/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120224.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, February 24, 2012, Vol. 16, No. 54 Headlines 207 REDWOOD: Plan Confirmation Hearing Continued Until April 24 ACCESS PHARMACEUTICALS: Has Prospectus for $10-Mil. Shares Sale AHERN RENTALS: Committee Taps Downey Brand as Nevada Counsel AMERICAN AIRLINES: Paul Hastings Hiring Approved on Interim AMERICAN AIRLINES: PSAs Want Official Retirees Committee AMERICAN AIRLINES: Wins DOT Nod of Hainan Codeshare Deal AMERICAN AIRLINES: Reports January 2012 Traffic Results AMERICAN AIRLINES: AA Flight Attendant Want New Management AMERICAN SCIENTIFIC: Austin Kazinetz Appointed to Board AMERICAN SCIENTIFIC: May Issue 302-Mil Shares if Notes Converted ANTERION THERAPEUTICS: Voluntary Chapter 11 Case Summary APOLLO MEDICAL: Names Health Care Exec. Ted Schreck as Chairman ARCADIA RESOURCES: Incurs $9.7 Million Net Loss in Dec. 31 Qtr. ARCTIC GLACIER: Pursues Recapitalization Via CCAA Filing BERNARD L. MADOFF: $59BB Racketeering Claims Vs. UniCredit Junked BIOLIFE SOLUTIONS: Grants CFO Option to Buy 250,000 Common Shares BOOMERANG SYSTEMS: Incurs $3 Million Net Loss in Dec. 31 Quarter BRYCO ARMS: Owner's Ex-Wife Liable for Fraudulent Transfer BULL POINT: Case Summary & 20 Largest Unsecured Creditors CARPENTER CONTRACTORS: DIP Loan, Cash Coll. Access Ends May 1 CDC CORP: Court Approves Share Sale Deal with Vista Affiliate CEMTREX INC: Reports $190,000 Net Income in Dec. 31 Quarter CHARLES RIVER: Moody's Affirms 'Ba2' Corporate Family Rating CHURCH STREET: To Have Sale Deal With Garrison in Few Days CHURCH STREET: Updated Case Summary & Creditors' Lists CICERO INC: Anthony Pizi Resigns as Board Member CIT GROUP: CEO John Thain Sells Shares to Pay Tax COLONIAL GOLF: Voluntary Chapter 11 Case Summary COMMSCOPE INC: Moody's Says Loan Price Reduction No Impact on CFR COMMSCOPE INC: S&P Affirms 'B+' Corporate Credit Rating COYOTES HOCKEY: NHL to Finalize Sale on Franchise CROATAN SURF: Hearing on Plan Outline Continued Until April 4 CRYOPORT INC: Incurs $2.1 Million Net Loss in Dec. 31 Quarter CRYSTAL HOMES: Case Summary & 20 Largest Unsecured Creditors CYCLONE POWER: Completes Acquisition of Advent Power Systems CYTOCORE INC: Clint Severson Resigns from Board of Directors DELTA PETROLEUM: Amends Schedules of Assets and Liabilities DELTA PETROLEUM: Moves to Protect $1.1 Billion in Tax Benefits DYNEGY INC: Disclosure Statement Hearing Pushed Back to March 9 DYNEGY INC: Defends Same Grouping of Senior and Subordinated Debt DYNEGY INC: Examiner Proposes to Tap DWP&V as Tax Counsel DZF PROPERTIES: Can Hire Grubb & Ellis as Real Estate Broker EAST HARLEM: Plan Exclusivity Extended to April 13 EASTMAN KODAK: Application to Tap Lazard as Investment Banker EASTMAN KODAK: Agrees to Proceed With Trial on RIM Patent Suit EASTMAN KODAK: Sec. 341 Meeting of Creditors Set for March 12 EASTMAN KODAK: Gets Final Approval to Borrow $950 Million EASTMAN KODAK: Apple Proposes to Prosecute Patent Complaint ELEPHANT TALK: Steven Velden Discloses 7.6% Equity Stake ESTATE FINANCIAL: Ch. 11 Trustee Wants Litigation Claims Expert EUROMAX INT'L: Moody's Affirms 'Caa1' Corp. Family Rating EVERYWARE INC: S&P Assigns Prelim. 