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/raid1/www/Hosts/bankrupt/TCR_Public/120213.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, February 13, 2012, Vol. 16, No. 43 Headlines 155 EAST: Cash Collateral Hearing Continued Until April 27 155 EAST: Buyer for Hooters Casino Hotel to Be Named Feb. 17 18 SENNA: Involuntary Chapter 11 Case Summary 2655 BUSH: Case Summary & 10 Largest Unsecured Creditors 785 PARTNERS: Debt Assignee Has Standing to Challenge Plan AES EASTERN: NY AG Opposes Emission Credits Sale Plan AIRVANA NETWORK: Cut by S&P to 'CCC' Amid Dispute with Ericsson ALC HOLDINGS: Committee Taps Herrick Feinstein as Counsel ALC HOLDINGS: Committee Proposes J.H. Cohn as Financial Advisor ALC HOLDINGS: Has Until July 5 to Decide on Real Property Leases ALC HOLDINGS: Panel Taps Ashby & Geddes as Delaware Counsel ALROSE KING: DCI Asks for Dismissal or Conversion of Case ALROSE KING: Reaches Deal With BFSB; Owners to Retain Control ALROSE KING: Seeks Approval of Plan Support Agreement ALLTRUST REALTY: To Pay $3,750 to PBS as Adequate Protection ANGEL MARTINEZ: Court Keeps Case Dismissal Ruling AQUILEX HOLDINGS: S&P Withdraws 'D' Corporate Credit Rating ARRAY BIOPHARMA: Posts $3.8-Mil. Net Loss in Dec. 31 Quarter AVANTAIR INC: Incurs $872,000 Net Loss in Fiscal Q2 2012 BAKERS FOOTWEAR: Reports $53.6 Million Net Sales in Fiscal Q4 BARNEYS NEW YORK: S&P Lowers Corporate Credit Rating to 'CC' BEAR ISLAND: Hearing on Plan Confirmation Resumes Tomorrow BEAZER HOMES: Stockholders Elect 7 Directors at Annual Meeting BERNARD L. MADOFF: Mets Asks High Court to Review 2nd Circ. Ruling BION ENVIRONMENTAL: Incurs $1 Million Net Loss in Dec. 31 Quarter BIORELIANCE CORP: S&P Withdraws 'B+' Corporate Credit Rating BIOZONE PHARMACEUTICALS: Daniel Fisher Resigns as Director BMB MUNAI: Hires Lakeview to Wind Down Kazakhstan Operations BRAINY BRANDS: Errors Found on Financial Reports BRAYTON INVESTMENT: Wikas Granted $265,737 Secured Claim BUTLER INT'L: Twin City Insurance Off The Hook for Coverage CAESARS ENTERTAINMENT: Publicly Lists Shares on Nasdaq Global CARBON ENERGY: Court OKs Kolesar & Leatham as General Counsel CARDICA INC: Posts $3.2-Mil. Net Loss in Dec. 31 Quarter CATALYST PAPER: TSE to Delist Shares on March 8 CENTRAL BUILDING: Wants Plan Filing Deadline Extended to March 1 CHINA TEL GROUP: Shares Issued Exceed 5% of Outstanding Shares CHRIST HOSPITAL: Group Urges Officials to Seek Community's Input CIRCUS AND ELDORADO: Auditor Issues Going Concern Qualification CITIZENS REPUBLIC: Moody's Affirms 'Ba3' Deposit Ratings COMMUNITY HEALTH: Moody's Rates Proposed Term Loan A at 'Ba3' CONNAUGHT GROUP: Carlisle Collection in Chapter 11, Seeks Sale CORNERSTONE BANCSHARES: Banc Fund Ceases to Hold 5% Equity Stake CRYSTAL CATHEDRAL: Catholic Diocese Is New Owner of Property CUSTER ROAD: Voluntary Chapter 11 Case Summary DAIS ANALYTIC: Amends Prospectus on 33MM Shares Offering DENNY'S CORP: Invesco Ltd. Discloses 4.3% Equity Stake DENNY'S CORP: Vanguard Group Discloses 5.2% Equity Stake DIAMOND FOODS: Fin'l Restatements May Violate Loan Covenants EASTMAN KODAK: To Phase Out Dedicated Capture Devices Business EMBARCADERO RE: S&P Assigns 'BB-' Rating to Series 2012-I Notes EMMIS COMMUNICATIONS: AQR Capital Discloses 4.5% Equity Stake FLYING FORTRESS: Moody's Assigns 'Ba3' Rating to $900-Mil. Loan FRANK SUTTON: Court Rejects Plan That Puts Unsecureds in 2 Classes GENCORP INC: Retirement Plan Discloses 6.3% Equity Stake GENOA HEALTHCARE: S&P Affirms 'B' Corporate; Outlook Negative GLOBAL BRASS: S&P Puts 'B' Corp. Credit Rating on Watch Positive GMX RESOURCES: Jefferies Discloses 3.2% Equity Stake GORDON PROPERTIES: Court Rejects Substantive Consolidation Bid GUIDED THERAPEUTICS: Richard Blumberg Discloses 6.5% Equity Stake HAWAIIAN TELCOM: Moody's Rates $300MM Sr. Sec. Term Loan at 'B1' HCA INC: To Sell $1.3 Billion of 5.875% Senior Secured Notes HEARTHSTONE HOMES: Voluntary Chapter 11 Case Summary HERCULES OFFSHORE: Vanguard Group Discloses 4.4% Equity Stake HORIZON LINES: Credit Suisse Discloses 4.1% Equity Stake HOSTESS BRANDS: CEO Could Get $2MM Bonus Under Employment Deal IMPERIAL INDUSTRIES: Charles Cheever Discloses 6.9% Equity Stake ISTAR FINANCIAL: Vanguard Group Discloses 5.2% Equity Stake JAMES RIVER: Vanguard Group Discloses 5.2% Equity Stake LONE PINE: S&P Assigns 'B' Long-Term Corporate Credit Rating LSP ENERGY: Files for Chapter 11 to Sell Miss. Natural Gas Plant IQOR HOLDINGS: S&P Lowers Corporate Credit Rating to 'B-' ISAACSON STRUCTURAL: Wants Until Tomorrow to File Cash Use Motion LANCASTER MARITIME: Case Summary & 50 Largest Unsecured Creditors LEVEL 3: Incurs $163 Million Net Loss in Fourth Quarter LPATH INC: Marathon Capital Ceases to Hold 5% Equity Stake LYMAN LUMBER: Wants to Employ Eau Claire as Realtor MAQ MANAGEMENT: Stipulation Approved on Adequate Protection MAQ MANAGEMENT: Prohibited From Using BB&T's Cash Collateral MAQ MANAGEMENT: Expects to File 'Material Amendments' to Plan MARCO POLO: Committee Investigation Period Extended Until Feb. 29 MARCO POLO: Wants Plan Exclusivity Period Extended to Feb. 29 MARITIME TELECOMMUNICATIONS: S&P Affirms 'B'; Outlook Now Positive MBIA INC: Admits Errors in 2009 Restructuring Filing MCCLATCHY CO: Posts $42 Million Net Income in Fourth Quarter MCCLATCHY CO: BlackRock Discloses 5.7% Equity Stake MCCLATCHY CO: UBS AG Ceases to Hold 5% of Class A Shares METAL STORM: Proposes to Issue Ordinary Shares MGM RESORTS: Moody's Says Bank Amendment Credit Positive MORGAN'S FOODS: JCP Investment Discloses 12.6% Equity Stake MULTIPLAN INC: Moody's Says B2 CFR Reflects Leverage, Low Growth MUNICIPAL MORTGAGE: Francis Gallagher Appointed to Board ODYSSEY (IX): Gets Final Approval to Access Cash Collateral ODYSSEY (IX): Maloney OK'd as Chief Restructuring Officer ODYSSEY (IX): Files Schedules of Assets and Liabilities ODYSSEY (IX): Mediation Expected to Be Completed Wednesday OPEN RANGE: Wants Case Converted to Chapter 7 Proceeding PACIFIC MONARCH: Baker & McKenzie Okayed as Mexican Tax Counsel P.H. GLATFELTER: Moody's Raises Corporate Family Rating to 'Ba1' PIMA AND TUCSON: Moody's Cuts Series 2007A-2 Note Rating to 'B3' PINNACLE AIRLINES: Amends Capacity Purchase Pact with United Air PMI GROUP: Committee Can Retain Morrison & Foerster as Counsel PMI GROUP: Committee Can Retain Womble Carlyle as Co-Counsel POTOMAC SUPPLY: Owners Discuss Use of Cash Collateral PRM SMITH: Court Approves Benjamin Currence as Litigation Counsel QUANTUM CORP: Capital Research Discloses 7.8% Equity Stake RAYMOND MARC GUILLAUME: Tall Pines Claim Pegged at $10,500 REAL MEX: Creditors Accuse Noteholders of Gamesmanship REAL MEX: Board Approves Bid to Acquire All Assets REYNOLDS GROUP: S&P Affirms 'B+' Corporate; Outlook Negative RIDGE PARK: Stipulation for Continued Cash Collateral Use OK'd ROCKWOOD SPECIALTIES: S&P Raises Corp. Credit Rating to 'BB+' SEALY CORP: Franklin Resources Ceases to Hold 5% Equity Stake SEARCHMEDIA HOLDINGS: Has Direct Control of Subsidiaries SEJWAD HOTELS: Case Summary & 7 Largest Unsecured Creditors SINCLAIR BROADCAST: Posts $23.2-Mil. Net Income in 4th Quarter SINCLAIR BROADCAST: Vanguard Group Discloses 6.3% Equity Stake SINCLAIR BROADCAST: BlackRock Discloses 5.2% Equity Stake SINCLAIR BROADCAST: LSV Asset Holds 5.4% of Class A Shares SK FOODS: 9th Cir. Rules on Bid to Retrieve Seized Docs SOUTHERN OAKS: Quail Creek Bank Wants Pre-Bankruptcy Merger Probed SOUTHERN OAKS: Hires Welch Law Firm as Chapter 11 Counsel SOUTHERN OAKS: Sec. 341 Creditors' Meeting Set for March 5 SPANISH BROADCASTING: S&P Affirms 'B-'; Outlook Hiked to Stable STATE AUTO FINC'L: S&P Affirms 'BB+' Counterparty Credit Rating SUNOCO INC: S&P Affirms 'BB+', Removes Watch Negative SUNTRICITY POWER: Files for Chapter 11 Bankruptcy Protection TAO-SAHI LP: Has Access to S2 Cash Collateral Until Feb. 28 TAO-SAHI LP: Plan Confirmation Hearing Continued Until March 7 TAO-SAHI LP: FDIC Wants $1.8MM Claim Allowed for Plan Voting TRIDENT MICROSYSTEMS: Time to File Schedules Extended to Feb. 22 TRIDENT MICROSYSTEMS: Can Employ DLA Piper as Counsel TRIDENT MICROSYSTEMS: Can Employ Union Square as Investment Banker TRIDENT MICROSYSTEMS: Can Employ PwC LLP as Tax Advisor UNISYS CORP: BlackRock Discloses 5.3% Equity Stake UNITED RETAIL: U.S. Trustee Names 7-Member Creditors Panel UNITED RETAIL: Bidding Procedures Hearing on Feb. 21 UNITED RETAIL: Schedules Filing Deadline Moved to March 16 UNITED RETAIL: Final Hearing on $40MM Wells Fargo Loan on Feb. 21 UNITED RETAIL: Wins OK to Hire Donlin Recano as Claims Agent VALENCE TECHNOLOGY: Incurs $2.4 Million Net Loss in Fiscal Q3 VILLAGE RESORTS: Wants to Hire Bauch & Michaels as Counsel VILLAGE RESORTS: Deadline to File Proofs of Claim on March 26 VILLAGE RESORTS: Files Schedules of Assets and Liabilities VITESSE SEMICONDUCTOR: AQR Capital Discloses 8.8% Equity Stake VITESSE SEMICONDUCTOR: AQR Absolute Discloses 8.8% Equity Stake VOLUNTEER BANCORP: Going Concern Doubt Raised on 2010 Form 10-K WAGSTAFF MINNESOTA: Committee Has Until March 2 to Challenge Liens WASHINGTON LOOP: Ch. 11 Wants Wells Fargo's Stay Plea Denied WASHINGTON MUTUAL: HoldCo Objects to Seventh Amended Joint Plan WESTERN POZZOLAN: Status Conference Set for March 14 WOODLAKE GOLF: Files for Chapter 11 Bankruptcy Protection WORLD SURVEILLANCE: La Jolla To Sell 50 Million of Common Shares WORLD SURVEILLANCE: Raymer Maguire Discloses 7.1% Equity Stake WWA GROUP: Amends 2010 Form 10-K; Has $1.7-Mil. Restated Net Loss * US Trustee Stands By Changes to Ch. 11 Fee Guidelines * 9th Circ. Won't Rule On Orders Keeping Trustees Onboard * BOND PRICING -- For Week From Feb. 6 to 10, 2012 ********* 155 EAST: Cash Collateral Hearing Continued Until April 27 ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada approved a third stipulation continuing until April 27, 2012, at 9:30 a.m., the hearing to consider 155 East Tropicana, LLC, et al.'s motion to use cash collateral. The hearing was previously scheduled for Jan. 25, at 9:30 a.m. The Court also ordered that the deadline to file written opposition to final relief in the cash collateral motion will be continued to April 13, and the deadline to file and serve any replies to the oppositions will be continued to April 20. A full-text copy of the stipulation is available or free at: http://bankrupt.com/misc/155EAST_cashcoll-stipulation.pdf The stipulation was entered among 155 East Tropicana, LLC, and 155 East Tropicana Finance Corp., Canpartners Realty Holding Company IV LLC, as agent, credit facility lender and holder of senior secured notes, and U.S. Bank National Association, in its capacity as trustee. About 155 East Tropicana 155 East Tropicana LLC owns the world's first Hooters Casino Hotel, a 696-room and 4-suite hotel located one block from the Las Vegas Strip and across Tropicana Blvd. from MGM Grand. 155 East Tropicana, along with an affiliate, sought Chapter 11 protection (Bankr. D. Nev. Case No. 11-22216) on Aug. 1, 2011. 155 East sought bankruptcy protection to stop a scheduled Aug. 8 foreclosure of the second-lien debt. The two secured credit facilities were accelerated early this year. Canpartners Realty Holding Co. IV LLC acquired 98.4% of the $130 million in 8.75% second-lien senior secured notes. An additional $32.2 million of interest is owing on the second-lien debt, with US Bank NA as the indenture trustee. Holders of the $14.5 million in first-lien debt have Wells Fargo Capital Finance Inc. as their agent. The first-lien obligation is fully secured. Interest has been paid at the default rate. Gerald M. Gordon, Esq., and Brigid M. Higgins, Esq., at Gordon Silver, in Las Vegas, Nevada, serve as counsel to the Debtors. Garden City Group, Inc., is the claims agent. William G. Kimmel & Associates has been hired to provide an appraisal of the Debtors' casino hotel/property. Alvarez & Marsal serves as financial and restructuring advisor. Innovation Capital LLC serves as financial advisor for capital raising transactions and M&A transactions. 155 EAST: Buyer for Hooters Casino Hotel to Be Named Feb. 17 ------------------------------------------------------------ The Hon. Bruce A. Markell of the U.S. Bankruptcy Court for the District of Nevada in January entered an order authorizing 155 East Tropicana, LLC, et al., to conduct a sale process for substantially all of their assets. As reported in the Troubled Company Reporter on Feb. 7, 2012, the biggest lender behind the Hooters Casino Hotel is offering $60 million for the attraction located just off the Las Vegas Strip. The disclosure statement explaining the Chapter 11 plan submitted by the Debtor on Jan. 11, 2012, says that the Debtors intend to maximize return to creditors though a sale of the assets to a third-party buyer or a credit bid by U.S. Bank, N.A., the indenture trustee under the 8.75% senior secured notes. The Court's order provides that if more than one qualified bid is timely received by the Feb. 10 deadline, a bankruptcy Court- supervised auction may be conducted at the outset of the Feb. 17 sale hearing to determine the winning bidder. Qualified bids are due Feb. 10, at 4:00 p.m., prevailing Pacific Time. The Court further ordered that any secured creditor wishing to submit a credit bid must do so at the time of the sale hearing. A full-text copy of the order and the bid procedures is available for free at http://bankrupt.com/misc/155EAST_sale_order.pdf The obtaining of gaming licensing approvals of the buyer is not a condition to the closing of the transactions contemplated by the sale procedures, which closing must occur by March 30, 2012. Of the buyer of the assets has no necessary gaming licenses, the Debtors may continue to operate the Casino Hotel or prortions thereof beyond the closing date. About 155 East Tropicana 155 East Tropicana LLC owns the world's first Hooters Casino Hotel, a 696-room and 4-suite hotel located one block from the Las Vegas Strip and across Tropicana Blvd. from MGM Grand. 155 East Tropicana, along with an affiliate, sought Chapter 11 protection (Bankr. D. Nev. Case No. 11-22216) on Aug. 1, 2011. 155 East sought bankruptcy protection to stop a scheduled Aug. 8 foreclosure of the second-lien debt. The two secured credit facilities were accelerated early this year. Canpartners Realty Holding Co. IV LLC acquired 98.4% of the $130 million in 8.75% second-lien senior secured notes. An additional $32.2 million of interest is owing on the second-lien debt, with US Bank NA as the indenture trustee. Holders of the $14.5 million in first-lien debt have Wells Fargo Capital Finance Inc. as their agent. The first-lien obligation is fully secured. Interest has been paid at the default rate. Gerald M. Gordon, Esq., and Brigid M. Higgins, Esq., at Gordon Silver, in Las Vegas, Nevada, serve as counsel to the Debtors. Garden City Group, Inc., is the claims agent. William G. Kimmel & Associates has been hired to provide an appraisal of the Debtors' casino hotel/property. Alvarez & Marsal serves as financial and restructuring advisor. Innovation Capital LLC serves as financial advisor for capital raising transactions and M&A transactions. 18 SENNA: Involuntary Chapter 11 Case Summary --------------------------------------------- Alleged Debtor: 18 Senna LLC 2400 Augusta, Suite 288 Houston, TX 77057 Bankruptcy Case No.: 12-31077 Involuntary Chapter 11 Petition Date: Court: U.S. Bankruptcy Court Southern District of Texas (Houston) Petitioner's Counsel: Barry Allan Brown, Esq. Attorney at Law 7322 SW Freeway, Suite 1100 Houston, TX 77074 Tel: (713) 981-3880 Fax: (713) 981-3881 E-mail: tebear05@msn.com Creditor who signed the Chapter 11 petition: Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Elliot Weiss Note $274,675 c/o Barry Brown 7322 SW Freeway, Suite 1100 Houston, TX 77074 2655 BUSH: Case Summary & 10 Largest Unsecured Creditors -------------------------------------------------------- Debtor: 2655 Bush LLC 2655 Bush Street San Francisco, CA 94115 Bankruptcy Case No.: 12-30388 Chapter 11 Petition Date: February 8, 2012 Court: U.S. Bankruptcy Court Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Michael St. James, Esq. ST. JAMES LAW, P.C. 155 Montgomery Street, #1004 San Francisco, CA 94104 Tel: (415) 391-7566 E-mail: ecf@stjames-law.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Ernest McNabb, managing member. Debtor's List of Its 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Robert Guichard -- $50,000 P.O. Box 122 Kentfield CA 94914 ABC Parking -- $5,000 Kevin Wong 854 30th Avenue San Francisco, CA 94121 Law Offices of Mark J. Romeo -- $2,323 235 Montgomery Street, Suite 410 San Francisco, CA 94104 Wiegel Law Group -- $2,000 William D.A. Kremen -- $2,000 Umanzor Construction -- $1,000 Ena Lin -- $550 Joseph L. Chennault -- $150 S.F. Water, Power & Sewer -- $130 Building Green Projects -- $100 785 PARTNERS: Debt Assignee Has Standing to Challenge Plan ---------------------------------------------------------- Bankruptcy Judge Stuart M. Bernstein ruled that First Manhattan Developments REIT, which acquired a note secured by an unoccupied apartment building located at 785 Eighth Avenue in Manhattan, has standing to object to the bankruptcy plan filed by the building's owner and developer, 785 Partners LLC. Judge Bernstein said the assignment to First Manhattan was valid, not void, and First Manhattan acquired the rights of the original lenders as a secured creditor and "party in interest." The Debtor acquired the Property in January 2007. Pursuant to a Building Loan Agreement,2 dated as of Jan. 25, 2007, the Debtor borrowed roughly $84 million from PB Capital Corporation and Commerce Bank, N.A. giving a mortgage on the Property to secure the debt. First Manhattan contends that it is owed in excess of $105 million. The Debtor scheduled the claim as a disputed, contingent, and unliquidated claim in the sum of $81,212,506. The Debtor's plan places First Manhattan's secured claim in Class 3, and it is the only creditor in that class. According to Judge Bernstein, for purposes of Class 3 voting, it does not matter if its claim is estimated at $1 or $100 million. Judge Bernstein said although it appears to the Court that First Manhattan holds a claim for no less than the principal amount of the debt plus interest up to the petition date (assuming First Manhattan is undersecured) at the non-default rate, the Court will estimate its claim for voting purposes at $1. A copy of the Court's Feb. 7, 2012 Memorandum Decision and Order is available at http://is.gd/YNilSffrom Leagle.com. About 785 Partners LLC 785 Partners LLC owns a 42-story building on 785 Eighth Avenue, New York. The developer intended to sell 122 condominium units, but it failed to obtain the requisite condominium approvals from the New York State Attorney General. 785 Partners is owned 98.75% by 8 Avenue and 48th Street Development LLC. The remaining membership interests are held by Esplanade Tower Corporation -- its managing member, the holder of a 1% membership interest, and a wholly-owned subsidiary of 8 Avenue -- and Esplanade 8th Avenue LLC -- holder of a passive 0.25% membership interest. The Company obtained $84 million of secured financing in January 2007 from PB Capital Corporation, and TD Bank, N.A. First Manhattan later bought the secured claim and says the claim has risen to $101 million, which is higher than the market value of the property. 785 Partners filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 11-13702) on Aug. 3, 2011. Sheldon I. Hirshon, Esq., Craig A. Damast, Esq., and Lawrence S. Elbaum, Esq., at Proskauer Rose LLP, in New York, represent the Debtor as counsel. Weitzman Group Inc. serves as real estate and financial consultant. In its schedules, the Debtor disclosed $106,000,000 in assets and $95,467,612 in liabilities, all secured. Attorneys for First Manhattan Developments REIT are Silverman Acampora LLP and Schiff Hardin, LLP. On Dec. 14, 2011, the Bankruptcy Court approved the adequacy of the Second Amended Disclosure Statement for the Third Amended Plan of Reorganization filed in the Chapter 11 case of 785 Partners. Terms of the Plan were reported in the Jan. 13, 2012, Nov. 10, 2011, and Oct. 24, 2011 editions of the Troubled Company Reporter. Holders of allowed general unsecured claims will be paid in full, in cash, under the plan. Old membership interests will be canceled and extinguished. 8 Avenue will receive 63.75% of the new membership interests, Tower will receive 1.00%, and Esplanade will receive 0.25%. AES EASTERN: NY AG Opposes Emission Credits Sale Plan ----------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that New York's attorney general on Tuesday blasted AES Eastern Energy LP's plan to sell $30 million of cap-and-trade emissions credits in bankruptcy, saying the sale will result in hefty penalties that far exceed the cash it could raise. In an objection filed in Delaware bankruptcy court, Attorney General Eric Schneiderman said AES Eastern -- which owns six coal- fired power plants -- needs to retain the credits to cover its greenhouse gas emissions from 2009 to 2011 under the Regional Greenhouse Gas Initiative, according to Law360. About AES Eastern Ithaca, New York-based AES Eastern Energy, L.P., either directly or indirectly, control six coal-fired electric generating plants located in New York State. Currently, the Debtors actively operate two of the six Power Plants and sell the electricity generated by those Power Plants, as well as unforced capacity and ancillary services, into the New York wholesale power market to utilities and other intermediaries under short-term agreements or directly in the spot market. AES Eastern Energy and 13 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-14138 through 11-14151) on Dec. 30, 2011. Lawyers at Weil, Gotshal & Manges LLP and Richards, Layton & Finger, P.A., are legal counsel to AES Eastern Energy and affiliates. Barclays Capital is serving as investment banker and financial advisor. Kurtzman Carson Consultants serves as claims and noticing agent. AES Eastern Energy estimated $100 million to $500 million in assets and $500 million to $1 billion in debts. The petition was signed by Peter Norgeot, general manager. Gregory A. Horowith, Esq., and Robert T. Schmidt, Esq., at Kramer, Levin, Naftalis & Frankel LLP; and William T. Bowden, Esq., Benjamin W. Keenan, Esq., and Karen B. Skomorucha, Esq., at Ashby & Geddes, P.A., are the proposed counsel to the Creditors' Committee. AIRVANA NETWORK: Cut by S&P to 'CCC' Amid Dispute with Ericsson --------------------------------------------------------------- Standard & Poor's Ratings Services lowered all of its credit ratings, including its corporate credit and issue ratings, on Chelmsford, Mass.-based Airvana Network Solutions Inc. to 'CCC' from 'B+'. "In addition, we placed the ratings on CreditWatch with developing implications, which means we may raise, lower, or affirm the ratings once we resolve the CreditWatch," said Standard & Poor's credit analyst William Backus. "The ratings reflect Airvana's dependence on Sweden-based telecommunications equipment supplier Ericsson AB for essentially 100% of its revenues. On Feb. 8, 2012, Airvana filed a lawsuit against Ericsson in the Supreme Court of the State of New York in which it claims that Ericsson misappropriated critical IP," S&P said. "As a result, we have revised our business risk profile assessment to 'vulnerable' from 'weak' to reflect Airvana's potential loss of revenues from its sole customer," Mr. Backus said. "The developing CreditWatch reflects the significant uncertainty regarding the outcome from the legal proceedings against Ericsson." Airvana's suit alleges that Ericsson violated key terms of its contract with Airvana and misappropriated Airvana's critical intellectual property, among other items. Airvana is seeking at least $330 million from Ericsson in damages and an injunction barring Ericsson from marketing a competing software product. "Airvana, founded in 2000, provides mission-critical network infrastructure software products used by wireless operators to provide third-generation (3G) mobile broadband services. It went public with an IPO in 2007. In April 2010, a consortium of private-equity investors led by S.A.C. Private Capital Group took the company private. Ericsson AB acquired Airvana's sole customer, formerly known as Nortel Networks Corp., out of bankruptcy in November 2009," S&P said. ALC HOLDINGS: Committee Taps Herrick Feinstein as Counsel --------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of ALC Holdings LLC, et al., asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain Herrick, Feinstein LLP as its counsel. Herrick, will, among other things: (a) assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and of the operation of the Debtors' businesses; (b) assist the Committee in its analysis of and negotiations with, the Debtors or any third party concerning matters related to, among other things, the assumption or rejection of certain leases of non-residential real property and executory contracts, asset dispositions, financing or other transactions and the terms of one or more plans of reorganization or liquidation for the Debtors and accompanying disclosure statements and related plan documents; and (c) assist and advise the Committee as to its communications to the general creditor body regarding significant matters in the chapter 11 cases. Stephen B. Selbst, a member of Herrick, tells the Court that the firm has agreed to provide a 15% discount off its regular hourly rates. The hourly rates charged by Herrick for professionals and paraprofessionals employed in its offices are: Partners and Counsel $475 - $950 Associates $275 - $590 Paraprofessionals $175 - $350 The names, positions and hourly rates of the Herrick attorneys expected to have primary responsibility for providing services to the Committee are: Mr. Selbst $860 Frederick E. Schmidt, Jr. $590 Mr. Selbst assures the Court that Herrick is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Committee set a Feb. 14 2012 hearing at 9:30 a.m. on the proposed retention. About ALC Holdings Farmington Hills, Michigan-based ALC Holdings LLC dba American Laser Centers, and American Laser Skincare, provides laser hair removal treatments. The Company and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13853) on Dec. 8, 2011. Bankruptcy Judge Mary F. Walrath handles the case. Landis Rath & Cobb LLP represents the Debtors in their restructuring efforts. BMC Group Inc. serves as claims agent; SSG Capital Advisors, LLC serves as financial advisors; and Traverse, LLC serves as restructuring crisis manager. MBC Consulting and Melanie B. Cox serve as interim chief executive officer. Qorval and Eric Glassman serve as restructuring consultant. As of Oct. 31, 2011, the Debtors disclosed total assets of $80.4 million and total liabilities including $40.3 million owing on a first-lien debt, $51 million in subordinated notes, and $17.9 million is owing to trade suppliers. American Laser Centers of California LLC disclosed $20,988,454 in assets and $99,951,866 in liabilities as of the Chapter 11 filing. ALC Holdings LLC disclosed $14,662 in assets and $93,744,094 in liabilities. The petitions were signed by Andrew Orr, chief financial officer & VP corporate operations. Herrick, Feinstein LLP represents the Official Committee of Unsecured Creditors. The Committee tapped Ashby & Geddes, P.A., as Delaware Counsel and J.H. Cohn LLP as its financial advisor. Herrick can be reached at: Stephen B. Selbst, Esq. Frederick E. Schmidt, Jr., Esq. Justin B. Singer, Esq. HERRICK, FEINSTEIN LLP 2 Park Avenue New York, NY 10016 Tel: (212) 592-1400 Fax: (212) 592-1500 ALC HOLDINGS: Committee Proposes J.H. Cohn as Financial Advisor --------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of ALC Holdings LLC, et al., asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain J.H. Cohn LLP, as its financial advisor effective as of Dec. 28, 2011. J.H. Cohn will, among other things: (a) scrutinize the proposed sale transactions, including the assumption or rejection of executory contracts; (b) develop and evaluate alternative sale and restructuring strategies; and (c) review reasonableness of the DIP facility terms including the likelihood that Debtors will be able to comply with the terms of the order. Clifford A. Zucker, partner of J.H. Cohn, tells the Court that the firm's billing rates for the accounting and financial advisory services of the nature to be rendered to the Committee are: Partners/Senior Partners $550 - $720 Director/Senior Manager/Mgr. $460 - $550 Other Professional Staff $185 - $360 Paraprofessional $155 - $175 Mr. Zucker assures the Court that to the best of his knowledge, information and belief, JH Cohn does not have or represent any interest materially adverse to the interest of the Debtors, or of any class of creditors or equity security holders of the Debtors, by reason of any direct or indirect relationship to, connection with, or interest in the Debtors. The Committee set a Feb. 14, 2012 hearing at 9:30 a.m. on the retention application. About ALC Holdings Farmington Hills, Michigan-based ALC Holdings LLC dba American Laser Centers, and American Laser Skincare, provides laser hair removal treatments. The Company and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13853) on Dec. 8, 2011. Bankruptcy Judge Mary F. Walrath handles the case. Landis Rath & Cobb LLP represents the Debtors in their restructuring efforts. BMC Group Inc. serves as claims agent; SSG Capital Advisors, LLC serves as financial advisors; and Traverse, LLC serves as restructuring crisis manager. MBC Consulting and Melanie B. Cox serve as interim chief executive officer. Qorval and Eric Glassman serve as restructuring consultant. As of Oct. 31, 2011, the Debtors disclosed total assets of $80.4 million and total liabilities including $40.3 million owing on a first-lien debt, $51 million in subordinated notes, and $17.9 million is owing to trade suppliers. American Laser Centers of California LLC disclosed $20,988,454 in assets and $99,951,866 in liabilities as of the Chapter 11 filing. ALC Holdings LLC disclosed $14,662 in assets and $93,744,094 in liabilities. The petitions were signed by Andrew Orr, chief financial officer & VP corporate operations. Herrick, Feinstein LLP represents the Official Committee of Unsecured Creditors. The Committee tapped Ashby & Geddes, P.A. as Delaware Counsel and J.H. Cohn LLP as its financial advisor. The financial advisor can be reached at: Clifford A. Zucker, CPA, CFF J.H. Cohn LLP 1212 Avenue of the Americas New York, NY 10036 Tel: (732) 635-3107 E-mail: czucker@jhcohn.com ALC HOLDINGS: Has Until July 5 to Decide on Real Property Leases ---------------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware extended until July 5, 2012, ALC Holdings LLC's deadline to assume or reject the unexpired leases of nonresidential real property. The Debtors' assumption/rejection period will expire on April 6, absent an extension. The Debtors need additional time to determine which lease to assume or to reject. They say that the determination must be made contemporaneously with the analysis and implementation of a comprehensive post-sale business plan, which will take significant time and diligence to finalize. About ALC Holdings Farmington Hills, Michigan-based ALC Holdings LLC dba American Laser Centers, and American Laser Skincare, provides laser hair removal treatments. The Company and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13853) on Dec. 8, 2011. Bankruptcy Judge Mary F. Walrath presides over the case. Landis Rath & Cobb LLP represents the Debtors in their restructuring efforts. BMC Group Inc. serves as claims agent; SSG Capital Advisors, LLC serves as financial advisors; and Traverse, LLC serves as restructuring crisis manager. MBC Consulting and Melanie B. Cox serve as interim chief executive officer. Qorval and Eric Glassman serve as restructuring consultant. As of Oct. 31, 2011, the Debtors disclosed total assets of $80.4 million and total liabilities including $40.3 million owing on a first-lien debt, $51 million in subordinated notes, and $17.9 million is owing to trade suppliers. American Laser Centers of California LLC disclosed $20,988,454 in assets and $99,951,866 in liabilities as of the Chapter 11 filing. ALC Holdings LLC disclosed $14,662 in assets and $93,744,094 in liabilities. The petitions were signed by Andrew Orr, chief financial officer & VP corporate operations. Herrick, Feinstein LLP represents the Official Committee of Unsecured Creditors. The Committee tapped Ashby & Geddes, P.A. as Delaware Counsel and J.H. Cohn LLP as its financial advisor. ALC HOLDINGS: Panel Taps Ashby & Geddes as Delaware Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of ALC Holdings LLC, et al., asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain Ashby & Geddes, P.A. as its Delaware counsel. Ashby & Geddes will, among other things: a. provide legal advice regarding the rules and practices of the Court applicable to the Committee's powers and duties as an official committee appointed under section 1102 of the Bankruptcy Code; b. provide legal advice regarding any sale of the Debtors' assets pursuant to Section 363 of the Bankruptcy Code or otherwise; and c. provide legal advice regarding any disclosure statement and plan filed in these cases and with respect to the process for approving or disapproving a disclosure statement and confirming or denying confirmation of a plan. William P. Bowden, a member of Ashby & Geddes, tells the Court that the hourly rates of Ashby & Geddes's personnel are: Professional Hourly Rate ------------ ----------- William P. Bowden, member $640 Amanda M. Winfree, associate $400 Leigh-Anne M. Raport, associate $315 Cathie B. McCloskey, paralegal $185 Mr. Bowden, adds that the rates are adjusted on an annual basis and reflect an adjustment made effective Jan. 1, 2012. For work performed between Dec. 28, 2011 and Dec. 31, 2011, the standard hourly rates of these attorneys and paralegals, are: Professional Hourly Rate ------------ ----------- William P. Bowden, member $620 Amanda M. Winfree, associate $375 Leigh-Anne M. Raport, associate $290 Cathie B. McCloskey, paralegal $185 Mr. Bowden assures the Court that Ashby & Geddes is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Committee set a Feb. 14, hearing at 9:30a.m., on its motion to retain Ashby & Geddes. About ALC Holdings Farmington Hills, Michigan-based ALC Holdings LLC dba American Laser Centers, and American Laser Skincare, provides laser hair removal treatments. The Company and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13853) on Dec. 8, 2011. Bankruptcy Judge Mary F. Walrath presides over the case. Landis Rath & Cobb LLP represents the Debtors in their restructuring efforts. BMC Group Inc. serves as claims agent; SSG Capital Advisors, LLC serves as financial advisors; and Traverse, LLC serves as restructuring crisis manager. MBC Consulting and Melanie B. Cox serve as interim chief executive officer. Qorval and Eric Glassman serve as restructuring consultant. As of Oct. 31, 2011, the Debtors disclosed total assets of $80.4 million and total liabilities including $40.3 million owing on a first-lien debt, $51 million in subordinated notes, and $17.9 million is owing to trade suppliers. American Laser Centers of California LLC disclosed $20,988,454 in assets and $99,951,866 in liabilities as of the Chapter 11 filing. ALC Holdings LLC disclosed $14,662 in assets and $93,744,094 in liabilities. The petitions were signed by Andrew Orr, chief financial officer & VP corporate operations. Herrick, Feinstein LLP represents the Official Committee of Unsecured Creditors. The Committee tapped Ashby & Geddes, P.A. as Delaware Counsel and J.H. Cohn LLP as its financial advisor. Ashby & Geddes can be reached at: William P. Bowden, Esq. Amanda M. Winfree, Esq. Leigh-Anne M. Raport, Esq. ASHBY & GEDDES, P.A. 500 Delaware A venue, 8th Floor P.O. Box 1150 Wilmington, DE 19899 Tel: (302) 654-1888 Fax: (302) 654-2067 E-mail: wbowden@ashby-geddes.com awinfree@ashby-geddes.com LRaport@ashby-geddes.com ALROSE KING: DCI Asks for Dismissal or Conversion of Case --------------------------------------------------------- DCI Communications, Inc., a creditor owed $150,000 under certain prepetition contracts, has joined in the motion of the U.S. Trustee to dismiss the Chapter 11 petition of Alrose King David LLC, or in the alternative, convert it to one under Chapter 7. Joseph T. Adragna, Esq., counsel to DCI, submits that dismissal is in the best interests of all creditors. Mr. Adragna explains that removal of the automatic stay will result in immediate reinstatement of the New York State Supreme Court mechanic's lien judgment which orders foreclosure of the Debtor's property. In that action, a receiver and referee to conduct the sale have previously been appointed and the receiver, Anthony J. Cincotta, has filed his oath of office and a bond for the faithful performance of his duties. The receiver, according to DCI, is authorized to remove the tenant, Alrose Allegria, LLC, who has neither paid rent to the Debtor or satisfied the obligations of its triple net lease. DCI says that if Allegria is removed, the property will fetch its highest dollar value at foreclosure. It also believes that the purchaser at foreclosure will strike a deal with Brooklyn Federal Savings Bank (BFSB) on more favorable terms than the current proposed agreement between BFSB and the Debtor. Early in the case, DCI filed requests for the receiver to take over and then for an appointment of a Chapter 11 trustee. DCI Communications is represented by: Joseph T. Adragna, Esq. 58 East Main Street Huntington, New York 11743 (631) 271-0030 About Alrose King Alrose King David LLC is a special entity established by the Alrose Group to own the 143-room, beachfront hotel property called the Allegria Hotel & Spa in Long Beach, Long Island. Alrose King David filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 11-75361) in Brooklyn on July 28, 2011. Judge Dorothy Eisenberg presides over the case. Patrick T. Collins, Esq., at Farrell Fritz, P.C., serves as bankruptcy counsel. The petition was signed by Allen Rosenberg, managing member. In its schedules, the Debtor disclosed $25,000,000 in assets and $38,616,617 in liabilities as of the Petition Date. The Official Consolidated Committee of Unsecured Creditors has tapped Lamonica Herbst & Maniscalso LLP as attorneys. ALROSE KING: Reaches Deal With BFSB; Owners to Retain Control ------------------------------------------------------------- Alrose King David LLC filed its First Amended Plan of Reorganization an explanatory Disclosure Statement on Jan. 30, 2012. The Debtor engaged in extensive discussions and negotiations with Brooklyn Federal Savings Bank (BFSB) and has explored a variety of potential restructuring alternatives. The discussions and negotiations have ultimately resulted in a manner of treatment of BFSB's claims. BFSB, the prepetition secured lender in this case, will have an allowed claim amount of $38,212,801 that is not subject to avoidance, set-off, subordination, any defenses, counterclaims, or any other reduction of any kind, under the Plan. The Plan calls for the BFSB Secured Claim to be treated through: (1) an amended, restated and consolidated note in the principal amount of $24,000,000 and an amended, restated and consolidated mortgage, both of which are to be executed and delivered by the debtor or the reorganized Debtor's, as applicable, to BFSB; and (2) a deficiency claim in favor of BFSB in the allowed amount of $14,212,801. Estimated recovery by BFSB is 100% Estimated recovery by general unsecured creditors is 13% to 22%. Unsecured creditors who are insiders will receive no distribution until all other general unsecured claimants have received their full distribution. Distributions to general unsecured creditors a distribution fund. Funds to be contributed to the GUC Distribution Fund pursuant the Plan will not exceed the lesser of (1) $1,200,000 and (2) the amount necessary to pay, in the aggregate, (x) 100% of the allowed general unsecured claims, (y) 100% of the allowed professional fee claims of the Official Committee of Unsecured Creditors, and (z) 100% of the reasonable fees and expenses incurred by the plan administrator who will be appointed by the Reorganized Debtor and who will have the responsibility of implementing the Plan. The Debtor may, in its sole discretion, increase the maximum aggregate funds contributed to the GUC Distribution Fund by an amount not to exceed $800,000. BFSB will waive its entitlement, on account of the BFSB Deficiency Claim, to its Pro Rata share in the proceeds of the GUC Distribution Fund. But BFSB would not waived its right to vote to accept or reject the Plan as a Holder of an allowed general unsecured claim. Holders of membership interests will retain their ownership of the Debtor in consideration for their contributions to the Plan, including payment of the real property tax claims and the funds in the amount of $2,400,000 to be paid on the closing date to BFSB. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/ALROSE_KING_ds.pdf About Alrose King Alrose King David LLC is a special entity established by the Alrose Group to own the 143-room, beachfront hotel property called the Allegria Hotel & Spa in Long Beach, Long Island. Alrose King David filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 11-75361) in Brooklyn on July 28, 2011. Judge Dorothy Eisenberg presides over the case. Patrick T. Collins, Esq., at Farrell Fritz, P.C., serves as bankruptcy counsel. The petition was signed by Allen Rosenberg, managing member. In its schedules, the Debtor disclosed $25,000,000 in assets and $38,616,617 in liabilities as of the Petition Date. The Official Consolidated Committee of Unsecured Creditors has tapped Lamonica Herbst & Maniscalso LLP as attorneys. ALROSE KING: Seeks Approval of Plan Support Agreement ----------------------------------------------------- Alrose King David LLC asks the Bankruptcy Court for authorization to enter into a Plan Support Agreement, dated as of Jan. 23, 2012, by and among the Debtor, Allen Rosenberg, Sol Green and Investors Bank, as successor by merger to Brooklyn Federal Savings Bank, N.A. (BFSB). The key terms of the Plan Support Agreement are: A. The Debtor agrees to include a class of creditors in the Plan specific to the real property tax claims. With respect to the treatment of real property tax claims, the Debtor entered into an Escrow Agreement with Rosenberg and BFSB dated Jan. 3, 2012, pursuant to which $911,120, as of Dec. 31, 2011, for the payment of accrued and unpaid real property taxes was escrowed with counsel to BFSBA. The Plan will provide that on the Effective Date each holder of an Allowed Real Property Tax Claim will be entitled to receive from the Debtor on account of the claim, cash payments from the escrow account in an amount equal to the allowed real property tax claim. B. The Debtor agrees to include a class of creditors in the plan specific to the general unsecured claims. The plan will provide that each holder of an allowed general unsecured claim will receive its pro rata share of an aggregate of the GUC Distribution Fund, net of the payments made from the fund for professional fees, which will be distributed to holders of allowed general unsecured claims within 24 months of the Effective Date. C. On the Closing Date, the Debtor will execute and deliver those instruments and documents requiring the Debtor's signature. D. The Debtor will obtain and deliver to lender a certificate of occupancy for the Property within six months of the closing date, evidencing all improvements on the property for the use of a hotel as said improvements are constructed and existing. E. The Debtor will pay all amounts due with respect to real estate taxes, insurance and water charges by deposit into a designated escrow account with BFSB and thereafter, on a monthly basis, 1/12 of all real estate taxes, insurance and water charges will be deposited in escrow with Lender, pursuant to an escrow agreement in form and substance satisfactory to Lender and Debtor. f. The Debtor will cause Alrose Allegria LLC to execute a termination of lease and, if required, organizational documents as a bankruptcy remote entity. G. Rosenberg and Green will (a) execute and deliver to the Lender amended and restated personal guarantees of the Debtor's obligations under the Restructure Closing Documents on or before the Closing Date, and (b) provide their detailed individual personal financial statements as of Dec. 31, 2011 to the lender, no later than Jan. 31, 2012, or later as agreed to by BFSB. About Alrose King Alrose King David LLC is a special entity established by the Alrose Group to own the 143-room, beachfront hotel property called the Allegria Hotel & Spa in Long Beach, Long Island. Alrose King David filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 11-75361) in Brooklyn on July 28, 2011. Judge Dorothy Eisenberg presides over the case. Patrick T. Collins, Esq., at Farrell Fritz, P.C., serves as bankruptcy counsel. The petition was signed by Allen Rosenberg, managing member. In its schedules, the Debtor disclosed $25,000,000 in assets and $38,616,617 in liabilities as of the Petition Date. The Official Consolidated Committee of Unsecured Creditors has tapped Lamonica Herbst & Maniscalso LLP as attorneys. ALLTRUST REALTY: To Pay $3,750 to PBS as Adequate Protection ------------------------------------------------------------ Bankruptcy Judge David E. Rice signed off Stipulation and Consent Order between PSB Credit Services Inc. and AllTrust Realty, LLC, regarding AllTrust's use of cash collateral and grant of adequate protection to PSB. The parties agree that, effective Dec. 1, 2011, the Adequate Protection Payments will be $3,750. The Stipulation also appends a cash collateral budget. A copy of the Stipulation dated Feb. 9, 2012, is available at http://is.gd/i9PdYnfrom Leagle.com. Alltrust Realty, LLC, in Towson, Maryland, filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 11-29919) on Oct. 5, 2011. Curtis C. Coon, Esq., at Coon & Cole, LLC, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and debts. The petition was signed by Richard Klemkowski, authorized member. ANGEL MARTINEZ: Court Keeps Case Dismissal Ruling ------------------------------------------------- Bankruptcy Judge Edward A. Godoy denied the request of Angel Luis Colon Martinez for a stay of the order dismissing his Chapter 11 case pending his appeal. The Court determined at a Nov. 22, 2011 hearing that the debtor failed to comply with the Aug. 30, 2011 order to file a disclosure statement and plan by Oct. 3, 2011, and the Nov. 3, 2011 order to show cause, and that the disclosure statement and plan filed Nov. 21, 2011 were so facially defective as to fail to satisfy the minimum requirements of the Bankruptcy Code. Judge Godoy said the Debtor has failed to establish that there is likelihood of success on the merits of the appeal. The judge added that it is unlikely that the Debtor will be able to establish an abuse of discretion by the bankruptcy court in dismissing the case. A copy of the Court's Feb. 2, 2012 Opinion and Order is available at http://is.gd/CjLBuAfrom Leagle.com. Angel Luis Colon Martinez, a retired physician who owns various real estate properties in Santurce, Hato Rey, Guanica and Caguas, filed a pro se voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D. P.R. Case No. 10-09746) on Oct. 18, 2010, listing under $1 million in both assets and debts. Allied Management Group, Inc., was the Debtor's largest secured creditor, whose collateral covers three out of the Debtor's four real estate properties. In July 2011, Allied failed in its bid to convert the Chapter 11 case to one under Chapter 7. AQUILEX HOLDINGS: S&P Withdraws 'D' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on energy industry maintenance services provider Aquilex Holdings LLC at the issuer's request. "On Dec. 16, 2011, we lowered our corporate credit rating on Aquilex to 'D' upon notification that the company failed to pay the semiannual interest due on its senior unsecured notes," S&P said. ARRAY BIOPHARMA: Posts $3.8-Mil. Net Loss in Dec. 31 Quarter ------------------------------------------------------------ Array BioPharma Inc. filed its quarterly report on Form 10-Q, reporting a net loss of $3.8 million on $23.2 million of revenues for the three months ended Dec. 31, 2011, compared with a net loss of $12.4 million on $16.5 million of revenues for the three months ended Dec. 31, 2010. For the six months ended Dec. 31, 2011, the Company has reported a net loss of $7.4 million on $45.4 million of revenues as compared to a net loss of $23.1 million on $35.0 million of revenues for the six months ended Dec. 31, 2011. As reported by the TCR on Aug. 24, 2011, Array BioPharma had a net loss of $56.3 million on $71.9 million of revenue for the fiscal year ended June 30, 2011, compared with a net loss of $77.6 million on $53.9 million of revenue for fiscal 2010. The Company's balance sheet at Dec. 31, 2011, showed $82.1 million in total assets, $220.2 million in total liabilities, and a stockholders' deficit of $127.2 million. The Company has incurred significant operating and net losses and negative cash flows from operations since inception. As of Dec. 31, 2011, the Company had an accumulated deficit of $554.5 million. It had a net loss of $3.8 million for the quarter and $7.4 million for the six months ended Dec. 31, 2011. The Company had net losses of $56.3 million, $77.6 million, and $127.8 million, for the fiscal years ended June 30, 2011, 2010, and 2009, respectively. "We expect to incur additional losses and negative cash flows in the future, and these losses may continue or increase in part due to anticipated levels of expenses for research and development, particularly clinical development, expansion of our clinical and scientific capabilities, and acquisitions of complementary technologies or in-licensed drug candidates. As a result, we may not be able to achieve or maintain profitability," the Company said in the filing. A copy of the Form 10-Q is available for free at: http://is.gd/WgYlzD About Array BioPharma Boulder, Colo.-based Array BioPharma Inc. (NASDAQ: ARRY) -- http://www.arraybiopharma.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small-molecule drugs to treat patients afflicted with cancer and inflammatory diseases. AVANTAIR INC: Incurs $872,000 Net Loss in Fiscal Q2 2012 -------------------------------------------------------- Avantair, Inc., reported a net loss of $872,259 on $38.37 million of total revenue for the three months ended Dec. 31, 2011, compared with a net loss of $4.06 million on $36.58 million of total revenue for the same period during the prior year. The Company reported a net loss of $2.57 million on $76.58 million of net revenue for the six months ended Dec. 31, 2011, compared with a net loss of $8.88 million on $72.36 million of total revenue for the same period a year ago. The Company's balance sheet at Dec. 31, 2011, showed $108.22 million in total assets, $140.46 million in total liabilities, $14.75 million in series A convertible preferred stock, and a $46.98 million total stockholders' deficit. Steven Santo, Chief Executive Officer of Avantair said, "We are pleased with our second quarter revenue growth and improved operating performance in light of a difficult new fractional share sales environment. The planned improvements, efficiencies and back office cost reductions positively impacted our quarter-over- quarter results. As we have consistently communicated, our focus remains on providing our owners with unparalleled service, while safety remains our number one priority." A full-text copy of the press release is available for free at: http://is.gd/KTD0wh About Avantair Inc. Headquartered in Clearwater, Fla., Avantair, Inc. (OTC BB: AAIR) -- http://www.avantair.com/-- sells fractional ownership interests in, and flight hour card usage of, professionally piloted aircraft for personal and business use, and the management of its aircraft fleet. According to AvData, Avantair is the fifth largest company in the North American fractional aircraft industry. Avantair also operates fixed flight based operations (FBO) in Camarillo, California and in Caldwell, New Jersey. Through these FBOs and its headquarters in Clearwater, Florida, Avantair provides aircraft maintenance, concierge and other services to its customers as well as to the Avantair fleet. BAKERS FOOTWEAR: Reports $53.6 Million Net Sales in Fiscal Q4 ------------------------------------------------------------- For the thirteen weeks ended Jan. 28, 2012, Bakers Footwear Group, Inc.'s fourth fiscal quarter, net sales were $53.6 million, decreasing 8.0% from $58.2 million for the thirteen-weeks ended Jan. 29, 2011. Comparable store sales for the fourth quarter of fiscal 2011 decreased 7.1%, compared to a comparable store sales increase of 2.6% for the fourth quarter of fiscal 2010. For the fifty-two weeks ended Jan. 28, 2012, the Company's fiscal year 2011, net sales were $185.1 million, a decrease of 0.3% from $185.6 million in the fifty-two weeks ended Jan. 29, 2011. Comparable store sales for fiscal year 2011 increased 1.3%, compared to a comparable store sales increase of 1.7% for fiscal year 2010. About Bakers Footwear St. Louis, Mo.