/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110914.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, September 14, 2011, Vol. 15, No. 255 Headlines 155 EAST TROPICANA: Hooters Reorganization Hit by Canpartners ALAMABA AIRCRAFT: Seeks Plan Exclusivity Until Dec. 12 ANDRONICO'S MARKETS: Renwood-Led Auction for Assets on Oct. 13 ANDRONICO'S MARKETS: Can Access $5-Mil. Loan from Buyer APTHORP: Owners of Landmark Property Balk at Sale of Mortgage ARCHBROOK LAGUNA: Court OKs Macquarie Capital as Financial Advisor ARCTIC GLACIER: CPP Board & West Face Refuse to Extend Waiver BARZEL INDUSTRIES: Wins Plan Approval as No Objections Filed BEAZER HOMES: Moody's Cuts Corporate to 'Caa2'; Outlook Stable BEAZER HOMES: Fitch Cuts Issuer Default Rating to 'CCC' BERNARD L. MADOFF: Customers Claim Page-Limit Compliance BLACK CROW: Paul Stone Gets Control in Exchange for $20 Mil. BORDERS GROUP: Wins OK to Assign 14 Leases to Books-A-Million BORDERS GROUP: Wins Nod to Make $1.75-Mil. Severance Payments BORDERS GROUP: Glen Tomaszewski Out as VP, CAO BORDERS GROUP: Next Jump Drops Bordersperks But Has Counterclaims BUTTERMILK TOWNE: Proposes Oct. 17 Auction for All Assets BUTTERMILK TOWNE: Can Access BofA Cash Collateral Until Nov. 12 CAFE U&I: Files for Chapter 7 Bankruptcy CARGO TRANSPORTATION: Trustee Drops Bid to Dismiss Chapter 11 Case CHARLESTON ASSOCIATES: Can Access BofA Cash Until Oct. 31 CIMA LLC: Schedules and Statement Due Tomorrow CIMA LLC: Creditors Have Until Dec. 22 to File Proofs of Claim CLAUDIO OSORIO: Starting Bid for Mansion at $10.5 Million CUMULUS MEDIA: Election Form Submission Deadline Moved to Sep. 15 DEB SHOPS: Files Schedules of Assets and Liabilities DESERT OASIS: Could Exit Bankruptcy by Year End DILLARDS INC: Moody's Upgrades Corporate Family Rating to 'B1' DYNEGY INC: Announces Tender Offer & Consent Solicitation Results ELCOTEQ INC: Summoned to Answer Bankruptcy Allegations ENER1 INC: Glancy Binkow Files Securities Class Suit ENER1 INC: Charles Johnson Files Securities Class Action ENER1 INC: Lieff Cabraser Investigates Potential Illegal Conduct ENER1 INC: Pomerantz Law Leads Securities Class Action Suit EXTENDED STAY: Trust Sues Blackstone for $8-Bil. Over Buyout EXTENDED STAY: Claims Objection Deadline Extended Until 2012 EXTENDED STAY: Litigation Trust Submits Report for 4th Quarter FAITH CHRISTIAN: Can Employ Counts Real Estate Group as Realtor FALLS AT TOWNE: Court Dismisses Geneva Multi-Family Case FANNIE MAE: Regulator Considering Obama's Mortgage Plan FGIC CORP: Has Three Superior Proposals for Ch. 11 Plan FONTAINEABLEAU: Ch. 7 Trustee Proposes to Settle Avoidance Actions FONTAINEABLEAU: J. Soffer Wants Protective Order From 2004 Notices FONTAINEABLEAU: J. Soffer Wants Insurers to Pay Defense Costs FREDDIE MAC: Regulator Considering Obama's Mortgage Plan FREESCALE SEMICONDUCTOR: Moody's Lifts Corporate to 'B2' GATEWAY METRO: Pasadena Building Owner Files for Chapter 11 GELT PROPERTIES: Organizational Meeting to Form Panel on Sept. 14 GLOBAL PROPOSAL: Files for Chapter 7 Bankruptcy Protection GRAHAM PACKAGING: Fitch Withdraws CCC Ratings on 2 Note Classes GREAT ATLANTIC: Wants Mediation for Billions in PI Claims GREAT ATLANTIC: Seeks to Expand PricewaterhouseCoopers Hiring GSC GROUP: Objections to Plan Disclosures Due Sept. 26 GYMBOREE CORPORATION: Moody's Affirms 'B2' Corporate Family Rating HARRY & DAVID: Court Enters Plan Confirmation Order HAWAII MEDICAL: Objects to Committee's Bid to Dismiss Ch. 11 Cases HD SUPPLY: Completes Sale of Plumbing/HVAC Business to Hajoca HEALTHSPRING INC: Moody's Affirms 'Ba3' Senior Secured Rating INNER CITY: Reaches Deal on Pre-Negotiated Financial Restructuring JCE DELAWARE: Amends Cash Collateral Use Pact with First State JEFFERSON COUNTY: Commissioners to Meet Sept. 16 on Bankruptcy KB HOME: Fitch Downgrades Issuer Default Rating to 'B+' KOREA TECHNOLOGY: Files Schedules of Assets and Liabilities LA VILLITA: Can Use Cash Collateral Until Sept. 30 LEHMAN BROTHERS: Turnberry Wants Lift Stay to Pursue Nevada Case LEHMAN BROTHERS: LCPI Proposes Deal With SunCal Trustee LEHMAN BROTHERS: Committee Proposes to Prosecute LCPI Lawsuits LEHMAN BROTHERS: Citi Seeks Dismissal of Most of $1.3-Bil. Suit LEHMAN BROTHERS: Taps Hardinger as Counsel for JPM Litigation LEHMAN BROTHERS: Court OKs Votes Tabulation Services from Epiq LENOX 126: Files Chap. 11 Plan & Disclosure Statement LYDIAN SF: Sec. 341 Creditors' Meeting Set for Oct. 3 LYDIAN SF: Status Conference Set for Oct. 13 MADISON 92ND: Owner Fights Dismissal, Trustee Request MARCO POLO: Lenders Call DIP Loan "Unfair Insider Transaction" MARY A II: Files Proposed Reorganization Plan MARY A II: Lender Seeks Dismissal of Chapter 11 Case MARY A II: Sec. 341 Creditors Meeting Set for Oct. 5 MARY A II: Taps Berger Singerman as Chapter 11 Counsel MERIT GROUP: Now TMG Liquidation Following Sale MERIT GROUP: Creditors Have until Oct. 6 to File Proofs of Claim MERIT GROUP: Committee to Be Co-Proponent, Has More Work for Atty. MP-TECH AMERICA: JH Industry OK'd to Buy Substantially All Assets MT. ZION: Hearing on PNC Bank's Cash Access Set for Sept. 15 NAVISTAR INTERNATIONAL: Wellington Discloses 10% Equity Stake NEW ENGLAND REALTY: Gets Notice of Noncompliance From NYSE Amex NEW JERSEY DEVILS: Denies NY Post Report on Bankruptcy NEWPAGE CORP: Wisconsin Rapids City Members to Meet Debtor OMEGA NAVIGATION: Court OKs Jefferies & Co as Investment Banker OMEGA NAVIGATION: Committee Hires Jager Smith as Counsel PARAMOUNT LIMITED: Chapter 11 Reorganization Case Dismissed PASTELERIA LORENA: Files for Chapter 7 Bankruptcy Protection PAUL BRENNEKE: Case Management Conference Scheduled for Sept. 20 PAUL BRENNEKE: U.S. Trustee Unable to Appoint Creditors Committee PAUL BRENNEKE: Files Schedules of Assets and Liabilities PEGASUS RURAL: Sept. 27 Hearing for Trustee/Dismissal PERKINS & MARIE: Wins Approval of Disclosure Statement PHILADELPHIA ORCHESTRA: Court Approves Adequate Protection to FDS POINT BLANK: Asks for Approval of Forbearance Agreement POINT BLANK: Time to Decide on Industrial Lease Moved to Sept. 1 PPI HOLDINGS: Disclosures Approved, Plan Objections Due Sept. 19 QIMONDA RICHMOND: "Plan is Acceptable," DIP Lenders Say RIGHTHAVEN LLC: May Opt for Asset Sale or Bankruptcy ROTHSTEIN ROSENFELDT: Big Investor Sued for Return of Millions ROUND TABLE: Cash Use Order Amended to Allow Cure Amount Payments RYLAND GROUP: Fitch Downgrades Issuer Default Rating to 'BB-' SBARRO INC: Court Approves $18.6-Mil. Exit Financing SCHOMAC GROUP: U.S. Trustee Unable to Form Committee SEAVIEW PLACE: Can Hire Bernard Egan as Accountant SEAVIEW PLACE: Plan Evidentiary Hearing Set for Oct. 17 SEDONA DEVELOPMENT: Settles Disputes With Williams Scotsman SHAMROCK-SHAMROCK: Taps S. Ponder for Landlord-Tenant Issues SHENGDATECH INC: Court Enjoins Chen From Taking Over SHENGDATECH INC: Gets Final Approval to Employ Alvarez & Marsal SHINGLE SPRINGS: Moody's Keeps 'Caa2' Corporate Family Rating SIGNATUE STYLES: Wants Until Dec. 31 to Decide on Leases SOLYNDRA LLC: Seeks to Reject Lease for Fremont, Calif. Building SOLYNDRA LLC: Faces 2 Class Suits Over WARN Act Violations SOUTH EDGE: Judge Approves Plan's Disclosure Statement SOUTH OF THE STADIUM: Can Hire Richard W. Ward as Bankr. Counsel SPECTRAWATT INC: To Auction Off Hudson Valley Facility Sept. 28 SPRING POINTE: Sec. 341(a) Creditors' Meeting Set for Oct. 6 STELLAR GT: Court OKs Nov. 2 Auction of Substantially All Assets SUGARLEAF TIMBER: Files Chapter 11 Reorganization Plan TCI LUNA: Hiring Eric A. Liepins as Bankruptcy Counsel TCI LUNA: Sec. 341 Creditors' Meeting Set for Sept. 28 TERRESTAR CORP: Court to Consider Plan Outline on Sept. 19 TERRESTAR CORP: Shareholder Questions Akin Gump's Objectivity THORNBURG MORTGAGE: Judge Approves $94 Million Barclays Suit TONY PACKO'S: Deposition in Receivership Case Uncertain TRANSWEST RESORT: Can Use Cash Collateral Until Dec. 1 USG CORP: Fitch Downgrades Issuer Default Rating to 'B-' VITAMINSPICE INC: Hearing on Involuntary's Dismissal Today WACO HOLDINGS: Scaffolding Installer Files for Ch. 11 to Sell Biz WASHINGTON MUTUAL: Fights Investors Over $337MM in Asset Claims WESTERN COMMUNICATIONS: Seeks to Access BofA's Cash Collateral WESTERN COMMUNICATIONS: Wants Until Sept. 20 to File Schedules WESTERN COMMUNICATIONS: Sec. 341 Creditors Meeting on Sept. 30 WESTERN COMMUNICATIONS: Taps Tonkon Torp as Ch. 11 Counsel WOLF MOUNTAIN: Needs Access to $500,000 DIP Financing WOLF MOUNTAIN: To Decide on Osguthorpe Lease Until Plan Approval WOLF MOUNTAIN: Court Denies ASC Utah's Motion to Dismiss Case WOLF MOUNTAIN: Wants Plan Filing Exclusivity Until Jan. 3 XTL BIOPHARMACEUTICALS: Posts $280,000 Net Loss in 2nd Quarter YESTERDAY'S VILLAGE: UB Properties Acquires Asset for $3.6 Million * Student Loan Defaults Rise to 8.8% in Fiscal 2009 * Years of Borrowing Have Pennsylvania Capital Dodging Default * Debevoise Welcomes Bankruptcy Pro Labovitz From Kirkland * Kenneth Freda Joins ESBA in New York as Managing Director * Upcoming Meetings, Conferences and Seminars ********* 155 EAST TROPICANA: Hooters Reorganization Hit by Canpartners ------------------------------------------------------------- Vegas Inc. reports that the Hooters casino resort in Las Vegas is disputing charges by its main creditor that the creditor's foreclosure of the bankrupt property is inevitable. Hooters also portrayed creditor Canpartners as an opportunistic investor in distressed debt hoping to profit from the Hooters casino's misfortunes tied to the global recession, according to the report, citing court filings. After the bankruptcy, Canpartners, a unit of Los Angeles investment company Canyon Capital Realty Advisors, said the Hooters casino brand had failed in Las Vegas and reorganization efforts are aimed at the unrealistic goal of finding a white knight to bail out Hooters' investors and to keep existing management in place. The report says Canpartners also objected to plans by Hooters to hire professionals to seek new funding or a buyer for the company, charging this was a waste of Canpartners' cash collateral held by Hooters as the property is so deeply underwater it has no chance of successfully reorganizing. The report adds Canpartners says the property is worth just $70 million but is encumbered by debt with a face value of more than $180 million. The report notes Hooters disputed assertions it's a foregone conclusion it can't successfully reorganize. "Canpartners is stating that it will never agree to any proposal, and therefore, the court should end this proceeding. If one takes this to its logical conclusion, then in every Chapter 11 case, a secured creditor has a veto over the Chapter 11 case. Canpartners knows that this is not the way it works; that it is not a Roman emperor who can decide life and death for others simply by a thumbs up or down," said Hooters' filing by its attorneys with the Las Vegas law firm Gordon Silver. The report relates that Hooters disputed Canpartners' charges it had unnecessarily inflated executives' salaries, saying its CEO and president, Neil Kiefer and Mike Hessling, respectively, haven't received salary increases during their five years with the company. Bankruptcy Judge Bruce Markell in Las Vegas plans hearings in November on whether Hooters can continue to use Canpartners' cash collateral as Hooters tries to reorganize. About 155 East Tropicana 155 East Tropicana owns the world's first Hooters Casino Hotel, a 696-room and 4-suite hotel located one block from the Las Vegas Strip and across Tropicana Blvd. from MGM Grand. 155 East Tropicana, LLC, along with an affiliate, sought Chapter 11 protection (Bankr. D. Nev. Case No. 11-22216) on Aug. 1, 2011. 155 East sought bankruptcy protection to stop a scheduled foreclosure of the second-lien debt. The two secured credit facilities were accelerated early 2011. Canpartners Realty Holding Co. IV LLC acquired 98.4% of the $130 million in 8.75% second-lien senior secured notes. An additional $32.2 million of interest is owing on the second-lien debt. US Bank NA is the indenture trustee. Holders of the $14.5 million in first-lien debt have Wells Fargo Capital Finance Inc. as their agent. The first-lien obligation is fully secured. Interest has been paid currently at the default rate. Gerald M. Gordon, Esq., Brigid M. Higgins, Esq., and Candace C. Clark, Esq., at Gordon & Silver, Ltd., in Las Vegas, Nevada, serve as counsel to the Debtors in the Chapter 11 cases. Garden City Group, Inc., is the claims agent. 155 East Tropicana disclosed $63,236,842 in assets, and $189,794,389 in liabilities as of the Chapter 11 filing. ALAMABA AIRCRAFT: Seeks Plan Exclusivity Until Dec. 12 ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Alabama Aircraft Industries Inc. was authorized by the U.S. Bankruptcy Court in Delaware to sell the business for $500,000 to Kaiser Aircraft Industries Inc. Mr. Rochelle also reports that AAI filed a motion for an extension until Dec. 12 of the exclusive right to propose a Chapter 11 plan. The hearing on the motion is scheduled for Oct. 13. According to Mr. Rochelle, the sale contract allows Kaiser Aircraft to pursue some lawsuits through a litigation trust, while giving 10% of recoveries to creditors of AAI. Kaiser Aircraft, which funds the litigation trust, is a subsidiary of Kaiser Group Holdings Inc. The buyer also pays the cost to cure payments defaults on contracts and leases being taken over. Kaiser will have two of three appointments to the advisory board for the trust. About Alabama Aircraft Birmingham, Alabama-based Alabama Aircraft Industries Inc. -- http://www.alabamaaircraft.com/-- provides aircraft maintenance and modification services for the U.S. government and military customers. Its 190-acre facility, including its corporate offices, is located at the Birmingham International Airport. The Company currently has 92 salaried employees and 234 hourly employees. About 251 hourly employees were furloughed since Jan. 1, 2010. Alabama Aircraft filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-10452) on Feb. 15, 2011. Two subsidiaries also filed -- Alabama Aircraft Industries, Inc.- Birmingham (Case No. 11-10453) and Pemco Aircraft Engineering Services, Inc. (Case No. 11-10454). Alabama Aircraft estimated assets and debts of $1 million to $10 million as of the Chapter 11 filing. When it filed for bankruptcy, the Company said the primary goal was to address long-term indebtedness and, in particular, long- term pension obligations under the terms of its pension plan. The Company said it would likely cease operations absent the elimination of its obligations under the pension plan. The Company owes $68.5 million to the Pension Benefit Guaranty Corp. Joel A. Waite, Esq., and Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as counsel to the Debtors. ANDRONICO'S MARKETS: Renwood-Led Auction for Assets on Oct. 13 -------------------------------------------------------------- The Hon. Edward D. Jellen of the U.S. Bankruptcy Court for the Northern District of California authorized Andronico's Markets, Inc., to sell certain assets in an auction led by Renwood Andronico Lending 1, LLC, or its designee. As reported in the Troubled Company Reporter on Sept. 2, 2011, Renwood Andronico Lending 1, an entity formed by Renovo Capital, LLC, is the Debtor's senior secured creditor with a lien on substantially all of the Debtor's assets holding a claim of roughly $29 million. Pursuant to the purchase agreement, the buyer will pay roughly $20 million in a combination of cash and a credit bid against the Debtor's obligations to the buyer under the DIP Facility or the prepetition debt. The buyer will have the sole discretion to determine whether its credit bid is on account of prepetition debt or amounts owed under the DIP Facility. The purchase agreement will exclude, among other things, cash up to a specified amount, certain avoidance claims and causes of action. The purchase agreement further provides for the assumption and assignment of certain specified executory contracts and unexpired leases of the Debtor. The sale of the purchased assets will be free and clear of all liens, claims, encumbrances and other interests to the fullest extent allowed by law except as provided by the purchase agreement. The sale must close by Oct. 7. The auction will take place at the sale hearing scheduled for Oct. 13, 2011, at 9:00 a.m. (Pacific time). In the event the Debtor does not receive by 5:00 p.m. (Pacific time) on Oct. 7, (bid deadline) at least one qualified bid for the purchased assets, other than the purchase agreement, Renwood will be deemed the successful bidder and the Debtor will seek approval of its sale to Renwood pursuant to the purchase agreement at the sale hearing. Objections, if any, to the sale are due Sept. 29. In the event of any competing bids for the assets, resulting in Renwood not being the successful buyer, it will receive a breakup fee of $250,000 to be paid at the time of the closing of the sale with such third party buyer. The non-debtor parties to the assumed contracts will have until Sept 29, to (a) object to the assumption and assignment of any of the assumed contracts; (b) object to the amount of the cure amounts; or (c) assert that non-monetary defaults, conditions or pecuniary losses or other amounts must be cured or satisfied (including all compensation for any pecuniary loss resulting from a default in respect of the assumed contracts) under any of the assumed contracts in order for the assumed contracts to be assumed and assigned. About Andronico's Markets Andronico's Markets, Inc., aka Andronico's Community Markets, is an independent, specialty supermarket operator in the San Francisco Bay Area. Founded in 1929, the Company operates seven stores in prime upscale urban and suburban locations in Berkeley (four stores), San Francisco, Los Altos, and San Anselmo. Andronico's is a California C-corporation, owned by Solano Enterprises LLC. The ownership of Solano Enterprises LLC is divided among various Andronico family members. Andronico's filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 11-48963) on Aug. 22, 2011. Judge Edward D. Jellen oversees the case. Attorneys at Murray & Murray, in Cupertino, Calif., represent the Debtor as counsel. Bailey, Elizondo & Brinkman LLC serves as its financial and restructuring advisor. Rust Consulting, Inc., as the clerk of court's noticing and claims agent. The Debtor scheduled $18,520,090 in assets and $67,094,619 in liabilities. ANDRONICO'S MARKETS: Can Access $5-Mil. Loan from Buyer ------------------------------------------------------- Judge Edward D. Jellen of the U.S. Bankruptcy Court for the Northern District of California, Oakland Division, authorized Andronico's Markets, Inc., aka Andronico's Community Markets, to obtain postpetition financing from Renwood Andronico Lending I, LLC. Renwood Andronico is providing up to $5 million in DIP financing. The DIP Facility will be used to fund, among other things, ongoing working capital needs of Debtor, and pay fees and expenses owed to the DIP Lender under the DIP Facility. As of the Petition Date, Debtor owed DIP Lender approximately $29,945,493, consisting of principal of $27,721,315, contingent liability for issued letters of credit of $345,000, accrued interest of $1,682,781, and attorney fees and expense reimbursement of $197,000 pursuant to (i) the Credit Agreement dated as of February 14, 2007 between Debtor and Bank of the West, the predecessor to DIP Lender, as the agreement has been amended and modified from time to time and (ii) the Second Lien Credit Agreement dated as of February 14, 2007 between Debtor and Special Situations Investing, Inc., the predecessor to DIP Lender, as the agreement has been amended and modified from time to time. The Debtor agrees that the DIP Lender has an allowed claim in the amount of the Prepetition Obligation without the necessity of filing a proof of claim. As collateral for the Prepetition Obligations, the DIP Lender has a first priority security interest in and lien upon all of the assets of the Debtor, subject only to certain liens with priority over the Prepetition Liens. The liens, security interests and superiorpriority administrative expense are subject to and subordinate to a carve out for payment of professional fees and U.S. Trustee fees. About Andronico's Markets Andronico's Markets, Inc., aka Andronico's Community Markets, is an independent, specialty supermarket operator in the San Francisco Bay Area. Founded in 1929, the Company operates seven stores in prime upscale urban and suburban locations in Berkeley (four stores), San Francisco, Los Altos, and San Anselmo. Andronico's is a California C-corporation, owned by Solano Enterprises LLC. The ownership of Solano Enterprises LLC is divided among various Andronico family members. Andronico's filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 11-48963) on Aug. 22, 2011. Judge Edward D. Jellen oversees the case. Attorneys at Murray & Murray, in Cupertino, Calif., represent the Debtor as counsel. Bailey, Elizondo & Brinkman LLC serves as its financial and restructuring advisor. An official committee of unsecured creditors was appointed on Aug. 25, 2011. The Debtor scheduled $18,520,090 in assets and $67,094,619 in liabilities as of the Chapter 11 filing. APTHORP: Owners of Landmark Property Balk at Sale of Mortgage ------------------------------------------------------------- Dow Jones' DBR Small Cap reports that just when it looked like the long-running saga surrounding the Apthorp was winding down, a new battle is heating up for control of the 103-year-old landmark property. ARCHBROOK LAGUNA: Court OKs Macquarie Capital as Financial Advisor ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York has given Archbrook Laguna Holdings LLC, et al., final authorization to employ Macquarie Capital (USA) Inc. as their financial advisor. As financial advisor, Macquarie will assist in the evaluation of the Debtors' business and prospects, assist in the development of long-term business plan and related financial projections, analyze various restructuring scenarios and the potential impact of these scenarios on the recoveries of various stakeholders impacted by the restructuring, and provide strategic advice with regard to restructuring or refinancing the Debtors' obligations. Macquarie will be paid for professional services according to a fee structure, which provides for: (a) a monthly advisory fee of $125,000 per month with 50% of all Monthly Fees after the third Monthly Fee credited, without duplication, against any earned Restructuring Fee, Sale Transaction Fee or Financing Fee; and (b) a Financing Fee in an amount equal to: * 1% of the gross proceeds of all senior indebtedness; * 2% of the gross proceeds of all junior secured indebtedness; * 3% of the gross proceeds of all mezzanine indebtedness; * 5% of the gross proceeds of all equity, equity-linked or equity-like securities or indebtedness; and * with respect to any other securities of a financing, underwriting discounts, placement fees or other compensation, customary under the circumstances, as will be mutually agreed upon by the Company and Macquarie; and (c) a Restructuring Fee equal to 2% of the aggregate outstanding principal amount of the restructured obligations, which will not be less than $1,250,000, payable upon consummation of any restructuring pursuant to a bankruptcy proceeding; or (d) a Sale Transaction Fee equal to 1.5% of the Transaction Value up to $100,000,000 and 2% of incremental Transaction Value above $100,000,000, provided that the Sale Transaction Fee will not be less than $1,250,000, provided further that, if a Sale Transaction for a material portion of the assets occurs through a series of transactions, the Sale Transaction Fee payable in the case of that liquidation will not be based on the Transaction Value and will instead be $650,000; and (e) reasonable out-of-pocket expenses in connection with the services provided. Before the Petition Date and under the terms of the Engagement Letter, the Debtors paid Macquarie total fees of $75,000 per month for services rendered from May 19, 2011, through July 7, 2011, and for reasonable out-of-pocket expenses related to those services. David Miller, a managing director of Macquarie Capital, disclosed that as of May 19, 2011, Macquarie was paid a $100,000 Upfront Retainer and $117,500 in Monthly Advisory Fees for its prepetition services to the Debtors. As of July 8, 2011, Macquarie has earned $217,500 for the 48 calendar days it was employed prepetition, and has incurred $44,284 in out-of-pocket expenses. Mr. Miller assured the Court that Macquarie is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Court ordered that the engagement letter will be amended in these respects, among other things: -- a fee in an amount equal to 1.5% of the Transaction Value up to $100,000,000 and 2.0% of incremental Transaction Value above $100,000,000 payable upon the consummation of a Sale Transaction provided that the minimum Sale Transaction Fee payable will be $1,250,000, further provided that a Sale Transaction Fee paid to Macquarie pursuant to the immediately preceding clause will be reduced by an amount equal to 50% of the aggregate amount of Monthly Advisory Fees Macquarie has received from the Debtors; further provided that, notwithstanding the foregoing, if a Sale Transaction for a material portion of the assets occurs through a series of transactions, the Sale Transaction Fee Payable in the case of such liquidation will not be based on the Transaction Value and will instead be $650,000; further provided that any Sale Transaction Fee paid to Macquarie pursuant to the immediately preceding clause will be reduced by an amount equal to 75% of the aggregate amount of Monthly Advisory Fees Macquarie has received from the Debtors. A final hearing on Macquarie's retention will be held on Sept. 7, 2011, at 10:00 a.m. (prevailing Eastern Time). About ArchBrook Laguna ArchBrook is a procurement and distribution intermediary between production companies and end retailers. It distributes consumer electronics, computers and appliances to principal customers that include Wal-Mart Stores Inc., Best Buy Co. and Costco Wholesale Corp. ArchBrook disclosed assets of $246.2 million against debt totaling $176.4 million as of March 31, 2011. ArchBrook Laguna Holdings LLC and certain of its affiliates filed voluntary petitions for reorganization under chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 11-13292) on July 8, 2011. Ira S. Dizengoff, Esq., Michael P. Cooley, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, serve as bankruptcy counsel to ArchBrook Laguna. The Company is being advised by Macquarie Capital (USA) Inc. with respect to the sale process and by Hawkwood Consulting LLC, whose founder Stephen J. Gawrylewski is Chief Restructuring Officer of the Company. Macquarie Capital (USA) Inc. is the financial advisor. PricewaterhouseCoopers LLP is a consultant. Cooley LLP, in New York, is the counsel for the Official Committee of Unsecured Creditors. Gordon Brothers Group, LLC, was declared the winning bidder at the Aug. 8 auction of substantially all of the assets of ArchBrook Laguna LLC and its affiliates. ARCTIC GLACIER: CPP Board & West Face Refuse to Extend Waiver ------------------------------------------------------------- Arctic Glacier Income Fund disclosed that its second lien secured lenders, CPPIB Credit Investments Inc. and West Face Capital Inc., have refused to provide a further extension of the period during which they have waived compliance with certain financial covenants under the Fund's credit facilities. Further, CPPIB Credit Investments Inc. and West Face Capital Inc. have issued a notice of default under those credit facilities but have not accelerated the obligations owing thereunder. The Fund anticipates that the steps taken by the second lien secured lenders may compel the Fund's first lien secured lenders to take similar steps. The Fund was in breach of financial covenants governing maximum leverage ratio, interest coverage ratio, fixed charge coverage ratio and minimum EBITDA levels under its credit facilities as at June 30, 2011. Subsequent to the end of the quarter, on July 29, 2011, the Fund's secured lenders waived compliance with those covenants for the quarter ended June 30, 2011 until September 9, 2011. Arctic Glacier is continuing active discussions with its lenders to amend certain terms of the credit agreements for future quarters. However, there can be no assurance that such amendments will be approved. About Arctic Glacier Arctic Glacier Income Fund, through its operating company, Arctic Glacier Inc., is a leading producer, marketer and distributor of high-quality packaged ice in North America, primarily under the brand name of Arctic Glacier(R) Premium Ice. Arctic Glacier operates 39 production plants and 48 distribution facilities across Canada and the northeast, central and western United States servicing more than 75,000 retail locations. Arctic Glacier Income Fund trust units are listed on the Toronto Stock Exchange under the trading symbol AG.UN. There are currently 350.3 million trust units outstanding. BARZEL INDUSTRIES: Wins Plan Approval as No Objections Filed ------------------------------------------------------------ Barzel Industries Inc. sought and obtained confirmation of its liquidating Chapter 11 plan at a hearing last week. No objections were filed, and every class of voting creditors voted "yes", according to Bill Rochelle, the bankruptcy columnist for Bloomberg News. Barzel sold most of the assets in November 2009 for $75 million to Norwood, Massachusetts-based Chriscott USA Inc. Secured lenders later agreed to a settlement where they received a release of claims in return for giving up $800,000, including $500,000 earmarked solely for unsecured creditors. Unsecured creditors are estimated to have an 11% recovery from the carveout from lenders' collateral, according to the disclosure statement explaining the Chapter 11 plan. Secured creditors won't participate in the pot for unsecured creditors on account of their deficiency claims. About Barzel Industries Norwood, Massachusetts-based Barzel Industries, Inc., was in the business of processing and distributing steel. The Company manufactured steel for the construction and industrial manufacturing industries, and produces finished commercial racking products. Barzel Industries -- aka Novamerican Steel Inc. and Symmetry Holdings Inc. -- and seven affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13204) on Sept. 15, 2009. Judge Christopher S. Sontchi presides over the cases. J. Kate Stickles, Esq., and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, and Gerald H. Gline, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, N.J., serve as the Debtors' counsel. On the same day, Barzel Industries filed applications for relief under the Canadian Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice -- Commercial List. Barzel Industries recorded assets of $370,145,000 against debts of $375,412,000 as of May 30, 2009. BEAZER HOMES: Moody's Cuts Corporate to 'Caa2'; Outlook Stable -------------------------------------------------------------- Moody's Investors Service downgraded the corporate family and probability of default ratings of Beazer Homes USA, Inc. to Caa2 from Caa1. In a related action, Moody's lowered the rating for Beazer's senior secured notes to B2 from B1 and the rating for its senior unsecured notes to Caa3 from Caa2. The SGL assessment was affirmed at SGL-3. The rating outlook remains stable. The downgrade reflects Moody's expectations that the conditions in the homebuilding industry will continue to put pressure on Beazer's operating and financial metrics, resulting in operating losses, negative cash flow generation, elevated debt leverage, and declines in equity over the next two years. Additionally, Moody's expect the company to continue burning cash from its land spend. In addition, Moody's expects Beazer to continue experiencing declines in deliveries and revenues into 2012. These rating actions were taken: Corporate family rating downgraded to Caa2 from Caa1; Probability of default rating downgraded to Caa2 from Caa1; Senior secured notes downgraded to B2 (LGD2, 24%) from B1 (LGD2, 12%); Senior unsecured notes downgraded to Caa3 (LGD4, 67%) from Caa2 (LGD4, 61%); Speculative grade liquidity assessment affirmed at SGL-3; All of Beazer's debt is guaranteed by its principal operating subsidiaries. RATINGS RATIONALE The Caa2 corporate family rating reflects Moody's expectation that Beazer's operating and financial performance will be weak over the next two years. More specifically, Moody's assumes that high leverage, on-going operating losses and declining equity will continue over this time period. In addition, Moody's expects that Beazer's cash flow generation, which was negative over the last three quarters, will continue to be weak in 2011 and 2012 as the benefits of inventory liquidation have largely played out and the company pursues land investments. At the same time, the ratings are supported by the company's extended debt maturity profile and the possibility of its being able to replenish its unrestricted cash position. Moody's also recognizes that the impairments and other charges are likely to be less material going forward. The stable rating outlook indicates that although Moody's does not see a macro environment in the coming two years that would materially help the company's operating performance, Moody's does not expect Beazer's performance to change significantly in either direction from current levels, either in an absolute sense or on a comparative basis. The outlook and/or ratings could come under pressure if the company were to deplete its cash reserves either through sharper than expected operating losses or through a sizable investment or other transaction. Although in the near term it is unlikely, over a longer time horizon the outlook and/or ratings could improve if the company were to become and remain profitable, maintain adequate liquidity, continue to grow its tangible equity base, and reduce adjusted debt leverage to below 65%. The principal methodology used in rating Beazer was the Global Homebuilding Industry Methodology published in March 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Atlanta, Georgia, Beazer Homes USA, Inc. is one of the country's ten largest single-family homebuilders with operations in 16 states. Total revenues from continuing operations and consolidated net loss for the 12 months ended June 30, 2011 were approximately $693 million and $(221) million, respectively. BEAZER HOMES: Fitch Cuts Issuer Default Rating to 'CCC' ------------------------------------------------------- Fitch Ratings has downgraded its ratings for Beazer Homes USA, Inc., including the company's Issuer Default Rating (IDR) to 'CCC' from 'B-'. The ratings downgrade reflects Fitch's belief new housing activity will remain weak through at least 2012 and the company's liquidity position is likely to erode in the next 18 months. With the recent softening in the economy and lowered economic growth expectations for 2011 and 2012, the environment may at best support a relatively modest recovery in housing metrics over the next year and a half. Fitch had previously forecast a slightly more robust housing environment in 2011 and 2012. While Beazer currently has adequate liquidity to fund working capital and debt service, this cushion is likely to erode in the next 12-18 months as the company continues to have operating losses and expends cash to replenish its land supply. At June 30, 2011, Beazer had unrestricted cash of $274.6 million. Fitch currently expects Beazer to end fiscal 2011 with unrestricted cash of between $350 million to $400 million. With annual interest expense of roughly $120 million and similar land and development expenditures next year, unrestricted cash could fall below $250 million by the end of fiscal 2012. The company is increasing land and development expenditures in 2011 following four years of reduced spending. Through the first nine months of fiscal year 2011 (ending June 30, 2011), Beazer spent roughly $178 million on land and land development. Management currently expects to spend approximately $250 million in land and development expenditures in fiscal 2011 compared with $182.7 million in fiscal 2010. This concern is somewhat mitigated by the fact that Beazer has no major debt maturities until 2015, when $172 million of senior notes become due. Furthermore, management has demonstrated in the past that it is capable of pulling back on land and development spending when necessary. At June 30, 2011, the company controlled 29,800 lots, of which 83.8% were owned and the remaining lots controlled through options. Based on the latest 12 month closings, Beazer controlled 9.5 years of land and owned roughly eight years of land. The company's owned lot position includes 5,150 finished lots (or 20.6% of total owned lots), giving the company some discretion and flexibility in controlling its land and development spending. As expected, the housing recovery has been irregular so far and to date quite anemic. Various housing and related statistics appear to have bottomed in early to mid-2009. Since then the on, then off, then on again federal housing credit at times spurred or at least pulled forward housing demand. With the U.S. economy moving from recession to expansion in the third quarter of 2009, plus very attractive housing affordability and government incentives, housing was jump-started. However, faltering consumer confidence, among other issues, has restrained the recovery so far. The public homebuilders were generally unprofitable in the calendar first quarter (excluding non-cash real estate charges) and revenues trailed a year ago levels. That was also the case in the calendar second quarter. Builder comparisons ease in the third and fourth quarters. If the economy continues to modestly advance and employment edges up, macroeconomic housing metrics should, for the most part, remain at current levels through the end of this year. Fitch currently projects new single-family housing starts will drop 13.1% in 2011 following 5.8% growth in 2010. After falling 14.1% in 2010, new home sales are forecast to decrease about 7% in 2011. Fitch expects existing home sales to slip 2% in 2011 after a 4.8% decline in 2010. In a moderately growing economy in 2012, housing metrics could modestly expand, off a very depressed base. Future ratings and Outlooks will be influenced by broad housing market trends as well as company specific activity, such as trends in land and development spending, general inventory levels, speculative inventory activity (including the impact of high cancellation rates on such activity), gross and net new order activity, debt levels and especially free cash flow trends and uses, and the company's cash position. Further negative rating actions could occur if the anticipated recovery in housing does not materialize and the company prematurely steps up its land and development spending, leading to consistent and significant negative quarterly cash flow from operations and diminished liquidity position. Beazer's ratings are constrained in the intermediate term due to weak credit metrics and high leverage. Fitch has downgraded Beazer's ratings as follows: -- IDR to 'CCC' from 'B-'; -- Secured revolving credit facility to 'B+/RR1' from 'BB-/RR1'; -- Second lien secured notes to 'B+/RR1' from 'BB-/RR1'; -- Senior unsecured notes to 'CCC/RR4' from 'B-/RR4'; -- Convertible subordinated notes to 'C/RR6' from 'CC/RR6'; -- Junior subordinated debt to 'C/RR6' from 'CC/RR6'. The Recovery Rating (RR) of 'RR1' on Beazer's secured credit revolving credit facility and second-lien secured notes indicates outstanding recovery prospects for holders of these debt issues. The 'RR4' on Beazer's senior unsecured notes indicates average recovery prospects for holders of these debt issues. Beazer's exposure to claims made pursuant to performance bonds and joint venture debt and the possibility that part of these contingent liabilities would have a claim against the company's assets were considered in determining the recovery for the unsecured debtholders. The 'RR6' on the company's mandatory convertible subordinated notes and junior subordinated notes indicates poor recovery prospects for holders of these debt issues in a default scenario. Fitch applied a liquidation value analysis for these RRs. BERNARD L. MADOFF: Customers Claim Page-Limit Compliance -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that eight law firms representing 200 customers of Bernard L. Madoff Investment Securities Inc. filed papers on Sept. 9 asking the U.S. Court of Appeals in Manhattan to consider their request even though they exceeded the 15-page limit in the appellate court's rules. The law firms are seeking rehearing on a decision handed down Aug. 16 by a panel of three circuit judges concluding that the bankruptcy judge was correct in disregarding bogus account statements showing fictitious profits and securities never actually purchased. They wanted the case argued once again in front of all active circuit court judges. Mr. Rochelle relates that when the customers initially filed a rehearing petition, it was rejected by the appeals court for exceeding the 15-page limit. After the customers attempted to meet the page limit by filing two petitions for rehearing, the Madoff trustee filed papers last week asking the judges to strike the petitions as an evasion of the length rule. The customers responded on Sept. 9 by telling the circuit judges that they would have been within their rights if each of the law firms filed a separate 15-page petition. They see their petition as satisfying the rule, especially because the issue is of "national importance," they said in their papers. According to Mr. Rochelle, the Madoff trustee, Irving Picard, is hoping the Second Circuit in Manhattan will quickly deny the rehearing motion. He said in a separate filing that the rehearing effort on its own is preventing him from making an additional 11% distribution to customers. Mr. Rochelle notes that denial of rehearing may not be the end of the story. The customers still can file papers asking for review in the U.S. Supreme Court. Typically, the high court doesn't act for several weeks. Consequently, the additional 11% distribution isn't on the immediate horizon. Major Financial Institutions Bloomberg News reported that Mr. Picard, undeterred by the recent dismissal of large portions of his $9 billion lawsuit against HSBC Holdings Plc, is still suing major international financial institutions. Mr. Picard started six new lawsuits, seeking almost $220 million from Sumitomo Mitsui Trust Holdings Inc. and affiliates of Barclays Plc, among others. The lawsuits are almost identical. They all allege that the defendants were subsequent recipients of stolen customer funds that initially went to Fairfield Sentry Ltd., one of the largest feeder funds into Mr. Madoff's Ponzi scheme. The lawsuits were made possible by the Madoff trustee's settlement in June with Fairfield Sentry, which is in liquidation in Bermuda along with affiliates. The lawsuit against the Barclays affiliates is Picard v. Barclays Bank (Suisse) SA, 11-02569, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The other suits, in the same court, are numbers 11-02568 and 11-02570 through 02573. The liquidation in bankruptcy court in the Madoff liquidation case is Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities Inc., 08-01789, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The criminal case is U.S. v. Madoff, 09-cr-00213, U.S. District Court, Southern District of New York (Manhattan). About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of July 15, 2011, a total of US$6.88 billion in claims by investors has been allowed, with US$794.9 million to be paid by the Securities Investor Protection Corp. Investors are expected to receive additional distributions from money recovered by Mr. Picard from lawsuits or settlements. BLACK CROW: Paul Stone Gets Control in Exchange for $20 Mil. ------------------------------------------------------------ Radio-Info.com reports that it was Georgia-based operator Paul Stone who provided $1.5 million in critical "post-petition" Chapter 11 financing in April 2010 for Black Crow Media Group, LLC. Now Mr. Stone will wind up with the assets of Black Crow, in exchange for $20 million. That's compared to $39 million of total indebtedness due to lender GE Capital. Back in 2003, Black Crow Media refinanced with GE Capital and Spectrum Equity Investors to the tune of $48 million. Now, surviving creditor GE Capital ends the struggle that began when it tried to have the U.S. District Court in New York appoint a receiver in January 2010. The report says Black Crow reacted by filing for Chapter 11 bankruptcy protection in Jacksonville. Black Crow and its legal reps from Wiley Rein and Latham, Shuker, Eden & Beaudine kept fending off GE Capital, and now it appears that the end of Chapter 11 reorganization is near. According to the report, Paul Stone pays $20 million, as a secured claim on the GE Capital loan. The plan allows for a "pot" of $200,000 to take care of the unsecured creditors, which won't include Stone. Black Crow's Michael Linn "will own 20% of the equity in the reorganized Debtors...[and] the equity held by Mr. Linn shall be pledged to Mr. Stone." About Black Crow Daytona Beach, Florida-based Black Crow Media Group, LLC, owns and operates 17 FM and 5 AM radio stations in Daytona Beach, Live Oak, Valdosta, Huntsville, Alabama, and Jackson, Tennessee. Black Crow filed for Chapter 11 protection two days before a hearing in U.S. district court where GECC was seeking appointment of a receiver following default on term loans and a revolving credit. The Company filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 10-00172) on Jan. 11, 2010. The Company's affiliates -- Black Crow Media, LLC, et al. -- also filed separate Chapter 11 petitions. H. Jason Gold, Esq., Valerie P. Morrison, Esq., and Dylan G. Trache, Esq., at Wiley Rein LLP, in McLean, Virginia, serve as the Debtors' counsel. Mariane L. Dorris, Esq., and R. Scott Shuker, Esq., at Latham, Shuker, Eden & Beaudine, LLP, have been tapped as co-counsel. Protiviti Inc. is the Debtors' financial advisor. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. Brian G. Rich, Esq., and Douglas Bates, Esq., at Berger Singerman, P.A., represent the Official Committee of Unsecured Creditors. Black Crow disclosed $14,661,198 in assets and $48,830,319 in Liabilities as of the Chapter 11 filing. BORDERS GROUP: Wins OK to Assign 14 Leases to Books-A-Million ------------------------------------------------------------- Judge Martin Glenn authorized Borders Group Inc. to assume and assign 14 unexpired nonresidential real property leases to Books- A-Million, Inc. for $943,000. The Debtors are permitted to assume and assign those leases to BAM, and to enter into an assumption and assignment of lease agreement. A list of the Assigned Leases is available for free at: http://bankrupt.com/misc/Borders_BAMAssignedLeases.pdf A full-text copy of the Assignment Agreement is available for free at: http://bankrupt.com/misc/Borders_BAMLeaseAssmptnAgr.pdf In compliance with the order, the Debtors confirmed to Judge Glenn on September 1, 2011, that all of the Assigned Leases identified on Exhibit "1" to the Order will be assumed and assigned to BAM. The consummation of the transaction with respect to the Assigned Leases contemplated will take place on the date of delivery of the subject leased premises to BAM, in broom clean condition following conclusion of the Store Closing Sale for the premises related to the applicable Assigned Lease, provided that the Delivery Date will occur no earlier than September 20, 2011, and no later than November 14, 2011. Within five business days of the Delivery Date, BAM will provide notice of the Delivery Date to the applicable landlords for the Assigned Leases and will file on the docket a notice showing the Delivery Date for each Assigned Lease. By no later than the Delivery Date, BAM will pay to the Debtors, in cash or otherwise immediately available funds, the Base Price, plus the amount of the cure amounts for the Assigned Leases. A copy of the allocation of the purchase price plus the cure costs is available for free at: http://bankrupt.com/misc/Borders_PurchasePriceAllocation.pdf Absent further order of the Court, the Debtors will pay on the Delivery Date an estimated amount of real estate taxes, and common area maintenance and other periodic charges due under the Assigned Leases for the period from the Petition Date through and including September 30, 2011, to be agreed upon by the Debtors, the Official Committee of Unsecured Creditors, BAM, and each landlord for each Assigned Lease by September 1, 2011. Obligations arising under each of the Assigned Leases from and after the Delivery Date will be the responsibility of BAM. For avoidance of doubt, BAM will not be responsible for any amounts that arose or accrued, relate to, or are attributable to the period prior to the Delivery Date, regardless of when billed, even in the event the Debtors are unable or unwilling to pay those amounts. The Debtors, BAM and each landlord of an Assigned Lease will, in the ordinary course, perform a year-end reconciliation for calendar year 2011 for CAM Charges and real estate taxes paid by the Debtors or BAM with respect to the Assigned Leases. If the CAM Charges or real estate taxes paid: (a) exceed the amount determined to be actually due after the reconciliation with respect to an Assigned Lease, the applicable landlord for the Assigned Lease will make payment to the Debtors' estates, for the period running from the Petition Date through the Delivery Date, or BAM, for the period running from and after the Delivery Date; or (b) are less than the real estate taxes or CAM Charges determined to be actually due after such reconciliation with respect to an Assigned Lease, the Debtors, for the period running from the Petition Date through the Delivery Date, or BAM, for the period from and after the Delivery Date, will pay the difference to the landlord for the Assigned Lease; provided that to the extent that the Delivery Date differs from September 30, 2011, the Debtors or BAM will make payment of the appropriate amount of the estimated real estate taxes and CAM Charges paid to the other to account for the difference. Judge Glenn acknowledged that based on the declaration submitted by Jay Turner, vice president of Real Estate for Books-A-Million, Inc., in support of the approval of the BAM Transaction, the transaction contemplated was entered into by BAM in good faith for purposes of Section 363(m) of the Bankruptcy Code, and the sale price was not controlled by an agreement among BAM and potential bidders for the Assigned Leases for purposes of Section 363(n). In his declaration, Mr. Turner also assured the Court that BAM is entirely confident that the acquisition of the Leases will be financially beneficial to BAM and that BAM is highly capable of performing under all of the terms of the Leases. Objections Overruled All objections with regard to the relief sought in the BAM Transaction Motion as it pertains to the Assigned Leases, that have not been withdrawn, waived, or settled, are overruled on the merits, Judge Glenn ruled. Before entry of the order, Centro Properties Group filed a protective objection to the BAM Transaction Motion in the event that no agreement is reached concerning certain leases terms and also regarding cure and year-end adjustment issues. Four other parties disputed the proposed cure amounts assigned to their leases and asked the Court to fix the precise cure amounts. The contract counterparties are: Proposed Asserted Counterparty Cure Amt. Cure Amt. ------------ --------- ---------- Macy's Retail Holdings, Inc. $18,051 $27,903 Agree-Columbia Crossing Project, LLC 0 $2,000 CJM-Viewmont, LLC 0 $41,657 Capital Land Company 0 $50,827 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 its remaining 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: Wins Nod to Make $1.75-Mil. Severance Payments ------------------------------------------------------------- Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York authorized Borders Group, Inc., and its debtor affiliates to make severance payments totaling $1.75 million to their top 14 employees. The Debtors are permitted to make severance payments to these four Senior Management Officers, at $125,000 per officer, for a total of $500,000: * Mike Edwards, former Chief Executive Officer * Scott Henry, former Chief Financial Officer * Jim Frering, Executive Vice-Pres. for Store Operations * Rosalind Thompson, Sr. Vice-Pres. for Human Resources The Debtors are also authorized to make severance payments to these 10 Non-Insider Management Employees, totaling $1.25 million or a $125,000 or less severance payment per employee: * Eric Kovats, Vice President, Regional East * Beatrice Vicente, Vice President, Regional West * Jason Cline, Vice-Pres., Financial Planning and Analysis * Lynda Pak, Vice President, Applications * Daniel Angus, Vice President, Loyalty Marketing * Edward Jackson, Vice President, Tax * Renee Rockwood, Vice President, Merchandising * Joanna Cline, Vice President, Brand Merchandising * Mark Bacon, Vice President, Planning and Allocation * Robert Chun, Vice President, Digital Judge Glenn clarified that no Severance Payments to the Senior Management Employees or Non-Insider Management Employees are permitted pursuant to his order exceeding the amount of the cap set forth under Section 503(c)(2)(B) of the Bankruptcy Code. The bankruptcy judge further acknowledged that the acceptance by the Senior Management Employees and Non-Insider Management Employees of the Severance Payments will constitute a release of any and all claims these individuals may have against the Debtors and their estates. 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 its remaining 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: Glen Tomaszewski Out as VP, CAO ---------------------------------------------- Borders Group, Inc., reported to the U.S. Securities and Exchange Commission on September 9, 2011, that the employment of Glen Tomaszewski, then vice president, chief accounting officer and treasurer of the Company terminated on September 2, 2011. Mr. Tomaszewski was previously appointed treasurer of the Company effective July 29, 2011, and he served as vice president, chief accounting officer and controller of the Company since October 2010. 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 its remaining 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: Next Jump Drops Bordersperks But Has Counterclaims ----------------------------------------------------------------- Borders, Inc., and Borders Properties, Inc. entered into a Court- approved stipulation with Next Jump, Inc., in connection with the Debtors' motion for a temporary restraining order and preliminary injunction against Next Jump. Under the stipulation, Next Jump agrees to: (i) disable the www.bordersrewardsperks.com Web site except for this message: "The Borders Rewards Perks program is no longer available. Click Here to navigate to the borders.com Web site;" (ii) not use the BRP Customer List and Explicit Sponsor Enrollee Data as defined in Next Jump's previous agreement with the Debtors in any way, including, but not limited to, sending any e-mails to or otherwise communicating with the persons on the BRP Customer List; (iii) not use any data derived from the BRP Customer List, Explicit Enrollee Sponsor Data, and Next Jump's alleged solicitation of persons on the BRP Customer List or "migration" to OO.com, in any way, including e-mailing persons who signed up with OO.com as a result of Next Jump's alleged solicitation of persons on the BRP Customer List; provided that nothing in the Parties' Stipulation will limit Next Jump's rights under the Next Jump Agreement provided that Next Jump purges all personally identifiable information as required by the Parties' Stipulation and only uses the remaining data in an aggregate manner; and (iv) not use and will locate and use best efforts to remove any of the BORDERS Marks on any Web site it owned or controlled, including OO.com and NextJump.com; and (v) not reference any of the BORDERS Marks on any Web site it owned or controlled, including OO.com and NextJump.com. The Parties agree to cooperate in good faith to prepare a form of notice by September 9, 2011, in form and substance mutually acceptable to them and Next Jump will have the obligation to: -- distribute the notice via electronic mail one time only, solely to those persons listed on the BRP Customer List whose accounts were migrated to the OO.com site; -- post the notice on all Web sites owned or controlled by Next Jump, including OO.com and NextJump.com, in a size, manner and location on those Web sites agreeable to the Parties; and -- distribute the notice to any other third party forum, including Web site, blog or other media outlet that Next Jump has communicated with regarding the transactions or occurrences described in the Debtors' Complaint and accompanying Memorandum, provided that the Debtors will approve each transmittal. In the event the Parties cannot reach an agreement, any party will seek an immediate telephonic hearing with the Court to resolve any disputes. Next Jump is further required to identify by an executed certification by an appropriate corporate officer on or before September 9, 2011, all uses, individually and collectively, of the BRP Customer List and the Explicit Sponsor Enrollee Data since July 20, 2011, including, but not limited to, the persons solicited to join any Web site owned or controlled by Next Jump and the persons who accepted any such solicitation. Next Jump will provide a copy of the BRP Customer List and Explicit Sponsor Enrollee Data to the Debtors, encrypted in a Sarbanes-Oxley compliant manner, together with instructions, methodologies and encryption keys necessary to access the data, and otherwise in a format acceptable to the Debtors by September 9, 2011. By September 9, 2011, Next Jump will have unalterably purge the BRP Customer List and Explicit Sponsor Enrollee Data from its systems, including those persons (a) that were "migrated" by Next Jump to OO.com or NextJump.com, and (b) that signed up as a member of OO.com and NextJump.com for the period July 22, 2011, through September 6, 2011, and to verify that the purge has taken place by providing Debtors' counsel with an executed certification by an appropriate corporate officer of Next Jump by September 9, 2011. Next Jump Files Answer to Complaint Next Jump filed with the Court an answer to the Debtors' adversary complaint. Next Jump insists that it lacks sufficient knowledge and denies all allegations set forth in the Complaint. Next Jump asserts these affirmative defenses to the Complaint: (A) The Complaint fails to allege facts sufficient to constitute a cause of action against Next Jump for which relief can be granted to the Debtors. (B) The Debtors failed to investigate facts that were reasonably available to them and thereby unjustifiably relied on Next Jumps' alleged misrepresentations or non-disclosures, if any. (C) The Debtors have waived any and all claims, rights, and demands made in the Complaint because they accepted the terms of any and all products or services obtained, and are estopped from making such claims now by reason of Next Jump's reliance on such waiver. (D) The Debtors concealed material facts and are thus barred from obtaining the relief sought in the Complaint. (E) The Debtors acted with full knowledge and understanding of the relevant facts and circumstances surrounding the transactions and relations at issue in this litigation and assumed any and all risks associated therewith. (F) The Debtors are not entitled to any recovery from Next Jump because Next Jump was not unjustly enriched. (J) Every use by Next Jump of the Debtors' mark alleged in the Complaint was descriptive of and used fairly and in good faith only to describe the goods or services of the Debtors, and thus there is no liability for any use so alleged. (I) Every act or omission alleged in the Complaint was done or omitted in good faith conformity with the rules and regulations of the Lanham Act, and thus there is no liability for any act or omission so alleged. (L) The Debtors' damages, if any, were proximately caused or contributed to by the acts, omissions, negligence or intentional misconduct of third parties, and were not caused by Next Jump. Next Jump also filed with the Court counterclaims against the Debtors and Daniel Angus, Borders' vice-president for Customer Loyalty. "Contrary to the tale that Borders has told in its Complaint against Next Jump, this case is not about a business partner who has unjustly misappropriated assets belonging to Borders. This is a case about Next Jump working diligently, under the terms of a contract, and with the express permission of Borders, to preserve the value of Borders' assets, namely, the goodwill of Borders' loyal customers, and later being 'sucker-punched' with baseless accusations of mishandling and violating the privacy of those very customers," Steven Cooper, Esq., at Reed Smith LLP, in New York -- scooper@reedsmith.com -- counsel to Next Jump, tells the Court. Since 2007, Next Jump has managed Borders' fully outsourced rewards program. As the Debtors filed for bankruptcy and after news of full liquidation, Next Jump received a significant number of consumer inquiries into its customer service department asking about the preservation of a user's earned "WOWPoints," the bonus currency being utilized. Under Mr. Angus's leadership as customer loyalty vice-president, Borders had failed in its attempt to sell this asset to Direct Brands around June 2011, according to Next Jump. Mr. Angus also had access to all of Next Jump's reports that showed monthly transaction revenue drop from its height of $400,000 per month to a low $20,000 per month. In response to the customer requests, Next Jump focused on what is best for the consumer, says Mr. Cooper as Next Jump's counsel. The evidence, he points out, will show that Next Jump would have benefited more from shutting down all accounts and wiping out more than $1.5 million in WOWPoints liability. However, rather than shut down and wipe out all Borders rewards program member accounts of their hard earned WOWPoints, Next Jump offered the Borders Defendants an alternative solution, Mr. Cooper notes. Next Jump then discussed with the Debtors providing reward program members the ability to continue earning and burning of WOWPoints through a non-competing site to that of Borders, namely, "OO.com." In July 2011, the Debtors, through Mr. Angus, agreed to Next Jump's offer, convincing Next Jump that the Debtors were focused on how to do right by their long-time customers, Mr. Cooper relates. "However, it was later learned that the Debtors had no intention of doing right by the customers, and instead were solely focused on how this would enhance the value of the list to the new owners," he avers. The facts reveal that Next Jump has done nothing wrong but in fact has done much for the benefit of Borders and the value of its assets and for the benefit of third party customers who had invested in Borders' Rewards, Mr. Cooper argues. Instead of working with Next Jump to pursue the transition of Borders rewards program in a reasonable manner, Borders ignored all of Next Jump's urgent requests for cooperation, Mr. Cooper stresses. Indeed, Mr. Angus gave Next Jump the instructions Next Jump followed, and then manipulated a good faith gesture by Next Jump to create another option to monetize Borders' Rewards Program customer list, Mr. Cooper avers. Mr. Angus at all relevant times was aware of Next Jump's actions, Mr. Cooper insists. "Borders' actions, and the repudiation of a partner with whom it made a great deal of money over the last four years, reflect an intentional strategy to maximize its dwindling assets by scapegoating Next Jump," Mr. Cooper alleges. "Next Jump has been significantly harmed by the Borders Defendants' actions," he contends. Mr. Cooper stresses that Next Jump' WOWPoints brand has been tarnished. Damage to Next Jump's e-mail deliverability ranking has damaged Next Jump's current and future business by restricting its ability to conduct business and by damaging its reputation as a company engaged in responsible business practices, he points out. Next Jump has suffered the loss of member subscriptions, he says. Indeed, Next Jump continues to maintain approximately $1.8 million in contingent liability in reliance on Mr. Angus and the Debtors' representations, he asserts. Essentially, Next Jump's ability to attract additional end users has been damaged, he adds. Accordingly, Next Jump asks the Court to enter a judgment: (a) compelling the Debtors and Mr. Angus to pay Next Jump's damages, in an amount to be proven at trial; (b) compelling the Debtors and Mr. Angus to reimburse Next Jump for all costs associated with notifying enrollees under the Borders-Next Jump Agreement; (c) declaring that the Debtors and Mr. Angus are held jointly and severally liable for their obligations pursuant to the Court's order; (d) compelling the Debtors and Mr. Angus to pay for Next Jump's attorneys' fees and costs; and (e) declaring that Next Jump is entitled to indemnification or contribution from the Borders Defendants for any and all losses incurred as a result of their conduct. 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 its remaining 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 BUTTERMILK TOWNE: Proposes Oct. 17 Auction for All Assets --------------------------------------------------------- Buttermilk Towne Center, LLC, asks the U.S. Bankruptcy Court for the Eastern District of Kentucky to approve the Debtor's proposed bid procedures for the sale of substantially all of the assets used in its Buttermilk Towne Center Development located in Crescent Springs, Kentucky. The proposed bid procedures provide: 1. Bidders must deliver all bid documents on or before Oct. 14, 2011, at 5:00 p.m. 2. The auction will be held on Oct. 17, 2011, at the offices of Taft Stettinius & Hollister LLP, 425 Walnut Street, Suite 1800, in Cincinnati, Ohio. 3. The hearing to approve the sale will be held on Oct. 19, 2011, or such time thereafter as scheduled by the Bankruptcy Court. A copy of the Bid Procedures Motion is available at: http://is.gd/P3rzLw About Buttermilk Towne Center LLC Cincinnati, Ohio-based Buttermilk Towne Center, LLC, owns and operates a commercial real estate development, known as Buttermilk Towne Center, located in Crescent Springs, Kenton County, Kentucky. The Company filed for Chapter 11 bankruptcy protection (Bankr. E.D. Ky. Case No. 10-21162) on April 28, 2010. Timothy J. Hurley, Esq., Paige Leigh Ellerman, Esq., and Beth A. Silvers, Esq., at Taft Stettinius & Hollister LLP, serve as the Debtor's counsel. The Company disclosed $28,999,954 in assets and $41,085,856 in liabilities as of the Petition Date. BUTTERMILK TOWNE: Can Access BofA Cash Collateral Until Nov. 12 --------------------------------------------------------------- Judge Tracey N. Wise of the U.S. Bankruptcy Court for the Eastern District of Kentucky, Covington Division, has entered for the sixth time an order authorizing Buttermilk Towne Center, LLC to access its lender's cash collateral. Pursuant to the orders, Buttermilk can use cash collateral through Nov. 12, 2011. As adequate protection for any diminution in the value of Bank of America, N.A.'s interest in the cash collateral, BofA is granted replacement liens on all property of the Debtor. BofA will continue to receive monthly interest-only payments at the non-default rate as provided in the Sixth Budget. In addition, BofA will be paid $80,000 of the Excess Cash Collateral as provided in the Sixth Budget. A copy of the Sixth Cash Use Order is available at: http://is.gd/Uxz8aG A copy of the Fifth Cash Use Order is available at: http://ResearchArchives.com/t/s?7687 About Buttermilk Towne Center LLC Cincinnati, Ohio-based Buttermilk Towne Center, LLC, owns and operates a commercial real estate development, known as Buttermilk Towne Center, located in Crescent Springs, Kenton County, Kentucky. The Company filed for Chapter 11 bankruptcy protection (Bankr. E.D. Ky. Case No. 10-21162) on April 28, 2010. Timothy J. Hurley, Esq., Paige Leigh Ellerman, Esq., and Beth A. Silvers, Esq., at Taft Stettinius & Hollister LLP, serve as the Debtor's counsel. The Company disclosed $28,999,954 in assets and $41,085,856 in liabilities as of the Petition Date. CAFE U&I: Files for Chapter 7 Bankruptcy ---------------------------------------- Vanessa Small at the Washington Post reports that Cafe U&I Inc. at 7031 Little River Turnpike, Suite 14-C, filed for Chapter 7 protection (Bankr. E.D. Va. Case No. 11-16428). Attorney James Victory represents the Company. He can be reached at Tel No. (703) 333-2005. The Company estimated assets of less than $50,000, and liabilities between $100,000 and $500,000. The Company owes $65,000 to its largest unsecured creditor, Great World Plaza. CARGO TRANSPORTATION: Trustee Drops Bid to Dismiss Chapter 11 Case ------------------------------------------------------------------ Pete Brush at Bankruptcy Law360 reports that Cargo Transportation Services Inc. dodged a bullet Monday after the U.S. trustee overseeing the Debtor's Chapter 11 backed away from a motion to dismiss the case that said the debtors hadn't paid fees or filed operating reports. On Aug. 23, U.S. Trustee Donald F. Walton told U.S. Bankruptcy Judge Michael G. Williamson that CTS was late with legally required fees and operating reports for May, June and July, triggering a response from the Debtor, Law360 says. About Cargo Transportation Sunrise, Florida-based Cargo Transportation Services, Inc., provides transportation services to clients nationwide, including customized consolidation, distribution, logistics and warehousing services. It has 140 employees and averages $100,000,000 in gross revenue per year. Cargo Transportation filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 11-00432) on Jan. 12, 2011. Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, serves as the Debtor's bankruptcy counsel. Jennis & Bowen, P.L., serves as substitute counsel. 1 Source Partners Inc. and Accell Audit & Compliance P.A., serve as the Debtor's certified public accountants. Donald F. Walton, U.S. Trustee for Region 21, appointed an Official Committee of the Official Committee of Unsecured Creditors in the Debtor's case. Hunton & Williams LLP represents the Committee in the Chapter 11 proceedings. DLA Piper is general counsel for the Committee. The Debtor disclosed $11,728,760 in assets, and $11,869,375 in liabilities as of the Chapter 11 filing. CHARLESTON ASSOCIATES: Can Access BofA Cash Until Oct. 31 --------------------------------------------------------- Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware approved the tenth stipulation authorizing Charleston Associates, LLC's limited use of cash collateral of Bank of America, National Association through Oct. 31, 2011, in accordance with a budget. BofA is granted liens in the assets of the Debtor's estate to the same extent, and with the same validity and priority, as its prepetition liens on those assets. The Parties agree to continue the final hearing on the Debtor's continued use of cash collateral until an omnibus hearing date to be determined. A copy of the tenth stipulation is available for free at: http://bankrupt.com/misc/charleston.tenthccstipulation.pdf 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. CIMA LLC: Schedules and Statement Due Tomorrow ---------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida previously entered an order extending until Sept. 15, 2011, CIMA, L.L.C.'s time to file its schedules of assets and liabilities, statement of financial affairs and list of equity security holders. In the request for an extension until Sept. 15, the Debtor stated that it has assembled the majority of the information necessary to file the schedules. About CIMA LLC Based in Ft. Lauderdale, Florida, CIMA, L.L.C., is the developer and current owner of a 200-acre parcel of land located in Mobile, Alabama, with frontage on Interstate 10, a major thoroughfare. The parcel has been subdivided into parcels, and some infrastructure work has been done. CIMA is finalizing plans with one or more investor groups for further development of this parcel. CIMA filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-33279) on Aug. 22, 2011. Judge Raymond B. Ray presides over the case. Leslie Gern Cloyd, Esq. at Berger Singerman, P.A. represents the Debtor in its restructuring effort. In its petition, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in debts. The petition was signed by J. Marion Uter, manager. CIMA LLC: Creditors Have Until Dec. 22 to File Proofs of Claim -------------------------------------------------------------- The U.S. Bankruptcy for the Southern District of Florida has set Dec. 22, 2011, as the last day for any individual or entity to file proofs of claim against CIMA, L.L.C. The Court also set Nov. 22, as the deadline to file a complaint to determine dischargeability of certain debts. About CIMA LLC Based in Ft. Lauderdale, Florida, CIMA, L.L.C., is the developer and current owner of a 200-acre parcel of land located in Mobile, Alabama, with frontage on Interstate 10, a major thoroughfare. The parcel has been subdivided into parcels, and some infrastructure work has been done. CIMA is finalizing plans with one or more investor groups for further development of this parcel. CIMA filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-33279) on Aug. 22, 2011. Judge Raymond B. Ray presides over the case. Leslie Gern Cloyd, Esq. at Berger Singerman, P.A. represents the Debtor in its restructuring effort. In its petition, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in debts. The petition was signed by J. Marion Uter, manager. CLAUDIO OSORIO: Starting Bid for Mansion at $10.5 Million --------------------------------------------------------- The Denver Business Journal reports that a Miami Beach mansion -- ,699-square-foot, nine-bedroom estate, at 15 Star Island Drive on the shore of Biscayne Bay -- that Denver oilman Thomas H. Morgan had tried to buy for $10 million will be auctioned on Nov. 3, 2011, with a starting bid of $10.5 million. The report notes the listing price is $14.9 million. The asset is being sold on behalf of Florida businessman Claudio Osorio. About InnoVida and C. Osorio Receiver Mark S. Meland, at Meland Russin & Budwick, PA, filed a Chapter 11 petition for InnoVida Holdings, LLC, fdba COEG, LLC (Bankr. S.D. Fla. Case No. 11-17702) on March 24, 2011. Separate Chapter 11 petitions were also filed for these affiliates: InnoVida MRD, LLC (Case No. 11-17704), InnoVida Services, Inc. (Case No. 11-17705), and InnoVida Southeast, LLC (Case No. 11- 17706). Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., serves as bankruptcy counsel. InnoVida Holdings has under $50,000 in assets and $10 million to $50 million in debts, according to the petition. Founder Claudio Eleazar and Amarilis Osorio filed a separate Chapter 11 petition (Bankr. S.D. Fla. Case No. 11-17075) on March 17, 2011. Mr. Osorios is being accused of fraud and mismanagement. Bankruptcy Judge Robert A. Mark in Miami authorized the appointment of Mark S. Meland as trustee for InnoVida. Mr. Meland, who had been serving as a receiver for the business in the wake of the allegations against Mr. Osorio, was the one who ushered InnoVida into bankruptcy. According to DBR, the ruling paved the way for the federal bankruptcy watchdog assigned to the case to place Mark S. Meland in the role. Mr. Meland, who had been serving as a receiver for the business in the wake of the allegations against Mr. Osorio, was the one who ushered InnoVida into bankruptcy on March 24. CUMULUS MEDIA: Election Form Submission Deadline Moved to Sep. 15 ----------------------------------------------------------------- Cumulus Media Inc. and Citadel Broadcasting Corporation announced the extension of the deadline for holders of Citadel common stock or warrants to purchase Citadel common stock to deliver their election forms to elect the form of consideration they wish to receive in the previously announced merger of a subsidiary of Cumulus Media with and into Citadel, pursuant to which Citadel will become an indirect wholly-owned subsidiary of Cumulus Media, to U.S. Bank National Association, as exchange agent, to 5:00 p.m., New York City time, on Thursday, Sept. 15, 2011, unless further extended. With this extension, the Election Deadline now corresponds with the date of the special meeting of Citadel's stockholders to approve the Merger. Questions or requests for assistance, or requests for additional copies of election materials, may be directed to Georgeson Inc., the information agent for Cumulus Media in connection with the Merger. About Cumulus Media Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ: CMLS) -- http://www.cumulus.com/-- is the second largest radio broadcaster in the United States based on station count, controlling 350 radio stations in 68 U.S. media markets. In combination with its affiliate, Cumulus Media Partners, LLC, the Company believes it is the fourth largest radio broadcast company in the United States when based on net revenues. The Company's balance sheet at June 30, 2011, showed $367.20 million in total assets, $689.67 million in total liabilities, and a $322.47 million total stockholders' deficit. * * * Standard & Poor's Ratings Services said April it raised its corporate credit rating on Atlanta-based Cumulus Media Inc. to 'B' from 'B-'. "The rating remains on CreditWatch, where we placed it with positive implications Feb. 18, 2011," S&P stated. Moody's Investors Service in April upgraded Cumulus Media's Corporate Family Rating to B1 from Caa1 due to the company's pending acquisition of CMP Susquehanna Corp. in the second quarter of 2011 followed by the announced $2.4 billion acquisition of Citadel Broadcasting Corporation later this year. DEB SHOPS: Files Schedules of Assets and Liabilities ---------------------------------------------------- Deb Shops, Inc. (PA) filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $214,536,72 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $196,519,916 E. Creditors Holding Unsecured Priority Claims $8,205,137 F. Creditors Holding Unsecured Non-priority Claims $231,776,041 ----------- ----------- TOTAL $214,536,722 $436,501,094 A full-text copy of the schedules is available for free at: http://bankrupt.com/misc/DSiHOLDINGS_debssal.pdf DSI Holdings, Inc., also filed its schedules disclosing $0 in assets and $225,930,167 in liabilities as of the Chapter 11 filing. A full-text copy of the schedules is available for free at: http://bankrupt.com/misc/DSIHOLDINGS_sal.pdf About Deb Shops Deb Shops Inc., is a closely held women's-clothing retailer based in Philadelphia. Deb Shops sells junior and large-size clothing for girls and women ages 13 to 25 through more than 320 U.S. stores and through debshops.com. It was bought out by the New York investment firm Lee Equity Partners in October 2007. DSI Holdings Inc. and 54 affiliates, including Deb Shops, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 11-11941), on June 26, 2011, to sell all assets under 11 U.S.C. Sec. 363. As of April 30, 2011, the Debtors' unaudited financial statements reflected assets totaling $124.4 million and liabilities totaling $270.1 million. Lawyers at Weil Gotshal & Manges LLP and Richards, Layton & Finger P.A. serve as bankruptcy counsel. Rothschild Inc. serves as the Debtors' investment banker and financial advisors. Kurtzman Carson Consultants, LLC, serves as claims agent. Sitrick & Company serves as public relations consultants. Ableco, the DIP Agent is represented by Michael L. Tuchin, Esq., and David A. Fidler, Esq., at Klee Tuchin Bogdanoff & Stern LLP. Conway Del Genio serves as financial advisors to the First Lien Lenders. Schulte Roth serves as corporate and tax advisors to the First Lien Lenders. Another lender, Lee DSI Holdings, is represented by Jennifer Rodburg, Esq., at Fried Frank Harris Shriver & Jacobson LLP. Roberta A. Deangelis, U.S. Trustee for Region 3, appointed five unsecured creditors to serve on the Official Committee of Unsecured Creditors. Otterbourg Steindler Houston & Rosen serves as lead counsel to the Committee. DESERT OASIS: Could Exit Bankruptcy by Year End ----------------------------------------------- Judge Bruce A. Markell of the U.S. Bankruptcy Court for the District of Nevada gave Desert Oasis Apartments, LLC, the go signal to commence solicitation of votes for their Plan of Reorganization after approving the explanatory disclosure statement on Sept. 6, 2011. The Debtor's Amended Plan, filed Sept. 2, provides for one class of priority claims; one class of secured claims; one class of unsecured claims; and one class of equity security holders. Under the Plan, the rights of tenants of the Debtor's apartment complex in Las Vegas are unimpaired. Wells Fargo Bank, N.A., as trustee for the Registered Holders of JPMorgan Chase Commercial Mortgage Pass-Through Certificates, Series 2004-FL1, will receive distributions which the proponent of the Plan has valued at 100 cents on the dollar. The Plan proposes to pay the Bank's claim in full over a period of 10 years using the rental income from Tenants to pay interest at the rate of 4.5% per annum interest and principal amortized over 25 years and a balloon payment on or before 10 years. The final payment will be accomplished through sale or refinancing as the mortgage markets become more normal. Tenants with priority claims for deposits will be paid 100% in the normal course of operation of the apartment complex. Under the Plan, the unsecured claim of Tom Gonzales is unimpaired. Under the Plan, the unsecured creditors, except insiders, will be paid over 11 months without interest. Under the Plan, insiders will agree to subordinate their claims to the claims of other unsecured creditors. The Plan also provides for the 100% payment of all other administrative, including fees payable to the Office of the United States Trustee, and priority claims upon confirmation. Hearings to consider confirmation of the Plan will be held on Dec. 2, 2011, at 9:30 a.m., to be continued to Dec. 16, 2011, at 9:30 a.m. Deadline to file objections to confirmation is Nov. 9. The Debtor will file a reply memorandum in support of confirmation on Nov. 23. All parties intending to introduce expert testimony at the confirmation hearing will exchange their expert's reports (including those regarding value of the property of the estate and the appropriate interest to be allowed) on Sept. 30. All parties intending to introduce expert testimony at the confirmation hearing will make their experts available for examination under oath between Sept. 22 and Oct. 25. The deadline for filing of ballots is Oct. 19. The deadline for filing the ballot summary and a memorandum in support of confirmation is October 26. A full-text copy of the Disclosure Statement, amended Sept. 2, is available for free at http://ResearchArchives.com/t/s?76e3 About Desert Oasis Apartments Desert Oasis Apartments LLC owns a garden-style apartment complex situated across the boulevard from the Mandalay Bay Resort. The apartment complex is valued at least $6,500,000. Secured creditor Wells Fargo set a trustee's sale on the apartment complex for May 11, 2011, but Desert Oasis sought bankruptcy protection (Bankr. D. Nev. Case No. 11-17208) the day before the sale. Lenard E. Schwartzer, Esq., at Schwartzer & McPherson Law Firm, serves as the Debtor's bankruptcy counsel. The Company disclosed $18,067,242 in assets and $20,291,316 in liabilities as of the Chapter 11 filing. DILLARDS INC: Moody's Upgrades Corporate Family Rating to 'B1' -------------------------------------------------------------- Moody's Investors Service upgraded Dillard's, Inc. long term ratings including its Corporate Family Rating to B1 from B2. The upgrade reflects Dillard's increasing sales and operating income and Moody's opinion that its credit metrics will remain good. The rating outlook is stable. RATINGS RATIONALE . These ratings are upgraded: For Dillard's, Inc. Corporate Family Rating to B1 from B2 Probability of Default Rating to B1 from B2 Senior unsecured notes to B2 (LGD 4, 67%) from B3 (LGD 4, 68%) Subordinanted notes to B3 (LGD 6, 95%) from Caa1 (LGD 6, 95%) For Dillard's Capital Trust I $200 million preferred stock to B3 (LGD 6, 95%) from Caa1 (LGD 6, 95%) Dillard's B1 rating reflects its good credit metrics and its very good liquidity, factors that would support a higher rating. However, Dillard's rating is constrained by its history of inconsistent operating performance. Comparable store sales and earnings have been strong recently, driven by improvements in merchandising, inventory management, and expense management. Yet, Dillard's has experienced a prolonged decline in comparable store sales from 2000 to 2009. In addition, during those years Dillard's experienced a wide variability in its operating earnings even in years of economic strength. The B1 indicates Moody's belief that the improvements in inventory management and expense savings are sustainable. It also indicates that Dillard's merchandising improvements have not yet been consistently applied across all departments and merchandise categories possibly resulting in inconsistent performance going forward. Furthermore, ratings are constrained by the uncertainty around Dillard's medium to longer term capital structure and its future intentions with its real estate investment trust ("REIT") subsidiary. Although Dillard's has not announced any near term transactions involving the REIT, Moody's believes the formation of the REIT raises the level of uncertainty around Dillard's financial policy and tolerance for incremental debt over the medium term. The stable outlook expresses some tolerance for modest fluctuation in Dillard's performance in a range where credit metrics will remain good. It also factors in the risk that Dillard's financial policy may change to being moderately more shareholder friendly but that its current level of performance provides sufficient cushion for it to still maintain good credit metrics. An upgrade would require a strong record going forward of operating and earnings consistency. Additionally, ratings could be upgraded should Moody's become comfortable that Dillard's financial policy, including transactions involving its REIT, will be managed such that credit metrics remain at levels appropriate for a higher rating. Quantitatively, the company needs to maintain debt to EBITDA below 3.5 times and EBITA to interest expense above 2.25 times. Ratings could be downgraded should operating performance decline such that debt to EBITDA rises above 4.5 times or EBITA to interest expense falls below 1.75 times. Ratings could also be downgraded should Dillard's liquidity become weak or should financial policy become increasingly aggressive including transferring further properties to the REIT. The principal methodology used in rating Dillard's Inc was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Dillard's, Inc., is a regional department store chain operating 305 retail stores in 29 U.S. states with concentrations in the southwest, southeast, and Midwest. The company is headquartered in Little Rock, Arkansas. Revenues are about $6.2 billion. DYNEGY INC: Announces Tender Offer & Consent Solicitation Results ----------------------------------------------------------------- Dynegy Inc. announced, on behalf of its wholly-owned indirect subsidiary, Sithe/Independence Funding Corporation (Sithe), the results of the previously announced cash tender offer and consent solicitation for Sithe's 9% Secured Bonds due 2013. The consent solicitation sought to amend the indenture governing the Notes by eliminating certain restrictive covenants, certain events of default related to the Notes and certain other indenture provisions and to modify the provisions related to the satisfaction and discharge of the indenture. The results of the tender offer and consent solicitation, as of the consent date of 5:00 p.m., New York City time, on Sept. 9, 2011, are: * Notes: Sithe/Independence Funding Corporation's 9% Secured Bonds due 2013 * Principal Amount Outstanding: $191,687,012 * Amount of Notes Tendered (and not validly withdrawn): $191,088,414 * Approximate Percentage of Notes Tendered: 99.69% Based on the receipt of the requisite number of consents, the supplemental indenture effecting the proposed amendments has been executed. The right of holders to validly withdraw tendered Notes and validly revoke delivered consents expired upon execution of the supplemental indenture. Holders who have not yet tendered their Notes have until 11:59 p.m., New York City time, on Sept. 23, 2011, unless extended by Sithe (the Expiration Date), to tender their Notes pursuant to the tender offer. Any such holders who validly tender (and do not validly withdraw) their Notes on or prior to the Expiration Date will receive $1,080.80 per $1,000.00 principal amount of Notes, plus accrued and unpaid interest. On the initial payment date, which is expected to be Sept. 12, 2011, Sithe will accept for purchase, and will pay the total consideration for, all Notes that were validly tendered (and not validly withdrawn) in the tender offer on or prior to 5:00 p.m., New York City time, on Sept. 9, 2011. The Notes that remain outstanding after the initial payment date will be governed by the indenture, as amended by the supplemental indenture. In addition, Sithe intends to satisfy and discharge the indenture and all Notes on, or as promptly as practical following, the initial payment date, although holders of Notes will have the right to tender their Notes until the Expiration Date. Sithe has retained Credit Suisse Securities (USA) LLC to serve as the dealer manager (the Dealer Manager and Solicitation Agent) and D.F. King & Co., Inc., to serve as the depositary and information agent (the Depositary and Information Agent) for the tender offer and consent solicitation. Requests for documents, including the Offer to Purchase and Consent Solicitation Statement dated Aug. 26, 2011, (the Statement), may be directed to D.F. King & Co., Inc., by telephone at (212) 269-5550 (brokers and banks) or (800) 488-8095 (all others) or in writing at 48 Wall Street, 22nd Floor. New York, New York 10005. Questions regarding the Offer may be directed to Credit Suisse Securities (USA) LLC at (800) 820-1653 (toll free) or (212) 538-2147 (collect). 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. ELCOTEQ INC: Summoned to Answer Bankruptcy Allegations ------------------------------------------------------ Elcoteq, Inc., has been summoned to appear before the Bankruptcy Court in El Paso, Texas, to answer bankruptcy allegations hurled by creditors. An involuntary Chapter 11 petition (Bankr. W.D. Tex. Case No. 11- 31675) was filed against El Paso, Texas-based Elcoteq, Inc., dba Elcoteq Americas, on Aug. 31, 2011. Judge H. Christopher Mott oversees the case. Plasticos Promex U.S.A., Inc., owed $242,125; Textape Incorporated, owed $34,118; and Pallets and Crates International, owed $19,929, filed the petition. Corey W. Haugland, Esq., at James & Haugland, P.C., represents the petitioning creditors. ENER1 INC: Glancy Binkow Files Securities Class Suit ---------------------------------------------------- Glancy Binkow & Goldberg LLP disclosed that all persons or entities who purchased the securities of Ener1, Inc. between January 10, 2011 and August 15, 2011, inclusive, have until October 17, 2011 to file a motion with the Court to be appointed as Lead Plaintiff. The securities fraud class action lawsuit was filed in the United States District Court for the Southern District of New York. A copy of the Complaint is available from the court or from Glancy Binkow & Goldberg LLP. Please contact us by phone to discuss this action or to obtain a copy of the Complaint at (310) 201-9150 or Toll Free at (888) 773-9224, by email to shareholders@glancylaw.com, or visit our website at http://www.glancylaw.com. The Complaint charges Ener1 and certain of its executive officers and/or directors with violations of federal securities laws. Ener1 designs, develops and manufactures high-performance batteries and battery pack systems. In 2009 and 2010, Ener1 made separate investments in electric- vehicle manufacturer Think Global, AS and its majority owner Think Holdings, AS. The Complaint alleges that throughout the Class Period defendants made false and/or misleading statements and/or failed to disclose that, among other things: (1) Think Global lacked adequate operating capital, and the ability to raise capital, to continue operations; (2) as a result, Ener1 failed to timely impair the value of its Think Holdings investments; (3) as a result, the outstanding loans receivable and accounts receivable due from Think Holdings and Think Global were uncollectible; (4) as such, the Company's financial statements were misstated and its financial results were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); and (5), as a result, the Company's financial statements were materially false and misleading at all relevant times. On June 22, 2011, the Company disclosed that a material charge was required under GAAP applicable to Ener1 related to the loans receivable of Think Holdings and accounts receivable of Think Global held by Ener1, based on the announcement by Think Global that, following an extended and ultimately unsuccessful search for long-term financing, it would be filing for bankruptcy proceedings in the Norwegian courts on June 22, 2011. Ener1 estimated the amount of the charge would be $35.4 million, subject to change to the extent that the Company received any recovery as a result of the liquidation of Think Global, but any recovery, to the extent it occurred, would not likely be significant. Subsequently, on August 15, 2011, Ener1 disclosed that the Company's financial statements for the year ended December 31, 2010 and for the quarterly period ended March 31, 2011 should no longer be relied upon and should be restated. The determination was made following an assessment of certain accounting matters related to the loans receivable owed to Ener1 by Think Holdings and accounts receivable owed to Ener1 by Think Global held by the Company, and the timing of the recognition of the impairment charge related to the Company's investment in Think Holdings originally recorded during the quarter ended March 31, 2011. Glancy Binkow & Goldberg LLP is a law firm with significant experience in prosecuting class actions, substantial expertise in actions involving corporate fraud, and is representing Ener1 shareholders in this litigation. About Ener1 Inc. Ener1 Inc. (OTCBB: ENEI) -- http://www.ener1.com/-- has three business lines, which the company conducts through three operating subsidiaries. EnerDel, an 80.5% owned subsidiary, which is 19.5% owned by Delphi, develops Li-ion batteries, battery packs and components such as Li-ion battery electrodes and lithium electronic controllers for lithium battery packs. EnerFuel develops fuel cell products and services. NanoEner develops technologies, materials and equipment for nanomanufacturing. ENER1 INC: Charles Johnson Files Securities Class Action -------------------------------------------------------- Charles H. Johnson & Associates disclosed that a class action has been commenced in the United States District Court for the Southern District of New York on behalf of those who purchased Ener1, Inc. publicly traded securities during the period January 10, 2011 through August 15, 2011. If you are a member of the proposed Class, you may move the Court to serve as a lead plaintiff for the Class on or before October 17, 2011. You do not need to be a lead plaintiff in order to share in any recovery that may be obtained. In 2009 and 2010, Ener1 made separate investments in electric vehicle manufacturer Think Global, AS and its majority owner Think Holdings, AS, a Norwegian limited liability company. The Complaint alleges that throughout the Class Period Defendants knew or recklessly disregarded that their public statements concerning Ener1's business, operations and prospects were materially false and misleading. On June 22, 2011, the Company disclosed that a material charge was required under GAAP applicable to Ener1 related to the loans receivable of Think Holdings and accounts receivable of Think Global held by Ener1, based on the announcement by Think Global that, following an extended and ultimately unsuccessful search for long-term financing, it would be filing for bankruptcy proceedings in the Norwegian courts on June 22, 2011. Ener1 estimated the amount of the charge would be $35.4 million, subject to change to the extent that the Company received any recovery as a result of the liquidation of Think Global, but any recovery, to the extent it occurred, would not likely be significant. On August 15, 2011, Ener1 disclosed that the Company's financial statements for the year ended December 31, 2010 and for the quarterly period ended March 31, 2011 should no longer be relied upon and should be restated. The determination was made following an assessment of certain accounting matters related to the loans receivable owed to Ener1 by Think Holdings and accounts receivable owed to Ener1 by Think Global held by the Company, and the timing of the recognition of the impairment charge related to the Company's investment in Think Holdings originally recorded during the quarter ended March 31, 2011. About Ener1 Inc. Ener1 Inc. (OTCBB: ENEI) -- http://www.ener1.com/-- has three business lines, which the company conducts through three operating subsidiaries. EnerDel, an 80.5% owned subsidiary, which is 19.5% owned by Delphi, develops Li-ion batteries, battery packs and components such as Li-ion battery electrodes and lithium electronic controllers for lithium battery packs. EnerFuel develops fuel cell products and services. NanoEner develops technologies, materials and equipment for nanomanufacturing. ENER1 INC: Lieff Cabraser Investigates Potential Illegal Conduct ---------------------------------------------------------------- The law firm of Lieff Cabraser Heimann & Bernstein, LLP is investigating potential illegal conduct as alleged in class action lawsuits brought on behalf of purchasers of the securities of Ener1, Inc. between January 10, 2011 and August 15, 2011, inclusive. If you purchased Ener1 securities during the Class Period, you may move the Court for appointment as lead plaintiff by no later than October 17, 2011. A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. Your share of any recovery in the action will not be affected by your decision of whether to seek appointment as lead plaintiff. You may retain Lieff Cabraser, or other attorneys, as your counsel in the action. Ener1 shareholders who wish to learn more about the action and how to seek appointment as lead plaintiff should click here or contact Sharon Lee of Lieff Cabraser toll-free at (800) 541-7358. Background Securities Class Litigation The actions are brought against Ener1 and certain of its officers and directors for violations