transactions since the beginning of the Company's last fiscal year, or any proposed transaction, in which the Company was or is to be party and in which either had or will have a direct or indirect material interest. About Deltron Inc. Based in Garden Grove, Calif., Deltron, Inc., is a manufacturing company with two distinct business segments: polyurethane and rebreather. The Company's primary business is Elasco, Inc., which is focused on manufacturing technology for plastic and polyurethane products. The Company's secondary business segment is focused on the development of deep-sea exploration breathing technology marketed as Blu Vu. The Company's balance sheet at March 31, 2011, showed $4,168,559 in total assets, $4,664,493 in current liabilities, $680,001 in notes payable, and a stockholders' deficit of $1,175,935. As reported in the TCR on Jan. 20, 2011, Cacciamatta Accountancy Corporation, in Irvine, Calif., expressed substantial doubt about Deltron, Inc.'s ability to continue as a going concern, following its audit of the Company's consolidated financial statements for the transition period from Jan. 1, 2010, to Sept. 30, 2010. The independent auditors noted that the Company has incurred recurring losses from operations and negative cash flows from operating activities and has a net stockholders' deficit. DOLE FOOD: Moody's Rates Senior Secured Term Loans 'Ba2' -------------------------------------------------------- Moody's assigned Ba2 ratings to Dole Food, Company Inc.'s and Solvest, Ltd.'s proposed senior secured term loan facilities. The company's B1 corporate family and probability of default ratings and its SGL-2 were affirmed. The rating outlook is stable. Proceeds from the new facilities will be used to refinance existing bank debt and for general corporate purposes. RATINGS RATIONALE "Dole's B1 corporate family rating incorporates the company's earnings and cash flow volatility from its exposure to commodity markets as well as the impact of such uncontrollable factors as weather or political regulations on key products. Nonetheless, it enjoys a leadership position in its industry segment and has good geographic diversity," said Linda Montag, Moody's Senior Vice President. Credit metrics had strengthened over the past few years, from improved profit margins and debt reduction from the sale of non-core assets as well as the IPO. However the business is still volatile, as evidenced by soft performance toward the end of last year which resulted in a decline in EBITDA and an increase in leverage to about 5.8 times per Moody's FM. Moody's expects leverage metrics to improve during 2011 as some of the one-off events of last year are put behind them and indeed, first quarter 2011 performance showed improvement and Dole reduced leverage to 5.5 times on an LTM basis. The SGL-2 rating reflects Moody's expectation that the company's liquidity profile will remain solid. Dole does not expect material usage under its $350 million revolving credit in the near term and following the proposed refinancing, will not face its next debt maturity until 2013.Moody'sexpects the company to generate sufficient internal cash flow over the next 12 months to meet all of its basic cash needs, allowing for some seasonal fluctuation. The stable outlook reflects Moody's expectation that Dole's operating performance will be sustained at current or stronger levels despite volatility inherent in the agricultural product industry. It also assumes that Dole will continue to conservatively manage its balance sheet and liquidity, and will be able to further reduce leverage. Ratings could be upgraded if Dole achieves material and sustained improvement in operating margins and is able to reduce leverage such that Debt to EBITDA is sustained below 4 times. Upward rating momentum would also require maintenance of a strong liquidity profile. Negative pressure on the ratings or outlook could develop if continued operating softness or an aggressive financial policy caused Debt/EBITDA to be sustained at or above 5.5x. Ratings assigned to the proposed facilities: Dole Food Company, Inc. -- $315 million 7-year Term Loan B due 7/2018 at Ba2 (LGD2, 25%) Solvest Ltd. -- $585 million 7-year Term loan C due 7/2018 at Ba2 (LGD 2, 25%) Ratings on the existing term loans will be withdrawn following the closing of the new facilities. Moody's most recent rating action for Dole was in February 2010 when Moody's upgraded the CFR to B1 from B2 and assigned the SGL-2 liquidity rating. The principal methodology used in rating Dole was Moody's Global Natural Products Processors -- Protein and Agriculture published in September 2009 and available on www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website. Headquartered in Westlake Village, California, Dole Food Company, Inc. is the world's largest producer of fresh fruit, fresh vegetables and value-added fruits and vegetables. Sales for the fiscal 2010 were approximately $6.9 billion. DOWLING COLLEGE: Moody's Maintains 'B3' Bond Rating on Watchlist ---------------------------------------------------------------- Moody's Investors Service maintains the B3 rating on Dowling College's (NY) Series 1996 and 2002 bonds on watchlist for possible downgrade. The Series 2002 bonds were issued through the Town of Brookhaven Industrial Development Agency, and the Series 1996 bonds were issued through the Suffolk County Industrial Development Agency. The College has $14.76 million of rated debt outstanding and $64.3 million of total debt outstanding, including the Series 2006 bonds (not rated by Moody's) as well as mortgages and other debt. Moody's plans to review the rating when draft FY11 financials are available and fall 2011 enrollment is close to final. SUMMARY RATING RATIONALE: The B3 rating reflects the College's thin liquidity), reliance on bank line of credit for seasonal operating cash requirements, enrollment declines, and thin operating margins and debt service coverage. The rating remains on watchlist for further downgrade based on expected operating deficit for fiscal 2011 due to decline in fall 2010 enrollments. CHALLENGES * Thin liquidity and reliance on $2 million line of credit for operating cash requirements. Expendable financial resources provide a thin 0.11 times coverage of debt in FY 2010. Balance sheet continues to be weak due to consecutive years of operating deficits, based on Moody's calculations (a 5% endowment spending draw and depreciation is included as an operating expense) and past investment losses. * Weak operating performance and heavy reliance on unusually high level of unrestricted gifts from the board in FY 2010 ($4.1 million) in order to cover expenses and build liquidity. * Concentrated revenue base, with tuition and auxiliary revenue comprising over 90% of operating revenue, is a credit concern given challenges to the College's student market position and recent enrollment trend (10.6% decline in fall 2010). The College's operating performance is highly reliant upon the successful recruitment and retention of students and deterioration in the market position could severely affect the operations. STRENGTHS * Despite enrollment declines, Dowling's enrollment base is still sizeable with 3,963 full-time equivalent students (FTE) in fall 2010 and diversified program offerings including degrees in arts, sciences, business administration, and education. Located in Long Island, New York, the College also has a School of Aviation through which it offers degrees in aerospace systems technology and aviation management. * Net tuition revenue and net tuition per student have grown in each of the past three years driven by tuition increases. In FY 2010, the College generated $14,763 of net tuition per student, an 11% increase over FY 2007. * In response to the ongoing operating pressures, management is focused on expense containment and more frequent interim financial reporting to the board throughout the year. Management has started monthly reporting of operations to the board as well as to the bank providing the line of credit. DETAILED CREDIT DISCUSSION LEGAL SECURITY: The Series 1996 and 2002 bonds are general obligations of the College and feature debt service reserve funds. The Series 2002 bonds are further secured by a first leasehold mortgage and security interest in the financed facility, a residence hall on the Shirley (Brookhaven) campus. The College's $38.5 million of Series 2006 bonds (not rated by Moody's) are a general obligation of the College and also have a debt service reserve fund. They are secured by a first mortgage lien and security interest in the College's Oakdale and Shirley campuses and property, excluding the residential facility financed with the Series 2002 bonds. The Series 2006 bonds have a subordinate mortgage lien and security interest in the Series 2002 facility. The Series 2006 bonds are insured by ACA. Per the Series 2006 Sublease between the College and the issuing authority, under certain circumstances (defined as Triggering Events in the Sublease), the College's Gross Revenues, excluding 2002 Facility Revenues pledged to the Series 2002 Trustee to secure the principal amount of the Series 2002 Bonds, would be directed to the Series 2006 trustee. Debt service on the Series 2006 bonds would first be paid from Gross Revenues, before other operating costs of the College. In Moody's opinion, the Series 1996 and 2002 bonds have a weaker legal security than the Series 2006 bonds. DEBT-RELATED RATE DERIVATIVES: None Student market: The College experienced a significant decline in the enrollments in fall 2010. Fall 2010 full time equivalent (FTE) enrollment, at 3,963, was down by 472 FTE from fall 2009. The drop was due to inadequate recruitment (matriculation rate of 23.7% versus 29.1% in fall 2009) and weak retention. Operating Performance: Operating margins were positive in FY 2010 for the first time after FY 2006 due to the $4.1 million contribution by the board. In Moody's opinion, reliance on contributions from board is not a sustainable operational model and is a sign of the College's financial distress and need for liquidity. Based on the fall 2010 enrollment decline, the College is likely to have an operating deficit in fiscal 2011. Financial covenants: The College has a $2 million line of credit (expiring on October 31, 2011) with TD Bank. The agreement for the line of credit contains two financial covenants; the College should not report a decrease in net assets (excluding the losses from investments) and the College should have a minimum debt service coverage of 1.0. The College was not in compliance with these two covenants as of June 30, 2009 and obtained a waiver of non-compliance from the Bank. The management reports that the line of credit was extended by one year and the College was in compliance with the covenants as on June 30, 2010. The Series 2006 bonds are insured by ACA Financial Guaranty Corp. and there are some additional covenants associated with the insurance agreement. Tested on September 30 and March 31 of each year, the financial covenants require the College to maintain Unrestricted Liquid Funds (excluding DSRF) equal to at least $4 million. Senior Management: The College's senior management experienced some changes in fiscal 2010. President Robert J. Gaffney took early retirement (May 2010) and Scott Rudolph, chairman of the board, stepped in as an interim president. Additionally, Erik Paulson, Associate Vice President for Business and Finance, left in June 2010 and Ralph Cerullo, a board member, stepped in as an interim Chief Financial Officer. Dr. Jeremy D. Brown assumed the presidency on June 1st, 2011. Outlook The rating remains under watchlist for possible downgrade reflecting the College's very thin unrestricted liquidity, weak student market position, with an anticipated operating deficit FY 2011 based on fall 2010 enrollments. What Could Change the Rating - Up Highly unlikely in the near term. In the long term, significant growth in liquidity, coupled with strengthening of operating performance and stabilization of enrollment. What Could Change the Rating - Down Additional borrowing without commensurate growth of financial resources further deterioration of student market position, inadequate annual debt service coverage; inability to achieve at least balanced operating performance absent unusual levels of philanthropic support from the board. KEY INDICATORS (Fall 2010 enrollment data and FY 2010 audited financial data): Total Enrollment: 3,963 full-time equivalent Students Freshmen Selectivity: 81.4% Freshmen Matriculation: 23.7% Direct debt: $62.6 million Comprehensive debt (including operating leases):$64.3 million Total Financial Resources: $8.3 million Total Cash and Investments: $12.8 million (including $4.29 million of debt service reserve funds) Expendable financial resources to debt: 0.11 Expendable financial resources to operations: 0.09 Monthly liquidity: $4.5 million Monthly days cash on hand: 22.3 days Monthly liquidity to demand debt: 227% Three-Year Average Operating Margin: -1.0% Three-Year Average Debt Service Coverage: 1.21 times Reliance on Student Charges (as a % of operating revenue): 90.1% RATED DEBT: Series 1996 and 2002: B3 rating CONTACTS: Dowling College: Ralph Cerullo, Interim Chief Financial Officer and Treasurer, 631-244-3101 PRINCIPAL RATING METHODOLOGY The principal methodology used in this rating was Moody's Rating Approach for Private Colleges and Universities published in September 2002. DRUMM INVESTORS: S&P Assigns 'B+' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Drumm Investors LLC. The rating outlook is stable. "At the same time, we assigned our 'B+' issue-level rating and '3' recovery rating to the company's $1.5 billion senior secured term loan due 2018 and $75 million senior secured revolving credit facility due 2016," S&P said. Drumm Investors LLC -- the parent company of GGNSC Holdings and other subsidiaries that own the properties that GGNSC operates and that owns or operates additional skilled nursing facilities-- recently became the borrower in a refinancing transaction. The transaction consolidated all subsidiary debt at Drumm. "Our corporate credit rating for Drumm reflects the former credit profile for GGNSC Holdings' operations plus an additional 66 facilities not previously part of GGNSC Holdings operations," S&P said. "The speculative-grade rating on Drumm reflects our view of the company's weak business risk profile and aggressive financial risk profile. The ratings incorporate our belief that, over the long term, reimbursement will remain a chronic risk, despite recent revisions to Medicare reimbursement beneficial to Drumm," said Standard & Poor's credit analyst David Peknay. "Our rating also incorporates the uncertainty of federal efforts to reduce health care spending and Drumm's relatively narrow business focus, which subjects the company to regulatory risk," he added. The rating also recognizes the competitiveness of the nursing home industry, and Drumm's significant debt burden. Despite Drumm's size, scale, and diversity (305 communities that include nursing homes and assisted living centers, and 79 hospice and home health locations in 23 states), its weak business risk profile is influenced by significant industry challenges, most notably uncertain government reimbursement, notwithstanding recently favorable Medicare rate increases. Recent revisions in Medicare payments to nursing homes resulted in an increase by over 10% in the average Medicare rate per day that Drumm receives. "In our view, reimbursement will remain volatile in the long term, with rate cuts possible, particularly as the strain of rapidly rising health care expenditures propels federal efforts to cut health care costs," S&P said. DYNA-GO PROPERTIES: Trustee Approves Appraiser for Land Swap ------------------------------------------------------------ Jacqueline Armendariz at Brownsville Herald reports that Texas Southmost College trustees approved naming an appraiser for a potential land swap involving a property owner going through bankruptcy proceedings. According to the report, on May 25 certain TSC trustees said finding an appraiser did not mean they were committing to a land swap that would trade the TSC-owned Cueto building for nine acres of Rivercentre lots. The Rivercentre lots are owned by Brownsville company Dyna-Go Properties, which in January filed for reorganization under Chapter 11 bankruptcy laws. Ms. Armendariz says the day before the May TSC meeting, court records show that Dyna-Go Properties made a motion for a time extension in bankruptcy court to "solicit acceptances," presumably for a property deal. The motion has three "exhibits" attached to show that the company has a potential buyer for the land, and all three were from TSC. The documents include the agendas for the April and May meetings of the TSC board of trustees and a letter from the college's legal counsel to Dyna-Go's attorney. Court records appear to show that the company's motion was an effort to use TSC as leverage to stall its own bankruptcy proceedings by portraying the college as a potential buyer, while trustees said they were just testing the waters. The TSC letter filed as an exhibit in Dyna-Go's bankruptcy proceeding was written by TSC counsel Frank Perez and is addressed to Dyna-Go Properties lawyer Dennis Sanchez. It addresses a possible real-estate deal. Dyna-Go Properties, Inc., doing business as Rivercentre Plaza, formerly doing business as Brownsville Compress & Warehouse Company, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Tex. Case No. 11-70064) on Jan. 31, 2011. Antonio Villeda, Esq., in McAllen, Texas, serves as counsel to the Debtor. In its schedules, the Debtor disclosed $3,313,400 in assets and $1,572,577 in liabilities. DYNEGY INC: Seven Directors Elected at Annual Meeting ----------------------------------------------------- At June 15, 2011, annual meeting of stockholders of Dynegy Inc., the company announced the results of six proposals voted on by stockholders. The Stockholders elected all seven board nominees to serve until next year's annual meeting of stockholders. The individuals that were elected are Thomas W. Elward, Michael J. Embler, Robert C. Flexon, E. Hunter Harrison, Vincent J. Intrieri, Samuel Merksamer and Felix Pardo. The Stockholders also: (a) approved, on an advisory basis, the compensation of the Company's named executive officers; (b) voted in favor of holding future advisory votes on the company's executive compensation on an annual basis; (c) approved the continuation of the Stockholder Protection Rights Agreement for another year; (d) ratified the selection of Ernst & Young LLP as Dynegy's independent auditors for 2011; and (e) rejected a proposal regarding the establishment of quantitative goals for the reduction of greenhouse gas emissions. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE:DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Failed Sale The Troubled Company Reporter has chronicled Dynegy's attempts to sell itself. In August 2010, Dynegy struck a deal to be acquired by an affiliate of The Blackstone Group at $4.50 a share or roughly $4.7 billion. That offer was raised to $5.00 a share in November. Through Carl Icahn and investment fund Seneca's efforts, shareholders thumbed down both offers. In December 2010, an affiliate of Icahn commenced a tender offer to purchase all of the outstanding shares of Dynegy common stock for $5.50 per share in cash, or roughly $665 million in the aggregate. In February 2011, Icahn Enterprises L.P. terminated the proposed merger agreement with the Company after it failed to garner the required number of shareholder votes. Goldman, Sachs & Co. and Greenhill & Co., LLC, served as financial advisors and Sullivan & Cromwell LLP served as legal counsel to Dynegy on the sale efforts. Bankruptcy Warning Dynegy warned shareholders in March it might be forced into bankruptcy if it is unable to renegotiate the terms of its existing debt. The Company's balance sheet at Dec. 31, 2010, showed $10.013 billion in total assets, $7.267 billion in total liabilities, and stockholders' equity of $2.746 billion. Ernst & Young LLP, in Houston, said that Dynegy projects that it is likely that it will not be able to comply with certain debt covenants throughout 2011. "This condition and its impact on Dynegy Inc.'s liquidity raises substantial doubt about Dynegy Inc.'s ability to continue as a going concern." * * * As reported by the Troubled Company Reporter on March 14, 2011, Fitch Ratings downgraded the ratings on Dynegy and its subsidiaries after Dynegy's auditors raised substantial doubt as to its ability to continue as a going concern and the company announced it would likely trip debt covenants in its credit facilities. E.DIGITAL CORPORATION: Recurring Losses Prompt Going Concern Doubt ----------------------------------------------------------------- e.Digital Corporation filed on June 21, 2011, its annual report on Form 10-K for the fiscal year ended March 31, 2011. SingerLewak LLP, in Los Angeles, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has historically suffered recurring losses from operations and has a substantial accumulated deficit. The Company reported a net loss of $1.08 million on $1.30 million of revenues for fiscal 2011, compared with a net loss of $809,420 on $2.55 million of revenues for fiscal 2010. The Company's balance sheet at March 31, 2011, showed $2.20 Million in total assets, $177,479 in total liabilities, all current, and stockholders' equity of $2.02 million. A copy of the Form 10-K is available at http://is.gd/IOcxh0 Based in San Diego, Calif., e.Digital Corporation is a holding company incorporated under the laws of Delaware that operates through a wholly-owned California subsidiary of the same name. The Company markets its eVU(R) mobile entertainment system for the travel industry and license and enforces its Flash-R(TM) portfolio of flash memory patents for use in portable devices produced by electronic product manufacturers. The Company also seeks to expand its licensable intellectual property portfolio and in fiscal 2011 filed seven new U.S. patent applications for technologies related to communication networks and digital data distribution. EL PASO PIPELINE: S&P Affirms Issue-Level Rating at 'BB' -------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' issue-level rating on Houston-based energy company El Paso Pipeline Partners Operating Co. LLC (EPPO). "At the same time, we revised the recovery rating to '4' from '3'. The '4' recovery rating indicates our expectation of an average (30% to 50%) recovery in the event of default. The rating action follows our revised recovery analysis on the consolidated capital structure of parent El Paso Corp.," S&P said. El Paso Pipeline Partners L.P. fully and unconditionally guarantees EPPO's unsecured notes. "Our 'BB' long-term corporate credit rating on El Paso Pipeline Partners L.P. is tied to our rating on El Paso Corp.," S&P said The rating on El Paso Corp. is on CreditWatch with positive implications. "The CreditWatch listing reflects our view that El Paso's consolidated credit profile will improve following the spinoff of the exploration and production (E&P) business. We view the E&P business as notably riskier than El Paso's pipeline segment due to its cash flow volatility and the significant capital requirements needed to maintain production levels and reserves. We believe the pro forma business risk profile will improve because almost all of the company's cash flow will come from a diverse set of pipeline assets; more than 90% of the cash flow will come from fee-based reservation charges. In our view, pro forma financial ratios will worsen, even after deconsolidating the debt associated with Ruby Pipeline. We believe the ratio of pro forma debt to EBITDA could be around 5x. However, this figure will depend on the pace of asset dropdowns into master limited partnership El Paso Pipeline Partners L.P. (EPB) and on the amount of the spinoff's net proceeds that El Paso uses for debt reduction. The remaining businesses can tolerate more aggressive financial leverage, however, because the cash flows will be inherently more stable. Following a more thorough review of the new company's credit profile, including a better understanding of management's tolerance for financial leverage, we will be better positioned to comment on the extent of the ratings actions that are likely to result, but we believe that we could raise ratings on El Paso to investment grade," S&P related. Ratings List Rating Affirmed/Recovery Rating Revised El Paso Pipeline Partners Operating Co. LLC To From Senior Unsecured BB Recovery Rating 4 3 ELLICOTT SPRINGS: Kutner Miller Removed from Reorganization Case ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado removed Kutner Miller Brinen, P.C. as counsel for Ellicott Springs Resources, LLC. The firm requested to be withdrawn from representation of the Debtor. According to the firm, the Debtor has no way to compensate counsel for legal services going forward. Colorado Springs, Colorado-based Ellicott Springs Resources, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No. 10-13116) on Feb. 19, 2010. The Company disclosed $21,940,030 in assets and $8,411,246 in liabilities as of the Chapter 11 filing. Ellicott Springs Development, LLC; PLW, Inc. (Case No. 10-13114); and Rodney J. Preisser (Case No. 10-13110), the Debtor's affiliates are also based in Colorado Springs, Colorado, and each estimated assets and debts at $10 million to $50 million. Lee M. Kutner, Esq., who has an office in Denver, Colorado, represents the Debtors in their restructuring effort. On Jan. 11, 2011, the Court vacated its order for joint administration and directed separate administration of Chapter 11 estates. Joseph Rosania, Esq., was appointed as Chapter 11 trustee on Jan. 20, 2011. EMMIS COMMUNICATIONS: To Sell Controlling Interest in Stations -------------------------------------------------------------- Emmis Communications Corporation reached an agreement to transfer WKQX-FM (101.1 MHz, Chicago, IL), WLUP-FM (97.9 MHz, Chicago, IL) and WRXP-FM (101.9 MHz, New York, NY) to Merlin Media LLC, a controlling interest of which will be acquired by Chicago-based private equity firm GTCR and Randy Michaels. Emmis will own a significant minority stake. The transaction's closing is subject to various regulatory approvals and other customary conditions. "While it is always difficult to part with stations that have been valuable contributors to our company, we believe that today's transaction will create significant value for our shareholders," said Jeff Smulyan, Chairman & CEO of Emmis. "As a significant minority partner in Merlin Media, we're delighted to remain engaged with these markets and stations in the exciting days ahead." "We are extremely excited about the opportunity to partner with Emmis and Randy," said Philip A. Canfield, Principal at GTCR. "Emmis's CEO, Jeff Smulyan, and Randy Michaels are both proven veterans of the media industry and we look forward to working with them to provide valuable media content to Merlin Media's future consumers." Affiliates of GTCR will begin a Local Marketing Agreement to program and sell advertising on the three stations in the next 45 days. Emmis will continue to own and operate the stations during the term of the LMA until FCC approval is granted. Emmis purchased WKQX (Q101) in 1988, picking up The Loop (WLUP) in 2005. Emmis has owned the 101.9 signal in New York since 1998, having launched the WRXP format in 2008. Paul, Weiss, Rifkind, Wharton & Garrison LLP and Wiley Rein LLP served as legal counsel and Moelis & Company served as financial advisor to Emmis. ENCOMPASS GROUP: J.H. Cohn LLP Raises Going Concern Doubt --------------------------------------------------------- Encompass Group Affiliates, Inc., filed on June 20, 2011, its annual report on Form 10-K for the fiscal year ended June 30, 2010. J.H. Cohn LLP, in New York City, expressed substantial doubt about Encompass Group Affiliates' ability to continue as a going concern. The independent auditors noted that the Company incurred an operating loss of $16.9 million and a net loss of $28.8 million for the year ended June 30, 2010, and the Company's consolidated balance sheet reflects a stockholders' deficiency of $10.2 million. The Company reported a net loss of $28.8 million on $88.2 million of sales for fiscal 2010, compared with net income of $2.9 million on $110.1 million of sales for fiscal 2009. The Company's balance sheet at June 30, 2010, showed $47.0 million in total assets, $50.5 million in total liabilities, $6.7 million in Series E Preferred Stock, and a stockholders' deficit of $10.2 million. A copy of the Form 10-K is available at http://is.gd/OS2Oxv Lawrenceville, Ga.-based Encompass Group Affiliates, Inc., is a public company specializing in the technology aftermarket service and supply chain known as reverse logistics. EVANS INDUSTRIES: 5th Cir. Says Insurance Transferred to Buyer -------------------------------------------------------------- Greif Industrial Packaging and Services, Limited Liability Corporation, Appellant, v. R. Patrick Sharp, III, as Distribution Trustee for the Distribution Trust of Evans Industries, Incorporated, Appellee, No. 10-30387 (5th Cir.), concerns the proper interpretation of an asset purchase agreement between a Chapter 11 debtor and the company that purchased it out of bankruptcy. Evans Industries, Inc., operated a series of five leased facilities in Louisiana and Texas that manufactured, filled, warehoused and distributed steel drums and industrial containers. Evans filed a Chapter 11 petition in April 2006, and the bankruptcy court confirmed the reorganization plan in October 2006. The plan formed a Distribution Trust of Evans Industries and allocated most of Evans's assets to that Trust. R. Patrick Sharp, III was appointed Trustee. In November 2006, on the plan's closing date, Greif entered into an asset purchase agreement with Evans. Under the APA, Evans sold its operations at the five facilities to Greif for $11,250,000. The sale included all of Evans's property used to conduct business at all five premises, except for certain assets specifically excluded. However, $1,657,500 of that amount would be placed in a holdback escrow account funded by Greif. Greif was entitled to make holdback claims against that account for certain expenses as allowed for in the APA. Every four months, if no claims were filed, Greif would transfer one-fourth of the amount ($414,375) from the escrow account to the trust in accordance with the Chapter 11 plan; any disputed charges would be submitted to the bankruptcy court for resolution. After Greif took over the facilities, it made two disputed claims against the holdback. First, it claimed $649,633.75 in expenses it incurred removing and disposing of hundreds of barrels of environmentally hazardous waste left behind by Evans at four of the five sites. Second, it claimed $10,452.06 for payments it made to a third party, Ingersoll-Rand, for five pieces of industrial equipment -- Bobcat loaders -- that Evans had purchased but not yet fully paid off. Added up, the disputed holdback claims totaled $660,085.81. The Trustee filed a complaint in bankruptcy court, asking the court to order Greif to transfer the disputed funds to the trust. The Trustee also filed a claim for the prorated portion -- $97,224.12 -- of an insurance premium paid by Evans as a setoff against any valid holdback claims Greif might have. Finally, the Trustee filed a claim for $5,238.09 in utilities deposits at the various sites paid by Evans but refunded to Greif. The bankruptcy court ruled for the Trustee and against Greif as to the holdback amounts and the utility deposits, but ruled for Greif as to the setoff claim for the prorated insurance premium. The parties cross-appealed as to the holdback issues and insurance premium setoff, although Greif did not appeal the $5,238.09 judgment relating to the refunded utilities deposits. The district court affirmed as to the holdback provisions but reversed and remanded as to the insurance premium setoff, finding that the Trustee was entitled to its prorated portion of the paid premium. Greif appealed. In a decision dated June 21, 2011, the U.S. Court of Appeals for the Fifth Circuit affirmed the judgment of the district court with respect to the holdback claims for environmental liabilities and the Ingersoll-Rand industrial equipment. The Fifth Circuit reversed and remanded the judgment of the district court with respect to the Lexington insurance premium. The Fifth Circuit held that the APA consign responsibility to Evans but do not say that Greif could engage in remediation on its own initiative and turn over the bill to the holdback fund. "We are not persuaded that the lower courts committed any reversible error in their analysis of this issue," the Fifth Circuit said. As to the Bobcat Loader payments, the Fifth Circuit held that the confirmed reorganization plan called for Ingersoll-Rand to be paid from sale proceeds, although it apparently was not paid and came to Greif for satisfaction. The Fifth Circuit said the bankruptcy court concluded that since the debt was not retained by Evans under the APA, Greif cannot claim a material breach by Evans, and therefore cannot exercise its right against the holdback. "Having reviewed the record, the parties' briefs and oral presentations, we reach the same conclusion for essentially the same reasons," the Fifth Circuit said. With respect to the insurance premiums, the Fifth Circuit held that because the APA intended to transfer all of Evans's assets, and because it specifies that its list of assets is non-exclusive, the insurance coverage was transferred to Greif when the APA closed. "Because the APA effectively, if silently, transferred the policy to Greif, Greif need not reimburse Evans for the prorated premium. We reverse the judgment of the district court and remand with instructions to reject the Trustee's setoff claim of $97,224.06," the Fifth Circuit said. The Fifth Circuit panel consists of Chief Judge Edith Jones, and Circuit Judge Fortunato Benavides, and Keith Byron Aycock, District Judge of the Northern District of Mississippi, sitting by designation. A copy of the Fifth Circuit's decision is available at http://is.gd/q8WS0ffrom Leagle.com. Headquartered in Harvey, Louisiana, Evans Industries, Inc. -- http://www.evansindustriesinc.com/-- manufactured and distributed steel drums. The Company filed for Chapter 11 protection (Bankr. E.D. La. Case No. 06-10370) on April 25, 2006. Eric J. Derbes, Esq., and Melanie M. Mulcahy, Esq., at The Derbes Law Firm, LLC, represented the Debtor. C. Davin Boldissar, Esq., at Locke Liddell & Sapp, LLP, represented the Official Committee of Unsecured Creditors. In its petition, Evans estimated having assets below $1 million and debts between $10 million and $50 million. EVANS OIL: Has Until July 14 to Propose Chapter 11 Plan ------------------------------------------------------- The Hon. David H. Adams of the U.S. Bankruptcy Court for the Middle District of Florida extended Evans Oil Company, L.L.C., et al.'s exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until July 14, 2011, and Sept 12, respectively. As reported in the Troubled Company Reporter on June 14, Donald F. Walton, U.S. Trustee for Region 21, wanted the Debtors' exclusivity extension denied because the Debtors had not demonstrated any exigency to establish cause for seeking the relief on an emergency basis. Secured creditor Fifth Third Bank supported the U.S. Trustee's motion relating the Court ordered that if the Debtor failed to file a disclosure statement by May 30, it will conduct a hearing on dismissal or conversion of the case. On May 20, the Debtor requested for a July 29 plan filing extension and Sept. 27, plan solicitation period. About Evans Oil Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC, distributes bulk oil, gas, diesel and lubricant products. Evans Oil, together with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-01515) on Jan. 30, 2011. Attorneys at Hahn Loeser & Parks LLP as bankruptcy counsel serve as bankruptcy counsel to the Debtors. Garden City Group Inc. is the claims and notice agent. The Parkland Group Inc. is the restructuring advisor. Evans Oil estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. There has been no committees formed in the Debtor's case at the present time FAIRFAX CROSSING: Modifies Second Amended Plan ---------------------------------------------- Fairfax Crossing LLC and Fairfax Crossing II LLC filed with the U.S. Bankruptcy Court for the Northern District of West Virginia, Martinsburg Division, a modified second amended disclosure statement explaining their Chapter 11 plan of reorganization. The Plan was modified as stated on the record at the hearing held on May 31, 2011, to consider approval of the Disclosure Statement and the request for substantive consolidation of the Debtors. The Plan provides that Holders of both the Allowed Secured Claims and Unsecured Claims will receive payment equal to 100% of their Allowed Claims, over time. A full-text copy of the Modified Second Amended Disclosure Statement, dated June 9, 2011, is available for free at http://ResearchArchives.com/t/s?7648 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. FKF MADISON: Committee Seeks More Time to Challenge Lender's Liens ------------------------------------------------------------------ The official committee representing One Madison Park's unsecured creditors has asked the Bankruptcy Court to extend a Friday deadline to challenge the liens held by secured lender iStar Financial Inc. in connection with the loans provided to fund construction of the 50-story, glass-walled tower. The Committee is looking for an extra two months to bring those challenges in light of new "drama" over who owns the loans. Jacqueline Palank, writing for Dow Jones' Daily Bankruptcy Review, reports that junior lender Amalgamated Bank says it recently exercised its right to buy out iStar's senior position in the debt and is now seeking to block One Madison from proceeding with a recently filed restructuring plan. DBR relates that the committee's attorney, Schuyler Carroll of Perkins Coie, said in an interview Tuesday that Amalgamated agreed to extend the challenge deadline through at least July 14, the date he's hoping the U.S. Bankruptcy Court in Wilmington, Del., will consider granting the full 60-day extension. The Committee's counsel added that the committee will continue reaching out to Amalgamated and that it hopes to resolve the lien challenge issue before July 14. The Troubled Company Reporter on June 17, 2011, reported that HFZ Capital Group and CIM Group filed a Chapter 11 plan of reorganization for One Madison Park, pledging up to $200 million to take the Manhattan condominium tower out of Chapter 11 protection. According to DBR, Amalgamated opposes the plan term that enables its portion of the loan debt, about $69 million, to be wiped out. In court papers, the lender asked One Madison to choose between engaging it in restructuring talks or its "current path of seeking to pursue a plan that undervalues the debtors and seeks to transfer ownership of the debtors' assets to the 'bidder' selected in a backroom deal." DBR relates that whichever plan One Madison ends up proceeding with would likely determine whether the Committee decides to challenge the liens. The Committee said its members, owed between $160 million and $180 million, might be better offer forgetting the challenge and accepting the $6.75 million cash pool offered under the HFZ-sponsored plan. But if that doesn't come to fruition, the Committee said it would likely be in members' best interests to challenge the liens, "regardless of the magnitude of such challenge." Manhattan-based HFZ is led by Ziel Feldman, chairman of publicly traded Israeli investment firm Polar Investments Ltd. CIM Group, based in Los Angeles, invests in real estate located in U.S. urban communities. iStar Claim Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the case of FKF Madison is in flux once again because control of the first-lien debt has been sold. In seeking more time to investigate the validity of the $235 million first lien that was held by iStar Financial, the committee says the senior debt was acquired by the trustee for the junior lender, Amalgamated's Longview Ultra Construction Loan Fund. The committee said that the Longview fund doesn't support the reorganization plan the project filed this month, where ownership would transfer to a joint venture between CIM Fund III LP and HFZ Capital Group LLC in return for investments needed to carry out the plan. Mr. Rochelle recounts that the owner held an auction in April for the right to sponsor a plan. Afterward, there were discussions with iStar and the creditors' committee, a court filing said. Before the plan was filed, court papers said there might be a "meaningful" distribution to unsecured creditors. Related Cos. Related Cos., which developed Manhattan's Time Warner Center, is reportedly working on a plan to finish up One Madison Park, the slender 597-foot glass tower that was a major casualty of the real-estate bust. The Wall Street Journal, citing several people familiar with the matter, reported Wednesday that developer Related Cos. was working with Amalgamated on its plan to buy out iStar's stake. About FKF Madison FKF Madison owns the One Madison Park condominium tower in New York City. One Madison Park project came to halt in February 2010 when iStar Financial Inc., the chief financier for the project, moved to foreclose on it. The high-profile condominium project, a 50-story tower was developed by Ira Shapiro and Marc Jacobs. An involuntary Chapter 7 case (Bankr. D. Del. Case No. 10-11867) was filed against FKF Madison on June 8, 2010. The case was converted to a Chapter 11 in November 2010. FRASSATI RESIDENCE: Moody's Upgrades Letter of Credit Rating ------------------------------------------------------------ Moody's Investor Services has upgraded to Aa2/VMIG 1 from Ba3/S.G. the letter of credit backed rating assigned to the Rhode Island Health and Educational Building Corporation Higher Health Facilities Revenue Refunding Bonds, Frassati Residence (Villa at St. Antoine) Issue, 2007 Series A in conjunction with the substitution of the current letter of credit securing the Bonds provided by Allied Irish Banks p.l.c. with a new direct-pay LOC provided by TD Bank N.A. effective June 22, 2011. SUMMARY RATING RATIONALE The rating is based upon (i) a direct-pay LOC provided by the Bank, (ii) the structure and legal protections of the transactions, which ensures timely payment of debt service and purchase price to bondholders; and (iii) Moody's evaluation of the credit quality of the Bank issuing the letter of credit. Moody's currently rates the Bank Aa2 for its long-term bank obligations and Prime-1 for its short term obligations. DETAILED CREDIT DISCUSSION Interest Rate Modes and Payment The Bonds will continue to bear interest in a weekly rate mode and interest will be paid on the first business day of each month. The trust indenture permits the conversion of the interest rate of the Bonds, in whole, to a daily, monthly mode, term or fixed rate mode. The Bonds will be subject to mandatory tender upon conversion of the interest rate mode. Moody's letter of credit backed ratings only apply to the Bonds while bearing interest in the weekly, daily or monthly rate modes. While in the daily or monthly rate modes, interest will also be paid on the first business day of the month. Additional Bonds The trust indenture allows for the issuance of additional bonds with prior written confirmation from the rating agencies then rating the Bonds that the rating will not be reduced or withdrawn as a result of the issuance of such additional bonds of the same series. Flow of Funds The trustee is instructed to draw under the LOC for principal and/or interest in order to receive payment in accordance with its terms in order to receive timely payment on all interest and principal payment dates. The trustee is also instructed to draw under the LOC for payment of purchase price in accordance with its terms to the extent remarketing proceeds are insufficient, in order to receive payment by 2:00 p.m., Eastern time on such date. Bonds that are purchased by the Bank due to a failed remarketing are held by the trustee and will not be released until the trustee has received confirmation from the Bank stating that the LOC has been reinstated for the full amount of the purchase price drawn for such Bonds. Direct Pay Letter of Credit The LOC provided by the Bank is sized for the full principal amount plus 43 days of interest at the maximum interest rate of 12%. The LOC provides sufficient coverage for the Bonds while they bear interest in the weekly, daily or monthly rate modes. Draws on Letter of Credit Conforming draws under the LOC for principal and interest received by the Bank at or prior to 5:00 p.m., Eastern time, on a business day, will be honored by 12:00 p.m., Eastern time, on the following business day. Conforming draws for purchase price received by the Bank by 12:00 p.m., Eastern time, on a business day, will be honored by the Bank by 2:00 p.m., Eastern time, on the same business day. Reinstatement of Interest Draws Draws made under the LOC for interest shall be automatically and immediately reinstated by the Bank on the 10th day following the Bank's honoring any such interest drawing unless the trustee receives notice of non-reinstatement of the LOC by the 9th day following such a drawing. Upon receipt of such notice, the trustee is directed to immediately accelerate the maturity of the Bonds. Interest on the bonds ceases to accrue upon such declaration. Substitution Substitution of the LOC is permitted and requires a mandatory tender of the Bonds on the date the substitute LOC will go into effect. On such mandatory tender date, the trustee shall draw under the existing LOC for full purchase price of the Bonds, to the extent remarketing proceeds are not available, and shall not surrender the existing LOC to the Bank until after all draws have been honored. Reimbursement Agreement Defaults The Bank may deliver written notice to the trustee stating that an event of default under the reimbursement agreement has occurred and is continuing and directing the immediate acceleration of the maturity of the Bonds. Upon receipt of such notice, the trustee is directed to immediately accelerate the maturity of the Bonds. Interest on the bonds ceases to accrue upon such declaration. Expiration/Termination of the Letter of Credit The LOC expires upon the earliest to occur of: (1) the stated expiration date, June 22, 2016; (2) on the date the Bank receives the trustee's certification that: (a) a substitute LOC has been accepted, (b) the interest rate mode has been converted to a mode other than the daily, weekly or monthly rate modes , or (c) no Bonds remain outstanding; (3) the Bank's receipt of notice from the trustee of the optional or mandatory redemption of all the Bonds; (4) 10 business days following the trustee's receipt of notice of an event of default under the reimbursement agreement; or (5) the Bank's receipt of notice from the trustee of the acceleration or defeasance of all the Bonds. Optional Tenders While the Bonds are in the weekly rate mode, bondholders may optionally tender their Bonds on any business day, by providing written notice to the tender agent and the remarketing agent by 3:00 p.m., Eastern time at least 5 business days in advance. While the Bonds are in the daily rate mode, bondholders may optionally tender their Bonds on any business day, by providing written notice to the tender agent and the remarketing agent by 11:00 a.m., Eastern time. While the Bonds are in the monthly rate mode, bondholders may optionally tender their Bonds on any interest payment date, by providing written notice to the tender agent and the remarketing agent by 3:00 p.m., Eastern time, on the business day prior to the interest payment date. Bondholders tendering their Bonds will receive purchase price equal to the par amount of the Bonds tendered plus accrued interest to the tender date. Mandatory Tenders The Bonds are subject to mandatory tender on these dates: (i) on any conversion date; (ii) on the LOC substitution date; or (iii) on the 2nd business day prior to the LOC expiration date. Mandatory Redemption The Bonds are subject to mandatory sinking fund redemptions. WHAT COULD CHANGE THE RATING-UP Long-Term: The long-term rating on the Bonds could be raised if the long-term rating of the Bank was upgraded. Short-Term: Not applicable WHAT COULD CHANGE THE RATING-DOWN Long-Term: The long-term rating on the Bonds could be lowered if the long-term rating of the Bank was downgraded. Short-Term: The short-term rating on the Bonds could be lowered if the short-term rating of the Bank was downgraded. Key Contacts Trustee: Bank of New York Mellon Trust Company, N.A. Remarketing Agent: Merrill Lynch, Pierce, Fenner & Smith Inc. The last rating action on the Bonds took place on April 18, 2011 when the long term and short term ratings were downgraded to Baa3/S.G. The principal methodology used in this rating was Moody's Methodology for Rating U.S. Public Finance Transactions Based on the Credit Substitution Approach published in August 2009. GAMETECH INT'L: Amends Loan Agreement with U.S. Bank, et al. ------------------------------------------------------------ Gametech International, Inc., entered into an Amended and Restated Loan Agreement with U.S. Bank N.A. and Bank of West, which amends the terms of the Company's existing credit facility with the Lenders. Provided the Company remains in compliance with the terms of the new loan agreement as of June 30, 2012, the term of the facility will extend from June 30, 2012 to June 30, 2013. The new agreement does not impose any obligation on the part of the Lenders to provide additional financing to the Company. Substantially all of the assets of the Company, including its corporate headquarters, continue to collateralize the Company's borrowings. Under the terms of the new loan agreement, the Company is required to make monthly payments of principal in the amount of $200 thousand from August 2011 through June 2012, and if extended through October 2012, increasing to $300 thousand from November 2012 until the facility matures on June 30, 2013, at which time the remaining principal balance becomes due. The new loan agreement provides that all outstanding balances under the facility bear interest at a base rate, which is equal to an applicable margin plus the daily Eurocurrency rate or an alternative base rate (as provided for in the agreement). The current applicable margin is 5.80%, and increases to 7.50% (February 2012 through April 2012), 8.50% (May 2012 through October 2012) and 9.50% (November 2012 through June 30, 2013). Upon an event of default, the interest rate under the facility will increase by 3%. The Company's interest rate swap agreement continues to remain effective following the Company's entry into the new loan agreement, and applies to both the term loan and revolver. As of June 15, 2011, the interest rate was 5.99% plus 3.80% effect of the interest rate swap for a total of 9.79%. The new loan agreement requires the Company to apply 75% of its excess cash flow as of the end of each fiscal quarter beginning with the quarter ending July 31, 2011, towards the satisfaction of its obligations under the facility. Additionally, the Company is required to apply 100% of the proceeds from certain transactions and other sources to the prepayment of its obligations under the facility, including the net cash proceeds from any sale of assets (other than sales of inventory in the ordinary course of business), financings, excess insurance proceeds from casualty events, condemnation awards, the receipt of specific assets, and other events as specified in the agreement. In addition, the agreement prohibits capital expenditures for any use other than purchases of equipment for leasing to customers in the ordinary course of business, and limits the amount of capital expenditures that may be made by the Company. The new loan agreement requires the Company to comply with various financial and non-financial covenants as well as customary events of default. The financial covenants include requirements that the Company maintain minimum quarterly profitability, quarterly consolidated EBITDA, and cash flow leverage and fixed charge coverage ratios, which are measured monthly beginning Oct. 31, 2011. Additionally, the Company is required to maintain at least $750 thousand in liquidity at all times. The non-financial covenants include restrictions on asset divestitures, liens, transactions with related parties, limitations on additional indebtedness, mergers, acquisitions and consolidations, cash dividends, issuance and redemptions of stock, investments, sale leaseback transactions, operations outside of submitted strategic plan, a change of control, as well as a requirement to continue to retain a consultant that is acceptable to both the Lenders and the Company. In consideration for its entry into the new loan agreement, the Company is required to pay a closing fee in the amount of $736 thousand, fifty percent of which was due at closing. The remaining half is due Dec. 31, 2011, but will be waived upon satisfaction of certain financial conditions set forth in the loan agreement. The agreement also required a payment of $1.0 million at closing, which was first applied to the portion of the closing fee due at closing and second to the outstanding principal balance of the term loan. Following the closing of the new loan agreement and payment of the required payments on June 15, 2011, the aggregate outstanding principal balance under the credit facility was $23.9 million. After giving consideration to the restructured payment schedule, the financial covenants and other requirements set forth in the new loan agreement, the Company expects that it will be required to make payments of approximately $9.5 million in the twelve-month period ending April 29, 2012, approximately $3.1 million in the twelve-month period ending April 28, 2013 and payments of approximately $13.0 million for the remaining term of the loan ending June 30, 2013. About GameTech Based in Reno, Nevada, GameTech develops and manufactures gaming entertainment products and systems. GameTech holds a significant position in the North American bingo market with its interactive electronic bingo systems, portable and fixed-based gaming units, and complete hall management modules. It also holds a significant position in select North American VLT markets, primarily Montana, Louisiana, and South Dakota, where it offers video lottery terminals and related gaming equipment and software. It also offers Class III slot machines and server-based gaming systems. The Company reported a net loss of $20.4 million on $35.2 million of revenue for the 52 weeks ended Oct. 31, 2010, compared with a net loss of $10.5 million on $47.8 million of revenue for the 52 weeks ended Nov. 1, 2009. Piercy Bowler Taylor & Kern, in Las Vegas, Nevada, expressed substantial doubt about GameTech International, Inc.'s ability to continue as a going concern. The independent auditors noted that the Company has suffered reoccurring losses from operations and has been unable to extend the maturity of its debt, or raise additional capital necessary to execute its business plan. The Company's balance sheet at Jan. 30, 2011, showed $40.86 million in current assets, $31.47 million in current liabilities and $9.39 million in total stockholders' equity. GENERAL MOTORS: Dist. Court Says Ex-Employee's Suit Can't Proceed ----------------------------------------------------------------- District Judge John G. Koeltl in New York affirmed Bankruptcy Judge Robert Gerber's decision denying a former General Motors Corp. employee's request for relief from the automatic stay, and ordering the employee to withdraw an action he brought against Motors Liquidation Company, et al., f/k/a General Motors Corp., et al., in the Eastern District of Michigan. Stanley R. Stasko filed the complaint on Dec. 11, 2009, alleging a claim pursuant to 42 U.S.C. Sec. 1983 and requesting compensatory damages for "actual work performed [by appellant] . . . from July 1983 to August 1995," and punitive damages for hostile work environment. He was a GM employee over 10 years prior to the filing of the Michigan Action. He seeks a default judgment against the Debtors in the Michigan Action, seeking $2,775,266 in damages. The Michigan Action was filed six months after the Debtors filed petitions for bankruptcy pursuant to chapter 11, triggering the automatic stay, and almost two weeks after the deadline to file a proof of claim with the bankruptcy court. The District Court case is Stanley R. Stasko, Appellant, v. Motors Liquidation Company, Appellee, No. 10 Civ. 4322 (S.D.N.Y.). A copy of the District Court's June 17, 2011 Memorandum Opinion and Order is available at http://is.gd/ZDf76ufrom Leagle.com. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers. GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. is 60.8% owned by the U.S. Government. It was formed to acquire the operations of General Motors Corporation through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The deal was closed on July 10, 2009, and Old GM changed its name to Motors Liquidation Co. Old GM remains subject to a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. New GM has a 'BB-' corporate credit rating from Standard & Poor's and a 'BB-' issuer default rating from Fitch. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP serve as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long serve as counsel regarding supplier contract matters. FTI Consulting, Inc., serves as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Asbestos Committee. Legal Analysis Systems, Inc., serves as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. GRAHAM PACKAGING: Fitch Revises Watch Status on 'B' IDR to Neg. --------------------------------------------------------------- Fitch Ratings has revised the Rating Watch status on Graham Packaging Company, L.P.'s and its subsidiary, GPC Capital Corp.'s 'B' Issuer Default Rating and the long-term debt ratings to Negative from Positive. The rating action follows Graham's announcement that the company has signed a definitive merger agreement, and an amendment thereto, under which Graham would be acquired by Reynolds Group Holdings Limited in an all-cash transaction for $25.50 per share. The transaction is valued at approximately $4.5 billion including assumed indebtedness. The deal is expected to close in the second half of this year. Details for the transaction financing have not been released. Graham's previous merger agreement with Silgan Holdings Inc. has been terminated. Graham's credit agreement contains triggers that allow lenders to declare an event of default and elect to declare all borrowings due and payable in the event of a party acquiring beneficial ownership. The debt indentures also contain a change of control covenant that requires the company to repurchase all outstanding notes at 101% of their principal amount plus accrued and unpaid interest. The Negative Rating Watch will be resolved upon closing of the acquisition. Fitch has placed these ratings on Rating Watch Negative: Graham and subsidiary GPC Capital Corp.: -- IDR 'B'; -- Senior secured revolving credit facility 'B+/RR3'; -- Senior secured term loan 'B+/RR3'; -- Senior unsecured notes 'CCC/RR6'; -- Senior subordinated notes 'CCC/RR6'. GRAMERCY PARK: Stay Lifted on Sole Assets, Wants Case Dismissed --------------------------------------------------------------- Gramercy Park Land, LLC, asks the U.S. Bankruptcy Court for the Southern District of New York to dismiss its Chapter 11 case. The Debtor relates that it will be unable to confirm a chapter 11 plan due to unsuccessful negotiations with the secured lender regarding the Debtor's sole asset. On May 18, 2011, the Court granted the motion of Stabfund (USA), Inc. to lift the automatic stay with regard to its sole asset. The Debtor is represented by: The Law Offices of Avrum J. Rosen, PLLC Avrum J. Rosen, Esq. George N. Bara, Esq. 38 New Street Huntington, NY 11743 Tel: (631) 423 8527 E-mail: ajrlaw@aol.com 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. GRAPHIC PACKAGING: S&P Upgrades Corporate Credit Rating to 'BB' --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Marietta, Ga.-based Graphic Packaging International Inc., including the corporate credit rating, to 'BB' from 'BB-'. The rating outlook is positive. "The upgrade reflects Graphic Packaging's continued progress in strengthening its financial risk profile, and prospects for continued improvement over the next year," said Standard & Poor's credit analyst Pamela Rice. "The company's total adjusted debt as of March 31, 2011, was $2.9 billion, about $235 million less than a year earlier, as the company used free cash flow to reduce debt. Subsequent to the end of the first quarter, the company used about $150 million of proceeds from its recent sale of equity to repay debt. In addition, we believe Graphic Packaging should generate modestly higher EBITDA over the next year because of higher prices, steady demand for the company's paperboard packaging products given our economists' forecast for GDP growth between 2.5% and 3.0%, and continued productivity and cost savings efforts. As a result, we expect Graphic Packaging to generate at least $200 million of free cash flow in 2011, which we believe it will use to further reduce debt. In our view, adjusted debt to EBITDA and funds from operations (FFO) to adjusted debt should strengthen to 4x or below by year-end 2011 and nearly 20%, levels we believe are consistent with a significant financial risk profile and the 'BB' rating given our view of the company's business risk profile as satisfactory," S&P said. "If the company continues to use free cash flow over the next 18 months to reduce debt, we believe adjusted leverage could decline to 3.5x or less and FFO to adjusted debt improve to between 20% and 25% by year-end 2012. If credit measures improve in line with these expectations, we could raise the corporate credit rating to 'BB+'," S&P related. "The ratings on Graphic Packaging reflect the combination of what we consider to be its satisfactory business risk profile and its significant financial risk profile. The company has leading market positions, long-term customer relationships, a value-added product mix, and relatively steady earnings capacity. In addition, the ratings take into account our expectations for considerable free cash flow, the company's stated commitment to reduce debt, and its strong liquidity," S&P said. Graphic Packaging manufactures paperboard, most of which it uses internally to produce beverage carriers or folding cartons for food, household goods, and other consumer products that tend to be recession-resistant. The rating outlook is positive. "We expect Graphic Packaging to continue to utilize its free cash flow to reduce debt, which along with moderately improving earnings could lead to credit measures that may be consistent with a higher rating. In the near term, our rating incorporates a moderate increase in EBITDA in 2011 compared with 2010, primarily as a result of higher pricing and operational improvements. In addition, we expect the company to generate at least $200 million of free cash flow in 2011 based on our EBITDA projections, and use it primarily to reduce debt. We believe adjusted leverage could improve to 4x or below and FFO to adjusted debt could increase to more than 15% by year-end 2011 if the company uses its free cash flow to reduce debt," S&P said. "We could raise the ratings if earnings and cash flow are sufficiently robust because of the economic recovery and further cost reductions, and the company reduces debt so that we believe adjusted leverage and FFO to adjusted debt will be sustained at about 3.5x and more than 20%," according to S&P. "We could revise the outlook to stable if operating conditions are worse than we expect because of a renewed slowdown in the U.S. economy, and the company uses its free cash flow for other activities such as acquisitions or growth initiatives, and we believe it is more likely to maintain adjusted leverage and FFO to adjusted debt of about 4x or less than 20%," S&P noted. GRUBB & ELLIS: Rispoli & Engel to Receive Transaction Bonuses ------------------------------------------------------------- Grubb & Ellis Company entered into (i) an agreement with Michael Rispoli, the Company's Executive Vice President and Chief Financial Officer, and (ii) an agreement with Matthew Engel, the Company's Senior Vice President, Accounting & Finance/Chief Accounting Officer, pursuant to which Messrs. Rispoli and Engel are entitled to receive bonuses in connection with certain strategic transactions involving the Company or certain of its subsidiaries. Under the Agreements, Messrs. Rispoli and Engel are entitled to receive, in the aggregate, $325,000 and $300,000, respectively. Pursuant to the terms of the Rispoli Agreement, Mr. Rispoli received $25,000, to be applied towards his Strategic Transaction Payment, upon the execution of his agreement in recognition of his efforts in connection with the Company's subsidiary, Grubb & Ellis Alesco Global Advisors, LLC, entering into that certain asset purchase agreement with Lazard Asset Management LLC. The timing of the payment by the Company of each of Mr. Engel's Strategic Transaction Payment and the remainder of Mr. Rispoli's Strategic Transaction Payment depends upon the timing of the occurrence of the closing of one or more strategic transactions involving (i) Daymark Realty Advisors, Inc., NNN Realty Advisors, Inc., Grubb & Ellis Realty Investors, LLC, or Triple Net Properties Realty, Inc., or (ii) the Company itself. In addition, each of Messrs. Rispoli and Engel would be entitled to a one-time payment in an amount equal to the entire Strategic Transaction Payment, irrespective of any portion of the Strategic Transaction Payment that either may have already received, in the event either of them is terminated by the Company without cause or as a result of death or disability or voluntary resignation from the Company for good reason prior to the closing of a strategic transaction involving the Company. On June 17, 2011, the Company's Board of Directors approved the proration of Jacob Van Berkel's target bonus amount, which is equal to his annual base salary ($425,000), on a monthly basis beginning in June 2011 until the end of the year. In addition, the Board approved the acceleration of any unpaid amounts of this target bonus owed to Mr. Van Berkel upon the closing of a strategic transaction by the Company. About Grubb & Ellis Company Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is one of the largest and most respected commercial real estate services and investment companies in the world. Our 5,200 professionals in more than 100 company-owned and affiliate offices draw from a unique platform of real estate services, practice groups and investment products to deliver comprehensive, integrated solutions to real estate owners, tenants and investors. The firm's transaction, management, consulting and investment services are supported by highly regarded proprietary market research and extensive local expertise. Through its investment management business, the company is a leading sponsor of real estate investment programs. The Company's balance sheet at March 31, 2011, showed $256.53 million in total assets, $242.77 million in total liabilities, $92.97 million in 12% cumulative participating perpetual convertible preferred stock, and a $79.22 million total deficit. The Company reported a net loss of $69.7 million on $575.5 million of revenues for 2010, compared with a net loss of $80.5 million on $527.9 million of revenues for 2009. GSC GROUP: Settles With SEC Over Magnetar CDO Disclosure -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Chapter 11 trustee for GSC Group Inc. agreed to settle a civil action brought by the Securities and Exchange Commission in connection with a 2007 collateralized debt obligations where GSC failed to tell investors about a conflict of interest in the selection of the securities in the CDOs. The settlement comes up for approval on July 13 in U.S. Bankruptcy Court in Manhattan. According to Mr. Rochelle, the trustee's papers explain how investors were told that GSC was selecting the securities when in reality they were the choice of Magnetar Capital LLC. The conflict arose because Magnetar took a short position against the securities with a face value of $600 million. In the settlement, GSC agrees to commit no further violations of securities law. There is no monetary penalty on GSC nor are there any limitations on the future conduct of the business. About GSC Group Florham Park, New Jersey-based GSC Group, Inc. -- http://www.gsc.com/-- is a private equity firm specializing in mezzanine and fund of fund investments. Originally named Greenwich Street Capital Partners Inc. when it was a subsidiary of Travelers Group Inc., GSC became independent in 1998 and at one time had $28 billion of assets under management. Market reverses, termination of some funds, and withdrawal of customers' investments reduced funds under management at the time of bankruptcy to $8.4 billion. GSC Group filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B. Solow, Esq., at Kaye Scholer LLP, serves as the Debtor's bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's notice and claims agent. Capstone Advisory Group, LLC, is the Debtor's financial advisor. The Debtor estimated its assets at $1 million to $10 million and debts at $100 million to $500 million as of the Chapter 11 filing. Former Bankruptcy Judge James L. Garrity was appointed as trustee in the Chapter 11 case. He was appointed after some lenders argued that company executives became "quasi agents" for Black Diamond. The GSC trustee is proposing to sell the business for a price fully covering $256.8 million in secured claims, with $18.6 million cash left over. The trustee's liquidating plan would have $4.6 million for unsecured creditors. Black Diamond Capital Finance LLC, as agent for secured lenders, will buy most of the assets with a $224 million credit bid, a $6.7 million note, $5 million cash, and debt assumption. HAWAIIAN TELCOM: Moody's Assigns 'B1' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service has assigned a B1 Corporate Family Rating to Hawaiian Telcom Communications, Inc. Moody's has also assigned a B1 rating to the Company's proposed new $300 million senior secured term loan due 2017 and a Ba1 rating to Hawaiian Telcom's planned $30 million priority senior secured revolving credit facility due 2015. The outlook is stable. Moody's has assigned these ratings: Hawaiian Telcom Communications, Inc. -- Corporate Family Rating -- B1 -- Probability of Default Rating -- B2 -- $30m Priority Senior Secured RCF -- Ba1, LGD1-0% -- $300m Senior Secured Term Loan -- B1, LGD3-35% -- SGL / Short-Term Rating -- SGL-1 Outlook -- Stable RATING RATIONALE Hawaiian Telcom's B1 corporate family rating reflects its diverse base of recurring revenues, strong market share, modest leverage and adequate cash flows. These positives are offset by the company's relatively small scale, the tough competition from cable triple-play bundled service and the long term challenges associated with wireless substitution. The B1 rating reflects Moody's view that Hawaiian Telcom will successfully deploy video services and further stabilize its consumer revenue base. The ratings incorporate a very narrow tolerance for operational missteps, particularly with respect to the company's IPTV rollout. "Hawaiian Telcom has made good progress since restructuring," commented Moody's Senior Vice President Dennis Saputo. "Management has restored the basic operating structure and stabilized the base. Now they must successfully roll out video services and really attack the cable guys," Saputo continued. Hawaiian Telcom has a favorable competitive position within the market for business services. The company's sophisticated data offerings, broad asset base and ILEC tradition for reliability appeal to enterprise customers. Hawaiian Telcom offers advanced data services, such as MPLS, Ethernet and VoIP, and plans to continue to enhance its offers. However, like many wireline telco's, Hawaiian Telcom has lost market share in the small business segment to the cable competitor. Unlike enterprise business segment, Hawaiian Telcom has an inferior product lineup for residential customers. Cable competitors have gained significant market share with triple-play bundles. Hawaiian Telcom, forced to wait until bankruptcy exit to rollout video, has to move aggressively to catch up.Moody'sbelieves that the company will receive a TV franchise around the middle of this year, which will allow it to rollout an IPTV offering. The success of this product is critical to Hawaiian Telcom's future viability, as it will improve its competitive position and allow for improved customer retention. The ratings for the debt instruments reflect both the overall probability of default of Hawaiian Telcom, to which Moody's has assigned a probability of default rating (PDR) of B2, and loss given default assessments. The Ba1 (LGD1- 0%) rating of the proposed $30 million senior 1st lien secured revolving credit facilities reflects its seniority of claim, its small size relative to the capital structure and its senior priority in right of payment ahead of the term loan creditors. The $300 million secured term loan is rated B1 (LGD3 -- 35%), in line with the corporate family rating. Due to its priority treatment through the recent bankruptcy restructuring, Moody's ranks the company's unfunded pension obligation equally with the senior secured term loan. This places the preponderance of obligations at the same standing and results in a rating for the term loan in line with the overall B1family rating. Hawaiian Telcom has very good liquidity with approximately $80 million in cash as of March 31, 2011 and the proposed $30 million revolver which will be undrawn at close. Moody's anticipates that Hawaiian Telcom will maintain at least $50 million in cash over the next 12-18 months and that the company will not draw upon the revolver over that timeframe. Moody's could lower Hawaiian Telcom's ratings if leverage were to trend toward 4.0x (Moody's adjusted) and free cash flow were to be negative, both on a sustained basis. Additionally, downward rating action would result from operational missteps, particularly related to the company's video services rollout. If service rollout was unsuccessful, as evidenced by high churn or low penetration, downward ratings action could occur. Moody's could raise Hawaiian Telcom's ratings if leverage were to trend toward 2.75x and free-cash-flow to debt were to reach the mid-single-digit percentage range. The principal methodology used in rating Hawaiian Telcom was the Global Telecommunications 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. Hawaiian Telcom is a telecommunications provider in the state of Hawaii with approximately 440,000 access lines and 100,000 high speed internet customers on the islands of Oahu, Maui, Hawaii, Kauai, Molokai and Lanai. For the twelve months ended 3/31/11, Hawaiian Telcom generated $400 million in revenues. HILL TOP: To Sell Assets to Weatherford Artificial for $3.7MM ------------------------------------------------------------- Judge Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division, authorized Hill Top Farm, Ltd., to sell 208.29 acres of real property located in Bexar County, Texas, to Weatherford Artificial Lift Systems, Inc., for $3,700,000. The Debtor has determined that the best and most efficient exit strategy for its successful emergence from Chapter 11 will likely be through a sale of some its assets to a third party in order to reduce and restructure the remaining balance of its indebtedness due and owing to First National Bank, N.A. Payment of the Debtor's indebtedness to First National Bank is secured by real property in Bexar County and Webb County, Texas. No other interested party, except Weatherford, submitted a qualified bid by the April 13 submission deadline. San Antonio, Texas-based Hill Top Farm, Ltd., filed for Chapter 11 bankruptcy protection on July 2, 2010 (Bankr. W.D. Tex. Case No. 10-52526). William B. Kingman, Esq., who has an office in San Antonio, Texas, represents the Debtor. The Company estimated assets at $10 million to $50 million and debts at $1 million to $10 million. There was no creditors committee appointed in the Debtor's case. HINESLEY FAMILY: Founder's Son Allowed $92,200 Gen. Unsec. Claim ---------------------------------------------------------------- Bankruptcy Judge Ralph B. Kirscher sustained in part and denied in part Hinesley Family Limited Partnership No. 1's Objection to Proof of Claim No. 2 filed by Charles Hinesley, Jr. The Debtor was founded by the Hinesley family. Specifically, Charles Hinesley Sr., Judith Hinesley, Charles Jr. and Morgan Hinesley formed the Debtor in August 1997. The Debtor is a limited partnership with three limited partners, each holding a 30% interest in the Debtor: Judith Hinesley (wife and mother), Charles (son) and Morgan (son). Hinesley Sr. owns a 10% interest in the Debtor and is the sole general partner. The Debtor has historically been engaged in the development of raw land into subdivisions and the construction of single and multi-family residential structures. Charles Jr., however, was terminated from the Debtor's employ after a dispute with his father. He filed a proof of claim, asserting a priority claim of $11,725 and an unsecured claim of $2,103,888. The priority portion of Proof of Claim No. 2 is for wages, salaries or commissions earned within 180 days before the Debtor's bankruptcy filing. The Debtor objects to Charles Jr.'s proof of claim, arguing the claim should be allowed as an unsecured nonpriority claim for $38,200. Charles Jr. counters that in addition to the $38,200, he is entitled to $54,000 in wages for the nine month period of time between May 19, 2011, and Feb. 28, 2010. Charles Jr.'s living situation has deteriorated since the dispute began. He lost his home, a Silverado pickup and his camper trailer. Judge Kircher held that Charles Jr. has proven by a preponderance of the evidence that he is entitled to his wage claims of $38,200 and $54,000 from the Debtor. However, Charles Jr. has not demonstrated by a preponderance of the evidence the validity of the remainder of his claim. Accordingly, Charles Jr. is allowed an unsecured nonpriority claim for $92,200. A copy of Judge Kirscher's June 21, 2011 Memorandum of Decision is available at http://is.gd/ACAtrQfrom Leagle.com. Hinesley Family Limited Partnership No. 1 filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 10-61822) on July 27, 2010. HONDO MINERALS: Posts $376,800 Net Loss in April 30 Quarter ----------------------------------------------------------- Hondo Minerals Corporation, formerly Tycore Ventures Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $376,835 for the three months ended April 30, 2011, compared with a net loss of $44,775 for the same period ended April 30, 2010. Net loss for the nine month period ended April 30, 2011, was $711,568 compared to net loss of $131,886 for the nine month period ended April 30, 2010. The Company recorded no revenues for the three and nine months ended April 30, 2011, and 2010. The Company's balance sheet at April 30, 2011, showed $4.43 million in total assets, $163,307 in total liabilities, and a stockholders' deficit of $4.27 million. LBB & Associates Ltd., LLP, in Houston, Texas, expressed substantial doubt about Tycore Ventures Inc.'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 of the Company's absence of revenues, recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2011. A copy of the Form 10-Q is available at http://is.gd/copUP8 Tycore Ventures Inc. was incorporated in the State of Nevada on Sept. 25, 2007, to engage in the acquisition, exploration and development of natural resource properties. On Feb. 22, 2011, Tycore changed its name to Hondo Minerals Corporation. HORIZON BANCORP: Six Directors Elected at Annual Meeting -------------------------------------------------------- At the 2011 Annual Meeting, which took place on June 15, 2011, the shareholders adopted the Fourth Amended and Restated Articles of Incorporation of Horizon Bancorporation, Inc., to (i) change the Company's name to Manasota Group, Inc., (ii) eliminate the designation of Series A Preferred Stock, (iii) eliminate staggered terms for directors and (iv) eliminate the provision which did not allow for the taking of shareholder action by written consent where it would otherwise be allowed under Florida law. The Company's Fourth Amended and Restated Articles of Incorporation reflecting the foregoing amendments were filed with the Secretary of State of the State of Florida on June 17, 2011. At the Annual Meeting, the Company's shareholders: (i) elected Charles S. Conoley, Michael S. Glasgow, Barclay Kirkland, D.D.S., C. Donald Miller, Jr., Bruce E. Shackelford, Clarence R. Urban to serve as directors for a term of one year, expiring at the 2012 Annual Meeting of Shareholders and until their successors are duly elected and qualified; (ii) adopted the Fourth Amended and Restated Articles of Incorporation and (iii) ratified the appointment of Francis & Company, CPAs as the Company's independent registered public accounting firm to audit the financial statements for our 2011 fiscal year. About Horizon Bancorporation Brandenton, Fla.