-based Bakers Footwear Group, Inc. (OTC BB: BKRS.OB) is a national, mall-based, specialty retailer of distinctive footwear and accessories for young women. The Company's merchandise includes private label and national brand dress, casual and sport shoes, boots, sandals and accessories. The Company currently operates 231 stores nationwide. Bakers' stores focus on women between the ages of 16 and 35. Wild Pair stores offer fashion-forward footwear to both women and men between the ages of 17 and 29. The Company reported a net loss of $9.29 million on $185.62 million of net sales for the fiscal year ended Jan. 29, 2011, compared with a net loss of $9.08 million on $185.36 million of net sales for the year ended Jan. 30, 2010. The Company reported a net loss of $14.33 million on $131.51 million of net sales for the 39 weeks ended Oct. 29, 2011, compared with a net loss of $14.46 million on $127.39 million of net sales for the 13 weeks ended Oct. 30, 2010. The Company's balance sheet at Oct. 29, 2011, showed $47.12 million in total assets, $67.16 million in total liabilities and a $20.04 million total shareholders' deficit. As reported by the TCR on May 6, 2011, Ernst & Young LLP, in St. Louis, Mo., expressed substantial doubt about Bakers Footwear's ability to continue as a going concern. The independent auditors noted that the Company has incurred substantial losses from operations in recent years and has a significant working capital deficiency. Bankruptcy Warning The Company noted in the Form 10-K that its ability to maintain and ultimately improve its liquidity position is highly dependent on sustaining the positive sales trends that began in June 2008 and have continued through April 2011. Comparable store sales for the last three quarters of fiscal year 2008 increased 4.7% and its comparable store sales for fiscal years 2009 and 2010 increased 1.3% and 1.7%, respectively. Through the first 12 weeks of fiscal year 2011 comparable stores sales increased 10.1%. The Company noted that net losses in recent years have negatively impacted its liquidity and financial position. As of Jan. 29, 2011, it had negative working capital of $8.7 million, unused borrowing capacity under our revolving credit facility of $3.1 million, and a shareholders' deficit of $6.0 million. The Company stated, "If positive sales trends do not continue, or if we were to incur significant unplanned cash outlays, it would become necessary for us to obtain additional sources of liquidity, or take additional cost cutting measures. Any future financing would be subject to our financial results, market conditions and the consent of our lenders. We may not be able to obtain additional financing or we may only be able to obtain such financing on terms that are substantially dilutive to our current shareholders and that may further restrict our business activities. If we cannot obtain needed financing, our operations may be materially negatively impacted and we may be forced into bankruptcy or to cease operations and you could lose your investment in the Company." BARNEYS NEW YORK: S&P Lowers Corporate Credit Rating to 'CC' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered the corporate credit rating on Barneys New York to 'CC' from 'CCC'. "At the same time, we lowered the issue-level rating on the company's second-lien debt to 'C' from 'CCC-'. The recovery rating is '5'. The outlook is negative," S&P said. "The downgrade reflects the hiring of a restructuring advisor and our belief that the company is highly vulnerable to default or selective default, given significant debt maturities in September 2012," said Standard & Poor's credit analyst David Kuntz. He added, "We maintain our view that the company will need to restructure its balance sheet." "We assess the company's financial risk profile as 'highly leveraged' under our criteria because of its substantially leveraged capital structure and very thin cash flow protection measures. We do not expect a meaningful improvement over the near term. As of Oct. 31, 2011, interest coverage was 0.6x, total debt to EBITDA was 18.1x, and funds from operations to total debt was 2.3%," S&P said. "The negative outlook reflects our view that the current capital structure is unsustainable and that an eventual restructuring is a likely outcome. Furthermore, the rating is also predicated on our assessment of a weak liquidity position and substantial debt maturities in September 2012. Although we expect performance gains to continue because of improved luxury consumer spending, we do not believe that credit protection metrics will change meaningfully over the near term," S&P said. "We would lower ratings to 'D' or 'SD' if the company fails to meet near-term debt service obligations or pursues financing alternatives such as a restructuring. Given our concerns about the current capital structure and upcoming maturities, an upgrade is not a near-term consideration," S&P said. BEAR ISLAND: Hearing on Plan Confirmation Resumes Tomorrow ---------------------------------------------------------- The hearing to consider the confirmation of the Chapter 11 Plan filed by Bear Island Paper Company, L.L.C., has been continued to Feb. 14, 2012, at 2:00 p.m. As reported in the TCR on Oct. 10, 2011, Bear Island Paper Co. won bankruptcy court approval to seek votes on its amended liquidation plan. The Plan provides for the termination of the Debtor's business operations and the liquidation of its assets. Subject to the rights of certain parties in interest to object to the allowance and priority of claims, the Plan provides for the payment in full to holders of Allowed Administrative Claims and Allowed Priority Claims. The Plan further provides for a recovery to holders of Allowed General Unsecured Claims. Full-text copies of the Plan and Disclosure Statement are available for free at: http://bankrupt.com/misc/bearisland.doc958.pdf Canada-based White Birch Paper Company is the second largest newsprint producer in North America. As of Dec. 31, 2009, the White Birch Group held a 12% share of the North American newsprint market and employed roughly 1,300 individuals (the majority of which reside in Canada). Bear Island Paper Company, L.L.C., is a U.S.-based unit of White Birch. Bear Island filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No. 10-31202) on Feb. 24, 2010. At June 30, 2011, the Company had $141.9 million in total assets, $153.2 million in total liabilities, and a stockholders' deficit of $11.3 million. White Birch filed for bankruptcy protection under Canada's Companies' Creditors Arrangement Act, before the Superior Court for the Province of Quebec, Commercial Division, Judicial District of Montreal, Canada. White Birch and five other affiliates -- F.F. Soucy Limited Partnership; F.F. Soucy, Inc. & Partners, Limited Partnership; Papier Masson Ltee; Stadacona Limited Partnership; and Stadacona General Partner, Inc. -- also sought bankruptcy protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Case No. 10-31234). Jonathan L. Hauser, Esq., at Troutman Sanders LLP, in Virginia Beach, Virginia Beach, serves as counsel to White Birch in the Chapter 11 case. Richard M. Cieri, Esq., Christopher J. Marcus, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to Bear Island. Jonathan L. Hauser, Esq., at Troutman Sanders LLP, in Virginia Beach, Virginia, serve as co-counsel to Bear Island. AlixPartners LLP serves as financial and restructuring advisors to Bear Island, and Lazard Freres & Co., serves as investment banker. Garden City Group is the claims and notice agent. Jason William Harbour, Esq., at Hunton & Williams LLP, in Richmond, Virginia, represents the Official Committee of Unsecured Creditors. Chief Judge Douglas O. Tice, Jr., handles the Chapter 11 and Chapter 15 cases. Bear Island was authorized by the bankruptcy judge in November 2010 to sell the business to a group consisting of Black Diamond Capital Management LLC, Credit Suisse Group AG and Caspian Capital Advisors LLC. Bear Island's Chapter 11 plan is currently scheduled for approval at a Feb. 14, 2012 confirmation hearing. Under the plan proposed by the subsidiary of Canada's White Birch Paper Co., first- and second-lien creditors with $424.9 million and $105.1 million in claims, respectively, are expected to recover between 0.5 percent and 4 percent. Unsecured creditors with $1.4 million in claims are to receive the same dividend. BEAZER HOMES: Stockholders Elect 7 Directors at Annual Meeting -------------------------------------------------------------- Beazer Homes USA, Inc., held its 2012 annual meeting of Stockholders on Feb. 7, 2012. At the meeting, stockholders: (a) elected Laurent Alpert, Brian C. Beazer, Peter G. Leemputte, Allan P. Merrill, Norma A. Provencio, Larry T. Solari and Stephen P. Zelnak to serve as directors until the next annual meeting of stockholders or until their successors are elected and qualified; (b) ratified the appointment of Deloitte & Touche, LLP, as the Company's independent registered public accounting firm for the fiscal year ending Sept. 30, 2012; and (c) voted for, on a non-binding, advisory basis, the compensation paid to the Company's named executive officers for fiscal year 2010. About Beazer Homes Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/-- headquartered in Atlanta, is one of the country's 10 largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH." The Company's balance sheet at Dec. 31, 2011, showed $1.87 billion in total assets, $1.67 billion in total liabilities, and $200.38 million in total stockholders' equity. * * * Beazer carries (i) a 'B-' issuer credit rating, with "stable" outlook, from Standard & Poor's, (ii) 'Caa1' probability of default and long term corporate family ratings from Moody's, and (iii) 'B-' issuer default rating, with stable outlook, from Fitch Ratings. Fitch said in November 2010 that the ratings and Outlook for Beazer reflect the company's healthy liquidity position, improved capital structure as well as the challenges still facing the housing market. Fitch expects existing home sales will decline 7.5% in 2010 and increase 6% in 2011. S&P said that although Beazer's business and liquidity profiles have improved, S&P doesn't anticipate raising its ratings on the company over the next 12 months because S&P expects costs associated with the company's heavy debt load will weigh on profitability. The 'Caa1' corporate family rating, Moody's said in November 2010, reflects its expectation that Beazer has reduced costs sufficiently that it will continue to reduce losses in fiscal 2011. The impairments and other charges are likely to be less material going forward, given the company's improving gross margin performance, stabilizing pricing environment, and increasing absorptions. However, Moody's expectation is that Beazer's cash flow performance will weaken in 2011, as the benefits of inventory liquidation have largely played out. The ratings also reflect the company's extended debt maturity profile, improved Moody's- adjusted debt leverage, and increased net worth position. BERNARD L. MADOFF: Mets Asks High Court to Review 2nd Circ. Ruling ------------------------------------------------------------------ Amanda Bransford at Bankruptcy Law360 reports that the owners of the New York Mets and others asked the U.S. Supreme Court on Feb. 3 to review a lower court's decision that former customers could recover only their principal investments in Bernard Madoff's bankrupt investment company, not the fraudulent values listed on financial statements. Law360 relates that Sterling Equities Associates, a company owned by Mets owners Saul Katz and Fred Wilpon, filed a petition asking the Supreme Court to revisit the Second Circuit's affirmation of a New York bankruptcy court ruling. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) As of Feb. 8, 2012, Mr. Picard has recovered $8.7 billion for investors. A total of $325.5 million has been distributed to investors. Mr. Picard has filed 1,000 lawsuits seeking $100 billion from banks such as HSBC Holdings Plc and JPMorgan Chase & Co. The trustee has seen more than $28 billion of his claims tossed by district judges. BION ENVIRONMENTAL: Incurs $1 Million Net Loss in Dec. 31 Quarter ----------------------------------------------------------------- Bion Environmental Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $1.06 million on $0 of revenue for the three months ended Dec. 31, 2011, compared with a net loss of $3.14 million on $0 of revenue for the same period during the prior year. The Company reported a net loss of $4.89 million on $0 of revenue for the six months ended Dec. 31, 2011, compared with a net loss of $3.98 million on $0 of revenue for the same period a year ago. The Company's balance sheet at Dec. 31, 2011, showed $8.60 million in total assets, $10.01 million in total liabilities, $41,400 in Series B redeemable convertible preferred stock, and a $1.45 million total deficit. The Company has not generated revenues and has incurred net losses of approximately $6,998,000 and $2,976,000 during the years ended June 30, 2011, and 2010, respectively. At Dec. 31, 2011, the Company has a working capital deficit and a stockholders' deficit of approximately $344,000 and $1,543,000, respectively. GHP Horwath, PC, in Denver, Colorado, expressed substantial doubt about the Company's ability to continue as a going concern the fiscal 2011 financial results. The independent auditors noted that the Company has not generated revenue and has suffered recurring losses from operations. A full-text copy of the Form 10-Q is available for free at: http://is.gd/56DgfR About Bion Environmental Crestone, Colo.-based Bion Environmental Technologies, Inc. (OTC BB: BNET) -- http://biontech.com/-- has provided environmental treatment solutions to the agriculture and livestock industry since 1990. Bion's patented next-generation technology provides a unique comprehensive treatment of livestock waste that achieves substantial reductions in nitrogen and phosphorus, ammonia, greenhouse and other gases, as well as pathogens, hormones, herbicides and pesticides. BIORELIANCE CORP: S&P Withdraws 'B+' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its ratings on Rockville, Md.-based contract research organization BioReliance Corp., including the 'B+' corporate credit rating, at the company's request. On Jan. 31, 2012, BioReliance was acquired by Sigma-Aldrich. BIOZONE PHARMACEUTICALS: Daniel Fisher Resigns as Director --------------------------------------------------------- As previously reported by the TCR on Feb. 7, 2012, the Board of Directors of Biozone Pharmaceuticals, Inc., removed Daniel Fisher from the Board and from his position as the Company's Executive Vice President. The Company subsequently determined that Mr. Fisher's removal from the Board was not valid. On Feb. 3, 2012, Mr. Fisher resigned from his position as a director of the Company. About Biozone Pharmaceuticals Biozone Pharmaceuticals, Inc., formerly, International Surf Resorts, Inc., was incorporated under the laws of the State of Nevada on Dec. 4, 2006, to operate as an internet-based provider of international surf resorts, camps and guided surf tours. The Company proposed to engage in the business of vacation real estate and rentals related to its surf business and it owns the website isurfresorts.com. During late February 2011, the Company began to explore alternatives to its original business plan. On Feb. 22, 2011, the prior officers and directors resigned from their positions and the Company appointed a new President, Director, principal accounting officer and treasurer and began to pursue opportunities in medical and pharmaceutical technologies and products. On March 1, 2011, the Company changed its name to Biozone Pharmaceuticals, Inc. Since March 2011, the Company has been engaged primarily in seeking opportunities related to its intention to engage in medical and pharmaceutical businesses. On May 16, 2011, the Company acquired substantially all of the assets and assumed all of the liabilities of Aero Pharmaceuticals, Inc., pursuant to an Asset Purchase Agreement dated as of that date. Aero manufactures markets and distributes a line of dermatological products under the trade name of Baker Cummins Dermatologicals. On June 30, 2011, the Company acquired the Biozone Labs Group which operates as a developer, manufacturer, and marketer of over- the-counter drugs and preparations, cosmetics, and nutritional supplements on behalf of health care product marketing companies and national retailers. BioZone as of Oct. 29, 2011, is in default with respect to eleven senior secured convertible promissory notes issued to various accredited investors with an aggregate principal amount of $2,250,000 due to the fact that the Company has not paid the amount due on maturity. The Company's balance sheet at Sept. 30, 2011, showed $10.70 million in total assets, $10.88 million in total liabilities, and a $177,712 total shareholders' deficiency. "Our current balances of cash will not meet our working capital and capital expenditure needs for the next twelve months. In addition, as of September 30, 2011, we have a shareholder deficiency of $177,712 and negative working capital of $1,740,163. Because we are not currently generating sufficient cash to fund our operations and we have debt that is in default, we may need to rely on external financing to meet future operating, debt repayment and capital requirements. These conditions raise substantial doubt about our ability to continue as a going concern." BMB MUNAI: Hires Lakeview to Wind Down Kazakhstan Operations ------------------------------------------------------------ BMB Munai, Inc., entered into a Management and Services Agreement with Lakeview International, LLC. The Company engaged Lakeview International, LLC, to provide management, administrative and support personnel and services to the Company in furtherance of fulfilling its obligations pursuant to the Participation Interest Purchase Agreement, dated Feb. 14, 2011, by and among Palaeontol B.V., the Company, and MIE Holdings Corporation, as amended, and other activities, including the winding down of the Company's representative office in Kazakhstan. Lakeview is a company controlled by former Company director Daymon Smith. The Agreement commenced on Feb. 2, 2012, and will continue through Dec. 31, 2012, unless terminated earlier upon the written agreement of both parties. In exchange for the services under the Agreement, the Company paid $1,947,500 to Lakeview, which included anticipated out-of-pocket expenses required to perform the services through the term of the Agreement in the amount of $1,900,000 and a management fee of $47,500. The full amount was due and payable upon execution of the Agreement. The Agreement provides that in the event of early termination Lakeview will be required to return to the Company any portion of the $1,900,000 that has not been paid to cover out-of-pocket expenses as of the date the Agreement is terminated. A full-text copy of the Management Services Agreement is available for free at http://is.gd/XkEpJ6 About BMB Munai Based in Almaty, Kazakhstan, BMB Munai, Inc., is a Nevada corporation that originally incorporated in the State of Utah in 1981. Since 2003, its business activities have focused on oil and natural gas exploration and production in the Republic of Kazakhstan through its wholly-owned operating subsidiary Emir Oil LLP. Emir Oil holds an exploration contract that allows the Company to conduct exploration drilling and oil production in the Mangistau Province in the southwestern region of Kazakhstan until January 2013. The exploration territory of its contract area is approximately 850 square kilometers and is comprised of three areas, referred to herein as the ADE Block, the Southeast Block and the Northwest Block. The Company realized a loss from continuing operations of $15.1 million during fiscal year 2011 compared to $10.7 million during fiscal year 2010. This 41% increase in loss from continuing operations was primarily attributable to increased general and administrative and interest expense and the foreign exchange loss of $415,803 incurred during fiscal year 2011. The Company's balance sheet at Sept. 30, 2011, showed $88.38 million in total assets, $8.31 million in total liabilities, all current, and $80.06 million in total shareholders' equity. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, said that as a result of the pending sale of Emir Oil LLP, BMB Munai will have no continuing operations that result in positive cash flow, which raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning The Company has disclosed that if it does not complete the sale, it will not have sufficient funds to retire the restructured Senior Notes when they become due. "In this event, we would likely be required to consider liquidation alternatives, including the liquidation of our business under bankruptcy protection," the Company said. BRAINY BRANDS: Errors Found on Financial Reports ------------------------------------------------ John Benfield, chief executive officer of The Brainy Brands Company, Inc., on April 15, 2011, concluded that the Company's previously issued financial statements, for the year ended Dec. 31, 2009, should no longer be relied upon because of an error in those financial statements . The Company identified a material lease license agreement between the Company and an entity controlled by an officer of the Company. The lease license agreement provided for license payment of $0.50 per unit sold subject to a minimum monthly licensing fee of $2,750. The Company did not record the minimum monthly accrual. As a result of the error, the Company restated its financial statements for the year ended Dec. 31, 2009, as reflected in the Company's 10-K for the year ended Dec. 31, 2010, filed with the Securities and Exchange Commission on April 15, 2011. On Jan. 31, 2012, John Benfield concluded that the Company's previously issued financial statements, for the years ended Dec. 31, 2009 and 2010, and the periods ended March 31, 2011, June 30, 2011, and Sept. 30, 2011, should no longer be relied upon because of an error in those financial statements. In connection with responding to comments of the staff of the Securities and Exchange Commission, the Company engaged a valuation firm to perform a valuation on assets transferred to the Company's subsidiary, Brainy Acquisitions, Inc., by The Brainy Baby Company, LLC, on Sept. 23, 2010. The valuation firm concluded such valuation on Jan. 31, 2011. In connection with the results of such valuation, the Company determined that the value of the Company's assets as stated on the Company's financial statements for the above-noted periods should no longer be relied upon. Mr. Benfield has discussed this matter with the Company's independent accountant. About Brainy Brands Suwanee, Ga.-based The Brainy Brands Company, Inc., through its operating subsidiary, engages in the business of selling educational DVDs, books, games, and toys for babies, toddlers and pre-schoolers both domestically and internationally through retailers under licensing agreements, as well as directly to customers primarily via internet sales. The Company reported a net loss of $20.05 million on $530,603 of total revenues for the nine months ended Sept. 30, 2011, compared with net income of $1.68 million on $341,295 of total revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $1.60 million in total assets, $18.54 million in total liabilities, and a $16.93 million total shareholders' deficit. Habif, Arogeti & Wynne, LLP, in Atlanta, Ga., expressed substantial doubt about The Brainy Brands' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has incurred significant operating losses and has a net capital deficiency. BRAYTON INVESTMENT: Wikas Granted $265,737 Secured Claim -------------------------------------------------------- Bankruptcy Judge Herb Ross allowed the Wikas a $265,737 secured claim against the Chapter 7 estate of Brayton Investment LLC (Bankr. D. Alaska Case No. 10-00515) on account of the Wikas' Secured Proof of Claim no. 1. The Wikas were previously allowed $204,610. Judge Ross granted the Wikas an additional $8,359 for the Jim McCollum fees, and $51,340 for attorney fees and $1,427 for costs pursuant to a Feb. 6 memorandum decision available at http://is.gd/FW3Un9from Leagle.com. BUTLER INT'L: Twin City Insurance Off The Hook for Coverage ----------------------------------------------------------- Juan Carlos Rodriguez at Bankruptcy Law360 reports that U.S. District Judge Elaine E. Bucklo ruled Feb. 8 that Twin City Fire Insurance Co. has no duty to insure McBreen & Kopko LLP for breach of fiduciary claims arising from the bankruptcy of Butler International Inc. The fiduciary duty claim in the underlying lawsuit is not based on a wrongful act as that phrase is defined in the law firm's insurance policy, Judge Bucklo said in an order granting summary judgment to Twin City, Law360 relates. About Butler International Based in Ft. Lauderdale, Florida, Butler International, Inc. (PINKSHEETS: BUTL) -- http://www.butler.com/-- provides Engineering and Technical Outsourcing services. During its 62- year history of providing services, Butler International has served clients in the aircraft/aerospace, federal/defense, communications, consumer and manufacturing and commercial sectors. The Company and its affiliates, including Butler Services International Inc., filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 09-11914) on June 1, 2009. Charlene D. Davis, Esq., at Bayard, P.A., serves as counsel to the Debtor. The Company estimated up to $100 million in assets and debts as of the Chapter 11 filing. CAESARS ENTERTAINMENT: Publicly Lists Shares on Nasdaq Global ------------------------------------------------------------- Caesars Entertainment Corporation's common stock was approved for listing on the Nasdaq Global Select Market under the symbol "CZR" and its offering of 1,811,313 shares of its common stock was priced at $9.00. Gross proceeds from this offering will be approximately $16 million before deducting the underwriting discounts and commissions and expenses. Caesars also granted to the underwriters a 30-day option to purchase up to 271,697 additional shares of its common stock at the initial price less underwriting discounts and commissions. In addition to the shares to be sold by Caesars in this offering, shares held by certain existing investors representing approximately 27.8 percent of the Company's issued and outstanding capital stock have also been registered for resale, of which approximately 18.8 percent are now freely tradable, with the remainder becoming freely tradable 180 days after completion of the offering. Credit Suisse and Citigroup are acting as joint book-running managers and representatives for the offering, BofA Merrill Lynch and Deutsche Bank Securities are acting as joint book-running managers for the offering and KeyBanc Capital Markets, Lebenthal & Co., LLC, and Ramirez & Co., Inc., are acting as co-managers for the offering. The offering will be made only by means of a prospectus. Copies of the prospectus related to the offering may be obtained, when available, from: Credit Suisse, Attention: Prospectus Department, One Madison Avenue, New York, New York, 10010, or by telephone at 1-800-221-1037, or by email at newyork.prospectus@credit-suisse.com; or Citigroup, Attention: Prospectus Department, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, New York 11220, or by telephone at 800 831- 9146 , or by email at batprospectusdept@citi.com. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. A copy of the registration statement can be accessed through the SEC's Web site. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. The Company also reported a net loss of $471.30 million on $6.66 billion of net revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $629.30 million on $6.69 billion of net revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $28.86 billion in total assets, $27.62 billion in total liabilities, $36 million in redeemable non-controlling interests, and $1.20 billion total stockholders' equity. * * * Harrah's announced its re-branding to Caesar's on mid-November 2010. Harrah's carries 'Caa3' long term corporate family and probability of default ratings, with 'positive' outlook, from Moody's Investors Service. It has a 'B-' issuer credit rating, with 'stable' outlook, from Standard & Poor's. "The 'B-' corporate credit rating reflects Caesars' very weak credit measures and our belief that prospects for a meaningful rebound in net revenues and EBITDA in 2011 do not seem promising given the current economic outlook," said Standard & Poor's credit analyst Ben Bubeck in May 2011. "While several actions taken by management have positioned the company with a moderate covenant cushion and very limited debt maturities over the next few years, Caesars' capacity to continue to fund operational and capital spending needs and meet debt service obligations relies on meaningful growth in cash flow generation over the next few years." As reported by the TCR on March 3, 2011, Moody's Investors Service upgraded Caesars Entertainment's Corporate Family ratings and Probability of Default ratings to Caa2. CET's Caa2 Corporate Family Ratings reflect very high leverage, weak interest coverage, the company's debt financed growth strategy, and Moody's view that the company's current capital structure in unsustainable in the long-term. The ratings reflect Moody's expectation that gaming demand will rebound very slowly over the next several years. However, in the absence of a material de-leveraging transaction, Moody's do not expect the company's capital structure to improve materially over the next few years. Additionally, given CEC's weak credit profile, there is a possibility that the company could again pursue transactions that will result in impairment of debt holder claims as a means to improve its capital structure. CARBON ENERGY: Court OKs Kolesar & Leatham as General Counsel ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada authorized Carbon Energy Holdings Inc. and Carbon Energy Reserve Inc. to employ Kolesar & Leatham Chtd. as their general counsel. The firm will: (a) prepare schedules, statements, applications, and reports for which the services of an attorney is necessary; (b) advise the Debtors of their rights and obligations and their performance of their duties during the administration of the Chapter 11 cases; (c) assist the Debtors in formulating a plan of reorganization and disclosure statements and to obtain approval and confirmation thereof; and (d) represent the Debtors in all proceedings before the Court and other courts with jurisdiction over this case. The Debtors will pay the firm's attorneys at $450 per hour and $175 per hour for paraprofessional services. About Carbon Energy Holdings Based in Wickenburg, Arizona, Carbon Energy Holdings LLC and Carbon Energy Reserve Inc. filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case Nos. 11-52099 and 11-52101) on June 28, 2011. Judge Bruce T. Beesley presides over the cases. Carbon Energy Holdings Inc. disclosed $0 in assets and $146,270 in liabilities in its schedules filed in court. Carbon Energy Reserve Inc. scheduled $40,000,000 in assets and $2,009,573 in liabilities. Kolesar & Leatham Chtd. acts as the Debtors' general counsel. CARDICA INC: Posts $3.2-Mil. Net Loss in Dec. 31 Quarter -------------------------------------------------------- Cardica, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $3.2 million on $912,000 of revenues for the three months ended Dec. 31, 2011, compared with a net loss of $3.3 million on $1.2 million of revenues for the three months ended Dec. 31, 2010. For the six months ended Dec. 31, 2011, the Company has reported a net loss of $6.2 million on $1.8 million of revenues as compared to net income of $2.9 million on $11.2 million of revenues for the six months ended Dec. 31, 2010. The Company's balance sheet at Dec. 30, 2011, showed $11.1 million in total assets, $7.1 million in total liabilities, and stockholders' equity of $4.0 million. As reported in the TCR on Sept. 27, 2011, Ernst & Young LLP, in Redwood City, Calif., expressed substantial doubt about Cardica's ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2011. The independent auditors noted that the Company has incurred cumulative net losses of $123.8 million through June 30, 2011, and negative cash flows from operating activities and expects to incur losses for the next several years. A complete text of the Form 10-Q is available for free at: http://is.gd/SdBteT Redwood City, Calif.-based Cardica, Inc. (Nasdaq: CRDC) -- http://www.cardica.com/-- designs and manufactures proprietary stapling and anastomotic devices for cardiac and endoscopic surgical procedures. Cardica's technology portfolio is intended to minimize operating time and enable minimally-invasive and robot-assisted surgeries. CATALYST PAPER: TSE to Delist Shares on March 8 ----------------------------------------------- The Canadian Press reports that the Toronto Stock Exchange said it has decided to delist Catalyst Paper Corp., ending trading of its shares on the senior stock exchange. According to the news agency, the exchange operator said Feb. 8 it will remove Catalyst from listings at the close of trading on March 8 "for failure to meet the continued listing requirements." The TSX already suspended trading of its shares at the beginning of the month, the report relays. Catalyst Paper Corp. -- 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. Catalyst Paper in January 2012 applied for and received an initial court order under the Canada Business Corporations Act (CBCA) to commence a consensual restructuring process with its noteholders. Affiliate Catalyst Paper Holdings Inc., sought creditor protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 12-10219) on Jan. 17, 2012. The company is seeking recognition of these proceedings with the Delaware Court in order for the Canadian order under the CBCA to be recognized in the United States. The company will continue to operate and satisfy its obligations to trade creditors, customers, employees and retirees in the ordinary course of business during this restructuring process. Catalyst on Dec. 15, 2011, deferred a 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 was reviewing alternatives to address its capital structures and it is currently in discussions with noteholders. Perella Weinberg Partners served as the financial advisor. In early January 2012, Catalyst said it had entered into a restructuring agreement, which will see its bondholders taking control of the company and includes an exchange of debt for equity. The agreement said it would slash the company's debt by C$315.4 million ($311 million) and reduce its cash interest expenses. Catalyst also said it will continue to "operate and satisfy" its obligations to customers, trade creditors, employees and retirees in the ordinary course of business during the restructuring process. Catalyst Paper joins a line of paper producers that have succumbed to higher costs, increased competition from Asia and Europe, and falling demand as more advertisers and readers move online. Last year, Cerberus Capital-backed NewPage Corp. filed for bankruptcy protection, followed by SP Newsprint Co., owned by newsprint magnate and fine art collector Peter Brant. In December, Wausau Paper said it will close its Brokaw mill in Wisconsin, cut 450 jobs and exit its print and color business. CENTRAL BUILDING: Wants Plan Filing Deadline Extended to March 1 ---------------------------------------------------------------- Central Building, LLC, and Crow Partners, LLC, ask the U.S. Bankruptcy Curt for the District of Arizona to extend their exclusive period to file a Plan of Reorganization through March 1, 2012, and their exclusive period to confirm that Plan through May 1, 2012. The Debtors want a brief extension to permit documenting and processing of a settlement with JP Morgan Chase Bank, N.A. Once that process is completed, the Debtors expect to reach a consensual resolution with remaining creditors. The Debtors tell the Court that they are complying with the cash collateral orders entered in the case which have been approved by the secured creditors through March, and are current in making monthly payments to the secured creditors on both shopping centers. About Central Building Orinda, California-based Central Building LLC filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 11-27970) on Oct. 3, 2011. Its wholly owned subsidiary, Crow Partners LLC, filed a separate petition (Bankr. D. Ariz. Case No. 11-27946), listing under $1 million in assets and debts. The case is jointly administered with Crow Partners. Central Building does business in Arizona under the name Central Building Camelback LLC. The Debtors own the County Square Shopping Center in California and the Camelback Place at Dysart in Arizona. The Debtors' sole members are Neal Smither and his spouse, Patricia Smither. The equity interests are subject to a Voting Trust Agreement of which G. Neil Elsey, a principal of Avion Holdings, LLC, is the voting trustee. Avion has also been retained as Restructuring Agent to manage and operate the Debtors during their restructuring. Central Building disclosed $22,913,866 in assets and $19,372,542 in liabilities. Judge George B. Nielsen, Jr. presides over the case. Lawyers at Stinson Morrison Hecker LLP in Phoenix, Arizona, serve as the Debtors' counsel. The petition was signed by Neal Smither, member. CHINA TEL GROUP: Shares Issued Exceed 5% of Outstanding Shares -------------------------------------------------------------- Since its last quarterly Report on Form 10-Q, VelaTel Global Communications, Inc., formerly known as China Tel Group, Inc., has made the sales of unregistered securities, namely shares of the Company's Series A common stock. The aggregate number of Shares sold exceeds 5% of the total number of Shares issued and outstanding as of the Company's Report on Form 10-Q filed Nov. 14, 2011. On Dec. 2, 2011, the Company issued 934,657 Shares to Joaquin de Teresa pursuant to the Settlement Agreement and Mutual General Release between China Tel Group, Inc., and Joaquin de Teresa, effective as of Dec. 15, 2010. This sale of Shares resulted in a reduction of $154,125 in debt of the Company. On Dec. 2, 2011, the Company issued 15,000,000 Shares to Azur Capital (NBD) SDN BHD pursuant to an Addendum to Subscription and Shareholder Agreement between the Company and Azur, effective as of Dec. 2, 2011. This sale of Shares resulted in an investment of $1,245,000 in Azur. On Dec. 6, 2011, the Company issued 13,998,100 Shares to Joinmax Engineering & Consultants (HK) Ltd. for professional services rendered to the Company pursuant to the Agreement for Professional Services between China Tel Group, Inc., and Joinmax effective as of April 10, 2009, as amended by the First Amendment to Agreement for Professional Services between VelaTel and Joinmax effective as of Dec. 1, 2011. This sale of Shares resulted in a reduction of $1,399,810 in accounts payable of the Company. On Jan. 4, 2012, the Company issued 7,262,340 Shares to Joinmax for professional services rendered to the Company pursuant to the Joinmax Professional Services Agreement. This sale of Shares resulted in a reduction of $726,234 in accounts payable of the Company. On Jan. 10, 2012, the Company issued 7,568,880 Shares to Joinmax for professional services rendered to the Company pursuant to the Joinmax Professional Services Agreement. This sale of Shares resulted in a reduction of $756,888 in accounts payable of the Company. On Jan. 11, 2012, the Company issued 816,340 Shares to Joaquin de Teresa pursuant to the Joaquin de Teresa Settlement Agreement. This sale of Shares resulted in a reduction of $77,062 in debt of the Company. On Feb. 2, 2012, the Company issued 7,405,040 Shares to Joinmax for professional services rendered to the Company pursuant to the Joinmax Professional Services Agreement. This sale of Shares resulted in a reduction of $740,504 in debt of the Company. About China Tel Based in San Diego, California, and Shenzhen, China, China Tel Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/-- provides high speed wireless broadband and telecommunications infrastructure engineering and construction services. Through its controlled subsidiaries, the Company provides fixed telephony, conventional long distance, high-speed wireless broadband and telecommunications infrastructure engineering and construction services. ChinaTel is presently building, operating and deploying networks in Asia and South America: a 3.5GHz wireless broadband system in 29 cities across the People's Republic of China with and for CECT-Chinacomm Communications Co., Ltd., a PRC company that holds a license to build the high speed wireless broadband system; and a 2.5GHz wireless broadband system in cities across Peru with and for Perusat, S.A., a Peruvian company that holds a license to build high speed wireless broadband systems. Since the Company's inception until June 30, 2011, it has incurred accumulated losses of approximately $242.36 million. The Company expects to continue to incur net losses for the foreseeable future. The Company's independent accountants have expressed substantial doubt about the Company's ability to continue as a going concern in their audit report, dated April 15, 2011, for the period ended Dec. 31, 2010. As reported by the TCR on April 21, 2011, Mendoza Berger & Company, LLP, in Irvine, California, expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The independent auditors noted that the Company has incurred a net loss of $56,041,182 for the year ended Dec. 31, 2009, cumulative losses of $165,361,145 since inception, a negative working capital of $68,760,057, and a stockholders' deficit of $63,213,793. The Company reported a net loss of $66,623,130 on $955,311 of revenue for the year ended Dec. 31, 2010, compared with a net loss of $56,065,029 on $657,876 of revenue during the prior year. The Company also reported a net loss of $17.97 million on $488,476 of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $38.22 million on $729,701 of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $11.57 million in total assets, $22.22 million in total liabilities and a $10.64 million total stockholders' deficit. CHRIST HOSPITAL: Group Urges Officials to Seek Community's Input ---------------------------------------------------------------- Terrence T. McDonald at the Jersey Journal reports that Save Christ Hospital, which was formed to oppose the now-scuttled acquisition of Christ Hospital in Jersey City by Prime Healthcare Services, has urged hospital officials to seek input from the community on its pending reorganization. Save Christ Hospital said the bankruptcy filing is "nothing to celebrate," but added that it presents an opportunity for the community to be involved in the hospital's future, according to the report. The report relates that Renee Steinhagen, executive director of nonprofit law center NJ Appleseed, said the Prime deal fell through because the hospital refused to seek public input on the proposed acquisition. That should change with the bankruptcy- fueled reorganization, Mr. Steinhagen said. The report note that Mr. Steinhagen referenced a letter sent to Christ Hospital officials by state Deputy Attorney General Jay A. Ganzman one week before The Jersey Journal reported on Prime's decision to back out. About Christ Hospital Christ Hospital -- http://www.christhopsital.org/-- filed for Chapter 11 bankruptcy protection (Bankr. D. N.J. Case No. 12- 12906) on Feb. 6, 2012. Christ Hospital is the second largest hospital in Hudson County. It owns and operates a 367 licensed bed acute-care hospital at 176 Palisade Avenue, Jersey City, New Jersey. In addition to the main Hospital building, it owns an additional 16 mostly adjacent lots. As of Dec. 31, 2011, the Debtor has total assets of at least $38,000,000 and total liabilities of $115,000,000, at book values. In early 2011, the Hospital retained Porzio, Bromberg & Newman, P.C., to conduct an out-of-court restructuring of the Hospital's debt. After appropriate due diligence, including site visits by Christ senior administrative and clinical management, the Hospital entered into a Letter of Intent on Aug. 12, 2011 with Prime Healthcare Services followed by a Dec. 2, 2011 Asset Purchase Agreement. On Dec. 23, 2011, the Debtor received an unsolicited offer to purchase its assets from Hudson Hospital Holdco, LLC an affiliate of the entity that had purchased both Bayonne Medical Center and Hoboken University Medical Center out of Bankruptcy Court. On Jan. 20, 2012, the Debtor received an unsolicited offer to purchase its assets from Community Healthcare Associates, the entity that had purchased the Barnert Hospital out of bankruptcy. CHA's proposal was joined in by Jersey City Medical Center/Liberty Health, who would become a tenant for a portion of the Christ Hospital premises if CHA was selected as the successful purchaser. Since executing the Prime contract on Dec. 2, 2011, the Debtor was approached both Hudson Holdco and CHA. While each of these bidders presented financing proposals, along with their interests in purchasing the Hospital, the Debtor has chosen to seek Chapter 11 relief without a strategic partnership at this time. CIRCUS AND ELDORADO: Auditor Issues Going Concern Qualification --------------------------------------------------------------- Circus and Eldorado Joint Venture updated its consolidated financial statements as of Dec. 31, 2010, and 2009, and for each of the three years in the period ended Dec. 31, 2010, to include a new footnote 2 expressing substantial doubt as to the Partnership's ability to continue as a going concern. Deloitte & Touche LLP, in Las Vegas Nevada, expressed substantial doubt about the Partnership's ability to continue as a going concern. The independent auditors noted that the Company is uncertain regarding its ability to fulfill its financial commitments as they become due. A copy of the reissued report and the Consolidated Financial Statements is available at http://is.gd/crM7hX About Circus and Eldorado Reno, Nevada-based Circus and Eldorado Joint Venture, doing business as Silver Legacy Resort Casino, owns and operates the Silver Legacy Resort Casino, a themed hotel-casino and entertainment complex in Reno, Nevada. Silver Legacy is a leader within the Reno market, offering the largest number of table games, the second largest number of hotel rooms and the third largest number of slot machines of any property in the Reno market. The Company reported a net loss of $4.0 million on $95.6 million of revenues for nine months ended Sept. 30, 2011, compared with a net loss of $3.7 million on $95.1 million of revenues for the same period last year. The Company's balance sheet at Sept. 30, 2011, showed $267.8 million in total assets, $165.4 million in total liabilities, and partners' equity of $102.4 million. * * * As reported by the TCR on Jan. 17, 2012, Standard & Poor's Ratings Services lowered its ratings on Reno-based gaming operator Circus and Eldorado Joint Venture (CEJV) to 'CCC-' from 'CCC', including its corporate credit rating and issue-level rating on CEJV's mortgage notes. "In addition, we placed all ratings on CreditWatch with negative implications," S&P said. "With less than two months to maturity, we believe it is becoming increasingly likely CEJV will restructure its debt obligations. Based on our cash flow expectations for 2012 and beyond, and incorporating the likelihood of higher interest costs given the company's credit profile and current market conditions, we believe CEJV will be challenged to generate sufficient cash flow to support fixed charges under a refinanced capital structure. While cash balances are relatively sizable and may reduce the amount of debt CEJV would need in a recapitalization, we believe this excess cash does not mitigate the refinancing risk," S&P said. CITIZENS REPUBLIC: Moody's Affirms 'Ba3' Deposit Ratings -------------------------------------------------------- Moody's changed the rating outlook on Citizens Republic Bancorp, Inc. and its bank subsidiary, Citizens Bank, Michigan, to stable from negative. Moody's also affirmed the ratings of both entities. The bank is rated D- for bank financial strength, which maps to Ba3 on the long-term scale, and Ba3 for long-term deposits. The holding company has a B2 issuer rating. Regarding Citizens Funding Trust I, Moody's maintained a negative rating outlook on the trust preferred securities issued by that entity, rated Caa2, because the dividends on those securities continue to be deferred. Citizens Republic Bancorp, Inc. and its subsidiaries are collectively referred to hereafter as 'Citizens'. RATINGS RATIONALE Moody's said the outlook change reflects the benefits realized from Citizens' aggressive strategy to reduce its problem assets beginning in late 2010. Although this strategy negatively affected Citizens' capital position, it reduces the bank's potential credit losses in a more adverse economic scenario. Additionally, this strategy accelerated Citizens' return to profitability and has resulted in three consecutive quarters of capital build through earnings. Citizens' aggressive resolution strategy has also resulted in much improved asset quality metrics. Citizens' nonperforming assets (NPAs), including accruing troubled debt restructurings, have declined over 70% since June 30, 2010. Citizens' NPAs represented 2.4% of loans plus OREO and 23.1% of tangible common equity plus loan loss reserves at December 31, 2011. These ratios compare favorably with similarly-rated peers. Despite these positive developments, Citizens is still vulnerable to an adverse economic scenario. Moody's loss estimates in that scenario are magnified because Citizens' deferred tax asset (DTA) valuation allowance precludes the rating agency from tax-effecting those losses. Nonetheless, Citizens' vulnerability to that scenario has been reduced because of its aggressive resolution strategy. Moreover, if Citizens' current earnings trajectory continues, the DTA valuation allowance could be