/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120102.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, January 2, 2012, Vol. 15, No. 1 Headlines 15-35 ELK: Case Summary & 13 Largest Unsecured Creditors 4KIDS ENTERTAINMENT: Termination of Yu-Gi-Oh! Contract Invalid AES EASTERN: AES Corp. Units Seek Ch. 11, To Give Up Two Plants AES EASTERN: Case Summary & 40 Largest Unsecured Creditors ALLEN CAPITAL: Reorganization Plan Declared Effective Last Month ARMORED AUTOGROUP: Moody's Alters Outlook on 'B2' CFR to Negative ATLAS PIPELINE: Moody's Withdraws 'Ba2' Sr. Secured Credit Rating ATRINSIC INC: Mkono Agrees to Buy Assets for $615,000 BAKERS FOOTWEAR: Steve Madden to Buy Wild Pair Trademark for $4MM BAY CONDOS: Case Summary & 3 Largest Unsecured Creditors BILLMYPARENTS INC: Amendment to Articles of Incorporation Okayed BOCA BRIDGE: Court Confirms Amended Reorganization Plan BRIGHAM EXPLORATION: Withdraws Registration of All Securities BRIGHAM EXPLORATION: Suspending Filing of Reports with SEC CAESARS ENTERTAINMENT: Amends Form S-1 Registration Statement CAPTAIN LIMOUSINES: Voluntary Chapter 11 Case Summary CDC PROPERTIES I: Court Confirms Modified Reorganization Plan CEGL, INC.: Voluntary Chapter 11 Case Summary CEMTREX INC: Delays Fiscal 2011 Form 10-K CENTRO PINTORES: Case Summary & 20 Largest Unsecured Creditors CHINA INTELLIGENT: Chief Financial Officer and Secretary Resigns DELTRON INC: Delays Form 10-K for Fiscal 2011 DGI SERVICES: Trustee Being Appointed in Involuntary Case DIABETES AMERICA: Court Confirms Ch. 11 Plan; Price Cut to $3.57MM DUNE ENERGY: Moody's Revises Default Rating Probability to 'Caa3' FIRST DATA: Fitch Affirms Junk Ratings on Six Note Classes FIRST MARINER: Chairman and CEO Edwin Hale Retires FRIENDLY ICE CREAM: Sun Capital Reacquiring Restaurant Chain GB HERNDON: Court Reject's Adams Bank's Sanctions Bid GOLDEN INDUSTRIAL: Case Summary & 12 Largest Unsecured Creditors GRAMERCY INSURANCE: A.M. Best Downgrades FSR to 'B' GSC GROUP: Chapter 11 Trustee Files New Plan Documents GSC GROUP: Black Diamond Amends Proposed Plan for Debtor HAWKINS TREE: Case Summary & 13 Largest Unsecured Creditors HCA HOLDINGS: Appoints Dr. Wayne Riley to Board of Directors HILLSIDE DAIRY: Case Summary & 20 Largest Unsecured Creditors IRVINE SENSORS: Incurs $15.7 Million Net Loss in Fiscal 2011 IRVINE SENSORS: Files Form S-8, Registers 1.2-Mil. Common Shares LITHIUM TECHNOLOGY: Incurs $947,000 Net Loss in Third Quarter MARKETING WORLDWIDE: Delays Form 10-K for 2011 MCCLATCHY CO: BNP Paribas Discloses 4.7% Equity Stake MT. VERNON: Can Use First Mariner Bank Cash Through Feb. 29 NEXT GENERATION: Cancels Agreements with Pegasus Energy NORTEL NETWORKS: 3rd Cir. Rules on Police Power Exception Issue NORTHAMPTON GENERATING: Will Have No Creditors' Panel PROPER POWER: Andrew Kacic Resigns as President PROTEONOMIX INC: Completes Payment for Clinical Trial of UMK-121 R. KUNTZMAN: Voluntary Chapter 11 Case Summary RITE AID: Files Form 10-Q, Incurs $51.9MM Net Loss in Q3 2012 SEARS HOLDINGS: Fitch Cuts LT Issuer Default Ratings to 'CCC' SECUREALERT INC: Incurs $9.8 Million Net Loss in Fiscal 2011 STELLAR GT: Receiver to Continue Managing Project Thru March 31 SUN CONSTRUCTION: Case Summary & 18 Largest Unsecured Creditors TELVUE CORP: Enters Into $5MM Line of Credit with H.F. Lenfest THIRD STREET: Involuntary Chapter 11 Case Summary TOWNSHIP OF WEEHAWKEN: Moody's Raises $5MM Bond Rating from 'Ba1' TRUMPET PROPERTIES: Case Summary & 20 Largest Unsecured Creditors VITRO SAB: Appeals Court Temporarily Stops Mexican Plan WASHINGTON MUTUAL: Given Nod for $50-Mil. Settlement with U.S. WESTMORELAND COAL: Kemmerer Deal No Impact on Moody's Ratings * 2011 Registered 23% Fewer Chapter 11 Bankruptcies * BOND PRICING -- For Week From Dec. 12 - 16, 2011 ********* 15-35 ELK: Case Summary & 13 Largest Unsecured Creditors -------------------------------------------------------- Debtor: 15-35 Elk L.I.C. Inc. 11 White Birch Road Syosset, NY 11791 Bankruptcy Case No.: 11-15816 Chapter 11 Petition Date: December 20, 2011 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Edward E. Neiger, Esq. NEIGER LLP 151 West 46th Street, 4th Floor New York, NY 10036 Tel: (212) 267-7342 Fax: (212) 918 3427 E-mail: eneiger@neigerllp.com Scheduled Assets: $2,750,000 Scheduled Liabilities: $4,844,129 The Company's list of its 13 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb11-15816.pdf The petition was signed by Angelina Kates, president. 4KIDS ENTERTAINMENT: Termination of Yu-Gi-Oh! Contract Invalid -------------------------------------------------------------- Bankruptcy Judge Shelley C. Chapman ruled that the licensing deal that let 4Kids Entertainment, Inc., bring the Yu-Gi-Oh! anime series to children of all ages in the United States and abroad was not effectively terminated by the Japanese consortium that controls the Yu-Gi-Oh! rights, and that the deal remains in full force and effect. Judge Chapman said the licensor did not effectively terminate the parties' 2008 agreement. The formal requirements of Paragraphs 12(a) and 15(c) of the 2008 Agreement were not satisfied, as 4Kids never received proper and effective notice that that a cure period was running and that the Licensor had triggered the 10-day termination window by sending a notice of breach. Moreover, even if notice had been proper and the cure period had begun to run or had run, it would have been inequitable and improper for the Licensor to continue negotiating with 4Kids throughout the cure period and abruptly terminate without providing a final opportunity to cure. Judge Chapman also said the termination was rendered ineffective because the $4.819 million amount asserted by the Licensor was materially incorrect and inaccurate; therefore, it could not and did not form a valid basis for termination. 4Kids generated more than $150 million in revenue between 2001 and 2009 from the anime series, which it shared with its licensor pursuant to the contractual arrangements between them. Sometime in 2009, for reasons that remain unclear, the relationship soured. The Consortium decided to conduct an audit of the royalties paid by 4Kids to the Consortium. Both 4Kids and the Consortium were troubled by the auditor's findings that there was allegedly a $4.8 million royalty underpayment. Over the course of many months, there ensued a series of increasingly heated letters, e-mails, and meetings between the parties and their counsel that failed to resolve the royalty issues. Like characters in the Yu-Gi-Oh series itself, 4Kids and the Consortium were locked in a high stakes duel over the future of the series in the Western world and, by extension, the survival of 4Kids as a going concern. On March 24, 2011, the Consortium attempted to end the duel by issuing a letter that purports to terminate the Amended and Restated Yu-Gi-Oh! Agreement dated and effective as of July 1, 2008. Days later, 4Kids sought chapter 11 protection and asserted that the termination letter was ineffective. The case is TV TOKYO CORPORATION and NIHON AD SYSTEMS, INC., Plaintiffs, v. 4KIDS ENTERTAINMENT, INC., Defendant and Counterclaim-Plaintiff, v. ASATSU-DK INC., NIHON AD SYSTEMS, INC., TELEVISION TOKYO CHANNEL 12, LTD and TV TOKYO CORPORATION, Counterclaim-Defendants, Adv. Proc. No. 11-02225 (Bankr. S.D.N.Y.). A copy of Judge Chapman's Dec. 29, 2011 Post-Trial Findings of Fact and Conclusions of Law is available at http://is.gd/Ffz8JAfrom Leagle.com. About 4Kids Entertainment New York-based 4Kids Entertainment, Inc., dba 4Kids, is an entertainment and media company specializing in the youth oriented market, with operations in these business segments: (i) licensing, (ii) advertising and media broadcast, and (iii) television and film production/distribution. The parent entity, 4Kids Entertainment, was organized as a New York corporation in 1970. 4Kids filed for Chapter 11 to protect its most valuable asset -- its rights under an exclusive license relating to the popular Yu-Gi-Oh! series of animated television programs -- from efforts by the licensor, a consortium of Japanese companies, to terminate the license and force 4Kids out of business. 4Kids, along with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-11607) on April 6, 2011. Kaye Scholer LLP is the Debtors' restructuring counsel. Epiq Bankruptcy Solutions, LLC, is the Debtors' claims and notice agent. BDO Capital Advisors, LLC, is the financial advisor and investment banker. EisnerAmper LLP fka Eisner LLP serves as auditor and tax advisor. 4Kids Entertainment disclosed $78,397,971 in assets and $86,515,395 in liabilities as of the Chapter 11 filing. On July 8, 2011, Tracy Hope Davis, the U.S. Trustee for Region 2, appointed three members to the official committee of unsecured creditors in the Chapter 11 cases. Hahn & Hessen LLP serves as counsel to the Committee. The Committee tapped Epiq Bankruptcy Solutions LLC as its information agent. The Consortium consists of TV Tokyo Corporation, which owns and operates a television station in Japan; ASATSU-DK Inc., a Japanese advertising company; and Nihon Ad Systems, ADK's wholly owned subsidiary. The Consortium is represented by: Kyle C. Bisceglie, Esq. Michael S. Fox, Esq. Ellen V. Holloman, Esq. Mason Barney, Esq. OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP Park Avenue Tower 65 East 55th Street New York, NY 10022 Tel: 212-451-2207 Fax: 212-451-2222 E-mail: kbisceglie@olshanlaw.com mfox@olshanlaw.com eholloman@olshanlaw.com mbarney@olshanlaw.com AES EASTERN: AES Corp. Units Seek Ch. 11, To Give Up Two Plants --------------------------------------------------------------- Fourteen units of AES Corp. filed Chapter 11 bankruptcy petitions on Dec. 30, 2011, citing the depressed economic environment for the electric power industry. Lead debtor AES Eastern Energy LP (Bankr. D. Del. Case No. 11-14138) estimated $100 million to $500 million in assets an up to $1 billion in liabilities. The Debtors either own or lease six coal-fired power plants in New York state. Parent AES Corp.'s unit AES NY acquired those coal- fired electricity generating power plants, which are located in the western and west-central part of New York State, for $950 million in 1998. Peter Norgeot, president of AES NY, LLC, explains in a court filing, "The Debtors are out of options. And out of time. After vigorously marketing their assets for almost a year and soliciting 58 potential buyers/investors with limited success, it is abundantly clear that -- in the current economic environment and with the Debtors' complicated leveraged lease structure -- an out- of-court restructuring or sale is not possible." Noteholders Get 2 Power Plants The Debtors have reached a comprehensive settlement agreement, pursuant to which two of their power plants will be transferred to an entity designated by holders of pass-through certificates issued by the owner-lessors of the two plants. The deal covers facilities that are currently under a sale leaseback transaction -- the Somerset facility located in Barker New York, and the Cayuga facility in Lansing, New York. The two facilities are the only plants currently in active operation. The Debtors will seek bankruptcy court approval of the settlement pursuant to F.R.B.P. Rule 9019. Mr. Norgeot says the settlement will preserve the going concern value of two of the power plants, reduce outstanding claims against the Debtors, and conserve the remaining assets of the Debtors' estates. The Debtors say that shuttering the Somerset and Cayuga facilities is not an option as the Debtors do not have sufficient liquidity to satisfy all the regulatory and operating hurdles associated with a cessation of operations. Bloomberg News notes that Moody's Investors Service in July lowered its rating of AES Eastern because competitors with gas- fired plants were benefiting from low natural gas prices while AES's operating costs had risen as a consequence of higher coal prices. AES Corp. had already written its interest in AES Eastern down to zero and was looking for a buyer, Moody's said at the time. AES EASTERN: Case Summary & 40 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: AES Eastern Energy, L.P. aka Kintigh, Miliken, Goudey and Greenidge 130 East Seneca Street Suite 505 Ithaca, NY 14850 Bankruptcy Case No.: 11- 14138 Debtor-affiliates that filed separate Chapter 11 petitions: Debtor Case No. ------ -------- AEE2, L.L.C. 11-14141 AES Cayuga, L.L.C. 11-14145 AES Creative Resources, L.P. 11-14139 AES Greenidge, L.L.C. 11-14147 AES Hickling, L.L.C. 11-14142 AES Jennison, L.L.C. 11-14144 AES New York Holdings, L.L.C. 11-14143 AES New York Surety, L.L.C. 11-14140 AES NY, L.L.C. 11-14146 AES NY2, L.L.C. 11-14148 AES NY3, L.L.C. 11-14150 AES Somerset, L.L.C. 11-14149 AES Westover, L.L.C. 11-14151 Type of Business: AES Eastern Energy, L.P. operates four coal- fired electricity generating facilities with a gross capacity of 1,169 MW, and of those four plants AEE leases two. AEE sells electricity into the spot market at prevailing New York Independent System Operator wholesale market prices. AEE is a special purpose entity that is indirectly wholly owned by AES Corp. Chapter 11 Petition Date: Dec. 30, 2011 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Debtors' Counsel : Drew G. Sloan, Esq. Mark D. Collins, Esq. Michael Joseph Merchant, Esq. RICHARDS LAYTON & FINGER, P.A. 920 North King Street Wilmington, DE 19801 Tel: (302) 651-7612 Fax: (302) 651-7701 E-mail: dsloan@rlf.com collins@RLF.com merchant@rlf.com - and - Marcia L. Goldstein, Esq. Joseph H. Smolinsky, Esq. WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 E-mail: marcia.goldstein@weil.com joseph.smolinsky@weil.com Adam P. Strochak, Esq. WEIL, GOTSHAL & MANGES LLP 1300 Eye Street, NW, Suite 900 Washington, DC 20005 Tel: (202) 682-7000 Fax: (202) 857-0940 E-mail: adam.strochak@weil.com Debtors' Investment Banker : BARCLAYS CAPITAL Debtors' Claims And Noticing Agent : KURTZMAN CARSON CONSULTANTS Lead Debtor's Estimated Assets: $100 million to $500 million Lead Debtor's Estimated Debts: $500 million to $1 billion The petition was signed by Peter Norgeot, general manager of AES Eastern Energy L.P. AES Eastern Energy, L.P.'s List of Its 40 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Deutsche Bank Trust Company Lease Payment $450,000,000 60 Wall Street, 27th Floor New York, NR 10005 The Bank of Nova Scotia Bank Loan $30,000,000 Scotia Plaza 44 King Street West Toronto, ON, CA CSX Trade Payable $4,579,233 P.O. Box 640839 Pittsburgh, PA 15264-0839 JP Morgan Tax Indemnity Undetermined 270 Park Ave New York, NY 10017 Union Bank of California Tax Indemnity Undetermined 400 California Street San Francisco, CA 94104 Pension Benefits Guaranty Pension Undetermined Corporation Liability 1200 K St NW Ste 340 Washington, DC 20005-4026 Peabody Coal Company Trade Payable $938,227 701 Market Street Suite 831 St. Louis, MO 63101-1826 Patriot Coal Trade Payable $774,866 12312 Olive Boulevard St. Louis, MO 63141 Norfolk Southern Corporation Trade Payable $537,249 125 Spring Street SW Atlanta, GA 30303 Fisher Mining Co. Trade Payable $421,000 40 Choate Circle Montoursville, PA 17754 Carmeuse Lime Canada Limited Trade Payable $385,420 P.O. T563724, Station A Toronto, ON, CA LaFayette Energy Co. Trade Payable $84,776 Chartis Insurance Trade Payable $80,134 GATX Rail Trade Payable $78,008 Steag Energy Services LLC Trade Payable $77,809 City Hill Construction Trade Payable $71,906 Frank Lill & Son Trade Payable $64,209 Tanner Industries Inc. Trade Payable $57,726 Zurich North America Trade Payable $50,237 TLT-Babcock, Inc. Trade Payable $48,913 Wiltsie Construction Co. Inc. Trade Payable $43,800 Weir Slurry Group Inc. Trade Payable $41,321 Riccelli Enterprise Inc. Trade Payable $41,000 MATCO Electric Corporation Trade Payable $40,402 AFP Group Inc. Trade Payable $39,692 Griffith Oil Co. Inc. Trade Payable $35,149 Solvay Finance (America) LLC Trade Payable $33,860 Legault Metal Inc. Trade Payable $29,082 Belt Maintenance & Supply Inc. Trade Payable $24,453 Morris Protective Service, Inc. Trade Payable $23,658 Linita Design & Manufacturing Trade Payable $21,119 Schutte Pulverizer Co. Inc. Trade Payable $20,384 HMT Inc. Trade Payable $17,964 CIR Electrical Constr. Corp. Trade Payable $17,500 Lacey Heavy Equipment Trade Payable $17,124 Composite Coatings, LLC Trade Payable $16,033 Manpower Inc. Trade Payable $14,415 Hohl Industrial Services, Inc. Trade Payable $13,622 Eastern Tank Services Division Trade Payable $11,895 Drum Oil & Propane Trade Payable $10,948 ALLEN CAPITAL: Reorganization Plan Declared Effective Last Month ---------------------------------------------------------------- Allen Capital Partners, LLC, in consultation with the Official Committee of Unsecured Creditors has designated Dec. 1, 2011, as the effective date of the Amended Fifth Plan of Reorganization for Allen Capital Partners, LLC. As reported in the Troubled Company Reporter on Oct. 17, 2011, the Court confirmed the ACP Plan after the lone objection from BBVA Compass Bank was withdrawn. Compass filed two proofs of claims against ACP. One claim relates to a loan to DLH to construct two warehouses which was secured by two warehouse properties owned by DLH and guaranteed by ACP. The two warehouses were sold by DLH during the bankruptcy case, with the consent of Compass, resulting in an allowed deficiency claim of $2,992,325. This claim is an allowed unsecured claim in the ACP case. The second claim filed by Compass relates to a loan to DLH secured by undeveloped real estate, which continues to be secured by real estate owned by DLH and is guaranteed by ACP. Compass asserts that the Compass claim against ACP arising from ACP's guarantee of Compass Land Loan is further secured by a pledge of interests by ACP and certain related entities in various entities owned by them, some of which own interests in DLH. ACP has filed an objection to the Compass claim against ACP, related to the Compass Land Loan, including objections to both whether it should be determined contingent until DLH fails to perform on the loan and whether the pledge of interests by ACP and certain related entities is valid and enforceable and the value of such interests. Compass withdrew its objection at the confirmation hearing with the understanding that the determination of the secured claim of Compass asserted against ACP under the Compass Land Loan and the determination of any objection against Compass as requested in the ACP Plan will be determined in a subsequent hearing and Compass' objection to the ACP Plan will be resolved as part of the resolution of ACP's objection to Compass's claim against ACP. The ACP Plan has the support of the Unsecured Creditors group. The ACP Plan will establish a Creditors Trust and the initial Trustee will be SLTN TRUST LLC d/b/a Solution Trust. The ACP Plan does not include related debtors Richard S. Allen Inc. or Richard S. Allen. At the pendency of its bankruptcy case, ACP eliminated $50 million of its debt. A copy of Judge Hale's FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER CONFIRMING THE AMENDED FIFTH JOINT PLAN OF REORGANIZATION FOR ALLEN CAPITAL PARTNERS, LLC, is available at http://is.gd/MpuYzFfrom Leagle.com. About Allen Capital Allen Capital Partners, LLC, and subsidiary DLH Master Land Holding, LLC, are the developers of Dallas Logistics Hub, a 6,000- acre multimodal logistics park 12 miles (19 kilometers) from downtown Dallas. Allen Capital Partners, LLC, dba The Allen Group, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10- 30562) on Jan. 25, 2010. Mark MacDonald, Esq., and Daniel J. Artz, Esq., at MacDonald + MacDonald, P.C., in Dallas, Tex. represent the Debtor. Lain, Faulkner & Co. is the Debtor's financial advisor. The Company disclosed $220,325,201 in assets and $160,622,236 in liabilities as of the Chapter 11 filing. The Debtor's affiliate -- DLH Master Land Holding, LLC, dba The Allen Group -- filed a separate Chapter 11 bankruptcy petition. Another affiliate, Visalia, California-based Richard S. Allen, Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D. Texas Case No. 10-33211) on May 3, 2010. Patrick J. Neligan, Jr., Esq., at Neligan Foley LLP, represents the Debtor. The Company disclosed $76,158,469 in assets and $53,728,982 in liabilities as of the petition date. An Official Committee of Unsecured Creditors has been appointed. Secured creditor BBVA