/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110802.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, August 2, 2011, Vol. 15, No. 212 Headlines 155 EAST TROPICANA: Seeks Restructuring Through Chapter 11 5TH AVENUE: Se San Diego Hotel Sells for $49 Million ALLIED IRISH: At Least EUR250-Mil. in Notes Accepted for Purchase ALLSCRIPTS HEALTHCARE: S&P Raises Corp. Credit Rating to 'BB+' ALROSE KING DAVID: Allegria Hotel Owner Sent to Chapter 11 AMBAC FINANCIAL: Committee Taps Whyte Hirschboeck as Wisc. Counsel AMERICAN REMANUFACTURERS: Judge Slams Trustee for 'Baseless' Suits AMERICAN REPROGRAPHICS: S&P Lowers Corp. Credit Rating to 'B+' AMERIGAS PARTNERS: Fitch Expects to Rate $450MM Notes at 'BB+' AMN HEALTHCARE: S&P Keeps B+ Corp. Credit Rating; Outlook Stable APPLETON PAPERS: Marsuw and WinCup Chiefs Named to Board ATCONTACT COMMS: Colorado Court Interprets Sec. 365(d)(3) AVION POINT: Taps Wolff Hill as Bankruptcy Counsel BANNING LEWIS: Colorado Springs Renews Plea for Colorado Transfer BION ENVIRONMENTAL: CEO Agrees to Extend Term Until 2014 BION ENVIRONMENTAL: Unveils Technology to Protect Chesapeake Bay BLUEGREEN CORP: Six Directors Elected at Annual Meeting BORDERS GROUP: Seeks to Sell Intellectual Property Assets BORDERS GROUP: Proposes Protocol for Objecting to Claims BORDERS GROUP: Proposes Streambank as IP Consultant CALUMET SPECIALTY: Moody's Says Purchase Could Pressure Rating CARDTRONICS INC: S&P Raises CCR to 'BB'; Outlook Stable CELL THERAPEUTICS: Posts $17 Million Net Loss in Q2 2011 CENTER COURT: Access to Montecito Cash Collateral Until December CHARBEL FAHED: Inks Stipulation With PNC Bank Over Property Use CHARLESTON ASSOCIATES: Committee Wants to File Own Plan CHART INDUSTRIES: S&P Rates $230-Mil. Sr. Sub. Notes at 'B+' CHINA CABLECOM: UHY Vocation Raises Going Concern Doubt CHINA VILLAGE: Michael Isaacs Appointed as Resolution Advocate CHINA VILLAGE: Anew Law Approved to Assist with Tenant Eviction CHIQUITA BRANDS: S&P Rates $480-Mil. Credit Facilities at 'BB-' CHRISTIAN BROTHERS: Seeks More Time to Propose Payment Plan CHRYSLER LLC: Ohio County Claim Reclassified as General Unsecured COMMERCIAL VEHICLE: Incurs $2.17 Million Net Loss in Q2 COMPLETE PRODUCTION: S&P Raises Corporate Credit Rating to 'BB-' CONSOLIDATED HORTICULTURE: Removal Period Extended Until Dec. 30 CORUS BANKSHARES: Has September Plan Confirmation Hearing CROATAN SURF: Bankr. Administrator Opposes Plan Confirmation CRYSTAL CATHEDRAL: Says It Won't Sell, Aims to Raise $50-Mil. CRYSTAL CATHEDRAL: U.S. Trustee Asked to Probe Board Shake-up DAZ VINEYARDS: Silicon Valley Opposes Disclosure Statement DELTA PETROLEUM: 2C Well Begins Hydrocarbons Production DIGITILITI INC: R.M. Rickenbach Resigns from Board DIRECTBUY HOLDINGS: S&P Keeps 'B' Corp. Rating on Watch Negative DOT VN: Registrations of Vietnamese IDNs Exceed 294,000 DRYSHIPS INC: Inks Definitive Pact to Acquire OceanFreight DULCES ARBOR: Wants to Obtain DIP Loan to Pay Pierce & Little DYNEGY INC: Judge Denies Creditors' Bid to Block Restructuring EASTMAN KODAK: To Sell Key Patents; Adopts Poison Pill EASTMAN KODAK: Incurs $179 Million Net Loss in June 30 Quarter FIRST FEDERAL: Reports $2.2 Million Net Loss in Q2 Ended June 30 FIRST PHYSICIANS: Rural Hospital Inks Pacts to Acquire SPMC FIRST PHYSICIANS: Completes Transition to BPO Provider GENERAL MARITIME: Incurs $23.95 Million Net Loss in Q2 GLC LIMITED: Donnan Denies All Allegations of Wrongdoing GLOBAL CROSSING: Incurs $34 Million Net Loss in Second Quarter GLOBAL SHIP: To Hold Annual Meeting of Shareholders on Aug. 31 GRUBB & ELLIS: CDCF II Discloses 8.9% Equity Stake HARVEST OAKS: LNR Partners Loses Bid to Resume Foreclosure HAWAII MEDICAL: Combined Hearing on Plan on Aug. 31 HCA HOLDINGS: Authorized Common Shares Hiked to 1.8 Billion HCA HOLDINGS: To Issue $5 Million of Senior Notes HCA INC: Fitch Says Upgrade of Unsecured Debt Possible HEARUSA INC: Siemens Hearing Submits Highest Bid for Firm HEATHERWOOD HOLDINGS: Covenant Restricts Use of Golf Course HIDDEN VALLEY: N.J. Appeals Court Rules on Ex-Employees' Suit HORIZON LINES: Posts $5.42 Million Net Loss in Q2 Ended June 26 HYDROGENICS CORP: Posts $2.2 Million Net Loss in Q2 2011 ISAACSON STRUCTURAL: Cafe Street Loan Approved on a Final Basis JETBLUE AIRWAYS: Reports $25 Million Net Income in Second Quarter JETBLUE AIRWAYS: Provides Third Quarter Financial Outlook JAMES DONNAN: Denies All Allegations of Wrongdoing JEFFERSON COUNTY: Meeting to Consider Fin'l Options Resumes Aug. 4 L-1 IDENTITY: S&P Withdraws 'B' Corporate Credit Rating L-3 COMMUNICATIONS: Spin-off Expected to Be Neutral to Ratings LA JOLLA: Has 52.27 Million Outstanding Common Shares LAW ENFORCEMENT: $1.1-Mil. Jury Award to Wortley Prompted Ch. 11 LEGAL XTRANET: Suit v. AT&T Mgmt Survives Motion to Dismiss LEGAL XTRANET: Bankr. Ct. Affirms Remand Order in AT&T Dispute LEVEL 3: Incurs $181 Million Net Loss in Second Quarter LIFECARE HOLDINGS: Removes HHH from LTACHs Acquisition Agreement LIFE FORCE ARTS: Files for Chapter 11 Bankruptcy Protection LINDEN PONDS: Judge Signs Off on Linden Ponds Plan-Support Deal LOS ANGELES DODGERS: Fox Sports Objecting to Blackstone Work LOS ANGELES DODGERS: Counsel Has Conflicting Interests, MLB Says LOS ANGELES DODGERS: Souvenir Seller Wants Decision on Contract MARCO POLO: Voluntary Chapter 11 Case Summary MEDCORP INC: Huntington Bank Seeks Case Dismissal MEDICURE INC: Dawson Reimer Appointed President and COO METAL STORM: Eligible for R&D Tax Concession Program METAL STORM: Shareholders OK Issuance of Shares to Dutchess METAL STORM: Signs Memorandum of Understanding with TASER METROPARK USA: To Sell Marks for $175,000; Auction Cancelled MICROVISION INC: Posts $9.2 Million Net Loss in Q2 2011 MOMENTIVE PERFORMANCE: Registers $525.68MM Springing Lien Notes MORTGAGES LTD: Bankr. Judge Issues Bench Warrant Against Investor MSC SOFTWARE: S&P Assigns Prelim. 'B+' Corporate Credit Rating MSR RESORT: Paulson-Winthrop Resorts Settle with Miller Buckfire MSR RESORT: Reaches Deal With Miller Buckfire for $2 Million MSR RESORT: Court Authorizes Committee to Retain Jefferies & Co. NEXTWAVE WIRELESS: Enters into Forbearance Deal With Noteholders NORTHCORE TECHNOLOGIES: Manuweb to Cross Sell Asset Mgt. Solutions OCONEE REGIONAL: S&P Lowers Rating on Revenue Bonds to 'BB' OLD CORKSCREW: Case Summary & 20 Largest Unsecured Creditors OPTI CANADA: Common Shares to be Delisted from TSX OSI RESTAURANT: Deregisters Unsold Securities PACIFIC AVENUE: Blue Air Threats to Foreclose Complex PACIFIC RIM: Posts $4 Million Net Loss in Year Ended April 30 PALMAS COUNTRY: Court Denies Confirmation of 2nd Amended Plan PALM HARBOR: Expects to File Chapter 11 Plan This Week PATRIOT GLASS: Files for Chapter 11 Bankruptcy Protection PERKINS & MARIE: Taps Deloitte Tax as Tax Services Provider PHILADELPHIA ORCHESTRA: Nero Aims to Probe Annenberg Foundation PILGRIM'S PRIDE: Dist. Court Dismisses David Buchanan Suit PONTIAC, MI: Closes Police Department Amid Spending Cuts QUANTUM CORP: Incurs $5.22 Million Net Loss in First Quarter QUEPASA CORP: Registers 5 Million Shares of Common Stock QUINCY MEDICAL: U.S. Trustee Blocks Request to Pay Consultants RENO-SPARKS INDIAN: Fitch Affirms Long-Term IDR at 'BB' ROCK & REPUBLIC: Great American Reports Record Response to Auction RYLAND GROUP: Incurs $10.71 Million Net Loss in Q2 SAINT VINCENTS: Cancels Auction for Staten Island Assets SAINTS MEDICAL: Fitch Maintains RWE on 'BB+'-Rated Revenue Bonds SALON MEDIA: Inks Employment Agreement with David Talbot SB PARTNERS: Incurs $232,853 Net Loss in June 30 Quarter SCOVILL FASTENERS: Taps Hays Financial as Trustee Accountant SEAHAWK DRILLING: Court OKs ADR for $9-Mil. in PI Claims SEAHAWK DRILLING: Wants Aucoin Claims as Claims Consultant SNL FINANCIAL: S&P Assigns Prelim. 'B' Corporate Credit Rating SOLAR DRIVE: Case Summary & 10 Largest Unsecured Creditors SOUTH BAY EXPRESSWAY: San Diego Assn. to Acquire Toll Road SPANSION INC: Court Flips Ruling on Apple's Patent License Rights STELLAR GT: The Georgian Receivership Extended Until Oct. 31 STYLEMASTER INC: Stern May Affect Circuit Split on Res Judicata TESORO CORP: Fitch Affirms Issuer Default Rating at 'BB' TOWNSENDS INC: Closes Crestwood Facility, Leaves 476 Jobless TOWNSENDS INC: Can Hire Peter Gnatowski as Financial Analyst TRIKEENAN TILEWORKS: Losses Bid to Remain in Hornell TRIUS THERAPEUTICS: Inks Collaboration Agreement with Bayer UNITED CONTINENTAL: Protests EU's Carbon Emission Program UNITED CONTINENTAL: Says Demand to China Routes Strong UNITED CONTINENTAL: Signs Distribution Deal With Travelocity UNIVERSAL BIOENERGY: Incurs $2.0 Million Net Loss in 2010 VALITAS HEALTH: S&P Assigns 'B' Corporate Credit Rating VALLEJO, CA: Wins Court Approval of Reorganization Plan WARNER MUSIC: Inks Various Financing Agreements WARNER MUSIC: Announces Final Results of Notes Tender Offers WARNER MUSIC: Bain Capital Does Not Own Common Shares WARNER MUSIC: Thomas Lee Does Not Own Common Shares WASHINGTON MUTUAL: Creditors Object to Proposed Investors' Panel WATERSCAPE RESORT: Can Access Cash Collateral Until Aug. 18 WAXESS HOLDINGS: Now Known as AirTouch Communications WINDHAM CRYSTAL: Case Summary & 14 Largest Unsecured Creditors YELLOWSTONE CLUB: Founder Starts Campaign to Cancel $40MM Judgment YRC WORLDWIDE: Moody's Revises PDR to Caa2\LD * Up to 10 Chicken Firms Face Potential Bankruptcy Filing * Fitch Says Free Cash Flow Efficiency Declining for FBT Issuers * Large Companies With Insolvent Balance Sheets ********* 155 EAST TROPICANA: Seeks Restructuring Through Chapter 11 ---------------------------------------------------------- 155 East Tropicana LLC will seek a financial restructuring of its current debt through a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code which was filed Aug. 1 with the United States Bankruptcy Court for the District of Nevada. The Company had been in extensive negotiations with its primary bondholder, which purchased approximately 98% of the company's debt at a substantial discount. The Company no longer believes a pre-negotiated restructuring is possible, and has therefore elected to commence the Chapter 11 process immediately. All hotel and casino operations will continue to operate as usual during the Chapter 11 process, including with respect to employees, customers and vendors. The Company stated, "We regret that we have been unable to reach an acceptable settlement with our new bondholder. We are confident that an orderly and transparent Chapter 11 process will provide the Company with the opportunity to properly restructure its balance sheet and emerge as a stronger business, while also continuing to operate with no disruption to our customers, employees and vendors. Absent the significant debt payments we're currently obligated to pay, Hooters Casino Hotel is a profitable, successful business and we look forward to completing this process to return our entire focus to running our business and serving our guests." The Company also stated: "This action in no way affects the operation of the more than 430 Hooters Restaurants in 44 states and 27 countries which are owned or franchised by Atlanta based Hooters of America, LLC." The filing is planned in order to protect the Hotel Casino's assets and ongoing hotel services to its guests. Chapter 11 of the U.S. Bankruptcy Code allows a company to continue operating its business and managing its assets in the ordinary course of business. The U.S. Congress enacted Chapter 11 to encourage and enable a debtor business to continue to operate as a going concern, to preserve jobs and to maximize the recovery for all stakeholders. About Hooters Casino Hotel The world's first Hooters Casino Hotel -- http://www.hooterscasinohotel.com/-- features 696 rooms and suites and is conveniently located one block from the Las Vegas Strip and across Tropicana Blvd. from MGM Grand. The property offers a mix of casual dining, entertainment and nightlife attractions, including eight restaurants and bars. The 30,000- square-foot "Hooters"-themed casino floor offers approximately 590 slot and video poker machines and 20 table games. Hooters Casino Hotel is owned by 155 East Tropicana, LLC. 5TH AVENUE: Se San Diego Hotel Sells for $49 Million ---------------------------------------------------- Se San Diego Hotel was sold for $49 million in a Section 363 bankruptcy sale. Prism Hotels & Resorts served as the property's turnaround operator and court-appointed Chief Restructuring Officer to the Debtor-in-Possession, 5th Avenue Partners, LLC. The property was purchased following an extensive marketing campaign by global commercial real estate firm CB Richard Ellis. "The sale of the Se San Diego Hotel was particularly complex, involving an international bank and a non-local servicer - not to mention the still difficult economic climate facing the southern California real estate market. Through our involvement as both turnaround operator and court-appointed Chief Restructuring Officer during the bankruptcy sale, Prism Hotels & Resorts helped bring order and resolution to the courts quickly, maximizing the hotel's value and ultimately resulting in a successful sale," said Steve Van, chief executive officer of Prism Hotels & Resorts. The Chief Restructuring Officer role was handled by PHC Dallas, LLC, an affiliate of Prism Hotels & Resorts. The 23-story, 184-room Se San Diego Hotel, located at 1047 Fifth Avenue in downtown San Diego, includes 31,300 square feet of adjacent retail space currently under 15-year lease by House of Blues, as well as the popular Suite & Tender restaurant and Siren rooftop pool and lounge. About Prism Hotels & Resorts Dallas-based Prism Hotels & Resorts -- http://www.prismhotels.com/ -- is one of the fastest growing full-service hotel investment, management and development companies in the United States. The company currently manages more than 7,500 rooms for multiple owners including urban, suburban and resort destinations. Prism is approved to manage all major brands as well as has extensive experience with independent destination hotels. About 5th Avenue Partners Newport Beach, California-based 5th Avenue Partners owned and operated the Se San Diego hotel located in San Diego, California's financial district. The hotel has 184 guestrooms, a 5,500-square- foot spa, a restaurant, rooftop bar and lounge, 20,000 square feet of banquet space and meeting rooms, an outdoor rooftop pool, fitness center and 23 unsold condominium units. 5th Avenue also owned next to the Se San Diego hotel building a 31,000-square-foot building, which it leases to the House of Blues music club. 5th Avenue Partners, LLC, filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 10-18667) on June 25, 2010. Marc J. Winthrop, Esq., at Winthrop Couchot PC, in Newport Beach, California, assists the Company in its restructuring effort. Blitz Lee & Company serves as its accountant. The Company estimated assets at $10 million to $50 million and debts at $50 million to $100 million. The Official Committee of Unsecured Creditors tapped Baker & McKenzie LLP as counsel. ALLIED IRISH: At Least EUR250-Mil. in Notes Accepted for Purchase ----------------------------------------------------------------- Allied Irish Banks, p.l.c., on May 13, 2011, that it was inviting all holders of its notes to (i) tender any and all of the Notes for purchase by the Bank for cash, and (ii) consent to certain modifications of the terms of the Notes. The AIB Offer was made upon the terms and subject to the conditions contained in the tender and consent memorandum May 13, 2011. In conjunction with the invitation to tender any and all of the Notes, the Bank invited holders of each Series of Notes to consider, and, if thought fit, pass, the relevant Extraordinary Resolution in relation to certain modifications of the terms of each Series of the Notes as further described in the Tender and Consent Memorandum. The Bank announced the aggregate nominal amount of each Series of Notes accepted for purchase pursuant to the relevant Offer. Aggregate Nominal Amount of Notes Accepted Description of Notes for Purchase -------------------- ------------------------ EUR400,000,000 Subordinated Callable Step-Up Floating Rate Notes due 2015 EUR47,936,000 GBP700,000,000 Callable Dated Subordinated Fixed to Floating Rate Notes due July 2023 GBP35,350,000 EUR419,070,000 10.75 per cent. Subordinated Notes due 2017 EUR208,705,000 Payment of the Purchase Price in respect of Notes validly tendered in the relevant Offer and accepted for purchase is expected to be made on July 25, 2011. A full-text copy of the filing is available for free at: http://is.gd/TrruDA About Allied Irish Banks, p.l.c. Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a major commercial bank based in Ireland. It has an extensive branch network across the country, a head office in Dublin and a capital markets operation based in the International Financial Services Centre in Dublin. AIB also has retail and corporate businesses in the UK, offices in Europe and a subsidiary company in the Isle of Man and Jersey (Channel Islands). Since the onset of the global and Irish financial crisis, AIB's relationship with the Irish Government has changed significantly. As at Dec. 31, 2010, the Government, through the National Pension Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary shares of the Company (the share of the voting rights at shareholders' general meetings), 10,489,899,564 convertible non- voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On April 8, 2011, the NPRFC converted the total outstanding amount of CNV shares into 10,489,899,564 ordinary shares of AIB, thereby increasing its holding to 92.8% of the ordinary share capital. In addition to its shareholders' interests, the Government's relationship with AIB is reflected through formal and informal oversight by the Minister and the Department of Finance and the Central Bank of Ireland, representation on the Board of Directors (three non-executive directors are Government nominees), participation in NAMA, and otherwise. As reported by the TCR on May 31, 2011, KPMG, in Dublin, Ireland, noted that there are a number of material economic, political and market risks and uncertainties that impact the Irish banking system, including the Company's continued ability to access funding from the Eurosystem and the Irish Central Bank to meet its liquidity requirements, that raise substantial doubt about the Company's ability to continue as a going concern. The Company reported a net loss of EUR10.16 billion on EUR1.84 billion of interest income for 2010, compared with a net loss of EUR2.33 billion on $2.87 billion of interest income for 2009. The Company's balance sheet at Dec. 31, 2010, showed EUR145.2 billion in total assets, EUR140.9 billion in total liabilities, and stockholders' equity of EUR4.3 billion. ALLSCRIPTS HEALTHCARE: S&P Raises Corp. Credit Rating to 'BB+' -------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Chicago-based Allscripts Healthcare Solutions Inc. to 'BB+' from 'BB'. The outlook is stable. "At the same time, we raised the issue-level rating on the company's first-lien credit facility to 'BBB' from 'BBB-', in conjunction with the corporate credit rating change. The recovery rating on the first-lien facility remains unchanged at '1', indicating our expectation of very high (90%-100%) recovery for lenders in the event of a payment default," S&P related. "The upgrade reflects our improved view of Allscripts' financial risk profile from significant to intermediate, characterized by the ongoing debt reductions and lower leverage," said Standard & Poor's credit analyst Andrew Chang, "as well as our expectation that the financial policy will remain consistent with current levels." ALROSE KING DAVID: Allegria Hotel Owner Sent to Chapter 11 ---------------------------------------------------------- Alrose King David LLC filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 11-75361). Adam Pincus at The Real Deal Online reports that Midtown-based Alrose Group placed the real estate underlying the high-end Allegria Hotel & Spa in Long Beach, Long Island, under Chapter 11 in Brooklyn. According to the report, the Alrose Group's special entity Alrose King David, which owns the 143-room, beachfront hotel property at 80 West Broadway in Long Beach, had between $10 million and $50 million in both debts and assets. The Real Deal notes that he hotel is not in bankruptcy and is operating normally, Allen Rosenberg, president of Alrose Group, said. The bankruptcy filing "is against the real estate entity that owns the hotel; it has nothing to do with the hotel operations," Mr. Rosenberg said. Yet Mr. Rosenberg is under pressure from a number of lenders, including Capital One which was offering last month to sell the $4.9 million note secured by Alrose Group's commercial condominium at the Indigo Condominium at 125 West 21st Street, between Sixth and Seventh avenues, according to the report. Mr. Rosenberg, the report relates, said he was current on loan payments at Allegria and was not in default. However several sources speaking on background disputed that. Mr. Rosenberg declined to say why he filed for bankruptcy protection. Bankruptcy records show 51 creditors, including Brooklyn Federal Savings and dozens of contractors, from Boro Plaster in Mineola to Trinity Interiors in Matawan, N.J listed in court records. The report notes a $30 million note held by Brooklyn Federal savings and secured by the hotel property is in default. AMBAC FINANCIAL: Committee Taps Whyte Hirschboeck as Wisc. Counsel ------------------------------------------------------------------ The Official Committee of Unsecured Creditors seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Whyte Hirschboeck Dudeck S.C. to serve as its special counsel in the Circuit Court for Dane County, in Wisconsin, nunc pro tunc to July 15, 2011. As the Creditor Committee's special counsel, Whyte Hirschboeck will: (i) appear on the Creditors Committee's behalf in Ambac Assurance Corporation's rehabilitation proceedings before the Wisconsin Court; (ii) draft and file legal documents; (iii) provide advice to the Creditors Committee; (iv) research and analyze issues involving Wisconsin law; and (v) perform other tasks as requested by the Creditors Committee. Whyte Hirschboeck's professionals will be paid according to the firm's current customary hourly rates: Title Rate per Hour ----- ------------- Shareholders and counsel $325 to $550 Associates $220 to $325 Paraprofessionals $130 to $195 Thomas M. Pyper, Esq., a shareholder at Whyte Hirschboeck Dudek S.C., in Madison, Wisconsin -- tpyper@whdlaw.com -- disclosed that his firm represented or represents certain parties in matters unrelated to the Debtor, a schedule of which parties is available for free at: http://bankrupt.com/misc/Ambac_WhyteClients.pdf Mr. Pyper further disclosed that Whyte Hirschboeck represented BAC Home Loans Servicing, LP f/k/a Countrywide Home Loans Servicing LP; Countrywide Home Loans Inc. and Bank of America with respect to the Wisconsin Proceedings. Whyte Hirschboeck's representation on those matters, he noted, was limited to: (i) providing analysis and advice regarding the procedural and substantive law governing the Wisconsin Proceedings; (ii) filing a pleading on behalf of BACHLS and CHL joining objections made by two other parties to AAC's Rehabilitation Plan; and (iii) attending and monitoring the hearing on the Rehabilitation Plan but not actively participating at the hearing. Whyte Hirschboeck is not participating in any of the appeals arising out of the Rehabilitation Plan or the Wisconsin Proceedings, nor is the firm currently providing any services to the mentioned parties in connection with the Wisconsin Proceedings, he clarified. Notwithstanding those disclosures, Whyte Hirschboeck is a "disinterested person," as that term is defined under Section 101(14) of the Bankruptcy Code, Mr. Pyper maintained. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMERICAN REMANUFACTURERS: Judge Slams Trustee for 'Baseless' Suits ------------------------------------------------------------------ Pete Brush at Bankruptcy Law360 reports that a chapter 7 trustee tasked with recovering assets for American Remanufacturing Inc. was slammed by U.S. Bankruptcy Judge Peter J. Walsh Thursday for pursuing "baseless" clawback cases seeking more than $10 million from Autozone Inc. Law360 relates that Judge Walsh threw out the second of two "unreasonable" adversary suits -- having chucked the first in June -- and ordered trustee Montague S. Claybrook and one of his lawyers, Alan L. Frank, to pay the Memphis, Tenn.-based auto parts retailer more than $35,000. About American Remanufacturers Headquartered in Anaheim, California, American Remanufacturers, Inc., and its affiliates are privately held companies that produce remanufactured automotive components that include "half shaft" axles, brake calipers, and steering components. The Debtors are the second largest full-line manufacturer of undercar automotive parts in the United States. American Remanufacturers with its nine affiliates filed for chapter 11 protection (Bankr. D. Del. Lead Case No. 05-20022) on Nov. 7, 2005, estimating assets between $10 million to $50 million and debts at more than $100 million. Attorneys at Young Conaway Stargatt & Taylor LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP represented the Debtors. The Court converted the Debtors' chapter 11 cases to a chapter 7 liquidation proceeding on Nov. 18, 2005. Montague S. Claybrook is the chapter 7 Trustee for the Debtors' estates. AMERICAN REPROGRAPHICS: S&P Lowers Corp. Credit Rating to 'B+' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered all ratings, including the corporate credit rating, on Walnut Creek, Calif.-based reprographics and printing company American Reprographics Company (ARC) to 'B+' from 'BB-', as well as those of its subsidiary American Reprographics Co. LLC. The rating outlook is stable. "In addition, we are lowering the ratings on the company's 10.5% unsecured notes to 'B+', from 'BB-'. The recovery rating on these notes remains at '4', indicating our expectation of average (30% to 50%) recovery for noteholders in the event of a payment default," S&P related. "The 'B+' rating reflects our expectation that ARC's revenue and cash flow will remain highly cyclical and will not recover in the near term," said Standard & Poor's credit analyst Tulip Lim. ARC has a leading market position in the fragmented reprography market and has significant cost advantages from its nationwide presence. "However, we consider its business profile to be weak because its end markets are highly concentrated (around 75% of net sales are derived from printing for the architectural, engineering, and construction segments) and the company has a high geographic concentration in California. In addition, ARC's operating performance is linked to the U.S. construction market, particularly that of nonresidential construction (approximately 70% of ARC's total revenue is from nonresidential projects), and there is little visibility regarding the timeframe for a recovery in this sector," S&P said. "Our latest economic forecast projects nonresidential construction to decline 1% in 2011, and to continue to decline another 3% in 2012 (see 'U.S. Economic Forecast: It's Not Over Yet,' published July 18, 2011, on RatingsDirect). Based on ARC's concentration of business in California, we expect the company's revenue could decline at a low- to mid-single-digit percent rate in 2011 and 2012, and EBITDA will decline somewhat faster because the company has some fixed costs," S&P related. In the first quarter, ARC's revenue declined 5% while EBITDA declined 29% year over year. "We believe the company will continue to experience soft activity levels. Adjusted leverage was roughly 4.1x for the 12 months ended March 31, 2011. The company's unadjusted interest coverage was roughly 2.6x at March 31, 2011. We believe leverage could continue to rise because of further declines in EBITDA, but that it will remain in line with the indicative adjusted debt-to-EBITDA ratio range of 4x to 5x for an aggressive financial risk profile category under our criteria. The company generated moderate positive discretionary cash flow for the 12 months ended March 31, 2011, converting 54.3% of EBITDA to discretionary cash flow, but discretionary cash flow for the period declined 52% from the same period last year. Although we believe that ARC's discretionary cash flow could continue to contract, we expect ARC will continue to generate positive discretionary cash flow over the near term," S&P sai9d. The outlook is stable. "Despite our expectation that the company's operating performance will remain soft over the near-term, we believe it will continue to generate moderate positive discretionary cash flow, continue to have adequate liquidity, and maintain coverage above 2x. We could review the rating for another downgrade if the company's discretionary cash flow meaningfully contracts, if the company does not generate moderate positive discretionary cash flow in the next three quarters of 2011, or if coverage falls below 2x. In addition, we could review the rating if the company's margin of compliance falls below 7% and it has outstanding borrowings under its revolving credit facility, but its cash balance does not more than cover this balance and the company's near-term liquidity needs. Although unlikely over the next year, we could consider raising the rating if it becomes clear that the commercial construction sector has bottomed, the company's operating performance improves, leverage does not materially increase, and the company establishes at least a 15% cushion of compliance with its financial covenants," S&P added. AMERIGAS PARTNERS: Fitch Expects to Rate $450MM Notes at 'BB+' -------------------------------------------------------------- Fitch Ratings expects to assign a 'BB+' rating to AmeriGas Partners, L.P. (APU: IDR 'BB+'; Outlook Positive) $450 million senior note offering due 2019. The notes will be co-issued by AmeriGas Finance Corp. The debt will rank pari passu with other senior unsecured debt issued by the co-issuers. Proceeds from the offering will be used to finance APU's tender offer for $350 million of its outstanding 7.125% senior notes due 2016 and to reduce borrowing on its credit facility. AmeriGas Propane, Inc. an indirect subsidiary of UGI Corp. (NYSE: UGI; not rated by Fitch) owns an effective 44% interest in APU as the general partner and a limited partner. APU is a master limited partnership that conducts a national propane distribution business through its operating partnership subsidiary, AmeriGas Propane, LP (AGP), and AGP's subsidiaries. The APU debt is co-issued with either of its special purpose financing subsidiaries AP Eagle Finance Corp. and AmeriGas Finance Corp. Fitch currently rates APU and its financing subsidiaries: AmeriGas Partners, L.P./AmeriGas Finance Corp. -- Issuer Default Rating (IDR) 'BB+'; -- Senior unsecured notes 'BB+'. AmeriGas Partners, L.P./AP Eagle Finance Corp. -- IDR 'BB+'; -- Senior unsecured notes 'BB+'. The ratings reflect the significant retail propane distribution network, broad geographic reach, and proven ability to manage unit margins under various operating conditions. The company's growing AmeriGas Cylinder Exchange (ACE) propane cylinder exchange business provides modest positive cash flow during the summer months when the traditional space heating related propane distribution business is relatively slow. APU's ratings also consider the structural subordination of its debt obligations to bank facility borrowings at AGP, its operating limited partnership subsidiary. Ratings concerns include the increase in APU's Debt to EBITDA leverage, which rose to 3.4 times (x) as of March 31, 2011, up from 2.7x as of March 31, 2010. Debt increased by $138 million over that period while EBITDA decreased by $29 million. Unfavorable weather and conservation have negatively affected EBITDA in recent quarters. Fitch expects leverage to decline to approximately 3.2x by the end of fiscal year 2011 (Sept 30). Further reduction in leverage should occur in fiscal 2012 with more normalized weather. The company's financial performance remains sensitive to weather conditions and general customer conservation. The recessionary economy has been exacerbating volume sales declines. These factors have the potential to lead to further customer conservation and increased bad debt expense at APU. APU's retail volumes were down 2.2% in the last twelve months ending June 30, 2011. In the most recent quarter, retail volumes increased 3.3% from the prior year period. As of March 31, 2011, APG's liquidity was $80 million which included $35 million of cash and $45 million available on two revolving credit facilities that were set to expire in 2011. A new $325 million bank facility was put in place in June 2011 to replace $275 million of replaced facilities. The new facility extends through 2015. APU does not have significant debt maturities until 2015 when $415 million of notes are due. The new bank facility has financial covenants which include a consolidated MLP (AmeriGas Partners, L.P.) total leverage (debt to EBITDA) ratio which cannot exceed 5.0x. The consolidated borrower (AmeriGas Propane, L.P.) leverage ratio cannot exceed 2.75x. Interest coverage defined as the consolidated EBITDA of the MLP and its subsidiaries to the interest expense of the MLP and its subsidiaries must exceed 2.75x. APU's Positive Outlook is reflective of underlying strength of the company's retail distribution network, broad geographic scope, conservative management practices, Fitch's expectations for improvements in margins and deleveraging by the end of fiscal year 2011 as well as fiscal year 2012. On the other hand, if leverage remains above 3.0x on a weather normalized basis, the Rating Outlook would likely be revised to Stable. AMN HEALTHCARE: S&P Keeps B+ Corp. Credit Rating; Outlook Stable ---------------------------------------------------------------- Standard & Poor's Rating Services revised its recovery rating on San Diego, Calif.-based health care staffing provider AMN Healthcare Inc.'s $40 million second-lien senior secured term loan due 2016 to '3' from '4'. "We now expect lenders to have meaningful (50% to 70%) recovery of principal and interest in the event of a payment default. The recovery prospects for second-lien lenders improved because of the aggressive amortization of the first-lien debt, in spite of the company increasing its first-lien revolver to $50 million from $40 million. Another factor we considered in revising the recovery rating was the postponement of our simulated default year to 2014 from 2013," S&P related. The rating on AMN Healthcare Inc. -- a subsidiary of AMN Healthcare Services Inc. -- reflects a weak business risk profile, which its operating concentration in the very competitive and cyclical health care staffing industry demonstrates. Moreover, the addition of $118 million of debt to fund the Nursefinders acquisition at the end of 2010, weakened the company's financial risk profile, which Standard & Poor's characterizes as aggressive. As of March 31, 2011, annualized adjusted debt leverage was 4.5x, but could decline to around 4.0x by the end of 2011, if the company achieves at least 5% pro forma revenue growth and margins remain stable. Ratings List AMN Healthcare Inc. Corporate Credit Rating B+/Stable/-- Recovery Rating Revised To From $40 mil. second-lien term loan B+ B+ Recovery rating 3 4 APPLETON PAPERS: Marsuw and WinCup Chiefs Named to Board -------------------------------------------------------- Appleton Papers Inc. announced that Mark A. Suwyn and George W. Wurtz have been elected to its board of directors. Mr. Suwyn, 69, is president of Marsuw, a private investment and consulting company. Mr. Suwyn retired as chairman of NewPage, the largest coated paper producer in North America, in June 2010. He previously served as chairman and chief executive officer of NewPage for five years. Mr. Suwyn also served for nine years as chairman and chief executive officer of Louisiana-Pacific Corporation. Prior to that, Mr. Suwyn held executive management positions with International Paper Company and spent 25 years with E.I. Du Pont where he directed marketing, acquisition and joint venture efforts. Mr. Suwyn earned a doctorate in inorganic chemistry from Washington State University and bachelor's degree in chemistry from Hope College, Holland, Mich. Mr. Wurtz, 55, is president and chief executive officer of New WinCup Holdings, Stone Mountain, Ga., a privately-held manufacturer and distributor of single-use cups, food service containers, lids and straws. Mr. Wurtz retired as an officer of Georgia-Pacific Corporation in 2006 after serving in several executive management positions including president of paper, bleached board and kraft operations. Prior to joining Georgia- Pacific, Mr. Wurtz worked for James River Corporation/Fort James for 14 years and held executive management positions in operations, logistics, procurement and manufacturing planning. He is a graduate of the State University of New York, Oswego, N.Y. "Like all our board members, Mark and George bring a diversity of thought and experience as well as independent perspectives that are invaluable to the corporate governance process," said Mark Richards, Appleton's chairman, president and chief executive officer. "Both Mark and George have extraordinary knowledge of the paper industry gained from many years of successful executive management experience." Richards said Mr. Wurtz is an operations expert with keen insights into continuous improvement processes and achieving operational excellence. Mr. Suwyn has served as the chief executive officer of two large forest products companies, and his quarter century of work in the chemical industry will be especially valuable to Appleton as the company supports the strong growth of its Encapsys microencapsulation division, Richards noted. Both Mr. Suwyn and Mr. Wurtz will be paid on a full retainer basis of $55,000 per year, and both will receive deferred compensation of $35,000 per year awarded in units which track Paperweight Development Corp. common stock. This compensation is consistent with the standard compensation arrangements of the other members of the Boards of Directors of Paperweight Development Corp. and Appleton Papers Inc. Mr. Suwyn has also been elected as a member of Appleton Papers Inc.'s Compensation Committee. Mr. Wurtz has also been elected as a member of Paperweight Development Corp.'s Audit Committee. Both committee appointments are effective July 22, 2011. Messrs. Suwyn and Wurtz join Steve Carter, retired executive vice president, chief financial officer and treasurer of Woodward, Inc.; Terry Murphy, retired executive vice president and chief financial officer of A.O. Smith Corporation; Andrew Reardon, retired chairman and chief executive officer of TTX Company, Kathi Seifert, retired executive vice president of Kimberly-Clark Corporation, as independent directors. Richards serves as chairman of Appleton's board of directors. Moreover, Ronald A. Pace, a member of the Board has resigned effective July 22, 2011. About Appleton Papers Appleton Papers Inc. is a 100%-owned subsidiary of Paperweight Development Corp. Appleton Papers Inc. -- http://www.appletonideas.com/-- headquartered in Appleton, Wisconsin, produces carbonless, thermal, security and performance packaging products. Appleton has manufacturing operations in Wisconsin, Ohio, Pennsylvania, and Massachusetts, employs approximately 2,200 people and is 100% employee-owned. The Company's balance sheet at April 3, 2011, showed $674.53 million in total assets, $816.03 million in total liabilities, $108.62 million in redeemable common stock, $157.54 million in accumulated deficit and $92.58 million accumulated and other comprehensive loss. * * * Appleton Papers carries a 'B' corporate credit rating from Standard & Poor's. ATCONTACT COMMS: Colorado Court Interprets Sec. 365(d)(3) --------------------------------------------------------- Judge Elizabeth E. Brown conditioned the extension of AtContact Communications, LLC's 120-day period to assume or reject non- residential real property leases prescribed by 11 U.S.C. Sec. 365(d)(4)(A) on the Debtor's timely performance of all obligations under its leases, until the time as it has assumed or rejected, as required by Sec. 365(d)(3). Judge Brown gave AtContact an additional 90 days, through and including Oct. 31, 2011, to make lease decisions. In her Order, Judge Brown noted that she has some questions about the sufficiency of the allegations in the Debtor's motion of 'cause' for the extension, as required by Sec. 365(d)(4)(B). No landlord had objected to the requested extension. Landlord Echo Properties Corp. has consented to receive partial payments during this time frame. Judge Brown said Sec. 365(d)(3) imposes a mandatory requirement that a debtor fully perform its obligations after the first 60 days of the case. She said it might be reasonable to assume that Congress intended this provision only to benefit lessors and, therefore, a particular lessor may waive this requirement. But Congress knew how to insert the language "upon prior written consent of the lessor" or "unless the lessor consents or the Court orders otherwise." It used this type of qualified language in Sec. 365(d)(4)(B)(ii). It did not do so in Sec. 365(d)(3). "Perhaps Congress' intention was to prevent a debtor-in-possession or trustee from running up significant unpaid administrative expense claims," Judge Brown said. "In any event, the lessor is free to waive rent or to agree to add it to the end of the lease or to otherwise change the contractual terms of the lease with the Debtor's consent, but whatever those contractual requirements are, Sec. 365(d)(3) will not allow this Court to waive its mandatory requirement of full performance after the first sixty days and to allow the Debtor to incur these unpaid administrative expenses." Judge Brown said the Debtor may ask the Court to reconsider the requirement of full performance by filing a motion with case authority supporting the ability to waive the requirements of Sec. 365(d)(3). A copy of Judge Brown's July 29 Order is available at http://is.gd/rgkNAefrom Leagle.com. Based in Sedalia, Colorado, AtContact Communications, LLC, dba @contact and Contactmeo, filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 11-17175) on April 1, 2011. Lee M. Kutner, Esq. -- lmk@kutnerlaw.com -- at Kutner Miller Brinen, P.C., presides over the case. The Debtor did not indicate its assets in its petition, but estimated debts as under $10 million. The petition was signed by David M. Drucker, its manager. AVION POINT: Taps Wolff Hill as Bankruptcy Counsel -------------------------------------------------- Avion Point West LLC, asks the U.S. Bankruptcy Court for the Middle District of Florida for permission to employ Frank M. Wolff and Wolff, Hill, McFarlin & Herron, P.A. as counsels. FMW and WHM&H will, among other things: a. advise and counsel the debtor-in-possession concerning the operation of its business in compliance with Chapter 11 and orders of the Court; b. defend any causes of action on behalf of the debtor-in- possession; and c. assist in the formulation of a plan of reorganization and preparation of a disclosure statement. Frank M. Wolff, a shareholder, officer, director and employee of WHM&H, tells the Court that the firm received $1,017 for legal services provided prior to the petition date; and $17,036 as a retainer which WHM&H will take into income for post bankruptcy fees and costs. The source of the retainer is James P.A. Thompson, 100% owner and managing member of the Debtor. To the best of the Debtor's knowledge, FMW and WHM&H are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. About Avion Point West Based in Longwood, Florida, Avion Point West LLC and its affiliate, Orlando Country Aviation Services Inc., filed for Chapter 11 bankruptcy protection (Bank. M.D. Fla. Case Nos. 11-10364 and 11-10365) on July 8, 2011. Judge Karen S. Jennemann presides over the Debtors' cases. Frank M. Wolff, Esq., at Wolff Hill McFarlin & Herron PA, represents the Debtor. The Debtor estimated assets between $10 million and $50 million, and debts between $1 million and $10 million. The petitions were signed by James PA Thompson, the managing member. Mr. Thompson is the developer of Orlando Apopka Airport in northwest Orange County. During the past decade, Mr. Thompson has transformed Orlando Apopka Airport, on U.S. Highway 441 between Plymouth and Zellwood, from an old airfield called Orlando Country Airport into a complex of hangar condominiums whose owners now control the facility. BANNING LEWIS: Colorado Springs Renews Plea for Colorado Transfer ----------------------------------------------------------------- Colorado Springs, a Colorado Municipal Corporation and Home Rule City, on behalf of itself and its enterprise Colorado Springs Utilities files with the U.S. Bankruptcy Court for the District of Delaware a renewed motion to transfer venue of the Chapter 11 cases of The Banning Lewis Ranch Co., et al. The Court previously ruled that it would consider a renewed venue motion "if it turns out that, as part of the sale process, the Debtor proposes over the objection of the City... to disturb any of the and use requirements or restrictions or any of the obligations under the recorded agreements..." Colorado Springs relates that the interest of justice require that these case be transferred to Colorado so that issues of local concern can be decided by Colorado courts. Colorado Springs notes that Ultra Resources, Inc. the winning bidder for the assets of the Debtor Ultra has now mounted a frontal assault on all land use regulations governing the real property known as Banning Lewis ranch, while with the apparent acquiescence of the Debtors. In addition, Ultra's arguments require resolution of questions of Colorado law related to land use and a local government's policy and regulatory powers. According to Colorado Springs, the Court must transfer the venue to the District of Colorado because: -- the planned orderly development of Banning Lewis Ranch, which is essential to the future of Colorado Springs, has been put into question by Ultra; -- Ultra's arguments that the Bankruptcy Court must wipe out local land use regulation in the Banning Lewis Ranch depend upon resolution of important and complex issues of Colorado law that include critical public policy concerns; -- the relief requested by ltra would adversely impact all other annexors withing Banning Lewis Ranch, well as surroundings communities; -- the issues raised by Untra will affect Colorado Srings, El Paso County, surrounding communities, and the metropolitan districts for Banning Lewis Ranch, which are quasi-governmental entities. Colorado Springs is represented by: William A. Hazeltime, Esq. SULLIVAN HAZELTINE ALLINZON, LLC 901 North Market Street, Suite 1300 Wilmington, DE 19801 Tel: (302) 428-8191 Fax: (302) 428-8195 E-mail: whazeltime@sja-llc.com Peter A. Cal, Esq. Mark L. Fulford, Esq. SHERMAN & HOWARD L.L.C. 633 17 Street, Suite 3000 Denver, CO 80202 Tel: (303) 297-2900 Fax: (303) 298-0940 E-mail: pcal@shermanhoward.com mfulford@shermanhoward.com 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. BION ENVIRONMENTAL: CEO Agrees to Extend Term Until 2014 -------------------------------------------------------- Dominic Bassani, Bion Environmental Technologies, Inc.'s CEO, agreed to extend his service to the Company for three years through Dec. 31, 2014, through an extension or amendment of the existing agreement with Bright Capital, Ltd., pursuant to which Mr. Bassani currently serves the Company. The written extension agreement is in the process of being drafted or finalized and will be filed when completed and executed. Effective July 18, 2011, Mark A. Smith, the Company's Chairman, President and General Counsel, agreed to extend his service to the Company for an additional year through Dec. 31, 2012, through an extension or amendment of his existing agreement. The written agreement is in the process of being drafted or finalized and will be filed when completed and executed. About Bion Environmental Crestone, Colo.-based Bion Environmental Technologies, Inc. (OTC BB: BNET) -- http://biontech.com/-- has provided environmental treatment solutions to the agriculture and livestock industry since 1990. Bion's patented next-generation technology provides a unique comprehensive treatment of livestock waste that achieves substantial reductions in nitrogen and phosphorus, ammonia, greenhouse and other gases, as well as pathogens, hormones, herbicides and pesticides. As reported in the Troubled Company Reporter on September 27, 2010, GHP Horwath, P.C., in Denver, Colo., expressed substantial doubt about Bion Environmental Technologies' ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2010. The independent auditors noted that the Company has not generated revenue and has suffered recurring losses from operations. The Company's balance sheet at March 31, 2011, showed $9.58 million in total assets, $8.72 million in total liabilities, $2.52 million in Series B Redeemable Convertible Preferred stock, and a $1.65 million total deficit. BION ENVIRONMENTAL: Unveils Technology to Protect Chesapeake Bay ---------------------------------------------------------------- Joined by local and state officials at Kreider Farms, Bion Environmental Technologies Inc. unveiled new technology that protects local streams and the Chesapeake Bay, saves taxpayer money, and creates a source of renewable energy. Featured speakers included Pennsylvania Secretary of Agriculture George Greig, Pennsylvania Department of Environmental Protection Executive Deputy Secretary John Hines and Pennsylvania Infrastructure Investment Authority Executive Director Dr. Paul Marchetti. Forgoing the traditional approach of treatment at municipal wastewater and stormwater facilities, Bion's new advanced micro- aerobic digestion technology provides on-site nutrient treatment at a livestock farm before they ever have an opportunity to flow into local streams and watersheds. The result is a dramatic reduction in nitrogen and phosphorus from animal waste that otherwise would enter the Chesapeake Bay. When Bion's projects at Kreider Farms are fully implemented the technology will create enough biomass to power approximately 2,700 homes. "Bion's groundbreaking technology has far-reaching implications beyond the Chesapeake Bay," said company CEO Dominic Bassani. "Not only does it help protect our local aquifers and rivers, as well as produce a source of renewable energy, but reduced cleanup costs mean an incredible savings for taxpayers. Bion's technology addresses challenges that threaten our global water supply by addressing nutrient runoff at the local level." Bion's recently completed $7.5-million installation at Kreider Dairy Farms, a 1,200 dairy-cow operation, was funded by PENNVEST, and DEP will verify nutrient reductions. Offsets can be used by municipal wastewater and regional stormwater facilities as qualified reductions for the federal Environmental Protection Agency's Chesapeake Bay initiative. The credits could also be made available for use by municipalities in other states in the Chesapeake Bay watershed area. The Bion performance data released is based upon independent laboratory analysis. The analysis found the technology is already removing 85 percent of the nitrogen targets with 100 percent of the phosphorous captured for Bion's approved nutrient-reduction plan filed with DEP. The installation will be fully operational by Oct. 1. For more data, please see www.biontech.com. "Remediation for nutrients has long been unaffordable by livestock operators," said Bion Executive Vice Chair Ed Schafer, former governor of North Dakota and secretary of the U.S. Department of Agriculture. "The verified nutrient reductions in the watershed made possible by the Bion technology enable on-farm installations to provide an affordable solution to the Chesapeake Bay nutrient- reduction mandates committed to by Pennsylvania in its Watershed Improvement Program." About Bion Environmental Crestone, Colo.