/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/110928.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 28, 2011, Vol. 15, No. 269 Headlines 78 FIRST: Case Summary & 13 Largest Unsecured Creditors 785 PARTNERS: Court OKs Proskauer Rose as Counsel ADAM'S ROADHOUSE: Creditors Discover Theft Inside Restaurant AFFINIA GROUP: S&P Assigns 'B' Corporate Credit Rating ALEXANDER GALLO: Hires Carl Marks' Pfefferle as CRO ALEXANDER GALLO: U.S. Trustee Appoints 3-Member Creditors' Panel ALEXANDER GALLO: Unsecured Creditors Attack Sale, Loan ALROSE KING: Seeks Farrell Fritz as Bankruptcy Counsel ALT HOTEL: Plan Proposal Exclusivity Extended to Dec. 2 ALTER COMMS: Plans Rejected; Judge Gives 30 Days for Revisions AMBAC FINANCIAL: Amends Plan After Reaching Deal With Regulators AMERICAN EQUITY: S&P Affirms 'BB+' Rating; Outlook Now Stable ANDRONICO'S COMMUNITY: Renovo Buying 2 Grocery Chains for $17.2MM APEX AVIATION: Case Summary & 19 Largest Unsecured Creditors APPLEJACK ART: Amended Liquidation Plan Calls for HQ Sale ASAY HOLDINGS: Case Summary & 5 Largest Unsecured Creditors ASSOCIATED ESTATES: S&P Raises Corporate Credit Rating to 'BB+' BANKUNITED FINANCIAL: Settlement Deal With FDIC Consummated BANNING LEWIS: Asset Ventures Tosses Out Protest Over Sale BARNES BAY: Another Creditor Wants Chapter 11 Case Tossed BH MALL: Fails to Sell East Hills Mall at Auction BRANDYWINE OPERATING: Fitch Affirms 'BB+' Issuer Default Rating BRISTOW GROUP: S&P Keeps 'BB' Corporate Credit Rating BRUNO'S SUPERMARKETS: Preference Suit Timely Despite Unpaid Fees CATHOLIC CHURCH: Wilmington Proposes Exit Financing CATHOLIC CHURCH: Insurance Settlements Declared Non-Appealable CATHOLIC CHURCH: Court Sets $1-Mil. Bond for Settlement Trustee CENTURION PROPERTIES: Wants GECC Cash Collateral Until Dec. 31 CHARLESTON ASSOCIATES: Fry's Acquires Great Indoors Site CHC HELICOPTER: Moody's Lowers CFR to B2; Outlook Negative CHINA GREEN: Posts $43,100 Net Loss in Second Quarter CIMA LLC: Files Schedules of Assets and Liabilities CONGRESSIONAL HOTEL: Proposes to Sell Assets for $18 Million CONTINENTAL COMMON: Add'l Adequate Protection for PNC Approved CRYSTAL CATHEDRAL: Has Until Oct. 31 to Raise $50 Million DEL MONTE: Fitch Affirms 'B' Long-Term Issuer Default Rating DESMARAIS ENERGY: Files for Bankruptcy under BIA as Cash Seized DOLPHIN SUBSIDIARY: Fitch Assigns 'BB+ Rating on Senior Notes DREIER LLP: Judge OKs Trustee's $52M Deal With Hedge Fund DUNHAM'S BAY: Case Summary & 20 Largest Unsecured Creditors EDUCATE INC: Moody's Affirms 'B3' Corporate Family Rating ENERGY AND POWER: Seeks Chapter 11 Protection EVERGREEN SOLAR: Taps Hilco Industrial as Exclusive Sales Agent FAIRMOUNT MINERALS: S&P Puts 'BB-' CCR on Watch Positive FIRST CAROLINA: Stockholders Approve Liquidation Plan GALP WATERS: Does Not Consent to Debtors' Use of Cash Collateral GATEWAY METRO: Wants to Hire Skeehan & Company as Accountant GATEWAY METRO: Wants to Hire FTI Consulting as Financial Advisors GATEWAY METRO: Taps Colliers International as Leasing Broker GRAND LAKE: Case Summary & 20 Largest Unsecured Creditors GULF OFFSHORE: Moody's Withdraws 'Caa2' Corporate Family Rating H&S JOURNAL: Court Approves Stipulation for Use of Cash Collateral HOTEL AIRPORT: Court Approves Francisco Molina as Accountant HOTEL AIRPORT: Court Approves Edgard Munoz as Bankruptcy Counsel HOTEL AIRPORT: Lizarribar-Masini Okayed as P.R. Ports Counsel IMUA BLUEHENS: Access to Cash Collateral Expires Sept. 30 INNER CITY MEDIA: Wants to Employ GCG as Administrative Agent INNER CITY MEDIA: Taps Rothschild as Financial Advisor INNER CITY MEDIA: Taps Akin Gump as Bankruptcy Counsel INNER CITY MEDIA: Employs Garden City Group as Claims Agent J.C. EVANS: Can Obtain $2.5MM of Financing from Safeco J.C. EVANS: Hires Cox Smith as Bankruptcy Counsel JAMES DONNAN: Widow Challenges Proposal to Pay $5Mln. to Creditors JEFFERSON, AL: Lawmakers at Odds on Plan to Avoid Bankruptcy JEFFREY HOULIK: Santander Consumer USA Slapped With $25T Sanction KLOSTERMAN DEVELOPMENT: Case Summary & Creditors List LACK'S STORES: Hearing for Cash Collateral Access Set for Today LAZY FIVE: Case Summary & Largest Unsecured Creditor LEHMAN BROTHERS: Inks Plan Voting Deals With HK Units, Others LEHMAN BROTHERS: Drops Appeal of Ruling in Suit Over 2008 Sale LEHMAN BROTHERS: Wins Court Nod of $692MM MetLife Settlement LEHMAN BROTHERS: U.S. Bank, et al., Appeal on ADR Order Denied LEHMAN BROTHERS: Citi Says Swap Deal Allows $260MM Set-Off LION COPOLYMER: S&P Withdraws Prelim. 'B+' Corp. Credit Rating LOS ANGELES DODGERS: MLB Urges Delaware Judges to Sell Team LOS ANGELES DODGERS: MLB Wants to Eject Bankruptcy Counsel M WAIKIKI: Has Interim Nod to Borrow $1,000,000 from the Trust MACCO PROPERTIES: Grubb & Ellis OK'd as Listing Broker/Realtor MACCO PROPERTIES: Creditors Have Until Nov. 30 to File Claims MARITIME COMMUNICATIONS: Wants to Borrow $150,000 from DIP Lender MARITIME COMMUNICATIONS: Files Schedules of Assets and Debts MARQUETTE TRANSPORTATION: S&P Affirms 'B' Corp. Credit Rating MCG CAPITAL: Fitch Cuts Long-Term Issuer Default Rating to 'BB' MEDICAL SUITES: Voluntary Chapter 11 Case Summary MOUNTAIN CITY: Case Summary & 20 Largest Unsecured Creditors MRA PELICAN: Files Schedules of Assets and Liabilities MT. VERNON: Can Access Carrollton Bank's Cash Until Nov. 30 NAKNEK ELECTRIC: Plans to Sell Drilling Rig to Pay Creditors NATIONAL CENTURY: Court Denies Insurance for Execs. Atty. Fees NATIONAL CENTURY: MetLife Says Ashland Ruling Has No Impact NATIONAL CENTURY: Court Denies Insurance for Execs. Atty. Fees NATIONAL TAX: Recession Cues Chapter 11 Bankruptcy NATIONAL SLAVERY: Files for Chapter 11 Bankruptcy Protection NEW ENGLAND NATIONAL: In Camera Hearing in Town of East Lyme Suit NEW ERA HOSPITALITY: Seeks Dismissal of Chapter 11 Case NEW ERA HOSPITALITY: Court Approves Milledge as General Counsel NEWPAGE CORP: Section 341(a) Meeting Scheduled for Oct. 14 O&G LEASING: Wants Indenture Trustee Plan Denied for Lack of Info OTTILIO PROPERTIES: Valley Nat'l. Wants Case Dismissed, Converted OUTSOURCE HOLDINGS: Files Plan; All Claims Impaired Under Plan P&K EQUITY: Judge Kaplan Axes Lease at Gateway Centre PAT & OSCAR'S: Files for Chapter 7 Bankruptcy Protection PETROLEUM & FRANCHISE: Can Use Lender Parties' Cash Until Oct. 14 PICHI'S INC: Files Schedules of Assets and Liabilities PITT PENN: Thomas Alexander Seeks Withdrawal as Special Counsel POINT BLANK: Court OKs Forbearance Deal for Replacement DIP Credit PREMIER TRAILER: To Employ Lazard as Investment Banker R & D: Case Summary & 6 Largest Unsecured Creditors R&G FINANCIAL: Court Approves Disclosure Statement RENDA MARINE: U.S. Can Get $11 Million from Owner, Judge Rules REOSTAR ENERGY: Plan Solicitation Period Extended Until Nov. 30 REOSTAR ENERGY: Wants to Hire Updike Kelly as Attorney RESSLER HARDWOODS: Dist. Ct. Affirms Dismissal of Bankr. Counsel SCOTTSDALE CANAL: Voluntary Chapter 11 Case Summary SEA HORSE REALTY: Files for Chapter 11 Bankruptcy Protection SEDONA DEVELOPMENT: Seeks Rejection of Creditor Plan Disclosures SHENGDATECH INC: Hires Skadden as Special Counsel SILVESTRI INVESTMENTS: Voluntary Chapter 11 Case Summary SOLUTIA INC: Moody's Affirms 'Ba3' Corporate Family Rating SOLYNDRA LLC: Defaulted on $535MM Government Loan Pre-Bankruptcy SOLYNDRA LLC: Has Green Light to Pursue Asset Sale in October SOLYNDRA LLC: Resolves Creditor Objections to Auction Plan SOUTHWEST SEAFOOD: Chapter 11 Case Dismissed on Sept. 7 SPECTRAWATT INC: Court Approves King & Spalding as Bankr. Counsel SPRING POINTE: Hires Ray Quinney & Nebeker as Bankruptcy Counsel ST. JOSEPH HEALTH: Moody's Reviews 'B2' Rating for Downgrade SUMMER VIEW: Wants to Employ Cirrus Asset as Asset Manager SUMMIT BRANTLEY: To Liquidate Assets Under Chapter 7 TAYLOR BEAN: Trustee Sues Deloitte for $7.6BB Over Fraud TEXAS STAR: Files for Chapter 11 Bankruptcy Protection THAMES PRINTING: Enters Chapter 7 After Failing to Meet Deadline TRADE UNION: Court OKs Winthrop Couchot as Committee Counsel TRIBUNE CO: Committee Asks for Dismissal of Suits vs. D&Os TRIBUNE CO: Hearing on Changes to Confirmation Transcript Oct. 4 TRIBUNE CO: No Objections to New Mgt. Incentive Plan TRIKEENAN TILEWORKS: Swanzey Factory Will Close by End of October UNITED CONTINENTAL: UAL Asks Bankr. Court to Stop Pilots' Suit UNITED CONTINENTAL: United Pilots Want Review of 2006 Plan Order UNITED CONTINENTAL: Files 3rd Qtr. Investor Update UNITED CONTINENTAL: Expects 2012 Capacity to Remain Flat WASHINGTON MUTUAL: Class Nears $209MM Deal Over MBS Allegations WASHTRONICS OF AMERICA: Case Summary & Creditors List WITSOP DEVELOPMENT: Two Parcels Auctioned Off Last Week ZBB ENERGY: Significant Operating Losses Cue Going Concern Doubt * North Dallas Development Site in Receivership Sale * Upcoming Meetings, Conferences and Seminars ********* 78 FIRST: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------- Debtor: 78 First Street, LLC 6114 La Salle Avenue, #471 Oakland, CA 94611 Bankruptcy Case No.: 11-70224 Chapter 11 Petition Date: September 23, 2011 Court: U.S. Bankruptcy Court Northern District of California (Oakland) Debtor's Counsel: Iain A. Macdonald, Esq. MACDONALD AND ASSOCIATES 221 Sansome Street, Third Floor San Francisco, CA 94104 Tel: (415) 362-0449 E-mail: iain@macdonaldlawsf.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Graham Seel, SVP of CMR Capital, LLC, manager. Debtor affiliates that simultaneously sought Chapter 11 protection: Debtor Case No. ------ -------- 78 First Street, LLC 11-70224 88 First Street, LLC 11-70228 518 Mission, LLC 11-70229 First/Jessie, LLC 11-70231 JP Capital, LLC 11-70232 Peninsula Towers, LLC 11-70233 Sixty-Two First Street, LLC 11-70234 Debtor's List of Its 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The CAC Group, Inc. Lease Commission $43,342 255 California Street, #200 San Francisco, CA 94111 Bank of America, NA Bank Fees $4,760 P.O. Box 15710 Wilmington, DE 19886 The Garza Company Tenant Improvements $3,693 1842 Bandoni Avenue and Repairs San Lorenzo, CA 94580 Charles Dunn Real Estate Services Fees $3,063 Pacific Gass and Electric Co. Utilities $1,818 Recology Golden Gate Waste Removal $1,269 ABCO Mechanical HVAC Maintenance $763 Lewis & Taylor LLC Exterior Window $600 Cleaning Armada Security Patrol Service $498 Star Elevator Elevator Servicing $382 Warman Security Intercom $125 AT&T Telephone Services $122 CleanSource Janitorial Supplies $85 785 PARTNERS: Court OKs Proskauer Rose as Counsel ------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has authorized 785 Partners LLC to employ Proskauer Rose LLP as counsel nunc pro tunc to Aug. 10, 2011. The Debtor said Proskauer will act as its counsel for insolvency and related matters and render legal services relating to the day to-day administration of the Chapter 11 case. Proskauer's fees will be paid by the Debtor's affiliate, Time Square Development Group, Inc. As agreed by the parties, the firm will receive a $200,000 advance fee payment in connection with the representation. Proskauer's hourly fees are $500-$995 for partners; $400-$810 for senior counsel; $195-$700 for associates and other attorneys, and $125 to $295 for paraprofessionals. As an accommodation to the Debtor, the firm agreed that its fee requests will reflect a voluntary 10% reduction of its general prevailing rates. The primary Proskauer attorneys anticipated to work for the Debtor are Sheldon I. Hirshon, Craig A. Damast, Lawrence S. Elbaum and Richard J. Corbi. About 785 Partners LLC 785 Partners LLC owns a 42-story building on 785 Eighth Avenue, New York. The developer intended to sell 122 condominium units, but it failed to obtain the requisite condominium approvals from the New York State Attorney General. The Company obtained $84 million of secured financing in January 2007 from PB Capital Corporation, and TD Bank, N.A. First Manhattan later bought the secured claim and says the claim has risen to $101 million, which is higher than the market value of the property. 785 Partners LLC filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 11-13702) on Aug. 3, 2011. Andrew K. Glenn, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, serves as counsel to the Debtor. In its schedules, the Debtor disclosed $106,000,000 in assets and $95,467,612 in liabilities, all secured. ADAM'S ROADHOUSE: Creditors Discover Theft Inside Restaurant ------------------------------------------------------------ The Chicago Sun-Times' Buffalo Grove Countryside reports that a restaurant in Buffalo Grove, Illinois, that went into receivership at the start of the summer found itself with even less collateral to pay its debts when robbers stole electronics from the eatery. According to the report, the police indicate that the creditors of Adam's Roadhouse, 301 N. Milwaukee Ave., discovered Aug. 19 that thieves had entered the building sometime after Aug. 10 and taken six flatscreen televisions, a cappuccino maker, a computer, two refrigerators and furniture. Loss was estimated at $11,050. Adam's has been in receivership since May 10, 2011. "Payment of approximately $20,000 was due on Aug. 22," police said, the report notes. The police already has a suspect although a probe is still ongoing. AFFINIA GROUP: S&P Assigns 'B' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Ann Arbor, Mich.-based Affinia Group Intermediate Holdings Inc. (Affinia), the entity that files financial statements with the SEC and is the parent of Affinia Group Inc. (the borrower). The corporate credit rating was formerly assigned to Affinia Group Inc. The outlook is stable. "The ratings on Affinia reflect the company's highly leveraged financial risk profile and participation in the competitive auto aftermarket components industry," said Standard & Poor's credit analyst Nancy Messer, "which contributes to what we consider a weak business risk profile." These factors more than offset Affinia's fair geographic diversity, solid market positions, and profitability. Private-equity firm The Cypress Group LLC controls the company. Nearly all of Affinia's revenues (98%) come from the sale of replacement products and services in the light-vehicle and commercial-vehicle aftermarkets, so the company is not exposed to the volatile production schedules of the major automakers. Also, Affinia's main products are filters (38% of 2010 sales) and brake components (32%), which are typically not discretionary purchases, and sales are correlated to vehicle miles driven for the car parc. Chassis products (8%) and Affinia's South American distribution company (22%) provided the balance of 2010 sales. Affinia's revenues and earnings were fairly stable through the 2008-2009 economic downturn, relative to those of automaker suppliers and in line with our expectations for a supplier to the aftermarket. "Still," added Ms. Messer, "intense price competition is a key industry risk. Products are vulnerable to substitution by low-cost imports because, unlike some larger or critical new-vehicle components, companies can readily ship aftermarket parts around the world for distribution in other countries." Volatile raw material costs are another risk, although aftermarket suppliers have generally been able to pass on to customers most increases in key commodities or purchased parts. To address the threat of foreign competition and eliminate excess manufacturing capacity, Affinia in recent years closed numerous plants in North America and Europe while increasing production and outsourcing to lower labor-cost countries such as China, India, Mexico, and Ukraine. To address incremental raw material costs, Affinia has the ability to raise prices in most of its business segments. "Our ratings also reflect our assumption that Affinia's recent margin declines will not continue," said Ms. Messer, "although the company's ability to maintain pricing amid high competition remains a risk factor, in our view." ALEXANDER GALLO: Hires Carl Marks' Pfefferle as CRO --------------------------------------------------- Alexander Gallo Holdings LLC seeks permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Marc L. Pfefferle as Chief Restructuring Officer along with such personnel of Carl Marks Advisory Group LLC as are necessary to assist the CRO in the performance of his duties. CMAG will render services, including: a) reviewing and assessing Debtor's financial information, including without limitation its short and long-term projected flows; b) assisting in the identification of cost reduction and operation improvement opportunities; c) developing the restructuring plans or strategic alternatives for maximizing the enterprise value of the Debtor's business. To the Debtor's knowledge, information and belief, neither CMAG nor any profession employee or independent contractor of CMAG has any connection with or any interest adverse to the Debtors, their creditors, or any other party in interest, or their respective attorneys and accountants. The firm's rates are: Personnel Rates --------- ----- Marc L. Pfefferle $750 Woolard Harris $725 Anthony Accordino $525 CMAG will also receive a $200,000 retainer from Gallo upon the execution of the agreement applied against unpaid fees and expenses, if any. About Alexander Gallo Holdings Marietta, Georgia-based Alexander Gallo Holdings LLC -- http://www.alexandergalloholdings.com-- is the largest full service, IT-enabled court reporting and litigation support services company in the United States. AGH offers court reporting, litigation support, trial software and other similar services and has the only true national footprint in its market, with roughly 55 offices located throughout the United States, and a preferred provider network which serves as an extension of Alexander Gallo's geographic reach. Founded in 1999 by Alexander J. Gallo, a former court reporter, AGH has made 18 acquisitions since 2003. Mr. Gallo has remained as CEO. AGH, along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-14220) on Sept. 7, 2011. Alexander Gallo will sell the business via 11 U.S.C. Sec. 363 to Bayside Capital Inc., which had acquired $22 million in second- lien debt. The price wasn't disclosed. Alexander Gallo disclosed assets of $208 million and debt totaling $258 million as of June 30, 2011. Liabilities include $47 million on a first-lien revolving credit and term loan where Wells Fargo Bank NA is agent. In addition to the second-lien debt held by Bayside, there is $33 million in junior unsecured subordinated notes owing to Harvest Equity Partners LLC plus another $148 million in junior unsecured subordinated notes owing to insider Gallo Holdings LLC. Bayside is providing $20 million in financing for the Chapter 11 effort. The new loan will have a first priority lien on unencumbered assets and a lien behind the first-lien debt. Bankruptcy Judge Allan J. Gropper presides over the case. Thomas R. Califano, Esq., Jeremy R. Johnson, Esq., Esq., and Daniel G. Egan, Esq., at DLA Piper LLP (US), in New York, serve as the Debtors' general counsel. Squire, Sanders & Demsey (US) LLP serves as the Debtor's corporate counsel. The Debtors' financial advisor is Gordian Group, LLC. Kurtzman Carson Consultants LLC serves as the Debtor's claims agent. ALEXANDER GALLO: U.S. Trustee Appoints 3-Member Creditors' Panel ---------------------------------------------------------------- Tracy Hope Davis, the United States Trustee for Region 2, pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Alexander Gallo Holdings LLC. The Creditors Committee members are: 1. Aptara, Inc. 3110 Fairview Park Drive, Suite 900 Falls Church, VA 22042 Tel: (703) 891-4260 ATTN: Gearoid E. Moore, Esq. 2. Receivable Management Services 307 International Circle, Suite 270 Hunt Valley, MD 21030 Tel: (410) 773-4040 ATTN: Steven D. Sass, Esq. 3. Harvest Equity Partners as Agent for Winston Noteholders, LLC 10 South Liberty Street Middleburg, VA 20118-1960 Tel: (540) 687-5583 ATTN: A. Scott Andrews About Alexander Gallo Holdings Marietta, Georgia-based Alexander Gallo Holdings LLC -- http://www.alexandergalloholdings.com-- is the largest full service, IT-enabled court reporting and litigation support services company in the United States. AGH offers court reporting, litigation support, trial software and other similar services and has the only true national footprint in its market, with roughly 55 offices located throughout the United States, and a preferred provider network which serves as an extension of Alexander Gallo's geographic reach. Founded in 1999 by Alexander J. Gallo, a former court reporter, AGH has made 18 acquisitions since 2003. Mr. Gallo has remained as CEO. AGH, along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-14220) on Sept. 7, 2011. Alexander Gallo will sell the business via 11 U.S.C. Sec. 363 to Bayside Capital Inc., which had acquired $22 million in second- lien debt. The price wasn't disclosed. Alexander Gallo disclosed assets of $208 million and debt totaling $258 million as of June 30, 2011. Liabilities include $47 million on a first-lien revolving credit and term loan where Wells Fargo Bank NA is agent. In addition to the second-lien debt held by Bayside, there is $33 million in junior unsecured subordinated notes owing to Harvest Equity Partners LLC plus another $148 million in junior unsecured subordinated notes owing to insider Gallo Holdings LLC. Bayside is providing $20 million in financing for the Chapter 11 effort. The new loan will have a first priority lien on unencumbered assets and a lien behind the first-lien debt. Bankruptcy Judge Allan J. Gropper presides over the case. Thomas R. Califano, Esq., Jeremy R. Johnson, Esq., Esq., and Daniel G. Egan, Esq., at DLA Piper LLP (US), in New York, serve as the Debtors' general counsel. Squire, Sanders & Demsey (US) LLP serves as the Debtor's corporate counsel. The Debtors' financial advisor is Gordian Group, LLC. Marc L. Pfefferle, a partner at Carl Marks Advisory Group LLC, serves as the Debtors' chief restructuring advisor. Kurtzman Carson Consultants LLC serves as the Debtor's claims agent. ALEXANDER GALLO: Unsecured Creditors Attack Sale, Loan ------------------------------------------------------ Dow Jones' DBR Small Cap reports that unsecured creditors are throwing their weight against Alexander Gallo Holdings LLC's auction plans and bankruptcy financing deal, saying both proposals are designed to benefit the court-reporting firm's lenders at the expense of creditors. As reported in the TCR on Sept. 21, 2011, Alexander Gallo scheduled a Sept. 27 hearing to consider approving sale procedures culminating in a Nov. 7 auction.��If the bankruptcy judge goes along, competing bids would be due Nov. 4. A hearing for approval of the sale would take place on Nov. 9. An affiliate of Bayside Capital Inc. will start the auction and is under contract to buy the assets for $88 million, absent higher and better bids. To buy the business, Bayside will pay off first lien debt and forgive second-lien obligations and $20 million in financing for the Chapter 11 case.��Bayside will also pay the cost of curing contract defaults.��Before bankruptcy, Bayside acquired the $22 million in second-lien debt. ��About Alexander Gallo Holdings Marietta, Georgia-based Alexander Gallo Holdings LLC -- http://www.alexandergalloholdings.com�--is the largest full service, IT-enabled court reporting and litigation support services company in the United States.��AGH offers court reporting, litigation support, trial software and other similar services and has the only true national footprint in its market, with roughly 55 offices located throughout the United States, and a preferred provider network which serves as an extension of Alexander Gallo's geographic reach.��Founded in 1999 by Alexander J. Gallo, a former court reporter, AGH has made 18 acquisitions since 2003.��Mr. Gallo has remained as CEO. AGH, along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-14220) on Sept. 7, 2011. Alexander Gallo will sell the business via 11 U.S.C. Sec. 363 to Bayside Capital Inc., which had acquired $22 million in second- lien debt.��The price wasn't disclosed. Alexander Gallo disclosed assets of $208 million and debt totaling $258 million as of June 30, 2011.��Liabilities include $47 million on a first-lien revolving credit and term loan where Wells Fargo Bank NA is agent.��In addition to the second-lien debt held by Bayside, there is $33 million in junior unsecured subordinated notes owing to Harvest Equity Partners LLC plus another $148 million in junior unsecured subordinated notes owing to insider Gallo Holdings LLC. Bayside Capital will provide $20 million in financing for the Chapter 11 effort.��The new loan will have a first priority lien on unencumbered assets and a lien behind the first-lien debt. Bankruptcy Judge Allan J. Gropper presides over the case.��Thomas R. Califano, Esq., at Jeremy R. Johnson, Esq., at Daniel G. Egan, Esq., at DLA Piper LLP (US), serve as the Debtors' general counsel.��Squire, Sanders & Demsey (US) LLP serves as the Debtor's corporate counsel.��The Debtors' financial advisor is Gordian Group, LLC.��Marc L. Pfefferle, a partner at Carl Marks Advisory Group LLC, serves as the Debtors' chief restructuring advisor. Kurtzman Carson Consultants LLC serves as the Debtor's claims agent. ALROSE KING: Seeks Farrell Fritz as Bankruptcy Counsel ------------------------------------------------------ Alrose King David LLC asks the U.S. Bankruptcy Court for the Eastern District of New York for authority to employ Farrell Fritz P.C. as bankruptcy counsel. The Debtor asserted that it needs Farrell Fritz to perform these services: a. providing legal advice with respect to the Debtor's powers and duties as a debtor-in-possession in the continued operation of its business and management of its property; b. negotiating, drafting, and pursuing all documentation necessary in this case; c, preparing on behalf of the Debtor all applications, motions, answers, orders, reports, and other legal papers necessary to the administration of the Debtor's estate; d. appearing in court and protecting the interests of the Debtor before the Court; a. providing legal advice with respect to the Debtor's powers and duties as a debtor-in-possession in the continued operation of its business and management of its property; b. negotiating, drafting, and pursuing all documentation necessary in the case; c, preparing on behalf of the Debtor all applications, motions, answers, orders, reports, and other legal papers necessary to the administration of the Debtor's estate; d. appearing in court and protecting the interests of the Debtor before the Court; e. assisting with any disposition of the Debtor's assets, by sale or otherwise; f. attending all meetings and negotiating with representatives of creditors, the United States Trustee, and other parties- in-interest; g. providing legal advice regarding bankruptcy, corporate, real estate, transactional, tax, and other issues to the Debtor; and h. performing all other legal services. The professionals proposed to represent the Debtor and their current hourly rates are: Ted A. Berkowitz (Member) $650 Louis A. Scarcella (Member) $650 Patrick Collins (Member) $540 Robert C. Yan (Associate) $425 Darren A. Pascarella (Associate) $415 Veronique Urban (Associate) $375 Maria M. Siffert (Paralegal) $270 Other attorneys and paralegals will render services to the Debtor as needed. The current hourly rates for the services of other attorneys and paralegals are: Members $450 to $650 Of Counsel $375 to $750 Associates $305 to $420 Paralegals/Law Clerks S100 to $260 The Debtor will also reimburse Farrell Fritz its necessary out-of pocket expenses. Ted A. Berkowitz, Esq., a member of Farrell Fritz, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The Court will convene a hearing on Oct. 20, 2011 at 2:00 p.m. to consider the Application. Objections must be filed no later than Oct. 13, 2011 at 5:00 p.m. About Alrose King Alrose King David LLC is a special entity established by the Alrose Group to own the 143-room, beachfront hotel property called the Allegria Hotel & Spa in Long Beach, Long Island. Alrose King David filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 11-75361) in Brooklyn on July 28, 2011, estimating between $10 million and $50 million in both debts and assets. Judge Dorothy Eisenberg presides over the case. Patrick T. Collins, Esq., at Farrell Fritz, P.C., serves as bankruptcy counsel. The petition was signed by Allen Rosenberg, managing member. ALT HOTEL: Plan Proposal Exclusivity Extended to Dec. 2 ------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois has extended ALT Hotel, LLC's exclusive periods to file a plan and to solicit acceptances of a filed plan through and including Dec. 2, 2011, and Feb. 3, 2012, respectively. Neal L. Wolf, Esq., at Neal Wolf & Associates, LLC, in Chicago, Illinois, explained that in the nearly four months since the Petition Date, the Debtor and its professionals have concentrated on a broad spectrum of issues related to operations and performance of the Allerton Hotel, value of the Hotel, and claims of and against DiamondRock Allerton Owner, LLC .��They have "moved forward with great energy on multiple fronts," Mr. Wolf tells the Court. About ALT Hotel LLC ALT Hotel LLC's sole asset is the Allerton Hotel located in the "Magnificent Mile" area of Chicago. The Hotel is managed by Kokua Hospitality, LLC, pursuant to a Hotel Management Agreement, dated Nov. 9, 2006. Kokua is the exclusive manager and operator of the Hotel, and receives management fees for its services, with the amount of such fees directly linked to the annual performance of the Hotel. Hotel Allerton Mezz, LLC, is the sole member of ALT Hotel. ALT Hotel filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-19401) on May 5, 2011. Judge A. Benjamin Goldgar presides over the case. Neal L. Wolf, Esq., at Neal Wolf & Associates, LLC, in Chicago, Illinois, serves as bankruptcy counsel to the Debtor. The Debtor disclosed $2,549,379 in total scheduled assets and $69,808,995 in total liabilities. Affiliate PETRA Fund REIT Corp. sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-15500) on Oct. 20, 2010. ALTER COMMS: Plans Rejected; Judge Gives 30 Days for Revisions -------------------------------------------------------------- Arthur Hirsch at the Baltimore Sun reports that Judge James F. Schneider of the U.S. Bankruptcy Court in Baltimore rejected plans offered by Alter Communications Inc. and former printer, H.G. Roebuck & Son. Judge Schneider gave them 30 days to develop a plan to take the company out of bankruptcy -- or else a trustee would be appointed to run the business. According to the report, the plans differed in the terms offered to creditors. Judge Schneider said that while both proposals had their "merits and demerits," they were "calculated to raise objections on the part of the other party." Either course, he said, was likely to lead to "liquidation" of the company. He said both sides would have to give something up to reach agreement. He said that Roebuck was not going to get anything close to the nearly $1.77 million it claims it is owed, and Alter must cut the amount it proposed paying certain creditors. The report also says Judge Schneider said he would not approve any plan giving Roebuck a majority share of the company. About Alter Communications Based in Baltimore, Maryland, Alter Communications publishes the Baltimore Jewish Times. Other publications include the magazine Style, with 90,000 circulation, and Chesapeake Life, with a circulation of 57,000. Alter Communications filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 10-18241) on April 14, 2010, after losing a $362,000 judgment to the printer, H.G. Roebuck & Son Inc. Alan M. Grochal, Esq., and Maria Ellena Chavez-Ruark, Esq., at Tydings and Rosenberg, in Baltimore, serve as the Debtor's bankruptcy counsel. The Debtor estimated assets and debts between $1 million and $10 million in its Chapter 11 petition. In December 2010, the Bankruptcy Court approved Alter's Chapter 11 exit plan. Roebuck appealed, saying the plan wasn't filed in good faith and that it "discriminates unfairly." In June 2011, the U.S. District Judge Court in Maryland set aside the confirmation order. Because Roebuck said it would pay more for the new stock, the District Court reversed and sent the case back to the bankruptcy court with instructions to allow the filing of competing plans. AMBAC FINANCIAL: Amends Plan After Reaching Deal With Regulators ---------------------------------------------------------------- Jonathan Stempel, writing for Thomson Reuters News & Insight, reports that Ambac Financial Group Inc. has filed an amended bankruptcy plan after reaching a settlement with its Wisconsin regulator, which could avert a liquidation for what was once the second-largest U.S. bond insurer. According to the report, the amended reorganization plan, filed Wednesday night with the U.S. bankruptcy court in Manhattan, followed an agreement with Wisconsin's insurance commissioner to resolve tax and other disputes involving the Ambac Assurance Corp operating unit. The report says that under a restructuring approved last year by Wisconsin, many of Ambac Assurance's risky mortgage obligations were moved into a "segregated account." Ambac said the policies in this account had $40.5 billion of exposure as of June 30. Thomson Reuters notes Ambac previously said failure to win regulatory support from Wisconsin could force it to liquidate, which would render insurance guarantees worthless and cause creditors to recover less. In a statement, the Wisconsin regulator said its accord with Ambac "recognizes the advantages of reducing uncertainty and avoiding unnecessary litigation," and allows it to focus on rehabilitating the segregated account. The Reuters report relates that still unresolved is an Ambac dispute with the Internal Revenue Service over who gets net operating losses, estimated to total $6.8 billion as of June 30, to use for tax benefits. The report further says that, under Ambac's amended bankruptcy plan, holders of secured claims would be paid in full. Holders of general unsecured claims would recover 8.5 cents to 13.2 cents on the dollar, and holders of $1.25 billion of senior notes would get 11.4 cents to 17.6 cents on the dollar. These two groups of creditors would get stock and warrants in a reorganized Ambac. If the noteholders accept the plan, holders of $444.2 million of subordinated notes would get 1.5% of the stock, as well as warrants. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. AMERICAN EQUITY: S&P Affirms 'BB+' Rating; Outlook Now Stable ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on American Equity Investment Life Holding Co. (AEIL) and American Equity Investment Life Insurance Co. (AEL; collectively American Equity) to stable from positive. "At the same time, we affirmed our 'BB+' long-term counterparty credit rating on AEIL and our 'BBB+' long term counterparty credit and financial strength ratings on AEL," S&P stated. "The outlook revision reflects our belief that American Equity's financial profile is not likely to improve sufficiently during the next year to support higher ratings, as contemplated by the previous positive outlook," said Standard & Poor's credit analyst Robert A Hafner, FSA. The ratings reflect American Equity's strong competitive position and business profile, which are key rating strengths. The company is consistently among the top-ranked issuers of indexed annuities and maintains strong and diverse distribution relationships. In addition, favorable earnings support the company's strong growth and good financial profile, and capitalization is consistent with the ratings. "We consider American Equity's enterprise risk management to be adequate and supportive of the ratings," S&P said. A key element of the company's financial profile, capitalization, supports the current ratings and is quantitatively modestly redundant at the 'BBB' confidence level. "We view American Equity's operating performance -- another key component of its financial profile -- as favorable to the ratings because its consistency and steady growth provides the capital necessary to support new business and gradual improvements in the quality of capitalization. We primarily use an adjusted operating income metric that removes the timing differences that arise from GAAP accounting for the fair value of derivatives and embedded derivatives. Operating earnings in the first half of 2011 exceeded $91 million," S&P said. "Financial flexibility is a weakness to the ratings because higher levels of debt or hybrid equity financing will not benefit our opinion of capitalization because the double leverage thresholds are already exceeded. Fixed-charge coverage levels at AIEL currently support the ratings and minimally support higher ratings. The coverage metrics could limit the ratings if leverage increases or financing costs rise," according to S&P. "The stable outlook reflects our belief that American Equity's financial profile will continue to improve gradually, but is unlikely to support higher ratings within the next year as was contemplated by the previous positive outlook," S&P said. "Nevertheless, we could raise the ratings by one notch if American Equity's financial profile improves sufficiently and sustainably to support higher ratings and the investment risk profile continues to improve without any material risk concentrations. In addition we would expect capitalization to be redundant at the 'A' confidence level and maintenance of the company's favorable operating performance and strong competitive advantages. Alternatively, we could lower the ratings if any of these metrics deteriorates significantly or if its business profile and competitive advantages erode meaningfully," S&P said. "We expect American Equity to continue to drive strong top-line growth, generate good earnings that adequately support its fixed charge coverage requirements, and maintain financial leverage at or below current levels. We expect callable bonds to remain at or below current levels. Speculative-grade investment exposures will remain less than 8% of invested assets. New sales will likely approach $5 billion during 2011. Full-year 2011 pretax operating income will likely exceed $160 million, and fixed-charge coverage will remain more than 3x. We expect interest-rate risk exposure to continue to improve with the expansion of asset classes over time and the inclusion of less negatively convex assets," S&P added. ANDRONICO'S COMMUNITY: Renovo Buying 2 Grocery Chains for $17.2MM ----------------------------------------------------------------- Betsy Vincent at the Daily Californian, citing reports from San Jose Mercury News, says that Renovo Capital is offering to buy Andronico's Community Markets and A.G. Ferrari Foods, two grocery chains with locations in Berkeley, for $16 million and $1.2 million, respectively. According to the report, Renovo Capital was formed in 2008 to invest in smaller, mid-market companies facing liquidity shortfalls and profitability challenges, according to its Web site. It bought Andronico's debt of about $29 million from its previous lenders, and has since been lending the company more money to help navigate and stabilize it, according to CEO Bill Andronico. According to an Aug. 22 press release by Andronico's spokesperson Adam Alberti, the grocery chain has been in negotiations to sell the company to the investor group since it went bankrupt. San Jose Mercury News reported that Renovo received court approval to buy A.G. Ferrari Sept. 19, 2011, and an auction for Andronico's is scheduled for Oct. 13, 2011. A.G. Ferrari's sale is expected to close soon, and according to Scott Lavie, a principal executive with Renovo. About Andronico's 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. Lawyers at Murray & Murray represent the Debtor. Bailey, Elizondo & Brinkman LLC serves as its financial and restructuring advisor. The Debtor scheduled $18,520,090 in assets and $67,094,619 in liabilities. About A.G. Ferrari Foods A.G. Ferrari Foods filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 11-43327) on March 28, 2011. Eric A. Nyberg, Esq., at Kornfield, Nyberg, Bendes and Kuhner, in Oakland, California, represents the Debtor. The Debtor estimated assets and debts of $1 million to $10 million as of the Chapter 11 filing. APEX AVIATION: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Apex Aviation Corporation aka Apex Apex Aviation 1448-1450 Sally Ride Drive Concord, CA 94520 Bankruptcy Case No.: 11-70113 Chapter 11 Petition Date: September 21, 2011 Court: U.S. Bankruptcy Court Northern District of California (Oakland) Judge: Roger L. Efremsky Debtor's Counsel: Donald W. Lamson, Esq. LAW OFFICEC OF DONALD W. LAMSON 315 S. Coast Highway 101, Suite U, #36 Encinitas, CA 92101 Tel: (760) 803-5493 E-mail: don_lamson@hotmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company�s list of its 19 largest unsecured creditors is available for free at: http://bankrupt.com/misc/canb11-70113.pdf The petition was signed by James E. Markel, president. APPLEJACK ART: Amended Liquidation Plan Calls for HQ Sale --------------------------------------------------------- Patrick McArdle at Rutland Herald reports that Applejack Art Partners filed an amended liquidation plan with the Vermont Bankruptcy Court on Sept. 13, 2011. The company intends to sell its Manchester headquarters for $3 million. The plan calls for Wachovia Bank, the primary creditor in the bankruptcy proceedings, to be paid with the proceeds of the sale. The plan notes that Applejack owes Wachovia almost $3 million. The plan says there will be no money to repay a Vermont Economic Development Authority loan used to buy the building. According to the report, last month, the owner of WCW Inc., a company that manufactures mattresses, said it would be buying the building Applejack bought in 2009 and moving its operations from Hoosick Falls, N.Y., and Bennington to Manchester. WCW was moving, in part, with the assistance of about $500,000 in financing from the Vermont Employment Growth Incentive program. "Wachovia will be paid in full at closing with any remaining net proceeds being paid to VEDA. The debtor anticipates that there will be no funds available for VEDA," says Mr. McArdle, citing the plan. The report relates that Steven Greenfield, chief operating officer for VEDA, said on that the agency was not objecting to the sale of the building. "We're aware of the proposal (by WCW) and we think it's a good project for the area and for Vermont," Mr. Greenfield said. The report notes Mr. Greenfield said the debt to VEDA will still exist until the bankruptcy court makes a ruling on the proposed liquidation plan, even if the building is sold. According to the report, the proposed liquidation plan says that WCW has expressed an interest in continuing to lease space to other companies that operate out of the Manchester building. It does not address from where Applejack Art Partners would operate. In April 2009, VEDA announced it had approved $1.3 million to help Applejack buy what had been known locally as the Moore-Wallace building. Applejack had been leasing the building before the sale. About Applejack Art Partners Applejack Art Partners, Inc., manufactures fine art prints and sells sports memorabilia. It acquired Bruce McGaw Graphics in August 2009, gaining the exclusive rights to images from the Walt Disney Co., the Museum of Modern Art and Andy Warhol. Applejack Art Partners sought Chapter 11 protection (Bankr. D. Vermont Case No. 10-10911) on July 6, 2010. Applejack is represented by the Bethel law firm of Obuchowski and Emens-Butler. The Debtor estimated assets of $1 million to $10 million and debts under $50 million as of the Chapter 11 filing. Berkshire Bank holds a secured note dated March 2007, totaling about $628,124, and a second secured loan at $102,521. ASAY HOLDINGS: Case Summary & 5 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Asay Holdings, LLC dba Saratoga Downtowner 413 Broadway Saratoga Springs, NY 12866 Tel: (518) 584-6160 Bankruptcy Case No.: 11-12975 Chapter 11 Petition Date: September 23, 2011 Court: U.S. Bankruptcy Court Northern District of New York (Albany) Judge: Robert E. Littlefield, Jr. Debtor's Counsel: Francis J. Brennan, Esq. NOLAN & HELLER, LLP 39 North Pearl Street Albany, NY 12207 Tel: (518) 449-3300 E-mail: fbrennan@nolanandheller.com Scheduled Assets: $3,026,169 Scheduled Debts: $2,737,550 The Company�s list of its five largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nynb11-12975.pdf The petition was signed by William Asay, managing member. ASSOCIATED ESTATES: S&P Raises Corporate Credit Rating to 'BB+' --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Associated Estates Realty Corp. (Associated) to 'BB+' from 'BB' on bolstered debt protection measures and improved portfolio quality. "At the same time, we revised our outlook to stable from positive," S&P said. "Parallel with the upgrade, we revised our assessment of Associated's financial risk profile to intermediate from significant on recently improved debt protection measures. Although we note the company's high floating-rate debt exposure, we expect that current fundamentals will support cash flow growth, which should help mitigate any potential near-term modest rise in interest rates," said credit analyst Eugene Nusinzon. "Associated's business risk profile is fair, in our view, given the company's comparatively smaller and more concentrated portfolio relative to rated peers." "The stable outlook reflects our expectation that favorable operating conditions in the near to intermediate term will continue to support recently improved debt protection measures at or above current levels. We would consider lowering the rating if FCC dips below 1.9x (perhaps due to an increase in debt financed development or acquisition activity) or if FFO fails to cover the dividend. We view an upgrade as less likely in the near term. Longer-term upgrade potential would be contingent upon the profitable execution of a more clearly defined growth strategy -- particularly regarding development appetite and geographic footprint. In addition, we would look for improvement in the financial risk profile, including reduced floating-rate debt exposure and further strengthening of debt protection measures relative to peers (to offset risk related to a smaller portfolio)," S&P related. BANKUNITED FINANCIAL: Settlement Deal With FDIC Consummated ----------------------------------------------------------- BankruptcyData.com reports that BankUnited Financial filed with the U.S. Bankruptcy Court a notice of consummation of a settlement agreement with the Federal Deposit Insurance Corporation, as receiver (FDIC-R). The Court approved the terms of the settlement on July 8, 2011; and the settlement resolves the FDIC-R's asserted $1.467 billion capital maintenance claim against the Debtors as well as a long-pending dispute over tax returns. About BankUnited Financial BankUnited Financial Corp. (OTC Ticker Symbol: BKUNQ) -- http://www.bankunited.com/-- was the holding company for BankUnited FSB, the largest banking institution headquartered in Coral Gables, Florida. On May 21, 2009, BankUnited FSB was closed by regulators and the Federal Deposit Insurance Corporation facilitated a sale of the bank to a management team headed by John Kanas, a veteran of the banking industry and former head of North Fork Bank, and a group of investors led by W.L. Ross & Co. BankUnited, FSB, had assets of $12.8 billion and deposits of $8.6 billion as of May 2, 2009. The Company and its affiliates filed for Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 09-19940) on May 22, 2009. Stephen P. Drobny, Esq., and Peter Levitt, Esq., at Shutts & Bowen LLP; Mark D. Bloom, Esq., and Scott M. Grossman, Esq., at Greenberg Traurig, LLP; and Michael C. Sontag, at Camner, Lipsitz, P.A., represent the Debtors as counsel. Corali Lopez-Castro, Esq., David Samole, Esq., at Kozyak Tropin & Throckmorton, P.A.; and Todd C. Meyers, Esq., at Kilpatrick Stockton LLP, serve as counsel to the official committee of unsecured creditors. In its bankruptcy