of the Securities Exchange Act of 1934. Ener1, headquartered in New York, New York, designs, develops and manufactures high-performance batteries and battery pack systems. In 2009 and 2010, Ener1 made separate investments in electric vehicle manufacturer Think Global, AS ("Think Global") and its majority owner Think Holdings, AS ("Think Holdings"). The Complaint alleges that throughout the Class Period, defendants failed to disclose: (1) that Think Global lacked adequate capital to continue operations; (2) the Company failed to timely impair the value of its Think Holdings investments; (3) the outstanding loans receivable and accounts receivable due from Think Holdings and Think Global were uncollectible; and (4) the Company's financial statements were materially misstated and its financial results were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"). On June 22, 2011, the Company disclosed that a material charge was required under GAAP applicable to Ener1 related to the loans receivable of Think Holdings and accounts receivable of Think Global on the basis of Think Global's announcement that it will file bankruptcy proceedings in Norwegian courts on June 22, 2011. Ener1 estimated that the amount of the charge would be $35.4 million, but was subject to change to the extent that the Company received any recovery as a result of the liquidation of Think Global. On August 9, 2011, after the market closed, the Company disclosed accounting errors related to loans receivable of Think Holdings and accounts receivable of Think Global held by Ener1. Ener1 indicated that it would not be able to timely file its second quarter 2011 Form 10-Q. On this news, the price of Ener1 shares fell $0.08 or 9.6%, to close at $0.75 on August 10, 2011. On August 15, 2011, Ener1 disclosed that the Company's financial statements for the year ended December 31, 2010 and for the quarterly period ended March 31, 2011 should no longer be relied upon and should be restated. The determination was made following an assessment of certain accounting matters related to the loans receivable owed to Ener1 by Think Holdings and accounts receivable owed to Ener1 by Think Global held by the Company, and the timing of the recognition of the impairment charge related to the Company's investment in Think Holdings originally recorded during the quarter ended March 31, 2011. On this news, shares of Ener1 fell another $0.33 per share, or 42.31%, to close on August 16, 2011, at $0.45 per share, on unusually heavy volume. About Lieff Cabraser Lieff Cabraser Heimann & Bernstein, LLP, with offices in San Francisco, New York and Nashville, is a nationally recognized law firm committed to advancing the rights of investors and promoting corporate responsibility. Since 2003, the National Law Journal has selected Lieff Cabraser as one of the top plaintiffs' law firms in the nation. In compiling the list, the National Law Journal examined recent verdicts and settlements in addition to overall track records. Lieff Cabraser is one of only two plaintiffs' law firms in the United States to receive this honor for the last eight consecutive years. ENER1 INC: Pomerantz Law Leads Securities Class Action Suit ----------------------------------------------------------- Shareholders of Ener1, Inc. are reminded of the securities class action lawsuit filed against Ener1 and certain of its officers. The class action (Civil Action No. 11 Civ. 5795) in the United States Southern District Court of New York is on behalf of a class consisting of all persons or entities who purchased Ener1 securities between January 10, 2011 and August 15, 2011, both dates inclusive. The Complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act, 15 U.S.C. Sections 78j(b) and 78t(a); and SEC Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R. Section 240.10b-5. If you are a shareholder who purchased Ener1 securities during the Class Period, you have until October 17, 2011 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the complaint can be obtained at http://www.pomerantzlaw.com/ To discuss this action, contact Rachelle R. Boyle at rrboyle@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, x350. The Complaint charges Ener1 and certain of its executive officers and/or directors with violations of federal securities laws. Ener1 designs, develops and manufactures high-performance batteries and battery pack systems. In 2009 and 2010, Ener1 made separate investments in electric-vehicle manufacturer Think Global, AS and its majority owner Think Holdings, AS. The Complaint alleges that throughout the Class Period defendants made false and/or misleading statements and/or failed to disclose that, among other things: (1) Think Global lacked adequate operating capital, and the ability to raise capital, to continue operations; (2) as a result, Ener1 failed to timely impair the value of its Think Holdings investments; (3) as a result, the outstanding loans receivable and accounts receivable due from Think Holdings and Think Global were uncollectible; (4) as such, the Company's financial statements were misstated and its financial results were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); and (5), as a result, the Company's financial statements were materially false and misleading at all relevant times. On June 22, 2011, the Company disclosed that a material charge was required under GAAP applicable to Ener1 related to the loans receivable of Think Holdings and accounts receivable of Think Global held by Ener1, based on the announcement by Think Global that, following an extended and ultimately unsuccessful search for long-term financing, it would be filing for bankruptcy proceedings in the Norwegian courts on June 22, 2011. Ener1 estimated the amount of the charge would be $35.4 million, subject to change to the extent that the Company received any recovery as a result of the liquidation of Think Global, but any recovery, to the extent it occurred, would not likely be significant. On this news, shares of Ener1 declined $0.07 per share, more than 5%, on unusually heavy volume, and further declined $0.16 per share, or 12.4%, to close on June 23, 2011, at $1.13 per share, also on unusually heavy volume. Subsequently, on August 15, 2011, Ener1 disclosed that the Company's financial statements for the year ended December 31, 2010 and for the quarterly period ended March 31, 2011 should no longer be relied upon and should be restated. The determination was made following an assessment of certain accounting matters related to the loans receivable owed to Ener1 by Think Holdings and accounts receivable owed to Ener1 by Think Global held by the Company, and the timing of the recognition of the impairment charge related to the Company's investment in Think Holdings originally recorded during the quarter ended March 31, 2011. On this news, shares of Ener1 declined $0.33 per share, or 42.31%, to close on August 16, 2011, at $0.45 per share, on unusually heavy volume. The Pomerantz Firm, with offices in New York, Chicago and Washington, D.C., is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. About Ener1 Inc. Ener1 Inc. (OTCBB: ENEI) -- http://www.ener1.com/-- has three business lines, which the company conducts through three operating subsidiaries. EnerDel, an 80.5% owned subsidiary, which is 19.5% owned by Delphi, develops Li-ion batteries, battery packs and components such as Li-ion battery electrodes and lithium electronic controllers for lithium battery packs. EnerFuel develops fuel cell products and services. NanoEner develops technologies, materials and equipment for nanomanufacturing. EXTENDED STAY: Trust Sues Blackstone for $8-Bil. Over Buyout ------------------------------------------------------------ Blackstone Group LP and its co-defendants said the Extended Stay Inc. litigation trustee's objection does not provide any basis why the lawsuits he filed in connection with the 2007 sale of Extended Stay should not be consolidated. Hobart Truesdell, who administers the litigation trust created for Extended Stay's creditors pursuant to the hotel chain's restructuring plan, previously opposed the proposed consolidation of the lawsuits, saying it is premature in light of the pending motions for the transfer of one of the lawsuits to the New York Supreme Court. In court papers, Paul Basta, Esq., at Kirkland & Ellis LLP, in New York, on behalf of Blackstone rejected the litigation trustee's argument that the proposed consolidation is premature. Even if the Bankruptcy Court authorized the transfer of the lawsuit to another court, he pointed out, that lawsuit would be litigated separately. Mr. Basta also disputed the litigation trustee's contention that there are no common issues of law because "there is not a single overlapping claim" among the lawsuits. "It would make no sense," Mr. Basta said, "for the trustee to bring the exact same cause of action against the exact same defendants in multiple complaints. The trustee cannot evade consolidation through artful pleading, particularly where there are substantially overlapping issues of law and fact." Mr. Basta maintained that the lawsuits involve overlapping "factual issues" since they all challenge the same transaction, which is the 2007 sale of Extended Stay. Lightstone Group LLC, Wachovia Bank N.A., and Archon Group L.P. also criticized the litigation trustee's objection to the suit consolidation. Lightstone said the litigation trustee did not give a convincing reason why he is still fighting to keep the "duplicative actions" in multiple courts. It further argued that all the facts necessary to resolve each of the complaints are identical. For their part, Wachovia Bank and Archon Group argued that the lawsuits involve "common questions of law and fact" and that consolidating them "would promote judicial economy." Archon Group also said it was wrongfully named as a defendant in the lawsuit under Case No. 11-02259 and that it reserves its rights to seek dismissal from the lawsuit. The lawsuit labels certain defendants including Archon Group as "subsequent defendant interest holders in mezzanine loan" and alleges that they hold "wrongfully incurred mezzanine debt." Archon Group clarified that it has never been a holder of any portion of Extended Stay's mezzanine debt, and has never received any payment in connection with the mezzanine debt. Blackstone Opposes Motion to Withdraw Reference In a separate court filing, the Blackstone defendants asked the Bankruptcy Court to deny approval of the motion to withdraw the reference of the Lawsuits, saying the litigation trustee failed to satisfy the statutory requirements for withdrawal. Richard Cieri, Esq., at Kirkland & Ellis LLP, in New York, said the litigation trustee did not provide analysis of how the Supreme Court case known as Stern v. Marshall applies to the claims in the lawsuits and why the decision in the Stern case warrants withdrawing the reference in any of the lawsuits. The Stern case, a controversial case involving the estates of Anna Nicole Smith, is said to have limited bankruptcy courts' constitutional authority to enter final judgment against third-parties on pre-bankruptcy state law claims under certain circumstances. The Supreme Court's decision in Stern does not warrant either mandatory or permissive withdrawal, Mr. Cieri argued. "Withdrawing the reference is mandatory only if resolution of the proceeding requires consideration of both Title 11 and other laws of the United States regulating organizations or activities affecting interstate commerce," Mr. Cieri said. He further said that permissive withdrawal is appropriate only "for cause shown." The Blackstone group drew support from other defendants including PGRT ESH, Arbor ESH II LLC, and Ashford Hospitality Finance LP. They argued that the reference withdrawal motion is premature and that the Stern case does not require either mandatory or permissive withdrawal of the reference. In court papers, Wachovia also criticized the litigation trustee's motion to withdraw reference, saying it merely hinges on an argument that the Supreme Court's decision in the Stern case compels mandatory and permissive withdrawal. Counsel to Wachovia, Rachel Wertheimer, Esq., at Morrison & Foerster LLP, in New York, said that the lawsuit against Wachovia asserts only fraudulent conveyance and preferential transfer claims against creditors who have filed proofs of claim against Extended Stay. Ms. Wertheimer further argued that the Supreme Court's decision does not support the conclusion that the Bankruptcy Court lacks authority to enter final judgments in fraudulent conveyance and preferential transfer claims against creditors particularly those involving avoidance claims under the Bankruptcy Code. The litigation trustee failed to show, Ms. Wertheimer contended, that there is "sufficient cause" for permissive withdrawal and did not identify any claim that would require the Bankruptcy Court to consider federal non-bankruptcy law "regulating organizations or activities affecting interstate commerce" to support mandatory withdrawal. Archon Group, KeyBank N.A., Ashford Hospitality, and U.S. Bank N.A. also filed court papers supporting the arguments raised by Wachovia. U.S. Bank said that it has plans to file a motion to dismiss the lawsuit filed by the litigation trustee against the bank under Case No. 11-05864. Litigation Trustee Defends Proposed Transfer of State Court Action Mr. Truesdell, as litigation trustee, asserted that the Blackstone defendants' contention that the lawsuits are "inextricably intertwined" and that all the lawsuits turn on the single allegation that the 2007 sale left Extended Stay insolvent has no bearing on the proposed transfer of the state court action back to the Supreme Court. "Each case asserts separate claims requiring proof of separate legal elements under different laws against mostly separate defendants," Mr. Truesdell said in a court filing. "The [Bankruptcy Court] should reject the Blackstone defendants' effort to collapse all of the plaintiff's lawsuits into a single lawsuit, which would only create prejudice and confusion," the litigation trustee said. Mr. Truesdell further argued that the Bankruptcy Court did not retain exclusive jurisdiction over the state court action under the terms of the restructuring plan and its prior order confirming the plan. Meanwhile, in a September 7 letter to Judge James Peck, the Blackstone defendants informed the bankruptcy judge about a recent decision handed down by the U.S. District Court for the Southern District of New York, which oversees a securities litigation involving Italian dairy conglomerate Parmalat Finanziaria S.p.A. The New York District Court decision, issued late last month, held that mandatory abstention under Section 1334(c)(2) of the Bankruptcy Code is inappropriate where the actions could have been filed in federal court based on supplemental jurisdiction over state law claims. In its decision, the District Court considered whether, pursuant to Section 1334(c)(2), it must abstain from considering various state law claims. The defendants argued that there was no basis for mandatory abstention because Section 1334 did not provide the sole basis for jurisdiction over the claims. The District Court agreed, finding that the state law claims "could have been commenced in federal court" pursuant to the District Court's supplemental jurisdiction" because those claims were based on a common nucleus of operative fact as federal securities claims pending in federal court. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors tapped Gilbert Backenroth, Esq., Mark T. Power, Esq., and Mark S. Indelicato, Esq., at Hahn & Hessen LLP, in New York, as counsel. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. has purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July 2010. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: Claims Objection Deadline Extended Until 2012 ------------------------------------------------------------ Hobart Truesdell asked the U.S. Bankruptcy Court for the Southern District of New York to extend the deadline for filing objections to claims in the cases of Extended Stay Inc.'s debtor affiliates through September 7, 2012. Mr. Truesdell administers the litigation trust created for Extended Stay creditors pursuant to the hotel chain's Chapter 11 plan of reorganization. As of August 23, 2011, about 2,000 claims asserting more than $9 billion were filed in the bankruptcy cases of Extended Stay Inc.'s affiliated debtors. Of these, more than 1,600 are general unsecured claims and claims arising under the $3.3 billion mezzanine loans. Lawyer for the litigation trustee, Elyssa Kates, Esq., at Baker & Hostetler LLP, in New York, said the litigation trustee needs additional time to pursue the resolution of alleged general unsecured claims and "mezzanine facilities" claims. "An extension is necessary to determine whether there will be any funds available for distribution to litigation trust beneficiaries so as to make the claims review process meaningful rather than wasteful," Ms. Kates said in a court filing. Judge James Peck will hold a hearing on September 15, 2011, to consider approval of the request. The bankruptcy judge earlier issued a bridge order extending the deadline until the entry of a court order determining the proposed extension. The proposed extension drew flak from Bank of America N.A., one of the banks that provided loans to Extended Stay under a 2009 mezzanine loan agreement. In court papers, Bank of America asked Judge Peck to deny the litigation trustee's request to the extent he seeks to extend the deadline to challenge the mezzanine facilities claims allowed under the restructuring plan. The restructuring plan, which took effect on October 8, 2010, provides for the treatment and allowance of mezzanine facilities claims in the sum of at least $3.3 billion. The allowance of those claims was required by BofA in order to obtain its support for the restructuring plan and the compromises embodied in the plan. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors tapped Gilbert Backenroth, Esq., Mark T. Power, Esq., and Mark S. Indelicato, Esq., at Hahn & Hessen LLP, in New York, as counsel. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. has purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July 2010. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: Litigation Trust Submits Report for 4th Quarter -------------------------------------------------------------- Hobart Truesdell, as litigation trustee, filed with the U.S. Bankruptcy Court for the Southern District of New York a copy of Extended Stay litigation trust's balance sheet as of December 31, 2010, and the related statements of operations and cash flows for the period from October 8 to December 31, 2010. A full-text copy of the financial reports is available without charge at http://bankrupt.com/misc/ESI_LitigationTrustFS.pdf Extended Stay Litigation Trust Balance Sheet As of December 31, 2010 Assets: Cash and cash equivalents $4,902,745 Deposits 1,000 ---------- Total Assets 4,903,745 Liabilities and Trust Equity Liabilities: Accrued expenses 129,150 ---------- Total liabilities 129,150 Trust equity: Trust corpus 4,774,595 ---------- Total trust equity 4,774,595 ---------- Total liabilities and trust equity $4,903,745 ========== Extended Stay Litigation Trust Statement of Operations & Changes in Trust Corpus For the Period October 8 to December 31, 2010 Revenue: Interest income $2,802 Expenses: Legal and professional fees 227,055 Storage fees 1,152 ---------- Total expenses 228,207 ---------- Loss (225,405) Trust corpus, beginning of period -- Contribution 5,000,000 ---------- Trust corpus, end of period $4,774,595 ========== Extended Stay Litigation Trust Statement of Cash Flows For the Period October 8 to December 31, 2010 Cash flows from operating activities: Loss ($225,405) Adjustments to reconcile net loss to net cash used in operating activities: Changes in assets and liabilities: (Increase) decrease in: Deposits (1,000) Increase (decrease) in: Accrued expenses 129,150 ---------- Net cash used in operating activities (97,255) Cash flows from financing activities: Contribution to trust corpus 5,000,000 ---------- Net increase in cash 4,902,745 Cash, beginning of the period -- ---------- Cash, end of the period $4,902,745 ========== About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors tapped Gilbert Backenroth, Esq., Mark T. Power, Esq., and Mark S. Indelicato, Esq., at Hahn & Hessen LLP, in New York, as counsel. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. has purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July 2010. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). FAITH CHRISTIAN: Can Employ Counts Real Estate Group as Realtor --------------------------------------------------------------- Faith Christian Family Church of Panama City Beach, Inc., sought and obtained permission from the Hon. Lewis M. Killian of the U.S. Bankruptcy Court for the Northern District of Florida to employ Jason P. Oakes of Counts Real Estate Group, Inc. as its realtor. Mr. Oakes will appraise and sell the real property owned by the Debtor. Mr. Oakes maintains that neither he nor CREG has no connection with the Debtor's creditors, or any other party-in-interest or its counsel. CREG is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code, he insists. Based in Panama City Beach, Florida, Faith Christian Family Church of Panama City Beach Inc., dba Faith Christian Family Church, is a not for profit corporation. The church filed for Chapter 11 bankruptcy protection (Bankr. N.D. Fla. Case No. 11-50288) on May 24, 2011. The Debtor disclosed $11,339,469 in assets, and $3,361,477 in debts as of the Chapter 11 filing. Charles M. Wynn, Esq., at Charles M. Wynn Law Offices, P.A., serves as the Debtor's bankruptcy counsel. The Court will convene a status hearing on Oct. 4, 2011 to consider adequacy of the disclosure statement, as amended, explaining the Debtors' Chapter 11 Plan of Reorganization. FALLS AT TOWNE: Court Dismisses Geneva Multi-Family Case -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Minnesota dismissed on Aug. 22, 2011, the Chapter 11 case of Geneva Multi-Family Exchange XIV, LLC. Any proof of claim filed in the Debtor's case will be deemed filed in the case of The Falls at Towne Crossing, LLC, Case No. 11-44563 without further action by the claim holder. The order dismissing the case is based on the agreement between The Falls at Towne Crossing, LLC, and Lender Broadstone Towne Crossing Property Owner LLC with respect to the motion of Broadstone for (I) relief from the automatic stay and (II) to dismiss the Debtor's case. As agreed, on or before 5:00 p.m. Central Standard Time on Oct. 17, 2011, the Debtor will file with the Bankruptcy Court a fully executed and complete copy of an agreement for the sale of the Property (the "Falls APA"). Further, on or before Sept. 19, 2011, the Debtor will provide the Lender with a written status report describing its efforts to sell the Property as of that date. If the Debtor does not file the APA on or before the APA Deadline, the automatic stay will, without further order of the Court, be lifted at 5:00 p.m. Central Standard Time on the day following the filing of an affidavit by counsel to the Lender stating that the APA was not filed by the APA deadline. About The Falls at Towne Crossing and Geneva Multi-Family Exchange XIV Geneva Multi-Family Exchange XIV, LLC, owns the 336-unit Falls at Towne Crossing apartment project in Mansfield, Texas. Geneva Multi-Family Exchange XIV and affiliate The Falls at Towne Crossing, LLC, c/o Exchange Realty Inc., based in Minneapolis, Minnesota, filed separate Chapter 11 bankruptcy petitions (Bankr. D. Minn. Case Nos. 11-44562 and 11-44563) on July 5, 2011. Judge Dennis D. O'Brien presides over the case. Geneva Multi-Family Exchange XIV LLC disclosed $25.5 million in assets and $24.3 million in debts in its petition. Falls at Towne Crossing estimated assets and debts of $10 million to $50 million. The petitions were signed by Duane H. Lund, chief manager. Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath Nauman & Tansey, at Minneapolis, Minnesota, represents the Debtor as counsel. FANNIE MAE: Regulator Considering Obama's Mortgage Plan ------------------------------------------------------- American Bankruptcy Institute reports that Fannie Mae and Freddie Mac are exploring ways to help homeowners refinance into cheaper mortgages, said the companies' regulator, who stopped short of a promise to deliver on a proposal from President Barack Obama. About Fannie Mae Federal National Mortgage Association, aka Fannie Mae, is a government-sponsored enterprise that was chartered by U.S. Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. The Company's balance sheet at Dec. 31, 2010 showed $3.222 trillion in total assets, $3.224 trillion in total liabilities and a $2.52 billion total deficit. Fannie Mae has been under conservatorship, with the Federal Housing Finance Agency acting as conservator, since September 6, 2008. As conservator, FHFA succeeded to all rights, titles, powers and privileges of the company, and of any shareholder, officer or director of the company with respect to the company and its assets. The conservator has since delegated specified authorities to Fannie Mae's Board of Directors and has delegated to management the authority to conduct day-to-day operations. The U.S. Department of the Treasury owns Fannie Mae's senior preferred stock and a warrant to purchase 79.9% of its common stock, and Treasury has made a commitment under a senior preferred stock purchase agreement to provide Fannie with funds under specified conditions to maintain a positive net worth. FGIC CORP: Has Three Superior Proposals for Ch. 11 Plan ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that FGIC Corp., whose prepackaged reorganization fell apart, disclosed having two and perhaps three proposals for a new Chapter 11 plan giving unsecured creditors more than the aborted plan. According to Bloomberg, the Debtor said in a court filing that it has received offers from "two potential plan sponsors." There also may be a third, FGIC said. The offers would all give unsecured creditors more than the failed plan proposal, FGIC said. The terms of the proposals weren't laid out. FGIC, Mr. Rochelle relates, will report on plan progress at a hearing Sept. 22 when it will seek an extension until Feb. 3 of the exclusive right to propose a Chapter 11 plan. Mr. Rochelle recounts that FGIC filed for reorganization in August 2010 with a plan under which creditors would become owners of the bond insurance subsidiary, Financial Guaranty Insurance Co. The plan became unfeasible when an exchange offer failed. FGIC is attempting to reorganize by using $4 billion in net tax-loss carryforwards. As before, FGIC's assets consist of $10 million cash, the insurance subsidiary, and the opportunity to use the tax losses. About FGIC Corp. New York-based FGIC Corporation is a privately held insurance holding company. FGIC Corp's main business interest lies in the holdings of the bond insurer Financial Guaranty Insurance Company -- http://www.fgic.com/-- and it depends on dividend payments by FGIC for sustaining its operations. FGIC had stopped paying dividends to parent FGIC Corp. since January 2008. FGIC Corp. filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-14215) on Aug. 3, 2010. The bond insurer subsidiary did not file for bankruptcy. Paul M. Basta, Esq., Brian S. Lennon, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to the Debtor. Garden City Group, Inc., is the Debtor's claims and noticing agent. The Official Committee of Unsecured Creditors tapped David Capucilli, Esq., at Morrison & Foerster LLP, in New York as its counsel. The Debtor disclosed $11,539,834 in assets and $391,555,568 in liabilities as of the Petition Date. FONTAINEABLEAU: Ch. 7 Trustee Proposes to Settle Avoidance Actions ------------------------------------------------------------------ Soneet R. Kapila, Fontainebleau Las Vegas Holdings' Chapter 7 trustee, asks the U.S. Bankruptcy Court for the Southern District of Florida to approve proposed procedures to allow him to settle avoidance actions. The Trustee believes it has certain causes of action against various persons or transferees for the receipt of payments alleged to be avoidable and recoverable under Sections 544, 545, 547, 548, and 550 of the Bankruptcy Code. Russell M. Blain, Esq., at Stichter Riedel Blain & Prosser, in Tampa, Florida, contends that in order to allow the Trustee to effectively and efficiently maximize the value of Avoidance Actions for the benefit of the estates, the Trustee seeks approval these procedures which will allow the Trustee to settle certain Avoidance Actions without the need for repeated hearings before the Court and without incurring the expenses related to further notice of compromise motions: a. for settlements of claims where the amount demanded is less than $100,000, no further Court approval will be required; b. for settlements of claims where the amount demanded is between $100,001 and $500,000, no further Court approval will be required if the settlement amount is equal to or greater than 65% of the amount demanded; c. for settlements of claims where the amount demanded is greater than $500,001, Court approval will be required; d. whenever Court approval is required by these procedures, the approval may be obtained in accordance with the applicable rules, including the Rules and the local rules of the Court permitting the use of negative notice; and e. notwithstanding the foregoing, the Trustee may seek further Court approval of any settlement they consider to be in the best interests of the estates. The approval may be obtained in accordance with the applicable rules, including the Rules and the local rules of the Court permitting the use of negative notice. The Trustee proposes these procedures upon the resolution of an adversary proceeding that does not require notice to creditors: a. each compromise will be the subject of a settlement agreement; b. in the event the defendant has filed an answer, the parties will file a joint motion for dismissal of the adversary proceeding and attach a copy of the settlement agreement as an exhibit to the joint motion; c. in the event that a defendant has not filed an answer, the Trustee will file a notice of voluntary dismissal and attach a copy of the settlement agreement as an exhibit to the notice; and d. in the event that a compromise results in an agreement by the defendant to waive its claim, a withdrawal of claim will be filed when the adversary is dismissed. Mr. Blain asserts that that the estates will be benefitted by the Trustee being allowed to settle certain Avoidance Actions in accordance with the Procedures. He adds that the procedures will allow for a more streamlined process with respect to the prosecution and compromise of Avoidance Actions. "If the Trustee is allowed to settle Avoidance Actions pursuant to the terms set forth in this Motion, it will reduce administrative fees and other expenses to the estates," Mr. Blain says. He notes that "the creditor matrix in these cases consists of over 635 parties." The Trustee proposes that the resolution of an adversary proceeding will be the subject of a settlement agreement, which will be in a form; a copy of which is available for free at: http://bankrupt.com/misc/AvAcCompSet.pdf Parties Respond In separate filings, these parties ask the Court not to grant the Trustee's request: -- TCS John Huxley America, Inc.; -- Avnet, Inc.; -- Bergman, Walls & Associates, Ltd., JBA Consulting Engineers, Inc., TMCx Nevada, LLC and YWS Architects, LLC; and -- Paul Steelman Design Group, Incorporated. The responding parties are transferees of alleged avoidable transfers. The Transferees tell the Court that their rights will be unfairly prejudiced in the event the Court approves and mandates the use of the form settlement agreement proposed by the Trustee. The form settlement agreement is overly one sided, the Transferees relate. They points out, for example, that the "creditor" expressly waives and releases any and all claims, known or unknown, against the Trustee or his counsel, while the "creditor" does not receive any release from the Trustee. If the Court is inclined to grant the Trustee's request, the Transferees ask the Court not to mandate the use of the form settlement agreement and allow the parties to negotiate a form of settlement agreement that is agreeable to the Parties. In another separate filing, Crown Equipment Corporation objected to the Settlement Form. Counsel for Crown Equipment, Patrick S. Scott, Esq., at Gray Robinson, in Fort Lauderdale, Florida, says that there is no reason for settlements of suits up to $100,000 -- and settlements of suits up to $500,000 where the recovery is at least 65% -- to be secret. Mr. Scott points out that notices of the settlements can be served in groups on a limited mailing list and filed with the Court at minimal expense and without sacrificing the obligations of the trustee under Rule 9019 of the Federal Rules of Bankruptcy Procedure. "It is neither impractical nor inefficient to provide creditors and the court with notice of the extent of the compromise of hundreds of suits filed by the trustee," Mr. Scott says. Crown Equipment argues that Rule 9019(b) of the Federal Rules of Bankruptcy Procedure was meant to deal with claims against the estate, or of very small claims by the estate like chargebacks, refunds, and rebates from vendors and customers. There is no reason to have a single form of settlement as a mandatory condition for defendants to engage in mediation or other settlement discussions in this case, Mr. Scott asserts. He notes that Crown Equipment has no objection to the Court's approval of the form as an acceptable form rather than a mandatory form. About Fontainebleau Las Vegas Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC and its units filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represented the Debtors in their restructuring effort. The Debtors' claims agent is Kurtzman Carson Consulting LLC. Attorneys at Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP, represent the Official Committee of Unsecured Creditors. Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. In February 2010, Icahn Enterprises L.P. acquired from Fontainebleau Las Vegas and certain affiliated entities, the Fontainebleau property and improvements thereon located in Las Vegas, Nevada, for an aggregate purchase price of around $150 million. The bankruptcy case was subsequently converted to Chapter 7. Soneet R. Kapila has been named the trustee for the Chapter 7 case of Fontainebleau Las Vegas. FONTAINEABLEAU: J. Soffer Wants Protective Order From 2004 Notices ------------------------------------------------------------------ Jeffrey Soffer, head of steer Turnberry Associates and son of the developer of the Fontainebleau Miami and unfinished Fontainebleau Las Vegas, asks the bankruptcy court for a protective order with respect to Fidelity National Title Insurance Company's and First American Title Insurance Company's notice of examinations under Rule 2004 of the Federal Rules of Bankruptcy Procedure in connection with the bankruptcy case of Fontainebleau Las Vegas Holdings LLC. On behalf of Mr. Soffer, James D. Gassenheimer, Esq., at Berger Singerman P.A., in Miami, Florida, contends that (i) Fidelity and First American are improperly attempting to utilize the broad scope of examination permitted under Rule 2004 to obtain documents they intend to use in pending state court litigation involving Mr. Soffer, and (ii) the extraordinarily overbroad scope of the documents requested necessarily implicates documents containing privilege, confidential, and sensitive materials belonging to Mr. Soffer. On April 5, 2010, Fidelity and First American, among others, commenced an action in Miami-Dade County Circuit Court against Mr. Soffer individually for negligence and negligent misrepresentation. "The scope of nature of the 2004 Notice leaves little doubt that Fidelity and First American intend to utilize the requested documents in their state court litigation against [Mr.] Soffer and the Debtors," Mr. Gassenheimer says. Mr. Gassenheimer points out that the 2004 Notice literally asks for every document in the possession of the Trustee or the Debtors. "It is inconceivable why Fidelity and First American would request this type of information from the Trustee except for use in their state court actions," Mr. Gassenheimer says. These types of extremely broad "fishing expeditions" are exactly the kind not permitted under Rule 2004, Mr. Gassenheimer asserts. He contends that the only proper mechanism for Fidelity and First American to seek to obtain the information is through properly formed requests propounded in the state court litigation, and subject to the narrower parameters of the governing rules of civil procedure. Accordingly, Mr. Soffer asks the Court to enter an order declaring that Fidelity and First American are precluded from utilizing Rule 2004 to obtain the requested documents, and quashing the 2004 Notice. About Fontainebleau Las Vegas Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC and its units filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represented the Debtors in their restructuring effort. The Debtors' claims agent is Kurtzman Carson Consulting LLC. Attorneys at Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP, represent the Official Committee of Unsecured Creditors. Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. In February 2010, Icahn Enterprises L.P. acquired from Fontainebleau Las Vegas and certain affiliated entities, the Fontainebleau property and improvements thereon located in Las Vegas, Nevada, for an aggregate purchase price of around $150 million. The bankruptcy case was subsequently converted to Chapter 7. Soneet R. Kapila has been named the trustee for the Chapter 7 case of Fontainebleau Las Vegas. FONTAINEABLEAU: J. Soffer Wants Insurers to Pay Defense Costs ------------------------------------------------------------- Jeffrey Soffer asks the bankruptcy court to lift the automatic stay, to the extent necessary or applicable, to permit National Union Fire Insurance Company of Pittsburgh, Pa., as insurer to Fontainebleau Las Vegas LLC, Fontainebleau Las Vegas Holdings LLC, and Fontainebleau Las Vegas Capital Corp., to follow the express terms of an insurance policy and pay certain defense costs incurred by certain of the Debtor's former directors and officers. National Union issued a directors and officers liability policy, styled as Executive and Organization Liability Insurance Policy to the Named Entity Fontainebleau Resorts, LLC covering the Policy Period from April 9, 2009, to April 9, 2010. The Policy's aggregate Limit of Liability is $15,000,000. The Policy also includes a retention clause requiring an Insured to satisfy the first $175,000 in Defense Costs, unless the Organization is unable to fund the Retention due to Financial Insolvency. On June 8, 2011, Soneet R. Kapila, the Debtors' Chapter 7 Trustee, filed an adversary proceeding against various individuals and entities against certain directors and officers of the Debtors. The directors and officers of the Debtors have reported the Adversary Proceeding to National Union and sought coverage for Defense Costs under the Policy. The individuals include, but are not necessarily limited to: -- Jeffrey Soffer, a member of Fontainebleau Las Vegas Capital Corp.'s Board of Directors; -- Albert Kotite, a member of Fontainebleau Las Vegas Capital Corp.'s Board of Directors; -- Glenn Schaeffer, former President of Fontainebleau Las Vegas Capital Corp.; -- Deven Kumar, former Senior Vice President of Development and Finance, Fontainebleau Las Vegas LLC; and -- James Freeman, former Treasurer of Fontainebleau Las Vegas Capital Corp. James D. Gassenheimer, Esq., at Berger Singerman P.A., in Miami, Florida, tells the Court that National Union has determined that Mr. Soffer, and the other individuals are entitled to coverage under the Policy. Accordingly, National Union wishes to honor its contractual obligations under the Policy, to pay Defense Costs pursuant to the terms of the Policy. Although not legally required, in an abundance of caution, Mr. Soffer is filing this request to the extent it applies to proceeds under the Policy, or to determine that it does not apply, Mr. Gassenheimer says. In a separate filing, Messrs. Freeman and Kumar join in Mr. Soffer's request to lift the automatic stay. About Fontainebleau Las Vegas Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- is constructing a luxury resort, Fontainebleu Las Vegas, on the northern end of the Las Vegas Strip. Fontainebleau Las Vegas Holdings, LLC and its units filed for Chapter 11 protection on June 9, 2009 (Bankr. S.D. Fla. Lead Case No. 09-21481). Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represented the Debtors in their restructuring effort. The Debtors' claims agent is Kurtzman Carson Consulting LLC. Attorneys at Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP, represent the Official Committee of Unsecured Creditors. Fontainebleau Las Vegas LLC listed more than $1 billion in debt and a similar amount in assets, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings, LLC, listed less than $50,000 in assets and more than $1 billion in debts. In February 2010, Icahn Enterprises L.P. acquired from Fontainebleau Las Vegas and certain affiliated entities, the Fontainebleau property and improvements thereon located in Las Vegas, Nevada, for an aggregate purchase price of around $150 million. The bankruptcy case was subsequently converted to Chapter 7. Soneet R. Kapila has been named the trustee for the Chapter 7 case of Fontainebleau Las Vegas. FREDDIE MAC: Regulator Considering Obama's Mortgage Plan -------------------------------------------------------- American Bankruptcy Institute reports that Fannie Mae and Freddie Mac are exploring ways to help homeowners refinance into cheaper mortgages, said the companies' regulator, who stopped short of a promise to deliver on a proposal from President Barack Obama. About Freddie Mac Based in McLean, Virginia, the Federal Home Loan Mortgage Corporation, known as Freddie Mac (OTCBB: FMCC) -- http://www.FreddieMac.com/-- was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters. Freddie Mac is under conservatorship and is dependent upon the continued support of Treasury and the Federal Housing Finance Agency acting as conservator to continue operating its business. FREESCALE SEMICONDUCTOR: Moody's Lifts Corporate to 'B2' -------------------------------------------------------- Moody's Investors Service upgraded the senior debt ratings of Freescale Semiconductor, Inc.'s -- Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to B2 from B3, senior secured debt to Ba3 from B1, and the senior notes to Caa1 from Caa2. Moody's also upgraded the Speculative Grade Liquidity Rating to SGL-1 from SGL-2. In a related action, Moody's assigned a Ba3 rating to Freescale's $425 million 5-year senior secured revolver, and affirmed the Caa2 rating on the senior subordinated notes. The rating outlook is stable. RATINGS RATIONALE "The rating upgrades reflect our expectation of further reduction in Freescale's financial leverage and improving liquidity, building on nearly $1 billion of debt repayments from cash proceeds from Freescale's initial public offering (IPO) and some cash," noted Gregory Fraser, Senior Analyst at Moody's Investors Service. Moody's estimates that Freescale's total debt to EBITDA (Moody's adjusted) was approximately 5.8x (pro forma as of July 1, 2011), down from 7.1x (April 1, 2011) as a result of the debt repayments. Over the next 12-18 months, Moody's expects Freescale will reduce leverage to the 4.5x-5x range via additional debt repayment and EBITDA expansion. Freescale used balance sheet cash plus total net proceeds of $838 million from the IPO to retire approximately $975 million of gross debt. The rating revision to B2 also considers Freescale's continued improvement in factory utilization to near 80% from higher product volumes (principally in automotive and wireless infrastructure markets). With the operating leverage in Freescale's fixed manufacturing cost base, profit and cash flow improved, which Moody's expects will continue over the near term. Moody's anticipates Freescale will generate considerably higher free cash flow in the range of $100 to $200 million over the next twelve months compared to $20 million in 2010. Combined with cost takeouts from past restructurings, Moody's expects Freescale to experience improved resilience in the next cyclical downturn. Strong design win momentum has led to increased product volumes, which combined with a better pricing environment has resulted in expanded margins and higher EBITDA. The B2 CFR is supported by Freescale's strong market leadership positions and rich product portfolio characterized by technological breadth, as well as its increasingly "asset-lite" operating model that allows it to quickly reduce expenses and capex in response to weak market conditions. These positives are tempered by the company's still high financial leverage, although expected to be consistent with other companies also rated at the B2 level, long lead time required to penetrate faster growth end markets, exposure to the highly volatile semiconductor industry and continued majority ownership by the private equity sponsor group. Although Moody's does anticipate improving free cash flow, free cash flow to total debt is likely to be modest in the 3-5% range, limiting the company's ability to de-lever quickly. The Speculative Grade Liquidity Rating was upgraded to SGL-1 reflecting Freescale's repayment of the entire $532 million of borrowings under the old revolving credit facility and availability of substantially all of its new $425 million revolver maturing 2016. Additional support is provided by Moody's expectation that solid free cash flow generation will supplement Freescale's $805 million in cash balances. Going forward, Moody's expects Freescale to maintain at least $600 million of cash. The stable rating outlook reflects Moody's expectation that Freescale will continue to experience good demand across its addressable end markets, exhibit solid operating profitability, generate higher levels of free cash flow and gradually de-lever. Ratings could be upgraded if Freescale continues to: (i) experience solid product volume growth; and (ii) increase revenues via effective R&D investments and product development resulting in a favorable product mix with a higher margin profile. Ratings may also experience upward pressure if Moody's expects lower financial leverage through EBITDA expansion or debt reduction resulting in sustained debt to EBITDA (Moody's adjusted) under 4.5x. Ratings could be downgraded if demand for Freescale's embedded processors weakened and earnings fell short of expectations for an extended timeframe (i.e., Moody's currently anticipates mid-single digit revenue growth and operating margins in the range of 15%- 20%), or debt-funded acquisitions and/or aggressive financial policies resulted in leverage above 6x total debt to EBITDA (Moody's adjusted) for a sustained period. Deterioration in liquidity due to weak free cash flow generation or cash balances below $600 million could also result in a downgrade. Assignments: $ 425 Million Senior Secured Revolving Credit Facility due July 2016 -- Ba3 (LGD-3, 31%) Rating Actions: Corporate Family Rating to B2 from B3 Probability of Default Rating to B2 from B3 Speculative Grade Liquidity Rating to SGL-1 from SGL-2 $2.222 Billion (originally $2.265 Billion) Senior Secured Extended Maturity Term Loan due 2016 to Ba3 (LGD-3, 31%) from B1 (LGD-3, 30%) $663 Million (originally $750 Million) 10.125% Senior Secured Notes due 2018 to Ba3 (LGD-3, 31%) from B1 (LGD-3, 30%) $1.380 Billion 9.25% Senior Secured Notes due 2018 to Ba3 (LGD-3, 31%) from B1 (LGD-3, 30%) $57 Million (originally $500 Million) Senior Unsecured Floating Rate Notes due 2014 to Caa1 (LGD-5, 81%) from Caa2 (LGD-5, 80%) $298 Million (originally $2.35 Billion) 8.875% Senior Unsecured Notes due 2014 to Caa1 (LGD-5, 81%) from Caa2 (LGD-5, 80%) $488 Million (originally $750 Million) 10.75% Senior Unsecured Notes due 2020 to Caa1 (LGD-5, 81%) from Caa2 (LGD-5, 80%) $750 Million 8.05% Senior Unsecured Notes due 2020 to Caa1 (LGD-5, 81%) from Caa2 (LGD-5, 80%) Ratings Affirmed: $764 Million (originally $1.6 Billion) 10.125% Senior Subordinated Notes due 2016 -- Caa2, LGD assessment revised to (LGD-6, 100%) from (LGD-6, 93%) The methodologies used in this rating were Principle Methodology Global Semiconductor Industry published in November 2009, and Principal Methodology Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Austin, TX, Freescale Semiconductor, Inc. designs and manufactures embedded semiconductors for the automotive, networking, industrial and consumer markets. On June 1, 2011, Freescale issued 43.5 million common shares in its IPO and on June 9th issued an additional 5.6 million shares in a greenshoe. Revenues and EBITDA (Moody's adjusted) for the twelve months ended July 1, 2011 were $4.7 billion and $1.2 billion, respectively. GATEWAY METRO: Pasadena Building Owner Files for Chapter 11 ----------------------------------------------------------- Gateway Metro Center LLC, owner of an 11-story Gateway Metro Center office building in Pasadena, California, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 11-47919). Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Gateway Metro Center sought bankruptcy protection after halting payments in May on a $21 million first-mortgage owing to Allstate Life Insurance Co. The building has 121,500 square feet. It's 60% leased, according to a court filing. A hearing was scheduled for Sept. 13 for permission to use cash representing collateral for the Allstate mortgage. GELT PROPERTIES: Organizational Meeting to Form Panel on Sept. 14 ----------------------------------------------------------------- Roberta DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on September 14, 2011, at 1:00 p.m. in the bankruptcy case of Gelt Financial Corporation. The meeting will be held at Office of the United States Trustee 833 Chestnut Street, Suite 501 Philadelphia, PA 19107 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Gelt Properties Based in Huntington Valley, Pennsylvania, Gelt Properties, LLC, and affiliate Gelt Financial Corporation borrow money from traditional lenders and make loans to commercial borrowers. They also acquire and manage real estate. Gelt Properties and Gelt Financial filed for (Bankr. E.D. Pa. Case Nos. 11-15826 and 11- 15826) on July 25, 2011. Judge Magdeline D. Coleman presides over the cases. Albert A. Ciardi, III, Esq., Jennifer E. Cranston, Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., in Philadelphia, Pa., serve as the Debtors' bankruptcy counsel. In their separate petitions, the Debtors both estimated $10 million to $50 million in assets and debts. The petitions were signed by Uri Shoham, the Debtors' chief financial officer. GLOBAL PROPOSAL: Files for Chapter 7 Bankruptcy Protection ---------------------------------------------------------- Vanessa Small at the Washington Post reports that Global Proposal System Inc. at 7753 Heritage Farm Drive, Montgomery Village, in Maryland, filed for Chapter 7 liquidation (Bankr. D. Md. Case No. 11-27922). Attorney Lawrence E. Heffner Jr. represents the Company. He can be reached at Tel No. (301) 695-2977. The Company disclosed assets of less than $50,000 and liabilities between $50,000 and $100,000. GRAHAM PACKAGING: Fitch Withdraws CCC Ratings on 2 Note Classes --------------------------------------------------------------- Fitch Ratings has withdrawn the following ratings without resolving the Rating Watch Negative status for Graham Packaging Company, L.P.'s and its subsidiary, GPC Capital Corp as follows: -- IDR 'B'; -- Senior secured revolving credit facility 'B+/RR3'; -- Senior secured term loan 'B+/RR3'; -- Senior unsecured notes 'CCC/RR6'; -- Senior subordinated notes 'CCC/RR6'. Fitch's policy on withdrawing ratings is to take into consideration whether it has access to sufficient information in assessing the credit quality of the issuer. In this situation, Fitch is unable to resolve the Rating Watch Negative that was placed on the notes on June 21, 2011 before withdrawal since sufficient information is no longer available to maintain the ratings. Graham is being acquired by Reynolds Group Holdings Limited, a company that Fitch does not have sufficient information to rate. Accordingly, Fitch will no longer provide ratings or analytical coverage for Graham. GREAT ATLANTIC: Wants Mediation for Billions in PI Claims --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Great Atlantic & Pacific Tea Co. is proposing procedures for dealing with more than 2,600 personal injury claims. The proposal comes up for hearing in U.S. Bankruptcy Court in White Plains, New York on Sept. 26. Resolving injury claims is complicated because A&P's insurance policy has $750,000 in so- called self-insured retention, where the Company must pay the first $750,000 before insurance kicks in. The picture is further complicated because bankruptcy law doesn't allow bankruptcy judges to rule on personal injury claims. According to the report, A&P said in its Sept. 11 court filing that personal injury claimants are seeking $1.3 billion, although the amount could be larger because 500 of the claims don't specify an amount sought. A&P is proposing that the claimants and the company first exchange settlement offers. If there isn't settlement, there would be a 60-day mediation period, unless the parties agree to binding arbitration. Mr. Rochelle relates that under the proposed rules, if mediation fails, A&P would have the right to send the dispute to a state or federal court. A&P says it will allow suit to proceed if a claimant agrees only to receive payment from whatever insurance may be available. Claimants would also be required first to utilize whatever third-party insurance is available. To the extent claimants end up with settlements or judgments not covered by insurance, they would be paid like unsecured creditors under a Chapter 11 plan. About Great Atlantic & Pacific Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific is a supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid-Atlantic and Northeastern United States. Before filing for bankruptcy in 2010, A&P operated 429 stores in 8 states and the District of Columbia under the following trade names: A&P, Waldbaum's, Pathmark, Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees prior to the bankruptcy filing. A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Case No. 10-24549) on Dec. 12, 2010 in White Plains, New York. In its petition, A&P reported total assets of $2.5 billion and liabilities of $3.2 billion as of Sept. 11, 2010. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. Lazard Freres & Co. LLC is the financial advisor. Huron Consulting Group is the management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent the Official Committee of Unsecured Creditors. A&P obtained court approval for a new contract with C&S Wholesale Grocers Inc., its principal supplier. The contract is designed to save A&P $50 million a year when the supermarket operator emerges from Chapter 11 reorganization. A&P sold postpetition 12 Super-Fresh stores in the Baltimore- Washington area for $37.83 million, plus the value of inventory. Thirteen other locations didn't attract buyers at auction and were closed mid-July 2011. GREAT ATLANTIC: Seeks to Expand PricewaterhouseCoopers Hiring ------------------------------------------------------------- BankruptcyData.com reports that Great Atlantic & Pacific Tea Company filed with the U.S. Bankruptcy Court a motion to expand the scope of employment of PricewaterhouseCoopers (Contact: Kenneth J. Sharkey) as auditor to include audit services at the following hourly rates: partner at $860 to $995, managing director at $610 to $995, director at $700, senior manager at $525 to $770, manager at $415 to $430, senior associate at $225 to $310 and associate at $145 to $235. About Great Atlantic & Pacific Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific is a supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid-Atlantic and Northeastern United States. Before filing for bankruptcy in 2010, A&P operated 429 stores in 8 states and the District of Columbia under the following trade names: A&P, Waldbaum's, Pathmark, Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees prior to the bankruptcy filing. A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Case No. 10-24549) on Dec. 12, 2010 in White Plains, New York. In its petition, A&P reported total assets of $2.5 billion and liabilities of $3.2 billion as of Sept. 11, 2010. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. Lazard Freres & Co. LLC is the financial advisor. Huron Consulting Group is the management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent the Official Committee of Unsecured Creditors. A&P obtained court approval for a new contract with C&S Wholesale Grocers Inc., its principal supplier. The contract is designed to save A&P $50 million a year when the supermarket operator emerges from Chapter 11 reorganization. A&P sold postpetition 12 Super-Fresh stores in the Baltimore- Washington area for $37.83 million, plus the value of inventory. Thirteen other locations didn't attract buyers at auction and were closed mid-July 2011. GSC GROUP: Objections to Plan Disclosures Due Sept. 26 ------------------------------------------------------ Objections to the disclosure statement explaining the Chapter 11 plan of liquidation filed by James L. Garrity, Jr., Chapter 11 trustee of the bankruptcy cases of GSC Group, Inc., and its debtor affiliates are due September 26, 2011. Hearing on the approval of the disclosure statement will be held on October 5, 2011, at 10:00 a.m. The confirmation hearing will be held on November 18, 2011, at 10:00 a.m. Confirmation objections are due on or before November 9. The Plan, filed with the U.S. Bankruptcy Court for the Southern District of New York on August 23, provides for the transfer of all of the Estate Assets and the Reorganized GSC Group Stock to the Liquidating Trust. The Estate Assets are those remaining assets not sold to GSC Acquisition Holdings, LLC, pursuant to the asset purchase agreement dated May 23, 2011, other than: (i) about $18.6 million of cash, (ii) certain causes of action, (iii) certain key-man life insurance policies, and (iv) certain miscellaneous assets. Holders of general unsecured claims are impaired and will get an 84% recovery on their allowed claims in the form of cash and trust units. Holders of secured claims and other priority claims are unimpaired and will recover 100% of their allowed claims in the form of cash or its collateral. As previously reported in the Sept. 1, 2011 edition of the Troubled Company Reporter, Bill Rochelle, bankruptcy columnist for Bloomberg News, said the liquidating plan was filed after the Chapter 11 trustee completed the sale of the business to Black Diamond Capital Finance LLC, as agent for the secured lenders, on July 26. A minority group of secured lenders filed an appeal from the order allowing the sale. The appeal remains outstanding, the disclosure statement said. Through a suit in state court, the minority lenders failed to halt Black Diamond from completing the sale, the disclosure materials say. According to the Bloomberg report, Judge Gonzalez previously said the trustee's plan was the "only plausible exit strategy." The price paid by the lenders' agent was designed for full payment on $256.8 million in secured claims, with $18.6 million cash left over. Black Diamond as agent bought most assets with a $224 million credit bid, a $6.7 million note, $5 million cash, and debt assumption. A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?76de About GSC Group Florham Park, New Jersey-based GSC Group, Inc. -- http://www.gsc.com/-- is a private equity firm specializing in mezzanine and fund of fund investments. Originally named Greenwich Street Capital Partners Inc. when it was a subsidiary of Travelers Group Inc., GSC became independent in 1998 and at one time had $28 billion of assets under management. Market reverses, termination of some funds, and withdrawal of customers' investments reduced funds under management at the time of bankruptcy to $8.4 billion. GSC Group filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B. Solow, Esq., at Kaye Scholer LLP, serves as the Debtor's bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's notice and claims agent. Capstone Advisory Group, LLC, is the Debtor's financial advisor. The Debtor estimated its assets at $1 million to $10 million and debts at $100 million to $500 million as of the Chapter 11 filing. Since Jan. 7, 2011, the Debtors have been operated by James L. Garrity Jr., as Chapter 11 trustee for the Debtors. No committee of unsecured creditors has been appointed in the Chapter 11 Cases. GYMBOREE CORPORATION: Moody's Affirms 'B2' Corporate Family Rating ------------------------------------------------------------------ Moody's Investors Service revised The Gymboree Corporation's rating outlook to negative from stable. All other ratings including the B2 Corporate Family Rating were affirmed. RATINGS RATIONALE The rating outlook revision to negative from stable primarily reflects persistent negative trends in EBITDA over the past few fiscal quarters and Moody's expectations that these negative trends are unlikely to reverse over the course of the current fiscal year. As a result, the company's performance has been below Moody's initial expectations therefore leverage is likely to remain high for an extended period. The company's recent performance has been negatively impacted primarily by weak product performance at its Gymboree division, which necessitated higher markdowns to clear merchandise. The company's cost of sales is expected to increase over the course of the current fiscal year, as goods were purchased when raw material costs were higher earlier this year are delivered to the stores. Moody's expects the company will face continued pressure on gross margins over the course of this year as a result. Gymboree's B2 Corporate Family Rating reflects its highly leveraged capital structure following its acquisition by Bain Capital. Leverage remains high, with debt/EBITDA in excess of 6.5 times for the LTM period ending 7/30/11. The rating also takes into consideration Gymboree's overall moderate scale and the highly fragmented infant and toddler apparel market. Gymboree does have a good track record of growth, a well known brand, and good execution skills as evidenced in the company's high operating margins. The infant and toddler apparel category is considered somewhat less volatile than many apparel categories, primarily due to regular demand as children grow and parents generally will maintain spending on children. The company's good overall liquidity is a key factor in the rating as well, as the company has no material near dated debt maturities and access to a sizable (unrated) asset-based revolver that amply covers seasonal working capital needs. The rating outlook is negative. Ratings could be lowered if the company is unable to make tangible progress stabilizing operating performance over the next 12 to 18 months as it deals with rising input costs and weak consumer confidence while also recovering from its recent fashion misstep. Quantitatively, ratings could be lowered if Moody's expects debt/EBITDA will be sustained in the mid six times range, or if interest coverage (EBITA/interest) falls below 1.25 times. Ratings could also be lowered if the company's overall good liquidity position were to erode or financial policies became more aggressive. Over time, more positive rating action could be considered if the company demonstrates stable trends in earnings, indicating that it has been able to address recent fashion missteps and manage in a higher input cost environment. Quantitatively, the rating outlook could be revised to stable if debt/EBITDA approached 6 times over the next 12 to 18 times. Ratings could be upgraded if the company's performance recovers toward history levels, while also meaningfully deleveraging, with debt/EBITDA sustained below 5.5 times and interest coverage in excess of 1.75 times. The following ratings were affirmed and LGD assessments amended where appropriate: Corporate Family Rating at B2 Probability of Default Rating at B2 $820 million senior secured term loan due February 2018 at B1 (LGD 3, 40% from LGD 3, 39%) $400 million senior unsecured notes due November 2018 at Caa1 (LGD 5, 86%) The principal methodology used in rating The Gymboree Corporation was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in San Francisco, California, as of July 30, 2011, Gymboree operates over 1,100 retail stores and websites under the "Gymboree", "Gymboree Outlet", "Crazy 8", and "Janie and Jack" brands. Revenues for the LTM period ending 7/30/11 were approximately $1.1 bilion. HARRY & DAVID: Court Enters Plan Confirmation Order --------------------------------------------------- On Aug. 29, 2011, the U.S. Bankruptcy Court for the District of Delaware entered an order confirming Harry & David Holdings, Inc., and its debtor subsidiaries' Second Amended Joint Plan of Reorganization, dated June 24, 2011. The Plan Modifications, including the PBGC Settlement, and the Plan Supplement are approved in all respects pursuant to Section 1127(a) of the Bankruptcy Code and Bankruptcy Rule 3019. A copy the Confirmation Order and a copy of the Plan as Modified and Restated is available at http://is.gd/Fk9tWs The Plan allows the Company to convert all of its approximately $200 million of outstanding public notes into equity of the reorganized company. The Plan also includes an equity capital raise that will generate $55 million in equity financing upon the Company's emergence from Chapter 11. A group of the Company's existing noteholders have agreed to backstop the equity capital raise. The Company will utilize proceeds from the equity capital raise to satisfy obligations arising from its $55 million post- petition term loan. Additionally, the Company has a $100 million revolving loan commitment to finance its operations after the Company exits Chapter 11. About Harry & David Medford, Oregon-based Harry & David Holdings, Inc. -- aka Bear Creek Corporation; Bear Creek Direct Marketing, Inc.; Bear Creek Stores, Inc.; Bear Creek Operations, Inc.; and Bear Creek Orchards, Inc. -- is a multi-channel specialty retailer and producer of branded premium gift-quality fruit and gourmet food products and gifts marketed under the Harry & David(R), Wolferman's(R) and Cushman's(R) brands. It has 70 stores across the country. Harry & David Holdings filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-10884) on March 28, 2011. Affiliates Harry and David (Bankr. D. Del. Case No. 11-10885), Harry & David Operations, Inc. (Bankr. D. Del. Case No. 11-10886), and Bear Creek Orchards, Inc. (Bankr. D. Del. Case No. 11-10887) filed separate Chapter 11 petitions. The cases are jointly administered, with Harry David Holdings as lead case. David G. Heiman, Esq., Brad B. Erens, Esq., and Timothy W. Hoffman, Esq., at Jones Day, are the Debtors' lead counsel. Daniel J. DeFranceschi, Esq., Paul Noble Heath, Esq., and Zachary Shapiro, Esq., at Richards Layton & Finger, serve as the Debtors' local counsel. Rothschild Inc. is the Debtors' investment banker. Alvarez & Marsal LLC is the Debtors' financial advisor. Garden City Group Inc. is the Debtors' claims and notice agent. McKinsey Recovery & Transformation Services U.S. LLC is being tapped as management consultants. The Debtor also tapped DJM Realty Services, LLC, as real estate consultants; Alvarez & Marsal North America to provide the Debtors an interim chief executive officer and chief restructuring officer and certain additional officers; and McKinsey Recovery & Transformation Services U.S. LLC as their management consultant. Kristopher M. Hansen, Esq., and Erez E. Gilad, Esq., at Stroock & Stroock & Lavan LLP; Thomas B. Walper, Esq., at Munger, Tolles & Olson LLP; and Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP are counsel to principal noteholders. Moelis & Company is the financial advisor to the principal noteholders. Lowenstein Sandler has been retained as counsel to the unsecured creditors committee. The Debtors disclosed $304.3 million in total assets and $360.8 million in total debts as of Dec. 25, 2010. On April 7, 2011, the U.S. Trustee appointed an official committee of unsecured creditors in the Debtors' cases. HAWAII MEDICAL: Objects to Committee's Bid to Dismiss Ch. 11 Cases ------------------------------------------------------------------ Hawaii Medical Center, Hawaii Medical Center East and Hawaii Medical Center West ask the U.S. Bankruptcy Court for the District of Hawaii to deny the Official Committee of Unsecured Creditors' motion to dismiss their Chapter 11 cases filed in June 2011. In its motion, the Creditors' Committee alleges that the 2011 Chapter 11 cases constitute improper attempts to modify the substantially consummated First Amended Joint Plan of Reorganization filed by Hawaii Medical Center East, LLC; Hawaii Medical Center West, LLC; and Hawaii Medical Center, LLC -- the 2010 Plan. The Creditors Committee further alleges that the 2010 Reorganized Debtors have acted in bad faith in filing the Chapter 11 cases and the plan of reorganization filed therewith -- the 2011 Plan. On behalf of the Debtors, Shawn M. Riley, Esq., at McDonald Hopkins LLC, in Cleveland, Ohio, argues that the 2011 Plan is a stand alone plan and was not filed by the 2011 Debtors as an attempt to modify the Plan of Reorganization confirmed on May 28, 2010. The Creditors Committee's overarching concern can be reduced to one issue -- under the 2011 Plan, general unsecured creditors are not entitled to recover on their unsecured claims, he states. Mr. Riley points out that substantially all of the property to be transferred under the 2010 Plan has been transferred as a result of the conversion from Hawaii limited liability companies to new Hawaii non-profit corporations. New officers and directors have also been appointed and distributions under the 2010 Plan have commenced, he asserts. Accordingly, the 2010 Plan has been substantially consummated and fully administered. As the 2010 Plan has been substantially consummated and fully administered, it is impossible to affect a modification through the 2011 Plan, he contends. Essentially, the 2011 Plan does not modify the 2010 Plan in any way but rather is an entirely different reorganization, he insists. Although the Debtors which filed for Chapter 11 protection in 2008, the Official Committee of Unsecured Creditors in the 2008 Chapter 11 cases and Hawaii Physicians Group, LLC spent significant time negotiating the terms of the 2010 Plan and working towards confirmation, and although the 2010 Reorganized Debtors, the 2008 Committee and HPG thoroughly analyzed the Debtors' ability to meet their obligations under the 2010 Plan post-confirmation, unanticipated circumstances nonetheless arose, Mr. Riley stresses. These unanticipated circumstances include: (1) The 2010 Reorganized Debtors experienced an unexpected loss in physician referrals that adversely affected their revenue. (2) The 2010 Reorganized Debtors discovered and subsequently self-reported, post-emergence, certain technical violations of the Stark Act. Indeed, the U.S. Department of Health & Human Services filed proofs of claim in the 2010 Reorganized Debtors' Chapter 11 cases for $36,931,700 and $20,884,290 in potential Stark law liability. Mr. Riley clarifies that the 2011 Chapter 11 cases were filed with the overarching objective to ensure the continued operation of the hospitals, the continued provision of high quality, acute health care services to patients, and to ensure the continued employment of nearly 1,000 employees. Instead, the 2011 Plan promotes those objectives and is in the best interests of all creditors, he maintains. St. Francis Healthcare System of Hawaii, St. Francis Medical Center, and St. Francis Medical Center-West join the 2010 Reorganized Debtors' Objection. Creditors Committee Talks Back Representing the Creditors' Committee, Chuck C. Choi, Esq., at Wagner Choi & Verburgge, in Honolulu, Hawaii, argues that sworn testimony submitted by the 2010 Reorganized Debtors and the record in the 2008 Debtors' bankruptcy cases demonstrate that the circumstances leading to the filing of the 2011 Debtors and 2011 Plan were foreseeable and anticipated by the 2010 Reorganized Debtors before the 2010 Plan was confirmed. Specifically, the decline in revenues was the expected outcome from losing physician referrals and the direct result of the bargain the 2008 Debtors struck with their creditors to extinguish the physicians' equity interests through the 2010 Plan, Mr. Choi points out. Although the Department of Health filed its claims for Stark law violations during the 2011 Debtors' Chapter 11 cases, the 2010 Reorganized Debtors were aware of the violations and the CMS audit results before the 2010 Plan was confirmed, he insists. Accordingly, the 2010 Reorganized Debtors should not be permitted to claim surprise and changed circumstances to excuse their breach of the 2010 Plan, Mr. Choi avers. The 2010 Reorganized Debtors' evasion of their responsibilities under the 2010 Plan violates Section 1127(b) of the Bankruptcy Code and sets a dangerous precedent that undermines the binding nature of the plan confirmation process, he maintains. 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. Lawyers at Moseley Biehl Tsugawa Lau & Muzzi, in Honolulu, Hawaii, and McDonald Hopkins LLC, in Cleveland, Ohio, serve as the Debtors' counsel. The Debtors' financial advisors are Scouler & Company, LLC. In its petition, Hawaii Medical Center estimated $50 million to $100 million in assets and $100 million to $500 million in debts. The petitions were signed by Kenneth J. Silva, member of the board of directors. 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. The Debtor disclosed $74,713,475 in assets and $91,599,563 in liabilities as of the Chapter 11 filing. St. Francis Healthcare System of Hawaii is represented by: Jonathan H. Steiner McCORRISTON MILLER MUKAI MACKINNON LLP Five Waterfrong Plaza, Fourth Floor 500 Ala Moana Boulevard Honolulu, Hawaii 96813 Tel: (808) 529-7300 Fax: (808) 524-8293 E-mail: steiner@m4law.com Joshua M. Mester DEWEY & LEBOEUF LLP 333 South Grand Avenue, 26th Floor Los Angeles, California 90071 Tel: (213) 621-6000 Fax: (213) 621-6100 E-mail: jmester@dl.com HD SUPPLY: Completes Sale of Plumbing/HVAC Business to Hajoca ------------------------------------------------------------- HD Supply, Inc., on Sept. 9, 2011, completed the previously reported sale to Hajoca Corporation of all of the issued and outstanding equity interests in its Plumbing/HVAC business. About HD Supply HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the largest North American wholesale distributors supporting residential and non-residential construction and to a lesser extent electrical consumption and repair and remodeling. HDS also provides maintenance, repair and operations services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates through approximately 800 locations throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. The Company reported a net loss of $619 million on $7.47 billion of revenue for the fiscal year ended Jan. 30, 2011, compared with a net loss of $514 million on $7.42 billion of net sales for the fiscal year ended Jan. 31, 2010. The Company's balance sheet at July 31, 2011, showed $7.14 billion in total assets, $7.29 billion in total liabilities, and a $153 million total stockholders' deficit. * * * HD Supply carries 'Caa2' probability of default rating and corporate family rating, with negative outlook, from Moody's Investors Service, and a 'B' corporate credit rating, with negative outlook, from Standard & Poor's Ratings Services. In April 2010, when Moody's downgraded the ratings to 'Caa2' from 'Caa1', it said, "The downgrade results from Moody's views that the construction industry, the main driver of HDS' revenues, will continue to be weak for the foreseeable future, pressuring the company's ability to generate meaningful levels of earnings and free cash flow relative to its debt." HEALTHSPRING INC: Moody's Affirms 'Ba3' Senior Secured Rating ------------------------------------------------------------- Moody's Investors Service has affirmed the debt ratings of HealthSpring, Inc. (HealthSpring, NYSE:HS, senior secured at Ba3; stable outlook) and the Ba1 insurance financial strength (IFS) ratings of its operating subsidiaries. The outlook on the ratings is stable. Moody's also withdrew the Ba1 IFS rating of Texas HealthSpring, LLC for business reasons. This operating subsidiary was merged into HealthSpring Life & Health Insurance Company, Inc. effective 12/31/10. RATINGS RATIONALE Moody's stated that the ratings affirmation reflected the successful integration of Bravo Health (acquired at the end of 2010); HealthSpring's strong Medicare Advantage membership gain during the 2011open enrollment period; its recent expansion into Medicaid, which provides some revenue and earnings diversification; and its de-leveraging as a result of using a large portion of the proceeds from its common stock offering in March 2011 to repay outstanding debt. Notably, the company's financial leverage (debt to capital where debt includes operating leases) was reduced to 19.8% as of June 30, 2011 from 37.4% at year-end 2010. In addition, debt to EBITDA was reduced from 1.8x on December 31, 2010 to 0.9x at mid-year 2011. Offsetting these positive developments, Moody's Senior Vice President, Steve Zaharuk commented, "With the scheduled reimbursement reductions to Medicare Advantage plans under healthcare reform, there will be annual pressure on Medicare Advantage insurers to develop products with the optimal mix of benefit and premium levels that will attract new members and retain its membership base." In addition, the rating agency noted that these healthcare insurers will be under pressure to operate their plans more efficiently to optimize benefits and meet the minimum loss ratio (MLR) requirements that begin in 2014. Zaharuk added, "As a result of these financial uncertainties, along with the possibility of additional reductions to all Medicare programs as a result of federal budgetary pressures, further upgrades for HealthSpring are limited in the near-term." The principal methodology used in rating HealthSpring was Moody's Rating Methodology for U.S. Health Insurance Companies published in May 2011. These ratings were affirmed with a stable outlook: HealthSpring, Inc. -- senior secured debt rating at Ba3; corporate family rating at Ba3; HealthSpring of Tennessee, Inc. -- insurance financial strength rating at Ba1; HealthSpring of Alabama, Inc. -- insurance financial strength rating at Ba1; Bravo Health of Pennsylvania, Inc. -- insurance financial strength rating at Ba1. This rating was withdrawn: Texas HealthSpring, LLC -- insurance financial strength rating at Ba1. HealthSpring, Inc. is headquartered in Franklin, Tennessee. For the first six months of 2011 total revenue was $2.8 billion with Medicare Advantage membership (excluding Part D stand alone) of approximately 336,400. As of June 30, 2011 the company reported shareholders' equity of approximately $1.6 billion. Moody's insurance financial strength ratings are opinions about the ability of insurance companies to punctually pay senior policyholder claims and obligations. INNER CITY: Reaches Deal on Pre-Negotiated Financial Restructuring ------------------------------------------------------------------ Inner City Media Corporation disclosed that it has reached an agreement in principle with its senior lenders, pursuant to which the Company will implement a consensual pre-negotiated financial restructuring that will result in a restructured balance sheet. The agreement provides that the Company and the senior lenders will file a chapter 11 plan of reorganization by mid-October, which is anticipated to, among other things, provide for the payment in full of all allowed administrative and general unsecured claims, subject to confirmatory due diligence by the senior lenders. The Company expects to emerge from bankruptcy protection by the end of 2011 and looks forward to working with the senior lenders in its emergence from bankruptcy. About Inner City As reported by the Troubled Company Reporter on Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on February 13, 2010. As a result, the Senior Lenders are owed approximately $250 million in principal and accrued and unpaid interest and fees as of the Involuntary Chapter 11 Petition Date. Inner City Media Corporation's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner- City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC-NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. JCE DELAWARE: Amends Cash Collateral Use Pact with First State -------------------------------------------------------------- JCE Delaware, Inc., et al., entered into a stipulation with First State Bank Central Texas and Liberty Mutual Insurance Company/Safeco to extend the Debtors' right to request and receive Advances through Sept. 9, 2011. By an amended interim order dated Aug. 31, 2011, the Debtors obtained permission to use cash collateral and debtor-in- possession financing. Pursuant to that order, the Debtors' interim authority to request and receive Advances is scheduled to expire on Sept. 1, 2011, to obtain DIP Financing unless extended by Court order. About J.C. Evans Construction With roots stretching back over 55 years, J.C. Evans is a heavy equipment construction company based in Leander, Texas. Through J.C. Evans Construction Co., L.P., a Texas limited partnership d/b/a/ American Aggregates, the Company owns and operates a construction company specializing in heavy site preparation on commercial, pipeline, utility and highway projects, including excavating, trenching, site preparation and construction. Through Adkins Land Development, L.P., a Texas limited partnership, the Company owns a 700-acre quarry, which produces aggregate for use in road construction. J.C. Evans Construction Holdings is the holding company that owns directly or indirectly each of the other entities. In turn, Holdings is owned by a trust for the benefit of the current and former employees of J.C. Evans through an Employee Stock Ownership Plan. Six affiliated companies filed for Chapter 11 (Bankr. W.D. Tex. Case Nos. 11-11926 to 11-11931) on Aug. 1, 2011. These are JCE Delaware Inc., J.C. Evans Construction Holdings, J.C. Evans Nevada, LLC, EQUUS Development Inc., J.C. Evans Construction and Adkins Land Development. The cases are jointly administered before Judge Craig A. Gargotta. George H. Tarpley, Esq., and Mark E. Andrews, Esq., at Cox Smith Matthews Incorporated, serve as bankruptcy counsel. In its petition, JCE Delaware estimated $50 million to $100 million in both assets and debts. JEFFERSON COUNTY: Commissioners to Meet Sept. 16 on Bankruptcy -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that commissioners for Jefferson County, Alabama, are scheduled to meet again on Sept. 16 to consider filing what would be the country's largest municipal bankruptcy reorganization. The discussions concern how much of a haircut creditors will accept on $3.1 billion in defaulted sewer bonds. 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 $3.14 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. A Chapter 9 filing Jefferson County would be the largest in U.S. municipal history. KB HOME: Fitch Downgrades Issuer Default Rating to 'B+' ------------------------------------------------------- Fitch Ratings has downgraded its ratings for KB Home (NYSE: KBH), including the company's Issuer Default Rating (IDR) to 'B+' from 'BB-'. The Rating Outlook is Negative. The ratings downgrade and continued Negative Outlook reflect Fitch's belief that new housing activity will remain soft through at least 2012 and that the company's liquidity position is likely to erode in the next 18 months. With the recent softening in the economy and lowered economic growth expectations for 2011 and 2012, the environment may at best support a relatively modest recovery in housing metrics over the next year and a half. Fitch had previously forecast a somewhat more robust housing environment in 2011 and 2012. The downgrades also reflect the company's underperformance relative to its peers in certain operational and financial categories during recent quarters, its current over-exposure to the credit challenged entry level market, and the upcoming cash flow pressures resulting from the issues associated with the South Edge LLC bankruptcy. While KBH currently has adequate liquidity to fund working capital and debt service, this cushion is likely to erode in the next 12- 18 months as the company continues to have operating losses, expends cash to replenish its land supply and pays about $226 million to satisfy its South Edge obligations. At May 31, 2011, KBH had unrestricted cash of $621.3 million. In August the company repaid $100 million of maturing debt. (The next debt maturity is $249.5 million of senior notes due February 2014.) Fitch currently expects KBH to end fiscal 2011 with unrestricted cash of between $340 million to $370 million. With annual interest expense of roughly $115 million and similar or moderately lower land and development expenditures next year, unrestricted cash could fall to or below $300 million by the end of fiscal 2012, even if KBH monetizes its South Edge land. As expected, the housing recovery has been irregular so far and to date quite anemic. Various housing and related statistics appear to have bottomed in early to mid-2009. Since then the on, then off, then on again federal housing credit at times spurred or at least pulled forward housing demand. With the U.S. economy moving from recession to expansion in the third quarter of 2009, plus very attractive housing affordability and government incentives, housing was jump-started. However, faltering consumer confidence, among other issues, has restrained the recovery so far. The public homebuilders were generally unprofitable in the calendar first quarter (excluding non-cash real estate charges) and revenues trailed a year ago levels. That was also the case in the calendar second quarter. Builder comparisons ease in the third and fourth quarters. If the economy continues to modestly advance and employment edges up, macroeconomic housing metrics should, for the most part, remain at current levels through the end of this year. Fitch currently projects new single-family housing starts will drop 13.1% in 2011 following 5.8% growth in 2010. After falling 14.1% in 2010, new home sales are forecast to decrease about 7% in 2011. Fitch expects existing home sales to slip 2% in 2011 after a 4.8% decline in 2010. In a moderately growing economy in 2012, housing metrics could modestly expand, off a very depressed base. The ratings also reflect KBH's business model and marketing prowess. The ratings take into account the company's current primary exposure to entry-level and to a lesser degree first-step trade-up housing (the deepest segments of the market), its leadership role in constructing energy efficient homes, its reemphasis of the value-engineered Open Series of home designs, its conservative building practices, utilization of return on invested capital criteria as a key element of its operating model and its capital structure. KBH employs what it labels as the KBnxt operational business model. This strategy includes regular detailed product preference surveys, primarily acquisition of developed and entitled land in markets with high growth potential, generally commencement of construction of a home only after a purchase contract has been signed, establishment of an even-flow production, pricing homes to compete with existing homes, and utilizing design centers to customize homes to the preferences of home buyers. Also, KBH strives to be among the top five builders or, in very large markets, top 10 homebuilders in order to have access to the best land and subcontractors. In 2011, KBH has reemphasized marketing of the 'Open Series' product designs which have been value engineered to reduce production costs and cycle times, enabling the company to more effectively compete on price with existing homes in the current market. Also, KBH is one of a handful of public builders aggressively marketing energy efficient homes as a way of differentiating its homes from other builders' product and existing homes for sale. The company maintains a 5.7-year supply of lots (based on last 12 months deliveries), 81.7% of which are owned and the balance controlled through options. (The options share of total lots controlled is down sharply over the past five years as the company has written off substantial numbers of options.) KBH's most recent credit metrics, while improving in certain cases, remain stressed. Debt to capitalization was 79.2% as of May 31, 2011, up from 73.8% at year end 2010. Net debt to capitalization was 70.7%, up from 58% as of Nov. 30, 2010. Debt to LTM EBITDA, excluding real estate impairments, was 16.3 times (x) and was 17.2x at the end of the 2010 second quarter. Funds from operations (FFO) adjusted leverage was 21.4x at the conclusion of the 2011 second quarter and 8.1x a year earlier. Interest coverage was 0.9x in the 2011 second quarter and 0.8x for the 2010 second quarter, while FFO interest coverage was 0.7x in the 2011 second quarter, down from 1.9x the prior year. The gross inventory turn has moderated year-over-year from 0.9x to 0.7x during the 2011 second quarter. The sales value of backlog represented 30% of construction debt at the conclusion of the 2011 second quarter. The company reported $106.4 million negative cash flow from operations during the second quarter of 2011. On a latest 12- months (LTM) basis, cash flow from operations was a negative $292.7 million. For all of fiscal 2011, Fitch expects KBH to be cash flow negative, as the company continues to rebuild its land position. The company is likely to spend a similar amount on land and development this year as it did in 2010 ($560 million). KBH terminated its revolving credit facility, effective March 31, 2010. Consistent with Fitch's comment on certain homebuilders' termination and reduction of revolving credit facilities, in the absence of a revolving credit line, a consistently higher level of cash and equivalents than was typical should be maintained on the balance sheet, especially in these still uncertain times. As of May 31, 2011, KBH had an investment of $51.1 million in seven active unconsolidated joint ventures (JVs). These JVs have no debt. However, in the first quarter of 2011, KBH took significant charges related to its South Edge LLC (Las Vegas) JV. Lesser charges were taken in the second quarter. As a result of the Feb. 3, 2011 court decision confirming the involuntary bankruptcy of the JV, the company's balance sheet as of May 31, 2011 reflected a net payment obligation of $226.4 million, representing KBH's estimate of the probable amount that it would pay relating to its springing guaranty on the South Edge JV. This cash outflow is expected to occur in late 2011. Future ratings and Outlooks will be influenced by broad housing market trends as well as company specific activity, such as trends in land and development spending, general inventory levels, speculative inventory activity (including the impact of high cancellation rates on such activity), gross and net new order activity, debt levels, free cash flow trends and uses, and the company's cash position. Fitch has downgraded the following ratings for KBH: -- Issuer Default Rating (IDR) to 'B+' from 'BB-'; -- Senior unsecured debt to 'B+/RR4' from 'BB-'. The Rating Outlook is Negative. The Recovery Rating (RR) of 'RR4' on KBH's senior unsecured notes indicates average recovery prospects for holders of these debt issues. KBH's exposure to claims made pursuant to performance bonds and joint venture debt and the possibility that part of these contingent liabilities would have a claim against the company's assets were considered in determining the recovery for the unsecured debtholders. Fitch applied a liquidation value analysis for these RRs. KOREA TECHNOLOGY: Files Schedules of Assets and Liabilities ----------------------------------------------------------- Korea Technology Industry America, Inc., filed with the U.S. Bankruptcy court for the District of Utah its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $35,246,360 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims $11,725 F. Creditors Holding Unsecured Non-priority Claims $38,739,803 ----------- ----------- TOTAL $35,246,360 $38,751,528 About KTIA, UBR and CAR Korea Technology Industry America, Inc., is a subsidiary of Seoul- based Korea Technology Industry Co. that tried to squeeze crude oil from Utah's sandy ridges. Korea Technology Industry America, Uintah Basin Resources LLC, and Crown Asphalt Ridge L.L.C., filed separate Chapter 11 bankruptcy petitions (Bankr. D. Utah Case Nos. 11-32259, 11-32261, and 11-32264) on Aug. 22, 2011. The cases are jointly administered under KTIA's case. Steven J. McCardell, Esq., and Kenneth L. Cannon II, Esq., at Durham Jones & Pinegar, in Salt Lake City, serve as the Debtors' counsel. Each of the Debtors estimated assets and debts of $10 million to $50 million. LA VILLITA: Can Use Cash Collateral Until Sept. 30 -------------------------------------------------- Judge Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division, authorized La Villita Motor Inns, J.V., to use the Cash Collateral of the GS Mortgage Securities Corporation II, Commercial Mortgage Pass-Through Certificates, Series 1999-C1, from September 1 through 30, 2011. A full-text copy of the Cash Collateral Order with the Bugdet is available for free at http://ResearchArchives.com/t/s?76e6 About La Villita Motor Inns JV San Antonio, Texas-based La Villita Motor Inns JV is a joint venture, formed on or about April 14, 1980, that owns and operates a hotel located at 100 La Villita in San Antonio, Texas, known as the Riverwalk Plaza Hotel. It filed for Chapter 11 bankruptcy protection (Bankr. Case No. 10-54864) on Dec. 17, 2010. Debra L. Innocenti, Esq., at Oppenheimer Blend Harrison & Tate, serves as the Debtor's bankruptcy counsel. The Debtor estimated assets at $10 million to $50 million and debts at $1 million to $10 million. LEHMAN BROTHERS: Turnberry Wants Lift Stay to Pursue Nevada Case ---------------------------------------------------------------- Turnberry/Centra Sub, LLC, Turnberry/Centra Office Sub, LLC, Turnberry Retail Holding, L.P., Jacquelyn Soffer, and Jeffrey Soffer ask the United States Bankruptcy Court for the Southern District of New York for relief from the automatic stay to allow them to litigate all issues in their dispute in an action in a Nevada court. Turnberry also asks the Bankruptcy Court to abstain and defer to the Nevada court on the liquidation, adjudication, and allowance of its monetary claims against Lehman Brothers Holdings Inc. and Lehman Brothers Bank, FSB, including setoff, but reserve jurisdiction to provide for the payment of Turnberry's claim in accordance with the outcome of the Nevada litigation and pursuant to the terms of Lehman's plan of reorganization once it is confirmed. On February 27, 2009, Turnberry filed an adversary proceeding against Lehman asserting claims arising out of Lehman's failure to fund a $625 million loan for Turnberry's Town Square project, located in Las Vegas, Nevada. Lehman asserted counterclaims against Jacquelyn and Jeffrey Soffer to collect on a $95 million promissory note, which Lehman made as an interim advance under the promised $625 million Town Square loan, which Lehman ultimately failed to fund. As partial security for the interim advance loan, Lehman received a security interest in a portion of the Town Square project. Concerned with the impact that Nevada's "one-action rule" could have on Lehman's ability to foreclose on its collateral, Lehman later amended its counterclaims, converting all of its direct claims for breach of the note and the other loan documents to claims for declaratory judgment, Stephen B. Meister, Esq., at Meister, Seelig & Fein, LLP, in New York -- sbm@msf-law.com -- tells Judge Peck. Thus, he asserts, rather than suing for breach of the promissory note, Lehman was instead suing for a declaration that the promissory note had been breached. At the hearing on Turnberry's motion to dismiss Lehman's amended counterclaims, the Bankruptcy Court instructed the parties to try to reach an agreement that would resolve the procedural issues created by Nevada's one-action rule. Since that hearing, Lehman has initiated a non-judicial foreclosure proceeding in Nevada, which all parties agree is the only forum in which Lehman can do so. Mr. Meister says that Turnberry's defenses to that foreclosure will require a Nevada court to resolve the same factual issues raised in Turnberry's complaint in the adversary proceeding. Thus, he notes, as things currently stand, the same issues will be litigated in two different courts at the same time. To avoid a waste of judicial resources, and the potential for conflicting rulings, Turnberry seeks relief from the automatic stay so that it can assert its monetary claims against Lehman in Nevada, together with its defense to the foreclosure, all of which arise out of the same contested facts, Mr. Meister explains. Moreover, Turnberry asks that the Bankruptcy Court defer to the Nevada court on the adjudication and allowance of Turnberry's monetary claims against Lehman, including setoff. He points out that this will allow all of the claims and defenses relating to this dispute -- arising from the same facts -- to be litigated in one action in Nevada. The Bankruptcy Court will hold a hearing on September 14, 2011, to consider Turnberry's request. Objections are due on September 7. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LCPI Proposes Deal With SunCal Trustee ------------------------------------------------------- Lehman Commercial Paper Inc. seeks approval of an agreement in connection with the funding of certain settlements and the allocation of distributions to be made from reserves that will be established in the Chapter 11 cases of LBREP/L-SunCal Master I LLC and its subsidiaries. The funding agreement was entered into by LCPI, the liquidating trustee of the SunCal entities, Fidelity National Title Insurance Company, and First American Title Insurance Company. Pursuant to the confirmed Chapter 11 plan for the SunCal entities, the liquidating trustee, LCPI and Fidelity are authorized to commence actions to resolve disputes concerning the validity or priority of mechanic's lien claims asserting a priority senior to the first deeds of trust against real properties formerly owned by LBREP/L-SunCal's subsidiaries. Fidelity and First American are providing a defense to LCPI and LBREP/L-SunCal's secured lenders against some of the mechanic's lien claims. The insurance companies and the secured lenders, however, are engaged in a dispute over the latter's coverage under the policies insuring the first deeds of trust and their duty of indemnification. As provided by the SunCal plan, the liquidating trustee will establish reserves to assure that proceeds from the recent sale of the real properties are available to pay mechanic's lien claims should it be determined that any such claim is senior to the first deeds of trust, and is not covered by the policies insuring the trust, from which payment will otherwise be made. Pursuant to the SunCal plan, the liquidating trustee will maintain the reserves pending the allowance or disallowance of the mechanic's lien claims. After allowance or disallowance of a mechanic's lien claim, the amount reserved for that claim is to be disbursed to the claim holder or the secured lenders as their rights may be determined by the resolution of the mechanic's lien claim. Meanwhile, 3.5% of the amount to be disbursed to the secured lenders is to be turned over to the liquidating trustee. To implement a prompt and efficient distribution of the reserves, and an agreement between the secured lenders and the insurance companies that the latter would fund the resolution of any mechanic's lien claim, the parties have agreed to a protocol regulating the disbursement of the portion of the reserves established for a mechanic's lien claim upon its resolution. The protocol specifically provides that the insurance companies will pay the amount determined to be due on a mechanic's lien claim upon its settlement, and that the portion of the reserves established for a resolved mechanic's lien claim will be disbursed and then allocated as: (i) an amount equal to the secured lenders' potential reimbursement obligation to the insurance companies relating to resolved mechanic's lien claim will be set aside -- the carve out -- as security for any such future reimbursement obligation as determined by resolution of the dispute; (ii) 3.5% of the balance of the reserve distribution remaining after creation of the carve out will be retained by the liquidating trustee free and clear of claims as provided for by the SunCal plan until the trustee's participation has been fully funded; and (iii) the remaining balance of the reserve distribution will be paid to the secured lenders. The protocol also provides that any portion of the carve out later paid over to the secured lenders will be distributed 3.5% to the SunCal trustee free and clear of claims as provided for by the SunCal plan until the trustee's participation has been fully funded and the balance will be retained by the secured lenders. The terms of these proposed procedures are embodied in the funding agreement, a copy of which is available for free at http://bankrupt.com/misc/LBHI_FundingAgreementSunCal.pdf Execution of the agreement will enable the parties to begin resolving the mechanic's lien claims as directed by the SunCal plan. LCPI also will be able to receive the majority of the reserve distributions due to it under the SunCal plan immediately upon the settlement of a mechanic's lien claim, according to Lehman lawyer, Alfredo Perez, Esq., at Weil Gotshal & Manges LLP, in Houston, Texas. In light of this, LCPI requests that the Court authorizes the company to enter into the funding agreement and implement the procedures including the use of estate funds to establish the carve out. Mr. Perez will present the proposed funding agreement to Judge James Peck for signature on September 9, 2011. The deadline for filing objections is September 8, 2011. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Committee Proposes to Prosecute LCPI Lawsuits -------------------------------------------------------------- The Official Committee of Unsecured Creditors in Lehman Brothers Holding Inc. and its affiliates' Chapter 11 cases seeks a court order granting it standing to prosecute or settle lawsuits filed by Lehman Commercial Paper Inc. The lawsuits were filed by LCPI against those who received transfers pursuant to loan market association agreements, and who entered into tolling agreements with the company. The defendants received the transfers either as "preferential transfers" within 90 days prior to LCPI's bankruptcy filing or "avoidable postpetition transfers" in the period following the filing. They received those transfers when their unsecured participation interests in the payments on loans held by LCPI were elevated to ownership interests. Dennis Dunne, Esq., at Milbank Tweed Hadley & McCloy LLP, in New York, said the Court should grant standing to the Creditors' Committee because the claims asserted in the lawsuits are "colorable." Mr. Dunne also said that the resolution of the lawsuits would also result in incremental recoveries to LCPI's creditors of approximately $60 million. Judge James Peck will hold a hearing on September 14, 2011, to consider approval of the request. The deadline for filing objections is September 7, 2011. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Citi Seeks Dismissal of Most of $1.3-Bil. Suit --------------------------------------------------------------- Citigroup Inc. asked Judge Peck again to dismiss most of a $1.3 billion suit brought by the trustee for Lehman Brothers Inc. saying it acted according to so-called safe harbor law when it took $1 billion of assets to offset an obligation for foreign exchange transactions, Anthony Aarons at Bloomberg News reported. The trustee "admits" he hasn't stated a claim that the transfer was fraudulent under bankruptcy law, the bank said in a court filing yesterday, the news agency related. In a separate filing, Citigroup asked Judge Peck to reduce the brokerage's other claims against the bank by $260 million, saying the trustee hadn't made any "legitimate factual challenge" to its legal right to the reduction under a swap agreement, Bloomberg further related. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Taps Hardinger as Counsel for JPM Litigation ------------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliates seek the bankruptcy court's authority to employ Hardinger & Tanenholz LLP as their special counsel pursuant to Section 327(e) of the Bankruptcy Code, nunc pro tunc to June 1, 2011. The Debtors also seek the Court's authority to modify the procedures for compensating and reimbursing the firm. Hardinger & Tanenholz has been engaged with respect to the review and production of documents in the matter of Lehman Brothers Holding Inc. v. JPMorgan Chase. The firm has already been retained as an "Ordinary Course Professional" since September 2010 with respect to the JPM Litigation and the request is solely intended to put in place a different payment mechanism with respect to the firm's fees and expenses. The Amended OCP Order provides that payment to any OCP will not exceed $1 million for the period prior to the conversion of, dismissal of, or entry of a confirmation in the Chapter 11 cases and that if payment to any OCP exceeds $1 million during the Chapter 11 Period, the OCP will be required to file a retention application to be retained as a professional pursuant to Sections 327 and 328 of the Bankruptcy Code. Richard Krasnow, Esq., at Weil Gotshal & Manges LLP, in New York, tells the Court that as of August 31, 2011, the Debtors have paid the firm approximately $980,000 for services rendered through May 31, 2011. The firm and the Debtors anticipate that the firm's fees with respect to JPM Litigation during the balance of the Chapter 11 cases will exceed the $1 million compensation cap for OCP. Accordingly, the Debtors now seek to retain Hardinger & Tanenholz as special counsel in accordance with the Amended OCP Order and pursuant to Section 327(e), the purpose of which is to simply put in place a different mechanism for the processing of its charges. The Debtors propose that Hardinger & Tanenholz be employed to continue to advise the Debtors with respect to the JPM Litigation. Mr. Krasnow asserts that the modification of Hardinger & Tanenholz's fee procedures should be made effective as of June 1, 2011, to ensure that the firm is compensated for all of its services to the Debtors. Establishing June 1, as the date of Hardinger & Tanenholz's retention will enable it to smoothly transition its billing practices and procedures from its prior retention as an OCP. Hardinger & Tanenholz will be paid based on its current hourly billing rates: Partners $275 - $310 per hour Associates' $149 - $199 per hour Paralegals/Non-lawyers $45 per hour The Debtors will also reimburse Hardinger & Tanenholz of its reasonable and necessary expenses. Julia Hardinger, Esq., a shareholder of Hardinger & Tanenholz, attests that her firm has not been and is not currently adverse to the Debtors or their affiliates. The Court will convene a hearing on October 19, 2011, to consider the application. Objections are due on September 14. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Court OKs Votes Tabulation Services from Epiq -------------------------------------------------------------- Bankruptcy Judge James Peck authorized Epiq Bankruptcy Solutions LLC and Epiq Class Action & Claims Solutions Inc. to provide voting and tabulation services in connection with the solicitation of votes on the Chapter 11 plan of Lehman Brothers Holdings Inc. and its affiliated debtors. The firms will be tasked to receive and tabulate all ballots, consult with Lehman and its professionals regarding solicitation and balloting issues, attend hearings, among other things. The Debtors sought to retain Epiq after the U.S. Trustee, a Justice Department agency that oversees bankruptcy cases, opposed the approval of the solicitation process on grounds that the firms cannot be retained as LBHI's solicitation agent without the company filing a separate application for their retention. Epiq will be tasked to receive and tabulate all ballots, consult with Lehman and its professionals regarding solicitation and balloting issues, attend hearings, among other things. LBHI proposed to pay Epiq on an hourly basis and reimburse the firm for its expenses. Epiq's hourly rates range from $34 to $51 for its clerk; $80 to $140 for case manager (Level 1); $100 to $161 for IT programming consultant; $125 to $150 for case manager (Level 2); $175 to $233 for senior case manager; and $250 for senior consultant. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LENOX 126: Files Chap. 11 Plan & Disclosure Statement ----------------------------------------------------- Lenox 126 Realty LLC filed with the U.S. Bankruptcy Court for the Southern District of New York a Chapter 11 Plan of Reorganization and an accompanying disclosure statement, which provides for the sale of its residential building located at 101 West 126th Street, in New York. The Plan provides for these classification and treatment of claims: Class Treatment ----- --------- Class 1: New York City real Payment in full in Cash of estate tax, water, sewer Allowed Amount on the Effective and other liens senior to Date, plus interest at the the first mortgage of Griffon applicable statutory rate as it Heights LLC. accrues from the Petition Date through the date of payment. Est. Amount: $316,400 Class 2: Griffon Heights LLC Payment of available cash up to Allowed Amount of Class 2 Claim, Est. Amount: $11,826,049 after payment of administration claims, Class 1 Claims, Class 3 Claims, and $250,000 to be allocated to Class 4 payments. Class 3: Priority Claims Payment in full in Cash of under Sections 507(a)(2),(3), Allowed Amount on the Effective (4),(5),(6),(7) and (8) of Date, plus interest at the the Bankruptcy Code. applicable statutory rate as it through the date of payment. Est. Amount: $1,600 Class 4: General Unsecured Each Holder of a General Claims Unsecured Claim will be paid its pro-rata share of a (a) $250,000 Est. Amount: $6,327,449 minimum distribution fund to be carved out from the Mortgagee's Claims include (a) Griffon distribution as a Class 2 Heights LLC $3,142,449 claimant, and (b) its pro-rata mortgage deficiency claim, share of the proceeds of any (b) 31 Rockaway LLC recovery made by the Debtor in $2,500,000 unpaid note, (c) connection with the prosecution insider claims of Calabrese of its pending lawsuits against Investors LLC in the amount third parties. The Mortgagee of $600,000, Kurzman Eisenberg waives its right to a et al. in the amount of distribution as Class 4 Claimant $22,000 and Lorenzo Deluca, but not its right to vote as a Esq. in the amount of $45,000 a class 4 Claimant. The Debtor's and (d) various vendor claims insiders waive their right to a in the amount of approximately distribution from the $250,000 $18,000. carve out, but not their right to a distribution from the proceeds of pending lawsuits. 31 Rockaway LLC waives its right to a distribution from the proceeds of pending lawsuits but not from the $250,000 carve out. The Debtor estimates a 10% recovery to creditors entitled to distribution from the $250,000 carve out. Distribution from proceeds of pending lawsuits is speculative at this time. Class 5: Equity Interests Equity interests will be paid the amount as may be available, if any, after payment of all senior classes of Claims under the Plan. The Debtor estimates no distribution to Equity Interests. A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?76e4 About Lenox 126 Realty Staten Island-based real estate investor Lorenzo De Luca, through his Lenox 126 Realty LLC, filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 11-12275) on May 12, 2011, to block a foreclosure sale at his apartment building at 321 Lenox Avenue in New York. Mr. De Luca paid $9.1 million for the building in 2006. Mr. De Luca defaulted on a $7.5 million loan from Chinatrust bank, which later sold the first mortgage to Delshah Capital. In March, State Supreme Court Justice Jane Solomon ordered the property be sold at auction. In its schedules, Lenox 126 Realty disclosed $10,377,689 in assets and $14,718,905 in liabilities as of Chapter 11 filing. Judge Sean H. Lane presides over the case. No committee has been appointed to date in this case. LYDIAN SF: Sec. 341 Creditors' Meeting Set for Oct. 3 ----------------------------------------------------- The U.S. Trustee for the Northern District of California will hold a First Meeting of Creditors pursuant to Sec. 341(a) of the Bankruptcy Code in the Chapter 11 cases of Lydian SF Holdings LLC and First Street Holdings NV LLC, on Oct. 3, 2011. The meeting with the First Street creditors will be at 9:00 a.m. at Oakland U.S. Trustee Office. The meeting with the Lydian creditors will be at 10:00 a.m. The debtor's representative must be present at the meeting to be questioned under oath by the trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be continued and concluded at a later date without further notice. The court, after notice and a hearing, may order that the United States trustee not convene the meeting if the debtor has filed a plan for which the debtor solicited acceptances before filing the case. Proofs of claim are due by Jan. 3, 2012. About Lydian and First Street Holdings Lydian SF Holdings LLC and First Street Holdings NV LLC, in Oakland, California, filed separate Chapter 11 petitions (Bankr. N.D. Calif. Case Nos. 11-49301 and 11-49300) on Aug. 30, 2011. Judge Roger L. Efremsky presides over the First Street case while Judge Edward D. Jellen oversees the Lydian case. Iain A. Macdonald, Esq., at MacDonald and Associates, serves as the Debtors' counsel. Both Lydian and First Street estimated $50 million to $100 million in assets and $10 million to $50 million in debts. The petitions were signed by Graham Seel, SVP of CMR Capital, LLC, manager. LYDIAN SF: Status Conference Set for Oct. 13 -------------------------------------------- The Bankruptcy Court scheduled a Status Conference in Lydian SF Holdings LLC's Chapter 11 case for Oct. 13, 2011, at 2:30 p.m. at Oakland Room 215. Lydian SF Holdings LLC and First Street Holdings NV LLC, in Oakland, California, filed separate Chapter 11 petitions (Bankr. N.D. Calif. Case Nos. 11-49301 and 11-49300) on Aug. 30, 2011. Judge Roger L. Efremsky presides over the First Street case while Judge Edward D. Jellen oversees the Lydian case. Iain A. Macdonald, Esq., at MacDonald and Associates, serves as the Debtors' counsel. Both Lydian and First Street estimated $50 million to $100 million in assets and $10 million to $50 million in debts. The petitions were signed by Graham Seel, SVP of CMR Capital, LLC, manager. MADISON 92ND: Owner Fights Dismissal, Trustee Request ----------------------------------------------------- Dow Jones' DBR Small Cap reports that the owner of a Manhattan Courtyard by Marriott hotel is defending itself against an attempt to wrest control of the case from its grasp or throw out the proceedings altogether. As reported in the Sept. 8, 2011 edition of the TCR, Robert Gladstone, as co-managing member of the debtor Madison 92nd Street Associates, LLC, John Lesher and Andrew Harris, as members of the Debtor, have sought an order from the U.S. Bankruptcy Court for the Southern District of New York (i) dismissing the Chapter 11 case pursuant to Section 1112(b) of the Judiciary and Judicial Procedure Code, or, (ii) in the alternative, appointing a (y) Chapter 11 trustee pursuant to Sections 1104(a)(1) and (2) of the Judiciary and Judicial Procedure Code or (z) Chapter 11 examiner pursuant to Section 1104(c)(1) of the Judiciary and Judicial Procedure Code. On behalf of the Gladstone Parties, Adam H. Friedman, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP, in New York, asserts that the case should either be dismissed or a Chapter 11 trustee or examiner appointed because the Debtor's purported co- managing members -- 92nd St. Hotel Associates LLC, controlled by Louis Taic, and JKNY, LLC, owned by Jeffrey Kosow -- have: (i) Filed the bankruptcy case without corporate authority in direct contravention of the provisions of the Debtor's Operating Agreement; and (ii) Breached their fiduciary duty to the Debtor and its members by "knowingly" violating the Operating Agreement, by Hotel Associates reneging on its commitment to sign a fully negotiated $86,000,000 stalking horse sale contract, which would have paid creditors in full and provided a significant return to equity, and engaging in a strategy to "squeeze" the Gladstone Parties to sell their membership interest at a steep discount. About Madison 92nd Street Associates Madison 92nd Street Associates, LLC, owns real property improved by a hotel located at 410 East 92nd Street, New York, known as the Upper East Side Courtyard by Marriott. It filed for Chapter 11 bankruptcy protection as lender General Electric Capital Corp., owed $74 million, has scheduled a foreclosure sale for Aug. 24, 2011. The petition (Bankr. S.D.N.Y Case No. 11-13917) was filed Aug. 16, 2011, before Judge Stuart M. Bernstein. J. Ted Donovan, Esq., at Goldberg Weprin Finkel Goldstein LLP, serves as the Debtor's counsel. It scheduled $84,471,069 in assets and $75,398,580 in debts. The petition was signed by Louis Taic, managing member of 92nd Hotel Associates, LLC and Jeffrey Kosow, managing member of JKNY, LLC, members of the Debtor. Courtyard Management Corporation, which manages and operates the hotel pursuant to a management agreement, is represented by: Thomas R. Califano, Esq. William M. Goldman, Esq. DLA PIPER LLP (US) 1251 Avenue of the Americas New York, NY 10020 Telephone: (212) 335-4500 Facsimile: (212) 335-4501 E-mail: william.m.goldman@dlapiper.com thomas.califano@dlapiper.com MARCO POLO: Lenders Call DIP Loan "Unfair Insider Transaction" -------------------------------------------------------------- Secured creditors of Marco Polo Seatrade B.V. and its debtors lodged objections to the Debtors' motion before the U.S. Bankruptcy Court to access up to $4,800,000 in postpetition financing. The Royal Bank of Scotland plc alleges that the DIP Motion is a transparent attempt by the Debtors, working in concert with their insider lender to hijack the bankruptcy process for the benefit of their out-of-the-money equity holder. "The inherently unfair and unreasonable terms of the proposed DIP financing reveal the Debtors' effort to entrench their existing equity holder and provide it with leverage in the bankruptcy process on the backs of RBS and other secured creditors in the Debtors' Chapter 11 cases," Sharon J. Richardson, Esq., at Cadwalader, Wickersham & Taft LLP, in New York -- sharon.richardson@cwt.com -- counsel to RBS, contends. Credit Agricole Corporate and Investment Bank complains that the funds that the Debtors propose to use for DIP Financing, the funds of Futmarine B.V. held in an account at Credit Agricole, are funds that are the property of MPS already since those funds were to be distributed to MPS as a share premium. Counsel to Credit Agricole, Alfred E. Yudes, Jr., Esq., at Watson, Farley & Williams LLP, in New York -- ayudes@wfw.com -- stresses that there is simply no way the same funds can provide security to multiple parties, as well as adequate protection for everything that the Debtors choose to do. DIP Financing The Debtors are asking the Court for authorization: a. to borrow up to US$2,400,000 in principal amount, on an interim basis, and up to US$4,800,000 in principal amount, on a final basis, of postpetition financing from Futmarine B.V.; b. to grant certain priming liens and superpriority claims to the DIP lender to secure the Debtors' obligations under the DIP agreement; and c. for the DIP Lender to require repayment of the DIP Facility in full or conversion into equity pursuant to a plan of reorganization, or any combination of the foregoing, upon an event triggering the Stated Maturity Date in accordance with the DIP Agreement. The Debtors relate that they were able to acquire postpetition financing on favorable terms from Futmarine, B.V., a non-debtor joint venture 50% owned by MPS, whose only assets are two unencumbered bank accounts holding about $4.89 million. The cash is the net proceeds generated by the sale of unfinished shipping assets and will be used to provide the DIP facility. The Debtors will use the money to fund new voyages, operate their businesses and administer these cases, the Debtors believe that the DIP Facility will enable them to maximize the value of their assets for the benefit of all stakeholders. As of the Petition Date, the Debtors had prepetition secured indebtedness of approximately US$211,743,838 The Court will hold a hearing on the DIP Motion on Sept. 15, 2011. About Marco Polo Marco Polo Seatrade B.V. operates an international commercial vessel management company that specializes in providing commercial and technical vessel management services to third parties. Founded in 2005, the Company mainly operates under the name of Seaarland Shipping Management and maintains corporate headquarters in Amsterdam, the Netherlands. The primary assets consist of six tankers that are regularly employed in international trade, and call upon ports worldwide. Marco Polo and three affiliated entities filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29, 2011. The other affiliates are Seaarland Shipping Management B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V. Marco Polo is the sole owner of Seaarland, which in turn is the sole owner of Cargoship, and also holds a 5% stake in Magellano. The remaining 95% stake in Magellano is owned by Amsterdam-based Poule B.V., while another Amsterdam company, Falm International Holding B.V. is the sole owner of Marco Polo. Falm and Poule didn't file bankruptcy petitions. The filings were prompted after lender Credit Agricole Corporate & Investment Bank seized one ship on July 21, 2011, and was on the cusp of seizing two more on July 29. The arrest of the vessel was authorized by the U.K. Admiralty Court. Credit Agricole also attached a bank account with almost US$1.8 million on July 29. The Chapter 11 filing precluded the seizure of the two other vessels. Evan D. Flaschen, Esq., Robert G. Burns, Esq., and Andrew J. Schoulder, Esq., at Bracewell & Giuliani LLP, serve as bankruptcy counsel. The cases are before Judge James M. Peck. Kurtzman Carson Consultants LLC serves as notice and claims agent. The petition noted that the Debtors' assets and debt are both more than US$100 million and less than US$500 million. Tracy Hope Davis, United States Trustee for Region 2, appointed three members to serve on the Official Committee of Unsecured Creditors. The Committee has retained Blank Rome LLP as its attorney. Secured lender Credit Agricole Corporate and Investment Bank is represented by Alfred E. Yudes, Jr., Esq., and Jane Freeberg Sarma, Esq., at Watson, Farley & Williams (New York) LLP. MARY A II: Files Proposed Reorganization Plan --------------------------------------------- The Mary A II, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Florida its plan of reorganization and accompanying disclosure statement on Aug. 29, 2011. The Plan generally provides for these terms: (a) The payment in full of all Allowed Administrative Expense Claims and Allowed Priority Claim on the Effective Date or upon other terms as the Debtor and the holder of each Allowed Administrative Expense Claim and Allowed Priority Claim will agree. These claims are estimated to be no more than $100,000; (b) The Class 1 Claim of Spur Ranch, LLC, will retain its lien on the Debtor's real property located in Brevard County, Florida, and be paid 4% interest, interest only payments for 2 years, with principal and interest payments commencing in year 3 based upon a 20 year amortization and a 3 year balloon payment. Additionally, as Credits are sold, Spur Ranch will receive 75% of all proceeds to be applied as principal reductions. The Debtor reserves the right to challenge all or a portion of the Class 1 Claim, which is approximately $5.2 Million and is subject to dispute; (c) The unsecured Allowed Claims of governmental units for unpaid taxes, interest and assessments, if any, entitled to priority under Section 507(a)(8) of the Bankruptcy Code will be paid in full in cash on the Effective Date or over time as provided for in the Bankruptcy Code. The Debtor estimates these claims to be less than $250,000; (d) Class 2 Note Holders will be paid quarterly payments based upon 4% interest, interest only payments for two years, with principal and interest payments commencing in year 3 and a 3 year balloon payment. Class 2 Note Holders will be paid from the sale proceeds of Credits, after the payments to Spur Ranch or upon additional funding raised or issued by the Reorganized Debtor, if necessary. These Claims aggregate approximately $2 Million; (e) Class 3 General Unsecured Creditors will receive payment in full with a payment of 50% on the Effective Date and 50% on the one year anniversary of the Effective Date. These claims are estimated to be less than $50,000; and (f) Equity Security Holders will retain their interests in the Debtor. The Claims in Classes in 1, 2 and 3 are Impaired and, thus, may vote either to accept or reject the Plan. Upon the Effective Date, the Debtor will make disbursements pursuant to the Plan. In accordance with, and subject to, the provisions of the Plan, the Reorganized Debtor will continue to conduct the day-to-day operations of its business. The Plan contemplates continued management by the Debtor through James Rudnick for the necessary operation of the Reorganized Debtor's business. Mr. Rudnick will not be paid any salary. Copies of the Plan and Disclosure Statement are available for free at: * http://bankrupt.com/misc/MARYAII_Ch11Plan_082911.pdf * http://bankrupt.com/misc/MARYAII_DiscStatement_082911.pdf About Mary A II Tallahassee, Florida-based The Mary A II, LLC, is the owner of real property located in Brevard County, Florida, which was originally acquired in 2004 and was placed in a conservation easement. Ultimately, the Property became a wetlands mitigation bank, which sells credits to developers or other entities that need to impact wetlands. The Company holds the right to sell approximately 937.69 mitigation credits approved and permitted by the St. Johns River Water Management District and 847.92 mitigation credits approved and permitted by the U.S. Army Corps of Engineers. The Company said it is in negotiations for the sale of certain credits that could realize in excess of $5 million. Mary A II filed for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 11-40693) on Aug. 29, 2011. Brian G. Rich, Esq., at Berger Singerman PA serves as the Debtor's bankruptcy counsel. The Debtor scheduled $26,083,816 in assets and $7,380,600 in debts. The petition was signed by James M. Rudnick, managing member. MARY A II: Lender Seeks Dismissal of Chapter 11 Case ---------------------------------------------------- Spur Ranch, LLC, asks the United States Bankruptcy Court for the Northern District of Florida to dismiss The Mary A II, LLC's Chapter 11 case for bad faith and pursuant to Section 1112(b)(1) of the Bankruptcy Code. Spur Ranch is the owner and holder of a loan made by Federal Trust Bank to the Debtor in the original principal amount of $6,650,000, Lori V. Vaughan, Esq., at Trenam, Kemker, Scharf, Barkin, Frye, O'neill & Mullis, P.A., in Tampa, Florida -- lvaughan@trenam.com - - informs the Court. She adds that as security for the Loan, the Debtor pledged certain real and personal property, and assigned certain rents, leases, profits and contracts. The Property that serves as collateral for the Loan includes 2,068 acres of land at the Southern Border of Brevard County in the St. Johns River Water Management District. After the Debtor's failure to make loan payments on July 17, 2009, Spur Ranch filed an action to foreclose the mortgage on the Property and to collect on a guaranty provided by the Debtor's principal, James Rudnick. The action is currently pending in the Circuit Court for with Eighteenth Judicial Circuit in and for Brevard County, Florida, as case no. 2010-CA-032241. Ms. Vaughan notes that Spur Ranch is owed approximately $8 million. Ms. Vaughan contends that the bankruptcy case should be dismissed as a litigation tactic and attempt to avoid the legitimate Foreclosure Action of Spur Ranch. She argues that the Debtor filed the bankruptcy case hours before a summary judgment hearing where it had little to no defense and months after a receiver was appointed over its property by reason of its failure to adequately maintain and remedy serious problems on the Property. Even more telling, Ms. Vaughan asserts, the Debtor waited nearly three months after a receiver was appointed and only after the receiver took the actions that the Debtor was either unwilling or unable to take to bring the property into compliance. Hence, she points out, the Debtor's actions demonstrate its bad faith in the filing of this case and form the basis for the Court to dismiss the case. About Mary A II Tallahassee, Florida-based The Mary A II, LLC, is the owner of real property located in Brevard County, Florida, which was originally acquired in 2004 and was placed in a conservation easement. Ultimately, the Property became a wetlands mitigation bank, which sells credits to developers or other entities that need to impact wetlands. The Company holds the right to sell approximately 937.69 mitigation credits approved and permitted by the St. Johns River Water Management District and 847.92 mitigation credits approved and permitted by the U.S. Army Corps of Engineers. The Company said it is in negotiations for the sale of certain credits that could realize in excess of $5 million. Mary A II filed for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 11-40693) on Aug. 29, 2011. Brian G. Rich, Esq., at Berger Singerman PA serves as the Debtor's bankruptcy counsel. The Debtor scheduled $26,083,816 in assets and $7,380,600 in debts. The petition was signed by James M. Rudnick, managing member. MARY A II: Sec. 341 Creditors Meeting Set for Oct. 5 ---------------------------------------------------- The United States Trustee for Region 21 will hold a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341 in the bankruptcy case of The Mary A II, LLC, on Oct. 5, 2011, at 11:00 a.m. at the Office of the United States Trustee in Room 004, U.S. Trustee Meeting Room, located at 110 East Park Avenue, Suite 128, in Tallahassee, Florida. Deadline for filing general proofs of claim is on Jan. 5, 2012. Government proofs of claim are due on April 2, 2012. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. The Debtor's representative must be present at the meeting to be questioned under oath by the trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be continued and concluded at a later date without further notice. About Mary A II Tallahassee, Florida-based The Mary A II, LLC, is the owner of real property located in Brevard County, Florida, which was originally acquired in 2004 and was placed in a conservation easement. Ultimately, the Property became a wetlands mitigation bank, which sells credits to developers or other entities that need to impact wetlands. The Company holds the right to sell approximately 937.69 mitigation credits approved and permitted by the St. Johns River Water Management District and 847.92 mitigation credits approved and permitted by the U.S. Army Corps of Engineers. The Company said it is in negotiations for the sale of certain credits that could realize in excess of $5 million. Mary A II filed for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 11-40693) on Aug. 29, 2011. Brian G. Rich, Esq., at Berger Singerman PA, serves as the Debtor's bankruptcy counsel. The Debtor scheduled $26,083,816 in assets and $7,380,600 in debts. The petition was signed by James M. Rudnick, managing member. MARY A II: Taps Berger Singerman as Chapter 11 Counsel ------------------------------------------------------ The Mary A II, LLC, seeks authority from the U.S. Bankruptcy Court for the Northern District of Florida to employ Brian G. Rich, Esq., and his law firm, Berger Singerman, P.A., as counsel to the Debtor, nunc pro tunc to the Petition Date. As counsel, Berger Singerman will: -- advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's guidelines and with the rules of the Court; -- prepare motions, pleadings, orders, applications, adversary proceedings and other legal documents necessary in the administration of the bankruptcy case; -- protect the interests of the Debtor in all matters pending before the Court; and -- represent the Debtor in negotiations with their creditors and in the preparation of a plan of reorganization. Berger Singerman received a $50,000 prepetition retainer from the Debtor, which was deposited into the Firm's trust account. Berger Singerman applied $25,000 from the Retainer toward payment in full of certain prepetition fees and expenses. Berger Singerman will hold the remainder of the Retainer as security for the fees and costs that may be awarded to it by the Court in the case. The Debtor will pay Berger Singerman for its services based on its current hourly rates, which range from $225 to $625 for attorneys. Mr. Rich's current hourly rate is $465. The current hourly rates for the legal assistants and paralegals range from $75 to $195. Mr. Rich, a shareholder at Berger Singerman, discloses that a search of the Firm's conflicts check system revealed these matters, none of which impairs his or the Firm's disinterestedness or constitutes any conflict of interest: (a) James M. Rudnick, the managing member of the Debtor, is also the managing member of Milan Condominium Developers, LLC. Berger Singerman represents Milan in a matter that is wholly unrelated to the Debtor's case; and (b) There are numerous creditors of the Debtor, which have been creditors of, or adverse to, other entities represented by Berger Singerman in cases and matters wholly unrelated to the case. These creditors include Federal Trust Bank, Internal Revenue Service and Brevard County Tax Collector. Mr. Rich attests that Berger Singerman neither holds nor represents any interest adverse to the Debtor and is a "disinterested person" within the scope and meaning of Section 101(14) of the Bankruptcy Code. About Mary A II Tallahassee, Florida-based The Mary A II, LLC, is the owner of real property located in Brevard County, Florida, which was originally acquired in 2004 and was placed in a conservation easement. Ultimately, the Property became a wetlands mitigation bank, which sells credits to developers or other entities that need to impact wetlands. The Company holds the right to sell approximately 937.69 mitigation credits approved and permitted by the St. Johns River Water Management District and 847.92 mitigation credits approved and permitted by the U.S. Army Corps of Engineers. The Company said it is in negotiations for the sale of certain credits that could realize in excess of $5 million. Mary A II filed for Chapter 11 bankruptcy (Bankr. N.D. Fla. Case No. 11-40693) on Aug. 29, 2011. Brian G. Rich, Esq., at Berger Singerman PA serves as the Debtor's bankruptcy counsel. The Debtor scheduled $26,083,816 in assets and $7,380,600 in debts. The petition was signed by James M. Rudnick, managing member. MERIT GROUP: Now TMG Liquidation Following Sale ----------------------------------------------- The Merit Group, Inc., et al., ask the U.S. Bankruptcy Court for the District of South Carolina to authorize them to change their corporate names and case caption. The Debtors relate that on July 29, 2011, they consummated the sale of substantially all of their assets to MG Distribution, LLC. The Debtors add that pursuant to the APA with, the Debtors will seek to change the caption in the Bankruptcy Case so that none of the seller's names as of the closing date are included in the caption. Th Debtors also inform the creditors and parties-in-interest of the name changes: Previous Company Name New Company Name --------------------- ---------------- The Merit Group, Inc. TMG Liquidation Company Merit Transportation, Inc. MTrans Liquidation Company Merit Paint Sundries, LLC MP Sundries liquidation Company Merit Supply Company, LLC MSupply Liquidation Company Merit Pro Finishing Tools, LLC MPFT Liquidation Company Five Star Products, Inc. FSP Liquidation Company Five Star Group, Inc. FSG Liquidation Company About Merit Group Based in Spartanburg, South Carolina, The Merit Group Inc., formerly Lancaster Distributing Company, serves as one of the leading paint sundries distributors in the United States. Its markets also include Mexico, the Caribbean Islands, Central America and South America. Merit Group filed for Chapter 11 bankruptcy protection (Bankr. D. S.C. Lead Case No. 11-03216) on May 17, 2011. Judge Helen E. Burris presides over the case. Michael M. Beal, Esq., McNair Law Firm PA, represents the Debtors. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent; and Morgan Joseph TriArtisan LLC, investment banker, and Alvarez & Marsal North America, LLC, as financial advisors. Merit Group disclosed 7,004,048 in assets and $66,609,946 in liabilities as of the Chapter 11 filing. DIP Lender Regions Bank is represented by lawyers at Nexsen Pruet Jacobs & Pollard and Parker, Hudson, Rainer & Dobbs, LLP. The U.S. Trustee has named seven members to the Official Committee of Unsecured Creditors. The Committee is represented by Cole, Schotz, Meisel, Forman & Leonard, P.A. The Committee tapped McCarthy Law Firm LLC as co-counsel, J.H. Cohn LLP as its financial advisor. MERIT GROUP: Creditors Have until Oct. 6 to File Proofs of Claim ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Carolina set Oct. 6, 2011, as the last day for any individual or entity to file proofs of claim against The Merit Group, Inc., et al. For governmental units, the proof of claim deadline is Nov. 14. Proofs of claim must be filed with: The Merit Group, Inc., et al. Claims Processing Center C/O KURTZMAN CARSON CONSULTANTS LLC 2335 Alaska Avenue El Segundo, CA 90245 Tel: (877) 573-3978 Web site: www.kccllc.net/MeritGroup About Merit Group Based in Spartanburg, South Carolina, The Merit Group Inc., formerly Lancaster Distributing Company, serves as one of the leading paint sundries distributors in the United States. Its markets also include Mexico, the Caribbean Islands, Central America and South America. Merit Group filed for Chapter 11 bankruptcy protection (Bankr. D. S.C. Lead Case No. 11-03216) on May 17, 2011. Judge Helen E. Burris presides over the case. Michael M. Beal, Esq., McNair Law Firm PA, represents the Debtors. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent; and Morgan Joseph TriArtisan LLC, investment banker, and Alvarez & Marsal North America, LLC, as financial advisors. Merit Group disclosed 7,004,048 in assets and $66,609,946 in liabilities as of the Chapter 11 filing. DIP Lender Regions Bank is represented by lawyers at Nexsen Pruet Jacobs & Pollard and Parker, Hudson, Rainer & Dobbs, LLP. The U.S. Trustee has named seven members to the Official Committee of Unsecured Creditors. The Committee is represented by Cole, Schotz, Meisel, Forman & Leonard, P.A. The Committee tapped McCarthy Law Firm LLC as co-counsel, J.H. Cohn LLP as its financial advisor. MERIT GROUP: Committee to Be Co-Proponent, Has More Work for Atty. ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in the Chapter 11 cases of The Merit Group, Inc., et al., asks the U.S. Bankruptcy Court for the District of South Carolina to expand the scope of retention of J.H. Cohn LLP as its financial advisors. The Committee relates that the Debtor and the Committee will be co-proponents to the proposed plan of reorganization or liquidation. In light of the development, the Committee will require certain services from J.H. Cohn, in addition to monitoring post-sale activities, as: a) assisting and advising the Committee in investigating and evaluating potential causes of action of the Debtors' estates, including but not limited to, causes of action under Chapter 5 of the Bankruptcy Code; b) assisting and advising the Committee with respect to the joint plan and confirmation thereof; and c) providing testimony, as necessary, at the hearing on confirmation of the joint plan. Clifford A. Zucker, CPA, partner of J.H. Cohn, tells the Court that the compensation for the additional services will be payable to J.H. Cohn on an hourly basis, plus reimbursement of actual, necessary expenses. The professionals from J.H. Cohn designated to have primary responsibility in representing the Committee, and their standard hourly rates, are: Clifford A. Zucker, partner $650 Roberta Probber, manager $480 The range of the professionals' hourly rates generally are: Partners $580 - $790 Managers, Senior Managers, and Directors $420 - $610 Other Professional Staff $260 - $400 Mr. Zucker assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Zucker can be reached at: Clifford A. Zucker, CPA J.H. COHN LLP 333 Thornall Street Edison, NJ 08837 E-mail: czucker@jhcohn.com The Committee is represented by: MCCARTHY LAW FIRM, LLC G. William McCarthy, Jr., Esq. Daniel J. Reynolds, Jr., Esq. 3924 Forest Drive, Suite 9 P.O. Box 11332 Columbia, SC 29211-1332 Tel: (803) 771-8836 Fax: (803) 753-6960 COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A. Irving E. Walker, Esq. G. David Dean, Esq. 300 E. Lombard Street, Suite 2000 Baltimore, MD 21202 Tel: (410) 528-2972 Fax: (410) 230-0667 E-mails: iwalker@coleschotz.com ddean@coleschotz.com About Merit Group Based in Spartanburg, South Carolina, The Merit Group Inc., formerly Lancaster Distributing Company, serves as one of the leading paint sundries distributors in the United States. Its markets also include Mexico, the Caribbean Islands, Central America and South America. Merit Group filed for Chapter 11 bankruptcy protection (Bankr. D. S.C. Lead Case No. 11-03216) on May 17, 2011. Judge Helen E. Burris presides over the case. Michael M. Beal, Esq., McNair Law Firm PA, represents the Debtors. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent; and Morgan Joseph TriArtisan LLC, investment banker, and Alvarez & Marsal North America, LLC, as financial advisors. Merit Group disclosed 7,004,048 in assets and $66,609,946 in liabilities as of the Chapter 11 filing. DIP Lender Regions Bank is represented by lawyers at Nexsen Pruet Jacobs & Pollard and Parker, Hudson, Rainer & Dobbs, LLP. The U.S. Trustee has named seven members to the Official Committee of Unsecured Creditors. The Committee is represented by Cole, Schotz, Meisel, Forman & Leonard, P.A. The Committee tapped McCarthy Law Firm LLC as co-counsel, J.H. Cohn LLP as its financial advisor. MP-TECH AMERICA: JH Industry OK'd to Buy Substantially All Assets ----------------------------------------------------------------- The Hon. Dwight H. Williams, Jr., of the U.S. Bankruptcy Court for the Middle District of Alabama authorized MP-Tech America, LLC to sell substantially all of its assets to JH Industry, Inc. Pursuant to that certain asset purchase agreement, dated as of Aug. 4, 2011, the Debtor will, among other things (i) sell substantially all of its assets free and clear of all encumbrances; (ii) assume and sell and assign certain executory contracts and unexpired leases to the buyer. As reported in the Troubled Company Reporter on July 20, 2011, Joon LLC, d/b/a Ajin USA, the Debtor's DIP lender, has submitted an initial bid of $22,000,000 to purchase the property. The Initial Bid includes, as part of the bid value, the assumption of the Debtor's loan obligations to Korean Development Bank, which holds a first priority security interest in the Property securing the Debtor's prepetition debt of approximately $15,077,000. The Initial Bid is subject to Ajin successfully renegotiating pricing on certain of the Debtor's contracts to be assigned The Debtor related that no potential bidder other than buyer submitted a bid, and no auction was conducted. The Court also authorized and directed the Debtor to deposit and hold in escrow the purchase price, and furthermore to reserve or make distributions from the purchase price on the Closing Date in the order and priority set forth as: a. The Debtor will pay, without further order of the Court, $15,200,000 in cash to The Korea Development Bank in partial satisfaction of KDB's Claim, and the loans and other obligations of the Debtor. b. The Debtor will pay, without further order of th Court, $1,800,000 in cash to International Industrial Contracting Corporation in partial satisfaction of IICC's Claim, and the obligations of the Debtor. c. The Debtor will deposit, without further order of the Court, $150,000 in cash into a reserve account, which may be a law firm trust account titled to Debtor's counsel, to be used to pay allowed fees and expenses of court-approved professionals employed by the Debtor and the Committee, which funds may be distributed only upon further order of the Court. If, at the close of this case, Professional Reserve Account contains a balance after paying all allowed fees and expenses of the foregoing professionals, the balance may be distributed pursuant to further order of the Court following notice and opportunity for a hearing. The Debtor, Joon, LLC, the Committee, KDB, and IICC have consented to the foregoing professional claims, to the extent allowed, and the professionals' claims upon the funds in the Professional Reserve Account as being deemed senior in priority to the secured or administrative expense claims of Joon, LLC, KDB, and IICC. d. The Debtor will deposit, without further order of the Court,the balance of the purchase price in cash into a reserve account, which may be a law firm trust account titled to Debtor's counsel. About MP-Tech America Cusseta, Alabama-based MP-Tech America, LLC, is the maker of parts for Kia Motors Corp. and Hyundai Motor Co. at their plants in Georgia and Alabama. It filed a Chapter 11 petition (Bankr. M.D. Ala. Case No. 11-30895) on April 8, 2011. The Debtor estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. The Debtor has a $15 million secured debt to Korea Development Bank. The Debtor is represented by Michael A. Fritz, Sr., Esq., at Fritz Hughes & Hill, LLC, in Montgomery, Alabama, and Joseph J. Burton, Jr., Esq., at Burton & Armstrong, LLP, in Atlanta, Georgia. EXIM Bank, Venture Express, Woori Bank, Sunkyoung, ICS & M, Inc., and Midsouth Employee Services Corp. were appointed members to the Official Committee of Unsecured Creditors. The Committee is represented by Clark R. Hammond, Esq., and Lindan J. Hill, Esq., at Johnston Barton Proctor & Rose LLP, in Birmingham, Alabama. MT. ZION: Hearing on PNC Bank's Cash Access Set for Sept. 15 ------------------------------------------------------------ The Hon. Pamela S. Hollis of the U.S. Bankruptcy Court for the Northern District of Illinois has continued until Sept. 15, 2011, at 10:30 a.m., the hearing to consider Mt. Zion Limited Partnership's request for cash collateral use. The Court authorized, in a sixth order amending fourth interim cash collateral order, to use the cash collateral until Sept. 15, 2011. The Debtor would use the cash collateral to fund its Chapter 11 case, pay suppliers and other parties. As reported in the Troubled Company Reporter on May 6, 2010, the bank asserts a senior position mortgage lien and claim against the Debtor's residential apartment project in Florence, Kentucky, known as Woodspring Apartments, which purportedly secures a mortgage indebtedness of approximately $28,850,000. The bank also asserts a security interest in and lien upon the rents being generated at the property. The Debtor is also authorized to grant certain liens and provide adequate protection and other relief to PNC Bank, National Association. About Mt. Zion Limited Partnership Lake Forest, Illinois-based Mt. Zion Limited Partnership, dba Woodspring Apartments, owns and operates a residential apartment project located in Florence, Kentucky, known as Woodspring Apartments. The Company filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 10-18075) on April 23, 2010. David K Welch, Esq., at Crane Heyman Simon Welch & Clar, assists the Debtor in its restructuring effort. The Company estimated its assets and debts at $10 million to $50 million as of the Petition Date. NAVISTAR INTERNATIONAL: Wellington Discloses 10% Equity Stake ------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Wellington Management Company, LLP, disclosed that as of Aug. 31, 2011, it beneficially owns 7,290,064 shares of common stock of Navistar International Corporation representing 10.02% of the shares outstanding. As previously reported by the TCR on March 2, 2011, Wellington disclosed beneficial ownership of 4,809,225 shares or 6.67% equity stake. A full-text copy of the new filing is available for free at http://is.gd/qlAgAa About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. The Company's balance sheet at July 31, 2011, showed $11.17 billion in total assets, $10.42 billion in total liabilities, $5 million in redeemable equity securities and $752 million in total stockholders' equity. * * * Navistar has a 'BB-/Stable/--' corporate credit rating from Standard & Poor's and a 'B1' Corporate Family Rating and Probability of Default Rating from Moody's Investors Service. Moody's said in October 2010 that Navistar's B1 rating could improve if the North American truck market remains on track for a sustained recovery into 2011, and Navistar's operational initiatives to moderate its vulnerability to the truck cycle show evidence of taking hold. NEW ENGLAND REALTY: Gets Notice of Noncompliance From NYSE Amex --------------------------------------------------------------- New England Realty Associates Limited Partnership disclosed that on September 9, 2011, it received a notification letter from the Corporate Compliance Department of the NYSE Amex Exchange indicating that as of June 30, 2011, the Partnership is not in compliance with the minimum stockholders' equity requirement for continued listing of the Partnership's Depositary Receipts on the NYSE Amex as set forth in Section 1003(a)(i) of the NYSE Amex Company Guide (the "Company Guide"), which requires the Partnership to have a minimum stockholders' equity of at least $2 million or net profits and profits from continuing operations in two out of the three most recent fiscal years. The Partnership acknowledges that as of June 30, 2011, it is no longer in compliance with Section 1003(a)(i) of the Company Guide. The NYSE Amex notification letter has no immediate effect on the listing or trading of the Partnership's Depositary Receipts on the NYSE Amex, nor will it have any effect on the Partnership's financial condition or results of operations. Due to its unique capital structure as a public limited partnership with exchange listed Depositary Receipts, the Partnership does not believe that stockholders' equity is a financial measure indicative of any financial condition or results of operations of the Partnership. The Partnership has been given 30 calendar days, or until October 10, 2011, to submit to the NYSE Amex a plan of compliance (the "Compliance Plan") addressing how the Partnership intends to regain compliance with Section 1003(a)(i) of the Company Guide within the next 18 months, or by March 11, 2013. If the Corporate Compliance Department of the NYSE Amex determines that the Compliance Plan does not reasonably demonstrate the Partnership's ability to regain compliance with Section 1003(a)(i) of the Company Guide, or if the Partnership otherwise fails to make progress consistent with the Compliance Plan, then the Corporate Compliance Department of the NYSE Amex will provide written notice that the Partnership's Depositary Receipts are subject to delisting from the NYSE Amex. At that time, the Partnership will be permitted to appeal the determination of the Corporate Compliance Department to a Listing Qualifications Panel. The Partnership intends to submit a Compliance Plan to the Corporate Compliance Department of the NYSE Amex within the time period requested and anticipates that the Partnership will regain compliance with Section 1003(a)(i) of the Company Guide within the next 12 to 15 months. NEW JERSEY DEVILS: Denies NY Post Report on Bankruptcy ------------------------------------------------------ The Associated Press reports that the New Jersey Devils said in a statement that a New York Post article that said the team is facing bankruptcy was inaccurate. The AP also reports the Devils disclosed that the team's minority owner, Brick City LLC, is finalizing a deal to sell its interest in the NHL team and give managing partner Jeff Vanderbeek some new partners. Brick City LLC is the legal name for the Devils share owned by Ray Chambers and Mike Gilfillan, his son-in-law. Quoting a source, The Post said team missed its Sept. 1 loan payment, giving its lenders a breakaway chance to push the team into bankruptcy. The newspaper also said the team had a bad relationships with its banks. According to the AP, the Devils said in a statement, "The notions that the Devils are facing bankruptcy or that 'the Devils have told their banks to get lost' are patently untrue." The team said, "The Devils value their relationship with their banks and are confident a refinancing will be completed shortly." Brick City hired Moag & Co., a Baltimore-based investment bank, to assist in its attempt to sell its share of the team. NEWPAGE CORP: Wisconsin Rapids City Members to Meet Debtor ---------------------------------------------------------- Wisconsin Rapids Tribune reports that Mayor Mary Jo Carson said staff members of the city of Wisconsin Rapids, Wisconsin, are meeting with a local NewPage Corp. representative. Mayor Carson, along with Adam Tegen, the city's planning and economic development director, were scheduled to meet on Sept. 13 with local NewPage spokesman Cliff Bowers, following the company's announcement last week that it filed for Chapter 11 bankruptcy protection. The report says the city is willing to help the company in any way it can during the papermaker's restructuring process, Mayor Carson said. Meanwhile, state officials continue their efforts to set up meetings with company leaders. About NewPage Corporation Headquartered in Miamisburg, Ohio, NewPage Corporation is the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended December 31, 2010. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers. These papers are used for corporate collateral, commercial printing, magazines, catalogs, books, coupons, inserts, newspapers, packaging applications and direct mail advertising. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a total annual production capacity of approximately 4.1 million tons of paper, including approximately 2.9 million tons of coated paper, approximately 1.0 million tons of uncoated paper and approximately 200,000 tons of specialty paper. NewPage Corporation, along with affiliates, filed Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12804) on Sept. 7, 2011. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., Dewey & Leboeuf LLP, in New York, serve as counsel. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, the Debtors disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011 OMEGA NAVIGATION: Court OKs Jefferies & Co as Investment Banker --------------------------------------------------------------- Omega Navigation Enterprises Inc. and its debtor affiliates sought and obtained the U.S. Bankruptcy Court for the Southern District of Texas for permission to employ Jefferies & Company Inc. as their financial advisor and investment banker. The firm will assist the Debtors to develop ongoing business and financial plans that will be necessary during the Debtors' Chapter 11 cases. The firm will be paid in this manner: Monthly Fee: US$125,000 until the expiration or termination of the engagement DIP Financing Fee: 2% of commitment, provided that such DIP Financing is from a source other than as insider or affiliate of the Debtor or existing lenders Restructuring Fee: US$2,800,000 in the event a restructuring is consummated under the Bankruptcy Code The Debtors assure the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Omega Navigation Athens, Greece-based Omega Navigation Enterprises Inc. and affiliates, owner and operator of tankers carrying refined petroleum products, filed for Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 11-35926) on July 8, 2011, in Houston. Omega is an international provider of marine transportation services focusing on seaborne transportation of refined petroleum products. The Debtors disclosed assets of US$527.6 million and debt totaling US$359.5 million. Together, the Debtors wholly own a fleet of eight high-specification product tankers, with each vessel owned by a separate debtor entity. Bracewell & Giuliani LLP serves as counsel to the Debtors. Jefferies & Company, Inc., is the financial advisor. OMEGA NAVIGATION: Committee Hires Jager Smith as Counsel -------------------------------------------------------- The official committee of unsecured creditors for Omega Navigation Enterprises Inc.'s seeks permission from the U.S. Bankruptcy Court for the Southern District of Texas to employ and retain Jager Smith P.C. as counsel to the Committee effective as of Aug. 22, 2011. Upon retention, the firm, will among other things: (a) provide legal advice to the Committee with respect to its duties and powers in the cases; (b) consult with the Committee and the Debtors concerning administration of the Chapter 11 cases; and (c) assist the Committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors, operation of the Debtors' businesses and the desirability of continuing or selling such business and/or assets, sales under Section 363 of the Bankruptcy Code, and any other matter relevant to the cases; To the best of the Committee's knowledge, Jager Smith has informed the Committee that it does not hold or represent any interest adverse to the Committee or the Debtors' estates. The firm's hourly rates are: Personnel Rates --------- ----- Bruce F. Smith (partner) $650 Steven C. Reingold (partner) $550 Michael J. Fencer (partner) $525 Brendan C. Recupero (associate) $450 Jonathan M. Horne (associate) $250 Paralegals $125 to $175 About Omega Navigation Athens, Greece-based Omega Navigation Enterprises Inc. and affiliates, owner and operator of tankers carrying refined petroleum products, filed for Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 11-35926) on July 8, 2011, in Houston. Omega is an international provider of marine transportation services focusing on seaborne transportation of refined petroleum products. The Debtors disclosed assets of US$527.6 million and debt totaling US$359.5 million. Together, the Debtors wholly own a fleet of eight high-specification product tankers, with each vessel owned by a separate debtor entity. Bracewell & Giuliani LLP serves as counsel to the Debtors. Jefferies & Company, Inc., is the financial advisor. PARAMOUNT LIMITED: Chapter 11 Reorganization Case Dismissed ----------------------------------------------------------- The Hon. Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern District of Michigan dismissed the Chapter 11 cases of Paramount Limited, LLC, et al. As reported in the Troubled Company Reporter on Sept. 6, 2011, the Debtors explained that James V. McTevia, the receiver, already has an established framework to collect Debtors' receivables. The Debtor also stated that there is no reasonable likelihood of being able to rehabilitate their business where they will in a position where they would be able to reorganize and propose a confirmable Plan. The TCR reported on Aug. 10, 2011, that the Police & Fire Retirement System of the City of Detroit, Michigan, and McTevia & Associates, the court-appointed receiver, requested that the Court dismiss the Debtor's case. The receiver contended there is no likelihood that the Debtors can reorganize under Chapter 11 and that the bankruptcy case was filed in bad faith. The Pension Fund asserted the Debtors are incapable of operating their business. The Court also ordered that the Debtors to each pay $325 for a total of $1,300 to the U.S. Trustee on account of Debtors' quarterly fees owed to the Trustee for their cases, which fee payment must be paid from the retainer held by Debtors' counsel, McDonald Hopkins, PLC. About Paramount Limited Paramount Limited LLC was an investor in distressed real estate. Paramount Limited and three other affiliates sought Chapter 11 bankruptcy protection (Bankr. E.D. Mich. Lead Case No. 11-59829) on July 21, 2011, after a state court appointed McTevia & Associates as receiver to take over. The receiver was appointed at the behest of the Police and Fire Retirement System of the city of Detroit, one of Paramount's unsecured creditors, with $13.2 million owed. The Retirement System said Paramount was "a classic Ponzi scheme." Judge Thomas J. Tucker presides over the case. Gene R. Kohut of Kohut Management Group, LLC, has been tapped to serve as their Chief Restructuring Officer. Stephen M. Gross, Esq., and Jayson Russ, Esq., at McDonald Hopkins Plc, serve as bankruptcy counsel. Paramount Limited estimated assets of more than $10 million and debt of less than $10 million. The petition was signed by Abner McWhorter, Paramount's managing member. Affiliates that simultaneously sought Chapter 11 protection are Paramount Land Holdings, LLC; Paramount Servicing, LLC; and Paramount Land Holdings, LLC. The receiver is represented by Couzens Lansky Fealk Ellis Roeder & Lazar P.C. The Police and Fire Retirement System is represented by Racine & Associates. A committee of creditors holding unsecured claims has not been appointed. No chapter 11 trustee or examiner has been appointed in the case. PASTELERIA LORENA: Files for Chapter 7 Bankruptcy Protection ------------------------------------------------------------ Vanessa Small at the Washington Post reports that Pasteleria Lorena LLC at 6168 Arlington Blvd., in Virginia, filed for Chapter 7 protection (Bankr. E.D. Va. Case No. 11-16548). Attorney Januario G. Azarcon represents the Company and can be reached at Tel No. (703) 893-0760. The Company estimated assets of less than $50,00, and liabilities of between $50,000 and $100,000. The Company owes $50,000 to Regency Centers. PAUL BRENNEKE: Case Management Conference Scheduled for Sept. 20 ---------------------------------------------------------------- The Hon. Trish M. Brown of the U.S. Bankruptcy Court for the District of Oregon directed Paul Brenneke Qualified Personal Residence Trust UDT, to appear in a case management conference on Sept. 20, 2011, at 8:30 a.m. The conference is aimed to expedite the Chapter 11 case by establishing early and continuing control, to discourage wasteful litigation activities, and to facilitate settlement of disputed matters. Matters to be discussed at the conference include: 1) Motions for extension of time to assume or reject leases. 2) Motions for relief from stay. 3) Adequate protection. 4) Operation of the Debtor's business. 5) Preview of the Chapter 11 plan (liquidation or workout; funding; timing of filing plan; estimated administrative expenses, etc.). 6) Feasibility. 7) Applications for employment of professionals and anticipated budgets for professionals employed by debtor in possession, committees, over-secured creditors, and others who may expect to be paid from the estate. 8) Whether debtor in possession has filed all prepetition tax returns, and if not, when the returns will be filed. 9) The contents of a further scheduling and case management order to follow as a result of the conference. About Paul Brenneke Qualified Personal Residence Trust Z&A Irrevocable Trust UDT, Elene Dunavan, Jones Dave D&J Remodeling, and Victor Le Nettoyeur LLC filed for Involuntary Chapter 11 protection for Portland, Oregon-based Paul Brenneke Qualified Personal Residence Trust UDT (Bankr. D. Ore. Case No. 11-31975) on March 14, 2011. Judge Trish M. Brown presides over the case. The petitioners are represented by Robert S. Simon, Esq. at Robert S. Simon P.C. PAUL BRENNEKE: U.S. Trustee Unable to Appoint Creditors Committee ----------------------------------------------------------------- The U.S. Trustee for Region 18 notified the U.S. Bankruptcy Court for the District of Oregon that he is unable to appoint an official committee of unsecured creditors in the Chapter 11 case of Paul Brenneke Qualified Personal Residence Trust UDT. The U.S. Trustee explains that he has not received a sufficient number of creditors willing to serve on a committee. Z&A Irrevocable Trust UDT, Elene Dunavan, Jones Dave D&J Remodeling, and Victor Le Nettoyeur LLC filed for Involuntary Chapter 11 protection for Portland, Oregon-based Paul Brenneke Qualified Personal Residence Trust UDT (Bankr. D. Ore. Case No. 11-31975) on March 14, 2011. Judge Trish M. Brown presides over the case. The petitioners are represented by Robert S. Simon, Esq. at Robert S. Simon P.C. PAUL BRENNEKE: Files Schedules of Assets and Liabilities -------------------------------------------------------- Paul Brenneke Qualified Personal Residence filed with the U.S. Bankruptcy Court for the District of Oregon its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $4,200,000 B. Personal Property $2,068,271 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $5,157,752 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $442,511 ----------- ----------- TOTAL $6,268,271 $5,600,263 About Paul Brenneke Qualified Personal Residence Trust Z&A Irrevocable Trust UDT, Elene Dunavan, Jones Dave D&J Remodeling, and Victor Le Nettoyeur LLC filed an involuntary Chapter 11 protection for Portland, Oregon-based Paul Brenneke Qualified Personal Residence Trust UDT (Bankr. D. Ore. Case No. 11-31975) on March 14, 2011. Judge Trish M. Brown presides over the case. The petitioners are represented by Robert S. Simon, Esq. at Robert S. Simon P.C. PEGASUS RURAL: Sept. 27 Hearing for Trustee/Dismissal ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that bondholders owed $60 million are asking the bankruptcy judge at a Sept. 27 hearing to dismiss the Chapter 11 filing by the newly created holding company of Xanadoo Co. The bankruptcy followed the maturity in May of almost $60 million in secured notes owing to Beach Point Capital Management LP, according to the motion for dismissal. The agent contends that on the eve of bankruptcy, Xanadoo created a new intermediate holding company to hinder and delay creditors by taking over ownership of the operating companies. The bondholders also say they want the judge to appoint a Chapter 11 trustee for the operating companies. The noteholder agent contends that creating a new holding company violated agreements. The case is nothing more than a two-party dispute, the motion says. About Pegasus Rural Broadband Pegasus Rural Broadband, LLC, and its affiliates, including Xanadoo Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11772) on June 10, 2011. The Debtors are subsidiaries of Xanadoo Company, a 4G wireless Internet provider. Xanadoo Co. was not among the Chapter 11 filers. The subsidiaries sought Chapter 11 protection after they were unable to restructure $52 million in 12.5% senior secured promissory notes that matured in May. The notes are owing to Beach Point Capital Management LP. Xanadoo Holdings, through Xanadoo LLC -- XLC -- offers wireless high-speed broadband service, including digital phone services, under the Xanadoo brand utilizing licensed frequencies in the 2.5 GHz frequency band. As of May 31, 2011, XLC served 12,000 subscribers in Texas, Oklahoma and Illinois. In the summer of 2010, the Debtors closed all of their retail stores and kiosks in its six operating markets and severed all fulltime sales personnel. Since the closings, the Debtors relied one key retailer in each market to serve as local point of presence to market customer transactions. Judge Peter J. Walsh presides over the case. Rafael Xavier Zahralddin-Aravena, Esq., Shelley A. Kinsella, Esq., and Jonathan M. Stemerman, Esq., at Elliott Greenleaf, in Wilmington, Delaware, serve as counsel to the Debtor. NHB Advisors Inc. is their financial advisors. Epiq Systems, Inc., is the claims and notice agent. Xanadoo Holdings, Pegasus Guard Band and Xanadoo Spectrum each estimated assets of $100 million to $500 million and debts of $50 million to $100 million. PERKINS & MARIE: Wins Approval of Disclosure Statement ------------------------------------------------------ BankruptcyData.com reports that the U.S. Bankruptcy Court approved Perkins & Marie Callender's Second Amended Disclosure Statement, which asserts that the Plan, "now provides for an increased Cash recovery for holders of Allowed General Unsecured Claims who are to receive Cash, both in whole dollars (an aggregate pool of $7,000,000, as opposed to $1,500,000 in the July 14, 2011 Plan." Hearing on the confirmation of the Plan is scheduled for Oct. 31, 2011, at 10:00 a.m. Confirmation objections and votes on the Plan are due Oct. 14. Perkins & Marie Callender's Inc. and its debtor affiliates filed with the U.S. Bankruptcy Court for the District of Delaware a first amended Chapter 11 plan of reorganization and an accompanying amended disclosure statement to incorporate results of their discussion and negotiations with their principal creditor constituencies, including the Official Committee of Unsecured Creditors. According to the Debtors, since the filing of the Plan and Disclosure Statement on July 14, 2011, they have engaged in substantial discussions and negotiations with their principal creditor constituencies, including the Creditors Committee, in order to address various questions and concerns. Those efforts, the Debtors said, led to their filing, on Sept. 3, of the First Amended Plan and Disclosure Statement. Perkins & Marie Callender's later filed with the U.S. Bankruptcy Court a Second Amended Chapter 11 Plan and related Disclosure Statement. According to the Disclosure Statement, "The Creditors' Committee and the Restructuring Support Parties engaged in lengthy, good faith negotiations regarding the terms of the Plan. The Creditors' Committee believes that the Plan, in its current form, presents substantial improvements over the Plan filed with the Bankruptcy Court on July 14, 2011. Specifically, the Plan now provides for an increased Cash recovery for holders of Allowed General Unsecured Claims who are to receive Cash, both in whole dollars (an aggregate pool of $7,000,000, as opposed to $1,500,000 in the July 14, 2011 Plan (although we note the Convenience Claim Amount has been reduced)) and percentage (fourteen percent (14%), as opposed to ten percent (10%) in the July 14, 2011 Plan) and also provides for such holders to receive their Pro Rata share of the Avoidance Action Recovery Pool. The Plan now also provides for a Cash recovery for eligible holders of Allowed Senior Notes Claims, with those holders sharing in the Cash recovery described in the preceding sentence. The Creditors' Committee believes that the maximum fourteen percent (14%) recovery for holders of Allowed General Unsecured Claims and holders of Allowed Senior Notes Claims who are to receive Cash (which recovery could be lower, depending on the total amount of Allowed General Unsecured Claims and Allowed Senior Notes Claims that are to receive Cash) represents a substantial discount to the potential recovery to holders of Allowed General Unsecured Claims and Allowed Senior Notes Claims that are to receive Reorganized PMC Holding Membership Interests. The Creditors' Committee believes that this discount is appropriate given the certainty that a Cash recovery provides to creditors who are to receive Cash and is within the range of reasonableness in the context of these Chapter 11 Cases." 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. Deloitte Tax LLPserves as tax services provider. DIP lender Wells Fargo is represented by lawyers at Paul, Hastings, Janofsky & Walker LLP. Roberta A. Deangelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. Ropes & Gray LLP represents the Committee. PHILADELPHIA ORCHESTRA: Court Approves Adequate Protection to FDS ----------------------------------------------------------------- The Hon. Eric L. Frank of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania authorized The Philadelphia Orchestra Association and Academy of Music of Philadelphia, Inc., to provide adequate protection and to enter into an amended credit card processing agreement. The Debtors related that it entered into a processing agreement with First Data Services, LLC, a subsidiary of Banc of America Merchant Services, LLC, in August 1984, under which FDS provides the Debtors credit card processing services in connection with its sale of goods at its gift shop. The Debtor and FDS agreed, due to the increase in financial risk associated with processing Debtors' credit card payments postpetition, to implement separate internal merchant accounts for various categories of Debtors' transactions. The Court authorized FDS to establish an appropriate number of Reserve Accounts, each exclusively under the control of FDS or BAMS, in which the Debtor will not have access or control and which FDS may use to offset any losses it experiences. As contemplated, the Debtor and FDS will establish separate accounts for these categories of charges: a) funds associated with Full Pre-Paid Plan, 50/50 Plan, and Monthly Plan season tickets, Group Sales, Second Tier Group Sales, single show ticket sales, and Gift Certificates will be released monthly after review of the ticket sales, completion of Debtors' corresponding performances for which these tickets were purchased and used by patrons, and completion of processing for any Chargebacks and adjustments associated therewith; and b) funds associated with non-performance items, gift shop sales, certain donations, concession sales, and other transactions FDS deems appropriate will be released daily after review of these transactions, other delivery of goods or services by the Debtor, and completion of processing for any Chargebacks or adjustments associated therewith. The Debtor and FDS are authorized to execute the New FDS Agreement and any related or ancillary documents. The Debtor will provide FDS with the reporting. About The Philadelphia Orchestra The Philadelphia Orchestra -- http://www.philorch.org/-- claims to be among the world's leading orchestras. Bloomberg News says the orchestra became the first major U.S. symphony to file for bankruptcy protection, surprising the music world. Previous conductors include Fritz Scheel (1900-07), Carl Pohlig (1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80), Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and Christoph Eschenbach (2003-08). Charles Dutoit is currently chief conductor, and Yannick Nezet-Seguin has assumed the title of music director designate until he takes up the baton as The Philadelphia Orchestra's next music director in 2012. The Philadelphia Orchestra Association, The Academy of Music of Philadelphia, Inc., and Encore Series, Inc., filed separate Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 11-13098 to 11-13100) on April 16, 2011. Judge Eric L. Frank presides over the case. The Philadelphia Orchestra Association is being advised by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal, its financial advisor. Curley, Hessinger & Johnsrud serves as its special counsel. Philadelphia Orchestra disclosed $15,950,020 in assets and $704,033 in liabilities as of the Chapter 11 filing. Encore Series, Inc., tapped EisnerAmper LLP as accountants and financial advisors. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Debtors' case. Reed Smith LLP serves as the Committee's counsel. POINT BLANK: Asks for Approval of Forbearance Agreement ------------------------------------------------------- Point Blank Solutions Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve the forbearance agreement under replacement debtor-in-possession credit agreement. The Debtors tell the Court that June 15, 2011, maturity date under the replacement DIP credit agreement, has occurred without the repayment of the loans made to the Debtors under the agreement. As a consequence, an event of default has arisen under that agreement. The Debtors and the Lenders have entered into a forbearance agreement dated Aug. 26, 2011, under which the lenders have agreed, pursuant to the terms and conditions set forth therein, to forbear -- through November 11, 2011 -- from exercising their rights and remedies under the replacement DIP credit agreement while the Debtors pursue an orderly sale process. The Official Committee of Unsecured Creditors and the Official Committee of Equity Security Holders have reviewed and approved the form of the Forbearance Agreement. The Debtors say they were originally parties to a Debtor-In- Possession Financing Agreement dated April 12, 2010, with Steel Partners II, L.P., for a revolving loan facility in the aggregate committed amount of up to $20 million. The maturity date of the First DIP Credit Agreement was Dec. 31, 2010. On Dec. 6, 2010, the Committees filed a joint motion for approval of a term loan facility in the amount of $25 million to be provided by Lonestar Partners, L.P., Privet Fund Management LLC and Prescott Group Capital Management, or their respective designees or affiliates. The Debtors say they failed to repay the Loans made under the replacement DIP credit agreement when due on June 15, 2011. Additional Events of Default have also occurred under the Replacement DIP Credit Agreement. The Debtors, the Lenders and the Committees have negotiated the forbearance agreement under which the lenders have agreed to "forbear from exercising or asserting any rights, powers, privileges, claims, defenses or remedies with respect to the security granted" under the loan documents or the DIP orders on account of the occurrence of any existing events of default until Nov. 11, 2011. About Point Blank Headquartered in Pompano Beach, Florida, Point Blank Solutions, Inc. -- http://www.pointblanksolutionsinc.com/-- designs and produces body armor systems for the U.S. Military, Government and law enforcement agencies, as well as select international markets. The Company maintains facilities in Pompano Beach, Florida, and Jacksboro, Tennessee. The Company's former chief executive officer and chief operating officer were convicted in September 2010 of orchestrating a $185 million fraud. Point Blank Solutions, formerly DHB Industries, filed for Chapter 11 protection (Bankr. D. Del. Case No. 10-11255) on April 14, 2010. Laura Davis Jones, Esq., Alan J. Kornfeld, Esq., David M. Bertenthal, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel to the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP serves as corporate counsel. T. Scott Avila of CRG Partners Group LLC is the restructuring officer. Epiq Bankruptcy Solutions serves as claims and notice agent. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Equity Security Holders in the case. Ian Connor Bifferato, Esq., and Thomas F. Driscoll III, Esq., at Bifferato LLC; and Carmen H. Lonstein, Esq., Andrew P.R. McDermott, Esq., and Lawrence P. Vonckx, Esq., at Baker & McKenzie LLP, serve as counsel for the Official Committee of Equity Security Holders. Robert M. Hirsh, Esq., and George P. Angelich, Esq., at Arent Fox LLP, serve as counsel to the Creditors Committee, and Frederick B. Rosner, Esq., and Brian L. Arban, Esq., at the Rosner Law Group LLC, serve as co-counsel. POINT BLANK: Time to Decide on Industrial Lease Moved to Sept. 1 ---------------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware approved the fifth stipulation between Point Blank Solutions Inc. and its debtor-affiliates, and Duke Realty Limited Partnership, extending the Debtors' deadline by which to assume or reject non-residential real property leases until Nov. 15, 2011. The Debtors and Duke Realty entered into a certain industrial lease between Atlantic Business Center LLC and Point Blank Body Armor Inc., as amended regarding real property defined as the building in the lease. The Debtor and Duke Realty extended the deadline four times between July 14, 2010, and Sept. 1, 2011. About Point Blank Headquartered in Pompano Beach, Florida, Point Blank Solutions, Inc. -- http://www.pointblanksolutionsinc.com/-- designs and produces body armor systems for the U.S. Military, Government and law enforcement agencies, as well as select international markets. The Company maintains facilities in Pompano Beach, Florida, and Jacksboro, Tennessee. The Company's former chief executive officer and chief operating officer were convicted in September 2010 of orchestrating a $185 million fraud. Point Blank Solutions, formerly DHB Industries, filed for Chapter 11 protection (Bankr. D. Del. Case No. 10-11255) on April 14, 2010. Laura Davis Jones, Esq., Alan J. Kornfeld, Esq., David M. Bertenthal, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as bankruptcy counsel to the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP serves as corporate counsel. T. Scott Avila of CRG Partners Group LLC is the restructuring officer. Epiq Bankruptcy Solutions serves as claims and notice agent. The U.S. Trustee has appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Equity Security Holders in the case. Ian Connor Bifferato, Esq., and Thomas F. Driscoll III, Esq., at Bifferato LLC; and Carmen H. Lonstein, Esq., Andrew P.R. McDermott, Esq., and Lawrence P. Vonckx, Esq., at Baker & McKenzie LLP, serve as counsel for the Official Committee of Equity Security Holders. Robert M. Hirsh, Esq., and George P. Angelich, Esq., at Arent Fox LLP, serve as counsel to the Creditors Committee, and Frederick B. Rosner, Esq., and Brian L. Arban, Esq., at the Rosner Law Group LLC, serve as co-counsel. PPI HOLDINGS: Disclosures Approved, Plan Objections Due Sept. 19 ---------------------------------------------------------------- Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware approved on Aug. 3, 2011, the disclosure statement explaining the Chapter 11 Plan of Liquidation co-proposed by PPI Holdings, Inc., and its debtor affiliates and the Official Committee of Unsecured Creditors. The confirmation hearing will commence on Oct. 28, 2011, at 2:00 p.m. Objections to the Plan are due Sept. 19. As previously reported by the Troubled Company Reporter on Aug. 5, 2011, the Plan provides for the transfer of the assets and liabilities of the Debtors to the Liquidating Trust which will be administered by the Liquidating Trustee, who will, among other things, distribute the proceeds from the Assets to the Creditors. The Debtors designate six Classes of Claims and one Class of Interests. Priority Unsecured Claims in Class 1 and Other Secured Claims in Class 2 are Unimpaired under the Plan and are deemed to accept the Plan. Convenience Claims in Class 3, General Unsecured Claims in Class 4, and Lender Deficiency Claims in Class 5 are Impaired and are Entitled to Vote. Intercompany Claims in Class 6 and Interests in Class 7 are Impaired and are deemed to reject the Plan. Under the Plan, Class 1 Priority Unsecured Claims will be paid in full on the Effective Date. Class 2 Other Secured Claims will, at the option of the Liquidating Trustee, receive (i) 100% of their Claims in Cash in full on the Effective Date, or (ii) the collateral securing their Claims. Class 3 Convenience Claims will receive, in full satisfaction of their Claims, Cash in amount equal to 3.5% of their Claims, without Postpetition Interest. Each holder of a Class 4 General Unsecured Claim will receive its pro rata share of $150,000, which will be funded into the General Unsecured Reserve Account on the Effective Date. The Proponents estimate that the total amount of Class 4 General Unsecured Claims is approximately $103,140,000. Accordingly, the Proponents estimate that Holders of Allowed General Unsecured Claims will receive a minimum Pro Rata distribution equal to approximately 0.15% of their Allowed Claims. The bulk of anticipated distribution to Class 4 will come from recoveries in Avoidance Actions and other litigation. Class 5 Lender Deficiency Claims will receive Cash in an amount equal to the Holder's Pro Rata share of the remaining funds in the Liquidating Trust after Claims in Class 1 through Class 4 and expenses of the Liquidating Trust have been paid in full. Class 6 Intercompany Claims and Class 6 Interests will not receive any distributions. These Claims will be extinguished. A copy of the First Amended Disclosure Statement is available at: http://bankrupt.com/misc/ppi.firstamendedDS.pdf A full-text copy of the Disclosure Statement, together with the Court-approved liquidation analysis, is available for free at http://ResearchArchives.com/t/s?76e0 About Precision Parts Headquartered in Rochester Hills, Michigan, Precision Parts International Services Corp. -- http://www.precisionparts.com/-- sold products to major north American automotive and non- automotive original equipment manufacturers and Tier 1 and 2 suppliers. PPI and its units operated six manufacturing facilities throughout North America, including a facility in Mexico operated on their behalf by Intermex Manufactura de Chihuahua under a shelter and logistics agreement. The Company and eight of its affiliates filed for Chapter 11 protection on Dec. 12, 2008 (Bankr. D. Del. Lead Case No. 08-13289). Attorneys at Pepper Hamilton LLP serve as the Debtors' bankruptcy counsel. Alvarez & Marsal North America LLC is the Debtor's financial advisors and Kurtzman Carson Consultants LLC is the claims, noticing and balloting agent. PPI Holdings, Inc., estimated assets and debts between $100 million and $500 million in its Chapter 11 petition. Attorneys at Stevens & Lee, P.C., represent the Creditors Committee as counsel. On March 13, 2009, the Bankruptcy Court approved the Debtors' proposed sale of substantially all of their assets to Cerion, LLC. The sale closed on March 26, 2009. The Debtors received net proceeds of approximately $16,031,508 after an agreed upon working capital adjustment. QIMONDA RICHMOND: "Plan is Acceptable," DIP Lenders Say ------------------------------------------------------- Qimonda Richmond, LLC, et al., submitted to the U.S. Bankruptcy Court for the District of Delaware a blackline of the disclosure statement of their joint plan of liquidation, which reveals that the Debtors' bankruptcy lenders deem the plan an "acceptable plan." As previously reported by The Troubled Company Reporter, Bankruptcy Judge Mary F. Walrath signed off on the statement on July 12, 2011, and set a Sept. 19 confirmation hearing for the liquidation plan, which is co-sponsored by the company's official committee of unsecured creditors. If the Plan is confirmed, the Debtors remaining assets will be liquidated on an orderly basis and proceeds will be distributed to holders of Allowed Claims in accordance with the terms of the Plan. The Plan separately classifies claims against QR and its parent, Qimonda North America Corp., respectively. The cash available in QR's estate to fund the Plan and the QR Liquidating Trust will come from: (a) the remaining net Cash proceeds QR received from the sale of its assets, together with any interest thereon; (b) any recoveries on the QR Liquidating Trust Claims, including without limitation the Kingston Lien Avoidance Action, the IRB Avoidance Action and other Avoidance Actions; (c) any distributions in respect of QR's allowed claim in the QAG insolvency proceeding or in respect of the Employee Settlement Agreement; and (d) a Cash payment of approximately $218,750 from a proposed settlement with an affiliate. QR currently estimates that as of an assumed Oct. 15, 2011, Effective Date, it will have available Cash of $70.6 million, not including restricted Cash of $42.5 million held in respect of the Kingston Lien Avoidance Action ($40.4 million) and certain Secured Claims ($2.1 million). A copy of the blacklined version of the Disclosure Statement is available at http://bankrupt.com/misc/Qimonda_BlacklineDS.PDF About Qimonda AG Qimonda AG (NYSE: QI) -- http://www.qimonda.com/-- is a leading global memory supplier with a diversified DRAM product portfolio. The Company generated net sales of EUR1.79 billion in financial year 2008 and had -- prior to its announcement of a repositioning of its business -- approximately 12,200 employees worldwide, of which 1,400 were in Munich, 3,200 in Dresden and 2,800 in Richmond, Va. Qimonda AG commenced insolvency proceedings in a local court in Munich, Germany, on Jan. 23, 2009. On June 15, 2009, QAG filed a petition (Bankr. E.D. Va. Case No. 09-14766) for relief under Chapter 15 of the U.S. Bankruptcy Code. Qimonda North America Corp., an indirect and wholly owned subsidiary of QAG, is the North American sales and marketing subsidiary of QAG. QNA is also the parent company of Qimonda Richmond LLC. QNA and QR sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10589) on Feb. 20, 2009. Mark D. Collins, Esq., Michael J. Merchant, Esq., and Lee E. Kaufman, Esq., at Richards Layton & Finger PA, in Wilmington Delaware; and Mark Thompson, Esq., Morris J. Massel, Esq., and Terry Sanders, Esq., at Simpson Thacher & Bartlett LLP, in New York City, represent the Debtors as counsel. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed seven creditors to serve on an official committee of unsecured creditors. Jones Day and Ashby & Geddes represent the Committee. In its bankruptcy petition, Qimonda Richmond, LLC, estimated more than US$1 billion in assets and debts. The information, the Debtors said, was based on Qimonda Richmond's financial records which are maintained on a consolidated basis with Qimonda North America Corp. RIGHTHAVEN LLC: May Opt for Asset Sale or Bankruptcy ---------------------------------------------------- Dan Rivoli at Bankruptcy Law360 reports that Righthaven LLC told a Nevada federal judge Friday that bankruptcy or an asset sale may be its only options if it has to pay $34,000 in attorneys' fees to a man it unsuccessfully sued for reposting a Las Vegas Review- Journal article online. Days before Righthaven's Wednesday deadline to pay Wayne Hoehn's attorneys' fees under court order, the company filed an emergency motion to put off the deadline while its appeal was pending, according to Law360. Based in Las Vegas, Righthaven LLC is a copyright enforcement company. ROTHSTEIN ROSENFELDT: Big Investor Sued for Return of Millions -------------------------------------------------------------- Dow Jones' DBR Small Cap reports that the bankruptcy trustee charge of recovering money for creditors left behind by Ponzi- scheme operator Scott Rothstein's law firm is targeting tens of millions of dollars once paid to one of the scheme's largest investors, a Florida trust fund controlled by Miami businessmen Ira Sochet. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. ROUND TABLE: Cash Use Order Amended to Allow Cure Amount Payments ----------------------------------------------------------------- On July 29, 2011, the U.S. Bankruptcy Court for the Northern District of California entered an eighth interim order [Docket No. 711] authorizing Round Table Pizza, Inc., et al., to use cash collateral through 5:00 p.m. on Sept. 30, 2011. On Sept. 1, 2011, the Bankruptcy Court approved an amendment to the eighth interim order authorizing use of cash collateral, to permit the disbursement of the amounts identified in the Schedule of Undisputed and Disputed Assumed Lease Cure Amounts, filed as Docket No. 799. The order approving the amendment is premised on the consent of General Electric Credit Corporation, as Agent for the Lenders. About Round Table Based in Concord, California, Round Table Pizza, Inc. -- http://www.roundtablepizza.com/-- is a private, 100% employee- owned company with corporate offices based in Concord, California. Round Table is largely owned by an Employee Stock Ownership Plan, with 3,190 participants. The ESOP is designed and intended to provide a source of retirement income to Round Table's loyal, long-term employees. Round Table filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 11-41431) on Feb. 9, 2011. Judge Roger L. Efremsky presides over the case. Scott H. McNutt, Esq., at McNutt Law Group serves as the Debtor's bankruptcy counsel. The Debtors also tapped Frank, Rimerman & Co. as an auditor and accountant. Round Table disclosed $1,066,524 in assets and $35,625,649 in liabilities as of the Chapter 11 filing. The case is jointly administered with affiliates -- The Round Table Franchise Corporation, Round Table Development Company, and Round Table Pizza Nevada LLC. The official committee of unsecured creditors has tapped Brownstein Hyatt Farber Schreck, LLP as counsel. The Debtor also tapped First Bankers Trust Services, Inc. as discretionary, independent, and institutional ESOP Trustee, and Johanson Berenson LLP as an ESOP counsel. First Bankers Trust Services, Inc., was appointed as institutional trustee of the Round Table Restated Employee Stock Ownership Plan and Trust (ESOP). Johanson Berenson LLP serves as an ESOP counsel. RYLAND GROUP: Fitch Downgrades Issuer Default Rating to 'BB-' ------------------------------------------------------------- Fitch Ratings has downgraded its ratings for Ryland Group, Inc., including the company's Issuer Default Rating (IDR) to 'BB-' from 'BB'. The Rating Outlook has been revised to Negative from Stable. The downgrade in RYL's IDR and senior unsecured ratings reflects the still very challenging U.S. housing market which is likely bouncing on the bottom, following a massive cyclical correction. With the recent softening in the economy and lowered economic growth expectations for 2011 and 2012, the environment may at best only support a relatively modest recovery in housing metrics over the next year and a half. Moreover, RYL's underperformance relative to its peers in certain operational and financial categories during recent quarters, and its slimming cash position penalizes the ratings and influences the Outlook. As expected, the housing recovery has been irregular so far and to date quite anemic. Various housing and related statistics appear to have bottomed in early to mid-2009. Since then the on, then off, then on again federal housing credit at times spurred or at least pulled forward housing demand. With the U.S. economy moving from recession to expansion in the third quarter of 2009, plus very attractive housing affordability and government incentives, housing was jump-started. However, faltering consumer confidence, among other issues, has restrained the recovery so far. The public homebuilders were generally unprofitable in the calendar first quarter (excluding non-cash real estate charges) and revenues trailed a year ago levels. That was also the case in the calendar second quarter. Builder comparisons ease in the third and fourth quarters. If the economy continues to modestly advance and employment edges up, macroeconomic housing metrics should, for the most part, remain at current levels through the end of this year. Fitch currently projects new single-family housing starts will drop 13.1% in 2011 following 5.8% growth in 2010. After falling 14.1% in 2010, new home sales are forecast to decrease about 7% in 2011. Fitch expects existing home sales to slip 2% in 2011 after a 4.8% decline in 2010. In a moderately growing economy in 2012, housing metrics could modestly expand, off a very depressed base. RYL's liquidity slimmed in 2010 and especially so far in 2011. Cash and marketable securities are down about $246 million since the end of 2009. Pressures on liquidity are likely to continue over the next year and a half due to sizeable land and development spending and the possibility that EBITDA may not cover interest expense. The ratings also reflect RYL's business model, its conservative building practices, focus on entry-level and first-step trade-up customers (the largest segments of the market), moderate financial policies, geographic and product line diversity and its capital structure. RYL's significant ranking (within the top five or top 10) in most of its markets, its presale operating strategy and a return on capital focus provided the framework to soften the impact on margins from declining market conditions. Acquisitions have not played a part in RYL's operating strategy, as management has preferred to focus on internal growth (expanding its position in existing markets and occasional greenfield new market entries) during the expansion phase in the cycle. RYL ended the second quarter with $182.3 million of unrestricted cash and $359 million of available for sale marketable securities. The company terminated its revolving credit facility during the second quarter of 2009 and subsequently entered into various letters of credit agreements that are secured by cash deposits. At June 30, 2011, letters of credit totaling $75.1 million were outstanding under these agreements. Consistent with Fitch's comment on homebuilders' termination of revolving credit facilities, in the absence of a revolving credit line, a consistently higher level of cash and equivalents than was typical should be maintained on the balance sheet, especially in these still uncertain times. RYL last accessed the capital markets during 2009 and 2010 and used these debt proceeds to redeem some of its existing debt. As a result, the company has pushed out its maturities, with no major debt coming due until June 2013 ($186 million). RYL employs conservative land and construction strategies. The company only buys entitled land and under normal market conditions tries to keep an approximately three to four year supply of lots under control. As of June 30, 2011, 26.8% of its lots were controlled through options - a much lower than typical percentage due to considerable option abandonments and write-offs of recent years. Owned lots represented 66.6% of the total, while JV lots accounted for 6.6%. Total lots, including those owned and controlled through joint ventures, were 25,165 at June 30, 2011. This represents a 7.6-year supply of total lots controlled based on trailing 12 months deliveries. RYL has a 5.0-year supply of owned land. During the past two years, RYL has been re-building its land position and opportunistically acquiring real estate at attractive prices, supported by its strong liquidity. RYL currently projects to spend roughly $300 million on land acquisitions and $100 million on development expenditures during 2011. The company spent $253 million for land and $76 million on land development in 2010. RYL reported a negative $93.9 million of cash from operations during the first half of 2011. During the first half of 2010 the company generated cash flow from operations of $67.7 million, including a federal tax refund of $100.5 million resulting from the carryback of RYL's 2009 operating loss to offset earnings generated in 2004 and 2005. For the LTM period from June 30, 2011, the company reported a negative $230.9 million cash flow from operations. The company was consistently cash flow positive from the second quarter of 2008 through the second quarter of 2010. It has reported negative cash flow from operations each quarter since then. For all of fiscal 2011, Fitch expects RYL to be cash flow negative as the company continues to rebuild its land position. Negative cash flow is typical in the early stages of a housing recovery for many of the large public builders. Fitch is relatively comfortable with this strategy given the company's current liquidity position, well-laddered debt maturity schedule, proven access to the capital markets and management's demonstrated discipline in pulling back on land and development spending and improving its liquidity when the economy and housing contract. Future ratings and Outlooks will be influenced by broad housing market trends as well as company specific activity, such as trends in land and development spending, general inventory levels, speculative inventory activity (including the impact of high cancellation rates on such activity), gross and net new order activity, debt levels, free cash flow trends and uses, and the company's cash position. Fitch has downgraded the following ratings for Ryland Group, Inc.: -- IDR to 'BB-' from 'BB'; -- Senior unsecured debt to 'BB-' from 'BB'. The Rating Outlook has been revised to Negative from Stable. SBARRO INC: Court Approves $18.6-Mil. Exit Financing ---------------------------------------------------- BankruptcyData.com reports that the U.S. Bankruptcy Court approved Sbarro's motion for an order (A) approving and authorizing the Debtors to perform under the exit financing commitment letter with its first lien lenders, (B) approving procedures for consideration of alternative restructuring proposals, (C) scheduling proposal deadlines and an auction and (D) approving the form and manner of notice thereof. The $18.6 million first-out, delayed-draw term loan facility will be used for general corporate purposes, including to cash collateralize existing or replacement letters of credit. About Sbarro Inc. The Sbarro family started its business after moving to Brooklyn, New York, from Naples, Italy, in 1956. Today Sbarro is a leading, global Italian quick service restaurant concept with approximately 5,170 employees, 1,045 restaurants throughout 42 countries, and annual revenues in excess of $300 million. Sbarro Inc. sought bankruptcy protection under Chapter 11 (Bankr. S.D.N.Y. Lead Case No. 11-11527) to eliminate about $200 million in debt. The Debtor disclosed $51,537,899 in assets and $460,975,646 in liabilities as of the Chapter 11 filing. Sbarro said it has reached an agreement with all of its second- lien secured lenders and approximately 70% of its senior noteholders on the terms of a reorganization plan that will eliminate more than half of the Company's total indebtedness. Edward Sassower, Esq., and Nicole Greenblatt, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' general bankruptcy counsel. Rothschild, Inc., is the Debtors' investment banker and financial advisor. PriceWaterhouseCoopers LLP is the Debtors' bankruptcy consultants. Marotta Gund Budd & Dzera, LLC, is the Debtors' special financial advisor. Curtis, Mallet-Prevost, Colt & Mosle LLP serves as the Debtors' conflicts counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims agent. Sard Verbinnen & Co is the Debtors' communications advisor. SCHOMAC GROUP: U.S. Trustee Unable to Form Committee ---------------------------------------------------- The United States Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Schomac Group, Inc., have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. About The Schomac Group & TEDCO Tucson, Arizona-based The Schomac Group, Inc., develops, constructs, manages, and invests in residential, industrial, and commercial real property. Tedco, Inc., invests in real property and in mortgages backed by real property. Schomac Group and Tedco filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case Nos. 11- 22717 and 11-22720) on Aug. 9, 2011. In its schedules, Schomac Group listed $48,929,897 in total assets and $34,583,005 in total liabilities. Judge Eileen W. Hollowell presides over the cases. Mesch, Clark & Rothschild, P.C., serves as the Debtors' counsel. Attorney for secured lender LNV Corp. is William Novotny, Esq., at Mariscal Weeks McIntyre & Friedlander, PA. SEAVIEW PLACE: Can Hire Bernard Egan as Accountant -------------------------------------------------- Seaview Place Developers, Inc. sought and obtained permission from the Hon. K. Rodney May of the U.S. Bankruptcy Court for the Middle District of Florida to employ Bernard J. Egan, Jr., as its accountant, nunc pro tunc to March 22, 2011. Mr. Bernard will prepare the Debtor's 2010 federal and state income tax returns with supporting schedules and end of the year financial statements. The Court further authorized the Debtor to pay Mr. Egan's monthly invoices of $150 per hour, which is not to exceed 12 hours or $1,800. Mr. Egan states that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Seaview Place Developers, Inc. Clearwater Beach, Florida-based Seaview Place Developers, Inc., filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 11-05126) on March 22, 2011. According to its schedules, the Debtor disclosed $24,769,500 in total assets and $15,147,744 in total debts as of the Petition Date. SEAVIEW PLACE: Plan Evidentiary Hearing Set for Oct. 17 ------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, will hold a final evidentiary hearing on the consolidated hearing for confirmation of Seaview Place Developers, Inc., and its debtor affiliates on October 17, 2011, at 09:30 a.m. The Plan essentially proposes a "partial giveback" of the condominium located in Pasco County, Florida to Branch Banking and Trust Company having a value as of the Effective Date sufficient to fully satisfy its claims. Because the Debtors anticipate that the value of the Debtors' Property, even under a conservative valuation, is greater than the amount of Secured Claims encumbering that Property, the Plan proposes that the Debtors will retain a certain amount of their Property that will be rented and sold over time following the Effective Date, and which, in addition to Exit Financing will generate sufficient funds to fully pay the Allowed Claims of Unsecured Creditors. To accomplish this, the Plan proposes that the Debtors will, prior to or through Confirmation, substantively consolidate their cases for the purposes of future reporting, voting, and making Distributions under the Plan. Substantive consolidation, the Debtors said, would also resolve various substantial Intercompany Claims and maximize the recovery of Unsecured Creditors. Holders of General Unsecured Claims will either (1) a Pro Rata Share of Cash available in the Sales Proceeds Pool, , or (2) alternatively, at the election of the Debtors and the Holder of the Claim, a lump sum payment of Cash equal to 75% of the Allowed Amount of the Claim. A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?76e5 Clearwater Beach, Florida-based Seaview Place Developers, Inc., filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 11-05126) on March 22, 2011. According to its schedules, the Debtor disclosed $24,769,500 in total assets and $15,147,744 in total debts as of the Petition Date. SEDONA DEVELOPMENT: Settles Disputes With Williams Scotsman ----------------------------------------------------------- Debtors Sedona Development Partners, LLC (SDP), and The Club at Seven Canyons, LLC, and Williams Scotsman, Inc., ask the U.S. Bankruptcy Court for the District of Arizona to approve the terms of the settlement of their disputes related to a stay relief motion and an adversary proceeding. On Oct. 14, 2010, Williams Scotsman filed its motion for relief from the automatic stay to terminate the Clubhouse Units Agreement and the Housekeeping Units Agreements, and to recover the Clubhouse Units and the Housekeeping Units. On Jan. 19, 2011, SDP filed a complaint, initiating Adversary Proceeding No. 2:11-ap-00129, seeking, among other things, a judgment declaring that SDP is the equitable owner of the Clubhouse Units and the Housekeeping Units and that the Clubhouse Units Agreement, the Housekeeping Units Agreements are agreements evidencing sales and granting money security interests, rather than leases. The Parties stipulate to these terms: 1. The Monthly Rental Rate for the Clubhouse Units will be modified so that the Debtors will pay a total $1,500 per month, plus applicable sales tax and license fees, to Williams Scotsman from the date of execution until the Effective Date. On the Effective Date, the Debtors will pay to Williams Scotsman in certified funds the sum of $66,000, plus applicable sales tax. None of the monthly payments made by the Debtors prior to the Effective Date will be credited to this purchase price. 2. The Monthly Rental Rate for the Housekeeping Units will be modified so that the Debtors will pay a cumulative total of $1,859 per month to Williams Scotsman from the date of execution until the Housekeeping Units are returned to Williams Scotsman. On the Effective Date, SDP will reject the Housekeeping Units Leases and will turn possession of the Housekeeping Units over to Williams Scotsman. On the later of the Effective Date or the date the Housekeeping Units are removed from the Property by Williams Scotsman, the Debtors will pay in certified funds for the costs and expenses associated with the knockdown and removal of the Housekeeping Units in an amount to be determined, and for the costs to return the Housekeeping Units to their original condition, excluding normal wear and tear, in an amount to be determined. 3. Provided that there is no default under the terms of the Stipulation, any unpaid rent due and owing to Williams Scotsman pursuant to the Clubhouse Units Agreement and the Housekeeping Units Agreement as of the date of the agreement between the parties will be deemed to be satisfied and paid in full upon the payment by the Debtors to Williams Scotsman of the sum of $19,129.15 either (a) on the Effective Date of the Plan or (b) in equal monthly payments totaling such amount between the Effective Date of the Plan and no later than Dec. 31, 2013, in the Debtor's sole discretion. 4. Upon timely payment in full of all amounts due under this Stipulation, Williams Scotsman will cause to be delivered to Debtors full title to the Clubhouse Units. A complete iteration of the terms of the Stipulation is available at http://bankrupt.com/misc/sedona.stipulation.de656.pdf Counsel for Williams Scotsman, Inc., may be reached at: Robert R. Kinas, Esq. Jonathan M. Saffer, Esq. Nathan G. Kanute, Esq. SNELL & WILMER LLP About Sedona Development Partners Sedona Development Partners owns an 18-hole golf course and related properties, including luxury villas, a practice park, range house, tennis courts and related facilities in Sedona, Arizona, known generally as Seven Canyons. The Club at Seven Canyons, LLC, operates the golf course and related facilities for SDP. SDP is the manager and sole member of the Club. Sedona Development Partners filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 10-16711) on May 27, 2010. The Club At Seven Canyons filed a separate Chapter 11 petition (Bankr. D. Ariz. Case No. 10-16714). John J. Hebert, Esq., Philip R. Rudd, Esq., and Wesley D. Ray, Es., at Polsinelli Shughart PC, in Phoenix, Ariz., assist the Debtors in their restructuring efforts. Lender Specialty Trust is represented by Joseph E. Cotterman, Esq., and Nathan W. Blackburn, Esq., at Gallagher & Kennedy, P.A. Sedona disclosed $29,171,168 in assets and $121,679,994 in liabilities. SHAMROCK-SHAMROCK: Taps S. Ponder for Landlord-Tenant Issues ------------------------------------------------------------ Shamrock-Shamrock, Inc., ask the U.S. Bankruptcy Court for the Middle District of Florida for permission to employ Stephen R. Ponder to represent the Debtor in certain state court litigation proceedings. The Debtor is in need of an attorney versed in landlord-tenant law to represent the Debtor before the State Court in evictions, lease deficiency claims and collection actions related to real properties leased by the Debtor in various tenants. To the best of the Debtor's knowledge, Mr. Ponder is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Shamrock-Shamrock Inc. Daytona Beach, Florida-based Shamrock-Shamrock Inc. owns 70 parcels of Florida real property. It filed for Chapter 11 protection (Bankr. M.D. Fla. Case No. 11-07061) on May 10, 2011. Judge Arthur B. Briskman presides over the case. The Law Offices of Mickler & Mickler serves as bankruptcy counsel. SHENGDATECH INC: Court Enjoins Chen From Taking Over ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the chief restructuring officer for ShengdaTech Inc. was granted a preliminary injunction early this month preventing founder and controlling shareholder Chen Ziangzhi from interfering with management. The ruling by U.S. Bankruptcy Judge Bruce T. Beesley in Reno, Nevada, described how outside auditors discovered "serious discrepancies in [the company's] financial statements" in March. Further investigation by a special committee of the board concluded that "certain" financial records "may have been falsified in whole or in part," Judge Beesley said. The judge is preventing Chen or anyone else from interfering with management, displacing the chief restructuring officer, or appointing another member to the deadlocked four-member board. About ShengdaTech Headquartered in Shanghai, China, ShengdaTech, Inc., makes nano precipitated calcium carbonate for the tire industry. ShengdaTech converts limestone into nano-precipitated calcium carbonate (NPCC) using its proprietary and patent-protected technology. NPCC products are increasingly used in tires, paper, paints, building materials, and other chemical products. In addition to its broad customer base in China, the Company currently exports to Singapore, Thailand, South Korea, Malaysia, India, Latvia and Italy. ShengdaTech sought Chapter 11 bankruptcy protection from creditors (Bankr. D. Nev. Case No. 11-52649) on Aug. 19, 2011, in Reno, Nevada, in the United States. The Shanghai-China based company said in its bankruptcy filing it would fire all of its officers and restructure to try to recover from an accounting scandal. The Company disclosed US$295.4 million in assets and US$180.9 million in debt as of Sept. 30, 2011. The Company's legal representative in its Chapter 11 case is Greenberg Traurig, LLP. The Board of Directors Special Committee's legal representative is Skadden, Arps, Slate, Meagher & Flom LLP. On Aug. 23, 2011, the Court entererd an interim order confirm the Board of Directors Special Committee's appointment of Michael Kang as the Debtor's chief restructuring officer. SHENGDATECH INC: Gets Final Approval to Employ Alvarez & Marsal --------------------------------------------------------------- The Hon. Bruce T. Beesley of the U.S. Bankruptcy Court for the District of Nevada, in a final order, authorized Shengdatech, Inc., to employ Alvarez & Marsal North America, LLC, to provide the Debtor with a chief restructuring officer and certain additional personnel and appoint Michael Kang as the Debtor's CRO. As reported in the Troubled Company Reporter on Aug. 31, 2011, the firm will, among other things: a) assist in the prosecution of the Debtor's Chapter 11 filing; b) assist with cash controls and development and management of a 13-week cash flow forecast; and c) assist with the management and oversight of ongoing accounting investigations. The firm's professionals will be paid at these hourly rates: Managing Director $650 - 850 Director $450 - 650 Associate/Consultant $350 - 450 Analyst $250 - 350 The Debtor assured the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About ShengdaTech Headquartered in Shanghai, China, ShengdaTech, Inc., makes nano precipitated calcium carbonate for the tire industry. ShengdaTech converts limestone into nano-precipitated calcium carbonate (NPCC) using its proprietary and patent-protected technology. NPCC products are increasingly used in tires, paper, paints, building materials, and other chemical products. In addition to its broad customer base in China, the Company currently exports to Singapore, Thailand, South Korea, Malaysia, India, Latvia and Italy. ShengdaTech Inc. sought Chapter 11 bankruptcy protection from creditors (Bankr. D. Nev. Case No. 11-52649) on Aug. 19, 2011, in Reno, Nevada, in the United States. The Shanghai-China based company said in its bankruptcy filing it would fire all of its officers and restructure to try to recover from an accounting scandal. The Company disclosed $295.4 million in assets and $180.9 million in debt as of Sept. 30, 2011. The Company's legal representative in its Chapter 11 case is Greenberg Traurig, LLP. The Board of Directors Special Committee's legal representative is Skadden, Arps, Slate, Meagher & Flom LLP. SHINGLE SPRINGS: Moody's Keeps 'Caa2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service changed Shingle Springs Tribal Gaming Authority's rating outlook to stable from negative. Authority's Caa2 Corporate Family Rating, Caa2 Probability of Default Rating ("PDR") and Caa2 senior secured notes rating remain unchanged. The ratings are as follows: - Corporate Family Rating at Caa2 - Probability of Default Rating at Caa2 - $450 million senior secured notes due June 2015 to Caa2 (LGD 4, 52%) from Caa2 (LGD 4, 50%) RATINGS RATIONALE The outlook revision to stable reflects Authority's modestly improved liquidity profile and Moody's expectation that liquidity would likely remain adequate in the next twelve months. The improvement of liquidity is partly driven by the recent amendment under the FF&E loan agreement which would provide more cushion for compliance in the future, as well as the revised principal amortization schedule under its management transition loan that would provide some cash flow relief. The stable outlook also recognizes the recently decelerated negative revenue trend and relatively stable operating profit despite the continuously challenging local economy in Sacramento, CA and impact from competitor's major expansion by Thunder Valley Casino. The management of Shingle Springs' Red Hawk casino continues to aggressively cut costs while remaining focused on marketing programs to drive traffic. Despite the company's modestly improved liquidity profile, the Caa2 CFR anticipates that credit metrics will remain weak. Moody's expects financial leverage to remain high, above 7.0 times, in the intermediate term as a result of continuing challenges in Red Hawk's primary market stemming from high unemployment rates and heavy competition. Competition will likely rise further if Enterprise Rancheria of Maidu Indian Tribe is able to open a casino in the Sacramento area in the intermediate term after the recent approval by the Department of Interior for the tribe's request to take its land into trust for gaming purpose. Caa2 CFR also reflects Moody's concern on the potential adverse impact from the pending litigation by Sharp Image Gaming, Inc against the Shingle Springs Band of Miwok, Shingle Spring's Tribe -- owners of the Red Hawk Casino, about alleged breach of contracts. Given Authority's high leverage, Moody's does not anticipate upward rating momentum in the near term in the absence of a material de-leveraging event. In the intermediate term ratings could be upgraded if there is a sustained improvement in operating trends, a material improvement in credit metrics, and a better longer term liquidity profile. The ratings could be downgraded if Authority suffers a decline in operating performance or its liquidity deteriorates for any reason, as this would elevate the risk of a payment default or covenant violation. A negative judgment against the Tribe from the litigation would also pressure the rating downward. The principal methodologies used in this rating were Global Gaming published in December 2009, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Shingle Springs is an unincorporated governmental authority of the Shingle Springs Band of Miwok Indians. The Authority was formed to develop, own and operate the Red Hawk Casino, which opened on December 17, 2008 near Sacramento, California. SIGNATUE STYLES: Wants Until Dec. 31 to Decide on Leases -------------------------------------------------------- Signature Styles, LLC, and Signature Styles Gift Cards, LLC, ask the U.S. Bankruptcy Court for the District of Delaware for authority to enter into sublease agreements with Artemiss, LLC, and to extend time to assume or reject existing leases for approximately 3 months, through and including Dec. 31, 2011. Artemiss has been deemed the successful bidder for the sale of substantially all of the Debtor's Assets as the Debtors received no competing bids by the Aug. 25, 2011 bid deadline. Although the existing leases are not being assigned to Artemiss, as part of the Sale, Artemiss will not be in an immediate position to move the Debtors' business to other locations and vacate the premises on the closing date of the Sale. Thus, the Debtors and Artemiss have negotiated three sublease agreements allowing Artemiss to remain in the premises until the end of the calendar year. About Signature Styles Signature Styles LLC, owner of the Spiegel catalog, filed a Chapter 11 petition (Bankr. D. Del. Case No. 11-11733) on June 6, 2011, along with a deal to sell the business to affiliates of the current owners and lenders. New York-based Signature Styles, which filed for bankruptcy together with its affiliates, disclosed assets of $48.6 million and debt of $867.6 million. It purchased the Spiegel business for $21.7 million at a foreclosure sale in June 2009. Debt includes $37.2 million owing on a secured term loan and revolving credit. Unsecured debt totals $35.3 million, which include $9.8 million owing to trade suppliers and $23.2 million in customer obligations. The lenders and owners are funds affiliated with Patriarch Partners LLC. Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, serves as counsel to the Debtor. Western Reserve Partners LLC serves as investment bankers. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. A fund affiliated with Patriarch Partners LLC has an agreement to buy the business in return for the assumption of specified debt, including $30 million owing on the term loan and revolving credit. The buyer also will honor some customer obligations. The stalking-horse purchase agreement requires approval of bidding procedures by July 7 and approval of a sale by Aug. 4. Roberta A. Deangelis, United States Trustee for Region 3, under 11 U.S.C. SEC 1102(a) and (b), appointed the following amended unsecured creditors who are willing to serve on the Official Committee of Unsecured Creditors of Signature Styles LLC. SOLYNDRA LLC: Seeks to Reject Lease for Fremont, Calif. Building ---------------------------------------------------------------- Solyndra LLC and 360 Degree Solar Holdings Inc. seek Bankruptcy Court permission to reject an unexpired lease of non-residential real property located at 400-472 Kato Terrace (Building 5), effective Sept. 9; and abandon any personal property located at the premises. The Debtors' manufacturing operations have been discontinued while the company evaluates its restructuring options. Previously, the Debtors operated their business: (1) at leased premises at 47700 Kato Road and 1055 Page Avenue (Buildings 1 and 2), 901 Page Avenue (Building 3), 400-472 Kato Terrace (Building 5) and 1210 California Circle (Building 6), all in Fremont, California, and (2) at premises owned by the Debtors at 47488 Kato Terrace, also in Fremont, California. The Debtors leased the property under an Industrial Lease dated Sept. 16, 2003, between Walton CWCA Scott Creek 28, L.L.C. and Solyndra, as amended. About Solyndra LLC Founded in 2005, Solyndra LLC is a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had approximately 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. In the Chapter 11 cases, the Debtors are pursuing a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors are unable to identify any such potential buyers, an orderly liquidation of the Debtors' assets for the benefit of their creditors. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. SOLYNDRA LLC: Faces 2 Class Suits Over WARN Act Violations ---------------------------------------------------------- Peter M. Kohlstadt and Dan Bruan filed separate lawsuits in bankruptcy court, on behalf of a class of similarly situated former employees of Solyndra LLC and 360 Degree Solar Holdings Inc. over mass layoffs and plant closing on Aug. 31, 2011, in violation of the 60-day advance written notice under the Worker Adjustment and Retraining Notification Act, 29 U.S.C. Sec. 2101 et seq. Roughly 1,000 employees lost their jobs at facilities in the Freemont, California area and elsewhere. The Kohlstadt action also asserts violations of the California Labor Code Sec. 1400 et seq. The Plaintiffs seek class action certification and appointment as class representative. The Kohlstadt action was originally filed on Sept. 2, 2011, in the U.S. District Court for the Northern District of California, Case No. C11-04403 JSC. The Plaintiffs seek to recover 60 days wages and benefits, pursuant to the WARN Acts, from the Defendants, as well as full accrued paid time off. The Plaintiffs assert their claims are entitled to first priority administrative expense status pursuant to the Sec. 503(b)(1)(A) of the Bankruptcy Code. Bill Rochelle, the bankruptcy columnist for Bloomberg News, notes that if the suits are successful, wages owing to the workers could represent priority claims in the Chapter 11 case that would be have to be paid in full if Solyndra is to confirm a reorganization plan. Counsel to the Kohlstadt Plaintiffs are: Frederick Rosner, Esq. THE ROSNER LAW GROUP LLC 824 N. Market Street, Suite 810 Wilmington, DE 19801 Telephone: (302) 777-1111 E-mail: rosner@teamrosner.com - and - Jack A. Raisner, Esq. Rene S. Roupinian, Esq. OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, NY 10016 Telephone: (212) 245-1000 E-mail: jar@outtengolden.com rsr@outtengolden.com Counsel to the Bruan Plaintiffs are: James E. Huggett, Esq. Stephanie Noble Tickle, Esq. MARGOLIS EDELSTEIN 750 Shipyard Drive, Suite 102 Wilmington, DE 19801 Tel: 302-888-1112 Fax: 302-888-1119 E-mail: jhuggett@margolisedelstein.com - and - Stuart J. Miller, Esq. LANKENAU & MILLER, LLP 132 Nassau Street, Suite 423 New York, NY 10038 Tel: 212-581-5005 Fax: 212-581-2122 - and - Mary E. Olsen, Esq. M. Vance McCrary, Esq. THE GARDNER FIRM P.C. 201 S. Washington Ave. Mobile, AL 36602 Tel: 251-433-8100 Fax: 251-433-8181 E-mail: molsen@thegardnerfirm.com About Solyndra LLC Founded in 2005, Solyndra LLC is a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had approximately 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. In the Chapter 11 cases, the Debtors are pursuing a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors are unable to identify any such potential buyers, an orderly liquidation of the Debtors' assets for the benefit of their creditors. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. SOUTH EDGE: Judge Approves Plan's Disclosure Statement ------------------------------------------------------ Stewart Bishop at Bankruptcy Law360 reports that a Nevada bankruptcy judge on Thursday advanced a reorganization plan for South Edge LLC, approving the disclosure statement for the proposal to pay down debt and salvage the Las Vegas housing development project. Law360 relates that the plan, which is underpinned by settlements with a number of building companies, provides lenders with roughly $330 million in recoveries and offers unsecured creditors a share of a $1 million fund. A hearing on the confirmation of the plan has been scheduled for Oct. 17. About South Edge Las Vegas, Nevada-based South Edge LLC owns the Inspirada project, an uncompleted 2,000-acre residential development in Henderson, Nevada, about 16 miles (26 kilometers) southeast of Las Vegas. The eight owners of the project include an affiliate of KB Home, a 49% owner. Other owners are Coleman Toll LP with 10.5%, Pardee Homes Nevada Inc. with 4.9%, Meritage Homes with 3.5%, and Beazer Homes USA Inc. with 2.6%. JPMorgan Chase Bank, N.A., Credit Agricole Corporate and Investment Bank, and Wells Fargo Bank, N.A., filed an involuntary chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 10-32968) on Dec. 9, 2010, against South Edge, LLC. The petitioning creditors are part of a lender group that provided a $595 million credit. New York-based JPMorgan serves as lender and agent for the group. South Edge filed motions to dismiss the involuntary petition. The Court conducted a contested trial on Jan. 24 and 25, 2011, and Feb. 2 and 3, 2011. On Feb. 3, 2011, the Court entered an order for relief under Chapter 11 of the Bankruptcy Code against the Debtor and issued an order directing the appointment of a chapter 11 trustee. The United States Trustee appointed Cynthia Nelson to serve as Chapter 11 trustee on Feb. 20, 2011. The Court approved the appointment three days later. South Edge is represented by lawyers at Klee, Tuchin, Bogdanoff and Stern LLP, and The Schwartz Law Firm, Inc., as legal counsel. The Chapter 11 trustee also tapped Schwartzer & McPherson Law Firm as local counsel. Petitioning creditors JPMorgan Chase Bank, N.A., and Wells Fargo Bank, N.A., are represented by lawyers at Morrison and Foerster LLP; and Lewis and Roca LLP. Credit Agricole is represented by lawyers at Haynes and Boone LLP, and Jolley Urga Wirth Woodbury & Standish. SOUTH OF THE STADIUM: Can Hire Richard W. Ward as Bankr. Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized South of the Stadium I, LLC, to employ Richard W. Ward as counsel. As reported in the Troubled Company Reporter on July 6, 2011, Mr. Ward is expected to assist the Debtor in carrying out the duties as debtor-in-possession. The Debtor said that Mr. Ward received totaling $9,961 retainer fee. Mr. Ward charges $300 per hour for this engagement. The Debtor assured the Court that Mr. Ward is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About South of the Stadium South of the Stadium I, LLC, in Carrollton, Texas, filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 11-43278) on June 6, 2011. Debtor-affiliates 261 CW Springs LTD (Bankr. N.D. Tex. Case No. 11-33757), WS Minerals LLC (Bankr. N.D. Tex. Case No. 11-43273), and WS Mineral Holdings LLC (Bankr. N.D. Tex. Case No. 11-43290) also filed on the same day. Judge D. Michael Lynn presides over the cases. Richard W. Ward, Esq. -- rwward@airmail.net -- Plano, Texas, serves as the Debtors' bankruptcy counsel. South of the Stadium I, WS Minerals LLC, and WS Mineral Holdings LLC each estimated assets and debts of $10 million to $50 million in their petitions. 261 CW Springs estimated assets and debts of $1 million to $10 million in its petition. The petitions were signed by Jeff Shirley, authorized representative. SPECTRAWATT INC: To Auction Off Hudson Valley Facility Sept. 28 --------------------------------------------------------------- PVTECH reports that SpectraWatt will auction off its 140,000 square-foot crystalline silicon cell manufacturing and research facility in Hudson Valley, New York, at the end of the month. According to the report, following the approval of Debtor's motion to engage Heritage Global Partners, which is currently pending in the United States Bankruptcy Court for the Southern District of New York, the auction will be held between 10 a.m. and 5 p.m. EDT on Wednesday, Sept. 28 via a live global webcast from the Hudson Valley Research Park in Hopewell Junction, New York. The report notes the premises and equipment to be auctioned will be open for inspection by potential buyers between 9:00 a.m. and 4:00 p.m. on Sept. 26 and 27, or by appointment. In the event that a bulk sale of SpectraWatt is agreed, the successful bidder has the option to take on the facility's existing lease and continue operations. "There is immediate expansion potential at this facility for any company who is at the ready to come in and capitalise this state- of-the art facility and its existing equipment and inventory," the report quotes Heritage Global Partners vice president Bruce Costello as saying. About SpectraWatt Based in Hopewell Junction, New York, SpectraWatt Inc. was spun off from Intel in June 2008 and raised $50 million through a sale of preferred stock to its former parent and other investors including Goldman Sachs Group Inc.'s Cogentrix Energy LLC, PCG Clean Energy and Berlin-based solar panel maker Solon SE. The Company has also issued about $36.7 million in senior secured convertible notes. The Company has a manufacturing facility in Hopewell Junction designed to generate over 200 megawatts of production per year. The plant began operations in January 2010 with an initial capacity of only 30 megawatts per year. The Company began winding down its affairs late last year after encountering setbacks and shut down the lone manufacturing facility in March, and fired all its workers. SpectraWatt filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 11-37366) on Aug. 19, 2011, in Poughkeepsie, New York. SpectraWatt estimated as much as $50 million in both debt and assets as of the Chapter 11 filing. SPRING POINTE: Sec. 341(a) Creditors' Meeting Set for Oct. 6 ------------------------------------------------------------ The U.S. Trustee for the District of Utah in Salt Lake City will hold a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a) in the bankruptcy case of Spring Pointe Development, L.L.C., on Oct. 6, 2011, at 405 South Main. The debtor's representative must be present at the meeting to be questioned under oath by the trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be continued and concluded at a later date without further notice. The court, after notice and a hearing, may order that the United States trustee not convene the meeting if the debtor has filed a plan for which the debtor solicited acceptances before filing the case. Proofs of Claim are due by Jan. 4, 2012. Government Proofs of Claim are due by Feb. 29, 2012. Spring Pointe Development, LLC, based in Springville, Utah, filed for Chapter 11 bankruptcy (Bankr. D. Utah Case No. 11-32972) on Sept. 2, 2011. Judge Joel T. Marker presides over the case. Michael R. Johnson, Esq., at Ray Quinney & Nebeker P.C., serves as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in debts. The petition was signed by Milton Christensen, managing member. STELLAR GT: Court OKs Nov. 2 Auction of Substantially All Assets ---------------------------------------------------------------- The Hon. Paul Mannes of the U.S. Bankruptcy Court for the District of Maryland authorized Stellar GT TIC LLC, and VFF TIC LLC, to sell all or substantially all of the Debtors' assets. The Debtors intended to sell 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, and commonly known as The Georgian, which is subject to liens held by 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, all acting by and through Helios AMC, LLC, in its capacity as Special Servicer. On Nov. 2, the qualified bidder with the highest cash purchase price that exceeds the amount of lender's highest credit bid will be declared the successful bidder, and its bid will be presented to the Court at the confirmation hearing for approval. The auction of the project will be conducted by the broker at: CB RICHARD ELLIS INC. Attn: William S. Roohan 250 West Pratt Street Baltimore, MD 21201 Tel: (410) 244-7100 Fax: (410) 244-3107 E-mail: bill.roohan@cbre.com The deadline for submitting a first-round sealed bid is 5:00 p.m. Eastern Time on Oct. 18, 2011. The lender may submit a credit bid by Oct. 18. The lender may credit bid the full amount of its allowed secured claim at the auction. The deadline for submitting second-rounds sealed bids to the broker is 5:00 p.m., on Oct. 26, provided, however, that the lender's final credit bid will be submitted to the broker by 5:00 p.m. on Oct. 11. The Debtors related that if there is no auction (for failure to receive any qualified bids), or if there is an auction and the prevailing bidder is the lender (based on its credit bid and the failure of any qualifying bidder to outbid lender), then the project will not be sold, and the hearing on approval of any sale will be canceled and the loan will be restructured pursuant to the amended loan documents. The lender is represented by: KILPATRICK TOWNSEND & STOCKTON LLP Mark D. Taylor, Esq. Suite 900, 607 14th Street, NW Washington, DC 20005-2018 Tel: (202) 508-5800 Fax: (202) 508-5858 ZEICHNER ELLMAN & KRAUSE LLP Stephen F. Ellman, Esq. Jantra Van Roy, Esq. 575 Lexington Avenue New York, NY 10022 Tel: (212) 826-5353 Fax: (212) 753-0396 E-mail: sellman@zeklaw.com jvanroy@zeklaw.com About Stellar GT TIC and VFF TIC 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 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. The U.S. Trustee for Region 4, notified the Court that he has not appointed an unsecured creditors' committee in the Chapter 11 cases of Stellar GT TIC LLC and VFF TIC LLC. SUGARLEAF TIMBER: Files Chapter 11 Reorganization Plan ------------------------------------------------------ Sugarleaf Timber, LLC, filed a Chapter 11 plan of reorganization and disclosure statement to the U.S. Bankruptcy Court for the Middle District of Florida. The Plan essentially provides that (a) the Reorganized Debtor will transfer a portion of its properties to Farm Credit of North Florida in full satisfaction of the Farm Credit Notes; and (b) the Reorganized Debtor will operate its business, including the marketing and sale of the property vested in the Reorganized Debtor, to pay the remainder of its debts. The Debtor obtained over $20 million in loans from Farm Credit in 2007 to purchase, develop and sell more than 7,000 acres of land in Clay County, Florida. The Farm Credit loans are evidenced by three notes. The Debtor believes it will pay its secured and unsecured creditors in full based on a review of claims and plan treatment, but cannot guarantee that result as it is dependent on the claims objection process and events in its bankruptcy case. Under the Plan, Class 1 Claims (Secured Claim of Farm Credit) will be granted a special warranty deed that will transfer all of the Debtor's interest in certain of properties to Farm Credit. Class 2 Claims (Secured Tax Claim of the Clay County Tax Collector) will be paid in full with statutory interest in May 2016 or the date of the sale of Property on which the Tax Collector has a lien. Class 3 Priority Claims under Sec. 507(a)(8) of the Bankruptcy Code will be paid in full on Aug. 31, 2012, or earlier as elected by the Reorganized Debtor. Class 4 Claims are general unsecured claims for which the allowed amount exceeds $300. Holders of these claims will be paid (i) $50,000 on the later of May 7, 2012, or the first day of the month on which the net proceeds from the sale of the "Clay County Remaining Tract" exceeds $50,000; and (ii) additional $50,000 payments on an annual basis on the anniversary of the Effective Date until the allowed claim are paid in full. No interest will accrue on the claims. Class 5 Claims are general unsecured claims that are not entitled to priority under Sec. 507 of the Bankruptcy Code for which the allowed claim does not exceed $300. Each holder of these Claims will receive payment in full on the initial distribution date. Management of the Reorganized Debtor will remain with Diversified Investments of Jacksonville, LLC, through its manager, Victoria Towers. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/SUGARLEAFTIMBER_DS.PDF About Sugarleaf Timber Sugarleaf Timber, LLC, in Jacksonville, Florida, filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 11-03352) on May 8, 2011. Chief Bankruptcy Judge Paul M. Glenn presides over the case. Robert D. Wilcox, Esq., at Brennan, Manna & Diamond, PL, serves as the Debtor's bankruptcy counsel. In its Schedules, the Debtor disclosed assets of $31,016,486 and liabilities of $26,781,079. The petition was signed by Victoria D. Towers, manager of Diversified Investments of Jacksonville LLC, which serves as manager to the Debtor. TCI LUNA: Hiring Eric A. Liepins as Bankruptcy Counsel ------------------------------------------------------ TCI Luna Ventures LLC asks the Bankruptcy Court for authority to employ Eric A. Liepins, Esq., and his law firm, Eric A. Liepins, P.C., as Chapter 11 counsel. The Firm has received a $7,500 retainer plus the filing fee. The Firm will be paid at these hourly rates: Eric A. Liepins $250 per hour Paralegals and Legal Assistants $30-$50 per hour Mr. Liepins attests that the Firm does not presently hold or represent any interest adverse to the interest of the Debtor or the estate and is disinterested within the meaning of 11 U.S.C. Sec. 101(13). Mr. Liepins, however, discloses that prior to the engagement of the Firm to represent the Debtor, the Firm had not previously represented the Debtor or any of its principals. The Firm did represent Art Collections, Inc., a debtor in a Chapter 11 proceeding in the Western District of Texas. There are no debts or claims between ART and the Debtor. The Firm also currently represents TCI Courtyard, Inc., in a matter pending in the United States Bankruptcy Court Northern District of Texas. Mr. Liepins added that there are no claims between TCI Luna Ventures and TCI Courtyard. TCI Luna Ventures' shareholder is also a shareholder of ART and TCI Courtyard. About TCI Luna Ventures TCI Luna Ventures, LLC, in Dallas, Texas, filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No. 11-35630) on Sept. 2, 2011. Judge Barbara J. Houser presides over the case. TCI Luna Ventures estimated $10 million to $50 million in assets and $1 million to $10 million in debts. The petition was signed by Craig Landress, vice president. TCI Courtyard, a hotel company, filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 11-34977) on Aug. 1, 2011. TCI Courtyard estimated assets of up to $10 million and debts of up to $50 million. TCI LUNA: Sec. 341 Creditors' Meeting Set for Sept. 28 ------------------------------------------------------ The U.S. Trustee for the Northern District of Texas will convene a Meeting of creditors pursuant to 11 U.S.C. Sec. 341(a) in the bankruptcy case of TCI Luna Ventures, LLC, on Sept. 28, 2011, at 9:15 a.m. at Dallas, Room 976. The debtor's representative must be present at the meeting to be questioned under oath by the trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be continued and concluded at a later date without further notice. The court, after notice and a hearing, may order that the United States trustee not convene the meeting if the debtor has filed a plan for which the debtor solicited acceptances before filing the case. Proofs of Claim are due by Dec. 27, 2011. The Debtor's schedules of assets and liabilities are due Sept. 16. About TCI Luna Ventures TCI Luna Ventures, LLC, in Dallas, Texas, filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No. 11-35630) on Sept. 2, 2011. Judge Barbara J. Houser presides over the case. Eric A. Liepins, P.C., serves as the Debtor's Chapter 11 counsel. TCI Luna Ventures estimated $10 million to $50 million in assets and $1 million to $10 million in debts. The petition was signed by Craig Landress, vice president. TCI Courtyard, a hotel company, filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 11-34977) on Aug. 1, 2011. TCI Courtyard estimated assets of up to $10 million and debts of up to $50 million. TERRESTAR CORP: Court to Consider Plan Outline on Sept. 19 ---------------------------------------------------------- The Honorable Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York will consider on Sept. 19, 2011, the adequacy of the disclosure statement explaining the proposed plan of TerreStar Corporation and eight of its debtor affiliates. The Disclosure Statement dated Aug. 3, 2011 explains the joint plan of reorganization the TSC Debtors filed on July 22, 2011. Copies of the Plan Documents are available for free at: http://bankrupt.com/misc/Terrestar_Corp_Plan.pdf http://bankrupt.com/misc/Terrestar_Corp_DS.pdf As previously reported by The Troubled Company Reporter on Aug. 12, 2011, the Disclosure Statement reveals that holders of $4.32 million in bridge loan claims against TSC and TerreStar Holdings Inc. will recover 98% of their claims. Holders of $35 million to $165 million in general unsecured claims against TSC and TerreStar Holdings will have a 100% recovery through the receipt of notes and new preferred stock. Holders of general unsecured claims against the other TSC Debtors (aggregating $105 million to $108 million for each Debtor) will have a 0% to 100% recovery (with the payment in the form of cash or equity in the reorganized entity). Holders of Preferred Series A and Series B TSC Interests aggregating $318.5 million will recover 4.3% to 45.1%, with each holder receiving its pro rata share of the new common stock of reorganized TSC. Existing equity interests in TSC will be cancelled and holders of those interests will receive no distributions. The Plan also provides for the issuance of New Common Stock, New Preferred Stock, and New TSC Notes. On the Plan Effective Date, the Reorganized Debtors will become private, nonreporting companies, and the Plan Securities will be not be registered or listed on any national securities exchange. Elektrobit Objects In court papers, Elektrobit Inc. asserts that the Disclosure Statement should not be approved until and unless it is revised to provide an explanation to creditors for what appears to be an overnight transfer of wealth, as of the Effective Date, from TSC's unsecured creditors to a group of TSC's equity holders of not less than $36 million. Elektrobit complains that the Disclosure Statement lacks adequate information and/or discussion regarding: -- non-debtor TerreStar 1.4 Holdings LLC; -- the reasons why the TSC Debtors delayed filing their Chapter 11 cases; -- the proposed Exit Facility; -- the consistent amount of unsecured claims against TSC's estate; -- the TSC Debtors' "disputes" involving two large unsecured claims by Elektrobit and Sprint; and -- the terms of the New TSC Notes and new preferred stock. Elektrobit, an engineering and manufacturing company in the telecommunications industry, has asserted a $27.8 million general unsecured claim against TSC. About TerreStar Corp. and TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which filed on Oct. 19, 2010. The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC's case is jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11-10612 (SHL). The seven Debtor entities who sought joint administration with TSC are TerreStar New York Inc., Motient Communications Inc., Motient Holdings Inc., Motient License Inc., Motient Services Inc., Motient Ventures Holdings Inc., and MVH Holdings Inc. TERRESTAR CORP: Shareholder Questions Akin Gump's Objectivity ------------------------------------------------------------- Eric Hornbeck at Bankruptcy Law360 reports that TerreStar Corp. shareholder Mohawk Capital LLC objected to the Company's disclosure statement Friday, saying it undervalued assets and that attorneys at Akin Gump Strauss Hauer & Feld LLP were too involved with an affiliate to objectively handle the proceedings. About TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which filed on Oct. 19, 2010. The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC's case is jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11-10612 (SHL). The seven Debtor entities who sought joint administration with TSC are TerreStar New York Inc., Motient Communications Inc., Motient Holdings Inc., Motient License Inc., Motient Services Inc., Motient Ventures Holdings Inc., and MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks -- TSN -- the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100 million to $500million in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the Committee's financial advisor. TerreStar has signed a contract to sell its business to Dish Network Corp. for $1.38 billion. TerreStar cancelled a June 30 auction because there were no competing bids submitted by the deadline. THORNBURG MORTGAGE: Judge Approves $94 Million Barclays Suit ------------------------------------------------------------ Alex Ortolani at Bankruptcy Law360 and Patrick Fitzgerald, writing for Dow Jones' Daily Bankruptcy Review, report that that U.S. District Judge Ellen Liptor Hollander ruled that the trustee for Thornburg Mortgage Inc. can continue with a $94 million suit against Barclays Capital Inc. Law360 relates that Judge Hollander rejected an appeal from Barclays to dismiss a suit filed by Thornburg, renamed TMST Inc., claiming the bank breached a contract with the mortgage lender when it undervalued mortgage-backed securities being used as collateral in order to make higher margin calls. Dow Jones' Daily Bankruptcy Review reports that District Judge Ellen Lipton Hollander of the U.S. District Court in Baltimore ruled that Joel I. Sher, the court-appointed trustee overseeing the liquidation of Thornburg Mortgage Inc., can sue Barclays Capital Inc., the investment-banking division of British bank Barclays PLC, over allegations that the bank made improper margin calls that helped drive the mortgage lender into bankruptcy. The District Court dismissed, however, the trustee's claim that the bank acted in bad faith. Mr. Sher seeks at least $94 million over the margin calls and subsequent seizure and sale of the mortgage- backed securities that Thornburg financed through BarCap. Dow Jones relates BarCap denied acting improperly and had sought a dismissal of the lawsuit. Dow Jones says BarCap spokeswoman Kerrie-Ann Cohen declined to comment on the ruling. The lawsuit is JOEL I. SHER Chapter 11 Trustee for TMST, Inc. f/k/a Thornburg Mortgage, Inc. Plaintiff, v. BARCLAYS CAPITAL, INC. Defendant, Civil No.