/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120116.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 16, 2012, Vol. 16, No. 13 Headlines 1225 MCBRIDE AVENUE: Status Conference Set for Feb. 14 1225 MCBRIDE AVENUE: Schedules Filing Deadline Moved to Feb. 5 17315 COLLINS: Case Summary & 20 Largest Unsecured Creditors 216 WEST 18: Use of Mortgage Lender's Cash Collateral Approved 3900 BISCAYNE: Keeps Control of Case Amid BB&T Dispute 4KIDS ENTERTAINMENT: Seeks More Time to Introduce Exit Proposal AAR CORP: S&P Assigns 'BB' Rating to $175-Mil. Sr. Unsec. Notes ADAK FISHERIES: Court Rules on Objection to City's Claims AIDA'S PARADISE: Case Summary & 9 Largest Unsecured Creditors ALEXANDER GALLO: Committee Hires CBIZ MHM as Financial Advisor ALION SCIENCE: Moody's Affirms 'Caa1' Corporate; Outlook Negative ALTAIR NANOTECHNOLOGIES: Receives Notice of Bid Price Deficiency AMERICAN AIRLINES: USAir Taps Millstein, Barclays for Advice AMERICAN AIRLINES: American Eagle Goes All-Jet From DFW AMERICAN APPAREL: SEC Completes Investigation, Takes No Action AMERICAN AXLE: Expects up to $2.9 Billion Sales in 2012 AMERICAN COMMERCE: Incurs $35,000 Net Loss in Nov. 30 Quarter AMERICAN LASER: U.S. Trustee Forms 3-Member Creditors Committee AMERICAN LASER: Court OKs Landis Rath & Cobb as Counsel AMERIGROUP CORP: Moody's Rates Senior Notes 'Ba3', Outlook Stable ANTHONY TRUJILLO: E.D.N.Y. Court Rejects Bid to Dismiss Lawsuit AR BROADCASTING: Court Enters Final Order on Cash Collateral Use AS SEEN ON TV: Amends 10.2 Million Common Shares Offering B&F MARINE: Successfully Emerged From Bankruptcy BLOCK COMMUNICATIONS: Moody's Rates $250MM New Debt at 'Ba3' CASELLA WASTE: S&P Affirms 'B+' Corporate Credit Rating CASH STORE: Moody's Assigns 'B3' Rating to C$125MM Notes Offering CATALYST PAPER: Bonds Gain Ahead of Grace-Period Expiration CATHOLIC CHURCH: Delaware Abuse Victims Settle for $7 Million CATHOLIC CHURCH: Wilm. Case Advisors File Final Fee Applications CATHOLIC CHURCH: Milw. Plan Filing Exclusivity Expires June 4 CATHOLIC CHURCH: Milw. Has Until Jan. 29 to Decide on Leases CENTRAL FALLS: Teachers Plan to Challenge Bondholder Law CENTURION PROPERTIES: Plan Confirmed; Battelle Valued at $75MM CHARTER COMMS: S&P Assigns 'BB-' Rating to $750MM Senior Notes CLARE AT WATER: Unsecured Creditors Retain FTI Consulting CLARE AT WATER: Unsecured Creditors Retain SNR Denton as Counsel CLARE OAKS: Employs A&M's Paul Rundell as CRO CLARE OAKS: Committee Seeks to Employ Neal Wolf as Counsel COATES INTERNATIONAL: Board Approves New Anti-Dilution Plan CCS CORP: S&P Affirms 'B' Long-Term Corporate Credit Rating CROWN CASTLE: Moody's Says Land Purchase Doesn't Affect 'Ba2' CFR CUI GLOBAL: Conveys WayCool and WayFast to Olantra for $500,000 DELTA PETROLEUM: Taps Davis Graham as Special Corporate Counsel DELTA PETROLEUM: Section 341(a) Meeting of Creditors Tomorrow DJSP ENTERPRISES: Kerry Propper Discloses 9.7% Equity Stake EASTMAN KODAK: Hogan Lovells Advising UK Pension Trustees EASTMAN KODAK: Sues Fujifilm for Patent Infringement ENEA SQUARE: Can Use NUCP Cash Collateral to Pay Taxes ENTELOS INC: Clearlake Capital Acquires Controlling Stake EXTENDED STAY: Asks to Deny Plea to Dismiss Blackstone Suits EXTENDED STAY: Litigation Trustee Opposes Mezzanine Agreement FNB UNITED: Amends 10.4 Million Common Shares Offering GATEWAY METRO: Can Access Cash Collateral Until Jan. 27 GIORDANO'S ENTERPRISES: Expansion of F&P Services Approved GRAY TELEVISION: R. Beizer to Retire as VP for Law & Development GREAT PLAINS: Case Summary & 20 Largest Unsecured Creditors HATHOR EXPLORATION: Confirms Notices of Compulsory Acquisition HOSTESS BRANDS: Receives Court Approval of First Day Motions HOSTESS BRANDS: Union Woes Claim "Offensive", Says BCTGM INNER CITY: Gets OK to Auction Assets With Lead Bid From Lenders INTEGRATED BIOPHARMA: Imperium Forbearance Extended to Jan. 20 INTERNATIONAL MEDIA: Seeks to Hire Epiq as Claims Agent INTERNATIONAL MEDIA: Taps Landis Rath as Bankruptcy Counsel JAZARCO INTERNATIONAL: Sec. 341 Creditors' Meeting Set for Feb. 7 JCK HOTELS: Can Hire Sook Hyun as Exclusive Financial Advisor LACK'S STORES: Has Until March 1 to Solicit Plan Acceptances LEGENDS GAMING: Moody's Cuts Corp. Family Rating to 'Ca' LEHMAN BROTHERS: Settles Lawsuit Against Nomura International LEHMAN BROTHERS: Wins Nod to Create No Fund to Pay D&O Defenses LEHMAN BROTHERS: Ironbridge Homes Seeks Lift Stay LEHMAN BROTHERS: Wins Nod to Tap Gleacher as Fin'l Advisor LEHMAN BROTHERS: Agrees to $5-Bil. Reserve for Fannie Mae Claim LEHMAN BROTHERS: LBI Trustee OKs Malachite 2006-1 Trust Close-Out LEHMAN BROTHERS: Court Approves Dismissal of Suit vs. RBS LEVEL 3 COMMS: S&P Keeps 'CCC' Rating on 8.625% Senior Notes LUBBOCK HOUSING: Moody's Affirms 'Ba2' Rating on Refunding Bonds MARKETING WORLDWIDE: Angus Gillis Discloses 7.6% Equity Stake MESA AIR: Enters Into Settlement With Daimler, et al. MESA AIR: Wells Fargo Applies for Administrative Expense Payment MGM RESORTS: Proposes to Offer $500 Million Senior Notes MGM RESORTS: Prices $850 Million in Senior Notes MGM RESORTS: Fitch Rates $500-Mil. Sr. Unsecured Notes at 'B-' MGM RESORTS: S&P Assigns 'B-' Rating to $500-Mil. Senior Notes MUSCLEPHARM CORP: Inter-Mountain Discloses 9.9% Equity Stake NAVISTAR INT'L: Fitch Affirms 'BB'; Outlook Stable NCOAT INC: Fine-Tunes Proposed Plan Documents NEWPAGE CORP: Files Schedules of Assets and Liabilities NEWPAGE CORP: Court OKs Deloitte as Tax Services Provider NEWPAGE CORP: Committee Can Hire Moelis as Investment Banker NORGATE METAL: Hearing on Chapter 15 Petition Set for Feb. 2 NORTHAMPTON GENERATING: Creditors Meeting Continued until Feb. 8 NORTHERN BERKSHIRE: Files Modified Second Amended Plan and DS OVERLAND STORAGE: Expects $15 Million Revenue for Q2 Fiscal 2012 PARMALAT SPA: Italian Court Adds 9 Years to C. Tanzi's Sentence PARMALAT SPA: Italian Court Convicts Geronzi and Arpe for Fraud PARMALAT SPA: NJ Court Rejects Claim Against Citigroup PROVISION HOLDING: Incurs $665,000 Net Loss in March 31 Quarter PURE BEAUTY: Wants Until May 1 to Propose Chapter 11 Plan PURE BEAUTY: Wants Lease Decision Period Extended Until May 1 RESORTS DEVELOPMENT: Voluntary Chapter 11 Case Summary ROBB & STUCKY: Settlement and Release Deal with BofA Gets Final OK SEARS HOLDINGS: Suffers Setback as Large Lender Balks SINO-FOREST CORP: Noteholders Waive Default Under Senior Notes SOUTH GATE: S&P Lowers Rating on Certificates to 'BB+' SUMMIT MATERIALS: Moody's Rates $220MM Sr. Sec. Notes at 'B3' TEAM NATION: Company Name Changed to "Imperial Americas" TMP DIRECTIONAL: Files Schedules of Assets and Liabilities TOWN CENTER: Hearing on Plan Exclusivity Halt Set for Jan. 25 TELIPHONE CORP: George Metrakos Resigns from Board THERMOENERGY CORP: Enters Into Warrants Amendments with Investors THINES LLC: M&T Trust Has Until Today to Challenge Plan Outline TRIBUNE CO: Rival Groups Asked To Set Final Confirmation Date TRIBUNE CO: WTC Appeals Bankr. Court's Denial of Plan TRIBUNE CO: Wins Approval of 57-11 49th Place Settlement TRIBUNE CO: KPMG LLP Has 70% Reduction in Fees TUNICA-BILOXI: Moody's Lowers CFR to 'B3', Outlook Stable UNIVERSAL BIOENERGY: CEO Reports Plans to Hike Share Price WASHINGTON MUTUAL: Moves Forward in Bid to Exit Chapter 11 WORLD SURVEILLANCE: Amends 63.9 Million Common Shares Offering * Personal Bankruptcy Filings Down for First Time in Four Years * 1.9 MM U.S. Properties Receive Foreclosure Filings in 2011 * S&P Downgrades Ratings on Nine Eurozone Sovereigns * S&P Says Speculative-Grade Companies Rise * Moody's Says Challenges to U.S. Private Label RMBS Will Persist * Moody's Says 2012 Outlook for U.S. ABCP is Negative * Mintz Levin Further Expands West Coast Presence * Siguler Guff Closes First Distressed Real Estate Fund of Funds * BOND PRICING -- For Week From Jan. 9 to 13, 2012 ********* 1225 MCBRIDE AVENUE: Status Conference Set for Feb. 14 ------------------------------------------------------ The Bankruptcy Court has set a Status Conference in the Chapter 11 case of 1225 McBride Avenue LLC on Feb. 14, 2012, at 10:00 a.m. at MS-Courtroom 3A, in Newark, New Jersey. Woodland Park, New Jersey-based 1225 McBride Avenue LLC filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 12-10258) Jan. 5, 2012. Judge Morris Stern presides over the case. The Debtor is represented by Charles A. Stanziale, Jr., Esq., and Scott H. Bernstein, Esq., at McCarter & English LLP, serve as the Debtor's counsel. The Debtor's exclusive right to file a bankruptcy plan expires May 4, 2012. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. 1225 MCBRIDE AVENUE: Schedules Filing Deadline Moved to Feb. 5 -------------------------------------------------------------- 1225 McBride Avenue LLC won Court extension until Feb. 5 of the deadline to file its missing schedules of assets and liabilities and statement of financial affairs. The Schedules and Statement were originally due Jan. 19. Woodland Park, New Jersey-based 1225 McBride Avenue LLC filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 12-10258) Jan. 5, 2012. Judge Morris Stern presides over the case. The Debtor is represented by Charles A. Stanziale, Jr., Esq., and Scott H. Bernstein, Esq., at McCarter & English LLP, serve as the Debtor's counsel. The Debtor's exclusive right to file a bankruptcy plan expires May 4, 2012. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. 17315 COLLINS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: 17315 Collins Avenue, LLC dba Sole on the Ocean dba Alba Mare 17315 Collins Ave Sunny Isles Beach, FL 33160 Bankruptcy Case No.: 12-10631 Chapter 11 Petition Date: January 10, 2012 Court: United States Bankruptcy Court Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: Joshua W. Dobin, Esq. Michael S. Budwick, Esq. MELAND RUSSIN & BUDWICK, P.A. 200 S Biscayne Blvd. #3000 Miami, FL 33131 Tel: (305) 358-6363 Fax: (305) 358-1221 E-mail: jdobin@melandrussin.com mbudwick@melandrussin.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Thomas L. Feeley, manager of WaveStone Properties, LLC, managing member. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Short Acres, LLC final judgment $1,509,899 Harvard Business Services, Inc. its Registered Agent 16192 Coastal Hwy Lewes, DE 19958 Sole Miami loan for Robert $500,000 Partners, LLC Gallery Steven Zelkowitz 1221 Brickell Ave, Ste 1600 Miami, FL 33131 Robert Trusz final judgment $129,580 Law Office of Alexis Gonzalez, PA 9755 SW 40 Terr Miami, FL 33165 Kenco Hospitality, Inc. final judgment $86,770 Victor Todaro final default $86,640 judgment Hotwire Comm. LLC utility $84,199 Cannon Financial judgment $43,419 Services, Inc. Florida Power & Light utility services $42,634 General Mail Facility Reisberg Law Atty. for buyer $38,891 litigation Park One of Florida, executory contract $35,013 LLC Indigo Services $26,603 Spot Master $20,479 City of North Miami utility services $17,460 Beach Peoples Gas System Teco utility $17,267 ThyssenKrupp Elevator executory contract $15,809 Corp. T-Y Group $15,109 Lewis Johs Avallone services $13,170 Aviles, LLP Marksman Security contingent $12,281 Corp. Miami-Dade County Tax 2010 real estate $11,048 Collector property taxes Miami-Dade County Tax 2010 real estate $10,158 Collector property taxes 216 WEST 18: Use of Mortgage Lender's Cash Collateral Approved -------------------------------------------------------------- On Dec. 29, 2011, U.S. Bankruptcy Judge Stuart M. Bernstein entered a final order authorizing 216 Owner LLC, 216 West Mezz LLC, and 216 West 18 Holder LLC to use cash collateral of 216 W 18 Lender LLC, the mortgage lender, on the terms set forth in the interim order dated Nov. 7, 2011. As reported in the TCR on Nov. 30, 2011, the Debtors intend to use cash collateral for the general purpose of operating their mortgaged property through confirmation of their proposed plan of liquidation, pursuant to a budget. On Nov. 7, 2011, the Court granted the Debtors interim authority to use Cash Collateral through the earlier of Jan. 31, 2012, or upon an event of termination, which include failure by the Debtors to obtain entry of a confirmation order for their chapter 11 plan by Dec. 15, 2011. The Court's interim order also directed a receiver to immediately turn over all property of the Debtors, including all cash collateral, to the Chief Restructuring Officer. Prior to the Petition Date, the Debtors engaged Steven A. Carlson as the CRO to oversee all aspects of the Debtors' business and operations. Prior to the Petition Date, Andrew L. Herz was appointed as temporary receiver for the Mortgaged Property in a foreclosure action pending as Index No. 650622/2009 E in the Supreme Court of the State of New York, County of New York. Judge Bernstein said the CRO will have the authority to delegate to the Receiver the power to perform services with respect to the Mortgaged Property in substantially the same manner as the Receiver did prepetition, to the extent and as directed by the CRO. The mortgage lender, an affiliate of Fishman Holdings North America Inc., purchased the Mortgage Loan from Bank of America N.A. As of Nov. 1, 2011, the total amount outstanding under the Mortgage Loans aggregate $74,342,445. The mortgage lender also purchased a mezzanine loan from BofA. The bank, in turn, acquired the Mezz Loan from Torchlight Debt Opportunity Fund II Mezzanine Sub LLC, f/k/a ING Clarion Debt Opportunity Fund II Mezzanine Sub LLC. As of Sept. 14, 2011, the total amount outstanding under the Mezz Loan aggregate $24.6 million. About 216 West 18 216 West 18 Owner LLC, 216 West 18 Mezz LLC and 216 West 18 Holder LLC own a parcel of improved real estate at 218 West 18th Street in New York. 216 West 18 Owner is wholly owned by 216 West 18 Mezz. Mezz is wholly owned by 216 West 18 Holder LLC. Holder is owned 94.2% by HAJ 18 LLC and 5.8% by JK 18 LLC. HAJ 18, wholly owned by Harry Jeremias, is the managing member of Holder. The 216 West 18 entities do not have any employees. The 216 West 18 entities, through their restructuring officer, Steven A. Carlson, filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case Nos. 11-15110 to 11-15112) on Nov. 1, 2011. In its petition, 216 West 18 Owner estimated $50 million to $100 million in both assets and debts. The Debtors filed for bankruptcy to implement a prepackaged plan of liquidation originally proposed by Atlas Capital Group LLC. The Plan provides for the transfer of the Mortgaged Property to their mortgage lender. Atlas is represented by Greenberg Traurig LLP. HAJ 18 LLC is represented by Herrick Feinstein LLP. The mortgage lender, 216 West 18 Lender, an affiliate of Fishman Holdings North America, is represented by Alston & Bird LLP. 3900 BISCAYNE: Keeps Control of Case Amid BB&T Dispute ------------------------------------------------------ Judge A. Jay Cristol extended 3900 Biscayne, LLC's exclusive right to solicit acceptances of its Plan of Reorganization, as may be amended, for cause up to and through the conclusion and completion of the confirmation hearing, which has yet to be scheduled by the Bankruptcy Court. The Nov. 30, 2011 edition of The Troubled Company Reporter noted that the Debtor will work on resolving concerns or objections to the Plan. A hearing to consider approval of the Disclosure Statement explaining the Plan was held on Aug. 9, 2011, after which the Bankruptcy Court entered an Order (i) directing the Debtor to file an adversary proceeding by virtue of an agreement among the Debtor, creditor Branch Banking and Trust Company, and the U.S. Trustee Adversary, and (ii) ordering that the hearing to consider the approval of the Disclosure Statement is continued and will be rescheduled to a date after the adjudication of the Adversary Proceeding. The Adversary Proceeding was filed on Sept. 20, 2011, seeking to determine validity, extent and priority of liens of creditor Branch Banking and Trust Company. The Debtor has and will continue to try and expedite the Adversary Proceeding. BB&T, which asserts a secured claim arising out of a note in the principal amount of $10,800,000, has filed a complaint seeking foreclosure of the mortgage on the Debtor's property and monetary damages against the Debtor. BB&T, which claims that the Debtor has defaulted on the note, is also opposing confirmation of the Plan. The Plan proposed by the Debtor provides that once the amount of BB&T's allowed secured claim has been determined, BB&T will be paid in full, including note rate interest, with a 25-year amortization and a 4-year balloon. To the extent that the Debtor's rental income and the proceeds from the "third party litigation claims" are insufficient to pay BB&T's claim, the deficiency will be treated as an unsecured claim. The Plan says that holders of allowed general unsecured claims will be paid in full within 4 years from the Effective Date. Holders of equity interests will retain their interests. About 3900 Biscayne, LLC 3900 Biscayne, LLC, is a Florida limited liability company which owns real property located at 3900 Biscayne, in Miami, currently leased to Miami Arts, Inc., a tuition-free public charter school offering college-preparatory academic curriculum and conservatory- style training in the visual and performing arts. The Company filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 11-22948) on May 12, 2011, in Miami, Florida. Judge A. Jay Cristol presides over the case. The Debtor disclosed $14,857,484 in total assets and $13,691,533 in total liabilities as of the Chapter 11 filing. James C. Moon, Esq., and Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, represent the Debtor in its Chapter 11 effort. Branch Banking & Trust Company is represented by attorneys at Liebler, Gonzalez & Portuondo, P.A., in Miami, Florida. 4KIDS ENTERTAINMENT: Seeks More Time to Introduce Exit Proposal --------------------------------------------------------------- Dow Jones' DBR Small Cap reports that 4Kids Entertainment Inc. says it needs more time to engineer a bankruptcy-exit plan in the wake of a court decision that pushed a dispute over Yu-Gi-Oh! trading cards, one of its big revenue makers, in its favor. As reported in the Troubled Company Reporter on Jan. 11, 2012, the second phase of the trial in a contract dispute over the Yu-Gi-Oh! Series to determine the damages payable to 4Kids Entertainment arising from the purported termination of the show's licensing agreement has not been scheduled but is expected to start as early as first quarter of 2012. The U.S. Bankruptcy Court ruled in favor of 4Kids in the first phase of the trial, deciding that the Yu-Gi-Oh! property license agreement between the two was not effectively terminated prior to the bankruptcy filing. 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 bankruptcy protection under Chapter 11 of the Bankruptcy Code 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 and affiliates filed Chapter 11 petitions (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 consi8ts 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., and Mason Barney, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky LLP, in New York. AAR CORP: S&P Assigns 'BB' Rating to $175-Mil. Sr. Unsec. Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' issue rating to U.S.-based aerospace supplier AAR Corp.'s proposed issuance of $175 million of senior unsecured notes due 2022. "We also assigned the notes a '4' recovery rating, indicating our expectation that noteholders would receive average (30%-50%) recovery in a payment default scenario," S&P said. "At the same time, we lowered our issue ratings on the company's existing convertible notes to 'B+' from 'BB-' and revised the recovery rating to '6' (indicating negligible recovery expectations) from '5'. The downgrade is due to the fact that the convertible notes do not have subsidiary guarantees, so they are structurally subordinated to the new notes and the existing unsecured credit facility, which do," S&P said. "The company plans to use the net proceeds from the offering to repay a portion of its revolving credit facility borrowings, which it incurred to fund the $280 million acquisition of Telair International GmbH and Nordisk Aviation Products AS on Dec. 1, 2011. When the company announced the then-pending acquisition, we stated that we believed credit protection measures would remain in line with the rating, although we expected some modest deterioration due to the acquisition, with pro forma debt to EBITDA increasing to about 3.5x from 2.9x for the 12 months ended Nov. 30, 2011. We also stated at that time that we expect credit ratios to fully recover by the end of fiscal 2013 (ending May 31, 2013)," S&P said. "Our ratings on AAR reflect the risks associated with its commercial market, the highly cyclical airline industry. The industry has higher financing requirements to support growth initiatives, including potential additional acquisitions, and competition limits profitability. AAR's established business position, diversity from defense operations, and our expectations of an overall appropriate financial profile partially offset these factors," S&P said. Ratings List AAR Corp. Corporate credit rating BB/Stable/-- Ratings Assigned Senior unsecured $175 mil. notes due 2022 BB Recovery rating 4 Ratings Lowered; Recovery Ratings Revised To From Senior unsecured 1.75% convertible notes due 2026 B+ BB- Recovery rating 6 5 1.625% convertible notes due 2014 B+ BB- Recovery rating 6 5 2.25% convertible notes due 2016 B+ BB- Recovery rating 6 5 ADAK FISHERIES: Court Rules on Objection to City's Claims --------------------------------------------------------- Bankruptcy Judge Donald MacDonald IV sustained the objections by Kenneth Battley, the chapter 7 trustee for Adak Fisheries LLC, to Claim Nos. 21 and 114 filed by the City of Adak. The Chapter 7 Trustee argues that Claim No. 21 is a duplicate of Claim No. 114. Judge MacDonald also sustained the Chapter 7 Trustee's objection to the scope of lien asserted by the City in its Claim No. 114. Judge MacDonald agrees with the Chapter 7 Trustee that the City's lien does not encumber funds in the estate that were realized from the Debtor's intangible personal property. However, as to the unsecured balance of the claim, the judge said the portion that represents the principal amount of unpaid sales taxes is allowed as a priority tax claim under 11 U.S.C. Sec. 507(a)(8)(C), and the remainder is allowed as a general unsecured claim. Adak Fisheries was a shore-based fish processor located on Adak Island, a remote island in the Aleutian chain. Adak Fisheries owed sales taxes to the City of Adak when it filed a chapter 11 petition (Bankr. D. Alaska Case No. 09-00623) on Sept. 11, 2009. Attorneys at Christianson & Spraker represent the Debtor in its restructuring effort. In its petition, the Debtor listed assets and debts both ranging from $10 million to $50 million. The City had recorded a Notice of Claim of City Tax Lien in the Aleutian Islands Recording District about five months before the debtor's bankruptcy petition was filed, on April 23, 2009. According to the City's notice, the debtor owed $546,191.50 for unpaid sales taxes for tax periods from April 30, 2006 to April 30, 2009, plus accrued interest and penalties. The notice stated, "This lien is asserted against all real and personal property of [Adak Fisheries LLC]." Both of the City's claims are based on this tax liability. While the case was pending under chapter 11, the Bankruptcy Court approved a sale of the debtor's plant facility on Adak Island, with its associated equipment and assets, for $488,000 cash. The sale was free and clear of the claims, liens and interests of all entities other than the security interests of creditor Independence Bank. The liens attaching to the sale proceeds included those claimed by the City, the State of Alaska, the Internal Revenue Service, Pentech Leasing, and Muir Milach Management, LLC, which claimed a fishermen's lien in the proceeds. After the case converted to a chapter 7 proceeding in February 2010, Muir Milach filed an adversary proceeding against the City and the chapter 7 trustee to determine the priority of its lien in the sale proceeds. The court determined that Muir Milach's fishermen's lien primed the City's tax lien. Muir Milach has now been paid $393,570.73 of the sale proceeds, leaving a balance of $62,319.77. The Chapter 7 trustee believes the City's tax lien encumbers these remaining funds by virtue of the notice of tax lien it recorded in the Aleutian Islands Recording District. Post-conversion, the court also approved a settlement between the chapter 7 trustee and a Korean fish buyer regarding fish sale proceeds. The fish sale proceeds were seized in Korea and then escrowed in Anchorage, prepetition, pending arbitration of a dispute between the debtor and the fish buyer regarding performance of a December 2007 freight contract. The settlement resulted in the estate receiving an additional $127,000. The trustee has also recovered $10,000 from insurance premium refunds. He contends the City's lien does not encumber these assets, on these grounds: 1) the definition of "property" in the City's ordinance does not encompass cash or intangible personal property; 2) the City did not perfect its lien against the debtor's personal property by recording a notice of lien in the Anchorage Recording District; and 3) because the City's lien against the debtor's intangibles was not perfected, it is ineffective as to the trustee, who holds the status of a judicial lien creditor under 11 U.S.C. Sec. 544(a)(1). A copy of Judge MacDonald's Jan. 10, 2012 Memorandum is available at http://is.gd/Ag7lhxfrom Leagle.com. AIDA'S PARADISE: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Aida's Paradise, LLC 2450 Maitland Center Parkway, Suite 300 Maitland, FL 32751 Bankruptcy Case No.: 12-00189 Chapter 11 Petition Date: January 6, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: R. Scott Shuker, Esq. LATHAM SHUKER EDEN & BEAUDINE LLP P.O. Box 3353 Orlando, FL 32802 Tel: (407) 481-5800 Fax: (407) 481-5801 E-mail: bankruptcynotice@lseblaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Dr. Adil R. Elias, manager. Debtor's List of Its Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ronical Int'l Trading -- $30,000 2450 Maitland Center Parkway, Suite 300 Maitland, FL 32751 Scherer Construction & Engineering -- $28,500 Of Central FL 2909 Fairgreen Street Orlando, FL 32803 Evans Engineering -- $15,000 719 Irma Avenue Orlando, FL 32803 Cuhaci Peterson -- $12,500 Carlos P. Moreno -- $7,500 Roy Law Firm -- $5,000 Clement Electric -- $2,500 Jennifer Donuts -- $2,500 S.I Retaurant (I-Drive) LLC Unknown ALEXANDER GALLO: Committee Hires CBIZ MHM as Financial Advisor -------------------------------------------------------------- Alexander Gallo Holdings LLC's Official Committee of Unsecured Creditors sought and obtained permission from the U.S. Bankruptcy Court for the District of New York to retain CBIZ MHM, LLC and CBIZ, Inc., as its financial advisor, nunc pro tunc to Nov. 16, 2011. Esther DuVal, a managing director of CBIZ, attests that the firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About Alexander Gallo Marietta, Georgia-based Alexander Gallo Holdings LLC -- http://www.alexandergalloholdings.com-- is the largest full service, IT-enabled court reporting and litigation support services company in the United States. AGH offers court reporting, litigation support, trial software and other similar services and has the only true national footprint in its market, with roughly 55 offices located throughout the United States, and a preferred provider network which serves as an extension of Alexander Gallo's geographic reach. Founded in 1999 by Alexander J. Gallo, a former court reporter, AGH has made 18 acquisitions since 2003. Mr. Gallo has remained as CEO. AGH, along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-14220) on Sept. 7, 2011. Alexander Gallo will sell the business via 11 U.S.C. Sec. 363 to Bayside Capital Inc., which had acquired $22 million in second- lien debt. The price wasn't disclosed. Alexander Gallo disclosed assets of $208 million and debt totaling $258 million as of June 30, 2011. Liabilities include $47 million on a first-lien revolving credit and term loan where Wells Fargo Bank NA is agent. In addition to the second-lien debt held by Bayside, there is $33 million in junior unsecured subordinated notes owing to Harvest Equity Partners LLC plus another $148 million in junior unsecured subordinated notes owing to insider Gallo Holdings LLC. As reported in the Troubled Company Reporter on Nov. 1, 2011, the Alexander Gallo disclosed $41,981,048 in assets and $259,153,046 in liabilities as of the Chapter 11 filing. Bayside is providing $20 million in financing for the Chapter 11 effort. The new loan will have a first priority lien on unencumbered assets and a lien behind the first-lien debt. Bankruptcy Judge Allan J. Gropper presides over the case. Thomas R. Califano, Esq., Jeremy R. Johnson, Esq., Esq., and Daniel G. Egan, Esq., at DLA Piper LLP (US), in New York, serve as the Debtors' general counsel. Squire, Sanders & Demsey (US) LLP serves as the Debtor's corporate counsel. The Debtors' financial advisor is Gordian Group, LLC. Marc L. Pfefferle, a partner at Carl Marks Advisory Group LLC, serves as the Debtors' chief restructuring advisor. Kurtzman Carson Consultants LLC serves as the Debtor's claims agent. KPMG LLP serves as their auditors to provide auditing, tax compliance and tax consulting services. As reported in the TCR on Dec. 8, 2011, an affiliate of Bayside Capital, Inc., completed the acquisition of the assets of Alexander Gallo Holdings, LLC. ALION SCIENCE: Moody's Affirms 'Caa1' Corporate; Outlook Negative ----------------------------------------------------------------- Moody's Investors Service revised the rating outlook of Alion Science and Technology Corporation to negative from stable. Concurrently, Moody's affirmed all the company's ratings including the Caa1 corporate family and probability of default ratings. The speculative grade liquidity ("SGL") rating is unchanged at SGL-3. The following ratings were affirmed (with updated LGD assessments): Corporate Family Rating, at Caa1 Probability of Default Rating, at Caa1 $35 million senior secured revolving credit facility due 2014, at B1 (LGD-1, 1%) $310 million senior secured notes due 2014, at B2 (LGD-2, 26%) $242 million unsecured notes due 2015, at Caa2 (LGD-5, 80%) from (LGD-5, 79%) Speculative grade liquidity, at SGL-3 Ratings Rationale The change in outlook to negative is based on Alion's very high leverage compounded by the upcoming difficult DOD budget environment and upcoming covenant step-ups pressuring EBITDA covenant headroom. For the trailing twelve month period ended September 30, 2011, EBITDA as calculated per the company's revolving credit facility definition, totaled $63.2 million versus the minimum required threshold of $55.5 million. For the twelve month period ended December 31, 2011, the minimum required EBITDA steps up to $60.5 million and increases further to $63 million on December 31, 2012. The Caa1 corporate family rating reflects the company's continued high leverage and weak interest coverage balanced against Alion's healthy backlog and adequate liquidity profile. Moody's also notes that although Department of Defense budget cuts are anticipated, due to Alion's focus on highly sophisticated scientific and engineering research services, the effect of these cuts on Alion are likely to be less severe compared to others in the aerospace & defense sector. Nevertheless, the company is not expected to be immune to changes in the defense budget such as contract funding delays which impacted fiscal 2011 results. Over the intermediate term, credit metrics are expected to remain within the Caa rating category. Alion's adequate liquidity profile, denoted by the SGL-3 liquidity rating, is supported by cash on the balance sheet ($20.8 million at September 30, 2011), anticipated breakeven to positive free cash flow generation over the next twelve months and a largely undrawn facility at quarter-end with minimal usage on an intra- quarter basis. At September 30, 2011, Alion reported no drawings under its revolver. Covenant headroom is expected to be tight. If the company were to lose access to its revolver due to noncompliance with covenants as a result of lower than anticipated 2012 EBITDA generation, the SGL rating would likely be lowered to SGL-4 reflecting a weak liquidity profile. Negative rating momentum would develop if EBITDA and free cash flow generation do not improve through 2012, if the company were to begin relying on its revolver other than for light, temporary working capital needs, or there were further deterioration in leverage and interest coverage metrics. The rating outlook could be changed to stable if the company grows revenues and profitability in 2012, improves liquidity by generating positive free cash flow and expanding headroom under financial covenants. The ratings could be upgraded if the company substantially improves its liquidity position and achieves sustained growth in credit metrics such that debt to EBITDA and EBIT/interest approach 6.0 times and 1.0 times, respectively. The principal methodology used in rating Alion Science and Technology Corporation was the Global Aerospace and Defense Industry Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. Alion Science and Technology Corporation is an employee-owned company that provides scientific research, development, and engineering services related to national defense, homeland security, and energy and environmental analysis. Particular areas of expertise include naval architecture and engineering, defense operations, modeling and simulation, technology integration, information technology and wireless communications, energy and environmental services. Revenue for the fiscal year ended September 30, 2011 totaled $787 million. ALTAIR NANOTECHNOLOGIES: Receives Notice of Bid Price Deficiency ---------------------------------------------------------------- Altair Nanotechnologies, Inc. disclosed notification from NASDAQ that because Altair's common stock bid price has fallen below $1.00 from Nov. 21, 2011 to Jan. 5, 2012, Altair is not in compliance with Rule 5550(a)(2), which is NASDAQ's minimum bid price rule. The notification has no effect on the listing of Altair's common stock at this time, which will continue to trade on the NASDAQ Capital Market under the symbol "ALTI." The NASDAQ notice states that Altair has been provided a 180-day grace period, through July 5, 2012, to regain compliance with Rule 5550(a)(2). To regain compliance, the bid price for Altair's common stock must close at $1.00 or higher for a minimum of 10 consecutive business days within the stated 180-day grace period. At the close of the grace period, if Altair has not regained compliance, it may be eligible for an additional grace period of 180 days, if it meets the initial listing standards, with the exception of bid price, for the NASDAQ Capital Market and it provides NASDAQ with notice of its intent to timely cure the bid price deficiency. If it is not eligible for an additional grace period, Altair will receive notification that its securities are subject to delisting, and it may then appeal the delisting determination to a Hearings Panel. Altair intends to monitor the bid price for its common stock between now and July 5, 2012 and to consider available options to resolve the deficiency and regain compliance with the NASDAQ minimum bid price requirement, as to which no assurances can be given. About Altair Nanotechnologies Headquartered in Reno, Nevada with manufacturing in Anderson, Indiana, Altair Nanotechnologies Inc. -- http://www.altairnano.com/-- is a leading provider of energy storage systems for clean, efficient power and energy management. Altair's lithium titanate-based battery systems are among the highest performing and most scalable, with applications that include complete energy storage systems for use in providing frequency regulation and renewables integration for the electric grid, and battery modules and cells for transportation and industrial applications. AMERICAN AIRLINES: USAir Taps Millstein, Barclays for Advice ------------------------------------------------------------ The Wall Street Journal's Susan Carey, Gina Chon and Mike Spector report that people familiar with the matter said Friday that US Airways Group Inc. is being advised on a possible bid for American Air by Jim Millstein, a former Treasury official who worked on American International Group Inc.'s turnaround, and by Barclays PLC's Barclays Capital. One of the sources told WSJ that US Airways finds a combination with AMR compelling but is waiting for AMR to sort through its bankruptcy issues before making any formal proposals. WSJ notes AMR has stressed that it is focused on reorganizing and staying independent. Delta Air Lines Inc. and private-equity firm TPG Capital are two other entities that reportedly are studying bids for AMR. Delta has engaged Blackstone Group as its financial adviser to do the same, some of the sources have told WSJ. According to WSJ, it is unclear if other suitors will emerge. The report notes AMR's main European alliance partner, International Consolidated Airlines Group SA, brushed off the question Friday by saying that American is a valued member of its global alliance and IAG looks forward to continuing to work with AMR. U.S. laws prohibit foreigners from owning more than a 25% voting stake and a 49% economic interest in a U.S. airline. IAG owns British Airways and Spanish carrier Iberia. Those two and American are members of the Oneworld alliance and have a tight joint venture across the Atlantic in which they share revenue and plan capacity and prices. The Journal relates Wall Street analysts differ on how they expect AMR's situation to play out: -- Hunter Keay, of Wolfe Trahan & Co., said he thinks there is only a 20% likelihood that AMR will emerge from Chapter 11 as a stand-alone entity, down from 50% before the outside interest was revealed. Delta and US Airways are "two very motivated buyers who are willing to make concessions to get a deal done for defensive growth," he said. -- Helane Becker, of Dahlman Rose & Co., said she expects some AMR assets will be sold?rather than the entire company being purchased. "We believe Delta would make bids for American's Latin American operations," she said in a research note Friday. "If there were a bidding war for these assets, we believe Delta could easily muscle out most competitors." -- Maxim Group LLC analyst Ray Neidl said in a note that the sheer size of a Delta-American combo would be a deterrent to antitrust approval, and would probably necessitate AMR abandoning Chicago as a hub. A more feasible plan wouldbe a joint bid by US Airways and TPG, he said. According to the Journal, people familiar with the matter said Delta has conducted antitrust analysis and believes that, with concessions, a tie-up with American could get approval. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, John Lyons, Felecia Perlman and Jay Goffman at Skadden, Arps, Slate, Meagher & Flom LLP entered their appearance as proposed counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings on Dec. 9, 2011. The Committee has selected Togut, Segal & Segal LLP as co-counsel for conflicts and other matters; Moelis & Company LLC as its investment banker, and Mesirow Financial Consulting, LLC as its financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AMERICAN AIRLINES: American Eagle Goes All-Jet From DFW ------------------------------------------------------- American Eagle Airlines, the regional affiliate of American Airlines, is replacing all of its ATR turboprop aircraft operating from Dallas/Fort Worth International Airport. Fourteen markets throughout Arkansas, Louisiana, Missouri, Oklahoma and Texas will have all-jet service beginning Jan. 31. The airline will operate the daily flights with a combination of 37-, 44- and 50-seat jets. "We are pleased to once again provide jet service to all Eagle destinations from our hub in Dallas/Fort Worth," said Gary Foss, Managing Director - Network Planning for American's regional network. "We know our customers will enjoy the comfortable, quiet ride of these Embraer jets, enhancing their overall travel experience." These are the cities served from Dallas/Fort Worth that will switch to all-jet service on Jan. 31: Destination Daily Departures College Station, Texas 3 Fort Smith, Ark. 4 Joplin, Mo. 2 Killeen, Texas 9 Lawton, Okla. 5 Longview, Texas 2 Lubbock, Texas 7 Monroe, La. 2 Shreveport, La. 7 San Angelo, Texas 4 Waco, Texas 4 Wichita Falls, Texas 3 Texarkana, Texas 3 Tyler, Texas 4 About American Eagle American Eagle - named Best Regional Airline in North America by the 2011 World Airline Awards - operates more than 1,500 daily flights to over 170 cities throughout the United States, Canada, the Bahamas, Mexico and the Caribbean on behalf of American Airlines. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, John Lyons, Felecia Perlman and Jay Goffman at Skadden, Arps, Slate, Meagher & Flom LLP entered their appearance as proposed counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings on Dec. 9, 2011. The Committee has selected Togut, Segal & Segal LLP as co-counsel for conflicts and other matters; Moelis & Company LLC as its investment banker, and Mesirow Financial Consulting, LLC as its financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) AMERICAN APPAREL: SEC Completes Investigation, Takes No Action -------------------------------------------------------------- As disclosed in its quarterly report on Form 10-Q for the quarter ended June 30, 2011, American Apparel, Inc., received a subpoena from the Securities and Exchange Commission in August 2010 for documents relating to the SEC's investigation surrounding the change in the Company's registered independent accounting firm and the Company's financial reporting and internal controls. The Company also received a subpoena in May 2011 from the SEC for documents relating to a complaint filed by a former employee with the Occupational Safety & Health Administration in November 2010 that contains allegations regarding, inter alia, the Company's policies with respect to and accounting of foreign currency transactions and transfer pricing. The Company cooperated fully with the subpoenas and investigation, and on Jan. 9, 2012, the Company received a letter from the SEC's Los Angeles regional office stating that its investigation was completed, and that it did not intend to recommend any enforcement action against the Company to the Commission. About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. The Wall Street Journal reports that Skadden, Arps, Slate, Meagher & Flom has been advising the company on its recent restructuring efforts alongside investment bank Rothschild Inc. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Going Concern Doubt Marcum LLP, in New York, in its audit report on American Apparel's financial statements for the year ended Dec. 31, 2010, expressed substantial doubt about the Company's ability to continue as a going concern. As of April 30, 2011, the Company had approximately $8,000,000 of cash, approximately $8,900,000 of availability for additional borrowings and $46,100,000 outstanding on the credit facility under the BofA Credit Agreement and $1,400,000 of availability for additional borrowings and $4,000,000 outstanding on the credit facility under the Bank of Montreal Credit Agreement. As May 10, 2011, the Company had approximately $5,941,000 available for borrowing under the BofA Credit Agreement and $1,481,000 available under the Bank of Montreal Credit Agreement. American Apparel reported a net loss of $86.31 million on $532.99 million of net sales for the year ended Dec. 31, 2010, compared with net income of $1.11 million on $558.77 million of net sales during the prior year. The Company also reported a net loss of $28.15 million on $389.76 million of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $67.01 million on $389.02 million of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $323.64 million in total assets, $267.51 million in total liabilities and $56.12 million in total stockholders' equity. Bankruptcy Warning The Company incurred a loss from operations of $20,942 for the nine months ended Sept. 30, 2011, compared to a loss from operations of $38,167 for the nine months ended Sept. 30, 2010. The current operating plan indicates that losses from operations will be incurred for all of fiscal 2011. Consequently, the Company may not have sufficient liquidity necessary to sustain operations for the next twelve months and this raises substantial doubt that the Company will be able to continue as a going concern. There can be no assurance that management's plan to improve its operating performance and financial position will be successful or that the Company will be able to obtain additional financing on commercially reasonable terms or at all. As a result, the Company's liquidity and ability to timely pay its obligations when due could be adversely affected. Any new financing also may be substantially dilutive to existing stockholders and may require reductions in exercise prices or other adjustments of the Company's existing warrants. Furthermore, the Company's vendors and landlords may resist renegotiation or lengthening of payment and other terms through legal action or otherwise. If the Company is not able to timely, successfully or efficiently implement the strategies that it is pursuing to improve its operating performance and financial position, obtain alternative sources of capital or otherwise meet its liquidity needs, the Company may need to voluntarily seek protection under Chapter 11 of the U.S. Bankruptcy Code. AMERICAN AXLE: Expects up to $2.9 Billion Sales in 2012 ------------------------------------------------------- In a Form 8-K filing with the U.S. Securities and Exchange Commission, American Axle & Manufacturing Holdings, Inc., said it expects full year sales in 2012 to be approximately $2.8 to $2.9 billion. This sales projection is based on the anticipated launch schedule of programs in AAM's new business backlog and the assumption that the U.S. Seasonally Adjusted Annual Rate of sales increases from approximately 12.8 million vehicle units in 2011 to approximately 13.0 to 13.5 million vehicle units in 2012. AAM expects to be solidly profitable and to generate adjusted earnings before interest expense, income taxes and depreciation and amortization (Adjusted EBITDA) as a percentage of sales in the range of 14.0% to 14.5% in 2012. AAM expects full year capital spending in 2012 to approximate 6.0% of sales to support AAM's $1.1 billion new business backlog, launching between 2012 to 2014. About American Axle Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- manufactures, engineers, designs and validates driveline and drivetrain systems and related components and chassis modules for light trucks, sport utility vehicles, passenger cars, crossover vehicles and commercial vehicles. AXL has financial support from GM, its largest customer which accounted for 78% of sales in 2009. The Company's balance sheet at Sept. 30, 2011, showed $2.23 billion in total assets, $2.60 billion in total liabilities, and a $373.30 million total stockholders' deficit. * * * In June 2011, Standard & Poor's Ratings Services raised its corporate credit rating on American Axle & Manufacturing Holdings Inc. to 'BB-' from 'B+'. The outlook is stable. "At the same time, we raised our issue-level ratings on the company's senior secured debt to 'BB' from 'BB-' and on the unsecured debt to 'B' from 'B-'. All the recovery ratings on the debt remain unchanged," S&P stated. "The upgrade reflects our opinion that American Axle's credit measures will improve further over the next 12 months under the gradual recovery in North American auto demand, and that the company's leverage will decline to 3.5x," said Standard & Poor's credit analyst Lawrence Orlowski. As reported by the TCR on June 3, 2011, Moody's Investors Service raised American Axle's Corporate Family Rating and Probability of Default Rating to 'B1' from 'B2'. The raising of American Axle's CFR to B1 incorporates Moody's expectation that the company's improved year-over-year EBIT margin will largely be sustained over intermediate-term despite potential temporary automotive production disruptions and high gasoline prices. AMERICAN COMMERCE: Incurs $35,000 Net Loss in Nov. 30 Quarter ------------------------------------------------------------- American Commerce Solutions, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss available to common stockholders of $35,025 on $594,450 of net sales for the three months ended Nov. 30, 2011, compared with a net loss available to common stockholders of $120,430 on $480,511 of net sales for the same period a year ago. For the nine months ended Nov. 30, 2011, the Company reported a net loss available to common stockholders of $162,252 on $1.82 million of net sales, compared with a net loss available to common stockholders of $309,478 on $1.67 million of net sales for the same period during the prior year. The Company's balance sheet at Nov. 30, 2011, showed $5.05 million in total assets, $4.74 million in total liabilities and $303,713 in total stockholders' equity. As reported in the TCR on June 6, 2011, Peter Messineo, CPA, of Palm Harbor, Florida, expressed substantial doubt about American Commerce Solutions' ability to continue as a going concern, following the Company's results the fiscal year ended Feb. 28, 2011. Mr. Messineo noted that the Company has incurred recurring losses from continuing operations, has negative working capital and has used significant cash in support of its operating activities. Additionally, as of February 2011 the Company is in default of several notes payable. A full-text copy of the Form 10-Q is available for free at: http://is.gd/GD7Vn2 About American Commerce Bartow, Florida-based American Commerce Solutions, Inc., is a multi-industry holding company for its operating subsidiaries. As of the close of its most recently completed fiscal year end, the Company had one wholly owned subsidiary operating in the manufacturing segment. The operating subsidiary is International Machine and Welding, Inc., located in Bartow, Florida. International Machine and Welding, Inc., provides specialized machining services for heavy industry. AMERICAN LASER: U.S. Trustee Forms 3-Member Creditors Committee --------------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of ALC Holdings LLC, et al. The Creditors Committee members are: 1. Intergrated Media Solution Partner Attn: William Feldman 650 Fifth Avenue, 35th Floor, New York, NY 10019 2. Physician Sales & Service Attn: Dawn M. Hansen 4345 Southpoint Blvd. Jacksonville FL 32216 Tel: 907-380-4500 Fax: 904-332-3223 3. Signature Specialists Attn: James Krupp 60 Revere Drive, Suite 200 Northburg IL 60062 Tel: 224-639-1802 Fax: 224-639-1060 About American Laser Centers ALC Holdings LLC, dba American Laser Centers, operates 156 laser hair-removal clinics in 27 states. At the peak, the Farmington Hills, Michigan-based company had 222 stores generating $130.6 million in annual revenue. ALC Holdings, along with its affiliates, filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Lead Case No. 11-13853) on Dec. 8, 2011. Assets are $80.4 million. Liabilities include $40.3 million owing on a first-lien debt and $51 million in subordinated notes. Some $17.9 million is owing to trade suppliers. The Company selected Zolfo Cooper LLC as its adviser; Landis Rath & Cobb LLP as legal counsel; Traverse LLC as restructuring adviser; SSG Capital Advisors LLC as investment bankers; and BMC Group as claims agent. Prepetition, the Company signed a deal for Philadelphia-based private equity firm Versa Capital Management LLC to acquire assets, subject to higher and better offers at a bankruptcy court- sanctioned auction. Versa has agreed to pay $30 million plus $18 million of new-money financing to support the bankruptcy, unless outbid at an auction in January 2012. AMERICAN LASER: Court OKs Landis Rath & Cobb as Counsel ------------------------------------------------------- ALC Holdings LLC dba American Laser Centers and its affiliates sought and obtained permission from the U.S. Bankruptcy Court for the District of Delaware to employ Landis Rath & Cobb LLP as counsel. About American Laser Centers ALC Holdings LLC, dba American Laser Centers, operates 156 laser hair-removal clinics in 27 states. At the peak, the Farmington Hills, Michigan-based company had 222 stores generating $130.6 million in annual revenue. ALC Holdings, along with its affiliates, filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Lead Case No. 11-13853) on Dec. 8, 2011. Assets are $80.4 million. Liabilities include $40.3 million owing on a first-lien debt and $51 million in subordinated notes. Some $17.9 million is owing to trade suppliers. The Company selected Zolfo Cooper LLC as its adviser; Landis Rath & Cobb LLP as legal counsel; Traverse LLC as restructuring adviser; SSG Capital Advisors LLC as investment bankers; and BMC Group as claims agent. Prepetition, the Company signed a deal for Philadelphia-based private equity firm Versa Capital Management LLC to acquire assets, subject to higher and better offers at a bankruptcy court- sanctioned auction. Versa has agreed to pay $30 million plus $18 million of new-money financing to support the bankruptcy, unless outbid at an auction in January 2012. AMERIGROUP CORP: Moody's Rates Senior Notes 'Ba3', Outlook Stable ----------------------------------------------------------------- Moody's Investors Service has assigned a Ba3 senior debt rating to AMERIGROUP Corporation's (AMERIGROUP, NYSE:AGP) $75 million senior note issuance. The new debt issuance is an add-on to the company's $400 million debt offering dated November 16, 2011. The rating agency also assigned provisional shelf ratings (senior debt at (P)Ba3) to AMERIGROUP's multiple seniority shelf filed on December 12, 2011. The outlook on the ratings is stable. Ratings Rationale Moody's said that the $75 million debt issuance is a drawdown on AMERIGROUP's shelf filed in December 2011. The intended use of the total proceeds of $475 million (including the November 16, 2011 issuance), is to refinance the $260 million of outstanding convertible notes due 2012, fund the acquisition of the operating assets and contract rights of Health Plus (unrated) in New York, which is being purchased for $85 million and is expected to close in the first half of 2012, and for general corporate purposes. Moody's Ba3 senior debt rating for AMERIGROUP is based on the company's concentration in the Medicaid market offset by its good consolidated risk-based capital level, relatively stable financial profile and moderate financial leverage (adjusted financial leverage of approximately 32% with the additional debt issuance). The rating agency stated that AMERIGROUP's ratings could be upgraded if NAIC RBC is maintained at a level of at least 200% of CAL, adjusted financial leverage is reduced to 25%, EBITDA margins are maintained in the 6% range, and if there is continued diversification through expansion into new geographies or introduction of new products in existing states. However, Moody's said that if there is a loss or impairment of one or more of AMERIGROUP's Medicaid contracts, if the consolidated NAIC RBC ratio falls below 150% CAL, or if EBITDA margins fall below 3%, then the ratings may be downgraded. The principal methodology used in rating AMERIGROUP was Moody's Rating Methodology for U.S. Health Insurance Companies published in May 2011. Please see the Credit Policy page on www.moodys.com for a copy of this methodology. The following ratings were assigned with a stable outlook: AMERIGROUP Corporation -- senior unsecured debt rating at Ba3; senior unsecured debt shelf rating at (P)Ba3; subordinated debt shelf rating at (P)B1; preferred stock shelf rating at (P)B2. AMERIGROUP Corporation is headquartered in Virginia Beach, Virginia. For the first nine months of 2011 total revenue was $4.7 billion, with medical membership as of September 30, 2011 of approximately 2 million members. As of September 30, 2011 the company reported shareholders' equity of $ 1.3 billion. ANTHONY TRUJILLO: E.D.N.Y. Court Rejects Bid to Dismiss Lawsuit --------------------------------------------------------------- Magistrate Judge A. Kathleen Tomlinson denied the defendants' letter motion to dismiss the lawsuit, DORIS CANDELARIE, as trustee of the MARCEL A. TRUJILLO 2503 (C) TRUST and the DOMINIC A. TRUJILLO 2503 (C) TRUST, ANTHONY TRUJILLO and DENISE TRUJILLO, v. SCIENTIFIC INNOVATIONS, INC., JOSEPH H. BRONDO, JR., and PHYLLIS BRONDO, No. CV 08-1714 (E.D.N.Y.), pursuant to a Jan. 11, 2012 Order available at http://is.gd/OzwJCEfrom Leagle.com. The Magistrate Judge noted that for a myriad of reasons, including various parties filing for bankruptcy and three separate sets of counsel withdrawing as counsel for Plaintiffs, the pre-trial phase of the lawsuit has moved at an extraordinarily slow pace. At the Sept. 6, 2011 hearing, the District Court became aware of the fact that Plaintiff Anthony Trujillo had initially filed a Chapter 11 bankruptcy, which was then converted to a Chapter 7. On Oct. 10, 2011, Mr. Trujillos' bankruptcy trustee submitted a letter stating that "I have determined that I will not enter an appearance in this matter and have filed a Notice of Abandonment with the Bankruptcy Court in Colorado. As I am sure you are aware, that abandonment will revest Mr. Trujillo with full authority in the litigation." AR BROADCASTING: Court Enters Final Order on Cash Collateral Use ---------------------------------------------------------------- Judge Brendan L. Shannon entered a final order authorizing AR Broadcasting Holdings, Inc., et al., to utilize cash collateral of NexBank, SSB, as successor administrative agent and collateral agent to Deutsche Bank Trust Company Americas, and a group of secured prepetition lenders. As adequate protection of their interests in the Prepetition Collateral, the Prepetition Secured Lenders are granted: (i) allowed superpriority administrative claims under Section 507(b) of the Bankruptcy Code; and (ii) valid perfected replacement security interest in and lien on all assets of the Debtors subject only to senior liens and a "Carve-Out" amount for professional fees. Provisions of the Final Cash Collateral Order survive confirmation of the Debtors' Prepackaged Joint Plan of Reorganization and the occurrence of the Plan Effective Date. About AR Broadcasting AR Broadcasting Holdings Inc., AR Broadcasting LLC, and AR Licensing LLC sought bankruptcy protection (Bankr. D. Del. Case Nos. 11-13674 to 11-13676) on Nov. 17, 2011. AR Broadcasting, et al., are struggling Missouri and Texas Radio stations owned by Cumulus Media Inc. The Chapter 11 filing is a move to restructure the debt-heavy finances of the subsidiary companies that control them. Based in Atlanta, Georgia, Cumulus Media Inc. is the second largest radio broadcaster in the United States based on station count, controlling 350 radio stations in 68 U.S. media markets. Judge Brendan Linehan Shannon presides over the case. DLS Claims Administration, LLC, is the claims and notice agent. Adam G. Landis, Esq., and William E. Chipman, Jr., Esq., at Landis Rath & Cobb LLP, serve as bankruptcy counsel. AR Broadcasting Holdings estimated $10 million to $50 million in assets and $50 million to $100 million in debts. The petitions were signed by Linda Hill, vice president and principal accounting officer. AS SEEN ON TV: Amends 10.2 Million Common Shares Offering --------------------------------------------------------- As Seen On TV, Inc., filed with the U.S. Securities and Exchange Commission amendment no.4 to Form S-1 registration statement relating to periodic offers and sales of 10,257,045 shares of common stock by Bang TVG, LLC, Donald Barnett, Robert Bea, et al., which includes: -- up to 3,544,545 shares of common stock issued and outstanding as of Jan. 10, 2012; -- up to 2,237,500 shares of common stock issuable upon the possible exercise of the Company's Series A Warrants; -- up to 2,237,500 shares of common stock issuable upon the possible exercise of the Company's Series B Warrants; and -- up to 2,237,500 shares of common stock issuable upon the possible exercise of the Company's Series C Warrants. The Company will not receive any of the proceeds from the sale of common stock covered under this prospectus. To the extent the warrants are exercised on a cash basis, the Company will receive proceeds of the exercise price. The Company intends to use those proceeds for working capital and other general corporate purposes. The shares of common stock are being offered for sale by the selling security holders at prices established on the OTC Markets during the term of this offering. These prices will fluctuate based on the demand for the shares of common stock. The selling security holders may sell their shares of common stock in the public market based on the market price at the time of sale or at negotiated prices or in transactions that are not in the public market. The Company's common stock is quoted on the OTC Markets under the symbol "ASTV". A full-text copy of the amendment is available at: http://is.gd/cCxtwA About As Seen on TV Clearwater, Fla.-based As Seen On TV, Inc., is a direct response marketing company. The Company identifies, develops, and markets consumer products. The Company's strategy employs three primary channels: Direct Response Television (Infomercials), Television Shopping Networks and Retail Outlets. The Company's balance sheet at Sept. 30, 2011, showed $3.5 million in total assets, $13.9 million in total current liabilities, and a stockholders' deficit of $10.4 million. EisnerAmper LLP, in Edison, New Jersey, expressed substantial doubt about H&H Imports' ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2011. The independent auditors noted that of the Company's recurring losses from operations and negative cash flows from operations. B&F MARINE: Successfully Emerged From Bankruptcy ------------------------------------------------ National restructuring and turnaround firm ACM Capital Partners disclosed that its client, B & F Marine, Inc., one of Miami's oldest marine retailers, has successfully emerged from protection under Chapter 11 of the United States Bankruptcy Code. "We're pleased that B&F Marine, a local institution, has been restored to its stakeholders and achieved the stability it needs to move forward," said Jim Martin, Managing Partner of ACM Capital Partners. The restructuring plan received unanimous approval from the creditors. Plan confirmation without any dissenting creditor is unusual and is a testament to the business owners and professionals that served on the deal. "As difficult as the restructuring has been, our doors remained open throughout as they have since 1961," said Antonio Veciana, Jr., president of family owned B & F Marine. "We are coming out stronger and will continue to serve our clients and suppliers for many more years thanks to the good work of ACM Capital Partners and Infante Zumpano," he added. "ACM was instrumental in its ability to communicate with creditors on a business level and lend credibility to performance projections, key parts of any successful restructuring," said Luis Salazar, attorney for B & F Marine and chair of the Infante Zumpano's business reorganization and bankruptcy practice. About ACM Capital Partners Headquartered in Miami, ACM Capital Partners is a national turnaround and financial restructuring firm specializing in assisting middle market companies in transition or distress. ACM's team of professional advisors has assisted clients ranging from small businesses to Fortune 100 Companies. The ACM team brings decades of experience to every client engagement, and has built a reputation of helping clients create value and provide strategic solutions to both short and long-term financial issues. About B&F Marine B&F Marine is marine retailer in Miami. Anti-Castro activist Antonio Veciana founded B&F Marine in 1961. During good times, it expanded to four locations, but has since closed three and is focusing on its main location at 4001 S.W. 72nd Ave. B&F Marine, Inc., filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 10-48748) on Dec. 22, 2010. Luis Salazar, Esq., at Infante, Zumpano, Hudson & Miloch, LLC, in Coral Gables, Florida, serves as counsel. IN its schedules, the Debtor disclosed $4,393,609 in assets and $3,071,251 in liabilities. BLOCK COMMUNICATIONS: Moody's Rates $250MM New Debt at 'Ba3' ------------------------------------------------------------ Moody's Investors Services assigned a Ba3 rating and LGD4 -- 58% assessment to Block Communications, Inc.'s proposed $250 million Senior Notes due 2020. Moody's also affirmed Block's Ba3 Corporate Family Rating (CFR) and Ba3 Probability of Default Rating (PDR). The new debt issuance will be used to refinance the existing $115 million 1st lien sr secured term loan and $150 million sr notes. The rating outlook is stable. Assignments: Issuer: Block Communications, Inc. New $250 Million Senior Notes due 2020: Assigned Ba3, LGD4 -- 58% Affirmed: Issuer: Block Communications, Inc. Corporate Family Rating: Affirmed Ba3 Probability of Default Rating: Affirmed Ba3 Outlook Actions: Issuer: Block Communications, Inc. Outlook is Stable To be withdrawn at the close of the proposed transaction: -- $115 Million 1st lien senior secured term loan ($108.4 Million outstanding) due December 2012: Ba1, LGD2 -- 16% -- $150 Million senior notes ($150 Million outstanding) due December 2015: B1, LGD5 -- 71% Ratings Rationale The Ba3 CFR reflects our expectation of Block's moderate pro forma debt-to-EBITDA ratio of 3.4x (including Moody's standard adjustments) and approximately 5% pro forma free cash flow-to-debt ratios by the end of FY2012. Block's consistent cable operations support the Ba3 corporate family rating, despite continued EBITDA losses from the newspaper segment and broadcast EBITDA margins below rated industry peers. Ratings reflect the stable performance of cable operations and our view that management needs to ensure that EBITDA losses from newspaper operations are contained so they do not magnify their current negative impact on consolidated results. Secular changes negatively impacting traditional print media, especially newspapers, continue to pressure the company's publishing revenue and free cash flow. Additionally, the advertising-reliant publishing and broadcast segments expose the company to economic cycles. Liquidity is good with cash balances expected to remain above $20 million and approximately $85 million of availability under its $100 million revolver due 2016 (unrated). The stable outlook reflects our expectation that debt-to-EBITDA ratios (including Moody's standard adjustments) will remain below 4.5x with free cash flow remaining positive as continued growth in EBITDA for cable and telephony segments offsets losses from newspapers. Ratings could be downgraded if we project an inability to generate positive free cash flow or deterioration in cable segment's performance. Increased EBITDA losses in the newspaper segment or expectations for debt-to-EBITDA ratios being sustained above 4.5x (including Moody's standard adjustments) could lead to a downgrade. The company's lack of national or regional scale and newspaper exposure constrain ratings; however, ratings could be upgraded if newspaper revenues stabilize and debt-to-EBITDA leverage is sustained below 3.0x (including Moody's standard adjustments) with free cash flow-to-debt ratios of 10%. Block's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Block's core industry and believes Block's ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. A privately held diversified media company, Block Communications, Inc. has operations in cable television (48% revenues in 2010), newspaper publishing (36%), and television broadcasting (10%). Its cable operations serve approximately 159,500 customers in the greater Toledo, Ohio metropolitan area (including Michigan suburbs) as well as Sandusky, OH. Block operates two daily metropolitan newspapers in Pittsburgh, PA and Toledo, OH, as well as television stations in Louisville, KY; Lima, OH; Boise, ID; and Decatur, IL. The company maintains its headquarters in Toledo, OH and generated revenues of $442 million through the 12 months ended September 30, 2011. CASELLA WASTE: S&P Affirms 'B+' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' long-term rating and '5' recovery rating on $21.4 million of solid waste revenue bonds issued by the Finance Authority of Maine (FAME) in 2005. The bonds will be guaranteed by Rutland, Vt.-based Casella Waste Systems Inc. and are expected to be remarketed on Feb. 1, 2012. We left our 'A/A-1' long- and short-term ratings on the remaining $3.6 million non-remarketed portion unchanged. "We affirmed our other ratings on Casella, including the 'B+' corporate credit rating," S&P said. "The rating on the $21.4 million of solid waste revenue bonds reflects the bonds' upcoming Feb. 1, 2012, remarketing and withdrawal of LOC support," said Standard & Poor's credit analyst James Siahann. "Our '5' recovery rating reflects our view that the holders of the remarketed revenue bonds can expect a modest (10% to 30%) recovery in the event of a payment default. The payment on the bonds is junior to the outstanding debt under the $227.5 million senior secured revolving credit facility and $180 million senior secured second-lien notes, but is senior in right of payment to the $200 million subordinated debt. The ratings on the remaining $3.6 million of the bonds reflect the expected retention of LOC support," S&P said. All $25 million of the bonds were originally issued in 2005 as LOC-backed variable-rate obligations, with the ratings linked to LOC provider Bank of America N.A. The bonds mature on Jan. 1, 2025, and are secured solely by pledges of payments derived by FAME under a loan agreement with Casella (the guarantor). "The ratings on Casella reflect a highly leveraged financial risk profile marked by high debt balances and minimal free cash generation. We view Casella's business risk profile as 'fair' under our criteria, reflecting the company's participation in an industry currently experiencing favorable conditions, its competitive market positions in its operating regions, and consistent profitability despite its somewhat modest scale of operations," S&P said. Casella is a vertically integrated provider of collection, recycling, transfer, and disposal services to residential, commercial, and industrial customers. Its trailing-12-month sales as of Oct. 31, 2011, were $478 million (after divesting certain nonintegrated recycling facilities in March 2011), making the company one of the larger regional solid waste haulers. It operates predominantly in the northeastern U.S. and focuses on competing in secondary and tertiary markets. Casella occupies the largest or second-largest market position in about 80% of the markets it serves. Roughly 82% of revenues are derived from its solid waste operations, with 10% coming from the remaining integrated recycling assets and another 8% from major accounts. Within Casella's solid waste operations, collection accounted for 43% of segment revenue during its fiscal year ended April 30, 2011, followed by disposal (23%), processing and recycling (11%), and power/landfill gas to energy (5%). "Casella's operating performance in fiscal 2012 has rebounded sequentially from the deterioration experienced during the last two quarters of fiscal 2011. Revenues were affected by weather- related issues and weak landfill volumes. Revenues from core price increases (that is, excluding surcharges) grew 1.4% in the quarter ended Oct. 31, 2011, and adjusted EBITDA margin was 27%, which is slightly greater than the average of 24% over the preceding two years. In our view, some of the factors that contributed to this were one-off events as opposed to structural degradation in the solid waste collection and disposal business. We believe Casella's operating performance will likely improve in subsequent quarters due to economic growth, cost reductions, and pricing initiatives. Casella expects additional savings from the subsequent redemption of its 11% second-lien notes ($10 million in savings); consolidation of back-office functions into its customer care and shared service center ($1.3 million); and fleet efficiency. However, we also recognize the risk that sizable and consistent pricing gains may be difficult to achieve due to municipal budget pressures and competitive bidding," S&P said. "We characterize Casella's financial risk profile as 'highly leveraged' under our criteria, because the company continues to carry $594 million of adjusted debt. Based on our calculations, it had total adjusted debt to EBITDA of 5.8x and funds from operations (FFO) to total adjusted debt of 10% as of Oct. 31, 2011 -- these figures are at the low end of, but still consistent with, our expectation at the current ratings," S&P said. "Management has stated that debt reduction is a key initiative and has targeted a reported debt to EBITDA ratio of 3.5x by fiscal 2013. Incorporating our adjustments for debt-like obligations, this translates to approximately 4.5x. We view management's efforts to adopt a less-aggressive capital structure as favorable. However, weak economic trends could slow the beneficial effects of operational efficiencies and lower fixed charges on Casella's free cash flow and overall financial risk profile. Part of the company's deleveraging strategy has involved asset sales, and we will monitor if or when the company decides to divest its 50% share of the US GreenFiber LLC joint venture and/or its 6.4% share of RecycleRewards Inc. (Casella's share of RecycleRewards was reduced in October 2011 from 8.2% due to an equity offering to a third-party investor)," S&P said. "The outlook is negative. The company has limited headroom under certain financial covenants, and failure to improve this could keep Casella's liquidity under pressure; this could prompt us to lower the ratings. We could also lower the ratings if a downturn in the business or the economy causes earnings or cash flow to deteriorate and liquidity and financial covenant headroom continue to erode, or if it becomes apparent to us that the company will not be able to maintain FFO to total adjusted debt near 10%. We note that industry pricing could become increasingly competitive and weaker economic growth could slow the progress we expect the company to make in strengthening its financial risk profile," S&P said. "However, Casella could improve its covenant headroom levels by demonstrating improved operating performance in subsequent quarters or by divesting other assets and using the proceeds to reduce debt. Although we believe that Casella remains committed to reducing debt (as evidenced by its use of asset divestiture proceeds in 2011 to repay term loan borrowings, reducing debt by more than $100 million), we believe it's unlikely that the pace of deleveraging would be rapid enough to warrant higher ratings within the next year. While less likely, we could raise the ratings if improvement in operating results or proceeds from additional asset sales enables the company to generate FFO to debt approaching 15%," S&P said. CASH STORE: Moody's Assigns 'B3' Rating to C$125MM Notes Offering ----------------------------------------------------------------- Moody's Investors Service assigned a B3 corporate family rating and a B3 rating to the C$125 million senior secured notes issuance of The Cash Store Financial Services Inc. ("CSFS"). The rating outlook is stable. Ratings Rationale The ratings reflect the company's solid franchise positioning within Canada. CSFS is a market leader in Canada in providing alternative financial products and services and benefits from a more favorable regulatory regime in relation to comparable firms in the United States. The company also benefits from a relatively strong balance sheet with a positive tangible net worth position. Balancing these credit positives are a number of credit challenges: Product concentration. As of September 30, 2011 payday loan fees accounted for 72% of revenues. Enabling legislation has been passed by most of the Canadian provinces; nevertheless Moody's views the payday lending product as a particularly risky product due to ongoing political and regulatory event risk. Geographic concentration. As of September 30, 2011, 98% of the company's 586 stores were located in Canada, and 75% of stores are located in three provinces, Ontario (200), Alberta (131), and British Columbia (110). Geographic concentration renders the company vulnerable to unforeseen circumstances including unfavorable legislative and/or regulatory initiatives. CSFS is planning to aggressively increase its UK store count through organic growth; while this will increase the level of geographic diversification, aggressive growth outside the home market of Canada does pose a level of execution risk which must be managed. The principal methodology used in this rating was Analyzing The Credit Risks Of Finance Companies published in October 2000. CSFS, based in Edmonton, Alberta, is a financial services retailer serving the underbanked customer. Assignments: Issuer: Cash Store Financial Services, Inc. (The) Corporate Family Rating, Assigned B3 Senior Secured Regular Bond/Debenture, Assigned B3 CATALYST PAPER: Bonds Gain Ahead of Grace-Period Expiration ----------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that the secured bonds of Catalyst Paper Corp. showed some signs of life in Wednesday's trading, traders and analysts said, just as the 30-day grace period invoked after the company missed an interest payment on Dec. 15, 2011, is about to expire. Missed Payments Dec. 15, 2011 Catalyst said that on Dec. 15, 2011, it deferred the approximate US$21 million interest payment on its outstanding 11.00% Senior Secured Notes due 2016 and Class B 11.00% Senior Secured Notes due 2016 due on Dec. 15, 2011. Catalyst said it is reviewing alternatives to address its capital structures and it is currently in discussions with noteholders. Perella Weinberg Partners is the financial advisor. About Catalyst Paper Catalyst Paper -- http://www.catalystpaper.com/-- manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With four mills, located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 1.9 million tons. The Company is headquartered in Richmond, British Columbia, Canada and its common shares trade on the Toronto Stock Exchange under the symbol CTL. The Company also reported a net loss of C$266.30 million on C$941.70 million of sales for the nine months ended Sept. 30, 2011, compared with a net loss of C$407.20 million on C$895 million of sales for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed C$1.45 billion in total assets, C$1.31 billion in total liabilities, and C$135.60 million in shareholders' equity. * * * Catalyst Paper carries Moody's Investors Service's 'Caa3' corporate family rating with the outlook "negative." The Caa3 CFR reflects Moody's view that Catalyst's capital structure is unsustainable and that material losses are likely in a restructuring scenario. The rating considers the company's significant debt load, its weak financial performance and the expectation that the company will continue to face challenging industry conditions for some of its paper products. Two of the company's primary products, newsprint and directory paper, continue to face secular demand declines. The rating is supported by the company's position as one of the leading producers of telephone directory paper in the world and specialty papers and newsprint in Western North America. Standard & Poor's gave the company an 'SD' (selective default) in December following the deferred payment. CATHOLIC CHURCH: Delaware Abuse Victims Settle for $7 Million ------------------------------------------------------------- Matthias Conaty and Jeff Rose, two sexual abuse victims, say that they and 12 other men settled their cases with three Catholic church institutions for an amount aggregating $7 million, Reuters reports. "It's been a painful day, but in some ways it's a day of triumph," Mr. Conaty told the news agency. The settlement includes nine alleged victims by former Capuchin Friar Paul Daleo and five victims of John Fleming, a former wrestling coach in St. Edmond's Academy. Mr. Daleo also worked at Saint Edmond's Academy in Wilmington, Delaware. Messrs. Conaty and Rose, who say they were abused in the late 1970s and early 1980s, announced the settlement outside the Roman Catholic Diocese of Wilmington, notes the report. According to the Survivor Network of those Abused by Priests, an advocacy group, the settlement the Delaware settlement reached on Thursday was reached with institutions that hired and supervised the predators. The institutions are New Jersey-based Capuchin Franciscan Province of the Sacred Stigmata of St. Francis, St. Edmond's and the order that runs it, the Brothers of the Holy Cross of the Eastern Province of the United States of America Inc. Under the settlement, the Capuchins and Saint Edmond's must release documents outlining the "black-and-white, gory details" of the abuse and any cover-up, Mr. Conaty said. "I apologize to the victims and families that went through a lot of pain and suffering. I hope this brings peace," Nick Mormando, the new provincial minister for the Capuchins, told Reuters by telephone. Child abuse accusations have rocked the Catholic Church in the United States since 2002, and the church has paid out some $2 billion in settlements to victims, notes Reuters. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. Judge Christopher Sontchi confirmed the Second Amended Chapter 11 Plan of Reorganization filed by the Diocese as a settlement plan, at a hearing held July 28, 2011. The Plan aims to pay approximately $77.4 million to people who were sexually abused by priests. The Plan was declared effective on September 26, 2011, according to a notice filed by Patrick A. Jackson, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware. Kenneth Martin and Charles W. Wiggins, two priests accused of sexual abuse, took separate appeals to the U.S. District Court for the District of Delaware from Judge Sontchi's July 28, 2011 order confirming the Plan. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Wilm. Case Advisors File Final Fee Applications ---------------------------------------------------------------- These professionals filed with the U.S. Bankruptcy Court for the District of Delaware their final applications for fees and reimbursement of expenses in the Chapter 11 case of Catholic Diocese of Wilmington, Inc.: Professional Period Fees Expenses ------------ --------- ---------- -------- Pachulski Stang Ziehl & 11/04/09- $4,438,345 $329,180 Jones LLP 09/26/11 Pepper Hamilton LLP 04/25/11- $341,531 $12,901 09/30/11 Berkeley Research Group 03/01/11- $43,268 $19 LLC 09/26/11 Business Management 01/05/10- $9,240 - International 09/26/11 R.M. Fields LP 07/21/10- $42,872 $57 02/28/11 Stuart Maue, the Fee Examiner in the Chapter 11 case, tells the Court that he recommends approval of Business Management's final fee application. Young Conaway Stargatt & Taylor LLP, the Reorganized Debtor's counsel, sought and obtained an extension of its final fee application deadline from November 28, 2011 to December 12, 2011. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. Judge Christopher Sontchi confirmed the Second Amended Chapter 11 Plan of Reorganization filed by the Diocese as a settlement plan, at a hearing held July 28, 2011. The Plan aims to pay approximately $77.4 million to people who were sexually abused by priests. The Plan was declared effective on September 26, 2011, according to a notice filed by Patrick A. Jackson, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware. Kenneth Martin and Charles W. Wiggins, two priests accused of sexual abuse, took separate appeals to the U.S. District Court for the District of Delaware from Judge Sontchi's July 28, 2011 order confirming the Plan. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Milw. Plan Filing Exclusivity Expires June 4 ------------------------------------------------------------- The Archdiocese of Milwaukee obtained from the bankruptcy court a second extension of the period within which it has the exclusive right to propose a Chapter 11 plan and obtain acceptance of that plan through June 4, 2012, and August 3, 2012. The Archdiocese asks that the relief be without prejudice to (a) the Debtor's right to seek further extensions and the rights of parties-in-interest with standing to oppose the requests, and (b) the rights of parties-in-interest with standing to seek to shorten or terminate the Debtor's exclusivity periods and Debtor's right to oppose the requests. Section 1121(b) of the Bankruptcy Code provides for an initial period of 120 days after the commencement of a Chapter 11 case, during which time a debtor has the exclusive right to file a Chapter 11 plan. Section 1121(c)(3) of the Bankruptcy Code provides that competing plans may be filed by any party-in- interest if a debtor has not filed a plan that has been accepted by each class of claims or interest that are impaired under the plan within 180 days after the commencement of the case. The First Extension Order established the Debtor's Exclusivity Period and Exclusive Solicitation Period as May 4, 2011, and July 3, 2011. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, tells the Court that there are significant, unresolved issues involving the scope of the Debtor's bankruptcy estate and the availability of insurance proceeds to help fund a reorganization plan, including the question of whether assets of the Archdiocese of Milwaukee Catholic Cemetery Perpetual Care Trust are property of the Debtor's bankruptcy estate. Mr. Diesing further notes that the deadline for claims of abuse survivors is not until February 1, 2012, and fewer than 70 abuse survivor claims have been filed, even though the Committee counsel and abuse survivor plaintiff's counsel have led the Debtor to believe many more will emerge. The Debtor believes that grounds for objection to filed claims exist. Accordingly, the Debtor asserts that it cannot accurately quantify the number and dollar amounts of claims against its estate. The Order was entered by the Court after the Archdiocese certified that no objections were filed as of November 14, 2011. The Official Committee of Unsecured Creditors told the Court on November 11, 2011 that it had no objections to an extension of the Exclusive Periods. About the Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Milw. Has Until Jan. 29 to Decide on Leases ------------------------------------------------------------ The Archdiocese of Milwaukee obtained from the U.S. Bankruptcy Court for the Eastern District of Wisconsin for a third extension of the time within which it may assume or reject an unexpired lease of nonresidential real property. The Court previously gave the Archdiocese until October 31, 2011, to assume or reject an unexpired lease of nonresidential property. The Archdiocese seeks an additional 90-day extension of the lease decision period, or through and including January 29, 2012. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, informs the Court that the Archdiocese, as lessee, pays for the upkeep, maintenance and repairs to the buildings and grounds, as well as all utilities and supplies, in exchange for use of the Leased Premises. The Archdiocese, in turn, sublets portions of the premises to other unrelated entities, including the Milwaukee Bucks, Inc. Due to the large number of issues in the bankruptcy proceeding, the Archdiocese needs additional time to fully evaluate the Lease to determine whether the assumption or rejection of the Lease is in the best interest of the Archdiocese, the bankruptcy estate and its creditors, Mr. Diesing contends. He asserts that to ascertain if the Lease is beneficial or burdensome, the Archdiocese must consider its continuing needs and the condition of the rental market, as well as its obligations to its tenants, including the Milwaukee Bucks. De Sales Preparatory Seminary, Inc. joins in the Archdiocese of Milwaukee's request to extend the Lease Decision Period. About the Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CENTRAL FALLS: Teachers Plan to Challenge Bondholder Law -------------------------------------------------------- Dow Jones' DBR Small Cap reports that the closely watched bankruptcy case of Central Falls, R.I., hit its first major roadblock with a dispute that will lead the city's teachers to challenge a Rhode Island law that they say unfairly shields the debt held by municipal bondholders. About Central Falls Central Falls is a city in Providence County, Rhode Island. The population was 18,928 at the 2000 census. Central Falls is the smallest and most densely populated city in Rhode Island. Central Falls sought bankruptcy protection under Chapter 9 of the U.S. Bankruptcy Code (Bankr. D. R.I. Case No. 11-13105) on Aug. 1, 2011. The Chapter 9 filing was made after former Rhode Island Supreme Court Judge Robert Flanders, who serves as state-appointed receiver for the city, was unable to negotiate significant concessions from unions representing police officers, firefighters and other city workers. The city grappled with an $80 million unfunded pension and retiree health benefit liability that is nearly quadruple its annual budget of $17 million. Judge Robert Flanders succeeded the role from retired Superior Court Associate Justice Mark A. Pfeiffer, who was appointed in July 2010. The Central Falls receivership, the state's first, has left the mayor and council without any power to govern. Judge Frank Bailey presides over the Chapter 9 case. Theodore Orson, Esq., at Orson and Brusini Ltd., serves as bankruptcy counsel to the receiver. The receiver is negotiating new contracts with unions representing city workers. The receiver filed a proposed debt adjustment plan for the city in September. It won't affect bondholders. CENTURION PROPERTIES: Plan Confirmed; Battelle Valued at $75MM -------------------------------------------------------------- Judge Frank L. Kurtz of the U.S. Bankruptcy Court for the Eastern District of Washington confirmed the Second Amended Plan of Reorganization of Centurion Properties III, LLC. In its Dec. 15, 2011 order, the Court held that the Second Amended Plan satisfied the confirmation requirements under Section 1129 of the Bankruptcy Code. As reported in the Oct. 27, 2011 edition of the Troubled Company Reporter, the Plan is premised on (i) the Reorganized Debtor's ability to obtain replacement financing for General Electric Capital Corp.'s Allowed Secured Claim, and (ii) funding through "new equity contributions" and continued use of GECC's cash collateral with GECC's prior consent. The Plan also contemplates that the Debtor will refinance the property located at 3200-3350 Q Avenue and 620 Battelle Boulevard, Richland, Washington and the improvements located on it, or in the alternative, sell the Battelle Leaseholds subject to GECC's credit bid. The Plan also provides for completion of pending litigation to determine the nature, extent, amount and validity of disputed Claims, as well as the pursuit of affirmative claims against Defendants for purposes of judgments in favor of the Debtor. A copy of the Second Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/CENTURION_2ndamendeddisclosure.pdf Prior to the confirmation hearing, the Debtor sought valuation for the Battelle Leaseholds for confirmation purposes. The bankruptcy judge ruled determined the value of the Battelle Leaseholds to be $74,750,000 before deducting the costs of sale. Battelle Leaseholders pertains to the Debtor's leasehold interests in the Battelle Memorial Institute Campus in Richland, Washington. About Centurion Properties Kennewick, Washington-based Centurion Properties III, LLC, was established in 2006 for the sole purpose of acquiring real estate project Battelle Leaseholds located in Richland, Washington. Its sole asset is its leasehold interests in the Battelle Memorial Institute Campus and improvements, valued in excess of $90 million. CPIII filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wash. Case No. 10-04024) on July 9, 2010. John D. Munding, Esq., at Crumb & Munding, assists the Company in its restructuring effort. The United States Trustee was unable to appoint a creditors committee in the case. The Company estimated its assets and debts at $50 million to $100 million. CHARTER COMMS: S&P Assigns 'BB-' Rating to $750MM Senior Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level ratings to the $750 million senior notes due 2022 that it expects to be issued by CCO Holdings LLC and CCO Holdings Capital Corp., subsidiaries of St. Louis-based cable-TV operator Charter Communications Inc. (Charter). "The recovery rating on the notes is '3', indicating our expectations for meaningful (50% to 70%) recovery in the event of payment default," S&P said. "Charter will use proceeds from these unsecured, publicly registered notes to fund the bulk of a concurrent tender offer for up to an aggregate of $843 million of outstanding debt securities. The tender targets two second-lien note issues (due in 2012 and 2014) and up to $250 million of unsecured notes due 2016," S&P said. "The proposed notes do not affect the other issue-level ratings on Charter, including the 'BB-' corporate credit rating and stable outlook. Ratings on Charter continue to reflect aggressive leverage, formidable satellite and telephone company competition, and material basic video subscriber erosion. Charter's business risk does benefit from favorable cable industry operating characteristics, including the good revenue visibility inherent in the company's subscription-based business model; capital spending largely linked to growth of new revenue-generating units; and the significant bandwidth capacity of its fiber/coaxial plant," S&P said. Ratings List Charter Communications Inc. Corporate Credit Rating BB-/Stable/-- New Ratings CCO Holdings LLC CCO Holdings Capital Corp. $750 mil senior notes due 2022 BB- Recovery Rating 3 CLARE AT WATER: Unsecured Creditors Retain FTI Consulting --------------------------------------------------------- The Official Committee of Unsecured Creditors of The Clare at Water Tower asks the U.S. Bankruptcy Court for the Northern District of Illinois permission to retain FTI Consulting as financial advisor. Upon retention, the firm will, among other things: a. assist with the assessment and monitoring of the Debtor's short term cash flow, liquidity, and operating results; b. assist in the review of the terms of the DIP financing and use of cash collateral; and c. assist in the review of the terms of retention of the Debtor's advisor. Martin L. Cohen attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm will charge the Debtor's estates based on the hourly rates of its professionals: Personnel Rates --------- ----- Senior Managing Directors $780-$895 Directors/Managing Directors $560-$745 Consultants/Senior Consultants $280-$530 Administration/Paraprofessional $115-$230 About The Clare at Water Tower The Clare at Water Tower is an upscale 334-unit high-rise continuing-care retirement community in Chicago, Illinois. The project is only 42% occupied because the target population either hasn't been able to sell homes or lacks sufficient cash to make required deposits as the result declining investments following the recession. The facility is a 53-story building on land rented from Loyola University of Chicago. The facility is managed and developed by a unit of the Franciscan Sisters of Chicago, who invested more than $14 million. The project opened in December 2008. Residents must make partially refundable deposits ranging from $263,000 to $1.2 million. Monthly fees are an additional $2,700 to $5,500. The Clare filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 11-46151) on Nov. 14, 2011, after defaulting on $229 million in tax-exempt bond financing used to build the project. Judge Susan Pierson Sonderby presides over the case. Matthew M. Murphy, Esq., at DLA Piper LLP, serves as the Debtor's counsel. Epiq Bankruptcy Solutions serves as claims and noticing agent. In its petition, the Debtor estimated $100 million to $500 million in assets and debts. The petition was signed by Judy Amiano, president. Counsel to Redwood Capital Investments LLC as DIP Lender are Mark A. Berkoff, Esq., and Nicholas M. Miller, Esq., at Neal Gerber & Eisenberg LLP. Bond Trustee, The Bank of New York Mellon Trust Company, is represented by Clifton R. Jessup, Jr., Esq., at Greenberg Traurig. Counsel to Bank of America, N.A., the Debtor's prepetition lender, is Brian I. Swett, Esq., at Winston & Strawn LLP. Counsel for the majority fixed rate bonds is Nathan F. Coco, Esq., at McDermott Will & Emery LLP. Loyola, the Debtor's landlord, is represented by Timothy R. Casey, Esq., at Drinker Biddle & Reath LLP. The United States Trustee in Chicago appointed seven members to the official committee of unsecured creditors. CLARE AT WATER: Unsecured Creditors Retain SNR Denton as Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of The Clare at Water Tower asks the U.S. Bankruptcy Court for the Northern District of Illinois for permission to retain SNR Denton US LLP as Counsel. Upon retention, the firm will, among other things: a. assist the Committee in its analysis of, and negotiations with, the Debtor or any third party concerning matters related to, among other things, the assumption or rejection of certain leases and executor contracts, asset dispositions, financing of other transactions, as well as the term of a Chapter 11 plan for the Debtor, accompanying disclosure statement and related plan documents; b. review and analyze the terms and conditions of the existing DIP financing and the adequate protection provided to the bondholders; and c. assist the Committee in its consideration of alternate exist strategies. The firm's hourly rates are: Personnel Rates --------- ----- Sam J. Alberts $690 Thomas A. Labuda $605 Stefanie L. Wowchuk $385 About The Clare at Water Tower The Clare at Water Tower is an upscale 334-unit high-rise continuing-care retirement community in Chicago, Illinois. The project is only 42% occupied because the target population either hasn't been able to sell homes or lacks sufficient cash to make required deposits as the result declining investments following the recession. The facility is a 53-story building on land rented from Loyola University of Chicago. The facility is managed and developed by a unit of the Franciscan Sisters of Chicago, who invested more than $14 million. The project opened in December 2008. Residents must make partially refundable deposits ranging from $263,000 to $1.2 million. Monthly fees are an additional $2,700 to $5,500. The Clare filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 11-46151) on Nov. 14, 2011, after defaulting on $229 million in tax-exempt bond financing used to build the project. Judge Susan Pierson Sonderby presides over the case. Matthew M. Murphy, Esq., at DLA Piper LLP, serves as the Debtor's counsel. Epiq Bankruptcy Solutions serves as claims and noticing agent. In its petition, the Debtor estimated $100 million to $500 million in assets and debts. The petition was signed by Judy Amiano, president. Counsel to Redwood Capital Investments LLC as DIP Lender are Mark A. Berkoff, Esq., and Nicholas M. Miller, Esq., at Neal Gerber & Eisenberg LLP. Bond Trustee, The Bank of New York Mellon Trust Company, is represented by Clifton R. Jessup, Jr., Esq., at Greenberg Traurig. Counsel to Bank of America, N.A., the Debtor's prepetition lender, is Brian I. Swett, Esq., at Winston & Strawn LLP. Counsel for the majority fixed rate bonds is Nathan F. Coco, Esq., at McDermott Will & Emery LLP. Loyola, the Debtor's landlord, is represented by Timothy R. Casey, Esq., at Drinker Biddle & Reath LLP. The United States Trustee in Chicago appointed seven members to the official committee of unsecured creditors. CLARE OAKS: Employs A&M's Paul Rundell as CRO --------------------------------------------- Clare Oaks