reversed, which would meaningfully improve the bank's capital base and strengthen its ability to absorb losses. In that scenario, positive rating pressure is likely to emerge. The last rating action on Citizens was on January 28, 2010, when Moody's affirmed Citizens' ratings and negative outlook. The principal methodologies used in this rating were "Bank Financial Strength Ratings: Global Methodology" published in February 2007, "Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology" published in March 2007, and "Moody's Guidelines for Rating Bank Hybrid Securities and Subordinated Debt published in November, 2009. Citizens Republic Bancorp, Inc. is headquartered in Flint, Michigan and reported consolidated assets of $9.5 billion at December 31, 2011. COMMUNITY HEALTH: Moody's Rates Proposed Term Loan A at 'Ba3' ------------------------------------------------------------- Moody's Investors Service assigned a Ba3 (LGD 3, 32%) rating to CHS/Community Health Systems, Inc's. (Community Health) proposed $500 million term loan A due 2016 and new $700 million revolving credit facility expiring 2016. Moody's understands that the proceeds of the term loan A will be used to reduce the amount of the outstanding term loan B due 2013 and the new revolver will replace the company's existing $750 million revolver set to expire in 2013. Moody's existing ratings of the company, including the B1 Corporate Family and Probability of Default Ratings remain unchanged. The new term loan A and revolver, along with the recent extension of the maturity of an additional $1.6 billion in term loan B, will increase interest cost but are not expected to increase Community Health's leverage and improves the company's maturity profile. The rating outlook remains negative. Following is a summary of Moody's rating actions. Ratings assigned: $700 million senior secured revolving credit facility expiring 2016, Ba3 (LGD 3, 32%) $500 million senior secured term loan A due 2016, Ba3 (LGD 3, 32%) Ratings unchanged: Senior secured revolving credit facility expiring 2013, Ba3 (LGD 3, 32%) (to be withdrawn upon execution of new revolver) Senior secured term loan due 2014, Ba3 (LGD 3, 32%) Senior secured term loan due 2017, Ba3 (LGD 3, 32%) 8.875% senior notes due 2015, B3 (LGD 5, 85%) 8.0% senior notes due 2019, B3 (LGD 5, 85%) Corporate Family Rating, B1 Probability of Default Rating, B1 Speculative Grade Liquidity Rating, SGL-1 RATINGS RATIONALE The B1 Corporate Family Rating reflects Moody's expectation that leverage will remain high and interest expense coverage will continue to be modest. Furthermore, Moody's anticipates that the opportunity to reduce leverage with free cash flow will be constrained in the near term given the company's expected investment in capital spending related to replacement hospitals and information technology. Moody's also expects the company to continue to actively pursue acquisitions. However, supporting the rating is Moody's acknowledgement of Community Health's scale and market strength, which have helped the company weather unfavorable trends in bad debt expense and weak volumes that have been plaguing the industry as a whole. Moody's anticipates that the company will continue to see stable margin performance and maintain very good liquidity. The company's inability to continue to manage headwinds in the industry and reach and maintain debt to EBITDA below 5.0 times could result in a downgrade of the ratings. This could result from declining adjusted admission trends and unfavorable reimbursement or pricing trends impacting net revenue growth, greater than expected increases in bad debt expense, or aggressive acquisition activity. Additionally, a significant debt financed acquisition or adverse developments related to ongoing investigations or litigation could result in a downgrade of the ratings. Given Moody's view of the continued risks facing the company, an upgrade of the rating in the near term is not likely. However, Moody's could upgrade the ratings if financial leverage is materially reduced and cash flow coverage of debt metrics improve. Specifically, if Community Health is able to achieve and sustain adjusted debt to EBITDA below 4.0 times, Moody's could upgrade the ratings. However, absent further clarity around the outcome of ongoing litigation and investigations, Moody's would need to see additional cushion in these metrics to absorb potential negative developments. For further details, refer to Moody's Credit Opinion for CHS/Community Health Systems, Inc. on moodys.com. The principal methodology used in rating CHS/Community Health Systems, Inc. was the Global Healthcare Service Provider Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Community Health, headquartered in Franklin, TN, is an operator of general acute care hospitals in non-urban and mid-sized markets throughout the US. Through its subsidiaries, Community Health owned, leased or operated 131 hospitals in 29 states at September 30, 2011. In addition, through its subsidiary, Quorum Health Resources, LLC, Community Health provides management and consulting services to approximately 150 independent, non- affiliated general acute care hospitals throughout the country. Community Health recognized approximately $13.6 billion in revenue for the twelve months ended September 30, 2011. CONNAUGHT GROUP: Carlisle Collection in Chapter 11, Seeks Sale -------------------------------------------------------------- The Connaught Group Ltd., doing business as The Carlisle Collection, Inc., sought bankruptcy protection (Bankr. S.D.N.Y. Case No. 12-10512) on Feb. 9, to sell the business as a going concern, amid financial woes brought about by a decline in consumer spending. Connaught, which filed for bankruptcy along with four affiliates, disclosed total assets of $38.5 millin and total liabilities of $61.3 million. New York-based Connaught claims to be the largest direct seller of high-end women's apparel in the U.S. The current 10 stores, located in the U.S., operate under the names Limited Editions for Her and Eccoci. The Company maintains an experienced network of 1,300 independent sales consultants that provide wardrobe consultations and highly personalized service to business executives, diplomats, TV personalities and other busy professional and social women. Founded by William Rondina, Connaught is best known for its original label, Carlisle. Since the first privately held trunk show in 1982, Carlisle has become a go-to brand for accomplished women across the nation. The Company also offers a sizable and successful contemporary brand, Etcetera, as Connaught's chic everyday lifestyle brand for women on the go. A non-debtor Canadian subsidiary, The Connaught Group ULC, sells Debtors' clothing to be liquidated in eight outlet stores in Canada. Three of these Canadian stores are leased by The Connaught Group. At its height in 2007, the Debtors' revenue surpassed $150 million but fell to roughly $108 million in 2010 as consumer spending fell as a result of the global economic crisis, Mary Satin, the CRO, says in a court filing. "The Debtors' operating revenues and profitability have declined due to the impact of the global economic crisis on consumer spending. As sales decreased, Debtors have encountered a substantial decrease in cash flow, causing their expenses to outweigh their revenues. Losses from declining sales in a weak economic climate were exacerbated by excess inventory and markdowns. Revenues for 2009 were down $27 million from 2008 leading to an operating loss of $15.3 million. The Debtors' restructuring efforts led to an operating loss of less than $2.5 million in 2010, but were not enough to ensure sufficient cash flow." The Debtors filed Chapter 11 petitions to seek an opportunity to preserve and maximize the value of their assets for the benefit of all stakeholders through a sale of their businesses as going concerns and to maintain their relationships with their wardrobe consultants to continue to sell inventory in the ordinary course of business. As of the Petition Date, the Debtors have outstanding secured obligations of $8.4 million to JPMorgan Chase Bank, N.A. and $4 million to Citibank, N.A. The Debtors also owe $31.4 million in respect of unsecured loans to the Debtors by the sole shareholder of Connaught, Mr. Rondina, the founder, chairman and CEO of the company. Chapter 11 Case First day motions filed in the case include a request to pay undisputed prepetition obligations to service providers that are designated as "critical vendors." The Debtors have also filed a request to access cash collateral. As of the filing date, the Debtors are in the early stages of the Spring selling season. The Debtors say they need cash collateral to fund working capital needs in the 30 days post-filing to conduct this season's sales and secure the balance of inventory requirements for Spring 2012 to fulfill orders, without which the Debtors cannot meet their sales targets. The Debtors expect payment for weekly payroll to employees will total $230,000 within the 30 days following the Petition Date. Payments to business consultants during the period is expected to aggregate $270,000. Cash receipts during the 30-day period following the Petition Date is expected to be $6.3 million and cash disbursements will total $5.9 million. The Debtors said they are pursuing a going concern sale of the business under 11 U.S.C. Sec. 363. The Court filings though did not indicate whether the Debtors have begun talking to potential buyers. Attorneys at Fulbright & Jaworski LLP sere as counsel for the Debtor. Kurtzman Carson Consultants LLC is the claims and notice agent. CORNERSTONE BANCSHARES: Banc Fund Ceases to Hold 5% Equity Stake ---------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Banc Fund VII L.P. and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 240,405 shares of common stock of Cornerstone Bancshares, Inc., representing 3.7% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/R1DFdt About Cornerstone Bancshares Chattanooga, Tenn.-based Cornerstone Bancshares, Inc. is a bank holding company. Its wholly-owned subsidiary, Cornerstone Community Bank, is a Tennessee-chartered commercial bank with five full-service banking offices located in Hamilton County, Tennessee. The Company also reported net income of $917,230 on $15.49 million of total interest income for the nine months ended Sept. 30, 2011, compared with net income of $575,607 on $19.76 million of total interest income for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $426.36 million in total assets, $393.91 million in total liabilities, and $32.44 million in total stockholders' equity. Consent Order The Company disclosed in 10-Q for the quarter ended June 30, 2010, that following the issuance of a written report by the Federal Deposit Insurance Corporation and the Tennessee Department of Financial Institutions concerning their joint examination of Cornerstone Community Bank in October 2009, the Bank entered a consent order with the FDIC on April 2, 2010, and a written agreement with the TDFI on April 8, 2010, each concerning areas of the Bank's operations identified in the report as warranting improvement and presenting substantially similar plans for making those improvements. The consent order and written agreement, which the Company collectively refers to as the "Action Plans", convey specific actions needed to address certain findings from the joint examination and to address the Company's current financial condition. The Action Plans contain a list of strict requirements ranging from a capital directive, which requires the Company to achieve and maintain minimum regulatory capital levels in excess of the statutory minimums to be well-capitalized, to developing a liquidity risk management and contingency funding plan, in connection with which the Company will be subject to limitations on the maximum interest rates it can pay on deposit accounts. The Action Plans also contain restrictions on future extensions of credit and requires the development of various programs and procedures to improve the Company's asset quality as well as routine reporting on its progress toward compliance with the Action Plans to the Board of Directors, the FDIC and the TDFI. As of April 2, 2010, the date of the Action Plans, the Bank was deemed to be "adequately capitalized." CRYSTAL CATHEDRAL: Catholic Diocese Is New Owner of Property ------------------------------------------------------------ Caitlin Adams at OCMetro reports that the Roman Catholic Diocese of Orange is now officially the owner of Crystal Cathedral, following the close of escrow proceedings on the property last week. The report says the close of escrow on the $57.5 million sale means that the formal transfer of title has been completed. While the Diocese is now the full owner of the campus and buildings, use of the Cathedral and property by the Catholic congregation will not occur for some time. Under the terms of the purchase agreement, Crystal Cathedral Ministries can remain and worship at its former home for three more years, leasing it back from the Diocese for $100,000 per month for the first year, and $150,000 per month for the next two years. The report adds, at the end of that time, the Ministry would be required to move to another place to continue services, possibly a nearby Catholic church; the Diocese has offered to facilitate a long-term lease of St. Callistus Church in Garden Grove. About Crystal Cathedral Crystal Cathedral Ministries is a Southern California-based megachurch founded by television evangelist Robert Schuller. The church, known for its television show "The Hour of Power." Mr. Schuller retired from his role as senior pastor of Crystal Cathedral in 2006. His daughter Sheila Schuller Coleman has been senior pastor since July 2009. Contributions declined 24% in 2009, in part on account of "unsettled leadership." Crystal Cathedral filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. 10-24771) on Oct. 18, 2010. The Debtor disclosed $72,872,165 in assets and $48,460,826 in liabilities as of the Chapter 11 filing. Marc J. Winthrop, Esq., at Winthrop Couchot P.C. represents the Debtor. Todd C. Ringstad, Esq., at Ringstad & Sanders, LLP, represents the Official Committee of Unsecured Creditors. In November 2011, Crystal Cathedral won Court permission to sell its property to the Roman Catholic Diocese of Orange for $57.5 million. The Diocese beat a rival bid from Chapman University. The sale agreement provides that the congregation will have three years to find new premises. Chapman University, the secular bidder, has been the preferred buyer as far as the church members are concerned, because Chapman would allow the ministry to continue to use the main buildings on the premises. It also offered the option of allowing church administrators to buy the property back at a later point. Chapman had raised its bid to $59 million, but the Crystal Cathedral board still chose the Diocese. CUSTER ROAD: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Custer Road Marketplace Ltd Custer Road McKinney, TX 75035 Bankruptcy Case No.: 12-40312 Chapter 11 Petition Date: February 7, 2012 Court: U.S. Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: Richard W. Ward, Esq. 6860 N. Dallas Parkway, Suite 200 Plano, TX 75024 Tel: (214) 220-2402 Fax: (972) 499-7240 E-mail: rwward@airmail.net Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Stanley V. Graff, manager of CRM/GP, LLC, general partner. DAIS ANALYTIC: Amends Prospectus on 33MM Shares Offering -------------------------------------------------------- Dais Analytic Corporation filed with the U.S. Securities and Exchange Commission amendment no. 5 to Form S-1 registration statement relating to the public offering of up to 33,000,000 shares of the Company's common stock. The public offering price for the common stock offered is estimated to be between $0.30 and $0.34 per share. Once the offering price has been determined, the common stock offering price will remain fixed for the duration of the offering. The Company's common stock is quoted on the OTC Bulletin Board under the symbol "DLYT.OB". On Feb. 8 , 2012, the last reported sale price for the Company's common stock was $0.26 per share. The proposed aggregate price of the shares offered assuming a midpoint offering price of $0.32 per share is $ 10,560,000. A full-text copy of the amended prospectus is available at: http://is.gd/INH9hN About Dais Analytic Odessa, Fla.-based Dais Analytic Corporation has developed and patented a nano-structure polymer technology, which is being commercialized in products based on the functionality of these materials. The initial product focus of the Company is ConsERV, an energy recovery ventilator. The Company also has new product applications in various developmental stages. Cross, Fernandez & Riley LLP, in Orlando, Fla., expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's 2010 financial results. The independent auditors noted that the Company has incurred significant losses since inception and has a working capital deficit and stockholders' deficit of $2,861,448 and $6,722,092 at Dec. 31, 2010. The Company reported a net loss of $1.43 million on $3.34 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $7.12 million on $1.53 million of revenue during the prior year. The Company reported a net loss of $3.38 million on $2.61 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $1.94 million on $2.36 million of revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $2.69 million in total assets, $8.79 million in total liabilities, and a $6.09 million total stockholders' deficit. DENNY'S CORP: Invesco Ltd. Discloses 4.3% Equity Stake ------------------------------------------------------ Invesco Ltd. disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Dec. 31, 2011, it beneficially owns 4,168,598 shares of common stock of Denny's Corp. representing 4.3% of the shares outstanding. A full-text copy of the filing is available at http://is.gd/PA33GC About Denny's Corporation Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ: DENN) -- http://www.dennys.com/-- Denny's is one of America's largest full-service family restaurant chains, consisting of 1,348 franchised and licensed units and 232 company-owned units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. The Company's balance sheet at Sept. 28, 2011, showed $280.63 million in total assets, $376.11 million in total liabilities, and a $95.47 million total shareholders' deficit. * * * Denny's carries 'B2' corporate family and probability of default ratings from Moody's Investors Service and a 'B+' corporate credit rating from Standard & Poor's. DENNY'S CORP: Vanguard Group Discloses 5.2% Equity Stake -------------------------------------------------------- The Vanguard Group, Inc., disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Dec. 31, 2011, it beneficially owns 4,979,682 shares of common stock of Denny's Corp representing 5.16% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/qQKIwk About Denny's Corporation Based in Spartanburg, South Carolina, Denny's Corporation (NASDAQ: DENN) -- http://www.dennys.com/-- Denny's is one of America's largest full-service family restaurant chains, consisting of 1,348 franchised and licensed units and 232 company-owned units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. The Company's balance sheet at Sept. 28, 2011, showed $280.63 million in total assets, $376.11 million in total liabilities, and a $95.47 million total shareholders' deficit. * * * Denny's carries 'B2' corporate family and probability of default ratings from Moody's Investors Service and a 'B+' corporate credit rating from Standard & Poor's. DIAMOND FOODS: Fin'l Restatements May Violate Loan Covenants ------------------------------------------------------------ Emily Glazer, Joann S. Lublin and John Jannarone, writing for The Wall Street Journal, report that the restatements of Diamond Foods Inc.'s financial reports could put the Company in violation of its lending agreements. That means it may have to negotiate with creditors, which in theory could impose increases in Diamond's debt costs. WSJ notes the company had just over $500 million in debt as of its last official filing. Diamond Foods on Feb. 8 disclosed that the Audit Committee of its Board of Directors has substantially completed its investigation of the Company's accounting for certain crop payments to walnut growers. The Audit Committee has concluded that the Company's financial statements for the fiscal years 2010 and 2011 will need to be restated. Over the course of the last three months, the Audit Committee has carefully reviewed the accounting treatment of certain payments to walnut growers. The Audit Committee has concluded that a "continuity" payment made to growers in August 2010 of approximately $20 million and a "momentum" payment made to growers in September 2011 of approximately $60 million were not accounted for in the correct periods, and the Audit Committee identified material weaknesses in the Company's internal control over financial reporting. The Board of Directors is taking a number of corrective actions including the appointment of a new Chief Executive Officer and Chief Financial Officer. Effective immediately, the Board has appointed Director Rick Wolford to serve as Acting President and Chief Executive Officer and Michael Murphy, of Alix Partners, LLP, to serve as Acting Chief Financial Officer. The Company is commencing searches for permanent replacements for the CEO and CFO positions. The Board has also appointed Robert J. Zollars, who previously served as Lead Independent Director, to the position of Chairman of the Board. Michael J. Mendes and Steven M. Neil have been placed on administrative leave from the Company. According to WSJ, a person familiar with the matter said Wednesday the executives will remain on leave while the company negotiates their severance, their exit from their board seats and possibly clawbacks of previously awarded pay. WSJ said the internal probe was launched after the newspaper raised accounting questions in September. According to WSJ, a person familiar with the matter said the results of the internal probe will now be turned over to the U.S. Securities and Exchange Commission and the San Francisco U.S. attorney's office, which have been investigating Diamond and how it handled the payments. Two people familiar with the matter said federal investigators have progressed slowly in recent weeks, because they were waiting for the audit committee to produce its report. WSJ also reports that a person familiar with the matter said Wednesday Procter & Gamble Co. is now highly unlikely to complete the sale of its Pringles canned-chips business to Diamond Foods, which agreed to pay $2.35 billion to buy Pringles in April 2011. WSJ notes that since the P&G deal was announced, Diamond's stock has lost nearly two-thirds of its value. About Diamond Foods The Diamond Foods, Inc. -- http://www.diamondfoods.com/-- is a packaged food company focused on building, acquiring and energizing brands including Kettle(R) Chips, Emerald(R) snack nuts, Pop Secret(R) popcorn, and Diamond of California(R) nuts. The Company's products are distributed in a wide range of stores where snacks and culinary nuts are sold. The Securities and Exchange Commission and the audit committee of the Company's board are investigating payments the Company made to walnut growers late last summer. Shareholders have sued the company alleging Diamond delayed what it called "momentum payments" to inflate its 2011 earnings. Diamond missed a deadline to file its fiscal first-quarter results in light of the SEC probe. Diamond has said it will cooperate with the SEC. The accounting questions have forced Diamond to delay its $2.35 billion acquisition of Pringles from Procter & Gamble Co. P&G has said the deal hinges on the favorable resolution of the investigations. WSJ reports two of the five largest shareholders of Diamond Foods Inc. dumped the bulk of their holdings amid the accounting probes. Del Mar Asset Management, Diamond's third-largest stockholder with 8.7% of the company at the end of September, according to FactSet Research, now owns just 40,000 shares, or 0.2% of the company. BAMCO Inc., Diamond's fifth-largest shareholder in September with 6.9% of the company, has since sold all of its shares. EASTMAN KODAK: To Phase Out Dedicated Capture Devices Business -------------------------------------------------------------- Eastman Kodak Company said Thursday that as a result of its ongoing strategic review process and commitment to drive sustainable profitability through its most valuable business lines, it plans to phase out its dedicated capture devices business -- comprising digital cameras, pocket video cameras and digital picture frames -- in the first half of 2012. Kodak will instead expand its current brand licensing program, and seek licensees in these categories. Following this decision, Kodak's Consumer Business will include online and retail-based photo printing, as well as desktop inkjet printing. Kodak has contacted its retail partners, and is working closely with them to ensure an orderly transition. Kodak will continue to honor all related product warranties, and provide technical support and service for its cameras, pocket video cameras and digital picture frames. "For some time, Kodak's strategy has been to improve margins in the capture device business by narrowing our participation in terms of product portfolio, geographies and retail outlets. T[he] announcement is the logical extension of that process, given our analysis of the industry trends," said Pradeep Jotwani, President, Consumer Businesses, and Kodak Chief Marketing Officer. Upon completion of the phase out, Kodak expects to achieve annual operating savings of more than $100 million. Kodak expects to incur a charge related to separation benefits of roughly $30 million resulting from the exit of the business. In addition to its Consumer Businesses segment, Kodak has a Commercial Businesses segment that includes the Digital and Functional Printing, Enterprise Services and Solutions, and Graphics, Entertainment and Commercial Films units. Kodak's digital businesses now comprise approximately three-fourths of total revenues. Kodak continues to have a strong position in the personal imaging market. While photos are increasingly taken on multi-function mobile devices, Kodak technology makes it easy for consumers to produce a broad range of photo products, anywhere, anytime ? from prints to photobooks, photo greeting cards and personalized calendars. These items can be made on Kodak products, with Kodak quality at retail, at home, and ordered for delivery to home. * * * Dana Mattioli, writing for The Wall Street Journal, notes Kodak loses a substantial amount of money on its digital-camera business. Executives kept it alive, because it helps win shelf space at retailers for the consumer inkjet printers on which Kodak is betting its future, people familiar with the matter said, according to WSJ. Kodak is in the process of looking at selling or licensing all of its money-losing businesses, including its online photo-sharing site Kodak Gallery, as a way to meet financial terms set when it obtained loans to keep it afloat in Chapter 11, a person familiar with the matter said, WSJ further reports. The company's fate hinges largely on the planned sale of 1,100 digital patents, a step required by its lenders. But the company has other revenue-raising targets to hit as well, the person told WSJ. According to WSJ, a Kodak spokesman said the company has spoken with its retail partners and they have been "generally understanding and supportive of our decision." Another person familiar with the matter told WSJ Kodak's digital- photo-frame line got off to a good start in 2007 and was profitable, but the recession left Kodak with a glut of inventory as low-cost foreign competitors drove down prices. That source said Kodak's video-camera operation was profitable but wasn't big enough to carry the division. WSJ notes Kodak is only the fourth-largest digital-camera maker in the U.S. In 2008, Kodak had 16.6% of the U.S. market and shipped 6.7 million digital cameras, according to market research firm IDC. In 2011, its market share had eroded to 11.6%, and the company shipped 3.6 million units. WSJ says news of Kodak's exit from the digital cameras business is especially sad for Steve Sasson, a former employee who invented the digital camera in a Kodak laboratory in 1975, when he was just 25 years old. "Of course I'm saddened by it," he said. "We had a long history of enabling people to capture pictures." About Eastman Kodak Rochester, New York-based Eastman Kodak Company (OTB: EKDKQ.PK) and its U.S. subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. are not included in the filing and will continue to operate as usual. The Company, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Having invested significantly in research and development for over a century, Kodak has a vast portfolio of patents. In 1975, Kodak scientists invented the first digital camera. Kodak then went on to develop a vast collection of patented technologies to enhance digital image capture and processing, technologies that are used in virtually every modern digital camera, smartphone and tablet, as well as numerous other devices. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Kodak says it has "significant" legacy liabilities, which include $1.2 billion in non-U.S. pension liabilities, $1.3 billion of Other Post-Employment Benefit ("OPEB") liabilities and roughly $100 million in environmental liabilities. Kodak has outstanding funded debt in an aggregate amount of roughly $1.6 billion, consisting primarily of roughly: (a) $100 million outstanding under the first lien revolving credit facility plus an additional $96 million in face amount of outstanding letters of credit; (b) $750 million in principal amount of second lien secured notes; (c) $400 million in principal amount of convertible notes; and (d) $283 million in principal amount of other senior unsecured debt. Kodak also has roughly $425 million in outstanding trade debt. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtor. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. An official committee of unsecured creditors has been appointed in the case. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). EMBARCADERO RE: S&P Assigns 'BB-' Rating to Series 2012-I Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-(sf)' rating to the Series 2012-I notes issued by Embarcadero Re Ltd. The notes cover losses from U.S. earthquakes on an annual aggregate basis during a three-year risk period in the state of California. "Our views of the transaction's credit risk reflect the counterparty credit ratings on all of the parties involved that can affect the timely payment of interest and the ultimate payment of principal on the notes. Our rating on the notes takes into account the implied rating on the catastrophe risk ('BB-') and the rating on the assets in the collateral account ('AAAm'). The rating reflects the lower of these two ratings, which is currently the implied rating on the catastrophe risk. We do not currently rate the California Earthquake Authority (CEA). At closing, the CEA will deposit two quarterly premiums into the premium deposit account, and thereafter, no later than five days prior to the first day of each subsequent accrual period, will deposit the upcoming quarterly premium payment into the premium deposit account," S&P said. Embarcadero Re was formed in 2011 as a Bermuda exempted company licensed as a special-purpose reinsurer. The CEA will cede the subject business to Embarcadero Re. Ratings List New Ratings Embarcadero Re Ltd. Series 2012-I notes BB-(sf) EMMIS COMMUNICATIONS: AQR Capital Discloses 4.5% Equity Stake ------------------------------------------------------------- AQR Capital Management, LLC, disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Dec. 31, 2011, it beneficially owns 1,507,094 shares of common stock of Emmis Communications Corporation representing 4.5% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/1lQB1N About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. The Company reported a consolidated net loss of $11.54 million on $251.31 million of net revenues for the year ended Feb. 28, 2011, compared with a consolidated net loss of $118.49 million on $242.56 million of net revenues during the prior year. For the nine months ended Nov. 30, 2011, the Company reported net income attributable to common shareholders of $97.72 million on $185.08 million of net revenues, compared with a net loss attributable to common shareholders of $7.92 million on $193.24 million of net revenues for the same period during the prior year. The Company's balance sheet at Nov. 30, 2011, showed $365.70 million in total assets, $344.92 million in total liabilities,$56.38 million in series A cumulative convertible preferred stock and a $35.60 million total deficit. * * * In November 2010, Moody's Investors Service affirmed the 'Caa2' Corporate Family Rating and 'Caa3' Probability of Default rating for Emmis Communications Corporation, as well as its SGL-4 speculative grade liquidity rating. Operating performance improved with the economic recovery, but absent debt reduction with proceeds from an asset sale or equity infusion Emmis will likely breach its leverage covenant when the covenant suspension period ends for the quarter ending November 30, 2011, in Moody's opinion. Emmis' CFR and PDR incorporate expectations for a covenant breach in November 2011. Moody's considers the Company's capital structure unsustainable, and its operations in the cyclical advertising business magnify this challenge. Furthermore, Emmis relies on two markets, Los Angeles and New York, for approximately 50% of its revenue, although its ownership of stations in top markets including Chicago as well as NY and LA, support the rating. The negative outlook incorporates Moody's expectations that Emmis will not comply with its maximum leverage covenant when effective for the quarter ending Nov. 30, 2011. FLYING FORTRESS: Moody's Assigns 'Ba3' Rating to $900-Mil. Loan --------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the $900 million five-year secured term loan being issued by Flying Fortress Inc., a subsidiary of International Lease Finance Corporation (ILFC). ILFC's other ratings, including its B1 corporate family and senior unsecured ratings, are not affected by the transaction. The outlook for ILFC's ratings remains positive. RATINGS RATIONALE The new secured loan will be guaranteed on a senior unsecured basis by ILFC and on a senior secured basis by Flying Fortress's immediate parent, an ILFC special purpose subsidiary holding company, and by Flying Fortress's direct subsidiaries. The two direct subsidiary guarantors are holding companies that own a number of special purpose entities (SPEs) that each own aircraft, associated equipment and leases that meet certain eligibility requirements under the loan documents. ILFC will use the proceeds of the loan to repay principal and interest of currently outstanding indebtedness, fees and expenses associated with the new financing, and for general corporate purposes. The Ba3 rating assigned to the loan is one notch above ILFC's B1 corporate family rating, based upon loan terms that meaningfully lower secured creditors' risk of loss compared to holders of ILFC's unsecured obligations. Loan security will be comprised of a perfected first priority lien in the stock or equity interest of Flying Fortress and its subsidiaries, including the SPEs that own the aircraft and related assets. Flying Fortress will be required to quarterly certify its compliance with a 63% maximum loan-to- value (LTV) covenant, based upon the appraised value of the aircraft owned by the SPEs. Flying Fortress will be able to cure LTV covenant deficiencies, should any arise, through loan repayments and collateral substitution. For purposes of covenant certification, the aircraft will be re-appraised semi-annually. Terms also include a restriction on liens on aircraft owned by the SPEs and a restriction on additional indebtedness, besides permitted subordinated debt. Because the loan terms do not include a direct pledge of aircraft, Moody's believes that in the event of an ILFC bankruptcy, there would be some risk of substantive consolidation of Flying Fortress and its subsidiaries that, were it to occur, could diminish lenders' ability to realize value from their security interests. The loan agreements will specify that SPE aircraft include a minimum percentage of preferred types with limits relating to the percentage that are wide-body, freighter, or a particular model. There are also concentration limits relating to lessee and country of operation. Furthermore, the aircraft pool is subject to an average age restriction. Flying Fortress does not directly have access to alternate unencumbered aircraft for substitution to maintain the required collateral pool characteristics, but must rely upon ILFC to ensure performance, based upon ILFC's guarantee. ILFC's B1 corporate family rating reflects its global franchise positioning and the balance and diversity of it geographic, aircraft, and customer risk exposures. ILFC's relatively resilient operating cash flows and the long-lived nature of its equipment are also key rating considerations. ILFC has made significant strides toward building liquidity and reducing leverage over the past two years. ILFC also faces potential challenges relating to sustaining lease margin improvements and generating attractive returns on equity, given market and economic conditions. Other credit challenges include the monoline and cyclical nature of ILFC's business, its exposure to aircraft residual value risks, and its reliance on confidence-sensitive wholesale funding. The positive rating outlook is based on Moody's expectation that ILFC's continued efforts to realign its debt maturities with cash flows and deleverage over the intermediate term should further strengthen its liquidity and capital positions. Moody's could upgrade the ratings if, in addition to building additional liquidity and capital strength, ILFC sustains lease margin improvements as economic and industry conditions recover and demonstrates that it can achieve and maintain an attractive return for its owners. In its last ILFC rating action dated December 19, 2011, Moody's assigned a rating of B1 to ILFC's $650 million senior unsecured notes. The principal methodology used in this rating was Analyzing the Credit Risks of Finance Companies published in October 2000. International Lease Finance Corporation, headquartered in Los Angeles, California, is a major owner-lessor of commercial aircraft. FRANK SUTTON: Court Rejects Plan That Puts Unsecureds in 2 Classes ------------------------------------------------------------------ Bankruptcy Judge Randy D. Doub denied confirmation of the Amended Chapter 11 Plan of Reorganization filed by Frank Morrison Sutton, Jr. on Oct. 14, 2011. Judge Doub held that, based on the lack of evidence presented at the confirmation hearing, the Debtor failed to prove by the preponderance of the evidence that separating class seven and class eight under the Plan does not unfairly discriminate against the class seven creditors. The Plan is not fair and equitable and does not comply with 11 U.S.C. Sec. 1129. Frank Morrison Sutton, Jr. filed for Chapter 11 bankruptcy (Bankr. E.D.N.C. Case No. 10-10539) on Dec. 28, 2010. At the time the petition was filed, the Debtor resided in Kinston, North Carolina, but he now resides in Asheville, North Carolina. The Debtor is a licensed North Carolina physician who is employed by an anesthesiology practice in Asheville, North Carolina. The Debtor intends to fund the Plan through continued employment as an anesthesiologist. The Plan establishes eight different classes of claims and creates a special class for educational loan claims separate from other unsecured claims. Class seven of the Plan consists of general unsecured claims totaling $418,487. The Debtor proposes to pay class seven a total of $16,000 within 90 days of the Effective Date of the Plan. Class eight of the Plan consists of general unsecured educational loans totaling $235,871. The Plan proposes to pay class eight in full by making a regular monthly payment of $1,479. Thus, the Plan classifies unsecured claims into two separate classes: (1) class seven comprised of all dischargeable unsecured debt; and (2) class eight comprised of nondischargeable educational loans. This treatment results in a payout of 3.8% on the claims in class seven. If the educational loans were not in a separate class, the unsecured creditors would receive a 36% distribution on their claims. The Debtor argues placing the educational loans in a separate class is permissible because the loans are nondischargeable pursuant to 11 U.S.C. Sec. 523(a)(8) and are distinctly different from the remaining general unsecured claims. The Bankruptcy Administrator and the North Carolina Department of Revenue objected to the Plan. A copy of Judge Doub's Feb. 9, 2012 Order is available at http://is.gd/PrseUCfrom Leagle.com. GENCORP INC: Retirement Plan Discloses 6.3% Equity Stake -------------------------------------------------------- GenCorp Retirement Savings Plan disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Dec. 31, 2011, it beneficially owns 3,729,613 shares of common stock of GenCorp Inc. representing 6.3% of the shares outstanding. The Plan is a voluntary savings plan for eligible employees of GenCorp Inc. and certain of its subsidiaries. Employees who elect to participate in the Plan may select one or more of twenty-three investment options for their contributions. As previously reported by the TCR on Feb. 22, 2011, GenCorp Retirement disclosed beneficial ownership of 4,176,695 shares. A full-text copy of the amended filing is available for free at: http://is.gd/nd03NW About GenCorp Inc. Rancho Cordova, Calif.-based GenCorp Inc. (NYSE: GY) -- http://www.GenCorp.com/-- is a manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the re-zoning, entitlement, sale, and leasing of the Company's excess real estate assets. GenCorp Inc.'s balance sheet as of Nov. 30, 2011, showed $939.50 million in total assets, $1.14 billion in total liabilities, $4.40 million in redeemable common stock, and a $211.60 million total shareholders' deficit. * * * Standard & Poor's in February 2011 has raised its corporate credit rating on GenCorp Inc. to 'B' from 'B-'. S&P also raised its rating on the company's first-lien secured debt to 'BB-' from 'B+' and on the subordinated debt to 'CCC+' from 'CCC'. The recovery rating on the first-lien secured debt remains unchanged at '1', and the recovery rating on the subordinated debt remains unchanged at '6'. The outlook is stable. "We are raising its ratings on GenCorp by one notch to reflect the company's improved liquidity position," said Standard & Poor's credit analyst Lisa Jenkins. "The ratings on GenCorp reflect its highly leveraged capital structure, weak financial performance, limited diversity, and modest scale of operations compared with competitors. Offsetting these challenges to some extent is the company's good niche positions in aerospace propulsion and solid backlog. S&P characterize GenCorp Inc.'s business profile as weak and its financial profile as highly leveraged." As reported by the TCR on May 24, 2011, Moody's Investors Service upgraded the corporate family and probability of default ratings of GenCorp Inc. to B1 from B2. The upgrade reflects the Company's steady improvement to operating results, as a leading niche supplier of solid and liquid rocket propulsion systems to prime defense contractors. Operating margins have grown to above 11% (inclusive of Moody's standard adjustments) in the most recent twelve-month period, resulting from growth in defense programs that GenCorp supplies (THAAD, Aegis, PAC-3) and good cost controls. GenCorp's funded backlog has grown steadily over several years, and is now about 90% of sales. The level of backlog provides good forward revenue visibility and compares favorably with other defense suppliers. GENOA HEALTHCARE: S&P Affirms 'B' Corporate; Outlook Negative ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Tampa-based nursing home operator Genoa Healthcare Group. The outlook is negative. "At the same time, Standard & Poor's raised the issue-level rating on the company's second-lien term loan to 'B' from 'CCC+'. We also revised our recovery rating on the loan to '4' from '6'. The '4' recovery rating indicates our expectations that lenders would receive average (30%-50%) recovery of principal in the event of default," S&P said. "Our view of Genoa's 'vulnerable' business risk profile, as defined in our criteria, considers significant reimbursement risk as a key credit factor," Standard & Poor's credit analyst John Bluemke said. "We view the financial profile as "highly leveraged" because we do not expect meaningful improvement in the company's weak credit protection measures." "Standard & Poor's expectation for Genoa includes the impact of recently implemented Medicare reimbursement changes--specifically an 11.1% rate cut and adverse changes to the reimbursement rules for group therapy services. Our vulnerable business risk assessment does not assume any further Medicare or Medicaid cuts. Nonetheless, we believe reimbursement will remain volatile in the long term, with further rate cuts possible at both federal and state levels, particularly as the strain of rapidly rising health care expenditures propels efforts to cut health care costs," S&P said. "Our negative rating outlook on Genoa reflects the large, adverse impact of reimbursement cuts, net of its mitigating strategies, supporting our belief that cash flow could decline substantially," Mr. Bluemke said. "Although we expect Genoa to be prudent with its use of cash, we view the company's private ownership and potential of dividend activity as factors limiting improvement in the financial profile." "Genoa operates in a competitive industry where nursing homes compete for patients. This competition likely will intensify as nursing homes adjust to reimbursement changes," S&P said. GLOBAL BRASS: S&P Puts 'B' Corp. Credit Rating on Watch Positive ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B' corporate credit ratings, on Schaumburg, Ill.-based Global Brass and Copper Inc. (GBC) on CreditWatch with positive implications. The CreditWatch listing indicates that there is a 50% chance of an upgrade on the completion of S&P's review. "The CreditWatch listing reflects our belief GBC's near-term operating performance will continue to benefit from increased end- market demand, resulting in higher pricing and volumes sold," said Standard & Poor's credit analyst Maurice Austin. "This is based on our expectations of a continued economic recovery." "Consequently, Standard & Poor's expects the GBC's credit measures and liquidity position to improve to a level we believe may be more consistent with a higher rating," S&P said. "In resolving the CreditWatch listing, we will review our performance expectations and the company's liquidity position, and assess the sustainability of its operating prospects to determine whether a higher rating is warranted," S&P said. "We believe potential rating upside is likely limited to one notch and expect to resolve the CreditWatch listing within the next several weeks," S&P said. GMX RESOURCES: Jefferies Discloses 3.2% Equity Stake ---------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Jefferies Funding LLC and Jefferies Group, Inc., disclosed that, as of Dec. 31, 2011, they beneficially own 1,932,305 shares of common stock of GMX Resources, Inc., representing 3.2% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/HmdpuD About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. The Company's strategy is to significantly increase production, revenues and reinvest in increasing production. GMXR's goal is to grow and build shareholder value every day. The Company reported a net loss of $138.29 million on $96.52 million of oil and gas sales for the year ended Dec. 31, 2010, compared with a net loss of $181.08 million on $94.29 million of oil and gas sales during the prior year. The Company also reported a net loss of $129.53 million on $90.62 million of oil and gas sales for the nine months ended Sept. 30, 2011, compared with net income of $8.58 million on $69.34 million of oil and gas sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $575.98 million in total assets, $432.65 million in total liabilities and $143.32 million in total equity. * * * In November 2011, Moody's downgraded the rating of GMX Resources' corporate family rating (CFR) to 'Caa3' from 'Caa1', the Probability of Default (PDR) rating to 'Ca' from 'Caa1', and the Speculative Grade Liquidity (SGL) rating to SGL-4 from SGL-3. The outlook is negative. The downgrade of GMX's PDR and note ratings reflect the company's announcement that greater than 50% of the holders of the notes due 2019 have accepted a proposed exchange offer, which Moody's views as a distressed exchange. The lowering of the CFR and SGL ratings reflects Moody's expectation of potential liquidity issues through the first quarter of 2013, as well as elevated leverage following the issuance of at least $100 million of proposed secured notes under the exchange offer and a proposed $55 million volumetric production payment (VPP), both of which the company expects to be executed before the end of 2011. Moody's treats VPPs as debt in Moody's leverage calculations. The negative outlook reflects the potential for the CFR and note ratings to be lowered if liquidity deteriorates further. As reported by the TCR on Dec. 21, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on GMX Resources Inc. to 'SD' (selective default) from 'CC'. "We also lowered the company's issue-level ratings to 'D' from 'CC', reflecting its completion of an exchange offer for a portion of its $200 million 11.375% senior notes due 2019," S&P said. "The rating actions follow the company's announcement that it has completed the exchange offer for its 11.375% senior notes due 2019," said Standard & Poor's credit analyst Paul B. Harvey. "The exchange offer included $53 million principle of 11.375% senior notes that accepted an exchange of $1,000 principle for $750 principle of new 11% senior secured notes due 2017. We consider the completion of such an exchange, at a material discount to par, to be a distressed exchange and, as such, tantamount to a default under our criteria." GORDON PROPERTIES: Court Rejects Substantive Consolidation Bid -------------------------------------------------------------- Bankruptcy Judge Robert G. Mayer denied the motion of First Owners' Association of Forty Six Hundred Condominium, Inc., a condominium unit owner's association, to substantively consolidate the chapter 11 bankruptcy cases of Gordon Properties, LLC, and Condominium Services, Inc. "The businesses did not confuse people who dealt with them. This is especially true of the condominium association which had a different relationship with each one. CSI was its management company for more than 27 years. Gordon Properties was a unit owner. CSI's business extended beyond the condominium association and Gordon Properties. It also managed at least 18 other condominium associations. The distinction between the two debtors and their respective businesses was clear. Those dealing with them would not likely confuse the two entities and there is no evidence that any creditor thought that it was dealing with one when it was dealing with the other or that it was confused about the identity of the company with which it was dealing," Judge Mayer said. Post-bankruptcy, Judge Mayer further held, there are no accounts to unravel. There was no commingling of assets that must be sorted out or transactions to be avoided or reversed. There are no intercompany debts. Gordon Properties is funding the postpetition deficiencies of CSI, but not as loans. They are all capital contributions. No creditor is injured by this arrangement. The assets of CSI are not diminished by the reorganization effort or the litigation with the association. In its bankruptcy case, Gordon Properties scheduled four creditors, two secured and two unsecured. The condominium association, which Gordon Properties scheduled as a disputed secured creditor, filed a proof of claim asserting a secured claim for past due condominium fees of $315,673.36. The two unsecured creditors scheduled were both scheduled as disputed. One filed an unsecured claim for $237,755.40. According to its schedules, even if all the claims are allowed, Gordon Properties has net equity of about $9,600,000. Condominium Services filed its chapter 11 petition (Bankr. E.D. Va. 10-10581) on Jan. 26, 2010. It scheduled one creditor, the condominium association, with a disputed claim of $436,802.00. The association filed a proof of claim asserting a claim of $453,533.12. A second proof of claim was filed by the Internal Revenue Service for $1,955.45. According to its schedules, if both claims are allowed, it has a net deficit of about $426,900. CSI is wholly owned by Gordon Properties. The Debtors opposed the motion. The two cases were previously administratively consolidated. CSI and Gordon Properties trace their origins to Bryan Gordon. Shortly before his death in 1979, Mr. Gordon organized CSI as a property management company. After his death, it was operated by his estate until about 10 years ago when it became a wholly owned subsidiary of Gordon Properties. Mr. Gordon also owned many condominium units at the condominium. Upon his death they were devised to a trust for the benefit of his children and grandchildren. About twelve years ago, the trust terminated, Gordon Properties was organized and the condominium units were transferred to it. Gordon Properties is a limited liability company owned by Mr. Gordon's four grandchildren. CSI became its wholly owned subsidiary about two years after Gordon Properties was organized. The genesis of the association's claim is in its termination of CSI as its managing agent. The termination was not handled well. CSI asserted that its management contract could only be terminated by the condominium association's membership and not simply by the board of directors. CSI did not recognize the validity of the termination and continued to collect condominium fees, principally from Gordon Properties. In addition, the association claimed that CSI had failed to properly file a tax return resulting in a loss to it. Litigation ensued. In a suit in which the condominium association sought relief against both CSI and Gordon Properties, the state court found in favor of the condominium association against CSI, but against the condominium association and in favor of Gordon Properties which was dismissed from the case. The association's proof of claim in CSI's case is for the judgment it recovered against CSI in state court. The genesis of the association's claim against Gordon Properties is different. It arises from the manner in which the board of directors assessed condominium fees against the restaurant unit. After the board of directors terminated CSI as its managing agent, it determined that the manner in which the common expenses had been assessed against the restaurant unit for at least 20 years was incorrect. It sought to change the assessment formula, recalculate the prior assessments not barred by the statute of limitations, and collect them from Gordon Properties. The additional amount due was significant and litigation ensued. That matter was partially resolved by a judgment obtained by the association in the state court. The association's proof of claim in Gordon Properties' case is for the condominium fees claimed due. An objection to the association's proof of claim is set for trial later this month to resolve the remaining issues of the assessment. Judge Mayer noted that substantive consolidation would ensure that the association would be paid its judgment against CSI in full. There are substantial assets of Gordon Properties that would be available to achieve this. Without substantive consolidation, the association will only be paid to the extent that CSI remains in business and generates a profit. A copy of Judge Mayer's Feb. 8, 2012 Memorandum Opinion is available at http://is.gd/KjVrsWfrom Leagle.com. About Gordon Properties Alexandria, Va.