/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110728.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, July 28, 2011, Vol. 15, No. 207 Headlines 4KIDS ENTERTAINMENT: Gets 3-Month Plan Exclusivity Extension ALLEN FAMILY: South Korea's Harim Wins Auction for Assets ALLEN FAMILY: Harim Makes Winning Offer for Assets ALTEGRITY INC: S&P Keeps 'B', But Revises Outlook to Negative AMERICAN DIAGNOSTIC: Adequate Protection Payments Approved AMERICAN INT'L: $450 Million Settlement Gets Preliminary Approval AMTRUST FINANCIAL: Files Amended Joint Chapter 11 Plan ANTWERP DAIRY: Case Summary & 2 Largest Unsecured Creditors ARAMID ENTERTAINMENT: Files $190-Mil. Suit vs. Gerova ARCHBROOK LAGUNA: Deadline to File Schedules Today ARCHBROOK LAGUNA: Taps Akin Gump as Bankruptcy Counsel ARCHBROOK LAGUNA: Wants to Hire Macquarie as Financial Advisor ARCHBROOK LAGUNA: Taps S.J. Gawrylewski of Hawkwood as CRO ARCHBROOK LAGUNA: To Employ PwC as Accounting Consultants ARCHBROOK LAGUNA: Employs Garden City Group as Claims Agent ARK DEVEVELOPMENT: Proposes Monthly Loans from Kodsis ARK DEVELOPMENT: Disclosure Statement Hearing Set for Aug. 24 AVISTAR COMMUNICATIONS: Incurs $2.18 Million Net Loss in Q2 B&G FOODS: Revolving Credit Rated 'Ba1' by Moody's BANNING LEWIS: Ultra's $26.5-Mil. Wins Auction for Most of Ranch BARZEL INDUSTRIES: Plan Provides 11% Recovery for Unsecureds BELTWAY ONE: Final Cash Collateral Hearing on Aug. 30 BERNARD L MADOFF: UniCredit, Bank Austria Want RICO Suit Dismissed BERNARD L MADOFF: Citibank Moves to Dismiss $430 Million Suit BESO LLC: Investor Seeks Rule 2004 Examination on Longoria BOSTON SCIENTIFIC: Fitch Upgrades Issuer Default Rating From BB+ BOWE BELL: Vendor Finance Agreement Not Part of Assets Sale BUILDERS FIRSTSOURCE: Incurs $15.48 Million Net Loss in Q2 CAMTECH PRECISION: Avstar's Plan to Pay Unsecured Claims in Full CARIBBEAN PETROLEUM: Settlement Deal With U.S. Gov't Approved CATHOLIC CHURCH: Wilm. Plan Confirmation Hearing Resumes Today CATHOLIC CHURCH: Wilm. Wants Automatic Stay Extended for Parishes CATHOLIC CHURCH: Wilm. Wants Removal Period Extended Until October CATHOLIC CHURCH: Milw. Judge Sets Oct. 17 Claims Bar Date CENTRALIA OUTLETS: Court Confirms Amended Plan of Reorganization CHARBEL INVESTMENT: Case Summary & 2 Largest Unsecured Creditors CHINA TEL GROUP: Shares Issued Exceed 5% of Outstanding Shares CHURCH OF SOUTH: Senior Pastor Fights to Keep Campus Afloat COACH AMERICA: S&P Affirms 'B-', But Revises Outlook to Negative DETROIT PUBLIC SCHOOLS: Moody's Assigns 'B1' Issuer Rating DOLLAR GENERAL: Moody's Upgrades Corp. Family Rating to 'Ba2' DREIER LLP: Trustee Gets More Time to Serve Complaint DRYSHIPS INC: Sells Four Vessels for $75.5 Million ENTELOS, INC.: Case Summary & 20 Largest Unsecured Creditors EVERGREEN TANK: S&P Affirms 'B' Corporate; Outlook Now Stable FAST LANE: Case Summary & 5 Largest Unsecured Creditors FIRSTGOLD CORPORATION: Royal Gold Moves Court to Dismiss Case FIRST NATIONAL: Access to Cash Collateral Expires July 31 FLORIDA GAMING: Settles Real Property Dispute with Miami County FOGO DE CHAO: S&P Assigns Prelim. 'B' Corporate Credit Rating GARDENS OF GRAPEVINE: Court Okays Parkway as Real Estate Broker GARDENS OF GRAPEVINE: Court Approves Wright Ginsberg as Counsel GENERAL MOTORS: LoPucki Says $110MM Legal Tab "Astonishingly Low" GLAZIER GROUP: Restaurateur Buys Strip House Brand GOLD HILL: Fifth Third Renews Request to Prosecute Claims HANMI FINANCIAL: Reports $8.0 Million Net Income in Q2 HARBOUR EAST: Proposes Kramer & Assoc. to Prepare 2010 Tax Return HAYDEN-HARNETT, LLC: Case Summary & 20 Largest Unsecured Creditors HCA INC: S&P Assigns 'BB' Rating to $500-Mil. Senior Notes HEARUSA INC: Shareholders May Push for Reorganization, Not Sale HORIZON VILLAGE: Sec. 341 Creditors' Meeting Set for Aug. 18 HORIZON VILLAGE: Hiring Gordon Silver as Bankruptcy Counsel HUDSON COUNTY: Moody's Assigns Mig 1 Rating to $100.4MM Notes IRWIN MORTGAGE: Schedules and Statement Due Aug. 4 IRWIN MORTGAGE: Hiring KCC as Claims and Noticing Agent IRWIN MORTGAGE: Can Reject Fishers Building Lease IRWIN MORTGAGE: Sec. 341 Creditors' Meeting Set for Aug. 8 IRONWOOD VENTURES: Case Summary & 6 Largest Unsecured Creditors JACKSON HEWITT: Files Third Plan Supplement JEFFERSON, AL: Bondholders Asked to Forgive 1/3 of $3.14BB Debt KENTUCKIANA MEDICAL: Puts Emergency Room Plans on Hold KMC REAL ESTATE: Wants to Borrow $2,000,000 from Private Investor LEHMAN BROTHERS: Dist. Judge Sustains Claims of Ex-Shareholders LEHMAN BROTHERS: Should Reach Global Deal With Merrill, Says Panel LEHMAN BROTHERS: Wins Approval of NYSDTF Tax Agreements LEHMAN BROTHERS: LBSF Sues AmeriCredit for Breach of Swaps Deal LEHMAN BROTHERS: Wins Nod to Modified Asset Disposal Rules LEHMAN BROTHERS: Wins Nod to Expand Scope of Legal Costs Fund LEHMAN BROTHERS: Further Amends Plan for SunCal Debtors LENDER PROCESSING: S&P Affirms 'BB+' Corporate Credit Rating LOS ANGELES DODGERS: EBITDA Was Positive at $50-Mil. in 2009 LOYALTY REWARDS: Involuntary Chapter 11 Case Summary MARIKA TOLZ: Federal Prosecutors Seek Long Sentence in Fraud Case MEDICAL SPA: Physicians, Examiners Face Suit Over Financial Woes MERIT GROUP: Court Approves Morgan Joseph as Investment Banker MERIT GROUP: Sells Business for $44-Mil. to Fund Plan MTR GAMING: Moody's Assigns 'B3' to Senior Secured Notes NELSON RE: Moody's Affirms Catastrophe Bonds Ratings at Ca(sf) NLC UNITRUST: Court Approves Ciardi Ciardi as Counsel NORTHERN BERKSHIRE: Denied CAH Status, But Still Seen to Emerge NURSERYMEN'S EXCHANGE: Can Hire Calegari & Morris as Accountants NURSERYMEN'S EXCHANGE: FocalPoint Approved as Investment Banker NURSERYMEN'S EXCHANGE: Taps Scheel Dallape as Real Estate Broker NURSERYMEN'S EXCHANGE: Chelliah OK'd as Turnaround Consultants NURSERYMEN'S EXCHANGE: Committee Taps FTI as Consultant NURSERYMEN'S EXCHANGE: Landau Gottfrie Approved as Panel's Counsel OLD COLONY: Plans to Pay $9MM Wells Fargo Secured Claim in 7 Years OLSEN AGRICULTURAL: Court Approves Agri-Business as Broker OLSEN AGRICULTURAL: Court Approves Green & Markley as Counsel PALMDALE HILLS: Lehman Further Amends SunCal Plan PERKINS & MARIE: Shuts Down Second Las Vegas Store Location PFG ASPEN: Seeks Sept. 14 Extension of Confirmation Deadline PHILADELPHIA ORCHESTRA: Pension Fund Has Go-Signal for Discovery PHILADELPHIA ORCHESTRA: Files Schedules of Assets and Liabilities PHILADELPHIA ORCHESTRA: Wants Plan Exclusivity Extended to Nov. 12 PHILADELPHIA ORCHESTRA: Wants Until Nov. 12 to Decide on Leases PHILLIPS PLASTICS: S&P Assigns Prelim. 'B' Corp. Credit Rating PRECISION DRILLING: S&P Assigns 'BB+' Rating to $300MM Sr. Debt PREMIER GOLF: Plan Disclosures Hearing Today QUAD/GRAPHICS INC: Moody's Rates Credit Facilities at 'Ba2' RANCHO MALIBU: Plan Denied Confirmation; Case Converted to Ch. 7 RASER TECHNOLOGIES: Reaches Deal With Creditor to Avoid Rival Plan REMINGTON RANCH: Court Converts Case to Chapter 7 Liquidation ROCHA DAIRY: Wants to Hire Deagle Ames as Accountant ROCHA DAIRY: Committee Taps May Browning as Counsel ROTHSTEIN ROSENFELDT: Trustee Sues TD Bank for Role in Fraud RUTHERFORD CONSTRUCTION: Court Denies Access to Cash Collateral SANTA ROSA: S&P Cuts Long-term Rating on Toll Revenue Bonds to D SBARRO INC: Committee Wins Nod to Compel E&Y to Send Report SBARRO INC: Exclusive Period to File Plan Extended to Dec. 31 SEDRA FAMILY: Case Summary & 11 Largest Unsecured Creditors SEQUOIA PARTNERS: Committee Opposes Extension of Exclusivity SEQUOIA PARTNERS: Court Approves Swearingen as Committee's Counsel SHOPPES OF LAKESIDE: Reaches Deal With Heartwood, et al., on Plan SOUTH EDGE: Ch.11 Trustee to Tap Piercy Bowler for Tax Services SOUTH EDGE: Trustee Can Tap $4MM Portion of Homebuilders' Loan SPROUTS FARMER: S&P Assigns 'B+' Corporate Credit Rating SUNOCO INC: Fitch Downgrades IDR to 'BB+'; Outlook Stable SUNOCO INC: S&P Lowers CCR to 'BB+' on Completion of SunCoke IPO SYNTAX-BRILLIAN: Court Rejects Suit v. Preferred Bank T&J RESTAURANT: Chevys Fresh Mex Abruptly Closes Doors TERRESTAR NETWORKS: FTC Approves Dish's $1.4 Billion Bid TOPAZ POWER: S&P Affirms 'BB-' Rating on $600-Mil. Facilities TUBO DE PASTEJE: Epiq Bankruptcy OK'd as Notice, Balloting Agent TUBO DE PASTEJE: Court OKs Deloitte Financial Advisory as Auditor TUBO DE PASTEJE: Court OKs Dewey & Leboeuf LLP as Attorneys U.S. EAGLE: Lease Decision Period Extended Until August 15 U.S. EAGLE: Seeks to Pay Critical Vendors Claims Totaling $445,370 USA UNITED: Sec. 341 Creditors' Meeting Set for Aug. 16 USA UNITED: U.S. Trustee Wants Reorganization Case Converted VALENCE TECHNOLOGY: Expects up to $14-Mil Revenue for Fiscal Q1 VEY FINANCE: Court Approves Patrick Tuttle and Re/Max as Realtors VITRO SAB: Subsidiaries Involuntary Petitions Dismissed WARNER MUSIC: Delisted from New York Stock Exchange WARNER MUSIC: Edgar Bronfman Does Not Own Common Shares WASHINGTON MUTUAL: FDIC Should Pay for $650M Suit, JPMorgan Says WATER STREET: Can Hire Mark B. French as Bankruptcy Counsel WATER STREET: Can Access $10,000 Unsecured Loan from R. DeRogatis WEST CORP: Reports $34.37 Million Net Income in 2Q 2011 WESTLAND PARCEL: Court Approves David Goodrich as CRO WESTSIDE MEDICAL: Wants to Use Cash Collateral to Pay Prof. Fees W.R. GRACE: Reports $75.8 Million Net Income in 2nd Quarter W.R. GRACE: CEO Confident In Getting Positive Plan Ruling W.R. GRACE: Lenders Push For $1 Billion-Plus Chapter 11 Payout * Another Judge Differs With 5th Circuit's Reed Opinion * Fitch Says Leveraged Media Cos. Can Cover Higher Debt Costs * 60 Allen Matkins Attorneys Named Among Super Lawyers 2011 * Gnarus Advisors LLC Opens Chicago Office * Weil, Gotshal & Manges Named No. 1 Bankruptcy Law Firm * Recent Small-Dollar & Individual Chapter 11 Filings ********* 4KIDS ENTERTAINMENT: Gets 3-Month Plan Exclusivity Extension ------------------------------------------------------------ Christie Smythe at Bankruptcy Law360 reports that 4Kids Entertainment Inc. won approval Monday in New York to remain in bankruptcy protection while it battles a contract lawsuit lodged by the owners of the rights to the popular "Yu-Gi-Oh!" cartoon. U.S. Bankruptcy Judge Shelley Chapman signed an order granting 4Kids' request to extend its exclusivity period - when it has the sole right to advance a Chapter 11 reorganization plan -- by 90 days to accommodate a trial in the contract dispute set for Aug. 29. About 4Kids Entertainment New York-based 4Kids Entertainment, Inc., dba 4Kids, is an entertainment and media company specializing in the youth oriented market, with operations in these 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. The principal driver for filing the Chapter 11 cases is the need to protect 4Kids' most valuable asset -- its rights under an exclusive license relating to the popular Yu-Gi- Oh! ("YGO") series of animated television programs -- from efforts by the licensor, a consortium of Japanese companies, to allegedly wrongfully terminate the license and force 4Kids out of business. 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. Kaye Scholer LLP is the Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims and notice agent. BDO Capital Advisors, LLC, is the financial advisor and investment banker. An official committee of unsecured creditors has not been appointed by the Office of the United States Trustee. ALLEN FAMILY: South Korea's Harim Wins Auction for Assets --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that South Korean poultry producer Harim Co. won the July 25 auction for Allen Family Foods Inc. The price bid by Harim wasn't disclosed. The sale hearing before the bankruptcy judge was scheduled for July 27. Mr. Rochelle relates that poultry producer Montaire Farms of Delaware Inc., the stalking-horse at the auction, made the first bid of $30 million, plus as much $38 million for inventory. Montaire served notice that it will demand that $4.1 million be placed in escrow from the sale to Harim to cover the claim it has arising from business dealings during Allen's Chapter 11 case. Montaire wants the money in escrow because otherwise Allen may not have enough funds to pay claims arising during bankruptcy. Montaire cited the bankruptcy judge as saying that any offer had to cover the cost of the case. About Allen Family Foods Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry company. Allen Family Foods and two affiliates, Allen's Hatchery Inc. and JCR Enterprises Inc., 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. Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as counsel to the Debtors. FTI Consulting is the financial advisor. BMO Capital Markets is the Debtors' investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Lowenstein Sandler PC and Womble Carlyle Sandridge & Rice, PLLC, serve as counsel for the official committee of unsecured creditors. J.H. Cohn LLP serves as the Committee's financial advisor. ALLEN FAMILY: Harim Makes Winning Offer for Assets -------------------------------------------------- Kye Parsons at WBOC.com reports that South Korean poultry firm Harim is the apparent winner in the bidding process for Allen Family Foods. According to the report, Harim intends to continue operations at Allen's facilities, including its poultry processing plants in Cordova, Md. and Harbeson, Del. If Harim does take over Allen's, it is unclear if Allen's employees will lose their jobs or become employees of Harim. The report says the agreement is subject to final approval during an official bankruptcy auction scheduled to be held later this week in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. The news comes after Mountaire Farms announced that it had dropped its efforts to buy Allen's assets, notes the report. Under the stalking horse agreement, Mountaire Farms, through its affiliate, Seaford Milling Company, would have acquired substantially all of Allen's, with the exception of the corporate owned grow-out farms and related farmland, which will continue to be owned by Allen's. Despite pulling its bid for Allen's, Mountaire Farms said in a statement that it will continue with its plan to expand its own facilities. About Allen Family Foods Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry company. Allen Family Foods and two affiliates, Allen's Hatchery Inc. and JCR Enterprises Inc., 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. Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as counsel to the Debtors. FTI Consulting is the financial advisor. BMO Capital Markets is the Debtors' investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Lowenstein Sandler PC and Womble Carlyle Sandridge & Rice, PLLC, serve as counsel for the official committee of unsecured creditors. J.H. Cohn LLP serves as the Committee's financial advisor. Roberta DeAngelis, U.S. Trustee for Region 3, appointed seven creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' cases. ALTEGRITY INC: S&P Keeps 'B', But Revises Outlook to Negative ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its corporate credit rating on Falls Church, Va.-based Altegrity Inc. at 'B'. "At the same time, we revised our outlook to negative from stable," S&P said. "We also affirmed our issue ratings on the company's $1.475 billion senior secured credit facility of 'B+'. The recovery ratings remain '2', indicating our expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default," S&P related. "We also affirmed our issue ratings on the company's senior unsecured notes and senior subordinated notes of 'CCC+'. The recovery ratings remain '6', indicating our expectation for negligible (0% to 10%) recovery for noteholders in the event of a payment default. We estimate Altegrity had about $2.1 billion in reported debt outstanding at March 31, 2011," S&P said. "The outlook revision to negative from stable reflects our view that uncertain government spending levels and poor visibility within certain business segments will restrict meaningful credit measure improvement over the next year," said Standard & Poor's credit analyst Brian Milligan. "Without substantial improvement, credit measures will remain weaker than 'B' rating category medians. Specifically, we forecast adjusted leverage to remain high in the upper-6x area and EBITDA interest coverage to remain thin in the upper-1x area." "The negative outlook reflects our expectation for liquidity to remain adequate and covenant cushion to remain above 15%, but for credit measures to remain weaker than 'B' rating category medians. We could lower our ratings if liquidity becomes less than adequate or covenant cushion falls below 15%, possibly from significant deterioration in USIS' OPM business or in Kroll's Ontrack business. EBITDA would have to fall about 7.5% for covenant cushion to drop below 15%. We could revise our outlook back to stable if performance meaningfully improves -- possibly from new large-scale client engagements at Kroll Ontrack coupled with stable performance at USIS' OPM business -- to the point that credit measures approach 'B' rating category medians. We estimate EBITDA would have to increase by about 10% for credit measures to approach 'B' rating category medians," S&P said. AMERICAN DIAGNOSTIC: Adequate Protection Payments Approved ---------------------------------------------------------- The Hon. Carol A. Doyle of the U.S. Bankruptcy Court for the Northern District of Illinois approved the stipulation for adequate protection entered between American Diagnostic Medicine, Inc., and Key Equipment Finance Inc. Key Equipment has a claim against the Debtor that is specifically secured by a perfected first priority security in the Debtor's personal property -- GE Venti Nuclear Medicine Camera, Model GF01. As of the date of filing, the Debtor owed one payment in the amount of $4,976 as a prepetition debt. The Debtor and Key agree that payments remain due for April, May, June and July 2011 in the total amount of $19,905. Pursuant to the finance commitment letter, the Debtor will pay Key the postpetition outstanding payments beginning Aug. 1, 2011, continue to make monthly payments of $4,922 to Key. The payments will be sent to: Sal Boscia Key Equipment Finance, Inc. 1000 South McCaslin Boulevard Superior, CO 80027 The Debtor will also, as further adequate protection, pay within 14 days of the entry of the July 21 order, to Key the payments due for the months of April, May, June and July 2011 in the total amount of $19,905. About American Diagnostic Batavia, Illinois-based American Diagnostic Medicine Inc. provides imaging technologies to hospitals, clinics, cardiologists, internal medicine groups and other health care providers throughout the United States. It filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 11-03368) on Jan. 28, 2011. Joshua D. Greene, Esq., and Michael J. Davis, Esq., at Springer, Brown, Covey, Gaetner & Davis, serve as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $11,298,157 in total assets and $11,116,962 in total debts. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has hired K&L Gates LLP as its counsel. AMERICAN INT'L: $450 Million Settlement Gets Preliminary Approval ----------------------------------------------------------------- American Bankruptcy Institute reports that American International Group Inc., the bailed-out U.S. insurer, said that its proposal to pay $450 million to resolve claims of cheating a workers' compensation program was approved by a U.S. judge. About AIG American International Group, Inc. -- http://www.aig.com/-- is an international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services around the world. AIG common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. AIG almost collapsed under the weight of bad bets it made insuring mortgage- backed securities. The Company, however, was bailed out by the Federal Reserve, but even after an initial infusion of $85 billion, losses continued to grow. The later rescue packages brought the total to $182 billion, making it the biggest federal bailout in U.S. history. AIG has been working to protect and enhance the value of its key businesses, execute an orderly asset disposition plan, and position itself for the future. AIG has sold a number of its subsidiaries and other assets to pay down loans received from the U.S. government, and continues to seek buyers of its assets. AMTRUST FINANCIAL: Files Amended Joint Chapter 11 Plan ------------------------------------------------------ BankruptcyData.com reports that AmTrust Financial (nka AmFin Financial) filed with the U.S. Bankruptcy Court an Amended Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. The AmFin Plan incorporates a proposed compromise and settlement regarding the holders of the Senior Notes Claims. The Disclosure Statement relates that holders of the Senior Notes Claims have agreed (a) that each holder will be treated as the holder of a single Unsecured Claims against the consolidated Debtors, (b) to have any liens, security interests, mortgages or guaranties granted pursuant to the Senior Notes Agreement be disregarded for all purposes under the AmFin Plan, (c) to the substantive consolidation of the Debtors' estates pursuant to the AmFin Plan, and (d) to the designation of directors of Reorganized AFC in the manner set forth in the AmFin Plan. In addition, the holders of Senior Notes Claims have also agreed that the Noteholder Settlement Amount of $2.0 million will not be distributed to holders of Senior Notes Claims but will be instead be distributed to or reserved for other holders of Class 6 and Class 8 Claims (other than the Subordinated Notes Claims) on a pro rata basis. In consideration for such agreements by the holders of the Senior Notes Claims, the Debtors have agreed that the Senior Notes shall have Allowed Unsecured Claims in an agreed aggregate amount of $100,763,415 and that the Subordinated Notes shall have an Allowed Unsecured Claims in an agreed aggregate amount of $53,628,210. In addition, the Debtors have agreed (a) that any claim for recovery of the approximately $11.8 million paid by the Debtors to holders of Senior Notes Claims in October 2009 will be settled in full by the redistribution of the Noteholder Settlement Amount, (b) not to object to any claims filed by the holders of the Senior Notes, or their professionals or by the Bank of New York Mellon, as collateral agent for the Senior Notes, or its professionals, for substantial contribution under section 503(b) of the Bankruptcy Code up to an aggregate amount of $950,000, (c) to the designation of the Board of Directors of Reorganized AFC as set forth in the AmFin Plan, and (f) to the releases of the holders of Senior Notes Claims and their respective present or former directors, officers, employees, attorneys, accountants, underwriters, investment bankers, financial advisors, representatives and agents, as set forth in the AmFin Plan. About AmTrust Financial AmTrust Financial Corp (PINK: AFNL) was the owner of the AmTrust Bank. AmTrust was the seventh-largest holder of deposits in South Florida, with $4.7 billion in deposits and 21 branches. In November 2008, the Office of Thrift Supervision issued a cease and desist order requiring AmTrust to improve its capital ratios. AmTrust Financial, together with affiliates that include AmTrust Management Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ohio Case No. 09-21323) on Nov. 30, 2009. The debtor subsidiaries include AmFin Real Estate Investments, Inc., formerly AmTrust Real Estate Investments, Inc. (Case No. 09-21328). G. Christopher Meyer, Esq., Christine M. Piepont, Esq., and Sherri L. Dahl, Esq., at Squire Sanders & Dempsey (US) LLP, in Cleveland, Ohio; and Stephen D. Lerner, Esq., at Squire Sanders & Dempsey (US) LLP, in Cincinnati, Ohio, serve as counsel to the Debtors. Kurtzman Carson Consultants serves as claims and notice agent. Attorneys at Hahn Loeser & Parks LLP serve as counsel to the Official Committee of Unsecured Creditors. AmTrust Management estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. AmTrust Bank was not part of the Chapter 11 filings. On Dec. 4, 2009, AmTrust Bank was closed by regulators and the Federal Deposit Insurance Corporation was named receiver. New York Community Bank, in Westbury, New York, assumed all of the deposits of AmTrust Bank pursuant to a deal with the FDIC. ANTWERP DAIRY: Case Summary & 2 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Antwerp Dairy Leasing, LLC 1290 North Shoop Avenue, Suite 140 Wauseon, OH 43567 Bankruptcy Case No.: 11-12846 Chapter 11 Petition Date: July 25, 2011 Court: U.S. Bankruptcy Court Northern District of Indiana (Fort Wayne Division) Judge: Robert E. Grant Debtor's Counsel: Daniel J. Skekloff, Esq. SKEKLOFF, ADELSPERGER & KLEVEN, LLP 927 South Harrison Street Fort Wayne, IN 46802 Tel: (260)407-7000 Fax: (260)407-7137 E-mail: djs@sak-law.com - and - Sarah Mustard Heil, Esq. SKEKLOFF, ADELSPERGER & KLEVEN, LLP 927 S. Harrison Street Fort Wayne, IN 46802 Tel: (260) 407-7000 E-mail: sheil@sak-law.com - and - Scot T. Skekloff, Esq. SKEKLOFF, ADELSPERGER & KLEVEN, LLP 927 South Harrison Street Fort Wayne, IN 46802 Tel: (260)407-7000 Fax: (260)407-7137 E-mail: sts@sak-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/innb11-12846.pdf The petition was signed by W. H. M. van Bakel, manager. Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Four Leaf Clover Dairy Leasing 11-11036 03/24/11 Hill Dairy, LLC 11-12469 06/27/11 ARAMID ENTERTAINMENT: Files $190-Mil. Suit vs. Gerova ----------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that Cayman Islands-based Aramid Entertainment Fund Ltd. filed a $190 million suit Monday against movie industry investor David Bergstein and others in New York state court, accusing them of spreading lies about Aramid in an attempt to buy it on the cheap. The suit, which was filed by Aramid and Screen Capital International Corp., accuses Mr. Bergstein and the so-called Gerova defendants, which include Gerova Financial Group Ltd., Wimbledon Financing Master Fund Ltd. and Stillwater Capital Partners Inc., of tortious interference with business relationships and prospective economic advantage, according to Law360. ARCHBROOK LAGUNA: Deadline to File Schedules Today -------------------------------------------------- At ArchBrook Laguna Holdings LLC and certain of its affiliates' behest, the U.S. Bankruptcy Court for the Southern District of New York extended the time for them to file their schedules of assets liabilities and statements of financial affairs through and including July 28, 2011, without prejudice to their ability to request additional time should it become necessary. The Debtors have informed the Court that they have begun compiling information that will be required to complete the Schedules and Statements; nevertheless, as a consequence of the complexity of the Debtors' business operations and the recent departure of their controller, they have not yet finished gathering the information. The Debtors hold an aggregate of $246,176,393 in assets and $176,372,973 in liabilities as indicated in their most recent unaudited draft balance sheet. The Debtors estimate that they have approximately 7,500 creditors on a combined basis. The Debtors submitted that focusing the attention of key accounting and legal personnel on vital operational and restructuring issues during the critical first weeks after bankruptcy filing, rather than on preparing Schedules and Statements, will help them make a smooth transition into Chapter 11 and, therefore, ultimately will maximize the value of the bankruptcy estates for the benefit of creditors and all parties- in-interest. About ArchBrook Laguna ArchBrook is a procurement and distribution intermediary between production companies and end retailers. It distributes consumer electronics, computers and appliances to principal customers that include Wal-Mart Stores Inc., Best Buy Co. and Costco Wholesale Corp. ArchBrook disclosed assets of $246.2 million against debt totaling $176.4 million as of March 31, 2011. ArchBrook Laguna Holdings LLC and certain of its affiliates filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 11-13292) on July 8, 2011. Ira S. Dizengoff, Esq., Michael P. Cooley, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, serve as bankruptcy counsel to ArchBrook Laguna. The Company is being advised by Macquarie Capital (USA) Inc. with respect to the sale process and by Hawkwood Consulting LLC, whose founder Stephen J. Gawrylewski is Chief Restructuring Officer of the Company. Macquarie Capital (USA) Inc. is the financial advisor. PricewaterhouseCoopers LLP is a consultant. The Debtors are selling substantially all of their assets pursuant to a bankruptcy auction. The Company will seek to have the bankruptcy auction held on Aug. 8, 2011. No buyer is under contract to start the auction. ARCHBROOK LAGUNA: Taps Akin Gump as Bankruptcy Counsel ------------------------------------------------------ ArchBrook Laguna Holdings LLC and certain of its affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Akin Gump Strauss Hauer & Feld LLP as their attorneys, nunc pro tunc to the Petition Date. Peter Handy of ArchBrook Laguna relates that Akin Gump is intimately familiar with the Debtors' business and financial affairs because it has served as counsel to Archbrook Laguna LLC since 2005, providing litigation-related services. More recently, prior to the commencement of these Chapter 11 cases, the Debtors retained Akin Gump to provide general bankruptcy and restructuring advice, and in the weeks leading up to the Petition Date, Akin Gump was actively involved in the preparation of cases. Akin Gump will, among other things, advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued operation of their business and the management of their properties and draft all necessary or appropriate motions, applications, answers, orders, reports, and other papers in connection with the administration of the bankruptcy estates on behalf of the Debtors. Akin Gump will be paid in accordance with its standard hourly rates: Professional Hourly Rates ------------ ------------ Partners $500 - $1,200 Counsel $415 - $850 Associates $335 - $625 Paraprofessionals $125 - $310 The Akin Gump attorneys with primary responsibility for this matter are: Professional Hourly Rates ------------ ------------ Ira S. Dizengoff $975 Daniel I. Fisher $600 Michael P. Cooley $660 Alexis Freeman $675 Kristine Manoukian $510 Daniel Harris $460 The Debtors will also reimburse Akin Gump for its out-of-pocket expenses incurred in connection with its employment. Ira S. Dizengoff, Esq., a partner at Akin Gump Strauss Hauer & Feld LLP, in New York -- idizengoff@akingump.com -- disclosed that in the one year prior to the Petition Date, Akin Gump has received payment for $3,418,000 for services rendered to the Debtors and their affiliates. Of this amount, $1,630,000 was paid to Akin Gump for services performed in connection with the Debtors' bankruptcy filing. Mr. Handy notes that Akin Gump has used this advance payment to credit the Debtors' account for its charges for professional services performed and expenses incurred before the Petition Date. After application of the amounts for payment of any additional prepetition professional services and related expenses, any excess amounts will be held as an advance payment retainer and applied to postpetition allowance of compensation and reimbursement of expenses as allowed by the Court. Mr. Dizengoff attests that Akin Gump is disinterested and represents no interest adverse to the Debtors and their creditors. About ArchBrook Laguna ArchBrook is a procurement and distribution intermediary between production companies and end retailers. It distributes consumer electronics, computers and appliances to principal customers that include Wal-Mart Stores Inc., Best Buy Co. and Costco Wholesale Corp. ArchBrook disclosed assets of $246.2 million against debt totaling $176.4 million as of March 31, 2011. ArchBrook Laguna Holdings LLC and certain of its affiliates filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 11-13292) on July 8, 2011. The Company is being advised by Macquarie Capital (USA) Inc. with respect to the sale process and by Hawkwood Consulting LLC, whose founder Stephen J. Gawrylewski is Chief Restructuring Officer of the Company. Macquarie Capital (USA) Inc. is the financial advisor. PricewaterhouseCoopers LLP is a consultant. The Debtors are selling substantially all of their assets pursuant to a bankruptcy auction. The Company will seek to have the bankruptcy auction held on Aug. 8, 2011. No buyer is under contract to start the auction. ARCHBROOK LAGUNA: Wants to Hire Macquarie as Financial Advisor -------------------------------------------------------------- ArchBrook Laguna Holdings LLC and certain of its affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to enter interim and final orders authorizing the employment of Macquarie Capital (USA) Inc. as their financial advisor, nunc pro tunc to the Petition Date, pursuant to a certain engagement letter dated as of May 19, 2011, as amended, and the related indemnification agreement. As financial advisor, Macquarie will assist in the evaluation of the Debtors' business and prospects, assist in the development of long-term business plan and related financial projections, analyze various restructuring scenarios and the potential impact of these scenarios on the recoveries of various stakeholders impacted by the restructuring, and provide strategic advice with regard to restructuring or refinancing the Debtors' obligations. Macquarie will be paid for professional services according to a fee structure, which provides for: (a) a monthly advisory fee of $125,000 per month with 50% of all Monthly Fees after the third Monthly Fee credited, without duplication, against any earned Restructuring Fee, Sale Transaction Fee or Financing Fee; and (b) a Financing Fee in an amount equal to: * 1% of the gross proceeds of all senior indebtedness; * 2% of the gross proceeds of all junior secured indebtedness; * 3% of the gross proceeds of all mezzanine indebtedness; * 5% of the gross proceeds of all equity, equity-linked or equity-like securities or indebtedness; and * with respect to any other securities of a financing, underwriting discounts, placement fees or other compensation, customary under the circumstances, as will be mutually agreed upon by the Company and Macquarie; and (c) a Restructuring Fee equal to 2% of the aggregate outstanding principal amount of the restructured obligations, which will not be less than $1,250,000, payable upon consummation of any restructuring pursuant to a bankruptcy proceeding; or (d) a Sale Transaction Fee equal to 1.5% of the Transaction Value up to $100,000,000 and 2% of incremental Transaction Value above $100,000,000, provided that the Sale Transaction Fee will not be less than $1,250,000, provided further that, if a Sale Transaction for a material portion of the assets occurs through a series of transactions, the Sale Transaction Fee payable in the case of that liquidation will not be based on the Transaction Value and will instead be $650,000; and (e) reasonable out-of-pocket expenses in connection with the services provided. Before the Petition Date and under the terms of the Engagement Letter, the Debtors paid Macquarie total fees of $75,000 per month for services rendered from May 19, 2011, through July 7, 2011, and for reasonable out-of-pocket expenses related to those services. The Indemnification Agreement provides for, and the Debtors agree to, indemnify and hold harmless Macquarie and its affiliates related to, arising out of or in connection with the retention of Macquarie by the Debtors. However, these conditions will apply: -- All requests of the Indemnified Persons for payment of indemnity, contribution or otherwise will be made by means of an interim or final fee application and will be subject to the approval and review of the Court; and -- In the event an Indemnified Person seeks reimbursement for attorneys' fees from the Debtors, the invoices and supporting time records from the attorneys will be annexed to Macquarie's own interim and final fee applications. David Miller, a managing director of Macquarie Capital, disclosed that as of May 19, 2011, Macquarie was paid a $100,000 Upfront Retainer and $117,500 in Monthly Advisory Fees for its prepetition services to the Debtors. As of July 8, 2011, Macquarie has earned $217,500 for the 48 calendar days it was employed prepetition, and has incurred $44,284 in out-of-pocket expenses. Mr. Miller assures the Court that Macquarie is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About ArchBrook Laguna ArchBrook is a procurement and distribution intermediary between production companies and end retailers. It distributes consumer electronics, computers and appliances to principal customers that include Wal-Mart Stores Inc., Best Buy Co. and Costco Wholesale Corp. ArchBrook disclosed assets of $246.2 million against debt totaling $176.4 million as of March 31, 2011. ArchBrook Laguna Holdings LLC and certain of its affiliates filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 11-13292) on July 8, 2011. Ira S. Dizengoff, Esq., Michael P. Cooley, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, serve as bankruptcy counsel to ArchBrook Laguna. The Company is being advised by Macquarie Capital (USA) Inc. with respect to the sale process and by Hawkwood Consulting LLC, whose founder Stephen J. Gawrylewski is Chief Restructuring Officer of the Company. Macquarie Capital (USA) Inc. is the financial advisor. PricewaterhouseCoopers LLP is a consultant. The Debtors are selling substantially all of their assets pursuant to a bankruptcy auction. The Company will seek to have the bankruptcy auction held on Aug. 8, 2011. No buyer is under contract to start the auction. ARCHBROOK LAGUNA: Taps S.J. Gawrylewski of Hawkwood as CRO ---------------------------------------------------------- ArchBrook Laguna Holdings LLC and certain of its affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of New York to (a) employ Hawkwood Consulting LLC as crisis manager for the Debtors, (b) approve the terms of Hawkwood's employment, including the proposed fee structure and the indemnification provisions set forth in the Engagement Letter, and (c) appoint Stephen J. Gawrylewski, a principal of Hawkwood, as their chief restructuring officer. Peter Handy of ArchBrook Laguna says that certain Hawkwood professionals, including Mr. Gawrylewski, have been providing crisis management services to the Debtors since May 26, 2011, when the Debtors initially selected those individuals as restructuring consultants to assist in the Debtors' restructuring process, to address certain financial issues. On June 13, 2011, certain of the Hawkwood Professionals formed Hawkwood, which the Debtors now seek to employ to assist in the Debtors' restructuring process as set forth in the engagement letter dated June 13, 2011. Under the Engagement Letter, Mr. Gawrylewski will serve as CRO, reporting to appropriate persons of the Debtors, and will direct the Debtors' reorganization. Mr. Gawrylewski, with the other Hawkwood Professionals, will be responsible for assisting the Debtors' senior management team in their postpetition restructuring efforts, including negotiating with parties-in- interest and coordinating the "working group" of professionals, who are or will be assisting the Debtors in the restructuring process or who are working for the Debtors' stakeholders. The Debtors will pay Hawkwood for compensation for its professional services rendered and reimbursement of reasonable out-of-pocket expenses incurred in connection with the cases in accordance with the proposed compensation set forth in the Engagement Letter. In summary, the Fee Structure provides for this compensation to Hawkwood: (a) Retainer -- the Debtors paid Hawkwood a $200,000 retainer. Any unearned portion of the retainer will be returned to the Debtors upon the termination of the engagement; (b) Hourly Rates -- Fees for the CRO and the other Hawkwood Professionals based on these hourly rates: Title Hourly Rate ----- ----------- Principals $450 Managing Directors $350 - $450 Directors $275 - $350 (c) Value Added Fee -- The Debtors also agree to pay Hawkwood a contingent value added fee of $400,000 to be awarded and paid upon the earlier to occur of: * the consummation of a plan of reorganization for the Debtors; or * the consummation of the sale of all or a substantial portion of the assets of the Debtors through one transaction or a series of transactions, and in the event of a series of transactions, the Value Added Fee may be awarded as of the consummation of the final transaction in the series. Pursuant to the Engagement Letter, the Debtors have negotiated with Hawkwood the indemnification agreement, pursuant which the Debtors have agreed to indemnify and hold harmless Hawkwood and its affiliates under certain circumstances. The Debtors have agreed to indemnify the CRO to the same extent as the most favorable indemnification it extends to its officers or directors, and no reduction or termination in any of the benefits provided under the indemnities will affect the benefits provided to the CRO or the other Hawkwood Professionals. The CRO will be covered as an officer under the Debtors' existing director and officer liability insurance policy, which the Debtors will maintain for the CRO for a period of not less than two years following the date of the termination of the officer's services. Mr. Gawrylewski ascertains that Hawkwood is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About ArchBrook Laguna ArchBrook is a procurement and distribution intermediary between production companies and end retailers. It distributes consumer electronics, computers and appliances to principal customers that include Wal-Mart Stores Inc., Best Buy Co. and Costco Wholesale Corp. ArchBrook disclosed assets of $246.2 million against debt totaling $176.4 million as of March 31, 2011. ArchBrook Laguna Holdings LLC and certain of its affiliates filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 11-13292) on July 8, 2011. Ira S. Dizengoff, Esq., Michael P. Cooley, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, serve as bankruptcy counsel to ArchBrook Laguna. The Company is being advised by Macquarie Capital (USA) Inc. with respect to the sale process and by Hawkwood Consulting LLC, whose founder Stephen J. Gawrylewski is Chief Restructuring Officer of the Company. Macquarie Capital (USA) Inc. is the financial advisor. PricewaterhouseCoopers LLP is a consultant. The Debtors are selling substantially all of their assets pursuant to a bankruptcy auction. The Company will seek to have the bankruptcy auction held on Aug. 8, 2011. No buyer is under contract to start the auction. ARCHBROOK LAGUNA: To Employ PwC as Accounting Consultants --------------------------------------------------------- ArchBrook Laguna Holdings LLC and certain of its affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ PricewaterhouseCoopers LLP as their accounting consultants, nunc pro tunc to the Petition Date on the terms set forth in an engagement letter. Pursuant to the terms of the Engagement Letter, since June 8, 2011, PwC has been providing consulting and accounting services in connection with the review and evaluation of the Debtors' accounting and credit practices. PwC intends to continue to provide those services during the pendency of the Chapter 11 cases. To the extent the Debtors request additional services not covered under the Engagement Letter, PwC and the Debtors will enter into additional engagement letters, as necessary, and will file and serve a notice of presentment of an order to the Court for approval of any additional engagement letters. The Debtors will pay PwC for services rendered in their bankruptcy cases according to these hourly rates: Partners $600 Directors $530 Managers $450 Senior Associates $365 Associates $290 The Debtors will also reimburse PwC for any direct expenses incurred in connection with its retention in these cases and the performance of the services set forth in the Engagement Letter. Robert Gallagher, a partner at PwC, attests that PwC is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About ArchBrook Laguna ArchBrook is a procurement and distribution intermediary between production companies and end retailers. It distributes consumer electronics, computers and appliances to principal customers that include Wal-Mart Stores Inc., Best Buy Co. and Costco Wholesale Corp. ArchBrook disclosed assets of $246.2 million against debt totaling $176.4 million as of March 31, 2011. ArchBrook Laguna Holdings LLC and certain of its affiliates filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 11-13292) on July 8, 2011. Ira S. Dizengoff, Esq., Michael P. Cooley, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, serve as bankruptcy counsel to ArchBrook Laguna. The Company is being advised by Macquarie Capital (USA) Inc. with respect to the sale process and by Hawkwood Consulting LLC, whose founder Stephen J. Gawrylewski is Chief Restructuring Officer of the Company. Macquarie Capital (USA) Inc. is the financial advisor. PricewaterhouseCoopers LLP is a consultant. The Debtors are selling substantially all of their assets pursuant to a bankruptcy auction. The Company will seek to have the bankruptcy auction held on Aug. 8, 2011. No buyer is under contract to start the auction. ARCHBROOK LAGUNA: Employs Garden City Group as Claims Agent ----------------------------------------------------------- ArchBrook Laguna Holdings LLC and certain of its affiliates sought and obtained authority to employ The Garden City Group, Inc., as notice and claims agent, nunc pro tunc to the Petition Date. Among other things, GCG will notify all potential creditors of the filing of the bankruptcy petitions, notify all potential creditors of the existence and amount of its respective claims as evidenced by the Debtors' books and records, and maintain a post office box for receiving claims. GCG will be paid according to the parties' Retention Agreement. GCG has received an initial retainer of $55,000, which may be replenished from time to time, from the Debtors for its services and will apply that retainer first against all prepetition fees and expenses and then against the last bill for fees and expenses that GCG will incur in these cases. Angela Ferrante, an assistant vice president at GCG, assures the Court that GCG is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About ArchBrook Laguna ArchBrook is a procurement and distribution intermediary between production companies and end retailers. It distributes consumer electronics, computers and appliances to principal customers that include Wal-Mart Stores Inc., Best Buy Co. and Costco Wholesale Corp. ArchBrook disclosed assets of $246.2 million against debt totaling $176.4 million as of March 31, 2011. ArchBrook Laguna Holdings LLC and certain of its affiliates filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 11-13292) on July 8, 2011. Ira S. Dizengoff, Esq., Michael P. Cooley, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, serve as bankruptcy counsel to ArchBrook Laguna. The Company is being advised by Macquarie Capital (USA) Inc. with respect to the sale process and by Hawkwood Consulting LLC, whose founder Stephen J. Gawrylewski is Chief Restructuring Officer of the Company. Macquarie Capital (USA) Inc. is the financial advisor. PricewaterhouseCoopers LLP is a consultant. The Debtors are selling substantially all of their assets pursuant to a bankruptcy auction. The Company will seek to have the bankruptcy auction held on Aug. 8, 2011. No buyer is under contract to start the auction. ARK DEVEVELOPMENT: Proposes Monthly Loans from Kodsis ----------------------------------------------------- Ark Development/Oceanview LLC has filed an emergency motion for authorization to obtain postpetition financing of $15,932 per month, on a interim basis, from Isaac Kodsi, Joseph Kodsi or other related or affiliated entities, to make the proposed adequate protection payments to Northern Trust, which payments commence on Aug. 1, 2011. The Debtor tells the Court that the adequate protection payments are necessary to enable it to confirm its Plan. Isaac Kodsi and Joseph Kodsi each own 50% of the Debtor. Northern Trust, owed approximately $3,018,347, plus a per diem of $594 thereafter, plus reasonable costs and attorneys' fees, holds a mortgage on the Debtor's property located at 1431 North Atlantic Boulevard, in Fort Lauderdale, Florida. Prior to the Petition Date, the Debtor was in the process of constructing a luxury home on the Property. After the Petition Date, the Debtor completed construction of said residence on the Property and a certificate of occupancy for the residence has been issued by the City of Fort Lauderdale. Debtor has not made any payments to Northern Trust since the filing of the Petition. Pursuant to the terms of the Agreement between the Debtor and Northern Trust resolving their disputes regarding the debt owed to Northern Trust, the Debtor is required to make adequate protection monthly payments to Northern Trust in the amount of $15,931.95, commencing Aug. 1, 2011. Debtor relates that if it is unable to make the adequate protection payments, Northern Trust can proceed against its Property. The Lenders have agreed to fund the proposed adequate protection payments to Northern Trust in exchange for an administrative expense claim under 11 U.S.C. Section 503(b)(1). Repayment of the post-petition financing to the Lenders will be at confirmation of the Debtor's Plan. About Ark Development Ark Development/Oceanview LLC owns three luxury homes in Fort Lauderdale, Florida -- at 1431 North Atlantic Boulevard; 1427 North Atlantic Boulevard; and 1423 North Atlantic Boulevard. As of the Petition Date, all three properties were in the final stages of the construction process. Subsequent to the Petition Date, the Debtor has completed construction of the 1427 Property and a certificate of occupancy for the residence has been issued by the City of Fort Lauderdale. The Debtor estimates that the value of each property is roughly $4 million. Currently, the Debtor's sole source of income is generated from the rental income from the 1423 Property. The Debtor utilizes the rental income from the 1423 Property to pay the expenses associated with maintaining the 1423 Property. Ark Development/Oceanview filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-20382) on April 18, 2011. Judge John K. Olson presides over the case. It scheduled assets of $12,000,000 and debts of $9,772,531. The Debtor has retained Shraiberg, Ferrara & Landau, P.A., as general bankruptcy counsel. ARK DEVELOPMENT: Disclosure Statement Hearing Set for Aug. 24 ------------------------------------------------------------- On July 18, 2011, Ark Development/Oceanview, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Florida its proposed Chapter 11 Plan of Reorganization and explanatory disclosure statement on July 18, 2011. The Court has scheduled a hearing for Aug. 24, 2011, at 1:30 p.m. to consider approval of this Disclosure Statement. The Plan designates six Classes of Claims and one Class of Interests: Class 1. Allowed Secured Claim of Broward County Revenue Collector Class 2. Allowed Secured Claim of RADC/CADC. Class 3. Allowed Secured Claim of BB&T Class 4. Allowed Secured Claim of Northern Trust Class 5. Allowed Secured Claims of the Mechanic Lienholders Class 6. Allowed General Unsecured Claims Class 7. Allowed Equity Interests. All Classes are Impaired under the Plan. Class 1 Claimholders will receive equal monthly payments, of principal and interest, commencing on the Effective Date, with interest at 5% per annum, over a period not to exceed five years. RADC/CADC, which holds the first position mortgage on the 1423 Property, and is owed approximately $3,150,000, will be paid monthly interest only payments on the twentieth (20th) of each month at a rate of one (1) percentage point over the prime rate (i.e., monthly payment of $11,156.25), over a period of 60 months. RADC/CADC will receive a balloon payment of $3,150,000 at the end of the 60 month period, or the Debtor will abandon the property to the lender or consent to the entry of a foreclosure judgment in favor of the lender. BB&T, which holds the first position mortgage on the 1427 Property, and is owed approximately $3,300,000, will be paid monthly interest only payments on the 20th of each month at a rate of one percentage point over the prime rate (i.e., monthly payment of $11,687), over a period of 24 months. Thereafter, BB&T will be paid principal and interest monthly payments for the following 36 months, amortized over 25 years at a rate of one percentage point over prime (i.e, monthly payment of $17,877). BB&T will receive a balloon payment of approximately $2,887,009 at the end of the 60 month period, or the Debtor will abandon the property to the lender or consent to the entry of a foreclosure judgment in favor of the lender. Northern Trust which holds the mortgage on the 1431 Property, and is owed approximately $3,018,347, plus a per diem of $594 thereafter, plus reasonable costs and attorneys' fees, has agreed to vote in favor of the Plan filed by the Debtor so long as the treatment of Northern Trust's Secured Claim is consistent with the terms of the stipulation between the Debtor and Northern Trust resolving their disputes regarding the debt owed to Northern Trust. Under the Agreement, the Debtor will remain in possession and control of the 1431 Property for six months from the date of the final order approving the Agreement. Prior to the expiration of the six months period, the Debtor will use its best efforts to effectuate a sale of the 1431 Property. Until such time as the 1431 Property is sold, the Debtor will make adequate protection payments to Northern Trust on a monthly basis in the amount of $15,932 each, commencing on Aug. 1, 2011, until the sale of the 1431 Property. Mechanic Lienholders, owed approximately $230,094 in the aggregate, will, in full satisfaction of their respective Allowed Claims, receive a pro rata Distribution of $25,000, excluding interest, paid in quarterly payments over a period of three years, commencing 90 days of the Effective Date and will receive interest on the amount of their Distribution at 2.5%. Allowed General Unsecured Claims in Class 6 will, in full satisfaction of their respective Allowed Claims, receive a pro rata Distribution of $25,000, excluding interest, paid in quarterly payments over a period of three years, commencing 90 days of the Effective Date and will receive interest on the amount of their Distribution at 2.5%. Other than retaining their Equity Interests in the Debtor, the holders of Allowed Equity Interests in Class 7 will not be entitled to receive any Distribution under the Plan on account of such Equity Interests. In exchange for agreeing to waive the amounts owed to Joseph Kodsi and for financing the payments under the Plan, Joseph Kodsi will continue to own 50% of the Reorganized Debtor and Isaac Kodsi will continue to own 50% of the Reorganized Debtor. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/arkdevelopment.DS.pdf About Ark Development Ark Development/Oceanview LLC owns three luxury homes in Fort Lauderdale, Florida -- at 1431 North Atlantic Boulevard; 1427 North Atlantic Boulevard; and 1423 North Atlantic Boulevard. As of the Petition Date, all three properties were in the final stages of the construction process. Subsequent to the Petition Date, the Debtor has completed construction of the 1427 Property and a certificate of occupancy for the residence has been issued by the City of Fort Lauderdale. The Debtor estimates that the value of each property is roughly $4 million. Currently, the Debtor's sole source of income is generated from the rental income from the 1423 Property. The Debtor utilizes the rental income from the 1423 Property to pay the expenses associated with maintaining the 1423 Property. Ark Development/Oceanview filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-20382) on April 18, 2011. Judge John K. Olson presides over the case. It scheduled assets of $12,000,000 and debts of $9,772,531. The Debtor has retained Shraiberg, Ferrara & Landau, P.A., in Boca Raton, Fla., as general bankruptcy counsel. AVISTAR COMMUNICATIONS: Incurs $2.18 Million Net Loss in Q2 ----------------------------------------------------------- Avistar Communications Corporation reported a net loss of $2.18 million on $1.47 million of total revenue for the three months ended June 30, 2011, compared with a net loss of $2.40 million on $1.02 million of total revenue for the same period during the prior year. The Company also reported a net loss of $4.61 million on $2.86 million of total revenue for the six months ended June 30, 2011, compared with net income of $7.82 million on $15.79 million of total revenue for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $2.31 million in total assets, $14.03 million in total liabilities, and a $11.71 million total stockholders' deficit. Bob Kirk, CEO of Avistar, said, "In 2011, businesses are making important buying decisions as to their unified visual communications strategies. Key factors in these decisions are user demands for robust and reliable desktop videoconferencing solutions and their associated features and functionality, and aligning these solutions with the needs of the IT group. This emphasis positions Avistar with a formidable advantage since Avistar solutions are designed to provide an industry leading user experience while supporting virtualized desktop (VDI) and server environments, delivering advanced bandwidth management capabilities and achieving all this with an all software architecture that lowers the total cost of ownership. We believe customers' focus on a combination of reliability, scalability, flexibility and lower cost of ownership is driving our revenue growth in 2011." A full-text copy of the press release announcing the financial results is available for free at http://is.gd/ivi22J About Avistar Communications Headquartered in San Mateo, California, Avistar Communications Corporation (Nasdaq: AVSR) -- http://www.avistar.com/-- holds a portfolio of 80 patents for inventions in video and network technology and licenses IP to videoconferencing, rich-media services, public networking and related industries. Current licensees include Sony Corporation, Sony Computer Entertainment Inc. (SCEI), Polycom Inc., Tandberg ASA, Radvision Ltd. and Emblaze-VCON. The Company reported net income of $4.45 million on $19.65 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of $3.98 million on $8.82 million of total revenue during the prior year. B&G FOODS: Revolving Credit Rated 'Ba1' by Moody's -------------------------------------------------- Moody's Investors Service is correcting the rating for B&G Foods, Inc.'s $25 million senior secured revolving credit facility to Ba1 (LGD2, 13%) from WR. The rating was previously withdrawn on January 10, 2011 due to an internal administrative error. B&G Foods, Inc.'s revolving credit facility was originally issued with the maturity date of January 10, 2011. The transaction's maturity date was later changed to February 26, 2013. At that time, Moody's database was not updated to reflect the new maturity date and the ratings were inadvertently withdrawn due to issue matured. BANNING LEWIS: Ultra's $26.5-Mil. Wins Auction for Most of Ranch ---------------------------------------------------------------- Rich Laden at The Gazette reports that Ultra Resources, a subsidiary of Ultra Petroleum, was one of two winning bidders at a June auction of the 21,500-acre ranch owned by Banning Lewis Ranch. According to the report, Ultra's $26.25 million bid needs a bankruptcy judge's approval, and the company then must finalize its purchase, steps that might not be completed until Sept. 30. In a filing last week in U.S. Bankruptcy Court in Delaware, Ultra said it wants to drill without being bound by an annexation agreement, utilities agreement, master plan and other documents that were approved as part of the city's annexation. Those agreements were put in place to govern the ranch's development and laid out responsibilities for the city and the property's owners on road construction, utilities and the like. The city of Colorado Springs filed objections in May, arguing the annexation and other agreements should be binding on the property. Without those agreements, new owners might walk away from their responsibility to provide tens of millions of dollars worth of roads and other public improvements on the property, the city said. In addition to Ultra, KeyBank National Association, which had loaned money to the ranch's owners, submitted a winning bid for roughly 2,400 acres that make up the ranch's north side where about 300 homes have been built since 2007. KeyBank, which said it intends to sell the property, bid $24.5 million; that amount would be credited against the $65 million it's owed on its loan. KeyBank sided with the city of Colorado Springs. Still, KeyBank said any ruling should be consistent between the 2,400-acre and 18,000-acre parcels. About Banning Lewis Banning Lewis Ranch Co. is the owner of the undeveloped portion of a 21,000-acre ranch in Colorado Springs, Colo. Banning Lewis Ranch is a master-planned community in Colorado Springs, Colorado. The first section built, the 350-acre Northtree Village, opened in September 2007 and will have 1,000 homes priced from the high $100,000s to the mid-$300,000s. Banning Lewis Ranch filed for Chapter 11 bankruptcy protection from creditors (Bankr. D. Del. Case No. 10-13445) on Oct. 28, 2010. It estimated assets of $50 million to $100 million and debts of $100 million to $500 million in its Chapter 11 petition. An affiliate, Banning Lewis Ranch Development I & II, LLC, also filed for Chapter 11 (Bankr. D. Del. Case No. 10-13446). Kevin Scott Mann, Esq., at Cross & Simon, LLC, serves as counsel to the Debtors. Edward A. Phillips of Eisner Amper LLP has been retained as the Company's chief restructuring officer. BARZEL INDUSTRIES: Plan Provides 11% Recovery for Unsecureds ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Barzel Industries Inc. scheduled a Sept. 8 confirmation hearing for approval of the liquidating Chapter 11 plan. The U.S. Bankruptcy Court in Delaware approved the explanatory disclosure statement July 26. Creditors have until Aug. 29 to vote on a plan that contemplates paying two major noteholders after priority claims are paid out. Barzel sold most of the assets in November 2009 for $75 million to Norwood, Massachusetts-based Chriscott USA Inc. Secured lenders agreed to a settlement later where they received a release of claims in return for giving up $800,000, including $500,000 earmarked solely for unsecured creditors. According to the Bloomberg report, the disclosure statement says that unsecured creditors with $4.5 million in claims are estimated to have an 11% recovery from the carveout from the lenders' collateral. Secured creditors are not participating in the pot for unsecured creditors on account of their deficiency claims. The disclosure statement says that secured noteholders, still owed $250 million, will recover an additional $18.7 million from the plan, assuming recovery in full on a $18 million tax refund claim. Barzel once had 15 facilities. The Chapter 11 Plan As reported in the June 1, 2011 edition of the Troubled Company Reporter, the Plan provides that holders of "miscellaneous secured claims" will receive cash or recover the property securing the claim. Prepetition secured noteholders will receive cash upon payment of all administrative claims, priority claims, the miscellaneous secured claims, and the wind-down reserve. These secured creditors are impaired under the Plan. Holders of general unsecured claims will share pro rata from the cash reserved for general unsecured creditors. They are impaired under the Plan. Shareholders of the Debtors will retain no ownership interests. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/BARZEL_DS_01.PDF About Barzel Industries Norwood, Massachusetts-based Barzel Industries, Inc., was in the business of processing and distributing steel. The Company manufactured steel for the construction and industrial manufacturing industries, and produces finished commercial racking products. Barzel Industries -- aka Novamerican Steel Inc. and Symmetry Holdings Inc. -- and seven affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13204) on Sept. 15, 2009. Judge Christopher S. Sontchi presides over the cases. J. Kate Stickles, Esq., and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, and Gerald H. Gline, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, N.J., serve as the Debtors' counsel. On the same day, Barzel Industries filed applications for relief under the Canadian Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice -- Commercial List. Barzel Industries recorded assets of $370,145,000 against debts of $375,412,000 as of May 30, 2009. BELTWAY ONE: Final Cash Collateral Hearing on Aug. 30 ----------------------------------------------------- Judge Mike K. Nakagawa granted Beltway One Development Group LLC interim authority to use cash collateral, despite the objection of Wells Fargo Bank N.A., to pay costs of administration and to operate the Debtor's business in the ordinary course. Pursuant to the Interim Cash Collateral Order, Wells Fargo is granted replacement liens on and security interests in the Debtor's property to the extent necessary to adequately protect Wells Fargo from any diminution in the value of its security interests. Nothing in the Order, however, constitutes a finding that Wells Fargo is adequately protected. The Court will hold a Final Hearing on the Debtor's request on Aug. 30, 2011, at 2:30 p.m. Prepetition, Beltway One entered into two separate loan transactions: (i) Beltway One entered into a loan transaction with Colonial Bank, N.A., effective Sept. 20, 2006, whereby Colonial lent Beltway One the principal sum of $13.257 million, which was secured by one parcel of the Debtor's real property called Building 8, and all rents, income, revenues, issues and profits arising or issuing from Beltway One's leases or other occupancy agreements affecting the real property; and (ii) Beltway One entered into a loan transaction with Wachovia Bank, N.A., effective May 16, 2008, whereby Wachovia lent the principal sum of $10 million to Beltway One, which loan was secured by one parcel of Beltway One's real property called as Building 11, and all rents, income, revenues, issues, and profits arising or issuing from Beltway One's leases or other occupancy agreements affecting such other real property. In August 2009, BB&T Corp. purchased the assets of Colonial. According to papers filed in Court by Beltway One, on March 20, 2010, the Colonial/BBT Loan Maturity Date, the outstanding obligation was $3.235 million. Both prior to and after the Colonial/BBT Maturity Date, Beltway One repeatedly contacted BBT seeking to discuss the Colonial/BBT Loan, which calls and correspondence, to date, have been unanswered. Receiving no response from BBT after repeated efforts to contact BBT, Beltway One ceased tendering payments post-maturity; however, BBT retains an Colonial/BBT interest reserve account. Beltway One believes that the value of Building 8 -- the Colonial/BBT Collateral -- exceeds the Colonial/BBT Secured Debt as of Petition Date. In October 2008, Wells Fargo became the successor-by-merger to Wachovia. Beltway One also said that on May 16, 2011, the Wachovia/Wells Loan Maturity Date, the outstanding obligation was $9.789 million. Beltway One believes that the value of Building 11 -- the Wachovia/Wells Collateral -- exceeds the Wachovia/Wells Secured Debt as of the Petition Date. In its objection to the Cash Collateral Motion, Wells Fargo said it has no desire to shut down Beltway One's business operations. It filed the Objection to notify the Court of, and to preserve its rights regarding, disputes with several of the allegations made by Beltway One. Wells Fargo said Beltway One concedes that all of its postpetition revenues constitute Wells Fargo's cash collateral. However, Beltway One has incorrectly characterized its prepetition cash and deposit accounts as assets free and clear of Wells Fargo's liens, a position that is simply not consistent with controlling law. Beltway One also fails to offer sufficient adequate protection against the diminution in value of Wells Fargo's collateral. Wells Fargo further objects to Beltway One's assertion that certain non-debtor insiders had reduced their maximum liability under the guaranties of Beltway One's indebtedness to Wells Fargo. About Horizon Village Square et al. Four related Las Vegas, Nevada-based entities sought Chapter 11 bankruptcy protection on July 13, 2011. The businesses are owned or managed by local business people and firms, including Todd Nigro, Nigro Development LLC, a Nigro family trust and other investors. Horizon Village Square LLC (Bankr. D. Nev. Case No. 11-21034) owns the Vons-anchored Horizon Village Square Shopping Center near I- 515 and Horizon Drive in Henderson. The property includes five retail buildings with nearly 43,000 square feet of space. Ten Saints LLC (Bankr. D. Nev. Case No. 11-21028) owns the 134- room Hampton Inn & Suites at St. Rose Parkway and Seven Hills Drive in Henderson. Beltway One Development Group LLC (Bankr. D. Nev. Case No. 11- 21026) owns the Desert Canyon Business Park at Russell Road and the Las Vegas Beltway. It has two buildings and 15 acres. Nigro HQ LLC (Bankr. D. Nev. Case No. 11-21014) owns an office building at 9115 W. Russell Road occupied by Bank of George, Infinity Plus LLC and Nigro Construction Inc. Todd Nigro said the four bankruptcies were caused by threatened foreclosures -- typically related to Wells Fargo Bank demanding payments to keep loan-to-value ratios at specified levels. Judge Mike K. Nakagawa presides over the cases. Lawyers at Gordon Silver serve as the Debtors' bankruptcy counsel. The bankruptcy petitions estimated assets and debts from $1 million to $10 million each for Nigro HQ; and from $10 million to $50 million in both assets and debts for Horizon Village, Ten Saints and Beltway One. A fifth-related business, Russell Boulder LLC, filed for bankruptcy (Bankr. D. Nev. Case No. 10-29724) on Oct. 19, 2010. It owns the 600-suite Siena Suites extended stay property at Boulder Highway and Russell Road. BERNARD L MADOFF: UniCredit, Bank Austria Want RICO Suit Dismissed ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that UniCredit SpA and subsidiary UniCredit Bank Austria AG each filed papers this week seeking dismissal of the largest part of the $59 billion lawsuit filed against them by the trustee liquidating Bernard L. Madoff Investment Securities Inc. The ruling will be made by U.S. District Judge Jed Rakoff, who said he would send the case back to the bankruptcy judge after addressing threshold issues. According to the report, UniCredit and Bank Austria take aim at the trustee's claims under the Racketeer Influenced & Corrupt Organizations Act, commonly known as RICO. If a plaintiff can prove at least three instances of participation in a racketeering scheme, damages can be trebled. Thus, the trustee is seeking three time the damages suffered by all Madoff customers. Mr. Rochelle relates that the trustee's suit contends that Bank Medici AG and Sonja Kohn, its founder, were in cahoots with Madoff going back at least until the mid-1980s. The trustee alleges that Kohn and her bank funneled money into Madoff through foreign investment funds. UniCredit and Bank Austria, Mr. Rochelle discloses, say they didn't come on the scene until 20 years later. They point to the complaint as being deficient about their participation in the necessary predicate acts. They say the complaint doesn't show they were "knowing participants" or even had knowledge of the Kohn-Madoff scheme. Without looking at the facts, they contend RICO cannot be applied to foreigners. In addition, they say the complaint is based on allegations of securities fraud which by law can't be the basis for a RICO complaint. The trustee is to file his answering papers by Aug. 29. UniCredit and Bank Austria will file replies on Sept. 12 in advance of a hearing before Judge Rakoff on Sept. 19. 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 July 15, 2011, a total of $6.88 billion in claims by investors has been allowed, with $794.9 million to be paid by the Securities Investor Protection Corp. Investors are expected to receive additional distributions from money recovered by Mr. Picard from lawsuits or settlements. BERNARD L MADOFF: Citibank Moves to Dismiss $430 Million Suit ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Citibank NA served a motion July 26 to dismiss the $430 million complaint filed in December by the trustee liquidating Bernard L. Madoff Investment Securities Inc. The trustee claims a right to recover funds that came to Citibank after passing through Fairfield Sentry Ltd. and Rye Select Broad Market Prime Fund LP. Mr. Rochelle notes that in technical legal terms, the Madoff trustee characterizes Citibank as a subsequent transferee of fraudulently transferred money. As such, the trustee contends Citibank must return the funds unless it can prove it received the money in good faith. The trustee will file his answering papers by Nov. 14. The New York-based bank will reply on Dec. 5. A hearing on the motion to dismiss is currently set for Jan. 24. The lawsuit so far hasn't been transferred to federal district court. Mr. Rochelle discloses that Citibank based its dismissal motion in part on non-factual issues. It claims that its receipt of the funds was protected under the so-called safe harbor in Section 546(e) of the Bankruptcy Code immunizing recovery of transfers in securities transactions. The bank also says the transactions with Fairfield and Rye Select were part of swap agreements that are protected by Section 546(g) of the Bankruptcy Code. Also based on law alone, Citibank contends that the Madoff trustee hasn't yet obtained a court declaration that the initial transfers to Fairfield Sentry and Rye Select were voidable. Citibank argues that a settlement with Fairfield Sentry precludes ever having the required judgment. With regard to the facts, Citibank contends that the trustee's complaint fails to allege facts showing that it knew or should have known that the money coming from Mr. Madoff was part of a fraud. The Citibank suit is Picard v. Citibank NA, 10-05345, U.S. Bankruptcy Court, Southern District New York (Manhattan). 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 July 15, 2011, a total of $6.88 billion in claims by investors has been allowed, with $794.9 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. BESO LLC: Investor Seeks Rule 2004 Examination on Longoria ---------------------------------------------------------- Jacqueline Palank, writing for Dow Jones' Daily Bankruptcy Review, reports that attorneys for Mali Nachum, Eva Longoria's disgruntled business partner, is asking the Bankruptcy Court to order the actress to submit to an examination under Rule 2004 of the Federal Rules of Bankruptcy Procedure about the "acts, conduct or property" of restaurant owner Beso LLC. Other subjects of the examination, proposed for Aug. 30, include Beso's liabilities and financial condition as well as "any matter" that could affect its bankruptcy estate. DBR counts Ms. Nachum previously sued Ms. Longoria in a California state court for usury. Beso's Chapter 11 filing in January halted that litigation. Ms. Nachum then sued Beso in bankruptcy court, claiming other investors sought capital from her and her husband, Ronen Nachum, with the intention of ousting them from Beso once the company got the funds it needed. Beso has since fought the complaint, which the bankruptcy judge will hold a conference on next month. On July 18, Judge Mike K. Nakagawa denied the Nachums' "emergency request" for him to immediately consider wresting control of Beso away from an investor group that includes Ms. Longoria and handing it to an independent bankruptcy trustee. Ms. Palank previously reported that the Nachums have said the trustee could review Beso's financial records and see whether it made sense to close the Eve restaurant, noting the closure of the business's "most important asset" is a big concern for Beso's feasibility. The Nachums are represented by: Brian D. Shapiro, Esq. LAW OFFICE OF BRIAN D. SHAPIRO, LLC 228 South 4th Street, Suite 300 Las Vegas, NV 89101 Tel: 702-386-8600 Fax: 702-383-0994 E-mail: mail@brianshapirolaw.com About Beso LLC Beso, LLC, co-owned by "Desperate Housewives" star Eva Longoria, filed for Chapter 11 bankruptcy protection on January 6, 2011 (Bankr. D. Nev. Case No. 11-10202). Beso, LLC, runs a Las Vegas restaurant that opened two years ago. It disclosed assets of $2,512,007 and liabilities of $5,680,339 in the schedules attached to the Chapter 11 petition. Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, in Las Vegas, Nevada, serves as counsel to the Debtor. The petition was signed by William M. Braden, manager. BOSTON SCIENTIFIC: Fitch Upgrades Issuer Default Rating From BB+ ---------------------------------------------------------------- Fitch Ratings has upgraded Boston Scientific Corp.'s (NYSE: BSX) debt ratings: -- Issuer Default Rating (IDR) to 'BBB-' from 'BB+'; -- Unsecured bank credit facility to 'BBB-' from 'BB+'; -- Senior unsecured notes to 'BBB-' from 'BB+'. The rating action applies to approximately $4.9 billion of debt. The Rating Outlook has been revised to Stable from Positive. Rationale: The rating action is supported by the company's steady paydown of debt and its increasingly stable operations. From Sept. 30, 2010 through March 31, 2011, BSX has paid down roughly $1.1 billion of debt with free cash flow (FCF) (net cash flow from operations less capital expenditures) and proceeds from the divestiture of its Neurovascular business. As a result, leverage (total debt/EBITDA) decreased to 2.4 times (x) from 3.1x. In October 2010, Fitch revised BSX's Rating Outlook to Positive in anticipation of the company potentially operating with leverage sustainably below 2.5x. BSX has stabilized its operations, particularly with regard to its Cardiac Rhythm Management (CRM) business, which includes its implantable cardioverter defibrillator (ICD) franchise. The company has recaptured some of the U.S. market share loss that was caused by a 30-calendar day U.S. ship-hold on its ICDs that ended in April 2010. Profitability within BSX's drug-eluting stent (DES) business should continue to improve with the announced market exit of a competitor and the expected 2012 introduction of its Promus Element (PE) stent in the U.S. and Japan. PE sales are significantly more profitable than the sales of its currently marketed Promus stent. Rating Drivers: The key rating drivers for this credit are leverage, EBITDA margins, FCF and general operational stability. The 'BBB-' leverage range for this credit is approximately 2.0x-2.5x. Margin variability of less than 300 basis points and material FCF generation are also expected. ICD Business Stabilizing: Fitch believes BSX will be able to maintain its current U.S. ICD share, given the positive attributes of its products, the relative sticky nature of client relationships, and new product introductions in this segment. BSX's domestic ICD share bottomed around June 30, 2010, shortly after the ship-hold period ended. The company has since recaptured roughly half of its lost share. Longer term, the FDA's approval for the expanded use of BSX's ICDs in patients with less severe forms of heart failure should incrementally help growth and margins for this segment. Improved Profitability Prospects for Des Business: New product flow should help to increase the profitability of BSX's stent business. The company expects to launch PE into the U.S. and Japanese markets in mid-2012. The expected share shift to PE from BSX's current platform will improve the company's DES margins. However, domestic and European pricing/margin pressures will likely persist in the near term, with BSX bucking the trend because of the expected favorable mix-shift to PE. While BSX should benefit from margin expansion in its DES franchise, tight pricing is challenging DES revenue growth. Procedural volume for stents has moderated, in part because of the weak employment environment, which will likely persist in the near term. A recently published study that suggests that some DES use is unnecessary may also modestly weigh on growth during the next 12 months. However, Johnson & Johnson (JNJ) announced it would exit the DES market by the end of 2011. This starts the race to capture roughly $400 million in annual global sales left by JNJ's market exit. Steady Performance from Other Businesses: Fitch expects revenue growth for BSX's Endosurgery, Electrophysiology and Neuromodulation businesses to persist. Moderate procedure growth and only incremental pricing pressure remain supportive for profitable growth in these segments. In addition, BSX remains committed to investing in new product development for these businesses. Litigation and Regulatory Concerns: BSX has resolved a significant number of litigation issues during the past two years, including a $1.725 billion cash settlement paid to JNJ in 2010 to end three patent lawsuits. However, financial risk related to other litigation remains. The good news for the company is that recent court decisions have ruled against JNJ regarding patent lawsuits involving BSX. While the healthcare reform-related 2.3% excise tax (beginning in 2013) on U.S. device sales is expected to pressure margins by approximately one percentage point, Fitch believes BSX's focus on cost reduction and the continued development of new value-added, higher margin devices will help to mitigate this risk. Healthcare reform should also result in moderate volume increases in 2014-2016, when the bulk of the uninsured are expected to obtain coverage. Though the Centers for Medicare and Medicaid Services (CMS) has not yet written all of the rules and regulations for the reform law, Fitch does not expect the ultimate implementation of healthcare reform to affect BSX's credit rating. Priorities for Cash: Fitch expects BSX will generate $1 billion to $1.2 billion in FCF in 2011, excluding approximately $300 million in litigation payments. Fitch believes BSX's acquisition strategy will remain targeted, focusing on areas that offer innovation and growth. BSX will likely consider share repurchases in lieu of debt reduction, once its leverage remains consistent with the 'BBB-' rating category. Fitch anticipates FCF will be sufficient to fund targeted acquisitions and, potentially, share repurchases. As such, Fitch expects BSX will operate with leverage (total debt/EBITDA) ranging between 2.2x-2.4x during 2011-2012. Adequate Liquidity: FCF for the latest 12-month period (LTM) ending March 31, 2011 was $240 million, which includes a $750 million cash litigation payment to Johnson & Johnson and $296 million payment to the U.S. Department of Justice. At March 31, 2011, BSX had approximately $595 million in cash/short-term investments; full availability on its $2 billion revolver, maturing on June 30, 2013; and full availability on its $350 million 364-day accounts receivable facility, maturing in August 2011. The company had approximately $4.95 billion in debt, with roughly $50 million maturing in 2012, $700 million in 2013, $600 million in 2014, $1.25 billion in 2015, and $600 million in 2016. BOWE BELL: Vendor Finance Agreement Not Part of Assets Sale ----------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware, on July 13, 2011, issued an amended order authorizing Mail Systems Liquidation, Inc., formerly known as Bowe Systec, Inc., to sell substantially all of its assets to Contrado BBH Funding, LLC, free and clear of all liens, claims and interests. Pursuant to the amended order, the Debtors, the highest and best bidder and PNC Equipment Finance, LLC and PNC Canada Branch agreed a vendor finance agreement will not constitute an acquired assets and will not be assumed and assigned by the Debtors to the highest and best bidder. There are no brokers involved in consummating the sale and no brokers' commissions are due. As reported in the Troubled Company Reporter on June 17, the Court approved on June 2, the sale of substantially all of the assets of Bowe Systec, Inc., et al., to Colorado BBH Funding, LLC. Upon the closing of the Sale, the Debtors are authorized and directed to assume and assign each of the Acquired Contracts free and clear of all liens, claims and interests. The payment of the applicable Cure Amounts (if any) by the Debtors or the Highest and Best Bidder, as applicable, will (a) effect a cure of all defaults existing thereunder as of the Closing Date and (b) compensate for any actual pecuniary loss to such Contract Counterparty resulting from such default. About Bowe Bell Headquartered in Wheeling, Ill., BOWE BELL + HOWELL -- http://www.bowebellhowell.com/-- is a leading provider of high- performance document management solutions and services. In 1936, the company pioneered gripper arm mail-inserting systems and has one of the world's largest installed bases of such inserters as a result of the technology's flexibility, performance and reliability. The company's complete portfolio of inserting, sorting, plastic card, integrity, cutting, packaging, print-on- demand and software solutions is one of the most comprehensive product offerings for paper-based communications. These solutions are supported by one of the largest dedicated service organizations in the industry. In addition to its headquarters offices, the company maintains major manufacturing and service locations in Durham, N.C. and Bethlehem, Penn. Bowe Bell + Howell sought bankruptcy protection in the U.S. as part of a deal to itself to creditor Versa Capital Management Inc. to pay off debt. Bowe Systec, Inc., Bowe Bell + Howell Holdings, Inc., and other affiliates, including Bowe Bell + Howell Holdings, Inc., filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 11-11186) on April 18, 2011. Bowe Systec estimated assets and debt of $100 million to $500 million as of the bankruptcy filing. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel. McDermott Will & Emery is the Debtors' special corporate counsel. Focus Management Group is the Debtors' financial advisors. Lazard Middle Market LLC is the Debtors' investment banker. The Garden City Group, Inc is the Debtors' claims and notice agent. Bowe Bell + Howell International Ltd., BBH's Canadian subsidiary, commenced parallel ancillary proceeding under Part IV of the Companies' Creditors Arrangement Act. BBH Canada, as the proposed foreign representative for the Debtors in the ancillary proceeding, will ask an Ontario Superior Court judge to recognize the bankruptcy proceedings in the U.S. PricewaterhouseCoopers Inc. is the prospective Information Officer in the Canadian Proceeding. Versa Capital Management, Inc. on June 27 announced the completion of its previously publicized acquisition of the assets of Bowe Bell + Howell and the formation of a new company and brand, Bell and Howell, LLC. BUILDERS FIRSTSOURCE: Incurs $15.48 Million Net Loss in Q2 ---------------------------------------------------------- Builders FirstSource, Inc., reported a net loss of $15.48 million on $206.39 million of sales for the three months ended June 30, 2011, compared with a net loss of $19.04 million on $211.48 million of sales for the same period during the prior year. The Company also reported a net loss of $36.73 million on $369.22 million of sales for the six months ended June 30, 2011, compared with a net loss of $50.42 million on $372.85 million of sales a year ago. The Company's balance sheet at June 30, 2011, showed $396.79 million in total assets, $269.88 million in total liabilities, and $126.91 million total stockholders' equity. "We are very encouraged by our second quarter results, as our near break-even Adjusted EBITDA was our best operating performance since the third quarter of 2007," said Floyd Sherman, Builders FirstSource Chief Executive Officer. "We finished the current quarter with sales of $206.4 million, down just 2.4 percent compared to sales of $211.5 million in the second quarter of 2010. While U.S. single-family housing starts and average commodity prices were down 13.1 percent and 20.8 percent, respectively, over this same time period, our sales volume was up slightly, which we believe is indicative of significant market share gains during the quarter." A full-text copy of the press release announcing the financial results is available for free at http://is.gd/LznQgw About Builders FirstSource Headquartered in Dallas, Texas, Builders FirstSource Inc. -- http://www.bldr.com/-- supplies and manufactures building products for residential new construction. The Company operates in 9 states, principally in the southern and eastern United States, and has 55 distribution centers and 51 manufacturing facilities, many of which are located on the same premises as its distribution facilities. Builders FirstSource reported a net loss of $95.51 million on $700.34 million of sales for the year ended Dec. 31, 2010, compared with a net loss of $61.85 million on $677.88 million of sales during the prior year. * * * Builders FirstSource Inc. carries 'CCC+' issuer credit ratings, with negative outlook, from Standard & Poor's. S&P affirmed the ratings in April 2011. "The ratings affirmation reflects our belief that Builders FirstSource will likely continue to generate negative free cash flow over the upcoming year, given the ongoing weakness in new residential housing markets. While the company's liquidity position, which we currently view as adequate, is likely to somewhat improve due to the increased cash balances following the planned refinancing and the extended maturity of its revolving credit facility, it will likely continue to rely primarily on its cash balances to meet its interest and operating obligations until total housing starts improve at least 35% from 2010's level. If housing starts were to remain at its recent historically low levels, we believe the proposed refinancing would allow Builders FirstSource to fund its anticipated cash shortfall for approximately two years. The ratings also reflect what Standard & Poor's Ratings Services considers to be the company's vulnerable business profile given its significant exposure to highly cyclical new residential construction markets and its narrow end-market focus and geographic scope," S&P elaborated. In April 2011, Moody's Investors Service assigned 'Caa2' corporate family rating and probability of default ratings to Builders FirstSource. Moody's said the 'Caa2' Corporate Family Rating results from very weak operating performance due to ongoing pressures in the residential new construction end market, the primary driver of BLDR's revenues. Although some areas within BLDR's primary geographic markets of North Carolina and South Carolina may have some pockets of strength, overall, Moody's does not expect substantial improvement in new housing starts in 2011 relative to 2010. The company's products are highly price sensitive to competition and ongoing market conditions, making it difficult for it to pass on substantial price increases. It is also exposed to fluctuating costs associated with lumber, its major raw material, adding to earnings volatility. For 2010, adjusted operating margins are inadequate at negative 7.6% and free cash flow-to-debt is insufficient at negative 15.3% (adjusted per Moody's methodology). The company's inability to generate positive earnings will result in very weak credit metrics for the foreseeable future and will require cash to fund operating shortfalls. CAMTECH PRECISION: Avstar's Plan to Pay Unsecured Claims in Full ---------------------------------------------------------------- Avstar Fuel Systems, Inc., a debtor-affiliate of Camtech Precision Manufacturing, Inc., et al., submitted to the U.S. Bankruptcy Court for the Southern District of Florida, a Plan of Reorganization and explanatory disclosure statement as of July 5, 2011. The Debtor will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, cash payments under the Plan will come from the operation of the Debtor's business in the ordinary course prior to and after the effective date. Currently, the Debtor's cash flow is positive and the Debtor asserts that its is able to perform all of its obligations under the Plan. In order to assist in funding the Debtor's business operations under the Plan, the Debtor may retain its cash on hand, the funds in its bank account, and may retain amounts received from accounts receivable to pay accounts payable. Treatment of Claims and Interests Class 1 -- Allowed DIP Lender Claim ($150,000). On the effective date, the DIP lender will subordinate its claims to all allowed claims as its purchase price for the Debtor's equity. Class 2 -- Allowed Regions Secured Claim. On the effective date, Regions will receive: (i) $1,920,000 in 96 equal monthly payments of $20,000; (ii) a security interest in the furniture, fixture and equipment of the Debtor to secured payment of the $1,920,000; and (iii) the respective personal guaranties of Ronald Weaver, an insider of the Debtor, and his wife Jacqueline Weaver, for any amounts owed to Regions with respect to $1,920,000. Class 3 Allowed Wells Fargo Equipment Finance Inc. Claim. Commencing on the effective date, Wells Fargo will receive a total of $105,000 in 60 equal monthly payments of $1,750. The Debtor will be permitted to prepay without penalty. Class 4 Allowed General Unsecured Claims ($168,297, excluding any claims by Air Craft Carburetors and Precision Airmotive). Commencing within 90 dates after the effective date, holders of general unsecured claims will be paid in the full amount of their allowed claims in equal quarterly payments for 60 months, which will accrue at an interest of 5% per annum, or at a rate as otherwise determined by the Court. Class 5 Allowed Equity Interests. On the effective date, all allowed equity interests in the Debtor will be deemed canceled and extinguished. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/CAMTECHPRECISION_AVSTARDS.pdf About Camtech Precision Manufacturing, Inc. Jupiter, Florida-based Camtech Precision Manufacturing, Inc., filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 10-22760) on May 10, 2010. Craig I Kelley, Esq., who has an office in West Palm Beach, Florida, assists the Company in its restructuring effort. According to the schedules, the Company says that assets total $10,977,673 while debts total $14,625,066. The Company's affiliate, R&J National Enterprises, Inc., filed a separate Chapter 11 petition. CARIBBEAN PETROLEUM: Settlement Deal With U.S. Gov't Approved ------------------------------------------------------------- Caribbean Petroleum Corporation and its debtor affiliates have obtained approval from the U.S. Bankruptcy Court for the District of Delaware of a settlement agreement it entered with the United States Government. The Settlement Agreement resolves claims and alleged liabilities arising under several environmental laws asserted by the federal government, as well as alleged obligations arising under environmental law with respect to the Debtors' former petroleum terminal location in Bayamon, Puerto Rico and certain service stations owned or leased by the Debtors. Specifically, the agreement provides for: (a) the allowance of the U.S. Government's general unsecured claims for costs and penalties for $18,725,130; (b) the allowance of the U.S. Government's administrative expense claims for costs and penalties for $8,200,000; (c) the Debtors' agreement, memorialized in a separate stipulation, to fund the Tank Asset Reserve Fund for $850,000; (d) the resolution and satisfaction of the Debtors' obligations to perform work pursuant to the 1995 Administrative Order on Consent and the 2010 Unilateral Administrative Order for Removal Activities under the Clean Water Act; and (e) the covenant by the U.S. not to file a civil action or to take any administrative or other civil action against the Debtors to (i) recover response costs or obtain injunctive relief with respect to the Facility pursuant to the Comprehensive Environmental Response, Compensation and Liability Act; or (ii) to obtain civil penalties with respect to the 2010 UAO violations related to the Facility alleged in the U.S. Government's Claims. About Caribbean Petroleum San Juan, Puerto Rico-based Caribbean Petroleum Corporation, aka CAPECO, owns and operates certain facilities in Bayomon, Puerto Rico for the import, offloading, storage and distribution of petroleum products. Caribbean Petroleum sought Chapter 11 protection (Bankr. D. Del. Case No. 10-12553) on Aug. 12, 2010, nearly 10 months after a massive explosion at its major Puerto Rican fuel storage depot virtually shut down the company's operations. The Debtor estimated assets of US$100 million to US$500 million and debts of US$500 million to US$1 billion as of the Petition Date. Affiliates Caribbean Petroleum Refining, L.P., and Gulf Petroleum Refining (Puerto Rico) Corporation filed separate Chapter 11 petitions on Aug. 12, 2010. John J. Rapisardi, Esq., George A. Davis, Esq., Peter Friedman, Esq., and Zachary H. Smith, Esq., of Cadwalader, Wickersham & Taft LLP, in New York, serve as lead counsel to the Debtors. Mark D. Collins, Esq., and Jason M. Madron, Esq., of Richards, Layton & Finger, P.A., in Wilmington, Delaware, serve as local counsel. The Debtors' financial advisor is FTI Consulting Inc. The Debtors' chief restructuring officer is Kevin Lavin of FTI Consulting Inc. Kurtzman Carson Consultants LLC serves as the noticing, claims and balloting agent to the Debtors. In December 2010, the Debtor won bankruptcy court approval to sell its business to Puma Energy International for US$82 million. Puma obtained Capeco's entire retail network, which consists of 157 locations, gasoline, diesel and other fuel storage facilities as well as undeveloped land and a private deep water jetty. This is Caribbean Petroleum's second stint in Chapter 11. CATHOLIC CHURCH: Wilm. Plan Confirmation Hearing Resumes Today -------------------------------------------------------------- The Catholic Diocese of Wilmington, Inc. and its attorneys are seeking ways to reconcile the church's canon law with a federal judge's ruling at a confirmation hearing July 14 on the Diocese's Chapter 11 Plan of Reorganization, according to the July 21, 2011 issue of The Dialog. At the July 14 hearing, Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware said that in asking him to approve a plan that impairs potential recoveries for victims of priest sex abuse while not impairing the abusers themselves, the Diocese had not proposed a plan in good faith, as required under the Bankruptcy Code. Judge Sontchi asserted that he will only confirm the Plan if it contains a stipulation against the Diocese providing financial assistance to priest sex abusers. The Diocese is in a dilemma over Judge Sontchi's words because canon law requires the bishop to provide some type of support for priests removed from ministry, if they cannot provide for themselves, notes the Dailog. The Dialog revealed that Msgr. J. Thomas Cini, vicar general, in a July 15 memo to diocesan and parish employees said that the Diocese will not abandon its Settlement Plan but the bishop and his advisers are looking for ways to adjust some things in order to satisfy Judge Sontchi. "There is a commitment not to allow the hard work of these past months and considerable effort and time spent on reaching agreements with survivors of clergy sexual abuse, lay employees and pensioners, and other creditors to fall apart . . . The discussion to find solutions have already begun," Msgr. Cini said. "The Diocese has to consider what it can do that's consistent with canon law and with what Judge Sontchi wants," counsel for the Diocese, Anthony Flynn, Esq., was quoted by The Dialog as saying. As previously reported, Bishop Francis Malooly told Judge Sontchi that he must reserve the right to provide charity to abuser priests as a part of the Plan because church law requires him to provide "sustenance" to the men as long as they have not been kicked out of the priesthood by the pope. However, he noted that in deference to feelings of those who survived sexual abuse at the hands of clergy, he would not be inclined to grant charity to the men should they seek it. Mr. Flynn told The Dialog that there may be a way to reconcile canon law with the Judge's push for a stipulation. He said that the Diocese can provide in the Plan that abusers would not be eligible for a pension or the Plan could state that any claims of the abusers against the estate would be disallowed. By doing so, Mr. Flynn hopes that the Diocese can persuade Judge Sontchi that it meets the "good faith" requirement. The Dialog said the Diocese did persuade Judge Sontchi at the July 14 hearing that a question he had asked July 8, on how the Diocese could fully fund the settlement, had been solved. Chief Financial Officer Joseph P. Corsini had said July 8 a commercial loan for more than $9 million was being sought by the Diocese to fund its settlement plan. He testified at the July 14 hearing that the Diocese had a willing lender and auditing for the loan was under way. He also said if the commercial loan was delayed, the Diocese had already secured a bridge loan from "internal funding" sources, non-debtor Catholic entities, reports the Dialog. "I was pleased with the way it all came together," Mr. Corsini was quoted by the Dialog as saying. Thomas S. Neuberger, Esq., an attorney for survivors of clergy sexual abuse, suggested in court that the Diocese's Reorganization Plan be confirmed as submitted, but he asked the court for an injunction compelling the reorganized diocese not to provide aid to priests who committed sexual abuse. Judge Sontchi ruled that the Diocese should include that prohibition in the settlement plan before he approves it. Following that ruling, Diocesan attorneys asked for a three-week continuance before the next hearing. Mr. Neuberger requested a week-long continuance and Donald Detweiler, attorney for the Lay Employees Committee, also asked the judge to require a status report in a week because, "this estate cannot continue to sustain these costs. . .. If the settlement plan cannot be saved, we're all in a great deal of trouble." The Confirmation Hearing was continued to July 28, 2011. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. CATHOLIC CHURCH: Wilm. Wants Automatic Stay Extended for Parishes ----------------------------------------------------------------- The Catholic Diocese of Wilmington, Inc. asks the U.S. Bankruptcy Court for the District of Delaware to renew the existing extension of the automatic stay to certain parishes to prevent the continued prosecution of certain pending actions arising under the Delaware Child Victim's Act of 2007, in which the Diocese and a parish are co-defendants. The Court previously extended the automatic stay to the Diocese's parishes with respect to all pending Parish Co-Defendant Cases and stayed in their entirety until the earlier of the conclusion of the confirmation hearing of the Diocese's Chapter 11 Plan of Reorganization or six months from January 21, 2011, unless otherwise ordered by the Court. James L. Patton, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, notes that the Debtor submitted the Plan but, at the hearing on July 14, 2011, the Court conditionally denied confirmation of the Plan, and continued the Confirmation Hearing to July 28, 2011, which is seven days after the expiration of the existing extension of the automatic stay to the Parishes. Mr. Patton reveals that the Diocese is actively engaged in discussions with parties-in-interest regarding a possible solution, consistent with the Court's rulings that would salvage the Plan for the benefit of all parties. With that purpose in mind, the Debtor seeks to renew the existing extension of the automatic stay, which expires July 21, 2011, to further stay the Parish Co-Defendant Cases in their entirety until the earlier of (i) two business days following denial of confirmation of the Plan as a Settlement Plan or (ii) 60 days after confirmation of the Plan as a Settlement Plan. Mr. Patton contends that the extension of the stay will preserve the status quo while the Diocese and the other parties-in- interest work toward confirming and consummating the Settlement Plan. Absent a renewal of the existing extension of the stay, the Parish Corporations and the Diocese could find themselves embroiled once again in the more than 70 pending Parish Co- Defendant Cases. Allowing the Parish Co-Defendant Cases to move forward at this time, in different courts and in a piecemeal manner will severely hinder the Debtor's ability to focus on Plan confirmation and may upset the delicate balance of settlements upon which the Settlement Plan is premised, Mr. Patton adds. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. CATHOLIC CHURCH: Wilm. Wants Removal Period Extended Until October ------------------------------------------------------------------ The Catholic Diocese of Wilmington, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to further extend through October 31, 2011, the period within which it may remove various civil actions pending as of the Petition Date. The Actions Removal Period was previously extended to July 25, 2011, pursuant to the Diocese's sixth extension request. James L. Patton, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates that since the filing of the Sixth Extension Request, the Diocese has proposed and solicited acceptances of its Chapter 11 Plan of Reorganization. He notes that the Diocese is currently seeking confirmation of the Plan as a Settlement Plan, which would obviate any removal of the Actions. However, if the Plan is not confirmed as a Settlement Plan, it may proceed as a "CDOW-Only Plan," which expressly contemplates the Diocese exercising its removal rights under certain circumstances to allow for an efficient and consistent process to liquidate claims. Mr. Patton asserts that the Current Deadline should be extended to allow the Court to consider confirmation of the Plan as a Settlement Plan or, failing that, as a CDOW-Only Plan. The Court will convene a hearing on September 13, 2011, to consider the Debtors' request. By application of Rule 9006-2 of the Local Rules of Bankruptcy Practice and Procedures of the United States Bankruptcy Court for the District of Delaware, the Debtors' Removal Period is automatically extended through the conclusion of that hearing. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. CATHOLIC CHURCH: Milw. Judge Sets Oct. 17 Claims Bar Date --------------------------------------------------------- Judge Susan V. Kelley of the U.S. Bankruptcy Court for the Eastern District of Wisconsin set: * October 17, 2011, as the general claims bar date for all entities, including governmental units but excluding abuse survivors, to file claims in the Archdiocese of Milwaukee's Chapter 11 case; and * February 1, 2012, as the bar date for abuse survivors to file a claim. The deadline for filing a proof of claim in connection with the Debtor's rejection of executory contracts or unexpired leases is the later of (i) the General Bar Date, or (ii) the date that is 28 days after entry of an order approving the rejection of an executory contract or unexpired lease pursuant to which the entity asserting the Rejection Damages Claim is a party. The Rejection Bar Date will not apply to the claims of Abuse Survivors. If the Debtor amends its Schedules of Assets and Liabilities or Statements of Financial Affairs so as to add an entity not currently listed therein or to alter the amount, priority, classification, or other status of a listed claim, the holders of the claims may file amended or original proofs of claim to take into account the amendments to the Schedules. The deadline for filing Amended Schedules Claims will be the later of (a) the General Bar Date, or (b) 28 days after the holder of a claim is served with notice that the Debtor amended its Schedules to add such a claim or to reduce, delete, or change the amount, priority, classification, or other status of the claim. About The Diocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CENTRALIA OUTLETS: Court Confirms Amended Plan of Reorganization ---------------------------------------------------------------- On July 19, 2011, the U.S. Bankruptcy Court for the Western District of Washington confirmed Centralia Outlets, LLC's Amended Plan of Reorganization, as modified on July 14, 2011. As reported in the TCR on June 14, 2011, the Bankruptcy Court approved the Amended Disclosure Statement explaining the Debtor's Amended Plan of Reorganization. Only Sterling Savings Bank filed an objection to the Disclosure Statement. Centralia and Sterling have resolved all issues raised in the Sterling objection through modifications contained in the modified plan. A copy of the Debtor's Amended Plan of Reorganization dated May 20, 2011, as modified on July 14, 2011, is available at: http://bankrupt.com/misc/centralia.amendedplamodifiedjuly14.pdf Pursuant to the Modified Plan, on the Effective Date, Debtor will pay to Sterling the amount of $80,000, which Sterling will apply to Centralia's loan obligations. Centralia will pay the Sterling Secured Claim ($24,290,000 including legal fees) as follows: (i) monthly interest only payments computed at the rate of 4.5% per annum for the first 12 months from the Effective Date; (ii) monthly interest only payments computed at the rate of 5.0% per annum from the 13th month through the 30th month; (iii) monthly principal and interest payments computed using the rate of 5.25% per annum and a 30 year amortization commencing on the first day of the 31st full month following the Effective Date, through the last day of the 84th full month following the Effective Date, at which time all accrued and unpaid interest and principal will be due in full. Holders of General Unsecured Claims will receive payment of: (i) one half of their Allowed Claims on the later of the Effective Date and ten (10) days after such claim is allowed, and (ii) one half on the later of sixty (60) days after Effective Date and ten (10) days after such claim is allowed, together with interest from the Effective Date at the Sterling Interest Rate. Holders of the Interests in the Debtor will retain their Interests. About Centralia Outlets Centralia Outlets LLC is the owner of the Centralia Factory Outlets mall in Centralia, Washington. The mall, located on Interstate 5 in Centralia, is 80% occupied, and generates net income, after debt service, of $80,000 to $100,000 a month. Centralia filed for Chapter 11 after receiving an order sending the mall to receivership. Sterling Bank prevailed on a state court to order the appointment of a receiver based on alleged non- financial defaults in the mortgage. The mall owner said that principal and interest payments were current on the $24.3 million owing to Sterling as of the petition date. Centralia filed for Chapter 11 protection (Bankr. W.D. Wash. Case No. 10-24529) on Dec. 3, 2010, after receiving an order sending the mall to receivership. Attorneys at Perkins Coie LLP, and Bush Strout & Kornfeld LLP, represent the Debtor. The Debtor disclosed $29,206,999 in assets and $23,999,507 in liabilities. CHARBEL INVESTMENT: Case Summary & 2 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Charbel Investment Association, Inc. 5800 Philips Highway Jacksonville, FL 32216 Bankruptcy Case No.: 11-05431 Chapter 11 Petition Date: July 25, 2011 Court: U.S. Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Jason A. Burgess, Esq. THE LAW OFFICES OF JASON A. BURGESS, LLC 2350 Park Street Jacksonville, FL 32204 Tel: (904) 521-9868 E-mail: jason@jasonaburgess.com Scheduled Assets: $969,358 Scheduled Debts: $1,228,294 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/flmb11-05431.pdf The petition was signed by Nehme Richa, director. CHINA TEL GROUP: Shares Issued Exceed 5% of Outstanding Shares -------------------------------------------------------------- VelaTel Global Communications, Inc., formerly China Tel Group, Inc., issued 11,900,094 shares of its Series A common stock. The consideration the Company received in exchange for the issuance of these shares was reduction of accounts payable in the amount of $2,911,254 for professional services previously performed. On May 25, 2011, the Company issued 398,042 shares of Stock. The consideration the Company received in exchange for the issuance of these shares was reduction of debt owed pursuant to settlement of a liability under a convertible promissory note. However, this issuance corrected an error in a prior issuance of 659,782 shares issued on May 2, 2011, and previously disclosed in the Company's quarterly report on Form 10-Q, filed May 16, 2011, for the period ending March 31, 2011. On June 2, 2011, the Company issued 1,046,334 shares of Stock. The consideration the Company received in exchange for the issuance of these shares was the reduction of $154,125 debt owed pursuant to settlement of a liability under a convertible promissory note. On July 5, 2011, the Company issued 1,257,137 shares of Stock. The consideration the Company received in exchange for the issuance of these shares was the reduction of $154,125 debt owed pursuant to settlement of a liability under a convertible promissory note. On July 14, 2011, the Company issued 12,754,179 shares of Stock. The consideration the Company received in exchange for the issuance of these shares was reduction of accounts payable in the amount of $2,916,502 for services previously performed. On July 14, 2011, the Company issued 166,670 shares of Stock. The consideration the Company received in exchange for the issuance of these shares was partial agreed payment for current services performed. On July 15, 2011, the Company issued 37,500,000 options to purchase shares of Stock at an exercise price of $0.13 per share. The options were issued to eligible recipients under the Company's 2011 Stock Option and Incentive Plan, which Plan was previously disclosed and approved under Definitive Information Statement filed on Schedule 14C on June 10, 2011. All options were fully vested upon issuance and constitute non-statutory options under the terms of the Plan. The aggregate number of shares of Stock the Company has issued, plus securities issuable upon exercise of options the Company has issued, exceeds in the aggregate five percent of the number of shares of Stock that were issued and outstanding as of May 16, 2011, when the Company last reported unregistered sales of equity securities in its quarterly report on Form 10-Q for the period ending March 31, 2011. About China Tel Based in San Diego, California, and Shenzhen, China, China Tel Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/-- provides high speed wireless broadband and telecommunications infrastructure engineering and construction services. Through its controlled subsidiaries, the Company provides fixed telephony, conventional long distance, high-speed wireless broadband and telecommunications infrastructure engineering and construction services. ChinaTel is presently building, operating and deploying networks in Asia and South America: a 3.5GHz wireless broadband system in 29 cities across the People's Republic of China with and for CECT-Chinacomm Communications Co., Ltd., a PRC company that holds a license to build the high speed wireless broadband system; and a 2.5GHz wireless broadband system in cities across Peru with and for Perusat, S.A., a Peruvian company that holds a license to build high speed wireless broadband systems. The Company reported a net loss of $66,623,130 on $955,311 of revenue for the year ended Dec. 31, 2010, compared with a net loss of $56,065,029 on $657,876 of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010 showed $3,888,292 in total assets, $28,11,423 in total current liabilities, all current, $35,483 in mandatory redeemable Series B common stock, and a $24,260,614 total stockholders' deficit. As reported by the TCR on April 21, 2011, Mendoza Berger & Company, LLP, in Irvine, California, expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The independent auditors noted that the Company has incurred a net loss of $56,041,182 for the year ended Dec. 31, 2009, cumulative losses of $165,361,145 since inception, a negative working capital of $68,760,057, and a stockholders' deficit of $63,213,793. CHURCH OF SOUTH: Senior Pastor Fights to Keep Campus Afloat ----------------------------------------------------------- Jennifer LeClaire at CHARISMA Magazine reports that the senior pastor of The Church of South Las Vegas is battling a Babylonian system to save its campus from foreclosure. According to the report, the Church of South Las Vegas paid $4.5 million for 3.3 acres of Las Vegas Valley land three years ago. In March, that land appraised for $475,000-a 90 percent decline. The church owes a combined $7.7 million on the property and land. It appraised for $2.3 million. So, like many property owners in Las Vegas-one of the hardest hit real estate markets in the nation -- Mr. Perez is upside down ... $5.4 million upside down. The report relates that Mr. Perez said the real battle began when the bank wanted to collect $1.8 million in church offerings earmarked for a building project for the fast-growth church. When Perez tried to negotiate with the bank to reduce the principal of the $7.7 million loan in line with actual property values, the bank refused. The Church of South Las Vegas decided a strategic default was the best stewardship move. The church stopped making payments on the loan on May 1. The bank subsequently filed suit against the church on June 17. And in July, the church filed for Chapter 11 bankruptcy in effort to save its campus. Church at South Las Vegas -- http://www.thechurchlv.com/-- operates a church at 3051 Horizon Ridge Parkway. It filed a Chapter 11 petition (Bankr. D. Nev. Case No. 11-20839) on July 8, 2011. John P. Witucki, Esq., at Gordon Silver, in Las Vegas, Nevada, serves as counsel to the Debtor. The Debtor estimated assets and debts of up to $10 million. COACH AMERICA: S&P Affirms 'B-', But Revises Outlook to Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on Coach America Holdings Inc. "However, we revised the outlook to negative from stable. We also lowered the issue rating on the company's first-lien debt to 'B-' from 'B' and revised the recovery rating to '3' from '2', indicating our expectations that lenders would receive a meaningful (50%-70%) recovery in the event of a payment default," S&P said. The ratings on Coach reflect its highly leveraged capital structure, weak profitability, and limited liquidity as well as the capital-intensive nature of the bus transportation industry. Positive credit factors include the company's significant market position (albeit in highly fragmented markets), diversified customer base, and contractual arrangements with certain customers that provide some stability to revenues and earnings. "We characterize the company's business profile as vulnerable and its financial profile as highly leveraged," S&P related. Coach has been experiencing earnings pressures as a result of the economic downturn in the U.S. Demand has been especially hard hit in the charter business, although increased demand for contract services (in which the company provides commuter, work, or school- related transportation) has offset the impact somewhat. Coach has responded to demand pressures by successfully reducing costs and improving internal operating efficiencies. Despite these efforts, however, operating results are down year-to-year. "We expect operating performance to improve over time as the economy recovers," said Standard & Poor's credit analyst Lisa Jenkins. "However, we believe the recovery will take some time and that Coach's credit metrics will remain weak over the coming year. In addition, high fuel prices remain a concern." Coach is the largest charter bus operator and the second-largest motorcoach services provider in the U.S. Coach operates buses under the Coach USA brand name, as well as the Gray Line and American Coach Lines brand names. Coach maintains the leading position in most of the markets in which it competes, but faces competition from many smaller, local players. "The outlook is negative. We believe that currently depressed operating performance and ongoing capital investment requirements will result in continued weak credit metrics and tight liquidity over the coming year. We are likely to downgrade the company if liquidity weakens from current levels or if covenant compliance becomes a concern," said Ms. Jenkins. DETROIT PUBLIC SCHOOLS: Moody's Assigns 'B1' Issuer Rating ---------------------------------------------------------- Moody's Investors Service has assigned a B1 Issuer Rating and negative outlook to the School District of the City of Detroit (MI). The Long Term Issuer Rating reflects Moody's opinion of the ability of the district to honor its senior-most tax-backed financial obligations. SUMMARY RATING RATIONALE The assignment of the B1 Issuer Rating reflects the district's limited operating revenue raising flexibility; long-term trends of population erosion resulting in declining enrollment and revenues; and a weakened balance sheet supported by previously issued deficit elimination bonds. Exacerbating these trends, recent external challenges including an extremely stressed regional economy and pressured state aid revenue stream are expected to continue. The negative outlook reflects the likelihood that district's operations will remain pressured and it may not meet its objective of eliminating sizable accumulated deficits in the near term. Moody's expects internal and external forces to continue to weigh very heavily on the district's capacity to restore structural balance. STRENGTHS * Voter-approved general obligation levy unlimited as to rate or amount that is dedicated to pay debt service * Increased state oversight provides more management stability * No variable rate or swap exposure in debt profile CHALLENGES * Limited operating revenue raising flexibility and weak balance sheet * Long-term trends of tax base and population erosion resulting in declining revenue trends * History of heavy reliance on cashflow borrowing to meet operating needs DETAILED CREDIT DISCUSSION CHALLENGED ECONOMIC TAX BASE; WEAK DEMOGRAPHIC TRENDS PERSIST The district serves the City of Detroit (general obligation unlimited tax rated Ba3 with negative outlook). Despite a few positive developments and diversification of Detroit's economy, the city's economic and demographic profile remains one of the weakest in the nation. Although the recent expansion of casinos and the healthcare sector are important in providing a measure of diversity to the city and the district's tax base, the challenges of the corporate domestic auto manufacturing sector continue to dominate the regional economy. While Detroit is home primarily to research and development and non-manufacturing jobs, its tax base and economic well-being remains extremely vulnerable to this sector. Both Chrysler (rating withdrawn), the district's top tax payer at 6.7% of taxable valuation, and General Motors (long-term rating Ba2), the district's sixth largest tax payer at 1.6% of taxable valuation, emerged from protection from creditors under Chapter 11 of the US Bankruptcy Code late last year and continue to remain a large presence within the district. Chrysler, GM and Ford (long-term rating Ba2) have shown signs of improved operations. Over the past decade, Detroit's population has fallen by nearly twenty-five percent. Despite a labor force which has declined, unemployment levels have remained persistently high. Unemployment has increased more rapidly in 2008 through 2011 (19% in April 2011, compared to 10% state and 8.7% national rates) and is expected to remain high for the foreseeable future. Since 1980, the city's lowest annual unemployment figure was 6.6%, achieved in 2000, compared to 3.6% state and 4.0% nationally that same year. Evidence of economic challenge is also found in the metro area's rate of home foreclosures which is among the highest in the country and poverty rates that persist at rates more than twice the state average. Wealth indicators have generally declined since 1970 (per capita income was 95% of the state average) compared to the 2000 census (PCI equaled 66.4% of the state average). ENROLLMENT SUFFERS CONTINUED DECLINES; REVENUE AND ENROLLMENT DOWNWARD TRENDS EXPECTED TO CONTINUE As the city's population has continued to decline, the district's enrollment, a key determinant to state aid funding, has also declined. During fiscal 1998, the district recorded a peak count of 173,871 pupils. By fiscal 2011, the number of pupils had declined to 75,151 (blended student count) which represents a decline of over 50% of the total student population. Average annual enrollment decline from 2007 through 2011 was approximately 10.4%. This includes a significant decline in fiscal 2007, mostly attributed to the illegal protracted teachers strike and the related school closings at the beginning of the school year. While some students migrated back to the district, the material revenue impact was carried forward and resulted in a long-term loss of a portion of that population and revenue base. The number of pupils is expected to drop to 60,360 by fiscal 2016. Per state law, because the district's enrollment has fallen below 100,000, the district retains first class for its funding purposes, but is no longer designated as a first-class district for all other purposes. Without this special designation, community colleges within the city are no longer prevented from authorizing additional charter schools within the district's boundaries. Growth in charter schools and open enrollment policies in neighboring districts are expected to continue to challenge the district's efforts to attract and retain students and present the district with difficult budgeting challenges and expenditure reductions moving forward. FINANCIAL PROFILE REMAINS EXTREMELY WEAK; BALANCE SHEET SUPPORTED BY DEBT ISSUANCE The district has realized substantial operating deficits for the last eight audited fiscal years, bringing the General Fund balance from a modest $74.7 million in fiscal 2003 (4.7% of General Fund revenues) to a negative $327.3 million (negative 30.5% of General Fund revenues) in fiscal 2010. In fiscal 2004, the district realized a substantial $124 million operating deficit resulting in an unreserved, undesignated General Fund balance of negative $63.7 million. In that same year, the district received approval from the state to refinance approximately $210 million of short-term State Aid Anticipation Notes outstanding as long-term debt payable over 15 years. While the district realized an additional operating loss of $115 million in fiscal 2005, the district recorded a positive General Fund balance of approximately $47 million mainly due to the refinancing. The repayment of the refinanced debt which bolstered General Fund reserves in 2005 began in fiscal 2007. As a part of the conditions for the state approval, the district agreed to maintain a positive General Fund balance and make its finances subject to a Fiscal Review Committee designated by the State Treasurer. The district realized more moderate operating deficits in fiscal 2006 and fiscal 2007 as reflected in the audited financial statements. While the published fiscal 2007 Comprehensive Annual Financial Report reflects a lean $7.2 million General Fund balance, published fiscal 2008 audited financial statement notes a restatement of this balance to a negative $3.78 million (negative 0.3% of General Fund revenues) to correct errors made in calculations for that fiscal year. Fiscal 2008, 2009 and 2010 audited results reflect more substantial operating deficits of $136.9 million, $81.3 million and $114.5 million respectively, bringing the General Fund balance to a negative $327.3 million at the end of the fiscal year. Main drivers of the fiscal 2010 operating deficit included unrealized savings due to delayed labor contract negotiations, loss of state aid revenues, increased delinquent property taxes and charge-backs from Wayne County and unanticipated retirement costs associated with the State's newly offered retirement incentive program. Per state law, in August 2008, the district submitted an updated Deficit Elimination Plan (DEP) to the state. The Governor then appointed a team to review the district's finances which determined that a fiscal emergency did exist at the district. In January 2009, the State Superintendent appointed an Emergency Financial Manager (EFM) to oversee all of the district's financial operations. The appointment of that EFM to the district was extended through June 30, 2011. STATE SUPERINTENDENT ASSIGNS NEW EMERGENCY MANAGER UNDER P.A. 4; UPDATED DEFICIT ELIMINATION PLAN EXPECTED On May 16, 2011, a new Emergency Manager (EM) was appointed to the district with a state-mandated directive to get the district out of its deficit General Fund position by the end of fiscal 2016. He has greatly expanded powers to achieve this under new state legislation passed in March 2011, Public Act 4 (P.A. 4). Public Act 4, which replaced the state's previous legislation regarding stressed municipalities (P.A. 72), allows for earlier state intervention of financially stressed municipalities and greatly increases the authority of appointed emergency managers to make organizational and financial changes, and in the case of a school district, academic and educational changes, that may be necessary to avoid a Chapter 9 bankruptcy. An emergency manager now also has the power to develop and implement financial and operating plans, order millage elections, cancel agreements, suspend the authority and compensation of managers and local elected officials, subject to certain requirements, reject, modify or terminate collective bargaining agreements, and in some cases, sell, lease, or transfer the assets, liabilities, functions, or responsibilities of the municipality. Furthermore, the manager can recommend to the Governor that the municipal government file for Chapter 9 bankruptcy or disband. The new legislation does require the Governor's approval before the EM is authorized to file for Chapter 9, which was not required under P.A. 72. Both the district's previous and current managers outlined substantial changes to the district's organization and operation and some progress has been made. Future changes include the closure of at least 20 additional schools and the restructuring of 40 schools through the state's new Educational Achievement Authority; outsourcing many central office functions, workforce cost containment through layoffs and the renegotiation of contracts with staff and vendors; and the reorganization of the functions of transportation, plant operations, security and technology. To date the district has implemented many reforms and expects to report balanced operations with the close of fiscal 2011. The district's fiscal 2012 budget includes a proposed restructuring of existing short term debt to long term obligations, $230 million of expenditure reductions and does not anticipate a need by the district for any short-term borrowings during that fiscal year. The General Fund revenue budget includes $200 million in one-time debt restructuring proceeds to reduce the current General Fund reserve of negative $327 million to a negative $127 million by June 30, 2012. In 2009, the district had considered filing for federal bankruptcy protection under Chapter 9 of the US Bankruptcy Code as an option to address the General Fund's deficit position. Management now reports that this is not being contemplated, citing that the current EM has expanded powers to achieve financial, operational and academic goals under P.A. 4. Again, the new legislation also requires the EM to secure the Governor's approval before filing for Chapter 9 protection. Moody's will continue to closely monitor the district's credit quality as further developments occur. UPDATED CAPITAL PLAN IN PLACE; HIGH DEBT BURDEN Despite declining enrollments and the closure of some schools, the district faces many deferred maintenance capital needs. The average age of a school exceeds 50 years, even after the recent construction of several new buildings. With an existing high debt burden (13.5%) coupled with slow amortization (42% in ten years), the district will continue to be challenged to address ongoing capital needs at a time of operating pressure. Previous management had outlined $1.2 billion capital plan addressing the district's infrastructure redesign through 2015. With a significant portion of the plan underway, management is hopeful that improvements to the districts infrastructure as well as planned improvements to the district's academic offerings will reverse the trend of significant enrollment loss currently being experienced. Outlook The negative outlook reflects Moody's opinion that district's operations will remain extremely pressured and it may not meet its objective of balancing financial operations or eliminating the accumulated General Fund deficit in the near term. Although the district continues to work with the state to return to balanced operations, Moody's expects internal and external forces to continue to weigh very heavily on the district's capacity to restore structural balance and curtail the continued loss of its student population. What could change the rating - UP * Ability to implement and realize the goals of an updated Deficit Elimination Plan in timely manner * Significant improvement in district financial operations and reserves * Stabilization and growth of the local economy and district's taxbase What could change the rating - DOWN * Inability to implement and realize the goals of the Deficit Elimination Plan in timely manner * Continued revenue losses resulting in ongoing operating deficits and a weakened balance sheet * Significant deterioration in the ability of the tax base to meet debt service on GOULT debt * Substantial change to the debt profile * District filing for federal bankruptcy protection under Chapter 9 of the US Bankruptcy Code KEY STATISTICS 2010 population: 713,777 (a 25% decline from the previous census) Full valuation: $20.2 billion Full value per capita: $28,365 Per capita income as % of the state (2000 census): 66.4% (68.2% of the nation) Largest taxpayer as a % of taxable valuation: 6.7% (Chrysler) Direct debt burden: 9.1% Debt burden: 13.5% Average annual enrollment decline (2007-2011): 10.4% Fiscal 2009 General Fund balance: negative $218.97 million, or negative 19.3% of General Fund revenues Fiscal 2010 General Fund balance: negative $327.3 million, or negative 30.5% of General Fund revenues The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. DOLLAR GENERAL: Moody's Upgrades Corp. Family Rating to 'Ba2' ------------------------------------------------------------- Moody's Investors Service upgraded Dollar General Corporation's Corporate Family Rating and Probability of Default Rating to Ba2 from Ba3. The Speculative Grade Liquidity rating of SGL-1 was affirmed. The upgrade follows Dollar General's redemption in full of its remaining $839 million senior unsecured notes. The rating outlook is stable. This rating action concludes the review for possible upgrade initiated on June 14, 2011. RATINGS RATIONALE "Dollar General has strengthened its capital structure by repaying its senior unsecured notes," said Maggie Taylor a senior credit officer with Moody's. "The stronger capital structure will lead to improved credit metrics more than offsetting recent margin pressure," she added. Pro forma for the debt reduction for the upcoming year ending January 27, 2012, Moody's expects Dollar General's debt to EBITDA to be about 3.2 times versus 3.5 times currently and EBITA to interest expense will be 4.0 times versus 3.5 times currently. These ratings are upgraded: Corporate Family Rating to Ba2 from Ba3 Probability of Default Rating to Ba2 from Ba3 $1.451 billion senior secured term loan B1 to Ba1 (LGD 3, 39%) from Ba2 (LGD 3, 31%) $451 million senior subordinated notes to B1 (LGD 5, 86%) from B2 (LGD 6, 93%) This rating is confirmed and LGD point estimates changed: $512 million senior secured term loan B at Ba3 (LGD 4, to 65% from 55%) This rating is affirmed: Speculative Grade Liquidity rating at SGL-1 This is withdrawn given its repayment in full Senior unsecured notes at B1 (LGD 5, 76%) The Ba2 Corporate Family Rating is supported by Dollar General's solid credit metrics, its dominant position in a segment of retail which Moody's believes is relatively resistant to economic cycles, and its very good liquidity. The rating also reflects Moody's expectation that Dollar General is facing gross margin pressure given rising expenses which cannot be fully passed on to its customers. This will constrain Dollar General's earnings growth . However, Moody's does not anticipate the gross margin pressure impacting Dollar General's credit metrics and expect Dollar General's to maintain its current level of solid credit metrics. Dollar General's ratings are constrained by financial sponsor Kohlberg Kravis Robert's (KKR) controlling interest in Dollar General. Despite Moody's view that KKR has thus far applied a balanced and prudent financial policy at Dollar General, KKR could consider re-leveraging the company at some point in the future. The stable outlook reflects Moody's opinion that Dollar General will be able to maintain solid credit metrics despite the ongoing gross margin pressure it is facing from a rising expense environment. There is also an expectation for measured growth and continued conservative financial policies. An upgrade would require Dollar General to effectively manage the current rising cost environment such that it continues to generate solid operating results. It would also require Dollar General to show evidence that its controlling owner, KKR, supports financial policies which allow the company to maintain credit metrics consistent with a higher rating over the medium term. Quantitatively, an upgrade would require debt to EBITDA to remain below 3.0 times and EBITA to interest expense remain above 4.25 times. Ratings could be downgraded should Dollar General's financial policies become more aggressive. Ratings could also be downgraded should Dollar General's operating performance deteriorate or debt levels increase such that debt to EBITDA is sustained above 4.0 times or EBITA to interest expense falls below 2.5 times. The principal methodology used in rating Dollar General was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Dollar General Corporation, headquartered in Goodlettsville, Tennessee, owns and operates extreme value general merchandise stores. Revenues are over $13 billion. DREIER LLP: Trustee Gets More Time to Serve Complaint ----------------------------------------------------- Sheila M. Gowan, Chapter 11 Trustee for the Estate of Dreier LLP, v. HSBC Mortgage Corporation (USA), et al., Adv. Proc. No. 10-5456 (Bankr. S.D.N.Y.), was commenced on Dec. 15, 2010, to recover alleged fraudulent transfers relating to the purchase and renovation of an apartment in Manhattan. Ms. Gowan encountered difficulties serving one of the defendants, the NY Landmark Construction Management Corp. Landmark has now moved to dismiss the complaint pursuant to Rules 12(b)(2) and (5) of the Federal Rules of Civil Procedure. In response, Ms. Gowan argues that the Court should wave the defective service of process, or extend the time to make service pursuant to Rule 4(m) of the Federal Rules of Civil Procedure. In his July 22, 2011 memorandum decision and order, Bankruptcy Judge Stuart M. Bernstein denied Landmark's motion and gave Ms. Gowan an additional 30 days to make service on Landmark. "I should extend the time to complete service in the exercise of my discretion," according to Judge Bernstein. He noted that the statute of limitations has run, and any dismissal will be with prejudice. Furthermore, Landmark had actual notice of the adversary proceeding within the 120-day, and made its Dismissal Motion within 30 days of its lapse. Landmark received the summons and complaint during the 120-day period and the insufficiency of service was due to a technical defect resulting from the use of a stale summons. The judge also said the delay is short and Landmark is not prejudiced by the extension given the short delay. The statute of limitations ran in December 2010 and the 120-day expired in mid-April 2011. Landmark does not contend that any evidence was lost or rendered unavailable during the interim, or that it has suffered any prejudice beyond the need to defend the adversary proceeding. Thus, while Landmark contends that it did not attempt to conceal the defects in the plaintiff's service -- despite the fact that it did not raise the issue of the stale summons until just after the 120-day period had run -- the balance of the factors favors the extension. A copy of Judge Bernstein's ruling is available at http://is.gd/rUct08from Leagle.com. About Dreier LLP Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On Dec. 8, 2008, the U.S. Securities and Exchange Commission filed a suit, alleging that Mr. Dreier made fraudulent offers and sales of securities in several cities, selling fake promissory notes to hedge and other private investment funds. The SEC asserted that Mr. Dreier also distributed phony financial statements and audit opinions, and recruited accomplices in connection with that scheme. Mr. Dreier, currently in prison, was charged by the U.S. government for conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No. 09- cr-00085). Dreier LLP sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, was tapped as counsel. The Debtor estimated assets of $100 million to $500 million, and debts between $10 million and $50 million in its Chapter 11 petition. Sheila M. Gowan, a partner with Diamond McCarthy, was appointed Chapter 11 trustee. Wachovia Bank National Association, the Chapter 11 trustee, and Steven J. Reisman as post-confirmation representative of the bankruptcy estate of 360networks (USA) Inc. signed a petition that put Mr. Dreier into bankruptcy under Chapter 7 on Jan. 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier, 60, pleaded guilty to fraud and other charges in May 2009. The scheme to sell $700 million in fake notes unraveled in late 2008. Mr. Dreier is serving a 20-year sentence in a federal prison in Minneapolis. DRYSHIPS INC: Sells Four Vessels for $75.5 Million -------------------------------------------------- DryShips Inc. announced these sale and purchase activities: -- The Company sold the 72,126 DWT Panamax bulker M.V. La Jolla (built in 1997). Delivery of the vessel took place in July 2011 -- The Company sold the 75,607 DWT Panamax bulker M.V. Conquistador (built in 2000). Delivery of the vessel is expected to take place in July 2011 -- The Company sold the 151,066 DWT Capesize bulker M.V. Brisbane (built in 1995). Delivery of the vessel is expected to take place in September 2011 -- The Company sold the 150,393 DWT Capesize bulker M.V. Samsara (built in 1996). Delivery of the vessel is expected to take place in August 2011 The aggregate sale price for all four vessels amounted to $75.5 million, resulting in an aggregate book loss of $106.9 million. George Economou, Chairman and CEO, commented, "The Company has sold a number of older dry bulk vessels recently as part of a fleet renewal program. The prevailing low freight rates, due to the current fleet oversupply, has led to a decline in asset values in general but specifically for older ships the decline was even sharper. Given the number of newbuildings that have joined the fleet and expected deliveries over the next two years we expect heightened charterer discrimination against older vessels and a consequential acceleration in the decline in values. With this in mind we have sold eight older vessels since January 2010. In the near term we will focus on replacing these vessels by acquiring vessels or fleets with fixed rate employment and financing in place." A full-text copy of the filing is available for free at:' http://is.gd/az0vFx About DryShips Inc. Based in Greece, DryShips Inc. -- http://www.dryships.com/-- -- owns and operates drybulk carriers and offshore oil deep water drilling units that operate worldwide. As of Sept. 10, 2010, DryShips owns a fleet of 40 drybulk carriers (including newbuildings), comprising 7 Capesize, 31 Panamax and 2 Supramax, with a combined deadweight tonnage of over 3.6 million tons and 6 offshore oil deep water drilling units, comprising of 2 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships. DryShips's common stock is listed on the NASDAQ Global Select Market where it trades under the symbol "DRYS". On Nov. 25, 2010, DryShips Inc. entered into a waiver letter for its US$230.0 million credit facility dated Sept. 10, 2007, as amended, extending the waiver of certain covenants through Dec. 31, 2010. In its audit report on the Company's financial statements for the year ended Dec. 31, 2010, Deloitte, Hadjipavlou Sofianos & Cambanis S.A., noted that the Company's inability to comply with financial covenants under its original loan agreements as of Dec. 31, 2009, its negative working capital position and other matters raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at March 31, 2011, showed US$6.99 million in total assets, US$3.04 million in total liabilities and US$3.94 million total equity. ENTELOS, INC.: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Entelos, Inc. aka Iconix Biosciences, Inc. Iconix Pharmaceuticals, Inc. Iconix Biosciences (UK) Ltd. Entelos UK Limited 110 Marsh Drive Foster City, CA 94404 Bankruptcy Case No.: 11-12329 Chapter 11 Petition Date: July 25, 2011 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Peter J. Walsh Debtor's Counsel: Timothy P. Reiley, Esq. REED SMITH LLP 1201 N. Market Street, Suite 1500 Wilmington, DE 19801 Tel: (302) 778-7500 Fax: (302) 778-7575 E-mail: treiley@reedsmith.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/deb11-12329.pdf The petition was signed by Shawn O'Connor, chief executive officer. EVERGREEN TANK: S&P Affirms 'B' Corporate; Outlook Now Stable ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Houston -based Evergreen Tank Solutions Inc. to stable from negative. "At the same time we affirmed the ratings on ETS, including the 'B' corporate credit rating," S&P said. "The outlook revision reflects our expectation that ETS will generate positive free cash flow in 2011 and 2012, and will maintain leverage below 6x, a level appropriate for the 'B' rating," said Standard & Poor's credit analyst Sarah Wyeth. "Standard & Poor's ratings on privately owned ETS reflect our view of the company's vulnerable business risk profile, characterized by its participation in the cyclical and capital-intensive equipment rental industry. ETS rents liquid and solid storage containers and provides related services to refineries, chemical companies, and oil and gas field service companies. The company also generates a minimal amount of sales from new equipment. ETS faces competition from larger players such as BakerCorp and Rain for Rent Inc.," S&P related. These top-three players control a sizable portion of the industry, while the remainder of the market is very fragmented. In the long term, the company could benefit from environmental regulation. The recent economic recession resulted in reduced or delayed capital expenditures by many of ETS' customers. However, ETS' expansion into areas where natural gas drilling has continued throughout the recession, such as the Marcellus Shale in Pennsylvania, slightly offset this lower demand. Petrochemical customers are now returning to regular levels of maintenance spending after cutting back during the downturn. As with many equipment rental and leasing companies, ETS' operating margins are high. However, significant capital requirements offset the margins. "The outlook is stable. If the company's operating performance declines or the company purchases rental equipment to an extent that results in negative free cash flow and leverage over 6x, we could lower the ratings. Our assessment of the company's business risk profile as vulnerable and financial policy as very aggressive limits the likelihood of an upgrade," S&P said. FAST LANE: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Fast Lane Central Valley LLC 111 Healdsburg Avenue, Suite C Healdsburg, CA 95448 Bankruptcy Case No.: 11-12780 Chapter 11 Petition Date: July 25, 2011 Court: U.S. Bankruptcy Court Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtor's Counsel: Michael C. Fallon, Esq. LAW OFFICES OF MICHAEL C. FALLON 100 E. Street, #219 Santa Rosa, CA 95404 E-mail: mcfallon@fallonlaw.net Scheduled Assets: $3,500,038 Scheduled Debts: $7,986,526 A list of the Company's five largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/canb11-12780.pdf The petition was signed by Lukhbir Gill, managing member. Debtor-affiliate filing separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Lukhbir and Christina Gill 11-12703 07/18/11 FIRSTGOLD CORPORATION: Royal Gold Moves Court to Dismiss Case ------------------------------------------------------------- Royal Gold, Inc., a creditor of Firstgold Corporation by virtue of unpaid Net Smelter Return ("NSR") royalties with respect to Firstgold's Relief Canyon Mine property, as well as owner of recorded royalty interests, asks the U.S. Bankruptcy Court for the District of Nevada to dismiss the Debtor's Chapter 11 case, citing that the Debtor is operating at a continuing substantial loss, with no reasonable likelihood of rehabilitation. Royal Gold points out that the Debtor has suffered a loss of $2 million over the previous four months, and almost $7 million in losses since it instituted the bankruptcy proceedings. Further, Royal Gold says Firstgold cannot sustain a reorganization plan or make adequate protection payments, it has insufficient operating income, its unsecured creditors' claims are so small compared to the secured creditors that they simply will not receive anything by virtue of this bankruptcy, and, at present, the bankruptcy proceeding is merely a dispute between Firstgold's secured creditors and Royal Gold with respect to Royal Gold's royalty interest in the property. Royal Gold currently holds an aggregate four percent (4%) NSR royalty on Firstgold's Relief Canyon Mine, generally entitling Royal Gold to a royalty payment on the gold produced from the property. About Firstgold Corporation Lovelock, Nevada-based Firstgold Corp. filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-50215) on Jan. 27, 2010. Stephen R. Harris, Esq., at Belding, Harris & Petroni, Ltd., and Edmund Buddy Miller, Esq., assist the Company in its restructuring effort. The Company has assets of $17,957,805, and total debts of $26,981,427. As reported by the TCR on April 28, 2010, Firstgold's management, at a bankruptcy hearing held on April 20, 2010, reported its inability to timely develop a reorganization plan to restart business operations. In light of the foregoing, Firstgold stipulated to allowing its primary secured lenders, Platinum Long Term Growth, LLC, and Lakewood Group, LLC, to pursue their contractual and state law rights and remedies to foreclose and take possession of all collateral securing their debt obligations with Firstgold pursuant to their security interests. The collateral securing their debt obligations includes substantially all of Firstgold's assets including the Relief Canyon Mine property, all improvements to the mine property, and additional mining properties and interests. In addition, Firstgold agreed to relinquish possession of the collateral to allow Platinum and Lakewood to preserve and protect such collateral as of April 21, 2010. Firstgold will continue in a Chapter 11 status which will allow Firstgold's management to pursue a possible reorganization of the corporate entity with another company. The next status conference hearing relating to the Firstgold corporate entity is set for May 11, 2010. FIRST NATIONAL: Access to Cash Collateral Expires July 31 --------------------------------------------------------- Judge Niles Jackson of the U.S. Bankruptcy Court for the Western District of Oklahoma authorized First National Building I, LLC and First National Building II, LLC, to use cash collateral, through and including July 21, 2011, to pay all expenses set forth in a prepared operating budget, with authority to deviate from the line items contained in the Budget by not more than 10%, on both a line item and aggregate basis, with any unused portions to be carried over into the following week. A copy of the July 2011 Budget is available for free at: http://bankrupt.com/misc/FIRSTNATIONAL_Jul2011Budget.PDF The Debtor is also authorized to use cash collateral through July 31 to pay fees owing to the Office of the United States Trustee and all expenses owing to the Clerk of the Bankruptcy Court. The Debtor is further permitted to continue maintaining their prepetition cash management system for the purpose of collecting rent revenue and for the purpose of paying operating expenses in accordance with the Budget. About First National Sherman Oaks, California-based First National Building I, LLC, and First National Building II, LLC, are the co-owners of the real property commonly known as the First National Center and located at 120 N. Robinson Avenue in Oklahoma City. The property is a 33- story historic office building located in the central business district in Oklahoma City and contains approximately 950,000 square feet of rentable space. The Honorable Geraldine Mund entered an order directing the transfer of the Chapter 11 cases of First National Building I, LLC, and First National Building II, LLC, from the Central District of California to the Western District of Oklahoma. Capmark Bank and Capmark CDF Subfund VI LLC, (together, the "Lender"), made the request, and Judge Mund agreed to the venue change. Capmark is represented by H. Mark Mersel, Esq., at Bryan Cave LLP in Irvine, Calif. First National Building I, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 10-22745) in Woodland Hills, Calif., on Oct. 7, 2010, and the case was transferred (Bankr. W.D. Okla. Case No. 10-16334) to Oklahoma City on Oct. 13, 2010. First National Building II, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 10-22747) in Woodland Hills, Calif. on Oct. 7, 2010, and the case was transferred (Bankr. W.D. Okla. Case No. 10-16335) to Oklahoma City on Oct. 13, 2010. The Debtors each estimates assets and debts at $10 million to $50 million. The Debtors are affiliated with Roosevelt Lofts, LLC (Bankr. C.D. Calif. Case No. 09-14214). The Debtors are represented by Mark B. Toffoli, Esq., at Andrews Davis, P.C., in Oklahoma City, Okla. FLORIDA GAMING: Settles Real Property Dispute with Miami County --------------------------------------------------------------- In 2009, Florida Gaming Centers, Inc., a wholly owned subsidiary of Florida Gaming Corporation, entered into a settlement agreement with Miami-Dade County, Florida, whereby the Company agreed to purchase from the County a total of 10.982 acres of undeveloped real property for an aggregate purchase price of $16,742,145. The Undeveloped Property consists of surface parking directly east of the Company's Miami Jai-Alai fronton. The Undeveloped Property is currently separated by a street, 37th Avenue from the main parcel. As set forth in the Settlement Agreement, if the Board of the Miami-Dade County Commissioners voted to approve resolutions to close the segment of 37th Avenue separating the Undeveloped Property from the main property, the purchase price for the Undeveloped Property was $16,742,145; if the County Board did not approve the Street Closing Resolutions, the purchase price was subject to a decrease. On July 7, 2011, the County Board approved the Street Closing Resolutions to close 37th Avenue; on July 17, 2011, the 10-day period in which the Mayor of Miami-Dade County could veto the legislation expired, so the price adjustment contingency was eliminated. The Settlement Agreement was an outgrowth of a judicial proceeding in which the County attempted to seize a portion of the Company's property under the County's power of eminent domain. Under the Settlement Agreement, the Company agreed to relinquish the land subject to the eminent domain action in consideration for the right to purchase the Undeveloped Property. This purchase was effected through a two-step process with an initial closing on 2.283 acres of the Undeveloped Property and a subsequent closing on the remaining 8.67 acres. The Settlement Agreement required the Street Closure Resolutions to be presented to the County Board as a condition to the Final Closing, the rejection of which resolutions had the potential of decreasing the purchase price of the Undeveloped Property. In accordance with the Settlement Agreement, the Street Closure Resolutions were presented to the County Board before the Final Closing, and the County Board approved the Street Closure Resolutions on July 7, 2011. Because the County Board adopted the Street Closure Resolutions and there was no mayoral veto by July 17, 2011, there will be no adjustment to the purchase price. As disclosed in April, the Company entered into a credit agreement with a syndicate of unaffiliated third party lenders and ABC Funding, LLC, as Administrative Agent for the Lenders, which provided for an $87,000,000 senior secured term loan to the Company that will mature on April 25, 2016. Borrowings under the Term Loan are secured by a first priority security interest in all tangible and intangible assets of the Company and each guarantor under the Term Loan, including a Mortgage, Absolute Assignment of Rents, Security Agreement and Fixture Filing in certain real property owned by the Company on April 25, 2011. The Jai-Alai Property is adjacent to the Undeveloped Property. On June 16, 2011, with the consent of the County and in accordance with the Term Loan, the Company, the Bank and ABC, on behalf of the Lenders, entered into a Mortgage Spreader Agreement whereby the Lenders amended the Jai-Alai Mortgage to include the Undeveloped Property. With regard to the Undeveloped Property, the Jai-Alai Mortgage is junior in priority to the Final Mortgage. A full-text copy of the Form 8-K is available for free at: http://is.gd/oJyo3M About Florida Gaming Florida Gaming Corporation operates live Jai Alai games at frontons in Ft. Pierce, and Miami, Florida through its Florida Gaming Centers, Inc. subsidiary. The Company also conducts intertrack wagering (ITW) on jai alai, horse racing and dog racing from its facilities. Poker is played at the Miami and Ft. Pierce Jai-Alai, and dominoes are played at the Miami Jai-Alai. In addition, the Company operates Tara Club Estates, Inc., a residential real estate development located near Atlanta in Walton County, Georgia. Approximately 46.2% of the Company's common stock is controlled by the Company's Chairman and CEO either directly or beneficially through his ownership of Freedom Holding, Inc. The Company is based in Miami, Florida. The Company reported a net loss of $4.84 million on $4.11 million of Jai-Alai Mutuel revenue for the year ended Dec. 31, 2010, compared with a net loss of $4.87 million on $6.85 million of Jai- Alai Mutuel revenue during the prior year. As reported by the TCR on April 7, 2011, King + Company, PSC, in Louisville, Kentucky, noted that the Company has suffered recurring losses from operations and cash flow deficiencies which raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at March 31, 2011, showed $17.11 million in total assets, $24.14 million in total liabilities, and a $7.03 million total stockholders' deficit. FOGO DE CHAO: S&P Assigns Prelim. 'B' Corporate Credit Rating ------------------------------------------------------------- Standard & Poor's Rating Services assigned its preliminary 'B' corporate credit rating to U.S. and Brazilian restaurant operator Fogo de Chao Churrascaria Holdings LLC. The outlook is stable. "At the same time, we assigned our preliminary 'B+' issue-level rating to the company's senior secured first-lien credit facility, which consists of a $195 million seven-year term loan and a $10 million five-year revolver. The preliminary recovery rating is '2', indicating our expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default," S&P related. Private-equity firm GP Investments intends to use the proceeds from the term loan to fund the purchase of the remaining 65% ownership interest in Fogo currently still held by the company's founding members. GP Investments had originally acquired 35% ownership interest in Fogo in 2006. Accordingly, the company will hold 100% of the ownership stake in Fogo following the transaction. "The preliminary ratings on Fogo reflect our expectation that the company will remain substantially leveraged despite some modest earnings growth and debt paydown," said Standard & Poor's credit analyst Mariola Borysiak. "Based on our projection of credit ratios following the consummation of the transaction, we see the company's financial risk profile as aggressive." "We consider Fogo's business risk profile vulnerable because of a very small revenue and EBITDA base and intense competition in the restaurant space," added Ms. Borysiak. Another factor is particular susceptibility of the company's fine dining niche to economic conditions. GARDENS OF GRAPEVINE: Court Okays Parkway as Real Estate Broker --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized the Gardens of Grapevine Development, L.P., and The Gardens of Grapevine Development GP, LLC, to employ Parkway Realtors, Inc., as their real estate broker, pursuant to an Exclusive Listing Agreement dated Oct. 15, 2010, as amended, between GOG and PRI. The Debtors told the Court that they seek to continue the engagement of PRI because of PRI's familiarity with GOG's primary asset consisting of 192 acres of undeveloped land located in Grapevine, Texas, in both Dallas and Tarrant County. According to the Troubled Company Reporter on June 29, 2011, PRI will be paid for its real estate services based upon the terms as set forth in the Listing Agreement, which provides for a sales commission payment of 6% of the gross sales price upon the sale of the Property. Compensation to PRI will, upon the successful completion of a sale, be based strictly on the terms as set forth in the Listing Agreement, and no further fee application will be submitted to the Court for approval. Compensation to PRI will only be paid from the proceeds of a sale of the Property. Sherwood Blount, president of PRI, attests that PRI is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Gardens of Grapevine The Gardens of Grapevine Development, L.P., filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 11-43260) in Fort Worth, Texas, on June 6, 2011. Frank Jennings Wright, Esq., at Wright Ginsberg Brusilow P.C., in Dallas, Texas, serves as counsel to the Debtor. The Debtor estimated $50 million to $100 million in assets and $10 million to $50 million in liabilities as of the Chapter 11 filing. GARDENS OF GRAPEVINE: Court Approves Wright Ginsberg as Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized the Gardens of Grapevine Development, L.P., and The Gardens of Grapevine Development GP, LLC, to employ Wright Ginsberg Brusilow P.C. as their counsel. According to the Troubled Company Reporter on June 29, 2011, as counsel, WGB will: -- render legal advice with respect to the powers and duties of a debtor in Chapter 11; -- negotiate, prepare and file a plan of reorganization and disclosure statement and otherwise promote the financial rehabilitation of the Debtors; -- take all necessary action to protect and preserve the bankruptcy estates, including the prosecution of actions on the Debtors' behalf; and -- render legal advice and perform general legal services. WGB will be paid for its legal services on an hourly basis in accordance with its ordinary and customary hourly rates as in effect on the date services are rendered. The primary attorneys, who will represent the Debtors and their standard hourly rates are: Professional Rate ------------ ---- Frank J. Wright $650 Paul B. Geilich $525 Ashley Ellis $475 Gogi Malik $475 David E. Brusilow $385 David B. Koch $325 Erin C. McGee $250 Other attorneys and support staff may provide services to the Debtors in connection with the bankruptcy proceeding at these hourly rates: Partners/Attorneys of counsel $325 to $750 Associates $150 to $500 Paralegals $100 to $150 WGB will also be reimbursed for all expenses actually incurred on behalf of the Debtors, consistent with its normal practices. WGB received a retainer of $100,000 from Rafael Palmeiro, the Manager of GOG-GP, which was applied to filing and legal fees incurred in connection with preparing and filing the Debtors' petitions. WGB holds the balance as a retainer in the case. WGB's future source of payment will be the retainer, sales of property and funding by the Manager of GOG-GP. Frank J. Wright, Esq., a WGB shareholder, assured the Court that neither WGB, nor any of its associates, shareholders, or other members, has an interest materially adverse to the interest of the estate or of any class of creditors as specified in Section 101(14)(B) or (C), of the Bankruptcy Code, or for any other reason. The application to employ WGB is subsequently amended to revise the certificate of service. About Gardens of Grapevine The Gardens of Grapevine Development, L.P., filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 11-43260) in Fort Worth, Texas, on June 6, 2011. Frank Jennings Wright, Esq., at Wright Ginsberg Brusilow P.C., in Dallas, Texas, serves as counsel to the Debtor. The Debtor estimated $50 million to $100 million in assets and $10 million to $50 million in liabilities as of the Chapter 11 filing. GENERAL MOTORS: LoPucki Says $110MM Legal Tab "Astonishingly Low" ----------------------------------------------------------------- Eric Morath, writing for Dow Jones' Daily Bankruptcy Review, reports that UCLA Professor Lynn LoPucki finds the total professional bill for General Motors' bankruptcy case "astonishingly low" for a company of that size. According to a report released Monday, the 25 firms working on GM's case, which wrapped up earlier this year, charged $107.6 million in fees and sought reimbursement for $3.3 million in expenses. Prof. LoPucki had predicted upwards of $1 billion in fees for attorneys, accountants and other professionals. "This has to be reported as an unusually inexpensive case," said the UCLA bankruptcy law professor, who has extensively studied the ever-rising costs of bankruptcy cases. According to DBR, Prof. LoPucki said his models didn't reveal any obviously reasons as to why the fees were as low as they were. Bills charged to GM's bankruptcy estate are a fraction of the $1.3 billion already paid to professionals in Lehman Brothers Holdings Inc. case. GM's fees are also are lower than the cost of the ongoing Tribune Co. Chapter 11 case, a much smaller company. DBR relates Prof. LoPucki said one possibility is that some of the costs were shifted to the operating auto maker, General Motors Co., which quickly emerged from bankruptcy though a government- sponsored sale. Another is that GM paid substantial fees to bankruptcy attorneys and restructuring experts well before it filed for Chapter 11. Those fees are not counted as part of the Chapter 11 tab. DBR notes the law firm Weil, Gotshal & Manges LLP was paid $54 million prior to the bankruptcy. Prof. LoPucki's model predicted that Weil would net about $230 million from the case as the bankruptcy estate's lead law firm. Weil Gotshal only charged $44.7 million in fees and $1.35 million in expenses, even though some of its attorneys charged nearly $1,000 per hour to work on the case. 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 (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. 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. GLAZIER GROUP: Restaurateur Buys Strip House Brand -------------------------------------------------- Amanda Kludt at EATER reports that Stephen Hanson, the restaurateur behind Blue Water Grill, Bills Bar & Burger, Dos Caminos, and about a handful of other cash cows, just bought the Strip House brand from founding owners Peter, Penny, and Matthew Glazier of the Glazier Group. About The Glazier Group New York-based The Glazier Group, Inc., filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-16099) on Nov. 15, 2010. Frederick E. Schmidt, Esq., Joshua Joseph Angel, Esq., and Seth F. Kornbluth, Esq., at Herrick, Feinstein LLP, represent the Debtor in its restructuring effort. John Dunne of Renewal Ventures, LLC, is the Debtor's Chief Restructuring Officer ("CRO"). The Company disclosed assets of $15.2 million and liabilities of $26.8 million as of the Petition Date. Ronald J. Friedman, Esq., Katina Brountzas, Esq., and Sheryl P. Busell, Esq., at SilvermanAcampora LLP, in Jericho, New York, represent the Official Committee of Unsecured Creditors. FTI Consulting, Inc., serves as the Official Committee of Unsecured Creditors' financial advisor. GOLD HILL: Fifth Third Renews Request to Prosecute Claims --------------------------------------------------------- Fifth Third Bank asks U.S. Bankruptcy Court for the District of South Carolina, to (i) modify the automatic stay for cause to allow Fifth Third to prosecute its claims against Gold Hill Enterprises, LLC, and Gold Hill's prosecution of its counterclaims and cross-claims in the North Carolina Collection Lawsuit; and (ii) modify the automatic stay, and permit Fifth Third to foreclose the mortgage. Fifth Third, in an amended motion to lift stay, relates that the Debtor filed on July 12, its Disclosure Statement and Plan of Reorganization which does not have a reasonable possibility of being confirmed within a reasonable time. Among other things, the Plan: a. does not put Fifth Third into a class or specify the treatment of that class; b. assumes that the mortgage held by Fifth Third will be avoided without providing alternative terms if the lien is not avoided; c. assumes without providing alternative treatment that the money received from Fifth Third does not give a rise to an allowed claim even though the money was spent by Gold Hill for its own benefit; d. proposes to sell the collateral for the benefit of subordinate lienholder Synovus Bank in violation of Section 551 of the Bankruptcy Code; and e. fails to comply with 11 USC 1129(a)(11) because it does not present a workable scheme of organization and operation from which there may be a reasonable expectation of financial stability and success. Additionally, Fifth Third notes that it has been over ninety days since the petition date, and the Debtor has not commenced monthly payments to Fifth Third. The automatic stay must be lifted. As reported in the Troubled Company Reporter on June 15, Fifth Third Bank also asked the Court lift the automatic stay in the Chapter 11 cases of the Debtor. Fifth Third Bank is successor by merger to First Charter Bank. Fifth Third is the holder of a promissory note executed by the debtor, through R. Shawn Helda, on July 6, 2006 in the original principal amount of $950,000. The Note evidences funds that First Charter Bank provided to Debtor pursuant to an Oct. 5, 2004 Loan Agreement. The Note is secured by a mortgage encumbering a tract of land in York County, South Carolina. Fifth Third properly perfected its lien on the collateral by recording a mortgage in the York County Registry. The total balance due under the Note was $1,022,949 as of the Petition Date. About Gold Hill Enterprises Fort Mill, South Carolina-based Gold Hill Enterprises, LLC, dba Jennings Enterprises, filed for Chapter 11 bankruptcy protection (Bankr. D. S.C. Case No. 11-02458) on April 14, 2011. According to its schedules, the Debtor disclosed $11,938,596 in total assets and $7,351,872 in total debts. Barton Law Firm, P.A., represents the Debtor in its restructuring effort. B. Bayles Mack and the firm of Mack & Mack serves as special counsel. Keith Corporation serves as marketing and development agent. Robert Palmer & Associates serves as tax accountant to assist in the preparation of all tax filings and returns required post petition, and other accounting services that may be necessary during the pendency of the Chapter 11 case. W. Clarkson Mcdow, Jr., the U.S. Trustee for Region 4, was unable to appoint an official committee of unsecured creditors in the Debtor's case. HANMI FINANCIAL: Reports $8.0 Million Net Income in Q2 ------------------------------------------------------ Hanmi Financial Corporation reported net income of $8.00 million on $32.61 million of total interest and dividend income for the three months ended June 30, 2011, compared with a net loss of $29.25 million on $36.17 million of total interest and dividend income for the same period during the prior year. The Company also reported net income of $18.43 million on $66.49 million of total interest and dividend income for the six months ended June 30, 2011, compared with a net loss of $78.74 million on $74.22 million of total interest and dividend income for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $2.71 billion in total assets, $2.51 billion in total liabilities, and $198.36 million in stockholders' equity. "Our second quarter further established the recovery of our core franchise with continued profitability and solid investor interest in the equity offering we previously initiated," said Jay S. Yoo, President and Chief Executive Officer. "Although the offering was fully subscribed, with excess demand, our Board of Directors was not satisfied with the pricing offered and did not believe it to be in the best interest of our shareholders to complete the offering at that time. Our capital ratios, including the Bank's tangible equity ratio, exceed all regulatory requirements, and our continuing profitability and the gradual improvement of our asset quality give us the flexibility to wait for more favorable market conditions." A full-text copy of the press release announcing the financial results is available for free at http://is.gd/sSXfxz About Hanmi Financial Headquartered in Los Angeles, California, Hanmi Financial Corp. (Nasdaq: HAFC) -- http://www.hanmi.com/-- is the holding company for Hanmi Bank, a state chartered bank with headquarters located at 3660 Wilshire Boulevard, Penthouse Suite A, in Los Angeles. Hanmi Bank provides services to the multi-ethnic communities of California, with 27 full-service offices in Los Angeles, Orange, San Bernardino, San Francisco, Santa Clara and San Diego counties, and a loan production office in Washington State. The Company reported a net loss of $88.01 million on $144.51 million of total interest and dividend income for the year ended Dec. 31, 2010, compared with a net loss of $122.27 million on $184.14 million during the prior year. Going Concern The Company is required by federal regulatory authorities to maintain adequate levels of capital to support its operations. Hanmi Bank is also required to increase its capital and maintain certain regulatory capital ratios prior to certain dates specified in a Final Order issued by the California Department of Financial Institutions. By July 31, 2010, the Bank was required to increase its contributed equity capital by not less than an additional $100 million and maintain a ratio of tangible stockholders' equity to total tangible assets of at least 9.0%. In addition, the Bank was also required to maintain a ratio of tangible stockholders' equity to total tangible assets of at least 9.5 percent at Dec. 31, 2010 and until the Final Order is terminated. As a result of the successful completion of the registered rights and best efforts offering in July 2010, the capital contribution requirement set forth in the Final Order was satisfied. However, the tangible capital ratio requirement set for in the Final Order has not been satisfied at Dec. 31, 2010. Further, should the Company's asset quality continue to erode and require significant additional provision for credit losses, resulting in added future net operating losses at the Bank, or should the Company otherwise fail to be profitable, the Company's capital levels will additionally decline requiring the raising of more capital than the amount currently required to satisfy the Company' agreements with its regulators. The Company said an inability to raise additional capital when needed or comply with the terms of the Final Order or the Written Agreement with the Board of Governors of the Federal Reserve System, raises substantial doubt about its ability to continue as a going concern. The Company's independent registered public accounting firm in their audit report for fiscal year 2010 has expressed substantial doubt about the Company's ability to continue as a going concern. Continued operations may depend on the Company's ability to comply with the regulatory orders the Company is subject to. HARBOUR EAST: Proposes Kramer & Assoc. to Prepare 2010 Tax Return ----------------------------------------------------------------- Harbour East Development, Ltd., asks the U.S. Bankruptcy Court for the Southern District of Florida, to authorization to expand the retention of Kramer & Associates, P.A., as tax accountant. The Debtor relates that on June 2, 2010, the Court granted the application to employ Kramer. The Debtor needs Kramer to prepare its 2010 tax return in order to comply with Federal tax laws and its duties under the Bankruptcy Code. To the best of the Debtor's knowledge, Kramer is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Harbour East Harbour East Development, Ltd., is the developer and owner of the luxury residential condominium development known as CIELO on the Bay located at 7935 East Drive, North Bay Village. CIELO contains 35 residential condominium units. Harbour East filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 10-20733) on April 22, 2010. Michael L. Schuster, Esq., who has an office in Miami, Florida, represents the Debtor. The Company estimated assets and debts at $10 million to $50 million, as of the Chapter 11 filing. Judge Cristol denied the request of 7935 NBV LLC's request to dismiss the case. No creditors' committee has been appointed in the case. In addition, no request for the appointment of a trustee or examiner has been made. HAYDEN-HARNETT, LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Hayden-Harnett, LLC dba Hayden Harnett H&H 211 Franklin Street Brooklyn, NY 11222 Bankruptcy Case No.: 11-46350 Chapter 11 Petition Date: July 24, 2011 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Elizabeth S. Stong Debtor's Counsel: Eric Medina, Esq. MEDINA LAW FIRM LLC The Chrysler Building 405 Lexington Avenue, Seventh Floor New York, NY 10174 Tel: (212) 404-1742 Fax: (888) 833-9534 E-mail: emedina@medinafirm.