petition, BankUnited Financial Corp. disclosed $37,729,520 in assets against $559,740,185 in debts. Aside from those assets, BankUnited said that a "valuable" asset is its $3.6 billion net operating loss carryforward. Wilmington Trust Co., U.S. Bank, N.A., and the Bank of New York were listed among the company's largest unsecured creditors in their roles as trustees for security issues. BankUnited estimated the Bank of New York claim tied to convertible securities at $184 million. U.S. Bank and Wilmington Trust are owed $120 million and $118.171 million on account of senior notes. BANNING LEWIS: Asset Ventures Tosses Out Protest Over Sale ---------------------------------------------------------- Rich Laden at the Gazette reports that real estate development company Asset Ventures Fund I of Austin, Texas, withdrew motions that it had filed in the U.S. Bankruptcy Court in Delaware, which sought to block the sale of the property of Banning Lewis Ranch to oil-and-gas exploration firm Ultra Resources of Houston. According to the report, Ross Allen, an Asset Ventures spokesman, declined to comment on the reason for the company's withdrawal, except to say there has been no settlement reached between Asset and Ultra. The ranch was auctioned in June. Ultra Resources was the winning bidder for 18,000 acres and agreed to pay $26.25 million for the land. Mr. Laden says Ultra said it planned to drill for oil and gas, adding it had no intention of developing the property with homes and commercial uses that long have been envisioned on the ranch by developers and city officials. Since then, Ultra and the city of Colorado Springs have fought in court; Ultra wants to jettison land-use controls that were put in place by the city years ago, and the city is fighting to keep them. On Sept. 15, a judge approved the sale of the 18,000 acres to Ultra, but the company's purchase price was reduced to $20 million, says Mr. Laden citing papers filed with the court. Mr. Laden notes Asset Ventures, which lost out on its bid to buy the 18,000 acres, objected to Ultra's purchase. Among its arguments, Asset Ventures contended that the revised purchase price amounted to "a substantial and significant change in terms" and that other parties should have an opportunity to challenge it. Asset asked the judge to order a new auction. Les Gruen, who heads the Urban Strategies land planning firm in the Springs and who worked in the 1980s for one of the ranch's previous owners, said he speculated that Ultra and Asset have negotiated a settlement or are working toward a joint venture. Or, Mr. Gruen said, it is possible Asset Ventures determined that its original objection wouldn't stand up in court. About Banning Lewis Banning Lewis Ranch Co. is the owner of the undeveloped portion of a 21,000-acre ranch in Colorado Springs, Colo. Banning Lewis Ranch is a master-planned community in Colorado Springs, Colorado. The first section built, the 350-acre Northtree Village, opened in September 2007 and will have 1,000 homes priced from the high $100,000s to the mid-$300,000s. Banning Lewis Ranch filed for Chapter 11 bankruptcy protection from creditors (Bankr. D. Del. Case No. 10-13445) on Oct. 28, 2010. It estimated assets of $50 million to $100 million and debts of $100 million to $500 million in its Chapter 11 petition. An affiliate, Banning Lewis Ranch Development I & II, LLC, also filed for Chapter 11 (Bankr. D. Del. Case No. 10-13446). Kevin Scott Mann, Esq., at Cross & Simon, LLC, serves as counsel to the Debtors. Edward A. Phillips of Eisner Amper LLP has been retained as the Company's chief restructuring officer. The Devco assets, or the northern portion, drew at a bankruptcy auction a high bid of $24.5 million from KeyBank NA as agent for lenders who will pay by swapping secured debt for ownership. The southern portion of the project, brought in a high bid of $26.25 million from Ultra Resources Inc. BARNES BAY: Another Creditor Wants Chapter 11 Case Tossed --------------------------------------------------------- Liz Hoffman at Bankruptcy Law360 reports that a Connecticut man who put $333,000 toward a Caribbean villa joined other creditors of Barnes Bay Development Ltd. on Monday in asking a Delaware bankruptcy judge to dismiss the Chapter 11 case so they could pursue their claims against the luxury beachfront developer. Law360 says Jeffrey Cook's motion piggybacks onto an identical request lodged last week by two creditors, WO Viceroy I Ltd. and Jonathan Simon. The activity comes after U.S. Bankruptcy Judge Peter J. Walsh rejected Barnes Bay's reorganization plan, sponsored by secured lender Starwood Capital Group. About Barnes Bay Beverly Hills, California-based Barnes Bay Development Ltd., owns the Viceroy Anguilla Resort & Residences on the British West Indies island of Anguilla. Barnes Bay and two affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-10792) on March 17, 2011, to facilitate the sale of the resort. Barnes Bay disclosed $3,331,282 in assets and $481,840,435 in liabilities as of the Chapter 11 filing. Akin Gump Straus Hauer & Feld LLP is the Debtors' bankruptcy counsel, and Keithley Lake & Associates is the Debtors' special Anguillan counsel. Kurtzman Carson Consultants LLC is the Debtors' claims, noticing, solicitation and balloting agent. The U.S. Trustee appointed five members to the official committee of unsecured creditors in the Debtors' cases. Brown Rudnick LLP serves as the Committee's co-counsel, and Womble Carlyle Sandridge & Rice, PLLC, as its Delaware co-counsel. C.R. Hodge & Associates is the Committee's foreign counsel. FTI Consulting, Inc., serves as the Committee's financial advisors. BH MALL: Fails to Sell East Hills Mall at Auction ------------------------------------------------- Courtenay Edelhart at Bakersfield.com reports that an attempt to auction off East Hills Mall failed when no bids were offered at a sale related to owner BH Mall LLC's Chapter 11 bankruptcy filing. The report says the opening bids were set at $4.1 million, with increments of $50,000 for subsequent bids, but nobody made any offers. According to the report, a man representing an investment group called California Green Regional Center, based in Pasadena, addressed the U.S. Bankruptcy Court for the Central District of California, Los Angeles, to say the group was interested in the property but was unable to offer a formal bid ahead of the formal auction deadline. The report relates that vice-president Thomas Yan said he had been negotiating with secured creditors, but had been unable to come to terms. He also said he needed more time to work through the tedious logistics of raising money from investors based in China. Judge Thomas Donovan said he was not interested in giving Yan or anyone else more time and dismissed the case. "I'm sorry that it comes to this," Judge Donovan said, but noted that in 22 months there has never been a formal offer on the table, and there was nothing further to be done. The report notes dismissing the bankruptcy case means BH Mall can't refile for either Chapter 11 reorganization or Chapter 7 liquidation, and creditors cannot force an involuntary filing. BH Mall filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 09-42300) in Los Angeles, California, on Nov. 17, 2009, estimating debts between $1 million and $10 million, and assets between $10 million and $50 million. Stephen Biegenzahn, Esq., represents the Debtor. BRANDYWINE OPERATING: Fitch Affirms 'BB+' Issuer Default Rating --------------------------------------------------------------- Fitch Ratings affirms the credit ratings of Brandywine Realty Trust (NYSE: BDN) and its subsidiary, Brandywine Operating Partnership, L.P. as follows: Brandywine Realty Trust -- Issuer Default Rating (IDR) at 'BB+'; -- Preferred stock at 'BB-'. Brandywine Operating Partnership, L.P. -- IDR at 'BB+'; -- Unsecured revolving credit facility at 'BB+'; -- Senior unsecured notes at 'BB+.' The Rating Outlook is Stable. The affirmation of the IDR at 'BB+' reflects the company's credit strengths, including its manageable debt maturity and lease expiration schedules, granular tenant base, and access to the capital markets. Offsetting these strengths are operating fundamentals in Brandywine's markets, which remain weak and will likely be soft in the near to medium term. However, the company's leverage and coverage metrics are expected to remain appropriate for the rating over the next 12-24 months. The Stable Rating Outlook considers these expected soft property-level fundamentals, offset by Brandywine's solid liquidity and unencumbered asset coverage of unsecured debt. The economic recovery remains fragile, with the high unemployment rate continuing to adversely impact business prospects of many of Brandywine's current or potential tenants. Brandywine's portfolio is focused primarily in the Mid-Atlantic region, with the top five submarkets represented by Philadelphia central business district (CBD, 22.3% of NOI for the six-months ended June 30, 2011), Dulles Toll Road Corridor (15%), Radnor, PA (9.8%), King of Prussia/Berwyn/N202 Corridor (7.3%), and Southwest Austin (5.2%). The company's geographic focus, with exposure to some weaker submarkets with low barriers to entry, has provided limited growth in recent quarters and relatively weak tenant demand has resulted in declining occupancy. As a result of lower occupancies and driven by weak tenant demand, Brandywine reported a 3.7% decline in same-store cash NOI in 2010, a 6.6% same-store cash NOI decline in the first quarter of 2011, and a 5.1% same-store cash NOI decline in the second quarter of 2011. The company benefits from a diverse tenant base, with the top 10 tenants representing 31.4% of total base rent at June 30, 2011 and no tenant except for the U.S. Government Services Administration (GSA) comprises more than 3% of total base rent. In addition, the company has a fairly even distribution of lease expirations and an average of 9% of annual base rent expires in each of the next 10 years. With the delivery of the Post Office Square development to the IRS in August 2010, Brandywine's largest submarket became the Philadelphia CBD and the largest tenant became the U.S. Government. Fitch views the company's presence in the Philadelphia region as a credit positive, as Brandywine is a well established operator in this market. Since 2006, Brandywine has underperformed a selected group of office REIT peers by approximately 250 basis points (bps) in both same-property NOI growth and occupancy. Brandywine has also underperformed its markets on a NOI and occupancy basis, as followed by Property & Portfolio Research (PPR), by almost 100 bps since 2006. Occupancy and rent level deterioration since early 2008 have negatively affected fixed charge coverage levels. Fitch defines fixed charged coverage as recurring operating EBITDA less recurring capital expenditures less straight line rent adjustments, divided by interest expense, capitalized interest, and preferred dividends. Fixed-charge coverage levels began to weaken in recent quarters, falling to 1.6 times (x) for the 12 months ended June 30, 2011 from 1.7x for full year 2010. While recurring operating EBITDA has improved in 2011, recurring capital expenditures have increased significantly to $71 million for the 12 months ended June 30, 2011 from $50.5 million for full year 2010. Fitch expects the company's fixed charge coverage ratio will fall below 1.5x for the year ending 2011, but projects it will rise above 1.5x during 2012 as recurring operating EBITDA improves and capital expenditures moderate. Leverage (net debt to recurring operating EBITDA) was 7.5x as of June 30, 2011, compared with 7.6x and 7.3x as of Dec. 31, 2010 and 2009, respectively. Leverage remains appropriate for the 'BB+' rating and is expected to remain so during the forecast period. While Fitch expects leverage to increase for full year 2011, improvements in EBITDA should cause leverage to fall back into the low to mid-7x range. This range is appropriate for the 'BB+' rating. In addition, the company has a well laddered debt maturity schedule with no major unsecured debt maturities until 2014, with the exception of its line of credit in 2012. The Stable Outlook reflects Fitch's view that Brandywine maintains capital markets access, adequate liquidity and adequate coverage of unsecured debt by unencumbered assets. The company issued senior unsecured bonds in March 2011 and is in the market to refinance its unsecured line of credit. In addition, the company's liquidity coverage ratio is adequate. Sources of liquidity (unrestricted cash, availability from the company's unsecured revolving credit facility reduced by one third as it matures in 2012, projected retained cash flows from operating activities after dividends and distributions) divided by uses of liquidity (pro rata debt maturities and projected recurring capital expenditures) result in a liquidity coverage ratio of 0.8x for July 1, 2011 through Dec. 31, 2013. If Brandywine refinanced its line of credit at the current $600 million commitment size, the company's liquidity coverage would be 1.1x. Finally, the company has improved its coverage of unsecured debt by unencumbered assets. Unencumbered assets (calculated as Fitch estimated unencumbered NOI divided by a stressed capitalization rate of 9%) covered unsecured debt by 1.6x as of June 30, 2011, which is adequate for a 'BB+' rating. The covenants in the company's credit agreements do not limit financial flexibility. The two-notch differential between Brandywine's IDR and preferred stock rating is consistent with Fitch's criteria for corporate entities with an IDR of 'BB+'. Based on Fitch Research on 'Rating Hybrid Securities,' dated July 28, 2011, available on Fitch's Web site at www.fitchratings.com, these preferred securities are deeply subordinated and have loss absorption elements that would likely result in poor recoveries in the event of a corporate default. Fitch does not anticipate positive rating momentum over the near- to medium-term. However, the following factors may have a positive impact on Brandywine's ratings and/or Outlook: -- Positive operating trends. -- Continued demonstration of access to multiple sources of capital. -- Net debt to recurring operating EBITDA declining below 6.5x (for the 12 months ended June 30, 2011, leverage was 7.5x). -- Maintaining fixed-charge coverage above 2.0x (for the 12 months ended June 30, 2011, coverage was 1.6x). The following factors may result in negative momentum on the ratings and/or Rating Outlook on Brandywine's ratings and/or Outlook: -- Maintaining fixed-charge coverage below 1.5x. -- A sustained decline in unencumbered asset coverage below 1.5x (with asset value defined as annualized unencumbered property net operating income divided by a 9% capitalization rate). -- Leverage EBITDA increasing above 8.0x BRISTOW GROUP: S&P Keeps 'BB' Corporate Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BBB-' senior secured debt rating (two notches higher than the corporate credit rating) to Houston-based Bristow Group Inc.'s (Bristow's) $200 million term loan and a $175 million revolving credit facility maturing in 2015. "At the same time, we assigned a '1' recovery rating to this debt, indicating our expectation of very high recovery (90% to 100%) in the event of a payment default. As of June 30, 2011, Bristow had approximately $730 million of funded debt outstanding," S&P related. "The rating on Bristow's senior unsecured debt and our corporate credit rating for the company remain unchanged at 'BB'. The recovery rating on Bristow's senior unsecured debt is '4', indicating our expectation for average (30% to 50%) recovery in the event of a payment default," S&P stated. The corporate credit rating on Houston-based helicopter services provider Bristow Group Inc. reflects its participation in the highly cyclical and volatile oil and gas industry, exposure to weather and seasonal fluctuations that might limit flight hours, aggressive financial policy, the capital spending needs inherent in the aviation industry, and limited free cash flow. Ratings also reflect that Bristow's earnings and funds from operations tend to be relatively stable due to contract structure, geographic diversity, and its mostly production-oriented work for exploration and production (E&P) companies. "We characterize Bristow's business risk profile as fair and its financial profile as aggressive. For the complete credit rating rationale, see our full analysis on Bristow published July 20, 2011," S&P noted. Ratings List Bristow Group Inc. Corporate credit rating BB/Stable/-- Senior unsecured debt BB Recovery rating 4 New Rating Senior secured debt rating $200 mil term loan due 2015 BBB- Recovery rating 1 $175 mil rev credit facility due 2015 BBB- Recovery rating 1 BRUNO'S SUPERMARKETS: Preference Suit Timely Despite Unpaid Fees ---------------------------------------------------------------- Pursuant to section 546(a) of the Bankruptcy Code, 11 U.S.C. Sec. 546(a), the two-year statute of limitations deadline for filing preference action complaints in the bankruptcy case of Bruno's Supermarkets, LLC, was Feb. 5, 2011. William S. Kaye, the Liquidating Trustee, timely filed about 123 complaints. He did not, however, pay any of the fees required for filing those complaints until March 24, 2011, a date after the statute would have run. The issue before the Bankruptcy Court is whether the complaints "filed" for statute of limitations purposes even though the required filing fees were not paid until after the date on which the statute would have run. In one of the lawsuits, William S. Kaye, Liquidating Trustee, v. Golden Flake Snack Foods, Inc., Adv. Proc. No. 11-00018 (Bankr. N.D. Ala.), the defendant seeks dismissal. Golden Flake contends that the complaint was not "filed" for statute of limitations purposes because the required filing fee was not paid at the time the complaint was filed, and therefore, the complaint should be dismissed. The Liquidating Trustee argues that the statute of limitations was tolled even if the required filing fee was not paid. He also contends that if, for statute of limitations purposes, the fee was required at filing, as a "trustee" he should be afforded the same exceptions case trustees enjoy in either not paying, or delay in paying, filing fees. Generally, a bankruptcy case trustee is not required to pay an adversary filing fee until there are funds available in a case. In a Sept. 26, 2011 Memorandum Opinion, available at http://is.gd/UbdZB8from Leagle.com, Bankruptcy Judge Benjamin Cohen said the unqualified law in this, and many other Circuits, is that a statute of limitations is tolled if a complaint is filed before the statute runs even if a required filing fee is not paid until after the date on which the statute would have run. And in this Circuit, when that statute is tolled, it is tolled permanently. The single exception, the judge said, is where a court requires by rule or order that the filing fee must be paid at the time the complaint is filed. The Court has not chosen to do so, he added. About Bruno's Supermarkets Bruno's Supermarkets LLC -- now known as BFW Liquidation, LLC -- is a privately held company headquartered in Birmingham, Alabama. Bruno's is the parent company of the Bruno's, Food World, and FoodMax grocery store chains, which includes 23 Bruno's, 41 Food World, and 2 FoodMax locations in Alabama and the Florida panhandle. Founded in 1933, Bruno's has operated as an independent company since 2007 after undergoing several transitions and changes in ownership starting in 1995. The current owner is Lone Star Funds, a Dallas-based investor. Bruno's filed for Chapter 11 relief on February 5, 2009 (Bankr. N.D. Ala. Case No. 09-00634). Burr & Forman LLP is the Debtor's lead counsel. Najjar Denaburg, P.C., is the Debtor's conflicts counsel. Greenberg Traurig, LLP, is the official committee of unsecured creditors' counsel. Alvarez & Marsal is the Debtor's restructuring advisor. Bruno's estimated between $100 million and $500 million each in assets and debts in its Chapter 11 petition. Bruno's has sold 56 of its stores to C&S Wholesale Grocers Inc., for $45.8 million. C&S will operate 31 stores and liquidated the remainder. CATHOLIC CHURCH: Wilmington Proposes Exit Financing --------------------------------------------------- The Catholic Diocese of Wilmington, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to approve exit financing necessary for consummating the Chapter 11 Plan of Reorganization and meet its near-term financial obligations. Section 15.1 of the Diocese's confirmed Plan sets forth the conditions precedent to effectiveness of the Plan, including, but not limited to: (i) the formation and funding of the Settlement Trust, (ii) contribution of the Lay Pension Fund and additional cash of $5 million to the Lay Pension Plan Trust, and (iii) the establishment of a reserve for the payment of administrative claims. In addition, the Lay Pension Plan Reaffirmation Agreement requires contribution of an additional $5 million to the Lay Pension Plan Trust by December 31, 2011. At the Confirmation Hearing on July 14, 2011, the Debtor's Chief Financial Officer testified that, in order for the Debtor to meet the financial conditions to effectiveness of the Plan and satisfy its near-term pension funding obligations, the Debtor would require approximately $14.5 million of borrowing, $5 million of which it anticipated borrowing from certain Restricted PIA Funds, and $9.5 million of which it anticipated borrowing from a third- party commercial lender. In the event the commercial financing could not be put in place before the Settlement Funding Date, the Debtor anticipated obtaining bridge loans from certain Non-Debtor Catholic Entities or Restricted PIA Funds, James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates. The Debtor holds certain Restricted PIA Funds consisting of charitable gifts and bequests subject to donor-imposed restrictions on use or disposition. Mr. Patton explains that the Debtor invests these Restricted PIA Funds for the benefit of the various charitable purposes to which the funds are dedicated. He says that most of the Restricted PIA Funds underwrite active ministries of the Debtor or the Non- Debtor Catholic Entities and from these "active" Restricted PIA Funds, the Debtor typically draws 5.5% of the total value annually to underwrite the applicable ministries. Assuming average annual investment returns in excess of 5.5%, limiting the annual draw to 5.5% allows the corpus of the funds to grow over time, to ensure the continued existence of the funds, and the continued support of the ministries to which they are dedicated, into the indefinite future. The Debtor also holds certain funds in a certain "Pooled Investment Account" as trustee for the benefit of certain Non- Debtor Catholic Entities. Like the Debtor with the Restricted PIA Funds, the Non-Debtor Catholic Entities whose investments underwrite their general operations typically draw 5.5% of the total investment value annually, which allows for the corpus of the investments to grow over time, Mr. Patton tells the Court. The Debtor is seeking a commercial loan amounting $9.5 million, to be secured by real property pledged by a Non-Debtor Catholic Entity. It is expected the loan will be fully amortized over a 25-year term, with a variable interest rate, presently around 4% annually. The loan remains subject to final credit approval from the lender and final review and approval by the Debtor, Mr. Patton notes. After the approval, if the Debtor intends to seek approval of the Commercial Term Loan prior to the Plan Effective Date, the Debtor will supplement its Request accordingly. Otherwise, the Debtor intends to proceed with "bridge" financing. Mr. Patton tells the Court that after the July 8, 2011 Confirmation Hearing, the Debtor and certain of the Non-Debtor Catholic Entities engaged in good faith negotiations regarding the terms of a potential "bridge" loan arrangement in the event that the Commercial Term Loan could not be finalized prior to the Settlement Funding Date. As a result, the parties ultimately agreed upon these terms: (a) Principal Amount: Approximately $8.3 million. (b) Interest: Simple interest of 6% annually, calculated daily on outstanding principal balances. (c) Maturity Date: One year, which may be extended to five years, unless accelerated in the event of default. (d) Payment Terms: During initial 1-year period, monthly, interest-only payments on drawn balances, with balloon payment of principal and interest on the Maturity Date unless extended. (e) Extension of Maturity Date: At the Debtor's option at the conclusion of the initial one-year term, the Debtor may extend the Maturity Date for all or any portion of the outstanding indebtedness to the conclusion of the extended five-year term by (i) paying an extension fee equal to 2% of the outstanding principal balance, or (ii) providing collateral security to the applicable lenders that is acceptable, in their sole discretion, to secure the Debtor's obligations during the extended term. (f) Early Payoff: At the Debtor's option, without penalty or premium. (g) Fees: None, except as provided with respect to the Extension Fee. (h) Costs and Expenses: Parties to bear their own costs and expenses; provided, however, that in the event of a default the Reorganized Debtor will reimburse the lenders the reasonable out-of-pocket costs of collection. (i) Conditions Precedent: (A) Entry of an order in form and substance acceptable to the lenders, in their sole discretion, authorizing and approving the Debtor's entry into the bridge loan; and (B) Occurrence of the Effective Date of the Plan as a Settlement Plan. (j) Negative Covenant of the Debtor: It being the intention of the lenders to provide short-term bridge financing that will be replaced by commercial financing as soon as practicable, so long as any amounts are outstanding and unpaid under the bridge loan, the Reorganized Debtor will not incur additional indebtedness, make payments on any debt, or transfer or hypothecate any property, except in accordance with the Plan and the Lay Pension Plan Reaffirmation Agreement. (k) Events of Default: (A) Failure to make any payment within three business days of when that payment will become due and payable; and (B) Material breach of a covenant. (1) Remedies upon Default: (A) Acceleration of Maturity Date; and (B) All other remedies under applicable law. In the exercise of its sound business judgment on behalf of certain "active" Restricted PIA Funds, the Debtor determined that a "bridge" loan on the terms agreed upon by the NDCE Lenders would be a prudent investment of the Restricted PIA Funds, insofar as it would provide for returns in excess of the 5.5% of the annual budgeted investment draws, thus building the corpus of the funds while providing cash to underwrite the applicable ministries. Accordingly, the Debtor proposes to borrow approximately $1 million from one or more "active" Restricted PIA Funds. In the exercise of its sound business judgment on behalf of certain "inactive" Restricted PIA Funds, the Debtor determined that terms loans on substantially similar economic terms as those discussed with the commercial lender would be a prudent investment of the Restricted PIA Funds, which do not have cash needs akin to those of the NDCE Lenders or the "active" Restricted PIA Funds. Accordingly, the Debtor proposes to borrow approximately $6.3 million from its "inactive" Restricted PIA Funds at an interest rate of 4% annually for a term of 25 years. The Debtor proposes that the borrowing be evidenced by promissory notes and payable in monthly installments of interest and principal, fully amortizing through the maturity date. * * * The Court granted the Debtor's Request. The Court further authorized the Debtor to enter into Term Notes aggregating an amount not to exceed $6.4 million. The Court has authorized the Debtor to enter into the Bridge Loan Agreement, provided that the total borrowing will not exceed $9.5 million, and the aggregate principal amount of borrowing from Restricted PIA Funds will not exceed $1.1 million. In accordance with Section 1142 of the Bankruptcy Code, the Debtor, the NDCE Lenders and each other appropriate party are authorized and directed to take all steps and perform the acts as may be necessary to implement and effectuate the Term Notes and the Bridge Loan Agreement, and are further authorized and directed to execute and deliver any instrument and perform any other act that is necessary for the consummation of the Term Notes and the Bridge Loan Agreement. Before the Court entered its order, the Official Committee of Unsecured Creditors argued that the Debtor's Request is in conflict with the Court's judgment in a certain litigation called "PIA litigation" because the Request is based on the premise that the Restricted Funds and the NDCE funds can be loaned to the Debtor. The Committee proposed that this language be added to the Order approving the Request: "Notwithstanding any other provision of this Order, this Order shall be vacated by the Court if the Effective Date of the Settlement Plan has not occurred on or before the Settlement Funding Date (as may be extended by unanimous written agreement of State Court Counsel). Under such circumstances, the Court may vacate the Order sua sponte and any party in interest may file an emergency motion to vacate the Order. If this Order is vacated in accordance with this paragraph, then this Order, the Term Notes, the Bridge Loan Agreement and all other documents, instruments or actions, authorized or directed by the foregoing, shall be void ab initio and without any legal effect. Nothing in this Order is intended, nor shall it be construed, to affect prior Orders or Judgments of this Court, including but not limited to the Phase I Judgment and Orders and the Confirmation Order." The Court added the Language to the Order. The Court explained that all transfers of property contemplated by the Request complies with applicable non-bankruptcy law that governs the transfer of property by a corporation or trust that is not a moneyed, business, or commercial corporation or trust, in accordance with Section 363(d)(1) of the Bankruptcy Code. The Court also pointed out that the Debtor's entry into the Term Notes and the Bridge Loan Agreement is in the best interests of the Debtor, the Reorganized Debtor, the Estate and its creditors, and all parties in interest in the Chapter 11 Case; is an adequate and necessary means to the implementation of the Plan; and meets all requirements imposed by Sections 364(b) and (d), 363(b) and (m), 1142 and 105(a) of the Bankruptcy Code, and Rules 4001, 3020(d), and 6004 of the Federal Rules of Bankruptcy Procedure. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. Judge Christopher Sontchi confirmed the Second Amended Chapter 11 Plan of Reorganization filed by the Diocese as a settlement plan, at a hearing held July 28, 2011. The Plan aims to pay approximately $77.4 million to people who were sexually abused by priests. Kenneth Martin and Charles W. Wiggins, two priests accused of sexual abuse, took separate appeals to the U.S. District Court for the District of Delaware from Judge Sontchi's July 28, 2011 order confirming the Plan. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc.,�http://bankrupt.com/newsstand/�or215/945-7000) CATHOLIC CHURCH: Insurance Settlements Declared Non-Appealable -------------------------------------------------------------- The Catholic Diocese of Wilmington, Inc. asks the U.S. Bankruptcy Court for the District of Delaware to declare that the order confirming the Debtor's Chapter 11 Plan of Reorganization is a final, non-appealable order as to the insurance settlements embodied in the Plan notwithstanding pending appeals from the order confirming the Plan, or approving those settlements as independent from the Plan, and authorizing and directing the settling insurers to perform under the insurance buy-back agreements notwithstanding pending appeals. Among the settlements and compromises embodied in the Plan was a settlement of potential insurance coverage litigation against the Settling Insurers, in exchange for approximately $15.4 million cash -- to be contributed to the Settlement Trust -- and certain other consideration. The Insurance Settlements were approved by the Confirmation Order. On August 10 and 11, 2011, Kenneth Martin and Charles Wiggins, both removed priests who had raised objections to confirmation of the Plan filed Notices of Appeal from the Confirmation Order. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, notes that one of the issues identified by Messrs. Martin or Wiggins on appeal challenge any provision of the Confirmation Order relating to the Insurance Settlement or the Settling Insurers. "Thus, in light of the Third Circuit's well-established policy against wholesale disturbance of plan confirmation orders on appeal where a more limited remedy would suffice -- and particularly in light of the protections afforded the Settling Insurers -- the Confirmation Order constitutes a final, non- appealable order in all respects material to the Insurance Settlements, and the Settling Insurers should not be permitted to rely on the pendency of Martin's or Wiggins' appeals, per se, to establish a failure of a condition precedent to the Settling Insurers' performance under the Insurance Buy-Back Agreements," Mr. Patton argues. Mr. Patton further contends that certain of the Insurance Buy- Back Agreements appear to provide that, as a condition to the Settling Insurers' obligation to close the sale transaction, the Confirmation Order must have become a final, non-appealable order. In light of the pending appeals from the Confirmation Order, the Debtor understands that certain of the Settling Insurers may take the position that this condition is not presently satisfied, Mr. Patton tells the Court. "Absent withdrawal of the notices of appeal by Martin and Wiggins, it does not appear this condition can be satisfied prior to the Settlement Funding Date," Mr. Patton contends. He adds that absent closing on all the Insurance Buy-Back Agreements, the Debtor will not be able to consummate the Plan as a Settlement Plan because it does not have the wherewithal to front any portion of the approximately $15.4 million Insurer Settlement Contribution. Dalton & Associates Support Debtor In a letter addressed to the Court, Bartholomew J. Dalton, Esq., at Dalton & Associates P.A., in Wilmington, Delaware, conveys his support of the Debtor's Request. Mr. Dalton is the counsel for certain abuse victims. Mr. Dalton notes that a failure of the carrier to fund by September 26, 2011, would constitute bad faith on their part. He contends that there is no real risk to the carrier in funding given the fact that releases from all of the abuse victims have been signed and pending appeals do not substantially impact the overall resolution of the case. * * * After considering the Debtor's Request and the Objections at a hearing on September 9, 2011, the Court ruled that the provisions of the Confirmation Order, and any documents referenced in the Confirmation Order that are not at issue in the two Appeals taken by Messrs. Martin and Wiggins are reaffirmed and approved in all respects. In addition, the Court directs the Settling Insurers to take and perform all acts necessary to effect a closing on the Purchase of the Settled Insurance Policies pursuant to the Insurance Buy-Back Agreements on or before September 26, 2011, notwithstanding the pendency of the Appeals, provided the conditions for closing are met. In a separate order entered on September 20, 2011, the Court ruled that any Settling Insurer who pays its portion of the Insurers Settlement Contribution, or any NDCE who pays its portion of the NDCE Settlement Contribution, on or before September 26, 2011, will be entitled, and the Settlement Trust or the Debtor will return the funds to the paying entity, if the Plan does not go effective. On September 22, 2011, the Court entered another order pursuant to a stipulated order submitted by the Debtor and Certain Underwriters at Lloyd's, London on September 20. Lloyd's previously proposed that the Court should vacate the Confirmation Order in exchange for the priests' withdrawal of their appeals. The Stipulated Order provides that the September 9 Order is vacated and withdrawn and the Debtor's Request is granted solely as to the Debtor's request for approval of the Insurance Settlements independent from the Plan. In addition, these technical amendments to the Insurance Buy-Back Agreements are approved: (a) With respect to the Insurance Buy-Back Agreements entered into by Lloyd's Underwriters related to pre-1994 insurance policies and the Insurance Buy-Back Agreement entered into by Underwriters related to post-1994 insurance policies, these technical and immaterial amendments are approved: (i) the first sentence of paragraph 2 of each Agreement will be amended by inserting the phrase "and/or separate Order" after the phrase "In the Confirmation Order" and (ii) Paragraph 5 of each Agreement will be amended by adding the phrase "and/or separate Order" after the phrase "Confirmation Order" which appears in the first and second sentence of such paragraph. (b) With respect to Chartis, this technical amendment is approved: The definition of "Approval Order" in Section 1.1 (d) of the Chartis BuyBack Agreement will be read as: "(d) "Approval Order" means a Final Order with only such modifications as are mutually acceptable to the Carriers, Chartis, the Diocese and the Diocese Releasing Parties in each Party's respective sole discretion, that: (i) approves this Agreement and the sale of the Policies to the Carriers and Chartis free and clear of all Interests; (ii) authorizes the Parties to undertake the settlement and transactions contemplated by this Agreement; and (iii) is approved by the Bankruptcy Court under sections 363 and/or 105 of the Bankruptcy Code and Bankruptcy Rule 9019 and/or under such other provisions as the Bankruptcy Court may order, understanding that the Parties hereto intend the Approval Order to be both the Confirmation Order confirming the Diocese's "Settlement Plan", as defined herein, together with the Order dated September 20, 2011 approving the Insurance Settlements independent from the Plan." (c) With respect to First State Insurance Company, Nutmeg Insurance Company, and Twin City Fire Insurance Company, these technical and immaterial amendments to the Insurance Buy-Back Agreement entered into by Hartford are approved: (i) the definition of "Approval Date" will be removed; and (ii) the definition of "Injunction" and Sections 2.3, 3.5, 4.1, 5(b) will be amended by replacing the reference to "Approval Date" with "upon payment of Settlement Amount." (d) With respect to the Insurance Buy-Back Agreement entered into by FFIC, these technical and immaterial amendment is approved: the definition of "Effective Date" will be amended as: "Effective Date" means the day on which the Settlement Amount has been paid by FFIC to CDOW." (e) With respect to the Settlement, Mutual Release and Policy Buy-Back Agreement Between the Catholic Diocese of Wilmington, Inc. and Scottsdale Insurance Company, this technical and immaterial amendment is approved: The text of Section II.A. (but prior to paragraph II.A.1) is restated as: "This Agreement, which includes all prior written paragraphs, including the Background Section I., shall become effective on the date (the "Effective Date") that all the following conditions have been satisfied or, as to each condition other than II.A.1 and II.A.2 are waived by Buyer:" Before the Court entered the orders, objections were filed by three indirect subsidiaries of Hartford Financial Services Group, Inc.; and Granite State Insurance Company and Insurance Company of the State of Pennsylvania. Hartford argued that the Debtor did not make any contact regarding the changes and added that the Debtor did not support its Request with any authority as basis. Granite State argued that when it settled its claims with the Debtor and entered into a certain Buy-Back Agreement, they bargained for finality. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. Judge Christopher Sontchi confirmed the Second Amended Chapter 11 Plan of Reorganization filed by the Diocese as a settlement plan, at a hearing held July 28, 2011. The Plan aims to pay approximately $77.4 million to people who were sexually abused by priests. Kenneth Martin and Charles W. Wiggins, two priests accused of sexual abuse, took separate appeals to the U.S. District Court for the District of Delaware from Judge Sontchi's July 28, 2011 order confirming the Plan. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc.,�http://bankrupt.com/newsstand/�or215/945-7000) CATHOLIC CHURCH: Court Sets $1-Mil. Bond for Settlement Trustee --------------------------------------------------------------- On September 22, 2011, the U.S. Bankruptcy Court for the District of Delaware conducted a status conference hearing on the Confirmed Second Amended Chapter 11 Plan of Reorganization of Catholic Diocese of Wilmington, Inc. At the status conference, counsel for the Official Committee of Unsecured Creditors asked that the Court to establish the amount of the Settlement Trustee's bond that is required by Section 6.1.1 of the Catholic Diocese of Wilmington, Inc. Settlement Trust Agreement for Qualified Settlement Trust. The Court, having considered the representations of the Committee's counsel regarding the amounts to be received by the Settlement Trust and the length of time that certain balances will be held by the Settlement Trust, ruled that the Settlement Trustee will serve with a bond amounting $1,000,000. The amount is subject to adjustment by further order of the Court. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. Judge Christopher Sontchi confirmed the Second Amended Chapter 11 Plan of Reorganization filed by the Diocese as a settlement plan, at a hearing held July 28, 2011. The Plan aims to pay approximately $77.4 million to people who were sexually abused by priests. Kenneth Martin and Charles W. Wiggins, two priests accused of sexual abuse, took separate appeals to the U.S. District Court for the District of Delaware from Judge Sontchi's July 28, 2011 order confirming the Plan. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc.,�http://bankrupt.com/newsstand/�or215/945-7000) CENTURION PROPERTIES: Wants GECC Cash Collateral Until Dec. 31 -------------------------------------------------------------- Centurion Properties III, LLC, asks the U.S. Bankruptcy Court for the Eastern District of Washington for authorization to: -- use the cash collateral of General Electric Capital Corporation until Dec. 31, 2011; and -- continue adequate assurance payments. The Debtor, in its fifth request, seeks authorization to use rents to administer the estate, meet contractual obligations, meet payments of creditors associated with postpetition operations, and preserve the estate for the benefit of creditors. The lender consented to the use of its cash collateral. As of Sept. 1, 2011, the Debtor holds the sum of $3,662,595 in its debtor-in-possession accounts. The money is derived from ongoing operations and management of the Debtor's property postpetition. The Debtor relates that it received an appraisal and appraisal review indicating that the fair market value of its property interest is $87,886,000. The Debtor proposes that adequate assurance payments remain the same as referenced in the prior stipulated order. Upon the prior orders, GECC receives adequate protection payments of $330,000 per month. The Debtor is current on this payment. The Debtor adds that the case is moving toward resolution. It negotiated a settlement with GECC is dependent upon these contingencies: 1. approval by GECC's creditor committee; 2. approval by the the Bankruptcy Court after appropriate notice of a Bankruptcy Rule 9019 settlement agreement; and 3. confirmation of a consensual Chapter 11 Plan by Nov. 30, 2011. GECC has received conditional credit committee approval. The adversary proceeding which seeks resolution of claims and ownership interest disputes, is scheduled to begin hearing summary judgment motions on Oct. 28 until Nov. 10. Trial on the remaining issues is scheduled for the week of Dec. 12. About Centurion Properties Kennewick, Washington-based Centurion Properties III, LLC, was established in 2006 for the sole purpose of acquiring real estate project Battelle Leaseholds located in Richland, Washington. Its sole asset is its leasehold interests in the Battelle Memorial Institute Campus and improvements, valued in excess of $90 million. CPIII filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wash. Case No. 10-04024) on July 9, 2010. John D. Munding, Esq., at Crumb & Munding, assists the Company in its restructuring effort. The United States Trustee was unable to appoint a creditors committee in the case. The Company estimated its assets and debts at $50 million to $100 million. CHARLESTON ASSOCIATES: Fry's Acquires Great Indoors Site -------------------------------------------------------- Steve Green at Vegas Inc. reports that Fry's Electronics Inc. has purchased a location for another store in Las Vegas, buying the vacant Great Indoors site at Boca Fashion Village. The report says the 20.4-acre Boca Fashion Village at 700-750 S. Rampart Blvd., north of Charleston Boulevard, is part of the 55-acre Shops at Boca Park center at Charleston and Rampart boulevards, just south of the new Tivoli Village mixed-use center. Mr. Green notes that in a late-August bankruptcy court filing, Charleston Associates LLC, the owner of Boca Fashion Village, said that under plans approved by the bankruptcy court, Fry's had purchased the Great Indoors site on June 15. Mr. Green says records show Fry's had agreed to buy the site for $4.66 million, or more than $1.2 million per acre; plus pay another $5 million to Sears, Roebuck and Co., owner of Great Indoors, for the vacant Great Indoors building. In addition, Fry's planned to invest another $3 million to $5 million to retrofit the building for use as a Fry's store. The report notes the deal is seen by Boca Fashion Village as crucial to it emerging from bankruptcy, as the shopping center had been hurt by the loss of the Great Indoors as well as the closure of Linens 'n Things. 