seeks authority from the Bankruptcy Court to: (i) retain Alvarez & Marsal Healthcare Industry Group LLC to provide the Debtor a Chief Restructuring Officer and certain ADDITIONAL PERSONNEL; and (ii) designate Paul Rundell as CRO for the Debtor effective retroactively to the Petition Date. Mr. Rundell will serve as the CRO to assist the Debtor with its reorganization efforts and chapter 11 case. A&M will provide additional employees employed by A&M and its professional service provider affiliates (all of which are wholly-owned by its parent company and employees), and, together with the CRO, as necessary to assist the CRO in the execution of the duties. The Debtor proposes to retain A&M to provide Mr. Rundell as CRO and to provide the additional personnel to assist Mr. Rundell in the execution of his duties on the terms and conditions set forth in the engagement letter, dated Dec. 5, 2011 (which superseded the previously executed engagement letter, dated Nov. 9, 2011). Among other things, personnel to be provided by A&M will: (a) in cooperation with the Board of Directors or other applicable officers of the Debtor, will perform a financial review of the Debtor, including but not limited to a review and assessment of financial information that has been, and that will be, provided by the Debtor to its creditors, including without limitation its short and long-term projected cash flows and operating performance; (b) will assist in the identification (and implementation) of cost reduction and operations improvement opportunities; and (c) will assist the Board and other Debtor engaged professionals in managing the process to find a suitable party for the Debtor to affiliate with, or sell substantially all of its assets to, including leading the discussions and negotiations (along with B.C. Ziegler and Company, the Debtor's proposed investment banker, or any other professional that may be engaged to ssist in such process), on behalf of the Debtor. A&M will be paid by the Debtor for the staffing services at their customary hourly billing rates. The current hourly billing rate for Mr. Rundell is $650. The current hourly billing rates for David McLaughlin and Michael Biegel, the Additional Personnel expected to be working significantly on this matter, are $500 and $300, respectively. The currently hourly rates for other personnel are subject to these ranges that are based upon position held: Managing Director $650 to $850 Director $450 to $650 Associate $350 to $450 Analyst $250 to $350 A&M will seek reimbursement for reasonable and necessary expenses incurred in connection with the case, including, but not limited to travel, lodging, computer research, and messenger and telephone charges. In addition, A&M will seek reimbursement for the reasonable fees and expenses of its outside counsel incurred in connection with the preparation and approval of this Motion. All fees and expenses due to A&M will be billed on a monthly basis. On or about Nov. 14, 2011, A&M received $190,000 as a retainer in connection with preparing for and conducting the filing of this case. No other transfers were made in the 90 days prior to the Petition Date. After the application of the retainer to A&M's prepetition fees ($164,200) and expenses ($172.64) for services performed to the Debtor, the balance of the retainer as of the Petition Date was approximately $25,627. Paul Rundell, managing director of Alvarez & Marsal Healthcare Industry Group, LLC, attests that the firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. The Court scheduled a Jan. 17, 2012 hearing on the matter. About Clare Oaks Clare Oaks, an Illinois not-for-profit corporation organized under section 501(c)(3) of the Internal Revenue Code, operates a namesake continuing care retirement community in Bartlett, Illinois. Its members are the Sisters of St. Joseph of the Third Order of St. Francis, a Roman Catholic religious institute, who are elected and serving as the members of the Central Board of the Congregation. Clare Oaks is managed by CRSA/LCS Management LLC, an affiliate of Life Care Services LLC. Clare Oaks filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-48903) on Dec. 5, 2011. Judge Pamela S. Hollis presides over the case. David R. Doyle, Esq., George R. Mesires, Esq., and Patrick F. Ross, Esq., at Ungaretti & Harris LLP, serve as the Debtor's counsel. North Shores Consulting serves as the Debtor's operations consultant. Continuum Development Services and Alvarez & Marsal Healthcare Industry Group LLC serve as advisors. Alvarez & Marsal's Paul Rundell serves as the Chief Restructuring Officer. Sheila King Marketing + Public Relations serves as communications advisors. In its petition, Clare Oaks estimated $100 million to $500 million in assets and debts. The petition was signed by Michael D. Hovde, Jr., president. Wells Fargo, as master trustee and bond trustee, is represented by Daniel S. Bleck, Esq., and Charles W. Azano, Esq., at Mintz Levin Cohen Ferris Glovsky and Popeo PC; and Robert M. Fishman, Esq., and Allen J. Guon, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC. Sovereign Bank, the letters of credit issuer, is represented by John R. Weiss, Esq., at Duane Morris LLP. Senior Care Development LLC, the DIP Lender, is represented by William S. Fish, Jr., Esq., and Sarah M. Lombard, Esq., at Hinckley Allen & Snyder LLP. CLARE OAKS: Committee Seeks to Employ Neal Wolf as Counsel ---------------------------------------------------------- The Official Committee of Unsecured Creditors of the Chapter 11 case of Clare Oaks asks the U.S. Bankruptcy Court for the Northern District of Illinois for authority to retain Neal Wolf & Associates, LLC, as counsel effective as of Dec. 19, 2011. As Committee's counsel, NW&A will, among other things: (a) consult with the Debtor's professionals or other representative concerning the administration of the case; (b) prepare and review pleadings, motions and correspondence; (c) appear at hearings and participating in other proceedings in the case; and (d) provide legal counsel to the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtor, the operation of the Debtor's business, the prepetition indebtedness of the Debtor and any other matters relevant to the case. The customary and proposed hourly rates to be charged by NW&A for the individuals expected to be directly involved in representing the Committee are: Name Title Hourly Rate ---- ----- ----------- Neal L. Wolf Manager and Sole Member $595 Gerald F. Munitz Senior Counsel $595 Dean C. Gramlich Counsel $475 Jordan M. Litwin Associate $325 John A. Benson, Jr. Associate $275 Diane M. Wolski Paralegal/Legal Assistant $150 NW&A has not received any retainer in the case. Neal L. Wolf, manager and sole member of Neal Wolf & Associates, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The Court scheduled a Jan. 31, 2012 hearing on the matter. About Clare Oaks Clare Oaks, an Illinois not-for-profit corporation organized under section 501(c)(3) of the Internal Revenue Code, operates a namesake continuing care retirement community in Bartlett, Illinois. Its members are the Sisters of St. Joseph of the Third Order of St. Francis, a Roman Catholic religious institute, who are elected and serving as the members of the Central Board of the Congregation. Clare Oaks is managed by CRSA/LCS Management LLC, an affiliate of Life Care Services LLC. Clare Oaks filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-48903) on Dec. 5, 2011. Judge Pamela S. Hollis presides over the case. David R. Doyle, Esq., George R. Mesires, Esq., and Patrick F. Ross, Esq., at Ungaretti & Harris LLP, serve as the Debtor's counsel. North Shores Consulting serves as the Debtor's operations consultant. Continuum Development Services and Alvarez & Marsal Healthcare Industry Group LLC serve as advisors. Alvarez & Marsal's Paul Rundell serves as the Chief Restructuring Officer. Sheila King Marketing + Public Relations serves as communications advisors. In its petition, Clare Oaks estimated $100 million to $500 million in assets and debts. The petition was signed by Michael D. Hovde, Jr., president. Wells Fargo, as master trustee and bond trustee, is represented by Daniel S. Bleck, Esq., and Charles W. Azano, Esq., at Mintz Levin Cohen Ferris Glovsky and Popeo PC; and Robert M. Fishman, Esq., and Allen J. Guon, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC. Sovereign Bank, the letters of credit issuer, is represented by John R. Weiss, Esq., at Duane Morris LLP. Senior Care Development LLC, the DIP Lender, is represented by William S. Fish, Jr., Esq., and Sarah M. Lombard, Esq., at Hinckley Allen & Snyder LLP. COATES INTERNATIONAL: Board Approves New Anti-Dilution Plan ----------------------------------------------------------- The board of directors of Coates International, Ltd., consented to a new anti-dilution plan, effective as of Jan. 1, 2012, which replaces a prior anti-dilution plan for George J. Coates, Chairman, President, Chief Executive Officer and majority shareholder, Bernadette Coates, spouse of George J. Coates and Gregory Coates, son of George J. Coates and President, Technology Division. Under the Revised Plan, the Corporation will issue one new share of common stock, par value $0.0001, per share to George J. Coates for each new share of common stock of the Corporation issued to individuals or entities that are not members of, or controlled by, The Coates Family. This anti-dilution provision does not apply to new shares of common stock issued in connection with a public offering of the Corporation's securities or a merger or acquisition. The new anti-dilution program replaces a prior anti-dilution program pursuant to which shares of Series A Preferred Stock, par value $0.001 per share were issued to George J. Coates in order to prevent any dilution of the voting rights percentage by The Coates Family. However, under this prior program, The Coates Family's percentage of Corporate dividends, if any, and liquidation rights were diluted each time the Corporation issued new shares of its common stock. The Corporation has never declared any dividends, and at this time, there are no plans to declare any dividends in the foreseeable future. About Coates International Based in Wall Township, N.J., Coates International, Ltd. (OTC BB: COTE) -- http://www.coatesengine.com/-- was incorporated on August 31, 1988, for the purpose of researching, patenting and manufacturing technology associated with a spherical rotary valve system for internal combustion engines. This technology was developed over a period of 15 years by Mr. George J. Coates, who is the President and Chairman of the Board of the Company. The Coates Spherical Rotary Valve System (CSRV) represents a revolutionary departure from the conventional poppet valve. It changes the means of delivering the air and fuel mixture to the firing chamber of an internal combustion engine and of expelling the exhaust produced when the mixture ignites. The Company reported a net loss of $1.05 million on $159,000 of sales for the year ended Dec. 31, 2010, compared with a net loss of $806,756 on $0 of sales during the prior year. The Company reported a net loss of $1.89 million on $125,000 of sales for the nine months ended Sept. 30, 2011, compared with a net loss of $546,762 on $0 of sales for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $2.85 million in total assets, $3.91 million in total liabilities, and a $1.06 million total stockholders' deficiency. Meyler & Company, LLC, in Middletown, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company continues to have negative cash flows from operations, recurring losses from operations, and a stockholders' deficiency. CCS CORP: S&P Affirms 'B' Long-Term Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including its 'B' long-term corporate credit rating, on Calgary, Alta.-based CCS Corp. The outlook is stable. The affirmation follows CCS exercising its accordion feature on its term debt. The company will use the proceeds from the C$200 million term loan to pay off borrowings under the revolving credit facility. "The ratings on CCS reflect our view of the company's aggressive debt leverage, management's aggressive financial policy, CCS' participation in the competitive and cyclical oilfield services market, and reliance on its customers' outsourcing requirements," said Standard & Poor's credit analyst Aniki Saha-Yannopoulos. "The ratings also incorporate our assessment of the company's market position in western Canada, stability and predictability in its operating margins, and good diversification throughout its businesses. Pro forma for the refinancing, as of Sept. 30, 2011, it had C$2.2 billion in debt, adjusted for operating leases, derivative liabilities, accrued interest, and other factors." "CCS is an integrated specialized oil and gas waste processing, environmental remediation solutions, and well servicing provider. It operates in five business divisions: Waste Management, which owns and operates treatment, recovery, and disposal facilities, and engineered landfills in Canada; U.S. Environmental and Energy Services, which provides waste management services in that country; Environmental Services, which provides site remediation and decommissioning services and other specialty services; Energy Services, which provides well completion and work-over services; and Energy Marketing, which markets oil for customers in western Canada, including recovered oil volumes from the waste management facilities," S&P said. "The stable outlook reflects Standard & Poor's expectations that strong industry conditions will improve CCS' adjusted debt-to- EBITDA to below 5x by year-end 2012. Despite the company's strong market position in its principal operating segments, the leverage metric is high relative to its overall business risk profile. We regard management's strategy to fund capital expenditure through debt and to delever CCS through EBITDA growth instead of debt reduction as risky. We could lower the ratings if the company doesn't meet our expectations such that debt-to-EBITDA remains above 5.5x by year-end 2012. Also, as we assess CCS' liquidity to be adequate, any deterioration in its liquidity position could also compromise the ratings. We would consider a positive rating action if the debt-to-EBITDA measure stays below 5x, which we consider unlikely through 2012 based on our expectations regarding operating cash flows and spending levels," S&P said. CROWN CASTLE: Moody's Says Land Purchase Doesn't Affect 'Ba2' CFR ----------------------------------------------------------------- Moody's Investors Service said Crown Castle International Corp. ("CCIC)'s announcement that it is purchasing ground lease-related assets from Wireless Capital Partners LLC does not affect the Ba2 Corporate Family rating, the individual debt instrument ratings, SGL-1 speculative-grade liquidity rating, or stable rating outlook. The principal methodology used in rating Crown Castle was the Communications Infrastructure Industry Methodology, published in June 2011. Crown Castle owns, operates, and leases towers and other infrastructure for wireless communications, including nearly 24,000 towers as of Sept. 30, 2011. Revenue for the LTM Sept. 30, 2011 period was approximately $2 billion. CUI GLOBAL: Conveys WayCool and WayFast to Olantra for $500,000 --------------------------------------------------------------- CUI Global, Inc., on Jan. 9, 2012, conveyed its WayCool and WayFast patent portfolio to Olantra Fund X LLC for a cash payment of $500,000. About CUI Global Tualatin, Ore.-based CUI Global, Inc., formerly known as Waytronx, Inc., is a platform company dedicated to maximizing shareholder value through the acquisition, development and commercialization of new, innovative technologies. The Company reported a net loss of $7.5 million on $40.9 million of revenues for 2010, compared with a net loss of $16.0 million on $28.9 million of revenues for 2009. The Company also reported consolidated net profit of $177,961 on $30.14 million of total revenue for the nine months ended Sept. 30, 2011, compared with a consolidated net loss of $3.41 million on $26.28 million of total revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $32.78 million in total assets, $20.07 million in total liabilities, and $12.70 million in total stockholders' equity. As reported by the TCR on April 8, 2011, Webb & Company, in Boynton Beach, Florida, expressed substantial doubt about CUI Global's ability to continue as a going concern. The independent auditors noted that the Company has a net loss of $7,015,896, a working capital deficiency of $675,936 and an accumulated deficit of $73,596,738 at Dec. 31, 2010. DELTA PETROLEUM: Taps Davis Graham as Special Corporate Counsel --------------------------------------------------------------- Delta Petroleum Corporation seeks authority from the Bankruptcy Court to employ Davis Graham & Stubbs LLP as special corporate counsel. Carl Lakey, Delta Petroleum's chief executive officer and president, tells the Court that Davis Graham has served as primary outside corporate counsel to the Debtors since 2006 and has assisted the Debtors in a broad range of corporate matters ranging from debt and equity financing transactions, merger and acquisition transactions, oil and gas and related regulatory matters, corporate governance, securities law compliance, preparation of the Debtors' filings pursuant to the federal securities laws, and other matters. Davis Graham has played a key role in the extensive negotiations with the Debtors, their advisors and various prospective bidders for several months throughout the conduct of Debtors' strategic alternatives process, and has prepared a crucial role in negotiating with bidders to serve as a stalking horse buyer for the Debtors' assets. The Debtors request authority to employ Davis Graham as its special corporate counsel with respect to various matters including, for example, negotiating the Asset Sale, securities law compliance and filings, employment, oil and gas, regulatory and other matters from time to time. Davis Graham may also perform other legal services as are within the scope of the matters on which Davis Graham has been retained that may be necessary and appropriate for the efficient and economical administration of these Chapter 11 Cases. Davis Graham will be paid based on its customary hourly rates, which are periodically adjusted. Davis Graham's billing rates currently range from $275 to $585 per hour for partners, $195 to $335 per hour for associates, and from $160 to $250 per hour for paraprofessionals. Davis Graham has received an advance payment for fees and expenses for services to be performed in preparation for and prosecution of these Chapter 11 Cases. Prior to the Petition Date, Davis Graham applied these advances to amounts due from the Debtors as compensation for professional services performed relating to an out-of-court restructuring of the Debtors' businesses and the potential filing of a voluntary chapter 11 petition, as well as for reimbursement of reasonable and necessary expenses incurred in connection therewith and with other matters involving the Debtors and their subsidiaries. As of the Petition Date, the Debtors paid each of Davis Graham's outstanding invoices for services rendered from the advance payment received and held by Davis Graham. The Debtors assure the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Delta Petroleum Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil and gas company engaged primarily in the exploration for, and the acquisition, development, production, and sale of, natural gas and crude oil. Natural gas comprises over 90% of Delta's production services. The core area of its operations is the Rocky Mountain Region of the United States, where the majority of the proved reserves, production and long-term growth prospects are located. Delta and seven of its subsidiaries sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013, inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31, 2012 scheduled maturity of its $38.5 million secured credit facility with Macquarie Bank Limited and after several months of unsuccessful attempts to sell the business. Delta listed $375,498,248 in assets and $310,679,157 in liabilities, which also include $152,187,500 in outstanding obligations on account of the 7% senior unsecured notes issued in March 2005 with US Bank National Association indenture trustee; and $115,527,083 in outstanding obligations on account of 3-3/4% Senior Convertible Notes due 2037 issued in April 2007. W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A. Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard & Reed LLP, in New York, N.Y., represent the Debtors as counsel. Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights, Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del., represent the Debtors as co-counsel. Conway Mackenzie is the Debtors's restructuring advisor. The Debtors selected Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The petition was signed by Carl E. Lakey, chief executive officer and president. DELTA PETROLEUM: Section 341(a) Meeting of Creditors Tomorrow ------------------------------------------------------------- The U.S. Trustee for Region 3 will convene a meeting of creditors of Delta Petroleum Corporation on Jan. 18, 2012, at 1:30 p.m. The meeting will be held at J. Caleb Boggs Federal Building 844 King Street, 2nd Floor, Room 2112 Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Delta Petroleum Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil and gas company engaged primarily in the exploration for, and the acquisition, development, production, and sale of, natural gas and crude oil. Natural gas comprises over 90% of Delta's production services. The core area of its operations is the Rocky Mountain Region of the United States, where the majority of the proved reserves, production and long-term growth prospects are located. Delta and seven of its subsidiaries sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013, inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31, 2012 scheduled maturity of its $38.5 million secured credit facility with Macquarie Bank Limited and after several months of unsuccessful attempts to sell the business. Delta listed $375,498,248 in assets and $310,679,157 in liabilities, which also include $152,187,500 in outstanding obligations on account of the 7% senior unsecured notes issued in March 2005 with US Bank National Association indenture trustee; and $115,527,083 in outstanding obligations on account of 3-3/4% Senior Convertible Notes due 2037 issued in April 2007. W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A. Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard & Reed LLP, in New York, N.Y., represent the Debtors as counsel. Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights, Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del., represent the Debtors as co-counsel. Conway Mackenzie is the Debtors's restructuring advisor. The Debtors selected Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The petition was signed by Carl E. Lakey, chief executive officer and president. DJSP ENTERPRISES: Kerry Propper Discloses 9.7% Equity Stake ----------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Kerry Propper disclosed that, as of Jan. 3, 2012, he beneficially owns 1,307,082 ordinary shares of DJSP Enterprises, Inc., representing 9.7% of the shares outstanding. A full-text copy of the filing is available at http://is.gd/8YM7jU About DJSP Enterprises Based in Plantation, Florida, DJSP Enterprises, Inc. (Nasdaq: DJSP, DJSPW, DJSPU) provides a wide range of processing services in connection with mortgages, mortgage defaults, title searches and abstracts, REO (bank-owned) properties, loan modifications, title insurance, loss mitigation, bankruptcy, related litigation and other services. Its principal customer is The Law Offices of David J. Stern, P.A. It has additional operations in Louisville, Kentucky and San Juan, Puerto Rico. Its U.S. operations are supported by a scalable, low-cost back office operation in Manila, the Philippines, that provides data entry and document preparation support for its U.S. operations. As reported in the Jan. 20, 2011 edition of the TCR, DAL Group, LLC, a subsidiary of DJSP Enterprises, has obtained waivers on notes held by these parties for payments due through April 1, 2011: Amount of Note -------------- Law Offices of David J. Stern, P.A. $47,869,000 Chardan Capital, LLC, $1,000,000 Chardan Capital Markets, LLC $250,000 Kerry S. Propper $1,500,000 The waivers were sought by DAL as it develops and implements plans to restructure its ongoing operations to reflect its significantly reduced revenues and operations and the other changes. DAL did not make the interest payments due Jan. 3, 2011 for (i) unsecured term notes in the aggregate principal amount of $1,600,000 (ii) and a $500,000 term note issued by Cornix Management, LLC. DAL is seeking waivers from the holders of the unsecured notes and Cornix of principal and interest payments otherwise due under these notes, and the default interest rates under these notes, through April 1, 2011. DAL has entered into a forbearance agreement with BA Note Acquisition, LLC, pursuant to which BNA has agreed to forbear from taking action on a $5.5-million line of credit until March 9, 2011. EASTMAN KODAK: Hogan Lovells Advising UK Pension Trustees --------------------------------------------------------- Caroline Humer and Sue Zeidler, writing for Reuters, report that the law firm of Hogan Lovells LLP is advising Eastman Kodak's UK pension trustees in London. According to Reuters, Kodak could find that one of its costliest problems hails from overseas. Reuters notes that in its 2010 annual report, Kodak disclosed a new obligation to make about $830 million in aggregate payments into its UK pension plan from 2011 through 2022. Unlike its UK counterpart, Kodak's U.S. fund has gotten no such pledges from the company, and as of the end of 2010 was fully funded. Reuters notes the UK Pensions Regulator can seek legal authority under UK law to take aim beyond its borders -- its so-called moral hazard powers -- setting up a scenario in which UK pension interests could be a major factor in any Kodak restructuring. UK pension fund trustees and regulators have increasingly tried, with some success, to maneuver U.S. companies into paying more into underfunded UK plans in recent years. Reuters relates Hogan declined comment on Wednesday. Reuters also reports that Paul Silverstein, Esq., at Andrews Kurth LLP, said there could be "substantial pensions claims" from the UK against Kodak if the company lands in bankruptcy. Mr. Silverstein is advising some Kodak creditors who may have claims against the company. Reuters relates that the UK Pensions Act of 2004 gave the UK Pensions Regulator legal authority to more broadly seek financial support for pensions. If Kodak does file for bankruptcy protection, the Kodak UK pension trustees or UK regulators may try to exert power in the United States, as they have in the bankruptcies of Lehman Brothers, Nortel, Visteon and Sea Containers. Reuters notes that Lehman and Nortel's overseas counterparts currently are involved in a UK case that addresses whether pension fund claims can get priority over other claims in the United States. And, after a UK court said Sea Containers owed money to its UK pension fund, Sea Containers agreed on a settlement that included the company contributing to its UK pension fund. When asked about Kodak on Wednesday, according to Reuters, a spokesman for the UK Pensions Regulator said the office "is aware of the situation and in contact with the Pensions Trustee." The spokesman, Ben Lloyd, declined further comment. Reuters also notes Kodak's overseas pension and benefit obligations have been underfunded for most of the past decade, its annual reports for that time period show. Kodak has employee pension plans in France, for instance, but the UK Pension Regulator is unique in that it has aggressive legal authority to pursue funding claims abroad. Kodak's ties to the UK began in the 1800s and continued in the 1900s. Whole communities were built around the plants, similar to its hometown of Rochester. About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Company (NYSE:EK) -- http://www.kodak.com/-- provides imaging technology products and services to the photographic and graphic communications markets. Kodak's balance sheet at Sept. 30, 2011, showed $5.10 billion in total assets, $6.75 billion in total liabilities and a $1.65 billion total deficit. Kodak had sales of $7.2 billion last year. Sales declined by 24 percent since 2008. The net loss last year was $687 million. During the first nine month of this year, the net loss was $647 million on sales of $4.27 billion. In July 2011, the Company announced that it is exploring strategic alternatives, including a potential sale, related to its digital imaging patent portfolios. Kodak hired Jones Day as legal adviser and investment bank Lazard Ltd., but denied rumors it was filing for bankruptcy. It also enlisted FTI Consulting Inc. In December, Kodak hired Sullivan & Cromwell's restructuring practice, replacing Jones Day. A group of Kodak's bondholders have formed an informal committee and hired law firm Akin Gump Strauss Hauer & Feld LLP for advise. * * * As reported by the TCR on Nov. 3, 2011, Fitch Ratings affirmed and then withdrew the 'CC' long-term Issuer Default Rating and issue ratings of Eastman Kodak Company. Fitch decided to discontinue the rating, which is uncompensated. Moody's Investors Service said in a report Nov. 7, 2011, that Kodak will run out of cash in the U.S. around the second or third quarters of 2012. In the Jan. 9, 2012, edition of the TCR, Standard & Poor's Rating Services lowered its long-term ratings on Rochester, N.Y.-based Eastman Kodak Co. (EK) to 'CCC-' from 'CCC'. "The current rating reflects both our expectation that Kodak's pace of cash consumption will remain high over the near term," said Standard & Poor's credit analyst John Moore, "and a considerable risk that earnings and cash flow will be insufficient to support debt through 2012." Absent a meaningful cash infusion from asset sales or monetization of intellectual property (IP) assets, the company could significantly deplete its liquidity with its 2012 first-half working capital and growth investments. As reported by the TCR on Jan. 9, 2012, Moody's Investors Service lowered all ratings of Eastman Kodak Company, including: the corporate family and probability of default to Caa3 from Caa2, the senior unsecured to Ca from Caa3, the senior secured to Caa1 from B3 and the Speculative Grade Liquidity rating to SGL-4 from SGL-3. The rating downgrade reflects a heightened probability of a bankruptcy over the near term as a result of a deteriorating liquidity outlook, which Moody's believes is posing additional challenges to consummating the sale or licensing agreements of Kodak's key digital patents. The negative outlook reflects Kodak's eroding liquidity position and the higher probability of a bankruptcy filing. EASTMAN KODAK: Sues Fujifilm for Patent Infringement ---------------------------------------------------- Andrew Fitzgerald and Matthew Jarzemsky, writing for Dow Jones' Newswires, report that Eastman Kodak Co. filed a patent- infringement lawsuit Friday against rival Fujifilm Corp., the latest effort by the struggling U.S. imaging company to monetize its intellectual-property portfolio. The complaint, which alleges Fujifilm digital cameras violate five Kodak patents, comes after the Japanese company filed its own suit against Kodak in October. Fujifilm had accused Kodak of infringing on four of its U.S. patents covering image recording and processing technology. "Kodak has long been in discussions with Fujifilm, asking the company to do what more than 30 other companies have done already and take a license for their use of our pioneering digital imaging technology," Kodak intellectual property chief Timothy M. Lynch said in a statement. Dow Jones says a Fujifilm spokeswoman didn't immediately respond to a request for comment Friday. Kodak last week sued Apple Inc. and HTC Corp., alleging violations of patents governing the transmission of photos from devices such as mobile phones and tablets. About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Company (NYSE:EK) -- http://www.kodak.com/-- provides imaging technology products and services to the photographic and graphic communications markets. Kodak's balance sheet at Sept. 30, 2011, showed $5.10 billion in total assets, $6.75 billion in total liabilities and a $1.65 billion total deficit. Kodak had sales of $7.2 billion last year. Sales declined by 24 percent since 2008. The net loss last year was $687 million. During the first nine month of this year, the net loss was $647 million on sales of $4.27 billion. In July 2011, the Company announced that it is exploring strategic alternatives, including a potential sale, related to its digital imaging patent portfolios. Kodak hired Jones Day as legal adviser and investment bank Lazard Ltd., but denied rumors it was filing for bankruptcy. It also enlisted FTI Consulting Inc. In December, Kodak hired Sullivan & Cromwell's restructuring practice, replacing Jones Day. A group of Kodak's bondholders have formed an informal committee and hired law firm Akin Gump Strauss Hauer & Feld LLP for advise. * * * As reported by the TCR on Nov. 3, 2011, Fitch Ratings affirmed and then withdrew the 'CC' long-term Issuer Default Rating and issue ratings of Eastman Kodak Company. Fitch decided to discontinue the rating, which is uncompensated. Moody's Investors Service said in a report Nov. 7, 2011, that Kodak will run out of cash in the U.S. around the second or third quarters of 2012. In the Jan. 9, 2012, edition of the TCR, Standard & Poor's Rating Services lowered its long-term ratings on Rochester, N.Y.-based Eastman Kodak Co. (EK) to 'CCC-' from 'CCC'. "The current rating reflects both our expectation that Kodak's pace of cash consumption will remain high over the near term," said Standard & Poor's credit analyst John Moore, "and a considerable risk that earnings and cash flow will be insufficient to support debt through 2012." Absent a meaningful cash infusion from asset sales or monetization of intellectual property (IP) assets, the company could significantly deplete its liquidity with its 2012 first-half working capital and growth investments. As reported by the TCR on Jan. 9, 2012, Moody's Investors Service lowered all ratings of Eastman Kodak Company, including: the corporate family and probability of default to Caa3 from Caa2, the senior unsecured to Ca from Caa3, the senior secured to Caa1 from B3 and the Speculative Grade Liquidity rating to SGL-4 from SGL-3. The rating downgrade reflects a heightened probability of a bankruptcy over the near term as a result of a deteriorating liquidity outlook, which Moody's believes is posing additional challenges to consummating the sale or licensing agreements of Kodak's key digital patents. The negative outlook reflects Kodak's eroding liquidity position and the higher probability of a bankruptcy filing. ENEA SQUARE: Can Use NUCP Cash Collateral to Pay Taxes ------------------------------------------------------ On Dec. 7, 2011, U.S. Bankruptcy Judge Roger L. Efremsky approved a stipulation of secured creditor NUCP Fund I, LLC, and debtor-in- possession Enea Square Partners LP authorizing Debtor to use NUCP's cash collateral to pay the Dec. 10, 2011 installment of real property taxes referring to the real property and improvement located located at 1450 Enea Circle, 1465D Enea Circle, 1465E Enea Circle, 1485 Enea Court, and 1470 Enea Circle, all in Concord, California. The Debtor is directed to disburse $74,448 to the Assessor - Tax Collector of Contra Costa County, California, on account of taxes assessed against the above described real property, which taxes are due and payable on Dec. 10, 2011. About Enea Square Partners Enea Square Partners, LP, is the owner of commercial property including five parcels located in Concord, California. Enea Square filed for Chapter 11 protection (Bankr. N.D. Calif. Case No. 11-44888) on May 4, 2011. Bankruptcy Judge Roger L. Efremsky presides over the case. Chris D. Kuhner, Esq., and Eric A. Nyberg, Esq., at Kornfield, Nyberg, Bendes & Kuhner, in Oakland, Calif., represent the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million. NUCP Fund I, LLC, asserts a secured claim amounting to $19,500,000. Robert F. Kidd, Esq., at Donahue Gallagher Woods LLP, in Oakland, Calif., represents NUCP Fund I, LLC, as counsel. ENTELOS INC: Clearlake Capital Acquires Controlling Stake --------------------------------------------------------- Dow Jones' DBR Small Cap reports that Clearlake Capital Group acquired a majority stake in Entelos Holding Corp., a developer of software used in clinical research that emerged from Chapter 11 protection in September under the ownership of its previous lender, Imperium Partners Group LLC. Entelos Inc., a developer of software for computer simulation of clinical trials for new drugs, filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-12329) on July 25, 2011, the same day the landlord of the head office was going to court in California seeking eviction. Timothy P. Reiley, Esq., at Reed Smith LLP, in Wilmington, Delaware, serves as counsel to the Debtor. The Debtor estimated assets of up to $10 million and debts of $10 million to $50 million. EXTENDED STAY: Asks to Deny Plea to Dismiss Blackstone Suits ------------------------------------------------------------ Hobart Truesdell, as litigation trustee of Extended Stay affiliates, asked the U.S. Bankruptcy Court for the Southern District of New York to deny motions to dismiss the lawsuits he commenced against Blackstone Group LP and several other defendants. Blackstone and its co-defendants, including Lightstone Group LLC Chairman David Lichtenstein, previously proposed the dismissal of the lawsuits the litigation trustee filed in connection with the leveraged buyout of Extended Stay. The lawsuits have been assigned case numbers 11-02254 and 11-02398. The lawsuits were filed to hold accountable the directors and officers who allegedly breached their duties when they siphoned $1.9 billion in cash from Extended Stay and gave it to Blackstone at the closing, leaving the hotel chain insolvent and unable to pay its debts. The lawsuits also accuse the buyer's directors and officers who allegedly drained more than $100 million in cash from the hotel chain through the continuous payment of illegal dividends and distributions to post-LBO equity holders. Marc Powers, Esq., at Baker & Hostetler LLP, in New York, said the complaints provided sufficient and detailed information about the misconduct of the defendants, when it was committed, their role in the hotel chain and other important information contrary to the defendants' assertion that the complaints do not give them "fair notice of the nature of the facts and legal theories underlying the plaintiffs' claims." "The plaintiffs have amply pled sufficient facts to support that the insider individual and entity defendants owed fiduciary duties of loyalty, care and good faith and breached them, and the professional defendants knowingly and actively participated in those breaches," the lawyer said in court papers. Mr. Powers also said the defendants erroneously contend that the litigation trustee lacks standing to bring the claims. He pointed out that the litigation trustee can prosecute the claims since they belonged to Extended Stay before it filed for bankruptcy protection, they were part of its estate and they had been transferred to the litigation trust. Mr. Powers further said that the identity of the litigation trust's beneficiaries has no effect on the damages that can be recovered in the lawsuits. He pointed out that a significant amount of the LBO debt is now held by "innocent third parties" that purchased that debt after the buyout and had nothing to do with the transaction. "Those persons are the primary beneficiaries of the trust, and their participation in a later distribution of the lawsuit recoveries is no bar to this action," Mr. Powers said. Trustee & Blackstone Ink Stipulation In a related development, Mr. Truesdell entered into an agreement to resolve his objection to the non-disclosure of information contained in court papers filed by the Blackstone defendants. The Blackstone defendants earlier filed under seal seven exhibits to their motion to dismiss the complaints. The exhibits reportedly contain confidential information including financial accounts, Extended Stay's business plans and strategy, and terms of a deal negotiated by the defendants. The move was criticized by the litigation trustee, saying the purported confidential commercial information contained in the exhibits has already been made public and cannot cause an unfair advantage to Extended Stay's competitors. The litigation trustee also argued that some of the exhibits do not contain information that is confidential. Pursuant to the parties' recent agreement, the litigation trustee will withdraw his objection without prejudice to renew following a ruling on the motions to dismiss the complaints. The parties also agreed that the first two exhibits may be submitted in redacted format with the redacted portions remaining under seal while three of the exhibits will be unsealed. Moreover, the agreement authorizes the litigation trustee to quote excerpts in two exhibits in support of, or in opposition to, a motion pending before the Bankruptcy Court in one of the lawsuits. A full-text copy of the parties' agreement is available for free at http://bankrupt.com/misc/ESI_StipBlackstoneConfInfo.pdf About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors tapped Gilbert Backenroth, Esq., Mark T. Power, Esq., and Mark S. Indelicato, Esq., at Hahn & Hessen LLP, in New York, as counsel. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. has purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July 2010. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). EXTENDED STAY: Litigation Trustee Opposes Mezzanine Agreement ------------------------------------------------------------- Hobart Truesdell, as litigation trustee for Extended Stay's affiliates, filed court papers opposing the proposed agreement entered into by Bank of America N.A. and other holders of Extended Stay's mezzanine debt. The agreement was hammered out to reconcile the allowed Class 4B mezzanine facilities claims in accordance with the confirmed Chapter 11 plan of reorganization of Extended Stay Inc.'s affiliates. Under the deal, the creditors agreed that the allowed Class 4B mezzanine facilities claims are allowed claims in an aggregate amount of at least $3.3 billion as provided for in the restructuring plan. The move comes after Mr. Truesdell asked for additional time to reconcile the $9.8 billion in claims filed by the mezzanine debt holders with the allowed claims totaling $3.3 billion granted to them under the restructuring plan. In court papers, Michael Connolly, Esq., at Forman Holt Eliades & Ravin LLC, in Paramus, New Jersey, criticized the creditors' assertion that they have reconciled the claims without providing the litigation trustee with documents detailing how those claims were reconciled. The creditors, he added, also did not provide information sufficient for the litigation trustee to acknowledge that the "reconciliation is accurate." Mr. Connolly further said the creditors failed to prove that they are entitled to the principal amounts asserted. "The amount claimed is not even liquidated; it is at least $3.3 billion but could be greatly higher," he said. Mr. Connolly also criticized the creditors for not addressing the resolution of "conflicting claims" filed by other creditors holding a portion of the allowed claims. Baker & Hostetler LLP, another legal counsel hired by Mr. Truesdell, also made a statement supporting the litigation trustee's objection to the proposed agreement. The proposed agreement also drew flak from a group led by Lightstone Holdings LLC and Arbor ESH II, LLC. They argued that the agreement is a "disguised unilateral motion" by a single class of creditors to benefit themselves and in contravention of the confirmed Chapter plan of reorganization. They also complained that Bank of America and the other parties to the agreement have "unilaterally" awarded themselves fees and interests in the agreement, which are not part of their claims under the restructuring plan. About Extended Stay Extended Stay is the largest owner and operator of mid-price extended stay hotels in the United States, holding one of the most geographically diverse portfolios in the lodging sector with properties located across 44 states (including 11 hotels located in New York) and two provinces in Canada. As a result of acquisitions and mergers, Extended Stay's portfolio has expanded to encompass over 680 properties, consisting of hotels directly owned or leased by Extended Stay or one of its affiliates. Extended Stay currently operates five hotel brands: (i) Crossland Economy Studios, (ii) Extended Stay America, (iii) Extended Stay Deluxe, (iv) Homestead Studio Suites, and (v) StudioPLUS Deluxe Studios. Extended Stay Inc. and its affiliates filed for Chapter 11 on June 15, 2009 (Bankr. S.D.N.Y. Case No. 09-13764). Judge James M. Peck handles the case. Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, in New York, represents the Debtors. Lazard Freres & Co. LLC is the Debtors' financial advisors. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors tapped Gilbert Backenroth, Esq., Mark T. Power, Esq., and Mark S. Indelicato, Esq., at Hahn & Hessen LLP, in New York, as counsel. Extended Stay had assets of $7.1 billion and debts of $7.6 billion as of the end of 2008. Extended Stay Inc. in October successfully emerged from Chapter 11 protection. An investment group including Centerbridge Partners, L.P., Paulson & Co. Inc. and Blackstone Real Estate Partners VI, L.P. has purchased 100 percent of the Company for $3.925 billion in connection with the Plan of Reorganization confirmed by the Bankruptcy Court in July 2010. Bankruptcy Creditors' Service, Inc., publishes Extended Stay Bankruptcy News. The newsletter provides gavel-to-gavel coverage of the Chapter 11 proceedings undertaken by Extended Stay Inc. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). FNB UNITED: Amends 10.4 Million Common Shares Offering ------------------------------------------------------ FNB United Corp. filed with the U.S. Securities and Exchange Commission amendment no. 2 to Form S-1 registration statement relating to the offer and sale of up to 10,462,631 shares of the Company's common stock, no par value per share, by Auda Capital IV Co-Investment Fund L.P., Auda Capital IV Co-Investment GmbH & Co. KG, CCF-FNBN, LLC, et al., which includes 22,072 shares of common stock issuable upon exercise of a warrant to purchase common stock issued to the United States Department of the Treasury, or the Treasury, on Oct. 21, 2011. The Company issued the common stock and the Amended TARP Warrant as part of its Recapitalization. The Company is registering the resale of the common stock as required by the exchange agreement the Company entered into with the Treasury and the subscription agreements the Company entered into with the other Selling Shareholders. The Selling Shareholders may sell all or a portion of the common stock from time to time, in amounts, at prices and on terms determined at the time of the offering. The Company will not receive any proceeds from the sale of the common stock by the Selling Shareholders. On Oct. 31, 2011, the Company effected a one-for-one hundred reverse stock split of its common stock. All share numbers and per share prices in this prospectus reflect the one-for-one hundred reverse stock split, unless otherwise indicated. The Company's common stock is traded on The Nasdaq Capital Market, or Nasdaq, under the symbol "FNBN." On Jan. 10, 2012, the closing price of the Company's common stock on Nasdaq was $12.40 per share. A full-text copy of the amended prospectus is available at: http://is.gd/QVLmhs About FNB United Asheboro, N.C.