-based Gordon Properties LLC owns 40 condominium units in a high-rise apartment building with both residential and commercial units and two commercial units adjacent to the high- rise building. Gordon Properties' ownership of these condos represents about a 20% interest in the Forty Six Hundred Condominium project -- http://foa4600.org/-- in Alexandria. Gordon Properties also owns one of the adjacent commercial units, a restaurant. Gordon Properties sought Chapter 11 protection (Bankr. E.D. Va. Case No. 09-18086) on Oct. 2, 2009, and is represented by Donald F. King, Esq., at Odin, Feldman & Pittleman PC in Fairfax, Va. The Debtor disclosed $11,149,458 in assets and $1,546,344 in liabilities. GUIDED THERAPEUTICS: Richard Blumberg Discloses 6.5% Equity Stake ----------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Richard P. Blumberg disclosed that, as of Dec. 31, 2011, he beneficially owns 3,575,881 shares of common stock of Guided Therapeutics, Inc., representing 6.5% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/3QBCDh About Guided Therapeutics Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP) -- http://www.guidedinc.com/-- is developing a rapid and painless test for the early detection of disease that leads to cervical cancer. The technology is designed to provide an objective result at the point of care, thereby improving the management of cervical disease. Unlike Pap and HPV tests, the device does not require a painful tissue sample and results are known immediately. GT has also entered into a partnership with Konica Minolta Opto to develop a non-invasive test for Barrett's Esophagus using the LightTouch technology platform. The Company reported a net loss of $2.84 million on $3.36 million of contract and grant revenue for the year ended Dec. 31, 2010, compared with a net loss of $6.21 million on $1.55 million of contract and grant revenue during the prior year. The Company also reported a net loss of $3.88 million on $2.70 million of service revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $2.56 million on $2.30 million of service revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $2.84 million in total assets, $5 million in total liabilities, and a $2.16 million total stockholders' deficit. As reported by the TCR on April 4, 2011, UHY LLP, in Atlanta, Georgia, noted that the Company's recurring losses from operations, accumulated deficit and lack of working capital raise substantial doubt about its ability to continue as a going concern. HAWAIIAN TELCOM: Moody's Rates $300MM Sr. Sec. Term Loan at 'B1' ---------------------------------------------------------------- Moody's Investors Service has assigned a B1 rating to Hawaiian Telcom Communications, Inc.'s proposed new $300 million senior secured term loan due 2017. Moody's has also affirmed the B1 Corporate Family Rating (CFR) to the company. The proceeds of the term loan's issuance will be largely used to refinance the existing term loan at Hawaiian Telcom. At the closing of the transaction, Moody's will withdraw the rating on the existing term loan. The outlook remains stable. Moody's has assigned this rating: Hawaiian Telcom Communications, Inc. -- $300m Senior Secured Term Loan -- B1, LGD3-36% RATINGS RATIONALE Hawaiian Telcom's B1 corporate family rating reflects its diverse base of recurring revenues, healthy market share, modest leverage and adequate cash flows. These positives are offset by the company's relatively small scale, the tough competition from cable triple-play bundled service and the long term challenges associated with wireless substitution. The B1 rating reflects Moody's view that Hawaiian Telcom will successfully deploy video services and stabilize its consumer base. The ratings incorporate a very narrow tolerance for operational missteps, particularly with respect to the company's IPTV rollout. "Hawaiian Telcom continues to make good progress since emerging from bankruptcy," commented Moody's Senior Vice President Dennis Saputo. "Management has restored the basic operating structure and stabilized the base. Now they must successfully roll out video services to shore up their customer base," Saputo continued. Hawaiian Telcom has a strong competitive position within the market for business services. The company's sophisticated data offerings, broad asset base and ILEC tradition for reliability appeal to enterprise customers. Hawaiian Telcom offers advanced data services, such as MPLS, Ethernet and VoIP, and plans to continue to enhance its offers. However, like many wireline telcos, Hawaiian Telcom is struggling to control its cost structure and improve productivity in order to remain competitive. Unlike its business product offerings, Hawaiian Telcom has historically had an inferior product lineup for residential customers. Cable competitors have gained significant market share with triple-play bundles. Hawaiian Telcom, forced to wait until bankruptcy exit to rollout video, will need to move aggressively to catch up. The company has started commercial deployment of its IPTV offering on Oahu in July 2011. The success of this product is critical to Hawaiian Telcom's future viability, as it will strengthen its competitive position and improve customer retention. The ratings for the debt instruments reflect both the overall probability of default of Hawaiian Telcom, to which Moody's has assigned a probability of default rating (PDR) of B2, and loss given default assessments. The Ba1 (LGD1 - 0%) rating of the $30 million senior 1st lien secured revolving credit facilities reflects its seniority of claim, its small size relative to the capital structure and its senior priority in right of payment ahead of the term loan creditors. The $300 million secured term loan is rated B1 (LGD3 - 36%), in line with the corporate family rating. Due to its priority treatment through the recent bankruptcy restructuring, Moody's ranks the company's unfunded pension obligation equally with the senior secured term loan. This places the preponderance of obligations at the same standing and results in a rating for the term loan in line with the overall B1 family rating. Hawaiian Telcom has very good liquidity with approximately $82 million in cash as of September 30, 2011 and a fully available $30 million revolver. Moody's anticipates that Hawaiian Telcom will maintain about $50 million in cash over the next 12-18 months and will not draw upon the revolver over that timeframe. Moody's could lower Hawaiian Telcom's ratings if leverage were to trend toward 4.0x (Moody's adjusted) and free cash flow were to be negative, both on a sustained basis. Additionally, downward rating action would result from operational missteps, particularly related to the company's video services rollout. If service rollout was unsuccessful, as evidenced by high churn or low penetration, downward ratings action could occur. Moody's could raise Hawaiian Telcom's ratings if leverage were to trend toward 2.75x and free-cash-flow to debt were to reach the mid-single-digit percentage range. Please see ratings tab on the issuer page on www.moodys.com for the last credit rating action and the rating history. The principal methodology used in rating Hawaiian Telcom was the Global Telecommunications Industry Methodology, published December 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Hawaiian Telcom is a telecommunications provider in the state of Hawaii with approximately 422,000 access lines and 102,000 high speed internet customers on the islands of Oahu, Maui, Hawaii, Kauai, Molokai and Lanai. For the twelve months ended 9/30/11, Hawaiian Telcom generated $396 million in revenues. HCA INC: To Sell $1.3 Billion of 5.875% Senior Secured Notes ------------------------------------------------------------ HCA Inc. filed with the U.S. Securities and Exchange Commission a free writing prospectus relating to its offer to sell $1,350,000,000 of 5.875% senior secured notes due 2022. The Notes will mature on March 15, 2022. Joint Book-Running Managers for the offering are: Goldman, Sachs & Co. Barclays Capital Inc. Citigroup Global Markets Inc. J.P. Morgan Securities LLC Merrill Lynch, Pierce, Fenner & Smith Incorporated Credit Suisse Securities (USA) LLC Deutsche Bank Securities Inc. Morgan Stanley & Co. LLC Wells Fargo Securities, LLC Credit Agricole Securities (USA) Inc., RBC Capital Markets, LLC, and SunTrust Robinson Humphrey, Inc., are acting as co-managers for the offering. The Company estimates that its net proceeds from this offering, after deducting underwriter discounts and commissions and estimated offering expenses, will be approximately $1,333,000,000. The Company intends to use the net proceeds from the notes offered for general corporate purposes, which may include the repayment, redemption or repurchase of the Company's existing indebtedness or the financing of the special dividend payable in February 2012 to shareholders of HCA Holdings, Inc. A full-text copy of the prospectus is available for free at: http://is.gd/SzH0Sn About HCA Inc. Headquartered in Nashville, Tennessee, HCA is the nation's largest acute care hospital company with 162 hospitals and 104 freestanding surgery centers (including eight hospitals and eight freestanding surgery centers that are accounted for using the equity method) as of Sept. 30, 2010. For the 12 months ended Sept. 30, 2010, the company recognized revenue in excess of $30 billion. * * * In May 2011, Moody's Investors Service upgraded the Corporate Family and Probability of Default Ratings of HCA Inc. (HCA) to B1 from B2. "The upgrade of HCA's rating reflects the considerable progress the company has made in improving financial metrics and managing the company's maturity profile since the November 2006 LBO," said Dean Diaz, a Moody's Senior Credit Officer. "While the funding of distributions to shareholders at the end of 2010 increased debt levels, the growth in EBITDA and debt repayment since the LBO have improved leverage metrics considerably from the high levels seen just after the company went private," continued Diaz. As reported by the Troubled Company Reporter on March 14, 2011, Moody's Investors Service commented that the completion of the IPO by HCA Holdings, Inc., has no immediate impact on the company's B2 Corporate Family Rating. The outlook for the ratings remains positive. While Moody's believes that the completion of the IPO is a credit positive since proceeds are expected to be used to repay outstanding debt, the estimated $2.6 billion of proceeds to the company won't meaningfully reduce HCA's $28.2 billion debt load. In the March 16, 2011, edition of the TCR, Fitch Ratings has upgraded its ratings for HCA Inc. and HCA Holdings Inc., including the companies' Issuer Default Ratings which were upgraded to 'B+' from 'B'. The Rating Outlook is revised to Stable from Positive. The ratings apply to approximately $28.2 billion in debt outstanding at Dec. 31, 2010. Fitch noted that HCA has made significant progress in reducing debt leverage since it was taken private in 2006 in a LBO which added $17 billion to the company's debt balance; at Dec. 31, 2006, immediately post the LBO, debt-to- EBITDA was 6.7x. Most of the reduction in debt leverage over the past four years was accomplished through growth in EBITDA, which Fitch calculates has expanded by $1.7 billion or 40% to $5.9 billion for 2010 versus $4.2 billion in 2006. Although the company did not undertake a significant organizational restructuring post the LBO, management has nevertheless been successful in growing EBITDA and significantly expanding discretionary free cash flow (FCF). Fitch believes this was accomplished through various operational initiatives, including expansion of profitable service lines and the divestiture of some under performing hospitals, as well as the generally resilient operating trend of the for-profit hospital industry during the recent economic recession despite the pressure of increased levels of uncompensated care and generally weak organic patient volume trends. HEARTHSTONE HOMES: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Hearthstone Homes, Inc. 810 N. 96th Street, 3rd Floor Omaha, NE 68114 Tel: (402) 339-0150 Bankruptcy Case No.: 12-80236 Chapter 11 Petition Date: February 7, 2012 Court: U.S. Bankruptcy Court District of Nebraska (Omaha Office) Judge: Timothy J. Mahoney Debtor's Counsel: Robert F. Craig, Esq. ROBERT F. CRAIG, P.C. 1321 Jones Street Omaha, NE 68102 Tel: (402) 408-6004 Fax: (402) 408-6001 E-mail: robert@craiglaw.org Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by John J. Smith, president. HERCULES OFFSHORE: Vanguard Group Discloses 4.4% Equity Stake ------------------------------------------------------------- The Vanguard Group, Inc., disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Dec. 31, 2011, it beneficially owns 6,072,975 shares of common stock of Hercules Offshore Inc. representing 4.40% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/0miRWq About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. The Company reported a net loss of $134.59 million on $657.48 million of revenue for the year ended Dec. 31, 2010, compared with a net loss of $91.73 million on $742.85 million of revenue during the prior year. The Company also reported a net loss of $54.64 million on $492.57 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $50 million on $460.06 million of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $2.05 billion in total assets, $1.12 billion in total liabilities, and $928.65 million in total stockholders' equity. * * * The Troubled Company Reporter said on Nov. 17, 2010, Moody's Investors Service downgraded the Corporate Family Rating of Hercules Offshore Inc. and the Probability of Default Rating to Caa1 from B2. Moody's also downgraded Hercules' 10.5% senior secured notes due 2017, its senior secured revolving credit facility due 2012, and its senior secured term loan B due 2013, all to Caa1 with LGD3, 45%. The outlook remains negative. "The inability of Hercules to generate meaningful free cash flow despite limited reinvestment in its aging fleet of rigs is cause for concern," commented Stuart Miller, Moody's Senior Analyst. "Without a significant de-leveraging of its balance sheet, Hercules is following a path that could lead to financial hardship at the first sign of a market softening." Hercules' Caa1 CFR rating reflects its highly leveraged balance sheet and limited ability to generate free cash flow. The Caa1 rating on the senior secured notes reflects their pari passu secured position in Hercules' capital structure relative to the senior secured credit facilities. HORIZON LINES: Credit Suisse Discloses 4.1% Equity Stake -------------------------------------------------------- Credit Suisse disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of the calendar year 2011, it beneficially owns 94,000 shares of common stock of Horizon Lines, Inc., representing 4.06% of the shares outstanding. A full-text copy of the filing is available at http://is.gd/tfq9BS About Horizon Lines Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the nation's leading domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. The Company provides express trans-Pacific service between the U.S. West Coast and the ports of Ningbo and Shanghai in China, manages a domestic and overseas service partner network and provides integrated, reliable and cost competitive logistics solutions. The Company's balance sheet at Sept. 25, 2011, showed $677.4 million in total assets, $801.7 million in total liabilities, and a stockholders' deficit of $124.3 million. Ernst & Young LLP, in Charlotte, North Carolina, expressed substantial doubt Horizon Lines' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 26, 2010. The independent auditors noted that there is uncertainty that Horizon Lines will remain in compliance with certain debt covenants throughout 2011 and will be able to cure the acceleration clause contained in the convertible notes. "The Company believes the Oct. 5, 2011 refinancing transactions more fully described in Note 18 to these financial statements have resolved the concern as to compliance with debt covenants throughout the remainder of 2011," the Company said in the filing. "In addition, the Company believes it will be in compliance with its debt covenants through 2012." Refinancing The Company was not in compliance with the maximum senior secured leverage ratio and the minimum interest coverage ratio under its Senior Credit Facility at the close of its third fiscal quarter ended Sept. 25, 2011. Non-compliance with these financial covenants constituted an event of default, which could have resulted in acceleration of the maturity. None of the indebtedness under the Senior Credit Facility or Notes was accelerated prior to the completion of a comprehensive refinancing on Oct. 5, 2011. The Senior Credit Facility and 99.3% of the 4.25% Convertible Senior Notes were repaid as part of the refinancing. In addition, as a result of the completion of the refinancing, the short-term obligations under the Senior Credit Facility, the Notes and the Bridge Loan have been classified as long-term debt. As a result of the efforts to refinance the Company's debt and the 2011 amendments to the Senior Credit Facility, the Company paid $17.3 million in financing costs and recorded a loss on modification of debt of $0.6 million during 2011. * * * As reported by the TCR on Aug. 26, 2011, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Horizon Lines Inc. to 'SD' from 'CCC'. The rating action on Horizon Lines follow the company's decision to defer the interest payment on its $330 million senior convertible notes due August 2012, exercising the 30-day grace period. "Under our criteria, we view failure to make an interest payment within five business days after the due date for payment a default, regardless of the length of the grace period contained in an indenture," said Standard & Poor's credit analyst Funmi Afonja. HOSTESS BRANDS: CEO Could Get $2MM Bonus Under Employment Deal -------------------------------------------------------------- Hilary Russ at Bankruptcy Law360 reports that Hostess Brands Inc. CEO Brian J. Driscoll, who devised the Debtor's business restructuring plan, had considered abandoning Hostess unless he was assured that he could receive a $2 million payment in the future under a non-compete agreement, according to a court filing Tuesday. Mr. Driscoll is also poised to receive a $1.5 million salary, annual short-term cash incentive awards and a long-term performance-based bump of $2 million, according to the filing in New York bankruptcy court obtained by Law360. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. 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 bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy 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. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. IMPERIAL INDUSTRIES: Charles Cheever Discloses 6.9% Equity Stake ---------------------------------------------------------------- Charles E. Cheever, III, disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Dec. 29, 2011, he beneficially owns 175,499 shares of common stock of Imperial Industries, Inc., representing 6.9% of the shares outstanding. As previously reported by the TCR on May 16, 2011, Mr. Cheever disclosed beneficial ownership of 149,311 shares. A full-text copy of the amended filing is available for free at http://is.gd/K0GxIb About Imperial Industries Pompano Beach, Fla.-based Imperial Industries, Inc. (OTC BB: IPII) -- http://www.imperialindustries.com/-- manufactures and distributes stucco, plaster and roofing products to building materials dealers, contractors and others through its subsidiary, Premix-Marbletite Manufacturing Co. The Company sells its products primarily in the State of Florida and to a certain extent the rest of the Southeastern United States. The Company reported a net loss of $1.23 million on $8.23 million of net sales for the year ended Dec. 31, 2010, compared with a net loss of $5.30 million on $8.63 million of net sales during the prior year. The Company also reported a net loss of $1.12 million on $5.63 million of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $1.45 million on $6.46 million of net sales for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $5.45 million in total assets, $7.58 million in total liabilities, and a $2.13 million total stockholders' deficit. As reported by the TCR on April 1, 2011, Grant Thornton LLP, in Fort Lauderdale, Fla., expressed substantial doubt about the Company's ability to continue as a going concern. Grant Thornton noted that the industry in which the Company is operating has been impacted by a number of factors and accordingly, the Company has experienced a significant reduction in its sales volume. Grant Thornton added that for the year ended Dec. 31, 2010, the Company has a loss from continuing operations of approximately $596,000. ISTAR FINANCIAL: Vanguard Group Discloses 5.2% Equity Stake ----------------------------------------------------------- The Vanguard Group, Inc., disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Dec. 31, 2011, it beneficially owns 4,233,509 shares of common stock of iStar Financial Inc representing 5.16% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/Q4Sa9W About iStar Financial New York-based iStar Financial Inc. (NYSE: SFI) provides custom- tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust, provides innovative and value added financing solutions to its customers. The Company's balance sheet at Sept. 30, 2011, showed $7.75 billion in total assets, $6.14 billion in total liabilities and $1.60 million in total equity. * * * As reported by the TCR on March 29, 2011, Fitch Ratings has upgraded the Issuer Default Rating to 'B-' from 'C'. The upgrade of iStar's IDR is based on the improved liquidity profile of the company, pro forma for the new senior secured credit agreement (the new financing) that extends certain of the company's debt maturities, relieving the overhang of significant secured debt maturities in June 2011. In July 2010, Standard & Poor's Ratings Services lowered its long- term counterparty credit rating on iStar Financial to 'CCC' from 'B-'. The outlook is negative. iStar's limited funding flexibility and the severe credit quality deterioration in its loan portfolio continue to put negative pressure on the rating, S&P said. As reported by the Troubled Company Reporter on March 22, 2011, Standard & Poor's said that it raised its counterparty credit rating on iStar Financial Inc. to 'B+' from 'CCC' and removed it from CreditWatch where it was placed with positive implications on Feb. 23. The outlook is stable. "The upgrade reflects the company's closing of a $2.95 billion senior secured credit facility, which it will use to refinance the company's existing secured bank facilities and repay a portion of the company's unsecured debt," said Standard & Poor's credit analyst Jeffrey Zaun. If S&P's analysis of the new secured facility indicates 100% or more collateral coverage, S&P will rate the issue 'BB-'. If S&P's analysis of collateral indicates less than 100% coverage, S&P will rate the issue 'B+'. JAMES RIVER: Vanguard Group Discloses 5.2% Equity Stake ------------------------------------------------------- The Vanguard Group, Inc., disclosed in a Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Dec. 31, 2011, it beneficially owns 1,844,974 shares of common stock of James River Coal Co representing 5.17% of the shares outstanding. A full-text copy of the filing is available at http://is.gd/nvJsDw About James River Headquartered in Richmond, Virginia, James River Coal Company (NasdaqGM: JRCC) -- http://www.jamesrivercoal.com/-- mines, processes and sells bituminous steam and industrial-grade coal primarily to electric utility companies and industrial customers. The company's mining operations are managed through six operating subsidiaries located throughout eastern Kentucky and in southern Indiana. The Company also reported a net loss of $10.54 million on $820.47 million of total revenue for the nine months ended Sept. 30, 2011, compared with net income of $52.29 million on $539.06 million of total revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.38 billion in total assets, $929.56 million in total liabilities, and $451.26 million in total shareholders' equity. * * * James River carries a 'B' corporate credit rating from Standard & Poor's Ratings Services, and 'B3' corporate family rating from Moody's Investors Service. As reported by the TCR on March 25, 2011, Moody's Investors Service upgraded James River Coal Company's Corporate Family Rating to 'B3' from 'Caa2'. The rating upgrade reflects post- acquisition potential for significant increase in JRCC's metallurgical coal production, increase in operational diversity within Central Appalachia, and greater access to export markets. The S&P corporate rating was upgraded from 'B-' in March 2011. "The upgrade reflects S&P's view that the IRP acquisition provides James River Coal exposure to the attractive metallurgical coal market," said Standard & Poor's credit analyst Fred Ferraro. "The acquisition also adds management experience in overseas marketing, and expands the company's reserve life. Furthermore, S&P expects that it will be funded in a way that is consistent with the current capital structure so as to maintain the current credit metrics." LONE PINE: S&P Assigns 'B' Long-Term Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' long-term corporate credit rating to Calgary, Alta.-based Lone Pine Resources Canada Ltd. The outlook is stable. "At the same time, Standard & Poor's assigned its 'B-' issue-level rating and '5' recovery rating to the company's proposed $200 million senior unsecured notes due 2017. Management plans to use proceeds to pay down the amount outstanding on its C$500 million secured credit facility," S&P said. "The ratings on Lone Pine reflects what we view as the company's limited and small reserve base, meaningful exposure to low natural gas prices, and execution risks in operating as a stand-alone company while shifting to a liquid-focused growth strategy," said Standard & Poor's credit analyst Aniki Saha-Yannopoulos. "In addition, we base the ratings on the company's operations in a highly cyclical, capital-intensive, and competitive industry. The ratings also reflect Lone Pine's growth prospects, undeveloped acreage, adequate liquidity, and profitability. As of Sept. 30, 2012, pro forma for the notes offering, we expect the company will have about C$317 million in adjusted debt, which includes operating lease adjustments and asset-retirement obligations," S&P said. "Lone Pine's geographic diversity is limited. As of 2011, the company had a small reserve base of approximately 401 billion of cubic feet equivalent (gross, 74% natural gas); production for 2011 was about 94 million cubic feet equivalent per day. Lone Pine's operations focus mostly in two regions in Alberta -- the Evi and Deep Basin, which includes the Nikanassin play. Currently, almost 70% and 77% of reserves and production are from these two plays. The company's reserve life is 11.7 years and proved developed reserve life at 5.6 years, which is in line with those of its land-focused peers," S&P said. "We view as positive the company's plan to increase its liquids production in the current weak natural gas price environment. Natural gas accounts for about 78% of the company's production. Lone Pine expects Evi production to drive most of its liquids production in the next two years and we expect oil and liquid to be a larger share of overall production. The company plans to focus its growth capital expenditure in the Evi light oil play; almost 80% of its 2012 capex budget of $200 million-US$220 million will be for Evi. Although we believe there is some execution risk associated with the shift to liquids-focused growth, overall profitability could improve if Lone Pine can increase its liquid production. Given drilling inventory levels, there appears to be good visibility to the company's reserves and production growth associated with its Evi asset. We expect the company to hit the cash flow assumptions provided if it achieves its targeted liquids production," S&P said. "The stable outlook reflects Standard & Poor's expectation that Lone Pine will continue focusing on organic, drill-bit related reserves and production growth, which we expect will improve its exposure to liquids production. We expect that the company will not generate any free cash flow after funding its capital expenditures through 2013 and will fund its cash flow shortfall through revolver borrowings. The outlook also incorporates our view that Lone Pine's financial metrics will not materially deteriorate in the next 12-18 months, since its cash flow will improve because of increased liquids production. Given the company's size and operational plans, there is little likelihood of an upgrade during this period of expansion, but we would consider a positive action if it completes these plans successfully. A negative rating action could occur if Lone Pine cannot achieve internal reserves and production growth, its operational economics worsen, or its debt-to-EBITDAX increases above 4.5x due to operational setbacks or shareholder-friendly actions," S&P said. LSP ENERGY: Files for Chapter 11 to Sell Miss. Natural Gas Plant ---------------------------------------------------------------- LSP Energy Limited Partnership, the owner of a natural-gas-fired power plant in Mississippi, has sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10460) in Delaware. The Debtors' electric generation facility consists of three-gas fired combined cycle electric generating units with a total capacity of 837 megawatts. The facility sits on a 58-acre parcel of real property in Batesville, Mississippi. Due to an interruption in the operation of the facility's Unit 1 combustion turbine, caused by a mechanical failure that began in May 2011, LSP has been faced with a substantial repair bill for the damaged Unit as well as a reduction in revenues that is on- going. A botched repair job has forced the Unit 1 outage to continue through 2011 and into 2012. Confident that the cause of the problem with Unit 1 has been conclusively identified, Siemens Energy, Inc. is currently replacing the faulty refurbished rotor with a brand new rotor. As a result, Unit 1 is expected to go back on line in March 2012, at which time the Facility is anticipating availability at or near full capacity. Thomas Favinger, president of the Debtors, says in a court filing, "Although LSP has sufficient liquidity to fund its operations in the near term, it lacks sufficient liquidity to continue funding its operations and also fully service its secured obligations going forward. In order to address its liquidity problem, LSP was forced to file bankruptcy under chapter 11 of the Bankruptcy Code." LSP says that while in Chapter 11, it will complete an orderly sale of its assets or the ownership interests in LSP for the benefit of all stakeholders. As of the Petition Date, the Debtors owe $35 million in principal amount under certain Series C Bonds and $176 million in principal amount under Series D Bonds. They also owe $3.9 million under a working capital facility. A bankruptcy court hearing is scheduled for Feb. 13. 8-Month Sale Process Prior to the Petition Date, the Debtors, the DIP Lenders and certain bondholders who are part of an informal group represented by Bracewell & Giuliani LLP, negotiated and entered into a binding Restructuring Term Sheet, dated Jan. 31, 2012. The RTS sets certain deadlines and milestones for the sale process. Upon the Petition Date the Debtors will immediately begin the marketing process for the sale of the Debtors assets (and interests in the Debtors). The Debtors have agreed in the RTS to obtain a binding purchase and sale agreement not later than June 30, 2012. The Debtors have also agreed to close on such sale not later than Aug. 30, 2012 (subject to specified extensions in the event additional time is needed to obtain confirmation of a plan or obtain other necessary approvals). LSP anticipates filing a motion to approve sale procedures necessary to market and sell the Facility, either through a sale of LSP's assets or through a sale of the equity interests in one or more of the Debtors. Because of the highly regulated nature of LSP's assets and operations, LSP envisions that it will take at least six to eight months to complete the sale. Terms of Restructuring Reached The RTS sets forth the terms of a financing of up to $20 million to be provided by Transamerica Life Insurance Company and John Hancock Life Insurance Company (USA). Cantor Fitzgerald is the DIP agent. The standby delayed draw term loan facility in a maximum aggregate principal amount of up to $20,000,000. The outstanding principal amount of the DIP Loans will bear interest at a rate of 8.160% per annum, payable monthly in arrears and on the Maturity Date. The DIP financing will mature Aug. 30, 2012, or earlier if the sale milestones are not met. IQOR HOLDINGS: S&P Lowers Corporate Credit Rating to 'B-' --------------------------------------------------------- Standard & Poor' Ratings Services lowered its corporate credit rating on credit collections provider iQor Holdings Inc. to 'B-' from 'B'. The outlook is developing. "At the same time, we lowered our rating on the first-lien term loan to 'B-' from 'B' and the second-lien loan to 'CCC' from 'CCC+'," S&P said. "The downgrade reflects iQor's tight headroom of about 5% under the leverage covenant in the company's secured term loans," said Standard & Poor's credit analyst Catherine Cosentino, "and our expectation that this covenant will remain tight through 2012, even with recent amendments to the credit facility." "Specifically, we project that if the company can't increase its rolling-12-month EBITDA by about 10% over the next few quarters from the 12-month reported results for the third quarter of 2011, it may not remain in compliance with the covenant beyond mid-2012, when it tightens from 4.75x to 4.25x." "We currently assume some volume growth in 2012, which will translate into revenue and EBITDA growth; however, the company's results have been volatile in recent quarters and this contributes to our view of the risk of a covenant default," S&P said. "The outlook is developing. We could lower the ratings further if a near-term covenant default became more likely; for example, if EBITDA were to remain flat or declined in early 2012 from the levels reported in recent quarters. Conversely, if the company addressed the covenant issue through at least year-end 2013 via an amendment or refinancing, we could raise the ratings by one notch," S&P said. "An alternative scenario to an upgrade, but one we consider less likely, would be if the company experienced substantial growth in its EBITDA and free operating cash flow such that cushion under the leverage covenant grew to 15% or greater, including future step-downs," S&P said. ISAACSON STRUCTURAL: Wants Until Tomorrow to File Cash Use Motion ----------------------------------------------------------------- Isaacson Steel, Inc. and Isaacson Structural Steel, Inc., on Feb. 7, 2012, filed a motion asking the U.S. Bankruptcy Court for the District of New Hampshire to extend until Feb. 14, 2012, the time to file motion for continued use of cash collateral. On Feb. 6, according to the Debtors' case docket, the Court issued an order granting the Debtors' request for extension of order on fourth motion for order authorizing use of cash collateral and provision of adequate protection. About Isaacson Structural Steel Based in Berlin, New Hampshire, Isaacson Structural Steel, Inc., filed for Chapter 11 bankruptcy (Bankr. D. N.H. Case No. 11-12416) on June 22, 2011. Bankruptcy Judge J. Michael Deasy presides over the case. Isaacson Structural Steel estimated both assets and debts of $10 million to $50 million. The petition was signed by Arnold P. Hanson, Jr., president. An official committee of unsecured creditors has been appointed in Isaacson Structural Steel's case. Nixon Peabody LLP represents the Committee. A bankruptcy petition was also filed for Isaacson Steel, Inc. (Bankr. D. N.H. Case No. 11-12415) on June 22, 2011, estimating assets and debts of $1 million to $10 million. The petition was signed by Arnold P. Hanson, Jr., president. William S. Gannon, Esq., also represents Isaacson Steel. LANCASTER MARITIME: Case Summary & 50 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Lancaster Maritime Corp. Trust Company Complex Ajeltake Road Ajeltake Island Majuro, MH 96960 Marshall Island Bankruptcy Case No.: 12-22294 Chapter 11 Petition Date: February 7, 2012 Court: U.S. Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Matthew K. Kelsey, Esq. GIBSON, DUNN & CRUTCHER, LLP 200 Park Avenue New York, NY 10166 Tel: (212) 351-2615 Fax: (212) 351-6351 E-mail: mkelsey@gibsondunn.com Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $100,000,001 to $500,000,000 The petition was signed by Ferdinand V. Lepere, executive vice president and chief financial officer. Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- Chatham Maritime Corp. 12-22295 Sherwood Shipping Corp. 12-22296 Debtor's List of Its 50 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Chengxi Shipyard Trade Debt $1,612,498 No.1 Hengshan Road Jiangsu, China Aboitiz Jiebsen Bulk Transport Trade Debt $1,410,630 Corp. 2nd Floor Harbour Center II Railroad & Chicago Streets Port Area Manila, Philippines Lloyd?s Register Trade Debt $610,293 North America, Inc. P.O. Box 201648 Houston, TX 77216-1648 Secure Maritime Services LLC Trade Debt $549,243 P.O. Box 502090 Office 419, City Bay Business Centre, Abu Hail Dubai International Paint Trade Debt $506,718 P.O. Box 330 Palos Park, IL 60464 C.F. Sharp Bareboat Corp. Trade Debt $411,872 290-292 Casa Rocha Building General Luna Street Manila, Philippines Barwil Unitor Ships Service Trade Debt $275,082 P.O. Box 951756 Dallas, TX 75395-1756 Wartsila North America, Inc. Trade Debt $272,804 16330 Air Center Boulevard Houston, TX 77032 Intermodal Shipping Trade Debt $270,360 Ground Floor Casa Maritima 651 General Luna Street Intramuros Manila, Philippines Merchant Shipping Trade Debt $268,232 1st Floor, Sharaf Building P.O. Box 2939 Karama, Dubai, UAE Kristensons-Petroleum Inc. Trade Debt $256,898 128 Brd Street, 2nd Floor Red Bank, NJ 07701 Turbo Desiel Engineering Corp Trade Debt $254,864 Room 1405, Longzhu Plaza 2123 Pudong Avenue Shanghai, China IHI Marine Co. Ltd. Trade Debt $221,070 Golten?s Korea Trade Debt $206,962 Gugao Marine Service Co Trade Debt $199,205 Clipperoil Marine Fuels Trade Debt $174,740 Latin American Shipping Agencia Trade Debt $162,183 Fuji Trading Co Ltd. ? Kobe Trade Debt $159,976 Telemar USA LLC Trade Debt $151,575 Cross Pacific SCL Trade Debt $151,538 Total Lubrifiants Trade Debt $149,003 Boyd Steamship Corp Trade Debt $147,875 Navieras Y Consignacions Trade Debt $147,363 Seven Seas Trade Debt $147,233 Bongam International Co Ltd Trade Debt $142,078 Jiangyin Gowin Marine & Trading Trade Debt $140,134 Maylon Ports & Marine Services Ltd Trade Debt $125,513 Panasia Marine (Tankers) PTE Trade Debt $121,752 Alpha Chartering Trade Debt $120,641 Lloyd Sudamericano CA Trade Debt $115,129 Top Genius Marine Equipments Co. Trade Debt $114,665 National Shipping & Trade Debt $111,463 Marine Services Agencias Maritimas Agental Ltda Trade Debt $111,166 Viking Life0saving Equipment Trade Debt $110,184 Man Diesel SA-France Trade Debt $107,015 Conhira CO Ltd Trade Debt $102,756 Kongs Berg Maritime Trade Debt $102,000 Eurochart Trade Debt $100,330 Revelle Shipping Agency Inc Trade Debt $91,418 Aicom Ltd Trade Debt $86,138 Logistec Trade Debt $84,834 Golden Sun Marine Service Trade Debt $81,610 Ganglong Marine Services Trade Debt $79,507 Brokmar Trade Debt $79,032 Van West-Holland B.V. Trade Debt $76,941 BBT Tradeships FTL Trade Debt $75,382 RG Shipping International Trade Debt $72,863 National Shipping, Dubai Trade Debt $71,683 Joachim Grieg Co. Trade Debt $71,310 PI Marine (Asia) PTE Trade Debt $71,261 LEVEL 3: Incurs $163 Million Net Loss in Fourth Quarter ------------------------------------------------------- Level 3 Communications, Inc., reported a net loss of $163 million on $1.57 billion of revenue for the three months ended Dec. 31, 2011, compared with a net loss of $52 million on $904 million of revenue for the same period during the prior year. The Company reported a net loss of $756 million on $4.33 million of revenue for the year ended Dec. 31, 2011, compared with a net loss of $622 million on $3.59 billion of revenue during the previous year. Level 3's balance sheet at Dec. 31, 2011, showed $13.20 billion in total assets, $12.01 billion in total liabilities and $1.19 billion in stockholders' equity. "The company finished 2011 on a strong note, with Level 3 growing both Core Network Services revenue and Adjusted EBITDA and stable performance from the Global Crossing standalone business," said James Crowe, CEO of Level 3. "In particular, GC Impsat's results showed strong quarterly and year-over-year growth. We are pleased with the progress we made over the course of the year, significantly expanding the scope of our business through the acquisition of Global Crossing, reducing leverage and positioning the company for the future." A full-text copy of the press release is available for free at: http://is.gd/hOc3jK About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. Level 3 Communications carries a 'Caa1' corporate family rating, and 'Caa2' probability of default rating, with negative outlook from Moody's, a 'B-' issuer default rating from Fitch, and 'B-' long term issuer credit ratings from Standard & Poor's. LPATH INC: Marathon Capital Ceases to Hold 5% Equity Stake ---------------------------------------------------------- Marathon Capital Management, LLC, disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Feb. 3, 2012, it beneficially owns 2,644,197 shares of common stock of Lpath Inc. representing less than 5% of the shares outstanding. As previously reported by the TCR on Feb. 6, 2012, Marathon Capital disclosed beneficial ownership of 3,035,197 shares. A full-text copy of the amended filing is available for free at http://is.gd/zngZw7 About Lpath, Inc. San Diego, Calif.