-ELH-11-01982 (D. Md.). A copy of the District Court's Sept. 7, 2011 memorandum opinion is available at http://is.gd/W8ZUW4from Leagle.com. As reported by the Troubled Company Reporter on May 3, 2011, the TMST Trustee sued Wall Street banks for $2.2 billion, alleging they engaged in series of "collusive" and "predatory" schemes that eventually drove Thornburg into bankruptcy. The defendants include: * J.P. Morgan Chase & Co., * Citigroup Inc., * Goldman Sachs Group Inc., * Bank of America, * Countrywide Home Loans, * subsidiaries of Barclays PLC, * Credit Suisse Group, * Royal Bank of Scotland Group PLC, and * UBS AG In the suit against BofA and Countrywide, the Trustee contends Countrywide misrepresented the nature of hundreds of home loans securitized and sold to Thornburg in 2006; and that Bank of America, now Countrywide's parent, has "engaged in an elaborate corporate shell game" intended to shed Countrywide's liabilities. The Trustee is asking the bankruptcy judge overseeing the Thornburg case to force the bank to repurchase the loans. Dow Jones notes the Thornburg Trustee seeks $71 million from Goldman for what he says was the improper seizure of mortgage- backed securities that Thornburg had pledged to Goldman as collateral. The banks have denied wrongdoing. About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- was a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originated, acquired, and retained investments in adjustable and variable rate mortgage assets. Its ARM assets comprised of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage and its four affiliates filed for Chapter 11 bankruptcy (Bankr. D. Md. Lead Case No. 09-17787) on May 1, 2009. Thornburg changed its name to TMST, Inc. Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, served as counsel to Thornburg Mortgage. Orrick, Herrington & Sutcliffe LLP served as special counsel. Jim Murray, and David Hilty, at Houlihan Lokey Howard & Zukin Capital, Inc., served as investment banker and financial advisor. Protiviti Inc. served as financial advisory services. KPMG LLP served as the tax consultant. Epiq Systems, Inc., serves claims and noticing agent. Thornburg disclosed total assets of $24.4 billion and total debts of $24.7 billion, as of Jan. 31, 2009. On Oct. 28, 2009, the Court approved the appointment of Joel I. Sher as the Chapter 11 Trustee for the Company, TMST Acquisition Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging Strategies, Inc. He is represented by Shapiro Sher Guinot & Sandler. TONY PACKO'S: Deposition in Receivership Case Uncertain ------------------------------------------------------- Sheena Harrison at the Toledo Blade reports that parties in the Tony Packo's Inc. receivership case are fighting over whether to move forward with court depositions scheduled by Robin Horvath, the company's co-owner and chief operating officer. Mr. Horvath has been fighting Tony Packo III, executive vice president, and Tony Packo, Jr., company president, for control of the Toledo restaurant chain since last August, according to Toledo Blade. The report relates that Mr. Horvath owns half of the family business, while the Packos jointly own the other 50 percent. According to filings in Lucas County Common Pleas Court, Mr. Horvath's attorney had scheduled depositions that were to take place this month for the Packos, as well as Controller Cathleen Dooley and Thomas Killam, who is the former corporate attorney for the business, Toledo Blade says. The report discloses that filings tell the parties that they are to bring copies of documents and materials that detail, among other things, employment agreements for the Packos and funds paid to them by the company. Toledo Blade notes that Mr. Horvath has accused the Packos in court of misspending company funds, which the Packos have denied. His attorney is seeking information to respond to a motion from the Packos that would dismiss Mr. Horvath's civil lawsuit against them, the report says. Opposing attorneys in the case have sought to delay or prevent the depositions from moving forward with the Packos, Ms. Dooley, and Mr. Killam, in part because of scheduling conflicts, confidentiality issues, and issues with the amount of information that Mr. Horvath has requested, according to filings, Toledo Blade relates. The possibility of appointing a "special master," which is an attorney or judge who would referee depositions in the case, was raised during a hearing in front of Judge Gene Zmuda. The East Toledo, Ohio company, with area restaurants that serve its well-known Hungarian hot dogs and chili sauce, continues to operate during the litigation, the report adds. TRANSWEST RESORT: Can Use Cash Collateral Until Dec. 1 ------------------------------------------------------ Judge Eileen W. Hollowell of the U.S. Bankruptcy Court for the District of Arizona authorized Transwest Resort Properties, Inc., and its debtor affiliates to use cash collateral until December 1, 2011. A full-text copy of the Cash Collateral Order with the Budget is available for free at http://ResearchArchives.com/t/s?76e7 About Transwest Resort Tucson, Arizona-based Transwest Resort Properties, Inc., filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 10- 37134) on Nov. 17, 2010. Kasey C. Nye, Esq., and Elizabeth S. Fella, Esq., at Quarles & Brady LLP, in Tucson, Ariz., assist the Debtor in its restructuring effort. The Debtor estimated its assets at up to $50,000 and debts at $10 million to $50 million. Affiliates Transwest Hilton Head Property, L.L.C. (Bankr. D. Ariz. Case No. 10-37170), Transwest Tucson Property, L.L.C. (Bankr. D. Ariz. Case No. 10-37160), Transwest Tucson II, L.L.C. (Bankr. D. Ariz. Case No. 10-37151), and Transwest Hilton Head II, L.L.C. (Bankr. D. Ariz. Case No. 10-37145) filed separate Chapter 11 petitions on Nov. 17, 2010. BeachFleischman PC serves as tax preparer and advisor, accountant and auditor. Hundley & Company, LLC, serves as financial restructuring and interest rate experts, and Hospitality Real Estate Counselors as valuation consultant and expert. Transwest Hilton Head Property estimated assets at $10 million to $50 million and debts at $100 million to $500 million. Transwest Tucson Property estimated assets at $50 million to $100 million and debts at $100 million to $500 million. The U.S. Trustee appointed an Official Committee of Unsecured Creditors on Dec. 15, 2010. USG CORP: Fitch Downgrades Issuer Default Rating to 'B-' -------------------------------------------------------- Fitch Ratings has downgraded USG Corporation's Issuer Default Rating (IDR) to 'B-' from 'B'. The Rating Outlook remains Negative. The ratings downgrade and the Negative Outlook reflect Fitch's belief that underlying demand for the company's products will remain weak through at least 2012 and the company's liquidity position is likely to deteriorate in the next 18 months. With the recent softening in the economy and lowered economic growth expectations for 2011 and 2012, the environment may at best support a relatively modest recovery in housing metrics over the next year and a half. Fitch had previously forecast a slightly more robust housing environment in 2011 and 2012. Moreover, new commercial construction is expected to decline further this year and may only grow moderately next year. USG currently has $923 million of liquidity comprised of $402 million of cash, $323 million of short-term and long-term marketable securities and $198 million of availability under its U.S. and Canadian revolving credit facilities. However, a weak operating environment over the next 12 - 18 months will likely result in continued losses and negative free cash flow (FCF) for the company, thereby eroding its currently solid liquidity position. Fitch currently projects USG's overall liquidity to be between $650 million and $700 million by year-end 2012. Should the depressed level of housing starts and weak new non-residential construction spending persist beyond 2012, USG's liquidity could deteriorate further and lead to additional negative rating actions. The rating for USG also reflects the company's leading market position in all of its businesses, strong brand recognition, its large manufacturing network and sizeable gypsum reserves. Risks include the cyclicality of the company's end-markets, excess capacity currently in place in the U.S. wallboard industry, volatility of wallboard pricing and shipments and the company's high leverage. USG markets its products primarily to the construction industry, with approximately 22% of the company's 2010 net sales directed toward new residential construction, 22% derived from new non- residential construction, 54% from the repair and remodel segment (commercial and residential) and 2% from other industrial products. In the past, earnings stability in the building materials segment has been driven by end-market diversification - historically, weakness in residential demand has been largely offset by commercial/industrial strength and/or repair and remodel spending. This has not been the case during the past few years, wherein most of USG's end-markets were in decline simultaneously although at different stages of correction. The housing recovery has been irregular so far and to date rather anemic. In 2011, total housing starts should edge down approximately 2.8% to 571,000. Single-family starts should fall roughly 13.1% to 409,000. In a somewhat stronger economy with less distressed home sales competition and less competitive rental cost alternatives, but moderately higher mortgage rates, total housing starts should improve nearly 7.2%, while single-family housing starts increase 6.1% in 2012. Fitch currently projects home improvement spending to increase 3% in 2011 and to grow 4% in 2012. The gradual improvement in the economy and moderately better housing market conditions could provide the catalyst for a slightly more robust increase in spending for remodeling projects next year. New commercial construction started to weaken early in 2009 and that pattern continued and intensified in 2010. Commercial construction is projected to decrease further this year. Fitch currently projects private non-residential construction spending (as measured by the Census Bureau) to decline 8% in 2011 before moderately increasing by 5% in 2012. While Fitch is currently projecting some improvement in the construction sector next year, this level of activity is unlikely to result in much of an improvement in wallboard demand and industry capacity utilization rates. Within this environment, selling price increases for its gypsum wallboard product may be challenging. However, certain manufacturers such as USG may gain some traction with selective price increases associated with innovative new products, such as its ultra-light wallboard panels. Fitch has downgraded the following ratings for USG with a Negative Outlook: -- IDR to 'B-' from 'B'; -- Secured bank credit facility to 'BB-/RR1' from 'BB/RR1'; -- Senior unsecured guaranteed notes to 'B+/RR2' from 'BB/RR1'; -- Senior unsecured notes to 'CCC/RR5' from 'B-/RR5'; -- Convertible senior unsecured notes to 'CCC/RR5' from 'B- /RR5'. Fitch's Recovery Rating (RR) of 'RR1' on USG's $400 million secured revolving credit facility indicates outstanding recovery prospects for holders of this debt issue. Fitch's 'RR2' on USG's $650 million of unsecured guaranteed notes indicates superior recovery prospects. (The $650 million unsecured notes are guaranteed on a senior unsecured basis by certain of USG's domestic subsidiaries.) Fitch's 'RR5' on USG's senior unsecured notes that are not guaranteed by the company's subsidiaries indicates below average recovery prospects for holders of these debt issues. Fitch applied a liquidation analysis for these RRs. VITAMINSPICE INC: Hearing on Involuntary's Dismissal Today ---------------------------------------------------------- The Hon. Magdeline D. Coleman of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania will convene a hearing on Oct. 14, 2011, at 11:00 a.m., to consider VitaminSpice, Inc.'s motion to dismiss the involuntary petition and lift the automatic stay pending adjudication of the motion. The Alleged Debtor has asked the Court to dismiss the involuntary petition on several independent grounds, among other things: -- the petition is a bad-faith filing aimed at preempting several pending cases and avoiding the consequences of misconduct committed by the supposed creditors, including Jehu Hand, who actually was VitaminSpice's counsel before he turned on the company; -- it is based on numerous falsities and misrepresentations, the alleged debts are baseless, manufactured with false statements and total mischaracterizations of the facts and the parties' relationships; and -- it is focused on strategic and tactical maneuvers rather than a legitimate request by real creditors. The Alleged Debtor also asked that the Court award the Debtor its attorneys' fees and costs, and set a hearing to determine the Debtor's compensatory and punitive damages. About VitaminSpice Five creditors filed an involuntary Chapter 11 petition (Bankr. E.D. Pa. Case No. 16200) against Wayne, Pennsylvania-based VitaminSpice aka Qualsec on Aug. 5, 2011. The creditors, owed roughly $414,000 in the aggregate, are: John Robison in Philadelphia, Pennsylvania; IBT South Florida, LLC, in Fort Lauderdale, Florida; Learned J. Hand in Chapel Hill, North Carolina; and Jehu Hand in Dana Point, California; and Esthetics World in Cheyenne, Wyoming. Judge Magdeline D. Coleman presides over the case. Peter Edward Sheridan, Esq. -- sheridan.pete@gmail.com -- in Philadelphia, Pennsylvania, represents the petitioning creditors. The company makes vitamin- and antioxidant-infused spices as food and dietary supplements. WACO HOLDINGS: Scaffolding Installer Files for Ch. 11 to Sell Biz ----------------------------------------------------------------- Waco Holdings Inc., a designer and installer of scaffolding, filed a Chapter 11 petition (Bankr. N.D. Ohio Case No. 11-17843) on Sept. 9 in Cleveland. Bill Rochelle, the bankruptcy columnist for Bloomberg News, for a sale of the business to competitor North American Scaffolding Inc. North American acquired the first-lien debt that has an outstanding balance of $13.7 million. Cleveland-based Waco has operations in five states. The loss of $2 million on the bankruptcy of the uncompleted 63-story hotel in Las Vegas owned by Fontainebleau Las Vegas LLC precipitated the first default on secured debt. Waco's revenue in 2010 was $36.7 million. WASHINGTON MUTUAL: Fights Investors Over $337MM in Asset Claims --------------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that Washington Mutual Inc. squared off in Delaware bankruptcy court Monday with a class of investors challenging the company's treatment of certain securities as equity rather than debt in its reorganization plan, with $337 million hanging in the balance. According to Law360, the investors, led by hedge fund Nantahala Capital Partners LP, lodged an adversary class action against the bankrupt holding company in 2010, crying foul at WMI's attempt to transfer the litigation recoveries upon which the securities known as litigation tracking warrants are based to JPMorgan Chase Bank N.A. 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. WESTERN COMMUNICATIONS: Seeks to Access BofA's Cash Collateral -------------------------------------------------------------- Western Communications, Inc., asks the United States Bankruptcy Court for the District of Oregon for (a) an emergency order authorizing it to use cash collateral on a temporary basis until a final hearing can be held, and (b) a final order authorizing use of cash collateral during the pendency of its bankruptcy case. Albert N. Kennedy, Esq., at Tonkon Torp LLP, in Portland, Oregon - - al.kennedy@tonkon.com -- relates that in late 2008/early 2009, the Debtor's lender, Bank of America, N.A., declared the Debtor in default of financial covenants set forth in its loan documents, and in June 2009, the Debtor entered into a forbearance agreement with BofA, and continued to operate under the forbearance agreement until June 23, 2011. The Debtor made all scheduled payments to BofA through June 30, 2011. BofA claims a security interest in substantially all of the Debtor's personal property and in certain real property. To preserve and maintain the assets of the bankruptcy estate and to preserve the value of the Debtor as a going concern, Mr. Kennedy asserts that the Debtor requires the use of BofA's cash collateral pursuant to a proposed 13-week Cash Collateral budget, a copy of which is available for free at: http://bankrupt.com/misc/WESTERNCOMM_ProposedBudget.pdf Mr. Kennedy contends that without the use of the Cash Collateral, the Debtor has insufficient funds to meet its expenses and other payments set forth in the Budget. He adds that that Debtor has an immediate need to use BofA's Cash Collateral to pay its vendors, employees, benefit plans, and ongoing operating expenses. To provide adequate protection to BofA, the Debtor proposes that BofA be granted a replacement security interest in and lien upon the Debtor's assets generated or acquired postpetition of the same kind as were subject to BofA's lien on the Petition Date. The Debtor believes the going concern value of the assets securing the indebtedness owing to BofA exceeds the amount of the indebtedness owing to BofA. BofA Reserves Rights to Object BofA tells the Court that it does not object to the Debtor's proposed budget. Because the Debtor has scheduled a hearing on the Cash Collateral Motion on a shortened time, BofA has not yet been able to address certain issues with the Debtor's counsel, although BofA anticipates several, if not all, of those issues may be resolved prior to the hearing, Brad A. Goergen, Esq., at Graham & Dunn PC, in Seattle, Washington -- bgoergen@grahamdunn.com -- says on behalf of BofA. In the event no resolution is reached, BofA asks that the Court require certain modifications or clarifications to the Debtor's Proposed Order, including these: -- the Debtor should not be allowed to exceed the budgeted amount for any line item in the Budget, and the total budgeted amount, by more than 5% without the prior written consent of BofA or prior Court approval; -- the specified date for the expiration of the Debtor's authority to use Cash Collateral should be November 27, 2011; -- the term "Prepetition Collateral" should be expressly defined so as to avoid any ambiguity as to the meaning and effect of the proposed language; -- the language concerning the priority of BofA's "Replacement Lien" should be expanded to include that with respect to the collateral encumbered by prepetition liens in favor of BofA, BofA's Replacement Lien will have the same priority as its prepetition liens in any property or assets acquired by the Debtor postpetition of the same nature or type; -- additional language should be added modifying the automatic stay so that BofA may, if it elects to do so, perfect its Replacement Lien under applicable nonbankruptcy law; and -- the Proposed Order should include language allowing BofA to access its real property collateral for the purposes of inspecting and appraising the real property. About Western Communications Western Communications, Inc., is a family-owned corporation founded by renowned editor Robert W. Chandler. Headquartered in Bend, Oregon, Western Communications is a small market newspaper, niche publishing, printing and digital media company with publications spread throughout Oregon (six publications) and California (two publications). The Company produces and publishes the Bend Bulletin, the Baker City Herald, the La Grande Observer, the Redmond Spokesman, the Brookings Curry Coastal Pilot, the Crescent City Daily Triplicate, and the Sonora Union Democrat. The Company also publishes the Central Oregon Nickel Ads in Bend, Oregon. Western Communications filed for Chapter 11 bankruptcy (Bankr. Ore. Case No. 11-37319) on Aug. 23, 2011. Albert N. Kennedy, Esq., and Michael W. Fletcher, Esq., at Tonkon Torp LLP serve as the Debtor's bankruptcy counsel. The Zinser Law Firm, P.C., and Davis Wright Tremaine LLP serve as the Debtor's special purpose counsel, while Grove, Mueller & Swank, P.C., serves as accountants. The Debtor scheduled $10 million to $50 million in assets and debts. The petition was signed by Gordon Black, president. WESTERN COMMUNICATIONS: Wants Until Sept. 20 to File Schedules -------------------------------------------------------------- Western Communications, Inc., asks the United States Bankruptcy Court for the District of Oregon for a two-week extension of time within which to file its schedules of assets and liabilities and statement of financial affairs, through Sept. 20, 2011. Albert N. Kennedy, Esq., at Tonkon Torp LLP, in Portland, Oregon, tells Judge Elizabeth L. Perris that the Debtor is working diligently to accurately complete its Schedules and Statement. He contends that the sought extension should not cause prejudice to any party. About Western Communications Western Communications, Inc., is a family-owned corporation founded by renowned editor Robert W. Chandler. Headquartered in Bend, Oregon, Western Communications is a small market newspaper, niche publishing, printing and digital media company with publications spread throughout Oregon (six publications) and California (two publications). The Company produces and publishes the Bend Bulletin, the Baker City Herald, the La Grande Observer, the Redmond Spokesman, the Brookings Curry Coastal Pilot, the Crescent City Daily Triplicate, and the Sonora Union Democrat. The Company also publishes the Central Oregon Nickel Ads in Bend, Oregon. Western Communications filed for Chapter 11 bankruptcy (Bankr. Ore. Case No. 11-37319) on Aug. 23, 2011. Albert N. Kennedy, Esq., and Michael W. Fletcher, Esq., at Tonkon Torp LLP serve as the Debtor's bankruptcy counsel. The Zinser Law Firm, P.C., and Davis Wright Tremaine LLP serve as the Debtor's special purpose counsel, while Grove, Mueller & Swank, P.C., serves as accountants. The Debtor scheduled $10 million to $50 million in assets and debts. The petition was signed by Gordon Black, president. WESTERN COMMUNICATIONS: Sec. 341 Creditors Meeting on Sept. 30 -------------------------------------------------------------- The United States Trustee for Region 18 will hold a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341 in the bankruptcy case of Western Communications, Inc., on Sept. 30, 2011, at 1:30 p.m. at the Office of the U.S. Trustee, at Room 223, 620 SW Main Street, Suite 213, in Portland, Oregon. Deadline for filing proofs of claim is on Dec. 29, 2011. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. The Debtor's representative must be present at the meeting to be questioned under oath by the trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be continued and concluded at a later date without further notice. About Western Communications Western Communications, Inc., is a family-owned corporation founded by renowned editor Robert W. Chandler. Headquartered in Bend, Oregon, Western Communications is a small market newspaper, niche publishing, printing and digital media company with publications spread throughout Oregon (six publications) and California (two publications). The Company produces and publishes the Bend Bulletin, the Baker City Herald, the La Grande Observer, the Redmond Spokesman, the Brookings Curry Coastal Pilot, the Crescent City Daily Triplicate, and the Sonora Union Democrat. The Company also publishes the Central Oregon Nickel Ads in Bend, Oregon. Western Communications filed for Chapter 11 bankruptcy (Bankr. Ore. Case No. 11-37319) on Aug. 23, 2011. Albert N. Kennedy, Esq., and Michael W. Fletcher, Esq., at Tonkon Torp LLP serve as the Debtor's bankruptcy counsel. The Zinser Law Firm, P.C., and Davis Wright Tremaine LLP serve as the Debtor's special purpose counsel, while Grove, Mueller & Swank, P.C., serves as accountants. The Debtor scheduled $10 million to $50 million in assets and debts. The petition was signed by Gordon Black, president. WESTERN COMMUNICATIONS: Taps Tonkon Torp as Ch. 11 Counsel ---------------------------------------------------------- Western Communications, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Oregon to employ Tonkon Torp LLP as Chapter 11 counsel for the Debtor. As counsel, Tonkon Torp will advise the Debtor of its rights, powers and duties as a debtor and debtor-in-possession, take all actions necessary to protect and preserve the Debtor's bankruptcy estate, prepare all necessary applications, motions, responses, notices and other papers, and advise the Debtor with respect to, and assist in the negotiation and documentation of, financing agreements, debt and cash collateral orders, and related transactions, among other tasks. The Debtor will compensate Tonkon Torp on an hourly basis in accordance with its ordinary and customary hourly rates: Attorney Name Status Hourly Rate ------------- ------ ----------- Albert N. Kennedy Partner $450 Michael W. Fletcher Partner $325 Spencer Fisher Paralegal $125 Leslie Hurd Legal Asst/ $90 Paralegal Tonkon Torp's compensation and reimbursement of expenses will be paid by the Debtor as administrative expenses. Within the 12-month period preceding the Petition Date, Tonkon Torp received retainers on behalf of Debtor in the total amount of $110,000. Prior to the filing of the bankruptcy petition, Tonkon Torp applied a portion of the retainer balance for prepetition services and the Chapter 11 filing fee. The remaining balance is held as a retainer. Mr. Kennedy, a partner at Tonkon Torp, attests that his firm has no connections with the Debtor, its creditors, any party-in- interest, their attorneys and accountants or the United States Trustee. About Western Communications Western Communications, Inc., is a family-owned corporation founded by renowned editor Robert W. Chandler. Headquartered in Bend, Oregon, Western Communications is a small market newspaper, niche publishing, printing and digital media company with publications spread throughout Oregon (six publications) and California (two publications). The Company produces and publishes the Bend Bulletin, the Baker City Herald, the La Grande Observer, the Redmond Spokesman, the Brookings Curry Coastal Pilot, the Crescent City Daily Triplicate, and the Sonora Union Democrat. The Company also publishes the Central Oregon Nickel Ads in Bend, Oregon. Western Communications filed for Chapter 11 bankruptcy (Bankr. Ore. Case No. 11-37319) on Aug. 23, 2011. The Zinser Law Firm, P.C., and Davis Wright Tremaine LLP serve as the Debtor's special purpose counsel, while Grove, Mueller & Swank, P.C., serves as accountants. The Debtor scheduled $10 million to $50 million in assets and debts. The petition was signed by Gordon Black, president. WOLF MOUNTAIN: Needs Access to $500,000 DIP Financing ----------------------------------------------------- Wolf Mountain Resorts, LC, seeks authority from the United States Bankruptcy Court for the Central District of California to obtain postpetition financing on a superpriority administrative status. David S. Kupetz, Esq., at SulmeyerKupetz, in Los Angeles, California, asserts that throughout the pendency of its bankruptcy case, the Debtor needs to ensure it will have sufficient funds to pay the professional fees and costs associated with restructuring. He adds that the Debtor wishes to provide assurance to its employed professionals and experts that their fees and expenses will be paid. Because it does not currently have any cash, the Debtor requires debtor-in-possession financing to fund retainers and other pre- confirmation expenses, Mr. Kupetz contends. He notes that the Debtor's sole member, Canyon Mountain Partners, LLC, has agreed to advance to the Debtor the funding necessary to administer the case prior to confirmation of a Chapter 11 plan, and has advanced certain funds to the Debtor. The Parties' DIP Agreement provides that, at the Lender's discretion, the Lender may loan and the Debtor may borrow up to $500,000 to fund the Debtor's operational expenses. The proposed DIP Loan will be afforded "superpriority" administrative status, and bears a reasonable 2% interest rate. The Debtor will not be required to pay interests until the maturity date of the DIP Loan, which is the earlier of December 2012, the confirmation of a plan or the occurrence of an event of default. At its discretion, the Lender may convert the amounts outstanding under the DIP Loan into equity of a reorganized Debtor. These are the Events of Default under the DIP Agreement: -- The Debtor's failure to pay the principal of or interest on the amount owed by the Debtor to the Lender when due, or within 10 days thereafter; -- The appointment in the case of a trustee or any examiner having expanded powers; -- The Chapter 11 case is dismissed; and -- Any party proposes a plan of reorganization for the Debtor without the lender's prior consent, or any plan of reorganization that has not been approved by the Lender is confirmed by the Court. Objections The United State Trustee and creditor ASC Utah, LLC, filed separate objections to the DIP Motion. Even a cursory review of the terms of the proposed DIP Loan, reveals that it is, at best, a disguised capital contribution that implicates important plan issues and, accordingly, should be evaluated in that context, Gary E. Klausner, Esq., at Stutman, Treister & Glatt, P.C., in Los Angeles, California -- gklausner@stutman.com -- tells the Court of behalf of ASCU. The DIP Motion reveals for the first time that instead of funding the Debtor's "operations" as Canyon Mountain represented to the Court that it would do, it advanced $175,000 to various law firms and professionals that the Debtor retained without prior court approval, Mr. Klausner contends. He alleges that the DIP Motion attempts to retroactively convert those Canyon Mountain advances into to a DIP Loan with superpriority administrative expense priority. He argues that retroactive approval of postpetition financing is simply not authorized or justified under the circumstances. Mr. Klausner also alleges that the true nature and purpose of the DIP Loan is revealed in the Debtor's disclosure statement and Chapter 11 plan of reorganization, which provides that Canyon Mountain's DIP Loan will convert into the "new equity" of the Debtor in an unseemly attempt to lock up control of the Debtor in anticipation of a heated confirmation fight with ASCU. Hence, ASCU asks the Court to deny the DIP Motion. Peter C. Anderson, the United States Trustee for Region 16, contends that the proposed DIP Lender is not just an insider of the Debtor, but also its sole equity-holding member. He asserts that the Debtor has not sufficiently justified or evidenced its need to grant "superpriority" administrative expense status to proposed Canyon Mountain. He adds that the various "Events of Default" appear to be 'poison pills' designed to force all interested parties, including the U.S. Trustee, to allow the Debtor to remain in Chapter 11 for a lengthy period of time. About Wolf Mountain Resorts Wolf Mountain Resorts, L.C., based in Los Angeles, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11- 30162) on May 9, 2011. Judge Peter Carroll presides over the case. Mark S. Horoupian, Esq., at SulmeyerKupetz, serves as bankruptcy counsel. Wolf Mountain Resorts estimated that both its assets and debts measure between $100 million and $500 million. WOLF MOUNTAIN: To Decide on Osguthorpe Lease Until Plan Approval ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California extended to the date of the confirmation of a plan of reorganization the deadline to assume or reject a lease agreement dated August 14, 1996, between Wolf Mountain Resorts, LC, and D.A. Osguthorpe and D.A. Osguthorpe Family Partnership. The Debtor previously asserted that it needs additional time to fully vet the effect and repercussions of recent rulings in a lawsuit involving the Debtor and Osguthorpe prior to any final assumption of the Lease. Prior to the granting of the extension, ASC Utah, LLC, asked the Court to deny the motion because the Lease is not an unexpired lease of nonresidential property subject to assumption or rejection by Debtor under the Bankruptcy Code. ASCU alleged that the Debtor's purported need for additional time is spurious at best. About Wolf Mountain Resorts Wolf Mountain Resorts, L.C., based in Los Angeles, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11- 30162) on May 9, 2011. Judge Peter Carroll presides over the case. David S. Kupetz, Esq., and Mark S. Horoupian, Esq., at SulmeyerKupetz, serve as bankruptcy counsel. Wolf Mountain Resorts estimated that both its assets and debts measure between $100 million and $500 million. WOLF MOUNTAIN: Court Denies ASC Utah's Motion to Dismiss Case ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has denied without prejudice the motion by ASC Utah LLC to dismiss Wolf Mountain Resorts, L.C.'s Chapter 11 case. The Bankruptcy also denied without prejudice the oral motion by ASC Utah to appoint a Chapter 11 Trustee pursuant to 11 U.S.C. Section. The motion for relief from the automatic stay to exercise setoff rights under Bankruptcy Code Section 553 or to seek relief in the Utah State Courts to exercise set off rights was taken under submission and will be disposed of by further order of the Court. About Wolf Mountain Resorts Wolf Mountain Resorts, L.C., based in Los Angeles, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-30162) on May 9, 2011. Judge Peter Carroll presides over the case. Mark S. Horoupian, Esq., at SulmeyerKupetz, serves as bankruptcy counsel. Wolf Mountain Resorts estimated that both its assets and debts measure between $100 million and $500 million. WOLF MOUNTAIN: Wants Plan Filing Exclusivity Until Jan. 3 --------------------------------------------------------- Wolf Mountain Resorts, L.C., asks the U.S. Bankruptcy Court for the Central District of California to increase the period by which the Debtor has the exclusive right to file a plan, by 120 days, to and including Jan. 3, 2012, and the period by which the Debtor has the exclusive right to solicit acceptance of a filed plan, by 120 days, to and including March 4, 2012. The Debtor relates that allowing competing plans at this early juncture, primarily when the party likely to file such a plan has demonstrated no regard to any other party in interest in the case, would not be in the best interest of the estate. About Wolf Mountain Resorts Waolf Mountain Resorts, L.C., based in Los Angeles, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-30162) on May 9, 2011. Judge Peter Carroll presides over the case. Mark S. Horoupian, Esq., at SulmeyerKupetz, serves as bankruptcy counsel. Wolf Mountain Resorts estimated that both its assets and debts measure between $100 million and $500 million. XTL BIOPHARMACEUTICALS: Posts $280,000 Net Loss in 2nd Quarter -------------------------------------------------------------- In a SEC Form 6-K dated Aug. 30, 2011, XTL Biopharmaceuticals Ltd. attached an English translation (from Hebrew) of the Company's interim financial statements for the three months ended March 31, 2011, as submitted on the Tel Aviv Stock Exchange. The Company reported a net loss of $280,000 for the three months ended June 30, 2011, compared with a net loss of $316,000 for the same period last year. The Company reported a net loss of $582,000 for the six months ended June 30, 2011, compared with a net loss of $652,000 for the same period last year. The Company has no revenues from operations at this stage and funds its operations from its own capital and from external sources by way of issuing equity instruments. The Company's balance sheet at June 30, 2011, showed $4.7 million in total assets, $698,000 in total liabilities, and stockholders' equity of $4.0 million. As reported in the TCR on April 6, 2011, Kesselman & Kesselman, in Tel-Aviv, Israel, expressed substantial doubt about XTL Biopharmaceuticals' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that during the period ended on Dec. 31, 2010, the Company had a loss in the amount of $1.3 million and a negative cash flow from operating activities of $735,000. A copy of the Form 6-K is available at http://is.gd/70yxkP XTL Biopharmaceuticals Ltd. is engaged in the development of therapeutics, among others, for the treatment of unmet medical needs, improvement of existing medical treatment and business development in the medical realm. The Company was incorporated under the Israeli Companies Ordinance on March 9, 1993. The Company owns 100% of Xtepo Ltd. and owns 100% of a U.S. company, XTL Biopharmaceuticals Inc., which was incorporated in 1999 under the laws of the State of Delaware. The Company is in the planning and preparation stages for implementing Phase 2 clinical trial of rHuEPO drug designed to treat cancer patients with multiple myeloma. Further, the Company has certain milestone rights in the development of treatment for hepatitis C ("DOS") from Presidio Pharmaceuticals Inc. ("Presidio"), a U.S. biotechnology company. YESTERDAY'S VILLAGE: UB Properties Acquires Asset for $3.6 Million ------------------------------------------------------------------ Mai Hoang at Yakima Herald-Republic reports that UB Properties LLC, a subsidiary of Portland-based Umpqua Bank, purchased the underlying property of the train-car development at 1 W. Yakima Ave. along with several neighboring properties for $3.6 million. According to the report, Umpqua Bank was the biggest creditor when Yesterday's Village Inc., the owners of Track 29 development, filed for Chapter 11 bankruptcy. As a result, the purchase by UB Properties was outside of the bankruptcy reorganization process, said Matt Anderton, a Yakima attorney assigned to manage Track 29 as the court-appointed trustee. The report says Yesterday's Village is still on the hook for more than nearly $9.7 million that it owed to Umpqua Bank at the time it filed for bankruptcy. Yesterday's Village had more than $13.8 million in debt at the time it filed for bankruptcy. Meanwhile, UB Properties LLC has acquired the ground lease with Yesterday's Village, which is continuing to sublease the property to tenants under the management of Anderton, the trustee, the report notes. Based in Yakima, Washington, Yesterday's Village, Inc., filed for Chapter 11 Bankruptcy Protection (Bankr. E.D. Wash. Case No. 11- 01378) on March 22, 2011. Metiner G. Kimel, Esq., at Kimel Law Offices, represents the Debtor. The Debtor estimated assets of less than $50,000, and debts of between $10 million and $50 million. * Student Loan Defaults Rise to 8.8% in Fiscal 2009 --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Education Department reported that defaults on student loans rose to 8.8% in fiscal 2009 from 7% in fiscal 2008. The government's statistics tend to understate the default rate because it counts only those loans that were 270 days behind and first came due during the fiscal year. For loans made to finance an education in a for-profit institution, the default rate was higher still, at 15% for fiscal 2009. The year before, it was 11.6%. Student loans typically cannot be discharged by filing for bankruptcy, unless repaying the loan would prevent the bankrupt from having a "minimal standard of living." The default rate was the highest since 1997. The record was 22.4% default rate in 1990. Bankruptcy Filers Ylan Q. Mui, writing for The Washington Post, reports that college graduates are the fastest-growing group of consumers who have filed for bankruptcy protection in the past five years, according to a new study by a financial nonprofit, which underscores the broad reach of the Great Recession. The Post relates The survey by the Institute for Financial Literacy, slated for release Tuesday, found that the percentage of debtors with a bachelor's degree rose from 11.2% in 2006 to 13.6% in 2010. The group tracked similar but smaller increases in consumers with two-year associate and graduate degrees. Meanwhile, the percentage of debtors with a high school diploma or who did not finish college declined. The Post also notes that over the past five years, the number of consumers filing for bankruptcy between ages 18 and 34 has fallen 31. Meanwhile, the number of people 55 and older, who have less time to recover financially, has jumped 25%. The Post relates the group surveyed more than 50,000 consumers who participated in its credit counseling or financial education courses, a requirement for those seeking bankruptcy protection. They account for roughly 3% of bankruptcies filed in 2010. * Years of Borrowing Have Pennsylvania Capital Dodging Default -------------------------------------------------------------- Dow Jones' DBR Small Cap reports that like homeowners who used their houses as piggy banks by refinancing over and over before the real-estate market crashed, Harrisburg, Pa., now is desperate to avoid financial collapse. * Debevoise Welcomes Bankruptcy Pro Labovitz From Kirkland ---------------------------------------------------------- Debevoise & Plimpton LLP announced that M. Natasha Labovitz has joined the firm as a partner in its New York office and a member of the firm's Bankruptcy and Restructuring Group. Ms. Labovitz is a seasoned corporate restructuring practitioner and brings significant financial restructuring experience and legal skills to Debevoise, further strengthening the firm's highly ranked practice. She has particular expertise as debtor's counsel, having acted as lead debtor counsel in several of the largest chapter 11 cases filed in recent years, including Chemtura Corporation and TOUSA, Inc. Ms. Labovitz joins Debevoise from the New York office of Kirkland & Ellis LLP, where she was a partner in its Restructuring Group. She has extensive experience advising a range of clients, including private equity firms and portfolio companies, in complex corporate restructurings, representing debtors and creditors in and out of bankruptcy in cross-border insolvencies across multiple jurisdictions. Among other recognitions, in 2010 Ms. Labovitz was selected as one of Law360's "Rising Stars," a list of ten bankruptcy attorneys to watch under the age of 40. Michael W. Blair, Presiding Partner of Debevoise, said: "We are very pleased to welcome Natasha to Debevoise. She is an outstanding lawyer who brings a wealth of experience in all aspects of the restructuring process. I have no doubt that she will enhance our Bankruptcy and Restructuring Group, which is already recognized as one of the most sophisticated and creative teams in the business." Ms. Labovitz said, "Debevoise brings together all of the core elements of a successful financial restructuring practice: a solid understanding of the market, superb restructuring lawyers, excellent transactional and litigation practices, and most importantly, an exceptional culture. I am honored to be joining the firm's restructuring group, and to help the firm expand on this already-solid platform." Richard F. Hahn, Co-Chair of the firm's Bankruptcy and Restructuring Group, said: "Everyone on the Debevoise bankruptcy and restructuring team is thrilled to welcome Natasha on board. Not only does she have deep and broad experience leading high- profile, complex matters in and out of court and across borders, she is also a dynamic, energetic practitioner who knows how to work with her clients to find innovative solutions to their restructuring needs." Ms. Labovitz received her J.D., magna cum laude, (1996) from New York University of Law, and her B.A., magna cum laude, (1992) from Columbia College, Columbia University. The Debevoise Bankruptcy and Restructuring Group represents clients on all aspects of bankruptcy law, debtors, creditors, controlling shareholders and investors, in out-of-court restructurings, pre-packaged and pre-negotiated bankruptcies and Chapter 11 cases, frequently leading cross-border matters in multiple jurisdictions. The Group brings to bear the significant, diverse resources of the firm, including substantive knowledge in corporate finance, mergers and acquisitions, employee benefits, real estate, intellectual property, tax, capital markets and litigation, and handles restructurings in multiple jurisdictions, frequently confronting cross-border issues. Debevoise & Plimpton LLP is a leading international law firm, representing a wide range of clients in transactions and disputes around the world. Founded in 1931, the firm has offices in New York, Washington, D.C., London, Paris, Frankfurt, Moscow, Hong Kong and Shanghai. * Kenneth Freda Joins ESBA in New York as Managing Director ----------------------------------------------------------- Executive Sounding Board Associates Inc. (ESBA) on Sept. 13 announced that Kenneth M. Freda joined the firm as a Managing Director. Mr. Freda brings over 30 years of experience with bankruptcy consulting firms and federal bankruptcy organizations. He has a strong combination of technical bankruptcy experience and business development accomplishments. He is based in the firm's New York City office, where he will be responsible for practice development and for contributing to the management of turnarounds, workouts and bankruptcy engagements. Prior to joining ESBA, Mr. Freda was a bankruptcy administration services consulting professional for a settlement administration company, where he helped build its corporate restructuring business unit into a recognized market leader. He also contributed heavily to the firm's new business development effort by identifying and responding to the needs of its diverse market, which was comprised of counsel, advisors and other interested parties. Earlier in his career as a deputy clerk in the Bankruptcy Court for the Southern District of New York, Mr. Freda managed the clerk's office staff in the White Plains, New York divisional office. In addition, he supervised the large Chapter 11 cases that were filed with the Court. He was honored by the Clerk of Court and the Chief Judge for creating and pioneering a training program on electronic case filing. Mr. Freda also served as a bankruptcy analyst at the Office of the United States Trustee for the Southern District of New York, where he managed administration functions in bankruptcy cases; conducted meetings of creditors and formed creditors' committees in Chapter 11 cases; and supervised a panel of private Chapter 7 and Chapter 13 trustees. "We are pleased to have Ken Freda join our team," said Marty Katz, Founder and President of ESBA. "Ken has built a strong foundation in the fundamentals of the bankruptcy process and demonstrated his ability to leverage this base to continue to build our restructuring professional services practice. Ken and our firm share the view that Executive Sounding Board Associates Inc. will provide an excellent platform from which to apply his skills and enhance our firm's ability to continue to serve the marketplace." Mr. Freda earned a Bachelor's Degree from St. Francis College and a Certificate in Business Administration from St. John's University. He served as Education Director and Newsletter Editor for the American Bankruptcy Institute's Court Administration/Alternative Dispute Resolution Committee and has been an active member of the Turnaround Management Association. About ESBA ESBA focuses its services on organizations requiring assistance in Turnarounds, Workouts, Crisis Management, Bankruptcy Restructuring, Corporate Finance (M & A, Refinancing, Valuation), Government Contracting, Liquidations, Litigation Support and Forensic Accounting. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 14, 2011 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Tampa Convention Center, Tampa, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. __, 2011 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Dublin, Ireland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 25-27, 2011 TURNAROUND MANAGEMENT ASSOCIATION Hilton San Diego Bayfront, San Diego, CA Contact: http://www.turnaround.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ April 3-5, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Grand Hyatt Atlanta, Atlanta, Ga. Contact: http://www.turnaround.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ ********* 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 ***