-based Bion Environmental Technologies, Inc. (OTC BB: BNET) -- http://biontech.com/-- has provided environmental treatment solutions to the agriculture and livestock industry since 1990. Bion's patented next-generation technology provides a unique comprehensive treatment of livestock waste that achieves substantial reductions in nitrogen and phosphorus, ammonia, greenhouse and other gases, as well as pathogens, hormones, herbicides and pesticides. As reported in the Troubled Company Reporter on September 27, 2010, GHP Horwath, P.C., in Denver, Colo., expressed substantial doubt about Bion Environmental Technologies' ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2010. The independent auditors noted that the Company has not generated revenue and has suffered recurring losses from operations. The Company's balance sheet at March 31, 2011, showed $9.58 million in total assets, $8.72 million in total liabilities, $2.52 million in Series B Redeemable Convertible Preferred stock, and a $1.65 million total deficit. BLUEGREEN CORP: Six Directors Elected at Annual Meeting ------------------------------------------------------- The 2011 Annual Meeting of Shareholders of Bluegreen Corporation was held on July 27, 2011. The six director candidates, each of whom was nominated by the Company's Board of Directors for election at the Annual Meeting to serve for a term expiring at the Company's 2012 Annual Meeting of Shareholders, were elected: (1) Alan B. Levan (2) John E. Abdo (3) James R. Allmand, III (4) Lawrence A. Cirillo (5) Mark A. Nerenhausen (6) Orlando Sharpe The amendment of the Company's 2006 Performance-Based Annual Incentive Plan was approved. The appointment of Ernst & Young LLP as the Company's independent registered public accounting firm for fiscal year 2011 was ratified. About Bluegreen Corp. Bluegreen Corporation -- http://www.bluegreencorp.com/-- provides places to live and play through its resorts and residential community businesses. In December 2010, Standard & Poor's Rating Services raised its corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'. S&P's rating outlook on the Company is stable. S&P believes that Bluegreen will grow its fee-based sales commission revenue from $20 million in 2009 to an estimated $50 million in 2010. At this time, S&P expects that Bluegreen may be able to generate at least the same amount of commission based revenue in 2011. While the increase in fee- based revenue allowed Bluegreen to expand the level of sales that do not require financing, S&P believes that the company will likely remain heavily reliant on its lines of credit, receivable- backed warehousing facilities, and access to the timeshare securitization markets to fund timeshare sales. In S&P's view, Bluegreen currently has adequate sources of liquidity to cover its needs over the next 12-18 months mainly due to the successful closing of a timeshare securitization transaction. The Company reported a net loss of $35.87 million on $365.67 million of revenue for the year ended Dec. 31, 2010, compared with net income of $3.90 million on $367.36 million of revenue during the prior year. The Company's balance sheet at March 31, 2011, showed $1.21 billion in total assets, $892.12 million in total liabilities, and $320.03 million in total shareholders' equity. * * * In December 2010, Standard & Poor's Rating Services raised its corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'. S&P's rating outlook on the Company is stable. S&P believes that Bluegreen will grow its fee-based sales commission revenue from $20 million in 2009 to an estimated $50 million in 2010. At this time, S&P expects that Bluegreen may be able to generate at least the same amount of commission based revenue in 2011. While the increase in fee- based revenue allowed Bluegreen to expand the level of sales that do not require financing, S&P believes that the company will likely remain heavily reliant on its lines of credit, receivable- backed warehousing facilities, and access to the timeshare securitization markets to fund timeshare sales. In S&P's view, Bluegreen currently has adequate sources of liquidity to cover its needs over the next 12-18 months mainly due to the successful closing of a timeshare securitization transaction. BORDERS GROUP: Seeks to Sell Intellectual Property Assets --------------------------------------------------------- Borders Group, Inc., and its debtor affiliates seek permission from Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to sell substantially all of their intellectual property assets, free and clear of all interests, to the highest bidder. To this end, the Debtors ask the Court to approve uniform procedures to govern the bidding, auction and sale of the IP Assets. Upon the conclusion of the ongoing going-out-of-business sales at 399 of their store locations, the Debtors will no longer have any continuing retail operations. The GOB sales were commenced by a liquidator group led by Hilco Merchant Resources, LLC and Gordon Brothers Retail Partners, LLC, on July 22, 2011, and are expected to end no later than Nov. 13, 2011. Accordingly, the Debtors, with the assistance of their advisors, have determined to conduct a separate sale of their IP Assets, which include: * All trademarks, service marks, trade names, service names, brand names, all trade dress rights, logos, internet domain names and corporate names and general intangibles of a like nature, together with the goodwill associated with any of those assets, and all applications, registrations and renewals, including, without limitation, the marks and names set forth in a purchase agreement to be executed by the winning bidder; * To the extent maintained by the Debtors and subject to compliance with the Debtors' published privacy policy, membership lists, customer information, including contact information and e-mail addresses and other purchasing history and related information; * IP addresses allocated to the Debtors, including www.borders.com; * Any claims or causes of action arising out of or related to any infringement, dilution, misappropriation or other violation of any IP assets; and * Any property necessary for the transfer to or the operation by a buyer of any of the IP assets, subject to the Debtors' rights to continued use, if necessary. The Debtors' Web site and other IP Assets are valuable assets and should garner significant interest from potential bidders, David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, asserts. He tells the Court that the Debtors have received multiple inquiries from interested parties. Contemporaneously, the Debtors have filed an application to the Court to employ Streambank, LLC, as their agent to assist in the marketing and sale of the IP Assets. The Debtors, with the assistance of Streambank, hope to consummate a sale or sales of the IP Assets on or before Sept. 30, 2011. The Debtors will sell the IP Assets at an auction in whole to a single bidder or in part to multiple bidders, with each winning bidder for the relevant IP Assets executing a purchase agreement, a full-text copy of which is available for free at: http://bankrupt.com/misc/Borders_IPAssetsAPA.pdf The deadline for submission of a final and binding written proposal for the IP Assets is on Sept. 8, 2011. Based on the Bids received, the Debtors, in consultation with the Official Committee of Unsecured Creditors, may designate one or more Qualified Bidders a "stalking horse" setting a floor for subsequent Bids. In the event a Qualified Bidder is designated as a Stalking Horse Bidder and is not the ultimate Winning Bidder, the Debtors seek permission to reimburse the Stalking Horse Bidder its reasonable, documented out-of-pocket expenses incurred in connection with the promulgation of its Qualified Bid, subject to a $250,000 cap, upon consent of the Creditors Committee or, if the consent is not obtained, further order of the Court. If, after the examination of all Qualified Bids and after consultation with the Creditors Committee, the Debtors determine that an auction is appropriate, they will conduct an auction on Sept. 14, 2011. If, at any time prior to or on Sept. 30, the Winning Bidder cannot consummate the Winning Bid, the Debtors, in consultation with the Creditors Committee, may choose to close with the back- up bidder by accepting the Back-Up Bid for the relevant IP Assets. A full-text copy of the proposed Bidding Procedures is available for free at http://bankrupt.com/misc/Borders_IPAssetsBidProcs.pdf In connection with the IP Assets Sale, the Debtors seek the Court's permission to assume and assign certain agreements to the winning bidder. The Debtors acknowledge that any assumption and assignment of an IP Agreement will be subject to all of the provisions of the IP Agreement to the extent required by applicable law, and will be subject to all applicable provisions of the Bankruptcy Code. The Debtors further ask the Court to direct the U.S. Trustee for Region 2 to appoint a consumer privacy ombudsman, pursuant to Sections 332(a) and (b) of the Bankruptcy Code, to appear and be heard at the Sale Hearing. The Debtors believe that the appointment of a consumer privacy ombudsman may be required by their privacy policy in a sale of the IP Assets because the IP Assets, which contain personally identifiable information in the form of customer lists, are being sold outside of a going concern sale. The Debtors believe that the only party with an interest in the IP Assets or their proceeds is the liquidator group as agent pursuant to an Agency Agreement and the July 21 Order Approving the Agency Agreement. To the extent required, the Debtors expect to obtain the Agent's consent to the Sales prior to the Sale Hearing. IP Assets Sale Deadlines and Hearings The Court will convene a hearing on Aug. 10, 2011, to consider the Bidding Procedures for the IP Assets Sale. Objections, if any, to the IP Assets Bidding Procedures are due no later than Aug. 3. Moreover, counterparties to the contracts have until Sept. 6 to object to the proposed assumption and assignment under the sale. Counterparties also have until Sept. 6 to object to the proposed cure amounts. The Court will conduct a hearing to approve the sale of the IP Assets to the winning bidder on Sept. 20. Parties have until Sept. 16 to object to the sale, and adequate assurance of future performance. Sale of Real Property Leases Also on the conclusion of the GOB Sales, the Debtors will no longer operate at their store locations and thus, must either reject, or assume and assign, their real property leases. The Debtors thus seek the Court's permission to sell about 400 unexpired non-residential real property leases, free and clear of all interests, to the highest and best bidder. A list of the Unexpired Leases is available for free at: http://bankrupt.com/misc/Borders_RealPropLeases.pdf The Debtors ask the Court to approve uniform procedures to govern the bidding, auction and sales of the Real Property Leases. Pursuant to the Bidding Procedures, the Debtors will solicit bids through two rounds. The first round will be comprised of bidding on Leases where either the Debtors' time to assume or reject pursuant to Section 365(d)(4) of the Bankruptcy Code is Sept. 30, 2011, or earlier, or where "holiday protections" are triggered on or prior to Sept. 30, 2011. The second round will be comprised of bidding on all other Leases. The Debtors propose to follow these deadlines in connection with the Sales of the Leases: A. First Round Lease Sales: * Bid Deadline: Aug. 26, 2011 * Auction: Aug. 31, 2011 * Objection Deadline: Sept. 2, 2011 * Lease Sale Hearing: Sept. 8, 2011 B. Second Round Lease Sales: * Bid Deadline: Sept. 7, 2011 * Auction: Sept. 13, 2011 * Objection Deadline: Sept. 15, 2011 * Lease Sale Hearing: Sept. 20, 2011 To be a "Qualified Bid," a bid must (i) propose, for each Lease that is the subject of the bid, consideration equal to or greater than the sum of (x) the Cure Amount plus (y) $10,000, which sum will be paid in cash, subject to the rights of Lessor bidders to 'credit bid' Cure Amount portion pursuant to the Bidding Procedures; (ii) be unconditional, subject only to the Debtors obtaining any necessary approval or authorization from the Court; (iii) include a commitment to consummate the Sale within two business days following the applicable Lease Sale Hearing; (iv) be received by the applicable Bid Deadline; (v) agree to waive any right to assert a claim for reimbursement of any fees or expenses of the bidder as an administrative expense, or otherwise, including as a substantial contribution; and (vi) proposes a transaction only for either (a) one or more First Round Leases, or (b) one or more Second Round Leases. A full-text copy of the Lease Sales Bidding Procedures is available for free at: http://bankrupt.com/misc/Borders_LeaseSalesBidProcs.pdf Unless the proposed procedures are approved by the Court, the Debtors will be forced to continue to carry and perform under their Leases, to their detriment and their estates, Mr. Friedman says. DJM Realty Services, LLC, the Debtors' real estate consultant, has reviewed, analyzed and marketed the Debtors' portfolio of leases. DJM is spearheading the marketing process for the Leases and has commenced discussions with several interested parties. The Debtors will serve on or before Aug. 1, 2011, a notice of assumption and assignment to each Lease's counterparty, identifying the Leases to be assumed and the proposed cure amounts. The Debtors ask the Court to fix Aug. 24, 2011, as the deadline to object to the proposed cure amounts. To facilitate the assumption and assignment of the Leases, the Debtors ask the Court to hold all anti-assignment provisions of the Leases unenforceable under Section 365(f) of the Bankruptcy Code to the extent parties do not consent to the assignment of the Leases. Notwithstanding any anti-assignment language in a Lease, the Debtors seek permission to assign and sell the Lease upon assuming the Lease and providing adequate assurance of future performance by the Successful Bidder. Pursuant to Section 365(k), the Debtors and their estates will be relieved from any liability for any breach of any Lease after such assignment to and assumption by the Successful Bidder on the applicable date of the closing. The Court will consider the Debtors' Bidding Procedures for the Lease Sales on Aug. 10, 2011. Objections are due no later than Aug. 3. About Borders Group Borders Group operates book, music and movie superstores and mall- based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e-commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. Lowenstein Sandler represents the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group is closing 399 stores. Borders selected proposals by Hilco and Gordon Brothers to conduct going out of business sales for all stores after no going concern offers of higher value were submitted by the deadline. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000 BORDERS GROUP: Proposes Protocol for Objecting to Claims -------------------------------------------------------- Borders Group Inc. and its affiliates ask the bankruptcy court to approve uniform procedures for filing claim objections, settling claims, and amending their Schedules of Assets and Liabilities. As of July 27, 2011, approximately 3,200 proofs of claim have been filed against the Debtors, with an approximate face amount of $1.37 billion, said David F. Head, managing director of AlixPartners, LLP, the Debtors' restructuring advisors, in an accompanying declaration. The Debtors have filed their first to fourth omnibus objections to claims. Rule 3007 of the Federal Rules of Bankruptcy Procedure requires that an objection to a proof of claim be made in writing, and that the claimant be provided with not less than 30 days' notice of the hearing to be held with respect of the objection. However, Rule 3007(c) proscribes joining multiple objections into an omnibus claim objection, "[u]nless otherwise ordered by the court or permitted by subdivision (d)." Rule 3007(d) provides that objections to more than one claim may be joined in an omnibus objection if all the claims were filed by the same entity, or the objections are based solely on the grounds that the claims should be disallowed, in whole or in part, because: (1) they duplicate other claims; (2) they have been filed in the wrong case; (3) they have been amended by subsequently filed proofs of claim; (4) they were not timely filed; (5) they have been satisfied or released during the case in accordance with the Bankruptcy Code, applicable rules, or a court order; (6) they were presented in a form that does not comply with applicable rules, and the objection states that the objector is unable to determine the validity of the claim because of the noncompliance; (7) they are interests, rather than claims; or (8) they assert priority in an amount that exceeds the maximum amount under Section 507 of the Bankruptcy Code. The Debtors anticipate objecting to large numbers of proofs of claim on bases that are not included in Rule 3007(d), namely: (1) the amount of the Claim contradicts the Debtors' books and records; (2) the Claim is incorrectly classified; (3) the Claim seeks recovery of amounts for which the Debtors are not liable; (4) the Proof of Claim does not include sufficient documentation to ascertain the validity of the Claim; and (5) the Claim is objectionable under Section 502(e)(1) of the Bankruptcy Code. The Debtors thus propose to join objections to Proofs of Claim on the Additional Omnibus Grounds into their omnibus claim objections. Moreover, the Debtors seek permission to join up to 200 objections to Proofs of Claim into a single omnibus claim objection, whether on the grounds enumerated by Bankruptcy Rule 3007(d), or on the Additional Omnibus Grounds. The Debtors propose that claimants to whose claims they object to be required to respond, if at all, by the date that is 21 days after the date the relevant omnibus claim objection has been filed and served, unless the date falls on a Saturday, Sunday or federal holiday, in which case the deadline would be on the preceding business day. The Debtors also propose to file a reply to any response on the date that is two business days before the hearing scheduled on such omnibus claim objection. In the event a response is filed, the Debtors may adjourn the hearing on the omnibus claim objection, or may adjourn the hearing solely with respect to those responding claimants. Aside from (i) the Additional Omnibus Grounds, (ii) including up to 200 claims per objection, and (iii) the Claim Deadlines, the Debtors assure the Court that all claim objections they would file would fully comply with Rule 3007 in all respects. Settlement Procedures In connection with the claims reconciliation process, the Debtors expect that they will attempt to enter into settlements with large numbers of the claimants to whose Proofs of Claim they would otherwise object. The Debtors believe that filing a separate motion with the Court pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure to approve each and every settlement would be administratively and cost prohibitive to the estates. Accordingly, the Debtors propose these procedures for settling their objections to Proofs of Claim: (A) The Debtors will be authorized to settle any and all general unsecured claims asserted against them without prior approval of the Court or any party-in-interest in these cases if (i) the aggregate amount to be allowed for an individual claim does not exceed $250,000, and (ii) the difference between the Settlement Amount and the amount listed on (i) the Proof of Claim, or (ii) the Debtors' Schedules does not exceed $250,000. (B) If the Settlement Amount and Claim Difference are $250,000 or less, but the claimant with whom the Debtors wish to settle is an insider of the Debtors within the meaning of Section 101(31) of the Bankruptcy Code, or an affiliate of the Debtors within the meaning of Section 101(2) of the Bankruptcy Code, the Debtors will submit Settlement Documentation. (C) If the Settlement Amount or Claim Difference falls between $250,000.01 and $5,000,000, the Debtors will provide to the Official Committee of Unsecured Creditors: (i) the names of the parties with whom the Debtors propose to settle; (ii) the types of claims asserted by those claimants; (iii) the applicable proof of claim numbers; (iv) the amounts for which the Debtors propose to settle those claims; and (v) copies of any settlement agreement or other supporting documents memorializing the proposed settlement. The Creditors Committee may advise the Debtors that it objects to the settlement proposed in the Settlement Documentation. If the Creditors Committee does not timely advise, or if the Debtors receive timely written approval from the Creditors Committee of the proposed settlement, the Debtors may proceed with the settlement. If the Creditors Committee timely objects, the Debtors may: (i) renegotiate the settlement and submit to the Creditors Committee for approval revised Settlement Documentation, or (ii) file a motion with the Court seeking approval of the proposed settlement. (d) If the Settlement Amount or Claim Difference is $5,000,000.01 or greater, the Debtors will file a motion with the Court seeking approval of the proposed settlement under Rule 9019 on 21 days' notice. (e) The Debtors may employ the Settlement Procedures to settle, in addition to general unsecured claims: (i) secured claims, (ii) administrative expense claims pursuant to Section 503(b) of the Bankruptcy Code, and (iii) priority claims pursuant to Section 507(a) of the Bankruptcy Code, without prior approval of the Court or any other party-in-interest in these Chapter 11 cases, if the Settlement Amount or Claim Difference for the claim does not exceed $25,000. If the Settlement Amount or Claim Difference falls between $25,000 and $2,000,000, the Debtors will submit Settlement Documentation to the Creditors Committee and the Committee Approval Procedures will apply. Amendment Procedures Since commencing the claims reconciliation process, the Debtors have discovered that when they filed their Schedules several months ago, they listed various liabilities in amounts that exceed what they actually owe. The Debtors acknowledge that those errors must be corrected for the benefit of their estates and all stakeholders in these cases; however, the cost to their estates, in terms of both time and money, of amending the Schedules, obtaining and noticing a supplemental bar date and delaying the claims reconciliation process pending future supplemental bar date would be exorbitant. Accordingly, the Debtors propose to file omnibus motions to amend their Schedules to accurately reflect the Debtors' actual liabilities as revealed by the claims reconciliation process. Claimants whose scheduled claims the Debtors seek to amend would have adequate notice of, and opportunity to object to, the Omnibus Amendment Motions. The Debtors propose to serve Omnibus Amendment Motions on all affected claimants and, if known, their counsel, at least 30 days in advance of the hearing to be held thereon. The Debtors propose to adopt the hearing and response procedures set forth in the Claims Objection Procedures. The Court will consider the Debtors' request on August 10, 2011. Objections are due no later than August 3. About Borders Group Borders Group operates book, music and movie superstores and mall- based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e-commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. Lowenstein Sandler represents the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group is closing 399 stores. Borders selected proposals by Hilco and Gordon Brothers to conduct going out of business sales for all stores after no going concern offers of higher value were submitted by the deadline. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000 BORDERS GROUP: Proposes Streambank as IP Consultant --------------------------------------------------- Borders Group Inc. and its affiliates seek the bankruptcy court's permission to employ, nunc pro tunc to July 20, 2011, Streambank, LLC, as their intellectual property disposition consultant. As the Debtors' IP consultant, Streambank will: (a) work with the Debtors' management and advisors to collect and secure all of the available information and other data concerning the IP Assets for sale; (b) prepare marketing materials designed to advertise the availability of the IP Assets for sale or assignment and will develop and execute a sales and marketing program designed to elicit proposals to acquire the IP Assets from qualified assignees with a view toward completing a sale or sales of the IP Assets within the next six to eight weeks; and (c) assist the Debtors in connection with the transfer of the IP Assets to buyer or buyers who offer the highest consideration for those assets. The Debtors have agreed to this fee structure to pay for Streambank's services: * A management fee payable upon engagement in the amount of $100,000, which will be credited against any commissions earned. * Streambank will be paid a commission based on a percentage of aggregate gross proceeds generated from the sale, license or other assignment of the IP Assets: -- 3% of the first $2.5 million of aggregate gross proceeds; -- 5% for any aggregate gross proceeds exceeding $2.5 million and up to $7.5 million; -- 7.5% for any gross proceeds in excess of $7.5 million and up to $10 million; and -- 12% for any gross proceeds in excess of $10 million. * Any Commissions due Streambank will be paid in full immediately upon consummation of any transaction or transactions involving the sale or other assignment of the IP Assets from the proceeds of those transactions notwithstanding any liens or other attachments on the IP Assets or the gross proceeds thereof. The Debtors will also reimburse Streambank for the firm's reasonable expenses incurred up to a maximum aggregate amount of $20,000. David Peress, a principal of Streambank, LLC, in Needham, Massachusetts -- dperess@streambankllc.com -- disclosed that his firm provides services or has formerly provided services to certain parties in matters unrelated to the Debtors' Chapter 11 cases, a schedule of which clients is available for free at: http://bankrupt.com/misc/Borders_StreambankClients.pdf Mr. Peress assures the Court that Streambank is a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. About Borders Group Borders Group operates book, music and movie superstores and mall- based bookstores. At Jan. 29, 2011, the Debtors operated 642 stores, under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States, of which 639 stores are located in the United States and 3 in Puerto Rico. In addition, the Debtors operate a proprietary e-commerce Web site, http://www.Borders.com/, launched in May 2008, which includes both in-store and online e-commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and approximately 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serve as counsel to the Debtors. Jefferies & Company's Inc. is the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC is the interim management and restructuring services provider. The Garden City Group, Inc., is the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, serve as counsel to the DIP Agents. Lowenstein Sandler represents the official unsecured creditors committee for Borders Group. Bruce S. Nathan and Bruce Buechler, members of Lowenstein Sandlers' Bankruptcy, Financial Reorganization & Creditors' Rights Group, are leading the team. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010 Borders Group is closing 399 stores. Borders selected proposals by Hilco and Gordon Brothers to conduct going out of business sales for all stores after no going concern offers of higher value were submitted by the deadline. Bankruptcy Creditors' Service, Inc., publishes BORDERS GROUP BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Borders Group Inc., the United States' second largest bookstore chain. (http://bankrupt.com/newsstand/or 215/945-7000 CALUMET SPECIALTY: Moody's Says Purchase Could Pressure Rating -------------------------------------------------------------- Moody's Investors Service commented that Calumet Specialty Products Partners, L.P.'s pending $475 million acquisition of Murphy Oil Corporation's Superior refinery assets and inventory could have negative pressure on Calumet's rating or outlook. The last rating action for Calumet was on April 11, 2011 when Moody's assigned a B3 rating to Calumet's senior unsecured note offering. Moody's also assigned a B2 Corporate Family Rating (CFR), B2 Probability of Default Rating (PDR), and SGL-3 Speculative Grade Liquidity Rating. The outlook is positive. The principal methodologies used in this rating were Global Refining and Marketing Rating Methodology published in December 2009. Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. Calumet Specialty Products Partners, L.P. is headquartered in Indianapolis, Indiana. CARDTRONICS INC: S&P Raises CCR to 'BB'; Outlook Stable ------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Houston-based Cardtronics Inc. to 'BB' from 'BB-'. "At the same time, we removed the rating from CreditWatch Positive, where it was originally placed on June 21, 2011. The rating outlook is stable," S&P related. "We also removed the issue-level rating on the company's $200 million senior subordinated notes from CreditWatch Developing and raised that rating to 'BB' (the same as the corporate credit rating) from 'BB-' based on the higher corporate credit rating. The recovery rating remains at '4', indicating our expectation for average (30% to 50%) recovery for lenders in the event of a payment default," S&P said. "The ratings on Cardtronics reflect its meaningful position in its niche product market, moderate financial policy, and significantly improved EBITDA margins over the past two years," said Standard & Poor's credit analyst Alfred Bonfantini. The company's weak business risk profile reflects its low product, geographic, and customer diversity; its still moderate scale; and uncertain and unfavorable regulatory and secular industry trends. deteriorates to above 3x. CELL THERAPEUTICS: Posts $17 Million Net Loss in Q2 2011 -------------------------------------------------------- Cell Therapeutics, Inc., filed its quarterly report, reporting a net loss of $17.0 million on $0 revenue for the three months ended June 30, 2011, compared with a net loss of $23.5 million on $299,000 of revenues for the same period last year. The Company reported a net loss of $36.8 million on $0 revenue for the first half of 2011, compared with a net loss of $50.5 million on $319,000 of revenues for the first half of 2010. As of June 30, 2011, the Company had incurred aggregate net losses of $1.667 billion since inception. The Company says it expects to continue to incur operating losses for at least the next few years, unless it receives approval for Pixuvri from the Food and Drug Administration, in the United States, or European Medicines Agency, in Europe. The Company's balance sheet at June 30, 2011, showed $56.6 million in total assets, $40.2 million in total liabilities, $13.5 million of common stock purchase warrants, and stockholders' equity of $2.9 million. As reported in the TCR on Feb. 24, 2011, Marcum LLP, in San Francisco, Calif., expressed substantial doubt about Cell Therapeutics' ability to continue as a going concern. The independent auditors noted that the Company has incurred losses since its inception, and has a working capital deficiency of approximately $14.2 million at Dec. 31, 2010. A copy of the Form 10-Q is available at http://is.gd/zIU0Sw About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. The Company is currently focusing its efforts on Pixuvri, OPAXIO, tosedostat, brostallicin and bisplatinates. CENTER COURT: Access to Montecito Cash Collateral Until December ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, on July 18, 2011, directed Center Court Partners, LLC, to grant secured creditor Montecito Bank & Trust adequate protection in exchange for the limited use of the Bank's cash collateral. As reported in the Troubled Company Reporter on July 7, 2011, Montecito Bank, owed $9 million in principal and a disputed unpaid interest, has asked the Court to deny the motion of the Debtor, to use cash collateral, citing the absence of any credible evidence of how the requested uses of its cash collateral might protect the value of the property, the lack of adequate protection, and the likely future decline of the Property. As adequate protection, the Bank asked the Court that it be granted replacement liens, to the extent of any diminution in the value of its cash collateral, in all postpetition property of the Debtor. In its motion, the Debtor told the Court that it needed cash collateral to to pay ongoing financial obligations to maintain its business, which is its primary asset. The Debtor will only disburse funds as set forth in a budget, subject to a 15% variance. The Debtor's authority to use cash collateral will terminate on the earlier of: (1) the effective date of any confirmed plan of reorganization; (2) the consummation of the sale or all or substantially all of the Debtor's assets; (3) the dismissal of the case or the conversion of the case to a case under Chapter 7 of the Bankruptcy code; (4) upon the entry of an order appointing a Chapter 11 trustee; (5) 5:00 p.m. Pacific Time Dec. 23, 2011. A copy of the 6-month budget is available at: http://bankrupt.com/misc/centercourt.cashcollateralmotion.pdf As adequate protection: 1. The Debtor will make monthly interest payments in advance to the Bank in the form of checks drawn on the Debtor's debtor-in- possession bank account in an amount equal to $1,468 per day ($44,062 per month for a 30-day month and $45,531 for a 31-day month) delivered to the Bank on or before July 1, 2011, and no later than the first day of each month thereafter. The Debtor will not use the Bank's cash collateral to fund the Monthly Payments or any portion thereof and will continue to segregate the Bank's cash collateral from the Debtor's unencumbered cash. If the DIP Account lacks sufficient unencumbered funds to pay a particular Monthly Payment, the Debtor's principal, Roger Meyer, may contribute funds to the DIP Account as needed to enable the Debtor to pay the Monthly Payment from the DIP Account. All contributions by Mr. Meyer to the DIP Account will constitute equity contributions to the Debtor. The Monthly Payment(s) will be delivered to the Bank at this address: Montecito Bank & Trust c/o Jason Dittman, Loan Services 6950 Hollister Avenue, Suite 102 Goleta, CA 93117 2. If the Debtor fails to timely pay a Monthly Payment, a payment default will occur. Upon a Payment Default, the Bank may notify the Debtor and, as a courtesy, its bankruptcy counsel in writing of such default by facsimile, overnight mail, or email. 3. If the Debtor fails to cure a Payment Default within 10 days after receipt of such notice, the Bank may file and serve a declaration under penalty of perjury specifying the Payment Default, together with a proposed order terminating the automatic stay with respect to the real property which is the Bank's collateral, which order the Court will grant without further notice or hearing. About Center Court Based in Agoura Hills, California, Center Court Partners LLC owns a commercial property located at 29501 Canwood Street, Agoura Hills, Calif. The monthly rent receipts are the Debtor's sole source of income. The Company filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-13715) on March 25, 2011. Judge Maureen Tighe presides over the case. Martin D. Gross, Esq., represents the Debtor as counsel. The Debtor estimated both assets and debts between $10 million and $50 million as of the Chapter 11 filing. CHARBEL FAHED: Inks Stipulation With PNC Bank Over Property Use --------------------------------------------------------------- Bankruptcy Judge Paul Mannes signed off on a stipulation and consent order governing Charbel Toufique Fahed's use of property wherein PNC Bank, National Association, asserts an interest. Prior to the Petition Date, PNC lent $100,000 and $650,000 to BK&F LLC d/b/a Laziza Bistro. PNC asserts that to guarantee repayment of the Loans, on Dec. 15, 2006, the Debtor executed a U.S. Small Business Administration Unconditional Guarantee Agreements and a Commercial Guaranty whereby he unconditionally guarantee the prompt payment and performance of all debts owed by BK&F to PNC. PNC asserts a claim against the Debtor for $801,967, as of the Petition Date, including interest and other charges in addition to the unpaid principal balances. PNC asserts that the obligations of the Debtor under the Guaranty Agreements are secured by a Deed of Trust dated Dec. 15, 2006, granting PNC a lien on real property located in Fairfax County, Virginia, commonly known as 7009 Oriole Avenue, Springfield, Virginia. The Debtor intends to make the Property his primary residence in the near future as part of his reorganization. The Parties have agreed that the value of the Property is $320,000. Pursuant to the Stipulation and Consent Order, the automatic stay imposed by 11 U.S.C. Sec. 362(a) is modified to permit PNC to exercise its non-bankruptcy rights and remedies with regard to the Property. The Debtor will retain possession of the Property. As adequate protection for the Debtor's use of the Property, and any diminution of the value of the Property arising on account of the Debtor's use thereof, the Debtor will tender to PNC, in immediately available funds, consecutive monthly adequate protection payments in the amount of $1,113.96, beginning July 1, 2011, which will be applied by PNC to reduce the outstanding indebtedness owed by the Debtor to PNC. The Debtor will at all times maintain insurance on the Property. The Debtor, creditors and parties-in-interest will have the absolute right to challenge or dispute the existence, extent, validity, and enforceability of the Guaranty Agreements. The Debtor, creditors and parties-in-interest will have until mid- August to commence such challenge or dispute. Should the parties fail to contest the Guaranty Agreements within the period, the Guaranty Agreements will deemed valid and enforceable. A copy of the July 26, 2011 Stipulation and Consent Order is available at http://is.gd/8Kqg7Xfrom Leagle.com. Marc E. Shach, Esq., and Susan C. Scanlon, Esq. -- marc.shach@weinstocklegal.com and susan.scanlon@weinstocklegal.com -- at Weinstock, Friedman & Friedman, P.A., in Baltimore, Maryland, serve as counsel for PNC Bank. About Charbel Toufique Fahed Charbel Toufique Fahed filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 11-16399) on March 29, 2011. John D. Burns, Esq., at The Burns Law Firm, LLC, in Greenbelt, Maryland, represents Charbel Toufique Fahed. CHARLESTON ASSOCIATES: Committee Wants to File Own Plan ------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 case of Charleston Associates LLC asks the U.S. Bankruptcy Court for the District of Delaware not to grant the Debtor's proposed extension of the exclusive periods to file a Chapter 11 plan and solicit acceptances. Steven K. Kortanek, Esq., at Womble Carlyle Sandridge & Rice PLLC, in Wilimington, Delaware, contends that the Debtor has already sought and received five extensions of the exclusive periods and despite those extensions, the Debtor has been unable to put a plan together and is now seeking to get a sixth extension. "It is time for the exclusivity to end and for the Committee to have an opportunity to explore putting together its own plan of reorganization in order to more quickly and efficiently progress the Debtor's bankruptcy case," Mr. Kortanek asserts. The Debtor is asking the Court to further extend the exclusive periods to file a plan and to obtain acceptances of that plan until July 29, 2011, and Sept. 28, 2011, respectively. The Debtor is currently seeking an extension to attempt to negotiate a consensual plan of reorganization. About Charleston Associates Based in Las Vegas, Nevada, Charleston Associates, LLC, is the successor by merger to Boca Fashion Village Syndications Group. It owns a portion of a large community shopping center located in Las Vegas. The entire shopping center is known as The Shops at Boca Park. It encompasses almost 55 acres and is situated at the northeast corner of the intersection of Charleston Boulevard and Rampart Boulevard. Charleston's current portion of the shopping center consists of a 20.4 acre parcel located at 700-750 S. Rampart Boulevard, Las Vegas, that is commonly known as Boca Fashion Village. Boca Fashion contains, among other things, a 130,000+ square foot parcel of real estate that is currently leased to Sears Roebuck & Company. Charleston Associates filed for Chapter 11 protection (Bankr. D. Del. Case No. 10-11970) on June 17, 2010. Judge Kevin J. Carey presides over the case. Neal L. Wolf, Esq., Dean C. Gramlich, Esq., and Jordan M. Litwin, Esq., at Neal Wolf & Associates, LLC, in Chicago, Ill., represent the Debtor as counsel. Bradford J. Sandler, Esq., at Pachulski Stang Ziehl & Jones, LLP, in Wilmington, Del., represents the Debtor as Delaware counsel. In its schedules, the Debtor disclosed $92,348,446 in assets and $65,064,894 in liabilities. Attorneys at Brinkman Portillo Ronk, PC, represents the Official Committee of Unsecured Creditors as counsel. Thomas M. Horan, Esq., at Womble Carlyle Sandridge & Rice, PLLC, in Wilmington, Del., represents the Official Committee of Unsecured Creditors as Delaware counsel. CHART INDUSTRIES: S&P Rates $230-Mil. Sr. Sub. Notes at 'B+' ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its issue-level and recovery ratings to Chart Industries Inc.'s proposed $230 million convertible senior subordinated notes due 2018. The issue rating is 'B+' (one notch below the corporate credit rating). "At the same time, we assigned a recovery rating of '5', indicating our expectation of modest (10%-30%) recovery in the event of a payment default," S&P related. "Our recovery analysis incorporates Chart Industries' plan to use the proceeds from the proposed notes offering to, among other things, redeem its senior subordinated notes due 2015," said Standard & Poor's credit analyst Patrick Lee. Garfield Heights, Ohio-based Chart Industries manufactures equipment used for low-temperature and cryogenic applications for energy, industrial gas, and biomedical customers. "Our ratings on the company reflect its participation in the highly cyclical gas processing market, its small size and scale, and an uneven revenue stream in the company's energy and chemicals segment. The ratings also incorporate the company's modest capital spending, improving product and geographic diversification, and solid liquidity," S&P related. Ratings List Chart Industries Inc. Corporate Credit Rating BB-/Stable New Rating Chart Industries Inc. $230 mil convert sr sub notes due 2018 B+ Recovery Rating 5 CHINA CABLECOM: UHY Vocation Raises Going Concern Doubt ------------------------------------------------------- China Cablecom Holdings, Ltd., filed on July 28, 2011, with the U.S. Securities and Exchange Commission its annual report on Form 20-F for the year ended Dec. 31, 2010. UHY Vocation HK CPA Limited, in Hong Kong, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses during 2010 and 2009, and has relied on debt and equity financings to fund their operations. The Company reported a net loss of US$27.0 million on US$54.0 million of revenue for 2010, compared with a net loss of US$56.2 million on $45.6 million of revenue for 2009. The Company's balance sheet at Dec. 31, 2010, showed US$179.7 million in assets, US$156.1 million of liabilities, and US$23.6 million of stockholders' equity. A copy of the Form 20-F is available at http://is.gd/unPoev Based in Jinan, in the PRC, China Cablecom Holdings, Ltd. (NASDAQ: CABL) -- http://www.chinacablecom.net/-- is a joint-venture provider of cable television services in the PRC, operating in partnership with a local state-owned enterprise authorized by the PRC government to control the distribution of cable TV services ("SOE"). CHINA VILLAGE: Michael Isaacs Appointed as Resolution Advocate -------------------------------------------------------------- The Hon. Arthur S. Weissbrodt of the U.S. Bankruptcy Court for the Northern District of California approved a stipulation, appointing a resolution advocate in the Chapter 11 case of China Village, LLC. Pursuant to a stipulation with Cathay Bank, Michael Isaacs, Esq. is appointed as the resolution advocate, and Charles Maher, Esq. as the alternate, which is assigned to the Bankruptcy Dispute Resolution Program in the District. Cathay Bank is represented by: Bernard Given, Esq. 6500 Wilshire Blvd., 17th Floor Los Angeles, CA 90048-4920 Tel: (323) 852-1000 About China Village Milpitas, California-based China Village, LLC, is a limited liability company that was created on May 10, 2005. The members of the Debtor are Thomas Nguyen, the Responsible Individual in this case (8%), Joseph Nguyen (9%) and Tuyet Minh Le (83%). The Debtor is in the business of purchasing, leasing, renovating and selling commercial real property. The Debtor currently owns a significant commercial property in Fremont, California, that has 370,019 square feet of rentable space on 25.07 acres of land. China Village filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 10-60373) on Oct. 4, 2010. Lawrence A. Jacobson, Esq., and Sean M. Jacobson, Esq., at Cohen and Jacobson, LLP, assist the Debtor in its restructuring effort. R&K Interests, Inc. d/b/a Investors Property Services serves as the Debtor's Property Manager. The Debtor estimated its assets and debts at $10 million to $50 million as of the Petition Date. CHINA VILLAGE: Anew Law Approved to Assist with Tenant Eviction --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California authorized China Village, LLC, to employ ANEW LAW CORPORATION 595 Market Street, Suite 1350 San Francisco, CA 94105 Tel: (415) 867-5797 As part of its business operations, the Debtor is required to enter into leases with prospective tenants, and, when necessary, evict tenants (for non-payment of rent, non-monetary breaches of lease, expiration of leases, abandonment, or other cause). Anew Law, as special counsel is expected to: a. file necessary unlawful detainer proceedings, including service of necessary 3 day, 30 day, 60 day, or other notices as required by law; b. arrange for service of necessary defendants; c. pursue the unlawful detainer actions to judgment; d. obtain and seek enforcement of writs of possession. Anew Law will receive a flat fee of $1,500 for uncontested cases, with contested cases billed at the flat rate and an additional cost of $250 per hour for subsequent services provided in the event that the case becomes contested. The Debtor will also pay approved filing fees and costs incurred as approved by the Court. To the best of Debtor's knowledge, Anew Law is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About China Village Milpitas, California-based China Village, LLC, is a limited liability company that was created on May 10, 2005. The members of the Debtor are Thomas Nguyen, the Responsible Individual in this case (8%), Joseph Nguyen (9%) and Tuyet Minh Le (83%). The Debtor is in the business of purchasing, leasing, renovating and selling commercial real property. The Debtor currently owns a significant commercial property in Fremont, California, that has 370,019 square feet of rentable space on 25.07 acres of land. China Village filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 10-60373) on Oct. 4, 2010. Lawrence A. Jacobson, Esq., and Sean M. Jacobson, Esq., at Cohen and Jacobson, LLP, assist the Debtor in its restructuring effort. R&K Interests, Inc. d/b/a Investors Property Services serves as the Debtor's Property Manager. The Debtor estimated its assets and debts at $10 million to $50 million as of the Petition Date. CHIQUITA BRANDS: S&P Rates $480-Mil. Credit Facilities at 'BB-' --------------------------------------------------------------- Standard & Poor's Ratings Services is assigning issue-level and recovery ratings to Cincinnati-based Chiquita Brands International Inc.'s (CBII's) new $480 million senior secured credit facilities, consisting of a $150 million revolving credit facility and a $330 million term loan, each due 2016. "We assigned the secured credit facilities a 'BB-' issue-level rating (two notches higher than the corporate credit rating on Chiquita), with a recovery rating of '1', indicating our expectation for very high (90% to 100%) recovery in the event of a payment default. Chiquita Brands LLC (CBLLC) is the borrower under the credit facilities," S&P related. The company intends to use the proceeds from these new facilities to refinance its existing $310 million senior secured credit facilities at CBLLC and to fund a combined tender offer for and redemption of all of its outstanding $177 million 8.875% senior notes due 2015 that were previously issued by CBII. As a result of these transactions, senior secured debt at the operating company level has increased, leading to reduced recovery expectations for the unsecured debt at CBII, given the increased amount of priority secured debt following the refinancing. "The issue-level rating for the senior unsecured notes at CBII (and the preliminary rating on Chiquita's senior unsecured shelf registration) is 'B-' with a recovery rating of '5', indicating our expectation for modest (10% to 30%) recovery in the event of a payment default. We are withdrawing the ratings on the company's existing senior secured credit facilities following the close of this refinancing transaction. We will withdraw the ratings on CBII's 8.875% senior notes due 2015 upon the close of the redemption of these notes," S&P related. The 'B' long-term corporate credit rating on Chiquita and the stable outlook remain unchanged. "We characterize Chiquita's business risk profile as vulnerable and its financial risk profile as highly leveraged. Our ratings on the company reflect the company's high debt leverage and participation in the competitive, commodity-oriented, seasonal, and volatile fresh produce industry, which we believe is subject to political and economic risks. Following these proposed transactions, we expect Chiquita's liquidity to remain adequate and its covenant cushion to remain well above 20%," S&P stated. Ratings List Chiquita Brands International Inc. Corporate credit rating B/Stable/-- Ratings assigned Chiquita Brands LLC Senior secured $150 mil. revolver due 2016 BB- Recovery rating 1 $330 mil. term loan due 2016 BB- Recovery rating 1 CHRISTIAN BROTHERS: Seeks More Time to Propose Payment Plan ----------------------------------------------------------- Dow Jones' DBR Small Cap reports that Christian Brothers Institute Inc. is seeking more time to file its creditor-payment plan as the Roman Catholic lay order works to determine how it will treat survivors of sexual abuse at its schools across the U.S. and Canada. About The Christian Brothers' Institute The Christian Brothers' Institute in New Rochelle, New York, is a domestic not-for-profit 501(c)(3) corporation organized under Sec. 102(a)(5) of the New York Not-for-Profit Corporation Law. CBI was formed to establish, conduct and support Catholic elementary and secondary schools principally throughout New York State. The Christian Brothers of Ireland, Inc., in Chicago, Illinois, is a domestic not-for-profit 501(c)(3) corporation organized under the Not-for-Profit Corporation Law of the State of Illinois. CBOI was formed to establish, conduct and support Catholic elementary and secondary schools principally throughout the State of Illinois, as well as other spiritual and temporal affairs of the former Brother Rice Province of the Congregation of Christian Brothers. CBI and CBOI depend upon grants and donations to fund a portion of their operating expenses. The Christian Brothers' Institute and The Christian Brothers of Ireland filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 11-22820 and 11-22821) on April 28, 2011. Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, serves as the Debtors' bankruptcy counsel. CBI estimated its assets at $50 million to $100 million and debts at $1 million to $10 million. CBOI estimated its assets at $500,000 to $1 million and debts at $1 million to $10 million. CHRYSLER LLC: Ohio County Claim Reclassified as General Unsecured ----------------------------------------------------------------- At the behest of the Old Carco Liquidation Trust, Chief Bankruptcy Judge Arthur J. Gonzalez held that the tax claims filed by John A. Donofrio, Summit County Fiscal Officer, in Akron, Ohio, are general unsecured claims -- and not priority tax claims under 11 U.S.C. Section 507(a)(8) -- pursuant to a July 25, 2011 opinion, a copy of which is available at http://is.gd/aslYATfrom Leagle.com. About Chrysler Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of Dec. 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. As part of the deal, Fiat acquired a 20% equity interest in Chrysler Group. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. The U.S. and Canadian governments provided Chrysler with $4.5 billion to finance its bankruptcy case. Those loans are to be repaid with the proceeds of the bankruptcy estate's liquidation. In April 2010, the Bankruptcy Court confirmed Chrysler's repayment plan. COMMERCIAL VEHICLE: Incurs $2.17 Million Net Loss in Q2 ------------------------------------------------------- Commercial Vehicle Group, Inc., reported a net loss of $2.17 million on $206.77 million of revenue for the three months ended June 30, 2011, compared with net income of $693,000 on $142.35 million of revenue for the same period a year ago. The Company also reported net income of $1.11 million on $389.28 million of revenue for the six months ended June 30, 2011, compared with net income of $1.37 million on $288.75 million of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2011, showed $392.21 million in total assets, $387.09 million in total liabilities, and $5.11 million in total stockholders' investment. "This past quarter marks our highest reported revenues since the second quarter of 2008 and our highest operating income, excluding impairment charges or gains on the sale of assets, since the fourth quarter of 2006. We are pleased with the continued upward trend in certain end markets and related revenues, as well as our sequential and year-over-year improvement in operating income, and remain committed to improving our operating efficiencies as we move forward," said Mervin Dunn, President and Chief Executive Officer of Commercial Vehicle Group. "With our strong financial structure and liquidity position, we also remain heavily focused on seeking opportunities that fit our long-term strategic goals for growth and diversification," added Mr. Dunn. A full-text copy of the press release announcing the financial results is available for free at http://is.gd/ure12k About Commercial Vehicle Group New Albany, Ohio-based Commercial Vehicle Group, Inc., (Nasdaq: CVGI) supplies fully integrated system solutions for the global commercial vehicle market, including the heavy-duty truck market, the construction and agricultural markets, and the specialty and military transportation markets. The Company has facilities located in the United States in Arizona, Indiana, Illinois, Iowa, North Carolina, Ohio, Oregon, Tennessee, Virginia and Washington and outside of the United States in Australia, Belgium, China, Czech Republic, Mexico, Ukraine and the United Kingdom. * * * Commercial Vehicle carries a 'Caa2' Corporate Family Rating and 'Caa2/LD' Probability of Default Rating from Moody's. It has 'CCC+' issuer credit ratings from Standard & Poor's. In mid-October 2010, Moody's Investors Service upgraded Commercial Vehicle Group, Inc.'s Corporate Family Rating to Caa1 from Caa2, and revised the ratings outlook to positive from negative. These positive actions recognize the continuing improvement in the build rates for commercial vehicles and the realized benefits of the company's operating and capital restructurings. According to Moody's, the Caa1 CFR reflects modest size, high debt leverage, and exposure to highly cyclical commercial vehicle end markets. Demand for commercial vehicle components is sensitive to both economic cycles and regulatory implementation schedules. As reported by the TCR on April 12, 2011, Standard & Poor's Ratings Services said it raised its corporate credit rating on New Albany, Ohio-based Commercial Vehicle Group Inc. (CVG) to 'B-' from 'CCC+'. "The upgrade reflects our assumption that CVG can improve EBITDA and cash flow in the next two years, because we believe commercial truck production volumes will continue to rise year-over-year in 2011 and 2012," said Standard & Poor's credit analyst Nancy Messer. Heavy-duty truck production increased by a meaningful 30% in 2010, leading to a 30% year-over-year sales increase. COMPLETE PRODUCTION: S&P Raises Corporate Credit Rating to 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Houston-based oilfield services provider Complete Production Services Inc. (Complete) to 'BB-' from 'B+'. The outlook is stable. "At the same time, we raised the issue rating on the company's 8% senior unsecured notes to 'BB-' (the same as the corporate credit rating) from 'B+'. The recovery rating remains unchanged at '3', indicating our expectation of meaningful (50% to 70%) recovery in the event of a default," S&P said. "The upgrade follows the continued improvement of Complete's operating and financial performance over the past few quarters," said Standard & Poor's credit analyst Patrick Lee, "particularly in its completion and production services segment." "Over the near term, we expect the North American oilfield services market to stabilize or see a slight improvement, which should enable Complete to generate solid cash flow and maintain its strong credit metrics for the rating." CONSOLIDATED HORTICULTURE: Removal Period Extended Until Dec. 30 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended until Dec. 30, 2011, the period which Post-Sale Co II LLC, formerly known as Consolidated Horticulture LLC, et al., may file notices of removal with respect to civil actions pending as of the Petition Date. The Debtors filed their request for extension before the June 30, removal deadline. The Debtors needed the extension to conclude their review of the actions to determine whether there are any that may need to be removed. About Consolidated Horticulture Irvine, California-based Consolidated Horticulture Group LLC, doing business as Hines Nurseries LLC -- http://www.hineshorticulture.com/-- operates nursery facilities located in Arizona, California, Oregon and Texas. Through its affiliate, the company produces and distributes horticultural products. Black Diamond Capital Management LLC purchased Hines Nurseries Inc. in a bankruptcy sale in January 2009. The resulting reorganization plan, confirmed in January 2009, paid secured creditors in full on their $35.9 million in claims while providing as much as $12 million toward debt owing to suppliers both before and after the bankruptcy filing. The business bought by Black Diamond was renamed to Consolidated Horticulture. Consolidated Horticulture and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 10-13308) on Oct. 12, 2010. Laura Davis Jones, Esq. and Timothy P. Cairns, Esq. at Pachulski Stang Ziehl & Jones LLP, serve as Delaware counsel to the Debtors. Attorneys at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., serve as bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Lowenstein Sandler PC as counsel and Blank Rome LLP as co-counsel. Consolidated Horticulture estimated $100 million to $500 million in assets and $50 million to $100 million in debts in the Chapter 11 petition. CORUS BANKSHARES: Has September Plan Confirmation Hearing --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Corus Bankshares Inc. returns to the bankruptcy court on Sept. 27 for a confirmation hearing to approve the Chapter 11 plan. Mr. Rochelle relates that last week, the bankruptcy court in Chicago approved the disclosure statement giving creditors the information they need in deciding how to vote on the plan. According to the Bloomberg report, the salient terms of the Plan are: * The Federal Deposit Insurance Corp. claims will be put into two classes, one for a priority claim and another for its nonpriority unsecured claim. Eventually, Corus doesn't believe the FDIC will have any valid priority claim to be paid in full ahead of unsecured creditors. For the unsecured claim that could be as much as $183.4 million, FDIC is expected to recover between 6.2% and 53.3%. * Holders of trust preferred securities, known as TOPrS, are to have a similar recovery for their $415.6 million in claims. * General unsecured creditors with claims totaling between $10 million and $21 million are to have an identical dividend. * Subordinated creditors and shareholders won't receive anything. The FDIC and Corus are in litigation over who owns $258 million in tax refunds. About Corus Bankshares Chicago, Illinois-based Corus Bankshares, Inc., is a bank holding company. Its lone operating unit, Corus Bank, N.A., was closed on Sept. 11, 2009, by regulators, and the Federal Deposit Insurance Corporation was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Chicago-based MB Financial Bank, National Association, to assume all of the deposits of Corus Bank. Corus Bankshares sought Chapter 11 protection (Bankr. N.D. Ill. Case No. 10-26881) on June 15, 2010, disclosing $314,145,828 in assets and $532,938,418 in liabilities as of the Chapter 11 filing. Kirkland & Ellis LLP's James H.M. Sprayregen, Esq., David R. Seligman, Esq., and Jeffrey W. Gettleman, Esq., serve as the Debtor's bankruptcy counsel. Kinetic Advisors is the Company's restructuring advisor. Plante & Moran is the Company's auditor and accountant. Kilpatrick Stockton LLP's Todd Meyers, Esq., and Sameer Kapoor, Esq.; and Neal Gerber & Eisenberg LLP's Mark Berkoff, Esq., Deborah Gutfeld, Esq., and Nicholas M. Miller, Esq., represent the official committee of unsecured creditors. CROATAN SURF: Bankr. Administrator Opposes Plan Confirmation ------------------------------------------------------------ Marjorie K. Lynch, the U.S. Bankruptcy Administrator for the Eastern District of North Carolina, asks the U.S. Bankruptcy Court to deny confirmation of the Plan as filed pending proof that Croatan Surf Club, LLC's Plan is feasible at the confirmation hearing. The Bankruptcy Administrator notes that the Debtor has filed litigation against Royal and the Bank of Currituck in Dare County North Carolina alleging causes of action ranging from fraud to breach of contract to various tort claims. At the current time, the individual units are not listed for sale. Previously, the Debtor had marketed the units for sale and will do so again once the Debtor's plan is confirmed. Presently, the Debtor leases the units for short term rentals during all periods of the year, and leases units for long term rentals during the off season. The Court on March 11, 2011, issued an amended order conditionally approving the Disclosure Statement dated Feb. 18, 2011, explaining the Second Amended Plan. A copy of the Second Amended Disclosure Statement is available for free at http://bankrupt.com/misc/CroatanSurf_AmendedDS.pdf The Chapter 11 Plan According to the Second Amended Disclosure Statement, the Debtor's Plan establishes 10 classes for claims. Classes 1, 2, 3 and 4 consist of the claims of the Internal Revenue Service, the North Carolina Department of Revenue, Employment Security Commission and Dare County. The Debtor does not believe that any of these parties hold prepetition unsecured priority Claims. To the extent that these Claims exist, they will be paid on the Extended Maturity Date as described in the Plan. Classes 5, 6 and 7 consist of the Allowed Secured Claims of creditors, including the Lender and Mezzanine Lender, which are secured by various assets of the Debtor. Croatan Surf Club Condominium Association, Inc. would also have an Allowed Secured Claim for any unpaid dues, assessments, or other charges. Each of the Allowed Secured Claims will be paid as provided by the Plan. Class 9 consists of the Claims of unsecured creditors holding Claims against the Debtor, except for those Claims of insiders. These creditors will be paid in full as set forth in the Plan. The Debtor may object to certain unsecured Claims for reasons including, but not limited to, their improper classification, an improper amount claimed, or the fact that the Claim is not owed by the Debtor. Class 10 consists of the Claims of insiders. This class does not include the membership interests of the insiders. These claims will be paid in full, after the payment of all other Claims. The Bankruptcy Administrator is represented by: Parker M. Worth, Esq., staff attorney 434 Fayetteville Street, Suite 620 Raleigh, North Carolina 27601 Tel: (919) 856-4886 Ext. 25 Fax: (919) 856-4692 E-mail: Parker_Worth@nceba.uscourts.gov About Croatan Surf Kill Devil Hills, North Carolina-based Croatan Surf Club, LLC, owns a 36 unit ocean-front condominium building in Dare County, North Carolina. It filed for Chapter 11 bankruptcy protection (Bankr. E.D. N.C. Case No. 11-00194) on Jan. 10, 2011. Walter L. Hinson, Esq., and Maureen Radford, at Hinson & Rhyne, P.A., in Wilson, N.C., represent the Debtor as counsel. No creditors committee has been formed in this case. In its schedules, the Debtor disclosed $26,151,718 in assets and $19,350,000 in liabilities. CRYSTAL CATHEDRAL: Says It Won't Sell, Aims to Raise $50-Mil. ------------------------------------------------------------- The International Board of Directors for the Crystal Cathedral Ministries announced Sunday that it has voted to forego choosing a buyer of its Crystal Cathedral property, as part of its bankruptcy reorganization plan. "The Crystal Cathedral is not for sale", said Walt Kallestad, Founder and Senior Pastor for the Church of Joy, Glendale, Arizona, and Crystal Cathedral Ministries Board Member, from the pulpit of the Crystal Cathedral at Sunday morning services, July 31, 2011. The press release by Crystal Cathedral said that, in this vote, the board has chosen to step forward in faith believing that God, in His perfect timing, will provide all the funds necessary to pay every creditor in full and keep the ministry campus in the hands of the Crystal Cathedral Ministries. "The board feels its great responsibility toward all of our vendors and other creditors, to pay them 100% of what is owed as soon as possible," says Sheila Schuller Coleman, Senior Pastor, "but also a responsibility to the local members and viewers of our nationally and internationally televised Hour of Power to retain the ministry's Orange County headquarters intact." "Through our filing of Chapter 11 last October", Coleman said in the pulpit, Sunday, "I believe God has used it to turn the eyes of the world toward the Crystal Cathedral because He wants to make a big, bold statement, and, as a faith-based ministry, it's important to put our faith in God in this matter. We cannot teach about faith without living out faith in our actions, especially as it concerns a decision such as this. Taking this kind of stand assures members and viewers that we are committed to them and to their spiritual well-being, now and into the future. The ministry has a commitment to our local congregations, our international viewers, Crystal Cathedral Schools' students & parents, and the families of loved ones laid to rest in the Crystal Cathedral Memorial Gardens." According to the statement by the church, the English-speaking, Spanish-speaking, and Arabic-speaking congregations at the Crystal Cathedral are all combining in prayer to seek God's blessing of a 50 million dollar miracle. "We're asking our people to 'Walk by faith, not by sight,'" said Sheila, "and to believe God's promise and plan as found in Jeremiah 29:11-14a , 'For I know the thoughts that I think toward you, says the LORD, thoughts of peace and not of evil, to give you a future and a hope. Then you will call upon Me and go and pray to Me, and I will listen to you. And you will seek Me and find Me, when you search for Me with all your heart. I will be found by you, says the LORD, and I will bring you back from your captivity.'" Dr. Coleman also said, "We have been deeply touched by the outpouring of admiration for our beautiful 40-acre garden grounds and its world class architecture. Many of the potential buyers are community and faith leaders that have gone to great lengths to honor the ministry that my father devoted his entire life to serving, and to him, personally, as their friend and colleague. We are truly humbled by their concern for us. More than ever, the Crystal Cathedral Ministry appreciates that our campus is a sacred treasure, and our reconstituted board has determined to 'practice what we have always preached' and to put into action the possibility thinking upon which this great ministry was founded 56 years ago." "We fully understand as a board that, by taking this stand of faith, the Creditors Committee will move on its own in the courts to initiate a sale process," board member Jim Penner said, "but the final word on this campus and this ministry will be up to God Almighty." Mr. Kallestad concluded, "The Crystal Cathedral is a mission center God has built and God will sustain it. "I'm thrilled that our board has now chosen to set this example stepping forward in faith! I'm humbled and honored to stand with fellow believers who are willing to proclaim Jesus Christ as the head of this church. Get ready to witness a miracle, the best days for this ministry are ahead!" Contact information: John Charles Crystal Cathedral Ministries Tel: (714) 971-4015 E-mail: johnc@crystalcathedral.org Sale Previously Scheduled Bill Rochelle, the bankruptcy columnist for Bloomberg News, first reported about Crystal Cathedral's plans to raise $50 million in order to thwart the sale process. Mr. Rochelle recounts that the church itself began the sale process by proposing a plan where the campus would be sold to Greenlaw Partners LLC and leased back in a $46 million transaction. Greenlaw would develop some of the property. Chapman University made a similar $46 million proposal. According to Mr. Rochelle, needing a larger cathedral, the Roman Catholic Diocese of Orange County, California, later made an offer to purchase the church and its property for $50 million. In bankruptcy court Monday in Santa Ana, California, the creditors' committee was scheduled to ask the judge to terminate the church's exclusive right to propose a Chapter 11 plan. The judge previously approved sale procedures where bids were due July 22 in advance of an Aug. 5 auction and a hearing on Aug. 9 to approve the sale. About Crystal Cathedral Crystal Cathedral Ministries is a Southern California-based megachurch founded by television evangelist Robert Schuller. The church, known for its television show "The Hour of Power." Mr. Schuller retired from his role as senior pastor of Crystal Cathedral in 2006. His daughter Sheila Schuller Coleman has been senior pastor since July 2009. Contributions declined 24 percent in 2009, in part on account of "unsettled leadership." Crystal Cathedral filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. 10-24771) on Oct. 18, 2010. The Debtor disclosed $72,872,165 in assets and $48,460,826 in liabilities as of the Chapter 11 filing. Marc J. Winthrop, Esq., at Winthrop Couchot P.C. represent the Debtor. Todd C. Ringstad, Esq., at Ringstad & Sanders, LLP, represents the Official Committee of Unsecured Creditors. CRYSTAL CATHEDRAL: U.S. Trustee Asked to Probe Board Shake-up ------------------------------------------------------------- The Los Angeles Times reports that the organizers of an online petition seeking an independent board of directors for Crystal Cathedral called on the federal bankruptcy trustee to "investigate the validity" of the church's recent board shake-up. The Garden Grove church announced that its board had been expanded from five members to nine and restored founder Robert H. Schuller to voting status. The new configuration means five members are independent. According to the report, the new board consists of Schuller; his wife, Arvella; daughter and senior pastor Sheila Schuller Coleman; son-in-law Jim Penner; and five independent members. Schuller Coleman serves as a non-voting member and interim chairwoman. The report says the board is considering at least four offers to buy the property, which would allow the church to exit bankruptcy. About Crystal Cathedral Crystal Cathedral Ministries is a Southern California-based megachurch founded by television evangelist Robert Schuller. The church, known for its television show "The Hour of Power." Crystal Cathedral filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. 10-24771) on Oct. 18, 2010. The Debtor disclosed $72,872,165 in assets and $48,460,826 in liabilities as of the Chapter 11 filing. Marc J. Winthrop, Esq., at Winthrop Couchot P.C. represent the Debtor. Todd C. Ringstad, Esq., at Ringstad & Sanders, LLP, represents the Official Committee of Unsecured Creditors. DAZ VINEYARDS: Silicon Valley Opposes Disclosure Statement ---------------------------------------------------------- Silicon Valley Bank asks the U.S. Bankruptcy Court for the Central District of California not to approve the disclosure statement filed by Daz Vineyards LLC because it does not contain adequate information. Specifically, Silicon Valley points out that the Disclosure Statement fails to sufficiently disclose the treatment of Silicon Valley's claim under the Chapter 11 Plan of Reorganization and fails to adequately disclose the proposed new equity investment to fund the Plan. According to the Disclosure Statement, the Debtor's Plan will be funded by a combination of the Debtor's continued business operations, and a new preferred equity investment. The reorganized debtor intends to divide into two entities, one holding the real property asset and the other holding the winery operation. The Debtor anticipates the new equity investors will purchase preferred investments at the winery level. Confirmation of the plan authorizes the Debtor to divide the business and sell preferred equity investments. A full-text copy of the Disclosure Statement may be accessed for free at http://bankrupt.com/misc/DazVineyards_DS.pdf Los Olivos, California-based DAZ Vineyards, LLC, dba Demetria Estate Winery, filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 10-10689) on Feb. 15, 2010. William C. Beall, Esq., at Beall and Burkhardt, serves as the Debtor's bankruptcy counsel. The Debtor disclosed $32,071,232 in assets and $11,418,337 in liabilities in its schedules. DELTA PETROLEUM: 2C Well Begins Hydrocarbons Production ------------------------------------------------------- Delta Petroleum Corporation announced that the 2C-433D well began producing hydrocarbons on July 20, 2011, at a choke-restricted rate of 5.4 million cubic feet of gas per day (MMcf/d) with 8360 psi of flowing tubing pressure. Gas sales from the well began on July 21. The well continues to produce at a choke restricted rate of between 3.5 and 5 MMcf/d with a stable flowing tubing pressure of 8160 psi. The well has also just started to produce some condensate with 20 bpd measured. Carl Lakey, Delta's President and CEO stated, "We are pleased to announce the initial results of the 2C well. We believe that this well's result combined with other Delta operated shale wells and similar wells from other operators in the Piceance Basin, validate the resource potential of the Niobrara and Mancos shales in the basin. It is important to note that the 2C well is producing from the only 1300' of pay in the Niobrara and Frontier. Roughly 2700' of gross potential hydrocarbon bearing pay remain uncompleted in the Mancos Shale and Corcoran formations. The Williams Fork also remains uncompleted here. It is still too early to provide an estimate of total EUR of the well. However, we are very encouraged by the measured rates to date, and remain optimistic that the Niobrara and Mancos shales will be highly economic. Delta holds approximately 22,400 net acres of leasehold in the Vega area, including deep rights to substantially all of that acreage. Early indications are that the entire position is prospective for shale development in the Mancos, Niobrara and Frontier. We invite our stakeholders to listen to our upcoming Second Quarter earnings call where we expect to provide an additional update to the 2C well and other operational developments. We will update sooner if it is appropriate. We are excited by the results obtained to date, and more importantly by the potential size and scope of the resource that we are now testing." Delta will be holding the second quarter earnings conference call on Thursday, August 4 at 10:00 AM Mountain Time. About Delta Petroleum Corp Delta Petroleum Corporation -- http://www.deltapetro.com/-- is an oil and gas exploration and development company based in Denver, Colorado. The Company's core area of operation is in the Rocky Mountain region, where the majority of its proved reserves, production and long-term growth prospects are located. Its common stock is listed on the NASDAQ Capital Market System under the symbol "DPTR." The Company reported a net loss of $30.26 million on $23.05 million of total revenue for the three months ended March 31, 2011, compared with a net loss of $15.99 million on $29.17 million of total revenue for the same period during the prior year. The Company's balance sheet at March 31, 2011, showed $1.01 billion in total assets, $527.04 million in total liabilities, and $483.75 million in total equity. As reported by the TCR on March 18, 2011, KPMG LLP, in Denver, Colorado, noted that due to continued losses and limited borrowing capacity the Company is evaluating sources of capital to fund the Company's near term debt obligations. "There can be no assurances that actions undertaken will be sufficient to repay obligations under the credit facility when due, which raises substantial doubt about the Company's ability to continue as a going concern." DIGITILITI INC: R.M. Rickenbach Resigns from Board -------------------------------------------------- R.M. Rickenbach tendered his resignation from the Board of Directors of the Company on July 22, 2011. About Digitiliti, Inc. St. Paul, Minnesota-based Digitiliti, Inc.'s business is developing and delivering storage technologies and methodologies enabling its customers to manage, control, protect and access their information and data with ease. The Company's core business is providing a cost effective on-line data protection solution to the small to medium business ("SMB") and small to medium enterprise ("SME") markets through its DigiBAK service. This on- line data protection solution helps organizations properly manage and protect their entire network from one centralized location. The Company reported a net loss of $6.41 million on $2.14 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $5.17 million on $3.19 million of revenue during the prior year. As reported by the TCR on April 18, 2011, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The independent auditors noted that the Company has suffered losses from operations and has a working capital deficit. The Company's balance sheet at March 31, 2011, showed $1.26 million in total assets, $2.64 million in total liabilities, and a $1.38 million total stockholders' deficit. DIRECTBUY HOLDINGS: S&P Keeps 'B' Corp. Rating on Watch Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services maintained the CreditWatch Negative listing for its ratings, including the 'B' corporate credit rating, on Merrillville, Ind.-based DirectBuy Holdings Inc. A number of U.S. states have filed lawsuits against DirectBuy, alleging that the company misrepresented the actual costs of the products marketed to its members. "In May 2011, we understand that a judge in Connecticut rejected the company's proposed nationwide settlement of a class-action lawsuit. We believe an adverse outcome to this legal issue could cause a continued decline in DirectBuy's membership base, where the company generates a majority of its revenues. We also think that if such a scenario unfolds, liquidity could weaken, and credit metrics could deteriorate to levels no longer supportive of the 'B' rating. DirectBuy experienced large declines in new membership growth during the first half of 2011, which dropped about 30% compared with the same time last year," S&P related. "In resolving the CreditWatch listing, we will focus our review on management's plans to address its legal issues and their potential impact on cash flows and liquidity, as well as strategies to improve membership growth," S&P said. DOT VN: Registrations of Vietnamese IDNs Exceed 294,000 ------------------------------------------------------- Dot VN, Inc., announced that since its official launch of the Vietnamese Native Language Internationalized Domain Names on April 28, 2011, registrations have exceeded 294,000 domain names which surpasses the total number of standard Vietnamese ccTLD registrations. "We are very pleased with the continued excitement and demand for the Vietnamese Native Language domain names," said Dot VN CEO Thomas Johnson. "We expect the continued explosive growth of the Vietnamese IDNs with the eventual launch of cutting edge features and applications such as social networking functionality, daily deals and group buying services which deliver the best offers and content to our users. Additionally, we believe that the IDNs will serve as the most effective way for advertisers and brand managers to reach and influence sophisticated and affluent Vietnamese consumers. Dot VN will continue to strive towards evolving the Vietnamese IDNs into the ultimate online community for the Country of Vietnam." About Dot VN Dot VN, Inc. (OTC BB: DTVI) -- http://www.DotVN.com/-- provides Internet and telecommunication services for Vietnam and operates and manages Vietnam's innovative online media web property, www.INFO.VN. The Company is the "exclusive online global domain name registrar for .VN (Vietnam)." Dot VN is the sole distributor of Micro-Modular Data Centers(TM) solutions and E-Link 1000EXR Wireless Gigabit Radios to Vietnam and Southeast Asia region. Dot VN is headquartered in San Diego, California with offices in Hanoi, Danang and Ho Chi Minh City, Vietnam. Dot VN was incorporated in the State of Delaware on May 27, 1998, under the name Trincomali Ltd. The Company's balance sheet at Jan. 31, 2011, showed $2.74 million in total assets, $10.92 million in total liabilities and $8.18 million in total shareholders' deficit. Dot VN reported a $7.3 million net loss on $1.1 million of revenues for the fiscal year ended April 30, 2010, compared with a $5.4 million net loss on $1.0 million of revenues for the same period a year ago. Following the Company's results for fiscal 2010, Chang G. Park CPA expressed substantial doubt against Dot VN's ability to continue as a going concern, citing the Company's losses from operations. DRYSHIPS INC: Inks Definitive Pact to Acquire OceanFreight ---------------------------------------------------------- DryShips Inc. and OceanFreight Inc. entered into a definitive agreement for DryShips to acquire the outstanding shares of OceanFreight for consideration per share of $19.85, consisting of $11.25 in cash and 0.52326 of a share of common stock of Ocean Rig UDW Inc., a global provider of offshore ultra deepwater drilling services that is 78% owned by DryShips. The Ocean Rig shares that will be received by the OceanFreight shareholders will be from currently outstanding shares held by DryShips. Under the terms of the transaction, the Ocean Rig shares will be listed on the Nasdaq Global Select Market upon the closing of the merger. Based on the July 25, 2011, closing price of 89.00 NOK ($16.44) for the shares of Ocean Rig on the Norwegian OTC, the transaction consideration reflects a total equity value for OceanFreight of approximately $118 million and a total enterprise value of approximately $239 million, including the assumption of debt. The transaction has been approved by the Boards of Directors of DryShips and OceanFreight, by the Audit Committee of the Board of Directors of DryShips, which negotiated the proposed transaction on behalf of DryShips, and by a Special Committee of independent directors of OceanFreight established to negotiate the proposed transaction on behalf of OceanFreight. The transaction will allow DryShips to acquire high-quality, modern drybulk vessels with attractive long-term charters. OceanFreight owns a fleet of six vessels, including four Capesize and two Panamax vessels with a weighted average age of six years and combined deadweight tonnage of 859,622 tons and has contracted to purchase five newbuilding Very Large Ore Carriers with a combined deadweight tonnage of approximately one million tons scheduled to be delivered in 2012 and 2013. DryShips will also benefit by assuming OceanFreight's attractively-priced credit facilities. Those facilities have an aggregate principal amount of $142.8 million, bear interest at Libor plus 250 basis points and have a final maturity of October 2015. George Economou, Chairman and CEO of DryShips, commented: "We are pleased to announce the merger agreement with OceanFreight. This transaction provides DryShips with a unique opportunity to consolidate the fragmented drybulk sector by acquiring a high quality, modern fleet with long-term charters to solid charterers. As previously announced, we have a fleet renewal plan that is being implemented by selling our older vessels. Given current freight market conditions, our preference is to acquire younger vessels with medium to long-term charters with moderate financing in place. The merger with OceanFreight offers us a unique opportunity to renew DryShips fleet, increase our presence in the Capesize/VLOC sector and augment our fixed revenues, and to do so at a low point in the cycle at what we consider to be an attractive valuation. We will achieve this through minimal use of cash and no issuance of additional DryShips equity while utilizing a mere 2.3% of our ownership stake in Ocean Rig in a manner that will also increase its public float. We will continue to monitor developments in the shipping industry selectively as the weak freight market may offer us further strategic acquisition opportunities. This merger is a testament to the strong position of DryShips and our belief in the long-term prospects of the drybulk freight market. Pro forma for the merger, Dryships will own a fleet of eighteen Capesize vessels, the largest among publicly traded shipping companies." Professor John Liveris, Chairman of the Board of Directors and Special Committee of OceanFreight, commented: "OceanFreight's merger with DryShips enables our shareholders to realize the inherent value created from the significant repositioning of the company's fleet and employment profile that our management team implemented over the past two years. This value unfortunately was not reflected in our stock trading price. Additionally, we are pleased to provide our shareholders with the opportunity to participate in Ocean Rig, a growing company in the ultra deep water drilling sector. We believe that OceanFreight's four-year journey in the public markets has reached a worthy homeport." The public shareholders of OceanFreight will receive the consideration for their shares pursuant to a merger of OceanFreight with a subsidiary of DryShips. The completion of the merger is subject to customary conditions, including clearance by the U.S. Securities and Exchange Commission of a registration statement to be filed by Ocean Rig to register the shares being paid by DryShips in the merger and the listing of those shares on the Nasdaq Global Select Market. The cash portion of the consideration is to be financed from DryShips' existing cash resources and is not subject to any financing contingency. The merger is expected to close in the fourth quarter of 2011. Simultaneously with the execution of the definitive merger agreement, DryShips, entities controlled by Mr. Anthony Kandylidis and OceanFreight, entered into a separate purchase agreement. Under this agreement, DryShips will acquire from the entities controlled by Mr. Kandylidis all their OceanFreight shares, representing a majority of the outstanding shares of OceanFreight, for the same consideration per share that the OceanFreight stockholders will receive in the merger. This acquisition is scheduled to close four weeks from the execution of the merger agreement, subject to satisfaction of certain conditions. DryShips intends to vote the OceanFreight shares so acquired in favor of the merger, which requires approval by a majority vote. The Ocean Rig shares to be paid by DryShips to the entities controlled by Mr. Kandylidis will be subject to a 6-month lock-up. Evercore Partners is serving as financial advisors to DryShips in connection with the transaction and Fried, Frank, Harris, Shriver & Jacobson LLP is serving as DryShips' legal counsel. Fearnley Fonds ASA is serving as financial advisors to the Special Committee of the OceanFreight Board of Directors and Seward & Kissel LLP is serving as the Committee's legal counsel. A full-text copy of the Form 8-K as filed with the SEC is available for free at http://is.gd/2T9ZLl About OceanFreight OceanFreight is an owner and operator of drybulk vessels that operate worldwide. OceanFreight owns a fleet of six vessels, comprised of six drybulk vessels (four Capesize and two Panamaxes) and has contracted to purchase five newbuilding Very Large Ore Carriers (VLOC) with a combined deadweight tonnage of about 1.9 million tons. OceanFreight Inc.'s common stock is listed on the NASDAQ Global Market where it trades under the symbol "OCNF". About Ocean Rig Ocean Rig is an international offshore drilling contractor providing oilfield services for offshore oil and gas exploration, development and production drilling, and specializing in the ultra-deepwater and harsh-environment segment of the offshore drilling industry. Ocean Rig owns and operates 9 offshore ultra deepwater drilling units, comprising of 2 ultra deepwater semisubmersible drilling rigs and 7 ultra deepwater drillships, 5 of which remain to be delivered to the company during 2011 and 2013. Ocean Rig's common stock currently trades on the OTC market maintained by the Norwegian Association of Stockbroking Companies under the symbol "OCRG." 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 billion in total assets and US$3.04 billion in total liabilities. DULCES ARBOR: Wants to Obtain DIP Loan to Pay Pierce & Little ------------------------------------------------------------- Dulces Arbor, S. de R.L. de C.V., asks the U.S. Bankruptcy Court for the Western District of Texas for authorization to obtain postpetition financing on a senior-lien secured basis. The Debtor proposes to use the loan to pay El Paso firm of Pierce & Little, P.C., to prosecute the turnover and patent infringement action. Dulces Arbor needs to file a turnover complaint for the patent infringement, against the occupant of the 330,000 plant and its affiliates-including two U.S. citizens and four U.S. corporations- who have systematically and oppressively acted together to deprive Dulces Arbor of its property, its rent, its past-due rent, and the value of the patent. If Dulces Arbor-which has its own U.S. affiliates-can recover those assets, it will be a relatively simple matter for Dulces Arbor to pay its creditors over a reasonable period of time through a Chapter 11 Plan. Dulces Arbor accordingly has no income at the present time. The insider debt-about $5,257,046 - is for loans to the company, from U.S. entities, that have kept Dulces Arbor afloat while the turnover defendants have been pocketing the Debtor's income. The effort to recover the present and past rents and patent damages, through turnover and Title 35 litigation, is expected to yield the income to make a full payout Plan feasible. Dulces Arbor must borrow the money to pay for that litigation, and other administrative expenses. Dulces Arbor has sources of that borrowing, who insist on having senior secured claims for the sums they loan to the Debtor. The persons who are willing to lend to the Debtor are four insiders: Raymond Ducorsky, who is Dulces Arbor's sole administrator; Raymond Ducorsky's eldest son Mark Ducorsky, who is acting as assistant to the sole administrator; Raymond Durcorsky's younger son Brad Ducorsky; and an affiliate known as Blueberry Sales, L.L.P., a Delaware limited liability partnership. The percentages in which they will lend have not been worked out yet, but will be, as the funds to be loaned are needed. The loans are to be secured on a senior-lien basis by rent and past-due rent owed to the Debtor for the use of its 330,000- square-foot building at 1810 Magneto in Ciudad Juarez, Mexico. Those rents have not been collectible for over three years. They accrue, however, at over $132,000/month, and the purpose of the turnover litigation is to collect those rents. The litigation to be brought by Dulces Arbor would be beneficial for the estate and its creditors alike, including MAPLE, because MAPLE has been no more able to collect the rent than Dulces Arbor has. The grant of a senior lien on the rents (1) will not prejudice MAPLE, assuming its asserted lien is valid. MAPLE is getting no rent upon any claim of assignment, and success by the Debtor in the turnover litigation, appears to be a MAPLE's best chance of changing that set of conditions. MAPLE's allegedly secured claim is scheduled (albeit in a disputed status) by the Debtor in an amount of $2,750,000. The real property is scheduled at a value of $12.5 million. The past-due rents are scheduled at over $7.1 million. MAPLE has asserted another claim against Dulces Arbor, in what appears to be a grossly-exaggerated amount of approximately $9 million. Even if that claim turns out to be owed, in such an amount, the scheduled assets Dulces Arbor seeks to recover, exceed that amount. Loan with Ducorskys And Dulces Blueberry, L.L.P. Dulces Arbor also wishes to be able to borrow on a senior lien secured basis from the Ducorskys And Dulces Blueberry, L.L.P. to pay the attorney's fees of its Mexican counsel Roberto Renteria. The hiring of Mr. Renteria will be the subject of a separate application. Dulces Arbor wishes to use him, is a determination of the validity, priority, and extent of the secured claims of MAPLE-not to try to defeat them entirely as debts, but to accord them their due rank and amount in this case. It is role is no different in that regard than Debtors' counsel's role is, generally. The anticipated benefits of Mr. Renteria's services would greatly improve the recovery prospects of other creditors, that, when considered alongside the equity cushion in 1810 Magneto, the use of rent moneys to back the advances to pay for his services, is fair. The Debtor prays for authority to borrow from the Ducorskys And Dulces Blueberry, L.L.P., in amounts as they are respectively able to advance, on a senior lien basis, such advances to be secured by a senior lien upon the first $30,000 per month of the monthly rent to be recovered from 1810 Magneto, Ciudad Juarez, Mexico. About Dulces Arbor Dulces Arbor, S. de R.L. de C.V., aka Dulces Arbor, S.A. de C.V., is a Mexican corporation that has been doing business for years in the greater El Paso-Ciudad Juarez area. It filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-31199) on June 22, 2011. Judge Leif M. Clark presides over the case. In its petition, the Debtor estimated assets of $10 million to $50 million, and debts of $1 million to $10 million. The petition was signed by Raymond Ducorsky, sole administrator. Mr. Ducorsky is also its largest unsecured creditor with a $2,300,000 claim. DYNEGY INC: Judge Denies Creditors' Bid to Block Restructuring -------------------------------------------------------------- Roxanne Palmer at Bankruptcy Law360 reports that a Delaware judge on Friday refused to block Dynegy Inc.'s $1.7 billion restructuring plan, denying a bid by two Public Service Enterprise Group Inc. subsidiaries who objected to the proposed overhaul. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE:DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Failed Sale The Troubled Company Reporter has chronicled Dynegy's attempts to sell itself. In August 2010, Dynegy struck a deal to be acquired by an affiliate of The Blackstone Group at $4.50 a share or roughly $4.7 billion. That offer was raised to $5.00 a share in November. Through Carl Icahn and investment fund Seneca's efforts, shareholders thumbed down both offers. In December 2010, an affiliate of Icahn commenced a tender offer to purchase all of the outstanding shares of Dynegy common stock for $5.50 per share in cash, or roughly $665 million in the aggregate. In February 2011, Icahn Enterprises L.P. terminated the proposed merger agreement with the Company after it failed to garner the required number of shareholder votes. Goldman, Sachs & Co. and Greenhill & Co., LLC, served as financial advisors and Sullivan & Cromwell LLP served as legal counsel to Dynegy on the sale efforts. Bankruptcy Warning Dynegy warned shareholders in March it might be forced into bankruptcy if it is unable to renegotiate the terms of its existing debt. The Company's balance sheet at March 31, 2011, showed $9.82 billion in total assets, $7.15 billion in total liabilities and $2.67 billion in total stockholders' equity. Ernst & Young LLP, in Houston, said Dynegy projects that it is likely that it will not be able to comply with certain debt covenants throughout 2011. "This condition and its impact on Dynegy Inc.'s liquidity raises substantial doubt about Dynegy Inc.'s ability to continue as a going concern." * * * In July 2011, Moody's downgraded Dynegy Holdings' probability of default rating to 'Ca' from 'Caa3'. "The downgrade of DHI's PDR and senior unsecured notes to Ca reflects the increased likelihood of a distressed debt exchange transaction occurring within the next several months following announcement of a corporate reorganization that seeks to modify asset ownership within DHI through the formation of several wholly-owned subsidiaries", said A.J. Sabatelle, Senior Vice President of Moody's. "Separate financing arrangements being established at these subsidiaries will have annual limits placed on the amount of cash flow that can be paid to their indirect parent, which Moody's believes raises default prospects for DHI's senior unsecured notes and the company's lease", added Mr. Sabatelle. EASTMAN KODAK: To Sell Key Patents; Adopts Poison Pill ------------------------------------------------------ Dana Mattioli, writing for The Wall Street Journal, reports that the planned sale of Eastman Kodak Co.'s patent portfolio will include a key patent for previewing photographs, which is currently being litigated against Apple Inc. and Research In Motion Ltd. Kodak will also sell patents that it is litigating against Shutterfly Inc. The Journal relates Kodak hopes to use losses from prior years to offset any taxes on a sale of patents. On Monday, Kodak said it had adopted an anti-takeover plan that would flood the market with preferred stock if any party acquires more than 4.9% of Kodak's shares. Kodak made the move to protect the value of those carried losses. Kodak's ability to use the losses would be limited in the event of a change in control of the company. A person familiar with the matter told the Journal Kodak is concerned an investor might try to gain control of the patents -- which could be worth more than the company's market value of $650 million -- by buying up a big stake in Kodak itself. As reported by the Troubled Company Reporter on July 25, Kodak announced it is exploring strategic alternatives related to its digital imaging patent portfolios, a move reflecting the current heightened market demand for intellectual property. Kodak's portfolios include more than 1,100 U.S. patents pertaining to capturing, processing, storing, organizing, editing, and sharing digital images, as well as imaging monetization applications, which are fundamental to the digital imaging industry. Those patents represent approximately 10% of Kodak's total U.S. patent portfolio. To assist in this effort, Kodak has retained Lazard LLC as its adviser. As the effort proceeds, Kodak will continue to pursue its successful patent licensing program as well as all litigation related to its digital imaging technology. According to the Journal, the move makes clear Kodak's eagerness to raise cash after two straight quarters in which patent litigation income dried up, contributing to losses. "The patents are part of the 1,100 but not necessarily part of any future deal simply because we are so early in the process," said Kodak spokesman Gerard Meuchner, according to the Journal. The Journal recounts Kodak settled image-preview suits and signed licenses with 32 companies. The company raised $550 million settling lawsuits over image previewing with Samsung Electronics Co. in 2010 and $400 million with LG Electronics Inc. in 2009. The Journal relates Kodak's decision to sell its patents follows a $4.5 billion patent sale by Nortel Networks Corp. Lazard also advised Nortel on its sale. About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Company (NYSE:EK) -- http://www.kodak.com/-- provides imaging technology products and services to the photographic and graphic communications markets. The Company's balance sheet at March 31, 2011, showed $5.88 billion in total assets, $7.15 billion in total liabilities, and a $1.27 billion total deficit. * * * As reported by the Troubled Company Reporter on March 2, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on Eastman Kodak to 'CCC' from 'B-'. S&P removed the rating from CreditWatch, where S&P placed it with negative implications on Jan. 26, 2011. The rating outlook is negative. Issue-level ratings on the company's debt were also lowered and removed from CreditWatch in conjunction with the corporate credit rating change. The 'CCC' corporate credit rating reflects S&P's expectation that Eastman Kodak's pace of cash consumption will remain high over the near term. It also reflects S&P's expectation of continued secular volume decline of the traditional photographic products and services business, that the company's consumer digital imaging businesses will not quickly turn convincingly profitable, and that intellectual property earnings, which constitute a significant portion of the company's EBITDA, could decline significantly from 2010 levels. These factors underpin S&P's view of Kodak's business risk as vulnerable and support S&P's view that revenue and EBITDA will decline in 2011. S&P views the company's financial risk profile as highly leveraged because of the risk that its earnings and cash flow could become insufficient to support its debt. In the March 16, 2011 edition of the TCR, Fitch Ratings has affirmed its 'CCC' Issuer Default Rating on Kodak. The ratings and Negative Outlook reflect Kodak's continued struggles to gain traction in its digital businesses as secular declines persist and broaden to entertainment film within the traditional film business. In March, Moody's Investors Service demoted Kodak's corporate rating to Caa1 coupled with a judgment the company "could" consume $600 million to $700 million in cash during 2011. Moody's noted that Kodak has no material debt maturities until November 2013. EASTMAN KODAK: Incurs $179 Million Net Loss in June 30 Quarter -------------------------------------------------------------- Eastman Kodak Company filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss attributable to the company of $179 million on $1.48 billion of total net sales for the three months ended June 30, 2011, compared with a net loss of $168 million on $1.55 billion of total net sales for the same period a year ago. The Company also reported a net loss attributable to Eastman Kodak Company of $425 million on $2.80 billion of total net sales for the six months ended June 30, 2011, compared with a net loss attributable to Eastman Kodak Company of $49 million on $3.47 billion of total net sales for the same period during the prior year. The Company's balance sheet at June 30, 2011, showed $5.33 billion in total assets, $6.75 billion in total liabilities and a $1.42 billion total deficit. "We are enjoying success in our new growth businesses, as well as the challenges typical in the creation of new businesses based on revolutionary new technologies," said Antonio M. Perez, Chairman and Chief Executive Officer, Eastman Kodak Company. "We have ambitious goals for our growth businesses, and thus far have achieved impressive results against the industry. Revenue growth in these businesses is accelerating, with second-quarter 2011 growth more than double the year-ago period. We are also on track this year to once again double ink gross profit dollars in our Consumer Inkjet business, and we're enjoying strong customer demand for KODAK PROSPER Presses." A full-text copy of the Form 10-Q is available for free at: http://is.gd/qds0Mo About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Company (NYSE:EK) -- http://www.kodak.com/-- provides imaging technology products and services to the photographic and graphic communications markets. * * * As reported by the Troubled Company Reporter on March 2, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on Eastman Kodak to 'CCC' from 'B-'. S&P removed the rating from CreditWatch, where S&P placed it with negative implications on Jan. 26, 2011. The rating outlook is negative. Issue-level ratings on the company's debt were also lowered and removed from CreditWatch in conjunction with the corporate credit rating change. The 'CCC' corporate credit rating reflects S&P's expectation that Eastman Kodak's pace of cash consumption will remain high over the near term. It also reflects S&P's expectation of continued secular volume decline of the traditional photographic products and services business, that the company's consumer digital imaging businesses will not quickly turn convincingly profitable, and that intellectual property earnings, which constitute a significant portion of the company's EBITDA, could decline significantly from 2010 levels. These factors underpin S&P's view of Kodak's business risk as vulnerable and support S&P's view that revenue and EBITDA will decline in 2011. S&P views the company's financial risk profile as highly leveraged because of the risk that its earnings and cash flow could become insufficient to support its debt. In the March 16, 2011 edition of the TCR, Fitch Ratings has affirmed its 'CCC' Issuer Default Rating on Kodak. The ratings and Negative Outlook reflect Kodak's continued struggles to gain traction in its digital businesses as secular declines persist and broaden to entertainment film within the traditional film business. In March, Moody's Investors Service demoted Kodak's corporate rating to Caa1 coupled with a judgment the company "could" consume $600 million to $700 million in cash during 2011. Moody's noted that Kodak has no material debt maturities until November 2013. FIRST FEDERAL: Reports $2.2 Million Net Loss in Q2 Ended June 30 ---------------------------------------------------------------- First Federal Bancshares of Arkansas, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $2.2 million on $4.1 million of net interest income for the three months ended June 30, 2011, compared with net income of $637,000 on $5.1 million of net interest income for the same period of 2010. Noninterest income totaled $1.3 million for the three months ended June 30, 2011, compared with $1.9 million for the same period last year. The Company reported a net loss of $3.7 million on $8.5 million of net interest income for the six months ended June 30, 2011, compared with net income of $1.5 million on $10.8 million of net interest income for the six months ended June 30, 2010. Noninterest income totaled $3.0 million for the six months ended June 30, 2011, compared with $3.7 million for the same period last year. The Company's balance sheet at June 30, 2011, showed $616.3 million in total assets, $533.2 million in total liabilities, and stockholders' equity of $83.1 million. As reported in the TCR on March 22, 2011, BKD, LLP, in Little Rock, Arkansas, expressed substantial doubt about First Federal Bancshares of Arkansas' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has experienced significant losses in recent years and has significant levels of nonperforming assets. Furthermore, the Company has entered into a written agreement with the Office of Thrift Supervision which requires the Company to meet certain capital requirements by Dec. 31, 2010, which were not met. Now in Compliance With Capital Requirements of Bank Order The Bank Order specifically required the Bank to achieve and maintain, by Dec. 31, 2010, a Tier 1 (Core) Capital Ratio of at least 8.0% and a Total Risk-Based Capital Ratio of at least 12.0% and maintain these higher ratios for as long as the Bank Order is in effect. At Dec. 31, 2010, the Company did not meet these requirements. After completion of the Recapitalization in the second quarter of 2011, the Company and the Bank are in compliance with the capital requirements of the Orders. A copy of the Form 10-Q is available at http://is.gd/cSEGDL About First Federal Bancshares of Arkansas Harrison, Arkansas-based First Federal Bancshares of Arkansas, Inc. (NASDAQ: FFBH) -- http://www.ffbh.com/-- is a unitary savings and loan holding company for First Federal Bank. The Bank is a community bank serving consumers and businesses in Northcentral and Northwest Arkansas with a full range of checking, savings, investment, and loan products and services. The Bank, founded in 1934, conducts business from 18 full-service branch locations, one stand-alone loan production office, and 29 ATMs located in Northcentral and Northwest Arkansas. FIRST PHYSICIANS: Rural Hospital Inks Pacts to Acquire SPMC ----------------------------------------------------------- Rural Hospital Acquisition, LLC, a wholly owned indirect subsidiary of First Physicians Capital Group, entered into a stock purchase agreement and an asset purchase agreement with Southern Plains Associates II, LLC, for the purchase/sale of Southern Plains Medical Center Inc., and the medical records associated with SPMC. Upon closing, SPA II did deliver to the company two notes totaling $2,150,000 as consideration for the purchase of SPMC. The notes have a term of 10 years and will bear interest at a rate of 5%. Further as a condition of the stock purchase agreement and asset purchase agreement, SPA II did deliver to the company a buyer's members' guarantee and a company guarantee. In conjunction with the stock purchase agreement, Southern Plains Associates, a fifty percent owed partnership between First Physicians Realty Group, LLC, and a wholly owned direct subsidiary of the Company and Capital Investors of Oklahoma, LLC, entered into a Real Estate Purchase Agreement for the purchase/sale of the SPMC real estate. As consideration for the purchase/sale of the SPMC real estate SPA II assumed the current mortgage with First Liberty Bank and caused First Liberty Bank to release all guarantees of said mortgage by the Company and the Company's subsidiaries. At closing the mortgage had a remaining principal balance of $4,560,982. Upon closing, SPA II also assumed two equipment loans from the company with a remaining principal balance of $198,784 and bearing interest rates of 6.75%. These loans were held by First State Bank in Oklahoma. About First Physicians Beverly Hills, Calif.-based First Physicians Capital Group, Inc. (OTC BB: FPCG) -- http://www.fpcapitalgroup.com/-- is an operator of healthcare services firms in the U.S. The Company's balance sheet at Dec. 31, 2010, showed $24.6 million in total assets, $28.9 million in total liabilities, $191,000 in non-redeemable preferred stock, $12.2 million in redeemable preferred stock, and a stockholders' deficit of $16.7 million. As reported in the Troubled Company Reporter on Feb. 21, 2011, Whitley Penn LLP, in Dallas, Texas, expressed substantial doubt about First Physicians Capital Group's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company has experienced recurring losses from operations. FIRST PHYSICIANS: Completes Transition to BPO Provider ------------------------------------------------------ First Physicians Capital Group, Inc., said it has essentially completed its conversion/transition from an owner-operator of healthcare providers and facilities to a provider of BPO and related services to the rural healthcare sector. In addition, the Company is also exploring the divesture of its real estate holdings, consistent with its strategy of maintaining an "asset- light" business model going forward. FPCG has sold SPMC clinic to a consortium of local healthcare investors in a stock and asset sale transaction. The buyer issued a promissory note and assumed certain trade payables and accrued liabilities as consideration for the sale. The buyer also purchased FPCG's ownership in the clinic real estate through assumption of the mortgage on the facility and release of all FPCG corporate guarantees. There was no cash component to the transaction. The transaction was signed in July 2011. In July 2011, FPCG entered into a non-binding LOI for the buyout of its stake in OSDM by physician partners at OSDM. The consideration is expected to be a combination of cash and notes. The Company has received an initial "good-faith" cash deposit toward the transaction consideration. The transaction is expected to close within 90 days. The Company is currently exploring the sale of a remaining small family practice clinic in its Oklahoma portfolio of assets to a local physician partner. The sale of this final remaining asset would complete FPCG's divestiture of all hospital and clinic operating assets in Oklahoma. The Company continues to hold ownership interests in hospital real estate assets, for which it is also exploring potential sale or financing opportunities. The Company has been working with its legal counsel and bankers to evaluate potential strategies with respect to a recapitalization or sale of the Company. Among the strategies that have been explored are a management buyout or sale to a financial buyer, a leveraged recapitalization of the Company, a full or partial sale to a corporate buyer, and a share repurchase program. The Company has initiated discussions with various potential buyers, lenders, and investors. If and when a potential buyer or capital partner is chosen, the Company's legal counsel will provide appropriate information to shareholders regarding any potential transaction. About First Physicians Beverly Hills, Calif.