'B' Corporate Credit Rating FANNIE MAE: Legal Fees Cost Taxpayers Almost $50 Million FILENE'S BASEMENT: Equity Committee Wants to File Competing Plan FLINT ENERGY: Moody's Reviews 'B1' Corp. Rating for Upgrade FLINT ENERGY: S&P Puts 'BB-' Corp. Credit Rating on Watch Pos. FREDERICK WENDT-HUGHES: Attorney's Lawsuit Survives Dismissal Bid FULLER BRUSH: Files for Chapter 11 in Manhattan FULLER BRUSH: Voluntary Chapter 11 Case Summary GAGE'S LONG: Judge Approves Plan to Sell Assets to Big Cedar GALP CYPRESS: Case Dismissal Hearing Scheduled for March 6 GENERAL MARITIME: Plan Omits Crucial Info, BNY Mellon Says GENERAL MOTORS: In Talks With Peugeot Citroen on Possible Alliance GOLDENPARK LLC: Fails to File Plan, MORs; Case Dismissed GRUBB & ELLIS: Wins Interim Approval of BGC Partners DIP Loan GRUBB & ELLIS: Organizational Meeting Today to Form Committee GRUBB & ELLIS: Taps Togut Segal as Bankruptcy Counsel GSS BUSINESS: Case Summary & 4 Largest Unsecured Creditors HMC/CAH: Has Until April 10 to File a Chapter 11 Plan HOSTESS BRANDS: U.S. Trustee Protests New Contract for Chief HOVNANIAN ENTERPRISES: Regains Compliance with NASDAQ Rule HYPERION FOUNDATION: Court Sides With Landlord in Contract Rift INGRID E. TRENKLE: Case Summary & 7 Largest Unsecured Creditors INTEGRATED BIOPHARMA: Incurs $784,000 Net Loss in Dec. 31 Qtr. INVESTCORP BANK: Fitch Cuts Issuer Default Ratings to 'BB' IVOICE INC: Former President Inks Note Exchange Pact with ASRC JANE ADDAMS: Chicago Charity Files for Chapter 7 Bankruptcy JEWISH COMMUNITY: Wants to Hire Bederson & Company as Accountant JIM PALMER: Dist. Court Has Jurisdiction on Navistar Lawsuit KM ASSOCIATES: Court Wants Agreed Order on Cash Use LA BUENA: Case Summary & 3 Largest Unsecured Creditors LAND CONSERVANCY: Congregation Wins Tiff Over Elkins Park Property LEHMAN BROTHERS: Committee Members Seek $26.3MM in Fees, Expenses LEHMAN BROTHERS: Wants to Subpoena Treasury's Geithner LEHMAN BROTHERS: CDO Holders Sue LBSF, BNY LEHMAN BROTHERS: Fontainebleau Counterclaims Stay Put LEHMAN BROTHERS: Barclays Asks Court to Enforce $50-Bil. Deal LEHMAN BROTHERS: Court Grants Ch. 15 Protection to Australian Unit LEHMAN BROTHERS: Aussie Court Reopens Investors' Class Suit LIMA'S TASTE: Blames Economic Downturn for Bankruptcy Filing LOS ANGELES DODGERS: Cleared by Judge to Move Forward With Plan MACROSOLVE INC: Issues Convertible Debentures and Warrants MARKETING WORLDWIDE: Incurs $2.1 Million Net Loss in Dec. 31 Qtr. MAYSVILLE INC: Chapter 11 Reorganization Case Dismissed MCDONALD BROTHERS: Has Final OK to Use BB&T Cash Collateral METHANEX CORP: Moody's Assigns 'Ba1' Corporate Family Rating MF GLOBAL: Trustee Proposes Freeh Sporkin as Regulatory Counsel MF GLOBAL: Trustee Proposes Freeh Group as Advisor MF GLOBAL: Trustee Proposes FTI as Financial Advisor MF GLOBAL: Slaughter and May Shares Info on Clients MF GLOBAL: Committee Proposes to Retain Capstone as Advisor MF GLOBAL: Committee Wins OK for Dewey & LeBoeuf as Attorneys MFJT LLC: Has Access to BACM 2007's Cash Collateral Until Feb. 29 MILL RIVER: Case Summary & 20 Largest Unsecured Creditors MONEYGRAM INT'L: Silver Point Ceases to Own 5% of Common Shares MONEYGRAM INT'L: Thomas Lee Discloses 50.8% Equity Stake MOUNTAIN CITY: To Present Plan for Confirmation on April 16 NEBRASKA BOOK: Judge Gives April 23 Deadline to File New Plan NEW DIRECTION: Case Summary & 11 Largest Unsecured Creditors NORANDA ALUMINUM: Moody's Affirms 'B1'; Outlook Negative NORANDA ALUMINUM: S&P Affirms 'B+', Gives Stable Outlook NORTHERN BERKSHIRE: Hearing on Further Cash Access Set for April 2 NORTHERN BERKSHIRE: Fine-Tunes Plan Ahead of April 2 Hearing NORTHWEST PARTNERS: Files Plan; Disclosures Hearing April 26 PAPILLON ISLAND: Voluntary Chapter 11 Case Summary PARMALAT SPA: 2nd Cir. Sends Securities Litigation to Illinois PEAK BROADCASTING: Court Approves Reorganization Plan PEGASUS RURAL: Plan Provides Transfer of 700MHz Assets to NewCo PERFORMANT FIN'L: S&P Assigns Prelim. 