/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120221.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, February 21, 2012, Vol. 16, No. 51 Headlines 701 MARIPOSA: Case Summary & 12 Largest Unsecured Creditors 99 CENTS: S&P Assigns 'B' Corporate Credit Rating ALCOA INC: Fitch Affirms Rating on Preferred Stock at 'BB' ALESCO PREFERRED: Moody's Lifts Rating on Class A-2 Notes to Ba1 ALLIANT TECHSYSTEMS: Fitch Lifts Issuer Default Ratings to 'BB+' AMBAC FINANCIAL: Plan Voting Extended to Feb. 29 Amid IRS Talks AMBAC FINANCIAL: Panel Says Changes to Plan Docs. Only Technical AMBAC FINANCIAL: AAC Seeks $4.1MM from Hercules City Agency AMBAC FINANCIAL: Files Amendment to Benefit Plans Prospectus AMERICAN AIRLINES: U.S. Bank Wants Payment for Use of Planes AMERICAN AIRLINES: Wilmington Trust Wants Adeq. Protection AMERICAN AIRLINES: CEO to Weigh Acquisitions After Ch. 11 Exit AMERICAN AIRLINES: Hearing on Weil Gotshal Hiring on Feb. 29 AMERICAN AIRLINES: Court Approved Groom on Interim AMERICAN AIRLINES: Interim Order on Bain as AEA Consultant Entered AMERICAN LASER: Debtor Changes Name to CLA Holdings AMERIGAS PARTNERS: Fitch Affirms 'BB' IDR'; Outlook Negative ANTS SOFTWARE: Fletcher Asset Discloses 9.6% Equity Stake ARKANOVA ENERGY: Reports $5.3-Mil. Profit in Fiscal Q4 ARCADIA RESOURCES: Delays Form 10-Q for Dec. 31 Quarter ATLANTIC & PACIFIC: Judge Sets Feb. 27 Plan Confirmation Hearing ATTACHMATE GROUP: Moody's Retains 'B2' Corporate Family Rating AURASOUND INC: Reports $122,000 Net Income in Dec. 31 Quarter AVENUE BAR: Judge Weissbrodt Converts Case to Chapter 7 AVION POINT: Combined Plan Hearing Scheduled for April 4 BARNWELL COUNTY: Wants Until March 19 to Propose Chapter 11 Plan BATAVIA NURSING: Cyganowski Appointed as New Director BERNARD L. MADOFF: Picard Has Billed $273MM in Fees BERNARD L. MADOFF: Judge OKs Rye Portfolio $400MM Settlement BEYOND OBLIVION: Judge Approves DIP Financing Plan BORDERS GROUP: Reaches Accord With Ex-Worker Class Over Layoffs BOWLES SUB: Plan Outline Hearing Continued Until April 4 BROOKSIDE INN: Case Summary & 2 Largest Unsecured Creditors BUFFETS RESTAURANTS: Can Hire Paul Weiss as Attorney CAESARS ENTERTAINMENT: Debt Trades at 13% Off in Secondary Market CALDWELL THEATRE: Faces Chapter 11 Bankruptcy Amid Foreclosure CALYPTE BIOMEDICAL: Michael Roth Discloses 8.5% Equity Stake CATHOLIC CHURCH: 500 Victims File Claims vs. Milwaukee Archdiocese CATHOLIC CHURCH: Milwaukee Opposes Three Abuse Survivors' Claims CATHOLIC CHURCH: Wilm. Settlement Trustee Says Order Complied CATHOLIC CHURCH: 2 Former Priests in Wilmington Ask for TRO CATHOLIC CHURCH: Wilm. Files Post-Confirmation Report for Dec. 31 CDC CORP: Security Holders Object to Unit's Shares Sale CHEMTURA CORP: S&P Affirms 'BB-' Rating on $455MM Senior Notes CHRIST HOSPITAL: CHA Proposes to Acquire Hospital for $104 Million CHRYSLER GROUP: Pulls $3.5-Bil. Energy Department Loan Request CIMA LLC: Hires Alford, Clausen & McDonald as Special Counsel CIMA LLC: Court OKs Ronald F. Suber as Local Counsel CIMA LLC: Files Amended Schedules of Assets and Liabilities CINRAM INTERNATIONAL: Moody's Downgrades CFR to 'Caa3' CIRCUS AND ELDORADO: Owner Cancels Public Debt Offering CIT GROUP: Moody's Raises Corporate Family Rating to 'B1' CLARE OAKS: Final Hearing on DIP Financing Set for March 6 CLEAR CHANNEL: Bank Debt Trades at 20% Off in Secondary Market COMPREHENSIVE CARE: Lloyd Miller Discloses 8.4% Equity Stake COMPREHENSIVE CARE: Michael Marcus Discloses 2.4% Equity Stake COMPREHENSIVE CARE: Joshua Smith Discloses 7.3% Equity Stake COMPREHENSIVE CARE: Benjamin West Discloses 6.8% Equity Stake CONVERTED ORGANICS: Bank of America Discloses 9.6% Equity Stake COOPER-STANDARD: S&P Upgrades Corporate Credit Rating to 'BB-' CORD BLOOD: Ironridge, et al., Cease to Hold 5% Equity Stake CROSS BORDER: Lazarus Investment Discloses 7.5% Equity Stake DEEL LLC: Court Ordered the Closing of Non-Lead Debtors' Cases DEX MEDIA EAST: Bank Debt Trades at 53% Off in Secondary Market DEX MEDIA WEST: Bank Debt Trades at 43% Off in Secondary Market DIRECT BUY: Moody's Lowers Corporate Family Rating to 'Ca' DOT VN: Adam Benowitz Discloses 9.9% Equity Stake DOWNEY REGIONAL: City Council to Consider Financial Deal DOUGLASS INDUSTRIES: Files for Chapter 11 Bankruptcy Protection DYNEGY INC: Examiner Okayed to Issue Subpoenas to Third Parties DYNEGY INC: Wins Final Approval to Pay Critical Vendors DYNEGY INC: Has No Controlling Interest in Debtors DYNEGY INC: Has $2.45-Bil. Current Deficit as of Sept. 30 EADS LLC: Case Summary & 8 Largest Unsecured Creditors EASTMAN KODAK: Judge Says Tax Impact Slight Under Bankruptcy EASTMAN KODAK: Holzer Mulls Potential Securities Fraud Case EASTMAN KODAK: Proposes James A. Mesterharm as CRO EASTMAN KODAK: Taps FTI for Transitional Services EMISPHERE TECHNOLOGIES: Bai Feng Discloses 9.8% Equity Stake ENCINO CORPORATE: Access to Cash Collateral Until March 31 ENRON CORP: ECRC's 28th Post-Confirmation Status Report ENRON CORP: ECRC's 29th Post-Confirmation Status Report ENRON CORP: Court Awards $7,000 for John Hancock's Fees EVERGREEN SOLAR: Sues Chinese Joint Venture Partner EVERGREEN SOLAR: Ameriprise No Longer A 5% Shareholder EVERGREEN SOLAR: Aristeia No Longer a Substantial Shareholder EXECUTIVE CENTER: Case Summary & 20 Largest Unsecured Creditors F & P LLC: Voluntary Chapter 11 Case Summary FANNIE MAE: Should Embrace Loan Forgiveness, HUD's Donovan Says FENTON SUB: Plan Outline Hearing Continued Until April 4 FIRST AUTOMOTIVE: Case Summary & 12 Largest Unsecured Creditors FIRST FEDERAL: Dimensional Fund Equity Stake Down to 1.61% FIRST FEDERAL: First Manhattan No Longer Has Any Shares FLASH CARRIER: Case Summary & 4 Largest Unsecured Creditors FOOT LOCKER: Moody's Says Share Repurchase No Impact on Ba3 CFR FORSMAN INC: Case Summary & 20 Largest Unsecured Creditors FREESCALE SEMICONDUCTORS: Moody's Rates New Term Loan at 'B1' FREESCALE SEMICON: Fitch Rates $500-Mil. Sr. Notes at 'B-' G.L. & ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors GATEHOUSE MEDIA: Bank Debt Trades at 73% Off in Secondary Market GENERAL MARITIME: Plan Outline Hearing Scheduled for Feb. 28 GENERAL MARITIME: Rights Offering Record Date Changed to Feb. 24 GHOST TOWN: Alaska Presley Offers $1.5 Million at Auction GLOBAL AVIATION: Creditors Reveal Individual Stakes in Firm GOLF RESORT: Case Summary & 19 Largest Unsecured Creditors GOODYEAR TIRE: Fitch Affirms Issuer Default Rating at 'B+' GREAT PLAINS: Seeks to Employ Walthall Drake as Accountants GREAT PLAINS: Quinn Buseck Steps Down as Receiver's Counsel GREAT PLAINS: Has Until March 26 to File Schedules HAWKER BEECHCRAFT: Bank Debt Trades at 26% Off in Secondary Market HAWKER BEECHCRAFT: Bank Debt Trades at 21% Off in Secondary Market HCA HOLDINGS: Bank of America Discloses 62.2% Equity Stake HCA HOLDINGS: KKR Millennium Discloses 62.2% Equity Stake HYLAND SOFTWARE: S&P Affirms 'B+' Corporate Credit Rating INNER CITY: Asset Sale Used to Dodge $31MM Tax Bill, Feds Allege ISAACSON STRUCTURAL: Hearing on Cash Collateral Use Set Today JACKSON GREEN: Adequate Protection Deal Extended Until March 14 JACKSON GREEN: Cash Collateral Hearing Rescheduled to March 14 JASPERS ENTERPRISES: Wants to Use Red Roof Inn Revenues JASPERS ENTERPRISES: Has Interim OK to Hire Desai Eggmann JASPERS ENTERPRISES: Sec. 341 Creditors' Meeting Set for March 13 JMC STEEL: S&P Raises Corporate Credit Rating to 'B+' JOY GLOBAL: Moody's Issues Summary Credit Opinion KAUFMAN BROS: Files for Bankruptcy to Liquidate KENTUCKIANA MEDICAL: Granger to Invest $1.5 Million in Hospital KENTUCKIANA MEDICAL: Clarksville Town Balks at Lease Deal KLN STEEL: Sues to Recover $2.3-Mil. from Saltgrass, et al. LEE COUNTY: Case Summary & 20 Largest Unsecured Creditors LEHMAN BROTHERS: Sues Citibank for $2.5 Billion LEHMAN BROTHERS: Disputed Claims Reserve Bid Has Objections LEHMAN BROTHERS: Insists on $65.6MM Estimate of Swiss Unit Claim LEHMAN BROTHERS: Closes $1.325-Bil. Archstone Deal LEHMAN BROTHERS: Wins Nod to Settle JPMorgan Funds' Claim LEHMAN BROTHERS: Settles Dispute Over $7.5-Mil. Fee Claim LEHMAN BROTHERS: LBI Claims Dispute Pushes Back Payback Estimate LENNAR CORP: Moody's Raises Corporate Family Rating to 'B1' LEXINGTON ROAD: Gets Court Approval to Use Emergency Funds LEXINGTON ROAD: Files Schedules of Assets and Liabilities LIGHTSQUARED INC: Said to Hire Moelis; Falcone Denies Bankruptcy LRB REALTY: Case Summary & 5 Largest Unsecured Creditors LSP ENERGY: Taps Epiq as Claims and Noticing Agent MARKET 52: Files for Bankruptcy, Plans to Hold Section 363 Sale MAUI LAND: ValueWorks Discloses 7.1% Equity Stake MBIA INC: Bank of America Seeks to Block CEO's Deposition in Suit METHANEX CORP: Moody's Affirms Ba1 Corporate Family Rating MOHEGAN TRIBAL: Exchange Offers to Expire Tomorrow MOUNTAIN COUNTRY: Involuntary Chapter 11 Case Summary NATIONAL CENTURY: JPM Opposes Ex-CEO's Access to Documents NATIONAL CENTURY: CSFB Trustee to Make Distributions March 12 NATIONAL CENTURY: VI/XII Trust's Report for Dec. 31 Quarter NATIONAL CENTURY: UAT's Report for Dec. 31 Quarter NATIONAL RETAIL: Fitch Assigns 'BB+' Rating to Preferred Stock NORTHERN BERKSHIRE: Plan Confirmation Hearing Slated for April 2 OILSANDS QUEST: Wins Alberta Court Nod of C$3.75-Mil. DIP Loan PEAK BROADCASTING: Rabobank Wants Court to Disallow Plan Votes PHOENIX FOOTWEAR: Dimensional Fund No Longer Owns Shares PIEDMONT CENTER: Trustee Wants to Employ Nelson as Accountant PROSPECT STUDIOS: Case Summary & 20 Largest Unsecured Creditors PURSELL HOLDINGS: Wins Court Approval of Reorganization Plan QUALITY DISTRIBUTION: Teton Cuts Equity Stake to 1.9% QUALITY DISTRIBUTION: Wellington Holds 6.6% Equity Stake QUANTUM FUEL: Capital Ventures Ceases to Hold 5% Equity Stake QUANTUM FUEL: Alphabet Partners Discloses 9.7% Equity Stake RCR PLUMBING: Wants Decision on Leases Extended for 90 Days R.E. LOANS: Wells Fargo Paid in Full Through Exit Facility REAL MEX: Court Approves Imperial Capital as Financial Advisor REAL MEX: Johnson Associates Approved as Compensation Advisor REALOGY CORP: Bank Debt Trades at 7% Off in Secondary Market RED EAGLE: Taps Matrix to Sell 17 Gas Stations SAN PASQUAL CASINO: S&P Withdraws 'BB-' Issuer Credit Rating SCHOMAC GROUP: Plan Exclusivity Expires March 31 SEARCHMEDIA HOLDINGS: Christian Leone Holds 6.3% Equity Stake SEQUENOM INC: RA Capital Discloses 4.1% Equity Stake SEQUENOM INC: Samuel Isaly Discloses 6.8% Equity Stake SNOKIST GROWERS: Keybank et al., Want Trustee Motion Resolved SOLYNDRA LLC: Slams Ex-Workers' Bid to Nix Lender Protections SOLYNDRA LLC: Taps Jones Lang to Market Fremont, Calif. Property SPANISH BROADCASTING: Caspian Owns 4.1% of Class A Shares STOCKDALE TOWER: Hires Foley Bezek as Special Counsel SUMMER VIEW: Promises to Pay Creditors in Full, in Installments SUNGARD DATA: S&P Affirms 'B+' Corporate Credit Rating SUPERIOR PROPERTY: Wellman & Warren OK'd as Litigation Counsel SUPERIOR PROPERTY: Lender Dispute Resolved, Wants Case Dismissal SUPERIOR PROPERTY: Taps Kogan Law Successor Counsel to Ervin Cohen SWIFT TRANSPORTATION: Moody's Affirms 'B2' Corp. Family Rating TAS PROPERTIES: Dade County Back Taxes to Be Paid in March TASTY BAKING: Dimensional Ceases to Own Shares TELLICO LANDING: Judge Approves Heritage Solutions DIP Loan TEMBEC INDUSTRIES: Moody's Affirms 'B3' Corporate Family Rating TERRESTAR NETWORKS: Judge Lane Approves Chapter 11 Plan THOMSON WORLEY: Case Summary & 6 Largest Unsecured Creditors TIGRENT INC: Lazarus Investment Discloses 7.2% Equity Stake TOWN CENTER: Hearing on Adequacy of Plan Outline Set for March 5 TOWN CENTER: Renews Motion to Value Collateral at $43.4 Million TRANSUNION CORP: S&P Affirms 'B+' Corporate Credit Rating TRAVELPORT INC: Bank Debt Trades at 16% Off in Secondary Market TSC GLOBAL: Rosner Law Firm, Outten & Golden Launch Class Suit TSC GLOBAL: Court Jointly Administers Bankruptcy Cases TXU CORP: Bank Debt Trades at 44% Off in Secondary Market UAL CORP: Appeals Court Orders Remand Of Dominguez Suit UAL CORP: Hawaii Court Affirms Denial of Kuehu Disability Claims VALENCE TECHNOLOGY: ClearBridge Discloses 5.8% Equity Stake VILLA D'ESTE: Court Disapproves Elaine D. Estingoff as Counsel VILLA D'ESTE: Chapter 11 Case Dismissed, to Pay $975 Unpaid Fees VITESSE SEMICONDUCTOR: Aristeia Discloses 5.7% Equity Stake VITESSE SEMICONDUCTOR: Whitebox Advisors Holds 9.9% Equity Stake WEIGHT WATCHERS: S&P Affirms 'BB' Corporate Credit Rating WESTSIDE MEDICAL: Committee Taps Irell & Manella as Counsel WESTSIDE MEDICAL: Plan Outline Hearing Continued Until Feb. 23 WHITE KNOLL VENTURE: Hires Fredman Knupfer as Bankruptcy Counsel WHITE KNOLL VENTURE: Sec. 341 Creditors' Meeting Set for March 15 WHITESTONE HOUSTON: Montgomery County Lot to Be Auctioned WHITTON CORP: Collateral Valuation Hearing Continued Until March 7 WOODRIDGE VILLAS: Case Summary & 20 Largest Unsecured Creditors W.R. GRACE: Proposes to Settle Otis Pipeline Disputes W.R. GRACE: Offers $19.5-Mil. Medical Trust for Libby Claimants W.R. GRACE: Renews Application to Hire PwC as Accountants YELLOWSTONE MOUNTAIN: Founder Sues Cushman, Credit Suisse for $2BB ZOGENIX INC: FMR LLC Discloses 9.8% Equity Stake * Christine Swanick Joins Sheppard Mullin New York * Large Companies With Insolvent Balance Sheets ********* 701 MARIPOSA: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: 701 Mariposa Project, LLC 4768 Park Granada, Suite 200 Calabasas, CA 91302 Bankruptcy Case No.: 12-11486 Chapter 11 Petition Date: February 16, 2012 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: William H. Brownstein, Esq. WILLIAM H. BROWNSTEIN & ASSOCIATES, P.C. 1250 6th St Ste 205 Santa Monica, CA 90401-1637 Tel: (310) 458-0048 Fax: (310) 576-3581 E-mail: Brownsteinlaw.bill@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 12 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-11486.pdf The petition was signed by Gary Walch, manager. 99 CENTS: S&P Assigns 'B' Corporate Credit Rating ------------------------------------------------- Standard & Poor's Ratings Services assigned a 'B' corporate credit rating to 99 Cents Only Stores. The outlook is stable. "At the same time, we assigned a 'B+' issue-level rating with a '2' recovery rating to the company's $525 million term loan. The '2' recovery rating indicates our expectation for substantial (70% to 90%) recovery of principal in the event of a payment default," S&P said. "We also assigned a 'CCC+' issue-level rating with a '6' recovery rating to the company's $250 million senior notes. The '6' recovery rating indicates our expectation for negligible (0% to 10%) recovery of principal in the event of a payment default," S&P said. "Ares and Canada Pension Plan Investment Board (CPPIB) used the company's unrated asset-based lending facilities, together with $224 million in cash and equivalents and $636 million in equity, to buy 99 Cents for about $1.6 billion, excluding fees and expenses," S&P said. "Our ratings on 99 Cents reflect our expectation that the company's pro forma metrics will remain indicative of a 'highly leveraged' financial risk profile (based on our criteria)," said Standard & Poor's credit analyst Diya Iyer. "The outlook is stable. Pro forma credit metrics are in line with the rating category, and we expect that operational improvement, coupled with modest debt reduction, will result in improved credit measures over the intermediate term. We expect revenue growth in the mid-single digits due to positive same-store sales growth and the opening of new stores. We expect improving EBITDA margins as benefits from inventory management, labor reduction, and improved distribution helps offset inflationary pressures," S&P said. "We could raise the rating if successful store expansion and pricing strategies generate double-digit same-store sales and gross margins improve 60 basis points. This would result in leverage below 5.0x. We could lower the rating if competitive pressures, coupled with operational inefficiencies, result in meaningful loss of market share, leading to weaker profitability and leverage above 6.0x. This could occur, for example, if sales remain flat and gross margin narrows about 60 basis points," S&P said. ALCOA INC: Fitch Affirms Rating on Preferred Stock at 'BB' ---------------------------------------------------------- Fitch Ratings has affirmed the ratings for Alcoa Inc. The Rating Outlook is Stable. The ratings reflect Fitch's view that earnings and cash flow generation should continue to improve with economic recovery longer term but could decline slightly in 2012 on lower metals prices and softness in Europe. Fitch expects 2012 EBITDA of at least $3 billion which, together with continued capital discipline, cost control and focus on liquidity, should result in financial leverage remaining below 3 times (x) over the next 12 months. Fitch expects continued weakness in the construction markets to constrain the economic rebound over the next 12 - 18 months. Alcoa's guidance is that it will be free cash flow positive in 2012 after capital expenditures of $1.35 billion, $650 million cash contribution to pension funds, and $350 million investment in the Ma'aden joint venture. Alcoa generated operating EBITDA of $3.3 billion in 2011 and free cash flow of $781 million after capital expenditures of $1.3 billion, $336 million of cash contributions to pension funds and shareholder dividends of $131 million but before Ma'aden investments of $249 million. Net new borrowing was $206 million and cash on the balance sheet at Dec. 31, 2011 was $1.9 billion. Fitch notes that the $322 million 6% notes were due Jan. 15, 2012. Pro forma for the debt repayment, cash on hand was $1.6 billion, total debt was $9.0 billion, and the $3.75 billion revolver maturing July 25, 2016 was fully available (commercial paper outstanding was $224 million as of December 31, 2011). The revolver has a covenant that limits Consolidated Indebtedness to 150% of Consolidated Net Worth. Near-term scheduled debt maturities are: $445 million in 2012, and $549 million in 2013; $743 million in 2014; $45 million in 2015, and $26 million in 2016. Of the aggregate maturity in 2014, $575 million represents the convertible notes due March 15, 2014; the initial conversion rate was equivalent to a conversion price of approximately $6.43/share. At Dec. 31, 2011, pension plans were under funded by $3.2 billion and the U.S. pension plans were under funded by $2.7 billion. The Stable Ratings Outlook reflects Fitch's view that operating EBITDA will be greater than $3.0 billion in 2012; free cash flow will be positive, and cash on hand and free cash flow will be sufficient to repay current debt maturities over the next 24 months. The ratings would be on review with negative implications should liquidity deteriorate, earnings be worse than expected or total debt fail to decline. Better than anticipated earnings and debt repayment could result in a review of the Outlook with positive implications. Fitch has affirmed the following ratings, with a Stable Outlook: -- Issuer Default Rating (IDR) at 'BBB-'; -- Senior unsecured debt at 'BBB-'; -- $3.25 billion revolving credit facility at 'BBB-'; -- Preferred stock at 'BB'; -- Short-term IDR at 'F3'; -- Commercial paper at 'F3'. ALESCO PREFERRED: Moody's Lifts Rating on Class A-2 Notes to Ba1 ---------------------------------------------------------------- Moody's Investors Service has upgraded the rating on the following notes issued by Alesco Preferred Funding III, Ltd. US$70,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes (current balance of $70,000,000), Upgraded to Ba1 (sf); previously on March 27, 2009 Downgraded to Ba3 (sf). RATINGS RATIONALE According to Moody's, the rating upgrade action taken is primarily the result of the improvement in the credit quality of the underlying portfolio and deleveraging of the Class A-1 notes. The improvement in credit quality of the portfolio is indicated by a decrease in Moody's-calculated weighted average rating factor (WARF) to 1205 from 1619 as of the last rating action date. The deleveraging is due to significant pay down of the Class A-1 notes, which have received about $61 million since the last rating action. The $61 million pay down came from a combination of excess interest proceeds and redemptions of underlying assets. Moody's has noticed that since the last rating action, seven assets have been redeemed at par and the proceeds were used to cure the coverage tests by paying down the Class A-1 notes. As of the latest trustee report dated January 9, 2012, the Class A Overcollateralization Test is still failing at 115.94% (limit 130.00%). Alesco Preferred Funding III, Ltd, issued on March 25, 2004, is a collateralized debt obligation backed by a portfolio of bank trust preferred securities (the 'TruPS CDO'). On March 27, 2009, the last rating action date, Moody's downgraded four classes of notes as a result of the deterioration in the credit quality of the transaction's underlying portfolio. In Moody's opinion, the banking sector outlook remains negative although there have been some recent signs of stabilization. The number of FDIC bank failures continues to decline in 2012 compared to 2011, 2010 and 2009, and some of the previously deferring banks have resumed interest payment on their trust preferred securities. The portfolio of this CDO is mainly composed of trust preferred securities issued by small to medium sized U.S. community banks that are generally not publicly rated by Moody's. To evaluate their credit quality, Moody's uses RiskCalc model, an econometric model developed by Moody's KMV, to derive credit scores for these non-publicly rated bank trust preferred securities. Moody's evaluation of the credit risk for a majority of bank obligors in the pool relies on FDIC financial data received as of Q3-2011. Moody's also evaluates the sensitivity of the rated transactions to the volatility of the credit estimates, as described in Moody's Rating Implementation Guidance "Updated Approach to the Usage of Credit Estimates in Rated Transactions," October 2009. Moody's performed a number of sensitivity analyses of the results to some of the key factors driving the ratings. The sensitivity of the model results to changes in the WARF (representing a slight improvement and a slight deterioration in the credit quality of the collateral pool) was examined. If WARF is increased by 202 points from the base case of 1208, the model results in an expected loss that is one notch worse than the result of the base case for the Class A-1 Notes. Similarly, if the WARF is decreased by 258 points, expected losses are one notch better than the base case results. Moody's also took into consideration, both quantitatively and qualitatively, the possibility that some of the deferring banks in the portfolio may resume interest payments on their trust preferred securities. In addition to the quantitative factors that are explicitly modeled, qualitative factors are part of rating committee considerations. Moody's considers as well the structural protections in the transaction, the risk of triggering an Event of Default, the recent deal performance in the current market conditions, the legal environment, and specific documentation features. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors and judgments regarding the nature and severity of credit stress on the transactions, may influence the final rating decision. The principal methodology used in this rating was "Moody's Approach to Rating TRUP CDOs" published in May 2011. Due to the impact of revised and updated key assumptions referenced in these rating methodologies, key model inputs used by Moody's in its analysis, such as par, weighted average rating factor, Moody's Asset Correlation, and weighted average recovery rate, may be different from the trustee's reported numbers. The transaction's portfolio was modeled, according to Moody's rating approach, using CDOROM v.2.8 to develop the default distribution from which the Moody's Asset Correlation parameter was obtained. ALLIANT TECHSYSTEMS: Fitch Lifts Issuer Default Ratings to 'BB+' ---------------------------------------------------------------- Fitch Ratings has upgraded Alliant Techsystems Inc.'s (ATK) Issuer Default Ratings to 'BB+' from 'BB'. The rating Outlook is Stable. Approximately $1.35 billion of outstanding debt is covered by Fitch's ratings. The upgrade is supported by ATK's strong credit metrics and lower leverage (Debt to EBITDA) which resulted from the retirement of $300 million of 2.75% convertible senior subordinated notes in September 2011. Additionally, the ratings are supported by consistently positive free cash flow (FCF; cash from operations less capital expenditures and dividends); steady margins; solid liquidity; increasing commercial sales; and ATK's role as a sole source provider for many of its products to the US Government. Most of ATK's credit metrics are strong for the new rating level. The company has the financial strength to withstand pressure on its revenues and profits, but Fitch believes a non-investment grade rating is still appropriate given concerns about several specific contracts and the general outlook for U.S. government spending. Fitch's concerns include an anticipated decline in small caliber ammunition demand and the uncertainty surrounding a renewal of the Lake City Army Ammunition plant (Lake City) operating contract. Fitch's financial projections incorporate expected sales declines at ATK's Armament Segment due to lower modernization activities in Lake City, lower demand for small caliber ammunition due to the redeployment of troops from Iraq and Afghanistan, and a recently announced DOD strategic plan to significantly reduce US troop levels by 2017. A loss of the Lake City contract would have a meaningful impact on the company's financial profile because ATK generated approximately 15% of its revenues from the plant's operations, however Fitch believes such an event would not result in a negative rating action due to the solid credit metrics of the company. Fitch is also concerned with risks to core defense spending after fiscal 2012; the funded status of pension plans (75% funded); the growing competition in the rocket industry and uncertainty about ATK's role in NASA's future plans, though this concern is somewhat mitigated by NASA's commitment to developing space exploration systems which will likely allow ATK to leverage its existing rocket technologies. Fitch also notes the company's history of increasing leverage for acquisitions; commodities exposure; and declining margins in the Security and Sporting segment driven by a shift in consumer demand towards lower-end products. Future Rating Actions: Fitch is unlikely to consider a positive rating action in the near future. A negative rating action may be considered should the company's leverage (debt to EBITDA) increase due to a debt funded acquisition or if defense spending cuts have a more significant impact on the company's earnings and FCF than currently anticipated. Leverage: ATK decreased its leverage by retiring its $300 million 2.75% convertible senior subordinated notes in September 2011. ATK's leverage was approximately 2.1 times (x) at Jan. 1, 2012, down from 2.5x at the end of fiscal 2011 (March 31, 2011). Fitch anticipates leverage to stay relatively stable over the next several years as ATK will be making mandatory debt repayments of its term loan. Notwithstanding the above, Fitch estimates leverage could increase to the 2.3x - 2.4x range in fiscal 2014, should the DoD decide not to renew the Lake City contract. Liquidity: ATK's liquidity declined significantly in fiscal 2012 from $1.1 billion at the end of fiscal 2011. The decline was primarily driven by the aforementioned debt retirement. At the end of the third quarter of fiscal 2012, ATK had a good liquidity position of approximately $781 million, consisting of $356 million in cash and $425 million in availability under its $600 million credit revolving facility, after giving effect to $175 million of outstanding letters of credit. Fitch expects ATK's liquidity to remain within a range of $700 million to $900 million over the next several years. Cash Generation: ATK generated approximately $419 million cash flow from operating activities during the last 12 months ended (LTM) Jan. 1, 2012, slightly down from $421 million at the end of fiscal 2011. ATK's FCF totaled $230 million during the LTM ended Jan. 1, 2012, down from $284 million in fiscal 2011 due to higher capex and dividends. Fitch expects ATK's cash flow from operations to remain stable; however FCF will decline significantly beginning with fiscal 2013 due to higher expected pension contributions. Cash Deployment: In the past, ATK focused its cash deployment primarily on acquisitions and capital expenditures; however beginning with fiscal 2012, ATK's cash deployment has shifted to pension contributions and share repurchases, along with a continued commitment to capital expenditures. Fitch anticipates ATK to deploy approximately $62 million on pension contributions, $50 million on share repurchases, $130 million on capital expenditures and $27 million on dividends in fiscal 2012 ending March 31, 2012. For more information on the pension, please see below. ATK repurchased a total of $50 million worth of common stock by the end of the third quarter of fiscal 2012 (Jan. 1, 2012). On Jan. 31, 2012, the Board of Directors authorized a share repurchase program of up to $200 million worth of shares, which ATK expects to execute over the next two fiscal years. ATK had not repurchased any shares in fiscal 2010 and fiscal 2011. ATK has averaged approximately $121.5 million in capital expenditures over the past four years and it spent $130 million in fiscal 2011. ATK anticipates spending approximately $130 million in fiscal 2012; however, Fitch expects future capital expenditures to decline. In the fourth quarter of fiscal 2011, ATK declared and paid a $0.20 per share dividend. ATK had never paid dividends on its common stocks prior to the fiscal 2011 distribution. ATK's board has kept the quarterly dividend at $0.20 per share in fiscal 2012. Fitch expects dividend payments to remain stable for the foreseeable future as ATK will be utilizing stock repurchases to enhance shareholder returns. Fitch expects that ATK's acquisition program will focus on bolt-on targets, and Fitch also expects there is low risk of large acquisitions which would pressure the company's credit profile. Pension Analysis: At the end of fiscal 2011, the fair value of the plan assets was $2.1 billion, up from $2.0 billion in fiscal 2010. Also at March 31, 2011, the fair value of ATK's pension plan liabilities was $2.7 billion, up from $2.6 billion in fiscal 2010. The plan was unfunded by $676.4 million (75% funded). The discount rate decreased from to 5.6% in fiscal 2011 from 5.9% in fiscal 2010. ATK contributed $61.6 million and $7.6 million to its pension plans year-to-date in fiscal 2012 and in fiscal 2011, respectively. The company is not planning to make additional contributions to the plan in fiscal 2012, but it is expected to contribute a total of approximately $14 million to other post- employment benefits (OPEB) in fiscal 2012. Fitch expects pension contributions to become a large part of ATK's cash deployment strategy beginning with fiscal 2013 during which ATK plans to contribute $160 million. Industry Overview: More than 50% of ATK's revenues are derived from the defense industry. High levels of defense spending currently support ATK's ratings, but the DoD budget environment is highly uncertain after fiscal 2012 because of large U.S. government budget deficits and the potential for large, automatic spending cuts beginning in fiscal 2013. The end of the 'Supercommittee' negotiations without an agreement increases the probability of Fitch's harshest DoD spending scenario ('sequestration'), but Fitch expects less severe and more orderly spending scenarios are possible because Congress could act to avoid or modify sequestration's automatic cuts beginning in January 2013. Fitch estimates that DoD spending reductions in the sequestration scenario would total nearly $1 trillion over 10 years. In Fitch's view, the most negative element of this scenario is an estimated 12%-13% decline in spending in fiscal 2013, which Fitch understands would be made across the board without consideration of program health or national security priorities. The fiscal 2013 budget request shows a 1.0% decline in base budget spending and a 4% decline in modernization spending (procurement and R&D). Fitch believes that modest declines in defense spending would not lead to negative rating actions given solid diversification of ATK's portfolio and increasing sales from the Security and Sporting segment. The exposure to DoD spending is also mitigated by ATK's good liquidity position. Fitch took the following rating actions: -- Long-term IDR upgraded to 'BB+' from 'BB'; -- Senior secured bank facility affirmed at 'BBB-'; -- Convertible senior subordinated notes upgraded to 'BB' from 'BB-'; -- Senior subordinated notes upgraded to 'BB' from 'BB-'. AMBAC FINANCIAL: Plan Voting Extended to Feb. 29 Amid IRS Talks --------------------------------------------------------------- Ambac Financial Group, Inc. disclosed that, in order to give it additional time to negotiate a final settlement of its dispute with the Department of the Treasury -- Internal Revenue Service, the voting deadline relating to the Second Amended Plan of Reorganization of Ambac Financial dated Sept. 30, 2011 has been extended to Feb. 29, 2012 at 5:00 p.m. (prevailing Pacific Time) and the Plan objection deadline has been extended to Feb. 29, 2012 at 4:00 p.m. The Bankruptcy Court hearing relating to the confirmation of the Plan remains scheduled for March 13, 2012. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. The confirmation hearing for approval of Ambac's Chapter 11 plan, originally set for Dec. 8, is now on the calendar for Jan. 19. Disagreements with the Wisconsin insurance commissioner over the sharing of tax benefits had held up a plan for the holding company. Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMBAC FINANCIAL: Panel Says Changes to Plan Docs. Only Technical ---------------------------------------------------------------- Ambac Financial Group, Inc., objects to the request of Wanson F. Silva to overturn the order approving the disclosure statement explaining the proposed Chapter 11 plan, insisting that it complied with F.R.B.P. Rule 2002. Pro se creditor Wanson F. Silva is asking Judge Shelley Chapman to overturn the Court's October 5, 2011 order approving the Second Amended Disclosure Statement for the Second Amended Plan of Reorganization of Ambac Financial Group, Inc. Mr. Silva insists that the Second Amended Disclosure Statement filed on Sept. 30, 2011 is significantly different than the original Disclosure Statement filed on July 8, 2011. Despite that fact, the Court did not give the required 28 days to file objections to the Second Amended Disclosure Statement, he complains. He further contends that the Court did not allow a minimum of 28 days after the Second Amended Disclosure Statement was filed to allow for a hearing on those documents. Although the Debtor's creditors are entitled to 28 days' notice of the objection deadline and hearing to the Disclosure Statement pursuant to Rule 2002(b), the statute does not specify a minimum notice period for holders of equity securities, Allison H. Weiss, Esq., at Dewey & LeBoeuf LLP, in New York, notes. In any event, the Debtor provided adequate notice to its creditors and equity security holders, including Mr. Silva, she insists. Although the Second Amended Disclosure Statement was filed less than a week before the Disclosure Statement Hearing, Mr. Silva, as well as other holders of claims against and equity interests in the Debtor, had a meaningful opportunity to oppose entry of the Disclosure Statement, she contends. Contrary to Mr. Silva's assertion, the First Amended Disclosure Statement provided a detailed description of the Amended Plan Settlement and the Second Amended Disclosure Statement retained such settlement and merely included conforming changes made to the Plan and technical revisions, none of which were significant to shareholders, Ms. Weiss argues. She further avers that the time to appeal the Disclosure Statement Order or file a motion to vacate it has expired. Because the Silva Motion was filed three months after entry of the Disclosure Order, the Silva Motion must be denied, the Debtor urges the Court. In a separate filing, the Official Committee of Unsecured Creditors expressed its support for the Debtor's objection to the Silva Motion. Moreover, the Creditors' Committee says it is concerned that the time and expense of addressing meritless filings is draining the Debtor's estate of limited resources at a critical juncture in its Chapter 11 case. Mr. Silva is a junior, out-of-the-money party who is prohibited by the Bankruptcy Rules from challenging the Disclosure Statement Order at this time, and his motion has imposed unnecessary costs on the Debtor and its creditors, the Creditors' Committee adds. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. The confirmation hearing for approval of Ambac's Chapter 11 plan, originally set for Dec. 8, is now on the calendar for Jan. 19. Disagreements with the Wisconsin insurance commissioner over the sharing of tax benefits had held up a plan for the holding company. Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMBAC FINANCIAL: AAC Seeks $4.1MM from Hercules City Agency ----------------------------------------------------------- Ambac Assurance Corp. sued the city of Hercules, California's redevelopment agency on Tuesday before the Contra Costa County Superior Court, seeking to force the city to turn over all $4.1 million in tax increments collected in December or to get the court to freeze the funds, Tom Lochner of Contra Costa Times reported. In the alternative, AAC asked the court to attach other Hercules assets, including some real estate properties, the report relayed. Court Commissioner Judith Sanders, however, declined the insurer's petition for immediate relief and instead scheduled a February 21 hearing before the court. Hercules City Manager Steve Duran told the Contra Costa Times it was inevitable that there would be a default because there is not enough tax increment. The city manager explained that the redevelopment agency's bond debt obligations have exceeded revenue from property tax increments in recent years, and as of this week, the agency's non-housing component was $3.8 million underwater, the report relayed. AAC accused Hercules in the complaint of misappropriating pledged property tax proceeds that were supposed to be transferred to trustee Bank of New York Mellon Trust Co. five days before the Feb. 1 due date of the interest payment, the report related. In a court declaration, Mr. Duran said Hercules deposited the $4.1 million into a Pooled Cash Investment account that is drawn on to pay for various restricted and unrestricted activities, the report disclosed. That account was tapped in August 2011 to pay $5.3 million in bond debt service, Mr. Duran added. The $2.4 million that Hercules defaulted on Wednesday represents interest due Feb. 1 on two tax-allocation bond issues dating to 2005 and 2007; a principal and interest payment totaling about $5 million is due Aug. 1, the report explained. Mr. Duran stated that even if the redevelopment agency did not default on the Feb. 1 interest payment, there would not still be enough for the August 1 payment, the report noted. John Killeen, Esq., Hercules' outside counsel, did not dispute that Hercules was technically in default, the report disclosed. The lawyer, however, asserted that the real dispute lies on what is the proper remedy, the report added. "They (Ambac) don't care at all if the city shuts down," Mr. Killeen was quoted as saying by the report. The lawyer warned that AAC's lawsuit could force the city into bankruptcy, the report added. AAC's counsel, Jerrold Abeles, Esq., however, insisted in a brief that it is AAC who would suffer irreparable harm unless the court grants relief, the report relayed. He alleged that Hercules' "illegal seizure of bond collateral" shifts the burden of the city's cash flow problems onto bond investors and AAC and threatens the integrity of the institution of bond financing, the report continued. Mr. Duran voiced his disappointment in AAC for suing the redevelopment agency, adding that the insurer would be better off negotiating a settlement with Hercules, the report noted. He added that he remains hopeful the two sides can come to terms before the next court hearing. Mr. Duran wrote in his declaration that in January, Hercules had proposed to AAC a lease-back deal -- in which a property is sold and leased back to the seller by the buyer -- involving city- owned properties that the insurer now seeks to attach; the city owns several large, vacant commercial tracts, the report disclosed. Redevelopment agencies statewide were scheduled to disband Wednesday pursuant to a state Supreme Court ruling, the report related. AAC is the financial arm of Ambac Financial Group, Inc. On February 2, 2012, Standard & Poor's Ratings Services lowered its underlying rating (SPUR) on Hercules Redevelopment Agency, Calif.'s housing tax allocation bonds (TABs) five notches to 'B' from 'BBB-'. The outlook is stable. "We also base the downgrade on our view of the agency's debt management and its failure to apply any pledged net tax increment revenue to its nonhousing debt service payment on Feb. 1, 2012. We understand that the agency has made its Feb. 1, interest payment for the housing TABs," S&P said. Contemporaneously, S&P also lowered its underlying rating (SPUR) two notches to 'CC' from 'CCC' on Hercules Redevelopment Agency, Calif.'s series 2005 and 2007A tax allocation bonds (TABs). The outlook is negative. "The downgrade reflects our assessment of the agency's use of the Ambac Assurance Corp. surety reserve to fund a $2.4 million debt service payment on Feb. 1, 2012," said Standard & Poor's credit analyst Sussan Corson. "The outlook remains negative reflecting our expectation that pledged revenue will remain insufficient to cover nonhousing debt service obligations and remaining surety reserve funds could be depleted in the next one-to-two years," Ms. Corson added. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. The confirmation hearing for approval of Ambac's Chapter 11 plan, originally set for Dec. 8, is now on the calendar for Jan. 19. Disagreements with the Wisconsin insurance commissioner over the sharing of tax benefits had held up a plan for the holding company. Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMBAC FINANCIAL: Files Amendment to Benefit Plans Prospectus ------------------------------------------------------------ Ambac Financial Group, Inc. filed with the U.S. Securities and Exchange Commission on Jan. 30, 2012, a post-effective amendment no. 1 relating to these registration statements: (a) Registration Statement on Form S-8 of the Company filed with the SEC on May 12, 1998 to register (i) 100,000 shares of the Company's common stock, par value $0.01 per share, for issuance pursuant to the Ambac Assurance Corporation Savings Incentive Plan, formerly known as the Ambac Financial Group, Inc. Savings Incentive Plan; and (ii) an indeterminate amount of interests to be offered or sold pursuant to the Plan; and (b) Registration Statement on Form S-8 of the Company filed with the SEC on October 31, 2003 to register (i) 500,000 additional shares of Common Stock for issuance pursuant to the Plan, and (ii) an indeterminate amount of Plan Interests to be offered or sold pursuant to the Plan. On Nov. 5, 2010, the Plan's sponsorship was transferred from AFG to AAC. Effective as of Nov. 5, 2010, the Plan was amended to provide that the Ambac Financial Group, Inc. Stock Fund may no longer be offered to the Plan participants as an investment option. All securities which were held by the Stock Fund have been sold. Accordingly, the Company deregisters (i) the shares of Common Stock that have not been and will not be issued pursuant to the Savings Plan, and (ii) the Plan Interests that have not been offered or sold pursuant to the Plan. AFG contemporaneously filed with the SEC a certification and notice of termination of registration under Section 12(g) of the Securities Exchange Act with respect to the Plan Interests. Pursuant to SEC Release 33-6188, plan interests are exempt from registration and Form 11-K is no longer required to be filed, explains Plan Administrator Michael Reilly. This filing, however, does not terminate or suspend any duties to file reports by AFG, he clarifies. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. The confirmation hearing for approval of Ambac's Chapter 11 plan, originally set for Dec. 8, is now on the calendar for Jan. 19. Disagreements with the Wisconsin insurance commissioner over the sharing of tax benefits had held up a plan for the holding company. Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMERICAN AIRLINES: U.S. Bank Wants Payment for Use of Planes ------------------------------------------------------------ U.S. Bank Trust National Association, as trustee and security agent with respect to the 10.5% Senior Secured Notes due 2012 of American Airlines Inc., asks the Court to condition the use by the Debtors of U.S. Bank's 143 aircraft and the continued imposition of the automatic stay upon the grant of adequate protection. U.S. Bank made the request after finding that the Debtors are presently using the Aircraft and such use reduced the value of the portfolio by more than $23,000,000 per month without the performance of maintenance on the aircraft. U.S. Bank also complained that its interests in the Aircraft eroded prepetition because of the Debtors' failure to honor their obligation to maintain maximum loan to value ratio with respect to their transaction. U.S. Bank suggests that, to provide adequate protection of its interest in the Aircraft, the Debtors must, among others, comply with the requirements of the regulations issued under the Federal Aviation Act and other laws with respect to the Aircraft and all provisions of the Aircraft Documents and other related operative documents, pay postpetition interest and other fees pursuant to the Note Documents, and provide access to the Aircraft and all records and pertinent information. U.S. Bank asks the Court to grant it a "super-priority" administrative claim pursuant to Section 507(b) of the Bankruptcy Code to the extent the adequate protection sought proves to be insufficient protection of the Notes Trustee's interests in the Aircraft. Absent adequate protection, U.S. Bank seeks relief from the automatic stay. U.S. Bank is represented by: Craig M. Price, Esq. CHAPMAN AND CUTLER LLP Chicago, Illinois Tel: (312) 845-3000 Fax: (312) 516-1900 E-mail: cprice@chapman.com About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, John Lyons, Felecia Perlman and Jay Goffman at Skadden, Arps, Slate, Meagher & Flom LLP entered their appearance as proposed counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings on Dec. 9, 2011. The Committee has selected Togut, Segal & Segal LLP as co-counsel for conflicts and other matters; Moelis & Company LLC as its investment banker, and Mesirow Financial Consulting, LLC as its financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Wilmington Trust Wants Adeq. Protection ---------------------------------------------------------- Wilmington Trust Company, solely in its capacity as collateral trustee with respect to 7.5% Senior Secured Notes due 2016 in the aggregate principal amount of $1 billion issued by American Airlines, Inc. and guaranteed by AMR Corporation; and U.S. Bank National Association, solely in its capacity as indenture trustee with respect to the Senior Secured Notes, jointly ask the Court to grant adequate protection of the Trustees' interest in collateral securing the Senior Secured Notes. According to Tyson M. Lomazow, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York -- tlomazow@milbank.com -- the Collateral is necessary for American to continue to provide scheduled air carrier services from any point in the United States to Heathrow Airport in England, Narita International Airport and Haneda Airport in Japan, and from Chicago O'Hare International Airport to Beijing Capital International Airport and Shanghai Pudong International Airport in China. These routes are immensely profitable, Mr. Lomazow tells the Court. The Trustees point out that there has been a decline in the value of the Collateral due to the Debtors' continued use of the Collateral and the imposition of the automatic stay. A November 28, 2011 appraisal valued the Collateral at $1,526,511,000, a more than 35% decrease from the March 2011 value of the Collateral of at least $2.37 billion as reported by Bloomberg News. As adequate protection, the Trustees ask the Court to compel the Debtors to, among others, comply with all laws and requirements relating to the Scheduled Service, any Route Authority, any Slot, and any Gate Leasehold, make regular payments of interest and fees and expenses pursuant to the Note Documents, maintain and preserve the Collateral, and provide access to all documents relating to the Collateral. To the extent the adequate protection proves to be inadequate, the Trustees seek superpriority administrative claims pursuant to section 507(b) of the Bankruptcy Code for any postpetition diminution in the value of the Collateral. In the alternative, the Trustees ask the Court to lift the automatic stay to enable them to exercise their rights and remedies in respect of the Collateral. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, John Lyons, Felecia Perlman and Jay Goffman at Skadden, Arps, Slate, Meagher & Flom LLP entered their appearance as proposed counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings on Dec. 9, 2011. The Committee has selected Togut, Segal & Segal LLP as co-counsel for conflicts and other matters; Moelis & Company LLC as its investment banker, and Mesirow Financial Consulting, LLC as its financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: CEO to Weigh Acquisitions After Ch. 11 Exit -------------------------------------------------------------- AMR Corp.'s Chief Executive Officer Tom Horton said in an interview with Bloomberg News that the company may try to buy a rival after exiting bankruptcy as the U.S. airline industry shrinks, Mary Schlangenstein of Bloomberg News reported on Feb. 6. Mr. Horton reiterates that AMR hopes to exit Chapter 11 this year as an independent company and not as part of a merger with another airline. The past month, it has been reported that other airline giants like Delta Air Lines and US Airways Group Inc. and TPG Capital are in talks regarding potential merger bids with AMR. Mr. Horton refused to identify any potential bids and played down the risk of a takeover by US Airways, noting two failures in merger talks with UAL Corp.'s United Airlines and in a hostile approach to Delta when that carrier was in bankruptcy, Bloomberg related. American, the third-biggest U.S. airline, must move quickly to secure $2 billion in cost cuts that include axing pensions and 13,000 jobs to help fend off potential suitors, Mr. Horton told Bloomberg. "If we don't get our act together and we don't show some progress on this plan, that's an opening for others," Mr. Horton said. Mr. Horton, however, believes mergers in the airline industry is a trend that will continue in the future. He noted that smaller carriers like Alaska Air Group Inc. and JetBlue Airways Corp., and perhaps US Airways, will be consolidated with bigger rivals. Creditors Want to Explore Alternative Options In response to Mr. Horton's statement on AMR exiting from Chapter 11 as an independent company, some of its unsecured creditors increasingly feel the bankrupt airline should explore a deal with US Airways Group or another carrier, Soyoung Kim and Kyle Peterson of Reuters reported, citing people familiar with the situation. Bloomberg indeed noted that while American holds exclusive rights to file a reorganization plan with the bankruptcy court, rivals can talk with the Official Committee of Unsecured Creditors, which includes the airline's three biggest unions, the U.S. Pension Benefit Guaranty Corp., and banks representing bondholders. According to Reuters, Committee members are concerned about AMR's prospect of staying competitive as a stand-alone airline after sitting out the latest round of mergers. Unsecured creditors, Reuters said, are in a consensus that AMR should explore alternative options that will lead to better recovery of their claims. IAG Not Making a Stake in AMR International Consolidated Airlines Group SA Chairman Antonio Vazquez said making a stake in AMR is not on the table for the time being and pointed out that they are not in a position to disrupt AMR's reorganization process, according to a Feb. 16 report by Bloomberg. Mr. Vazquez said that IAG, formed last year from a merger of British Airways with Spain's Iberia, is "very supportive" of AMR's turnaround plan and "very optimistic" about the outcome, Bloomberg related. He declined to say whether London-based IAG had been approached by TPG about forming a bid group. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, John Lyons, Felecia Perlman and Jay Goffman at Skadden, Arps, Slate, Meagher & Flom LLP entered their appearance as proposed counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings on Dec. 9, 2011. The Committee has selected Togut, Segal & Segal LLP as co-counsel for conflicts and other matters; Moelis & Company LLC as its investment banker, and Mesirow Financial Consulting, LLC as its financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Hearing on Weil Gotshal Hiring on Feb. 29 ------------------------------------------------------------ The Bankruptcy Court approved, on an interim basis, AMR Corp. and its affiliates' application to employ Weil, Gotshal & Manges LLP as their counsel, nunc pro tunc to the Petition Date. Judge Lane ruled that the entry and terms of the interim order are without prejudice to the rights of the U.S. Trustee for Region 2, the Official Committee of Unsecured Creditors, and each member of the Committee in its individual capacity to object or otherwise comment on the Debtors' Application, which deadline to object is on February 24, 2012. If the Court enters an order denying the employment of Weil on a final basis, the firm nevertheless will be entitled to file an application under Section 330 of the Bankruptcy Code for an allowance of compensation and reimbursement of expenses for the period from the Petition Date through the date of the order, subject to the rights of any party-in-interest to object thereto. In the event that the Court does not enter an order approving the Debtors' Application on a final basis on or before March 31, 2012, the U.S. Trustee, the Committee and its members will be bound by the provision authorizing the filing of a final application under Section 330 of the Bankruptcy Code for allowance of compensation and reimbursement of expenses, but only for the period from the Petition Date through the earlier of March 31, 2012 or the date that the Court enters an order denying the Application on a final basis. The Court will convene a final hearing on the Debtors' Application on February 29, 2012. Before the Final Hearing and pending further order of the Court, no compensation or expense reimbursement will be paid by the Debtors to Weil, Judge Lane clarified. As reported in the Jan. 18, 2012 edition of the TCR, the services to be provided by the firm include the preparation of court papers in connection with the Debtors' bankruptcy plans and the administration of their estates. Weil Gotshal will also handle the prosecution and defense of lawsuits, and the negotiation of disputes involving the Debtors. Weil Gotshal will be paid for its services on an hourly basis and will get reimbursed for expenses. The firm's hourly rates range from $760 to $1,075 for members and counsel; $430 to $750 for associates; and $175 to $310 for paraprofessionals. The firm agreed to cap its hourly rate at $1,000 for the representation. Weil Gotshal received approximately $2.2 million retainer, according to court papers. Alfredo Perez, Esq., a member of Weil Gotshal & Manges LLP, disclosed in a declaration that his firm does not hold or represent interest adverse to the Debtors' estates, and that it is a "disinterested person" under Section 101(14) of the Bankruptcy Code. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, John Lyons, Felecia Perlman and Jay Goffman at Skadden, Arps, Slate, Meagher & Flom LLP entered their appearance as proposed counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings on Dec. 9, 2011. The Committee has selected Togut, Segal & Segal LLP as co-counsel for conflicts and other matters; Moelis & Company LLC as its investment banker, and Mesirow Financial Consulting, LLC as its financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Court Approved Groom on Interim -------------------------------------------------- The bankruptcy court entered an interim order authorizing AMR Corp. and its affiliates' employment of Groom Law Group, Chartered as the Debtors' special employee benefits counsel, nunc pro tunc to the Petition Date. A final hearing on the Debtors' Application is scheduled for February 29, 2012. Objections are due no later than February 24. Before the Final Hearing and pending further order of the Court, no compensation or expense reimbursement will be paid by the Debtors to Groom, Judge Lane ruled. Randall White, associate general counsel of AMR Corp., said they selected the firm because of its "invaluable experience in providing legal services in connection with employee benefit plans and related issues." In return for its services, Groom Law will be paid its standard hourly rates minus a 10% discount and will be reimbursed of its expenses. The firm received a $100,000 retainer fee from the Debtors. The firm does not hold or represent any interest adverse to the Debtors or their estates, according to a declaration by Gary M. Ford, Esq., a principal in Groom Law. Mr. Ford may be reached at: Gary M. Ford, Esq. GROOM LAW GROUP, CHARTERED 1701 Pennsylvania Avenue, N.W. Washington, D.C. 20006-5811 Tel: (202) 861-6627 Fax: (202) 659-4503 E-mail: gford@groom.com About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, John Lyons, Felecia Perlman and Jay Goffman at Skadden, Arps, Slate, Meagher & Flom LLP entered their appearance as proposed counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings on Dec. 9, 2011. The Committee has selected Togut, Segal & Segal LLP as co-counsel for conflicts and other matters; Moelis & Company LLC as its investment banker, and Mesirow Financial Consulting, LLC as its financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Interim Order on Bain as AEA Consultant Entered ------------------------------------------------------------------ Bankruptcy Judge Sean Lane approved, on an interim basis, the AMR Corp. and its affiliates' application to employ Bain & Company, Inc., as strategic consultants to American Eagle Airlines, Inc., nunc pro tunc to December 14, 2011. Parties will have until February 24, 2012 to object to the Debtors' Application. The Court will convene a final hearing on the Debtors' Application on February 29, 2012. Before the Final Hearing and pending further order of the Court, no compensation or expense reimbursement will be paid by the Debtors to Bain, Judge Lane clarified. The Debtors said in the application that the consulting services firm, which has previously served as American Eagle's strategic consultant, will assist the company in labor-cost assessment and negotiations. It will also help the company identify and structure potential labor solutions as part of its restructuring, and assist in the ongoing development of its business strategy. Bain will get a monthly fee of $525,000 and reimbursed expenses. American Eagle will also indemnify the firm for any liability that may result in connection with its employment, according to court papers. "Having worked with [American Eagle's] management and its other advisors, Bain has developed relevant experience and expertise regarding [American Eagle] that will assist it in providing effective and efficient services in these Chapter 11 cases," said John Hutchinson, the company's chief financial officer. Bain's services for American Eagle do not overlap with any other services provided by professionals working for the other affiliated debtors of AMR Corp., Mr. Hutchinson said, pointing out that its employees belong to different unions and are covered by different collective bargaining agreements. Bain does not hold or represent interest adverse to American Eagle or its estate, according to court papers filed by William Wade, vice-president of the firm. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, John Lyons, Felecia Perlman and Jay Goffman at Skadden, Arps, Slate, Meagher & Flom LLP entered their appearance as proposed counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings on Dec. 9, 2011. The Committee has selected Togut, Segal & Segal LLP as co-counsel for conflicts and other matters; Moelis & Company LLC as its investment banker, and Mesirow Financial Consulting, LLC as its financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LASER: Debtor Changes Name to CLA Holdings --------------------------------------------------- ALC Holdings LLC, et al., notify the U.S. Bankruptcy Court for the District of Delaware that effective Feb. 3, 2012, the case caption will reflect CLA Holdings LLC, et al. The Debtors relate that on Jan. 31, 2012, the Court approved the asset purchase agreement and authorized the sale of certain assets. Pursuant to the sale order, the Debtors are authorized to change their corporate names and caption of the Chapter 11 cases. A full-text copy of the changes in the Debtors' names and caption changes is available for free at: http://bankrupt.com/misc/ALCHOLDINGS_namechange.pdf About ALC Holdings Farmington Hills, Michigan-based ALC Holdings LLC dba American Laser Centers, and American Laser Skincare, was in the business of providing 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. J.H. Cohn LLP serves as its financial advisor. American Laser Centers on Feb. 6, 2012, disclosed that it has completed a sale of substantially all of its assets to private equity investment firm Versa Capital Management, LLC. The company received Court approval of the sale on Jan. 31. Private equity lender Versa Capital is paying $39.5 million. A planned auction failed to turn up additional bids. AMERIGAS PARTNERS: Fitch Affirms 'BB' IDR'; Outlook Negative ------------------------------------------------------------ Fitch Ratings has affirmed the ratings of AmeriGas Parnters, LP (APU) and its fully guaranteed financing co-borrowers, Amerigas Finance Corp., and AP Eagle Finance Corp. The ratings have been removed from Rating Watch Negative and assigned a Negative Rating Outlook. Fitch had placed the ratings of APU and its financing subsidiaries on Rating Watch Negative on the announcement of the acquisition of Heritage Propane. The rating action reflects the continuing pressure on ratings from the increase in leverage to fund the cash portion of the deal as well as the execution risk associated with the operational integration. The transaction was funded with a combination of limited partner units issued to Energy Transfer Partners LP (Heritage's owner) with a fair value of $1.1 billion, $1.46 billion in cash, and the assumption of Heritage debt. APU funded the cash portion of the acquisition and transaction expenses with the issuance in January of $550 million in 6.75% senior notes due 2020 and $1 billion of 7% senior notes due 2022. The operating partnership also upsized its revolver to $525 million to meet the increased liquidity needs of the combined entity. Fitch projects that on a pro forma basis Debt to EBITDA will be in the 4.25 - 4.5 times (x) range for 2012 given the current capital structure and assuming modest volume losses. Given Fitch's assessment of APU's risk profile, longer-term maintenance of the ratings will be dependent on leverage of less than 4x on an EBITDA basis and Funds from Operations (FFO) to debt of 17 - 20%. In Fitch's view, improvement in leverage metrics could be driven over the next 12 to 18 months by debt reduction and growth in EBITDA through the maintenance of margins and sales volumes, and the realization of operating synergies following the integration. However, a warm start to the 2011-12 heating season and potentially greater than anticipated customer loss in the integration or difficulties in achieving the projected synergies are risk factors reflected in the Negative Outlook. Operating History and Scale: APU's ratings reflect the underlying strength of its retail propane distribution network, broad geographic reach, and proven ability to manage unit margins under various operating conditions. Fitch believes that the scale of the Heritage acquisition enhances APU's position and ability to maintain volumes and margins. Additionally, the company's growing AmeriGas Cylinder Exchange (ACE) propane cylinder exchange business provides modest positive cash flow during the summer months when the traditional space heating related propane distribution business is relatively slow. Weather Sensitivity and Demand Trends: APU's financial performance nevertheless remains sensitive to weather and demand destruction due to customer conservation, fuels switching and general economic conditions. The decline in new home construction due to the recession as well as the relatively high price of propane, which is more correlated to the price of oil than to natural gas, has been exacerbating volume sales declines throughout the sector. These factors continue to pressure profit margins. Fitch notes however, that sales volume declines last year were also due to warmer than normal weather in some of APU's service territories and this is expected to be the case for fiscal 2012 as well. Consistent Historical Financial Performance: Despite the headwinds facing the retail propane distribution sector, APU has managed to sustain its financial profile by maintaining margins on retail gallons sold Prior to this acquisition financial metrics were strong for the rating category with Debt to Operating EBITDA of 3.04x and EBITDA to Interest coverage of 5.3x at Sept. 30, 2011. FFO metrics were stronger for the same period at 29.7% of debt and covering interest 5.8x. As noted above, however, Fitch anticipates significant weakening of the financial metrics as a result of the acquisition and the new debt. In addition, significantly warmer than normal weather is having a negative impact on results for fiscal 2012 and will further pressure financial metrics. Structural Subordination: APU's ratings also consider the structural subordination of its debt obligations to revolver borrowings at AmeriGas Propane LP, its operating limited partnership subsidiary and to the assumed secured debt obligations of Heritage Operating, LP. Heritage secured debt is limited and Fitch expects that over time it will be replaced at the APU level. Liquidity and Capital Structure: In conjunction with the Heritage acquisition, APU amended its bank revolving credit facility increasing the commitment amount to $525 million and extending the maturity to 2016. Fitch expects that this facility should be sufficient to meet the liquidity needs of the combined company given seasonal requirements. As part of the amendment, the financial covenants were also revised to provide some additional flexibility. Notably, the consolidated MLP (AmeriGas Partners, L.P.) total leverage (debt to EBITDA) ratio was increased to 5.25x through June 30, 2012 and the EBITDA calculation now allows for the inclusion of projected synergies and excludes transaction costs. Despite the expected pressure on EBITDA due to unfavorable weather in fiscal 2012, Fitch expects APU should be able to comply with the revised covenant. Positively, APU does not have significant debt maturities until 2019. Rating Triggers: Going forward, a return to a Stable Outlook will be dependent on improvement in credit metrics and successful completion of the integration. Should that not occur, the ratings could be downgraded, most likely by one notch. In addition, significant changes in distribution practices, beyond the increase announced as part of the Heritage transaction, could also negatively impact the ratings. Fitch has affirmed the following ratings: AmeriGas Partners, L.P./Amerigas Finance Corp. -- Issuer Default Rating (IDR) at 'BB+'; -- Senior unsecured at 'BB+'. AmeriGas Partners, L.P./AP Eagle Finance Corp. -- IDR at 'BB+'; -- Senior unsecured at 'BB+'. The Rating Outlook is Negative. ANTS SOFTWARE: Fletcher Asset Discloses 9.6% Equity Stake --------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Fletcher Asset Management, Inc., and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 13,935,877 shares of common stock of Ants Software Inc. representing 9.6% of the shares outstanding. A full-text copy of the regulatory filing is available at http://is.gd/yX5NJS About Ants software ANTs software inc (OTC BB: ANTS) -- http://www.ants.com/-- has developed a software solution, ACS, to help customers reduce IT costs by consolidating hardware and software infrastructure and eliminating cost inefficiencies. ACS is an innovative middleware solution that accelerates database consolidation between database vendors, enabling application portability. The Company's balance sheet at March 31, 2011, showed $27.2 million in total assets, $52.3 million in total liabilities, and a stockholders' deficit of $25.1 million. As reported in the TCR on April 8, 2011, WeiserMazars LLP, in New York, expressed substantial doubt about ANTs software's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has incurred significant recurring operating losses, decreasing liquidity, and negative cash flows from operations. ARKANOVA ENERGY: Reports $5.3-Mil. Profit in Fiscal Q4 ------------------------------------------------------ Arkanova Energy Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting net income of $5.30 million on $273,600 of total revenue for the three months ended Dec. 31, 2011, compared with a net loss of $1.45 million on $264,799 of total revenue for the same period a year ago. The Company reported a net loss of $2.06 million on $1.32 million of total revenue for the year ended Sept. 30, 2011, compared with a net loss of $13.87 million on $1.03 million of total revenue during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $2.88 million in total assets, $8.21 million in total liabilities and a $5.32 million total stockholders' deficit. For Fiscal 2011, the Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. MaloneBailey, LLP, in Houston, Texas, said the Company has incurred losses since inception, which raises 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/h5aczj About Arkanova Energy The Woodlands, Tex.