-based FNB United Corp. (Nasdaq:FNBN) is the bank holding company for CommunityOne Bank, N.A., and the bank's subsidiary, Dover Mortgage Company. Opened in 1907, CommunityOne Bank -- http://www.MyYesBank.com/-- operates 45 offices in 38 communities throughout central, southern and western North Carolina. Through these subsidiaries, FNB United offers a complete line of consumer, mortgage and business banking services, including loan, deposit, cash management, wealth management and internet banking services. The Company incurred significant net losses in 2009, which continued in 2010 and 2011, primarily from the higher provisions for loan losses due to the significant level of nonperforming assets and the write-off of goodwill. Dixon Hughes PLLC, in Charlotte, North Carolina, in its independent auditors' report dated March 14, 2011, and attached to the financial statements, noted that the Company continued to incur significant net losses in 2010, primarily from the higher provisions for loan losses due to the significant level of non- performing assets. According to Dixon Hughes, the Company is significantly undercapitalized per regulatory guidelines and has failed to reach capital levels required in the Consent Order issued by the Office of the Comptroller of the Currency in 2010. These matters, the accounting firm maintains, raise substantial doubt about the Company's ability to continue as a going concern. Dixon Hughes also said that FNB United Corp. and Subsidiary has not maintained effective internal control over financial reporting as of Dec. 31, 2010, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company also reported a net loss of $106.61 million on $44.01 million of total interest income for the nine months ended Sept. 30, 2011, compared with a net loss of $83.34 million on $64.40 million of total interest income for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $1.64 billion in total assets, $1.77 billion in total liabilities, and a $129.93 million total shareholders' deficit. Bankruptcy Warning On April 26, 2011, FNB United entered into investment agreements with The Carlyle Group and Oak Hill Capital Partners to recapitalize the Company, as well as a merger agreement with Bank of Granite Corporation. On June 16 and Aug. 4, 2011, the Company entered into subscription agreements with various accredited investors for the purchase and sale of its common stock. Together, the investment agreements with Carlyle and Oak Hill Capital and the subscription agreements contemplate the issuance of $310 million of common stock of the Company at $0.16 per share. Completion of the recapitalization, including the sale of common stock to The Carlyle Group and Oak Hill Capital Partners and the other investors, is subject to various conditions, certain of which are outside of the Company's control and may not be satisfied. The closing conditions to the recapitalization include receipt of requisite regulatory approvals and other customary closing conditions. No assurance can be given that all conditions will be satisfied timely or at all. The Company said if it fails to consummate the recapitalization, it is expected it will not be able to continue as a going concern, it may file for bankruptcy and the Bank may be placed into FDIC receivership. The equity financing transaction, if completed, will result in substantial dilution to the Company's current shareholders and could adversely affect the market price of the Company's common stock. GATEWAY METRO: Can Access Cash Collateral Until Jan. 27 ------------------------------------------------------- Gateway Metro Center, LLC, has received authorization for the U.S. Bankruptcy Court for the Central District of California to continue using Road Bay Investments, LLC's and Flying Tigers, LLC's cash collateral to pay actual and necessary expenses in accordance with a budget, through and including Jan. 27, 2012. All other terms and provisions of the Oct. 3, 2011 Order will remain in full force and effect, except that Paragraph K of the October 3rd Order regarding payments to the Debtor's accountant, Skeehan & Company, is amended to replace the reference to $900 with $1,100 as set forth in the Budget. A copy of the approved budget is available for free at: http://bankrupt.com/misc/gatewaymetro.doc111.pdf As reported in the TCR on Oct. 14, 2011, the Bankruptcy Court on Oct. 3, 2011, authorized the Debtor, on a final basis, to use cash collateral of Road Bay and Flying Tigers to pay actual expenses in accordance with a budget. In the event that the Debtor procures new tenants for Gateway Metro Center, lenders agree that the Debtor will be allowed to pay leasing commissions and/or tenant improvement costs up to $10,000 per month in the aggregate. As adequate protection for any diminution in the value of the lenders' interest in collateral caused by the Debtor's use of cash collateral, the Lenders are granted Replacement Liens upon all categories of property of the Debtor and its estate. To the extent that the replacement liens are insufficient to adequately protect any interest of the lenders, the Lenders are granted a superpriority administrative expense claim and all of the benefits and protections allowable under Section 507(b) of the Bankruptcy Code, provided, that the superpriority administrative expense claim granted to Flying Tigers will be subordinated to the superpriority administrative expense claim of Road Bay. In accordance with the Budget, the Debtor is authorized to: a. make adequate protection payments to M-Theory in the amount of $117 per month; b. reimburse John F. Pipia, President, and Betty W. Ma, Senior Vice President and Secretary, for reasonable, actual out-of-pocket expenses of up to $500 per month; c. reimburse Pacific Starr Group, LLC, up to $803 per month for allocated overhead expenses and reasonable, actual out-of-pocket expenses; and c. pay Skeehan & Company, proposed accountant, the amount of $900 during the term of the Budget in accordance with the Budget and the Order, subject to Court approval of the Skeehan application. About Gateway Metro Center Gateway Metro Center LLC, is a California limited liability company whose primary assets include (1) an approximately 121,462 square foot - 11 story office building and land located in the City of Pasadena, California ("Gateway Metro Center" formerly known as Gateway Tower) including rights to further develop the land on which the Gateway Metro Center is located, and (2) an approximately 8,000 square feet parcel of land immediately abutting the office building. The Company filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 11-47919) on Sept. 6, 2011. Judge Barry Russell presides over the case. Howard J. Weg, Esq., and Lorie A. Ball, Esq., at Peitzman, Weg & Kempinsky LLP, in Los Angeles, California, represent the Debtors. Skeehan & Company serves as accountant to the Debtor. FTI Consulting, Inc., is the financial advisor to the Debtor. Colliers International, Inc. acts as leasing broker. In its schedules, the Debtor disclosed $32,570,485 in assets and $22,338,135 in debts. The petition was signed by John F. Pipia, its president. GIORDANO'S ENTERPRISES: Expansion of F&P Services Approved ---------------------------------------------------------- Philip V. Martino, the duly appointed Chapter 11 trustee for Giordano's Enterprises, Inc., sought and obtained the approval of the U.S. Bankruptcy Court for the Northern District of Illinois to expand the currently-authorized retention of Freeborn & Peters LLP. On March 17, 2011, the Court entered an order authorizing the Official Committee of Unsecured Creditors to retain Freeborn & Peters as its counsel. The Court authorized Freeborn & Peters to prepare, file, and prosecute a complaint against John Apostolou, Eva Apostolou, and their respective trusts for an alleged breach of fiduciary duty and related causes of action in connection with their ownership and management of the Debtors. The Committee has agreed to the expansion of Freeborn & Peters' responsibilities. The fees and expenses of Freeborn & Peters in representing the Consolidated Estate including the Apostolou Suit, will be paid as provided in the Freeborn & Peters Application and the Retention Order. The hourly rates of the firm's professionals are: Designations Hourly Rates ------------ ------------ New Associates $250 Senior Partners $735 Paraprofessionals $205-$250 About Giordano's Enterprises Chicago, Illinois-based Giordano's Enterprises, Inc., was founded in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren and Joseph Boglio. In 1988, John and Eva Apostolou purchased control of Giordano's. Although this casual dining eatery offers a broad array of fine Italian cuisine, it is primarily know for its "Chicago's World Famous Stuffed Pizza". At present, Giordano's operates six company owned stores in Chicagoland, four joint venture stores, and thirty-five franchisee locations. In addition, Giordano's operates Americana Foods, Inc., located in Mount Prospect, Illinois, that serves as the commissary for the majority of food products purchased by the Illinois locations. An affiliated real estate holding company, Randolph Partners, LP, owns 12 restaurant buildings that are leased to four of the company-owned locations, two of the joint venture locations and six of the franchisee locations. The other 33 locations are leased from third party landlords; two for the Giordano's locations, two for the joint venture locations and 29 for the franchise locations. Giordano's is the lessee and subleases the restaurant facility for 22 of the 29 franchise third party leases. JBA Equipment Finance, Inc, another affiliated entity, leases restaurant equipment packages to eight franchisee locations. Giordano's Enterprises and 26 affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on Feb. 16, 2011. Six additional affiliates filed for Chapter 11 protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A. Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at Arnstein & Lehr, LLP, in Chicago, serve as the Debtors' bankruptcy counsel. Giordano's Enterprises disclosed $59,387 in assets and $45,538,574 in liabilities as of the Chapter 11 filing. Certain of the Debtors owe Fifth Third Bank not than $13,560,662, pursuant to loans and financial accommodations, and $31,927,998 under a business loan as of the Petition Date. Fifth Third has agreed to provide DIP financing of up to $35,983,563 to the Debtors. Philip V. Martino was appointed as Chapter 11 trustee in the Debtors' bankruptcy cases, at the behest of the U.S. Trustee. Mr. Martino filed a $3,000,000 bond. GRAY TELEVISION: R. Beizer to Retire as VP for Law & Development ---------------------------------------------------------------- Gray Television, Inc., announced that Robert A. Beizer, the Company's Vice President for Law and Development and Secretary, will retire effective Feb. 29, 2012. Kevin P. Latek, a partner in the Washington, DC, office of Dow Lohnes PLLC who has significant experience representing broadcasting companies, will join the Company as Vice President Law and Development and succeed Mr. Beizer effective March 1, 2012. About Gray Television Formerly known as Gray Communications System, Atlanta, Georgia- based Gray Television, Inc., is a television broadcast company. Gray currently operates 36 television stations serving 30 markets. Each of the stations are affiliated with either CBS (17 stations), NBC (10 stations), ABC (8 stations) or FOX (1 station). In addition, Gray currently operates 38 digital second channels including 1 ABC, 4 Fox, 7 CW, 16 MyNetworkTV and 1 Universal Sports Network affiliates plus 8 local news/weather channels and 1 "independent" channel in certain of its existing markets. The Company's balance sheet at Sept. 30, 2011, showed $1.23 billion in total assets, $1.08 billion in total liabilities, $31.33 million in preferred stock and $125.45 million in total stockholders' equity. * * * Gray Television carries 'B-' issuer credit ratings, with stable outlook, from Standard & Poor's and 'Caa1' corporate family rating and probability of default rating, with stable outlook, from Moody's. "Moody's views the company's current level of financial leverage, as exacerbated by a concentrated maturity profile, to be unsustainable for a TV broadcaster and indicative of elevated restructuring risk over the longer-term," said Moody's Russell Solomon, Senior Vice President, in April 2010. Pro forma for the pending transaction, all of Gray's debt (including its debt-like Series D Preferred Stock) comes due in 2014-2015. Moody's believes Gray will need to significantly reduce its debt with free cash flow and will probably need to issue additional equity in order to further moderate its leverage profile over the next few years prior to accessing the capital markets again to refinance current obligations. The Caa1 CFR incorporates Moody's view that leverage will remain excessive over at least the next two years. GREAT PLAINS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Great Plains Exploration, LLC 8500 Station Street, Suite 113 Mentor, OH 44060 Bankruptcy Case No.: 12-10058 Chapter 11 Petition Date: January 11, 2012 Court: United States Bankruptcy Court Western District of Pennsylvania (Erie) Judge: Thomas P. Agresti Debtor's Counsel: Robert S. Bernstein, Esq. BERNSTEIN LAW FIRM, P.C. 2200 Gulf Tower Pittsburgh, PA 15219 Tel: (412) 456-8101 Fax: (412) 456-8251 E-mail: rbernstein@bernsteinlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Richard M. Osborne, CEO. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Oz Gas, LTD 12-10057 01/11/12 Assets: $10,000,001 to $50,000,000 Debts: $10,000,001 to $50,000,000 Great Plains's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Orwell-Trumbull Pipeline Trade debt $364,089 Company 3511 Lost Nation Rd. Suite 113 Willoughby, OH 44094 Big Oats Oil Field Trade debt $65,352 Supply 38700 Pelton Road Willoughby, OH 44094 Westfield Insurance Insurance $48,712 P.O. Box 9001566 Louisville, KY 40290 Quality Boring & Trade debt $43,699 Excavating PCO Mayfield, Ltd. Trade debt $41,819 Standard Funding Corp. Trade debt $39,140 Lake Hospital Foundation Trade debt $25,565 Newell Creek Preserve, Trade debt $17,134 LLC Madison, R.E. Developers, Trade debt $16,641 LLC AGCS Marine Insurance Trade debt $14,452 Company GEO Services Trade debt $11,760 Typro Ltd. Trade debt $10,923 GE Capital Trade debt $7,221 Newell Creek Development Trade debt $5,363 Company J.R. Smail, Inc. Trade debt $5,066 W&W Construction Trade debt $4,940 Steve Calabrese Royalty payment $4,884 Inglewood Associates, Consulting services $4,487 LLC Hoover Oil Field Trade debt $3,914 Supply CAPCO Trade debt $3,724 Oz Gas's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Burgleigh Drilling, Inc. Trade debt $24,725 10170 Oil Creek Road Grand Valley, PA 16420 Big Oat's Oil Field Trade debt $20,306 Supply, Co. 38700 Pelton Road Willoughby, OH 44094 Pennsylvania Brine Trade debt $8,764 Treatment 5148 US 322 Franklin, PA 16323 Hess & Associates Trade debt $7,356 Engineering, Inc. AGCS Marine Insurance Trade debt $7,226 Company Hawker Beechcraft Trade debt $6,904 Corporation Westfield Insurance Insurance $6,386 Turbine Storage LLC Trade debt $5,409 Warren Electric Coop Utility $3,040 Microbac Laboratories, Trade debt $2,389 Inc. Collins Pine Company Trade debt $2,000 Barnhart-Davis Co. Trade debt $1,665 Good Tire Service, Inc. Trade debt $1,373 John Deere Financial Trade debt $966 Richard L. Gray Trade debt $755 Test Trust Verizon Utility $648 Tidioute Oil Company Trade debt $522 WSI Corporation Trade debt $504 Directv Utility $409 Highmark Blue Cross Trade debt $361 Blue Shield HATHOR EXPLORATION: Confirms Notices of Compulsory Acquisition -------------------------------------------------------------- Hathor Exploration Limited confirms that, further to Hathor's news release dated Jan. 9, 2012, notices of compulsory acquisition under the Canada Business Corporations Act were mailed by RT Acquisition Corporation, an indirect wholly-owned subsidiary of Rio Tinto plc, to holders of Hathor common shares who did not deposit such shares to the offer made by Rio Tinto to acquire all of the outstanding Hathor common shares. The Offer expired at 5:00 p.m. EST on Jan. 6, 2012. On Jan. 11, 2012, Rio Tinto acquired the remaining 7,944,151 Hathor common shares not deposited to the Offer, representing approximately 5.87% of the outstanding Hathor common shares on a fully-diluted basis, pursuant to the Compulsory Acquisition. Consequently, Rio Tinto is now the registered holder of 135,290,661 Hathor common shares, representing 100% of the outstanding common shares of Hathor on a fully-diluted basis. Accordingly, it is anticipated that the Hathor common shares will be delisted from the Toronto Stock Exchange effective at the close of business on Jan. 12, 2012. Subsequent to the delisting from the Toronto Stock Exchange, applications will be made by Hathor to the relevant securities commissions for Hathor to cease to be a reporting issuer in all applicable Canadian jurisdictions. HOSTESS BRANDS: Receives Court Approval of First Day Motions ------------------------------------------------------------ Hostess Brands Inc. received court authority to enter into a $75 million debtor-in-possession financing facility and access $35 million of it until a hearing scheduled for Jan. 26, 2012 for further approval for the DIP. This enables the Company to continue routine operations while undertaking a comprehensive financial and operational restructuring. The financing is being provided by a group of the Company's existing first-lien lenders, led by Silver Point Capital, L.P. The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York also authorized the continuation of wages for employees without interruption and maintenance of all customer programs, among other things. "The motions granted will ensure that Hostess continues its operations without any disruptions so that its products will remain available and on store shelves everywhere," said Brian Driscoll, president and chief executive officer. "With the access to the DIP financing, Hostess will continue to provide wages and benefits to our employees and payments to suppliers going forward." The Court also approved the procedures motion to establish a timeline for motions under Sections 1113 and 1114 of the Bankruptcy Code to address its labor issues. The Court observed that Hostess was focused on completing a successful reorganization and not on selling all or portions of the Company. "The Company is strongly committed to continuing its good faith bargaining with its unions and we remain hopeful that we can reach a consensual agreement on the terms of our labor contracts before filing 1113 and 1114 motions," said Mr. Driscoll. About Hostess Brands Founded in 1930 and based in Irving, Texas, the Company's products include iconic brands such as Butternut(R), Ding Dongs(R), Dolly Madison(R), Drake's(R), Home Pride(R), Ho Hos(R), Hostess(R), Merita(R), Nature's Pride(R), Twinkies(R) and Wonder(R). Hostess Brands has approximately 19,000 employees and operates 36 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States. Hostess Brands Inc. and its affiliates filed for creditor protection under Chapter 11 of the Bankruptcy Code early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Lead Case No. 12-22052) in White Plains, New York. Two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Miss. Case No. 04- 45814), the new owners have pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The Debtors have tapped Jones Day as counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, and Kurtzman Carson Consultants LLC as administrative agent. In order to successfully restructure, Hostess Brands says it must sit down with 12 unions at the bargaining table and dramatically overhaul nearly 400 employment agreements in a bid to boost its competitiveness. HOSTESS BRANDS: Union Woes Claim "Offensive", Says BCTGM -------------------------------------------------------- The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), representing more than 5,000 workers at Hostess Brands, says its legal and financial team, under the direction of International President Frank Hurt, has been working with Hostess for months to identify an amenable resolution that would address the company's financial difficulties. Throughout this process, the company has never provided the Union with a legitimate proposal that could be taken to the membership for consideration. In commenting on the company's bankruptcy filing, Hurt states, "We are very concerned for the jobs and well being of our members employed at Hostess. We had hoped that the company would emerge from the last restructuring stronger and more competitive. Our members sacrificed a great deal to try and save the company the last time. "I find it deeply offensive and highly disingenuous for the company to claim that its financial woes are the result of its union contracts and pension and health benefits obligations. We contend that the company is in dire financial shape because of a string of failed business decisions made by a series of ineffective executives who have been running this company for the past decade. "The BCTGM has contracts with dozens of baking companies across the country including Bimbo Bakeries USA, the nation's largest and most successful. The vast majority of those companies are doing just fine because they have experienced baking industry professionals managing them." Hurt points out that the company's portrayal in the media of its pension obligation problems was very misleading. Hostess Brands had been a longstanding participant in the industry's Taft-Hartley multi-employer pension fund. The nearly $1 billion dollars the company refers to is its withdrawal liability. Every participant in a Taft-Hartley fund has withdrawal liability which ensures that beneficiaries will receive negotiated pension benefits if a company leaves the fund. The contributions Hostess had paid into the Fund were negotiated through the collective bargaining process and are part of an overall economic compensation package. Pension benefits that retirees receive each month are paid by the Fund and not the individual companies. "We remain hopeful that solutions can be found to ensure the permanent continuation of Hostess Brands. We will work with the stakeholders throughout the process to find a solution that protects the interests of our members and helps enable the company to remain a viable business entity," Hurt concludes. BCTGM members produce Hostess Brands products in 34 production facilities throughout the U.S. The Union also represents workers in thrift stores and depots. About Hostess Brands Founded in 1930 and based in Irving, Texas, the Company's products include iconic brands such as Butternut(R), Ding Dongs(R), Dolly Madison(R), Drake's(R), Home Pride(R), Ho Hos(R), Hostess(R), Merita(R), Nature's Pride(R), Twinkies(R) and Wonder(R). Hostess Brands has approximately 19,000 employees and operates 36 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States. Hostess Brands Inc. and its affiliates filed for creditor protection under Chapter 11 of the Bankruptcy Code early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Lead Case No. 12-22052) in White Plains, New York. Two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Miss. Case No. 04- 45814), the new owners have pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The Debtors have tapped Jones Day as counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, and Kurtzman Carson Consultants LLC as administrative agent. In order to successfully restructure, Hostess Brands says it must sit down with 12 unions at the bargaining table and dramatically overhaul nearly 400 employment agreements in a bid to boost its competitiveness. INNER CITY: Gets OK to Auction Assets With Lead Bid From Lenders ---------------------------------------------------------------- Dow Jones' DBR Small Cap reports that urban radio-station operator Inner City Media Corp. has secured bankruptcy-court approval to auction its assets, with its lenders kicking off bidding. About Inner City On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit Facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. INTEGRATED BIOPHARMA: Imperium Forbearance Extended to Jan. 20 -------------------------------------------------------------- Integrated Biopharma, Inc., entered into a letter agreement, dated Jan. 9, 2012, by Imperium Advisers, LLC, as Collateral Agent on behalf of Investors, and addressed to and acknowledged, accepted and agreed to by the Company. The Third Amendment amended the Forbearance Agreement, dated as of Oct. 4, 2011, by and between the Company and the Collateral Agent, to (i) extend the termination date of the Forbearance Agreement to Jan. 12, 2012, and (ii) provide that any interest payments due and payable to the Collateral Agent by the Company through Jan. 12, 2012, pursuant to the terms of the 8% Senior Securities Notes of the Company will accrue and be due and payable on Jan. 13, 2012. On Jan. 11, 2012, the Company entered into a letter agreement, dated Jan. 11, 2012, by the Collateral Agent, and addressed to and acknowledged, accepted and agreed to by the Company. The Fourth Amendment amended the Forbearance Agreement to (i) extend the termination date of the Forbearance Agreement to Jan. 20, 2012, and (ii) provide that any interest payments due and payable to the Collateral Agent by the Company through Jan. 20, 2012, pursuant to the terms of the 8% Senior Secured Notes of the Company shall accrue and be due and payable on Jan. 21, 2012. About Integrated BioPharma Based in Hillside, N.J., Integrated BioPharma, Inc. (INBP.OB) -- -- http://www.healthproductscorp.us/ -- is engaged primarily in manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products. The Company's customers are located primarily in the United States. The Company was previously known as Integrated Health Technologies, Inc., and, prior to that, as Chem International, Inc. The Company was reincorporated in its current form in Delaware in 1995. The Company continues to do business as Chem International, Inc., with certain of its customers and certain vendors. The Company reported a net loss of $2.28 million on $25.13 million of net sales for the fiscal year ended June 30, 2011, compared with a net loss of $5.53 million on $20.16 million of net sales during the prior fiscal year. The Company's balance sheet at Sept. 30, 2011, showed $13.41 million in total assets, $20.73 million in total liabilities, all current, and a $7.32 million total stockholders' deficiency. Friedman, LLP, in East Hanover, NJ, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a working capital deficiency, recurring net losses and has defaulted on its debt obligations. INTERNATIONAL MEDIA: Seeks to Hire Epiq as Claims Agent ------------------------------------------------------- International Media Group Inc. and its affiliated debtors seek Bankruptcy Court permission to employ Epiq Bankruptcy Solutions LLC as their notice and claims agent. The Debtors said the size of their creditor and interested party body makes it impracticable for them to, without assistance, undertake the task of sending notices to creditors and other parties-in-interest. The Debtors anticipate that there will be in excess of 1,200 entities to be noticed in these Chapter 11 cases. Epiq holds a $15,000 retainer from the Debtors. Edward J. Kosmowski attests that (a) Epiq is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code; (b) Epiq holds no interest materially adverse to the Debtors and their estates with respect to matters that the Debtors seek to employ Epiq to handle; and (c) Epiq has no material connection to the Debtors, their creditors or related parties. About International Media Group International Media Group Inc. and its affiliates operate television station KSCI-TV (Channel 18) Long Beach, California; KUAN-LP (Channel 48) Poway, California; and KIKU-TV (Channel 19) Honolulu, Hawaii. KSCI, KUAN and KIKU focus primarily on the large Asian markets of Southern California and Hawaii and offer programming in six (6) main languages -- (i) Chinese; (ii) Korean; (iii) Tagalog (Filipino); (iv) Vietnamese; (v) English; and (vi) Japanese. The Television Stations' programming is a mix of locally produced original news, entertainment, and talk shows, purchased or syndicated foreign language programming, and paid programming comprised principally of infomercials, per-inquiry and direct response television advertisements. KHAI Inc. owns all of the equity of KHLS Inc., which holds the FCC license for KIKU-TV (Channel 19). KSCI Inc. owns all of the equity of KHAI and of KSLS Inc., which holds the FCC license for KSCI-TV (Channel 18) and KUANLP (Channel 48). International Media Group Inc. owns all of the equity of KSCI. AMG Intermediate LLC owns all of the equity of IMG, and AsianMedia Group LLC owns all of the equity of AMG. Non-debtor AsianMedia Investors I L.P. owns all of the equity of AsianMedia. International Media Group and six affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-10140) on Jan. 9, 2012, with the intent to sell their business as a going concern under 11 U.S.C. Sec. 363(a). NRJ TV II LLC, an entity owned by the first lien lender, will be the stalking horse bidder. As of Jan. 9, 2012, the Debtors owe $77.3 million on a first lien debt, including $67 million on a term-loan. Fortress Credit Corp. serves as agent. Unless outbid at the auction, the prepetition lenders will acquire the assets in exchange for a credit bid of $45 million, will assume certain liabilities, and fund a "carve-out". An auction and sale hearing is contemplated to be held in March. Judge Mary F. Walrath oversees the Debtors' cases. International Media Group tapped Houlihan Lokey Capital, Inc., in October to market the assets. Houlihan will continue marketing the assets postpetition. Landis Rath & Cobb LLP serves as the Debtors' bankruptcy counsel. In its petition, International Media Group estimated $100 million to $500 million in assets and debts. The petition was signed by Dennis J. Davis, chief restructuring officer. INTERNATIONAL MEDIA: Taps Landis Rath as Bankruptcy Counsel ----------------------------------------------------------- International Media Group Inc. and its affiliates seek Bankruptcy Court authority to hire Landis Rath & Cobb LLP as their bankruptcy counsel. LRC partner William E. Chipman, Jr., and associate Mark D. Olivere will be involved in the case. The current rates of LRC partners range from $475 to $720 per hour; associates range fro $325 to $430 per hour; paralegals range from $210 to $230 per hour and legal assistants range from $100 to $130 per hour. Between Oct. 7, 2011 and Jan. 5, 2012, LRC received $140,517 from the Debtors as advanced fee retainers. Mr. Chipman attests that LRC is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code and does not hold or represent an interest adverse to the Debtors. About International Media Group International Media Group Inc. and its affiliates operate television station KSCI-TV (Channel 18) Long Beach, California; KUAN-LP (Channel 48) Poway, California; and KIKU-TV (Channel 19) Honolulu, Hawaii. KSCI, KUAN and KIKU focus primarily on the large Asian markets of Southern California and Hawaii and offer programming in six (6) main languages -- (i) Chinese; (ii) Korean; (iii) Tagalog (Filipino); (iv) Vietnamese; (v) English; and (vi) Japanese. The Television Stations' programming is a mix of locally produced original news, entertainment, and talk shows, purchased or syndicated foreign language programming, and paid programming comprised principally of infomercials, per-inquiry and direct response television advertisements. KHAI Inc. owns all of the equity of KHLS Inc., which holds the FCC license for KIKU-TV (Channel 19). KSCI Inc. owns all of the equity of KHAI and of KSLS Inc., which holds the FCC license for KSCI-TV (Channel 18) and KUANLP (Channel 48). International Media Group Inc. owns all of the equity of KSCI. AMG Intermediate LLC owns all of the equity of IMG, and AsianMedia Group LLC owns all of the equity of AMG. Non-debtor AsianMedia Investors I L.P. owns all of the equity of AsianMedia. International Media Group and six affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-10140) on Jan. 9, 2012, with the intent to sell their business as a going concern under 11 U.S.C. Sec. 363(a). NRJ TV II LLC, an entity owned by the first lien lender, will be the stalking horse bidder. As of Jan. 9, 2012, the Debtors owe $77.3 million on a first lien debt, including $67 million on a term-loan. Fortress Credit Corp. serves as agent. Unless outbid at the auction, the prepetition lenders will acquire the assets in exchange for a credit bid of $45 million, will assume certain liabilities, and fund a "carve-out". An auction and sale hearing is contemplated to be held in March. Judge Mary F. Walrath oversees the Debtors' cases. International Media Group tapped Houlihan Lokey Capital, Inc., in October to market the assets. Houlihan will continue marketing the assets postpetition. Epiq Bankruptcy Solutions LLC is the claims and notice agent. In its petition, International Media Group estimated $100 million to $500 million in assets and debts. The petition was signed by Dennis J. Davis, chief restructuring officer. JAZARCO INTERNATIONAL: Sec. 341 Creditors' Meeting Set for Feb. 7 ----------------------------------------------------------------- The U.S. Trustee in Phoenix, Arizona, will hold a Meeting of Creditors in the Chapter 11 case of Jazarco International LLC pursuant to Sec. 341 of the Bankruptcy Code on Feb. 7, 2012, at 12:00 p.m. at US Trustee Meeting Room, 230 N. First Avenue, Suite 102, in Phoenix. Jazarco International LLC, aka Jazarco International Trust, based in Apache Junction, Arizona, filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 12-00161) on Jan. 5, 2012. Chief Judge James M. Marlar presides over the case. Ian D. Quinn, Esq., at QuinnLaw PLLC, serves as the Debtor's counsel. In its petition, the Debtor estimated $500 million to $1 billion in assets and $1 million to $10 million in debts. JCK HOTELS: Can Hire Sook Hyun as Exclusive Financial Advisor ------------------------------------------------------------- JCK Hotels, LLC, sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of California to employ Sook Hyun Cho, CPA, as its exclusive financial advisor. This is the Debtor's second application to employ a financial advisor. The Court previously authorized the employment of Dae Hyun Kim, CPA & Associates, as the Debtor's financial advisor. The firm is comprised of a single professional, Sook Hyun Cho. Mr. Cho is a certified public accountant, and has represented the Debtor since approximately July of 2009. Between July 2009 and approximately Nov. 15, 2011, Mr. Cho represented the Debtor as its CPA and financial advisor while working at Dae Hyun Kim, CPA & Associates. Mr. Cho no longer is employed with Dae Hyun Kim, CPA & Associates. Sook Hyun will: (a) assist in the preparation of monthly operating reports for the Debtor; (b) provide corporate and partnership tax projections; (c) advise the Debtor regarding financial and business matters; (d) conduct an analysis of the Debtor's business and analysis of its financial records; (e) conduct an analysis of the Debtor's business model; (f) prepare budgets and financial projections required by creditors and the United States Trustee; and (g) perform other services that require financial, operational, or business expertise that Debtor may require in connection with the Chapter 11 case and with Debtor's plan of reorganization. Mr. Cho will charge the Debtor $1,000 per month for his services plus reimbursement of expenses. The Debtor believes that Mr. Cho is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About JCK Hotels, LLC JCK Hotels, LLC, fka Mira Mesa Hotels, LLC, operates the Holiday Inn Express Mira Mesa Hotel and the Comfort Suites Mira Mesa Hotel in San Diego, California. The Hotels are operated under licensing and franchise agreements with Holiday Inn Express and Comfort Suites. JCK Hotels filed for Chapter 11 bankruptcy (Bankr. S.D. Calif. Case No. 11-09428) on June 3, 2011. Judge Louise DeCarl Adler presides over the case. William M. Rathbone, Esq., and Daniel C. Silva, Esq., at Gordon & Rees LLP, in San Diego, Calif., serve as bankruptcy counsel. The Debtor tapped Dae Hyun Kim, CPA & Associates as financial advisor. While no formal appraisal has been done recently, the Debtor believes the fair market value of both Hotels exceeds $18 million. The Debtor disclosed $19,611,552 in assets and $14,974,079 in liabilities as of the Chapter 11 filing. The petition was signed by Charles Jung, managing member. Tiffany L. Carroll, Acting United States Trustee for Region 16, under 11 U.S.C. Sec. 1102(a) and (b), appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of JCK Hotels, LLC. LACK'S STORES: Has Until March 1 to Solicit Plan Acceptances ------------------------------------------------------------ The Hon. Jeff Bohm of the U.S. Bankruptcy Court for the Southern District of Texas extended until March 1, 2012, Lack's Stores, Incorporated, et al.'s exclusive period to solicit acceptances for the proposed Chapter 11 Plan of Reorganization. As reported in the Troubled Company Reporter on Oct. 17, 2011, the Plan is designed to accomplish three primary objectives: (1) the collection of Lack's Customer Notes portfolio in the ordinary course of business; (2) the sale of remaining real and personal property that is not necessary to the continued collection of Customer Notes; and (3) the use of proceeds from collection of Customer Notes and sales of the Debtors' other remaining assets to satisfy Claims in accordance with the Plan. A full-text copy of the Disclosure Statement, dated Oct. 5, is available for free at http://ResearchArchives.com/t/s?772e About Lack's Stores Victoria, Texas-based Lack's Stores, Incorporated, is one of the largest, independently-owned retail furniture chains in the United States. Lack's Stores is a chain of 36 retail stores and operates under the trade styles Lacks and Lacks Home Furnishings. The Company sells a complete line of furnishings for the home including furniture, bedding, major appliances and home electronics. The stores are located in South, Central, and West Texas. Lack's Stores filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 10-60149) on Nov. 16, 2010 . Katherine D. Grissel, Esq., Michaela Christine Crocker, Esq., and Richard H. London, Esq., at Vinson & Elkins LLP, assist the Debtor in its restructuring effort. The Debtor estimated its assets and debts at $100 million to $500 million. Affiliates Lack Properties, Inc., Lack's Furniture Centers, Inc., and Merchandise Acceptance Corporation filed separate Chapter 11 petitions. LEGENDS GAMING: Moody's Cuts Corp. Family Rating to 'Ca' -------------------------------------------------------- Moody's Investors Service lowered Legends Gaming, LLC's Probability of Default Rating (PDR) to Ca/LD from Caa3 and its Corporate Family Rating (CFR) to Ca from Caa3 since the company did not make the interest payment originally due on January 3, 2012 on the first lien bank loan within the grace period. The rating outlook is negative. Ratings downgraded: Corporate Family Rating to Ca from Caa3 Probability of Default Rating to Ca/LD from Caa3 $163.5 million senior secured first lien term loan due 2014 to Caa3 (LGD3, 34% ) from Caa2 (LGD3, 32%) Ratings Rationale The Ca Corporate Family Rating and negative outlook incorporate the high probability of debt impairment within the capital structure given the company's very high debt levels relative to its cash flow generation and asset base. Moody's believes that the company will continue to face negative earnings pressure in the coming year at its two casinos located in Bossier City, LA and Vicksburg, MS due to challenging local economic conditions and increasing competition. DiamondJacks Vicksburg is still dealing with the aftermath of the Mississippi River flooding that occurred earlier this year, while the Bossier City casino will likely face additional competition if a newly proposed casino opens in the next two years. The "/LD" appended to the PDR recognizes a limited default on the 1st lien term loan, in accordance with Moody's default definition. The PDR could be revised to D if a payment default or a distressed exchange were to occur on the entire debt structure, or the company files for Chapter 11 bankruptcy protection. The Corporate Family and first lien credit rating could be lowered if Moody's expectation of recovery further deteriorates. The ratings could be upgraded following a restructuring if a material amount of debt is eliminated, resulting in a more sustainable capital structure or a higher expected recovery rate for debt holders. The principal methodology used in rating Legends Gaming, LLC was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Legends Gaming, LLC, headquartered in Las Vegas, NV, currently owns and operates two gaming properties located in Bossier City, LA and Vicksburg, MS under the DiamondJacks Casino brand. LEHMAN BROTHERS: Settles Lawsuit Against Nomura International ------------------------------------------------------------- Lehman Brothers Holdings Inc. entered into an agreement, which calls for the dismissal of claims asserted in the lawsuit it filed against Nomura International plc, and the withdrawal of its objection to claims of Nomura Global Financial Products Inc. Nomura's claims total about $720 million, which claims stemmed from a derivative swaps agreement. The agreement was entered by the company, Nomura International, Nomura Global, and the Official Committee of Unsecured Creditors. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins Nod to Create No Fund to Pay D&O Defenses --------------------------------------------------------------- Lehman Brothers Holdings Inc. won court approval to create a new fund to pay the defense costs of its current directors and an employee of LAMCO Holdings LLC. The company proposed on November 23 to create a so-called "defense costs fund" to pay the costs incurred in connection with claims against its directors and the LAMCO employee prior to the effective date of its Chapter 11 plan. Pursuant to the court order, LBHI is authorized to advance funds for the defense costs, provided that the defense costs fund won't be replenished once it is exhausted. Any distributions or entitlements that a person may have under the Chapter 11 plan with respect to any indemnification claim that he has filed against the company will be reduced by the amount advanced from the defense costs fund to that person or his legal counsel, according to the order. Creditors Committee Oppose Fund The Official Committee of Unsecured Creditors asked Judge James Peck to deny approval of Lehman Brothers Holdings Inc.'s motion to create a new fund to pay the defense costs of its current directors and an employee of LAMCO Holdings LLC. LBHI proposed on November 23 to create a so-called "defense costs fund" to pay the costs incurred in connection with claims asserted against its directors and the LAMCO employee prior to the effective date of its Chapter 11 plan. Prior to this, the company filed a motion on June 28, to create a fund that would provide up to $2 million for the payment of legal costs of its current directors in lieu of purchasing an additional tail insurance policy. The motion, which was approved by the bankruptcy judge, did not draw opposition from the Creditors Committee. At that time, the Creditors Committee was made to believe that the $2 million was unlikely to be used and, therefore, it would be used by LBHI for any other purpose upon the effective date of its plan. In court papers, Dennis Dunne. Esq., at Milbank Tweed Hadley & McCloy LLP, in New York, said there is certainty that the new fund being proposed by LBHI in its November 23 motion will be utilized because the company's existing directors' and officers' insurance policies have already been exhausted. Mr. Dunne also argued that the Lehman directors will no longer be associated with the company after the effective date, and that providing them with such benefit will not benefit the estate. "The lawyer further said that the purported legal justification for creating the new fund, which is the potential indemnification claims of the defendants and potential difficulty in resolving certain proofs of claim, is not convincing. The indemnification claims asserted by the beneficiaries would be general unsecured claims against LBHI entitled to only a 19.9% distribution under the plan," Mr. Dunne pointed out, adding that those claims may not be entitled to even a small distribution should they be subject to subordination pursuant to a provision in bankruptcy law. Lehman Asks Court to Overrule Objection In court papers, LBHI's lawyer, Richard Krasnow, Esq., at Weil Gotshal & Manges LLP, in New York, asked the bankruptcy judge to overrule the Creditors Committee's objection. Mr. Krasnow said the Creditors Committee fails to give sufficient credence to the impending depletion of the D&O policies that will result in insufficient insurance proceeds to pay the legal fees of the defendants who are facing lawsuits that correlate to proofs of claim filed by the plaintiffs and indemnity claims filed by the defendants in which liabilities are asserted amounting to hundreds of millions of dollars against the company or one of its affiliated debtors. The Creditors Committee also minimizes the impact on Lehman and its estate of adverse judgments against the defendants in the pending lawsuits, and the effect of the indemnity claims. "[Lehman] submits that the proposed $2 million investment in furtherance of efforts to avoid such potential liabilities represents a small fraction of the approximately 20% recoveries that the plaintiffs or the covered persons could realize under the plan if their claims against {Lehman] were ultimately allowed," Mr. Krasnow said. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Ironbridge Homes Seeks Lift Stay ------------------------------------------------- Ironbridge Homes, LLC; Ironbridge Mountain Cottages, LLC; Ironbridge Aspen Collection, LLC; Ironbridge Management LLC; Sunrise Company; Dirk Gosda; Hansen Construction, Inc.; and Steven A. Hansen seek relief from the automatic stay to: (i) assert cross-claims against the Debtors when the Debtors are joined as defendants in a pending Colorado state court lawsuit pursuant to a stipulation among Lehman Brothers Holdings Inc., LB Rose Ranch LLC, PAMI Statler Arms LLC and certain Colorado plaintiffs providing for limited relief from the automatic stay approved by the Court on November 18, 2011; and (ii) assert claims against LB Rose Ranch, LLC, and against LBHI in a state law civil action recently filed in the District Court for Garfield County, State of Colorado, in November 2011 but which has not yet been served. Ironbridge, et al., submit that, under the present circumstances and relevant case law, they are entitled to relief from stay so as to pursue their counterclaims and cross-claims against the Debtors in the Colorado Construction Defect Lawsuit and the Colorado Contract Lawsuit. Duncan E. Barber, Esq., at Bieging Shapiro & Barber LLP, in Denver, Colorado -- dbarber@bsblawyers.com -- contends that relief from stay in regard to the Colorado Construction Defect Lawsuit will permit all of the issues involved in the claimed construction defects at the Ironbridge project to be resolved in a single forum. Similarly, he asserts, permitting Ironbridge, et al., to assert their counterclaims in response to the threatened LBRR complaint in Colorado will permit all of the disputes arising out of the contractual relationships between the Debtor and Ironbridge, et al., to be resolved in one action. The motion is subsequently amended to remove Sunrise Company as movant, and to include a draft of the LBRR complaint. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins Nod to Tap Gleacher as Fin'l Advisor ---------------------------------------------------------- Lehman Brothers Holdings Inc. obtained court approval to employ Gleacher & Companies Securities Inc. as its financial advisor. The company tapped Gleacher as part of its plan to monetize its stake in Archstone Enterprise LP, a real estate investment trust. Prior to the approval, Lehman made certain changes to the terms of Gleacher's employment, one of which is the nonpayment of monthly retainer to the firm. Instead of the retainer, Gleacher will get a commission based on how Archstone is ultimately sold off by LBHI. The modifications to Gleacher's fees came after its application to employ Gleacher drew flak from the Official Committee of Unsecured Creditors and the U.S. Trustee. The Committee and the U.S. Trustee previously complained that Gleacher's work is duplicative of Lazard Freres & Co. LLC's. The U.S. Trustee also complained that the fees, which Lehman proposed to pay to Gleacher, are not reasonable. "A proposal to retain and substantially compensate two professionals to provide the exact same services cannot be reasonable," the Creditors Committee said, pointing out that paying both such professionals violates bankruptcy law. LEHMAN BROTHERS: Agrees to $5-Bil. Reserve for Fannie Mae Claim --------------------------------------------------------------- For purposes of Lehman Brothers' Confirmed Chapter 11 Plan and distributions and payments to be made under the Plan, and in furtherance of the Debtors and Fannie Mae's previously approved stipulation, which provides that Lehman Brothers Holdings Inc. and Fannie Mae would agree on the reserve amounts for Fannie Mae's claim against LBHI, LBHI and Fannie Mae agree that (i) the Reserve Amount on account of the Allowed Fannie Mae LBHI Claim will be $110 million as a LBHI Class 9A Claim, and (ii) the Reserve Amount of the Fannie Mae LBHI Claim, excluding the Allowed Fannie Mae LBHI Claim, will be $5 billion as a LBHI Class 7 Claim, provided that if any portion of the Fannie Mae LBHI Claim will be determined to be entitled to a priority recovery, the Allowed Fannie Mae Priority Claim will be included in LBHI Class 1 Priority Non-Tax Claim. The Fannie Mae LBHI Claim, known as Claim No. 29557 asserted for $19.058 billion, is based on guarantee of a derivative contract and for violations and breach of certain representations and warranties. The Parties also agree that to the extent that the Allowed amount of the Claim in LBHI Class 7 on account of the Fannie Mae LBHI Claim other than any Allowed Fannie Mae Priority Claim is less than $5 billion, the difference between the Available Cash reserved to pay Fannie Mae on account of a $5 billion unsecured claim in LBHI Class 7, and the Available Cash payable to Fannie Mae on account of the amount that the Allowed Fannie Mae Unsecured Claim is ultimately Allowed, will be available to pay the Allowed Fannie Mae Priority Claim, dollar for dollar, to the extent the claim is not otherwise paid in full as a Class 1 Priority Non-Tax Claim and will be deemed to constitute a reserve on account of the Fannie Mae Priority Claim. The Parties further agree that the Debtors' failure to establish cash reserve on account of the Fannie Mae Priority Claim at this time will not prejudice the right of Fannie Mae and Federal Housing Finance Agency to assert and prosecute the Fannie Mae Priority Claim in all respects, or to payment in full on account of the Fannie Mae Priority Claim as provided for under the Plan. If a written objection is timely served and filed by January 3, 2012, a hearing will be held to consider the Stipulation on January 26. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LBI Trustee OKs Malachite 2006-1 Trust Close-Out ----------------------------------------------------------------- James W. Giddens, as trustee for the liquidation of the business of Lehman Brothers Inc. pursuant to the Securities Investor Protection Act of 1970, Lehman Brothers Finance S.A., Netherlands Antilles Branch, also known as Lehman Brothers Finance AG in Liquidation, Barclays Capital Inc. solely as a "Record Holder" for the benefit of its customers, Citibank, N.A., as Warrant Agent, and U.S. Bank Trust National Association, as owner trustee, entered into a stipulation and order modifying the automatic stay and authorizing the close-out of the Malachite 2006-1 Trust. LBI, as depositor and trustee, established the Malachite Trust, which was authorized to issue five series of MBAM Jandakot Structured Fund Call Warrants, each of which was linked to the performance of the MBAM Jandakot Structured Fund. The Parties agree that the automatic stay in effect in LBI's SIPA proceeding is modified as necessary to permit the redemption, distribution and dissolution of the Malachite Trust and other Malachite Transactions, which include the redemption of the shares of the Fund held by or on behalf of the Malachite Trust, the payment of the outstanding fees and expenses of the Trustee and the Warrant Agent and their counsel from the proceeds of the redemption and reserves, the establishment of reserves for the payment of indemnification obligations, the payment of the Warrant Payments to the Record Holders, and the distribution of the remaining amounts held by the Trustee as required. So long as the proceeds of the redemption of the Fund exceed an amount sufficient to pay Warrant Holders, the Trustee at the direction of LBF will redeem the Fund shares as soon as practicable. The SIPA Trustee is authorized to take actions necessary to effectuate the Malachite Transactions, including consenting to the Trustee's use of proceeds from the redemption of the Fund to pay the fees and expenses of the Trustee for $235,827 and the Warrant Agent's for $56,142, plus maintaining a reserve of $2,000,000 funded from payments otherwise due to LBF for any indemnification obligations of LBF. The Reserve will also be available to reimburse the Trustee for any losses, costs and expenses with respect to any loss occasioned with respect to any breach of representation or warranty of LBF and for payment of the Trustee's costs and annual fees and expenses. The SIPA Trustee is also authorized to consent to the agreed payments to each class of Warrants: No. of Warrant Aggregate Expiration Date CUSIP Warrants Value Proceeds --------------- ----- -------- ------- --------- June 30, 2009 56089L117 39,010 $238 $9,319,879 August 31, 2009 56089L125 2,350 219 516,577 September 30, 2009 U55942103 2,298 214 491,978 December 31, 2009 56089L141 2,950 155 457,633 April 30, 2010 56089L158 3,228 135 436,974 The SIPA Trustee, as Depositor, is authorized to consent to the distribution by the Trustee of the Warrant Payments to the Warrant Agent for further distribution to the Record Holders of the Warrants. Notwithstanding that the Warrants are registered in the name of LBI or its nominee on the records of the Warrant Agent, the SIPA Trustee had previously assigned all Warrants to Barclays but for 3,600 of the Warrants with an expiration date of June 30, 2009, in connection with account transfers and the Warrant Agent is directed by the SIPA Trustee to distribute the Warrant Payments to Barclays for the benefit of the Warrant Holders, except for $860,076 of the payment, representing the Warrant Payments in respect of the 3,600 warrants with an expiration date of June 30, 2009, which will be paid in full to the SIPA Trustee. Upon receipt by the Record Holders of the full amount of the Warrant Payments, all of the obligations of the Malachite Trust, the Warrant Agent, the Trustee and the SIPA Trustee with respect to the Warrants will be deemed satisfied and the Warrants will be deemed cancelled. Upon Barclay's distribution of the Warrant Payments to the Warrant Holders, all obligations of BCI to the Warrant Holders will be deemed satisfied. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Court Approves Dismissal of Suit vs. RBS --------------------------------------------------------- Judge Naomi Reice Buchwald of the U.S. District Court for the Southern District of New York approved an agreement, which calls for the dismissal of a lawsuit against The Royal Bank of Scotland N.V. The trustee liquidating Lehman Brothers Holdings Inc.'s brokerage sued RBS, formerly known as ABN AMRO Bank N.V., for $345.9 million over a 1998 swap agreement that was terminated early. The $345.9 million relates to 247 foreign currency transactions that were outstanding when the deal was terminated. RBS allegedly refused to pay because it claims a right to set that amount off against amounts owed it by the brokerage and various affiliates. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEVEL 3 COMMS: S&P Keeps 'CCC' Rating on 8.625% Senior Notes ------------------------------------------------------------ Standard & Poor's Ratings Services said its 'CCC' issue-level and '6' recovery ratings on Broomfield, Colo.-based Level 3 Communications Inc. subsidiary Level 3 Financing Inc.'s 8.625% senior notes due 2020 are not affected by the upsizing of the issue to $900 million from the original $350 million amount. The company intends to use the bulk of the new issue proceeds to redeem all $807 million of Level 3 Financing's outstanding 9.25% senior notes due 2014. "The '6' recovery rating on the new notes reflects our expectation of negligible (0% to 10%) recovery of principal in the event of a default. Thenotes are guaranteed by parent Level 3 Communications Inc. Other ratings on Level 3 Communications Inc. and subsidiaries, including the 'B-' corporate credit rating and the positive outlook, are not affected by the new notes," S&P said. Level 3 Communications is a provider of voice, data, and other transport services on its global communications and Internet backbone. The positive outlook notes that if the company is on track to realize the bulk of what it expects to be around $300 million in annual operating synergies from its recent Global Crossing acquisition, adjusted debt leverage could improve to the 5x area, a metric which could support a one-notch upgrade. Ratings List Level 3 Communications Inc. Corporate Credit Rating B-/Positive/-- Ratings Unchanged Level 3 Financing Inc. $900 mil 8.625% senior nts due 2020 CCC Recovery Rating 6 LUBBOCK HOUSING: Moody's Affirms 'Ba2' Rating on Refunding Bonds ---------------------------------------------------------------- Moody's Investors Service has affirmed Ba2 ratings on the Lubbock Housing Finance Corporation Multi-family Revenue Refunding Bonds (Las Colinas, Quail Creek and Parkridge Place Apartment projects), Series 2002 A&B and Ba3 rating on Subordinate Series 2002C bonds. Approximately $10.95 million of aggregate debt affected. This rating action reflects continued sufficient rental revenue and stabilizing debt service coverage. The positive outlook reflects the improving operating performance of the projects. All of the properties were built in 1983 and are located approximately six miles southwest of the Lubbock central business district. The neighborhood is largely residential, with development along the South Loop 289 thoroughfare. Texas Tech University is located within one to two miles of the submarket. STRENGTHS -- Continued sufficient operating performance at the property. -- Substantial excess contributions made by the owner to the reserve and replacement fund. CHALLENGES -- Continued low occupancy at one of the properties. -- Small project size, which could lead to volatility in occupancy and the resulting financial performance. Outlook The revised positive outlook reflects our expectation of improving operating performance at the properties over the near term. What could change the rating - UP -- Continued increase in debt service coverage and stabilization of the projects. -- Improved occupancy at the Parkridge project. What could change the rating - DOWN -- Decline in the operating performance of the properties, resulting in deterioration of the debt service coverage on the bonds. PRINCIPAL RATING METHODOLOGY The principal methodology used in this rating was Global Housing Projects published in July 2010. MARKETING WORLDWIDE: Angus Gillis Discloses 7.6% Equity Stake ------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Angus Allan Gillis and Josephine Maria MacPherson disclosed that, as of Dec. 19, 2011, they beneficially own 4,050,000 shares of common stock of Marketing Worldwide Corporation representing 7.63% of the shares outstanding. A full- text copy of the filing is available at http://is.gd/1UzXOL 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. MESA AIR: Enters Into Settlement With Daimler, et al. ----------------------------------------------------- Reorganized Mesa Air Group, Inc., its affiliated Reorganized Debtors, and its affiliated Liquidating Debtors, and (i) Daimler Capital Services LLC, (ii) Wells Fargo Bank, Northwest, N.A.; (iii) Qwest Corporation and Qwest Communications Company, LLC; and the South Carolina Department of Revenue have entered into post-effective date settlements resolving certain claims. The Daimler settlement provides, among other things: * Daimler Capital's Claim No. 774 against Mesa Airlines, Inc. for amounts allegedly owning pursuant to the Tax Indemnity Agreements related certain aircraft will be allowed for $6,326,794 as a Class 3(e) General Unsecured Claim. The remainder of Claim N. 774 is disallowed; and * Any and all other claims, whether filed or scheduled, are disallowed and expunged, and are not entitled to any distribution under the Third Amended Joint Plan of Reorganization. The Wells Fargo settlements provide, among other things: * Wells Fargo's Claim No. 760 will be deemed allowed as a General Unsecured Claim in Class 3(e) under the Plan for $3,663,021 against Mesa Airlines; * Wells Fargo's Claim No. 762 will be deemed allowed as a General Unsecured Claim in Class 3(e) under the Plan for $4,835,556 against Mesa Airlines; and * The allowance of the Claims will satisfy all obligations of the Debtors and any of their affiliates under the applicable leases and related documents, and Wells Fargo waives any other claim that it may have arising under the Leases or related documents. The Qwest settlement provides: * Claim No. 1652 will be deemed allowed as a General Unsecured Claim in Class 3(a) under the Plan in the amount of $191,091 against Mesa. Allowed Claim No. 1652 will be paid in accordance with the treatment provided by the Plan for Allowed Claims in Class 3(a). * Claim No. 1660 will be deemed allowed as a General Unsecured Claim in Class 4(a) under the Plan in the amount of $9,855 against Mesa. Allowed Claim No. 1660 will be paid in accordance with the treatment provided by the Plan for Allowed Claims in Class 4(a). * In accordance with the Plan, Qwest is permitted to sell the Claims to any buyer provided that buyer holds in total less than 360,000 shares of New Stock or New Warrants of Reorganized Mesa Air Group, Inc., or claims in the aggregate against the Debtors that would be convertible into 360,000 shares of New Stock or New Warrants, and the parties to that transaction execute form transfer agreement. The South Carolina Dept. settlement provides: * Claim No. 101 will be allowed against Mesa Airlines, Inc., as a $1,066,048 Priority Tax Claim, a $1,767 secured tax claim, and a $116,400 Class 3(e) General Unsecured Claim. Interest will be paid on the Allowed 2009 Priority Tax Claim at the rate of 6% per annum commencing from the Effective Date. Interest will be paid on the Allowed Secured Tax Claim at the rate of 6% per annum commencing from the Petition Date. No interest will be paid on the Allowed General Unsecured Claim. * Claim No. 1676 will be allowed Mesa Airlines as a $441,297 Priority Tax Claim, and a $44,129 Class 4(e) De Minimis Convenience Class Claim. Interest will be paid on the Allowed Priority Tax Claim at the rate of 6% per annum commencing from the Effective Date. No interest will be paid on the Allowed Convenience Class Claim. About Mesa Air Mesa Air currently operates 76 aircraft with approximately 450 daily system departures to 94 cities, 38 states, the District of Columbia, and Mexico. Mesa operates as US Airways Express and United Express under contractual agreements with US Airways and United Airlines, respectively, and independently as go! Mokulele. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company was founded by Larry and Janie Risley in New Mexico in 1982. Mesa Air Group Inc. and its units filed their Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 10-10018) on Jan. 5, 2010, in New York, listing assets of $976 million against debt totaling $869 million as of Sept. 30, 2009. Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the Debtors. Imperial Capital LLC is the investment banker. Epiq Bankruptcy Solutions is claims and notice agent. Brett Miller, Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison & Foerster LLP, serve as counsel to the Official Committee of Unsecured Creditors. Judge Martin Glenn entered a final order confirming the Third Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and its debtor affiliates on Jan. 20, 2011. Under the plan, the reorganized company will issue new notes, common stock and warrants to creditors. Unsecured creditors that are U.S. citizens will receive a combination of new notes and new common stock, while unsecured creditors that are Non-U.S. citizens will receive a combination of new notes and new warrants. An agreement with US Airways paved way for the filing of the plan. Mesa Air's Plan of Reorganization became effective March 1, 2011. The Company's restructuring accomplishments included elimination of 100 excess aircraft and associated leases and debt which contributed to the deleveraging of Mesa's balance sheet in the approximate amount of $700 million in capitalized leases and $50 million in debt, and extending the term of the code-share agreement with US Airways through September 2015. Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Mesa Air Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000). MESA AIR: Wells Fargo Applies for Administrative Expense Payment ---------------------------------------------------------------- Before the Petition Date, Wells Fargo Bank Northwest, N.A., as owner trustee, leased one de Havilland DCH 8-202 aircraft Federal Aviation Administration registration number N454YV and one Canadair Regional Jet CL-600-2B19 aircraft Federal Aviation Administration registration number N37178 to Mesa Airlines, Inc. With respect to the Dash 8 Aircraft, the Debtors owed these administrative expenses to the Owner Trustee: Rent due and unpaid $1,445,907 Sec. 1110(b) Stipulation amount due $979,600 Amount reported received by EDC $117,000 Admin. Expense due and unpaid $800,600 With respect to the CRJ Aircraft, the Debtors owed these administrative expenses to the Owner Trustee: Rent due and unpaid $2,675,325 Sec. 1110(b) Stipulation amount due $2,675,325 Amount reported received by EDC $0 Admin. Expense due and unpaid $2,675,325 Wells Fargo asks the Court to direct the Reorganized Debtors to pay administrative expenses. Reorganized Debtors Object The Reorganized Debtors ask the Court to deny Wells Fargo's administrative expense claims because these were untimely. According to the Reorganized Debtors, they filed a notice to reject the Dash 8 aircraft and served it upon, among others, Wells Fargo in April 2010. The Reorganized Debtors said Wells Fargo accepted the aircraft and did not object to the rejection notice. Filing of the administrative claim nine months after the deadline set forth by the Rejection Procedures Order is inexcusable, the Reorganized Debtors assert. About Mesa Air Mesa Air currently operates 76 aircraft with approximately 450 daily system departures to 94 cities, 38 states, the District of Columbia, and Mexico. Mesa operates as US Airways Express and United Express under contractual agreements with US Airways and United Airlines, respectively, and independently as go! Mokulele. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company was founded by Larry and Janie Risley in New Mexico in 1982. Mesa Air Group Inc. and its units filed their Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 10-10018) on Jan. 5, 2010, in New York, listing assets of $976 million against debt totaling $869 million as of Sept. 30, 2009. Richard M. Pachulski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as local counsel to the Debtors. Imperial Capital LLC is the investment banker. Epiq Bankruptcy Solutions is claims and notice agent. Brett Miller, Esq., Lorenzo Marinuzzi, Esq., and Todd Goren, Esq., at Morrison & Foerster LLP, serve as counsel to the Official Committee of Unsecured Creditors. Judge Martin Glenn entered a final order confirming the Third Amended Joint Plan of Reorganization of Mesa Air Group, Inc., and its debtor affiliates on Jan. 20, 2011. Under the plan, the reorganized company will issue new notes, common stock and warrants to creditors. Unsecured creditors that are U.S. citizens will receive a combination of new notes and new common stock, while unsecured creditors that are Non-U.S. citizens will receive a combination of new notes and new warrants. An agreement with US Airways paved way for the filing of the plan. Mesa Air's Plan of Reorganization became effective March 1, 2011. The Company's restructuring accomplishments included elimination of 100 excess aircraft and associated leases and debt which contributed to the deleveraging of Mesa's balance sheet in the approximate amount of $700 million in capitalized leases and $50 million in debt, and extending the term of the code-share agreement with US Airways through September 2015. Bankruptcy Creditors' Service, Inc., publishes Mesa Air Bankruptcy News. The newsletter tracks the Chapter 11 proceedings undertaken by Mesa Air Group Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000). MGM RESORTS: Proposes to Offer $500 Million Senior Notes -------------------------------------------------------- MGM Resorts International proposes to offer $500 million in aggregate principal amount of senior notes due 2019 in a private placement. The Company plans to use the net proceeds to repay a portion of its indebtedness, which may include indebtedness under its senior credit facility or outstanding debt securities. The notes will be general unsecured senior obligations of the Company, guaranteed by substantially all of the Company's wholly- owned domestic subsidiaries which guarantee the Company's other senior indebtedness, and equal in right of payment with, or senior to, all existing or future unsecured indebtedness of the Company and each guarantor. The notes proposed to be offered will not be registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States or to any U.S. persons absent registration under the Securities Act, or pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The notes will be offered only to "qualified institutional buyers" under Rule 144A of the Securities Act or, outside the United States, to persons other than "U.S. persons" in compliance with Regulation S under the Securities Act. About MGM Resorts MGM Resorts International (NYSE: MGM) -- http://www.mgmresorts.com/-- has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, Illinois and Macau. The Company reported net income of $3.25 billion on $5.55 billion of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $1.29 billion on $4.58 billion of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $27.85 billion in total assets, $17.91 billion in total liabilities and $9.94 billion in total stockholders' equity. Bankruptcy Warning Any default under the senior credit facility or the indentures governing the Company's other debt could adversely affect its growth, its financial condition, its results of operations and its ability to make payments on its debt, and could force the Company to seek protection under the bankruptcy laws. * * * As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on MGM Resorts International to 'B-' from 'CCC+'. "The rating upgrade reflects MGM's solid performance thus far in 2011, and our expectation that MGM will continue benefitting from improving performance trends on the Las Vegas Strip, particularly on the lodging side of the business," said Standard & Poor's credit analyst Ben Bubeck. "MGM maintains weak credit measures, including operating lease-adjusted debt to wholly owned EBITDA of over 11x and EBITDA coverage of interest of just 1.0x. Still, we believe recent strong performance trends are reducing refinancing risk in the company's intermediate- term debt maturities, and expect credit measures to continue to gradually improve modestly in 2012." In the Nov. 21, 2011, edition of the TCR, Moody's Investors Service upgraded MGM Resorts International's Corporate Family and Probability of Default ratings to B2, its senior secured rating to Ba2, and its senior unsecured notes to B3. MGM has an SGL-3 Speculative Grade. The B2 rating reflects Moody's view that continued earnings improvement at MGM's 51% owned Macau joint venture increases the likelihood of a dividend distribution that would help improve the company's liquidity profile. The B2 Corporate Family Rating also reflects Moody's view that positive lodging trends in Las Vegas will continue through 2012 and will help improve MGM's leverage and coverage metrics modestly. MGM RESORTS: Prices $850 Million in Senior Notes ------------------------------------------------ MGM Resorts International has priced $850 million in aggregate principal amount of its 8.625% senior notes due 2019 at par. The transaction is expected to close on Jan. 17, 2012. The Company plans to use the net proceeds to repay a portion of its indebtedness, which may include indebtedness under its senior credit facility or outstanding debt securities. The notes will be general unsecured senior obligations of the Company, guaranteed by substantially all of the Company's wholly- owned domestic subsidiaries which guarantee the Company's other senior indebtedness, and equal in right of payment with, or senior to, all existing or future unsecured indebtedness of the Company and each guarantor. The notes have not been registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States or to any U.S. persons absent registration under the Securities Act, or pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The notes will be offered only to "qualified institutional buyers" under Rule 144A of the Securities Act or, outside the United States, to persons other than "U.S. persons" in compliance with Regulation S under the Securities Act. About MGM Resorts MGM Resorts International (NYSE: MGM) -- http://www.mgmresorts.com/-- has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, Illinois and Macau. The Company reported net income of $3.25 billion on $5.55 billion of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $1.29 billion on $4.58 billion of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $27.85 billion in total assets, $17.91 billion in total liabilities and $9.94 billion in total stockholders' equity. Bankruptcy Warning Any default under the senior credit facility or the indentures governing the Company's other debt could adversely affect its growth, its financial condition, its results of operations and its ability to make payments on its debt, and could force the Company to seek protection under the bankruptcy laws. * * * As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on MGM Resorts International to 'B-' from 'CCC+'. "The rating upgrade reflects MGM's solid performance thus far in 2011, and our expectation that MGM will continue benefitting from improving performance trends on the Las Vegas Strip, particularly on the lodging side of the business," said Standard & Poor's credit analyst Ben Bubeck. "MGM maintains weak credit measures, including operating lease-adjusted debt to wholly owned EBITDA of over 11x and EBITDA coverage of interest of just 1.0x. Still, we believe recent strong performance trends are reducing refinancing risk in the company's intermediate- term debt maturities, and expect credit measures to continue to gradually improve modestly in 2012." In the Nov. 21, 2011, edition of the TCR, Moody's Investors Service upgraded MGM Resorts International's Corporate Family and Probability of Default ratings to B2, its senior secured rating to Ba2, and its senior unsecured notes to B3. MGM has an SGL-3 Speculative Grade. The B2 rating reflects Moody's view that continued earnings improvement at MGM's 51% owned Macau joint venture increases the likelihood of a dividend distribution that would help improve the company's liquidity profile. The B2 Corporate Family Rating also reflects Moody's view that positive lodging trends in Las Vegas will continue through 2012 and will help improve MGM's leverage and coverage metrics modestly. MGM RESORTS: Fitch Rates $500-Mil. Sr. Unsecured Notes at 'B-' -------------------------------------------------------------- Fitch Ratings has assigned a rating of 'B-/RR4' to MGM Resorts International's (MGM) proposed $500 million senior unsecured notes due 2019. The Rating Outlook is Stable. Proceeds from the unsecured issuance will be used to repay a portion of MGM's indebtedness, which may include amounts outstanding under its senior credit facility or outstanding debt securities. Therefore, the transaction will be largely leverage neutral, but could dampen the free cash flow (FCF) profile slightly due to higher interest costs, depending on pricing of the notes. MGM's next maturity is the 6.75% senior unsecured notes coming due September 2012 ($462 million outstanding). The company also has about $2.15 billion outstanding on its credit facility, comprised of $450 million drawn on its revolver (pro forma for repayment of $879 million temporarily drawn at the end of third quarter) and a $1.7 billion term loan. The credit facility matures in February 2014. Fitch views the potential maturity extension favorably but it does not warrant positive rating action given MGM's high leverage (10.8 times [x] for the wholly owned group on a latest 12 months [LTM] basis through Sept. 30, 2011), heavy maturities through 2017, thin FCF profile and heavy dependence on an undisturbed Las Vegas Strip recovery (accounts of for roughly 80% of the domestic group's EBITDA). Before this issuance, Fitch forecasted that MGM had enough liquidity to get through the better part of 2013 until $750 million of 13% New York-New York notes come due in November. The 13% secured notes are the strongest piece of debt in the capital structure and well over-collateralized (also share lien in the Mirage, Bellagio and MGM Grand on pro rate basis with other secured notes). Therefore, there is a good probability that MGM will be able to refinance them at equal or better terms, even in an unaccommodating credit market. The next maturities are in February 2014, including the credit facility and $509 million of 5.875% senior notes. On Oct. 14, 2011, Fitch upgraded MGM's Issuer Default Rating to 'B-'. The upgrade largely reflects the strong Las Vegas recovery and MGM's solid near-term financial flexibility, which is further supported by the additional liquidity provided by the proposed $500 million senior unsecured issuance. For 2012, Fitch expects Las Vegas Strip visitation to grow roughly 2% and gaming revenue to increase slightly faster at approximately 5%. In 2011, year-to-date visitation through October grew 4.5% and through November gaming revenue is up 5.2%. Fitch's favorable outlook for the Las Vegas Strip is supported by continued improvement in the convention mix, and the Strip operators' reinvestment in existing properties, with particular emphasis on the high end. Room rate increases will be driven by a modest uptick in convention mix, room remodels and the lack of new supply for the foreseeable future (other than 662-rooms that opened in January 2011 in Caesars Palace's Octavius Tower). MGM is expecting the 2012 convention mix to improve slightly to 15%, compared with an estimated 14.5% for 2011. Fitch's 2012 base case incorporates a high- single-digit increase in citywide average daily room rates (ADRs), as operators yield manage rooms for higher profitability. This would reflect a slight deceleration from the 10.9% citywide ADR growth year to date through October 2011, as leisure transient demand will be more constrained by the slow growth environment than convention/group business. MGM's performance in Las Vegas should be further lifted by the company's capital expenditure program centered on improving its high-end properties (Bellagio rooms underwent a remodel in 2011) and its significant exposure to international play. A more detailed analysis of the Las Vegas market and MGM's financial profile is included in Fitch's '2012 Gaming Outlook - Market Exposure the Differentiating Factor' dated Dec. 13, 2011, and the upgrade press release, dated Oct. 14, 2011. Fitch currently rates MGM as follows: -- Issuer Default Rating (IDR) 'B-'; -- Senior secured notes due 2013, 2014, 2017, and 2020 'BB-/RR1'; -- Senior credit facility 'B/RR3'; -- Senior unsecured notes 'B-/RR4'; -- Convertible senior notes due 2015 'B-/RR4'; -- Senior subordinated notes 'CC/RR6'. MGM RESORTS: S&P Assigns 'B-' Rating to $500-Mil. Senior Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' issue-level rating to Las Vegas-based casino operator MGM Resorts International's proposed $500 million senior notes due 2019. "In addition, we assigned the notes a recovery rating of '4', indicating our expectation of average (30% to 50%) recovery for noteholders in the event of a payment default. The company plans to use proceeds from the notes offering to repay debt," S&P said. "Our 'B-' corporate credit rating on MGM reflects our assessment of its financial risk profile as 'highly leveraged' according to our criteria, given its high debt leverage and thin EBITDA coverage of interest, which likely will limit positive free operating cash flow generation over the next few years. In addition, while MGM completed several capital raises and other actions in recent years, alleviating near-term debt maturities, its ability to meet the step-up in debt maturities in 2013 and 2014 relies on substantial growth in cash flow generation and continued access to capital markets. Our rating also incorporates our assessment of MGM's business risk profile as 'satisfactory' according to our criteria, given its leading presence on the Las Vegas Strip, and modest geographic diversity outside of Las Vegas. "On Nov. 9, 2011, we raised our corporate credit rating on MGM to 'B-' from 'CCC+', reflecting MGM's solid operating performance and our expectation that MGM will continue benefitting from improving performance trends on the Las Vegas Strip, particularly on the lodging side of the business. While MGM maintains weak credit measures, including operating lease-adjusted debt to wholly owned EBITDA of over 11x and EBITDA coverage of interest of just 1.0x, we believe recent strong performance trends are reducing refinancing risk in the company's intermediate- term debt maturities, and expect credit measures to continue to gradually improve modestly in 2012," S&P said. "Our rating on MGM incorporates our expectation for modest, low- single-digit percentage growth in wholly owned net revenue in 2012. We expect MGM's wholly owned EBITDA to grow in the high- single-digit percentage area in 2012, because continued strength on the lodging side of the business and improved operating leverage after recent cost-containment actions should result in improved operating margins. The gradual economic recovery and continuing positive momentum in visitation to the Las Vegas Strip should propel this improvement. Still, we remain somewhat cautious about the sustainability of recent operating trends, given our economists' current expectation for only modest growth in 2012 in real GDP (1.8%) and consumer spending (2.2%), and for persistent high unemployment. Under this scenario, while credit measures gradually improve, MGM would generate limited free operating cash flow and would need to raise substantial capital to address 2013 and 2014 debt maturities, totaling nearly $5 billion," S&P said. Ratings List MGM Resorts International Corporate credit rating B-/Stable/-- Rating Assigned $500 mil. sr. notes due 2019 B- Recovery rating 4 MUSCLEPHARM CORP: Inter-Mountain Discloses 9.9% Equity Stake ------------------------------------------------------------ In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Inter-Mountain Capital Corp. and its affiliates disclosed that, as of June 29, 2011, they beneficially own 14,817,246 shares of common stock of MusclePharm Corporation representing 9.99% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/Ig7NGs About MusclePharm Headquartered in Denver, Colorado, MusclePharm Corporation (OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life- style company that develops and manufactures a full line of National Science Foundation approved nutritional supplements that are 100% free of banned substances. MusclePharm is sold in over 120 countries and available in over 5,000 U.S. retail outlets, including GNC and Vitamin Shoppe. MusclePharm products are also sold in over 100 online stores, including bodybuilding.com, Amazon.com and Vitacost.com. Berman & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about MusclePharm's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company had a net loss of $19.6 million and net cash used in operations of $3.8 million for the the year ended Dec. 31, 2010; and a working capital deficit and stockholders' deficit of $2.8 million and $1.7 million, respectively, at Dec. 31, 2010. The Company also reported a net loss of $12.33 million on $13.07 million of sales for the nine months ended Sept. 30, 2011, compared with a net loss of $8.67 million on $3.13 million of sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $5.71 million in total assets, $10.86 million in total liabilities, and a $5.14 million total stockholders' deficit. NAVISTAR INT'L: Fitch Affirms 'BB'; Outlook Stable -------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) for Navistar International Corporation (NAV) and Navistar Financial Corporation (NFC) at 'BB'. The Rating Outlook is Stable. The ratings incorporate NAV's solid operating performance, positive free cash flow, growth in the company's important North American medium and heavy duty truck markets, leading market shares, broad distribution network, and sound financial profile at NFC. Leverage has declined as NAV's financial results recover from the previous downturn. At Oct. 31, 2011, debt/EBITDA, excluding NFC, was 2.4 times (x) compared to 3.2x one year earlier. Earnings and leverage could improve further as the North American truck market approaches the strong part of the cycle. Uncertainty about potential changes to NAV's operating and financial policies represents a rating concern relating to Carl Icahn's ownership interest in NAV which currently is over 10%. Mr. Icahn believes a business combination between NAV and Oshkosh Corporation (OSK) would be beneficial. There could be some operating synergies from such a combination as NAV and OSK both participate in the military vehicle market. In addition, OSK has an established position in the market for commercial vehicle bodies while NAV makes vehicle chassis, engines and certain other components which OSK purchases from outside suppliers. There are several concerns that would surround a combination between NAV and OSK including integration risks, the disposition of OSK's aerial lift business, and the potential for a substantial increase in NAV's leverage depending on the nature of any business combination with OSK. NAV's improving leverage provides a modest cushion to absorb additional debt, but the cushion is limited given the inherent cyclicality of its truck market. The use of equity would reduce concerns about leverage. Other rating concerns include the cyclical nature of NAV's truck markets, large pension obligations, and the concentration of NAV's revenue in the U.S. and Canada. The proportion of revenue outside the U.S. and Canada is improving, however. Approximately 24% of NAV's revenue was located outside the U.S. and Canada in 2011 compared to 13% as recently as 2009. The ratings or Outlook could be revised upward if NAV's diversification into other product and geographic markets helps to dampen cyclical results, margins and free cash flow improve consistently, and NAV's exhaust gas recirculation (EGR) and engineering integration strategies are effective. The ratings and Outlook could be negatively affected if NAV loses long term market share as a result of its engine strategy, free cash flow and liquidity are insufficient to fund NAV's product development and investments in joint ventures, or in the event of a significant, unexpected downturn in truck demand in the near term. A large debt funded transaction, possibly involving OSK, could also contribute to a negative rating action. NAV's sales grew 15% in fiscal 2011 and could increase by a similar amount in 2012. The increase is largely driven by replacement demand related to the age of the North American truck fleet which is still relatively high. Demand is also supported by rising shipping volumes and economic growth. The pace of the recovery is affected by supply chain constraints which have limited truck production. In other regions, international business should continue to grow as NAV expands its joint venture interests to produce trucks and engines. NAV has a well- established engine business in South America. Profit margins have improved during the past two years but may stabilize or decline slightly in 2012. Anticipated margin pressure reflects the possibility of lower military revenue associated with U.S. defense spending, and an expected change in contract terms with a large engine customer in Brazil. NAV's military vehicles include military variations of its commercial vehicles, and Mine Resistant Ambush Protected (MRAP) armored vehicles. MRAPs are the largest source of the expected decline in military revenue in 2012. They provide attractive margins but orders can fluctuate significantly. Military business should continue to generate $1.5 billion-$2 billion of annual sales over the long term, even without significant MRAP sales. NAV has an attractive military parts business, and the foreign military market represents a source of potential growth. NAV is in the midst of reorganizing and integrating certain truck and engine businesses which could improve profitability over the long run and help diversify its revenue base. Manufacturing operations incurred $155 million of restructuring and impairment charges in 2011, not including certain engineering integration costs. These actions are concentrated in NAV's truck operations but also include the engine business. Restructuring includes the consolidation or closure of manufacturing facilities, renovation of a testing facility, and relocation and integration of NAV's truck and engine development centers to its relocated headquarters and testing facilities sites. The integration of certain truck and engine operations is intended to improve the product development process, reduce costs through a more flexible manufacturing system, and support NAV's vertical integration and expansion into adjacent markets such as cement mixers and other customized commercial vehicles which offer attractive margins. The integration of NAV's operations is consistent with its engine strategy which involves producing all engines internally for the U.S. and Canadian market using EGR emissions technology. All other truck makers in the U.S. and Canada use selective catalytic reduction (SCR) after-treatment technology to help meet emissions requirements. There is no industry-wide consensus about which technology strategy is superior or may become dominant. The potential impact of NAV's EGR-only strategy represents a risk until the success of each technology becomes clear. NAV's engine strategy also includes focusing on 11- and 13-liter engines for heavy and severe service trucks. It introduced a 15- liter engine in early 2011, but expects its use will be limited. NAV's success at converting customers to 13-liter engines remains a risk and will be a factor in its long-term competitive position. However, the use of 13-liter engines is rising rapidly across the industry due to benefits related to engine performance, weight, and fuel economy. NAV also sells engines to other OEMs although they are a small part of NAV's total sales. Fitch expects free cash flow will be steady to moderately higher in 2012 compared with 2011 when it totaled $253 million. Free cash flow could increase materially if favorable economic conditions support materially higher truck production and supplier constraints are resolved. Additional spending on product development or restructuring above current expectations could offset higher free cash flow. NAV has been cash flow positive since 2008, including through the downturn in demand for trucks in 2009 and 2010. NAV normally targets capital expenditures at $250 million to $350 million. Manufacturing capital expenditures totaled $427 million in 2011 and could be similar in 2012 due to higher-than-normal spending levels related to the relocation of NAV's headquarters, investment in a technical research center, and a refurbished engine testing facility. These expenditures are being partly funded with proceeds from $225 million industrial revenue bonds issued in October 2010. Other uses of cash include expansion in international markets through unconsolidated joint ventures and equity investments which totaled $65 million in 2011. NAV spent $125 million to repurchase shares in 2011, reflecting the company's high balance of cash and marketable securities. Share repurchases are likely to occur again in 2012 but would depend on the level of spending for other purposes such as product development and investments in joint ventures. At the end of fiscal 2011, NAV's pension plans were underfunded by $1.8 billion (approximately 57% funded) compared to $1.5 billion one year earlier. NAV contributed $134 million to its pension plans in fiscal 2011 and expects to contribute $187 million in 2012. Between 2013 and 2015, NAV estimates it will be required to contribute at least $170 million annually. At Oct. 31, 2011, Navistar's liquidity, excluding NFC, included $1.2 billion of cash and marketable securities and availability under a $355 million revolver. These amounts were offset by $99 million of manufacturing debt due within one year. Cash does not include funds from $225 million of industrial revenue bonds issued in 2010. The funds are held in trust and used for specified expenditures toward NAV's new headquarters and other facilities. Scheduled debt repayments are near a range of $100 million annually in 2012 and 2013. NFC's financial profile continues to improve as it shifts retail financing to GE Capital under an agreement signed in 2010. The agreement reduces NFC's funding and capital needs while allowing NAV to offer financing to its retail customers, including a greater share of fleet customers than NFC could provide on its own. The agreement is in place for three years and includes automatic annual extensions. It can be terminated early by either party with a one-year advance notice. NFC continues to provide wholesale floorplan financing to its dealers. Asset quality performance has shown improvement from previous years. As the retail portfolio continues to wind down, provisioning volatility has declined as NFC focuses on financing a low risk wholesale portfolio. The wholesale portfolio has had zero to minimal losses over the past 15 years. NFC completed a significant refinancing within the fourth quarter of 2011. On Dec. 2, 2011, NFC successfully refinanced its bank credit facility with a five-year revolving credit line and term loan. The bank credit facility in place at Oct. 31, 2011, was scheduled to mature in December 2012. The lengthening of its bank facility reduces any near-term liquidity concerns. NFC's capitalization, in conjunction with the financial profile of NAV, is consistent with that of similarly rated peers. Fitch expects capitalization levels to continue to improve with the run- off of the retail portfolio and stay well below the historical range. NFC represents the majority of the Financial Services segment which also includes finance operations in Mexico and other small finance businesses. NFC and the remainder of the Financial Services business remain an important part of NAV's business model by funding its dealer network and enhancing NAV's ability to sell trucks. Financial Services' profitability improved in 2011 due to declines in provisions for credit losses and lower employee expenses as GE gradually assumes retail financing from NFC. As a result of the transition, segment profit is expected to decline from $129 million in 2011 to more normal levels of $60 million-$70 million in 2012 as the retail portfolio shrinks. Fitch's ratings cover approximately $2.1 billion of debt at NAV, including unamortized discount, and $2.9 billion of outstanding debt at Financial Services, the majority of which is at (NFC), as of Oct. 31, 2011. The following ratings for NAV and NFC have been affirmed: Navistar International Corporation -- IDR at 'BB'; -- Senior unsecured notes at 'BB'; -- The County of Cook, Illinois recovery zone revenue facility bonds (Navistar International Corporation Project) series 2010 at 'BB'; -- Illinois Finance Authority (IFA) recovery zone revenue facility bonds (Navistar International Corporation Project) series 2010 at 'BB'; -- Senior subordinated notes at 'B+'. Navistar Financial Corporation -- IDR at 'BB'. Fitch has assigned the following rating: Navistar Financial Corporation -- Senior unsecured bank credit facilities at 'BB'. Due to NFC's close operating relationship and importance to the parent, its ratings are directly linked to those of the ultimate parent. .The relationship is governed by the Master Intercompany Agreement, and there is a requirement referenced in the NFC credit agreement requiring Navistar, Inc. and NAV to own 100% of NFC's equity at all times. NCOAT INC: Fine-Tunes Proposed Plan Documents --------------------------------------------- nCoat, Inc., and its affiliates have filed a filed an amended disclosure statement in support of its amended joint plan of reorganization dated Jan. 9, 2012, with the U.S. Bankruptcy Court for the Middle District of North Carolina. The Plan of orderly liquidation contemplates the distribution of the Net Sales Proceeds to pay all Allowed Administrative Expenses incurred through the Effective Date, Allowed Priority Unsecured Claims, and Allowed Secured Claims of the Debtors, with any remaining Net Sales Proceeds to be divided equally between the estates of the Debtors and, after payment of Allowed Administrative Expenses incurred after the Effective Date, distributed to unsecured creditors in each case in accordance with the priorities established by the Bankruptcy Code. The Debtors do not anticipate that any excess funds will be available from the subsidiary estates to pay claims of creditors of nCoat. If confirmed, a claims review process regarding Allowed Claims is anticipated to take approximately 180 days after the Confirmation Date. The Debtor anticipates that the Net Sales Proceeds will be the only funds available to satisfy costs of administration and, to the extent possible, the claims of creditors of the Debtors. Cash on hand in the Debtors' estates as of the Petition Date, along with any post-petition collections or recoveries of cash on hand, funds on deposit, and accounts receivable have been expended post- petition in payment of administrative expenses, including the Debtors' payroll and payroll taxes, operating expenses, and professional fees incurred to date. The Debtors do not know of any causes of action or claims which the Debtors could assert against a third party on behalf of the subsidiary estates and do not expect any recoveries pursuant to Bankruptcy Causes of Action or other litigation. However, the Committee has informed counsel for the Debtor that it intends to further investigate potential claims against insiders and third parties on behalf of nCoat which could result in recoveries for the benefit of creditors of nCoat. The Plan provides the opportunity for the Debtor and/or the Committee to pursue the causes of action if warranted. The estates of MCC and HPC have a claim against the estate of nTech arising out of the transfer of the Intellectual Property from MCC and HPC for no consideration in 2006 and 2007. However, the Plan provides for the waiver of the claims against nTech in consideration for the allocation of the Sale Proceeds as between the Debtors. A copy of the Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/NCOAT_dsamended.pdf As reported in the Troubled Company Reporter on Oct. 28, 2011, the Plan proposed by the Debtors contemplates the distribution of the net sales proceeds ($671,184) to pay all allowed administrative expenses incurred through the effective date, allowed priority unsecured claims, and allowed secured claims (which remain unpaid) of the Debtors, with any remaining net sales proceeds to be divided equally between the estates of MCC, HPC and nTech and, after payment of allowed administrative expenses incurred after the Effective Date, distributed to unsecured creditors in each case in accordance with the priorities established by the Bankruptcy Code. The Debtors expect that there may be funds remaining in the nTech estate after the payment of all secured and unsecured creditors, which would then be distributed to secured and unsecured creditors of nCoat in accordance with the priorities established by the Bankruptcy Code. The Debtors do not anticipate that any excess funds will be available from the estates of MCC and HPC to pay claims of creditors of nCoat. The Allowed Unsecured Claims of nCoat of $788 million (Class 17) will be paid from the nCoat Available Cash (in full or pro rata depending upon the amount of nCoat Available Cash) in one or more distributions after the Effective Date upon the realization of nCoat Available Cash, and after payment in full of Allowed Administrative Expenses incurred by nCoat on or after the Effective Date. The Debtors has estimated that there will likely be no meaningful distribution on Class 17 Allowed Unsecured Claims. The existing equity interests (Class 18) will be extinguished and no distributions will be made on account of such old equity interests. About nCoat Inc. nCoat, Inc., filed for Chapter 11 protection on Aug. 16, 2010, (Bankr. M.D. N.C. Case No. 10-11512). John A. Northen, Esq., and Vicki L. Parrott, Esq., who have offices in Chapel Hill, North Carolina, represent the Debtor. The Debtor disclosed $1,375,746 in assets and $913,619,139 in debts. Affiliates High Performance Coatings, Inc. (Bankr. M.D. N.C. Case No. 10-11515); MCC, Inc., dba Jet Hot (Bankr. M.D. N.C. Case No. 10-11514); and nTech, Inc. (Bankr. M.D. N.C. Case No. 10-11513) file separate Chapter 11 petitions on Aug. 16, 2010. Julie B. Pape, Esq., and William B. Sullivan, Esq., at Womble Carlyle Sandridge & Rice, PLLC, in Winston-Salem, N.C., represent the Official Committee of Unsecured Creditors. On Sept. 28, 2010, the Bankruptcy Court approved the sale substantially all of the Debtors' assets to Fort Ashford Funds, LLC, subject to higher and better bids at an auction. No bids were received by the Debtors other than the initial bid of Fort Ashford. The sale closed on Oct. 1, 2010 (the "Sale Date"). After the Sale Date, the Debtors ceased all business operations, paid all undisputed secured claims, assumed and assigned certain executory contracts and unexpired leases to the designee of Fort Ashford, and retained two employees to close the books and records and wind up the business affairs of the Debtors. The Debtors, prior to the Sale Date, specialized in nanotechnology research, licensing, and the commercialization, distribution and application of nano-structured as well as multiple non-nano structured surface coatings. The Debtors' specialized coatings were used by the automotive, diesel engine, trucking, recreational vehicle, motorcycle, aerospace and oil and gas industries for heat management, corrosion resistance, friction reduction, bond strength and appearance. NEWPAGE CORP: Files Schedules of Assets and Liabilities ------------------------------------------------------- NewPage Consolidated Paper Inc. filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $6,011,404 B. Personal Property $1,868,734,069 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $2,795,474,335 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $874,133,278 -------------- --------------- TOTAL $1,874,745,473 $3,669,607,614 A copy of NewPage Consolidated's schedules is available for free at http://bankrupt.com/misc/NEWPAGE_CORPORATION_sal.pdf About NewPage Corp. Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers. These papers are used for corporate collateral, commercial printing, magazines, catalogs, books, coupons, inserts, newspapers, packaging applications and direct mail advertising. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a total annual production capacity of roughly 4.1 million tons of paper, including roughly 2.9 million tons of coated paper, roughly 1.0 million tons of uncoated paper and roughly 200,000 tons of specialty paper. NewPage, along with affiliates, filed Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12804) on Sept. 7, 2011. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., Dewey & Leboeuf LLP, in New York, serve as counsel. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, the Debtors disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. At an organizational meeting of creditors held on Sept. 21, 2011, the Committee selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. NewPage prevailed over most objections from the official creditors' committee and won agreement from the bankruptcy judge on final approval of $600 million in secured financing. Moody's Investors Service assigned a Ba2 rating to the $350 million first-out revolving debtor-in-possession credit facility and a B2 rating to the $250 million second-out debtor-in- possession term loan for NewPage. NEWPAGE CORP: Court OKs Deloitte as Tax Services Provider --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized NewPage Corporation and its affiliates to employ Deloitte Tax LLP as their tax and accounting services provider. Deloitte Tax will, among other things: (a) provide advisory services on federal, foreign, state and local tax matters on an as-requested basis; (b) advise the Debtors in their work with their counsel and financial advisors on the cash tax effects of restructuring and bankruptcy and the post-restructuring tax profile, including plan of reorganization tax costs; (c) advise the Debtors regarding the restructuring and bankruptcy emergence process from a tax perspective, including the tax work plan; (d) advise the Debtors on the cancellation of debt income for tax purposes under Internal Revenue Code Section 108; and (e) advise the Debtors as to the proper treatment of postpetition interest for state and federal income tax purposes. The firm's hourly rates are: (i) Under the Tax Advisory Services Engagement Letter Partner/Director $550 Senior Manager $470 Manager $400 Senior $330 Staff $250 (ii) Under the Bankruptcy Tax Consulting Engagement Letter National Partner/Principal/Director $740 Partner/Principal/Director $630 Senior Manager $550 Manager $470 Senior $380 Staff $290 The Debtors will reimburse Deloitte Tax for reasonable expenses, including travel, report production, delivery services, and other expenses incurred in the course of fulfilling its duties as tax and accounting services provider. About NewPage Corp. Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers. These papers are used for corporate collateral, commercial printing, magazines, catalogs, books, coupons, inserts, newspapers, packaging applications and direct mail advertising. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a total annual production capacity of roughly 4.1 million tons of paper, including roughly 2.9 million tons of coated paper, roughly 1.0 million tons of uncoated paper and roughly 200,000 tons of specialty paper. NewPage, along with affiliates, filed Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12804) on Sept. 7, 2011. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., Dewey & Leboeuf LLP, in New York, serve as counsel. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, the Debtors disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. At an organizational meeting of creditors held on Sept. 21, 2011, the Committee selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. NewPage prevailed over most objections from the official creditors' committee and won agreement from the bankruptcy judge on final approval of $600 million in secured financing. Moody's Investors Service assigned a Ba2 rating to the $350 million first-out revolving debtor-in-possession credit facility and a B2 rating to the $250 million second-out debtor-in- possession term loan for NewPage. NEWPAGE CORP: Committee Can Hire Moelis as Investment Banker ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Unsecured Creditors of NewPage Corporation, et al., to retain Moelis & Company as its investment banker. All of Meolis & Company's fees and reimbursement of expenses under the Engagement Letter are approved pursuant to Section 328(a) of the Bankruptcy Code; provided that the Court's approval of the Restructuring Fee is on an "interim basis". The Court entered the Debtors' form of order which properly preserves parties' right to object on the ground of "improvidence" pursuant to Section 328(a). The Committee previously filed a motion for reconsideration of the order denying its retention of Moelis & Company as investment banker. The Committee asserted, "The Court should reconsider the Orders pursuant to Bankruptcy Rules 9023 and 9024 for two reasons. First, the Orders, and in particular the Court's conclusion that only approval of the Completion Fees at the end of the case is appropriate, constitute clear legal error. Second, evidence not available at the Nov. 9 Hearing has now become available -- specifically, the Committee is now able to present testimony that (a) Moelis will not provide investment banking services to the Committee, or expert testimony on behalf of the Committee, if (i) Moelis's Completion Fee is not approved at this initial stage and (ii) any of Moelis's fees are subject to section 330 review by any party other than the Office of the United States Trustee at the end of the case, and (b) the Committee will be hindered in the performance of its fiduciary duties to unsecured creditors by the loss of its professionals of choice." NewPage Corp. objected to the committee's retention saying unsecured creditors are "hopelessly out of the money" with any prospect for recovery "beyond remote." About NewPage Corp. Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers. These papers are used for corporate collateral, commercial printing, magazines, catalogs, books, coupons, inserts, newspapers, packaging applications and direct mail advertising. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a total annual production capacity of roughly 4.1 million tons of paper, including roughly 2.9 million tons of coated paper, roughly 1.0 million tons of uncoated paper and roughly 200,000 tons of specialty paper. NewPage, along with affiliates, filed Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12804) on Sept. 7, 2011. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., Dewey & Leboeuf LLP, in New York, serve as counsel. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, the Debtors disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. At an organizational meeting of creditors held on Sept. 21, 2011, the Committee selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. NewPage prevailed over most objections from the official creditors' committee and won agreement from the bankruptcy judge on final approval of $600 million in secured financing. Moody's Investors Service assigned a Ba2 rating to the $350 million first-out revolving debtor-in-possession credit facility and a B2 rating to the $250 million second-out debtor-in- possession term loan for NewPage. NORGATE METAL: Hearing on Chapter 15 Petition Set for Feb. 2 ------------------------------------------------------------ Ernst & Young Inc., in its capacity as monitor and foreign representative of Norgate Metal Inc., won provisional relief from the U.S. Bankruptcy Court in Massachusetts with respect to its petition for recognition of Norgate's restructuring proceedings in Canada. The U.S. Bankruptcy Court will hold a hearing on Feb. 2 on the Chapter 15 petition. Objections are due by Jan. 30. Ernst & Young is seeking recognition of the proceedings filed before the Quebec Superior Court (Commercial Division) under Canada's Companies' Creditors Arrangement Act as a "foreign main" proceeding under Chapter 15 of the U.S. Bankruptcy Code. Norgate engages in the engineering, manufacturing and installation of steel-based metal structures and related metal work products. It employs roughly 80 people primarily at its principal place of business and manufacturing facilities in the the city of La Guadeloupe, in Quebec, Canada, and maintains administrative offices in St. Georges, Quebec. All of Norgate's administrative and manufacturing operations are performed in Canada, and roughly 20% of its sales and installation business is performed in Canada. Roughly 80% of Norgate's sales and installation business is performed in the United States. Its U.S. assets consist of contracts for the manufacturing and installation of steel structures at construction sites in New England. Norgate has incurred some financial difficulties including having to replace a subcontractor at a project located in New York state with another subcontractor at a significantly increased rate, which resulted in a loss of at least $2,450,000 for the Company. Additionally, between January 2010 and April 2011 the price of steel increased from roughly $120 per metric ton to $135 per metric ton and the value of the Canadian currency compared to the American currency increased from roughly $0.95 to roughly $1. Ernst & Young pointed out that roughly 80% of Norgate's revenues are from sales on the American market, which are paid in American currency, while roughly 50% of its expenses are paid in Canadian currency. As such, the appreciation of the Canadian currency and the corresponding depreciation of the American currency significantly reduced Norgate's revenues, while at the same time increasing its expenses. The combined effects of the sharp increase in the price of steel, the strength of the Canadian currency and the corresponding depreciation of the American currency have resulted in a loss of roughly $2,000,000 since January 2011. Ernst & Young also said in court papers that Norgate's obligations under its construction contracts must often be guaranteed by a bonding insurance company which guarantees the timely execution of Norgate's obligations in favor of its client as well as the payment of the labor and materials supplied to the project. On June 22, 2011, La Garantie, Norgate's bonding insurer for its American clients, informed the Company in writing that it would not bond new projects -- although bonds remain in force on existing projects -- pending the receipt of the latest audited financial statements. Despite its best efforts, Ernst & Young's Norgate's current financial situation has made it difficult to secure an alternative bonding company for projects in the United States, which significantly hinders the Debtor's ability to bid on new projects. In light of the financial difficulties, Norgate is in the process of restructuring its operations, and on Nov. 22, 2011, it filed a petition for the Issuance of an Initial Order pursuant to the CCAA with the Canadian Court. Thereafter, on Nov. 23, 2011, the Canadian Court issued its Initial Order, among other things, (a) authorizing the Debtor to continue to carry on its business and financial affairs in a manner consistent with the commercially reasonable preservation thereof; ordering the Debtor to file with the Canadian Court and submit to their creditors one or more plans of compromise or arrangement under the CCAA; staying commencement or continuation of actions against the Debtor and prohibiting any action or execution against assets, rights or undertakings of the Debtor or that would affect the Debtor's business operations and activities during a defined period; appointing Ernst & Young as monitor; declaring that the Monitor, with the consent of the Debtor, may commence Chapter 15 proceedings in the United States. The Initial Order has been extended through and including Feb. 9, 2012. The Debtor has consented to the Chapter 15 filing. Ernst & Young filed the Chapter 15 petition for Norgate Metal Inc. (Bankr. D. Mass. Case No. 12-40016) on Jan. 4, 2012. Judge Melvin S. Hoffman presides over the case. Stacey Metro, Esq., at Deily Mooney & Glastetter LLP in Albany, New York, represents Ernst & Young. Norgate's unaudited books and records, including but not limited to interim financial statements for the 11-month period ending Sept. 30, 2011, reflect that the vast majority of the Debtor's hard assets are in Canada, and that the book value of the Canadian assets is C$4,200,000 -- roughly $4,041,037. NORTHAMPTON GENERATING: Creditors Meeting Continued until Feb. 8 ---------------------------------------------------------------- The U.S. Bankruptcy Administrator for Western District of North Carolina has continued until Feb. 8, 2012, at 2:00 p.m., the meeting of creditors in the Chapter 11 cases of Northampton Generating Company, L.P. The meeting will be held at the U.S. Bankruptcy Administrator's Office, 402 West Trade Street, Suite 205, Charlotte, North Carolina. 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. The U.S. Trustee was unable to appoint a committee because no one was willing to serve. NORTHERN BERKSHIRE: Files Modified Second Amended Plan and DS ------------------------------------------------------------- Northern Berkshire Healthcare, Inc., et al., filed on Jan. 5, 2012, a Modified Second Amended Disclosure Statement to accompany the Debtors' Modified Second Amended Plan of Reorganization. Pursuant to Section 4.3 of the Plan, each of the Debtors, as Reorganized Debtors, will continue to exist on and after the Effective Date as a separate legal entity, with all the powers available to such legal entity under applicable law and pursuant to the applicable New Constituent Documents, and without prejudice to any right to alter or terminate such existence (whether by merger, sale, or otherwise) in accordance with such applicable law. Except for Class 5 - Other Priority Claims, all Classes of Claims are Impaired under the Plan. Class 5 is Unimpaired, and therefore Holders are deemed to have accepted and are not entitled to vote on the Plan. If the Plan is confirmed by the Bankruptcy Court, the Holders of Allowed Claims related to the MDFA and MHEFA Notes will respectively receive, in full satisfaction and discharge of their Claims, new bonds secured by beneficial interests in the New MDFA Note, New MHEFA Note, and the ECF Notes (and, if NARH or NBH affiliates with another healthcare institution under certain conditions, the Affiliation Notes); the Holder of the Allowed VNA Hoosac Bank Secured Claim will receive proceeds of the sale of the VNA Building up to the Allowed amount of its Secured Claim; the Holders of Allowed Other Secured Claims unrelated to the MDFA and MHEFA Notes or the VNA Building will each receive, in full satisfaction and discharge of their Claims, a New Note secured by the same collateral or other collateral of like value except as otherwise provided in the Plan; and the Holders of Allowed PBGC Prepetition Claims, Allowed General Unsecured Claims, and the Allowed VNA Hoosac Bank Deficiency Claim will receive, in full satisfaction and discharge of their Claims, their Pro-Rata Share of the Post-Effective Trust Interests conditioned on the appropriate Classes voting to accept the Plan. All distributions under the Plan will be made on or as soon as practicable after the Effective Date, except as otherwise provided in the Plan. In addition, ACA has proposed the ACA Insurance Commutation, under which Commuting Bondholders under the MDFA Note may receive up to $5 million from ACA, over and above any recoveries to which Commuting Bondholders would be entitled from the Reorganized Debtors, which reduces the Allowed amount of the MDFA Note Claim and the amount of New MDFA Bonds the Commuting Bondholders will receive. A copy of the Modified Second Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/northernberkshire.doc438.pdf About Northern Berkshire Healthcare Northern Berkshire Healthcare, Inc. is a non-profit healthcare corporation in northern Berkshire County, Massachusetts. Together with its affiliates, Northern Berkshire Healthcare operates the North Adams Regional Hospital and a visiting nurse association and hospice in North Adams, Massachusetts. Northern Berkshire Healthcare, Inc., North Adams Regional Hospital, Inc., Visiting Nurse Association & Hospice of Northern Berkshire, Inc., Northern Berkshire Healthcare Physicians Group, Inc., and Northern Berkshire Realty, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Mass. Case No. 11-31114) on June 13, 2011, to address their overleveraged balance sheet and effect a reorganization of their operations. On the same day, Northern Berkshire Community Services, Inc., filed a petition for Chapter 7 relief also in the District of Massachusetts bankruptcy court. Judge Henry J. Boroff presides over the Debtors' cases. Steven T. Hoort, Esq., James A. Wright, III, Esq., Jonathan B. Lackow, Esq., and Matthew F. Burrows, Esq., at Ropes & Gray LLP, in Boston, Mass., serve as the Debtors' bankruptcy counsel. The Debtors' Financial Advisors are Carl Marks Advisory Group LLC. GCG Inc. serves as claims and noticing agent. Northern Berkshire disclosed $22,957,933 in assets and $53,379,652 in liabilities as of the Chapter 11 filing. The petition was signed by William F. Frado, Jr., president. William K. Harrington, the U.S. Trustee for Region 1, appointed five members to the official unsecured creditors' committee in the Debtors' cases. The Committee tapped Duane Morris LLP as its counsel. OVERLAND STORAGE: Expects $15 Million Revenue for Q2 Fiscal 2012 ---------------------------------------------------------------- Overland Storage announced preliminary financial results for its fiscal 2012 second quarter ended Dec. 31, 2011. Based on preliminary financial results, the Company expects to exceed its operating efficiency improvement guidance and meet its prior expectations for second quarter revenue. Based on preliminary financial results, the Company expects: * Second quarter revenue of approximately $15.0 million * A more than 5% sequential reduction in second quarter operating expenses * A more than 10% reduction in operating expenses for third quarter fiscal 2012 when compared to the first quarter Overland reported during the second fiscal quarter that the International Trade Commission action and district court action against IBM and Dell had been resolved by settlement. Overland's infringement suit against BDT is ongoing, with an initial determination date from the ITC scheduled to be released on Jan. 26, 2012. The company remains optimistic about the case and is represented by DLA Piper LLP. "We are pleased to announce that our preliminary revenue for the second quarter is in line with expectations and our preliminary and future operating expense improvements will exceed our guidance," said Eric Kelly, President and CEO of Overland Storage. "While we have seen an industry-wide increase in the price of disk drives as a result of supply shortages caused by the devastating flood in Thailand, we were able to procure adequate quantities during the quarter to meet demand. We continue to see strong customer acceptance for our new SnapServer DX storage solution and look forward to giving more detail in the coming months." The financial results and operating information are preliminary and subject to change. Overland is in the process of finalizing its financial results for its fiscal 2012 second quarter ended Dec. 31, 2011, and the Company plans to report its final financial results in February 2012. About Overland Storage San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) -- http://www.overlandstorage.com/-- is a global provider of unified data management and data protection solutions designed to enable small and medium enterprises (SMEs), corporate departments and small and medium businesses (SMBs) to anticipate and respond to change. The Company reported a net loss of $14.50 million on $70.19 million of net revenue for the fiscal year ended June 30, 2011, compared with a net loss of $12.96 million on $77.66 million of net revenue during the prior fiscal year. Moss Adams LLP, in San Diego, California, noted that the Company's recurring losses and negative operating cash flows raise substantial doubt about the Company's ability to continue as a going concern. PARMALAT SPA: Italian Court Adds 9 Years to C. Tanzi's Sentence --------------------------------------------------------------- A court in Parma, Italy, gave Parmalat S.p.A. founder Calisto Tanzi an additional nine years and two months prison-term, Agenzia Giornalistica Italia reported. The additional sentence was handed down last month after a trial involving Parmatour, Mr. Tanzi's tourism sector, which he allegedly used to hide a pile of debt from investigators, the report related. Mr. Tanzi was jailed in Parma on May 5 last year after an Italian court's definitive ruling in a market abuse case stemming from the dairy company's collapse in 2003. In the December 2011 ruling, the Parma court found Mr. Tanzi guilty of fraudulent bankruptcy. The Parma court also handed sentences to these people involved in the case: -- Giuseppe Fioravanti, 8 years; -- Nicola Catelli, 7 years; -- Camillo Florini, 5 years and 8 months; -- Oreste Luciani, 5 years and 3 months; -- Pasquale Cavaterra, 5 years; -- Businessman Gianluca Vacchi, 3 years and 6 months; and -- Paolo Sciume, 2 years and 4 months. The Parma Court ordered Parmalat and tourist agency affiliates to pay a provisional EUR120 million while the prosecution gets approximately 4% of the stock. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court declared the units insolvent. On June 22, 2004, Dr. Bondi, on behalf of the Italian entities, sought protection from U.S. creditors by filing a petition under Sec. 304 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 04-14268). Parmalat's U.S. operations filed for Chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represented the U.S. Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Three special-purpose vehicles established by Parmalat S.p.A. -- Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. -- commenced separate winding up proceedings before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. were appointed liquidators in the cases. On Jan. 20, 2004, the Liquidators filed a Sec. 304 petition (Bankr. S.D.N.Y. Case No. 04-10362). Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represented the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presided over the Parmalat Debtors' U.S. cases and Sec. 304 cases. In 2007, Parmalat obtained a permanent injunction in the Sec. 304 cases. PARMALAT SPA: Italian Court Convicts Geronzi and Arpe for Fraud --------------------------------------------------------------- Bankers Cesare Geronzi and Matteo Arpe were convicted by an Italian court for fraudulent bankruptcy connected to their sale of Ciappazzi, a water company, to Parmalat S.p.A., Bloomberg News reported on Nov. 29, 2011. The report said the Italian court sentenced Mr. Geronzi to five years in prison and Mr. Arpe to three years and seven months. Mr. Geronzi's lawyer, Ennio Amodio, said the ruling is "profoundly unfair," Bloomberg quoted Radiocor news agency. Both of the bankers, the report said, have denied any wrongdoing. In July 2008, a judge in a Parma court transferred the case against Mr. Geronzi to Rome for jurisdictional reasons. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court declared the units insolvent. On June 22, 2004, Dr. Bondi, on behalf of the Italian entities, sought protection from U.S. creditors by filing a petition under Sec. 304 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 04-14268). Parmalat's U.S. operations filed for Chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represented the U.S. Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Three special-purpose vehicles established by Parmalat S.p.A. -- Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. -- commenced separate winding up proceedings before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. were appointed liquidators in the cases. On Jan. 20, 2004, the Liquidators filed a Sec. 304 petition (Bankr. S.D.N.Y. Case No. 04-10362). Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represented the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presided over the Parmalat Debtors' U.S. cases and Sec. 304 cases. In 2007, Parmalat obtained a permanent injunction in the Sec. 304 cases. PARMALAT SPA: NJ Court Rejects Claim Against Citigroup ------------------------------------------------------ The New Jersey Appellate Division has affirmed a lower court's decision rejecting Parmalat's claims against Citigroup for aiding and abetting breach of fiduciary duty in connection with looting that occurred at Parmalat prior to December 2003, Parmalat related through a press release on December 23, 2011. The Appellate Court has also affirmed the lower court's decision to award Citi $364 million plus interest as a judgment on its counterclaims against Parmalat. The aware has grown to more than $431 million, including interest, BankruptcyLaw360 said. Pursuant to previous rulings of the U.S. Bankruptcy Court, the award must be presented to the Bankruptcy Court in Parma, Italy for review. If admitted, payment should be made in Parmalat shares, approx 7% of the amount awarded, subject to the recovery ratios applied to claims under the Parmalat "concordato." Citigroup's Italian unit commented in an e-mailed statement, saying, "This decision represents the latest in a series of 21 Parmalat court rulings in the United States and in Italy, all in favor of Citi." Parmalat is exploring its options for a further appeal, the company statement said. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court declared the units insolvent. On June 22, 2004, Dr. Bondi, on behalf of the Italian entities, sought protection from U.S. creditors by filing a petition under Sec. 304 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 04-14268). Parmalat's U.S. operations filed for Chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represented the U.S. Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Three special-purpose vehicles established by Parmalat S.p.A. -- Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. -- commenced separate winding up proceedings before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. were appointed liquidators in the cases. On Jan. 20, 2004, the Liquidators filed a Sec. 304 petition (Bankr. S.D.N.Y. Case No. 04-10362). Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represented the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presided over the Parmalat Debtors' U.S. cases and Sec. 304 cases. In 2007, Parmalat obtained a permanent injunction in the Sec. 304 cases. PROVISION HOLDING: Incurs $665,000 Net Loss in March 31 Quarter --------------------------------------------------------------- Provision Holding, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $665,520 on $63,056 of revenue for the three months ended March 31, 2011, compared with a net loss of $1.66 million on $8,446 of revenue for the same period a year ago. For the nine months ended March 31, 2011, the Company reported a net loss of $1.99 million on $285,555 of revenue, compared with a net loss of $3.78 million on $143,905 of revenue for the same period a year ago. The Company's balance sheet at March 31, 2011, showed $1.16 million in total assets, $6.06 million in total liabilities and a $4.89 million total stockholders' deficit. As reported in the Troubled Company Reporter on Nov. 23, 2010, Farber Hass Hurley LLP, in Camarillo, California, expressed substantial doubt about Provision Holding, Inc.'s ability to continue as a going concern, following the Company's fiscal year ended June 30, 2010. The independent auditors noted that the Company has incurred significant losses in 2010 and 2009 and has negative working capital of $4.3 million. A full-text copy of the Form 10-Q is available for free at: http://is.gd/1sr8vC About Provision Holding Based in Chatsworth, Calif., Provision Holding, Inc., is focused on the development and distribution of its patented three- dimensional, holographic interactive displays focused at grabbing and holding consumer attention particularly and initially in the advertising and product merchandising markets. PURE BEAUTY: Wants Until May 1 to Propose Chapter 11 Plan --------------------------------------------------------- Pure Beauty Salons & Boutiques, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to file and solicit acceptances for the proposed Chapter 11 Plan until May 1, 2012, and June 28, 2012, respectively. The Debtors' exclusive filing period will expire on Feb. 1, and their exclusive solicitation period will expire on March 30. According to the Debtors, the initial exclusive periods afforded by the Court have not afforded the Debtors with sufficient time to both conduct the sale process and reconcile the issues that have arisen in conjunction with the negotiation of the sale and their obligations under the APA and the contemplated sale order. The Debtors set a Jan. 19 hearing at 2:00 p.m., on their requested exclusivity extensions. About Pure Beauty Pure Beauty Salons & Boutiques, Inc., and its affiliated company BeautyFirst Franchise Corp., operate a chain of hair care and beauty supply stores under the trade names Trade Secret, Beauty Express, BeautyFirst, PureBeauty, and Winston's Barber Shop. Pure Beauty Salons & Boutiques, Inc. operates and/or owns 436 stores and BeautyFirst Franchise Corp. has agreements with 13 franchisees that operate 22 BeautyFirst and 7 Trade Secret Stores. Pure Beauty Salons & Boutiques, Inc., is back in Chapter 11 after having been sold out of Chapter 11 last year. The prior case was dismissed after the sale was completed. The previous case was In re Trade Secret Inc., 10-12153, in the same court. Pure Beauty Salons filed for bankruptcy (Bankr. D. Del. Case No. 11-13159) on Oct. 4, 2011. Affiliate BeautyFirst Franchise Corp. filed a separate petition (Bankr. D. Del. Case No. 11-13160). Joseph M. Barry, Esq., Kenneth J. Enos, Esq., and Ryan M. Bartley, Esq., at at Young Conaway Stargatt & Taylor, LLP, serve as the Debtors' counsel. The Debtors' investment banker is SSG Capital Advisors' J. Scott Victor -- jsvictor@ssgca.com The Debtors' notice, claims solicitation, and balloting agent is Epiq Bankruptcy Solutions. In its schedules, Pure Beauty Salons disclosed $36,444,963 in assets and $55,215,590 in liabilities as of the Petition Date. In its schedules, BeautyFirst Franchise disclosed $1,716,985 in assets and $36,761,086 in liabilities as of the Petition Date. The Debtors owe $15 million to vendors and landlords. The petition was signed by Brian Luborsky, chief executive officer. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Pure Beauty Salons. Attorneys at Pachulski Stang Ziehl & Jones LLP represent the Committee. LM+Co serves as their financial advisor. Secured lender Regis Corp. is represented in the case by Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath Nauman & Tansey P.A., and Kathleen M. Miller, Esq., at Smith Katzenstein & Furlow LLP. PURE BEAUTY: Wants Lease Decision Period Extended Until May 1 ------------------------------------------------------------- Pure Beauty Salons & Boutiques, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend until May 1, 2012, the deadline to assume or reject unexpired leases of nonresidential real property. The Debtors' lease decision period will expire on Feb. 1, 2012. The Debtors relate that the Court approved on Nov. 23, 2011, the bidding and sale process. Pursuant to the asset purchase agreement entered among the Debtors, Regis Corporation, and the assignee, the purchaser agreed to acquire substantially all of the Debtors' assets for an aggregate consideration of $18 million (plus the assumption of certain liabilities estimated to be worth $3.5 million), subject to adjustment to be made through the date of closing. In this relation, the proposed purchaser will have the right to modify the list of assigned and designated contracts until the closing of the sale, for a period of 90 days, subject to the time limits established under Section 365(d)(4) of the Bankruptcy Code. The Court will consider the sale of the assets to Regis Corporation or the winning bidder at a hearing scheduled for Jan. 19, at 2:00 p.m. About Pure Beauty Pure Beauty Salons & Boutiques, Inc., and its affiliated company BeautyFirst Franchise Corp., operate a chain of hair care and beauty supply stores under the trade names Trade Secret, Beauty Express, BeautyFirst, PureBeauty, and Winston's Barber Shop. Pure Beauty Salons & Boutiques, Inc. operates and/or owns 436 stores and BeautyFirst Franchise Corp. has agreements with 13 franchisees that operate 22 BeautyFirst and 7 Trade Secret Stores. Pure Beauty Salons & Boutiques, Inc., is back in Chapter 11 after having been sold out of Chapter 11 last year. The prior case was dismissed after the sale was completed. The previous case was In re Trade Secret Inc., 10-12153, in the same court. Pure Beauty Salons filed for bankruptcy (Bankr. D. Del. Case No. 11-13159) on Oct. 4, 2011. Affiliate BeautyFirst Franchise Corp. filed a separate petition (Bankr. D. Del. Case No. 11-13160). Joseph M. Barry, Esq., Kenneth J. Enos, Esq., and Ryan M. Bartley, Esq., at at Young Conaway Stargatt & Taylor, LLP, serve as the Debtors' counsel. The Debtors' investment banker is SSG Capital Advisors' J. Scott Victor -- jsvictor@ssgca.com The Debtors' notice, claims solicitation, and balloting agent is Epiq Bankruptcy Solutions. In its schedules, Pure Beauty Salons disclosed $36,444,963 in assets and $55,215,590 in liabilities as of the Petition Date. In its schedules, BeautyFirst Franchise disclosed $1,716,985 in assets and $36,761,086 in liabilities as of the Petition Date. The Debtors owe $15 million to vendors and landlords. The petition was signed by Brian Luborsky, chief executive officer. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Pure Beauty Salons. Attorneys at Pachulski Stang Ziehl & Jones LLP represent the Committee. LM+Co serves as their financial advisor. Secured lender Regis Corp. is represented in the case by Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath Nauman & Tansey P.A., and Kathleen M. Miller, Esq., at Smith Katzenstein & Furlow LLP. RESORTS DEVELOPMENT: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Resorts Development Group II, LLC dba Country Crossing Center Stage 300 Country Crossing Parkway Cottonwood, AL 36320 Bankruptcy Case No.: 12-30054 Chapter 11 Petition Date: January 9, 2012 Court: U.S. Bankruptcy Court Middle District of Alabama (Montgomery) Judge: William R. Sawyer Debtor's Counsel: Frederick M. Garfield, Esq. GARFIELD LAW FIRM, LLC 1330 21st Way S., Suite G-10 Birmingham, AL 35205 Tel: (205) 558-4999 Fax: (205) 558-4997 E-mail: dianavest@gmail.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $50,000,001 to $100,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Trish Don Francesco, director/manager. ROBB & STUCKY: Settlement and Release Deal with BofA Gets Final OK ------------------------------------------------------------------ The Hon. Caryl E. Delano of the U.S. Bankruptcy Court for the Middle District of Florida approved, on a final basis, settlement and release agreement between Robb & Stucky Limited LLLP, and Bank of America, N.A. Pursuant to the settlement and release agreement dated Nov. 9, 2011, among other things: -- all claims in favor of lender are finally allowed as fully secured claims in the Chapter 11 case; -- the lender has fully and finally satisfied all of its obligations in respect of the Unwind Expense Commitment, the Official Committee of Unsecured Creditors will continue to be entitled to notice and the opportunity to object to the reasonableness of legal fees and expenses incurred by lender; and -- the agreement will inure to the benefit of the respective representatives, successors and assigns of each party and, except as may be expressly agreed by lender in its discretion, will not be amended or altered by the dismissal of the Chapter 11 case or any Chapter 11 plan of reorganization or liquidation proposed by the Debtor or confirmed by the Court. In a hearing held Jan. 11, 2012, the Court has continued until March 16, 2012, at 9:30 a.m., the hearing to consider the request to dismiss or convert the Debtor's case, and approve of the settlement agreement among the Debtor, the Collier Lenders, and the Official Committee of Unsecured Creditors. About Robb & Stucky Sarasota, Florida-based Robb & Stucky Limited LLLP -- dba Robb & Stucky; Robb & Stucky Interiors; Fine Design Interiors, a division of Robb & Stucky; Robb & Stucky Patio; R&S Home of Fine Decorators; and Home of Fine Design by Robb & Stucky -- operated a chain of 24 retail stores offering "high-end home furnishings" in five states. Robb & Stucky filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 11-02801) on Feb. 18, 2011. Paul S. Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman PA, serve as the Debtor's bankruptcy counsel. FTI Consulting, Inc., is the Debtor's advisor and Kevin Regan is the Debtor's chief restructuring officer. Bayshore Partners, LLC, is the Debtor's investment banker. AlixPartners, LLP, serves as the Debtor's communications consultants. Epiq Bankruptcy Solutions, LLC, serves as the Debtor's claims and notice agent. In its schedules, the Debtor disclosed $77,705,081 in assets and $91,859,125 in liabilities as of the Chapter 11 filing. Donald F. Walton, U.S. Trustee for Region 21, appointed the Official Committee of Unsecured Creditors in the Debtor's case. The Committee tapped Cooley LLP as its lead counsel; Broad and Cassel as its local bankruptcy counsel; and BDO USA LLP as its financial advisor. SEARS HOLDINGS: Suffers Setback as Large Lender Balks ----------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that struggling Sears Holdings Corp. suffered another setback when a large lender said it would no longer finance loans to suppliers awaiting payment from the company. About Sears Holdings Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- is the nation's fourth largest broadline retailer with more than 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a 94% stake in Sears Canada and an 80.1% stake in Orchard Supply Hardware. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. Kmart completed its merger with Sears on March 24, 2005. Negative Outlook Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Ill.-based Sears Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with negative implications on Dec. 28, 2011. We are also lowering the short-term and commercial paper rating to 'C' from 'B-2'. The rating outlook is negative," S&P said. "The corporate credit rating reflects our projection that Sears' EBITDA will be negative in 2012, given our expectations for continued sales and margin pressure," said Standard & Poor's credit analyst Ana Lai. She added, "We further expect that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses." Moody's Investors Service in January 2012 lowered Sears Holdings Family and Probability of Default Ratings to B3 from B1. The outlook remains negative. At the same time Moody's affirmed Sears' Speculative Grade Liquidity Rating at SGL-2. The rating action reflects Moody's expectations that Sears will report a significant operating loss in fiscal 2011. Moody's added that the rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers. SINO-FOREST CORP: Noteholders Waive Default Under Senior Notes -------------------------------------------------------------- Sino-Forest Corporation disclosed that holders of a majority in principal amount of its Senior Notes due 2014 and its Senior Notes due 2017 have agreed to waive the default arising from the Company's failure to release its 2011 third quarter financial results on a timely basis. The Company also announced the terms under which its noteholders agreed to waive the default. As disclosed in the Company's Dec. 18, 2011 press release, Sino- Forest received written notices of default dated Dec. 16, 2011 in respect of its two series of Senior Notes. The notices referenced the Company's previously disclosed failure to release the Q3 Results on a timely basis. The Company's breach of the Senior Note Indentures relating to the Q3 Results could be waived for a series of Senior Notes by the holders of at least a majority in principal amount of that series. Following extensive discussions with an ad hoc committee of noteholders, holders of a majority in principal amount of the Company's two series of Senior Notes agreed to waive the default. The material terms of the waiver agreements are described below. Payment of Interest on Notes Pursuant to the waiver agreements, the Company has agreed to make the US$9.775 million interest payment on its 2016 Convertible Notes that was due on Dec. 15, 2011. The Company also has agreed to continue to pay when due interest on the Convertible Notes due 2013 and 2016 and on the Senior Notes due 2014 and 2017. The Company has agreed to pay a waiver fee of 1% of the principal amount to all holders of the Senior Notes due 2014 and 2017. The aggregate waiver fee to be paid is US$9,991,870. In addition, the Company has agreed to pay the fees of the advisors to the Ad Hoc Noteholders. Goodmans LLP and Hogan Lovells LLP are acting as legal advisors to the Ad Hoc Noteholders. Release of Q3 Financial Results Sino-Forest has agreed to use its reasonable best efforts to address outstanding issues noted in its press release dated Dec. 12, 2011 in order to file its Q3 Results. Ontario Securities Commission Cease Trade Order On Aug. 26, 2011, the Ontario Securities Commission issued a temporary cease trade order against the Company and others. On Sept. 8, 2011, the Company consented to an extension of the cease trade order against the Company to Jan. 25, 2012. The Company has agreed to a further extension of the cease trade order, and there are ongoing discussions between the Company and staff of the Ontario Securities Commission with respect to the term of any extension. In the waiver agreements, the Company has agreed to file an application to lift the cease trade order as soon as practicable. Maintenance of Cash Balances The Company has agreed that it and its subsidiaries will maintain in aggregate a minimum cash balance inside the People's Republic of China (excluding Hong Kong) of US$165 million and a minimum cash balance outside of the People's Republic of China (including Hong Kong) of US$140 million. The Company also has agreed to take steps to manage liquidity and to monetize assets for the repayment of the Company's indebtedness. Strategic Plan The Company has agreed to provide a strategic plan to the Ad Hoc Committee Advisors on or before March 31, 2012, and to keep them informed of the progress of this effort. The strategic plan will include an indicative timeline for any sale process, capital or equity process and will address to the extent practicable such other steps that are necessary to maximize value in respect of the Company's assets. Governance The Company also has agreed that the constitution and size of, and governance matters related to, the Board of Directors of the Company and any committees, including the Strategic Restructuring Committee of the Board of Directors, will be satisfactory to the Ad Hoc Committee Advisors, on behalf of the Ad Hoc Noteholders, by no later than March 31, 2012. Thereafter, any governance changes must be satisfactory to the Ad Hoc Committee Advisors on behalf of the Ad Hoc Noteholders. Sino-Forest has agreed that there shall be no appointment of any new members to the Board of Directors, senior officers or any chief restructuring officer unless such appointment is on terms satisfactory to the Ad Hoc Committee Advisors on behalf of the Ad Hoc Noteholders. Access to Information To the extent permitted by law and the terms of any contractual confidentiality obligations, the Company has agreed to provide the Ad Hoc Committee Advisors with access to the Company's premises, assets, accounts, books and records, and to make advisors to the Company and appropriate officers of the Company with relevant information available for discussions with these advisors. The Ad Hoc Committee Advisors have executed confidentiality agreements with the Company. The waiver agreements contemplate that the Ad Hoc Noteholders also may receive confidential information upon execution of confidentiality agreements in a form acceptable to the Company. The Company has also agreed to keep the Ad Hoc Committee Advisors reasonably informed regarding any material discussions with any party with respect to any material transactions concerning the Company. Where deemed appropriate by the Company, the Company also will provide the Ad Hoc Noteholders or the Ad Hoc Committee Advisors with an opportunity to participate in such discussions. Restrictions on Material Transactions The waiver agreements also contain restrictions on the Company's ability to enter into material transactions, sell all or substantially all of its assets, and to enter into transactions outside of the ordinary course of business. The Company has agreed not to make or pay any dividend, charge, fee or other distribution to its shareholders or subsidiaries. The Company has agreed to restrictions on the additional indebtedness it may incur. Final Report of the Independent Committee The Company has agreed that the Independent Committee of the Board of Directors will deliver its final report and that such report will be made public by Jan. 31, 2012. Thereafter, any residual matters or issues identified in the final report or earlier reports of the Independent Committee shall be addressed by the Company and its advisors in consultation with the Ad Hoc Committee Advisors. The Company believes that any residual matters or issues identified by the Independent Committee are best and more efficiently addressed by the Audit Committee or the Special Restructuring Committee, working in consultation with the Ad Hoc Committee Advisors. Conditions to and Termination of Waiver The waiver will terminate on the earlier of April 30, 2012 and any earlier termination of the waiver agreements in accordance with their terms, unless extended by the parties. The waiver agreements contain covenants (many of which have to be satisfied by March 31, 2012), the breach of which would entitle the Ad Hoc Noteholders to terminate the waiver upon 30 days notice to the Company. In addition, the waivers will immediately terminate upon the Company or any of its subsidiaries becoming subject to certain insolvency, receivership or bankruptcy proceeding without the prior written consent of holders of a majority of the principal amount of the series of notes to which the waiver relates. About Sino-Forest Sino-Forest Corporation -- http://www.sinoforest.com/-- is a commercial forest plantation operator in China. Its principal businesses include the ownership and management of tree plantations, the sale of standing timber and wood logs, and the complementary manufacturing of downstream engineered-wood products. Sino-Forest also holds a majority interest in Greenheart Group Limited , a Hong-Kong listed investment holding company with assets in Suriname (South America) and New Zealand and involved in sustainable harvesting, processing and sales of