-based First Physicians Capital Group, Inc. (OTC BB: FPCG) -- http://www.fpcapitalgroup.com/-- is an operator of healthcare services firms in the U.S. The Company's balance sheet at Dec. 31, 2010, showed $24.6 million in total assets, $28.9 million in total liabilities, $191,000 in non-redeemable preferred stock, $12.2 million in redeemable preferred stock, and a stockholders' deficit of $16.7 million. As reported in the Troubled Company Reporter on Feb. 21, 2011, Whitley Penn LLP, in Dallas, Texas, expressed substantial doubt about First Physicians Capital Group's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company has experienced recurring losses from operations. GENERAL MARITIME: Incurs $23.95 Million Net Loss in Q2 ------------------------------------------------------ General Maritime Corporation reported a net loss of $23.95 million on $53.56 million of net voyage revenues for the three months ended June 30, 2011, compared with a net loss of $14.31 million on $61.02 million of net voyage revenues for the same period during the prior year. The Company also reported a net loss of $55.49 million on $112.54 million of net voyage revenues for the six months ended June 30, 2011, compared with a net loss of $23.38 million on $126.90 million of voyage expenses for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $1.78 billion in total assets, $1.46 billion in total liabilities and $339.32 million in shareholders' equity. John Tavlarios, President and Chief Executive Officer of General Maritime Corporation, commented, "General Maritime has continued to take important steps to strengthen its balance sheet and capital structure, which has enhanced the Company's ability to operate in a challenging market environment and improved its future prospects. During the second quarter and into the current third quarter, General Maritime has completed a number of important transactions aimed at increasing the company's liquidity and financial flexibility. We have also continued to implement our flexible deployment strategy in order to provide a level of stability in the Company's results and position General Maritime to benefit from future rate increases. Consistent with this important objective, we entered seven VLCCs in Seawolf Tankers, a commercial pool of VLCCs managed by Heidmar, one of the world's leading commercial operators of tankers. We are pleased to be a founding member of the Seawolf Tanker Pool, which we believe will provide both operational and financial benefits to the Company intended to maximizing earnings, achieving economies of scale and reducing our working capital requirements." A full-text copy of the press release announcing the financial results is available for free at http://is.gd/N4sYb8 About General Maritime Corp. Based in New York City, General Maritime Corporation through its subsidiaries provides international transportation services of seaborne crude oil and petroleum products. The Company's fleet is comprised of VLCC, Suezmax, Aframax, Panamax and product carrier vessels. The Company operates its business in one business segment, which is the transportation of international seaborne crude oil and petroleum products. The Company's vessels are primarily available for charter on a spot voyage or time charter basis. The Company reported a net loss of $216.66 million on $387.16 million of voyage revenue for the year ended Dec. 31, 2010, compared with a net loss of $11.99 million on $350.52 million of voyage revenue during the prior year. Deloitte & Touche LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditor noted that the Company requires additional financing in order to meet its debt obligations that will come due over the next year. In addition, the Company has current losses from operations, a working capital deficit and the expectation that certain of its loan covenants will not be achieved during 2011 without additional capital being raised, debt being refinanced or covenants waived or amended. * * * Standard & Poor's Ratings Services in December 2010 lowered its long-term corporate rating on General Maritime Corp. to 'CCC+' from 'B', and placed the ratings on CreditWatch with negative implications. At the same time, S&P lowered its ratings on the company's senior unsecured notes to 'CCC-', two notches below the new corporate credit rating; the recovery rating of '6', which indicates S&P's expectation that lenders will receive a negligible (0%-10%) recovery in a payment default scenario, remains unchanged. "The downgrade reflects General Maritime's weak liquidity, very limited financial covenant headroom (despite recent amendments), and deterioration in its financial profile," said Standard & Poor's credit analyst Funmi Afonja. "As of Sept. 30, 2010, General Maritime had no borrowing availability under its $749.8 million revolving credit facility and $8.7 million in unrestricted cash, after factoring financial covenant limitations. In S&P's opinion, the recent financial covenant amendments do not provide sufficient covenant headroom, and there is still a high probability of a covenant breach over the next quarter. If there is a covenant breach, lenders can require the immediate payment of all amounts outstanding. General Maritime's liquidity is further constrained by significant upcoming debt maturities, including $27.5 million in scheduled principal payments due in 2011 under its term loan, $50.1 million semiannual reduction on the revolver, beginning on April 26, 2011, and a bullet payment of $599.6 million in October 2012, when the facility expires. General Maritime also has a $22.8 million bridge loan facility that matures in October 2011. Cash interest payments on the bridge loan will increase if the company is unable to pay off the loan by Dec. 31, 2010." In the Dec. 22, 2010 edition of the TCR, Moody's Investors Service lowered its ratings of General Maritime Corporation: Corporate Family to B3 from B1, Probability of Default to Caa1 from B2 and senior unsecured to Caa2 from Caa1. Moody's also downgraded the Speculative Grade Liquidity rating to SGL-4 from SGL-3. The outlook is negative. The downgrade of the ratings reflects GenMar's tightening liquidity position as a result of ongoing weak tanker freight rates and upcoming debt maturities. These maturities include the recently arranged $22.8 million bridge loan due Oct. 21, 2011 ("Bridge Loan"), and two $50 million repayments (one each on April 26, 2011 and Oct. 26, 2011) that are due on the company's $750 million revolving credit facility that was almost fully drawn at Sept. 30, 2010. GLC LIMITED: Donnan Denies All Allegations of Wrongdoing -------------------------------------------------------- Michael D. Abernethy at Times-News reports that Edward Tolley, attorney of Jim Donnan, denies all allegations of wrongdoing or knowledge of wrongdoing in response to the complaint filed by GLC Limited in the U.S. Bankruptcy Court for the Middle District of Georgia on July 15, 2011. Neither Mr. Donnan, nor his wife have been charged with any crime. The Donnans deny any wrongdoing and also deny that they had knowledge of how GLC operated. The answer states that the Crabtrees "were solely responsible for the assets and operation of GLC." In the document, the Donnans also deny investing $5.4 million into the liquidation company. According to the report, in the complaint Mr. Donnan is accused of defrauding investors of more than $27.7 million as the head of a Ponzi scheme in a complaint filed earlier this month. Mr. Donnan is also accused of funneling $14.5 million from GLC Limited to himself and his family between 2007 and 2010. Mr. Donnan's wife, Mary Donnan, is also named as a defendant in the suit. GLC Limited alleged that Mr. Donnan began representing himself to third-parties as an officer of GLC and "is substantially, if not principally, responsible for the initiation and operation of a far-reaching Ponzi scheme" that led GLC to bankruptcy while enriching himself and his family. GLC asked the court for a preliminary injunction to prevent the Donnans from dissipating or liquidating any cash, property or assets in their own bankruptcy case before GLC's claims are resolved. In addition, GLC alleged that Mr. Donnan was the first to invest in GLC and began recruiting other investors, using money infused by new investors to pay 50 to 70 percent interest to old investors. According to court documents, investors put more than $81.9 million into GLC between 2007 and 2010 but only about $12 million was used to purchase GLC's inventory. The suit claims GLC made 293 transfers totaling more than $14.5 million to the Donnans and their family. About James Donnan James "Jim" Donnan, III is a former University of Georgia football coach and ex-ESPN college football analyst. Donan and his wife, Mary, filed a Chapter 11 petition (Bankr. M.D. Ga. Case No. 11- 31083) on July 1, 2011. The filing came after Jim Donnan offered to pay back creditors roughly $5 million. The creditors wanted $8.25 million from the Donnans. About GLC Limited Proctorville, Ohio-based GLC Limited is a retail liquidation company in the wholesale/retail distribution industry. It offers large selections of name brand products in many categories. It distributes its goods through a network of wholesale distributors, retail chains and discount and surplus centers. It owns four warehouses for its goods which are located in Proctorville and Columbus, Ohio and Huntington, West Virginia. GLC filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ohio Case No. 11-11090) on Feb. 28, 2011. James R. Burritt, chief restructuring officer, signed the Chapter 11 petition. The Debtor disclosed $18,231,434 in assets and $28,095,356 in liabilities as of the Chapter 11 filing. Ronald E. Gold, Esq., and Joseph B. Wells, Esq., at Frost Brown Todd LLC, serve as the Debtor's bankruptcy counsel. James R. Burritt is the Chief Restructuring Officer and Leon C. Ebbert, PC, CPA, has been tapped as accountants. The Official Committee of Unsecured Creditors in GLC Limited's Chapter 11 bankruptcy case has tapped Morris, Manning & Martin, LLP, as counsel. GLOBAL CROSSING: Incurs $34 Million Net Loss in Second Quarter -------------------------------------------------------------- Global Crossing Limited reported a net loss of $34 million on $692 million of revenue for the three months ended June 30, 2011, compared with a net loss of $47 million on $630 million of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2011, showed $2.28 billion in total assets, $2.83 billion in total liabilities, and a $548 million total shareholders' deficit. "Strong demand and continued enterprise-wide focus on customer experience drove solid progress toward the achievement of our annual guidance," said John Legere, chief executive officer of Global Crossing. "We are building strong operating momentum as we prepare for our strategic combination with Level 3." A full-text copy of the press release announcing the financial results is available for free at http://is.gd/CpNFcD About Global Crossing Based in Hamilton, Bermuda, Global Crossing Limited (NASDAQ: GLBC) -- http://www.globalcrossing.com/-- is a global IP, Ethernet, data center and video solutions provider with the world's first integrated global IP-based network. Global Crossing Limited reported a consolidated net loss of $172 million on $2.609 billion of consolidated revenue for the twelve months ended Dec. 31, 2010, compared with a net loss of $141 million on $2.159 billion of revenue during the prior year. * * * As reported by the Troubled Company Reporter on March 31, 2010, Standard & Poor's Ratings Services raised all its ratings on Global Crossing, including the corporate credit rating to 'B' from 'B-'. The outlook is stable. S&P assigned its 'CCC+' issue-level rating and '6' recovery rating to Global Crossing's proposed $150 million of senior unsecured notes due 2019. The '6' recovery rating indicates S&P's expectation for negligible (0%-10%) recovery in the event of a payment default. GLOBAL SHIP: To Hold Annual Meeting of Shareholders on Aug. 31 -------------------------------------------------------------- Global Ship Lease, Inc., notified its shareholders of an annual meeting of shareholders which will be held at the Company's administrative office at Portland House, Stag Place, London SW1E 5RS on Aug. 31, 2011, at 3:00 p.m. local time, and related materials. At the Meeting, shareholders of the Company will consider and vote upon these proposals: 1. To elect one Term III Director to serve until the 2014 Annual Meeting of Shareholders; 2. To ratify the appointment of PricewaterhouseCoopers Audit, as the Company's independent public accounting firm for the fiscal year ending Dec. 31, 2011; and 3. To transact other business as may properly come before the meeting or any adjournment thereof. Adoption of both Proposal One and Proposal Two requires the affirmative vote of a majority of the votes cast by shareholders present in person or by proxy and entitled to vote at the Meeting, provided that a quorum is present. About Global Ship Lease London-based Global Ship Lease (NYSE: GSL, GSL.U and GSL.WS) -- http://www.globalshiplease.com/-- is a containership charter owner. Incorporated in the Marshall Islands, Global Ship Lease commenced operations in December 2007 with a business of owning and chartering out containerships under long-term, fixed rate charters to world class container liner companies. Global Ship Lease owns 17 vessels with a total capacity of 66,297 TEU with a weighted average age at June 30, 2010, of 6.3 years. All of the current vessels are fixed on long-term charters to CMA CGM with an average remaining term of 8.6 years. The Company has contracts in place to purchase two 4,250 TEU newbuildings from German interests for approximately $77 million each that are scheduled to be delivered in the fourth quarter of 2010. The Company also has agreements to charter out these newbuildings to Zim Integrated Shipping Services Limited for seven or eight years at charterer's option. The Company reported a net loss of $3.97 million on $158.84 million of time charter revenue for the year ended Dec. 31, 2010, compared with net income of $42.37 million on $148.71 million of time charter revenue during the prior year. The Company's balance sheet at March 31, 2011, showed US$972.14 million in total assets, US$636.60 million in total liabilities and $335.54 million in total stockholders' equity. GRUBB & ELLIS: CDCF II Discloses 8.9% Equity Stake -------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, CDCF II GNE Holding, LLC, and its affiliates disclosed that they beneficially own 6,838,878 shares of common stock of Grubb & Ellis Company representing 8.9% of the shares outstanding. As previously reported by the TCR on April 29, 2011, CDF II disclosed 8.76% equity stake. A full-text copy of the filing is available for free at http://is.gd/epT0LT About Grubb & Ellis Company Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is one of the largest and most respected commercial real estate services and investment companies in the world. Our 5,200 professionals in more than 100 company-owned and affiliate offices draw from a unique platform of real estate services, practice groups and investment products to deliver comprehensive, integrated solutions to real estate owners, tenants and investors. The firm's transaction, management, consulting and investment services are supported by highly regarded proprietary market research and extensive local expertise. Through its investment management business, the company is a leading sponsor of real estate investment programs. The Company's balance sheet at March 31, 2011, showed $256.53 million in total assets, $242.77 million in total liabilities, $92.97 million in 12% cumulative participating perpetual convertible preferred stock, and a $79.22 million total deficit. The Company reported a net loss of $69.7 million on $575.5 million of revenues for 2010, compared with a net loss of $80.5 million on $527.9 million of revenues for 2009. HARVEST OAKS: LNR Partners Loses Bid to Resume Foreclosure ---------------------------------------------------------- Bankruptcy Judge Stephani W. Humrickhouse denied the request of CSMC 2006-C5 Strickland Road, LLC, through its special servicer, LNR Partners, LLC, to lift the automatic stay in the bankruptcy case of Harvest Oaks Drive Associates, LLC, in a July 26, 2011 Order, a copy of which is available at http://is.gd/1Vvbn7from Leagle.com. CSMC holds a security interest in the debtor's shopping center in Raleigh, North Carolina, as well as in the debtor's leases and rent proceeds. CSMC seeks relief from the automatic stay to resume foreclosure on the property, contending that the stay should be lifted because the debtor does not have equity in the property, and the property is not necessary to an effective reorganization. The debtor has stipulated that as of the time of the hearings, it has no equity in the property. As to whether the property is necessary for an effective reorganization, CSMC asserts that the debtor has no realistic chance of reorganizing within a reasonable time and that the debtor is incapable of confirming any plan over its objection. According to CSMC: 1) despite having had a reasonable time to increase occupancy and income to levels sufficient to confirm a plan, the debtor has not done so, and 2) the debtor cannot treat CSMC as fully secured over its objection. CSMC contends it not only has the right to elect to be treated as fully secured under 11 U.S.C. Sec. 1111(b), but may also elect to have its claim bifurcated into secured and unsecured claims representing the debt balance up to the collateral's value and any deficiency, respectively. Since the debtor may not prevent CSMC from having an unsecured claim, CSMC contends it will control the voting of the impaired classes in any plan -- because it is the only secured creditor and is the largest unsecured creditor -- and the debtor will not be able to satisfy Sec. 1129(a)(10). On the other hand, the debtor contends that it has worked to retain existing tenants and has entered into several leases for new tenants, achieving an occupancy rate of 76% in March 2011, which had increased to 85%-87% as of the June 9, 2011 hearing. The debtor expects to reach 95% occupancy by the time of the confirmation hearing. Given these new developments, the debtor asserts that the resulting increase in income and property value will allow for a feasible plan that is confirmable with minimal modifications. With regard to CSMC's Sec. 1111(b) argument, the debtor counters that if CSMC has an unsecured claim, that claim may be classified separately from other unsecured creditors, as it is not substantially similar to the general unsecured claims. The debtor further asserts that CSMC may be fully secured by the time of confirmation, based on anticipated additional leases, which would not only support feasibility, but would also eliminate CSMC's purported option to elect bifurcated treatment under Sec. 1111(b), thereby removing the alleged absolute bar to confirmation. According to the debtor, its prospects for a confirmable plan satisfy its burden of proof as to CSMC's motion to lift the stay, whether or not the current classification and treatment of CSMC's claim in one class is proper. About Harvest Oaks Harvest Oaks Drive Associates, LLC, owns a shopping center located at 9650 Strickland Road and 8801 Lead Mine Road, in Raleigh, North Carolina. The Company filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.C. Case No. 10-03145) on April 21, 2010. Trawick H Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., assists the Company in its restructuring effort. In its schedules, the Company disclosed $15,832,000 in assets and $14,634,161 in debts. HAWAII MEDICAL: Combined Hearing on Plan on Aug. 31 --------------------------------------------------- Hawaii Medical Center, Inc., et al., filed together with their bankruptcy petitions a prepackaged plan of reorganization and a proposed disclosure statement with the U.S. Bankruptcy Court for the District of Hawaii. The Plan contemplates the restructuring of the Debtors' capital structure, by reducing the Debtors' debt and increasing their liquidity through a new $15 million secured revolving Credit from MidCap Financial, LLC, and a cash infusion of up to $5.2 million from St. Francis Healthcare System of Hawaii. The relevant information on the Confirmation Hearing and the Objection Deadline are: Objection Deadline : Aug. 17, 2011 Reply and Brief in Support Deadline : Aug. 24, 2011 Confirmation Hearing : Aug. 31, 2011, at 9:30 a.m. (Hawaii Time) Administrative Claims will be paid in full; Priority Tax Claims will be paid in full over time. The Allowed MidCap Secured Claim -- $7,676,496, plus all applicable interest, fees (including the MidCap Early Termination Claim) and costs -- will receive in cash, with the proceeds of Exit Facility, an amount equal to (i) the Allowed MidCap Secured Claim, less (ii) the sum of (a) all amounts received by MidCap and applied to permanently reduce the MidCap Secured Claim on or before the Effective Date and (b) the MidCap Early Termination Claim. Estimated recovery is less than 100%. The Allowed St. Francis Secured Claim will be allowed in the principal amount of $39,175,278, plus all applicable interest, fees and costs. In full satisfaction of the claim, (a) the St. Francis Designees will receive fee title to the Transferred Real Properties; and (b) each of HMC, HMCE, and HMCW will merge with and into the Reorganized Debtors, which consist of existing subsidiaries of St. Francis. Other Secured Claims, and Other Priority Claims are unimpaired under the Plan and will either be paid in full or reinstated, receiving a 100% recovery. General Unsecured Claims, estimated at approximately $22 million, will receive a 0% recovery, will not receive any distribution, and will be discharged. Intercompany Claims will likewise have a 0% recovery. All Interests in the Debtors will be canceled and will not receive any distribution. About Hawaii Medical Center The Hawaii Medical Center, along with its affiliates, filed for Chapter 11 bankruptcy (Bankr. D. Hawaii Lead Case No. 11-01746) on June 21, 2011, just a year after exiting court protection. Hawaii Medical Center owns two hospital campuses -- HMC East in North Honolulu and HMC West in Ewa Beach. The two hospitals have 342 licensed beds and have a total of more than 1,000 employees. The hospitals were known as St. Francis Medical Center before Hawaii Medical purchased the hospitals in 2007. Judge Robert J. Faris presides over the 2011 case. Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi, in Honolulu, Hawaii; Shawn M. Riley, Esq., Paul W. Linehan, Esq., and John A. Polinko, Esq., at McDonald Hopkins LLC, in Cleveland, Ohio, serve as the Debtors' counsel. The Debtors' financial advisors are Scouler & Company, LLC. The petitions were signed by Kenneth J. Silva, member of the board of directors. In its schedules, Hawaii Medical Center disclosed $74,713,475 in assets and $91,112,280 in liabilities. Attorneys at Wagner Choi & Verbrugge, in Honolulu, Hawaii, and Pachulski Stang Ziehl & Jones LLP, in Los Angeles, represent the Official Committee of Unsecured Creditors as counsel. The Debtors' prepetition debt structure is comprised of (i) the Prepetition Revolving Loan with MidCap Financial, LLC, and the Prepetition Term Loan with St. Francis Healthcare Systems of Hawaii. As of the petition Dte, the aggregate outstanding principal on the Prepetion MidCap Revolving Loan and the Prepetition St. Francis Term Loan is approximately $46,851,772. The principal balance of the Prepetion MidCap Revolving Loan is approximately $7,676,495. The amount owed under the Prepetition St. Francis Term Loan is approximately $39,175,277, secured by St. Francis's first priority lien on, among other things, all real property of the Debtors. Through this Chapter 11 filing, the Debtors plan to return the hospitals to the control of St. Francis. In the prior case, HMC and its affiliated debtors were converted to new, Hawaii non-profit corporations. CHA Hawaii, one of HMC's affiliated debtors and a subsidiary of Cardiovascular Hospitals of America, LLC, discontinued management of the reorganized Debtors. Wichita, Kansas-based CHA Hawaii LLC, and its affiliates -- including Hawaii Medical Center LLC -- filed for Chapter 11 protection on Aug. 29, 2008 (Bankr. D. Del. Case No. 08-12027). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their restructuring efforts. CHA Hawaii estimated assets of up to $10 million and debts between $50 million and $100 million when it filed for bankruptcy. The Debtors obtained confirmation of their Chapter 11 plan in May 2010 and emerged from bankruptcy in August 2010. HCA HOLDINGS: Authorized Common Shares Hiked to 1.8 Billion ----------------------------------------------------------- HCA Holdings, Inc.'s Board of Directors approved an increase in the number of authorized shares to 1,800,000,000 shares of common stock and a 4.505-to-one split of the Company's issued and outstanding common stock. The increase in the authorized shares and the stock split became effective on March 9, 2011. All common share and per common share amounts in the Company's 2010 Consolidated Financial Statements and Related Financial Data have been updated to reflect the 4.505-to-one split. A full-text copy of the Form 8-K filing is available for free at: http://is.gd/GMqr7L About HCA Inc. Headquartered in Nashville, Tennessee, HCA is the nation's largest acute care hospital company with 162 hospitals and 104 freestanding surgery centers (including eight hospitals and eight freestanding surgery centers that are accounted for using the equity method) as of Sept. 30, 2010. For the twelve months ended Sept. 30, 2010, the company recognized revenue in excess of $30 billion. The Company's balance sheet at March 31, 2011, showed $23.81 billion in total assets, $31.59 billion in total liabilities, and a $7.78 billion stockholders' deficit. * * * In May 2011, Moody's Investors Service upgraded the Corporate Family and Probability of Default Ratings of HCA Inc. (HCA) to B1 from B2. "The upgrade of HCA's rating reflects the considerable progress the company has made in improving financial metrics and managing the company's maturity profile since the November 2006 LBO," said Dean Diaz, a Moody's Senior Credit Officer. "While the funding of distributions to shareholders at the end of 2010 increased debt levels, the growth in EBITDA and debt repayment since the LBO have improved leverage metrics considerably from the high levels seen just after the company went private," continued Diaz. As reported by the Troubled Company Reporter on March 14, 2011, Moody's Investors Service commented that the completion of the IPO by HCA Holdings, Inc., has no immediate impact on the company's B2 Corporate Family Rating. The outlook for the ratings remains positive. While Moody's believes that the completion of the IPO is a credit positive since proceeds are expected to be used to repay outstanding debt, the estimated $2.6 billion of proceeds to the company won't meaningfully reduce HCA's $28.2 billion debt load. In the March 16, 2011, edition of the TCR, Fitch Ratings has upgraded its ratings for HCA Inc. and HCA Holdings Inc., including the companies' Issuer Default Ratings which were upgraded to 'B+' from 'B'. The Rating Outlook is revised to Stable from Positive. The ratings apply to approximately $28.2 billion in debt outstanding at Dec. 31, 2010. Fitch noted that HCA has made significant progress in reducing debt leverage since it was taken private in 2006 in a LBO which added $17 billion to the company's debt balance; at Dec. 31, 2006, immediately post the LBO, debt-to- EBITDA was 6.7x. Most of the reduction in debt leverage over the past four years was accomplished through growth in EBITDA, which Fitch calculates has expanded by $1.7 billion or 40% to $5.9 billion for 2010 versus $4.2 billion in 2006. Although the company did not undertake a significant organizational restructuring post the LBO, management has nevertheless been successful in growing EBITDA and significantly expanding discretionary free cash flow (FCF). Fitch believes this was accomplished through various operational initiatives, including expansion of profitable service lines and the divestiture of some under performing hospitals, as well as the generally resilient operating trend of the for-profit hospital industry during the recent economic recession despite the pressure of increased levels of uncompensated care and generally weak organic patient volume trends. HCA HOLDINGS: To Issue $5 Million of Senior Notes ------------------------------------------------- HCA Inc. filed with the U.S. Securities and Exchange Commission a free writing prospectus relating to the issuance of $3,000,000,000 6.50% Senior Secured Notes due 2020 and $2,000,000,000 7.50% Senior Notes due 2022. The Company estimates that the net proceeds from the offering, after deducting underwriter discounts and commissions and estimated offering expenses, will be approximately $4,943,750,000. The Company intends to use the net proceeds from the notes offered, together with $300 million of borrowings under the Company's asset-based revolving credit facility, to redeem and repurchase all of (i) the $1.578 billion outstanding 9 5/8%/10 3/8% second lien toggle notes due 2016 and (ii) the $3.2 billion outstanding 9 1/4% second lien notes due 2016 and (iii) for related fees and expenses. Joint Book-Running Managers are: J.P. Morgan Securities LLC Barclays Capital Inc. Merrill Lynch, Pierce, Fenner & Smith Incorporated Citigroup Global Markets Inc. Deutsche Bank Securities Inc. Wells Fargo Securities, LLC A full-text copy of the FWP is available for free at: http://is.gd/K5VsM4 About HCA Inc. Headquartered in Nashville, Tennessee, HCA is the nation's largest acute care hospital company with 162 hospitals and 104 freestanding surgery centers (including eight hospitals and eight freestanding surgery centers that are accounted for using the equity method) as of Sept. 30, 2010. For the twelve months ended Sept. 30, 2010, the company recognized revenue in excess of $30 billion. The Company's balance sheet at June 30, 2011, showed $23.87 billion in total assets, $31.41 billion in total liabilities and a $7.53 billion total deficit. * * * As reported by the Troubled Company Reporter on July 29, 2011, Moody's assigned a Ba2 (LGD 2, 27%) rating to HCA, Inc.'s offering of senior secured first lien notes due 2020 and a B3 (LGD 5, 88%) rating to the company's offering of senior unsecured notes due 2022. Moody's understands that proceeds from the offerings will be used to fund the call of a portion of the company's second lien notes. Therefore, while Moody's does not expect any meaningful change in the overall leverage of the company, certain LGD loss estimates will be revised to reflect the reduction of second lien debt from HCA's capital structure based on the ultimate amount redeemed and the allocation of secured and unsecured debt raised in this offering. HCA's B1 Corporate Family and Probability of Default Ratings remain unchanged. The outlook for the ratings is stable. HCA's B1 Corporate Family Rating reflects Moody's expectation that the company will continue to operate with significant leverage. Furthermore, the company has large debt maturities in future periods, although the proposed note offering and call of a portion of the second lien notes continues the progress to push those maturities out. The rating also reflects Moody's consideration of HCA's scale and position as the largest for-profit hospital operator, which should aid in providing access to resources needed in adapting to changes in the sector brought on by healthcare reform legislation and aid in the company's ability to weather industry pressures. Finally, the rating incorporates Moody's expectation that the company will take a more conservative approach to the use of additional debt for shareholder initiatives and continue to improve credit metrics through both EBITDA growth and debt repayment. On July 28, 2011, the TCR reported that Standard & Poor's assigned 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. HCA INC: Fitch Says Upgrade of Unsecured Debt Possible ------------------------------------------------------ Fitch Ratings notes that HCA Inc. significantly upsized its note sale of July 26, ultimately issuing $3 billion 6.5% first-lien secured notes due 2020 and $2 billion 7.5% HCA Inc. senior unsecured notes due 2022. Fitch rates HCA's first lien notes 'BB+/RR1' and the HCA Inc. unsecured notes 'B/RR5'. These ratings and the company's 'B+' issuer default rating (IDR) are not immediately affected by the upsizing of the note sale. The company plans to use the proceeds of the $5 billion note offering to redeem high coupon second secured lien debt. This includes the entire amount of the $1.578 billion 9.625%/10.375% toggle notes due 2016 and the $3.2 billion 9.25% cash pay notes due 2016. In June 2011 HCA redeemed $1.1 billion of its second lien secured notes with proceeds from its initial public offering. Following the planned note calls, very little second lien secured debt will remain in the capital structure. Upon redemption of this debt, Fitch will likely upgrade the rating on the HCA Inc. unsecured debt by one-notch, to 'B+/RR4', due to improved recovery prospects for those noteholders. HCA's other ratings will probably be maintained at the current levels. A full list is included at the end. Rating Rationale -- Recent balance sheet improvement through extension of 2012- 2013 bank debt maturity wall and pay down of high coupon debt with IPO proceeds. -- Further deleveraging is expected to be nominal and acquisitions are expected to be the top priority for cash deployment. -- Fitch anticipates continued robust cash generation for HCA despite recent weakness in organic operating trends in the for-profit hospital sector. Fitch has these ratings: HCA, Inc. -- IDR 'B+'; -- Senior Secured cash flow credit facilities 'BB+/RR1'; -- Senior Secured First lien notes 'BB+/RR1'; -- Senior Secured Second lien notes 'BB+/RR1'; -- Senior Unsecured notes 'B/RR5'. HCA Holdings Inc. -- IDR 'B+'; -- Senior Unsecured Notes 'B-/RR6'. HEARUSA INC: Siemens Hearing Submits Highest Bid for Firm --------------------------------------------------------- HearUSA, Inc. disclosed that Audiology Distribution, LLC, a wholly owned subsidiary of Siemens Hearing Instruments, Inc. submitted the highest and best bid for the purchase of substantially all of the assets of the company in the July 29, 2011 Section 363 auction conducted under bidding procedures established for HearUSA's Chapter 11 bankruptcy proceedings. The U.S. Bankruptcy Court for the Southern District of Florida, West Palm Beach Division approved the sale. The company expects to close the transaction within 30 days of the final sale order. The bid by Audiology Distribution includes aggregate consideration of approximately $129 million plus a waiver by Siemens of distribution on 6.4 million shares of HearUSA common stock owned by Siemens. For purposes of the bidding, the company estimated the value of the waiver of distribution to be in the range of $6.0 to $7.0 million, subject to final reconciliation of assumed liabilities, excluded liabilities, taxes and common stock dilution effects of the transaction. The estimated $129 million purchase price is comprised of $66.8 million in cash, which includes repayment or assumption of the $10 million debtor-in-possession (DIP) financing provided by the stalking horse bidder, William Demant Holdings A/S, plus the payment of cure costs for assumed contracts, the assumption of various liabilities of the company and certain of its subsidiaries and the assumption of the company's existing supply agreement with Siemens. It is expected that the cash portion of the purchase price in excess of the repayment or assumption of the DIP financing will be used to pay the company's remaining unsecured creditor claims and wind up costs of the company, with the balance to be distributed to equity holders of the company. In connection with the auction, HearUSA and Audiology Distribution entered into an asset purchase agreement that was filed with the bankruptcy court today and the subject of the court's sale order issued. HearUSA is being advised by Sonenshine Partners LLC, financial advisors, Berger Singerman, bankruptcy counsel, and Development Specialists, Inc., restructuring advisors. HEATHERWOOD HOLDINGS: Covenant Restricts Use of Golf Course ----------------------------------------------------------- Bankruptcy Judge Tamara O. Mitchell held that Heatherwood Holdings, LLC's golf course property is subject to an implied restrictive covenant which restricts the property to use as a golf course. Accordingly, the Court said the relief requested in the Debtor's complaint to sell real estate free and clear of liens, interests and encumbrances is due to be denied. HGC Inc. opposed the Debtor's request, asserting that there is an express restrictive covenant running with the property, as well as an implied restrictive covenant which restricts the use of the property to use as a golf course. The case is Heatherwood Holdings, LLC, v. First Commercial Bank, Jonathan L. Kimerling, HGC, Inc., Adv. Proc. No. 09-00017 (Bankr. N.D. Ala.). A copy of the Court's July 26, 2011 Amended Memorandum Opinion is available at http://is.gd/ZSoBRLfrom Leagle.com. Heatherwood Holdings LLC is a real estate development in Shelby County, Alabama, which consists of residential lots and a golf and country club. HH began having financial problems and in late 2008 notified the former owner HGC Inc., that the golf course was about to cease operation. HH filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ala. Case No. 09-00076) on Jan. 6, 2009, seeking to sell the property for any use, not limited to the golf course. HGC, which was formed by members of the Heatherwood golf course/club and homeowners in the area, objected, alleging there is an implied restrictive covenant that limits use of the property. Charles Denaburg, Esq., and Steven Altmann, Esq. -- saltmann@najjar.com -- at Najjar Denaburg, P.C., serve as the Debtor's bankruptcy counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and debts. The petition was signed by Jonathan L. Kimerling, the Debtor's manager. Counsel for HGC are: Lee Benton, Esq. Amy Hazelton, Esq. BENTON & CENTENO 2019 3rd Ave. North Birmingham, AL 35203 Tel: 205-278-8000 Fax: 205-278-8008 E-mail: lbenton@bcattys.com ahazelton@bcattys.com HIDDEN VALLEY: N.J. Appeals Court Rules on Ex-Employees' Suit ------------------------------------------------------------- The Superior Court of New Jersey, Appellate Division, affirmed a lower court decision in the case, Steven Jecker and Laura Jecker, Plaintiffs-Appellants, v. Hidden Valley, Inc., Donald Begraft, David Baron and Daniel Grund, Defendants-Respondents, No. A-3898- 09T3 (N.J. Super Ct.), in an eight-page decision dated July 26, 2011, a copy of which is available at http://is.gd/PSKTzTfrom Leagle.com. Judge Carmen Messano, J.A.D., who wrote the opinion, said, "We affirm for reasons other than those expressed by the trial judge. The appellate panel consists of Judges Messano, Philip S. Carchman and Ronald Graves. The litigation had its genesis when plaintiffs filed lawsuits against Hidden Valley and Mr. Begraft in 1998. Both plaintiffs had been employed by Hidden Valley, a ski resort in Vernon, and alleged that the corporation and Mr. Begraft, its sole shareholder and president, breached an employment agreement with Steven Jecker, failed to pay Laura Jecker sales commissions, and failed to repay loans made to Hidden Valley. The case was tried to a jury and verdicts against Hidden Valley were returned on Jan. 28, 2003. The Defendants moved for a new trial, and, on Dec. 12, 2003, the judge granted the motion and vacated the verdicts. The parties then agreed to arbitrate their dispute. On Dec. 3, 2007, the Plaintiffs filed the present suit alleging that while the underlying dispute was pending, Mr. Begraft caused the assets of Hidden Valley to be transferred to Messrs. Grund, Baron and "certain persons or corporate parties who are partnered with, affiliated with, or controlled by Grund and/or Baron" in violation of "New Jersey's Uniform Fraudulent Transfers Act. The Plaintiffs' complaint sought (1) to set aside the transfers of Hidden Valley's assets; (2) the appointment of a receiver; (3) an accounting; and (4) imposition of a constructive trust. Hidden Valley entered into a reorganization plan under Chapter 11 of the Bankruptcy Code in 1992. At the time, Mr. Begraft was an "80% shareholder" of Hidden Valley, held two mortgages on the property, as well as a secured claim, not to exceed $300,000, for financing the post-petition operations of Hidden Valley. In March 1999, Mr. Begraft filed a complaint against Hidden Valley seeking to foreclose on the two mortgages. On April 3, 2007, final judgment was entered in favor of Mr. Begraft, the judge finding Mr. Begraft was entitled to $6,128,069.80 out of the sale of the mortgaged premises. In July 2007, Mr. Begraft entered into a purchase and sale agreement with Hidden Valley Resort Partners, L.L.C., of which Mr. Grund was a managing member. Mr. Begraft assigned his "bidding rights" at the anticipated sheriff's sale to Resort Partners for $2.3 million, $300,000 to be paid at closing, with the balance payable over five years. Mr. Begraft agreed to indemnify and hold Resort Partners harmless from plaintiffs' claims. At the same time, Hidden Valley entered into a purchase and sale agreement in which it agreed to convey its good will and personal property to Resort Partners for $100,000. Mr. Begraft was the sole and successful bidder at the sheriff's sale held in August 2007, at which he bid $100. On Oct. 16, 2007, Hidden Valley, Begraft, and his related entities assigned "all of the rights and interests necessary to operate and manage what is known as the 'Hidden Valley Resort[']" to Resort Partners and its related entities. These transactions in 2007 formed the basis of plaintiffs' UFTA claim. Attorney for Steven Jecker and Laura Jecker is: Carl A. Salisbury, Esq. KILPATRICK, TOWNSEND, STOCKTON, LLP 31 West 52nd Street, 14th Floor New York, NY 10019 Tel: 212-775-8779 Fax: 646-786-4442 E-mail: Csalisbury@kilpatricktownsend.com Attorney for Hidden Valley, Inc. and Donald Begraft are: Patrice Renner Ianetti, Esq. IANETTI & IANETTI, LLP 55 Madison Ave. Morristown, NJ 07960 Tel: (973) 324-1001 HORIZON LINES: Posts $5.42 Million Net Loss in Q2 Ended June 26 --------------------------------------------------------------- Horizon Lines, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $5.42 million on $307.53 million of revenue for the three months ended June 26, 2011, compared with net income of $3.65 million on $291.39 of revenue for the three months ended June 20, 2010. The Company had a net loss of $39.49 million on $592.88 million of revenue for the six months ended June 26, 2011, compared with a net loss of $9.59 million on $566.05 million of revenue for the six months ended June 20, 2010. The Company's balance sheet at June 26, 2011, showed $794.96 million in total assets, $793.45 million in total liabilities, and and a stockholders' deficit of $1.51 million. The Company expects to experience a covenant breach under the Senior Credit Facility in connection with the amended financial covenants upon the close of the third fiscal quarter of 2011. As reported in the TCR on March 30, 2011, Ernst & Young LLP, in Charlotte, North Carolina, expressed substantial doubt Horizon Lines' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 26, 2010. The independent auditors noted that there is uncertainty that Horizon Lines will remain in compliance with certain debt covenants throughout 2011 and will be able to cure the acceleration clause contained in the convertible notes. A copy of the Form 10-Q is available at http://is.gd/d1Nizj Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the nation's leading domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. The Company provides express trans-Pacific service between the U.S. West Coast and the ports of Ningbo and Shanghai in China, manages a domestic and overseas service partner network and provides integrated, reliable and cost competitive logistics solutions. HYDROGENICS CORP: Posts $2.2 Million Net Loss in Q2 2011 -------------------------------------------------------- Hydrogenics Corporation reported a net loss of $2.2 million on $3.9 million of revenues for the second quarter ended June 30, 2011, compared with a net loss of $794,000 on $2.8 million of revenues for the same period of 2010. Net loss for the six months ended June 30, 2011, was $6.8 million on $11.3 million of revenues, compared with a net loss of $2.9 million on $9.5 million of revenues for the same period last year. "Hydrogenics delivered improved revenues and consistent gross margins in the second quarter, as well as ending the quarter with a solid backlog. This improved financial performance, along with a high level of customer engagement across multiple markets, provides us with strong positioning for the balance of 2011 and beyond. In addition, we added to our liquidity position by completing the fourth and final tranche of our subscription agreement with CommScope, thereby securing an additional $2.5 million of equity," said Daryl Wilson, President and Chief Executive Officer. At June 30, 2011, the Company's balance sheet showed $32.8 million in total assets, $18.2 million in total liabilities, and stockholders' equity of $14.6 million. The Company believes that there are material uncertainties related to certain conditions and events that cast significant doubt on the Company's ability to continue as a going concern. "The events and conditions that cast significant doubt include the Corporation's recurring operating losses and negative cash flows from operations and the risk of not securing additional funding," the Company said in the Form 6-K filing. A copy of the 2nd quarter 2011 consolidated financial statements and results of operations is available at http://is.gd/PdIXT4 A copy of the press release announcing Hydrogenics' second quarter 2011 results is available for free at http://is.gd/B7u4N1 Based in Mississauga, Ontario, Canada, Hydrogenics Corporation (Nasdaq: HYGS) (TSX: HYG) -- http://www.hydrogenics.com/-- and its subsidiaries design, develop and manufacture hydrogen generation products based on water electrolysis technology, and fuel cell products based on proton exchange membrane, or PEM, technology. The Company has manufacturing plants in Canada and Belgium and a satellite facility in Germany and sells its products around the world. ISAACSON STRUCTURAL: Cafe Street Loan Approved on a Final Basis --------------------------------------------------------------- The Hon. J. Michael Deasy the U.S. Bankruptcy Court for the District of New Hampshire authorized, on a final basis, Isaacson Structural Steel, Inc., to enter into a working capital financing arrangement with Cafe Street Capital, Inc. Subject to the terms of the financing documents, the Debtor may borrow up to $500,000, including $125 advanced before the entry of the order to pay its payroll. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant the lender security interest in the collateral as: (a) a pledge of, and a first security interest in, the collateral contracts and all of the Debtors' accounts receivable, inventory, raw materials and work in process related to, or associated with the collateral contracts; and (b) a first priority security interest, and a right to repayment from, the proceeds of the loan in the amount of $2,250,000 to be made to the Debtor pursuant to the BFA financing; and (a) a first priority security interest in all proceeds of the loan; and (d) all property, as security for all obligations; and all other property that now and hereafter secured any obligations. In a separate order, the Court denied the request of PASSUMPSIC SAVINGS BANK'S TO PROHIBIT USE OF CASH COLLATERAL AND REQUEST FOR AN ACCOUNTING. About Isaacson Structural Steel Based in Berlin, New Hampshire, Isaacson Structural Steel, Inc., filed for Chapter 11 bankruptcy (Bankr. D. N.H. Case No. 11-12416) on June 22, 2011. Bankruptcy Judge J. Michael Deasy presides over the case. William S. Gannon PLLC serves as the Debtor's counsel. Isaacson Structural Steel estimated both assets and debts of $10 million to $50 million. The petition was signed by Arnold P. Hanson, Jr., president. An official committee of unsecured creditors has been appointed in Isaacson Structural Steel's case. A bankruptcy petition was also filed for Isaacson Steel, Inc. (Bankr. D. N.H. Case No. 11-12415) on June 22, 2011, estimating assets and debts of $1 million to $10 million. The petition was signed by Arnold P. Hanson, Jr., president. William S. Gannon, Esq., also represents Isaacson Steel. JETBLUE AIRWAYS: Reports $25 Million Net Income in Second Quarter ----------------------------------------------------------------- JetBlue Airways Corporation reported net income of $25 million on $1.15 billion of total operating revenues for the three months ended June 30, 2011, compared with net income of $31 million on $940 million of total operating revenues for the same period a year ago. The Company also reported net income of $28 million on $2.16 billion of total operating revenues for the six months ended June 30, 2011, compared with net income of $30 million on $1.81 billion of total operating revenues for the same period during the prior year. The Company's selected balance sheet data at June 30, 2011, showed $6.91 billion in total assets, $3.08 billion in total debt and $1.69 billion in stockholders' equity. "Thanks to the hard work of our outstanding crewmembers, we reported another profitable quarter with record revenues," said Dave Barger, JetBlue's President and Chief Executive Officer. "Our targeted growth strategy in Boston and the Caribbean continues to pay off and help mitigate the significant pressure from high fuel costs." A full-text copy of the press release announcing the financial results is available for free at http://is.gd/QLOkdC About JetBlue Airways JetBlue Airways Corp., based in Forest Hills, New York, operates a low-cost, point-to-point airline from a hub in New York. JetBlue serves 60 cities with 600 daily non-stop flights. * * * As reported by the TCR on June 10, 2011, Moody's Investors Service raised its Corporate Family and Probability of Default ratings of JetBlue Airways each to B3 from Caa1. "The upgrade of the Corporate Family Rating reflects Moody's belief that JetBlue can retain a majority of the improvement in credit metrics that it has achieved since the most recent trough in early 2009. Its focus on increasing service in certain markets where U.S. airline peers have retrenched and first bag free marketing initiative seem to be drawing traffic to its expanding network," said Moody's Airline Analyst, Jonathan Root. Revenue passengers grew by over 8% through the first four months of 2011 against a 2.6% increase in capacity. Leading unit costs, including and excluding fuel, of the U.S. carriers, industry-wide capacity discipline and pricing actions to help offset the current higher cost of fuel should help JetBlue sustain its liquidity profile, which also supports the ratings upgrade. In November 2010, Standard & Poor's Ratings Services affirmed its ratings, including its 'B-' corporate credit rating, on Forest Hills, New York-based JetBlue Airways Corp. At the same time, S&P revised its outlook on the rating to positive from stable. The recovery rating on senior unsecured debt remains '6', indicating S&P's expectations of a negligible (0%-10%) recovery in a default scenario. S&P noted that while JetBlue has been profitable in six of the last seven quarters, its financial profile remains highly leveraged, with EBITDA interest coverage of 2.5x, funds flow to debt of 15.7%, and debt to capital of 75.2%. * * * This concludes the Troubled Company Reporter's coverage JetBlue Airways until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. JETBLUE AIRWAYS: Provides Third Quarter Financial Outlook --------------------------------------------------------- JetBlue Airways Corporation provided an update for investors relating to the Company's financial outlook for the third quarter ending Sept. 30, 2011, and the full year 2011, and other information regarding the Company's business. Third quarter 2011 available seat miles are estimated to increase 9% to 11% year- over-year. Full year 2011 ASMs are estimated to increase 6% to 8% year-over-year. Average stage length is projected to be approximately 1,121 miles during the third quarter of 2011 versus 1,103 miles during the same prior year period and approximately 1,095 miles for the full year 2011 versus 1,100 miles for the full year 2010. A full-text copy of the filing is available for free at http://is.gd/xBTuCO About JetBlue Airways JetBlue Airways Corp., based in Forest Hills, New York, operates a low-cost, point-to-point airline from a hub in New York. JetBlue serves 60 cities with 600 daily non-stop flights. The Company's selected balance sheet data at June 30, 2011, showed $6.91 billion in total assets, $3.08 billion in total debt and $1.69 billion in stockholders' equity. * * * As reported by the TCR on June 10, 2011, Moody's Investors Service raised its Corporate Family and Probability of Default ratings of JetBlue Airways each to B3 from Caa1. "The upgrade of the Corporate Family Rating reflects Moody's belief that JetBlue can retain a majority of the improvement in credit metrics that it has achieved since the most recent trough in early 2009. Its focus on increasing service in certain markets where U.S. airline peers have retrenched and first bag free marketing initiative seem to be drawing traffic to its expanding network," said Moody's Airline Analyst, Jonathan Root. Revenue passengers grew by over 8% through the first four months of 2011 against a 2.6% increase in capacity. Leading unit costs, including and excluding fuel, of the U.S. carriers, industry-wide capacity discipline and pricing actions to help offset the current higher cost of fuel should help JetBlue sustain its liquidity profile, which also supports the ratings upgrade. In November 2010, Standard & Poor's Ratings Services affirmed its ratings, including its 'B-' corporate credit rating, on Forest Hills, New York-based JetBlue Airways Corp. At the same time, S&P revised its outlook on the rating to positive from stable. The recovery rating on senior unsecured debt remains '6', indicating S&P's expectations of a negligible (0%-10%) recovery in a default scenario. S&P noted that while JetBlue has been profitable in six of the last seven quarters, its financial profile remains highly leveraged, with EBITDA interest coverage of 2.5x, funds flow to debt of 15.7%, and debt to capital of 75.2%. * * * This concludes the Troubled Company Reporter's coverage JetBlue Airways until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. JAMES DONNAN: Denies All Allegations of Wrongdoing -------------------------------------------------- Michael D. Abernethy at Times-News reports that Edward Tolley, attorney of Jim Donnan, denies all allegations of wrongdoing or knowledge of wrongdoing in response to the complaint filed by GLC Limited in the U.S. Bankruptcy Court for the Middle District of Georgia on July 15, 2011. Neither Mr. Donnan, nor his wife have been charged with any crime. The Donnans deny any wrongdoing and also deny that they had knowledge of how GLC operated. The answer states that the Crabtrees "were solely responsible for the assets and operation of GLC." In the document, the Donnans also deny investing $5.4 million into the liquidation company. According to the report, in the complaint Mr. Donnan is accused of defrauding investors of more than $27.7 million as the head of a Ponzi scheme in a complaint filed earlier this month. Mr. Donnan is also accused of funneling $14.5 million from GLC Limited to himself and his family between 2007 and 2010. Mr. Donnan's wife, Mary Donnan, is also named as a defendant in the suit. GLC Limited alleged that Mr. Donnan began representing himself to third-parties as an officer of GLC and "is substantially, if not principally, responsible for the initiation and operation of a far-reaching Ponzi scheme" that led GLC to bankruptcy while enriching himself and his family. GLC asked the court for a preliminary injunction to prevent the Donnans from dissipating or liquidating any cash, property or assets in their own bankruptcy case before GLC's claims are resolved. In addition, GLC alleged that Mr. Donnan was the first to invest in GLC and began recruiting other investors, using money infused by new investors to pay 50 to 70 percent interest to old investors. According to court documents, investors put more than $81.9 million into GLC between 2007 and 2010 but only about $12 million was used to purchase GLC's inventory. The suit claims GLC made 293 transfers totaling more than $14.5 million to the Donnans and their family. About James Donnan James "Jim" Donnan, III is a former University of Georgia football coach and ex-ESPN college football analyst. Donan and his wife, Mary, filed a Chapter 11 petition (Bankr. M.D. Ga. Case No. 11- 31083) on July 1, 2011. The filing came after Jim Donnan offered to pay back creditors roughly $5 million. The creditors wanted $8.25 million from the Donnans. About GLC Limited Proctorville, Ohio-based GLC Limited is a retail liquidation company in the wholesale/retail distribution industry. It offers large selections of name brand products in many categories. It distributes its goods through a network of wholesale distributors, retail chains and discount and surplus centers. It owns four warehouses for its goods which are located in Proctorville and Columbus, Ohio and Huntington, West Virginia. GLC filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ohio Case No. 11-11090) on Feb. 28, 2011. James R. Burritt, chief restructuring officer, signed the Chapter 11 petition. The Debtor disclosed $18,231,434 in assets and $28,095,356 in liabilities as of the Chapter 11 filing. Ronald E. Gold, Esq., and Joseph B. Wells, Esq., at Frost Brown Todd LLC, serve as the Debtor's bankruptcy counsel. James R. Burritt is the Chief Restructuring Officer and Leon C. Ebbert, PC, CPA, has been tapped as accountants. The Official Committee of Unsecured Creditors in GLC Limited's Chapter 11 bankruptcy case has tapped Morris, Manning & Martin, LLP, as counsel. JEFFERSON COUNTY: Meeting to Consider Fin'l Options Resumes Aug. 4 ------------------------------------------------------------------ Bankruptcy remains an option for Jefferson County, Alabama, according to its local officials. Kelly Nolan, writing for Dow Jones Newswires, reports that county officials have set a new date, Aug. 4, for a special meeting to consider their financial options. The county put off a meeting scheduled for the same purpose Thursday to give themselves more time to consider a counterproposal from creditors. A negotiating period between the county and its creditors has likewise been extended until next Thursday; it had been set to expire Friday, July 29. Beyond opting to file for municipal bankruptcy, county officials may also vote to accept the creditor's counteroffer or to extend the negotiating period again, a notice from the county commission president's office said. Dow Jones also notes Jefferson County is hurting from the loss of an occupational tax, which brought in more than $70 million annually, or roughly one-third of the County's general fund revenue. The state Supreme Court ruled it was unconstitutional earlier this year. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. It ended its 2006 fiscal year with a $42.6 million general fund balance, according to Standard & Poor's. Jefferson County is trying to restructure $3.2 billion in sewer debt. A bankruptcy by Jefferson County stands to be the largest municipal bankruptcy in U.S. history. It could beat the record of $1.7 billion set by Orange County, California in 1994. In September 2010, Alabama Circuit Court Judge Albert Johnson named John S. Young Jr. LLC as receiver for the sewer system. Jefferson County has retained Kenneth Klee, Esq., at Klee Tuchin Bogdanoff & Stern LLP to represent the county in the event of bankruptcy. Mr. Klee is considered to be a municipal-bankruptcy expert, having handled Orange County, Calif.'s bankruptcy case in 1994. L-1 IDENTITY: S&P Withdraws 'B' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings, including its 'B' corporate credit rating on Stamford, Conn.-based L-1 Identity Solutions Inc. at the company's request. L-1 was acquired by SAFRAN. L-3 COMMUNICATIONS: Spin-off Expected to Be Neutral to Ratings -------------------------------------------------------------- Fitch Ratings believes the planned spin-off of part of the Government Services segment announced earlier by L-3 Communications Holdings, Inc. (L-3) will be neutral to L-3's ratings and credit profile. Although L-3's credit metrics will likely deteriorate slightly after the spin-off, the company's credit profile will still be solid for the existing 'BBB-' rating. L-3 could receive a sizable dividend from the transaction, and some concerns about exposure to declining Department of Defense (DoD) supplemental budgets will be lessened. The spin-off, to be named Engility, represents approximately $2 billion of estimated 2011 revenues, and the transaction should be completed in the first half of 2012. Fitch expects Engility's businesses to account for less than 15% of L-3's revenues and approximately 8%-10% of EBITDA and free cash flow (FCF; cash from operations less capital expenditures and dividends) in 2011. Following the spin-off, Fitch expects L-3's financial profile will remain solid for the ratings with leverage (gross debt to EBITDA) estimated to be in the range of 2.00 times (x) - 2.10x compared to leverage of approximately 1.90x as of April 1, 2011. The slight deterioration in leverage is expected to be offset by an increase in liquidity as L-3 will receive a cash distribution which the company initially estimates could be more than $500 million. As of July 1, 2011, L-3's liquidity was healthy at approximately $1.5 billion, consisting of $548 million of cash and nearly $1 billion of availability under the revolving credit facility expiring in October 2012. Key credit drivers for L-3 will largely remain unchanged after the spin-off. The primary rating concern will continue to be cash deployment, including the potential for larger debt-financed acquisitions. Other concerns relate to core U.S. defense spending trends after fiscal 2012 and the underfunded pension position totaling $780 million (67% funded status) as of Dec. 31, 2010, most of which will stay with L-3 after the spin-off. The longer- term outlook for supplemental DoD budgets related to operations in Iraq and Afghanistan remain a modest concern, but will lessen because of the amount of related revenues that are at Engility. The rating and Outlook incorporate Fitch's expectations of small- to medium-sized acquisitions and meaningful cash deployment toward shareholders which totaled approximately $541 million in the first half of 2011, with $15 million utilized for acquisitions, $429 million for share repurchases and $97 million in dividend payments. Key factors that support the ratings include L-3's solid credit metrics, liquidity position, and Fitch's expectation of steady operating margins and substantial FCF which totaled $1 billion for the last 12 months (LTM) as of April 1, 2011. Other positive factors include high levels of defense spending; L-3's diverse portfolio of products and services that are in line with the DoD requirements; and a balanced contract mix, including generation of more than 50% of revenues from the Operations & Maintenance account in the DoD budget. L-3's existing ratings are: L-3 Communications Holdings, Inc. -- Issuer Default Rating (IDR) 'BBB-'; -- Contingent convertible subordinated notes 'BB+'. L-3 Communications Corporation -- IDR 'BBB-'; -- Senior unsecured notes 'BBB-'; -- Senior unsecured revolving credit facility 'BBB-'; -- Senior subordinated debt 'BB+'. The Rating Outlook is Stable. The ratings cover approximately $4.1 billion of debt outstanding. The senior subordinated notes are rated one notch below the IDR and senior unsecured debt due to contractual subordination. LA JOLLA: Has 52.27 Million Outstanding Common Shares ----------------------------------------------------- La Jolla Pharmaceutical Company reported that since July 15, 2011, it had converted approximately 39 shares of Series C-1 1 Convertible Preferred Stock into a combined total of 6,484,666 shares of common stock. Following these conversions, the Company had a total of 52,278,815 shares of common stock issued and outstanding as of July 26, 2011. About La Jolla Pharmaceutical San Diego, Calif.-based La Jolla Pharmaceutical Company (OTC BB: LJPC) -- http://www.ljpc.com/-- is a biopharmaceutical company that has historically focused on the development and testing of Riquent as a treatment for Lupus nephritis. The Company's balance sheet at March 31, 2011, showed $6.74 million in total assets, $12.58 million in total liabilities, all current, $5.57 million in Series C-1 1 redeemable convertible preferred stock, and a $11.41 million total stockholders' deficit. The Company reported a net loss of $3.76 million on $0 of revenue from collaboration agreement for the year ended Dec. 31, 2010, compared with a net loss of $8.63 million on $8.12 million of revenue from collaboration agreement during the prior year. As reported by the TCR on April 18, 2011, BDO USA, LLP, in San Diego, Calif., expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The independent auditors noted that the Company has suffered recurring losses from operations, an accumulated deficit of $428 million as of Dec. 31, 2010 and has no current source of revenues. LAW ENFORCEMENT: $1.1-Mil. Jury Award to Wortley Prompted Ch. 11 ---------------------------------------------------------------- Law Enforcement Associates Corporation filed a voluntary petition for relief in the U.S. Bankruptcy Court for the Eastern District of North Carolina. Paul Briggs, president and chief executive officer, said in a regulatory filing, that the Company has been engaged as a defendant in an ongoing legal action in Wake County, North Carolina Superior Court pursuant to a complaint originally filed in September of 2009 on behalf of plaintiff Barbara Wortley. On June 17, 2011, the jury in the matter determined that the Company had breached its contract with plaintiff Wortley and awarded the plaintiff $1,104,000 as compensatory damages. The Company is consulting legal counsel regarding the merits of motions for judgment notwithstanding the verdict and new trial, any potential appeal, or other actions that may be in the best interest of the Company and its shareholders, but a course of action has not been determined at the present time. The unfavorable judgment creates serious doubt about the ability of the Company to continue as a going concern, as the Company does not have sufficient financial resources to pay the judgment. The Company's balance sheet for March 31, 3011, showed 2,348,175 in total assets, 2,618,468 in total liabilities for a 270,293 in stockholder's deficit. The Company, during the three months ended March 31, 2011, it incurred a net loss of $329,764. The Company does not have sufficient financial resources to meet the put option that Mrs. Wortley alleges became due on August 1, 2009. Law Enforcement Associates Corporation was formed on Dec. 3, 2001 when the Company acquired all the outstanding stock of Law Enforcement Associates, Inc., a New Jersey company, incorporated in 1972, doing business in North Carolina. The Company's operations consist of the manufacturing and providing of surveillance and intelligence gathering products and vehicle inspection equipment. Products are used by law enforcement agencies, the military, security, and correctional organizations. Law Enforcement Associates Corporation filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.C. Case No. 11-05686) on July 27, 2011. William P. Janvier, Esq., at Janvier Law Firm, PLLC, in Raleigh, North Carolina, serves as counsel. In the petition, the Debtor estimated assets of up to $50,000 and debts of up to $10 million. LEGAL XTRANET: Suit v. AT&T Mgmt Survives Motion to Dismiss ----------------------------------------------------------- Bankruptcy Judge Leif M. Clark denied the defendant's request to dismiss the lawsuit, Legal Xtranet, d/b/a Elumicor, v. AT&T Management Services, L.P., f/k/a SBC Management Services, L.P., Adv. Proc. No. 11-5068 (Bankr. W.D. Tex.). The Plaintiff sued the Defendant to recover amounts it believes are owed to it under the parties' contract. The Plaintiff has denominated the action as one for "turnover" under 11 U.S.C. Sec. 542(b). The Defendant contends the lawsuit should be dismissed for failure to state a claim for which relief can be granted, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, applicable in bankruptcy by virtue of Rule 7012 of the Federal Rules of Bankruptcy Procedure. The gravamen of the motion to dismiss is that no recovery is available to the Plaintiff under the pleaded section of the Bankruptcy Code, because that section is reserved for the recovery of property the entitlement to which is not in dispute. Judge Clark said the Defendant may well be right in its contention that turnover under Section 542 is the wrong remedy. However, the Defendant is not right that the appropriate remedy is dismissal of the lawsuit. So long as the complaint states a claim for which relief may be granted, setting out facts in support of that claim, the fact that the Plaintiff may cite as a basis for recovery a statute that is not applicable does not require the dismissal of the action. It only requires a finding that, though relief might be available under a theory of law, it is not available under that theory of law. Rule 12(b)(6) is reserved for situations in which a recovery is not available at all as a matter of law. A copy of Judge Clark's July 26, 2011 Memorandum Decision is available at http://is.gd/MMeMWUfrom Leagle.com. Legal Xtranet, Inc., dba Elumicor, filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-51042) on March 28, 2011, listing under $1 million in both assets and debts. A copy of its petition is available at http://bankrupt.com/misc/txwb11-51042.pdf LEGAL XTRANET: Bankr. Ct. Affirms Remand Order in AT&T Dispute -------------------------------------------------------------- Bankruptcy Judge Leif M. Clark denied the plaintiff's motion to reconsider a prior court order remanding to state court the lawsuit, Legal Xtranet, Inc., d/b/a Elumicor, v. AT&T Management Services, L.P., f/k/a SBC Management Services, L.P., Adv. Proc. No. 11-5042 (Bankr. W.D. Tex.). On May 24, 2011, and reported in the May 31st edition of the Troubled Company Reporter, the Bankruptcy Court entered its decision and order on defendant's motion to remand. The court ruled that it had subject matter jurisdiction over the removed matter, but that both parties' claims were non-core and that the case could be timely adjudicated in state court. The court concluded that mandatory abstention applied, and that, under controlling Fifth Circuit precedents, remand of the case was required. On June 2, 2011, the plaintiff timely filed a motion to reconsider that ruling, on grounds that the court's abstention analysis did not fully consider the status of the case as of the time of the remand order. The plaintiff asserted that the recoupment defense in the defendant's live pleading at the time of the remand "was actually in the nature of credit and offset and, as such, was a claim against the estate and thus core, rendering mandatory abstention improper. The defendant responds that, because there was no stay of the remand order, there is no longer any jurisdiction to entertain reconsideration of the order. The defendant also adds that the motion to reconsider raises arguments that either were or could have been argued at the hearing on the motion to remand, so that further reconsideration of those arguments now is improper. Finally, the defendant notes that the court did not commit any manifest errors of law, nor has the plaintiff pointed out any such errors. On that point, the defendant adds that a recoupment defense is, by its very nature, not a claim (informal or otherwise). A copy of Judge Clark's July 26, 2011 Decision and Order is available at http://is.gd/7VnXh6from Leagle.com. Legal Xtranet, Inc., dba Elumicor, filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-51042) on March 28, 2011, listing under $1 million in both assets and debts. A copy of its petition is available at http://bankrupt.com/misc/txwb11-51042.pdf LEVEL 3: Incurs $181 Million Net Loss in Second Quarter ------------------------------------------------------- Level 3 Communications, Inc., reported a net loss of $181 million on $932 million of total revenue for the three months ended June 30, 2011, compared with a net loss of $169 million on $908 million of total revenue for the same period a year ago. The Company's balance sheet at June 30, 2011, showed $8.86 billion in total assets, $9.29 billion in total liabilities and a $432 million stockholders' deficit. "Our track record around execution in the business, combined with our continued focus on the customer experience, has proven to be successful in winning new business, contributing to positive revenue growth," said James Q. Crowe, CEO of Level 3. "We are pleased with the progress we have made in growing Core Network Service revenue over the last year." A full-text copy of the press release announcing the financial results is available for free at http://is.gd/JYV2zS About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. Level 3 Communications carries a 'Caa1' corporate family rating, and 'Caa2' probability of default rating, with negative outlook from Moody's, a 'B-' issuer default rating from Fitch, and 'B-' long term issuer credit ratings from Standard & Poor's. LIFECARE HOLDINGS: Removes HHH from LTACHs Acquisition Agreement ---------------------------------------------------------------- LifeCare Holdings, Inc., has entered into an amendment to its agreement to acquire the long term acute care hospitals of HealthSouth Corporation. The primary purpose of the amendment is to remove HealthSouth Hospital of Houston from the proposed transaction. HHH recently received notice of an investigation by the Office of the Inspector General of the Department of Health and Human Services. Given the investigation as well as the highly competitive nature of the Houston LTACH market, both parties have agreed that removing the Houston hospital from the transaction provides the best opportunity to move forward with the transaction in a timely and efficient manner. The amended transaction now includes all of HealthSouth's LTACHs, excluding Houston, totaling 335 licensed beds. The transaction is subject to customary closing conditions, including regulatory approval and third party consents, and is expected to close in the third quarter. The facilities included in the amended agreement are located in Sarasota, FL; the Louisiana communities of Farmerville, Homer, and Ruston; Las Vegas, NV; and Mechanicsburg and Monroeville, PA. LifeCare currently has operations in three of the four states, providing opportunities to increase market share and strengthen referral and payor relationships. Upon completion of this transaction, LifeCare will operate 27 LTACHs in ten states. "We are pleased to reach this agreement with HealthSouth, and we feel the transaction remains fair and attractive to both companies," said LifeCare Chairman and Chief Executive Officer Phillip B. Douglas. "Our Company remains committed to completing the transaction and looks forward to working with the medical staffs, clinical teams and administrative leadership in each of these markets." LifeCare does not plan to eliminate any services at the hospitals, and has committed to hiring all employees in good standing at the time the transaction is complete. The total consideration that HealthSouth will receive at closing will be $117.5 million, which includes the value of any working capital not being acquired by LifeCare. The transaction is expected to be financed by additional drawings under LifeCare's senior secured credit facility and by proceeds generated from the anticipated sale of the real estate assets associated with four of the acquired hospitals. The transaction is expected to be immediately deleveraging to LifeCare Holdings' balance sheet on a pro forma basis. A full-text copy of the First Amendment to Asset Purchase Agreement is available for free at http://is.gd/vxX4Xc Project Approval Letter As previously reported, on May 13, 2011, in connection with securing financing for the Acquisition, the Company executed an amended and restated project approval letter with Health Care REIT, Inc., whereby HCN agreed to fund $80,000,000 of the Acquisition purchase price and to purchase the real estate assets of the Facilities. In connection with the Amendment, the terms of the REIT Financing were modified to reduce the amount of the REIT Financing to $75,000,000 and to provide that HCN will no longer purchase the real estate assets of the Houston Facility. In addition, due to the elimination of the Houston Facility from the transaction, the Master Lease dated Sept. 1, 2006, with LCI HealthCare Holdings, Inc., will no longer be amended and restated in connection with the closing of the Acquisition and LifeCare Hospitals of Houston LLC will no longer fund an increase of $462,500 to the existing letter of credit for the Boise Lease. About LifeCare Holdings Plano, Tex.-based LifeCare Holdings, Inc. -- http://www.lifecare-hospitals.com/-- operates 19 hospitals located in nine states, consisting of eight "hospital within a hospital" facilities (27% of beds) and 11 freestanding facilities (73% of beds). Through these 19 long-term acute care hospitals, the Company operates a total of 1,057 licensed beds and employ approximately 3,200 people, the majority of whom are registered or licensed nurses and respiratory therapists. Additionally, the Company holds a 50% investment in a joint venture for a 51-bed LTAC hospital located in Muskegon, Michigan. The Company's balance sheet at March 31, 2011, showed $454.17 million in total assets, $469.25 million in total liabilities, and a $15.08 million stockholders' deficit. * * * LifeCare Holdings carries "Caa1" corporate family and probability of default ratings, with negative outlook, from Moody's Investors Service and a 'CCC-' corporate credit rating, with negative outlook from Standard & Poor's Ratings Services. In November 2010, Standard & Poor's Ratings lowered its corporate credit rating on LifeCare Holdings to 'CCC-' from 'CCC+'. "The downgrade reflects the imminent difficulty the company may have in meeting its bank covenant requirements and the risk of it successfully refinancing significant debt maturing in 2011 and 2012," said Standard & Poor's credit analyst David Peknay. The likelihood of a debt covenant violation is heightened by the company's lack of appreciable operating improvement coupled with a large upcoming tightening of is debt covenant in the first quarter of 2011. Additional equity by the company's financial sponsor may be necessary to avoid a covenant violation. Accordingly, S&P believes the chances of bankruptcy have increased. As reported by the TCR on May 26, 2011, Standard & Poor's Rating Services affirmed its 'CCC-' corporate credit rating and its senior subordinated debt rating on Plano, Texas-based LifeCare Holdings Inc. "The low-speculative-grade rating on LifeCare reflects its narrow focus in a competitive business heavily reliant on uncertain Medicare reimbursement," said Standard & Poor's credit analyst David Peknay, "and its highly leveraged financial risk profile highlighted by very weak cash flow protection measures, slim liquidity, and very high debt level." LIFE FORCE ARTS: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------------- Life Force Arts and Technology Academy, Inc., filed a Chapter 11 bankruptcy petition (Bankr. M.D. Fla. Case No. 11-13991) on July 25, 2011, estimating up to $50,000 in assets and $500 in liabilities. Demorris A. Lee at tampabay.com reports that Life Force Arts, a North Pinellas charter school, has asked for help from the director of a group affiliated with Scientology. Life Force Arts has $250,000 in debt. In April, the Pinellas County School Board put Life Force on notice because of the state of its finances. Maurice Mickens, the school's former chairman and a current board member, said the bankruptcy filing is an attempt to keep the school in the community and ensure that everyone gets paid, according to the report. Mr. Mickens is owed $80,264. In April, Life Force Arts and Technology Academy fired its principal, Martie Woodie, after she was arrested in Manatee County on a charge of exploitation of the elderly. Authorities said Woodie stole at least $16,000 from a trust designated to pay her 77-year-old adoptive mother's health care expenses, using the money to, among other things, take a cruise, the report says. LINDEN PONDS: Judge Signs Off on Linden Ponds Plan-Support Deal --------------------------------------------------------------- Dow Jones' DBR Small Cap reports that a judge authorized a deal at the heart of Linden Ponds Inc.'s reorganization strategy but said the operator of a Massachusetts retirement community could continue negotiating with a lender that's thrown its weight against the Company's Chapter 11 plan. About Linden Ponds Linden Ponds Inc. operates a 108-acre continuing care retirement community located at 300 Linden Ponds Way in Hingham, Massachusetts. The facility has 988 independent living units (with an occupancy rate of 87.9%) and 132 skilled nursing beds (68% occupancy rate). Linden Ponds leases the facility and the property upon which it is built from Hingham Campus LLC. Hingham is the owner of the facility and owns the fee simple interest in the property upon which the facility is built. Senior Living Retirement Communities, LLC, formerly known as Erickson Retirement Communities, LLC, owns 100% of the membership interests in Hingham. Hingham Campus and Linden Ponds filed a pre-negotiated Chapter 11 petition (Bankr. N.D. Tex. Lead Case No. 11-33912) in Dallas on June 15, 2011. Hingham Campus estimated assets and debts of $100 million to $500 million. Debt includes $156.4 million owing on bonds issued by the Massachusetts Development Finance Agency, with Wells Fargo Bank, National Association, as the bond trustee. Erickson Retirement Communities sought bankruptcy protection (Bankr. N.D. Tex. Case No. 09-37010) on Oct. 19, 2009. Erickson, the owner of 20 senior living facilities, won approval of its reorganization plan in April 2010. The Erickson plan provided for a sale to Redwood Capital, the highest bidder at the auction in December 2009. Redwood won the auction with an all-cash bid of $365 million. Attorneys at DLA Piper LLP (US) represent Hingham in the Chapter 11 case. Attorneys at McGuire, Craddock & Strother, P.C., and Whiteford, Taylor And Preston, L.L.P., represent Linden Ponds. LOS ANGELES DODGERS: Fox Sports Objecting to Blackstone Work ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Fox Entertainment Group Inc., through one of its subsidiaries, filed what it called a limited objection to the application by the Los Angeles Dodgers baseball club to hire Blackstone Advisory Services LP as the team's investment bankers and financial advisers. According to the report, Fox Sports, which currently has the right to broadcast Dodgers games, objected to the portion of the team's application that would allow Blackstone to work on a transaction involving broadcast rights. Fox contends that the retention would violate a portion of its existing television agreement that gives it exclusive bargaining rights at this time. Fox filed the objection even though the team's current expressed intention is to restructure in bankruptcy by implementing an agreement negotiated with the subsidiary of News Corp. before the Chapter 11 filing. The dispute comes to bankruptcy court for resolution on Aug. 16. Eric Morath, writing for Dow Jones Newswires, reports a Dodgers spokeswoman declined to comment Monday. Dow Jones notes the Dodgers have yet to formally ask the Bankruptcy Court to allow it to sell the broadcast rights, but the team has made it clear in hearings and in court papers that it intends to so as soon as this month. According to Dow Jones, if Mr. McCourt is unable to sell the broadcast rights, he may have no other option than to sell part or all of the team. He has already put up for collateral Dodger Stadium, the surrounding land and ticket revenue in order to access financing prior to the bankruptcy. In a sale scenario, Dow Jones relates, the league, which has been at odds with Mr. McCourt, would have a greater degree of control. In July, the Bankruptcy Judge allowed MLB to become the team's bankruptcy lender over the club's preferred banker, a hedge fund controlled by J.P. Morgan Chase & Co. Fox Sports has already advanced to the Dodgers all of the fees for the team's 2011 television rights. It also had consented to a 17- year, $2.7 billion extension to the current broadcast deal that would have allowed the Dodgers to avoid a bankruptcy filing. Baseball commissioner Bud Selig, however, rejected that proposal because a portion of a $385 million loan that came with the renewed contract would have gone to a divorce settlement with Mr. McCourt's former wife, Jamie. 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. In a written opinion on July 22, the bankruptcy judge in Delaware refused to allow the Dodgers to take a $150 million secured loan from Highbridge Principal Strategies LLC, an affiliate of JPMorgan Chase & Co. Instead, the judge directed the team to take the same amount in an unsecured loan from MLB. LOS ANGELES DODGERS: Counsel Has Conflicting Interests, MLB Says ---------------------------------------------------------------- Samuel Howard at Bankruptcy Law360 reports that Major League Baseball on Thursday told a Delaware bankruptcy judge that the firms representing the Los Angeles Dodgers -- Dewey & LeBoeuf LLP and Young Conaway Stargatt & Taylor LLP -- may be torn between the interests of the team and those of its owner. Law360 notes that MLB filed a reservation of rights alerting the court to conflicts of interest that potentially compromise Dewey and Young Conaway's ability to adequately advance the interests of the baseball team as it navigates a contentious Chapter 11 proceeding. 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. LOS ANGELES DODGERS: Souvenir Seller Wants Decision on Contract --------------------------------------------------------------- Facility Merchandising Inc. will appear before the Bankruptcy Court on Aug. 16 to seek to compel the Los Angeles Dodgers' to immediately decide whether to assume or reject the parties' agreement. FMI holds the exclusive contract to sell ball caps, T-shirts and other souvenirs at Dodger Stadium. Eric Morath, writing for Dow Jones' Daily Bankruptcy Review, reports that FMI said in court papers that its business will be at risk if it's forced to make $6.5 million in payments to the Dodgers this season and then has its Dodger Stadium contract canceled. "The prospect of making those expenditures for the remaining 2011 season, while Dodgers' ticket sales, attendance at games, and merchandise sales are at historic lows . . . poses a substantial going-concern risk to FMI," the company said, according to DBR. According to the report, FMI says it needs to know if it will maintain the right to sell goods at the stadium through 2017 before it makes the payments. DBR notes FMI also has been the official merchandiser for the past 22 Super Bowls and also works for tennis's U.S. Open, four National Football League teams and the National Hockey League's Anaheim Ducks and Phoenix Coyotes. 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. In a written opinion on July 22, the bankruptcy judge in Delaware refused to allow the Dodgers to take a $150 million secured loan from Highbridge Principal Strategies LLC, an affiliate of JPMorgan Chase & Co. Instead, the judge directed the team to take the same amount in an unsecured loan from MLB. MARCO POLO: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Marco Polo Seatrade B.V. Delflandlaan 1 12HG Floor B Amsterdam 1062EA The Netherlands Bankruptcy Case No.: 11-13634 Chapter 11 Petition Date: July 29, 2011 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: James M. Peck Debtor's Counsel: Andrew Schoulder, Esq. BRACEWELL & GIULIANI LLP 1251 Avenue of the Americas, 48th Floor New York, NY 10020-1104 Tel: (212) 508-6132 Fax: (212) 508-6101 E-mail: andrew.schoulder@bgllp.com Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $100,000,001 to $500,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Barry Michael Cerneus, authorized signatory. Affiliates that simultaneously sought Chapter 11 protection: Debtor Case No. ------ -------- Magellano Marine C.V. 11-13628 Cargoship Maritime B.V. 11-13630 Seaarland Shipping Management B.V. 11-13635 MEDCORP INC: Huntington Bank Seeks Case Dismissal ------------------------------------------------- Wfin.com reports that MedCorp Inc., a Toledo-based ambulance company that provides services to Findlay and Hancock County, prepetition was sued by Huntington Bank for failing to pay two loans totaling $10 million. According to the report, the owners tried unsuccessfully to sell MedCorp for more than two years before going into receivership back in August of 2010. Huntington bank filed a motion to dismiss the bankruptcy petition saying the husband and wife owners are guilty of gross mismanagement, alleging they pay themselves more than a $1 million each in compensation and benefits. MedCorp will have 120 days from the filing date to submit a reorganization plan to make the company profitable again. Medcorp, Inc., filed a Chapter 11 petition (Bankr. N.D. Ohio Case No. 11-33239) on June 10, 2011, estimating assets and debts of up to $50,000. Affiliate Medcorp E.M.S. South, LLC (Bankr. N.D. Ohio Case No. 11-33256) and Stickney Avenue Investment Properties LLC, also filed. MEDICURE INC: Dawson Reimer Appointed President and COO ------------------------------------------------------- Medicure Inc. announced that Mr. Dawson Reimer has been appointed President and Chief Operating Officer of the Company effective July 25, 2011. In this capacity, Mr. Reimer will be responsible for the Company's commercial direction, day-to-day operations, and strategic development, including the advancement and management of new and existing pharmaceutical products. Dr. Albert D. Friesen continues to serve as the Chief Executive Officer of the Company and as Chair of its Board of Directors under the amended and renewed agreement with the Company announced on July 18, 2011. Dawson Reimer has worked with Medicure since 1997 and has served in the capacity of Vice President, Operations since June 2004. Over the past 14 years he has overseen most aspects of the Company's business including product development and all facets of the Company's commercial operations surrounding the sales and marketing of AGGRASTAT. Most recently, Mr. Reimer managed the Company's restructuring process leading up to the debt settlement announced on July 18, 2011, and negotiated the collaborative agreement with Iroko Cardio, LLC, announced July 6, 2011. In addition to his services to the Company, Mr. Reimer has consulted to a variety of public and private life science ventures and currently serves as Chair of the Life Science Association of Manitoba. Mr. Reimer holds a Masters Degree in Economic Development from the University of Waterloo. About Medicure Inc. Based in Winnipeg, Manitoba, Canada, Medicure Inc. (TSX/NEX: MPH.H) -- http://www.medicure.com/-- is a biopharmaceutical company engaged in the research, development and commercialization of human therapeutics. The Company has rights to the commercial product, AGGRASTAT(R) Injection (tirofiban hydrochloride) in the United States and its territories (Puerto Rico, U.S. Virgin Islands, and Guam). AGGRASTAT(R), a glycoprotein GP IIb/IIIa receptor antagonist, is used for the treatment of acute coronary syndrome (ACS) including unstable angina, which is characterized by chest pain when one is at rest, and non-Q-wave myocardial infarction. At Feb. 28, 2011, the Company's consolidated balance sheets showed C$5.7 million in total assets, C$30.7 million in total liabilities, all current, and a shareholders' deficit of $25.0 million. As reported in the Troubled Company Reporter on Oct. 4, 2010, KPMG LLP, in Winnipeg, Canada, expressed substantial doubt about Medicure's ability to continue as a going concern, following its results for the fiscal year ended May 31, 2010. The independent auditors noted that the Company has experienced operating losses and cash flows from operations since incorporation and has significant debt servicing obligations that it does not have the ability to repay. METAL STORM: Eligible for R&D Tax Concession Program ---------------------------------------------------- Metal Storm Limited received confirmation from AusIndustry that it is eligible for the Commonwealth Governments Research and Development Tax Concession program and has received its registration number for the 2010/11 financial year. The R&D Tax Concession is the principal Commonwealth Government initiative to increase the amount of research and development undertaken in Australia and provides a tax offset for companies that meet certain criteria. Registration under the scheme is the first step in obtaining the tax offset. Metal Storm has qualified for this tax offset in previous years and is expecting a rebate this year of approximately $550k to $650k and should have confirmation of the amount along with the funds in around 6 weeks. To monetize this rebate Metal Storm has signed a short term loan agreement with Andrew Doyle for $500k. The principal will be repaid upon receipt of the R&D tax rebate. As consideration for providing the loan, Metal Storm will issue the lender with 1.4 million options that have a life of 2 years and an exercise price of $0.001. A further 50,000 options will be issued for each day the loan is not repaid if the principal has not been repaid within 4 weeks. At current stock prices this is equivalent to 11% per annum. Metal Storm will be using the funds to progress development and testing of the TASER XREP ammunition for its MAULTM weapon, as well as for other operating requirements. About Metal Storm Headquartered in Darra, Queensland, Australia, Metal Storm Limited is a defense technology company with offices in Australia and the United States. It specializes in the research, design, development and integration of projectile launching systems utilizing its "electronically initiated / stacked projectile" technology for use in the defense, homeland security, law enforcement and industrial markets. As reported by the TCR on July 25, 2011, PricewaterhouseCoopers, in Brisbane, Australia, expressed substantial doubt about Metal Storm's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency. The Company reported a net loss of A$8.94 million on A$3.35 million of revenue for 2010, compared with a net loss of A$11.31 million on A$1.11 million of revenue for 2009. The Company's balance sheet at Dec. 31, 2010, showed A$2.15 million in total assets, A$20.64 million in total liabilities, all current, and an equity deficit of A$18.49 million. METAL STORM: Shareholders OK Issuance of Shares to Dutchess ----------------------------------------------------------- Metal Storm Limited held an extraordinary general meeting on July 19, 2011. At the meeting, shareholders approved: (1) the issue of up to 500,000,000 shares to Dutchess or its nominee in accordance with the terms of the Line Agreement; (2) the previous issue of 76,491,759 shares to Dutchess in accordance with the terms of the Line Agreement; and (3) the previous issue of 32,666,667 shares at the issue prices and 2,333,333 Options for nil consideration to Andrew Doyle. About Metal Storm Headquartered in Darra, Queensland, Australia, Metal Storm Limited is a defense technology company with offices in Australia and the United States. It specializes in the research, design, development and integration of projectile launching systems utilizing its "electronically initiated / stacked projectile" technology for use in the defense, homeland security, law enforcement and industrial markets. As reported by the TCR on July 25, 2011, PricewaterhouseCoopers, in Brisbane, Australia, expressed substantial doubt about Metal Storm's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency. The Company reported a net loss of A$8.94 million on A$3.35 million of revenue for 2010, compared with a net loss of A$11.31 million on A$1.11 million of revenue for 2009. The Company's balance sheet at Dec. 31, 2010, showed A$2.15 million in total assets, A$20.64 million in total liabilities, all current, and an equity deficit of A$18.49 million. METAL STORM: Signs Memorandum of Understanding with TASER --------------------------------------------------------- Metal Storm Limited announced that it has entered into a Memorandum of Understanding with TASER International Inc. and BREON Defence Systems Pty Limited to develop and market TASER(R) less-lethal ammunition for the Metal Storm MAUL TM weapon. Under the MoU the parties will collaborate to develop, produce and market Metal Storm MAUL TM ammunition that launches the TASER (R) Extended Range Electronic Projectile (XREP TM). TASER International manufactures industry leading Electronic Control Devices that are used worldwide by law enforcement, military, correctional services, professional security, and personal protection markets. TASER ECDs use proprietary technology to incapacitate dangerous or high-risk subjects who pose an immediate risk to themselves or others. The use of TASER devices dramatically reduces injury rates for law enforcement officers and suspects. The TASER XREP is the most technologically advanced projectile ever deployed from a 12-gauge cartridge. It delivers a similar Neuro Muscular Incapacitation bio-effect as handheld TASER ECDs, but can be delivered to a much greater effective range - up to 100 feet from the operator. Metal Storm's MAUL TM is a highly compact, multi-shot 12 gauge launcher that is ideally suited to law enforcement and military applications. It can be fitted as an accessory to an assault rifle, or operated from its own shoulder stock or pistol grip attachments. Weighing just 800 grams, MAUL TM uses Metal Storm's patented stacked projectile technology to provide semi-automatic fire as fast as the operator can squeeze the trigger. A full weapon reload of up to five rounds takes less than two seconds. TASER International Chairman and Founder, Tom Smith said that the MAUL TM and XREP combination would be ideal for sectors of the market where extended range was needed but size and weight had to be minimized. "We developed the XREP to provide an extended range for situations where a close approach was dangerous or not possible," he said. "MAUL TM will provide this capability from a very lightweight, compact accessory launcher, rather than the operator having to carry a separate conventional shotgun." Metal Storm CEO, Lee Finniear said that the TASER XREP will add a new and highly effective projectile to the MAUL TM less-lethal capability. "Our objective with MAUL TM has been to deliver a lightweight launcher that complements conventional assault rifles by providing a broad range of capabilities for non-lethal, door breaching and other specialized missions," he said. "The TASER XREP ammunition will provide the exceptionally versatile TASER Neuro Muscular Incapacitation from the MAUL TM weapon, with the added benefit of a longer range than the conventional TASER. In our view MAUL TM plus the XREP will be a game changing combination for urban military and law enforcement operations." BREON Defence Systems is also a party to the MoU. BREON is the exclusive Asia Pacific Distributor for TASER products, and it recently signed an exclusive distributorship agreement with Metal Storm for MAUL TM for the law enforcement market in Australia and New Zealand. BREON will provide local Australian support for the collaboration, plus assist with the development of effective marketing and business development strategies for the combined system. About Metal Storm Headquartered in Darra, Queensland, Australia, Metal Storm Limited is a defense technology company with offices in Australia and the United States. It specializes in the research, design, development and integration of projectile launching systems utilizing its "electronically initiated / stacked projectile" technology for use in the defense, homeland security, law enforcement and industrial markets. As reported by the TCR on July 25, 2011, PricewaterhouseCoopers, in Brisbane, Australia, expressed substantial doubt about Metal Storm's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency. The Company reported a net loss of A$8.94 million on A$3.35 million of revenue for 2010, compared with a net loss of A$11.31 million on A$1.11 million of revenue for 2009. The Company's balance sheet at Dec. 31, 2010, showed A$2.15 million in total assets, A$20.64 million in total liabilities, all current, and an equity deficit of A$18.49 million. METROPARK USA: To Sell Marks for $175,000; Auction Cancelled ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Metropark USA Inc. didn't receive any bids to compete with the $175,000 offer from Strato Trading Group Inc. to buy the trademark and trade names. The auction was canceled. About Metropark USA Metropark USA, Inc. -- http://www.metroparkusa.com/-- is a Los Angeles retail chain with 70 stores in 21 states. Metropark was founded in 2004 to capitalize on the large Gen Y segment (the 25- 35 year old customer) in demand for fashion-forward apparel and accessories. Its headquarters, distribution centers, and e- commerce site located in Los Angeles, California. Metropark filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 11-22866) on April 26, 2011. Cathy Hershcopf, Esq., Jeffrey L. Cohen, Esq., and Alex R. Velinsky, Esq., at Cooley LLP, in New York, serve as the Debtor's bankruptcy counsel. CRG Partners Group, LLC, is the Debtor's financial advisor. The Debtor also tapped Great American Group Real Estate, LLC doing business as GA Keen Realty Advisors as special real estate advisor. The Debtor disclosed total assets of $28,933,805 and total debts of $28,697,006 as of April 2, 2011. Blakeley & Blakeley LLP represents the Official Committee of Unsecured Creditors. MICROVISION INC: Posts $9.2 Million Net Loss in Q2 2011 -------------------------------------------------------- MicroVision, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $9.2 million on $1.2 million of revenues for the three months ended June 30, 2011, compared with a net loss of $11.1 million on $2.1 million of revenues for the same period last year. Operating loss was $9.3 million for the second quarter of 2011, compared to $11.1 million for the same quarter a year ago, The Company reported a net loss of $18.2 million on $2.3 million of revenues for the six months ended June 30, 2011, compared with a net loss of $20.2 million on $2.8 million of revenues for the same period of 2010. Operating loss was $18.3 million for the first half of 2011, compared to $20.6 million for the first of 2010. The Company's balance sheet at June 30, 2011, showed $23.1 million in total assets, $11.7 million in total liabilities, and stockholders' equity of $11.4 million. As reported in the TCR on March 15, 2011, PricewaterhouseCoopers LLP, in Seattle, Washington, expressed substantial doubt about MicroVision's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has suffered recurring losses from operations since inception and has a net capital deficiency. A copy of the Form 10-Q is available at http://is.gd/wxrWVv Redmond, Washington-based MicroVision, Inc. (NASDAQ: MVIS) -- http://www.microvision.com/-- provides the PicoP(R) display technology platform designed to enable next-generation display and imaging products for pico projectors, vehicle displays and wearable displays that interface with mobile devices. MOMENTIVE PERFORMANCE: Registers $525.68MM Springing Lien Notes --------------------------------------------------------------- Momentive Performance Materials Inc. filed with the U.S. Securities and Exchange Commission a Form S-1 registration statement relating to the resales by holders of the 9.0% Second- Priority Springing Lien Notes due 2021 amounting to $525,687,000. The Notes mature on Jan. 15, 2021. Interest on the Notes is payable in cash at a rate of 9.0% per annum, from the issue date or from the most recent date to which interest has been paid or provided for, payable semi-annually to holders of record at the close of business on January 1 or July 1 immediately preceding the interest payment date on January 15 and July 15 of each year. At any time prior to Jan. 15, 2016, Momentive may redeem, in whole or in part, the Notes at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest and additional interest, if any, to the redemption date and a "make- whole" premium. Thereafter, Momentive may redeem the Notes, in whole or in part, at the redemption prices set forth in this prospectus. In addition, at any time and from time to time on or prior to Jan. 15, 2014, Momentive may redeem up to 35% of the aggregate principal amount of Notes with the net cash proceeds from certain equity offerings at the redemption price of 109% of the principal amount of the Notes redeemed plus accrued and unpaid interest and additional interest, if any, to the redemption date. The Notes are senior obligations of Momentive. Momentive will not receive any proceeds from the resale of the Notes. A full-text copy of the Form S-1 prospectus is available at no charge at http://is.gd/yVBV3i About Momentive Performance Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. The Company reported a net loss of $62.96 million on $2.58 billion of net sales for the year ended Dec. 31, 2010, compared with a net loss of $41.67 million on $2.08 billion of net sales during the prior year. The Company's balance sheet at April 3, 2011, showed $3.36 billion in total assets, $3.99 billion in total liabilities, and a $624 million total deficit. * * * Momentive carries a 'B3' corporate family and probability of default ratings from Moody's Investors Service. It has 'B-' issuer credit ratings from Standard & Poor's Ratings Services. As reported by the Troubled Company Reporter on Oct. 27, 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Momentive Performance Materials Inc. to 'B-' from 'CCC+'. In addition, S&P raised its second lien, senior unsecured, and subordinated debt ratings by one notch to 'CCC' (two notches below the corporate credit rating) from 'CCC-'. The recovery ratings on these classes of debt remain unchanged at '6', indicating S&P's expectation of negligible (0%-10%) recovery in the event of a payment default. At the same time, based on the corporate credit rating upgrade and its updated recovery analysis, S&P raised its senior secured debt rating by two notches to 'B' (one notch above the corporate credit rating) from 'CCC+' and revised the recovery rating to '2' from '3'. These ratings indicate S&P's expectation for substantial (70%-90%) recovery in the event of a payment default. MORTGAGES LTD: Bankr. Judge Issues Bench Warrant Against Investor ----------------------------------------------------------------- J. Craig Anderson at The Arizona Republic reports that a U.S. Bankruptcy Court judge has issued a bench warrant for Scottsdale businessman, philanthropist and political activist Ron Barness for disobeying a court order to return more than $100,000 he received in error from a Mortgages Ltd. asset liquidation. The Arizona Republic, citing court documents, notes that Mortgages Ltd. asset-management firm ML Manager recently liquidated six "loans, collateral or other properties" as part of the Mortgages Ltd. bankruptcy. The report relates that the proceeds were distributed to about 1,600 investors, including a check for about $112,000 to Mr. Barness, a shopping-center developer and a former investor in the Arizona Diamondbacks baseball team. He was also an investor in the failed commercial real-estate venture. Court documents showed the town of Gilbert holds a recorded judgment lien against Mr. Barness and was supposed to have received the Mortgages Ltd. payment in his stead, The Arizona Republic says. According to the report, U.S. Bankruptcy Court Judge Randolph Haines on June 21 issued an ex parte order for Mr. Barness to return the money. Mr. Barness did attend the hearing and has not responded to the judge's order, court documents show. Judge Haines, the report says, issued the bench warrant on July 26, which instructs U.S. Marshals to "bring him before this court without unnecessary delay to answer for his willful disobedience of an order issued by this court." About Mortgages Ltd. Mortgages Ltd. was the subject of an involuntary Chapter 7 petition dated June 20, 2008, filed by KGM Builders Inc. -- a contractor for Grace Communities, a borrower of the company -- in the U.S. Bankruptcy Court for the District of Arizona. Central & Monroe LLC and Osborn III Partners LLC, divisions of Grace Communities, sought the appointment of an interim trustee for Mortgages Ltd. in the Chapter 7 proceeding. Mortgages Ltd. faced lawsuits filed by Grace Communities and Rightpath Limited Development Group for its alleged failure to fully fund loans. Mortgages Ltd. denied the charges. The Debtor's case was converted to a chapter 11 proceeding (Bankr. D. Ariz. Case No. 08-07465) on June 24, 2008. Judge Sarah Sharer Curley presided over the case. Carolyn Johnsen, Esq., and Bradley Stevens, Esq., at Jennings, Strouss & Salmon P.L.C., replaced Todd A. Burgess, Esq., at Greenberg Traurig LLP, as counsel to the Debtor. As of Dec. 31, 2007, the Debtor had total assets of $358,416,681 and total debts of $350,169,423. Mortgages Ltd. was reorganized pursuant to a plan that was confirmed by the Bankruptcy Court on March 20, 2009. As part of the Plan, ML Manager LLC was created to manage and operate the loans in the portfolio. The original investors for the most part transferred their interests to 49 separate Loan LLC's. A number of investors, referred to as "pass through investors" did not transfer their interests. As part of the Plan, ML Manager took out $20 million in exit financing to help keep the company afloat during the reorganization. MSC SOFTWARE: S&P Assigns Prelim. 