-based Arkanova Energy Corporation is currently participating in oil and gas exploration activities in Arkansas, Colorado and Montana. All of Arkanova's oil and gas properties are located in the United States. ARCADIA RESOURCES: Delays Form 10-Q for Dec. 31 Quarter ------------------------------------------------------- Arcadia Resources, Inc., said that its quarterly report on Form 10-Q for the quarterly period ended Dec. 31, 2011, could not be filed within the prescribed time period due to a delay in obtaining and compiling information required to be included in its Form 10-Q, which delay could not be eliminated by the Company without unreasonable effort and expense. In particular, the Company needs additional time to obtain and compile information related to the pending sale of substantially all of the assets of Company's Pharmacy segment and events related thereto including appropriate accounting treatment and disclosures for this transaction and related events. In accordance with Rule 12b-25 of the Securities Exchange Act of 1934, the Company will file its Form 10-Q no later than the fifth calendar day following the prescribed due date. About Arcadia HealthCare Arcadia HealthCare is a service mark of Arcadia Resources, Inc. (nyse amex:KAD), and is a leading provider of home care, medical staffing and pharmacy services under its proprietary DailyMed program. The Company, headquartered in Indianapolis, Indiana, has 65 locations in 18 states. Arcadia HealthCare's comprehensive solutions and business strategies support the Company's vision of "Keeping People at Home and Healthier Longer." The Company reported a net loss of $14.35 million on $100.04 million of revenues for the fiscal year ended March 31, 2011, compared with a net loss of $31.09 million on $98.08 million of revenues for the fiscal year ended March 31, 2010. The Company also reported a net loss of $5.98 million on $40.86 million of revenue for the six-month period ended Sept. 30, 2011, compared with a net loss of $6.93 million on $41.29 million of revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $23.69 million in total assets, $49.52 million in total liabilities, and a $25.82 million total stockholders' deficit. BDO USA, LLP, in Troy, Michigan, expressed substantial doubt about Arcadia Resources' 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. Bankruptcy Warning The Company continues to generate negative cash flows on a consolidated basis. As of Sept. 30, 2011, the Company has $42.3 million of outstanding debt, of which $37.8 million is due in or before April 2012. As of Sept. 30, 2011, 193 million of the 300 million authorized shares of common stock were outstanding. The Company's stock price as of Sept. 30, 2011, was $0.025. The Company has received notices of default from its two secured lenders, Comerica Bank and HD Smith. The Company intends to sell or wind down its Pharmacy segment operations and is analyzing the various alternatives for its Services segment, which includes the divestiture of the business. If these sale transactions are consummated, it is highly unlikely that proceeds from these transactions will be adequate to pay down all of the secured debt and a significant portion of the unsecured debt. Additionally, it is possible that issues of liquidity or other factors could cause the Company to file a petition for relief under the United States Bankruptcy Code or initiate other reorganization proceedings. ATLANTIC & PACIFIC: Judge Sets Feb. 27 Plan Confirmation Hearing ---------------------------------------------------------------- Hilary Russ at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Robert D. Drain allowed The Great Atlantic & Pacific Tea Co. to fast-track its bankruptcy plan Thursday after the company?s exit financing package had to be reduced to $645 million, leaving unsecured creditors with the likelihood of lower recoveries. Law360 relates that Judge Drain agreed to set a Feb. 27 hearing date for confirmation of A&P?s revised Chapter 11 plan. As reported in the TCR on Feb. 20, 2012, the Debtor amended its plan after it was unable to nail down $750 million in bank financing required for its bankruptcy reorganization plan. To avoid having the business liquidate, the supermarket operator is reducing the financing to $650 million and eliminating a $40 million cash payment to several classes of unsecured creditors. According to Bloomberg News, instead of the $40 million cash payment, several classes of unsecured creditors will receive contingent payments that could be as much as $40 million. If the business is sold within five years, so net cash to the new owners is at least $800 million, unsecured creditors will receive $10 million for their contingent payment rights. The contingent payment increases until it reaches $40 million if the owners receive net cash of $1.5 billion from a sale. Before the amendment, the disclosure statement told unsecured creditors they should recover from 2.1 percent to 2.7 percent. About Great Atlantic & Pacific Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific is a supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid-Atlantic and Northeastern United States. Before filing for bankruptcy in 2010, A&P operated 429 stores in 8 states and the District of Columbia under the following trade names: A&P, Waldbaum's, Pathmark, Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees prior to the bankruptcy filing. A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Case No. 10-24549) on Dec. 12, 2010, in White Plains, New York. In its petition, A&P reported total assets of $2.5 billion and liabilities of $3.2 billion as of Sept. 11, 2010. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. Lazard Freres & Co. LLC is the financial advisor. Huron Consulting Group is the management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represent the Official Committee of Unsecured Creditors. A&P obtained court approval for a new contract with C&S Wholesale Grocers Inc., its principal supplier. The contract is designed to save A&P $50 million a year when the supermarket operator emerges from Chapter 11 reorganization. A&P sold 12 Super-Fresh stores in the Baltimore-Washington area for $37.83 million, plus the value of inventory. Thirteen other locations didn't attract buyers at auction and were closed mid- July 2011. ATTACHMATE GROUP: Moody's Retains 'B2' Corporate Family Rating -------------------------------------------------------------- Moody's says The Attachmate Group, Inc.'s B2 corporate family rating and negative rating outlook remain unchanged after the company cancelled their previously proposed dividend and add-on debt facilities. The individual debt instrument ratings were assigned using Moody's Loss Given Default Methodology. The B1 rating on the first lien debt is driven by its senior most position in the capital structure. The principal methodology used in rating Attachmate was the Global Software Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Attachmate is a leading independent provider of software connectivity products primarily for the legacy, mainframe computing user base as well as a niche participant in the larger, more fragmented systems and security management market. Revenues pro forma for a full year of Novell ownership are approximately $1.1 billion. The company is headquartered in Seattle, Washington. AURASOUND INC: Reports $122,000 Net Income in Dec. 31 Quarter ------------------------------------------------------------- AuraSound, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting net income of $122,210 on $9.94 million of net revenue for the three months ended Dec. 31, 2011, compared with net income of $1.01 million on $27.17 million of net revenue for the same period during the prior year. The Company reported net income of $98,461 on $25.07 million of net revenue for the six months ended Dec. 31, 2011, compared with net income of $1.05 million on $38.15 million of net revenue for the same period a year ago. The Company's balance sheet at Dec. 31, 2011, showed $40.76 million in total assets, $34.61 million in total liabilities, all current, and $6.14 million in total stockholders' equity. A full-text copy of the Form 10-Q is available at: http://is.gd/ePNUnY About AuraSound, Inc. Santa Ana, Calif-based AuraSound, Inc. (OTC BB: ARUZE) -- http://www.aurasound.com/-- develops, manufactures, and markets audio products. AuraSound's products include TV soundbars, high- drivers for TVs and laptops, subwoofers, and tactile transducers. Hein & Associates LLP, in Irvine, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. During the year ended June 30, 2011, the Company had negative cash flow from operating activities amounting to $1,909,846, and an accumulated deficit of $36,884,905. AVENUE BAR: Judge Weissbrodt Converts Case to Chapter 7 ------------------------------------------------------- Jondi Gumz at Santa Cruz Sentinel reports that U.S. Bankruptcy Judge Arthur Weissbrodt converted on Feb. 6, 2012, the Chapter 11 case of The Avenue Bar to a Chapter 7 liquidation proceeding. The report relates that Judge Weissbrodt ordered Abel and Andrea Mekkoudi, who own 711 Pacific Ave., in Santa Cruz, Calif., where the Avenue is located, to file a report on their unpaid debts in 15 days. According to the report, the Mekkoudis filed a Chapter 13 bankruptcy petition in May 2011 to reorganize their finances. They were three years behind on property taxes and the Mekkoudis owed $550,000 on a 2006 loan from Bayside Capital Partners. That loan was purchased in December 2010 by Calvin Lee, owner of Surf City Billiards downtown, who foreclosed a month later in hopes of acquiring the Avenue, the report says. AVION POINT: Combined Plan Hearing Scheduled for April 4 -------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida will convene a combined hearing on April 4, 2012, at 11:00 a.m., to consider adequacy of the Disclosure Statement and the confirmation of Avion Point West, LLC's Amended Plan of Reorganization dated Jan. 30, 2012. Ballots accepting or rejecting the Plan, and any objections are due seven days before the confirmation hearing. Under the Plan, the Debtor will: (i) continue to work with the City of Apopka for the sale of the Avion property and the development of the Orlando Apopka Airport for twelve months after consummation; and (ii) if the sale to the City of Apopka does not close within twelve months after the Effective Date, the property of both OCA and Avion will be sold at auction. Each allowed secured claim will have the right to credit bid according to their priority on the relevant property. A full-text copy of the Amended Disclosure Statement is available for free at http://bankrupt.com/misc/AVION_POINT_ds_amended.pdf About Avion Point West Based in Longwood, Florida, Avion Point West LLC and its affiliate, Orlando Country Aviation Services Inc., filed for Chapter 11 bankruptcy protection (Bank. M.D. Fla. Case Nos. 11-10364 and 11-10365) on July 8, 2011. Judge Karen S. Jennemann presides over the Debtors' cases. Frank M. Wolff, Esq., at Wolff Hill McFarlin & Herron PA, represents the Debtor. In its schedules, the Debtor disclosed $18,075,314 in total assets and $9,238,057 in total debts. The petitions were signed by James PA Thompson, the managing member. Mr. Thompson is the developer of Orlando Apopka Airport in northwest Orange County. During the past decade, Mr. Thompson has transformed Orlando Apopka Airport, on U.S. Highway 441 between Plymouth and Zellwood, from an old airfield called Orlando Country Airport into a complex of hangar condominiums whose owners now control the facility. BARNWELL COUNTY: Wants Until March 19 to Propose Chapter 11 Plan ---------------------------------------------------------------- Barnwell County Hospital asks the U.S. Bankruptcy Court for the District of South Carolina to extend until March 19, 2012, its time to file its Plan and Disclosure Statement. The Debtors explain that it needs more time to file a plan as it is working together with SC Regional Health System, LLC, to reach an agreement with The Centers for Medicare and Medicaid Services and the U.S. Department of Health and Human Services to reach an agreement related to the amounts owing for the overpayments and obtain a release for any liability associated with the provider numbers. The Debtor has entered an asset purchase agreement with RHS for the purchase of substantially all assets of the hospitals. About Barnwell County Hospital Barnwell County Hospital in South Carolina filed for municipal reorganization under Chapter 9 of the Bankruptcy Code (Bankr. D. S.C. Case No. 11-06207) on Oct. 5, 2011, in Columbia, South Carolina. The hospital is licensed for 53 beds, although only 31 are currently operating. It also operates three rural health clinics in southwestern South Carolina. The hospital said it filed because the county said it's no longer willing or able to fund losses. The hospital has no bonded debt. Assets and debts are both less than $10 million. Judge David R. Duncan oversees the case. Lindsey Carlbert Livingston, Esq., and Stanley H. McGuffin, Esq., at Haynsworth Sinkler Boyd, PA, represent the Debtor as counsel. The petition was signed by Charles Lowell Jowers, Sr., chairman of the hospital's board of trustees. W. Clarkson McDow, Jr., the U.S. Trustee for Region 4, appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Barnwell County Hospital. BATAVIA NURSING: Cyganowski Appointed as New Director ----------------------------------------------------- Melanie L. Cyganowski, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. was appointed on Feb. 15, 2012, by the State Department of Health as new director and operator of the Batavia Nursing Home's facility at 257 State St. in New York. According to the report, Ms. Cyganowski was named the court- appointed trustee of the nursing home after the facility declared Chapter 11 bankruptcy last year. She was able to obtain the operating certificate for the facility and now has control of all aspects of the operation. The report relates that the nursing home has been plagued by bounced paychecks and other difficulties in recent months due to the legal troubles of its previous owner, Marc I. Korn of East Amherst. A federal grand jury indicted Mr. Korn in December for allegedly engaging in illegal schemes to obtain money and making false statements to police. The report says Ms. Cyganowski also took steps to seize all records pertaining to the nursing home from Mr. Korn's company, Senior Associates of Amherst. Based in Williamsville, New York, Batavia Nursing Home LLC filed for Chapter 11 protection on Sept. 19, 2011 (Bankr. W.D. N.Y. Lead Case No. 11-13223). Judge Michael J. Kaplan presides over the case. Arthur G. Baumeister, Jr., Esq., at Amigone, Sanchez, et al., represents the Debtors. The Debtor estimated both assets and debts of between $1 million and $10 million. BERNARD L. MADOFF: Picard Has Billed $273MM in Fees --------------------------------------------------- Linda Sandler at Bloomberg News reports that Irving Picard, the trustee liquidating Bernard L. Madoff's money management firm, sought court approval of a payment that would bring total fees for him and his law firm to about $273 million since the con man's 2008 arrest. According to the report, Mr. Picard and Baker & Hostetler LLP asked a judge to grant them $48 million in fees and $1.2 million in expenses for the four months through Sept. 30, making their eighth fee request in a Feb. 17 filing in U.S. Bankruptcy Court in Manhattan. About 10% of the payments are deferred. 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. BERNARD L. MADOFF: Judge OKs Rye Portfolio $400MM Settlement ------------------------------------------------------------ Sindhu Sundar at Bankruptcy Law360 reports that a New York federal judge on Wednesday signed off on a settlement between Rye Select Broad Market XL Portfolio Ltd. and the Bernard L. Madoff Investment Securities LLC bankruptcy trustee who had sought to recover $400 million in lost Ponzi scheme funds from Rye LP and Rye Portfolio. According to Law360, Rye Portfolio and Madoff trustee Irving H. Picard will now seek approval for the settlement from the Grand Court of the Cayman Islands, where Rye Portfolio is based. 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. BEYOND OBLIVION: Judge Approves DIP Financing Plan -------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that a New York bankruptcy judge approved a debtor-in-possession package Thursday for Beyond Oblivion Inc., a digital music startup backed by media mogul Rupert Murdoch's News Corp. that never got off the ground and is preparing to sell its assets. The company, which gathered $34 million in investment capital from a number of investors, including News Corp., before it became clear it couldn't raise enough for a launch, is poised to sell itself for at least $1.5 million, according to court documents obtained by Law360. About Beyond Oblivion Beyond Oblivion Inc. is a digital music startup that raised $87 million from investors like Rupert Murdoch's News Corp and investment bank Alle & Co. director Snaley Shuman. Beyond Oblivion aimed to compete with Apple Inc.'s iTunes but its music service never saw the light of day. Beyond Oblivion Inc. filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 12-10282) on Jan. 24, 2012, estimating assets of between $1 million and $10 million, and debts of between $100 million to $500 million. The Company owes $50 million each to Sony Music Entertainment and Warner Music Group in unsecured 'trade debt.' Gerard Sylvester Catalanello, Esq., at Duane Morris LLP, in New York, serves as counsel. Beyond Oblivion will conduct an auction for the assets in March 2012. Initial bids are due March 15. A hearing to approve the sale is set for March 26. Bids must be at least $1.5 million. BORDERS GROUP: Reaches Accord With Ex-Worker Class Over Layoffs --------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Martin Glenn on Thursday gave his blessing to a settlement with a class of nearly 200 former Borders Group Inc. employees who claimed the defunct bookseller axed them them without providing the legally required notice. Judge Glenn's seal of approval will end the federal Worker Adjustment and Retraining Notification Act litigation spurred by the company's decision to liquidate and close its stores, and will let 198 ex-employees divvy up the $240,000 payout, according to Law360. About Borders Group Borders Group operated book, music and movie superstores and mall based bookstores under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States. At Jan. 29, 2011, the Company operated 639 stores in the United States and 3 in Puerto Rico. The Company also operated a proprietary e-commerce Web site -- http://www.Borders.com/-- launched in May 2008, which included both in-store and online e-commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and roughly 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, served as counsel to the Debtors. Jefferies & Company's Inc. served as the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC served as the interim management and restructuring services provider. The Garden City Group, Inc., acted as the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, served as counsel to the DIP Agents. Lowenstein Sandler represented the official unsecured creditors committee for Borders Group. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010. Borders selected proposals by Hilco and Gordon Brothers to conduct going out of business sales for all stores after no going concern offers of higher value were submitted by the deadline. The TCR, citing BankruptcyData.com, reported on Jan. 19, 2012, that Borders Group's First Amended Joint Chapter 11 Plan of Liquidation became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Plan filed by the Debtors and the Official Committee of Unsecured Creditors at a Dec. 20, 2011 hearing. BOWLES SUB: Plan Outline Hearing Continued Until April 4 -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Minnesota has continued until April 4, 2012, at 10:30 a.m., the hearing to consider adequacy of the Disclosure Statement explaining Bowles Sub Parcel D, LLC, and Fenton Sub Parcel D, LLC's proposed Joint Plan of Reorganization. As reported in the Troubled Company Reporter on Jan. 31, 2012, the Plan anticipates that all property of the estate will be vested in the Reorganized Debtors. The Debtors will continue to operate Pool D Properties -- six parcels of real property located in Anoka, Dakota, and Hennepin Counties, Minnesota; may market the Pool D Properties for sale either individually or in one or more groups; and may seek alternative financing. The secured claim of Wells Fargo Bank N.A. as Lender will be paid in full over time with the income generated by the operation of the Pool D Properties, by the proceeds of the sale(s) of one or more of the Pool D Properties, with the proceeds of new financing, or with a combination of these options. The Lender will retain its liens to secure such payments. Steven B. Hoyt's lien in the properties will be released. Unsecured creditors will receive up to 100% of their claims, without interest, from distributions from excess cash generated by postpetition operations and from the sale(s) or refinancing and operations after the Lender is paid in full. The actual amount to be paid depends on the results of operations and sales or refinancing. The most likely range of recovery from operations is estimated to be 0% to 21%; the ultimate sales prices are unknown, but could result in full payment to unsecured creditors. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/FENTON_SUB_ds.pdf About Fenton Sub Parcel D and Bowles Sub Parcel D Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC jointly own industrial multi-tenant properties located in the Twin Cities. They are controlled by StoneArch II/WCSE Minneapolis Industrial LLC. StoneArch is the 100% member of Bowles Subsidiary, LLC and of Fenton Subsidiary LLC. Bowles Subsidiary LLC is then the 100% member of Bowles Sub Parcel D LLC, and Fenton Subsidiary LLC is the 100% member of Fenton Sub Parcel D, LLC. In 2007, StoneArch acquired various LLCs, which in turn owned 27 industrial multi- tenant properties located in the Twin Cities. The properties were divided into four separate pools: A, B, C, and D. Fenton Sub Parcel D and Bowles Sub Parcel D jointly own the properties in pool D. As tenants in common, Fenton Sub Parcel D has an undivided 74.5394% interest and Bowles Sub Parcel D has an undivided 25.4606% interest. The Pool D Properties consist of six parcels of real property located in Anoka, Dakota, and Hennepin Counties, Minnesota. The Debtors expect the Pool D Properties to be worth $13,135,656 as of the Petition Date. Although they are two separate legal entities, Fenton Sub Parcel D and Bowles Sub Parcel D have consistently been treated as one enterprise. Hoyt Properties, Inc., acts as agent in managing the Pool D Properties. Fenton Sub Parcel D and Bowles Sub Parcel D filed for Chapter 11 bankruptcy (Bankr. D. Minn. Case Nos. 11-44430 and 11-44434) on June 29, 2011. The Debtors' petitions were signed by Steven Bruce Hoyt, chief manager, who is also a debtor (Bankr. D. Minn. Case No. 11-43816). He is separately represented by Michael C. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman, P.A. The cases were originally assigned to Judge Dennis D. O'Brien and reassigned to Judge Robert J. Kressel as the cases are related to the Hoyt case, which was filed earlier before Judge Kressel. Cynthia A. Moyer, Esq., James L. Baillie, Esq., and Sarah M. Gibbs, Esq., at Fredrikson & Byron, PA, represent the Debtors. BROOKSIDE INN: Case Summary & 2 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Brookside Inn, Inc. aka La Quinta Inns aka Brookside Inn & Suites 1048 Pumpkin Ridge Dr Eagle Point, OR 97524 Bankruptcy Case No.: 12-60533 Chapter 11 Petition Date: February 17, 2012 Court: United States Bankruptcy Court District of Oregon Judge: Frank R. Alley III Debtor's Counsel: Keith Y. Boyd, Esq. THE LAW OFFICES OF KEITH Y. BOYD 724 S Central Ave #106 Medford, OR 97501 Tel: (541) 973-2422 E-mail: ecf@boydlegal.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's two largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/orb12-60533.pdf The petition was signed by Timothy Baker, president. BUFFETS RESTAURANTS: Can Hire Paul Weiss as Attorney ---------------------------------------------------- BankruptcyData.com reports that the U.S. Bankruptcy Court approved Buffets Restaurants Holdings' motions to retain Paul, Weiss, Rifkind, Wharton & Garrison as attorney; Moelis & Company as financial advisor and capital markets advisor; Huntley, Mullaney, Spargo & Sullivan as special real estate consultant and PricewaterhouseCoopers as tax consultant. As reported in the Troubled Company Reporter on Feb. 2, 2012, Buffets Restaurants Holdings filed with the U.S. Bankruptcy Court motions to retain: * Paul, Weiss, Rifkind, Wharton & Garrison (Contact: Jeffrey Safterstein) as attorney at these hourly rates: partner at $830 to 1,120, counsel at 760 to 795, associate at 375 to 760 and legal assistant at 85 to 250; * Young Conaway Stargatt & Taylor (Contact: Pauline K. Morgan) as attorney at hourly rates ranging from $230 to 700,; * Moelis & Company (Contact: Robert J. Flachs) as financial advisor and capital markets advisor for a monthly fee of $150,000 and a $3 million restructuring fee; * Huntley, Mullaney, Spargo & Sullivan (Contact: William Sullivan) as special real estate consultant for a monthly fee of $10,000; and * PricewaterhouseCoopers (Contact: Chad Berge) as tax consultant at these hourly rates: partner at $735, director at 595, manager at 495, senior associate at 395 and associate at 285. About Buffets Inc. Buffets Inc., the nation's largest steak-buffet restaurant company, operates 494 restaurants in 38 states, comprised of 483 steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R) restaurants, and franchises 3 steak-buffet restaurants in two states. The restaurants are principally operated under the Old Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire Mountain(R) brands. Buffets employs 28,000 team members and serves 140 million customers annually. Buffets Inc. and all of its subsidiaries filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18, 2012, after it reached a restructuring support agreement with 83% of its lenders to eliminate virtually all of the Company's roughly $245 million of outstanding debt. The Debtors are seeking to reject leases for 83 underperforming restaurants. Buffets had 626 restaurants when it began its prior bankruptcy case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged from bankruptcy in April 2009. Higher gasoline and energy costs, along with a decline in guest count, have hampered the Debtors' ability to service their long- term debt and caused a liquidity strain, forcing the Company to return to Chapter 11 bankruptcy. In the new Chapter 11 case, Buffets Inc.'s legal advisors are Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway, Stargatt & Taylor, LLP. The Company's financial advisor is Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims, noticing and balloting agent. An ad hoc committee of secured lenders is represented by Willkie Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP Agent and Prepetition First Lien Agent, is represented by Skadden Arps Slate Meagher & Flom as counsel. The U.S. Trustee has appointed a 5-member Official Committee of Unsecured Creditors in the Debtors' cases. CAESARS ENTERTAINMENT: Debt Trades at 13% Off in Secondary Market ----------------------------------------------------------------- Participations in a syndicated loan under which Caesars Entertainment, formerly known as Harrah's Entertainment Inc., is a borrower traded in the secondary market at 86.67 cents-on-the- dollar during the week ended Friday, Feb. 17, 2012, an increase of 0.33 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 425 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 28, 2018, and carries Moody's B3 rating and Standard & Poor's B rating. The loan is one of the biggest gainers and losers among 164 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. 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. * * * The TCR reported on Feb. 10, 2012, Moody's Investors Service placed the ratings of Caesars Entertainment Corporation's and Caesars Entertainment Operating Company's, collectively Caesars, on review for possible upgrade, including CET's Caa2 Corporate Family and Caa2 Probability of Default ratings. Moody's also assigned a B2 rating to the proposed $1.250 billion first lien note offering by Caesars Operating Escrow LLC and Caesars Escrow Corporation both wholly owned subsidiaries of CEOC. The rating on the proposed first lien note offering is subject to review of final terms and conditions. CALDWELL THEATRE: Faces Chapter 11 Bankruptcy Amid Foreclosure -------------------------------------------------------------- South Florida Sun-Sentinel reports that Legacy Bank of Florida has filed a foreclosure lawsuit against the Caldwell Theatre Company, claiming the Boca Raton-based theater has failed to repay nearly $6 million in debt on its new playhouse. According to the report, in a lawsuit filed this month in Palm Beach County Circuit Court, Legacy Bank alleges the theater is behind on two notes: One for $2.88 million and the other for about $3 million. The report relates that Clive Cholerton, Caldwell's artistic director, said the theater is weighing a debt reorganization, possibly through a Chapter 11 bankruptcy reorganization. Mr. Cholerton stressed that a Chapter 7 liquidation is not in the cards. The report adds that bank lawyer Michael Moskowitz, Esq., said Legacy Bank has been patient with Caldwell, but that the lender has reached the limit of its patience. The report notes Mr. Moskowitz said the bank even modified the loan into two separate loans, in an effort to make it easier for Caldwell to repay. The foreclosure action seeks repayment of the loans and the appointment of a receiver for the property on Federal Highway known as the Count de Hoernle Theatre. CALYPTE BIOMEDICAL: Michael Roth Discloses 8.5% Equity Stake ------------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Michael A. Roth and Brian J. Stark disclosed that, as of Jan. 1, 2012, they beneficially own 46,733,698 shares of common stock of Calypte Biomedical Corporation representing 8.5% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/otJWBI About Calypte Biomedical Portland, Oregon-based Calypte Biomedical Corporation develops, manufactures, and distributes in vitro diagnostic tests, primarily for the diagnosis of Human Immunodeficiency Virus ("HIV") infection. Odenberg, Ullakko, Muranishi & Co. LLP, in San Francisco, California, expressed substantial doubt about Calypte Biomedical's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring operating losses and negative cash flows from operations, and management believes that the Company's cash resources will not be sufficient to sustain its operations through 2011 without additional financing. "At Dec. 31, 2010, and 2009, we had working capital deficits of $3.5 million and $16.6 million, respectively, the Company said in the filing. "As of Dec. 31, 2009, the $11.6 million outstanding under our Credit Facility and Convertible Notes was under default. Our cash on hand and existing sources of cash are insufficient to fund our cash needs over the next twelve months under our current capital structure." The Company recorded a gain on transfer of assets of $2.3 million and a gain on restructuring of notes of $8.5 million in 2010, absent in 2009. The Company reported a net loss of $437,000 on $505,000 of product sales for the nine months ended Sept. 30, 2011, compared with net income of $9.25 million on $314,000 of product sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $2.09 million in total assets, $6.94 million in total liabilities, and a $4.85 million total stockholders' deficit. Bankruptcy Warning The Company does not have any long term agreement for capital infusion at this point in time. As the Company's cash flows from its operating and investing activities are currently not adequate to sustain its operations, if the Company is unable to raise capital, the Company will likely be unable to continue its operations. Failure to obtain additional financing will likely cause the Company to seek bankruptcy protection under Chapter 7 of the U.S. Bankruptcy Code. CATHOLIC CHURCH: 500 Victims File Claims vs. Milwaukee Archdiocese ------------------------------------------------------------------ Cary Docter and Ben Handelman, writing for Fox6 News, report that the deadline has passed for those wishing to be part of a class action lawsuit against the Archdiocese of Milwaukee, and roughly 500 alleged victims of sexual abuse have come forward. Lawyers believe the number of abused may be hundreds more, but they can no longer take action against the church. On July 14, 2011, a bankruptcy court entered an order that requires sexual abuse survivors to file a claim no later than February 1, 2012. This deadline is called a "bar date" because it means that people who come forward after that date may be "barred" from ever filing a claim against the Milwaukee Archdiocese. By getting a bar date, the Archdiocese is able to limit who can sue after the bar date. In most circumstances, abuse survivors will not be able to sue the Archdiocese if they fail to file a claim with the bankruptcy court before February 1. In the final hours before the deadline, claims against the Archdiocese were still coming in. Attorney Patrick Cavanaugh Brennan added a few more to his roughly 40 clients who say they have been raped or abused by priests, teachers or other members of the church. "I think people put this off as long as they could, and then when they realized this is literally the last day, we got some calls [Wednes]day," Mr. Brennan said. Julie Wolf is a spokesperson for the Archdiocese, and says the number of claims is alarming. "By the end of the day, we are expecting that number to near or top 500. It's a horrible number, when you think about it. I mean, any abuse is horrible. Even one claim is too many. We are hopeful that we will get through this, and we will be able to continue the essential ministries of the church going forward," Ms. Wolf said. Peter Isley is the Midwest Director of the Survivors Network for Those Abused by Priests, or SNAP. His worry is that the church will now attempt to get the majority of the estimated 500 claims tossed out by a judge. "They are going to try and throw virtually 90-some percent of these legitimate claims that it didn't happen, out of court on February 9," Mr. Isley said. The church says they have challenged some of the claims already. SNAP says the challenges are hypocritical since the church asked people to come forward with claims, and are now pushing them away. About the Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No. 11- 20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Milwaukee Opposes Three Abuse Survivors' Claims ---------------------------------------------------------------- In separate filings, the Archdiocese of Milwaukee asks the U.S. Bankruptcy Court for the Eastern District of Wisconsin to disallow these abuse survivor proofs of claim: Claim Nos. A-12; A-13; and A-49. On behalf of the Archdiocese, Francis H. LoCoco, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, contends that the Claims must be disallowed because they are "unenforceable" against the Archdiocese under any agreement or applicable law. He explains that the Claims are unenforceable because the Claimants released the Debtor from any and all claims related to the Claims and the Claims are barred by applicable statutes of limitations. Copies of the Archdiocese's Objections were in redacted format pursuant to a Court order to do so. The Order was entered on January 31, 2012. In other separate filings, the Archdiocese asks the Court for summary judgment in support of the Objections. Summary judgment methodology is governed by Rule 56 of the Federal Rules of Civil Procedure, which is made applicable by Rule 7056 of the Federal Rules of Bankruptcy Procedure. Pursuant to Rule 56, summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. A material fact is a fact that "might affect the outcome of the suit." Claim No. A-12 states that its claimant was sexually abused by Father Franklyn Becker, the Associate Pastor at Holy Family Parish in Whitefish Bay, Wisconsin. The claim states that the abuse took place between approximately 1972 and 1974, when the claimant was approximately 13 to 16 years old. Claim No. A-13 states that its claimant was sexually abused by Robert Schaefer, the Choir Director at St. Catherine Church in Milwaukee, Wisconsin. The Claim states that the abuse took place between approximately 1976 and 1982, when the claimant was approximately 10 to 16 years old. Claim No. A-49 states that its claimant was sexually abused by Father David Hanser, the Associate Pastor at St. John Vianney in Brookfield, Wisconsin. There was one occasion of abuse. The Claim states that the abuse took place in approximately 1977 to 1978, when the claimant was approximately seven years old. Claim No. A-49 further states that its claimant participated in the mediation program established by the Archdiocese for victims of clergy sexual abuse. The claimant agreed to settle his abuse- related claims against the Archdiocese for $100,000. He executed a settlement agreement on January 10, 2007. Mr. LoCoco tells the Court that after executing the agreement, the claimant of Claim No. A-49's contact with the Archdiocese did not end; in 2008, he served on the Community Advisory Board. The Community Advisory Board was made up of, among others, victims, victim advocates, mental health professionals, and clergy and staff from the Archdiocese. The Board reviews and suggests improvements to the Archdiocese's response to victims of sexual abuse. The Claims all assert negligence and fraud. Mr. LoCoco contends that the Claims are time-barred and the statute of limitations for any negligence-based claims is three years. He says that Wisconsin courts uniformly recognize the difficulty in prosecuting old claims because often witnesses and evidence are no longer available. He further argues that Wisconsin has also long recognized a "vested property right protected by the constitution" to be free of claims for which the limitations period has run. "Under well-settled Wisconsin law, Claimant cannot bring a negligence claim against the Debtor for the abuse described in the Claim. Any such claims were not brought within the statute of limitations applicable to negligence and are therefore time- barred and should be disallowed," Mr. LoCoco argues. Similarly, Claimant cannot prevail on any fraud-based claims against the Debtor because the statute of limitations for claims related to fraud is six years, Mr. LoCoco adds. Claimants Object to Summary Judgment The Claimants ask the Court to deny the Archdiocese's request for summary judgment. On behalf of the Claimants, Jeffrey R. Anderson, Esq., in St. Paul, Minnesota tells the Court that the Claimants didn't discover the Archdiocese's fraud until the summer of 2009 and that there is nothing in the record that put the Claimants on notice of the Archdiocese's fraud. The Archdiocese's 2004 list, which the Claimants didn't even see, did nothing to alert survivors to whether or not the Archdiocese defrauded them, Mr. Anderson points out. He adds that the 2004 list didn't contain any information about what the Archdiocese knew about abusers and when it knew it. Accordingly, summary judgment is not appropriate for the Claimants' fraud claims, Mr. Anderson asserts. He also adds that discovery of fraud is generally a fact or jury issue which is not appropriate for summary judgment. Mr. Anderson notes that after the abuse, there is no evidence that the Archdiocese ever informed anyone in the public about its role in covering up and concealing the Abusive Priest's abuse of children. He contends that the evidence available now shows that the Archdiocese wanted to keep their fraud and the abuses secret. With regard to negligence, Mr. Anderson contends that the statute of limitations analysis is different than negligent employment claims. He reiterates that the Claimants did not discover that the Archdiocese was a cause of their injuries until much later. "This raises a fact issue which makes summary judgment on [the Claims] inappropriate," Mr. Anderson argues. He further says that the Claimants should not be charged with discovery of the Archdiocese's fraud because a person who commits fraud cannot say that even though the fraud was concealed, it should have been discovered and not having discovered it, a claimant is barred by the statute of limitations. The Claimants' Objections to the Archdiocese's request for summary judgment is joined by the Official Committee of Unsecured Creditors. Archdiocese Amends Objection to Claim No. A-13 In separate filings, the Archdiocese submitted to the Court an amended objection and an amended request for summary judgment of Claim No. A-13. Mr. LoCoco relates that in the years following the abuse, the issues of sexual abuse within Roman Catholic institutions became a frequent source of local and national coverage by the media. He notes that the Milwaukee Journal and Milwaukee Sentinel alone published no less than 150 articles on the subject of Wisconsin clergy sexual abuse and the resulting consequences and lawsuits between 1990 and 1999. If for some reason the media coverage in the 90s and early 2000s was not sufficient to trigger accrual of any fraud claims, the claims certainly accrued, at the very latest, in July 2004, Mr. LoCoco tells the Court. He adds that in 2004, the Archdiocese undertook a highly publicized and extensive mediation program aimed at helping victims of clergy sexual abuse receive compensation and treatment. In light of the frequent media coverage, Mr. LoCoco argues that the Claimant has no argument that his fraud claim did not accrue long ago. He contends that complete knowledge of fraud is not required because the time provided by a statute of limitations is not for recuperation after learning enough to prevail at trial but for investigation, and fraud may be hard to unravel if the statutory period is substantial. Archdiocese Answer Objections to Summary Judgment Mr. LoCoco tells the Court that rather than address controlling and settled Wisconsin Law, the Claimants attempt to focus the Court on irrelevant factual allegations and legal theories which have been summarily rejected in Wisconsin. "The [Claims are] time-barred as a matter of law, and the Court should disallow the [Claims]," Mr. LoCoco reiterates. Mr. LoCoco points out the substantial media coverage and the 2004 List, which should have been enough for the Claimants to know about fraud. In addition, Mr. LoCoco contends that the Claimants fail to address the controlling legal standard for determining when fraud claims accrue. He explains that a cause of action for fraud accrues when the facts constituting the fraud can be effectually discovered upon diligent inquiry and a court must determine when the plaintiff knew or should have known of the Archdiocese's alleged knowledge of the priests' past histories of sexual molestation of children to determine when a fraud claim accrues. While the test for when a claim for fraud accrues is stated in the disjunctive, the Claimants focus entirely on the subjective test arguing what he or she did or did not know and did or did not read, Mr. LoCoco notes. He says that the Claimants' subjective knowledge is legally irrelevant under the objective test for accrual. "Simply put, it is patently unreasonable to argue that there was insufficient information in the public domain, at least as of July 9, 2004, for the six-year statute of limitations not to have begun," Mr. LoCoco asserts. He reiterates that "under the objective test for accrual of fraud claims, [the Claimants], at the very least, had a duty to begin [their] investigation in July 2004." About the Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Wilm. Settlement Trustee Says Order Complied ------------------------------------------------------------- Marla Eskin, as the Settlement Trustee of the Catholic Diocese of Wilmington, Inc. Qualified Settlement Fund, asks the U.S. Bankruptcy Court for the District of Delaware, to enter an order determining that she has complied with the Settlement Trust Agreement and the Second Amended Settlement Trust Distribution Procedures that were established pursuant to the Catholic Diocese of Wilmington, Inc.'s confirmed Chapter 11 Plan of Reorganization. The Plan became effective on Sept. 26, 2011. Upon the occurrence of the Effective Date, (i) the Catholic Diocese of Wilmington, Inc. Qualified Settlement Fund was created, and (ii) Ms. Eskin was appointed as the trustee of the Settlement Trust. The Settlement Trustee is, among other things, required to disburse the corpus of the Settlement Trust to Survivor Claimants in accordance with the Settlement Trust Agreement and the Procedures. The Settlement Trustee tells the Court that she is informed and believes that she has received substantially all of the assets due to the Settlement Trust under the Plan, with the exception of proceeds of certain pending Religious Order Litigation. She notes that she has made an interim distribution to Survivor Claimants from the funds received on or about the Effective Date of the Plan. The Settlement Trustee says that she is prepared to make a distribution of substantially all of the funds in the Settlement Trust and seeks the determination in lieu of a substantial monetary reserve which would provide substance to the Settlement Trust's provision that it defend, hold harmless and indemnify the Settlement Trustee and her professionals against any contract, obligation or liability made or incurred by the Settlement Trustee in good faith. The Settlement Trust Agreement provides that the Settlement Trust is to defend, indemnify and hold harmless the Settlement Trustee and her professionals against any contract, obligation or liability made or incurred by the Settlement Trustee in good faith. The Settlement Trustee is entitled to reserve for administrative costs and expenses and such reserve may include fees and costs related to the indemnity of the Settlement Trustee and her professionals. The Settlement Trustee reveals that she has not distributed funds owed to Conaty & Curran LLC on account of legal fees and costs related to the representation of certain survivor claimants. Vincent J. Poppiti is the liquidating trustee of Conaty & Curran LLC. A dispute exists between the former members of Conaty & Curran LLC and Mr. Poppiti regarding entitlement to the legal fees and costs. The Settlement Trustee relates that she has been in communication with Mr. Poppiti and the former members of the firm and they are aware that the Settlement Trustee is holding the disputed legal fees and costs. Mr. Poppiti has told the Settlement Trustee that he has filed a declaratory relief action to determine his authority to distribute the disputed legal fees and costs. The Settlement Trustee intends to hold the legal fees and costs related to the representation of Survivor Claimants pending a final order of a court of competent jurisdiction. Notwithstanding the foregoing, the Settlement Trustee says that she will distribute the net amounts owing to the Survivor Claimants themselves through co-counsel. The Settlement Trustee tells the Court that she has consulted with counsel for plaintiffs in the pending Religious Order Litigation regarding the timing of a trial and the status of settlement negotiations with the defendants in the pending and unresolved Religious Order Litigation. She notes that given the substantial funds in the Settlement Trustee's possession, the needs of Survivor Claimants and the appreciable time before the Settlement Trustee expects to receive any additional proceeds of the pending and unresolved Religious Order Litigation, the Settlement Trustee intends to make a second interim distribution to the Survivor Claimants pursuant to the Plan. The Settlement Trustee asked the Court to shorten the notice period for consideration of her request so that it may be heard on February 3, 2012 and fix February 2, 2012 as the deadline by which objections must be filed. The Court, however, denied the Settlement Trustee's request for a shortened notice period. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. Judge Christopher Sontchi confirmed the Second Amended Chapter 11 Plan of Reorganization filed by the Diocese as a settlement plan, at a hearing held July 28, 2011. The Plan aims to pay approximately $77.4 million to people who were sexually abused by priests. The Plan was declared effective on September 26, 2011, according to a notice filed by Patrick A. Jackson, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware. Kenneth Martin and Charles W. Wiggins, two priests accused of sexual abuse, took separate appeals to the U.S. District Court for the District of Delaware from Judge Sontchi's July 28, 2011 order confirming the Plan. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: 2 Former Priests in Wilmington Ask for TRO ----------------------------------------------------------- In separate filings, Harry D. Walker and Francis J. Rogers, former priests accused of sexually abusing minors, ask the Court for protective orders and temporary restraining orders to prevent the Catholic Diocese of Wilmington, Inc., from disclosing all the documents contained in their personnel files. Messrs. Walker and Rogers argue that releasing their personnel file to the public will irreparably harm their reputation in the community and will shame and embarrass them to family and friends. They note that they are defendants to unresolved state court actions and contend that not releasing the personnel files until the issues in the pending state court actions will not harm the Diocese or the Official Committee of Unsecured Creditors. In separate orders, the Court ruled that the production of any documents related to Messrs. Walker and Rogers will be stayed until further order. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. Judge Christopher Sontchi confirmed the Second Amended Chapter 11 Plan of Reorganization filed by the Diocese as a settlement plan, at a hearing held July 28, 2011. The Plan aims to pay approximately $77.4 million to people who were sexually abused by priests. The Plan was declared effective on September 26, 2011, according to a notice filed by Patrick A. Jackson, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware. Kenneth Martin and Charles W. Wiggins, two priests accused of sexual abuse, took separate appeals to the U.S. District Court for the District of Delaware from Judge Sontchi's July 28, 2011 order confirming the Plan. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Wilm. Files Post-Confirmation Report for Dec. 31 ----------------------------------------------------------------- Joseph P. Corsini, chief financial officer of the Catholic Diocese of Wilmington, Inc., submit to the Court a Post Confirmation Quarterly Report for the quarter ended December 31, 2011. Mr. Corsini discloses that the Diocese has ending cash balances of $2,678,886 at Citizen's Bank and $16,599,085 at BNY Mellon Bank for the quarter ended December 31, 2011. The Diocese disbursed $5,668,395 from its Citizen's Bank account and $2,982,151 from its BNY account for the period. A copy of the Post Confirmation Quarterly Report is available for free at http://bankrupt.com/misc/WChrchPCTRepOctDec.pdf Catholic Diocese of Wilmington, Inc. Balance Sheet As of December 31, 2011 Assets: Cash $2,678,886 Pooled investment program 16,599,085 Accounts receivable 2,322,384 Inventory - Notes receivable 965,824 Prepaid expenses - Life insurance - cash surrender 53,743 ----------- Total current assets $22,619,922 Property, plant & equipment: Real property & improvements 770,339 Machinery & equipment - Furniture, fixtures & office equipment - Vehicles - Leasehold improvements - Less: accumulated depreciation - Total property, plant & equipment - Due from affiliates & insiders - Other - ----------- Total Assets $23,390,262 =========== Liabilities Not Subject to Compromise: Accounts payable 1,564,678 Taxes payable - Notes payable - Professional fees - Secured debt 6,627,481 Due to affiliates & insiders - National collections payable 369,847 Total postpetition liabilities 8,562,006 Liabilities Subject to Compromise: Secured debt - per plan Priority debt - per plan Unsecured debt - per plan Other - per plan Total prepetition liabilities 91,872 ----------- Total liabilities $8,653,878 Equity: Common stock - Retained earnings(deficit) 14,736,384 Total liabilities and Owners' Equity $23,390,262 =========== About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. The Delaware diocese is the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. Judge Christopher Sontchi confirmed the Second Amended Chapter 11 Plan of Reorganization filed by the Diocese as a settlement plan, at a hearing held July 28, 2011. The Plan aims to pay approximately $77.4 million to people who were sexually abused by priests. The Plan was declared effective on September 26, 2011, according to a notice filed by Patrick A. Jackson, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware. Kenneth Martin and Charles W. Wiggins, two priests accused of sexual abuse, took separate appeals to the U.S. District Court for the District of Delaware from Judge Sontchi's July 28, 2011 order confirming the Plan. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CDC CORP: Security Holders Object to Unit's Shares Sale ------------------------------------------------------- BankruptcyData.com reports that CDC's official committee of equity security holders filed with the U.S. Bankruptcy Court an objection to the Debtors' motion for an order authorizing and scheduling an auction for the solicitation of highest and/or best bid for sale of CDC Software shares. The committee objects to the motion with respect to the combined amount of the requested break-up fee and initial minimum overbid increment and the requested minimum overbid increment. As reported in the Feb. 10, 2012 edition of the TCR, CDC Corp. has found an investor to buy its CDC Software Corp. subsidiary, a proposed $250 million sale that would leave the holding company without its most valuable operating subsidiary but able to pay off the multimillion-dollar legal judgment that forced it into bankruptcy protection. CDC Corp. signed deal to sell, absent higher and better offers, its 87 percent interest in CDC Software Corp. to Vista Equity Holdings LLC for $250 million. The offer from Chicago-based Vista is $10.50 for each share of CDC Software that CDC owns. Should Vista be outbid, CDC wants to pay a breakup fee of about $10 million, or 4 percent of the purchase price. CDC arranged a Feb. 16 hearing at the U.S. Bankruptcy Court in Atlanta where the judge will approve auction and sale procedures. If the proposed rules are approved, bids would be due March 9, followed by an auction on March 16. CDC says the sale will be sufficient to pay all claims, including a $67 million judgment and $5 million owing to trade suppliers, plus professional fees. A report by the TCR on Jan. 25, 2012, said that CDC Software Corp. has sought to sell two of its subsidiaries, which account for 28% of its annual revenues, to investment firm Marlin Equity Partners for US$60 million and has already executed a letter of intent. But CDC Corp. sued its subsidiary, arguing that the sale would cause CDC Corp. shareholders to "lose substantial value, perhaps irretrievably." About CDC Corp Based in Atlanta, CDC Corp. (Nasdaq: CHINA) -- http://www.cdccorporation.net/-- is the parent company of CDC Software (Nasdaq: CDCS). CDC Software is based dually in Shanghai, China, and Atlanta and produces enterprise software applications, IT consulting services, outsourced applications development and IT staffing. The company's owners include Asia Pacific Online Ltd., Xinhua News Agency and Evolution Capital Management. CDC Corporation, doing business as Chinadotcom, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011. James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA, in Atlanta, Georgia, serves as counsel. Moelis & Company LLC serves as its financial advisor and investment banker. Marcus A. Watson at Finley Colmer and Company serves as chief restructuring officer. The Debtor estimated assets and debts at $100 million to $500 million as of the Chapter 11 filing. The Official Committee of Equity Security Holders of CDC Corporation is represented by Troutman Sanders. The Committee tapped Morgan Joseph TriArtisan LLC as its financial advisor. CHEMTURA CORP: S&P Affirms 'BB-' Rating on $455MM Senior Notes -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' rating on Chemtura Corp.'s $455 million senior unsecured notes and revised its recovery rating on the notes to '3' from '4'. "The '3' recovery rating indicates our expectation of meaningful (50% to 70%) recovery in the event of payment default," S&P said. "Our 'BB-' corporate credit rating and our issue level rating on the company's existing $295 million term loan remain unchanged," S&P said. "The revision of the recovery rating is primarily driven by the lower level of secured debt in the capital structure, as the company did not complete the incremental $100 million term loan as planned in 2011," said Standard & Poor's credit analyst Liley Mehta. "This resulted in a lower outstanding term loan of $295 million versus $395 million used in the prior recovery analysis." "The corporate credit rating reflects our view of Middlebury, Conn.-based Chemtura Corp.'s position as a leading global producer of industrial and specialty chemicals serving various end markets, its aggressive financial risk profile, and adequate liquidity position. We characterize the business risk profile as fair," S&P said. Ratings List Chemtura Corp. Corporate credit rating BB-/Stable/-- Recovery Rating Revised; Rating Affirmed To From $455 mil sr unsecd notes BB- BB- Recovery Rating 3 4 CHRIST HOSPITAL: CHA Proposes to Acquire Hospital for $104 Million ------------------------------------------------------------------ Beth Fitzgerald at NJSpotlight reports that Community Healthcare Associates has made a tentative proposal to buy Christ Hospital for $104 million. According to the report, CHA's offer for Christ Hospital would have leased a major portion of Christ to Jersey City Medical Center, which would maintain Christ as an acute care hospital. Additional space would be leased to other healthcare provider tenants. CHA put its preliminary proposal together without any input from Christ Hospital, which was negotiating exclusively with Prime Healthcare. CHA said it will have to conduct due diligence before making a firm offer. The report says Prime Healthcare withdrew its offer to purchase Christ Hospital. About Christ Hospital 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, the Debtor owns an additional 16 mostly adjacent lots comprising, 19 acres of real estate along the Palisades. 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. Christ Hospital filed a Chapter 11 petition Bankr. D. N.J. Case No. 12-12906) on Feb. 6, 2012 in Newark, New Jersey. Warren J. Martin, Jr., Esq. at Porzio, Bromberg & Newman, PC, at Morrison, serves as counsel to the Debtor. CHRYSLER GROUP: Pulls $3.5-Bil. Energy Department Loan Request -------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Chrysler Group LLC withdrew its application for a $3.5 billion low-interest loan from the U.S. Department of Energy to be used to fund research and tooling for more fuel-efficient vehicles. About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). Chrysler hired Jones Day, as lead counsel; Togut Segal & Segal LLP, as conflicts counsel; Capstone Advisory Group LLC, and Greenhill & Co. LLC, for financial advisory services; and Epiq Bankruptcy Solutions LLC, as its claims agent. Chrysler has changed its corporate name to Old CarCo following its sale to a Fiat-owned company. As of December 31, 2008, Chrysler had $39,336,000,000 in assets and $55,233,000,000 in debts. Chrysler had $1.9 billion in cash at that time. In connection with the bankruptcy filing, Chrysler reached an agreement with Fiat SpA, the U.S. and Canadian governments and other key constituents regarding a transaction under Section 363 of the Bankruptcy Code that would effect an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC on June 10, 2009, formally sold substantially all of its assets, without certain debts and liabilities, to a new company that will operate as Chrysler Group LLC. Fiat has a 20% equity interest in Chrysler Group. The U.S. and Canadian governments provided Chrysler with $4.5 billion to finance its bankruptcy case. Those loans are to be repaid with the proceeds of the bankruptcy estate's liquidation. * * * As reported in the Troubled Company Reporter on June 6, 2011, Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Chrysler Group LLC. The rating outlook is stable. "At the same time, we assigned our issue-level rating to Chrysler's $4.3 billion senior bank facilities ('BB') and $3.2 billion second-lien notes ('B'). The recovery ratings are '1' and '5'. The company recently completed this financing," S&P stated. CIMA LLC: Hires Alford, Clausen & McDonald as Special Counsel ------------------------------------------------------------- CIMA LLC asks the U.S. Bankruptcy Court to employ Alford, Clausen & McDonald LLC as special corporate and transactional counsel. AC&M has previously provided services to the Debtor. As reflected on the Debtor's schedules of assets and liabilities, as amended, AC&M is listed as an unsecured, non-priority creditor in the amount of $677,447.24. The firm attests that it has no connection with (a) the United States Trustee or any person employed by the Office of the United States Trustee; or (b) any attorneys, accountants, financial consultants, or investment bankers who represent or may represent creditors or other parties in interest in the case. The firm's rates are: Personnel Rates --------- ----- Partners $250-$285 Paraprofessional $125 About CIMA L.L.C. Based in Ft. Lauderdale, Florida, CIMA, L.L.C., is the developer and current owner of a 200-acre parcel of land located in Mobile, Alabama, with frontage on Interstate 10, a major thoroughfare. The parcel has been subdivided into parcels, and some infrastructure work has been done. CIMA is finalizing plans with one or more investor groups for further development of this parcel. CIMA filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-33279) on Aug. 22, 2011, disclosing $18,876,064 in assets and $10,535,230 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Raymond B. Ray later approved a request by the secured creditor to transfer the case to Alabama (Bankr. S.D. Ala. 11-04981). Chief Bankruptcy Judge Margaret A. Mahoney is presiding. Leslie Gern Cloyd, Esq. at Berger Singerman, P.A. represents the Debtor. Ronald F. Suber, Attorney at Law, as acts as local counsel. CIMA LLC: Court OKs Ronald F. Suber as Local Counsel ---------------------------------------------------- CIMA LLC sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of Alabama for permission to employ Ronald F. Suber, Attorney at Law, as local counsel. Mr. Suber's current hourly rate is $150 per hour. He is a sole practitioner. The firm received $7,500 as post-petition retainer. The retainer was paid by Marion Uter, personally, who is the manager of the Debtor. Ronald F. Suber, Esq., attests that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About CIMA L.L.C. Based in Ft. Lauderdale, Florida, CIMA, L.L.C., is the developer and current owner of a 200-acre parcel of land located in Mobile, Alabama, with frontage on Interstate 10, a major thoroughfare. The parcel has been subdivided into parcels, and some infrastructure work has been done. CIMA is finalizing plans with one or more investor groups for further development of this parcel. CIMA filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-33279) on Aug. 22, 2011, disclosing $18,876,064 in assets and $10,535,230 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Raymond B. Ray later approved a request by the secured creditor to transfer the case to Alabama (Bankr. S.D. Ala. 11-04981). Chief Bankruptcy Judge Margaret A. Mahoney is presiding. Leslie Gern Cloyd, Esq. at Berger Singerman, P.A. represents the Debtor. Alford, Clausen & McDonald, LLC acts as special corporate and transactional counsel. CIMA LLC: Files Amended Schedules of Assets and Liabilities ----------------------------------------------------------- CIMA, L.L.C. filed with the U.S. Bankruptcy Court its amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $17,000,000 B. Personal Property $1,876,064 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $7,075,214 E. Creditors Holding Unsecured Priority Claims $0.00 F. Creditors Holding Unsecured Non-priority Claims $3,460,016 ----------- ----------- TOTAL $18,876,064 $10,535,230 A full-text copy of the amended schedules of assets and liabilities is available free at: http://bankrupt.com/misc/CIMA_LLC_sal_amended.pdf About CIMA L.L.C. Based in Ft. Lauderdale, Florida, CIMA, L.L.C., is the developer and current owner of a 200-acre parcel of land located in Mobile, Alabama, with frontage on Interstate 10, a major thoroughfare. The parcel has been subdivided into parcels, and some infrastructure work has been done. CIMA is finalizing plans with one or more investor groups for further development of this parcel. CIMA filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-33279) on Aug. 22, 2011, disclosing $18,876,064 in assets and $10,535,230 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Raymond B. Ray later approved a request by the secured creditor to transfer the case to Alabama (Bankr. S.D. Ala. 11-04981). Chief Bankruptcy Judge Margaret A. Mahoney is presiding. Leslie Gern Cloyd, Esq. at Berger Singerman, P.A. represents the Debtor. Ronald F. Suber, Attorney at Law, as acts as local counsel. Alford, Clausen & McDonald, LLC acts as special corporate and transactional counsel. CINRAM INTERNATIONAL: Moody's Downgrades CFR to 'Caa3' ------------------------------------------------------ Moody's Investors Service (Moody's) downgraded Cinram International Inc.'s (Cinram) corporate family rating (CFR) and probability of default ratings (PDR) to Caa3 from Caa1 and Caa2 respectively. At the same time, Cinram's speculative grade liquidity rating was downgraded to SGL-4 (poor) from SGL-3 (adequate), and the ratings outlook was revised to negative from stable. The rating action was prompted by the combination of continued technological substitution and resulting ongoing weak results and poor forward earnings visibility, together with the company's near total reliance on bank lenders for external capital. With the market value of the company's equity having declined to just over $11 million, it appears that Cinram has no access to alternative sources of capital and with weak free cash flow generation, the company's ability to reinvent itself is quite limited. This increases the potential of lenders incurring losses as Cinram, a replicator and distributor of CD's and DVD's (a business that is experiencing precipitous declines), looks to reposition its business activities. Further, while Moody's normally assumes that a 100% bank debt structure will see an outsized recovery, given the company's uncertain business, Moody's now assumes only standard recovery prospects. Consequently, while the PDR was downgrade by only one notch, the CFR was downgraded by two notches and is now at the same rating level as the PDR. Lastly, with EBITDA generation having fluctuated widely in recent periods and with financial covenants set to step-down next year, Moody's expects access to external liquidity to become problematic and have revised Cinram's speculative grade liquidity rating to SGL-4. Given the aggregate of these matters, the ratings outlook is negative. This summarizes Cinram's ratings and the rating actions: Downgrades: Issuer: Cinram International Inc. -- Corporate Family Rating, downgraded to Caa3 from Caa1 -- Probability of Default Rating, downgraded to Caa3 from Caa2 -- Outlook, changed to negative from stable -- Speculative Grade Rating, downgrade to SGL-4 (poor) from SGL-3 (adequate) -- Senior Secured First-out Revolving Facility downgraded to B2 (LGD2, 10%) from B1 (LGD1, 3%) -- Senior Secured Second-out Revolving Facility downgraded to Caa3 (LGD3, 45%) from B3 (LGD2, 26%) -- Senior Secured Bank Credit Facility downgraded to Caa3 (LGD3, 45%) from B3 (LGD2, 26%) SUMMARY RATING RATIONALE Cinram's Caa3 CFR and Caa3 PDR reflect the risks of focusing on a declining business, DVD/CD replication, and not having the financial flexibility to revise the business model. Not only is demand for DVD/CD's declining, the rate of decline is likely accelerating as technological substitution continues. Consequently, despite seemingly reasonable leverage, Cinram generates only moderate free cash flow. The relatively small free cash pool is not sufficient to fund meaningful business diversification efforts and it is unclear whether the company can generate sufficient cash flow to retire its debts prior to their stated maturity and, if not, whether it will be able to roll-over the unamortized residual at maturity. Rating Outlook With a declining core business and lack of forward cash flow visibility and with potential near-term liquidity and refinance issues, the outlook is negative. What Could Change the Rating - Up Positive ratings and outlook actions may result from a significant reduction in the company's debt together with repositioning of the company's core business activities. What Could Change the Rating - Down Liquidity and refinance will lead Cinram's rating. Should liquidity arrangements materially deteriorate, negative rating action may be required. As well, as the loan maturity date approaches and depending upon then prevailing refinance prospects, adverse rating actions may be required. The principal methodology used in rating Cinram International Inc. was the Global Manufacturing Industry Methodology published in December 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. Corporate Profile With headquarters in Toronto, Ontario, Canada, Cinram International Inc. is one of the world's largest independent manufacturers, replicators and distributors of DVDs and audio CDs. CIRCUS AND ELDORADO: Owner Cancels Public Debt Offering ------------------------------------------------------- Dow Jones' DBR Small Cap reports that the owner of Reno, Nev., hotel and casino Silver Legacy canceled a public debt offering aimed at repaying its $142.8 million loan this week, leaving the company with limited options as the loan's March 1 maturity date draws near. 