Compass is represented by Kenneth Stohner, Jr., Esq. -- kstohner@jw.com -- at Jackson Walker L.L.P. So-called Pool 2 and Pool 4 secured creditors are represented by Robert Yaquinto, Jr., Esq., at Sherman & Yaquinto, L.L.P. ARMORED AUTOGROUP: Moody's Alters Outlook on 'B2' CFR to Negative ----------------------------------------------------------------- Moody's Revises Armored AutoGroup's Outlook to Negative Approximately $625 million in rated debt affected New York, December 29, 2011 Moody's Investors Service affirmed the Corporate Family and Probability of Default ratings for Armored AutoGroup Inc. at B2, and changed the rating outlook to negative from stable. The company's Speculative Grade Liquidity Rating of SGL-3 was also affirmed. The ratings of Armored affirmed include the following (with LGD point estimates revised): - Corporate Family Rating at B2 - Probability of Default Rating at B2 - $50 million senior secured revolving credit facility due 2015 at Ba3 (LGD 2, 26%) - $300 million senior secured term loan B due 2016 at Ba3 (LGD 2, 26%) - $275 million senior unsecured notes due 2018 at Caa1 (LGD 5, 81%) - Speculative Grade Liquidity Rating at SGL-3 Ratings Rationale "Our negative outlook for Armored is reflective of the company's weak operating performance since its LBO in November 2010," said Moody's Senior Vice President Janice Hofferber. "Top-line growth, profitability, and cash flows are tracking well below our expectations due to adverse weather and economic conditions combined with disappointing launch of certain new products at a time when the company is incurring substantial transitional costs," adds Ms. Hofferber. Armored's B2 Corporate Family Rating reflects its high leverage (approaching 7.0 times) and relatively small scale and limited product diversification in the highly fragmented and competitive auto-care products business. The company's historically positive cash flow from operations will remain muted over the next 12 months despite recent improvements in working capital. Moody's expects the company's liquidity profile to remain adequate however, with no near-term maturities and modest peak usage under its revolving credit facility. The ratings are constrained by Moody's expectation that the company's financial policies will be dictated by Avista's return goals going forward. The negative outlook reflects the company's poor organic growth and free cash flow generation as its strategies to expand through new product development and heightened marketing have been largely unsuccessful to date while weak macroeconomic conditions, intense competition and adverse weather conditions have also impaired operating results. Despite Moody's expectation that leverage will remain high and sales growth will remain challenging in the near- term, the company's strong brand recognition, good profitability, low capital requirements and global distribution capabilities will remain credit positives. Armored's ratings could be downgraded if operating results fail to improve such that the company's debt-to-EBITDA and EBITA-to- interest expense ratios do not trend towards 6.0 times and 1.75 times, respectively, by fiscal year-end 2012. Conversely, Armored's ratings could be upgraded if the company is able to maintain a debt-to-EBITDA ratio below 4.5 times and an EBITA-to-interest expense ratio above 2.5 times. The degree of any ratings improvement, however, is constrained by the company's relatively small scale, limited product diversification and potential for aggressive financial policies. The principal methodology used in rating Armored AutoGroup was the Global Packaged Goods Industry Methodology published in July 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. Armored AutoGroup, Inc. based in Danbury, Connecticut, is a global producer of auto-care products under a variety of brands including Armor-All appearance products and STP performance additives. Armored was acquired by Avista Capital Partners and management in an all-cash transaction valued at $765 million from the Clorox Company in November 2010. Armored's sales for the twelve months period ending September 30, 2011 were approximately $300 million. ATLAS PIPELINE: Moody's Withdraws 'Ba2' Sr. Secured Credit Rating ----------------------------------------------------------------- Moody's withdraws Atlas Pipeline's secured credit facility rating New York, December 28, 2011 Moody's Investors Service has withdrawn Atlas Pipeline Partners, L.P.'s Ba2 senior secured bank credit facility rating for business reasons. All other ratings for Atlas remain in effect and were unchanged, including the Corporate Family Rating (B1), the Probability of Default Rating (B1), the senior unsecured rating (B3), and the Speculative Grade Liquidity Rating (SGL-3). The outlook is stable. The principal methodologies used in this rating Atlas were Global Midstream Energy published in December 2010, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Atlas Pipeline Partners, L.P. is a publicly traded master limited partnership (MLP) engaged primarily in the gathering, processing, and transportation segments of the midstream natural gas industry. The partnership is headquartered in Philadelphia, PA. ATRINSIC INC: Mkono Agrees to Buy Assets for $615,000 ----------------------------------------------------- Atrinsic, Inc., on Dec. 28, 2011, entered into an asset purchase agreement with Mkono Media Corp., a British Columbia corporation. Pursuant to the Agreement, Mkono agrees to purchase from the Company certain short codes, domain names, trademarks and databases used in the Company's subscription businesses. The purchase price for the assets is $615,000 and is payable to the Company in cash at the closing. The transaction is scheduled to close on Jan. 6, 2011, or such other date as the parties mutually agree, subject to the satisfaction of various customary closing conditions, including obtaining the requisite consent of the holders of its Secured Convertible Promissory Notes issued on May 31, 2011. The following agreements with Brilliant Digital Entertainment, Inc., were terminated pursuant to notices received from Brilliant Digital which allege various events of default under the agreements by the Company: * Master Services Agreement by and between the Company and Brilliant Digital, dated March 26, 2010, as amended. (terminated effective as of Dec. 28, 2011) * Marketing Services Agreement by and between the Company and Brilliant Digital, dated March 26, 2010, as amended. (terminated effective as of Dec. 28, 2011) * Asset Purchase Agreement by and among the Company, Brilliant Digital and Altnet, Inc., dated Oct. 13, 2010, as amended. (terminated effective as of Dec. 13, 2011) The Marketing Services Agreement and the Master Services Agreement relate to the operation and marketing of the Kazaa digital music service, which was jointly operated by the Company and Brilliant Digital. The Asset Purchase Agreement provided the terms for the purchase from Brilliant Digital of its assets that related to the Kazaa business. In addition to being party to the above agreements with Brilliant Digital, Brilliant Digital is a significant owner of the Company's common stock and also purchased Notes in the original aggregate principal amount of $2,200,000 in the Company's May 2011 financing. On May 31, 2011, the Company sold to investors Notes in the original aggregate principal amount of $5,813,500, which Notes are convertible into shares of the Company's common stock. The Notes are convertible at the lower of the conversion price then in effect (which is initially $2.90) or 85% of the arithmetic average of the three lowest closing bid prices of the Company's common stock during the 20 trading day period prior to the applicable conversion date, which was $0.01303 as of Dec. 27, 2011. As of the close of business on Dec. 27, 2011, the Buyers have been issued an aggregate of 10,918,477 shares of the Company's common stock in connection with the conversion of their Notes and the Company at such time had 17,442,687 shares issued and outstanding, which excludes 681,509 shares held in treasury. The Company is authorized to issue up to an aggregate of 100,000,000 shares of common stock, and anticipates that substantially all authorized but unissued shares will be issued to the Buyers to partially pay down their Notes in accordance with their terms. About Atrinsic Inc. New York City-based Atrinsic, Inc. (NASDAQ: ATRN) is a marketer of direct-to-consumer subscription products and an Internet search-marketing agency. The Company sells entertainment and lifestyle subscription products directly to consumers, which the Company markets through the Internet. The Company also sells Internet marketing services to its corporate and advertising clients. The Company reported a net loss of $14.2 million on $25.7 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $11.6 million on $32.2 million of revenue for the nine months ended Sept. 30, 2010. The Company's balance sheet at Sept. 30, 2011, showed $14.1 million in total assets, $19.7 million in total liabilities, and a stockholders' deficit of $5.6 million. As reported in the TCR on April 12, 2011, KPMG LLP, in New York, expressed substantial doubt about Atrinsic's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has suffered recurring losses from operations. BAKERS FOOTWEAR: Steve Madden to Buy Wild Pair Trademark for $4MM ----------------------------------------------------------------- Bakers Footwear Group, Inc., entered into a Trademark Sale and License Agreement for its Wild Pair trademark, and related trademarks, with Steven Madden, Ltd. The arrangement calls for Steve Madden to purchase the Wild Pair trademark for up to $4 million and enter into a non-exclusive, non-transferable, royalty free perpetual license for the marks with Bakers Footwear Group to allow Bakers to continue to offer Wild Pair footwear in its stores, e-commerce and Wild Pair retail stores. Net proceeds to Bakers are estimated to be between $3.3 million and $3.9 million. "We are pleased to continue the growth of the Wild Pair brand with this transaction," stated Peter Edison, Chairman and chief executive officer of Bakers Footwear Group. "Wild Pair, an iconic label known for its sexy, fashion footwear with a 39-year heritage and a highly loyal following has tremendous potential and we believe Steve Madden is the best possible company to take advantage of the significant opportunity that exists to broaden the appeal and reach of the Wild Pair label. The structure of this transaction allows for Bakers to benefit from the future expansion of Wild Pair. We can continue with our current Wild Pair growth in our own stores and website and benefit, indirectly, from the added market share for the brand with a great wholesaling partner such as Steve Madden." Edward Rosenfeld, Chairman and chief executive officer of Steve Madden, commented, "We are pleased to once again expand our diversified portfolio of brands with the addition of Wild Pair. We look forward to broadening the distribution and reach of the brand while maintaining the brand DNA that has made Wild Pair successful for almost 40 years." About Bakers Footwear St. Louis, Mo.-based Bakers Footwear Group, Inc. (OTC BB: BKRS.OB) is a national, mall-based, specialty retailer of distinctive footwear and accessories for young women. The Company's merchandise includes private label and national brand dress, casual and sport shoes, boots, sandals and accessories. The Company currently operates 231 stores nationwide. Bakers' stores focus on women between the ages of 16 and 35. Wild Pair stores offer fashion-forward footwear to both women and men between the ages of 17 and 29. The Company reported a net loss of $9.29 million on $185.62 million of net sales for the fiscal year ended Jan. 29, 2011, compared with a net loss of $9.08 million on $185.36 million of net sales for the year ended Jan. 30, 2010. The Company reported a net loss of $14.33 million on $131.51 million of net sales for the 39 weeks ended Oct. 29, 2011, compared with a net loss of $14.46 million on $127.39 million of net sales for the 13 weeks ended Oct. 30, 2010. The Company's balance sheet at Oct. 29, 2011, showed $47.12 million in total assets, $67.16 million in total liabilities and a $20.04 million total shareholders' deficit. As reported by the TCR on May 6, 2011, Ernst & Young LLP, in St. Louis, Mo., expressed substantial doubt about Bakers Footwear's ability to continue as a going concern. The independent auditors noted that the Company has incurred substantial losses from operations in recent years and has a significant working capital deficiency. Bankruptcy Warning The Company noted in the Form 10-K that its ability to maintain and ultimately improve its liquidity position is highly dependent on sustaining the positive sales trends that began in June 2008 and have continued through April 2011. Comparable store sales for the last three quarters of fiscal year 2008 increased 4.7% and its comparable store sales for fiscal years 2009 and 2010 increased 1.3% and 1.7%, respectively. Through the first 12 weeks of fiscal year 2011 comparable stores sales increased 10.1%. The Company noted that net losses in recent years have negatively impacted its liquidity and financial position. As of Jan. 29, 2011, it had negative working capital of $8.7 million, unused borrowing capacity under our revolving credit facility of $3.1 million, and a shareholders' deficit of $6.0 million. The Company stated, "If positive sales trends do not continue, or if we were to incur significant unplanned cash outlays, it would become necessary for us to obtain additional sources of liquidity, or take additional cost cutting measures. Any future financing would be subject to our financial results, market conditions and the consent of our lenders. We may not be able to obtain additional financing or we may only be able to obtain such financing on terms that are substantially dilutive to our current shareholders and that may further restrict our business activities. If we cannot obtain needed financing, our operations may be materially negatively impacted and we may be forced into bankruptcy or to cease operations and you could lose your investment in the Company." BAY CONDOS: Case Summary & 3 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Bay Condos, LLC 11 EAST 36th Street, Suite 1101 New York, NY 10016 Bankruptcy Case No.: 11-15844 Chapter 11 Petition Date: December 22, 2011 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Anthony J. Gallo, Esq. GALLO & ASSOCIATES, PLLC 255 Executive Drive, Suite 411 Plainview, NY 11803 Tel: (516) 342-5880 Fax: (516)342-5729 E-mail: gallobk@ajgalloassociates.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 three largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb11-15844.pdf The petition was signed by Joe Bobker, member of Hancock Park, LLC. BILLMYPARENTS INC: Amendment to Articles of Incorporation Okayed ---------------------------------------------------------------- The shareholders of BillMyParents, Inc., approved a change to the Company's Articles of Incorporation and Bylaws to provide that the number of directors of the Company will be no less than one and no greater than 11. The amendment was approved by the Company's Board of Directors on Nov. 11, 2011, subject to shareholder approval. Prior to the amendments, the Company's Articles and Bylaws provided that the number of directors of the Company will be no less than one and no greater than five. The amendment to the Articles became effective upon the filing of the amendment with the Secretary of State of the State of Colorado on Dec. 27, 2011. The amendment to the Bylaws became effective as of Dec. 23, 2011. On Dec. 5, 2011, the Company filed with the Securities and Exchange Commission a Definitive Schedule 14A Consent Solicitation Statement and thereafter mailed the statement to its shareholders of record as of Dec. 2, 2011, soliciting their consent to the amendment to the Articles and Bylaws. As of Dec. 23, 2011, the Company had received the written consent of 57.6% of its shareholders of record, which represented more than the 51% of the voting power of its outstanding common stock as was required to approve the amendment to the Articles and Bylaws. About BillMyParents San Diego, Calif.-based BillMyParents, Inc., markets prepaid cards with special features aimed at young people and their parents. BMP is designed to enable parents and young people to collaborate toward the goal of responsible spending. The Company reported a net loss of $14.2 million on $104,030 of revenues for the fiscal year ended Sept. 30, 2011, compared with a net loss of $6.9 million on $6,675 of revenues for the fiscal year ended Sept. 30, 2010. The Company's balance sheet at Sept. 30, 2011, showed $1.6 million in total assets, $2.8 million in total current liabilities, and a shareholders' deficit of $1.2 million. BDO USA, LLP, in La Jolla, California, expressed substantial doubt about BillMyParents's ability to continue as a going concern. The independent auditors noted that the Company has incurred net losses since inception and has an accumulated deficit and stockholders' deficiency at Sept. 30, 2011. BOCA BRIDGE: Court Confirms Amended Reorganization Plan ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida confirmed on Dec. 24, 2011, Boca Bridge, LLC's amended reorganization plan dated Nov. 11, 2011. The Plan treats Classes 1, 2, 6, 7, 8, and 9 as Impaired. Class 1 voted in favor of the Plan and therefore has accepted the Plan. Class 2 did not submit a vote. Class 6 voted in favor of the Plan and therefore has accepted the Plan. Classes 7, 8, and 9 consist of insider claims, and have not objected to the Plan and have consented to the Plan, including by reason of that certain Restructuring Agreement by and between Boca Bridge, LLC and JMP Boca Bridge Lender, LLC. A copy of the confirmation order is available for free at: http://bankrupt.com/misc/bocabridge.doc443.pdf The Bankruptcy Court conditionally approved the disclosure statement explaining the Amended Reorganization Plan on Nov. 17, 2011. As reported previously in the TCR, the funds to be used to make cash payments under the Plan will be derived from proceeds from the Closing Loan and the operation of the Debtor's business in the ordinary course prior to and after the Effective Date. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/BOCABRIDGE_ds.pdf About Boca Bridge LLC In August 2010, 10 creditors owed $69,400 filed an involuntary Chapter 11 petition (Bankr. S.D. Fla. Case No. 10-34538) against Boca Bridge LLC, the owner of the Boca Raton Bridge Hotel. In November 2010, the bankruptcy judge entered ruling placing the Boca Bridge into Chapter 11. The Debtor disclosed $10,286,336 in assets and $11,850,060 in liabilities as of the Chapter 11 filing. Bernice C. Lee, Esq., and Bradley Shraiberg, Esq., at Shraiberg, Ferrara & Landau, P.A., in Boca Raton, Florida, serve as counsel to the Debtor. BRIGHAM EXPLORATION: Withdraws Registration of All Securities ------------------------------------------------------------- Brigham Exploration Company filed with the U.S. Securities and Exchange Commission Post-Effective Amendment No.1 to Form S-3 registration statements relating to the offering of an indeterminate number or amount of debt securities, common stock, par value $0.01 per share, preferred stock, par value $0.01 per share, depository shares, warrants, guarantees of debt securities, rights and units. The Company also filed a Post-Effective Amendment No.1 to Form S-8 registration statements relating to the Company's offering of: -- 300,000 shares of common stock, par value $0.01 per share pursuant to the terms of the Brigham Inc. 401(k) Plan; -- 4,327,245 shares of common stock, par value $0.01 per share pursuant to the terms of the 1997 Incentive Plan of Brigham Exploration Company; -- 1,588,169 shares of common stock, par value $0.01 per share pursuant to the terms of the 1997 Incentive Plan of Brigham Exploration Company; -- 429,800 shares of common stock, par value $0.01 per share pursuant to the terms of the Brigham Exploration Company 1997 Director Stock Option Plan; -- 4,050,589 shares of common stock, par value $0.01 per share pursuant to the terms of the Brigham Exploration Company 1997 Incentive Plan of Brigham Exploration Company; -- 200,000 shares of common stock, par value $0.01 per share related to stock options granted conditionally to the non- employee directors of the Company; and -- 577,200 shares of common stock, par value $0.01 per share pursuant to the 1997 Director Stock Option Plan. On Dec. 8, 2011, pursuant to the Agreement and Plan of Merger, dated Oct. 17, 2011, by and among the Company, Statoil ASA, and Fargo Acquisition Inc., Parent and Merger Sub merged Merger Sub with and into the Company, with the Company continuing as the surviving corporation and as a wholly-owned subsidiary of Parent. As a result of the Merger, the Company and the Guarantors have terminated the offering of their Securities pursuant to this Registration Statement. In connection with the Merger and other transactions contemplated by the Merger Agreement, and in accordance with an undertaking made by the Company and the Guarantors in the Registration Statements to remove from registration by means of a post- effective amendment any Securities which remain unsold at the termination of the offering, the Company and the Guarantors remove and withdraw from registration all Securities of the Company and the Guarantors registered pursuant to the Registration Statements that remain unsold. About Brigham Exploration Austin, Texas-based Brigham Exploration Company (NASDAQ: BEXP) -- http://www.bexp3d.com/-- is an independent exploration, development and production company that utilizes advanced exploration, drilling and completion technologies to systematically explore for, develop and produce domestic onshore oil and natural gas reserves. In late 2007, the majority of the Company's drilling capital expenditures shifted from its historically active areas in the Onshore Gulf Coast, the Anadarko Basin and West Texas to the Williston Basin in North Dakota and Montana, where the Company is currently targeting the Bakken, Three Forks and Red River objectives. The Company's balance sheet at Sept. 30, 2011, showed $1.74 billion in total assets, $973.68 million in total liabilities, and $773.03 million in total stockholders' equity. * * * As reported by the TCR on Feb. 18, 2011, Moody's Investors Service upgraded Brigham Exploration Company's Corporate Family Rating to B3 from Caa1 and the Probability of Default Rating to B3 from Caa1. "The primary driver for the upgrade is Brigham's strong reserve and production growth and significant financial flexibility," said Francis J. Messina, Moody's Vice President. "The B3 Corporate Family Rating is prospective and it incorporates Moody's expectation that the company will significantly increase proved developed reserves and production rates over the next two years." BRIGHAM EXPLORATION: Suspending Filing of Reports with SEC ---------------------------------------------------------- Brigham Exploration Company filed a Form 15 notifying of its suspension of its duty under Section 15(d) to file reports required by Section 13(a) of the Securities Exchange Act of 1934 with respect to its common stock, par value $0.01 per share. Pursuant to Rule 12h-3, the Company is suspending reporting because there are currently less than 300 holders of record of the common shares. As of Dec. 29, 2011, there was only one holder of the common shares of the Company. About Brigham Exploration Austin, Texas-based Brigham Exploration Company (NASDAQ: BEXP) -- http://www.bexp3d.com/-- is an independent exploration, development and production company that utilizes advanced exploration, drilling and completion technologies to systematically explore for, develop and produce domestic onshore oil and natural gas reserves. In late 2007, the majority of the Company's drilling capital expenditures shifted from its historically active areas in the Onshore Gulf Coast, the Anadarko Basin and West Texas to the Williston Basin in North Dakota and Montana, where the Company is currently targeting the Bakken, Three Forks and Red River objectives. The Company's balance sheet at Sept. 30, 2011, showed $1.74 billion in total assets, $973.68 million in total liabilities, and $773.03 million in total stockholders' equity. * * * As reported by the TCR on Feb. 18, 2011, Moody's Investors Service upgraded Brigham Exploration Company's Corporate Family Rating to B3 from Caa1 and the Probability of Default Rating to B3 from Caa1. "The primary driver for the upgrade is Brigham's strong reserve and production growth and significant financial flexibility," said Francis J. Messina, Moody's Vice President. "The B3 Corporate Family Rating is prospective and it incorporates Moody's expectation that the company will significantly increase proved developed reserves and production rates over the next two years." CAESARS ENTERTAINMENT: Amends Form S-1 Registration Statement ------------------------------------------------------------- Ceasars Entertainment Corporation filed with the U.S. Securities and Exchange Commission amendment no. 1 to Form S-1 registration statement relating to an initial public offering of an indeterminate number of the Company's common stock. The proposed maximum offering price is $50 million. Prior to this offering, there has been no public market for the Company's common stock. The Company intends to apply to list its common stock on a national securities exchange under the symbol "CZR." The listing is subject to approval of the Company's application. The Company has granted to the underwriters a 30-day option to purchase additional shares from the Company at the initial public offering price less underwriting discounts and commissions. A full-text copy of the amended prospectus is available at: http://is.gd/yYpqoD About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. The Company also reported a net loss of $471.30 million on $6.66 billion of net revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $629.30 million on $6.69 billion of net revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $28.86 billion in total assets, $27.62 billion in total liabilities, $36 million in redeemable non-controlling interests, and $1.20 billion total stockholders' equity. * * * Harrah's announced its re-branding to Caesar's on mid-November 2010. Harrah's carries 'Caa3' long term corporate family and probability of default ratings, with 'positive' outlook, from Moody's Investors Service. It has a 'B-' issuer credit rating, with 'stable' outlook, from Standard & Poor's. "The 'B-' corporate credit rating reflects Caesars' very weak credit measures and our belief that prospects for a meaningful rebound in net revenues and EBITDA in 2011 do not seem promising given the current economic outlook," said Standard & Poor's credit analyst Ben Bubeck in May 2011. "While several actions taken by management have positioned the company with a moderate covenant cushion and very limited debt maturities over the next few years, Caesars' capacity to continue to fund operational and capital spending needs and meet debt service obligations relies on meaningful growth in cash flow generation over the next few years." As reported by the TCR on March 3, 2011, Moody's Investors Service upgraded Caesars Entertainment's Corporate Family ratings and Probability of Default ratings to Caa2. CET's Caa2 Corporate Family Ratings reflect very high leverage, weak interest coverage, the company's debt financed growth strategy, and Moody's view that the company's current capital structure in unsustainable in the long-term. The ratings reflect Moody's expectation that gaming demand will rebound very slowly over the next several years. However, in the absence of a material de-leveraging transaction, Moody's do not expect the company's capital structure to improve materially over the next few years. Additionally, given CEC's weak credit profile, there is a possibility that the company could again pursue transactions that will result in impairment of debt holder claims as a means to improve its capital structure. CAPTAIN LIMOUSINES: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Captain Limousines, Inc. 700 Freeport Parkway, #180 Coppell, TX 75019 Bankruptcy Case No.: 11-47018 Chapter 11 Petition Date: December 20, 2011 Court: U.S. Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Russell F. Nelms Debtor's Counsel: David Max Seeberger, Esq. THE GIBSON LAW GROUP 1801 N. Hampton Road, Suite 370 DeSoto, TX 75115 Tel: (972) 291-9300 Fax: (972) 291-0636 E-mail: dseeberger@sbcglobal.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Asif Ali, president. CDC PROPERTIES I: Court Confirms Modified Reorganization Plan ------------------------------------------------------------- On Nov. 22, 2011, the U.S. Bankruptcy Court for the Western District of Washington entered an order confirming CDC Properties I, LLC's Plan of Reorganization, as modified. After the Plan was filed on June 10, 2011, members of creditor Classes 1-5 proposed and negotiated with the Debtor certain modifications to the Original Plan. A copy of the modified Plan, as accepted by all voting creditors, is available for free at: http://bankrupt.com/misc/cdcpropertiesI.doc119.pdf The Modified Plan centers on the restructuring of the Debtor's obligations to its three largest creditors: Midland Loan Services, Inc., Wells Fargo Bank, N.A., and Equity Funding, LLC, and the payment in full to the Debtor's unsecured creditors. The funds necessary to make the payments required by the Plan will come from Reorganized Debtor's cash on hand on the Effective Date, the Reserve Accounts, and the rents received after the Effective Date. The Reorganized Debtor may sell or refinance the Real Property at any time if the proceeds of the sale or refinance are sufficient to pay all Allowed Claims in Classes 1-5 and sums otherwise required to be paid under the terms of the Plan. Unsecured creditors in Class 5 will receive semi-annual payments of $50,000 from the income of the Real Property each January and July commencing in January 2012 until the Class 5 claims are paid in full. Holders of equity interests in Class 6 will retain their Interests. About CDC Properties I Tacoma, Washington-based CDC Properties I, LLC, owns 10 commercial buildings in Washington. Most of the space in its buildings is leased to the State of Washington and occupied by various of its agencies. CDC Properties filed for Chapter 11 bankruptcy protection (Bankr. W.D. Wash. Case No. 11-41010) on Feb. 10, 2011. Brad A. Goergen, Esq., and Mark D. Northrup, Esq., at Graham & Dunn PC, in Seattle, Wash., represent the Debtor. The Debtor disclosed $47,304,590 in total assets, and $75,714,502 in total liabilities as of the Chapter 11 filing. CEGL, INC.: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: CEGL, Inc. 4887 Cottonwood Lane Salt Lake City, UT 84117 Bankruptcy Case No.: 11-37812 Chapter 11 Petition Date: December 20, 2011 Court: U.S. Bankruptcy Court District of Utah (Salt Lake City) Judge: R. Kimball Mosier Debtor's Counsel: Miles E. Lignell, Esq. LIGNELL LAW OFFICE 9350 South 150 East, Suite 740 Sandy, UT 84070 Tel: (801) 261-9346 Fax: (801) 263-7861 E-mail: miles@lignell.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 largest unsecured creditors does not contain any entry. The petition was signed by Chris N. Tzakis, president. CEMTREX INC: Delays Fiscal 2011 Form 10-K ----------------------------------------- Cemtrex, Inc., notified the U.S. Securities and Exchange Commission that it was unable to file its Annual Report on Form 10-K for its year ended Sept. 30, 2011, by the prescribed date of Dec. 29, 2011, due to a delay with finalizing its results of operations for that period. The Company intends to file the Annual Report by Jan. 13, 2011. About Cemtrex, Inc. Farmingdale, N.Y.-based Cemtrex, Inc., is engaged in manufacturing and selling the most advanced instruments for emission monitoring of particulate, opacity, mercury, sulfur dioxide, nitrogen oxides, etc. Cemtrex also provides turnkey services for carbon creation projects from abatement of greenhouse gases pursuant to Kyoto protocol and assists project owners in selling of carbon credits globally. The Company's products are sold to power plants, refineries, chemical plants, cement plants & other industries including federal and state governmental agencies. The Company's balance sheet at June 30, 2011, showed $1.78 million in total assets, $1.88 million in total liabilities, and a $102,843 total stockholders' deficit. As reported in the Troubled Company Reporter on Jan. 21, 2011, Gruber & Company, LLC, in Saint Louis, Mo., expressed substantial doubt about Cemtrex's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company has a negative equity and negative working capital. CENTRO PINTORES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Centro Pintores Y Contratistas Del Sur Inc P.O. Box 547 Guanica, PR 00653 Bankruptcy Case No.: 11-10899 Chapter 11 Petition Date: December 22, 2011 Court: U.S. Bankruptcy Court District of Puerto Rico (Ponce) Debtor's Counsel: Modesto Bigas Mendez, Esq. BIGAS & BIGAS P.O. Box 7462 Ponce, PR 00732 Tel: (787) 844-1444 E-mail: modesto@coqui.net Scheduled Assets: $277,216 Scheduled Liabilities: $1,010,219 The Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/prb11-10899.pdf The petition was signed by Benjamin Seda, president. CHINA INTELLIGENT: Chief Financial Officer and Secretary Resigns ---------------------------------------------------------------- China Intelligent Lighting and Electronics, Inc., received a resignation of Kui (Kevin) Jiang, the Chief Financial Officer and Corporate Secretary of the Company, effective Dec. 21, 2011. About China Intelligent Lighting China Intelligent Lighting and Electronics, Inc. is a China-based company that provides a full range of lighting solutions, including the design, manufacture, sales and marketing of high- quality LED and other lighting products for the household, commercial and outdoor lighting industries in China and internationally. The Company currently offers over 1,000 products that include LEDs, long life fluorescent lights, ceiling lights, metal halide lights, super electric transformers, grille spot lights, down lights, and recessed and framed lighting. The Company's balance sheet at Sept. 30, 2010, showed $42.20 million in total assets, $7.54 million in total liabilities, all current, $34.65 million total stockholders' equity. As reported by the TCR on April 1, 2011, Faruqi & Faruqi, LLP, a national law firm concentrating on investors rights, consumer rights and enforcement of federal antitrust laws, is investigating potential wrongdoing at China Intelligent Lighting and Electronics, Inc. Faruqi & Faruqi seeks to determine whether China Intelligent Lighting has violated federal securities laws by issuing false and misleading financial statements to its shareholders, in particular in connection with its recent public offering of its common stock. DELTRON INC: Delays Form 10-K for Fiscal 2011 --------------------------------------------- Deltron, Inc., notified the U.S. Securities and Exchange Commission that it will be late in filing its Annual Report on Form 10-K for the fiscal year ended Sept. 30, 2011. The Company said the required financial statements for the reporting period could not be obtained without unreasonable expenses. About Deltron Inc. Based in Garden Grove, Calif., Deltron, Inc., is a manufacturing company with two distinct business segments: polyurethane and rebreather. The Company's primary business is Elasco, Inc., which is focused on manufacturing technology for plastic and polyurethane products. The Company's secondary business segment is focused on the development of deep-sea exploration breathing technology marketed as Blu Vu. The Company also reported a net loss of $522,377 on $2.51 million of sales for the nine months ended June 30, 2011, compared with a net loss of $402,260 on $1.97 million of sales for the same period during the prior year. The Company's balance sheet at June 30, 2011, showed $3.99 million in total assets, $5.21 million in total liabilities, and a $1.21 million total stockholders' deficit. As reported in the TCR on Jan. 20, 2011, Cacciamatta Accountancy Corporation, in Irvine, Calif., expressed substantial doubt about Deltron, Inc.'s ability to continue as a going concern, following its audit of the Company's consolidated financial statements for the transition period from Jan. 1, 2010, to Sept. 30, 2010. The independent auditors noted that the Company has incurred recurring losses from operations and negative cash flows from operating activities and has a net stockholders' deficit. DGI SERVICES: Trustee Being Appointed in Involuntary Case --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that DGI Services LLC is being taken over by an interim trustee even before the company is officially in bankruptcy. The report relates that at a Dec. 28 hearing, the U.S. Bankruptcy Judge in Camden, New Jersey, called for an interim trustee, saying it was in the "best interest" of the company and creditors. The creditors argued there was a danger the assets will be dissipated. Kenneth Rosen, Esq., from Lowenstein Sandler PC representing the creditors, said that "DGI has twice surrendered its assets to its secured creditor and sought to wipe out unsecured claims." The report relates that the creditors, in support of their argument for a trustee, described in court papers how the company's principal Dean Topolinski or a company he controls received $4.6 million in consulting fees between April 2010 and September 2011. DGI Services LLC, a provider of direct-marketing printing services, was hit Dec. 21, 2011, with an involuntary Chapter 7 petition (Bankr. D. N.J. Case No. 11-46042) filed by nine creditors saying they are collectively owed more than $6 million. In a lawsuit by one of the creditors, a U.S. district judge in New York enjoined DGI on Dec. 7 from transferring proceeds of asset sales. According to a court filing, DGI sold assets two days earlier and was to be paid between $11.8 million and $14 million. DIABETES AMERICA: Court Confirms Ch. 11 Plan; Price Cut to $3.57MM ------------------------------------------------------------------ On Dec. 5, 2011, the U.S. Bankruptcy Court for the Southern District of Texas entered an order confirming Diabetes America, Inc.'s Second Amended Chapter 11 Plan of Liquidation. The "Cash Purchase Price" as set forth in the EDG Asset Purchase Agreement will be reduced from $4,750,000 to $3,575,000, provided, however, that (i) the Cash Purchase price will be further reduced on a dollar-for-dollar basis, up to as maximum of $150,000, based on the Seller's cash on hand at Closing; and (ii) the Buyer's agreement with respect to the assumption of the Assumed Post Petition Payables as set forth in Section 2.3(c) of the EDG Asset Asset Purchase Agreement will remain in full force and effect. A copy of the Confirmation Order is available for free at: http://bankrupt.com/misc/diabetesamerica.doc368.pdf Under the Plan, the Debtor is selling substantially all of its operating assets. As reported in the TCR on Nov. 22, 2011, the Debtor stated that it has reached an agreement with EDG Partners Fund II, L.P., the proposed purchaser under the Debtor's Chapter 11 plan, on an adjusted purchase price, consistent with the terms of the APA. The Debtor initially accepted an offer from EDG for $4,750,000 cash plus the assumption of up to $925,000 in certain postpetition accrued liabilities. The offer is subject to a court-approved bidding process that will determine the highest and best offer. Proceeds form the sale will be used to satisfy allowed claims and interests in accordance with the Bankruptcy Code. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/DIABETESAMERICA_Aug19DS.pdf About Diabetes America Houston, Texas-based Diabetes America, Inc., fka Diabetes Centers of America, Inc., operates a network of 17 centrally-managed medical clinics that provide comprehensive outpatient medical care, primarily to patients with Type 1, Type 2 and Gestational Diabetes. The company's clinics are located in Texas and Houston and generate 51,000 patient visits per year. Diabetes America filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 10-41521) on Dec. 21, 2010. H. Joseph Acosta, Esq., and Micheal W. Bishop, Esq., at Looper Reed & McGraw, P.C., in Dallas; and Joshua Walton Wolfshohl, Esq., at Porter Hedges, L.L.P., in Houston, represent the Debtor as bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million as of the Petition Date. Judy A. Robbins, the U.S. Trustee for Region 7, appointed three members to the Official Committee of Unsecured Creditors in Diabetes America's Chapter 11 case. The Committee has tapped Butler, Snow, O'Mara, Stevens & Cannada, PLLC, as its counsel. DUNE ENERGY: Moody's Revises Default Rating Probability to 'Caa3' ----------------------------------------------------------------- Moody's Investors Service revised Dune Energy, Inc.'s Probability of Default Rating (PDR) to Caa3/LD from Ca following the closing of the debt exchange offer of the company's 10.5% secured notes. Simultaneously, Moody's upgraded the Corporate Family Rating (CFR) to Caa3 reflecting Dune's less onerous post-exchange capital structure and affirmed the Ca rating on the secured notes. Dune's SGL-4 Speculative Grade Liquidity rating remained unchanged. The revision of the PDR reflects Moody's view that the exchange transaction constitutes a distressed exchange. Moody's will remove the LD (limited default) designation in two days, change the PDR to Caa3, and withdraw all ratings. The rating outlook is negative. Ratings Rationale The principal methodology used in rating Dune was the Independent Exploration and Production (E&P) Industry Methodology published in December 2008. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Dune Energy, Inc. is an independent exploration and production company headquartered in Houston, Texas. FIRST DATA: Fitch Affirms Junk Ratings on Six Note Classes ---------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating (IDR) for First Data Corp. (FDC) at 'B' and revised the Rating Outlook to Negative from Stable. The Change in Outlook to Negative reflects: -- Expectations for economic softness in the U.S. and Europe entering 2012 with the potential for significant and potentially prolonged downside. A prolonged economic malaise could materially inhibit the company's ability to economically refinance its $6.5 billion in senior secured term loans which mature in 2014. -- The company is susceptible to higher than expected interest rates which could materialize from any effort to extend its 2014 maturity. These term loans are currently priced at LIBOR plus 250 basis points (bps). Fitch believes a refinancing spread of 600 bps combined with higher rates to extend the $1.5 billion in unsecured noted due 2015 could result in material negative free cash flow based on the current weak economic outlook. As an offset, FDC does have the ability to pay-in-kind (PIK) the interest on its $1 billion junior secured bonds due 2022 which could save $85 million in annual cash flow. However, any PIK interest on these notes would count against the company's basket of potential incremental junior secured debt issuance (roughly $500 million still available) which Fitch believes would be better used in part to extend the unsecured notes due 2015. Fitch believes that absent an economic recession in the U.S., FDC would likely be able to refinance its remaining term loans due 2014 and $1.5 billion in senior unsecured notes due 2015. This would effectively create a new four-year window (until 2016) for the company to grow out of its capital structure. In late 2010 and early 2011, FDC refinanced and extended by several years $6 billion of its unsecured debt which was due 2015 and $6 billion of its secured term loans due 2014. However, FDC's effort to de- lever over the prior four years (since its leveraged buyout in late 2007) has been hampered by significant economic headwinds which have limited free cash flow generation and stymied EBITDA growth. Fitch believes that confidence in the company's ability to refinance its 2014 and 2015 maturities is based on the following: -- FDC benefits from the secular growth trend favoring card- based payments as consumers increasingly move away from cash. -- FDC's international business has significant revenue growth potential (in excess of 10% annually) given the secular trends and potential market share gains. EBITDA margins in the International segment could also drive higher EBITDA growth as FDC benefits from greater operational efficiency and economies of scale. International currently contributes roughly 20% of consolidated EBITDA. -- Fitch believes that a secured leverage ratio of 5 times (x) or less would be sufficient to achieve an extension of the secured term loan. Currently, Fitch estimates FDC's secured leverage ratio at approximately 5.6x, which does not include earnings from non-consolidated affiliates. As of Sept. 30, 2011, Fitch estimated that FDC's EBITDA over the latest 12-month (LTM) period was $2.2 billion ($2.4 billion when adjusting for non-consolidated affiliate earnings, but which does not exclude a roughly equivalent amount of minority interest). Fitch estimated leverage at 10.2x and secured leverage at 5.6x. Fitch estimated free cash flow for the LTM period at $382 million but this excludes $289 million paid to Bank of America over the same period as distributions from its Bank of America Merchant Services (BAMS) joint venture which are accounted for under cash flows from financing. Cash interest expense for 2011 will be $1.43 billion (book interest expense of $1.8 billion) but rise to approximately $1.75 billion in 2012. Part of the increase reflects that the company's $750 million in unsecured PIK notes maturing 2015 will require cash payments beginning March 2012. However, nearly $300 million of the difference in cash interest expense in 2011 versus book interest expense results from the timing of interest payments on the $6 billion of unsecured and junior secured notes issued December 2010 (which refinanced an equivalent amount of unsecured notes). These notes pay interest in January and July, which caused FDC to effectively pay only seven months interest during 2011. If the accrued interest had to be paid in December 2011 versus January 2012, free cash flow for the year would be approximately $280 million lower. Fitch expects that FDC will benefit in 2012 from $5 billion in LIBOR swaps that will expire in September. These swaps set the base LIBOR rate on an equivalent portion of the company's term loan at 4.9% versus the current rate of approximately 0.5%. FDC has put into place $3 billion of forward LIBOR swaps that will replace the expiring swaps next year with a four-year average life and an average rate of 1.4%. Fitch estimates that the company will net a reduction in interest expense of approximately $175 million. From an operational perspective, Fitch believes core credit strengths include: -- Stable end-market demand with below-average susceptibility to economic cyclicality; -- A highly diversified, global and stable customer base consisting principally of millions of merchants and large financial institutions; -- A significant advantage in scale of operations and technological leadership which positively impact the company's ability to maintain its leading market share and act as barriers to entry to potential future competitors. In addition, FDC's Financial Services business benefits from long-term customer contracts and generally high switching costs; -- Low working capital requirements typically enable a high conversion of EBITDA less cash interest expense into cash from operations. Fitch believes operational credit concerns include: -- Mix shift in the Retail Services segment, including a shift in consumer spending patterns favoring large discount retailers, has negatively affected profitability and revenue growth and could lead to greater than anticipated volatility in results; -- High fixed cost structure with significant operating leverage would typically drive volatility in profitability during business and economic cycles; -- Consolidation in the financial services industry and changes in regulations could continue to negatively impact results in the company's Financial Services segment. -- Potential for new competitive threats to emerge over the long term including new payment technology in the Retail Services segment, the potential for a competitor to consolidate market share in the Retail Services segment, and the potential for historically niche competitors in the Financial Services segment to move upstream and challenge FDC's relative dominance in card processing for large financial institutions; -- Management is compensated in large part with equity. If FDC's outlook continues to deteriorate, the value of this compensation could decline considerably which enhances the risk that executives could look to leave the company. Management turnover has been an issue for FDC over the past few years and additional turnover could be damaging. From a financial perspective, Fitch believes core credit strengths include expectations that the company will use excess free cash flow for debt reduction. Credit concerns include a highly levered balance sheet that results in minimal financial flexibility and reduces the company's ability to act strategically in a business that has historically benefited from consolidation opportunities. Expectations for modest growth in free cash flow over the next several years may not be sufficient to manage pending changes in the company's capital structure including the conversion of PIK notes to cash pay the end of 2011 and the need to refinance the company's secured term loan in 2014. FDC's ability to manage this refinancing risk may in part be contingent upon its ability to attract equity capital in future years which could be affected by future growth expectations for the company as well as future equity risk premiums. The multiple at which investors would be willing to invest in the company would determine the extent of deleveraging necessary over the next few years in order to realize an enterprise value in excess of existing debt obligations. Total liquidity as of Sept. 30, 2011 was solid and consisted of $402 million in cash and $1.4 billion available under a $1.5 billion senior secured revolving credit facility, roughly $500 million of which expires in September 2013 with the remaining expiring September 2016. Approximately $173 million of cash is held by BAMS and IPS (a discontinued business segment) and is not available for general corporate purposes. Total debt as of Sept. 30, 2011 was $22.8 billion, which includes approximately $15.4 billion in secured debt, $4.8 billion in unsecured debt and $2.5 billion in subordinated debt (all figures approximate). In addition, a subsidiary of New Omaha Holdings L.P. (the parent company of First Data Corp.) has outstanding $1.6 billion senior unsecured PIK notes due 2016. These notes are not obligations of FDC, and FDC provides no credit support of these notes. Fitch has affirmed the following ratings: -- Long-term IDR at 'B'; -- $499 million senior secured revolving credit facility expiring September 2013 at 'BB-/RR2'; -- $1.0 billion senior secured revolving credit facility expiring September 2016 at 'BB-/RR2'; -- $6.6 billion senior secured term loan B due 2014 at 'BB-/RR2'; -- $4.7 billion senior secured term loan B due 2018 at 'BB-/RR2'; -- $750 million 7.375% senior secured notes due 2019 at 'BB-/RR2'; -- $510 million 8.875% senior secured notes due 2020 at 'BB-/RR2'; -- $2 billion 8.25% junior secured notes due 2021 at 'CCC/RR6'; -- $1 billion 8.75%/10.0% PIK Toggle junior secured notes due 2022 at 'CCC/RR6'; -- $3 billion 12.625% senior unsecured notes due 2021 at 'CCC/RR6'. -- $784 million 9.875% senior unsecured notes due 2015 at 'CCC/RR6'; -- $748 million 10.55% senior unsecured notes with mandatory paid-in-kind (PIK) interest through September 2011 due 2015 at 'CCC/RR6'; -- $2.5 billion 11.25% senior subordinated notes due 2016 at 'CC/RR6'. The Rating Outlook is Negative. The Recovery Ratings (RRs) for FDC reflect Fitch's recovery expectations under a distressed scenario, as well as Fitch's expectation that the enterprise value of FDC, and hence recovery rates for its creditors, will be maximized in a restructuring scenario (as a going concern) rather than a liquidation scenario. In deriving a distressed enterprise value, Fitch applies a 20% discount to FDC's estimated operating EBITDA (adjusted for equity earnings in affiliates) of approximately $2.4 billion for the LTM ended Dec. 31, 2011 which is equivalent to Fitch's estimate of FDC's total interest expense and maintenance capital spending. Fitch then applies a 6x distressed EBITDA multiple, which considers FDC's prior public trading multiple and that a stress event would likely lead to multiple contraction. As is standard with Fitch's recovery analysis, the revolver is fully drawn and cash balances fully depleted to reflect a stress event. The 'RR2' for FDC's secured bank facility and senior secured notes reflects Fitch's belief that 71%-90% recovery is realistic. The 'RR6' for FDC's second lien, senior and subordinated notes reflects Fitch's belief that 0%-10% recovery is realistic. The 'CC/RR6' rating for the subordinated notes reflects the minimal recovery prospects and inherent subordination in a recovery scenario. FIRST MARINER: Chairman and CEO Edwin Hale Retires -------------------------------------------------- 1st Mariner Bancorp, parent company of 1st Mariner Bank, announced that Edwin F. Hale Sr., chairman and chief executive officer of the company and bank, retired from the board and his executive capacity effective Dec. 22, 2011. Hale turned 65 in November and elected to announce his retirement plans in conjunction with the Company's year end Board of Directors' meeting. Plans for Hale's retirement were initially contemplated in April in conjunction with the Company's announcement of the execution of a stock purchase agreement with Priam Capital Fund I, L.P. "While it is difficult to leave 1st Mariner, the time is right," said Hale, who launched the bank in 1995. "I am proud of the commitment to community banking 1st Mariner has embraced and the hundreds of financial services jobs the company has created in the Baltimore metropolitan area." Captain Michael R. Watson, will become interim, non-executive chairman of the banking company upon Hale's departure. Watson, a 1st Mariner Bancorp director since 1998, is the President of the International Maritime Pilots' Association and the President of the American Pilots' Association and is a Past Chairman of the Baltimore Branch of the Federal Reserve Bank of Richmond. Mark Keidel, currently the President and Chief Operating Officer of the company and the bank will assume the principal executive responsibility on an interim basis, subject to regulatory approval. Keidel has been a senior executive at 1st Mariner since June 2000. 1st Mariner also announced that Jack E. Steil, formerly president of Wilmington Trust Mid-Atlantic Region, and Robert D. Kunisch Jr., formerly president of Wilmington Trust FSB, Maryland, have been engaged by the company since July of this year to advise the board of directors with respect to strategic planning, and they will continue to serve in this capacity. Prior to joining Wilmington Trust, Steil and Kunisch were both executives at Mercantile Bankshares Corporation. Steil spent 32 years with the Mercantile during which time he served in many capacities including Chief Credit Officer. Kunisch has 21 years experience in the banking industry primarily in the commercial lending specialty. About First Mariner Headquartered in Baltimore, Maryland, First Mariner Bancorp -- http://www.1stmarinerbancorp.com/-- is a bank holding company whose business is conducted primarily through its wholly owned operating subsidiary, First Mariner Bank, which is engaged in the general general commercial banking business. First Mariner was established in 1995 and has total assets in excess of $1.3 billion as of Dec. 31, 2010. "Quantitative measures established by regulation to ensure capital adequacy require the [First Mariner] Bank to maintain minimum amounts and ratios of total and Tier I capital to risk-weighted assets, and of Tier I capital to average quarterly assets," the Company said in the filing. "As of March 31, 2011, the Bank was "under-capitalized" under the regulatory framework for prompt corrective action." As reported in the TCR on April 4, 2011, Stegman & Company, in Baltimore, expressed substantial doubt about First Mariner Bancorp's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has suffered recurring losses and has a limited capital base. The Company's balance sheet at Sept. 30, 2011, showed $1.19 billion in total assets, $1.21 billion in total liabilities and a $21.57 million total stockholders' deficit. Bankruptcy Warning As of June 30, 2011, First Mariner Bank's and the Company's capital levels were not sufficient to achieve compliance with the higher capital requirements they were required to meet by June 30, 2010. The failure to maintain these capital requirements could result in further action by their regulators. On Sept. 18, 2009, the Bank entered into an Agreement with the Federal Deposit Insurance Corporation and the Commissioner of Financial Regulation for the state of Maryland, pursuant to which it consented to the entry of an Order to Cease and Desist, which directs the Bank to (i) increase its capitalization, (ii) improve earnings, (iii) reduce nonperforming loans, (iv) strengthen management policies and practices, and (v) reduce reliance on noncore funding. The September Order required the Bank to adopt a plan to achieve and maintain a Tier I leverage capital ratio of at least 7.5% and a total risk-based capital ratio of at least 11% by June 30, 2010. We did not meet the requirements at June 30, 2010, December 31, 2010, or June 30, 2011. The failure to achieve these capital requirements could result in further action by its regulators. First Mariner currently does not have any capital available to invest in the Bank and any further increases to the Company's allowance for loan losses and operating losses would negatively impact the Company's capital levels and make it more difficult to achieve the capital levels directed by the FDIC and the Commissioner. Because the Company has not met all of the capital requirements set forth in the September Order within the prescribed timeframes, if the Company's revised capital plan is not approved or if the Company is not granted a waiver of those requirements, the FDIC and the Commissioner could take additional enforcement action against the Company, including the imposition of monetary penalties, as well as further operating restrictions. The FDIC or the Commissioner could direct the Company to seek a merger partner or possibly place the Bank in receivership. If the Bank is placed into receivership, the Company would cease operations and liquidate or seek bankruptcy protection. If the Company were to liquidate or seek bankruptcy protection, the Company does not believe that there would be assets available to holders of the capital stock of the Company. FRIENDLY ICE CREAM: Sun Capital Reacquiring Restaurant Chain ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that restaurant operator Friendly Ice Cream Corp. will be sold to an affiliate of the existing owner Sun Capital Partners Inc. in exchange for debt, according to court records. According to the report, the auction was canceled when no competing offers were made. At a hearing Dec. 29, the bankruptcy judge in Delaware said he would sign an order approving the sale. Attempting to drum up an auction, Friendly's financial advisers contacted 268 potential buyers, including 108 in the industry. Even though 47 potential buyers signed confidentiality agreements and received detailed information about the business, no competing bids were submitted. The Sun Capital affiliate will pay about $120 million, including enough cash to off first-lien debt. Most of the remainder is a credit bid from the $267.7 million in second-lien, pay-in-kind notes that a Sun Capital affiliate owns. About Friendly Ice Cream Friendly Ice Cream Corp. -- http://www.friendlys.com/-- the owner and franchiser of 490 full-service, family-oriented restaurants and provider of ice cream products in the Eastern United States, filed for Chapter 11 reorganization together with four affiliates (Bankr. D. Del. Lead Case No. 11-13167) on Oct. 5, 2011, to sell the business mostly in exchange for debt to Sundae Group Holdings II LLC, a unit of Sun Capital Partners Inc. The existing owner and holder of the Debtors' second-lien