'B+' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B+' corporate credit rating to California-based simulation and analysis (S&A) software company MSC Software Corp. The outlook is negative. "At the same time, we assigned a 'B+' preliminary issue rating with a preliminary recovery rating of '3' to the company's proposed $235 million senior secured first-lien credit facility, which consists of a $215 million term loan due 2017 and a $20 million revolver due 2016," S&P related. "We expect to assign final ratings upon closing of the proposed transaction and our review of the final documentation," S&P said. "The preliminary ratings on MSC reflect our view of the company's weak business risk profile, characterized by a moderate market position in the S&A sector and a small position in the overall product life management industry," said Standard & Poor's credit analyst Jacob Schlanger, "and, until recently, a declining revenue base." "We consider MSC's financial risk profile aggressive, based on pro forma leverage of about 5x." "Nevertheless, we anticipate positive growth in 2011 and 2012 based on its position in the growing S&A market," continued Mr. Schlanger, "supported by a refocused business strategy that emphasizes the company's historical engineering expertise." MSR RESORT: Paulson-Winthrop Resorts Settle with Miller Buckfire ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, first reported the five resorts foreclosed in January by Paulson & Co. and Winthrop Realty Trust agreed to settle an $8 million claim by Miller Buckfire & Co., the companies' pre-bankruptcy financial advisers and investment bankers. Mr. Rochelle recounts that Miller Buckfire, based in New York, was hired by the then mezzanine lenders to effect a sale or restructuring of the $200 million in mezzanine debt. The firm was to receive an $8 million fee for a successful transaction within 12 months. In January, Paulson and Winthrop foreclosed the mezzanine debt and took control of the resorts. According to the report, the settlement calls for Miller Buckfire to receive an approved $4 million claim and $2 million in cash. A hearing to approve the settlement is scheduled for Aug. 17. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. MSR RESORT: Reaches Deal With Miller Buckfire for $2 Million ------------------------------------------------------------ Lisa Uhlman at Bankruptcy Law360 reports that MSR Resort reached an agreement Tuesday with Miller Buckfire & Co. LLC in New York, settling the creditor's claims that they owed it for restructuring work it did before their Chapter 11 filing. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. MSR RESORT: Court Authorizes Committee to Retain Jefferies & Co. ---------------------------------------------------------------- Neil - July 25 The U.S. Bankruptcy Court Southern District of New York has authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of MSR Resort Golf Course LLC, et al., to retain Jefferies & Company, Inc., as financial advisor. Jefferies will, among other things: -- advise the Committee on the current state of the restructuring market; -- assist and advise the Committee on tactics and strategies for negotiating with other stakeholders; and -- assist and advise the Committee in evaluating potential financing transactions by the Debtors. Jefferies' compensation will include: * a $125,000 monthly fee; * a transaction fee equal to $1,150,000, which will be earned in full upon the effective date of a Chapter 11 Plan of Reorganization (including a plan of liquidation) in the Chapter 11 cases that is supported by the Committee; and * reimbursement of out-of-pocket expenses. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. NEXTWAVE WIRELESS: Enters into Forbearance Deal With Noteholders ---------------------------------------------------------------- NextWave Wireless Inc. has entered into an agreement with the holders of its secured notes pursuant to which such holders will forbear from exercising their respective rights and remedies in connection with the Company's failure or anticipated failure to pay amounts coming due under the agreements relating to each class of notes. Absent other defaults by the Company, the forbearance agreement will provide the Company until September 30, 2011 to complete a refinancing transaction. The forbearance agreement will be described in detail in NextWave's Current Report on Form 8-K to be filed with the Securities and Exchange Commission today. NextWave's Senior Secured Notes, having an aggregate principal amount of $129 million at June 30, 2011, matured on July 17, 2011, and the holders of such notes provided a limited waiver of the Company's obligation to pay such notes in full pending completion of the forbearance agreement on August 1, 2011. In addition, NextWave's Senior-Subordinated Secured Second Lien Notes due 2011, having an aggregate principal amount of $179 million at June 30, 2011, will mature in November 2011 and its Senior-Subordinated Secured Third Lien Notes due 2011, having an aggregate principal amount of $640 million at June 30, 2011, will mature in December 2011. As previously disclosed, NextWave's cash reserves are not sufficient to meet these payment obligations. The Company has been engaged in discussions with the holders of its secured notes relating to a maturity extension and related amendments to its notes agreements since January 2011. The holders of NextWave's notes have not agreed to a maturity extension. An independent committee of the Company's Board of Directors has authorized its financial advisor to seek alternative sources of financing to repay the Senior Notes and Second Lien Notes. At this time, alternative financing has not been identified and cannot be assured. The forbearance agreement contemplates that NextWave will meet certain milestones in an offering of new senior notes for net proceeds of at least $380 million by specified dates. If such milestones are not achieved, the forbearance agreement is subject to termination prior to September 30, 2011. If a refinancing transaction is completed, the Company has agreed to redeem its First Lien Notes, Second Lien Notes and $25 million of its Third Lien Notes using the proceeds of such transaction. If such Third Lien Notes redemption is completed, the holders of the Company's Third Lien Notes have agreed to exchange their remaining notes for a new class of second lien notes with a maturity date six months after the maturity date of the new senior notes. Inability to obtain a refinancing transaction, maturity extension or other accommodation from NextWave's noteholders during the term of the forbearance agreement would significantly restrict the Company's ability to operate and could cause it to seek relief through a filing in the United States Bankruptcy Court. Any alternative financing and/or maturity extension of NextWave's notes may be costly to obtain, and could involve the issuance of equity securities that could cause significant dilution to its existing stockholders. About NextWave Wireless NextWave Wireless Inc. is a wireless technology company that manages and maintains worldwide wireless spectrum licenses. NORTHCORE TECHNOLOGIES: Manuweb to Cross Sell Asset Mgt. Solutions ------------------------------------------------------------------ Northcore Technologies Inc. announced a strategic partnership with Manuweb Software Systems, Inc., to cross sell its asset management and social commerce solutions. "I am extremely excited that our previously announced partnership strategy has yielded such quick results," said Amit Monga, CEO Northcore Technologies. "Manuweb and Northcore have highly complementary product sets and an impressive collection of customers. Northcore now has the opportunity to bring its robust suite of social commerce and asset management tools to a new, pre- qualified customer base. In addition, existing Northcore clients can take advantage of Manuweb's offerings in the document management and compliance space." "Northcore has a toolset that presents an excellent fit with our enterprise platform," said Van Potter, CEO of Manuweb Software Inc. "We strongly believe that there are significant opportunities for both companies to cross sell our respective solutions to each other's customer base." About Northcore Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC BB: NTLNF) -- http://www.northcore.com/-- provides a Working Capital Engine(TM) that helps organizations source, manage, appraise and sell their capital equipment. Northcore offers its software solutions and support services to a growing number of customers in a variety of sectors including financial services, manufacturing, oil and gas and government. Northcore owns 50% of GE Asset Manager, LLC, a joint business venture with GE. Together, the companies work with leading organizations around the world to help them liberate more capital value from their assets. Northcore reported a net loss for the first quarter of C$574,000. This compares with a net loss of C$677,000 in the fourth quarter of 2010. In the first quarter of 2010, Northcore reported a net loss of $713,000. Northcore reported consolidated revenues of C$183,000 for the first quarter, an increase of 4% over the C$176,000 reported in the fourth quarter of 2010. In the same period of 2010, Northcore reported consolidated revenues of C$150,000. Certain adverse conditions and events cast substantial doubt upon the ability of the Company to continue as a going concern, the Company said in the filing. "The Company has not yet realized profitable operations and has relied on non-operational sources of financing to fund operations." The Company's balance sheet at March 31, 2011, showed C$595,000 in total assets, C$1.83 million in total liabilities and a C$1.24 million in total shareholders' deficiency. OCONEE REGIONAL: S&P Lowers Rating on Revenue Bonds to 'BB' ----------------------------------------------------------- Standard & Poor's Ratings Services has lowered its rating to 'BB' from 'BB+' on Baldwin County Hospital Authority, Ga.'s series 1997 and 1998 revenue bonds issued for Oconee Regional Medical Center (ORMC). The rating outlook is negative. "The lower rating and negative outlook reflects our assessment of Oconee's weaker operating results in fiscal 2010, with further deterioration experienced through the second quarter of fiscal 2011, in part due to weak business volumes, rising expenses, and a challenged local economy," said Standard & Poor's credit analyst Meggi McNamara. "Furthermore, management has indicated that losses will likely continue for the remainder of the fiscal year," said Ms. McNamara. More specifically, the rating reflects Standard & Poor's view of ORMC's: Decreased fiscal 2010 operations and continued pressure through the interim period (six months ended March 30, 2011); Declining inpatient and outpatient volumes; and Weak demographics with high unemployment rates in the county. Other credit factors considered by Standard & Poor's include balance sheet measures that are low but are commensurate with a speculative-grade rating and a solid business position in the primary service area as the main referral facility for several critical access hospitals in the area. The negative outlook reflects Standard & Poor's opinion of ORMC's recent operating pressures that are contributing to operational losses in fiscal 2011, coupled with a weak liquidity position, decreasing utilization, and management's expectation for continued losses throughout fiscal 2011. Although management is taking steps to reduce the losses, demonstrated and sustained improvement would be needed for Standard & Poor's to return the outlook to stable. Should losses persist and volumes continue to decline or should liquidity decline from current levels, a lower rating is possible. OLD CORKSCREW: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Old Corkscrew Plantation, LLC 22500 State Road 82 Fort Myers, FL 33913 Bankruptcy Case No.: 11-14559 Affiliates that simultaneously sought Chapter 11 protection: Debtor Case No. ------ -------- Old Corkscrew Plantation II, LLC 11-14563 Old Corkscrew Plantation III, LLC 11-14568 Old Corkscrew Plantation IV, LLC 11-14569 Old Corkscrew Plantation V, LLC 11-14572 Old Corkscrew Plantation VI, LLC 11-14578 Felda Plantation, LLC fka Old Corkscrew Plantation VII, LLC 11-14614 Chapter 11 Petition Date: July 29, 2011 Court: U.S. Bankruptcy Court Middle District of Florida (Ft. Myers) Debtors' Counsel: Paul S. Singerman, Esq. BERGER SINGERMAN PA 200 South Biscayne Boulevard, Suite 1000 Miami, FL 33131 Tel: (305) 755-9500 Fax: (305) 714-4340 E-mail: singerman@bergersingerman.com Debtors' Co-Counsel: R. Pete Smith, Esq. MCDOWELL, RICE, SMITH & BUCHANAN, P.C. Debtors' Chief Restructuring Officer: KAPILA & COMPANY Debtors' Manager: ARCADIA CITRUS ENTERPRISES, INC. Scheduled Assets: $25,264,047 Scheduled Debts: $60,751,634 The petition was signed by Scott Westlake, managing member of Four West, LLC, authorized agent. List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Scott Westlake Loans $4,827,907 4731 Bonita Bay Boulevard, Suite 1903 Bonita Springs, FL 34134 Crop Production Services Trade Debt $380,207 116 Jerome Drive Immokalee, FL 34142 Scott and Vicki Westlake Loan $338,511 4371 Bonita Bay Boulevard, Suite 1903 Bonita Springs, FL 34134 Griffin Fertilizer Company Trade Debt $322,808 P.O. Box 188 Frostproof, FL 33843 KCCG, LLC Loan $68,027 Helena Chemical Company Trade Debt $56,553 Passarella & Associates, Inc. Trade Debt $55,926 Davis Oil Co., Inc. Trade Debt $42,161 Car Two Trade Debt $35,512 The Andersons -- $30,517 Florida Grove Hedgers Trade Debt $29,058 Delisi Fitzgerald, Inc. Trade Debt $22,463 Everglades Farm Equipment Trade Debt $19,359 Pavese Law Firm Attorney Fees $13,910 Keen Farm & Grove Service Trade Debt $12,617 Everglades Harvesting & Haul Trade Debt $12,377 Kelly Tractor Trade Debt $11,557 Lewis, Longman & Walker, PA Trade Debt $8,347 Jackson Citrus Inc. Trade Debt $7,451 Florida Agribusiness, LLC Trade Debt $7,410 OPTI CANADA: Common Shares to be Delisted from TSX -------------------------------------------------- OPTI Canada Inc. announced that the Toronto Stock Exchange has determined to delist its common shares effective at the close of market on Aug. 26, 2011, following a hearing held on July 21, 2011. The delisting determination was imposed for failure to meet the continued listing requirements of the TSX as a result of OPTI's proceeding under the Companies' Creditor Arrangement Act announced on July 13, 2011. OPTI's common shares will remain suspended from trading until the delisting occurs. OPTI's delisting from the TSX will not affect the payment equal to US$0.12 per common share as outlined in the Company's transaction announcement on July 20, 2011. The Company intends to apply for a listing on the TSX Venture Exchange as soon as possible. There can be no assurance that a listing on the TSXV or another exchange will be obtained. About OPTI OPTI Canada Inc. is a Calgary, Alberta-based company focused on developing major oil sands projects in Canada. Its first project, the Long Lake Project, has a design capacity for 72,000 barrels per day (bbl/d), on a 100 percent basis, of SAGD (steam assisted gravity drainage) oil production integrated with an upgrading facility. The Upgrader uses the Company's proprietary OrCrude(TM) process, combined with commercially available hydrocracking and gasification. OPTI's common shares trade on the Toronto Stock Exchange under the symbol OPC. OPTI on July 13, 2011, reached agreement with a committee of Secured Notes holders to restructure the Company's balance sheet under the Companies' Creditors Arrangement Act. At June 30, 2011, OPTI had roughly C$189 million in cash and cash equivalents. In addition, it holds restricted cash of US$73 million in an interest reserve account associated with its US$300 million First Lien Notes. OSI RESTAURANT: Deregisters Unsold Securities --------------------------------------------- OSI Restaurant Partners, LLC, on April 25, 2011, filed a registration statement on Form S-8 with respect to $10,290,000 of deferred compensation obligations to be offered under the Company's Partner Ownership Account Plan, dated May 1, 2011. The offering of the Deferred Compensation Obligations pursuant to this Registration Statement has been terminated. Accordingly, the Company removes from registration all Deferred Compensation Obligations that remain unsold. About OSI Restaurant OSI Restaurant Partners, Inc., is the #3 operator of casual-dining spots (behind Darden Restaurants and Brinker International), with more than 1,400 locations in the U.S. and 20 other countries. Its flagship Outback Steakhouse chain boasts more than 950 locations that serve steak, chicken, and seafood in Australian-themed surroundings. OSI also operates the Carrabba's Italian Grill chain, with about 240 locations. Other concepts include Bonefish Grill, Fleming's Prime Steakhouse, and Cheeseburger In Paradise. Most of the restaurants are company owned. A group led by Chairman Chris Sullivan took the company private in 2007. The Company reported net income of $27.84 million on $3.62 billion of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $54.40 million on $3.60 billion of total revenues during the prior year. The Company's balance sheet at March 31, 2011, showed $2.45 billion in total assets, $2.47 billion in total liabilities and a $27.82 million total deficit. PACIFIC AVENUE: Blue Air Threats to Foreclose Complex ----------------------------------------------------- Susan Stabley at the Charlotte Business Journal reports that EpiCentre's pending buyer is threatening to foreclose on the uptown complex if a bankruptcy plan is delayed -- a maneuver that would wipe out any funds set aside for creditors and could force some tenants out of the property. According to the report, Blue Air 2010 LLC, which bought the $93.9 million EpiCentre note from Regions Financial Corp. in November, is now poised to buy the complex under terms of a Chapter 11 bankruptcy reorganization plan. That plan must be voted on by creditors. It sets aside about $1.1 million to repay EpiCentre contractors and others. About Pacific Avenue Pacific Avenue, LLC, is a North Carolina limited liability company whose principal place of business is located in Charlotte, North Carolina. Together with Pacific Avenue II, LLC, the Company owns and operates the EpiCentre, a mixed-use commercial development consisting of approximately 302,000 rentable square feet of office and retail/entertainment space, plus an underground parking deck, located at 210 E. Trade St. in the city block surrounded by the light rail line, Fourth Street, College Street, and Trade Street in uptown Charlotte, North Carolina. Linda W. Simpson, the U.S. Bankruptcy Administrator for the Western District of North Carolina, appointed six members to the official committee of unsecured creditors in the Chapter 11 case of Pacific Avenue, LLC. Pacific Avenue, LLC, filed for Chapter 11 bankruptcy protection on July 22, 2010 (Bankr. W.D. N.C. Case No. 10-32093). Joseph W. Grier, III, Esq., at Grier, Furr & Crisp, P.A., assists the Company in its restructuring effort. The Company estimated up to $50,000 in assets and $50 million to $100 million in debts in its bankruptcy petition. The Company's affiliate, Pacific Avenue II, filed a separate Chapter 11 petition. PACIFIC RIM: Posts $4 Million Net Loss in Year Ended April 30 ------------------------------------------------------------- Pacific Rim Mining Corp. filed on July 27, 2011, its annual report on Form 20-F for the fiscal year ended April 30, 2011. During the year ended April 30, 2011, the Company incurred a loss of $4,002,000 (2010 - $5,005,000) before discontinued operations and as at April 30, 2011, has an accumulated deficit of $90,100,000 (April 30, 2010 - $86,098,000). "The Company will require additional funding to maintain its ongoing exploration programs and property commitments, for administrative purposes and Central America-Dominican Republic-United States of America Free Trade Agreement ("CAFTA") arbitration and negotiation," the Company said in the filing. The Company adds that the legal costs for CAFTA are substantial. In addition, the Company anticipates that it will require additional financing through, but not limited to, the issuance of additional equity in order to fund its ongoing exploration and CAFTA costs, of which there is no assurance. The Company believes these conditions, among others, cast substantial doubt on its ability to continue as a going concern. Pacific Rim recorded a loss after discontinued operations of $4,002,000 for fiscal 2011, compared to a loss of $4,967,000 for fiscal 2010. The decrease in net loss for fiscal 2011 compared to fiscal 2010 is primarily related to decreased exploration expenditures, general and administrative expenses, and costs related to the CAFTA/ILES action, offset in part by a gain on the sale of bullion during fiscal 2010 for which there is no comparable item during fiscal 2011. During fiscal 2011 the Company's cash and cash equivalents decreased by $1,075,000 from $1,333,000 at April 30, 2010, to $258,000 at April 30, 2011. Short-term investments increased year over year from $nil at April 30, 2010, to $787,000 at April 30, 2011. As a result of the decreased cash and the increase in short-term investments, current assets decreased by $219,000 year over year from $1,414,000 at April 30, 2010, to $1,195,000 at April 30, 2011. The Company's balance sheet at April 30, 2011, showed $6,681,000 in total assets, $2,688,000 in total liabilities, and a stockholders' equity of $3,993,000. A copy of the Form 20-F is available at http://is.gd/5D3IBD A copy of the consolidated financial statements for the fiscal year ended April 30, 2011. is available at http://is.gd/rzWLmr A copy of the press release announcing the Company's financial and operating results for the twelve month ended April 30, 2011, is available at http://is.gd/GSsu6p Domiciled in British Columbia, Canada, Pacific Rim Mining Corp. -- http://www.pacrim-mining.com/-- is involved in the exploration and development of gold properties. The Company owns a 100% interest in the mineral property known as El Dorado, located in El Salvador, and carries out exploration activities in the United States and Central America. The El Dorado gold project in El Salvador was the focus of virtually all of the Company's exploration work between 2002 and 2008, when efforts to advance its El Salvador projects, including El Dorado, ceased as a result of the The Government of El Salvador's passive refusal to issue a decision on the Company's application for environmental and mining permits for the El Dorado project. The El Dorado project is now the subject of a legal dispute initiated by the Company's subsidiary and owner of the El Dorado project, Pac Rim Cayman LLC, under CAFTA and the Investment Law of El Salvador (the "CAFTA/ILES" action). Notwithstanding the ongoing CAFTA/ILES legal action, the Company continues to seek a negotiated resolution to the El Dorado permitting impasse and to renewing its advancement of the El Dorado project. PALMAS COUNTRY: Court Denies Confirmation of 2nd Amended Plan ------------------------------------------------------------- Enrique S. Lamoutte Inclan, of the U.S. Bankruptcy Court for the District of Puerto Rico, in a July 14, 2011 order, denied Palmas Country Club Inc.'s request to confirm its Second Plan of Reorganization. In its motion, the Debtor noted the Court ordered, on a May 24, confirmation hearing, to delete the discharge provisions objected by the Office of the U.S. Trustee. In compliance with the order, on June 1, the Debtor filed its Second Amended Plan eliminating the discharge and/or injunction language. The Court also granted Debtor and Treasury 30 days to file a settlement as to the administrative claim filed by Treasury or file cross motions for summary judgment. In compliance thereof, the Debtor and Treasury reached a settlement, which was filed under seal on or about July 12, 2011. As reported in the Troubled Company Reporter on June 10, 2011, the Second Amended Plan provides that the funds for the payment to Debtor's Creditors will originate from the Puerto Rico Tourism Development Fund. A total of $150,000 was to be contributed to the Plan by TDF. Under the Plan, all of Debtor's secured creditors, except the amounts owed pursuant to the TDF loan agreement, will be deemed to have been paid in full out of the proceeds from the Sale pursuant to Section 363 of the Bankruptcy Code. Unsecured creditors, except for the deficiency claim, will be paid on or before 30 days after the effective date their pro rata share of the remaining funds from the TDF Contribution after payment in full of administrative and priority unsecured tax claims. Holders of equity interests will not receive a distribution under Debtor's Plan and will be deemed cancelled as of the effective date. A full-text copy of the Chapter 11 plan, as twice amended, is available for free at: http://bankrupt.com/misc/PALMAS_Amended_Plan.pdf About Palmas Country Club Inc. Palmas Country Club Inc. filed for Chapter 11 bankruptcy protection (Bankr. D. P.R. Case No. 10-07072) on Aug. 4, 2010. Alexis Fuentes-Hernandez, Esq., at Fuentes Law Offices, assists the Debtor in its restructuring effort. The Debtor disclosed $23,973,011 in assets and $58,546,398 in liabilities as of the Petition Date. PALM HARBOR: Expects to File Chapter 11 Plan This Week ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Palm Harbor Homes Inc. said in court papers that it expects to file a Chapter 11 plan this week. Mr. Rochelle says Palm Harbor is asking the bankruptcy court to extend its exclusive right to file a plan only until Aug. 8. It wants the exclusive right to solicit plan votes extended to Nov. 16. According to the report, Palm Harbor says it will file the plan hand-in-hand with the creditors' committee. Terms of the plan weren't spelled out in Palm Harbor's request for an extension of the exclusivity. The hearing on the exclusivity motion is set for Aug. 16. About Palm Harbor Homes Addison, Texas-based Palm Harbor Homes, Inc. -- http://www.palmharbor.com/-- manufactured and marketed factory- built homes. The Company marketed nationwide through vertically integrated operations, encompassing manufactured and modular housing, financing and insurance. Palm Harbor, along with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 10-13850) on Nov. 29, 2010. It disclosed $321,263,000 in total assets and $280,343,000 in total debts. Brian Cejka at Alvarez & Marsal is the Debtors' chief restructuring officer. Raymond James and Associates, Inc., is the Debtors' investment banker. Alvarez & Marshal North America, LLC, is the Debtors' financial advisor. BMC Group, Inc., is the Debtors' claims agent. Pachulski Stang Ziehl & Jones LLP serves as counsel to the Official Committee of Unsecured Creditors. Following a court-approved sale process, Palm Harbor in March 2011 sold its business for $85.25 million to Fleetwood Enterprises Inc., a venture between Cavco Industries Inc. and a fund advised by Third Avenue Management LLC. Fleetwood is providing up to $55 million in secured financing for Palm Harbor's reorganization. As reported in the TCR on May 16, 2011, Cavco Industries and Fleetwood Homes filed with the Bankruptcy Court a motion for an order enforcing and ordering Palm Harbor Homes to perform its obligations under the Court-approved amended and restated asset purchase agreement and to pay administrative expenses. According to Cavco and Fleetwood, the Debtors ceased paying former employees' sales commissions and profit-sharing bonuses prior to the closing date when the individuals were still employees of the Debtors. PATRIOT GLASS: Files for Chapter 11 Bankruptcy Protection --------------------------------------------------------- Patriot Glass & Mirror, Ltd., filed a Chapter 11 bankruptcy petition (Bankr. N.D.N.Y. Case No. 11-12407) in Albany, New York, on July 28, 2011, disclosing assets of $1.055 million and debts of $1.455 million. Eric Andersona at Times Union reports that the Company's projects have included the HVCC admissions building and buildings at Albany Nanotech. Patriot Glass was founded in 1990. According to the report, the Company's largest unsecured creditors include Winslow Plumb of Schenectady, owed $282,680; Zimmcor Inc. of Clifton Park, owed $221,387; and Painters Local 155 of Poughkeepsie, owed $119,000. First Niagara Bank holds a secured claim of $518,000. PERKINS & MARIE: Taps Deloitte Tax as Tax Services Provider ----------------------------------------------------------- Perkins & Marie Callender's Inc. f/k/a The Restaurant Company and its Debtor affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to employ Deloitte Tax LLP as tax services provider, nunc pro tunc to June 15, 2011. As tax service provider, Deloitte Tax will: (a) advise the Debtors in their work with their counsel and financial advisors on the cash tax effects of restructuring and bankruptcy and the postrestructuring tax profile, including plan of reorganization tax costs; (b) advise the Debtors regarding the restructuring and bankruptcy emergence process from a tax perspective, including the tax work plan; (c) advise the Debtors on the cancellation of debt income for income tax purpose under Internal Revenue Code Section 108; (d) advise the Debtors on post-bankruptcy tax attributes available under the applicable tax regulations and the reduction of such attributes based on the Debtors' operating projections, including a technical analysis of the effects of Treasury Regulation Section 1.1502-28 and the interplay with IRC sections 108 and 1017; (e) advise the Debtors on potential effect of the Alternative Minimum Tax in various post-emergence scenarios; (f) advise the Debtors on the effects of tax rules under IRC Sections 382(1)(5) and (1)(6) pertaining to the post- bankruptcy net operating loss carryovers and limitations on their utilization and the Debtors' ability to qualify for IRC section 382(1)(5); (g) advise the Debtors on net built-in gain or net built-in loss position at the time of "ownership change", including limitations on use of tax losses generated from post- restructuring or post-bankruptcy asset or stock sales; (h) advise the Debtors as to the proper treatment of postpetition interest for state and federal income tax purposes; (i) advise the Debtors as to the proper state and federal income tax treatment of prepetition and postpetition reorganization costs including restructuring-related professional fees and other costs, the categorization and analysis of such costs and the technical positions related thereto; (j) advise the Debtors on their evaluation and modeling of the tax effects of liquidating, disposing of assets, merging or converting entities as part of the restructuring, including the effects on federal and state tax attributes, state incentives, apportionment and other tax planning; (k) advise the Debtors on state income tax treatment and planning for restructuring or bankruptcy provisions in various jurisdictions including cancellation of indebtedness calculation, adjustments to tax attributes and limitations on tax attribute utilization; (l) advise the Debtors on responding to tax notices and audits from various taxing authorities; (m) assist the Debtors with identifying potential tax refunds and advise the Debtors on procedures for tax refunds from taxing authorities; (n) advise the Debtors on income tax return reporting of bankruptcy issues and related matters; (o) advise the Debtors in their review and analysis of the tax treatment of items adjusted for financial reporting purposes as a result of "fresh start" accounting as required for the emergence date of the U.S. financial statements in an effort to identify the appropriate tax treatment of adjustments to equity and other tax basis adjustments to assets and liabilities recorded; (p) assist in documenting, as appropriate, the tax analysis, development of the Debtors' opinions, recommendations, observations and correspondence for any proposed restructuring alternative tax issue or other tax matter; (q) advise the Debtors regarding other state or federal income tax questions that may arise in the course of this engagement, as requested by the Debtors, and as may be agreed to by Deloitte Tax; (r) advise the Debtors in their efforts to calculate tax basis on the stock in each of the Debtors' subsidiaries or other entity interests; and (s) advise the Debtors with their evaluation of any original issue discount or applicable high yield discount obligation provisions that may be associated with the new debt instruments instituted in connection with the restructuring or bankruptcy filing. The Debtors will pay Deloitte Tax based on its hourly rates, which are: Local National Tax and Title Rate Bankruptcy Specialists ----- ----- ---------------------- Partner, Principal, or Director $650 $900 Senior Manager $560 $770 Manager $490 $675 Senior $395 $505 Staff $285 $380 Vincent DeGutis, a partner of Deloitte Tax, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. 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. PHILADELPHIA ORCHESTRA: Nero Aims to Probe Annenberg Foundation --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Peter Nero, the conductor of the Philly Pops, filed papers asking the bankruptcy court to compel the Annenberg Foundation to turn over documents relating to a $50 million gift the foundation made to the Philadelphia Orchestra in 2003. According to the report, Mr. Nero filed his motion in response to the orchestra's statements that it intends to reject the agreement to produce the Philly Pops concerts, where Mr. Nero is director. Mr. Nero is the founder, music director and conductor of the Pops, his court papers say. The orchestra says it has been losing money producing the Pops. Mr. Rochelle discloses that Mr. Nero's court filing says "it is believed" that producing the Pops concerts is required by the foundation's gift. Mr. Nero wants the bankruptcy judge in Philadelphia to require the foundation to turn over a broad list of documents regarding its relationship with the orchestra. Mr. Nero wants a "share of" the orchestra's endowment to support the Pops if they're no longer produced by the orchestra, according to the papers. No hearing date has been set as yet on Mr. Nero's document request. The foundation has until Aug. 12 to object. 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. In its petition, Philadelphia Orchestra estimated $10 million to $50 million in assets and debts. 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. 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. Encore Series, Inc., tapped EisnerAmper LLP as accountants and financial advisors. Reed Smith LLP serves as counsel to the Official Committee of Unsecured Creditors. Deloitte Financial Advisory Services LLP is the financial advisor to the Committee. PILGRIM'S PRIDE: Dist. Court Dismisses David Buchanan Suit ---------------------------------------------------------- District Judge Harry S. Mattice, Jr., dismissed the lawsuit, David Buchanan, v. Pilgrim's Pride Corporation, Case No. 1:10-cv-242 (E.D. Tenn.), at the defendant's behest. The Defendant filed with the Court a Request for Judicial Notice and Motion to Dismiss on Aug. 30, 2010. The Defendant asks the Court to take judicial notice of filings in a related bankruptcy proceeding. On June 9, 2011, the Court warned the Plaintiff that failure to respond to a motion may be deemed a waiver of any opposition to the relief sought and that his failure to respond to the Defendant's Request for Judicial Notice" and Motion to Dismiss on or before June 30, 2011, would result in the Court construing the request and motion as unopposed and deciding them without hearing from him. More than three weeks have passed since that deadline without the Plaintiff filing a response. A copy of Judge Mattice's July 25, 2011 Memorandum and Order is available at http://is.gd/reoz0afrom Leagle.com. About Pilgrim's Pride Pilgrim's Pride Corporation -- http://www.pilgrimspride.com/-- is one of the largest chicken companies in the United States, Mexico and Puerto Rico. The Company's fresh chicken retail line is sold throughout the US, throughout Puerto Rico, and in the northern and central regions of Mexico. The Company exports commodity chicken products to 90 countries. The Company operates feed mills, hatcheries, processing plants and distribution centers in 15 U.S. states, Puerto Rico and Mexico. Pilgrim's Pride and six of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 08-45664) on Dec. 1, 2008. The Company's subsidiaries in Mexico and certain subsidiaries in the United States were not included in the filing and operated outside of the Chapter 11 process. Attorneys at Weil, Gotshal & Manges LLP served as bankruptcy counsel. Lazard Freres & Co., LLC, was the Company's investment bankers. Kurtzman Carson Consulting LLC served as claims and notice agent. Kelly Hart and Brown Rudnick represented the official equity committee. Attorneys at Andrews Kurth LLP represented the official committee of unsecured creditors. On Dec. 10, 2009, the Bankruptcy Court confirmed the Joint Plan of Reorganization filed by the Debtors. The Plan was premised on the sale of the business to JBS SA. Under the Plan, creditors are paid in full. Existing owners retained 34% of the equity. The Company emerged from its Chapter 11 bankruptcy proceedings on Dec. 28, 2009. * * * According to the Troubled Company Reporter on July 5, 2011, Moody's Investors Service downgraded Pilgrim's Pride's Corporate Family and Probability of Default ratings to B2 from B1 and senior unsecured note rating to Caa1 from B3 given the lack of improvement in chicken prices and its consequent impact on Pilgrim's Pride's financial performance, including expectations for modest EBITDA at best for 2011. Moody's concern is somewhat mitigated by the covenant relief provided by Pilgrim's lenders and the cash advance of $50 million from JBS USA (a PIK subordinated loan provided by a sister company). The SGL-3 speculative grade liquidity rating was affirmed. The outlook is stable. PONTIAC, MI: Closes Police Department Amid Spending Cuts -------------------------------------------------------- Jonathan Oosting, writing for Michigan Live's MLive.com, reports that the Oakland County Sheriff's Department took over patrols in Pontiac, Michigan, Sunday night under a contract orchestrated by state-appointed financial manager Michael Stampfler, who has suggested Pontiac could face bankruptcy without serious spending cuts. According to the MLive report, officials say the transition will not have a major impact on local officers -- all 50 who had avoided recent layoffs have been hired by the county -- or local staffing levels, as the county will deploy more deputies than the city could afford in recent months. At the very least, the report adds, the transition will provide an informative and potentially controversial case study in Gov. Rick Snyder's approach to struggling cities. Earlier this year, Mr. Stampfler became the state's first emergency manager to use newly-afforded powers to throw out a union contract as he worked to eliminate the Pontiac Police Department, and the contract with the county aligns with Gov. Snyder's push for local governments to cut costs by sharing resources. According to MLive, Mr. Stampfler, who has suggested he could not eliminate Pontiac's accumulated deficit even if he were to lay off every general-fund employee, says the contract will save the city $2 million a year. According to the report, Oakland County has similar contracts with several local municipalities, but Pontiac's is unique. Executive L. Brooks Patterson led a successful campaign for a last-minute amendment that allows Oakland to void the contract and suspend patrols if Pontiac goes bankrupt, so long as it provides a 30-day notice. As reported by the Troubled Company Reporter on May 9, 2011, Moody's Investors Service downgraded the general obligation limited tax rating for the Pontiac Building Authority (MI) to Caa1 from B2. The Caa1 rating applied to $615,000 in outstanding lease rental bonds that are secured by the city of Pontiac's general obligation limited tax pledge. According to Moody's, the downgrade of the Pontiac's GOLT rating to Caa1 reflects the city's extremely limited liquidity that presents a heightened risk of payment default on debt service due in June and thereafter, several consecutive years of negative General Fund balances exacerbated by deficits in various other funds requiring General Fund support, and uncertainty surrounding management's plans to stabilize the city's financial position. The Caa1 rating also considers the severely challenged local economy, which is heavily concentrated in the automotive industry, and significant tax appeals. The negative outlook reflects the likelihood that the city's financial position will continue to deteriorate due to greater than anticipated revenue shortfalls, additional tax appeals further pressuring declining valuations and shrinking revenues, and lack of information which ultimately questions the city's ability to make timely debt service payments. QUANTUM CORP: Incurs $5.22 Million Net Loss in First Quarter ------------------------------------------------------------ Quantum Corporation reported a net loss of $5.22 million on $153.53 million of total revenue for the three months ended June 30, 2011, compared with a net loss of $2.69 million on $163.22 million of total revenue for the same period during the prior year. The Company's balance sheet at June 30, 2011, showed $414.89 million in total assets, $472.34 million in total liabilities, and a $57.45 million stockholders' deficit. "We are not pleased with our overall revenue result for the quarter and specifically the fact that disk systems and software sales did not meet our growth expectations; however, our branded business grew 3 percent and we delivered another strong quarter for tape automation," said Jon Gacek, president and CEO of Quantum. "We also took a number of actions that we believe will expand our market reach and drive growth in the coming quarters, including introducing our first StorNext(R) appliance, acquiring Pancetera Software and preparing for today's launch of our new DXi6701 and DXi6702 appliances. We believe these actions, along with our continued focus on improving sales and go-to-market execution, will enable us to get back on track and deliver on our fiscal 2012 goals." A full-text copy of the press release announcing the financial results is available for free at http://is.gd/dRfB7n About Quantum Corp. Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive. Quantum provides a comprehensive, integrated range of disk, tape, and software solutions supported by a world-class sales and service organization. In January 2011, Moody's Investors Service upgraded Quantum Corporation's Corporate Family and Probability of Default ratings to B2 from B3 and revised the ratings on the senior secured debt obligations to Ba3 from B1. The rating outlook is positive. The upgrade of the CFR to B2 reflects Quantum's improved operating performance, which stems from strong customer adoption and growth of its higher margin branded disk-based systems and software products, which Moody's expects to continue in FY12. In March 2011, Standard & Poor's Ratings Services raised its corporate credit rating on storage manufacturer Quantum Corp. to 'B' from 'B-'. The outlook is stable. "The upgrade reflects that the company has posted four sequential quarters of sustained EBITDA generation, despite ongoing declines in its core tape business and the absence of an EMC licensing arrangement," said Standard & Poor's credit analyst Lucy Patricola. In addition, debt/EBITDA has been stable for the last four quarters at about 4x and reduced from 2009 levels, primarily reflecting application of free cash flow to debt reduction. QUEPASA CORP: Registers 5 Million Shares of Common Stock -------------------------------------------------------- Quepasa Corporation filed with the U.S. Securities and Exchange Commission a Post-Effective Amendment No.1 to Form SB-2 on Form S-3 relating to the sale of up to 1,000,000 shares of the Company's common stock and 4,000,000 shares of common stock issuable upon exercise of warrants which may be offered by the selling shareholders. The Company will not receive any proceeds from the sales of shares of its common stock by the selling shareholders. The Company will, however, receive proceeds in connection with the exercise of the warrants. The Registration Statement was originally filed in February 2007. In connection with 2006/2007 financings, the Company agreed to keep the 2007 Registration Statement current and effective until such time as the investors sold all of their securities. The Company filed the Amendment as a result of one of the investors requesting to exercise his warrants. The Company's common stock trades on the NYSE Amex under the symbol "QPSA". As of July 26, 2011, the closing price of our common stock was $9.37 per share. A full-text copy of the prospectus is available for free at: http://is.gd/ImYJwK About Quepasa Corporation West Palm Beach, Fla.-based Quepasa Corporation (OTC BB: QPSA) through its Web site -- http://www.Quepasa.com/-- operates as an online social community for young Hispanics. Quepasa reported a consolidated net loss of $6.65 million on $6.05 million of revenue for the fiscal year ended Dec. 31, 2010, compared with a net loss of $10.58 million on $536,000 of revenue during the prior year. The Company's balance sheet at March 31, 2011, showed $21.01 million in total assets, $7.73 million in total liabilities and $13.28 million in total stockholders' equity. Salberg & Company, P.A., in Boca Raton, Florida, independent report following the 2010 results did not contain a going concern qualification for Quepasa Corp. As reported in the Troubled Company Reporter on March 9, 2010, Salberg & Company, P.A. expressed substantial doubt about the Company's ability to continue as a going concern following the 2009 results. The independent auditors noted of the Company's net loss and net cash used in operating activities in 2009 of $10.58 million and $3.88 million, respectively, and a stockholders' deficit and an accumulated deficit of $3.90 million and $159.33 million, respectively, at Dec. 31, 2009. QUINCY MEDICAL: U.S. Trustee Blocks Request to Pay Consultants -------------------------------------------------------------- Jack Encarnacao at The Patriot Ledger reports that the U.S. Department of Justice has filed an objection opposing the way Quincy Medical Center is paying a Chicago-based consultant to guide it through bankruptcy and sale proceedings. According to the report, the office of William Harrington, the region's United States trustee, said in its July 27 motion that the compensation structure does not conform with elements of bankruptcy law. The report says Quincy Medical Center is paying Navigant Consulting Inc., an investment bank with a track record of working with struggling hospitals, a flat $75,000 monthly fee for its work facilitating the sale. Navigant is also contracted to do financial advisory work for the hospital, such as keeping track of its books to ensure compliance with bankruptcy law. For that type of work, Navigant is paid an hourly fee. The Patriot Ledger says the hospital reported in its initial Chapter 11 bankruptcy filing on July 1 that it paid Navigant a total of $1.6 million, plus a $500,000 retainer, between March 1 and June 30. In his motion, Mr. Harrington states that Quincy Medical Center does not spell out in enough detail the work for which it pays Navigant a flat fee. The report notes State Attorney General Martha Coakley has also filed an objection in the bankruptcy case. The motion reserves her office's right to take longer to complete a required review of the sale to Steward, a for-profit company, than is called for in a sale timeline the hospital filed in court. A committee of Quincy Medical Center's creditors filed a motion supporting the hospital's arrangement with Navigant. The motion says the cost of retaining Navigant is not high relative to the $38 million Steward is willing to pay for the hospital, and to upset the arrangement would risk disrupting and delaying the sale process. About Quincy Medical Center Quincy Medical Center is a 196-bed, nonprofit hospital in Quincy, Massachusetts. Quincy Medical Center, Inc. together with two affiliates, sought Chapter 11 protection (Bankr. D. Mass. Lead Case No. 11-16394) on July 1, 2011. John T. Morrier, Esq., at Casner & Edwards, LLP, in Boston, serves as counsel to the Debtors. Navigant Capital Advisor LLC and Navigant Consulting Inc. serve as financial advisors. Epiq Bankruptcy Solutions LLC is the claims, noticing, and balloting agent. Quincy disclosed assets of $73 million and liabilities of $79.4 million. Debt includes $56.4 million owing on secured bonds issued through a state health-care finance agency. There is another $2.5 million secured obligation owing to Boston Medical Center Corp. Accrued liabilities are $18.2 million. RENO-SPARKS INDIAN: Fitch Affirms Long-Term IDR at 'BB' ------------------------------------------------------- Fitch Ratings takes this rating action on Reno-Sparks Indian Colony, NV (RSIC) as part of its continuous surveillance efforts: -- Long-term Issuer Default Rating (IDR) affirmed at 'BB'. The Rating Outlook is Stable. Key Rating Drivers -- Continued improvement in general government and health care clinic financial operations is a credit positive. Colony management projects a full reduction of the fund deficit and return to positive balance by fiscal 2011 close. -- The rating reflects the overall operations of the RSIC for which financial resources are solely dependent upon economically sensitive and concentrated sales and excise taxes in a region hit particularly hard by the economic downturn with little signs of recovery over the near term. -- Following previous delays, the opening of a major retailer on tribal land last year should continue to lead to revenue diversification away from tobacco sales and excise tax. This should create more financial stability over the long term although a high level of concentration is likely to remain. -- Solid financial management is reflected in a willingness to budget conservatively and cut expenditures in response to under-budget tobacco sales tax revenues. Despite the colony's important tax advantage and competitive pricing, this revenue has weakened of late and Fitch believes the long-term trend will show continued declines. -- RSIC maintains additional financial resources outside of the general and enterprise funds which can provide short-term financial cushion if needed. -- The debt service burden on the budget is elevated but the overall debt load is manageable. What Could Trigger a Rating Action -- Continued improvement in financial performance, dependent upon RSIC's ability to manage spending against fluctuations in enterprise fund revenues, would be viewed positively by Fitch. -- Demonstrated further diversification of sales tax revenues and ability to manage an increase in fixed costs associated with further leverage could reduce the overall risk profile for the credit. Credit Profile The tribe's authority to levy and collect sales and excise taxes on businesses operating on tribal trust land is generated from an agreement with the state signed in 1991. Tribal trust land consists of about 2,000 non-contiguous acres in and around downtown Reno, Nevada. The agreement stipulates that the tribe must charge a rate at least equivalent to the state's sales and excise taxes on tobacco products (sold at its smoke shops) but because it does not pay taxes on tobacco product purchased for sale, maintains an important pricing advantage over its non-tribal competitors. The tribe has flexibility on sales taxes levied on other business operations, like general retail and auto sales. There are no other tribally owned smoke shops in the RSIC service area. Fiscal 2011 is poised to be a significant year for colony financial operations as management meets two important self- imposed benchmarks; diversification (as defined by the colony) away from tobacco sales tax revenue and a return to positive balance in the general fund. Sales tax revenues from the five tribal-owned smoke shops have been the colony's largest source of revenues historically. Fiscal 2009 and 2010 tobacco sales and excise tax revenues totaled 66% (audited) and 56% (unaudited) of general fund revenues, respectively. Following some delays, the opening of Wal-Mart on colony land occurred in October 2010. Wal-Mart (rated 'AA', Stable Outlook by Fitch) is slated to be the largest single generator of sales tax revenues. Mid-way through fiscal 2011, the colony projects that Wal-Mart sales taxes will represent 30% of total sales tax revenues which when added to receipts largely from high-end car dealerships, tips non-tobacco sales tax revenue just over the 50% mark. The colony reports that all future economic development projects, including those in the pipe-line, will be focused on continued diversification away from tobacco sales taxes. The colony reports another important achievement in fiscal 2011 with projected results showing a full reversal of the general fund deficit and a return to accumulated balance. Protracted recessionary pressure and delays in the Wal-Mart opening caused under-budget sales tax revenues for both tobacco and other retail to prolong the colony's planned replenishment of unreserved balance in the general fund. The unaudited fiscal 2010 general fund accumulated deficit totaled negative $450,000 (4.5% of spending) and reflects a sizable reduction from a year prior, due to a $1.4 million net surplus, and down significantly from the negative 25% accumulated fund deficit reported in fiscal 2007. The original cause of the deficit was transfers to the colony's old healthcare clinic that was replaced with a new facility funded with series 2006 bond proceeds. The clinic opened in 2008 and maintains solid profitability. The successful operation of the clinic is a credit positive as Fitch's concern regarding continued general fund support is now very minimal. The fiscal 2010 surplus was driven largely by prudent budget management with the colony reducing expenditures in response to under-budget sales taxes. The colony is projecting a $2.5 million operating surplus for fiscal 2011 which management projects will fall directly to fund balance. Importantly, the RSIC retains fiscal cushion outside the general fund in the enterprise, grant and capital funds. As of May 31, 2011 the colony reports $5.4 million in unrestricted balances outside the general fund, representing a solid cushion against $11.6 million in fiscal 2011 budgeted general fund spending. Fitch notes that the colony's credit profile will always include a dependence on economically sensitive revenue streams and concentration among a few top taxpayers but diversification within this revenue source is a credit positive. Future upward rating action will be dependent upon the colony's continued demonstrated ability to manage expenses against fluctuations in these revenues to maintain structural balance and fiscal cushion. The RSIC has outstanding debt of $14.9 million, series 2006 fixed rated bonds rated 'AA-' by Fitch based on a direct-pay letter of credit (LOC) provided by U.S. Bank, National Association. The RSIC's debt profile includes $7.2 million in outstanding bank loans in addition to the series 2006 bonds. The colony is currently preparing its $8 million sales tax bond issuance for 2012. Pursuant to an agreement with the state, the sales tax bonds will fund construction of a state restitution center in exchange for the tribe obtaining six acres of state land adjacent to the Wal-Mart site which will be used for future economic development. The tribe's exposure to the capital costs of the restitution center is capped at $8 million. According to the colony, the revenue sharing agreement is awaiting state approval which outlines payment of debt service on the