its logs and lumber to China and other markets around the world. Sino-Forest's common shares have been listed on the Toronto Stock Exchange under the symbol TRE since 1995. SOUTH GATE: S&P Lowers Rating on Certificates to 'BB+' ------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating 'BB+' from 'A' on South Gate, Calif.'s 2002A and 2002B certificates of participation (COPs) outstanding. The rating change reflects Standard & Poor's withdrawal of its rating on California's motor vehicle license fee (MVLF) program, including the city's series 2002A and 2002B COPs; in addition, the rating change reflects the creditworthiness of the city's lease payments supporting its COPs. At the same time Standard & Poor's affirmed its 'BB+' long-term rating and underlying rating (SPUR) on South Gate, Calif.'s pension obligation bonds (POBs). The outlook on all ratings is stable. "The 'BB+' rating reflects our view that the city's financial position will likely improve according to management's projection, said Standard & Poor's credit analyst Jennifer Hansen. "It also takes into account our expectation that the city will maintain a positive general fund balance despite recent budget challenges and projections of future general fund drawdowns. Should the city be able to maintain reserves at levels we consider to be adequate, we could raise the rating in the two-year outlook timeline. Conversely, should reserves again fall to negative balances, we could lower the rating," added Ms. Hansen. Previously, the MVLF program rating reflected the city's election to include the series 2002A and 2002B COPs in this program at the time of issuance. The California Senate recently enacted SB89, which eliminated direct state payment of MVLF revenue as general purpose revenue to local governments in the fiscal 2012 budget. The bill redirected MVLF revenue to provide public safety grants. SUMMIT MATERIALS: Moody's Rates $220MM Sr. Sec. Notes at 'B3' ------------------------------------------------------------- Moody's assigned B1 ratings to Summit Materials' proposed $550 million senior secured credit facilities, consisting of $150 million revolving credit facility due 2017 and $400 million term loan B facility due 2019, and a B3 rating to the proposed $220 million senior unsecured notes due 2020. The probability of default rating was raised to B2 from B3, and the corporate family rating was affirmed at B2. The rating outlook is stable. The ratings for the existing debt instruments will be withdrawn once repaid. The company is refinancing its existing $475 million senior secured credit facilities with new senior secured credit facilities and senior unsecured notes totaling $770 million, including the largely undrawn $150 million revolver. The transaction will extend the company's debt maturity profile, and increase available liquidity. Aside from the refinancing, the proceeds of the transaction are expected to be used to fund future acquisitions. The upgrade of the probability of default rating to B2 from B3 results from the introduction of senior unsecured debt in the company's capital structure versus its previous all bank debt structure, and a resultant adjustment to Moody's assumptions about likely corporate family recovery ratings. The following rating actions were taken: $400 million senior secured term loan B due 2019, assigned B1, LGD-3, 40% $150 million senior secured revolving credit facility due 2017, assigned B1, LGD-3, 40% $220 million senior unsecured notes due 2012, assigned B3, LGD-5, 76% The following rating actions were raised: Probability of default rating, raised to B2 from B3 The following ratings were affirmed: Corporate family rating, affirmed B2 Ratings Rationale The B2 corporate family rating balances Summit's small (albeit growing) scale, limited geographic diversity, and prospective acquisition, integration, and execution risks against the company's experienced management team, reasonable credit metrics, and equity support for acquisitions from its majority owner, Blackstone. The company's acquisition driven growth strategy presents a range of credit risks in the near term, including potential changes in the balance of its capital structure, and integration and execution risks. However, over a longer time horizon, if well executed, the plan will help the company build scale and improve its risk profile. The upgrade of the B2 probability of default rating reflects the change in the capital structure. The stable outlook benefits from improved scale and geographic diversification that results from a spate of recent acquisitions, partially offsetting increased debt. The stable outlook presumes that the company will maintain its relatively modest financial leverage profile even as it seeks further acquisition-driven growth by focusing on reasonably priced acquisition opportunities and funding a portion of the acquisitions with equity provided by its majority owner. The stable outlook also anticipates that management will prove able to efficiently integrate and operate newly acquired properties. If the company succeeds in building scale, successfully integrates acquisitions, and maintains healthy organic ("same-store") operating performance, modest financial leverage characteristics, and generates free cash flow, the rating could be upgraded. If the company fails to maintain its currently modest pro-forma financial leverage profile as it pursues acquisitions, or its organic operating performance declines sharply due to economic weakness or management missteps, the rating could be lowered. The principal methodology used in rating Summit was the Global Building Materials 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. Summit Materials Companies I, LLC is a building materials company primarily operating in Kentucky, Kansas, Utah, Missouri and Texas. It is owned by the Blackstone Group, Silverhawk Capital Partners, and senior management (small minority). The owners intend to use the company as an acquisition / roll-up vehicle in the building materials space, focusing on aggregates, ready mix concrete, asphalt and cement. Blackstone ($750 million), Silverhawk ($35 million) and senior management ($5 million) have earmarked, subject to investment committee approval, up to $785 million of equity to facilitate future acquisitions. To date, the equity sponsors have allocated approximately $450 million of common equity to facilitate 12 acquisitions. TEAM NATION: Company Name Changed to "Imperial Americas" -------------------------------------------------------- Team Nation Holdings, Corp., on Jan. 5, 2012, had the majority controlling interest changed to the control of Emperial Americas, through the purchase of four sets of Series A Preferred Shares by Victory Partners, LLC. In a private sale, the four main holders of 60 Series A Preferred Shares, being Dennis R. Duffy (15 preferred shares) Janet Okerlund (15 preferred shares), Daniel Duffy (15 preferred shares) and Norman Francis (15 preferred shares). Additionally, Victory Partners received the rights to 1 billion common shares held by the same four individuals in the amount of 250 million shares each. Those shares were purchased by Victory Partners, and thus controlling interest of the Company was passed while simultaneously, a share exchange agreement was entered into for simultaneous exchange of such preferred shares with Victory Partners, for a sum of $475,000 to be owed to Victory Partners from the Emperial Americas. Additionally Victory Partners negotiated the purchase and assignment of some $720,000 in debt owed to the four parties previously due from Team Nation Holdings, Corp. At the time of the agreement, the following private entities were diverged from the entity upon the acquisition of Emperial Americas interest into the Corporation on January 5, 2012. The following entities were: Real Estate Services Holding, Inc. a California Corporation Team Nation Holding Corporation, a California Corporation Team Title, Inc. a Delaware Corporation Escrow Nation, Inc. a California Corporation TSS Escrow, Inc. a California Corporation On Jan. 5, 2012, the Board of Directors executed resolutions whereby the name of the Corporation was changed to Emperial Americas, Inc., and the address of the Corporation was to be made at Emperial Americas, Inc., located at Sarasota Courthouse Center, 1990 Main Street, Suite 150, Sarasota, Florida 34236. Emperial Americas and Victory Partners were indemnified against all claimants for any debt to which there may exist from Team Nation Operations by the selling shareholders of their preferred shares. On Jan. 5, 2012, the Board of Directors appointed Alonzo Pierce as director of the Corporation. On that same date, the Corporation received the resignations of Janis Okerlund as President and director, Norman J. Francis as Executive Vice President and director, Dennis R. Duffy, as the Chief Executive Officer and director, and Daniel Duffy, as Executive Vice President, Chief Financial Officer. There were no disputes with any of these parties, as their departure was as per agreement for the stock purchase of their preferred and common shares. On Jan. 5, 2012, the Majority Shareholder of the Corporation, being Victory Partners, LLC, approved and voted for the appointment of Alonzo Pierce as Chief Executive Officer, President and Director of the Company. As well Mr. Bruce Klein was appointed to be Corporate Secretary, Chief Operating Officer and Director, Mr. Joel Contreras, was appointed to the Board of Directors, while Mr. Todd Waggoner was appointed Treasurer and Chief Financial Officer. The current Executive officers and Directors of Company are: Name Position ---- -------- Alonzo Pierce Chief Executive Officer, and Director Bruce Klein Chief Operating Officer, Secretary and Director (Chairman) Todd Waggoner Chief Financial Officer and Treasurer Joel Contreras Director A full-text copy of the Form 8-K is available for free at: http://is.gd/ZD6Zn4 About Team Nation Newport Beach, Calif.-based Team Nation Holdings Corporation is a management and services company specializing in management solutions for title companies and providing title production services. The Company reported net income of $323,051 on $1.08 million of total revenue for the nine months ended Sept. 30, 2011, compared with net income of $375,694 on $1.25 million of total revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $3.04 million in total assets, $5.57 million in total liabilities, and a $2.52 million total shareholders' deficit. As reported by the TCR on April 13, 2011, Kelly & Company, in Costa Mesa, Calif., said in its report that the Company's significant debt servicing requirements, its ongoing operating losses and negative cash flows along with the depressed value of its common stock gives raise to substantial doubt about the Company's ability to continue as a going concern. The Company has sustained recurring losses and negative cash flows from operations, at Dec. 31, 2010 it had negative working capital of $4.2 million, total liabilities of $6.9 million, and a stockholders' deficit of $3.9 million. The Company's only significant source of revenue, and its sole customer, is a related party. The Company expects that it will need to raise substantial additional capital to accomplish its business plan over the next several years and plans to generate the additional cash needed through the sale of its common stock that currently has a depressed value. The Company's most significant asset is a group of eight non-current notes receivable - related party issued by the Company's directors, amounting to $2.2 million at Dec. 31, 2010 (representing 73% of total assets). TMP DIRECTIONAL: Files Schedules of Assets and Liabilities ---------------------------------------------------------- A copy of TMP Directional Marketing, LLC, filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $0 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims $89,239 F. Creditors Holding Unsecured Non-priority Claims $120,743,605 ------------ ------------ TOTAL $33,058,884 $120,832,845 A copy of TMP Directional Marketing's schedules is available for free at http://bankrupt.com/misc/TMP_DIRECTIONAL_sal.pdf About TMP Directional Marketing TMP Directional Marketing LLC, along with affiliates, filed for bankruptcy (Bankr. D. Del. Case No. 11-13835) with plans to liquidate its remaining assets according to a prepackaged plan. TMP specialized in placing ads in the yellow pages of local telephone books. Before ceasing substantially all of operations in early April 2011, TMP was one of the leading providers of directed search marketing in the United States, employing nearly 400 people in 10 offices throughout the country. TMP was spun off from Monster Worldwide Inc. Audax Group acquired TMP in the 2005 spinoff. Monster isn't in bankruptcy and is no longer involved in the company. The Chapter 11 plan has been accepted by more than 95% of voting creditors. The Company estimated that unsecured creditors will collect 11% to 18% of what they are owed. Secured lenders required TMP to pay them off earlier this year, helping cause the business to shut down. Unsecured creditors, asserting $112 million in claims, formed an ad hoc committee to negotiate the Chapter 11 plan. The Ad Hoc Committee consists of AT&T Yellow Pages Holdings LLC; Genesis Publisher Services, SuperMedia LLC, Dex One Corporation, Directory Publishing Solutions Inc., Local Insight Media Holdings Inc., National Solutions, Inc., Yellowbook, Inc., and Names and Numbers. Other members may be added from time to time. TMP's petition disclosed assets of $65.3 million, with debt totaling $134.8 million. Among the debt, $132.9 million is unsecured. James A. Stempel, Esq., and Ryan Blaine Bennett, Esq., at Kirkland & Ellis LLP; and Domenic E. Pacitti, Esq., and Morton Branzburg, Esq., at Klehr Harrison Harvey Branzburg LLP, serve as the Debtors' counsel. CRG Partners Group LLC serves as the Debtors' restructuring advisors. Epiq Bankruptcy Solutions LLC serves as claims and balloting agent. The petition was signed by Timothy P. Nugent, vice president, assistant secretary, and assistant treasurer. Affiliates filing for bankruptcy are TMP DM, Inc. (Case No. 11-13836) and TMP DM, LLC (Case No. 11-13837). General Electric Capital Corp., as agent to the prepetition lenders, is represented by: Peter Knight, Esq., at Latham & Watkins LLP, and Eric Lopez Schnabel, Esq., at Dorsey & Whitney LLP. Lender CapitalSource is represented by Mary Bucci, Esq., at Brown Rudnick LLP, and Jeffrey C. Wisler, Esq., at Connolly Bove Lodge & Hutz LLP. The Ad Hoc Committee is represented by Brett H. Miller, Esq., and William M. Hildbold, Esq., at Morrison & Foerster LLP. TOWN CENTER: Hearing on Plan Exclusivity Halt Set for Jan. 25 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida will convene a hearing on Jan. 25, 2012, at 10:00 a.m., to consider motion to terminate Town Center At Doral, L.L.C., et al.'s exclusive period to propose a Chapter 11 Plan. Interested party Landmark at Doral Community Development District has requested that the Court terminate the Debtor's exclusivity period. The District asks that the Court put all parties in the case on an equal footing by allowing competing plans to be filed within a reasonable time of the Debtors' filing of their initial plan, so as to expose the Debtors' property to the market and maximize. According to the District, the Debtor's Plan is designed to transfer the single asset of these Debtors to a third party, at the expense of the creditors, without testing the market by any competitive process. About Town Center Town Center at Doral LLC, Landmark at Doral East LLC, Landmark at Doral South LLC, Landmark Club at Doral LLC and Landmark at Doral Developers LLC, companies associated with the aborted Landmark at Doral development, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case Nos. 11-35884 to 11-35888) on Sept. 19, 2011, almost three years after AmTrust Bank sought to foreclose on the project. Town Center at Doral LLC posted assets of $29,297,300 and liabilities of $166,133,171. Isaac Kodsi signed the petitions as vice president. The Property consists of 16 individual tracts of land that remain undeveloped with the exception of an unfinished 4-level parking garage. Prior to the Petition Date, the Debtors had sought and obtained approvals for the development of residential units (townhomes and condominiums), retail/office/mixed use, and flex office at the Property. Mindy A. Mora, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP in Miami, serves as counsel to the Debtors. Glenn Moses, Esq., at Genovese Joblove & Battista, represents the official committee of unsecured creditors. Cleveland, Ohio-based AmTrust filed for foreclosure in October 2008 based on the $124.4 million in mortgages that were granted the developer in 2005. Several projects started by EB Developers fell into foreclosure after owner and CEO Elie Berdugo died in February 2008. TELIPHONE CORP: George Metrakos Resigns from Board -------------------------------------------------- George Metrakos resigned as a member of the Board of Directors of Teliphone Corp on Jan. 11, 2012. There was no known disagreement with Mr. Metrakos on any matter relating to the Company's operations, policies or practices. About Teliphone Corp. Montreal, Canada-based Teliphone Corp. (OTCQB: TLPH) -- http://www.teliphone.ca/-- provides broadband telephone services utilizing its voice over Internet protocol (VoIP) technology platform. The Company's balance sheet at June 30, 2011, showed US$2.85 million in total assets, US$986,359 in total liabilities and US$1.87 million total stockholders' equity. As reported in the Troubled Company Reporter on Jan. 5, 2011, KBL, LLP, in New York, expressed substantial doubt about Teliphone Corp.'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 sustained operating losses and significant working capital deficits in the past few years. THERMOENERGY CORP: Enters Into Warrants Amendments with Investors ----------------------------------------------------------------- ThermoEnergy Corporation, on Jan. 10, 2012, entered into separate Warrant Amendment Agreements with each of Ron Craft, Jack and Mary Garson, Francis Howard, Patrick and Zoe Lynch, Niamh O'Reilly, and Bruce M. Robinson who had, on that date, acquired from five funds affiliated with Security Investors, LLC, warrants for the purchase of an aggregate of 5,633,344 shares of the Company's Common Stock. Pursuant to the Agreements, the Company agreed to amend the Warrants to change the exercise prices of the Warrants from $0.30 per share to $0.095 per share and the Investors agreed to exercise all of the Warrants immediately for cash. The shares of the Company's Common Stock issuable upon exercise of the Warrants have been registered for re-sale to the public pursuant to an effective registration statement on Form S-1 filed under the Securities Act of 1933. In the Warrant Amendment Agreement, the Company agreed to prepare and file with the Securities and Exchange Commission an amendment or supplement to the prospectus constituting part of the Registration Statements to identify the Investors as selling stockholders of those shares. The Company also agreed to prepare and file with the Commission any amendments to the Registration Statement and supplements to the Prospectus as may be necessary to keep the Registration Statement continuously effective and in compliance with the provisions of the Securities Act applicable thereto so as to permit the Prospectus to be current and useable by the Investors for re-sales of those shares until such date as all shares covered by the Registration Statement have been sold. The shares of the Company's Common Stock were issued to the Investors in a transaction not involving a public offering and without registration under the Securities Act in reliance on the exemption from registration provided by Section 4(2) of such Act. For its services in connection with these transactions, the Company paid Dawson James Securities, Inc., a registered broker- dealer, a fee of $37,462. The Company intends to use the net proceeds from the exercise of the Warrants for general working capital purposes. About ThermoEnergy Corporation Little Rock, Ark.-based ThermoEnergy Corporation is a clean technologies company engaged in the worldwide development of advanced municipal and industrial wastewater treatment systems and carbon reducing clean energy technologies. As reported by the TCR on April 7, 2011, Kemp & Company, a Professional Association, in Little Rock, Arkansas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred net losses since inception and will require substantial capital to continue commercialization of the Company's technologies and to fund the Companies liabilities. The Company reported a net loss of $9.85 million on $2.87 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $12.98 million on $4.01 million of revenue during the prior year. The Company also reported a net loss of $11.87 million on $3.57 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $8.49 million on $2.05 million of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $4.27 million in total assets, $11.09 million in total liabilities and a $6.81 million total stockholders' deficiency. THINES LLC: M&T Trust Has Until Today to Challenge Plan Outline --------------------------------------------------------------- Bankruptcy Judge Nancy V. Alquist last week signed off on a stipulation that grants Manufacturers and Traders Trust Company until today, Jan. 16, to object or otherwise respond to Thines LLC's Disclosure Statement. A copy of the Stipulation, dated Jan. 11, 2012, is available at http://is.gd/H6Sfatfrom Leagle.com. Thines LLC, based in Jessup, Maryland, filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 11-28872) on Sept. 20, 2011. Judge Nancy V. Alquist presides over the request. Marc Robert Kivitz, Esq., in Baltimore, serves as the Debtor's counsel. The Debtor scheduled $1,960,289 in assets and $2,685,032 in debts. The petition was signed by Tyrone Hines, managing member. Creditor Manufacturers and Traders Trust Company is represented in the case by: Michael C. Bolesta, Esq. GEBHARDT & SMITH LLP One South Street, Suite 2200 Baltimore, MD 21202-3281 Tel: 410-385-5071 E-mail: mbole@gebsmith.com TRIBUNE CO: Rival Groups Asked To Set Final Confirmation Date ------------------------------------------------------------- Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware, during the Jan. 11 plan status hearing, asked rival groups in Tribune Company's Chapter 11 case to work out final scheduling details regarding confirmation of the Third Amended Joint Plan of Reorganization backed by the Company and the hedge funds. Judge Carey said Tribune should face its final court fight over its bankruptcy-exit plan in May this year, Steven Church of Bloomberg News related. Tribune said it will still face a "significant time lag" between confirmation hearing in May and the ultimate effectiveness of the Third Amended Plan as a result of the required waivers and approvals from the Federal Communications Commission, according to papers filed with the Court before the status hearing. Several parties sought reconsideration of Judge Carey's October 31, 2011 Confirmation Opinion. The unresolved issues relate to allocation disputes. These issues are: (1) Whether and to what extent the Article III Distributions must be adjusted to account for the fact that all or any portion of the consideration provided in respect of the Plan Settlement is or is not subject to the subordination provisions of the (i) PHONES Notes Indenture or (ii) the EGI- TRB LLC Note and corresponding subordination agreement; (2) Whether and to what extent the priority of distributions from the Litigation Trust must be adjusted to account for the fact that all or any of the potential distributions from the Litigation Trust are or are not subject to the subordination provisions of the EGI-TRB Subordination Agreement; (3) Whether and to what extent the priority of distributions from the Creditors' Trust must be adjusted to account for the fact that all or any of the potential distributions from the Creditors' Trust are or are not subject to the Subordination Provisions; (4) Whether and to what extent the Article III Distributions or the priority of distributions from the Litigation Trust or Creditors' Trust must be adjusted to account for the fact that any category of Other Parent Claims does or does not constitute "Senior Indebtedness" pursuant to the PHONES Indenture or "Senior Obligations" pursuant to the EGI-TRB Subordination Agreement; (5) Whether and to what extent beneficiaries of the Subordination Provisions are entitled to receive postpetition interest prior to the Holders of PHONES Notes Claims and EGI-TRB LLC Notes Claims receiving payment on account of their claims; (6) Whether the PHONES Notes are senior in right of payment to the EGI-TRB LLC Note; and (7) The allowed amount of the PHONES Notes Claims. The Court previously directed the parties-in-interest to confer again in an attempt to reach agreement on scheduling with respect to allocation disputes and disclosure/confirmation with a view towards a confirmation hearing to be held in mid- to late-May 2012. To this end, the parties-in-interest held several conference calls to resolve any outstanding disputes with respect to scheduling. Status of Plan/Allocation Disputes Scheduling Before the Jan. 11 status hearing, Tribune Co.; the Official Committee of Unsecured Creditors; Oaktree Capital Management, L.P.; Angelo, Gordon & Co., L.P. and JPMorgan Chase Bank, N.A. and Aurelius Capital Management, LP, on behalf of itself and its managed entities, apprised the Court of their progress towards an agreement on scheduling with respect to the Allocation Disputes and disclosure/confirmation of the DCL Plan. The Debtors' counsel, James F. Conlan, Esq., at Sidley Austin LLP, in Chicago, Illinois, related that the parties' meetings have been productive, resulting in a schedule for the Allocation Disputes agreed upon between the DCL Plan Proponents and the Noteholders although several issues remain unresolved with other parties to the Allocation Disputes. The meetings have also resulted in the resolution of a substantial number of disputes among the DCL Plan Proponents, the Noteholders and other constituents regarding the confirmation schedule, Mr. Conlan noted. Unfortunately, he noted, two central disputes remain with regard to confirmation scheduling, namely: (1) The Noteholders' proposed schedule would delay consideration and approval of the Supplemental Disclosure Document for the Third Amended Plan for nearly three months, hoping that the Court will have decided the Allocation Disputes before disclosure materials are even disseminated to creditors. In contrast, the DCL Plan Proponents propose that the Court consider the Supplemental Disclosure Document sooner in order to enable the process of soliciting votes on the Third Amended Plan to begin during the pendency of the Court's consideration of the Allocation Disputes. (2) The DCL Plan Proponents' proposed schedule provides for confirmation discovery to commence shortly after the Supplemental Disclosure Document and Third Amended Plan are filed in February, in order that confirmation-related discovery can be completed by late April without risking potential delays to the confirmation briefing and hearing schedule on account of discovery-related disputes. In contrast, the Senior Noteholders' proposed schedule would postpone all confirmation-related discovery until after the Court approves the Supplemental Disclosure Document, resulting in confirmation-related discovery continuing well into May and risking substantial delays of the confirmation hearing. Consistent with a May 2012 confirmation hearing, the DCL Plan Proponents revised their proposed schedule for the Plan Solicitation and Confirmation: February 20, 2012 The DCL Plan Proponents will file Amendments to the Supplemental Disclosure Document, Allocation Dispute Protocol and Solicitation Procedures. March 2, 2012 Deadline to serve confirmation discovery. March 5, 2012 Deadline to object to the Supplemental Disclosure Document and Solicitation Procedures Motion. March 12, 2012 Reply Deadline for the Supplemental Disclosure Statement and Solicitation Procedures Motion. March 19, 2012 Hearing on the Supplemental Disclosure Statement and Solicitation Procedures Motion. April 23, 2012 Completion of Confirmation Discovery. April 23, 2012 Voting/Plan Objection Deadline. May 7, 2012 Deadline to file briefs in support of Confirmation/Plan Objection Reply Deadline. May 14, 2012 Confirmation Hearing. The Plan Proponents also revised their schedule for the Allocation Dispute Resolution: January 20, 2012 Deadline to Serve Discovery Requests. January 31, 2012 Identification of Allocation Dispute Positions, Trial Witnesses and scope of Direct Trial Testimony. February 17, 2012 Completion of Discovery. February 24, 2012 Opening Briefs Deadline. March 2, 2012 Response Briefs Deadline. March 5, 2012 Hearing on Allocation Disputes. As an alternative, the DCL Plan Proponents proposed a schedule, which reflects the DCL Plan Proponents' belief that confirming the DCL Plan in early April 2012 is achievable and desirable to the extent consistent with the Court's schedule. A copy of the alternative proposed schedules for disclosure and confirmation of the Plan and allocation dispute resolution is available for free at: http://bankrupt.com/misc/Tribune_DCLAlternativePlanSchedule.pdf By resolving questions as to the applicability of the PHONES Notes' subordination provisions, the Reconsideration Opinion considerably narrowed the scope of the Allocation Disputes and their potential impact on creditor distributions, Mr. Conlan asserted. Assuming the Court was to resolve the EGI disputes in the same manner as the PHONES disputes subject to the Reconsideration Opinion, the DCL Plan Proponents believe that remaining issues now impact just approximately $38 million or less in plan distributions, he said. Although this amount is a minuscule fraction of the total value to be distributed under the Third Amended Plan, in the event the Court is amenable to an early April confirmation hearing, the DCL Plan Proponents are prepared to amend the Third Amended Plan to: (a) condition the Effective Date of the Plan on the Court's entry of an order resolving the remaining Allocation Disputes; and (b) remove the Allocation Dispute Reserves, which would no longer be necessary due to the pre-Effective Date resolution of the Allocation Disputes. This would eliminate the prejudice previously claimed by the Noteholders while facilitating an earlier commencement of the Debtors' multi-month FCC review and approval process, Mr. Conlan said. In another filing, counsel to Aurelius, Daniel H. Golden, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, insisted that that the now Remaining Allocation Disputes should be resolved prior to the commencement of the solicitation process regarding the DCL Plan. Aurelius also believes that its revised proposed schedule provide sufficient time to accomplish this result while at the same time allowing a confirmation hearing on the DCL Plan to be held well within the timeframe contemplated by the Court in its Reconsideration Decision. Aurelius's revised proposed schedule for the resolution of the Remaining Allocation Disputes and the confirmation process relating to the DCL Plan is set forth: Confirmation Schedule March 14, 2012 Deadline to File Amended Supplemental Disclosure Documents. March 21, 2012 Deadline to object to Supplemental Disclosure Statements. March 28, 2012 Deadline to file replies to the Supplemental Disclosure Statement. April 2, 2012 Hearing on Supplemental Disclosure Statements. April 9, 2012 Deadline to serve confirmation discovery requests. May 7, 2012 Voting Deadline May 7, 2012 Deadline to object to the DCL Plan. May 16, 2012 Completion of Confirmation Discovery. May 16, 2012 Deadline to file briefs in support of confirmation and in response to objections. May 21, 2012 Confirmation Hearing. Allocation Dispute Resolution Schedule January 20, 2012 Deadline to serve discovery requests. January 31, 2012 Identification of Allocation Dispute positions and potential trial witnesses. February 17, 2012 Completion of discovery. February 24, 2012 Opening briefs deadline. March 2, 2012 Response briefs deadline. March 5, 2012 Hearing on Allocation Disputes About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: WTC Appeals Bankr. Court's Denial of Plan ----------------------------------------------------- Wilmington Trust Company, solely in its capacity as Indenture Trustee for the PHONES, took an appeal to the U.S. District Court for the District of Delaware from Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware's: * October 31, 2011 order denying confirmation of Competing Plans and accompanying opinion on confirmation; and * December 29, 2011 order regarding motions for reconsideration of the Confirmation Opinion and Order and the related memorandum on reconsideration. WTC wants the District Court to review whether: (1) the Bankruptcy Court erred in reconsidering the Confirmation Opinion and granting reconsideration where the standard for reconsideration was not satisfied insofar as WTC simply disagreed with a prior decision and offered no new facts or law justifying reconsideration; and (2) the Bankruptcy Court erred in holding that the subordination provisions under the PHONES Indenture apply to recoveries of Chapter 5 of the Bankruptcy Code causes of action obtained by the Litigation Trust from third parties. On behalf of WTC, William D. Sullivan, Esq., at Sullivan, Hazeltine, Allinson LLC, in Wilmington, Delaware, avers that in its Original Confirmation Opinion, the Bankruptcy Court properly decided the scope of PHONES subordination. The Bankruptcy Court went on to hold that the PHONES Noteholders are subordinated only with respect to payments from assets of the Company and not payments from third parties, such as those available to creditors from Chapter 5 causes of action brought by the Litigation Trust. "That was the correct decision then, and it is the correct decision now," Mr. Sullivan argues. That decision should not have been subject to reconsideration because no new facts nor any new law was presented to the Bankruptcy Court in support of reconsideration, but, even to the extent that the Bankruptcy Court reconsidered the issue, it should have reached the same decision, he continues. In reversing itself, the Bankruptcy Court erred, he insists. Mr. Sullivan asserts that Wilmington Trust is entitled to appeal as a matter of right under Section 158(a)(1) of Title 28 of the U.S. Code as the Reconsideration Order and amended Confirmation Opinion effectively and finally decided the merits of a key issue, namely the rights of the PHONES Noteholders to participate, on a pari passu and unsubordinated basis, in recoveries from Chapter 5 causes of action obtained by the Litigation Trust. By now holding that the PHONES Noteholders are subordinated with respect to the Litigation Trust's recoveries from Chapter 5 causes of action, the Bankruptcy Court finally determined the rights of PHONES Noteholders vis-a-vis other creditors with respect to that issue, he stresses. Nevertheless, Wilmington Trust filed this request out of an abundance of caution in the event that the District Court determines that the Reconsideration Order and Confirmation Opinion, as amended, are interlocutory in nature, thereby requiring leave to appeal under Rule 8003(a) of the Federal Rules of Bankruptcy Procedure. Mr. Sullivan filed an accompanying declaration appending copies of the Confirmation Opinion and Order and the Reconsideration Order and Memorandum. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Wins Approval of 57-11 49th Place Settlement -------------------------------------------------------- Debtor InsertCo, Inc., sought and obtained permission from Bankruptcy Judge Kevin Carey to enter into a settlement and release agreement with 57-11 49th Place, LLC. The Landlord and the Debtor with Shuttle Printing, Inc., were parties to a lease for premises commonly known as 57-II 49th Place, in New York. The Lease was deemed rejected as of August 31, 2009. The Landlord timely filed its Lease Claim for rejection damages in connection with rejection of the Lease as a general unsecured claim for $1,065,897. Shuttle, as a co-tenant on the Lease, timely filed a contingent claim based on indemnification arising in connection with rejection of the Lease, on which Shuttle was also liable. The Debtors have negotiated with the Landlord in an effort to resolve with finality any and all claims that currently exist or may in the future exist against InsertCo relating to the Lease Claim and Lease and to reconcile the Parties' different calculations of the damages arising from the rejection of the Lease. Shuttle has not substantively responded to the Debtors' efforts to resolve the Lease Claim and the Indemnification Claim. The Debtors insist that the compromise embodied in the Settlement Agreement resolves one of the more substantial remaining lease rejection-related claims pending against their estates. The salient terms of the Settlement Agreement are: (a) The Landlord will be entitled under the Settlement Agreement to retain the Security Deposit it currently holds in the amount of $422,524 and to offset the amount against the Lease Claim. (b) The Lease Claim, originally asserted in the amount of $1,065,897 will be reduced and allowed as a general unsecured claim against InsertCo in the modified amount of $521,254 after taking into account the setoff of the Security Deposit, in full and final satisfaction of the Lease Claim. The Allowed Claim will be satisfied in the same manner as all other general unsecured claims against the Debtor under the Chapter 11 plan that is confirmed for the Debtor. (c) The Allowed Claim, after taking into account the setoff of the Security Deposit, is the maximum amount permitted to be recovered by the Landlord pursuant to Section 502(b)(6) of the Bankruptcy Code in connection with any damages resulting from the rejection of the Lease. The Landlord agrees to waive and release any additional claims, if any, against the Debtors only arising out of or relating: to (i) the liabilities asserted in the Lease Claim and (ii) the Lease; provided that the Landlord is expressly reserving all rights, remedies, and claims it may have against Shuttle. The Landlord further agrees not to file any additional proofs of claim against the Debtor for liabilities arising out of or relating to (a) the Lease Claim; or (b) the Lease. In turn, the Debtor agrees to waive and release any set off and counterclaims that it may have against Landlord arising out of or relating to the subject matter of the Lease Claim except as set forth in the Settlement Agreement. A full-text copy of the Settlement Agreement is available for free at http://bankrupt.com/misc/Tribune_InsertcoSettlement.pdf On behalf of the Debtors, Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, told Judge Carey that no objections were timely filed to Debtor InsertCo, Inc.'s motion to approve a settlement and release agreement with 57-11 49th Place, LLC. On consent of the parties, however, the Objection Deadline was extended to January 4, 2012 for Shuttle Printing, Inc., a co-tenant with InsertCo under the lease, and the reply deadline was extended to January 6, 2012 for the Debtors. Shuttle Printing raised an informal objection to the amount of the security deposit held by the Landlord that was originally paid by InsertCo and subject to setoff pursuant to the Agreement. On January 5, 2012, InsertCo and the Landlord entered into an Amendment to Settlement Agreement to reflect: (i) an adjustment to the amount of the Security Deposit held by the Landlord that was originally paid by InsertCo; and (ii) a related adjustment to the amount of the Allowed Claim in order to take into account the setoff of the Security Deposit originally paid by InsertCo. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: KPMG LLP Has 70% Reduction in Fees ---------------------------------------------- Scott Moresco, a partner at KPMG LLP, discloses that the majority of fees to be charged in the firm's engagement by Tribune Co. and its affiliates reflect a reduction of approximately 70% from the firm's customary rates, depending on the types of services to be rendered: Discounted Tax Consulting Services Rate ----------------------- ----------- Partners $680 Senior Managers $630 Managers $540 Senior Associates $400 Associates $245 Para-professionals $155 Mr. Moresco states that in the normal course of its business, KPMG revises its billing rates on October 1 of each year and seeks that, effective October 1st of each year, those rates may be revised to the regularly hourly rates, which will be in effect at that time. The rates set forth are the revised rates that will be in effect as of October 1, 2011. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TUNICA-BILOXI: Moody's Lowers CFR to 'B3', Outlook Stable --------------------------------------------------------- Moody's Investors Service lowered Tunica-Biloxi Gaming Authority's Corporate Family Rating and Probability of Default Rating to B3 from B2. The rating outlook is stable. The following ratings were downgraded: Corporate Family Rating -- to B3 from B2 Probability of Default Rating -- to B3 from B2 9% Sr. unsecured notes due 2015 -- to B3 (LGD4, 52%) from B2 (LGD 4, 52%) Rating Rationale The rating action reflects Moody's expectation TBGA's operating performance will likely continue to be challenged by still weak gaming demand in its primary feeder markets in Louisiana and intensified competition focusing on promotional activities among existing operators. Moody's now expects EBITDA will likely decline again in FY 2011 after its initial drop in FY 2010, and margin and revenues will be squeezed further once two new large casinos in Baton Rouge and Lake Charles come online in 2012 and 2013, as currently expected. Moody's believes these two newer casinos with greater upfront investment, especially the one in Baton Rouge owned by Pinnacle Entertainment Inc., will likely exert significant competitive pressure on TBGA's existing operation, due to its relatively shorter distance (approximately 80 miles away) and more customer base overlapping. TBGA's adjusted leverage as measured by debt/(EBITDA-Tribal Distribution) deteriorated to around 7.5x as of October 2011 from 6.6x at year end 2010 as a result of lower EBITDA and modestly increased tribal distribution. As of twelve months ended October 2, 2011, the Authority distributed more than 50% of its EBITDA to the Tribe, among the highest of Moody's rated Native American gaming issuers. Given the continuous negative earnings pressure and Moody's view that a significant cutback in tribal distribution is unlikely, the adjusted leverage will likely remain above 7.0x in the next 12-18 months, a level that no longer consistent with the previous B2 rating. TBGA's B3 CFR also considers its small size, and dependence on a single market with growing competition. The rating also reflects Moody's view on the Authority's less conservative financial policy with respect to its tribal distributions. Historically, the Authority generally maximized the distribution as allowed under the loan agreement and bond indenture. Positive rating consideration is given to TBGA's established market position that could partially mitigate the negative impact from new competition, breakeven to slightly positive free cash flow generation and improved debt maturity profile as a result of extension of its revolving credit facility through December 2014. The stable rating outlook reflects Moody's expectation that the Authority's liquidity profile will be adequate in the next 12 months, such as free cash flow will not turn negative on a sustained basis. However, the cushion under the financial covenants per the credit agreement for the revolving credit facility could become tight in FY 2012, and may require TBGA to scale back on distributions, pay down its revolver balance or cut back on capital expenditures to remain in compliance, should EBITDA decline considerably. TBGA's ratings could be downgraded if operating performance deteriorates significantly to such extent that its adjusted total leverage were to increase further or liquidity contracts materially. Conversely, there is no near-term upside rating momentum given the competitive headwinds over the next two years. Overtime, however, consistent topline growth and earnings improvement that lead to sustained reduction in adjusted total leverage to below 6.0x, combined with more conservative financial policy, could warrant higher rating or positive rating outlook. The principal methodologies used in this rating were Global Gaming published in December 2009, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. TBGA is an unincorporated governmental agency of the Tunica-Biloxi Tribe of Louisiana. TBGA owns and operates the Paragon Casino Resort located in Marksville, Louisiana. UNIVERSAL BIOENERGY: CEO Reports Plans to Hike Share Price ---------------------------------------------------------- Vince M. Guest, president and chief executive officer of Universal Bioenergy, Inc., issued a letter to shareholders addressing some critical issues and concerns of shareholders including the decline in the Company's stock price, its volume, liquidity and the so- called Depository Trust Company "Chill" on the Company's stock. Mr. Guest pointed out that the primary reasons for the decline in the price per share may be due to the late filing of the Company's financial reports with the SEC last year, and a "Chill" imposed on the Company's stock by the DTC. Mr. Guest added that these issues had a negative impact on the Company's ability to raise the additional capital it needed from institutional investors for its expansion, delayed its planned acquisitions and projected profitability. Mr. Guest said the Company made it a top priority to take some very critical steps to increase the short and long term price of the Company's stock. The Company's plans to increase its share price consist of several strategies including, among other things: (a) creating greater "Brand Awareness" and interest in the Company's Company in the public marketplace; (b) creating a greater demand for the Company's stock,increasing the Company's trading volume and liquidity; (c) building stronger business fundamentals, generate higher revenues and market capitalization value; and (d) continuing to reduce debt and improve future cash flow. On July 27, 2011, the DTC Corporate Compliance Department notified the Company's transfer agent Corporate Stock Transfer that the DTC had imposed a "Chill" or minor deposit restriction/suspension on Universal's stock on July 22, 2011, and the Company was removed from the DWAC/FAST Program. The DTC staff informed the Company that some of their members known as "Participants", had noticed large quantities of Universal's shares being deposited into their brokerage firms all in the month of July, and this was a cause for some concern. On July 12, 2011, the Company issued a stock dividend to all shareholders of record as of July 1, 2011. Based on the Company's discussions with the DTC, the "Chill" may have been caused by the issuance of the stock dividend. The DTC informed the Company that they required verification and confirmation that the dividend shares that were issued, were either properly registered with the SEC, or exempt from registration under the Securities Act of 1933. The Company is confident that once all of the required information is submitted and reviewed by the DTC's compliance department, the "Chill" will be lifted. A full-text copy of the letter is available for free at: http://is.gd/mRJjT4 About Universal Bioenergy Universal Bioenergy Inc., is an alternative energy company headquartered in Irvine, California. The Company's new strategic direction is to develop and market a diverse product line of alternative and natural energy products including, natural gas, solar, biofuels, wind, wave, tidal, and green technology products. S.E.Clark & Company, P.C., in Tucson, Arizona, the Company's independent auditors, noted that the accumulation of losses and shortage of capital raise substantial doubt about the Company's ability to continue as a going concern. The Company reported a net loss of $2.00 million on $41.32 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $1.87 million on $0 of revenue during the prior year. The Company reported a net loss of $1.37 million on $49.90 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $955,284 on $20.35 million of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $3.02 million in total assets, $3.56 million in total liabilities, and a $540,428 total stockholders' deficit. WASHINGTON MUTUAL: Moves Forward in Bid to Exit Chapter 11 ---------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Washington Mutual Inc. moved a step closer to an exit from bankruptcy when a judge rebuffed a bid to hold up confirmation proceedings for the company's $7 billion Chapter 11 plan. 