debt are also affiliates of Sun Capital. Friendly's, based in Wilbraham, Massachusetts, also announced the closing of 63 stores, leaving about 424 operating. Franchise operators have about 230 of the locations. Judge Kevin Gross oversees the case. James A. Stempel, Esq., Ross M. Kwasteniet, Esq., and Jeffrey D. Pawlitz, Esq., at Kirkland & Ellis LLP; and Laura Davis Jones, Esq., Timothy P. Cairns, Esq., and Kathleen P. Makowski, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. Zolfo Cooper serves as the Debtors' financial advisors. In its petition, Friendly Ice Cream Corp. estimated $100 million to $500 million in assets and debts. The petitions were signed by Steven C. Sanchioni, executive vice president, chief financial officer, treasurer, and assistant secretary. Sundae Group Holdings proposes to pay about $120 million for the business. The price includes enough cash to pay first-lien debt and an amount of cash for unsecured creditors to be negotiated with the official creditors' committee. Aside from cash, Sun Capital will make a credit bid from the $267.7 million in second- lien, pay-in-kind notes. The bid from Sun Capital is subject to higher and better offers at an auction. Under the proposed time-line, bids would be due Nov. 24, followed by an auction on Dec. 1. A competing bid must be at least $122.6 million in cash. Friendly's is one of two companies under Sun Capital's portfolio to file for bankruptcy in a span of two days. Mexican-food chain Real Mex, which operates restaurants such as Chevys, filed in Delaware bankruptcy court on Oct. 3, 2011. On Oct. 12, 2011, the U.S. Trustee appointed the Committee. The Committee currently consists of seven members. The Committee selected Akin Gump Straus Hauer & Feld LLP and Blank Rome LLP to serve as co-counsel to the Committee, and FTI Consulting to serve as the Committee's financial advisor. GB HERNDON: Court Reject's Adams Bank's Sanctions Bid ----------------------------------------------------- In the lawsuit, The Adams National Bank, v. GB Herndon and Associates, Inc., et al., Adv. Proc. No. 10-10052 (Bankr. D. D.C.), Bankruptcy Judge S. Martin Teel, Jr., denied a motion by the plaintiff, now a judgment creditor, to hold Gloria B. Herndon, a defendant and now a judgment debtor, in contempt for failure to appear for deposition and to produce documents at that deposition. A copy of the Court's Dec. 27, 2011 Memorandum Decision and Order is available at http://is.gd/RTkTKkfrom Leagle.com. GB Herndon and Associates, Inc., filed for Chapter 11 bankruptcy (Bankr. D. D.C. Case No. 10-00945) on Sept. 24, 2010. GOLDEN INDUSTRIAL: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Golden Industrial Laundry Inc. P.O. Box 7696 Ponce, PR 00732 Bankruptcy Case No.: 11-10887 Chapter 11 Petition Date: December 22, 2011 Court: U.S. Bankruptcy Court District of Puerto Rico (Ponce) Debtor's Counsel: Modesto Bigas Mendez, Esq. BIGAS & BIGAS P.O. Box 7462 Ponce, PR 00732 Tel: (787) 844-1444 E-mail: modesto@coqui.net Scheduled Assets: $3,042,619 Scheduled Liabilities: $2,279,785 The Company's list of its 12 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/prb11-10887.pdf The petition was signed by Pedro V. Perez Ortiz, president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Pedro V. Perez Ortiz 11-10686 12/22/11 GRAMERCY INSURANCE: A.M. Best Downgrades FSR to 'B' --------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to B (Fair) from B+ (Good) and issuer credit rating to "bb" from "bbb-" of Gramercy Insurance Company (GIC) (Dallas, TX). The outlook for both ratings has been revised to negative from stable. The rating actions reflect the deterioration in GIC's operating performance due to significant underwriting losses combined with significant premium growth that considerably has increased underwriting leverage and weakened overall capitalization through 2011. The ratings also reflect the increased dependence on reinsurance to support operations given strong premium growth in recent years, as well as the execution risk associated with refocusing operations while achieving profitability projections given competitive market conditions. Positive rating factors include recent management initiatives to improve performance, including the discontinuation of GoAuto beyond 2011; additional quota share reinsurance on GoAuto and Trucking risks during the fourth quarter of 2011, which provides surplus aid; the company's conservative investment portfolio; and sound overall liquidity position. The outlook revision reflects recent poor operating performance that has weakened capitalization, as well as the challenges associated with profitably refocusing operations given the increased reinsurance utilization over the near term. Further weakening in overall capitalization driven by ongoing premium growth and/or weak operating performance likely will result in additional negative rating pressure. GSC GROUP: Chapter 11 Trustee Files New Plan Documents ------------------------------------------------------ James L. Garrity, Jr., Chapter 11 Trustee for the estates of GSC Group, Inc., GSCP, LLC, GSCP (NJ), L.P., GSC Active Partners, Inc., GSCP (NJ), Inc., GSCP (NJ) Holdings, L.P.. and GSC Secondary Interest Fund, LLC, filed on Nov. 28, 2011, a modified joint Chapter 11 plan for the Debtors other than GSC Secondary Interest Fund, LLC [BLACKLINE VERSION]. On the Effective Date, the Debtors will cease all operations and the administration of the Plan will become the general responsibility of the Liquidating Trustee. After the Effective Date, the Debtors other than GSC Group will be wound down and dissolved. The Chapter 11 Trustee's Plan segregates the various Claims against and Interests in the Debtors other than GSC Secondary Interest Fund, LLC, into four (4) classes: Secured Claims (Class 1), Other Priority Claims (Class 2), General Unsecured Claims (Class 3) and Equity Interests (Class 4). The only Entities entitled to vote on this Plan are the Holders of General Unsecured Claims in Class 3. Holders of Claims in Class 3 will receive (A) their Pro-Rata Share of Remaining Plan Cash and (B) their Pro-Rata Share of Trust Units, on or as soon as practicable after the Effective Date. Claims in Classes 1 and 2 will be paid in full. Holders of Claims in these Classes are, thus, presumed to have accepted the Plan and are not entitled to vote. Holders of Equity Interests in Class 4 will not receive or retain any property or interest in property on account of such Equity Interests. On the Effective Date, all Equity Interests will be canceled, extinguished and discharged. Holders of Equity Interests are deemed to reject the Plan. A copy of the blackline version of the Chapter 11 Trustee's modified joint Chapter 11 plan for the Debtors other than GSC Secondary Interest Fund, LLC, is available for free at: http://bankrupt.com/misc/gscgroup.doc984.pdf About GSC Group Florham Park, New Jersey-based GSC Group, Inc. -- http://www.gsc.com/-- was a private equity firm that specialized in mezzanine and fund of fund investments. Originally named Greenwich Street Capital Partners Inc. when it was a subsidiary of Travelers Group Inc., GSC became independent in 1998 and at one time had $28 billion of assets under management. Market reverses, termination of some funds, and withdrawal of customers' investments reduced funds under management at the time of bankruptcy to $8.4 billion. GSC Group, Inc., filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B. Solow, Esq., at Kaye Scholer LLP, served as the Debtor's bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's notice and claims agent. Capstone Advisory Group LLC served as the Debtor's financial advisor. The Debtor estimated its assets at $1 million to $10 million and debts at $100 million to $500 million as of the Chapter 11 filing. Since Jan. 7, 2011, the Debtors have been operated by James L. Garrity Jr., as Chapter 11 trustee for the Debtors. The Chapter 11 trustee tapped Shearman & Sterling LLP as his counsel, and Togut, Segal & Segal LLP as his conflicts counsel. No committee of unsecured creditors has been appointed in the case. The Chapter 11 trustee completed the sale of business in July 2011 and filed a liquidating Chapter 11 plan and explanatory disclosure statement in late August. The bankruptcy court authorized the trustee to sell the business to Black Diamond Capital Finance LLC, as agent for the secured lenders. Proceeds were used to pay secured claims. The price paid by the lenders' agent was designed for full payment on $256.8 million in secured claims, with $18.6 million cash left over. Black Diamond bought most assets with a $224 million credit bid, a $6.7 million note, $5 million cash, and debt assumption. A minority group of secured lenders filed an appeal from the order allowing the sale. Through a suit in state court, the minority lenders failed to halt Black Diamond from completing the sale. The Chapter 11 Trustee and Black Diamond have filed rival repayment plans for GSC Group. As reported in the TCR on Dec. 16, 2011, Hilary Russ at Bankruptcy Law360 reports that the Chapter 11 trustee for GSC Group, Inc., reached a handshake deal on Dec. 13, 2011, ending a bitter dispute with Black Diamond that delayed a $235 million asset sale. Adam Goldberg, Esq., and Douglas Bacon, Esq., at Latham & Watkins, represent Black Diamond Capital Management, LLC, as counsel. GSC GROUP: Black Diamond Amends Proposed Plan for Debtor -------------------------------------------------------- Black Diamond Capital Management, LLC, filed on Dec. 3, 2011, a Third Amended Joint Chapter 11 Plan for GSC Group, Inc., and its affiliated Debtors. BDCM has not filed an Amended Disclosure Statement related to its Plan. On the Effective Date, the Liquidating Trust will be formed pursuant to the Liquidating Trust Agreement for the primary purpose of liquidating the assets transferred to it with no objective to continue or engage in the conduct of a trade or business, except to the extent reasonably necessary to, and consistent with, the purpose of the Liquidating Trust. The BDCM Plan segregates the various Claims against and Interests in the Debtors other than GSC Secondary Interest Fund, LLC, into four (4) classes: Secured Claims (Class 1), Other Priority Claims (Class 2), General Unsecured Claims (Class 3), Preferred Equity Interests (Class 4) and Remaining Equity Interests (Class 5). The only Entities entitled to vote on the Plan are the Holders of General Unsecured Claims in Class 3 and Holders of Preferred Equity Interests in Class 4. Secured Claims in Class 1 will receive payment in full or its collateral. Other Priority Claims in Class 2 will receive payment in full. Holders of Claims in these Classes are, thus, presumed to have accepted the Plan and are not entitled to vote. Each Holder of an Allowed General Unsecured Claim in Class 3 will be permitted to elect the Up-front Cash Option, the Combination Cash Option, or the Equity Option. Holders of Preferred Equity Interests in Class 4 will be issued Reorganized GSC Group Class A Common Stock, according to their Pro Rata Share of Preferred Equity Interests, equal to 62% of total Reorganized GSC Group Common Stock (with 75.1% of voting rights until the conversion of the Reorganized GSC Group Convertible Class B Common Stock to Reorganized GSC Group Class C Common Stock, at which time the voting rights of such existing Common Equity Interests will be diluted to 51%) as a result of the issuance of the Reorganized GSC Group Class C Common Stock. Class 4 is Impaired. Holders of Preferred Equity Interests are entitled to vote to accept or reject this Plan. Holders of Remaining Equity Interests in Class 5 will not receive or retain any property or interest in property on account of such Remaining Equity Interests. On the Effective Date, all Remaining Equity Interests will be canceled, extinguished and discharged. Class 5 is Impaired. Holders of Remaining Equity Interests are deemed to reject the Plan and, therefore, are not entitled to vote. A copy of BDCM's Third Amended Joint Chapter 11 Plan for the Debtors is available for free at: http://bankrupt.com/misc/gscgroup.bdcmplan.doc1008.pdf About GSC Group Florham Park, New Jersey-based GSC Group, Inc. -- http://www.gsc.com/-- was a private equity firm that specialized in mezzanine and fund of fund investments. Originally named Greenwich Street Capital Partners Inc. when it was a subsidiary of Travelers Group Inc., GSC became independent in 1998 and at one time had $28 billion of assets under management. Market reverses, termination of some funds, and withdrawal of customers' investments reduced funds under management at the time of bankruptcy to $8.4 billion. GSC Group, Inc., filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B. Solow, Esq., at Kaye Scholer LLP, served as the Debtor's bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's notice and claims agent. Capstone Advisory Group LLC served as the Debtor's financial advisor. The Debtor estimated its assets at $1 million to $10 million and debts at $100 million to $500 million as of the Chapter 11 filing. Since Jan. 7, 2011, the Debtors have been operated by James L. Garrity Jr., as Chapter 11 trustee for the Debtors. The Chapter 11 trustee tapped Shearman & Sterling LLP as his counsel, and Togut, Segal & Segal LLP as his conflicts counsel. No committee of unsecured creditors has been appointed in the case. The Chapter 11 trustee completed the sale of business in July 2011 and filed a liquidating Chapter 11 plan and explanatory disclosure statement in late August. The bankruptcy court authorized the trustee to sell the business to Black Diamond Capital Finance LLC, as agent for the secured lenders. Proceeds were used to pay secured claims. The price paid by the lenders' agent was designed for full payment on $256.8 million in secured claims, with $18.6 million cash left over. Black Diamond bought most assets with a $224 million credit bid, a $6.7 million note, $5 million cash, and debt assumption. A minority group of secured lenders filed an appeal from the order allowing the sale. Through a suit in state court, the minority lenders failed to halt Black Diamond from completing the sale. The Chapter 11 Trustee and Black Diamond have filed rival repayment plans for GSC Group. As reported in the TCR on Dec. 16, 2011, Hilary Russ at Bankruptcy Law360 reports that the Chapter 11 trustee for GSC Group, Inc., reached a handshake deal on Dec. 13, 2011, ending a bitter dispute with Black Diamond that delayed a $235 million asset sale. Adam Goldberg, Esq., and Douglas Bacon, Esq., at Latham & Watkins, represent Black Diamond Capital Management, LLC, as counsel. HAWKINS TREE: Case Summary & 13 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Hawkins Tree Farm, Inc. dba Hawkins Nursery & Landscape Co. Inc. 6710 Barkworth Dallas, TX 75248 Bankruptcy Case No.: 11-61119 Chapter 11 Petition Date: December 20, 2011 Court: U.S. Bankruptcy Court Eastern District of Texas (Tyler) Debtor's Counsel: Glen E. Patrick, Esq. MCNALLY & PATRICK, LLP 100 E Ferguson Street, Suite 400 Tyler, TX 75702 Tel: (903) 597-6301 Fax: (903) 597-6302 E-mail: gpoffice@suddenlinkmail.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 13 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/txeb11-61119.pdf The petition was signed by Ann Hawkins, secretary. HCA HOLDINGS: Appoints Dr. Wayne Riley to Board of Directors ------------------------------------------------------------ HCA Holdings, Inc., announced that Wayne J. Riley, M.D., President and CEO of Meharry Medical College, has been named an independent director of HCA's board, effective Jan. 1, 2012. With his addition, HCA's board of directors increases from 12 to 13. "Dr. Riley has a strong background in academic medicine, primary care, health policy and health administration," said Richard M. Bracken, Chairman and chief executive officer of HCA. "He is a highly respected health leader, and we are pleased to welcome him to our board of directors." Under Dr. Riley's leadership, Meharry Medical College in Nashville -- the country's largest private, historically black academic health center for educating health professionals and scientists -- has enhanced its clinical, academic and research programs as well as increased community, national and philanthropic engagement. Since Dr. Riley's appointment to Meharry in 2007, the school has established three U.S. Department of Veterans Affairs outpatient clinics, created the Robert Wood Johnson Foundation Center for Health Policy, and received accreditation for its public health master's degree program. Dr. Riley holds the academic rank of Professor of Internal Medicine at Meharry and at Vanderbilt University School of Medicine and is also a Senior Health Policy Associate at the Robert Wood Johnson Foundation Health Policy Center at Meharry. He is a Diplomate of the American Board of Internal Medicine and a Master of the American College of Physicians. He earned a Bachelor of Arts from Yale University, a Master of Public Health in Health Systems Management from Tulane University School of Public Health & Tropical Medicine, an M.D. from the Morehouse School of Medicine and an MBA from Rice University's Jesse H. Jones Graduate School of Business. Prior to his current role at Meharry, Dr. Riley, 52, served as a corporate officer of the Baylor College of Medicine where he was Vice President and Vice Dean for Health Affairs and Governmental Relations. About HCA Inc. Headquartered in Nashville, Tennessee, HCA is the nation's largest acute care hospital company with 162 hospitals and 104 freestanding surgery centers (including eight hospitals and eight freestanding surgery centers that are accounted for using the equity method) as of Sept. 30, 2010. For the 12 months ended Sept. 30, 2010, the company recognized revenue in excess of $30 billion. The Company's balance sheet at Sept. 30, 2011, showed $23.75 billion in total assets, $32.81 billion in total liabilities, and a $9.06 billion stockholders' deficit. * * * In May 2011, Moody's Investors Service upgraded the Corporate Family and Probability of Default Ratings of HCA Inc. (HCA) to B1 from B2. "The upgrade of HCA's rating reflects the considerable progress the company has made in improving financial metrics and managing the company's maturity profile since the November 2006 LBO," said Dean Diaz, a Moody's Senior Credit Officer. "While the funding of distributions to shareholders at the end of 2010 increased debt levels, the growth in EBITDA and debt repayment since the LBO have improved leverage metrics considerably from the high levels seen just after the company went private," continued Diaz. As reported by the Troubled Company Reporter on March 14, 2011, Moody's Investors Service commented that the completion of the IPO by HCA Holdings, Inc., has no immediate impact on the company's B2 Corporate Family Rating. The outlook for the ratings remains positive. While Moody's believes that the completion of the IPO is a credit positive since proceeds are expected to be used to repay outstanding debt, the estimated $2.6 billion of proceeds to the company won't meaningfully reduce HCA's $28.2 billion debt load. In the March 16, 2011, edition of the TCR, Fitch Ratings has upgraded its ratings for HCA Inc. and HCA Holdings Inc., including the companies' Issuer Default Ratings which were upgraded to 'B+' from 'B'. The Rating Outlook is revised to Stable from Positive. The ratings apply to approximately $28.2 billion in debt outstanding at Dec. 31, 2010. Fitch noted that HCA has made significant progress in reducing debt leverage since it was taken private in 2006 in a LBO which added $17 billion to the company's debt balance; at Dec. 31, 2006, immediately post the LBO, debt-to- EBITDA was 6.7x. Most of the reduction in debt leverage over the past four years was accomplished through growth in EBITDA, which Fitch calculates has expanded by $1.7 billion or 40% to $5.9 billion for 2010 versus $4.2 billion in 2006. Although the company did not undertake a significant organizational restructuring post the LBO, management has nevertheless been successful in growing EBITDA and significantly expanding discretionary free cash flow (FCF). Fitch believes this was accomplished through various operational initiatives, including expansion of profitable service lines and the divestiture of some under performing hospitals, as well as the generally resilient operating trend of the for-profit hospital industry during the recent economic recession despite the pressure of increased levels of uncompensated care and generally weak organic patient volume trends. HILLSIDE DAIRY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Hillside Dairy Partnership W2345 County Highway F Albany, WI 53502 Bankruptcy Case No.: 11-17625 Chapter 11 Petition Date: December 21, 2011 Court: U.S. Bankruptcy Court Western District of Wisconsin (Madison) Judge: Robert D. Martin Debtor's Counsel: Kristin J. Sederholm, Esq. KREKELER STROTHER, S.C. 15 N. Pinckney Street P.O. Box 828 Madison, WI 53701-0828 Tel: (608) 258-8555 E-mail: ksederho@ks-lawfirm.