'B+' Corp. Family Rating QUIGLEY CO: Has Until Aug. 24 to Settle Creditor Claims QUINCY MEDICAL: 2 Officers Seek $603,000 in Severance Pay RAMZ REAL ESTATE: Case Summary & 2 Largest Unsecured Creditors RCR PLUMBING: Has Access to Cash Collateral Until Aug. 13 RCR PLUMBING: Gets Extension of Deadline to Decide on Leases RCR PLUMBING: Court Sets March 30 as Claims Bar Date RCR PLUMBING: Has OK to Hire Oliva and Assoc. as Special Counsel RCR PLUMBING: Gets Nod to Hire KCC as Claims Agent REICHHOLD INDUSTRIES: Cut by Moody's to Caa3 After Missed Payment RESPONSE GENETICS: Regains NASDAQ Compliance ROTHSTEIN ROSENFELDT: Fund Objects to $70MM Bank Settlement RP EDGINGTON: Voluntary Chapter 11 Case Summary SBA COMMS: S&P Puts 'B+' Corp. Credit Rating on Watch Negative SEARCHMEDIA HOLDINGS: Names Peter Tan as Chief Executive Officer SHAMROCK-SHAMROCK: Has Jeffrey Badgley for State Suit SKINNY NUTRITIONAL: Signs Exclusive Pact with Cott Subsidiary SNOKIST GROWERS: Wants to Use $75,000 for Repair and Maintenance SOUTHWEST HEALTH: Case Summary & 3 Largest Unsecured Creditors SRCR LLC: Case Summary & 6 Largest Unsecured Creditors SWAMI SHREE: Can Use Cash Collateral Through March 16 TELECONNECT INC: Incurs $1.2 Million Net Loss in Dec. 31 Quarter TELLICO LANDING: Has Until Today to File New Plan Documents TRIBUNE CO: Says SLCFC Actions Will Delay Plan Process TRIBUNE CO: $30-Mil. Letter of Credit Extended to April 2013 TRIBUNE CO: Asks for Court Nod of Local TV License Agreement VENOCO INC: S&P Keeps 'B' Corporate Credit Rating on Watch Neg. WASHINGTON MUTUAL: Former Execs Balk at Plan for D&O Claims WAVE2WAVE COMMUNICATIONS: Meeting to Form Committee on Feb. 29 WILSON INTERNATIONAL: Files for Chapter 11 in Delaware WILSON INTERNATIONAL: Voluntary Chapter 11 Case Summary WYNN RESORTS: Fitch Affirms 'BB' Amid Suit vs. Board Member WYNN RESORTS: S&P Affirms 'BB+' on Reduced Flexibility * BOOK REVIEW: Performance Evaluation of Hedge Funds ********* 207 REDWOOD: Plan Confirmation Hearing Continued Until April 24 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maryland has continued until April 24 and 25, 2012, at 10:00 a.m., the hearing to consider the confirmation of 207 Redwood LLC's Amended Chapter 11 Plan. At the hearing, the Court will also consider the objections filed by creditors RL BB Financial, LLC, and Koam Construction, Inc. The Court approved the Disclosure Statement on Nov. 23, 2011. As reported in the Troubled Company Reporter on Sept. 23, 2011, the Plan contemplates the completion of the Debtor's building project in Baltimore, Maryland, and the transfer of ownership to an entity named Harbor Hotel Developers LLC. Payments made under the Plan after the Effective Date will be derived from (a) income generated by the operations of the Reorganized Debtor and (b) the additional capital provided by a "new investor." The new investor, Harbor Hotel Developers LLC, will make available the sum of $3.5 million in exchange for interests of the Reorganized Debtor. Of the capital contribution, $1 million is allocated for the completion of renovations and construction- related expenses; $1.5 million is for furniture, fixtures and equipment; and $1 million in reserves for operations, unexpected expenses and funding of the Plan. The Plan designates 8 Classes of Claims and Interests: Class 1. Holder of the Secured Claim of FNA Maryland Class 2. Holder of the Secured and Unsecured Claim of the BB&T Note Holder Class 3. Holders of Class A Creditors Class 4. Holder of Koam Claim Class 5. Holder of L.J. Brossoit Claim Class 6. Holder of Sherwin-Williams Claim Class 7. Allowed Unsecured Claims Class 8. Interests The holder of the Class 1 secured claim of $184.9 million will receive payment equal to 100% of its allowed claim on the effective date of the Plan. Creditors in other classes are impaired under the Plan. The holder of the Class 