-based Horizon Bancorporation, Inc., acted as a one-bank holding company with respect to Horizon Bank, Bradenton, Florida, from Oct. 25, 1999, when the Bank commenced operations, until Sept. 10, 2010, when the Florida Office of Financial Regulation (the "OFR") declared the Bank to be insolvent. The Bank was closed, with the FDIC being appointed as receiver therefor, and sold to Bank of the Ozarks. In the short run, management intends to maintain the Company's status as a reporting public company, which, if an appropriate opportunity arises, may engage in a transaction with an operating company. The Company's balance sheet at March 31, 2011, showed $1.25 million in total assets, $1.08 million in total liabilities, and stockholders' equity of $169,480. As reported in the TCR on April 25, 2011, Francis & Co., CPA's, in Atlanta, Georgia, noted that the Company has suffered heavy losses in calendar years 2010 and 2009, reducing its capital accounts significantly. "Moreover, federal and state regulators, in 2009, imposed a Written Agreement on the Bank mainly due to increasing levels in non-performing assets and eroding regulatory capital. The above, combined with the closing of the subsidiary bank raises substantial doubt about the Company's ability to continue as a going concern INDIANA EQUITY: Court Approves Crane Heyman as Attorneys -------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois authorized Indiana Equity Investments, LLC, to employ David K. Welch, Arthur G. Simon, Jeffrey C. Dan, and the law firm of Crane, Heyman, Simon, Welch & Clar, as attorneys. According to the Troubled Company Reporter on June 9, 2011, the firm, will, among other things: A. prepare necessary applications, motions, answers, orders, adversary proceedings, reports and other legal papers; B. provide the Debtor with legal advice with respect to its rights and duties involving its property as well as its reorganization efforts herein; and C. appear in court and to litigate whenever necessary. To the best of the Debtor's knowledge, and pursuant to the Affidavits attached hereto as Exhibit A and incorporated by reference herein, CHSWC does not hold any interest adverse to the Debtor or the estate in the matters upon which they are to be engaged herein, and that employment of CHSWC is in the best interests of this estate. Prior to the filing of this Chapter 11 case, CHSWC was paid $50,000 as an advance payment retainer for its representation of the Debtor in this bankruptcy case and matters relating thereto. All compensation and reimbursement of expenses to CHSWC are subject to the further Order of this Court. The attorneys/firm can be reached at: David K. Welch, Esq. Arthur G. Simon, Esq. Jeffrey C. Dan, Esq. CRANE, HEYMAN, SIMON, WELCH & CLAR 135 South LaSalle Street, Suite 3705 Chicago, IL 60603 TEL: (312) 641-6777 FAX: (312) 641-7114 About Indiana Equity Based in Alsip, Illinois, Indiana Equity Investments, LLC, aka Autumnwoods Apartments and Brendonwood Apartments, owns two commercial multi-family properties located in Fort Wayne, Indiana. It filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-19277) on May 5, 2011. Judge Eugene R. Wedoff presides over the case. In its petition, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in debts. Indiana Equity's petition was signed by Joseph Junkovic, as the manager. Mr. Junkovic commenced his own Chapter 11 case (Bankr. N.D. Ill. Case No. 10-55888) in 2010. INDIANA EQUITY: Files Schedules of Assets And Liabilities --------------------------------------------------------- Indiana Equity Investments, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Illinois its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------------ ----------- A. Real Property B. Personal Property $639,178 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $7,542,941 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Non-priority Claims $566,373 ------------ ------------ TOTAL $639,178 $8,109,315 A full-text copy of the Summary of Schedules is available for free at http://bankrupt.com/misc/INDIANA_schedules.pdf About Indiana Equity Based in Alsip, Illinois, Indiana Equity Investments, LLC, aka Autumnwoods Apartments and Brendonwood Apartments, owns two commercial multi-family properties located in Fort Wayne, Indiana. It filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-19277) on May 5, 2011. Judge Eugene R. Wedoff presides over the case. In its petition, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in debts. Indiana Equity's petition was signed by Joseph Junkovic, as the manager. Mr. Junkovic commenced his own Chapter 11 case (Bankr. N.D. Ill. Case No. 10-55888) in 2010. INNKEEPERS USA: Shareholders Defend $3.5 Million from Plan ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Innkeepers USA Trust ad hoc committee of preferred shareholders filed papers supporting approval of the hotel owner's Chapter 11 plan. Responding to objections from Innkeepers' two principal secured creditors, the ad hoc group contends that the $3.5 million going to the unofficial committee under the plan isn't a payment on account of their preferred share holdings. Rather, the brief says, the payment is in return for contributions made in the case and for releasing claims no one else raised. Mr. Rochelle also reports that the official unsecured creditors' committee filed papers on June 17 also supporting approval of the plan. The committee members note that their constituencies will receive 70% to 92% under the plan. Early in the case, the dividend would have been negligible, the committee said. The unsecured committee didn't discuss the objections raised by the secured lenders. A hearing on the Plan was scheduled for June 23. About Innkeepers USA Trust Innkeepers USA Trust is a self-administered Maryland real estate investment trust with a primary business focus on acquiring premium-branded upscale extended-stay, mid-priced limited service, and select-service hotels. Innkeepers, through its indirect subsidiaries, owns and operates an expansive portfolio of 72 upscale and mid-priced extended-stay and select-service hotels, consisting of approximately 10,000 rooms, located in 20 states across the United States. Apollo Investment Corporation acquired Innkeepers in June 2007. Innkeepers USA Trust and 91 affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-13800) on July 19, 2010. Paul M. Basta, Esq., at Kirkland & Ellis LLP, in New York; Anup Sathy, P.C., Esq., Marc J. Carmel, Esq., at Kirkland & Ellis in Chicago; and Daniel T. Donovan, Esq., at Kirkland & Ellis in Washington, D.C., serve as counsel to the Debtors. AlixPartners is the restructuring advisor and Marc A. Beilinson is the chief restructuring officer. Moelis & Company is the financial advisor. Omni Management Group, LLC, is the claims and notice agent. Attorneys at Morrison & Foerster, LLP, represent the Official Committee of Unsecured Creditors. The Company's consolidated assets for 2009 totaled approximately $1.5 billion. As of July 19, 2010, the Company and its affiliates have incurred approximately $1.29 billion of secured debt. The confirmation hearing for approval of Innkeepers' Chapter 11 plan is set for June 23. JACKSON HEWITT: Trustee Forms Three-Member Creditors Committee -------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for the Region 3, appointed three creditors to serve on an Official Committee of Unsecured Creditors of Jackson Hewitt Tax Service Inc. and its debtor-affiliates. The members of the Committee are: 1) Christian and Elizabeth Harper Attn: Eric B. Snyder, Bailey & Glasser, LLP 209 Capitol Street Charleston, WV 25301 Tel: (304) 345-6555 Fax: (304) 342-1110 2) RR Donnelley & Sons Company Attn: Dan Pevonka Moore Wallace North America 3075 Highland Parkway Downers Grove, IL 605154 Tel: (630) 322-6931 Fax: (630) 322-6873 3) Sherita Fugate Attn: Mark A. Chavez, Chavez & Getler LLP 42 Miller Avenue Mill Valley, CA 9494 Tel: (415) 381-5599 Fax: (415) 381-5572 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Jackson Hewitt Tax Service Parsippany, New York-based Jackson Hewitt Tax Service Inc., aka JHTS Inc., provides computerized preparation services for federal, state and local individual income tax returns in the United States through a nationwide network of franchised and company-owned offices operating under the brand name Jackson Hewitt Tax Service. The Company has 700 franchisees who collectively operated a total of 4,846 offices. The Company also operates 1,110 company-owned offices. Jackson Hewitt and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-11587) on May 24, 2011. Judge Mary F. Walrath presides over the case. Skadden, Arps, Slate, Meagher & Flom LLP, serves as the Debtors' bankruptcy counsel. Alvarez & Marsal North America, LLC, serves as their financial advisor. Moelis & Company LLC acts as investment banker. The Garden City Group, Inc., serves as the Debtors' Claims and Noticing Agent. The Debtors also tapped Deloitte & Touche to serve as tax advisors and Kekst & Company to serve as communications advisors. The Debtors filed a Joint Prepackaged Plan of Reorganization and Disclosure Statement together with their petitions. Under the terms of the Plan, Jackson Hewitt's current secured lenders will receive their pro rata share of a new $100 million term loan and all of the equity in the reorganized enterprise. The Company also anticipates entering into a new $115 million revolving credit facility upon consummation of the Plan. It is anticipated that upon consummation of the proposed Plan, Jackson Hewitt's new equity will be privately held. All of the Company's existing common stock will be cancelled upon Jackson Hewitt's emergence from bankruptcy. On May 23, 2011, the Debtors commenced solicitation of votes on the Plan from the lenders. No other classes of creditors or stockholders were solicited, as each such class is either being paid in full or receiving no recovery and hence, is deemed either to accept or reject the Plan, respectively. The Debtors received overwhelming acceptances to the Plan from the lenders. Mark McDermott, Esq., at Skadden Arps, told the Bankruptcy Court at a May 25 hearing that investor and financier Bayside Capital is in line to be "a significant majority" owner of Jackson Hewitt. Bayside Capital has $4.5 billion under management. Bayside is the largest of 10 secured lenders that Jackson Hewitt owes a total of $357 million. Mr. McDermott also told the Court that Jackson Hewitt, worth an estimated $225 million, does not have sufficient value to cover the secured debt. The Court set a July 8 court date to consider confirmation of Jackson Hewitt's Chapter 11 plan. JACKSON HEWITT: Committee to Fight Reorganization Plan ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Jackson Hewitt Tax Service Inc. will receive opposition to its prepackaged Chapter 11 plan from the newly formed official committee representing unsecured creditors. The Committee served notice at a hearing June 22 that it will oppose the plan and intends to file papers deferring the plan-approval hearing. The Committee's opposition isn't surprising given that the plan would give nothing to unsecured creditors. Mr. Rochelle recounts that Jackson Hewitt worked out the plan before the Chapter 11 filing. Secured lenders owed $357 million are to receive all the new stock together with a new $100 million term loan. They already voted to approve the plan. The hearing to consider confirmation of the prepackaged plan is currently scheduled for July 8. About Jackson Hewitt Tax Service Parsippany, New York-based Jackson Hewitt Tax Service Inc., aka JHTS Inc., provides computerized preparation services for federal, state and local individual income tax returns in the United States through a nationwide network of franchised and company-owned offices operating under the brand name Jackson Hewitt Tax Service. The Company has 700 franchisees that collectively operate a total of 4,846 offices. The Company also operates 1,110 company-owned offices. Jackson Hewitt and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-11587) on May 24, 2011. Judge Mary F. Walrath presides over the case. Skadden, Arps, Slate, Meagher & Flom LLP, serves as the Debtors' bankruptcy counsel. Alvarez & Marsal North America, LLC, serves as their financial advisor. Moelis & Company LLC acts as investment banker. The Garden City Group, Inc., serves as the Debtors' Claims and Noticing Agent. The Debtors also tapped Deloitte & Touche to serve as tax advisors and Kekst & Company to serve as communications advisors. The Debtors filed a Joint Prepackaged Plan of Reorganization and Disclosure Statement together with their petitions. Under the terms of the Plan, Jackson Hewitt's current secured lenders will receive their pro rata share of a new $100 million term loan and all of the equity in the reorganized enterprise. The Company also anticipates entering into a new $115 million revolving credit facility upon consummation of the Plan. It is anticipated that upon consummation of the proposed Plan, Jackson Hewitt's new equity will be privately held. All of the Company's existing common stock will be cancelled upon Jackson Hewitt's emergence from bankruptcy. On May 23, 2011, the Debtors commenced solicitation of votes on the Plan from the lenders. No other classes of creditors or stockholders were solicited, as each such class is either being paid in full or receiving no recovery and hence, is deemed either to accept or reject the Plan, respectively. The Debtors received overwhelming acceptances to the Plan from the lenders. Mark McDermott, Esq., at Skadden Arps, told the Bankruptcy Court at a May 25 hearing that investor and financier Bayside Capital is in line to be "a significant majority" owner of Jackson Hewitt. Bayside Capital has $4.5 billion under management. Bayside is the largest of 10 secured lenders that Jackson Hewitt owes a total of $357 million. Mr. McDermott also told the Court that Jackson Hewitt, worth an estimated $225 million, does not have sufficient value to cover the secured debt. The U.S. bankruptcy trustee appointed RR Donnelley & Sons Co and two individuals to an official committee of unsecured creditors in Jackson Hewitt's Chapter 11 case. L-1 IDENTITY: S&P Lowers Corporate Credit Rating to 'B' ------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Stamford, Conn.-based L-1 Identity Solutions Inc. to 'B' from 'B+'. We also lowered the issue-level rating on the company's $135 million revolver to 'BB-' and lowered the issue-level rating on its $175 million convertible notes to 'B' as a result of the lower corporate credit rating. "We placed all ratings on CreditWatch with negative implications," S&P said. L-1 completed the sale of its intelligence services group to BAE systems in February 2011 for a purchase price of $295.8 million and approximately $7.2 million in assumed obligations. It used the net proceeds to repay in full $289.3 million of term loan debt, leaving minimal cash on the balance sheet. The company's $175 million of 3.75% convertible notes and $59.8 million on its revolver remained outstanding at March 31, 2011. The company has signed an agreement to sell its remaining businesses--Secure Credentialing Solutions, Biometric and Enterprise Access Solutions, and Enrollment Services -- to Safran. That transaction is expected to close within the next 30 days. EBITDA in the March 2011 quarter was less than $5 million and free operating cash flow was negative. With minimal cash balances of $4.4 million at March 31, 2011, the company has relied on borrowings under its revolver for additional liquidity. While $66.3 million was available under the $135 million revolver at March 31, 2011, the significant deterioration in EBITDA, combined with continued use of the revolver, could result in leverage that could quickly approach the required 2.75x consolidated leverage ratio required at June 30, 2011 and beyond, restricting further access to the revolver. L-1 was compliant with covenants at March 31, 2011 with a consolidated leverage ratio of 1.18x. "In resolving the CreditWatch, we will monitor the progress of finalizing the sale of the remaining L-1 businesses to Safran as well as financial performance in the June quarter," S&P said. "If EBITDA and liquidity do not improve in the June quarter, and the sale to Safran remains protracted," said Standard & Poor's credit analyst Jennifer Pepper, "we could lower the rating." "If the sale to Safran is completed, we expect to withdraw all ratings on L-1." LAS VEGAS MONORAIL: To Present Plan for Confirmation on Sept. 14 ---------------------------------------------------------------- Tim O'Reiley at the Las Vegas Review-Journal reports that U.S. Bankruptcy Judge Bruce Markell gave Las Vegas Monorail the go signal to send, to creditors for voting, the disclosure statement that explains its restructuring plan. According to the report, once creditors vote on the plan in August, the case will come back to Judge Markell on Sept. 14, 2011, for a final ruling. The report relates that, if the deadline were today, the Plan might well lose. Las Vegas attorney Nile Leatham, representing investors that hold $451.5 million in senior bonds, said his clients would reject the plan because a number of key details remain up in the air. The monorail wants to pay the senior bondholders $44.5 million in three different sets of IOUs. The Review-Journal also reports that one group of junior bondholders holds legal rights that might allow them to derail the case, even though they would receive no payout. In addition, litigation in two others states also affects the monorail, according to the report. The report says investors hold two sets of junior bonds with a face value $207.3 million. When combined with the senior bonds, the monorail proposes to repay only 3% of its $658.8 million total debt. The Review-Journal recounts that the bonds were issued in 2000 to purchase the existing monorail and extend it to its current 3.9 miles. Because the ridership has fallen well short of initial predictions, the monorail has never generated enough revenue to cover both operating expenses and bond payments, leading to the bankruptcy filing early last year. Ambac Financial, which insured the senior bonds against default, has agreed to pay more than $190 million in cash and notes to settle its obligations. Ambac itself failed last year under the weight of bad investments. About Las Vegas Monorail Las Vegas, Nevada-based Las Vegas Monorail Company, organized by the State of Nevada in 2000 as a nonprofit corporation, owns and manages the Las Vegas Monorail. The Monorail is a seven-stop, elevated train system that travels along a 3.9-mile route near the Las Vegas Strip. LVMC has contracted with Bombardier Transit Corporation to operate the Monorail. Though it benefits from its tax-exempt status due to being a nonprofit entity, LVMC claims to be the first privately-owned public transportation system in the nation to be funded solely by fares and advertising. LVMC says it receives no governmental financial support or subsidies. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-10464) on Jan. 13, 2010. Gerald M. Gordon, Esq., at Gordon Silver, assists the Company in its restructuring effort. Alvarez & Marsal North America, LLC, is the Debtor's financial advisor. Stradling Yocca Carlson & Rauth is the Debtor's special bond counsel. Jones Vargas is the Debtor's special corporate counsel. The Company disclosed $395,959,764 in assets and $769,515,450 in liabilities as of the Petition Date. In May 2010, Ambac Assurance Corp. lost its bid to stay the bankruptcy case while a district court considers whether the bankruptcy court wrongly rejected Ambac's argument that Monorail was a municipality and thus ineligible to be a Chapter 11 debtor. LAS VEGAS MONORAIL: Receives Tentative Nod of Plan Outline ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that an attorney in the Las Vegas Monorail Co. case told Bloomberg News the Debtor received tentative approval at a June 20 hearing for a disclosure statement explaining the Chapter 11 plan slated to pay a small portion of secured debt. Anticipating opposition from secured bondholders, the bankruptcy judge will hold two days of confirmation hearings in September. According to the report, under the Plan, unsecured creditors, with claims totaling as much as $175,000, are to split $175,000 in installments over a year. The plan says they are entitled to vote. Holders of $500 million in first-lien bonds are to receive $15 million in new 10% first-lien notes to mature in June 2019. Monorail can elect to pay interest with more notes through 2014. The first-lien bondholders will also share $19.5 million in second-lien notes to mature in June 2019. The second-lien notes will pay interest with more notes. For their unsecured deficiency claim, the first-lien bondholders are in a separate class to receive $10 million in third-lien notes that likewise pay interest with more debt. Holders of $158.7 million in second-tier bonds and $48.5 million in third-tier bonds are to receive nothing in the plan. The bondholders, Mr. Rochelle notes, might argue that the separate class for general unsecured creditors was created solely to have the one class of accepting creditors required to use the cramdown provisions in bankruptcy law. Successful invocation of cramdown could enable Monorail to have court approval of the plan despite voting rejection by bondholders. About Las Vegas Monorail Las Vegas, Nevada-based Las Vegas Monorail Company, organized by the State of Nevada in 2000 as a nonprofit corporation, owns and manages the Las Vegas Monorail. The Monorail is a seven-stop, elevated train system that travels along a 3.9-mile route near the Las Vegas Strip. LVMC has contracted with Bombardier Transit Corporation to operate the Monorail. Though it benefits from its tax-exempt status due to being a nonprofit entity, LVMC claims to be the first privately-owned public transportation system in the nation to be funded solely by fares and advertising. LVMC says it receives no governmental financial support or subsidies. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-10464) on Jan. 13, 2010. Gerald M. Gordon, Esq., at Gordon Silver, assists the Company in its restructuring effort. Alvarez & Marsal North America, LLC, is the Debtor's financial advisor. Stradling Yocca Carlson & Rauth is the Debtor's special bond counsel. Jones Vargas is the Debtor's special corporate counsel. The Company disclosed $395,959,764 in assets and $769,515,450 in liabilities as of the Petition Date. In May 2010, Ambac Assurance Corp. lost its bid to stay the bankruptcy case while a district court considers whether the bankruptcy court wrongly rejected Ambac's argument that Monorail was a municipality and thus ineligible to be a Chapter 11 debtor. LE-NATURE'S INC: Podlucky Pleads Guilty to Fraud Charges -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Gregory J. Podlucky, former chief executive of Le-Nature's Inc., pleaded guilty this week to charges he masterminded an $800 million fraud at the beverage maker. The plea agreement allows him to serve as many as 20 years. Sentencing will take place in October. Mr. Podlucky's brother and three other people already pleaded guilty. Mr. Rochelle recounts that the fraud surfaced after the Delaware Chancery Court appointed a custodian for Le-Nature's in October 2006. The custodian began the Chapter 11 reorganization the next month in Pittsburgh (Bankr. W.D. Pa. Case No. 06-25454). The custodian, Mr. Rochelle relates, concluded that Latrobe, Pennsylvania-based Le-Nature's had two sets of books and that annual revenue could have been as low as $32 million in 2005 when audited financials showed $275 million. A Chapter 11 trustee took over in January 2007 and operations halted. The two plants were sold. The liquidating Chapter 11 plan for Le-Nature's was confirmed in July 2008. LOUISIANA TRANPORTATION: Fitch Downgrades Loan Rating to 'B-' ------------------------------------------------------------- Fitch Ratings has affirmed the Louisiana Transportation Authority's $78.5 million series 2005A bonds at 'BBB'. Fitch has also downgraded the $66 million Federal Transportation Infrastructure Finance and Innovation Act loan to 'B-' from 'BB'. The Outlook for the Series 2005 A bonds remains Stable. The Outlook on the TIFIA loan is revised to Negative from Stable. The debt was issued to fund the construction of the LA 1 toll bridge in the vicinity of Port Fourchon, in Lafourche Parish, Louisiana. Fitch believes the commitment by the State of Louisiana (general obligation rating 'AA' by Fitch) to replenish draws on the 1st Tier Debt Service Reserve (DSR) through a Cooperative Endeavor Agreement (CEA) with the State Department of Economic Development provides significant credit support to the senior lien Series 2005A bonds, improving the otherwise weak project fundamentals. Fitch notes that $14 million of the aggregate $18 million 1st Tier DSR is in the form of a surety bond from Ambac (unrated by Fitch) which provides a certain amount of liquidity risk to the bond holder should Ambac fail to honor draws on its policy. Rating Rationale: The downgrade of the TIFIA debt to 'B-' and the Negative Rating Outlook reflect the poor performance to date of the project relative to initial projections and continued uncertainty regarding future traffic levels. The poor performance is attributed to a series of event risks including hurricanes, BP oil spill, the economic recession, and the failure to fully complete the installation of electronic tolling equipment and software. There is continued uncertainty regarding future traffic and revenue performance on the road given the general economic climate and the enhanced regulatory environment for drilling activities in the Gulf of Mexico. There is a real possibility of a non-payment on the TIFIA debt in the next two to three years absent a debt restructuring. Unlike the senior lien bonds, the TIFIA debt does not benefit from a CEA with the DED to replenish the second tier DSR and is therefore completely dependent on toll revenue for repayment. The 'B-' rating for the TIFIA debt reflects: -- Subordinate lien position of the TIFIA loan which springs to pari passu upon a Bankruptcy Related Event of the LDOTD, truly subordinating TIFIA. -- TIFIA debt does not benefit from a CEA from the State of Louisiana to replenish the DSR fund. -- LA1 violated its rate covenant in 2010 as result of traffic and revenue being significantly below original estimates, with truck traffic coming in 45% of initial projections. The poor traffic and revenue performance is primarily the result of event risks impacting the region including: hurricanes, economic recession, fuel price volatility, and revised regulatory requirements for oil drilling following the BP oil spill in the spring of 2010. In addition, there have been issues with the electronic tolling technology which resulted in evasion rates of 25% and 20% in 2009 and 2010, respectively. -- Uncertainty regarding future traffic levels on LA 1 due to overall macro-level economic conditions and questions regarding future oil activity in the Gulf given the enhanced regulatory environment post the BP oil spill in 2010. -- Strong likelihood of payment default in the near term if TIFIA debt is not restructured. The 'BBB' rating for the Series 2005A bonds reflects: -- LA1 has a monopoly position serving Port Fourchon, a major contributor to Louisiana's economy and a vital facility for maintaining the nation's energy supply, and also Grand Isle, a tourist destination. -- The project benefits from significant support from the State of Louisiana with the Louisiana Department of Transportation and Development (LDOTD) paying operating and maintenance expenses. In addition, draws on the 1st tier DSR are replenished through an CEA with the DED (State general obligations 'AA', gas tax bonds 'AA-', Outlook Stable). -- Unrated $14million DSR surety from Ambac posing greater liquidity risk to bondholders than cash funded portion of DSR. What May Trigger a Downgrade of TIFIA Debt? -- Failure to implement debt restructuring and revenue enhancement recommendations made by URS. -- Likelihood of a payment default becoming more imminent. What May Trigger an Upgrade of TIFIA Debt? -- Debt restructuring to enable the project to comfortably meet its rate covenants. -- Improved traffic and revenue performance and toll operations in line with high case projections. Security: The trust estate consists of gross toll revenues, interest earnings, debt service reserve and other funds on deposit, insurance earnings and liquidated damages. Credit Summary: LTA failed to meet its rate covenant in 2010 with coverage on both the senior and subordinate debt of only 1.0 times (x) compared to the requirements of 1.2x (senior) and 1.1x (subordinate). Traffic and revenue performance in 2010 was significantly below original projections, with truck traffic specifically coming in at 45% of original projections. Truck revenues were originally projected to comprise 61% of total revenues from 2011 to 2040. However, revised projections indicate truck revenues will only represent 39% of total revenues. The poor traffic and revenue performance is primarily the result of event risks impacting the region including: hurricanes, economic recession, fuel price volatility, and revised regulatory requirements for drilling. As a result of the covenant violation, URS was engaged in February 2011 to update its original 2005 traffic and revenue forecasts to reflect current and future economic development and oil & gas industry activities in the region. URS's report also identified ways LDOTD may be able to meet its debt service requirements; the report was presented at an LTA meeting on May 19, 2011. Among the recommendations is a revision to the toll policy beginning in 2012 in an effort to generate additional revenues. Fitch's own projections indicate even with the proposed 100% rate increase, coverage on the senior bonds will hover around the rate covenant in the near term and will drop below the covenant as debt service (D/S) ramps up. Fitch's projections also indicate a payment default on the subordinate TIFIA loan is likely upon the currently scheduled commencement of principal and interest (P&I) payments in 2013 baring an agreement to defer the payment. Fitch notes the LTA does have some flexibility to restructure the TIFIA debt in order to avoid a payment default. It is Fitch understands that preliminary discussions are underway with TIFIA regarding a restructuring. The LTA adopted a resolution after they received a URS report and directed the DOTD to carry out the URS recommendations and report back to the LTA no later than November 30, 2011. The lower traffic levels were compounded by problems with the tolling technology which resulted in evasion rates of 25% and 20% in 2009 and 2010 respectively. In January 2010, Electronic Transactions Consultant Corporation (ETCC), discontinued work on the LA-1 project citing that LDOTD had not fully paid its bills and therefore was illegally using licensed software. LDOTD filed a lawsuit against ETCC, stating that the operator left LA-1 with an incomplete, non-functioning toll collection system. ETCC countersued. According to LDOTD, negotiations have been underway between the LDOT and ETCC for several weeks and an agreement on a settlement is expected before the end of June, 2011. LDOTD has brought in HNTB as a consultant to improve the evasion rate. The true severity of the project's poor performance was not fully articulated to Fitch at the time of the last credit review in August 2010. At that time, LDOTD presented information to Fitch indicating traffic was approximately 80% of sponsor forecast through April 2010. No mention was made by LDOTD of any issues with its tolling technology or its ongoing disputes with ETTC. LDOTD did not respond to Fitch's subsequent attempts to gain updated traffic and revenue information until the release of the URS report at the end of May 2011. LTA issued bonds in May 2005 to finance construction of a toll bridge and elevated roadway to replace aging infrastructure in the vicinity of Port Fourchon, located in Lafourche Parish, Louisiana. Along with the bonds, the authority issued short term notes that were later replaced by the rated federal loan. All project debt will be repaid from the toll revenues collected at the bridge. The LDOTD will operate the bridge and pay all expenses. Port Fourchon, located about 50 miles south of New Orleans, historically served the majority of the offshore oil and gas production in the Gulf of Mexico, which provides the United States with about 30% of its domestic oil production, or roughly 15% of its total supply. This could change given stricter regulations on drilling activity. There are more than 600 drilling platforms within the port's service area. Port Fourchon also serves the Louisiana Offshore Oil Port (LOOP), a deep-water docking facility for oil tankers that handles about 15% of U.S. oil imports and connects to 40% of the nation's refining capacity. Traffic at the new bridge will depend heavily on Port Fourchon's continued servicing of oil and gas activity in the Gulf. Total project cost was approximately $375 million and encompassed Phase 1 of the larger four-phase $1.74 billion LA1 Improvement Project. Phase 1 improved an 11 mile segment of LA1, a state highway that runs northwest from the Gulf coast to Shreveport and the Arkansas state line. Rationale for the project included the criticality of road access to the Gulf and its energy resources, the old roadway's tendency to flood and traffic delays caused by operation of the old bridge, and a lift design which had to be pulled up to accommodate passing vessels. The Federal project loan was made under the TIFIA, a program administered by the USDOT. Although they are individually tailored, TIFIA is 35 years in length and includes a multi-year capitalized interest period and flexible repayment terms. TIFIA loans are subordinate in the project cash waterfall to other debt but are pari passu with senior bonds upon an event of default. MARVKY CORP: Court Confirms Third Amended Plan ---------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas approved Marvky Corporation's Third Amended Plan, as orally modified, according to the court docket. The bankruptcy court on May 12 approved the disclosure statement explaining the Third Amended Plan. The court convened a hearing on the Plan on June 3. The Plan is based on (1) selling Maryland Lakes, which was accomplished on March 28, 2011, resulting in satisfying most, if not all, debts secured by Maryland Lakes, and (2) repairing Hammerly Walk, continuing to operate the property, making monthly interest payments to Fannie Mae and within 18 months refinancing the property. The creditors who hold claims secured by Hammerly Walk will be paid in full in connection with the refinancing of Hammerly Walk. The unsecured creditors will be paid in full over 60 months, or if the Reorganized Debtor so elects, from excess proceeds from refinancing Hammerly Walk. About Marvky Corporation Houston, Texas-based Marvky Corporation was incorporated in 1996 and in 1999 acquired two apartment complexes: Hammerly Walk in Houston, Texas and Maryland Lakes in Glendale (Phoenix area) Arizona. The acquisition of each property was financed with Notes which were assigned to Fannie Mae and ballooned after ten (10) years. The Company entered into Extension Agreements extending the Notes to Feb. 1, 2010. Additionally, the Debtor and Fannie Mae entered into a Forbearance Agreement for Maryland Lakes until April 1, 2010. Despite the extensions, the Debtor was not able to refinance or sell the properties. Ultimately, Fannie Mae sought and obtained a receiver over Maryland Lakes and posted Hammerly Walk for foreclosure. Shortly after the appointment of the receiver and before the foreclosure, the Company filed for Chapter 11 protection (Bankr. S.D. Tex. Case No. 10-37786) on Sept. 6, 2010. John Akard, Jr., Esq., at Mason, Coplen & Banks, P.C., in Houston, Tex., represents the Debtor. The Debtor estimated assets at $10 million to $50 million and debts at $1 million to $10 million. MIDWEST THEATRES: Converted to Ch. 7; Theatres to Remain Open ------------------------------------------------------------- Austin Daily Herald reports that Austin's CineMagic 7 movie theater could remain open, even as its owner filed for bankruptcy. Lori Karsten, general manager of CineMagic7 in Oak Park Mall, said they have "no immediate plans for closing." But Midwest Theatres Corp., which owns the CineMagic theater chain, filed for Chapter 11 bankruptcy protection in September 2010, and converted its case to Chapter 7 bankruptcy on May 24. CineMagic has five theaters in Minnesota and Iowa, including Hollywood 12 in Rochester. The manager there didn't know of any plans for closing, but also referred all questions to Westmark. CineMagic also owned Chateau 14 in Rochester, which closed Jan. 26 and was bought and re-opened by Paragon Entertainment, LLC. Based in St. Michael, Minnesota, Midwest Theatres Corporation dba Cinemagic Theatres filed for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case No. 10-46834) on Sept. 14, 2010. Judge Nancy C. Dreher presides over the case. Michael F McGrath, Esq., at Ravich Meyer Kirkman & McGrath Nauman, represents the Debtor. The Debtor estimated assets of between $1 million and $10 million, and debts of between $10 million and $50 million. NEWPORT TELEVISION: S&P Affirms 'B-' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its corporate credit rating on Kansas City, Mo.-based TV broadcaster Newport Television Holdings LLC and its operating subsidiary, Newport Television LLC, as well as all issue-level ratings on the company's debt. The rating outlook is stable. "At the same time, we revised our recovery rating on Newport Television LLC's senior secured credit facilities to '3', indicating our expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default, from '4'," S&P stated. "The 'B-' corporate credit rating reflects Newport's less than adequate liquidity, high debt leverage, and sensitivity to election cycles, as well as TV broadcasting's mature revenue growth prospects," said Standard & Poor's credit analyst Deborah Kinzer. "We view Newport's current capital structure as unsustainable." Newport operates 60 TV stations in 22 markets ranked from No. 32 to No. 202, reaching about 8.4% of U.S. TV households. The station affiliations are fairly evenly distributed among the top four networks, conferring some diversification benefit. Few of the company's stations have the top revenue rankings in their markets, although ownership of multiple stations in some markets improves the company's overall ranking in those markets. Weak market positions tend to constrain revenue potential and operating efficiency, leading to relatively low EBITDA margins. "Our stable rating outlook reflects our expectation that Newport will be able to maintain compliance with its financial covenants over the intermediate term," S&P said. NO FEAR RETAIL: Seeks Termination of Foreign Trademark Rights ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that No Fear Retail Stores Inc. decided to sell the business quickly because "sales results have been lower than projected," the 41-store retailer said in a bankruptcy court filing. No Fear said it asked potential buyers to submit letters of intent by June 20. To enhance the value of the business and assets, No Fear is asking for a quick hearing on a motion to reject a license for use of the trademark outside the U.S. A court filing says owning global rights to the name will enhance the purchase price for the business by as much as $5 million. Mr. Rochelle relates that the foreign trademark rights were given to a joint venture in which No Fear is part owner. Although the transfer of the foreign rights was made in an exclusive license, Carlsbad, California-based No Fear says it's nonetheless a so- called executory contract that can be terminated because there are unperformed duties on both sides. The joint venture paid about $10 million for the exclusive foreign license in 2005, court papers say. About No Fear Retail Carlsbad, California-based No Fear Retail Stores, Inc., is a retailer of action, sports, and casual youth lifestyle apparel and accessories, targeting young adults and teens. It operates 41 retail locations in California, Oregon, Arizona, Florida, Nevada, North Carolina, and Texas. No Fear filed for Chapter 11 bankruptcy protection (Bankr. S.D. Calif. Case No. 11-02896) on Feb. 24, 2011. David S. Kupetz, Esq., at Sulmeyer, Kupetz, A Professional Corp, serves as the Debtor's bankruptcy counsel. The Debtor tapped Jones Day as special intellectual property counsel; Avant Advisory Group's George Blanco as chief restructuring officer, and Venturi & Company LLC, as financial advisors. The Debtor estimated disclosed $31,648,063 in assets and $12,552,985 in liabilities as of the Chapter 11 filing. Affiliates No Fear MX, Inc. (Bankr. S.D. Calif. Case No. 11-02897) and Simo Holdings, Inc. (Bankr. S.D. Calif. Case No. 11-02898) filed separate Chapter 11 petitions on Feb. 24, 2011. Tiffany L. Carroll, the Acting U.S. Trustee for Region 15, appointed three creditors to serve on an Official Committee of Unsecured Creditors of No Fear MX, Inc. BDO USA LLP serves as financial advisor to provide financial advisory services to the Committee. NUANCE COMMUNICATIONS: S&P Keeps 'BB-' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services's ratings on Burlington, Mass.- based speech solutions provider Nuance Communications Inc. are unaffected by the proposed amendment to its $715.2 million first- lien senior secured credit agreement (consisting of a $75 million revolver and a $640.2 million term loan outstanding at March 31, 2011). The company is undertaking the amendment primarily to improve its debt maturity profile, extending portions of both the term loan and revolver by three years. The amendment will not alter debt amounts or security. Standard & Poor's views these actions as neutral to both the corporate credit rating and all issue-level and recovery ratings, including those pertaining to the company's $250 million convertible senior debentures. Ratings List Nuance Communications Inc. Corporate Credit Rating BB-/Positive/-- Senior Secured Revolver 2 due 2015 BB+ Recovery Rating 1 Term loan B-2 due 2016 BB+ Recovery Rating 1 OLSEN AGRICULTURAL: To Tap Lender's Cash Collateral --------------------------------------------------- Dow Jones' DBR Small Cap reports that Olsen Agricultural Enterprises LLC won court approval to tap the cash it needs to continuing farming thousands of acres in Oregon. StatesmanJournal.com reports that Olsen Agricultural, which farms 8,000 acres in the mid-Willamette Valley, blamed its Chapter 11 filing on a downturn in the grass seed market and pressure from a lender. The Company has term and line of credit loans with Rabo AgriFinance, which recently issued default notices and began exercising its remedies against the debtor. Olsen Agricultural Enterprises expects to emerge from bankruptcy by the first quarter of 2012, according to the Statesman Journal. About Olsen Agricultural Enterprises Based in Monmouth, Oregon, Olsen Agricultural Enterprises LLC is the surviving entity of a merger transaction that was consummated on June 1, 2011. In the merger transaction, Olsen Agricultural Company, Inc., an Oregon corporation, Jenks-Olsen Land Co., an Oregon general partnership, Olsen Vineyard Company, LLC, an Oregon limited liability company and The Olsen Farms Family Limited Partnership were merged with and into Olsen Agricultural Enterprises. Olsen Agricultural Enterprises filed for Chapter 11 bankrutpcy (Bankr. D. Ore. Case No. 11-62723) on June 1, 2011. Judge Frank R. Alley III presides over the case. Greene & Markley, P.C., acts as the Debtor's bankruptcy counsel. Clyde A. Hamstreet & Associates, LLC, serves as the Debtor's restructuring consultant and financial advisor. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Robin G. Olsen, operations director. PARLIAMENT COACH: Settles With Creditors to Emerge From Bankruptcy ------------------------------------------------------------------ Julian Gothard at RVing Examiner reports that Parliament Coach Corporation has reached a settlement agreement with its principal creditors which will allow Parliament Coach to emerge from a Chapter 11 bankruptcy reorganization. According to the report, Parliament Coach has manufactured a number of legendary motorhomes including the CNN Election Express and a $1.2 million NBC shielded "Nuclear Proof" coach. The announcement comes as a huge shot in the arm for an RV industry which remains a captive of the still depressed economy. Parliament Coach Corporation filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 09-29617) on Dec. 30, 2009. PATRICIA KLUGE: Files for Chapter 7 Bankruptcy Protection --------------------------------------------------------- The Associated Press reports that Patricia Kluge, a one-time socialite who had entertained the rich and famous at her sprawling Virginia estate in the 1980s and later tried her hand at building up a national winemaking business filed for personal bankruptcy protection along with husband William Moses. Kermit Rosenberg, lawyer for the couple, disclosed details of the filing Tuesday and added, "They're getting on with their lives, trying to discharge their debts and start over." According to the report, in U.S. Bankruptcy Court, Ms. Kluge and husband William Moses listed business obligations as their chief debts. The filing estimates their assets between $1 million and $10 million and compared with $10 million to $50 million in liabilities. The couple estimated in the filing in the court in Lynchburg that they have between 50 and 99 creditors. The report says the Chapter 7 bankruptcy petition comes after the failure of negotiations with three principal banks. The banks had foreclosed on the couple's winery business, their Albemarle House mansion and a neighborhood of luxury homes under development. Bank of America filed a lawsuit against Ms. Kluge in U.S. District Court in Charlottesville, alleging that Ms. Kluge defaulted on three loans worth nearly $23 million on the brick Georgian home and its grounds. The bank purchased the property for $15.26 million. The couple also lost their Kluge Estate Winery & Vineyard after defaulting on nearly $35 million in loans from Farm Credit Bank during their effort to build a national wine business during the economic downturn. Reality-television mogul Donald Trump bought most of the business in April, saying he wants to operate the vineyard, the AP notes. The AP relates that lender Sonabank took back the couple's upscale Vineyard Estates subdivision for $4.9 million at a January auction after Ms. Kluge and Mr. Moses defaulted on an $8.2 million loan after few properties on the 511-acre tract had sold. The couple's current home in the subdivision wasn't part of the sale. PARTSEARCH TECHNOLOGIES: WARN Suit Accord Approved on Final Basis ----------------------------------------------------------------- Bankruptcy Judge Martin Glenn approved, on a final basis, a settlement of a class action suit by former Partsearch Technologies, Inc. employees. The class action complaint was filed against the Debtor in the bankruptcy court on Feb. 7, 2011, and amended on Feb. 10, 2011. The Amended Complaint asserts claims under the federal Worker Adjusted and Retraining Notification Act and the New York State Worker Adjustment and Retraining Notification Act and seeks, for each Class Member, an allowed priority wage claim against the Debtor equal to 60 days' pay and benefits. On Feb. 25, 2011, the Debtor filed an answer to the Amended Complaint, denying the material allegations and asserting various affirmative defenses. Pursuant to the Settlement, the Debtor will pay $183,000 as follows: (1) $2,500 to the Plaintiff as the class representative; (2) $135,375 to be divided among the Class Members; and (3) $45,125 in attorneys' fees to counsel for the Class Members. The Settlement will also result in the release of the Defendants and their professionals, employees and affiliates (among others) from liability. The Settlement will not be binding on any Class Member that opts- out of the Settlement. If an individual opts-out of the Settlement, then the Debtor may elect to revoke the Settlement without recourse of any type unless the Nonparticipant(s) deliver a written release to the Debtor within seven days after the decision to opt-out. The case is Craig Wenzel on behalf of himself and all others similarly situated, v. Partsearch Technologies, Inc. and the Official Committee of Unsecured Creditors, as Intervenor, Adv. Proc. No. 11-01445 (Bankr. S.D.N.Y.). A copy of Judge Glenn's June 21, 2011 Memorandum Opinion is available at http://is.gd/hiN9T1from Leagle.com The Debtor is represented by: William R. Baldiga, Esq. Caleb B. Piron, Esq. BROWN RUDNICK LLP Seven Times Square New York, NY 10036 Tel: 212-209-4800 Fax: 212-209-4801 E-mail: wbaldiga@brownrudnick.com cpiron@brownrudnick.com The Debtor was the initial named defendant in the lawsuit. By entry of a Court order, the Official Committee of Unsecured Creditors was subsequently permitted to intervene as a defendant. The Committee is represented by: Walter Benzija, Esq. HALPERIN BATTAGLIA RAICHT, LLP 555 Madison Avenue, 9th Floor New York, NY 10022 Telephone: (212) 765-9100 Facsimile: (212) 765-0964 E-mail: wbenzija@halperinlaw.net Attorneys for the Plaintiff and the Settlement Class are: Stuart J. Miller, Esq. LANKENAU & MILLER, LLP 132 Nassau Street, Suite 423 New York, NY 10038 Tel: (212) 581-5005 Fax: (212) 581-2122 (212) 581-2266 - and - Mary E. Olsen, Esq. M. Vance McCrary, Esq. THE GARDNER FIRM, P.C. 210 South Washington Ave. Mobile, AL 36602 Tel: 251-433-8100 Fax: 251-433-8181 E-mail: vmccrary@thegardnerfirm.com molsen@thegardnerfirm.com About Partsearch Technologies Partsearch Technologies, Inc., established in 2000, was a one-stop shop for electronic and appliance parts, offering repair technicians and consumers a means of finding parts for common items such as computers and wireless products. Partsearch also contracted with major retailers to offer customer support services and maintained multiple co-branded Web sites with various retailers in addition to its own business-to-consumer Web site. New York-based Partsearch filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 11-10282) on Jan. 27, 2011, after discovering it overcharged its largest customer Best Buy Co. Inc. by $5.9 million. William R. Baldiga, Esq., at Brown Rudnick LLP, in New York, serves as counsel. Partsearch disclosed assets for $4 million and total liabilities of $13 million. The Bankruptcy Court on March 28, 2011, approved a sale of substantially all of the Debtor's assets to Best Buy Co., Inc., for $6.4 million. PETRA FUND: Parent Puts Two Properties on Auction Block ------------------------------------------------------- The Real Deal Online reports that Petra Capital Management is selling off a retail property at 160-08 Jamaica Avenue, between 160th and 161st streets in the Jamaica neighborhood of Queens, said GFI Realty Services, which is marketing the property. According to the report, Yosef Katz, a senior broker at GFI, is expecting the property to sell in the mid-$20 million range. The 57,000-square-foot multi-level property comes with 100,000 square feet of air rights. About Petra Fund Petra Fund REIT Corp. and its affiliates are in the business of originating, investing in, structuring and trading loans secured by commercial real-estate. Petra Fund REIT is a subsidiary of Petra Capital Management. Petra Fund and Petra Offshore sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 10-15500) on Oct. 20, 2010, and are represented by Shaya M. Berger, Esq., and Brian E. Goldberg, Esq., at Dickstein Shapiro, LLP. At the time of the filing, each of the Debtor estimated its assets at less than $10 million and its debts at more than $100 million. Petra Fund blamed its Chapter 11 filing on the extraordinary and unprecedented collapse of the credit and commercial real estate markets, which caused a mark-to-market value of its assets to plummet. PHILADELPHIA ORCHESTRA: Bankrupt But CEO Gets $597,000 A Year ------------------------------------------------------------- Peter Dobrin at Inquirer Classical Music Critic notes that Allison B. Vulgamoreis being paid $597,000 a year to lead the Philadelphia Orchestra. The report notes that while $597,000 a year is a lot of money, it is not an unusual sum in the industry. Broadly speaking, Mr. Vulgamore's compensation is at the middle of a scale that includes 10 top U.S. orchestras. Then again, none of those orchestras is in bankruptcy. If the terms of employment continue past the end of Mr. Vulgamore's initial two-year contract, which expires in January, her compensation has the potential to grow. She passed up an agreement in her contract for an estimated additional 20 percent, which would have put her total compensation near or over $700,000 a year. According to documents recently filed in the orchestra's petition in U.S. Bankruptcy Court, Mr. Vulgamore was being paid an annual salary of $450,000 as of the middle of January. In addition, she received executive retirement benefits of $125,000; supplemental disability insurance of about $15,000 (on top of other regular benefits); a car allowance of $5,000, and a financial planning allowance of $2,000. Plus reserved parking at the Kimmel Center. What Mr. Vulgamore gave up voluntarily, according to board chairman Richard B. Worley, was a scheduled $25,000 raise in her base pay, plus a "variable compensation" component in her contract -- commonly known as a bonus -- whose exact value was never calculated since she forwent that as well. The range of the bonus -- determined by an assessment of her performance -- would have been $50,000 to $150,000. The current total of $597,000 puts Mr. Vulgamore well above the amounts earned by her predecessors. James Undercofler received a total of $447,953 in the fiscal year ending Aug. 31, 2009 (for 11 months' work), according to the orchestra's tax returns. Before Undercofler, Joseph H. Kluger, who left in 2005, was being paid about $285,000 a year. Next to her counterparts, Mr. Vulgamore is in the middle of the pack. According to tax returns, here is what some administrative leaders earned: * Paul Meecham, Baltimore Symphony Orchestra, $294,000, fiscal year ending August 2009. * Mark Volpe, Boston Symphony Orchestra, $607,000, August 2009. * Deborah Card, Chicago Symphony Orchestra, $514,000, June 2009. * Gary Hanson, Cleveland Orchestra, $472,000, June 2009. * Deborah Borda, Los Angeles Philharmonic, $1.4 million, September 2009. * Michael Henson, Minnesota Orchestra, $390,000, August 2009. * Zarin Mehta, New York Philharmonic, just over $1 million, August 2009. * Lawrence Tamburri, Pittsburgh Symphony Orchestra, $341,000, August 2009 * Brent Assink, San Francisco Symphony, $481,000, August 2009. About the Philadelphia Orchestra The Philadelphia Orchestra -- http://www.philorch.org/-- claims to be among the world's leading orchestras. Bloomberg News says the orchestra became the first major U.S. symphony to file for bankruptcy protection, surprising the music world. Previous conductors include Fritz Scheel (1900-07), Carl Pohlig (1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80), Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and Christoph Eschenbach (2003-08). Charles Dutoit is currently chief conductor, and Yannick Nezet-Seguin has assumed the title of music director designate until he takes up the baton as The Philadelphia Orchestra's next music director in 2012. The Philadelphia Orchestra Association, The Academy of Music of Philadelphia, Inc., and Encore Series, Inc., filed separate Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 11-13098 to 11-13100) on April 16, 2011. Judge Eric L. Frank presides over the case. The Philadelphia Orchestra Association is being advised by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal, its financial advisor. Curley, Hessinger & Johnsrud serves as its special counsel. In its petition, Philadelphia Orchestra estimated $10 million to $50 million in assets and debts. Encore Series, Inc., tapped EisnerAmper LLP as accountants and financial advisors. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Debtors' case. PHILADELPHIA ORCHESTRA: Committee Taps Deloitte Fin'l Advisor ------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of The Philadelphia Orchestra Association and Academy of Music of Philadelphia, Inc., ask the Eastern District of Pennsylvania for permission to retain Deloitte Financial Advisory Services, LLP as its financial advisors. Deloitte FAS will, among other things: a. assist the Committee in connection with its assessment of the Debtors' cash and liquidity requirements, as well as the Debtors' funding requirements, including its analysis of endowments and related matters; b. assist the Committee in connection with its assessment of the Debtors' financial and operating performance, including its current operations, monthly operating reports, and other financial and operating analyses or periodic reports as provided by Debtors' management or financial advisors; and c. assist the Committee in connection with its evaluation of the Debtors' key employee retention plans. To the best of the Committee's knowledge, Deloitte FAS is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Philadelphia Orchestra The Philadelphia Orchestra -- http://www.philorch.org/-- claims to be among the world's leading orchestras. Bloomberg News says the orchestra became the first major U.S. symphony to file for bankruptcy protection, surprising the music world. Previous conductors include Fritz Scheel (1900-07), Carl Pohlig (1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80), Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and Christoph Eschenbach (2003-08). Charles Dutoit is currently chief conductor, and Yannick Nezet-Seguin has assumed the title of music director designate until he takes up the baton as The Philadelphia Orchestra's next music director in 2012. The Philadelphia Orchestra Association, The Academy of Music of Philadelphia, Inc., and Encore Series, Inc., filed separate Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 11-13098 to 11-13100) on April 16, 2011. Judge Eric L. Frank presides over the case. The Philadelphia Orchestra Association is being advised by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal, its financial advisor. Curley, Hessinger & Johnsrud serves as its special counsel. Garden City Group, Inc. serves as the Debtor's claims and noticing agent. Encore Series, Inc., tapped EisnerAmper LLP as accountants and financial advisors. In its petition, Philadelphia Orchestra estimated $10 million to $50 million in assets and debts. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Debtors' case. PHILADELPHIA ORCHESTRA: Morgan Lewis OK'd for ERISA Advice ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania authorized The Philadelphia Orchestra Association and Academy of Music of Philadelphia, Inc., to employ Morgan Lewis & Bockius LLP, as special counsel to provide pension and ERISA advice and perform specific pension-related services that the Debtors will require during the course of these Chapter 11 Cases. As reported in the Troubled Company Reporter on June 1, 2011, prior to the Petition Date, Morgan Lewis provided pension-related legal services to the Debtors in the ordinary course of business, including advising the Debtors in connection with pension and fund-related matters. As such, Morgan Lewis is intimately familiar with the pension and ERISA issues that the Debtors have been facing and those that the Debtors are likely to face during the course of the Chapter 11 Cases. To the best of the Debtors' knowledge, Morgan Lewis is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Philadelphia Orchestra The Philadelphia Orchestra -- http://www.philorch.org/-- claims to be among the world's leading orchestras. Bloomberg News says the orchestra became the first major U.S. symphony to file for bankruptcy protection, surprising the music world. Previous conductors include Fritz Scheel (1900-07), Carl Pohlig (1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80), Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and Christoph Eschenbach (2003-08). Charles Dutoit is currently chief conductor, and Yannick Nezet-Seguin has assumed the title of music director designate until he takes up the baton as The Philadelphia Orchestra's next music director in 2012. The Philadelphia Orchestra Association, The Academy of Music of Philadelphia, Inc., and Encore Series, Inc., filed separate Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 11-13098 to 11-13100) on April 16, 2011. Judge Eric L. Frank presides over the case. The Philadelphia Orchestra Association is being advised by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal, its financial advisor. Curley, Hessinger & Johnsrud serves as its special counsel. Garden City Group, Inc. serves as the Debtor's claims and noticing agent. Encore Series, Inc., tapped EisnerAmper LLP as accountants and financial advisors. In its petition, Philadelphia Orchestra estimated $10 million to $50 million in assets and debts. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Debtors' case. The Committee tapped Deloitte Financial Advisory Services, LLP as its financial advisors. PHILADELPHIA ORCHESTRA: Center Members Name New Directors --------------------------------------------------------- The Post-Star reports that members of Saratoga Performing Arts Center approved Saratoga Springs businessman Ronald Riggi as a new member of the board of directors, replacing retiring member Dr. John Popp. Mr. Riggi is the chief executive officer, owner and co-founder of the Turbine Services Ltd. Group. The report notes a meeting in May included the re-election of six current board members whose terms were due to expire this month: Abraham M. Lackman, Edward J. Lewi, Heather Mabee, I. Norman Massry and Hon. Susan Phillips Read. Business Review reports that Saratoga Performing held its annual membership meeting last month at the Hall of Springs in Saratoga Springs, New York. At the meeting, Marcia White, SPAC's executive director, recapped the venue's 2010 season and preview its 2011 season. Specifically, Ms. White was referring to the Philadelphia Orchestra and the New York City Ballet, both of which perform annually at SPAC. About Philadelphia Orchestra The Philadelphia Orchestra -- http://www.philorch.org/-- claims to be among the world's leading orchestras. Bloomberg News says the orchestra became the first major U.S. symphony to file for bankruptcy protection, surprising the music world. Previous conductors include Fritz Scheel (1900-07), Carl Pohlig (1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80), Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and Christoph Eschenbach (2003-08). Charles Dutoit is currently chief conductor, and Yannick Nezet-Seguin has assumed the title of music director designate until he takes up the baton as The Philadelphia Orchestra's next music director in 2012. The Philadelphia Orchestra Association, The Academy of Music of Philadelphia, Inc., and Encore Series, Inc., filed separate Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 11-13098 to 11-13100) on April 16, 2011. Judge Eric L. Frank presides over the case. The Philadelphia Orchestra Association is being advised by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal, its financial advisor. Curley, Hessinger & Johnsrud serves as its special counsel. Garden City Group, Inc. serves as the Debtor's claims and noticing agent. Encore Series, Inc., tapped EisnerAmper LLP as accountants and financial advisors. In its petition, Philadelphia Orchestra estimated $10 million to $50 million in assets and debts. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Debtors' case. The Committee tapped Deloitte Financial Advisory Services, LLP as its financial advisors. PILGRIM'S PRIDE: Won't Violate Debt Covenants, CEO Says ------------------------------------------------------- Ian Berry, writing for MarketWatch, reports that Pilgrim's Pride Corp.'s chief executive Bill Lovette acknowledged Tuesday that worries the company would violate its debt covenants with lenders has weighed on company's stock recently, but said the poultry producer doesn't expect any liquidity problems this year. According to MarketWatch, Mr. Lovette said the company's banks are "comfortable" with its strategy and added that JBS SA, the Brazilian meat company that holds two thirds of Pilgrim's Pride, can, if needed, lend up to $100 million that could serve as a "backstop" for the company. MarketWatch notes Pilgrim's stock has fallen by more than a third this year and tumbled earlier this month to a 52-week low. Asked about the decline in a presentation to investors, Mr. Lovette said he has gotten many questions about the health of the poultry industry in general and about whether Pilgrim's Pride would violate its debt covenants. "Some have assumed we would, but we don't believe that's the case," he said, the report notes. About Pilgrim's Pride Pilgrim's Pride Corporation -- http://www.pilgrimspride.com/-- is one of the largest chicken companies in the United States, Mexico and Puerto Rico. The Company's fresh chicken retail line is sold throughout the US, throughout Puerto Rico, and in the northern and central regions of Mexico. The Company exports commodity chicken products to 90 countries. The Company operates feed mills, hatcheries, processing plants and distribution centers in 15 U.S. states, Puerto Rico and Mexico. Pilgrim's Pride and six of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 08-45664) on Dec. 1, 2008. The Company's subsidiaries in Mexico and certain subsidiaries in the United States were not included in the filing and operated outside of the Chapter 11 process. Attorneys at Weil, Gotshal & Manges LLP served as bankruptcy counsel. Lazard Freres & Co., LLC, was the Company's investment bankers. Kurtzman Carson Consulting LLC served as claims and notice agent. Kelly Hart and Brown Rudnick represented the official equity committee. Attorneys at Andrews Kurth LLP represented the official committee of unsecured creditors. On Dec. 10, 2009, the Bankruptcy Court confirmed the Joint Plan of Reorganization filed by the Debtors. The Plan was premised on the sale of the business to JBS SA. Under the Plan, creditors are paid in full. Existing owners retained 34% of the equity. The Company emerged from Chapter 11 on Dec. 28, 2009. * * * According to the Troubled Company Reporter on June 9, 2011, Moody's Investors Service revised Pilgrim's Pride Corporation's outlook to stable from positive and downgraded the speculative grade liquidity rating to SGL-3 from SGL-2 given Moody's expectations for much reduced profitability, cash flow and covenant cushion following worse than anticipated chicken pricing. All other ratings including the B1 corporate family rating were affirmed. PIONEER VILLAGE: Emerges From Chapter 11 Bankruptcy Protection -------------------------------------------------------------- Greg Stiles at the Mail Tribune reports that says the owners of Pioneer Village retirement center have emerged from bankruptcy with goals similar to those they had before filing for Chapter 11 court protection in May 2010. U.S. Bankruptcy Court Judge Frank H. Alley III has signed off on a Pioneer Village Investments LLC's reorganization plan and Jeff Chamberlain, the group's managing partner, is once again looking to refinance the project, according to the report. The report relates that Medford-based PremierWest and Central Valley Community Bank of Fresno, owed equal shares of the approximately $12 million debt, agreed to forgo the default interest, giving Pioneer Village leeway as it searches for new financing or a new owner between now and Dec. 31, 2012. The Mail Tribune discloses that Farmington Centers of Portland, of which Chamberlain is majority owner, will continue to manage the center on Fifth Street, which was built in 2005. The banks agreed that if they received a $11.35 million principal payment during 2011, Pioneer Village Investments' debt would be considered paid, according to court documents. If the Pioneer Village group pays $12 million, plus interest, from 2011 and 2012 by the end of 2012, the deal would be done as well. The Chapter 11 Plan According to the Troubled Company Reporter on June 9, 2011, PremierWest Bank will retain all of its liens and encumbrances (including the PremierWest trust deed) securing the PremierWest claim and the terms and provisions of the loan documents, including but not limited to financial reporting and inspections, will remain in full force and effect. The Debtor will subordinate any claims of Excelsior or FCI to all other claimants under the Plan. PremierWest had previously filed its own plan, and threatened other legal actions; however, a settlement conference with the Honorable Trish Brown, U.S. Bankruptcy Court Judge, resulted in an agreement. Under that, PremierWest agreed that if it were paid the sum of $11,350,000 principal during calendar year 2011, it would agree that it had been paid in full. If it is paid $12,000,000 during the year 2012, plus certain interest to be deferred during 2011 and 2012, it will treat its claim as having been paid in full. If the Debtor has not paid the claim by the end of 2012, the Debtor may either choose to convey the property to PremierWest or refer the property for sale. In addition, the guarantors of the bank's debt will agree to stipulate to a judgment in favor of PremierWest, subject to an agreement by PremierWest not to enforce those judgments pending the payment pursuant to the settlement agreement and this Plan. Accordingly, PremierWest will not seek a vote by the creditors or interest holders on its plan. With respect to the claim of the Richard R. Hein and Helen J. Hein Revocable Living Trust pursuant to a Note ("the Hein Note") secured by a subordinate trust deed upon the real property of the Debtor, the survivor, Mrs. Helen Hein, will continue to receive the right of occupancy of her unit at a current cost of $3,421 per month as an offset against the payments due under the Note payalbe to the Hein Trust of $3,932. Any differential between the amount payable pursuant to the Hein Note and the costs that are incurred by her will be added to the principal due under the Hein Note, or subtracted from principal as is appropriate. The balance shall be paid upon a sale of the facility. In the event the property has not been sold and Mrs. Hein continues to reside in the facility, the offset terms will continue, until the balance will be paid per the Note terms. General unsecured claims will be paid in full on the Effective Date. Based upon review of the Schedules and the Claims Register maintained by the Bankruptcy Court for the Chapter 11 Case, it appears that the face amount of the General Unsecured Claims is a maximum of $631.06. Excelsior Development Company, LLC, the holder of a 10.97% preferred ownership interest and a 20.94% non-preferred ownership interest in the Debtor, will not receive any payments at confirmation but will be paid as the Reorganized Debtor determines it is able to pay, only after classes 1 through 4 and 8 are paid in full. The claim will continue to be unsecured. The Reorganized Debtor will pay the subordinated unsecured claim of Farmington Centers, Inc., in cash as the reorganized Debtor determines it is able to pay, only after classes 1 through 4 and 8 are paid in full. All equity interests will retain their interest unaltered by the Plan, but will receive no payments on confirmation. Members electing to contribute additional capital will be granted preferred ownership interests with priority over the other interest holders. Advances owed to Interest Holders will be repaid only after payment of all other classes of claims to funding of the Plan. A copy of the order confirming the Plan and a copy of the Second Amended Plan of Reorganization dated April 14, 2011, is available at http://bankrupt.com/misc/pioneervillage.confirmationorder.pdf A copy of the 3rd Amended Disclosure Statement relating to the 2nd Amended Plan of Reorganization dated April 14, 2011, is available at http://bankrupt.com/misc/pioneervillage.confirmationorder.pdf About Pioneer Village Investments Portland, Oregon-based Pioneer Village Investments, LLC, operates a continuing care retirement facility in the city of Jacksonville, Oregon, providing for "independent living' facilities for elderly residents, assisted living for residents who are less able to care for themselves, and other facilities designed to accommodate the needs of elderly residents. Pioneer Village Investments, LLC, c/o Farmington Centers, Inc., filed for Chapter 11 protection (Bankr. D. Ore. Case No. 10-62852) on May 13, 2010. Douglas P. Cushing, Esq., at Jordan Schrader Ramis PC, in Lake Oswego, Oregon, assists the Debtor in its restructuring effort. In its petition, the Debtor estimated assets and debts of $10 million to $50 million. PJ FINANCE: Wants Lease Decision Period Extended Until Oct. 3 ------------------------------------------------------------- PJ Finance Company, LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend until Oct. 3, 2011, their period to assume or reject the real property leases. The Debtors' lease decision period is set to expire on July 5, absent an extension. The Debtors need more time to review their books and records and evaluate them in the context of the efforts to reorganize. About PJ Finance Chicago, Illinois-based PJ Finance Company, LLC, owns apartment communities in the states of Arizona, Florida, Georgia, Tennessee and Texas. PJ Finance owns or holds ownership interests in 32 apartment communities that collectively have more than 9,500 rentable units. It has 20 apartment locations in Texas, and the remaining 12 in Arizona, Florida, Georgia and Tennessee. The day- to-day operations of the portfolio are managed by a third party, WestCorp Management Group One, Inc. PJ Finance and various affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-10688). Michelle E. Marino, Esq., and Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington, Delaware, serve as bankruptcy counsel. Kurtzman Carson Consultants, LLC, is the Debtors' claims and notice agent. Christopher A. Jarvinen, Esq., and Mark T. Power, Esq., at Hahn & Hessen LLP, represent the official committee of unsecured creditors as lead counsel. Richard Scott Cobb, Esq., and William E. Chipman, Jr., Esq., at Landis Rath & Cobb, in Wilmington, Del., serve as the committee's local counsel. Carl Marks Advisory Group is the financial advisers to the Committee. The Debtors estimated total assets of at least $275 million (estimated value of portfolio securing loan to Bank of America) and total debts of at least $479 million ($475 million owed to BofA, $4.4 million trade debt). PJ Finance said it has a commitment for Gaia Real Estate Investments LLC to invest $42 million and serve as the foundation for a reorganization plan. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed an Official Committee of Unsecured Creditors in the Debtors' cases. PLATINUM PROPERTIES: PPV Files Schedules of Assets and Liabilities ------------------------------------------------------------------ PPV, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Indiana, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------- ----------- A. Real Property $4,405,289 B. Personal Property $289,487 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $16,994,047 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $5,567,722 ------------ -------------- TOTAL $4,694,776 $22,561,769 About Platinum Properties and PPV LLC Indianapolis, Indiana-based Platinum Properties, LLC, is a residential real estate developer. Platinum acquires land, designs the projects, obtains zoning and other approvals, and constructs roads, drainage, utilities, and other infrastructure of residential subdivisions. Platinum then sells the finished, platted lots. Platinum also has an ownership interest in several special purpose entities that in turn own, operate and manage individual projects. PPV LLC is a joint venture between Platinum and a non-debtor entity, Pittman Partners, Inc., each of whom hold an equity interest in PPV. PPV owned four projects directly and owns 100% of the membership interest of Sweet Charity Estates, LLC. PPV listed $4.69 million in total assets and $22.56 million in total liabilities. Platinum Properties and PPV LLC filed for Chapter 11 protection (Bankr. S.D. Ind. Case Nos. 11-05140 and 11-05141) on April 25, 2011. Platinum Properties estimated assets of up to $50 million and liabilities of $100 million to $500 million. Lawyers at Baker & Daniels serve as the Debtors' bankruptcy counsel. PRM DEVELOPMENT: Court Confirms Third Amended Plan -------------------------------------------------- Judge Harlin D. Hale of the U.S. Bankruptcy Court for the Northern District of Texas signed on May 13, 2011, an order confirming the Third Amended Joint Plan of Reorganization filed by PRM Development, LLC and its debtor affiliates. The Court found that the Plan satisfied the requirements for confirmation set forth in Section 1129(a) of the Bankruptcy Code. On May 10, 2011, the Debtors filed the Third Amended Plan and accompanying disclosure statement to resolve the objections to confirmation filed by Liberty Bankers Life Insurance Company and Winnfield Life Insurance Company and to provide treatment and other benefits to Liberty or Winnfield that are acceptable to those creditors. Sale of Great Hans and Little Hans Properties Under the Plan, the Debtors intend to employ William Otto of David Jones Real Estate in St. Thomas, USVI to market and sell the "Great Hans Property" and "Little Hans Property." Great Hans Property refers to an undeveloped 510-acre island located approximately one and one-half mile north of St. Thomas, United States Virgin Islands as Great Hans Lollik. Little Hans Property is an undeveloped 100-acre island located approximately one and one-half mile north of St. Thomas, United States Virgin Islands known as Little Hans Lollik. Non-debtor affiliates of PRM Development have committed to fund all payments required to be made by PRM Development under the Plan. The non-debtor affiliates have sufficient funds on hand to make these payments during the term of the Plan and are controlled by Peter Morris To market and sell the Great Hans and Little Hans Properties, the Debtors will establish an 18 month "Marketing Period" for Great Hans Property and the Little Hans Property consisting of two phases. Phase One of that Marketing Period will expire on January 31, 2012, and Phase Two of the Marketing Period will begin on the expiration of Phase One and expire on November 1, 2012. During the first three calendar months of Phase One of the Marketing Period, the Debtors will list the Great Hans Property for a gross sale price of no more than $26,250,000 and will list the Little Hans Property for a gross sale price of no more than $8,750,000. Likewise, the Debtors will list the properties for a combined gross sale price of no more than $35,000,000. During the next six calendar months of Phase One of the Marketing Period, unless Liberty otherwise agrees in writing, the Debtors will list the Great Hans Property for a gross sale price of no more than $20,000,000 and will list the Little Hans Property for a gross sale price of no more than $9,500,000. Likewise, the Debtors will list the properties for a combined gross sale price of no more than $29,500,000. During Phase Two of the Marketing Period", unless Liberty otherwise agrees in a writing signed by Liberty, the Debtors will list the Great Hans Property for a gross sale price of no more than $17,500,000 and will list the Little Hans Property for a gross sale price of no more than $7,000,000. During such Phase Two, Debtors will also list the Great Hans Property and the Little Hans Property collectively for a combined gross sale price of no more than $24,500,000. The Debtor's failure to accept any offer or proposal from a prospective purchaser for a gross sales price for either or both of the properties equal to or in excess of the agreed upon gross sales prices will constitute a default under the Plan and will entitle Liberty to exercise its rights and remedies on account of that default in accordance with the Plan. In the event that Debtors are unable to close a sale of the Great Hans Property or the Little Hans Property during the Marketing Period on or prior to the end of Phase Two, the Debtors will then schedule and conduct a public auction of either or both properties to be held prior to November 1, 2012. The Debtors will give Liberty at least 30 days written notice of the date, time, and location of the auction. Liberty will be entitled to credit bid its then remaining Claims at the public auction and to be the successful purchaser at the sale if it submits the highest offer for those properties. All net sales proceeds realized from the sale of either the Great Hans Property or the Little Hans Property will be paid to Liberty for application to Liberty's debts and claims in accordance with the Plan and Liberty's loan and security documents. The Great Hans Property and the Little Hans Property will continue to be cross-collateralized and so long as any portion of Liberty's debt and Claims remain unpaid and unsatisfied. The Plan provides for this treatment of classes of claims and interests: * Class 3 Claims of Liberty Bankers Life Insurance Company will be treated as fully secured claims in an amount to be determined by the Court. The Class 3 Claims are impaired. * Class 4 Claim of Winnfield will be treated as: On December 1, 2010, the Wikil Property reverted to Winnfield pursuant to a non-judicial foreclosure in the State of California. Winnfield, the titleholder of the Wikil Property, has assumed an in rem obligation with respect to outstanding ad valorem taxes on account of the Wikil Property. The Class 4 Claim is impaired. * Class 5 Claim of Foley & Lardner for $345,461 will be allowed in full. The Class 5 Claim is impaired. * Class 6 PRM Development General Unsecured Claims will receive payment of their Allowed Claims out of cash distributions payable to the Reorganized PRM Development up to the Allowed amount of their Claim as a result of the sale of the Little Hans Property and the Great Hans Property. The Class 6 Claims are impaired. * Class 7 EMI General Unsecured Claims will receive payment of their Allowed Claims out of cash distributions payable to the Reorganized EMI up to the Allowed amount of their Claim as a result of the sale of the Little Hans Property and the Great Hans Property. The Class 7 Claims are impaired. * Class 8 Great Hans LLP General Unsecured Claims will receive payment of their Allowed Claims out of cash distributions payable to the Reorganized Great Hans LLLP up to the Allowed amount of their Claim as a result of the sale of the Great Hans Property. The Class 8 Claims are impaired. * Class 9 Little Hans LLP General Unsecured Claims will receive payment of their Allowed Claims out of cash distributions payable to the Reorganized Little Hans LLP up to the Allowed amount of their Claim as a result of the sale of the Little Hans Property. The Class 9 Claims are impaired. * Class 10 Equity Interest Holders will retain their interests in PRM Development, EMI, Great Hans LLLP and Little Hans LLP. Class 10 Claims are impaired. The Reorganized Debtors will pay all quarterly fees of the United States Trustee until the Case is closed. A full-text copy of the Third Amended Plan is available for free at http://bankrupt.com/misc/PRMDevt_3rdAmPlan.pdf With respect to the Plan objections, should the Plan become effective following Confirmation, Liberty and Winnfield will not oppose nor object to any request by any of the Debtors that, irrespective of the Court's findings or rulings in connection therewith, Debtor Econometric Management, Inc.'s bankruptcy case was not filed in bad faith, and will not oppose or object to any motion by any of the Debtors for an order vacating and entirely setting aside Judge Stacey Jernigan of the U.S. Bankruptcy Court for the Northern District of Texas's order dated October 7, 2010 and any other findings of fact or conclusions of law that the EMI case was filed in bad faith. The request may be referred by Judge Hale to Judge Jernigan. A full-text copy of the confirmation order is available for free at http://bankrupt.com/misc/PRMDevt_May13ConfOrder.pdf About PRM Development Chicago, Illinois-based PRM Development, LLC, filed for Chapter 11 protection (Bankr. N.D. Tex. Case No. 10-35547) on Aug. 6, 2010. Gerrit M. Pronske, Esq., at Pronske & Patel, P.C., assists the Debtor in its restructuring effort. The Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million as of the Petition Date. Affiliates Bon Secour Partners, LLC; PRS II, LLC; PRM Realty Group, LLC; PMP II, LLC; Maluhia Development Group, LLC; Maluhia One, LLC; Maluhia Eight, LLC; Maluhia Nine, LLC; and Long Bay Partners, LLC, filed separate Chapter 11 petitions. On Oct. 14, 2010, the Court jointly administered Econometric Management, Inc., with the Debtors. On May 13, 2011, the Court confirmed the Chapter 11 Plan of Reorganization of PRM Development and its debtor affiliates. PROJECT ORANGE: Wins Court Approval of Creditor-Payment Plan ------------------------------------------------------------ Dow Jones' DBR Small Cap reports that former electricity and energy supplier Project Orange Associates Inc. won court approval to begin paying its creditors after taking the past year to resolve a long-running dispute with key customer Syracuse University. Project Orange Associates, LLC, sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-12307) on April 29, 2010. Timothy W. Walsh, Esq., at DLA Piper LLP (US), filed the Chapter 11 petition. The Company disclosed $9.7 million in assets