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, represent the Official Committee of Unsecured Creditors as counsel. Thomas M. Horan, Esq., at Womble Carlyle Sandridge & Rice, PLLC, in Wilmington, Del., represents the Committee as Delaware counsel. CHC HELICOPTER: Moody's Lowers CFR to B2; Outlook Negative ---------------------------------------------------------- Moody's Investors Service downgraded CHC Helicopter S.A.'s ratings and changed the outlook to negative. The Corporate Family Rating (CFR), Probability of Default Rating (PDR) and the $1.1 billion senior secured first lien notes rating were downgraded to B2 from B1. The super-senior secured revolving credit facility rating was downgraded to Ba2 from Ba1. CHC Helicopter S.A. is a subsidiary of 6922767 Holding S.a.r.l. (collectively CHC). This concludes the review of CHC that began on April 8, 2011. Downgrades: Issuer: 6922767 Holding S.a.r.l. -- Probability of Default Rating, Downgraded to B2 from B1 -- Corporate Family Rating, Downgraded to B2 from B1 Issuer: CHC Helicopter S.A. -- Senior Secured Bank Credit Facility, Downgraded to Ba2 from Ba1 -- Senior Secured Regular Bond/Debenture, Downgraded to B2, LGD4, 53% from B1, LGD3, 47% Outlook Actions: Issuer: 6922767 Holding S.a.r.l. -- Outlook, Changed To Negative From Rating Under Review Issuer: CHC Helicopter S.A. -- Outlook, Changed To Negative From Rating Under Review RATINGS RATIONALE The downgrade and negative outlook reflect the company's volatile operating results and expectation of continued high leverage, and the ongoing need to re-finance leases, although progress has been made on this front over the past several months, and the ongoing need to arrange financing for new aircraft orders and to refinance or extend existing leases. The company's current management team is focused on reducing costs, entering economic contracts and establishing a framework to fully collect on the full terms of contracts, areas that have taken a back seat to outright growth in the past. This ongoing restructuring while the company continues to grow and reposition its business will take time to implement. Moody expects variable earnings and cash flow and continued high leverage during this period. CHC has greatly reduced its exposure to required lease covenant waivers and amendments and expiring leases over the past several months, but will continue to face lease maturities. Current liquidity is sufficient to meet lease maturities that are not renewed for the remainder of fiscal 2012. The B2 CFR reflects CHC's high leverage, a complex portfolio of aircraft operating lease agreements, a complex corporate structure and inherent cyclicality in the oil and gas services sector. The B2 CFR favorably reflects CHC's longstanding customer relationships and three to five year contracts with highly rated oil and gas companies in its offshore oil and gas support business, which comprises about 75% of revenue, and the government contracts in the search and rescue (SAR) and emergency medical services businesses. The rating also considers CHC's large fleet of high quality medium and heavy aircraft, its geographic diversity, and that approximately 66% of CHC's flying revenue is derived from fixed monthly fees. CHC finances about 63% of its fleet of 265 aircraft with off- balance sheet operating leases and sociated asset value guarantees adding US$1.1 billion to reported fiscal 2011 debt. In combination with an unfunded pension obligation of US$90 million, CHC's adjusted debt totals approximately US$2.5 billion, and debt to adjusted EBITDA a very high 7x. CHC has adequate liquidity. Internally generated cash flow and cash balances should cover working capital requirements and capex for aircraft lease financing and aircraft lease buyouts through fiscal 2012 (April 30, 2012). Moody estimates negative free cash flow for the company's 2012 fiscal year of about US$140 million. As of July 31, 2011, the company had approximately US$44 million of cash and US$155 million available (after letters of credit) under its US$330 million revolving credit facility, which matures in 2015. Moody believes this availability may be reduced as of mid-September 2011 due to utilization to buy out certain leases, but in combination with the proceeds of asset sales will be sufficient to cover the negative free cash flow and the buyout of expiring leases, if necessary. The revolver has one financial covenant (maximum super senior debt/EBITDA of 2.5x), with which the company should be comfortably in compliance in 2011 and 2012. However, the company has restrictive covenants on certain of its aircraft lease facilities. The negative outlook could be changed to stable when it is clear that the company's financing needs, both in terms of new aircraft financing and existing lease covenant compliance and renewals, can be comfortably met over a forward looking period of at least 18 months, and when leverage as measured by debt to EBITDA appears poised to reduce below the 6x range. A rating upgrade would be dependent on leverage trending to the 5x range and a forward view of two to three years of stability in each of the company's lease portfolio, management and execution of the business plan. The rating could be downgraded if leverage does not appear to be headed below 6.5x through fiscal 2013 or if the company again finds itself requiring multiple covenant amendments and waivers and lease renewals. The principal methodology used in rating 6922767 Holding S.a.r.l. was the Global Oilfield Services Rating Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CHC Helicopter S.A. and 6922767 S.a.r.l. are registered in Luxemburg and headquartered in Vancouver, British Columbia. Collectively they are a significant provider of helicopter services to the offshore exploration and production industry, with operations in over 26 countries. CHINA GREEN: Posts $43,100 Net Loss in Second Quarter ----------------------------------------------------- China Green Creative, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $43,135 on $406,918 of revenues for the three months ended June 30, 2011, compared with a net loss of $118,263 on $270,670 of revenues for the same period of 2010. For the six months ended June 30, 2011, the Company had net income of $69,262 on $1.1 million of revenues, compared with a net loss of $786,205 on $572,068 of revenues for the same period last year. The Company's balance sheet at June 30, 2011, showed $5.3 million in total assets, $7.4 million in total liabilities, and a stockholders' deficit of $2.1 million. Madsen & Associates CPA's, Inc., in Salt Lake City, says China Green Creative, Inc., does not have the necessary working capital to service its debt and for its planned activity, which raises substantial doubt about the Company's ability to continue as a going concern. A complete text of the Form 10-Q is available for free at: http://is.gd/7JbAxy Shenzhen, China-based China Green Creative, Inc., a Nevada Corporation, was incorporated on Aug. 17, 2006, under the name of Glance, Inc. On Jan. 21, 2009, the Company changed its name to China Green Creative, Inc. CGC and its subsidiaries are principally engaged in the distribution of consumer goods in the People's Republic of China. CIMA LLC: Files Schedules of Assets and Liabilities --------------------------------------------------- CIMA, L.L.C. filed with the Bankruptcy Court for the Southern District of Florida its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $17,000,000 B. Personal Property $1,435,000 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $7,075,214 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $1,207,579 ----------- ---------- TOTAL $18,435,000 $8,282,783 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. CONGRESSIONAL HOTEL: Proposes to Sell Assets for $18 Million ------------------------------------------------------------ Congressional Hotel Corporation and Casco Hotel Group, LLC, ask the U.S. Bankruptcy Court for the District Of Maryland to approve the agreement of sale whereby 1775 Rockville Pike LLC will acquire all of the assets. The Debtors relate that on Aug. 23, 2011, the Debtors entered into an agreement of sale with 1775 Rockville, a Delaware Limited Liability Company, to sell the property and other rights, titles and interests. The salient terms of the agreement of sale includes: Assets to be Sold: At the closing the seller will transfer to the purchaser, free and clear of all liens, claims, interests, and encumbrances of every kind, all of the assets, including, without limitation, the property and CHC personalty. Purchase Price: The purchaser agrees to pay $18,000,000. Deposit: As of the date of the motion, the purchaser has deposited $350,000 with the escrow agent. Upon the expiration of the inspection period, the purchaser will deposit an additional $150,000 with the escrow agent. The escrow agent will hold the deposit in accordance with the terms of the agreement of sale and the escrow agreement. No Assumed Liabilities: The purchaser will not assume any of the seller's debts, liabilities and other obligations with respect to the assets and seller will continue to be responsible for liabilities, other than (i) those arising after the closing under any contract that the purchaser specifically assumes under the agreement of sale; and (ii) other liabilities, if any, specified in the agreement of sale. Assigned Contracts: Within five days after the expiration of the inspection period, but in all events at least 30 days prior to the hearing on the sale motion, the purchaser will determine which assigned contracts it intends to assume (including the Mervis Lease). The proposed sale to the purchaser reflects the highest and best price for the assets. Due to the extensive negotiations and due diligence conducted by the purchaser, the agreement of sale also includes certain protections for the purchaser, and if the Debtors accept an offer other than the offer of the purchaser, then the purchaser is entitled to receive, as a condition to closing a sale to a third party, at the closing of such sale and directly from the purchase thereof, a break-up fee in the amount of $540,000, which represents compensation for the purchaser's reasonable and actual expenses. The Debtors have agreed to place the net proceeds of the sale (after payment of the Citizens Bank of Pennsylvania's secured claim -- $14,053,752) in their respective debtor-in-possession accounts and use such proceeds to pay the remaining claims in their respective cases in accordance with the priorities established by the Bankruptcy Code. In the event the agreement of sale does not close, the Debtors, through their broker, intend to continue to market the property and believe they will be able to sell the property within the next six months. In the meantime, in the event the agreement of sale does not close, the Debtors have sufficient income in order to continue to make timely adequate protection payments to Citizens. About Congressional Hotel and CASCO Hotel Group Casco Hotel Group, LLC, owns the Legacy Hotel in Rockville, Maryland. Congressional Hotel Corporation is a holdover tenant on the Property and manages the Property on behalf of CASCO. The hotel was previously known as Ramada Inn. Congressional Hotel filed for Chapter 11 relief (Bankr. D. Md. Case No. 11-26732) on Aug. 15, 2011. CASCO filed for Chapter 11 relief (Bankr. D. Md. Case No. 11-26880) two days later. CASCO is a single-asset real estate company. It declared assets and liabilities each in the range of $10 million to $50 million. Congressional Hotel scheduled $709,121 in assets and $19,883,667 in debts. James Greenan, Esq., at McNamee Hosea, represents Congressional Hotel. Congressional Hotel previously filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 09-17901) on May 3, 2009. James Greenan, Esq., at McNamee Hosea represented the Debtor in its restructuring efforts. The 2009 petition estimated the Debtor's assets and debts from $10 million to $50 million. The case was dismissed on May 18, 2011, at the request of creditor Mervis Diamond Corp. But a resolution couldn't be confirmed with Mervis Diamond and other creditors, prompting Congressional Hotel to seek Chapter 11 protection again. CONTINENTAL COMMON: Add'l Adequate Protection for PNC Approved -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Continental Common, Inc., to: -- access PNC Bank, N.A.'s cash collateral until Dec. 30, 2011; and -- grant additional adequate protection for PNC in exchange for PNC's consent to the Debtor's use of cash collateral. Pursuant to certain notices filed by the Debtor and PNC, the Debtor's authority to use the cash collateral of PNC was previously extended to Sept. 30, 2011. On July 19, 2011, the Bankruptcy Court approved the amended Disclosure Statement explaining the Plan of Reorganization dated as of June 14, 2011. The Plan was proposed by the Debtor and PNC. In this relation, the Debtor has requested that PNC consent to a continuance of the cash collateral use until the confirmation hearing on the Plan. In exchange for PNC's agreement to continue to the confirmation hearing, the parties have agreed to modify, subject to approval by the Court, the cash collateral order to reflect these terms: a. The Debtor will immediately transfer $205,346 to PNC as adequate protection. b. Transcontinental Realty Investors, Inc., the former equity interest owner of the Debtor, will transfer $205,346 to the Debtor within five business days of the transfer by the Debtor of the additional adequate protection payment to PNC. The Court also ordered that PNC will support confirmation of the Plan; provided, however, that PNC's agreement to support confirmation of the Plan will terminate upon the filing with the Court of a notice by PNC that any of the below termination events has occurred: i) it is no longer feasible for all transactions that are to be consummated in connection with and under the Plan to be fully consummated on or prior to 5:00 p.m., prevailing Central time, on Dec. 30, 2011, as determined by PNC in its sole and absolute discretion; or ii) a material adverse change as determined by PNC in its sole and absolute discretion. PNC is represented by: William L. Wallander, Esq. Bradley R. Foxman, Esq. VINSON & ELKINS L.L.P. Trammell Crow Center 2001 Ross Avenue, Suite 3700 Dallas, TX 75201-2975 Tel: (214) 220-7700 Fax: (214) 220-7716 E-mail: bwallander@velaw.com bfoxman@velaw.com About Continental Common Dallas, Texas-based Continental Common, Inc., has primary assets consisting of various real estate holdings in multiple states. The Company filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-37542) on Oct. 28, 2010. Melissa S. Hayward, Esq., at Franklin Skierski Lovall Hayward LLP, represents the Debtor. The Company disclosed $29,250,424 in assets and $25,150,836 in liabilities. The U.S. Trustee has not appointed creditors' committee or examiner in the case. CRYSTAL CATHEDRAL: Has Until Oct. 31 to Raise $50 Million --------------------------------------------------------- Ravelle Mohammed at Christian Post reports that officials at Crystal Cathedral have until Oct. 31, 2011, to come up with the $50 million owed in debts or risk losing the glass worship facility to a Catholic archdiocese or another prospective buyer. According to the report, almost 400 creditors received a timeline to vote on the sale plan for the megachurch, which has already attracted several offers -- the highest bid coming from the Roman Catholic Diocese of Orange for $53.6 million. Crystal Cathedral administrators and the committee of creditors have until Oct. 31 to decide on an actual buyer. About Crystal Cathedral Crystal Cathedral Ministries is a Southern California-based megachurch founded by television evangelist Robert Schuller. The church, known for its television show "The Hour of Power." Mr. Schuller retired from his role as senior pastor of Crystal Cathedral in 2006. His daughter Sheila Schuller Coleman has been senior pastor since July 2009. Contributions declined 24% in 2009, in part on account of "unsettled leadership." Crystal Cathedral filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. 10-24771) on Oct. 18, 2010. The Debtor disclosed $72,872,165 in assets and $48,460,826 in liabilities as of the Chapter 11 filing. Marc J. Winthrop, Esq., at Winthrop Couchot P.C. represent the Debtor. Todd C. Ringstad, Esq., at Ringstad & Sanders, LLP, represents the Official Committee of Unsecured Creditors. DEL MONTE: Fitch Affirms 'B' Long-Term Issuer Default Rating ------------------------------------------------------------ Fitch Ratings has taken several rating actions on Del Monte Corporation (Del Monte) -- a wholly-owned subsidiary of Blue Acquisition Group, Inc. The following ratings have been affirmed: -- Long-term IDR at 'B'; -- $750 million asset-based revolver (ABL) at 'BB/RR1'; -- $2.7 billion secured term loan B at 'BB/RR1'. Due to Fitch's recovery analysis, the following rating has been downgraded: -- $1.3 billion senior unsecured notes to 'CCC/RR6' from 'B-/RR5'. The Rating Outlook has been revised to Stable from Positive. At July 31, 2011, Del Monte had approximately $4.0 billion of total debt. Rating Rationale: Del Monte's ratings reflect its high financial leverage, competitive EBITDA margins, and good cash flow generation. Additionally, Del Monte holds No. 1 and No. 2 market share positions in categories facing favorable demographic trends. The $7 billion plus processed produce industry should benefit from growing demand for healthy food while the $18 billion plus pet food and snacks business continues to grow with increasing household dog and cat ownership. During the fiscal year ended May 1, 2011, Pet Products and Consumer Products represented 49% and 51% of Del Monte's $3.7 billion of sales, respectively. These segments comprised 68% and 32% of the firm's $557.7 million of operating income excluding corporate expenses during the same period. The operating margin for Del Monte's pet operation and consumer food business has averaged approximately 18% and 9%, respectively, since fiscal 2007. Del Monte is experiencing top line weakness and absorbing higher cost in both the Pet Products and Consumer Products segments. During the first quarter ended July 31, 2011, consolidated sales fell 3.5% to $776.2 million. Drivers of the revenue decline include 3.3% of new product volume and 2.3% of pricing offset by a 7.1% decline in existing product volume and a 2.0% decline due to trade spend/price elasticity. Operating income, inclusive of corporate expenses, was 58.7% lower at $49.3 million due primarily to lower sales and higher grain, protein and other ingredient costs. Fitch is especially concerned about Del Monte's ability to return to historical levels of profitability in its higher margin pet operations. Del Monte has indicated that inflation was approximately 10% during the first quarter of fiscal 2012. Fitch believes productivity savings, targeted at $90 million plus for the year, and pricing can partially offset inflation in 2012. However, aggressive promotions by larger competitors in Pet Products could limit Del Monte's on-going pricing ability. This could slow the company's earnings and cash flow growth along with the pace of debt reduction currently anticipated by Fitch. Credit Statistics and Cash Flow: For the latest 12-month (LTM) period ended July 31, 2011, total debt-to-operating EBITDA was 6.7 times (x). Operating EBITDA-to gross interest expense was 3.9x and funds from operations (FFO) fixed charge coverage was 2.3x. LTM free cash flow was $206.8 million. Del Monte does not currently pay dividends. Del Monte's leverage is trending slightly higher than Fitch had projected due to disappointing operating performance during the most recent fiscal first quarter. Fitch expects Del Monte's total debt-to-operating EBITDA to approximate 7.0x for fiscal 2012 and then decline to the low 6.0x range in fiscal 2013. Commodity cost pressure combined with a lag in pricing is likely to cause leverage to temporarily increase from the current LTM level. Debt reduction is anticipated in fiscal 2013 due to mandatory term loan debt repayment covenants discussed below. Del Monte generates most of its cash flow during the second half of its fiscal year because seasonal working capital requirements peak in the second quarter. Cash flow during the first quarter ended July 31, 2011 was augmented by the receipt of a $44.0 million merger-related tax refund. Fitch expects Del Monte to generate FCF in excess of $200 million in fiscal 2012. Annualized FCF of $100 million - $150 million is anticipated beyond the current fiscal year. Rating Triggers and Recovery Ratings: Fitch is monitoring Del Monte's price realization and commodity cost exposure closely. A continuation of current operating trends or declines in operating cash flow could result in negative rating actions. Total debt-to-operating EBITDA above 7.0x and materially lower than expected FCF generation could result in a downgrade. Conversely, leverage meaningfully below 6.0x due to improvement in operating margins, good FCF generation, and debt reduction could result in positive rating actions. The 'RR1' Recovery Rating on Del Monte's secured facilities indicates that Fitch views recovery prospects on these obligations as outstanding at 91% or better. The 'RR6' rating assigned to the company's senior unsecured notes denotes Fitch's belief that recovery would be poor at 10% or less if the bonds went into default. The downgrade was caused by the effect of lower operating earnings on Del Monte's estimated enterprise value. Liquidity and Maturities: Del Monte's liquidity is viewed as adequate. The company had $246.4 million of cash and $521.9 million of revolver availability, after considering $38.2 million of letters of credit, at July 31, 2011. Del Monte's undrawn ABL revolver, which matures March 8, 2016, had a borrowing base of $560.1 million. Scheduled maturities of long-term debt are manageable. At July 31, 2011, Del Monte had $20.2 million in obligations due fiscal 2012 and $27 million due annually through fiscal 2017. The company's $2.7 billion term loan amortizes quarterly at a rate of 0.25% on outstanding principal until maturity on March 8, 2018. Collateral and Significant Debt Terms: Del Monte's ABL revolver has a first-priority lien on accounts receivable and inventory and a second-priority lien on substantially all other assets. The company's secured term loan has a first-priority lien on substantially all non-ABL first priority assets and a second-priority lien on inventories and accounts receivable. Del Monte is not subject to a maximum leverage or minimum EBITDA covenant. The ABL revolver is bound by a springing fixed-charge coverage ratio of 1.0x if availability falls below a certain threshold. The term loan facility has mandatory prepayment provisions. Commencing in the fiscal year ending April 29, 2012, and payable in the first quarter of fiscal 2013, 50% of annual excess cash flow (as defined by the agreement) must be used to prepay the term loan. The percentage is reduced to 25% if leverage is 5.5x or less and to 0% if leverage is equal to or below 4.5x. DESMARAIS ENERGY: Files for Bankruptcy under BIA as Cash Seized --------------------------------------------------------------- Desmarais Energy Corporation said that it has filed with the Office of the Superintendent of Bankruptcy a Notice of Intention to File a Proposal under the Bankruptcy and Insolvency Act (Canada). As a consequence of such filing, any and all recourses of creditors are stayed for an initial period of 30 days. Desmarais has taken this action in light of recent enforcement actions taken by its largest unsecured creditor, whereby that creditor has seized Desmarais' cash balances, leaving Desmarais unable to meet its day to day obligations as they come due. Although this enforcement action and the underlying claim of the unsecured creditor are disputed by Desmarais, the Company has taken this action under the BIA as the most expeditious and economical manner of addressing the interests of its creditors and allowing it to carry on its operations. Desmarais expects to file a formal proposal under the BIA, setting forth a comprehensive plan for payment to Desmarais' creditors in due course. This filing has been taken by Desmarais with the full support of its secured creditor. The trustee named in the notice of intention is Hardie & Kelly Inc., of Calgary, Alberta. Based in Calgary, Canada, Desmarais Energy Corporation is a junior oil and gas exploration and production company, engages in the exploration, development, production, and acquisition of oil and gas reserves in western Canada. DOLPHIN SUBSIDIARY: Fitch Assigns 'BB+ Rating on Senior Notes ------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to Dolphin Subsidiary II, Inc.'s (Dolphin) senior notes issuance. The Rating Outlook is Stable. Dolphin is a special purpose entity that is a wholly owned indirect subsidiary of the AES Corporation (AES). The proceeds from the senior notes due 2016 and 2021 will be used to partially finance AES' pending acquisition of DPL Inc. (DPL); AES has already raised $2.05 billion of permanent acquisition financing at the parent level. Prior to the merger close, the proceeds from the offering will be deposited in an escrow account. If the merger does not close on or before Sept. 30, 2012, the amounts held in escrow will be used to redeem the notes at 101% plus accrued and unpaid interest. Dolphin has been created for the sole purpose of issuing acquisition financing. Upon consummation of the merger, Dolphin will merge into DPL and the notes will become senior unsecured obligations of DPL. The 'BB+' ratings of the notes reflect Fitch's expected ratings for DPL's senior unsecured debt following consummation of the merger. The expected ratings are based on the proposed terms of the AES acquisition, which include an additional $1.25 billion of senior unsecured debt at DPL. Pro forma for the completion of the acquisition, DPL's consolidated capital structure would include approximately $2.5 billion of long-term debt and $22.9 million of preferred stock. Please refer to Fitch's press release 'Fitch Expects to Downgrade DPL's Unsecured Debt to 'BB+'; Maintains Watch Negative Pending AES Deal' dated June 17, 2011 for additional details. Fitch is maintaining the Rating Watch Negative for DPL and Dayton Power & Light (DP&L). The Rating Watch would be resolved following the completion of the acquisition. Fitch assigns the following ratings: Dolphin Subsidiary II, Inc. -- Senior unsecured notes 'BB+'. Fitch maintains the following ratings on Rating Watch Negative: DPL Inc. -- Long-term Issuer Default Rating (IDR) 'BBB+'; -- Senior unsecured notes 'BBB+'; -- Short-term IDR 'F2'. Dayton Power & Light Company -- Long-term IDR 'BBB+'; -- Senior secured debt 'A'; -- Preferred stock 'BBB'; -- Short-term IDR & Commercial paper 'F2'. DPL Capital Trust II -- Junior subordinated debt 'BBB-'. DREIER LLP: Judge OKs Trustee's $52M Deal With Hedge Fund --------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Stuart M. Bernstein cleared a $52 million settlement Friday between the trustee overseeing the liquidation of Dreier LLP and a hedge fund that fell victim to a Ponzi scheme perpetrated by the defunct law firm's imprisoned founder. Law360 relates that Judge Bernstein approved the deal, which reduces Eton Park Capital Management's $84 million in claims against Dreier by nearly 38 percent. In return, trustee Sheila M. Gowan has agreed to drop nearly $4 million in preference and fraudulent transfer claims against the hedge fund, Law360 says. About Marc Dreier and Dreier LLP Marc Dreier founded New York-based law firm Dreier LLP -- http://www.dreierllp.com/-- in 1996. On Dec. 8, 2008, the U.S. Securities and Exchange Commission filed a suit, alleging that Mr. Dreier made fraudulent offers and sales of securities in several cities, selling fake promissory notes to hedge and other private investment funds. The SEC asserted that Mr. Dreier also distributed phony financial statements and audit opinions, and recruited accomplices in connection with that scheme. Mr. Dreier, currently in prison, was charged by the U.S. government for conspiracy, securities fraud and wire fraud (S.D.N.Y. Case No. 09-cr-00085). Dreier LLP sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 08-15051) on Dec. 16, 2008. Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, was tapped as counsel. The Debtor estimated assets of $100 million to $500 million, and debts between $10 million and $50 million in its Chapter 11 petition. Sheila M. Gowan, a partner with Diamond McCarthy, was appointed Chapter 11 trustee for the Dreier law firm. Ms. Gowan is represented by Jason Porter, Esq., at Diamond McCarthy LLP. Wachovia Bank National Association, the Dreier LLP Chapter 11 trustee, and Steven J. Reisman as post-confirmation representative of the bankruptcy estate of 360networks (USA) Inc. signed a petition that put Mr. Dreier into bankruptcy under Chapter 7 on Jan. 26, 2009 (Bankr. S.D.N.Y. Case No. 09-10371). Mr. Dreier, 60, pleaded guilty to fraud and other charges in May 2009. The scheme to sell $700 million in fake notes unraveled in late 2008. Mr. Dreier is serving a 20-year sentence in a federal prison in Minneapolis. DUNHAM'S BAY: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Dunham's Bay Boat Company, Inc. 10 Dunham's Bay Road Lake George, NY 12845 Bankruptcy Case No.: 11-12959 Chapter 11 Petition Date: September 22, 2011 Court: U.S. Bankruptcy Court Northern District of New York (Albany) Debtor's Counsel: Christian H. Dribusch, Esq. WHITEMAN OSTERMAN & HANNA LLP One Commerce Plaza Albany, NY 12260 Tel: (518) 487-7600 Fax: (518) 487-7777 E-mail: cdribusch@woh.com Scheduled Assets: $3,500,002 Scheduled Debts: $1,282,130 The Company�s list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nynb11-12959.pdf The petition was signed by Karen S. Howard, director/president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Karen S. Howard 11-11478 05/11/11 EDUCATE INC: Moody's Affirms 'B3' Corporate Family Rating --------------------------------------------------------- Moody's Investors Service affirmed Educate, Inc.'s B3 corporate family rating and probability of default rating. Moody's also affirmed the B3 rating on the senior secured term loan. The ratings outlook was revised to negative from stable. Ratings affirmed: Corporate family rating at B3; Probability of default rating at B3; $74 million second lien term loan due 2014 at B3 (LGD3, 44%). RATINGS RATIONALE The outlook revision reflects soft enrollment trends, which continue to constrain Educate's operating performance. While EBITDA only modestly declined for the first half of 2011 relative to the same period in 2010, the leverage covenant that governs the term loan progressively tightens over the next twelve months. As such, Moody's is concerned over the company's ability to maintain compliance with this ratio. Moody's views Educate's liquidity profile as weak not only because of potential covenant issues, but also because it continues to operate without a revolving credit facility. However, the company expects to close on a new revolving credit facility in the short-term. The B3 corporate family rating reflects Educate's small scale, the challenging operating environment, soft revenue trends, and the competitiveness of the pre-kindergarten through 12th-grade tutoring business, both from corporate providers and individual teachers. The rating is supported by credit metrics that are good for the ratings category, the company's repositioning as a franchise model, substantial brand value, as well as high operating margins and low maintenance capital expenditures. The negative outlook reflects Moody's concern over Educate's ability to maintain compliance with the financial covenant governing the term loan. The ratings could be downgraded if operating performance remains weak and/or if Educate is unable to timely address any potential covenant issues. Moody's could revise Educate's ratings outlook to stable if it improves its operating performance, closes on a new revolving credit facility, and enhances covenant cushion. The principal methodology used in rating Educate, Inc. was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. 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 Baltimore, Maryland, Educate, Inc. is an education services company for students ranging from pre kindergarten through high school. The company's provides customized supplemental, remedial and enrichment programs in reading, writing and mathematics under the Sylvan Learning Centers brand. ENERGY AND POWER: Seeks Chapter 11 Protection --------------------------------------------- Dow Jones' DBR Small Cap reports that Energy and Power Solutions Inc., which helps companies like Avon and Kraft Foods reduce their energy use, sought Chapter 11 bankruptcy protection. EVERGREEN SOLAR: Taps Hilco Industrial as Exclusive Sales Agent --------------------------------------------------------------- BankruptcyData.com reports that Evergreen Solar filed with the U.S. Bankruptcy Court a supplemental motion to retain Hilco Industrial (Contact: Joseph A. Malfitano) as exclusive marketing and sales agent for the sale of certain of the Debtors' assets for 5% of the gross proceeds or 6% to the extent that there is a corporate banker involved. About Evergreen Solar Evergreen Solar, Inc. -- http://www.evergreensolar.com/-- develops, manufactures and markets String Ribbon solar power products using its proprietary, low-cost silicon wafer technology. The Company's patented wafer manufacturing technology uses significantly less polysilicon than conventional processes. Evergreen Solar's products provide reliable and environmentally clean electric power for residential and commercial applications globally. The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge Mary F. Walrath. The Company's balance sheet at April 2, 2011, showed $373,972,000 in assets, $455,506,000 in total liabilities, and a stockholders' deficit of $81,534,000. Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham McCutchen LLP, serve as general bankruptcy counsel to the Debtor. Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as co-counsel. Zolfo Cooper LLC is the financial advisor. Epiq Bankruptcy Solutions has been tapped as claims agent. In conjunction with the Chapter 11 filing, the Company entered into a restructuring support agreement with certain holders of more than 70% of the outstanding principal amount of the Company's 13% convertible senior secured notes. As part of the bankruptcy process the Company will undertake a marketing process and will permit all parties to bid on its assets, as a whole or in groups pursuant to 11 U.S.C. Sec. 363. An entity formed by the supporting noteholders, ES Purchaser, LLC, entered into an asset purchase agreement with the Company to serve as a "stalking-horse" and provide a "credit-bid" pursuant to the Bankruptcy Code for assets being sold. The supporting noteholders are represented by Michael S. Stainer, Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York. An official committee of unsecured creditors has been appointed in the case. The panel has tapped Pepper Hamilton as Delaware counsel and Kramer Levin Naftalis & Frankel as counsel. FAIRMOUNT MINERALS: S&P Puts 'BB-' CCR on Watch Positive -------------------------------------------------------- Standard & Poor's Ratings Services said all of its ratings on Fairmount Minerals Ltd., including the 'BB-' corporate credit rating, are on CreditWatch with positive implications. The CreditWatch listing indicates a one-in-two likelihood that Standard & Poor's will upgrade the company after review. "The positive CreditWatch listing reflects our expectation that the frac sand producer's operating performance this year will be better than we previously expected," said Standard & Poor's credit analyst Maurice Austin. This is in large part due to robust natural gas shale drilling creating solid frac sand demand; the company's capacity expansions also contribute, given the tight supply for sand used in oil and gas drilling. "In resolving the CreditWatch listing, we will evaluate the company's prospects for sustaining its recent operating performance. We will also consider the company's financial and operating strategies, financial policies, and our outlook for market conditions," Mr. Austin continued. Standard & Poor's expects to resolve the CreditWatch within the next 90 days. Any upgrade would likely be limited to one notch. FIRST CAROLINA: Stockholders Approve Liquidation Plan ----------------------------------------------------- citybizlist reports that according to a regulatory filing, at a meeting of stockholders of First Carolina Investors, Inc. held on Sept. 21, 2011, stockholders considered the proposal recommended by the Board of Directors of the Company to liquidate and dissolve the Company, pursuant to a Plan of Distribution and Liquidation. According to citybizlist, a majority of the Company's stockholders approved and adopted the Liquidation and the Plan. Accordingly, the Company will proceed with the Plan as described in the proxy materials presented at the stockholder meeting. Effective immediately, citybizlist relates, the Company will not engage in any further business activities, except to wind up its business, transfer its cash assets to stockholders and a liquidating trust, and convert its portfolio securities to cash for ultimate distribution to stockholders. The Trust will be established on or about Oct. 7, 2011. The Company, says citybizlist, expects to make an initial liquidating distribution of cash to stockholders and to the Trust no later than Dec. 31, 2011. The Board of Directors anticipates that these distributions to stockholders and the Trust will be made simultaneously, citybizlist adds. First Carolina Investors, Inc. is a close-ended business trust. The firm invests in the public equity and fixed income markets of the United States. It makes its investments in the securities of companies operating across diversified sectors. The firm primarily invests in common and preferred stocks and debentures. First Carolina Investors was founded in 1971 and is based in Fort Mill, South Carolina. GALP WATERS: Does Not Consent to Debtors' Use of Cash Collateral ---------------------------------------------------------------- Ballinteer, LLC, has advised the U.S. Bankruptcy Court for the Southern District of Texas and all parties-in-interest of its non consent to GALP Highcross Limited Partnership and GALP Waters Limited Partnership's use of any of its cash collateral, and requests that the Debtors immediately segregate and account for all of its cash collateral. Counsel for Ballinteer, LLC, may be reached at: John Quinlan, Esq. 12500 Dunlap Houston, TX 77035 Tel: (713) 729-9975 Fax: (773) 729-9465 E-mail: quinlanjo@aol.com Houston, Texas-based GALP Waters Limited Partnership, aka Gallery at Champions Apartments, filed for Chapter 11 bankruptcy (Bankr. S.D. Tex. Case No. 11-36743) on Aug. 2, 2011. Affiliate GALP Highcross Limited Partnership filed a separate petition (Case No. 11-36741) on the same day. Matthew Hoffman, Esq., at the Law Offices Of Matthew Hoffman, P.C., in Houston, represents the Debtor in its restructuring effort. In its schedules, GALP Waters Limited Partnership disclosed $15,933,583 in assets and $15,193,950 in liabilities. The petitions were signed by Gary M. Gray, president of Waters-1 GP, Inc., general partner of Waters GP, L.P., general partner. GATEWAY METRO: Wants to Hire Skeehan & Company as Accountant ------------------------------------------------------------ Gateway Metro Center, LLC, asks the U.S. Bankruptcy Court for the Central District of California for permission to employ Skeehan & Company, a professional corporation as its accountant. Skeehan will provide accounting and tax preparation services to the Debtor including: 1. monthly closing of books, reconciliation of accounts, journal entries and financial statement preparation; 2. preparation of annual tax returns, including k-1 schedules for each of the members of the Debtor; and 3. monthly management meeting with Joseph Skeehan to review all financial statements. Prepetition, Skeehan has received compensation of $3,600 for quarterly accounting services, $2,750 for annual tax preparation services and $2,000 for site visits. Skeehan has not received any retainer for its services in the case. Pursuant to the Fixed Price Agreement, the Debtor agrees to pay Skeehan these fixed fees: 1) $900 per quarter for accounting services, with the first payment due at the end of October and continuing each quarter until final disposition of the chapter 11 case; 2) $2,750 for annual tax preparation services; and 3) $1,100 per bi-annual site visit to the Debtor's property manager in connection with tax preparation services. The Fixed Price Agreement also includes ongoing access to Skeehan for accounting, tax and business advice and unlimited consultation and phone and fax support regarding accounting assistance. In the event the Debtor requires accounting or tax services beyond the scope of the Fixed Price Agreement, including, for instance, services related to a tax audit, Skeehan has agreed to perform additional work at a mutually agreed upon price before the service is provided. To the extent the additional fees exceed $750 for any individual service or $2500 per quarter in the aggregate, the Debtor will file with the Bankruptcy Court written notice of the proposed additional fees. To the best of the Debtor's knowledge, Skeehan is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. About Gateway Metro Center 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) on Sept. 6, 2011. Judge Barry Russell presides over the case. Howard J. Weg, Esq., and Lorie A. Ball, Esq. -- hweg@pwkllp.com and lball@pwkllp.com -- at Peitzman, Weg & Kempinsky LLP, in Los Angeles, California, represent the Debtors. In its schedules, the Debtor disclosed $32,570,485 in assets and $22,338,135 in debts. The petition was signed by John F. Pipia, its president. GATEWAY METRO: Wants to Hire FTI Consulting as Financial Advisors ----------------------------------------------------------------- Gateway Metro Center, LLC, asks the U.S. Bankruptcy Court for the Central District of California for permission to employ FTI Consulting, Inc., together with its wholly-owned subsidiaries, agents and independent contractors as financial advisors. FTI Consulting will, among other things: -- assist with information and analyses required pursuant to the Debtor's proposed debtor-in-possession financing including preparation for hearings regarding the use of cash collateral and DIP financing; -- assist with the identification and implementation of short- term cash management procedures; and -- assist with the identification of executory contracts and leases and performance of cost/benefit evaluations with respect to the affirmation or rejection of each. FTI received a prepetition retainer of $46,672. In addition, as of Sept. 6, 2011, the date on which the Debtor filed its bankruptcy petition, FTI had rendered and been paid for financial advisory services and incurred expenses in connection with the Debtor in the amount of $120,874. FTI is informed that a portion of the retainer and prepetition amounts paid were advanced to the Debtor by Flying Tigers, LLC, an affiliate of the Debtor. The funds were advanced as a loan by Flying Tigers to the Debtor, and FTI does not have any client relationship with Flying Tigers. The Debtor related that FTI has agreed to reduce its hourly rate to a maximum of $725 per hour through the end of 2011. The hourly rates of FTI's personnel are: Senior Managing Directors $780 - $895 Directors and Managing Directors $560 - $745 Consultants and Senior Consultants $280 - $530 Administrative and Paraprofessionals $115 - $230 To the best of the Debtor's knowledge, FTI is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. About Gateway Metro Center 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) on Sept. 6, 2011. Judge Barry Russell presides over the case. Howard J. Weg, Esq., and Lorie A. Ball, Esq. -- hweg@pwkllp.com and lball@pwkllp.com -- at Peitzman, Weg & Kempinsky LLP, in Los Angeles, California, represent the Debtors. In its schedules, the Debtor scheduled $32,570,485 in assets and $22,338,135 in debts. The petition was signed by John F. Pipia, its president. GATEWAY METRO: Taps Colliers International as Leasing Broker ------------------------------------------------------------ Gateway Metro Center, LLC, asks the U.S. Bankruptcy Court for the Central District of California for permission to employ Colliers International, Inc., as leasing broker. The Debtor has two primary assets (1) a 121,462 square foot, 11 story office building and land located in the City of Pasadena, California, including the rights to develop further the land on which Gateway Metro Center is located, and (2) an 8,000 square foot parcel of land immediately abutting the office building. The Debtor relates that it has used Colliers as its primary leasing broker for over two years and Colliers is familiar with the property and the relevant leasing market. Colliers will receive these commissions: 1) in the event that no other broker is involved in procuring the new tenant, a commission calculated at 4.0% of the total base rent for up to 60 months in which base rent is to be paid; 2.0% of the total base rent for up to the next 60 months in which base rent is to be paid, plus 1.0% of the total base rent for the remainder of the term; and 2) in the event that another broker assists in finding a new tenant, a commission calculated at 6% of the total base rent for up to the first 60 months in which base rent is to be paid; 3% of the total base rental for up to the next 60 months in which base rent is to be paid, plus 1.5% of the total base rental for the remainder of the term. Pursuant to the Agreement, if another broker assists in procuring a new tenant, Colliers is authorized to share its Commission with other brokers in any manner acceptable to Colliers and such other brokers. The Commission is payable 1/2 upon execution of a lease and 1/2 upon lease commencement and the tenant taking possession of its premises. The Debtor believes that the percentages and timing of the payment of the Commissions are standard within the industry and the amount of the Commission is an acceptable rate for a broker with commensurate experience leasing property. Shadd Walker, senior vice president of Colliers, assures the Court that the firm is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. About Gateway Metro Center 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) on Sept. 6, 2011. Judge Barry Russell presides over the case. Howard J. Weg, Esq., and Lorie A. Ball, Esq. -- hweg@pwkllp.com and lball@pwkllp.com -- at Peitzman, Weg & Kempinsky LLP, in Los Angeles, California, represent the Debtors. In its schedules, the Debtor scheduled $32,570,485 in assets and $22,338,135 in debts. The petition was signed by John F. Pipia, its president. GRAND LAKE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Grand Lake Podiatry, Inc. 1222 Irmscher Boulevard Celina, OH 45822 Bankruptcy Case No.: 11-35140 Chapter 11 Petition Date: September 22, 2011 Court: U.S. Bankruptcy Court Northern District of Ohio (Toledo) Judge: Richard L. Speer Debtor's Counsel: Steven L. Diller, Esq. DILLER & RICE, LLC 124 E. Main Street Van Wert, OH 45891 Tel: (419) 238-5025 E-mail: sdiller@dillerandricellc.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company�s list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ohnb11-35140.pdf The petition was signed by Mary K. Swonger, owner. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Mary K. Swonger 11-34571 08/23/11 GULF OFFSHORE: Moody's Withdraws 'Caa2' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service withdrew the Caa2 Corporate Family Rating for Gulf Offshore Logistics Holdings LLC along with the B3 rating assigned to the proposed $75 million of second lien floating rate notes and the Caa3 rating assigned to the proposed $35 million third lien term B notes. The proposed note offerings as initially structured are no longer being marketed. No other debt of the company is currently rated. The principal methodology used in rating Gulf Offshore Logistics LLC was Moody's Global Oilfield Services Industry rating methodology published in December 2009. Gulf Offshore Logistics, LLC is headquartered in Mathews, Louisiana. H&S JOURNAL: Court Approves Stipulation for Use of Cash Collateral ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York has approved the stipulation between CA 912-921 Bergen Avenue, LLC, and H&S Journal Square Associates, LLC, on the use of CA's cash collateral, preserving the prepetition status quo specifically authorizing and empowering first Oritani Bank (CA's predecessor in interest), and then CA in its own right, to collect and disburse rents derived from the Debtor's Journal Square Property. As stipulated, payments will be made directly to Oritani Bank, now as servicer for CA, which funds, when collected, will be disbursed and/or applied by CA and/or Oritani on account of the sums due under the Loan Documents including non-default interest, taxes, and other charges and expenses that may be budgeted as agreed by the parties. A copy of the stipulation and consent order for use of cash collateral is available for free at: http://bankrupt.com/misc/h&s.stipulationandconsentorder.pdf As reported in the TCR on Aug. 10, 2011, CA 912-921 Bergen Avenue, LLC, successor to the position of Oritani Bank through its acquisition of Oritani's interest in the loan and loan documents of H&S Journal Square Associates LLC, asked the Bankruptcy Court to enter an order approving the stipulation between the H&S and CA concerning the use of CA's cash collateral generated from the Debtor's property located at 912-921 Bergen Avenue, Jersey City, N.J. and Journal Square, Jersey City, N.J. Pursuant to the stipulation, CA will generate a report reflecting rents collected and received and how these were applied on a monthly basis beginning with rents collected for the month of April 2011. Other than the taxes, insurance and budgeted carrying costs that it will be paying out of collected rents, CA will not be required to incur or fund any other expense on behalf of the Debtor. As partial adequate protection to CA for the Debtor's use of CA's cash collateral, CA may apply the rents collected to interest on its claim at the non-default rate. Additionally, CA is granted first and senior replacement liens in all post-petition leases, rents, issues, profits and proceeds, arising from the CA Collateral and in all the cash collateral from the CA Collateral on and after the Petition Date. About H&S Journal Square Associates Based in Jersey City, New Jersey, H&S Journal Square Associates LLC is the owner of a property at 912-921 Bergen Avenue, Jersey City, New Jersey, the mortgage of which is held by CA 912-924 Bergen Avenue LLC, as successor to Oritani Savings Bank. The Property consists of 59,500 square feet in three contiguous, 3 story mixed-use buildings occupying an entire block front in the heart of Journal Square, a busy commercial and transportation hub in Jersey City. The Company filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 11-11623) on April 6, 2011. Kevin J. Nash, Esq., at Goldberg Weprin Finkel Goldstein LLP, in New York; and David S. Catuogno, Esq., at Forman Holt Eliades & Ravin, LLC, in Paramus, N.J., represent the Debtor. The Debtor disclosed $20,799,032 in assets, and $18,944,510 in debts. HOTEL AIRPORT: Court Approves Francisco Molina as Accountant ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Puerto Rico authorized Hotel Airport Inc. to employ Francisco J. Garrido Molina CPA to provide accounting services, including, but not limited to, preparing tax returns, financial projections, auditing, and other tasks. Mr. Molina will charge a flat rate of $2,050 ($1,400 + $650) per month, with a $50 monthly increment for every five additional employees that debtor adds to its payroll. Mr. Molina will bill $125 per hour for additional services. The Debtor assured the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Hotel Airport Hotel Airport Inc., in San Juan, Puerto Rico, filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 11-06620) on Aug. 5, 2011. Judge Enrique S. Lamoutte Inclan oversees the case. Edgardo Munoz, PSC, serves as bankruptcy counsel. The Debtor disclosed $8,547,993 in assets and $171,169,392 in liabilities as of the Chapter 11 filing. The petition was signed by David Tirri, its president. HOTEL AIRPORT: Court Approves Edgard Munoz as Bankruptcy Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Puerto Rico authorized Hotel Airport Inc. to employ Edgardo Munoz PSC as counsel. Upon retention, the firm, will, among other things: a) advise the Debtor with respect to its duties, powers, and responsibilities in this case under the laws of the United States and Puerto Rico in which debtor-in-possession conducts its operations, b) advise the Debtor in connection with determination on whether reorganization is feasible and if not, helping the Debtor in the orderly liquidation of assets, and c) prepare on behalf of the Debtor the necessary complaints, answers, orders, reports, memoranda of law and any other legal paper or document required in the case. To the best of the Debtor's knowledge, Edgardo Munoz and his firm are disinterested persons within the meaning of 11 U.S.C. Sec. 101. The firm has received a retainer in the amount of $10,000 plus the additional sum of $1,039 to cover filing fees, which sums were paid by the Debtor from funds generated from the operations of its business. An additional sum of $10,000 has been agreed to and will be distributed upon proper notice and hearing, and after court authorization required, and will be held as additional retainer to be credited with the final application for compensation to be submitted under 11 U.S.C. Sec. 330. Professional services will be charged at the rate of $280 per hour plus costs and expenses. About Hotel Airport Hotel Airport Inc., in San Juan, Puerto Rico, filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 11-06620) on Aug. 5, 2011. Judge Enrique S. Lamoutte Inclan oversees the case. Edgardo Munoz, PSC, serves as bankruptcy counsel. The Debtor disclosed $8,547,993 in assets and $171,169,392 in liabilities. The petition was signed by David Tirri, its president. HOTEL AIRPORT: Lizarribar-Masini Okayed as P.R. Ports Counsel ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Puerto Rico authorized Hotel Airport Inc. to employ the law firm Lizarribar Masini Law Office as counsel to properly conduct the Debtor's affairs and comply with its duties and in relation to ongoing litigation with Puerto Rico Ports Authority. Upon retention, the firm will, among other things: a. represent debtor in all matters regarding the Puerto Rico Ports Authority; b. perform such other legal services for the Debtor as may be required in this proceeding or in connection with the operation of the Debtor's business; c. employ other professional services, if necessary. The firm will charge the Debtor $150 dollars per hour plus costs as per monthly invoices. The hourly rates are subject to change to account for ordinary increases of the rates, but subject to prior notice thereof. About Hotel Airport Hotel Airport Inc., in San Juan, Puerto Rico, filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 11-06620) on Aug. 5, 2011. Judge Enrique S. Lamoutte Inclan oversees the case. Edgardo Munoz, PSC, serves as bankruptcy counsel. The Debtor disclosed $8,547,993 in assets and $171,169,392 in liabilities. The petition was signed by David Tirri, its president. IMUA BLUEHENS: Access to Cash Collateral Expires Sept. 30 --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Hawaii, on Sept. 7, 2011, entered a third interim order authorizing Imua Bluhens, LLC, authorization to use cash collateral of GCCF 2007-GG11 Ka Uka Boulevard, LLC, and the Department of Taxation, State of Hawaii, until the earliest of (i) the close of business on Sept. 30, 2011, or (ii) the conclusion of the next continued hearing on cash collateral or final hearing, subject to the termination provisions of the third interim order. The Debtor may use cash collateral to pay only the ordinary and reasonable expenses of operating its businesses which are necessary to avoid immediate and irreparable harm and the quarterly fees payable to the United States Trustee, pursuant to a budget. The Debtor is not permitted to pay any professional fees, including attorneys fees from cash collateral. As reported in the TCR on Sept. 2, 2011, as of the Petition Date, the Debtor is indebted to Noteholder in the original loan amount of $10,250,000, including accrued and unaccrued interest, costs and fees, secured by a first priority mortgage and an assignment of rents and leases against the Debtor's property located at 94 1201 Ka Uka Boulevard, Waipahu, Hawaii, being a shopping center commonly known as Laniakea Plaza. The Department claims a junior statutory liens against all of the Debtor's property, pursuant to a Certificate of Tax Lien at the Bureau of Conveyances, State of Hawaii dated Dec. 14, 2010. According to the cash collateral order, as adequate protection: (a) Debtor will pay the Noteholder the amount of $30,000 per month from postpetition rents, until further order of the Court. (b) The Noteholder and the Department are granted replacement liens in all of the Debtor's accounts created from and after the Petition Date and all of the Debtor's right, title and interest under their prepetition collateral. (c) Subject only to a carve-out, if any, the secured loan obligations are granted and entitled to status as an administrative expense claim pursuant to Section 507(b) of the Bankruptcy Code. About Imua Bluehens Honolulu, Hawaii-based Imua Bluehens, LLC, owns the Laniakea Plaza, a commercial retail operation. Imua Bluehens filed for Chapter 11 bankruptcy (Bankr. D. Hawaii Case No. 11-01721) on June 17, 2011. Judge Robert J. Faris presides over the case. The petition was signed by James K. Kai, manager. Jerrold K. Guben, Esq., and Jeffery S. Flores, Esq., at O'Connor Playdon & Guben LLP, in Honolulu, Hawaii, represent the Debtor as counsel. In its amended schedules, the Debtor disclosed $12,169,600 in assets and $16,864,405 in liabilities. No official committee of unsecured creditors or other statutory committee has been formed. INNER CITY MEDIA: Wants to Employ GCG as Administrative Agent ------------------------------------------------------------- Inner City Media Corporation and its debtor-affiliates ask the court for authority to employ GCG, Inc., as administrative agent nunc pro tunc to the Petition Date. The Debtors seek to retain GCG to provide, among other things, these bankruptcy administrative services: (a) Create and maintain a publicly-accessible case administration website, www.gcginc.com/cases/icbc, containing information about the Debtors, these cases, and their restructuring, including but not limited to the posting of a claim register, key pleadings, scheduled hearings, and press releases; (b) Host a toll-free telephone hotline, (888) 579-1193, that provides information regarding the cases; (c) To the extent necessary, assist with the preparation and filing of the Debtors' schedules of assets and liabilities and statement of financial affairs; (d) Respond to creditor inquiries via telephone, letter, e- mail or facsimile, as appropriate; (e) Generate and provide claim reports and claim objection exhibits, as requested by the Debtors and their professionals; (f) Manage the preparation, compilation, and mailing of documents to creditors and other parties in interest in connection with the solicitation of a chapter 11 plan; (g) Manage the publication of legal notices, as requested; (h) Collect and tabulate votes in connection with any Plan filed by the Debtors and provide ballot reports to the Debtors and their professionals; (i) Generate an official ballot certification and testify, if necessary, in support of the ballot tabulation results; and (j) Manage any distributions made pursuant to a confirmed Plan. The Debtors will pay GCG according to its standard hourly rates, which currently are $170 to $250 for senior management; $106 to $148 for project managers, and $38 to $93 for administrative and clerical staff. GCG has received an initial retainer of $25,000 from the Debtors and will apply any unused portion of that retainer first against all Prepetition Date fees and expenses and then against the first application for fees and expenses that GCG will submit in these cases. Craig S. Johnson, GCG's senior director, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. 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. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. INNER CITY MEDIA: Taps Rothschild as Financial Advisor ------------------------------------------------------ Inner City Media Corporation and its debtor-affiliates ask the bankruptcy court for authority to employ Rothschild, Inc. as financial advisor and investment banker nunc pro tunc to the Petition Date. Rothschild will: (a) identify or initiate potential transactions; (b) review and analyze the business plans and financial projections prepared by the Debtors including, but not limited to, testing assumptions and comparing those assumptions to historical Debtor and industry trends; (c) evaluate the Debtors' debt capacity in light of their projected cash flows and assist in the determination of an appropriate capital structure for the Debtors; (d) assist the Debtors in soliciting financing to the extent the Debtors require incremental financing and/or refinancing capital; (e) assist the Debtors and their other professionals in reviewing the terms of any proposed Transaction or other transaction, in responding thereto and, if directed, in evaluating alternative proposals for a Transaction; (f) determine a range of values for the Debtors and any securities that the Debtors offer or propose to offer in connection with a Transaction; (g) advise the Debtors on the risks and benefits of considering a Transaction with respect to the Debtors' intermediate and long-term business prospects and strategic alternatives to maximize the business enterprise value of the Debtors; (h) solicit proposals and review and analyze any proposals the Debtors receive from third parties in connection with a Transaction or other transaction, including, without limitation, any proposals for debtor-in-possession financing, as appropriate; (1) assist or participate in negotiations with the parties in interest, including, without limitation, any current or prospective creditors of, holders of equity in, or claimants against the Debtors or their respective representatives in connection with a Transaction or other transaction; (j) advise the Debtors with respect to, and attend, meetings of the Debtors' Board of Directors, creditor groups, official constituencies and other interested parties, as necessary; (k) if requested by the Debtors, participate in hearings before this Court and provide relevant testimony with respect to issues arising in connection with any proposed Plan; and (1) render (to the extent permitted by further orders of this Court) such other financial advisory and investment banking services as may be agreed upon by Rothschild and the Debtors. The Debtors will pay Rothschild according to this fee structure: (a) Monthly Fees: Whether or not a Transaction is proposed or consummated, an advisory fee of $150,000 per month, provided, however, that beginning after the four-month anniversary of this Agreement, 50% of any and all future Monthly Fees paid by the Debtors will be credited against the Completion Fee. (b) Completion Fee: The Engagement Letter provided for a fee of $2,500,000, payable immediately upon the earlier of (i) the confirmation and effectiveness of a Plan and (ii) the closing of another Transaction. (c) New Capital Fee: A new capital fee equal to (i) 1.0% of the face amount of any senior secured debt raised including, without limitation, any debtor-in-possession financing raised; (ii) 2.0% of the face amount of any junior secured debt raised; (iii) 3.0% of the face amount of any senior or subordinated unsecured debt raised and (iv) 4.0% of any equity capital, or capital convertible into equity, raised, including, without limitation, equity underlying any warrants, purchase rights and similar contingent equity securities. The New Capital Fee shall be payable upon the closing of the transaction by which the new capital is committed. The New Capital Fee shall be payable only to the extent it is raised from a source that is outside of the Company's current capital structure, including without limitation, Inner City Broadcasting Corporation or any of its affiliates. (d) Reimbursement of Expenses: In addition to the Fees, regardless of whether any Transaction occurs, the Debtors will promptly reimburse Rothschild for its reasonable expenses incurred in connection with the performance of its engagement, and the enforcement of this Agreement, including, without limitation, the reasonable fees, disbursements and other charges of Rothschild's counsel. Reasonable expenses also include, but are not limited to, expenses incurred in connection with travel and lodging, data processing and communication charges, research and courier services. (e) Fee Cap: The aggregate amount of Fees will not exceed $4,000,000. Neil A. Augustine, a senior managing director at Rothschild, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Inner City In August 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. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. INNER CITY MEDIA: Taps Akin Gump as Bankruptcy Counsel ------------------------------------------------------ Inner City Media Corporation and its Debtor affiliates ask the court for authority to employ Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to the Petition Date. The Debtors propose to employ Akin Gump to render these professional services: a. advise the Debtors with respect to their powers and duties as debtors in possession in the continued operation of their business and the management of their properties; b. advise the Debtors and take all necessary or appropriate actions at the Debtors' direction with respect to protecting and preserving the Debtors' estates, including the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; c. draft all necessary or appropriate motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates on behalf of the Debtors; d. represent the Debtors in negotiations with all other creditors, equity holders, and other parties in interest, including governmental authorities; e. take all necessary or appropriate actions in connection with any plan of reorganization or liquidation and related disclosure statement and all related documents, and such further actions as may be required in connection with the administration of the Debtors' estates; and f. perform and advise the Debtors (as applicable) as to all other necessary legal services in connection with the Chapter 11 cases, including, without limitation, any general corporate legal services. Akin Gump will be paid by the Debtors at its standard hourly rates which currently are: $500 to $1,200 for partners; $415 to $850 for counsel; $335 to $625 for associates; and $125 to $310 for paraprofessionals. Ira S. Dizengoff, Esq., a member of Akin Gump, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Inner City In August 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. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. INNER CITY MEDIA: Employs Garden City Group as Claims Agent ----------------------------------------------------------- Inner City Media Corporation and its debtor-affiliates sought and obtained authority from the court to employ GCG, Inc. as claims agent nunc pro tunc to the Petition Date. As claims agent, GCG will: a. notify all potential creditors of the filing of the bankruptcy petitions and of the setting of the date for the first meeting of creditors pursuant to section 341(a) of the Bankruptcy Code, under the proper provisions of the Bankruptcy Code and the Bankruptcy Rules; b. maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs, listing the Debtors' known creditors and the amounts owed thereto; c. notify all potential creditors of the existence and amount of its respective claims as evidenced by the Debtors' books and records and as set forth in the Schedules; d. furnish a notice of the last date for the filing of proofs of claim and a form for the filing of a proof of claim, after such notice and form are approved by the Court; e. maintain a post office box for the purpose of receiving claims; f. print, copy, and serve (by mail, overnight courier, facsimile, e-mail, or otherwise) on the appropriate creditors and parties in interest any and all relevant notices, motions, orders and other pleadings; g. for all notices, file with the Clerk an affidavit or certificate of service which includes a copy of the notice, a list of persons to whom it was mailed, and the date mailed, within seven days of service; h. docket all claims received by the Clerk's office, maintain the official claims register for the Debtors on behalf of the Clerk, and, upon the Clerk's request, provide the Clerk with a certified duplicate, unofficial Claims Register; i. specify, in the Claims Register, the following information for each claim docketed: (i) the claim number assigned, (ii) the date received, (iii) the name and address of the claimant and agent, if applicable, who filed the claim, and (iv) the classification(s) of the claim (e.g., secured, unsecured, priority); j. implement necessary security measures to ensure the completeness and integrity of the Claims Register and the safekeeping of the original claims; k. record all transfers of claims and provide any notices of the transfers as required by Bankruptcy Rule 3001(e); l. relocate, by messenger or overnight courier, all of the court-filed proofs of claim to the offices of GCG, not less than weekly or as agreed to by the Clerk; m. upon completion of the docketing process for all claims received to date for each case, turn over to the Clerk copies of the claims register for the Clerk's review; n. make changes in the Claims Register pursuant to Court Order; o. maintain the official mailing list for the Debtors of all entities that have filed a proof of claim, which list shall be available upon request by a party-in-interest or the Clerk; p. if a case is converted to chapter 7, contact the Clerk's Office within seven days of the entry of the order converting the case; q. 30 days prior to the close of the Chapter 11 cases, arrange to have submitted to the Court a proposed Order dismissing the notice and claims agent and terminating the services of the agent upon completion of its duties and responsibilities and upon the closing of these Cases; r. file with the Court the final version of the claims register immediately before the close of these Cases; and s. at the close of the Chapter 11 cases, box and transport all original documents, in proper format, as provided by the Clerk's Office, to the Federal Archives Record Administration, located at Central Plains Region, 200 Space Center Drive, Lee's Summit, Missouri 64064. GCG has received an initial $25,000 retainer from the Debtors for its services and will apply same first against all prepetition fees and expenses and then against the last bill for fees and expenses that GCG will incur in these Cases. Craig S. Johnson, GCG's senior director, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Inner City In August 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. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. J.C. EVANS: Can Obtain $2.5MM of Financing from Safeco ------------------------------------------------------ The Hon. Craig A. Gargotta of the U.S. Bankruptcy Court for the Western District of Texas authorized JCE Delaware, Inc., et al., to: a) use cash collateral received from Safeco contracts for which Safeco issued surety bonds which funds will be held by Liberty Mutual Insurance Company of America or Safeco Insurance Company in a segregated account under an approved budget with adequate protection; b) obtain final postpetition financing from Safeco in a committed amount of up to $2,500,000 until Oct. 31, 2011, with Safeco having the ability, but not the requirement, to fund up to a total of $5,000,000 in its sole discretion; c) secure the postpetition DIP loan funds advanced by Safeco, to grant Safeco liens on and security interests in all of Debtors' owned and after acquired real and personal property to secure Debtors' obligations to Safeco; d) secure the postpetition DIP loan funds advanced by Safeco, to grant Safeco, with respect to the property and assets of the Debtors, an administrative superpriority claim; e) use cash collateral upon which First State Bank of Central Texas claims a first priority security and to grant replacement liens, as adequate protection, to First State Bank for the diminution in value of such cash collateral in the same validity, priority and extent to which First State Bank liens possessed prepetition; Safeco and Debtors have reached terms by which Safeco will agree to continue limited financial support until Oct. 31, 2011, by providing a committed Debtor-in- Possession loan of up to $2,500,000 subject to the terms in the Memorandum of Understanding. The Debtor's' principal creditors include: (a) Safeco, for claims for prepetition payments made to or on behalf of the Debtors in connection with Safeco Bonded Contracts and for prepetition secured loans for which it claims a security interest in all assets of the Debtors; (b) unsecured trade creditors, including creditors on contracts for which there are no surety bonds; and (c) First State Bank, which claims a first priority secured interest in virtually all of the assets of the Debtor, with the exception of the Safeco Bonded Contracts. The Debtors' real estate consists of a 700 acre quarry in Williamson County and approximately 28 acres in and around the Debtors' operating facility in Leander, Texas, Williamson County. The value of these real estate assets are believed by the Debtors to far exceed the aggregate amounts owed to the Bank. The Bank also has lien claims on certain heavy equipment that includes equipment where the Bank has a first lien on equipment with a value of over $5 million and a second lien on equipment with a value over and above the pari passu lien treatment. The Debtors will use the funds to complete existing construction contracts and operate the quarry. The Debtors will use the $5 million from the Bonding Company to pay any shortfalls in the costs of completing the existing construction projects and operating the Debtors. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant: a. Cash Collateral Adequate Assurance: postpetition replacement liens on the accounts receivables generated from postpetition collections of receivables, and continuation of prepetition liens with the same effect, priority and security as existed prepetition. b. DIP Financing Loan: (i) superpriority administrative claim for amount of DIP loan advances; (ii) lien on unencumbered assets and junior lien on all other assets; (iii) lien on real estate assets as to which the Bank has a first lien, on a pari passu basis with the Bank. The Court also ordered that by Oct. 15, 2011, the Debtors will file and serve a new 30-day budget for the period Nov. 1, to Nov. 30, upon First State Bank, the Committee, Safeco and the U.S. Trustee. If no objection is filed within 5 days of service, the final order will continue on the same terms and conditions through Nov. 30, but in accordance with the new budget. If an objection to any proposed budget is filed, the Court will set a hearing to approve same on an expedited bases. Previously, the Hon. Craig A. Gargotta granted First State Bank's motion to reconsider interim order granting the Debtors' motion for interim and final permission to use cash collateral and obtain DIP financing, and denied the Debtors the relief requested under section 364(d). First State Bank explained that (1) the Debtors offered insufficient evidence to satisfy the elements required to obtain relief; and (2) the Court erroneously applied the elements of section 364(d) of the Bankruptcy Code. First State Bank is represented by: Shad Robinson, Esq. Blake Rasner, Esq. HALEY & OLSON, P.C. 510 North Valley Mills Drive, Suite 600 Waco, TX 76710 Tel: (254) 776-3336 Fax: (254) 776-6823 E-mail: srobinson@haleyolson.com brasner@haleyolson.com 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. Butler Burgher Group LLC will provide real estate appraisal services with regard to the valuation of the Debtors' headquarters and warehouse properties, consisting of 28 acres near Leander, Texas. In its petition, JC Evans disclosed $51,543,030 in assets and $74,203,554 in liabilities as of the Chapter 11 filing. A creditors' committee has been appointed by the U.S. Trustee. J.C. EVANS: Hires Cox Smith as Bankruptcy Counsel --------------------------------------------------- JCE Delaware, Inc., has been authorized by the U.S. Bankruptcy Court for the Western District of Texas to employ Cox Smith Matthews Incorporated as counsel effective as of the Petition Date. The primary attorneys and paralegal who will represent the Debtors and their hourly rates are: Mark E. Andrews, shareholder $425 George Tarpley, shareholder $425 M. Jermaine Watson, associate $340 Aaron M. Kaufman, associate $315 Stephen K. Lecholop II, associate $235 Deborah E. Andreacchi, paralegal $180 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. JAMES DONNAN: Widow Challenges Proposal to Pay $5Mln. to Creditors ------------------------------------------------------------------ Lee Shearer at OnlineAthens reports that a federal judge has set Oct. 4, 2011, to hear an Athens widow's request to intervene in the intertwined bankruptcy cases of former UGA football coach Jim Donnan and an Ohio liquidation company, GLC. According to the report, Mr. Donnan and his wife also face a hearing on a federal bankruptcy trustee's motion to convert the couples' bankruptcy petition from Chapter 11 to liquidation under Chapter 7. The report says both the trustee and lawyers for the widow, Valerie Fennell, have challenged Donnan's proposal to pay more than $5 million to creditors of GLC, which also has filed for bankruptcy. The proposal settlement unfairly favors GLC over other creditors, say the trustee and lawyers for Valerie Fennell. The report recounts Mr. Donnan persuaded her late husband, Stephen Fennell, to invest $450,000 in GLC to buy inventory at the company at a time when Fennell was dying of leukemia and unable to make sound financial decisions, the lawyers said. According to Mr. Fennell's lawyers, investors put $81.9 million into GLC. The company only purchased about $11.8 million in inventory. Mr. Fennell's lawyers assert that Donnan knew the money was not going into inventory, but instead was being used to pay off earlier investors. The report notes a trustee appointed to oversee GLC as it undergoes bankruptcy sued the Donnans to recover some of the money they took out of the company when GLC was under the management of founder-owners Greg and Linda Crabtree. About James Donnan James "Jim" Donnan, III is a former University of Georgia football coach and ex-ESPN college football analyst. Dnonan and his wife, Mary, filed a Chapter 11 petition (Bankr. M.D. Ga. Case No. 11-31083) on July 1, 2011. The filing came after Mr. Donnan offered to pay back creditors roughly $5 million. The creditors wanted $8.25 million from the Donnans. About GLC Limited Proctorville, Ohio-based GLC Limited is a retail liquidation company in the wholesale/retail distribution industry. It offers large selections of name brand products in many categories. It distributes its goods through a network of wholesale distributors, retail chains and discount and surplus centers. It owns four warehouses for its goods which are located in Proctorville and Columbus, Ohio and Huntington, West Virginia. GLC filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ohio Case No. 11-11090) on Feb. 28, 2011. James R. Burritt, chief restructuring officer, signed the Chapter 11 petition. The Debtor disclosed $18,231,434 in assets and $28,095,356 in liabilities as of the Chapter 11 filing. Ronald E. Gold, Esq., and Joseph B. Wells, Esq., at Frost Brown Todd LLC, serve as the Debtor's bankruptcy counsel. James R. Burritt is the Chief Restructuring Officer and Leon C. Ebbert, PC, CPA, has been tapped as accountants. The Official Committee of Unsecured Creditors in GLC Limited's Chapter 11 bankruptcy case has tapped Morris, Manning & Martin, LLP, as counsel. JEFFERSON, AL: Lawmakers at Odds on Plan to Avoid Bankruptcy ------------------------------------------------------------ American Bankruptcy Institute reports that Alabama legislators' opposition to higher sewer rates and new taxes could kill a preliminary deal to keep the state's most populous county from filing the biggest municipal bankruptcy in American history. 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. JEFFREY HOULIK: Santander Consumer USA Slapped With $25T Sanction ----------------------------------------------------------------- Jeffrey and Charla Houlik filed their motion for an order to show cause "why stay violation should not be entered," after Santander Consumer USA, Inc., caused Mr. Houlik's work truck to be repossessed in December 2010. The Houliks also asked that the truck be returned to them and that they recover their damages and attorney's fees. Santander succeeded the Houliks' original lender, CitiFinancial Auto Ltd., as the servicer of the truck loan. The loan had been addressed and restructured in the Houliks' confirmed chapter 11 plan. After the plan was confirmed, Citi assigned the servicing of its claim to Santander in September 2010. The Houliks made all post-confirmation payments until Santander repossessed the truck at 9:30 p.m. on Dec. 27, 2010, after a confrontation at the Houliks' home in which Santander's repossession agent, Darryl Johnson, pushed Mr. Houlik away from the truck and denied him access to its contents and keys in the course of taking it. Mr. Houlik said he lost work opportunities while his truck was gone. In a Sept. 25, 2011 Memorandum Opinion, Chief Bankruptcy Judge Robert E. Nugent held that Santander willfully violated the discharge under the Houliks' plan by refusing to credit plan payments to their account and relying on a default they created or imagined, to wrongfully repossess their truck, causing them damages and exposing them to attorney's fees and expenses. This conduct violates 11 U.S.C. Sec. 524(a)(2) and 524(i) and constitutes civil contempt of the Court. Judge Nugent said the Debtors have been damaged by Santander for $474.86. Judge Nugent also said the Debtors are entitled to recover their reasonable attorney's fees and expenses incurred. Finally, in view of Santander's unexplained and clear disregard for and disrespect of the Court's orders, and in an effort to discourage Santander from such future conduct in this jurisdiction, the Court granted a punitive sanction of $25,000 that may either be paid to the Debtors or credited to the Houliks' obligation to Santander under the plan. A copy of the Court's decision is available at http://is.gd/lVx2QI from Leagle.com. Jeffrey P. Houlik and Charla L. Houlik filed for Chapter 11 bankruptcy (Bankr. D. Kan. Case No. 09-12159) in July 2009. They filed a chapter 11 plan that October, in which they proposed to allow Citi's secured claim in the amount of $17,305 and to repay that amount in monthly payments of $343. Citi did not object to the plan and it was confirmed on Dec. 29, 2009. KLOSTERMAN DEVELOPMENT: Case Summary & Creditors List ----------------------------------------------------- Debtor: Klosterman Development Corp. 4696 Street, Route 127 Celina, OH 45822 Bankruptcy Case No.: 11-35180 Chapter 11 Petition Date: September 23, 2011 Court: U.S. Bankruptcy Court Northern District of Ohio (Toledo) Judge: Mary Ann Whipple Debtor's Counsel: Steven L. Diller, Esq. DILLER & RICE, LLC 124 E. Main Street Van Wert, OH 45891 Tel: (419) 238-5025 E-mail: sdiller@dillerandricellc.com Estimated Assets: $50,001 to $100,000 Estimated Debts: $1,000,001 to $10,000,000 The Company�s list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ohnb11-35180.pdf The petition was signed by Steven R. Klosterman, president. LACK'S STORES: Hearing for Cash Collateral Access Set for Today --------------------------------------------------------------- Lack's Stores, Incorporated and its affiliated debtor entities ask the U.S. Bankruptcy Court for the Southern District of Texas for authorization to use the alleged cash collateral of The CIT Group/Business Credit, Inc., as agent, and the senior lenders. The Debtors request access to the cash collateral until Feb. 3, 2012. The Debtors set a hearing today, Sept. 28, 2011, at 2:30 p.m., to consider their request for cash collateral use. As reported in the Troubled Company Reporter on June 16, 2011, prepetition, Lack's Stores entered into a Second Amended and Restated Loan and Security Agreement dated as of July 10, 2007, with The CIT Group/Business Credit, Inc., as agent, and the other lenders from time to time party thereto. The Senior Credit Agreement, with a stated maturity date of Oct. 31, 2010, is a revolving credit facility. As of the Petition Date, the aggregate principal amount of advances outstanding under the Senior Credit Agreement was approximately $86,600,000, having been gradually reduced from $105,000,000 since January of 2009. The Debtors estimate the outstanding principal loan balance will be approximately $21,000,000 as of Sept. 30, 2011 (a reduction of over 75% since the Petition Date). The Senior Lenders allege that the obligations under the Senior Credit Agreement are secured by a lien on substantially all of the Debtors' assets, excluding certain real estate. The Senior Lenders do not have dominion over the Debtors' bank accounts. The Debtors would use the cash collateral to continue the orderly administration of the estates, including the collection of customer notes in the ordinary course of business. The Debtors propose to adequately protect the alleged interest of the agent and the Senior Lenders in their alleged prepetition collateral in a number of ways: -- the Senior Lenders are grossly oversecured (with an estimated collateral coverage ratio of over 3:1 as of Sept. 30, 2011) and they hold a sizeable equity cushion in their alleged collateral; -- the Debtors propose to grant the agent for the benefit of the Senior Lenders replacement liens upon all assets in which the agent for the benefit of the Senior Lenders held a validly perfected lien as of the Petition Date; and -- the Debtors will continue to provide the agent and the Senior Lenders with ample information relating to projected revenues and expenses, actual revenue and expenses, variances from the budget, and pending real estate sales. About Lack's Stores Victoria, Texas-based Lack's Stores, Incorporated, is one of the largest, independently-owned retail furniture chains in the United States. Lack's Stores is a chain of 36 retail stores and operates under the trade styles Lacks and Lacks Home Furnishings. The Company sells a complete line of furnishings for the home including furniture, bedding, major appliances and home electronics. The stores are located in South, Central, and West Texas. Lack's Stores filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 10-60149) on Nov. 16, 2010 . Katherine D. Grissel, Esq., Michaela Christine Crocker, Esq., and Richard H. London, Esq., at Vinson & Elkins LLP, assist the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $100 million to $500 million. Affiliates Lack Properties, Inc., Lack's Furniture Centers, Inc., and Merchandise Acceptance Corporation filed separate Chapter 11 petitions. LAZY FIVE: Case Summary & Largest Unsecured Creditor ---------------------------------------------------- Debtor: Lazy Five Company P.O. Box 1566 Reno, NV 89505 Bankruptcy Case No.: 11-52998 Chapter 11 Petition Date: September 22, 2011 Court: U.S. Bankruptcy Court District of Nevada (Reno) Judge: Bruce T. Beesley Debtor's Counsel: Stephen R. Harris, Esq. BELDING, HARRIS & PETRONI, LTD 417 W. Plumb Lane Reno, NV 89509 Tel: (775) 786-7600 Fax: (775) 786-7764 E-mail: steve@renolaw.biz Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by L. David Kiley, president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Kiley Ranch Communities 10-53393 08/26/10 The Company�s list of unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank Branch & Trust Company Guaranty on Loans $42,000,000 c/o Timothy A. Lukas, Esq. HOLLAND & HART LLP 5441 Kietzke Lane, 2nd Floor Reno, NV 89511 LEHMAN BROTHERS: Inks Plan Voting Deals With HK Units, Others ------------------------------------------------------------- Lehman Brothers Holdings Inc. entered into an agreement which calls for the reclassification of claims of Hong Kong-based Lehman units for purposes of voting on its proposed Chapter 11 plan. The Hong Kong-based Lehman units hold more than 200 secured claims against LBHI and its affiliated debtors. They previously agreed to vote their claims to accept the proposed plan pursuant to a July 31 settlement they reached with LBHI. Pursuant to the agreement dated September 21, 2011, the claims will be reclassified to the unsecured class and will be provisionally allowed for purposes of voting on the plan. A full-text copy of the agreement is available without charge at http://bankrupt.com/misc/LBHI_StipHKLehmanVoting.pdf The Hong Kong-based Lehman units are Lehman Brothers Asia Holdings Ltd., Lehman Brothers Asia Ltd., Lehman Brothers Futures Asia Ltd., Lehman Brothers Securities Asia Ltd., LBQ Hong Kong Funding Ltd., Lehman Brothers Nominees (H.K.) Ltd., Lehman Brothers Asia Capital Company, Lehman Brothers Commercial Corporation Asia Ltd., and Lehman Brothers Equity Finance (Cayman) Ltd. LBHI also entered into a deal with Danske Bank A/S London Branch and with a group of claimants composed by former Lehman employees. The agreement between the company and Danske Bank requires them to follow a timetable for filing motions for temporary allowance of claims, and for serving objections to claims to determine the creditors qualified to vote on the plan. A copy of the agreement is available without charge at: http://bankrupt.com/misc/LBHI_StipDanskeVoting.pdf LBHI's agreement with former employees calls for the provisional allowance of their claims for purposes of voting on the plan. The employees are represented by California-based law firm, Wendel Rosen Black & Dean LLP. All the agreements are subject to approval by the U.S. Bankruptcy Court for the Southern District of New York. In a related development, Judge James Peck approved an agreement between LBHI and Mizuho Corporate Bank Ltd., which requires the company to send an individual ballot to each lender identified by the bank. Mizuho is lead arranger and agent in a seven-year credit agreement for $JPY35 billion LBHI entered into in May 2007. 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. Judge James Peck on Aug. 30, 2011, approved the disclosure statement, which outlines the major provisions of Lehman's $65 billion liquidation plan. The proposed plan would enable LBHI and its affiliated debtors to pay an estimated $65 billion to their creditors. Voting on the Plan ends on Nov. 4, 2011. A hearing to consider confirmation of the Plan is set for Dec. 6, 2011. 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: Drops Appeal of Ruling in Suit Over 2008 Sale -------------------------------------------------------------- Lehman Brothers Holdings Inc. dropped its attempt to recover $11 billion from the sale of its North American broker-dealer business from Barclays Plc. LBHI said it will drop an appeal contesting a bankruptcy judge's ruling that Barclays owed the company nothing, according to a September 21, 2011 report by Bloomberg News. The company said it is cognizant of the burdens that continued litigation would place on the court and assets of the estate. "We have determined that we will not pursue these issues through appeals, believing that the resources of the court and the estate will be better employed at this point to move the bankruptcy toward a conclusion," LBHI said in a statement. LBHI and the Official Committee of Unsecured Creditors appealed on July 28, 2011, a ruling by the U.S. Bankruptcy Court for the Southern District of New York, which denied their motions to overturn its order approving the 2008 sale. Both accused Barclays of receiving possibly $12 billion in excess assets that were never disclosed when it bought the broker-dealer business. An investigation conducted by LBHI showed that the deal was actually structured to give Barclays "immediate and enormous windfall profit." The Creditors' Committee also dropped its appeal of the bankruptcy court's ruling, Bloomberg News reported. Barclays' lawyer, Jonathan Schiller, Esq., at Boies Schiller & Flexner LLP, in New York, said the case against Lehman was strong from the beginning, Dow Jones Newswires reported. "We established in discovery that there should never have been a trial. It's tens of millions of dollars wasted by the estate," Dow Jones Newswires quoted Mr. Schiller as saying. Meanwhile, in an e-mail to Bloomberg News, Mr. Schiller said: "The Lehman estate wasted tens of millions of dollars in a flawed and inappropriate effort to re-trade the terms of the Barclays sale and wrongfully challenged that fact that, as the court correctly found, Barclays took a massive risk in acquiring Lehman's business." Nancy Rapoport, a bankruptcy-law professor at the University of Nevada, Las Vegas, said companies using litigation to raise money have to make sure the odds of succeeding remain decent, Bloomberg reported. "Once the odds fall below a certain point, it's important for the lawyers and the client to consider dropping the litigation," she said. In another development, LBHI also said it won't appeal a recent decision by Judge James Peck that Barclays should not have to pay the company for employee bonuses, Dow Jones Newswires reported. Judge Peck said in a September 14 ruling that LBHI no longer has liabilities to the employees for bonuses and has not suffered damages. LBHI previously demanded payment of approximately $500 million in damages for Barclays' alleged failure to pay the company in full when the U.K. bank bought its North American business. Barclays allegedly paid only $1.5 billion of the $2 billion it was supposed to pay for the bonuses of Lehman employees who were transferred to the U.K. bank as part of the deal. 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. Judge James Peck on Aug. 30, 2011, approved the disclosure statement, which outlines the major provisions of Lehman's $65 billion liquidation plan. The proposed plan would enable LBHI and its affiliated debtors to pay an estimated $65 billion to their creditors. Voting on the Plan ends on Nov. 4, 2011. A hearing to consider confirmation of the Plan is set for Dec. 6, 2011. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins Court Nod of $692MM MetLife Settlement ------------------------------------------------------------ Lehman Brothers Holdings Inc. and Lehman Commercial Paper Inc. obtained court approval to revise the terms of the settlement they entered into with Metropolitan Life Insurance Company. The Lehman units revised the terms of the deal to change the allocation of proceeds from the liquidation of the collateral securing the repayment of notes issued by two securitization trusts to MetLife. The notes were issued in exchange for up to $500 million loan to each trust. Under the deal, LCPI would receive the first $471 million of proceeds from the liquidation of the collateral as reimbursement for the payments it made for the notes. LBHI would then receive the next $221 million of proceeds as payment for the claims held by the company against the trusts on account of the cash collateral it posted. LCPI is also entitled to receive residual proceeds above the $692 million of aggregate proceeds on account of its ownership of certificates issued by the trusts. 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. Judge James Peck on Aug. 30, 2011, approved the disclosure statement, which outlines the major provisions of Lehman's $65 billion liquidation plan. The proposed plan would enable LBHI and its affiliated debtors to pay an estimated $65 billion to their creditors. Voting on the Plan ends on Nov. 4, 2011. A hearing to consider confirmation of the Plan is set for Dec. 6, 2011. 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: U.S. Bank, et al., Appeal on ADR Order Denied -------------------------------------------------------------- The U.S. District Court for the Southern District of New York dismissed for "lack of jurisdiction" the appeal filed by U.S. Bank National Association and a group of noteholders from a bankruptcy judge's March 3, 2011 order. Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York issued the order authorizing Lehman Brothers Holdings Inc. and its affiliated debtors to implement an alternative dispute resolution process to settle their claims under derivatives contracts with special purpose vehicles. As reported in the April 14, 2011 edition of the TCR, U.S. Bank and a group of noteholders led by a certain Siu Lui Ching filed with the U.S. District Court for the Southern District of New York a statement of issues in connection with their appeal from a bankruptcy judge's March 3, 2011 order. Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York issued the order authorizing Lehman Brothers Holdings Inc. and its affiliated debtors to implement an alternative dispute resolution process to settle their claims under derivatives contracts with special purpose vehicles. In their statement, U.S. Bank and the noteholders group raised, among other things, the issues of whether or not the Bankruptcy Court erred by: ��(1) requiring an SPV derivatives counterparty to identify and ��designate by written notice a person with authority to ��negotiate all disputed amounts and issues on behalf of the ��SPV derivatives counterparty, and allow for the imposition ��of sanctions by the Bankruptcy Court for the failure to ��designate an authorized designee; ��(2) requiring an SPV derivatives counterparty or an SPV ��trustee to incur costs; ��(3) requiring an SPV derivatives counterparty or an SPV ��trustee to provide notice to holders of notes or ��certificates using methods not required or contemplated by ��relevant governing documents; and ��(4) failing to require the Debtors to provide the SPV ��derivatives counterparty and the SPV trustees any ��information they have or may acquire with respect to the ��identities of the beneficial holders of notes, ��certificates or other economic interests in the affected ��transaction. ��(5) holding that the noteholders group's objection to the ��March 3 order was untimely. 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 Says Swap Deal Allows $260MM Set-Off ---------------------------------------------------------- As reported in the Sept. 14, 2011 edition of the TCR, Citigroup Inc. is asking Judge James 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. 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 In a reply brief, Citibank, N.A., and certain of its affiliates tell the United States Bankruptcy Court for the Southern District of New York that the LBI Trustee devotes only eight pages of his 97-page opposition brief to Citibank's motion for authorization to exercise setoffs based on the "swap agreement" safe harbors of the Bankruptcy Code and other statutory and common law rights. After speculating as to Citibank's motivation in seeking stay relief, the LBI Trustee urges the Court to reject the requested relief wholesale, asserts Stephen J. Shimshak, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York. A closer reading of the LBI Trustee's opposition, however, reveals that apart from niggling over a few of the numbers, the LBI Trustee does not assert any genuine basis for opposing most of the relief that Citibank seeks in its Motion, Mr. Shimshak contends. He notes that the LBI Trustee's objections to the setoffs proposed in the Motion largely rest on a perceived lack of mutuality. The plain language of the "swap agreement" safe harbors, though, requires enforcement of Citibank's contractual rights, whether involving cross-affiliate "setoffs" or setoffs against post- Filing Date deposits, notwithstanding any potentially conflicting provision of the Bankruptcy Code, Mr. Shimshak argues. The LBI Trustee tries to turn his opposition to Citibank's stay relief motion into a motion to compel immediate turnover of the post- Filing Date deposits -- relief that, pursuant to Rule 7001(1) of the Federal Rules of Bankruptcy Procedure, the LBI Trustee is already seeking in his adversary proceeding, Mr. Shimshak alleges. The LBI Trustee's duplicative demand is procedurally deficient, and should be denied on that basis alone, Mr. Shimshak tells Judge Peck. 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) LION COPOLYMER: S&P Withdraws Prelim. 'B+' Corp. Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services withdrew all its ratings on Lion Copolymer Holdings LLC, including the 'B+' preliminary corporate credit rating, at the company's request. With trailing-12-month sales of about $590 million, Baton Rouge, La.-based Lion Copolymer Holdings LLC produces synthetic rubbers including ethylene propylene diene monomer (EPDM) and emulsion styrene-butadiene-rubber (ESBR). LOS ANGELES DODGERS: MLB Urges Delaware Judges to Sell Team ----------------------------------------------------------- Mirosport News reports that Major League Baseball, led by Commissioner Bud Selig, has asked a Delaware bankruptcy judge to order Frank McCourt, the current owner of the franchise, to sell the team and clear the way for new ownership. According to the report, the league's position is that Mr. McCourt is trying to use his Chapter 11 status in order to do as he pleases in an effort to fix his personal financial woes. The last straw was when Mr. McCourt tried auctioning off the television rights to Dodgers telecasts from the 2014 season on. The report notes that normally, that would not be an issue, as teams can attempt to secure local deals, only in this case, Mr. McCourt is doing it without league approval. The report says the Dodgers could be booted from the league if he was successful in selling the rights, as the league would have that option, then rendering the rights useless, as there would be nothing to broadcast. Attorneys for the league released the following statement on the issue: "Indeed, no one will pay the debtors to broadcast Dodgers games if the club is not part of Major League Baseball. Consequently, the debtor's path in this case is a dead end or worse." The statement went on to address the fact that a sale and emergence of the franchise from bankruptcy would be the best option for all parties, McCourt included: "Mr. McCourt will likely receive hundreds of millions of dollars from the surplus, which will be available to solve his personal financial problems and leave him a very wealthy man (without continued harm to the team)." The report relates that MLB has gone on to say that the proposed auctioning of television rights would be a breach of contract from the deal that Mr. McCourt has made already with Fox, and would open up the Dodgers and the league to serious legal issues over that breach. A hearing on the Dodgers' motion for the auction procedure and baseball's counter filing against Mr. McCourt and the Dodgers organization is expected to be held on Oct. 12. Until that point, expect the barbs to continue and the stupidity to reach new levels never before seen, the report says. About the Los Angeles Dodgers Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a professional Major League Baseball club in the Los Angeles metropolitan area. Frank McCourt, a Boston real-estate developer who unsuccessfully bid for the Boston Red Sox, bought the Dodgers from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for $330 million. Mr. McCourt also bought the Dodgers Stadium from Fox for $100 million. Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB Commissioner Bud Selig rejected a television deal with News Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for June 30 and July 1. Fox Sports has exclusive cable television rights for Dodgers games until the end of 2013 baseball season. Chapter 11 filings were also made for LA Real Estate LLC, an affiliated entity which owns Dodger Stadium, and three other related holding companies. The petition estimates assets of up to $500 million and debts of up to $1 billion. In its schedules, the LA Dodgers baseball club listed $77,963,734 in assets and $4,695,702 in liabilities. LA Real Estate LLC listed $161,761,883 in assets and $0 in liabilities. According to Forbes, the team is worth about $800 million, making it the third most valuable baseball team after the New York Yankees and the Boston Red Sox. Judge Kevin Gross presides over the case. Lawyers at Young, Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Public relations specialist Kekst and Company has been hired for crisis support. Covington & Burling LLP serves as special counsel. An official committee of unsecured creditors has been appointed in the case. The panel has tapped Lazard Freres & Co. as financial adviser and investment banker, and Morrison & Foerster LLP and Pinckney, Harris & Weidinger, LLC as counsel. Ticket holders are seeking the appointment of their own committee. The LA Dodgers is the 12th sports team in North America to have sought bankruptcy protection, according to The Wall Street Journal. The reorganization is being financed with a $150 million unsecured loan from the Commissioner of Major League Baseball. The loan gives the Commissioner few of the controls lenders often demanded from bankrupt companies. LOS ANGELES DODGERS: MLB Wants to Eject Bankruptcy Counsel ---------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that Major League Baseball asked a Delaware bankruptcy judge Friday to bar the two law firms representing the Los Angeles Dodgers -- Dewey & LeBoeuf LLP and Young Conaway Stargatt & Taylor LLP -- from participating in the case, saying they are beholden to owner Frank McCourt and not the team itself. About the Los Angeles Dodgers Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a professional Major League Baseball club in the Los Angeles metropolitan area. Frank McCourt, a Boston real-estate developer who unsuccessfully bid for the Boston Red Sox, bought the Dodgers from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for $330 million. Mr. McCourt also bought the Dodgers Stadium from Fox for $100 million. Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB Commissioner Bud Selig rejected a television deal with News Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for June 30 and July 1. Fox Sports has exclusive cable television rights for Dodgers games until the end of 2013 baseball season. Chapter 11 filings were also made for LA Real Estate LLC, an affiliated entity which owns Dodger Stadium, and three other related holding companies. The petition estimates assets of up to $500 million and debts of up to $1 billion. In its schedules, the LA Dodgers baseball club listed $77,963,734 in assets and $4,695,702 in liabilities. LA Real Estate LLC listed $161,761,883 in assets and $0 in liabilities. According to Forbes, the team is worth about $800 million, making it the third most valuable baseball team after the New York Yankees and the Boston Red Sox. Judge Kevin Gross presides over the case. Lawyers at Young, Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Public relations specialist Kekst and Company has been hired for crisis support. Covington & Burling LLP serves as special counsel. Deloitte & Touche LLP serve as independent auditors. An official committee of unsecured creditors has been appointed in the case. The panel has tapped Lazard Freres & Co. as financial adviser and investment banker, and Morrison & Foerster LLP and Pinckney, Harris & Weidinger, LLC as counsel. Ticket holders are seeking the appointment of their own committee. The LA Dodgers is the 12th sports team in North America to have sought bankruptcy protection, according to The Wall Street Journal. The reorganization is being financed with a $150 million unsecured loan from the Commissioner of Major League Baseball. The loan gives the Commissioner few of the controls lenders often demanded from bankrupt companies. M WAIKIKI: Has Interim Nod to Borrow $1,000,000 from the Trust -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Hawaii has granted M Waikiki LLC authorization to (a) obtain postpetition financing of up to $1,000,000 on an interim basis from The Davidson Family Trust and (b) use cash collateral pursuant to the senior liens of the Indenture Trustee in accord with a budget through Oct. 1, 2011. The Debtor has requested the Court for authorization to borrow up to $2,500,000, on a final basis, from the DIP Lender. All objections to the motion have been withdrawn, reserved, resolved or overruled on the merits by the Bankruptcy Court. The DIP Lender is an investor in as well as a lender to the Debtor. The DIP Lender indirectly holds a majority of the Class A membership interests in the Debtor that it acquired for an investment of $28,000,000. The DIP Lender is also the sole holder of Class C direct membership interests, having provided $80,000,000 in capital contributions for the renovation of the hotel, carrying costs, and operating shortfalls. In addition, the DIP Lender is also a lender to the Debtor pursuant to a promissory note dated Nov. 16, 2010, in the initial amount of $15 million, allegedly secured by liens on substantially all of the Debtor's assets that are junior to senior liens of Wells Fargo Bank, National Association, as Trustee for Nomura CRE CDO Grantor Trust, Series 2007-2. The outstanding balance on the Subordinated Loan, including accrued interest, is currently $18,200,000. Subject to compliance with the terms and conditions of the Credit and this Interim DIP Order, Debtor is authorized to borrow the DIP Loans, during the period from the date of entry of this Interim DIP Order through and including the final hearing on the DIP Credit Facility. The Debtor will only use the proceeds of the DIP Loans for Permissible Uses, including, subject to the Variance, the costs and expenses associated with the operation of the Debtor's business and the conduct of its case, in the amounts and categories of the Debtor's budget delivered to and agreed by the Administrative Agent prior to the entry of this Interim DIP Order. As adequate protection for the use of cash collateral pursuant to the Indenture Trustee's its senior liens, Wells Fargo Bank, National Association is granted a replacement lien upon all unencumbered collateral (except for avoidance actions) to the extent (i) its cash collateral was actually used by the Debtor and (ii) to the extent its cash collateral actually diminishes in value during the period covered by the budget and during any subsequent periods covered by any other orders of the Court approving use of cash collateral, subject only to the Carve-Out. The significant terms of the $2,500,000 DIP Credit Facility are: Borrower : M Waikiki LLC Administrative Agent : The Davidson Group, a Nevada corporation DIP Lender : The Davidson Family Trust DIP Credit Facility : Secured debtor-in-possession term credit family Maximum Loan Amount : $2,500,000 Availability : In two or more draws. Up to $1,000,000 will be immediately available upon entry of the Interim DIP Order. Upon entry of the Final DIP Order, up to an additional $1,500,00 will be available. Term : All obligations will be due on the earlier of six months from the Interim DIP Order Date and (b) the occurrence of a DIP Credit Facility Termination Event. Interest and Fees : 15% p.a. Upon any default, interest will be at the default rate of 20% p.a. Borrower will pay the DIP Credit Facility Costs. Security : Second priority perfected priming interests in all property of the Borrower, junior only to the security interests of Wells Fargo Bank, National Association, as Indenture Trustee, and the Carve Out. DIP Credit Facility Costs : All reasonable costs of the Administrative Agent and the DIP Lender associated with the DIP Credit Facility, including, but not limited to the Administrative Agent's and the DIP Lender's out-of-pocket expenses associated with the transaction, professional fees, recording fees, search fees, and filing fees will be paid by the Borrower. A copy of the Interim DIP Order and the $12,500,000 Loan Term Sheet is available for free at: http://bankrupt.com/misc/mwaikiki.interimdiporder.pdf The Official Committee of Unsecured Creditors opposed the Debtor's motion for postpetition financing. The Committee said, among others, that the Debtor's unsecured creditors will benefit little if at all, and "face the daunting prospect of being primed by an ever increasing DIP Facility that will undoubtedly be required to finance this case even for the short term." A copy of the Committee's opposition to the Debtor's motion is available for free at: http://bankrupt.com/misc/mwaikiki.dktno.103.pdf About M Waikiki M Waikiki owns the Modern Honolulu, a world-class, luxury hotel property located close to Waikiki Beach in Hawaii. The hotel is being managed by Modern Management Services LLC, an affiliate of Aqua Hotels and Resorts. M Waikiki is a Hawaii limited liability company with its principal place of business located in San Diego, California. It is a special purpose entity, having roughly 75 indirect investors, which was formed to acquire the Hotel. The Company filed for Chapter 11 protection (Bankr. D. Hawaii Case No. 11-02371) on Aug. 31, 2011. Judge Robert J. Faris presides over the case. Patrick J. Neligan, Esq., and James P. Muenker, Esq., at Neligan Foley, LLP, in Dallas; and Simon Klevansky, Esq., Alika L. Piper, Esq., and Nicole D. Stucki, Esq., at Klevansky Piper, LLP, in Honolulu, Hawaii, represent the Debtor. The Debtor estimated $100 million to $500 million in both assets and debts. Modern Management is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC. Marriott Hotel Services, which used to provide management services, is represented by Susan Tius, Esq., at Rush Moore LLP LLP, and Carren B. Shulman, Esq., at Sheppard Mullin Richter & Hampton LLP. The Official Committee of Unsecured Creditors retained Wagner Choi & Verbrugge as its counsel. MACCO PROPERTIES: Grubb & Ellis OK'd as Listing Broker/Realtor -------------------------------------------------------------- The Hon. Niles Jackson of the Bankruptcy Court for the Western District of Oklahoma authorized Michael E. Deeba, Chapter 11 trustee for Macco Properties, Inc.'s estate to retain Grubb & Ellis/Martens Commercial Group LLC, to act as the exclusive listing broker/realtor for properties. Grubb & Ellis will be responsible for these properties: (i) Southeast Village Apartments; (ii) Madison Park Apartments; (iii) Chalet Apartments; and (iv) Parkwood Apartments. All of the properties are located in Wichita, Kansas. Grubb & Ellis will: a) evaluate the properties of the Debtor's estate; and b) instruct and advise the trustee as to a marketing plan for and the eventual sale of the property of the Debtor's estate; to the best of the trustee's knowledge, Grubb & Ellis is a "disinterested person" as that term is defined by Section 101(14) of the Bankruptcy Code. The trustee is represented by: Janice D. Loyd, Esq. James H. Bellingham, Esq. BELLINGHAM & LOYD, P.C. 620 North Robinson, Suite 207 Oklahoma City, OK 73102 Tel: (405)235-9371 Fax: (405)232-1003 E-mail: jdltrustee@bellinghamloyd.com jbellingham@bellinghamloyd.com About Macco Properties Oklahoma City, Oklahoma-based Macco Properties, Inc., is a property management company that is the sole or controlling member and/or manager of numerous multi-family residential rental units in Oklahoma City, Oklahoma, Wichita, Kansas, and Dallas, Texas, and several and commercial business properties in Oklahoma City, Oklahoma, and Holbrook, Arizona. The Company filed for Chapter 11 bankruptcy protection (Bankr. W.D. Okla. Case No. 10-16682) on Nov. 2, 2010. G. Rudy Hiersche, Jr., Esq., at the Hiersche Law Firm, serves as the Debtor's bankruptcy counsel. The Debtor disclosed $50,823,581 in total assets, and $4,323,034 in total liabilities. The Official Unsecured Creditors' Committee is represented by Ruston C. Welch, at Welch Law Firm, P.C., in Oklahoma City, Oklahoma. MACCO PROPERTIES: Creditors Have Until Nov. 30 to File Claims ------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Oklahoma set Nov. 30, 2011, as deadline for creditors of Macco Properties Inc. to file proofs of claim. About Macco Properties Oklahoma City, Oklahoma-based Macco Properties, Inc., is a property management company that is the sole or controlling member and/or manager of numerous multi-family residential rental units in Oklahoma City, Oklahoma, Wichita, Kansas, and Dallas, Texas, and several and commercial business properties in Oklahoma City, Oklahoma, and Holbrook, Arizona. The Company filed for Chapter 11 bankruptcy protection (Bankr. W.D. Okla. Case No. 10-16682) on Nov. 2, 2010. G. Rudy Hiersche, Jr., Esq., at the Hiersche Law Firm, serves as the Debtor's bankruptcy counsel. The Debtor disclosed $50,823,581 in total assets, and $4,323,034 in total liabilities. The Official Unsecured Creditors' Committee is represented by Ruston C. Welch, at Welch Law Firm, P.C., in Oklahoma City, Oklahoma. MARITIME COMMUNICATIONS: Wants to Borrow $150,000 from DIP Lender ----------------------------------------------------------------- Maritime Communications/Land Mobile, LLC, asks the U.S. Bankruptcy Court for the District of New Jersey for authorization to borrow up to $150,000 from Southeastern Commercial Finance, L.L.C., to be secured by a senior lien or equal lien on property of the estate. The Debtor tells the Court that the DIP Loan is necessary to enable it to pay its trade creditors, post-petition operating costs and administrative expenses. The DIP Loan Documents, which are not yet finalized as to all details, contains these significant terms: Loan Amount : $150,000 Maturity Date : The loan will mature on the earliest of: (a) six months after the Closing Date; (b) the date a sale of substantially all the assets of Debtor, pursuant to Section 363 of the Bankruptcy Code, is closed; and (c) the effective date of a plan of reorganization of reorganization, which is confirmed by the Bankruptcy Court. Interest Rate : Prime Rate (as reported in the money rates column of the Wall Street Journal) plus 7% payable monthly in arrears. Default Rate : 12% in excess of the Interest Rate. Disbursements : Lender will make disbursements under the Note directly to Borrower's creditors in accordance with a budget. Collateral : All assets of the Borrower of every kind, nature and description, whereever located, whether now owned or hereafter acquired. A copy of the emergency financing motion is available for free at: http://bankrupt.com/misc/maritimecommunications.dktno.28.pdf Maritime Communications/Land Mobile, LLC, owns and operates numerous licenses for wireless and cellular services. Its assets primarily include Federal Communications licenses. The Company filed a Chapter 11 petition, (Bankr. D.N.J. Case No. 11-13463) on Aug. 1, 2011, in Aberdeeen, Mississippi. Craig M. Geno, Esq., at Harris Jernigan & Geno, PLLC, in Ridgeland, Mississippi, serves as counsel to the Debtor. In its schedules, the Debtor disclosed $47,649,673 in assets, and $31,252,752 in liabilities as of the petition date. MARITIME COMMUNICATIONS: Files Schedules of Assets and Debts ------------------------------------------------------------ Maritime Communications/Land Mobile, LLC, filed with the U.S. Bankruptcy Court for the District of New Jersey its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $12,500 B. Personal Property $47,637,173 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $18,790,111 E. Creditors Holding Unsecured Priority Claims $264,642 F. Creditors Holding Unsecured Non-priority Claims $12,197,999 ----------- ----------- TOTAL $47,649,673 $31,252,752 A full-text copy of the Schedules is available for free at: http://bankrupt.com/misc/maritimecommunications.sal.pdf Maritime Communications/Land Mobile, LLC, owns and operates numerous licenses for wireless and cellular services. Its assets primarily include Federal Communications licenses. The Company filed a Chapter 11 petition, (Bankr. D.N.J. Case No. 11-13463) on Aug. 1, 2011, in Aberdeeen, Mississippi. Craig M. Geno, Esq., at Harris Jernigan & Geno, PLLC, in Ridgeland, Mississippi, serves as counsel to the Debtor. In its schedules, the Debtor disclosed $47,649,673 in assets, and $31,252,752 in liabilities as of the petition date. MARQUETTE TRANSPORTATION: S&P Affirms 'B' Corp. Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit rating on Paducah, Ky.�based Marquette Transportation Co. Holdings LLC (Marquette). "At the same time, we affirmed our 'B-' issue-level and '5' recovery ratings on the company's $250 million second-lien notes (one notch below the corporate credit rating). The outlook is stable," S&P stated. "Marquette, which provides towboats that power barges on rivers, is benefitting from modest rate increases and from improving volumes, particularly from the shipment of coal and grain, which are experiencing a modest pickup in volumes due to a strong export market," said Standard & Poor's credit analyst Funmi Afonja. "This has resulted in higher vessel utilization and better operating efficiency, contributing to improved profitability, despite a weak U.S. economic outlook. On Aug. 17, 2011, Marquette announced that it had entered into an agreement with Cargill Inc. to acquire the fleet of Alter Barge Line Inc. Under the agreement, Cargill and Marquette will acquire Alter's 387 river barges and six towboats. The companies expect to close the transaction by the end of September. We believe that, over the next year, Marquette will maintain its financial profile, despite incremental debt to fund fleet expansion due to momentum from the export market, stable revenues arising from a large proportion of its fleet operating under long-term charter coverage, and long-lasting relationships with key customers, several of which we rate investment grade." The ratings on Marquette reflect its highly leveraged financial profile, participation in the highly competitive and capital intensive shipping industry, and exposure to cyclical demand swings in certain end markets. The ratings also reflect the potential for high customer concentration to negatively affect earnings, and the company's vulnerability to weather-related disruptions in business operations. Positive credit factors include Marquette's leading market position, albeit in a niche business segment, as an independent provider of towboat operations in intra-U.S. shipping; relatively stable revenues under fixed rate, long-term contracts; and competitive barriers to entry under the Jones Act. The Jones Act requires that U.S.-built vessels be registered in the U.S. and crewed with U.S. citizens to carry shipments between U.S. ports. These requirements limit competition by excluding foreign-flagged vessels. Marquette's entire fleet is Jones Act-qualified. "We categorize Marquette's business risk profile as 'weak,' its financial risk profile as 'highly leveraged,' and liquidity as "adequate." Marquette does not publicly disclose financial information," S&P stated. Various cyclical swings in demand and weather-related disruptions can affect Marquette's operating performance. Marquette's fixed rate, long-term contracts, which make up slightly less than half of revenues, provide relatively stable revenues and mitigate some of these risks. The substantial majority of revenues and earnings are from the towboat service business, where the rates are less volatile than freight rates in the drybulk barge transportation business, which accounts for a modest portion of revenues. "The stable outlook reflects our expectations that the company will maintain its financial profile, benefiting from modest volume and pricing gains from the export market despite incremental debt to finance fleet expansion," Ms. Afonja continued. "If export market conditions weaken, or the company suffers the loss of a major customer or faces other operating challenges causing debt to EBITDA to move above 7x or EBITDA interest coverage to consistently fall below 1.5x, we could lower the ratings. Although less likely, we could raise the ratings if earnings and credit metrics strengthen as a result of reduced debt or earnings growth, causing debt to EBITDA fall below 4x or EBITDA interest coverage to approach 3x." MCG CAPITAL: Fitch Cuts Long-Term Issuer Default Rating to 'BB' -------------------------------------------------------------- Fitch Ratings has downgraded the long-term Issuer Default Rating (IDR) and unsecured debt rating of MCG Capital Corporation (MCG) to 'BB' from 'BB+'. The Rating Outlook has been revised to Stable from Negative. Approximately $8.7 million of unsecured debt is affected by these actions. The rating downgrade reflects MCG's weakened liquidity profile and limited funding flexibility, given reduced borrowing capacity on its credit facilities and a continued inability to access the equity markets for investment capital, as its stock price trades at a meaningful discount to net asset value (NAV). In addition, leverage levels remain stubbornly high, relative to peer business development companies (BDCs), as unrealized depreciation continues to be recognized on some of its larger portfolio company investments. The new rating level does incorporate some recent stability in core operating performance; however, Fitch believes the generation of incremental net interest income is highly dependent upon portfolio repayments and exits and an ability to redeploy proceeds into higher yielding investment opportunities. Furthermore, net interest income generation in second-half 2011 (2H'11) will be hurt by the recognition of restructuring costs. The ratings also reflect elevated non-accrual levels, relative to peers, which continue to be a drag on earnings. Fitch believes MCG's liquidity profile and funding flexibility has weakened with the expiration of the revolving period on its securitization trust in July, which had provided $50 million of funding availability. Investment capital is now limited to repayment proceeds from the existing portfolio, $65.8 million of unrestricted cash on hand at June 30, 2011, $73 million of borrowing capacity on the SunTrust facility, subject to collateral requirements, $41.4 million of SBIC borrowing capacity, with the injection of $25.4 million of equity into the subsidiary, and $32.2 million of SBIC cash. The company is unable to access the equity markets for liquidity as the Sept. 21, 2011 closing stock price of $4.05 compared to a 2Q'11 net asset value (NAV) of $6.93 per share. The reinstatement of dividends in 2010 can also be viewed as a constraint on liquidity. MCG declared a dividend of $0.11 per share on April 29, 2010, its first since May 2008, and has subsequently increased the dividend to $0.17 per share following 1Q'11 earnings, which compared to quarterly distributable net operating income (DNOI) of $0.15 per share in 2Q'11. Fitch views the cumulative DNOI coverage of the dividend payment positively since its reinstatement; however, the shortfall in 2Q'11 does raise concerns about growth in the dividend relative to the cash earnings potential of the company given the current environment and its existing funding profile. Still, cash payments on accrued paid-in-kind dividends were significant in 1H'11 and helped make up for the cash earnings deficit in the quarter. Fitch would not view further dividend increases as positive, until the cash earnings trajectory is well established. Balance sheet leverage, as measured by debt-to-equity, amounted to 0.96x at the end of 2Q11 compared to 0.95x at year-end 2010 (YE10), which is meaningfully above peer ratios. While balance sheet debt has declined 19.7% since YE08, the recognition of additional unrealized depreciation on portfolio company investments continues to reduce the equity base. Total accumulated net unrealized depreciation on the portfolio amounted to $243.2 million at June 30, 2010, compared to $170.3 million at YE09, yielding a 22.3% fair value discount. Still, asset coverage ratios, which exclude $108.6 million of SBIC borrowings, have improved to 232% from 201% at YE08. Non-accrual levels remain elevated at 5.3% on a fair value basis and 13.2% on a cost basis at June 30, 2011, compared to 3.4% and 15.9%, respectively at YE10. These levels are well above peer-BDC averages and more recent improvement has been driven by realized losses on non-accrual investments. The Stable Outlook reflects Fitch's expectation for more consistent core operating performance over the medium term, with includes the redeployment of portfolio cash flows into higher yielding debt investments, modest improvements in non-accrual levels, the maintenance of asset coverage cushions, and a continuation of solid cash earnings dividend coverage. However, Fitch recognizes that restructuring costs in 3Q'11 will yield a current-period cash earnings shortfall. Additional negative rating actions could be driven by further write-downs of portfolio investments and growth in non-accrual levels which yield continued balance sheet volatility, significant declines in balance sheet cash relative to unsecured debt outstanding, an inability to extend the SunTrust facility, or cover dividend payments from cash earnings. In addition, strategic actions which Fitch believes have a negative impact on creditors, including the use of cash for significant share repurchase activity or a decline in the quality of unencumbered assets, while not currently contemplated, could yield negative rating action. Conversely, while positive rating momentum is believed to be limited over the near term, reduced leverage, improved borrowing capacity, a broadening of lender relationships, an ability to access the equity markets for investment capital, a reduction in non-accrual levels, and stability in portfolio valuations could yield positive rating actions over time, as these would likely result in operating income growth and more reliable dividend coverage. Fitch has taken the following rating actions: MCG Capital Corporation -- Long-term IDR downgraded to 'BB' from 'BB+'; -- Senior unsecured debt downgraded to 'BB' from 'BB+'. The Rating Outlook is Stable. MEDICAL SUITES: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Medical Suites C, LLC 2007 Paradise Road Las Vegas, NV 89104 Bankruptcy Case No.: 11-25011 Chapter 11 Petition Date: September 22, 2011 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Steven L. Yarmy, Esq. YARMY & NORRIS CHTD. 520 S. Sixth Street Las Vegas, NV 89101 Tel: (702) 586-3513 Fax: (702) 586-3690 E-mail: sly@stevenyarmylaw.com Scheduled Assets: $2,600,000 Scheduled Debts: $738,765 The Company�s list of its unsecured creditors filed with the petition does not contain any entry. The petition was signed by Kay Rodriguez, managing member. MOUNTAIN CITY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Mountain City Meat Co., Inc. 5905 E. 42nd Avenue Denver, CO 80216 Bankruptcy Case No.: 11-32656 Chapter 11 Petition Date: September 24, 2011 Court: U.S. Bankruptcy Court District of Colorado (Denver) Judge: Michael E. Romero Debtor's Counsel: Daniel J. Garfield, Esq. BROWNSTEIN HYATT FARBER SCHRECK, LLP 410 17th Street, 22nd Floor Denver, CO 80202 Tel: (303) 223-1100 E-mail: dgarfield@bhfs.com - and � Heather Schell, Esq. BROWNSTEIN HYATT FARBER SCHRECK, LLP 410 17th Street, 22nd Floor Denver, CO 80202 Tel: (303) 223-1100 Fax: (303) 223-1111 E-mail: hschell@bhfs.com - and � Michael J. Pankow, Esq. BROWNSTEIN HYATT FARBER SCHRECK, LLP 410 17th Street, 22nd Floor Denver, CO 80202 Tel: (303) 223-1100 Fax: (303) 223-1111 E-mail: mpankow@bhfs.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Alex G. Smith, agent of Alliance Management, chief restructuring officer. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Mountain City Meat Co., Inc. 11-29209 08/11/11 Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Orleans Int. Co. Inc. -- $1,744,721 30600 Northwestern Highway, Suite 300 Farmington Hills, MI 48334 Wolverine Packing Co. -- $843,982 2585 Revard Street Detroit, MI 48207 High Country Meats -- $698,582 5140 Race Court, Unit #8 Denver, CO 80216 Team Packaging Inc. -- $379,593 4744 Forest Street, Unite E Denver, CO 80216 JBS USA, Inc. -- $378,356 1770 Promontory Circle Greeley, CO 80634 XL Meats -- $349,060 5101 � 11 Street SE Calgary, AB T3H 1M7 National Beef Packing Co., LLC -- $290,904 12200 North Ambassador Drive Kansas City, MO 64163-1244 Total Quality Logistics -- $248,086 Beef Products Inc. -- $244,260 Temple-Inland -- $213,782 Air Liquide America Corp. -- $184,110 John R. Morreale, Inc. -- $163,261 Waypoint Logistics, LLC -- $150,791 Ropes & Gray LLP -- $121,506 Quest, LLC -- $118,063 Cargill Food Distribution -- $113,038 Novamark, Inc. -- $109,472 Linde, Inc. -- $107,186 Colorado Meat Packers, Inc. -- $106,166 Terperature -- $101,186 MRA PELICAN: Files Schedules of Assets and Liabilities ------------------------------------------------------ MRA Pelican Pointe Apartments LLC filed with the Bankruptcy Court for the Southern District of Florida its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $12,000,000 B. Personal Property $1,226,852 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $11,756,602 E. Creditors Holding Unsecured Priority Claims $143,262 F. Creditors Holding Unsecured Non-priority Claims $2,909,500 ----------- ----------- TOTAL $13,226,852 $14,809,364 About MRA Pelican Pointe MRA Pelican Pointe Apartments, LLC, owns an apartment complex commonly known as Whispering Isles Apartments in Pompano Beach, Florida. The property was being managed by Aryeh Kieffer of Boca Raton-based Addison Advisors. Pre-bankruptcy, Fannie Mae initiated a foreclosure action against the property in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida. At Fannie Mae's behest, Margaret Smith of Glass Ratner Advisory & Capitol Group LLC was appointed as receiver. The receiver has administered and operated the apartment complex since May 17, 2011. MRA Pelican filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-32457) on Aug. 10, 2011. Addison Advisors' Mr. Kieffer signed the petition. The Debtor is represented by Bradley S. Shraiberg, Esq., at Shraiberg, Ferrara, & Landau P.A. In its schedules, the Debtor listed $12,003,200 in assets and $14,661,009 in debts. Fannie Mae is represented by Gary M. Freedman, Esq., and Mark S. Roher, Esq., at Tabas, Freedman, Soloff, Miller & Brown, P.A. MT. VERNON: Can Access Carrollton Bank's Cash Until Nov. 30 ----------------------------------------------------------- The Hon. David E. Rice of the U.S. Bankruptcy Court for the District of Maryland approved the first stipulation and consent order between Mt. Vernon Properties, LLC, and Carrollton Bank authorizing use of cash collateral and granting adequate Protection. Prior to the Petition Date, the Debtor entered into certain loans with Carrollton Bank as evidenced by certain loan documents. The loans are secured by property located at 902 St. Paul Street, Baltimore, Maryland 21202 and 904 St. Paul Street, Baltimore, Maryland. Carrollton Bank consents to the use of the cash collateral to pay actual and necessary operating expenses of the properties until Nov. 30, 2011. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant Carrollton Bank (i) replacement liens; and (ii) super priority administrative expense claim status, subject to carve out on certain expenses. Carrollton Bank is represented by: Michael C. Bolesta, Esq. GEBHARDT & SMITH LLP One South Street, Suite 2200 Baltimore, MD 21202 Tel: (410) 385-4071 About Mt. Vernon Properties Mt. Vernon Properties, LLC, based in Baltimore, Maryland, is the owner of many parcels of real property located in Baltimore City that the Debtor operates as multi-family rental properties. The Company filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 11-24801) on July 18, 2011. Judge David E. Rice presides over the case. Aryeh E. Stein, Esq., at Meridian Law, LLC, in Baltimore, serves as bankruptcy counsel. The Debtor disclosed $10,237,448 in assets and $15,064,059 in liabilities as of the Chapter 11 filing. The petition was signed by Ronald Persaud, managing member of Mt. Vernon Properties II LLC, the Debtor's sole member. NAKNEK ELECTRIC: Plans to Sell Drilling Rig to Pay Creditors ------------------------------------------------------------ Wesley Loy at Petroleum News reports that Naknek Electric Association, a small Southwest Alaska cooperative, said it intends to sell its drilling rig and pay its unsecured creditors a dime on the dollar. Mr. Loy says that's the upshot of a proposed reorganization plan NEA filed on Sept. 15 in U.S. Bankruptcy Court in Anchorage. While the reorganization plan holds out hope the program can continue -- contingent on federal grants coming through -- it seems the end is nigh for NEA's attempt to find a cheaper way to make power. "Going forward," the report quotes Naknek Electric "will concentrate, again, on the diesel generation of electricity." The reorganization plan is subject to a vote of certain creditors, and a judge's approval. The report says NEA's disclosure statement says costs associated with the well "were substantially greater than had been anticipated." By the Sept. 29, 2010, bankruptcy filing date, NEA "had incurred approximately $40 million of debt that was in one way or another associated with the geothermal project." In the disclosure statement, NEA obtained commitments from federal agencies for about $18 million in grants or awards, but has received less than $3 million in 2008 and 2009. Among the utility's several dozen creditors are the National Rural Utilities Cooperative Finance Corp. and oilfield service company Baker Hughes. Unsecured claims total $28.5 million. The disclosure statement said the utility's diesel power generation property is worth $6.2 million, and the drilling rig is worth about $11 million. NEA bought the National 1320 rig in Eastern Washington in 2009 for $8.5 million, and made $3 million in winterization and other improvements. About Naknek Electric Association Naknek Electric Association, Inc., operates a diesel power generation plant, storage and distribution system on approximately 9.34 acres of land it owns in Naknek, Alaska. It provides electricity to 591 members of the cooperative. It also is developing a geothermal well. Naknek Electric filed for Chapter 11 bankruptcy protection on September 29, 2010 (Bankr. D. Alaska Case No. 10-00824). Erik LeRoy, Esq., at Erik Leroy P.C., assists the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $10 million to $50 million as of the Petition Date. NATIONAL CENTURY: Court Denies Insurance for Execs. Atty. Fees -------------------------------------------------------------- A district court judge in Ohio ruled that Great American Insurance Company was exempt from covering the defense costs of four former executives of National Century Financial Enterprises Inc. Judge James Graham, who oversees the case styled Unencumbered Assets, Trust v. Great American Insurance Co., ruled that Lance Poulsen, Donald Ayers, Roger Faulkenberry and James Dierker are not eligible for coverage under the $5 million insurance policy that NCFE availed for its directors and officers. Citing a provision called "dishonesty exclusion" in the insurance policy, Judge Graham said that Great American was exempt from paying the defense costs of the former executives who were convicted of securities fraud scheme that pushed NCFE to bankruptcy. The "dishonesty exclusion" provision releases the insurance company from liability for loss resulting from deliberate fraudulent or dishonest act. "There is no dispute that the defense costs for which the principals seek coverage directly relate to claims against them that were brought about by their deliberately fraudulent and dishonest conduct," Judge Graham said in his order dated September 16, 2011. "The principals seek defense costs expended in their criminal cases, and the policy plainly relieves Great American from liability for such losses," the federal judge said. The former executives previously challenged Great American's contention that the "dishonesty exclusion" provision prevents them from coverage eligibility, arguing that the criminal convictions are not yet final as appellate review of those convictions has not been exhausted. In his September 16 decision, Judge Graham pointed out that the convictions for securities fraud of Messrs. Ayers, Faulkenberry, and Dierker are already final since the Sixth Circuit has already affirmed their convictions. He further said that the time has lapsed for them to petition for a writ of certiorari from the U.S. Supreme Court. As for Mr. Poulsen, the federal judge said that he still has time to seek review by the Supreme Court. Judge Graham, however, pointed out that the language of the insurance policy makes clear that the type of finality espoused by the executives, which is the exhaustion of appellate review, is not required to trigger the dishonesty exclusion. The September 16 order also excludes the Unencumbered Assets Trust, which was created to pursue legal causes of action belonging to NCFE and its subsidiaries, from the insurance coverage. The UAT earlier admitted that the former executives committed fraud but argued that their wrongdoing should not be imputed to NCFE for purposes of entity coverage. It believes that any payment under the insurance policy should be given to it and not to anyone else. Meanwhile, NCFE's outside directors including Thomas Mendell, Harold Pote and Eric Wilkinson and Mr. Poulsen's wife remain as potential claimants to the insurance policy, and will have until December 31, 2011, to complete discovery, according to the court order. ��About National Century Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. --�http://www.ncfe.com/�--was the largest issuer of medical accounts receivable asset backed securities in the United States before it collapsed in bankruptcy in November 2002 amid allegations of widespread fraud and misappropriation of assets.��To date, 10 senior executives of the company have been convicted or pled guilty to federal charges of conspiracy, securities fraud, wire fraud, and money laundering arising out of the NCFE securitization program. NCFE -- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust -- is in the midst of liquidating estate assets.��The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235).��The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004.��Paul E. Harner, Esq., at Jones Day, represented the Debtors. Bankruptcy Creditors' Service, Inc., publishes NATIONAL CENTURY BANKRUPTCY NEWS.��The newsletter tracks the Chapter 11 proceeding undertaken by National Century Financial Enterprises Inc. and its units.