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/nyeb11-46350.pdf The petition was signed by Benjamin Harnett, chief operating officer. HCA INC: S&P Assigns 'BB' Rating to $500-Mil. Senior Notes ---------------------------------------------------------- Standard & Poor's Ratings Services assigned Nashville-based HCA Inc.'s proposed $500 million senior notes due 2020 a 'BB' issue- level rating. "We also assigned the notes a debt recovery rating of '1', indicating a very high (90% to 100%) recovery for lenders in the event of a payment default," S&P related. "At the same time, we assigned a rating of 'B-' to HCA's proposed $500 million senior unsecured notes due 2022 and a recovery rating of '6', indicating a negligible (0% to 10%) recovery for lenders in the event of a payment default. The company plans to use the proceeds to refinance a portion of its existing second-lien debt," S&P said. The speculative-grade rating on HCA reflects uncertain prospects for third-party reimbursement, its highly leveraged financial risk profile, and its historically aggressive financial policies. It also reflects recent weakness in earnings, influenced by an adverse shift in service mix to less acute medical cases. Still, the company's relatively diversified portfolio of 164 hospitals and 111 ambulatory surgery centers, generally favorable positions in its competitive markets, and experienced management team partially mitigate these risks and contribute to our assessment that HCA has a fair business risk profile. These factors help protect the company from conditions that confront several of its far smaller peers. Ratings List HCA Inc. Corporate credit rating B+/Stable/-- Ratings Assigned HCA Inc. Senior Secured $500 mil. notes due 2020 BB Recovery rating 1 Senior Unsecured $500 mil. notes due 2022 B- Recovery rating 6 HEARUSA INC: Shareholders May Push for Reorganization, Not Sale --------------------------------------------------------------- Katy Stech, writing for Dow Jones' Daily Bankruptcy Review, reports that HearUSA Inc. shareholders have said in court documents they remain "unconvinced that a sale of all the [company's] operating assets offers the highest and best return." The report says the shareholders are unhappy with the auction after only one rival bidder came up. According to DBR, the shareholders encouraged the company to move forward with the Friday auction but cautioned they might ask the Court to delay the subsequent sale hearing, set for Aug. 1, to allow the group time to sort through HearUSA's options. The shareholders intend to explore whether HearUSA would be better off selling off only a portion of its assets, whether it can take advantage of potentially lucrative tax benefits and whether it can find outside investors or a rescue loan. As reported yesterday by the Troubled Company Reporter, HearUSA received a $97.57 million competing bid from Audiology Distribution, LLC, an affiliate of Siemens Hearing Instruments Inc., the principal supplier and primary secured lender. The offer includes a swap for $30.7 million on Siemens' secured claim, the financing for the Chapter 11 case, and the waiver of a $37.24 million claim from termination of a supply agreement. HearUSA is scheduled to auction the business on July 29. HearUSA already had an $80 million offer in hand from William Demant Holdings A/S. Demant has agreed to take on certain liabilities and cancel out obligations that HearUSA owes on the $10 million bankruptcy loan that it has provided. If outbid, Demant is to receive a $2 million breakup fee. According to DBR, the shareholders group said the Siemens affiliate's offer "threatens to undermine the fundamental integrity of the auction" because it could force outside bidders to top a bid that's based on invalid claims. About HearUSA HearUSA, Inc., which sells hearing aids in 10 states, filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 11-23341) on May 16, 2011, to sell the business for $80 million to William Demant Holdings A/S. The Debtor said that assets are $65.6 million against debt of $64.7 million as of March 31, 2010. HearUSA owes $31.3 million to Siemens Hearing Instruments Inc., the principal supplier and primary secured lender. Judge Erik P. Kimball presides over the case. Brian K. Gart, Esq., Paul Steven Singerman, Esq., and Debi Evans Galler, Esq., at Berger Singerman, P.A., represent the Debtor. The Debtor has tapped Bryan Cave LLP as special counsel; Sonenshine Partners LLC, investment banker; Development Specialist Inc., restructuring advisor ans Joseph J. Luzinski as chief restructuring officer; and AlixPartners LLC, as communications consultant. Trustee Services, Inc., serves as claims and notice agent. The Official Committee of Unsecured Creditors has been appointed in the case. Robert Paul Charbonneau, Esq., and Daniel L. Gold, Esq., at Ehrenstein Charbonneau Calderin, represent the Creditors Committee. An Official Committee of Equity Security Holders has also been appointed. It is represented by: Mark D. Bloom, Esq. GREENBERG TRAURIG P.A. 333 Avenue of the Americas Miami, FL 33131 Tel: (305) 579-0500 E-mail: bloomm@gtlaw.com HORIZON VILLAGE: Sec. 341 Creditors' Meeting Set for Aug. 18 ------------------------------------------------------------ The U.S. Trustee for the District of Nevada will convene a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341 in the bankruptcy cases of Horizon Village Square LLC, Ten Saints LLC, Beltway One Development Group LLC, and Nigro HQ LLC on Aug. 18, 2011, at 1:00 p.m. 341s -- Foley Bldg, Rm 1500. Proofs of claim are due by Nov. 16, 2011. About Horizon Village Square et al. Four related Las Vegas, Nevada-based entities sought Chapter 11 bankruptcy protection on July 13, 2011. The businesses are owned or managed by local business people and firms, including Todd Nigro, Nigro Development LLC, a Nigro family trust and other investors. Horizon Village Square LLC (Bankr. D. Nev. Case No. 11-21034) owns the Vons-anchored Horizon Village Square Shopping Center near I- 515 and Horizon Drive in Henderson. The property includes five retail buildings with nearly 43,000 square feet of space. Ten Saints LLC (Bankr. D. Nev. Case No. 11-21028) owns the 134- room Hampton Inn & Suites at St. Rose Parkway and Seven Hills Drive in Henderson. Beltway One Development Group LLC (Bankr. D. Nev. Case No. 11- 21026) owns the Desert Canyon Business Park at Russell Road and the Las Vegas Beltway. It has two buildings and 15 acres. Nigro HQ LLC (Bankr. D. Nev. Case No. 11-21014) owns an office building at 9115 W. Russell Road occupied by Bank of George, Infinity Plus LLC and Nigro Construction Inc. Todd Nigro said the four bankruptcies were caused by threatened foreclosures -- typically related to Wells Fargo Bank demanding payments to keep loan-to-value ratios at specified levels. Judge Mike K. Nakagawa presides over the cases. Lawyers at Gordon Silver serve as the Debtors' bankruptcy counsel. The bankruptcy petitions estimated assets and debts from $1 million to $10 million each for Nigro HQ; and from $10 million to $50 million in both assets and debts for Horizon Village, Ten Saints and Beltway One. A fifth-related business, Russell Boulder LLC, filed for bankruptcy (Bankr. D. Nev. Case No. 10-29724) on Oct. 19, 2010. It owns the 600-suite Siena Suites extended stay property at Boulder Highway and Russell Road. HORIZON VILLAGE: Hiring Gordon Silver as Bankruptcy Counsel ----------------------------------------------------------- Horizon Village Square LLC, Ten Saints LLC, Beltway One Development Group LLC, and Nigro HQ LLC seek Bankruptcy Court permission to employ as bankruptcy counsel: Gerald M. Gordon, ESQ. Talitha Gray Kozlowski, Esq. Candace C. Clark, Esq. GORDON SILVER 3960 Howard Hughes Pkwy., 9th Floor Las Vegas, Nevada 89169 Telephone: (702) 796-5555 Facsimile: (702) 369-2666 E-mail: ggordon@gordonsilver.com tgray@gordonsilver.com cclark@gordonsilver.com Gordon Silver has represented the Debtors in connection with financial restructuring efforts since June 2010. Since June 2010, Beltway One has paid Gordon Silver $19,194.37 for legal services rendered in connection with its restructuring. The firm is also currently holding $24,011 as retainer. Gordon Silver's hourly rates are: $130 to $175 per hour for paraprofessionals, $185 to $350 per hour for associates, and $455 to $700 per hour for shareholders Mr. Gordon attests that Gordon Silver and its shareholders and associates do not hold or represent any interest adverse to the Debtors' estate, and Gordon Silver and its shareholders and associates are "disinterested persons" within the meaning of Sections 101(14) and 327 of the Bankruptcy Code, as modified by Section 1107(b). A hearing to consider approval of the Employment Application is set for Aug. 24, 2011 at 9:30 a.m. at MKN-Courtroom 2, Foley Federal Bldg. About Horizon Village Square et al. Four related Las Vegas, Nevada-based entities sought Chapter 11 bankruptcy protection on July 13, 2011. The businesses are owned or managed by local business people and firms, including Todd Nigro, Nigro Development LLC, a Nigro family trust and other investors. Horizon Village Square LLC (Bankr. D. Nev. Case No. 11-21034) owns the Vons-anchored Horizon Village Square Shopping Center near I- 515 and Horizon Drive in Henderson. The property includes five retail buildings with nearly 43,000 square feet of space. Ten Saints LLC (Bankr. D. Nev. Case No. 11-21028) owns the 134- room Hampton Inn & Suites at St. Rose Parkway and Seven Hills Drive in Henderson. Beltway One Development Group LLC (Bankr. D. Nev. Case No. 11- 21026) owns the Desert Canyon Business Park at Russell Road and the Las Vegas Beltway. It has two buildings and 15 acres. Nigro HQ LLC (Bankr. D. Nev. Case No. 11-21014) owns an office building at 9115 W. Russell Road occupied by Bank of George, Infinity Plus LLC and Nigro Construction Inc. Todd Nigro said the four bankruptcies were caused by threatened foreclosures -- typically related to Wells Fargo Bank demanding payments to keep loan-to-value ratios at specified levels. Judge Mike K. Nakagawa presides over the cases. Lawyers at Gordon Silver serve as the Debtors' bankruptcy counsel. The bankruptcy petitions estimated assets and debts from $1 million to $10 million each for Nigro HQ; and from $10 million to $50 million in both assets and debts for Horizon Village, Ten Saints and Beltway One. A fifth-related business, Russell Boulder LLC, filed for bankruptcy (Bankr. D. Nev. Case No. 10-29724) on Oct. 19, 2010. It owns the 600-suite Siena Suites extended stay property at Boulder Highway and Russell Road. HUDSON COUNTY: Moody's Assigns Mig 1 Rating to $100.4MM Notes ------------------------------------------------------------- Moody's Investors Service has assigned MIG 1 ratings to the Hudson County Improvement Authority's (NJ) $100.4 million County- Guaranteed Pooled Notes, Series 2011 I. Proceeds of notes will refund loans to the City of Bayonne (G.O. rated Baa1/negative outlook, $21.6 million) ,Bayonne Municipal Utilities Authority ($2.6 million), Town of Harrison (G.O. rated Ba3/negative outlook, $1.7 million), Jersey City (G.O. rated A2/negative outlook; $7.5 million), Township of Weehawken (G.O. rated Ba1; $25.2 million), Town of West New York ($4 million). RATINGS RATIONALE While the notes are expected to be repaid from borrower loan repayments, the ultimate security for this issue is derived from Hudson County's absolute and unconditional obligation to cure any deficiency in the Debt Service Fund prior to note maturity, and the authorization to issue county general obligation bonds for this purpose pursuant to a Guaranty Ordinance. Therefore, the MIG 1 rating factors in the county's long-term credit quality, satisfactory history of market access, and sound mechanics under the county guaranty to allow timely repayment of the current notes at their August 17, 2012 maturity. The county's long-term general obligation rating of Aa3 reflects the county's substantial, expanding tax base and Moody's expectation that the county will maintain a stable financial position supported by conservative management of economically sensitive revenues and limited reliance on one-time revenue sources. Moody's believes the county is relatively well positioned to maintain financial stability in the coming years despite revenue constraints created by the imposition of a more stringent statewide 2% property tax levy limitation, given continued growth of the county's taxable base as PILOTs expire and properties become taxable. The negative outlook reflects the county's exposure, through guaranteed debt, to the Town of Harrison's (GO rated Ba3/negative outlook) underperforming development projects as well as to Hudson County Improvement Authority's relatively stressed solid waste system. Future rating reviews will consider the county's ability to maintain its current financial position in light of a heightened risk to fund guaranteed debt service, given the Town of Harrison's recent challenges in meeting debt obligations. In addition, the negative outlook considers the county's exposure to short-term market volatility, as county and county-guaranteed short-term notes and bonds, amounting to $307.7 million, represent approximately one-third of total outstanding debt and take the form of maturities ranging from $27 million to $163 million. STRENGTHS - Substantial and diverse tax base with favorable location - Stable, structurally balanced financial operations CHALLENGES - Significant exposure to county-guaranteed enterprise debt and short-term debt - Below average wealth levels - Above-average debt burden DETAILED CREDIT DISCUSSION HUDSON COUNTY IMPROVEMENT AUTHORITY CONDUIT ISSUER Hudson County Improvement Authority (HCIA) is a conduit issuer and has no independent taxing authority. The current notes are expected to be repaid from borrower loan payments, which are general obligations in the case of the municipalities. The MIG 1 rating is based on the ultimate security provided by Hudson County's obligation to fund any insufficiency in the Debt Service Fund prior to note maturity. Borrower loan payments are due to the trustee 10 days before the current note matures. In the event of non-payment by any participant, the trustee must notify the participant, the county and the HCIA within one business day. The county is required to cure any deficiency in the Debt Service Fund no later than two days prior to note maturity. Importantly, the guaranty requires that borrowers either execute a purchase contract for renewing outstanding notes 30 days prior to note maturity with a delivery date no later than 10 days prior to note maturity (loan payment date), and/or provide notice to the county that rather than renewing outstanding notes it will pay principal and interest on outstanding debt no later than 10 days prior to maturity. Also, the county's Guaranty Ordinance, adopted August 13, 2009, authorizes the issuance of county general obligation debt for this purpose. Moody's believes this structure gives the county sufficient time to appropriate for debt service, if necessary, prior to note maturity on August 17, 2012. The county has demonstrated its ability to access the capital markets, having received two bids on its most recent taxable competitive sale (sold unrated in September 2008) and four bids on its most recent tax-exempt competitive sale (August 2006) as well as successfully negotiating eight pooled notes prior to this sale. SUBSTANTIAL AND DIVERSE TAX BASE WITH BELOW AVERAGE WEALTH LEVELS Moody's expects continued growth in the county's substantial $66.6 billion tax base given ongoing development, albeit at moderate levels as the county has been impacted by the slowing residential housing market. The county benefits from its location directly across the Hudson River from New York City (rated Aa2/stable outlook) as well as the significant development and available employment within the county. The county has an excellent transportation network, including highways, railroad, commuter rail, ferry and underground train service to New York City, all of which support the flow of residents to and from New York. After September 11, 2001, many New York City-based companies, including Goldman Sachs (senior unsecured debt rated A1/negative outlook), UBS (long term debt rated Aa3/negative outlook) and Credit Suisse First Boston moved all or a portion of their operations to the county. Reflective of Hudson County's strategic location within a robust metropolitan area as well as its own diverse economy, the county's largest employers include several major corporations and institutions such and United Parcel Services (Aa3/stable outlook), Bank of Tokyo Mitsubishi Trust , Hoboken University Medical Center and Jersey City Medical Center. Of note is the economic activity along the waterfront in Jersey City, although these properties have been granted multi-year PILOT contracts and therefore are not included in the county's current equalized valuation. These waterfront developments have attracted numerous new employers to the county, including The Depository Trust & Cleaning Corporation (DTCC), which will bring with it a staff of about 1,600 in 2012. Other municipalities in the county, including Bayonne (G.O. rated Baa1/negative outlook), Hoboken (Guaranteed Hospital Revenue Bonds rated Baa1), West New York (no rating) and Harrison, have begun to implement redevelopment plans, which are expected to spur additional growth in the medium term. Growth in equalized values, which had averaged strong 16.9% annual gains between 2003 and 2008, slowed considerably to a modest 2.8% in 2009 and declined in 2010 by 2.9%, reflecting the economic recession and housing market downturn. Growth is expected to remain modest over the near term as development continues to be dampened by slow economic recovery, although officials report some recent stabilization of housing prices. The county is experiencing increased tax appeal claims, although the impact on tax base valuation is not yet determined. In 2011 Added and Omitted tax revenues, which reflect properties added during the course of the year, retuned to 2008 levels of $4.8 million with growth of $4.6 million after more moderate years in 2009 and 2010 ( $1.7 million and $2.8 million, respectively), evidencing a combination of new development and properties coming off PILOTs in Jersey City. A solid equalized value per capita of $111,429 only partially reflects the quality of development as much of the new real estate is not yet on the tax rolls. Socio-economic indicators fall 20% to 30% below state levels and the poverty rate of 15.5% as of the 2000 Census is the second highest in the state. The February 2011 unemployment rate of 10.8% is above state and national medians (9.9% and 9.5%, respectively) and a marked decrease from a year ago when unemployment equaled 11.2%. STABLE, ALBEIT NARROW, RESERVE LEVELS Moody's expects the county to maintain its Current Fund balance at approximately the current level given a four-year track record of maintaining reserves between 5% and 6% and the county's stated commitment to maintaining structural balance, as reflected in annual moderate property tax increases and conservative budgeting of economically sensitive revenue sources. The county ended fiscal 2008 with a Current Fund balance of $24.3 million (5.27% of revenues) after fully replenishing $22 million of fund balance appropriated as a revenue source in the budget and adding $1.8 million to reserves. Notably, revenues from the Register of Deeds exceeded budgeted levels by more than $500,000, reflecting a conservative approach to budgeting of this economically sensitive revenue stream (budgeted at $9.4 million as compared with $13 million in actual receipts in 2007). This differentiates the county from its peers, many of whom saw shortfalls in this area in 2008. Sources of fund balance replenishment included surplus budgeted revenues ($2.4 million), particularly related to housing federal inmates and the county's jail facility, the receipt of non-budgeted revenues ($6.7 million), and the cancellation of current year appropriations, prior year appropriation reserves, and contracts and commitments ($3.2 million, $4 million and $4.5 million, respectively). The county received 53.3% of Current Fund revenues from property taxes, which local municipalities are responsible for remitting to the county in full, thereby ensuring a high level of predictability for its major revenue source. Fiscal 2009 operations resulted in a modest increase in the Current Fund balance of $243,000 after replenishing $23.8 million of surplus utilized as revenue. Consequently, reserves grew to a solid $24.5 million, or 5.21% of revenues. Sources of replenishment included over-performance of anticipated revenues (by approximately $1.5 million) driven by strong results at the county's hospital, the receipt of unanticipated revenue from housing state and federal inmates at the county's jail facility ($4.5 million), the cancellation of current year expenditures ($6.7 million), largely resulting from vacant positions (approximately 350 positions) as part of management's plan to control expenditures in light of declining economically sensitive revenues, and the cancellation of prior year appropriation reserves in line with recent trends. Register of Deeds revenues were budgeted to decline to $6.8 million (compared with actual collection of $10.06 million in 2008), in keeping with recent past practice. These economically sensitive revenues came in close to budget for the year. Fiscal 2009 operations reflect the deferral of a portion of the county's pension contribution ($6.8 million) as allowed by state law in 2009. Unaudited fiscal 2010 operations indicate full replenishment of $24 million from fund balance utilized as a revenue in the Current Fund, with a modest addition to fund balance of approximately $300,000. Current Fund balance as a percentage of revenues is expected to remain flat at 5.2%. Despite significant increases in pensions costs of approximately $7 million (resulting from the deferral in 2009) and health benefit costs of approximately $5 million, total appropriations for 2010 declined by 1.3% (budget to budget), reflecting work force reductions through attrition and hiring freezes. Given unaudited figures, appropriated fund balance is expected to be replenished with the payment received from a prior refunding ($1.03 million) and nonbudgeted revenues from additional prisoner inmates ($1.4 million) in conjunction with traditional sources of replenishment, such as cancelled and lapsed appropriations. The working fiscal 2011 budget indicates a similar fund balance appropriation as the previous year of $24.5 million, a high 96% of total Current Fund balance. Despite the large appropriation, Moody's anticipates financial operations will have similar results as previous years and the county will replenish most of that amount, particularly given the increase in added and omitted taxes receivables for 2011. DEBT BURDEN EXPECTED TO REMAIN MANAGEABLE; SIGNIFICANT AMOUNT OF COUNTY-GUARANTEED DEBT Moody's expects that the county's above-average net direct debt burden (1.4%) will remain manageable given limited future borrowing plans, ongoing tax base expansion and below average amortization of debt (69.2% repaid within 10 years). Debt service on bonds is a high 9.6% of fiscal 2010 expenditures (unaudited), reflecting the fact that the county has financed a significant portion of its infrastructure through lease purchase agreements (approximately $295 million outstanding as of April 2011). Moody's also notes the county's large amount of guaranteed short and long term debt (50% of total outstanding debt), particularly $39.4 million of county-guaranteed Harrison Stadium Land Acquisition Special Obligation Capital Appreciation Bonds, Series 2006 A-1 and A-2 (GO rated Aa3/negative outlook). Although the county has not been called upon to pay debt service for these bonds to date, the development site is not generating sufficient PILOT payments to cover debt service as intended, and Harrison (G.O. rated Ba3/negative outlook) has paid 2010 debt service with short term notes issued through the Hudson County Improvement Authority. The town expects to do the same for its 2011 principal and interest payment. Looking ahead, Moody's believes there is a heightened risk that the county may be called upon to make payment, given Harrison's challenges in meeting debt service obligations. The county also guarantees $270 million of BANs through the HCIA, which are repaid by participating municipalities through loan pools. Moody's views the large amount guaranteed debt, 50% of the county's total outstanding debt, in combination with its already above-average debt burden as a potential risk to financial stability should the guarantees be called. Outlook The negative outlook reflects the county's exposure, through guaranteed debt, to the Town of Harrison's (GO rated Ba3/negative outlook) underperforming development projects as well as to Hudson County Improvement Authority's relatively stressed solid waste system. Future rating reviews will consider the county's ability to maintain its current financial position in light of a heightened risk to fund guaranteed debt service, given the Town of Harrison's recent challenges in meeting debt obligations. (Please see Moody's report on the Town of Harrison dated May 20, 2011 for more.) In addition, the negative outlook considers the county's exposure to short-term market volatility, as county and county- guaranteed short-term notes and bonds, amounting to $307.7 million, represent approximately one-third of total outstanding debt and take the form of maturities ranging from $27 million to $163 million. WHAT COULD CHANGE THE RATING (UP - REMOVAL OF THE NEGATIVE OUTLOOK): - Growth in taxable assessed valuation over the medium term - Increased Current Fund balance - Increased liquidity -Decline in amount of county-guaranteed debt WHAT COULD CHANGE THE RATING (DOWN): - Failure to pay county-guaranteed debt service payments should the need arise - Decline in financial position as a result of fulfilling county- guaranteed debt service obligations. - Material multi-year declines in fund balances and liquidity - Significant growth in the HCIA's debt burden through direct borrowing or county-guaranteed debt KEY STATISTICS 2000 Population: 601,146 2007 Population (est.): 598,160 2010 Equalized Value (estimated): $66.6 billion 2010 Equalized Value Per Capita: $111,524 1999 Per Capita Income (as % of State and US): $21,154 (78% and 98%) 1999 Median Family Income (as % of State and US): $44,053 (67% and 88%) Direct Debt Burden: 1% Amortization of Principal (10 years): 69.2% Fiscal 2009 Current Fund balance : $24.5 million (5.2% of Current Fund revenues) Fiscal 2010 Current Fund balance (unaudited): $25.1 million (5.2% of Current Fund revenues) Long term G.O. debt outstanding: $622 million (approximately $364 million rated by Moody's) The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology. IRWIN MORTGAGE: Schedules and Statement Due Aug. 4 -------------------------------------------------- Irwin Mortgage Corporation faces an Aug. 4 deadline to file its schedules of assets and liabilities, statement of financial affairs, statement of executory contracts and unexpired leases, and a list of equity security holders. Section 521 of the Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure require Irwin Mortgage to file its Schedules and Statements within 14 days of the Petition Date. Irwin Mortgage sought an extension of that deadline, saying that, although it has started to compile information necessary to complete the Schedules and Statements, it was unable to complete the Schedules and Statements prior to the Petition Date. Completing the Schedules and Statements will require significant collection, review and assembly of information, Irwin Mortgage told the Court. About Irwin Mortgage For a number of years, Irwin Mortgage Corporation, based in Dublin, Ohio, originated, purchased, sold and serviced conventional and government agency backed residential mortgage loans throughout the United States. However, in 2006 and continuing into early 2007, IMC sold substantially all of its assets, including its mortgage origination business, its mortgage servicing business, and its mortgage servicing rights portfolio, to a number of third party purchasers. As a result of those sales, IMC terminated its operations and has been winding down since 2006. Irwin Mortgage filed for Chapter 11 bankruptcy (Bankr. S.D. Ohio Case No. 11-57191) on July 8, 2011. Judge Charles M. Caldwell presides over the case. Nick V. Cavalieri, Esq., and Matthew T. Schaeffer, Esq., at Bailey Cavalieri LLC, serve as the Debtor's counsel. Fred C. Caruso and Development Specialists Inc. provide wind-down management services to the Debtor. In its petition, the Debtor estimated assets of $10 million to $50 million, and debts of $50 million to $100 million. Mr. Caruso signed the petition. IRWIN MORTGAGE: Hiring KCC as Claims and Noticing Agent ------------------------------------------------------- Kurtzman Carson Consultants LLC is assisting Irwin Mortgage Corporation as its claims, noticing, and solicitation agent. Irwin Mortgage said in court papers that it has numerous potential creditors and other parties in interest in the Chapter 11 case. Although the office of the Clerk of the United States Bankruptcy Court for the Southern District of Ohio ordinarily would serve notices on the creditors and other parties in interest and administer claims against the Debtor, Irwin Mortgage said the Clerk's Office may not have the resources to undertake those tasks, especially in light of the magnitude of the Debtor's creditor body and the tight timelines that frequently arise in chapter 11 cases. Irwin Mortgage said hiring KCC would provide the most efficient and effective manner to provide notices. KCC has received a $15,000 retainer pre-bankruptcy from Irwin Mortgage. KCC's Drake Foster attests that KCC neither holds nor represents an interest materially adverse to the Debtor's estate nor has a connection to the Debtor, its creditors or their related parties with respect to any matter for which KCC will be employed, and is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code. KCC may be reached at: Drake Foster KURTZMAN CARSON CONSULTANTS LLC 2335 Alaska Ave. El Segundo, CA 90245 Tel: 310-823-9000 Fax: 310-823-9133 E-mail: dfoster@kccllc.com About Irwin Mortgage For a number of years, Irwin Mortgage Corporation, based in Dublin, Ohio, originated, purchased, sold and serviced conventional and government agency backed residential mortgage loans throughout the United States. However, in 2006 and continuing into early 2007, IMC sold substantially all of its assets, including its mortgage origination business, its mortgage servicing business, and its mortgage servicing rights portfolio, to a number of third party purchasers. As a result of those sales, IMC terminated its operations and has been winding down since 2006. Irwin Mortgage filed for Chapter 11 bankruptcy (Bankr. S.D. Ohio Case No. 11-57191) on July 8, 2011. Judge Charles M. Caldwell presides over the case. Nick V. Cavalieri, Esq., and Matthew T. Schaeffer, Esq., at Bailey Cavalieri LLC, serve as the Debtor's counsel. Fred C. Caruso and Development Specialists Inc. provide wind-down management services to the Debtor. In its petition, the Debtor estimated assets of $10 million to $50 million, and debts of $50 million to $100 million. Mr. Caruso signed the petition. IRWIN MORTGAGE: Can Reject Fishers Building Lease ------------------------------------------------- Irwin Mortgage Corporation won Bankruptcy Court authority to reject the lease for a multi-story, 125,290-square foot commercial office building located at 10500 Kincaid Dr., in Fishers, Indiana, effective June 30, 2011. Irwin Mortgage leased the property from Lantern Partners, LLC. At one point the Debtor's operations were conducted at the Fishers Building. The Debtor has since sub- leased the property to entities, including New Century Mortgage Corporation, which was subsequently assigned to Carrington Mortgage Services, LLC, during New Century's bankruptcy; Freedom Mortgage Corporation; C.H. Robinson Worldwide, Inc.; Nelnet, Inc.; and DECA Financial Services, LLC. In deciding to reject the lease, Irwin Mortgage said the Fishers Leases generate a net negative monthly cash flow of $30,000 per month (exclusive of additional amounts due for real estate taxes) and do not provide any benefit to the Debtor, its estate, or its creditors. Moreover, the Debtor believes that there is no potential value in the Fishers Leases to be realized through a possible sale, assumption and assignment. The Debtor's Monthly Base Rent to Lantern is $157,414 plus operating expenses including taxes. Meanwhile, the Debtor receives these amounts on account of the Subleases, which have all been paid for the month of June 2011: Nelnet Sublease $11,420.92 Carrington Assigned Sublease $83,325.26 Freedom Sublease $68,948.34 Robinson Sublease $15,152.13 DECA Sublease $9,093.75 The Debtor proposed that any payments received by IMC from the Fishers Subleases on account of the periods after June 30, 2011 -- whether received by IMC before or after June 30, 2011 -- be paid to Lantern. Lantern objected to the Debtor's request for a retroactive order rejecting the Lease, pointing out that the proposed effective date of rejection -- June 30 -- precedes the bankruptcy filing date. Lantern said the request is improper as it would leave Lantern with the inability to collect rent for 13 days despite not knowing that Irwin Mortgage was going to file bankruptcy, that Irwin Mortgage was going to reject the lease, or whether the Court would approve the lease rejection. Lantern said it would also be in a precarious position wherein it did not have the ability to relet the premises yet it may also not attempt to obtain any rent from the Debtor for July, either as an administrative claim or as a prepetition debt. In allowing rejection of the lease, the Bankruptcy Court signed off on an Agreed Order addressing Lantern's objections. Pursuant to the Agreed Order, Lantern will have an agreed, allowed administrative claim for $2,500, which will be Lantern's only claim arising from, or related to, the month of July 2011. Lantern reserves all rights to assert pre-petition claims against Irwin Mortgage as may be permitted by applicable law. IMC reserves all rights to object to any such claims asserted by Lantern. Moreover, the Debtor will endorse and deliver to Lantern, without any recourse to the Debtor whatsoever, checks received by Debtor on account of some of the Fishers Subleases for the period after June 30, 2011: (a) check from Carrington dated July 1, 2011, for $69,418.56; and (b) check from Robinson dated June 21, 2011, for $15,162.13. Lantern is represented by: Jay Curts, Esq. COOTS HENKE & WHEELER, P.C. 255 East Carmel Drive Carmel, IN 46032 Tel: 317-844-4693 E-mail: jcurts@chwlaw.com About Irwin Mortgage For a number of years, Irwin Mortgage Corporation, based in Dublin, Ohio, originated, purchased, sold and serviced conventional and government agency backed residential mortgage loans throughout the United States. However, in 2006 and continuing into early 2007, IMC sold substantially all of its assets, including its mortgage origination business, its mortgage servicing business, and its mortgage servicing rights portfolio, to a number of third party purchasers. As a result of those sales, IMC terminated its operations and has been winding down since 2006. Irwin Mortgage filed for Chapter 11 bankruptcy (Bankr. S.D. Ohio Case No. 11-57191) on July 8, 2011. Judge Charles M. Caldwell presides over the case. Nick V. Cavalieri, Esq., and Matthew T. Schaeffer, Esq., at Bailey Cavalieri LLC, serve as the Debtor's counsel. Fred C. Caruso and Development Specialists Inc. provide wind-down management services to the Debtor. In its petition, the Debtor estimated assets of $10 million to $50 million, and debts of $50 million to $100 million. Mr. Caruso signed the petition. IRWIN MORTGAGE: Sec. 341 Creditors' Meeting Set for Aug. 8 ---------------------------------------------------------- The U.S. Trustee for the Southern District of Ohio will hold a Meeting of Creditors pursuant to 11 U.S.C. 341(a) in the bankruptcy case of Irwin Mortgage Corporation on Aug. 8, 2011, at 10:00 a.m. at Suite 100. Objection to dischargeability of certain debts are due Oct. 7, 2011. For a number of years, Irwin Mortgage Corporation, based in Dublin, Ohio, originated, purchased, sold and serviced conventional and government agency backed residential mortgage loans throughout the United States. However, in 2006 and continuing into early 2007, IMC sold substantially all of its assets, including its mortgage origination business, its mortgage servicing business, and its mortgage servicing rights portfolio, to a number of third party purchasers. As a result of those sales, IMC terminated its operations and has been winding down since 2006. Irwin Mortgage filed for Chapter 11 bankruptcy (Bankr. S.D. Ohio Case No. 11-57191) on July 8, 2011. Judge Charles M. Caldwell presides over the case. Nick V. Cavalieri, Esq., and Matthew T. Schaeffer, Esq., at Bailey Cavalieri LLC, serve as the Debtor's counsel. Fred C. Caruso and Development Specialists Inc. provide wind-down management services to the Debtor. In its petition, the Debtor estimated assets of $10 million to $50 million, and debts of $50 million to $100 million. Mr. Caruso signed the petition. IRONWOOD VENTURES: Case Summary & 6 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Ironwood Ventures 1760 Highway 395 Minden, NV 89423 Bankruptcy Case No.: 11-52369 Chapter 11 Petition Date: July 25, 2011 Court: U.S. Bankruptcy Court District of Nevada (Reno) Judge: Bruce T. Beesley Debtor's Counsel: Alan R. Smith, Esq. THE LAW OFFICES OF ALAN R. SMITH 505 Ridge Street Reno, NV 89501 Tel: (775) 786-4579 E-mail: mail@asmithlaw.com Scheduled Assets: $4,602,000 Scheduled Debts: $3,033,882 A list of the Company's six largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/nvb11-52369.pdf The petition was signed by John Colistra, general partner. JACKSON HEWITT: Files Third Plan Supplement ------------------------------------------- BankruptcyData.com reports that Jackson Hewitt Tax Service filed with the U.S. Bankruptcy Court a Third Supplement for its Joint Prepackaged Plan of Reorganization. Law360 says the Supplement contains these documents: Supplemental List of Rejected Contracts and Leases and Biographies of the Directors of Reorganized Jackson-Hewitt Tax Service on the Plan effective date. About Jackson Hewitt 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. BDO Financial serves as financial advisors to the Official Committee of Unsecured Creditors. 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. But the unsecured creditors won an extra month to investigate the company's prepackaged reorganization plan and secured resources for the effort after a judge refused to place a hard cap on attorneys' fees. JEFFERSON, AL: Bondholders Asked to Forgive 1/3 of $3.14BB Debt --------------------------------------------------------------- Michael Corkery, writing for The Wall Street Journal, reports that holders of more than $3 billion in debt issued by Jefferson County, Alabama, are working on a rescue that would leave them with steep losses. According to the Journal, a person familiar with the matter said the offer calls for bondholders to forgive about $1 billion of the county's $3.14 billion in sewer debt. The report says banks, hedge funds and mom-and-pop investors that own the sewer bonds are scrambling to agree on concessions before a Thursday meeting, where officials in Jefferson County, which includes Birmingham, might decide to file for bankruptcy. According to the Journal, as of late Tuesday, the situation remained fluid, and it was possible the last-ditch offer would fall apart. The Journal also relates John S. Young, a court- appointed receiver who is participating in the talks, said bondholders still "have a way to go." The Journal notes that if bondholders walk away from about a third of what they are owed by Jefferson County, it would be one of the biggest "haircuts" ever in the U.S. municipal-bond market. County commissioners previously asked for $1.3 billion in concessions, demanding a response by this week. Jefferson County Commissioner Jimmie Stephens said Tuesday afternoon that officials are likely to put off the bankruptcy-filing discussion if bondholders go through with the $1 billion offer. The Journal further reports that J.P. Morgan Chase & Co., because of its role in arranging the deal, has offered to absorb the biggest loss of any bondholder as part of a $1 billion offer, according to a person familiar with the situation. The report also says bondholders want insurers that back payments on some of the bonds, including Syncora Holdings Ltd. and Financial Guaranty Insurance Co., to make good on at least some of their promised payouts. The Journal says a Syncora spokesman declined to comment, and FGIC officials couldn't be reached. A spokesman for New York state's insurance regulator, which is part of the Jefferson County talks because it oversees the insurers, declined to comment Tuesday. According to the Journal, hedge funds that bought the county's bonds on the cheap are angling in the talks for the biggest possible profit. Mr. Young, the receiver, said individual investors are expected to get all their money back. The report says any deal hinges on whether Alabama officials agree to guarantee new debt and pledge the state's "moral obligation" to pay bond investors in case Jefferson County can't do so. Alabama's legislature would have to approve such a guarantee. On Tuesday, Jefferson County officials hired bankruptcy lawyer Kenneth Klee, Esq., of Los Angeles firm Klee, Tuchin, Bogdanoff & Stern LLP. Mr. Klee represented Orange County, Calif., in the last major U.S. municipal bankruptcy, in 1994. KENTUCKIANA MEDICAL: Puts Emergency Room Plans on Hold ------------------------------------------------------ David A. Mann at News and Tribune reports that plans for opening an emergency room are being put on hold by Kentuckiana Medical Center. During a hearing last week, hospital representatives had spoken in favor of opening the emergency room as a means of creating new revenue. However, on Monday the hospital withdrew a request for a priming lien -- which would have allowed the emergency room plans to move forward. The motion was accepted by Judge Basil Lorch III following conferences between attorneys. The bankruptcy judge will convene a hearing Aug. 24. Clarksville, Indiana-based Kentuckiana Medical Center LLC filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ind. Case No. 10-93039) on Sept. 19, 2010. David M. Cantor, Esq., at Seiller Waterman LLC, represents the Debtor. The Debtor scheduled $9,496,899 in assets, and $25,029,083 in liabilities. KMC REAL ESTATE: Wants to Borrow $2,000,000 from Private Investor ----------------------------------------------------------------- KMC Real Estate Investors, LLC, asks the U.S. Bankruptcy Court for the Southern District of Indiana for authority to obtain postpetition financing of up to $2,000,000 from Gus Goldsmith, a private investor in the local area, to be secured by priming liens on the Debtor's real estate property, consisting of a physician- owned for-profit acute care hospital in Clarksville, Indiana, commonly known as 4601 Medical Plaza Way. The significant terms of the DIP Facility are: Amount : $2,000,000 Interest : 12.00% Amortization/payments: 30 years; $20,572.24 monthly Balloon : All outstanding principal and interest due within 3 years from date of Note. Personal Guaranties : Kentuckiana Medical Center, LLC Kentuckiana Medical Center, LLC, an affiliate of the Debtor, which filed a separate petition (Case No. 10-93039) on Sept. 9, 2010, leases the hospital facility premises owned by the Debtor. The Debtor says it requires the DIP financing to complete construction of its Emergency Room, as sell as staff eight additional completed beds within the Hospital. The first mortgage on the property is held by RL BB Financial, LLC, who purchased the obligations and mortgage from Branch Bank and Trust Company. RL BB says it is owed $22 million. RL BB Financial Objection RL BB Financial opposes the Debtor's motion for authorization to obtain post-petition financing, to be secured by a priming lien on its collateral, because (1) it would be inappropriate to grant the DIP Lender a priming lien where the loan proceeds are to benefit an entity other than the Debtor; and (2) its interest in its collateral is not adequately protected. The prepetition lender says that although the Debtor and KMC have overlapping ownership, they are not the same entity. RL BB Financial says more than $1 million of the financing proceeds will be used to pay debts of KMC and the remaining balance of $1 million will be used to acquire equipment that is of no use to the Debtor, only to KMC. About KMC Real Estate Investors LLC Clarksville, Indiana-based KMC Real Estate Investors LLC owns certain real property located in Clark County, Indiana, commonly known as 4601 Medical Plaza Way, Clarksville, Indiana. The Company filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ind. Case No. 11-90930) on April 1, 2011. Gary Lynn Hostetler, Esq., and Courtney Elaine Chilcote, Esq., at Hostetler & Kowalik, P.C., in Indianapolis, Indiana, serve as the Debtor's bankruptcy counsel. The Debtor disclosed it has undetermined assets and $24,810,090 in liabilities as of the Chapter 11 filing. Affiliate Kentuckiana Medical Center, LLC, previously sought Chapter 11 protection (Bankr. S.D. Ind. Case No. 10-93039) on Sept. 9, 2010. As reported in the TCR on July 19, 2011, the Bankruptcy Court granted RL BB Financial relief from stay on the Debtor's assets. The relief from stay is effective on July 25, 2011, at the close of business. LEHMAN BROTHERS: Dist. Judge Sustains Claims of Ex-Shareholders --------------------------------------------------------------- District Judge Lewis A. Kaplan sustained, in large part, claims asserted by former Lehman Brothers shareholders in a federal securities action related to the company's 2008 collapse. In a 106-page opinion, Judge Kaplan of the United States District Court for the Southern District of New York held that plaintiffs had sufficiently alleged federal securities claims against former officers and directors of Lehman Brothers, including former CEO Richard S. Fuld and former CFO Erin Callan, Lehman's auditor, Ernst & Young, and fifty-one underwriters that assisted Lehman Brothers in issuing billions of dollars in now-worthless securities to the investing public prior to its bankruptcy. Plaintiffs, which include Alameda County Employees' Retirement Association, the Government of Guam Retirement Fund, the Northern Ireland Local Government Officers' Superannuation Committee, the City of Edinburgh Council as Administering Authority of the Lothian Pension Fund, and the Operating Engineers Local 3 Trust Fund, had alleged, among other things, that the defendants materially misrepresented Lehman's financial position through the use of "Repo 105" transactions, and made material misstatements and omissions regarding Lehman's risk exposures and risk management systems. Judge Kaplan found that Lehman's use of "Repo 105" transactions, which the company used to artificially improve its reported capital position by temporarily removing assets from its balance sheet at quarter-end, "paint[ed] a misleading picture of the company's financial position at the end of each quarter." He also found that the defendants' repeated statements regarding the "strong" and "conservative" nature of Lehman's risk management systems were materially false and misleading "given the allegations of frequent, significant departures from Lehman's internally stated policies." Co-Lead Counsel Bernstein Litowitz Berger & Grossmann LLP and Kessler Topaz Meltzer & Check, LLP are pleased that the Court allowed shareholders' core allegations in this matter to proceed, and look forward to proving the allegations in the Complaint. Co- Lead Counsel views the Court's decision as an important victory for shareholders whose investments were decimated by Lehman's demise. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Should Reach Global Deal With Merrill, Says Panel ------------------------------------------------------------------ Merrill Lynch Portfolio Management, Inc., and Merrill Lynch Capital Services, Inc., are asking the U.S. Bankruptcy Court for the Southern District of New York to compel specific performance from Lehman Brothers Special Financing Inc. and Lehman Brothers Holdings Inc. of the terms of a subordination agreement, including, but not limited to release of mortgages and liens, in connection with a proposed transfer of the Brampton Court Apartment located in Broward County, Florida. The Official Committee of Unsecured Creditors supports the Debtors' opposition to the relief sought in the request of Merrill Lynch Portfolio Management, Inc. and Merrill Lynch Capital Services, Inc. to compel specific performance of subordination agreement terms. The Creditors' Committee asserts that the requested relief is procedurally improper, not supported by the terms of the Subordination Agreement, and not conducive to a global settlement of the parties' respective interests in the Brampton Project and the other projects. As a threshold matter, the Creditors' Committee points out, Merrill has already obtained from the Court relief from the automatic stay to allow it to enforce its rights under the Subordination Agreement in connection with the Brampton Project, and hence, Merrill should seek to enforce those rights in Florida, where the Projects are located and whose laws govern the Subordination Agreement. The Creditors' Committee submits that Merrill and the Debtors should be encouraged to reach a global settlement with respect to the Projects that will enable Merrill to liquidate its interests in the Projects, while also protecting the Debtors' interests and preserving value for the Debtors' estates and creditors. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins Approval of NYSDTF Tax Agreements ------------------------------------------------------- James W. Giddens, as trustee for the liquidation of the business of Lehman Brothers Inc. pursuant to the Securities Investor Protection Act of 1970, won court approval of his agreements with the New York State Department of Taxation and Finance to resolve certain disputes regarding sales and compensating use tax and withholding tax. Tax Disputes Prior to the September 19, 2008 filing date of the SIPA Proceeding, Lehman Brothers Inc. was under audit by the state of New York for sales and compensating use tax with respect to the audit periods March 1, 1997, through February 29, 2004, and March 1, 2004 through August 31, 2008. The New York State Department of Taxation and Finance filed an unsecured priority status prepetition claim in the SIPA Proceeding asserting that LBI was liable with respect to sales and compensating use tax for these periods and amounts: Period End Tax Interest Total ---------- --- -------- ----- 02/29/2004 -- $2,667,760 $2,667,760 05/31/2008 $1,936,648 $446,771 $2,383,420 08/31/2008 $113,920 -- $113,920 --------- Total: $5,165,101 On June 25, 2010, the LBI Trustee, on behalf of LBI, submitted a request to the NYSDTF for a sales and compensating use tax refund to the NYSDTF for $3,110,280 for the period March 1, 1997, through February 29, 2004. The NYSDTF requested additional information with respect to LBI's request for a sales and compensating use tax refund; when the Trustee's personnel were unable to produce this information, the NYSDTF denied the request, relates James B. Kobak, Jr., Esq., at Hughes Hubbard & Reed LLP, in New York. He adds that the LBI Trustee has requested a conciliation conference to protest the disallowance, and even if allowed, the refund could be offset by any prepetition New York State tax liabilities assessed by the NYSDTF. LBI was also under audit by New York for income tax withholding prior to and continuing after the Filing Date, for the audit period of January 1, 2007, through December 31, 2008. On August 10, 2009, the NYSDTF issued assessments of LBI's liability for withholding taxes owed to these localities for these periods and amounts: Period End Yonkers N.Y. City N.Y. State ---------- ------- --------- ---------- 06/30/2007 $1,487 $239,156 $732,226 12/31/2007 $2,348 $381,671 $912,376 06/30/2008 $1,402 $228,567 $699,807 12/31/2008 $2,716 $441,644 $1,035,744 --------- Total: $4,679,150 The NYSDTF issued notices of deficiency and filed audit adjustments regarding LBI's withholding tax liability. On March 6, 2009, the LBI Trustee submitted a request for a withholding tax refund to the NYSDTF for $2,837,000 for the period July 1, 2008, through September 30, 2008. On August 29, 2009, the NYSDTF denied the claim in full. The Trustee reserved his right to appeal the NYSDTF's denial. Mr. Kobak says that although the NYSDTF failed to timely file a claim against LBI for withholding tax, the NYSDTF nonetheless may set off any refund of withholding tax owed to the LBI Trustee for prepetition periods against any prepetition New York State tax liabilities assessed by the NYSDTF. Closing Agreements The Closing Agreements, which were negotiated at arm's-length between the LBI Trustee and Trustee's tax advisors, and the NYSDTF, include these material terms: Closing Sales and Use Tax Withholding Tax Agreements Closing Agreement Closing Agreement ---------- ----------------- ----------------- Assessment The NYSDTF agrees to The NYSDTF agrees to abate the balance due on abate the balance due the Sales and Use Tax on the Withholding Tax Audit Period Audit Period Releases by The Trustee agrees: The Trustee agrees: the LBI * to waive any rights to * to waive any rights Trustee protest and withdraw to protest and pending protests withdraw pending relating to the Sales protests relating to and Use Tax Audit the Withholding Tax Period Audit Period * to withdraw pending * to withdraw pending requests for refund requests for refund or credit * that he is not entitled to any refund * to refrain from filing any future * that he will not file application or any future application claims for refund or claims for refund or credit Face Amount $3,110,280 $2,837,000 of Disputed or Disallowed Refund Claims Waived by the LBI Trustee Amounts of $5,165,101 $4,679,150 Assessments and Claims Waived by the NYSDTF The NYSDTF agrees to these releases with respect to the Sales and Use Tax Closing Agreement: -- to waive any rights to assess and to file proofs of claim in the SIPA Proceeding; -- to withdraw all pending assessments and proofs of claim asserted against LBI in the SIPA Proceeding; and -- that it is not entitled to any tax, interest or penalties from any person who may be deemed responsible or liable for LBI's taxes, interest, or penalties under the New York State Tax Law. The NYSDTF also agrees to these releases with respect to the Withholding Tax Closing Agreement: -- to waive any rights to assess and to file proofs of claim in the SIPA Proceeding; -- to withdraw all pending assessments and proofs of claim asserted against LBI in the SIPA Proceeding; -- that it is not entitled to any tax, interest, or penalties from any person who may be deemed responsible or liable for LBI's taxes, interest, or penalties under the New York State Tax Law or the New York City Administrative Code; and -- that it reserves its right to investigate and pursue additional tax, interest, or penalties with respect to a "reportable transaction" referenced in Section 25 of the Tax Law or an "abusive tax avoidance transaction" referenced in Section 683(c)(11) of the Tax Law. Mr. Kobak contends that the LBI Trustee's decision to waive his right to seek refunds of tax paid during the Sales and Use Tax Audit Period and the Withholding Tax Audit Period in exchange for the NYSDTF's agreement to waive any rights to assess, assert potential claims, and withdraw its pending claim against LBI represents a reasonable exercise of the Trustee's business judgment. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LBSF Sues AmeriCredit for Breach of Swaps Deal --------------------------------------------------------------- Lehman Brothers Special Financing Inc. filed an adversary proceeding against AmeriCredit Automobile Receivables Trust 2005- B-M, AmeriCredit Automobile Receivables Trust 2007-B-F and AmeriCredit Automobile Receivables Trust 2007-D-F, acting through AmeriCredit Financial Services, Inc., in its capacity as servicer, arising from the Trust's breach of contractual obligations concerning the proper valuation of amounts due to the Debtor upon termination of certain interest rate swaps and their breach of implied covenant of good faith and fair dealing inherent in the parties' contract. LBSF entered into certain interest rate swaps with each Trust as an issuer-trust in separate automobile receivables securitizations sponsored and serviced by AmeriCredit. Under the securitizations, the Trusts issued an aggregate of $3.85 billion principal amount of fixed and variable rate notes and entered into the interest rate swaps with LBSF with respect to the variable tranche of notes. The Trusts elected to terminate the swaps due to the commencement of Lehman Brothers Holdings Inc.'s bankruptcy proceeding in September 2008. According to Turner P. Smith, Esq., at Curtis, Mallet-Prevost, Colt & Mosle LLP, in New York, in derogation of their contractual obligations, the Trusts failed to solicit bids and calculate the early termination payment under any of the swaps in the manner required by the relevant agreements, and substantially undervalued -- and underpaid -- the early termination payments to which LBSF was contractually entitled. LBSF filed the action for breach of contract and breach of implied covenant of good faith and fair dealing to recover amounts property due to LBSF from the Trusts and to determine each of the parties' rights, duties, and obligations under their agreements, the Bankruptcy Code, and applicable non-bankruptcy law. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins Nod to Modified Asset Disposal Rules ---------------------------------------------------------- Lehman Brothers Holdings Inc. obtained a court order approving changes to the process governing the company's various transactions in connection with its real estate investments. To recall, the U.S. Bankruptcy Court for the Southern District of New York authorized the company and its affiliated debtors on June 17, 2010, to follow certain procedures in disposing their real estate assets and in making new or additional debt and equity investments. LBHI specifically sought and obtained approval to expend funds in connection with any real estate investments without the need to provide notice to any party or get court approval for these purposes: (i) ordinary course expenses required for the operation and management of a property or loan including real estate taxes and insurance premium payments; and (ii) protective advances to cure a superior loan default in an amount up to and including $5 million, and for non- discretionary or emergency property related purposes. The changes will not require the company to get court approval for new investments of more than $5 million but less than or equal to $25 million in connection with real estate investments of more than $100 million. Instead, those new investments will be subject to the approval and objection rights of the Official Committee of Unsecured Creditors in accordance with the procedures. LBHI will also continue to file a quarterly report of all new investments. However, instead of identifying the value of the real estate investment underlying each new investment, the company will provide a range of values corresponding to the thresholds in the procedures under which the value of the real estate investment falls. Jacqueline Marcus, Esq., at Weil Gotshal & Manges LLP, in New York, says that contrary to what the ad hoc group of Lehman Brothers creditors asserts, the changes to the reporting requirements won't reduce the disclosures required of the company. She points out that they will merely replace one informational metric with an alternative measure. The ad hoc group opposes the proposed changes out of concern that the disclosures to be made will be reduced as LBHI will no longer be required to identify the value of the real estate investment. Ms. Marcus also says the changes to the reporting requirements are limited and maintain the same level of transparency as those approved by the Court in its prior order. The Creditors' Committee supports the approval of the proposed changes to the procedures, saying it will "better preserve the value of the real estate investments." About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins Nod to Expand Scope of Legal Costs Fund ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Lehman Brothers Holdings Inc. and its affiliates on December 3, 2008, to pay the legal costs incurred by certain former employees in connection with investigations, arbitrations and other legal actions that were not covered by an applicable insurance policy, or where an insurer asserted non-coverage, up to an aggregate cap of $3 million. The Legal Costs Fund was subsequently used to primarily pay the costs associated with certain arbitration proceedings relating to auction rate securities. Although the Debtors' insurers of director and officer insurance policies had initially denied coverage with respect to the Arbitration Proceedings, the insurers eventually recognized the Arbitration Proceedings as within the insurance coverage and the Debtors were, therefore, reimbursed for funds disbursed in connection with defending those proceedings. Consequently, the Legal Costs Fund currently has a balance of approximately $3 million. Richard Krasnow, Esq., at Weil Gotshal & Manges LLP, in New York, tells the Court that there currently is a dispute with insurers that issued certain of the Debtors' policies as to whether particular claims fall within the 2007-2008 policy year or the 2008-2009 policy year. He notes that if the pending dispute is not satisfactorily resolved, the Debtors and one or more former employees may need to commence an action seeking a determination of insurance policy coverage. The legal costs of that action would not be covered by the insurance policies and also is not currently within the scope of the authorized use of the Legal Costs Fund, even though the objective of any action would, if successful, potentially reduce the use of the Legal Costs Fund to pay defense costs in connection with underlying arbitrations and actions. Accordingly, the Debtors recently obtained approval to expand the scope of the matters for which former employees may seek reimbursement of their legal costs from the Legal Costs Fund to include potential and actual litigation costs with insurers regarding coverage disputes. The Legal Costs Fund would, however, still be subject to the $3 million cap and the conditions set forth in the Legal Costs Fund Order. Current Director Costs Fund In May 2009, and again in June 2010, the Debtors' purchased two separate one year tail extensions of their 2008-2009 policy. Rather than incur costs in purchasing additional tail extension, estimated at $12 million, the Debtors provided up to $2 million for their current directors to enable payment of only legal costs, and not payment of settlements or judgments, associated with claims that are (i) asserted against them prior to the confirmation and effective date of a Chapter 11 plan for Lehman Brothers Holdings Inc. becoming effective in these Chapter 11 cases, and (ii) based upon assertions, first made from May 17, 2011, to LBHI's emergence from Chapter 11, of improper acts or omissions by Current Directors from the "Pending and Prior Litigation Date", as defined in the 2008-09 D&O Policies, to May 16, 2009, in their capacity as directors of LBHI. The Debtors, therefore, sought and obtained the Court's authority to implement the Current Directors' Costs Fund. The Official Committee of Unsecured Creditors supports both the expansion of the scope of the Legal Costs Fund, as well as the implementation of the Current Directors' Costs Fund. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Further Amends Plan for SunCal Debtors ------------------------------------------------------- Alfredo Perez, Esq., at Weil Gotshal & Manges LLP, in Houston, Texas, counsel to Lehman Brothers Holdings Inc., filed with the U.S. Bankruptcy Court for the Southern District of New York a supplemental declaration stating that on July 15, 2011, the Second Amended Lehman/Trustee TD Plan and the Second Amended Lehman VD Plan for the SunCal Debtors were amended. The primary changes to the Amended Lehman Plans are: (a) Reliance Claims Identified and Definition Revised. After the June 20, 2011 filings of the Lehman Plans the Official Committee of Unsecured Creditors in the SunCal Voluntary Cases objected, inter alia, that the holders of Reliance Claims should be identified, which was something that the Official Committee of Unsecured Creditors in the SunCal Involuntary Cases previously had requested, and argued that the "Reliance Claim" definition could be simplified. Because the definitional changes requested are non-substantive and clarify the pre-existing definition, they were adopted in whole and are set forth in the Third Amended Lehman Plans. Because LCPI and its co-plan proponents now have sufficiently completed a review of proofs of claim and other information to provide a "Reliance Claim" list, they have included the list; (b) Revising the Executory Contract/Unexpired Lease Treatment. The California Bankruptcy Court and two creditors raised objections regarding the delay in the Lehman Plans with respect to addressing executory contracts. The Third Amended Lehman Plans address these concerns; (c) Liquidating Trustee Identified for Plan in Voluntary Cases. The SunCal Trustee previously agreed to serve as the liquidating trustee in the SunCal Involuntary Cases and subsequently agreed to also serve as the liquidating trustee in the SunCal Voluntary Cases. The Second Amended Lehman VD Plan was accordingly amended; and (d) Clarify, Update and Clean Up. A variety of requested clarifications, fixing of typographical errors, updating of figures, and additional minor revisions were made, including: * updating cash amounts and, thus, cash secured and deficiency claim amounts for LCPI, et al.; * amending the definition of Administrative Claims to address practical concerns; * ensuring LCPI's right to withdraw from the Third Amended Lehman Plans is explicit should circumstances change unrelated to the specified monetary conditions already set forth; * shortening the time to pay certain non-priority, unsecured claims, by a few weeks; and * clarifying the language as to when objections to Reliance Claim status must be brought. Copies of the blacklined Third Amended Lehman Plans, which are marked to reflect the changes made to the Second Amended Lehman Plans are available for free at: http://bankrupt.com/misc/LBHI_3rdSunCalTDPlan_07182011.pdf http://bankrupt.com/misc/LBHI_3rdSunCalVDPlan_07182011.pdf LBHI Committee Supports Motion The Official Committee of Unsecured Creditors of appointed in the Lehman Debtors' bankruptcy cases supports the Lehman Plans. The Lehman Plans establish the best framework for preserving and maximizing the prospects of a recovery by the Debtors in the SunCal Debtors' bankruptcy cases, asserts Dennis Dunne, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, on behalf of the Lehman Creditors Committee. He explains that the Lehman Plans resolve the uncertainty attendant in litigating the adversary proceedings involving the parties, and that if the Lehman Plans are consummated, the Debtors will take title to the SunCal Properties and will be able to obtain the best recovery possible on account of their claims by either selling the SunCal Properties or pursing development plans in connection therewith. Mr. Dunne tells Judge Peck that the Lehman Creditors Committee has been working with the Debtors and their advisors since the beginning of the SunCal Debtors' Cases to address the numerous legal and business issues that have arisen therein. He notes that the Lehman Creditors Committee has considered and approved earlier versions of the Lehman Plans and has recently reaffirmed its support for the modifications proposed in the Second Amended Lehman/Trustee TD Plan and the Second Amended Lehman VD Plan. The Lehman Creditors Committee, among other things, believes that the slightly revised funding thresholds are reasonable. * * * Judge Peck authorized, but not directed, the Debtors to enter into the Third Amended Lehman Plans and consummate all of the transactions contemplated thereunder. The Debtors are also authorized, but not directed, to make all payments contemplated under the Third Amended Lehman/Trustee TD Plan, provided that if, prior to that plan's effective date, the Lehman Creditors' good faith estimate of the amount of the funding the Lehman Creditors could be required to provide exceeds $55 million, plus the amount of the administrative loans any of them made after August 10, 2010, the Debtors will consult with and obtain the consent of the Lehman Creditors Committee prior to determining whether to consummate the Third Amended Lehman/Trustee TD Plan. The Debtors are further authorized, but not directed, to make all payments contemplated under the SunCal VD Plan, provided that if, prior to that plan's effective date, either (a) the Lehman Lenders' good faith estimate of the amount of funding the Lehman Lenders could be required to provide under the plan exceeds $22 million with respect to the Group I Debtors, or (b) the Lehman Lenders' good faith estimate of "Allowed Senior Claims" exceeds $3 million with respect to the Group II Debtors, the Debtors will consult with and obtain the consent of the Lehman Creditors Committee prior to determining whether to consummate the Third Amended Lehman VD Plan. LCPI or LBHI may cash bid in the SunCal Property Auction or any market sale of the SunCal Properties, provided any cash bids are subject to the business judgment of the Debtors' Board of Directors and the consent of the Lehman Creditors Committee. LBHI may provide for the LBHI Plan Funding, provided that the allocation of costs and benefits between LBHI and LCPI in connection with the funding of the Third Amended Lehman Plans is preserved for determination at a later date. Judge Peck also ruled that any and all pre- and postpetition claims, rights and obligations that the Debtors may have against each other in connection with the subject matter of the Motion or the transactions contemplated by the Lehman Plans and the SunCal Plans are fully preserved and will not be prejudiced by the entry of this Order. The allocation of costs and benefits between or among the Debtors and non-Debtor affiliates in connection with the SunCal Plans is preserved. About SunCal Companies SunCal Companies -- http://www.suncal.com/-- has more than 250,000 residential lots and 10 million square feet of commercial space in various stages of development throughout California, Arizona, Nevada and New Mexico. Gramercy Warehouse Funding LLC and several creditors filed involuntary petitions each against LBREP/L-SunCal Master I LLC, LBREP/L-SunCal McAllister Ranch LLC, LBREP/L-SunCal McSweeny Farms LLC, and LBREP/L-SunCal Summerwind Ranch LLC on Sept. 11, 2008 (Bankr. C.D. Calif Case No. 08-15588, 08-15637, 08-15639, and 08-15640). Daniel H. Reiss, Esq., at Levene, Neale, Bender, Rankin & Brill represents the petitioners. SunCal affiliates led by Palmdale Hills Property, LLC, filed voluntary Chapter 11 petitions (Bankr. C.D. Calif. Case No. 08-17206) on Nov. 6, 2008. Affiliates that also filed separate Chapter 11 petitions include: SunCal Beaumont Heights, LLC; SunCal Johannson Ranch, LLC; SunCal Summit Valley, LLC; SunCal Emerald Meadows LLC; SunCal Bickford Ranch, LLC; SunCal Communities I, LLC; SunCal Communities III, LLC; and SJD Development Corp. SunCal Companies is not in bankruptcy. Paul J. Couchot, Esq., at Winthrop Couchot P.C., represents Palmdale Hills in its restructuring effort. The Company estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LENDER PROCESSING: S&P Affirms 'BB+' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB+' corporate credit rating on Jacksonville, Fla.-based Lender Processing Services Inc. The outlook is negative. "We also assigned our 'BBB' issue rating with a '1' recovery rating to the company's proposed $400 million revolving credit facility, $350 million term loan A maturing 2016, and $550 million term loan B maturing 2018. The '1' recovery rating indicates our expectation that lenders would receive very high (90% to 100%) recovery in the event of a payment default," S&P said. "We also affirmed our 'BB+' issue level rating on LPS' senior unsecured notes due July 2016, and revised the recovery rating on the notes to '4' from '3', reflecting our expectation that a greater proportion of secured debt outstanding at the projected time of default would lower recovery values on the unsecured debt. The '4' recovery rating indicates our expectation that lenders would receive average (30%-50%) recovery in the event of a payment default," S&P said. "The ratings reflect our expectation that a strong market position, good cash flow characteristics, and moderate financial policies will enable LPS to maintain leverage appropriate for the rating, despite its narrow and cyclical market focus and increased regulatory and market uncertainty," said Standard & poor's credit analyst Martha Toll-Reed. With latest-12-month revenues in excess of $2.3 billion, LPS has operations in technology, data, and analytics (TD&A), mortgage- processing, and loan transaction services that include settlement and default management services. Competition is fragmented, and includes customers' in-house systems, which represents a growth opportunity as financial institutions look to outsource more functions to reduce processing costs. LPS' fair business risk reflects barriers to entry which include the investment in developing an integrated solution suite, as well as long-term contractual relationships and customer switching costs. Although TD&A accounts for about one-third of revenues, it constitutes more than half of the company's segment operating income. LOS ANGELES DODGERS: EBITDA Was Positive at $50-Mil. in 2009 ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that according to documents ordered by the bankruptcy judge to be made public, the Los Angeles Dodgers was incurring a $50 million loss before interest, taxes, depreciation and amortization in 2003 before Frank McCourt bought the team. The complete papers say that EBITDA was a positive $50 million in 2009. The papers don't give EBITDA for 2010. The complete papers say the Dodgers made more than $200 million in revenue sharing payments since Mr. McCourt became owner. According to the report, in testimony taken before the July 20 trial, the MLB witness said that the baseball commissioner "had no desire even to make a profit on the loan" the league was willing to make. When the commissioner offered to make the unsecured loan, the team said that MLB had not at that time made arrangements to obtain the needed $150 million. The team said it was precluded from taking testimony from the MLB's witness about the reason the baseball commissioner opposed a long-term television-rights contract as the means for solving financial problems. Mr. Rochelle relates that the unredacted papers explain how the team unsuccessfully sought financing from six other lenders, including Goldman Sachs Group Inc., Bank of America NA, and General Electric Capital Corp. When the Dodgers filed papers asking permission for portions of the papers to be kept secret, the sealing motion itself had blanks where explanation may have been given about the need for secrecy. The bankruptcy judge, in a written opinion on July 22, refused to allow the Dodgers to take down a $150 million secured loan from Highbridge Principal Strategies LLC, an affiliate of JPMorgan Chase & Co. Instead, the judge in substance directed the team to take the same amount in an unsecured loan from MLB. About the Los Angeles Dodgers Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a professional Major League Baseball club in the Los Angeles metropolitan area. Frank McCourt, a Boston real-estate developer who unsuccessfully bid for the Boston Red Sox, bought the Dodgers from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for $330 million. Mr. McCourt also bought the Dodgers Stadium from Fox for $100 million. Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB Commissioner Bud Selig rejected a television deal with News Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for June 30 and July 1. Fox Sports has exclusive cable television rights for Dodgers games until the end of 2013 baseball season. Chapter 11 filings were also made for LA Real Estate LLC, an affiliated entity which owns Dodger Stadium, and three other related holding companies. The petition estimates assets of up to $500 million and debts of up to $1 billion. According to Forbes, the team is worth about $800 million, making it the third most valuable baseball team after the New York Yankees and the Boston Red Sox. Judge Kevin Gross presides over the case. Lawyers at Young, Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Thomas Lauria, Esq., at White & Case, represents MLB. Attorneys at Morrison & Foerster LLP and Pinckney, Harris & Weidinger, LLC, serve as counsel to the Official Committee of Unsecured Creditors. The LA Dodgers is the 12th sports team in North America to have sought bankruptcy protection, according to The Wall Street Journal. LOYALTY REWARDS: Involuntary Chapter 11 Case Summary ---------------------------------------------------- Alleged Debtor: Loyalty Rewards LLC 2321 E. 4th Street, Suite C-211 Santa Ana, CA 92705 Bankruptcy Case No.: 11-20418 Involuntary Chapter 11 Petition Date: July 26, 2011 Court: U.S. Bankruptcy Court Central District of California (Santa Ana) Judge: Theodor Albert Creditor who signed the Chapter 11 petition: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Timothy Andres Unpaid Fee $16,000 1119 S. Mission Road, #102 Fallbrook, CA 92028 MARIKA TOLZ: Federal Prosecutors Seek Long Sentence in Fraud Case ----------------------------------------------------------------- Ian Thoms at Bankruptcy Law360 reports that federal prosecutors urged a court Monday to send longtime Florida bankruptcy trustee Marika Tolz to prison for more than 15 years for misappropriating more than $16 million from cases she oversaw and losing - or possibly pocketing - at least $2.4 million. Law360 relates that prosecutors said Ms. Tolz, who pled guilty May 5 to one count of conspiracy to commit wire fraud, did not deserve leniency based on her age, 65, or her dependence on prescription drugs and alcohol. MEDICAL SPA: Physicians, Examiners Face Suit Over Financial Woes ---------------------------------------------------------------- Steve Green at Vegas Inc. reports that Medical Spa At Summerlin is suing a local physician and the State Board of Medical Examiners, charging they're in part responsible for its financial problems. According to the report, the clinic complained in its filing Monday that Donald Andreas, an investigator for the Board of Medical Examiners, which regulates medical professionals, induced Dr. Carl Williams to sever his business partnership with the spa. Dr. Williams says in court papers he also has been leasing space to the spa. Mr. Green says this effort by Andreas allegedly came after the Board of Medical Examiners investigated patient complaints about allegedly botched Botox and Derma Filler treatments at the spa. The complaint says these alleged actions are threatening what could be a lucrative business providing services such as Botox and laser skin treatments. Dr. Williams, in the meantime, won an order in the bankruptcy case on July 7 requiring the spa to pay him $55,467 for rent due through June for the spa's premises on Rampart Boulevard. Additionally, the complaint also says that Tracy Hurst, who controls the spa, has complained to the state medical board "about undue influence being asserted upon the Medical Spa's physicians, as many of the said physicians expressed concerns about continuing to work with a company that the Medical Board apparently wanted shut down." Creditors have filed $1.774 million in claims against the spa, which listed assets of just over $58,000 in an updated filing in February. Medical Spa LLC dba The Medical Spa At Summerlin operates a cosmetic procedure clinic. The Debtor filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-31638) on Nov. 16, 2010. The Debtor estimated under $1 million in assets and liabilities. See http://bankrupt.com/misc/nvb10-31638.pdf MERIT GROUP: Court Approves Morgan Joseph as Investment Banker -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Dakota authorized The Merit Group Inc. and its debtor-affiliates to employ Morgan Joseph TriArtisan LLC as investment banker to familiarize itself with the business, operations, financial condition and prospect of the Debtors. The Debtors agreed to pay $50,000 monthly fee to the firm for this engagement. The Debtors assured the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Merit Group Based in Spartanburg, South Carolina, The Merit Group Inc., formerly Lancaster Distributing Company, serves as one of the leading paint sundries distributors in the United States. Its markets also include Mexico, the Caribbean Islands, Central America and South America. Merit Group filed for Chapter 11 bankruptcy protection (Bankr. D. S.C. Lead Case No. 11-03216) on May 17, 2011. Judge Helen E. Burris presides over the case. Michael M. Beal, Esq., McNair Law Firm PA, represents the Debtors. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent; and Morgan Joseph TriArtisan LLC, investment banker, and Alvarez & Marsal North America, LLC, as financial advisors. Merit Group disclosed 7,004,048 in assets and $66,609,946 in liabilities as of the Chapter 11 filing. DIP Lender Regions Bank is represented by lawyers at Nexsen Pruet Jacobs & Pollard and Parker, Hudson, Rainer & Dobbs, LLP. The U.S. Trustee has named seven members to the Official Committee of Unsecured Creditors. The Committee is represented by Cole, Schotz, Meisel, Forman & Leonard, P.A. The Committee tapped McCarthy Law Firm LLC as co-counsel, J.H. Cohn LLP as its financial advisor. MERIT GROUP: Sells Business for $44-Mil. to Fund Plan ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that The Merit Group Inc. was authorized this week by the bankruptcy judge in Spartanburg, South Carolina, to sell its paint distribution business for $44 million to MG Distribution LLC. Mr. Rochelle relates that the sale was accompanied by a settlement where the secured lender, Regions Bank, agreed to set aside more than $6 million from the purchase price to pay costs of the Chapter 11 case and $4 million for unsecured creditors. On account of its deficiency claim, the bank will not participate in the pool for unsecured creditors until the nonbank creditors have recovered 10 percent. The bank will take the next $1.6 million before any distributions could be made on subordinated claims. Before the settlement, the official unsecured creditors' committee was opposing the sale. There were no competing bids at auction. According to Mr. Rochelle, the settlement contemplates that the company and the committee together will propose a liquidating Chapter 11 plan. The plan already filed will be revised to reflect the settlement and the sale. About Merit Group Based in Spartanburg, South Carolina, The Merit Group Inc., formerly Lancaster Distributing Company, serves as one of the leading paint sundries distributors in the United States. Its markets also include Mexico, the Caribbean Islands, Central America and South America. Merit Group filed for Chapter 11 bankruptcy protection (Bankr. D. S.C. Lead Case No. 11-03216) on May 17, 2011. Judge Helen E. Burris presides over the case. Michael M. Beal, Esq., McNair Law Firm PA, represents the Debtors. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent; and Morgan Joseph TriArtisan LLC, investment banker, and Alvarez & Marsal North America, LLC, as financial advisors. Merit Group disclosed 7,004,048 in assets and $66,609,946 in liabilities as of the Chapter 11 filing. DIP Lender Regions Bank is represented by lawyers at Nexsen Pruet Jacobs & Pollard and Parker, Hudson, Rainer & Dobbs, LLP. The U.S. Trustee has named seven members to the Official Committee of Unsecured Creditors. The Committee is represented by Cole, Schotz, Meisel, Forman & Leonard, P.A. The Committee tapped McCarthy Law Firm LLC as co-counsel, J.H. Cohn LLP as its financial advisor. MTR GAMING: Moody's Assigns 'B3' to Senior Secured Notes -------------------------------------------------------- Moody's Investors Service assigned a B3 rating to MTR Gaming Group's proposed $565 million senior secured notes due 2019, while affirming its existing ratings including the B3 Corporate Family Rating (CFR) and Probability of Default Rating (PDR). The rating outlook remains negative. The company intends to apply the net proceeds, together with cash on hand, to purchase all of its outstanding senior subordinated notes due 2012 and senior secured notes due 2014, to establish a video lottery terminal (VLT) gaming facility at its Scioto Downs in Ohio and to pay fees and expenses related to the transaction. The company also anticipates to enter into a new revolving credit facility of $20 million (will not be rated) in the very near term. The rating of the new notes is subject to Moody's review of final terms and conditions. The rating action is: Rating assigned: $565 million 2nd lien senior secured notes due 2019 -- B3 (LGD4, 51%) Ratings affirmed: Corporate Family Rating -- B3 Probability of Default Rating -- B3 $260 million Senior Secured Notes due 2014 -- B2 (LGD3, 35%), rating will be withdrawn upon closing $125 million Senior Subordinated Notes due 2012 -- Caa2 (LGD5, 87%), rating will be withdrawn upon closing RATINGS RATIONALE "The affirmation of the B3 CFR reflects Moody's generally neutral view on the newly proposed upsized note offering that would replace the previously proposed (later canceled) $500 million notes," explained Moody's lead analyst, John Zhao. "This would remove the need to obtain further equipment financing to fund the VLT facility, however, would also result in higher interest expense and leverage." The B3 CFR continues to reflect the near-to-medium term challenges MTR will likely face when the new casinos in Ohio, particularly the ones in Cleveland and Columbus (and possibly Youngstown if one VLT operator will relocate), are expected open in the next 12-24 months, as both of MTR's properties in West Virginia and western Pennsylvania draw a significant percentage of its patrons from Ohio (76% for Mountaineer's and 44% of Presque Isle Downs' slot players are Ohio residents). Moody's acknowledges that the proposed installation VLTs at MTR's Scioto Downs racetrack in Ohio could mitigate some of the negative impact. However, the installation of VLTs will also allow substantially more direct competition assuming all or some of the other six racetracks will do the same. This would add up to 17,500 new VLT slot machines into the Ohio gaming market. Further, it remains uncertain if the company can obtain license, complete the construction, or compete effectively with many other casinos in the surrounding area in a new market, particularly the to-be-built large full-scale casino in Columbus, OH. The B3 rating also considers the high pro-forma financial leverage of more than 7.0x and weak interest coverage post refinancing. Albeit, if the company is able to start the VLT operation in Ohio on time and on budget, Moody's expects the leverage to decline gradually over the next 12-18 months to below 6.5 times, a level more consistent with a B3 rating. Positive consideration is given to the relatively stable EBITDA despite the topline pressure, in part due to the implementation of cost containment programs as well as the increased contribution from Presque Isle Downs & Casino after its timely opening of table games in July 2010. Additionally, a successful refinancing will address the upcoming maturity of the subordinated notes in 2012, thus improving the company's liquidity profile. The negative rating outlook incorporates the significant execution risks associated with the VLT facility as well as the difficult operating environment MTR is faced with - increased regional competition and the still weak gaming demand. The outlook also reflects the weakened cash flow generation partly due to the higher cash interest. The negative outlook suggests the possibility of rating downgrade if Moody's deems that MTR will not be able to mitigate the expected decline in EBITDA (in the range between 40-50% on cumulative basis during 2012-2013 estimated by Moody's) because of the increased Ohio-based competition and reduce its leverage to the targeted level in the next 12-18 months. Events/developments that could exert downgrade pressure on the rating include: the company's inability to get regulatory approval and licensing on the VLT, unfavorable revenue sharing agreement with local Horseman Association, significant project delay and cost overrun during construction, and materially weaker-than- expected operating results after opening. Ratings could be also downgraded if MTR is not able to complete the proposed refinancing on economical terms timely. Rating upside is limited at this time. Should MTR complete refinancing on a timely basis, open Scioto Downs VLT facility on- time and on budget and generate EBITDA that can more than offset potential impact from Ohio new gaming operations, the rating outlook would likely revert to stable. Moreover, stable outlook would require debt/EBITDA to approach 6.0x on a sustained basis and an adequate liquidity profile. MTR Gaming Group, Inc. ("MTR") (Nasdaq: MNTG), through its subsidiaries, owns and operates Mountaineer Casino, Racetrack & Resort in Chester, West Virginia; Presque Isle Downs & Casino in Erie, Pennsylvania and Scioto Downs in Columbus, Ohio. MTR reported net revenues of approximately $424 million in the last twelve months ended March 31, 2011. The principal methodology used in rating MTR was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. NELSON RE: Moody's Affirms Catastrophe Bonds Ratings at Ca(sf) -------------------------------------------------------------- Moody's Investors Service has affirmed the Ca(sf) rating of the Nelson Re Ltd. Class G catastrophe bonds with a developing outlook. On July 15, 2011, Glacier Reinsurance AG, the sponsor of Nelson Re, submitted a proof of loss and reduced interest event certificate to Nelson Re, having estimated the ultimate net loss from Hurricane Ike to be $174,566,072. The implied recovery rate on the principal is approximately 60.6%. "We left the rating and outlook on the Nelson Re Class G notes unchanged because the latest loss estimate suggests a principal recovery rate that is consistent with Moody's original assumptions when Moody's downgraded the notes on November 24, 2009," said Kevin Lee, senior credit officer at Moody's. Moody's noted previously it had assumed less than 60% recovery of promised principal and interest. The developing outlook reflects the possibility that ultimate recoveries could be better or worse than current estimates, as ultimate net loss estimates could change over time. Glacier Re's current estimate of ultimate net loss falls between the $145 million attachment point and $220 million exhaustion point for the Class G notes, which had original principal of $67.5 million. A coinsurance provision requires Glacier Re to retain 10% of the losses between the attachment and exhaustion points. Nelson Re issued the Class G, H and I notes in June 2008 as a way for note holders to provide per occurrence excess-of-loss reinsurance protection to Glacier Re for U.S. hurricane/earthquake events (Class G) and European windstorm events (Class H and I). The Class H and Class I notes matured on June 6, 2011 without loss. These notes have been affirmed with a developing outlook: Nelson Re Ltd. -- $67.5 million Class G Series 2008-I Principal- at-Risk Variable Rate Notes at Ca(sf); outlook developing The last rating action occurred on September 1, 2010 when Moody's affirmed the rating and outlook of the Class G notes. Moody's noted this rating was previously withdrawn on June 6, 2011 due to an internal administrative error. Nelson Re Ltd.'s Class G was originally issued with the maturity date of June 6, 2011. The debt's maturity date was later extended. At that time, Moody's database was not updated to reflect the new maturity date and the ratings were inadvertently withdrawn on the basis that it had matured. Moody's has now corrected the maturity date on the Class G notes. The principal methodology used in rating Nelson Re was "Reinsurance Sidecars: Moody's Five Principles," published in March 2007. 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. NLC UNITRUST: Court Approves Ciardi Ciardi as Counsel ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized N.L.C. Unitrust Partners to employ Ciardi Ciardi & Astin as its counsel nunc pro tunc to Jan. 31, 2011. As the Debtor's counsel, Ciardi will: (a) take all necessary action to protect and preserve the estate of the Debtor, including the prosecution of actions on the Debtor's behalf, the defense of any actions commenced against the Debtor, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtor's estate; (b) provide legal advice with respect to the Debtor's powers and duties as debtor-in-possession in the continued operation of its businesses and management of its properties; (c) negotiate, prepare and pursue confirmation of a plan and approval of a disclosure statement; (d) prepare on behalf of the Debtor, as debtor in possession, necessary motions, applications, answers, orders, reports, and other legal papers in connection with the administration of the Debtor's estate; (e) appear in Court and to protect the interest of the Debtor before the Court; (f) assist with any disposition of the Debtor's assets, by sale or otherwise; and (g) perform all other legal services in connection with this Chapter 11 case as may reasonably be required. Ciardi's hourly rates range from $225 to $525 per hour for attorneys and from $120 to S180 per hour for paraprofessionals. The Debtor will also reimburse Ciardi for expenses it incurred or will incur. Albert A. Ciardi, III, Esq., a partner at Ciardi -- aciardi@ciardilaw.com -- maintained that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Sedona, Arizona-based N.L.C. Unitrust Partners filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-14074) on Dec. 15, 2010. The Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million at the Petition Date. Ciardi Ciardi & Astin is retained as counsel to the Debtor. NORTHERN BERKSHIRE: Denied CAH Status, But Still Seen to Emerge --------------------------------------------------------------- According to a Berkshire Eagle report, North Adams (Mass.) Regional Hospital was denied designation as a critical access hospital but is still largely expected to emerge from Chapter 11 bankruptcy protection. Jaimie Oh at Becker's Hospital Review reports that the federal government ruled NARM and the next closest hospital was not at least 25 miles apart, per federal regulation, and therefore was not qualified for CAH status. However, NARH President and CEO William Frado confirmed the hospital will most likely become a "stand-alone viable hospital" even without the CAH designation, according to the news report. Hospital officials plan to submit a plan for reorganization to the bankruptcy court in August. About Northern Berkshire Healthcare Northern Berkshire Healthcare, Inc. is a non-profit healthcare corporation in northern Berkshire County, Massachusetts. Together with its affiliates, Northern Berkshire Healthcare operates the North Adams Regional Hospital and a visiting nurse association and hospice in North Adams, Massachusetts. Northern Berkshire Healthcare, Inc., North Adams Regional Hospital, Inc., Visiting Nurse Association & Hospice of Northern Berkshire, Inc., Northern Berkshire Healthcare Physicians Group, Inc., and Northern Berkshire Realty, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Mass. Case No. 11-31114) on June 13, 2011, to address their overleveraged balance sheet and effect a reorganization of their operations. On the same day, Northern Berkshire Community Services, Inc., filed a petition for Chapter 7 relief also in the District of Massachusetts bankruptcy court. Judge Henry J. Boroff presides over the Debtors' cases. James Addison Wright, III, Esq., and Steven T. Hoort, Esq., at Ropes & Gray LLP, serve as the Debtors' bankruptcy counsel. The Debtors' Financial Advisors are Carl Marks Advisory Group LLC. GCG Inc. serves as claims and noticing agent. Northern Berkshire disclosed $22,957,933 in assets and $53,379,652 in liabilities as of the Chapter 11 filing. The petition was signed by William F. Frado, Jr., president. William K. Harrington, the U.S. Trustee for Region 1, appointed five members to the official unsecured creditors' committee in the Debtors' cases. The Committee tapped Duane Morris LLP as its counsel. NURSERYMEN'S EXCHANGE: Can Hire Calegari & Morris as Accountants ---------------------------------------------------------------- The Hon. Dennis Montali of the U.S. Bankruptcy Court for the Northern District of California authorized Nurserymen's Exchange, Inc., to employ Calegari & Morris as its accountants. As reported in the Troubled Company Reporter on June 9, 2011, the Debtor needs an accountant to file tax returns and other tax related documents during the pendency of its case. Calegari has rendered tax services to the Debtor since 1999. The individuals at Calegari most likely to work on behalf of the Debtor and their related hourly billing rates are: George Morris $375 Kathleen Burry $310 Alyson Minagawa $230 Patty Trick $230 The Debtor provided Calegari with a $70,000 prepetition retainer to be billed against for the work done on the Chapter 11 case. Calegari's George Morris -- gmorris@calegariandmorris.com -- attested that his firm does not represent any interest adverse to that of the Debtor or of the estate. About Nurserymen's Exchange Founded in 1941 as a San Francisco bulb brokerage business, and currently based in Half Moon Bay in the San Francisco Bay Area, Nurserymen's Exchange Inc. is a producer, broker and wholesaler of home decor products incorporating indoor blooming plants, specialty foliage, holiday grow kits, and potted edibles. Nurserymen's Exchange filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 11-31985) in San Francisco, California, on May 23, 2011. The Debtor disclosed $34,755,036 in assets and $24,772,945 in liabilities in its schedules. Stephen D. Finestone, Esq., in San Francisco, serves as counsel to the Debtor. Omni Management Group, LLC, is the claims and notice agent. C&A, Inc., serves as financial advisor. Katten Muchin & Rosenmann, LLP, serves as the Debtor's special counsel. Chelliah & Associates as its restructuring and turnaround consultants and advisors. FocalPoint Securities, LLC, is the investment banker and financial advisor. Calegari & Morri is the accountant. The Abernathy MacGregor Group, Inc., is the corporate communications consultant. An official committee of unsecured creditors has been appointed in the case. The panel has tapped lawyers at Landau Gottfried & Berger LLP as counsel. Epiq Bankruptcy Solutions is the information agent. FTI Consulting is the Committee's financial consultant. NURSERYMEN'S EXCHANGE: FocalPoint Approved as Investment Banker --------------------------------------------------------------- The Hon. Dennis Montali of the U.S. Bankruptcy Court for the Northern District of California authorized Nurserymen's Exchange, Inc., to employ FocalPoint Securities, LLC, as investment banker and financial advisor. As reported in the Troubled Company Reporter on June 9, 2011, the Debtor said it requires FocalPoint to continue its significant prepetition efforts to maximize the value of the Debtor's operating assets through a sale or restructuring transaction and to provide financial advisory services. Among other things, FocalPoint is expected to: -- review, analyze and evaluate the Company's operations, business, business plan, strategic and financial position, and related financial projections; -- prepare and distribute descriptive materials to potential financing sources, buyers, investors or other interested parties for evaluation of a Transaction, and assist in negotiating and structuring a potential Transaction with such parties; -- assist the Company in soliciting bids from potential lenders, acquirers and/or investors; -- assist the Company in reviewing proposals in connection with a Transaction; -- make presentations to the Company's Management and/or Board of Directors to enable them to evaluate any potential Transaction; -- at the request of the Company, provide information to the Company's senior secured lender with respect to activities in connection with the engagement; -- assist the Company with any due diligence investigations conducted in connection with a Transaction; -- make presentations to its senior secured lender, creditor groups, and equity holders as directed by the Company's Management and/or Board of Directors related to a Transaction and related processes; -- provide expert advice and testimony with regard to financial matters related to a Transaction; and, -- with mutual consent, render other customary financial advisory and investment banking services. Beginning in September 2010, the Debtor and FocalPoint commenced a two-part solicitation process designed to either (i) refinance the existing secured lender or (ii) find a financial or strategic buyer for the Debtor's operating business. On a parallel track to the process undertaken by FocalPoint, the Debtor has marketed certain real estate assets that are not essential to its operations. As part of this prepetition process, FocalPoint has contacted (or been contacted by) in excess of 150 potential interested parties, including both debt capital providers and strategic and financial buyers. Of these, approximately 48 have executed non-disclosure agreements for additional information and access to the Debtor's data room. As a result of this process, the Debtor received a number of written proposals to provide working capital financing from financial institutions but these proposals did not provide enough capital to fully retire the secured debt or were contingent on new equity being invested into the business. In addition to the proposals from lenders, the Debtor received several indications of interest to consummate a purchase of the Debtor's assets. After evaluating these proposals, holding management presentations, meeting with the various investor groups and consulting with Wells Fargo Bank, the Debtor executed a Letter of Intent with a buyer that provided for a period of exclusivity, and the Debtor began engaging in extensive business and legal due diligence. Unfortunately, the Debtor was not able to finalize an asset purchase agreement with the interested party prior to filing the bankruptcy and exclusivity was terminated on or about May 11, 2011. Upon termination of exclusivity, FocalPoint immediately began re-marketing the Operating Assets and have begun conducting discussions with potential strategic and financial investors since that time. In addition to the prepetition solicitation process, FocalPoint has provided significant additional services and value to the Debtor prior to the Petition Date. This included, but was not limited to, negotiating with potential investors and facilitating their due diligence, advising the Debtor with respect to and negotiating both forbearance agreements and the DIP Financing with the Wells Fargo Bank, assisting the Debtor with pre-bankruptcy planning, structuring and developing sale procedures and the accompanying Asset Purchase Agreement, all as part of its engagement by the Debtor. FocalPoint received $315,000 prepetition from the Debtor. The Debtor said 50% of the amount will be credited against any Transaction Fee payable to FocalPoint pursuant to the terms of FocalPoint's proposed employment. Prior to the Petition Date, FocalPoint received a $70,000 Fee Retainer, representing two monthly installments of $35,000 and an out of pocket expense retainer of $10,000. The Debtor will compensate FocalPoint according to this structure: (A) A monthly retainer fee of $35,000 earned and payable on the 1st day of each month and 50% of which (together with 50% of all monthly fees collected by FocalPoint during its pre- petition employment by the Debtor) will be credited against any Sale Fee, Financing Fee or Restructuring Fee or fees payable to FocalPoint. FocalPoint received the monthly retainer fee for May 2011 and therefore another monthly fee will not be earned and payable until June 1, 2011. (B) Upon the consummation of a Sale Transaction, FocalPoint will be entitled to receive a sale fee equal to the greater of (i) 2.5% of the Aggregate Consideration, which includes cash, securities, assumption of debt, cure costs and other consideration paid or obligations assumed by a purchaser in a Sale Transaction; and (ii) $550,000. (C) If the Debtor enters into exit financing in connection with a Plan Transaction, FocalPoint will be entitled to receive a financing fee equal to the greater of 4.5% of funded or committed capital and (y) $550,000. (D) If the Debtor confirms and effectuates a Restructuring, FocalPoint will be entitled to a Restructuring Fee, which is the greater of (i) $550,000 or (ii) 2.5% of Aggregate Consideration minus the amount of any Sale Fee or Financing Fee paid to FocalPoint. (E) In the event that a Transaction could be characterized as more than one type of Transaction, the fee earned by FocalPoint shall be the greater of the Sale Fee, the Financing Fee or the Restructuring Fee. Under no circumstances will multiple fees be paid on a single Chapter 11 Transaction. The Transaction Fees will be payable to FocalPoint upon the closing of a Transaction. (F) Without regard to whether any Transaction closes, FocalPoint will be entitled to reimbursement of all necessary, documented, reasonable out-of-pocket expenses incurred during this engagement. (G) If FocalPoint's engagement is terminated pursuant to the terms of the Engagement Letter, the material compensation provisions of the Engagement Letter will survive to the extent the provisions related to the payment of fees due and expenses incurred on or before the effective date of termination. Other provisions of the Engagement Letter will also survive termination. Additionally, if the Engagement Letter is terminated by the Company, FocalPoint shall be entitled to any Sale Fee, Financing Fee or Restructuring Fee if a Transaction is either entered into, agreed to or consummated within the later of 12 months of the date of termination or 12 months from the date an agreement for a Transaction is entered into amongst the relevant parties. Alexander Stevenson -- astevenson@focalpointllc.com -- Managing Director at FocalPoint, attests that his firm is a "disinterested person" as that term is defined in sections 101(14) and 327 of the Bankruptcy Code, and does not hold or represent an interest adverse to the Estates and does not have any connection with the Debtors, the creditors, or any other party in interest in the Chapter 11 Cases, or their attorneys or accountants. About Nurserymen's Exchange Founded in 1941 as a San Francisco bulb brokerage business, and currently based in Half Moon Bay in the San Francisco Bay Area, Nurserymen's Exchange Inc. is a producer, broker and wholesaler of home decor products incorporating indoor blooming plants, specialty foliage, holiday grow kits, and potted edibles. Nurserymen's Exchange filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 11-31985) in San Francisco, California, on May 23, 2011. The Debtor disclosed $34,755,036 in assets and $24,772,945 in liabilities in its schedules. Stephen D. Finestone, Esq., in San Francisco, serves as counsel to the Debtor. Omni Management Group, LLC, is the claims and notice agent. C&A, Inc., serves as financial advisor. Katten Muchin & Rosenmann, LLP, serves as the Debtor's special counsel. Chelliah & Associates as its restructuring and turnaround consultants and advisors. FocalPoint Securities, LLC, is the investment banker and financial advisor. Calegari & Morri is the accountant. The Abernathy MacGregor Group, Inc., is the corporate communications consultant. An official committee of unsecured creditors has been appointed in the case. The panel has tapped lawyers at Landau Gottfried & Berger LLP as counsel. Epiq Bankruptcy Solutions is the information agent. NURSERYMEN'S EXCHANGE: Taps Scheel Dallape as Real Estate Broker ---------------------------------------------------------------- The Hon. Dennis Montali of the U.S. Bankruptcy Court for the Northern District of California authorized Nurserymen's Exchange, Inc., to employ The Scheel Dallape, Inc., doing business as, the Hoffman Company as its real estate broker with respect to its real property located in Half Moon Bay, California. The real property is divided up into various parcels and is also zoned differently. There are two components of the real property: the Planned Unit Development Land and the Open Space Land. The PUD Land consists of approximately 28.158 acres while the Open Space totals approximately 408 acres. The broker has been representing the Debtor prepetition. The broker is also familiar with the parties who have expressed interest in buying to date and, with the broker's efforts, Debtor is currently in contract to sell the PUD Land for $8 million. The broker is to be paid for its services pursuant to a listing agreement (2% commission unless the buyer is introduced by Debtor's investment bankers, FocalPoint Securities, in which case the commission is 1%). To the best of the Debtor's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm's business offices are located a 18881 Von Karman Ave, Suite 150, Irvine, California. About Nurserymen's Exchange Founded in 1941 as a San Francisco bulb brokerage business, and currently based in Half Moon Bay in the San Francisco Bay Area, Nurserymen's Exchange Inc. is a producer, broker and wholesaler of home decor products incorporating indoor blooming plants, specialty foliage, holiday grow kits, and potted edibles. Nurserymen's Exchange filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 11-31985) in San Francisco, California, on May 23, 2011. The Debtor disclosed $34,755,036 in assets and $24,772,945 in liabilities in its schedules. Stephen D. Finestone, Esq., in San Francisco, serves as counsel to the Debtor. Omni Management Group, LLC, is the claims and notice agent. C&A, Inc., serves as financial advisor. Katten Muchin & Rosenmann, LLP, serves as the Debtor's special counsel. Chelliah & Associates as its restructuring and turnaround consultants and advisors. FocalPoint Securities, LLC, is the investment banker and financial advisor. Calegari & Morri is the accountant. The Abernathy MacGregor Group, Inc., is the corporate communications consultant. An official committee of unsecured creditors has been appointed in the case. The panel has tapped lawyers at Landau Gottfried & Berger LLP as counsel. Epiq Bankruptcy Solutions is the information agent. NURSERYMEN'S EXCHANGE: Chelliah OK'd as Turnaround Consultants -------------------------------------------------------------- The Hon. Dennis Montali of the U.S. Bankruptcy Court for the Northern District of California authorized Nurserymen's Exchange, Inc, to employ Chelliah & Associates as its restructuring and turnaround consultants and advisors. As reported in the Troubled Company Reporter on June 10, 2011, C&A was initially employed as restructuring and turnaround consultants by the Debtor in November 2006, and has worked with Debtor intermittently since that time to assist in the restructuring and improvement of its management team, organizational structure, operations, sales and marketing, crop selection and planning, fiscal and budgeting control, forward planning discipline and its efforts overall to greatly reduce costs and improve profitability. For its prepetition work, all C&A personnel other than Chell Chelliah were paid on an hourly basis. Mr. Chelliah entered into a separate annual retention agreement in 2008 -- in addition to the hourly basis arrangement -- for the provision of 90 hours a month at favorable rates with a portion of these fees deferred contingent to certain milestones being achieved at which time they were realizable at a 100% premium. In addition, in recognition of the favorable rates, significant unbilled hours contributed and numerous other accommodations made by Mr. Chelliah during the three year period to Dec. 31, 2010, in assisting with the restructuring and turnaround of the Debtor, the Owners, CEO and the board of directors of the Debtor granted fully vested phantom equity interests of 3% of the total equity capital of