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 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wiwb11-17625.pdf The petition was signed by Harvey W. Disch Jr. and Paul Pluss. IRVINE SENSORS: Incurs $15.7 Million Net Loss in Fiscal 2011 ------------------------------------------------------------ Irvine Sensors Corporation filed with the U.S. Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss of $15.76 million on $14.09 million of total revenues for the fiscal year ended Oct. 2, 2011, compared with a net loss of $11.15 million on $11.71 million of total revenues for the fiscal year ended Oct. 3, 2010. The Company's balance sheet at Oct. 2, 2011, showed $10.58 million in total assets, $29.29 million in total liabilities and a $18.71 million total stockholders' deficit. The Company's auditors, Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport Beach, Calif., did not include a "going concern qualification" in its report on the Company's fiscal 2011 Annual Report. As previously reported, Squar Milner expressed substantial doubt about the Company's ability to continue as a going concern following the 2010 financial results. The independent auditors noted that as of Oct. 3, 2010, the Company has negative working capital of $10.1 million and a stockholders deficit of $10.1 million. A full-text copy of the Form 10-K is available for free at: http://is.gd/HXyJtg About Irvine Sensors Headquartered in Costa Mesa, Calif., Irvine Sensors Corporation (OTC BB: IRSN) -- http://www.irvine-sensors.com/-- is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating said products. Irvine Sensors also conducts research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications. IRVINE SENSORS: Files Form S-8, Registers 1.2-Mil. Common Shares ---------------------------------------------------------------- Irvine Sensors Corporation filed with the U.S. Securities and Exchange Commission a Form S-8 registration statement relating to the registration of 1,250,000 shares of common stock issuable pursuant to Irvine Sensors Corporation Amended and Restated 2006 Omnibus Incentive Plan. The proposed maximum offering price is $100,000. A full-text copy of the prospectus is available at: http://is.gd/wJGccL About Irvine Sensors Headquartered in Costa Mesa, Calif., Irvine Sensors Corporation (OTC BB: IRSN) -- http://www.irvine-sensors.com/-- is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating said products. Irvine Sensors also conducts research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications. The Company reported a net loss of $15.76 million on $14.09 million of total revenues for the fiscal year ended Oct. 2, 2011, compared with a net loss of $11.15 million on $11.71 million of total revenues for the fiscal year ended Oct. 3, 2010. The Company's balance sheet at Oct. 2, 2011, showed $10.58 million in total assets, $29.29 million in total liabilities and a $18.71 million total stockholders' deficit. LITHIUM TECHNOLOGY: Incurs $947,000 Net Loss in Third Quarter ------------------------------------------------------------- Lithium Technology Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $947,000 on $1.66 million of total revenue for the three months ended Sept. 30, 2011, compared with a net loss of $3.69 million on $1.46 million of total revenue for the same period during the prior year. The Company reported a net loss of $7.25 million on $6.35 million of products and services sales for the year ended Dec. 31, 2010, compared with a net loss of $10.51 million on $7.37 million of product and services sales during the prior year. The Company reported a net loss of $12.26 million on $6.06 million of total revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $5.52 million on $4.51 million of total revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $8.83 million in total assets, $35.09 million in total liabilities and a $26.26 million total stockholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/oPIUwl About Lithium Technology Plymouth Meeting, Pa.-based Lithium Technology Corporation is a mid-volume production stage company that develops large format lithium-ion rechargeable batteries to be used as a new power source for emerging applications in the automotive, stationary power, and national security markets. Going Concern As reported by the TCR on April 8, 2011, Amper, Politziner & Mattia, LLP, Edison, New Jersey, after auditing the Company's financial statements for the year ended Dec. 31, 2010, noted that the Company has recurring losses from operations since inception and has a working capital deficiency that raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning The Company's operating plan seeks to minimize its capital requirements, but the expansion of its production capacity to meet increasing sales and refinement of its manufacturing process and equipment will require additional capital. The Company raised capital through the sale of securities closing in the second quarter of 2011 and realized proceeds from the licensing of its technology pursuant to the terms of a licensing agreement and the sale of inventory used in manufacturing its batteries as part of the establishment of a joint venture in the fourth quarter of 2011, but is continuing to seek other financing initiatives and needs to raise additional capital to meet its working capital needs, for the repayment of debt and for capital expenditures. Such capital is expected to come from the sale of securities. The Company believes that if it raises approximately $4 million in additional debt and equity financings it would have sufficient funds to meet its needs for working capital, capital expenditures and expansion plans through the year ending Dec. 31, 2012. No assurance can be given that the Company will be successful in completing any financings at the minimum level necessary to fund its capital equipment, debt repayment or working capital requirements, or at all. If the Company is unsuccessful in completing these financings, it will not be able to meet its working capital, debt repayment or capital equipment needs or execute its business plan. In that case the Company will assess all available alternatives including a sale of its assets or merger, the suspension of operations and possibly liquidation, auction, bankruptcy, or other measures. These conditions raise substantial doubt about the Company's ability to continue as a going concern. MARKETING WORLDWIDE: Delays Form 10-K for 2011 ---------------------------------------------- Marketing Worldwide Corporation notified the U.S. Securities and Exchange Commission that it was awaiting information from outside third parties in order to complete the Form 10-K for the period ended Sept. 30, 2011. About Marketing Worldwide Based in Howell, Michigan, Marketing Worldwide Corporation operates through the holding company structure and conducts its business operations through its wholly owned subsidiaries Colortek, Inc., and Marketing Worldwide, LLC. Marketing Worldwide, LLC, is a complete design, manufacturer and fulfillment business providing accessories for the customization of vehicles and delivers its products to large global automobile manufacturers and certain Vehicle Processing Centers primarily in North America. MWW operates in a 23,000 square foot leased building in Howell Michigan. Colortek, Inc., is a Class A Original Equipment painting facility and operates in a 46,000 square foot owned building in Baroda, which is in South Western Michigan. MWW invested approximately $2 million into this paint facility and expects the majority of its future growth to come from this business. As reported in the Troubled Company Reporter on Jan. 24, 2011, Marcum LLP, in New York, expressed substantial doubt about Marketing Worldwide's ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2010. The independent auditors noted that the Company has a working capital deficiency and has suffered substantial recurring losses from operations. The Company also reported a net loss of $1.12 million on $1.31 million of revenue for the nine months ended June 30, 2011, compared with a net loss of $1.34 million on $3.22 million of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2011, showed $1.66 million in total assets, $5.23 million in total liabilities, $3.50 million in Series A convertible preferred stock, and a $7.07 million total stockholders' deficiency. MCCLATCHY CO: BNP Paribas Discloses 4.7% Equity Stake ----------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, BNP Paribas, S.A., London Branch, disclosed that, as of Dec. 23, 2011, it beneficially owns 2,837,195 shares of common stock of The McClatchy Company representing 4.7% of the shares outstanding. As previously reported by the TCR on Dec. 16, 2011, BNP Paribas disclosed beneficial ownership of 3,600,694 shares of common stock or 5.9% equity stake. A full-text copy of the amended filing is available at http://is.gd/UV2FPg About The McClatchy Company Sacramento, Calif.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The Company's balance sheet at Sept. 25, 2011, showed $2.98 billion in total assets, $2.76 billion in total liabilities and $214.83 million stockholders' equity. * * * In February 2010, Moody's Investors Service upgraded The McClatchy Company's Corporate Family Rating to Caa1 from Caa2, Probability of Default Rating to Caa1 from Caa2, and senior unsecured and unguaranteed note ratings to Caa2 from Caa3, concluding the review for upgrade initiated on January 27, 2010. The upgrades reflect McClatchy's improved liquidity position and reduced near-term default risk following completion of the company's refinancing, and its ability to stabilize EBITDA performance through significant cost reductions. The rating outlook is stable. In the May 12, 2011, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Sacramento, Calif.-based The McClatchy Co. to 'B-' from 'B'. "The downgrade reflects our expectation that continued declines in advertising revenues will outweigh the company's cost reduction measures, resulting in steadily rising debt leverage over the intermediate term despite some modest debt reduction that will likely occur over the near term," said Standard & Poor's credit analyst Harold Diamond. The 'B-' corporate credit rating on Sacramento, Calif.- based McClatchy reflects Standard & Poor's expectation that advertising revenues will decline at a high-single-digit% rate in 2011, and EBITDA will fall at a mid-double-digit pace. As reported by the Troubled Company Reporter on Feb. 8, 2011, Fitch Ratings has upgraded the Issuer Default Rating of the McClatchy Company to 'B-'. The Rating Outlook is Stable. The revenue declines endured by McClatchy in 2010 were materially lower than Fitch's expectation. Fitch had modeled declines in the mid-teens versus actual declines in the mid-single digits. While Fitch expected the company to focus on cost containment, the company's success exceeded Fitch expectations. Fitch had expected EBITDA to decline more than 10% versus actual EBITDA growth in the mid-single digits. As a result absolute debt and leverage were better than Fitch expectations. Fitch estimates 2010 year end gross unadjusted leverage of approximately 4.7 times. Fitch expects the company will be able to meet its pension funding obligations and satisfy all of its maturities up to and including its senior unsecured notes due in 2014 ($169 million balance as of Sept. 30, 2010). Also, Fitch does not expect McClatchy will have any issues meeting its credit agreement financial covenants (under both Fitch's base and stress cases). MT. VERNON: Can Use First Mariner Bank Cash Through Feb. 29 ----------------------------------------------------------- Bankruptcy Judge David E. Rice signed off on a stipulation and consent order continuing Mt. Vernon Properties LLC's authority to use cash collateral of First Mariner Bank and granting adequate protection through the earlier of a closing on the auction sale of the real property subject to First Mariner's liens or Feb. 29, 2012. A copy of the Stipulation and Consent Order is available at http://is.gd/7QlRXTfrom Leagle.com. Susan J. Klein, Esq., and Lawrence D. Coppel, Esq. -- sklein@gfrlaw.com -- at Gordon, Feinblatt, Rothman, Hoffberger & Hollander LLC, argue for First Mariner Bank. 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. -- astein@meridianlawfirm.com -- 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. NEXT GENERATION: Cancels Agreements with Pegasus Energy ------------------------------------------------------- Next Generation Energy Corp. previously announced that it had entered into an agreement with Pegasus Energy Development, LLC, to participate in a joint venture in Central Texas and another agreement to buy 7,715 acres of natural gas and oil rights in southeastern Kentucky. However, the Company could not obtain the necessary financing to meet its obligations under the agreements, and both agreements have terminated. About Next Generation Springfield, Va.-based Next Generation Media Corporation was incorporated in the State of Nevada in Nov. of 1980 as Micro Tech Industries, with an official name change to Next Generation Media Corporation in April of 1997. The Company, through its wholly owned subsidiary, United Marketing Solutions, Inc., provides direct marketing products, which involves the designing, printing, packaging, and mailing of public relations and marketing materials and coupons for retailers who provide services. Sales are conducted through a network of franchises that the Company supports on a wholesale basis. The Company's balance sheet at Sept. 30, 2011, showed $697,409 in total assets, $1.15 million in total liabilities, and a $457,341 total stockholders' deficit. The Company incurred a net operating loss in the three and nine months ended Sept. 30, 2011, and has no revenues for 2011. These factors create an uncertainty about the Company's ability to continue as a going concern. NORTEL NETWORKS: 3rd Cir. Rules on Police Power Exception Issue --------------------------------------------------------------- The U.S. Court of Appeals for the Third Circuit upheld the district court ruling that affirmed a bankruptcy court decision holding that the police power exception under 11 U.S.C. Sec. 362(b)(4) does not apply to the participation of the Trustee of Nortel Networks U.K. Pension Plan and the U.K. Board of the Pension Protection Fund in the U.K. pension proceedings. The Third Circuit said the Trustee and Pension Protection Fund have not shown that they fall within the police power exception to the automatic stay. The U.K. Pension Plan Trustee and the U.K. Board of the Pension Protection Fund appealed from the District Court order affirming the decision of the Bankruptcy Court to enforce the automatic stay against them with respect to their participation in U.K. pension proceedings. The Trustee and Pension Protection Fund argue that the U.K. pension proceedings, which were initiated by the U.K. Pensions Regulator, fall within the police power exception to the automatic stay, which allows "a governmental unit" to bring or continue actions against a debtor to prevent or stop violations of law affecting matters of public health, safety, or welfare. The Debtors, including U.S.-based Nortel Networks, Inc., and NN Caribbean and Latin American, together with the Committee of Unsecured Creditors of NNI, argue that the police power exception does not apply because the Trustee and PPF are private parties and not "governmental units" as defined in the Bankruptcy Code, and the purpose of the U.K. proceedings is to address private pecuniary interests rather than a matter of public concern. In September 2009, the Trustee and Pension Protection Fund timely filed joint claims against the U.S. Nortel entities in the Bankruptcy Court. Those claims allege that the NNUK pension plan is underfunded by an estimated $3.1 billion -- or GBP2.1 billion -- and that the U.K. Pensions Regulator may seek to require certain of the U.S. Debtors, including NNI and NN CALA, to provide financial support for the NNUK plan under the U.K. Pensions Act 2004. The claims of the Trustee and Pension Protection Fund in the U.S. bankruptcy proceedings were filed as contingent and unliquidated because they are predicated on the outcome of the U.K. proceedings. The U.K. regulatory proceedings are to determine the extent of the liability of NNUK affiliates for the deficit because NNUK's pension plan is a defined benefit pension scheme established under and governed by U.K. law. A copy of the Third Circuit's Dec. 29 dated opinion is available at http://is.gd/Cn1OhQfrom Leagle.com. About Nortel Networks Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was once North America's largest communications equipment provider. It has sold most of the businesses while in bankruptcy. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway,Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009. Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. On May 28, 2009, at the request of the Administrators, the Commercial Court of Versailles, France ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in this Court for recognition of the English Proceedings as foreign main proceedings under chapter 15 of the Bankruptcy Code. Nortel Networks divested off key assets while in Chapter 11. Nortel has raised $3.2 billion by selling its operations as it prepares to wind up a two-year liquidation due to insolvency. In June 2011, Nortel added US$4.5 billion to its cash pile after agreeing to sell its remaining patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a $900 million stalking horse bid by Google Inc. at an auction. The deal closed in July 2011. Nortel Networks has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. NORTHAMPTON GENERATING: Will Have No Creditors' Panel ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Northampton Generating Co. LP won't have a creditors' committee looking over its shoulder throughout the Chapter 11 case. The U.S. Trustee was unable to appoint a committee because no one was willing to serve. Northampton Generating Co. LP is the owner of a 112 megawatt electric generating plant in Northampton, Pennsylvania. The plant is fueled with waste products, including waste coal, fiber waste, and tires. The power is sold under a long-term agreement to an affiliate of FirstEnergy Corp. Northampton Generating filed for Chapter 11 bankruptcy (Bankr. W.D.N.C. Case No. 11-33095) on Dec. 5, 2011. Attorneys at Moore & Van Allen PLLC serve as counsel to the Debtors. Houlihan Lokey Capital, Inc., is the financial advisor. The Debtor estimated assets and debts of up to $500 million. Debt includes $73.4 million owing on senior bonds issued through the Pennsylvania Economic Development Financing Authority. PROPER POWER: Andrew Kacic Resigns as President ----------------------------------------------- Andrew Kacic voluntarily resigned as President of Proper Power and Energy, Inc., as well as his positions with American Resources, Inc., PPWE's wholly owned subsidiary. About Proper Power Tampa, Florida-based Proper Power and Energy, Inc. is an oil and natural gas exploration company, whose growth strategy is to acquire mineral rights and search for and develop known reserves for further production, through an efficient scientific approach toward exploration. Peter Messineo, CPA, in Palm Harbor, Florida, expressed substantial doubt Proper Power and Energy,'s ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company is without significant operating revenues and has losses from operations and has an accumulated deficit. The Company also reported a net loss of $156,086 on $8,813 of net lease loss for the nine months ended Sept. 30, 2011, compared with a net loss of $98,240 on $0 of net lease income for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $1.07 million in total assets, $1.24 million in total liabilities, and a $174,474 total stockholders' deficit. PROTEONOMIX INC: Completes Payment for Clinical Trial of UMK-121 ---------------------------------------------------------------- Proteonomix, Inc., has completed all payments required from Proteonomix to commence a Clinical Study entitled "UMK-121 in Patients with Liver Disease." As previously announced, the Company entered into an Agreement to conduct the clinical trial with the University of Miami. That Agreement required the University to pay expenses associated with the clinical study and The Company was required to assist financially with the clinical study. Michael Cohen, President of the Company, stated: "The financing that was required to complete the Company's obligation with respect to the Trial was provided Friday, December 23, 2011. We previously thanked the University for its generous assistance in the agreement to conduct a clinical trial of UMK-121. The Company has previously described the terms of the agreement to license and develop and the patent application of the UMK 121 technology. The Company will work together with the University and the principal investigators to initiate the clinical study." Mr. Cohen continued, "Our UMK-121 pharmaceutical therapy is advancing toward its first human clinical trial in ESLD ("End Stage Liver Disease") patients. We hope to provide patients who are suffering from this debilitating and mortal condition with alternatives. We believe that the commercialization of this technology can provide Proteonomix with significant revenue potential. According to United Network for Organ Sharing ('UNOS') there are over 100,000 patients on the transplant waiting list at any given time. According to the 'NIH') there are over 500,000 patients in end stage Kidney disease. According to Organ Donation and Transplantation ('NWHIC') over 60,000 Americans suffer from End Stage Liver Disease ("ESLD"). The Company will continue to provide information about the clinical study in the upcoming weeks and months consistent with our understanding with the University and ethical considerations." About Proteonomix Proteonomix, Inc. (OTC BB: PROT) -- http://www.proteonomix.com/-- is a biotechnology company focused on developing therapeutics based upon the use of human cells and their derivatives. The Company's balance sheet at June 30, 2011, showed $3.51 million in total assets, $6.95 million in total liabilities and a $3.43 million total stockholders' deficit. As reported in the TCR on April 1, 2011, KBL, LLP, in New York, expressed substantial doubt about Proteonomix, Inc.'s ability to continue as a going concern, following the Company's 2010 results. The independent auditor noted that the Company has sustained significant operating losses and is currently in default of its debt instrument and needs to obtain additional financing or restructure its current obligations. R. KUNTZMAN: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: R. Kuntzman Inc. 13515 Oyster Road Alliance, OH 44601 Bankruptcy Case No.: 11-63964 Chapter 11 Petition Date: December 20, 2011 Court: U.S. Bankruptcy Court Northern District of Ohio (Canton) Judge: Russ Kendig Debtor's Counsel: Anthony J. DeGirolamo, Esq. 116 Cleveland Avenue, N.W., Suite 307 Canton, OH 44702 Tel: (330) 588-9700 Fax: (330) 588-9713 E-mail: ajdlaw@sbcglobal.net Debtor's Special Counsel: MCNAMARA DEMCZYK CO LPA Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by Kenneth A. Boatright, president. Affiliates that simultaneously sought Chapter 11 protection: Debtor Case No. ------ -------- Kuntzman Trucking Inc. 11-63965 Kuntzman Trucking Brokerage Inc. 11-63966 Kuntzman Properties LLC 11-63967 RITE AID: Files Form 10-Q, Incurs $51.9MM Net Loss in Q3 2012 ------------------------------------------------------------- Rite Aid Corporation filed with the U.S. Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $51.98 million on $6.31 billion of revenue for the 13-week period ended Nov. 26, 2011, compared with a net loss of $79.07 million on $6.20 billion of revenue for the 13-week period ended Nov. 27, 2010. For the 39-week period ended Nov. 26, 2011, the Company reported a net loss of $207.32 million on $18.97 billion of revenue, compared with a net loss of $349.73 million on $18.75 billion of revenue for the 39-week period ended Nov. 27, 2010. The Company's balance sheet at Nov. 26, 2011, showed $7.55 billion in total assets, $9.96 billion in total liabilities and a $2.40 billion total stockholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/kXm7WX About Rite Aid Corp. Drugstore chain Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, has more than 4,700 stores in 31 states and the District of Columbia and fiscal 2010 annual revenues of $25.7 billion. Rite Aid carries 'Caa2' probability of default and corporate family ratings from Moody's Investors Service. It has a 'B-' corporate credit rating from Standard & Poor's Ratings Services. The TCR reported on Feb. 21, 2011 that Standard & Poor's Ratings Services said that it assigned its 'B+' issue rating and '1' recovery rating to Rite Aid Corp.'s proposed $343 million senior secured term loan tranche 5 due 2018. The '1' recovery rating indicates S&P's expectation for very high (90%-100%) recovery in the event of a payment default. According to the company, it will use the proceeds to repay about $321 million in borrowings under its tranche 3 term loan due 2014. "The ratings reflect the difficulties Rite Aid faces in improving its well-below-average operating performance relative to its peers, especially amid intense industry competition," said Standard & Poor's credit analyst Ana Lai. They also reflect the company's significant debt burden and thin cash flow protection measures. As reported by the Troubled Company Reporter on Feb. 22, 2011, Moody's assigned a B3 rating to Rite Aid Corp.'s proposed $343 million Tranche 5 senior secured first lien term loan due 2018. All other ratings including its Caa2 Corporate Family Rating, Caa2 Probability of Default Rating, and SGL-3 Speculative Grade Liquidity rating were affirmed. The rating outlook is stable. The proceeds will be used to repay the $343 million (including $21.2 original issue discount) Tranche 3 term loan due 2014. Following the repayment, the Tranche 3 term loan will be retired and its B3 rating withdrawn. SEARS HOLDINGS: Fitch Cuts LT Issuer Default Ratings to 'CCC' ------------------------------------------------------------- Fitch Ratings has downgraded its long-term Issuer Default Ratings (IDR) on Sears Holdings Corporation (Holdings) and its various subsidiary entities to 'CCC' from 'B'. The ratings on various tranches of debt have also been downgraded by a notch. The Rating Outlook is Negative. The downgrades reflect the continued deterioration in EBITDA on worse than expected top-line growth, with both Kmart and Sears running negative mid-single-digit comps in the fourth quarter. EBITDA for 2011 is expected to be below $400 million versus $1.5 billion in 2010, based on Sears' update provided through Dec. 25, 2011. As a result, credit metrics continue to be pressured and leverage is expected to be 8.0 times (x) or more in 2011, up from 4.6x in 2010, versus Fitch's prior expectation of leverage increasing to the 6.0x-7.0x range. In addition, there is increasing risk that EBITDA could turn negative in 2012 with top-line contraction in the mid-single-digit range (due to comparable store sales decline and store closings) even if gross margin remains flat with 2011 levels. As a result, Sears will need to fund operations with increased borrowings. Liquidity is expected to remain adequate to fund 2012 working capital needs given current availability under the company's U.S. and Canadian facilities. However, Sears may need to access external sources of financing to fund operations in 2013 and beyond, as the magnitude of the decline in profitability and lack of visibility to turn operations around remain a major concern. If Sears is unable to access the capital markets or find other adequate sources of availability, and EBITDA remains at the current rate or lower, there is a heightened risk of restructuring over the next 24 months. Dwindling Liquidity: As of Dec. 23, 2011, Sears had $483 million of borrowings under the domestic revolver (vs. no borrowings in prior year), with $2.1 billion of availability under its domestic $3.275 billion credit facility due 2016 and $800 million under its CAD$800 million credit facility due 2015. Fitch expects that total availability at the end of its fiscal year (FY) ending January 2012 could be a bit lower than the $2.9 billion at Dec. 23 as Sears could draw down further to fund Spring inventory (December tends to be close to peak liquidity levels as retailers get flushed with holiday sale proceeds). Assuming cash balances in the $500 million to $600 million range, about $1.8 billion-$2 billion of availability under its domestic credit facility and $800 million under the Canadian credit facility, Fitch expects Sears will have liquidity of approximately $3.1 billion to $3.4 billion at FY end January 2012. This is almost $1.5 billion to $1.8 billion lower than the $4.9 billion in total liquidity at the end of FY end January 2011. The difference can be explained by the shortfall in EBITDA and the need to fund operations as well as funding required cash contributions to its underfunded pension plans and share buybacks. Fitch estimates that Sears would require a minimum of $400 million-$500 million in cash to run the business and approximately $1.5 billion to $1.7 billion to fund peak seasonal working capital needs during the 2012 holiday season (assuming lower inventory levels versus 2011 as a result of store closings and tighter inventory buys based on the company's recent announcements). As a result, real 'excess' liquidity adjusted for peak seasonal working capital needs would be in the range of $900 million to $1.5 billion. This does not take into account further shortfall in EBITDA and assumes Sears has full access to both its domestic and Canadian credit facilities. However, covenants may constrict liquidity levels over time if profitability continues to wane; for example, Sears needs to maintain a fixed-charge coverage ratio of 1.0x under its domestic credit facility if usage exceeds a certain amount. Fitch estimates Sears would need to generate EBITDA of $1.2 billion to $1.3 billion annually in 2012 and 2013 to service cash interest expense ($260 million-$280 million), capex ($400 million), contribution to pension plans ($300 million) and debt maturities. Other uses of cash could be working capital (which is expected to be a drain of $100 million to $150 million in 2011 before any impact from store closings) and share buybacks. Additional sources of liquidity include the ability to issue $1.75 billion in secured debt as permitted under its credit facility ($1 billion accordion feature to upsize the domestic credit facility and $750 million in second lien debt). However, Sears could have difficulty tapping into this debt given deteriorating operating trends and credit market conditions. Sears could also cut back on inventory (as noted in its recent press release), and further reduce capital expenditures and SG&A, but these would come at the expense of the top line unless Sears right-sizes the business through a large number of store closings. However, Fitch views the company's current plan of store closures (100 to 120 Kmart and Sears Full-Line stores which equates to approximately 5% of total square footage) as a modest source of liquidity relative to the significant deficiency in free cash flow. Market Share Losses = Tremendous Pressure on Operating Profitability: Domestic Sears and Kmart stores have been underperforming their retail peers on top-line growth for many years and the combined domestic entity has lost over $9.5 billion, or 20% of its 2006 domestic revenue base of $48 billion (the two companies merged in March 2005) through the third quarter of 2011 (on a latest 12- month basis). The top-line weakness reflects competitive pressures, inconsistent merchandising execution and the lack of clarity about the company's longer term retail strategy, particularly in the face of continuous changes in its top ranks. Sears' challenge will be to generate longer term sales and earnings growth at both Sears and Kmart in the face of continued market share gains by its largest retail peers within the department store, discount and big-box specialty retail segments. Sears' recent earnings pre-announcement points to 2011 EBITDA to come in below $400 million, a significant shortfall from the $1.45 billion generated in 2010 on weaker than expected comparable store sales across all its reporting segments. Fitch expects EBITDA could likely turn negative in 2012 on mid-single-digit top-line contraction (given both comp store declines and store closings) even with modest expense reduction of $100 million to $200 million and gross margins flat to 2011 levels. Recovery Considerations for Issue-Specific Ratings: In accordance with Fitch's Recovery Rating (RR) methodology, Fitch has assigned RRs based on the company's 'B' IDR. Fitch's recovery analysis assumes a liquidation value under a distressed scenario of approximately $6.7 billion (low seasonal inventory) to $7.7 billion (close to peak seasonal inventory) on inventory, receivables, and property, plant and equipment (PP&E). The $3.275 billion domestic senior secured credit facility, under which Sears Roebuck Acceptance Corp. (SRAC) and Kmart Corporation (Kmart Corp.) are the borrowers, is rated 'B+/RR1', indicating outstanding (90%-100%) recovery prospects in a distressed scenario. Holdings provides a downstream guarantee to both SRAC and Kmart Corp. borrowings and there are cross-guarantees between SRAC and Kmart Corp. The facility is also guaranteed by direct and indirect wholly-owned domestic subsidiaries of Holdings which owns assets that collateralize the facility. The facility is secured primarily by domestic inventory which has historically ranged from $8 billion to $10 billion around peak levels in November, and pharmacy and credit card receivables which range from $650 million to $700 million. The credit facility has an accordion feature that enables the company to increase the size of the credit facility or add a first-lien term loan tranche in an aggregate amount of up to $1 billion and issue $750 million in second-lien debt. The credit agreement imposes various requirements, including (but not limited to) the following: (1) if availability under the credit facility is beneath a certain threshold, the fixed-charge ratio as of the last day of any fiscal quarter be not less than 1.0x; (2) a cash dominion requirement if excess availability on the revolver falls below designated levels, and (3) limitations on its ability to make restricted payments, including dividends and share repurchases. The $1.25 billion second lien notes due October 2018 at Holdings are also rated 'B+/RR1'. The notes have a second lien on all domestic inventory and credit card receivables, essentially representing the same collateral package that backs the $3.275 billion credit facility on a first lien basis. While Fitch has not made a distinction between the first- and second-lien notes at this point given the significant collateral backing the notes and facility, it could do so in the future should Sears be able to exercise the accordion feature under the credit facility, issue additional second-lien notes or the assets serving as collateral decline materially. The notes contain provisions which require Holdings to maintain minimum asset coverage for total secured debt (failing which the company has to offer to buy notes sufficient to cure the deficiency at 101%). The senior unsecured notes are rated 'CCC/RR4', indicating average recovery prospects (31%-50%). While the credit facility and second-lien notes are overcollateralized currently and the spill- over could provide better than average recovery prospects for the unsecured bonds, factors considered in assigning the recovery rates include the potential sizable claims under lease obligations; the company's underfunded pension plan; the ability to add additional secured indebtedness; and the potential overestimation of recovery value assigned to owned PP&E under a liquidation scenario. The 31%-50% range would be in line with or better than the average recoveries in the retail sector for defaulted unsecured bonds, which have generally been in the 25%- 40% range over the past 10 years. The SRAC senior notes are guaranteed by Sears, which agrees to maintain SRAC's fixed-charge coverage at a minimum of 1.1x. In addition, Sears DC Corp. (SDC) benefits from an agreement by Sears to maintain a minimum fixed- charge coverage at SDC of 1.005x. Sears also agrees to maintain an ownership of and a positive net worth at SDC. Fitch has taken the following rating actions: Sears Holdings Corporation (Holdings) -- Long-term IDR downgraded to 'CCC' from 'B'; -- Secured bank facility downgraded to 'B+/RR1' from 'BB/RR1'; -- Second-lien secured notes downgraded 'B+/RR1' from 'BB/RR1'. Sears, Roebuck and Co. (Sears) -- Long-term IDR downgraded to 'CCC' from 'B'. Sears Roebuck Acceptance Corp. (SRAC) -- Long-term IDR downgraded to 'CCC' from 'B'; -- Short-term IDR downgraded to 'C' from 'B'; -- Commercial paper downgraded to 'C' from 'B'; -- Senior unsecured notes downgraded to 'CCC/RR4' from 'B/RR4'. Sears DC Corp. (SDC) -- Long-term IDR downgraded to 'CCC' from 'B'; -- Senior unsecured notes downgraded to 'CCC/RR4' from 'B/RR4'. Kmart Holding Corporation (Kmart) -- Long-term IDR downgraded to 'CCC' from 'B'. Kmart Corporation (Kmart Corp) -- Long-term IDR downgraded to 'CCC' from 'B'. The Rating Outlook is Negative. SECUREALERT INC: Incurs $9.8 Million Net Loss in Fiscal 2011 ------------------------------------------------------------ SecureAlert, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, reporting a net loss of $9.85 million on $17.96 million of total revenues for the fiscal year ended Sept. 30, 2011, compared with a net loss of $13.92 million on $12.45 million of total revenues during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $22.68 million in total assets, $9.07 million in total liabilities and $13.61 million in total equity. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, expressed substantial doubt about the Company's ability to continue as a going concern following the fiscal 2011 financial results. The independent auditors noted that the Company has incurred losses, negative cash flows from operating activities and has an accumulated deficit. A full-text copy of the Form 10-K is available for free at: http://is.gd/3kHMKw About SecureAlert Inc. Sandy, Utah-based SecureAlert, Inc. (OTC BB: SCRA) -- http://www.securealert.com/-- is an international provider of electronic monitoring systems, case management and services widely utilized by more than 650 law enforcement agencies worldwide. The Company's balance sheet at June 30, 2011, showed $15.18 million in total assets, $10.48 million in total liabilities, and $4.70 million in total equity. STELLAR GT: Receiver to Continue Managing Project Thru March 31 --------------------------------------------------------------- Bankruptcy Judge Paul Mannes approved a stipulation and order among debtors Stellar GT TIC LLC and VFF TIC LLC, and Wells Fargo Bank, N.A., as Trustee for the registered holders of Deutsche Mortgage & Asset Receiving Corporation, COMM 2007-C9, Commercial Mortgage Pass-Through Certificates; U.S. Bank National Association, as Trustee, as successor in interest to Bank of America, National Association, as Trustee, as successor in interest to Wells Fargo Bank, N.A., as Trustee for the registered holders of Deutsche Mortgage & Asset Receiving Corporation; CD 2007-CD5 Commercial Mortgage Pass-Through Certificates; and FCP Georgian Towers, LLC, acting by and through Helios AMC, LLC, in its capacity as Special Servicer. The parties agree that a receiver will continue to operate and manage The Georgian project through March 31, 2012. A Receivership Order entered prepetition was slated to expire by its own terms Dec. 31, 2011. A copy of the Stipulation and Order dated Dec. 29, 2011, is available at http://is.gd/htX2q8from Leagle.com. About Stellar GT TIC and VFF TIC Stellar GT TIC LLC and VFF TIC LLC own an 891-unit multi-family high rise property, consisting of two 14-story apartment buildings, located at 8750 Georgia Avenue in Silver Spring, Maryland, commonly known as "The Georgian". FCP Georgian Towers holds certain notes evidencing a mortgage loan guaranteed by the Debtors in the aggregate original principal amount of $185,000,000. On Dec. 30, 2009, FCP commenced a receivership action in the Circuit Court for Montgomery County, Case No. 324928-V, seeking the appointment of a receiver for the Project. Stellar GT TIC and VFF TIC filed for Chapter 11 bankruptcy (Bankr. D. Md. Case Nos. 11-22977 and 11-22980) on June 22, 2011. Judge Paul Mannes presides over the case. Michelle Maloney-Raymond is the case administrator. Matthew G. Summers, Esq., and Michelle McGeogh, Esq., at Ballard Spahr LLP, in Baltimore, serve as the Debtors' counsel. Mark Taylor, Esq. -- mdtaylor@kilpatricktownsend.com -- at Kilpatrick Townsend & Stockton LLP, in Washington, DC; and Jantra Van Roy, Esq. -- jvanroy@zeklaw.com -- at Zeichner Ellman & Krause LLP, in New York, represent the Lender. The U.S. Trustee for Region 4 notified the Court that he has not appointed an unsecured creditors' committee in the Chapter 11 cases of Stellar GT TIC LLC and VFF TIC LLC. The Debtors negotiated a plan of reorganization before filing for Chapter 11. The plan is premised on either (1) a sale of the project pursuant to an auction process or (2) a consensual restructuring of the secured debt. Broker CB Richard Ellis Inc. was hired to conduct the sale. On Nov. 22, 2011, Judge Mannes entered an order (I) finally approving the disclosure statement and (II) confirming Stellar GT TIC and VFF TIC's Joint Plan of Reorganization and authorizing (A) Sale of "The Georgian"free and clear of all liens, claims and interests and alternatively (B) restructuring pursuant to the Plan if the Sale does not close. The highest and best price offered at the Auction was the $193 million offer made by Lowe Real Estate Group-East, Inc. SUN CONSTRUCTION: Case Summary & 18 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Sun Construction Group Inc aka Sun Construction Group 650 Munoz Rivera Avenue, Suite 402 San Juan, PR 00918 Bankruptcy Case No.: 11-10900 Chapter 11 Petition Date: December 22, 2011 Court: U.S. Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Carlos Rodriguez Quesada, Esq. LAW OFFICE OF CARLOS RODRIGUEZ QUESADA P.O. Box 9023115 San Juan, PR 00902-3115 Tel: (787) 724-2867 E-mail: cerqlaw@coqui.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its 18 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/prb11-10900.pdf The petition was signed by Dennis O. Hanlan, president. TELVUE CORP: Enters Into $5MM Line of Credit with H.F. Lenfest -------------------------------------------------------------- TelVue Corporation entered into a Line of Credit Note with its majority stockholder, H.F. (Gerry) Lenfest. Under the terms of the Note, the Company may borrow, from time to time, up to the maximum principal amount of the Note, which is $5,000,000, for general working capital. The minimum advance under the Note is $100,000 and the interest rate of the Note is equal to the prime rate as stated in the Wall Street Journal from time to time plus one percent (1%). The Note contains customary events of default, including, among others, non-payment of principal and interest and in the event the Company is involved in certain insolvency proceedings. In the event of a default, all of the obligations of the Company under the Note may be declared immediately due and payable. The Note is unsecured and all borrowings plus interest are due six years from the date of the first advance under the Note unless extended or renewed. A copy of the Note is available for free at http://is.gd/X3UYRM About TelVue Corporation Mt. Laurel, N.J.-based TelVue Corporation is a broadcast technology company that specializes in playback, automation and workflow solutions for public, education and government ("PEG") television stations; cable, telephone company ("Telco") and satellite television providers; K-12 and higher education institutions; and professional broadcasters. The Company also reported a net loss of $2.43 million on $3.40 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $2.53 million on $2.71 million of revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $1.62 million in total assets, $26.15 million in total liabilities, and a $24.52 million stockholders' deficit. ParenteBeard LLC, in Huntingdon Valley, Pa., expressed substantial doubt about TelVue's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has suffered recurring losses from operations and has a net accumulated deficit. THIRD STREET: Involuntary Chapter 11 Case Summary ------------------------------------------------- Alleged Debtor: Third Street Treatment Partners LLC aka Walking Miracles Los Angeles Walking Miracles Malibu Walking Miacles Treatment Center Walking Miracles Recovery Centers WMLA Walking Miracles Foundations Inc 4067 West Third Street Los Angeles, CA 90020 Bankruptcy Case No.: 11-62083 Involuntary Chapter 11 Petition Date: December 23, 2011 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Sheri Bluebond Petitioners' Counsel: Dean G. Rallis Jr., Esq. SULMEYERKUPETZ 333 S. Hope Street, 35th Floor Los Angeles, CA 90071 Tel: (213) 626-2311 Fax: (213) 629-4520 E-mail: drallis@sulmeyerlaw.com Creditors who signed the Chapter 11 petition: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Lee McCormack Unpaid Compensation $50,500 29500 Heathercliff Road, Unit 26 Malibu, CA 90265 Executive Treatment Corporation Unpaid Professional $40,000 23803 Harbor Vista Drive Fees Malibu, CA 90262 Jason Giles Unpaid Wages $40,000 23803 Harbor Vista Drive Malibu, CA 90265 Thomas Hedlund Unpaid Wages $4,800 10282 Old Redwood Highway Penngrove, CA 94951 Jerald Sallsbury Unpaid Wages $4,000 2338 Watermarke Place Irvine, CA 92612 Carolyn Rae Cole Unpaid Compensation $1,500 8919 Wonderland Park Avenue Los Angeles, CA 90046 TOWNSHIP OF WEEHAWKEN: Moody's Raises $5MM Bond Rating from 'Ba1' ----------------------------------------------------------------- Moody's Investors Service has upgraded the Township of Weehawken's general obligation bond rating to Baa3 from Ba1, affecting $5.04 million of Moody's rated general obligation debt. Rating Rationale The upgrade to Baa3 from Ba1 reflects the township's structurally improved financial operations, reduced reliance on tax anticipation notes for cash flow, improved liquidity, continued tax base growth and a change in managerial philosophy with demonstrated commitment toward gaining additional financial flexibility. The Baa3 rating also factors in heavy tax base concentration from Hartz Mountain Corporation and an above-average debt burden of 2.2% of equalized values. What Could Move the Rating Up: - Augmentation of Current Fund cash and reserve levels - Reduced reliance on tax anticipation notes - Tax base growth - Surplus in annual financial operations What Could Move the Rating Down: - Increase in tax appeals or delinquent taxes, particularly in relation to Hartz companies - Aggressive budgeting practices - Unfavorable financial operations resulting in emergency authorizations or deferred charges - Increased reliance on tax anticipation notes The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. TRUMPET PROPERTIES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Trumpet Properties, Inc dba Econo Lodge 2200 Northlake Parkway, Suite 277 Tucker, GA 30084 Bankruptcy Case No.: 11-35652 Chapter 11 Petition Date: December 21, 2011 Court: U.S. Bankruptcy Court Eastern District of Tennessee (Knoxville) Judge: Richard Stair, Jr. Debtor's Counsel: Jesse D. Overbay, Esq. HAGOOD, TARPY & COX PLLC 2100 Riverview Tower, Suite 2100 900 S. Gay Street Knoxville, TN 37902 Tel: (865) 525-7313 E-mail: joverbay@htandc.com - and ? Thomas Lynn Tarpy, Esq. HAGOOD, TARPY & COX PLLC Riverview Tower, Suite 2100 900 South Gay Street Knoxville, TN 37902-1537 Tel: (865) 525-7313 E-mail: ltarpy@htandc.com Scheduled Assets: $2,558,229 Scheduled Liabilities: $2,540,180 The Company's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/tneb11-35652.pdf The petition was signed by Melton Harrell, president. VITRO SAB: Appeals Court Temporarily Stops Mexican Plan ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the victory that Mexican glassmaker Vitro SAB won over bondholders in U.S. District Court on Dec. 28 was temporarily put on hold Dec. 29 by the U.S. Court of Appeals in New Orleans. The appeals court's decision means that Vitro's nonbankrupt subsidiaries shouldn't take action to help Vitro win approval of its bankruptcy reorganization plan in a court in Mexico. According to the report, three judges on the Fifth Circuit in New Orleans temporarily halted implementation of the lower courts' decisions "to give the court more time to consider the motion for a stay more carefully." The appeals court didn't say when it might rule again or whether it would summon the parties to New Orleans for oral argument. About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global glass producer, serving the construction and automotive glass markets and glass containers needs of the food, beverage, wine, liquor, cosmetics and pharmaceutical industries. Vitro is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009, and sought to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. Concurso Mercantil & Chapter 15 Proceedings Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, commencing its voluntary concurso mercantil proceedings -- the Mexican equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on Dec. 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. The judge said Vitro couldn't push through a plan to buy back or swap US$1.2 billion in debt from bondholders based on the vote of US$1.9 billion of intercompany debt when third-party creditors were opposed. Vitro as a result dismissed the first Chapter 15 petition following the ruling by the Mexican court. On April 12, 2011, an appellate court in Mexico reinstated the reorganization. Accordingly, Vitro SAB on April 14 re-filed a petition for recognition of its Mexican reorganization in U.S. Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11- 11754). The Vitro parent told the Mexico stock exchange that it received sufficient acceptances of its reorganization pending in a court in Monterrey. The approval vote was evidently obtained using claims of affiliates. The bondholders are opposing the Mexican reorganization plan because shareholders could retain ownership while bondholders aren't being paid in full. Bondholders previously cited an "independent analyst" who estimated the Mexican plan was worth 49% to 54% of creditors' claims. In the present Chapter 15 case, the Debtor seeks to block any creditor suits in the U.S. pending the reorganization in Mexico. Chapter 11 Proceedings A group of noteholders opposed the exchange -- namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P. Together, they held US$75 million, or approximately 6% of the outstanding bond debt. The Noteholder group commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders, known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. The U.S. affiliates subject to the involuntary petitions are Vitro Chemicals, Fibers & Mining, LLC (Bankr. N.D. Tex. Case No.10- 47472); Vitro America, LLC (Bankr. N.D. Tex. Case No. 10-47473); Troper Services, Inc. (Bankr. N.D. Tex. Case No. 10-47474); Super Sky Products, Inc. (Bankr. N.D. Tex. Case No. 10-47475); Super Sky International, Inc. (Bankr. N.D. Tex. Case No. 10-47476); VVP Holdings, LLC (Bankr. N.D. Tex. Case No. 0-47477); Amsilco Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47478); B.B.O. Holdings, Inc. (Bankr. N.D. Tex. Case No. 10-47479); Binswanger Glass Company (Bankr. N.D. Tex. Case No. 10-47480); Crisa Corporation (Bankr. N.D. Tex. Case No. 10-47481); VVP Finance Corporation (Bankr. N.D. Tex. Case No. 10-47482); VVP Auto Glass, Inc. (Bankr. N.D. Tex. Case No. 10-47483); V-MX Holdings, LLC (Bankr. N.D. Tex. Case No. 10-47484); and Vitro Packaging, LLC (Bankr. N.D. Tex. Case No. 10-47485). A bankruptcy judge in Fort Worth, Texas, denied involuntary Chapter 11 petitions filed against four U.S. subsidiaries. On April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro America LLC and three other U.S. subsidiaries -- that were subject to the involuntary petitions into voluntary Chapter 11. The Texas Court on April 21 denied involuntary petitions against the eight U.S. subsidiaries that didn't consent to being in Chapter 11. Kurtzman Carson Consultants is the claims and notice agent to Vitro America, et al. Alvarez & Marsal North America LLC, is the Debtors' operations and financial advisor. The official committee of unsecured creditors appointed in the Chapter 11 cases of Vitro America, et al., has selected Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, as counsel. Blackstone Advisory Partners L.P. serves as financial advisor to the Committee. The U.S. Vitro companies sold their assets to American Glass Enterprises LLC, an affiliate of Sun Capital Partners Inc., for US$55 million. WASHINGTON MUTUAL: Given Nod for $50-Mil. Settlement with U.S. -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Washington Mutual Inc. was given approval from the bankruptcy judge to accept $50 million from the U.S. government in settlement of an $83 million judgment. The report relates that WaMu won the judgment in a lawsuit against the government for breach for contract regarding the capitalization of American Savings Bank FA. WaMu had acquired the savings bank after it had been taken over by regulators during the 1988 savings and loan crisis. 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. WaMu filed a Seventh Amended Plan in December 2011 to carry out a global settlement intended to remove nearly all opposition to the reorganization. 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. WESTMORELAND COAL: Kemmerer Deal No Impact on Moody's Ratings ------------------------------------------------------------- Moody's Investors Service stated that Westmoreland Coal Company's (Westmoreland) acquisition of Kemmerer mine from Chevron Mining Inc. for $179 million plus approximately $14 million in working capital will likely increase leverage but is not expected to impact the company's Caa1 corporate family rating. * 2011 Registered 23% Fewer Chapter 11 Bankruptcies --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, said Dec. 30 that according to BankruptcyData.com there were 23% fewer bankruptcies among large companies in 2011 than in 2010. In terms of assets, this year's major corporate bankruptcies exceed last year's by 17%. BankruptcyData said that with a few days left in the year, 82 publicly held companies filed for bankruptcy protection in the U.S., compared with 106 last year. In term of assets, there were more this year, with $104.2 billion, than last year's $89.1 billion. The year 2011 was also trailing 2010 in assets until broker MF Global Inc. and its parent filed in Chapter 11, followed by American Airlines Inc. and its parent AMR Corp. The two bankruptcies put 2011 over the top by listing assets of $41 billion and $25 billion, respectively. Including five subsidiaries of Dynegy Inc. that filed for reorganization by listing assets of $7.5 billion, the three bankruptcies by themselves were responsible for about 70% of the debt of all public companies inducted into Chapter 11 in 2011. Mr. Rochelle notes that the trend in major corporate bankruptcies is consistent with declining defaults. Moody's Investors Service reported earlier this month that the global default rate on junk debt declined to 1.8% in November, compared with 3.5% one year earlier. Moody's is predicting the junk-debt default rate will rise only gradually until reaching 2.4% in November 2012. * BOND PRICING -- For Week From Dec. 12 - 16, 2011 -------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- AMBAC INC 9.38 8/1/2011 10.50 AMBAC INC 9.50 2/15/2021 12.85 AMBAC INC 7.50 5/1/2023 10.00 AMBAC INC 5.95 12/5/2035 10.50 AMBAC INC 6.15 2/7/2087 0.50 AHERN RENTALS 9.25 8/15/2013 20.50 AMR CORP 9.00 8/1/2012 22.00 AM AIRLN PT TRST 10.18 1/2/2013 60.25 AM AIRLN PT TRST 9.73 9/29/2014 23.75 AMR CORP 6.25 10/15/2014 23.50 AMR CORP 9.00 9/15/2016 21.71 AM AIRLN PT TRST 7.38 5/23/2019 16.50 AMR CORP 10.20 3/15/2020 22.00 AMR CORP 10.15 5/15/2020 18.00 AMR CORP 9.88 6/15/2020 21.00 AMR CORP 10.29 3/8/2021 21.00 AMR CORP 10.55 3/12/2021 23.50 AMR CORP 10.00 4/15/2021 21.00 AMR CORP 9.75 8/15/2021 20.00 AMR CORP 9.80 10/1/2021 23.50 AMERICAN ORIENT 5.00 7/15/2015 49.74 AQUILEX HOLDINGS 11.13 12/15/2016 40.00 BANK NEW ENGLAND 9.88 9/15/1999 14.00 BROADVIEW NETWRK 11.38 9/1/2012 87.00 CAPMARK FINL GRP 5.88 5/10/2012 50.50 CIRCUS & ELDORAD 10.13 3/1/2012 71.00 DIRECTBUY HLDG 12.00 2/1/2017 29.25 DIRECTBUY HLDG 12.00 2/1/2017 29.00 DELTA PETROLEUM 3.75 5/1/2037 70.00 DUNE ENERGY INC 10.50 6/1/2012 90.25 DYNEGY HLDGS INC 8.75 2/15/2012 63.50 EASTMAN KODAK CO 7.25 11/15/2013 39.75 ENERGY CONVERS 3.00 6/15/2013 42.00 EVERGREEN SOLAR 13.00 4/15/2015 53.00 FAIRPOINT COMMUN 13.13 4/2/2018 4.95 FIBERTOWER CORP 9.00 11/15/2012 8.69 GREAT ATLA & PAC 5.13 6/15/2011 1.55 GREAT ATLANTIC 9.13 12/15/2011 1.00 GMX RESOURCES 5.00 2/1/2013 65.05 GMX RESOURCES 5.00 2/1/2013 64.47 GLOBALSTAR INC 5.75 4/1/2028 38.50 HAWKER BEECHCRAF 8.50 4/1/2015 20.14 HAWKER BEECHCRAF 9.75 4/1/2017 8.00 KELLWOOD CO 7.63 10/15/2017 20.00 QUICKSILVER RES 1.88 11/1/2024 99.40 LEHMAN BROS HLDG 0.25 6/29/2012 23.00 LEHMAN BROS HLDG 6.00 7/19/2012 25.05 LEHMAN BROS HLDG 5.00 1/22/2013 23.25 LEHMAN BROS HLDG 5.63 1/24/2013 25.88 LEHMAN BROS HLDG 5.10 1/28/2013 24.76 LEHMAN BROS HLDG 5.00 2/11/2013 24.25 LEHMAN BROS HLDG 4.80 2/27/2013 23.50 LEHMAN BROS HLDG 4.70 3/6/2013 25.00 LEHMAN BROS HLDG 5.00 3/27/2013 23.50 LEHMAN BROS HLDG 5.75 5/17/2013 23.60 LEHMAN BROS HLDG 4.80 3/13/2014 25.00 LEHMAN BROS HLDG 5.00 8/3/2014 23.51 LEHMAN BROS HLDG 6.20 9/26/2014 25.00 LEHMAN BROS HLDG 5.15 2/4/2015 24.30 LEHMAN BROS HLDG 5.25 2/11/2015 23.13 LEHMAN BROS HLDG 8.80 3/1/2015 24.50 LEHMAN BROS HLDG 7.00 6/26/2015 23.63 LEHMAN BROS HLDG 8.50 8/1/2015 25.50 LEHMAN BROS HLDG 5.00 8/5/2015 23.26 LEHMAN BROS HLDG 7.00 12/18/2015 23.50 LEHMAN BROS HLDG 5.50 4/4/2016 25.00 LEHMAN BROS HLDG 8.92 2/16/2017 24.38 LEHMAN BROS HLDG 6.00 2/12/2018 23.50 LEHMAN BROS HLDG 8.05 1/15/2019 21.00 LEHMAN BROS HLDG 11.00 6/22/2022 25.00 LEHMAN BROS HLDG 11.00 8/29/2022 20.00 LEHMAN BROS HLDG 11.50 9/26/2022 23.50 LEHMAN BROS HLDG 9.00 12/28/2022 21.75 LEHMAN BROS HLDG 9.50 12/28/2022 25.00 LEHMAN BROS HLDG 9.50 1/30/2023 23.50 LEHMAN BROS HLDG 9.50 2/27/2023 24.18 LEHMAN BROS HLDG 10.00 3/13/2023 25.25 LEHMAN BROS HLDG 10.38 5/24/2024 24.05 LEHMAN BROS HLDG 11.00 3/17/2028 25.25 LOCAL INSIGHT 11.00 12/1/2017 99.98 MF GLOBAL HLDGS 1.88 2/1/2016 31.00 MF GLOBAL HLDGS 6.25 8/8/2016 31.00 MF GLOBAL LTD 9.00 6/20/2038 31.50 MANNKIND CORP 3.75 12/15/2013 53.00 PMI GROUP INC 6.00 9/15/2016 20.38 PENSON WORLDWIDE 8.00 6/1/2014 40.90 POWERWAVE TECH 3.88 10/1/2027 44.50 POWERWAVE TECH 3.88 10/1/2027 43.96 RADIAN GROUP 5.63 2/15/2013 67.00 REAL MEX RESTAUR 14.00 1/1/2013 58.75 RESIDENTIAL CAP 8.50 6/1/2012 87.75 RESIDENTIAL CAP 8.50 4/17/2013 65.00 THORNBURG MTG 8.00 5/15/2013 9.75 THQ INC 5.00 8/15/2014 42.00 TOUSA INC 9.00 7/1/2010 13.00 TRAVELPORT LLC 11.88 9/1/2016 31.40 TRAVELPORT LLC 11.88 9/1/2016 28.75 TIMES MIRROR CO 7.25 3/1/2013 30.00 TRIBUNE CO 5.25 8/15/2015 34.00 MOHEGAN TRIBAL 8.00 4/1/2012 65.00 MOHEGAN TRIBAL 6.13 2/15/2013 67.00 MOHEGAN TRIBAL 7.13 8/15/2014 38.40 MOHEGAN TRIBAL 7.13 8/15/2014 46.38 TRICO MARINE SER 8.13 2/1/2013 3.30 TRICO MARINE 3.00 1/15/2027 1.00 TEXAS COMP/TCEH 10.25 11/1/2015 35.25 TEXAS COMP/TCEH 10.25 11/1/2015 36.00 TEXAS COMP/TCEH 10.25 11/1/2015 33.15 WIN-CALL12/11 8.63 8/1/2016 104.50 WILLIAM LYONS 7.63 12/15/2012 27.50 WILLIAM LYON INC 10.75 4/1/2013 27.00 WILLIAM LYON INC 7.50 2/15/2014 27.00 WESTERN EXPRESS 12.50 4/15/2015 39.00 ********* 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 2012. 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 ***