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. CIT GROUP: Moody's Raises Corporate Family Rating to 'B1' --------------------------------------------------------- Moody's Investors Service upgraded CIT Group Inc.'s Corporate Family Rating to B1 from B2. The rating outlook is stable. Upgrades: - Corporate Family Rating, to B1 from B2, stable outlook - Senior Secured Second Lien Regular Bond/Debenture, to B1 from B2, stable outlook - Senior Unsecured Regular Bond/Debenture, to B1 from B3, stable outlook Unchanged: - Guaranteed Senior Secured Revolving Credit Facility, remains at Ba3, stable outlook RATINGS RATIONALE The upgrade recognizes CIT's achievements in strengthening its liquidity profile by diversifying funding sources, extending debt maturities, and reducing the level of encumbered assets. In February 2012, CIT accelerated plans to redeem all $3.9 billion of remaining series A second lien notes following its successful offering of series C second lien notes in the amount of $3.25 billion. Once the series A notes are redeemed in March 2012, collateral fall-away provisions in CIT's series C notes ($14.0 billion outstanding) and senior line of credit ($2.0 billion commitment) take effect, resulting in these debts becoming unsecured. The ratio of secured debt to tangible gross assets will decline to 23% from 59% on a pro forma basis as a result of the redemption and collateral release, indicating an enhanced level of financial flexibility. During the fourth quarter of 2011, CIT advanced its bank funding strategy by launching an online deposit platform, though which it raised $600 million in deposits through January 2012. Total deposits at CIT Bank grew 44% in 2011, reaching $6.2 billion or 18% of total funding, improving CIT's funding diversification. Likewise, bank loan origination volumes grew during the year, accounting for 72% of total U.S. volumes in 2011. Nevertheless, the ultimate success of CIT's bank-like transformation remains uncertain, given its reliance on rate-sensitive brokered CD's, lack of product and channel diversification, and customers' limited brand awareness. The risks associated with this continued transition remain a constraint on CIT's ratings. CIT has further extended its debt maturity profile, materially reducing near-term liquidity pressures and providing the company enhanced flexibility to execute its business transformation strategies. CIT has immaterial long-term debt maturities until 2014. Furthermore, it has extended the commitment for certain secured funding facilities to two years from one. Also contributing to the upgrade, CIT's liability management efforts have led to a steady decline in its cost of funding, contributing to higher net finance margins. CIT's weighted average coupon on outstanding indebtedness declined materially to 4.71% in the fourth quarter of 2011 and to 4.28% on a pro forma basis including first quarter 2012 liability management actions. Net finance margin in the fourth quarter of 2011 reached 2.07%, adjusted for fresh-start accounting and debt prepayment penalties. Funding efficiency remains a key priority for CIT that could result in further reductions in funding costs and contribute to the sustainability of margin improvements. However, Moody's anticipates that pressure on asset yields and volumes in the current period of tempered economic activity and heightened competition from banks will likely have a moderating influence on the pace and sustainability of CIT's margin improvements. Additionally, CIT's net finance margins remain below its pre- crisis range and the company's own target range of 3-4%. The strength of the firm's performance during 2012 will be a key consideration in any future rating deliberations. Trends in CIT's asset quality performance have also been positive, including in the firm's core corporate finance segment, contributing to improved profitability. Trends have been aided by CIT's sale of risky non-core assets, including non-accrual loan portfolios. However, asset quality performance measures remain elevated in comparison with pre-crisis levels. Problem loans will likely continue to moderately decline as legacy portfolios run off, but Moody's views the firm's mix of new originations and the still uncertain economic environment as risks to this trend. CIT's second lien secured debt is rated B1 because this class of debt represents a preponderance of CIT's rated recourse obligations. This will continue to be the case when the collateral securing the debt is released and therefore the rating will remain at B1 when that occurs. The Ba3 rating on CIT's guaranteed senior secured revolving credit remains unchanged at Ba3. Consequently, the debt's notching relative to CIT's corporate family rating is reduced to one from two, which reflects the pending release of the first lien collateral position securing the facility upon the redemption of CIT's series A notes. The line of credit will continue to include guarantees from certain CIT subsidiaries. Additionally, CIT will be required to certify on a quarterly basis that the guarantors comply with a minimum 2.0x asset coverage covenant. Moody's believes the guarantees and covenant warrant the one notch uplift in the rating of the facility. In its last rating action dated August 26, 2011, Moody's assigned a Ba3 rating to CIT's $2 billion guaranteed senior secured revolving line of credit. The principal methodology used in rating CIT is Analyzing the Credit Risks of Finance Companies. CIT Group, Inc. is a bank holding company primarily focused on serving the small business and middle market sectors with headquarters in New York City and Livingston, New Jersey. CLARE OAKS: Final Hearing on DIP Financing Set for March 6 ---------------------------------------------------------- The Hon. Pamela S. Hollis the U.S. Bankruptcy Court for the Northern District of Illinois, in a second interim order, authorized Clare Oaks to obtain postpetition financing in the form of a multiple draw term loan made available to the Debtor in a principal amount of up to $6,000,000, with superpriority claims and first priority priming liens senior to any prepetition or postpetition liens from Senior Care Development, LLC or its designee. A final hearing on the Debtor's DIP financing motion will be held on March 6, 2012, at 1:30 p.m. (prevailing Central Time). Objections are due March 2 at 4:00 p.m. As reported in the Troubled Company Reporter on Dec. 30, 2011, the parties' DIP credit agreement provides that up to $5 million of the funds may be used solely to (i) pay interest, fees and expenses in connection with the loan; (ii) fund postpetition operating expenses incurred by the Borrower in the ordinary course of business; and (iii) pay certain costs and expenses in connection with the administration of the Chapter 11 case. Up to $1 million of the Loan Proceeds may be solely used to make adequate protection payments to Wells Fargo Bank, National Association, as master trustee and bond trustee for series 2006 Illinois Finance Authority Revenue Bonds (Clare Oaks Project), for the benefit of itself and the holders of prepetition debt. The DIP obligations will be secured by (i) a first-priority priming lien and security interest on all assets of the Debtor including, without limitation, a leasehold mortgage on the Debtor's leasehold interest under ground lease with the Sisters of St. Joseph of the Third Order of St. Francis, Inc., (ii) first- priority blanket liens and security interests on all other assets of the Borrower that are not subject to existing liens, (iii) second-priority liens on all collateral that is subject to valid, perfected and non-avoidable liens, and (iv) super-priority administrative expense claims against the Borrower's bankruptcy estate. The liens and super-priority claims granted to the DIP Lender, however, are subject and subordinate only to (x) the rights of Clare Oak residents to their deposits pursuant to any agreement or order authorizing the Borrower to escrow or segregate any Resident Deposits for the benefit of residents, and (y) the carve-out for fees payable to the Clerk of Court, the U.S. Trustee and the bankruptcy professionals employed in the case. The DIP facility matures on the earliest of (i) July 31, 2012, which date may be extended for one month; (ii) the effective date of a plan of reorganization in the Chapter 11 case, (iii) the closing of the sale, if any, of all or substantially all of the Borrower's assets or (iv) the acceleration of the loans and the termination of the commitments in accordance with the terms of the DIP Loan Agreement. The DIP Loan will carry interest at the greater of (i) 200 basis points plus 4.0% per annum or (ii) the then-current LIBOR Rate plus 4.0% per annum. The default rate is an additional 200 basis points per annum. The Debtor is required to pay the DIP Lender a $300,000 commitment fee (payable out of the initial advance). If applicable, an extension fee of $60,000 is payable on the maturity date. A $120,000 exit fee is also payable on the maturity date. About Clare Oaks Clare Oaks, an Illinois not-for-profit corporation organized under section 501(c)(3) of the Internal Revenue Code, operates a namesake continuing care retirement community in Bartlett, Illinois. Its members are the Sisters of St. Joseph of the Third Order of St. Francis, a Roman Catholic religious institute, who are elected and serving as the members of the Central Board of the Congregation. Clare Oaks is managed by CRSA/LCS Management LLC, an affiliate of Life Care Services LLC. Clare Oaks filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-48903) on Dec. 5, 2011. Judge Pamela S. Hollis presides over the case. David R. Doyle, Esq., George R. Mesires, Esq., and Patrick F. Ross, Esq., at Ungaretti & Harris LLP, in Chicago, serve as the Debtor's counsel. North Shores Consulting serves as the Debtor's operations consultant. Continuum Development Services and Alvarez & Marsal Healthcare Industry Group LLC serve as advisors. Alvarez & Marsal's Paul Rundell serves as the Chief Restructuring Officer. Sheila King Marketing + Public Relations serves as communications advisors. CliftonLarsonAllen is the Debtor's accountants. B.C. Ziegler and Company is the Debtor's proposed investment banker and financial advisor. In its petition, Clare Oaks estimated $100 million to $500 million in assets and debts. The petition was signed by Michael D. Hovde, Jr., president. Attorneys at Neal Wolf & Associates, LLC, represent the Official Committee of Unsecured Creditors as counsel. Wells Fargo, as master trustee and bond trustee, is represented by Daniel S. Bleck, Esq., and Charles W. Azano, Esq., at Mintz Levin Cohen Ferris Glovsky and Popeo PC; and Robert M. Fishman, Esq., and Allen J. Guon, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC. Sovereign Bank, the letters of credit issuer, is represented by John R. Weiss, Esq., at Duane Morris LLP. Senior Care Development LLC, the DIP Lender, is represented by William S. Fish, Jr., Esq., and Sarah M. Lombard, Esq., at Hinckley Allen & Snyder LLP. CLEAR CHANNEL: Bank Debt Trades at 20% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Clear Channel Communications, Inc., is a borrower traded in the secondary market at 79.90 cents-on-the-dollar during the week ended Friday, Feb. 17, 2012, a drop of 1.63 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 365 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 30, 2016, and carries Moody's Caa1 rating and Standard & Poor's CCC+ rating. The loan is one of the biggest gainers and losers among 164 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. The Troubled Company Reporter said on Feb. 10, 2012, Fitch Ratings has affirmed the 'CCC' Issuer Default Rating of Clear Channel Communications, Inc., and the 'B' IDR of Clear Channel Worldwide Holdings, Inc., an indirect wholly owned subsidiary of Clear Channel Outdoor Holdings, Inc., Clear Channel's 89% owned outdoor advertising subsidiary. The Rating Outlook is Stable. Fitch's ratings concerns center on the company's highly leveraged capital structure, with significant maturities in 2014 and 2016; the considerable and growing interest burden that pressures free cash flow; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. About CC Media and Clear Channel San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) -- http://www.ccmediaholdings.com/-- is the parent company of Clear Channel Communications, Inc. CC Media Holdings is a global media and entertainment company specializing in mobile and on-demand entertainment and information services for local communities and premier opportunities for advertisers. The Company's businesses include radio and outdoor displays. CC Media has three reportable business segments: Radio Broadcasting; Americas Outdoor Advertising; and International Outdoor Advertising. Approximately half of CC Media's revenue is generated from its Radio Broadcasting segment. The Company's balance sheet at Sept. 30, 2011, showed $16.51 billion in total assets, $23.96 billion in total liabilities and a $7.45 billion total member's deficit. As reported by the Troubled Company Reporter on Dec. 16, 2011, Standard & Poor's revised its rating outlook on CC Media Holdings Inc., and Clear Channel, which S&P views on consolidated basis, to negative from positive. "We affirmed our ratings on the company, including the corporate credit rating of 'CCC+'," S&P said. "The outlook revision reflects our view that softening ad demand and global economic uncertainty could slow the pace of revenue growth at CC Media over the intermediate term, heightening refinancing risk around its 2014 and 2016 debt maturities," explained Standard & Poor's credit analyst Michael Altberg. "The 'CCC+' corporate credit rating reflects the risks surrounding the longer-term viability of the company's capital structure in particular, refinancing risk relating to sizable secured and unsecured debt maturities in 2014 ($2.9 billion) and 2016 ($12.3 billion). We view CC Media's financial risk profile as 'highly leveraged' (based on our criteria), given the company's significant refinancing risk, very slim EBITDA coverage of interest expense, and minimal discretionary cash flow compared to its debt burden. In our view, the company has a 'fair' business risk profile, because of its position as the largest U.S. radio and global outdoor advertising operator," S&P said. COMPREHENSIVE CARE: Lloyd Miller Discloses 8.4% Equity Stake ------------------------------------------------------------ Lloyd I. Miller, III, filed with the U.S. Securities and Exchange Commission an amended Schedule 13G disclosing that, as of Dec. 31, 2011, he beneficially owns 5,399,914 shares of common stock of Comprehensive Care Corporation representing 8.4% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/JlPHzl About Comprehensive Care Tampa, Fla.-based Comprehensive Care Corporation provides managed care services in the behavioral health, substance abuse, and psychotropic pharmacy management fields. The Company reported a net loss of $10.4 million on $35.2 million of revenues for 2010, compared with a net loss of $18.9 million on $14.2 million of revenues for 2009. The Company also reported a net loss of $6.47 million on $54.04 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $8.63 million on $17.34 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $14.67 million in total assets, $26.41 million in total liabilities and a $11.73 million total stockholders' deficiency. Mayer Hoffman McCann P.C., in Clearwater, Fla., 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 from operations and has not generated sufficient cash flows from operations to fund its working capital requirements. COMPREHENSIVE CARE: Michael Marcus Discloses 2.4% Equity Stake -------------------------------------------------------------- Michael J. Marcus filed an amended Schedule 13G with the U.S. Securities and Exchange Commission disclosing that, as of Dec. 31, 2011, he beneficially owns 1,422,317 shares of common stock of Comprehensive Care Corporation representing 2.4% of the shares outstanding. A full-text copy of the regulatory filing is available at http://is.gd/feYmdU About Comprehensive Care Tampa, Fla.-based Comprehensive Care Corporation provides managed care services in the behavioral health, substance abuse, and psychotropic pharmacy management fields. The Company reported a net loss of $10.4 million on $35.2 million of revenues for 2010, compared with a net loss of $18.9 million on $14.2 million of revenues for 2009. The Company also reported a net loss of $6.47 million on $54.04 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $8.63 million on $17.34 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $14.67 million in total assets, $26.41 million in total liabilities and a $11.73 million total stockholders' deficiency. Mayer Hoffman McCann P.C., in Clearwater, Fla., 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 from operations and has not generated sufficient cash flows from operations to fund its working capital requirements. COMPREHENSIVE CARE: Joshua Smith Discloses 7.3% Equity Stake ------------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Joshua I. Smith disclosed that, as of Dec. 31, 2011, he beneficially owns 4,515,000 shares of common stock of Comprehensive Care Corporation representing 7.3% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/eHlW1O About Comprehensive Care Tampa, Fla.-based Comprehensive Care Corporation provides managed care services in the behavioral health, substance abuse, and psychotropic pharmacy management fields. The Company reported a net loss of $10.4 million on $35.2 million of revenues for 2010, compared with a net loss of $18.9 million on $14.2 million of revenues for 2009. The Company also reported a net loss of $6.47 million on $54.04 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $8.63 million on $17.34 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $14.67 million in total assets, $26.41 million in total liabilities and a $11.73 million total stockholders' deficiency. Mayer Hoffman McCann P.C., in Clearwater, Fla., 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 from operations and has not generated sufficient cash flows from operations to fund its working capital requirements. COMPREHENSIVE CARE: Benjamin West Discloses 6.8% Equity Stake ------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Benjamin B. West disclosed that, as of Dec. 31, 2011, he beneficially owns 4,050,000 shares of common stock of Comprehensive Care Corporation representing 6.8% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/tG1Ogg About Comprehensive Care Tampa, Fla.-based Comprehensive Care Corporation provides managed care services in the behavioral health, substance abuse, and psychotropic pharmacy management fields. The Company reported a net loss of $10.4 million on $35.2 million of revenues for 2010, compared with a net loss of $18.9 million on $14.2 million of revenues for 2009. The Company also reported a net loss of $6.47 million on $54.04 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $8.63 million on $17.34 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $14.67 million in total assets, $26.41 million in total liabilities and a $11.73 million total stockholders' deficiency. Mayer Hoffman McCann P.C., in Clearwater, Fla., 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 from operations and has not generated sufficient cash flows from operations to fund its working capital requirements. CONVERTED ORGANICS: Bank of America Discloses 9.6% Equity Stake --------------------------------------------------------------- Bank of America Corporation filed with the U.S. Securities and Exchange Commission an amended Schedule 13G disclosing that, as of Dec. 30, 2011, it beneficially owns 10,000,994 shares of common stock of Converted Organics Inc. representing 9.66% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/qjUHNc About Converted Organics Boston, Mass.-based Converted Organics Inc. utilizes innovative clean technologies to establish and operate environmentally friendly businesses. Converted Organics currently operates in three business areas, namely organic fertilizer, industrial wastewater treatment and vertical farming. The Company reported a net loss of $8.9 million on $2.8 million of revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $31.6 million on $2.8 million of revenues for the same period last year. The Company's balance sheet at Sept. 30, 2011, showed $17.2 million in total assets, $11.9 million in total liabilities, and stockholders' equity of $5.3 million. As reported in the TCR on April 7, 2011, CCR LLP, in Glastonbury, Connecticut, expressed substantial doubt about Converted Organics' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2010. The independent auditors noted that the Company has an accumulated deficit at Dec. 31, 2010, and has suffered significant net losses and negative cash flows from operations. COOPER-STANDARD: S&P Upgrades Corporate Credit Rating to 'BB-' -------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Novi, Mich.-based auto supplier Cooper-Standard Automotive Inc. to 'BB-' from 'B+'. The outlook is stable. "The rating action is based on our view that the company's improved credit measures and continued free cash flow generation will continue," said Standard & Poor's credit analyst Nancy Messer. "We have re-assessed the financial risk score to 'significant' from 'aggressive'. This change in financial risk scoring supports a higher corporate credit rating of 'BB-'. Our assessment of the company's business risk remains 'weak'," S&P said. "We are raising our rating on Cooper-Standard because we now view the company's financial risk profile as significant (formerly aggressive)," S&P said. "The assessment reflects our view that the company will continue to generate consistent free cash flow after capital spending," continued Ms. Messer. "We believe Cooper-Standard reached lease- and pension-adjusted total debt to EBITDA of about 2.5x at year- end 2011, and could reduce leverage incrementally in 2012 because of our assumption of EBITDA growth. We estimate that the company generated free cash flow approaching $40 million in 2011; we also estimate that this number could increase to about $90 million in 2012 because of lower working capital investment. Funds from operations (FFO) to total debt is likely to reach about 27% in 2012. For the current rating, we expect Cooper-Standard to operate with lease- and pension-adjusted total debt to EBITDA of 2.5x or less and FFO to lease-adjusted total debt of 25% or better." "The ratings on Cooper-Standard reflect the company's significant financial risk profile and weak business risk profile. Cooper- Standard, a tier 1 supplier to the global automotive light-vehicle market, makes fluid-handling systems, body and chassis sealing systems, and vibration control components. The significant financial risk profile is based on our view that Cooper Standard's improved credit measures, continued free cash flow generation, and shareholder-driven financial policy track record will continue," S&P said. "Cooper-Standard's sales are rising with increasing auto production volumes in North America, offset by weakness in Europe. We believe revenue for the two-year period 2011 to 2013 will rise at a compound annual rate of 3%--this is likely lower than levels that might have been achieved but for the missed future business opportunities while the company was in bankruptcy for 2009?-and part of 2010. As per our latest estimates, U.S. light-vehicle sales will increase about 7% in 2012, year over year, to 13.6 million units, and a further 8% to 14.7 million units in 2013. The company has significant exposure to U.S. light trucks, which we view as a risk if gasoline prices were to again approach $4 per gallon and push consumer sentiment toward more fuel-efficient passenger cars in response, but the company has reduced this exposure in recent years but gaining new business for passenger cars. Another factor pressuring 2012 revenues will be production volumes in Europe, which we believe will be flat at best," S&P said. "As with virtually all auto suppliers, the economic downturn triggered restructuring actions and operational efficiency initiatives that we believe have better positioned the company for profitability as vehicle demand and, hence, sustainable rates of production increase. We expect Cooper-Standard's relatively low and variable cost structure, its restructuring efforts, and its focus on lean manufacturing activities will allow it achieve EBITDA margins, calculated to include our adjustments, in the 11% to 12% range for 2012 and 2013," S&P said. "Our rating outlook on Cooper-Standard is stable. We base this outlook on our assumption that its restructuring activities and operating efficiency initiatives will allow it achieve adjusted EBITDA margins, in the 11% to 12% range for 2012 and 2013 on revenue growth in the low-single-digit area and free cash generation. We assume vehicle production rises modestly in North America and that the company can deal adequately with our expectation of flat to lower auto production in Europe for 2012," S&P said. "We could raise our ratings if we believe Cooper-Standard can achieve and sustain meaningful free cash generation of at least $125 million for 12 months. We would also need to conclude that the company could sustain pension- and lease-adjusted leverage of 2x or less and FFO to total debt of 30% or better. We would also need to conclude that any use of its large cash balances would be consistent with our expectations for a higher rating, because we believe the company's concentrated ownership by financial sponsors indicates that financial policies will remain aggressive. For an upgrade, we would likely need to conclude that a more traditional shareholder ownership structure (less concentration and perhaps a public listing) would need to be established," S&P said. "Alternatively, we could lower our ratings if we believe non- European auto markets will not improve as we assume or if the economic recovery falters, thereby preventing the company from achieving and maintaining the financial measures that we expect for the 'BB-' rating (adjusted leverage of under 2.5x for the next two years and FFO to total debt of 25% or better). We could also consider lowering our ratings if we believe the company will have more than $25 million in negative free cash generation in 2012 or 2013 because of lower revenues, atypically high commodity costs, unexpected higher capital spending, or impaired margins. We would also lower our ratings if Cooper-Standard makes a transforming acquisition with available cash or makes a debt-financed acquisition, or if the board of directors adopts a radically different business strategy or financial policies. We assume this scenario is less likely in the near term," S&P said. CORD BLOOD: Ironridge, et al., Cease to Hold 5% Equity Stake ------------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Ironridge Global IV, Ltd., Ironridge Global Partners, LLC, Brendan T. O'Neil, Richard H. Kreger, and John C. Kirkland disclosed that, as of Feb. 14, 2012, they ceased to be the beneficial owner of more than 5% of Cord Blood America, Inc.'s outstanding common stock. A full-text copy of the regulatory filing is available at no charge at http://is.gd/MdXLr6 About Cord Blood America Based in Las Vegas, Nevada, Cord Blood America, Inc., is primarily a holding company whose subsidiaries include Cord Partners, Inc., CorCell Co. Inc., CorCell Ltd.; CBA Professional Services, Inc. D/B/A BodyCells, Inc.; CBA Properties, Inc.; and Career Channel Inc, D/B/A Rainmakers International. Cord specializes in providing private cord blood stem cell preservation services to families. BodyCells is a developmental stage company and intends to be in the business of collecting, processing and preserving peripheral blood and adipose tissue stem cells allowing individuals to privately preserve their stem cells for potential future use in stem cell therapy. Properties was formed to hold the corporate trademarks and other intellectual property of CBAI. Rain specializes in creating direct response television and radio advertising campaigns, including media placement and commercial production. As reported by the TCR on April 5, 2011, Rose, Snyder & Jacobs, in Encino, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has sustained recurring operating losses, continues to consume cash in operating activities, and has insufficient working capital and an accumulated deficit at Dec. 31, 2010. The Company reported a net loss attributable to Cord Blood America of $8.09 million on $4.13 million of revenue for the year ended Dec. 31, 2010, compared with a net loss attributable to Cord Blood of $9.77 million on $3.24 million of revenue during the prior year. The Company reported a net loss of $3.82 million on $4.38 million of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $6.03 million on $2.74 million of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $7.58 million in total assets, $7.03 million in total liabilities and $552,625 in total stockholders' equity. CROSS BORDER: Lazarus Investment Discloses 7.5% Equity Stake ------------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Lazarus Investment Partners LLLP and its affiliates disclosed that, as of Feb. 14, 2012, they beneficially own 1,205,539 shares of common stock of Cross Border Resources, Inc., representing 7.5% of the shares outstanding. A full-text copy of the regulatory filing is available at http://is.gd/Xy7peo About Cross Border Resources Cross Border Resources, Inc. f/k/a Doral Energy Corp. (OTC BB: DRLY) -- http://www.DoralEnergy.com/-- is a licensed oil and gas operator in the state of New Mexico. The Company is headquartered in Midland, Texas. The Company's balance sheet at Sept. 30, 2011, showed $25.92 million in total assets, $7.88 million in total liabilities and $18.04 million in total stockholders' equity. As reported in the Troubled Company Reporter on Nov. 23, 2010, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about Doral Energy's ability to continue as a going concern following the Company's results for the fiscal year ended July 31, 2010. The independent auditors noted that the Company has negative working capital and recurring losses from operations. DEEL LLC: Court Ordered the Closing of Non-Lead Debtors' Cases -------------------------------------------------------------- The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware issued an order and final decree closing the Chapter 11 cases of the Non-Lead Debtors in the Chapter 11 cases of Deel, LLC, et al. The Court also ordered that to the extent not already paid, the fees required to be paid to the U.S. Trustee will be paid soon as reasonably practicable after the date of the entry of the order. About Magic Brands Headquartered in Austin, Texas, Magic Brands, LLC -- http://www.fuddruckers.com/-- operated 62 Fuddruckers locations in 11 states and 3 Koo Koo Roo restaurants in California. Magic Brands and its operating units filed for Chapter 11 protection on April 21, 2010 (Bankr. D. Del. Lead Case No. 10-11310). It estimated assets of up to $10 million and debts at $10 million to $50 million in its Chapter 11 petition. Affiliate Fuddruckers, Inc., also filed, estimating assets and debts at $50 million to $100 million. FocalPoint Securities, LLC, serves as investment banker to Magic Brands, and Goulston & Storrs serves as lead bankruptcy counsel. Kurtzman Carson Consultants, LLC, is the claims and notice agent. The Official Committee of Unsecured Creditors has tapped Kelley Drye & Warren LLP as counsel and Klehr Harrison Harvey Branzburg LLP as co-counsel. Magic Brands in July 2010 closed the sale of the Fuddruckers stores and franchise business to restaurant operator Luby's Inc. for $63.5 million. Magic Brands changed its name to Deel LLC following the Luby's sale. DEX MEDIA EAST: Bank Debt Trades at 53% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media East LLC is a borrower traded in the secondary market at 47.32 cents-on- the-dollar during the week ended Friday, Feb. 17, 2012, a drop of 0.43 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2014. The loan is one of the biggest gainers and losers among 164 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About R.H. Donnelley & Dex Media East Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc., and Local Launch, Inc., are the company's only direct wholly owned subsidiaries. Dex Media East LLC is a publisher of the official yellow pages and white pages directories for Qwest Communications International Inc. in the states, where Qwest is the primary incumbent local exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media, Inc., filed for Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09- 11852) on May 28, 2009, after missing a $55 million interest payment on its senior unsecured notes. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, represented the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, served as the Debtors' local counsel. The Debtors' financial advisor was Deloitte Financial Advisory Services LLP while its investment banker was Lazard Freres & Co. LLC. The Garden City Group, Inc., served as claims and noticing agent. The Official Committee of Unsecured Creditors tapped Ropes & Gray LLP as its counsel, Cozen O'Connor as Delaware bankruptcy co-counsel, J.H. Cohn LLP as its financial advisor and forensic accountant, and The Blackstone Group, LP, as its financial and restructuring advisor. The Debtors emerged from Chapter 11 bankruptcy proceedings at the end of January 2010. DEX MEDIA WEST: Bank Debt Trades at 43% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media West LLC is a borrower traded in the secondary market at 56.96 cents-on- the-dollar during the week ended Friday, Feb. 17, 2012, a drop of 0.58 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2014, and carries Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 164 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About R.H. Donnelley & Dex Media East Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc., and Local Launch, Inc., are the company's only direct wholly owned subsidiaries. Dex Media East LLC is a publisher of the official yellow pages and white pages directories for Qwest Communications International Inc. in the states, where Qwest is the primary incumbent local exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media, Inc., filed for Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09- 11852) on May 28, 2009, after missing a $55 million interest payment on its senior unsecured notes. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, represented the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, served as the Debtors' local counsel. The Debtors' financial advisor was Deloitte Financial Advisory Services LLP while its investment banker was Lazard Freres & Co. LLC. The Garden City Group, Inc., served as claims and noticing agent. The Official Committee of Unsecured Creditors tapped Ropes & Gray LLP as its counsel, Cozen O'Connor as Delaware bankruptcy co-counsel, J.H. Cohn LLP as its financial advisor and forensic accountant, and The Blackstone Group, LP, as its financial and restructuring advisor. The Debtors emerged from Chapter 11 bankruptcy proceedings at the end of January 2010. DIRECT BUY: Moody's Lowers Corporate Family Rating to 'Ca' ---------------------------------------------------------- Moody's Investors Service downgraded to Ca from Caa3 the Corporate Family and Probability of Default ratings of Direct Buy Holdings, Inc. The outlook remains negative. Concurrently, all ratings will be withdrawn because Moody's believes that it will no longer has sufficient information to effectively assess the creditworthiness of Direct Buy Holdings, Inc. and is information is unlikely to be available in the near future. Ratings downgraded: Corporate Family Rating to Ca from Caa3 Probability of Default Rating to Ca from Caa3 $335 million Senior Secured Second Lien Notes to Ca (LGD4, 50%) from Caa3 (LGD 4, 50%). RATINGS RATIONALE The downgrades of Direct Buy's ratings to Ca consider that the company: (1) has yet to make its February 1, 2012 interest payment on its $335 million second lien notes, and is therefore operating within the 30-day grace period, which expires March 2, 2012; (2) is in default of a financial covenant related to its revolving credit facility (not rated by Moody's); (3) received a going concern opinion from its auditors, and (4) retained a financial advisor in connection with a debt restructuring. Moody's believes that these events increase the likelihood of a distressed exchange or other recapitalization that would impair creditors. The principal methodology used in rating Direct Buy Holdings, Inc. was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Direct Buy, Inc., headquartered in Merrillville, Indiana, is a membership buying club that operates under a franchise business model. DOT VN: Adam Benowitz Discloses 9.9% Equity Stake ------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Adam Benowitz and his affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 6,959,203 shares of common stock of Dot VN, Inc., representing 9.99% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/w4I1hP About Dot VN Dot VN, Inc. (OTC BB: DTVI) -- http://www.DotVN.com/-- provides Internet and telecommunication services for Vietnam and operates and manages Vietnam's innovative online media web property, http://www.INFO.VN The Company is the "exclusive online global domain name registrar for .VN (Vietnam)." Dot VN is the sole distributor of Micro- Modular Data Centers(TM) solutions and E-Link 1000EXR Wireless Gigabit Radios to Vietnam and Southeast Asia region. Dot VN is headquartered in San Diego, California with offices in Hanoi, Danang and Ho Chi Minh City, Vietnam. Dot VN was incorporated in the State of Delaware on May 27, 1998, under the name Trincomali Ltd. The Company reported a net loss of $2.38 million on $464,886 of revenue for the six months ended Oct. 31, 2011, compared with a net loss of $2.95 million on $578,310 of revenue for the same period a year ago. The Company reported a net loss of $5 million on $1.01 million of revenue for the year ended April 30, 2011, compared with a net loss of $7.32 million on $1.12 million of revenue during the prior year. The Company's balance sheet at Oct. 31, 2011, showed $2.58 million in total assets, $9.24 million in total liabilities and a $6.65 million total shareholders' deficit. PLS CPA, in San Diego, Calif., noted that the Company's losses from operations raise substantial doubt about its ability to continue as a going concern. DOWNEY REGIONAL: City Council to Consider Financial Deal -------------------------------------------------------- Phillip Zonkel, staff writer at Press-Telegram, reports that the City Council of Los Angeles, California, was expected to consider a financial agreement with Downey Regional Medical Center-Hospital at a Feb. 14 council meeting. The report says, as part of its financial restructuring, the medical center wants to sign a new lease with the city. About Downey Regional Downey Regional Medical Center is a 90-year-old, 199-bed, not-for- profit regional hospital and medical center in Southeast Los Angeles County, California. Downey Regional Medical sought Chapter 11 protection (Bankr. C.D. Calif. Case No. 09-34714) on Sept. 14, 2009. Lisa Hill Fenning, Esq., at Arnold & Porter LLP in Los Angeles, represents the Debtor in its restructuring effort. In its petition, the Debtor estimated assets and debts between $10 million and $50 million. According to the Troubled Company Reporter on Feb. 7, 2012, Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that Downey Regional Medical Center-Hospital Inc. won approval of the reorganization plan on Jan. 30. The hospital will continue operating as a not-for-profit institution. About $16.5 million in taxable bonds will be repurchased as part of the plan. The hospital received a favorable vote from all creditor classes except one. TCR related that the stand-alone plan received a favorable vote from all creditor classes except one. The hospital will remain as a nonprofit institution. About $16.5 million in taxable bonds will be repurchased as part of the plan. DOUGLASS INDUSTRIES: Files for Chapter 11 Bankruptcy Protection --------------------------------------------------------------- Paul Grimaldi at Providence Journal reports that Douglass Industries Inc. filed the Chapter 11 petition in U.S. District Court in Providence, Rhode Island, along with two related businesses -- Quality Concrete Corp. and Construction Materials Corp. According to the report, in 1996, Douglass Industries announced ambitious plans to develop about 600 acres off Fish Road into a resort with a convention center, hotel, golf-and-tennis club and other amenities. The project never came to pass. Neither did later plans Douglass Industries had to open an asphalt plant in Tiverton, Rhode Island. Scott J. Douglass operates all three businesses. DYNEGY INC: Examiner Okayed to Issue Subpoenas to Third Parties --------------------------------------------------------------- The bankruptcy judge has authorized, but not directed, Susheel Kirpalani, Esq., the Chapter 11 examiner for the Debtors, to issue subpoenas under Rule 2004 of the Federal Rules of Bankruptcy Procedure against Dynegy Inc. and its non-Debtor affiliates and any third party that the Examiner reasonably believes, based upon his investigation, may be in possession of documents or information relevant to his investigation. Katherine Scherling, Esq., at Quinn Emanuel Urquhart & Sullivan, LLP, in New York, informed the Court that subpoenas for the production of documents were served to Dynegy, Inc., White & Case LLP, Lazard Ltd., David Kurtz of Lazard Ltd., Goldman Sachs Lending Partners LLC, Credit Suisse AG Cayman Islands Branch, and Credit Suisse Securities (USA) LLC. Subpoenas were also issued to Samuel Merksamer, Vincent Intrieri, Michael Embler, E. Hunter Harrison, Kent Stephenson, Charles Cook, David Biegler, Felix Pardo, Lynn Lednicky, Thomas Elward, Tracy McLaughlin, Barclays Capital, and Houlihan Lokey. The Chapter 11 Examiner sought authority to issue subpoenas for the production of documents and the examination of persons and entities determined to have information relevant to the issues the Court has directed him to investigate and to establish procedures governing responses to those subpoenas. Mr. Kirpalani noted that the Court mandated a defined investigation and a written report within 60 days of his appointment, which is, on or before March 12, 2012. He said he is cognizant of that deadline and the enormity of the task of gathering, on an expedited basis, facts relevant to the investigation. For these reasons, Mr. Kirpalani asserted, he needs the ability to issue subpoenas without the need to file separate applications pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure for each and every respondent that becomes relevant to his investigation, subject to the rights of all respondents to contest the scope and burden of any subpoenas at the appropriate time. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7 to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16, 2011. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) DYNEGY INC: Wins Final Approval to Pay Critical Vendors ------------------------------------------------------- The bankruptcy court has authorized Dynegy Holdings LLC and its affiliates, on a final basis, to pay Critical Vendor Claims, Shippers Claims and Lien Claimant Claims in an aggregate amount not to exceed $300,000; provided that, the Office of the United States Trustee and the counsel to the Official Committee of Unsecured Creditors will be provided with weekly reports of any payments made. Counsel to the Debtors will certify that any payment made under the Final Order is appropriate under a certain three prong test. In addition, the Debtors are authorized, but not required, to pay the prepetition claims of the Critical Vendors who agree to continue to supply goods or services to the Debtors postpetition on terms and conditions acceptable to the Debtors, in their sole discretion. Sophia P. Mullen, Esq., at Sidley Austin LLP, in New York, told the Court that collectively, the Debtors' vendors and service providers ensure that the Debtors receive all of the fuel, goods, equipment, and other materials necessary to operate the Roseton and Danskammer Facilities in accordance with prudent operating standards and applicable law. Any significant disruption in the Debtors' vendor network, like a vendor halting delivery of certain necessary materials or fuel, or a vendor refusing to perform duties necessary for the Debtors to comply with the multi-faceted regulatory regime governing the Debtors' businesses, could result in one or both of the Facilities shutting down, potentially causing blackouts in the New York state area. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7 to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16, 2011. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) DYNEGY INC: Has No Controlling Interest in Debtors -------------------------------------------------- Five of Dynegy Inc.'s affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. With the commencement and progression of the Chapter 11 cases, Dynegy's management was required to evaluate whether the bankruptcy filing had any impact on its consolidation analysis. Dynegy disclosed in a regulatory filing with the U.S. Securities and Exchange Commission on Feb. 3, 2012, that based on extensive review and after consulting with Dynegy's accounting and other advisors, on January 30, 2012, Dynegy's management concluded that under applicable accounting standards, Dynegy no longer had a controlling financial interest in DH and its consolidated subsidiaries as of November 7, 2011, the date of the filing of the Chapter 11 Cases, Based on that conclusion, Dynegy's consolidated financial statements will reflect the deconsolidation of DH and its consolidated subsidiaries as of November 7, the Company said. The subsidiaries Dynegy will deconsolidate include entities comprising its Gas and DNE segments. Subsequent to the deconsolidation, Dynegy is accounting for its investment in DH and its consolidated subsidiaries using the equity method of accounting commencing with the date of the filing of the Chapter 11 Cases. Dynegy's management believes that control over DH and its consolidated subsidiaries will likely revert to Dynegy upon emergence from bankruptcy with Dynegy assuming the obligations of DH in connection with the terms of the proposed Amended and Restated Support Agreement entered into by Dynegy, DH and certain holders of DH's senior and subordinated notes. The deconsolidation of DH and its consolidated subsidiaries is considered a disposition of assets by Dynegy requiring the presentation of certain pro forma financial information, the Company stated. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7 to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16, 2011. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) DYNEGY INC: Has $2.45-Bil. Current Deficit as of Sept. 30 --------------------------------------------------------- Dynegy Inc. had a working capital deficit of US$2.455 billion at Sept. 30, 2011, as compared to working capital of US$679 million at Dec. 31, 2010. In August 2011, the Company completed a reorganization of its subsidiaries, whereby, (i) substantially all of the Company's coal-fired power generation facilities are held by Dynegy Midwest Generation, LLC, (ii) substantially all of the Company's natural gas-fired power generation facilities are held by Dynegy Power, LLC, an indirect wholly owned subsidiary of Dynegy Holdings, LLC and (iii) 100% of the ownership interests of Dynegy Northeast Generation, Inc., the entity that indirectly holds the equity interest in the subsidiaries that operate the Roseton and Danskammer power generation facilities, including the leased units, are held by DH. As a result of the Reorganization, the Company's primary sources of internal liquidity are cash flows from operations and cash on hand. The Company's primary sources of external liquidity are proceeds from capital market transactions to the extent it engages in such transactions. Cash flow provided by operations totaled US$50 million for the nine months ended Sept. 30, 2011. Cash flow provided by operations totaled US$670 million for the nine months ended Sept. 30, 2010. Cash flow provided by investing activities totaled US$159 million for the nine months ended Sept. 30, 2011. Cash flow used in investing activities totaled US$614 million for the nine months ended Sept. 30, 2010. The Company had approximately US$185 million and US$270 million in capital expenditures during the nine months ended Sept. 30, 2011, and 2010, respectively. There was a US$142 million cash inflow related to restricted cash balances during the nine months ended Sept. 30, 2011, primarily due to (i) the release of US$850 million upon the termination of the Company's former Fifth Amended and Restated Credit Agreement, (ii) the release of US$43 million upon the completion of the Sithe Tender Offer, and (iii) the release of US$50 million related to the expiration of a security and deposit agreement. These decreases in restricted cash were partially offset by increases of US$631 million, US$139 million and US$27 million associated with the DPC Credit Agreement, the DMG Credit Agreement, and a DH Letter of Credit Reimbursement and Collateral Agreement with CS, respectively. Cash outflow for purchases of short-term investments during the nine months ended Sept. 30, 2011, totaled US$284 million. Cash inflow related to maturities of short-term investments for the nine months ended Sept. 30, 2011, was US$475 million. Other investing activities included US$11 million of property insurance claim proceeds. Cash outflow related to purchases of short-term investments during the nine months ended Sept. 30, 2010, totaled US$428 million. Cash inflow related to maturities from short-term investments for the nine months ended Sept. 30, 2010, totaled US$143 million. There was a US$53 million cash outflow related to restricted cash balances during the nine months ended Sept. 30, 2010, primarily due to an increase in the Sithe restricted cash balance. There was a US$15 million cash outflow related to the Company's PPEA funding commitment. Other investing activities included US$9 million related to the distribution of an investment. Cash flow provided by financing activities totaled US$381 million for the nine months ended Sept. 30, 2011. Cash flow used in financing activities totaled US$36 million for the nine months ended Sept. 30, 2010, related to US$31 million of repayments of borrowings on Sithe senior debt and US$5 million of financing fees. DH Bankruptcy Filing/Restructuring Support Agreement On Nov. 7, 2011, Dynegy Holdings, LLC still had significant debt service requirements in connection with its outstanding notes and debentures, and there were significant payment obligations related to the leasehold interests in the Danskammer and Roseton facilities. On that date, DH and four of its wholly owned subsidiaries, Dynegy Northeast Generation, Inc., Hudson Power, L.L.C., Dynegy Danskammer, L.L.C., and Dynegy Roseton, L.L.C., filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York, Poughkeepsie Division. Dynegy Inc. and its subsidiaries, other than the five Debtor Entities, did not file voluntary petitions for relief and are not debtors under Chapter 11 of the Bankruptcy Code. The Chapter 11 Cases were filed in accordance with a Restructuring Support Agreement among Dynegy Inc., DH and certain holders of an aggregate of approximately US$1.4 billion of DH's Old Notes. The Debtor Entities' proposed financial restructuring, as outlined in the Support Agreement and the restructuring term sheet attached thereto, has the support of the Consenting Noteholders. Pursuant to the Support Agreement, the Consenting Noteholders agree, upon the terms and subject to the conditions contained in the Support Agreement, to (i) vote their claims under the Old Notes in favor of the Restructuring and not withdraw or revoke such vote; except as permitted under the Support Agreement, (ii) not object to the Restructuring; (iii) not initiate legal proceedings inconsistent with or that would prevent, frustrate, delay or impede the Restructuring; (iv) not vote for, consent to, participate, solicit, support, formulate, entertain, encourage or engage in discussions or negotiations, or enter into any agreements relating to, any alternative to the Restructuring; and (v) not solicit, encourage, or direct any person or entity, including the indenture trustee under the indenture for the Old Notes, to undertake any such action. Additionally, the Consenting Noteholders agree not to transfer or assign their claims, including any voting rights, until Dec. 7, 2011, and thereafter to only transfer or assign their claims to parties who also agree to assume and be bound by the Support Agreement, subject to certain exceptions and procedural requirements. Subject to fiduciary duties, Dynegy Inc. and DH agree to use their reasonable best efforts to (i) support and complete the Restructuring, (ii) take all necessary and appropriate actions in furtherance of the Restructuring and the transactions related thereto, (iii) complete the Restructuring and all transactions related thereto within the time-frames outlined in the Support Agreement, (iv) obtain all required governmental, regulatory and/or third-party approvals for the Restructuring and (v) take no actions inconsistent with the Support Agreement or the confirmation and consummation of the Plan. The Support Agreement may be terminated if (among other things): (i) a Chapter 11 Plan and other documents required to implement the Restructuring are not, with respect to any economic or other material term of the Restructuring, in form and substance acceptable to a Majority of the Consenting Noteholders by Dec. 7, 2011; (ii) the Bankruptcy Court has not entered an order approving the Disclosure Statement related to the Plan by March 15, 2012; (iii) the Bankruptcy Court has not entered an order confirming the Plan by June 15, 2012; or (iv) the Plan has not become effective by Aug. 1, 2012. A copy of the Form 10-Q is available for free at http://is.gd/mWkg3N About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7 to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16, 2011. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000) EADS LLC: Case Summary & 8 Largest Unsecured Creditors ------------------------------------------------------ Debtor: EADS, LLC P.O. Box 1470 Washington, DC 20013 Bankruptcy Case No.: 12-00097 Chapter 11 Petition Date: February 16, 2012 Court: United States Bankruptcy Court District of Columbia (Washington, D.C.) Judge: Judge S. Martin Teel, Jr. Debtor's Counsel: William C. Johnson, Jr., Esq. LAW OFFICES OF WILLIAM C. JOHNSON, JR. 1229 15th St. NW Washington, DC 20005 Tel: (202) 525-2958 Fax: (202) 525-2961 E-mail: wjohnson@dcmdconsumerlaw.com Scheduled Assets: $3,674,000 Scheduled Liabilities: $2,645,200 A list of the Company's eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/dcb12-00097.pdf The petition was signed by Jason Saunders, managing member. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- BHI International, Inc. 12-00039 01/24/12 EASTMAN KODAK: Judge Says Tax Impact Slight Under Bankruptcy ------------------------------------------------------------ A retired U.S. Bankruptcy Court judge said Eastman Kodak Company's bankruptcy is unlikely to have an effect on its property tax payments to local municipalities, according to a February 11 report by Rochester Democrat and Chronicle. That means local taxpayers and communities should be shielded from potentially losing millions of dollars in tax revenue. "Real estate taxes are secured debt up to the value of the property, and post-petition taxes -- those taxes paid after filing the bankruptcy petition -- are paid normally," RDC quoted retired judge John Ninfo II as saying. Mr. Ninfo, who retired at the end of 2011 after 19 years as a U.S. Bankruptcy Court judge for the Western District of New York, said the municipalities can petition the court to allow foreclosure if a company in bankruptcy fails to pay real estate taxes. Noah Lebowitz, Monroe County spokesman, expressed belief that taxing jurisdictions would be "close to the front of the line to be paid" since taxes owed are given priority in a bankruptcy proceeding, RDC reported. Eastman Kodak has the sixth-largest assessed value of property in Monroe County with more than $100 million. The company also pays substantial property taxes to the county, city of Rochester, town of Greece and the Greece Central School District. According to documents provided by Monroe County, Eastman Kodak has more than 13.4 million square feet of building space spread among its hundreds of acres of properties. The company's properties in Greece are valued at $29.4 million, and those in the city are valued at $76.3 million. In Greece alone, its most recent property tax bills -- town, county and school -- were in excess of $1 million, according to the report. About Eastman Kodak Rochester, New York-based Eastman Kodak Company 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. 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). EASTMAN KODAK: Holzer Mulls Potential Securities Fraud Case ----------------------------------------------------------- Holzer Holzer & Fistel, LLC, said it is investigating potential violations of the federal securities laws by Eastman Kodak Company (NYSE: EK). The investigation, according to a statement posted at the firm's Web site, focuses on whether a series of statements made between January 26, 2011 and September 23, 2011, inclusive, regarding Kodak's business, its prospects and its operations were materially false and misleading at the time they were made. On September 23, 2011, Kodak announced it was borrowing $160 million dollars against its credit line for general corporate purposes. Holzer Holzer & Fistel's investigation seeks to determine whether, in light of the Company's announcement, certain of Kodak's prior public statements regarding its business model and cash position were false. Kodak, the firm pointed out, has reportedly entered discussions with several hedge funds about providing approximately $900 million in financing while the Company attempts to sells some of its patents. Holzer Holzer & Fistel, LLC is an Atlanta, Georgia law firm that dedicates its practice to vigorous representation of shareholders and investors in litigation nationwide, including shareholder class action and derivative litigation. More information about the firm is available through its Web site, http://www.holzerlaw.com/ and upon request from the firm. Holzer Holzer & Fistel, LLC has paid for the dissemination of this promotional communication, and Michael I. Fistel, Jr. is the attorney responsible for its content. About Eastman Kodak Rochester, New York-based Eastman Kodak Company 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. 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). EASTMAN KODAK: Proposes James A. Mesterharm as CRO -------------------------------------------------- Eastman Kodak Company and its debtor affiliates seek the Court's authority to employ AP Services, LLC, and designate James A. Mesterharm as chief restructuring officer pursuant to Sections 330 and 331 of the Bankruptcy Code. The Debtors seek to employ the firm nunc pro tunc to the Petition Date. As CRO, Mr. Mesterharm will work collaboratively with the Debtors' senior management team and board of directors, as well as the Debtors' other professionals. He will also assist the Debtors in evaluating and implementing strategic and tactical options through the restructuring process. In addition, APS has agreed to provide certain temporary staff to assist Mr. Mesterharm and the Debtors in their restructuring efforts. APS may provide assistance to the Debtors in relation to their investments in and the business of their non-debtor subsidiaries, affiliates and business counterparts, domestic and international. The Debtors anticipate Mr. Mesterharm and the Temporary Staff to perform these services: (a) Provide overall leadership of the restructuring process, including working with a wide range of stakeholder groups, together with the Debtors' senior management. (b) Assist management of the Debtors in the design and implementation of a restructuring strategy, together with the Debtors' other professionals, which is designed to maximize enterprise value and take into account the unique interests of all constituencies. (c) Assist management of the Debtors in overseeing the implementation of a business strategy and operational restructuring plan that is designed to streamline the Debtors' cost base and efficiency of operations and enable sustainable, profitable growth while preserving the Debtors' customer base. (d) Assist the Debtors and their management in managing and monitoring a 13-week cash flow forecasting tool, and also work closely with the Debtors and their business relationships to improve cash management and cash preservation. (e) Assist in communication and negotiation with outside constituents including the debtor-in-possession lenders and their advisors, the Second-lien Lenders and their advisors, the Creditors Committee and its advisors, as well as customers, suppliers and other stakeholders, as appropriate. (f) Assist with the preparation of the statement of affairs, schedules and other regular reports required by the bankruptcy court as well as providing assistance in those areas as testimony before the bankruptcy court on matters that are within APS' areas of expertise and within APS' area of testimonial competencies. (g) Assist the Debtors and its other professionals in developing the Debtors' Plan of Reorganization and Disclosure Statement, and with presenting these documents to the bankruptcy court and all involved parties, as required by the bankruptcy process. (h) Assist as requested in analyzing preferences and other avoidance actions. (i) Manage the claims and claims reconciliation processes. (j) Assist the Debtors' investment banker, as required, in obtaining and compiling information that is needed to present the Debtors or certain assets of the Debtors to prospective purchasers or investors. (k) Assist with other matters as may be requested that fall within APS' expertise and that are mutually agreeable. The engagement letter dated January 23, 2012, between APS and the Debtors contains standard indemnification language with respect to APS' services. Mr. Mesterharm will be paid an hourly rate of $880 for his services. Additional Temporary Staff will be paid an hourly rate ranging from $305 to $920. APS will be reimbursed its necessary out-of-pocket expenses. APS will also be paid a success fee based on two metrics, a Completion Fee and a Value Recovery Fee. The Completion Fee will be earned based upon (i) confirmation of a Chapter 11 Plan or Plans of Reorganization, sponsored by Eastman Kodak Company and certain of its major subsidiaries; or (ii) the closing of one or more sales of a substantial portion of the assets of the Company and certain of its major subsidiaries. The Completion Fee will equal $3.0 million. The Value Recovery Fee will be calculated based on the Recovery to Unsecured Creditors of the Company as estimated in the Disclosure Statement for the Plan. The target bonus for the Value Recovery Fee will be $1.5 million and will be earned based on an estimated 30% Recovery to the Unsecured Creditors of the Company, although the Value Recovery Fee may be less than or greater than $1.5 million. If the Recovery Percentage is 10% or less the Value Recovery Fee will be $0. For a 10% increase in the Recovery Percentage above 90%, the multiplier will increase by 1. The maximum Success Fee, including the Completion Fee and the Value Recovery Fee, will be $10.5 million. APS will earn the maximum Value Recovery Fee if the estimated Recovery Percentage to all Unsecured Creditors is equal to or in excess of 100%. James A. Mesterharm, a managing director at AlixPartners, LLP, and an authorized representative of AP Services, LLC, discloses that APS has not received a retainer from the Debtors. During the 90 days prior to the Petition Date, the Debtors paid APS a total of $752,331, incurred in providing services to the Debtors. Mr. Mesterharm also assures the Court that APS knows of no fact or situation that would represent a conflict of interest for APS with regard to the Debtors. He, however, discloses that APS has represented or is representing parties-in-interest in matters unrelated to the Debtors' bankruptcy proceedings. About Eastman Kodak Rochester, New York-based Eastman Kodak Company 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. 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). EASTMAN KODAK: Taps FTI for Transitional Services ------------------------------------------------- Eastman Kodak Co. and its affiliates have sought the Court's authority to employ FTI Consulting, Inc., to provide a chief restructuring officer through and including January 22, 2012, and additional FTI personnel to provide transitional services. The Debtors seek approval of the employment application, nunc pro tunc to the Petition Date, and pursuant to Section 363 of the Bankruptcy Code. On October 2, 2011, FTI was engaged to provide financial advisory and consulting services to the Debtors. On January 17, 2012, and effective as of the Petition Date, the Debtors executed a second engagement letter retaining FTI to, specifically, appoint Dominic Di Napoli as the Debtors' chief restructuring officer and provide for additional personnel to provide to the Debtors the services necessary for their transition to Chapter 11. On January 23, 2012, James A. Mesterharm of Alix Partners LLP was appointed to the position of CRO. Additional personnel from Alix were also hired to provide restructuring support services to the Debtors. The FTI Personnel have provided services to the Debtors in a transition capacity until the time all the projects and tasks they managed and provided are assumed by the Alix Personnel or the Debtors, Randall S. Eisenberg, a senior managing director of FTI Consulting, Inc., tells the Court. Mr. Eisenberg says the Transition Services are necessary to the orderly transition of workstreams to the Alix Personnel and are expected to be required for a period of no longer than approximately two weeks from January 23. The FTI Personnel provides these Restructuring Services to the Debtors: (a) Assist the Debtors with information and analyses required pursuant to the Debtors' postpetition financing; (b) Assist with the identification and implementation of short-term cash management procedures; (c) Assist the Debtors with respect to identification of core business assets and the disposition of assets or liquidation of unprofitable operations; (d) Assist in the preparation of financial information for distribution to creditors and others, including, but not limited to, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which the Court's approval is sought; (e) Assist with implementing procedures and strategies to maintain continuity of supply, maintain an effective vendor management process, including responding to and tracking calls received from suppliers, determine and negotiate essential vendor and foreign supplier strategies, and produce various management reports to implement and monitor those strategies; (f) Advise and provide guidance with global corporate communications function and coordinating the day to day business communications to internal and external stakeholders; (g) Assist the Debtors in the identification of executory contracts and unexpired leases and perform cost/benefit evaluations with respect to the assumption or rejection of each during a Chapter 11 proceeding; (h) Assist the Debtors in the preparation of financial related disclosures required by the Court during a Chapter 11 proceeding, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs, and Monthly Operating Reports; (i) Assist the Debtors in claims processing, analysis, and reporting, including plan classification modeling and claim estimation; (j) Assist the Debtors in responding to and tracking reclamation claims; (k) Provide assistance with implementation of court orders; (l) Assist in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; (m) Participate in meetings and provide support to the Debtors and their other professional advisors in negotiations with potential investors, banks and other secured lenders, any creditors' committee, the U.S. Trustee, other parties-in-interest, and professionals hired by the same, as requested; (n) Assist in the preparation of information and analysis necessary for the confirmation of a plan of reorganization in these Chapter 11 cases, including information contained in the disclosure statement; (o) Assist the Debtors with plan distribution activities; (p) Provide assistance with tax planning and compliance issues with respect to any proposed plans of reorganization, as well as any and all other tax assistance as may be requested from time to time; (q) Provide financial support and analyses involving various litigation matters involving the Debtors; and (r) Render other restructuring and general business consulting or other assistance for the Debtors or the Debtors' subsidiaries and affiliates as the Debtors' management or counsel may request, that are not duplicative of services provided by other professionals retained in these cases. The FTI Personnel also provides Transition Services, which include the transfer of various worksteams and assigned tasks primarily pertaining to vendor management and related communications, treasury functions, retiree and pension analyses, cash management and general corporate communications related to the Debtors' Chapter 11 bankruptcy cases. FTI's personnel in the United States are paid these customary hourly rates: CRO/ Senior Managing Directors $780 to $895 Directors / Managing Directors $560 to $745 Consultants / Senior Consultant $280 to $530 Administrative / Paraprofessionals $115 to $230 FTI's personnel in the United Kingdom are paid these customary hourly rates: Senior Managing Directors GBP675 Directors / Managing Directors GBP500 to GBP560 Consultants / Senior Consultant GBP360 to GBP415 Associates / Administrative GBP115 to GBP220 FTI will also be reimbursed for any reasonable out-of-pocket expenses incurred. The Debtors and FTI have also agreed to certain indemnification provisions contained in the Engagement Letter. Mr. Eisenberg tells the Court that FTI is not aware of any conflicts of interest or additional relationships that would preclude it from performing the services to the Debtors. He, however, says FTI may represent parties-in-interest in matters unrelated to the Debtors' bankruptcy cases. Mr. Eisenberg discloses that FTI has received "on account" cash and fees in connection with preparing for the filing of the Chapter 11 cases during the Initial Engagement totaling $5,769,250. FTI also received payments totaling $500,000 in "on account" cash. As of the Petition Date, the unapplied "on account" cash will constitute a general retainer for the Transition Services, will not be segregated by FTI in a separate account, and will be held until the end of the Transition Services period and applied to FTI's final fees in the Chapter 11 cases. FTI will apply the "on account" cash to any fees, charges and disbursements incurred before the Petition Date that remain unpaid. About Eastman Kodak Rochester, New York-based Eastman Kodak Company 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. 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). About Eastman Kodak Rochester, New York-based Eastman Kodak Company 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. 