Nurserymen's Exchange, Inc.. As of the Petition Date, C&A had formally relinquished it's rights to any and all contingent fees of $825,600 and fully vested phantom equity interests of 3% and holds no pre-petition claim against the Debtor. C&A and Mr. Chelliah's efforts over the last few years were highly instrumental in achieving profitability of the Debtor for the current fiscal year. Prior to the filing of Debtor's bankruptcy case, C&A received a prepetition retainer of $100,000 from the Debtor. C&A will bill its services under these rates -- Standard hourly rates for professionals presently range from $150 for associates to $500 for 2011. The current hourly rates for C&A staff who will most likely work on this matter are: Chell Chelliah -- $450 per hour for preparatory time and $500 per hour for deposition and/or trial testimony. Alan Okahata -- $260 per hour for preparatory time and $310 per hour for deposition and/or trial testimony. Chell Chelliah attested that his firm C&A is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Nurserymen's Exchange Founded in 1941 as a San Francisco bulb brokerage business, and currently based in Half Moon Bay in the San Francisco Bay Area, Nurserymen's Exchange Inc. is a producer, broker and wholesaler of home decor products incorporating indoor blooming plants, specialty foliage, holiday grow kits, and potted edibles. Nurserymen's Exchange filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 11-31985) in San Francisco, California, on May 23, 2011. The Debtor disclosed $34,755,036 in assets and $24,772,945 in liabilities in its schedules. Stephen D. Finestone, Esq., in San Francisco, serves as counsel to the Debtor. Omni Management Group, LLC, is the claims and notice agent. C&A, Inc., serves as financial advisor. Katten Muchin & Rosenmann, LLP, serves as the Debtor's special counsel. Chelliah & Associates as its restructuring and turnaround consultants and advisors. FocalPoint Securities, LLC, is the investment banker and financial advisor. Calegari & Morri is the accountant. The Abernathy MacGregor Group, Inc., is the corporate communications consultant. An official committee of unsecured creditors has been appointed in the case. The panel has tapped lawyers at Landau Gottfried & Berger LLP as counsel. Epiq Bankruptcy Solutions is the information agent. NURSERYMEN'S EXCHANGE: Committee Taps FTI as Consultant ------------------------------------------------------- The Official Committee of Unsecured Creditors of Nurserymen's Exchange Inc. received permission from the U.S. Bankruptcy Court for the Northern District California to retain FTI Consulting Inc. as financial consultants. The firm will: * assist with the assessment and monitoring of the Debtor's short term cash flow, liquidity, and operating results; * assist in the review of financial information distributed by the Debtor to creditors and others, including, but not limited to, cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is sought; * assist in the review and monitoring of the capital raise/asset sale process, including, but not limited to, an assessment of the adequacy of the marketing process, completeness of any buyer lists, review and quantifications of any bids; * assist in the review of any disclosure statement, plan of reorganization and supporting documents and exhibits related thereto; * attend meetings and assist in discussions with the Debtor, potential investors, the Committee, the U.S. Trustee, other parties in interest and professionals hired by the same, as requested; * provide analysis and testimony on valuation issues related to the confirmation of a plan of reorganization; * assist the Committee in the review of financial related disclosures required by the Court, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs and Monthly Operating Reports; * assist in the review of the claims reconciliation and estimation process; and * render such other general business consulting or such other assistance as the Committee or its counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in this proceeding. These are FTI's customary hourly rates, as of Jan. 1, 2011, which are subject to periodic adjustments, for work of this nature: Senior Managing Directors $780-$895 Directors/Managing Directors $560-$745 Consultants/Senior Consultants $280-$530 Administration/Paraprofessionals $115-$230 The Committee assures the Court that the firm is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code. About Nurserymen's Exchange Founded in 1941 as a San Francisco bulb brokerage business, and currently based in Half Moon Bay in the San Francisco Bay Area, Nurserymen's Exchange Inc. is a producer, broker and wholesaler of home decor products incorporating indoor blooming plants, specialty foliage, holiday grow kits, and potted edibles. Nurserymen's Exchange filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 11-31985) in San Francisco, California, on May 23, 2011. The Debtor disclosed $34,755,036 in assets and $24,772,945 in liabilities in its schedules. Stephen D. Finestone, Esq., in San Francisco, serves as counsel to the Debtor. Omni Management Group, LLC, is the claims and notice agent. C&A, Inc., serves as financial advisor. Katten Muchin & Rosenmann, LLP, serves as the Debtor's special counsel. Chelliah & Associates as its restructuring and turnaround consultants and advisors. FocalPoint Securities, LLC, is the investment banker and financial advisor. Calegari & Morri is the accountant. The Abernathy MacGregor Group, Inc., is the corporate communications consultant. An official committee of unsecured creditors has been appointed in the case. The panel has tapped lawyers at Landau Gottfried & Berger LLP as counsel. Epiq Bankruptcy Solutions is the information agent. NURSERYMEN'S EXCHANGE: Landau Gottfrie Approved as Panel's Counsel ------------------------------------------------------------------ The Hon. Dennis Montali of the U.S. Bankruptcy Court for the Northern District of California authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of Nurserymen's Exchange, Inc., to retain Landau Gottfried & Berger LLP as its general bankruptcy counsel. LGB is expected to, among other things: a) advise the Committee with respect to the various options available for resolution of the Debtor's bankruptcy case, including sale of the Debtor as an operating company, liquidation of the Debtor's assets, or reorganization of the Debtor's business; b) advise the Committee with respect to motions and applications filed by the Debtor and other parties and presenting the Committee's positions to the Court; and c) examine and advise the Committee on claims and causes of action that may belong to the estate. The personnel with primary responsibilities in the cases and their hourly rates are: Peter J. Gurfein, Esq. $550 Peter M. Bransten, Esq. $510 Monica R. Rieder, Esq. $385 Other Attorneys $420 - $535 Paraprofessionals $120 - $165 The Court directed the Debtor to pay the $50,000 postpetition retainer to LGB, to be held in LGB's client trust account until the time as LGB is authorized by the Court to draw down on the retainer. To the best of the Committee's knowledge, LGB is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. LGB can be reached at: LANDAU GOTTFRIED & BERGER LLP Peter J. Gurfein, Esq. Peter M. Bransten, Esq. Monica R. Rieder, Esq. 1801 Century Park East, Suite 1460 Los Angeles, CA 90067 Tel: (310) 557-0050 Fax: (310) 557-0056 E-mail: pgurfein@lgbfirm.com pbransten@lgbfirm.com mrieder@lgbfirm.com About Nurserymen's Exchange Founded in 1941 as a San Francisco bulb brokerage business, and currently based in Half Moon Bay in the San Francisco Bay Area, Nurserymen's Exchange Inc. is a producer, broker and wholesaler of home decor products incorporating indoor blooming plants, specialty foliage, holiday grow kits, and potted edibles. Nurserymen's Exchange filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 11-31985) in San Francisco, California, on May 23, 2011. The Debtor disclosed $34,755,036 in assets and $24,772,945 in liabilities in its schedules. Stephen D. Finestone, Esq., in San Francisco, serves as counsel to the Debtor. Omni Management Group, LLC, is the claims and notice agent. C&A, Inc., serves as financial advisor. Katten Muchin & Rosenmann, LLP, serves as the Debtor's special counsel. Chelliah & Associates as its restructuring and turnaround consultants and advisors. FocalPoint Securities, LLC, is the investment banker and financial advisor. Calegari & Morri is the accountant. The Abernathy MacGregor Group, Inc., is the corporate communications consultant. An official committee of unsecured creditors has been appointed in the case. The panel has tapped lawyers at Landau Gottfried & Berger LLP as counsel. Epiq Bankruptcy Solutions is the information agent. FTI Consulting is the Committee's financial consultant. OLD COLONY: Plans to Pay $9MM Wells Fargo Secured Claim in 7 Years ------------------------------------------------------------------ Old Colony, LLC, and Molokai Partners, LLC, filed a proposed plan of reorganization and accompanying disclosure statement to the U.S. Bankruptcy Court for the District of Massachusetts. The Plan designates four classes of claims and interests against the Debtor and provides for the treatment of those claims and interests: * Class 1 Wells Fargo's Secured Claim. Holder of such claim will receive a Wells Fargo Reorganization Note, which is a full recourse secured term promissory note in the amount of $9,000,000. It will have a seven year term with payments of interest only for the first two years. * Class 2 Wells Fargo's Unsecured Claim. Holder of such claim will receive a pro rata share of the Unsecured Claim Distribution Fund. Class 2 Claim total approximately $8,750,000. * Class 3 Unsecured Claims. Holder of those claims will receive a pro rata share of the Unsecured Claim Distribution Fund. Class 3 Claims total approximately $3,718,000. * Class 4 Interests in the Debtor. All Class 4 Interests will be deemed cancelled on the Plan Effective Date. The Unsecured Claim Distribution Fund is in the amount of $623,000. Under the Plan, Molokai or its nominee will make available to fund payments under the Plan or/and as working capital the sum of $1,000,000, of which: -- $623,000 will be used to fund the Unsecured Claim Distribution Fund; -- $150,000 will be used to fund a separate reserve fund to be used to pay Allowed Administrative Claims; -- $227,000 will be made available to the New Managing Member for working capital needs of the Reorganized Debtor including to pay Priority Tax Claims, day to day operating expenses and capital improvements to the Inn. Pursuant to the Plan, the Reorganized Debtor will amend and restate its current Amended and Restated Operating Agreement dated June 2008 as required by Molokai or its nominee in its sole discretion. From and after the Effective Date of the Plan, Molokai or its nominee will be issued and will hold all of the Membership Interests in the Reorganized Debtor. A full-text copy of the Disclosure Statement dated July 1, 2011, is available for free at http://bankrupt.com/misc/OLDCOLONY_DSJul1.PDF Deficient Filing The Clerk of the Bankruptcy Court informed the Debtor that its filing of the Disclosure Statement was deficient. Accordingly, the Debtor was required to file a motion to approve the disclosure statement. Saugus, Massachusetts-based Old Colony, LLC, dba The Inn At Jackson Hole, filed for Chapter 11 bankruptcy protection (Bankr. D. Mass. Case No. 10-21100) on Oct. 11, 2010. Donald F. Farrell, Jr., Esq., at Anderson Aquino LLP, assists the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $10 million to $50 million as of the Petition Date. OLSEN AGRICULTURAL: Court Approves Agri-Business as Broker ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon authorized Olsen Agricultural Enterprises LLC to employ Agri-Business Real Estate Services as its licensed real estate broker under an exclusive listing agreement to sell the real property and improvements located in Brownsville, Linn County, Oregon, consisting of approximately 372.4 acres and commonly known as the Koos Brownsville Farm. The Debtor proposed to engage Terry Silbernagel of Agri-Business to assist it in selling the Koos Brownsville Farm. The Debtor has selected Mr. Silbernagel of Agri-Business because he has substantial experience in the marketing and sale of agricultural properties in the Willamette Valley, explains Sanford R. Landress, Esq., at Greene & Markley, P.C., in Portland, Oregon. Agri-Business will be paid a commission equal to the lesser of (a) 5 percent of the purchase price, and (b) the amount that is the difference between (i) the proceeds from the sale of the property (net of amounts paid on account of escrow fees and other closing costs payable by the Debtor in connection therewith), and (ii) $1,500,000, payable in cash at the closing of the contemplated sale transaction. The Debtor assures the Court that Agri-Business is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code and does not represent or hold any interest adverse to the interests of the estate or of any class of creditors or equity security holders. About Olsen Agricultural Enterprises Based in Monmouth, Oregon, Olsen Agricultural Enterprises LLC operates an agricultural enterprise on roughly 7,762 acres of owned and leased land located in Benton, Linn and Polk Counties. Its business is comprised principally of three divisions: (a) Olsen Seed Company, which produces and sells a variety of grass seed and grains on 5,934 acres; (b) Olsen Agriculture, which grows and sells peppermint, nursery stock, squash, hazelnuts and blueberries on 1,334 acres; and (c) Olsen Family Vineyards, which grows a variety of grapes on 494 acres and produces and sells quality wines under the "Viridian" label as well as private labels. Olsen Agricultural Enterprises 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. David A. Foraker, Esq., at Greene & Markley, P.C., in Portland, Oregon, acts as the Debtor's bankruptcy counsel. Clyde A. Hamstreet & Associates, LLC, serves as the Debtor's restructuring consultant and financial advisor. Weatherford Thompson Cowgill Black & Schultz P.C. serves as its special counsel. Moss Adams LLP is the Debtor's tax accountants. Mary Jo Heston, Esq., at Lane Powell PC, in Seattle, Washington, represents the Official Committee of Unsecured Creditors. 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. For the fiscal year ended Dec. 31, 2010, OAC reported total revenues of $6,428,880 and a net loss of $5,791,310. At the time of the merger, on a consolidated basis, the books and records of OAC, JOLC and OVC reflected assets totaling $29.8 million and liabilities totaling $37.2 million. The fair market value of the Debtor's assets, on a going concern basis, is roughly $50 million. OLSEN AGRICULTURAL: Court Approves Green & Markley as Counsel ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon authorized Olsen Agricultural Enterprises LLC to employ Greene & Markley, P.C., as legal counsel. According to the Troubled Company Reporter on June 23, 2011, G&M rendered prepetition services to Olsen Agricultural Company, Inc., the Debtor's predecessor, beginning March 31, 2011. The Debtor will pay the firm on an hourly basis. The current hourly rates for those persons presently designated to work on the Debtor's case are: Hourly Name Status Rate ---- ------ ------ David A. Foraker Principal $450 Conde T. Cox Of Counsel Attorney $395 Sanford R. Landress Principal $305 Donald H. Grim Associate Attorney $225 Corri Larsen Legal Assistant $160 Mr. Foraker attests that G&M is a disinterested person within the meaning of section 101(14) of the Bankruptcy Code and does not represent or hold any interest adverse to the interests of the estate or of any class of creditors or equity security holders. 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. Clyde A. Hamstreet & Associates, LLC, serves as the Debtor's restructuring consultant and financial advisor. An official committee of unsecured creditors has been appointed in the case. 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. PALMDALE HILLS: Lehman Further Amends SunCal Plan ------------------------------------------------- Alfredo Perez, Esq., at Weil Gotshal & Manges LLP, in Houston, Texas, counsel to Lehman Brothers Holdings Inc., filed with the U.S. Bankruptcy Court for the Southern District of New York a supplemental declaration stating that on July 15, 2011, the Second Amended Lehman/Trustee TD Plan and the Second Amended Lehman VD Plan for the SunCal Debtors were amended. The primary changes to the Amended Lehman Plans are: (a) Reliance Claims Identified and Definition Revised. After the June 20, 2011 filings of the Lehman Plans the Official Committee of Unsecured Creditors in the SunCal Voluntary Cases objected, inter alia, that the holders of Reliance Claims should be identified, which was something that the Official Committee of Unsecured Creditors in the SunCal Involuntary Cases previously had requested, and argued that the "Reliance Claim" definition could be simplified. Because the definitional changes requested are non-substantive and clarify the pre-existing definition, they were adopted in whole and are set forth in the Third Amended Lehman Plans. Because LCPI and its co-plan proponents now have sufficiently completed a review of proofs of claim and other information to provide a "Reliance Claim" list, they have included the list; (b) Revising the Executory Contract/Unexpired Lease Treatment. The California Bankruptcy Court and two creditors raised objections regarding the delay in the Lehman Plans with respect to addressing executory contracts. The Third Amended Lehman Plans address these concerns; (c) Liquidating Trustee Identified for Plan in Voluntary Cases. The SunCal Trustee previously agreed to serve as the liquidating trustee in the SunCal Involuntary Cases and subsequently agreed to also serve as the liquidating trustee in the SunCal Voluntary Cases. The Second Amended Lehman VD Plan was accordingly amended; and (d) Clarify, Update and Clean Up. A variety of requested clarifications, fixing of typographical errors, updating of figures, and additional minor revisions were made, including: * updating cash amounts and, thus, cash secured and deficiency claim amounts for LCPI, et al.; * amending the definition of Administrative Claims to address practical concerns; * ensuring LCPI's right to withdraw from the Third Amended Lehman Plans is explicit should circumstances change unrelated to the specified monetary conditions already set forth; * shortening the time to pay certain non-priority, unsecured claims, by a few weeks; and * clarifying the language as to when objections to Reliance Claim status must be brought. Copies of the blacklined Third Amended Lehman Plans, which are marked to reflect the changes made to the Second Amended Lehman Plans are available for free at: http://bankrupt.com/misc/LBHI_3rdSunCalTDPlan_07182011.pdf http://bankrupt.com/misc/LBHI_3rdSunCalVDPlan_07182011.pdf LBHI Committee Supports Motion The Official Committee of Unsecured Creditors of appointed in the Lehman Debtors' bankruptcy cases supports the Lehman Plans. The Lehman Plans establish the best framework for preserving and maximizing the prospects of a recovery by the Debtors in the SunCal Debtors' bankruptcy cases, asserts Dennis Dunne, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, on behalf of the Lehman Creditors Committee. He explains that the Lehman Plans resolve the uncertainty attendant in litigating the adversary proceedings involving the parties, and that if the Lehman Plans are consummated, the Debtors will take title to the SunCal Properties and will be able to obtain the best recovery possible on account of their claims by either selling the SunCal Properties or pursing development plans in connection therewith. Mr. Dunne tells Judge Peck that the Lehman Creditors Committee has been working with the Debtors and their advisors since the beginning of the SunCal Debtors' Cases to address the numerous legal and business issues that have arisen therein. He notes that the Lehman Creditors Committee has considered and approved earlier versions of the Lehman Plans and has recently reaffirmed its support for the modifications proposed in the Second Amended Lehman/Trustee TD Plan and the Second Amended Lehman VD Plan. The Lehman Creditors Committee, among other things, believes that the slightly revised funding thresholds are reasonable. * * * Judge Peck authorized, but not directed, the Debtors to enter into the Third Amended Lehman Plans and consummate all of the transactions contemplated thereunder. The Debtors are also authorized, but not directed, to make all payments contemplated under the Third Amended Lehman/Trustee TD Plan, provided that if, prior to that plan's effective date, the Lehman Creditors' good faith estimate of the amount of the funding the Lehman Creditors could be required to provide exceeds $55 million, plus the amount of the administrative loans any of them made after August 10, 2010, the Debtors will consult with and obtain the consent of the Lehman Creditors Committee prior to determining whether to consummate the Third Amended Lehman/Trustee TD Plan. The Debtors are further authorized, but not directed, to make all payments contemplated under the SunCal VD Plan, provided that if, prior to that plan's effective date, either (a) the Lehman Lenders' good faith estimate of the amount of funding the Lehman Lenders could be required to provide under the plan exceeds $22 million with respect to the Group I Debtors, or (b) the Lehman Lenders' good faith estimate of "Allowed Senior Claims" exceeds $3 million with respect to the Group II Debtors, the Debtors will consult with and obtain the consent of the Lehman Creditors Committee prior to determining whether to consummate the Third Amended Lehman VD Plan. LCPI or LBHI may cash bid in the SunCal Property Auction or any market sale of the SunCal Properties, provided any cash bids are subject to the business judgment of the Debtors' Board of Directors and the consent of the Lehman Creditors Committee. LBHI may provide for the LBHI Plan Funding, provided that the allocation of costs and benefits between LBHI and LCPI in connection with the funding of the Third Amended Lehman Plans is preserved for determination at a later date. Judge Peck also ruled that any and all pre- and postpetition claims, rights and obligations that the Debtors may have against each other in connection with the subject matter of the Motion or the transactions contemplated by the Lehman Plans and the SunCal Plans are fully preserved and will not be prejudiced by the entry of this Order. The allocation of costs and benefits between or among the Debtors and non-Debtor affiliates in connection with the SunCal Plans is preserved. About SunCal Companies SunCal Companies -- http://www.suncal.com/-- has more than 250,000 residential lots and 10 million square feet of commercial space in various stages of development throughout California, Arizona, Nevada and New Mexico. Gramercy Warehouse Funding LLC and several creditors filed involuntary petitions each against LBREP/L-SunCal Master I LLC, LBREP/L-SunCal McAllister Ranch LLC, LBREP/L-SunCal McSweeny Farms LLC, and LBREP/L-SunCal Summerwind Ranch LLC on Sept. 11, 2008 (Bankr. C.D. Calif Case No. 08-15588, 08-15637, 08-15639, and 08-15640). Daniel H. Reiss, Esq., at Levene, Neale, Bender, Rankin & Brill represents the petitioners. SunCal affiliates led by Palmdale Hills Property, LLC, filed voluntary Chapter 11 petitions (Bankr. C.D. Calif. Case No. 08-17206) on Nov. 6, 2008. Affiliates that also filed separate Chapter 11 petitions include: SunCal Beaumont Heights, LLC; SunCal Johannson Ranch, LLC; SunCal Summit Valley, LLC; SunCal Emerald Meadows LLC; SunCal Bickford Ranch, LLC; SunCal Communities I, LLC; SunCal Communities III, LLC; and SJD Development Corp. SunCal Companies is not in bankruptcy. Paul J. Couchot, Esq., at Winthrop Couchot P.C., represents Palmdale Hills in its restructuring effort. The Company estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PERKINS & MARIE: Shuts Down Second Las Vegas Store Location ----------------------------------------------------------- Vegas Inc. reports that Perkins & Marie Callender's Inc. has closed a second Las Vegas location at 4800 S. Eastern Ave., near Tropicana Avenue as it works to trim costs. The Company reiterated a statement by CEO J. Trungale that, "the process of identifying underperforming locations remains ongoing and will continue throughout the Chapter 11 case." Employees were notified of the impending closure last month and were given the opportunity and encouraged to apply for positions at other Marie Callender's locations, a spokeswoman said. About Perkins & Marie Callender's Based in Memphis, Tennessee, Perkins & Marie Callender's Inc., fka The Restaurant Company, is the owner or franchiser of nearly 600 family-dining restaurants, the Perkins Restaurants and Marie Callender's. Perkins & Marie and several affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-11795) on June 13, 2011. Perkins & Marie disclosed $290 million in assets and $441 million in debt as of the Chapter 11 filing. Judge Kevin Gross presides over the case. Robert S. Brady, Esq., and Robert F. Poppiti, Jr., Esq., at Young, Conaway, Stargatt & Taylor, LLP; and Mitchel H. Perkiel, Esq., Hollace T. Cohen, Esq., and Brett D. Goodman, Esq., at Troutman Sanders, LLP, serve as bankruptcy counsel. The Debtors' financial advisors are Whitby, Santarlasci & Company. Their claims agent is Omni Management Group, LLC. DIP lender Wells Fargo is represented by lawyers at Paul, Hastings, Janofsky & Walker LLP. Roberta A. Deangelis, U.S.s Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. PFG ASPEN: Seeks Sept. 14 Extension of Confirmation Deadline ------------------------------------------------------------ PFG AspenWalk LLC asks the U.S. Bankruptcy Court the District of Minnesota to extend the deadline to obtain confirmation of its amended Chapter 11 plan from Aug. 1, 2011, to Sept. 14, 2011. The Debtor tells the Court that there is a need to extend the deadline because of the additional hearing dates required by the City Council on the Debtor's application for Final Planned Unit Development approval. The Debtor relates that the City Council City Council reserved hearing dates for August 8, 2011, August 22, 2011, and September 12, 2011, for presentation and public comment. According to the Debtor, by obtaining Final PUD Approval, the Debtor will have increased substantially the value of the Development Property and the Rental Property, which will benefit all creditors and result in the Debtor's new financing and payment to all creditors under the provisions of the Amended Plan. Minneapolis, Minnesota-based PFG AspenWalk, LLC, is a Delaware limited liability company whose primary assets consist of real property located at 404 Park Avenue, Aspen, Pitkin County, Colorado. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case No. 10-47089) on Sept. 23, 2010. Attorneys at at Leonard Street & Deinard P.A., in Minneapolis, Minnesota, assist the Debtor in its restructuring effort. According to its schedules, the Debtor disclosed $12,004,580 in total assets and $7,535,608 in total liabilities as of the Petition Date. PHILADELPHIA ORCHESTRA: Pension Fund Has Go-Signal for Discovery ---------------------------------------------------------------- Bankruptcy Judge Eric L. Frank authorized The American Federation of Musicians & Employers' Pension Fund to conduct examination and request for production of documents from The Philadelphia Orchestra Association. "[I]it is appropriate to attempt to fashion a sequential discovery process that does not impose an undue burden on the Debtor, but that will nonetheless provide relevant information to the Pension Fund in a timely fashion (taking into account the potential for litigation in the near future that may have to be completed within a compressed time frame)," Judge Frank wrote in his July 25, 2011 Order, a copy of which is available at http://is.gd/efkRxafrom Leagle.com. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the pension fund sought the documents in June given the orchestra's intention to withdraw from the multi-employer pension plan. Withdrawal would bring on a liability of $23 million, which the pension fund said would make it the orchestra's largest creditor. The pension plan wanted broad access to documents to determine if the orchestra's endowment and gifts could be used to satisfy withdrawal liability. According to the Bloomberg report, the bankruptcy judge told the orchestra to give the pension plan by July 28 the requested documents already given to the musicians' union and the creditors' committee. If the pension plan wants more documents, it can file a request by Aug. 5. The court will hold another hearing Aug. 10. From the outset, the orchestra said it needs relief from pension obligations, a new lease with the Kimmel Center where it performs, and a new union contract with musicians. Noting that Bankruptcy Code allows broad discretion in such decisions, and is "designed to permit interested parties to 'discover assets, examin[e] transactions, and determin[e] whether wrongdoing has occurred,' " Judge Eric L. Frank issued a ruling Monday that allows the union access to documents already provided to other interested parties in the case, plus a mechanism for requesting additional documents later, according to Inquirer Music Critic. 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. Reed Smith LLP serves as the Committee's counsel. Deloitte Financial Advisory Services LLP serves as financial advisors to the Committee. PHILADELPHIA ORCHESTRA: Files Schedules of Assets and Liabilities ----------------------------------------------------------------- The Philadelphia Orchestra Association filed with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $671,417 B. Personal Property $15,278,603 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $704,033 ----------- ----------- TOTAL $15,950,020 $704,033 A copy of The Philadelphia Orchestra's SAL is available at: http://bankrupt.com/misc/philadelphiaorchestra.schedules.pdf Academy of Music An affiliate, Academy of Music of Philadelphia, Inc., also filed its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $1,240,585 F. Creditors Holding Unsecured Non-priority Claims $340,152 ----------- ----------- TOTAL $1,240,585 $340,152 A copy of Academy of Music's SAL is available at: http://bankrupt.com/misc/academyofmusic.schedules.pdf 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. Reed Smith LLP serves as the Committee's counsel. PHILADELPHIA ORCHESTRA: Wants Plan Exclusivity Extended to Nov. 12 ------------------------------------------------------------------ The Philadelphia Orchestra and Academy of Music of Philadelphia, Inc., ask the U.S. Bankruptcy Court for the District of Pennsylvania to extend its exclusive periods (i) to file a plan until Nov. 12, 2011, and (ii) to solicit acceptances of that plan until Jan. 11, 2012. The Debtors' initial Exclusive Filing Period will expire on Aug. 14, 2011, and the Debtors' initial Exclusive Solicitation Period will expire on Oct. 13, 2011, absent an extension. The Debtors state that their cases have been pending for only three months, and given the challenges they have faced and the progress made to date, the extension of their exclusive periods is warranted. Further, the requested extensions will not prejudice the legitimate interests of any creditor. 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. Reed Smith LLP serves as the Committee's counsel. PHILADELPHIA ORCHESTRA: Wants Until Nov. 12 to Decide on Leases --------------------------------------------------------------- The Philadelphia Orchestra Association and Academy of Music of Philadelphia, Inc., ask the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to extend until Nov. 12, 2011, the time to assume or reject any of the unexpired leases, subleases or other agreements of nonresidential real property. The Debtors relate that the requested extension affords them maximum flexibility in seeking to implement their long-term plan and successfully reorganize while preserving the lessors' rights under the Bankruptcy Code. 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. Reed Smith LLP serves as the Committee's counsel. PHILLIPS PLASTICS: S&P Assigns Prelim. 'B' Corp. Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned a preliminary 'B' corporate credit rating to Hudson, Wisc.-based Phillips Plastics Corp. "At the same time, we assigned a preliminary 'B' issue-level rating and a preliminary '3' recovery rating to Phillips $245 million senior secured credit facility. The facility consists of a $45 million revolving credit facility due 2016 and a $200 million term loan B due 2017. The senior credit facility also has an incremental facility that provides the company with the ability to upsize the term loan by $60 million," S&P related. "The low speculative-grade rating on Phillips Plastics Corp. reflects our view that the company will maintain an aggressive financial risk profile that is characteristic of sponsor-owned companies," said Standard & Poor's credit analyst Michael Berrian. In addition, notwithstanding the relatively substantial Medisize acquisition, Phillips' business risk profile will remain weak, based on its still-relatively limited position in the competitive and fragmented field of outsourced contract manufacturing. Phillips' aggressive financial risk profile reflects its ownership by financial sponsor Kohlberg & Co., following Kohlberg's December 2010 acquisition of the company. Pro forma for the acquisition of Medisize, lease-adjusted leverage will exceed 5x, and funds from operations to total debt will be relatively thin at about 11%. "We believe that the company can use its limited free operating cash flow to modestly reduce leverage to less than 5x over the next 12 to 18 months. Still, sustained debt reduction could be compromised by additional bolt-on acquisitions as the company seeks to expand its geographic footprint and/or expand its manufacturing capabilities," S&P said. Phillips' weak business risk profile reflects its relatively small size as an outsourced contract manufacturer. Its ability to provide pre-production (13% of revenues) and production (87% of revenues) services to the medical and commercial industries will be broadened with Medisize's European focus. Pro forma for the acquisition of Medisize, medical segment sales, which are somewhat recession-resistant, will be 72% of total revenues. However, with 28% of sales through its commercial segment, Phillips still retains exposure to highly cyclical industries that can affect sales growth and margins. Moreover, the combined company still will only be the fifth largest contract manufacturer (in terms of revenue) among ten peers, and is smaller than direct competitor Accellent. While the company does have three to five year contracts and long-standing relationships with a blue-chip customer base, the relatively small size of its revenue base leaves the company susceptible to contract losses. Moreover, Phillips has one product that accounts for 11.6% of revenues, so an adverse change in end-market demand for that product could also weaken revenues and profitability. While industry data suggested that outsourcing to contract manufacturers is expected to grow at double-digit rates, the threat of customers in-sourcing manufacturing remains an issue. PRECISION DRILLING: S&P Assigns 'BB+' Rating to $300MM Sr. Debt --------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'BB+' issue-level debt rating and '4' recovery rating to Calgary, Alta.-based Precision Drilling Corp.'s proposed $300 million senior unsecured debt issue due 2021. "The '4' recovery rating indicates our expectation of average (30%-50%) recovery in the event of Default," S&P said. "Proceeds from this bond issue will likely fund continued fleet growth, as the company strives to meet growing services demand in the strengthening North American oil and gas industry," said Standard & Poor's credit analyst Michelle Dathorne. "Although debt levels are rising, 2011 day rates are strengthening relative to those of 2009 and 2010; therefore, we expect operating cash flows to strengthen in 2011 and 2012. As a result, we expect Precision's cash flow protection metrics, specifically its funds from operations to debt, to remain above the threshold we established for our 'BB+' corporate credit rating," Ms. Dathorne added. "In our simulated default analysis, we believe the most likely default scenario for Precision would be a sustained period of weak crude oil and North American natural gas prices, with a corresponding sharp decline in capital spending by exploration and production companies. At such a cyclical trough, we expect a dramatic reduction in oilfield services revenues and cash flows, as well as operating margin compression. In addition, industry use would fall. The resulting rig oversupply would increase competitive pressures and trigger large-scale day rate reductions. Our simulated default scenario assumes the company's cash flows would decrease such that it would be unable to meet its debt servicing obligations," S&P related. The ratings on Precision reflect Standard & Poor's opinion of the company's participation in the cyclical and highly volatile oilfield services sector, and the diminished cash flow generation profile associated with the current weak outlook for natural gas exploration and production. "We believe Precision's ability to secure long-term contracts for its tier one rigs, good cost management, the size and expanded geographic diversification of its drilling and service rig fleet, and the large number of rigs with deep drilling capabilities in the U.S. and Western Canada's Sedimentary Basin markets are positive offsetting factors to the industry fundamentals that weaken the company's credit profile," S&P added. Ratings List Precision Drilling Corp. Corporate credit rating BB+/Stable/- Rating Assigned Prop $300 mil. sr. unsec. debt due 2021 BB+ Recovery rating 4 PREMIER GOLF: Plan Disclosures Hearing Today -------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California will convene a hearing on July 28, 2011, at 10:00 a.m., to consider approval of the disclosure statement explaining the Chapter 11 plan filed by Premier Golf Properties, LP. As reported by the Troubled Company Reporter on June 16, 2011, performance of the Plan will be accomplished by way of refinancing all or a portion of the real property owned by the Debtor. The Debtor will devote its best efforts to continue to obtain the requisite governmental approvals to commence sand extraction and wetlands mitigation credits marketing. The Plan provides for the creation of four classes of secured creditors, two classes of unsecured creditors and an administrative expense class. Full- text copies of the disclosure statement are available for free at: http://bankrupt.com/misc/PREMIER_DS.pdf http://bankrupt.com/misc/PREMIER_PLAN.pdf Disclosure Statement Objections Acting U.S. Trustee Tiffany L. Carroll and Far East National Bank filed objections to the disclosure statement. The Acting U.S. Trustee complains that the disclosure statement fails to contain adequate information on the description and value of assets; real estate taxes; the Yamaha litigation; the Debtor's anticipated future financial condition; cash collateral; payment to insiders; and liquidation analysis, among other things. Far East asserts that the disclosure statement is internally inconsistent (e.g. 27 holes or 36 holes); confusing (e.g. when are revenues from the new operations going to be produced, at what cost); contains large sections wholly irrelevant to Debtor's Plan; affirmatively misstates the cause of the financial difficulty, omits the existence of the State Court ruling contradicting Debtor's account of the history leading up to the filing of the petition; and materially misstates, by omission and inaccuracy, the material financial facts relevant to any interested party, including any information about costs, timing or sources of funding required for the proposed new operations. It entirely omits all historical results, Far East says. It obfuscates, Far East adds, the omission of essential facts, including that net income fell in 5 of the 7 years, including the last year, prior to the Debtor's petition, by introduction of entirely new, wholly speculative, new business operations, and fails to give interested parties the required information necessary to evaluate those proposals. No requisite time frames for required cash flow are given, and no source of refinancing, the sine qua non of the Plan, is identified or even suggested, Far East contends. The Plan has major defects which would prevent its confirmation, and its feasibility is highly questionable, Far East says. To this end, both objectors ask the Court to deny approval of the disclosure statement. About Premier Golf Properties, LP El Cajon, California-based, Premier Golf Properties, LP dba Cottonwood Golf Club filed for Chapter 11 protection (Bankr. S.D. Calif. Case No. 11-07388) on May 2, 2011. Peter W. Bowie is presiding the case. Jack F. Fitzmaurice, Esq., at Fitzmaurice & Demergian represents the Debtor. The Debtor estimated assets and liabilities at $10 million to $50 million. QUAD/GRAPHICS INC: Moody's Rates Credit Facilities at 'Ba2' ----------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Quad/Graphics, Inc.'s new senior secured credit facilities (comprised of an $850 million 5-year revolving term loan, a $450 million 5-year term loan A, and a $200 million 7-year term loan B) and revised the company's rating outlook to positive from stable. The transaction is credit-positive as committed un-drawn liquidity is augmented and as the weighted average term-to-maturity of the company's debt is extended. In conjunction with expectations that the continued integration of the former World Color will yield further EBITDA gains, the liquidity enhancement plus the anticipation that free cash flow will be applied towards debt reduction prompted the outlook revision. Otherwise, the refinance transaction is neutral to Quad's credit profile as outstanding debt remains unchanged. Accordingly, Quad's corporate family and probability of default ratings (CFR and PDR respectively) were affirmed at Ba2 and all instrument ratings were also affirmed (see below; ratings on the existing credit facility will be withdrawn in the normal course). Also, Quad's speculative grade liquidity rating remains unchanged at SGL-2 (good). Issuer: Quad/Graphics, Inc. Assignments: Senior Secured Bank Credit Facility, Assigned Ba2 (LGD3, 47%) Outlook Actions: -- Outlook, Changed to Positive from Stable -- Corporate Family Rating, Unchanged at Ba2 -- Probability of Default Rating, Unchanged at Ba2 -- Speculative Grade Liquidity Rating, Unchanged at SGL-2 RATINGS RATIONALE Quad's Ba2 CFR/PDR is based on moderate leverage, solid margins, good liquidity arrangements, and expectations that free cash flow will improve with the successful integration of World Color. Quad acquired World Color in July 2010, and is in the midst of integration efforts. With significant redundant operations and assets, Quad has an opportunity to materially recalibrate the combined entity's cost structure and is replicating this strategy on a smaller scale in Mexico, having recently announced a trade of most of its Canadian assets for a stable of Mexican assets. Consequently, while industry fundamentals are quite poor -- with capacity utilization and industrial production value languishing at recessionary lows, Moody's expects industry-wide revenue growth to be less than the rate of GDP expansion -- Quad has a good opportunity to increase its EBITDA by reducing costs without impairing its revenue-generating capacity. Since the World Color transition is transformational and proportionately large - World Color was +/- 70% larger than Quad and the +/- 5% of pro forma Revenue estimated synergies figure is quite large - caution continues to be warranted. However, while it may be too early to confidently predict steady state cash flow, Moody's is optimistic that a solid proportion of synergy benefits will be realized and, with a combination of expanding EBITDA and debt repayment, there is reasonable potential of credit metrics improving significantly over the next two years. Rating Outlook The outlook is positive based on expectations that the continued integration of the former World Color will yield EBITDA gains and, together with free cash flow being applied towards debt repayment, leverage and coverage will improve over the next several quarters. What Could Change the Rating - Up While the outlook is positive, potential upgrade actions are not imminent. Given solid liquidity, a rating upgrade may be considered if (RCF-CapEx)/TD were expected to be sustained above 10.0% while (EBITDA-CapEx)/IntExp was to be above 3.75x (measures include Moody's standard adjustments). A rating upgrade would also involve certainty concerning dividend plans. What Could Change the Rating - Down We would consider a downgrade if free cash flow generation was expected to be nominal and (RCF-CapEx)/Debt were expected to be sustained below +/- 5.0% and (EBITDA-CapEx)/IntExp was less than 2.75x (measures include Moody's standard adjustments). A significant debt-financed acquisition and/or adverse liquidity developments could also result in downward rating pressure. Quad's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Quad's core industry and believes Quad's ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009 (and/or) the Government-Related Issuers methodology published in July 2010. Corporate Profile Headquartered in Sussex, Wisconsin, Quad/Graphics, Inc. (Quad) is a publicly traded leading North American commercial printing company. Pro forma annual revenues are in the $4.8 billion range. RANCHO MALIBU: Plan Denied Confirmation; Case Converted to Ch. 7 ---------------------------------------------------------------- Judge Geraldine Mund has denied confirmation of Rancho Malibu, LLC's Chapter 11 plan of reorganization and orders that the case is converted to Chapter 7 effective Aug. 19, 2011. As reported in the Troubled Company Reporter on April 21, 2011, under the Plan, the Debtor was to distribute $125,000 in cash proceeds, which it received from a Court-approved global settlement entered with its former secured creditor, East West Bank. Malibu, California-based Rancho Malibu, LLC, filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 10-18138) on July 6, 2010. Weintraub & Selth, APC, represents the Debtor. The Debtor estimates assets and debts at $10 million to $50 million. RASER TECHNOLOGIES: Reaches Deal With Creditor to Avoid Rival Plan ------------------------------------------------------------------ Lance Duroni at Bankruptcy Law360 reports that Raser Technologies Inc. reached an agreement Tuesday in Delaware with a disgruntled creditor to fend off a potential competing reorganization plan, clearing the way for the geothermal energy company to move forward swiftly on its own plan. Law360 relates that Evergreen-FE Lightning Dock LLC, the chief creditor to Raser's stalled Lightning Dock geothermal project in New Mexico, moved Monday to terminate the debtor's exclusivity and propose its own plan to pay back Lightning Dock's creditors. 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. A three-member official committee of unsecured creditors has been formed in the Chapter 11 case. Foley & Lardner LLP represents the Committee. The Committee also tapped Womble Carlyle Sandridge & Rice, PLLC, as co-counsel, BDO Consulting, a division of BDO USA, LLP, as its financial advisor and accountant; and BDO Capital Advisors, LLC its investment banker. 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. REMINGTON RANCH: Court Converts Case to Chapter 7 Liquidation ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon has granted the motion of Remington Ranch, LLC, made orally on June 29, 2011, to convert its Chapter 11 case to one under Chapter 7 of the Bankruptcy Code. Michael B. Batlan, POB 3729, Salem, OR 97302, is appointed interim trustee of this estate. Under 11 U.S.C. 1112, the Debtor-in-Possession is eligible to be a debtor under Chapter 7 of Title 11 because: (a) the Debtor is a DIP; (b) the case was commenced as a voluntary Petition; and (3) this case has not been converted from a case under any chapter of title 11. About Remington Ranch Powell Butte, Oregon-based Remington Ranch, LLC, is a property developer. It also goes by the name Coyote Basin Development, LLC, Seven Peaks, LLC, and Red Rock LLC. It filed for Chapter 11 bankruptcy protection (Bankr. D. Ore. Case No. 10-30406) on Jan. 21, 2010, Judge Elizabeth L. Perris presiding. The Debtor disclosed $29,298,544 in assets and $32,453,284 in liabilities as of the Petition Date. Attorneys at Cable Huston Benedict Haagensen & Lloyd LLP, in Portland, Oregon, serve as bankruptcy counsel. ROCHA DAIRY: Wants to Hire Deagle Ames as Accountant ---------------------------------------------------- Rocha Dairy LLC aka Rocha Farms asks the U.S. Bankruptcy Court for the District of Idaho for permission to employ Deagle, Ames & Co. as its accountant. The firm will: a) establish a bookkeeping system that complies with the order of this Court in relationship to accounting procedures; b) prepare and file Debtor's income tax returns for current and previous years, and preparing any returns required to be filed during the pendency of this Chapter 11 bankruptcy; and c) perform any other accounting services necessary or required by the debtor in the operation of its business to ensure compliance with the operating guidelines established for a Chapter 11 bankruptcy. The firm will charge $192 per hour for accounting services, and between $100 and $112 per hour for bookkeeping/data entry services. The Debtor assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. 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. ROCHA DAIRY: Committee Taps May Browning as Counsel --------------------------------------------------- The Official Committee of Unsecured Creditors of Rocha Dairy LLC aka Rocha Farms asks the U.S. Bankruptcy Court for the District of Idaho for permission to retain May Browning & May as its counsel to consult with the Debtor and its counsel concerning administration of the case. The members of the Committee are: a. Troy Chandler, Farmore of Idaho b. Lonnie Lowder, Blue Mud, Inc. c. David Silva, High Mountain Hay d. Chancey Standlee, Standlee Hay Company e. Cindy Wiersema, Kurt Wiersema Trucking. J. Justin May will charge $225 per hour and the firm's associates charge $150 per hour and paralegal bills between $60 and $80 per hour. The Committee assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. 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. ROTHSTEIN ROSENFELDT: Trustee Sues TD Bank for Role in Fraud ------------------------------------------------------------ Herbert Stettin, the Chapter 11 trustee liquidating Scott Rothstein's law firm, Rothstein Rosenfeldt Adler PA, filed a lawsuit against Toronto-Dominion Bank for allegedly not only ignoring numerous red flags raised by Mr. Rothstein's banking practices but for also allowing Mr. Rothstein's $1.2 billion-plus fraud to grow as big and last as long as it did. "TD Bank played a central role in this massive fraud by giving Rothstein's settlement program the appearance of legitimacy," Mr. Stettin said in court papers, according to reporting by Dow Jones' Daily Bankruptcy Review. "Without TD Bank's active participation in concert with Rothstein, the Ponzi scheme would not have grown so large nor lasted so long." Bloomberg News notes the complaint, filed this week, contains claims based on receipt of preferences and fraudulent transfers under federal and state law. In addition, there are claims including breach of fiduciary duty, unjust enrichment, and wire transfer liability. The bank said it would defend against the suit vigorously. DBR relates that the trustee, among others, alleges that Mr. Rothstein's law firm started off as a small TD Bank customer with three accounts but later opened 26, making the law firm a "VIP client" entitled to such special privileges as priority processing of wire transfers. Mr. Stettin said the large amounts of money flowing in and out did signify, or should have, that these were not in fact legal fees or other legitimate revenues generated by the young, midsize, local law firm that had no big legal victories to its name. "In essence, TD Bank completely ignored the obvious -- that the RRA trust accounts were being used in a manner inconsistent with law firm trust account activity and the normal practices and operations of a law firm," Mr. Stettin said. DBR says Mr. Stettin seeks to recover about $10 million in funds he says the law firm fraudulently transferred to TD Bank as well as an unspecified amount of damages for the bank's alleged breach of fiduciary duty and negligence. Any recovered proceeds would go toward the law firm's creditors. According to DBR, a TD Bank spokeswoman said in an e-mail Tuesday that the bank is reviewing the lawsuit, against which it plans to "aggressively defend itself." 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 Nov. 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 Jan. 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. RUTHERFORD CONSTRUCTION: Court Denies Access to Cash Collateral --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Virginia denied the request of Rutherford Construction, Inc. to use cash collateral. The Debtor is prohibited and enjoined from using the rents and profits from the Debtor's real property known as Lots 27-42, Section 2, Enchanted View Estates, in Fisherville, Virginia, for any purposes absent prior authorization of the Court or the express written authorization of Virginia Business Bank. VBB earlier objected to the use of the cash collateral and the Court sustained VBB's objection. The Court's ruling is without prejudice to the Debtor's right to seek further relief in the future. About Rutherford Construction, Inc. Fishersville, Virginia-based, Rutherford Construction, Inc., filed for Chapter 11 protection (Bankr. W.D. Va. Case No. 11-50346) on March 15, 2011. George I. Vogel, II, Esq., at Vogel & Cromwell represents the Debtor in its restructuring effort. The Debtor disclosed $10,667,204 in assets and $15,282,384 in liabilities as of the Chapter 11 filing. W. Clarkson McDow, Jr., the U.S. Trustee for Region 4, appointed three members to the official committee of unsecured creditors in the Debtor's cases. SANTA ROSA: S&P Cuts Long-term Rating on Toll Revenue Bonds to D ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term rating to 'D' from 'CC' on Santa Rosa Bay Bridge Authority, Fla.'s series 1996 toll revenue bonds. The issuer did not make the July 1, 2011 debt service payment. The outlook is not meaningful. SBARRO INC: Committee Wins Nod to Compel E&Y to Send Report ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the creditors' committee in Sbarro Inc.'s Chapter 11 cases was given the right by the bankruptcy judge in New York to compel the accounting firm Ernst & Young LLP to turn over a quality of earnings report it prepared for Ares Management LLC, a prospective investor. Although Ares consented, E&Y wouldn't turn over the documents unless each member of the creditors' committee signed a confidentiality agreement and agreed to indemnify the accounting firm. The bankruptcy judge compelled turnover without the conditions. Mr. Rochelle notes that the lender for the Chapter 11 case originally required filing a Chapter 11 plan by July 3. The deadline was extended to July 21 and later to July 30, a court filing says. The bankruptcy court, according to Mr. Rochelle, extended Sbarro's exclusive right to propose a reorganization plan until Oct. 13. Sbarro said in asking for more exclusivity that a steering committee for first-lien lenders had "recently" made a "preliminary proposal" for a "restructuring transaction." About Sbarro Inc. The Sbarro family started its business after moving to Brooklyn, New York, from Naples, Italy, in 1956. Today Sbarro is a leading, global Italian quick service restaurant concept with approximately 5,170 employees, 1,045 restaurants throughout 42 countries, and annual revenues in excess of $300 million. Sbarro Inc. sought bankruptcy protection under Chapter 11 (Bankr. S.D.N.Y. Lead Case No. 11-11527) to eliminate about $200 million in debt. According to its schedules, the Debtor disclosed $51,537,899 in total assets and $460,975,646 in total debts. Sbarro said it has reached an agreement with all of its second- lien secured lenders and approximately 70% of its senior noteholders on the terms of a reorganization plan that will eliminate more than half of the Company's total indebtedness. In May 2011, the company dropped the prepackaged plan, saying it had an offer at a higher value from what it called a "qualified bidder." Sbarro said its investment advisers are scouring the market for other potential purchasers. Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' general bankruptcy counsel. Rothschild, Inc., is the Debtors' investment banker and financial advisor. PriceWaterhouseCoopers LLP is the Debtors' bankruptcy consultants. Marotta Gund Budd & Dzera, LLC, is the Debtors' special financial advisor. Curtis, Mallet-Prevost, Colt & Mosle LLP serves as the Debtors' conflicts counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims agent. Sard Verbinnen & Co is the Debtors' communications advisor. DJM Realty Services, LLC, serves as the Debtors' real estate consultant and advisor. SBARRO INC: Exclusive Period to File Plan Extended to Dec. 31 ------------------------------------------------------------- BankruptcyData.com reports that the U.S. Bankruptcy Court approved Sbarro's motion to extend the exclusive period during which the Company can file a Chapter 11 plan and solicit acceptances thereof through and including Oct. 31, 2011 and Dec. 31, 2011, respectively. As previously reported, Sbarro had originally requested the extensions be effective through and including November 30, 2011 and January 29, 2012, respectively. About Sbarro Inc. The Sbarro family started its business after moving to Brooklyn, New York, from Naples, Italy, in 1956. Today Sbarro is a leading, global Italian quick service restaurant concept with approximately 5,170 employees, 1,045 restaurants throughout 42 countries, and annual revenues in excess of $300 million. Sbarro Inc. sought bankruptcy protection under Chapter 11 (Bankr. S.D.N.Y. Lead Case No. 11-11527) to eliminate about $200 million in debt. According to its schedules, the Debtor disclosed $51,537,899 in total assets and $460,975,646 in total debts. Sbarro said it has reached an agreement with all of its second- lien secured lenders and approximately 70% of its senior noteholders on the terms of a reorganization plan that will eliminate more than half of the Company's total indebtedness. Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' general bankruptcy counsel. Rothschild, Inc., is the Debtors' investment banker and financial advisor. PriceWaterhouseCoopers LLP is the Debtors' bankruptcy consultants. Marotta Gund Budd & Dzera, LLC, is the Debtors' special financial advisor. Curtis, Mallet-Prevost, Colt & Mosle LLP serves as the Debtors' conflicts counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims agent. Sard Verbinnen & Co is the Debtors' communications advisor. DJM Realty Services, LLC, serves as the Debtors' real estate consultant and advisor. SEDRA FAMILY: Case Summary & 11 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Sedra Family Limited Partnership 4750 N. Federal Highway, #100 Fort Lauderdale, FL 33308 Bankruptcy Case No.: 11-30628 Chapter 11 Petition Date: July 25, 2011 Court: U.S. Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: John K. Olson Debtor's Counsel: David A. Ray, Esq. HOUGH LAW GROUP, PA 2450 Hollywood Boulevard, #706 Hollywood, FL 33020 Tel: (954) 239-4760 E-mail: dray@houghlawgroup.com Scheduled Assets: $2,700,460 Scheduled Debts: $2,068,096 A list of the Company's 11 largest unsecured creditors filed together with the petition is available for free at: http://bankrupt.com/misc/flsb11-30628.pdf The petition was signed by Magda Sedra, manager. SEQUOIA PARTNERS: Committee Opposes Extension of Exclusivity ------------------------------------------------------------ Sequoia Partners, LLC, asks the U.S. Bankruptcy Court for the District of Oregon to further extend its exclusive period and the deadline for it to assume or reject unexpired leases of nonresidential real property until and through Oct. 25, 2011. Debtor tells the Court that this further extension will allow the parties time to continue their efforts to reach a global settlement with creditors. Sequoia's exclusivity period will expire on July 27, 2011. This is Sequoia's second request for an extension of its exclusivity period. Upon Sequoia's prior motion, the Court extended the deadline to assume or reject unexpired leases pursuant to 11 U.S.C. Section 365(d)(4) from April 28, 2011, to July 27, 2011. Sequoia says that if it was required to assume leases at this stage of the case, the estate may become unnecessarily exposed to administrative claims, and if it was forced to reject leases, it may adversely affect the parties' plan negotiation and settlement process. The court may extend this deadline for cause. The Unsecured Creditors Committee objects to the requested extensions for the following reasons: A. Extension of Exclusivity Period -- no progress has been made in the one-month period since the last mediation conference which was held on June 23, 2011. -- the Debtor has failed to pay both the insurance premiums and tax bills that have become due on the Paradise Ranch property. -- the additional three month extension without information on the Debtor's plan, and the feasibility of that plan, is unlikely to lead to a global settlement in this case. The Committee believes it would be more prudent to limit the extension to 45 days. B. Extension of Time to Assume or Reject Unexpired Leases -- the bankruptcy code states that a second extension of this period may only be granted with the prior written consent of each lessor, evidence of which Debtor has not been submitted. -- it is unclear under Debtor's Schedule G which leases are subject to the Debtor's motion. It would be helpful if the Debtor would identify 1) the residential or non residential nature and 2) whether the debtor is the lessor or lessee for each of the leases listed on it Schedule G. About Sequoia Partners, LLC Grants Pass, Oregon-based Sequoia Partners, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Ore. Case No. 10-67547) on Dec. 29, 2010. Tara J. Schleicher, Esq., at Farleigh Wada Witt, in Portland, Oregon, serves as the Debtor's bankruptcy counsel. Beowulf Consulting, LLC, serves as accountant. The Debtor estimated assets at $50 million to $100 million and debts at $10 million to $50 million. Robert D. Miller, Jr., U.S. Trustee for Region 18, appointed five members to the official committee of unsecured creditors. The Committee tapped Douglas R. Schultz, Esq., and Cassie K. Jones, Esq., at Gleaves Swearingen Potter & Scott LLP, in Eugene, Oregon, as its counsel. SEQUOIA PARTNERS: Court Approves Swearingen as Committee's Counsel ------------------------------------------------------------------ The Hon. Frank R. Alley of the U.S. Bankruptcy Court for the District of Oregon has authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of Sequoia Partners, LLC, to retain Douglas R. Schultz and Cassie K. Jones and the law firm of Gleaves Swearingen Potter & Scott LLP as its counsel, nunc pro tunc to Apr. 25, 2011. The firm will, among other things: -- advise and consult with the Committee concerning questions arising in the conduct of the administration of the estate and concerning the Committee's rights and remedies with regard to the estate's assets and the claims of secured, priority and unsecured creditors and other parties in interest; -- appear for, prosecute, defend and represent the Committee's interest in proceedings arising in or related to this case; and -- assist the Committee in evaluation of any proposed disclosure statement or plan of reorganization. The hourly rates of the firm's personnel are: Partners $245 - $375 Associates $110 - $190 Paraprofessionals $50 - $160 Law Clerks $60 To the best of the Committee's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: GLEAVES SWEARINGEN POTTER & SCOTT LLP P.O. Box 1147 Eugene, OR 97440 Tel: (541) 686-8833 About Sequoia Partners, LLC Grants Pass, Oregon-based Sequoia Partners, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Ore. Case No. 10-67547) on Dec. 29, 2010. Tara J. Schleicher, Esq., at Farleigh Wada Witt Attorneys, serves as the Debtor's bankruptcy counsel. Beowulf Consulting, LLC, serves as accountant. The Debtor estimated assets at $50 million to $100 million and debts at $10 million to $50 million. Robert D. Miller, Jr., U.S. Trustee for Region 18, appointed five members to the official committee of unsecured creditors. The Committee tapped Douglas R. Schultz and Cassie K. Jones and the law firm of Gleaves Swearingen Potter & Scott LLP as its counsel. SHOPPES OF LAKESIDE: Reaches Deal With Heartwood, et al., on Plan ----------------------------------------------------------------- Shoppes of Lakeside, Inc., asks the U.S. Bankruptcy Court for the Middle District of Florida to approve a stipulation amending the proposed Chapter 11 Plan. The stipulation was entered among the Debtor, creditors Heartwood 88, LLC, Fidelity Tax LLC, and Mike Hogan, tax collector. The stipulation provides that: 1. The Debtor will amend the Chapter 11 Plan to add Class 25, which will provide that the Debtor will pay the secured claims of Heartwood 88, totaling $31,139 in full together with the interest at a rate of 6% in equal monthly installments over a period of 60 months. Payments to Heartwood will be principal and interest of $602 per month. Heartwood will retain its lien on the real property and its right for tax deed sale relief in the event the Debtor fails to pay Heartwood in accordance with the terms of the Plan. 2. The other terms of the Debtor's Chapter Plan remain unchanged. 3. Heartwood will withdraw any pending motion for relief from stay, withdraw any objection to confirmation and vote to accept the Debtor's Chapter 11 Plan. 4. Heartwood and Fidelity will withdraw Claims 9,14, and 15 as these claims relate to real property not owned by the Debtor and which real property in not included in property of the Debtor's bankruptcy estate. Accordingly, the Plan will have no effect on Heartwood's or Fidelity's tax liens or tax certificates on real property which relate to Claims 9, 14 and 15. About Shoppes of Lakeside, Inc. Neptune Beach, Florida-based Shoppes of Lakeside, Inc., filed for Chapter 11 bankruptcy protection on June 15, 2010 (Bankr. M.D. Fla. Case No. 10-05199). Bryan K. Mickler, Esq., who has an office in Jacksonville, Florida, assisted the Company in its restructuring effort. The Company disclosed $39,894,050 in assets and $37,748,101 in liabilities. The Debtors Plan provides for, among other things (i) General Unsecured Creditors will receive a distribution of 100% of their allowed claims; and after the effective date of the Plan, the directors, officers, and voting trustees of the Debtor, any of its affiliate participating in a joint Plan, or its successor under the Plan will be Chris Hionides. Mr. Hionides is the current president of the Debtor. As post-confirmation manager of the Debtor, he will not receive any compensation until all other classes are paid in full. SOUTH EDGE: Ch.11 Trustee to Tap Piercy Bowler for Tax Services --------------------------------------------------------------- Cynthia Nelson, Chapter 11 Trustee for the bankruptcy estate of South Edge, LLC, seeks permission from the U.S. Bankruptcy Court of the District of Nevada to hire Piercy Bowler & Kern, nunc pro tunc to July 1, 2011. PBT&K will be rendering tax return preparation services for the Trustee. The firm's hourly billing rates are: Principals $300 to $410 Managers $205 to $235 Senior Associates $125 to $180 Staff Associates $100 to $125 The firm estimates that its fees for providing tax preparation services and related advice will range from $1,400 to $8,000. Michael Kern of PBT&K assures the Court that his firm and its professionals do not hold or represent and have not previously held or represented any interest adverse to the Debtor's estate. About South Edge Las Vegas, Nevada-based South Edge LLC owns the Inspirada project, an uncompleted 2,000-acre residential development in Henderson, Nevada, about 16 miles (26 kilometers) southeast of Las Vegas. The eight owners of the project include an affiliate of KB Home, a 49% owner. Other owners are Coleman Toll LP with 10.5%, Pardee Homes Nevada Inc. with 4.9%, Meritage Homes with 3.5%, and Beazer Homes USA Inc. with 2.6%. JPMorgan Chase Bank, N.A., Credit Agricole Corporate and Investment Bank, and Wells Fargo Bank, N.A., filed an involuntary chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 10-32968) on Dec. 9, 2010, against South Edge, LLC. The petitioning creditors are part of a lender group that provided a $595 million credit. New York-based JPMorgan serves as lender and agent for the group. South Edge filed motions to dismiss the involuntary petition. The Court conducted a contested trial on Jan. 24 and 25, 2011, and Feb. 2 and 3, 2011. On Feb. 3, 2011, the Court entered an order for relief under Chapter 11 of the Bankruptcy Code against the Debtor and issued an order directing the appointment of a chapter 11 trustee. The United States Trustee appointed Cynthia Nelson to serve as Chapter 11 trustee on Feb. 20, 2011. The Court approved the appointment three days later. South Edge is represented by lawyers at Klee, Tuchin, Bogdanoff and Stern LLP, and The Schwartz Law Firm, Inc., as legal counsel. The Chapter 11 trustee also tapped Schwartzer & McPherson Law Firm as local counsel. Petitioning creditors JPMorgan Chase Bank, N.A., and Wells Fargo Bank, N.A., are represented by lawyers at Morrison and Foerster LLP; and Lewis and Roca LLP. Credit Agricole is represented by lawyers at Haynes and Boone LLP, and Jolley Urga Wirth Woodbury & Standish. SOUTH EDGE: Trustee Can Tap $4MM Portion of Homebuilders' Loan -------------------------------------------------------------- Patrick Fitzgerald, writing for Dow Jones Newswires, reports that Judge Bruce A. Markell permitted the Chapter 11 trustee for South Edge LLC to tap $4 million of the $21.4 million bankruptcy loan provided by home builders KB Home, Beazer Homes USA Inc. and Toll Brothers Inc. Dow Jones notes the builders, who were among the legion of lenders, contractors and developers involved in the massive project, last month agreed to pay lenders as much as $340 million to settle legal actions related to the failed project. Dow Jones relates the settlement, which has the backing of trustee Cynthia Nelson, is expected to form the basis of a Chapter 11 exit plan for South Edge. Dow Jones recounts an affiliate of John Ritter's Focus Property Group, a Nevada-based land-development company, had balked at the financing pact, claiming it would allow the builders to "effectively lock in" the plan of reorganization. Focus's lawyers had argued while the plan may be good deal for the builders because it reduces their exposure and insulates them from litigation, it is not a good deal for Inspirada. The report notes Focus and the home builders were allies in 2004 when they formed South Edge to purchase land for the 2,000-acre Inspirada project in Henderson, Nevada, from the federal Bureau of Land Management. But the two sides fell out when the real-estate bubble and the builders halted work on the project. Judge Markell will consider whether the trustee can draw down the remainder of the loan at a hearing scheduled for Aug. 12. About South Edge Las Vegas, Nevada-based South Edge LLC owns the Inspirada project, an uncompleted 2,000-acre residential development in Henderson, Nevada, about 16 miles (26 kilometers) southeast of Las Vegas. The eight owners of the project include an affiliate of KB Home, a 49% owner. Other owners are Coleman Toll LP with 10.5%, Pardee Homes Nevada Inc. with 4.9%, Meritage Homes with 3.5%, and Beazer Homes USA Inc. with 2.6%. JPMorgan Chase Bank, N.A., Credit Agricole Corporate and Investment Bank, and Wells Fargo Bank, N.A., filed an involuntary chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 10-32968) on Dec. 9, 2010, against South Edge, LLC. The petitioning creditors are part of a lender group that provided a $595 million credit. New York-based JPMorgan serves as lender and agent for the group. South Edge filed motions to dismiss the involuntary petition. The Court conducted a contested trial on Jan. 24 and 25, 2011, and Feb. 2 and 3, 2011. On Feb. 3, 2011, the Court entered an order for relief under Chapter 11 of the Bankruptcy Code against the Debtor and issued an order directing the appointment of a chapter 11 trustee. The United States Trustee appointed Cynthia Nelson to serve as Chapter 11 trustee on Feb. 20, 2011. The Court approved the appointment three days later. South Edge is represented by lawyers at Klee, Tuchin, Bogdanoff and Stern LLP, and The Schwartz Law Firm, Inc., as legal counsel. The Chapter 11 trustee also tapped Schwartzer & McPherson Law Firm as local counsel. Petitioning creditors JPMorgan Chase Bank, N.A., and Wells Fargo Bank, N.A., are represented by lawyers at Morrison and Foerster LLP; and Lewis and Roca LLP. Credit Agricole is represented by lawyers at Haynes and Boone LLP, and Jolley Urga Wirth Woodbury & Standish. SPROUTS FARMER: S&P Assigns 'B+' Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Phoenix-based Sprouts Farmers Markets Holdings LLC. The outlook is stable. "At the same time, we assigned our 'B+' bank loan rating and '4' recovery rating to Sprouts' proposed $360 million senior secured credit facility comprised of a $50 million revolving credit facility due 2016 and a $310 million term loan due 2018," S&P related. The proceeds from the term loan along with an equity contribution from Apollo Management were used to fund Sprouts' purchase of Henry's Farmer Market and for Apollo to acquire a majority interest in the combined company. "The ratings reflect our expectations that Sprouts' continued store expansion and same-store sales growth will lead to better profits and credit metric enhancement," said Standard & Poor's credit analyst Charles Pinson-Rose. "We view the company's financial risk as highly leveraged, but do not expect to change our assessment despite the expected profit growth. We consider Sprouts' business profile weak, reflecting its participation in the intensely competitive food retailing industry, lack of diversity given its geographic concentration in the Southwestern U.S., and an aggressive store expansion program." SUNOCO INC: Fitch Downgrades IDR to 'BB+'; Outlook Stable --------------------------------------------------------- Fitch Ratings has downgraded the long-term Issuer Default Rating (IDR) and other ratings of Sunoco, Inc. to 'BB+' from 'BBB-' following the recent completion of the SunCoke IPO. The Ratings Outlook has been revised from Negative to Stable. The main catalysts for the downgrade include: -- The reduced business diversification at Sunoco following the SunCoke spin-off and disposition of additional Sunoco refining and chemical assets; -- Tthe increasing structural subordination of debt at the parent level to debt at Sunoco Logistics Partners L.P (SXL; rated 'BBB', with a Stable Outlook by Fitch), both because assets and cash flows outside of SXL continue to decline in line with asset dispositions, and because Fitch anticipates that SXL is likely to be the main vehicle for the future growth of Sunoco and should therefore comprise an increasing percentage of the parent's overall earnings and cash flow. Fitch also believes that a scenario where the company does not significantly de-lever at the Sunoco level following the spin-off is a distinct possibility. The restructuring of the company has accelerated as Sunoco continues to transition from a manufacturing-centered business model to a distribution-centered business model. Following the March 1 sale of the 170,000 barrels per day) (bpd) Toledo refinery to a subsidiary of PBF Holding Company, Sunoco's total refining capacity stood at just 505,000 bpd, a little over half of the 910,000 bpd capacity it had a few years ago. Fitch believes that the sale or restructuring of Sunoco's remaining refining capacity is a distinct possibility, including the Marcus Hook, PA refinery, which still has a meaningful portion of mandatory EPA Consent Decree capital expenditures associated with it. Sunoco's recent financial performance has been good. As calculated by Fitch, for the latest 12 months (LTM) ending March 31, 2011, the company generated EBITDA of $1.16 billion, versus $598 million in 2009, and had unadjusted debt-to-EBITDA of approximately 2.14 times (x) and funds from operations (FFO)-interest coverage of 6.7x. Sunoco's free cash flow for this period was -$9 million. Despite a weak first quarter, Fitch expects that Sunoco will be free cash flow (FCF) positive in 2011 due to a combination of lower capex requirements from its shrunken refining footprint, and reasonable results in other sectors. Sunoco's weak first quarter results were driven by unplanned maintenance at its Northeast refineries which led to low utilization rates (74%), one-time costs related to the relocation of SunCoke headquarters prior to the spin-off, and spot coke purchases for 2011 shortfalls at the Indiana Harbor plant. Note that the above leverage figures are not adjusted for SXL's $1.1 billion of debt, which is fully consolidated on Sunoco's balance sheet due to its ownership of SXL's controlling General Partner stake despite Sunoco's less than 100% ownership stake. Sunoco's liquidity was very robust at March 31, 2011 and totaled approximately $2.9 billion (excluding SXL facilities), including $1.48 billion of cash and equivalents and high availability on its $1.2 billion revolver (due 2012) and $275 million accounts receivable securitization facility (due 2011). Key revolver financial covenants include a minimum tangible net worth (TNW) requirement and a maximum consolidated net-debt-to-capitalization ratio of 60%, both of which had ample headroom at March 31, 2011. The net debt ratio is expected to improve further as proceeds are received from the spin-off and other asset sales later this year. SXL has separate $395 million and $63 million revolvers (due 2012 and 2011), with consolidated debt-to-EBITDA maximums of 4.75x and 4.5x, respectively. Pending Sunoco, Inc. maturities are manageable and include a $250 million 4.875% note due 2014, $250 million of 9.63% notes due 2015, and $400 million of 5.75% notes due 2017. Sunoco's ratings are supported by the company's remaining portfolio of ratable, distribution based businesses -- Sunoco logistics and retail, as well as remaining refining assets; the company's currently high liquidity; and historically conservative credit profile. Catalysts for positive ratings actions include additional debt reductions at the Sunoco level and/or increases in EBITDA at remaining businesses to support current debt levels. Catalysts for future negative ratings actions include a major leveraging transaction or other increases to the debt profile. Fitch downgrades these: -- Issuer Default Rating (IDR) to 'BB+' from 'BBB-'; -- Senior Unsecured Revolver and Notes to 'BB+'; -- Subordinated Notes to 'BB' from 'BB+'; -- Commercial Paper to 'B' from 'F3'; -- Short-Term IDR to 'B' from 'F3'; SUNOCO INC: S&P Lowers CCR to 'BB+' on Completion of SunCoke IPO ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Sunoco Inc. to 'BB+' from 'BBB-' and removed the ratings from CreditWatch with negative implications where they were placed on June 17, 2010. The outlook is stable. "At the same time, we assigned a 'BB+' senior unsecured debt rating and '4' recovery rating to Sunoco's $1.3 billion revolving credit facility due 2012. We also assigned a '4' recovery rating to Sunoco's existing senior unsecured debt issues, indicating our expectation of average (30% to 50%) recovery in the event of a payment default," S&P related. As of March 31, 2011, Sunoco had approximately $2.5 billion of funded debt on a consolidated basis. "The downgrade reflects our view that Sunoco's business risk profile is materially weaker as a result of the recently completed IPO and planned full spin-off of its SunCoke Energy Inc. business," said Standard & Poor's credit analyst Patrick Jeffrey. "We viewed the SunCoke business as a meaningful contributor to Sunoco's EBITDA and one of the more stable business segments. Once the spin-off is completed, we expect Sunoco will focus more on growing its retail and distribution businesses and less on its refining operations. Our view is supported by Sunoco's sale of its Toledo refinery in March 2011, leaving it with two refineries in the Petroleum Administration for Defense District (PADD) I, which is one of the most competitive, less profitable, and highly volatile refining markets. However, we do expect Sunoco to maintain significant cash balances through the business cycle. As of March 31, 2011, Sunoco had about $1.5 billion in cash, which does not include about $790 million of gross proceeds resulting from the SunCoke Energy separation," S&P said. SYNTAX-BRILLIAN: Court Rejects Suit v. Preferred Bank ----------------------------------------------------- Bankruptcy Judge Brendan Linehan Shannon dismissed a lawsuit filed by the Syntax-Brillian liquidating trust against Preferred Bank. The SB Liquidation Trust was established pursuant to the plan of liquidation filed by Syntax-Brillian Corporation and its affiliated debtors and confirmed by the Court. The Trust sued the Bank to recover damages allegedly owed to the Debtors' estates. The Trust has alleged that the Bank aided and abetted certain officers and directors of the Debtors in breaching their fiduciary duties and in committing fraud. The Trust said the Bank contributed to the collapse of the Debtors by providing financing and other banking services that ultimately allowed the Insiders to improperly divert hundreds of millions of dollars in cash to Taiwan Kolin Company, Ltd., to the ultimate detriment of the Debtors and their creditors. The Bank provided the Debtors up to $55 million credit line pre-bankruptcy. The Trust also seeks to avoid certain allegedly fraudulent transfers received by the Bank. The Bank argues that the complaint should be dismissed in its entirety pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, made applicable to adversary proceedings by Federal Rule of Bankruptcy Procedure 7012, on the ground that the Trust has failed to state a claim upon which relief may be granted. The case is SB Liquidation Trust, v. Preferred Bank, Adv. Proc. No. 10-51389 (Bankr. D. Del.). A copy of Judge Shannon's decision dated July 25 is available at http://is.gd/vRJuwFfrom Leagle.com. About Syntax-Brillian Based in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq:BRLC) -- www.syntaxbrillian.com -- manufactured and marketed LCD HDTVs, digital cameras, and consumer electronics products including Olevia(TM) brand high-definition widescreen LCD televisions and Vivitar brand digital still and video cameras. Syntax-Brillian was the sole shareholder of California-based Vivitar Corporation. The Company and two of its affiliates -- Syntax-Brillian SPE, Inc., and Syntax Groups Corp. -- filed for Chapter 11 protection on July 8, 2008 (Bankr. D. Del. Lead Case No.08-11407. Lawyers at Greenberg Traurig LLP represented the Debtors as counsel. Five members composed the official committee of unsecured creditors. Pepper Hamilton, LLP, represented the Committee as counsel. Epiq Bankruptcy Solutions, LLC, served as the Debtors' balloting, notice, and claims agent. When the Debtors filed for protection against their creditors, they disclosed total assets of $175,714,000 and total debts of $259,389,000. The Bankruptcy Court confirmed the Debtors' Joint Chapter 11 Liquidation Plan in an order dated July 6, 2009. Under the Plan, general unsecured claims were to received pro rata distributions from a liquidating trust after payment of the trust's expenses and a "liquidating trust funding reimbursement." Holders of allowed prepetition credit facility claims were to receive their pro rata distributions from a lender trust, after payment in full of allowed DIP facility claims. A full-text copy of the Debtors' 2nd amended Chapter 11 liquidating plan is available at: http://bankrupt.com/misc/syntax-brillian2ndamendedplan.pdf Counsel to SB Liquidation Trust are: David M. Fournier, Esq. Evelyn J. Meltzer, Esq. PEPPER HAMILTON LLP Hercules Plaza, Suite 5100 1313 Market Street, P.O. Box 1709 Wilmington, DE 19899-1709 Tel: 302-777-6565 Fax: 302-421-8390 E-mail: fournierd@pepperlaw.com meltzere@pepperlaw.com Special counsel to SB Liquidation Trust are: Allan B. Diamond, Esq. Andrea L. Kim, Esq. Eric D. Madden, Esq. Michael J. Yoder, Esq. DIAMOND MCCARTHY LLP Two Houston Center 909 Fannin Street, 15th Floor Houston, TX 77010 Tel: (713) 333-5104 E-mail: adiamond@diamondmccarthy.com akim@diamondmccarthy.com emadden@diamondmccarthy.com myoder@diamondmccarthy.com T&J RESTAURANT: Chevys Fresh Mex Abruptly Closes Doors ------------------------------------------------------ Jacob Barker at Columbia Daily Tribune reports that fans of Chevys Fresh Mex will have to look elsewhere for their burrito fix after the Columbia franchise at 1010 I-70 Drive S.W. abruptly closed its doors. According to the report, the Columbia store's closure comes three days after the franchise owner, T&J Restaurants LLC, filed for Chapter 11 bankruptcy protection. T&J, 91 percent owned by John Whicker of St. Charles, operates seven Chevys restaurants in the St. Louis area. One of T&J's bankruptcy attorneys, Tom Riske of Lathrop & Gage's Clayton office, said the company wanted to focus on its St. Louis- area stores, and continuing to operate the Columbia location was "just proving a little difficult." Based in Saint Charles, Missouri, T&J Restaurants LLC filed for Chapter 11 bankruptcy protection on July 21, 2011 (Bankr. S.D. Ill. Case No. 11-31622). Judge Laura K. Grandy presides over the case. Robert E. Eggmann, Esq., and Thomas Riske, Esq., at Lathrop and Gage LLP, represent the Debtor. The Debtor disclosed $2,806,956 in assets, and $7,716,237 in debts. TERRESTAR NETWORKS: FTC Approves Dish's $1.4 Billion Bid -------------------------------------------------------- Hilary Russ at Bankruptcy Law360 reports that Dish Network Corp.'s nearly $1.4 billion offer for TerreStar Network Inc. cleared another hurdle Monday when the Federal Trade Commission approved the deal after finding it passed antitrust muster. According to Law360, the agency's decision to grant the companies an early exit from a federally mandated waiting period -- during which the FTC determines whether the deal would hinder competition in the industry -- brings the companies one step closer to closing the transaction. About 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. TerreStar has signed a contract to sell its business to Dish Network Corp. for $1.38 billion. TerreStar cancelled a June 30 auction because there were no competing bids submitted by the deadline. TOPAZ POWER: S&P Affirms 'BB-' Rating on $600-Mil. Facilities ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' rating on Austin, Texas-based Topaz Power Holdings LLC's $660 million senior secured facilities. The '2' recovery rating remains unchanged. The outlook is stable. The credit facilities, issued in May 2008, consist of a $615 million construction term facility due Dec. 31, 2014 ($599.5 million outstanding at Dec. 31, 2010) and a $45 million revolving facility (not drawn at Dec. 31, 2010) that will expire May 9, 2013. In July 2010, the project released the $30 million portion of its $75 million revolving facility that was available solely for letters of credit, leaving $45 million available for working capital. A construction letter of credit expired in May 2010. Topaz (or, the project) amortized about $11.6 million of senior debt in 2010, of which $4.6 million was mandatory 1% amortization payments and $7 million was the 100% cash sweep. "This is similar to the rate of amortization we expected in our original rating. During 2011, the project budgets $6.2 million of mandatory 1% amortization payments and $52 million of cash sweep, which would result in $541 million of debt outstanding at Dec. 31, 2011. We also expect the project to amortize roughly $58 million of debt in 2011, and this rate of amortization would be similar to what we assumed in our original rating. Our original rating assumed that senior debt at the 2014 maturity date would total about $489 million, or $265 per kilowatt for the total 1,848 megawatt (MW) portfolio, or $323 per kilowatt excluding the 335 MW Barney Davis 1 peaking unit," S&P related. An important recent development was a series of claims in March 2011 by tolling agreement counterparty Morgan Stanley Capital Group that the project had committed several events of default with regard to transmission and gas pipeline interconnections, among other items. The project has actively disputed the claims and Morgan Stanley continues to make monthly payments, but the matter has not been settled and could indicate the counterparty's desire to frustrate the tolling agreement. About $1 million of disputed payments remain in escrow, down from about $2 million earlier in 2011. "We believe that the probability that the tolling agreement will be terminated is too low to affect the credit rating, but the risk is important to note because termination would significantly reduce project cash flows and in certain cases could lead to asset sales," S&P said. Topaz owns five natural gas-fired power-generation facilities in the ERCOT South region and is itself wholly owned by subsidiaries of the Carlyle/Riverstone Global Energy and Power Fund III L.P. "The outlook on Topaz is stable, reflecting our expectation that the project's contracted cash flows from its tolling agreements will continue to amortize debt at expected rates. We would likely lower the rating if the rate of amortization were to fall significantly below that needed to achieve our expected debt at maturity," said Standard & Poor's credit analyst Matthew Hobby. This rate of amortization will largely depend on the performance of the Nueces Bay facility in 2013-2014 after its tolling agreement expires. An upgrade is unlikely at this time unless the project mitigates the Nueces Bay facility's exposure to merchant market risk in 2013-2014 by entering into a hedging agreement that amortized debt at expected rates, or a faster rate. "Although we do not believe that the tolling agreement will be terminated, continued attempts by counterparty Morgan Stanley to frustrate the agreement could result in a rating downgrade because of the significant effect that termination would have on lenders. The tolling agreements do not excuse scheduled outages for routine major maintenance so the project may incur liquidated damages during scheduled outages. We are assuming that the project will be able to schedule future outages so that liquidated damages will not significantly exceed 2010 levels. However, an increase in liquidated damages could also result in a rating downgrade," S&P related. TUBO DE PASTEJE: Epiq Bankruptcy OK'd as Notice, Balloting Agent ---------------------------------------------------------------- The Hon. Kevin J. Carey of the U.S. Bankruptcy Court of the District of Delaware authorized Tubo de Pasteje SA to employ Epiq Bankruptcy Solutions LLC notice and balloting agent. As reported in the Troubled Company Reporter on June 14, 2011, as part of its retention, Epiq agreed that: (a) Epiq will not consider itself employed by the United States government and will not seek any compensation from the United States government in its capacity as the Notice and Balloting Agent in these chapter 11 cases; (b) By accepting employment in these chapter 11 cases, Epiq waives any rights to receive compensation from the United States government; (c) In its capacity as the Notice and Balloting Agent in these chapter 11 cases, Epiq will not be an agent of the United States government and will not act on behalf of the United States government During its retention, Epiq Bankruptcy, will, among other things, act as balloting agent, which may include some or all of the following services: i. printing ballots and coordinating the mailing of solicitation packages (i.e., ballots, disclosure statement, and chapter 11 plan) to all voting and non- voting parties and provide a certificate or affidavit of service with respect thereto; ii. establishing a toll-free number to receive questions regarding voting with respect to any chapter 11 plan; iii. receiving ballots at its offices or a post office box, inspecting ballots for conformity to voting procedures, date stamping and numbering ballots consecutively and tabulating and certifying the results. The Companies respectfully submit that the rates to be charged by Epiq for its services in connection with balloting services are competitive and comparable to the rates charged by Epiq' s competitors for similar services. To the best of the Debtor's knowledge, Epiq is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Tubo de Pasteje Tubo de Pasteje SA and subsidiary Cambridge-Lee Holdings Inc. filed Chapter 11 petitions (Bankr. D. Del. Case No. 09-14353) on Dec. 7, 2009, following a Nov. 15 payment default on US$200 million in 11.5% senior notes due 2016. Tubo and its subsidiary sought bankruptcy protection when the 30-day grace period was nearing its end. Tubo is a subsidiary of Mexico City-based Industrias Unidas SA de CV, a manufacturer of copper and electrical products. The U.S. subsidiary Cambridge-Lee is based in Reading, Pennsylvania. IUSA is the issuer of the notes which were secured by a pledge of Cambridge-Lee stock. TUBO DE PASTEJE: Court OKs Deloitte Financial Advisory as Auditor ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania has authorized Tubo de Pasteje SA to employ Deloitte Financial Advisory Services LLP to provide audit services to Cambridge Lee Holdings, Inc. Upon retention, the firm will audit Cambridge-Lee Holdings' consolidated financial statements for the year ended Dec. 31, 2010 and such other related services as may be requested by the Company and agreed to by Deloitte & Touche. Deloitte & Touche is expected to charge the Debtor $60,000. Any fees in excess of $60,000 will be billed by Deloitte & Touche at a discounted hourly rate of $200 per hour for staff, $275 per hour for managers, and $400 per hour for partners. The fees will be invoiced and paid in one installment of $60,000 upon approval of this Supplemental Application. Deloitte & Touche will apply for compensation and reimbursement of its fees, costs and expenses in excess of $60,000 in accordance with applicable provisions of the Bankruptcy Code, Bankruptcy Rules, and Local Rules, the guidelines promulgated by the Office of the U.S. Trustee, and any additional procedures that may be established by this Court in the Chapter 11 Cases. About Tubo de Pasteje Tubo de Pasteje SA and subsidiary Cambridge-Lee Holdings Inc. filed Chapter 11 petitions (Bankr. D. Del. Case No. 09-14353) on Dec. 7, 2009, following a Nov. 15 payment default on US$200 million in 11.5% senior notes due 2016. Tubo and its subsidiary sought bankruptcy protection when the 30-day grace period was nearing its end. Tubo is a subsidiary of Mexico City-based Industrias Unidas SA de CV, a manufacturer of copper and electrical products. The U.S. subsidiary Cambridge-Lee is based in Reading, Pennsylvania. IUSA is the issuer of the notes which were secured by a pledge of Cambridge-Lee stock. TUBO DE PASTEJE: Court OKs Dewey & Leboeuf LLP as Attorneys ----------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania has authorized Tubo de Pasteje SA to employ Dewey & Leboeuf LLP as attorneys. Upon retention, the firm, will among other things: a. advise the Debtors in connection with the legal aspects of the Plan and Disclosure Statement process, and any other financial restructuring in these cases; b. prepare on behalf of the Debtors, as debtors in possession, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates; c. to the extent applicable, take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates. The firm's rates are: Personnel Rates --------- ----- Partners $750-$1,090 Counsel $700 Associates $385-$650 Paraprofessionals $200-$275 About Tubo de Pasteje Tubo de Pasteje SA and subsidiary Cambridge-Lee Holdings Inc. filed Chapter 11 petitions (Bankr. D. Del. Case No. 09-14353) on Dec. 7, 2009, following a Nov. 15 payment default on US$200 million in 11.5% senior notes due 2016. Tubo and its subsidiary sought bankruptcy protection when the 30-day grace period was nearing its end. Tubo is a subsidiary of Mexico City-based Industrias Unidas SA de CV, a manufacturer of copper and electrical products. The U.S. subsidiary Cambridge-Lee is based in Reading, Pennsylvania. IUSA is the issuer of the notes which were secured by a pledge of Cambridge-Lee stock. U.S. EAGLE: Lease Decision Period Extended Until August 15 ---------------------------------------------------------- The Hon. Novalyn N. Winfield of the U.S. Bankruptcy Court for the District of New Jersey, in a bridge order, extended until Aug. 15, 2011, U.S. Eagle Corporation, et al.'s time to assume or reject their unexpired leases of nonresidential real property. Julius Realty Corporation, Atlantic Avenue Partners, Bedecon Investments, SPCI Realty, LLC and Ester D. Long, the landlords of the nine leased properties consented to the lease extension. The Debtor requested that the Court extend the lease decision period for nine unexpired leases of nonresidential real property from Aug. 4, to Nov. 2. The Court will convene a hearing on Aug. 15, at 10:00 a.m., to consider the Debtor's motion for lease extension. The Debtors relate that they need more time to make material decisions regarding the sale or refinancing of Eagle One Golf Products, Inc. and the Traffic Control Services entities. The Debtors are still considering how to rationalize their businesses for the post-bankruptcy era. About U.S. Eagle Corporation U.S. Eagle filed for Chapter 11 bankruptcy protection on Jan. 6, 2011 (Bankr. D. N.J. Case No. 11-10392). Samuel Jason Teele, Esq., at Lowenstein Sandler PC, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates U.S. Eagle Litho, Inc. (Bankr. D. N.J. Case No. 11- 10401), Eagle One Golf Products, Inc. (Bankr. D. N.J. Case No. 11- 10397), Julius Realty Corporation (Bankr. D. N.J. Case No. 11- 10393), Traffic Control Service, Inc., An Arizona Corporation (Bankr. D. N.J. Case No. 11-10398), Traffic Control Service, Inc., A California Corporation (Bankr. D. N.J. Case No. 11-10403), and Traffic Control Service, Inc., A Nevada Corporation (Bankr. D. N.J. Case No. 11-10392) filed separate Chapter 11 petitions on Jan. 6, 2011. U.S. EAGLE: Seeks to Pay Critical Vendors Claims Totaling $445,370 ------------------------------------------------------------------ U.S. Eagle Corporation and its debtor affiliates seek permission from the U.S. Bankruptcy Court for the District of New Jersey to pay prepetition claims of critical vendors and service providers. According to the Debtors, the aggregate amount of Critical Vendors' prepetition claims is approximately $445,370. The Critical Vendors, the Debtors explain, provide goods or services essential to the Debtors' operations and that are unavailable from any other source, or cannot be replaced without substantial additional cost and interruption of the Debtors' businesses. U.S. Eagle filed for Chapter 11 bankruptcy protection on Jan. 6, 2011 (Bankr. D. N.J. Case No. 11-10392). Samuel Jason Teele, Esq., at Lowenstein Sandler PC, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates U.S. Eagle Litho, Inc. (Bankr. D. N.J. Case No. 11- 10401), Eagle One Golf Products, Inc. (Bankr. D. N.J. Case No. 11- 10397), Julius Realty Corporation (Bankr. D. N.J. Case No. 11- 10393), Traffic Control Service, Inc., An Arizona Corporation (Bankr. D. N.J. Case No. 11-10398), Traffic Control Service, Inc., A California Corporation (Bankr. D. N.J. Case No. 11-10403), and Traffic Control Service, Inc., A Nevada Corporation (Bankr. D. N.J. Case No. 11-10392) filed separate Chapter 11 petitions on Jan. 6, 2011. USA UNITED: Sec. 341 Creditors' Meeting Set for Aug. 16 ------------------------------------------------------- The United States Trustee for Region 2 will convene a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a) in the bankruptcy case of USA United Fleet, Inc., on Aug. 16, 2011, at 2:00 p.m. at 271 Cadman Plaza East, Room 4529, in Brooklyn. Based in Staten Island, USA United Fleet is one of the biggest providers of transportation for New York City's public-school children. USA United Fleet Inc. and seven affiliates filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Lead Case No. 11-45867) on July 6, 2011. Judge Jerome Feller presides over the case. Todd E. Duffy, Esq., at Anderson Kill & Olick, P.C., serves as the Debtors' counsel. In its petition, USA United Fleet estimated assets and debts of $10 million to $50 million. The petition was signed by William Moran, comptroller. USA UNITED: U.S. Trustee Wants Reorganization Case Converted ------------------------------------------------------------ Tracy Hope Davis, U.S. Trustee for Region 2, asks the U.S. Bankruptcy Court for the Eastern District of New York to convert the Chapter 11 cases of USA United Fleet, et al., to one under Chapter 7 of the Bankruptcy Code. The Court will consider the U.S. Trustee's request to convert the Debtors' cases at a date and time to be determined. Based in Staten Island, USA United Fleet is one of the biggest providers of transportation for New York City's public-school children. USA United Fleet Inc. and seven affiliates filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Lead Case No. 11-45867) on July 6, 2011. Judge Jerome Feller presides over the case. Todd E. Duffy, Esq., at Anderson Kill & Olick, P.C., serves as the Debtors' counsel. In its petition, USA United Fleet estimated assets and debts of $10 million to $50 million. The petition was signed by William Moran, comptroller. VALENCE TECHNOLOGY: Expects up to $14-Mil Revenue for Fiscal Q1 --------------------------------------------------------------- Valence Technology, Inc., expects revenue of approximately $13.5 to $14.0 million for its fiscal 2012 first quarter ended June 30, 2011. "Our first quarter revenue is projected to be above our May 25, 2011 guidance of $8.5 to $10.5 million, principally due to significant shipments to Smith Electric Vehicles. In addition, we continue to see a positive trend in orders from both existing and new customers. This includes dozens of customers in diverse markets worldwide," commented president and chief executive officer Robert L. Kanode. "We believe our products' performance, safety, durability, cycle life, and energy density offer a compelling solution. With five years of on-the-road experience and a family of standard and custom products, Valence is well positioned in pursuing a broad base of emerging worldwide markets. In addition, due to our experience and vertical integration Valence can quickly scale as markets mature and grow," continued Kanode. Key Highlights -- In excess of 150 megawatt-hours of advanced energy storage solutions have been shipped since 2005. -- 54 unique customers during fiscal Q1 2012 including corporations in the United States, United Kingdom, France, Canada, Italy, the Netherlands, and Spain. -- Applications served include: metropolitan transit buses, sailboats, off-grid power trailers, postal scooters, commercial delivery vehicles, and Segway(R) personal transporters. On Aug. 3, 2011, Valence will release its first quarter financial results after the market closes, and Company management will conduct a conference call that day at 3:30 p.m. CT (4:30 p.m. ET) to discuss the results. 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. VEY FINANCE: Court Approves Patrick Tuttle and Re/Max as Realtors ----------------------------------------------------------------- The Hon. H. Christopher Mott has authorized Vey Finance, LLC, to employ Patrick Tuttle and Re/Max Real Estate Group as realtors to market some of its real property inventory located in El Paso, Texas. Judge Mott also orders that the compensation of Patrick Tuttle and Re/Max Real Estate Group will be paid as an administrative expense pursuant to the Listing Agreement. As reported in the Troubled Company Reporter on July 6, 2011, the firm will get a commission of 4.5% if there is one broker or half of 6% if there is more one broker involved in the transaction, with the other broker(s) to receive 3% of the total selling price of any property. The Debtor assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Vey Finance Vey Finance, LLC, in El Paso, Texas, filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-30901) on May 13, 2011. Judge H. Christopher Mott presides over the case. Wiley F. James, III, Esq., at James & Haugland, P.C., in El Paso, Texas, represent the Debtor as bankruptcy counsel. John W. (Jay) Dunbar, CPA, serves as its regular accountant. The Debtor scheduled assets of $10,477,513 and liabilities of $12,504,207. The petition was signed by Veronica L. Veytia, managing member. VITRO SAB: Subsidiaries Involuntary Petitions Dismissed ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Vitro SAB bondholders won a victory when the bankruptcy judge in Dallas formally dismissed involuntary bankruptcy petitions they filed against several of the Mexican glassmaker's subsidiaries. The bankruptcy court extended the exclusive right of bankrupt U.S. Vitro subsidiaries to file a Chapter 11 plan until Oct. 4. According to the report, the bankruptcy judge denied involuntary Chapter 11 petitions against several Vitro subsidiaries. Because the judge did not explicitly say that the petitions were dismissed, it was unclear whether the automatic stay was still in effect. If it were, the bondholders couldn't attempt to collect on the $1.2 billion in defaulted bonds without violating the stay. The bondholders filed papers seeking a clarification. Mr. Rochelle relates that in a July 25 ruling, U.S. Bankruptcy Judge Harlin DeWayne Hale clarified the situation by signing an order saying the involuntary petitions were dismissed. Judge Hale reserved the right to determine whether the bondholders must pay damages to Vitro as a result of the loss on the involuntary petitions. By having their involuntary petitions formally dismissed, the bondholders won themselves the right to undertake collection actions against non-bankrupt Vitro subsidiaries which guaranteed the debt. Mr. Rochelle recounts that the Vitro parent's reorganization was revived by an appellate court in Mexico after having been dismissed in a lower court. The Vitro parent now has protection from creditors in the U.S. under Chapter 15, where U.S. courts have the power to enforce rulings from foreign bankruptcy courts. Judge Hale did not say whether he would enforce a Mexican reorganization in the U.S. if it's approved by a Mexican court using $1.9 million of insider claims to cram down on the bondholders who oppose the reorganization. Clarification Motion Vitro Asset Corp., et al., asked the U.S. Bankruptcy Court for the Southern District of New York to deny the clarification request of the creditors who signed the involuntary Chapter 11 petitions. Petitioning creditors -- Knighthead Master Fund, L.P., Brookville Horizons Fund, L.P., Davidson Kempner Distressed Opportunities Fund L.P., and Lord Abbett Bond-Debenture Fund, Inc., -- filed an emergency motion: i) seeking clarification (a) that the involuntary cases an the petitions commencing the cases have been dismissed; and (b) that any stay pursuant to Section 362 of the Bankruptcy Code, Bankruptcy Rule 7062, or otherwise does not apply to the involuntary cases or the alleged Debtors; or in the alternative, (ii) seeking dismissal of the involuntary petitions and the involuntary cases. The Petitioning Creditors wanted the Court to clarify, for avoidance of doubt, that the term denied in the orders denying the involuntary petitions means that the involuntary petitions and the involuntary cases have been dismissed under the Bankruptcy Code; and that no stay applies under Section 362 of the Bankruptcy Code, Bankruptcy Rule 7062, or otherwise as to the involuntary cases, or to the alleged Debtors and their property. The Former Alleged Debtors related that the Clarification Motion is procedurally defective and therefore must be dismissed; and the Petitioning Creditors failed to explain what "emergency" now necessitates the dismissal of the Involuntary Cases before Aug. 16, 2011, when no such emergency apparently existed for the past three months. About Vitro America Headquartered in Memphis, Tennessee, Vitro America is a leading fabricator, distributor, and installer of glass in the construction, automotive replacement, and furniture markets. The company serves more than 40,000 customers from more than 100 locations throughout the United States. About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009 and sought to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. Concurso Mercantil & Chapter 15 Proceedings Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, commencing its voluntary concurso mercantil proceedings -- the Mexican equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on Dec. 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. The judge said Vitro couldn't push through a plan to buy back or swap US$1.2 billion in debt from bondholders based on the vote of US$1.9 billion of intercompany debt when third-party creditors were opposed. Vitro as a result dismissed the first Chapter 15 petition following the ruling by the Mexican court. On April 12, 2011, an appellate court in Mexico reinstated the reorganization. Accordingly, Vitro SAB on April 14 re-filed a petition for recognition of its Mexican reorganization in U.S. Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11-11754). In the present Chapter 15 case, the Debtor seeks to block any creditor suits in the U.S. pending the reorganization in Mexico. On June 29, 2011, Vitro Packaging de Mexico S.A. de C.V. commenced a voluntary judicial reorganization proceeding under the Ley de Concursos Mercantiles before the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, the United Mexican States. On June 30, 2011, Vitro Packaging filed a chapter 15 petition (Bankr. N.D. Tex. Case No. 11-34224). Alejandro Francisco Sanchez-Mujica and Javier Arechavaleta Santos serve as Foreign Representatives of Vitro S.A.B. de C.V. and Vitro Packaging de Mexico S.A. de C.V. The Foreign Representatives are represented by David M. Bennett, Esq., Katharine E. Battaia, Esq., and Cassandra A. Sepanik, Esq., at Thompson & Knight LLP, and Andrew M. Leblanc, Esq., Risa M. Rosenberg, Esq., Thomas J. Matz, Esq., and Jeremy C. Hollembeak, Esq., at Milbank Tweed Hadley & McCloy LLP. Attorneys for the Ad Hoc Group of Vitro Noteholders are Jeff P. Prostok, Esq., and Lynda L. Lankford, Esq., at Forshey & Prostok, LLP, and Allan S. Brilliant, Esq., Benjamin E. Rosenberg, Esq., Craig P. Druehl, Esq., and Dennis H. Hranitzky, Esq., at Dechert LLP. Chapter 11 Proceedings A group of noteholders, namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P., opposed the exchange. Together, they held US$75 million, or approximately 6% of the outstanding bond debt. The Noteholder group commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. The U.S. affiliates subject to the involuntary petitions are Vitro Chemicals, Fibers & Mining, LLC (Bankr. N.D. Tex. Case No. 10- 47472); Vitro America, LLC (Bankr. N.D. Tex. Case No. 10-47473); Troper Services, Inc. (Bankr. N.D. Tex. Case No. 10-47474); Super Sky Products, Inc. (Bankr. N.D. Tex. Case No. 10-47475); Super Sky International, Inc. (Bankr. N.D. Tex. Case No. 10-47476); VVP Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47477); Amsilco Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47478); B.B.O. Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47479); Binswanger Glass Company (Bankr. N.D. Tex. Case No. 10-47480); Crisa Corporation (Bankr. N.D. Tex. Case No. 10-47481); VVP Finance Corporation (Bankr. N.D. Tex. Case No. 10-47482); VVP Auto Glass, Inc. (Bankr. N.D. Tex. Case No. 10-47483); V-MX Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47484); and Vitro Packaging, LLC (Bankr. N.D. Tex. Case No. 10-47485). A bankruptcy judge in Fort Worth, Texas, denied involuntary Chapter 11 petitions filed against four U.S. subsidiaries. On April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro America LLC and three other U.S. subsidiaries -- that were subject to the involuntary petitions into voluntary Chapter 11. The Texas Court on April 21 denied involuntary petitions against the eight U.S. subsidiaries that didn't consent to being in Chapter 11. The U.S. subsidiaries subsequently sold their businesses to an affiliate of Sun Capital Partners Inc. for $55 million. Kurtzman Carson Consultants is the claims and notice agent to Vitro America, et al. Alvarez & Marsal North America LLC is the Debtors' operations and financial advisor. The official committee of unsecured creditors appointed in the Chapter 11 cases of Vitro America, et al., has selected Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, as counsel. WARNER MUSIC: Delisted from New York Stock Exchange --------------------------------------------------- The New York Stock Exchange LLC notified the U.S. Securities and Exchange Commission regarding the removal from listing or registration of Warner Music Group Corp.'s common stock on the Exchange. About Warner Music Group Based in New York, Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- was formed by a private equity consortium of investors on Nov. 21, 2003. The Company is the direct parent of WMG Holdings Corp., which is the direct parent of WMG Acquisition Corp. WMG Acquisition Corp. is one of the world's major music-based content companies and the successor to substantially all of the interests of the recorded music and music publishing businesses of Time Warner Inc. The Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing. The Company's Recorded Music business primarily consists of the discovery and development of artists and the related marketing, distribution and licensing of recorded music produced by such artists. The Company's Music Publishing operations include Warner/Chappell, its global Music Publishing company, headquartered in New York with operations in over 50 countries through various subsidiaries, affiliates and non-affiliated licensees. Warner Music reported a net loss of $39 million on $682 million of revenue for the three months ended March 31, 2011, compared with a net loss of $28 million on $666 million of revenue for the same period during the prior year. The Company also reported a net loss of $57 million on $1.47 billion of revenue for the six months ended March 31, 2011, compared with a net loss of $44 million on $1.58 billion of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $3.61 billion in total assets, $3.87 billion in total liabilities and a $254 million in total deficit. * * * In May 2011, Warner Music Group Corp. and Access Industries, the U.S.-based industrial group, announced the execution of a definitive merger agreement under which Access Industries will acquire WMG in an all-cash transaction valued at $3.3 billion. The purchase includes WMG's entire recorded music and music publishing businesses. WARNER MUSIC: Edgar Bronfman Does Not Own Common Shares ------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Edgar Bronfman, Jr., disclosed that he does not own any shares of common stock of Warner Music Group Corp. On July 20, 2011, the merger contemplated by the Merger Agreement by and among the Company, Parent and Merger Sub became effective. As a result, Mr. Bronfman is no longer the beneficial owner of any Shares. As previously reported by the TCR on June 17, 2011, Mr. Bronfman beneficially owned 6.5% of the shares outstanding. A full-text copy of the filing is available for free at: http://is.gd/c4maA0 About Warner Music Group Based in New York, Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- was formed by a private equity consortium of investors on Nov. 21, 2003. The Company is the direct parent of WMG Holdings Corp., which is the direct parent of WMG Acquisition Corp. WMG Acquisition Corp. is one of the world's major music-based content companies and the successor to substantially all of the interests of the recorded music and music publishing businesses of Time Warner Inc. The Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing. The Company's Recorded Music business primarily consists of the discovery and development of artists and the related marketing, distribution and licensing of recorded music produced by such artists. The Company's Music Publishing operations include Warner/Chappell, its global Music Publishing company, headquartered in New York with operations in over 50 countries through various subsidiaries, affiliates and non-affiliated licensees. Warner Music reported a net loss of $39 million on $682 million of revenue for the three months ended March 31, 2011, compared with a net loss of $28 million on $666 million of revenue for the same period during the prior year. The Company also reported a net loss of $57 million on $1.47 billion of revenue for the six months ended March 31, 2011, compared with a net loss of $44 million on $1.58 billion of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $3.61 billion in total assets, $3.87 billion in total liabilities and a $254 million in total deficit. * * * In May 2011, Warner Music Group Corp. and Access Industries, the U.S.