��(http://bankrupt.com/newsstand/�or215/945-7000) NATIONAL CENTURY: MetLife Says Ashland Ruling Has No Impact ----------------------------------------------------------- Metropolitan Life Insurance Company and Lloyds TSB Bank plc ask the court to deny the motion for summary judgment filed by Credit Suisse Securities (USA) LLC and Credit Suisse New York Branch. Brian Condon, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, said the decision in the case Ashland Inc. v. Oppenheimer & Co. has no impact on the claims of MetLife and Lloyds. The Credit Suisse entities previously filed papers with the U.S. District Court for the District of New Jersey discussing the Sixth Circuit decision in the Ashland case in support of their motion for summary judgment. In the Ashland case, the Sixth Circuit affirmed a district court ruling dismissing Ashland's securities fraud claims because of its failure to adequately plead that it reasonably relied on Oppenheimer's alleged misrepresentation or that the defendant acted with scienter. Ashland, which invested in auction-rate securities (ARS), accused Oppenheimer of misrepresenting the safety and liquidity of the ARS market. According to Mr. Condon, MetLife's and Lloyds' claims do not involve "reliance on vague oral assurances." Mr. Condon said that unlike in the Ashland case where the plaintiff made allegations that Oppenheimer issued general statements about auction rate securities, Credit Suisse made "numerous, specific representations" about the quality, performance and structure of the note program that MetLife and Lloyds relied upon. Mr. Condon pointed out that MetLife and Lloyds received and relied upon the offering documents before making each note purchase, which is at issue in their lawsuit against Bank One N.A. "Credit Suisse made specific representations concerning the fundamental operation of [National Century Financial Enterprises Inc.] including with respect to the reserves and credit enhancements that were supposed to be in place to protect investors," Mr. Condon said in court papers. Mr. Condon further argued that the decision in the Ashland case does not preclude the New Jersey court from finding that MetLife and Lloyds have adduced sufficient evidence of Credit Suisse's scienter. According to the lawyer, the plaintiff in the Ashland case did not plead any facts to explain how Oppenheimer had any knowledge that the market for auction rate securities would collapse. On the other hand, the evidence before the New Jersey court shows that several sources provided Credit Suisse with knowledge of the fraud at NCFE long before MetLife and Lloyds invested in the notes, he pointed out. Mr. Condon also criticized Credit Suisse's statement that it was unaware of the fraud at NCFE prior to the company's bankruptcy based on testimony of NCFE's former employees. "This testimony is belied by the extensive evidence adduced on the summary judgment record that Credit Suisse was fully aware that NCFE was not operating as it had been represented to investors, and of other red flags or warning signs which were clear indications of fraud at NCFE," he further said. The statement drew support from Pharos Capital Partners L.P. Pharos argued that the decision in the Ashland case is unavailing as to the company because it has submitted "substantial evidence of specific, actionable misrepresentations and omissions that Credit Suisse knowingly made directly" to the company. NATIONAL CENTURY: Court Denies Insurance for Execs. Atty. Fees -------------------------------------------------------------- A district court judge in Ohio ruled that Great American Insurance Company was exempt from covering the defense costs of four former executives of National Century Financial Enterprises Inc. Judge James Graham, who oversees the case styled Unencumbered Assets, Trust v. Great American Insurance Co., ruled that Lance Poulsen, Donald Ayers, Roger Faulkenberry and James Dierker are not eligible for coverage under the $5 million insurance policy that NCFE availed for its directors and officers. Citing a provision called "dishonesty exclusion" in the insurance policy, Judge Graham said that Great American was exempt from paying the defense costs of the former executives who were convicted of securities fraud scheme that pushed NCFE to bankruptcy. The "dishonesty exclusion" provision releases the insurance company from liability for loss resulting from deliberate fraudulent or dishonest act. "There is no dispute that the defense costs for which the principals seek coverage directly relate to claims against them that were brought about by their deliberately fraudulent and dishonest conduct," Judge Graham said in his order dated September 16, 2011. "The principals seek defense costs expended in their criminal cases, and the policy plainly relieves Great American from liability for such losses," the federal judge said. The former executives previously challenged Great American's contention that the "dishonesty exclusion" provision prevents them from coverage eligibility, arguing that the criminal convictions are not yet final as appellate review of those convictions has not been exhausted. In his September 16 decision, Judge Graham pointed out that the convictions for securities fraud of Messrs. Ayers, Faulkenberry, and Dierker are already final since the Sixth Circuit has already affirmed their convictions. He further said that the time has lapsed for them to petition for a writ of certiorari from the U.S. Supreme Court. As for Mr. Poulsen, the federal judge said that he still has time to seek review by the Supreme Court. Judge Graham, however, pointed out that the language of the insurance policy makes clear that the type of finality espoused by the executives, which is the exhaustion of appellate review, is not required to trigger the dishonesty exclusion. The September 16 order also excludes the Unencumbered Assets Trust, which was created to pursue legal causes of action belonging to NCFE and its subsidiaries, from the insurance coverage. The UAT earlier admitted that the former executives committed fraud but argued that their wrongdoing should not be imputed to NCFE for purposes of entity coverage. It believes that any payment under the insurance policy should be given to it and not to anyone else. Meanwhile, NCFE's outside directors including Thomas Mendell, Harold Pote and Eric Wilkinson and Mr. Poulsen's wife remain as potential claimants to the insurance policy, and will have until December 31, 2011, to complete discovery, according to the court order. ��About National Century Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. --�http://www.ncfe.com/�--was the largest issuer of medical accounts receivable asset backed securities in the United States before it collapsed in bankruptcy in November 2002 amid allegations of widespread fraud and misappropriation of assets.��To date, 10 senior executives of the company have been convicted or pled guilty to federal charges of conspiracy, securities fraud, wire fraud, and money laundering arising out of the NCFE securitization program. NCFE -- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust -- is in the midst of liquidating estate assets.��The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235).��The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004.��Paul E. Harner, Esq., at Jones Day, represented the Debtors. Bankruptcy Creditors' Service, Inc., publishes NATIONAL CENTURY BANKRUPTCY NEWS.��The newsletter tracks the Chapter 11 proceeding undertaken by National Century Financial Enterprises Inc. and its units.��(http://bankrupt.com/newsstand/�or215/945-7000) NATIONAL TAX: Recession Cues Chapter 11 Bankruptcy -------------------------------------------------- Jan Norman at Orange County Register reports that National Tax Data Inc. in San Juan Capistrano, California, has filed for Chapter 11 bankruptcy reorganization. The report notes that the Company's clients include title companies and real estate brokers, industries that have been hard-hit by the recession and collapse of housing market. Based in San Juan Capistrano, California, National Tax Data Inc. provides property tax information for real estate transactions. The Company filed for Chapter 11 bankruptcy protection on Sept. 9, 2011 (Bankr. C.D. Calif. Case No. 11-22682). Judge Theodor Albert presides over the case. The Law Offices of Matthew E. Faler represents the Debtor. The Debtor listed assets of less than $50,000, and estimated debts of $1 million and $10 million. NATIONAL SLAVERY: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------ Kevin Flynn at the New York Times reports that the United States National Slavery Museum has filed for Chapter 11 bankruptcy protection. Mr. Flynn, citing report from the Richmond Times-Dispatch, says the museum had $3 million in unsecured debts. Among its unpaid bills is one for more than $215,000 in property taxes owed on the 38-acre parcel where the museum was to have opened several years ago. Since then, the proposed museum's director has departed, its board has stopped meeting and some people who gave artifacts to the museum have asked for their return. According to the report, the museum's major remaining asset is its land and last summer Fredericksburg officials said they planned to sell the property. But the bankruptcy filing on Wednesday will have the effect of blocking any sale, at least temporarily, the Times-Dispatch reported. United States National Slavery Museum is an organization founded by the former Virginia governor Douglas L. Wilder to build a museum in Frederickburg, Va., that would discuss that chapter in American history. NEW ENGLAND NATIONAL: In Camera Hearing in Town of East Lyme Suit ----------------------------------------------------------------- In the lawsuit, NEW ENGLAND NATIONAL, LLC, v. TOWN OF EAST LYME, Adv. Proc. No. 10-3033 (Bankr. D. Conn.), Chief Bankruptcy Judge Lorraine Murphy Weil directed an in camera hearing to ascertain whether documents submitted by the defendant are privileged in the first instance. That hearing will be held at the court's earliest availability. A copy of the Court's Sept. 26, 2011 Brief Memorandum and Order is available at http://is.gd/WVgeNBfrom Leagle.com. New England National, LLC, filed for Chapter 11 bankruptcy (Bankr. D. Conn. Case No. 02-33699) in 2002. NEW ERA HOSPITALITY: Seeks Dismissal of Chapter 11 Case ------------------------------------------------------- New Era Hospitality, Inc., asks the U.S. Bankruptcy Court for the Southern District of Texas to dismiss the Chapter 11 case because the Debtor no longer has the desire to continue the bankruptcy case. Samuel L. Milledge, Esq., in Houston, Texas, notes that a meeting of creditors pursuant to Section 341a of the Bankruptcy Code has not been held. Houston, Texas-based New Era Hospitality Inc. filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 11-36492) on July 30, 2011, to avoid foreclosure of its hotel property at 801 St. Joseph Parkway. Money woes stalled its hotel construction plans. Judge Karen K. Brown presides over the case. Samuel L. Milledge, Esq., Milledge Law Firm, P.C., represents the Debtor. The Debtor disclosed $14,000,000 in assets, and $4,213,828 in debts. NEW ERA HOSPITALITY: Court Approves Milledge as General Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas has authorized New Era Hospitality, Inc. to employ Samuel L. Milledge, Esq., in Houston, Texas as general bankruptcy counsel effective as of July 30, 2011. Houston, Texas-based New Era Hospitality Inc. filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 11-36492) on July 30, 2011, to avoid foreclosure of its hotel property at 801 St. Joseph Parkway. Money woes stalled its hotel construction plans. Judge Karen K. Brown presides over the case. Samuel L. Milledge, Esq., Milledge Law Firm, P.C., represents the Debtor. The Debtor disclosed $14,000,000 in assets, and $4,213,828 in debts. NEWPAGE CORP: Section 341(a) Meeting Scheduled for Oct. 14 ---------------------------------------------------------- The U.S. Trustee for Region 3 will convene a meeting of creditors in NewPage Corporation's Chapter 11 case on Oct. 14, 2011, at 11:00 a.m. The meeting will be held at the U.S0 District Court, 844 King St., Room 2112, Wilmington, Delaware. 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. 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. O&G LEASING: Wants Indenture Trustee Plan Denied for Lack of Info ----------------------------------------------------------------- O&G Leasing, LLC, et al., ask the U.S. Bankruptcy Court for the Southern District of Mississippi to deny approval of the Disclosure Statement explaining the Chapter 11 Plan proposed by First Security Bank, as trustee with respect to its aforementioned plan of liquidation. According to the Debtor, the Disclosure Statement does not contain adequate information as required under section 1125 of the Bankruptcy Code, and the representations contained therein are misleading, unsupported or incorrect, among other things: -- adequately or forthrightly described the Plan as a forced sale of assets in exchange for little or no cash and new debt from a company that has not even performed the first phase of diligence on the assets to be purchased; -- intentionally defined the payments to be made by its proposed purchaser to be guaranteed payments, which implies that the payments are going to be made no matter what and without regard to whether the Plan is feasible, the market suffers a downturn (which is what that led to these proceedings) or the proposed newly formed buyer and guarantor have the financial wherewithal to make the payments; -- must be required to disclose all facts and details regarding its efforts to identify a potential purchaser, how many persons showed legitimate interest, who negotiated for and on behalf of FSB and the interested party and determinations made regarding potentially interested buyers, if any, along the way, particularly at different times in these cases, if applicable; -- makes numerous accusations about the existence of claims that exist by the estates against Octane Funding, LLC and Octane Funding II, LLC that are materially misleading and tell only what FSB wants told; and -- the representation that Washington State Bank may hold an allowed unsecured claim is misleading and without basis under the Bankruptcy Code. WSB is being paid the entirety of its allowed secured claim. WSB's claim against the estates has not incurred interest or attorneys' fees postpetition under section 506 of the Bankruptcy Code, which would be more clearly understandable if the Disclosure Statement contained any discussion of valuation. As reported in the Troubled Company Reporter on Aug. 16, 2011, First Security Bank, as indenture trustee for the bonds used to fund the acquisition and construction of the rigs for debtors O&G Leasing, LLC, and Performance Drilling Company, LLC, has submitted a Disclosure Statement for solicitation of votes on its Plan of Reorganization for the Debtors. The Indenture Trustee's Plan represents the culmination of the Trustee's increasing frustration with the persistent attempts by the Debtors, through their Insiders, to leverage the Chapter 11 bankruptcy process, for their own benefit instead of for the benefit of Creditors. The lynchpin of the Trustee's Plan is the proposed 363 Sale of the Debtors' assets and business through an Auction to the highest and best Qualified Bidder. The Indenture Trustee has entered into an Asset Purchase Agreement with wholly-owned subsidiaries of SolstenXP, Inc., to provide the stalking horse bid for the purchase of substantially all the Debtors' assets, subject to higher and better offers from qualified bidders. The Asset Purchase Agreement calls for Solsten Drilling, LLC, to purchase substantially all the assets of the Debtors, pay $190,156 quarterly over 7 years to Washington State Bank on account of its Class 2C Claim in the principal amount of $4,504,177, and pay $818,292 quarterly over 10 years for the benefit of other Creditors according to their priorities. The Asset Purchase Agreement also provides that, regardless of the outcome of the Lien Adversary, Solsten Drilling will issue 3% Preferred Interests in Solsten Drilling on the Effective Date to Holders of Series 2009B Debentures in the amount of one 3% Preferred Interest for each $1 of principal amount of Allowed Class 2B Claim. The Asset Purchase Agreement is expressly subject to higher and better offers by Qualified Bidders. If Solsten Drilling is outbid, or if the Debtors' Plan is confirmed, then, under the proposed Sales Procedures that are subject to approval by the Bankruptcy Court, its $250,000 earnest money deposit will be returned and it will receive a $500,000 break-up fee. First Security notes that the Debtors' Plan that provides no capital infusion into the Debtors in exchange for the issuance of all membership interests in the Reorganized Debtors to an insider, Octane Funding. On the other hand, the Asset Purchase Agreement calls for the parties to the Asset Purchase Agreement to be capitalized with $4.5 million, $3 million of which will be advanced in the form of a capital contribution from SolstenXP to Solsten Funding. Solsten Funding will then itself contribute $1 million to its wholly-owned subsidiary, Solsten Drilling, the operating entity that is buying the Debtors' assets in the Asset Purchase Agreement. The remaining $1.5 million in capitalization to support operations of Solsten Drilling will come from SolstenXP through a working capital credit facility. About O&G Leasing Jackson, Mississippi-based O&G Leasing, LLC, filed for Chapter 11 bankruptcy protection on May 21, 2010 (Bankr. S.D. Miss. Case No. 10-01851). Douglas C. Noble, Esq., at McCraney Montagnet & Quin, PLLC, assists the Company in its restructuring effort. The Company estimated $10 million to $50 million in assets and $50 million to $100 million in liabilities. OTTILIO PROPERTIES: Valley Nat'l. Wants Case Dismissed, Converted ----------------------------------------------------------------- Valley National Bank asks the U.S. Bankruptcy Court for the District of New Jersey to dismiss, convert the Chapter 11 case of Ottilio Properties, LLC to one under Chapter 7 of the Bankruptcy Code, or in the alternative lift the automatic stay to allow Valley to complete a foreclosure action against certain property, commonly known as: i) 1 Ottilio Terrace, Totowa, New Jersey; ii) 555 Preakness Avenue, Totowa, New Jersey; iii) 217 Morris Avenue, Spring Lake, New Jersey; and iv) 101 Forest Avenue, Totowa, New Jersey. Valley National Bank is represented by: Michael A. Saffer, Esq. Stuart Gold, Esq. MANDELBAUM, SALSBURG, LAZRIS & DISCENZA, P.C. 155 Prospect Avenue West Orange, NJ 07052 Tel: (973) 736-4600 E-mail: sgold@msgld.com About Ottilio Properties, LLC Totowa, New Jersey-based Ottilio Properties, LLC, filed a Chapter 11 petition (Bankr. D.N.J. Case No. 11-34641) on Aug. 18, 2011, in Newark, New Jersey. Glenn R. Reiser, Esq., at LoFaro and Reiser, LLP, in Hackensack, New Jersey, serves as counsel to the Debtor. Ottilio Properties estimated as much as $50 million in assets and $10 million in liabilities as of the Chapter 11 filing. OUTSOURCE HOLDINGS: Files Plan; All Claims Impaired Under Plan -------------------------------------------------------------- Outsource Holdings, Inc., has filed a proposed plan that contemplates the continuation of the Debtor's business after the Effective Date as a separate corporate entity. On the Effective Date, the Plan Administrator will be responsible for administering the Debtor's Estate pursuant to the provisions of the Plan, including, among others, calculating and implementing all distributions as provided by the Plan and enforcing the terms of the Acquisition Agreement on behalf of the Reorganized Debtor. During the bankruptcy case, the Debtor caused all of the outstanding stock of Jefferson Bank to be merged with First Bank & Trust pursuant to the Acquisition Agreement. The Plan, filed on Aug. 31, 2011, provides for the distribution of the net proceeds from that transaction to holders of Allowed Claims in accordance with the priority scheme established by the Bankruptcy Code. The Plan designates 5 Classes of Claims and Interests: Class 1 � Allowed Claim of KBW Class 2 � Allowed Claims of the 2010 Noteholders Class 3 � Allowed Claims of the TRUPs Holders Class 4 � Allowed Claims of the 2009 Noteholders Class 5 � Allowed Equity Interests Holders of Equity Interests in Class 5 will not retain their Equity Interests and will not receive any distributions on account of their Equity Interests. Classes 1, 2, 3 and 4 are impaired under the Plan. Holders of Claims in these classes are entitled to vote or reject the Plan. With respect to the Class 1 Claim, Keefe, Bruyette & Woods, Inc., will receive on, or as soon as reasonably practicable after, the later of (a) the Effective Date or (b) the Allowance Date, Cash from the Initial Proceeds equal to $100,000 in full settlement of its Allowed Claim. The Initial Proceeds means the Closing Cash Consideration as defined in the Acquisition Agreement, plus any cash on hand in the Debtor's Estate as of the Effective Date. Each holder of an Allowed Claim in Class 2 (in the approximate aggregate amount of $7,000,000) will receive Cash from the Initial Proceeds equal to the principal portion of its Class 2 Claim in full satisfaction of its Allowed Claim. The aggregate payment to be made to Class 2 Claimants is estimated to be $200,000. The Allowed Claims of the TRUPs Holders in Class 3, in the approximate amount of $5,000,000, will be deemed senior to the Allowed Claims of the 2009 Noteholders to the extent of the Agreed TRUPs Distribution. The Agreed TRUPs Distribution means the $1,500,000 less an amount pursuant to any Tricadia Substantial Contribution Claim. Each holder of an Allowed Claim in Class 3 will receive Cash equal to its Pro Rata Share of the Net Initial Proceeds, if any, provided that the distribution will not exceed the amount of the Agreed TRUPs Distribution. The Net Initial Proceeds means the Initial Proceeds, less payments made (i) for Administrative Claims, (ii) to Class 1 Claimant, (iii) to Class 2 Claimants, and (iv) for the Distribution Reserve. In addition, if and when the principal portion of the Allowed 2009 Noteholder Claims (in Class 4) is paid in full as provided below, Class 3 Claimants will be paid in Cash their Pro Rata Share of an amount equal to the balance of all remaining funds in the Reorganized Debtor's estate. Class 3 Claimants will also be issued a Pro Rata Share of Equity Interests in the Reorganized Debtor. The Treatment of the 2009 Noteholders in Class 4, in the approximate aggregate amount of $200,000, will be deemed subordinated to the Allowed Claims of the TRUPs Holders (Class 3) to the extent of the Agreed TRUPs Distribution. To the extent, if any, that the Net Initial Proceeds exceed the Agreed TRUPs Distribution, on, or as soon as reasonably practicable after, the later of (a) the Effective Date or (b) the Allowance Date, each Class 4 Claimant will receive a Pro Rata Share of the remaining Cash (allocated according to the principal portion of each Class 4 Claimant's Allowed Claim), provided that the distribution will not exceed in the aggregate the principal portion of all Allowed Claims of the 2009 Noteholders. A copy of the Plan of Reorganization dated Aug. 31, 2011, is available for free at: http://bankrupt.com/misc/outsourceholdings.plan.dktno.125.pdf About Outsource Holdings Lubbock, Texas-based Outsource Holdings, Inc.'s only significant asset was its ownership of all of the outstanding capital stock of Jefferson Bank, which is a state bank with five branch locations in the Dallas/Fort Worth metroplex. Outsource Holdings filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 11-41938) on April 3, 2011. Jeff P. Prostok, Esq., at Forshey & Prostok, L.L.P., in Fort Worth, Tex., serves as Outsource Holdings' bankruptcy counsel. The Debtor also tapped Commerce Street Capital, LLP, as investment banker and financial advisor, Fenimore, Kay, Harrison & Ford, LLP as special transaction and regulatory counsel. The Debtor disclosed $10,571,121 in assets and $13,887,431 in liabilities as of the Chapter 11 filing. Anthony J. Pacchia was appointed as Chapter 11 examiner in the Debtor's case. The examiner tapped Cole, Schotz, Meisel, Forman & Leonard, P.A., as counsel and Traxi, LLC, as financial advisors. No creditors' committee has been appointed in the case. P&K EQUITY: Judge Kaplan Axes Lease at Gateway Centre ----------------------------------------------------- David P. Willis at Asbury Park Press reports that U.S. Bankruptcy Court Judge Michael B. Kaplan terminated the lease of Boston's The Gourmet Pizza Restaurant and Sports Bar in Neptune at Gateway Centre, a shopping center on Route 66 in Neptune. Mr. Willis notes Boston's Gourmet also terminated the franchise agreement with P&K, according to court papers. "At this point, we are investigating all the assets and if there are assets to be sold, like the liquor license, then we will do that on behalf of the creditors," the report quotes Peggy Stalford, bankruptcy trustee, as saying.. According to the report, the restaurant's franchisee, P&K Equity Group of Belmar, filed for bankruptcy protection under Chapter 11, which hopes to put companies on a path so they can continue to operate. But the case was converted to Chapter 7 and set for liquidation. Carol Knowlton, Esq., represents the company as its lawyer. In court papers, SSS Neptune Associates, the landlord at Gateway Center, said P&K owed $56,770 in rent and other fees. In its bankruptcy filing, P&K Equity listed assets of up to $50,000 and liabilities of $1 million to $10 million. PAT & OSCAR'S: Files for Chapter 7 Bankruptcy Protection -------------------------------------------------------- Lori Weisberg at the San Diego Union-Tribune reports that Pat & Oscar's has filed for Chapter 7 bankruptcy, but its franchisees are vowing to remain open. Ms. Weisberg notes, in the Company's filing for bankruptcy, Pat & Oscar's parent company, FFPE LLC, listed assets of $331,459 and liabilities of $4.1 million. According to the report, the filing to liquidate the company's assets comes as the last of the chain's company-owned restaurants in Temecula, El Cajon and Carlsbad closed last week. At the time the Pat and Oscar's management team purchased the company in early 2009, there were 19 Southern California locations. Now there are 11, all franchisees. "For a number of months the management of Pat & Oscar's has worked very hard to streamline operations and return the company to profitability," the report quotes the Company as stating. "However, we discovered that while these efforts were important and necessary, they were not going to be sufficient to save our parent company. The report notes, without the parent company intact, however, it is unclear how the remaining locations could continue to operate. A company spokesperson, who asked not to be identified, said the individual franchisees are still working out their strategy for keeping the Pat & Oscar's brand alive. Local restaurant consultants said it's likely the franchisees will have to form an association and petition the bankruptcy court to continue using the Pat & Oscar's name, and they would no longer be able to rely on the parent company for marketing support, notes Ms. Weisberg. PETROLEUM & FRANCHISE: Can Use Lender Parties' Cash Until Oct. 14 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Connecticut, in a fourteenth preliminary order, authorized Petroleum & Franchise Capital LLC, and Petroleum & Franchise Funding LLC to use of cash collateral of the Lender Parties until Oct. 14, 2011. As of the Petition Date, Autobahn Funding Company LLC and DZ Bank AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main allege, among other things, a first priority secured claim against all of Debtor PFF's assets, including PFF's cash and accounts receivable. As reported in the Troubled Company Reporter on April 11, 2011, pursuant to an Aug. 30, 2007, receivables loan and security agreement by and among the Debtors and Autobahn Funding Company, LLC (the Lender) and DZ Bank (the Agent), there is outstanding principal balance of approximately $54 million under the various loan agreements with the Lender and the Agent. In June 2010, the Agent declared a default and triggered increased amortization under the various loan documents and ceased future funding of the Debtors. The Debtors would use the cash collateral to fund their business operations, preservation of the value of their assets and pay business expenses necessary to avoid irreparable harm to their estates during that extended period. As additional adequate protection to the Lender Parties, on Oct. 14, 2011 (or the next succeeding business day): i) the Debtors will pay the Lender Parties current daily interest accruing on the Lender Parties' outstanding obligations under the RLSA, as of the petition date, in the aggregate principal amount of $53,995,625, at a rate of interest equal to one-month UBOR plus lender margin equal to 2.5% due for the 30-day period commencing Sept. 15, until Oct. 14; and ii) the Debtors will pay the Lender Parties the hedge payment due pursuant to the Interest Rate Hedging Agreement, at a rate equal to 1.25% minus one-month UBOR due for the 30-day period commencing Sept. 15, until Oct. 14; iii) the Lender Parties' interests therein, the Lender Parties are granted replacement or substitute liens, subject only to the carve-out of certain expenses, in all postpetition assets of the Debtors and proceeds thereof. A final hearing in the Debtors' cash collateral motion will be held on Oct. 11, at 10:00 a.m. (ET) About Petroleum & Franchise Danbury, Connecticut-based Petroleum & Franchise Capital, LLC, filed for Chapter 11 bankruptcy protection on June 23, 2010 (Bankr. D. Conn. Case No. 10-51465). Craig I. Lifland, Esq., and James Berman, Esq., at Zeisler and Zeisler, assist the Company in its restructuring effort. BDO USA, LLP, serves as the Company's accountants. The Company estimated assets and debts at $50 million to $100 million. Petroleum & Franchise Funding, LLC, an affiliate of the Debtor, a filed separate Chapter 11 petition (Case No. 10-51467) on June 23, 2010, disclosing $66,132,915 in assets and $54,782,604 in liabilities as of the Chapter 11 filing. PICHI'S INC: Files Schedules of Assets and Liabilities ------------------------------------------------------ Pichi's Inc., filed with the U.S. Bankruptcy Court for the District of Puerto Rico its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $22,155,279 B. Personal Property $9,247,080 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $31,253,750 E. Creditors Holding Unsecured Priority Claims $868,092 F. Creditors Holding Unsecured Non-priority Claims $4,497,178 ----------- ----------- TOTAL $31,402,359 $36,619,020 About Pichi's Inc. Pichi's Inc. owns and operates the Best Western Pichi's Hotel in Guayanilla, Puerto Rico. Pichi's filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 11-06583) on Aug. 3, 2011. Judge Mildred Caban Flores initially presided over the case, which has recently been reassigned to the Hon. Edward A. Godoy. Charles Alfred Cuprill, PSC Law Offices, serves as the Debtor's bankruptcy counsel. CPA Luis R. Carrasquillo & Co., P.S.C., serves as financial consultants. The petition was signed by Luis A. Emmanuelli Gonzalez, president. PITT PENN: Thomas Alexander Seeks Withdrawal as Special Counsel --------------------------------------------------------------- Thomas Alexander & Forrester LLP seeks to withdraw as special counsel for Pitt Penn Holding Co., Inc. and its Debtor affiliates, including Industrial Enterprises of America, Inc, the named plaintiff in certain adversary proceedings. On February 16, 2010, the Court approved Thomas Alexander as special counsel to Debtors and is to be compensated on both a reduced hourly basis and on a contingent fee basis. The Debtor required that before Thomas Alexander submit a fee application to the Court, the Debtor's management had to approve the fee application. Steven W. Thomas, Esq., a member of Thomas Alexander, contends that despite repeated requests, TEAM has not approved Thomas Alexander's hourly invoices for payments for over three months. Mr. Thomas relates that the original invoice was provided to Industrial Enterprises on May 4, 2011. At Industrial Enterprises' request, Thomas Alexander submitted a revised invoice on June 22, 2011 and since that date, Thomas Alexander has continued to devote significant hours to matters involving Industrial Enterprises. As of August 16, 2011, Thomas Alexander has incurred $408,306 in unpaid legal fees and expenses, Mr. Thomas notes. He adds that Industrial Enterprises continues to withhold payment that is due. Delaware Rule of Professional Conduct 1 .16(b)(5) allows counsel to withdraw for a client's failure to substantially fulfill an obligation to the lawyer regarding the lawyer's services where the client has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled. About Industrial Enterprises Pittsburgh, Pennsylvania-based Industrial Enterprises of America, Inc., f/k/a Advanced Bio/Chem, Inc., filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-11508) on May 1, 2009. Pitt Penn Holding Co., Inc., and Pitt Penn Oil Co., LLC, each filed voluntary petitions for Chapter 11 relief (Bankr. D. Del. Case Nos. 09-11475 and 09-11476) on April 30, 2009. EMC Packaging, Inc., filed a voluntary petition for Chapter 11 relief (Bankr. D. Del. Case No. 09-11524) on May 4, 2009. Unifide Industries, LLC, and Today's Way Manufacturing LLC, each filed a voluntary petition for Chapter 11 relief (Bankr. D. Del. Case Nos. 09-11587 and 09-11586) on May 6, 2009. PPH, PPO, EMC, Unifide, and Today's Way are each subsidiaries of IEAM. The cases are jointly administered under Case No. 09-11475. Christopher D. Loizides, Esq., at Loizides, P.A., in Wilmington, Del., represents the Debtors as counsel. In its petition, Industrial Enterprises disclosed total assets of $50,476,697 and total debts of $17,853,997. Industrial Enterprises originally operated as a holding company with four wholly owned subsidiaries, PPH, EMC, Unifide, and Today's Way. PPH, through its wholly owned subsidiary, PPO, was a leading manufacturer, marketer and seller of automotive chemicals and additives. EMC's original business consisted of converting hydrofluorocarbon gases R134a and R152a into branded private label refrigerant and propellant products. Unifide was a leading marketer and seller of automotive chemicals and additives. Today's Way manufactured and packaged the products which were sold by Unifide. POINT BLANK: Court OKs Forbearance Deal for Replacement DIP Credit ------------------------------------------------------------------ The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware approved Point Blank Solutions, Inc., et al.'s certain forbearance agreement under the replacement DIP credit agreement. As reported in the Troubled Company Reporter on Sept. 14, 2011, the Debtors told 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 said 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 said 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. PREMIER TRAILER: To Employ Lazard as Investment Banker ------------------------------------------------------ PTL Holdings LLC and Premier Trailer Leasing, Inc. seek permission from the U.S. Bankruptcy Court for the District of Delaware to employ Lazard Middle Market LLC as their investment banker nunc pro tunc to Sept. 15, 2011. Lazard will render services, including: a. reviewing and analyzing the Debtors' business, operations and financial projections; b. evaluating the Debtors' potential debt capacity in light of its projected cash flows; c. assisting in the determination of a capital structure for the Debtors; and d. assisting in the determination of a range of values for the Debtors on a going-concern basis; Lazard will be paid according to this fee structure: a. A monthly fee for each month after March 2011 of $50,000, payable until the earlier of the completion of the Restructuring or the termination of Lazard's engagement. Fifty percent (50%) of the Monthly Fees paid in respect of any months following the second month of the engagement will be credited (without duplication) against any Restructuring Fee, Sale Transaction Fee, Minority Sale Transaction Fee, or Financing Fee payable; provided, that, in the event of a Chapter 11 filing, such credit will only apply to the extent that such fees are approved in entirety by the Bankruptcy Court, if applicable. b. A fee equal to $1 million, payable upon the consummation of a Restructuring -- Restructuring Fee -- provided, however, that if a Restructuring is to be completed through a "pre-packaged" or "pre-arranged" plan of reorganization, the Restructuring Fee shall be earned and shall be payable upon the earlier of (i) execution of definitive agreements with respect to such plan and (ii) delivery of binding consents to such plan by a sufficient number of creditors and/or bondholders, as the case may be, to bind the creditors or bondholders, as the case may be to the plan; provided, further, that in the event that LMM is paid a fee in connection with a "prepackaged" or "pre-arranged" plan and such plan is not consummated, LMM shall return such fee to the Company. c. (i) If, the Debtors consummate a Sale Transaction incorporating all or a majority of the assets or all or a majority or controlling interest in the equity securities of the Debtors, LMM will be paid a fee -- Sale Transaction Fee -- equal to the greater of (A) the fee calculated based on an Aggregate Consideration as set forth in Schedule I to the Engagement Letter or (B) the Restructuring Fee. (ii) If, the Debtors consummate any Sale Transaction not covered by clause (i) above, the Debtors will pay LMM a Minority Sale Transaction Fee to be mutually agreed in good faith by the Debtors and LMM, which fee will approximately compensate LMM in light of the magnitude and complexity of the transaction and the fees customarily paid to investment bankers of similar standing for similar transactions. (iii) Any Sale Transaction Fee or Minority Sale Transaction Fee will be payable upon consummation of the applicable Sale Transaction. d. A fee, payable upon consummation of a Financing, equal to the amount set forth in Schedule II of the Engagement Letter. One-half of any Financing Fee(s) will be credited against any Restructuring Fee or Sale Transaction Fee subsequently payable under the Engagement Letter. e. For the avoidance of any doubt, more than one fee may be payable, however, LMM will not at any time be entitled to receive both a Restructuring Fee, and a Sale Transaction Fee or Minority Sale Transaction Fee, as a result of the consummation of a transaction or transaction for which LMM has been engaged. g. None of the fees will be earned or payable to LMM at any time if the Debtors voluntarily or involuntarily liquidates its assets in chapter 7 proceedings in whole or in part during the term of the Engagement Letter. During the 12-month period preceding the Petition Date, the Debtors made aggregate payments to LMM of $1,075,948.41 pursuant to the terms of the LMM Agreement, which payments consisted of $1,075,000 in Monthly Fees, and (ii) aggregate expense reimbursements of $948.41. No amounts were due to LMM as of the Petition Date. Andrew Torgove -- andrew.torgove@lazardmm.com -- managing director at LMM, attest that the managing directors, senior directors, directors, vice presidents, senior associates, associates, analysts and administration of LMM: (a) do not have any connection with the Debtors or their affiliates, their creditors, the U.S. Trustee, or any person employed in the office of the U.S. Trustee, or any other party in interest, or their respective attorneys and accountants, (b) are "disinterested persons," as that term is defined in section 101(14) of the Bankruptcy Code, and (c) do not hold or represent any interest adverse to the Debtors' estates. About Premier Trailer Leasing Founded in 2005, PTL Holdings LLC and Premier Trailer Leasing, Inc., provide semi-trailer rentals, specializing in road-ready semi-vans and flatbeds for the mid-market segment of the transportation industry. Headquartered in Grapevine, Texas, they operate their business out of 19 branches in 15 different states in the United States. PTL Holdings and Premier sought bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12676) on Aug. 23, 2011. Brendan Linehan Shannon presides over the case. Pachulski Stang Ziehl & Jones LLP serves as the Debtors' bankruptcy counsel. Kurtzman Carson Consultants, LLC, serves as claims and noticing agent. PTL Holdings estimated $100 million to $500 million in assets and debts. The petitions were signed by Scott J. Nelson, chief executive officer. Garrison Loan Agency Services LLC, the administrative agent under the First Lien Credit Agreement, is represented by Proskauer Rose LLP. Second lien lender Fifth Street Mezzanine Partners III, L.P., is represented by Young Conaway Stargatt & Taylor LLP and Kramer Levin Naftalis & Frankel LLP. On the Petition Date, the Debtors filed a Prepackaged Plan. The primary purpose of the Plan is to effectuate the restructuring and substantial de-leveraging of the Debtors' capital structure in order to bring it into alignment with the Debtors' present and future operating prospects and to provide the Debtors with greater liquidity. The Plan gives the First Lien Lenders, owed $84 million, 100% of the equity of reorganized Premier in exchange for the discharge of obligations owed under the First Lien Credit Agreement. Holders of Second Lien Credit Agreement Claims, worth $27,100,000, and holders of general unsecured claims, worth $550,000, will get nothing. R & D: Case Summary & 6 Largest Unsecured Creditors --------------------------------------------------- Debtor: R & D Properties, LLC 2700 Garrett Drive Bowling Green, KY 42104 Bankruptcy Case No.: 11-11425 Chapter 11 Petition Date: September 22, 2011 Court: U.S. Bankruptcy Court Western District of Kentucky (Bowling Green) Debtor's Counsel: Scott A. Bachert, Esq. HARNED BACHERT & MCGEHEE PSC 324 E. 10th Street P.O. Box 1270 Bowling Green, KY 42102 Tel: (270) 782-3938 E-mail: bachert@hbmfirm.com Scheduled Assets: $3,012,859 Scheduled Debts: $1,760,803 The Company�s list of its six largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/kywb11-11425.pdf The petition was signed by Stephen E. Roberts, member. R&G FINANCIAL: Court Approves Disclosure Statement -------------------------------------------------- BankruptcyData.com reports that the U.S. Bankruptcy Court entered an order approving R&G Financial's Disclosure Statement, which provides for all of the Debtor's assets to be transferred to, and vest in, Liquidating RGFC. The Plan provides for the appointment of Clifford Zucker, CPA as Plan administrator and Wilmington Trust Company as Plan consultant to oversee the activities of Liquidating RGFC. As reported in the Troubled Company Reporter on June 16, 2011, pursuant to the Plan, liquidating RGFC will continue in operation in order to monetize the remaining assets, continue litigation with the FDIC and potentially pursue litigation against other parties, and make distributions under the Plan. The Plan Administrator will be appointed on the Effective Date of the Plan and will be responsible for implementing the Plan, subject to the oversight of the Plan Committee. The Plan designates 7 classes of claims and interests: Class Claim Status Voting Rights ----- ------------------------- ---------- -------------------- 1 RGFC Secured Claims Unimpaired No(deemed to accept) 2 Non-FDIC Priority Claims Unimpaired No(deemed to accept) 3 FDIC Priority Claims Impaired Yes 4 RGFC Gen. Unsecured Claims Impaired Yes 5 Subordinated Notes Claims Impaired Yes 6 RGFC Preferred Stock Claims Impaired No(deemed to reject) 7 RGFC Common Stock Interests Impaired No(deemed to reject) Absent a successful resolution of the FDIC Priority Claims, no distributions will be made to holders of Allowed Claims in any RGFC Classes, other than Class 1 and Class 2. Each holder of an Allowed Class 3 Claim will receive all Net Free Cash as it is available until such Allowed Claim is paid in full. The FDIC filed a Proof of Claim in the Chapter 11 case in an unliquidated amount, but in excess of US$3.4 million, based on an alleged capital maintenance commitment made to a Federal depository institutions regulatory agency, but does not include documentation or evidence to substantiate the existence of its alleged capital maintenance claim.. The Debtor believes that ultimately, an FDIC Priority Claim will not be Allowed in any amount. Each Allowed General Unsecured Claim under Class 4, estimated to range between US$10.9 million and US$15.4 million, will receive a Pro Rata distribution of the Residual Net Free Cash. The Projected Recovery under the Plan is 0.30%-2.3%. Each Allowed Subordinated Notes Claims under Class 5, estimated at approximately US$385 million, will receive a Pro Rata distribution of the Residual Net Free Cash. Projected Recovery under the Plan is 0.30%-2.3%. RGFC Preferred Stock Interests under Class 6, and RGFC Common Stock Interests under Class 7, are deemed canceled. A copy of the disclosure statement is available at: http://bankrupt.com/misc/r&gfinancial.DS.pdf In a separate order, the Court extended until Oct. 31 the Debtor's exclusive periods to solicit acceptances for the proposed Chapter 11 Plan. Amended Plan BankruptcyData.com reports that R&G Financial filed with the U.S. Bankruptcy Court a First Amended Chapter 11 Plan of Liquidation and related Disclosure Statement. According to the Disclosure Statement, "On the Effective Date, all of the Debtor's assets shall be transferred to, and vest in, Liquidating RGFC. The Plan provides for the appointment of Clifford Zucker, CPA as the Plan Administrator and Wilmington Trust Company as the Plan Consultant to oversee the activities of Liquidating RGFC . . . In accordance with the Plan, on the Effective Date, the persons then acting as directors, officers, representatives and/or contract managers of the Debtor shall be released and discharged from all further authority, duties, responsibilities and obligations relating to and arising from the Debtor or the Chapter II Case. Nothing contained in the Plan shall release the Debtor's officers and directors from claims for actions taken before the Effective Date, including, but not limited to, any claims or actions that may be investigated by Wilmington Trust pursuant to the Derivative Standing Order, other than as provided in Article IX of the Plan." About R&G Financial San Juan, Puerto Rico-based R&G Financial Corporation was the direct parent of R-G Premier Bank of Puerto Rico, a state- chartered nonmember bank, through which RGFC primarily conducted its business. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. P.R. Case No. 10-04124) on May 14, 2010. Brent R. McIlwain, Esq., Robert W. Jones, Esq., Esq., at Patton Boggs LLP, in Dallas; and Jorge I. Peirats, Esq., at Pietrantoni, Mendez & Alvarez, in Hato Rey, P.R., serve as the Debtor's bankruptcy counsel. The Debtor disclosed US$40,213,356 in assets and US$420,687,694 in debts as of the Petition Date. RENDA MARINE: U.S. Can Get $11 Million from Owner, Judge Rules ------------------------------------------------------------- Dietrich Knauth at Bankruptcy Law360 reports that U.S. District Judge Michael H. Schneider ruled Monday that the U.S. could collect $11 million from the owner of insolvent contractor Renda Marine Inc., which allegedly transferred money to its owner's other companies to avoid repaying a debt owed under a dredging contract. According to Law360, Judge Schneider adopted a magistrate judge's August report and recommendations, finding that owner Oscar Renda could be held personally liable for the unpaid debt and that he had failed to raise a timely protest to the government's final decision. REOSTAR ENERGY: Plan Solicitation Period Extended Until Nov. 30 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas approved an agreement extending ReoStar Energy Corporation, et al.'s exclusive period to solicit acceptances for the proposed First Amended Disclosure Statement Plan of Reorganization dated as of Aug. 2, 2011. The agreement was entered among the Debtors and Russco Energy LLC's, the Co-Plan Proponent. The agreement provides that: -- the hearing to consider the approval of the Disclosure Statement, as may be amended or modified, and the hearing on the Debtors' motion for interim and final orders authorizing use of cash collateral will be held on Oct. 17, 2011, at 9:30 a.m., before the Hon. D. Michael Lynn; -- written objections, if any, to the Disclosure Statement are due by Oct. 10; -- the exclusivity period for the Debtors to solicit acceptances of a Chapter 11 Plan is extended until Nov. 30. As reported in the Troubled Company Reporter on Aug. 16, 2011, the Plan provides for the restructure of Debtors and their emergence from bankruptcy as reorganized privately held entities. After payment of Secured Claims, Administrative Claims, and Priority Claims under the priorities of the Bankruptcy Code, the Debtors have agreed to pay some holders of Allowed General Unsecured Claims their Pro Rata Share of (a) 20% of their Allowed General Unsecured Claim amounts over 36 equal monthly payments starting on the first business day following the Effective Date, plus up to (b) 50% of the Net Proceeds, if any, from all Estate Actions pursued by the Debtors. The Allowed secured claim of BT & MK Energy and Commodities, LLC (of unknown amount) will be paid over 10 years amortized at 5%. BT & MK's Allowed unsecured claim (of unknown amount) will receive 20% of its claim paid over 2 years. All Class 6 Interests in the Debtors will be canceled as of the Effective Date. New interests will be sold to the Interested Purchasers. A copy of the First Amended Disclosure Statement is available at: http://bankrupt.com/misc/reostar.1stamendedDS.pdf About ReoStar Energy Fort Worth, Texas-based ReoStar Energy Corporation is engaged in the exploration, development and acquisition of oil and gas properties, primarily located in the state of Texas. The Company owns roughly 9,000 acres of leasehold, which include 5,000 acres of exploratory and developmental prospects as well as 4,000 acres of enhanced oil recovery prospects. The Company filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-47176) on Nov. 1, 2010. Bruce W. Akerly, Esq., and Arthur A. Stewart, Esq., at Cantey Hanger LLP, in Dallas, represent the Debtors in their restructuring efforts. Greenberg Taurig, LLP, serves as special corporate/securities counsel. Reostar Energy disclosed $15,335,337 in assets and $16,391,412 in liabilities. ReoStar Energy's bankruptcy case is jointly administered with ReoStar Gathering, Inc., ReoStar Leasing, Inc., and ReoStar Operating, Inc. ReoStar Energy is the lead case. No trustee was appointed in the Debtors' cases. On Jan. 10, 2011, Michael McConnell was appointed as Chapter 11 examiner in the Debtors cases. REOSTAR ENERGY: Wants to Hire Updike Kelly as Attorney ------------------------------------------------------ Reostar Energy Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Texas for permission to employ Updike, Kelly & Spellacy P.C. as their attorney. The firm represent the Debtors in connection with the U.S. District Court action entitled "Securities & Exchange Commission v. Francisco Ilaramendi, et al." Christopher L. Brigham, Esq., principal of the firm, will charge $385 per hour for this engagement. The firm's other professionals and their compensation rates: Senior associates $310 Associates $215 Paralegal $205 The Debtors assure the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. BT & MK Energy & Commodities LLC objects to the Debtors' request because to pay the fees of the firm is BTMK's cash collateral and the Debtors cannot adequately protect BTMK. Furthermore, the use of BTMK's funds to prosecute a lawsuit against BTMK is not authorized by the applicable provisions of the Bankruptcy Code, says Benjamin H. Price, Esq., at Gardere Wynne Sewell LLP, attorney of BTMK. The Debtors tell the Court that their obligations under a loan agreements with certain banks were acquired by BT & MK Energy & Commodities LLC through a purchase sale that closed on Aug. 14, 2010. The adversary proceeding directly impacts About ReoStar Energy Fort Worth, Texas-based ReoStar Energy Corporation is engaged in the exploration, development and acquisition of oil and gas properties, primarily located in the state of Texas. The Company owns roughly 9,000 acres of leasehold, which include 5,000 acres of exploratory and developmental prospects as well as 4,000 acres of enhanced oil recovery prospects. The Company filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-47176) on Nov. 1, 2010. Bruce W. Akerly, Esq., and Arthur A. Stewart, Esq., at Cantey Hanger LLP, in Dallas, represent the Debtors in their restructuring efforts. Greenberg Taurig, LLP, serves as special corporate/securities counsel. Reostar Energy disclosed $15,335,337 in assets and $16,391,412 in liabilities. ReoStar Energy's bankruptcy case is jointly administered with ReoStar Gathering, Inc., ReoStar Leasing, Inc., and ReoStar Operating, Inc. ReoStar Energy is the lead case. No trustee was appointed in the Debtors' cases. On Jan. 10, 2011, Michael McConnell was appointed as Chapter 11 examiner in the Debtors cases. RESSLER HARDWOODS: Dist. Ct. Affirms Dismissal of Bankr. Counsel ---------------------------------------------------------------- District Judge Christopher C. Conner affirmed the order of the U.S. Bankruptcy Court for the Middle District of Pennsylvania, dated June 8, 2010, disqualifying Jacques H. Geisenberger, Jr., and his law firm, Jacques H. Geisenberger, Jr., P.C., from representing Ressler Hardwoods & Flooring, Inc., and directing the disgorgement of $17,500 in professional fees. Geisenberger claims the Bankruptcy Court erred in three respects: (1) by misconstruing the provisions of 11 U.S.C. Sec. 327 and F.R.B.P. 2014(a); (2) by misconstruing the relationship between the provisions of 11 U.S.C. Sec. 329(a) and Bankruptcy Rule 2016(b); and (3) by requiring the disgorgement of $17,500 in fees to the bankruptcy estate. The U.S. Trustee filed a motion to disqualify Geisenberger and disgorge all professional fees he received in connection with the Debtor's bankruptcy case, alleging deficiencies in the Debtor's application and Geisenberger's declaration and statement of attorney compensation including (1) Geisenberger's failure to disclose fee payments received in the year proceeding the Debtor's filing for bankruptcy, and (2) Geisenberger's failure to fully disclose his pre-petition connections with the Debtor. The case before the District Court is, JACQUES H. GEISENBERGER, JR., P.C. Appellant, v. ROBERTA A. DeANGELIS UNITED STATES TRUSTEE Appellee, No 1:10-CV-01660 (M.D. Pa.). A copy of the Court's Sept. 23, 2011 Memorandum is available at http://is.gd/YtueYXfrom Leagle.com. Lebanon, Pennsylvania-based Ressler Hardwoods & Flooring, Inc., is a flooring manufacturer owned and operated by Kenneth and Karen Ressler and their son Keith Ressler. The company filed for Chapter 11 bankruptcy (Bankr. M.D. Pa. Case No. 08-01878) on May 27, 2008, estimating $1 million to $10 million in both assets and debts. Judge Mary D. France presided over the case. Jacques H. Geisenberger, Jr., represented the Company in a variety of business matters pre-bankruptcy and was initially tapped to serve as the Debtor's bankruptcy counsel. The firm may be reached at: JACQUES H. GEISENBERGER, JR. P.C. 941 Wheatland Avenue, Suite 201 Lancaster, PA 17603 Tel: 717-397-3500 Fax: 717-299-5813 E-mail: attys@geiscoop.com The Debtor's Chapter 11 case was converted to Chapter 7 on Jan. 26, 2010. SCOTTSDALE CANAL: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Scottsdale Canal Development, LLC 14350 North Frank Lloyd Wright Boulevard, Suite 14 Scottsdale, AZ 85260 Bankruptcy Case No.: 11-26862 Chapter 11 Petition Date: September 21, 2011 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Charles G. Case, II Debtor's Counsel: John J. Fries, Esq. RYLEY CARLOCK & APPLEWHITE 1 N. Central Avenue, #1200 Phoenix, AZ 85004-4417 Tel: (602) 440-4819 Fax: (602) 257-6919 E-mail: jfries@rcalaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $50,000,001 to $100,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by the manager of Scottsdale Canal Equity, LLC. SEA HORSE REALTY: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------ Chris Bagley at Triangle Business Journal reports that Sea Horse Realty & Construction Co. filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Eastern District of North Carolina on Sept. 21, 2011, a step that allows it to delay payment of debt obligations while it reorganizes its business. According to the report, the filing listed $3.1 million in liabilities and $1.8 million in assets, including a rental house whose value it estimates at $1.7 million. Sea Horse's top creditor is Bank of Currituck, which holds a $1.2 million loan. Representatives of Nags Head-based Sea Horse didn't return calls seeking comment. SEDONA DEVELOPMENT: Seeks Rejection of Creditor Plan Disclosures ---------------------------------------------------------------- Sedona Development Partners, LLC, and The Club at Seven Canyons, LLC, ask the U.S. Bankruptcy Court for the District of Arizona to deny approval of the Disclosure Statement explaining Plan of Reorganization proposed by Specialty Trust, Inc., et al., unless and until Specialty provides the requisite adequate information regarding the Creditor Plan. According to the Debtor, Specialty attempts to tout its proposed Creditor Plan as a superior alternative to the Debtors' proposed Second Amended Joint Plan of Reorganization. However, Specialty's proposed Creditor Plan is nothing more than a series of vague and misleading promises with no real proposal for implementation. The Creditor Disclosure Statement is devoid of significant material disclosures that are absolutely necessary to any determination whether to vote for or against the Creditor Plan. The Creditor Disclosure Statement, the Debtor adds, is also misleading in several material respects. As reported in the Troubled Company Reporter on Aug. 26, 2011, Creditors and parties-in-interest Specialty Trust, Inc., Specialty Mortgage Corporation, and Specialty Financial, have filed a competing plan of reorganization in the of the Debtors. According to the explanatory disclosure statement, the Competing Plan provides that Specialty will continue to operate the golf course and club. The permanent Clubhouse will be completed and the golf course will remain a private course. The creditor plan will propose the retention of strategic partners to operate the golf course and Club to maximize its profitability and provide the services to members. The treatment of claims under the Plan are: A. Class 1 (Priority Claims) will be paid in full, in cash, on or before the Effective Date. B. Class 2A (Allowed Secured Claim of Seven Canyons Recap) will be paid in full, with interest at the Plan Rate, over a period of 8 years from the proceeds of the sale of Villa Fractional interests. C. Class 2B (Allowed Secured Claims of Developer Finance) will be paid in full, with interest at the Plan Rate, over seven years. Developer Finance will receive quarterly interest only payments at the Plan Rate starting 90 days after the Effective Date. D. Class 2C (Allowed Secured Claims of 7C Clubhouse Lenders) will be voided, and its claim will be treated as a general unsecured claim in Class 4. If, the Court determines that 7CCL's liens are valid, 7CCL's Allowed Secured Claim will be paid in full, with interest at the Plan Rate, over eight years from the proceeds of the sale of the Villa Fractional interests. E. Class 2D (Allowed Secured Claims of Specialty Trust) will exchange its claim for an equity in Reorganized Debtor. As a result, Debtors' estates will be relieved of the obligation to pay over $66 Million. F. Class 2E (Allowed Secured Claim of Yavapai County) will be paid in full within 90 days after the Effective Date. G. Class 2F (Allowed Secured Claim of Villas Association) will be satisfied by a one-time payment of $100,000 on the Effective Date. The Reorganized Debtor will pay to Villas Association $500 per month for each unsold developer unit. H. Class 3 (Allowed Unsecured Claims of Club Members) will be rejected pursuant to the Creditor Plan. I. Class 4 (Allowed General Unsecured Claims) will share pro-rata in a distribution of $200,000 plus 50% of the net litigation recoveries. J. Class 5 (Allowed Claims of Williams Scotsman) will be paid $66,000 plus applicable sales tax in exchange for full title to the Clubhouse Units. K. Class 6 (Allowed Claims of GECC Reorganized Debtor) post- petition liabilities with respect to the rejected leases will be allowed as a general administrative claim. L. Class 7 (Allowed Claims of Colonial Pacific) post-petition liabilities with respect to the rejected leases will be allowed as a general administrative claim. M. Class 8 (Allowed Unsecured Claims of the Villas Association) will reclassified as Class 2-F Allowed Secured Claims. N. Class 9 (Allowed Unsecured Claims of the Road Association) will not receive any distribution under the Creditor Plan. O. Class 10 (Allowed Unsecured Claims of Seven Canyons Lot Holdings) will share, pro-rata, in a distribution of the sum of the lesser of $100,000 or the amount of the Allowed Unsecured Claims. P. Class 11 (Allowed Unsecured Claims of Cavan Related Entities) will share, pro-rata, in a distribution of the sum of the lesser of $100,000 or the amount of the Allowed Unsecured Claims. Q. Class 12 (Intercompany Claims by SDP and the Club Against Each Other) will be deemed waived and released as against each other and neither Debtor will recover anything from the other on account of such Intercompany Claims. R. Class 13 (Allowed Interests of SDP's Interest Holders) will be extinguished on the Effective Date. A copy of the disclosure statement explaining the Competing Plan is available at: http://bankrupt.com/misc/SEDONA_disclosurestatement.pdf 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. SHENGDATECH INC: Hires Skadden as Special Counsel ------------------------------------------------- ShengdaTech, Inc. seeks permission from the U.S. Bankruptcy Court District of Nevada to employ Skadden, Arps, Slate, Meagher & Flom LLP, as special counsel to the Debtor, acting through the special committee of the Board of Directors of the Debtor, nunc pro tunc to August 19, 2011. Skadden will render services, including: (a) continuing to advise the Special Committee in connection with the internal investigation into financial statement irregularities raised by the outside auditors for the Company; (b) representing the Special Committee in connection with the Chapter 11 case and various matters arising thereunder; including advising the Special Committee in its review and prosecution of matters requiring the Special Committee's approval or otherwise affecting the Special Committee's fulfillment of its duties; and (c) preparing on behalf of the Special Committee all motions, applications, answers, orders, reports and papers necessary in their role in the chapter 11 case. The firm's rates are: Personnel Rates --------- ----- Partners and of Counsel $795 - $1,095 Counsel/Special Counsel $770 - $860 Associates Level 7 $710 6 680 5 660 4 595 3 550 2 495 1 365 Legal Assistants $195 - $295 John K. Lyons, Esq., member at Skadden, attest that the partners, counsel and associates of Skadden do not hold or represent any interest adverse to the Debtor, its creditors, any other party-in interest in this bankruptcy case, their respective attorneys and investment advisors, the United States Trustee, or any person employed therein, with respect to the matters on which Skadden is to be employed. 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. On Aug. 23, 2011, the Court entered an interim order confirming the Board of Directors Special Committee's appointment of Michael Kang as the Debtor's chief restructuring officer. Alvarez & Marsal North America, LLC, is the Company's chief restructuring officer. SILVESTRI INVESTMENTS: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Silvestri Investments, LLC 3924 Silvestri Lane Las Vegas, NV 89120 Bankruptcy Case No.: 11-24961 Chapter 11 Petition Date: September 21, 2011 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Michael J. Dawson, Esq. MICHAEL J. DAWSON, CHTD. 515 S. Third Street Las Vegas, NV 89101 Tel: (702) 384-1777 E-mail: mdawson@lvcoxmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company�s list of its unsecured creditors filed with the petition does not contain any entry. The petition was signed by Romy Pantea, managing member. SOLUTIA INC: Moody's Affirms 'Ba3' Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service affirmed the Ba3 Corporate Family Rating (CFR) of Solutia Inc. (Solutia) and moved the outlook to positive from stable (see list below). In addition, Moody's affirmed the company's Speculative Grade Liquidity (SGL) rating of SGL-2. The positive outlook reflects the prospect of a continuing, sustainable, and significant improvement in operating income and credit metrics generated by Solutia's businesses over the next several years. If over the next three quarters these trends continue an upward move in the CFR is likely. This view of improved performance is supported by the performance in the past four quarters ending June 30, 2011. For the last twelve months ending June 30, 2011 EBITDA was up 8%, versus full year 2010, to $522 million. There has also been meaningful improvement in Funds From Operations rising to $388 million - an increase of 43% over fiscal year 2010 with FFO of $272 million (FFO - defined as Cash Flow From Operations not including changes in working capital). Solutia's improved performance is being aided by volume improvements across all business lines and geographies. "The profitability of Solutia's wholly owned operations continues to improve," stated Bill Reed, Vice President at Moody's. "Notwithstanding the recent downward adjustment to earnings guidance Moody's expects the cash generated in 2011 and 2012 will continue to improve Solutia's financial flexibility in managing significant debt maturities in 2017 and beyond." Ratings Affirmed -- Corporate Family Rating Ba3 Probability of Default Rating Ba3 Senior Secured Credit Facility due 2015 Ba1, LGD2, 19% Senior Secured Term Loan B due 2017 Ba1, LGD2, 19% 8.75% senior unsecured notes due 2017 B1, LGD5, 74% 7.875% senior unsecured notes due 2020 to B1, LGD5, 74% Outlook Moved to Positive from Stable RATING RATIONALE The Ba3 CFR reflects both the recent relatively stable operating performance, including margin improvement, in a difficult global economic environment, indicating the prospect for further healthy cash flow generation, notwithstanding incremental increases in debt as a function of bolt-on acquisitions to fund growth. The rating also incorporates Moody's anticipation that major material debt financed acquisitions are unlikely, and that Solutia's remaining business lines will generate, over time, cash flow that is positive and improving relative to existing debt levels. Management on September 14, 2011 lowered its earnings previous guidance downward for the full year between 7% and 9% to a range of $1.95 - $2.05 per share citing a slower than expected demand profile, primarily for products that serve truck and bus, solar, and electronic end markets, and continued raw material cost pressure. The Company continues to expect solid year-over-year growth in net sales and Adjusted EPS for the full-year 2011. In 2010 the company earned $1.57 a share. After emerging from bankruptcy in early 2008, Solutia remains leveraged with balance sheet debt of $1.36 billion at the end of June 2011. Leverage remains high, particularly after adjusting debt for rent and pensions, which adds roughly $95 million $283 million, respectively. Interest coverage for the twelve month period ending June 30, 2011 was 3.3X almost a half a turn better than the 3.7X posted at the end of 2010 and much better than the 4.6X posted at the end of 2009. In Moody's projections adjusted debt for year end 2011 is estimated at about $1.7 billion and pro forma adjusted debt to book capital would be just above 59%. Moody's notes that even with fresh start accounting, tangible net worth is a negative $470 million at the end of June 2011 nevertheless an improvement versus the negative $1 billion at the end of September 30, 2010. While Moody's recognizes that good progress has been made in the elimination, classification and/or sharing of environmental, legal and pension liabilities, there remains some uncertainty as to the ultimate scope of these liabilities, particularly the environmental liabilities. Moody's believes that these environmental liabilities are subject to changing governmental policy and regulations, discovery of unknown conditions, judicial proceedings, method and extent of remediation, existence of other potentially responsible parties and future changes in both measurement and remediation technologies. Additional positive factors supporting the ratings include strong geographic, product and operational diversity and sizeable market leadership in the markets Solutia serves. Other positive factors include a sizeable revenue base, projected to exceed $2.1 billion in 2012, and the ability to share on a 50/50 basis with Monsanto environmental liabilities at certain sites if the costs exceed $325 million. While the positive outlook reflects the high leverage at the end of 2011, Moody's expects at the end of 2012 leverage will likely move close to 3.0 times. In addition, Moody's concerns over Solutia's prior business profile were addressed with the sale in 2009 of the integrated nylon business. With the sale of this business Solutia's remaining businesses are both higher margin and less exposed to volatile raw material prices. Solutia's outlook also considers the strength of its franchise in terms of its market positions and long-lived customer relationships. Over time, if Solutia's credit metrics improve faster than expected, such that debt/EBITDA metrics improve to less than 3.2 times on a sustainable basis or if environmental liabilities were deemed to be much improved a rating upgrade could occur. If operating performance is weaker than anticipated such that debt to EBITDA exceeds 4.3 times or material increases in environmental liabilities were to occur, the outlook or rating could turn negative. The Ba1 senior secured rating recognizes that the credit facilities will be secured by a first-priority lien on all material property and assets (tangible and intangible) of the borrower and the guarantors. The B1 rating on the unsecured notes reflects their junior position in the capital structure and the prospect of limited protection after the first lien lenders have been provided for in a distressed scenario. The Speculative Grade Liquidity (SGL) SGL-2 rating reflects the company's good liquidity and Moody's expectation of reasonable retained cash flow, in excess of $300 million, for the fiscal year ending 2011. The rating is supported by Solutia's favorable debt maturity profile, ample availability under its revolving credit facility, and flexibility under the financial covenant for the company's credit facility. The principal methodologies used in rating Solutia was Global Chemical Industry published in December 2009. Other methodologies include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Solutia, headquartered in St. Louis, Missouri, produces and sells a diverse portfolio of performance materials and specialty chemicals. End markets for Solutia's products include automotive, architectural (residential and commercial), aerospace, process manufacturing, construction, electronic/electrical, and industrial. Net sales for the LTM period ending June 30, 2011 were $2.1 billion. SOLYNDRA LLC: Defaulted on $535MM Government Loan Pre-Bankruptcy ---------------------------------------------------------------- Deborah Solomon, writing for The Wall Street Journal, reports people familiar with the matter said Solyndra LLC had such steep financial problems in late 2010 that the company violated terms of its loan-guarantee agreement with the Department of Energy and technically defaulted on its $535 million loan. The sources told the Journal Solyndra ran so short of cash in December 2010 that it was unable to satisfy certain terms of its U.S. loan agreement, which required Solyndra to provide $5 million in equity to a subsidiary building its factory. Cash-flow problems prevented those payments. The failed solar-panel maker is under numerous criminal and congressional investigations. WSJ's Ryan Tracy reports a new Congressional report says warnings about Solyndra's competitive abilities came out before the government awarded the company a $535 million loan guarantee and the company's subsequent collapse. The Energy Department ultimately restructured the loan agreement to help keep the company afloat and Solyndra continued to draw money from its loan. The Journal notes Solyndra's cash-flow problems in late 2010 had previously come to light but it was not known that the company technically defaulted on its loan and violated its agreement with the U.S. government. According to the Journal, Solyndra's financial problems prompted the Energy Department early this year to allow it to reshuffle its debt. Under the arrangement, private investors agreed to provide a new $75 million loan and won the right to be paid ahead of the government if the company was liquidated. The Journal recounts Solyndra's problems came to a head in November 2010 when it told the Energy Department it needed $150 million to make it through early 2012, at which time it believed its cash flow would improve. On Dec. 1, 2010, it was unable to make a $5 million payment to its subsidiary and technically defaulted on its loan. The loan was officially restructured in February 2011, giving the company enough money to carry it through August. The company, which had drawn down $475 million of the U.S. loan as of Dec. 31, 2010, ended up borrowing $527 million before its bankruptcy. 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. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Solyndra LLC. SOLYNDRA LLC: Has Green Light to Pursue Asset Sale in October ------------------------------------------------------------- Liz Hoffman at Bankruptcy Law360 reports that Solyndra LLC asked a Delaware bankruptcy judge on Monday to grant a $4 million extension of its debtor-in-possession loan and confirm a scheduled auction of its assets next month, over the objection of creditors. According to Law360, the motion countered a request from unsecured creditors to push back a planned Oct. 28 auction of assets held by the company, whose Sept. 6 bankruptcy filing sparked congressional and criminal investigations, and raised concerns about the financial future of solar energy. Deborah Solomon, writing for The Wall Street Journal, reports that U.S. Bankruptcy Judge Mary Walrath in Delaware on Tuesday cleared the way for Solyndra LLC's assets to be auctioned next month. Solyndra is seeking to sell, subject to bigger and better offers, substantially all of their assets utilized in the ordinary course of operation of its business, including Solyndra's manufacturing plant and land , all associated fixtures and equipment, intellectual property, rights under executory contracts and leases, and any other business assets necessary for a turnkey sale of Solyndra's enterprise. The Debtors have proposed this schedule: Bid Deadline: Oct. 25, 2011, at 4:00 p.m. (prevailing Pacific time) Auction: Oct. 28, 2011, at 10:00 a.m. at the offices of Solyndra's counsel, Pachulski Stang Ziehi & Jones LLP, 150 California Street, 15th Floor, San Francisco, California Sale Hearing: Nov. 2, 2011, at 11:30 a.m. Objections Deadline: Oct. 19, 2011, at 4:00 p.m. Sale Closing: Dec. 1, 2011 The Debtors also proposed that: -- an offer letter must not request a "break-up fee," "overbid fee" or similar payment or any payment or reimbursement of any fee to its advisor(s), but may indicate a willingness to become a "stalking horse" bidder or bidders. -- grant the stalking horse protections in the form of payment, at any closing of the sale of the assets to a successful bidder that is not the stalking horse bidder, of a break-up fee payable solely out of the proceeds of sale that would not exceed 3% of the stalking horse bidder's baseline bid, plus reimbursement of reasonable out-of-pocket expenses payable solely out of proceeds of sale in an amount not to exceed $250,000. 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. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Solyndra LLC. SOLYNDRA LLC: Resolves Creditor Objections to Auction Plan ---------------------------------------------------------- Tom Hals at Reuters reports that Solyndra LLC has found some common ground with creditors that should take some potential sting out of a bankruptcy court hearing scheduled on Sept. 27, 2011. According to the report, the company said in court filings it resolved some creditor objections to its plan to auction its shuttered manufacturing business. Solyndra plans to sell its operations to repay its debts, although it has said the government may not get back its $535 million. Mr. Hals notes members of Congress are investigating how Solyndra secured a government loan guarantee in 2009, while at the same time private investors had serious doubts about its technology. On Friday, the company's chief executive, Brian Harrison, refused to answer questions from members of a Congressional panel zeroing in on the role political connections may have played in approving the loan guarantee, relates Mr. Hals. The report says Solyndra is still likely to face some opposition at the Sept. 27 hearing, where it will ask a judge to approve its plans for an Oct. 28, 2011, auction and a $4 million loan to pay a skeletal staff until the business is sold. The report relates that unsecured creditors, who may not collect anything on the $40 million they are owed, want the company to slow the sale process, which they called a "high-speed train wreck." Mr. Hals says the company's chief financial officer, W. G. Stover, told the bankruptcy court on Sept. 7, 2011, the company had been in discussion in August for $75 million in capital. If the company had raised that money, Mr. Stover indicated Solyndra could have potentially moved its business to a positive cash flow and survived. 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. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. SOUTHWEST SEAFOOD: Chapter 11 Case Dismissed on Sept. 7 ------------------------------------------------------- Phil Villarreal at Arizona Daily Star notes that the Chapter 11 bankruptcy case of Southwest Seafood Shoppes LLC, which operated Long John Silver's restaurants, was dismissed on Sept. 7, 2011, because the company is no longer operating. Eric Sparks, Esq., lawyer to John Willingham, the Debtor's owner, said Southwest Seafood Shoppes emerged from Chapter 11 bankruptcy after being relieved of its leases and franchise agreements and has ceased operations. Mr. Sparks said he represents neither Overboard nor J.P. Willingham III, the owner's son. The son managed Overboard #1 LLC, a new entity that took over a lease for Southwest Seafood Shoppes in late May after the Debtor defaulted. According to the report, in June, Southwest Seafood rebranded the restaurants as Overboard Seafood & Grill after severing ties with the mother ship and filing for bankruptcy. The report says Long John Silver's sued Southwest Seafood in U.S. Bankruptcy Court alleging that Overboard broke its franchise agreement by offering a menu with battered seafood in a fast-food format and failing to strip all the locations of Long John Silver's branding. "There have been numerous complaints to Long John Silver's reporting the poor quality of the food, service and facilities because the customers continue to believe that the restaurants are authorized Long John Silver's restaurants," says the report citing the lawsuit. The report says Long John Silver's sought damages for trademark infringement, an accounting of the company's profits, payment for using its trademarks after the franchise agreement was terminated, legal fees and an injunction that would have forced Southwest Seafood Shoppes to remove Long John Silver's branding and stop it from selling a competing product. Based in Tucson, Arizona, Southwest Seafood Shoppes LLC filed for Chapter 11 bankruptcy protection on May 17, 2011 (Bankr. D. Ariz. Case No. 11-14185). Judge James M. Marlar presides over the case. Eric Slocum Sparks, Esq., at Eric Slocum Sparks PC, represents the Debtor. The Debtor listed assets of $100,600, and debts of $1,217,000. SPECTRAWATT INC: Court Approves King & Spalding as Bankr. Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized SpectraWatt Inc. to employ King & Spalding LLP as its bankruptcy counsel. According to the Troubled Company Reporter on Sept. 6, 2011, as counsel, K&S will: (a) advise the Debtor with respect to its powers and duties as a debtor-in-possession in the continued management and operation of its business; (b) protect and preserve the bankruptcy estate of the Debtor, including the prosecution and defense of actions on the Debtor's behalf; (c) prepare all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtor's estates; (d) negotiate and prepare a plan of reorganization, a disclosure statement, and all related documents; (e) negotiate and prepare documents relating to the disposition of assets; (f) advise the Debtor with respect to federal and state regulatory matters; and (g) advise the Debtor on finance, and finance-related matters and transactions, and matters relating to the sale of the Debtor's assets. The Debtor will pay K&S for services at hourly rates and reimburse K&S for reasonable and necessary expenses. The K&S 2011 fee rates for attorneys expected to work on this case range from $480 to $775 per hour for attorneys and $250 to $295 per hour for document clerks and legal assistants. On March 11, 2011, the Debtor paid K&S a $100,000 retainer to secure legal fees and expenses. The entire Retainer remains intact and has not been drawn upon by K&S. Mark W. Wege, Esq., a partner at K&S, attested that the Firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. 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: Hires Ray Quinney & Nebeker as Bankruptcy Counsel ---------------------------------------------------------------- Spring Pointe Development LLC seeks permission from the U.S. Bankruptcy Court for the District of Utah, Central Division, to employ Ray Quinney & Nebeker P.C. as its general bankruptcy counsel. Ray Quinney & Nebeker will render services, including: a) preparing on behalf of the Debtor any necessary motions, applications, answers, orders, reports, and papers, as required by applicable bankruptcy or non-bankruptcy law dictated by the demands of the case, or requites by the Court, and to represent the Debtor in proceeding or hearings related thereto; b) assisting the Debtor in analyzing and pursuing possible business organization; c) assisting the Debtor in analyzing and pursuing any proposed disposition of assets of the Debtor's estate. To the best of the Debtor's knowledge, neither RQN nor its attorneys have any undisclosed connection with the Debtor, or any one of its creditors or any party in interest, or its respective attorneys or accountants. To the best of the Debtor's knowledge, RQN and its attorneys are "disinterested persons" as provided in 11 U.S.C. Sections 101(14) and 327 and do not represent or hold an undisclosed interest adverse to the interest of the Debtor or its estate. Michael R. Johnson, a Shareholder and Director of RQN, will be the principal attorney handling this case for the Debtor. Mr. Johnson's standard hourly rate is $360. The firm's rates are: Personnel Rates --------- ----- Shareholders $210 to $360/ hour Of Counsels $255 to $290/ hour Associates $160 to $220/ hour Paralegals $115 to $135/ hour 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. 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. ST. JOSEPH HEALTH: Moody's Reviews 'B2' Rating for Downgrade ------------------------------------------------------------ Moody's Investors Service has placed the B2 rating assigned to St. Joseph Health Services of Rhode Island ("St. Joseph") on Watchlist for possible downgrade (see Rated Debt below). The Watchlist action follows the receipt of the St. Joseph's unaudited ten months of fiscal year (FY) 2011 financial statements ended July 31, 2011, which shows a sharp decline in unrestricted cash and investments and continued financial difficulties. A multi-notch rating downgrade is possible. Moody's expect to complete its review in the next 90 days. The principal methodology used in this rating was Not-for-Profit Hospitals and Health Systems published in January 2008. SUMMER VIEW: Wants to Employ Cirrus Asset as Asset Manager ---------------------------------------------------------- Summer View Sherman Oaks LLC asks the Court for authority to employ Cirrus Asset Management, Inc. to manage a 169-unit apartment building located at 15353 Weddington St., Sherman Oaks, CA 91411, the Debtor's only asset. The Debtor tells the Court of its dissatisfaction of the previous manager, Clyde Holland and his company Holland Residential (California), Inc. The Debtor relates that HRC's personnel have significantly overstepped the boundaries allowed of the management company of the Property and as a result, stolen records were not reported, two overlapping insurance policies were obtained, no insurance premiums were paid, and wrong banking institution was insured for the Property. The Debtor will pay Cirrus a management fee amounting $4,600 a month or 3% of monthly revenue generated by the Property, whichever is greater. In addition, Cirrus agrees to manage the Property pursuant to an operating budget approved by the U.S. Bankruptcy Court and to comply with all other requirements imposed by the U.S. Bankruptcy Court and the U.S. Trustee's office. Steve Heimler, the president of Cirrus, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Summer View Sherman Oaks LLC Summer View Sherman Oaks LLC, aka Summer View Sherman Oaks Apartments LLC, a single-asset real estate company, is the owner of a 169-unit apartment building locate at 15353 Weddington Street, in Sherman Oaks, California. The Company filed for bankruptcy under Chapter 11 (Bankr. C.D. Calif. Case No. 11-19800) on Aug. 15, 2011. The West Hollywood, California-based Company estimated assets and liabilities of $10 million to $50 million. Judge Alan M. Ahart presides over the case. Terry D. Shaylin, Esq., at Karasik Law Group, LLP, serves as the Debtor's bankruptcy counsel. The petition was signed by Sonia Sobol, member. SUMMIT BRANTLEY: To Liquidate Assets Under Chapter 7 ---------------------------------------------------- Ned B. Hunter at the Jackson (Tenn.) Sun reports that Summit Brantley Building Innovations had its Chapter 11 bankruptcy filing converted to a Chapter 7 bankruptcy case on Sept. 21, 2011, after a motion filed in August by the U.S. Trustee for the Western District of Tennessee stated the company had not complied with the original bankruptcy plan. Mr. Hunter says the Company must now sell off its assets to pay secured creditors. According to the report, the motion listed about six plan violations that included failure to pay approximately $75,000 to priority unsecured creditors and failure to pay quarterly fees owed to the U.S. trustee. "The Debtor has failed to comply with the terms of its own Plan, and has materially defaulted on the terms of that Plan," the motion stated. In November 2010, the Bankruptcy Court approved a plan that would allow former workers to receive a portion of their owed wages by the end of 2010. The court's ruling means only Summit Brantley's secured creditors will receive any payments from the company. The report relates that secured creditor, First State Bank, already has claimed the assets from the company that secured the bank's loan. TAYLOR BEAN: Trustee Sues Deloitte for $7.6BB Over Fraud -------------------------------------------------------- Keith Goldberg at Bankruptcy Law360 reports that Deloitte & Touche LLP was hit with two suits Monday in Florida seeking $7.6 billion in damages claiming the auditing firm was "grossly negligent" in failing to detect a massive criminal fraud carried out by executives of Taylor Bean & Whitaker Mortgage Corp. The suits, filed by bankruptcy trustee Neil F. Luria and Ocala Funding LLC, a wholly owned subsidiary of Taylor Bean, claim Deloitte, which audited Taylor Bean from 2002 until 2009, certified the company's annual financial statements while ignoring "obvious red flags." About Taylor Bean Taylor, Bean & Whitaker Mortgage Corp. grew from a small Ocala- based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States. Taylor Bean sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009. Taylor Bean filed the Chapter 11 petition three weeks after federal investigators searched its offices. The day following the search, the Federal Housing Administration, Ginnie Mae and Freddie Mac prohibited the company from issuing new mortgages and terminated servicing rights. Taylor Bean estimated more than $1 billion in both assets and liabilities in its bankruptcy petition. Jeffrey W. Kelly, Esq., and J. David Dantzler, Jr., Esq., at Troutman Sanders LLP, in Atlanta, Ga., and Russel M. Blain, Esq., and Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser, PA, in Tampa, Fla., represent the Debtors. Paul Steven Singerman, Esq., and Arthur J. Spector, Esq., at Berger Singerman PA, in Miami, Fla., represent the Committee. BMC Group, Inc., serves as the claims and noticing agent. TEXAS STAR: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------ Walt Nett at Avalanche-Journal reports that Texas Star Refreshments filed for Chapter 11 protection in the U.S. Bankruptcy Court in Lubbock, Texas, on Sept. 21, 2011. According to the report, the Company was found guilty earlier this year of misappropriating trade secrets and trying to sabotage a competitor. Mr. Nett says the Company estimated its assets at between $500,000 and $1 million, and its debts at between $1 million and $10 million. In June, a Lubbock County District Court jury awarded Custom Food Group, a competitor, $894,000 plus interest and court costs after deciding the couple that founded Texas Star, Rodney and Donna Wilson, had misappropriated trade secrets, and interfered with Custom's business relationships, says Mr. Nett. Texas Star Refreshments is a vending machine servicing company. THAMES PRINTING: Enters Chapter 7 After Failing to Meet Deadline ---------------------------------------------------------------- James Mosher at The Bulletin reports that Thames Printing Co. failed to meet a Sept. 13 deadline to answer a liquidation petition from creditors that would force the sale of assets to pay creditors, including Lindenmeyr Munroe, a paper supplier claiming to be owed $551,652. Mr. Mosher notes, two days later, U.S. Bankruptcy Court Judge Albert S. Dabrowski issued an order for relief under Chapter 7 of the Bankruptcy Code. According to the report, the order requires Thames to produce statements of assets and liabilities that include the names and addresses of all its creditors. The statements have to be filed by Sept. 30, according to the order. "Compliance with these requirements is mandatory," Judge Dabrowski wrote. The report relates that John J. O'Neil, of Hartford, Conn., has been appointed trustee in the case. A creditors' meeting has been scheduled for Oct. 17 at the Hartford courthouse. The report notes lawyer Ronald Chorches, of Wethersfield, will represent Thames at the October meeting. David Van Grouw, a New Jersey attorney, represents the creditors that filed the Aug. 22 petition. Mr. Mosher says Thames closed its plant Aug. 15 after Norwich Public Utilities cut power to the facility. Former employees say Blinderman dismissed most of his 60 employees, although state Department of Labor spokesman Paul Oates said his department was never notified. Three of the Company's creditors -- all of which are manufacturers and suppliers of paper and paper products -- are seeking to force the Company into Chapter 7 bankruptcy in the U.S. Bankruptcy Court in Connecticut in a bid to recoup nearly $619,000. Lindenmeyr Munroe, whose headquarters are in Purchase, N.Y., claims it is owed $551,652. Case Paper Co. of Harrison, N.Y., claims it is owed $65,472, and Ariva Distribution Inc. of Cheshire claims it is owed $1,674. TRADE UNION: Court OKs Winthrop Couchot as Committee Counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Trade Union International, Inc. and Duck House, Inc. sought and obtained permission from the U.S. Bankruptcy Court to retain Winthrop Couchot Professional Corporation as the panel's general insolvency counsel. The Firm will render these services to the Creditors' Committee: * Provide legal advice with respect to the Committee's duties, responsibilities, and powers in the Debtors' bankruptcy cases; * Assist in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors and their insiders and affiliates; * Provide legal advice and representation with respect to the negotiation, confirmation, and implementation of a Chapter 11 plan; * Provide legal advice with respect to the administration of the Debtors' cases, the distribution of the Debtors' assets, the prosecution of claims against third parties, and any other matters relevant to the Debtors' cases; * Provide legal advice and representation, if appropriate, with respect to the appointment of a trustee or examiner; and * Provide legal advice and representation in any legal proceeding, whether adversary or otherwise, involving the interests represented by the Committee, and the performance of other legal services as may be required by the Committee in furtherance of the interests of general unsecured creditors in the Debtors' cases. The Firm will be paid its regular hourly rates. The Firm's current hourly rates are: Attorneys: Marc J. Winthrop $725 Robert E. Opera $725 Sean A. O'Keefe, of counsel $725 Paul J. Couchot $725 Richard H. Golubow $575 Peter W. Lianides $575 Garrick A. Hollander $575 Kavita Gupta $495 Payam Khodadadi $395 Legal Assistants: P.J. Marksbury $250 Legal Assistant Associates $135 Robert E. Opera, Esq., a shareholder at Winthrop Couchot, attests that the Firm is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code and that the Firm does not have any interest adverse to the Debtors' estates. The Firm can be contacted at: Robert E. Opera, Esq. WINTHROP COUCHOT PC 660 Newport Center Drive, Suite 400 Newport Beach, CA 92660 Tel: 949-720-4100 Fax: 949-720-4111 E-mail: ropera@winthropcouchot.com About Trade Union Montclair, California-based Trade Union International Inc. supplies aftermarket aluminum alloy wheels and wheel and truck accessories. It filed for Chapter 11 bankruptcy protection on January 31, 2011 (Bankr. C.D. Calif. Case No. 11-13071). James C. Bastian, Jr., Esq., at Shulman Hodges & Bastian LLP, in Irvine, Calif., serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $11,350,971 in assets and $19,826,869 in liabilities. Affiliate Duck House, Inc., filed a separate Chapter 11 petition on January 27, 2011 (Bankr. C.D. Calif. Case No. 11-13072). Duck House, Inc., specializes is designing products for sports enthusiasts. Trade Union and Duck House are each owned one-half by Wen Pin Chang and one-half by Mei Lien Chang. TRIBUNE CO: Committee Asks for Dismissal of Suits vs. D&Os ---------------------------------------------------------- Pursuant to Rule 7041 of the Federal Rules of Bankruptcy Procedure, the Official Committee of Unsecured Creditors seeks permission from Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to dismiss certain preference actions against current officers and directors of Tribune Company. The actions seek to recover approximately $594,973. The November 29, 2010 Insider Preference Standing Order granted the Creditors' Committee standing to commence and prosecute causes of action under Sections 547 and 550 of the Bankruptcy Code against certain current and former officers and directors and certain business entities for amounts received in the year before the Petition Date. The Insider Preference Standing Order also provided that until the occurrence of a termination date, currently set on October 14, 2011, neither the Debtors nor the Creditors' Committee could settle the Insider Preference Actions without the other's consent. The amounts at issue in the Insider Preference Actions range from $3,750 to $1 million. Of the Insider Preference Actions, 91 have been filed against current officers and directors by the Debtors and seek to recover approximately $27.8 million. In June 2011, the Creditors' Committee was approached by the Employee Compensation Defendants Group, a group of 80 Insider preference Defendants, which are current directors of the Debtors and represented by Frank/Gecker LLP. In a June 23, 2011 teleconference with the Creditors' Committee, the ECDG gave a presentation regarding, among other things, the negative effective the Insider Preference Actions are having on employee morale and the Debtors' business. The Creditors' Committee then investigated and deliberated over the proper course of action with respect to the 91 Insider Defendants who are Tribune employees. The Creditors' Committee determined that while a majority of the Insider Preference Actions is too valuable to be dismissed, the Insider Preference Actions that seek recovery from current Tribune employees of transfers below $50,000 are of minimal value when compared to the potential deleterious effect of those actions on Tribune employees. The Creditors' Committee also conferred with the Debtors who agreed that the harm of pursuing the Threshold Insider Preference Actions outweighs the benefit of potentially recovering on claims worth $594,973 in all. The Creditors' Committee specifically proposes to dismiss the Threshold Insider Preference Actions, namely: Adversary Amount of Defendant Case No. Claim --------- --------- --------- William C. O'Donovan 10-55652 $48,194 Justo Rey 10-55630 48,194 Henry M. Segal 10-55640 43,542 John D. Worthington IV 10-55670 42,693 Roger D. Williams 10-55662 42,003 Judith A. Juds 10-55748 41,682 Anne S. Kelly 10-55751 41,353 Michael E. Weiner 10-55679 39,642 Robert Christie 10-55728 31,091 Chris L. Fricke 10-55726 28,800 Cam B. Trinh 10-55664 28,800 Feli M. Wong 10-55668 28,800 Karlene W. Goller 10-55739 26,440 Robin A. Mulvaney 10-55789 26,440 Charles F. Ray 10-55626 20,180 Patricia G. Cazeaux 10-55727 20,180 Sharon A. Silverman 10-55649 20,180 Alice T. Iskra 10-55741 6,743 Laura L. Tarvainen 10-55644 3,750 Howard Seife, Esq., at Chadbourne & Parke LLP, in New York, argues that the Creditors' Committee's decision to seek dismissal of the Threshold Insider Preference Actions falls within its business judgment. He cites these business justifications for dismissing the Threshold Insider Preference Actions, including: (i) the relatively modest recovery that could be obtained even if every single one of the claims were successfully prosecuted; (ii) the benefit of allowing employees who are being sued for modest sums to avoid being distracted by these lawsuits; and (iii) the employee goodwill that would be generated by dismissing lawsuits where asserted recoveries are modest. The Court will consider the Creditors' Committee's request on October 19, 2011. Objections are due no later than October 12. ��About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/�--is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008.