-based Lpath, Inc. is a biotechnology company focused on the discovery and development of lipidomic-based therapeutics, an emerging field of medical science whereby bioactive lipids are targeted to treat human diseases. The Company reported a net loss of $4.60 million on $7.83 million of total revenues for the year ended Dec. 31, 2010, compared with net income of $3.98 million on $11.91 million of total revenues during the prior year. As reported by the TCR on March 28, 2011, Moss Adams LLP, in San Diego, Calif., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements at the end of 2009. The independent auditors noted that the Company had incurred significant cash losses from operations since inception and expects to continue to incur cash losses from operations in 2010 and beyond. In its audit report for 2010, the auditor did not issue a going concern qualification. The Company's balance sheet at Sept. 30, 2011, showed $20.04 million in total assets, $15.61 million in total liabilities, and $4.42 million in total stockholders' equity. LYMAN LUMBER: Wants to Employ Eau Claire as Realtor --------------------------------------------------- Lyman Holding Company, et al., seek permission from the U.S. Bankruptcy Court for the District of Minnesota to employ Eau Claire Realty, Inc., to represent or assist them in marketing, locating a buyer for, and negotiating the sale of real property located at Lot 34, Shorewood Heights, City of Eau Claire, Wisconsin. The Debtors agreed to the terms of a listing agreement with ECR on Jan. 23, 2012. Under the listing agreement, ECR will receive a 6% commission from the sale, of which 40% may be paid to a buyer's agent. The Debtors have neither incurred nor paid any fees or expenses to ERC to date. David F. Suchla, broker/owner/president of Eau Claire Realty, Inc., attests to the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Court. About Lyman Lumber Lyman Lumber Company sells building supplies, such as framing beams, roofing materials, siding and drywall to residential builders. The 113-year old company and several affiliates sought Chapter 11 petition (Bankr. D. Minn. Lead Case No. 11-45190) on Aug. 4, 2011. Judge Dennis O'Brien presides over the cases. Lyman Lumber estimated $50 million to $100 million in assets and $100 million to $500 million in debts. The petition was signed by James E. Hurd, president and chief executive officer. The affiliates that filed for Chapter 11 are: Lyman Holding Company; Automated Building Components, Inc.; Building Material Wholesalers; Carpentry Contractors Corp.; Construction Mortgage Investors Co.; Lyman Development Co.; Lyman Lumber of Wisconsin, Inc.; Lyman properties LLC; Mid-America Cedar, Inc.; Woodinville Lumber, Inc.; and Woodinville Construction Services LLC. Cynthia A. Moyer, Esq., Douglas W. Kassebaum, Esq., James L. Baillie, Esq., and Sarah M. Gibbs, Esq., at Fredrikson & Bryon, P.A., serve as bankruptcy counsel. BGA Management, LLC d/b/a Alliance Management, developed and executed a sale process and marketing strategy for the Debtors' assets. The Official Committee of Unsecured Creditors of Lyman Lumber Company tapped Fafinsky, Mark & Johnson, P.A., as its counsel. Alliance Management is the financial and turnaround consultant. When they filed for bankruptcy, the Debtors had in hand a term sheet with SP Asset Management, LLC, a unit of Steel Partners Holdings L.P., to serve as stalking horse bidder for the assets of the Debtors. New York City-based Steel Partners is a diversified holding company that owns and operates businesses in a variety of industries. MAQ MANAGEMENT: Stipulation Approved on Adequate Protection ----------------------------------------------------------- Judge Erik P. Kimball has approved a second stipulated order under which MAQ Management, Inc., will continue to pay adequate protection to First State Bank of Arcadia pursuant to the terms of the Stipulated Order. A further hearing on the Motion is scheduled to be heard on March 1, 2012, at 2:30 p.m. Arcadia will not seek relief from stay before March 1, 2012, provided Debtor has not defaulted under the terms of the Stipulated Order. About MAQ Management Based in Boca Raton, Florida, MAQ Management, Inc., and three other affiliates serve as commercial landlords to convenience stores and gas stations in primarily in South Florida. They filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Cases No. 11-26571 to 11-26574) on June 15, 2011. Affiliates that sought Chapter 11 protection are Super Stop Petroleum, Inc., Super Stop Petroleum I, Inc., and Super Stop Petroleum IV, Inc. Judge Erik P. Kimball presides over the case. MAQ Management estimated assets and debts of $1 million to $10 million. Super Stop estimated assets and debts of $10 million to $50 million. The petitions were signed by Mahammad A. Qureshi, CEO. Richard J. McIntyre, Esq., and Chirstopher C. Todd, Esq., at McIntyre, Panzarella, Thanasides, Hoffman, Bringgold & Todd, P.L., in Tampa, Florida, serve the Debtors as substitute counsel. The U.S. Trustee announced that until further notice, it will not appoint a committee of creditors for the Debtors' cases. stores and gas stations in primarily in South Florida. As reported in the TCR on Oct. 21, 2011, MAQ Management, Inc., et al., filed their Consolidated Chapter 11 Plan of Reorganization, with the U.S. Bankruptcy Court for the Southern District of Florida, in compliance with the Court's Order. MAQ MANAGEMENT: Prohibited From Using BB&T's Cash Collateral ------------------------------------------------------------ Judge Erik P. Kimball has granted the motion of Branch Banking and Trust Company (BB&T) to prohibit MAQ Management, Inc., from using BB&T's cash collateral. Judge Kimball orders the Debtors to immediately provide BB&T with copies of any and all leases that are in effect or have been in effect since the Petition Date, including any leases between the Debtors and Super Stop Express and any leases between Super Stop Express and any other party that in any way relate to any of the properties upon which BB&T claims a security interest. In addition, the Debtors will immediately provide BB&T with an accurate accounting of all funds paid to the Debtors, Super Stop Express or any other entity pursuant to any lease agreement in any way associated with any of the properties upon which BB&T claims a security interest since the Petition Date. Additionally, Judge Kimball directs the Debtors not to utilize any cash collateral nunc pro tunc to the Petition Date without further order of the Court. This prohibition of the use of cash collateral will extend to any leases related to all of the properties upon which BB&T claims a security interest, including any leases with Super Stop Express, any leases between Super Stop Express and any third party and any leases between any insiders of the Debtors and any other parties. The Debtors will also provide BB&T with monthly segregated DIP account bank records showing the amount of money deposited into the DIP accounts for each Debtor related to BB&T's collateral. Finally, the Debtors will provide monthly rent rolls and an accounting of all funds collected from any source related to BB&T's collateral, including but not limited to, any money collected by Super Stop Express. As reported in the Troubled Company Reporter on Dec. 14, 201, secured creditor Branch Banking and Trust Company asks the U.S. Bankruptcy Court for the Southern District of Florida to: 1) prohibit MAQ Management, Inc., et al., from using cash collateral; 2) compel the Debtors to comply with the segregation order by providing accurate information with respect to the DIP accounts; and 3) require the Debtors to provide BB&T with a monthly accounting of all postpetition receipts and disbursements of cash collateral for all leases associated with the property. BB&T relates that the motion is in connection with creditor 1st National Bank of South Florida's motion to prohibit use of cash collateral and Wauchula Bank's Ore Tenus motion to segregate cash collateral. BB&T is the successor in interest to Colonial Bank by the acquisition of assets from the Federal Deposit Insurance Corporation as receiver for Colonial Bank, as successor of Colonial Bank, N.A., the successor of Palm Beach National Bank & Trust. BB&T purchased the loan obligations from the FDIC. According to BB&T, its cash collateral with respect to the MAQ Hollywood Property is in jeopardy. Similarly, BB&T's cash collateral with respect to the remaining property in which BB&T has a security interest may also be in jeopardy. BB&T asserts that the Debtors' failure to collect rent owed by Super Stop Express for its lease of the MAQ Hollywood Property is troubling given the Debtors' close relationship with Super Stop Express. BB&T relates that the Debtors are intentionally not pursuing the rent money owed by Super Stop Express because that money is being used to pay the Debtors' attorney's fees. Further, BB&T requests that the Court order MAQ to provide BB&T with monthly reports showing the amount of rent collected from each tenant for all of the property so that BB&T can track whether its cash collateral in the MAQ Hollywood Property is protected. Likewise, the Court must prohibit the use of Super Stop Express funds to fund the Debtors' legal fees, rather than to pay rent. About MAQ Management Based in Boca Raton, Florida, MAQ Management, Inc., and three other affiliates serve as commercial landlords to convenience stores and gas stations in primarily in South Florida. They filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Cases No. 11-26571 to 11-26574) on June 15, 2011. Affiliates that sought Chapter 11 protection are Super Stop Petroleum, Inc., Super Stop Petroleum I, Inc., and Super Stop Petroleum IV, Inc. Judge Erik P. Kimball presides over the case. MAQ Management estimated assets and debts of $1 million to $10 million. Super Stop estimated assets and debts of $10 million to $50 million. The petitions were signed by Mahammad A. Qureshi, CEO. Richard J. McIntyre, Esq., and Chirstopher C. Todd, Esq., at McIntyre, Panzarella, Thanasides, Hoffman, Bringgold & Todd, P.L., in Tampa, Florida, serve the Debtors as substitute counsel. The U.S. Trustee announced that until further notice, it will not appoint a committee of creditors for the Debtors' cases. stores and gas stations in primarily in South Florida. As reported in the TCR on Oct. 21, 2011, MAQ Management, Inc., et al., filed their Consolidated Chapter 11 Plan of Reorganization, with the U.S. Bankruptcy Court for the Southern District of Florida, in compliance with the Court's Order. MAQ MANAGEMENT: Expects to File 'Material Amendments' to Plan ------------------------------------------------------------- MAQ Management, Inc., asks that the Court enter an order requesting an additional 30 days to file amendments to the Plan and Disclosure Statement and extend the deadlines previously established by the Court's order conditionally approving the Disclosure Statement. The Debtors anticipate filing several material amendments to the Plan as a result of continued negotiations and compromises of controversies recently reached with most of the Debtors' significant secured creditors subsequent to the date of filing the Plan, and the Debtors anticipate that the Disclosure Statement may need further amendments as well. As reported in the Troubled Company Reporter on Jan. 5, 2012, the Hon. Erik P. Kimball of the U.S. Bankruptcy Court for the Southern District of Florida is scheduled to convene a hearing on March 1, 2012, at 2:30 p.m., to consider the final approval of Disclosure Statement, and confirmation of MAQ Management, Inc., et al.'s Chapter 11 Plan. The Court also approved this schedule in relation to the Plan confirmation: Jan. 31, -- Deadline for the Debtors to serve the order, Disclosure Statement, Plan and ballot(s) Feb. 16, -- Deadline for filing objections to claims -- Deadline for filing fee applications Feb. 23, -- Deadline for filing ballots accepting or rejecting Plan Feb. 27, -- Deadline for filing objections to confirmation -- Deadline for filing objections to final approval of the Disclosure Statement -- Deadline for filing elections under Section 1111(b) of the Bankruptcy Code -- Deadline for the Debtors to file report of Plan Proponent(s) and confirmation affidavit About MAQ Management Based in Boca Raton, Florida, MAQ Management, Inc., and three other affiliates serve as commercial landlords to convenience stores and gas stations in primarily in South Florida. They filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Cases No. 11-26571 to 11-26574) on June 15, 2011. Affiliates that sought Chapter 11 protection are Super Stop Petroleum, Inc., Super Stop Petroleum I, Inc., and Super Stop Petroleum IV, Inc. Judge Erik P. Kimball presides over the case. MAQ Management estimated assets and debts of $1 million to $10 million. Super Stop estimated assets and debts of $10 million to $50 million. The petitions were signed by Mahammad A. Qureshi, CEO. Richard J. McIntyre, Esq., and Chirstopher C. Todd, Esq., at McIntyre, Panzarella, Thanasides, Hoffman, Bringgold & Todd, P.L., in Tampa, Florida, serve the Debtors as substitute counsel. The U.S. Trustee announced that until further notice, it will not appoint a committee of creditors for the Debtors' cases. stores and gas stations in primarily in South Florida. As reported in the TCR on Oct. 21, 2011, MAQ Management, Inc., et al., filed their Consolidated Chapter 11 Plan of Reorganization, with the U.S. Bankruptcy Court for the Southern District of Florida, in compliance with the Court's Order. MARCO POLO: Committee Investigation Period Extended Until Feb. 29 ----------------------------------------------------------------- The Honorable James M. Peck, United States Bankruptcy Judge for the Southern District of New York has approved the stipulation by and among the Official Committee of Unsecured Creditors, The Royal Bank of Scotland PLC, as prepetition and postpetition lender to the Debtors, and Marco Polo Seatrade B.V., et al., extending the Committee's investigation period through and including Feb. 29, 2012. If the Committee files a motion to extend the Investigation Period in advance of or on Feb. 29, 2012, and the Court cannot hear the motion by Feb. 29, 2012, the Investigation Period will be extended through the hearing date on the motion to extend. The Outside Date of the Investigation Period is extended through and including April 3, 2012. The final DIP order entered by the Bankruptcy Court on Nov. 4, 2011, provided the Committee with an initial 60-day investigation period from Oct. 3, 2011, through and including Dec. 2, 2011, which may be extended upon agreement in writing by the parties, without the requirement of a further order of the Court. On Jan. 4, 2012, the parties agreed to extend the "outside date" of the Investigation Period to Feb. 1, 2012. About Marco Polo Marco Polo Seatrade B.V. operates an international commercial vessel management company that specializes in providing commercial and technical vessel management services to third parties. Founded in 2005, the Company mainly operates under the name of Seaarland Shipping Management and maintains corporate headquarters in Amsterdam, the Netherlands. The primary assets consist of six tankers that are regularly employed in international trade, and call upon ports worldwide. Marco Polo and three affiliated entities filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29, 2011. The other affiliates are Seaarland Shipping Management B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V. Marco Polo is the sole owner of Seaarland, which in turn is the sole owner of Cargoship, and also holds a 5% stake in Magellano. The remaining 95% stake in Magellano is owned by Amsterdam-based Poule B.V., while another Amsterdam company, Falm International Holding B.V. is the sole owner of Marco Polo. Falm and Poule didn't file bankruptcy petitions. The filings were prompted after lender Credit Agricole Corporate & Investment Bank seized one ship on July 21, 2011, and was on the cusp of seizing two more on July 29. The arrest of the vessel was authorized by the U.K. Admiralty Court. Credit Agricole also attached a bank account with almost US$1.8 million on July 29. The Chapter 11 filing precluded the seizure of the two other vessels. The cases are before Judge James M. Peck. Evan D. Flaschen, Esq., Robert G. Burns, Esq., and Andrew J. Schoulder, Esq., at Bracewell & Giuliani LLP, in New York, serve as the Debtors' bankruptcy counsel. Kurtzman Carson Consultants LLC serves as notice and claims agent. The petition noted that the Debtors' assets and debts are both more than US$100 million and less than US$500 million. Tracy Hope Davis, United States Trustee for Region 2, appointed three members to serve on the Official Committee of Unsecured Creditors. The Committee has retained Blank Rome LLP as its attorney. Creditor Credit Agricole Corporate and Investment Bank is represented by Alfred E. Yudes, Jr., Esq., and Jane Freeberg Sarma, Esq., at Watson, Farley & Williams (New York) LLP. Gregory M. Petrick, Esq., Ingrid Bagby, Esq., and Sharon J. Richardson, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, represents secured creditor and post-petition lender The Royal bank of Scotland plc. MARCO POLO: Wants Plan Exclusivity Period Extended to Feb. 29 ------------------------------------------------------------- Marco Polo Seatrade B.V., et al., ask the U.S. Bankruptcy Court for the Southern District of New York to extend their exclusive periods to file and solicit votes on a Chapter 11 plan through and including Feb. 29, 2012, and April 30, 2012. The extension of the exclusive periods has the consent of Senior Lenders RBS and Credit Agricole and Investment Bank, and the Official Committee of Unsecured Creditors. In addition, the Debtors seek entry of an ex parte Bridge Order on or before Feb. 16, 2012, extending the Exclusive Period to file a plan to and through the Date finally determines the requested relief herein. The Debtors requests entry of the Bridge Order because the Exclusivity Period to file a plan, as established pursuant to Bankruptcy Code Section 1121(d) and extended twice by the Court, is set to expire before the Feb. 23, 2012 hearing on the Motion. The Objection Deadline is Feb. 16, 2012. This third extension of the Debtors' Exclusivity Periods is intended to allow Zolfo Cooper, the financial advisor to the Senior Lenders, to review and help refine the Debtors' business forecast so that a Plan of Reorganization can be developed. About Marco Polo Marco Polo Seatrade B.V. operates an international commercial vessel management company that specializes in providing commercial and technical vessel management services to third parties. Founded in 2005, the Company mainly operates under the name of Seaarland Shipping Management and maintains corporate headquarters in Amsterdam, the Netherlands. The primary assets consist of six tankers that are regularly employed in international trade, and call upon ports worldwide. Marco Polo and three affiliated entities filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29, 2011. The other affiliates are Seaarland Shipping Management B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V. Marco Polo is the sole owner of Seaarland, which in turn is the sole owner of Cargoship, and also holds a 5% stake in Magellano. The remaining 95% stake in Magellano is owned by Amsterdam-based Poule B.V., while another Amsterdam company, Falm International Holding B.V. is the sole owner of Marco Polo. Falm and Poule didn't file bankruptcy petitions. The filings were prompted after lender Credit Agricole Corporate & Investment Bank seized one ship on July 21, 2011, and was on the cusp of seizing two more on July 29. The arrest of the vessel was authorized by the U.K. Admiralty Court. Credit Agricole also attached a bank account with almost US$1.8 million on July 29. The Chapter 11 filing precluded the seizure of the two other vessels. The cases are before Judge James M. Peck. Evan D. Flaschen, Esq., Robert G. Burns, Esq., and Andrew J. Schoulder, Esq., at Bracewell & Giuliani LLP, in New York, serve as the Debtors' bankruptcy counsel. Kurtzman Carson Consultants LLC serves as notice and claims agent. The petition noted that the Debtors' assets and debts are both more than US$100 million and less than US$500 million. Tracy Hope Davis, United States Trustee for Region 2, appointed three members to serve on the Official Committee of Unsecured Creditors. The Committee has retained Blank Rome LLP as its attorney. Creditor Credit Agricole Corporate and Investment Bank is represented by Alfred E. Yudes, Jr., Esq., and Jane Freeberg Sarma, Esq., at Watson, Farley & Williams (New York) LLP. Gregory M. Petrick, Esq., Ingrid Bagby, Esq., and Sharon J. Richardson, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, represents secured creditor and post-petition lender The Royal bank of Scotland plc. MARITIME TELECOMMUNICATIONS: S&P Affirms 'B'; Outlook Now Positive ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Miramar, Fla.-based Maritime Telecommunications Network Inc. (MTN) to positive from stable. The 'B' corporate credit rating on the company was affirmed. "At the same time, we revised our recovery rating on the company's senior secured credit facilities to '1', indicating our expectation of very high (90% to 100%) recovery for lenders in the event of a payment default, from '2' (70% to 90% recovery expectation). We also raised our issue-level rating on the credit facilities to 'BB-' (two notches higher than the 'B' corporate credit rating) from 'B+' in accordance with our notching criteria for a '1' recovery rating. The revision to the recovery rating reflects improved recovery prospects since the loan inception due to continued growth in the company's business," S&P said. "The outlook revision reflects the company's strong revenue and EBITDA growth through the first nine months of 2011, which was better than our expectations," explained Standard & Poor's credit analyst Allyn Arden. "During this period, total revenue and EBITDA increased 23% and 22%, respectively, year over year." "The company benefited from revenue growth across all business lines, including a 13% increase in the core cruise segment. We expect these trends to continue and project that, absent a material acquisition or dividend to shareholders, total leverage will decline to the mid-4x area by year-end 2012 from about 5x as of Sept. 30, 2011. As a result, we have changed our financial risk assessment on the company to 'aggressive' from 'highly leveraged,'" S&P said. S&P's outlook revision includes some of the assumptions in 2012: An 8% increase in cruise ship revenue due to new installations and demand for bandwidth. "Double-digit revenue growth in the yacht and government segment; we expect the yacht segment, in particular, to benefit from new installations and higher pricing," S&P said. A more modest 6% increase in revenue from the oil and gas business. Margins to remain in the 27% to 29% area despite solid revenue growth due to rising bandwidth costs and increased headcount. "Free operating cash flow (FOCF) of at least $15 million, a portion of which we expect will be used for debt reduction as per the credit agreement. The 'B' rating on MTN continues to reflect the company's narrow scope of business, revenue concentration among large customers with significant pricing power, uncertain longer-term growth prospects from newer business lines, and an 'aggressive' financial risk profile. Tempering factors include the company's leading niche position in providing communications services to the North American cruise industry, its stability from long-term contractual revenue, and solid free operating cash flow relative to its debt burden," S&P said. MTN provides customized satellite-based communications services to ocean vessels and offshore oil and gas drilling platforms. The company focuses on the North American cruise line industry and serves over 200 cruise ships, which generate approximately 60% of total revenue. It derives the remaining 40% of its revenue from the oil and gas, government/military, yacht, and aviation segments. MBIA INC: Admits Errors in 2009 Restructuring Filing ---------------------------------------------------- Dietrich Knauth at Bankruptcy Law360 reports that MBIA Inc. admitted Tuesday that it made financial errors in its 2009 restructuring application with the insurance regulators, saying it overstated the amount of money that would be available to pay policyholders -- including banks that have accused the insurer of a $5.4 billion fraud -- in projected worst-case scenarios. The Troubled Company Reporter, citing American Bankruptcy Institute, said on June 24, 2011, that New York's highest court was asked by Bank of America Corp., UBS AG and other institutions to reinstate their lawsuit claiming that MBIA's 2009 restructuring was intended to defraud policyholders. MBIA was split into two companies in 2009, with National Public Finance Guarantee, holding onto the company's healthy portfolio of municipal bond insurance. The second company, MBIA Insurance, retains the structured-finance policies that became toxic with the housing implosion during the great recession. Headquartered in Armonk, New York, MBIA Inc. (NYSE:MBI) -- http://www.mbia.com/-- provides financial guarantee insurance, investment management services, and municipal and other services to public finance and structured finance clients on a global basis. MCCLATCHY CO: Posts $42 Million Net Income in Fourth Quarter ------------------------------------------------------------ The McClatchy Company reported net income of $42 million on $351.43 million of net revenues for the three months ended Dec. 25, 2011, compared with net income of $14.78 million on $369.92 million of net revenues for the three months ended Dec. 26, 2010. The Company reported net income of $54.38 million on $1.26 billion of net revenues for the year ended Dec. 25, 2011, compared with net income of $36.18 million on $1.37 billion of net revenues for the year ended Dec. 26, 2010. Commenting on McClatchy's fourth quarter results, Gary Pruitt, chairman and chief executive officer, said, "We were pleased to see our advertising revenue results improve in the fourth quarter. For the first three quarters of 2011 ad revenues were consistently down in the 10% range compared to a decline of 5.7% in the fourth quarter. The improving advertising results were led by retail, direct marketing and national advertising, and we also posted strong growth in digital-only advertising. A full-text copy of the press release is available for free at: http://is.gd/poOcHa About The McClatchy Company Sacramento, Calif.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The Company's balance sheet at Sept. 25, 2011, showed $2.98 billion in total assets, $2.76 billion in total liabilities and $214.83 million stockholders' equity. * * * In February 2010, Moody's Investors Service upgraded The McClatchy Company's Corporate Family Rating to Caa1 from Caa2, Probability of Default Rating to Caa1 from Caa2, and senior unsecured and unguaranteed note ratings to Caa2 from Caa3, concluding the review for upgrade initiated on January 27, 2010. The upgrades reflect McClatchy's improved liquidity position and reduced near-term default risk following completion of the company's refinancing, and its ability to stabilize EBITDA performance through significant cost reductions. The rating outlook is stable. In the May 12, 2011, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Sacramento, Calif.-based The McClatchy Co. to 'B-' from 'B'. "The downgrade reflects our expectation that continued declines in advertising revenues will outweigh the company's cost reduction measures, resulting in steadily rising debt leverage over the intermediate term despite some modest debt reduction that will likely occur over the near term," said Standard & Poor's credit analyst Harold Diamond. The 'B-' corporate credit rating on Sacramento, Calif.- based McClatchy reflects Standard & Poor's expectation that advertising revenues will decline at a high-single-digit% rate in 2011, and EBITDA will fall at a mid-double-digit pace. As reported by the Troubled Company Reporter on Feb. 8, 2011, Fitch Ratings has upgraded the Issuer Default Rating of the McClatchy Company to 'B-'. The Rating Outlook is Stable. The revenue declines endured by McClatchy in 2010 were materially lower than Fitch's expectation. Fitch had modeled declines in the mid-teens versus actual declines in the mid-single digits. While Fitch expected the company to focus on cost containment, the company's success exceeded Fitch expectations. Fitch had expected EBITDA to decline more than 10% versus actual EBITDA growth in the mid-single digits. As a result absolute debt and leverage were better than Fitch expectations. Fitch estimates 2010 year end gross unadjusted leverage of approximately 4.7 times. Fitch expects the company will be able to meet its pension funding obligations and satisfy all of its maturities up to and including its senior unsecured notes due in 2014 ($169 million balance as of Sept. 30, 2010). Also, Fitch does not expect McClatchy will have any issues meeting its credit agreement financial covenants (under both Fitch's base and stress cases) MCCLATCHY CO: BlackRock Discloses 5.7% Equity Stake --------------------------------------------------- BlackRock, Inc., disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Dec. 30, 2011, it beneficially owns 3,464,924 shares of common stock of The McClatchy Company representing 5.72% of the shares outstanding. As previously reported by the TCR on March 17, 2011, BlackRock disclosed beneficial ownership of 3,289,711 shares. A full-text copy of the amended filing is available at http://is.gd/QmJ4FQ About The McClatchy Company Sacramento, Calif.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The Company's balance sheet at Sept. 25, 2011, showed $2.98 billion in total assets, $2.76 billion in total liabilities and $214.83 million stockholders' equity. * * * In February 2010, Moody's Investors Service upgraded The McClatchy Company's Corporate Family Rating to Caa1 from Caa2, Probability of Default Rating to Caa1 from Caa2, and senior unsecured and unguaranteed note ratings to Caa2 from Caa3, concluding the review for upgrade initiated on January 27, 2010. The upgrades reflect McClatchy's improved liquidity position and reduced near-term default risk following completion of the company's refinancing, and its ability to stabilize EBITDA performance through significant cost reductions. The rating outlook is stable. In the May 12, 2011, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Sacramento, Calif.-based The McClatchy Co. to 'B-' from 'B'. "The downgrade reflects our expectation that continued declines in advertising revenues will outweigh the company's cost reduction measures, resulting in steadily rising debt leverage over the intermediate term despite some modest debt reduction that will likely occur over the near term," said Standard & Poor's credit analyst Harold Diamond. The 'B-' corporate credit rating on Sacramento, Calif.- based McClatchy reflects Standard & Poor's expectation that advertising revenues will decline at a high-single-digit% rate in 2011, and EBITDA will fall at a mid-double-digit pace. As reported by the Troubled Company Reporter on Feb. 8, 2011, Fitch Ratings has upgraded the Issuer Default Rating of the McClatchy Company to 'B-'. The Rating Outlook is Stable. The revenue declines endured by McClatchy in 2010 were materially lower than Fitch's expectation. Fitch had modeled declines in the mid-teens versus actual declines in the mid-single digits. While Fitch expected the company to focus on cost containment, the company's success exceeded Fitch expectations. Fitch had expected EBITDA to decline more than 10% versus actual EBITDA growth in the mid-single digits. As a result absolute debt and leverage were better than Fitch expectations. Fitch estimates 2010 year end gross unadjusted leverage of approximately 4.7 times. Fitch expects the company will be able to meet its pension funding obligations and satisfy all of its maturities up to and including its senior unsecured notes due in 2014 ($169 million balance as of Sept. 30, 2010). Also, Fitch does not expect McClatchy will have any issues meeting its credit agreement financial covenants (under both Fitch's base and stress cases) MCCLATCHY CO: UBS AG Ceases to Hold 5% of Class A Shares -------------------------------------------------------- UBS AG, directly and on behalf of certain subsidiaries, disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Dec. 30, 2011, it beneficially owns 304,493 shares of Class A common stock of The McClatchy Company representing .50% of the shares outstanding. As previously reported by the TCR on Feb. 8, 2011, UBS AG disclosed beneficial ownership of 3,304,872 Class A shares. A full-text copy of the amended filing is available at http://is.gd/wE5V5m About The McClatchy Company Sacramento, Calif.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The Company's balance sheet at Sept. 25, 2011, showed $2.98 billion in total assets, $2.76 billion in total liabilities and $214.83 million stockholders' equity. * * * In February 2010, Moody's Investors Service upgraded The McClatchy Company's Corporate Family Rating to Caa1 from Caa2, Probability of Default Rating to Caa1 from Caa2, and senior unsecured and unguaranteed note ratings to Caa2 from Caa3, concluding the review for upgrade initiated on January 27, 2010. The upgrades reflect McClatchy's improved liquidity position and reduced near-term default risk following completion of the company's refinancing, and its ability to stabilize EBITDA performance through significant cost reductions. The rating outlook is stable. In the May 12, 2011, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Sacramento, Calif.-based The McClatchy Co. to 'B-' from 'B'. "The downgrade reflects our expectation that continued declines in advertising revenues will outweigh the company's cost reduction measures, resulting in steadily rising debt leverage over the intermediate term despite some modest debt reduction that will likely occur over the near term," said Standard & Poor's credit analyst Harold Diamond. The 'B-' corporate credit rating on Sacramento, Calif.- based McClatchy reflects Standard & Poor's expectation that advertising revenues will decline at a high-single-digit% rate in 2011, and EBITDA will fall at a mid-double-digit pace. As reported by the Troubled Company Reporter on Feb. 8, 2011, Fitch Ratings has upgraded the Issuer Default Rating of the McClatchy Company to 'B-'. The Rating Outlook is Stable. The revenue declines endured by McClatchy in 2010 were materially lower than Fitch's expectation. Fitch had modeled declines in the mid-teens versus actual declines in the mid-single digits. While Fitch expected the company to focus on cost containment, the company's success exceeded Fitch expectations. Fitch had expected EBITDA to decline more than 10% versus actual EBITDA growth in the mid-single digits. As a result absolute debt and leverage were better than Fitch expectations. Fitch estimates 2010 year end gross unadjusted leverage of approximately 4.7 times. Fitch expects the company will be able to meet its pension funding obligations and satisfy all of its maturities up to and including its senior unsecured notes due in 2014 ($169 million balance as of Sept. 30, 2010). Also, Fitch does not expect McClatchy will have any issues meeting its credit agreement financial covenants (under both Fitch's base and stress cases) METAL STORM: Proposes to Issue Ordinary Shares ---------------------------------------------- In a regulatory filing with the U.S. Securities and Exchange Commission, Metal Storm Limited disclosed that it proposes to issue ordinary shares of the Company: (a) 27,777,778 ordinary shares pursuant to a convertible security agreement; (b) 111,111,111 ordinary shares pursuant to a convertible security agreement; (c) 111,111,111 ordinary shares pursuant to a subscription agreement; (d) 111,111,111 ordinary shares pursuant to a convertible security agreement; (e) 55,555,555 ordinary shares pursuant to a subscription agreement; (f) 55,555,555 ordinary shares pursuant to a subscription agreement; (g) 111,111,111 ordinary shares pursuant to a convertible security agreement; and (h) 122,222,222 ordinary shares pursuant to a subscription agreement. About Metal Storm Headquartered in Darra, Queensland, Australia, Metal Storm Limited is a defense technology company with offices in Australia and the United States. It specializes in the research, design, development and integration of projectile launching systems utilizing its "electronically initiated / stacked projectile" technology for use in the defense, homeland security, law enforcement and industrial markets. As reported by the TCR on July 25, 2011, PricewaterhouseCoopers, in Brisbane, Australia, expressed substantial doubt about Metal Storm's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency. The Company reported a net loss of A$8.94 million on A$3.35 million of revenue for 2010, compared with a net loss of A$11.31 million on A$1.11 million of revenue for 2009. The Company's balance sheet at Dec. 31, 2010, showed A$2.15 million in total assets, A$20.64 million in total liabilities, all current, and an equity deficit of A$18.49 million. MGM RESORTS: Moody's Says Bank Amendment Credit Positive -------------------------------------------------------- Moody's Investors Service commented that MGM Resorts International's (B2, stable) bank amendment proposal is a credit positive because it will extend at least a portion of the company $3.5 billion term loans and revolving credit commitments by one year (to 2015) and lower the LIBOR floor and potentially the interest margin (if additional collateral is provided) on these facilities. As a result, MGM will benefit from an increase in free cash flow due to lower interest expense and lower refinancing risk in 2014. MGM faces approximately $4.6 billion of maturing debt and commitments in 2014. If 50% of existing lenders consent to the amendment, MGM will push about $1.8 billion of those maturities out one year to 2015. Moody's upgrade of MGM's Corporate Family and Probability of Default ratings on November 17, 2011 assumed the company would continue to execute transactions to improve its liquidity profile. Therefore, this proposed amendment will not have an immediate impact on MGM's ratings. Also, assuming 50% of existing lenders consent to the amendment and no reduction in margin, Moody's roughly estimates MGM could reduce interest expense by approximately $20 million -- a small savings relative to the company's total annual interest burden of about $1 billion. However, if MGM decides to provide more collateral to lower the interest margin, the interest cost savings would increase approximately $20 million for each 1% reduction in margin. The proposed amendment includes these terms: 1) a reduction in the LIBOR floor and potential reduction in the applicable margin, 2) an extension of the expiration of the revolver and the term loan maturity from February 21, 2014 to February 23, 2015, and, 3) includes covenant modifications and other amendments. In exchange for agreeing to these terms, extending lenders would receive: 1) a 20% reduction in existing revolver and term loan exposures, 2) a fee of 50 basis points, and 3) additional collateral to be added over time solely for the benefit of extended loans. MORGAN'S FOODS: JCP Investment Discloses 12.6% Equity Stake ----------------------------------------------------------- JCP Investment Partnership, LP, and its affiliates disclosed in a Schedule 13D filing with the U.S. Securities and Exchange Commission that, as of Feb. 8, 2012, they beneficially own 368,825 shares of common stock of Morgan's Foods, Inc., representing 12.6% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/17FMR1 About Morgan's Foods Cleveland, Ohio-based Morgan's Foods, Inc., which was formed in 1925, operates through wholly-owned subsidiaries KFC restaurants under franchises from KFC Corporation, Taco Bell restaurants under franchises from Taco Bell Corporation, Pizza Hut Express restaurants under licenses from Pizza Hut Corporation and an A&W restaurant under a license from A&W Restaurants, Inc. As of May 20, 2011, the Company operates 56 KFC restaurants, 5 Taco Bell restaurants, 10 KFC/Taco Bell "2n1's" under franchises from KFC Corporation and franchises from Taco Bell Corporation, 3 Taco Bell/Pizza Hut Express "2n1's" under franchises from Taco Bell Corporation and licenses from Pizza Hut Corporation, 1 KFC/Pizza Hut Express "2n1" under a franchise from KFC Corporation and a license from Pizza Hut Corporation and 1 KFC/A&W "2n1" operated under a franchise from KFC Corporation and a license from A&W Restaurants, Inc. The Company reported a net loss of $988,000 on $89.9 million of revenues for the fiscal year ended Feb. 27, 2011, compared with net income of $396,000 on $90.5 million of revenues for the fiscal year ended Feb. 28, 2010. The Company reported a net loss of $567,000 on $58.35 million of revenue for the 36 weeks ended Nov. 6, 2011, compared with net income of $684,000 on $65.10 million of revenue for the 36 weeks ended Nov. 7, 2010. The Company's balance sheet at Nov. 6, 2011, showed $41.41 million in total assets, $41.34 million in total liabilities and $68,000 in total shareholders' equity. Grant Thornton LLP, in Cleveland, Ohio, expressed substantial doubt about Morgan's Foods' ability to continue as a going concern. The independent auditors noted that as of Feb. 27, 2011, the Company was in default and cross default of certain provisions of its most significant credit agreements and in default of the image enhancement requirements under franchise agreements for certain of its restaurants. MULTIPLAN INC: Moody's Says B2 CFR Reflects Leverage, Low Growth ---------------------------------------------------------------- Moody's Investors Service released a summary credit opinion on Multiplan, Inc. Moody's current ratings on Multiplan, Inc. are: LT Corporate Family Ratings (domestic currency) ratings of B2 Probability of Default ratings of B2 Senior Secured Bank Credit Facility (domestic currency) ratings of Ba3 Senior Unsecured (domestic currency) ratings of Caa1 LGD Senior Secured Bank Credit Facility (domestic currency) ratings of 32 - LGD3 LGD Senior Unsecured (domestic currency) ratings of 86 - LGD5 RATINGS RATIONALE MultiPlan's B2 Corporate Family Rating reflects the company's relatively high leverage, history of acquisitions and LBO transactions, and lack of organic growth within the Primary PPO network segment. Further adding pressure to the ratings is the continuing uncertainty with respect to healthcare reform implications on insurers. Supporting the ratings are MultiPlan's successful integration of prior acquisitions, high EBITDA margins, and the company's scale and covered lives, albeit within a niche market. MultiPlan's stable outlook reflects Moody's expectation that free cash flow will continue to improve in relation to debt, even in an environment where revenues may be pressured by continued economic weakness. In addition, Moody's expects the company to continue deleveraging below 6 times over the next four quarters. That said, it is unlikely that these improvements will be sufficient to warrant a higher rating over the next 12-18 months, given its small size and high leverage. A rating upgrade is unlikely in the near-term. However, if growth rates improve, profitability and cash flow are sustainable, and leverage is permanently reduced below 5.0 times to a level commensurate with a mid to high "B" range, the ratings could be upgraded. The ratings could be downgraded if there is a material contraction in the level of operating cash flow, such that free cash flow to debt falls below 5% of adjusted debt on a sustained basis or if leverage were to permanently remain in the 6.5 times range. The ratings could also come under pressure if the company were to pursue additional debt financed acquisitions. The principal methodology used in rating Multiplan, Inc. (New) was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. MUNICIPAL MORTGAGE: Francis Gallagher Appointed to Board -------------------------------------------------------- The Board of Directors of Municipal Mortgage & Equity, LLC, appointed Francis X. Gallagher as a new director of the Company effective on Feb. 6, 2012. Mr. Gallagher will receive compensation and perquisites in accordance with policies and procedures previously approved by the Board of Directors for non- employee directors of the Company. Mr. Gallagher is a Managing Partner at Charlesmead Advisors LLC, where he leads investment banking efforts to focused subsectors within the telecommunications industry, including wireline and wireless services and internet infrastructure. From 2005 to 2011, Mr. Gallagher was a Managing Director at Stifel Nicolaus Weisel, Incorporated, a leading investment bank, where he managed and led the Telecommunications Industry Banking Group. Prior to that, Mr. Gallagher spent eight years in a variety of positions with Legg Mason Wood Walker Incorporated, where he was responsible for investment banking services for a variety of large and small- capitalization telecommunications companies. Prior to that, Mr. Gallagher was a Partner at Venable LLP where he provided mergers and acquisitions, corporate finance and banking services to a host of clients. Mr. Gallagher began his career at the New York-based law firm of Winthrop, Stimson, Putnam & Roberts (Now Pillsbury LLP). About Municipal Mortgage Baltimore, Md.-based Municipal Mortgage & Equity, LLC (Pink Sheets: MMAB) -- http://www.munimae.com/-- was organized in 1996 as a Delaware limited liability company and is classified as a partnership for federal income tax purposes. When the Company became a publicly traded company in 1996, it was primarily engaged in originating, investing in and servicing tax- exempt mortgage revenue bonds issued by state and local government authorities to finance affordable multifamily housing developments. Since then, the Company made several acquisitions that significantly expanded its business. However, in 2008, due to the financial crisis, the Company began contracting its business. The Company has sold, liquidated or closed down all of its different businesses except for its bond investing activities and certain assets and residual interests related to the businesses and assets that the Company sold due to its liquidity issues. The Company has a majority position in International Housing Solutions S.a.r.l., a partnership that was formed to promote and invest in affordable housing in overseas markets. In addition, at Dec. 31, 2010, the Company has an unfunded equity commitment of $5.1 million, or 2.67% of total committed capital with respect to its role as the general partner to the South Africa Workforce Housing Fund SA I ("SA Fund"). The SA Fund was formed to invest directly or indirectly in housing development projects and housing sector companies in South Africa. A portion of the funding of SA Fund is participating debt provided by the United States Overseas Private Investment Corporation, a federal government entity, and the remainder is equity primarily invested by institutional and large private investors. The Company expects to continue this business. The Company also reported a net loss of $47.59 million on $73.87 million of total revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $69.65 million on $80.05 million of total revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $1.93 billion in total assets, $1.22 billion in total liabilities and $707.23 million in total equity. As reported by the TCR on April 6, 2011, KPMG LLP, in Baltimore, Maryland, expressed substantial doubt about Municipal Mortgage & Equity's ability to continue as a going concern. The independent auditors noted that the Company has been negatively impacted by the deterioration of the capital markets and has liquidity issues which have resulted in the Company having to sell assets, liquidate collateral positions, post additional collateral, sell or close different business segments and work with its creditors to restructure or extend its debt arrangements. Municipal Mortgage reported a net loss of $72.5 million on $107.7 million of total revenue for 2010, compared with a net loss of $380.1 million on $134.8 million of total revenue for 2009. Bankruptcy Warning The Company's ability to restructure its debt is especially important with respect to the subordinated debentures. The weighted average pay rate on the remaining $196.7 million (unpaid principal balance) of subordinated debentures was 2.1% at Sept. 30, 2011. The Company's pay rates are due to increase in the first and second quarters of 2012, which will bring the weighted average pay rate to approximately 8.6%. The Company does not currently have the liquidity to meet these increased payments. In addition, substantially all of the Company's assets are encumbered, which limits its ability to increase its liquidity by selling assets or incurring additional indebtedness. There is also uncertainty related to the Company's ability to liquidate non-bond related assets at sufficient amounts to satisfy associated debt and other obligations and there are a number of business risks surrounding the Company's bond investing activities that could impact its ability to generate sufficient cash flow from the bond portfolio. These uncertainties could adversely impact the Company's financial condition or results of operations. In the event the Company is not successful in restructuring or settling its remaining non-bond related debt, or in generating liquidity from the sale of non-bond related assets or if the bond portfolio net interest income and the common equity distributions the Company receives from its subsidiaries are substantially reduced, the Company may have to consider seeking relief through a bankruptcy filing. ODYSSEY (IX): Gets Final Approval to Access Cash Collateral ----------------------------------------------------------- The Hon. Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida authorized, on a final basis, Odyssey (IX) DP I, LLC, to use the cash collateral. The Debtor's access to the cash collateral is subject to the aggregate of all expenses for each week not exceeding the amount in the budget by more than 10% for any week on a cumulative basis. As adequate protection from diminution in value of the lender's collateral, the Debtor will grant the lender replacement lien against the Debtor's cash collateral to the same extent, validity, and priority as existed as of the Petition Date. The Debtor will also maintain insurance coverage of the collateral. The Court also ordered that other than the $7,000 expense allocated for architectural fees for week ending Feb. 12, 2012, which the Debtor is allowed to incur, the Debtor will not incur the expenses in the budget under the line items "Drainage Remediation" and "Publix Lease Requirements" absent further order of the Court. The Court will conduct a further hearing on the approval of the other expenses in said line items on Feb. 16, at 2:30 p.m., if parties are not able to earlier reach an agreement regarding the expenses. If the parties are able to reach an agreement, they will contact Chambers to cancel the hearing and will submit an agreed supplemental final order. As reported in the Troubled Company Reporter on Jan. 3, 2012, as of the bankruptcy filing date, U.S. Bank N.A. is owed roughly $15.83 million under a prepetition construction loan. The Debtor needs access to cash collateral to fund operating expenses and administration of the Chapter 11 case. The Debtor said the bank may assert a lien on the rents and leases at the Debtor's shopping center. About Odyssey (IX) DP I LLC Lakeland, Florida-based Odyssey (IX) DP I LLC, owns the Ocean Breeze Plaza, a shopping center in Jensen Beach Florida. Odyssey (IX) DP I filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 11-22952) on Dec. 16, 2011, after its lender, U.S. Bank N.A. declared a default on a $16 million construction loan. Judge Catherine Peek McEwen presides over the case. Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser PA, in Tampa, Florida, serves as the Debtor's counsel. William Maloney and Bill Maloney Consulting serves as chief restructuring officer. The Debtor disclosed $20,318,253 in assets and $15,911,155 in liabilities as of the Chapter 11 filing. The petition was signed by Robert Madden, president of OC DIP LLC, the Debtor's manager. Affiliates that previously filed separate Chapter 11 petitions are Century/AG - Avondale LLC, Odyssey Properties III LLC, Century (III) DP III LLC, Odyssey (III) DP III LLC, Odyssey (VI) Commercial DP I LLC, Odyssey (III) DP IX LLC, Odyssey (III) DP III LLC, and Odyssey DP III LLC. ODYSSEY (IX): Maloney OK'd as Chief Restructuring Officer --------------------------------------------------------- The Hon. Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida authorized Odyssey (IX) DP I, LLC, to employ Bill Maloney Consulting's William Maloney as chief restructuring officer nunc pro tunc to petition date. As reported in the Troubled Company Reporter on Jan. 3, 2012, the Debtor said Mr. Maloney is "absolutely essential" to the Debtor's reorganization efforts. Mr. Maloney currently serves as vice president for planning for Odyssey Entities LLC, a related entity. In addition, Mr. Maloney has served as restructuring officer for Odyssey Properties III LLC and other affiliated entities that filed for bankruptcy. Mr. Maloney charges $325 per hour for his services. The Debtor won't be responsible for any health or medical benefits for Mr. Maloney. Mr. Maloney may be reached at: BILL MALONEY CONSULTING 200 2nd Ave. S. #463 St. Petersburg, FL 33701 Tel: (727) 215-4136 Fax: (813) 200-3321 About Odyssey (IX) DP I LLC Lakeland, Florida-based Odyssey (IX) DP I LLC, owns the Ocean Breeze Plaza, a shopping center in Jensen Beach Florida. Odyssey (IX) DP I filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 11-22952) on Dec. 16, 2011, after its lender, U.S. Bank N.A. declared a default on a $16 million construction loan. Judge Catherine Peek McEwen presides over the case. Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser PA, in Tampa, Florida, serves as the Debtor's counsel. The Debtor disclosed $20,318,253 in assets and $15,911,155 in liabilities as of the Chapter 11 filing. The petition was signed by Robert Madden, president of OC DIP LLC, the Debtor's manager. Affiliates that previously filed separate Chapter 11 petitions are Century/AG - Avondale LLC, Odyssey Properties III LLC, Century (III) DP III LLC, Odyssey (III) DP III LLC, Odyssey (VI) Commercial DP I LLC, Odyssey (III) DP IX LLC, Odyssey (III) DP III LLC, and Odyssey DP III LLC. ODYSSEY (IX): Files Schedules of Assets and Liabilities ------------------------------------------------------- Odyssey (IX) DP I, LLC, filed with the U.S. Bankruptcy Court for the Middle District of Florida its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $22,196,651 B. Personal Property $121,602 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $15,837,988 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $73,167 ----------- ----------- TOTAL $20,318,253 $15,911,155 A full-text copy of the schedules is available for free at http://bankrupt.com/misc/ODYSSEY_IX_sal.pdf About Odyssey (IX) DP I LLC Lakeland, Florida-based Odyssey (IX) DP I LLC, owns the Ocean Breeze Plaza, a shopping center in Jensen Beach Florida. Odyssey (IX) DP I filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 11-22952) on Dec. 16, 2011, after its lender, U.S. Bank N.A. declared a default on a $16 million construction loan. Judge Catherine Peek McEwen presides over the case. Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser PA, in Tampa, Florida, serves as the Debtor's counsel. William Maloney and Bill Maloney Consulting serves as chief restructuring officer. The petition was signed by Robert Madden, president of OC DIP LLC, the Debtor's manager. Affiliates that previously filed separate Chapter 11 petitions are Century/AG - Avondale LLC, Odyssey Properties III LLC, Century (III) DP III LLC, Odyssey (III) DP III LLC, Odyssey (VI) Commercial DP I LLC, Odyssey (III) DP IX LLC, Odyssey (III) DP III LLC, and Odyssey DP III LLC. ODYSSEY (IX): Mediation Expected to Be Completed Wednesday ---------------------------------------------------------- The Hon. Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida ordered Odyssey (IX) DP I, LLC, and with U.S. Bank National Association to submit to mediation to resolve all disputes between them. The Court also appointed Jeffrey W. Warren, Esq., as mediator entitled to compensation at the mediator's normal hourly rate to be jointly paid by the parties upon the termination of the mediation. The parties were directed to: -- furnish a mediation statement to the mediator within 14 days from entry of the order or the earlier time as the mediator may request; and -- attend the mediation with counsel and the individual client or corporate client representative with full and absolute authority to agree to a mediated settlement, if an impasse is reached with respect to the mediation as a result of the failure of a party to comply with the requirement, such party may be liable for sanctions to include payment of all fees incurred by the other parties to the proceeding in connection with the mediation. The Court required the parties to complete the mediation by Feb. 15, 2012. Within five days following the conclusion of the mediation, the mediator will file a mediator's report and completion of mediation indicating whether the proceeding/ matters settled, was continued with the consent of the parties, or whether the mediator was forced to declare an impasse. About Odyssey (IX) DP I LLC Lakeland, Florida-based Odyssey (IX) DP I LLC, owns the Ocean Breeze Plaza, a shopping center in Jensen Beach Florida. Odyssey (IX) DP I filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 11-22952) on Dec. 16, 2011, after its lender, U.S. Bank N.A. declared a default on a $16 million construction loan. Judge Catherine Peek McEwen presides over the case. Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Prosser PA, in Tampa, Florida, serves as the Debtor's counsel. William Maloney and Bill Maloney Consulting serves as chief restructuring officer. The Debtor disclosed $20,318,253 in assets and $15,911,155 in liabilities as of the Chapter 11 filing. The petition was signed by Robert Madden, president of OC DIP LLC, the Debtor's manager. Affiliates that previously filed separate Chapter 11 petitions are Century/AG - Avondale LLC, Odyssey Properties III LLC, Century (III) DP III LLC, Odyssey (III) DP III LLC, Odyssey (VI) Commercial DP I LLC, Odyssey (III) DP IX LLC, Odyssey (III) DP III LLC, and Odyssey DP III LLC. OPEN RANGE: Wants Case Converted to Chapter 7 Proceeding -------------------------------------------------------- Greg Avery, reporter at Denver Business Journal, reports that Open Range Communications has asked a Delaware court to switch its Chapter 11 reorganization case to a Chapter 7 bankruptcy, saying it has no realistic chance to rehabilitate the business. The report relates that the company's filing to switch to Chapter 7 said that it's unable to reach a settlement with either of its main funders -- the U.S. Department of Agriculture's Rural Utilities Service (RUS) and JPMorgan offshoot One Equity Partners -- and it won't be able to pay Chapter 11 bankruptcy expenses after Feb. 24, 2012. About Open Range Greenwood Village, Colo.-based Open Range Communications Inc., a provider of wireless broadband services to 26,000 rural customers in 12 states, filed a Chapter 11 petition (Bankr. D. Del. Case No. 11-13188) on Oct. 6, 2011, to either sell the business or shut down and liquidate. Open Range disclosed about $115.1 million in assets and $102.8 million in debts. Open Range started its WiMax broadband and voice service in late 2009, backed by a $267 million loan from the U.S. Department of Agriculture's Rural Utility Service and $100 million invested by One Equity Partners, a financing arm of JPMorgan Chase & Co. Judge Kevin J. Carey presides over the case. Marion M. Quirk, Esq., at Cole, Schotz, Meisel, Forman & Leonard, serves as bankruptcy counsel. Logan & Co. serves as claims agent. FTI Consulting, Inc., will provide a chief restructuring officer, Michael E. Katzenstein; an associate chief restructuring officer, Chris Lewand; and hourly temporary staff. The petition was signed by Chris Edwards, chief financial officer. On filing for Chapter 11 protection, Open Range said it would shut down and liquidate the network if a buyer couldn't be found. Roberta A. DeAngelis, the United States Trustee for Region 3, pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Open Range Communications Inc. In December 2011, Ann Schrader at the Denver Post reported that Open Range has shut down operations after failing to get the broadcast spectrum it needed, problems with network quality and vendors, and the "sporadic" flow of money from a $267 million federal loan, of which Open Range owes a balance of $73.5 million. Open Range hired RB Capital LLC and Heritage Global Partners Inc. as auctioneers and sales agents to conduct an auction of the Debtor's assets. PACIFIC MONARCH: Baker & McKenzie Okayed as Mexican Tax Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has granted Pacific Monarch Resorts, Inc., et al., permission to employ Baker & McKenzie Abogados, S.C., as their special counsel regarding Mexican tax and regulatory law, effective as of Oct. 24, 2011. As reported in the TCR on Jan 30, 2012, Baker & McKenzie has provided legal advice and services to the Debtors since February of 2000. During the one year period prior to the Petition Date, Baker & McKenzie received compensation in the aggregate amount of $234,954 from the Debtors for prepetition services rendered on the Debtors' behalf. As of the Petition Date, the Debtors owe Baker $87,360 for prepetition services. The firm's current hourly rates range from: Principal Partner $400 - $565 National Partner $280 - $350 Associate $170 - $250 Trainee Lawyer $100 - $200 To the best of the Debtors' knowledge, Baker & McKenzie does not represent or hold any interest adverse to the Debtors or the Debtors' estates with respect to the matters for which it is sought to be employed. About Pacific Monarch Pacific Monarch Resorts, Inc., and its affiliated debtors operate a "timeshare business" business. The Debtors filed voluntary Chapter 11 petitions (Bankr. C.D. Calif. Lead Case No. 11-24720) on Oct. 24, 2011, disclosing $100 million to $500 million in both assets and debts. The affiliated debtors are Vacation Interval Realty Inc., Vacation Marketing Group Inc., MGV Cabo LLC, Desarrollo Cabo Azul, S. de R.L. de C.V., and Operadora MGVM S. de R.L. de C.V. Based in Laguna Hills, California, Pacific Monarch and its affiliates generate revenue primarily from the sale and financing of "vacation ownership points" in a timeshare program commonly known and marketed as "Monarch Grand Vacations," a multi-location vacation timeshare program that establishes a uniform plan for the development, ownership, use and enjoyment of specified resort accommodations for the benefit of its members. MGV is a nonprofit mutual benefit corporation whose members are timeshare owners, and it is administered by a board of directors elected by MGV members. As of the Petition Date, MGV owned Resort Accommodations within these resorts: Palm Canyon Resort (Palm Springs), Riviera Oaks Resort & Racquet Club (Ramona), Riviera Beach & Spa Resort - Phases I and II (Dana Point), Riviera Shores Beach (Dana Point), Cedar Breaks Lodge (Brian Head), Tahoe Seasons Resort (South Lake Tahoe), Desert Isle of Palm Springs (Palm Springs), the Cancun Resort (Las Vegas), and the Cabo Azul Resort (Los Cabos, Mexico). Future Vacation Accommodations are currently in the pre- development stage in Kona, Hawaii and Las Vegas, Nevada. Additionally, the Cabo Azul Resort has construction in progress on two buildings. The Pacific Monarch entities do not include the entities that actually own the timeshare properties that have been dedicated to use by the purchasers of timeshare points. The trusts that own the properties are not liable for the Pacific Monarch entities' obligations. MGV is not a debtor. Judge Erithe A. Smith presides over the jointly administered cases. Lawyers at Stutman, Treister & Glatt PC, in Los Angeles, serve as counsel to the Debtors. The petition was signed by Mark D. Post, chief executive officer and director. Houlihan Lokey Capital, Inc., serves as investment baker to the Debtors. Raymond J. Gaskill, Esq., represents the Debtors as special timeshare counsel. Greenberg, Whitcombe & Takeuchi, LLP, serves as the Debtors' special counsel for employment and labor matters. Lesley, Thomas, Schwarz & Postma, Inc., serves as the Debtors' tax and vacation ownership points accountants. White & Case LLP is the Debtors' special tax counsel. Attorneys at Brinkman Portillo Ronk, PC, serve as counsel to the Official Committee of Unsecured Creditors. Creditor Ikon Financial Services is represented by Christine R. Etheridge. Creditor California Bank & Trust is represented in the case by Michael G. Fletcher at Frandzel Robins Bloom & Csato, L.C. Marshall F. Goldberg, Esq. at Glass & Goldberg argues for creditor Fifth Third Bank. Creditor The Macerich Company is represented by Brian D. Huben, Esq. at Katten Muchin Rosenman LLP. Interested Party DPM Acquisition is represented by Joshua D. Wayser, Esq. at Katten Muchin Rosenman LLP. P.H. GLATFELTER: Moody's Raises Corporate Family Rating to 'Ba1' ---------------------------------------------------------------- Moody's Investors Service upgraded the corporate family rating (CFR) and the senior unsecured rating of P. H. Glatfelter Company (Glatfelter) to Ba1 from Ba2 and changed the company's speculative liquidity rating to SGL-1 from SGL-2. The upgrade reflects the company's strong financial performance and Moody's expectations of the maintenance of strong credit protection metrics. Moody's estimates that Glatfelter's leverage (adjusted debt to EBITDA) will be below 2x through mid-2013. The change in the speculative grade liquidity rating reflects the company's improved financial flexibility resulting from increased revolver availability, expectations of continued positive free cash flow generation and improved headroom under its financial covenants. The rating outlook is stable. Upgrades: Issuer: P. H. Glatfelter Company -- Probability of Default Rating, Upgraded to Ba1 from Ba2 -- Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2 -- Corporate Family Rating, Upgraded to Ba1 from Ba2 -- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba1 from Ba2 RATINGS RATIONALE Glatfelter's Ba1 corporate family rating reflects the company's leading market position in several niche segments of the specialty paper markets, its geographic diversity and sound credit protection measures. The rating also reflects Glatfelter's very good liquidity position and expectations that growth in the company's composite fibers and air-laid materials segments will more than offset the earnings decline in the company's paper business. The rating also considers the company's relatively small size and its exposure to potential contingencies associated with environmental issues. Glatfelter's SGL-1 rating reflects very good liquidity, which is supported by approximately $38 million of cash (December 2011) and net availability of approximately $318 million on the company's committed $350 million multi-currency revolving credit facility (net of $27 million drawn and $5 million of letter of credit use). The credit facility matures in November 2016. Moody's estimates free cash flow of approximately $30 million over the next 12 months with seasonal working capital swings. Covenant issues are not expected over the near term. Most of the company's assets are unencumbered and the company's alternative liquidity potential includes 32,000 acres of timberlands that can be sold to augment liquidity. The stable outlook reflects Glatfelter's ability to offset declining demand in its paper business through growth in its other businesses or through modest acquisitions. Moody's anticipates that the company will maintain conservative financial policies and will not pressure its balance sheet or liquidity position with excessive dividend payouts, share buy backs or credit unfriendly acquisitions. An upgrade may be warranted if the company maintains its strong liquidity position, remains in a position to manage its environmental issues, and generates sustained normalized (RCF- CapEx)/TD exceeding 15% and EBITDA margins exceeding 16% . The ratings may be downgraded should anticipated environmental costs escalate significantly, or if there is an inability by the company to offset the secular decline in paper demand such that normalized (RCF-CapEx)/TD declines below 10% for a sustained period of time. The principal methodology used in rating Glatfelter was the Global Paper and Forest Products Industry Methodology, published September 2009. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Headquartered in York, Pennsylvania, P. H. Glatfelter Company (Glatfelter) is a manufacturer of specialty papers and fiber-based engineered products. LTM December 31, 2011 revenue was $1.6 billion, with about two-thirds of the company's sales generated from assets located in North America and the balance from operating assets located in Europe. PIMA AND TUCSON: Moody's Cuts Series 2007A-2 Note Rating to 'B3' ---------------------------------------------------------------- Moody's Investors Service has downgraded Pima and Tucson County, AZ Industrial Development Authority Single Family Mortgage Revenue Subordinate Bonds Series 2007A-2 to B3 from Ba3, and has removed it from review for downgrade. The rating action affects approximately $675,000 of outstanding debt and was driven by an assessment of additional cash flow scenarios on the program and deteriorating loan portfolio performance. RATING RATIONALE Our analysis of several cash flow scenarios indicates the possibility of revenue shortfalls in approximately 11 years. Additionally, loan portfolio performance has deteriorated since October 2011. As of January 3, 2012, the number of current loans in delinquency or default has increased to 37% from 30%, and the composition of delinquent loans that are 120 days delinquent -- and therefore have a lower probability of performing -- has significantly increased. The overall housing market in Tucson, AZ remains weak, and house prices have declined to near 2001 levels. The 2007 A-2 subordinate bonds were issued in conjunction with the 2007 A-1 senior bonds. The senior bonds are not affected by this rating action and are rated Aaa(sf). WHAT COULD CHANGE THE RATING UP: * Material improvement in loan portfolio performance, such as non- performing (delinquent) loans becoming current * Inflows of senior surplus which benefit the 2007A-2 subordinate bonds in a way that significantly reduces dependability on mortgage repayments from the second loan portfolio WHAT COULD CHANGE THE RATING DOWN: * Further deterioration of the loan portfolio's performance * Debt service reserve fund is drawn down, or has a high probability that it will be, in order to fulfill debt service deficiencies The principal methodology used in this rating was Moody's Rating Approach For Single Family, Whole-Loan Housing Programs published in May 1999. PINNACLE AIRLINES: Amends Capacity Purchase Pact with United Air ---------------------------------------------------------------- Pinnacle Airlines Corp. and its subsidiary, Colgan Air, Inc., entered into an agreement with Continental Airlines, Inc., and United Air Lines, Inc.: (i) amending the terms of the parties' Capacity Purchase Agreement dated Feb. 2, 2007, for an interim period; and (ii) setting forth provisions related to possible further modifications to and restructuring of the Capacity Purchase Agreement after such period. The material terms of the Interim Agreement include: * The term of the Interim Agreement commenced on Feb. 1, 2012, and will end on April 2, 2012. * During the Term, United will pay certain aircraft ownership expenses and increased rates for Colgan's provision of regional air services, including services provided by Colgan's Saab aircraft under provisions substantially identical to the Capacity Purchase Agreement. Increased revenue received from United under the Capacity Purchase Agreement is expected to more than offset the lost benefit the Company previously negotiated with Export Development Canada for deferral of principal and interest payments for Q400 aircraft. * If the parties do not reach a long term agreement revising the relationship of the parties under the Capacity Purchase Agreement and their pro-rate agreements beyond the Term, then United will have the right, upon notice, to elect to modify the number of aircraft Colgan would operate under the Capacity Purchase Agreement after expiration of the Term. United would continue to pay the increased rates during this modification period. * The increases in the rates to be paid by United to Colgan under the Capacity Purchase Agreement during the Term will be structured as an interest-free loan which will be automatically forgiven upon expiration of the Term or of the modification period, whichever is applicable. As previously disclosed, the Company is currently executing initiatives to increase its short-term and long-term liquidity and reduce costs. Given the substantial time and resources focused on these efforts, the Company is still finalizing its financial results for the quarter and year ended Dec. 31, 2011. As a result, the Company does not anticipate releasing fourth quarter 2011 earnings, filing its 2011 Form 10-K, or hosting its quarterly earnings call until a not yet determined date in March 2012. About Pinnacle Airlines Corp. Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. The Company reported $8.81 million on $938.05 million of total operating revenue for the nine months ended Sept. 30, 2011, compared with net income of $17.02 million on $729.13 million of total operating revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. PMI GROUP: Committee Can Retain Morrison & Foerster as Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted the Official Committee of Unsecured Creditors of The PMI Group, Inc., permission to retain Morrison & Foerster LLP as counsel nunc pro tunc to Jan. 3, 2012. As reported in the TCR on Feb. 2, 2012, as bankruptcy counsel, Morrison & Foerster LLP, will, among others: a) advise the Committee in connection with its powers and duties under the Bankruptcy Code, the Bankruptcy Rules and the Local Rules; b) assist and advise the Committee in its consultation with the Debtor relative to the administration of the Debtor's case; and c) attend meeting and negotiate with the representatives of the Debtor. To the best of the Committee's knowledge, information, and belief, Morrison & Foerster does not hold or represent an interest adverse to the Debtor's estate, and is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy code and as used in Section 328(c) of the Bankruptcy Code. Morrison Foerster's principal attorneys for this representation and their current rates are: Anthony Princi,, Esq. $975 Jordan A. Wishnew, Esq. $680 James A. Newton, Esq. $445 Paraprofessionals $185 to $360 About PMI Group Del.-based The PMI Group, Inc., is an insurance holding company whose stock had, until Oct. 21, 2011, been publicly-traded on the New York Stock Exchange. Through its principal regulated subsidiary, PMI Mortgage Insurance Co., and its affiliated companies, the Debtor provides residential mortgage insurance in the United States. The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor disclosed $167,963,354 in assets and $770,362,195 in liabilities. Stephen Smith signed the petition as chairman, chief executive officer, president and chief operating officer. The Debtor said in the filing that it does not have the financial resources to pay the outstanding principal amount of the 4.50% Convertible Senior Notes, 6.000% Senior Notes and the 6.625% Senior Notes if those amounts were to become due and payable. The Debtor is represented by James L. Patton, Esq., Pauline K. Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP. PMI GROUP: Committee Can Retain Womble Carlyle as Co-Counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors of The PMI Group, Inc., permission to retain Womble Carlyle Sandridge & Rice, LLP, as bankruptcy co-counsel, nunc pro tunc to Jan. 3, 2012. As reported in the TCR on Feb. 2, 2012, as bankruptcy co-counsel, Womble Carlyle will, among others: (a) assist and advise the Committee in its discussions with the Debtor and other parties in interest regarding the overall administration of the Debtor's case; (b) represent the Committee at hearings to be held before the Court and communicating with the Committee regarding the matters heard and the issues raised as well as the decisions and considerations of the Court; and (c) assist and advise the Committee in its examination and analysis of the conduct of the Debtor's affairs. The Committee believes that Womble Carlyle is a disinterested person, and does not hold or represent an interest adverse to the Debtor's estate with respect to the matters for which Womble Carlyle is to be employed, as required by Section 3287(c) of the Bankruptcy Code. It is anticipated that the lead Womble Carlyle attorneys who will represent the Committee and their current rates are: Francis A. Monaco, Jr., Esq. $630 Kevin J. Mangan, Esq. $465 Thomas M. Horan, Esq. $360 Paraprofessionals $110-$225 About PMI Group Del.-based The PMI Group, Inc., is an insurance holding company whose stock had, until Oct. 21, 2011, been publicly-traded on the New York Stock Exchange. Through its principal regulated subsidiary, PMI Mortgage Insurance Co., and its affiliated companies, the Debtor provides residential mortgage insurance in the United States. The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor disclosed $167,963,354 in assets and $770,362,195 in liabilities. Stephen Smith signed the petition as chairman, chief executive officer, president and chief operating officer. The Debtor said in the filing that it does not have the financial resources to pay the outstanding principal amount of the 4.50% Convertible Senior Notes, 6.000% Senior Notes and the 6.625% Senior Notes if those amounts were to become due and payable. The Debtor is represented by James L. Patton, Esq., Pauline K. Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP. POTOMAC SUPPLY: Owners Discuss Use of Cash Collateral ----------------------------------------------------- Amanda Ault at Westmoreland News reports that Potomac Supply's owners were expected to appear before Judge Douglas Tice of the U.S. Bankruptcy Court for the Eastern District of Virginia on Feb. 8, 2012, to discuss the use of cash collateral as the Kinsale- based company attempts to reorganize and emerge from Chapter 11 bankruptcy. The report says the judge will also consider a request from Regions Bank to file a confidential statement "under seal." The report relates that, on Jan. 27, 2012, Judge Tice allowed Potomac Supply the use of cash collateral on an interim basis. Potomac Supply planned to use this collateral to aid in its bankruptcy dealings. The interim order required a final hearing on the matter set for Feb. 8, 2012. According to the report, prior to the judge's interim order, lawyers for Regions Bank filed an objection to the request, maintaining that Potomac Supply does not have the assets to provide for a 20% "equity cushion" that most bankruptcy courts require a company to have to insure creditors will receive some compensation. The report says Regions Bank maintains it warned Potomac in June 2011 that it would need to find a replacement lender, and gave the company six months to find a new lender or "develop a wind-down strategy." The bank maintains that a reorganization "is not mathematically possible" because Potomac doesn't have enough "non- core assets" to pay its creditors and then reorganize around its "core" assets. The report notes, following the bank's objection to Potomac's use of cash collateral, the bank's lawyers also filed a motion requesting to file a statement regarding Potomac Supply's collateral "under seal." About Potomac Supply Corp. Kinsale, Virginia-based building-supply manufacturer Potomac Supply Corporation filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case No. 12-30347) on Jan. 20, 2012, estimating assets and debts of $10 million to $50 million. Potomac in mid-January announced it was suspending manufacturing operations in Kinsale after its lender refused to provide financing without additional investment. Judge Douglas O. Tice, Jr. presides over the case. Patrick J. Potter, Esq., at Pillsbury Winthrop Shaw Pittman LLP, serves as the Debtor's bankruptcy counsel. The petition was signed by William T. Carden, Jr., chief executive officer. PRM SMITH: Court Approves Benjamin Currence as Litigation Counsel ----------------------------------------------------------------- The Bankruptcy Court authorized PRM Smith Bay, LLC, to employ Benjamin A. Currence, Esq., to represent it in a foreclosure action pending in the U.S. District Court of the Virgin Islands, Division of St. Thomas and St. John, Case No. 10-00015. About PRM Smith Bay Chicago, Illinois-based PRM Smith Bay, LLC, aka PRM Smith Bay, LLP, was formed in May 2004 for the purpose of holding an undeveloped 7.5 acre parcel of land on St. Thomas in the United States Virgin Islands known as Cabes Point. PRM Realty Group, LLC, is the 100% owner and manager of the Debtor. The Debtor filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 11-30444) on Jan. 20, 2011. Gerrit M. Pronske, Esq., Rakhee V. Patel, Esq., and Melanie P. Goolsby, Esq., at Pronske & Patel, P.C., in Dallas, serve as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $13,031,162 in assets and $6,781,074 in liabilities as of the petition date. Affiliates Bon Secour Partners, LLC (Bankr. N.D. Tex. Case No. 09-37580), PRS II, LLC (Bankr. N.D. Tex. Case No. 09-31436), PRM Realty Group, LLC (Bankr. N.D. Tex. Case No. 10-30241), PMP II, LLC (Bankr. N.D. Tex. Case No. 10-30252), Maluhia Development Group, LLC (Bankr. N.D. Tex. Case No. 10-30475), Maluhia One, LLC (Bankr. N.D. Tex. Case No. 10-30987), Maluhia Eight, LLC (Bankr. N.D. Tex. Case No. 10-30986), Maluhia Nine, LLC (Bankr. N.D. Tex. Case No. 10-30988), Long Bay Partners, LLC (Bankr. N.D. Tex. Case No. 10-35124), PRM Development, LLC (Bankr. N.D. Tex. Case No. 10- 35547), Little Hans Lollik Holdings, LLP (Bankr. N.D. Tex. Case No. 10-36159), and Hans Lollick Land Company, Limited (Bankr. N.D. Tex. Case No. 10-36161) filed separate Chapter 11 petitions. QUANTUM CORP: Capital Research Discloses 7.8% Equity Stake ---------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Capital Research Global Investors disclosed that, as of Dec. 30, 2011, it beneficially owns 18,279,499 shares of common stock of Quantum Corporation representing 7.8% of the shares outstanding. As previously reported by the TCR on July 21, 2010, Capital Research disclosed beneficial ownership of 22,442,508 shares. A full-text copy of the amended filing is available for free at http://is.gd/s6CPkJ About Quantum Corp. Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive. Quantum provides a comprehensive, integrated range of disk, tape, and software solutions supported by a world-class sales and service organization. The Company's balance sheet at Sept. 30, 2011, showed $394.19 million in total assets, $443.32 million in total liabilities and a $49.13 million total stockholders' deficit. * * * In January 2011, Moody's Investors Service upgraded Quantum Corporation's Corporate Family and Probability of Default ratings to B2 from B3 and revised the ratings on the senior secured debt obligations to Ba3 from B1. The rating outlook is positive. The upgrade of the CFR to B2 reflects Quantum's improved operating performance, which stems from strong customer adoption and growth of its higher margin branded disk-based systems and software products, which Moody's expects to continue in FY12. In March 2011, Standard & Poor's Ratings Services raised its corporate credit rating on storage manufacturer Quantum Corp. to 'B' from 'B-'. The outlook is stable. "The upgrade reflects that the company has posted four sequential quarters of sustained EBITDA generation, despite ongoing declines in its core tape business and the absence of an EMC licensing arrangement," said Standard & Poor's credit analyst Lucy Patricola. In addition, debt/EBITDA has been stable for the last four quarters at about 4x and reduced from 2009 levels, primarily reflecting application of free cash flow to debt reduction. RAYMOND MARC GUILLAUME: Tall Pines Claim Pegged at $10,500 ---------------------------------------------------------- Bankruptcy Judge Joel B. Rosenthal estimated Tall Pines LLC's claim against the bankruptcy estate of Raymond Marc Guillaume, Jr. d/b/a DWP Translation Services, at $10,500. Tall Pines filed an unliquidated, disputed proof of claim for $96,469 (Claim 15-1) arising from Mr. Guillaume's alleged breach of two contracts for the purchase of real estate in Georgia. The Debtor objected to Claim 15-1. Three components comprise Claim 15-1 -- a breach of contract claim for $10,500; a punitive damages claim based on the Debtor's alleged fraud for $40,500; and attorney's fees claim related to the alleged fraud claim for $54,469.06. Judge Rosenthal said Tall Pines has sufficiently demonstrated the amount owed on the breach of contract claim is $10,500. As to the fraud claim, the Court said Tall Pines has not satisfied its burden to show fraud or provided sufficient justification for either punitive damages or attorney's fees. A copy of the Court's Feb. 8, 2012 Decision and Order is available at http://is.gd/ZuoXID from Leagle.com. Raymond Marc Guillaume, Jr., filed a pro se Chapter 11 petition (Bankr. E.D. N.Y. Case No. 10-51417) on Dec. 6, 2010, listing under $1 million in assets and debts. REAL MEX: Creditors Accuse Noteholders of Gamesmanship ------------------------------------------------------ Lisa Uhlman at Bankruptcy Law360 reports that Real Mex Restaurants Inc.'s unsecured creditors on Feb. 8 attacked the Debtor's motion to approve an asset sale to a group of noteholders including private equity investors, saying the noteholders' conduct will deprive them of any recovery. The official committee of unsecured creditors said it has warned that prepetition noteholders, including Special Value Continuation Partners LP, Tennenbaum Opportunities Partners V LP and J.P. Morgan Investment Management Inc., will be able to use protections granted to Real Mex's debtor-in-possession lender to freeze out general unsecured creditors. About Real Mex Based in Cypress, California, Real Mex Restaurants, Inc., owns and operates restaurants, primarily through its major subsidiaries El Torito Restaurants, Inc., Chevys Restaurants, LLC, and Acapulco Restaurants, Inc. It has 178 restaurants, with 149 in California. There are also 30 franchised locations. It acquired Chevys Inc. for $90 million through confirmation of Chevy's Chapter 11 plan in 2004. Real Mex Restaurants and 16 of its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-13122 to 11- 13138) on Oct. 4, 2011. Judge Brendan Linehan Shannon oversees the case. Judge Peter Walsh was initially assigned to the case. The Debtors are represented by Mark Shinderman, Esq., Fred Neufeld, Esq., and Haig M. Maghakian, Esq., at Milbank, Tweed, Hadley & McCloy LLP; and Laura Davis Jones, Esq., and Curtis A. Helm, Esq., at Pachulski Stang Ziehl & Jones LLP as counsel. The Debtors' financial advisors are Imperial Capital, LLC. The Debtors' claims, noticing, soliciting and balloting agent is Epiq Bankruptcy Solutions, LLC. Assets are $272.2 million while debt totals $250 million, according to the Chapter 11 petition. The petitions were signed by Richard P. Dutkiewiez, chief financial officer and executive vice president. Counsel to GE Capital Corp., the DIP Agent and the Prepetition First Lien Secured Agent, are Jeffrey G. Moran, Esq., and Peter P. Knight, Esq., at Latham & Watkins LLP; and Kurt F. Gwynne, Esq., at Reed Smith LLP as counsel. Counsel to the Prepetition Secured Second Lien Trustee are Mark F. Hebbeln, Esq., and Harold L. Kaplan, Esq., at Foley & Lardner LLP. Counsel to the Majority Prepetition Second Lien Secured Noteholders are Adam C. Harris, Esq., and David M. Hillman, Esq., at Schulte Roth & Zabel LLP; and Russell C. Silberglied, Esq., at Richards Layton & Finger. Z Capital Management LLC, which holds nearly 70% of the Opco term loan, is represented by Derek C. Abbott, Esq., and Chad A. Fights, Esq., at Morris Nichols Arsht & Tunnell LLP; and Lee R. Bogdanoff, Esq., and Whitman L. Holt, Esq., at Klee Tuchin Bogdanoff & Stern LLP. REAL MEX: Board Approves Bid to Acquire All Assets -------------------------------------------------- BankruptcyData.com reports that Real Mex Restaurants announced that its board voted to approve a bid to acquire virtually all assets of the Company and its subsidiaries from a newly-created entity associated with certain of the Company's noteholders, including affiliates of Tennenbaum Capital Partners, Z Capital Partners and J.P. Morgan Investment Management. A sale hearing is scheduled for Feb. 10, 2012. The noteholders include investors that were in the Company's pre-petition capital structure. "We remain confident in our turnaround plans and are looking forward to putting this challenging but necessary process behind us," said Real Mex Restaurants' chairman and C.E.O., David Goronkin. "We are close to accomplishing our objectives in the Chapter 11 process and have the right teams in place to move our brands and company forward. A stronger financial foundation will allow us to accomplish this more quickly." About Real Mex Based in Cypress, California, Real Mex Restaurants, Inc., owns and operates restaurants, primarily through its major subsidiaries El Torito Restaurants, Inc., Chevys Restaurants, LLC, and Acapulco Restaurants, Inc. It has 178 restaurants, with 149 in California. There are also 30 franchised locations. It acquired Chevys Inc. for $90 million through confirmation of Chevy's Chapter 11 plan in 2004. Real Mex Restaurants and 16 of its affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-13122 to 11- 13138) on Oct. 4, 2011. Judge Brendan Linehan Shannon oversees the case. Judge Peter Walsh was initially assigned to the case. The Debtors are represented by Mark Shinderman, Esq., Fred Neufeld, Esq., and Haig M. Maghakian, Esq., at Milbank, Tweed, Hadley & McCloy LLP; and Laura Davis Jones, Esq., and Curtis A. Helm, Esq., at Pachulski Stang Ziehl & Jones LLP as counsel. The Debtors' financial advisors are Imperial Capital, LLC. The Debtors' claims, noticing, soliciting and balloting agent is Epiq Bankruptcy Solutions, LLC. Assets are $272.2 million while debt totals $250 million, according to the Chapter 11 petition. The petitions were signed by Richard P. Dutkiewiez, chief financial officer and executive vice president. Counsel to GE Capital Corp., the DIP Agent and the Prepetition First Lien Secured Agent, are Jeffrey G. Moran, Esq., and Peter P. Knight, Esq., at Latham & Watkins LLP; and Kurt F. Gwynne, Esq., at Reed Smith LLP as counsel. Counsel to the Prepetition Secured Second Lien Trustee are Mark F. Hebbeln, Esq., and Harold L. Kaplan, Esq., at Foley & Lardner LLP. Counsel to the Majority Prepetition Second Lien Secured Noteholders are Adam C. Harris, Esq., and David M. Hillman, Esq., at Schulte Roth & Zabel LLP; and Russell C. Silberglied, Esq., at Richards Layton & Finger. Z Capital Management LLC, which holds nearly 70% of the Opco term loan, is represented by Derek C. Abbott, Esq., and Chad A. Fights, Esq., at Morris Nichols Arsht & Tunnell LLP; and Lee R. Bogdanoff, Esq., and Whitman L. Holt, Esq., at Klee Tuchin Bogdanoff & Stern LLP. REYNOLDS GROUP: S&P Affirms 'B+' Corporate; Outlook Negative ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Auckland, New Zealand-based Reynolds Group Holdings Ltd. and its subsidiaries. "The outlook is negative. At the same time, we assigned our senior unsecured debt rating of 'B- ' (two notches below the corporate credit rating) and recovery rating of '6' to Reynolds' $1.25 billion 9.875% proposed senior unsecured notes due August 2019 to be issued under Rule 144A with registration rights. The '6' recovery rating indicates our expectation for a negligible (0% to 10%) recovery in the event of a payment default," S&P said. "We have also revised our liquidity assessment to 'adequate' from 'less than adequate' (under our criteria) in light of the proposed refinancing which improves the company's debt maturity profile (with minimal debt maturities until 2016) and liquidity position," S&P said. "The ratings on Reynolds reflect Standard & Poor's assessment of the company's business risk profile as 'strong' and financial risk profile as 'highly leveraged' (as our criteria define the terms), as well as its status as a market-leading provider of food and beverage packaging," said Standard & Poor's credit analyst Liley Mehta. "Reynolds is owned by Rank Group, a New Zealand-based investment firm controlled by a single individual. The company has grown rapidly via debt-financed acquisitions during the past three years. The company is one of the world's leading and most- diversified consumer and foodservice packaging providers, with annual revenues of nearly $14 billion, pro forma for the acquisition of Graham Packaging Holdings Co. completed in September 2011 for $4.5 billion. The prevalence of food-related products lends considerable stability to sales and operating results even in periods of economic weakness. We expect EBITDA margins to be close to 20% -- among the highest in the industry," S&P said. "Reynolds will use the net proceeds from the proposed notes issuance primarily to redeem the Graham Packaging senior notes due 2017 and 2018, Graham Packaging's senior subordinated notes due 2014, and the existing $249 million in Pactiv Corp. (which Reynolds acquired in November 2010) unsecured notes due 2012. Besides the debt paydown, Reynolds will maintain remaining proceeds as cash on the balance sheet to bolster liquidity and for general corporate purposes. Following completion of the notes offering and subsequent redemption of all Graham's existing debt, we expect to withdraw our corporate credit rating on Graham," S&P said. "Given its high debt leverage, Reynolds is vulnerable to raw material cost swings, particularly in plastic resin and aluminum. It's also subject to seasonal working capital variations, with sales typically higher in the warmer months. Although management has a good track record of achieving targeted cost reductions and reducing debt somewhat following past acquisitions, the Pactiv and Graham transactions are much larger than the other acquisitions, and the company needs to gradually improve operating results or reduce debt to improve credit quality in line with the ratings. We believe Reynolds should be able to obtain the approximately $400 million of targeted synergies and other cost reductions associated with both of these acquisitions and the smaller acquisition of Dopaco Inc. in May 2011," S&P said. "Synergy realization, together with modest earnings growth or debt reduction, should bring credit measures to appropriate levels so that total adjusted debt to EBITDA is about 6x. Pro forma for the proposed notes issuance, we estimate total adjusted debt to be about $18.5 billion including about $800 million of tax-effected postretirement liabilities and capitalized operating leases. As of Sept. 30, 2011, we estimate total adjusted debt to trailing-12- month EBITDA at about 7.5x pro forma for all recent acquisitions before unrealized synergies," S&P said. "The outlook is negative. Pro forma for the Graham acquisition, adjusted debt to EBITDA is considerably greater than the 6x we consider consistent with the rating. We could lower the ratings if Reynolds does not achieve the targeted benefits from the Pactiv and Graham acquisitions, has unexpected difficulty integrating acquired operations, or does not consistently generate positive free operating cash flow," S&P said. "For us to consider a downgrade, EBITDA margins would have to deteriorate to about 17% on flat sales during 2012, based on our view of the company's pro forma adjusted debt levels," Ms. Mehta continued. "Cash flow could weaken to less than we currently anticipate if deteriorating economic conditions cause a significant slowdown in consumer spending or the company experiences heightened competition in any of its businesses. We would also consider a downgrade if liquidity erodes significantly, or if raw material prices rise so sharply that the company is unable to pass on its higher costs to customers, or if it were in danger of violating financial covenants. We could also lower the ratings if the company undertakes another large, debt-financed acquisition. Reynolds' current very aggressive financial policies make an upgrade unlikely at this time." RIDGE PARK: Stipulation for Continued Cash Collateral Use OK'd -------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved a stipulation authorizing Ridge Parks Office LLC to use the cash collateral in which CSMC 2006-C5 Better World Limited Partnership asserts a security interest. As reported in the Troubled Company Reporter on Jan. 3, 2012, CSMC is the current owner and holder of the prepetition loan made to the Debtor in the original principal amount of $11,250. The stipulation entered between the Debtor and CSMC provides that, among other things: -- CSMC consents to the Debtor's use of cash collateral until Feb. 29, 2012; -- the Debtor is authorized to deviate from the figures in the Budget by up to 15% per month on a line item basis only; -- CSMC will receive a replacement lien on all existing and hereafter acquired property and assets of the Debtor, a senior in priority to all liens and security interests; and -- the Debtor will deposit any and all cash collateral of CSMC in a segregated debtor-in-possession account and will not commingle any cash collateral of CSMC with any other funds of the Debtor. About Ridge Park Office Temecula, California-based Ridge Park Office, LLC, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-33683) on July 22, 2011. The petition was signed by Paul Garrett, president of Redhawk Communities, Inc. Ron Bender, Esq., and Krikor J. Meshefejian, Esq., at Levene, Neale, Bender, Yoo & Brill LLP, in Los Angeles, Calif., represent the Debtor as counsel. Ridge Park affiliates that have separately filed Chapter 11 petitions are: RCI Regional Grove, LLC (Case No. 11-22055) filed on April 12, 2011; Diaz Road Properties, LLC (Case No. 11-28473) and RCI Rio Nedo, LLC (Case No. 11-28470) both filed on June 6, 2011; and Woods Canyon Associates L.P. (Case No. 11-32418) filed on July 11, 2011. The Ridge Park case was originally assigned to Judge Catherine E. Bauer but was later moved to Judge Scott C. Clarkson, who oversees the affiliates' cases. Prepetition lender CSMC 2006-C5 Better World Limited Partnership is represented by H. Mark Mersel, Esq., at Bryan Cave LLP. The Debtor disclosed liabilities of $11,254,887. ROCKWOOD SPECIALTIES: S&P Raises Corp. Credit Rating to 'BB+' ------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings, including the corporate credit rating, on Princeton, N.J.-based specialty chemicals producer Rockwood Specialties Group Inc. (Rockwood) to 'BB+' from 'BB'. "At the same time, we assigned our 'BBB-' issue rating with a recovery rating of '2', indicating our expectation for a substantial recovery (70% to 90%) in the event of a payment default, to Rockwood's proposed $350 million first-lien senior secured term loan A. We also revised our recovery rating on the company's existing senior secured debt to '2' from '1'. Our issue- level rating on existing senior secured debt remains at 'BBB-'. The outlook is stable," S&P said. "We have also raised our issue rating on Rockwood's existing subordinated debt to 'BB-' from 'B+', and maintained the recovery rating at '6', indicating our expectations for a negligible recovery (0% to 10%) in the event of a payment default. We will withdraw our ratings on the subordinated debt following the close of the transaction and the expected repayment of this debt utilizing proceeds from the proposed term loan and cash on the balance sheet," S&P said. "The rating actions reflect improvements in Rockwood's leverage- related pro forma credit metrics and our expectation that Rockwood's satisfactory business profile and prudent financial policy will sustain credit metrics at levels appropriate for the ratings," said Standard & Poor's credit analyst Paul Kurias. "The company's key ratio of funds from operations (FFO) to total debt was nearly 29% as of Sept. 30, 2011 -- an improvement from 18% a year earlier. The improvement reflects the reduction in debt and strengthening of EBITDA and cash flow generation, which we believe is sustainable. We expect this ratio to remain within our range of expectations of 25% to 30% at the current rating, or higher. Pro forma for the proposed transaction and the debt repayment, we expect FFO to total debt to strengthen to above 30%, providing the company with some cushion at the rating for potential modest increases in debt or potential operating weakness in its key overseas markets including Europe. We expect Rockwood will continue to prudently use debt and maintain leverage at appropriate levels after factoring in growth initiatives and any potential shareholder rewards. We believe that the strength in the company's business profile could offset potential risks from slowing economic growth in its European markets including Germany, its largest market. In our base case scenario forecasts, we anticipate that Rockwood's portfolio of specialty businesses will continue to grow at a rate above GDP growth in its markets, and for EBITDA margins to remain above 20%. Its last-12-month EBITDA margin as of Sept. 30, 2011, was nearly 24%," S&P said. "The ratings on Rockwood reflect our assessment of the company's financial risk profile as 'significant' and business risk profile as 'satisfactory'. Our assessment of Rockwood's financial risk profile includes an expectation for a continuation of moderate financial policies that support improved leverage metrics. We expect total adjusted debt pro forma for the proposed transaction to be approximately $1.9 billion, a significant reduction from $2.5 billion a year ago and $2.8 billion two years ago. We adjust debt to include unfunded employee benefit obligations and capitalized operating leases. We expect the company will remain prudent in its use of debt and that its leverage, after factoring in growth initiatives and any potential shareholder rewards, will remain at appropriate levels," S&P said. "The stable outlook reflects our expectations that Rockwood will be able to maintain its elevated EBITDA levels even in a scenario of slowing economic growth in key markets. Our base-case economic forecast is for very modest growth rates of about 0.6% in Germany, where the company generates more than half its revenue and for zero growth in the Eurozone. Still, we expect Rockwood will continue its recent trend of growth at rates well above GDP rates in its markets as it benefits from a portfolio of specialty businesses, some of which have growth drivers that are not linked to GDP growth. Importantly, we assume management will support credit quality," S&P said. "At the current ratings, we do not anticipate any significant improvement in credit quality, and it's unlikely that we would raise the ratings over the next year," Mr. Kurias continued. "We could lower ratings if debt levels unexpectedly increased and if revenue or earnings and cash flow unexpectedly declined by levels exceeding the 10% decline considered in our downside scenario, so that FFO to total debt weakened to below 20% with no prospect of immediate recovery." SEALY CORP: Franklin Resources Ceases to Hold 5% Equity Stake ------------------------------------------------------------- Franklin Resources, Inc., and its affiliates disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that they beneficially own 3,655,420 shares of common stock of Sealy Corporation representing 3.6% of the shares outstanding. As previously reported by the TCR on Feb. 11, 2010, Franklin Resources disclosed beneficial ownership of 7,884,645 shares. A full-text copy of the amended filing is available for free at http://is.gd/2qCAMl About Sealy Corp. Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) -- http://www.sealy.com/-- is the largest bedding manufacturer in the world with sales of $1.5 billion in fiscal 2008. The Company manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), including SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns & Foster(R), and Bassett(R) brands. Sealy operates 25 plants in North America, and has the largest market share and highest consumer awareness of any bedding brand on the continent. In the United States, Sealy sells its products to approximately 3,000 customers with more than 7,000 retail outlets. The Company reported a net loss of $9.88 million on $1.23 billion of sales for the 12 months ended Nov. 27, 2011, compared with a net loss of $13.74 million on $1.21 billion of net sales during the prior year. The Company reported a net loss of $15.20 million on $269.25 million of net sales for the three months ended Nov. 27, 2011, compared with a net loss of $4.48 million on $296.55 million of net sales for the same period a year ago. The Company's balance sheet as of Nov. 27, 2011, showed $919.19 million in total assets, $999.75 million in total liabilities, and a $80.56 million stockholders' deficit. * * * Sealy carries 'B' local and issuer credit ratings from Standard & Poor's. SEARCHMEDIA HOLDINGS: Has Direct Control of Subsidiaries -------------------------------------------------------- SearchMedia Holdings Limited has direct equity control of its subsidiaries and has terminated its Variable Interest Equity structure. The Company believes that having full equity and operational control of subsidiaries is more advantageous to the Company and its shareholders since the Company's subsidiary Ad-Icon Company Limited now meets the various regulatory requirements under Chinese law necessary for direct operation in the media industry. Mr. Wilfred Chow, Chief Financial Officer of SearchMedia, commented, "We are pleased to have terminated our VIE structure as we now have direct equity control of our subsidiaries. The VIE structure has come under significant scrutiny recently in China and carries with it many of the operational risks outlined in our public filings. In addition to elimination of these uncertainties and added transparency, the termination of our VIE structure will eliminate certain liabilities of the Company and reduce certain ongoing expenses." Plan of Merger Amendment SearchMedia Holdings Limited, Earl Yen, the representative for China Seed Ventures, L.P., and Qinying Liu, the management shareholder representative, entered into the Fifth Amendment to the Agreement and Plan of Merger, Conversion and Share Exchange, dated as of March 31, 2009, as amended. The sole purpose of the Amendment was to delete in its entirety Section 12.4 of the Agreement and Plan of Merger pertaining to the composition of the Board of Directors of the Company. About SearchMedia SearchMedia is a leading nationwide multi-platform media company and one of the largest operators of integrated outdoor billboard and in-elevator advertising networks in China. SearchMedia operates a network of high-impact billboards and one of China's largest networks of in-elevator advertisement panels in 50 cities throughout China. Additionally, SearchMedia operates a network of large-format light boxes in concourses of eleven major subway lines in Shanghai. SearchMedia's core outdoor billboard and in- elevator platforms are complemented by its subway advertising platform, which together enable it to provide a multi-platform, "one-stop shop" services for its local, national and international advertising clients. Marcum Bernstein & Pinchuk LLP, in New York, expressed substantial doubt about SearchMedia Holdings' ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring net losses from operations and has a working capital deficiency. The Company reported a net loss of $46.6 million on $49.0 million of revenues for 2010, compared with a net loss of $22.6 million on $37.7 million of revenues for 2009. SEJWAD HOTELS: Case Summary & 7 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Sejwad Hotels & Development, LLC 11645 Artesia Boulevard Artesia, CA 90701 Bankruptcy Case No.: 12-14521 Chapter 11 Petition Date: February 8, 2012 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Julia W. Brand Debtor's Counsel: Michael G. Spector, Esq. LAW OFFICES OF MICHAEL G. SPECTOR 2677 N. Main Street, Suite 800 Santa Ana, CA 92705 Tel: (714) 835-3130 Fax: (714) 558-7435 E-mail: mgspector@aol.