and $15.4 million in liabilities at the time of the filing. PSGAMEGEAR SPORTS: Files For Chapter 11 Bankruptcy Protection ------------------------------------------------------------- The Washington Post reports that PSGameGear Sports Memorabilia LLC, 21100 Dulles Town Cir., No. 162 in Dulles, Virginia, filed for Chapter 11 protection (Bankr. E.D. Va. Case No. 11-14312). The Company estimated less than $50,000, and liabilities of between $50,001 and $100,000. Shannon Guignon represents the Company as its attorney. R. SHAWN ELLIS: Elk Valley Cautions Investors on New Venture ------------------------------------------------------------ The Elk Valley Rancheria, California, a federally recognized Indian tribe, reviewed the recent press release made by R. Shawn Ellis purporting to announce his exploration of a new hotel concept and cautions investors considering a venture with the company. Multiple entities owned by R. Shawn Ellis have filed for bankruptcy leaving the Elk Valley Rancheria and other previous investors empty-handed. The Tribe notes the following in that May 26, 2011 press release: "As the CEO of Ellis Gaming & Entertainment, LLC, R. Shawn Ellis engages in a hands-on approach in creating a business environment that is profitable for all groups, but more importantly, a long term benefit to the health and well-being of all partners involved in each and every venture." Beware. The Elk Valley Rancheria, California still waits for the profit, health and well-being from the ventures with Mr. Ellis. "We want potential investors to understand the full-scope of the R. Shawn Ellis business," said Dale Miller, Chairman of the Elk Valley Rancheria. See, In re Ellis Las Vegas, Inc, Case Number 10-32195; In re Ellis Partners, LLC, Case Number 11-12960; In Re Ellis Gaming & Entertainment, LLC, Case Number 10-34134; and In re R. Shawn Ellis, Case Number 11-12959 are all Chapter 7 bankruptcy filings in the United States Bankruptcy Court, District of Nevada filed voluntarily by the identified parties that are part of or affiliated with the "the Ellis Gaming group of companies that specializes in development and management of international and aboriginal gaming projects." See also, Elk Valley Rancheria, California v. R. Shawn Ellis, et al., Case No. 2:09-CV-00621-KJD-GWF, United States District Court, District of Nevada. The Elk Valley Rancheria, California offers various governmental services to its members and operates several local businesses, including the Tsunami Lanes Bowling Alley, Del Norte Golf Course, Hiouchi RV Resort, and the Elk Valley Casino. The Tribe also owns Elk Valley Rancheria Economic Development Corporation and Elk Valley Rock. RAY ANTHONY: Seeks to Sell Equipment to Red White for $9.6MM ------------------------------------------------------------ Ray Anthony International, LLC, seeks permission from the U.S. Bankruptcy Court for the Western District of Pennsylvania to sell equipment and other miscellaneous tools, free and clear of all liens, to Red, White & Blue Crane, LLC for $9,666,500. Pursuant to an Asset Purchase Agreement, as amended with Red White, the Debtor will sell 19 cranes, 17 trucks, 33 trailers, 15 light vehicles, as well as miscellaneous equipment, office furniture, miscellaneous rigging for cranes and miscellaneous tools and other items used in connection with the business and assumed contracts for the purchase price of $9,666,500. The purchase price will be paid by cash in the amount of $7,216,500 and the assumption of $2,450,000,000 in loan obligations. A full- text copy of the APA is available for free at: The amendment to the APA was necessitated by the parties adding and deleting equipment to be sold, otherwise, the APA remains unchanged. These parties may hold liens, claims and encumbrances: * All Points Capital Corp. 275 Broadhollow Road Melville, NY 11747-4808 * Alliance Leasing, Inc. 120 Madison Street 17th Floor Syracuse, NY 13202 * Alter Moneta Corporation 50 Lakefront Blvd., Suite 208 Buffalo, NY 14202 * Ameriserve Financial Bank 1501 Somerset Ave., 2nd Floor Windber, PA 15963-1745 * Bank of the West 401 SW 5th Avenue Portland, OR 97204 * Broward County Tax Collector P.O. Box 29009 Ft. Lauderdale, FL 33302-9009 * Centra Bank, Inc. 81 W. Main Street Uniontown, PA 15401 * Edson Financia, Inc. 2701 E. Imperial Highway Brea, CA 92821 * FCC Equipment Financing, a Division of Caterpillar 12740 Gran Bay Parkway West, Suite 2100 Jacksonville, FL 32258 * Fifth Third Bank 600 Superior Avenue, East 4th Floor Cleveland, OH 44114 * Florida Department of Revenue 5050 West Tennessee Street Tallahassee, FL 32399-0100 * Ford Motor Credit Company LLC One American Road Dearborn, MI 48126 * GE Capital Corporation 1010 Thomas Edison Blvd. Cedar Rapids, IA 52404 * Huntington National Bank Centre City Tower 650 Smithfield St. Suite 1000 Pittsburgh, PA 15222 * Internal Revenue Service IRS - Office of Chief Counsel Moorhead Federal Building, Room 806 1000 Liberty Avenue Pittsburgh, PA 15222 * Mack Financial Services a division of Volvo Financial Services P.O. Box 26131 Greensboro, NC 27402 * Pennsylvania Department of Revenue Pittsburgh District Office 11 Stanwix Street, Room 310 Pittsburgh, PA 15222-1312 * Pinellas County Tax Collector Diane Nelson, CFC P.O. Box 1729 Clearwater, FL 33757 * Regions Bank 6019 Winthrop Commerce Ave. Riverview, FL 33578 * SG Equipment Finance USA Corp. 480 Washington Blvd. Jersey City, NJ 07310-2053 * Susquehanna Commercial Finance, Inc. 1566 Medical Drive Suite 201 Pottstown, PA 19464-3229 * TCF Equipment Finance Inc. 11100 Wayzata Blvd., Suite 801 Minnetonka, MN 55305 * Texas Taxing Authorities: Texas Department of Revenue Texas State Comptroller P.O. Box 13528 Austin, TX 78711-3528 Harris County Tax Office P.O. Box 4663 Houston, TX 77210-4663 Goose Creek Tax Office 4544 Interstate 10 East P.O. Box 2805 Baytown, TX 77251 * United Bank, Inc. 1085 Van Voorhis Rd., Suite 150 Morgantown, WV 26505 * United Financial Group, Inc. P.O. Box 941313 Maitland, FL 32794 * US Bank National Association, f/k/a Park National Bank 1026 Ogden Avenue Lisle, IL 60532 The liens of Huntington National Bank are not listed as they possess junior blanket liens on all equipment in the amount of $11,000,000 The liens of United Financial Group in addition to its lien on an asset involved in this transaction possesses a junior blanket liens on all equipment in the amount of $800,000. For the avoidance of doubt, certain owners of Ray Anthony International LLC are also owners of the recently created Red White & Blue Crane, LLC, namely Ray G. Anthony and Natalie Anthony. Notwithstanding this common ownership, all purchase money secured parties affected by this sale have consented to this transaction. On June 9, 2011, the Court allowed the amended motion to proceed, if it remains unresolved, to hearing scheduled for June 22, 2011 at 10:00 a.m. West Mifflin, Pennsylvania-based Ray Anthony International, Inc., filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 10-26576) on Sept. 15, 2010. The Debtor estimated assets and debts at $50 million to $100 million as of the Chapter 11 filing. Affiliate Ray G. Anthony filed a separate Chapter 11 petition (Bankr. W.D. Pa. Case No. 10-26552) on Sept. 14, 2010. RAY ANTHONY: Wins Nod to Hire Swartz Campbell as Special Counsel ---------------------------------------------------------------- Ray Anthony International, LLC, obtained permission from the U.S. Bankruptcy Court for the Western District of Pennsylvania to employ Swartz Campbell, LLC as its special counsel for the limited purpose of representing the Debtor in connection with the interest of the Debtor in defending a claim against the Debtor by Aubrey Talbert and Clay Smith. The Debtor will pay Swartz Campbell's professionals according to their customary hourly rates: Title Rate per Hour ----- ------------- Partners $175 Associates $150 Paralegals $95 L. John Argento, Esq., a partner at Swartz Campbell, LLP, in Pittsburgh, Pennsylvania -- largento@swartzcampbell.com -- says his firm has agreed to handle the matter on a hourly basis with a retainer of $7,500. This matter will be billed on a monthly basis with the amount due deducted from the retainer. If and when the retainer reaches $2,500, it will be replenished up to $7,500, he relates. West Mifflin, Pennsylvania-based Ray Anthony International, Inc., filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 10-26576) on Sept. 15, 2010. The Debtor estimated assets and debts at $50 million to $100 million as of the Chapter 11 filing. Affiliate Ray G. Anthony filed a separate Chapter 11 petition (Bankr. W.D. Pa. Case No. 10-26552) on Sept. 14, 2010. RAY ANTHONY: Court Lifts Stay for Liquidation of Collateral ----------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Pennsylvania granted United Bank, Inc., relief from the automatic stay to recover and liquidate certain "titled collateral," pledged by debtor Ray Anthony International, LLC. Before the Petition Date, United Bank extended numerous loans to the Debtor, which loans were secured by, among other things, the titled collateral. As of April 26, 2011, the outstanding indebtedness owed to United Bank is in excess of $8 million. In joint motion filed with the Court, United Bank and the Debtor stressed it is imperative for United Bank to receive relief from stay immediately so that it can recover and liquidate the Titled Collateral before any uninsured loss occurs. The Debtor and United Bank also agree that the value of the Titled Collateral does not exceed $800,000, which is far less than the outstanding indebtedness owed by the Debtor to United Bank and secured by the Titled Collateral. The Debtor also stated that it has no use for the Titled Collateral, and thus, it is not necessary for an effective reorganization. The Debtor will assemble and turn over the Titled Collateral to United Bank and will reasonably cooperate with the lender during the liquidation of the Titled Collateral. West Mifflin, Pennsylvania-based Ray Anthony International, Inc., filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 10-26576) on Sept. 15, 2010. The Debtor estimated assets and debts at $50 million to $100 million as of the Chapter 11 filing. Affiliate Ray G. Anthony filed a separate Chapter 11 petition (Bankr. W.D. Pa. Case No. 10-26552) on Sept. 14, 2010. RASER TECHNOLOGIES: Plan to Give 100% of Equity to Linden, et al. ----------------------------------------------------------------- Rachel Feintzeig, writing for Dow Jones' Daily Bankruptcy Review, reports that Raser Technologies Inc. on Tuesday filed its bankruptcy-exit plan a few weeks after abandoning a dual sale-plan process. According to DBR, the Plan proposes to: -- hand 100% of the equity in the reorganized Raser to plan sponsors, Linden Capital LP, Tenor Opportunity Master Fund Ltd., Aria Opportunity Fund Ltd. and Parsoon Opportunity Fund Ltd.; and -- fold in an unsecured promissory note for the sponsors, to be issued by the reorganized Raser when the plan is implemented. In exchange, the group will: -- waive debt owed under the company's $12.5 million bankruptcy loan plus debt owed under a bridge facility -- which included a $750,000 term loan -- provided by Linden Capital Advisors LP; -- provide the company with a cash payment of $2.5 million; -- execute a post-confirmation financing deal with Raser, in the form of a $3 million senior secured convertible term loan. DBR notes the plan didn't disclose the amount or interest rate of the note, nor did it set out proposed recoveries for most creditor classes, including unsecured creditors of Raser and its bankrupt affiliates. According to DBR, the unsecured creditors are divided into separate pools -- Litigation LLC and Creditor LLC -- based on which Raser entity owes each creditor money, but most will be entitled to interests in two limited liability corporations Raser proposes to create under the plan. Litigation LLC and Creditor LLC will both be charged with going after claims on behalf of the creditors. Raser will contribute $500,000 to Litigation LLC and lend $200,000 to Creditor LLC, according to court papers. Creditors would eventually see distributions from those entities, with their repayment depending on how much each entity is able to garner through prosecution or settlement of the claims. Holders of current interests in Raser and its subsidiaries aren't set to see any distribution under the plan, and their interests are to be canceled. DBR says Raser is seeking court approval of its disclosure statement at a July 26 hearing. About Raser Technologies Raser Technologies Inc. (NYSE: RZ) is a renewable energy company focusing on geothermal power development. The Company has one operating plant in Utah and another eight early and development stage projects in Utah, New Mexico, Nevada and Oregon. The Company invested $120 million in Thermo No. 1, its sole operating plant, which is near Beaver, Utah, and has a power generation capacity of 10 megawatts. The City of Anaheim, California, agreed in 2008 to buy the generated electricity for 20 years. Provo, Utah-based Raser Technologies, Inc., also known as Wasatch Web Advisors, Inc., filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-11315) on April 29, 2011. Other Debtor affiliates filed for separate Chapter 11 protection on April 29, 2011, (Bankr. Case Nos. 11-11319 - 11-11350). Peter S. Partee, Sr., Esq., and Richard P. Norton, Esq., at Hunton & Williams LLP represent the Debtors in their restructuring efforts. The Debtors' local counsel is Bayard, P.A. Sichenzia Ross Friedman Ference LLP serves as the Debtors' corporate counsel. The Debtors' financial advisor is Canaccord Genuity. The Company reported a net loss of $101.80 million on $4.25 million of revenue for the fiscal year ended Dec. 31, 2010, compared with a net loss of $20.90 million on $2.19 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010, showed $41.84 million in total assets, $107.78 million in total liabilities, $5.00 million of Series A-1 cumulative convertible preferred stock, and a stockholders' deficit of $70.94 million. READER'S DIGEST: S&P Affirms 'B' Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services affirmed the 'B' corporate credit rating on Reader's Digest Assn. Inc. "At the same time, we revised our rating outlook on the company to negative from stable," S&P said. "We revised our outlook on Reader's Digest Assn. Inc. to negative based on the company's weak first quarter results and our view that if the company's operating performance worsens, its liquidity could be meaningfully reduced. The 'B' rating on Reader's Digest Assn. Inc. reflects our expectation that the company will continue to face secular pressure in its publications business; that its publishing business will remain highly competitive; that it will face mature growth prospects in its direct marketing business; and that its direct marketing model -- focused on selling music, videos, and books -- will become increasingly uncompetitive. It also reflects the company's vulnerability to economic cyclicality and the dated image of the Reader's Digest flagship magazine. These considerations support our view of the business risk profile as vulnerable and our expectation that the company's sales will continue to decline. We consider company's financial profile to be aggressive, given its significant debt burden," according to S&P. Revenue from magazines constitutes more than 30% of the company's total revenues. "We estimate that circulation for the flagship magazine has dropped over 60% since 1999, and we expect it will continue to drop. In our opinion, circulation has declined because the brand and content have lost relevance to mainstream lifestyles and attitudes, and because of the aging demographics of its readership" said Standard & Poor's credit analyst Tulip Lim. She added "Declining readership could also hurt the company's other businesses, because it provides potential customers to the direct marketing business. Moreover, we believe that there is a risk that the migration of advertising and audiences to Internet-delivered content will affect both advertising revenue and readership of the company's magazines. Although Reader's Digest does generate revenue from digital sources, competition online is intense, and barriers to entry are low." RIVIERA HOLDINGS: Moody's Assigns 'B3' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating to Riviera Holdings Corporation, a B2 rating to the company's first lien Series A revolver ($10 million) and term loan ($50 million), due April 2016 and a Caa2 rating to its $20 million second lien Series B term loan due April 2016. Moody's also assigned a speculative grade liquidity rating of SGL-2 reflecting the company's good liquidity. The credit agreement was put in place at the time the company emerged from bankruptcy on April 1, 2011. Ratings Assigned: -- Corporate Family Rating at B3 -- Probability of Default Rating at B3 -- First Lien Series A $10 million revolver due 4/2016 at B2 (LGD3, 36%) -- First Lien Series A $50 million term loan due 4/2016 at B2 (LGD3, 36%) -- Second Lien Series B $20 million term loan due 4/2016 at Caa2 (LGD5, 86%) RATINGS RATIONALE The B3 Corporate Family Rating reflects high pro-forma financial leverage -- debt to trailing EBITDA is 11.0 times -- earnings concentration from two casino properties, Moody's expectation of a slow recovery for the company's Las Vegas property, and a short operating history under the current management team. Ratings are supported by the consistent earnings generated by the casino in Black Hawk, Colorado and the company's good liquidity. Given rising visitation to Las Vegas, Moody's expects Riviera can grow EBITDA modestly and Moody's expects debt to EBITDA to decline to approximately 8.25 times and 6.75 times by year-end 2011 and 2012, respectively. Riviera is expected to generate sufficient cash flow to fund interest, working capital, and a modest level of maintenance capital spending. Additionally, Riviera can access its $20 million second lien term loan for needed capital spending and the company maintains a $10 million revolver to cover unexpected contingencies. There is no required amortization for the term loans. The first lien series A credit agreement is secured by all domestic subsidiary assets other the $20 million deposit account funded from the proceeds of the Series B term loan. The Series B term loan can only be used for approved capital expenditures and is secured by all assets on a second lien basis. A small portion of interest due on the series B term loan will be paid in cash; the remainder will be paid-in-kind (PIK). The rating outlook is stable given Riviera's good liquidity and Moody's view that earnings will grow modestly over the next year. An upgrade could be considered if debt to EBITDA improves and can be sustained at 5.5 times and if EBIT to interest expense increases comfortably above 1.0 time. Ratings could be downgraded if earnings growth stalls or if financial leverage remains at or above current levels. Additionally any negative pressure on liquidity could be cause for a downgrade. The principal methodology used in rating Riviera Holdings Corporation was the Global Gaming Industry Methodology, published December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA, published June 2009. Riviera Holdings Corporation owns and operates the Riviera Hotel and Casino in Las Vegas and the Riviera Black Hawk casino in Colorado. The company operates the Riviera hotel and casino in Las Vegas (approximately 66% of net revenues) and the Riviera Black Hawk casino in Colorado (approximately 33% of net revenues). The company generates approximately $120 million in net revenues annually. ROBB & STUCKY: Samson Chair Buys Name, Other IP Assets ------------------------------------------------------ Laura Layden at the Naples News reports that Chinese investor Samuel Kuo has announced his family has acquired the Robb & Stucky name and the furniture company's other intellectual property assets, including its logo and its customer list. According to the report, Mr. Kuo was the winning bidder for the assets at an auction. The sale was approved by a bankruptcy judge in Tampa last week. Clint Engel at Furniture Today says Mr. Kuo offered $470,000 for the assets. Mr. Kuo is the chairman and CEO of Samson Holding Ltd., a public company with its shares listed on the Hong Kong Stock Exchange. He's also a major shareholder in the Company, which is one of the leading furniture wholesalers in the U.S. and the United Kingdom. About Robb & Stucky Sarasota, Florida-based Robb & Stucky Limited LLLP -- dba Robb & Stucky; Robb & Stucky Interiors; Fine Design Interiors, a division of Robb & Stucky; Robb & Stucky Patio; R&S Home of Fine Decorators; and Home of Fine Design by Robb & Stucky -- is a retailer of upscale, high-end, interior-design-driven home furnishings in the U.S. It filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 11-02801) on Feb. 18, 2011. Paul S. Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman PA, serve as the Debtor's bankruptcy counsel. FTI Consulting, Inc., is the Debtor's advisor and Kevin Regan is the Debtor's chief restructuring officer. Bayshore Partners, LLC, is the Debtor's investment banker. AlixPartners, LLP, serves as the Debtor's communications consultants. Epiq Bankruptcy Solutions, LLC, serves as the Debtor's claims and notice agent. In its schedules, the Debtor disclosed $77,705,081 in assets and $91,859,125 in liabilities as of the Chapter 11 filing. ROTHSTEIN ROSENFELDT: US Doesn't Want Rothstein Deposed by Others ----------------------------------------------------------------- Paul Brinkmann at South Florida Business Journal reports that the U.S. Attorney's Office in Miami has filed objections to an order by U.S. Bankruptcy Judge Raymond Ray to produce Scott Rothstein for questioning. According to the report, the reason is that prosecutors fear Mr. Rothstein's answers could tip off his partners in crime. The government said, once again, it is preparing multiple indictments related to Mr. Rothstein's $1.2 billion Ponzi scheme. The U.S. Attorneys' Offfce will cooperate only with Herbert Stettin, the trustee in the Chapter 11 bankruptcy of Rothstein's former law firm, Rothstein Rosenfeldt Adler, Business Journal discloses. Federal authorities said they understand that Mr. Stettin is up against a two-year statute of limitations and must get some information from Mr. Rothstein. But the government clearly doesn't want other civil litigants deposing Mr. Rothstein, including investors who have sued in state court. The question is now before U.S. District Judge James I. Cohn. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. ROTHSTEIN ROSENFELDT: Judge OKs Settlement With Kimberly --------------------------------------------------------- Dow Jones' DBR Small Cap reports that a bankruptcy judge signed off on a settlement that frees the wife of Ponzi-scheme operator Scott Rothstein from a $1.1 million lawsuit in exchange for turning over such personal belongings as a ruby and diamond heart ring and furniture. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. ROZANNA MULHOLLEN: Lender Still Awaiting for Fin'l Documents ------------------------------------------------------------ Greg Stiles at the Mail Tribune reports that a lawyer representing Sterling Bank, one of the largest creditors and a lender for the market property, said that Rozanna and Richard Mulhollen have not submitted required financial documents, including monthly statements and tax returns. Jackson County has filed a claim for more than $83,000 in unpaid property taxes. Rozanna Mulhollen, along with her husband, filed a Chapter 11 petition (Bankr. D. Ore. Case No. 11-60531) on Feb. 9, 2011. ROOSEVELT LOFTS: To Sell Assets to Greystar for $95 Million ----------------------------------------------------------- Eric Richardson at Blog Downtown reports the Roosevelt Lofts' two- year-long stint in Chapter 11 bankruptcy proceedings could be coming to an end. Lawyers for developer Milbank Real Estate and lender Bank of America are seeking approval from Judge Geraldine Mund for a $95 million sale of the 222-unit residential project at 7th and Flower, in downtown Los Angeles. Hoping to buy the property is Greystar, a national multifamily real estate company. At least $68 million of that purchase price will go to Bank of America, which has fought vigorously to take control of the building since it entered bankruptcy. Approximately $16 million would go to other firms owed money by the project. The sale agreement gives Greystar two options: buy the 222 residential units for $89 million, or the whole building (including retail) for $95 million. The company chose the latter. Still, using that $89 million number gives a valuation of $400 per unit for the residential. Based in Los Angeles, California, Roosevelt Lofts LLC is a luxury condominium project in downtown Los Angeles. The company filed for Chapter 11 protection on April 13, 2009 (Bankr. C.D. Calif. Case No. 09-14214). David L. Neale, Esq., at Levene Neale Bender Rankin & Brill LLP, represents the Debtor. In its petition, the Debtor listed assets of between $100 million and $500 million, and debts of between $50 million and $100 million. RICHARD HAISFIELD: Creditor Wants Liquidation to Pay Claims ----------------------------------------------------------- Carlos E. Medina at Ocala.com reports that a creditor of Stonewall Farm Ocala principal Richard Haisfield filed a petition in U.S. Bankruptcy Court in Florida asking the court to force the liquidation of his assets in an attempt to collect millions of dollars the creditor claims are still owed to them. According to the report, a separate action alleging fraud in U.S. District court by the same creditor names the Ocala farm and ownership in several stallions, including Leroidesanimaux, who stands at the Ocala farm and sired this year's Kentucky Derby winner Animal Kingdom. The petition for an involuntary Chapter 7 ruling against Mr. Haisfield was filed May 26, 2011, in the Middle District of Florida in Jacksonville, Florida. The move came just more than three weeks after U.S. District Judge Timothy J. Corrigan in Ocala ruled against the creditor, Stone Wall Acquisitions LLC, which was seeking an injunction to freeze transfers of Richard and Audrey Haisfield's assets and appoint a receiver, Ocala.com discloses. Ocala.com relates that, in that filing, Stone Wall Acquisitions alleges the Haisfields fraudulently transferred assets to relatives and between myriad business entities "in exchange for, or in purported payment of, non-existent, undocumented, or otherwise suspect 'loans.'" In early November, Audrey Haisfield sought bankruptcy court approval to sell Stonewall's 92 percent interest in Leroidesanimaux to an entity managed by her son, Marc Haisfield. Under the agreement, Palm Beach Stallions I, managed by Marc Haisfield, would pay $715,000 for the shares, of which $650,000 would go to Chase Bank, another creditor, in exchange for the bank dropping its lien on the stallion. ROBINO BAY COURT: Seeks Approval to Sell Substantially All Assets ----------------------------------------------------------------- Robino-Bay Court Pad, LLC, seeks approval from the U.S. Bankruptcy Court for the District of Delaware the bid procedures for the sale of substantially all of its assets. To ensure the maximum bid for the Property, the Debtor sought approval of the retention and employment of The Flynn Company by separate motion to market and solicit offers for the Sale. If the Debtor receives more than one qualified bid for any Property, the Debtors propose to conduct a Sale pursuant to the following procedures, which will permit bidders to bid on any relevant Property in a full and fair manner, and allow the Debtors to review, analyze and compare all bids to determine which bid is the highest and best bid. The Debtor will solicit bids for the sale of the Property until Sept. 16, 2011, by marketing of any means and, if so decided, in the publication of the Debtor's choosing and discretion. Any party desiring to submit a bid for Property(s) shall deliver any such bid in writing via facsimile or mail to: (a) The Flynn Company 1621 Wood Street Philadelphia, PA 19103 Phone: (215) 561-6565 Fax: (215) 561-5025 (b) Albert A. Ciardi, III, Esq. Ciardi Ciardi & Astin 2005 Market St., Suite 1930 Philadelphia, PA 19103 Fax: (215) 557-3551 (c) Janet Z. Charlton, Esq. The Chartwell Law Offices, LLP 300 Delaware Avenue, Suite 800A Wilmington, DE 19801 Fax: (302) 425-0200 All Bids must comply with the following requirements: a. The Bid must provide for the payment of cash at closing for the entire purchase price; b. If the Bid is a credit bid, the Bid must allocate the portion offered to each specific Property, and the apportioned credit Bid may not exceed the loan amount outstanding for each relevant Property; c. The Bid must provide for a closing of the sale of the Property no later than the deadline set in the APA; d. The Bid must be accompanied by an executed copy of the APA; e. The Bid must provide that the purchase of the Property(s) will be "AS IS, WHERE IS" with no representations or warranties from the Debtors; f. The Bid shall not be conditioned on the outcome of unperformed due diligence by the bidder or any financing contingency; g. The Bid must be based solely on the bidder's due diligence and not representations or warranties of the Debtor; h. The Bid must be accompanied by financial statements, letters of credit and/or any other documents or evidence satisfactory to the Debtor of the bidder's financial ability to consummate the contemplated transaction, including future performance of any assumed executory contracts; i. The Bid shall indicate that, if a Minimum Incremental Bid is received, the bidder will participate in the Sale; j. The Bid shall indicate that the potential bidder, if it becomes the Successful Bidder, will consummate and fund the proposed sale; k. The Bid must state that the Bid is irrevocable until the closing of the sale transaction(s); l. The Bid must be accompanied by a good faith deposit of 10% of the amount of the Bid sent by wire transfer in immediately available funds or set forth in an irrevocable letter of credit; The Bid Procedures are intended to minimize the cost to these estate of liquidating the Property and to allow for an efficient transfer to the Successful Bidder. A copy of the bid procedures is available for free at: http://ResearchArchives.com/t/s?764b About Robino-Bay Court Plaza Wilmington, Delaware-based Robino-Bay Court Plaza, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10- 12376) on July 28, 2010. The Debtor is represented by John D. McLaughlin, Jr., Esq., at Ciardi Ciardi & Astin. The Debtor listed $12,784,786 in total assets and $13,698,321 in total liabilities as of the filing date. An affiliate, Robino-Bay Court Pad, LLC, filed a separate Chapter 11 petition on July 28, 2010 (Case No. 10-12377). ROCHA DAIRY: U.S. Trustee Forms 5-Member Creditors' Panel --------------------------------------------------------- Robert D. Miller, United States Trustee for Region 18, under 11 U.S.C. Sec. 1102(a) and (b), appointed five unsecured creditors who are willing to serve on the Official Committee of Unsecured Creditors of Rocha Dairy, LLC. The Creditors Committee members are: 1. Troy Chandler Farmore of Idaho P.O. Box 14 Twin Falls, ID 83301 Tel: (208)-280-0301 Fax: (208)-324-3341 E-mail: troy@farmoreofidaho.com 2. Lonnie Lowder Blue Mud, Inc. P.O. Box 5278 Twin Falls, ID 83303 Tel: (208)-681-9202 Fax: (208)-944-9399 3. David Silva High Mountain Hay 3477 North 2600 East Twin Falls, ID 83301 Tel: (208)-731-0907 Fax: (208)-735-1631 E-mail: silvatrucking@yahoo.com 4. Chance Standlee Standlee Hay Company 876 South 1700 East Eden, ID 83325 Tel: (208)-825-5117 Fax: (208)-825-5129 E-mail: cstandlee@standleehay.com 5. Cindy Wiersema Kurt Wiersema Trucking 325 South 5000 West Jerome, ID 83338 Tel: (208)-324-8551 Fax: (208)-324-5187 E-mail: cindycowchow@aol.com About Rocha Dairy Based in Wendell, Idaho, Rocha Dairy, LLC, aka Rocha Farms, filed for Chapter 11 bankruptcy (Bankr. D. Idaho Case No. Case No. 11- 40836) on May 25, 2011. Judge Jim D. Pappas presides over the case. Lawyers at Robinson, Anthon & Tribe serve as bankruptcy 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 Elcidio Rocha, member. ROSSCO HOLDINGS: Hearing on College Station Sale Reset to June 28 ----------------------------------------------------------------- Judge Vincent P. Zurzolo of the U.S. Bankruptcy Court for the Central District of California rescheduled the hearing to consider Rossco Holdings, Inc.'s request to sell property in College Station, which comprises multiple parcels of real property located in the County of Brazos, Texas, free and clear of all liens, to the successful bidder from June 24, 2011 11:00 a.m. to a June 28, 2011 at 11:00 a.m. In light of the continued sale hearing, the Debtor proposes to amend the Court-approved bidding procedures governing the sale of the Rossco Property. The Rossco property may be sold along with contiguous parcels owned by related non-debtor entities and a small parcel owned by the estate of Chapter 11 debtor Leonard M. Ross. Each of the sellers of the related parcels has conditionally entered into a contract of sale with the buyer that initially required a closing by May 9, 2011, but has been extended to address the continued sale hearing. On May 10, 2011, the Court appointed a Chapter 11 Trustee in the related Chapter 11 case of Leonard M. Ross, the Debtor's sole equityholder through his revocable trust. The U.S. Trustee for Region 16 has appointed Howard M. Ehrenberg as trustee, and the Chapter 11 Trustee has asked that the sale hearing be continued to June 28, 2011, requiring the motion to amend the bidding procedures and provide for later dates. The Debtor has signed a Contribution and Sale Contract with Woodridge Capital Finance Fund I, LLC, whereby Woodbridge would provide the debtor and non-debtor with a combined cash consideration of $19.5 million, and would provide Rossco and Mr. Ross with a significant ownership in the limited liability company that will carry out and own a portion of the major development that is planned for the properties, through a combined 50% ownership in the Sponsor Member. Pursuant to the Contribution and Sale Contract, Rossco will also receive with over $4 million in cash consideration for the sale of its parcels of real property, a corresponding interest in the Sponsor Member and its $5.5 million capital account, and a participatory role in the development. As a result, the Stalking Horse Bid provides the Debtor with an opportunity to not only bring in cash to the estate with which Rossco can fund a plan of reorganization and pay the claims of its creditors, but also to have an ongoing business to reorganize consistent with the real estate activities that Rossco has undertaken in its approximate forty year history in real estate, David J. Richardson, Esq., at The Creditors' Law Group, in Los Angeles, California -- djr@thecreditorslawgroup.com -- tells the bankruptcy judge. A full-text copy of the Contribution and Sale Contract is available for free at: http://bankrupt.com/misc/Rossco_ContributionSaleContract.pdf Moreover, the amended bid procedures contemplate this schedule to govern the sale: * June 22, 2011 - 5:00 p.m. - Deadline to submit proposed Bids. * June 23, 2011 - 12:00 noon - Debtor to file designation of Lead Bid. * June 24, 2011 - 10:00 a.m. - Auction. * June 27, 2011 - 12:00 noon - Debtor to file designation of successful bid. * June 28, 2011 - 11:00 a.m. - Sale Hearing. About Rossco Holdings College Station, Texas-based Rossco Holdings, Inc., filed for Chapter 11 protection on Aug. 2, 2010 (Bankr. W.D. Tex. Case No. 10-60953). The new California Case No. of Rossco Holdings is LA10-55951BB. Ronald E. Pearson, Esq., at Pearson & Pearson, represents the Debtor. The Debtor disclosed $28,415,681 in assets and $10,567,302 in liabilities as of the Petition Date. Affiliates Monte Nido Estates, LLC; LJR Properties, Ltd.; WM Properties, Ltd.; Colony Lodging, Inc.; and Rossco Plaza, Inc., filed separate Chapter 11 petitions. The Court set a hearing on June 28, 2011 to consider the Debtor's sale of its Brazos, Texas assets. RUDERMAN CAPITAL: Poker Losses Partly Recovered in Fraud Lawsuit ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the better poker player may not be able to keep the winnings if the loser files bankruptcy, at least if the loser was running a Ponzi scheme. Bradley Ruderman ran a purported hedge fund called Ruderman Capital Partners LLC. In reality, the Beverly Hills, California-based firm was a Ponzi scheme. Mr. Ruderman pleaded guilty and was sentenced to more than 10 years in prison, the bankruptcy trustee for Ruderman Capital said in a court filing. Mr. Ruderman, according to the trustee, participated in a "regular poker game" where he lost $845,900 to Robert Safai. Mr. Rochelle recounts that the trustee was appointed after creditors filed an involuntary Chapter 7 petition (Bankr. C.D. Calif. Case No. 09-19539) against Ruderman Capital in April 2009. The trustee sued, contending Mr. Safai was obliged to give the winnings back on the theory they were proceeds from fraudulent transfers. The trustee agreed this month to settle for $360,000, so long as Mr. Safai certifies he had no reason to suspect there was anything improper about Ruderman Capital. The settlement comes up for hearing July 13 in U.S. Bankruptcy court in Los Angeles. The trustee decided to accept a 57.5% discount in view of difficult legal questions about whether "Safai provided value to the debtor in relation to the poker game." SATELITES MEXICANOS: Incurs $13.88 Million Net Loss in 2010 ----------------------------------------------------------- Satelites Mexicanos, S.A. DE C.V., filed with the U.S. Securities and Exchange Commission its Annual Report on Form 20-F reporting a net loss of US$13.88 million on US$128.76 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of US$19.74 million on US$125.03 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010, showed US$438.95 million in total assets, US$524.99 million in total liabilities and a US$86.03 million total shareholders' deficit. Galaz, Yamazaki, Ruiz Urquiza, S. C., in Mexico City, Mexico, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that Satmex's working capital deficiency, recurring net losses, shareholders' deficit, inability to generate sufficient cash flow to meet its short-term obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 20-F is available for free at: http://is.gd/1sH9V5 About Satmex SAB Satelites Mexicanos, S.A. de C.V., (Satmex) is a Mexico-based provider of fixed satellite services in the Americas, with coverage to more than 90% of the population to the Americas, including more than 45 nations and territories. Satmex also provides Latin American television programming in the United States. One of only two privately managed FSS providers based in Latin America, Satmex has a fleet comprised of three satellites. Satmex 5 and Satmex 6 generate the adjusted EBITDA for Satmex. A third satellite, Solidaridad 2, is inclined orbit but does not generate any adjusted EBITDA. Construction of Satmex 8 is expected to be completed by July 2012. Satmex also intends to pursue plans for a new satellite, to be named Satmex 7. Satmex first filed for bankruptcy in August 2006 in New York and exited four months later with a plan to repay creditors owed about US$743 million with new debt and equity. Satmex, with affiliates Alterna' TV International Corporation and Alterna' TV Corporation, again filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-11035) on April 6, 2011. The Debtors disclosed US$441.6 million in total assets and US$531.6 million in total debts as of March 23, 2011. In its schedules, Satmex disclosed US$393,427,253 in total assets and US$457,699,978 in total debts on a stand-alone basis. Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, serves as the Debtor's bankruptcy counsel in the present Chapter 11 case. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' financial advisor. Jefferies & Company, Inc., is the financial advisor to supporting second lien noteholders. Ropes & Gray LLP is the U.S. counsel to supporting second lien noteholders. Cervantes Sainz serves as Mexican counsel to supporting 2nd lien noteholders. Dechert LLP is the U.S. counsel to supporting holders of first priority notes. Galicia Abogados, S.C., is the Mexican counsel to supporting holders of first priority notes. Bracewell & Giuliani LLP is the U.S. counsel to Series B. Directors. Kuri Brena Sanchez Ugarte Y Aznar is Mexican counsel to Series B. Directors. Morgan, Lewis & Bockius LLP is the U.S. counsel for SCT for Mexico Government. Casares, Castelazo, Frias, Tenorio Y Zarate, SC, is the Mexican counsel for SCT for Mexico Government. Detente Group is the financial advisor for SCT for Mexico Government. Latham & Watkins LLP is the U.S. counsel to Jefferies Finance. Creel, Garcia-Cuellar, Aiza Y Enriquez is the Mexican counsel for Jefferies. As reported in the TCR on June 1, 2011, Satmex disclosed that on May 26, 2011, it officially concluded its reorganization efforts and emerged from its U.S. bankruptcy case. As previously announced, Satmex, together with its subsidiaries, Alterna' TV Corporation and Alterna' TV International Corporation, filed a prepackaged plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code on April 6, 2011. The Plan was confirmed by the U.S. Bankruptcy Court in the District of Delaware on May 11, 2011, and became effective on May 26, 2011. SEARS HOLDINGS: Fitch Downgrades 'B' Issuer Default Rating ---------------------------------------------------------- Fitch Ratings has downgraded its long-term Issuer Default Ratings on Sears Holdings Corporation (Holdings) and its various subsidiary entities to 'B' from 'B+'. The ratings on various tranches of debt have also been downgraded by a notch. The Rating Outlook is Negative. The downgrades reflect continued deterioration in EBITDA on worse than expected top line growth, with a precipitous decline during the first quarter of 2011. As a result, credit metrics continue to be pressured and leverage could increase by an additional turn or more in 2011 from 4.6x in 2010, and be potentially higher in 2012 and 2013 (versus Fitch's prior expectation of leverage remaining under 5.0x). The revised expectations contemplate reduction in EBITDA from a latest 12-month (LTM) level of $1.2 billion. Leverage is also expected to increase due to a need for higher borrowings to fund operations with EBITDA now under $1.5 billion. Liquidity remains adequate given availability under the company's U.S. and Canadian facilities, the ability to add $1.75 billion in secured indebtedness, and, potentially, to pull other levers over the intermediate term. However, the magnitude of decline in profitability and the lack of visibility to turn around operations remain a major concern. Market Share Losses Continue: Domestic Sears and Kmart stores have been underperforming their retail peers on top-line growth for many years and the combined domestic entity has lost over $9.5 billion, or 20% of its 2006 domestic revenue base of $48 billion (the two companies merged in March 2005) through the first quarter of this year (1Q'11; on an LTM basis). The top-line weakness reflects competitive pressures, inconsistent merchandising execution and the lack of clarity about the company's longer term retail strategy, particularly in the face of continuous changes in its top ranks. Sears' challenge will be to generate longer term sales and earnings growth at both Sears and Kmart in the face of continued market share gains by its largest retail peers within the department store, discount and big-box specialty retail segments. Using an industry composite based on Fitch's estimate of Sears' sales mix, industry sales were down an estimated 8%-9% over 2006- 2010 or a CAGR decline of just over 2%. During this four-year period, Sears' sales were down 21% or a CAGR decline of approximately 6%. The decline in Kmart sales have been even more pronounced relative to its industry peers. Using a composite of general merchandise, food and drugstore sales for Kmart, industry sales are up almost 20% over the last four years or 4.5% CAGR. In contrast, Kmart sales are down 16% or a CAGR decline of 4.5%. Fitch expects both Kmart and Sears will remain share donors as Sears' comparable store sales are expected to be in the negative 3%-5% range in 2011-13, while Kmart's comps are expected to be down in the low single-digit range. Tremendous Pressure on Operating Profitability: Weakness in top line has resulted in operating margins that significantly lag its peers. This is in spite of the company undertaking aggressive cost cutting measures between 2006 to 2009 which resulted in a $1.2 billion reduction in domestic selling and administrative expenses. Domestic EBITDA margin has tracked over 600 basis points (bps) lower on average over 2008 to 2010 compared to its largest retail peers in the discount, department and hardline retail categories. Given chronic underinvestment in the stores due to years of cost cutting and low level of capital expenditures and the lack of a well-articulated strategy to stop market share losses, Fitch expects the high differential will likely continue. Sears' 1Q'11 EBITDA fell to $63 million from $304 million, a decline of 80% year-over-year on weaker than expected comparable store sales across all the reporting segments. Even if EBITDA were to stabilize for the remainder of the year, this would still reduce EBITDA to $1.2 billion in 2011 (assuming Sears can align inventory more appropriately to sales in the second half of this year) versus $1.45 billion in 2010. However, given continued pressure on sales, a decline in gross margin on excessive inventory markdown, and Fitch's assumption of flat SG&A, EBITDA is expected to remain under pressure. It is difficult to define the magnitude of decline given Sears generates 65% of its profit in the fourth quarter along with the many moving parts, but EBITDA could be well under $1 billion for 2011. With sales pressure expected to continue into 2012 and beyond, the only way for Sears to stabilize or increase EBITDA would be to increase gross margin levels or reduce SG&A expenses. For every 1% decline in top line at Sears Domestic or Kmart from 2010 reported levels, gross margins would have to increase by 30 bps and 25 bps, respectively, to hold gross profit dollars flat. Fitch thinks the ability to further cut expenses without adversely affecting top line is constrained given years of underinvestment. Liquidity Adequate But Declining: At the end of 2010 (year ended Jan. 29, 2011), Sears had liquidity of approximately $5 billion. This consisted of $1.39 billion of cash; $3 billion of pro forma availability under its domestic $3.275 billion credit facility (upsized from the $2.4 billion facility in April 2011); and $510 million availability under its CAD$800 million asset backed revolver facility due 2015. This availability has to be adjusted for several factors -- Fitch estimates that Sears would require (1) a minimum of $400 million- $500 million in cash to run the business; (2) $2 billion-$2.5 billion to fund peak seasonal working capital needs during the holiday season; and (3) cash collateral or letter of credit borrowings under its domestic facility in the amount of $475 million-$500 million for self-insurance programs. As a result, real 'excess' liquidity would be in the range of $1.5 billion to $2.2 billion. This assumes Sears has full access to both its domestic and Canadian credit facilities. However, covenants may constrict liquidity levels over time if profitability continues to wane; for example, Sears has a cash dominion requirement and needs to maintain a fixed-charge coverage ratio of 1.0x under its domestic credit facility if usage exceeds a certain amount. Fitch estimates that Sears would need to generate EBITDA of $1.5 billion in 2011 and $1.2 billion to $1.3 billion annually in 2012 and 2013 to service cash interest expense ($260 million-$280 million), capex ($400 million), contribution to pension plans ($300 million) and debt maturities. Other uses of cash could be working capital (which could be a drain of another $200 million in 2011 assuming year-end inventories are up roughly 3%) and share buybacks. Given EBITDA is expected to be materially lower, the company will need additional borrowings to fund its operations. Additional sources of liquidity include the current ability to issue $1.75 billion in secured debt as permitted under its credit facility ($1 billion accordion feature to upsize the facility and $750 million in second lien debt) and asset sales. For example, assuming the Canadian business can sustain EBITDA in the $200 million-$225 million range, gross proceeds from the sale of the business could be in the range of $1 billion-$1.4 billion assuming a 5x-6x multiple. Sears could also cut back on inventory, capital expenditures and SG&A, but these would come at the expense of top line unless Sears right sizes the business through large number of store closings. Recovery Considerations for Issue-Specific Ratings: In accordance with Fitch's Recovery Rating methodology, Fitch has assigned RRs based on the company's 'B' IDR. While concepts of Fitch's RR methodology are considered for all companies, explicit recovery ratings are assigned only to those companies with an IDR of 'B+' or below. At the lower IDR levels, Fitch believes there is greater probability of default, so the impact of potential recovery prospects on issue-specific ratings becomes more meaningful and is more explicitly reflected in the ratings dispersion relative to the IDR. Fitch's recovery analysis assumes a liquidation value under a distressed scenario of approximately $9 billion on inventory, receivables, and property, plant and equipment. The $3.275 billion domestic senior secured credit facility, under which Sears Roebuck Acceptance Corp. and Kmart Corporation are the borrowers, is rated 'BB/RR1', indicating outstanding (90%-100%) recovery prospects in a distressed scenario. Holdings provides a downstream guarantee to both SRAC and Kmart Corp. borrowings and there are cross-guarantees between SRAC and Kmart Corp. The facility is also guaranteed by direct and indirect wholly-owned domestic subsidiaries of Holdings which owns assets that collateralize the facility. The facility is secured primarily by domestic inventory which ranges from $8 billion to $10 billion around peak levels in November, and pharmacy and credit card receivables which range from $650 million to $700 million. The credit facility has an accordion feature that enables the company to increase the size of the credit facility or add a first-lien term loan tranche in an aggregate amount of up to $1 billion and issue $750 million in second-lien debt. The credit agreement imposes various requirements, including (but not limited to) the following: (1) if availability under the credit facility is beneath a certain threshold, the fixed-charge ratio as of the last day of any fiscal quarter be not less than 1.0 times (x); (2) a cash dominion requirement if excess availability on the revolver falls below designated levels, and (3) limitations on its ability to make restricted payments, including dividends and share repurchases. The $1.25 billion second lien notes due October 2018 at Holdings are also rated 'BB/RR1'. The notes have a second lien on all domestic inventory and credit card receivables, essentially representing the same collateral package that backs the $3.275 billion credit facility on a first-lien basis. While Fitch has not made a distinction between the first- and second-lien notes at this point given the significant collateral backing the notes and facility, it could do so in the future should Sears decide to exercise the accordion feature under the credit facility and/or the assets serving as collateral decline materially. The notes contain provisions which require Holdings to maintain minimum asset coverage for total secured debt (failing which the company has to offer to buy notes sufficient to cure the deficiency at 101%). The senior unsecured notes are rated 'B/RR4', indicating average recovery prospects (31%-50%). While the credit facility and second-lien notes are over-collateralized currently and the spillover could provide better than average recovery prospects for the unsecured bonds, factors considered in assigning the recovery rates include the potential sizable claims under lease obligations; the company's underfunded pension plan; the ability to add additional secured indebtedness; and the potential overestimation of recovery value assigned to owned PP&E under a liquidation scenario. The 31%-50% range would be in line with or better than the average recoveries in the retail sector for defaulted unsecured bonds, which have generally been in the 25%- 40% range over the last 10 years. The SRAC senior notes are guaranteed by Sears, which agrees to maintain SRAC's fixed charge overage at a minimum of 1.1x. In addition, Sears DC Corp. (SDC) benefits from an agreement by Sears to maintain a minimum fixed- charge coverage at SDC of 1.005x. Sears also agrees to maintain an ownership of and a positive net worth at SDC. Fitch has taken these rating actions: Sears Holdings Corporation (Holdings) -- Long-term IDR downgraded to 'B' from 'B+'; -- Secured bank facility downgraded to 'BB/RR1' from 'BB+/RR1'; -- Second-lien secured notes downgraded to 'BB/RR1' from 'BB+/RR1'. Sears, Roebuck and Co. (Sears) -- Long-term IDR downgraded to 'B' from 'B+'. Sears Roebuck Acceptance Corp. (SRAC) -- Long-term IDR downgraded to 'B' from 'B+'; -- Short-term IDR affirmed at 'B'; -- Commercial paper affirmed at 'B'; -- Senior unsecured notes downgraded to 'B/RR4' from 'B+/RR4'. Sears DC Corp. (SDC) -- Long-term IDR downgraded to 'B' from 'B+'; -- Senior unsecured notes downgraded to 'B/RR4' from 'B+/RR4'. Kmart Holding Corporation (Kmart) -- Long-term IDR downgraded to 'B' from 'B+'. In addition, Fitch assigns this rating: Kmart Corporation (Kmart Corp) -- Long-term IDR at 'B'. The Rating Outlook is Negative. SECOND AVENUE: To Remain Open Through Bankruptcy ------------------------------------------------ Kevin Hervert at Kearney Hub reports that the owner of Culver's restaurant at 5010 Second Ave. said the restaurant is restructuring its debt, and that his business is improving. An order for protection has been entered under Chapter 11 of the Bankruptcy Code for Second Avenue Enterprises LLC, which does business as Culver's. Under Chapter 11, businesses reorganize their finances under court supervision. Second Avenue Enterprises LLC has $346,004 in assets and $897,514 in debts. Second Avenue Enterprises LLC aka Culver's Restaurant filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Nebraska Case No. 11-41493 on May 27, 2011. Galen E. Stehlik, Esq., at Lauritsen Law Firm, represents the Debtor. The Debtor listed assets of between $100,000 and $500,000, and debts of $500,000 and $1 million. SECURESOLUTIONS LLC: Cites Effects of 2006 Fraud for Woes --------------------------------------------------------- Dow Jones' DBR Small Cap reports that SecureSolutions LLC, a security guard company that counts Mirabilis Ventures Inc. as an equity holder, said it filed for bankruptcy protection after it was unable to rebound from losses stemming from "a fraud perpetrated upon it in 2006." SecureSolutions, LLC, filed a Chapter 11 petition (Bankr. D. Del. Case No. 11-11581) on May 23, 2011. Adam Hiller, Esq., at Hiller & Arban, LLC, in Wilmington, Delaware, serves as counsel to the Debtor. The Debtor estimated assets of up to $1 million and debts of up to $10 million as of the Chapter 11 filing. SHAMROCK-SHAMROCK: Seeks to Employ Sue Ranto as Accountant ---------------------------------------------------------- Shamrock-Shamrock Inc. seeks permission from Bankruptcy Judge Arthur B. Briskman of the United States bankruptcy Court for the Middle District of Orlando to employ Sue Ranto of Ranto Accounting and Consulting Services, Inc. as an accountant for the estate. Upon retention, this accountant will prepare Monthly Operating Reports and all other accounting matters for the applicant which may be necessary. It is estimated that the total charge for all Monthly Reports and accounting services will approximate $300-$500 per month. About Shamrock-Shamrock Daytona Beach, Florida-based Shamrock-Shamrock Inc. owns 70 parcels of Florida real property. It filed for Chapter 11 protection (Bankr. M.D. Fla. Case No. 11-07061) on May 10, 2011. Judge Arthur B. Briskman presides over the case. The Law Offices of Mickler & Mickler serves as bankruptcy counsel. The Company scheduled assets of $12,284,976 and liabilities of $17,021,201, owing on mortgages to a variety of lenders. S.H.S. RESORT: Judge Williamson Approves Restructuring Plan ----------------------------------------------------------- Demorris A. Lee at St. Petersburg Times reports that U.S. Bankruptcy Judge Michael G. Williamson has approved a debt restructuring plan that could bring the Safety Harbor Resort & Spa out of bankruptcy and clear the way for the city of Safety Harbor to buy a chunk of the resort's bayfront property for a park. According to the report, Judge Williamson reduced the resort's secured debt from $30 million to about $17.8 million, which will be repaid over a five-year period. The report says the action, said resort attorney Steve Berman, will enable his client to "re-emerge from bankruptcy with a realistic debt structure. They are going to be in a better financial situation, which is going to enable and ensure the continued viability of the resort." Judge Williamson also approved the resort's plan to sell about 15 acres of its downtown Safety Harbor property to the city. The property along the shore of Old Tampa Bay runs north from Veterans Memorial Lane at the city marina to Mullet Creek. The city is offering almost $4 million for the property, which would help pay down the resort's overall debt. The sale to the city is contingent upon an appraisal of the property, a land-use agreement and an okay from the City Commission. The appraisal of the property will have to come in close to the city's almost $4 million offer, or the court will have to reconsider the issue, the report says. The City Commission will probably take up the purchase at a July meeting. City to Buy 15 Acres Demorris A. Lee at St. Petersburg Times reports that a sandy beach with volleyball courts could be in the future for Safety Harbor residents after the City Commission decided to pursue buying up to 15 waterfront acres that wind behind the Safety Harbor Resort and Spa. According to the Times report, trying to put a close to a 2010 bankruptcy filing, the spa is selling the land that runs north from Veterans Memorial Lane at the city's marina to Mullet Creek. City manager Matthew Spoor presented to commissioners the proposal to purchase the land. The 15 acres could cost the city $3.8 million, according to the Times. About S.H.S. Resort S.H.S. Resort LLC, a company formed by Olympia Development Group, purchased the Safety Harbor Resort & Spa in Florida, in 2004 for more than $20 million. The group then spent another $20 million in renovations and remodeling. Then the economy tanked. S.H.S. Resort, LLC filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 10-25886) on Oct. 28, 2010. Steven M. Berman, Esq., and Hugo S. de Beaubien, Esq., at Shumaker, Loop & Kendrick, LLP, assist the Debtor in its restructuring effort. The Debtor scheduled $8,105,980 in assets and $31,705,109 in liabilities. SIX FLAGS: Files S-3 for Shares Distributed After Emergence ----------------------------------------------------------- Six Flags Entertainment Corporation filed a form S-3 registration statement with the Securities Exchange Commission covering common stock which could be sold by certain shareholders who purchased common stock in connection with the company's emergence from bankruptcy in 2010. The registration statement was filed solely as a result of the company's stock split and supersedes an earlier registration statement due to the increased number of shares resulting from the company's stock split. The additional shares will be issued on or about June 27, 2011 for shareholders of record on June 15, 2011. About Six Flags Six Flags Entertainment Corporation is the world's largest regional theme park company with 2010 revenue of nearly $1.0 billion and 19 parks across the United States, Mexico and Canada. Six Flags Over Texas, the company's flagship location, is celebrating its 50th anniversary season in 2011. Six Flags filed for Chapter 11 protection on June 13, 2009 (Bankr. D. Del. Lead Case No. 09-12019). Paul E. Harner, Esq., Steven T. Catlett, Esq., and Christian M. Auty, Esq., at Paul, Hastings, Janofsky & Walker LLP in Chicago, Illinois, served as the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., and L. Katherine Good, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, served as local counsel. Cadwalader Wickersham & Taft LLP, served as special counsel. Houlihan Lokey Howard & Zukin Capital Inc., served as financial advisors, while KPMG LLC served as accountants. Kurtzman Carson Consultants LLC served as claims and notice agent. As of March 31, 2009, Six Flags had $2,907,335,000 in total assets and $3,431,647,000 in total liabilities. The Court on April 29, 2010, confirmed the Modified Fourth Amended Plan of Reorganization of Six Flags Inc. and its debtor- affiliates. On April 30, the Debtors consummated their restructuring through a series of transactions contemplated by the Plan and the Plan became effective pursuant to its terms. On the Effective Date, Six Flags, Inc. changed its corporate name to "Six Flags Entertainment Corporation." SKY LOFTS: Files 2nd Amended Chapter 11 Plan -------------------------------------------- Sky Lofts LLC filed second amended versions of its proposed Chapter 11 plan of reorganization and explanatory disclosure statement. Source of funding for the Plan will be from the proceeds of a sale of the real estate owned by S&Y Enterprises, LLC and Sky Lofts to Bedford JV LLC. The sale of the real estate of those parties will be for the amount of $21 million. Secured creditor Banco Popular North America, owed $8.25 million, objected to the Debtor's disclosure statement, citing that the document does not provide adequate information. Gerald M. Jacobs, Esq., at Gerald Nocera & Ragone LLP, represents the bank. A full-text copy of the amended disclosure statement is available for free at http://bankrupt.com/misc/SKYLOFTS_2nd_Amended_DS.pdf A full-text copy of the Chapter 11 plan is available for free at http://bankrupt.com/misc/SKYLOFTS_2nd_Amended_Plan.pdf Brooklyn, New York-based Sky Lofts, LLC, owns and maintains real estate. It filed for Chapter 11 bankruptcy (Bankr. E.D.N.Y. Case No. 10-51510) on Dec. 8, 2010, Judge Elizabeth S. Stong presiding. The Law Offices of David Carlebach, Esq. -- david@carlebachlaw.com -- serves as bankruptcy counsel. The Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million. Affiliates Twin City Lofts, LLC (Bankr. E.D. N.Y. Case No. 10-50625) and S & Y Enterprises, LLC (Bankr. E.D. N.Y. Case No. 10-50623) filed separate Chapter 11 petitions on Nov. 11, 2010. SONJA MORGAN: Appeals Court Upholds $7-Mil. Ruling Against Her -------------------------------------------------------------- Pop Eater reports that Sonja Morgan has been ordered to pay $7 million after a failed movie venture. According to the Hollywood Reporter, the United States Court of Appeals has upheld the $7 million judgment against Ms. Morgan. According to the report, the ruling alleges Ms. Morgan is liable for fraudulent conduct because a potential John Travolta film, 'Fast Flash to Bang Time,' was never made. Morgan was ordered to pay Richard Rionda del Castro and his company, Hannibal Pictures, $7 million. Only $7 million owed? Lynn Cinnamon at starcasm.net reports that Sonja Morgan has recently said that she only owed $7 million and some small lawyer bills. Ms. Morgan disclosed $13 million in assets and $19.8 million in debts in schedules attached to her bankruptcy petition last year. She says she didn't know what the papers were talking about. Sonja Tremont-Morgan, cast member of Bravo's "Real Housewives of New York City", filed for Chapter 11 protection on Nov. 17, 2010 (Bankr. S.D.N.Y Case No. 10-16132). SONFISH LLC: To Close Four to Six Locations ------------------------------------------- Aisling Maki at Memphis Daily News reports that SONFISH LLC, which is in Chapter 11 bankruptcy, said it plans to shut down between four and six locations that are not profitable while continuing to operate about 15 others. Attorney Jonathan Scharff, who represents SONFISH, said the Company was hit hard by the recession and wasn't able to make each of the locations profitable. The Company is transferring employees from closed locations to the remaining locations. The Company though did not guarantee that all 363 jobs will be saved. Founded in 2009, SONFISH LLC operates Captain D's franchisees, operating 21 restaurants in Tennessee, Arkansas and Mississippi. Sonfish, LLC, filed a Chapter 11 petition (Bankr. W.D. Tenn. Case No. 11-25331) on May 26, 2011. Jonathan E. Scharff, Esq., at Harris Shelton Hanover Walsh, PLLC, in Memphis, Tennessee, serves as counsel to the Debtor. The Debtor disclosed $3,018,679 in assets and $2,559,284 in liabilities as of the Chapter 11 filing. SOUTH OF THE STADIUM: Chapter 11 Filing Delays Foreclosure ---------------------------------------------------------- Sandra Baker at Star-Telegram reports that South of the Stadium LlC, owner of the 28.5-acre Eastern Star Home site south of Cowboys Stadium in Arlington, Texas, filed for bankruptcy protection to stave off a foreclosure auction of the property. Providence Bank, based in Columbia, Mo., posted the property for foreclosure on May 16. Foreclosure auctions are held the first Tuesday of the month. According to the report, Providence Bank took over the failed Premier Bank in Jefferson City, Mo., in October. Premier Bank had loaned South of the Stadium Llc. $9.2 million in May 2007 to buy the property at 1111 E. Division St. Star-Telegram notes the property has been listed for sale for $25 million. It includes a retirement home built in 1924 by the Eastern Star organization, an affiliate of the Masonic Lodge. The property, just east of Collins Street, has been vacant since 2001. South of the Stadium I, LLC, filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 11-43278) in Fort Worth, Texas on June 6, 2011. The debtor disclosed $10 million to $50 million in assets and debts. Richard W. Ward, Esq., in Plano, Texas, serves as counsel to the Debtor. SUPER STOP: Owners of 8 Gas Stations in Chapter 11 -------------------------------------------------- Brian Bandell at South Florida Business Journal reports that Super Stop Petroleum and affiliates filed for Chapter 11 bankruptcy protection, listing a combined $24.2 million in claims -- mostly mortgages from lenders such as Branch Banking and Trust Co., Fifth Third Bank and Iberiabank. A bunch of foreclosure lawsuits brought on the bankruptcy filings. The most recent case was filed in April in Martin County by Iberiabank against Super Stop Petroleum. It concerned a $3.7 million mortgage on gas stations at 8880 Lantana Road in Lantana, 4504 S. Federal Highway in Stuart and 2011 St. Lucie Blvd. in Port St. Lucie. West Palm Beach attorney Traci Rollins represents Iberiabank in the lawsuit. Other South Florida gas stations and convenience stores involved in the bankruptcy filings are at: * 3931 S.W. 40th Ave., Pembroke Park. * 1116 Hypoloxo Road, Lantana. * 3900 Riverland Road, Fort Lauderdale. * 1403 North Ocean Drive, Hollywood. * 321 Opa Locka Blvd., Opa Locka. About Super Stop MAQ Management, Inc., and three affiliates, including Super Stop Petroleum, Inc., sought Chapter 11 protection (Bankr. S.D. Fla. Case Nos. 11-26571 to 11-26574) on June 15, 2011. David L. Merrill, Esq., and Tina M. Talarchyk, Esq., at Talarchyk Merrill, LLC, in West Palm Beach, Florida, serve as counsel to the Debtor. MAQ Management estimated assets and debts of $1 million to $10 million. Super Stop Petroleum estimated $10 million to $50 million in assets and liabilities. SOMERSET PROPERTIES: Court Enters 7th Interim Cash Coll. Order -------------------------------------------------------------- Judge Stephani W. Humrickhouse of the U.S. Bankruptcy Court for the Eastern District of North Carolina entered a seventh interim order authorizing Somerset Properties SPE, LLC, to use cash collateral in accordance with a budget, subject to a 10% line item variance. A copy of the cash collateral budget is available for free at: http://bankrupt.com/misc/SomersetProperties_CashCollBudget.pdf The interim order clarified that the Debtor is not authorized to use Cash Collateral for legal fees and expenses, management fees, or other professional fees of any kind, absent court approval. LNR Partners, LLC, the "Special Servicer" of the Loans; CSFB 2001- CP4 Bland Road, LLC and CSFB 2001-CP4 Falls of Neuse, LLC as Lenders will be allowed online viewing access to the DIP Account. The Lenders will immediately cause $241,066 of cash collateral, consisting of held funds, to be wire to DIP account pursuant to the Debtor's instructions. The Debtor will provide the Lenders information and bank records evidencing all deposits, disbursements and other activity in the DIP account. The Debtor will promptly deposit into the DIP account any other Cash Collateral in its current or future custody, possession or control, including the balance remaining its prepetition operating account. The Debtor will segregate Cash Collateral and not commingle any other funds with Cash Collateral in the DIP account. To the extent of Cash Collateral used by the Debtor, the Lenders are granted liens in all of the Debtor's postpetition leases, rents, royalties, issues, profits, revenue, income, deposits, securities, and other benefits of the Properties to the same extent, priority, and perfection as they have in collateral prepetition. Nothing in this order will prejudice, waive, impair or affect in any way (i) the Lenders' claims that they already have liens in all of the Debtor's postpetition leases, rents, royalties, issues, profits, revenue, income, deposits, securities, and other benefits of the Properties without regard to the extent of the use of Cash Collateral and (ii) the Debtor's objections to the claims and asserted liens of the Lenders and Midland Loan Services, Inc. as the master servicer of the Loans. The Debtor will allow the Lenders to inspect their asserted collateral, including the Debtor's books and records relating thereto. The Lenders are authorized and directed to continue receiving in the lockbox accounts all postpetition payments by tenants of the Properties as they did prepetition. The Debtor will dispose of no asset of the Debtor outside the ordinary course of business, except upon the Lenders' prior written consent or further order of the Court. The Debtor will maintain adequate insurance on all tangible collateral subject to the liens of the Lenders. The Debtor's use of Cash Collateral will expire or terminate on the earliest of: (i) the date the Debtor ceases operations of its business; (ii) the non-compliance or default of the Debtor with any terms and provisions of this order; or (iii) another order concerning Cash Collateral is entered, or (iv) dismissal or conversion of this chapter 11 case to chapter 7. Unless a further consent order is entered, a final hearing on the continued use of cash collateral is scheduled for June 20, 2011 at 10:30 a.m. About Somerset Properties SPE, LLC Raleigh, North Carolina-based Somerset Properties SPE, LLC, owns six office buildings in Raleigh, North Carolina. The Company filed for Chapter 11 bankruptcy protection on (Bankr. E.D.N.C. Case No. 10-09210). The Debtor proposes to hire E. Hardy Lewis and Blanchard, Miller, Lewis & Isley, P.A. as special counsel. The Company disclosed $36,496,015 in assets and $28,825,521 in liabilities as of the Chapter 11 filing. SPOT MOBILE: Incurs $1.25 Million Net Loss in April 30 Quarter -------------------------------------------------------------- Spot Mobile International Ltd. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $1.25 million on $3.00 million of revenue for the three months ended April 30, 2011, compared with a net loss of $753,019 on $4.43 million of revenue for the same period during the prior year. The Company also reported a net loss of $2.22 million on $5.87 million of revenue for the six months ended April 30, 2011, compared with a net loss of $1.07 million on $9.10 million of revenue for the same period a year ago. The Company's balance sheet at April 30, 2011, showed $2.54 million in total assets, $5.47 million in total liabilities and a $2.93 million total shareholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/IClkBi About Spot Mobile Spot Mobile, formerly Rapid Link Incorporated -- http://www.rapidlink.com/-- is a telecommunications services company which, through its wholly owned subsidiary, provides prepaid telecommunication and transaction based point of sale activation solutions through 1,000 independent retailers in the Eastern United States. The Company also provides long distance services and plans to expand its product offering to include mobile and wireless services. The Company reported a net loss of $3.56 million on $16.08 million of revenue for the year ended Oct. 31, 2010, compared with a net loss of $712,601 on $23.74 million of revenue during the prior year. The Company's balance sheet at Jan. 31, 2011, showed $3.32 million in total assets, $5.22 million in total liabilities and $1.90 million in total shareholders' deficit. STRATEGIC AMERICAN: Incurs $8.3-Mil. Net Loss in April 30 Qtr. -------------------------------------------------------------- Strategic American Oil Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $8.32 million on $1.25 million of revenue for the three months ended April 30, 2011, compared with a net loss of $1.17 million on $123,891 of revenue for the same period a year ago. The Company also reported a net loss of $9.94 million on $1.48 million of revenue for the nine months ended April 30, 2011, compared with a net loss of $4.64 million on $344,587 of revenue during the prior year. The Company's balance sheet at April 30, 2011, showed $17.51 million in total assets, $11.69 million in total liabilities and $5.82 million total stockholders' equity. A full-text copy of the Form 10-Q is available for free at: http://is.gd/eJ8TUO About Strategic American Corpus Christi, Tex.-based Strategic American Oil Corporation (OTC BB: SGCA) -- http://www.strategicamericanoil.com/-- is a growth stage oil and natural gas exploration and production company with operations in Texas, Louisiana, and Illinois. The Company's team of geologists, engineers, and executives leverage 3D seismic data and other proven exploration and production technologies to locate and produce oil and natural gas in new and underexplored areas. Going Concern As reported by the TCR on March 25, 2011, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about Strategic American Oil's ability to continue as a going concern following the Company's results for the fiscal year ended July 31, 2010. The independent auditors noted that the Company has suffered losses from operations and has a working capital deficit. In the Form 10-Q, the Company acknowledged that it had a working capital deficit of $3,362,822 and an accumulated deficit of $13,016,680 as of Jan. 31, 2011. The Company said its ability to continue as a going concern is dependent on raising additional capital to fund ongoing exploration and development and ultimately on generating future profitable operations. STRATUS MEDIA: Secures 95% Ownership of ProElite ------------------------------------------------ Stratus Media Group, Inc., has concluded its acquisition of ProElite, Inc., an entertainment and media company involved in the development, production, and promotion of mixed martial arts. Stratus now owns ninety five percent of ProElite. "This acquisition provides the resources and abilities ProElite needs in order to focus on strengthening and repositioning its world class MMA fighting platform in addition to the brand itself," stated Paul Feller, President and CEO of Stratus. "Under the new SMDI Action Sports Vertical, ProElite is launching a series of MMA events that will bring a new vitality to the business of MMA and reestablish ProElite as a leading international MMA organization." Founded in 2006, and running its first show in February 2007, ProElite quickly became one of the most visible brands in mixed martial arts globally. ProElite holds the record for highest ratings of an MMA event on a network telecast. The company maintains its ownership stakes in South Korean-based Spirit MC and British based Cage Rage. ProElite's event strategy will continue its focus in both domestic and international markets, welcoming fighters across all weight classes to prove themselves in the cage. Details of ProElite's upcoming events schedule, fight card, and management team will soon be announced. About ProElite, Inc. Based in Los Angeles, California, ProElite is a significant stake holder in Spirit MC in South Korea and U.K. based Cage Rage MMA Organization. Founded in 2006, ProElite holds the record for highest ratings for a major network telecast of an MMA event and showcases live international MMA fight events where leading and promising up-and-coming MMA Fighters compete in the ring. About Stratus Media Santa Barbara, Calif.-based Stratus Media Group, Inc., is an owner, operator and marketer of live sports and entertainment events. Subject to the availability of capital, the Company intends to aggregate a large number of complementary live sports and entertainment events across North America and internationally. As reported by the TCR on April 29, 2011, Goldman Kurland Mohidin, LLP, in Encino, California, expressed substantial doubt about Stratus Media Group's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and has negative cash flow from operations. The Company reported a net loss of $8.41 million on $40,189 of revenues for 2010, compared with a net loss of $3.40 million on $0 revenue for 2009. The Company's balance sheet at March 31, 2011, showed $5.44 million in total assets, $6.17 million in total liabilities, and $722,895 in total shareholders' equity. SUD PROPERTIES: Leland, NC Developer in Chapter 11 -------------------------------------------------- Wayne Faulkner at StarNewsOnline reported that SUD Properties is the developer of the Springstone subdivision on Lanvale Road in Leland, North Carolina. Its Chapter 11 filing lists total claims against subdivision lots, owned by Springstone Properties LLC, of $5.23 million, including more than $1.2 million on two claims by First Bank. SUD listed the value of the Springstone lots as $3.98 million. Based in Wilmington, North Carolina, SUD Properties, Inc., filed for Chapter 11 bankruptcy protection (Bankr. E.D. N.C. Case No. 11-03833) on May 17, 2011. Judge Randy D. Doub presides over the case. George M. Oliver, Esq., at Oliver & friesen, PLLC, represents the Debtor. The Debtor disclosed $2,720,267 in assets and $5,356,288 in debts. SYMBION INC: S&P Raises Corporate Credit Rating to 'B' ------------------------------------------------------ Standard & Poor's Ratings Services raised both its corporate credit rating on Nashville-based Symbion Inc. to 'B' from 'B-', and its unsecured debt rating to 'CCC+' from 'CCC', following the completion of the company's $350 million senior secured notes offering. The unsecured notes' '6' recovery rating, reflecting expectations for negligible (0% to 10%) recovery in the event of default, is unchanged. "On May 31, 2011, we assigned our 'B' issue-level rating (the same as the new corporate credit rating) to Symbion's proposed $350 million senior secured notes due 2016. The recovery rating on this debt is '4', indicating our expectation of average (30% to 50%) recovery in the event of payment default. These ratings are unchanged," S&P related. "The speculative-grade corporate credit rating on Symbion reflects the outpatient surgical facilities operator's difficult position as it contends with the effect of a weak economy on case volume, small reimbursement increases, and a large debt burden," said Standard & Poor's credit analyst Rivka Gertzulin. Although the recent refinancing improved the company's liquidity and improved its capital structure, Symbion remains highly leveraged. Liquidity is adequate. "We expect that Symbion will remain acquisitive amid sluggish organic growth," added Ms. Gertzulin. TARRAGON CORP: CB Richard Acquires 800 Madison Luxury Building -------------------------------------------------------------- Debra Hazel at ALM Media Properties LLC reports that Cushman & Wakefield said Tarragon Corp. has sold luxury rental building 800 Madison Street in Hoboken, New Jersey, to CB Richard Ellis Investors. Cushman marketed the property. According to the report, the 217-unit, fully leased apartment building, which comprises an entire city block, was completed in late 2008. C&W had been marketing the property while it was under construction, but took it off the market when Tarragon filed for Chapter 11 bankruptcy protection in 2009. Tarragon emerged from bankruptcy in 2010, and C&W again began marketing the project in August. No purchase price was disclosed. About Tarragon Corp. Based in New York City, Tarragon Corporation (NasdaqGS:TARR) -- http://www.tarragoncorp.com/-- is a leading developer of multifamily housing for rent and for sale. Tarragon's operations are concentrated in the Northeast, Florida, Texas, and Tennessee. Tarragon and its affiliates filed for Chapter 11 protection (Bankr. D. N.J. Case No. 09-10555) on Jan. 12, 2009. The Hon. Donald H. Steckroth presides over the case. Michael D. Sirota, Esq., Warren A. Usatine, Esq., and Felice R. Yudkin, Esq., at Cole Schotz Meisel Forman & Leonard, P.A. represent the Debtor as bankruptcy counsel. Tarragon's Second Amended and Restated Joint Plan of Reorganization became effective, and the Company emerged from Chapter 11 protection, in July 2010. TERRESTAR NETWORKS: Dish's $1.375-Bil. Offer to Lead Auction ------------------------------------------------------------ Judge Sean Lane of U.S. Bankruptcy Court in Manhattan approved Dish Network Corp.'s $1.375 billion stalking horse bid for TerreStar Networks Inc., along with minor changes to the auction procedures he approved last month. Other bidders have until June 27 to submit offers for the satellite company. If competing bids are made, an auction will be held on June 30 at 9 a.m. "I wish everybody good luck in the auction process," Judge Lane said, according to DBR, in approving Dish to serve as the lead bidder, Joseph Checkler, writing for Dow Jones' Daily Bankruptcy Review, reports. "The lack of objections is a reflection of this being a good event for all concerned," Judge Lane said at the hearing. If Dish loses at auction, it will be entitled to a breakup fee of $27.5 million plus $3 million in reimbursements. The minimum increase for competing offers is $25 million, meaning that any qualified bidder will be paying at least $55.5 million more for TerreStar than Dish would. According to DBR, Otterbourg, Steindler, Houston & Rosen P.C.'s David M. Posner, a lawyer for TerreStar's official committee of unsecured creditors, said he's looking forward to a "robust auction." DBR notes the recovery for creditors under Dish's bid -- or a higher bid -- would be much better than what they would have received under a prior TerreStar plan. Any purchase would need approval from the Federal Communications Commission. Bill Rochelle, the bankruptcy columnist for Bloomberg News, recounts that TerreStar had intended to sell the business to EchoStar Corp. until it became apparent there was insufficient support for the accompanying reorganization plan that had been scheduled for a confirmation hearing in March. After dropping the plan, TerreStar began scheduling the auction sale. The report notes DBSD North America Inc., a similar company, had a successful auction where the price increased from $1 billion to $1.49 billion, with first-lien creditor Dish ending up as the winning bidder. About TerreStar Corp. and TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which filed on Oct. 19, 2010. The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC's case is jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11-10612 (SHL). The seven Debtor entities who sought joint administration with TSC are TerreStar New York Inc., Motient Communications Inc., Motient Holdings Inc., Motient License Inc., Motient Services Inc., Motient Ventures Holdings Inc., and MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks -- TSN -- the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100 million to $500million in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the Committee's financial advisor. THORNBURG MORTGAGE: Trustee Investigates BofA and Countrywide ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Chapter 11 trustee for Thornburg Mortgage Inc. may know by September whether his lawsuit against Bank of America Corp. will survive. To head off an expected motion by the bank to dismiss the suit filed in late April, the trustee wants permission to investigate what he called an "elaborate corporate shell game" where the bank acquired Countrywide Home Loans Inc. and proceeded to pull out valuable assets, leaving behind "moribund companies that have no operations or assets." Mr. Rochelle relates that the suit from April is based on Thornburg's purchase of residential home loans from Countrywide under agreements containing warranties about the quality of the loans. The trustee believes the warranties were violated on many of the loans. The lawsuit seeks unspecified damages for Countrywide's refusal to repurchase the loans as the loan-purchase agreement allegedly requires. The Thornburg trustee named Bank of America as a defendant under a theory of successor liability, given how the bank acquired Countrywide in mid-2008. The trustee said in a bankruptcy court filing he expects Bank of America will file a motion to dismiss, contending Countrywide alone is liable for any damages. The bank's motion to dismiss is due for filing by July 1. The trustee can answer on Aug. 5, under a previously agreed-upon schedule. Bank of American will file its final papers Aug. 31. Mr. Rochelle discloses that in the meantime, the Thornburg trustee wants permission to take discovery from Bank of America and find out exactly what happened with Countrywide's assets. The trustee says the public record is incomplete in that regard. About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- was a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originated, acquired, and retained investments in adjustable and variable rate mortgage assets. Its ARM assets comprised of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage and its four affiliates filed for Chapter 11 on May 1, 2009 (Bankr. D. Md. Lead Case No. 09-17787). Thornburg changed its name to TMST, Inc. Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, is tapped as counsel. Orrick, Herrington & Sutcliffe LLP is employed as special counsel. Jim Murray, and David Hilty, at Houlihan Lokey Howard & Zukin Capital, Inc., are tapped as investment banker and financial advisor. Protiviti Inc. is also engaged for financial advisory services. KPMG LLP is the tax consultant. Epiq Systems, Inc., is claims and noticing agent. Thornburg disclosed total assets of $24.4 billion and total debts of $24.7 billion, as of Jan. 31, 2009. On Oct. 28, 2009, the Court approved the appointment of Joel I. Sher as the Chapter 11 Trustee for the Company, TMST Acquisition Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging Strategies, Inc. TIMOTHY BLIXSETH: CrossHarbor Buys Yellowstone Club Compound ------------------------------------------------------------ Dow Jones' DBR Small Cap reports that Boston-based private equity firm CrossHarbor Capital Partners has bought a 160-acre property that had belonged to Tim and Edra Blixseth, founders of the exclusive Yellowstone Club in Big Sky, Mont. About Timothy Blixseth Tax officials from California, Montana and Idaho on April 5, 2011 filed an involuntary-bankruptcy petition under Chapter 7 against Timothy Blixseth in Las Vegas, Nevada (Bankr. D. Nev. Case No. 11-15010). The three states that signed the petition against the Yellowstone Club co-founder claim they are owed $2.3 million in back taxes. A copy of the petition is available for free at http://bankrupt.com/misc/nvb11-15010.pdf Mr. Blixseth and his former wife, Edra Blixseth, founded the Yellowstone Club, near Big Sky, Montana, in 2000 as a ski resort for millionaires looking for vacation homes. Members paid $205 million for 72 properties in 2005 alone. Bloomberg News, citing a court ruling by U.S. Bankruptcy Judge Ralph B. Kirscher, says the couple took cash for their personal use from a $375 million loan arranged by Credit Suisse. Finances at the club deteriorated thereafter, and the club eventually went bankrupt, Judge Kirscher found. Mr. Blixseth was ordered to pay $40 million to the club's creditors under a September ruling by Judge Kirscher. Mr. Blixseth said he's appealing that judgment. About Edra D. Blixseth Edra D. Blixseth owns the Porcupine Creek Golf Club in Rancho Mirage and the Yellowstone Club in Montana. Ms. Blixseth filed for Chapter 11 bankruptcy protection on March 26, 2009 (Bankr. D. Mont. Case No. 09-60452). Gary S. Deschenes, Esq., at Deschenes & Sullivan Law Offices assists Ms. Blixseth in her restructuring efforts. The Debtor estimated $100 million to $500 million in assets and $500 million to $1 billion in debts. The Debtor's case was converted from a Chapter 11 to a Chapter 7 by Court order entered May 29, 2009. About Yellowstone Mountain Located near Big Sky, Montana, Yellowstone Mountain Club LLC -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. The Company was founded in 1999. Yellowstone Club and its affiliates filed for Chapter 11 bankruptcy on Nov. 10, 2008 (Bankr. D. Mont. Case No. 08-61570). The Company's owner affiliate, Edra D. Blixseth, filed for Chapter 11 protection on March 27, 2009 (Case No. 09-60452). In June 2009, the Bankruptcy Court entered an order confirming Yellowstone's Chapter 11 Plan. Pursuant to the Plan, CrossHarbor Capital Partners, LLC, acquired equity ownership in the reorganized Club for $115 million. Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green PLLC represented the Debtors. The Debtors hired FTI Consulting Inc. and Ronald Greenspan as CRO. The official committee of unsecured creditors were represented by Parsons, Behle and Latimer, as counsel, and James H. Cossitt, Esq., at local counsel. Credit Suisse, the prepetition first lien lender, was represented by Skadden, Arps, Slate, Meagher & Flom. TODD BRUNNER: Real Estate Owner Filed Personal Bankruptcy Case -------------------------------------------------------------- Rich Kirchen at the Business Journal reports that Todd Brunner, a major owner of residential real estate in southeast Wisconsin, has filed for personal Chapter 11 reorganization. According to the report, Mr. Brunner, who filed jointly with his wife Sharon Brunner, disclosed liabilities between $10 million and $50 million, including a $2.2 million judgment against him by First Business Bank of Brookfield. The Brunners also disclosed assets of between $10 million and $50 million. Todd Brunner and his company, Investment Specialists of Pewaukee, own multiple residential properties in Milwaukee County, Waukesha County and Jefferson County, said banking and real estate industry sources. The report says First Business Bank won a $2.2 million judgment against Todd Brunner in March from a lawsuit the bank filed in November 2010. First Business Bank in January filed a separate mortgage foreclosure suit against Brunner, Investment Specialists of Pewaukee and several other parties. The bank in April won a $2.3 million judgment in that case in Waukesha County Circuit Court. Two other banks have filed lawsuits against Brunner and Investment Specialists, according to the report. The report relates that AnchorBank filed a debt action against Brunner and his company in April in Milwaukee County Circuit Court. AnchorBank attorney John Schroeder said the foreclosure case was pending but has been stayed by Mr. Brunner's bankruptcy filing. Cornerstone Community Bank of Grafton filed foreclosure suits against Mr. Brunner involving six properties in Waukesha County and two in Jefferson County. Bank president Paul Foy declined to comment. Todd Brunner filed for Chapter 11 bankruptcy protection (Bankr. E.D Wisc. Case No. 11-29064) on June. 5, 2011. TOM LOCHTEFELD: July 1 Hearing on Key Lease Dispute --------------------------------------------------- Debbie Hatch at Beach and Bay Press reports that Tom Lochtefeld, owner of the Wave House Athletic Club, Sound Wave and the master lease holder who operates the Plunge at Belmont Park, has found himself in a leasing stalemate with the city -- and neither side seems to have a solution to reopen the historic swimming pool built in 1925. According to the report, the Plunge has been closed since May 26 and there are no indications the pool will reopen anytime soon. Mr. Lochtefeld, who had been paying $70,000 annually since signing his lease agreement with the city in 2002, has apparently run out of rent credits and is now subject to new terms of $480,000 annually. Lochtefeld filed for Chapter 11 bankruptcy in November to force a renegotiation with the city. Beach and Bay Press says city officials have said Lochtefeld signed the 2002 lease with an understanding of the higher lease rate later, and maintain he is now trying to change the terms after the fact. On July 1, the bankruptcy case and leasing feud will go to court to determine whether the bank will take over the lease. TRANS-LUX: Board Approves Comprehensive Restructuring Package ------------------------------------------------------------- Trans-Lux Corporation TNLX disclosed a proposed complete financial restructuring and re-capitalization of the Company. Trans-Lux President and Chief Executive Officer J.M. Allain made the announcement. "For over a year now we have worked with our debt holders to create a positive and viable way forward. Over the next few weeks we will be in communication with all parties in order to seek acceptance of the proposed restructuring package in its entirety. The acceptance of the terms of the restructuring plan by our creditors would allow us to avoid a bankruptcy solution," said Mr. Allain. "Throughout this process we have continued to improve every aspect of the Company through carefully orchestrated and comprehensive initiatives including significant cuts in SG&A, a significant reduction in raw material costs, consolidation of manufacturing facilities and the recruitment of top notch senior staff," continued Mr. Allain. "The proposed restructuring will allow our new team the ability to close and deliver on new and exciting partnerships in the business, media and entertainment arenas." The Company also announced that it has raised an aggregate of $650,000 via the issuance of a 4% Promissory Note that is due and payable on June 16, 2012, which Note is secured by a mortgage on a parcel of land owned by a subsidiary of the Company located in Silver City, New Mexico. In connection with the issuance of the Note, the subscriber received a five-year warrant to purchase 1,000,000 share of Common Stock of the Company at an exercise price of $1.00, subject to adjustment as provided in the warrant. About Trans-Lux Corporation Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a designer and manufacturer of digital signage display solutions for the financial, sports and entertainment, gaming and leasing markets. Trans-Lux reported a net loss of $7.03 million on $24.30 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $8.79 million on $28.54 million of total revenues during the prior year. The Company's balance sheet at March 31, 2011, showed $31.50 million in total assets, $33.03 million in total liabilities and a $1.53 million total stockholders' deficit. As reported by the TCR on April 8, 2011, UHY LLP, in Hartford, Connecticut, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant recurring losses from continuing operations and has a significant working capital deficiency. In 2009, the Company had a loss from continuing operations of $8.8 million and has a working capital deficiency of $16.0 million as of Dec. 31, 2009. Furthermore, the Company is in default of the indenture agreements governing its outstanding 9 1/2% Subordinated debentures and its 8 1/4% Limited convertible senior subordinated notes so that the trustees or holders of 25% of the outstanding Debentures and Notes have the right to demand payment immediately. TRANSWEST RESORT: Gets Extension to Use Cash Coll. Until Sept. 1 ---------------------------------------------------------------- Judge Eileen W. Hollowell of the U.S. Bankruptcy Court for the District of Arizona entered a supplemental order authorizing certain debtor affiliates of Transwest Resort Properties, Inc.'s use of cash collateral through and including September 1, 2011. The order comes pursuant to JPMCC 2007-C1 Grasslawn Lodging LLC's motion for issuance of order to show cause requesting an order against Debtors Transwest Tucson, LLC and Transwest Hilton Head, LLC for contempt and for additional relief, including the appointment of a Chapter 11 trustee. The Court entered an order to show cause with respect to, among other things, a dispute over the amount of $600,000 of Cash Collateral at the La Paloma Debtor that the Senior Lender asserted should have been paid to it as additional adequate protection and the Debtors asserted the need to be retained for future operations due to the seasonality of the Tucson Property's business. The Disputed Payment has been held by the La Paloma Debtor and not used pending resolution of the matter by the Court at a final evidentiary hearing set for May 13, 2011. The Senior Lender and the Debtors have reached an agreement that (i) resolves all issues raised in the JPMCC Motion and Order to Show Cause, including the disposition of the Disputed Payment; (ii) provides for clarification of the Second Interim Order Authorizing Transwest Tucson and Transwest Hilton Head's Use of Cash Collateral; and (iii) modifies the Cash Collateral Order to authorized the Debtors to use cash collateral, subject to submission of a supplemental cash collateral budget, for an additional period. By the supplemental order, the Court acknowledged that the Motion for OSC is withdrawn by the Senior Lender. The combined emergency motion for interim use of cash collateral pending final hearing and emergency motion for expedited hearing and related pleadings are also deemed withdrawn by the Debtors. The evidentiary hearing scheduled on May 13, 2011 is deemed vacated. The terms of the use of cash collateral set forth in the Cash Collateral Order will be extended from May 20, 2011, to September 1, 2011, provided that the Debtors' updated Budgets for the Tucson Property and the Hilton Head Property, for the Extended Period, approved by the Senior Lender, are submitted to the Court to be incorporated as a supplement to the Cash Collateral Order by May 13, 2011. The Debtors and the Senior Lender will obtain from the Court a hearing date after August 15, 2011, as a standby hearing date for the consideration by the Court of continued use of cash collateral beyond September 1, 2011. The Debtors and the Senior Lender will report to the Court telephonically on or before August 1, 2011, whether that hearing will be contested and, if so, submit a proposed motion and briefing schedule. If the Debtors and the Senior Lender agree to an additional Supplemental Budget that authorizes use of cash collateral after September 1, 2011, the parties may submit the additional Supplemental Budget to the Court along with an additional Supplemental Order to authorize continued use of cash collateral and the Court will consider the same at the August hearing date. The Cash Collateral Order is hereby modified to include these provisions: (a) The Debtors may retain and maintain a cash reserve for each property in the amount of a minimum of $1.5 million, which need not be maintained in a segregated account. (b) Paragraph 9 of the Cash Collateral Order is replaced with this language: As additional adequate protection for the continued use of Cash Collateral, and the other benefits provided herein for the Debtors and their estates, Senior Lender will be entitled to adequate protection payments in accordance with Section 361(1) of the Bankruptcy Code. A monthly adequate protection payment in the amount of $200,000 will be made by the 15th day of each month for the immediately preceding month. An additional adequate protection payment may be made to the Lender on the 15th day of the month following the end of each calendar quarter equal to the net operating income of each Debtor for the preceding quarter determined as: cash revenue less: (i) reserves, (ii) amounts expended pursuant to the Budget, (iii) outstanding checks, (iv) amounts, if any, necessary to fund the Working Capital so that the Cash Reserve Amount is maintained during the upcoming calendar quarter, and (v) amounts, if any, necessary to fund the Disputed Payment so that the Disputed Payment is replenished. Except as expressly modified by the Supplemental Order, the terms of the Cash Collateral Order will remain unaltered and in full force and effect. The Tucson Debtors will retain the Disputed Payment as part of the Working Capital for the Tucson Property pending further Order of this Court or agreement of the Parties. The Tucson Debtor must account for the Disputed Payment at all times. To the extent that the Working Capital for a particular month is less than the Cash Reserve Amount, the Tucson Debtor may draw upon the Disputed Payment so that at all times, the Working Capital with respect to the Tucson Debtor, does not fall below the Cash Reserve Amount. The Senior Lender reserves the right to request that the Court determine that the Disputed Payment must be paid by the Debtors to the Senior Lender under the Cash Collateral Order by filing a motion on regular notice, and the Debtors reserve the right to contest the request for that relief and similarly reserve the right to seek authority of the Court to use the Disputed Payment for operating purposes. A full-text copy of the supplemental order dated May 5, 2011 is available for free at: http://bankrupt.com/misc/TranswestResort_SuppCashCollOrd.pdf About Transwest Resort Tucson, Arizona-based Transwest Resort Properties, Inc., filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 10- 37134) on Nov. 17, 2010. Kasey C. Nye, Esq., and Elizabeth S. Fella, Esq., at Quarles & Brady LLP, in Tucson, Ariz., assist the Debtor in its restructuring effort. The Debtor estimated its assets at up to $50,000 and debts at $10 million to $50 million. Affiliates Transwest Hilton Head Property, L.L.C. (Bankr. D. Ariz. Case No. 10-37170), Transwest Tucson Property, L.L.C. (Bankr. D. Ariz. Case No. 10-37160), Transwest Tucson II, L.L.C. (Bankr. D. Ariz. Case No. 10-37151), and Transwest Hilton Head II, L.L.C. (Bankr. D. Ariz. Case No. 10-37145) filed separate Chapter 11 petitions on November 17, 2010. BeachFleischman PC serves as tax preparer and advisor, accountant and auditor. Transwest Hilton Head Property estimated its assets at $10 million to $50 million and debts at $100 million to $500 million. Transwest Tucson Property estimated its assets at $50 million to $100 million and debts at $100 million to $500 million. The U.S. Trustee appointed an Official Committee of Unsecured Creditors on Dec. 15, 2010. TRICO MARINE: Has Final OK to Use Cash Collateral Until July 31 --------------------------------------------------------------- On June 10, 2011, the U.S. Bankruptcy Court for the District of Delaware granted Trico Marine Services, et al., authorization, on a final basis, to use cash collateral, through and including July 31, 2011, in accordance with a budget. As adequate protection, U.S. Bank, N.A., as indenture trustee under the Indenture dated as of May 14, 2009, on behalf of the 8.125% Noteholders, is granted (1) first priority postpetition security interest in all unencumbered assets or property of the Debtors, (2) second priority postpetition security interests in all encumbered assets of the Debtors, and (3) an allowed superpriority administrative expense claim senior to any and all other administrative claims. A copy of the Final Order is available at: http://bankrupt.com/misc/tricomarine.finalcashcollateralorder.pdf 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. The financial advisors are Evercore Partners and AP Services LLC. 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 were not 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. The Trico Supply Group -- which includes Trico Supply AS, Trico Shipping AS, DeepOcean AS, CTC Marine Projects Ltd. and other subsidiaries -- completed an out-of-court restructuring in May 2011. Pursuant to the out-of-court restructuring, $399,500,000 or 99.88%, of Trico Shipping's 11-7/8% Senior Secured Notes due 2014, the Trico Supply Group's working capital facility debt and intercompany claims and interests held by Trico Marine entities, were equitized and the holders received common stock of DeepOcean Group Holding AS, a new Norwegian private limited company. DeepOcean Holding and its subsidiaries, including Trico Supply, Trico Shipping, DeepOcean, CTC and other subsidiaries, were spun off Trico Marine. TRICO MARINE: Court to Tackle Tennenbaum Claims at July 18 Hearing ------------------------------------------------------------------ Peg Brickley, writing for Dow Jones' Daily Bankruptcy Review, reports that Judge Brendan Shannon Wednesday scheduled a July 18 hearing on a dispute between Trico Marine Services Inc. and Tennenbaum Capital Partners over the lender's guarantee claims. The Court will also consider confirmation of Trico's Chapter 11 plan of liquidation that day. According to Ms. Brickley, CEO Michael Tennenbaum said in an interview the claims grew out of the lender's loans to Trico subsidiaries, which were guaranteed by the parent company, and not paid in full. Ms. Brickley says Tennenbaum's claims, if they succeed, could add more than $26 million to the pool of unsecured debt in Trico's case. The Troubled Company Reporter, citing a prior DBR report, said June 22, 2011, that Trico argued Tennenbaum is attempting to muscle in on the slim recovery creditors are getting under the plan. According to the DBR report, Trico said Tennenbaum was completely repaid, at a "significant profit," after conducting a "scorched-earth" campaign during the Chapter 11 case. Trico said Tennenbaum pressured to "force a fire sale" of the company's fleet of supply vessels. Now it's making a last-minute grab for more cash. According to DBR, court papers indicate Tennenbaum collected as much as 20% interest on portions of its loan to Trico, receiving a total of more than $3 million interest, as well as loan fees and professional fees of $3.7 million. Tennenbaum also collected against Trico's former operating companies, which never filed for bankruptcy but worked out their debts out of court. According to Ms. Brickley, Mr. Tennenbaum said in an interview Tuesday the lender will file papers by a July 6 deadline to demonstrate its claims. 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. The financial advisors are Evercore Partners and AP Services LLC. 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 were not 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. The Trico Supply Group -- which includes Trico Supply AS, Trico Shipping AS, DeepOcean AS, CTC Marine Projects Ltd. and other subsidiaries -- completed an out-of-court restructuring in May 2011. Pursuant to the out-of-court restructuring, $399,500,000 or 99.88%, of Trico Shipping's 11-7/8% Senior Secured Notes due 2014, the Trico Supply Group's working capital facility debt and intercompany claims and interests held by Trico Marine entities, were equitized and the holders received common stock of DeepOcean Group Holding AS, a new Norwegian private limited company. DeepOcean Holding and its subsidiaries, including Trico Supply, Trico Shipping, DeepOcean, CTC and other subsidiaries, were spun off Trico Marine. TRUE NORTH: Has Disputes With Competitor, Big Law Firm ------------------------------------------------------ True North Products. Ltd., along with affiliate Source 1 Specialty Chemicals, filed for Chapter 11 bankruptcy protection. Brian Failon simultaneously filed Chapter 7, according to reporting by Michael Schwartz at Richmond BizSense. According to the report, Mr. Failon and his company filed for bankruptcy amid a two-year legal battle with a competitor and after being sued by one of Richmond's biggest law firms. True North Products and its managing director, Brian Failon, have been battling Illinois-based Compass Chemical International in Georgia courts since 2009. Among other things, Compass alleges that Failon misused trade secrets, according to the report. The filings will block the suit from moving forward for now, sparing True North and Failon from further damages from the case, which included $123,000 they must pay Compass's attorneys after the court found that Failon destroyed evidence during the trial by erasing computer hard drives. Declaring bankruptcy might also keep True North's legal counsel at bay. LeClairRyan sued just before the filing True North in Henrico County Circuit Court for $203,000 in unpaid legal expenses related to the Compass suit. BizSense relates that LeClairRyan is listed among the creditors in Failon and True North's filings. Among its debts, True North lists $2 million owed to Compass, related to damages the company could potentially have to pay depending on the outcome of the lawsuit. It also owes more than $77,000 to the Atlanta-based law firm that is representing Compass. Compass sued True North and Failon for breach of contract, breach of fiduciary duty and misappropriation of trade secrets and asked for damages and an injunction to prevent True North from continuing to benefit from the alleged actions. Lawrence Burnat, an Atlanta attorney with Schreeder, Wheeler & Flint, represents Compass. True North Products, LLC, filed a Chapter 11 petition (Bankr. E.D. Va. Case No. 11-33876) on June 12, 2011. Roy M. Terry, Jr., Esq., at Durrettecrump PLC, in Richmond, Virginia, serves as counsel. The Debtor estimated up to $50,000 in assets and liabilities of up to $10,000,000 in the Chapter 11 filing. Affiliate Source 1 Speciality Chemicals, Inc., simultaneously filed for Chapter 11 bankruptcy (Case No. 11-33875). UBRAN BRANDS: Wants Until July 20 to File Chapter 11 Plan --------------------------------------------------------- UBI Liquidating Corp., fka Urban Brands, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to extend its exclusive periods to file and solicit acceptances of a proposed chapter 11 plan until July 20, 2011, and Sept. 19, 2011, respectively. The Debtor states that the requested extension is reasonable given the significant progress in its chapter 11 case to date and its diligent efforts to wind-down remaining affairs in a prompt and efficient manner. The Debtor is pursuing an orderly wind-down of the chapter 11 case following its efforts to maximize value for creditors. About Urban Brands Urban Brands, Inc., operated as a women's specialty retailer. It sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-13005) on September 21, 2010. The Company estimated assets of $10 million to $50 million and debts of $100 million to $500 million in its Chapter 11 petition. Chun I Jang, Esq., Mark D. Collins, Esq., and Paul N. Heath, Esq., at Richards, Layton Finger, P.A., in Wilmington, Delaware, serve as counsel to the Debtors. BMC Group, Inc., is the claims and notice agent. The DIP Lender is represented by Donald E. Rothman, Esq., at Riemer & Braunstein LLP. As reported by the Troubled Company Reporter on October 29, 2010, Urban Brands received Court permission to sell its business for $16.67 million to an affiliate of Gordon Brothers Group LLC. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that Gordon Brothers told the judge it would operate at least 175 of the 210 stores. Gordon Brothers would serve as Urban Brands' agent to run going-out-of-business sales at the locations it won't buy. Mr. Rochelle said the price to be paid by Gordon Brothers is subject to downward adjustment. The ultimate price can't be less than $6 million plus the amount necessary to pay off funding for the Chapter 11 case. The Debtor has been renamed UBI Liquidating Corp., et al., following the sale. In October 2010, the U.S. Trustee appointed seven entities to the Committee of Unsecured Creditors -- Angel Made in Heaven, Inc.; Natural Collection Corp.; Signsource, Inc.; Rosenthal & Rosenthal, Inc.; GGP Limited Partnership; Simon Property Group, Inc.; and International Inspirations, Ltd. The Committee is represented by Cooley LLP as lead counsel and Loughlin Meghji + Company as financial advisor. US AIRWAYS: S&P Assigns Prelim. B Rating on Class C Certificates ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B (sf)' rating to US Airways Inc.'s series 2011-1 Class C pass- through certificates, with an expected maturity of Oct. 22, 2014. The issue is a drawdown under a Rule 415 shelf registration. Standard & Poor's will decide on the rating to assign on conclusion of a legal review of the documentation. "The preliminary 'B (sf)' rating is based on US Airways' credit quality, substantial collateral coverage by good quality aircraft, and on legal and structural protections available to the pass- through certificates," said Standard & Poor's credit analyst Betsy Snyder. "The company will use the proceeds of the offering and the 2011-1 Class A and Class B series to refinance two A321-200, two A330-200, and one A320-200 aircraft that were delivered in 2009- 2010, and four A321-200 aircraft to be delivered in September- October 2011. Each aircraft's secured notes are cross- collateralized and cross-defaulted, a provision that we believe increases the likelihood that US Airways would affirm the notes (and thus continue to pay on the certificates) in bankruptcy." The pass-through certificates benefit from legal protections afforded under Section 1110 of the federal bankruptcy code. "However, because the Class C certificates do not have a dedicated liquidity facility (as do the Class A and Class B certificates), we do not analyze them as enhanced equipment trust certificates (EETCs)," S&P said. The preliminary rating applies to a unit consisting of certificates representing the trust property and escrow receipts, initially representing interests in deposits (the proceeds of the offerings). The escrow deposits are held by a depositary bank, The Bank of New York Mellon (AA-/Stable/A-1+), pending paying off existing debt on the planes (which should be accomplished by October 2011). Amounts deposited under the escrow agreements are not property of US Airways and are not entitled to the benefits of Section 1110 of the U.S. Bankruptcy Code, and any default arising under an indenture solely by reason of the cross- default in such indenture may not be of a type required to be cured under Section 1110. Any cash collateral held as a result of the cross-collateralization of the equipment notes also would not be entitled to the benefits of Section 1110. Neither the certificates nor the escrow receipts may be separately assigned or transferred. "We believe that US Airways views these planes as important and would, given the cross-collateralization and cross-default provisions, likely affirm the aircraft notes in a bankruptcy scenario. In contrast to most EETCs issued before 2009, the cross- default would take effect immediately in a bankruptcy if US Airways rejected any of the aircraft notes. This should prevent US Airways from selectively affirming some aircraft notes and rejecting others (cherry-picking), which often harms the interests of certificateholders in a bankruptcy," S&P said. "We consider the collateral pool overall to be of good quality. The largest proportion of appraised value, about 57%, consists of A321-200's. The A321-200 is the largest version of Airbus' popular A320 narrowbody family of planes. The A321-200 has not been as successful as the A320 or smaller A319, but nonetheless is operated by 68 airlines worldwide, many more than Boeing's competing B737-900ER (although the latter is a newer model and thus has had less time to attract orders). Airbus has announced that it will offer a more fuel-efficient new-engine-option (NEO) on its narrowbody planes starting in 2016. It is too early to tell how popular this option will be, and we believe a lot will depend on how much more expensive the NEO is. If widely adopted, sale of NEO planes could depress somewhat residual values of existing- technology Airbus narrowbody planes. However, this effect is most likely for older planes in the A320 family (e.g. those delivered in the 1990's), rather than the recently delivered A321-200s and A320s in the 2011-1 collateral pool," S&P related. The second-largest proportion of aircraft securing the certificates is A330-200s, a small, long-range widebody plane. This model, which incorporates newer technology than Boeing's competing B767-300ER, has been successful, and is operated by 67 airlines worldwide. It will face more serious competition when large numbers of Boeing's long-delayed B787 are delivered. Still, it will take a while for this to occur, even if Boeing is able to make its first delivery later in 2011. The final, and smallest, proportion of value, about 8%, is represented by A320-200s. This model is Airbus' most successful plane, with a very wide user base around the world. As discussed above, Airbus will offer a new engine option on this plane in the middle of this decade. The initial loan-to-value of the Class C certificates is 85.6%, using the appraised base values and depreciation assumptions in the offering memorandum. "However, we focused on more conservative maintenance-adjusted appraised values (not disclosed in the offering memorandum). We also use more conservative depreciation assumptions for all of the planes than those in the prospectus. We assumed that, absent cyclical fluctuations, values of the A321- 200s and A330-200s would decline by 6.5% of the preceding year's value per year, and the A320-200s 6%. Using those assumptions, our initial loan-to-value is 89.7%, higher than those of most other recently-rated aircraft-backed debt. Our preliminary 'B (sf)' rating on the Class C certificates is lower than our preliminary 'BBB (sf)' rating on the Class A certificates and preliminary 'B+ (sf)' rating on the Class B certificates because of a higher loan- to-value, the fact that the Class C certificates are subordinated to the more senior certificates, and because the Class C certificates do not have a dedicated liquidity facility (which would, if needed, pay interest on certificates if a bankrupt US Airways was making insufficient payments to cover interest). Still, the Class C certificates benefit from the fact that the aircraft notes that secure all the certificates are cross- defaulted and cross-collateralized, which, we believe, increases the likelihood that US Airways would affirm the aircraft notes in bankruptcy," S&P stated. "Our ratings on US Airways reflect our view of the consolidated credit quality of parent US Airways Group Inc., which also owns America West Airlines Inc. We base the ratings on US Airways Group's substantial debt and lease burden, limited (though improving) liquidity, and participation in the high-risk U.S. airline industry. The ratings also incorporate the company's better-than-average operating costs. Tempe, Ariz.-based US Airways Group is the fifth-largest U.S. airline, carrying about 8% of industry traffic. We characterize the company's business profile as vulnerable and its financial profile as highly leveraged," S&P stated. "We expect US Airways' financial profile to remain fairly stable over the next two years, with EBITDA interest coverage 1.6x-2.0x and funds from operations (FFO)/debt in the low-teen percent area. We believe that an upgrade is not likely over the near-term, but could occur if FFO/debt moves consistently into the high-teens percent area and unrestricted cash and short-term investments increase to more than $2.5 billion. With US Airways' improved operating performance and liquidity, we also believe a downgrade is unlikely over the near term. However, if a stalled U.S. economic recovery or serious oil price spike caused sustained losses, causing liquidity to fall to below $1 billion, we could lower ratings," according to S&P. US AIRWAYS: Moody's Assigns 'B3' Rating to Class C Certificates --------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to the Class C Pass Through Certificates, Series 2011-1 of the 2011-1 Pass Through Trusts to be issued by US Airways, Inc. The subordination provisions of the inter-creditor agreement provide for the payment of interest first on the Preferred Pool Balance of the Class B Certificates and then on the Preferred Pool Balance of the Class C Certificates before payments of principal on the Class A Certificates. Amounts due under the Certificates will, in any event, be subordinated to any amounts due on either of the Class A or Class B Liquidity facilities, each of which provides for three consecutive semi-annual interest payments due the respective Certificate holders. There will be no liquidity facility for the Class C Certificates. Assignments: Issuer: US Airways, Inc. -- Senior Secured Enhanced Equipment Trust, Assigned B3 RATINGS RATIONALE The Class A, Class B and Class C Equipment Notes issued by US Airways and acquired with the proceeds of the Certificates will be the primary assets of the Pass Through Trusts. The Certificates' proceeds will refinance five currently owned Airbus aircraft; each delivered new in 2009 or 2010 and Moody's newly manufactured Airbus A321-200 aircraft to be delivered prior to December 15, 2011, with any excess proceeds held for general corporate purposes. The payment obligations of US Airways under the Notes will be fully and unconditionally guaranteed by US Airways Group, Inc. Please refer to Moody's press release dated June 21, 2011 in which Moody's assigned ratings to the A and B tranches of US Airways' Series 2011-1 Enhanced Equipment Trust Certificates for the rationale for Moody's ratings assignment. The Class C Certificates have the most junior claim against the assets of the respective Pass Through Trusts including via the cross-subordination provisions of the inter-creditor agreement. The loan to value of above 90% (based on Moody's estimate of current market value) also provides little equity cushion. Nevertheless, the B3 rating reflects the potential benefits of the security interest under a default scenario. The principal methodology used in rating US Airways Group, Inc. was the Global Passenger Airlines Industry Methodology, published March 2009 and Enhanced Equipment Trust And Equipment Trust Certificates Methodology, published December 2010. US Airways Group, Inc., based in Tempe, Arizona, through its subsidiaries operates one of the largest airlines in the U.S. with service throughout the U.S. as well as Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. USA SPRINGS: Plans to Borrow $60 Million From Malom Group --------------------------------------------------------- Bob Sanders at N.H. Business Review reports that the deal to revive USA Springs' controversial bottling plant in Nottingham and Barrington has fallen through, but the company has come up with another plan to borrow $60 million raised by a Swiss company, called the Malom Group AG. According to the report, the catch is that Malom wants $2.4 million up-front to pay for the loan's expenses. Meanwhile, USA Springs will sue the original company, Lower Falls Funding LLC, for the deposit it made on a loan that never materialized. Business Review says, meanwhile, some non-shareholding creditors could get all of their money back under a new plan -- agreed to on April 22 and filed in bankruptcy court on May 18. Previously, they would only get 84 percent of it back on the old plan. The report says the first deal to salvage the plan was proposed in April 2010 and approved by the bankruptcy court in October. It would have resulted in a five-year, $55 million loan from Lower Falls Funding LLC, which would have acquired a 20 percent stake in USA Springs, along with 6.5 percent interest with two points. But Lower Falls wanted $137,500 from the company. At first, the Committee of Unsecured Creditors said it was concerned that the creditor was a scam artist, but then withdrew its objections and put an adversary filing charging USA Springs with fraud on hold. The Malom deal would require even more money up front. Malom would underwrite a structured note, but it would be necessary for a third party to invest and deposit $2.4 million "to be used for the due diligence and associated costs for duties Malom will perform for the debtor." Malom, in turn, would refund the money plus an additional $100,000 if the transaction isn't consummated. Malom would issue its funding commitment 55 days after it gets its deposit. The note would be 420 basis points over comparable U.S. treasuries and must be paid back in five years. Malom would get a 3 percent origination fee and a 1.5 percent "success fee," not to mention the $2.4 million underwriting fee, relates the Company. Closing would be 90 days after Malom receives the underwriting deposit. Business Review adds USA Springs has until June 20 to present the plan in further detail at a hearing, or it could be removed from bankruptcy protection, allowing its major creditor Roswell Commercial Mortgage LLC, to foreclose on the property. Roswell opposed the previous plan, though in this plan the debtor would seek to pay $9.5 million plus 4.5 percent interest from January 15, 2011. As of May 26, no objection to the current plan has been filed. Malom is represented by Joseph Micelli, and the plan would be evaluated by Eric A.W. Danner of CRG Partners. Based in Nottingham, New Hampshire, USA Springs Inc. filed for Chapter 11 bankruptcy protection on June 27, 2008 (D. N.H. Case No. 08-11816). Armand M. Hyatt, Esq., at Hyatt & Flynn, PLLC, and Earl D. Munroe, Esq., at Muroe & Chew, represent the Debtor in its restructuring efforts. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee's counsel is Terrie Harman, Esq., at Harman Law Offices. In its schedules, the Debtor disclosed $127,000,335 in assets and $13,913,901 in liabilities. VALENCE TECHNOLOGY: Enters Into Amendment No.4 to Wm Sales Pact --------------------------------------------------------------- Valence Technology, Inc., entered into an Amendment No. 4 to At Market Issuance Sales Agreement with Wm Smith & Co., as sales agent, which Amendment amended the terms of that certain At Market Issuance Sales Agreement dated Feb. 22, 2008, as previously amended. The Amendment provides, among other things, that the number of shares of the Company's common stock which may be issued and sold in a series of transactions over time as the Company may direct through the Sales Agent is increased from 20,000,000 shares to 30,000,000 shares. As of June 17, 2011, the Company has sold 19,226,421 shares of its common stock under the Sales Agreement and 10,773,579 shares remain available for issuance and sale under the Sales Agreement, as modified by the Amendment. Sales of shares of the Company's common stock, if any, may be made in privately negotiated transactions or any other method permitted by law, including sales deemed to be an "at the market" offering as defined in Rule 415 under the Securities Act of 1933, which includes sales made directly on The NASDAQ Stock Market, the existing trading market for the Company's common stock, or sales made to or through a market maker other than on an exchange. The Sales Agent will make all sales on a best efforts basis using commercially reasonable efforts consistent with its normal trading and sales practices, on mutually agreed terms between the Sales Agent and the Company. Unless the Company and the Sales Agent agree to a lesser amount with respect to certain persons or classes of persons, the compensation to the Sales Agent for sales of common stock sold pursuant to the Sales Agreement will be 6.0% of the gross proceeds of the sales price per share. About Valence Technology Austin, Texas-based Valence Technology, Inc. (NASDAQ: VLNC) -- http://www.valence.com/-- is a global leader in the development of safe, long-life lithium iron magnesium phosphate energy storage solutions and provides the enabling technology behind some of the world's most innovative and environmentally friendly applications. Valence Technology has its Research & Development Center in Nevada, its Europe/Asia Pacific Sales office in Northern Ireland and global fulfillment centers in North America and Europe. The Company reported a net loss of $12.68 million on $45.88 million of revenue for the year ended March 31, 2011, compared with a net loss of $23.01 million on $16.08 million of revenue during the prior year. The Company's balance sheet at March 31, 2011, showed $36.01 million in total assets, $91.24 million in total liabilities, $8.61 million in redeemable convertible preferred stock, and a $63.83 million total stockholders' deficit. As reported by the TCR on June 3, 2011, PMB Helin Donovan, LLP, in Austin, Texas, noted that Company's recurring losses from operations, negative cash flows from operations and net stockholders' capital deficiency raise substantial doubt about its ability to continue as a going concern. VENTO FAMILY: Gets OK to Use Rental Income to Fund Bankruptcy ------------------------------------------------------------- The Vento Family Trust and Bank of Nevada have obtained from the U.S. Bankruptcy Court for the District of Nevada approval of a stipulation between the parties for use of cash collateral and for adequate protection. The stipulation and cash collateral order will be effective until July 31, 2011. The Bank has a security interest in income-producing real property owned by Debtor and pledged to the Bank as collateral securing two loans. The Bank also has a security interest in the income generated from the real property and this income constitutes its cash collateral. Under the terms of the stipulation, the Lender consents to the Debtor's use of Cash Collateral in the ordinary course of business. The Debtor agrees that it will not sell, lease, or transfer any of the Property without prior written consent of Lender or the Court. In order to provide adequate protection for the Lender, the Debtor will grant the Lender a post-petition replacement lien of cash collateral used in the same priority pre-petition, on all inventory, property, and accounts receivable of Debtor. As additional adequate protection for the use of Cash Collateral, the Debtor agrees to provide Lender with regular monthly adequate protection payments of $2,750 and $8,105 and must deliver each of the Payments to Bank of Nevada, c/o Snell & Wilmer L.L.P., Robert R. Kinas, Esq., 3883 Howard Hughes Parkway, Suite 1100, Las Vegas, Nevada 89169 throughout the term of the Cash Collateral Order. About Vento Family Based in Henderson, Nevada, Vento Family Trust filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-33909) on Dec. 27, 2010. Judge Mike K. Nakagawa presides over the case. Timothy S. Cory, Esq., at Tinoth S. Cory & Associates, represents the Debtor. The Debtor estimated both assets and debts of between $10 million and $50 million. VICTORVILLE PARTNERS: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------------- Los Angeles Newspaper Group reports that Victorville Partners LLC, 7226 Sepulveda Blvd., Suite 200, Van Nuys, filed for Chapter 11 in Los Angeles (Case No. 11-15951). VICTOR VALLEY: 2nd Amended Liquidating Plan Approved ---------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has approved the 2nd Amended Liquidating Plan of Victor Valley Community Hospital. Victor Valley, together with co-proponents the Official Committee of Unsecured Creditors, Physicians Hospital Management, LLC, and Corwin Medical Group, Inc., filed on May 20, 2011, a second amended liquidating plan of reorganization. Under the second amended liquidating plan, after the sale of substantially all of the Debtor's assets closes and the Plan become effective, all of the Debtor's remaining assets, including, but not limited to, the cash on hand on the Effective Date, which includes, but is not limited to, the net proceeds of the Sale, will be vested in the Liquidating Debtor, which is the Debtor entity as it will survive after the Effective Date. The Liquidating Debtor will lease the assets that have been purchased by the Purchasers and supervise the operation of the hospital by the Purchasers who will manage the hospital under an Interim Management and Lease Agreement under the Debtor's existing licenses until the Purchasers have obtained their own licenses. Another primary function of the Liquidating Debtor will be to finalize the Claims resolution process, to the extent possible, and to make Distributions to the Creditors holding Allowed Claims as provided in the Plan. When the Liquidating Debtor ceases to exist, which will be when the Purchasers obtain the necessary licenses to operate the Hospital and the Interim Management and Lease Agreement terminates, a Liquidating Trust will be formed and all of the assets then held by the Liquidating Debtor will be transferred to the Liquidating Trust, for the benefit of all Creditors of the Debtor's Estate. The Liquidating Trust will, to the extent not completed by the Liquidating Debtor, complete the Claims resolution process and make any remaining Distributions to Creditors holding Allowed Claims. After payment of all creditors entitled to payment under the Plan, the Liquidating Trust will distribute any remaining assets as directed by the Attorney General of the State of California. The Claims against the Debtor are divided into (1) unclassified Claims, which are (i)Administrative Claims, (ii) Priority Tax Claims and (iii) Cure Claims, and (2) Classes of Claims, which are (i) Class 1 Secured Claims, (ii) Class 2 Priority Non-Tax Claims (which includes Priority Claims of employees of the Debtor for accrued and unused PTO), (iii) Class 3 General Unsecured Claims and (iv) Class 4 Subordinated Unsecured Claims, which is comprised of the General Unsecured Claims of PHM and Corwin. The Liquidating Debtor or the Liquidating Trustee, as the case may be, will pay all persons and entities holding Administrative Claims 100% of the allowed amount of such Claims, plus interest, fees and costs on the Effective Date or when the Claim becomes an Allowed Claim, whichever is later. All Claims, except the Secured Claims of PHM and Corwin and the Subordinated Unsecured Claims, also claims of PHM and Corwin, are unimpaired by the Plan. Holders of unimpaired claims are deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code and do not vote on the Plan. Holders of unimpaired claims may, however, file an objection to the Plan, to the extent any objection is deemed appropriate. The Secured Claims of PHM and Corwin and the Subordinated Unsecured Claims of PHM and Corwin will also be paid in full with interest but the payment will be over time. The Secured Claims Subordinated Unsecured Claims of PHM and Corwin are impaired under the Plan. PHM and Corwin are, therefore, allowed to vote on the Plan and will receive Ballots. About Victor Valley Community Hospital Victor Valley Community Hospital -- http://www.vvch.org/-- operates a 101 acute care bed facility in Victor Valley, in Southern California. Victor Valley Community Hospital filed for Chapter 11 protection on September 13, 2010 (Bankr. C.D. Calif. Case No. 10-39537 The Debtor estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. Debt includes $4.5 million owed to the bank lender. Unsecured creditors are owed $16.5 million. Mary D. Lane, Esq., Samuel R. Maizel, Esq., and Scotta E. McFarland, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, represent the Debtor as counsel. VILICA LLC: Court Approves Coldwell Banker as Real Estate Broker ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California authorized Vilica LLC to employ Coldwell Banker Cutten Realty as real estate broker. According to the May 24, 2011 edition of the Troubled Company Reporter, Coldwell Banker will represent the Debtor in the sale of the Debtor's various parcels of real properties located in Trinity County, California. The general terms of the agreement between the Debtor and the proposed real estate broker with regard to the real property are: a. The sales price of the real property located in the city of Willow Creek, county of Humboldt, Brush Mountain G-1, APN No. 524-016-007 will be $400,000.00; b. The sales price of the real property located in the city of Willow Creek, county of Humboldt, Madden Creek: G-2, APN No. p.o. 524-122-001 SW 1/4 will be $250,000.00; c. The sales price of the real property located in the city of Willow Creek, county of Humboldt, Madden Creek: G-3, APN No. p.o. 524-122-001 SE 1/4 will be $250,000.00; d. The sales price of the real property located in the city of Willow Creek, county of Humboldt, Madden Creek: G-4, APN No. p.o. 524-122-001 NE 1/4 will be $250,000.00; e. The sales price of the real property located in the city of Redwood Valley, county of Humboldt, Pine Creek: H-2, APN No. 522-012-001 will be $320,000.00; f. The sales price of the real property located in the city of Redwood Valley, county of Humboldt, Pine Creek: H-3, APN No. 522-012-002 will be $450,000.00; g. The sales price of the of real property located in the city of Weitchpec, county of Humboldt, Bald Hills Rd: N, APN Nos. 531-011-007 & 531-012-005 will be $240,000.00; h. The compensation sought by the proposed real estate broker with regard to all of these real properties is equal to 6% of the gross sales price; and i. Any sale of the property and/or payment of commission is subject to approval by the United States Bankruptcy Court. The Debtor assured the Court that Charlie Tripodi, real estate agent, and said real estate firm are a "disinterested persons" within the meaning of Section 101(14) of the Bankruptcy Code. About Vilica, LLC Santa Cruz, California-based Vilica, LLC, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 10-62728) on Dec. 13, 2010. Stephen T. Davies, Esq., at Turner Litigation Services, serves as the Debtor's bankruptcy counsel. According to its schedules, the Debtor disclosed $12,757,273 in total assets and $4,245,843 in total debts at the Petition Date. VILICA LLC: Court Approves Weaverville as Real Estate Broker ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of California authorized Vilica LLC to employ Weaverville Realty as real estate broker. According to the Troubled Company Reporter on May 24, 2011, Weaverville Realty will represent the Debtor in the sale of the Debtor's various parcels of real properties located in Trinity County, California. The general terms of the agreement between the Debtor and the proposed real estate broker with regard to the real property are: a. The sales price of the real property located in the city of Coffee Creek, county of Trinity, Bonanza Mine, portion of APN No. 007-170-03 will be $234,000.00; b. The sales price of the real property located in the city of Coffee Creek, county of Trinity, Cold Spring Mine, APN No. 997-170-01 will be $171,820.00; c. The sales price of the real property located in the city of Coffee Creek, county of Trinity, Log Cabin Mine, portion of APN No. 007-170-03 will be $187,950.00; d. The sales price of the real property located in the city of Coffee Creek, county of Trinity, Red Rock Mine, APN No. 007-170-02 will be $224,290.00; e. The sales price of the real property located in the city of Coffee Creek, county of Trinity, Sunrise Mine, portion of APN No. 007-170-03 will be $190,700.00; f. The sales price of the real property located in the city of Coffee Creek, county of Trinity, portion of APN No. 007-170-03 will be $199,000.00; g. The compensation sought by the proposed real estate broker with regard to all of the real properties is equal to 8% of the gross sales price; and h. Any sale of the property and/or payment of commission is subject to approval by the United States Bankruptcy Court. The Debtor assured the Court that Steve Hanover, real estate agent, and said real estate firm are a "disinterested persons" within the meaning of Section 101(14) of the Bankruptcy Code. About Vilica, LLC Santa Cruz, California-based Vilica, LLC, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 10-62728) on Dec. 13, 2010. Stephen T. Davies, Esq., at Turner Litigation Services, serves as the Debtor's bankruptcy counsel. According to its schedules, the Debtor disclosed $12,757,273 in total assets and $4,245,843 in total debts at the Petition Date. W&K STEEL: Judge Orders Chapter 7 Liquidation --------------------------------------------- Joe Napsha at Pittsburgh Tribune-Review reports that Bankruptcy Court Judge Judith Fitzgerald said W&K Steel LLC of Rankin is in poor condition it should be liquidated rather than continue operating under bankruptcy protection. "From everything I see, it does not seem there is a feasible plan for reorganization," the report quotes Judge Fitzgerald as saying. According to the report, W&K Steel and its sister company, W&K Erection LLC, intended to reorganize when it filed a Chapter 11 bankruptcy on May 26, but the companies are "dormant," have no access to cash and laid off their workers, said attorney Robert Lampl. Prior to the bankruptcy, the companies had about 35 employees. The Company was placed into receivership May 18. The top secured creditors are Meridian Group, which serves as the court-appointed receiver; and Huntington Bank, which had filed an earlier complaint in the Allegheny County Court of Common Pleas. Based in Rankin, Pennsylvania, W&K Steel LLC filed for Chapter 11 bankruptcy protection (Bankr. W.D. Penn. Case No. 11-23355) on May 26, 2011. Kevin J. McKeon, Esq., at Watt, Tieder, Hoffar & Fitzgerald LLP, represents the Debtor. The Debtor estimated assets of between $500,000 and $1 million, and debts of between $1 million and $10 million. WAGSTAFF MINNESOTA: Committee Taps Freeborn & Peters as Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Wagstaff Minnesota Inc. and its debtor-affiliates asks the U.S. Bankruptcy Court for the District of Minnesota for permission to retain Freeborn & Peters LLP as its counsel. Among other things, the firm will: a) advise the Committee on all legal issues as they arise; b) represent and advise the Committee regarding the terms of any sales of assets or plans of reorganization or liquidation, and assisting the Committee in negotiations with the Debtors and other parties; c) investigate the Debtors' assets and pre-bankruptcy conduct; d) analyze the conduct and the perfection and priority of the liens of the Debtors' secured creditors; and e) prepare, on behalf of the Committee, all necessary pleadings, reports, and other papers. The current hourly rates charged by the firm for professionals and paraprofessionals: Richard S. Lauter, Esq. Partner $575 Thomas R. Fawkes, Esq. Partner $495 Michael A. Brandess, Esq. Associate $250 Associates $250 Senior Partners $735 Paraprofessionals $205-$250 The Committee assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Hanford, California-based Wagstaff Properties LLC and its debtor- affiliates filed for Chapter 11 protection (Bankr. D. Minn. Case No. 11-43074) on April 30, 2011. The cases are jointly administered with Wagstaff Minnesota Inc. (Bankr. Case No. 11-43073). Bankruptcy Judge Nancy C. Dreher presides the case. Fredrikson & Byron, PA, and Peitzman Weg & Kempinsky LLP represent the Debtor in their restructuring efforts. The debtors estimated assets and liabilities at $10 million to $50 million. Habbo G. Fokkena, the United States Trustee for Region 12, appointed three creditors to serve on an Official Committee of Unsecured Creditors of Wagstaff Minnesota Inc and its debtor- affiliates. WASHINGTON MUTUAL: Investors Renew Fight For Insider Trading Docs ----------------------------------------------------------------- Rachel Slajda at Bankruptcy Law360 reports that a group of Washington Mutual Inc. investors asked a Delaware bankruptcy court Monday to force four hedge funds to cough up documents related to allegations that the funds traded on nonpublic information they gleaned during bankruptcy negotiations. According to Law360, the investors, known as trust preferred holders in the bankruptcy, sought to force documents out of the funds -- Owl Creek Asset Management LP, Appaloosa Management LP, Centerbridge Partners LP and Aurelius Capital Management LP -- as part of an on-and-off investigation into insider trading allegations. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. On Jan. 7, 2011, the U.S. Bankruptcy Court for the District of Delaware entered a 107-page opinion determining that the global settlement agreement, among certain parties including WMI, the Federal Deposit Insurance Corporation and JPMorgan Chase Bank, N.A., upon which the Plan is premised, and the transactions contemplated therein, are fair, reasonable, and in the best interests of WMI. Additionally, the Opinion and related order denied confirmation, but suggested certain modifications to the Company's Sixth Amended Joint Plan of Affiliated Debtors that, if made, would facilitate confirmation. Washington Mutual has filed with the Bankruptcy Court a Modified Sixth Amended Joint Plan and a related Supplemental Disclosure Statement. The Company believes that the Modified Plan has addressed the Bankruptcy Court's concerns and looks forward to returning to the Bankruptcy Court to seek confirmation of the Modified Plan. WASHINGTON MUTUAL: Noteholders Group Object to Sixth Amended Plan ----------------------------------------------------------------- The Washington Mutual, Inc., Noteholders Group, whose members hold approximately $2 billion of outstanding debt securities issued by Washington Mutual, Inc., submits a limited objection to the Sixth Amended Joint Plan of the Debtors. According to Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, in Wilmington, Del., the WMI Noteholders submitted a limited objection in accordance with the Plan's proviso that any disagreement with the priorities or distributions set forth in the Debtors' proposed "waterfall" distribution scheme shall be raised prior to, and decided at, the Confirmation Hearing. Mr. Schlerf argues that this waterfall distribution scheme fails to properly account for the contractual subordination arrangements among the various creditor constituencies in a number of significant ways. Under the applicable subordination agreement, holders of Senior Subordinated Notes are not entitled to receive any distribution until holders of Senior Notes are paid in full, including payment of post-petition interest. The Subordinated Indenture plainly states that Senior Subordinated Notes may not receive any distributions of any kind until Senior Notes "have been paid and satisfied in full." While the Debtors may argue that the subordination language does not satisfy the so-called "Rule of Explicitness," Mr. Schlerf says that doctrine has been struck down as a result of the enactment of the Bankruptcy Code. Under the applicable New York principles of contract interpretation, the term "paid and satisfied in full," when viewed in the full context of the indenture, was plainly intended to include payment of postpetition interest. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- is a holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. On Jan. 7, 2011, the U.S. Bankruptcy Court for the District of Delaware entered a 107-page opinion determining that the global settlement agreement, among certain parties including WMI, the Federal Deposit Insurance Corporation and JPMorgan Chase Bank, N.A., upon which the Plan is premised, and the transactions contemplated therein, are fair, reasonable, and in the best interests of WMI. Additionally, the Opinion and related order denied confirmation, but suggested certain modifications to the Company's Sixth Amended Joint Plan of Affiliated Debtors that, if made, would facilitate confirmation. Washington Mutual has filed with the Bankruptcy Court a Modified Sixth Amended Joint Plan and a related Supplemental Disclosure Statement. The Company believes that the Modified Plan has addressed the Bankruptcy Court's concerns and looks forward to returning to the Bankruptcy Court to seek confirmation of the Modified Plan. WCK INC: Files List of Largest Unsecured Creditors -------------------------------------------------- WCK, Inc., filed with the U.S. Bankruptcy Court for the Central District of California a list of its largest unsecured creditors, disclosing: Name of Creditor Nature of Claim Amount of Claim ---------------- --------------- --------------- City of Fresno Occupancy Tax $500,000 P.O. Box 45017 Fresno, CA 93718 Fresno County Property Tax $480,000 2281 Tulare St. Fresno, CA 93721 EDD Payroll Tax $360,000 P.O. Box. 826880 MIC 83 Sacramento, CA 94280 Service Tec Machinery $23,000 Maintenance WCK, Inc., dba Four Points by Sheraton, in Diamond Bar, California, filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-28047) on April 26, 2011. Judge Peter Carroll presides over the case. John Eom, Esq., at Wilshire One Law Group, serves as bankruptcy counsel. The Debtor disclosed $17,260,570 in assets and $17,099,000 in liabilities as of the Chapter 11 filing. WESTRIM INC: Die Cuts Purchases Assets & IP Property of Blue Moon ----------------------------------------------------------------- Nancy Nally at Scrapbook Update reports that Die Cuts With A View have acquired the assets and intellectual property of the Blue Moon Beads brand from Westrim, Inc. According to the report, bankruptcy paperwork filed by Westrim on April 29 indicates the sale of Blue Moon's assets to DCWV was already in progress at that time, and that completing the transaction was necessary to prevent the company filing for a Chapter 7 bankruptcy. Scrapbook Update reports that court filings say the Chapter 11 filing was necessary even with the impending sale to create time for the transaction to occur, and for creating a clear title to Blue Moon for completing its sale to DCWV. The company apparently plans to use the proceeds from the sale of Blue Moon to essentially liquidate itself out-of-court and reimburse its creditors and shareholders. Van Nuys, California-based Westrim, Inc., doing business as Westrim Crafts, produces products such as beading for costume jewelry and scrapbooking and album kits that's been sold by Walmart and Jo-Ann Fabric and Craft Stores. It filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 11-15313) in San Fernando Valley, California on April 29, 2011. Alexis M. McGinness, Esq., and David M. Poitras, Esq., at Jeffer Mangels Butler & Mitchell LLP, in Los Angeles, serve as counsel to the Debtor. The Debtor estimated assets of up to $10 million and debts between $10 million and $50 million as of the Chapter 11 filing. A case summary for Westrim Inc. is in the May 3, 2011 edition of the Troubled Company Reporter. WORLDGATE COMMUNICATIONS: J. Calarco Resigns as Controller & VP --------------------------------------------------------------- Joseph Calarco tendered his resignation as Controller and Vice President, Finance of WorldGate Communications, Inc., effective June 24, 2011. The Company has continued to reduce its expenses, including voluntary and involuntary reductions in its workforce, as it continues to explore strategic alternatives. Following the resignation of Mr. Calarco effective on June 24, 2011, the Company's workforce will have been reduced to 5 employees and one temporary employee. About WorldGate Trevose, PA, WorldGate Communications, Inc. (OTC BB: WGAT.OB) designs and develops innovative digital video phones featuring high quality, real-time, two-way video. The Company's balance sheet at March 31, 2011, showed $9.7 million in total assets, $15.9 million in total liabilities, and a stockholders' deficit of $6.2 million. As reported in the TCR on April 12, 2011, Marcum LLP, in New York, expressed substantial doubt about WorldGate Communications' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that of the Company's recurring losses from operations, working capital deficiencies and stockholders' deficit. Z TRIM HOLDINGS: Inks 3-Year Agreement with Dept. of Agriculture ---------------------------------------------------------------- Z Trim Holdings, Inc., entered into a 3-year agreement with the United States Department of Agriculture to conduct joint research for the development of additional products and processes relating to its current patented products. "We are thrilled to be working with the USDA-ARS," said Steve Cohen, Z Trim CEO. "The USDA-ARS team brings unparalleled expertise in our field, and with their help, we expect to find new, commercially viable products that will enhance our brand and further grow our business." About Z Trim Mundelein, Ill.-based Z Trim Holdings, Inc., is a functional food ingredient company which provides custom product solutions that help answer the food industry's problems. Z Trim's revolutionary technology provides value-added ingredients across virtually all food industry categories. Z Trim's all-natural products, among other things, help to reduce fat and calories, add fiber, provide shelf-stability, prevent oil migration, and add binding capacity -- all without degrading the taste and texture of the final food products. The Company reported a net loss of $10.91 million on $903,780 in total revenues for the year ended Dec. 31, 2010, compared with a net loss of $12.21 million on $559,910 of revenue during the prior year. The Company's balance sheet at March 31, 2011, showed $7.77 million in total assets, $19.12 million in total liabilities, $783,259 in total commitments and contingencies, and a $12.13 million total stockholders' deficit. As reported in the Troubled Company Reporter on April 12, 2010, M&K, CPAs, PLLC, in Houston, expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted that the Company has suffered recurring losses from operations and requires additional financing to continue in operation. The Company said that for the year ended Dec. 31, 2009, it did not have enough cash on hand to meet its current liabilities or to fund on-going operations beyond one year. As a result, the report of independent registered public accounting firm included an explanatory paragraph in respect to the substantial doubt of the Company's ability to continue as a going concern. The Company's cash on hand as of Dec. 31, 2010 is $2,327,013. Since June 2010, the Company brought in $8,170,988 in funds through the sale of Preferred Stock, and our investors converted approximately $8,100,000 of convertible debt into common stock. In addition to the fundraising efforts, the Company intends to make capital expenditures necessary to increase its capacity and to reduce its cost per pound. Due to the expected increase in production capacity, the Company anticipates its sales for fiscal year ended Dec. 31, 2011 will approximately double those of fiscal year ended Dec. 31, 2010. Although the Company has recurring operating losses and negative cash flows from operating activities, the Company has positive working capital and believe it has enough cash on hand to satisfy current obligations. If the Company is unsuccessful in its plans to increase revenue and capacity, the impact may have a material impairment on its ability to continue as a going concern. ZOEY ESTATES: Files List of Largest Unsecured Creditors ------------------------------------------------------- Zoey Estates, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Texas a list of its largest unsecured creditors, disclosing: Name of Creditor Amount of Claim ---------------- --------------- Lake Valhalla Estates, LLC $1,181,620 118 N. Clinton St., No. LL366 Chicago, IL 60661 PRM Realty Group, LLC $233,697 M-3, LLC $64,000 Chicago, Illinois-based Zoey Estates, LLC, c/o PRM Realty Group, LLC, filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No. 11-33116) on May 5, 2011. John Mark Chevallier, Esq., at McGuire, Craddock & Strother, P.C., serves as bankruptcy counsel. The Debtor listed $2,400,000 in assets and $34,281,581 in liabilities as of the Chapter 11 filing. * Court Decision Maintains Limits on Specialty Court Authority -------------------------------------------------------------- The Washington Legal Foundation applauds the U.S. Supreme Court's recent ruling in the case, Stern v. Marshall (previously Marshall vs. Marshall). The opinion, which clarifies the constitutional intent to limit the authority of specialty bankruptcy courts, will serve to curtail plaintiffs from unnecessarily exploiting the legal system through forum shopping. Richard Samp, Chief Counsel, Litigation Division, Washington Legal Foundation. Washington Legal Foundation is available to the media to discuss the implications of this case. A copy of the amicus brief filed by the Washington Legal Foundation in support of the Respondent, the Marshall estate, is available for review. If you would like more detail on the Washington Legal Foundation's position on this opinion, please contact Richard Samp to schedule an interview. * 10th Circuit Sides With 9th on Supreme Court Question ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that on an issue to be decided next year by the U.S. Supreme Court, the U.S. Court of Appeals in Denver lined up with the federal appeals court in San Francisco. The 10th Circuit in Denver ruled on June 21 that sales of property by a family farmer during a Chapter 12 case result in priority gains taxes that must be paid in full as a condition to confirming a reorganization plan. The U.S. Court of Appeals in St. Louis ruled the other way, concluding that tax liabilities from a post-petition sale give rise to general unsecured claims. The case is U.S. v. Dawes (In re Dawes), 09-3129, U.S. 10th Circuit Court of Appeals (Denver). * JPMorgan, RBS Units Sued Over $800M in Risky MBS -------------------------------------------------- Ian Thoms at Bankruptcy Law360 reports that U.S. regulators sued JPMorgan Chase & Co. and Royal Bank of Scotland PLC units in Kansas on Monday, seeking to recover more than $800 million that the banks generated by selling risky mortgage-backed securities to now-failed credit unions. Law360 relates that the National Credit Union Administration filed separate complaints against J.P. Morgan Securities LLC and RBS Securities Inc., accusing both of misrepresenting their residential mortgage-backed securities as safe, when in fact they were dicey investments dependent on loans that "were all but certain to become delinquent or default shortly." * State to Take Charge of Turning Around Detroit's Worst Schools ---------------------------------------------------------------- Dow Jones' DBR Small Cap reports that the worst-performing public schools in Detroit will be removed from the city's school system and run by a new state authority charged with turning them around within five years. * Bridgewater Associates Launches Largest New Hedge Fund -------------------------------------------------------- Chapter11Cases.com reports that Bridgewater Associates, the world's biggest hedge fund, just got bigger with the launch of one of the largest new funds. * Kramer Levin Named Law Firm of the Year by ACG/M&A Advisor ------------------------------------------------------------ Kramer Levin Naftalis & Frankel was named Law Firm of the Year at the Association for Corporate Growth's Champion's Awards Gala on Monday at Sotheby's New York. The awards honor outstanding achievements in the middle market M&A industry in the New York Region. The awards are a collaboration of The M&A Advisor and ACG, an association in New York City representing 900 middle market deal- making professionals. An independent body of experts, who represent a cross-section of the middle market industry, picked the winners in 25 categories from a broad field of nominees. Kramer Levin's Mergers and Acquisitions Practice represents buyers and sellers from all over the world with a particular focus on the middle market. The firm's current M&A transaction mix includes strategic, distressed and private equity deals. The group was also recently recognized by Legal 500 U.S. 2011, which ranked Kramer Levin in the top tier for middle market mergers, acquisitions and buyouts. Recent notable representations for the firm include the representation of RiskMetrics Group in its acquisition by MSCI; advising Genco Shipping & Trading in its acquisition of assets of Bourbon-Setaf; the representation of Stone Point Capital in its formation of NXT Capital; the representation of Alloy - originators of Gossip Girl and The Vampire Diaries - in its acquisition by an investor group led by Zelnick Media; the representation of Perella Weinberg Partners in its acquisition of AIG Rail Services; and M&A transactional work related to the representation of the Official Unsecured Creditors Committee in the Chrysler bankruptcy. Kramer Levin Naftalis & Frankel LLP -- http://www.kramerlevin.com -- is a premier, full-service law firm with offices in New York and Paris. Firm lawyers are leading practitioners in their respective fields, who understand their clients' businesses, demonstrate a strong focus on client service and offer innovative and practical solutions. The firm represents Global 1000 and emerging growth companies, institutions and individuals, across a broad range of industries. * BOOK REVIEW: Courts and Doctors --------------------------------- Author: Lloyd Paul Stryker Publisher: Beard Books Softcover: 261 pages Price: $34.95 Review by Henry Berry Beginning in the 1930s, medical malpractice lawsuits in New York State began climbing. In 1930, there were 256 lawsuits more than there were the year before, a rise of thirty-three percent. This equated to one lawsuit for every 22 members of the 12,500 members of the Medical Society of the State of New York. During these years, Lloyd Stryker, as the Medical Society's general counsel, was responsible for advising its members on how to defend themselves against medical malpractice lawsuits. He also acted as the lead counsel for many physician members caught up in the rising tide of lawsuits. Courts and Doctors was written by the author for the Society's members as he approached retirement. The Society asked Stryker to make his accumulated knowledge, experience, and observations on courtroom procedures in medical malpractice lawsuits available to educate present and future members. His work then found a much wider audience when it was published by Macmillan in 1932. The basics of a medical malpractice suit have not changed much since that time. Thus, Stryker's work is still relevant in explaining how a medical malpractice case is handled by the judicial system. Courts and Doctors also offers an appendix of legal cases and indexes with innumerable legal references. These cases and references remain instructive and relevant too. Stryker wrote Courts and Doctors with the intention that "the medical profession may come to a better understanding of the courts and of the problems with which judges wrestle." However, the author also hoped that judges would read his book and develop "an even greater sympathy and understanding [of] the difficulties of the doctor" when engaging in his or her profession. New York State's definition of a doctor offers an explanation of why medical malpractice cases are frequently brought against doctors. The definition -- seven lines long -- reads, in part, "A person practices medicine . . . who holds himself out as being able to diagnose, treat, operate or prescribe for any human disease, pain, injury . . . who shall either offer or undertake by any means or method to diagnose, treat . . . for any human disease. . . or physical condition." Every state has a similarly broad definition that exposes a doctor to liability on many fronts. The author further notes that physicians perform their services under conditions determined to a large extent by the state. In New York State, "[t]he doctor is . . . a quasi public servant in that he is licensed to practice; and . . . the State exercises certain privileges and determines in a large measure the conditions under which the physician shall practice." Although medical law has remained largely unchanged, the prospect of a malpractice lawsuit is higher than ever. At the time of this book's writing, doctors were subject to a modest number of laws that prohibited the use of narcotics in the practice of medicine. Today's doctors are subject to infinitely more laws and extensive regulatory oversight governing the dispensation of medications and other treatments. Also, most physicians practicing today have more staff under their supervision. This, too, raises the stakes for those who choose to practice medicine. Physicians looking to navigate their way through today's legal minefields will find Stryker's book to be an excellent guide. The author offers 11 precautionary measures doctors can follow to minimize the possibility of a malpractice lawsuit and improve considerably their chances of successfully countering a lawsuit if one should be brought against them. Stryker advises giving realistic thought to becoming involved with certain medical conditions or treatments in the first place. For example, he tells doctors to "inquire honestly of yourself whether you are in fact competent to treat or operate for the particular malady which confronts you." All recommendations of surgery should be fully justified. Stryker also recommends standard "instruments and appliances," careful record keeping, and keeping up with the latest developments in the medical field. An introductory chapter and brief recounting of preventive measures is followed with a thorough examination of the basic elements of a medical malpractice case. These include elements found with any civil legal action and also those particular to malpractice cases. Among the former are the statute of limitations, the grounds of the case, and standards of proof. Elements central to a medical malpractice case are expert testimony, standard of care the doctor is said by the plaintiff to have departed from, and the use of medical texts. Aside from exceptional circumstances, which are noted by the author, a plaintiff cannot recover damages in a malpractice lawsuit without the aid of expert testimony. Stryker devotes an entire chapter to this crucial aspect of medical malpractice law. Decisions in medical malpractice cases often hinge on how receptive a judge or jury is to testimony of expert witnesses. Lay persons rarely have the requisite medical knowledge to make informed decisions in these often complex cases. Thus, the witnesses in the case, whether those of the plaintiff or the defendant, have a large bearing on which side prevails. Courts and Doctors offers a useful and relevant study of medical malpractice law, leaving the reader with a good grounding in the complex legal issues of this subject. In the 1920s and 1930s, Lloyd Paul Stryker was general counsel of the Medical Society of the State of New York, one of the nation's leading medical organizations. ********* 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 ***