��The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent.��As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts.��Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors.��AlixPartners LLP is the Committee's financial advisor.��Landis Rath Moelis & Company serves as the Committee's investment banker.��Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Two competing Chapter 11 plans are being pursued in the Chapter 11 cases of Tribune. One plan is being co-proposed by the Debtors, the Official Committee of Unsecured Creditors, Oaktree Capital Management, L.P., Angelo Gordon & Co., L.P.�and JPMorgan Chase Bank, N.A. A second plan is being pursued by Aurelius Capital Management LP, on behalf of its managed�entities; Deutsche Bank Trust Company Americas, in its capacity as successor indenture trustee for certain series of senior notes; Law Debenture Trust Company of New York, in�its capacity as successor indenture trustee for certain�series of senior notes; and Wilmington Trust Company, in its�capacity as successor indenture for the PHONES Notes. Judge Kevin J. Carey has not issued a ruling on the plan. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News.��The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/�or215/945-7000) TRIBUNE CO: Hearing on Changes to Confirmation Transcript Oct. 4 ---------------------------------------------------------------- Bankruptcy Judge Kevin Carey adjourned the hearing to consider the Tribune Co.'s request to make changes to the confirmation transcript from Sept. 14, 2011 to Oct. 4, 2011. Tribune sought to implement proposed changes to the official confirmation trial transcript regarding the Competing Chapter 11 Plans: * the Second Amended Joint Plan of Reorganization proposed by ��the Debtors, the Official Committee of Unsecured Creditors, ��Oaktree Capital Management, L.P., Angelo Gordon & Co., L.P. ��and JPMorgan Chase Bank, N.A.; and * the Third Amended Joint Plan of Reorganization filed by ��Aurelius Capital Management LP, on behalf of its managed ��entities; Deutsche Bank Trust Company Americas, in its ��capacity as successor indenture trustee for certain series ��of senior notes; Law Debenture Trust Company of New York, in ��its capacity as successor indenture trustee for certain ��series of senior notes; and Wilmington Trust Company, in its ��capacity as successor indenture for the PHONES Notes James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, discloses that since the conclusion of the trial on the confirmation of a plan of reorganization in the Debtors' Chapter 11 cases, the DCL Plan Proponents and the Noteholders have worked to complete the record of the confirmation proceedings. Specifically, on June 21, 2011, the Noteholders provided the DCL Plan Proponents with extensive proposed corrections to the official trial transcript.��The DCL Plan Proponents reviewed the proposed changes, most of which were non-controversial, noted their disagreement with respect to some of the proposed changes, and identified a small number of additional changes that the DCL Plan Proponents believed should be made.��The parties then conferred and resolved any differences, and the Debtors have worked with Diaz Data Services to implement the proposed changes. The parties prepared an Errata to the Official Confirmation Trial Transcript that reflects the changes that Diaz determined were correct and that have been implemented, a full-text copy of which is available for free at: http://bankrupt.com/misc/Tribune_ErrataSheettoConfTranscript.pdf ��About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/�--is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008.��The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent.��As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts.��Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors.��AlixPartners LLP is the Committee's financial advisor.��Landis Rath Moelis & Company serves as the Committee's investment banker.��Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Two competing Chapter 11 plans are being pursued in the Chapter 11 cases of Tribune. One plan is being co-proposed by the Debtors, the Official Committee of Unsecured Creditors, Oaktree Capital Management, L.P., Angelo Gordon & Co., L.P.�and JPMorgan Chase Bank, N.A. A second plan is being pursued by Aurelius Capital Management LP, on behalf of its managed�entities; Deutsche Bank Trust Company Americas, in its capacity as successor indenture trustee for certain series of senior notes; Law Debenture Trust Company of New York, in�its capacity as successor indenture trustee for certain�series of senior notes; and Wilmington Trust Company, in its�capacity as successor indenture for the PHONES Notes. Judge Kevin J. Carey has not issued a ruling on the plan. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News.��The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/�or215/945-7000) TRIBUNE CO: No Objections to New Mgt. Incentive Plan ---------------------------------------------------- As reported by TRIBUNE BANKRUPTCY NEWS early this month, Tribune Company and its debtor affiliates are seeking authority from Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to continue their self-funding annual cash Management Incentive Plan for 2011 for approximately 640 management employees, including top executives, with an aggregate payout opportunity of approximately: ��(a) $16.4 million -- representing a 50%-of-target payout -- if ��the Company achieves "threshold" performance equal to ��approximately 91% of its "planned" 2011 consolidated ��operating cash flow goal included in the 2011 operating ��plan that was approved by the Company's Board of Directors ��on February 2, 2011; ��(b) $32.4 million -- representing a 100%-of-target payout -- ��if the Company achieves "target" performance equal to ��approximately 106% of its "planned" 2011 consolidated OCF ��goal included in the 2011 operating plan that was approved ��by the Board on February 2, 2011; and ��(c) $42.5 million -- representing a 130%-of-target payout -- ��if the Company achieves "maximum" performance equal to ��approximately 141% of its "planned" 2011 consolidated OCF ��goal included in the 2011 operating plan that was approved ��by the Board on February 2, 2011. Counsel to the Debtors, James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, tells Judge Carey that no answer, objection or other responsive pleading to the Motion to Approve 2011 Management Incentive Plan was filed with the Court. The objection deadline to the 2011 MIP Motion was extended to September 26, 2011 for the Official Committee of Unsecured Creditors. The Creditors' Committee does not object to the Debtors' Motion but has asked a modification to the proposed order granting the Debtors' Motion, Mr. Conlan related. The modification to the proposed order provides that if, at any time prior to the payment of the 2011 Management Incentive Plan award, the Court identifies, in a decision, order or otherwise, a 2011 MIP Participant whom, in the Court's opinion, may have acted in a manner inconsistent with his or her fiduciary duties or may have acted with willful misconduct at any time during the course of these bankruptcy cases, the Creditors' Committee may bring a motion to prohibit the identified 2011 MIP Participant from receiving all or part of his or her 2011 MIP award payment. The Debtors thus ask the Court to enter the revised proposed order at a hearing scheduled for October 4, 2011. Mr. Conlan also certified that no objection or response to the Debtors' accompanying request to file under seal an exhibit to the 2011 MIP Motion was filed. ��About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/�--is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008.��The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent.��As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts.��Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors.��AlixPartners LLP is the Committee's financial advisor.��Landis Rath Moelis & Company serves as the Committee's investment banker.��Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Two competing Chapter 11 plans are being pursued in the Chapter 11 cases of Tribune. One plan is being co-proposed by the Debtors, the Official Committee of Unsecured Creditors, Oaktree Capital Management, L.P., Angelo Gordon & Co., L.P.�and JPMorgan Chase Bank, N.A. A second plan is being pursued by Aurelius Capital Management LP, on behalf of its managed�entities; Deutsche Bank Trust Company Americas, in its capacity as successor indenture trustee for certain series of senior notes; Law Debenture Trust Company of New York, in�its capacity as successor indenture trustee for certain�series of senior notes; and Wilmington Trust Company, in its�capacity as successor indenture for the PHONES Notes. Judge Kevin J. Carey has not issued a ruling on the plan. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News.��The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/�or215/945-7000) TRIKEENAN TILEWORKS: Swanzey Factory Will Close by End of October ----------------------------------------------------------------- Sarah Trefethen at SentinelSource.com reports that the Swanzey factory and Keene storefront of Trikeenan Tileworks will be closed by the end of October. The report says approximately 16 people work for Trikeenan in New Hampshire. Most of those employees have been offered work in the tile maker's upstate New York facility, said Benjamin E. Marcus, Esq. -- bmarcus@dwmlaw.com -- of the Drummond Woodsum law firm in Portland, Maine. Mr. Marcus represents the Elgin Butler company of Austin, Texas, which Tuesday took control of the 20-year-old company when it emerged from Chapter 11 bankruptcy protection. The report says Trikeenan founders Stephen and Kristen Powers announced last week they have left the company. Elgin Butler said he had attempted to purchase the company before it entered bankruptcy a year ago, but the couple rejected its offers, which Kristen Powers said they considered unfair. Both the Powers and Elgin Butler submitted restructuring plans to the bankruptcy court - Elgin Butler having acquired the debt of one of Trikeenan's creditors. Ms. Powers said she called the move a "hostile takeover," but Marcus said the primary difference between the two plans was that Elgin Butler was prepared to infuse the company with cash that the Powers did not have available. The consolidation of the company into its New York location is a matter of "financial necessity" that was part of both restructuring plans, Mr. Marcus said. About Trikeenan Tileworks Trikeenan Tileworks -- http://www.trikeenan.com/-- made and sold tiles. Trikeenan Tileworks, Inc., Trikeenan Tileworks, Inc. of New York, and Trikeenan Holdings, Inc., filed for Chapter 11 bankruptcy (Bankr. D. N.H. Lead Case No. 10-13725) on Aug. 30, 2010, estimating $500,000 to $1 million in assets, and $1 million to $10 million in debts. Jennifer Rood, Esq., at Bernstein Shur, in Manchester, New Hampshire, serves as the Debtors' counsel. UNITED CONTINENTAL: UAL Asks Bankr. Court to Stop Pilots' Suit -------------------------------------------------------------- Reorganized Debtors UAL Corp. and UAL Loyalty Services, Inc. ask Judge Eugene R. Wedoff of the U.S. Bankruptcy Court for the Northern District of Illinois to hold United Pilots for Justice, Inc. and more than 700 individual plaintiffs in a civil action before the U.S. District Court for the District of Columbia in contempt of court for proceeding with litigation in violation of the Debtors' Second Amended Joint Plan of Reorganization and its related confirmation order dated January 20, 2006. As previously reported, the individual former United pilots and UPFJ filed an action on December 29, 2010 against the Reorganized Debtors and their board of directors for alleged violations of the Employee Retirement Income Security Act. The Plaintiffs allege that the Reorganized Debtors "hid" the value of their Mileage Plus(R) program from the Pension Benefit Guaranty Corporation, retired pilots, and other creditors. Had the Reorganized Debtors informed PBGC of the "true" value of Mileage Plus(R), the Reorganized Debtors could have emerged with the United Airlines, Inc. Pilot Fixed Benefit Income Plan intact, or the PBGC would have received a better recovery under a global settlement agreement with the Reorganization Debtors, according to the Plaintiffs. The Plaintiffs' evasion of the Bankruptcy Code, the Reorganization Plan, and the Confirmation Order has caused the Reorganized Debtors to incur substantial costs, which continue to accrue as they defend against the discharged claims, James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, argues. Mr. Sprayregen insists that the Bankruptcy Court had jurisdiction to enforce the discharge injunction under the Reorganization Plan. Indeed, "A discharge injunction is 100 percent within the core jurisdiction of bankruptcy. And if someone takes action to collect a pre-petition debt that was discharged in a bankruptcy, the only place to go to enforce that injunction is in the court that issued it," Mr. Sprayregen quotes Judge Wedoff at an August 17, 2011 hearing. There is no serious doubt that the Plaintiffs' claims -- that the Reorganized Debtors fraudulently induced PBGC to enter into the PBGC Settlement Agreement -- are discharged, Mr. Sprayregen contends. He stresses that the PBGC's decision to terminate the Pilot Plan, all of PBGC's diligence on the Reorganized Debtors, all negotiations of the consideration PBGC would receive from the Reorganized Debtors due to pension plan termination, and the PBGC Settlement Agreement itself, all took place prior to confirmation. Because all of the Reorganized Debtors' conduct with respect to the PBGC and the Pilot Plan occurred prior to confirmation, the Plaintiffs' claims are discharged pursuant to Section 1141(d)(1) of the Bankruptcy Code, he avers. He adds that the Reorganized Debtors and their former board members are protected by the exculpation provisions in the Reorganization Plan. "Essentially, the Reorganization Plan and Confirmation Order are clear on their faces, and the majority of the individual plaintiffs were active participants in these Chapter 11 cases who objected to the ALPA Agreement, PBGC Settlement Agreement, confirmation of the Reorganization Plan," Mr. Sprayregen says. There is simply no good faith basis for the Plaintiffs to have filed the lawsuit, five years after what the U.S. Court of Appeals for the Seventh Circuit called "water under the bridge," he maintains. The Reorganized Debtors further ask the Bankruptcy Court to require the Plaintiffs and their counsel to reimburse them for all costs and expenses associated with defending against the discharged lawsuit, reopening their Chapter 11 cases, and prosecuting this motion. The Bankruptcy Court will consider the Reorganized Debtors' request on October 11. Objections were due September 23. ��About United Continental United Continental Holdings, Inc. (NYSE: UAL) is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, these airlines operate a total of approximately 5,800 flights a day to 371 airports throughout the Americas, Europe and Asia from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York, San Francisco, Tokyo and Washington, D.C. United and Continental are members of Star Alliance, which offers more than 21,200 daily flights to 1,172 airports in 181 countries worldwide through its 28 member airlines. United's and Continental's more than 80,000 employees reside in every U.S. state and in many countries around the world.��For more information about United Continental Holdings, Inc., go to UnitedContinentalHoldings.com.��For more information about the airlines, see�http://www.united.com/�and http://www.continental.com/,�andfollow each company on Twitter and Facebook. UAL Corp and its affiliates including United Airlines filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 02-8191) on Dec. 9, 2002 .��James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts.��Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors.��Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006.��The Company emerged from bankruptcy on Feb. 1, 2006. United Continental carries 'B2' corporate family and probability of default ratings, with stable outlook, from Moody's, 'B' issuer credit ratings, with stable outlook, from Standard & Poor's, and 'B' issuer default rating from Fitch. Fitch upgraded United Continental's IDR from 'B-' to 'B' in September 2011, citing, "The upgrade follows a year of significant debt reduction and strong free cash flow (FCF) generation since the closing of the United-Continental merger on Oct. 1, 2010.��In the face of heavy fuel cost pressure during the first half of 2011, UAL has consistently reported industry-leading revenue per available seat mile (RASM) growth while funding heavy debt maturities out of internally generated cash flow. UNITED CONTINENTAL: United Pilots Want Review of 2006 Plan Order ---------------------------------------------------------------- The United Pilots for Justice, Inc. asks the U.S. Bankruptcy Court for the Northern District of Illinois to correct the January 20, 2006 confirmation order for the Reorganized Debtors' Second Amended Joint Plan of Reorganization by clarifying that the injunction provisions of the Confirmation Order do not enjoin the pilots' post-confirmation claims subject to the lawsuit in the U.S. District Court for the District of Columbia. In an accompanying memorandum of law and declaration, Kevin McBride, Esq., at McBride Law, PC, in Rolling Hills Estates, California, argues that the lawsuit is not subject to the Confirmation Order and discharge injunction under the Reorganization Plan for these reasons: (1) The Employee Retirement Income Security Act Claims alleged in the lawsuit are post-confirmation claims; and (2) The lawsuit is not a core proceeding in bankruptcy and the Bankruptcy Court lacks subject matter jurisdiction to enter into a final order disposing of the lawsuit. The Plaintiffs believed that the injunction provisions of the Confirmation Order did not apply to their claims under the ERISA since those claims had not and could not have arisen prior to their individual receipt of the PBGC notification of reduced benefits, which were received approximately eight years after the Chapter 11 filings, Mr. McBride argues. It was in light of this belief that the Plaintiffs commenced the lawsuit against the Reorganized Debtors, he reasons. Mr. McBride also stresses that the termination of the Pilot Plan did not occur until June 13, 2006, about six months after entry of the Confirmation Order. He insists that the Plaintiffs' claims in the District Court are post-confirmation claims because: (i) the PBGC Settlement Agreement became a final order post- confirmation; (ii) the discharge injunction can only apply to claims that existed at the time of plan confirmation, not to claims where actual harm has not yet occurred; and (iii) the Plaintiffs in the lawsuit had no actual legal right, contingent or otherwise, unit after the confirmation order on January 20, 2006. Mr. McBride further contends that the statutory language of the ERISA's exclusive jurisdiction provisions prevent the Bankruptcy Court from exercising its subject matter jurisdiction over the District Court Complaint. Since the Plaintiffs' claims neither arise in the Chapter 11 proceedings nor under Title II of the ERISA, the ERISA claims are not core proceedings in the Bankruptcy Court, he asserts. For these reasons, the Bankruptcy Court should leave the balance of equities between the ERISA and bankruptcy law to the District Court, he maintains. Reorganized Debtors Object "The Plaintiffs cite no legal basis for correcting a confirmation order a half-decade after it was entered and long after the Reorganization Plan confirmed in that order was fully consummated, because there is no such basis," counsel to the Reorganized Debtors, Michael B. Slade, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, asserts. Mr. Slade clarifies that the Reorganized Debtors are not asking the Bankruptcy Court to enter a final order dismissing the District Court Complaint. Instead, the Reorganized Debtors are asking the Bankruptcy Court to hold the Plaintiffs in contempt for violating the discharge injunction, an issue over which the Bankruptcy Court clearly has core jurisdiction under a well- established body of case law, he says. The Bankruptcy Court's ability to enforce the Confirmation Order is confirmed by the Reorganization Plan and the Confirmation Order, Mr. Slade asserts. Moreover, the discharge imposed by the Confirmation Order applies to all claims, whether or not they would have been "core" claims if and when asserted in the Bankruptcy Court, he points out. At best, the impact of a discharge injunction on later litigation is naturally decided by the very Bankruptcy Court that confirmed the plan of reorganization and entered the discharge injunction, he avers. Thus, there is no legal basis to amend the injunction or the plan this far after it was entered but, even if there was a basis, it would not make sense here, where the claims being asserted in the District Court Complaint were clearly discharged by the confirmation of the Reorganization Plan, Mr. Slade maintains. The hearing on the UPFJ's Motion, originally scheduled for September 7, 2011, is continued to October 11, 2011. ��About United Continental United Continental Holdings, Inc. (NYSE: UAL) is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, these airlines operate a total of approximately 5,800 flights a day to 371 airports throughout the Americas, Europe and Asia from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York, San Francisco, Tokyo and Washington, D.C. United and Continental are members of Star Alliance, which offers more than 21,200 daily flights to 1,172 airports in 181 countries worldwide through its 28 member airlines. United's and Continental's more than 80,000 employees reside in every U.S. state and in many countries around the world.��For more information about United Continental Holdings, Inc., go to UnitedContinentalHoldings.com.��For more information about the airlines, see�http://www.united.com/�and http://www.continental.com/,�andfollow each company on Twitter and Facebook. UAL Corp and its affiliates including United Airlines filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 02-8191) on Dec. 9, 2002 .��James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts.��Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors.��Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006.��The Company emerged from bankruptcy on Feb. 1, 2006. United Continental carries 'B2' corporate family and probability of default ratings, with stable outlook, from Moody's, 'B' issuer credit ratings, with stable outlook, from Standard & Poor's, and 'B' issuer default rating from Fitch. Fitch upgraded United Continental's IDR from 'B-' to 'B' in September 2011, citing, "The upgrade follows a year of significant debt reduction and strong free cash flow (FCF) generation since the closing of the United-Continental merger on Oct. 1, 2010.��In the face of heavy fuel cost pressure during the first half of 2011, UAL has consistently reported industry-leading revenue per available seat mile (RASM) growth while funding heavy debt maturities out of internally generated cash flow. UNITED CONTINENTAL: Files 3rd Qtr. Investor Update -------------------------------------------------- United Continental Holdings, Inc., filed with the U.S. Securities and Exchange Commission on September 21, 2011, an investor update providing forward-looking information for the third quarter and full year 2011. United Continental Vice President and Controller Chris Kenny noted that all year-over-year comparisons in the Sept. 21 Investor Update are based on the pro-forma combined company financial statements previously published in United Continental's investor updates in November 2010, December 2010, April 2011, June 2011 and July 2011. Capacity The Company estimates its third quarter 2011 consolidated domestic available seat miles to be down 1.9% and consolidated international ASM to be up 0.6% for a consolidated system ASM decrease of 0.8% as compared to the same period in the prior year. Despite severe weather during the quarter, the Company completed a higher percentage of flights than expected, driving higher capacity than prior guidance, Mr. Kenny related. Revenue Guidance The Company expects third quarter consolidated Passenger Revenue per ASM to grow between 9.5% and 10.5% year-over-year, which implies year-over-year PRASM growth of approximately 10% to 12% for the month of September. As with June 2011, the Company's September year-over-year PRASM growth will be reduced due to the impact of the trans-Atlantic joint venture revenue-sharing agreement, which is accounted for as Passenger Revenue in the third quarter and is entirely booked in the month of September. While this agreement was effective January 1, 2010, the agreement was finalized in the fourth quarter of 2010 and all related activity was recorded as Other Operating Expense. Thus, the 2010 revenue results do not reflect the negative impact of the joint venture obligation. Adjusting for the impact of the trans- Atlantic joint venture related revenue adjustment in September 2010, the Company expects September 2011 PRASM to grow approximately 12% to 14% year-over-year. The Company expects third quarter Cargo and Other Revenue to be between $1.11 billion and $1.14 billion. Non-Fuel Expense Guidance The Company expects third quarter consolidated cost per ASM (CASM), excluding fuel, profit sharing, certain accounting charges and merger-related expenses to be up 1.7% to 2.7%. Fuel Expense The Company estimates its consolidated fuel price, including the impact of settled cash hedges, to be $3.15 per gallon for the third quarter based on the forward curve as of Sept. 14, 2011. Non-Operating Income/(Expense) The Company estimates third quarter non-operating expense to be between $250 million and $260 million. Non-operating income/(expense) includes interest expense, capitalized interest, interest income and other non-operating income/(expense). This guidance includes a charge of approximately $37 million related to fuel hedge ineffectiveness for the third quarter, which is an acceleration of hedge settlement expense that would have been booked at the time of cash settlement through the fuel expense line, Mr. Kenny explained. The Company's fuel expense guidance for future periods reflects the impact of this charge, he said. Profit Sharing and Stock-based Compensation The Company pays 15% of total GAAP pre-tax profits, excluding special items and stock compensation expense, as profit sharing to employees when pre-tax profit excluding special items, profit sharing expense and stock compensation program expense exceeds $10 million. Profit sharing expense is accrued on a year-to-date basis, and $90 million has been accrued through the second quarter of 2011. Stock compensation expense for the purposes of the profit sharing calculation in the third quarter is estimated to be $9 million, and $27 million year-to-date through the third quarter of 2011. Capital Expenditures and Scheduled Debt and Capital Lease Payments In the third quarter, the Company expects approximately $225 million of gross capital expenditures and approximately $190 million of net capital expenditures, both excluding purchase deposits of $51 million. The Company estimates scheduled debt and capital lease payments for the third quarter to be $0.3 billion. During the quarter, the Company made approximately $0.2 billion of debt and capital lease pre-payments, bringing total debt and capital lease payments to $0.5 billion. Cash Balance The Company expects to end the third quarter with approximately $8.4 billion of unrestricted cash, cash equivalents and short- term investments. Taxes The Company currently expects to record minimal cash taxes in third quarter 2011, Mr. Kenny discloses. Advance Booked Seat Factor (Percentage of Available Seats that are Sold) Compared to the same period last year, for the next six weeks, mainline domestic advance booked seat factor is up 1.2 points, mainline international advance booked seat factor is down 3.5 points, mainline Atlantic advance booked seat factor is down 3.9 points, mainline Pacific advance booked seat factor is down 5.1 points and mainline Latin America advance booked seat factor is down 1.2 points. Regional advance booked seat factor is down 0.6 points. Fuel Price Sensitivity The Company's estimated settled hedge impacts at various crude oil prices, based on the hedge portfolio as of Sept. 14, 2011, are: Cash Settled Crude Oil Price Hedge Impact 1Q11 2Q11 3Q11 4Q11 FY11 --------------- ------------ ---- ---- ---- ---- ---- $115 per Barrel Fuel Price Excluding Hedge ($/gal) $2.94 $3.37 $3.86 $3.81 $3.50 Increase/ (Decrease) to Fuel Expense ($/gal) ($0.16)($0.27)($0.13)($0.27)($0.21) $105 per Barrel Fuel Price Excluding Hedge ($/gal) $2.94 $3.37 $3.62 $3.57 $3.28 Increase/ (Decrease) to Fuel Expense ($/gal) $0.16 ($0.27)($0.11)($0.14)($0.17) $95 per Barrel Fuel Price Excluding Hedge ($/gal) $2.94 $3.37 $3.39 $3.34 $3.26 Increase/ (Decrease) to Fuel Expense ($/gal) ($0.16)($0.27)($0.10)($0.03)($0.14) $88.91 per Fuel Price Barrel Excluding Hedge ($/gal) $2.94 $3.37 $3.24 $3.19 $3.19 Increase/ (Decrease) to Fuel Expense ($/gal) ($0.16)($0.27)($0.09) $0.01 ($0.13) $85 per Barrel Fuel Price Excluding Hedge ($/gal) $2.94 $3.37 $3.15 $3.10 $3.14 Increase/ (Decrease) to Fuel Expense ($/gal) ($0.16)($0.27)($0.09) $0.02 ($0.13) $75 per Barrel Fuel Price Excluding Hedge ($/gal) $2.94 $3.37 $2.91 $2.86 $3.02 Increase/ (Decrease) to Fuel Expense ($/gal) ($0.16)($0.27)($0.08) $0.07 ($0.11) $65 per Barrel Fuel Price Excluding Hedge ($/gal) $2.94 $3.37 $2.67 $2.62 $2.90 Increase/ (Decrease) to Fuel Expense ($/gal) ($0.16)($0.27)($0.07) $0.11 ($0.10) A full-text copy of the Sept. 21 Investor Update is available for free at http://ResearchArchives.com/t/s?7700 ��About United Continental United Continental Holdings, Inc. (NYSE: UAL) is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, these airlines operate a total of approximately 5,800 flights a day to 371 airports throughout the Americas, Europe and Asia from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York, San Francisco, Tokyo and Washington, D.C. United and Continental are members of Star Alliance, which offers more than 21,200 daily flights to 1,172 airports in 181 countries worldwide through its 28 member airlines. United's and Continental's more than 80,000 employees reside in every U.S. state and in many countries around the world.��For more information about United Continental Holdings, Inc., go to UnitedContinentalHoldings.com.��For more information about the airlines, see�http://www.united.com/�and http://www.continental.com/,�andfollow each company on Twitter and Facebook. UAL Corp and its affiliates including United Airlines filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 02-8191) on Dec. 9, 2002 .��James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts.��Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors.��Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006.��The Company emerged from bankruptcy on Feb. 1, 2006. United Continental carries 'B2' corporate family and probability of default ratings, with stable outlook, from Moody's, 'B' issuer credit ratings, with stable outlook, from Standard & Poor's, and 'B' issuer default rating from Fitch. Fitch upgraded United Continental's IDR from 'B-' to 'B' in September 2011, citing, "The upgrade follows a year of significant debt reduction and strong free cash flow (FCF) generation since the closing of the United-Continental merger on Oct. 1, 2010.��In the face of heavy fuel cost pressure during the first half of 2011, UAL has consistently reported industry-leading revenue per available seat mile (RASM) growth while funding heavy debt maturities out of internally generated cash flow. UNITED CONTINENTAL: Expects 2012 Capacity to Remain Flat -------------------------------------------------------- United Continental Holdings, Inc. expects 2012 consolidated capacity to be flat, according to Jeffery Smisek, Chief Executive Officer Jeffery of United Continental at the Deutsche Bank 2011 Aviation and Transportation Conference held on Sept. 13, 2011. Against this backdrop, United intends to reduce domestic capacity while growing international capacity with the delivery of six B787 Dreamliners, Mr. Smisek related. In addition to the six B787s, United expects to take delivery of 19 B737-900ER, he said. Otherwise, United leads network carriers in terms of revenue, pre-tax margin, liquidity and has exceeded the cost of capital, according to Mr. Smisek. The airline is also focused on generating returns that exceed its cost of capital over the business cycle, he noted. Among other things, United is investing in better seats and redefining inflight entertainment experience, he added. Mr. Smisek disclosed that since closing the merger on October 1, 2010, the merged company: * made $2.4 billion of debt and capital lease payments, including prepayment of more than $480 million of debt; * built a $1.8 billion base of unencumbered assets, half of which are Section 1110 aircraft; and * estimated $1.5 billion of scheduled debt payments in 2012. As to contract issues at the merged airline, United is in joint negotiations with the pilots group, and has upcoming joint negotiations with the flight attendants, mechanics and ramp agents, according to Mr. Smisek. United is also negotiating with passenger service agents. Mr. Smisek stated that the merger is progressing and is on track to achieve 25% of synergies in 2011. Specifically, United has captured more than $130 million in synergies year to date and on track to achieve 25% of $1 billion to $1.2 billion run rate synergies in 2011. He cited these integration milestones in 2011: * cross-fleeting * completed 1/3 of airport co-locations system-wide * insurance * prescription benefits * inflight magazine * rebranded hubs: O'Hare International Airport, San Francisco International Airport, Cleveland-Hopkins International Airport and Denver International Airport. United is awaiting a single operating certificate from the Federal Aviation Administration by year-end of 2011, passenger service system by the first quarter of 2012. Full-text copies of the slides used at the Deutsche Bank conference are accessible for free at: http://ResearchArchives.com/t/s?76f7 United Senior Vice President for Financial Planning & Analysis John Rainey delivered a presentation at Dahlman Rose Global Transportation Conference held on September 7, 2011. Mr. Rainey's presentation is substantially similar to Mr. Smisek's report. Full-text copies of the slides used at the Dahlman Rose conference are available for free at: http://bankrupt.com/misc/United_Sept7DahlmanSlides.pdf * * * In a separate article by The Houston Chronicle, Mr. Smisek revealed that he is pleased with how the merger is progressing. The CEO acknowledged that there is a still a long list of things and decisions that "they need to make that are surprising only in their length." Details include minute things as creating cocktail napkins with the company's new logo and deciding which crated dogs face when placed on aircraft loading belt, the Houston Chronicle cited. On the more important aspects of the merger, Mr. Smisek stated that reaching joint collective bargaining agreements will not happen by year-end, the Houston Chronicle relayed. "It was a very ambitious goal, probably overly ambitious," the CEO was quoted as saying by the Houston Chronicle. Likewise, union leaders voice disappointment that they have not reached collective bargaining contracts with United, the Houston Chronicle noted. "We thought we'd be a lot further along with negotiations for a new contract," stated Capt. Jay Pierce, who leads the ALPA at Continental, according to the report. The pilots started negotiating a new contract with United since August 2010 and have tried to speed up talks, Mr. Pierce said, the report related. As the merger advances, the new carrier will have a smaller presence in Houston, the Houston Chronicle noted. New United is occupying space in two downtown buildings, including Continental's former headquarters at 1600 Smith, the report stated. Only about half of 3,000 people who originally worked downtown for Continental will remain there, according to the report. Mr. Smisek stated that the merger has strengthened the company amidst expensive fuel, high unemployment, natural disasters and political turmoil overseas, the Houston Chronicle stated. "We're making money," Mr. Smisek told the Houston Chronicle. "Years ago, the airlines in that set of circumstances would be scrambling for cash and worrying about their survival. A lot of things, I think, have changed over the years so that we are in a much better position to make money domestically and internationally." Airlines Expected to Gain $7-Bil. Profit in 2011 The International Air Transport Association revised its forecast for airlines' annual profit from $4 billion to $6.9 billion, according to The Triangle Business Journal. The IATA explained that the economic slowdown has limited effect on demand for airline travel and that it will translate to higher-than-expected profits for the airlines, the report stated. The revised profit forecast takes into account airfare hikes and increases for items like excess baggage, the report said. Despite the higher costs, passenger numbers at U.S. airports have changed little since last year, according to the report. Notwithstanding the high estimated annual profit, the IATA forecasted that annual profit for 2011 will be just 1.2%, which will drop further to 0.8% next year, the report noted. The IATA estimated that the forecasted profit could drop to $4.9 billion in next year, according to The Triangle Business Journal. ��About United Continental United Continental Holdings, Inc. (NYSE: UAL) is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, these airlines operate a total of approximately 5,800 flights a day to 371 airports throughout the Americas, Europe and Asia from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York, San Francisco, Tokyo and Washington, D.C. United and Continental are members of Star Alliance, which offers more than 21,200 daily flights to 1,172 airports in 181 countries worldwide through its 28 member airlines. United's and Continental's more than 80,000 employees reside in every U.S. state and in many countries around the world.��For more information about United Continental Holdings, Inc., go to UnitedContinentalHoldings.com.��For more information about the airlines, see�http://www.united.com/�and http://www.continental.com/,�andfollow each company on Twitter and Facebook. UAL Corp and its affiliates including United Airlines filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 02-8191) on Dec. 9, 2002. James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring effort. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for United on Jan. 20, 2006.��The Company emerged from bankruptcy on Feb. 1, 2006. United Continental carries 'B2' corporate family and probability of default ratings, with stable outlook, from Moody's, 'B' issuer credit ratings, with stable outlook, from Standard & Poor's, and 'B' issuer default rating from Fitch. Fitch upgraded United Continental's IDR from 'B-' to 'B' in September 2011, citing, "The upgrade follows a year of significant debt reduction and strong free cash flow (FCF) generation since the closing of the United-Continental merger on Oct. 1, 2010.��In the face of heavy fuel cost pressure during the first half of 2011, UAL has consistently reported industry-leading revenue per available seat mile (RASM) growth while funding heavy debt maturities out of internally generated cash flow. WASHINGTON MUTUAL: Class Nears $209MM Deal Over MBS Allegations --------------------------------------------------------------- Liz Hoffman at Bankruptcy Law360 reports that a class of investors in Washington state on Sunday sought final approval of a $209 million settlement with Washington Mutual Inc. that would end a three-year battle over allegations that the defunct bank misled the market and artificially inflated the prices of its mortgage backed securities. Law360 says the settlement, the result of court-ordered mediation earlier this year, guarantees the plaintiffs at least some recovery from the rapidly shrinking coffers and insurance held by the bank, whose 2008 collapse was the biggest bank failure in U.S. history. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the 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 Bankruptcy Court entered a 107-page opinion determining that the global settlement agreement, among certain parties including WMI, the Federal Deposit Insurance Corporation and JPMorgan, upon which the Plan is premised, and the transactions contemplated therein, are fair, reasonable, and in the best interests of WMI. However, 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. WaMu filed a Modified Sixth Amended Joint Plan and a related Supplemental Disclosure Statement, which it believes would address the Bankruptcy Court's concerns. On Sept. 13, 2011, Judge Walrath denied confirmation of WaMu's Modified Sixth Amended Plan and granted equity committee standing to prosecute claims for equitable disallowance but stayed the ruling pending mediation. Judge Walrath scheduled a status hearing for Oct. 7, 2011, at 11:30 a.m. to consider the issues to be referred to a mediator. WaMu said it would seek confirmation of a revised plan "as soon as practicable." The Plan proposes to pay more than $7 billion to creditors and incorporates a global settlement agreement resolving issues among the Debtors, JPMorgan Chase, the Federal Deposit Insurance Corp. in its corporate capacity and as receiver for WaMu Bank, certain large creditors, certain WMB senior noteholders, and the creditors' committee. The Settlement Noteholders are Appaloosa Management, L.P., Aurelius Capital Management LP, Centerbridge Partners, LP, and Owl Creek Asset Management, L.P. WASHTRONICS OF AMERICA: Case Summary & Creditors List ----------------------------------------------------- Debtor: Washtronics of America 6160 N. Hollywood Boulevard, Suite 109 Las Vegas, NV 89115 Bankruptcy Case No.: 11-24915 Chapter 11 Petition Date: September 21, 2011 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Matthew C. Zirzow, Esq. GORDON & SILVER, LTD. 3960 Howard Hughes Parkway, 9th Floor Las Vegas, NV 89169 Tel: (702) 796-5555 E-mail: bankruptcynotices@gordonsilver.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company�s list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nvb11-24915.pdf The petition was signed by Richard Guy Girardin, president. WITSOP DEVELOPMENT: Two Parcels Auctioned Off Last Week ------------------------------------------------------- Michele Morgan Bolton at The Boston Globe reported that two parcels of land that were part of a 100-plus-acre mixed-use development plan along Washington Street were slated to be sold at auction on Sept. 22, 201. The report said more than half of the land owned by a subsidiary of the Norwell-based Witsop Development Group was put up for sale by South Shore Savings Bank. The sale was originally planned for May, but was again postponed in July after the owners filed for bankruptcy protection. The report said auctioneer Daniel McLaughlin's Boston-based firm handled the sale for the bank. Mr. McLaughlin said the parcels went back on the books for auction on Sept. 22 after the bankruptcy claim was dismissed in court. The report noted that the parcels are part of the foundered Village of Hanover project, characterized in 2005 as an upscale lifestyle center that would enhance Hanover's growing main thoroughfare. The project was to include one section called Village Park, with more than 200,000 square feet of commercial and residential space, and another to be known as Village Commons, a 104-unit condo project. The report noted that one of the properties is the 56.23-acre site where the Village Commons part of the overall plan was to go. It has miles of infrastructure already in place, including roads that have been constructed, drainage systems, and curbs. The auctioneer may be reached at: Daniel McLaughlin MCLAUGHLIN & CO. LLC 31 New Chardon Street Boston, MA 02114 Tel: 617-646-1019 Fax: 617-646-1290 ZBB ENERGY: Significant Operating Losses Cue Going Concern Doubt ---------------------------------------------------------------- ZBB Energy Corporation filed on Sept. 8, 2011, its annual report on Form 10-K for the fiscal year ended June 30, 2011. Baker Tilly Virchow Krause, LLP, in Milwaukee, Wisconsin, expressed substantial doubt about ZBB Energy's ability to continue as a going concern. The independent auditors noted that the Company continues to incur significant operating losses and has an accumulated deficit of $55,343,683. The Company reported a net loss of $8.4 million on $1.8 million of revenues for fiscal 2011, compared with a net loss of $9.6 million on $1.5 million of revenues for fiscal 2010. The Company's balance sheet at June 30, 2011, showed $12.3 million in total assets, $8.2 million in total liabilities, and stockholders' equity of $4.1 million. A complete text of the Form 10-K is available for free at: http://is.gd/82twjE Menomonee Falls, Wisconsin-based ZBB Energy Corporation and its operating subsidiaries design, develop, and manufacture advanced energy storage, and power electronic systems to solve a wide range of electrical system challenges in global markets for utility, governmental, commercial, industrial and residential customers. * North Dallas Development Site in Receivership Sale ---------------------------------------------------- Steve Brown at The Dallas Morning News reports that the MidtownPark property along Meadow Road just east of North Central Expressway is being sold by court order. The one-time development site, which is almost 80 acres, spans almost nine vacant blocks along Meadow, Manderville Lane and Rambler Road, according to the report. * 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 ***