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Ashvin Patel, managing member. Debtor's List of Its Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Patel, Shila Loan $271,000 240 White Cap Lane Newport Coast, CA 92657 Patel, Ashvin Loan $120,000 17209 Ibex Avenue Cerritos, CA 90703 Seade, John Broker?s Commission $29,000 12025 South Street Artesia, CA 90701 Gandhi & Lang Attorney Service $3,000 Martins-Moonstone Landscape Gardening Services $2,055 Services, Inc. AEI Consultants Services Rendered $1,900 Advanced Aquatic Tech., Inc. Services Rendered $1,800 SINCLAIR BROADCAST: Posts $23.2-Mil. Net Income in 4th Quarter -------------------------------------------------------------- Sinclair Broadcast Group, Inc., reported net income of $23.24 million on $212.77 million of total revenues for the three months ended Dec. 31, 2011, compared with net income of $32.95 million on $225.66 million of total revenues for the same period a year ago. The Company reported net income of $76.17 million on $765.28 million of total revenues for the twelve months ended Dec. 31, 2011, compared with net income of $75.04 million on $767.64 million of total revenues during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $1.57 billion in total assets, $1.68 billion in total liabilities and a $111.36 million total stockholders' deficit. "We ended 2011 on a strong note with core broadcast revenues growing, and our largest advertising category, automotive, up almost 12% in the fourth quarter as compared to the same period in 2010," commented David Smith, President and CEO of Sinclair. "As we look ahead to 2012, our outlook is for continued ad spending growth by the automotive industry, as well as an increase in political advertising in this presidential election year. In addition, we expect the market for television station transactions to remain active and intend on evaluating potential transactions as they arise." A full-text copy of the press release is available for free at: http://is.gd/s6w9mx About Sinclair Broadcast Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches roughly 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT, and CW affiliates. * * * As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.- based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. Moody's raised its ratings for Sinclair Broadcast Group, Inc., and subsidiary Sinclair Television Group, Inc., including the Corporate Family Rating and Probability-of-Default Rating, each to Ba3 from B1, and the ratings for individual debt instruments, concluding its review for possible upgrade as initiated on Aug. 5, 2010. Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed $250 million issuance of Senior Unsecured Notes due 2018 by STG. The Speculative Grade Liquidity Rating remains unchanged at SGL-2. The rating outlook is now stable. As reported by the Troubled Company Reporter on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.-based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. SINCLAIR BROADCAST: Vanguard Group Discloses 6.3% Equity Stake -------------------------------------------------------------- The Vanguard Group, Inc., disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Dec. 31, 2011, it beneficially owns 3,310,659 shares of common stock of Sinclair Broadcast Group Inc. representing 6.36% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/IJI0vC About Sinclair Broadcast Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches roughly 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT, and CW affiliates. The Company reported net income of $76.17 million on $765.28 million of total revenues for the twelve months ended Dec. 31, 2011, compared with net income of $75.04 million on $767.64 million of total revenues during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $1.57 billion in total assets, $1.68 billion in total liabilities and a $111.36 million total stockholders' deficit. * * * As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.- based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. Moody's raised its ratings for Sinclair Broadcast Group, Inc., and subsidiary Sinclair Television Group, Inc., including the Corporate Family Rating and Probability-of-Default Rating, each to Ba3 from B1, and the ratings for individual debt instruments, concluding its review for possible upgrade as initiated on Aug. 5, 2010. Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed $250 million issuance of Senior Unsecured Notes due 2018 by STG. The Speculative Grade Liquidity Rating remains unchanged at SGL-2. The rating outlook is now stable. As reported by the Troubled Company Reporter on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.-based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. SINCLAIR BROADCAST: BlackRock Discloses 5.2% Equity Stake --------------------------------------------------------- BlackRock, Inc., revealed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Dec. 31 2011, it beneficially owns 2,691,274 shares of common stock of Sinclair Broadcast Group Inc. representing 5.17% of the shares outstanding. As previously reported by the TCR on Feb. 4, 2010, BlackRock disclosed beneficial ownership of 2,832,560 shares. A full-text copy of the amended filing is available for free at: http://is.gd/nHXDz3 About Sinclair Broadcast Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches roughly 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT, and CW affiliates. The Company reported net income of $76.17 million on $765.28 million of total revenues for the twelve months ended Dec. 31, 2011, compared with net income of $75.04 million on $767.64 million of total revenues during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $1.57 billion in total assets, $1.68 billion in total liabilities and a $111.36 million total stockholders' deficit. * * * As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.- based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. Moody's raised its ratings for Sinclair Broadcast Group, Inc., and subsidiary Sinclair Television Group, Inc., including the Corporate Family Rating and Probability-of-Default Rating, each to Ba3 from B1, and the ratings for individual debt instruments, concluding its review for possible upgrade as initiated on Aug. 5, 2010. Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed $250 million issuance of Senior Unsecured Notes due 2018 by STG. The Speculative Grade Liquidity Rating remains unchanged at SGL-2. The rating outlook is now stable. As reported by the Troubled Company Reporter on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.-based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. SINCLAIR BROADCAST: LSV Asset Holds 5.4% of Class A Shares ---------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, LSV Asset Management disclosed that, as of Dec. 31, 2011, it beneficially owns 2,849,885 shares of Class A common stock of Sinclair Broadcast Group, Inc., representing 5.478% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/mXsZ1U About Sinclair Broadcast Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches roughly 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT, and CW affiliates. The Company reported net income of $76.17 million on $765.28 million of total revenues for the twelve months ended Dec. 31, 2011, compared with net income of $75.04 million on $767.64 million of total revenues during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $1.57 billion in total assets, $1.68 billion in total liabilities and a $111.36 million total stockholders' deficit. * * * As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.- based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. Moody's raised its ratings for Sinclair Broadcast Group, Inc., and subsidiary Sinclair Television Group, Inc., including the Corporate Family Rating and Probability-of-Default Rating, each to Ba3 from B1, and the ratings for individual debt instruments, concluding its review for possible upgrade as initiated on Aug. 5, 2010. Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed $250 million issuance of Senior Unsecured Notes due 2018 by STG. The Speculative Grade Liquidity Rating remains unchanged at SGL-2. The rating outlook is now stable. As reported by the Troubled Company Reporter on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.-based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. SK FOODS: 9th Cir. Rules on Bid to Retrieve Seized Docs ------------------------------------------------------- The U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of an appeal launched over an attempt to retrieve documents in the debtor's possession, saying all issues on appeal involve interlocutory orders. "[W]e dismiss for lack of jurisdiction," the Ninth Circuit said. SK Foods permitted SS Farms LLC, SSC Farming LLC, SSC Farms I, LLC, SSC Farms II LLC, and Scott Salyer to store financial, business, estate planning, and other documents on its premises. Some of the documents were physically stored on site; others were stored in a combined computer system run by SK Foods personnel. In April 2008, the United States Department of Justice Antitrust Division and other government agencies raided the premises of SK Foods, seized "an enormous volume of records and copied many other documents and computers." The raid was followed by a federal grand jury investigation and criminal informations charging current and former employees of SK Foods with fraud, bribery and other offenses. More than a year later, SK Foods filed for Chapter 11 bankruptcy. Bradley Sharp was appointed as trustee of the debtor's estate, and he took possession of all records located on its premises, including documents and electronic files belonging to SS Farms et al. Upon discovering that the trustee had taken possession of their documents, SS Farms et al. demanded return of the original documents without further review. The trustee refused, stating that possession and review of the documents were attendant to the discharge of his duties. SS Farms et al. filed a motion to remove the trustee and disqualify his counsel on the grounds that the seizure and continued possession of their documents violated the Fourth Amendment and various state laws. On the same grounds, the motion also requested a protective order requiring the return of their documents. The trustee filed a countermotion requesting an order confirming his authority to continue to possess and review the documents. The bankruptcy court held oral argument on three issues: (1) removal of the trustee; (2) disqualification of the trustee's counsel; and (3) the trustee's continued possession of SS Farms et al.'s documents. It then denied SS Farms et al.'s motion and granted the trustee's counter-motion. SS Farms et al. appealed to the district court, which affirmed the bankruptcy court on all issues. A copy of the Ninth Circuit's Feb. 9 Opinion is available at http://is.gd/D0CZowfrom Leagle.com. The appellate panel consists of Chief Judge Alex Kozinski, Circuit Judge Carlos T. Bea, and Senior District Judge Robert W. Gettleman of the U.S. District Court for the Northern District of Illinois, sitting by designation. Judge Bea wrote the opinion. Kelly A. Woodruff, Esq. -- kwoodruff@fbm.com -- at Farella Braun & Martel LLP, in San Francisco, argues for SS Farms et al. Malcolm S. Segal, Esq., James R. Kirby II, Esq., and James P. Mayo, Esq. -- firm@segalandkirby.com -- at Segal & Kirby LLP, in Sacramento, represent Scott Salyer. The Law Office of Larry J. Lichtenegger also represent SS Farms, LLC, SSC Farming, LLC, SSC Farms I, LLC and SSC Farms II, LLC. SOUTHERN OAKS: Quail Creek Bank Wants Pre-Bankruptcy Merger Probed ------------------------------------------------------------------ Quail Creek Bank is objecting to the request of Southern Oaks of Oklahoma, LLC, to use the bank's cash collateral. QCB wants the Debtor to segregate the rental income from the properties. QCB said it has not had time to analyze its overall collateral position, the effect of the Debtor's pre-bankruptcy substantive consolidation and other matters. Southern Oaks is seeking Bankruptcy Court permission to use cash collateral and provide adequate protection to secured creditors, including InterBank, formerly know as Union Bank and Rose Rock Bank, QCB, Kirkpatrick Bank, Suntrust Mortgage, Inc., and Onewest Bank FSB, formerly IndyMac, as a result of loans to the Debtor. The Debtor wants to use the Collateral to pay expenses in accordance with a proposed 3-month budget through April 2012. Southern Oaks owns a 126-unit apartment complex in south Oklahoma City, 115 single family residences, 10 residential duplexes and 4 commercial properties in the Oklahoma City Metro area and a 100 unit apartment complex in Pryor, Oklahoma. Southern Oaks operates the non-apartment Properties by and through an affiliate property management company, Houses For Rent of OKC, LLC, who advertises, leases, collects rents, pays expenses, provides equipment, labor and materials for maintenance, repairs and make ready services. HFR has agreed to continue such services but to maintain the Debtor's rents and income in a separate DIP account and to separately account for each secured creditor's cash collateral. For these services, HFR is compensated 20% of rents allocated as 14% for wages, maintenance and overhead and 6% management fee. On Jan. 12 and 27, 2012, the Debtor's ownership and operation of the Properties was consolidated by the merger of various affiliate entities with the Debtor being the surviving entity. Those entities are: * Southern Oaks Of Oklahoma, LLC; * Quail 12, LLC; * Quail 13, LLC; * 1609 N.W. 47th, LLC; * 2233 S.W. 29th, LLC * 400 S.W. 28th, LLC; * South Robinson, LLC; * 9 on S.E. 27th, LLC; * Southside 10, LLC; * QCB 08, LLC; and * Prairie Village of Oklahoma, LLC The Debtor's properties have been mortgaged to the secured creditors. According to papers filed by the Debtor, Quail Creek Bank has a mortgage on 28 single family residences, 1 duplex and 1 commercial property owned by the Debtor. The properties have a market value of $1,739364. QCB is owed part of $3,654,238, which is secured by 37 other properties. In its objection, QCB said the legal effect of the pre-bankruptcy mergers has been to rob the court and creditors of the right to object to what under bankruptcy law is substantive consolidation. Before the court should allow any use of cash collateral, QCB said the court should allow the creditors sufficient time to analyze the effect of what the Debtor has done prior to filing the bankruptcy by its merger of separate limited liability companies within a few weeks of the bankruptcy filing robbing the court and creditors of the creditors right to argue and the court to decide if substantive consolidation is just and proper under the law that governs such procedures. QCB is represented by Bart A. Boren, Esq. WILLIAMS, BOREN & ASSOCIATES, P.C. 401 North Hudson Oklahoma City, OK 73102 Tel: (405) 232-5220 Fax: (405) 232-1963 Southern Oaks of Oklahoma, LLC, filed for Chapter 11 bankruptcy (Bankr. W.D. Okla. Case No. 12-10356) on Jan. 31, 2012. Judge Niles L. Jackson presides over the case. Ruston C. Welch, Esq., at Welch Law Firm P.C., serves as the Debtor's counsel. It scheduled $14,788,414in assets and $15,352,022 in liabilities. The petition was signed by Stacy Murry, manager of MBR. Affiliates that filed separate Chapter 11 petitions are Charlemagne of Oklahoma, LLC (Bankr. W.D. Okla. Case No. 10-13382) on July 2, 2010; and Brookshire Place, LLC (Bankr. W.D. Okla. Case No. 11-10717) on Feb. 23, 2011. SOUTHERN OAKS: Hires Welch Law Firm as Chapter 11 Counsel --------------------------------------------------------- Southern Oaks of Oklahoma, LLC, seeks Bankruptcy Court authority to employ Welch Law Firm, P.C., with primary responsibility for bankruptcy matters to handled by Ruston C. Welch, as Chapter 11 counsel. To the best of the Debtor's knowledge, neither Welch Law Firm, P.C. nor Mr. Welch, nor any other members or attorneys with such firm, have any connections with the debtor, creditors, any other party in interest, the United States Trustee, or any person employed in the office of the United States Trustee, and Mr. Welch is a "disinterested person" and does not hold or represent an interest adverse to the estate. The Debtor will pay Welch on an hourly rate basis at the rate of $260 per hour, plus reimbursement of reasonable, necessary expenses. Prior to the Petition Date, the Debtor entered into a Representation Agreement with Welch, and an insider of the Debtor paid a $16,000 retainer to Welch. The Debtor's insiders guaranteed payment of Welch's fees and costs and further secured the Debtor's obligations thereunder by a granting a lien for up to $50,000 on the Debtor's unencumbered assets, which include vehicles, including a Harley Davidson motorcycle, and real property in Oklahoma City. The Debtor paid pre-petition fees in the amount of $31,734.50 for services over an eight-month period, leaving a cash retainer balance of $251.50. About Southern Oaks Southern Oaks of Oklahoma, LLC, filed for Chapter 11 bankruptcy (Bankr. W.D. Okla. Case No. 12-10356) on Jan. 31, 2012. Judge Niles L. Jackson presides over the case. Ruston C. Welch, Esq., at Welch Law Firm P.C., serves as the Debtor's counsel. It scheduled $14,788,414in assets and $15,352,022 in liabilities. The petition was signed by Stacy Murry, manager of MBR. Affiliates that filed separate Chapter 11 petitions are Charlemagne of Oklahoma, LLC (Bankr. W.D. Okla. Case No. 10-13382) on July 2, 2010; and Brookshire Place, LLC (Bankr. W.D. Okla. Case No. 11-10717) on Feb. 23, 2011. Southern Oaks owns a 126-unit apartment complex in south Oklahoma City, 115 single family residences, 10 residential duplexes and 4 commercial properties in the Oklahoma City Metro area and a 100 unit apartment complex in Pryor, Oklahoma. Southern Oaks operates the non-apartment Properties by and through an affiliate property management company, Houses For Rent of OKC LLC, who advertises, leases, collects rents, pays expenses, provides equipment, labor and materials for maintenance, repairs and make ready services. On Jan. 12 and 27, 2012, the Debtor's ownership and operation of the Properties was consolidated by the merger of various affiliate entities with the Debtor being the surviving entity. Those entities are Southern Oaks Of Oklahoma, LLC; Quail 12, LLC; Quail 13, LLC; 1609 N.W. 47th, LLC; 2233 S.W. 29th, LLC; 400 S.W. 28th, LLC; South Robinson, LLC; 9 on S.E. 27th, LLC; Southside 10, LLC; QCB 08, LLC; and Prairie Village of Oklahoma, LLC. SOUTHERN OAKS: Sec. 341 Creditors' Meeting Set for March 5 ---------------------------------------------------------- The U.S. Trustee for the Western District of Oklahoma will hold a meeting of creditors pursuant to 11 U.S.C. Sec. 341(a) in the Chapter 11 case of Southern Oaks of Oklahoma, LLC, on March 5, 2012, at 2:00 p.m. at 1st Floor, room 119, 215 Dean A. McGee Avenue, Oklahoma City. This is the first Sec. 341 meeting of creditors. The Debtors' representative must be present at the meeting to be questioned under oath by the United States Trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be continued and concluded at a later date without further notice. According to the case docket, government entities must file proofs of claim by July 30, 2012. The Debtor is required to file a Chapter 11 plan and explanatory disclosure statement by May 30, 2012. About Southern Oaks Southern Oaks of Oklahoma, LLC, filed for Chapter 11 bankruptcy (Bankr. W.D. Okla. Case No. 12-10356) on Jan. 31, 2012. Judge Niles L. Jackson presides over the case. Ruston C. Welch, Esq., at Welch Law Firm P.C., serves as the Debtor's counsel. It scheduled $14,788,414in assets and $15,352,022 in liabilities. The petition was signed by Stacy Murry, manager of MBR. Affiliates that filed separate Chapter 11 petitions are Charlemagne of Oklahoma, LLC (Bankr. W.D. Okla. Case No. 10-13382) on July 2, 2010; and Brookshire Place, LLC (Bankr. W.D. Okla. Case No. 11-10717) on Feb. 23, 2011. Southern Oaks owns a 126-unit apartment complex in south Oklahoma City, 115 single family residences, 10 residential duplexes and 4 commercial properties in the Oklahoma City Metro area and a 100 unit apartment complex in Pryor, Oklahoma. Southern Oaks operates the non-apartment Properties by and through an affiliate property management company, Houses For Rent of OKC LLC, who advertises, leases, collects rents, pays expenses, provides equipment, labor and materials for maintenance, repairs and make ready services. On Jan. 12 and 27, 2012, the Debtor's ownership and operation of the Properties was consolidated by the merger of various affiliate entities with the Debtor being the surviving entity. Those entities are Southern Oaks Of Oklahoma, LLC; Quail 12, LLC; Quail 13, LLC; 1609 N.W. 47th, LLC; 2233 S.W. 29th, LLC; 400 S.W. 28th, LLC; South Robinson, LLC; 9 on S.E. 27th, LLC; Southside 10, LLC; QCB 08, LLC; and Prairie Village of Oklahoma, LLC. SPANISH BROADCASTING: S&P Affirms 'B-'; Outlook Hiked to Stable --------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Coconut Grove, Fla.-based Spanish Broadcasting System Inc. (SBS) to stable from negative. "We affirmed our 'B-' corporate credit rating on the company," S&P said. "At the same time, we affirmed our issue-level rating on SBS's 12.5% notes at 'B-' (the same level as the 'B-' corporate credit rating). The recovery rating on this debt remains at '3', indicating our expectation of meaningful (50% to 70%) recovery for noteholders in the event of a payment default. We also affirmed our 'CCC' issue rating on SBS's preferred stock," S&P said. "In addition, we withdrew our issue-level and recovery ratings on the company's existing senior secured credit facility due June 2012, which will be refinanced with proceeds from the new notes," S&P said. "In our opinion, the refinancing transaction extends the debt maturity profile of SBS, although liquidity will decline following the transaction because of higher interest expense, and credit metrics will remain weak," said Standard & Poor's credit analyst Michael Altberg. "Our 'B-' rating on SBS reflects our expectation that EBITDA coverage of cash interest pro forma for the transaction would be very thin, and that discretionary cash flow would only be modestly positive in 2012 on account of higher interest expense. We consider the company's business risk profile as 'vulnerable' based on the cyclicality of advertising demand, SBS's significant cash flow concentration in a few large U.S. Hispanic markets, competition from much larger rivals, and continued (albeit narrowing) losses at MegaTV. These factors more than offset the company's healthy EBITDA margins and favorable Hispanic demographic trends," S&P said. "SBS's financial risk profile is 'highly leveraged,' in our view, because of the company's high pro forma fully adjusted debt (including preferred stock and accrued dividends)-to-EBITDA ratio of 10.2x as of Sept 30, 2011. The 10.75% series B preferred stock becomes putable to SBS in October 2013. We believe there is a high likelihood that, absent asset sales that allow the company to reduce leverage, it could prove difficult for the company to redeem the preferred when it is put to the company. Failure to redeem the preferred would not cross-default to the new secured debt; however, it would trigger a voting rights event, which, among other things, would prevent the company from incurring additional debt. If not remedied, SBS would not be able to refinance the new notes when they come due in 2017," S&P said. "SBS owns and operates 21 radio stations with significant revenue concentration in three markets -- New York City, Los Angeles, and Miami -- which are highly competitive markets for Hispanic radio and general media. Key competition includes affiliates of Univision, which has significantly greater scale and resources. In addition, the company owns and operates three TV stations under its MegaTV network. MegaTV distributes programming through affiliation, programming, and local marketing agreements to non- owned TV stations and satellite operators. MegaTV has reduced, but not eliminated, its EBITDA losses. Given SBS's growth-related investments in programming and personnel, under our base case scenario we expect operating losses to continue to narrow at MegaTV, though we expect network EBITDA to remain slightly negative for full-year 2012," S&P said. STATE AUTO FINC'L: S&P Affirms 'BB+' Counterparty Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services removed its counterparty credit and financial strength ratings on the operating insurance companies of State Auto Group from CreditWatch, where S&P placed the ratings on Nov. 9, 2011, with negative implications. "We are affirming the ratings at 'BBB+'. At the same time, we removed our counterparty credit rating on State Auto Financial Corp. (NASDAQ:STFC) from CreditWatch and affirmed it at 'BB+'. The outlook on the ratings is negative," S&P said. "The rating action reflects the improvement in capital adequacy, mainly because of increased consolidated surplus and lower capital charges as result of the capital initiatives the company pursued," said Standard & Poor's credit analyst Pablo Feldman. "These capital initiatives included a three-year quota share reinsurance program with a syndicate of reinsurers with 75% cession of State Auto's homeowners business subject to certain annual limits on catastrophe losses and the elimination of post retirement health benefits for most active employees and certain retirees." "Even though capital adequacy has improved, earnings as measured by pretax operating income, return on revenue (ROR), and fixed charge coverage ratios are still below what we typically expect for the current rating level. However, in our opinion, earnings are likely to improve prospectively as a result of the underwriting and pricing actions the company has been taking both in personal and commercial lines, the improved geographic and product diversification, and the relative protection that the recently implemented quota share reinsurance program will likely provide State Auto in the next three years," S&P said. "The outlook on State Auto Group is negative. The negative outlook means that there is a 1-in-3 chance that we may lower the ratings on the group by one or two notches in the next 12-24 months. In 2012, assuming four percentage points of catastrophe losses and no abnormal reserve releases, we expect the statutory combined ratio to be 105% or lower with a ROR more in line with the current rating level. We expect gross premiums written to increase by a low-single-digit rate in 2012. We expect financial leverage for the consolidated group to be about 30% and the fixed charge coverage ratio to be at least 2x. We expect capital adequacy to remain at the 'A' level, mostly as a result of reduced capital model charges, increased surplus, and lower double leverage adjustments," S&P said. "We could lower the ratings if the group underwriting performance does not improve materially in 2012 (assuming average catastrophe losses of 4% per year and excluding the benefit of any abnormal reserve releases), if catastrophe exposure is not managed appropriately to reduce earnings volatility, if capital deteriorates materially from the 'A' level, or if there is any substantial deterioration in the personal automobile segment's performance. Assuming no further deterioration in capital adequacy below current levels, a key factor for us to affirm the ratings would be substantial earnings improvement from operating activities as measured by ROR, pretax operating income, and fixed charge coverage metrics. State Auto's management team has been taking a series of steps to bring the company back to a profitable path, and if we believe the initiatives are successful and its enterprise risk management program is effective, we could affirm the ratings," S&P said. SUNOCO INC: S&P Affirms 'BB+', Removes Watch Negative ----------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+' corporate credit rating on Sunoco Inc. and its 'BBB' corporate credit rating on operating subsidiary Sunoco Logistics Partners L.P., and removed the ratings from CreditWatch with negative implications, where we placed them on Sept. 6, 2011. Sunoco had about $2.8 billion of pro forma consolidated balance debt as of Dec. 31, 2011. The rating actions reflect our view that Sunoco's actions to use a significant portion of its cash balances to reduce debt and long- term liabilities will keep the company's stand-alone and consolidated adjusted debt to EBITDA at about 3x and 4x, respectively, in 2012, notwithstanding a large share repurchase. "Given the business mix, we consider these leverage metrics to be commensurate with current ratings," said Standard & Poor's credit analyst Michael Grande. "The stable outlook on Sunoco reflects our belief that the company will have relatively stable cash flows from its retail business and growing distributions from Sunoco Logistics, which should result in financial leverage of about 3x. A ratings upgrade is unlikely in our view, absent the management team embracing a considerably more conservative financial policy. In any event, the rating on Sunoco will likely remain below that of Sunoco Logistics given the cash flow subordination. We could lower the rating if Sunoco's stand-alone financial leverage increases to 4x, or if we lower our ratings on Sunoco Logistics," S&P said. "The stable outlook on Sunoco Logistics reflects our expectations that the partnership will maintain financial leverage of about 3.5x, successfully integrate recent acquisitions, and execute its organic growth projects. At this time, we consider an upgrade unlikely given the MLP structure and its relatively modest size. We recognize that financial leverage could spike in the short term, and we could lower the rating if the partnership embraces a more aggressive financial policy, allowing debt to EBITDA to increase above 4x on a sustained basis," S&P said. SUNTRICITY POWER: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------ The Associated Press reports that Suntricity Power filed on Feb. 7, 2012, for Chapter 11 bankruptcy protection in Delaware, listing assets of between $500,000 and $1 million, and estimated debts of between $100,000 and $500,000. The report says a corporate ownership statement included with the bankruptcy filing lists Maria Romero and Mark Hald as the sole stockholders. Found in 2007, Suntricity Power designs, sells and installs solar energy systems for residential and commercial customers. TAO-SAHI LP: Has Access to S2 Cash Collateral Until Feb. 28 ----------------------------------------------------------- The Hon. Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas signed the sixth interim agreed order, authorizing Tao-Sahi, LP, to use cash collateral of S2 Acquisition LLC until Feb. 28, 2012. As reported in the Troubled Company Reporter on Aug. 30, 2011, S2 Acquisition asserts claims against the Debtor of $19,554,569 (exclusive of pre- and postpetition attorney fees, costs and expenses, late charges and other costs chargeable under the Loan Documents. As adequate protection, the Debtor will make a monthly payment of $40,170 to S2 Acquisition, and a monthly payment of up to $10,000 of S2 Acquisition's fees and expenses until the effective date of a confirmed plan. S2 Acquisition is also granted a first replacement liens and additional lien on all assets of the Debtor and an allowed superpriority administrative claim. The collateral and superpriority claims is subject to a carve out for professional fees and fees to be paid to the Clerk of the Court and the U.S. Trustee. The Court also ordered that the asset management fee payable to TAO Development Group, LLC will not exceed 1% of the gross revenue of the Debtor for the month of February 2012. A final hearing on the Debtor's cash collateral motion is set for Feb. 16, beginning at 10:00 a.m. About Tao-Sahi LP Tao-Sahi LP owns the Holiday Inn NW - Seaworld in San Antonio, Texas. Tao-Sahi has no employees. The Hotel is managed under contract with an independent management company. Tao-Sahi filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-52027) on June 7, 2011, to stay foreclosure of the hotel and restructure its debts. Judge Ronald B. King presides over the case. Marvin E. Sprouse, III, Esq., and Jack Skaggs, Esq., at Jackson Walker LLP, in Austin, Tex., serve as bankruptcy counsel. Bolton Real Estate Consultants, Ltd., serves as the Debtor's appraiser. In its Schedules, the Debtor disclosed $24,735,728 in assets and $20,584,065 in debts. The petition was signed by Clayton Isom, CEO of Tao Development Group, LLC, general partner. S2 Acquisition LLC, an opportunity fund associated with Square Mile Capital Management in New York, acquired the hotel debt from the failed Silverton Bank. S2 Acquisition is represented by Tom Rogers, Esq., and Shari L. Heyan, Esq., at Greenberg Traurig. No trustee, examiner or committee of creditors has been appointed in this case. TAO-SAHI LP: Plan Confirmation Hearing Continued Until March 7 -------------------------------------------------------------- The Hon. Ronald B. King of the U.S. Bankruptcy Court for the Western District of Texas granted Tao-Sahi, LP's motion to extend deadlines and continue settings related to the confirmation its Second Amended Plan of Reorganization. The Court ordered that: a. The estimation hearings for S2 Acquisition LLC and The Federal Deposit Insurance Corporation, as receiver for Silverton Bridge Bank, N.A., scheduled for Feb. 6, 2012, are continued until Feb. 16, at 10:00 a.m. Any response to the motions to estimate will be due by Feb. 9. b. The confirmation hearing for the Debtor's disclosure statement, scheduled for Feb. 13, is continued until March 7, at 10:00 a.m. c. Any objections to the Debtor's proposed plan or confirmation will be due ten days before the confirmation hearing. Additionally, all ballots relating to the proposed plan will be due ten days before the confirmation hearing. d. The Debtor will provide notice of the re-scheduled dates and deadlines to parties-in-interest who received a solicitation package for the Proposed Plan. As reported in the Troubled Company Reporter on Jan. 4, 2012, funding for the Plan payments will be from the Reorganized Debtor's operations, recoveries from the August 12, 2011 adversary complaint the Debtor commenced against Specialty Finance Group LLC, and a $700,000 contribution from the Debtor's current or new Interest Holders. The business of the Reorganized Debtor will continue to be managed by its general partner, TAO Development, through Clayton Isom and Rashid Al-Hmoud, CEO and CFO of TAO Development. TAO Development will continue to receive its asset management fee of 1.5% of gross revenue of the Reorganized Debtor to defray its overhead and expenses after all Plan payments and other other obligations for any given month are paid in full. The Debtor will assume the existing management agreement with HMC Hospitality Operating Company for operation of the Hotel. Staffing for the Hotel will continue to be provided by Corporate Solutions and the Republic Entities. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/tao-sahi.doc156.pdf About Tao-Sahi LP Tao-Sahi LP owns the Holiday Inn NW - Seaworld in San Antonio, Texas. Tao-Sahi has no employees. The Hotel is managed under contract with an independent management company. Tao-Sahi filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-52027) on June 7, 2011, to stay foreclosure of the hotel and restructure its debts. Judge Ronald B. King presides over the case. Marvin E. Sprouse, III, Esq., and Jack Skaggs, Esq., at Jackson Walker LLP, in Austin, Tex., serve as bankruptcy counsel. Bolton Real Estate Consultants, Ltd., serves as the Debtor's appraiser. In its Schedules, the Debtor disclosed $24,735,728 in assets and $20,584,065 in debts. The petition was signed by Clayton Isom, CEO of Tao Development Group, LLC, general partner. S2 Acquisition LLC, an opportunity fund associated with Square Mile Capital Management in New York, acquired the hotel debt from the failed Silverton Bank. S2 Acquisition is represented by Tom Rogers, Esq., and Shari L. Heyan, Esq., at Greenberg Traurig. No trustee, examiner or committee of creditors has been appointed in this case. TAO-SAHI LP: FDIC Wants $1.8MM Claim Allowed for Plan Voting ------------------------------------------------------------ The Federal Deposit Insurance Corporation, as receiver for Silverton Bridge Bank, N.A., asks the U.S. Bankruptcy Court for the Western District of Texas to estimate and temporarily allow, the $1,804,794 proof of claim as a general unsecured claim against Tao-Sahi, LP. FDIC relates that the estimate will solely be for purposes of voting on the Plan or any other plan proposed in the case. FDIC-R-Bridge is the Debtor's largest unsecured creditor. FDIC-R- Bridge's claim is large enough to, by itself, cause the Plan's class of general unsecured creditors to vote to reject the Plan. FDIC-R-Bridge adds that the Debtor filed an objection to the allowance of FDIC-R-Bridge's claim. The Debtor's objection has the effect of preventing FDIC-R-Bridge from voting on the Plan and would allow the Debtor to avoid having to satisfy the cramdown requirements of the Bankruptcy Code before FDIC-R-Bridge even has a chance to have its day in court. FDIC-R-Bridge also denies the Debtor's allegations in the Adversary Proceeding and Claim Objection. It is unlikely that the Claim Objection and Adversary Proceeding will be resolved prior to Plan confirmation ? especially in light of the recent order of the Court which consolidates the Adversary Proceeding and the Claim Objection and the Court's scheduling order. FDIC-R-Bridge is represented by: Vincent P. Slusher, Esq. J. Seth Moore, Esq. DLA PIPER LLP (US) 1717 Main Street, Suite 4600 Dallas, TX 75201 Tel: (214) 743-4572 Fax: (972) 813-6267 E-mail: vince.slusher@dlapiper.com seth.moore@dlapiper.com - and - Kathryn R. Norcross, senior counsel Merritt A. Pardini, counsel Federal Deposit Insurance Corporation Legal Division 3501 Fairfax Drive, VS-D-7066 Arlington, VA 22226 Tel: (703) 562-6079 About Tao-Sahi LP Tao-Sahi LP owns the Holiday Inn NW - Seaworld in San Antonio, Texas. Tao-Sahi has no employees. The Hotel is managed under contract with an independent management company. Tao-Sahi filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-52027) on June 7, 2011, to stay foreclosure of the hotel and restructure its debts. Judge Ronald B. King presides over the case. Marvin E. Sprouse, III, Esq., and Jack Skaggs, Esq., at Jackson Walker LLP, in Austin, Tex., serve as bankruptcy counsel. Bolton Real Estate Consultants, Ltd., serves as the Debtor's appraiser. In its Schedules, the Debtor disclosed $24,735,728 in assets and $20,584,065 in debts. The petition was signed by Clayton Isom, CEO of Tao Development Group, LLC, general partner. S2 Acquisition LLC, an opportunity fund associated with Square Mile Capital Management in New York, acquired the hotel debt from the failed Silverton Bank. S2 Acquisition is represented by Tom Rogers, Esq., and Shari L. Heyan, Esq., at Greenberg Traurig. No trustee, examiner or committee of creditors has been appointed in this case. TRIDENT MICROSYSTEMS: Time to File Schedules Extended to Feb. 22 ---------------------------------------------------------------- Trident Microsystems, Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend the time within which the Debtors must filed their schedules of assets and liabilities and a statement of financial affairs through and including Feb. 22, 2012. About Trident Microsystem Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $309,992,980 in assets and $39,607,591 in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. TRIDENT MICROSYSTEMS: Can Employ DLA Piper as Counsel ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted Trident Microsystems, Inc., et al., permission to employ DLA Piper LLP (US) as the Debtors' counsel, nunc pro tunc as of the Petition Date. The Bankruptcy Court is satisfied that DLA Piper is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code and as required by Section 327(a) of the Bankruptcy Code. DLA Piper will be compensated for its services and reimbursed for any related expenses in accordance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules and any other applicable rules or procedures of the Court. To the extent that more than $500,000 is held by DLA Piper as a retainer following a final reconciliation of pre-petition amounts owing by the Debtors, DLA Piper will apply those amounts to its post-petition fees and expenses as those fees and expenses are approved by the Court. DLA Piper will apply the Remaining Retainer to any amounts due and owing by the Debtors pursuant to the final order entered by the Court with respect to the final fee application in the Debtors' Chapter 11 cases. Any amounts remaining after payment of any final fee application obligations owed to DLA Piper will be returned to the Debtors. As reported in the TCR on Jan. 19, 2012, DLA Piper's attorneys bill at these hourly rates: partner at $730 to $950, associates at $415 to $605, and paralegals at $230. About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $309,992,980 in assets and $39,607,591 in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. TRIDENT MICROSYSTEMS: Can Employ Union Square as Investment Banker ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has granted Trident Microsystems, Inc., et al., permission to employ Union Square Advisors LLC as the Debtors' investment banker, nunc pro tunc to the Petition Date. Union Square will be compensated in accordance with the Engagement Letter and the Court's Order. Union Square will apply for compensation and reimbursement of expenses in accordance with the procedures set forth in any applicable fee and expenses guidelines and orders of the Bankruptcy Court, any other applicable requirements or guidelines governing interim and final fee applications in the Debtors' Chapter 11 proceedings, including the U.S. Trustee guidelines, the Bankruptcy Code, the Bankruptcy Rules and the Local Rules. As reported in the TCR on Jan. 19, 2012, Union Square Advisors will charge these fees: a $75,000 monthly fee and a sale transaction fee ranging from the greater of $1.5 million to $2 million or 1.8% of the aggregate value of the sale transaction. About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $309,992,980 in assets and $39,607,591 in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. TRIDENT MICROSYSTEMS: Can Employ PwC LLP as Tax Advisor ------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted Trident Microsystems, Inc., et al., permission to employ PricewaterhouseCoopers LLP as the Debtors' tax advisor and independent auditor, nunc pro tunc to the Petition Date. The Bankruptcy Court is satisfied that PwC is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code and as required by Section 327(a) of the Bankruptcy Code. As reported in the TCR on Jan. 19, 2012, PricewaterhouseCoopers bills at these hourly rates: partner at $650, senior managing director at $650, directors at $550, managers at $475, senior associates at $375, and associates at $275. About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $309,992,980 in assets and $39,607,591 in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. UNISYS CORP: BlackRock Discloses 5.3% Equity Stake -------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that, as of Dec. 30, 2011, it beneficially owns 2,282,854 shares of common stock of Unisy Corp. representing 5.27% of the shares outstanding. As previously reported by the TCR on March 18, 2011, BlackRock disclosed beneficial ownership of 2,439,342 shares. A full-text copy of the amended filing is available at http://is.gd/KOLh94 About Unisys Corp. Based in Blue Bell, Pennsylvania, Unisys Corporation (NYSE: UIS) -- http://www.unisys.com/-- provides a portfolio of IT services, software, and technology that solves critical problems for clients. With more than 26,000 employees, Unisys serves commercial organizations and government agencies throughout the world. The Company's balance sheet at Dec. 31, 2011, showed $2.61 billion in total assets, $3.92 billion in total liabilities and a $1.31 billion total stockholders' deficit. * * * As reported by the Troubled Company Reporter on Feb. 24, 2011, Moody's Investors Service has affirmed Unisys' B1 corporate family rating and all other ratings, and also changed the rating outlook to positive from stable. This outlook change follows the announcement by Unisys of plans to issue mandatory convertible preferred stock, redeem secured notes, and tender for additional bonds which Moody' estimates will reduce secured debt by up to $390 million. Upon completion of the transactions, the loss given default assessments will be revised based on the remaining debt balances. In the May 5, 2011 edition of the TCR, Standard & Poor's Ratings Services raised its corporate credit rating on Blue Bell, Pa.- based Unisys Corp. to 'BB-' from 'B+', and removed the ratings from CreditWatch, where they were placed with positive implications on Feb. 22, 2011. "The upgrade reflects Unisys' improved financial profile following the recent debt redemptions," said Standard & Poor's credit analyst Martha Toll-Reed, "and adequate liquidity, which provides some capacity at the current rating for potential earnings volatility." "The ratings reflect our view that Unisys' improved financial profile and consistently positive annual free cash flow will provide sufficient cushion in the near term to mitigate the potential for ongoing revenue declines and operating performance volatility," added Ms. Toll- Reed. As reported by the TCR on Oct. 18, 2011, Fitch Ratings has affirmed and withdrawn the 'BB-' long-term Issuer Default Rating of Unisys Corporation. Fitch has decided to discontinue the rating, which is uncompensated. UNITED RETAIL: U.S. Trustee Names 7-Member Creditors Panel ---------------------------------------------------------- Tracy Hope Davis, the United States Trustee for Region 2, appointed seven creditors to the Official Committee of Unsecured Creditors in the Chapter 11 cases of United Retail Group, Inc., pursuant to 11 U.S.C. Sec. 1102(a) and (b). The Committee consists of: 1. The CIT Group/Commercial Services, Inc. 11 West 42nd St. New York, NY 10036 Attn: Kevin Ritter Tel: 212-461-5447 E-mail: kevin.ritter@cit.com 2. Garmex International Corp. 148 West 37th St. New York, NY 10018 Attn: Stephen Aronson Tel: 212-290-2222 E-mail: slaronson@aol.com 3. Jeffrey Craig Ltd. 1384 Broadway New York, NY 10018 Attn: Steven Klein Tel: 212-221-8088 E-mail: sklein@jcdmd.com 4. Kimco Realty Corporation 3333 New Hyde Park Road New Hyde Park, NY 10042 Attn: Raymond Edwards Tel: 516-869-2586 E-mail: redwards@kimcorealty.com 5. Rosenthal & Rosenthal, Inc. 1370 Broadway New York, NY 10018 Attn: Allan Spielman Tel: 212-356-1438 E-mail: ASpielman@rosenthalinc.com 6. Tanzara International 1407 Broadway, Suite 1616 New York, NY 10018 Attn: Vijay Samtani Tel: 212-354-9276 E-mail: vsamtani@tanzara.com 7. Valentine USA Inc. 148 West 37th St., 14th Floor New York, NY 10008 Attn: Willy W. Wu Tel: 212-840-8866 E-mail: wwu@valentine-usa.com Sec. 31 Creditors' Meeting on March 6 Meanwhile, the U.S. Trustee will convene a meeting of creditors pursuant to 11 U.S.C. Sec. 341(a) in the Chapter 11 cases of United Retail Group Inc. on March 6, 2012, 2:00 p.m. at the U.S. Trustee Office at 80 Broad Street, 4th Floor in New York. This is the first Sec. 341 meeting of creditors. The Debtors' representative must be present at the meeting to be questioned under oath by the United States Trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be continued and concluded at a later date without further notice. About United Retail Group United Retail Group Inc., owner of the Avenue brand of women's fashion apparel and a subsidiary of Redcats USA, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Feb. 1, 2012, as it seeks to sell the business to Versa Capital Management for $83.5 million, subject to higher and better offers. The Company's legal advisor is Kirkland & Ellis LLP; AlixPartners LLP serves as restructuring advisor and Peter J. Solomon Company serves as financial advisor and investment banker; and Donlin Recano & Company Inc. is the notice, claims and administrative agent. Versa Capital's legal advisor is Sullivan & Cromwell LLP. United Retail has arranged a $40 million Debtor-in-Possession facility from its existing revolving credit lender, Wells Fargo, to provide sufficient working capital for Avenue to continue to operate the business as usual. Wells Fargo is represented in the case by Jonathan N. Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Avenue has 433 stores and an e-commerce site -- http://www.avenue.com/. Avenue employs roughly 4,422 employees, roughly 294 of which are located at Avenue's corporate headquarters in Rochelle Park, New Jersey or at the Troy Distribution Facility. The Company disclosed $117.2 million in assets and $67.3 million in liabilities as of the Chapter 11 filing. UNITED RETAIL: Bidding Procedures Hearing on Feb. 21 ---------------------------------------------------- The Bankruptcy Court will hold a hearing Feb. 21, 2012, at 2:00 p.m., prevailing Eastern Time, on the proposed procedures that will govern the sale of United Retail Group Inc.'s assets. Subject to higher and better offers at an auction, the Debtors intend to seek approval of the sale -- free and clear of all liens, claims, interests and encumbrances -- of substantially all of the assets of any or all of the Debtors' stores, including related leases, on a going concern basis pursuant to the terms of an Asset Purchase Agreement, dated as of Feb. 1, 2012, by and among the Debtors, their parent Redcats USA Inc., and Ornatus URG Acquisition LLC, an affiliate of Versa Capital Management, LLC. The Versa deal is valued at roughly $83.5 million. The Debtors also propose to hand over to the Versa unit the right to act as liquidating agent in connection with the disposition of merchandise contained in any of the Stores that cannot be sold on a going concern basis pursuant to the terms substantially set forth in a Sales Agency Agreement, dated as of Feb. 1, 2012, by and among the Debtors, the Stalking Horse Bidder, and Versa. The Debtors will also assume and assign certain executory contracts and unexpired leases to the Buyer. The Debtors have yet to set the deadline for submitting competing bids as well as the auction date. However, the Debtors' $40,000,000 DIP financing agreement with Wells Fargo N.A. contains deadlines relating to the Debtors' sale process: * not later than 21 days after the Petition Date, (i) an order will have been entered by the Bankruptcy Court approving the motion requesting approval for a process to sell all or substantially all of the assets of the Debtors, and (ii) the Borrowers will have distributed bid packages to all potential bidders, including to nationally recognized retail inventory liquidation firms; * Not later than 51 days after the Petition Date, an auction for the selection of the highest and best bidder in connection with the Asset Sale pursuant to the Sale Procedures Order will have been completed and a successful bidder will have been selected on terms and conditions acceptable to Administrative Agent; * Not later than 54 days after the Petition Date, an order will have been entered approving the Asset Sale to the highest and best bidder from the Asset Sale Auction pursuant to an asset purchase agreement; and * In the event that the successful bidder from the Asset Sale Auction is (i) a liquidation firm whose successful bid is to conduct store closing or going out of business sales in connection with such bid, then such sales shall be commenced not later than the 56th day following the Petition Date or (ii) a bidder whose successful bid is for purchase of the Loan Parties' assets on a going concern basis, then such purchase shall be consummated not later than the 61st day following the Petition Date, as applicable. The sale proceeds will be used first to repay the Debtors' obligations under the Wells Fargo DIP facility. Wells Fargo has a first-priority in substantially all of the Debtors' assets. Wells Fargo's consent to the Sale was conditioned on this right. Under the deal with Versa, the Buyer agrees to pay: (A) an amount in cash paid by the Buyer sufficient to satisfy: * an amount equal to the outstanding funded obligations under the Debtors' DIP Financing as of the Closing, not to exceed $15,000,000 (or, in the event that a letter of credit is drawn under the DIP Financing, $16,850,000) plus the amount, if any, by which administrative and priority claims are less than $11,100,000; * payment in cash as and when such amounts become due, on behalf of the Sellers, for wind-down costs in an amount not to exceed $2,000,000; * $500,000 to the holders (other than Redcats USA and its affiliates) of unsecured claims that are not the assumed liabilities); * payment to holders (other than RUSA and its affiliates) of administrative and priority claims as of the Closing in an amount not to exceed $11,100,000 plus, the amount, if any, by which the outstanding funded obligations under the DIP Financing are less than $15,000,000 (or, in the event that the Specified LC is drawn under the DIP Financing, $16,850,000); and * payment, on behalf of the Sellers, to Redcats Asia, Ltd. for trade payables in an amount not to exceed $2,200,000; (B) a credit bid of all or a portion of the secured obligations of the Sellers held by the Buyer; and (C) the assumption by the Buyer of certain liabilities. As a prerequisite to the Buyer's obligation to effect the Closing and pay the Purchase Price, Redcats USA will pay to the Buyer in cash at the Closing $20,000,000 multiplied by a fraction -- the numerator of which is the number of Leases designated by the Buyer to be Assumed Contracts as of the Closing Date, and the denominator of which is 300 (provided, however, that in the event that the Buyer has designated more than 300 Leases to be Assumed Contracts as of the Closing Date, the Initial Payment will be $20,000,000, and, for the avoidance of doubt, there will not be any Subsequent Payment -- to fund the Buyer's payment obligations under the asset purchase agreement and post-Closing working capital for the Business, such payment being made in consideration of the Buyer's plan to continue to operate the Business as a going concern. The Debtors are obligated to pay the Buyer a $1.2 million Break-Up Fee in the event a sale is closed with a rival bidder. The deal may be terminated if, among other things, a Sale Order does not become a Final Order within 60 days after the entry of the Bidding Procedures Order. About United Retail Group United Retail Group Inc., owner of the Avenue brand of women's fashion apparel and a subsidiary of Redcats USA, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Feb. 1, 2012. The Company's legal advisor is Kirkland & Ellis LLP; AlixPartners LLP serves as restructuring advisor and Peter J. Solomon Company serves as financial advisor and investment banker; and Donlin Recano & Company Inc. is the notice, claims and administrative agent. Versa Capital's legal advisor is Sullivan & Cromwell LLP. DIP Lender Wells Fargo is represented in the case by Jonathan N. Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Avenue has 433 stores and an e-commerce site -- http://www.avenue.com/. Avenue employs roughly 4,422 employees, roughly 294 of which are located at Avenue's corporate headquarters in Rochelle Park, New Jersey or at the Troy Distribution Facility. The Company disclosed $117.2 million in assets and $67.3 million in liabilities as of the Chapter 11 filing. UNITED RETAIL: Schedules Filing Deadline Moved to March 16 ---------------------------------------------------------- The Bankruptcy Court extended for 30 days the deadline for United Retail Group Inc. and its affiliates to file their schedules of assets and liabilities and statement of financial affairs. Pursuant to section 521 of the Bankruptcy Code and Bankruptcy Rule 1007(c), the Debtors ordinarily would be required to file the Schedules and Statements within 14 days after the Petition Date. The new deadline is March 16. The Debtors said the scope and complexity of their businesses, coupled with the limited time and resources available to the Debtors to marshal the required information, necessitate an extension of the deadline to file the Schedules and Statements. About United Retail Group United Retail Group Inc., owner of the Avenue brand of women's fashion apparel and a subsidiary of Redcats USA, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Feb. 1, 2012, as it seeks to sell the business to Versa Capital Management for $83.5 million, subject to higher and better offers. The Company's legal advisor is Kirkland & Ellis LLP; AlixPartners LLP serves as restructuring advisor and Peter J. Solomon Company serves as financial advisor and investment banker; and Donlin Recano & Company Inc. is the notice, claims and administrative agent. Versa Capital's legal advisor is Sullivan & Cromwell LLP. United Retail has arranged a $40 million Debtor-in-Possession facility from its existing revolving credit lender, Wells Fargo, to provide sufficient working capital for Avenue to continue to operate the business as usual. Wells Fargo is represented in the case by Jonathan N. Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Avenue has 433 stores and an e-commerce site -- http://www.avenue.com/. Avenue employs roughly 4,422 employees, roughly 294 of which are located at Avenue's corporate headquarters in Rochelle Park, New Jersey or at the Troy Distribution Facility. The Company disclosed $117.2 million in assets and $67.3 million in liabilities as of the Chapter 11 filing. UNITED RETAIL: Final Hearing on $40MM Wells Fargo Loan on Feb. 21 ----------------------------------------------------------------- United Retail Group Inc. and its debtor-affiliates will return to the Bankruptcy Court Feb. 21 to seek final approval of its $40,000,000 postpetition secured financing with Wells Fargo N.A.. The Debtors have won authority to use $25,000,000 of the DIP facility, on an interim basis, pursuant to the terms and conditions of the Super-Priority Senior Secured Debtor-In- Possession Credit Agreement with Wells Fargo, which is also the administrative agent under the Redcats ABL Facility. Wells Fargo Capital Finance, LLC, serves as sole lead arranger and bookrunner under the DIP Facility. At the Feb. 21 hearing, the Debtors will also seek final authority to use cash collateral of Wells Fargo and Redcats USA, the Debtors' parent. The DIP Agreement will terminate at the earliest to occur of, among others, (i) the date which is 210 days after the Petition Date, (ii) the date of the effectiveness of a plan of reorganization or liquidation for the Borrowers and the Guarantors in the Chapter 11 Cases, or (iii) the consummation of the sale or sales of all or substantially all of the Borrowers' assets and properties or of all equity interests in Borrowers. Before Nov. 22, 2011, Redcats USA funded certain of the Debtors' operational expenses on an unsecured basis pursuant to a cash management agreement dated Aug. 29, 2008. The Debtors relied exclusively on the Cash Management Agreement to fund, among other things, payroll, trade obligations, service contracts and other daily operating expenses. The Cash Management Agreement was effectively a cash pooling arrangement that allowed Redcats USA to sweep positive balances in the Debtors' operating accounts on a daily basis and net the cash against amounts owed to Redcats USA for, among other things, loans to the Debtors and/or costs associated with a variety of intercompany services Redcats USA provided to the Debtors. While Redcats USA largely funded the Debtors with the Debtors' own cash flow, negative balances accumulated over time, leading to a current unsecured balance of $48.5 million owed to Redcats USA as of Nov. 22, 2011. In late 2011, Redcats USA informed the Debtors that it was no longer willing to fund the Debtors' operations on an unsecured basis. Accordingly, on Nov. 22, 2011, the Debtors and Redcats USA amended the Cash Management Agreement pursuant to which Redcats USA agreed to provide funding to the Debtors on a second-lien secured basis (junior to the liens held by Wells Fargo pursuant to the Redcats ABL Facility). To facilitate financing of foreign-product sourcing for many of Redcats USA's subsidiaries, including the Debtors, on July 28, 2011, Redcats USA and certain of its affiliates, including United Retail Incorporated, as borrowers, and Avenue Gift Cards, Inc. and United Retail Group, Inc., as guarantors, entered into a credit agreement with Wells Fargo and the other lenders party thereto that provides for a revolving asset-based loan facility. The Redcats ABL Facility provides for, among other things, revolving credit with a maximum aggregate commitment of $60 million, including the issuance of letters of credit. Wells Fargo is represented in the case by: Jonathan N. Helfat, Esq. OTTERBOURG, STEINDLER, HOUSTON & ROSEN, P.C. 230 Park Avenue New York, NY 10169-0075 Fax: (212) 682-6104 About United Retail Group United Retail Group Inc., owner of the Avenue brand of women's fashion apparel and a subsidiary of Redcats USA, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Feb. 1, 2012, as it seeks to sell the business to Versa Capital Management for $83.5 million, subject to higher and better offers. The Company's legal advisor is Kirkland & Ellis LLP; AlixPartners LLP serves as restructuring advisor and Peter J. Solomon Company serves as financial advisor and investment banker; and Donlin Recano & Company Inc. is the notice, claims and administrative agent. Versa Capital's legal advisor is Sullivan & Cromwell LLP. Avenue has 433 stores and an e-commerce site -- http://www.avenue.com/. Avenue employs roughly 4,422 employees, roughly 294 of which are located at Avenue's corporate headquarters in Rochelle Park, New Jersey or at the Troy Distribution Facility. The Company disclosed $117.2 million in assets and $67.3 million in liabilities as of the Chapter 11 filing. UNITED RETAIL: Wins OK to Hire Donlin Recano as Claims Agent ------------------------------------------------------------ United Retail Group Inc. won the Bankruptcy Court's authority to employ Donlin Recano & Company Inc. a notice and claims agent. As reported by the Troubled Company Reporter, the Debtors filed separate applications with the Court to hire Donlin Recano as: -- notice and claims agent pursuant to section 156(c) of the Judicial Code; and -- administrative agent to assist the Debtors in performing duties that fall outstide the scope of 28 U.S.C. Sec. 156(c). The Debtors noted that they have roughly 10,000 potential creditors. Although the Office of the Clerk of the United States Bankruptcy Court for the Southern District of New York ordinarily would serve notice on the Debtors' creditors and other parties in interest and administer claims filed against the Debtors, the Clerk's Office may not have the resources to undertake such tasks with respect to these chapter 11 cases in light of the magnitude of the Debtors' creditor body and the tight timelines that frequently arise in complex chapter 11 bankruptcy cases. The Debtors said DRC's retention is the most effective and efficient manner of noticing the thousands of creditors and other parties in interest of the commencement of and other developments in the chapter 11 cases. As administrative agent, DRC will assist the Debtors with, among other things, solicitation, balloting and tabulation and calculation of votes, as well as preparing any appropriate reports, as required in furtherance of confirmation of plan(s) of reorganization; and gather data in conjunction with the preparation, and assist with the preparation, of the Debtors' schedules of assets and liabilities and statements of financial affairs. Before the Petition Date, the Debtors provided DRC a $20,000 retainer in addition to $45,000 on account of prepetition fees and expenses. DRC seeks to first apply the retainer to all prepetition invoices, thereafter, to have the retainer replenished to the original retainer amount, and thereafter, to hold the retainer under the parties' Claims Administration Agreement during the chapter 11 cases as security for the payment of fees and expenses under the Claims Administration Agreement. Colleen McCormick, DRC's Chief Operating Officer, attests that DRC neither holds nor represents an interest adverse to the Debtors' estates, and has no connection to the Debtors, their creditors, or their related parties. About United Retail Group United Retail Group Inc., owner of the Avenue brand of women's fashion apparel and a subsidiary of Redcats USA, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Feb. 1, 2012, as it seeks to sell the business to Versa Capital Management for $83.5 million, subject to higher and better offers. The Company's legal advisor is Kirkland & Ellis LLP; AlixPartners LLP serves as restructuring advisor and Peter J. Solomon Company serves as financial advisor and investment banker; and Donlin Recano & Company Inc. is the notice, claims and administrative agent. Versa Capital's legal advisor is Sullivan & Cromwell LLP. United Retail has arranged a $40 million Debtor-in-Possession facility from its existing revolving credit lender, Wells Fargo, to provide sufficient working capital for Avenue to continue to operate the business as usual. Wells Fargo is represented in the case by Jonathan N. Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Avenue has 433 stores and an e-commerce site -- http://www.avenue.com/. Avenue employs roughly 4,422 employees, roughly 294 of which are located at Avenue's corporate headquarters in Rochelle Park, New Jersey or at the Troy Distribution Facility. The Company disclosed $117.2 million in assets and $67.3 million in liabilities as of the Chapter 11 filing. VALENCE TECHNOLOGY: Incurs $2.4 Million Net Loss in Fiscal Q3 ------------------------------------------------------------- Valence Technology, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $2.41 million on $8.50 million of revenue for the three months ended Dec. 31, 2011, compared with a net loss of $2 million on $13.75 million of revenue for the same period during the prior year. "Our third quarter revenue results were in line with prior guidance. Furthermore, during the quarter we experienced heavy bid activity to a broad spectrum of customers, including those in the healthcare, industrial, and commercial fleet markets," said Robert L. Kanode, president and chief executive officer. The Company reported a net loss of $12.68 million on $45.88 million of revenue for the year ended March 31, 2011, compared with a net loss of $23.01 million on $16.08 million of revenue during the prior year. The Company reported a net loss of $10.07 million on $31.05 million of revenue for the nine months ended Dec. 31, 2011, compared with a net loss of $10.19 million on $31.97 million of revenue for the same period a year ago. The Company's balance sheet at Dec. 31, 2011, showed $35.71 million in total assets, $86.30 million in total liabilities, $8.61 million in redeemable preferred stock, and a $59.20 million total stockholders' deficit. Going Concern As a result of the Company's limited cash resources and history of operating losses there is substantial doubt about its ability to continue as a going concern. The Company presently has no further commitments for financing by its Chairman Carl Berg and or his affiliates. Recently, the Company has depended on sales of its common stock under the At-Market Issuance Agreement with Wm. Smith & Co and short term loans and stock sales with Mr. Berg. If the Company is unable to obtain additional financing from Mr. Berg, through its agreement with Wm. Smith & Co, or others on terms acceptable to the Company, or at all, the Company may be forced to cease all operations and liquidate its assets. As reported by the TCR on June 3, 2011, PMB Helin Donovan, LLP, in Austin, Texas, noted that Company's recurring losses from operations, negative cash flows from operations and net stockholders' capital deficiency raise substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: http://is.gd/WEX6r9 About Valence Technology Austin, Texas-based Valence Technology, Inc. (NASDAQ: VLNC) -- http://www.valence.com/-- is a global leader in the development of safe, long-life lithium iron magnesium phosphate energy storage solutions and provides the enabling technology behind some of the world's most innovative and environmentally friendly applications. Valence Technology has its Research & Development Center in Nevada, its Europe/Asia Pacific Sales office in Northern Ireland and global fulfillment centers in North America and Europe. VILLAGE RESORTS: Wants to Hire Bauch & Michaels as Counsel ---------------------------------------------------------- Village Resorts, Inc., sought and obtained approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ Paul M. Bauch, Kenneth A. Michaels Jr., Carolina Y. Sales and Laura J. Tepich of Bauch & Michaels, LLC , as counsel. Bauch & Michaels will: (a) render legal advice with respect to the powers and duties of the Debtor to continue to operate its business and manage its property as debtor-in-possession; (b) negotiate, prepare and file documents in connection with the sale of the Debtor's property; (c) take all necessary action to protect and preserve the estate of the Debtor, including the prosecution of actions on the Debtor's behalf, the defense of any actions commenced against the Debtor, negotiations concerning all litigation in which the Debtor is or becomes involved, and the evaluation and objection to claims filed against the estate; (d) prepare, on behalf of the Debtor, all necessary applications, motions, answers, orders, reports and papers in connection with the administration of the estate, and appear on behalf of the Debtor at all Court hearings in connection with the Debtor's case; and (e) render legal advice and perform all other legal services in connection with the foregoing and in connection with this chapter 11 case. The principal attorneys who will represent the Debtor in its chapter 11 case and their standard hourly rates are: Paul M. Bauch $400 per hour Kenneth A. Michaels Jr. $375 per hour Carolina Y. Sales $195 per hour Laura J. Tepich $150 per hour In addition to seeking payment for those hourly charges, Bauch & Michaels will charge for all extraordinary or non-overhead expenses actually incurred on behalf of the Debtor, consistent with its normal practices. To the best of the Debtor's knowledge, Bauch & Michaels does not hold or represent any interest adverse to the Debtor's estate, is a "disinterested person" as that phrase is defined in section 101(14) of the Bankruptcy Code. The firm can be reached at: Carolina Y. Sales, Esq. BAUCH & MICHAELS, LLC 53 W. Jackson Boulevard, Suite 1115 Chicago, IL 60604 Tel: (312) 588-5000 Fax: (312) 427-5709 - and - Kenneth A. Michaels, Jr., Esq. BAUCH & MICHAELS, LLC 53 West Jackson Boulevard, Suite 1115 Chicago, IL 60604 Tel: (312) 588-5000 Fax: (312) 427-5709 - and - Paul M. Bauch, Esq. BAUCH & MICHAELS LLC 53 West Jackson Boulevard, Suite 1115 Chicago, IL 60604 Tel: (312) 588-5000 Fax: (312) 427-5709 Village Resorts, Inc., aka Purple Hotel, filed for Chapter 11 bankruptcy (Bank. N.D. Ill. Case No. 11-50965) on Dec. 21, 2011. The Debtor estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. Kun Chae Bae, signed the petition as president. VILLAGE RESORTS: Deadline to File Proofs of Claim on March 26 ------------------------------------------------------------- The Bankruptcy Court scheduled March 26, 2012, as the deadline for creditors of Village Resorts, Inc., to file their proofs of claim against the Debtor. Village Resorts, Inc., aka Purple Hotel, filed for Chapter 11 bankruptcy (Bank. N.D. Ill. Case No. 11-50965) on Dec. 21, 2011. The Debtor estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. Kun Chae Bae, signed the petition as president. VILLAGE RESORTS: Files Schedules of Assets and Liabilities ---------------------------------------------------------- Village Resorts, Inc., filed with the Bankruptcy Court its schedules of assets and liabilities disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $10,000,000 B. Personal Property $1,000 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $5,654,687 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $24,503,154 ----------- ----------- TOTAL $10,001,000 $30,157,842 Village Resorts, Inc., aka Purple Hotel, filed for Chapter 11 bankruptcy (Bank. N.D. Ill. Case No. 11-50965) on Dec. 21, 2011. The Debtor estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. Kun Chae Bae, signed the petition as president. VITESSE SEMICONDUCTOR: AQR Capital Discloses 8.8% Equity Stake -------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, AQR Capital Management, LLC, disclosed that, as of Dec. 31, 2011, it beneficially owns 296,990 shares in common stock and debt securities that are convertible into 2,018,909 shares of common stock of Vitesse Semiconductor Corporation representing 8.83% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/thheEZ About Vitesse Based in Camarillo, California, Vitesse Semiconductor Corporation (Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of semiconductor solutions for Carrier and Enterprise networks worldwide. In October 2009, Vitesse completed a debt restructuring transaction that resulted in the conversion of 96.7% of the Company's 2024 Debentures into a combination of cash, common stock, Series B Preferred Stock and 2014 Debentures. With respect to the remaining 3.3% of the 2024 Debentures, Vitesse settled its obligations in cash. Additionally, Vitesse repaid $5.0 million of its $30.0 million Senior Term Loan, the terms of which were amended as part of the debt restructuring transactions. Vitesse Semiconductor Corporation filed with the U.S. Securities and Exchange Commission, its Annual Report on Form 10-K reporting a net loss of $14.81 million on $140.96 million of net revenues for the year ended Sept. 30, 2011, compared with a net loss of $20.05 million on $165.99 million of net revenues during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $60.99 million in total assets, $89.45 million in total liabilities and a $28.45 million total stockholders' deficit. VITESSE SEMICONDUCTOR: AQR Absolute Discloses 8.8% Equity Stake --------------------------------------------------------------- AQR Absolute Return Master Account L.P and AQR Capital Management, LLC, disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Dec. 31, 2011, they beneficially own 296,990 shares in common stock and debt securities that are convertible into 2,018,909 shares of common stock of Vitesse Semiconductor Corporation representing 8.83% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/iVy523 About Vitesse Based in Camarillo, California, Vitesse Semiconductor Corporation (Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of semiconductor solutions for Carrier and Enterprise networks worldwide. In October 2009, Vitesse completed a debt restructuring transaction that resulted in the conversion of 96.7% of the Company's 2024 Debentures into a combination of cash, common stock, Series B Preferred Stock and 2014 Debentures. With respect to the remaining 3.3% of the 2024 Debentures, Vitesse settled its obligations in cash. Additionally, Vitesse repaid $5.0 million of its $30.0 million Senior Term Loan, the terms of which were amended as part of the debt restructuring transactions. Vitesse Semiconductor Corporation filed with the U.S. Securities and Exchange Commission, its Annual Report on Form 10-K reporting a net loss of $14.81 million on $140.96 million of net revenues for the year ended Sept. 30, 2011, compared with a net loss of $20.05 million on $165.99 million of net revenues during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $60.99 million in total assets, $89.45 million in total liabilities and a $28.45 million total stockholders' deficit. VOLUNTEER BANCORP: Going Concern Doubt Raised on 2010 Form 10-K --------------------------------------------------------------- Volunteer Bancorp, Inc., filed on Feb. 7, 2012, its annual report on Form 10-K for the fiscal year ended Dec. 31, 2010. From April 24, 1997 (the date the Company registered its common stock pursuant to Section 12(g) of the Securities Exchange Act of 1934 to Dec. 3, 2004 (the date the Company filed a Form 15 to terminate that registration) Volunteer Bancorp filed with the United States Securities and Exchange Commission its periodic reports pursuant to the Exchange Act. In December of 2004, the Company filed a Form 15, based on the Company's belief that it satisfied the requirements under Rule 12g-4 to terminate the registration of the common stock, and thereby suspend the Company's duty to file reports pursuant to the Exchange Act. In 2011, the Company discovered that the filing of the Form 15 was in error; that the Company remained subject to the reporting requirements under the Exchange Act. The Company intends to file its quarterly report on Form 10-Q for the quarterly period ended Sept. 30, 2011, and its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011, and to continue to make timely filing of its periodic reports thereafter, as required by the Exchange Act. Crowe Horwath LLP, in Brentwood, Tennessee, expressed subtantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered significant losses in recent years, has elevated levels of non- performing assets and its subsidiary bank is not in compliance with minimum capital requirements required by the consent order with regulatory authorities. The Company reported a net loss of $3.6 million in 2010, compared with a net loss of $1.6 million in 2009. Interest income for 2010 was $6.2 million compared to $7.6 million in 2009. Total interest expense was $2.1 million in 2010 compared to $2.8 million in 2009. The net interest margin was 3.25% in 2010 compared to 3.67% in 2009, or a .42 basis point decrease. The provision for loan losses in 2010 was $2.7 million and for 2009 was $2.5 million. The Company's balance sheet at Dec. 31, 2010, showed $132.9 million in total assets, $130.0 million in total liabilities, and stockholders' equity of $2.9 million. A copy of the Form 10-Q is available for free at: http://is.gd/6ynPej Rogersville, Tenn.-based Volunteer Bancorp, Inc., is a a registered bank holding company organized under the laws of Tennessee, chartered in 1985. The Company conducts operations through its subsidiary, The Citizens Bank of East Tennessee, a state bank organized under the laws of the state of Tennessee in April 1906. The Company intends to file its quarterly report on Form 10-Q for the quarterly period ended Sept. 30, 2011, and its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011, and to continue to make timely filing of its periodic reports thereafter, as required by the Exchange Act. The Bank provides a full range of retail banking services, including (i) the acceptance of demand, savings and time deposits; (ii) the making of loans to consumers, businesses and other institutions; (iii) the investment of excess funds in the sale of federal funds, U.S. government and agency obligations, and state, county and municipal bonds; and (iv) other miscellaneous financial services usually handled for customers by commercial banks. WAGSTAFF MINNESOTA: Committee Has Until March 2 to Challenge Liens ------------------------------------------------------------------ The Hon. Nancy C. Dreher of the U.S. Bankruptcy Court for the District of Minnesota approved a stipulation tolling the deadlines which the Official Committee of Unsecured Creditors in the Chapter 11 cases of Wagstaff Minnesota, Inc., et al. will challenge liens and security interests of Debtors' senior secured lenders. The Court ordered that the Committee will have: -- until March 2, 2012, to commence a challenge -- solely with respect to the GE Reserved Challenges -- to the alleged liens and security interests held by General Electric Capital Corporation, General Electric Capital Business Asset Funding Corporation of Connecticut, GE Capital Franchise Finance Corporation, and Colonial Pacific Leasing Corporation; and -- the Committee will have until March 2, to commence a challenge -- solely with respect to the PWP Reserved Challenges -- to the alleged liens and security interests held by Perella Weinberg Partners Asset Based Value Master Fund I L.P. and Perella Weinberg Partners ABV Master Fund II A L.P. About Wagstaff Properties Hanford, California-based Wagstaff Properties LLC and its debtor- affiliates filed for Chapter 11 protection (Bankr. D. Minn. Case No. 11-43074) on April 30, 2011. The cases are jointly administered with Wagstaff Minnesota, Inc. (Case No. 11-43073). Bankruptcy Judge Nancy C. Dreher presides over the cases. Fredrikson & Byron, PA, and Peitzman Weg & Kempinsky LLP, represent the Debtors in their restructuring efforts. Alvarez & Marsal North America LLC serves as the Debtors' financial advisor. Trinity Capital, LLC and its affiliated broker-dealer, BWK Trinity Capital Securities LLC, serve as the Debtors' investment banker with respect to a sale of their assets. Epiq Bankruptcy Solutions LLC provides administrative, noticing and balloting services. Wagstaff Properties estimated assets and liabilities at $10 million to $50 million. On June 8, 2011, the U.S. Trustee appointed three member to the Official Committee of Unsecured Creditors in the Debtors' cases. Freeborn & Peters LLP and Lommen, Abdo, Cole, King & Stageberg P.A. serve as the Committee's counsel. WASHINGTON LOOP: Ch. 11 Wants Wells Fargo's Stay Plea Denied ------------------------------------------------------------ Louis X. Amato, Chapter 11 Trustee for the bankruptcy estate of Washington Loop, LLC, asks the U.S. Bankruptcy Court for the Middle District of Florida to deny Wells Fargo Equipment Finance, Inc.'s renewed motion granting relief from stay based on default (or anticipatory default) of amended order granting adequate protection to Wells Fargo. Wells Fargo, in its renewed motion, stated that pursuant to the order, the Debtor is required to make certain payments to Wells Fargo, of which the payments "...will be incorporated into the Plan", to wit: 1. agreement 700: the Debtor will make 32 consecutive monthly payments of $1619 due on the 26th day of each month commending on Nov. 26, 2011 and ending on June 26, 2014. 2. Agreement 701: the Debtor will make 3 consecutive monthly payments of $2705 due on the 11th day of each month commending on Nov. 11, 2011 and ending on July 11, 2014. However, the Debtor filed a joint Liquidating Plan dated Jan. 6, 2012, which constitutes, at a minimum, an anticipatory default/breach of the order, given the order already incorporates Plan payments therein. Clearly the Plan violates the pament structure under the order, entitling Wells Fargo to relief from stay thereunder. The trustee responds that at the time the Plan was filed, and as of the filing of the objection, the trustee was current on payments due to Wells Fargo. The trustee adds that as a result of the mediation between the trustee and the equity security holders of the Debtor, the trustee will likely file an Amended Plan in the coming days or weeks which will address, inter alia, treatment of Wells Fargo's claim in light of the requirements under the AP Order. The trustee stresses that it requires the continued use of the Wells Fargo equipment ? for which the trustee will continue to make the required payments. Wells Fargo is represented by: Ronald M. Emanuel, Esq. RONALD M. EMANUEL, P.A. 8751 West Broward Blvd., Suite 100 Plantation, FL 33324 Tel: (954) 472-7500 Fax: (954) 472-2222 E-mail: ron.emanuel@emanlaw.com The Chapter 11 trustee is represented by: Steven M. Berman, Esq. Hugo S. deBeaubien, Esq. 101 E. Kennedy Blvd., Suite 2800 Tampa, FL 33602 Tel: (813) 229-7600 Fax: (813) 229-1660 E-mail: sberman@slk-law.com bdebeaubien@slk-law.com About Washington Loop Punta Gorda, Florida-based Washington Loop, LLC, operates an aggregate mine in Charlotte County, Florida. The Company owns two parcels of real property and improvements -- the Loop Property and the Mirror Lakes Property -- which, together, comprise roughly 474 adjoining acres in Punta Gorda, Charlotte County. The Company filed for Chapter 11 bankruptcy protection on March 31, 2011 (Bankr. M.D. Fla. Case No. 11-06053). Judge Jeffery P. Hopkins presides over the case. Steven M. Berman, Esq., and Hugo S. deBeaubien, Esq., at Shumaker, Loop & Kendrick, LLP, in Tampa, Fla., represent the Debtor as counsel. The Debtor disclosed $45,098,259 in assets and $19,703,694 in liabilities as of the Chapter 11 filing. The Debtor was dismissed from a prior Chapter 11 case (Case No. 10-27981) by order of the Court entered on March 17, 2011. In the prior Chapter 11 case, the Debtor's Schedule F, as filed under penalty of perjury, listed some 34 general unsecured creditors totaling claims of $1,953,354. All Schedule F debts were listed as non-contingent, liquidated, and undisputed. The Debtor now declares that all Schedule F debts are unliquidated. These schedules were filed no less than two weeks after the dismissal of the prior Chapter 11 case, and only six weeks after the Debtor filed its Schedule F in that case. Don Walton, the United States Trustee for Region 21, and Charles A. Robinson Living Trust, creditor and interest holder against Washington Loop, filed separate requests to convert the Debtor's 2011 Chapter 11 reorganization case to Chapter 7 liquidation. Washington Loop filed with the Court a Chapter 11 plan and an explanatory disclosure statement on Aug. 18, 2011. The Troubled Company Reporter published a summary of the Plan in its Sept. 6, 2011 edition. The Plan is a reorganization plan accomplished through the continuation of the Debtor's primary business: the mining of the 750-acre property in Punta Gorda, Florida. The Debtor seeks to accomplish payment under the Plan primarily from the proceeds of the sale of mining materials and or the refinance of the Washington Loop Property. The Plan proposes to pay secured creditors -- ROBBIE, Mirror Lakes V, Mike Treworgy and Wells Fargo Equip Finance -- the present value of their claim at a market interest rate over an 84-month period through net income generated from the mining operation and through a sale or refinance of the Washington Loop Property. The Effective Date of the proposed Plan is Dec. 15, 2011. The first payment due under the plan is Jan. 15, 2012. Allowed Class 8 General Unsecured Claims will receive 100% of their allowed claim on or before the 84th month following the Effective Date. A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?76c8 On Sept. 19, 2011, the Court appointed of Louis X. Amato as Chapter 11 trustee, which is represented by Shumaker, Loop & Kendrick, LLP. The trustee tapped Rock Enterprises, Inc., as engineering consultant, Joseph R. Schortz, C.P.A, PLLC, as accountants, Douglas Wilson Companies as broker, and Lovina Lehr as consultant. WASHINGTON MUTUAL: HoldCo Objects to Seventh Amended Joint Plan --------------------------------------------------------------- BankruptcyData.com reports that HoldCo Advisors filed with the U.S. Bankruptcy Court an objection to Washington Mutual's Modified Seventh Amended Joint Plan. The objection asserts, "First, the Plan violates section 510(a) of the Bankruptcy Code, because the current plan waterfall provisions subordinates the CCB-1 Guarantees Claims in a manner inconsistent with the governing contractual provisions and applicable law, thus rendering the Plan unconfirmable under section 1129(a)(3) of the Bankruptcy Code. Second, given that the CCB-1 Guarantees Claims (Class 14) have voted against the Plan, the Debtors must satisfy the requirements of section 1129(b) of the Bankruptcy Code to confirm that Plan over the objection of this dissenting class. However, the Debtors cannot meet this burden because the Plan violates the absolute priority rule embodied in section 1129(b)(2)(B)(ii) of the Bankruptcy Code (the 'Absolute Priority Rule'), by providing recovery to equity before holders of the CCB- 1 Guarantees Claims receive payment in full. Third, the Plan does not satisfy the requirements of section 1129(b) of the Bankruptcy Code to confirm the Plan over the objection of a dissenting class for the additional reason that, in violation of section 1129(b)(1) of the Bankruptcy Code, it unfairly discriminates against the dissenting class of CCB-1 Guarantees Claims by forcing them to accept Runoff Notes that will be put into a Liquidating Trust while other unsecured creditors will receive cash. The Plan's treatment of the CCB-1 Guarantees Claims thus suffers from fatal defects which, unless modified, render the Plan unconfirmable." 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. WESTERN POZZOLAN: Status Conference Set for March 14 ---------------------------------------------------- The Bankruptcy Court will hold a Status Conference in the Chapter 11 case of Western Pozzolan Corp. on March 14, 2012, at 9:30 a.m. at MKN-Courtroom 2, Foley Federal Bldg. Western Pozzolan Corp. filed a bare-bones Chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 12-11040) in Las Vegas, Nevada, on Jan. 30, 2012. Judge Mike K. Nakagawa has been assigned to the case, taking over from Judge Linda B. Riegle. Matthew Q. Callister, Esq., at Callister & Associates, serves as the Debtor's counsel. The Debtor estimated assets of $10 million to $50 million and debts of up to $10 million. The petition was signed by James W. Scott, vice president. According to its Web site, Western Pozzolan operates the Long Valley Pozzolan Plant in Lassen County, California. Activities include mining, processing, developing and marketing Pozzolan for a variety of applications for which this inorganic, industrial mineral is uniquely suited. TCR's records indicate that this is not Western Pozzolan's first bankruptcy filing. The Debtor sought bankruptcy protection (Bankr. D. Nev. Case NO. 10-27096) in Las Vegas on Sept. 9, 2010. WOODLAKE GOLF: Files for Chapter 11 Bankruptcy Protection --------------------------------------------------------- My San Antonio reports Pecan Valley Golf Club, owner of Woodlake Golf Course, has filed for Chapter 11 bankruptcy protection, citing financial troubles. According to the report, efforts to find a buyer for the Northeast Side course at 6500 Woodlake Parkway have not panned out. The report says the course lost almost $163,000 in 2010, tax records filed in the bankruptcy case show. It listed in court documents nearly $3.1 million in assets and about $2 million in liabilities. The report notes that Woodlake's December 29 bankruptcy preceded the demise of Pecan Valley, which closed for financial reasons. The report says Woodlake's creditors include the San Antonio River Authority, which is owed $805,832; Nova Group, which holds a first lien on the course and is owed $250,000; Wells Fargo, owed $172,841; the IRS, owed $45,620; and Bexar County, owed $49,242. The report relates that Bexar County sued Woodlake in late 2010 to collect property taxes. The course worked out a settlement and has been paying about $2,000 a month since June, according to Carri Baker Wells of Linebarger Goggan Blair & Sampson LLP, the law firm representing the county. Woodlake Golf Club, LLC, filed for Chapter 11 protection (Bankr. W.D. Tex. Case No. 11-54453) on Dec. 29, 2011. WORLD SURVEILLANCE: La Jolla To Sell 50 Million of Common Shares ---------------------------------------------------------------- World Surveillance Group Inc. filed with the U.S. Securities and Exchange Commission a Form S-1 prospectus relating to the offer and sale of up to 50,000,000 shares of the Company's common stock, par value $0.00001 per share, which may be resold from time to time by La Jolla Cove Investors, Inc. The 50,000,000 shares may be acquired by the selling stockholder pursuant to a certain convertible debenture that was issued in a private placement in reliance on Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder. The initial financing of $500,000 was paid at the closing to the Company and an additional aggregate investment in the Company of $5.0 million is required by the private placement documents. The selling stockholder also has the right to purchase an additional $5.0 million of the Company's common stock at a purchase price of $0.21 per share for a period of three years. The private placement closed on Feb. 2, 2012. Other than commissions and legal fees of the selling stockholder, the Company will bear all expenses incurred in connection with registration of the common stock offered by the selling stockholder. The Company's common stock is traded on the OTCBB under the symbol "WSGI." On Feb. 2, 2012, the closing price of the Company's common stock was $0.04 per share. A full-text copy of the prospectus is available for free at: http://is.gd/juJ3vX 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 reported a net loss of $340,155 on $130,144 of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $7.78 million on $200,000 of net sales for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $2.94 million in total assets, $16.87 million in total liabilities and a $13.93 million total stockholders' deficit. 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. WORLD SURVEILLANCE: Raymer Maguire Discloses 7.1% Equity Stake -------------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission on Feb. 8, 2012, Raymer F. Maguire III and his affiliates disclosed that they beneficially own 29,201,708 shares of common stock of World Surveillance Group, Inc., representing 7.1% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/ZtQuEB 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 reported a net loss of $340,155 on $130,144 of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $7.78 million on $200,000 of net sales for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $2.94 million in total assets, $16.87 million in total liabilities and a $13.93 million total stockholders' deficit. 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. WWA GROUP: Amends 2010 Form 10-K; Has $1.7-Mil. Restated Net Loss ----------------------------------------------------------------- WWA Group, Inc., has amended in their entirety its Form 10-K filed on April 15, 2011, its Form 10-K/A filed on Nov. 14, 2011, to: (i) include amended consolidated income statement; (ii) include amended consolidated statements of cash flows that utilize the indirect method to adjust net income to reconcile to net cash provided by operating activities and properly reconcile the comparative annual periods; (iii) amend its disclosure in Note M ? Segment Information to reconcile segment information with amounts reported in the financial statements, (iv) amend Note N and Note O to reconcile with changes made in the consolidated statements of cash flow; (v) amend its management discussion of financial condition and results of operations to reconcile with changes made to the consolidated statements of cash flows; and (vi) a revised audit report. In its Feb. 3, 2012 revised audit report on the Company's financial statements as of and for the fiscal years ended Dec. 31, 2010, and 2009, Pinaki & Associates, LLC, in Hayward, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses. The Company reported a net loss from continuing operations of $471,813 on $84,770 of revenues in 2010, compared to a net loss of $978,859 on $102,653 of revenues in 2009. Including discontinued operations, the net loss was $1.7 million in 2010 as compared to $1.9 million in 2009. The Company's balance sheet as Dec. 31, 2010, showed $4.4 million in total assets, $99,220 in total liabilities, and stockholders; equity of $4.3 million. A copy of the Form 10-K/A-2 is available for free at: http://is.gd/FqjJ8w Austin, Texas-based WWA Group, Inc., is a U.S. registered diversified industrial services company. The Company was founded on heavy equipment Auctions in Dubai, and expanded into Shipping, equipment rentals, Construction, Earthmoving, and other complimentary services. The Dubai operations were sold off in October 2010, and the Company continues to hold its investment into a US based construction and project management company and an on line asset auction company based in the US. * US Trustee Stands By Changes to Ch. 11 Fee Guidelines ------------------------------------------------------- Hilary Russ at Bankruptcy Law360 reports that the U.S. Trustee Program defended itself Tuesday from a barrage of criticism from top law firms and others who say proposed updates to the Chapter 11 billing guidelines threaten to create administrative, financial and ethical problems for bankruptcy attorneys. "Written comments from many of the largest law firms reflect the view that the current system for reviewing attorneys' fees does not require reform," Jane Limprecht, a spokeswoman for the government, told Law360 in an email. * 9th Circ. Won't Rule On Orders Keeping Trustees Onboard --------------------------------------------------------- Roxanne Palmer at Bankruptcy Law360 reports that the Ninth Circuit said in a precedential ruling Thursday that it does not have jurisdiction to hear appeals of bankruptcy court orders denying requests to remove Chapter 11 trustees, saying such decisions are not final appealable orders. While the Ninth Circuit has appellate jurisdiction over final orders of district courts that review bankruptcy decisions, the underlying order in the current case ? which denied a request to jettison the trustee for bankrupt food processor SK Foods ? is not final, the appeals court found, according to Law360. * BOND PRICING -- For Week From Feb. 6 to 10, 2012 -------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- AMBAC INC 9.375 8/1/2011 11.125 AMBAC INC 9.500 2/15/2021 11.000 AMBAC INC 7.500 5/1/2023 14.140 AMBAC INC 5.950 12/5/2035 9.600 AMBAC INC 6.150 2/7/2087 1.000 ACARS-GM 8.100 6/15/2024 1.000 AES EASTERN ENER 9.000 1/2/2017 29.000 AGY HOLDING COR 11.000 11/15/2014 42.725 AHERN RENTALS 9.250 8/15/2013 39.900 ALION SCIENCE 10.250 2/1/2015 52.000 AMR CORP 9.200 1/30/2012 26.250 AMR CORP 9.000 8/1/2012 31.500 AM AIRLN PT TRST 10.180 1/2/2013 67.000 AMR CORP 6.250 10/15/2014 29.250 AMR CORP 10.200 3/15/2020 27.750 AMR CORP 10.290 3/8/2021 19.100 AMR CORP 10.550 3/12/2021 27.100 AMR CORP 10.000 4/15/2021 26.561 AMR CORP 10.125 6/1/2021 15.500 AMR CORP 9.750 8/15/2021 28.500 AMR CORP 4.500 2/15/2024 11.000 AMERICAN ORIENT 5.000 7/15/2015 43.259 BBY-CALL02/12 2.250 1/15/2022 95.719 BROADVIEW NETWRK 11.375 9/1/2012 85.025 BANKUNITED FINL 3.125 3/1/2034 7.125 CALIF BAPTIST 7.600 11/15/2012 20.000 CALIF BAPTIST 7.900 11/15/2017 20.000 CATERPILLAR FINL 5.750 2/15/2012 100.102 CIRCUS & ELDORAD 10.125 3/1/2012 85.100 DIRECTBUY HLDG 12.000 2/1/2017 22.125 DIRECTBUY HLDG 12.000 2/1/2017 22.125 DELTA PETROLEUM 3.750 5/1/2037 65.000 DUNE ENERGY INC 10.500 6/1/2012 91.351 EASTMAN KODAK CO 7.250 11/15/2013 30.000 EASTMAN KODAK CO 7.000 4/1/2017 29.500 EASTMAN KODAK CO 9.950 7/1/2018 29.750 ENERGY CONVERS 3.000 6/15/2013 33.500 EVERGREEN SOLAR 13.000 4/15/2015 47.500 FHLB-CALL02/12 2.600 8/15/2017 99.892 FIBERTOWER CORP 9.000 11/15/2012 15.250 GREAT ATLA & PAC 5.125 6/15/2011 1.688 GEN ELEC CAP CRP 4.000 2/15/2012 99.926 GLB AVTN HLDG IN 14.000 8/15/2013 28.000 GMX RESOURCES 5.000 2/1/2013 60.360 GMX RESOURCES 5.000 2/1/2013 61.000 GOLDMAN SACHS GP 5.300 2/14/2012 100.012 GLOBALSTAR INC 5.750 4/1/2028 50.250 HAWKER BEECHCRAF 8.500 4/1/2015 24.000 HAWKER BEECHCRAF 9.750 4/1/2017 11.940 ELEC DATA SYSTEM 3.875 7/15/2023 93.060 LEHMAN BROS HLDG 6.000 7/19/2012 27.125 LEHMAN BROS HLDG 5.000 1/22/2013 26.000 LEHMAN BROS HLDG 5.625 1/24/2013 27.000 LEHMAN BROS HLDG 5.100 1/28/2013 25.500 LEHMAN BROS HLDG 5.000 2/11/2013 26.500 LEHMAN BROS HLDG 4.800 2/27/2013 26.000 LEHMAN BROS HLDG 5.000 3/27/2013 26.500 LEHMAN BROS HLDG 5.750 5/17/2013 26.400 LEHMAN BROS HLDG 4.800 3/13/2014 27.000 LEHMAN BROS HLDG 5.000 8/3/2014 24.000 LEHMAN BROS HLDG 6.200 9/26/2014 27.375 LEHMAN BROS HLDG 5.150 2/4/2015 25.500 LEHMAN BROS HLDG 5.250 2/11/2015 26.000 LEHMAN BROS HLDG 8.800 3/1/2015 26.010 LEHMAN BROS HLDG 7.000 6/26/2015 24.000 LEHMAN BROS HLDG 8.500 8/1/2015 26.250 LEHMAN BROS HLDG 5.000 8/5/2015 25.880 LEHMAN BROS HLDG 7.000 12/18/2015 26.000 LEHMAN BROS HLDG 5.500 4/4/2016 26.500 LEHMAN BROS HLDG 8.920 2/16/2017 26.000 LEHMAN BROS HLDG 11.000 6/22/2022 25.750 LEHMAN BROS HLDG 11.000 7/18/2022 26.500 LEHMAN BROS HLDG 11.500 9/26/2022 25.750 LEHMAN BROS HLDG 9.500 2/27/2023 25.500 LEHMAN BROS HLDG 10.375 5/24/2024 25.500 LEHMAN BROS INC 7.500 8/1/2026 3.000 LEHMAN BROS HLDG 11.000 3/17/2028 26.250 LOCAL INSIGHT 11.000 12/1/2017 0.501 LIFECARE HOLDING 9.250 8/15/2013 78.250 MASHANTUCKET PEQ 8.500 11/15/2015 5.025 MF GLOBAL HLDGS 6.250 8/8/2016 32.750 MF GLOBAL LTD 9.000 6/20/2038 30.500 MANNKIND CORP 3.750 12/15/2013 60.750 PMI GROUP INC 6.000 9/15/2016 21.750 PENSON WORLDWIDE 8.000 6/1/2014 42.307 REDDY ICE CORP 13.250 11/1/2015 44.280 REAL MEX RESTAUR 14.000 1/1/2013 47.000 RESIDENTIAL CAP 6.500 6/1/2012 99.186 RESIDENTIAL CAP 6.500 4/17/2013 58.000 THORNBURG MTG 8.000 5/15/2013 10.250 THQ INC 5.000 8/15/2014 50.250 TOUSA INC 9.000 7/1/2010 13.000 TOUSA INC 9.000 7/1/2010 12.967 TDS INVESTOR 9.875 9/1/2014 55.250 TRAVELPORT LLC 11.875 9/1/2016 29.000 TRAVELPORT LLC 11.875 9/1/2016 28.375 TIMES MIRROR CO 7.250 3/1/2013 35.050 TRIBUNE CO 5.250 8/15/2015 34.650 MOHEGAN TRIBAL 8.000 4/1/2012 75.500 MOHEGAN TRIBAL 7.125 8/15/2014 58.150 TEXAS COMP/TCEH 10.250 11/1/2015 29.250 TEXAS COMP/TCEH 10.250 11/1/2015 30.050 TEXAS COMP/TCEH 10.250 11/1/2015 32.500 CONTL AIRLINES 6.563 2/15/2012 99.750 VERENIUM CORP 5.500 4/1/2027 94.999 VERENIUM CORP 5.500 4/1/2027 95.250 VERSO PAPER 11.375 8/1/2016 43.000 WILLIAM LYONS 7.625 12/15/2012 27.500 WILLIAM LYON INC 10.750 4/1/2013 27.720 WILLIAM LYON INC 7.500 2/15/2014 26.000 WESTERN EXPRESS 12.500 4/15/2015 52.500 ********* 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 ***