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). EMISPHERE TECHNOLOGIES: Bai Feng Discloses 9.8% Equity Stake ------------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Bai Ye Feng disclosed beneficial ownership of 6,184,389 shares of common stock of Emisphere Technologies, Inc., as of Dec. 31, 2011. The amount of shares represents 9.82% based on 60,977,210 shares of common stock outstanding as of Jan. 18, 2012, and reported on the Company's Form 10-K/A filed on Jan. 19, 2012. A full-text copy of the Schedule 13G, as amended, is available for free at http://is.gd/RfVybM About Emisphere Technologies Based in Cedar Knolls, New Jersey, Emisphere Technologies, Inc. (OTC BB: EMIS) -- http://www.emisphere.com/-- is a biopharmaceutical company that focuses on a unique and improved delivery of pharmaceutical compounds and nutritional supplements using its Eligen(R) Technology. The Eligen(R) Technology can be applied to the oral route of administration as well other delivery pathways, such as buccal, rectal, inhalation, intra-vaginal or transdermal. Since its inception in 1986, Emisphere has generated significant losses from operations. Emisphere anticipates it will continue to generate significant losses from operations for the foreseeable future, and that its business will require substantial additional investment that it has not yet secured. As reported by the TCR on April 5, 2011, PricewaterhouseCoopers LLP, in New York, noted that the Company has experienced recurring operating losses, has limited capital resources and has significant future commitments that raise substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $56.91 million on $100,000 of revenue for the year ended Dec. 31, 2010, compared with a net loss of $16.82 million on $92,000 of revenue during the prior year. The Company also reported a net loss of $4.76 million on $0 of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $38.75 million on $55,000 of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $6.47 million in total assets, $90.91 million in total liabilities, and a $84.43 million total stockholders' deficit. ENCINO CORPORATE: Access to Cash Collateral Until March 31 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved a stipulation authorizing Encino Corporate Plaza, L.P., to use the cash collateral until March 31, 2012. The fourth stipulation was entered between the Debtor and Wells Fargo Bank, N.A., as trustee for the Certificateholders of the ML- CFC Commercial Mortgage Trust 2006-3, Commercial Mortgage Pass- Through Certificates Series 2006-3 through its special servicer, Torchlight Loan Services, LLC, c/o Torchlight Investors, LLC. Pursuant to the stipulation, among other things: -- the Bank contends that not less than $33,011,594 was owed on the Petition Date; -- the Bank has agreed to the Debtor's continued use of cash collateral continue using the rent revenue generated from the lease of space in that certain real property located at 16661 Ventura Boulevard, Encino, California; and -- the Debtor would use the cash collateral to maintain the property and pay operating expenses relating to the property. A continued hearing on the Debtor's authority to use cash collateral beyond March 31, will be held on March 13, at 10:00 a.m. The Court also ordered that the Debtor will file any supplemental papers regarding its authority to use cash collateral by March 6. Any response to the supplemental pleadings will be filed with the Court by March 13. About Encino Corporate Encino Corporate Plaza, L.P., owns the real property commonly known as Encino Corporate Plaza, located at 16661 Ventura Boulevard, Encino, California. The Property is a ten-story building containing approximately 135,000 square feet of rentable space. The Company filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 11-14917) on April 20, 2011. David L. Neale, Esq., Juliet L. Oh, Esq., and Gwendolen D. Long, Esq., at Levene Neale Bender, Yoo & Brill L.L.P., in Los Angeles, California, serve as the Debtor's counsel. The Debtor disclosed $34,268,167 in assets and $33,413,759 in liabilities as of the Chapter 11 filing. ENRON CORP: ECRC's 28th Post-Confirmation Status Report ------------------------------------------------------- Enron Creditors Recovery Corp., f/k/a Enron Corp. and its reorganized Debtor affiliates delivered to the U.S. Bankruptcy Court for the Southern District of New York, on October 14, 2011, their 28th Post-Confirmation Status Report. A. Distributions John S. Delnero, Esq., at K&L Gates LLP, in Chicago, Illinois, relates that as of October 14, 2011, approximately $21,826,000,000 in Cash, PGE Common Stock and PGE Common Stock equivalents in the form of cash have been distributed to holders of Allowed Claims, including $267,000,000 of interest, capital gains and dividends. All Disputed Claims have been resolved and all reserves previously held in the Disputed Claims Reserve, including interest, dividends and gains have been released. The Plan Administrator distributed approximately $100 million to creditors on May 2, 2011. As of October 14, the General Unsecured Creditors of Enron have received 52.7% return on allowed claim amounts compared to original estimates in the Disclosure Statement of 17.4% and the Creditors of Enron North America Corp have received 52.4% compared to original estimates in the Disclosure Statement of 20.1%. The combined rate of return for ENA Creditors who also hold an Enron Guaranty claim is 94.8%, excluding gains, interest and dividends. There are a limited number of pending litigation and collection matters and contingent liabilities that continue to affect the timing of the closure of the Enron bankruptcy case. B. Claims Resolution Process Over 25,000 proofs of claim were filed against the Debtors. The Reorganized Debtors and, prior to the Effective Date, the Debtors, have worked diligently to review, reconcile, and resolve these claims (whether through settlement or litigation). In the third quarter of 2008, all Disputed Claims were resolved. Of the over 25,000 proofs of claim filed, approximately 5,653 have been ordered allowed and approximately 2,333 have been allowed as filed. The remaining filed claims have been expunged, withdrawn, subordinated, or otherwise resolved. C. Settlement and Recoveries The Reorganized Debtors collected approximately $10,000 since the 27th Post-Confirmation Status Report. These amounts were primarily attributable to proceeds received from litigation settlements and the return of other deposits belonging to the Reorganized Debtors. D. Other Activities The Reorganized Debtors continue to oversee additional various Enron activities including: a. Document Administration and Disposal. The Reorganized Debtors have completed their document destruction efforts in accordance with numerous orders entered by the Bankruptcy Court and an order entered by the District Court for the Southern District of Texas. As of January 1, 2010, all of the remaining 43,000 boxes eligible for destruction and all electronic storage devices have been destroyed. Approximately 2,600 boxes have been sent to long-term storage in accordance with regulatory requirements, and the Reorganized Debtors have created electronic tape media to store the Litigation Document Library. b. Dissolution of Corporate Entities. There are three remaining entities, of which one is a Debtor and two are Post-Final Distribution Trusts. c. Tax Return Compliance. For 2010, all returns have been filed. d. Resolution of Outstanding Litigation. Four cases adversary proceedings remain pending in the Bankruptcy Court. Two of the remaining matters relate to the Lay litigation where the Reorganized Debtors have reached a tentative settlement and on June 17, 2011 filed a motion with the Bankruptcy Court seeking approval of that settlement. On July 1, 2011, however, John Hancock Life Insurance Company (U.S.A.) filed an objection to the settlement motion, which objection continues to be litigated by the parties. The parties have reached an agreement on a form of order which was entered by the Bankruptcy Court permitting the settlement to be consummated. In addition, the Second Circuit Court of Appeals affirmed a prior decision of the United States District Court for the Southern District of New York which granted summary judgment in favor of the defendants in the commercial paper avoidance action in a split 2-1 decision. The Reorganized Debtors have requested en banc review of that Second Circuit opinion. Also in 2011 the District Court affirmed the Bankruptcy Court's denial of a motion filed by National City Bank which would have required the payment of certain monies in the approximate amount of $8.6 million to creditors holding the Allowed ETS Debenture Claim under an agreement which NCB purports to provide most favored nations status in particular circumstances which the Reorganized Debtors opposed. NCB has appealed to the Second Circuit Court of Appeals. e. On January 13, 2011, Enron received a letter forwarding a Directive and Notice to Insurers from the New Jersey Department of Environmental Protection. In the Directive, the NJDEP asserts that Garden State Paper Company LLC and Enron North America Corp. are responsible parties for certain contamination alleged to exist at a site formerly occupied by the predecessor to Garden State. Enron is investigating the matters raised in the Directive and its defenses to any potential liability, and Enron's counsel responded to the Directive on January 14, 2011, requesting the withdrawal of the Directive noting that the NJDEP was aware of the potential liabilities identified in the Directive prior to the claims bar date and as a result the NJDEP should have filed any proofs of claim by the claims bar date. On April 8, 2011, the NJDEP responded to correspondence from Enron's counsel regarding Enron's Spill Act liability stating "the Department has determined that Garden State Paper Company and Enron North America Corp. are not considered to be a responsible party for the Spill Act Directive... Garden State Paper Company and Enron North America Corp. are hereby removed from the Directive without prejudice." Although Enron's alleged Spill Act liability was discharged in connection with its bankruptcy filings, NJDEP has taken the position that any obligations that Enron may have in connection with the site that arise from the Industrial Site Recovery Act would have survived the bankruptcy as they are non-dischargeable. Enron has investigated this matter further and notwithstanding NJDEP's position that ISRA obligations are non-dischargeable, Enron's position is that it does not have any obligations in the first instance. When Enron purchased the equity in Garden State from Media General Inc., Media General agreed to comply with ISRA at its own expense and to indemnify and defend Enron from any obligations that arise from Media General's failure to do so. Accordingly, any ISRA obligations that may have passed when Enron purchased the equity in Garden State are Media General's contractual obligations. Furthermore, Enron's position is that when Garden State went bankrupt and ceased operations, thereby triggering ISRA, ISRA obligations did not result because the State granted Garden State and Enron a Remediation in Progress Waiver. f. On March 8, 2011, Enron received a letter from the Department of the Army Corps of Engineers for the New Orleans District which, among other things: (i) purports to terminate Enron's right to construct, operate, and maintain certain pipe conduits (containing fiber optic cables) on premises (a bridge) in St. Martin Parish, Louisiana and (ii) demands that Enron vacate and remove all property from the premises and restore the premises to its original condition. Enron had previously informed the Corps that Enron no longer had any need for the premises. Enron and its counsel have informed the Corps that they believe Enron's obligations, if any, were discharged in connection with the confirmation order and therefore Enron has no further obligations. Furthermore, research indicates that the fiber optic cables were originally constructed pursuant to a permit granted by the Louisiana Department of Transportation and Development. This DOTD permit required that the conduits be shared with DOTD fiber optic cables to support traffic control devices along various Louisiana interstate highways. Research also indicates that DOTD is likely still utilizing said conduits and the actions requested by the Corps would negatively impact DOTD's use thereof. g. In late September 2011, Enron Dissolution Corp., Limbach Company and Western Air & Refrigeration, Inc. were served with a complaint entitled Randall Wilkins v. Hamilton Materials, Inc. et al. pending in the Supreme Court of California, County of San Francisco: Case No. CGC-11- 275746. The complaint alleges damages for asbestos related injuries. Enron responded in writing on October 6, 2011, to plaintiff's counsel advising among other things that the plaintiff's complaint is subject to the permanent injunction contained in the Plan and the order confirming the Plan. Enron has not received a response from plaintiff's counsel. h. The Reorganized Debtors continue to be sponsors of pre- petition benefit plans certain members of which are entitled to receive distributions from the settlement of certain class actions securities cases, Tittle, et al. v. Enron Corporation, et al. and Newby, et al. v. Enron Corporation, et al., related to the Enron estate. The Reorganized Debtors are awaiting final distribution of certain class action settlements to the benefit plans, which is expected in 2011. The Reorganized Debtors have an obligation to administer the plans and fund certain expenses in connection with the plans until a time as all settlement distributions have been received. The timing of the distribution of class action settlement monies to the benefit plans is uncertain and the Reorganized Debtors lack control over the distribution to the plans. In 2008, the Reorganized Debtors filed suit against Hewitt Associates in the United States District Court for the Southern District of Texas, asserting that Hewitt incorrectly calculated certain distributions made to certain participants from settlement monies generated in connection with the above-referenced litigation. The parties reached a settlement covering the Hewitt-related claims and sought court approval of the settlement, filing the settlement agreement under seal with the Southern District of Texas. By order dated May 11, 2011, the District Court approved the settlement agreement and further entered an order dismissing the Hewitt-related claims. The settlement has been completed and the matter is now closed. i. Moreover, the Reorganized Debtors continue to perform the necessary accounting, control and reporting work required to effect closure of the Case promptly. The Plan Administrator and engaged professional firms (a) support litigation, (b) handle accounting, tax, cash management and reporting for the three remaining entities, (c) calculate and control creditor distributions, (d) perform claims management, (e) complete disposition of remaining litigation (f) oversee wind-up of employee matters and benefit plans, and (g) oversee IT and corporate services providers and non-litigation matters. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 01-16033) on Dec. 2, 2001, following controversy over accounting procedures that caused its stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP; Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors won confirmation of their Plan in July 2004, and the Plan was declared effective on Nov. 17, 2004. After approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre- bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. ENRON CORP: ECRC's 29th Post-Confirmation Status Report ------------------------------------------------------- Enron Creditors Recovery Corp., f/k/a Enron Corp. and its reorganized Debtor affiliates delivered to the U.S. Bankruptcy Court for the Southern District of New York, on January 13, 2012, their 29th Post-Confirmation Status Report. A. Distributions John S. Delnero, Esq., at K&L Gates LLP, in Chicago, Illinois, relates that as of January 13, 2012, approximately $21,826,000,000 in Cash, PGE Common Stock and PGE Common Stock equivalents in the form of cash have been distributed to holders of Allowed Claims, including $267,000,000 of interest, capital gains and dividends. All Disputed Claims have been resolved and all reserves previously held in the Disputed Claims Reserve, including interest, dividends and gains have been released. The Plan Administrator distributed approximately $100 million to creditors on May 2, 2011. To date, the General Unsecured Creditors of Enron have received a 52.7% return on allowed claim amounts compared to original estimates in the Disclosure Statement of 17.4% and the Creditors of Enron North America Corp have received 52.4% compared to original estimates in the Disclosure Statement of 20.1%. The combined rate of return for ENA Creditors who also hold an Enron Guaranty claim is 94.8%, excluding gains, interest and dividends. There are a limited number of pending litigation and collection matters and contingent liabilities that continue to affect the timing of the closure of the Enron bankruptcy case. B. Claims Resolution Process Over 25,000 proofs of claim were filed against the Debtors. The Reorganized Debtors and, prior to the Effective Date, the Debtors, have worked diligently to review, reconcile, and resolve these claims. In the third quarter of 2008, all Disputed Claims were resolved. Of the over 25,000 proofs of claim filed, approximately 5,653 have been ordered allowed and approximately 2,333 have been allowed as filed. The remaining filed claims have been expunged, withdrawn, subordinated, or otherwise resolved. C. Settlement and Recoveries The Reorganized Debtors collected approximately $1.0 million since the Twenty-Eighth Post-Confirmation Status Report. These amounts were primarily attributable to proceeds received from litigation settlements and the return of other deposits belonging to the Reorganized Debtors. D. Other Activities The Reorganized Debtors continue to oversee additional various Enron activities, including: a. Document Administration and Disposal. The Reorganized Debtors have completed their document destruction efforts in accordance with numerous orders entered by the Bankruptcy Court and an order entered by the District Court for the Southern District of Texas. As of January 1, 2010, all of the remaining 43,000 boxes eligible for destruction and all electronic storage devices have been destroyed. Approximately 2,600 boxes have been sent to long-term storage in accordance with regulatory requirements, and the Reorganized Debtors have created electronic tape media to store the Litigation Document Library. b. Dissolution of Corporate Entities. There are three remaining entities, of which one is a Debtor and two are Post-Final Distribution Trusts. c. Tax Return Compliance. There will be a federal corporate tax filing for 2011 containing one domestic entity and one foreign entity. In addition, one state return will be filed in 2012. Final returns have already been filed in all other state jurisdictions. Information reporting, like Forms 1099 and Forms 1042, for the 2011 calendar year will be completed in the first quarter of 2012. d. Resolution of Outstanding Litigation. One adversary proceeding remains pending in the Bankruptcy Court. Three adversary proceedings were resolved in the last quarter; two related to the Lay litigation which is now resolved and one related to the commercial paper litigation. The Second Circuit Court of Appeals affirmed a prior decision of the United States District Court for the Southern District of New York which granted summary judgment in favor of the defendants in the commercial paper avoidance action in a split 2-1 decision. The Reorganized Debtors asked en banc review of that Second Circuit opinion which was denied and the case will be closed. Also in 2011, the District Court affirmed the Bankruptcy Court's denial of a motion filed by National City Bank which would have required the payment of certain monies in the approximate amount of $8.6 million to creditors holding the Allowed ETS Debenture Claim under an agreement which NCB purports to provide most favored nations status in particular circumstances which the Reorganized Debtors opposed. NCB has appealed to the Second Circuit Court of Appeals. Oral argument is scheduled for January 24, 2012. e. On January 13, 2011, Enron received a letter forwarding a Directive and Notice to Insurers from the New Jersey Department of Environmental Protection. In the Directive, the NJDEP asserts that Garden State Paper Company LLC and Enron North America Corp. are responsible parties for certain contamination alleged to exist at a site formerly occupied by the predecessor to Garden State. Enron is investigating the matters raised in the Directive and its defenses to any potential liability, and Enron's counsel responded to the Directive on January 14, 2011, asking for the withdrawal of the Directive noting that the NJDEP was aware of the potential liabilities identified in the Directive prior to the claims bar date and as a result the NJDEP should have filed any proofs of claim by the claims bar date. On April 8, 2011, the NJDEP responded to correspondence from Enron's counsel regarding Enron's Spill Act liability stating "the Department has determined that Garden State Paper Company and Enron North America Corp. are not considered to be a responsible party for the Spill Act Directive... Garden State Paper Company and Enron North America Corp. are hereby removed from the Directive without prejudice." Although Enron's alleged Spill Act liability was discharged in connection with its bankruptcy filings, NJDEP has taken the position that any obligations that Enron may have in connection with the site that arise from the Industrial Site Recovery Act would have survived the bankruptcy as they are nondischargeable. Enron has investigated this matter further and notwithstanding NJDEP's position that ISRA obligations are nondischargeable, Enron's position is that it does not have any obligations in the first instance. When Enron purchased the equity in Garden State from Media General Inc., Media General agreed to comply with ISRA at its own expense and to indemnify and defend Enron from any obligations that arise from Media General's failure to do so. Accordingly, any ISRA obligations that may have passed when Enron purchased the equity in Garden State are Media General's contractual obligations. Furthermore, Enron's position is that when Garden State went bankrupt and ceased operations, thereby triggering ISRA, ISRA obligations did not result because the State granted Garden State and Enron a Remediation in Progress Waiver. f. On March 8, 2011, Enron received a letter from the Department of the Army Corps of Engineers for the New Orleans District which, among other things: (i) purports to terminate Enron's right to construct, operate, and maintain certain pipe conduits on premises (a bridge) in St. Martin Parish, Louisiana and (ii) demands that Enron vacate and remove all property from the premises and restore the premises to its original condition. Enron had previously informed the Corps that Enron no longer had any need for the premises. Enron and its counsel have informed the Corps that they believe Enron's obligations, if any, were discharged in connection with the confirmation order and therefore Enron has no further obligations. Furthermore, research indicates that the fiber optic cables were originally constructed pursuant to a permit granted by the Louisiana Department of Transportation and Development. This DOTD permit required that the conduits be shared with DOTD fiber optic cables to support traffic control devices along various Louisiana interstate highways. Research also indicates that DOTD is likely still utilizing said conduits and the actions requested by the Corps would negatively impact DOTD's use thereof. g. In late September 2011, Enron Dissolution Corp., Limbach Company and Western Air & Refrigeration, Inc. were served with a complaint entitled Randall Wilkins v. Hamilton Materials, Inc., et al., pending in the Supreme Court of California, County of San Francisco: Case No. CGC-11- 275746. The complaint alleges damages for asbestos-related injuries. Enron responded in writing on October 6, 2011, to plaintiff's counsel advising, among other things, that the plaintiff's complaint is subject to the permanent injunction contained in the Plan and the order confirming the Plan. Enron Dissolution Corp., Limbach Company and Western Air & Refrigeration, Inc. were voluntarily dismissed from the lawsuit. h. On November 14, 2011, EFS VIII, Inc. f/k/a Limbach Company was served with a compliant entitled William Kenneth Weaver vs. Foseco, Inc., et al., pending in the Court of Common Pleas, Cuyahoga County, Ohio: Case No. CV-11-766278. The complaint alleges damages for asbestos-related injuries and Enron responded in writing on December 1, 2011 to plaintiff's counsel, John D. Mismas, Esquire, of the law firm of The Mismas Law Firm LLC, advising plaintiff's counsel that the plaintiff's complaint is subject to the permanent injunction contained in the Plan and the order confirming the Plan. Enron has been advised that the plaintiff will dismiss EFS VIII, Inc. without prejudice and the parties are currently preparing the appropriate dismissal papers. i. The Reorganized Debtors continue to be sponsors of pre- petition benefit plans, certain members of which are entitled to receive distributions from the settlement of certain class action securities cases, Tittle, et al. v. Enron Corporation, et al. and Newby, et al. v. Enron Corporation, et al., related to the Enron estate. The Reorganized Debtors are awaiting final distribution of certain class action settlements to the benefit plans, which is expected in mid-2012. The Reorganized Debtors have an obligation to administer the plans and fund certain expenses in connection with the plans until a time as all settlement distributions have been received. The timing of the distribution of class action settlement monies to the benefit plans is uncertain and the Reorganized Debtors lack control over the distribution to the plans. j. The Reorganized Debtors continue to perform the necessary accounting, control and reporting work required to effect closure of the Case promptly. The Plan Administrator and engaged professional firms (a) support litigation, (b) handle accounting, tax, cash management and reporting for the three remaining entities, (c) calculate and control creditor distributions, (d) perform claims management, (e) complete disposition of remaining litigation (f) oversee wind-up of employee matters and benefit plans, and (g) oversee IT and corporate services providers and non-litigation matters. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 01-16033) on Dec. 2, 2001, following controversy over accounting procedures that caused its stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP; Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors won confirmation of their Plan in July 2004, and the Plan was declared effective on Nov. 17, 2004. After approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre- bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. ENRON CORP: Court Awards $7,000 for John Hancock's Fees ------------------------------------------------------- Judge Arthur J. Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York awarded $7,000 to John Hancock Life Insurance Company (U.S.A.) for the fees and costs it incurred in filing and prosecuting the interpleader motion and complaint it filed in the adversary proceeding filed by The Official Committee of Unsecured Creditors of Enron Corp., et al., against Kenneth L. Lay and his wife, Linda P. Lay. John Hancock initiated its interpleader claim to resolve multiple claims of ownership to two variable annuities contracts issued by Hancock's predecessor. John Hancock originally sought recovery of about $120,000 in fees and costs but Judge Gonzalez held that the vast majority of the fees and expenses sought by John Hancock relate to its attempts to introduce issues relating to the determination of its potential obligations under the insurance contract that Mrs. Lay received under the Settlement Agreement with Enron Creditors Recovery Corp. The Court agreed with ECRC that the only interested parties in the potential dispute relating to the fees are John Hancock and Mrs. Lay. Judge Gonzalez said the dispute concerning John Hancock's obligations under the insurance contract has no bearing on the estate. He said John Hancock is not prejudiced in its right to seek resolution of its claims with Ms. Lay in the future in any appropriate forum. Before entry of the order, Mrs. Lay filed her objected to the request for recovery of fees and costs complaining that John Hancock has served only as an impediment and distraction to the resolution of the dispute with the ECRC over the annuity contracts. Mrs. Lay asserted that John Hancock is not entitled to the recovery of any attorneys' fees. According to Judge Gonzalez, the $7,000 represents those fees and costs strictly associated with John Hancock's filing and prosecution of the original Interpleader Motion and Complaint insofar as they sought a determination as to the rightful owner of the Annuity Contracts. The Court has reviewed the listing of time and expenses that John Hancock submitted with its request, and the Court has determined that $7,000 is warranted. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 01-16033) on Dec. 2, 2001, following controversy over accounting procedures that caused its stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP; Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors won confirmation of their Plan in July 2004, and the Plan was declared effective on Nov. 17, 2004. After approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre- bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. EVERGREEN SOLAR: Sues Chinese Joint Venture Partner --------------------------------------------------- Liz Hoffman at Bankruptcy Law360 reports that Evergreen Solar Inc. on Wednesday filed suit in Delaware bankruptcy court against its Chinese partner in a controversial joint venture launched in 2009 to cut the struggling company's costs by moving some production to China. The suit accuses Hubei Science and Technology Investment Co. Ltd. of improperly trying to keep Evergreen from selling some of its assets at a bankruptcy auction. The company is seeking an order voiding certain liens Hubei has asserted, according to Law360. About Evergreen Solar Evergreen Solar, Inc. -- http://www.evergreensolar.com/-- developed, manufactured and marketed String Ribbon solar power products using its proprietary, low-cost silicon wafer technology. The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge Mary F. Walrath. The Company's balance sheet at April 2, 2011, showed $373,972,000 in assets, $455,506,000 in total liabilities, and a stockholders' deficit of $81,534,000. Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham McCutchen LLP, serve as general bankruptcy counsel to the Debtor. Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as co-counsel. Hilco Industrial LLC serves as exclusive marketing and sales agent. Klehr Harrison Harvey Branzburg serves as special conflicts counsel. Zolfo Cooper LLC is the financial advisor. UBS Securities, LLC, serves as investment banker. Epiq Bankruptcy Solutions has been tapped as claims agent. In conjunction with the Chapter 11 filing, the Company entered into a restructuring support agreement with certain holders of more than 70% of the outstanding principal amount of the Company's 13% convertible senior secured notes. As part of the bankruptcy process the Company will undertake a marketing process and will permit all parties to bid on its assets, as a whole or in groups pursuant to 11 U.S.C. Sec. 363. An entity formed by the supporting noteholders, ES Purchaser, LLC, entered into an asset purchase agreement with the Company to serve as a 'stalking-horse" and provide a "credit-bid" pursuant to the Bankruptcy Code for assets being sold. The supporting noteholders are represented by Michael S. Stainer, Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York. An official committee of unsecured creditors has retained Pepper Hamilton and Kramer Levin Naftalis & Frankel as counsel. The Committee tapped Garden City Group as communications services agent. Evergreen Solar is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are start-up Spectrawatt Inc., which also filed in August, Solyndra Inc., which filed early in September, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. Evergreen sold the assets piecemeal in three auctions. Max Era Properties Ltd. from Hong Kong paid $6 million cash and $3.2 million in stock of China Private Equity Investment Holdings Ltd. for the company name, intellectual property, and wafermaking assets. Kimball Holdings LLC paid $3.8 million for solar panel inventory while the secured lenders exchanged $21.5 million of their $165 million claim for a $171 million claim against Lehman Brothers Holdings Inc. Max Era Properties Limited and Sovello AG bought equipment and machinery located at the Debtor's Devens, Massachusetts facility for $8.9 million. EVERGREEN SOLAR: Ameriprise No Longer A 5% Shareholder ------------------------------------------------------ Ameriprise Financial, Inc., discloses that as of Dec. 31, 2011, it may be deemed to beneficially own 3 shares of the Common Stock of Evergreen Solar, Inc. A copy of the Schedule 13G is available for free at http://is.gd/ESA854 About Evergreen Solar Evergreen Solar, Inc. -- http://www.evergreensolar.com/-- developed, manufactured and marketed String Ribbon solar power products using its proprietary, low-cost silicon wafer technology. The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge Mary F. Walrath. The Company's balance sheet at April 2, 2011, showed $373,972,000 in assets, $455,506,000 in total liabilities, and a stockholders' deficit of $81,534,000. Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham McCutchen LLP, serve as general bankruptcy counsel to the Debtor. Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as co-counsel. Hilco Industrial LLC serves as exclusive marketing and sales agent. Klehr Harrison Harvey Branzburg serves as special conflicts counsel. Zolfo Cooper LLC is the financial advisor. UBS Securities, LLC, serves as investment banker. Epiq Bankruptcy Solutions has been tapped as claims agent. In conjunction with the Chapter 11 filing, the Company entered into a restructuring support agreement with certain holders of more than 70% of the outstanding principal amount of the Company's 13% convertible senior secured notes. As part of the bankruptcy process the Company will undertake a marketing process and will permit all parties to bid on its assets, as a whole or in groups pursuant to 11 U.S.C. Sec. 363. An entity formed by the supporting noteholders, ES Purchaser, LLC, entered into an asset purchase agreement with the Company to serve as a 'stalking-horse" and provide a "credit-bid" pursuant to the Bankruptcy Code for assets being sold. The supporting noteholders are represented by Michael S. Stainer, Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York. An official committee of unsecured creditors has retained Pepper Hamilton and Kramer Levin Naftalis & Frankel as counsel. The Committee tapped Garden City Group as communications services agent. Evergreen Solar is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are start-up Spectrawatt Inc., which also filed in August, Solyndra Inc., which filed early in September, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. Evergreen sold the assets piecemeal in three auctions. Max Era Properties Ltd. from Hong Kong paid $6 million cash and $3.2 million in stock of China Private Equity Investment Holdings Ltd. for the company name, intellectual property, and wafermaking assets. Kimball Holdings LLC paid $3.8 million for solar panel inventory while the secured lenders exchanged $21.5 million of their $165 million claim for a $171 million claim against Lehman Brothers Holdings Inc. Max Era Properties Limited and Sovello AG bought equipment and machinery located at the Debtor's Devens, Massachusetts facility for $8.9 million. EVERGREEN SOLAR: Aristeia No Longer a Substantial Shareholder ------------------------------------------------------------ Aristeia Capital, L.L.C., discloses that as of Dec. 31, 2011, it has ceased to own any shares of Common Stock of Evergreen Solar, Inc. A copy of the Schedule 13G/A is available for free at: http://is.gd/32Sdz4 About Evergreen Solar Evergreen Solar, Inc. -- http://www.evergreensolar.com/-- developed, manufactured and marketed String Ribbon solar power products using its proprietary, low-cost silicon wafer technology. The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge Mary F. Walrath. The Company's balance sheet at April 2, 2011, showed $373,972,000 in assets, $455,506,000 in total liabilities, and a stockholders' deficit of $81,534,000. Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham McCutchen LLP, serve as general bankruptcy counsel to the Debtor. Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as co-counsel. Hilco Industrial LLC serves as exclusive marketing and sales agent. Klehr Harrison Harvey Branzburg serves as special conflicts counsel. Zolfo Cooper LLC is the financial advisor. UBS Securities, LLC, serves as investment banker. Epiq Bankruptcy Solutions has been tapped as claims agent. In conjunction with the Chapter 11 filing, the Company entered into a restructuring support agreement with certain holders of more than 70% of the outstanding principal amount of the Company's 13% convertible senior secured notes. As part of the bankruptcy process the Company will undertake a marketing process and will permit all parties to bid on its assets, as a whole or in groups pursuant to 11 U.S.C. Sec. 363. An entity formed by the supporting noteholders, ES Purchaser, LLC, entered into an asset purchase agreement with the Company to serve as a 'stalking-horse" and provide a "credit-bid" pursuant to the Bankruptcy Code for assets being sold. The supporting noteholders are represented by Michael S. Stainer, Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York. An official committee of unsecured creditors has retained Pepper Hamilton and Kramer Levin Naftalis & Frankel as counsel. The Committee tapped Garden City Group as communications services agent. Evergreen Solar is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are start-up Spectrawatt Inc., which also filed in August, Solyndra Inc., which filed early in September, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. Evergreen sold the assets piecemeal in three auctions. Max Era Properties Ltd. from Hong Kong paid $6 million cash and $3.2 million in stock of China Private Equity Investment Holdings Ltd. for the company name, intellectual property, and wafermaking assets. Kimball Holdings LLC paid $3.8 million for solar panel inventory while the secured lenders exchanged $21.5 million of their $165 million claim for a $171 million claim against Lehman Brothers Holdings Inc. Max Era Properties Limited and Sovello AG bought equipment and machinery located at the Debtor's Devens, Massachusetts facility for $8.9 million. EXECUTIVE CENTER: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Executive Center Of Simi Valley, LLC dba Agoura Hills Corporate Center 1445 E. Los Angeles Ave. Ste 301 Simi Valley, CA 93065 Bankruptcy Case No.: 12-11527 Chapter 11 Petition Date: February 16, 2012 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Debtor's Counsel: Janet A. Lawson, Esq. 3639 E Harbor Blvd #109 Ventura, CA 93001 Tel: (805) 985-1147 Fax: (805) 658-2302 E-mail: jlawsonlawyer@gmail.com Scheduled Assets: $29,576,254 Scheduled Liabilities: $19,093,382 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-11527.pdf The petition was signed by Arnold A. Klein, managing partner. F & P LLC: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: F & P, LLC 48 William Street Worcester, MA 01609 Bankruptcy Case No.: 12-40536 Chapter 11 Petition Date: February 16, 2012 Court: United States Bankruptcy Court District of Massachusetts (Worcester) Judge: Melvin S. Hoffman Debtor's Counsel: James P. Ehrhard, Esq. EHRHARD & ASSOCIATES, P.C. 418 Main Street, 4th Floor Worcester, MA 01608 Tel: (508) 791-8411 E-mail: ehrhard@ehrhardlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Felicio F. Lana, manager. FANNIE MAE: Should Embrace Loan Forgiveness, HUD's Donovan Says --------------------------------------------------------------- American Bankruptcy Institute reports that Shaun Donovan, the Secretary of the U.S. Department of Housing and Urban Development, would like the federal regulator for Fannie Mae and Freddie Mac to begin reducing loan balances for certain troubled borrowers. About Fannie Mae Federal National Mortgage Association, aka Fannie Mae, is a government-sponsored enterprise that was chartered by U.S. Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. The Company's balance sheet at Dec. 31, 2010 showed $3.222 trillion in total assets, $3.224 trillion in total liabilities, and a $2.52 billion total deficit. Fannie Mae has been under conservatorship, with the Federal Housing Finance Agency acting as conservator, since September 6, 2008. As conservator, FHFA succeeded to all rights, titles, powers and privileges of the company, and of any shareholder, officer or director of the company with respect to the company and its assets. The conservator has since delegated specified authorities to Fannie Mae's Board of Directors and has delegated to management the authority to conduct day-to-day operations. The U.S. Department of the Treasury owns Fannie Mae's senior preferred stock and a warrant to purchase 79.9% of its common stock, and Treasury has made a commitment under a senior preferred stock purchase agreement to provide Fannie with funds under specified conditions to maintain a positive net worth. FENTON SUB: Plan Outline Hearing Continued Until April 4 -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Minnesota has continued until April 4, 2012, at 10:30 a.m., the hearing to consider adequacy of the Disclosure Statement explaining Fenton Sub Parcel D, LLC, and Bowles Sub Parcel D, LLC's Joint Plan of Reorganization. As reported in the Troubled Company Reporter on Jan. 31, 2012, the Plan anticipates that all property of the estate will be vested in the Reorganized Debtors. The Debtors will continue to operate Pool D Properties -- six parcels of real property located in Anoka, Dakota, and Hennepin Counties, Minnesota; may market the Pool D Properties for sale either individually or in one or more groups; and may seek alternative financing. The secured claim of Wells Fargo Bank N.A. as Lender will be paid in full over time with the income generated by the operation of the Pool D Properties, by the proceeds of the sale(s) of one or more of the Pool D Properties, with the proceeds of new financing, or with a combination of these options. The Lender will retain its liens to secure such payments. Steven B. Hoyt's lien in the properties will be released. Unsecured creditors will receive up to 100% of their claims, without interest, from distributions from excess cash generated by postpetition operations and from the sale(s) or refinancing and operations after the Lender is paid in full. The actual amount to be paid depends on the results of operations and sales or refinancing. The most likely range of recovery from operations is estimated to be 0% to 21%; the ultimate sales prices are unknown, but could result in full payment to unsecured creditors. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/FENTON_SUB_ds.pdf About Fenton Sub Parcel D and Bowles Sub Parcel D Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC jointly own industrial multi-tenant properties located in the Twin Cities. They are controlled by StoneArch II/WCSE Minneapolis Industrial LLC. StoneArch is the 100% member of Bowles Subsidiary, LLC and of Fenton Subsidiary LLC. Bowles Subsidiary LLC is then the 100% member of Bowles Sub Parcel D LLC, and Fenton Subsidiary LLC is the 100% member of Fenton Sub Parcel D, LLC. In 2007, StoneArch acquired various LLCs, which in turn owned 27 industrial multi- tenant properties located in the Twin Cities. The properties were divided into four separate pools: A, B, C, and D. Fenton Sub Parcel D and Bowles Sub Parcel D jointly own the properties in pool D. As tenants in common, Fenton Sub Parcel D has an undivided 74.5394% interest and Bowles Sub Parcel D has an undivided 25.4606% interest. The Pool D Properties consist of six parcels of real property located in Anoka, Dakota, and Hennepin Counties, Minnesota. The Debtors expect the Pool D Properties to be worth $13,135,656 as of the Petition Date. Although they are two separate legal entities, Fenton Sub Parcel D and Bowles Sub Parcel D have consistently been treated as one enterprise. Hoyt Properties, Inc., acts as agent in managing the Pool D Properties. Fenton Sub Parcel D and Bowles Sub Parcel D filed for Chapter 11 bankruptcy (Bankr. D. Minn. Case Nos. 11-44430 and 11-44434) on June 29, 2011. The Debtors' petitions were signed by Steven Bruce Hoyt, chief manager, who is also a debtor (Bankr. D. Minn. Case No. 11-43816). He is separately represented by Michael C. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman, P.A. The cases were originally assigned to Judge Dennis D. O'Brien and reassigned to Judge Robert J. Kressel as the cases are related to the Hoyt case, which was filed earlier before Judge Kressel. Cynthia A. Moyer, Esq., James L. Baillie, Esq., and Sarah M. Gibbs, Esq., at Fredrikson & Byron, PA, represent the Debtors. FIRST AUTOMOTIVE: Case Summary & 12 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: First Automotive Care, Inc. Road Pr#177, #2501 Guaynabo, PR 00969 Bankruptcy Case No.: 12-01132 Chapter 11 Petition Date: February 17, 2012 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Alexis Fuentes Hernandez, Esq. FUENTES LAW OFFICES P.O. Box 9022726 San Juan, PR 00902-2726 Tel: (787) 722-5216 Fax: (787) 722-5206 E-mail: alex@fuentes-law.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 12 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/prb12-01132.pdf The petition was signed by Angel C. Jimenez, president. FIRST FEDERAL: Dimensional Fund Equity Stake Down to 1.61% ---------------------------------------------------------- Dimensional Fund Advisors LP disclosed in an amended Schedule 13G filing with the U.S. Securities and Exchange Commission that, as of Dec. 31, 2011, it beneficially owns 311,697 shares of common stock of First Federal Bancshares of Arkansas Inc representing 1.61% of the shares outstanding. A full-text copy of the filing is available for free at http://is.gd/6yErJ7 About First Federal Bancshares of Arkansas First Federal Bancshares of Arkansas, Inc. (NASDAQ GM:FFBH) -- http://www.ffbh.com/-- is a unitary savings and loan holding company for First Federal Bank, a community bank serving consumers and businesses with a full range of checking, savings, investment and loan products and services. The Bank, founded in 1934, conducts business from 20 full-service branch locations, one stand-alone loan production office, and 30 ATMs located in Northcentral and Northwest Arkansas. The Company's balance sheet at Sept. 30, 2010, showed $632.34 million in total assets, $592.88 million in total liabilities, and stockholders' equity of $39.46 million. At June 30, 2010, the Company was above the regulatory minimums for tangible, core, total risk-based and tier 1 risk-based capital. On April 12, 2010, the Company and the Bank each consented to the terms of Cease and Desist Orders issued by the Office of Thrift Supervision. The Orders impose certain operations restrictions on the Company and, to a greater extent, the Bank, including lending and dividend restrictions. The Orders also require the Company and the Bank to take certain actions, including the submission to the OTS of capital plans and business plans to, among other things, preserve and enhance the capital of the Company and the Bank and strengthen and improve the consolidated Company's operations, earnings and profitability. The Bank Order specifically requires the Bank to achieve and maintain, by December 31, 2010, a tier 1 (core) capital ratio of at least 8% and a total risk-based capital ratio of at least 12.0% and maintain these higher ratios for as long as the Bank Order is in effect. At June 30, 2010, the Bank's core and total risk-based capital ratios were 6.46% and 11.40%. Had the Bank been required to meet these capital requirements at June 30, 2010, it would have needed additional capital of approximately $10.5 million. As reported in the Troubled Company Reporter on April 21, 2010, Deloitte & Touche LLP, in Little Rock, Ark., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ended December 31, 2009. The independent auditors noted of the Company's significant operating losses in 2009, significant levels of criticized assets, and decline in capital levels. First Federal reported a net loss of $5.36 million on $7.01 million of total interest income for the three months ended Sept. 30, 2010, compared with a net loss of $23.23 million on $8.69 million of total interest income for the same period the prior year. FIRST FEDERAL: First Manhattan No Longer Has Any Shares ------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission on Feb. 13, 2012, First Manhattan Co. disclosed that it does not beneficially own any shares of common stock of First Federal Bancshares of Arkansas. A full-text copy of the filing is available for free at http://is.gd/MmykKW About First Federal Bancshares of Arkansas First Federal Bancshares of Arkansas, Inc. (NASDAQ GM:FFBH) -- http://www.ffbh.com/-- is a unitary savings and loan holding company for First Federal Bank, a community bank serving consumers and businesses with a full range of checking, savings, investment and loan products and services. The Bank, founded in 1934, conducts business from 20 full-service branch locations, one stand-alone loan production office, and 30 ATMs located in Northcentral and Northwest Arkansas. The Company's balance sheet at Sept. 30, 2010, showed $632.34 million in total assets, $592.88 million in total liabilities, and stockholders' equity of $39.46 million. At June 30, 2010, the Company was above the regulatory minimums for tangible, core, total risk-based and tier 1 risk-based capital. On April 12, 2010, the Company and the Bank each consented to the terms of Cease and Desist Orders issued by the Office of Thrift Supervision. The Orders impose certain operations restrictions on the Company and, to a greater extent, the Bank, including lending and dividend restrictions. The Orders also require the Company and the Bank to take certain actions, including the submission to the OTS of capital plans and business plans to, among other things, preserve and enhance the capital of the Company and the Bank and strengthen and improve the consolidated Company's operations, earnings and profitability. The Bank Order specifically requires the Bank to achieve and maintain, by December 31, 2010, a tier 1 (core) capital ratio of at least 8% and a total risk-based capital ratio of at least 12.0% and maintain these higher ratios for as long as the Bank Order is in effect. At June 30, 2010, the Bank's core and total risk-based capital ratios were 6.46% and 11.40%. Had the Bank been required to meet these capital requirements at June 30, 2010, it would have needed additional capital of approximately $10.5 million. As reported in the Troubled Company Reporter on April 21, 2010, Deloitte & Touche LLP, in Little Rock, Ark., expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ended December 31, 2009. The independent auditors noted of the Company's significant operating losses in 2009, significant levels of criticized assets, and decline in capital levels. First Federal reported a net loss of $5.36 million on $7.01 million of total interest income for the three months ended Sept. 30, 2010, compared with a net loss of $23.23 million on $8.69 million of total interest income for the same period the prior year. FLASH CARRIER: Case Summary & 4 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Flash Carrier LLC 104-112 Lister Avenue Newark, NJ 07105 Bankruptcy Case No.: 12-13980 Chapter 11 Petition Date: February 17, 2012 Court: United States Bankruptcy Court District of New Jersey (Newark) Judge: Donald H. Steckroth Debtor's Counsel: Ethan Kemp, Esq. KEMP LAW GROUP, LLC 665 Newark Ave Ste 404 P.O. Box 8113 Jersey City, NJ 07308 Tel: (201) 653-9900 Fax: (201) 604-6498 E-mail: klgbankruptcy@aol.com Scheduled Assets: $1,555,000 Scheduled Liabilities: $199,911 A list of the Company's four largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/njb12-13980.pdf The petition was signed by Sam Kawall. FOOT LOCKER: Moody's Says Share Repurchase No Impact on Ba3 CFR --------------------------------------------------------------- Moody's Investors Service said that Foot Locker's announcement of a new $400 million share repurchase authorization has no impact on the positive outlook or the Ba3 corporate family rating. "We maintain a positive outlook on Foot Locker and upward rating pressure could build through margin improvements and continued same store sales growth", stated Marko Semetko, an Analyst at Moody's. Foot Locker, Inc. is a specialty athletic retailer, operating approximately 3,400 stores in 23 countries including in North America, Europe, and Australia as well as through its direct-to- customer websites and catalogs. Store nameplates include Foot Locker, Footaction, Lady Foot Locker, Kids Foot Locker, Champs Sports, and CCS. Revenues for the last twelve months ended October 29, 2011 were approximately $5.5 billion. FORSMAN INC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Forsman, Inc. dba Horizon Surveys fdba Four Core, LLC fdba Global Electric, LLC fdba Horizon Engineering And Surveys, LLC fdba Horizon Consultants Of Arizona fdba Cobalt Contractors, LLC fdba Aero Tech Mapping Technologies 9901 Covington Cross Drive Suite 120 Las Vegas, NV 89144 Bankruptcy Case No.: 12-11748 Chapter 11 Petition Date: February 17, 2012 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Zachariah Larson, Esq. MARQUIS AURBACH COFFING 10001 Park Run Drive Las Vegas, NV 89145 Tel: (702) 382-1170 Fax: (702) 382-1169 E-mail: cshurtliff@maclaw.com Scheduled Assets: $241,685 Scheduled Liabilities: $7,884,424 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb12-11748.pdf The petition was signed by John E. Forsman, president. FREESCALE SEMICONDUCTORS: Moody's Rates New Term Loan at 'B1' ------------------------------------------------------------- Moody's Investors Service has assigned a B1 (LGD-3, 34%) rating to Freescale Semiconductor, Inc.'s proposed $500 million senior secured term loan due 2019. Concurrently, Moody's has lowered the senior secured debt ratings to B1 from Ba3 in light of the proposed transaction. Proceeds from the new term loan will be used to repay $500 million of 10.125% Senior Subordinated Notes due 2016. Moody's has affirmed all other ratings. The outlook remains stable. This rating was assigned: $500 Million Senior Secured Incremental Extended Term Loan due 2019 -- B1 (LGD-3, 34%) The following ratings were downgraded: $2.215 Billion (originally $2.265 Billion) Senior Secured Extended Maturity Term Loan due 2016 to B1 (LGD-3, 34%) from Ba3 (LGD-3, 31%) $425 Million Senior Secured Revolver due 2016 to B1 (LGD-3, 34%) from Ba3 (LGD-3, 31%) $663 Million (originally $750 Million) 10.125% Senior Secured Notes due 2018 to B1 (LGD-3, 34%) from Ba3 (LGD-3, 31%) $1.380 Billion 9.25% Senior Secured Notes due 2018 to B1 (LGD-3, 34%) from Ba3 (LGD-3, 31%) These point estimates were revised: $473 Million (originally $750 Million) 10.75% Senior Unsecured Notes due 2020 to Caa1 (LGD-5, 86%) from Caa1 (LGD-5, 81%) $739 Million (originally $750 Million) 8.05% Senior Unsecured Notes due 2020 to Caa1 (LGD-5, 86%) from Caa1 (LGD-5, 81%) $298 Million (originally $2.35 Billion) 8.875% Senior Unsecured Notes due 2014 to Caa1 (LGD-5, 86%) from Caa1 (LGD-5, 81%) $57 Million (originally $500 Million) Senior Floating Rate Notes due 2014 to Caa1 (LGD-5, 86%) from Caa1 (LGD-5, 81%) These ratings were affirmed: Corporate Family Rating -- B2 Probability of Default Rating -- B2 Speculative Grade Liquidity Rating -- SGL-1 $264 Million (originally $1.6 Billion) 10.125% Senior Subordinated Notes due 2016 at Caa2 (LGD-6, 100%) RATINGS RATIONALE While total debt of about $6.6 billion will remain unchanged following the refinancing, the reallocation of debt in the capital structure will impact the senior secured instrument ratings. The reduction of senior subordinated notes from $764 million to $264 million results in less unsecured debt loss absorption for the senior secured creditor class, which will now increase by $500 million (as a result of the new term loan) to over $4.7 billion. As the senior secured creditor class is now a bigger proportion of Freescale's total debt and will absorb a higher loss under Moody's Loss Given Default Methodology, the instrument ratings migrate closer to the B2 CFR. The B1 rating (LGD-3, 34%) on the senior secured bank credit facilities and secured notes is one notch higher than the CFR to reflect the senior position of the secured debt in Freescale''s debt capital structure and the protection provided by the collateral package. The senior secured debt, all of which benefit from the same collateral package, is secured by a first priority lien on a majority of domestic tangible and intangible assets, 100% stock of each material wholly-owned domestic subsidiary and 65% stock of each material foreign subsidiary. The secured obligations benefit from secured guarantees from the borrower's wholly-owned domestic subsidiaries and parent company. The assigned rating is subject to review of final documentation and no material change in the terms and conditions of the transaction as advised to Moody's. Moody's subscribers can find additional information in the Freescale Credit Opinion published on www.moodys.com. The principal methodologies used in this rating were Global Semiconductor Industry Methodology published in November 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Austin, TX, Freescale Semiconductor, Inc. designs and manufactures embedded semiconductors for the transportation, networking, industrial and wireless markets. In December 2006, the company was taken private in a leveraged buyout. In June 2011, Freescale sold approximately 20% of its outstanding shares in an initial public offering. Revenues for the twelve months ended December 31, 2011 were $4.6 billion. FREESCALE SEMICON: Fitch Rates $500-Mil. Sr. Notes at 'B-' ---------------------------------------------------------- Fitch rates Freescale Semiconductor Holdings I, Ltd.'s (Freescale) $500 million senior secured notes offering 'B-/RR3'. Fitch currently rates Freescale as follows: -- Issuer Default Rating (IDR) at 'CCC'; -- Senior secured bank revolving credit facility (RCF) at 'B-/RR3'; -- Existing senior secured term loans at 'B-/RR3'; -- Senior secured notes at 'B-/RR3'; -- Senior unsecured notes at 'C/RR6'; and -- Senior subordinated notes at 'C/RR6'. The Rating Outlook is Positive. Fitch's actions affect approximately $6.6 billion of total debt, including the currently undrawn RCF and pro forma for the transaction and repayment of senior subordinated or senior unsecured notes with net proceeds. Freescale is seeking lender consent to amend the senior secured credit agreement and enter into $500 million of senior secured term loans. The company plans to use net proceeds to repay a portion of the senior subordinated notes due 2016 or senior unsecured notes due in 2014. Fitch anticipates the term loans will be pari passu with Freescale's existing senior secured debt. With this latest refinancing transaction, Freescale will reduce debt due within the next five years. However, debt maturities remain formidable with approximately $2.8 billion due over this time frame, excluding term loan amortization. Fitch continues to believe Freescale will be challenged to meet these obligations with free cash flow and will require ongoing capital markets access within the context of lackluster aggregate demand and limited visibility. Fitch acknowledges few 'CCC' or 'B' category companies are capable of organically funding debt service through the intermediate term. Nonetheless, Fitch estimates Freescale's aggregate free cash flow (cash from operations less capital expenditures) over the past three years has been approximately $68 million. Furthermore, Fitch estimates total leverage (total debt to operating EBITDA) exiting 2011 was approximately 6.1 times (x), still elevated despite approximately $1 billion of net debt reduction during 2011 and estimate high single digit growth in operating EBITDA. With Fitch's expectations for flat to low single digit revenue growth in 2012, Fitch anticipates Freescale's free cash flow could approach $250 million for the year enabling debt reduction and the company's total leverage to fall below 5.5x. Fitch believes this milestone could result in positive rating actions. Negative rating action could result from the company's inability to grow revenues and benefit from meaningful operating leverage, most likely from diminished competitiveness, a downturn in the semiconductor market, or a double-dip recession. Fitch believes any of these scenarios would meaningfully reduce the potential for debt reduction. Fitch believes Freescale's liquidity, pro forma for the new term loan and anticipated debt redemption, was sufficient as of Dec. 31, 2011 and consisted of: i) approximately $772 million of cash and equivalents and ii) approximately $408 million of remaining availability under the $425 million senior secured RCF due July 1, 2016. Fitch's anticipation for annual free cash flow approaching $250 million over the intermediate-term also supports liquidity. Total debt, pro forma for the new term loan but before debt redemption (since the company is seeking the option to repay senior subordinated notes due 2016 or senior unsecured notes due 2014), was approximately $6.6 billion as of Dec. 31, 2011 and consisted of: -- $500 million of new term loan facilities; -- Approximately $2.2 billion of senior secured term loans due Dec. 1, 2016; -- Approximately $2 billion of senior secured notes due 2018; -- Approximately $355 million of senior unsecured notes due 2014; -- Approximately $1.2 billion of senior unsecured notes due 2020; and -- $764 million of senior subordinated notes due 2016. The Recovery Ratings (RR) for Freescale reflect Fitch's recovery expectations under a distressed scenario, as well as Fitch's belief that Freescale's enterprise value, and hence recovery rates for its creditors, will be maximized as a going concern rather than liquidation scenario. In deriving a distressed enterprise value, Fitch applies a 43% discount to its estimate of Freescale's operating EBITDA for 2011 of approximately $1.1 billion. Fitch applies a 5x distressed EBITDA multiple to reach a reorganization enterprise value of approximately $3.1 billion. As is standard with Fitch's recovery analysis, the revolver is assumed to be fully drawn and cash balances fully depleted to reflect a stress event. After reducing the amount available in reorganization for administrative claims by 10%, Fitch estimates the senior secured debt would recover 51%-70%, equating to 'RR3' Recovery Ratings. The senior unsecured and senior subordinated debt tranches would recover 0%-10%, equating to 'RR6' Recovery Ratings and reflecting Fitch's belief that minimal if any value would be available for unsecured noteholders. G.L. & ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: G.L. & Associates, L.L.C. 536 Perry Road Grand Blanc, MI 48439 Bankruptcy Case No.: 12-30631 Chapter 11 Petition Date: February 16, 2012 Court: United States Bankruptcy Court Eastern District of Michigan (Flint) Judge: Daniel S. Opperman Debtor's Counsel: Peter T. Mooney, Esq. SIMEN, FIGURA & PARKER 5206 Gateway Centre #200 Flint, MI 48507 Tel: (810) 235-9000 E-mail: pmooney@sfplaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the list of 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/mieb12-30631.pdf The petition was signed by Lisa Stiehl, manager. GATEHOUSE MEDIA: Bank Debt Trades at 73% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which GateHouse Media, Inc., is a borrower traded in the secondary market at 26.83 cents- on-the-dollar during the week ended Friday, Feb. 17, 2012, a drop of 0.30 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on Feb. 27, 2014, and carries Moody's Ca rating and Standard & Poor's CCC- rating. The loan is one of the biggest gainers and losers among 164 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About GateHouse Media GateHouse Media, Inc. -- http://www.gatehousemedia.com/-- headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites. The Company reported a net loss of $28.42 million on $381.35 million of total revenues for the nine months ended Sept. 25, 2011, compared with a net loss of $27.74 million on $415.22 million of total revenues for the nine months ended Sept. 30, 2010. The Company reported a net loss of $26.64 million on $558.58 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of $530.61 million on $584.79 million of total revenue for the year ended Dec. 31, 2009. The Company's balance sheet at Sept. 25, 2011, showed $511.80 million in total assets, $1.32 billion in total liabilities and a $811.28 million total stockholders' deficit. GENERAL MARITIME: Plan Outline Hearing Scheduled for Feb. 28 ------------------------------------------------------------ The Hon. Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on Feb. 28, 2012, at 11:00 a.m. (Eastern Time), to consider adequacy of the Disclosure Statement explaining General Maritime Corporation, et al.'s Plan of Reorganization. Objections, if any, are due Feb. 21, at 4:00 p.m. As reported in the Troubled Company Reporter on Feb. 7, 2012, among other things, the Plan contemplates a rights offering by the Company, as described in the Disclosure Statement and the Plan. In the Rights Offering, eligible holders of general unsecured claims will have the opportunity to purchase up to 17.5% of the new equity of the reorganized Company on an undiluted basis for up to $61.25 million. The Plan provides for a record date of Feb. 8, 2012 for determining generally the holders of general unsecured claims that are eligible to participate in the Rights Offering, although certain additional holders will also be permitted to participate in the Rights Offering as described in the Plan. The Rights Offering will be limited to those holders of general unsecured claims that are either qualified institutional buyers or accredited investors as defined by applicable securities laws. A copy of the Plan dated Jan. 31, 2012, is available for free at http://is.gd/6MfINZ A copy of the related Disclosure Statement is available for free at http://is.gd/suIUVd About General Maritime New York-based General Maritime Corporation, through its subsidiaries, provides international transportation services of seaborne crude oil and petroleum products. The Company's fleet is comprised of VLCC, Suezmax, Aframax, Panamax and product carrier vessels. The fleet consisted of 30 owned vessels and three chartered vessels. The company generates substantially all of its revenues by chartering its fleet to third-party customers. The largest customers include major international oil companies, oil producers, and oil traders such as BP, Chevron Corporation, CITGO Petroleum Corp., ConocoPhillips, Exxon Mobil Corporation, Hess Corporation, Lukoil Oil Company, Stena AB, and Trafigura. General Maritime and 56 subsidiaries filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-15285) on Nov. 17, 2011. Douglas Mannal, Esq., and Adam C. Rogoff, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, serve as counsel to the Debtors. Moelis & Company is the financial advisor. Garden City Group Inc. is the claims and notice agent. Prepetition, General Maritime reached agreements with its key senior lenders, including its bank group, led by Nordea Bank Finland plc, New York Branch as administrative agent, as well as affiliates of Oaktree Capital Management, L.P., on the terms of a restructuring. Under terms of the agreements, Oaktree will provide a $175 million new equity investment in General Maritime and convert its prepetition secured debt to equity. In conjunction with the filing, General Maritime has received a commitment for up to $100 million in new DIP financing from a group of lenders led by Nordea as administrative agent. Counsel for Nordea, as the DIP Agent and the Senior Agent, are Thomas E. Lauria, Esq., and Scott Greissman, Esq., at White & Case LLP. Counsel for Oaktree Capital Management, the Junior Agent, are Edward Sassower, Esq., and Brian Schartz, Esq., at Kirkland & Ellis, LLP. The Official Committee of Unsecured Creditors appointed in the case has retained lawyers at Jones Day as Chapter 11 counsel. Jones Day previously represented an ad hoc group of holders of the 12% Senior Notes due 2017 issued by General Maritime Corp. This representation began Sept. 20, 2011, and concluded Nov. 29, 2011, with the agreement of all members of the Noteholders Committee. The Creditors Committee also tapped Lowenstein Sandler PC as special conflicts counsel. The Noteholders Committee consisted of Capital Research and Management Company, J.P. Morgan Investment Management, Inc., J.P. Morgan Securities LLC, Stone Harbor Investment Partners LP and Third Avenue Focused Credit Fund. The Creditors Committee is comprised of Bank of New York Mellon Corporate Trust, Stone Harbor Investment Partners, Delos Investment Management, and Ultramar Agencia Maritima Ltda. GENERAL MARITIME: Rights Offering Record Date Changed to Feb. 24 ---------------------------------------------------------------- General Maritime Corporation disclosed a change in the record date for its proposed rights offering to Feb. 24, 2012 from Feb. 8, 2012, as previously announced. The rights offering is contemplated by the Company's Plan of Reorganization filed with the United States Bankruptcy Court for the Southern District of New York. In the rights offering, eligible holders of general unsecured claims against debtors who guarantee the Company's obligations under its secured credit facilities will have the opportunity to purchase up to 17.5% of the new equity of the reorganized Company on an undiluted basis for up to $61.25 million. The record date will be used to determine generally the holders of general unsecured claims that are eligible to participate in the rights offering. Certain additional claims holders as described in the Plan and transferees of claims in accordance with the Plan may also be eligible to participate in the rights offering. The rights offering will be limited to those holders of general unsecured claims that are either qualified institutional buyers or accredited investors as defined by applicable securities laws. The Company intends to file an amended Plan and Disclosure Statement relating to the Plan with the Bankruptcy Court to reflect the change in the record date and to make certain related modifications. The Plan and Disclosure Statement have not been approved by the Bankruptcy Court. About General Maritime New York-based General Maritime Corporation, through its subsidiaries, provides international transportation services of seaborne crude oil and petroleum products. The Company's fleet is comprised of VLCC, Suezmax, Aframax, Panamax and product carrier vessels. The fleet consisted of 30 owned vessels and three chartered vessels. The company generates substantially all of its revenues by chartering its fleet to third-party customers. The largest customers include major international oil companies, oil producers, and oil traders such as BP, Chevron Corporation, CITGO Petroleum Corp., ConocoPhillips, Exxon Mobil Corporation, Hess Corporation, Lukoil Oil Company, Stena AB, and Trafigura. General Maritime and 56 subsidiaries filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-15285) on Nov. 17, 2011. Douglas Mannal, Esq., and Adam C. Rogoff, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, serve as counsel to the Debtors. Moelis & Company is the financial advisor. Garden City Group Inc. is the claims and notice agent. Prepetition, General Maritime reached agreements with its key senior lenders, including its bank group, led by Nordea Bank Finland plc, New York Branch as administrative agent, as well as affiliates of Oaktree Capital Management, L.P., on the terms of a restructuring. Under terms of the agreements, Oaktree will provide a $175 million new equity investment in General Maritime and convert its prepetition secured debt to equity. In conjunction with the filing, General Maritime has received a commitment for up to $100 million in new DIP financing from a group of lenders led by Nordea as administrative agent. Counsel for Nordea, as the DIP Agent and the Senior Agent, are Thomas E. Lauria, Esq., and Scott Greissman, Esq., at White & Case LLP. Counsel for Oaktree Capital Management, the Junior Agent, are Edward Sassower, Esq., and Brian Schartz, Esq., at Kirkland & Ellis, LLP. The Official Committee of Unsecured Creditors appointed in the case has retained lawyers at Jones Day as Chapter 11 counsel. Jones Day previously represented an ad hoc group of holders of the 12% Senior Notes due 2017 issued by General Maritime Corp. This representation began Sept. 20, 2011, and concluded Nov. 29, 2011, with the agreement of all members of the Noteholders Committee. The Creditors Committee also tapped Lowenstein Sandler PC as special conflicts counsel. The Noteholders Committee consisted of Capital Research and Management Company, J.P. Morgan Investment Management, Inc., J.P. Morgan Securities LLC, Stone Harbor Investment Partners LP and Third Avenue Focused Credit Fund. The Creditors Committee is comprised of Bank of New York Mellon Corporate Trust, Stone Harbor Investment Partners, Delos Investment Management, and Ultramar Agencia Maritima Ltda. GenMar filed a a proposed Chapter 11 plan on Jan. 31 to implement an agreement worked out before the Nov. 17 bankruptcy filing with affiliates of Oaktree Capital Management LP. The Oaktree group, lenders on three credits totaling more than $1 billion, are to invest $175 million while converting secured debt to equity. In addition, there is to be a $61.3 million rights offering where creditors can purchase new stock. The Company intends to seek confirmation of the Plan by April 2012. GHOST TOWN: Alaska Presley Offers $1.5 Million at Auction --------------------------------------------------------- Clarke Morrison, writing for Citizens-Times.com, reports that Alaska Presley bid $1.5 million for Ghost Town in the Sky at auction on Feb. 10, 2012, at Haywood County Courthouse. According to the report, Ms. Presley would become the owner if no higher bids are made in the foreclosure auction. Ms. Presley earlier bought debts owed on the property and is using the foreclosure process to gain control of Ghost Town. Based in Waynesville, North Carolina, Ghost Town Partners, LLC, operates an amusement park. The Debtor filed for Chapter 11 protection on March 11, 2009 (Bankr. W.D. N.C. Case No. 09-10271). David G. Gray, Esq., at Westall, Gray, Connolly & Davis, P.A., and William E. Cannon, Jr., at Brown, Ward & Haynes P.A., represent the Debtor in its restructuring efforts. In its bankruptcy petition, the Debtor disclosed total assets of $13,035,300 and total debts of $12,305,672. GLOBAL AVIATION: Creditors Reveal Individual Stakes in Firm ----------------------------------------------------------- Kaitlin Ugolik at Bankruptcy Law360 reports that a group of Global Aviation Holdings Inc.'s creditors, including several hedge funds and private equity firms, have disclosed their individual stakes in the leading military transport service provider's debt, according to court documents filed Monday. Funds and accounts related to Guggenheim Investment Management LLC reported the greatest interest, with $39.8 million in senior secured notes. An entity called IN-FP2 LLC holds $29.4 million in Global Aviation's debt, while Beach Point Capital Management LP holds $23.8 million in notes, Law360 discloses. About Global Aviation Global Aviation Holdings Inc., based in Peachtree City, Ga., is the parent company of North American Airlines and World Airways. Global is the largest commercial provider of charter air transportation for the U.S. military, and a major provider of worldwide commercial global passenger and cargo air transportation services. North American Airlines, founded in 1989 and based in Jamaica, N.Y., operates passenger charter flights using B757-200ER and B767-300ER aircraft. World Airways, founded in 1948 and based in Peachtree City, Ga., operates cargo and passenger charter flights using B747-400 and MD-11 aircraft. Global Aviation, along with affiliates, filed Chapter 11 petitions (Bankr. E.D.N.Y. Case No. 12-40783) on Feb. 5, 2012. Global's lead counsel in connection with the restructuring is Kirkland & Ellis LLP and its financial advisor is Rothschild. Kurtzman Carson Consultants LLC is the claims agent. The Debtors disclosed $589.8 million in assets and $493.2 million in liabilities as of Dec. 31, 2011. Liabilities include $146.5 million on 14% first-lien secured notes and $98.1 million on a second-lien term loan. Wells Fargo Bank NA is agent for both. Global said it will use Chapter 11 to shed 16 of 30 aircraft. In addition, Global said it will use Chapter 11 to negotiate new collective bargaining agreements with its unions and deal with liabilities on multi-employer pension plans. GOLF RESORT: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Golf Resort Properties, LLC dba Golden Hills Golf & Turf Club 4782 NW 80th Avenue Ocala, FL 34482 Bankruptcy Case No.: 12-00928 Chapter 11 Petition Date: February 16, 2012 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Judge: Jerry A. Funk Debtor's Counsel: Thomas W. Cartwright, Esq. LAW OFFICE OF THOMAS W CARTWRIGHT 108 North Magnolia Avenue Suite 318 Ocala, FL 34475-6644 Tel: (352) 620-9800 Fax: (352) 620-9805 E-mail: tcartwright@embarqmail.com Scheduled Assets: $2,742,721 Scheduled Liabilities: $1,419,277 A list of the Company's 19 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb12-00928.pdf The petition was signed by Art Skula, managing member. GOODYEAR TIRE: Fitch Affirms Issuer Default Rating at 'B+' ---------------------------------------------------------- Fitch Ratings has affirmed the 'B+' Issuer Default Rating (IDR) and the various issue ratings of The Goodyear Tire & Rubber Company (GT) and its Goodyear Dunlop Tires Europe B.V. (GDTE) subsidiary. GT's ratings apply to a $1.5 billion secured revolving credit facility, a $1.2 billion second lien secured term loan and $2.1 billion of senior unsecured notes. GDTE's ratings apply to a Eur400 million secured revolving credit facility and Eur250 million of senior unsecured notes. The Rating Outlooks for GT and GDTE are Stable. GT's ratings reflect the tire manufacturer's strong competitive position as a leading brand in the global replacement and original equipment (OE) tire segments and continued market acceptance of the company's higher margin premium tire offerings, set against a backdrop of a persistently negative free cash flow performance and substantially underfunded pension obligations. Leverage has declined meaningfully over the past year as positive pricing and mix changes have overcome rising natural rubber costs to drive significant growth in EBITDA. The company's debt level has risen, however, as negative working capital has pressured free cash flow. Looking ahead, although GT has outlined a multi-year plan to increase margins and strengthen its balance sheet, higher capital spending and heavy cash pension contribution requirements are likely to keep free cash flow relatively weak or negative over the intermediate term. GT's top-line performance in 2011 was strong, with net revenue rising 21% to $23 billion from $19 billion in 2010. About 67% of the $3.9 billion increase in revenue was driven by higher pricing and positive mix changes, as worldwide tire unit sales actually declined 0.1% to 180.6 million units. Gross margin in 2011 declined by 60 basis points to 17.3%, largely due to sharply higher raw material costs, primarily for natural rubber. Across its global operations, GT reported that higher raw material costs were responsible for $1.8 billion, or a little more than half, of the $3.4 billion year-over year increase in cost of goods sold in 2011. In the near term, natural rubber prices remain elevated by historical standards, but have moderated from the peak levels seen in late 2010 and early 2011, which should result in some margin expansion when combined with the company's strong price and mix. However, following the substantial increase in revenue per tire seen in 2011, it is likely that unit revenue growth will be softer over the next 12 months. This could be particularly true in Western Europe, where weakening economic conditions may lead to lower volumes and increased pricing pressure. Sales in the company's Europe, Middle East and Africa (EMEA) segment constituted 41% of GT's tire volume and 35% of its revenue in 2011. In March 2011, GT announced a series of initiatives intended to grow its consolidated segment operating income to $1.6 billion in 2013. The three key strategic elements that form the foundation for the strategy include: improving the profitability of the North American tire business; increasing market share in China; and growing and strengthening the EMEA and Latin American business segments. Fitch believes these strategies could increase the company's profit potential, but the tire industry will continue to be challenged by capacity-driven competition and highly volatile prices for key raw materials. Funding these initiatives will also require heavy capital spending in the $1.1 billion to $1.3 billion range annually in 2012 and 2013. The increased capital spending, along with a significant increase in expected cash pension contributions over the next several years, will pose meaningful impediments to GT's ability to generate positive free cash flow over the intermediate term. This could be exacerbated by a potential slowdown in tire demand resulting from global economic weakness and ultimately lead the company to consider increasing its debt level. Pension contributions will continue to be a meaningful use of cash over the intermediate term, although GT's decision to utilize the provisions of the U.S. Pension Relief Act of 2010 will limit the level of required contributions over the next three years. Nonetheless, the company's global pension plans remain deeply underfunded. As of Dec. 31, 2011, GT's global plans (including unfunded plans) were underfunded by $3.1 billion, with a global funded status of 64%. The funded status of the company's U.S. plans was even lower, at only 59%, with an underfunded position of $2.5 billion. GT contributed $294 million to its global pension plans in 2011, while in 2012, the company has announced that it will significantly increase its cash contributions to a range of $550 million to $600 million. Cash contributions in 2013 are also expected to exceed $500 million. The company has previously noted that it hopes that cash contributions at this level, combined with favorable movements in asset values and long-term interest rates, will reduce its global underfunded position to $1.2 billion by year-end 2013. Although the reduced funding requirements provided by the pension relief legislation will lower GT's required contributions through 2014, it also will likely drive required contributions meaningfully higher in 2015 and beyond as the company makes catch-up payments to offset the relief deferrals. As of Dec. 31, 2011, GT's liquidity included $2.8 billion of cash and cash equivalents and a total of $1.6 billion of availability under the company's primary U.S. and European credit facilities. By comparison, at year-end 2010, cash and cash equivalents stood at $2 billion, but the company had $1.7 billion available on its primary credit facilities. The slight decline in credit facility availability reflects a Eur105 million decline in the size of GDTE's facilities to Eur400 million following the amendment of those facilities in April 2011. Although total liquidity at Dec. 31, 2011, was not only up substantially from the Dec. 31, 2010 level, it also remained well above the $1 billion threshold that management has historically considered the level necessary to meet GT's working capital needs and overseas funding requirements through the operating cycle. Fitch notes that the $1.5 billion secured revolver is subject to a borrowing base that could limit its availability, although as of Dec. 31, 2011, there was no restriction on the availability as a result of the borrowing base. As of Dec. 31, 2011, 63% of GT's consolidated cash and cash equivalents were located outside the United States, including $534 million in countries such as China, South Africa and Venezuela that may restrict the transfer of cash beyond their borders. As of year end 2011, GT's current debt maturities were relatively low, with only $156 million coming due in the next 12 months. However, the company also had $256 million in short-term notes payable and overdrafts outstanding, for a total short-term debt position of $412 million. The next significant long-term debt maturity is in 2014 when GT's $1.2 billion second-lien term loan facility comes due. There are no note maturities coming until 2016, however. At Dec. 31, 2011, leverage (defined as total debt/Fitch-calculated EBITDA) stood at 2.8 times (x), down from 3.4x at year-end 2010, although the improvement was driven entirely by increased EBITDA, as total debt rose to $5.2 billion from $4.7 billion at the end of 2010. Fitch's calculation of EBITDA was $1.8 billion in 2011, up from $1.4 billion in 2010. F itch projects that leverage could decline further over the course of 2012, potentially below 2.5x, provided that revenue and margins increase and the company's liquidity remains sufficient to avoid increasing its consolidated debt level. Free cash flow in 2011, was again pressured by significant working capital usage and increased capital spending. As a result, full- year free cash flow was negative $285 million, down from negative $20 million in 2010. Helping to preserve liquidity, GT issued $500 million of new mandatory convertible preferred stock in March 2011 and Eur250 million of new notes at GDTE in April 2011. A portion of the preferred stock proceeds was also used to redeem $350 million of the company's 10.5% senior unsecured notes due 2016. Looking ahead, Fitch expects free cash flow to remain under pressure, and potentially negative, in 2012 and 2013 as the company invests in its profitability improvement program. Furthermore, significant cash pension contributions exceeding $500 million and over $1 billion in annual capital expenditures will create headwinds that will be challenging to overcome. If global market conditions deteriorate from current projections, the company could consider increasing its debt level or engaging in another equity offering to bolster its liquidity position in the intermediate term. Any drop in tire demand stemming from an economic slowdown could also lead GT to re-think its profitability improvement program, given the cash outlays over the next several years required to accomplish it. The rating of 'BB+/RR1' on GT's and GDTE's secured credit facilities reflects their substantial collateral coverage and outstanding recovery prospects in the 90% to 100% range in a distressed scenario. On the other hand, the rating of 'B/RR5' on GT's unsecured notes reflects Fitch's expectation that recoveries on those notes would be below average, in the 10% to 30% range, in a distressed scenario. The relatively low level of expected recovery for the unsecured debt is due to the substantial amount of higher-priority secured debt in the company's capital structure. Fitch also notes that in a distressed scenario, GT's substantial pension obligations could potentially depress recovery prospects further for the company's unsecured creditors. Fitch has assigned a rating of 'BB/RR2' to GDTE's Eur250 million 6.75% senior unsecured notes due 2019. The rating is higher than the rating on GT's unsecured notes due to the structural seniority of the GDTE notes. GDTE's notes are guaranteed on an unsecured basis by GT and GT's subsidiaries that also guarantee the parent company's secured revolver and second-lien term loan. GT's senior unsecured notes also include guarantees from the same parent company subsidiaries, but they are not guaranteed by GDTE. In addition, the lower level of secured debt at GDTE versus that at GT also strengthens the recovery prospects for the GDTE notes. Fitch notes that GDTE's credit facility and its senior unsecured notes are subject to cross-default provisions relating to GT's material indebtedness. Fitch could revise GT's Rating Outlook to Positive or the ratings could be upgraded in the intermediate term if stronger margins result in positive free cash flow generation on a sustainable basis and leverage continues to decline. A meaningful reduction in debt also could result in a positive rating action, but this is unlikely in the near term, given the lack of significant debt maturities. A substantial improvement in the funded status of GT's pension plans would also contribute to a positive rating action. On the other hand, GT's Rating Outlook could be revised to Negative or the ratings downgraded if a decline in tire demand or an increase in production costs results in a prolonged period of negative free cash flow generation and a significant weakening in the company's credit protection metrics. Of particular focus would be any decline in the company's cash balance below $1 billion for an extended period. Fitch has taken the following rating actions on GT and GDTE: GT -- IDR affirmed at 'B+' -- Secured bank credit facility rating affirmed at 'BB+/RR1'; -- Secured second-lien term loan rating affirmed at 'BB+/RR1'; -- Senior unsecured rating affirmed at 'B/RR5'; -- Rating Outlook Stable. GTDE -- IDR affirmed at 'B+'; -- Secured bank credit facility rating affirmed at 'BB+/RR1'; -- Senior unsecured rating assigned at 'BB/RR2'; -- Rating Outlook Stable. GREAT PLAINS: Seeks to Employ Walthall Drake as Accountants ----------------------------------------------------------- Great Plains Exploration LLC asks the U.S. Bankruptcy Court for the Western District of Pennsylvania for authority to employ James E. Sprague and Walthall, Drake & Wallace, LLP, as its accountants to assist the Debtor by providing advise on financial and tax matters, as well as preparing certain tax returns, reports and calculations. The Debtor assures the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Great Plains Exploration, Oz Gas and John D. Oil Mentor, Ohio-based Great Plains Exploration LLC engaged primarily in the acquisition, development, production, exploration, and sale of oil and gas. Great Plains primarily sells its oil and gas products to gas marketing companies and refiners. Oz Gas, LTD. and Great Plains filed voluntary Chapter 11 petitions (Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10059) on Jan. 11, 2012. John D. Oil and Gas Company filed a voluntary Chapter 11 petition (Bankr. W.D. Pa. Case No. 12-10063) on Jan. 13, 2012. Judge Thomas P. Agresti oversees the cases. Each of Great Plains and Oz Gas estimated $10 million to $50 million in assets and debts. The petitions were signed by Richard M. Osborne, CEO. John D. Oil, also based in Mentor, Ohio, was in the business of acquiring, exploring, developing, and producing oil and natural gas in Northeast Ohio. It had 58 producing wells. Its balance sheet at Sept. 30, 2011, showed $8.12 million in total assets, $12.92 million in total liabilities and a $4.79 million total deficit. On June 18, 2010, Oz Gas and Great Plains, along with other non- debtor parties including Richard M. Osborne and The Richard M. Osborne Trust, entered into a Forbearance Agreement with RBS Citizens, N.A., dba Charter One, which asserts $30 million in claims, pursuant to which RBS agreed to forbear from enforcing its rights and remedies under the loan agreements until July 1, 2011. RBS claims that the Forbearance Agreement expired on July 1, 2011, and the lines of credit have not been paid off. Great Plains said all required payments under the Forbearance Agreement were made as agreed. On Nov. 21, 2011, at the request of RBS, a receiver was appointed for all three corporate Debtors, in the United States District Court for the Northern District of Ohio at case No. 11-cv-2089- CAB. District Judge Christopher A. Boyko issued an order appointing Mark E. Dottore as receiver. The Order Appointing Receiver was appealed to the Sixth Circuit Court of Appeals on Dec. 19, 2011, and the appeal is currently pending. GREAT PLAINS: Quinn Buseck Steps Down as Receiver's Counsel ----------------------------------------------------------- The Hon. Judge Thomas P. Agresti of the U.S. Bankruptcy Court for the Western District of Pennsylvania has authorized Lawrence C. Bolla, Esq., of Quinn, Buseck, Leemhuis, Toohey, & Kroto, Inc., to withdraw as local counsel for Mark E. Dottore, receiver for Great Plains Exploration, LLC. Mr. Bolla was retained as local counsel for the Receiver for the limited purpose of filing a response to the Debtor's Motion for Turnover of Property. Pursuant to the agreement between the Receiver and the Debtor and the Court's Order dated Jan. 19, 2012, the Receiver has turned over all property of the Debtor in its possession and, other than a potential motion relating to the Receiver's unpaid costs and fees, the Receiver's involvement in the matter has ended. The Receiver continues to be represented by Robert T. Glickman, Esq., and Robert R. Kracht, Esq., of McCarthy, Lebit, Crystal & Liffman Co., LPA. As reported in the Troubled Company Reporter on Jan. 18, 2012, Great Plains asked the Bankruptcy Court to compel the receiver to turn over the Debtors' assets. The Debtors argued that the receiver is the "custodian" being referred to in 11 U.S.C. Sec. 543 and therefore required to turn over all property and control to the Debtors. On June 18, 2010, Oz Gas and Great Plains, along with other non- debtor parties including Richard M. Osborne and The Richard M. Osborne Trust, entered into a Forbearance Agreement with RBS Citizens, N.A., dba Charter One, which asserts $30 million in claims, pursuant to which RBS agreed to forbear from enforcing its rights and remedies under the loan agreements until July 1, 2011. RBS claims that the Forbearance Agreement expired on July 1, 2011, and the lines of credit have not been paid off. Great Plains said all required payments under the Forbearance Agreement were made as agreed. On Nov. 21, 2011, at the request of RBS, the receiver was appointed for all three corporate Debtors, in the United States District Court for the Northern District of Ohio at case No. 11- cv-2089-CAB. The Order Appointing Receiver was appealed to the Sixth Circuit Court of Appeals on Dec. 19, 2011, and the appeal is currently pending. About Great Plains Exploration, Oz Gas and John D. Oil Mentor, Ohio-based Great Plains Exploration LLC engaged primarily in the acquisition, development, production, exploration, and sale of oil and gas. Great Plains primarily sells its oil and gas products to gas marketing companies and refiners. Oz Gas, LTD. and Great Plains filed voluntary Chapter 11 petitions (Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10059) on Jan. 11, 2012. John D. Oil and Gas Company filed a voluntary Chapter 11 petition (Bankr. W.D. Pa. Case No. 12-10063) on Jan. 13, 2012. Judge Thomas P. Agresti oversees the cases. Robert S. Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to the Debtors. Each of Great Plains and Oz Gas estimated $10 million to $50 million in assets and debts. The petitions were signed by Richard M. Osborne, CEO. John D. Oil, also based in Mentor, Ohio, was in the business of acquiring, exploring, developing, and producing oil and natural gas in Northeast Ohio. It had 58 producing wells. Its balance sheet at Sept. 30, 2011, showed $8.12 million in total assets, $12.92 million in total liabilities and a $4.79 million total deficit. GREAT PLAINS: Has Until March 26 to File Schedules -------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Pennsylvania extended until March 26, 2012, the deadline for Great Plains Exploration LLC to file its schedules of assets and liabilities and statement of financial affairs. No further extensions will be granted. About Great Plains Exploration, Oz Gas and John D. Oil Mentor, Ohio-based Great Plains Exploration LLC engaged primarily in the acquisition, development, production, exploration, and sale of oil and gas. Great Plains primarily sells its oil and gas products to gas marketing companies and refiners. Oz Gas, LTD. and Great Plains filed voluntary Chapter 11 petitions (Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10059) on Jan. 11, 2012. John D. Oil and Gas Company filed a voluntary Chapter 11 petition (Bankr. W.D. Pa. Case No. 12-10063) on Jan. 13, 2012. Judge Thomas P. Agresti oversees the cases. Robert S. Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to the Debtors. Each of Great Plains and Oz Gas estimated $10 million to $50 million in assets and debts. The petitions were signed by Richard M. Osborne, CEO. John D. Oil, also based in Mentor, Ohio, was in the business of acquiring, exploring, developing, and producing oil and natural gas in Northeast Ohio. It had 58 producing wells. Its balance sheet at Sept. 30, 2011, showed $8.12 million in total assets, $12.92 million in total liabilities and a $4.79 million total deficit. HAWKER BEECHCRAFT: Bank Debt Trades at 26% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Hawker Beechcraft is a borrower traded in the secondary market at 74.10 cents-on- the-dollar during the week ended Friday, Feb. 17, 2012, a drop of 2.71 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on March 26, 2014, and carries Moody's Caa2 rating and Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 164 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. The Company's balance sheet at Sept. 30, 2011, showed $3.10 billion in total assets, $3.49 billion in total liabilities and a $383.20 million total deficit. * * * As reported by the Troubled Company Reporter on Sept. 16, 2011, Moody's Investors Service has lowered all the credit ratings, including the corporate family rating to Caa3 from Caa2, of Hawker Beechcraft Acquisition Company LLC. The rating outlook is negative. The downgrades reflect Hawker Beechcraft's mounting retained deficit and Moody's view that the soft economy dims chances for profitability anytime soon. Although limited near-term debt maturities exist, with the prospect of further losses Moody's views the capital structure to be unsustainable. Pronounced risk that some form of restructuring of the company's debt obligations may occur underscores the negative rating outlook. Softness in most developed economies should constrain demand for the smaller and mid-sized cabin aircraft that comprise the company's Business and General Aviation product portfolio. While management has aggressively lowered overhead and cut production costs, the revenue outlook seems weak. As of June 30, 2011, the debt to book capital ratio was 114% and the trailing 12-month EBITDA to interest ratio was 0.2x (Moody's adjusted basis) In the Dec. 5, 2011 edition of the TCR, Standard & Poor's Ratings Services lowered its ratings on Hawker Beechcraft, including the corporate credit rating to 'CCC' from 'CCC+'. "The downgrade reflects Hawker's continued poor credit protection measures and tighter liquidity resulting from declining revenues, significant (albeit improving) losses, and weak cash generation," said Standard & Poor's credit analyst Christopher DeNicolo. "We have concerns about the company's ability to maintain covenant compliance." HAWKER BEECHCRAFT: Bank Debt Trades at 21% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Hawker Beechcraft is a borrower traded in the secondary market at 78.55 cents-on- the-dollar during the week ended Friday, Feb. 17, 2012, a drop of 0.33 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 850 basis points above LIBOR to borrow under the facility. The bank loan matures on March 26, 2014, and carries Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 164 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. The Company's balance sheet at Sept. 30, 2011, showed $3.10 billion in total assets, $3.49 billion in total liabilities and a $383.20 million total deficit. * * * As reported by the Troubled Company Reporter on Sept. 16, 2011, Moody's Investors Service has lowered all the credit ratings, including the corporate family rating to Caa3 from Caa2, of Hawker Beechcraft Acquisition Company LLC. The rating outlook is negative. The downgrades reflect Hawker Beechcraft's mounting retained deficit and Moody's view that the soft economy dims chances for profitability anytime soon. Although limited near-term debt maturities exist, with the prospect of further losses Moody's views the capital structure to be unsustainable. Pronounced risk that some form of restructuring of the company's debt obligations may occur underscores the negative rating outlook. Softness in most developed economies should constrain demand for the smaller and mid-sized cabin aircraft that comprise the company's Business and General Aviation product portfolio. While management has aggressively lowered overhead and cut production costs, the revenue outlook seems weak. As of June 30, 2011, the debt to book capital ratio was 114% and the trailing 12-month EBITDA to interest ratio was 0.2x (Moody's adjusted basis) In the Dec. 5, 2011 edition of the TCR, Standard & Poor's Ratings Services lowered its ratings on Hawker Beechcraft, including the corporate credit rating to 'CCC' from 'CCC+'. "The downgrade reflects Hawker's continued poor credit protection measures and tighter liquidity resulting from declining revenues, significant (albeit improving) losses, and weak cash generation," said Standard & Poor's credit analyst Christopher DeNicolo. "We have concerns about the company's ability to maintain covenant compliance." HCA HOLDINGS: Bank of America Discloses 62.2% Equity Stake ---------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Bank of America Corporation, Merrill Lynch & Co., Inc, et al., disclosed that, as of Dec. 31, 2011, they beneficially own 271,520,533 shares of common stock of HCA Holdings, Inc., representing 62.2% of the shares outstanding. The calculation of the percentage is based on 436,557,300 shares of voting common stock outstanding as of Oct. 31, 2011, as reported in the HCA Holdings, Inc., Quarterly report on Form 10-Q for the period ended Sept. 30, 2011, as filed with the Securities and Exchange Commission on Nov. 9, 2011. A full-text copy of the amended 13G is available for free at http://is.gd/0jyXam 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. HCA HOLDINGS: KKR Millennium Discloses 62.2% Equity Stake --------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, KKR Millennium Fund L.P. and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 271,348,910 shares of common stock of HCA Holdings, Inc., representing 62.2% of the shares outstanding. The calculation is based on 436,557,300 shares of common stock outstanding as of Oct. 31, 2011, as reported in the HCA Holdings, Inc. Quarterly Report on Form 10-Q for the period ended Sept. 30, 2011, as filed with the Securities and Exchange Commission on Nov. 9, 2011. Hercules Holding II, LLC, held 271,348,910 Shares as of Dec. 31, 2011. The units of Hercules Holding II, LLC, are held by a private investor group, including affiliates of each of Bain Capital Investors, LLC and Kohlberg Kravis Roberts & Co. L.P. and affiliates of Dr. Thomas F. Frist, Jr. the founder of the Issuer, all of whom are parties to the limited liability company agreement of Hercules Holding II, LLC. A full-text copy of the filing is available for free at: http://is.gd/P5WJYM 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. HYLAND SOFTWARE: S&P Affirms 'B+' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Westlake, Ohio-based enterprise content management (ECM) software company Hyland Software Inc. "We lowered the bank loan rating on the first-lien term loan to 'B+' from 'BB-' and revised the recovery rating to '3' from '2'. The '3' recovery rating indicates that lenders can expect meaningful (50%-70%) recovery in the event of a payment default," S&P said. "The ratings on Hyland reflect its limited operational scale and relatively modest competitive position, with respect to much larger competitors with significantly more resources in the fragmented ECM industry," said Standard & Poor's credit analyst Jacob Schlanger. "The company's predictable recurring revenue stream, stemming from high license renewal rates and favorable business segment growth, provides stability for the rating. Its limited revenue and EBITDA base and current ownership by a private-equity sponsor limit a possible upgrade. The lower rating on the bank loan reflects its increased amount and the reduced recovery that would be expected in the event of a payment default." "Hyland's outlook is stable, reflecting its predictable operating performance and aggressive leverage that will rise from present levels due to the contemplated dividend but is likely to decline over the medium term. The company's second-tier position in the ECM market, limited scale, and financial ownership limit a possible upgrade in the near term," S&P said. "We could lower the rating to 'B' if customer defections/losses or pricing pressure related to increased competition in the marketplace or a weak economy result in margin erosion, lower free cash flow generation, and debt leverage sustained at the 6x area," S&P said. INNER CITY: Asset Sale Used to Dodge $31MM Tax Bill, Feds Allege ---------------------------------------------------------------- Pete Brush at Bankruptcy Law360 reports that Federal prosecutors took the unusual step Wednesday of ripping Inner City Media Inc.'s plan to sell itself for $180 million to creditors including billionaire Ron Burkle, calling the proceeding a bad-faith attempt to dodge $31 million in taxes. Lenders including Burkle's Yucaipa Corporate Initiatives II LP, who are owed $250 million by the insolvent radio broadcaster and have a $180 million credit bid on the table, are trying use the bankruptcy asset sale process to avoid taking a major tax hit, the Federal prosecutors said. About Inner City Media Corp. On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit Facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. ISAACSON STRUCTURAL: Hearing on Cash Collateral Use Set Today ------------------------------------------------------------- The Hon. J. Michael Deasy of the U.S. Bankruptcy Court for the District of New Hampshire will convene a hearing today, Feb. 21, to consider granting Isaacson Steel, Inc., and Isaacson Structural Steel, Inc., further access to cash collateral. A prior order by the bankruptcy judge authorized the Debtors to access cash collateral until Feb. 24, 2012. The Debtors are using the cash collateral to finance their business operations. As adequate protection from diminution in value of the lenders' collateral, the Debtor will: 1. pay interest due New Hampshire Business Finance Authority on account of its loan; 2. pay Passumpsic Savings Bank $15,000 as adequate protection for the month of February 2012; 3. grant BFA and Passumpsic replacement liens in all postpetition property of the estate. BFA, in its objection, stated that its lien must be adequately protected. BFA also did not consent the $30,000 adequate protection payment to Passumpsic Savings Bank from either the BFA cash collateral or the proceeds of the BFA loan. 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. JACKSON GREEN: Adequate Protection Deal Extended Until March 14 --------------------------------------------------------------- The Hon. Thomas S. Utschig of the U.S. Bankruptcy Court for the Western District of Wisconsin approved a stipulation entered between Jackson Green LLC and Wells Fargo Bank, N.A., extending the interim stipulation for adequate protection to March 14. The third stipulation with Wells Fargo, as trustee for the registered holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage pass-Through Certificates, Series 2006-C4, provides that: 1. that the interim stipulation for adequate protection until Aug. 17, 2011, that was filed on July 20, 2011, is extended until March 14, 2012; 2. the interim stipulation for adequate protection until Aug. 17, 2011, is also in effect and retroactive from Aug. 17 to March 14; and 3. that pursuant to the Court order dated Oct. 11, 2011, the tax payment made by Jackson Green LLC remains credited towards the monthly adequate protection payment due Nov. 20, 2011. About Jackson Green Based in Minocqua, Wisconsin, Jackson Green LLC owns a commercial office building and parking lot in Chicago. Jackson Green originally filed for Chapter 11 bankruptcy (Bankr. W.D. Wis. Case No. 09-10099) on Jan. 9, 2009. The Court confirmed the Debtor's chapter 11 plan on May 18, 2010. Jackson Green returned to bankruptcy (Bankr. W.D. Wis. Case No. 11-14038) on June 23, 2011. Judge Thomas S. Utschig presides over the so-called Chapter 22 case. The Law Office of Terrence J. Byrne serves as the Debtor's Chapter 22 counsel. In its schedules, the Debtor disclosed $25,194,530 in assets and $22,838,968 in liabilities. The petition was signed by Paula Heyes, member. Secured lender Wells Fargo is represented by lawyers at Foley & Lardner LLP. The United States Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Jackson Green LLC, have expressed interest in serving on a committee. JACKSON GREEN: Cash Collateral Hearing Rescheduled to March 14 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Wisconsin has rescheduled to March 14, 2012, at 11:00 a.m., the hearing to consider Jackson Green LLC's request for use of the cash collateral which Wells Fargo Bank, N.A. asserts and interest. Wells Fargo serves as trustee for the registered Holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2006-C4. The evidentiary hearing was previously scheduled for Jan. 18. About Jackson Green Based in Minocqua, Wisconsin, Jackson Green LLC owns a commercial office building and parking lot in Chicago. Jackson Green originally filed for Chapter 11 bankruptcy (Bankr. W.D. Wis. Case No. 09-10099) on Jan. 9, 2009. The Court confirmed the Debtor's chapter 11 plan on May 18, 2010. Jackson Green returned to bankruptcy (Bankr. W.D. Wis. Case No. 11-14038) on June 23, 2011. Judge Thomas S. Utschig presides over the so-called Chapter 22 case. The Law Office of Terrence J. Byrne serves as the Debtor's Chapter 22 counsel. In its schedules, the Debtor disclosed $25,194,530 in assets and $22,838,968 in liabilities. The petition was signed by Paula Heyes, member. Secured lender Wells Fargo is represented by lawyers at Foley & Lardner LLP. The United States Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Jackson Green LLC, have expressed interest in serving on a committee. JASPERS ENTERPRISES: Wants to Use Red Roof Inn Revenues ------------------------------------------------------- Jaspers Enterprises, Inc., will appear before the Court Feb. 22 at 10:00 a.m. to request authority to use cash collateral of The Bank of the Ozarks, and enter into related financing documents. The Bank of the Ozarks is the Debtor's secured creditor for its Red Roof Inn location. As of the Petition Date, the Debtor owed the Bank $2,060,000 under its agreements plus interest. The Debtor said it requires the use of cash collateral to continue its business operations and to pay its regular daily expenses, including utilities and its other costs of doing business. The Debtor said the Bank's interest in cash collateral is adequately protected through payment of the Bank's loan in the ordinary course of business and granting a replacement lien in new inventory. At the Feb. 22 hearing, the Debtor will also seek Court permission to assume an agreement with A-1 Contract Staffing. About Jaspers Enterprises Jaspers Enterprises, Inc., filed a bare-bones Chapter 11 petition (Bankr. E.D. Ms. Case No. 12-41073) in St. Louis, Missouri on Feb. 13, 2012. Jaspers Enterprises owns four Missouri hotels -- the Wingate in Maryland Heights plus the Days Inn property, the Howard Johnson, and the Red Roof Inn, all located in Branson. The Wingate hotel in Maryland Heights is under receivership with Midas Hospitality LLC as the receiver. Maryland Heights, Missouri-based Jaspers estimated assets of up to $50 million and debts of up to $10 million. It says that debts are primarily business debts. The largest unsecured creditors are Days Inn Worldwide, which is owed $361,760, and Wingate Inns International Inc., owed $252,000 for a trade debt. Judge Charles E. Rendlen III presides over the case. Robert E. Eggmann, Esq., and Thomas H. Riske, Esq., at Desai Eggmann Mason LLC, serve as the Debtor's counsel. The petition was signed by Keith Jaspers, president. Creditor The Bank of Missouri is represented by: Michelle L. Clardy, Esq. Matthew S. Layfield, Esq. POLSINELLI SHUGHART PC 100 South Fourth Street, Suite 1000 St. Louis, MO 63102 E-mail: mclardy@polsinelli.com JASPERS ENTERPRISES: Has Interim OK to Hire Desai Eggmann --------------------------------------------------------- Jasper Enterprises, Inc., won interim Court authority to employ Desai Eggmann Mason LLC as bankruptcy counsel. The Court will hold a further hearing on the employment at the Feb. 22 hearing. Robert E. Eggmann, Esq., and Thomas H. Riske, Esq. -- reggmann@demlawllc.com and triske@demlawllc.com -- will lead the engagement. As of the Petition Date, the firm has been paid $8,829 for services performed prior to the Petition Date. The firm is currently holding $17,171 as a retainer. The hourly rates of paralegals and associates of DEM who are to be involved in the case range from $180 per hour to $320 per hour. Mr. Eggmann, a principal at the firm, attests that his firm does not hold or represent any interest adverse to the estate. About Jaspers Enterprises Jaspers Enterprises, Inc., filed a bare-bones Chapter 11 petition (Bankr. E.D. Ms. Case No. 12-41073) in St. Louis, Missouri on Feb. 13, 2012. Jaspers Enterprises owns four Missouri hotels -- the Wingate in Maryland Heights plus the Days Inn property, the Howard Johnson, and the Red Roof Inn, all located in Branson. The Wingate hotel in Maryland Heights is under receivership with Midas Hospitality LLC as the receiver. Maryland Heights, Missouri-based Jaspers estimated assets of up to $50 million and debts of up to $10 million. It says that debts are primarily business debts. The largest unsecured creditors are Days Inn Worldwide, which is owed $361,760, and Wingate Inns International Inc., owed $252,000 for a trade debt. Judge Charles E. Rendlen III presides over the case. The petition was signed by Keith Jaspers, president. Creditor The Bank of Missouri is represented by Michelle L. Clardy, Esq., and Matthew S. Layfield, Esq., at Polsinelli Shughart PC. JASPERS ENTERPRISES: Sec. 341 Creditors' Meeting Set for March 13 ----------------------------------------------------------------- The Office of the U.S. Trustee in St. Louis, Missouri, will hold a Meeting of Creditors pursuant to 11 U.S.C. Sec. 341(a) in the Chapter 11 case of Jaspers Enterprises, on March 13, 2012, at 11:30 a.m. at U.S. Trustee Meeting Room, Suite 6.365A. Jaspers Enterprises, Inc., filed a bare-bones Chapter 11 petition (Bankr. E.D. Ms. Case No. 12-41073) in St. Louis, Missouri on Feb. 13, 2012. Jaspers Enterprises owns four Missouri hotels -- the Wingate in Maryland Heights plus the Days Inn property, the Howard Johnson, and the Red Roof Inn, all located in Branson. The Wingate hotel in Maryland Heights is under receivership with Midas Hospitality LLC as the receiver. Maryland Heights, Missouri-based Jaspers estimated assets of up to $50 million and debts of up to $10 million. It says that debts are primarily business debts. The largest unsecured creditors are Days Inn Worldwide, which is owed $361,760, and Wingate Inns International Inc., owed $252,000 for a trade debt. Judge Charles E. Rendlen III presides over the case. Robert E. Eggmann, Esq., and Thomas H. Riske, Esq., at Desai Eggmann Mason LLC, serve as the Debtor's counsel. The petition was signed by Keith Jaspers, president. Creditor The Bank of Missouri is represented by Michelle L. Clardy, Esq., and Matthew S. Layfield, Esq., at Polsinelli Shughart PC. JMC STEEL: S&P Raises Corporate Credit Rating to 'B+' ----------------------------------------------------- Standard & Poor's Rating Services raised its corporate credit rating on Chicago-based JMC Steel Group Inc. (JMC) to 'B+' from 'B'. JMC is seeking to add an additional $100 million to its existing $400 million senior secured term loan and an additional $150 million to its existing $725 million senior unsecured notes. The company will use the proceeds for general corporate purposes, which may include its potential acquisition of Lakeside Steel Inc. The outlook is stable. "At the same time, we are raising our issue-level rating on the company's senior secured term loan to 'BB' from 'BB-'. The recovery rating on the senior secured term loan remains '1', indicating our expectations for a very high (90% to 100%) recovery in the event of a payment default. We are also affirming our 'B' issue-level rating on the company's senior unsecured notes. Due to the combination of the increased senior secured and senior unsecured debt in the capital structure following the proposed transactions, we are revising our recovery rating to '5', indicating our expectations for a modest (10% to 30%) recovery in the event of a payment default, from '4'," S&P said. "The upgrade reflects our view that, over the next couple of years, JMC's credit measures are likely to be sustained at levels in line with the 'B+' rating, despite its exposure to steel price volatility and higher debt levels, due to vigilant cost management and efficiency measures," said Standard & Poor's credit analyst Gayle Bowerman. "We expect JMC to maintain adjusted leverage of 4x to 5x, which incorporates the company's acquisitive growth strategy and our view of its 'weak' business profile, as our criteria defines the term. The upgrade also reflects our assessment that we expect the company's liquidity position to be 'strong,' under our criteria, in the next several quarters, given JMC's history of positive cash flow generation and generally high levels of availability under its asset-based revolving credit facility." "The rating incorporates our expectation that demand for JMC's structural tubing, standard pipe, and electrical conduit products will likely increase slightly as construction markets and the general economy continue to recover. Furthermore, the company's recently announced its plans to acquire Lakeside Steel--this would expand its business mix into specialty oil country tubular goods (OCTG). Although we have not factored any immediate benefits into our rating, we expect the acquisition will have a positive effect on sales and margin over the longer term. Our assumptions also incorporate a slow ramp-up in production and higher costs in the initial years for the acquired assets, which include a partially constructed OCTG tubing and finishing facility in Alabama," S&P said. "Overall, we estimate that adjusted EBITDA will exceed $300 million in 2012 and expect adjusted EBITDA growth of around 15% in 2013 as the acquisition contributes to financial performance and slowly improving end markets result in better volumes and earnings. Key risks to achieving these results include slower- than-expected growth in construction and the overall economy, greater-than-expected steel price volatility, increased competition from imports, and the inability of the company to integrate the acquisition or realize benefits in the competitive OCTG market," S&P said. "Pro forma for the proposed transaction, we expect JMC's total adjusted debt of approximately $1.5 billion. We expect 2012 adjusted leverage to be in the 4.5x to 5x range and to improve closer to 4x in 2013 due to a combination of higher earnings and debt paydown from excess cash flow as required under the term loan agreement. We expect funds from operations (FFO) to debt to be in the 12% to 15% range in both 2012 and 2013--metrics which we view as appropriate for our assessment of the company's 'aggressive' financial risk profile," S&P said. "The rating and outlook reflect our expectation that JMC will continue to improve its credit metrics over the next 12-18 months as it integrates the Lakeside Steel acquisition, assuming moderate steel price volatility. We believe that JMC will maintain leverage of 4x to 5x, even after considering its acquisition-driven growth strategy. Our rating and outlook also incorporates the company's strong liquidity and improving business mix," S&P said. "A negative rating action could occur if credit measures were to weaken from current levels such that adjusted leverage was likely to be maintained above 5x and FFO to debt falls below 12%," Ms. Bowerman continued. "This could occur if our outlook for a recovery in construction is delayed further or if JMC is unable to pass through raw material costs due to a decline in demand. A negative rating action could also occur if the company were to pursue a more aggressive financial policy with regard to debt- financed acquisitions." "A positive rating action seems less likely in the near term, given our view of JMC's weak business profile, private ownership structure, and our expectation that the company will maintain its aggressive financial risk profile," S&P said. "However, one could occur if end markets rebound more quickly than we expect, if JMC reduces its leverage substantially, or if the company demonstrates sustainable growth prospects over the next few years," S&P said. JOY GLOBAL: Moody's Issues Summary Credit Opinion ------------------------------------------------- This release represents Moody's Investors Service's summary credit opinion on Joy Global Inc. (Joy) and includes certain regulatory disclosures regarding its ratings. This release does not constitute any change in Moody's ratings or rating rationale for Joy. Moody's current ratings on Joy Global Inc. are: Senior Unsecured domestic currency ratings of Baa2 Backed Senior Unsecured Shelf domestic currency ratings of (P)Baa2 Backed Subordinate Shelf domestic currency ratings of (P)Baa3 Backed Preferred Shelf domestic currency ratings of (P)Ba1 Backed Preferred Shelf -- PS2 domestic currency ratings of (P)Ba1 RATINGS RATIONALE Joy's Baa2 senior unsecured rating is supported by its strong profitability and cash flow metrics, leading market position in several mining equipment product segments, large installed base of equipment, the stability and higher profitability of its aftermarket revenue stream, and its global presence and positioning to serve growing emerging markets such as China, India and Russia. Factors that constrain Joy's rating are dependence on cyclical mining industry and commodity markets, its underfunded pension plans, and the large proportion of net sales and assets represented by the company's foreign subsidiaries, which do not guarantee the notes, and which introduces foreign exchange risk. RATING OUTLOOK Joy has a stable rating outlook. The stable outlook reflects its strong competitive position, the stability associated with its aftermarket business, and strong debt protection measures. WHAT COULD CHANGE THE RATING UP Factors that could lead to an upgrade include the continuation of favorable mining industry fundamentals while, at the same time, demonstrated discipline by the company with respect to financial policies and acquisitions. WHAT COULD CHANGE THE RATING DOWN A rating downgrade is unlikely in the intermediate term. However, a slippage in Joy's sales and cash flow, a shift in the competitive landscape or market share, a significant increase in debt, large equity distributions, or a large debt-financed acquisition, unless accompanied by a commensurate increase in cash flow, could trigger negative rating pressure. The principal methodology used in rating Joy was the Global Manufacturing Industry Methodology published in December 2010. KAUFMAN BROS: Files for Bankruptcy to Liquidate ----------------------------------------------- Kaufman Bros. LP, the minority-owned investment bank that helped unwind U.S. stakes in bailed-out financial companies, filed a Chapter 7 petition (Bankr. S.D.N.Y. Case No. 12-10664) in Manhattan on Feb. 17. New York-based Kaufman estimated assets and debts of less than $10 million. Chapter 7 proceedings let companies liquidate their assets while being protected from creditors. Kaufman was founded in 1995 and billed itself as "the country's largest minority-owned and operated investment banking and advisory firm" focused on technology, media, telecommunications, green technology and health care. The firm said in June that it helped advisory clients raise more than $50 billion since 1999. According to Bloomberg News, Kaufman shuttered operations Jan. 30. Kaufman had assets of $3.26 million and partners' capital of $1.21 million as of Dec. 31, 2010, according to documents filed with regulators. Kaufman's Web site, before it was disabled, said the firm participated in public offerings of Citigroup Inc. and American International Group Inc. as the U.S. Treasury Department disposed of stakes accumulated when it bailed out the firms during the financial crisis, according to Bloomberg. Kaufman Bros is represented by: Adam L. Rosen, Esq. SILVERMAN ACAMPORA LLP 100 Jericho Quadrangle, Suite 300 Jericho, NY 11753 Tel: (516) 479-6300 Fax: (516) 479-6301 E-mail: filings@spallp.com KENTUCKIANA MEDICAL: Granger to Invest $1.5 Million in Hospital --------------------------------------------------------------- Ben Zion Hershberg of The Courier-Journal reports that Granger Group, a Michigan-based real estate and development company, has proposed investing $1.5 million to add 20 private rooms at Kentuckiana Medical Center. Kentuckiana has been operating with only 26 beds, rather than the planned 46. Granger's company also would assume about $21 million in debt. A hearing was slated Feb. 14 to consider approval of the disclosure statement explaining Kentuckiana's prior bankruptcy exit plan. At the hearing, Kentuckiana's lawyers presented to the Court the new investor as well as a new plan, according to the report. Courier-Journal relates U.S. Bankruptcy Court Judge Basil Lorch III has given Kentuckiana until March 16 to provide details of the plan. Courier-Journal recounts that Kentuckiana had been working to secure a $37 million investment from the Argenta Group LLC, which had said it could provide the financing at a relatively low interest rate if a local government would participate. The Argenta plan called for either Clark County or Clarksville government to sign a lease for the hospital, with the hospital to be subleased to the physicians who work there. The lease was to be guaranteed by another financial organization, limiting the risk to local government. According to Courier-Journal, Eli Hallal, a doctor and investor in Kentuckiana, said at the Feb. 14 hearing that the participation of local government couldn't be secured in time to put together a plan to refinance the hospital. So when the Granger Group, a Michigan-based real estate investment and development company, expressed interest, hospital officials and lawyers began working with it, Mr. Hallal said. Clarksville, Indiana-based Kentuckiana Medical Center LLC filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ind. Case No. 10-93039) on Sept. 19, 2010. David M. Cantor, Esq., at Seiller Waterman LLC, represents the Debtor. The Debtor scheduled $9,496,899 in assets, and $25,029,083 in liabilities. Nancy J. Gargula, the U.S. Trustee for Region 10, appointed three members to the Official Committee of Unsecured Creditors in the Debtor's Chapter 11 cases. KENTUCKIANA MEDICAL: Clarksville Town Balks at Lease Deal --------------------------------------------------------- David A. Mann at News and Tribune reports that the Clarksville Town Council in Indiana balked on Feb. 9, 2012, at a lease deal that would have aided Kentuckiana Medical Center. The report says, under the deal, the hospital would have been refinanced by a private third party then leased to Clarksville, which would sublease it back to its owners. The town wouldn't have been responsible for the refinance but the move would have put its credit rating at risk. Town attorneys Chris Sturgeon and Rebecca Lockard advised that doing so could limit the town's ability to pursue other projects. The report relates that the council stopped short of taking a vote to reject the lease proposal, with councilman Bob Popp saying a rejection sends the wrong message. Instead the proposal died for lack of a supporting motion. According to the report, the proposal, which had also been rejected by the Clark County Commissioners in January 2012, is known as a credit-tenant lease. The town would not be giving the hospital money, but instead allowing its credit rating to be used for the refinancing. Clarksville, Indiana-based Kentuckiana Medical Center LLC filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ind. Case No. 10-93039) on Sept. 19, 2010. David M. Cantor, Esq., at Seiller Waterman LLC, represents the Debtor. The Debtor scheduled $9,496,899 in assets and $25,029,083 in liabilities. KLN STEEL: Sues to Recover $2.3-Mil. from Saltgrass, et al. ----------------------------------------------------------- KLN Steel Products Company LLC, et al., filed with U.S. Bankruptcy Court for the Western District of Texas an adversary proceeding seeking to: i) recover amounts invoiced for goods provided to Salt Grass Valley LLC, Calculus, Ltd., and Boolean Holdings Corp.; ii) avoid any purported setoff of non-mutual obligations, setoffs improving position; and iii) restrain and enjoin any post-petition administrative freeze or setoff of amounts due to the Debtors for any accounts receivable for which a valid and unavoidable setoff right does not exist. In addition, the Debtors seek attorney's fees, costs and interest in accordance with applicable law. The Debtors seek a total of $2,045,154 from Saltgrass and $31,871 from Boolean/Ladensohn. The Debtors relate that despite demand, the defendants have failed and refused to pay these liquidated sums for which they have received or will receive payment from the governmental entities to whom furniture was supplied. Saltgrass Valley LLC is a Texas limited liability. Calculus, Ltd. is a Texas Limited Partnership that voluntarily dissolved on Dec. 28, 2011 (the day that Debtors demanded payment of amounts due), and transferred all of its assets to Boolean Holdings Corp., despite not having paid its debt to these bankruptcy estates. Saltgrass, Boolean and Calculus are owned and controlled by David A. Ladensohn. Ladensohn is the registered agent of Calculus. About KLN Steel Products KLN Steel Products Company LLC, Dehler Manufacturing Co. Inc., and Furniture by Thurston manufacture and market high quality furniture for multi-person housing facilities and packaged services for federal government offices and dormitory facilities. They have two manufacturing facilities. One is in San Antonio, Texas, which is consolidated and designed to accommodate high volume fabrication of standard and semi-custom steel furniture and casegoods of high quality for colleges and universities, military quarters, and job corps centers, or wherever high quality, long life, low maintenance furniture is essential. The facility includes a manufacturing facility of more than 170,000 square feet capable of producing substantial projects on a timely basis. The second facility is located in Grass Valley, California, with more than 61,000 square feet dedicated to the manufacturing of wood furniture for military and university housing. KLN Steel filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-12855) on Nov. 22, 2011. Dehler (Case No. 11-12856) and Furniture by Thurston (Case No. 11-12858) filed on the same day. Judge Craig A. Gargotta oversees the case. Patricia Baron Tomasco, Esq., at Jackson Walker LLP, serves as the Debtors' counsel. Horwood Marcus & Berk Chartered serves as their special counsel. Conway MacKenzie, Inc., serves as financial advisor. Each of the Debtors estimated assets and debts of $10 million to $50 million. San Antonio, Texas-based 4200 Pan Am LLC filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-13154) on Dec. 29, 2011. Judge Gargotta oversees the case, taking over from Judge H. Christopher Mott. Patricia Baron Tomasco, Esq., at Jackson Walker LLP, serves as 4200 Pan Am's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Edward J. Herman, manager. 4200 Pan Am is seeking joint administration of its case with those of affiliates Dehler, Furniture By Thurston, and KLN. The Official Committee of Unsecured Creditors in the Chapter 11 cases of KLN Steel Products Company, LLC, et al., is represented by Hall Attorneys, P.C. The Committee tapped Navigant Consulting (PI), LLC as its financial advisor. LEE COUNTY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Lee County Farmers Cooperative Society P.O. Box 120 Giddings, TX 78942 Bankruptcy Case No.: 12-10312 Chapter 11 Petition Date: February 17, 2012 Court: United States Bankruptcy Court Western District of Texas (Austin) Judge: Craig A. Gargotta Debtor's Counsel: Patrick C. Hargadon, Esq. PATRICK C. HARGADON, P.C. P.O. Box 1675 Dripping Springs, TX 78620 Tel: (512) 264-1033 Fax: (512) 264-0947 E-mail: pharglaw@aol.com Scheduled Assets: $5,098,306 Scheduled Liabilities: $2,660,415 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txwb12-10312.pdf The petition was signed by Larry Teinert, president. LEHMAN BROTHERS: Sues Citibank for $2.5 Billion ----------------------------------------------- Lehman Brothers Holdings Inc. sued Citigroup Inc.'s Citibank demanding the return of $2.5 billion in collateral given the bank prior to its bankruptcy filing, Bloomberg News reported. The complaint in part alleges that the transfers to Citibank were fraudulent and may be recovered under bankruptcy law, the report said. Lehman also seeks "hundreds of millions" owed by Citibank and wants to reduce or deny $2 billion of claims the bank filed against the company. It said the bank's $2 billion in claims are inflated, Bloomberg News reported. Citibank reportedly said that it is entitled to $2 billion of the company's cash to secure its claims on the company which would otherwise be unsecured. The so-called setoff "is in violation of the bankruptcy code," Lehman said in the complaint. Danielle Romero-Apsilos, a spokeswoman for Citigroup, said the lawsuit is an "unjustified attempt by the Lehman estates to renege on their obligations to Citi and claw back assets to which they have no right." She pointed out that the bank took the cash to protect itself and its shareholders from loss, Bloomberg News reported. Separately, Citigroup is fighting a $1.3 billion demand by Lehman's brokerage and has settled its differences with the company's European affiliate, according to the report. The case is Lehman v. Citibank, Case No. 12-01044, U.S. Bankruptcy Court, Southern District of New York (Manhattan). About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Disputed Claims Reserve Bid Has Objections ----------------------------------------------------------- Lehman Brothers Holdings Inc. seeks approval from Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York to use non-cash assets as a reserve to cover disputed claims. The move is part of the company's effort to expedite the distributions to creditors under its $65 billion payout plan, and to avoid maintaining large cash reserves for disputed claims which could reduce distributions to creditors. As of January 27, there are still $112 billion in disputed claims that need a reserve, according to court papers. Harvey Miller, Esq., at Weil Gotshal & Manges LLP, in New York, said creditors with "allowed claims" stand to benefit if Lehman covers disputed claims in part with non-cash assets. According to Mr. Miller, Lehman would only be able to distribute $3.3 billion to its creditors if forced to set aside available cash. For its special financing unit, the initial distribution would only be $4.8 billion, he said. If Lehman, however, covers disputed claims with non-cash assets, the first distribution to its creditors would be $4.8 billion, a $1.5 billion increase. Meanwhile, creditors of the special financing unit would see an initial distribution of $5.9 billion, a $1.1 billion increase. "Holders of allowed claims will benefit from the time-value of having larger initial distributions," Mr. Miller said in a motion filed with the bankruptcy court. The Lehman lawyer further said it would be unfair to delay the distributions to creditors who have settled their claims with the company because of the need to maintain large cash reserves for disputed claims. The company, which has already settled as much as $765 billion in claims, believes the disputed claims will be reduced to $59 billion, according to court papers. Lehman also asked the bankruptcy court to approve the terms and conditions governing its use of non-cash assets as a reserve. One of the terms requires the company or any Lehman unit in bankruptcy to retain at least 25% in cash as a reserve for disputed claims. A full-text copy of the proposed order detailing those terms and conditions is available without charge at: http://bankrupt.com/misc/LBHI_NonCashReserveTerms.pdf The motion will be heard on February 22, 2012, before Judge James Peck. Objections were due by February 15, 2012. U.S. Bank, et al., Oppose Lehman Bid to Use Non-Cash Assets Lehman Brothers Holdings Inc.'s bid to use non-cash assets as a reserve to cover disputed claims hit a snag from U.S. Bank N.A. which sees the move as detrimental to some creditors. The company previously sought approval from the U.S. Bankruptcy Court for the Southern District of New York to cover disputed claims in part with non-cash assets to avoid maintaining large cash reserves that could reduce distributions to creditors under its $65 billion payout plan. Lehman said it has about $18 billion of cash available for distribution. U.S. Bank's lawyer, Craig Price, Esq., at Chapman and Cutler LLP, in New York, said they do not agree with the use of non-cash assets because it strips away the guarantees provided to creditors with disputed claims that sufficient available cash would be reserved for them. Mr. Price also said that Lehman proposes to substitute non-cash assets that are "illiquid and have uncertain value." In case Lehman gets court approval, creditors with disputed claims should be provided protection equivalent to holding cash reserves regardless of whether a disputed claim is the first or last to liquidate, Mr. Price said. He added that the floor percentage of the minimum cash reserve must also be increased and funded with available cash. Lehman previously suggested that the company or any of its units in bankruptcy be required to retain at least 25% in cash as a reserve. As of January 27, there are still $112 billion in disputed claims that need a reserve, according to court papers. Lehman, which has already settled as much as $765 billion in claims, believes the disputed claims will be reduced to $59 billion. The use of non-cash assets also drew flak from Commerzbank AG, Golden State Tobacco Securitization Corp. and other creditors. They complained that its approval would increase distribution to one group of creditors at the expense of creditors that hold disputed claims. Lehman, meanwhile, found an ally in the committee representing the company's unsecured creditors. In a court filing, the Official Committee of Unsecured Creditors said all Lehman creditors stand to benefit from the use of non- cash assets to cover disputed claims. "Larger initial distributions will yield comparably larger catch- up distributions, thereby ensuring that the current holders of both allowed and disputed claims receive larger distributions on their allowed claims sooner than later," it said. The same was echoed by Steven Cohn, managing director at Alvarez & Marsal North America LLC. "Because holders of allowed claims will receive greater initial distributions, the amounts that will be paid as catch-up distributions to holders of disputed claims that become allowed will also be greater," Mr. Cohn said in a declaration in support of Lehman's bid to use non-cash assets. Mr. Cohn disclosed that if Lehman gets its way, its general unsecured creditors would have an initial distribution of 2.75%, a 0.42% increase from the 1.93% they would receive if all cash must be reserved for disputed claims. Meanwhile, senior unsecured creditors would have an initial distribution of 2.93%, a 0.88% increase. For Lehman ' special financing unit, its general unsecured creditors would see an initial distribution of 15.32% if cash would be set aside to cover disputed claims. If Lehman, however, covers disputed claims with non-cash assets, the first distribution would be 18.59%, a 3.27% increase. A chart reflecting the amounts of outstanding claims against the Lehman units and the increased distribution that would be made to creditors on a percentage basis through a reserve of non-cash assets in lieu of available cash can be accessed at: http://bankrupt.com/misc/LBHI_Chart1stDistribution.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Insists on $65.6MM Estimate of Swiss Unit Claim ---------------------------------------------------------------- Lehman Brothers Holdings Inc. asked Judge James Peck to overrule the objection of its Swiss affiliate, Lehman Brothers Finance AG, to the proposed estimation of its $15.4 billion in claim against the company. Lehman previously said nothing needs to be reserved for the Swiss subsidiary's claim against the company while $65.5 million is sufficient to cover the maximum that might be allowed against Lehman Brothers Special Financing Inc., LBHI's special financing unit. In court papers, Lehman refuted LB Finance's assertion that the bankruptcy court lacks authority to enforce a provision of the plan, which requires the company to establish a reserve for disputed claims. "Provisions such as Section 8.4 of the plan are commonplace in this and other districts, and courts routinely enforce them," Alfredo Perez, Esq., at Weil Gotshal & Manges LLP, in New York, said. Mr. Perez also said the Swiss subsidiary's demand for an evidentiary hearing and discovery is "out of proportion." He pointed out that a hearing on the merits of the claim is not required since the company is merely requesting an estimation of the claim to establish a reserve. Before Lehman sought approval to estimate the claim, LB Finance made many failed attempts to reach an agreement with its subsidiary. LB Finance, meanwhile, offered to mediate the proper amount of its claim but it was rejected by the company fearing it would take "too long" and "unnecessarily complicate the issue," according to a declaration by Daniel Ehrmann, managing director at Alvarez & Marsal North America, LLC. Lehman also raised similar arguments in responding to objections from U.S. Bank National Association, Citibank N.A. and Wilmington Trust Company. "The trustees are inappropriately seeking an evidentiary hearing, which is only required for a final determination of the trustees' claims," the company said in a court filing. Earlier, Lehman withdrew its request to estimate the claims of the other trustees, Wells Fargo Bank National Association and Bank of America N.A. The Official Committee of Unsecured Creditors expressed support for approval of the proposed estimation, saying the bankruptcy court has authority to estimate the claims for establishing a reserve. The Creditors' Committee also argued that LBF Finance did not object to the plan's estimation mechanism or any of the requirements for establishing reserves. "Now that the plan has been confirmed, [LB Finance] is precluded from collaterally attacking its provisions," the Creditors' Committee said in a court filing. * * * According to a January 26 report by BankruptcyLaw360, Judge James Peck slashed the amount of money that Lehman will have to set aside to cover a disputed $15.4 billion claim by its Swiss unit, finding that Lehman only needed to reserve $3 billion. Prior to the decision, the bankruptcy judge chastised LB Finance, saying it is now acting "incredibly unreasonable in every way" and had filed "grotesquely overstated claims," Law360 reported. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Closes $1.325-Bil. Archstone Deal -------------------------------------------------- Lehman Brothers Holdings Inc. has closed its deal to acquire a $1.325 billion stake in apartment owner Archstone, according to a January 23 regulatory filing with the U.S. Securities and Exchange Commission. Under the deal, Lehman acquired 50% of equity interests held by Bank of America N.A., Banc of America Strategic Ventures Inc., BIH ASN LLC and Archstone Equity Holdings Inc. in various entities affiliated with Archstone for $1.325 billion in cash. Lehman closed the deal on January 20, 2012. The company now owns approximately 73.5% of Archstone, according to the filing. The company entered into the deal pursuant to a right of first offer that it holds pursuant to its existing agreements with the sellers. The right of first offer was triggered when Lehman received a notice of intent to sell interests from the sellers in December 2, 2011, that they were obligated to provide to the company prior to selling any equity interests in Archstone. A full-text copy of the purchase agreement is available without charge at http://ResearchArchives.com/t/s?7788 The deal came more than a week after the U.S. Bankruptcy Court in Manhattan granted Lehman's motion for approval to exercise its right of first offer. The motion was filed after Bank of America and Barclays Plc struck a deal to sell 26.5% of Archstone to Sam Zell's Equity Residential and granted the latter an option to buy the second half of their stake in the apartment owner for $1.33 billion. Last month, Lehman's bid to block Equity Residential from buying part of Archstone was rejected. The company, however, said it can match Equity Residential's offer, which would trigger an option allowing the latter to then buy the other half of the banks' stake. Lehman can match that offer also but would have to put up enough money to overcome a likely price increase. Meanwhile, Equity Residential maintains in its SEC filings that it can "exercise its right to acquire all other interests held" by Bank of America and Barclays in Archstone for $1.3 billion, according to a January 24 report by The AmLaw Daily. If Equity Residential gains control of that final 26.5% stake in Archstone, it could force Lehman to sell it back some assets under a 2010 agreement between all of the real estate investment trust's stakeholders, the report said. Lehman's estate wants Archstone as part of a $65 billion payout plan to exit bankruptcy, which was approved by the bankruptcy court in December 2011. Weil, Gotshal & Manges's real estate co-chair W. Michael Bond and private equity partner Kyle Krpata and Wollmuth Maher & Deutsch's bankruptcy partner, Paul De Filippo, advised Lehman on its bid to increase its stake in Archstone, the AmLaw Daily noted. Equity Residential is advised by Hogan Lovells, which advised Archstone on its LBO back in 2007. Simpson Thacher & Bartlett corporate Patrick Naughton and Peter Pantaleo, head of the firm's bankruptcy practice, are leading a team from the firm advising Barclays in connection with the sale of half of its Archstone stake to Lehman, the report further noted. Kaye Scholer corporate partner Mark Kingsley is leading a team from his firm representing BoA, which also was advised by its assistant general counsel Ileana Stone. Mr. Bond may be reached at: W. Michael Bond, Esq. WEIL GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153 Tel: (212) 310-8035 Fax: (212) 310-8007 E-mail: michael.bond@weil.com Mr. Krpata may be reached at: Kyle Krpata, Esq. WEIL GOTSHAL & MANGES LLP 201 Redwood Shores Parkway Redwood Shores, CA 94065 Tel: (650) 802-3093 Fax: (650) 802-3100 E-mail: kyle.krpata@weil.com Mr. De Filippo may be reached at: Paul De Filippo, Esq. WOLLMUTH MAHER & DEUTSCH 500 Fifth Avenue New York, NY 10110 Tel: (212) 382-3300 Fax: (212) 382-0050 E-mail: pdefilippo@wmd-law.com Simpson Thacher & Bartlett may be reached at: Patrick Naughton, Esq. Peter Pantaleo, Esq. 425 Lexington Avenue New York, NY 10017-3954 Tel: (212) 455-7135 Fax: (212) 455-2502 E-mail: pnaughton@stblaw.com ppantaleo@stblaw.com Kaye Scholer may be reached at: Mark Kingsley, Esq. KAYE SCHOLER 425 Park Avenue New York, NY 10022-3598 Tel: (212) 836-7092 E-mail: mkingsley@kayescholer.com About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Wins Nod to Settle JPMorgan Funds' Claim --------------------------------------------------------- Lehman Brothers Holdings Inc. and the Official Committee of Unsecured Creditors sought and obtained court approval to settle a $710 million claim filed by about 70 investment funds sponsored or managed by JPMorgan Chase Bank, N.A. Under the deal, $699.2 million of the claim will be returned to Lehman, which the company said, will be available for its first distribution to creditors. In return, the investment funds will get $15 million in cash and will retain some collateral. The $699.2 million is currently being held as collateral, which JPMorgan got from Lehman prior to its bankruptcy filing in September 2008. The investment funds filed a $710 million claim against Lehman, arguing that as "affiliates" of JPMorgan Bank, their claim was guaranteed by Lehman and secured by the collateral posted by the company. Lehman, however, objected to the claim and sought a court ruling that the investment funds were not JPMorgan affiliates and therefore they can't benefit from the bank's position as a secured creditor to cover $700 million in claims. Lehman's lawyer, Joseph Pizzurro, Esq., at Curtis Mallet-Prevost Colt & Mosle LLP, in New York, called the deal a "reasonable resolution" of a dispute, adding that the $699.2 million will be used to repay the company's creditors during its first distribution. "Entering into the settlement transaction will also result in significant benefits to the estate by avoiding the costs, delay and litigation risks associated with having to prosecute the issues raised in the claim objection," Mr. Pizzurro said in court papers. Bloomberg News noted that Lehman still has a pending lawsuit accusing JPMorgan, once its main clearing bank, of siphoning $8.6 billion of critical assets in the last few days prior to its September 15, 2008 bankruptcy. A copy of the term sheet detailing the terms of the proposed settlement is available without charge at: http://bankrupt.com/misc/LBHI_TermSheetJPMorganFunds.pdf A full-text copy of the settlement agreement is available for free at http://bankrupt.com/misc/LBHI_JPMorganFundsSettlement.pdf Lehman lawyer L.P. Harrison III, Esq., at Curtis, Mallet-Prevost, Colt & Mosle LLP, New York, said that while Lehman believes it would have prevailed in fighting the claims, it was cognizant of "avoiding the costs, delays and litigation risks," Fox Business reported. The $710 million is actually a rather small chunk of a larger dispute between Lehman and JPMorgan. The company is also trying to slash nearly $30 billion in other claims that JPMorgan filed in its bankruptcy case. The two sides are suing each other, with Lehman alleging that JPMorgan illegally siphoned billions of dollars from the company just before the bankruptcy. JPMorgan countered that the company used "collusion and deception" when it told the bank that an emergency loan it made was backed by $70 billion in securities. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Settles Dispute Over $7.5-Mil. Fee Claim --------------------------------------------------------- Lehman Brothers Holdings Inc. and its creditors settled a dispute over Barclays Bank PLC's claim of a $7.5 million termination fee connected with the company's postpetition financing, Bloomberg News reported. When Lehman filed for bankruptcy protection in September 2008, it arranged a $450 million loan from Barclays. The bankruptcy court gave interim approval to borrow $200 million. Lehman eventually dropped its motion for approval of the loan after seeing that cash was plentiful. Prior to this, the Official Committee of Unsecured Creditors opposed the financing, saying the loan was expensive and unnecessary. In response to the Committee's objection, Barclays argued that the Committee's attempt to renegotiate the terms of the DIP Facility, including the fees payable thereunder, is not only procedurally improper, but is impermissible under the Bankruptcy Code. Barclays pointed out that the Court has found that it acted as good faith lenders and the Committee has not challenged this decision. This, Barclays asserted, precludes the Court from now reversing or modifying the DIP Order, the terms of which Barclays relied upon in extending credit to the Debtors. Barclays claimed it was entitled to a $7.5 million fee. Lehman agreed to settle by paying the bank $6.25 million. Within five (5) business days of completion of the Barclays Transfer, The Committee agreed to withdraw its Motion for Reconsideration with prejudice and Barclays agreed to withdraw its Objection with prejudice immediately after the transfer of the settlement amount. The settlement is formalized in a 9-page stipulation, which can be accessed at http://bankrupt.com/misc/LBHI_StipBarclaysFee.pdf About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: LBI Claims Dispute Pushes Back Payback Estimate ---------------------------------------------------------------- James W. Giddens, the trustee liquidating Lehman Brothers Holdings Inc.'s brokerage under the Securities Investor Protection Act, pushed back his estimate as to when he can start allocating $18.3 billion to a fund that will be used to pay back customers, Dow Jones Daily Bankruptcy Review reported. At a hearing on Jan. 25, Hughes Hubbard & Reed LLP's David Wiltenburg, Esq., a lawyer for the SIPA Trustee, said he hoped "interim distributions" could start during the first half of 2012 rather than in "early 2012" as was originally hoped, according to the report. "This time around there are more issues on the table," the lawyer said, referring to the first allocation to customers approved earlier in the case. This time, there are "more dollars in question," he said. A big chunk of those dollars is tied up in a dispute with Lehman Brothers International Europe, which the trustee intends to pay $2.2 billion in cash plus about $6.1 billion of account positions, the report related. LBIE's claim is related to the firm's European prime brokerage clients but it thinks it should be treated as a "customer" and thus paid more, Dow Jones reported. The LBIE claim, and how it is determined, will greatly affect the trustee's payback plan, the report pointed out. LBIE previously asked the Bankruptcy Court to overturn the SIPA Trustee's decision approving $8.3 billion as the amount for one of its claims rather than the $15.1 billion it is owed, according to the report. The claim is in addition to another $8.9 billion the two sides are haggling over. Mr. Giddens argued LBIE is asking to be treated similarly to individual customers who expect to get 100% recovery in the brokerage's liquidation. The company, he said, is claiming "customer status" for $24 billion, "a number that currently exceeds all the assets under the trustee's control." The Jan. 25 hearing was scheduled for the SIPA Trustee to seek approval of the allocation plan but the Jan. 25 hearing essentially became status conference where the trustee provided updates on his allocation request. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LENNAR CORP: Moody's Raises Corporate Family Rating to 'B1' ----------------------------------------------------------- Moody's Investors Service raised the ratings of Lennar Corporation, including its corporate family and probability of default ratings to B1 from B2 and the ratings on its senior unsecured notes and convertible senior notes to B2 from B3. At the same time, Moody's affirmed the company's SGL-2 speculative grade liquidity assessment. The ratings outlook is positive. RATINGS RATIONALE These rating actions were taken: Corporate family rating raised to B1 from B2; Probability of default rating raised to B1 from B2; Existing senior unsecured notes raised to B2 (LGD4,60%) from B3(LGD4,60%); Existing convertible senior notes raised to B2 (LGD4,60%) from B3(LGD4, 60%); Speculative grade liquidity assessment affirmed at SGL-2; Ratings outlook is positive. The upgrades reflect Lennar's largely successful mitigation of the principal risks outlined by Moody's at the time of its downgrades in 2008 and 2009, despite the downdraft provided by an abysmal housing market. Lennar's actions include its stretching out a heavy debt maturity schedule during a time of uncertain market access through successful, multiple equity and debt issuances; its near-elimination of its formerly outsized recourse joint venture debt exposure; and its ability to generate net income even as the majority of its peers continued to rack up losses. The B1 corporate family rating is supported by the company's industry-leading gross margins, its strong earnings performance in a weak housing environment, the diminished pace of impairment charges being booked, the slimming down of its joint venture activities into a relatively few (for Lennar) critical land ventures, the substantial tangible equity base, and one of the homebuilding industry's more transparent disclosures of off- balance sheet activities. At the same time, the company's ratings incorporate its elevated debt leverage, the likelihood that cash flow from operations will continue being negative in fiscal 2012, the long land position, the still-substantial, albeit greatly reduced, total (as opposed to recourse) debt at its joint venture operations, and its high proportion of speculative construction. Lennar's liquidity is supported by its $1 billion unrestricted cash position and various letter of credit facilities aggregating $400 million. The positive outlook is based on Moody's expectation that industry volumes will be up modestly this year and that any kind of volume increase should result in Lennar's improved earnings and credit metrics. Particularly with regard to earnings, a continued string of positive earnings should hasten the day when Lennar's auditors permit it to reverse an estimated $500 million of its deferred tax reserve, which would result in an immediate boost to net worth and a drop in adjusted debt leverage of an estimated 350 basis points. If, on the other hand, the spring selling season is another bust, and particularly if the economy shows signs of entering into a double dip, the positive outlook may come off. The ratings could benefit if the company continues to generate positive net income, resumes growing its free cash flow, begins driving its debt leverage below 50%, and continues to strengthen its liquidity. The outlook and/or ratings could come under pressure if the economic backdrop suddenly and significantly takes a turn for the worse; the company returns to generating more than modestly negative net income; impairments were again to rise materially; the company were to experience even sharper-than-expected reductions in its trailing 12-month free cash flow generation; and/or adjusted debt leverage were to exceed 60% on a sustained basis. The considerable proportion of secured land purchase and recourse off-balance sheet debt within the capital structure is the reason for the one notch difference between Lennar's corporate family rating and the rating on its unsecured notes. Founded in 1954 and headquartered in Miami, Florida, Lennar is one of the country's largest homebuilders. The company has a presence in 14 states and specializes in the sale of single-family homes for first-time, move-up and active adult buyers. Lennar also invests in distressed real estate assets and provides mortgage financing to its customers. Total revenues and consolidated net income for fiscal year 2011, ending November 30, 2011 were approximately $3.1 billion and $92 million, respectively. The principal methodology used in rating Lennar Corporation was the Global Homebuilding Industry Methodology published in March 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. LEXINGTON ROAD: Gets Court Approval to Use Emergency Funds ---------------------------------------------------------- Richard Craver at Winston-Salem Journal notes that on Feb. 9, 2012, Lexington Road Properties Inc. obtained U.S. Bankruptcy Court permission to receive $50,000 in emergency funds from a post-petition secured line of credit. The money was deemed necessary to keep paying expenses through Feb. 28, 2012. The report relates that the company is asking for an additional $200,000 to help pay for operating and legal expenses as well as for environmental testing on its properties and repairs to the former battery plant to make it more marketable for sale or lease. Winston-Salem, North Carolina-based, Lexington Road Properties Inc., fka Douglas Battery Manufacturing Company, filed for Chapter 11 protection on Jan. 27, 2012 (Bankr. M.D. N.C. Case No. 12-50121). William B. Sullivan, Esq., at Womble Carlvle Sandridqe & Rice, LLP, represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. LEXINGTON ROAD: Files Schedules of Assets and Liabilities --------------------------------------------------------- Richard Craver at Winston-Salem Journal, citing court documents, reports that Lexington Road Properties Inc. has declared $4.9 million in real and personal assets and $1.1 million in liabilities. According to the report, the company said in the filing that its real property was worth $3.94 million, primarily $1.95 million for its 73,800-square-foot distribution center at 2955 Starlight Drive and $1.4 million for its 45,700-square-foot headquarters and plant at 500 Battery Drive. The report says the company is trying to sell the properties. Meridian Realty is handling the marketing. Other assets were listed as worth $1 million, mostly $856,263 in equipment, machinery, fixtures and supplies. Lexington Road listed $279,949 for creditors holding secured claims and $775,969 for creditors holding unsecured, non-priority claims. The report notes that the Forsyth County tax collector is listed as holding secured claims worth at least $93,400 in statutory liens. Thomas Douglas III is listed as having a $100,147 lien on all equipment, while Premium Assignments of Tallahassee, Fla., has an $86,232 lien on unearned insurance premiums. The report adds that the largest unsecured, non-priority claim holders are Charles Douglas, G. Walker Douglas, Thomas D. Douglas and Thomas Douglas III. Each provided $184,397 to the company on Sept. 22, 2008, in exchange for a promissory note. Other unsecured, non-priority claim holders include: $16,000 to G. Walker Douglas for consulting fees covering June through January; $7,916 to the law firm of Baker & Hostetler LLP of Washington for general environmental legal fees; and $7,806 to Duke Energy for utility costs from Dec. 15 through Jan. 26. Charles Douglas called the Lexington Road bankruptcy a necessary and bittersweet decision for a five-generation company that just 15 years ago had more than 800 employees, including 600 in Winston-Salem, according to the report. Based in Winston-Salem, North Carolina, Lexington Road Properties Inc., fka Douglas Battery Manufacturing Company, filed for Chapter 11 protection on Jan. 27, 2012 (Bankr. M.D. N.C. Case No. 12-50121). William B. Sullivan, Esq., at Womble Carlvle Sandridqe & Rice, LLP, represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. LIGHTSQUARED INC: Said to Hire Moelis; Falcone Denies Bankruptcy ---------------------------------------------------------------- Sinead Carew and Svea Herbst-Bayliss at Reuters report that hedge fund manager Philip Falcone is ruling out a bankruptcy filing for his telecom startup LightSquared Inc. even as sources familiar with the matter said the company was seeking restructuring advice. "It is clearly not on our table," Reuters quotes Mr. Falcone as stating in an e-mail when asked if LightSquared was considering a bankruptcy filing after communications regulators said they planned to revoke its approval for a national wireless network. According to Reuters, Mr. Falcone said there was a plan for dealing with the Federal Communications Commission's effort to withdraw permission for a land-based network. The report relates two people familiar with the matter said LightSquared has already hired investment bank Moelis & Co as a restructuring advisor. Moelis declined comment and LightSquared did not respond to a request for comment. The report notes that the company was due to make a $56 million payment to its satellite partner Inmarsat by Feb. 18, according to another person close to the situation and one of the sources who knew of the Moelis hiring. The report relates industry analyst Tim Farrar said investors had told him they were concerned about the $56 million payment due. According to Reuters, LightSquared said the FCC's action had harmed it and the public by preventing construction of a network vital to U.S. competitiveness. Industry analysts and some LightSquared investors say the telecom startup is running short of options with cash draining away and little chance of getting the FCC to change its mind. They also say it could be hard to find a buyer for LightSquared. Several suggested that a bankruptcy filing, while perhaps not imminent, is the likely outcome. According to the report, the company's financial filing last year indicated that LightSquared could run out of money by the middle of this year. The report relates Mr. Farrar said investors would have more leverage to press for a bankruptcy filing after the FCC makes a final ruling. The agency has set a March 1 deadline for public comment. LightSquared Inc. -- http://www.lightsquared.com/-- operates an open wireless broadband network company. LRB REALTY: Case Summary & 5 Largest Unsecured Creditors -------------------------------------------------------- Debtor: LRB Realty, LLC 4600 Military Trail, Suite 110 Jupiter, FL 33458 Bankruptcy Case No.: 12-13754 Chapter 11 Petition Date: February 16, 2012 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman Jr. Debtor's Counsel: Julianne R. Frank, Esq. FRANK, WHITE-BOYD, P.A. 11382 Prosperity Farms Rd #230 Palm Beach Gardens, FL 33410 Tel: (561) 626-4700 Fax: (561) 627-9479 E-mail: fwbbnk@fwbpa.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flsb12-13754.pdf The petition was signed by Aldo Beltrano, designated agent. LSP ENERGY: Taps Epiq as Claims and Noticing Agent -------------------------------------------------- BankruptcyData.com reports that LSP Energy Limited Partnership filed with the U.S. Bankruptcy Court motions to retain Epiq Bankruptcy Solutions (Contact: Bradley J. Tuttle) as claims and noticing agent and, separately, as administrative advisor at hourly rates ranging from $40 to 275 for clerk through senior consultant. The Company also filed a motion to retain Protiviti (Contact: Charles R. Goldstein) as financial, accounting and administrative advisor at the following hourly rates: administrative at $80 to 120, consultant/senior consultant at 240 to 270, manager/senior manager at 280 to 380, director/associate director at 390 to 490 and managing director at 550 to 620. About LSP Energy LSP Energy Limited Partnership, the owner of a natural-gas-fired power plant in Mississippi, and its Debtor-affiliates filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10460) in Delaware on Feb. 10, 2012. Judge Mary F. Walrath presides over the case. Thomas Joseph Francella, Jr., Esq., at Whiteford Taylor Preston LLC serves as the Debtors' counsel. In its petition, the Debtors estimated $100 million to $500 million in assets and debts. The petition was signed by Thomas G. Favinger, president of LSP Energy, Inc., general partner. Affiliates that simultaneously sought Chapter 11 protection are LSP Batesville Holding, LLC (Bankr. D. Del. Case No. 12-10461), LSP Energy, Inc. (Bankr. D. Del. Case No. 12-10463), and LSP Batesville Funding Corporation (Bankr. D. Del. Case No. 12-10464). MARKET 52: Files for Bankruptcy, Plans to Hold Section 363 Sale --------------------------------------------------------------- Market 52 Inc., dba Premier Pacific Trading, filed for Chapter 11 protection with a plan to sell assets. According to The Packer, company president Jerald Downs said, "After significant efforts over the last 18 months to recapitalize its business and better serve the needs of its customers, Market 52 was forced to turn to the protection afforded by the bankruptcy code by filing a petition under Chapter 11." The report relates that Market 52 contacted the U.S. Department of Agriculture early this month to voluntarily surrender its Perishable Agricultural Commodities Act license and start the USDA sanctions process. The report relates that Mr. Downs and attorney Scott Belden, Esq., said a Section 363 sale, which in Chapter 11 allows companies to sell assets as ongoing businesses, is planned. "(It's) a competitive bid for both the company's tangible and intangible assets," Mr. Downs said. "Our decision to hold a 363 sale was for the greatest possible recovery to creditors." According to The Packer, a meeting of creditors is scheduled for March 1 at the federal courthouse in Fresno, California. Based in Visalia, California, Market 52 Inc. dba Premier Pacific Trading filed for Chapter 11 protection on Jan. 27, 2012 (Bank. E.D. Calif. Case No. 12-10694). Judge W. Richard Lee presides over the case. T. Scott Belden, Esq., at Klein, Denatale, Goldner, Cooper, Rosenlieb & Kimball, LLP, represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. MAUI LAND: ValueWorks Discloses 7.1% Equity Stake ------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, ValueWorks, LLC, and Charles Lemonides disclosed that, as of Dec. 31, 2011, they beneficially own 1,343,747 shares of common stock of Maui Land & Pineapple Company, Inc., representing 7.14% of the shares outstanding. A full-text copy of the regulatory filing is available at http://is.gd/yAszlP About Maui Land & Pineapple Company Maui Land & Pineapple Company, Inc. (NYSE: MLP) -- http://mauiland.com/-- develops, sells, and manages residential, resort, commercial, and industrial real estate. The Company owns approximately 23,000 acres of land on Maui and operates retail, utility operations, and a nature preserve at the Kapalua Resort. The Company's principal subsidiary is Kapalua Land Company, Ltd., the operator and developer of Kapalua Resort, a master-planned community in West Maui. As reported in the TCR on March 17, 2011, Deloitte & Touche LLP, in Honolulu, Hawaii, expressed substantial doubt about Maui Land & Pineapple's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that of the Company's recurring negative cash flows from operations and deficiency in stockholders' equity. The Company's balance sheet at Sept. 30, 2011, showed $66.41 million in total assets, $82.56 million in total liabilities and a $16.15 million stockholders' deficiency. MBIA INC: Bank of America Seeks to Block CEO's Deposition in Suit ----------------------------------------------------------------- American Bankruptcy Institute reports that a court filing showed that Bank of America Corp. asked a New York state judge to block the deposition of Chief Executive Officer Brian T. Moynihan in a fraud lawsuit brought by MBIA Inc. The Troubled Company Reporter reported on Feb. 13, 2012, that MBIA Inc. admitted 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. 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. 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. METHANEX CORP: Moody's Affirms Ba1 Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service has moved the outlook on Methanex Corporation's (Methanex) ratings to positive. The firm's Ba1 Corporate Family Rating (CFR) and existing debt ratings were also affirmed. These summarizes the existing ratings: Methanex Corporation Ratings affirmed: Corporate Family Rating -- Ba1 Probability of Default Rating -- Ba1 $150 million senior unsecured notes due 2015 - Ba1 (LGD4, 61%) from Ba1 (LGD4, 62%) $200 million senior unsecured notes due 2012 - Ba1 (LGD4, 61%) from Ba1 (LGD4, 62%) Outlook -- Positive RATINGS RATIONALE The move to a positive outlook reflects Methanex's strong leverage and financial strength credit metrics supportive of a higher rating, improved methanol production asset profile, expectations that investment opportunities currently under consideration by the company will add to the company's production capacity and favorable industry conditions. The company successfully built and started in 2011 its 1.26 million metric ton, 60% owned plant in Egypt, boosting its methanol production capacity based on low cost natural gas. While Moody's considers methanol capacity at its three plants in Trinidad and Egypt to be based on low cost natural gas, declines in North American natural gas costs and a new ten year natural gas feedstock contract obtained for the plant in New Zealand mean the Canadian and New Zealand plants can also generate strong profits. The company is currently planning to move one of its unused Chilean plants to the US, which would further boost production output. It is also evaluating other opportunities for its remaining unused methanol plants in Chile that would increase production output. Moody's does recognize that the company is not expected to generate strong free cash flow as long as it is spending heavily to relocate a plant from Chile to the US and on other potential projects. Additionally, there is uncertainty around the cost and impact on free cash flow of the investments and which projects will ultimately be executed. The methanol industry backdrop is attractive, with pricing supporting attractive profit margins. The limited new capacity that has been announced is expected to be absorbed by the market without disrupting methanol pricing. Methanex's ratings reflect its significant market share as the world's largest methanol producer, geographic diversity, strong cash balances and liquidity, and logistics assets and benefits associated with selling high volumes of methanol. The company's relatively conservative financial philosophy for a Ba1 issuer and modest balance sheet debt also benefit the rating. The ratings are tempered by the single commodity petrochemical product portfolio, cyclical nature of pricing and demand in the methanol market, inconsistent supplies of natural gas feedstock. The ratings are further limited by the exposure to changes of foreign government policies (e.g., potential political unrest in Egypt) and the high amount of operating leases which materially increases adjusted debt. The rating could be upgraded if the company continues to be supplied with sufficient attractively priced natural gas to operate its plants (including the startup of the second train at Motunui, New Zealand), continues to smoothly operate its Egyptian plant, makes substantial progress towards relocating a methanol plant from Chile to the US Gulf Coast and is expected to return to generating substantial positive free cash flow. Significant negative free cash flow resulting from lower than expected operating cash flow or heightened spending on additional investment opportunities would temper Moody's view of the rating. The principal methodology used in rating Methanex Corporation was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Methanex, based in Vancouver, British Columbia, is the world's largest producer of methanol, its only product. Methanex operates methanol production facilities located in Canada, Chile, Egypt, New Zealand and Trinidad. The 1.3 million metric ton p.a. plant in Egypt (owned by a joint venture in which Methanex has a 60% interest) started production in March 2011 and is the latest addition to its asset base. The company restarted its Canadian (Medicine Hat) plant in 2011; it had been closed since 2001. The company reported revenues of $2.6 billion for 2011. MOHEGAN TRIBAL: Exchange Offers to Expire Tomorrow -------------------------------------------------- The Mohegan Tribal Gaming Authority extended the early tender period in its private exchange offers and consent solicitations until 5:00 p.m., New York City time, on Feb. 14, 2012. As previously announced, the Authority is offering to exchange any and all of its outstanding notes held by eligible holders for new notes in a private exchange offer which includes a solicitation of consents to certain amendments to the old notes and the indentures governing the old notes. The early tender date was previously scheduled for 5:00 p.m., New York City time, on Feb. 13, 2012. As of the previous early tender date, old notes had been tendered into the exchange offers in amounts sufficient to satisfy the minimum tender condition with respect to the old second lien notes and the old 2014 notes and old 2015 notes, in the aggregate, but not with respect to the old 2012 notes and old 2013 notes, in the aggregate. As of the previous early tender date, approximately 97.1% of the old second lien notes, approximately 81.3% of the old 2012 and old 2013 notes, in the aggregate, and approximately 90.3% of the old 2014 and old 2015 notes, in the aggregate, had been tendered into the exchange offers. The exchange offers are conditioned upon, among other things, the valid tender of old notes representing at least (i) 50.1% of the outstanding principal amount of the old second lien notes, (ii) 90%, in the aggregate, of the outstanding principal amount of the old 2012 notes and the old 2013 notes, and (iii) 75%, in the aggregate, of the outstanding principal amount of the old 2014 notes and the old 2015 notes. The conditions to the exchange offers are set forth in the offering memorandum and consent solicitation statement, dated Jan. 24, 2012, and the related supplement dated Feb. 3, 2012, for the exchange offers and consent solicitations. The conditions to the exchange offers are for the Authority's benefit and may be asserted or waived by the Authority at any time and from time to time, in the Authority's sole discretion. The exchange offers were launched on Jan. 24, 2012, and all other terms of the exchange offers remain unchanged from the terms announced at launch. The exchange offers will expire at 5:00 p.m., New York City time, on Feb. 22, 2012. Withdrawal rights for old notes and the related consents tendered into the exchange offers expired at 5:00 p.m., New York City time, on Feb. 6, 2012, as scheduled, and there will be no withdrawal rights for the remainder of the exchange offers. Holders of old notes accepted in the exchange offers will also receive a cash payment equal to the accrued and unpaid interest in respect of such old notes from the most recent interest payment date to, but not including, the settlement date of the exchange offers. Concurrently with the exchange offers and the consent solicitations, the Authority is soliciting consents to the proposed amendments from all holders of old notes that are not eligible to participate in the exchange offers and the consent solicitations as of the date the exchange offers and consent solicitations commenced. The early consent date for the retail consent solicitation, which was previously the original early tender date, has been extended to the revised early tender date. About Mohegan Tribal Gaming Authority Mohegan Tribal Gaming Authority -- http://www.mtga.com/-- is an instrumentality of the Mohegan Tribe of Indians of Connecticut, or the Tribe, a federally-recognized Indian tribe with an approximately 507-acre reservation situated in Southeastern Connecticut, adjacent to Uncasville, Connecticut. The Authority has been granted the exclusive authority to conduct and regulate gaming activities on the existing reservation of the Tribe, including the operation of Mohegan Sun, a gaming and entertainment complex located on a 185-acre site on the Tribe's reservation. Through its subsidiary, Downs Racing, L.P., the Authority also owns and operates Mohegan Sun at Pocono Downs, a gaming and entertainment facility located on a 400-acre site in Plains Township, Pennsylvania, and several off-track wagering facilities located elsewhere in Pennsylvania. The Authority's balance sheet at Sept. 30, 2011, showed $2.2 billion in total assets, $2.0 billion in total liabilities and $198.7 million total capital. PricewaterhouseCoopers LLP, in Hartford, Connecticut, expressed substantial doubt about the Authority's ability to continue as a going concern. The independent auditors noted that of the Authority's total debt of $1.6 billion as of Sept. 30, 2011, $811.1 million matures within the next twelve months, including $535.0 million outstanding under the Authority's Bank Credit Facility which matures on March 9, 2012, and the Authority's $250.0 million 2002 8% Senior Subordinated Notes which mature on April 1, 2012. In addition, a substantial amount of the Authority's other outstanding indebtedness matures over the following three fiscal years. MOUNTAIN COUNTRY: Involuntary Chapter 11 Case Summary ----------------------------------------------------- Alleged Debtor: Mountain Country Partners, LLC 9799 St. Augustin Road Jacksonville, FL 32257 Case Number: 12-20094 Involuntary Chapter 11 Petition Date: February 17, 2012 Court: Southern District of West Virginia (Charleston) Judge: Ronald G. Pearson Petitioners' Counsel: Joseph W. Caldwell, Esq. CALDWELL & RIFFEE P.O. Box 4427 Charleston, WV 25364-4427 Tel: (304) 925-2100 Fax: (304) 925-2193 E-mail: jcaldwell@caldwellandriffee.com Mountain Country 's petitioners: Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ April Baltzell Note plus Interest $100,000 21 Terraza del Mar Dana Point, CA 92629 Robert O. Buck Note plus Interest $200,000 1663 Carruthers Memphis, TN 38112 Kenneth Ervin Young Note plus Interest $150,000 43555 Green Hills Way Fremont, CA 94539 Richard Davis Note plus Interest $100,000 P.O. Box 542 Dunedin, FL 34697 J. J. Bradshaw Note plus Interest $160,937 26893 Boquet Lyn Road, Ste. C-248 Santa Clarita, CA 91350 Josette Y. Jones Note plus Interest $100,000 354 Blaidell Drive Claremont, CA 91711-3111 Nan Murphy Note plus Interest $100,000 985 Comanche Trail Anniston, AL 36206 NATIONAL CENTURY: JPM Opposes Ex-CEO's Access to Documents ---------------------------------------------------------- A former top official of National Century Financial Enterprises Inc. sought approval from a district judge to access documents related to J.P. Morgan Chase's alleged payment of more than $500 million to settle the claims of bondholders. The documents were filed under seal in a multi-district litigation overseen by Judge James Graham of the U.S. District Court for the Southern District of Ohio. Lance Poulsen, NCFE's former chief executive officer, wanted to get copies of the documents to pursue his suit against Bank One N.A., which merged with J.P. Morgan in 2004, for its role in NCFE's collapse and its alleged "plot" to implicate him in the fraud scheme that drove the company to bankruptcy. "Poulsen cannot defend himself in the criminal case nor pursue the civil case against Bank One without knowing what the actions of these parties were during the time of the bankruptcy and the settlements that were made," the former NCFE officer said in court papers filed in response to J.P. Morgan's objection for the turnover of documents. Mr. Poulsen refuted J.P. Morgan's claim that there are no sealed settlement agreements in the multi-district litigation. "That is simply not true. If so, the need to submit the motion would be mute," he said, referring to the motion he filed earlier for the turnover of documents. Mr. Poulsen further said that the stay on his suit against Bank One, which was in effect during the trial and his first appeal, has recently been lifted. He added that he met all conditions imposed by the court, which granted him the right to pursue his claims. Meanwhile, in response to Metropolitan Life Insurance Company and Lloyds TSB Bank plc's assertion that the time for discovery has long since elapsed, Mr. Poulsen said both companies are not aware that he was barred to conduct discovery during the "direct appeal process," and that he is now seeking a further appeal based on the alleged loss amounts. Credit Suisse Asks District Court to Deny Arizona Noteholders' Request Credit Suisse Securities (USA) LLC and Credit Suisse New York Branch asked Judge Graham to deny the request made by a group of Arizona noteholders for entry of an order denying their summary judgment motion. Earlier, the group, which is represented by Texas-based Gibbs & Bruns LLP, urged the district judge to deny the motion in light of the New York Court of Appeals' recent decision in the case filed by Assured Guaranty (UK) Ltd. against J.P. Morgan Investment Management Inc. alleging breach of fiduciary duty, gross negligence and breach of contract. The appeals court held that Assured Guaranty's common-law claims are not preempted by the Martin Act. The Arizona noteholders said the appeals court's decision in the Assured Guaranty case has already answered the remaining issue in its own case against Credit Suisse -- whether the Martin Act preempted their claims for fraud and negligent misrepresentation. They argued that their claims neither arise from nor depend upon the Martin Act. The noteholders also requested that a status conference be held to discuss a timetable for sending their case back to Arizona for trial. In court papers, Credit Suisse said the noteholders' request is a "transparent and inappropriate" attempt to rush the district court to a decision on the summary judgment motion, and to have the case transferred back to Arizona. Jeffrey Smith, Esq., at Bingham McCutchen LLP, in New York, said the New York Court of Appeals' decision does not resolve the issue raised in Credit Suisse's summary judgment motion. "The Martin Act ruling has absolutely no impact on various other grounds identified by Credit Suisse for dismissal of the Arizona noteholders' negligent misrepresentation claims," Mr. Smith said, pointing out that the Martin Act preemption was only one ground identified by Credit Suisse for dismissal of the claims. The lawyer argued that the claims should be dismissed due to the noteholders' inability to prove that Credit Suisse owed any duty or made any material misrepresentations to them, or any of its actions caused harm to the noteholders. Mr. Smith also criticized the noteholders' request for a status conference, describing it as "presumptuous and misguided." "The law is clear that remand should not happen unless and until this court determines that the Arizona noteholders' claims can survive the pending summary judgment motion," Mr. Smith argued. About National Century Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- was the largest issuer of medical accounts receivable asset backed securities in the United States before it collapsed in bankruptcy in November 2002 amid allegations of widespread fraud and misappropriation of assets. To date, 10 senior executives of the company have been convicted or pled guilty to federal charges of conspiracy, securities fraud, wire fraud, and money laundering arising out of the NCFE securitization program. NCFE -- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust -- is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. Bankruptcy Creditors' Service, Inc., publishes NATIONAL CENTURY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by National Century Financial Enterprises Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) NATIONAL CENTURY: CSFB Trustee to Make Distributions March 12 ------------------------------------------------------------- Avidity Partners, LLC, trustee of the CSFB Claims Trust, announced that it will make a distribution in the sum of $4 million pro rata to beneficiaries of the trust. The trustee set a record date of February 24, 2012, and a distribution date of March 12, 2012, pursuant to Section 4.2(b) of the CSFB Claims Trust Agreement. Any inquiries should be directed to: Steve Platt U.S. Bank National Association c/o Kurtzman Carson & Consultants 5202 East Raines Road Memphis, Tennessee 38118 Tel: (904) 699-1707 Fax: (901) 546-0677 E-mail: splatt@kccllc.com About National Century Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- was the largest issuer of medical accounts receivable asset backed securities in the United States before it collapsed in bankruptcy in November 2002 amid allegations of widespread fraud and misappropriation of assets. To date, 10 senior executives of the company have been convicted or pled guilty to federal charges of conspiracy, securities fraud, wire fraud, and money laundering arising out of the NCFE securitization program. NCFE -- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust -- is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. Bankruptcy Creditors' Service, Inc., publishes NATIONAL CENTURY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by National Century Financial Enterprises Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) NATIONAL CENTURY: VI/XII Trust's Report for Dec. 31 Quarter ----------------------------------------------------------- Current Paid to Balance Quarter Date Due ------- ------- ------- A. FEES AND EXPENSES: 1. Trustee Compensation - - - 2. Fees for Attorney for Trustee - - - 3. Fee for Attorney for Debtor $388,378 $10,512,659 - 4. Other professionals 115,559 5,556,590 - 5. All expenses, including trustee 104,319 12,488,825 - B. DISTRIBUTIONS: 6. Secured Creditors - 494,353,519 - 7. Priority Creditors - - - 8. Unsecured Creditors - - - 9. Equity Security Holders - - - 10. Other Payments or Transfers 444 54,282,015 - ---------- ----------- ---------- Total Plan Payments $608,699 $577,193,608 - ========== =========== ========== About National Century Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- was the largest issuer of medical accounts receivable asset backed securities in the United States before it collapsed in bankruptcy in November 2002 amid allegations of widespread fraud and misappropriation of assets. To date, 10 senior executives of the company have been convicted or pled guilty to federal charges of conspiracy, securities fraud, wire fraud, and money laundering arising out of the NCFE securitization program. NCFE -- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust -- is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. Bankruptcy Creditors' Service, Inc., publishes NATIONAL CENTURY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by National Century Financial Enterprises Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) NATIONAL CENTURY: UAT's Report for Dec. 31 Quarter -------------------------------------------------- Current Paid to Balance Quarter Date Due ------- ------- ------- A. FEES AND EXPENSES: 1. Trustee Compensation - - - 2. Fees for Attorney for Trustee - - - 3. Fee for Attorney for Debtor $77,789 $16,333,013 - 4. Other professionals 32,493 11,917,228 - 5. All expenses, including trustee 219,551 24,072,877 - B. DISTRIBUTIONS: 6. Secured Creditors - - - 7. Priority Creditors - - - 8. Unsecured Creditors 2,200,000 208,136,188 - 9. Equity Security Holders - - - 10. Other Payments or Transfers - - - ---------- ----------- ---------- Total Plan Payments $2,529,833 $260,459,306 - ========== =========== ========== About National Century Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- was the largest issuer of medical accounts receivable asset backed securities in the United States before it collapsed in bankruptcy in November 2002 amid allegations of widespread fraud and misappropriation of assets. To date, 10 senior executives of the company have been convicted or pled guilty to federal charges of conspiracy, securities fraud, wire fraud, and money laundering arising out of the NCFE securitization program. NCFE -- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust -- is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. Bankruptcy Creditors' Service, Inc., publishes NATIONAL CENTURY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by National Century Financial Enterprises Inc. and its units. (http://bankrupt.com/newsstand/or 215/945-7000) NATIONAL RETAIL: Fitch Assigns 'BB+' Rating to Preferred Stock -------------------------------------------------------------- Fitch Ratings assigns a credit rating of 'BB+' to the $250 million 6.625% series D cumulative redeemable preferred stock issued by National Retail Properties, Inc. (NYSE: NNN). Net proceeds from the offering are expected to be used to redeem $92 million of series C preferred stock and for general corporate purposes, which may include repayment of outstanding balances on the company's revolving credit facility. Fitch currently rates the company as follows: -- Issuer Default Rating (IDR) at 'BBB'; -- Unsecured revolving credit facility at 'BBB'; -- Senior unsecured notes at 'BBB'; -- Senior unsecured convertible notes at 'BBB'; -- Preferred stock at 'BB+'. The Rating Outlook is Stable. The 'BBB' IDR takes into account NNN's solid credit metrics, which are appropriate for the rating, as well as the company's diverse portfolio of net lease retail properties that have generated stable cash flows throughout cycles. NNN's fixed-charge coverage ratio (defined as recurring operating EBITDA less recurring capital expenditures and straight-line rents, divided by total interest incurred and preferred stock distributions) was solid at 2.8 times (x) for the year ended Dec. 31, 2011, down slightly from 2.9x for full year 2010. Fitch expects fixed charge coverage to remain stable in the high 2x range through 2013 due to recent acquisitions at attractive spreads, solid occupancy, and long average remaining lease terms, partially offset by increased preferred dividends. NNN's free-standing retail property portfolio is highly granular and includes 1,422 properties spread throughout 47 states, with the largest concentrations in Texas, Florida and Illinois. Moreover, NNN's portfolio is comprised of over 300 tenants, thus limiting individual tenant credit risk. NNN's leverage is strong for the 'BBB' rating category. Net debt to last 12-months recurring operating EBITDA was 5.9x as of Dec. 31, 2011, up from 5.7x as of Dec. 31, 2010, and 4.8x as of Dec. 31, 2009. Acquisitions during these years that did not fully contribute to EBITDA on a full-year basis had a negative impact on leverage. Fitch expects leverage to decline and stabilize just below 5.0x over the next 12-24 months. The company has a solid liquidity profile. Base-case liquidity coverage (unrestricted cash, availability under the company's unsecured revolving credit facility and expected retained cash flow after dividends divided by debt maturities and expected recurring capital expenditures) is 1.6x for the period Jan. 1, 2012 through Dec. 31, 2013. pro forma for the preferred stock offering, liquidity coverage rises to 1.9x. NNN's $450 million unsecured revolving line of credit and well-laddered debt maturity schedule are main drivers of NNN's liquidity surplus. In addition, the financial covenants in the company's unsecured debt agreements do not limit NNN's financial flexibility. NNN's unencumbered asset coverage of unsecured debt (based on a 9% cap rate on fourth quarter 2011 annualized unencumbered net operating income) was 2.4x as of Dec. 31, 2011. Pro forma for preferred stock issuance, this level would improve to 2.5x. This level is adequate for the rating category and provides ample contingent liquidity for NNN. Fitch's credit concerns include NNN's moderate geographical concentration. Texas represents 23% of annualized base rents (ABR), with the next largest concentration in Florida (9.2% of ABR), indicating vulnerability to regional demand drivers. NNN's portfolio also includes non-necessity-based retailers (e.g. full-service restaurants, movie theatres, sporting goods) that may be adversely affected through retail demand cycles. The convenience store industry represented 24.6% of ABR as of Dec. 31, 2011, although this is mitigated by the stable performance of this tenant segment. The next largest industry concentration was full- service restaurants at 9.4% of ABR, which exposes the company to industry-specific volatility. The two-notch differential between NNN's IDR and its preferred stock rating is consistent with Fitch's criteria for corporate entities with a 'BBB' IDR. Based on Fitch's report 'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis, these preferred securities are deeply subordinated and have loss absorption elements that would likely result in poor recoveries in the event of a corporate default. The Stable Outlook centers on Fitch's expectation that NNN's credit metrics will remain consistent with a 'BBB' rating over the next 12-24 months. NNN's long-term triple net leases (typically 15-20 years in term) and manageable lease expiration schedule contribute to the stable cash flows of the portfolio. The Stable Outlook also takes into account NNN's strong financial flexibility. The following factors may have a positive impact on NNN's ratings and/or Outlook: -- Broader tenant and geographic diversity; -- Fixed charge coverage sustaining above 3.0x (fixed charge coverage was 2.8x for the 12 months ended Dec. 31, 2011); -- Net debt to recurring EBITDA sustaining below 5.0x (leverage was 5.9x as of Dec. 31, 2011); -- Unencumbered assets to unsecured debt based on a stressed 9% capitalization rate, sustaining above 3.0x (this ratio was 2.4x as of Dec. 31, 2011). The following factors may have a negative impact on NNN's ratings and/or Outlook: -- Fixed charge coverage sustaining below 2.5x; -- Net debt to recurring EBITDA sustaining above 6.0x; -- Unencumbered asset to unsecured debt ratio sustaining below 2.2x; -- A liquidity coverage ratio sustaining below 1.0x. NORTHERN BERKSHIRE: Plan Confirmation Hearing Slated for April 2 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts will convene a hearing on April 2, 2012, at 10:00 a.m., to consider the confirmation of Northern Berkshire Healthcare, Inc.'s Final Third Amended Plan of Reorganization dated as of Jan. 26, 2012. Objections, if any to confirmation of the Plan, are due March 22, on or before 4:30 p.m. (prevailing Eastern Time). Ballots accepting or rejecting the Plan must be submitted to these addresses: by regular mail: Northern Berkshire Healthcare, Inc. c/o GCG, Inc., solicitation agent P.O. Box 9669 Dublin, OH 43017-4969 by hand delivery or overnight courier: Northern Berkshire Healthcare, Inc. c/o GCG, Inc., solicitation agent 5151 Blazer Parkway, Suite A Dublin, OH 43017 As reported in the Troubled Company Reporter on Feb. 14, 2012, under the Plan, bondholders owed $43.7 million are to receive new debt, for a projected 44% recovery. The Pension Benefit Guaranty Corp., with a claim of $27.3 million, is slated for a 5% recovery, just like other unsecured creditors with claims totaling about $260,000. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/NORTHERN_BERKSHIRE_ds_3rdamendment.pdf About Northern Berkshire Healthcare Northern Berkshire Healthcare, Inc., is a non-profit healthcare corporation in northern Berkshire County, Massachusetts. Together with its affiliates, Northern Berkshire Healthcare operates the North Adams Regional Hospital and a visiting nurse association and hospice in North Adams, Massachusetts. Northern Berkshire Healthcare, Inc., North Adams Regional Hospital, Inc., Visiting Nurse Association & Hospice of Northern Berkshire, Inc., Northern Berkshire Healthcare Physicians Group, Inc., and Northern Berkshire Realty, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Mass. Case No. 11-31114) on June 13, 2011, to address their overleveraged balance sheet and effect a reorganization of their operations. On the same day, Northern Berkshire Community Services, Inc., filed a petition for Chapter 7 relief also in the District of Massachusetts bankruptcy court. Judge Henry J. Boroff presides over the Debtors' cases. Steven T. Hoort, Esq., James A. Wright, III, Esq., Jonathan B. Lackow, Esq., and Matthew F. Burrows, Esq., at Ropes & Gray LLP, in Boston, Mass., serve as the Debtors' bankruptcy counsel. The Debtors' Financial Advisors are Carl Marks Advisory Group LLC. GCG Inc. serves as claims and noticing agent. Northern Berkshire disclosed $22,957,933 in assets and $53,379,652 in liabilities as of the Chapter 11 filing. The petition was signed by William F. Frado, Jr., president. William K. Harrington, the U.S. Trustee for Region 1, appointed five members to the official unsecured creditors' committee in the Debtors' cases. The Committee tapped Duane Morris LLP as its counsel. About Rock Pointe Rock Pointe Holdings Company LLC owns the Rock Pointe Corporate Center in Spokane, Washington. The Company filed for Chapter 11 protection (Bankr. E.D. Wash. Case No.11-05811) on Dec. 2, 2011. Brett L. Wittner, Esq., at Kent & Wittner PS, represents the Debtor. The Debtor tapped Southwell & O'Rourke, P.S., as attorneys. The Debtor estimated both assets and debts of between $50 million and $100 million. OILSANDS QUEST: Wins Alberta Court Nod of C$3.75-Mil. DIP Loan -------------------------------------------------------------- Oilsands Quest Inc. has received Court approval of its previously- announced DIP financing and its request to extend creditor protection. Court approval of the announced sale of the Company's Eagles Nest asset has been delayed, because a second party has come forward with a substantially higher offer for the asset. The Alberta Court of Queen's Bench approved Oilsands Quest's debtor-in-possession financing of C$3.75 million, to fund ongoing operating costs and other expenses while the Company is under creditor protection. Advances under the DIP facility are now available to the Company. Oilsands Quest also requested and obtained an extension of the order providing creditor protection under the Companies' Creditors Arrangement Act (Canada), which was to expire Feb. 17, 2012. Creditor protection under the CCAA will now expire May 18, 2012, unless further extended as required and approved by the Court. Oilsands Quest previously stated that it would request Court approval for the sale of its Eagles Nest property to an unrelated third party for CDN$4.4 million. However, on Feb. 15, 2012, the Company received an additional offer to purchase the Eagles Nest property from another third party. Under this new offer, the buyer would pay CDN$6 million for the asset, with a non-refundable deposit of CDN$400,000. In light of the late offer, the Court delayed its decision on the asset sale until February 22, 2012, to allow time for the new offer to be evaluated fully and for any additional prospective bidders to come forward. Oilsands Quest continues to operate under the protection of CCAA with the assistance of a Court-appointed monitor. The Company's common shares remain suspended from trading until either a delisting occurs or until the NYSE permits the resumption of trading. About Oilsands Quest Oilsands Quest Inc. -- http://www.oilsandsquest.com/-- is exploring and developing oil sands permits and licences, located in Saskatchewan and Alberta, and developing Saskatchewan's first commercial oil sands discovery. PEAK BROADCASTING: Rabobank Wants Court to Disallow Plan Votes -------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports Rabobank International, a secured lender in Peak Broadcasting LLC's Chapter 11 case that has been withholding support of Peak's restructuring plan, filed a motion asking the U.S. Bankruptcy Court in Wilmington, Delaware, to disallow certain acceptance votes, saying they weren't made in good faith. According to the report, Rabobank said, if these votes were disallowed, Peak's Chapter 11 plan would no longer have the support necessary to be confirmed. It's asking the court to hear its request prior to Peak's confirmation hearing, which is scheduled for Feb. 23, 2012. The report relates Rabobank said its has shown that acceptance of the plan by four claimants -- including first-lien claimants General Electric Capital Corp. and Oaktree Capital Management -- "were not made in good faith, or were not procured in good faith." Rabobank, which is owed $14 million, didn't elaborate about what specific information it has. The report notes that Rabobank said in previously filed court documents that the Chapter 11 plan proposes "gifts" to junior creditors, lacks justification for retaining the same management employees in the reorganized company, and treats Rabobank differently than other claimants. The report further says that the plan gives senior lenders, owed $58.2 million, equity in the new company and a restructured loan. Other lenders would receive a payment of either $3.3 million or $1.025 million and general unsecured creditors would receive full payment. About PEAK Broadcasting PEAK Broadcasting LLC, in Fresno, California, filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 12-10183) on Jan. 10, 2012. PEAK Broadcasting, founded in 2006-2007, operates radio stations in Fresno, California, and Boise, Idaho. Several affiliates also sought Chapter 11 protection: Peak Broadcasting of Fresno LLC; Peak Broadcasting of Boise LLC; Peak Broadcasting of Fresno Licenses LLC; and Peak Broadcasting of Boise Licenses LLC. In its petition, Peak Broadcasting estimated $50 million to $100 million in assets and debts. The petition was signed by Todd Lawley, CEO and managing member. PEAK Broadcasting filed together with the petition a prepackaged plan of reorganization. The plan provides for payments to the Company's employees, vendors and other unsecured creditors, and for the business to continue in the ordinary course with no disruption. Judge Peter Walsh, who oversees the case, set a hearing to confirm the prepack plan for Feb. 23. Sheppard, Mullin, Richter & Hampton LLP serves as the Debtors' Chapter 11 counsel. Pachulski Stang Ziehl & Jones LLP serves as their Chapter 11 local counsel. Edinger Associates serves as special counsel with matters involving the Debtors' Federal Communications Commission licenses. PHOENIX FOOTWEAR: Dimensional Fund No Longer Owns Shares -------------------------------------------------------- Dimensional Fund Advisors LP filed with the U.S. Securities and Exchange Commission an amended Schedule 13G disclosing that, as of Dec. 31, 2011, it does not beneficially own any shares of common stock of Phoenix Footwear Group Inc. A full-text copy of the regulatory filing is available at http://is.gd/WDyVS4 About Phoenix Footwear Based in Carlsbad, California, Phoenix Footwear Group, Inc. (NYSE Amex: PXG) specializes in quality comfort women's and men's footwear with a design focus on fitting features. Phoenix Footwear designs, develops, markets and sells footwear in a wide range of sizes and widths under the brands Trotters(R), SoftWalk(R), and H.S. Trask(R). The brands are primarily sold through department stores, leading specialty and independent retail stores, mail order catalogues and internet retailers and are carried by approximately 650 customers in more than 900 retail locations throughout the U.S. Phoenix Footwear has been engaged in the manufacture or importation and sale of quality footwear since 1882. The Company reported a net loss of $1.70 million on $17.26 million of net sales for the year ended Jan. 1, 2011, compared with a net loss of $6.99 million on $18.76 million of net sales during the prior year. The Company's balance sheet at Jan. 1, 2011 showed $10.74 million in total assets, $7.90 million in total liabilities and $2.84 million in total stockholders' equity. As reported by the TCR on April 18, 2011, Mayer Hoffman McCann P.C., San Diego, Calif., 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 suffered recurring losses and negative cash flows from continuing operations. PIEDMONT CENTER: Trustee Wants to Employ Nelson as Accountant ------------------------------------------------------------- John A. Northern, as the Chapter 11 Trustee for Piedmont Center Investments, LLC, seeks approval of the employment of Lehman Pollard of Nelson & Company, PA, as accountant. Lehman Pollard will prepare and file all necessary tax returns for the estate, review financial records, and to perform other services as may be requested by the Trustee. Mr. Pollard is a duly licensed C.P.A. with experience in these matters. Mr. Pollard submits that Nelson & Company, PA is disinterested as that term is defined in 11 U.S.C. Section 101(14). About Piedmont Center Investments Raleigh, North Carolina-based Piedmont Center Investments, LLC, owns, leases, and manages seven shopping centers located in (i) Graham, Alamance County, North Carolina; (ii) Mebane, Alamance County, North Carolina; (iii) Pittsboro, Chatham County, North Carolina; (iv) Gibsonville, Guilford County, North Carolina; (v) Murfreesboro, Hertford County, North Carolina; (vi) Nashville, Nash County, North Carolina; and (vii) Roxboro, Person County, North Carolina. PROSPECT STUDIOS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Prospect Studios, L.P. 7001 North Locust, Suite 101 Gladstone, MO 64118 Bankruptcy Case No.: 12-40548 Chapter 11 Petition Date: February 16, 2012 Court: United States Bankruptcy Court Western District of Missouri (Kansas City) Judge: Arthur B. Federman Debtor's Counsel: Jonathan A. Margolies, Esq. MCDOWELL RICE SMITH & BUCHANAN 605 W. 47th Street, Suite 350 Kansas City, MO 64112 Tel: (816) 753-5400 Fax: (816) 753-9996 E-mail: jmargolies@mcdowellrice.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/mowb12-40548.pdf The petition was signed by Susan I. Rose, general partner. PURSELL HOLDINGS: Wins Court Approval of Reorganization Plan ------------------------------------------------------------ The Hon. Jerry W. Venters of the the U.S. Bankruptcy Court for the Western District of approved Missouri Pursell Holdings LLC's First Amended Disclosure Statement dated Dec. 6, 2011, and confirmed the Debtor's Plan of Reorganization. As reported in the Troubled Company Reporter on Oct. 28, 2011, under the plan, administrative expenses and other allowed claims will be treated in a manner consistent with the requirements of the Bankruptcy Code. The holders of secured allowed claims, are classified separately within Classes 1 through 12. The holders of unsecured allowed claims with priority are classified separately within Class 13. The holders of general unsecured Allowed Claims are classified as Class 14. The holders of contingent, unliquidated secured Claims are classified as Class 15. The Claims by the equity owners of the Debtor are classified as Class 16 claims. These holders will receive the treatment specified for such Classes in the Plan. The Debtor will execute the Plan through a continuation of its operations as contemplated under the Plan. The operation of the Debtor's commercial leasing business is expected to generate sufficient operating revenue to pay all secured Allowed Claims over an extended period of time in accordance with the Plan, to pay allowed administrative claims, and to pay the proposed dividend to unsecured Allowed Claims in accordance with the Plan. The Debtor's Agreements with Morrill & Janes Bank, Bank Liberty, and Pony Express Bank provide for the orderly liquidation of its remaining residential real estate holdings without further burdening the Debtor's commercial leasing business. The Debtor's only remaining real estate will be commercial property. The Debtor will continue to retain its membership interest in North River Holding, LLC, but it has not guaranteed its debt and has no obligation to make capital contributions under its membership agreement. The separation of the residential development business from the remaining commercial real estate leasing business should allow the Debtor to ultimately regain its financial footing. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/PURSELL_disclosurestatement.pdf About Pursell Holdings Liberty, Missouri-based Pursell Holdings, LLC, filed for Chapter 11 bankruptcy protection (Bankr. W.D. Mo. Case No. 11-40999) on March 10, 2011. Frank Wendt, Esq., Brown & Ruprecht, P.C., serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed $12,204,248 in assets and $23,382,741 in debts. Affiliate Damon Pursell Construction Company filed a separate Chapter 11 petition (Bankr. W.D. Mo. Case No. 10-44965) on Sept. 15, 2010. The U.S. Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Pursell Holdings LLC have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest develop among the creditors. The Debtor's proposed Plan of reorganization was filed on Oct. 3, 2011. QUALITY DISTRIBUTION: Teton Cuts Equity Stake to 1.9% ----------------------------------------------------- Teton Capital Partners, L.P., and its affiliates disclosed in an amended Schedule 13G filed with the U.S. Securities and Exchange Commission that, as of Dec. 31, 2011, they beneficially own 456,280 shares of common stock of Quality Distribution, Inc., representing 1.9% of the shares outstanding. A full-text copy of the regulatory filing is available at http://is.gd/3uF6bs About Quality Distribution Quality Distribution, LLC, and its parent holding company, Quality Distribution, Inc., are headquartered in Tampa, Florida. The company is a transporter of bulk liquid and dry bulk chemicals. The company's 2010 revenues are approximately $686 million. Apollo Management, L.P., owns roughly 30% of the common stock of Quality Distribution, Inc. The Company's balance sheet at Sept. 30, 2011, showed $304.31 million in total assets, $410.18 million in total liabilities and a $105.87 million total shareholders' deficit. * * * As reported by the Troubled Company Reporter on Feb. 18, 2011, Moody's Investors Service said the $38 million public offering of 4 million shares of Quality Distribution's common stock on Feb. 9, 2011, does not affect Quality's 'Caa1' corporate family and probability of default ratings with a positive outlook. However, Moody's notes that the intended debt reduction at par from $17.5 million of the proceeds would be viewed favorably. In the Nov. 8, 2010 edition of the TCR, Standard & Poor's Ratings Services said that it has raised its corporate credit ratings on U.S.-based Quality Distribution Inc. to 'B' from 'B-'. S&P also removed the ratings from CreditWatch, where S&P had placed them with positive implications on Oct. 28, 2010, following the launch of the bond offering. The outlook is stable. "The rating action reflects the improvement in Quality Distribution's financial profile after completing its refinancing," said Standard & Poor's credit analyst Anita Ogbara. "Following the transaction, S&P expects Quality Distribution to benefit from lower interest expense, improved cash flow adequacy, and a substantial reduction in debt maturities over the next few years." QUALITY DISTRIBUTION: Wellington Holds 6.6% Equity Stake -------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Wellington Management Company, LLP, disclosed that, as of Dec. 31, 2011, it beneficially owns 1,578,254 shares of common stock of Quality Distribution, Inc., representing 6.61% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/aVoUHv About Quality Distribution Quality Distribution, LLC, and its parent holding company, Quality Distribution, Inc., are headquartered in Tampa, Florida. The company is a transporter of bulk liquid and dry bulk chemicals. The company's 2010 revenues are approximately $686 million. Apollo Management, L.P., owns roughly 30% of the common stock of Quality Distribution, Inc. The Company's balance sheet at Sept. 30, 2011, showed $304.31 million in total assets, $410.18 million in total liabilities and a $105.87 million total shareholders' deficit. * * * As reported by the Troubled Company Reporter on Feb. 18, 2011, Moody's Investors Service said the $38 million public offering of 4 million shares of Quality Distribution's common stock on Feb. 9, 2011, does not affect Quality's 'Caa1' corporate family and probability of default ratings with a positive outlook. However, Moody's notes that the intended debt reduction at par from $17.5 million of the proceeds would be viewed favorably. In the Nov. 8, 2010 edition of the TCR, Standard & Poor's Ratings Services said that it has raised its corporate credit ratings on U.S.