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 said it would seek confirmation of a revised plan "as soon as practicable." The Plan proposes to pay more than $7 billion to creditors and incorporates a global settlement agreement resolving issues among the Debtors, JPMorgan Chase, the Federal Deposit Insurance Corp. in its corporate capacity and as receiver for WaMu Bank, certain large creditors, certain WMB senior noteholders, and the creditors' committee. The Settlement Noteholders are Appaloosa Management, L.P., Aurelius Capital Management LP, Centerbridge Partners, LP, and Owl Creek Asset Management, L.P. WORLD SURVEILLANCE: Amends 63.9 Million Common Shares Offering -------------------------------------------------------------- World Surveillance Group Inc. filed with the U.S. Securities and Exchange Commission a Post-Effective Amendment No. 1 relating to the Registration Statement on Form S-8 which was filed with the SEC on Oct. 5, 2011. The Registration Statement registered 63,916,667 shares of the Company's common stock, par value $0.00001 per share, under the Company's 2004 Employee Stock Option Plan, certain Non-Qualified Stock Options, and the 2011 Equity Compensation Incentive Plan. The purpose of the Post-Effective Amendment No. 1 is to update the Selling Shareholders table to reflect some specific restricted stock grants that were made by Company under the 2011 Equity Compensation Incentive Plan. No additional securities are being registered. A full-text copy of the amended prospectus is available at: http://is.gd/U4cSPd About World Surveillance World Surveillance Group Inc. designs, develops, markets and sells autonomous lighter-than-air (LTA) unmanned aerial vehicles (UAVs) capable of carrying payloads that provide persistent security and/or wireless communication from air to ground solutions at low, mid and high altitudes. The Company's airships, when integrated with electronics systems and other high technology payloads, are designed for use by government-related and commercial entities that require real-time intelligence, surveillance and reconnaissance or communications support for military, homeland defense, border control, drug interdiction, natural disaster relief and maritime missions. The Company is headquartered at the Kennedy Space Center, in Florida. The Company's balance sheet at June 30, 2011, showed $3.7 million in total assets, $17.9 million in total liabilities, and a stockholders' deficit of $14.2 million. Rosen Seymour Shapss Martin & Company LLP, in New York, expressed substantial doubt about Sanswire's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2010. The independent auditor noted that the Company has experienced significant losses and negative cash flows, resulting in decreased capital and increased accumulated deficits. * Personal Bankruptcy Filings Down for First Time in Four Years --------------------------------------------------------------- Dow Jones' DBR Small Cap reports that Personal bankruptcy filings declined in 2011 for the first time in four years, as economic conditions marginally improved and consumers reined in spending, Fitch Ratings said. * 1.9 MM U.S. Properties Receive Foreclosure Filings in 2011 ------------------------------------------------------------ RealtyTrac(R), the leading online marketplace for foreclosure properties, released its Year-End 2011 U.S. Foreclosure Market Report(TM), which shows a total of 2,698,967 foreclosure filings - - default notices, scheduled auctions and bank repossessions -- were reported on 1,887,777 U.S. properties in 2011, a decrease of 34 % in total properties from 2010. Foreclosure activity in 2011 was 33 % below the 2009 total and 19 % below the 2008 total. The report also shows that 1.45 % of U.S. housing units (one in 69) had at least one foreclosure filing during the year, down from 2.23 % in 2010, 2.21 % in 2009, and 1.84 % in 2008. Total U.S. foreclosure activity and the U.S. foreclosure rate in 2011 were both at their lowest annual level since 2007. "Foreclosures were in full delay mode in 2011, resulting in a dramatic drop in foreclosure activity for the year," said Brandon Moore, chief executive officer of RealtyTrac. "The lack of clarity regarding many of the documentation and legal issues plaguing the foreclosure industry means that we are continuing to see a highly dysfunctional foreclosure process that is inefficiently dealing with delinquent mortgages -- particularly in states with a judicial foreclosure process. "There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets. We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak of 2010." December activity hits 49-month low, scheduled auctions up in fourth quarter Foreclosure filings were reported on 205,024 U.S. properties in December, a decrease of 9 % from the previous month and down 20 % from December 2010. December's total was the lowest monthly total since November 2007 -- a 49-month low. December Default notices (NOD, LIS) decreased 19 % from the previous month and were down 23 % from December 2010; Scheduled foreclosure auctions (NTS, NFS) decreased 12 % from the previous month and were down 24 % from December 2010; and bank repossessions (REO) increased 10 % from the previous month but were still down 12 % from December 2010. Foreclosure filings were reported on 586,133 U.S. properties in the fourth quarter, a 4 % decrease from the previous quarter and down 27 % from the fourth quarter of 2010. Fourth quarter default notices were down 6 % from the previous quarter and down 22 % from the fourth quarter of 2010; scheduled foreclosure auctions increased 4 % from the previous quarter but were still down 32 % from the fourth quarter of 2010; and REOs decreased 11 % from the previous quarter and were down 24 % from the fourth quarter of 2010. Nevada, Arizona, California post top state foreclosure rates for year More than 6 % of Nevada housing units (one in 16) had at least one foreclosure filing in 2011, giving it the nation's highest state foreclosure rate for the fifth consecutive year despite a 31 % decrease in foreclosure activity from 2010. Nevada foreclosure activity dropped 35 % from the third quarter to the fourth quarter, driven primarily by a 70 % decrease in default notices -- the result of a new law (AB 284) that took effect in October requiring lenders to file an additional affidavit before starting the foreclosure process. The new law also increases the penalties for the use of fraudulent documents in foreclosure. Despite a 28 % drop in foreclosure activity from November to December -- caused largely by a 41 % drop in scheduled foreclosure auctions -- Arizona registered the nation's second highest state foreclosure rate for the third year in a row, with 4.14 % of its housing units (one in 24) with at least one foreclosure filing in 2011. California also experienced a substantial month-over-month drop in initial foreclosure notices in December -- default notices there were down 38 % from the previous month -- but the state still registered the nation's third highest foreclosure rate for all of 2011. One in every 31 California housing units (3.19 %) had at least one foreclosure filing during the year, down from 4.08 % in 2010 and 4.75 % in 2009. Georgia posted the nation's fourth highest state foreclosure rate, with 2.71 % of housing units (one in 37) with at least one foreclosure filing in 2011, and Utah posted the nation's fifth highest state foreclosure rate, with 2.32 % of its housing units (one in 43) with a foreclosure filing during the year. Other states with 2011 foreclosure rates ranking among the nation's 10 highest were Michigan (2.21 %), Florida (2.06 %), Illinois (1.95 %), Colorado (1.78 %), and Idaho (1.77 %). Foreclosure processing timelines continue to increase U.S. properties foreclosed in the fourth quarter took an average of 348 days to complete the foreclosure process, up from 336 days in the third quarter and up from 305 days in the fourth quarter of 2010. The length of the average foreclosure process has increased 24 % from 281 days in the third quarter of 2010, when lenders began to re-evaluate foreclosure procedures in earnest as the result of the so-called robo-signing controversy. The average foreclosure process in New York has increased 37 % during the same time period, and New York properties foreclosed in the fourth quarter took an average of 1,019 days to complete the foreclosure process -- the longest of any state. New Jersey documented the nation's second longest average foreclosure process, at 964 days, and Florida documented the nation's third longest average foreclosure process, at 806 days. Foreclosure activity in both these states dropped more than 60 % from 2010 to 2011. All three states with the longest foreclosure timelines employ the judicial foreclosure process. Report License The RealtyTrac U.S. Foreclosure Market Report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report. Order Customized Reports Detailed and historical foreclosure data used to create the above report may be purchased through the RealtyTrac Data Licensing Department at 949.502.8300 Ext. 158. Aggregate data is available at the state, metro, county and zip code levels dating back to 2005, and address-level foreclosure records are also available historically. About RealtyTrac Inc. RealtyTrac -- http://www.realtytrac.com/-- is the leading online marketplace of foreclosure properties, with more than 1.5 million default, auction and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data. Hosting millions of unique monthly visitors, RealtyTrac provides innovative technology solutions and practical education resources to facilitate buying, selling and investing in real estate. * S&P Downgrades Ratings on Nine Eurozone Sovereigns ---------------------------------------------------- Standard & Poor's Ratings Services on Jan. 13 completed its review of its ratings on 16 eurozone sovereigns, resulting in downgrades for nine eurozone sovereigns and affirmations of the ratings on seven others. "We have lowered the long-term ratings on Cyprus, Italy, Portugal, and Spain by two notches; lowered the long-term ratings on Austria, France, Malta, the Slovak Republic, and Slovenia, by one notch; and affirmed the long-term ratings on Belgium, Estonia, Finland, Germany, Ireland, Luxembourg, and the Netherlands. All ratings on the 16 sovereigns have been removed from CreditWatch where they were placed with negative implications on Dec. 5, 2011 (except for Cyprus, which was first placed on CreditWatch on Aug. 12, 2011). "The outlooks on our long-term ratings on all but two of the 16 eurozone sovereigns are negative; the outlooks on the long-term ratings on Germany and Slovakia are stable." WHAT HAS PROMPTED THE DOWNGRADES? "The rating actions are primarily driven by our assessment that the policy initiatives that have been taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the eurozone. In our view, these stresses include: (1) tightening credit conditions, (2) an increase in risk premiums for a widening group of eurozone issuers, (3) a simultaneous attempt to delever by governments and households, (4) weakening economic growth prospects, and (5) an open and prolonged dispute among European policymakers over the proper approach to address challenges. "The outcomes from the EU summit on Dec. 9, 2011, and subsequent statements from policymakers lead us to believe that the agreement reached has not produced a breakthrough of sufficient size and scope to fully address the eurozone's financial problems. In our opinion, the political agreement does not supply sufficient additional resources or operational flexibility to bolster European rescue operations, or extend enough support for those eurozone sovereigns subjected to heightened market pressures. "We also believe that the agreement is predicated on only a partial recognition of the source of the crisis: that the current financial turmoil stems primarily from fiscal profligacy at the periphery of the eurozone. In our view, however, the financial problems facing the eurozone are as much a consequence of rising external imbalances and divergences in competitiveness between the EMU's core and the so-called "periphery". As such, we believe that a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers' rising concerns about job security and disposable incomes, eroding national tax revenues. "Accordingly, in line with our published sovereign criteria, we have adjusted downward our political scores (one of the five key factors in our criteria) for those eurozone sovereigns we had previously scored in our two highest categories. This reflects our view that the effectiveness, stability, and predictability of European policymaking and political institutions have not been as strong as we believe are called for by the severity of a broadening and deepening financial crisis in the eurozone. "In addition to our assessment of the policy response to the crisis, downgrades in some countries have also been triggered by external risks. In our view, it is increasingly likely that refinancing costs for certain countries may remain elevated, that credit availability and economic growth may further decelerate, and that pressure on financing conditions may persist. Accordingly, for those sovereigns we consider most at risk of an economic downturn and deteriorating funding conditions, for example due to their large cross-border financing needs, we have adjusted our external score downward." WHY WERE SOME EUROZONE SOVEREIGNS DOWNGRADED BY TWO NOTCHES AND OTHERS BY ONE NOTCH? "We believe that not all sovereigns are equally vulnerable to the possible extension and intensification of the financial crisis. Those we consider most at risk of an economic downturn and deteriorating funding conditions, for example due to the large cross-border financing needs of its governments or financial sectors, have been downgraded by two notches, as we lowered the political score and/or the external score reflecting our view of the risk of a marked deterioration in the country's external financing. "On the other hand, we affirmed the ratings of sovereigns which we believe are likely to be more resilient at their current rating level in light of their relatively strong external positions and less leveraged public and private sectors. These credit strengths remain robust enough, in our opinion, to neutralize the potential ratings impact from the lowering of our political score. "In this context, we would note that the ratings on the eurozone sovereigns remain at comparatively high levels, with only three below investment grade (Portugal, Cyprus, and Greece). Historically, investment-grade rated sovereigns have experienced very low default rates. From 1975 to 2010, the 15-year cumulative default rate for sovereigns rated in investment grades was 1.02%, and 0.00% for sovereigns rated in the 'A' category or higher." WHY DO THE RATINGS ON MOST OF THESE SOVEREIGNS HAVE NEGATIVE OUTLOOKS? "For those sovereigns with negative outlooks, we believe that downside risks persist and that a more adverse economic and financial environment could erode their relative strengths within the next year or two to a degree that in our view could warrant a further downward revision of their long-term ratings. We believe that the main downside risks that could affect eurozone sovereigns to various degrees are related to the possibility of further significant fiscal deterioration as a consequence of a more recessionary macroeconomic environment and/or vulnerabilities to further intensification and broadening of risk aversion among investors, jeopardizing funding access at sustainable rates. A more severe financial and economic downturn than we currently envisage could also lead to rising stress levels in the European banking system, potentially leading to additional fiscal costs for the sovereigns through various bank workout or recapitalization programs. Furthermore, we believe that there is a risk that reform fatigue could be mounting, especially in those countries that have experienced deep recessions and where growth prospects remain bleak, which could eventually lead to lower levels of predictability of policy orientation, potentially leading to another downward adjustment of the political score, which might lead to lower ratings. "We believe that important risks related to potential near-term deterioration of credit conditions remain for a number of sovereigns. This belief is based on what we see as the sovereigns' very substantial financing needs in early 2012, the risk of further downward revisions of economic growth expectations, and the challenge to maintain political support for unpopular and possibly more severe austerity measures, as fiscal targets are endangered by macroeconomic headwinds. Governments are also aiming to put greater focus on growth-enhancing structural measures. While these may contribute positively to a lasting solution of the current crisis, we believe they could also run counter to powerful national interest groups, whose resistance could potentially jeopardize the reform momentum and impede the recovery of market confidence. In our view, it also remains to be seen whether European banks will indeed use the ample term funding provided by the ECB to purchase newly issued sovereign bonds of governments under financial stress. "We believe that as long as uncertainty about the bond buyers at primary auctions remains, the risk of a deepening of the crisis remains a real one. These risks could be exacerbated should renewed policy disagreements among European policymakers emerge or the Greek debt restructuring lead to an outcome that further discourages financial investors to add to their positions in peripheral sovereign securities. "For two sovereigns, Germany and Slovakia, we concluded that downside scenarios that could lead to a lowering of the relevant credit scores and the sovereign ratings carry a likelihood of less than one-in-three during 2012 or 2013. Accordingly we have assigned a stable outlook." HOW DO WE INTERPRET THE CONCLUSIONS OF THE DECEMBER EUROPEAN SUMMIT? "We have previously stated our belief that an effective strategy that would buoy confidence and lower the currently elevated borrowing costs for European sovereigns could include, for example, a greater pooling of fiscal resources and obligations as well as enhanced mutual budgetary oversight. We have also stated that we believe that a reform process based on a pillar of fiscal austerity alone would risk becoming self-defeating, as domestic demand falls in line with consumer's rising concerns about job security and disposable incomes, eroding national tax revenues. "The outcomes from the EU summit on Dec. 9, 2011, and subsequent statements from policymakers, lead us to believe that the agreement reached has not produced a breakthrough of sufficient size and scope to fully address the eurozone's financial problems. In our opinion, the political agreement does not supply sufficient additional resources or operational flexibility to bolster European rescue operations, or extend enough support for those eurozone sovereigns subjected to heightened market pressures. Instead, it focuses on what we consider to be a one-sided approach by emphasizing fiscal austerity without a strong and consistent program to raise the growth potential of the economies in the eurozone. While some member states have implemented measures on the national level to deregulate internal labor markets, and improve the flexibility of domestic services sectors, these reforms do not appear to us to be coordinated at the supra- national level; as evidence, we would note large and widening discrepancies in activity and unemployment levels among the 17 eurozone member states. "Regarding additional resources, the main enhancement we see has been to bring forward to mid-2012 the start date of the European Stability Mechanism (ESM), the successor vehicle to the European Financial Stability Fund (EFSF). This will marginally increase these official sources' lending capacity from currently EUR440bn to EUR500bn. As we noted previously, we expect eurozone policymakers will accord ESM de-facto preferred creditor status in the event of a eurozone sovereign default. We believe that the prospect of subordination to a large creditor, which would have a key role in any future debt rescheduling, would make a lasting contribution to the rise in long-term government bond yields of lower-rated eurozone sovereigns and may reduce their future market access. "We also believe that the agreement is predicated on only a partial recognition of the source of the crisis: that the current financial turmoil stems primarily from fiscal profligacy at the periphery of the eurozone. In our view, however, the financial problems facing the eurozone are as much a consequence of rising external imbalances and divergences in competitiveness between the EMU's core and the so-called "periphery." In our opinion, the eurozone periphery has only been able to bear its underperformance on competitiveness (manifest in sizeable external deficits) because of funding by the banking systems of the more competitive northern eurozone economies. "According to our assessment, the political agreement reached at the summit did not contain significant new initiatives to address the near-term funding challenges that have engulfed the eurozone. The summit focused primarily on a long-term plan to reverse fiscal imbalances. It proposed to enshrine into national legislation requirements for structurally balanced budgets. Certain institutional enhancements have been introduced to strengthen the enforceability of the fiscal rules compared to the Stability and Growth Pact, such as reverse qualified majority voting required to overturn sanctions proposed by the European Commission in case of violations of the broadly balanced budget rules. Notwithstanding this progress, we believe that the enforcement of these measures is far from certain, even if all member states eventually passed respective legislation by parliaments (and by referendum, where this is required). Our assessment is based on several factors, including: -- The difficulty of forecasting reliably and precisely structural deficits, which we expect will likely be at the center of any decision on whether to impose sanctions; -- The ability of individual member states' elected governments to extricate themselves from the external control of the European Commission by withdrawing from the intergovernmental agreement, which will not be part of an EU-wide Treaty; and -- The possibility that the appropriateness of these fiscal rules may come under scrutiny when a recession may, in the eyes of policymakers, call for fiscal stimulus in order to stabilize demand, which could be precluded by the need to adhere to the requirement to balance budgets. "Details on the exact content and operational procedures of the rules are still to emerge and -- depending on the stringency of the rules -- the process of passing national legislation may run into opposition in some signatory states, which in turn could lower the confidence of investors and the credibility of the agreed policies. "More fundamentally, we believe that the proposed measures do not directly address the core underlying factors that have contributed to the market stress. It is our view that the currently experienced financial stress does not in the first instance result from fiscal mismanagement. This to us is supported by the examples of Spain and Ireland, which ran an average fiscal deficit of 0.4% of GDP and a surplus of 1.6% of GDP, respectively, during the period 1999-2007 (versus a deficit of 2.3% of GDP in the case of Germany), while reducing significantly their public debt ratio during that period. The policies and rules agreed at the summit would not have indicated that the boom-time developments in those countries contained the seeds of the current market turmoil. While we see a lack of fiscal prudence as having been a major contributing factor to high public debt levels in some countries, such as Greece, we believe that the key underlying issue for the eurozone as a whole is one of a growing divergence in competitiveness between the core and the so-called "periphery." Exacerbated by the rapid expansion of European banks' balance sheets, this has led to large and growing external imbalances, evident in the size of financial sector claims of net capital- exporting banking systems on net importing countries. When the financial markets deteriorated and risk aversion increased, the financing needs of both the public and financial sectors in the "periphery" had to be covered to varying degrees by official funding, including European Central Bank (ECB) liquidity as well as intergovernmental, EFSF, and IMF loans. HOW HAS THE EUROPEAN POLICY RESPONSE AFFECTED THE RATINGS? "We have generally adjusted downward our political scores (one of the five key factors in our published sovereign ratings criteria) for those eurozone sovereigns we had previously scored in our two highest categories. This score change has been a contributing factor to the rating actions on the relevant sovereigns cited above. Under the political score, we assess how a government's institutions and policymaking affect a sovereign's credit fundamentals by delivering sustainable public finances, promoting balanced growth, and responding to economic or political shocks. Our political score also captures the potential effect of external organizations on policy settings. "It is our view that the limitations on monetary flexibility imposed by membership in the eurozone are not adequately counterbalanced by other eurozone economic policies to avoid the negative impact on creditworthiness that the eurozone members are in opinion view currently facing. Financial solidarity among member states appears to us to be insufficient to prevent prolonged funding uncertainties. Specifically, we believe that the current crisis management tools may not be adequate to restore lasting confidence in the creditworthiness of large eurozone members such as Italy and Spain. Nor do we think they are likely to instill sufficient confidence in these sovereigns' ability to address potential financial system stresses in their jurisdiction. In such a setting, the prospects of effectively intervening in the feedback loop between sovereign and financial sector risk are in our opinion weak." HOW DO YOU EXPECT MACROECONOMIC DEVELOPMENTS WILL AFFECT THE REFORM AGENDA? "We believe that the elusiveness of an effective policy response is likely to add to caution among households and investors alike, weighing on the growth outlook for all eurozone members. Our base case still assumes that the eurozone will record moderate growth in 2012 and 2013, i.e. 0.2% and 1%, respectively -- down from 0.4% and 1.2% according to our early December forecast, with a relatively mild recession in the first half of 2012. Nevertheless, we estimate a 40% probability that a deeper and more prolonged recession could hit the eurozone, with a likely reduction of economic activity of 1.5% in 2012. Furthermore, we believe an even deeper and more prolonged slump cannot be entirely excluded. We expect this weak macroeconomic outlook if realized would complicate the implementation of budget plans, with slippages to be expected, which would likely further dampen confidence and potentially deepen the recession, as funding and credit is curtailed and the private sector increases precautionary savings." WHAT IS YOUR VIEW OF THE LATEST DEVELOPMENTS IN GREECE AND WHAT IMPACT DO THEY HAVE YOUR ANALYSIS? "We did not change the rating on Greece, which had been downgraded to 'CC' in July 2011, indicating our view of the risk of imminent default. Negotiations with bondholders have taken longer than originally anticipated and we believe may now run close to a large redemption of EUR14.5 billion on March 20, 2012, raising the specter of a disorderly default. Such an event would in our view further complicate the restoration of affordable market access for other sovereigns experiencing market stress. We understand that the main unresolved issues are related to the treatment of holdouts, the participation of official creditors, and the coupon of the new bonds that will be offered (which partly determine the effective recovery, which we continue to expect to lie between 30% and 50%). We do not believe that private-sector involvement will necessarily be a one-off event in the case of the Greek restructuring and would not be sought in possible future bail-out packages in a future case of sovereign insolvency or prolonged loss of market access. All the more so as official lenders are less likely to bear any future losses as their lending will be channeled through the ESM, a privileged creditor that is expected to be senior to bondholders in any future restructuring." HOW DOES STANDARD & POOR'S VIEW THE ECB's RESPONSE TO DATE? "In our view, the actions of the ECB have been instrumental in averting a collapse of market confidence. We see that the ECB has eased its eligibility criteria, allowing an ever-expanding pool of assets to be used as collateral for its funding operations, and has lowered the fixed rate on its main refinancing operation to 1%, an all-time low. Most importantly in our view, it has engaged in unprecedented repurchase operations for financial institutions. In December 2011, it lent financial institutions almost EUR500 billion over three years and announced further unlimited long-term funding auctions for early 2012. This has greatly relieved the funding pressure for banks, which will have to redeem over EUR200 billion of bonded debt (excluding in some jurisdictions sizeable private placements) in the first quarter alone. By lowering the ECB deposit rate to 0.25%, we believe that the central bank has implicitly tried to encourage financial institutions to engage in a carry trade of borrowing up to three-year funds cheaply from the central bank and purchasing high-yielding government bonds. Recent Italian and other primary auctions suggest to us, however, that banks and other investors may still only be willing to lend longer term to governments facing market pressure if they are offered interest rates that, all other things being equal, will make fiscal consolidation harder to achieve. "Reports indicate that many investors had hoped that a breakthrough at the December summit would have enticed the ECB to step up its direct government bond purchases in the secondary market through its Security Market Program (SMP). However, these hopes were quickly deflated as it became clearer that the ECB would prefer to provide banks with unlimited funding, partly with the expectation that those liquid funds in banks' balance sheets would find their way into primary sovereign bond auctions. This indirect way of supporting the sovereign bond market may yet be successful, but we believe that banks may remain cautious when being faced with primary sovereign offerings, as most financial institutions have aimed at shrinking their balance sheets by running down security portfolios in order to comply with higher capital requirements, which become effective in 2012. We believe that the ECB has not entirely closed the door to expanding its involvement in the sovereign bond market but remains reluctant to do so except in more dramatic circumstances. In our view, this reluctance is likely prompted by concerns about moral hazard, the ECB's own credibility (particularly should losses mount), and potential inflation pressures in the longer term. We think it may also be the case that the ECB (as well as some eurozone governments) is concerned that governments' reform efforts would falter prematurely if market pressure subsides. "We believe that the risk of a credit crunch remains real in a number of countries as economic conditions weaken and banks continue to consolidate their balance sheets in light of tighter capital requirements and poor market conditions in which to raise additional equity. However, the monetary policy actions described above may mitigate the risk of a more extreme tightening of credit conditions, which, if it were to come to pass, could put further pressure on economic activity and employment. "In summary, while the monetary policy reaction has not been as accommodating as many investors may have anticipated or hoped for, we believe that it has nevertheless provided significant breathing space during which progress on policy reform can be made. Furthermore, the ECB may yet engage in additional supporting steps should the sovereign and bank funding crises intensify further. Therefore, we have not changed our monetary score on eurozone sovereigns. HOW DOES STANDARD & POOR'S ASSESS THE REFORM EFFORTS OF THE NEW GOVERNMENTS IN ITALY AND SPAIN? "In our view, the governments of Mario Monti and Mariano Rajoy have stepped up initiatives to modernize their economies and secure the sustainability of public finances over the long term. We consider that the domestic political management of the crisis has improved markedly in Italy. Therefore, we have not changed our political risk score for Italy because we are of the opinion that the weakening policy environment at the European level is to a sufficient degree offset by Italy's stronger domestic capacity to formulate and implement crisis-mitigating economic policies." "Despite these encouraging developments on domestic policy, we downgraded both sovereigns by two notches. This is due to our opinion that Italy and Spain are particularly prone to the risk of a sudden deterioration in market conditions. Thus, we believe that, as far as sovereign creditworthiness is concerned, the deepening of the crisis and the risks of further market dislocation that could accompany an inconclusive European crisis management strategy more than offset our view of the enhanced national policy orientation." WHY WAS IRELAND THE ONLY SOVEREIGN AMONG THE SO-CALLED "PERIPHERY" NOT DOWNGRADED? "We have not adjusted our political score backing the rating on Ireland. This reflects our view that the Irish government's response to the significant deterioration in its public finances and the recent crisis in the Irish financial sector has been proactive and substantive. This offsets our view that the effectiveness, stability, and predictability of European policymaking as a whole remains insufficient in addressing the deepening financial crisis in the eurozone. Excluding government- funded banking sector recapitalization payments, the authorities have adjusted Ireland's budget by almost 13% of estimated 2012 GDP since 2008 and plan additional fiscal savings of close to 8% of GDP for 2012-2015. All other things being equal, we view the government's fiscal consolidation plan as sufficient to achieve a general government deficit of about 3% of GDP in 2015. In our view, there is currently a strong political consensus behind the fiscal consolidation program and policy implementation so far has been extremely strong. "In our view, Ireland has the most flexible and open economy among the "periphery" sovereigns. We believe that Ireland's economic adjustment process is further advanced than in the other sovereigns currently experiencing market pressures. This is illustrated by the 25% depreciation in the trade-weighted exchange rate since May 2008 and Irish exports growth contributed positively to the muted Irish economic recovery in 2011. However, in our view this also leaves the Irish economy and, ultimately, the Irish government's fiscal consolidation program susceptible to worsening external economic conditions, which is reflected in our negative outlook on the rating." WHAT ARE THE IMPLICATIONS FOR THE EFSF AND OTHER EUROPEAN MULTILATERAL LENDING INSTITUTIONS? "Following our placement of the ratings on the eurozone sovereigns on CreditWatch in December, we also placed a number of supranational entities on CreditWatch with negative implications. These included, among others, the European Financial Stability Fund (EFSF), the European Investment Bank (EIB), and the European Union's own funding program. We are currently assessing the credit implications of the eurozone sovereign downgrades on those institutions and will publish our updated credit view in the coming days." * S&P Says Speculative-Grade Companies Rise ------------------------------------------- Standard & Poor's said in a report on Jan. 12 that since 1981, the number of U.S.-based 'AAA'-rated nonfinancial companies has dropped from 61 to four, while the number of speculative-grade companies (those rated 'BB+' and lower) has risen to more than half the 2902 U.S.-rated companies. Currently, 64%, or 1,421, of nonfinancial ratings in the U.S. are classified as speculative grade.2. This explosion of lower rated debt has helped fuel growth in many industries. At the same time, some blame the vast leverage that resulted from the growth in speculative-grade debt as one of the key factors in the credit crisis that erupted in 2008, and from which the world economy is still suffering, the agency said in a report entitled, "Born This Way: Acceptance Grows For New Speculative-Grade Companies Through 30 Years of LBOs, Bank Loans, and Falling Interest Rates" * Moody's Says Challenges to U.S. Private Label RMBS Will Persist ----------------------------------------------------------------- The credit performance of private label residential mortgage- backed securities in the US continues to face many challenges in 2012, Moody's Investors Service says in its annual outlook report, with strategic defaults posing a major risk. The performance of the loan pools backing outstanding RMBS has been stabilizing, however, and Moody's 2012 loss expectations for US RMBS are mostly unchanged. "Although delays in loan liquidation timelines and an increase in distressed sales will continue to dampen housing prices and limit recoveries on delinquent loans, they will not have a material impact on RMBS recoveries, given our already high loss expectations on RMBS pools," says Debash Chatterjee, a Moody's Associate Managing Director. Delinquency levels among loan pools have been flat or even dropping largely because of loan modifications. Moody's notes that re-default rates on modified loans have been declining, largely because payment reductions in the modifications have gotten larger. Strategic defaults will continue to pose a big risk in RMBS in 2012, says Moody's, as housing prices continue to decline. Moody's perceives the risk as greatest in the prime jumbo sector, where more than half of the borrowers, who have so far been making their mortgage payments regularly, are under water on their mortgages, a proportion that has risen significantly since late 2010. The subprime sector on the other hand faces the lowest potential for significant performance deterioration in 2012 because more of its weaker borrowers already have defaulted, leaving less room for losses to increase substantially. Moody's says the risk of performance deterioration in the Alt-A and option ARM sectors is less than that of the jumbo but greater than that of the subprime sectors, with option ARM loans facing greater risk of strategic defaults. "The practices of the servicers will continue to play a major role in determining loan performance", says William Fricke, a Moody's Vice President and Senior Credit Officer. "Although modifications that include principal forgiveness are a key way to prevent strategic defaults, we continue to expect servicers to be reluctant to employ principal forgiveness, given that the GSEs do not permit it, and that many private label RMBS carry provisions limiting the practice. " Servicing is undergoing a transformation, however, as servicers establish single points of contact for delinquent borrowers, and increasingly transfer servicing to special servicers, both credit positives. Moody's expects the issuance of private label RMBS to be modest in 2012 owing to GSE dominance and regulatory uncertainty. The deals that do take place will feature more comprehensive reviews of originators, better quality and more reliable loan level data, and strong mechanisms for enforcing breaches of representations and warranties (R&Ws). They will also better address legal issues relating to foreclosure challenges. "US Private-Label RMBS and Servicer Quality: 2012 Outlook" and all of Moody's structured finance 2012 outlooks are available at http://www.moodys.com/2012sfoutlooks. * Moody's Says 2012 Outlook for U.S. ABCP is Negative ----------------------------------------------------- The credit outlook for US asset-backed commercial paper (ABCP) in 2012 is negative, although the outlook for the credit quality of assets funded by ABCP is neutral to improving, says Moody's Investors Service. The volume of outstanding commercial paper will likely decline this year. "Our outlook for ABCP is negative primarily because of our negative outlook for the global banking sector," says Everett Rutan, a Moody's Senior Vice President. "Furthermore, both the economy and regulatory uncertainty remain negative factors for outstandings. The number of conduits and total outstandings are at best likely to be flat in 2012 and more likely to continue to decline. In 2011, for example, we rated only two new US conduits and withdrew the ratings on nine, and there's no pipeline of new conduits." The credit quality of the banks is the main driver for the credit quality of ABCP, because almost all conduits rely on liquidity facilities from the banks for timely repayment. Moody's credit outlook for the banking sector worldwide is negative, with only a few exceptions. "US-based ABCP conduits feature a variety of sponsors, such as US, European, Canadian, and Japanese banks, and many European-based ABCP conduits fund in the US ABCP market," says Mr. Rutan. "Therefore, there are opportunities out there for investors to diversify their exposures." Asset credit quality has generally not been an issue in the multi- seller ABCP conduits that now dominate the US market, and sponsors have removed troubled assets from their conduits. More than 50% of multi-seller conduits consist of consumer debt, with the share of corporate assets such as trade receivables, equipment loans and leases, and corporate loans at just over 40%. Securities holdings continue to amortize and make up the remainder, at nearly 8%. The level of commercial paper outstanding declined steadily throughout 2011, although it stabilized somewhat towards the end of the year. "Facility utilization remains below 40% for the US multi-sellers," notes Rutan. "Depending on the pace of economic activity, low utilization could either portend further declines or facilitate a rapid rise in outstandings if demand increases." Although regulatory factors have not affected the credit quality of ABCP conduits, they have raised the costs of programs and led to changes in conduit structures. In addition, ongoing uncertainty over the wording, interpretation, and enforcement of new regulations, such as the Volker rule, will be a negative factor for both outstandings and new conduit formation. "Sponsors and originators will be less willing to bear those costs if they don't know precisely what the rules will be," says Mr. Rutan. * Mintz Levin Further Expands West Coast Presence ------------------------------------------------- Mintz Levin Cohn Ferris Glovsky and Popeo, P.C. disclosed a significant expansion of the firm's San Diego office with the addition of Raj Tanden, Howard N. Wisnia, and James P. Conley. Mr. Tanden is joining the firm's Corporate and Securities and Tax Sections as a Member. Mr. Wisnia and Mr. Conley will be joining as Members in the firm's Intellectual Property Section, focusing on IP litigation. "As accomplished attorneys in corporate, tax and intellectual property, Raj, Howard, and Jim each bring a unique expertise that will add to our capabilities in these areas, and a combined experience that will strengthen our presence in the region," said Eddie Wang Rodriguez, Managing Member of the firm's San Diego office and a member of the firm's Policy Committee. "Over the course of five years, Mintz Levin has established a formidable presence in the San Diego market, attracting numerous talented attorneys and becoming an integral part of the area's vibrant life sciences, corporate, intellectual property and technology communities. We are thrilled to have Raj, Howard and Jim join us." Mr. Tanden will practice in the firm's Los Angeles and San Diego offices. His experience includes work in the corporate transaction practice in the private equity/fund formations area. He advises clients on U.S. and global corporate and tax matters relating to private equity, capital markets and financial instruments, joint ventures, bankruptcy, restructurings, mergers and acquisitions, divestitures and spin-offs, credit transactions, and real estate transactions. He also assists clients with state and local tax matters, controversies, executive compensation, tax due diligence and general tax planning. Mr. Tanden is the Chair of the American Bar Association Tax Section Investment Management Committee. He earned his B.S. cum laude from the University of Southern California Leventhal School of Accounting, his J.D. from the University of Southern California Gould School of Law, and his LL.M. from the New York University School of Law. Prior to joining Mintz Levin, Mr. Wisnia led the San Diego IP Practice Group for an international law firm focusing his practice on litigating intellectual property disputes and counseling clients on patent and trademark issues. He has significant IP litigation experience in a variety of fields including medical devices, the financial industry, telecommunication and semiconductors. He also counsels clients in IP licensing and pre- litigation avoidance. Mr. Wisnia earned his B.S.E.E and J.D. from George Washington University. Mr. Conley is an experienced intellectual property litigator focusing on patent litigation. He also advises clients on a range of issues including patent and trademark portfolio development, licensing, opinions and due diligence relating to mergers, financing and IPOs. Mr. Conley regularly works with clients in the mechanical, electrical and software disciplines, with specific emphasis on medical devices and cleantech. Mr. Conley received his B.S. in Mechanical Engineering from University of Wisconsin-Madison, and his J.D. magna cum laude from the University of Wisconsin. * Siguler Guff Closes First Distressed Real Estate Fund of Funds ---------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review, January 11, 2012, Siguler Guff & Co. is expanding its business with the close of its debut fund of funds focused on the distressed real estate market with $630 million. * BOND PRICING -- For Week From Jan. 9 to 13, 2012 -------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- ACARS-GM 8.100 6/15/2024 1.000 AGY HOLDING COR 11.000 11/15/2014 25.900 AHERN RENTALS 9.250 8/15/2013 26.270 ALION SCIENCE 10.250 2/1/2015 49.800 AM AIRLN PT TRST 7.379 5/23/2016 17.250 AM AIRLN PT TRST 7.377 5/23/2019 18.500 AM AIRLN PT TRST 9.730 9/29/2014 23.750 AM AIRLN PT TRST 10.180 1/2/2013 56.000 AMBAC INC 9.375 8/1/2011 10.000 AMBAC INC 9.500 2/15/2021 10.000 AMBAC INC 7.500 5/1/2023 10.001 AMBAC INC 5.950 12/5/2035 13.250 AMERICAN ORIENT 5.000 7/15/2015 46.390 AMR CORP 10.125 6/1/2021 15.500 AMR CORP 10.550 3/12/2021 18.250 AMR CORP 10.290 3/8/2021 19.100 AMR CORP 10.150 5/15/2020 20.000 AMR CORP 10.200 3/15/2020 20.770 AMR CORP 9.750 8/15/2021 21.000 AMR CORP 9.800 10/1/2021 21.100 AMR CORP 10.000 4/15/2021 21.218 AMR CORP 9.880 6/15/2020 21.715 AMR CORP 9.000 8/1/2012 23.500 AMR CORP 6.250 10/15/2014 23.550 AQUILEX HOLDINGS 11.125 12/15/2016 41.500 BANKUNITED FINL 3.125 3/1/2034 4.915 BLOCKBUSTER INC 11.750 10/1/2014 1.625 BON-TON DEPT STR 10.250 3/15/2014 53.000 BON-TON DEPT STR 10.250 3/15/2014 54.125 CALIF BAPTIST 7.600 11/15/2012 20.000 CALIF BAPTIST 7.900 11/15/2017 20.000 CIRCUS & ELDORAD 10.125 3/1/2012 76.250 CIT-CALL01/12 7.000 5/1/2015 99.944 DELTA PETROLEUM 3.750 5/1/2037 70.000 DIRECTBUY HLDG 12.000 2/1/2017 21.625 DIRECTBUY HLDG 12.000 2/1/2017 29.000 DUNE ENERGY INC 10.500 6/1/2012 90.260 DYNEGY HLDGS INC 8.750 2/15/2012 61.550 EASTMAN KODAK CO 7.000 4/1/2017 27.000 EASTMAN KODAK CO 9.950 7/1/2018 27.000 EASTMAN KODAK CO 7.250 11/15/2013 30.750 EDDIE BAUER HLDG 5.250 4/1/2014 6.750 ENERGY CONVERS 3.000 6/15/2013 39.500 EVERGREEN SOLAR 4.000 7/15/2020 0.250 EVERGREEN SOLAR 13.000 4/15/2015 45.000 FAIRPOINT COMMUN 13.125 4/2/2018 4.950 FIBERTOWER CORP 9.000 11/15/2012 9.375 GLOBALSTAR INC 5.750 4/1/2028 45.000 GMX RESOURCES 5.000 2/1/2013 58.000 GMX RESOURCES 5.000 2/1/2013 65.250 GREAT ATLA & PAC 5.125 6/15/2011 2.000 HAWKER BEECHCRAF 9.750 4/1/2017 12.550 HAWKER BEECHCRAF 8.500 4/1/2015 20.440 HUTCHINSON TECH 3.250 1/15/2026 62.000 JPMORGAN CHASE 4.500 1/15/2012 100.043 KELLWOOD CO 7.625 10/15/2017 21.150 LEHMAN BROS HLDG 5.000 1/22/2013 23.143 LEHMAN BROS HLDG 5.100 1/28/2013 24.000 LEHMAN BROS HLDG 5.000 8/3/2014 24.000 LEHMAN BROS HLDG 7.000 6/26/2015 24.000 LEHMAN BROS HLDG 5.000 8/5/2015 24.000 LEHMAN BROS HLDG 7.000 12/18/2015 24.000 LEHMAN BROS HLDG 6.000 2/12/2018 24.000 LEHMAN BROS HLDG 5.000 2/11/2013 24.350 LEHMAN BROS HLDG 11.000 7/18/2022 24.500 LEHMAN BROS HLDG 9.500 12/28/2022 24.500 LEHMAN BROS HLDG 9.500 1/30/2023 24.500 LEHMAN BROS HLDG 9.500 2/27/2023 24.825 LEHMAN BROS HLDG 5.875 11/15/2017 24.880 LEHMAN BROS HLDG 4.700 3/6/2013 25.000 LEHMAN BROS HLDG 10.000 3/13/2023 25.000 LEHMAN BROS HLDG 10.375 5/24/2024 25.000 LEHMAN BROS HLDG 5.000 3/27/2013 25.125 LEHMAN BROS HLDG 5.150 2/4/2015 25.125 LEHMAN BROS HLDG 11.000 3/17/2028 25.250 LEHMAN BROS HLDG 11.500 9/26/2022 25.300 LEHMAN BROS HLDG 5.750 5/17/2013 25.416 LEHMAN BROS HLDG 8.500 8/1/2015 25.500 LEHMAN BROS HLDG 5.500 4/4/2016 25.500 LEHMAN BROS HLDG 5.250 2/11/2015 25.550 LEHMAN BROS HLDG 8.800 3/1/2015 25.625 LEHMAN BROS HLDG 4.800 3/13/2014 25.700 LEHMAN BROS HLDG 11.000 6/22/2022 25.750 LEHMAN BROS HLDG 5.625 1/24/2013 26.000 LEHMAN BROS HLDG 6.000 7/19/2012 26.130 LEHMAN BROS HLDG 6.200 9/26/2014 27.000 LOCAL INSIGHT 11.000 12/1/2017 0.501 MANNKIND CORP 3.750 12/15/2013 53.000 MF GLOBAL LTD 9.000 6/20/2038 34.000 MOHEGAN TRIBAL 7.125 8/15/2014 57.500 MOHEGAN TRIBAL 8.000 4/1/2012 86.000 PENSON WORLDWIDE 8.000 6/1/2014 39.816 PMI GROUP INC 6.000 9/15/2016 21.500 RADIAN GROUP 5.625 2/15/2013 70.875 REAL MEX RESTAUR 14.000 1/1/2013 50.125 REDDY ICE CORP 13.250 11/1/2015 39.250 RESIDENTIAL CAP 8.500 4/17/2013 67.125 RESIDENTIAL CAP 8.500 6/1/2012 87.875 TEXAS COMP/TCEH 10.250 11/1/2015 26.250 TEXAS COMP/TCEH 10.250 11/1/2015 28.000 TEXAS COMP/TCEH 10.250 11/1/2015 31.100 THORNBURG MTG 8.000 5/15/2013 8.000 TIMES MIRROR CO 7.250 3/1/2013 36.250 TITAN INTL INC 8.000 1/15/2012 99.750 TOUSA INC 9.000 7/1/2010 12.967 TOUSA INC 9.000 7/1/2010 12.967 TRAVELPORT LLC 11.875 9/1/2016 28.875 TRAVELPORT LLC 11.875 9/1/2016 31.000 TRICO MARINE 3.000 1/15/2027 1.000 TVL-CALL01/12 6.500 5/15/2013 100.250 VERSO PAPER 11.375 8/1/2016 41.500 WILLIAM LYON INC 10.750 4/1/2013 26.500 WILLIAM LYON INC 7.500 2/15/2014 26.583 WILLIAM LYONS 7.625 12/15/2012 25.902 YELLOW CORP 5.000 8/8/2023 19.500 ********* 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 ***