bonds from revenue sharing payments from the colony. The colony fiscal 2011 budget includes two months of payments associated with the agreement and fiscal 2012 will be the first year of full funding. The LOC supporting the series 2006 bonds was auto-renewed again and expires in June 28, 2012. If the LOC is terminated without substitution, a mandatory tender is triggered. At that point the bonds become bank bonds and the terms of the indenture specify that the RSIC must pay the bonds in full within 36 hours or pay a rate to the bank of 5% above prime until the bonds are paid in full. Ongoing payments required under a bank bond scenario would add significant additional stress to the RSIC's financial profile, as debt service on the bonds, already a high 18.5% of general fund spending, would rise notably. The RSIC is a federally recognized tribe with a reservation consisting of noncontiguous trust land totaling over 2,000 acres in and around downtown Reno, Nevada, within Washoe County (the county). The tribe has approximately 1,025 enrolled members and employs approximately 281 people, 45% of which are tribal members. The tribe is governed by an eight-member tribal council and a tribal chairman, all elected to four year staggered terms. ROCK & REPUBLIC: Great American Reports Record Response to Auction ------------------------------------------------------------------ Great American Group disclosed that its webcast auction for the assets of "avant-garde" wholesaler and retailer Rock & Republic Enterprises, Inc. was one of the company's most well-attended auctions with more than 500 registered for the July 26 auction. "We had pre-registered buyers both online and onsite, with standing-room-only at the auction site, so we knew ahead of time that it was going to be a fantastic event," said Roy Gamityan, a senior vice president/Industrial with Great American Group and the auctioneer at the event. "We received a great number of bids for the Shelby Mustang, which we anticipated from the amount of calls we had gotten about it. Overall, it was a huge success." A rare 1965 Shelby Mustang GT 350 SR, the most unique among several other vehicles being auctioned, sold for $141,250 -- which included a buyer's premium of 13 percent. "We had bidders for the car from around the world -- from the United States, Canada, and Mexico to the United Kingdom, Thailand, India, Columbia, and Bulgaria," Gamityan said. "In the end, it was sold to a winning bidder who lives here in Los Angeles." As a former denim jeans manufacturer, other Rock & Republic auction items included jeans, clothing materials, threads, garment machinery, sewing machines, and warehouse and garment racking -- along with computers, printers and tradeshow displays. In addition to the Shelby Mustang, other vehicles up for auction included a 2006 Bentley Continental Flying Spur, a 2006 Aston Martin V8 Vantage, two 2006 Volkswagen Touaregs, a 2008 GMC Sierra 1500 Truck, a 2005 Ford E450 Box Van, a 2005 Ford E350 Van, and a 2006 Mercedes Benz C230. "The sale exceeded our expectations in every way," Gamityan said. "Trust Plan Administrator David Gottlieb, who appointed us to conduct the auction, was very happy with the results of the sale...and commended our team for a job well done given the circumstances and pressure we were under during the lotting process." About Rock & Republic Rock & Republic Enterprises, Inc., was a wholesale and retail apparel company specializing in an avant-garde and distinctive line of clothing. Rock & Republic Enterprises, Inc., and Triple R, Inc., filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case Nos. 10-11728 and 10-11729) on April 1, 2010, represented by attorneys at Todtman, Nachamie, Spizz & Johns, P.C. in New York. Manderson, Schaefer & McKinlay, LLP, was the Company's special corporate counsel. Rosen Seymour Shapss Martin & Company LLC served as the Debtors' Forensic Accountants. Donlin Recano served as claims and noticing agent. The Company estimated $50 million to $100 million in assets, and $10 million to $50 million in liabilities. The Official Committee of Unsecured Creditors was represented by Robert M. Hirsh, Esq., at Arent Fox LLP, and Schuyler G. Carroll, Esq., at Perkins Coie LLP, as bankruptcy counsel. In December 2010, VF Corporation, Rock and Republic and The Official Committee of Unsecured Creditors executed an asset purchase agreement for VF to acquire the trademarks and intellectual property -- but not the business operations or retail stores -- of Rock and Republic. VF is a global leader in branded lifestyle apparel with more than 30 brands, including Wrangler(R), The North Face(R), Lee(R), Vans(R), Nautica(R), 7 For All Mankind(R), Eagle Creek(R), Eastpak(R), Ella Moss(R), JanSport(R), lucy(R), John Varvatos(R), Kipling(R), Majestic(R), Napapijri(R), Red Kap(R), Reef(R), Riders(R)and Splendid(R). Subsequently, the Debtors, the Committee and VF proposed a plan of liquidation for Rock & Republic predicated upon the VF deal. VF agreed to purchase the Debtors' IP assets for $57 million. The inventory, stores and other assets that VF did not buy were transferred to a liquidating trust under the plan. On March 23, 2011, the Bankruptcy Court entered an order confirming the Amended Joint Consolidated Joint Chapter 11 Plan for Rock & Republic and Triple R. The Plan became effective on March 30 and David K. Gottlieb was appointed as the Liquidating Trust Administrator. RYLAND GROUP: Incurs $10.71 Million Net Loss in Q2 -------------------------------------------------- The Ryland Group, Inc., reported a net loss of $10.71 million on $225.22 million of total revenues for the three months ended June 30, 2011, compared with a net loss of $21.76 million on $373.27 million of total revenues for the same period a year ago. The Company also reported a net loss of $30.25 million on $400.15 million of total revenues for the six months ended June 30, 2011, compared with a net loss of $36.06 million on $624.04 million of total revenues for the same period during the prior year. The Company's balance sheet at June 30, 2011, showed $1.57 billion in total assets, $1.05 billion in total liabilities and $513.79 million in total equity. A full-text copy of the press release announcing the financial results is available for free at http://is.gd/6zQC19 About Ryland Group Headquartered in Calabasas, California, The Ryland Group, Inc. (NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's largest homebuilders and a leading mortgage-finance company. Since its founding in 1967, Ryland has built more than 285,000 homes and financed more than 240,000 mortgages. The Company currently operates in 15 states and 19 homebuilding divisions across the country and is listed on the New York Stock Exchange under the symbol "RYL." * * * As reported by the Troubled Company Reporter on June 21, 2010, Fitch Ratings has affirmed Ryland Group, Inc.'s ratings -- Issuer Default Rating at 'BB'; and Senior unsecured debt at 'BB'. The Rating Outlook has been revised to Stable from Negative. Ryland Group carries Moody's "Ba3" corporate family rating, "Ba3" probability of default rating, "Ba3" senior unsecured notes rating, and "SGL-2" speculative grade liquidity rating. Ryland Group carries Standard & Poor's Ratings Services' 'BB-' corporate credit and senior unsecured note ratings. SAINT VINCENTS: Cancels Auction for Staten Island Assets -------------------------------------------------------- American Bankruptcy Institute reports that Saint Vincent Catholic Medical Centers of New York canceled auction scheduled for July 28 for its Staten Island, N.Y., assets after failing to receive any qualified competing bids. About Saint Vincents Saint Vincents Catholic Medical Centers of New York, doing business as St. Vincent Catholic Medical Centers -- http://www.svcmc.org/-- was anchored by St. Vincent's Hospital Manhattan, an academic medical center located in Greenwich Village and the only emergency room on the Westside of Manhattan from Midtown to Tribeca, St. Vincent's Westchester, a behavioral health hospital in Westchester County, and continuing care services that include two skilled nursing facilities in Brooklyn, another on Staten Island, a hospice, and a home health agency serving the Metropolitan New York area. Saint Vincent Catholic Medical Centers of New York and six of its affiliates first filed for Chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14945 through 05-14951). St. Vincents Catholic Medical Centers returned to bankruptcy court by filing another Chapter 11 petition (Bankr. S.D.N.Y. Case No. 10-11963) on April 14, 2010. The Debtor estimated assets of $348 million against debts totaling $1.09 billion in the new petition. Although the hospitals emerged from the prior reorganization in July 2007 with a Chapter 11 plan said to have "a realistic chance" of paying all creditors in full, the bankruptcy left the medical center with more than $1 billion in debt. The new filing occurred after a $64 million operating loss in 2009 and the last potential buyer terminated discussions for taking over the flagship hospital. Adam C. Rogoff, Esq., and Kenneth H. Eckstein, Esq., at Kramer Levin Naftalis & Frankel LLP, represent the Debtor in its Chapter 11 effort. SAINTS MEDICAL: Fitch Maintains RWE on 'BB+'-Rated Revenue Bonds ---------------------------------------------------------------- Fitch has maintained the Rating Watch Evolving on $45 million series 1993 revenue bonds issued on behalf of the Saints Medical Center (Saints) by the Massachusetts Health and Educational Facilities Authority. The bonds are rated 'BB+'. On July 21, 2011, Saints announced that its board of trustees voted to enter into and execute an asset purchase agreement to become part of Steward Health Care LLC. The terms of the agreement, which must receive regulatory approval, include the refunding of Saints' outstanding bonds. Fitch will monitor the progress of the transaction and take rating action as appropriate. SALON MEDIA: Inks Employment Agreement with David Talbot -------------------------------------------------------- As previously disclosed, Salon Media Group, Inc., appointed David Talbot, a member of the Company's Board of Directors, as interim chief executive officer of the Company succeeding Mr. Richard Gingras who resigned from his position as the CEO and Director of the Company on June 21, 2011, effective as of July 8, 2011. On July 26, 2011, Mr. Talbot entered into an employment agreement with the Company dated July 22, 2011, establishing the terms and conditions of his service as Chief Executive Officer from and after July 18, 2011. Pursuant to the employment agreement, Mr. Talbot will be paid a base salary of $17,500 semi-monthly (which equals $210,000 per year), less applicable tax and other withholdings, and will be eligible to participate in various Company fringe benefit plans, including medical, dental, vision, short term disability, long term disability, life insurance, 401(k), and vacation programs. Mr. Talbot also received an option to acquire 400,000 shares of the Company's common stock pursuant to the Company's 1994 Plan, vesting at the rate of 100,000 every three months, provided Mr. Talbot remains employed as the interim CEO of the Company. The first vesting will take place on Oct. 31, 2011, with subsequent vestings on Jan. 31, 2012, April 30, 2012, and July 31, 2012. Additionally, Mr. Talbot will be eligible to receive an additional 750,000 of immediately vested stock options upon achievement of certain goals and the occurrence of one or more events as contemplated in the Employment Agreement. A full-text copy of the Employment Agreement is available for free at http://is.gd/a1iF18 About Salon Media San Francisco, Calif.-based Salon Media Group (OTC BB: SLNM.OB) -- http://www.Salon.com/-- is an online news and social networking company and an Internet publishing pioneer. The Company reported a net loss attributable to common stockholders of $2.58 million on $4.57 million of net revenues for the year ended March 31, 2011, compared with a net loss attributable to common stockholders of $4.86 million on $4.29 million of net revenues during the prior year. The Company's balance sheet at March 31, 2011, showed $1.63 million in total assets, $10.63 million in total liabilities and a $9.00 million total stockholders' deficit. As reported by the TCR on July 4, 2011, Burr Pilger Mayer, Inc., in San Francisco, California, expressed substantial doubt about the Company's ability to continue as a going concern following the fiscal 2011 results. The independent auditors noted that the Company has suffered recurring losses and negative cash flows from operations and has an accumulated deficit of $108.4 million at March 31, 2011. SB PARTNERS: Incurs $232,853 Net Loss in June 30 Quarter -------------------------------------------------------- SB Partners filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $232,853 on $611,957 of total revenues for the three months ended June 30, 2011, compared with a net loss of $87,096 on $722,668 of total revenues for the same period during the prior year. The Company's balance sheet at June 30, 2011, showed $18.32 million in total assets, $20.41 million in total liabilities, and a $2.08 million total partners' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/SqKDcn About SB Partners Milford, Conn.-based SB Partners is a New York limited partnership engaged in acquiring, operating and holding for investment a varying portfolio of real estate interests. As of June 30, 2010, the partnership owns an industrial flex property in Maple Grove, Minnesota and warehouse distribution centers in Lino Lakes, Minnesota and Naperville, Illinois. The Company has a 30% interest in Sentinel Omaha, LLC. Sentinel Omaha is a real estate investment company which currently owns 24 multifamily properties and 1 industrial property in 17 markets. Sentinel Omaha is an affiliate of the partnership's general partner. The Company reported a net loss of $623,117 on $2.61 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $23.60 million on $2.58 million of total revenues during the prior year. As reported by the TCR on June 23, 2011, Dworken, Hillman, LaMorte and Sterczala, P.C., in Shelton, Connecticut, did not include a substantial doubt qualification in its report on the Company's 2010 financials. As reported in the Troubled Company Reporter on June 15, 2010, Dworken Hillman expressed substantial doubt about SB Partners' ability to continue as a going concern, following its 2009 results. The independent auditors noted that the partnership's unsecured credit facility matured on Feb. 28, 2009, and the partnership has not yet been able to arrange a replacement loan, extension or refinancing. SCOVILL FASTENERS: Taps Hays Financial as Trustee Accountant ------------------------------------------------------------ S. Gregory Hays, in his capacity as Chapter 7 Trustee for the bankruptcy estate of Scovill Fasteners Inc. and its debtor affiliates, ask the U.S. Bankruptcy Court for the Northern District of Georgia for authority to employ Hays Financial Consulting LLC as accountants. The Trustee needs Hays Financial to: (a) advise and assist Trustee and Trustee's attorneys in connection with an investigation of the affairs of the Debtors; (b) advise and assist the Trustee and other professionals employed by Trustee with regard to the preparation and filing of any and all tax returns which may be required; (c) advise and assist the Trustee and counsel regarding the retiree benefits plans and to coordinate communications with retirees; (d) provide support and assistance with regard to the proper receipt, disbursement and accounting for funds and other property of the estate; (e) review, analyze and report to Applicant and Applicant's legal counsel with regard to any financial reports; information or data concerning the administration of this case; the liquidation of assets; the collection of accounts receivable owed to the Debtors; and the enforcement and collection of any claims, including, without limitation, claims for preferences, fraudulent conveyances, and other transfers avoidable under the Bankruptcy Code, improper disposal of assets, and other claims of recovery granted to the Estates; (f) to provide assistance and advice with regard to the preservation, maintenance, and management of assets of the Debtors, and the advantageous disposition of any assets of Debtors; (g) to perform any other services that may be required as accountants for Trustee to assist Trustee's attorneys in the performance of Trustee's duties and exercise of Trustee's rights and powers under the Bankruptcy Code. Hays Financial will be paid according to its hourly rates, which are: Managing Principal $100 Managing Director $300 - $400 Director $180 - $275 Manager $125 - $200 Sr. Associates/Associates $100 - $175 Hays Financial will also be reimbursed for its necessary out-of- pocket expenses. S. Gregory Hays, a managing principal of Hays Financial, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Scovill Fasteners Scovill Fasteners Inc. -- dba Scovill Apparel Fasteners Inc. and Scovill Manufacturing Co. -- produced snap fasteners and tack buttons. It manufactured the majority of its products at its 300,000 square foot factory located in Clarkesville, Georgia. Clarkesville is also its headquarters location. Scovill Fasteners along with affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ga. Lead Case No. 11-21650) on April 19, 2011. Heather N. Byrd, Esq., and John C. Weitnauer, Esq., at Alston & Bird LLP, served as the Debtors' bankruptcy counsel. BMC Group Inc. is the claims and notice agent. Scovill estimated assets at $10 million to $50 million and debts at $100 million to $500 million. An Official Committee of Unsecured Creditors was appointed in the case. The Committee is represented by Greenberg Traurig, LLP, as its counsel. The bankruptcy case concerning Scovill Fasteners Inc. was converted to a case under Chapter 7 on July 12, 2011. The Chapter 11 trustee and the Official Committee of Unsecured Creditors, on July 1, filed a joint motion seeking an order converting the Chapter 11 cases due to the mounting and already substantial cost of administration of these estates in chapter 11, the absence of an operating business of the Debtors, the fact that conversion of the cases is in the best interests of the estates, the Debtors, and the creditors of the estates. Donald F. Walton, U.S. Trustee, Region 21, appointed S. Gregory Hays as interim trustee in the case to take over the Debtor's estate. SEAHAWK DRILLING: Court OKs ADR for $9-Mil. in PI Claims -------------------------------------------------------- The Troubled Company Reporter previously reported that Seahawk Drilling filed with the U.S. Bankruptcy Court an emergency motion for an order approving procedures for (A) liquidating and settling approximately $9 million in personal injury claims through direct negotiation and/or alternative dispute resolution and/or (B) modifying the automatic stay to permit certain litigation with respect to such personal injury claims to proceed. After a July 21, 2011 hearing, the Court granted the motion. A copy of the Alternate Dispute Resolution Procedures is available for free at http://bankrupt.com/misc/SeaHwADR.pdf About Seahawk Drilling Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup rig business in the United States, Gulf of Mexico, and offshore Mexico. It offers rigs and drilling crews on a day rate contractual basis. The Company and several affiliates filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Lead Case No. 11-20089) on Feb. 11, 2011. Berry D. Spears, Esq., and Jonathan C. Bolton, Esq., at Fullbright & Jaworkski L.L.P., in Houston, serve as the Debtors' bankruptcy counsel. Shelby A. Jordan, Esq., and Nathaniel Peter Holzer, Esq. at Jordan, Hyden, Womble, Culbreth & Holzer, P.C., in Corpus Christi, Texas, serve as the Debtors' co-counsel. Alvarez and Marsal North America, LLC, is the Debtors' restructuring advisor. Simmons & Company International is the Debtors' transaction advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Judy A. Robbins, U.S. Trustee for Region 7, appointed three creditors to serve on an Official Committee of Unsecured Creditors of Seahawk Drilling Inc. and its debtor-affiliates. Heller, Draper, Hayden, Patrick & Horn, L.L.C., represents the creditors committee. In its amended schedules, Seahawk Drilling disclosed $208,190,199 in assets and $438,458,460 in liabilities as of the petition date. Seahawk filed for Chapter 11 protection to complete the sale of all assets to Hercules Offshore, Inc. As reported by the Troubled Company Reporter on April 11, 2011, the Bankruptcy Court approved an Asset Purchase Agreement between Hercules Offshore and its wholly owned subsidiary, SD Drilling LLC, and Seahawk Drilling, pursuant to which Seahawk agreed to sell to Hercules, and Hercules agreed to acquire from Seahawk, all 20 of Sellers' jackup rigs and related assets, accounts receivable and cash and certain liabilities of Sellers in a transaction pursuant to Section 363 of the U.S. Bankruptcy Code. According to DBR Small Cap, the deal was valued at about $176 million when it received court approval. Based on previous TCR reports, the purchase price for the acquisition will be funded by the issuance of roughly 22.3 million shares of Hercules Offshore common stock and cash consideration of $25 million, which will be used primarily to pay off Seahawk's Debtor-in-Possession loan. The number of shares of Hercules Offshore common stock to be issued will be proportionally reduced at closing, based on a fixed price of $3.36 per share, if the outstanding amount of the DIP loan exceeds $25 million, with the total cash consideration not to exceed $45 million. The deal closed on April 27, 2011. SEAHAWK DRILLING: Wants Aucoin Claims as Claims Consultant ---------------------------------------------------------- Seahawk Drilling, Inc. and its Debtor affiliates, ask the U.S. Bankruptcy Court for the Southern District of Texas for authority to employ Aucoin Claims Service, Inc. as claim consultant. The Debtors will engage Aucoin to render, among other things, professional services that may include, without limitation, all aspects of claims investigation, including taking statements from witnesses and claimants, inspecting accident scenes, vessel inspections, safety audits, meeting with and preparing expert witnesses, reviewing and summarizing medical records, research and analysis of issues related to liability, legal causation, and seaman's status, negotiating and effecting agreed liquidation amounts with holders of Personal Injury Claims, preparation and evaluation of expert reports, and preparing for and testifying in proceedings. Aucoin will be paid an $85 flat hourly rate plus expenses. Patrick W. Aucoin, the president, senior claims representative, and owner of Aucoin Claims, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Seahawk Drilling Houston, Texas-based Seahawk Drilling, Inc., engages in a jackup rig business in the United States, Gulf of Mexico, and offshore Mexico. It offers rigs and drilling crews on a day rate contractual basis. The Company and several affiliates filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Lead Case No. 11-20089) on Feb. 11, 2011. Berry D. Spears, Esq., and Jonathan C. Bolton, Esq., at Fullbright & Jaworkski L.L.P., in Houston, serve as the Debtors' bankruptcy counsel. Shelby A. Jordan, Esq., and Nathaniel Peter Holzer, Esq. at Jordan, Hyden, Womble, Culbreth & Holzer, P.C., in Corpus Christi, Texas, serve as the Debtors' co-counsel. Alvarez and Marsal North America, LLC, is the Debtors' restructuring advisor. Simmons & Company International is the Debtors' transaction advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Judy A. Robbins, U.S. Trustee for Region 7, appointed three creditors to serve on an Official Committee of Unsecured Creditors of Seahawk Drilling Inc. and its debtor-affiliates. Heller, Draper, Hayden, Patrick & Horn, L.L.C., represents the creditors committee. In its amended schedules, Seahawk Drilling disclosed $208,190,199 in assets and $438,458,460 in liabilities as of the petition date. Seahawk filed for Chapter 11 protection to complete the sale of all assets to Hercules Offshore, Inc. As reported by the Troubled Company Reporter on April 11, 2011, the Bankruptcy Court approved an Asset Purchase Agreement between Hercules Offshore and its wholly owned subsidiary, SD Drilling LLC, and Seahawk Drilling, pursuant to which Seahawk agreed to sell to Hercules, and Hercules agreed to acquire from Seahawk, all 20 of Sellers' jackup rigs and related assets, accounts receivable and cash and certain liabilities of Sellers in a transaction pursuant to Section 363 of the U.S. Bankruptcy Code. According to DBR Small Cap, the deal was valued at about $176 million when it received court approval. Based on previous TCR reports, the purchase price for the acquisition will be funded by the issuance of roughly 22.3 million shares of Hercules Offshore common stock and cash consideration of $25 million, which will be used primarily to pay off Seahawk's Debtor-in-Possession loan. The number of shares of Hercules Offshore common stock to be issued will be proportionally reduced at closing, based on a fixed price of $3.36 per share, if the outstanding amount of the DIP loan exceeds $25 million, with the total cash consideration not to exceed $45 million. The deal closed on April 27, 2011. SNL FINANCIAL: S&P Assigns Prelim. 'B' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B' corporate credit rating to Charlottesville, Va.-based SNL Financial LC. The outlook is positive. "At the same time, we issued the company's proposed $205 million senior secured credit facilities a preliminary issue-level rating of 'B+' (one notch above the 'B' preliminary corporate credit rating), with a preliminary recovery rating of '2', indicating our expectation of substantial (70% to 90%) recovery for debtholders in the event of a payment default. The senior secured credit facilities consist of a $30 million revolver due 2016 and a $175 million term loan due 2018," S&P related. "Our preliminary 'B' corporate credit rating on SNL reflects our view that the company will post low-double-digit revenue and EBITDA growth over the balance of 2011," said Standard & Poor's credit analyst Chris Valentine. "In our opinion, SNL's business risk profile is weak because of a narrow business position, a relatively small size, and revenue exposure to volatile financial markets. We regard the financial risk profile as highly leveraged, based the company's high lease-adjusted debt to EBITDA ratio of above 5x, based on March 31, 2011 EBITDA and on questions around the private-equity owner's financial policy, following the proposed transaction." "The positive outlook reflects our view that SNL Financial should be able to generate positive discretionary cash flow and pay down the debt over the near term absent a leveraging transaction," said Mr. Valentine. SOLAR DRIVE: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Solar Drive, LLC 2450 Solar Drive Los Angeles, CA 90046 Bankruptcy Case No.: 11-42298 Chapter 11 Petition Date: July 28, 2011 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Peter Carroll Debtor's Counsel: Carolyn A. Dye, Esq. LAW OFFICES OF CAROLYN A. DYE 3435 Wilshire Boulevard, Suite 1045 Los Angeles, CA 90010 E-mail: trustee@cadye.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Tim Devine, manager. Debtor's List of 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tim Devine Advances for $8,000,000 1400 Devlin Drive Development of Los Angeles, CA 90069 PR THornberg Mortgage 1st Trust Deed $2,618,000 3815 South West Temple Salt Lake City, UT 84115-4412 Ashford Transition Fund I, L.P. 3rd Trust Deed $2,500,000 701 S. Parker Street Orange, CA 92868 Bank of America 2nd Trust Deed on $500,000 P.O. Box 301200 1421 La Joll Los Angeles, CA 90030-1200 Ezra Brutzkus Gubner, LLP Legal Services $300,000 21650 Oxnard Street, Suite 500 Woodland Hills, CA 91367 Ron Vidor Loan $200,000 Dumas & Associates Legal Fees $133,669 Scott Alan Schiff Legal Fee $91,000 Dan Rudat Unsecured Loans $42,000 Bill Crystal -- $19,000 SOUTH BAY EXPRESSWAY: San Diego Assn. to Acquire Toll Road ---------------------------------------------------------- Tony Perry at the Los Angeles Times reports that a San Diego regional government organization has agreed to purchase the bankrupt State Route 125 toll road near the U.S.-Mexico border for approximately $345 million. The road stretches from State Route 905 near the Otay Mesa Port of Entry north through eastern Chula Vista to State Route 54 near the Sweetwater Reservoir. According to the report, the San Diego Assn. of Governments, governed by a board composed of officials from the region's 18 cities and the Board of Supervisors, voted in closed session Friday to make the purchase, once a public hearing is held. About South Bay Expressway South Bay Expressway, L.P., dba San Diego Expressway, L.P., filed for Chapter 11 (Bankr. S.D. Calif. Case No. 10-04516) on March 22, 2010. Its affiliate, California Transportation Ventures Inc., also filed for bankruptcy. The Debtors developed and operate a four lane, nine mile express toll road in Southern California commonly referred to as the South Bay Expressway or State Road 125. Both estimated assets and debts of $500 million to $1 billion in their bankruptcy petitions. Robert Pilmer, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring effort. PricewaterhouseCoopers LLP is auditor and tax advisor. Imperial Capital LLC is financial advisor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The Debtors say that as of the bankruptcy filing, they have roughly $640 million in book value of total assets and roughly $570 million in book value of total liabilities. On April 14, 2011, the Court confirmed the Debtor's Third Amended Joint Plan of Reorganization, and approved a global settlement with the support of all major creditor constituencies. SPANSION INC: Court Flips Ruling on Apple's Patent License Rights ----------------------------------------------------------------- District Judge Robert B. Kugler said the Bankruptcy Court erred in denying Apple Inc.'s motion pursuant to 11 U.S.C. Sec. 365(n) to retain its license under a letter agreement with Spansion Inc. The District Court held that the letter agreement includes an enforceable patent license, and Apple properly moved to retain its rights to the license pursuant to Sec. 365(n). Apple purchases memory chips from many suppliers, including Samsung Electronics Co. and Spansion. Pre-bankruptcy, Spansion commenced litigation before the U.S. District Court for the District of Delaware and the International Trade Commission against Samsung and numerous purchasers of Samsung's memory chips over alleged patent infringement and to bar importation of numerous consumer electronic products that use Samsung flash memory chips. Because Spansion's litigation strategies frustrated Apple's ability to bring its products to market in the United States, Apple considered ending its business relationship with Spansion. However, Apple and Spansion negotiated an agreement. On Feb. 10, 2009, the parties executed the Letter Agreement, which provides that Spansion is willing to dismiss the ITC action against Apple, and will not re-file the ITC action or another action related to one or more of the same patents against Apple, provided that Apple agrees Spansion will not be disbarred as an Apple supplier; and Spansion will remain the primary supplier on current platforms where Spansion is qualified for the life-time of the product and will also be considered for future platforms. During Spansion's bankruptcy, Spansion and Samsung negotiated a settlement agreement regarding the ITC action. However, the Bankruptcy Court rejected the settlement. Thus, in June 2009, Spansion resumed its efforts in the ITC action against all respondents, including Samsung and Apple. In July 2009, Spansion moved to reject the Letter Agreement as an executory contract. Apple opposed, but failed. After the Bankruptcy Court granted Spansion's rejection motion, Apple moved pursuant to Sec. 365(n) to retain all intellectual property rights secured by the Letter Agreement. Apple's motion papers explained that the Letter Agreement constituted a license to the patents at issue in the ITC action because Spansion promised not to sue Apple regarding infringement of those patents. Apple argued that because Sec. 365(n) permits parties to a rejected executory contract to move to retain intellectual property rights secured by the contract, Apple was entitled to retain the patent license notwithstanding Spansion's rejection. The Bankruptcy Court denied Apple's motion, but found that Spansion's rejection of the Letter Agreement did not terminate the Letter Agreement. Apple appeals the Bankruptcy Court's denial of its motion to retain the patent license. Spansion appeals the Bankruptcy Court's ruling that the Letter Agreement is not terminated. In his July 28, 2011 Opinion, available at http://is.gd/K231fp from Leagle.com, Judge Kugler denied Spansion's appeal, granted Apple's appeal, and remanded the matter to the Bankruptcy Court for a rehearing regarding Apple's motion to retain the patent license. The appellate cases are Apple, Inc., Appellant, v. Spansion, Inc., et al., Appellees; and Spansion, Inc., et al., Cross-Appellants, v. Apple, Inc., Cross-Appellee, Civil No. 10-252, 10-554 (D. Del.). About Spansion Spansion Inc. -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 bankruptcy on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On Feb. 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, served as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, served as the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee appointed an official committee of unsecured creditors in the case. As of Sept. 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Spansion submitted its first plan of reorganization on Oct. 26, 2009, and gained approval from the U.S. Bankruptcy Court on its amended disclosure statement on Dec. 22, 2009. Spansion received confirmation from the U.S. Bankruptcy Court for its plan on April 16, 2010, and emerged from Chapter 11 protection May 10, 2010. Spansion entered Chapter 11 reorganization with more than $1.5 billion in debt. Spansion emerged a well-capitalized company with less than $480 million in debt and roughly $230 million in cash, which is supplemented with an undrawn credit line of up to $65 million. STELLAR GT: The Georgian Receivership Extended Until Oct. 31 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Maryland temporarily modified the automatic stay for the limited purposes of permitting: (i) Wells Fargo Bank, N.A., and Stellar GT TIC LLC and VFF TIC LLC, to seek a further extension of the receivership order until Oct. 31, 2011; and (ii) the receiver to continue to operate and manage the property as directed and permitted by the receivership order. The receivership order expired on June 30, 2011. Greystar Management Services, LP was appointed receiver for a certain 891- unit multi-family high rise property (consisting of two 14-story apartment buildings) located at 8750 Georgia Avenue in Silver Spring, Maryland, commonly known as The Georgian. Wells Fargo Bank, N.A., as trustee for the registered holders of Deutsche Mortgage & Asset Receiving Corporation, COMM 2007-C9, Commercial Mortgage Pass-Through Certificates, U.S. Bank National Association, as Trustee, as successor in interest to Bank of America, National Association, as Trustee, as successor in interest to Wells Fargo Bank, N.A., as Trustee for the registered holders of Deutsche Mortgage & Asset Receiving Corporation, CD 2007-CD5 Commercial Mortgage Pass-Through Certificates, and FCP Georgian Towers, LLC, acting by and through Helios AMC, LLC, in its capacity as Special Servicer, holds certain notes evidencing a mortgage loan guarantied by the Debtors in the aggregate original principal amount of $185,000,000, secured by a certain Indemnity Deed of Trust, Security Agreement, Financing Statement, Fixture Filing and Assignment of Leases, Rents and Security Deposits dated Feb. 28, 2007. The lender is represented by: Jantra Van Roy, Esq. ZEICHNER ELLMAN & KRAUSE LLP 575 Lexington Avenue New York, NY 10022 Tel: (212) 826-5353 Fax: (212) 753-0396 E-mail: jvanroy@zeklaw.com About Stellar GT TIC LLC Stellar GT TIC LLC and VFF TIC LLC, owners of the Georgian apartments located at 8750 Georgia Avenue in Silver Spring, Maryland, filed for Chapter 11 bankruptcy protection (Bankr. D. Md. Case Nos. 11-22977 and 11-22980) on June 22, 2011. Judge Wendelin I. Lipp oversees the case. Michelle Maloney-Raymond is the case administrator. Matthew G. Summers, Esq., at Ballard Spahr LLP, serves as the Debtors' counsel. The Debtor disclosed assets of undetermined amount and liabilities of $207,623,768. The Debtors negotiated a plan of reorganization before filing for Chapter 11. The proposed plan is premised on either (1) a sale of the project pursuant to an auction process or (2) a consensual restructuring of the secured debt. Broker CB Richard Ellis Inc. has been hired to conduct the sale. The auction rules provide that a first-round sealed bid would be required to be submitted by Aug. 24. The broker would then have until Sept. 5 to negotiate with the first-round bidders. Second- round sealed bids would be due Sept. 5. The highest second-round bid would be identified by Sept. 12, 2011. The highest bid would be submitted for approval at the confirmation hearing in October. Wells Fargo, the holder of a $207.6 million secured debt, can bid at the auction. The Lender is represented by Mark Taylor, Esq., at Kilpatrick Townsend & Stockton LLP, and Jantra Van Roy, Esq., at Zeichner Ellman & Krause LLP. STYLEMASTER INC: Stern May Affect Circuit Split on Res Judicata --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that when the same facts were fully litigated during a bankruptcy case, a creditor was barred by the doctrine of collateral from filing a later lawsuit against other creditors in the bankruptcy based on the Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO. Without resolving the question, last week's ruling from the federal appeals court in Chicago mentions that a recent bankruptcy ruling from the Supreme Court will complicate the resolution of a split of circuits on a related res judicata question. Mr. Rochelle relates that collateral estoppel is a rule that bars litigating the same issue a second time. As explained in a July 28 opinion by the U.S. Court of Appeals in Chicago, issues cannot be litigated a second time if they were the same as in the prior proceeding, the issue was actually litigated, the issue was essential to the final judgment in the prior litigation, and the party against which the issue is asserted was "fully represented in the prior action." Mr. Rochelle notes that while the ruling on collateral estoppel is unremarkable, the case is most notable for its discussion of how the Supreme Court's June decision in Stern v. Marshall may have a role to play on the split of circuits on a related res judicata issue. According to Mr. Rochelle, the 7th Circuit is the only appeals court to hold that a "core" ruling in a prior suit isn't res judicata in a later suit where the bankruptcy jurisdiction is "non-core." All other circuits hold that res judicata applies regardless of the core or non-core distinction. The case is Matrix IV Inc. v. American national Bank & Trust Co. of Chicago, 08-3917, U.S. 7th Circuit Court of Appeals(Chicago). The 7th Circuit's decision was first reported in Monday's edition of the Troubled Company Reporter. A copy of the ruling is available at http://is.gd/i5k4cPfrom Leagle.com. According to an April 2002 article by the Troubled Company Reporter, StyleMaster Inc. was the nation's largest manufacturing company owned by an African-American woman. StyleMaster was forced to file for Chapter 11 bankruptcy protection following a $7 million shortfall due to retailer Kmart Corp.'s default on payments. StyleMaster, a plastics injection molding company at 77th St. and Columbus Ave., in Chicago, employed more than 160 full-time and temporary workers at its $50 million facility in the Ashburn community, the 2002 report says. TESORO CORP: Fitch Affirms Issuer Default Rating at 'BB' -------------------------------------------------------- Fitch Ratings has affirmed Tesoro Corporation's (TSO) Issuer Default Rating (IDR) at 'BB' but revised the company's Outlook to Positive. Fitch has affirmed these ratings of Tesoro: -- Issuer Default Rating (IDR) at 'BB'; -- Senior Unsecured Notes at 'BB'; -- Secured Bank Facility at 'BB+'. Approximately $1.93 billion in debt is affected by this action. The main drivers of the revised Outlook include these: -- Faster-than-anticipated improvement in financial performance; -- Tesoro's access to heavily discounted WTI-linked crudes at its Mandan, ND, Salt Lake, UT, and Anacortes, WA refineries; and -- Recent deleveraging at the parent level. Tesoro's financial performance has rebounded significantly over the last several quarters. The company generated LTM EBITDA of $1.02 billion at March 31, 2011 versus $661 million in 2010 and just $443 million in 2009. The improved performance has resulted in debt/EBITDA leverage of 1.9 times (x) versus 4.2x at year-end 2009, and LTM EBITDA interest coverage of 5.6x versus a low of 2.9x in 2009. LTM free cash flow was $372 million. The company's improved performance has in turn been driven by improvements in global refining fundamentals and the unexpectedly large gap that has opened up between Brent and WTI recently. The Brent-WTI crude spread which has historically traded in a band of +/-$3 barrel -- has blown out to the $12 -$20/barrel range, benefiting refineries with access to landlocked Canadian and MidContinent crudes, including Tesoro's 60,000 bpd Mandan, ND and Salt Lake, UT refineries, and its 120,000 bpd Anacortes, WA refinery. Key drivers for the Brent-WTI blowout include the geopolitical risk premium introduced by the Arab Spring and loss of Libyan light sweet crude supply; the lack of pipeline options from Cushing to Gulf Coast export markets; and North Sea field maintenance. While the duration of several of these factors remains unknown, Fitch anticipates that at a minimum the pipeline takeaway capacity issue in North America is unlikely to be fully resolved at least for the next several quarters, which should prolong the Brent-WTI premium, and help offset lingering weakness in the company's core California market. Fitch anticipates that Tesoro will be FCF positive in 2011 and 2012 under our base case. Linked to higher cash generation, Tesoro retired its $150 million 7.5% junior subordinated 2012 notes in Q2 and may retire additional debt at the parent level to reach its targeted debt-to- capitalization of 30% (debt-to-cap was 37% as of March 31, 2011). Looking forward, the ramp up of activity at new subsidiaries TPSA and TLLP is likely to result in additional non-recourse debt at those entities which Fitch anticipates will be consolidated on Tesoro's balance sheet. These positives are partially offset by the slowness of the economic recovery on the west coast, with unemployment in California at 11.9% stuck well above national average. Tesoro is also subject to ongoing pressures from unfavorable regulation, including the biofuels mandate (13.95 million gpy of renewables in 2011, rising to 36 million gpy by 2022); higher corporate average fuel economy (CAFE) standards; and in California, GHG regulation through AB20, which mandates a rollback of GHG emissions to 1990 levels by 2020. Tesoro's liquidity at March 31, 2011 was good and included $974 million of revolver capacity (53% availability). Cash and equivalents were $724 million, for total availability of approximately $1.7 billion. Tesoro's borrowing-base determined revolver is secured by cash (100%), eligible petroleum inventories (85%), and eligible receivables net of a standard reserve (80%). Note that the borrowing base is linked to the price of ANS crude and is re-determined monthly. Tesoro also has three separate uncommitted LoC agreements totaling $540 million in capacity to support purchases of foreign crude. Subsidiaries TPSA and TLLP also have separate secured revolver facilities (TPSA - $350 million uncommitted facility; TLLP $150 million secured revolver due 2014). Tesoro's maturity schedule is manageable, with no major maturities due until 2012, when its 6.25% $450 million note comes due. A key covenant feature of approximately $1.7 billion in total debt outstanding is the non-investment grade covenant protections which fall away if Tesoro's ratings are upgraded to investment grade. The fall-away covenants include change of control puts, restricted payments, and restrictions on liens and asset sales and are not reinstituted if Tesoro subsequently falls below investment grade. Tesoro's other obligations are manageable. The company's Asset Retirement Obligation (ARO) at year-end 2010 totaled $30 million and was primarily linked to expected retail site remediation. The company's pension deficit was $270 million at year-end 2010 versus $249 million the year prior but is manageable when scaled to underlying cash flows. The company restructured its pension and other post-retirement benefit program in 2010. It made a voluntary payment of $12 million in the first quarter. Tesoro's derivatives exposure is limited, and is generally aimed at protecting the value of excess crude and product inventories built up prior to planned turnarounds. Looking forward, we anticipate this will increase somewhat as activity at TPSA ramps up and the company flat-hedges associated crude oil volumes. The company had a net derivative liability of $42 million at March 31, 2011. Catalysts for an upgrade include continued positive financial results; additional debt reductions, or evidence of sustained improvement in the California market. Catalysts for a downgrade include a leveraging transaction; a double dip recession or meaningful slowdown in refined product demand which results in deterioration in financial performance; or sustained operational problems at one or more of Tesoro's key refineries. TOWNSENDS INC: Closes Crestwood Facility, Leaves 476 Jobless ------------------------------------------------------------ Owen Covington at The Business Journal reports that Townsends Inc. said it is closing its Crestwood Farms plant in Mocksville, North Carolina, and laying off its 476 workers within the next two months. According to the report, the Company filed a notice with the N.C. Department of Commerce on Friday announcing the closure and layoffs in Davie County as required by the Worker Adjustment and Retraining Notification Act. The act requires companies either closing a plant or laying off a significant number of workers to notify the state. In the notice, Omtron USA CEO David Purtle said it will close the plant at 251 Eaton Road "because revenues have not kept pace with costs." In May, Townsends announced in a different WARN Act notice that it was laying off 145 employees at a Siler City facility, which is closing as well. About Townsends Inc. Founded in 1891, Townsends Inc. is a third-generation, family- owned poultry company. Headquartered in Georgetown, Delaware, Townsends operates production and processing facilities in Arkansas and North Carolina. Townsends Inc. -- fka Townsend Specialty Foods -- and several affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 10-14092) on Dec. 19, 2010. As of Dec. 5, 2010, the Debtors disclosed $131 million in total assets and $127 million in total debts. Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell, serves as the Debtors' bankruptcy counsel. McKenna Long & Aldridge LLP serves as special counsel. Huron Consulting Group's Dalton T. Edgecomb serves as the Debtors' chief restructuring officer. SSG Capital Advisors, LLC, serves as investment banker. Donlin, Recano & Company, Inc., is the Debtors' claims, noticing and balloting agent. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has tapped Lowenstein Sandler PC as its counsel and J.H. Cohn LLP as its financial advisor. No trustee or examiner has been appointed in the Debtors' bankruptcy cases. In February 2011, Townsends obtained approval from the bankruptcy judge to sell to Omtron USA LLC two chicken processing plants in Chatham County, North Carolina, and other assets for $24,936,950. Omtron is an affiliate of Agroholding Avangard, Ukraine's largest egg producer. The Debtor changed its name to TW Liquidation Corp. following the sale. TOWNSENDS INC: Can Hire Peter Gnatowski as Financial Analyst ------------------------------------------------------------ The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware authorized TW Liquidation Corp. and its debtor-affiliates to: -- modify retention and employment of Huron Consulting Group to provide restructuring management and advisory services; and -- employ Peter Gnatowski as a financial analyst in assisting the firm and the Debtors in the post-sale wind-down of the estates and will provide services previously performed by Omtron UST LLC. As reported in the Troubled Company Reporter on June 16, 2011, the Debtors told the Court that Dalton T. Edgecomb is the principal professional staffed by the firm on the engagement and is the current chief restructuring officer for the Debtors. Mr. Gnatowski will charge $340 per hour for this engagement. The Debtors assured the Court that the firm is a "disinterested person" within the meaning Section 101(14) of the Bankruptcy Code. About Townsends Inc. Founded in 1891, Townsends Inc. is a third-generation, family- owned poultry company. Headquartered in Georgetown, Delaware, Townsends operates production and processing facilities in Arkansas and North Carolina. Townsends Inc. -- fka Townsend Speciality Foods -- and several affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 10-14092) on Dec. 19, 2010. As of Dec. 5, 2010, the Debtors disclosed $131 million in total assets and $127 million in total debts. Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell, serves as the Debtors' bankruptcy counsel. McKenna Long & Aldridge LLP serves as special counsel. Huron Consulting Group's Dalton T. Edgecomb serves as the Debtors' chief restructuring officer. SSG Capital Advisors, LLC, serves as investment banker. Donlin, Recano & Company, Inc., is the Debtors' claims, noticing and balloting agent. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has tapped Lowenstein Sandler PC as its counsel and J.H. Cohn LLP as its financial advisor. No trustee or examiner has been appointed in the Debtors' bankruptcy cases. In February 2011, Townsends obtained approval from the bankruptcy judge to sell to Omtron USA LLC two chicken processing plants in Chatham County, North Carolina, and other assets for $24,936,950. Omtron is an affiliate of Agroholding Avangard, Ukraine's largest egg producer. The Debtor changed its name to TW Liquidation Corp. following the sale. TRIKEENAN TILEWORKS: Losses Bid to Remain in Hornell ---------------------------------------------------- Andrew Poole at the Evening Tribune reports that IDA Executive Director Jim Griffin said Trikeenan Tileworks has lost its final battle in bankruptcy court to remain in Hornell, New York. Mr. Poole notes Trikeenan moved into Hornell in 2006, operating out of a 45,000 square foot facility located on Shawmut Drive. According to the report, the final hearing, which would "get all the creditors together and tell them how they're splitting up the pie," Mr. said Griffin, was originally scheduled for Aug. 30. It was moved to Wednesday after a fire severely damaged one of Butler's plants in California. About Trikeenan Tileworks Trikeenan Tileworks -- http://www.trikeenan.com/-- makes and sells tiles. Trikeenan Tileworks, Inc., Trikeenan Tileworks, Inc. of New York, and Trikeenan Holdings, Inc., filed for Chapter 11 bankruptcy (Bankr. D. N.H. Lead Case No. 10-13725) on Aug. 30, 2010, estimating $500,000 to $1 million in assets, and $1 million to $10 million in debts. Jennifer Rood, Esq., at Bernstein Shur, in Manchester, New Hampshire, serves as the Debtors' counsel. TRIUS THERAPEUTICS: Inks Collaboration Agreement with Bayer ----------------------------------------------------------- Trius Therapeutics, Inc., and Bayer Pharma AG have signed an exclusive agreement to develop and commercialize Trius' lead Phase 3 antibiotic, torezolid phosphate (torezolid), in China, Japan and all other countries in Asia, Africa, Latin America and the Middle East, excluding North and South Korea. Under the collaboration agreement Trius retains full development and commercialization rights outside the licensed territory including the United States, Canada and the European Union. In exchange for development and commercialization rights in its licensed territory, Bayer will pay Trius $25 million upfront and will support approximately 25% of the future development costs of torezolid required for global approval in acute bacterial skin and skin structure infections (ABSSSI) and pneumonia. In addition, Trius is eligible to receive up to $69 million upon the achievement of certain development, regulatory and commercial milestones and will receive double-digit royalties on net sales of torezolid in the licensed territory. "Bacterial infectious diseases represent one of the largest therapeutic areas in China and continue to grow rapidly there and in other emerging markets. This collaboration is a key element in our strategy of bringing innovative medicines to patients, especially in emerging markets," said Dr. J�rg Reinhardt, Chairman of the Board of Management of Bayer HealthCare. "Bayer's commitment to the infectious disease area and their depth and breadth of experience in these markets makes them an ideal partner for Trius," said Jeffrey Stein, Ph.D., President and CEO of Trius. "At the same time, consistent with our strategy, we have retained rights to the U.S. and E.U. markets where life- threatening infections from MRSA and other gram positive pathogens continue to be a significant concern." About Trius Therapeutics San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) -- http://www.triusrx.