-based Quality Distribution Inc. to 'B' from 'B-'. S&P also removed the ratings from CreditWatch, where S&P had placed them with positive implications on Oct. 28, 2010, following the launch of the bond offering. The outlook is stable. "The rating action reflects the improvement in Quality Distribution's financial profile after completing its refinancing," said Standard & Poor's credit analyst Anita Ogbara. "Following the transaction, S&P expects Quality Distribution to benefit from lower interest expense, improved cash flow adequacy, and a substantial reduction in debt maturities over the next few years." QUANTUM FUEL: Capital Ventures Ceases to Hold 5% Equity Stake ------------------------------------------------------------- Capital Ventures International and Heights Capital Management, Inc., disclosed in an amended Schedule 13G filed with the U.S. Securities and Exchange Commission that, as of Dec. 31, 2011, they beneficially own 315,789 shares of common stock of Quantum Fuel Systems Technologies Worldwide, Inc., representing 1.9% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/8ssyxi About Quantum Fuel Based in Irvine, California, Quantum Fuel Systems Technologies Worldwide, Inc., is a fully integrated alternative energy company and considers itself a leader in the development and production of advanced clean propulsion systems and renewable energy generation systems and services. Quantum Fuel and its senior lender, WB QT, LLC, entered into a Ninth Amendment to Credit Agreement and a Forbearance Agreement on Jan. 3, 2011. The Senior Lender agreed to provide the Company with a $5.0 million non-revolving line of credit, which may be drawn upon at any time prior to April 30, 2011. Advances under the New Line of Credit do not bear interest -- unless an event of default occurs, in which case the interest rate would be 10% per annum -- and mature on April 30, 2011. The Senior Lender also agreed to forbear from accelerating the maturity date for any portion of the Senior Debt Amount and from exercising any of its rights and remedies with respect to the Senior Debt Amount until April 30, 2011. The Company reported a net loss attributable to stockholders of $11.03 million on $20.27 million of total revenue for the year ended Apri1 30, 2011, compared with a net loss attributable to stockholders of $46.29 million on $9.60 million of total revenue during the prior year. The Company reported a net loss attributable to stockholders of $16.26 million on $19.77 million of total revenue for the six months ended Oct. 31, 2011, compared with a net loss attributable to stockholders of $3.06 million on $7.44 million of total revenue for the same period a year ago. The Company's balance sheet at July 31, 2011, showed $74.15 million in total assets, $31.62 million in total liabilities, and $42.53 million total stockholders' equity. Ernst & Young LLP, in Orange County, California, noted that Quantum Fuel's recurring losses and negative cash flows combined with the Company's existing sources of liquidity and other conditions raise substantial doubt about the Company's ability to continue as a going concern. Possible Bankruptcy The Company anticipates that it will need to raise a significant amount of debt or equity capital in the near future in order to repay certain obligations owed to the Company's senior secured lender when they mature. As of June 15, 2011, the total amount owing to the Company's senior secured lender was approximately $15.5 million, which includes approximately $12.5 million of principal and interest due under three convertible promissory notes that are scheduled to mature on Aug. 31, 2011, and a $3.0 million term note that is potentially payable in cash upon demand beginning on Aug. 1, 2011, if the Company's stock is below $10.00 at the time demand for payment is made. If the Company is unable to raise sufficient capital to repay these obligations at maturity and the Company is otherwise unable to extend the maturity dates or refinance these obligations, the Company would be in default. The Company said it cannot provide any assurances that it will be able to raise the necessary amount of capital to repay these obligations or that it will be able to extend the maturity dates or otherwise refinance these obligations. Upon a default, the Company's senior secured lender would have the right to exercise its rights and remedies to collect, which would include foreclosing on the Company's assets. Accordingly, a default would have a material adverse effect on the Company's business and, if the Company's senior secured lender exercises its rights and remedies, the Company would likely be forced to seek bankruptcy protection. QUANTUM FUEL: Alphabet Partners Discloses 9.7% Equity Stake ----------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Alphabet Partners, LP, Alphabet Management, LLC, MOG Capital, LLC, and Jason Adler disclosed that, as of Dec. 31, 2011, they beneficially own 2,674,209 shares of common stock of Quantum Fuel Systems Technologies Worldwide, Inc., representing 9.7% of the shares outstanding. A full-text copy of the regulatory filing is available at http://is.gd/VdP8Sj About Quantum Fuel Based in Irvine, California, Quantum Fuel Systems Technologies Worldwide, Inc., is a fully integrated alternative energy company and considers itself a leader in the development and production of advanced clean propulsion systems and renewable energy generation systems and services. Quantum Fuel and its senior lender, WB QT, LLC, entered into a Ninth Amendment to Credit Agreement and a Forbearance Agreement on Jan. 3, 2011. The Senior Lender agreed to provide the Company with a $5.0 million non-revolving line of credit, which may be drawn upon at any time prior to April 30, 2011. Advances under the New Line of Credit do not bear interest -- unless an event of default occurs, in which case the interest rate would be 10% per annum -- and mature on April 30, 2011. The Senior Lender also agreed to forbear from accelerating the maturity date for any portion of the Senior Debt Amount and from exercising any of its rights and remedies with respect to the Senior Debt Amount until April 30, 2011. The Company reported a net loss attributable to stockholders of $11.03 million on $20.27 million of total revenue for the year ended Apri1 30, 2011, compared with a net loss attributable to stockholders of $46.29 million on $9.60 million of total revenue during the prior year. The Company reported a net loss attributable to stockholders of $16.26 million on $19.77 million of total revenue for the six months ended Oct. 31, 2011, compared with a net loss attributable to stockholders of $3.06 million on $7.44 million of total revenue for the same period a year ago. The Company's balance sheet at July 31, 2011, showed $74.15 million in total assets, $31.62 million in total liabilities, and $42.53 million total stockholders' equity. Ernst & Young LLP, in Orange County, California, noted that Quantum Fuel's recurring losses and negative cash flows combined with the Company's existing sources of liquidity and other conditions raise substantial doubt about the Company's ability to continue as a going concern. Possible Bankruptcy The Company anticipates that it will need to raise a significant amount of debt or equity capital in the near future in order to repay certain obligations owed to the Company's senior secured lender when they mature. As of June 15, 2011, the total amount owing to the Company's senior secured lender was approximately $15.5 million, which includes approximately $12.5 million of principal and interest due under three convertible promissory notes that are scheduled to mature on Aug. 31, 2011, and a $3.0 million term note that is potentially payable in cash upon demand beginning on Aug. 1, 2011, if the Company's stock is below $10.00 at the time demand for payment is made. If the Company is unable to raise sufficient capital to repay these obligations at maturity and the Company is otherwise unable to extend the maturity dates or refinance these obligations, the Company would be in default. The Company said it cannot provide any assurances that it will be able to raise the necessary amount of capital to repay these obligations or that it will be able to extend the maturity dates or otherwise refinance these obligations. Upon a default, the Company's senior secured lender would have the right to exercise its rights and remedies to collect, which would include foreclosing on the Company's assets. Accordingly, a default would have a material adverse effect on the Company's business and, if the Company's senior secured lender exercises its rights and remedies, the Company would likely be forced to seek bankruptcy protection. RCR PLUMBING: Wants Decision on Leases Extended for 90 Days ----------------------------------------------------------- RCR Plumbing and Mechanical, Inc., asks the U.S. Bankruptcy Court for the Central District of California to extend, pursuant to Sections 365(d)(4) of the Bankruptcy Code, the deadline for the Debtors to assume or reject unexpired leases of two commercial real properties for 90 days. Kyra E. Andrassy, Esq., counsel for the Debtor, tells the Court that the Debtor has five separate commercial real property leases, although three of them are month to month leases. The leases for property in Fremont and Sacramento are longer term leases, and the Debtor is not yet prepared to make decision about whether to assume or reject these leases because it is still evaluating its long-term prospects. About RCR Plumbing Founded in 1977, Riverside, California-based RCR Plumbing and Mechanical Inc. is one of the largest plumbing subcontractors in the West Coast. In 1999, RCR Plumbing was acquired by American Plumbing and Mechanical Inc. On Oct. 13, 2003, AMPAM and its affiliated entities, including RCR Plumbing, filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Lead Case No. 03-55789) in San Antonio. Pursuant to a plan of reorganization, RCR Plumbing received a discharge of any liability arising from contracts completed prior to Aug. 2, 2004, the date the plan was confirmed. The plan disaggregated RCR Plumbing from AMPAM. RCR Plumbing filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-41853) on Oct. 12, 2011. RCR Plumbing blamed a weak construction market and increased insurance costs. Judge Wayne E. Johnson oversees the case. Evan D. Smiley, Esq., and Kyra E. Andrassy, Esq. at Weiland, Golden, Smiley et al., serve as the Debtor's counsel. Sidley Austin LLP as its special labor and employment counsel BSW & Associates as financial advisor. Kurtzman Carson Consultants LLC serves as noticing agent. In its petition, RCR Plumbing estimated $10 million to $50 million in assets and debts. The petition was signed by Robert C. Richey, president/CEO. The Official Committee of Unsecured Creditors tapped Venable LLP as its counsel. R.E. LOANS: Wells Fargo Paid in Full Through Exit Facility ---------------------------------------------------------- R.E. Loans, LLC, et al., filed on Feb. 1, 2012, a proposed Joint Chapter 11 Plan of Reorganization and an explanatory disclosure statement. The holders of interests in R.E. Loans will not receive or retain anything on account of their interests, and the equity in the successor to R.E. Loans, hereinafter referred to as "NewCo" will be transferred to the Liquidating Trust for the benefit of the Debtors' creditors. NewCo will also acquire all of the REO Property currently owned by Capital Salvage and R.E. Future, each of which owns some of the REO Property on which R.E. Loans has previously foreclosed, subject to the Liens provided for in the Plan. The Plan that is described in this Disclosure Statement is a reorganization Plan. The Plan is intended to maximize the recoveries of Creditors by (1) transferring all Assets of the Debtors, other than Causes of Action, to NewCo, (2) issuing the New Members Interest in NewCo to the Liquidating Trust for the benefit of Creditors, and (3) transferring the Causes of Action to the Liquidating Trust, which will investigate and prosecute or settle the Causes of Action and distribute the proceeds thereof to the Beneficiaries. The Liquidating Trustee will be an independent third party approved by the Court. Administrative Priority Claims, Priority Taxes, and other Priority Claims will be paid in full in Cash on the Effective Date or as soon as each individual Claim is Allowed. These payments will be funded through draws under the Exit Facility. The Plan designates three series of Classes of Claims and Interests, which includes all Claims against, and Interests in each of the Debtors. The Debtors have not attempted to estimate the percentage recoveries for each Class, because the percentage recoveries for Noteholders and General Unsecured Creditors will be impacted by the fundamental question of whether the Noteholders' Claims are subordinated to General Unsecured Creditors, which has not yet been resolved. Claims and Interests against R.E. Loans are classified into these Classes: Class Description Status Entitled to Vote ----- ------------------------ -------- ---------------- REL 1 Prepetition Lender Claims Impaired Yes REL 2 Other Secured Claims Unimpaired No REL 3 Secured Tax Claims Impaired Yes REL 4 Noteholders' Secured Claims Impaired Yes REL 5 Priority Non-Tax Claims Impaired Yes REL 6 General Unsecured Claims Impaired Yes REL 7 Intercompany Claims Impaired No REL 8 Subordinated Claims Impaired Yes REL 9 Interests in R.E. Loans Impaired No Claims and Interests against Capital Savage are classified into these Classes: Class Description Status Entitled to Vote ----- ------------------------ -------- ---------------- CS 1 Prepetition Lender Claims Impaired Yes CS 2 Other Secured Claims Unimpaired No CS 3 Secured Tax Claims Impaired Yes CS 4 Priority Non-Tax Claims Impaired Yes CS 5 General Unsecured Claims Impaired Yes CS 6 Intercompany Claims Impaired No CS 7 Subordinated Claims Impaired No CS 8 Interests in Capital Salvage Impaired No Claims and Interests against R.E. Future are classified into these Classes: Class Description Status Entitled to Vote ----- ------------------------ -------- ---------------- REF 1 Prepetition Lender Claims Impaired Yes REF 2 Other Secured Claims Unimpaired No REF 3 Secured Tax Claims Impaired Yes REF 4 Priority Non-Tax Claims Impaired Yes REF 5 General Unsecured Claims Impaired Yes REF 6 Intercompany Claims Impaired No REF 7 Subordinated Claims Impaired No REF 8 Interests in R.E. Future Impaired No The balance owing to Wells Fargo as of the Petition Date was approximately $68 million. This balance has been reduced to approximately $66 million as the result of sales during the Debtors' Chapter 11 cases. Wells Fargo, as the Holder of All Class 1 Claims will be refinanced and deemed to be indefeasibly paid in full in cash on the Effective Date through the Exit Facility. At this time, the Debtors anticipate that Wells Fargo will provide the Exit Facility on those terms and conditions as are acceptable in writing to Wells Fargo and NewCo. The Debtors reserve the right to modify the Plan to provide for an Exit Facility that is provided by a third party lender. The Exit Facility will be indefeasibly paid in full in cash prior to any Distributions to Holders of Allowed General Unsecured Claims or Noteholders. There will be no claims in REL Class 4 if the Noteholders' Claims are subordinated into REL Class 7. If the Noteholders' Claims are subordinated, they will receive the treatment under REL Class 7. If they are not subordinated, the Allowed REL Class 4 Claim of each Noteholder will be equal to its pro rata share of the REL Class 4 Collateral Value. Allowed REL Class 4 Claims will be paid through a New Second Lien Note executed by NewCo in favor of the Liquidating Trustee in the face amount of the REL Class 4 Collateral Value, which will replace the individual existing Notes held by the Noteholders. Each Noteholder will also be entitled to an REL Class 6 Claim for the amount owing to that Noteholder as of the Petition Date, minus its Pro Rata Share of the New Second Lien Note. NewCo will have the absolute right to sell the Collateral free and clear of the New Second Priority Security Interest securing the payment of the New Second Lien Note, with the sales proceeds payable to the Exit Facility Lenders to reduce the amounts owed under the Exit Facility, together with Secured Tax Claims. There will be no distributions to Holders of Allowed REL Class 4 Claims until the Exit Facility is indefeasibly paid in full in cash. The New Second Lien Note will accrue interest at the rate of 8% per annum from the Effective Date until it is paid in full. As the REL Class 4 Collateral is liquidated and Secured Tax Claims are paid, and after the Exit Facility is indefeasibly paid in full in cash in accordance with the Exit Facility Loan Documents, the New Second Lien Note will be paid from the disposition proceeds. The New Second Lien Note will be all due and payable five (5) years after the Effective Date. Each holder of an R.E. Loans Allowed General Unsecured Claim will receive a Beneficial Interest, based on which it will receive from the Liquidating Trust a Pro Rata Distribution of the net Trust Proceeds. The Liquidating Trustee will make Distributions to the holders of the Beneficial Interests from the net Liquidating Trust Proceeds in accordance with the provisions of the Liquidating Trust Agreement, and as provided for under the Plan and the Confirmation Order. The Debtors believe that there are no material Allowed Claims in CS Class 5. If any CS Class 5 Claims exist, each holder of a CS Allowed General Unsecured Claim will receive a Beneficial Interest, based on which it will receive from the Liquidating Trust a Pro Rata Distribution of the net Liquidating Trust Proceeds available for distribution to Liquidating Trust Interest Holders. The Debtors believe that there are no material Allowed Claims in REF Class 5. If any REF Class 5 Claims exist, each holder of a REF Allowed General Unsecured Claim will receive a Beneficial Interest, based on which it will receive from the Liquidating Trust a Pro Rata Distribution of the net Liquidating Trust Proceeds available for distribution to Beneficial Interest Holders. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/reloans.doc466.pdf About R.E. Loans R.E. Loans, LLC, was, for many years, in the business of providing financing to home builders and developers of real property. R.E. Future LLC and Capital Salvage own the real property obtained following foreclosure proceedings initiated by R.E. Loans against its borrowers. R.E. Loans is the sole shareholder of Capital Salvage and the sole member of R.E. Future. B-4 Partners LLC is the sole member of R.E. Loans. As a result of the multiple defaults by R.E. Loans' borrowers, R.E. Loans has transitioned from being a lender to becoming a property management company. Lafayette, California-based R.E. Loans, R.E. Future and Capital Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge Barbara J. Houser presides over the case. Stutman, Treister & Glatt Professional Corporation, in Los Angeles, serves as general bankruptcy counsel. Gardere, Wynne Sewell LLP, in Dallas, serves as Texas local counsel. James A. Weissenborn at Mackinac Partners serves as R.E. Loans' chief restructuring officer. The Debtors have engaged Hines Smith Carder as special litigation counsel and Latham and Watkins LLP, as special counsel to consult and advise in connection with litigation relating to Ranch Las Flores, LLC, one of the properties on which the Debtors currently hold a Note Receivable. The Debtors tapped Alixpartners LLP, as noticing agent. R.E. Loans disclosed $713,622,015 in assets and $886,002,786 in liabilities as of the Chapter 11 filing. Akin Gump Strauss Hauer & Feld, LLP, in Dallas, represents the Official Committee of Note Holders as general reorganization counsel. Diamond McCarthy, LLP, represents the Noteholders' Committee as special litigation counsel. FTI Financial Advisors serves as financial consultants to the Noteholders' Committee. REAL MEX: Court Approves Imperial Capital as Financial Advisor -------------------------------------------------------------- The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware authorized Real Mex Restaurants Inc. and its affiliated debtors to employ Imperial Capital LLC as their financial advisor and investment banker. As reported in the Troubled Company Reporter on Nov. 23, 2011, as financial advisor, Imperial Capital will assist the Debtors in developing a potential restructuring plan, financing or sale transaction, in preparing solicitation materials, and in identifying and contacting qualified buyers to participate in the financing or sale transaction. The firm will also be tasked to provide an analysis of the Debtors' business, properties, management and financial condition. In exchange for its services, Imperial Capital will be paid a monthly advisory fee of $125,000, and will receive a restructuring, financing or sale transaction fees. The firm will also be reimbursed for its expenses. The Debtors also agreed to indemnify the firm for any liability resulting from its employment. In court papers, Imperial Capital assured the Court that it does not hold or represent interest adverse to the Debtors or their estates. 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: Johnson Associates Approved as Compensation Advisor ------------------------------------------------------------- The Hon. Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware authorized Real Mex Restaurants Inc. and its affiliated debtors to employ Johnson Associates, Inc., as compensation advisor. As reported in the Troubled Company Reporter on Dec. 30, 2011, as compensation advisor, will perform the advisory and other services that will be necessary during these cases with regards to testimony and other work in connection with the Debtors' request for approval of the Incentive Plan pursuant to the Incentive Plan Motion. Compensation will be payable to JAI on an hourly basis, plus reimbursement of actual, necessary expenses and other charges incurred by JAI. The current standard hourly rates are: Alan Johnson $640 Jeff Visithpanich $380 Staff and Associates $200 - $300 The Debtors assure the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. 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. REALOGY CORP: Bank Debt Trades at 7% Off in Secondary Market ------------------------------------------------------------ Participations in a syndicated loan under which Realogy Corp. is a borrower traded in the secondary market at 92.82 cents-on-the- dollar during the week ended Friday, Feb. 17, 2012, a drop of 0.68 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 425 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 10, 2016, and carries Moody's B1 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 164 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. As reported by the Troubled Company Reporter on Feb. 8, 2012, Standard & Poor's assigned its 'B-' issue-level rating to real estate and relocation services company Realogy Corp.'s $593 million 7.625% senior secured first-lien notes due 2020. "We also assigned this debt our recovery rating of '1', indicating our expectation for very high (90% to 100%) recovery for noteholders in the event of a payment default," S&P said. "Further, we assigned our issue-level rating of 'CCC-' to Realogy's $325 million 9% senior secured first-and-a-half-lien notes due 2020 and assigned the new debt our recovery rating of '5', indicating our expectation for modest (10% to 30%) recovery for noteholders in the event of a payment default," S&P said. "We also raised our issue-level rating on Realogy's existing first-and-a-half-lien notes to 'CCC-' from 'CC' and removed the issue from CreditWatch with positive implications, where it was placed on Jan. 25, 2012. This action reflects a lower amount of first-lien debt outstanding under our simulated default scenario than under our previous analysis, and as a result, we revised our recovery rating on the existing notes to '5' from '6'," S&P said. The TCR reported on Jan. 31, 2012, Moody's Investors Service assigned a B1 rating to $593 million of proposed senior secured first-lien notes and a Caa1 rating to $325 million of proposed senior secured (first and half lien) notes of Realogy Corporation (Realogy). Concurrently, all other ratings including the Caa2 Corporate Family Rating (CFR), Caa3 Probability of Default Rating (PDR) and SGL-4 Speculative Grade Liquidity Rating were affirmed. The rating outlook remains stable. The proceeds from the note offerings will be used to prepay $629 million of term loan borrowings and repay borrowings under the revolving credit facility. Concurrent with the closing of the note offerings, the $289 million revolving credit facility set to mature in April 2013 will terminate. Following completion of the note offerings, availability under the $363 million revolving credit facility expiring in 2016 will be approximately $239 million. About Realogy Corp. Realogy Corp. -- http://www.realogy.com/-- a global provider of real estate and relocation services with a diversified business model that includes real estate franchising, brokerage, relocation and title services. Realogy's world-renowned brands and business units include Better Homes and Gardens Real Estate, CENTURY 21, Coldwell Banker, Coldwell Banker Commercial, The Corcoran Group, ERA, Sotheby's International Realty, NRT LLC, Cartus and Title Resource Group. Collectively, Realogy's franchise systems have around 15,000 offices and 270,000 sales associates doing business in 92 countries around the world. Headquartered in Parsippany, N.J., Realogy is owned by affiliates of Apollo Management, L.P., a leading private equity and capital markets investor. Realogy fully supports the principles of the Fair Housing Act. Realogy reported a net loss of $285 million on $3.16 billion of net revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $7 million on $3.12 billion of net revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $7.89 billion in total assets, $9.24 billion in total liabilities, and a $1.34 billion total deficit. Realogy has 'Caa2' corporate family rating and 'Caa3' probability of default rating, with positive outlook, from Moody's. The rating outlook is positive. Moody's said in January 2011 that the 'Caa2' CFR and 'Caa3' PDR reflects very high leverage, negative free cash flow and uncertainty regarding the timing and strength of a recovery of the residential housing market in the U.S. Moody's expects Debt to EBITDA of about 14 times for the 2010 calendar year. Despite the recently completed and proposed improvements to the debt maturity profile, the Caa2 CFR continues to reflect Moody's view that current debt levels are unsustainable and that a substantial reduction in debt levels will be required to stabilize the capital structure. In February, Standard & Poor's Ratings Services raised its corporate credit rating on Realogy Corp. to 'CCC' from 'CC'. The rating outlook is positive. RED EAGLE: Taps Matrix to Sell 17 Gas Stations ---------------------------------------------- Convenience Store News reports that Red Eagle Oil Inc. is looking to sell its 17 gas stations and convenience stores. Sixteen of the locations are in Wyoming, the other is in Hardin, Montana. According to the report, the Company hired Matrix Capital Markets Group Inc. to market the properties. The sale process is being conducted in accordance with the company's Chapter 11 case in the U.S. Bankruptcy Court for the District of Wyoming. The report notes that bids may be submitted for individual stores, multiple stores or all of the stores. The stores are being sold free and clear of all liens, claims and encumbrances. About Red Eagle Oil Red Eagle Oil, Inc., sells fuel wholesale as a distributor and hauls condensate, crude oil and other oil field commodities with a fleet of 26 trucks and 60 trailers. Red Eagle Oil is owned by family members Dale, Judy, Bryan, Brad and Scott Hinze. Based in Cody, Wyoming, Red Eagle Oil filed for Chapter 11 bankruptcy protection (Bankr. D. Wyo. Case No. 11-20857) on Aug. 1, 2011. Judge Peter J. McNiff presides over the case. Bradley T. Hunsicker, Esq., at Winship & Winship, P.C., represents the Debtor. In its petition, the Debtor did not state assets but estimated between $1 million and $10 million in debts. SAN PASQUAL CASINO: S&P Withdraws 'BB-' Issuer Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its ratings, including its 'BB-' issuer credit rating, on Valley Center, Calif.-based San Pasqual Casino Development Group (SPCDG) at the request of the issuer. The San Pasqual Band of Mission Indians created SPCDG to operate Valley View Casino. SPCDG recently refinanced its senior notes due 2013 with a new credit facility, which will not be rated. SCHOMAC GROUP: Plan Exclusivity Expires March 31 ------------------------------------------------ The Hon. Eileen W. Hollowell of the U.S. Bankruptcy Court for the District of Arizona extended until March 31, 2012, The Schomac Group, Inc., et al.'s exclusive period to solicit acceptances for the proposed Plan of Reorganization. As reported in the Troubled Company Reporter on Feb. 9, 2012, the Debtors asked the Court to extend the exclusive period until the conclusion of the plan confirmation hearing, which under the present circumstances will not be held until at least mid-March 2012. The Plan and accompanying Disclosure Statement were filed by the Debtors on Dec. 6, 2011. Due to the Court's busy docket and winter holidays, the hearing on the Joint Disclosure Statement is scheduled for Feb. 7. The Debtors' exclusive plan solicitation period, on the other hand, terminates on Feb. 6. About The Schomac Group Tucson, Arizona-based The Schomac Group, Inc.'s primary business is to act as a holding company for its various subsidiaries, which are actively involved in diverse segments of the real estate industry. Schomac's sole shareholders are two trusts controlled by W. Michael Schoff. Schomac previously managed a portfolio of approximately 200 self-storage facilities, 72 of which were sponsored and managed by Schomac with TEDCO, Inc., being a substantial investor. Schomac also sponsored and managed a portfolio of apartment complexes, including the management of roughly 40 apartment complexes, as many as 16 of which were owned by Schomac over time. TEDCO's primary business is to act as a holding company for its various subsidiaries, which are actively involved in diverse segments of the real estate industry. TEDCO's sole shareholder is W. Michael Schoff. SRE Investments, LP owns eleven residential lots of roughly 5 acres each in Saguaro Ranch, a subdivision located in the Tortolita Mountains in Marana, Pima County, Arizona. SRE is 75.921% owed by Schomac. NSS RV Central Limited Partnership owns the real estate known as RV Central, a recreational vehicle and self storage facility located at 6260 North Travel Center Drive in Marana, Pima County, Arizona. NSS RV is 100% owned by Schomac. Schomac Group and TEDCO filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case Nos. 11-22717 and 11-22720) on Aug. 9, 2011. In its schedules, Schomac Group disclosed $48,929,897 in total assets and $34,583,005 in total liabilities. Judge Eileen W. Hollowell presides over the cases. SEARCHMEDIA HOLDINGS: Christian Leone Holds 6.3% Equity Stake ------------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Christian Leone and his affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 1,306,632 shares of common stock of SearchMedia Holdings Limited representing 6.3% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/wX50oz 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. SEQUENOM INC: RA Capital Discloses 4.1% Equity Stake ---------------------------------------------------- RA Capital Management, LLC, and its affiliates filed with the U.S. Securities and Exchange Commission an amended Schedule 13G disclosing that, as of Jan. 31, 2012, they beneficially own 4,681,026 shares of common stock of Sequenom, Inc., representing 4.10% of the shares outstanding. A full-text copy of the regulatory filing is available at http://is.gd/Q5te9Y About Sequenom Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. Sequenom reported a net loss of $120.85 million on $47.45 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of $71.01 million on $37.86 million of total revenue during the prior year. The Company also reported a net loss of $51.98 million on $40.42 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $98.82 million on $33.70 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $152.99 million in total assets, $42.13 million in total liabilities and $110.85 million in total stockholders' equity. Ernst & Young LLP of San Diego, California, in its audit report attached to the 2010 financial statements, did not include a going concern qualification for Sequenom. E&Y, in its report on the 2009 results, expressed substantial doubt against Sequenom's ability as a going concern, noting that the Company "has incurred recurring operating losses and does not have sufficient working capital to fund operations through 2010." SEQUENOM INC: Samuel Isaly Discloses 6.8% Equity Stake ------------------------------------------------------ In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Samuel D. Isaly and his affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 6,753,000 shares of common stock of Sequenom, Inc., representing 6.80% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/rHjE4Y About Sequenom Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. Sequenom reported a net loss of $120.85 million on $47.45 million of total revenue for the year ended Dec. 31, 2010, compared with a net loss of $71.01 million on $37.86 million of total revenue during the prior year. The Company also reported a net loss of $51.98 million on $40.42 million of total revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $98.82 million on $33.70 million of total revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $152.99 million in total assets, $42.13 million in total liabilities and $110.85 million in total stockholders' equity. Ernst & Young LLP of San Diego, California, in its audit report attached to the 2010 financial statements, did not include a going concern qualification for Sequenom. E&Y, in its report on the 2009 results, expressed substantial doubt against Sequenom's ability as a going concern, noting that the Company "has incurred recurring operating losses and does not have sufficient working capital to fund operations through 2010." SNOKIST GROWERS: Keybank et al., Want Trustee Motion Resolved ------------------------------------------------------------- Creditor KeyBank National Association, on behalf of its co-lender, Rabo Agrifinance, Inc., notifies the U.S. Bankruptcy Court for the Eastern District of Washington that the lenders consent to Snokist Growers' use of cash collateral, pending the Court's ruling on the lenders' motion seeking the appointment of a trustee, or conversion of the case to Chapter 7. According to Keybank, the Debtor has failed to provide, and cannot under any circumstances provide, adequate protection in any of the recognized methods. Keybank notes that the Debtor proposes to spend $6,272,472 of cash collateral for the period from Feb. 1, 2012, through June 1, or roughly $1,254,494 per month with adequate protection payments to lenders in the form of contract interest payments of $146,950 monthly. During that same period, the Debtor projects revenues from its existing broker's sales of its inventory to generate $13,108,100, resulting in marginal costs of sale of approximately 47%. In other words, the Debtor projects it will consume roughly half the amount of cash collateral now on hand or generated during this period by selling inventory through its labeling and canning operations and its current broker. These costs are more than twice the industry average of 25% for labeling, packaging and shipping the canned inventory to a wholesale buyer as approximated by the Graffis Declaration. Keybank states that if the Debtor's current rate of cash consumption is permitted to continue, secured creditors will not receive the indubitable equivalent of the present value of their secured claims. As of Jan. 26, 2012, the lenders will hold secured claims totaling approximately $27,110,857, plus attorney fees, against cash collateral. In addition, the Debtor owes approximately $9 million for purchases of pears in 2011. Some of those growers may hold processor liens which are prior to the lenders. About Snokist Growers Headquartered in Yakima, Washington Snokist Growers -- http://www.snokist.com/-- is a century-old cooperative of fruit growers. Snokist provides fresh and processed pears, apples, cherries, plums, and nectarines. Snokist Growers filed for Chapter 11 bankruptcy (Bankr. E.D. Wash. Case No. 11-05868) on Dec. 7, 2011, with plans to liquidate after sales couldn't recover from allegations that it violated food- safety rules. Judge Frank L. Kurtz presides over the case. Lawyers at Bailey & Busey LLC serve as the Debtor's counsel. In its petition, the Debtor scheduled $69,567,846 in assets and $73,392,906 in liabilities. The petition was signed by Jim Davis, president. Counsel for lender Rabo AgriFinance, as agent for itself and KeyBank, is James Ray Streinz, Esq. -- rays@mcewengisvold.com -- at McEwen Gisvold, LLP. Counsel for KeyBank National Association is Bruce W. Leaverton, Esq., at Lane Powell, P.C., in Seattle. Robert D. Miller Jr., the United States Trustee for Region 14, appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Snokist Growers. The Committee is represented by Metiner G. Kimel, Esq., at Kimel Law Offices. Keybank is represented by: Bruce W. Leaverton, Esq. Tereza Simonyan, Esq. LANE POWELL PC 1420 Fifth Avenue, Suite 4100 Seattle, Washington 98101-2338 Tel: (206) 223-7000 Fax: (206) 223-7107 SOLYNDRA LLC: Slams Ex-Workers' Bid to Nix Lender Protections ------------------------------------------------------------- Hilary Russ at Bankruptcy Law360 reports that Solyndra LLC, backed by the U.S. government, defended itself Wednesday against demands by a putative class of former employees that it retract legal protections it granted to secured lenders in Delaware bankruptcy court. Law360 relates that the Company said the move by ex-employees, who are suing the company over mass layoffs, to get certain release from liability provisions rescinded "contains strong rhetoric, but no substance." About Solyndra LLC Founded in 2005, Solyndra LLC is a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. In the Chapter 11 cases, the Debtors are pursuing a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors are unable to identify any such potential buyers, an orderly liquidation of the Debtors' assets for the benefit of their creditors. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Solyndra LLC. The Committee has tapped Blank Rome LLP as counsel. Solyndra is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are Evergreen Solar and start-up Spectrawatt Inc., both of which filed in August, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. Solyndra did not receive acceptable offers to buy the business as a going concern. It is going ahead with plans for piecemeal auctions of the assets to begin Feb. 22. Solyndra auctioned non-core assets and obtained $6.2 million. Solyndra also took in $1.86 million from the sale of miscellaneous equipment. Solyndra LLC retained the exclusive right for filing a Chapter 11 plan until April 3. SOLYNDRA LLC: Taps Jones Lang to Market Fremont, Calif. Property ---------------------------------------------------------------- Solyndra LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Jones Lang LaSalle Brokerage, Inc., as real estate broker. JLL will market and sell the Debtors' property located at 47488 Kato Road, Fremont, California. The Debtors propose to pay JLL as transaction fee of $250,000 if the sale price of the property is lass than or equal to $45 million. If the sale price of the property is greater than $45 million, the transaction fee will be $250,000 plus 3% of the incremental amount above $45 million. The engagement will terminate on the earlier of (i) July 31, 2013, or (ii) the date of the closing of a sale or disposition of the property. In the event JLL is not entitled to a transaction fee, JLL may apply to the Court for reimbursement of its reasonable expenses up to $25,000. To the best of the Debtors' knowledge, JLL is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtors set a Feb. 22, 2012, hearing at 11:30 a.m., on their request to employ Jones Lang. About Solyndra LLC Founded in 2005, Solyndra LLC is a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. In the Chapter 11 cases, the Debtors are pursuing a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors are unable to identify any such potential buyers, an orderly liquidation of the Debtors' assets for the benefit of their creditors. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven unsecured creditors to serve on the Official Committee of Unsecured Creditors of Solyndra LLC. The Committee has tapped Blank Rome LLP as counsel. Solyndra is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are Evergreen Solar and start-up Spectrawatt Inc., both of which filed in August, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. Solyndra did not receive acceptable offers to buy the business as a going concern. It is going ahead with plans for piecemeal auctions of the assets to begin Feb. 22. SPANISH BROADCASTING: Caspian Owns 4.1% of Class A Shares --------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Caspian Capital LP and its affiliates disclosed that, as of Dec. 31, 2011, they beneficially own 170,257 shares of common stock of Class A common stock of Spanish Broadcasting System, Inc., representing 4.09% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/A4sN5X About Spanish Broadcasting Headquartered in Coconut Grove, Florida, Spanish Broadcasting System, Inc. -- http://www.spanishbroadcasting.com/-- owns and operates 21 radio stations targeting the Hispanic audience. The Company also owns and operates Mega TV, a television operation with over-the-air, cable and satellite distribution and affiliates throughout the U.S. and Puerto Rico. Its revenue for the twelve months ended Sept. 30, 2010, was approximately $140 million. The Company's balance sheet at Sept. 30, 2011, showed $495.67 million in total assets, $441.65 million in total liabilities, $92.34 million in cumulative exchangeable redeemable preferred stock, and a $38.33 million total stockholders' deficit. * * * In November 2010, Moody's Investors Service upgraded the corporate family and probability of default ratings for Spanish Broadcasting System, Inc., to 'Caa1' from 'Caa3' based on improved free cash flow prospects due to better than anticipated cost cutting and the expiration of an unprofitable interest rate swap agreement. Moody's said Spanish Broadcasting's 'Caa1' corporate family rating incorporates its weak capital structure, operational pressure in the still cyclically weak economic climate, generally narrow growth prospects (though Spanish language is the strongest growth prospect) given the maturity and competitive pressures in the radio industry, and the June 2012 maturity of its term loan magnify this challenge. In July 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Miami, Fla.-based Spanish Broadcasting System Inc. to 'B-' from 'CCC+', based on continued improvement in the company's liquidity position. The rating outlook is stable. "The rating action reflects S&P's expectation that, despite very high leverage, SBS will have adequate liquidity over the intermediate term to meet debt maturities, potential swap settlements, and operating needs until its term loan matures on June 11, 2012," said Standard & Poor's credit analyst Michael Altberg. STOCKDALE TOWER: Hires Foley Bezek as Special Counsel ----------------------------------------------------- Stockdale Tower 1 LLC asks the U.S. Bankruptcy Court for authority to employ Thomas G. Foley, Jr. and the law firm of Foley, Bezek, Behle & Curtis LLP as special counsel. The firm will represent the Debtor regarding disputes with its lender and affiliates of its lender. Neither Thomas Foley, Jr. nor FBBC has any interest or represents any interest adverse to the Debtor or its estate in any of the matters upon which it is engaged except for its representation of Terry Moreland. Mr. Moreland and his wife Preggy are the only members of Stockdale Tower, and Mr. Moreland has agreed to advance all costs relates to the representation of the Debtor by FBBC. The Morelands executed a Guaranty of Payment for the benefit of the original lender UBS Real Estate Investment Inc. FBBC has advised both the Debtor and Mr. Moreland to seek the advice of separate independent attorneys to advise them regarding any actual of potential conflicts of interest which may arise. Thomas G. Foley, Esq., attests that there exists a unity of interest between the interest of the Debtor and Terry Moreland. FBBC is not owed money by the Debtor or Mr. and Mrs. Moreland. Compensation paid by the Debtor to FBBC will strictly on a contingent fee basis, which contingent fee to be paid to FBBC will be based upon which of three separate alternatives discusses are accomplished by the Debtor with the assistance of FBBC. About Stockdale Tower Bakersfield, California-based Stockdale Tower 1 LLC filed for Chapter 11 bankruptcy (Bankr. E.D. Calif. Case No. 11-62167) on Nov. 7, 2011. Judge W. Richard Lee presides over the case. Scott T. Belden, Esq., and Jacob L. Eaton, Esq., at Klein, DeNatale, Goldner, Cooper, Rosenlieb & Kimball, LLP, serve as the Debtor's bankruptcy counsel. The firm disclosed $18,151,072 in assets and $17,870,212 in liabilities. SUMMER VIEW: Promises to Pay Creditors in Full, in Installments --------------------------------------------------------------- Judge Alan M. Ahart of the U.S. Bankruptcy Court for the Central District of California has approved the disclosure statement explaining the amended plan dated Jan. 16, 2012 of Summer View Sherman Oaks, LLC. The hearing on the confirmation of the Amended Plan is scheduled on Feb. 22, 2012, at 10:00 a.m. The critical provisions under the Amended Plan are: a. continuing operation of the Property, capital improvements of the Property, and continuing income and occupancy rate; b. listing the Property for sale immediately after the application to employ a real estate broker and enter into a listing agreement is granted with the target of closing escrow by September 2012. The sale should be completed through the assumption of the existing loan; c. contingency plan of operating the Property until the Maturity Date of July 11, 2014, in the event that the sale does not go through as planned; d. contingency plan to sell the Property to conventional sale prior to the Maturity Date without incurring yield to maintenance pre-paid penalties; and e. contingency provision that the Efim Sobol Trust, the member of the Debtor, will provide the Debtor with an unsecured line of credit to cover any cash shortfall during the time of operation of the Property in the amount of up to $500,000. Under the amended plan, general unsecured creditors will receive $24,339 (100% of their claims) in 8 equal quarterly payments commencing on the effective date. The sources of funds earmarked to pay creditors and interest- holders are: a. Proceeds from the sale of the Property; b. Debtor's cash on hand as of the Effective Date of the Plan; c. Payment reserve held by the Lender; and d. Post-confirmation income Administrative claims will be paid in full on the effective date. Administrative claims include amounts owed to Karasik Law Group LLP totaling $133,624.37 and to Clyde Holland totaling $153,151.85. Priority tax claims totaling $197,364 will also be paid in full on the effective date. The classification and treatment of claims under the Plan are: a. Class 1 - Allowed Secured Claims of U.S. Bank, owed $18,118,041, will receive monthly payments of $78,584 until the property is sold. According to loan documents, the loan must be paid off on July 11, 2014, with a balloon payment. b. Class 2 - Allowed Secured Claim of E. Rojas Landscape Inc., secured with a mechanic's lien ($12,078), will be paid in 12 quarterly installments of $1,007 (without interest), or from the proceeds of the sale if the property is sold before the creditor is paid in full. c. Class 3 - Priority claims tenant security deposits that are not currently due ($76,314) will be paid when due. This Class is unimpaired. d. Class 4 - Priority claims for tenant security deposits that became due prepetition ($590) will be paid in one payment before the effective date. This Class in unimpaired. e. Class 5 - Allowed Unsecured Claims, excluding Insiders, owed $24,340, will be paid in 8 quarterly payments of $3,042 (without interest), or from the proceeds of the sale, if sale occurred before the creditor is paid in full. f. Class 6 Interests will receive the balance of the proceeds after payments to all creditors. A copy of the Plan of Reorganization and the Disclosure Statement is available for free at: http://bankrupt.com/misc/SUMMERVIEW_ds.pdf About Summer View Sherman The West Hollywood, California-based Summer View Sherman Oaks, LLC, aka Summer View Sherman Oaks Apartments LLC, a single-asset real estate company, is the owner of a 169-unit apartment building locate at 15353 Weddington Street, in Sherman Oaks, California. The sole member of the Debtor is the Efim Sobol Family Trust Dated November 18, 1995. Dr. Efim Sobol's mother, Sonia Sobol, 88 years old, is the sole trustee and beneficiary of the Efim Sobol Trust. The Company filed for bankruptcy under Chapter 11 (Bankr. C.D. Calif. Case No. 11-19800) on Aug. 15, 2011. Judge Alan M. Ahart presides over the case. The Debtor disclosed $23,228,304 in assets and $16,535,378 in liabilities as of the Chapter 11 filing. The petition was signed by Sonia Sobol, member. Terry D. Shaylin, Esq., and Alik Segal, Esq., at Karasik Law Group, LLP, in Los Angeles, Calif., represent the Debtor as counsel. SUNGARD DATA: S&P Affirms 'B+' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Wayne, Pa.-based SunGard Data Systems Inc. The outlook is stable. "We also affirmed our 'BB' rating on the company's existing senior secured notes and 'BB' bank loan rating on its non-extended term loan B. The recovery rating on the loan remains '1', indicating that lenders can expect very high (90%-100%) recovery in the event of a payment default," S&P said. "In addition, we assigned our preliminary 'BB' bank loan ratings with a preliminary recovery rating of '1' to the extended term loan B and the renewed revolving credit facility," S&P said. "Finally, we affirmed our existing 'B' rating on the outstanding senior unsecured notes and our existing 'B-' rating on the outstanding subordinated notes," S&P said. "The ratings on software and technology services company SunGard reflect our expectation that the company's 'satisfactory' business risk profile and significant base of recurring revenues will continue to support its 'highly leveraged' financial risk profile," said Standard & Poor's credit analyst Jacob Schlanger. Ratings also reflect SunGard's healthy cash flow generation and strong position in the fragmented market for investment-support processing software. "Our stable outlook reflects SunGard's strong market position in diversified market segments and consistent operating performance. Our view that the company's private-equity ownership structure is likely to prevent sustained debt reduction currently limits any potential for an upgrade. The company's defensible market positions and high recurring revenue base lessen the potential for credit deterioration. However, sustained leverage in excess of 7x because of acquisitions or shareholder-friendly initiatives could lead to lower ratings," S&P said. SUPERIOR PROPERTY: Wellman & Warren OK'd as Litigation Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized Superior Property of 10621 Sepulveda, LLC, to employ Wellman & Warren LLP as its special litigation counsel As reported in the Troubled Company Reporter on Oct. 6, 2011, the primary assets of the Debtor's bankruptcy estate consist of certain real property and the potential proceeds of a lawsuit that is pending against Home Depot U.S.A., Inc. for breach of contract relating to a commercial lease agreement. The potential proceeds from the pending lawsuit total more than $20,000,000. At trial in the Home Depot Action, the Debtor prevailed against Home Depot on the issue of liability, but its damages were limited to $200,000 by an in limine motion. The Debtor is currently appealing the trial court's decision limiting its damages. The issue on appeal is a matter of first impression in the state of California -- whether a termination fee in a lease agreement is, per se, also a liquidated damages clause. The firm will render services including: * Appear at and argue appellate issues on Oct. 19, 2011; * If the appeal is successful, then prepare status reports; * If the appeal is successful, then prepare for and attend status conferences; * If the appeal is successful, then prepare for and attend trial; * If the appeal is successful, then negotiate with Home Depot U.S.A., Inc. regarding potential settlement; and * If the appeal is successful, then prepare all pleadings necessary to document settlement and obtain Court approval of that settlement. The firm will be paid: (i) An hourly fee of $200; (ii) 20% of the value of any gross recovery. In the event there is no recovery, the Firm will receive no compensation other than reimbursement of expenses, plus the hourly fee; (iii) A contingency fee that will be computed before calculation of costs and expenses paid to the Firm; (iv) If the recovery for the estate consists of payments to be made over a period of time, or other property not entirely cash or cash-equivalent, the contingency fee will be based on the present cash value of the recovery as determined by generally recognized accounting and appraisal standards. The contingency fee will be paid out of the first funds or property received by the estate to the extent that it is sufficient to cover the fees. The Debtor believes that the firm does not have an interest adverse to the Debtor or the estate, and that the Firm is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code. In the event that an actual conflict of interest may arise, the Debtor will immediately address that conflict through the termination of the firm. About Superior Property Based in Mission Hills, California, Superior Property of 10621 Sepulveda, LLC, filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 11-20305) on Aug. 29, 2011. Judge Alan M. Ahart presides over the case. Michael S. Kogan, Esq., and Faye Rasch, Esq., at Ervin, Cohen & Jessup LLP, serves as counsel to the Debtor. The Debtor disclosed $8,223,450 in assets and $11,228,914 in liabilities as of the Chapter 11 filing. The case is jointly administered with Crown Real Estate Services, LLC. SUPERIOR PROPERTY: Lender Dispute Resolved, Wants Case Dismissal ---------------------------------------------------------------- Superior Property of 10621 Sepulveda, LLC, and Crown Real Estate Services, LLC, ask the U.S. Bankruptcy Court for the Central District of California to dismiss their Chapter 11 cases. The Debtors relate that they had resolved the primary dispute with the creditor that precipitated the Debtors' filing of voluntary petition. The Debtors had come to an agreement with its largest creditor, Pacific Mercantile Bank. Pursuant to the terms of its agreement with PMB, Superior's sole asset will be relinquished to PMB in satisfaction of its debt in both bankruptcy cases. Upon closing of the settlement embodied in the agreement, the Debtors' creditors will be provided for and the Debtor will no longer need the Bankruptcy Code's protection. About Superior Property Based in Mission Hills, California, Superior Property of 10621 Sepulveda, LLC, filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 11-20305) on Aug. 29, 2011. Judge Alan M. Ahart presides over the case. Michael S. Kogan, Esq., and Faye Rasch, Esq., at Ervin, Cohen & Jessup LLP, serves as counsel to the Debtor. The Debtor disclosed $8,223,450 in assets and $11,228,914 in liabilities as of the Chapter 11 filing. The case is jointly administered with Crown Real Estate Services, LLC. SUPERIOR PROPERTY: Taps Kogan Law Successor Counsel to Ervin Cohen ------------------------------------------------------------------ Superior Property of 10621 Sepulveda, LLC, and Crown Real Estate Services, LLC ask the U.S. Bankruptcy Court for the Central District of California for permission to employ Kogan Law Firm, APC as successor counsel to Ervin Cohen & Jessup LLP. The Debtor now desires to employ KLF as his counsel in place of ECJ effective Jan. 1, 2012, on the same terms as ECJ was originally employed. The reason is the Michael S. Kogan, the attorney primarily responsible for the representation of the debtor has moved to KLF. As reported in the Troubled Company Reporter on Sept. 21, 2011, ECJ is expected to render legal advice to the Debtor with respect to its powers and duties as debtor-in-possession in the Chapter 11 case. Mr. Kogan, and Faye Rasch, Esq., will bill $525 and $320 per hour, respectively. The firm's paralegal will charge $185 per hour. Mr. Kogan assured the Court that the law firm of KLF does not represent any entity having an adverse interest to the Debtors in connection with the case. About Superior Property Based in Mission Hills, California, Superior Property of 10621 Sepulveda, LLC, filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 11-20305) on Aug. 29, 2011. Judge Alan M. Ahart presides over the case. Michael S. Kogan, Esq., and Faye Rasch, Esq., at Ervin, Cohen & Jessup LLP, serves as counsel to the Debtor. The Debtor disclosed $8,223,450 in assets and $11,228,914 in liabilities as of the Chapter 11 filing. The case is jointly administered with Crown Real Estate Services, LLC. SWIFT TRANSPORTATION: Moody's Affirms 'B2' Corp. Family Rating -------------------------------------------------------------- Moody's Investors Service changed the ratings outlook of Swift Transportation Co. to positive from stable in consideration of the company's on-going de-leveraging at a time of improving operating performance in its trucking business. Moody's has affirmed Swift's Corporate Family Rating of B2 and Speculative Grade Liquidity Rating of SGL-3. RATINGS RATIONALE Swift's ratings outlook was changed to positive from stable, reflecting Moody's expectations that increasing freight demand and a strong pricing environment in the truckload sector will allow the company to continue to experience solid revenue growth through 2012. As the company continues to streamline operations, Moody's expects that Swift will be able to sustain operating margins in the 8-10% range through 2013, and generate robust cash flow from its operations over the next few years to its fleet investment plans as well as to repay modest amounts of debt. Moody's believes that this will result in the improvement of credit metrics to levels that would likely support upward rating movement in the near term. Swift's B2 rating reflects the company's strengthening financial performance, which can be attributed to improvements in its trucking operations as well as to a continuing trend in improving industry freight volumes and yields. The rating also takes into account the company's commitment to reducing debt while maintaining fleet investments. Anticipating relatively stable industry conditions, Swift should be able to sustain operating margins, while generating cash to support fleet investments and debt service. However, despite the modest but steady level of debt reduction since the December 2010 IPO, Swift continues to operate with sizeable debt in its capital structure. This could lead to elevated leverage during periods of weakness in the highly cyclical trucking sector. The ratings could be raised if the company can continue to generate enough operating cash flow to amply cover fleet investment at over 7% of total revenue, with no increases in debt levels. Debt to EBITDA maintained below 4 times and interest coverage of over 1.8 times could support a positive rating action. Anticipating leverage to improve somewhat in 2012, it is unlikely that the ratings would be lowered over the near term. However, should Swift encounter an unexpected industry downturn that involved a contraction of freight demand and weakening pricing, such that operating margins were to fall below 5%, the ratings could face downward revision. Debt to EBITDA of over 5.5 times or EBIT to Interest of less than 1.3 times could also warrant lower rating consideration. The principal methodology used in this rating was Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Swift Transportation Co, LLC, headquartered in Phoenix, Arizona, is one of the largest providers of truckload transportation services in the United States, with line-haul, dedicated and inter-modal freight services. TAS PROPERTIES: Dade County Back Taxes to Be Paid in March ---------------------------------------------------------- Robin Ford Wallace, reporter at the Dade County Sentinel, reports that Dade County Executive Ted Rumley said counsel for Travis Shields of TAS Properties promised that delinquent property taxes owed Dade County on land at the Preserve at Rising Fawn would be paid in March. According to the report, Mr. Rumley said David Fulton, attorney for Travis Shields, told the bankruptcy trustee that the repayment was contingent on a February sale of the Johnson's Crook development to a Nevada company. The report relates that Mr. Rumley attended the creditors' meeting along with Dade's county attorney, Robin Rogers, and District 3 Commissioner Robert Goff. Mr. Rumley noted Dade was the only creditor present. The report says Mr. Shields was the only representative of the project developers who was present. Mr. Shields and his father- and brother-in-law, respectively, Thomas and Joshua Dobson, are the partners of Southern Group, the developer of record at the Preserve. But on the eve of the county's Jan. 3 auction of Preserve lots for back taxes, Mr. Shields revealed that much of Southern Group's holdings had been deeded to his company, TAS Properties. According to the report, citing Mr. Shields' e-mail to the Dade tax commissioner on Dec. 29, 2011, Mr. Shields told the county the transfer had been to satisfy a bad debt between the two companies, and he claimed the Preserve lots were now protected from the tax auction by the TAS bankruptcy. The report says the tax sale proceeded nonetheless. County officials later said a glitch in an electronic reporting system led them to believe only a few parcels had been transferred to TAS. A week later, though, the larger transfer was verified, and Dade found itself issuing refund checks to land purchasers. Before the scheduled tax auction, the amount of back taxes on Preserve land was computed at about $350,000. Mr. Rumley said that now, with penalties, interest and costs, the total has gone up to $548,000. TAS Properties -- http://www.taspropertiesllc.com/-- operates a real estate company. The Company filed for Chapter 11 protection on Dec. 28, 2011 (Bankr. E.D. Tenn. Case No. 11-17124). Judge John C. Cook presides over the case. David J. Fulton, Esq., at Scarborough, Fulton & Glass, represents the Debtor. The Debtor listed assets of $5,500,000 and liabilities of $7,080,500. TASTY BAKING: Dimensional Ceases to Own Shares ---------------------------------------------- Dimensional Fund Advisors LP filed with the U.S. Securities and Exchange Commission an amended Schedule 13G disclosing that, as of Dec. 31, 2011, it does not beneficially own any shares of common stock of Tasty Baking Co. A full-text copy of the regulatory filing is available for free at http://is.gd/1lY5GE About Tasty Baking Company Tasty Baking Company (NasdaqGM: TSTY) -- http://www.tastykake.com/ -- founded in 1914 and headquartered in Philadelphia, Pa., is one of the country's leading bakers of snack cakes, pies, cookies, and donuts. The company has manufacturing facilities in Philadelphia and Oxford, Pa. The company offers more than 100 products under the Tastykake brand name. The Company reported a net loss of $45.18 million on $171.67 million of net sales for the 52 weeks ended Dec. 25, 2010, compared with a net loss of $3.39 million on $180.56 million of net sales for the 52 weeks ended Dec. 26, 2009. The Company's balance sheet at March 26, 2011, showed $153.32 million in total assets, $172.18 million in total liabilities and a $18.86 million total shareholders' deficit. PricewaterhouseCoopers LLP, in Philadelphia, Pennsylvania, noted that that the Company's cumulative losses, substantial indebtedness that is due June 30, 2011, in addition to its current liquidity situation, raise substantial doubt about its ability to continue as a going concern. Forbearance Agreement, Going Concern Doubt On Jan. 5, 2011, Tasty Baking obtained initial two-week waiver agreements from several of its creditors, which waived certain payments that were due and certain financial covenant requirements. The Company said it was experiencing extremely tight liquidity due to (i) certain production difficulties during the optimization of its new Philadelphia bakery that caused the Company to not achieve the expected operational cash savings from this bakery during the fourth quarter of 2010; (ii) the impact of the recent bankruptcy filing by The Great Atlantic & Pacific Tea Company, Inc.; and (iii) a sharp rise in commodity costs. At the conclusion of the two-week waiver period, on Jan. 14, 2011, the Company entered into arrangements with certain creditors, including: (i) a Seventh Amendment to the Company's Bank Credit Facility; (ii) a Forbearance and Amendment Agreement with the PIDC Local Development Corporation, which also included a new $2 million loan from PIDC; (iii) a letter agreement with the Machinery and Equipment Fund of the Department of Community and Economic Development of the Commonwealth of Pennsylvania, along with a new $1 million loan from MELF; and (iv) a letter agreement with the Company's landlords at the Philadelphia Navy Yard for its bakery and offices. Also on Jan. 14, 2011, the Company issued $3.5 million of unsecured 12% promissory notes due Dec. 31, 2011 to a group of accredited investors. The Creditor Amendments generally permit the Company to delay certain payments to PIDC, MELF and Liberty Property until June 30, 2011. The Creditor Amendments also generally provide that the creditor will waive certain specified defaults, but not any other defaults that may occur in the future that are not specifically waived in the Creditor Amendments. In addition, the Bank Amendment, among other things, (i) changed the maturity date of the Bank Credit Facility to June 30, 2011; (ii) reduced the letter of credit limit to the aggregate amount of letters of credit currently outstanding, while not permitting the Company to issue new letters of credit or extend outstanding letters of credit; and (iii) set new financial covenants, a breach of which could cause a default to occur prior to June 30, 2011. The Bank Amendment also required that the Company engage in a process -- pursuant to an agreed upon timeline with milestones -- to consummate a sale of the Company before June 30, 2011 in an amount sufficient to pay all obligations of the Company under the Bank Credit Facility and all transaction costs. The Company has delayed the filing of its 2010 annual report on Form 10-K. The Company anticipates that the Form 10-K for fiscal year ended Dec. 25, 2010, will include an explanatory paragraph from the Company's independent registered public accounting firm expressing substantial doubt about the Company's ability to continue as a going concern. TELLICO LANDING: Judge Approves Heritage Solutions DIP Loan ----------------------------------------------------------- Josh Flory at knoxvillebiz.com reports that U.S. Bankruptcy Judge Marcia Phillips Parsons has granted Tellico Landing LLC's motion to obtain credit. The report notes that, in 2011, Tellico Landing sought approval to get $2.75 million in financing from a New York entity called Heritage Solutions LLC. According to the report, Judge Parsons' order found that Tellico Landing's total debt on the real property was just over $9 million and that the property has a value of $15 million. Her order means creditor WindRiver Investments LLC -- which owns the debt on the property -- cannot move forward with foreclosure proceedings. The report notes that the ruling also means that Heritage Solutions will take a first position, ahead of WindRiver. The report further relates that the involuntary bankruptcy against Michael L. Ross, Tellico's chief manager, has apparently been resolved. Michael Fitzpatrick, who represents Mr. Ross in the involuntary bankruptcy case, said there was not a settlement. The report notes, in a response filed last month, Mr. Ross had argued that the involuntary petition was not joined by the required three or more entities with separate claims, and that he was "generally paying his debts as such debts become due unless subject to a bona fide dispute." The report says the order focused on a failure by Mr. Ross' legal team -- which, in that case, does not include Lynn Tarpy, Tellico's counsel, or Mr. Fitzpatrick -- to hand over documents requested by the plaintiff, Robert Stooksbury, who had partnered with Mr. Ross on the Rarity Pointe project. In 2009, Mr. Stooksbury filed a lawsuit that accused Mr. Ross and others of engaging in racketeering activity. Mr. Ross denied the charges. According to the report, the order said the suit will proceed to a jury trial on Feb. 21, 2012, for the purpose of determining damages. About Tellico Landing Tellico Landing, LLC, based in Maryville, Tennessee, is engaged in the development and sale of an upscale residential community along and near Tellico Lake known as "Rarity Pointe". The Company filed for Chapter 11 bankruptcy (Bankr. E.D. Tenn. Case No. 11-33018) on June 27, 2011. The case has been assigned to Judge Marcia Phillips Parsons. Thomas Lynn Tarpy, Esq., of Hagood Tarpy & Cox PLLC, represents the Debtor. The Debtor scheduled $40,444,352 in assets and $8,532,455 in liabilities. The petition was signed by Michael L. Ross, its chief manager. The United States Trustee said that a committee under 11 U.S.C. Sec. 1102 has not been appointed in the Tellico case because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. TEMBEC INDUSTRIES: Moody's Affirms 'B3' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service affirmed Tembec Industries Inc. (Tembec) B3 corporate family rating, probability of default rating (PDR) and senior secured note rating in connection with the company's proposed $50 million add-on senior secured note offering. The liquidity rating remains unchanged at SGL-2 and the outlook is stable. RATINGS RATIONALE Tembec's B3 CFR reflects the company's significant exposure to the volatile market pulp and challenging wood products industry segments, the company's high leverage and negative free cash flow. The rating also considers management's ability to extract operational improvements to enhance the company's below industry average operating margins and the company's execution on a number of cost reduction projects. Factors supporting the rating include the company's leading market position in the specialty dissolving pulp segment and the diversification provided by operations in several different sectors. Including Moody's standard adjustments for operating leases and pensions, financial leverage (total debt/EBITDA) is expected to be around 5 times over the next 12 to 18 months. Assignments: Issuer: Tembec Industries Inc. -- Senior Secured Regular Bond/Debenture, Assigned a range of 44 - LGD3 to B3 -- Senior Secured Regular Bond/Debenture, Assigned a range of 44 - LGD3 to B3 The proposed notes are senior secured obligations of Tembec and are rated B3, in line with the existing notes and corporate family rating. The proceeds from the proposed note offering will be used for general purposes, including funding for the company's expected cogeneration project. The proposed notes and related guarantees will be secured on a first priority basis by most of the Canadian assets of the company and will have a second priority lien on the current assets that currently secure the company's asset-based revolving credit facility. Tembec's SGL-2 rating reflects the company's good liquidity position. The company's liquidity is supported by approximately CDN$79 million of unrestricted cash (December 2011) and net availability of approximately CND$71 million on the company's committed US$200 million asset-based revolving credit facility (net of borrowing base eligibility, availability block and approximately CND$38 million of letter of credit use) that matures in February 2016. Excluding the pending cogeneration project in Temiscaming, Moody's estimates that Tembec's cash burn will be approximately $75 million over the next 12 months. The company has modest debt maturities of $19 million over the next 12 months and does not have any significant debt maturities until 2016. The company does not have any financial covenants. Most of the company's assets are encumbered. Tembec is expected to receive proceeds of $67 million from the sale of the its British Columbia sawmills over the next several months. The stable rating outlook reflects Moody's expectation that Tembec will be able to maintain adequate liquidity and sustain acceptable credit protection metrics through volatile industry conditions. An upgrade would be considered if normalized RCF/TD and (RCF- Capex)/TD measures approach 10% and 5%, respectively, on a sustainable basis, while maintaining good liquidity. Tembec's ratings could face downward ratings pressure if pulp market conditions deteriorate, leading to a significant deterioration in liquidity arrangements and normalized (RCF- Capex)/TD were to remain negative. The principal methodology used in rating Tembec was the Global Paper and Forest Products Industry Methodology published in September 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Montreal, Quebec, Tembec is an integrated paper and forest products company with operations primarily in Canada and a mill in France. The company's main operating segments include market pulp, wood products and paper. TERRESTAR NETWORKS: Judge Lane Approves Chapter 11 Plan ------------------------------------------------------- Patrick Fitzgerald at Dow Jones' Daily Bankruptcy Review reports that Judge Sean H. Lane approved on Feb. 14, 2012, TerreStar Networks Inc.'s Chapter 11 plan to divvy up the proceeds from the sale of its business to Dish Network Corp. Dish Network purchased TerreStar, which is trying to build the first satellite smartphone, for $1.38 billion last summer, resulting in a plan that will pay creditors much more than a prior reorganization proposal. According to the report, creditors will have to wait a little longer, however, to receive the remaining $30 million they're due under the plan as Dish and TerreStar seek final regulatory approval of the deal from the Federal Communications Commission The deals give Charlie Ergen, founder of Dish Network and owner of EchoStar Corp., control of the companies' wireless spectrum. Mr. Ergen wants to employ that spectrum in his plan to build a satellite mobile broadband network. The report notes that Dish, while still waiting for approval from the FCC, has received support from several computer industry groups to use the spectrum. About TerreStar Networks TerreStar Corporation and TerreStar Holdings, Inc., filed voluntary Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York on Feb. 16, 2011. TSC's Chapter 11 filing joins the bankruptcy proceedings of TerreStar Networks Inc. and 12 other affiliates, which filed on Oct. 19, 2010. The October Chapter 11 cases are procedurally consolidated under TSN's Case No. 10-15446 under Judge Sean H. Lane. TSC is the parent company of each of the October Debtors. TSC has four wholly owned direct subsidiaries: TerreStar Holdings, Inc., TerreStar New York Inc., Motient Holdings Inc., and MVH Holdings Inc. TSC's case is jointly administered with the cases of seven of the October Debtors under the caption In re TerreStar Corporation, et al., Case No. 11-10612 (SHL). The seven Debtor entities who sought joint administration with TSC are TerreStar New York Inc., Motient Communications Inc., Motient Holdings Inc., Motient License Inc., Motient Services Inc., Motient Ventures Holdings Inc., and MVH Holdings Inc. TSC is a Delaware corporation whose main asset is the equity in non-Debtor TerreStar 1.4 Holdings LLC, which has the right to use a "1.4 GHz terrestrial spectrum" pursuant to 64 licenses issued by the Federal Communication Commission. TSC also has an indirect 89.3% ownership interest in TerreStar Network, Inc., which operates a separate and distinct mobile communications business. TerreStar Holdings is a Delaware corporation that directly holds 100% of the interests in 1.4 Holdings LLC. TerreStar Networks -- TSN -- the principal operating entity of TSC, developed an innovative wireless communications system to provide mobile coverage throughout the United States and Canada using satellite-terrestrial smartphones. The system, however, required an enormous amount of capital expenditures and initially produced very little in the way of revenue. TSN's available cash and borrowing capacity were insufficient to cover its funding; thus, forcing TSN to seek bankruptcy protection in October 2010. TSC estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, in New York, serves as counsel for the TSC and TSN Debtors. Garden City Group is the claims and notice agent. Blackstone Advisory Partners LP is the financial advisor. The Garden City Group, Inc., is the claims and noticing agent in the Chapter 11 cases. Otterbourg Steindler Houston & Rosen P.C. is the counsel to the Official Committee of Unsecured Creditors formed in TSN's Chapter 11 cases. FTI Consulting, Inc., is the Committee's financial advisor. TerreStar Networks sold its business to Dish Network Corp. for $1.38 billion. It canceled a June 2011 auction because there were no competing bids submitted by the deadline. TerreStar Networks previously filed a reorganization plan that called for secured noteholders to swap more than $850 million in debt for nearly all the equity in reorganized TerreStar. Junior creditors, however, would see little recovery under that plan while existing equity holders would be wiped out. TerreStar Networks scrapped that plan in 2011 in favor of the auction. In November 2011, TerreStar Networks filed a liquidating Chapter 11 plan after striking a settlement with creditors. The creditors' committee initiated lawsuits in July to enhance the recovery by unsecured creditors. THOMSON WORLEY: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Thomson Worley, Inc. P.O. Box 2101 Asheville, NC 28802-2101 Bankruptcy Case No.: 12-10133 Chapter 11 Petition Date: February 17, 2012 Court: United States Bankruptcy Court Western District of North Carolina (Asheville) Judge: George R. Hodges Debtor's Counsel: David G. Gray, Esq. 81 Central Avenue Asheville, NC 28801 Tel: (828) 254-6315 E-mail: judyhj@wgcdlaw.com Scheduled Assets: $3,650,656 Scheduled Liabilities: $4,155,207 A list of the Company's six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ncwb12-10133.pdf The petition was signed by David G. Worley, president. TIGRENT INC: Lazarus Investment Discloses 7.2% Equity Stake ----------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Lazarus Investment Partners LLLP and its affiliates disclosed that, as of Feb. 14, 2012, they beneficially own 937,241 shares of common stock of Tigrent, Inc., representing 7.2% of the shares outstanding. A full-text copy of the regulatory filing is available at http://is.gd/m328KH About Tigrent Inc. Cape Coral, Fla.