-based industrial group, announced the execution of a definitive merger agreement under which Access Industries will acquire WMG in an all-cash transaction valued at $3.3 billion. The purchase includes WMG's entire recorded music and music publishing businesses. WASHINGTON MUTUAL: FDIC Should Pay for $650M Suit, JPMorgan Says ---------------------------------------------------------------- Pete Brush at Bankruptcy Law360 reports that JPMorgan Chase Bank NA filed a third-party complaint in Ohio on Monday, saying its agreement to buy assets from Washington Mutual Inc. means the Federal Deposit Insurance Corp. must indemnify it in a suit over $650 million in mortgage-backed securities. 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. WATER STREET: Can Hire Mark B. French as Bankruptcy Counsel ----------------------------------------------------------- Judge Russell F. Nelms has authorized Water Street Development Partners, L.P., to employ Mark B. French, Attorney at Law, as bankruptcy counsel. As reported in the Troubled Company Reporter on July 7, 2011, Mr. French will, among other things: a. advise and consult with the Debtor concerning (i) legal questions arising in administering and reorganizing the Debtor's estate, and (ii) the Debtor's rights and remedies in connection with the estate's assets and creditors' claims; b. provide legal services to the Debtor relating to the sale of assets outside the ordinary course of business, if necessary; and c. assist the Debtor in obtaining confirmation and consummation of the Plan. The hourly rates of Mr. French and other professionals are: Mr. French $300 Janet Nolley $75 Amy Rodgers $50 Kristi Erickstad $50 To the best of the Debtor's knowledge, Mr. French is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. French can be reached at: Mark B. French, Esq. Attorney at Law 1901 Central Dr., Suite 704 Bedford, TX 76021 Tel: (817) 268-0505 Fax: (817) 632-5413 E-mail: mark@markfrenchlaw.com About Water Street Development Partners Southlake, Texas-based Water Street Development Partners, L.P., filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No. 11- 42841) on May 13, 2011. Judge Russell F. Nelms presides over the case. The Law Office of Mark B. French serves as the Debtor's bankruptcy counsel. Robert DeRogatis is a limited partner of the Debtor and holds a 99% equity interest. Water Street Management LLC holds the other 1% stake. WATER STREET: Can Access $10,000 Unsecured Loan from R. DeRogatis ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, authorizes Water Street Development Partners, L.P., to borrow up to $10,000 of unsecured financing from Robert DeRogatis, the owner of the Debtor's general partner. Mr. DeRogatis is granted an allowed general unsecured claim, with administrative expense status subordinated to all other administrative expense claims arising in the Bankruptcy Case, with repayment due only in the event of a confirmed Chapter 11 plan and receipt by the Debtor of sufficient funds to effectuate the plan, and in the amount actually received by or on behalf of the Debtor under the terms of the Court's Order. About Water Street Development Partners Southlake, Texas-based Water Street Development Partners, L.P., filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No. 11- 42841) on May 13, 2011. Judge Russell F. Nelms presides over the case. The Law Office of Mark B. French serves as the Debtor's bankruptcy counsel. Robert DeRogatis is a limited partner of the Debtor and holds a 99% equity interest. Water Street Management LLC holds the other 1% stake. WEST CORP: Reports $34.37 Million Net Income in 2Q 2011 ------------------------------------------------------- West Corporation reported net income of $34.37 million on $622.82 million of revenue for the three months ended June 30, 2011, compared with net income of $36.29 million on $596.54 million of revenue for the same period a year ago. The Company also reported net income of $68.95 million on $1.23 billion of revenue for the six months ended June 30, 2011, compared with net income of $72.29 million on $1.19 billion of revenue for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $3.23 billion in total assets, $4.18 billion in total liabilities, $1.59 billion in Class L common stock and a $2.54 billion stockholders' deficit. A full-text copy of the press release announcing the financial results is available for free at http://is.gd/Vz7W5A About West Corporation Founded in 1986 and headquartered in Omaha, Nebraska, West Corporation -- http://www.west.com/-- provides outsourced communication solutions to many of the world's largest companies, organizations and government agencies. West Corporation has a team of 41,000 employees based in North America, Europe and Asia. The Company reported net income of $60.30 million on $2.39 billion of revenue for the year ended Dec. 31, 2010, compared with net income of $90.97 million on $2.38 billion of revenue during the prior year. * * * West Corp. carries a 'B2' corporate rating from Moody's and 'B+' corporate rating from Standard & Poor's. Moody's Investors Service upgraded the ratings on West Corporation's existing senior secured term loan to Ba3 from B1 and the rating on $650 million of existing senior notes due 2014 to B3 from Caa1 upon the closing of its recent refinancing transactions. Concurrently, Moody's affirmed all other credit ratings including the B2 Corporate Family Rating and B2 Probability of Default Rating. The rating outlook is stable. Standard & Poor's Ratings Services assigned Omaha, Neb.-based business process outsourcer West Corp.'s proposed $650 million senior unsecured notes due 2019 its 'B' issue-level rating (one notch lower than the 'B+' corporate credit rating on the company). The recovery rating on this debt is '5', indicating S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. The company will use proceeds from the proposed transaction and some cash on the balance sheet to redeem its $650 million 9.5% senior notes due 2014. WESTLAND PARCEL: Court Approves David Goodrich as CRO ----------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized Westland Parcel J. Partners, LLC, to employ David M. Goodrich at Goodrich Law Corporation as Chief Restructuring Officer. Mr. Goodrich will work with the Debtor's current professionals and staff in its efforts to monetize assets and propose a liquidating Chapter 11 Plan. Mr. Goodrich will have all of the powers of a sole managing member of the Debtor. Mr. Goodrich will be compensated at the rate of $250 per hour, with a $5,000, retainer to be paid by the Debtor after approval of the Application. In addition, the Debtor will reimburse Mr. Goodrich for reasonable and necessary expenses incurred in connection with the Chapter 11 case. Mr. Goodrich has not sought, and will not be paid, a success fee. Mr. Goodrich maintained that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Westland Parcel J Partners Long Beach, California-based Westland Parcel J Partners, LLC, is developing a mixed-use commercial project consisting of general aviation, aviation-oriented office, retail, restaurant, and other airport related uses. The Company filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 10-58987) on Nov. 15, 2010. Jeffrey S Shinbrot, Esq., at The Shinbrot Firm, assists the Debtor in its restructuring effort. Kallman & Co., LLC, serves as its certified public accountants. AG Commercial serves as its leasing broker. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliate David William Neary (Bankr. C.D. Calif. Case No. 10- 39802) filed separate Chapter 11 petition on July 20, 2010. WESTSIDE MEDICAL: Wants to Use Cash Collateral to Pay Prof. Fees ---------------------------------------------------------------- Westside Medical Park, LLC, seeks bankruptcy court approval of the first amendment to the stipulation to use cash collateral. The other party to the stipulation is Merlone Geier Partners, L.P., who holds a senior security interest in all of the Debtor's property including cash collateral. A key purpose of the First Amendment is to facilitate the payment of a portion of professional fees, costs and expenses incurred by the Debtor in relation to creditor negotiations from MGP's cash collateral, while enabling MGP to receive an adequate protection payment and receive other forms of adequate protection. The principal terms of the First Amendment are: * The the Debtor will be authorized to pay up to $30,000 per month from the Cash Collateral Account for professional fees, costs and expenses incurred from and after May 15, 2011 through Aug. 15, 2011, totaling $90,000 in the aggregate, by professionals employed by the Debtor at the expense of the estate to the extent such fees, costs and expenses are payable. Any portion of the Monthly Cap not used in a given month may be carried forward to a future month. * The fees and expenses should have the written consent of MGP. * As adequate protection to MGP, the Debtor will not enter into any new leases, including renewals or modifications of existing leases, of any of part of the Real Properties without MGP's prior written consent. * The Debtor will pay to its managing member, Stonebridge Holdings, Inc., a one-time supplemental management fee of $60,000 from the Cash Collateral Account. * The Debtor will pay to MGP a one-time adequate protection payment of $150,000 from the Cash Collateral Account. About Westside Medical Los Angeles, California-based Westside Medical Park, LLC, filed for Chapter 11 bankruptcy protection on November 3, 2010 (Bankr. C.D. Calif. Case No. 10-57457). The Debtor tapped Peregrine Realty Partners as appraiser. The Debtor estimated assets and debts at $50 million to $100 million as of the Chapter 11 filing. On Dec. 28, 2010, Peter C. Anderson, the U.S. Trustee, appointed these persons to serve in the Official Committee of Unsecured Creditors in the Debtor's case: 1. Dakota Communications 2. Burnside & Associates, Inc. 3. Argo Group US, Inc. 4. A.C. Martin Partners, Inc. W.R. GRACE: Reports $75.8 Million Net Income in 2nd Quarter ----------------------------------------------------------- W. R. Grace & Co. (NYSE: GRA) announced its financial results for the second quarter ended June 30, 2011. Following are Grace's key financial performance measures for the second quarter: * Sales increased 20.6% to $826.4 million from $685.0 million in the prior year quarter. * Adjusted EBIT increased 45.8% to $132.8 million from $91.1 million in the prior year quarter. Adjusted EPS was $1.11 compared with $0.76 in the prior year quarter. * Grace net income increased 48.6% to $75.8 million from $51.0 million in the prior year quarter. Grace's diluted EPS was $1.00 compared with $0.69 in the prior year quarter. * Adjusted Operating Cash Flow was $109.4 million in the second quarter compared with $101.3 million in the prior year quarter. * Adjusted EBIT Return on Invested Capital was 31.3% on a trailing four quarter basis compared with 25.2% in the prior year quarter. "I am pleased with how well the Grace team is executing in today's dynamic operating environment," said Fred Festa, Grace's Chairman, President and Chief Executive Officer. "The investments we have made are making a significant difference to our results, giving us the confidence to increase our outlook for 2011." Second Quarter Results Sales increased 20.6% overall and 16.1% in the emerging regions compared with the prior year quarter. The sales increase was due to improved pricing (11.6%), favorable currency translation (5.6%), and higher sales volumes (3.4%). Gross profit percentage was 36.8% compared with 35.7% in the prior year quarter and 36.2% in the 2011 first quarter. The increase in gross profit percentage was primarily due to improved pricing partially offset by higher raw materials costs. Grace currently expects raw material cost inflation for 2011 to be approximately $75 million, excluding rare earth cost inflation. Adjusted EBIT was $132.8 million, an increase of 45.8% compared with $91.1 million in the prior year quarter. Adjusted EBIT margin was 16.1% compared with 13.3% in the prior year quarter. The increase in Adjusted EBIT was primarily due to the increase in sales and improved gross profit percentage compared with the prior year quarter. Grace net income for the second quarter was $75.8 million, or $1.00 per diluted share, compared with $51.0 million, or $0.69 per diluted share, in the prior year quarter. Six Months Results Sales increased 17.1% overall and 16.0% in the emerging regions for the six months ended June 30, 2011 compared with the prior year period. The sales increase was due to improved pricing (9.2%), higher sales volumes (4.9%), and favorable currency translation (3.0%). Sales were $1,522.1 million compared with $1,299.9 million in the prior year period. Grace net income for the six months ended June 30, 2011 was $130.0 million, or $1.72 per diluted share, compared with $107.2 million, or $1.44 per diluted share, in the prior year period. Grace Davison Sales up 25%; Segment operating income up 37% Second quarter sales for the Grace Davison operating segment, which includes specialty catalysts and materials used in a wide range of industrial applications, were $568.6 million, an increase of 25.3% compared with the prior year quarter. The sales increase was due to improved pricing (16.3%), favorable currency translation (5.9%), and higher sales volumes (3.1%). Sales of this operating segment are reported by product group as follows: * Refining Technologies -- sales of catalysts and chemical additives used by petroleum refineries were $267.8 million in the second quarter, an increase of 49.5% compared with the prior year quarter. Sales in this product group were favorably affected by price increases, implemented to reflect the higher value of new FCC catalyst technologies and to offset the rising cost of raw materials (primarily rare earths), higher volumes, and favorable currency translation. In the first quarter, Grace introduced eight new catalyst products with improved performance and reduced rare earth content designed to help customers mitigate the significantly higher cost of rare earth. Almost 50% of Grace's FCC catalyst customers have adopted at least one of our new low or no rare earth products. * Materials Technologies -- sales of engineered materials, coatings and sealants used in industrial and packaging applications were $190.8 million in the second quarter, an increase of 9.6% compared with the prior year quarter. Sales in this product group were favorably affected by price increases, implemented to offset rising raw materials costs, and favorable currency translation, partially offset by lower sales volumes. * Specialty Technologies -- sales of highly specialized catalysts, materials and equipment used in unique or proprietary applications and markets were $110.0 million in the second quarter, an increase of 9.2% compared with the prior year quarter. Sales in this product group were favorably affected by higher sales volumes, favorable currency translation, and improved pricing. Gross profit percentage was 38.1% compared with 36.2% in the prior year quarter and 37.4% in the 2011 first quarter. The increase in gross profit percentage compared with the prior year quarter was primarily due to improved pricing partially offset by higher raw materials costs. Segment operating income for the second quarter was $145.7 million compared with $106.5 million in the prior year quarter, a 36.8% increase primarily due to improved pricing and higher sales volumes. Segment operating margin was 25.6% compared with 23.5% in the prior year quarter. Sales of the Grace Davison operating segment for the six months ended June 30, 2011 increased 21.2% compared with the prior year period. Gross profit percentage was 37.8% compared with 35.6% in the prior year period. Segment operating income of Grace Davison was $264.0 million, an increase of 35.9% compared with the prior year period. Segment operating margin was 25.0% compared with 22.3% in the prior year period. Grace Construction Products Sales up 12%; Emerging region sales up 28% Second quarter sales for the Grace Construction Products operating segment, which includes Specialty Construction Chemicals (SCC) products and Specialty Building Materials (SBM) products used in commercial, infrastructure and residential construction, were $257.8 million, up 11.6% compared with the prior year quarter. The sales increase was due to favorable currency translation (5.0%), higher sales volumes (4.2%), and improved pricing (2.4%). Sales in the emerging regions increased 27.8% compared with the prior year quarter. Sales of this operating segment are reported by geographic region as follows: * Americas -- sales to customers in the Americas were $129.9 million in the second quarter, an increase of 11.9% compared with the prior year quarter. Sales in North America increased 5.9% from the prior year quarter primarily due to improved pricing and higher sales volumes. Sales in Latin America grew 43.1% compared with the prior year quarter primarily due to higher sales volumes. * Europe -- sales to customers in Europe, the Middle East, Africa and India were $78.5 million in the second quarter, an increase of 4.7% compared with the prior year quarter. Sales were favorably impacted by currency translation and improved pricing, partially offset by lower sales volumes. * Asia -- sales to customers in Asia (excluding India), Australia and New Zealand were $49.4 million in the second quarter, an increase of 23.5% compared with the prior year quarter. Sales increased primarily due to higher sales volumes and favorable currency translation. Gross profit percentage was 34.1% in the second quarter compared with 35.0% in the prior year quarter and 33.7% in the 2011 first quarter. The decrease in gross profit percentage compared with the prior year quarter was primarily due to higher raw material costs and the additional operating costs of new plants in the emerging regions, partially offset by improved pricing. The increase in gross profit percentage compared with the 2011 first quarter was primarily due to improved operating leverage. Segment operating income for the second quarter was $29.6 million compared with $25.7 million for the prior year quarter, a 15.2% increase primarily due to higher sales volumes and favorable currency translation, partially offset by lower gross profit percentage. Segment operating margin was 11.5% compared with 11.1% in the prior year quarter. Sales of the Grace Construction Products operating segment for the six months ended June 30, 2011 increased 8.8% compared with the prior year period. Gross profit percentage was 33.9% compared with 34.9% in the prior year period. Segment operating income was $45.9 million, an increase of 11.1% compared with the prior year period. Segment operating margin was 9.9% compared with 9.7% in the prior year period. Corporate Costs Corporate costs increased $4.7 million in the second quarter compared with the prior year quarter primarily due to higher performance based incentive compensation. Pension Expense Defined benefit pension expense for the second quarter was $15.1 million compared with $18.4 million for the prior year quarter, a 17.9% decrease. The decrease in expense was primarily due to benefits from an accelerated plan contribution of approximately $180 million made in March 2011 and good plan asset performance in the U.S. in 2010. Interest Interest expense was $11.0 million for the second quarter compared with $11.0 million for the prior year quarter. The annualized weighted average interest rate on prepetition obligations for the second quarter was 3.5%. Income Taxes Income taxes are recorded at a global effective tax rate of approximately 32% before considering the effects of certain non- deductible Chapter 11 expenses, changes in uncertain tax positions and other discrete adjustments. Grace has not had to pay U.S. Federal income taxes in cash in recent years since available tax deductions and credits have fully offset U.S. taxable income. Income taxes in foreign jurisdictions are generally paid in cash. Grace expects to generate significant U.S. Federal net operating losses upon emergence from bankruptcy. Income taxes paid in cash, excluding tax settlements, were $19.4 million for the six months ended June 30, 2011, or approximately 10.1% of income before income taxes. Cash Flow Performance Measure Adjusted Operating Cash Flow (see note A) was $130.3 million for the six months ended June 30, 2011 compared with $128.5 million in the prior year period. Capital expenditures were $57.7 million compared with $42.2 million for the prior year period. Net working capital days were 56 days for the second quarter, compared with 49 days in the prior year quarter and 61 days in the 2011 first quarter. Higher rare earth costs added $47.8 million to accounts receivable and inventories during the six months ended June 30, 2011. Chapter 11 Proceedings On January 31, 2011, the Bankruptcy Court issued an order confirming Grace's Joint Plan of Reorganization (the "Plan"). The confirmation order must next be affirmed by the United States District Court. On June 28-29, 2011, the District Court heard oral arguments on affirmation and appeals to the confirmation order. The timing of Grace's emergence from Chapter 11 will depend on affirmation of the Plan by the District Court and the satisfaction or waiver of the other conditions set forth in the Plan, including the resolution of any further appeals. Grace is preparing to consummate the Plan as quickly as practicable. The Plan sets forth how all prepetition claims and demands against Grace will be resolved. 2011 Outlook Update Higher sales; Higher Adjusted EBIT As of July 26th, Grace expects 2011 sales to be $3.25 to $3.30 billion, compared with $2.85 to $2.95 billion in its February 10, 2011 outlook. Grace expects 2011 Adjusted EBIT to be $465 to $480 million, compared with $365 to $385 million in its February outlook. Grace expects 2011 Adjusted EBITDA to be $585 to $600 million, compared with $485 to $505 million in its February outlook. For 2011, Grace expects to maintain its gross profit percentage within its 35-37% target range. Gross profit percentage in the second half of 2011 is expected to be lower than in the first half of 2011 primarily due to the mathematical effect of higher rare earth surcharges and costs on calculated gross profit percentages. Grace is unable to make a reasonable estimate of the income effects of the consummation of the Plan because the value of certain consideration payable to the asbestos trusts under the Plan (primarily the deferred payments and the warrants) will not ultimately be determined until the effective date of the Plan, the timing of which is uncertain. When the Plan is consummated, Grace expects to reduce its liabilities subject to compromise, including asbestos-related contingencies, recognize the value of the deferred payments and the warrants and recognize expense for the costs of consummating the Plan and the income tax effects of these items. Investor Call Grace discussed the results during an investor conference call and webcast on July 26, 2011 starting at 11:00 a.m. ET. An audio replay will be available from 2:00 p.m. ET on July 26 until 11:59 p.m. ET on August 2. The replay will be accessible by dialing +1.888.286.8010 (international callers dial +1.617.801.6888) and entering conference call ID #55112870. W. R. Grace & Co. and Subsidiaries Consolidated Balance Sheets (Unaudited) ========================================= June 30, Dec. 31, Amounts in millions 2011 2010 ------------------- -------- -------- ASSETS Current Assets Cash and cash equivalents $894.7 $1,015.7 Restricted cash and cash equivalents 112.2 97.8 Trade accounts receivable, less allowance 488.0 380.8 Accounts receivable - unconsolidated affiliate 13.0 5.3 Inventories 313.2 259.3 Deferred income taxes 48.7 54.7 Other current assets 77.6 90.6 -------- -------- Total Current Assets 1,947.4 1,904.2 Properties and equipment, net 719.7 702.5 Goodwill 130.2 125.5 Deferred income taxes 822.6 845.0 Asbestos-related insurance 500.0 500.0 Overfunded defined benefit pension plans 40.6 35.6 Investments in unconsolidated affiliates 63.6 56.4 Other assets 90.7 102.5 -------- -------- Total Assets $4,314.8 $4,271.7 ======== ======== LIABILITIES AND EQUITY (DEFICIT) Liabilities Not Subject to Compromise Current Liabilities Debt payable within one year $36.9 $37.0 Debt payable - unconsolidated affiliate 2.4 2.3 Accounts payable 259.9 207.1 Accounts payable - unconsolidated affiliate 3.0 8.5 Other current liabilities 300.1 278.0 -------- -------- Total Current Liabilities 602.3 532.9 Debt payable after one year 2.7 2.9 Loan payable - unconsolidated affiliate 15.6 12.6 Deferred income taxes 35.3 34.6 Underfunded and unfunded defined benefit pension plans 327.2 539.8 Other liabilities 43.3 43.6 -------- -------- Total Liabilities Not Subject to Compromise 1,026.4 1,166.4 Liabilities Subject to Compromise Debt plus accrued interest 926.2 911.4 Income tax contingencies 89.9 93.8 Asbestos-related contingencies 1,700.0 1,700.0 Environmental contingencies 139.5 144.0 Postretirement benefits 177.8 181.1 Other liabilities and accrued interest 145.2 143.8 -------- -------- Total Liabilities Subject to Compromise 3,178.6 3,174.1 -------- -------- Total Liabilities 4,205.0 4,340.5 Equity (Deficit) Common stock 0.7 0.7 Paid-in capital 463.1 455.9 Retained earnings 161.7 31.7 Treasury stock, at cost (41.2) (45.9) Accumulated other comprehensive (income) loss (481.3) (518.1) -------- -------- Total W.R. Grace & Co. Shareholders' Equity (Deficit) 103.0 (75.7) Non-controlling interests 6.8 6.9 -------- -------- Total Shareholders' Equity (Deficit) 109.8 (68.8) -------- -------- Total Liabilities and Shareholders' Equity (Deficit) $4,314.8 $4,271.7 ======== ======== W. R. Grace & Co. and Subsidiaries Consolidated Statements of Operations Three Months Ended (Unaudited) June 30 June 30 ========================================= ======== ======== Amounts in millions 2011 2010 ------------------- -------- -------- Net sales $826.4 $685.0 Cost of goods sold 522.5 440.5 -------- -------- Gross profit 303.9 244.5 Selling, general and administrative expense 145.2 129.8 Restructuring expenses & rel. asset impairments 0.7 1.2 Research and development expenses 16.7 14.8 Defined benefit pension expense 15.1 18.4 Interest expense and related financing cost 11.0 11.0 Provision for environmental remediation 0.5 - Chapter 11 expenses, net of interest income 6.7 4.3 Equity in (earnings) losses of unconsolidated affiliates (4.2) (6.2) Other (income) expense, net 0.1 (0.1) -------- -------- Total costs and expenses 191.8 173.2 Income (loss) before income taxes 112.1 71.3 Benefit from (provision for) income taxes (36.6) (20.3) -------- -------- Net income (loss) 75.5 51.0 Less: Net loss (income) attributable to noncontrolling interests 0.3 - -------- -------- Net income (loss) attributable to W.R. Grace & Co. shareholders $75.8 $51.0 ======== ======== W.R. Grace & Co. and Subsidiaries Consolidated Statements of Cash Flows Six Months Ended (Unaudited) June 30 June 30 ========================================= ======== ======== Amounts in millions 2011 2010 ------------------- -------- -------- OPERATING ACTIVITIES Net income (loss) $129.5 $107.6 Reconciliation to net cash provided by (used for) operating activities: Depreciation and amortization 58.9 59.7 Equity in earnings (losses) of unconsolidated affiliates (7.7) (11.3) {Benefit from) provision for income taxes 62.1 3.9 Income taxes (paid), net of refunds (34.2) (13.6) Defined benefit pension expense 31.6 38.3 Payments under defined benefit pension arrangements (212.1) (26.8) Changes in assets and liabilities, excluding effect of foreign currency translation: Trade accounts receivable (93.4) (49.2) Inventories (46.7) (33.7) Accounts payable 46.6 35.6 Other accruals and non-cash items (6.9) (27.2) -------- -------- Net cash provided by (used for) operating activities (72.3) 83.3 INVESTING ACTIVITIES Capital expenditures (57.7) (42.2) Transfer to restricted cash & cash equivalents (14.4) (81.5) Other investing activities 5.9 0.5 -------- -------- Net cash (provided by) used for investing activities (66.2) (123.2) FINANCING ACTIVITIES Net repayments under credit arrangements (1.1) (5.2) Proceeds from exercise of stock options 5.4 6.8 Other financing activities 2.9 1.1 -------- -------- Net cash (used for) financing activities 7.2 2.7 Effect of currency exchange rate changes on cash and cash equivalents 10.3 (14.2) -------- -------- Increase (Decrease) in cash & cash equiv. (121.0) (51.4) Cash & cash equivalents, beginning of period 1,015.7 893.0 -------- -------- Cash and cash equivalents, end of period $894.7 $841.6 ======== ======== About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring effort. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on Jan. 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: CEO Confident In Getting Positive Plan Ruling --------------------------------------------------------- Fred Festa, chief executive officer of W.R. Grace & Co., said during the July 26, 2011 investor conference call that the chemical company remains highly confident that the U.S. District Court for the District of Delaware will rule in favor of its plan of reorganization on all matters. The plan, co-proposed by the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative, appointed in Grace's bankruptcy case, is before the District Court pending appeals from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. Mr. Festa said the oral arguments for the appeals held on June 28 and 29 went exactly as the company expected. He added that the company was not surprised by any of the arguments or issues raised by the appellants. The company is now awaiting the District Court's decision on whether to affirm the plan and how it would rule on the appeals. According to Mr. Festa, the company has received some questions as whether it can emerge, with certain appeals outstanding. He said that if the District Court affirms Grace's plan, and rules in favor on the appeals, the appellants would have the choice to appeal further to the Third Circuit Court of Appeals. He said it is possible that the company could emerge with certain type of appeals outstanding, and cited, as an example, that the company may seek to emerge with the default interest issue on appeal, or with other issues on appeal that do not affect the resolution of the company's asbestos liability. "That decision would have to be made with consultation with our co-proponents," Mr. Festa added. "The bankruptcy has been an incredibly long process, and we are all eager to see it conclude as soon as possible. Our only real course at this point is to wait for the District Court ruling on affirmation and the appeals," Mr. Festa ended his speech at the conference call. Grace's shares of common stock traded at $51.38 as of July 27, 10:09 a.m. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring effort. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on Jan. 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Lenders Push For $1 Billion-Plus Chapter 11 Payout -------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that W.R. Grace & Co. lenders say a Philadelphia federal judge risks setting up a clash with the New York courts if he lets the specialty-chemical company exit bankruptcy without handing over an additional $140 million to them. U.S. District Judge Ronald Buckwalter could rule at any time on Grace's Chapter 11 plan, which pushes billions of dollars worth of asbestos damages off the company's balance sheet and leaves shareholders with a company worth billions. DBR notes that if the plan is approved as proposed, Grace will pay off $500 million worth of aged bank debt and add about $390 million worth of interest. The bank lenders want an additional $140 million, which is the rate called for under the contract in event of a default. If the lenders win, they could collect more than $1 billion on the loans. Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware approved on Jan. 31, 2011, the Joint Plan of Reorganization proposed by W.R. Grace & Co. and its debtor affiliates, the Official Committee of Equity Security Holders, the Official Committee of Asbestos-related Personal Injury Claimants, and the Future Claims Representative. Grace's Joint Plan will next be considered for confirmation by the United States District Court for the District of Delaware, a necessary step before Grace may exit Chapter 11. Appellants Bank Lender Group and the Official Committee of Unsecured Creditors, in support of their appeal and claim for interest payments, submitted with the U.S. District Court for the District of Delaware a memorandum of opinion issued on July 20, 2011, by Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York in In re General Growth Properties, Inc., Case No. 09-11977 (Bankr. S.D.N.Y.). Judge Gropper's July 20 opinion is a companion to the opinion he issued in General Growth's bankruptcy case on June 16, 2011. The Appellants direct the attention of District Court Judge, Ronald Buckwalter, to: (i) Judge Gropper's discussion of the equitable principles that are relevant to postpetition interest entitlement; and (ii) the discussion of payment of default interest at natural maturity. To recall, during the June 28-29, 2011 proceedings before Judge Buckwalter, the Bank Lenders' counsel said the difference as of April 30, 2011, in the amount of interest the Bank Lenders claim is owed and the amount of interest the Plan proposes to pay is $140 million. Moses Silverman, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, advised Judge Buckwalter that Judge Gropper's June 16 original opinion supports the Bank Lenders' contention that they are entitled to the default rate of interest under their prepetition loan agreements rather than something less. "The Debtors can pay and they should pay," Mr. Silverman argued. Their ability to pay is proof of solvency, and, Judge Fitzgerald erred in concluding that the Lenders failed to prove their entitlements, he further argued. He told Judge Buckwalter that there's no need to remand this matter to Judge Fitzgerald because he has the authority to direct the Debtors to pay the additional $140 million to the lenders. Plan Proponents Object The Plan Proponents composed of W.R. Grace & Co. and its debtor affiliates, the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative, opposed the supplemental authority presented by the Bank Lenders and the Creditors' Committee arguing that Judge Gropper's Opinion is merely a follow-up, a companion opinion containing the same rationale and holding as his June 16 opinion, which Appellants already submitted to the District Court. As previously shown by Plan Proponents at oral argument on June 29, 2011, the original General Growth opinion is inapplicable in the Debtors' cases because it involves a secured claim in a case where solvency was stipulated. The Plan Proponents point out that companion opinion is inapplicable for the same reasons. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring effort. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace and its debtor affiliates, with the support of the Official Committee of Asbestos Personal Injury Claimants, the Asbestos PI Future Claimants' Representative and the Official Committee of Equity Security Holders, have submitted a proposed Chapter 11 plan of reorganization. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. The Plan confirmation hearing wrapped up on Jan. 25. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) * Another Judge Differs With 5th Circuit's Reed Opinion ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that another court refused to dismiss a lawsuit the bankrupt initially didn't disclose in her bankruptcy papers. The result runs counter to a case in which the U.S. Court of Appeals in New Orleans heard reargument in May. Mr. Rochelle relates that the new case, in Nevada, involved a woman who was tardy in having her bankruptcy lawyer disclose a discrimination lawsuit against her former employer. The employer filed a motion to dismiss that U.S. District Judge Philip Pro denied on July 21. Judge Pro cited a similar 2006 case decided by the U.S. Court of Appeals in Cincinnati where the court said that outright dismissal of the suit "to the detriment of 'the victims of bankruptcy fraud is not an equitable application.'" Judge Pro allowed the suit go to forward, with any award capped at the amount necessary to pay creditors. Mr. Rochelle notes that the result by Pro is contrary to a ruling last year by the U.S. Court of Appeals in New Orleans in a case called Reed v. City of Arlington, where the three-judge panel led by Chief Judge Edith H. Jones dismissed the suit. The case was reargued in May before all actives judges on the 5th Circuit. The judges on the 5th Circuit have yet to issue their opinion and say whether the result reached by Jones will be changed. Judge Pro's case is Cannata v. Wyndham Worldwide Corp., 10-00068, U.S. District Court, District of Nevada (Las Vegas). * Fitch Says Leveraged Media Cos. Can Cover Higher Debt Costs ------------------------------------------------------------- According to a report published by Fitch Ratings, highly leveraged U.S. media companies will be able to cover annual interest expense over the coming years, even in a significantly higher interest rate environment. In a special report, 'The Impact of Rising Interest Rates on Leveraged Media Credits', Fitch gauges the tolerance and flexibility for rising debt costs in the credit profiles of highly leveraged media companies with large amounts of debt outstanding. Fitch analyzes Clear Channel Communications, Inc. (Clear Channel; IDR 'CCC', Stable Outlook), Nielsen Company B.V. (Nielsen, IDR 'B+', Positive Outlook), and Univision Communications, Inc. (Univision; IDR 'B', Stable Outlook). Although the re-emergence of negative macroeconomic news and sentiment is likely to forestall any moves to raise interest rates for the time being, Fitch believes such an increase is all but inevitable over the intermediate term. As discussed in the report, Fitch conducted a scenario analysis, evaluating the impact of rising rates and spreads on near-term maturities and unhedged floating rate debt. Fitch notes that Clear Channel is the most exposed to interest rate risk as it has the largest proportion of variable rate debt in its capital structure. However, Univision will experience the largest decline in coverage going forward due to the significant increase in cash interest expense from recent capital structure changes. Nielsen's interest coverage actually increases going forward from the repayment of high coupon debt with IPO proceeds. * 60 Allen Matkins Attorneys Named Among Super Lawyers 2011 ----------------------------------------------------------- Super Lawyers has released its list of outstanding attorneys for 2011 and 60 Allen Matkins attorneys have been named among the best in California. Richard Mallory, a founding partner of the firm resident in its San Francisco office, has also been named among the Top 100 Northern California Super Lawyers. Super Lawyers identifies the top five percent of attorneys in each state, as chosen by their peers and through the independent research of Law & Politics. The objective of the Super Lawyers selection process is to create a credible, comprehensive and diverse listing of outstanding attorneys that can be used as a resource to assist attorneys and sophisticated consumers in the search for legal counsel. Allen Matkins attorneys listed as Southern California Super Lawyers 2011 include Frederick Allen, John Allen, Robert Cathcart, Michael Cerrina, Alan Clark, Neil Gluck, Thomas Henning, Brian Leck, Gregg Loubier, Michael Matkins and Michael Ryan of the firm's Los Angeles office; Gerben Hoeksma, Anton Natsis, Cheryl Prell and John Tipton of the firm's Century City office; and Pamela Andes, Dwight Armstrong, Keith Paul Bishop, John Condas, Kenneth Curtis, William Devine, Drew Emmel, Lawrence Lewis, Gary McKitterick and Jason Weiss of the firm's Orange County office. Allen Matkins attorneys named among Northern California Super Lawyers 2011 are attorneys Raymond Buddie, David Cooke, John Gamble, Lee Gotshall-Maxon, Baldwin Lee, Nancy Lundeen, Richard Mallory, James Meeder, Sandi Nichols, Stephen Walters, Nicholas Waranoff and Robert Wyatt of the firm's San Francisco office; and David Blackwell and Michael Durkee of the firm's Walnut Creek office. Attorneys listed among San Diego Super Lawyers 2011 include George Berger, Randy Broberg, Jeffrey Chine, Ray Gliner, Valentine Hoy, Clark Libenson, David Osias, Dana Schiffman and Amy Wintersheimer Findley. The firm's attorneys listed among Southern California Rising Stars 2011 - those who are either 40 years of age or younger, or who have been practicing 10 or fewer years - include Kevin Ehrhart and Matthew Ertman of the firm's Los Angeles office; Scott Leipzig and Michael McFadden of the firm's Century City office; and Matthew Fogt, Brad Nielsen and Suzanne Skov of the firm's Orange County office. The firm's attorneys listed among Northern California Rising Stars 2011 include Rick Grady, Bryan Hawkins, Cathy Hongola, Mark Seifert and Nicholas Subias from the firm's San Francisco office. About Allen Matkins Allen Matkins Leck Gamble Mallory & Natsis LLP, founded in 1977, is a California-based law firm with approximately 220 attorneys in seven offices in four major metropolitan areas of California: Los Angeles, Orange County, San Francisco and San Diego. The firm's core specialties include real estate, real estate finance, construction, land use, natural resources, environmental, corporate and securities, intellectual property, joint ventures, taxation, bankruptcy and creditors' rights, employment and labor law, and dispute resolution and litigation in all these matters. For more than 30 years, Allen Matkins has helped clients turn opportunity and challenge into success by providing practical advice, innovative solutions and valuable business opportunities. * Gnarus Advisors LLC Opens Chicago Office ------------------------------------------ Gnarus Advisors LLC has opened an office in Chicago. The expansion into the Midwest continues Gnarus' overall strategy of providing broader and deeper levels of expertise for its clients across the country. Founded in 2007 by Managing Director Stephen Sellick, Gnarus now has more than 40 highly experienced consultants throughout the country. In addition to the new office in Chicago, Gnarus operates from its headquarters in Arlington, Virginia, and additional offices in Waltham, Massachusetts, Los Angeles and Palo Alto, California. "The launch of our new office in Chicago extends our geographic presence and provides a strong complement to our existing offices," Sellick said. "Our Midwest expansion includes the addition of a new Director who significantly enhances the depth of our expertise in key areas." Kirk Hartley joins the firm as a Director to lead the Chicago office operations with a base of nearly 30 years of experience in mass torts, asbestos and environmental issues arising inside and outside of the United States. Hartley's practice at Gnarus will focus on assignments in the growing and changing intersections between science, tort law, corporate law, and insurance. His experience also includes the increasing use of bankruptcies, schemes of arrangement, and corporate use of dedicated funds (or trusts) to resolve or limit underlying contingent liability claims. "Kirk's expertise in all phases of environmental, asbestos and mass tort claims extends significantly the scope of our expertise in those areas," Sellick said. "We also are pleased to add to Gnarus' knowledge of claims arising overseas because asbestos use and injuries are increasing around the globe, with asbestos- related deaths in Europe still many years short of peaks predicted by researchers." Gnarus said the addition of Eric Kirschner as a Principal at the firm. Kirschner will be based at Gnarus headquarters in Arlington, Virginia, and brings more than 20 years of experience in asbestos, pollution and health hazard (APH) insurance claim analysis and recovery. He has spent time both as a consultant designing, developing and programming numerous financial models and data structures to facilitate APH insurance recovery and as an attorney litigating APH claims. His unique blend of skills and experience deepens Gnarus' ability to help clients efficiently distill the key pieces of litigation management information out of vast amounts of data, and to make forward-looking decisions based on the needed data. Kirschner's expertise and blends of skills also are frequently put to work in the context of insurance claim recovery matters. "Kirk and Eric are experts in their fields and bring decades of experience to our clients," Sellick said. "I've known and worked with both of them for many years, and they've worked together on past projects. I'm very excited to welcome them to Gnarus as colleagues." About Gnarus Advisors LLC Corporations, government agencies and law firms call upon Gnarus Advisors LLC -- http://gnarusllc.com/-- to take on the challenges that arise from litigation, regulation and other sources of risk and uncertainty. Gnarus combines thorough economic analysis and advanced financial modeling with scientific and technical expertise to provide its clients with the resources and support they need across a wide spectrum of industries and disciplines. Gnarus experts and consultants are adept at solving complex business problems, identifying and mitigating risk, and supporting litigation efforts through in-depth research, analysis and quantitative modeling. The Gnarus team is comprised of hard working, experienced individuals who are recognized as leaders in their fields and bring years of academic, governmental and corporate experience to every client the company advises. * Weil, Gotshal & Manges Named No. 1 Bankruptcy Law Firm -------------------------------------------------------- Vault.com, the source of ratings, rankings and insight for law students and lawyers, has released its Practice Area Rankings for 2012, examining how law firms fare in areas ranging from Appellate Litigation to Tax. When it came to Bankruptcy Law, Weil, Gotshal & Manges was once again the firm ranked highest in the field by associates. The 2012 Vault Law Rankings are based on the results of the annual Vault Law Firm Associate Survey, in which 16,000 associates participated this year. In order to determine the Vault Practice Area Rankings, associates were able to vote for up to three firms they consider strongest in their own practice area, but were not permitted to vote for their own firm. Vault's rankings indicate the top firms in each area, as well the total percentage of votes, offering associates a tool to aid in their career search. "The law industry is not a one-size-fits-all industry, and for law students and laterals looking for the best match, Vault's practice area rankings provide another way to assess potential employers by understanding which firms excel in specific practice areas based on the perspectives of associates at peer law firms," said Mary Kate Sheridan, Vault.com Law Editor. The Top 10 Bankruptcy Law Firms Are: 1. Weil, Gotshal & Manges 2. Kirkland & Ellis 3. Skadden, Arps, Slate, Meagher & Flom 4. Akin Gump Strauss Hauer & Feld 5. Jones Day 6. Milbank, Tweed, Hadley & McCloy 7. Wachtell Lipton Rosen & Katz 8. Cadwalader, Wickersham & Taft 9. Davis Polk & Wardwell 10. White & Case According to survey responders Weil Gotshal & Manges was ranked No. 1 because of its "unmatched bankruptcy expertise." About Vault Vault.com is the source of employer and university rankings, ratings and reconnaissance for highly-credentialed, in-demand candidates. Vault.com is organized by profession, industry, company and school. Vault profiles, rankings and assessment tools deliver the insider perspective and career research candidates need to successfully match themselves to the best available jobs, employers and career opportunities. The Vault.com Web site features profiles on more than 4,500 employers, 4,000 universities and hundreds of industries and professions including the law, finance, accounting and consulting sectors. Founded in 1996, Vault.com is the only career resource of its kind and attracts more than 1000 employer and recruiter advertisers, more than 1200 school and institutional subscribers and millions of individual visitors and members. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In Re Forest Hills Apts, LLC Bankr. N.D. Ala. Case No. 11-03592 Chapter 11 Petition filed July 19, 2011 See http://bankrupt.com/misc/alnb11-03592.pdf In Re Mirantisa Properties LLC Bankr. D. Ariz. Case No. 11-20629 Chapter 11 Petition filed July 19, 2011 See http://bankrupt.com/misc/azb11-20629.pdf In Re Coppelia Inc. A California Corporation Bankr. C.D. Calif. Case No. 11-40784 Chapter 11 Petition filed July 19, 2011 See http://bankrupt.com/misc/cacb11-40784.pdf In Re Henry Barnes Bankr. C.D. Calif. Case No. 11-40902 Chapter 11 Petition filed July 19, 2011 In Re Wien Bakery LLC Bankr. C.D. Calif. Case No. 11-40874 Chapter 11 Petition filed July 19, 2011 See http://bankrupt.com/misc/cacb11-40874.pdf In Re James Appley Bankr. M.D. Fla. Case No. 11-13642 Chapter 11 Petition filed July 19, 2011 In Re Jim Appley's TRU-ARC, Inc. Bankr. M.D. Fla. Case No. 11-13639 Chapter 11 Petition filed July 19, 2011 See http://bankrupt.com/misc/flmb11-13639.pdf In Re Joseph Gopin Bankr. S.D. Fla. Case No. 11-30052 Chapter 11 Petition filed July 19, 2011 In Re Towmasters Of Port St. Lucie, Inc. Bankr. S.D. Fla. Case No. 11-29975 Chapter 11 Petition filed July 19, 2011 See http://bankrupt.com/misc/flsb11-29975.pdf In Re SSSK, LLC Bankr. E.D. La. Case No. 11-12320 Chapter 11 Petition filed July 19, 2011 See http://bankrupt.com/misc/laeb11-12320.pdf In Re 725 North Hickory Avenue, LLC Bankr. D. Md. Case No. 11-24863 Chapter 11 Petition filed July 19, 2011 See http://bankrupt.com/misc/mdb11-24863p.pdf See http://bankrupt.com/misc/mdb11-24863c.pdf In Re Daniel Rosman Bankr. D. Mass. Case No. 11-16780 Chapter 11 Petition filed July 19, 2011 In Re OQUENDO Office Warehouse, LLC Bankr. D. Nev. Case No. 11-21371 Chapter 11 Petition filed July 19, 2011 See http://bankrupt.com/misc/nvb11-21371.pdf In Re Salvador Macedo Bankr. D. Nev. Case No. 11-21354 Chapter 11 Petition filed July 19, 2011 In Re Tres Perros, LLC Bankr. D. Nev. Case No. 11-21363 Chapter 11 Petition filed July 19, 2011 See http://bankrupt.com/misc/nvb11-21363.pdf In Re Judy Thomas Bankr. D. N.H. Case No. 11-12776 Chapter 11 Petition filed July 19, 2011 In Re AB Marketing LLC Bankr. S.D. Ohio Case No. 11-14421 Chapter 11 Petition filed July 19, 2011 See http://bankrupt.com/misc/ohsb11-14421p.pdf See http://bankrupt.com/misc/ohsb11-14421c.pdf In Re C. Rigatti, Inc. Bankr. W.D. Pa. Case No. 11-24511 Chapter 11 Petition filed July 19, 2011 See http://bankrupt.com/misc/pawb11-24511p.pdf See http://bankrupt.com/misc/pawb11-24511c.pdf In Re Debra Tate Bankr. M.D. Tenn. Case No. 11-07073 Chapter 11 Petition filed July 19, 2011 In Re PHRP Enterprises Inc. dba Mr. Handyman Of Nashville dba Mr. Handyman Of Sumner Bankr. M.D. Tenn. Case No. 11-07056 Chapter 11 Petition filed July 19, 2011 See http://bankrupt.com/misc/tnmb11-07056.pdf In Re Ormandy Gabriel Bankr. W.D. Wash. Case No. 11-18525 Chapter 11 Petition filed July 19, 2011 In Re Daniel Schayes Bankr. D. Ariz. Case No. 11-20775 Chapter 11 Petition filed July 20, 2011 In Re Winfred Ruperto Bankr. D. Ariz. Case No. 11-20810 Chapter 11 Petition filed July 20, 2011 In Re Robert Psenka Bankr. W.D. Ark. Case No. 11-73349 Chapter 11 Petition filed July 20, 2011 In Re FX Signs Incorporated Bankr. C.D. Calif. Case No. 11-33450 Chapter 11 Petition filed July 20, 2011 See http://bankrupt.com/misc/cacb11-33450.pdf In Re Maria Manicucci Bankr. C.D. Calif. Case No. 11-18682 Chapter 11 Petition filed July 20, 2011 In Re Thomas Greanias Bankr. C.D. Calif. Case No. 11-41038 Chapter 11 Petition filed July 20, 2011 In Re Richard French Bankr. E.D. Calif. Case No. 11-92580 Chapter 11 Petition filed July 20, 2011 In Re Joseph Garcia Bankr. S.D. Calif. Case No. 11-11942 Chapter 11 Petition filed July 20, 2011 In Re Rodney Dakin Bankr. M.D. Fla. Case No. 11-13718 Chapter 11 Petition filed July 20, 2011 In Re Raymond Bell Bankr. N.D. Ga. Case No. 11-70942 Chapter 11 Petition filed July 20, 2011 In Re Jack Bataoel Bankr. N.D. Ill. Case No. 11-29784 Chapter 11 Petition filed July 20, 2011 In Re Salyersville Medical Center, LLC Bankr. E.D. Ky. Case No. 11-70468 Chapter 11 Petition filed July 20, 2011 See http://bankrupt.com/misc/kyeb11-70468.pdf In Re G.R.I.P Development, Inc. Bankr. E.D. La. Case No. 11-12335 Chapter 11 Petition filed July 20, 2011 See http://bankrupt.com/misc/laeb11-12335.pdf In Re Saulenas, Inc. Bankr. D. Mass. Case No. 11-43091 Chapter 11 Petition filed July 20, 2011 See http://bankrupt.com/misc/mab11-43091.pdf In Re Shamim Iftikhar Bankr. D. Md. Case No. 11-24937 Chapter 11 Petition filed July 20, 2011 In Re Shirley Trinh Bankr. D. Nev. Case No. 11-21412 Chapter 11 Petition filed July 20, 2011 In Re Gold Key, Inc. dba Network Connectors Bankr. N.D. Ohio Case No. 11-42159 Chapter 11 Petition filed July 20, 2011 See http://bankrupt.com/misc/ohnb11-42159.pdf In Re Anzach, LLC dba Andi-Zach Inc dba Skyline Chili Bankr. S.D. Ohio Case No. 11-14469 Chapter 11 Petition filed July 20, 2011 See http://bankrupt.com/misc/ohsb11-14469.pdf In Re Benny Edwards Bankr. N.D. Ala. Case No. 11-41880 Chapter 11 Petition filed July 21, 2011 In Re Fred Hunter Bankr. D. Ariz. Case No. 11-20939 Chapter 11 Petition filed July 21, 2011 In Re Michael Keeler Bankr. C.D. Calif. Case No. 11-20215 Chapter 11 Petition filed July 21, 2011 In Re U.S. Granite Bankr. E.D. Calif. Case No. 11-37904 Chapter 11 Petition filed July 21, 2011 filed pro se In Re James Partin Patricia Partin Bankr. D. Conn. Case No. 11-51471 Chapter 11 Petition filed July 21, 2011 In Re Daniel Beaudoin Bankr. M.D. Fla. Case No. 11-13783 Chapter 11 Petition filed July 21, 2011 In Re Michael Beaudoin Bankr. M.D. Fla. Case No. 11-13784 Chapter 11 Petition filed July 21, 2011 In Re Lovina Lehr Bankr. M.D. Fla. Case No. 11-13786 Chapter 11 Petition filed July 21, 2011 In Re Gerald Ross Bankr. S.D. Fla. Case No. 11-30193 Chapter 11 Petition filed July 21, 2011 In Re Alpha Mechanical LLC Bankr. D. Idaho Case No. 11-41202 Chapter 11 Petition filed July 21, 2011 See http://bankrupt.com/misc/idb11-41202.pdf In Re 3506 River Road LLC Bankr. N.D. Ill. Case No. 11-29873 Chapter 11 Petition filed July 21, 2011 See http://bankrupt.com/misc/ilnb11-29873.pdf In Re Paramount Land Holdings, LLC aka Paramount Land Holdings, LLC (MI) Bankr. E.D. Mich. Case No. 11-59837 Chapter 11 Petition filed July 21, 2011 See http://bankrupt.com/misc/mieb11-59837p.pdf See http://bankrupt.com/misc/mieb11-59837c.pdf In Re J. J. Hill Brace and Limb Co., Inc. Bankr. S.D. Miss. Case No. 11-51669 Chapter 11 Petition filed July 21, 2011 See http://bankrupt.com/misc/mssb11-51669p.pdf See http://bankrupt.com/misc/mssb11-51669c.pdf In Re Daniel Newcomer Bankr. D. N.J. Case No. 11-31730 Chapter 11 Petition filed July 21, 2011 In Re Edward Yoder Bankr. E.D. Va. Case No. 11-73305 Chapter 11 Petition filed July 21, 2011 In Re John Beard Bankr. E.D. Va. Case No. 11-15341 Chapter 11 Petition filed July 21, 2011 In Re Linda Mackay Bankr. C.D. Calif. Case No. 11-20298 Chapter 11 Petition filed July 22, 2011 In Re Mario Castillo Bankr. C.D. Calif. Case No. 11-41356 Chapter 11 Petition filed July 22, 2011 In Re Kenneth Myers Bankr. E.D. Calif. Case No. 11-92601 Chapter 11 Petition filed July 22, 2011 In Re Richard Taguinod Bankr. N.D. Calif. Case No. 11-47746 Chapter 11 Petition filed July 22, 2011 In Re Ashley Townsend Mary Townsend Bankr. D. Colo. Case No. 11-27459 Chapter 11 Petition filed July 22, 2011 In Re SG Crown Plaza, Inc. fdba Knights Inn fdba Ramada Conference Center dba Cavalier's Resort Shelbyville dba Cavalier's Resort & Conference Center Bankr. N.D. Ill. Case No. 11-29970 Chapter 11 Petition filed July 22, 2011 See http://bankrupt.com/misc/ilnb11-29970.pdf In Re Stephen Roylance Pamela Roylance Bankr. D. Md. Case No. 11-25127 Chapter 11 Petition filed July 22, 2011 In Re Patrick Hays Bankr. N.D. Miss. Case No. 11-13299 Chapter 11 Petition filed July 22, 2011 In Re Alfonso Amaya Bankr. D. Nev. Case No. 11-21561 Chapter 11 Petition filed July 22, 2011 In Re Morton Winer Bankr. D. Nev. Case No. 11-21507 Chapter 11 Petition filed July 22, 2011 In Re G&G Flight Service, Inc. Bankr. D. N.J. Case No. 11-31920 Chapter 11 Petition filed July 22, 2011 See http://bankrupt.com/misc/njb11-31920.pdf In Re Ralph Brutsche Bankr. D. N.M. Case No. 11-13326 Chapter 11 Petition filed July 22, 2011 In Re Batten Ceramic Tile, Inc. Bankr. E.D. N.C. Case No. 11-05592 Chapter 11 Petition filed July 22, 2011 See http://bankrupt.com/misc/nceb11-05592.pdf In Re Crockett Street Bottle Shop, Inc. Bankr. N.D. Texas Case No. 11-44090 Chapter 11 Petition filed July 22, 2011 See http://bankrupt.com/misc/txnb11-44090.pdf In Re Harmohinder Bhatia Bankr. S.D. Texas Case No. 11-36209 Chapter 11 Petition filed July 22, 2011 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ 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, 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 ***