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of innovative antibiotics for serious, life-threatening infections. The Company's first product candidate, torezolid phosphate, is an IV and orally administered second generation oxazolidinone being developed for the treatment of serious gram-positive infections, including those caused by MRSA. In addition to the company's torezolid phosphate clinical program, it is currently conducting two preclinical programs using its proprietary discovery platform to develop antibiotics to treat infections caused by gram-negative bacteria. The Company has incurred losses since its inception and it anticipates that it will continue to incur losses for at least the next several years. The Company does not anticipate that its existing working capital, including the funds received on Aug. 6, 2010, from its IPO, alone will be sufficient to fund its operations through the successful development and commercialization of torezolid phosphate or any other products it develops. As a result, the Company says it will need to raise additional capital to fund its operations and continue to conduct clinical trials to support potential regulatory approval of torezolid phosphate and any other product candidates. The Company reported a net loss of $23.86 million on $8.03 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $22.68 million on $5.01 million of total revenues during the prior year. The Company's balance sheet at March 31, 2011, showed $41.16 million in total assets, $4.90 million in total liabilities, all current, $238,000 in deferred revenue and $36.02 million in total stockholders' equity. UNITED CONTINENTAL: Protests EU's Carbon Emission Program --------------------------------------------------------- United Continental Holdings, Inc., together with AMR Corp's American Airlines and the Air Transport Association of America, disagrees with the European Union's move for emission curbs on aviation, Stephanie Bodoni and Ewa Krukowska of Bloomberg News report. The group will challenge a law expanding the EU carbon market to encompass flights that depart from or arrive at an EU airport, the report relates. Steve Lott, a spokesperson for the ATA, said in an e-mailed statement to Bloomberg, that the EU system "as applied to international aviation violates international law and is bad policy." The EU carbon emission curbs campaign is subject to a lawsuit filed by United Continental and the ATA previously before the High Court in London, Bloomberg notes. The High Court then referred the case to the EU Court for Justice in Luxembourg last year to clarify the legality of the emissions curbs, the report states. The High Court recently held a hearing on July 5, 2011, on the dispute, the report adds. About United Continental United Continental Holdings, Inc. (NYSE: UAL) is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, these airlines operate a total of approximately 5,800 flights a day to 371 airports throughout the Americas, Europe and Asia from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York, San Francisco, Tokyo and Washington, D.C. United and Continental are members of Star Alliance, which offers more than 21,200 daily flights to 1,172 airports in 181 countries worldwide through its 28 member airlines. United's and Continental's more than 80,000 employees reside in every U.S. state and in many countries around the world. For more information about United Continental Holdings, Inc., go to UnitedContinentalHoldings.com. For more information about the airlines, see http://www.united.com/and http://www.continental.com/,and follow each company on Twitter and Facebook. United Continental carries 'B2' corporate family and probability of default ratings, with stable outlook, from Moody's, 'B' issuer credit ratings, with stable outlook, from Standard & Poor's, and 'B-' issuer default rating from Fitch. UAL Corp filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-8191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. At June 30, 2010, UAL had $20.134 billion in total assets against total current liabilities of $8.573 billion, long-term debt of $6.281 billion, long-term obligations under capital leases of $1.01 billion, other liabilities and deferred credits of $7.022 billion, and a stockholders' deficit of $2.756 billion. UNITED CONTINENTAL: Says Demand to China Routes Strong ------------------------------------------------------ United Continental Holdings, Inc. Chief Executive Officer Jeff Smisek said air travel demand on the combined airline's routes to China is strong, according to China Daily. Mr. Smisek also does not foresee the demand for air travel to China slowing, the report notes. In fact, United Continental considers the flights to China as among its most important international routes, the CEO states, the report relays. In general, Mr. Smisek says air travel between China and the U.S. will remain strong despite worries about economic weaknesses in both countries, the report says. The CEO also expects that the economic relations between the two countries will continue to grow over time, the report adds. United Continental operates 79 weekly nonstop U.S. to China flights, far exceeding the frequency of other U.S. and Chinese airlines, the report discloses. About United Continental United Continental Holdings, Inc. (NYSE: UAL) is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, these airlines operate a total of approximately 5,800 flights a day to 371 airports throughout the Americas, Europe and Asia from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York, San Francisco, Tokyo and Washington, D.C. United and Continental are members of Star Alliance, which offers more than 21,200 daily flights to 1,172 airports in 181 countries worldwide through its 28 member airlines. United's and Continental's more than 80,000 employees reside in every U.S. state and in many countries around the world. For more information about United Continental Holdings, Inc., go to UnitedContinentalHoldings.com. For more information about the airlines, see http://www.united.com/and http://www.continental.com/,and follow each company on Twitter and Facebook. United Continental carries 'B2' corporate family and probability of default ratings, with stable outlook, from Moody's, 'B' issuer credit ratings, with stable outlook, from Standard & Poor's, and 'B-' issuer default rating from Fitch. UAL Corp filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-8191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. At June 30, 2010, UAL had $20.134 billion in total assets against total current liabilities of $8.573 billion, long-term debt of $6.281 billion, long-term obligations under capital leases of $1.01 billion, other liabilities and deferred credits of $7.022 billion, and a stockholders' deficit of $2.756 billion. UNITED CONTINENTAL: Signs Distribution Deal With Travelocity ------------------------------------------------------------ United Continental Holdings, Inc. (NYSE: UAL) announced that its wholly owned subsidiaries United Air Lines, Inc. and Continental Airlines, Inc. signed a new multi-year agreement with Travelocity that enables customers to continue to purchase tickets through Travelocity's online booking sites, including Travelocity.com, Travelocity Business, Travelocity Partner Network and Travelocity.ca. "We are committed to being accessible to travelers who choose to do business through high-quality and efficient sales outlets," said Mark Bergsrud, United's senior vice president of marketing. "This agreement with Travelocity ensures that our mutual customers will continue to have access to our fares and schedules." "We're very pleased to continue our long-standing relationship with United and Continental," said Noreen Henry, senior vice president of global partner services at Travelocity. "They are world-class airlines and we are thrilled that we will continue to feature them on our site." About Travelocity Travelocity is committed to being the traveler's champion -- before, during and after the trip -- and provides the most comprehensive and proactive guarantee in the industry (http://www.travelocity.com/guarantee). This customer-driven focus, backed by 24/7 live phone support, competitive prices and powerful shopping technology has made Travelocity one of the largest travel companies in the world. Travelocity also owns and operates: Travelocity Business(R) for corporate travel; igougo.com, a leading online travel community; lastminute.com, a leader in European online travel; and ZUJI, a leader in Asia- Pacific online travel. Travelocity is owned by Sabre Holdings Corporation, a world leader in travel marketing and distribution. About United Continental United Continental Holdings, Inc. (NYSE: UAL) is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, these airlines operate a total of approximately 5,800 flights a day to 371 airports throughout the Americas, Europe and Asia from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York, San Francisco, Tokyo and Washington, D.C. United and Continental are members of Star Alliance, which offers more than 21,200 daily flights to 1,172 airports in 181 countries worldwide through its 28 member airlines. United's and Continental's more than 80,000 employees reside in every U.S. state and in many countries around the world. For more information about United Continental Holdings, Inc., go to UnitedContinentalHoldings.com. For more information about the airlines, see http://www.united.com/and http://www.continental.com/,and follow each company on Twitter and Facebook. United Continental carries 'B2' corporate family and probability of default ratings, with stable outlook, from Moody's, 'B' issuer credit ratings, with stable outlook, from Standard & Poor's, and 'B-' issuer default rating from Fitch. UAL Corp filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-8191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. At June 30, 2010, UAL had $20.134 billion in total assets against total current liabilities of $8.573 billion, long-term debt of $6.281 billion, long-term obligations under capital leases of $1.01 billion, other liabilities and deferred credits of $7.022 billion, and a stockholders' deficit of $2.756 billion. UNIVERSAL BIOENERGY: Incurs $2.0 Million Net Loss in 2010 --------------------------------------------------------- Universal Bioenergy, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, reporting a net loss of $2.00 million on $41.32 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $1.87 million on $0 of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010, showed $13.26 million in total assets, $13.31 million in total liabilities and a $49,427 total stockholders' deficit. S.E.Clark & Company, P.C., in Tucson, Arizona, the Company's independent auditors, noted that the accumulation of losses and shortage of capital raise substantial doubt about the Company's ability to continue as a going concern. A full-text copy of the Annual Report is available for free at: http://is.gd/qyjiVk About Universal Bioenergy Universal Bioenergy Inc., is an alternative energy company headquartered in Irvine, California. The Company's new strategic direction is to develop and market a diverse product line of alternative and natural energy products including, natural gas, solar, biofuels, wind, wave, tidal, and green technology products. VALITAS HEALTH: S&P Assigns 'B' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to St. Louis-based correctional facility health care provider Valitas Health Services Inc. The rating outlook is stable. "At the same time, we assigned our 'B' issue-level rating and '3' recovery rating to the company's $75 million senior secured revolving credit facility due 2016 and the $285 million senior secured term loan due 2017," S&P said. Valitas acquired America Service Group (ASG) in a highly leveraged transaction for about $250 million (about $210 net of cash on ASG's balance sheet or about 7x 2010 EBITDA, including $2 million of expected synergies). Valitas is the largest private provider of health services to inmates at state prisons and county/municipality jails with a focus on prisons. ASG is slightly smaller, with a focus on providing health care services to jails. The combined company generated pro forma revenue of about $1.4 billion in 2010. The transaction was financed with a $285 million term loan and $100 million of mezzanine subordinated notes. The company used the proceeds from the financing, in addition to cash from the balance sheet, to finance the acquisition, refinance about $171 million of Valitas debt, and fund transaction fees and expenses," S&P related. "The speculative-grade ratings on Valitas reflect our expectations that, despite mid-single-digit revenue growth, debt leverage will remain high over the next few years, in part due to accrual of holding-company paid-in-kind (PIK) cumulative preferred units," said Standard & Poor's credit analyst Rivka Gertzulin. "Even though Valitas has a highly leveraged financial risk profile, we believe liquidity is adequate. The weak business risk profile reflects our opinion that the outsourced correctional facility health care market has limited growth potential, and risks include significant customer concentration, thin operating margins, and some integration risk." "The highly leveraged financial risk profile reflects our expectation for high adjusted debt leverage over the next year, since increasing adjusted debt from the PIK cumulative preferred stock (which we view as debt, consistent with our criteria) will most likely offset expected EBITDA growth from existing contracts. Consequently, pro forma adjusted debt leverage is likely to remain above 7x over the next several years and adjusted EBITDA interest coverage will remain below 2x. However, we recognize the qualitative benefits (financial flexibility, with no need to access the capital markets) PIK preferred stock provide to the company. Thus, while debt leverage will be substantial, liquidity will be adequate. In addition, we believe Valitas' debt to EBITDA could be in the 4.5x area by the end of 2011 from a bank covenant perspective," S&P added. VALLEJO, CA: Wins Court Approval of Reorganization Plan ------------------------------------------------------- A federal judge on Thursday approved a plan for the city of Vallejo, Calif., to emerge from its three-year-old bankruptcy. American Bankruptcy Institute reports that Vallejo is cutting interest payments to its bank and reducing benefits to retirees. Vallejo -- http://www.ci.vallejo.ca.us/-- is a city in Solano County, California in the United States. As of the 2000 census, the city had a total population of 116,760. It is located in the San Francisco Bay Area on the northern shore of San Pablo Bay. It was named for General Mariano Guadalupe Vallejo. Vallejo filed for protection under Chapter 9 of the U.S. Bankruptcy Code (Bankr. E.D. Calif. Case No. 08-26813) on May 23, 2008, after it was unable to persuade labor unions to accept salary concessions as the recession began cutting into local government tax collections nationwide. Marc A. Levinson, Esq., and Norman C. Hile, Esq., at Orrick, Herrington & Sutcliffe LLP in Sacramento, California, represent the City. The city estimated $500 million to $1 billion in assets and $100 million to $500 million in debts in its petition. According to Vallejo's comprehensive annual report for the year ended June 30, 2007, the city has $983 million in assets and $358 million in debts. WARNER MUSIC: Inks Various Financing Agreements ----------------------------------------------- Pursuant to that certain Agreement and Plan of Merger, dated as of May 6, 2011, by and among Warner Music Group Corp., Airplanes Music LLC, an affiliate of Access Industries, Inc., and Airplanes Merger Sub, Inc., on July 20, 2011, Merger Sub merged with and into the Company with the Company surviving as a wholly-owned subsidiary of Parent. Pursuant to the terms of the Merger Agreement, on the Closing Date, each outstanding share of common stock of the Company was cancelled and converted automatically into the right to receive $8.25 in cash, without interest and less applicable withholding taxes. Equity contributions totaling $1,066 million from Access Industries Holdings LLC, were used, among other things, to finance the aggregate Merger Consideration, to make payments in satisfaction of other equity-based interests in the Company under the Merger Agreement, to repay certain of the Company's existing indebtedness and to pay related transaction fees and expenses. On the Closing Date, the Company also entered into, but did not draw under, a new $60 million revolving credit facility. In connection with the Merger, the Company also refinanced certain of its existing consolidated indebtedness, including (i) the repurchase and redemption by Holdings of its approximately $258 million in fully accreted principal amount outstanding 9.5% Senior Discount Notes due 2014, and the satisfaction and discharge of the related indenture, and (ii) the repurchase and redemption by Warner Music Group of its $465 million in aggregate principal amount outstanding 7 3/8% Dollar-denominated Senior Subordinated Notes due 2014 and GBP100 million in aggregate principal amount of its outstanding 8 1/8% Sterling-denominated Senior Subordinated Notes due 2014, and the satisfaction and discharge of the related indenture, and payment of related tender offer or call premiums and accrued interest on the Existing Notes. Revolving Credit Facility In connection with the Merger, Warner Music Group entered into a credit agreement for a senior secured revolving credit facility with Credit Suisse AG, as administrative agent, and the other financial institutions and lenders. The Revolving Credit Facility provides for a revolving credit facility in the amount of up to $60 million and includes a letter of credit sub-facility. The final maturity of the Revolving Credit Facility will be five years from the Closing Date. Secured WMG Notes Indenture On the Closing Date, the Initial OpCo Issuer issued $150 million aggregate principal amount of the Secured WMG Notes pursuant to the Indenture, dated as of the Closing Date, between the Initial OpCo Issuer and Wells Fargo Bank, National Association as Trustee. Warner Music Group assumed all of the Initial OpCo Issuer's obligations under the terms of the Secured WMG Notes Indenture as a result of the OpCo Merger. Following the completion of the OpCo Merger on the Closing Date, Warner Music Group and certain of its domestic subsidiaries entered into a Supplemental Indenture, dated as of the Closing Date, with the Trustee, pursuant to which (i) Warner Music Group became a party to the Indenture and (ii) each Guarantor became a party to the Secured WMG Notes Indenture and provided an unconditional guarantee on a senior secured basis of the obligations of Warner Music Group under the Secured WMG Notes. Interest on the Secured WMG Notes is payable in cash. Interest on the Secured WMG Notes is payable on June 15 and December 15 of each year, commencing on Dec. 15, 2011. Supplemental Indenture to Existing Secured WMG Notes Indenture Warner Music Group entered into a supplemental indenture, dated as of the Closing Date, that supplements the Indenture, dated as of May 28, 2009, among Warner Music Group, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee pursuant to which Warner Music Group had previously issued $1,100 million of aggregate principal amount of its 9.50% Senior Secured Notes due 2014. Pursuant to the Existing Secured WMG Notes Supplemental Indenture, certain subsidiaries of Warner Music Group that had not previously been parties to the Existing Secured WMG Notes Indenture, agreed to become parties thereto and to unconditionally guarantee, on a senior secured basis, payment of the Existing Secured WMG Notes. Unsecured WMG Notes Indenture On the Closing Date, the Initial OpCo Issuer issued $765 million aggregate principal amount of the Unsecured WMG Notes pursuant to the Indenture, dated as of the Closing Date, between the Initial OpCo Issuer and Wells Fargo Bank, National Association as Trustee. Warner Music Group assumed all of Initial OpCo Issuer's obligations under the Unsecured WMG Notes Indenture as a result of the OpCo Merger. Following the completion of the OpCo Merger on the Closing Date, Warner Music Group and certain of its domestic subsidiaries entered into a Supplemental Indenture, dated as of the Closing Date, with the Trustee, pursuant to which (i) Warner Music Group became a party to the Indenture and (ii) each Guarantor became a party to the Unsecured WMG Notes Indenture and provided an unconditional guarantee of the obligations of Warner Music Group under the Unsecured WMG Notes. Interest on the Unsecured WMG Notes is payable in cash. Interest on the Unsecured WMG Notes is payable on April 1 and October 1 of each year, commencing on Oct. 1, 2011. Holdings Notes Registration Rights Agreement Immediately following the consummation of the Holdings Merger on the Closing Date, Holdings entered into a joinder agreement, dated as of the Closing Date, by and among Holdings and the Initial Purchasers, with respect to the Registration Rights Agreement, dated as of the Closing Date, by and among the Initial Holdings Issuer and the Initial Purchasers. Under the Holdings Notes Registration Rights Agreement, Holdings is obligated, under certain circumstances, to file and use commercially reasonable efforts to cause to become effective a registration statement with respect to an offer to exchange the Holdings Notes for notes publicly registered with the SEC with substantially identical terms as the Holdings Notes. The Holdings Notes Registration Rights Agreement provides that upon the occurrence of certain events, Holdings will file with the SEC, and use its commercially reasonable efforts to cause to become effective, a shelf registration statement relating to resales of the Holdings Notes and to keep effective such shelf registration statement for a specific period of time. Management Agreement Upon completion of the Merger, the Company and Holdings entered into a management agreement with Access, dated as of the Closing Date, pursuant to which Access will provide the Company and its subsidiaries, with financial, investment banking, management, advisory and other services. Pursuant to the Management Agreement, the Company, or one or more of its subsidiaries, will pay Access a specified annual fee, plus expenses, and a specified transaction fee for certain types of transactions completed by Holdings or one or more of its subsidiaries, plus expenses. Pursuant to the Management Agreement, Access received a transaction fee and reimbursement of expenses for financial, investment banking, management advisory and other services for the Company performed by Access prior to the closing of the Merger. The Company and Holdings agreed to indemnify Access and certain of its affiliates against all liabilities arising out of performance of the Management Agreement. Security Agreement Supplement On the Closing Date, certain subsidiaries of Warner Music Group that had not previously been parties to the Security Agreement, dated May 28, 2009, among Warner Music Group, Holdings, the subsidiary guarantors and Wells Fargo Bank, National Association, as collateral agent and notes authorized representative, entered into a Security Agreement Supplement, whereby those subsidiaries granted a security interest in substantially all of their assets to secure all obligations of Warner Music Group and the guarantors under the secured obligations referred to in the Security Agreement, including the Credit Agreement, the Secured WMG Notes and the Existing Secured Notes. Termination of a Material Agreement On July 20, 2011, each of Holdings and Warner Music Group accepted for purchase in connection with their previously announced tender offers and related consent solicitations in respect of the Existing Notes, such Existing Notes as had been tendered at or prior to 5:00 p.m., New York City time, on July 11, 2011. Each of Holdings and Warner Music Group then issued a notice of redemption relating to all Existing Notes not accepted for payment on the Early Acceptance Date. Following payment for the Existing Notes tendered at or prior to the Early Consent Time, each of Holdings and Warner Music Group deposited with Wells Fargo Bank, National Association, as trustee under (i) the Indenture, dated as of April 8, 2004, as amended, among Warner Music Group, the subsidiary guarantors party thereto and the Trustee, relating to the Existing Warner Music Group Notes and (ii) the Indenture, dated as of Dec. 23, 2004, among Holdings, the Company, as guarantor, and the Trustee, relating to the Existing Holdings Notes, funds sufficient to satisfy all obligations remaining under the Existing Indentures with respect to the Existing Notes not accepted for payment on the Early Acceptance Date. The Trustee then entered into a Satisfaction and Discharge of Indenture, each dated as of July 21, 2011, with respect to each Existing Indenture. Election of Directors Following the consummation of the Merger, each of these directors was elected to the Company's board of directors: * Stephen Cooper * Len Blavatnik * Lincoln Benet * Alex Blavatnik, * Jorg Mohaupt * Donald Wagner, * Lyor Cohen, * Cameron Strang In addition, the following people have been appointed to the Board of Directors of Holdings and Warner Music Group: * Stephen Cooper * Donald Wagner * Edgar Bronfman, Jr. The Amended and Restated Bylaws of the Company were amended and restated as contemplated by the Merger Agreement on the Closing Date. Following completion of the Merger on the Closing Date, the Second Amended and Restated Bylaws were further amended and restated with effect from the Closing Date. A full-text copy of the Form 8-K is available for free at: http://is.gd/2LGBWL 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: Announces Final Results of Notes Tender Offers ------------------------------------------------------------ WMG Acquisition Corp. and WMG Holdings Corp., both wholly-owned subsidiaries of Warner Music Group Corp., announced the expiration and final results of their previously announced cash tender offers to purchase the outstanding principal amount of each series of their respective notes. The Tender Offers expired at 12:00 A.M., New York City time, on July 26, 2011. The Tender Offers were made pursuant to the terms of an Offer to Purchase and Consent Solicitation Statement dated June 27, 2011, and the related Consent and Letter of Transmittal. These are the results of the Tender Offers: Outstanding Principal Amount Principal Tendered and Title of Security Amount Accepted for Purchase ----------------- ----------- --------------------- 7 3/8% Senior Subordinated Notes due 2014 $465,000,000 $414,514,000 8 1/8% Senior Subordinated Notes due 2014 GBP100,000,000 GBP88,948,000 9.5% Senior Discount Notes due 2014 $257,927,000 $235,422,000 The Tender Offers were made in connection with the Agreement and Plan of Merger, dated as of May 6, 2011, by and among Airplanes Music LLC, an affiliate of Access Industries, Inc., Airplanes Merger Sub, Inc., a wholly-owned subsidiary of Airplanes Music LLC, and Warner, pursuant to which Airplanes Merger Sub, Inc., merged with and into Warner on July 20, 2011, upon the terms and subject to the conditions set forth in the Merger Agreement. On July 20, 2011, each Company accepted for payment all Notes tendered at or prior 5:00 p.m., New York City time, on July 11, 2011. On July 20, 2011, each Company also issued a notice of redemption for all Notes not accepted for payment on the Initial Acceptance Date, and on July 21, 2011, Wells Fargo Bank, National Association, as Trustee, entered into a Satisfaction and Discharge of Indenture with respect to each indenture governing the Notes. Payment in respect of any Notes tendered and accepted for purchase following the Early Consent Time, but prior to the Expiration Time, is expected to be made promptly following the acceptance by the applicable Company of those Notes for purchase following the Expiration Time. Payment in respect of the redemption of any Notes not tendered prior to the Expiration Time is expected to be made on Aug. 19, 2011. The Companies engaged Credit Suisse Securities (USA) LLC and UBS Securities LLC as dealer managers for the Tender Offers. A full-text copy of the press release is available for free at: http://is.gd/RsdTmM 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: Bain Capital Does Not Own Common Shares ----------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Bain Capital Integral Investors, LLC, and its affiliates disclosed that they do not own any common shares 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. Pursuant to the terms of the Merger Agreement, each Share held by the Reporting Persons was cancelled and automatically converted into the right to receive $8.25 in cash. As a result, the Reporting Persons are no longer the beneficial owners of any Shares. A full-text copy of the regulatory filing is available for free at http://is.gd/UQbpqZ 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: Thomas Lee Does Not Own Common Shares --------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Thomas H. Lee Equity Fund V, L.P., and its affiliates disclosed that they do 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, the Reporting Persons are no longer the beneficial owner of any Shares. A full-text copy of the filing is available for free at: http://is.gd/fgWpQw 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: Creditors Object to Proposed Investors' Panel ---------------------------------------------------------------- Kaitlin Ugolik at Bankruptcy Law360 reports that unsecured creditors of Washington Mutual Inc. argued Thursday in Delaware bankruptcy court that a group of investors with interests in pending WaMu litigation shouldn't be granted official committee status in order for the bank to fund their adversary proceeding against its estates. According to Law360, the official committee of unsecured creditors objected to a motion from seven investors that the bankruptcy court appoint an official committee to represent the holders of shares in a Dime Bancorp Inc. lawsuit WaMu acquired when it purchased the company. 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. WATERSCAPE RESORT: Can Access Cash Collateral Until Aug. 18 ----------------------------------------------------------- On July 15, 2011, the U.S. Bankruptcy Court for the Southern District of New York entered its third agreed interim order authorizing Waterscape Resort LLC to use cash collateral of U.S. Bank National Association and USB Capital Resources, Inc., until the date of the next cash collateral hearing scheduled for Aug. 18, 2011, at 10:00 a.m. The Debtor owes U.S. Bank a total principal balance of $126,192,848.63, and USB Capital Resources a total principal balance of $8,045,557.04, as of the Petition Date. The use of cash collateral will be for the sole and exclusive purpose of paying the actual and necessary expenses incurred on or after the Petition Date in the ordinary course of the operation and maintenance of the the Debtor's high rise, mixed use condominium building known as Cassa Hotel and Residences located at 66-70 West 45th Street, in New York City (the "Asset"), pursuant to the Third Interim Budget. Written objections to the Debtor's further use of cash collateral will be filed no later than Aug. 12, 2011, at 5:00 p.m. The Lenders will have a continuing lien, title and security interest in post-petition rents, issues and profits to the extent provided by the mortgages and section 552(b) of the Bankruptcy Code, which lien and security interest will attach to all post-petition rents, issues and profits from the Asset. The Lenders will not, however, have a lien on actions and causes of action pursuant to Sections 544, 547, 548, 549 and 550 of the Bankruptcy Code, including claims against creditors for alleged fraudulent transfers under state law utilizing Section 544 of the Bankruptcy Code. The Lenders and their authorized representatives will be permitted reasonable access to the Asset, verification of rent rolls and monthly operating reports, and conducting any desired appraisals. A copy of the Third Agreed Interim Cash Collateral Order is available at: http://bankrupt.com/misc/waterscape.3rdagreedccorder.pdf About Waterscape Resort Waterscape Resort LLC, aka Cassa NY Hotel And Residences, is a Delaware limited liability company formed on or about Jan. 24, 2005. The principal office of the Debtor is at 15 West 34th Street, New York, New York 10001. On July 19, 2005, Waterscape acquired the property, consisting of the three contiguous buildings at 66, 68 and 70 West 45th Street in Manhattan, for the sum of $20 million to develop the property into a 45-storey condominium project including a luxury hotel, a restaurant and luxury residential apartments. The purchase was financed with a $17 million acquisition loan and mortgage from U.S. Bank Association. Construction of the hotel and residential units, given the name Cassa NY Hotel and Residences, commenced in July 2007. By the end of September 2010, the hotel and residential units were completed. The Debtor generates its revenue from guests who stay at the hotel and in the Debtor's residential condominium units, and from sales of unsold residential condominium units. The Debtor's hotel and rental business has produced gross revenues of approximately $17 million to $18 million on an annual basis, and by the end of September 2010, the Debtor had sold five residential apartment units for a total of approximately $12,710,340. The Debtor's Cassa NY Hotel and Residences features 165 hotel rooms, and above the hotel units, 57 residences. The Debtor's restaurant will occupy the first level below ground, but will be visible from the ground floor hotel lobby. The Debtor's restaurant is not yet open for business. The Debtor has for several months been embroiled in litigation with numerous contractors and subcontractors who have asserted alleged mechanics lien claims against the Property totaling approximately $20 million. As of the Petition Date, the Debtor had outstanding approximately $134.4 million of secured loan principal obligations under credit facilities with US Bank and USB Capital Resources, Inc. The debt is secured by liens upon all of the assets of the Debtor, including mortgages on the Debtor's real property, together with liens on all rents, proceeds and cash of the Debtor, pledges of member interests in Waterscape, and guarantees by Waterscape members and other third-party grantors. The Debtor's secured debt was incurred under three separate agreements for: (i) an acquisition and project loan; (ii) a construction loan; and (iii) a mezzanine loan; each of which was made in connection with the acquisition or development of the Debtor's property. Over the last several months, the Debtor engaged in extensive negotiations with the Secured Lenders regarding the parameters of a comprehensive restructuring. The Debtor also engaged in extensive marketing efforts and negotiations to sell its hotel assets to a non-insider buyer. The restructuring discussions between the Debtor and the Secured Lenders reached an impasse, and on March 21, 2011, UBS, the junior of the two Secured Lenders, filed a foreclosure action against the Debtor in the Supreme Court of the State of New York, County of New York. The Debtor then filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 11-11593) on April 5, 2011. Brett D. Goodman, Esq., and Lee William Stremba, Esq., at Troutman Sanders LLP represent the Debtor as Bankruptcy Counsel. Holland & Knight LLP serves as its special litigation counsel. The Debtor disclosed $214,285,027 in assets and $158,756,481 in liabilities as of the Chapter 11 filing. A 3-member Official Committee of Unsecured Creditors has been appointed in the Debtor's Chapter 11 case. As reported in the TCR on July 25, 2011, U.S. Bankruptcy Judge Stuart Bernstein confirmed Waterscape Resort LLC's reorganization plan on July 22, 2011, which calls for repaying much of the company's debt with proceeds from the $128 million sale of the hotel section of the development. The Plan was filed on May 6, 2011 WAXESS HOLDINGS: Now Known as AirTouch Communications ----------------------------------------------------- The holders of a majority of the outstanding shares of common stock of AirTouch Communications, Inc., formerly known as Waxess Holdings, Inc., acting by written consent, approved an amendment to the Company's amended and restated certificate of incorporation, to change the name of the Company from Waxess Holdings, Inc., to AirTouch Communications, Inc. The holders of 6,895,678 shares voted in favor of the amendment, out of an aggregate of 12,900,297 shares issued and outstanding, representing 53.5% of the issued and outstanding shares. On July 21, 2011, the Company filed an amendment to its amended and restated certificate of incorporation with the Secretary of State of Delaware, pursuant to which the Company's name changed from Waxess Holdings, Inc., to AirTouch Communications, Inc. About Waxess Holdings Waxess Holdings, Inc., is a technology firm, located in Newport Beach, Calif., that was incorporated in 2008 and develops and markets phone terminals capable of converging traditional landline, cellular and data services based on its patent portfolio. Waxess currently offers its DM1000 (cell@home) product through various channels, including several of the major US carriers, and is working to bring its higher performance, lower cost next generation DM1500 and MAT1000 products to the market. The Company's balance sheet at March 31, 2011, showed $2.0 million in total assets, $7.1 million in total liabilities, and stockholders' deficit of $5.1 million. As reported by the TCR on May 30, 2011, Jonathon P. Reuben, C.P.A. Accountancy Corporation, in Torrance, California, expressed substantial doubt about Waxess Holdings' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has incurred net losses since inception, and as of Dec. 31, 2010, had an accumulated deficit of $192,863. WINDHAM CRYSTAL: Case Summary & 14 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Windham Crystal Pond LLC 444 Route 111 Smithtown, NY 11787 Bankruptcy Case No.: 11-75413 Chapter 11 Petition Date: July 29, 2011 Court: U.S. Bankruptcy Court Eastern District of New York (Central Islip) Judge: Robert E. Grossman Debtor's Counsel: Kevin J. Nash, Esq. GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP 1501 Broadway, 22nd Floor New York, NY 10036 Tel: (212) 301-6944 Fax: (212) 422-6836 E-mail: KNash@gwfglaw.com Scheduled Assets: $4,700,328 Scheduled Debts: $6,678,733 The petition was signed by Charles P. Ferraro, co-managing member. Debtor's List of 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ski Home LLC -- $35,600 444 Route 111 Smithtown, NY 11787 TD Bank, N.A. -- $9,283 153 Merrimack Street Haverhill, MA 01831-2314 Crystal Pond Homeowners Assoc. -- $9,000 274 County Route 65, Suite 1000 Hensonville, NY 12439 NYSEG -- $8,842 Crystal Pond Sewage - Works -- $3,495 Silverman Acampora LLC -- $3,184 Alacqua & Baierlein, LLP -- $3,000 Nicolock Paving Stones of New -- $2,966 England Clear Channel Outdoors, Inc. -- $2,697 Ski Windham Operating Corp. -- $2,121 George E. Patsis, Esq. -- $1,400 RBM Guardian Fire Protection, Inc. -- $747 NYS Dept. of Taxation & Finance -- $210 Paraco Gas -- $21 YELLOWSTONE CLUB: Founder Starts Campaign to Cancel $40MM Judgment ------------------------------------------------------------------ The Associated Press reports that two years after Montana's ultra- exclusive Yellowstone Club was sold to new owners through a bankruptcy court, resort founder Tim Blixseth is waging an aggressive legal campaign to unravel the sale in hopes of canceling out a $40 million fraud judgment against him. But first the jet-setting real estate mogul has to make it past U.S. Bankruptcy Judge Ralph Kirscher. The Butte judge has consistently ruled against Mr. Blixseth, blaming him for much of the ski and golf resort's financial troubles, according to the report. Already Judge Kirscher has shot down one of Mr. Blixseth's main arguments in the case -- that the club's original bankruptcy filing in 2008 was made in bad faith as part of a plot by his ex- wife, Edra, to take over the club and sell it for cheap to alleged co-conspirator Sam Byrne, a Boston real estate investor, AP says. The AP relates that Mr. Blixseth's attorneys argue that because the club's 2009 sale was tainted, Judge Kirscher's subsequent civil fraud judgment against Mr. Blixseth should be wiped out because it never would have happened without the sale. Attorneys for his adversaries contend Mr. Blixseth's bid is a long shot and that the judgment against him will stand. A ruling on his outstanding claims is pending after two days of hearings in Missoula last week attended by an estimated three dozen lawyers representing Mr. Blixseth, the club, its lenders and creditors. About Yellowstone Club Located near Big Sky, Montana, Yellowstone Club -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. The Company was founded in 1999. Yellowstone Mountain Club LLC and its affiliates filed for Chapter 11 on Nov. 10, 2008 (Bankr. D. Mont. Case No. 08-61570). The Company's owner affiliate Edra D. Blixseth, filed for Chapter 11 on March 27, 2009 (Bankr. D. Mont. Case No. 09-60452). In June 2009, the Bankruptcy Court entered an order confirming Yellowstone's Chapter 11 Plan. Pursuant to the Plan, CrossHarbor Capital Partners, LLC, acquired equity ownership in the reorganized club for $115 million. Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green PLLC, represented the Debtors. The Debtors hired FTI Consulting Inc. and Ronald Greenspan as CRO. The official committee of unsecured creditors were represented by Parsons, Behle and Latimer, as counsel, and James H. Cossitt, Esq., at local counsel. Credit Suisse, the prepetition first lien lender, was represented by Skadden, Arps, Slate, Meagher & Flom. The Court entered an order confirming The Yellowstone Club's Chapter 11 Plan of Reorganization in June 2009. YRC WORLDWIDE: Moody's Revises PDR to Caa2\LD --------------------------------------------- Moody's Investors Service revised YRC Worldwide Inc.'s Probability of Default Rating ("PDR") to Caa2\LD ("Limited Default") from Caa3 in recognition of the agreed debt restructuring which will result in losses for certain existing debt holders. In a related action Moody's has raised YRCW's Corporate Family Rating to Caa3 from Ca to reflect modest but critical improvements in the company's credit profile that should result from its recently-completed financial restructuring. Moody's will remove the PDR's LD modifier after three business days. In addition, Moody's has assigned to YRCW a Speculative Grade Liquidity Rating of SGL-3. The ratings outlook is stable. Upgrades: Issuer: YRC Worldwide Inc. -- Probability of Default Rating, Upgraded to Caa2/LD from Caa3 -- Corporate Family Rating, Upgraded to Caa3 from Ca Assignments: Issuer: YRC Worldwide Inc. -- Speculative Grade Liquidity Rating, Assigned SGL-3 Outlook Actions: Issuer: YRC Worldwide Inc. -- Outlook, Changed To Stable From Negative RATINGS RATIONALE The positioning of YRCW's PDR at Caa2\LD reflects the completion of an offer to exchange a substantial majority of the company's outstanding credit facility debt for new senior secured credit facilities, convertible unsecured notes, and preferred equity, which was completed on July 22, 2011. This offer, in which lenders under the prior credit facilities receive consideration that is significantly inferior to a full repayment of the obligations at par, was conducted as part of a broader financial restructuring program designed to establish a sustainable capital structure going forward. As such Moody's views this transaction as a distressed exchange. For further details on this topic, please see Moody's Rating Methodology "Moody's Approach to Distressed Exchanges," published March 2009. Moody's raised YRCW's PDR to Caa2 in recognition of critical relief on its long-term debt service requirements and operating costs that the company was able to achieve through its recently- completed restructuring efforts. These transactions provided the company with important concessions on labor costs -- pension contributions in particular, as well as lower cash interest expense than YRCW would otherwise encounter without the restructuring. This, along with the recent trend toward volume and yield improvement in the less-than-truckload ('LTL') segment of the industry, suggests the potential that the company can meet near term debt service requirements through cash generated by operations, and supplemented by additional asset sales and additional borrowings under its ABL facility. However, as the refinancing involves an increase in overall debt, the company's leverage remains elevated, and pro forma credit metrics are correspondingly weak. Moody's estimates pro forma leverage (Debt to EBITDA) of over 10 times, and EBIT coverage of interest well under one time. Moody's expects these metrics to improve through 2012, anticipating a modest improvement in profitability over this period. However, Moody's does not expect metrics to improve to levels commensurate with companies rated higher than Caa2 over the near term. In addition, the ratings are constrained by risks in the company's liquidity profile. YRCW's Speculative Grade Liquidity of SGL-3 reflects Moody's assessment of that YRCW's liquidity condition as adequate relative to its near term operating plan, although not robust for a company of this size. The company has approximately $150 million in cash on hand on close of the restructuring transactions. With free cash flow that is expected to be negative as much-needed increases in capital spending are pursued over the next few years, Moody's believes that there is risk that the company's cash reserves and availability under its ABL facility may be diminished, particularly if YRCW cannot achieve margin improvements and revenue growth as planned. The Caa3 corporate family rating is one notch below YRCW's PDR, reflecting Moody's assessment that debt holders would experience substantial loss in the event of a future default. Although funded debt has been materially reduced through past debt exchanges, YRCW still has substantial debt and pension liabilities that are considered in recovery analysis per Moody's Loss Given Default (`LGD') methodology. Pension liabilities alone (both multi- employer pension plan as well as company-sponsored plan) represent almost one-half of the liabilities considered in YRCW's LGD waterfall. Because of the sizeable liability implied by these plans, Moody's uses a 35% family recovery assumption in the application of LGD methodology towards YRCW's ratings. The stable ratings outlook reflects Moody's belief that the company will be able to generate modest, but positive operating income through 2012, which will result in the generation of operating cash flow that will cover a substantial portion of YRCW's planned capital spending. Any cash shortfalls over the near term are expected to be covered through asset sales and modest increases in ABL borrowings. Ratings could be lowered if the company is not able to restore operating margins to at least 2% or grow sales by at least 5% over the near term, possibly resulting in a tightening in liquidity due to a reduction in cash reserves, or increasing borrowings under the ABL facility. A downgrade could also occur if liquidity is further stressed by the potential for breach of financial covenants prescribed under the company's term loan facility, which tighten in 2012, or if the borrowing base availability were to diminish due to lack of growth in the company's overall revenue base. YRCW's ratings or their outlook could be raised if the company were to improve operating margins to such levels that the company can generate sustainably positive free cash flow, while undertaking a capital spending program in excess of 5% of revenue, and improving its liquidity condition by increasing cash reserves as well as availability under its ABL facility. Debt to EBITDA of less than 6.5 times and EBIT to Interest coverage approaching one time could indicate higher rating consideration. The principal methodology used in this rating was Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. YRC Worldwide Inc. is a less-than-truckload ('LTL') trucking company headquartered in Overland Park, Kansas. * Up to 10 Chicken Firms Face Potential Bankruptcy Filing --------------------------------------------------------- Feedstuffs reports that sources said another eight to 10 chicken companies are struggling with potential bankruptcy and that half may need to seek protection before the end of calendar 2011. According to Feedstuffs, sources said production that does go into bankruptcy likely will be bought by foreign parties or will be outright relocated to chicken companies in Mexico and South America. Feedstuffs says this comes after the U.S. chicken industry embarked on an ill-advised production strategy last summer to increase output and use chicken production efficiencies and volumes to seize market share from other chicken companies and from beef and pork producers. However, the strategy was based on corn costs in the $4-5/bu. range, not $7-plus as corn is now priced, and on consumers shifting to chicken as an inexpensive option to beef and pork, which has not happened, according to Feedstuffs. Consequently, says Feedstuffs, companies are dealing with burdensome chicken supplies that cannot be priced high enough to cover costs. Feedstuffs notes that Pilgrim's Pride Corp., the second-largest chicken company in the U.S., which just came off its own bankruptcy 18 months ago, already has lost $250 million this year and said last week it plans to close a processing plant in Dallas, Texas. Townsends Inc. filed for bankruptcy liquidation last year and chicken integrator Allen Family Foods Inc. filed for bankruptcy liquidation in June. Both companies said they were losing too much money due to the situation surrounding costs, supplies and weak prices, Feedstuffs reports. * Fitch Says Free Cash Flow Efficiency Declining for FBT Issuers ---------------------------------------------------------------- Fitch Ratings expects free cash flow (FCF) efficiency to decline for more than 30% among a sample group of issuers in the food, beverage, tobacco (FBT) and consumer products sectors in 2011 as commodity cost increases diminish margins and increase working capital usage. In a report published on July 28, 2011, Fitch analyzed the FCF from 2006-2010 for 41 companies in the FBT and consumer products sectors (except restaurants). The report provides a top-10 list for leaders and laggards in FCF efficiency. There are some surprises among the leaders and very little among the laggards. The top two leading issuers converting more than 100% of net income to free cash flow on average over five years are Church & Dwight and Dean Foods Company (rated 'B'; Stable Outlook by Fitch). Companies with a high degree of exposure to agricultural commodities or undergoing structural changes or financial stress comprise the laggard group. Currently, the companies most likely to improve over the next several years are those who have finished their restructuring programs such as Revlon, Inc. and Constellation Brands, Inc. (rated 'BB'; Positive Outlook). Leaders in Fitch's group of rated companies tended to have net margins of 8% or more and FCF efficiency metric in the 75%-plus range. Consistently low metrics are more likely to result in negative rating actions. Several key interrelated items drive FCF efficiency: profitability, working capital management, and the wildcards of taxes and the commodity cycle. Foreign exchange and fixed-asset intensity (capital expenditures/sales) also play a role, but tend to be specific to certain issuers. Also important is the degree of management's focus on cash flow. Fitch notes that the wave of commodity cost increases experienced through mid-2008 has returned, with a sharp spike in input inflation across agricultural, energy and industrial companies. 'The direction of commodity prices is the key wildcard influencing cash flow efficiency and its direction for individual issuers,' said Grace Barnett, Director, Fitch Ratings. 'Fitch expects free cash flow efficiency to decline for 13 companies in 2011. Higher commodity costs are driving the decline for 11 of the 13.' * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- A&W REV ROYAL-UT AWRRF US 179.2 (147.6) 3.6 A&W REV ROYAL-UT AW-U CN 179.2 (147.6) 3.6 ABSOLUTE SOFTWRE ABT CN 116.3 (12.0) (12.6) ACCO BRANDS CORP ABD US 1,094.2 (77.0) 293.1 ALASKA COMM SYS ALSK US 609.8 (27.4) 6.3 AMER AXLE & MFG AXL US 2,167.8 (415.4) 60.4 AMR CORP AMR US 25,787.0 (4,509.0) (1,769.0) ANOORAQ RESOURCE ARQ SJ 1,024.0 (77.0) 20.9 AUTOZONE INC AZO US 5,884.9 (1,119.5) (655.3) BLUEKNIGHT ENERG BKEP US 323.5 (35.1) (85.8) BOSTON PIZZA R-U BPF-U CN 148.2 (100.1) 1.3 CABLEVISION SY-A CVC US 8,962.9 (6,462.4) (309.5) CADIZ INC CDZI US 46.7 (2.1) 2.1 CANADIAN SATEL-A XSR CN 174.4 (29.8) (55.9) CC MEDIA-A CCMO US 16,938.6 (7,280.4) 1,644.2 CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) CENVEO INC CVO US 1,439.5 (333.5) 208.1 CHENIERE ENERGY CQP US 1,776.3 (547.6) 24.4 CHENIERE ENERGY LNG US 2,564.4 (509.7) 87.4 CHOICE HOTELS CHH US 412.4 (49.0) (1.9) CINCINNATI BELL CBB US 2,636.2 (650.4) 6.4 CLOROX CO CLX US 4,051.0 (82.0) (28.0) COLUMBIA LABORAT CBRX US 27.8 (2.6) 11.5 DENNY'S CORP DENN US 296.8 (102.3) (36.9) DIRECTV-A DTV US 20,593.0 (678.0) 2,813.0 DISH NETWORK-A DISH US 10,280.6 (502.5) 705.1 DISH NETWORK-A EOT GR 10,280.6 (502.5) 705.1 DOMINO'S PIZZA DPZ US 487.4 (1,167.7) 167.9 DUN & BRADSTREET DNB US 1,825.5 (615.8) (321.8) EPICEPT CORP EPCT SS 12.4 (6.0) 6.0 EXELIXIS INC EXEL US 495.7 (68.7) 126.1 FRANCESCAS HOLDI FRAN US 59.1 (55.5) 13.2 FREESCALE SEMICO FSL US 4,583.0 (4,401.0) 1,329.0 GENCORP INC GY US 987.3 (161.1) 94.3 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GRAHAM PACKAGING GRM US 2,943.5 (501.5) 313.1 HANDY & HARMAN L HNH US 372.2 (23.9) 13.2 HCA HOLDINGS INC HCA US 23,877.0 (7,534.0) 2,613.0 HUGHES TELEMATIC HUTC US 108.8 (62.4) (16.0) IDENIX PHARM IDIX US 54.9 (40.6) 19.6 INCYTE CORP INCY US 459.6 (104.0) 315.8 IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 131.7 (161.7) 6.6 JUST ENERGY GROU JE CN 1,588.6 (219.4) (303.2) KNOLOGY INC KNOL US 823.7 (4.0) 42.7 LIN TV CORP-CL A TVL US 797.4 (127.9) 38.6 LIZ CLAIBORNE LIZ US 1,255.8 (124.5) (26.5) LORILLARD INC LO US 2,498.0 (831.0) 904.0 MAINSTREET EQUIT MEQ CN 475.2 (10.5) - MANNKIND CORP MNKD US 254.8 (203.5) 26.2 MEAD JOHNSON MJN US 2,465.4 (250.4) 572.3 MERITOR INC MTOR US 2,675.0 (1,006.0) 205.0 MOODY'S CORP MCO US 2,524.4 (223.2) 498.6 MORGANS HOTEL GR MHGC US 692.8 (29.2) 205.1 MPG OFFICE TRUST MPG US 2,725.0 (1,082.2) - NATIONAL CINEMED NCMI US 796.4 (327.0) 74.0 NAVISTAR INTL NAV US 9,966.0 (764.0) 1,819.0 NEXSTAR BROADC-A NXST US 582.6 (181.2) 40.0 NPS PHARM INC NPSP US 158.3 (159.7) 117.8 NYMOX PHARMACEUT NYMX US 10.0 (3.3) 6.8 ODYSSEY MARINE OMEX US 25.7 (8.1) (14.0) OTELCO INC-IDS OTT US 319.2 (7.6) 22.4 OTELCO INC-IDS OTT-U CN 319.2 (7.6) 22.4 PALM INC PALM US 1,007.2 (6.2) 141.7 PDL BIOPHARMA IN PDLI US 248.7 (371.2) (161.6) PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PRIMEDIA INC PRM US 208.0 (91.7) 3.6 PROTECTION ONE PONE US 562.9 (61.8) (7.6) PURE INDUSTRIAL AAR-U CN 277.1 (8.6) - QUALITY DISTRIBU QLTY US 281.4 (124.4) 40.9 QUANTUM CORP QTM US 431.0 (61.1) 97.9 QWEST COMMUNICAT Q US 16,849.0 (1,560.0) (2,828.0) RAPTOR PHARMACEU RPTP US 20.5 (14.6) (21.4) REGAL ENTERTAI-A RGC US 2,323.2 (541.6) (114.5) RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) REVLON INC-A REV US 1,105.5 (686.5) 132.7 RSC HOLDINGS INC RRR US 2,949.6 (59.2) (205.0) RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SALLY BEAUTY HOL SBH US 1,707.0 (340.6) 418.5 SINCLAIR BROAD-A SBGI US 1,571.2 (144.6) 60.4 SINCLAIR BROAD-A SBTA GR 1,571.2 (144.6) 60.4 SKULLCANDY INC SKUL US 80.4 (17.7) 38.7 SMART TECHNOL-A SMT US 546.2 (43.3) 173.7 SMART TECHNOL-A SMA CN 546.2 (43.3) 173.7 SPIRIT AIRLINES SAVE US 545.2 (97.0) 27.6 SUN COMMUNITIES SUI US 1,160.1 (111.7) - SWIFT TRANSPORTA SWFT US 2,555.7 (9.8) 204.6 TAUBMAN CENTERS TCO US 2,495.4 (426.8) - TEAM HEALTH HOLD TMH US 832.2 (25.7) 44.8 THERAVANCE THRX US 315.1 (27.8) 266.9 TOWN SPORTS INTE CLUB US 460.0 (4.7) (15.4) UNISYS CORP UIS US 2,949.3 (692.1) 547.6 VANGUARD HEALTH VHS US 4,162.2 (186.6) 356.5 VECTOR GROUP LTD VGR US 924.6 (61.4) 294.8 VENOCO INC VQ US 815.6 (21.6) 8.1 VERISK ANALYTI-A VRSK US 1,286.4 (109.1) (180.8) VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) VONAGE HOLDINGS VG US 251.7 (102.0) (39.2) WARNER MUSIC GRO WMG US 3,617.0 (254.0) (650.0) WEIGHT WATCHERS WTW US 1,126.0 (636.6) (345.4) WESTMORELAND COA WLB US 788.0 (173.9) (1.0) WORLD COLOR PRES WC CN 2,641.5 (1,735.9) 479.2 WORLD COLOR PRES WCPSF US 2,641.5 (1,735.9) 479.2 WORLD COLOR PRES WC/U CN 2,641.5 (1,735.9) 479.2 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise Marie Varquez, 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 ***