-based Tigrent Inc. (OTC BB: TIGE) -- http://www.tigrent.com/-- is a provider of practical, high- quality and value-based training, conferences, publications, technology-based tools and mentoring to help customers become financially literate. The Company provides customers with comprehensive instruction and mentoring in the topics of real estate and financial instruments investing and entrepreneurship in the United States, the United Kingdom, and Canada. The Company reported a net loss of $697,000 on $102.63 million of revenue for the year ended Dec. 31, 2010, compared with net income of $9.78 million on $170.92 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2010 showed $33.53 million in total assets, $77.77 million in total liabilities, and a $44.24 million stockholders' deficit. TOWN CENTER: Hearing on Adequacy of Plan Outline Set for March 5 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida will convene a hearing on March 5, 2012, at 10:00 a.m., to consider adequacy of the Disclosure Statement explaining Town Center at Doral, LLC, et al.'s Chapter 11 Plan. As reported in the Troubled Company Reporter on Jan. 25, 2012, on the Effective Date, in full and final satisfaction of the DIP Financing Claim, and subject to Terra Landmark's simultaneous payment of the Initial Equity Contribution to the Reorganized Debtors, the Holder of the DIP Financing Claim will receive, as soon as reasonably practicable on or after the Effective Date, 100% of the New Membership Units in the Reorganized Debtors. The Plan contemplates the development of the Debtor's property as a single project in phases. The initial phase of the New Development will focus on the North Parcel, which will consist primarily of residential units, including townhomes and single- family homes. The development of the South Parcel will include both residential, retail, and commercial office components. The Debtors believe that the restructuring proposed in the Plan will enable the Reorganized Debtors to quickly pursue development of the North and South Parcels for the benefit of all economic parties in interest. A copy of the Disclosure Statement dated Dec. 21, 2011, is available for free at: http://bankrupt.com/misc/towncenter.doc108.pdf Debtor No Longer Has Exclusivity According to the Debtors' case docket, the Court granted the request to terminate exclusivity. Interested party Landmark at Doral Community Development District sought the termination. The District asked that the Court put all parties in the case on an equal footing by allowing competing plans to be filed within a reasonable time of the Debtors' filing of their initial plan, so as to expose the Debtors' property to the market and maximize. About Town Center Town Center at Doral, LLC, Landmark at Doral East, LLC, Landmark at Doral South, LLC, Landmark Club at Doral, LLC, and Landmark at Doral Developers, LLC, companies associated with the aborted Landmark at Doral development, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case Nos. 11-35884 to 11-35888) on Sept. 19, 2011, almost three years after AmTrust Bank sought to foreclose on the project. Town Center at Doral, LLC, posted assets of $29,297,300 and liabilities of $166,133,171. Isaac Kodsi signed the petitions as vice president. The Property consists of 16 individual tracts of land that remain undeveloped with the exception of an unfinished 4-level parking garage. Prior to the Petition Date, the Debtors had sought and obtained approvals for the development of residential units (townhomes and condominiums), retail/office/mixed use, and flex office at the Property. Mindy A. Mora, Esq., and Tara V. Trevorrow, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, in Miami, serve as counsel to the Debtors. Glenn D. Moses, Esq., at Genovese, Joblove & Battista, P.A., IN Miami, represents the official committee of unsecured creditors. Cleveland, Ohio-based AmTrust filed for foreclosure in October 2008 based on the $124.4 million in mortgages that were granted the developer in 2005. Several projects started by EB Developers fell into foreclosure after owner and CEO Elie Berdugo died in February 2008. TOWN CENTER: Renews Motion to Value Collateral at $43.4 Million --------------------------------------------------------------- Town Center at Doral, LLC, et al., renewed their request with the U.S. Bankruptcy Court for the Southern District of Florida to value collateral and appoint a valuation expert. As reported in the Troubled Company Reporter on Feb. 9, 2012, the Hon. Robert A. Mark denied approval of the Debtors' motion to value collateral without prejudice. In making its decision, the Court considered the testimony of the two experts, Lee Waronker and Woodward Hanson, and reviewed and considered their reports which were admitted into evidence without objection. The Debtors, in a renewed motion, requested to value the property at $43.4 million per the Waronker & Rosen, Inc. appraisal. The Debtors explained that obtaining a valuation of the property is a critical component of the Debtors' reorganization efforts. Without a valuation, the Debtors will be hard pressed to properly classify and determine the treatment of the secured claims asserted in the cases, including those of the Landmark at Doral Community Development District. The Debtors added that the property is the sole source of collateral in thee cases, the valuation motion was a necessary first-step in the plan confirmation process. About Town Center Town Center at Doral, LLC, Landmark at Doral East, LLC, Landmark at Doral South, LLC, Landmark Club at Doral, LLC, and Landmark at Doral Developers, LLC, companies associated with the aborted Landmark at Doral development, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case Nos. 11-35884 to 11-35888) on Sept. 19, 2011, almost three years after AmTrust Bank sought to foreclose on the project. Town Center at Doral, LLC, posted assets of $29,297,300 and liabilities of $166,133,171. Isaac Kodsi signed the petitions as vice president. The Property consists of 16 individual tracts of land that remain undeveloped with the exception of an unfinished 4-level parking garage. Prior to the Petition Date, the Debtors had sought and obtained approvals for the development of residential units (townhomes and condominiums), retail/office/mixed use, and flex office at the Property. Mindy A. Mora, Esq., and Tara V. Trevorrow, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, in Miami, serve as counsel to the Debtors. Glenn D. Moses, Esq., at Genovese, Joblove & Battista, P.A., IN Miami, represents the official committee of unsecured creditors. Cleveland, Ohio-based AmTrust filed for foreclosure in October 2008 based on the $124.4 million in mortgages that were granted the developer in 2005. Several projects started by EB Developers fell into foreclosure after owner and CEO Elie Berdugo died in February 2008. TRANSUNION CORP: S&P Affirms 'B+' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including our 'B+' long-term corporate credit rating on Chicago-based TransUnion Corp. The outlook is stable. "At the same time, we assigned our 'B-' issue-level rating to the company's proposed $600 million senior unsecured payment-in-kind (PIK) toggle notes to be issued by TransUnion Holding Co. ('Holdco'), the parent company of TransUnion Corp. We assigned a '6' recovery rating to the new notes, indicating our expectation for negligible (0%-10%) recovery in the event of a payment default," S&P said. "The ratings reflect our expectation that TransUnion's consistent profitability and positive free operating cash flow (FOCF) will support the company's 'highly leveraged' financial risk profile," said Standard & Poor's credit analyst Martha Toll-Reed. "TransUnion provides data and information management tools that help businesses manage risk and improve decision-making, and provides credit data directly to consumers. With customers in more than 20 countries, TransUnion's 'satisfactory' business risk profile reflects a good market position as one of three global providers of credit information, significant barriers to entry, and strong profitability." "TransUnion reported revenues of $1.024 billion in fiscal 2011, up 7% from the prior year. We expect moderate organic revenue growth in the near term, supported by our expectation of favorable international growth prospects and expansion of the company's presence in certain vertical markets such as insurance and health care. Ongoing cost-reduction initiatives should enable TransUnion to preserve Standard & Poor's adjusted EBITDA margins in excess of 30%," S&P said. "The stable outlook incorporates our expectation that TransUnion will maintain consistent profitability and positive FOCF. A highly leveraged financial profile and our view that the company's ownership structure is likely to preclude sustained de-leveraging, constrain a possible upgrade. The company's defensible market position and stable operating performance lessen the potential for credit deterioration. However, sustained leverage in excess of 6.5x due to a challenging economy and potential earnings deterioration could lead to lower ratings," S&P said. TRAVELPORT INC: Bank Debt Trades at 16% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Travelport Inc. is a borrower traded in the secondary market at 84.04 cents-on-the- dollar during the week ended Friday, Feb. 17, 2012, a drop of 0.36 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Aug. 23, 2015, and carries Moody's 'B1' rating and Standard & Poor's 'B' rating. The loan is one of the biggest gainers and losers among 164 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Travelport Holdings Travelport Holdings is the direct parent of Travelport Limited, is a broad-based business services company and a leading provider of critical transaction processing solutions to companies operating in the global travel industry. With a presence in 160 countries and approximately 3,500 employees, Travelport is comprised of the global distribution system (GDS) business, which includes the Galileo and Worldspan brands and its Airline IT Solutions business, which hosts mission critical applications and provides business and data analysis solutions for major airlines. Travelport also owns approximately 48% of Orbitz Worldwide (NYSE: OWW), a leading global online travel company. Travelport is a private company owned by The Blackstone Group, One Equity Partners, Technology Crossover Ventures, and Travelport management. Travelport Holdings Limited is a holding company with no direct operations. Its principal assets are the direct and indirect equity interests it holds in its subsidiaries, including Travelport Limited. Travelport Limited, a direct subsidiary of Travelport Holdings Limited, reported net income of $283 million on $1.061 billion of net revenue for the six months ended June 30, 2011, compared with net income of $1 million on $1.056 billion of net revenue for the same period of 2010. Results for the six months ended June 30, 2011, includes gain of $312 million, net of tax, from the sale of sale of the Gullivers Travel Associates ("GTA") business to Kuoni Travel Holdings Limited ("Kuoni"). The sale was completed on May 5, 2011. Loss from continuing operations was $4 million during the six months ended June 30, 2011, compared with a loss of $2 million for the same period of 2010. The Company's balance sheet at Sept. 30, 2011, showed $3.43 billion in total assets, $4.21 billion in total liabilities, and a $780 million total deficit. * * * As reported by the TCR on Oct. 10, 2011, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on travel services provider Travelport Holdings Limited (Travelport Holdings) and indirect subsidiary Travelport LLC (Travelport) to 'SD' (selective default) from 'CC'. The downgrades follow the implementation of a capital restructuring, which was necessary because of the Travelport group's high leverage, weak liquidity, and the upcoming maturity of its $693 million (as of end-June 2011) PIK loan in March 2012. "According to our criteria, we view this restructuring as a distressed exchange and tantamount to a default (see 'Rating Implications Of Exchange Offers And Similar Restructurings, Update,' published May 12, 2009, on RatingsDirect on the Global Credit Portal)," S&P related. TSC GLOBAL: Rosner Law Firm, Outten & Golden Launch Class Suit -------------------------------------------------------------- TRENA WATSON, on behalf of herself and all others similarly situated, v. TSC GLOBAL, LLC a/k/a MONOMOY HOLDINGS III, LLC, BARJAN, LLC, BARJAN INTERNATIONAL LIMITED, and TSC PARTNERS, LLC, Defendants, Adv. Pro No. 12-_____ (Bankr. D. Del.), was brought on behalf of 500 or so other similarly-situated former employees who were terminated in a mass layoff or plant closing from the Defendants' facilities from about Nov. 15, 2011 to about Jan. 23, 2012, and in the months thereafter. The lawsuit alleges the employees were not provided 60 days advance written notice of their terminations by Defendants, as required by the Worker Adjustment and Retraining Notification Act, 29 U.S.C. Sec. 2101 et seq. The Plaintiff and all similarly situated employees seek to recover 60 days wages and benefits, pursuant to 29 U.S.C. Sec. 2104, from the Defendants. The Plaintiff asserts that the WARN claims are entitled to priority status pursuant to the Sec. 507(a)(4)(5) of the Bankruptcy Code. Ms. Watson worked at the Defendants' facility in Rock Island, Illinois, until her termination on Jan. 23, 2012. Non-debtor Defendant TSC Partners, LLC whose principals include John Wiesehan, Todd Millard, and Daniel Collin, owns a 81.5% interest in TSC Global. TSC Global's five-person Board of Managers includes John Wiesehan, and Todd Millard, principals of TSC Partner. Jay Galletly is a principal of TSC Partners and President of TSC Global, and with John Wiesehan and Todd Millard, controlled and operated TSC Global and its subsidiaries, including non-debtor Barjan LLC. TSC Global wholly owns non-debtor Barjan LLC which from Nov. 15, 2011 to Jan. 23, 2012, employed the Plaintiff and all similarly- situated employees, who worked at or reported to one of its Facilities of TSC Global, in particular, the Illinois and Charlotte Facilities Attorneys for the Plaintiff and the putative Class are: Frederick B. Rosner, Esq. Scott J. Leonhardt, Esq. THE ROSNER LAW GROUP LLC 824 Market Street, Suite 810 Wilmington, DE 19801 Telephone: 302-777-1111 - and - Jack A. Raisner, Esq. Rene S. Roupinian, Esq. OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, NY 10016 Telephone: (212) 245-1000 Charlotte, North Carolina-based TSC Global, LLC, aka Monomoy Holdings III, LLC, and 10 affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10505) on Feb. 13, 2012, in order to deleverage their capital structure and restructure operations. TSC Global estimated $10 million to $50 million in assets and liabilities as of the Chapter 11 filing. TSC claims to be a leading distributor of consumer brand products to America's top retailers, travel centers and convenience stores. The Debtors have tapped McDonald Hopkins LLC as restructuring counsel, Polsinelli Shugart PC as Delaware local counsel; Realization Services, Inc., as financial and restructuring advisors, and Livingston Partners LLC as investment bankers. TSC GLOBAL: Court Jointly Administers Bankruptcy Cases ------------------------------------------------------ The U.S. Bankruptcy Court granted the request of TSC Global, LLC, for procedural consolidation and joint administration of its chapter 11 case with those of affiliates TSC Holdings, LLC, WAM Development, LLC, TSC Solutions, Inc., TSC Service Group, LLC, National Tool Warehouse, LLC, Ascend Biotics, Inc., Wire Shelf Additions, Inc., Mackinaw, Inc., Fort Worth Associates, LLC, and TSC Sales & Marketing, LLC. The lead case no. 12-10505. Charlotte, North Carolina-based TSC Global, LLC, aka Monomoy Holdings III, LLC, and 10 affiliates filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10505) on Feb. 13, 2012, in order to deleverage their capital structure and restructure operations. TSC Global estimated $10 million to $50 million in assets and liabilities as of the Chapter 11 filing. TSC claims to be a leading distributor of consumer brand products to America's top retailers, travel centers and convenience stores. The Debtors have tapped McDonald Hopkins LLC as restructuring counsel, Polsinelli Shugart PC as Delaware local counsel; Realization Services, Inc., as financial and restructuring advisors, and Livingston Partners LLC as investment bankers. TXU CORP: Bank Debt Trades at 44% Off in Secondary Market --------------------------------------------------------- Participations in a syndicated loan under which TXU Corp., now known as Energy Future Holdings Corp., is a borrower traded in the secondary market at 56.45 cents-on-the-dollar during the week ended Friday, Feb. 17, 2012, a drop of 3.01 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 10, 2017, and carries Moody's B2 rating and Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 164 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. Energy Future Holdings Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q, reporting a net loss of $710 million on $2.32 billion of operating revenues for the three months ended Sept. 30, 2011, compared with a net loss of $2.90 billion on $2.60 billion of operating revenue for the same period during the prior year. The Company also reported a net loss of $1.77 billion on $5.67 billion of operating revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $2.97 million on $6.59 billion of operating revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $44.02 billion in total assets, $51.68 billion in total liabilities and a $7.66 billion total deficit. The Company's consolidated balance sheets at Dec. 31, 2010, showed $46.388 billion in total assets, $52.299 billion in total liabilities, and a stockholders' deficit of $5.911 billion. * * * In April 2011, Moody's Investors Service affirmed the 'Caa2' Corporate Family Rating, 'Caa3' Probability of Default Rating and SGL-4 Speculative Grade Liquidity Ratings of EFH. Outlook is stable. EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed company with limited financial flexibility; its capital structure appears to be untenable, calling into question the sustainability of the business model; and there is no expectation for any meaningful debt reduction over the next few years, beyond scheduled amortizations. At the end of February 2011, Fitch Ratings it does not expect to take any immediate rating action on EFH's Texas Competitive Electric Holdings Company LLC or their affiliates based on recent default allegations from lender Aurelius. EFH carries a 'CCC' corporate rating, with negative outlook, from Fitch. UAL CORP: Appeals Court Orders Remand Of Dominguez Suit ------------------------------------------------------- The U.S. Court of Appeals, District of Columbia Circuit ordered that the judgment of a district court in an antitrust class action lawsuit captioned Dominguez v. UAL Corporation be vacated and the case is remanded with directions that the complaint be dismissed for lack of jurisdiction. Richard Dominguez brought an antitrust class action against United Air Lines, Inc. and its parent company UAL Corporation before the U.S. District Court for the District of Columbia, challenging their policy prohibiting ticket resale. Specifically, Mr. Dominguez alleged that United's No Transfer Policy kept him from buying his tickets at lower prices in violation of Sections 1 and 2 of the Sherman Act, as well as the common law prohibition of unjust enrichment. The District Court concluded that the policy was lawful and granted summary judgment for United. Mr. Dominguez now appeals. He challenged United's policy only as applied to non-stop air travel between metropolitan Washington, D.C., and the San Francisco Bay area, which United concedes is the relevant market for purposes of summary judgment. Only Mr. Dominguez's flight to Oakland was in that market. Acknowledging that "Dominguez's claims of injury are indeed speculative," the District Court nevertheless concluded that there was "no need to address standing" because it "ha[d] concluded as a matter of law that no antitrust violation ha[d] occurred." In taking this approach, the District Court erred, the Appeals Court determined. The District Court should have dismissed Mr. Dominguez's lawsuit for lack of jurisdiction because his alleged injury is too speculative," the Appeals Court opined. Among other things, Mr. Dominguez alleged that United's No Transfer Policy prevented him from buying a less expensive ticket for his Dulles-to-Oakland flight by foreclosing the emergence of a secondary market of ticket resellers. But, the Appeals Court concluded that no reasonable juror could find that Mr. Dominguez was overcharged as a result of the policy. The gaps in the evidence he presented and the nature of the ticket he bought make Mr. Dominguez's injury "speculative at best," the Appeals Court determined. Given the practices of other airlines and United's own itinerary-change fees, it would be unreasonable to infer that United would not have charged such fees, the Appeals Court held. Moreover, the amount of that fee would be completely within United's control, the Appeals Court added. Upon consideration of its order to show cause filed January 17, 2012, and the responses thereto, the Appeals Court ruled that the order to show cause be discharged. The Appeals Court further ordered that this sealed opinion dated January 17, 2012, be unsealed. The Clerk of Court is directed to unseal the opinion and release it publicly. A full-text copy of the Opinion dated Jan. 17, 2012 as reissued on January 27, 2012 is accessible for free at: http://ResearchArchives.com/t/s?7784 About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL CORP: Hawaii Court Affirms Denial of Kuehu Disability Claims ---------------------------------------------------------------- The Intermediate Court of Appeals of Hawaii affirmed a February 26, 2010 decision and order of the State of Hawaii Labor and Industrial Relations Appeals Board determining that Donna W. Kuehu is not entitled to temporary total disability or TDD benefits from United Airlines, Inc. Ms. Kuehu appealed from the Decision and Order, which reversed a March 19, 2007 Decision of the Director of Labor and Industrial Relations. The Director had found that Ms. Kuehu had sustained a new work-related injury on January 25, 2006. The Director awarded medical care and services "as the nature of the 1/25/2006 injury may require and TTD benefits of $34,288 for the period from January 29, 2006 to January 30, 2007." Upon appeal by United, the LIRAB determined that Ms. Kuehu had not suffered a work-related injury on January 25, 2006, and was not entitled to Temporary Total Disability Benefits. Upon review, the Intermediate Court determined that Ms. Kuehu does not challenge the Board's Findings of Fact No. 35 that found she "was not exposed to medically significant amounts of [hydrogen sulfide], and was not exposed to such gas for an extended period of time on January 25, 2006." The Intermediate Court further determined that United presented reliable, probative, and substantial evidence to support the LIRAB's determination that Ms. Kuehu had not suffered a compensable work-related injury. The LIRAB's finding that Ms. Kuehu's condition was "an undifferentiated somatoform disorder" and was "not a personal injury that arose out of and in the course of employment on January 25, 2006" was not clearly erroneous, the Intermediate Court held. "We do not disturb LIRAB's decision as to the weight it gave the witnesses' testimony and reports; thus, the LIRAB's conclusion that Ms. Kuehu failed to show she had suffered a work-related injury on January 25, 2006 was not clearly erroneous," the Intermediate Court opined. Likewise, the LIRAB did not err in concluding that Ms. Kuehu was not entitled to TTD, the Intermediate Court found. A full-text copy of the January 13, 2012 memorandum of opinion is accessible for free at: http://ResearchArchives.com/t/s?7785 About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) VALENCE TECHNOLOGY: ClearBridge Discloses 5.8% Equity Stake ----------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, ClearBridge Advisors, LLC, disclosed that, as of Dec. 31, 2011, it beneficially owns 9,823,506 shares of common stock of Valence Technology Inc representing 5.85% of the shares outstanding. A full-text copy of the regulatory filing is available for free at http://is.gd/Dd82S5 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. 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. VILLA D'ESTE: Court Disapproves Elaine D. Estingoff as Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of California denied Villa D'Este LP's request to employ Elaine D. Estingoff, Esq., as restructuring and bankruptcy counsel. As reported in the Troubled Company Reporter on Dec. 12, 2011, Ms. Estingoff's firm will bill for her services at $300 per hour and for any paralegal at $100 per hour. Dililp K. Ram, operating manager of the general partner, attested that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Villa D'Este Villa D'Este LP, in Los Angeles, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-21488) on Sept. 28, 2011. Judge Victoria S. Kaufman presides over the case. The Law Office of Elaine D. Etingoff -- elaineetingoff@gmail.com -- serves as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Phillip Ram, operating manager of general partner. Affiliates that previously filed separate Chapter 11 petitions are: Norman Salter (Bankr. C.D. Calif. Case No. 09-11653) on Feb. 17, 2009; and Phillip Ram, aka Dilip K. Ram (Bankr. C.D. Calif. Case No. 09-10969) on Jan. 21, 2009. Secured lender Bank of America is represented by Patricia H. Lyon, Esq., and Celine Mui, Esq. -- phlyon@frenchandlyon.com and cmui@frenchandlyon.com -- at French & Lyon PC. VILLA D'ESTE: Chapter 11 Case Dismissed, to Pay $975 Unpaid Fees ---------------------------------------------------------------- The Hon. Victoria Kaufman of the U.S. Bankruptcy Court for the District of California dismissed the Chapter 11 case of Villa D'Este LP. Peter C. Anderson, the U.S. Trustee has requested that the Court dismiss or convert the Debtor's case to one under Chapter 7 of the Bankruptcy Code. The Court also ordered that the Debtor must pay for unpaid United States Trustee Quarterly Fees, in the amount of $975 together with interest thereon. The U.S. Trustee is represented by: Jennifer L. Braun, Esq. Assistant United States Trustee OFFICE OF THE UNITED STATES TRUSTEE 21051 Warner Center Lane, Suite 115 Woodland Hills, CA 91367 Tel: (818) 716-8800 Fax: (818) 716-1576 E-mail: jennifer.l.braun@usdoj.gov About Villa D'Este Villa D'Este LP, in Los Angeles, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-21488) on Sept. 28, 2011. Judge Victoria S. Kaufman presides over the case. The Law Office of Elaine D. Etingoff -- elaineetingoff@gmail.com -- serves as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Phillip Ram, operating manager of general partner. Affiliates that previously filed separate Chapter 11 petitions are: Norman Salter (Bankr. C.D. Calif. Case No. 09-11653) on Feb. 17, 2009; and Phillip Ram, aka Dilip K. Ram (Bankr. C.D. Calif. Case No. 09-10969) on Jan. 21, 2009. Secured lender Bank of America is represented by Patricia H. Lyon, Esq., and Celine Mui, Esq. -- phlyon@frenchandlyon.com and cmui@frenchandlyon.com -- at French & Lyon PC. VITESSE SEMICONDUCTOR: Aristeia Discloses 5.7% Equity Stake ----------------------------------------------------------- In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission, Aristeia Capital, L.L.C, disclosed that, as of Dec. 31, 2011, it beneficially owns 1,546,889 shares of common stock of Vitesse Semiconductor Corporation representing 5.79% of the shares outstanding. A full-text copy of the regulatory filing is available at http://is.gd/nqZTbn 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 Dec. 31, 2011, showed $58.84 million in total assets, $87.25 million in total liabilities and a $28.41 million total stockholders' deficit. VITESSE SEMICONDUCTOR: Whitebox Advisors Holds 9.9% Equity Stake ---------------------------------------------------------------- Whitebox Advisors, LLC, and its affiliates filed with the U.S. Securities and Exchange Commission an amended Schedule 13G disclosing that, as of Dec. 31, 2011, they beneficially own 2,690,690 shares of common stock of Vitesse Semiconductor Corporation representing 9.9% of the shares outstanding. A full- text copy of the regulatory filing is available for free at: http://is.gd/kciomY 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 Dec. 31, 2011, showed $58.84 million in total assets, $87.25 million in total liabilities and a $28.41 million total stockholders' deficit. WEIGHT WATCHERS: S&P Affirms 'BB' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Rating Services affirmed its 'BB' corporate credit rating on New York City-based Weight Watchers International Inc. "We are revising our outlook to negative from stable," S&P said. "We are affirming our 'BB+' senior secured issue-level rating on the company's existing secured debt. The recovery rating on the company's secured debt remains '2', indicating our expectation for substantial recovery (70% to 90%) of principal in the event of a payment default; however, we do recognize the lowered recovery prospects given the incremental debt and believe recovery prospects are now at the low end of this range," S&P said. "In accordance with our criteria, we assume that a sponsor-owned issuer's leverage may increase in the future, it is very unlikely for one to achieve a rating higher than in the 'B' category. While we recognize the majority ownership (approximately 52%) by a private equity sponsor, we believe the 48% public ownership of WWI mitigates the risk of leverage (as measured by the ratio of adjusted total debt to EBITDA) increasing above 4.5x," S&P said. As of Dec. 31, 2011, the company reported about $1 billion of debt outstanding. "The outlook revision to negative is reflective of Weight Watchers International Inc.'s (WWI's) aggressive financial policy and resulting deterioration in credit protection measures following the proposed share repurchase transactions. However, the affirmation of the corporate credit rating reflects our belief that the company's operating performance will remain strong; that WWI will apply free cash flow to reduce debt expeditiously, and strengthen credit measures to levels more indicative of a 'significant' financial risk profile (as our criteria define the term) over the next year. We believe the aggregate $1.5 billion debt-financed share repurchases (influenced, in our view, by Artal Holdings Sp. Z o.o. Succursale de Luxembourg, the majority owner with controlling interest of the board), signifies an aggressive financial policy. In addition, in 2007 the company executed a similar share repurchase that increased leverage to the mid-4x area (the company subsequently reduced leverage). By our estimate, at closing, the company's leverage will increase to the 4.5x area, from under 2x as of the fiscal year ended Dec. 31, 2011. We forecast 2012 year-end leverage in the high-3x area based on our projections that assume mid-single-digit revenue growth, approximately 31% EBITDA margins, over $350 million in free cash flow generation, and debt repayment of about $250 million," S&P said. "We could revise the outlook to stable if the company were to demonstrate steady repayment of debt and continued EBITDA growth such that leverage were to decrease toward the 3.5x area," said Standard & Poor's credit analyst Nalini Saxena. "At current EBITDA levels (as of Dec. 31, 2011) we estimate the company would need to repay about $650 million of debt to reach this." "The corporate credit rating on WWI reflects our assessment that the company's business risk profile remains 'fair' and its financial risk profile 'aggressive.' In assessing financial risk, we take into consideration Artal's majority ownership and board control--and influence on financial governance--while recognizing the company's significant and rather predictable cash flow generation. Our business risk profile assessment incorporates our view that WWI will maintain its standing as a highly recognizable brand with a solid market position, international presence in a growing global market, and favorable demographic trends, as well as the company's narrow business focus (albeit with recently broadening service offerings) in the highly competitive weight- loss industry, and its sensitivity to consumer discretionary spending," S&P said. WESTSIDE MEDICAL: Committee Taps Irell & Manella as Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 case of Westside Medical Park, LLC, asks the U.S. Bankruptcy Court for the Central District of California for permission to retain Irell & Manella LLP as counsel. Howard J. Steinberg. a partner at I&M, tells the Court that his hourly rate is $950, however, he agreed to reduce his hourly rate to 825. He adds that the reduced hourly rates of other personnel are: Standard Rate Reduced Rate ------------- ------------ Kimberly Bick, associate $675 $595 Lori Gauthier, senior legal assistant $270 $250 Mr. Steinberg assures the Court that the firm has no interest materially adverse to the interests of the Debtor's estate or of any class of creditors in the Debtor's case. The firm can be reached at: Howard J. Steinberg, Esq. Kimberly L. Bick, Esq. IRELL & MANELLA LLP 1800 Avenue of the Stars, Suite 900 Los Angeles, CA 90067-4276 Tel: (310) 277-1010 Fax: (310) 203-7199 E-mail: hsteinberg@irell.com kbick@irell.com About Westside Medical Los Angeles, California-based Westside Medical Park, LLC, filed for Chapter 11 bankruptcy protection on November 3, 2010 (Bankr. C.D. Calif. Case No. 10-57457). John P. Kreis, P.C., is the Debtor's general bankruptcy counsel. Garfield & Tepper serves as special litigation counsel. Peregrine Realty Partners has been tapped as appraiser. The Debtor estimated assets and debts at $50 million to $100 million as of the Chapter 11 filing. On Dec. 28, 2010, Peter C. Anderson, the U.S. Trustee, appointed four creditors to serve in the Official Committee of Unsecured Creditors in the Debtor's case. WESTSIDE MEDICAL: Plan Outline Hearing Continued Until Feb. 23 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved a stipulation continuing until Feb. 23, 2012, at 1:30 p.m., the hearing to consider adequacy of the Disclosure Statement explaining Westside Medical Park, LLC' Liquidating Plan Of Reorganization. The stipulation was entered between the Debtor and the Official Committee of Unsecured Creditors As reported in the Troubled Company Reporter on Jan. 18, 2012, the Plan dated Dec. 21, 2011, lists the sources of money earmarked to pay creditors. No payments to interest holders will be made. Sources of distribution to creditors will be (i) cash on hand, which totaled $666,770 as of Nov. 30, 2011; and (ii) any recovery generated from "avoidance power actions" and litigation, all of which will be pursued by the Official Committee of Unsecured Creditors. The Debtor owned real estate properties in California intended to be developed primarily for health care uses, but defaulted on a $61 million debt in November 2011. The Debtor thus sought bankruptcy protection to try to preserve value for unsecured creditors. Most likely, general unsecured creditors can expect payments to commence within 30 days after entry of a final unappealable order confirming the Debtor's liquidating plan. The Debtor calculates the claims of general unsecured creditors aggregate $1,143,846. Under the Plan, unsecured creditors will receive pro rata distributions from the Available Cash and any recovery from any Avoidance Power Action or litigation. A copy of the Disclosure Statement dated Dec. 21 is available for free at http://bankrupt.com/misc/WESTSIDEMEDICAL_DiscStmDec21.PDF About Westside Medical Los Angeles, California-based Westside Medical Park, LLC, filed for Chapter 11 bankruptcy protection on November 3, 2010 (Bankr. C.D. Calif. Case No. 10-57457). John P. Kreis, P.C., is the Debtor's general bankruptcy counsel. Garfield & Tepper serves as special litigation counsel. Peregrine Realty Partners has been tapped as appraiser. The Debtor estimated assets and debts at $50 million to $100 million as of the Chapter 11 filing. On Dec. 28, 2010, Peter C. Anderson, the U.S. Trustee, appointed these entities to serve in the Official Committee of Unsecured Creditors in the Debtor's case. Irell & Manella LLP represents the Committee. WHITE KNOLL VENTURE: Hires Fredman Knupfer as Bankruptcy Counsel ---------------------------------------------------------------- White Knoll Venture Ltd., seeks Bankruptcy Court permission to hire Fredman Knupfer Lieberman LLP as its general bankruptcy and reorganization counsel. The firm's professionals and their hourly rates are: Howard S. Fredman $425 per hour Nancy Knupfer $450 per hour Marc. A. Lieberman $435 per hour Mark J. Pearl $425 per hour Alan W. Forsley $365 per hour Legal Assistant $135 per hour Heavy data entry and $425 per hour Secretarial overtime $45 per hour Prior to the petition date, the Debtor gave the firm a $8,546 retainer. Marc A. Lieberman, Esq., a principal at the firm, attests that his firm has no connection with any insider or creditor of the Debtors that would disqualify the firm from representing the Company. White Knoll Venture, Ltd., filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-14737) on Feb. 9, 2012. White Knoll, which claims to be a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated up to $50 million in assets and up to $10 million in liabilities. Judge Peter Carroll oversees the case. The petition was signed by Manuel Meza, president of Creative Environments of Hollywood, Inc., general partner. WHITE KNOLL VENTURE: Sec. 341 Creditors' Meeting Set for March 15 ----------------------------------------------------------------- The United States Trustee in Los Angeles, California, will hold a Meeting of Creditors pursuant to Sec. 341(a) of the Bankruptcy Code in the Chapter 11 case of White Knoll Venture, Ltd., on March 15, 2012, at 1:15 p.m. at RM 2610, 725 S Figueroa St. The last day to oppose discharge or dischargeability in the case is May 14, 2012. White Knoll Venture, Ltd., filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-14737) on Feb. 9, 2012. White Knoll, which claims to be a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated up to $50 million in assets and up to $10 million in liabilities. Judge Peter Carroll oversees the case. The petition was signed by Manuel Meza, president of Creative Environments of Hollywood, Inc., general partner. WHITESTONE HOUSTON: Montgomery County Lot to Be Auctioned --------------------------------------------------------- Cindy Horswell, writing for The Houston Chronicle, reports that a U.S. bankruptcy court in Sherman, Texas, will decide March 5, 2012, on the fate of real estate investor John Marlin's 1,564-acre tract in Montgomery County that he planned to use for the 500-acre theme park and 1,064-acre residential development. Ms. Horswell notes Mr. Marlin heads Whitestone Houston Land Ltd. According to the report, two groups that had been working closely with Mr. Marlin in pursuit of the theme park -- East Montgomery County Improvement District and Contour Entertainment -- are joining forces to try to buy the land and establish a new developer. The report says the court has set a minimum purchase price of $10 million, which is about half what Mr. Marlin originally paid for the land. Completion of the project is estimated to cost about $500 million. Based in Dallas, Texas, Whitestone Houston Land, Ltd., is a limited partnership whose general partner is Whitestone Houston Holdings LLC. Whitestone Houston Land filed for Chapter 11 protection (Bankr. E.D. Tex. Case No. 11-42400) on Aug. 1, 2011. Joyce W. Lindauer, Esq., represents the Debtor. The Debtor listed assets of between $1 million and $10 million, and debts of $10 million and $50 million. WHITTON CORP: Collateral Valuation Hearing Continued Until March 7 ------------------------------------------------------------------ The Hon. Bruce A. Markell of the U.S. Bankruptcy Court for the District of Nevada approved a stipulation continuing until March 7, 2012, at 9:30 a.m., the status hearing on the valuation motion for status purposes only. The stipulation was entered among Whitton Corporation, GSMS 2004- GG2 Sparks Industrial, LLC, and German American Capital Corporation. The hearing was previously set for Feb. 8, a.m. The Debtor requested for a valuation concerning certain of its real property assets: -- properties located at 155 Glendale Avenue in Sparks, Nevada and located at 1220 and 1250 Glendale in Sparks, Nevada, which are subject to liens held by German American Capital Corporation; and -- properties located at 1215 and 1275 Kleppe Lane and 1455 Deming Way in Sparks, Nevada, which are subject to liens held by GSMS 2004-GG2 Sparks Industrial, LLC. About Whitton Corporation Henderson, Nevada-based Whitton Corporation filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-32680) on Dec. 5, 2010. Hal L. Baume, Esq., Brett A. Axelrod, Esq., and Anne M. Loraditch, Esq., at Fox Rothschild LLP, in Las Vegas, Nev., serve as the Debtor's bankruptcy counsel. The Debtor disclosed $19,967,668 in assets and $37,949,426 in liabilities as of the Chapter 11 filing. South Tech Simmons 3040C, LLC, filed a separate petition (Bank. D. Nev. Case No. 10-32857) on Dec. 8, 2010. WOODRIDGE VILLAS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Woodridge Villas, Inc. 1591 Chartered Circle Las Vegas, NV 89101-1557 Bankruptcy Case No.: 12-11795 Chapter 11 Petition Date: February 17, 2012 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Matthew L. Johnson, Esq. MATTHEW L. JOHNSON & ASSOCIATES, P.C. 8831 W. Sahara Ave. Las Vegas, NV 89117 Tel: (702) 471-0065 Fax: (702) 471-0075 E-mail: mjohnson@mjohnsonlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb12-11795.pdf The petition was signed by Albert K. Lin, director, president, secretary, treasurer. W.R. GRACE: Proposes to Settle Otis Pipeline Disputes ------------------------------------------------------ W.R. Grace & Co. and its debtor affiliates seek authority from Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware to enter into and perform under a consent decree with the U.S. Government and a private parties settlement. The parties to the Consent Decree and the Private Parties Settlement are: -- Debtors W.R. Grace & Co., W.R. Grace & Co.-Conn., and Grace Energy Corporation; -- the U.S. Government, including the U.S. Air Force, the U.S. Army and other agencies, branches and department of the federal government; -- NuStar Pipeline Operating Partnership L.P., f/k/a Kaneb Pipeline Operating Partnership, NuStar Energy L.P., NuStar Terminals Services, f/k/a Support Terminal Services, Inc., and NuStar Terminals Operations Partnership L.P.; and -- Samson Investment Company and SGH Enterprises, Inc., f/k/a Samson Hydrocarbons Company. The Settlement fully and finally resolves longstanding disputes among the Parties with respect to certain alleged environmental contamination and response costs in connection with a site on Cape Cod, Massachusetts, according to the Debtors' counsel, Adam Paul, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois. The dispute concerns certain hydrocarbon-related contaminants in the sole source aquifer for Cape Cod, Massachusetts. The U.S. Government alleges that a jet fuel and aviation gasoline pipeline, known as the Otis Pipeline, running from a terminal at the Cape Cod Canal to the Otis Air Force Base on the Massachusetts Military Reservation spilled fuel in at least two locations at the MMR in the late 1960s or early 1970s and that the fuel contaminated the groundwater. The MMR and areas into which contamination has migrated therefrom have been designated a federally-listed Superfund site. The U.S. Government alleges that two of the plumes of contamination, called FS-12 and FS-13, originated from the pipeline at the MMR and have impacted and are impacting groundwater flowing under or off the MMR. The United States military, under the direction of the National Guard Bureau and the Air Force Center for Engineering and the Environment, formerly known as the Air Force Center for Environmental Excellence, have installed expensive air sparging and pump-and-treat systems to extract contaminants, like ethylene dibromide and benzene, from the groundwater, Mr. Paul tells the Court. The pipeline and terminal were built in 1965 and operated by Standard Transmission Corporation, which was acquired by Cleary Petroleum Corporation in 1971. Through several corporate transactions, Cleary became a subsidiary of W. R. Grace & Co.- Conn., and later became a subsidiary of Debtor Grace Energy Corporation. In 1978, Grace allegedly transferred assets relating to the military pipeline business of the Standard Transmission Division of Cleary to Standard Transpipe Corp., a newly formed subsidiary. Cleary later changed its name to Grace Petroleum Corporation. In 1993, Grace Energy sold Standard Transpipe Corp. to Kaneb Pipeline Operating Partnership, L.P., which transaction involved the merger of Standard Transpipe into Support Terminal Services, Inc., and the sale of Support Terminal to Kaneb Pipeline Operating Partnership, L.P. Support Terminal is now known as NuStar Terminals Services, Inc., and Kaneb Pipeline is now known as NuStar Pipeline Operating Partnership L.P. Also in 1993, Grace Energy sold Grace Petroleum to Samson Investment Company. Grace Petroleum changed its name to Samson Natural Gas Company. Samson Natural Gas changed its name to SNG Production Company. SNG Production changed its name to Samson Hydrocarbons Company, which also changed its name to SGH Enterprises, Inc. In the 1990s, the federal government began addressing the contamination allegedly associated with FS-12 and FS-13. The Government alleges that the federal government has spent in excess of $54 million to date investigating and remediating the FS-12 groundwater contamination and that the present value of what it will continue to spend in the future is approximately $17 million, for a total of more than $70 million attributable to FS-12. The Government also alleges that the federal government has incurred substantial costs relating to FS-13. The Government adds that Standard Transmission "caused" the contamination within the meaning of the Massachusetts Oil and Hazardous Material Release Prevention Act. The Government further alleges that NuStar TS and Samson Hydrocarbons, as successors of Standard Transpipe Corp. and Grace Petroleum, are jointly and severally liable for the entire costs of this remedial effort. Samson Hydrocarbons argues that Grace Energy's contract for the sale of Grace Petroleum to Samson Investment, as well as other agreements, contain indemnity provisions requiring indemnity for the claims made by the U.S. Government. Samson Hydrocarbons filed several proofs of claim against Grace in the Debtors' bankruptcy cases identified Claim Nos. 13946, 13947, 18518, 18520, 18521, 18526, and 18527, as amended. In its claims, Samson Hydrocarbons asserts indemnity claims against the Debtors for, among other things, the full amount of the U.S. Government's Otis Pipeline claim, for any other claim arising out of the Otis Pipeline facilities or operations, and for defense costs. Samson Hydrocarbons also asserts claims unrelated to the Otis Pipeline, which are not the subject of this Motion. Grace Energy brought a lawsuit against Kaneb Pipe Line Operating Partnership, L.P. and Support Terminal Services, Inc., claiming that the liabilities associated with the Otis Pipeline are owned by and the responsibility of Kaneb and its affiliates, as the successors of Standard Transmission Corporation and all of its liabilities. After a partial summary judgment and a successful jury trial in 2000, Grace Energy obtained a judgment against Kaneb, et al., declaring that the Otis Pipeline assets and liabilities, if any, were conveyed to what is now a NuStar entity. Kaneb, et al., appealed the judgment, and Grace Energy also appealed to complain about certain aspects of the judgment. The appeal was abated due to the Grace bankruptcy proceeding. In 2001-2002, the U.S. Department of Justice on behalf of the Government, sent letters to counsel for Samson Hydrocarbons and NuStar TS stating that it would file a lawsuit against them in Boston, Massachusetts, to recover all costs incurred in connection with the cleanup of FS-12 and FS-13 and indicating that the U.S. would be willing to engage in settlement negotiations. The Massachusetts General Laws require that parties to a cleanup dispute confer in good faith prior to the plaintiff bringing a lawsuit. To comply with the good faith requirements of the statute, the Parties agreed to mediate. The Government, Grace, Samson Hydrocarbons, and NuStar selected a mediator and engaged in mediation involving multiple meetings and a site visit, spanning July, August, September, and October 2009. Ultimately the parties were successful in negotiating a settlement, which is embodied in the Consent Decree and the Private Parties Agreement. Proposed Settlement Among other things, the Consent Decree: (a) resolves the U.S. Government's claims and potential claims against the Private Parties for the matters addressed in the Consent Decree relating to the Otis Pipeline, by providing a covenant not to sue by the U.S. Government for those matters in exchange for the payment to the U.S. Government of $21,000,000, plus interest from November 15, 2009, through the date of payment; (b) resolves Samson Hydrocarbons' claims for indemnification by Grace for claims and potential claims of the U.S. Government against Samson Hydrocarbons relating to the Otis Pipeline by providing that, upon the effective date of the Consent Decree, Samson Hydrocarbons will have the Samson Hydrocarbons Allowed Otis Claim against Grace for $7,440,000, plus interest from November 15, 2009, through the date of payment, which Samson Hydrocarbons will assign to the U.S. Government; and (c) provides for the funding of the settlement payment to the U.S. Government as: * NuStar will pay $11,700,000, plus applicable interest; * Grace will pay $7,440,000, plus applicable interest, in fulfillment of the Samson Hydrocarbons Allowed Otis Claim; and * Samson Hydrocarbons will pay $1,860,000, plus applicable interest, all payments as directed by the Consent Decree and Private Parties Agreement and liability for each payment being several and not joint. The Private Parties Agreement resolves all differences among the Debtors, the NuStar Entities and the Samson Entities arising out of their claims relating to Otis Pipeline liabilities in return for, among other things, the arrangement by which the monetary obligations to the federal government will be funded by the Debtors, Samson Hydrocarbons, and NuStar. The Private Parties Agreement also contains agreements concerning potential future liabilities, if any, related to the Otis Pipeline. Grace Energy and Kaneb will file a motion with the Texas appellate court asking that the judgment in the Kaneb lawsuit be vacated and the case dismissed, ending a 13 year-long litigation. NuStar will also withdraw its objection to the Debtors' plan of reorganization. Part of the consideration being paid by the Debtors towards the Consent Decree settlement is specifically for NuStar's agreement, with respect to the Otis Pipeline and the MMR, not to pursue any rights under any insurance policies NuStar had or believed it had as successor of Grace's former subsidiary. NuStar contends that those policies might provide it defense, indemnity or other rights relating to Otis Pipeline liabilities. NuStar has filed a motion to lift stay in the Bankruptcy Court, which was denied without prejudice, to pursue coverage under some 25 insurance policies, many of which have been settled pursuant to agreements containing claw-back provisions which, in the event the insurer pays any claims to NuStar, would entitle the insurer to seek repayment of the amounts paid from the Debtors. All disputes among the Debtors, NuStar and Samson Hydrocarbons pertaining to the claims of the Government against NuStar and Samson Hydrocarbons that in general terms relate to (i) the construction, installation, operation of and abandonment of the Otis Pipeline which is located, in part, on a portion of the MMR; (ii) alleged releases from the Otis Pipeline; (iii) remediation of the releases that the U.S. attributes to the Otis Pipeline, and (iv) all U.S. natural resource damage claims related to the Otis Pipeline, including the disputes relating to the portion of Samson Hydrocarbons Otis Pipeline Related Claims pertaining to the U.S. Claims, and methods for handling future claims, are also settled and resolved. Samson Hydrocarbons is granted an allowed claim for $7.44 million on account of the portion of the Samson Hydrocarbons Proofs of Claim pertaining to the U.S. Claims bearing interest from November 15, 2009, through the date of payment, compounded annually, which will be assigned to the U.S. under the terms set forth in the Consent Decree and the Private Parties Agreement. Likewise, all disputes between NuStar and Samson Hydrocarbons relating to the U.S. Claims are resolved. According to Doug Karson, a spokesman for the Air Force, FS-13 was never designated as a plume and only required monitoring, not treatment, Cape Cod Times reported. Mr. Karson said monitoring continues to show that the contamination in FS-13 is localized and has decreased over time. The Cape Cod Times also quoted Mr. Karson as saying that it is unclear how the money from the Otis settlement would be used. He added that officials with the Air Force cleanup program at the Upper Cape base could not comment on the proposed settlement because it had not yet been approved by a judge. A full-text copy of the Otis Settlement is available for free at http://bankrupt.com/misc/Grace_OtisSettlement_Motion.pdf A hearing to consider approval of the Settlement will be held on March 28, 2012, at 9:00 a.m. Objections are due March 2. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Offers $19.5-Mil. Medical Trust for Libby Claimants --------------------------------------------------------------- W.R. Grace & Co., on Jan. 31, 2012, entered into a proposed agreement requiring the Company to turn the currently Grace-funded Libby Medical Program over to a locally administered trust, and to fund the trust with $19.5 million. Grace created the Libby Medical Program for people who were sickened by asbestos exposure from the company's now-shuttered vermiculite plant in Libby, Mont. Grace created the program in 2000, after news reports first documented the widespread disease and deaths among residents of the northwestern Montana town, and has spent more than $20 million. Jon Heberling, the attorney representing the Libby claimants, said on January 31 that the Libby Medical Plan Trust would ensure that the company doesn't terminate the Libby Medical Program, the Associated Press reported. The Libby Medical Program is a voluntary plan that can be terminated whenever Grace chooses, though it has operated while bankruptcy proceedings have gone on since 2001. "The settlement removes that uncertainty," Mr. Heberling told the Daily Inter Lake (http://bit.ly/ymUAUP). "When final settlement documents are approved by the bankruptcy court, all objections to the plan of reorganization from the Libby claimants will be settled and will be withdrawn." Claimants also will be eligible to receive distributions from the separate Asbestos Personal Injury Trust to be established as part of Grace's reorganization plan, Mr. Heberling said. The Company said in a statement that the money for the trusts will come from a variety of sources, including cash, insurance, stock, payments from third parties, and deferred payment obligations. Grace said that its reorganization plan had been approved by the U.S. District Court of Delaware but is subject to appeal. The settlements also are subject to the approval of the Libby claimants. The bankruptcy agreement comes four months after a Montana judge approved a $43 million settlement for 1,128 asbestos victims who said state officials knew that dust from the mine was killing people but failed to intervene. That settlement stems from more than 200 lawsuits brought against Montana agencies for failing to protect victims in Libby. The state claimed in its defense that it had no legal obligation to provide warning of the mine's dangers. An estimated 400 people have been killed by asbestos released from the vermiculite mine. Lethal dust from the mine once blanketed the small community about 40 miles south of the Canadian border, and asbestos illnesses were still being diagnosed more than two decades after the mine was shuttered. The Center for Asbestos Related Diseases in Libby has a caseload of more than 2,800 patients with asbestos disease and is adding more patients. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Renews Application to Hire PwC as Accountants --------------------------------------------------------- On Nov. 14, 2011, W.R. Grace & Co. and its affiliates filed their application asking the U.S. Bankruptcy Court for the District of Delaware for an order amending its previous order authorizing the employment and retention of PricewaterhouseCoopers LLP as independent accountants and auditors to the Debtors by waiving the requirement that PwC bill activities in tenth of an hour units and authorizing PwC to record and submit a summary time report kept in one hour increments in its fee applications, thereby, resulting in substantial savings to the Debtors' bankruptcy estates. No party- in-interest objected to the Application. A hearing was held on the Application on December 19, 2011. At the Hearing, the Bankruptcy Court stated that the Application could be renewed in its current form in the event the U.S. District Court for the District of Delaware confirmed the Debtors' Plan of Reorganization. Thus, the Bankruptcy Court did not rule on the Application at the Hearing, but continued the Application to the January 23, 2012 omnibus hearing, and further continued the Application to the February 27, 2012 omnibus hearing after the January 23, 2012 omnibus hearing was cancelled. On January 31, 2012, the District Court issued a memorandum opinion and entered an order confirming the Debtors' Plan and affirming and adopting in all respects this Court's findings of fact and conclusions of law. Thus, at this time the Debtors renew the Application, and ask the Bankruptcy Court to grant the Application. As previously reported, the Debtors assert that PwC's continued compliance with the Six Minute Increments Requirement is an additional expense for them because it is not the general practice of PwC to keep detailed time records similar to those customarily kept by restructuring attorneys so as to comply with the Six Minute Increments Requirement. She says that to comply with the Six Minute Increments Requirement, PwC has had to institute a special timekeeping record system for all professionals and paraprofessionals recording time concerning the Debtors' Chapter 11 Cases. About W.R. Grace & Co. Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) - - http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) YELLOWSTONE MOUNTAIN: Founder Sues Cushman, Credit Suisse for $2BB ------------------------------------------------------------------ Carolina Bolado at Bankruptcy Law360 reports that Yellowstone Mountain Club LLC's former owner on Tuesday filed a $2 billion suit accusing Cushman & Wakefield Inc. and Credit Suisse Group AG of overvaluing the property and extending a $375 million predatory loan in a racketeering scheme to take over the Montana resort. In a complaint filed in the District of Colorado, Timothy L. Blixseth, who co-founded the bankrupt luxury ski and golf resort with his ex-wife Edra Blixseth, said Cushman & Wakefield used questionable appraisal techniques, Law360 relates. About Yellowstone Mountain Located near Big Sky, Montana, Yellowstone Mountain Club LLC -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. The Company was founded in 1999. Yellowstone Club and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Montana, Case No. 08-61570) on Nov. 10, 2008. The Company's owner affiliate, Edra D. Blixseth, filed for Chapter 11 relief on March 27, 2009 (Case No. 09-60452). In June 2009, the Bankruptcy Court entered an order confirming Yellowstone's Chapter 11 Plan. Pursuant to the Plan, CrossHarbor Capital Partners LLC acquired equity ownership in the reorganized Club for $115 million. Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green PLLC represented the Debtors. The Debtors hired FTI Consulting Inc. and Ronald Greenspan as CRO. The official committee of unsecured creditors were represented by Parsons, Behle and Latimer; and James H. Cossitt, Esq., as counsel. Credit Suisse, the prepetition first lien lender, was represented by Skadden, Arps, Slate, Meagher & Flom. ZOGENIX INC: FMR LLC Discloses 9.8% Equity Stake ------------------------------------------------ In an amended Schedule 13G filed with the U.S. Securities and Exchange Commission on Feb. 13, 2012, FMR LLC and Edward C. Johnson 3d disclosed that they beneficially own 6,408,467 shares of common stock of Zogenix Inc. representing 9.831% of the shares outstanding. A full-text copy of the regulatory filing is available at http://is.gd/zLgARz About Zogenix Inc. Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. As reported in the TCR on March 8, 2011, Ernst & Young LLP, in San Diego, Calif., expressed substantial doubt about Zogenix's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that of the Company's recurring losses from operations and lack of sufficient working capital. The Company also reported a net loss of $60.19 million on $29.67 million of total revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $71.42 million on $14.63 million of total revenue for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $116.88 million in total assets, $86.71 million in total liabilities and $30.16 million in total stockholders' equity. * Christine Swanick Joins Sheppard Mullin New York -------------------------------------------------- Christine L. Swanick has joined Sheppard, Mullin, Richter & Hampton LLP as a partner in the firm's Finance and Bankruptcy practice group, and will be based in the firm's New York office. Swanick joins from Dorsey & Whitney in New York, where she co- chaired the firm's Indian Law group. Ms. Swanick concentrates her practice in the area of commercial financing and other credit transactions, including commercial loans, syndicated credit facilities, note and bond financings and debt restructurings, especially in the area of Native American tribe-related financing projects. She also represents tribes and entities doing business with tribes in contractual, gaming, regulatory and economic development matters. Prior to joining Dorsey, Swanick practiced as an in-house attorney for tribes in Michigan, Arizona and Colorado. Her clients include leading financial institutions and Native American tribes. "Christine is a perfect practice group fit from both a business and personal perspective. As a nationally recognized Native American law expert, she adds depth to our finance practice and her focus on tribal gaming complements our existing capabilities in that practice specialty. Christine is also an excellent addition to both our growing transactional practice in New York and to our national finance practice, as she does deals countrywide and shares existing firm clients," said Guy N. Halgren, chairman of Sheppard Mullin. "I am thrilled to be joining Sheppard Mullin. The firm's commitment to its Native American practice and to further growing such practice, together with its breadth of financing expertise will enhance the legal services I can provide to my clients. Equally impressive are the dynamic and talented lawyers at Sheppard Mullin. Supported by the firm's entrepreneurial culture, collegial atmosphere and transparent management structure, I look forward to the superior legal work we will perform for our clients," Swanick commented. Ms. Swanick received her J.D. from University of Arizona in 1995 and a B.A., magna cum laude, Phi Beta Kappa, from Boston College in 1990. She has been ranked since 2008 by Chambers USA as a "Leading Individual" in Native American Law and is currently recognized among the Best Lawyers in America. Sheppard Mullin has more than 40 attorneys based in its New York office. The firm's Finance and Bankruptcy practice group includes more than 60 attorneys firmwide. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ANOORAQ RESOURCE ARQ SJ 927.7 (148.7) 29.2 AUTOZONE INC AZO US 5,932.6 (1,347.1) (736.3) LORILLARD INC LO US 3,008.0 (1,513.0) 1,079.0 DUN & BRADSTREET DNB US 1,775.6 (558.0) (478.3) WEIGHT WATCHERS WTW US 1,121.6 (409.8) (279.7) MEAD JOHNSON MJN US 2,766.8 (168.0) 689.6 TAUBMAN CENTERS TCO US 3,336.8 (256.2) - CLOROX CO CLX US 4,290.0 (199.0) (289.0) MEDIVATION INC MDVN US 188.3 (3.9) 89.4 AMC NETWORKS-A AMCX US 2,121.5 (1,065.5) 519.5 DIRECTV-A DTV US 18,423.0 (2,842.0) (502.0) VERISK ANALYTI-A VRSK US 1,379.9 (158.9) (234.2) SUN COMMUNITIES SUI US 1,328.6 (72.4) - MOODY'S CORP MCO US 2,876.1 (158.4) 290.4 VERISIGN INC VRSN US 1,856.2 (88.1) 788.9 CROWN HOLDINGS I CCK US 6,868.0 (239.0) 318.0 CHOICE HOTELS CHH US 467.9 (14.4) 28.0 MARRIOTT INTL-A MAR US 5,910.0 (781.0) (1,234.0) DOMINO'S PIZZA DPZ US 438.2 (1,221.0) 118.2 GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 RENTECH NITROGEN RNF US 152.4 (76.1) (32.3) HCA HOLDINGS INC HCA US 26,898.0 (7,014.0) 1,679.0 IPCS INC IPCS US 559.2 (33.0) 72.1 SALLY BEAUTY HOL SBH US 1,792.7 (168.5) 482.3 CLOVIS ONCOLOGY CLVS US 26.4 (18.1) (19.2) MAINSTREET EQUIT MEQ CN 477.7 (11.1) - RSC HOLDINGS INC RRR US 3,141.0 (38.4) (1.0) CHENIERE ENERGY CQP US 1,803.0 (524.1) 67.7 AMERISTAR CASINO ASCA US 2,039.6 (105.7) (50.8) UNISYS CORP UIS US 2,612.2 (1,311.0) 487.3 CAPMARK FINANCIA CPMK US 20,085.1 (933.1) - MONEYGRAM INTERN MGI US 5,175.6 (110.2) (40.4) THERAVANCE THRX US 258.8 (87.1) 199.3 VECTOR GROUP LTD VGR US 931.0 (66.7) 252.6 AMYLIN PHARM INC AMLN US 1,870.2 (138.7) 125.2 INCYTE CORP INCY US 371.2 (181.0) 225.5 FREESCALE SEMICO FSL US 3,415.0 (4,480.0) 1,432.0 RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) REVLON INC-A REV US 1,157.1 (692.9) 183.3 BOSTON PIZZA R-U BPF-U CN 146.9 (105.3) (2.0) PROTECTION ONE PONE US 562.9 (61.8) (7.6) CABLEVISION SY-A CVC US 6,740.1 (5,525.9) (886.1) NATIONAL CINEMED NCMI US 807.9 (346.2) 56.6 ANGIE'S LIST INC ANGI US 32.6 (38.9) (25.9) FNB UNITED CORP FNBN US 1,643.9 (129.9) - OTELCO INC-IDS OTT US 316.1 (10.1) 22.9 OTELCO INC-IDS OTT-U CN 316.1 (10.1) 22.9 CHENIERE ENERGY LNG US 2,651.4 (446.9) (282.7) QUALITY DISTRIBU QLTY US 304.3 (105.9) 44.1 REGAL ENTERTAI-A RGC US 2,262.0 (555.7) (25.8) MANNING & NAPIER MN US 66.1 (184.6) - AMER AXLE & MFG AXL US 2,328.7 (419.6) 187.0 JUST ENERGY GROU JE US 1,644.4 (394.5) (338.4) JUST ENERGY GROU JE CN 1,644.4 (394.5) (338.4) HANDY & HARMAN L HNH US 380.4 (0.9) 39.2 ACCO BRANDS CORP ABD US 1,116.7 (61.9) 316.8 DEAN FOODS CO DF US 5,754.4 (98.7) 423.3 IDENIX PHARM IDIX US 88.8 (2.3) 54.6 SINCLAIR BROAD-A SBGI US 1,571.4 (111.4) (111.5) WESTMORELAND COA WLB US 769.0 (174.4) (5.9) DELTA AIR LI DAL US 43,499.0 (1,396.0) (4,972.0) LIZ CLAIBORNE LIZ US 1,144.0 (420.0) (97.3) SINCLAIR BROAD-A SBTA GR 1,571.4 (111.4) (111.5) CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) NEXSTAR BROADC-A NXST US 582.7 (187.0) 26.2 ISTA PHARMACEUTI ISTA US 137.5 (34.8) (7.5) NYMOX PHARMACEUT NYMX US 6.5 (5.5) 3.3 MERITOR INC MTOR US 2,553.0 (983.0) 180.0 PRIMEDIA INC PRM US 208.0 (91.7) 3.6 NPS PHARM INC NPSP US 214.0 (46.1) 156.0 BLUEKNIGHT ENERG BKEP US 320.8 (12.5) (69.9) PDL BIOPHARMA IN PDLI US 270.5 (243.2) 44.6 PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) MORGANS HOTEL GR MHGC US 480.8 (77.2) (4.1) GENCORP INC GY US 939.5 (207.2) 101.1 ABSOLUTE SOFTWRE ABT CN 125.3 (7.2) 10.8 DIGITAL DOMAIN M DDMG US 178.9 (85.7) (38.3) PALM INC PALM US 1,007.2 (6.2) 141.7 VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) CC MEDIA-A CCMO US 16,508.9 (7,456.0) 1,531.3 LIN TV CORP-CL A TVL US 815.8 (115.0) 56.6 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 SYNERGY PHARMACE SGYP US 2.1 (8.6) (6.1) DENNY'S CORP DENN US 350.5 (9.7) (25.9) CENVEO INC CVO US 1,407.1 (331.1) 222.9 BLUESKY SYSTEMS BSKS US 0.1 (0.2) - CINCINNATI BELL CBB US 2,683.8 (626.1) 22.7 HUGHES TELEMATIC HUTC US 94.0 (111.8) (39.0) HUGHES TELEMATIC HUTCU US 94.0 (111.8) (39.0) SMART TECHNOL-A SMT US 529.8 (7.1) 183.9 SMART TECHNOL-A SMA CN 529.8 (7.1) 183.9 ODYSSEY MARINE OMEX US 25.8 (0.7) (4.1) GOLD RESERVE INC GRZ US 85.2 (19.9) 60.2 HOVNANIAN ENT-A HOV US 1,602.2 (496.6) 896.2 GOLD RESERVE INC GRZ CN 85.2 (19.9) 60.2 PETROALGAE INC PALG US 8.3 (76.0) (77.4) ********* 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 ***