2 Claim of $14.2 million will receive 100% of the allowed amount of its secured claim up to $10.8 million, the value of the BB&T Note Holder's interest in the Property, over time, and the allowed amount of its Unsecured Claim up to $3.4 million will be paid under Class 7. Because the Remaining Secured Claims exceed the value of the Debtor's property, these claims will be treated as Unsecured Claims. The Holder of the Class 3 secured claim of $6 million will receive payment on the terms set forth for Class 7 under the Plan. The holder of the Class 4 secured claim of $1 million will receive $50,000 in five consecutive monthly installments. The holder of the Class 5 secured claim ($65,000) will receive $3,100 in five consecutive monthly installments, and the Holder of the Class 6 Secured Claim ($60,000) will receive $3,050 in five consecutive monthly installments. Holders of allowed secured claims in Class 4 ($1 million), Class 5 ($65,000), and Class 6 ($60,000) will receive $50,000, $3,100, and $3,050, respectively, in five consecutive monthly installments. Holders of unsecured claims aggregating $11.9 million, which includes the allowed unsecured claims from Class 2 ($3.4 million) and Class 3 ($6.0 million), will share Pro Rata in the $100,000 to be provided by Harbor Hotel. Upon confirmation of the Plan, the Holders of Interests in the Debtor will not receive or retain anything on account of their Interests, and their Interests will be canceled and extinguished as of the Effective Date. A copy of the Third Amended Disclosure Statement is available for free at http://bankrupt.com/misc/207Redwood.DS.3rdAmendedPlan.pdf About 207 Redwood Columbia, Maryland-based 207 Redwood LLC was created to own, rehabilitate and develop a 10-story historic building located at 207 East Redwood Street in downtown Baltimore, Maryland, into a hotel. The Debtor filed for Chapter 11 protection (Bankr. D. Md. Case No. 10-27968) on Aug. 6, 2010. James A. Vidmar, Jr., Esq., and Lisa Yonka Stevens, Esq., at Logan, Yumkas, Vidmar & Sweeney, LLC, in Annapolis, Md., assist the Debtor in its restructuring effort. In its amended schedules, the Debtor disclosed $14.5 million in assets and $24.1 million in liabilities as of the Petition Date. ACCESS PHARMACEUTICALS: Has Prospectus for $10-Mil. Shares Sale --------------------------------------------------------------- Access Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission a Form S-1 relating to the Company's offering of an indeterminate amount of units, each unit consisting of one share of the Company's common stock and warrants to purchase up to an additional indeterminate share of the Company's common stock. The units will separate immediately and the common stock and warrants will be issued separately and the common stock will trade separately. The proposed maximum aggregate offering price is $10 million. The Company's common stock is presently listed on the Over-the- counter Bulletin Board under the symbol "ACCP". The Company does not intend to apply for listing of the warrants on any securities exchange. On Feb. 17, 2011, the last reported sale price of the Company's common stock on the OTC BB was $1.37 per share. A full-text copy of the Form S-1 is available for free at: http://is.gd/oHDtWi About Access Pharmaceuticals Access Pharmaceuticals, Inc., develops pharmaceutical products primarily based upon its nano-polymer chemistry technologies and other drug delivery technologies. The Company currently has one approved product, one product candidate at Phase 3 of clinical development, three product candidates in Phase 2 of clinical development and other product candidates in pre-clinical development. The Company reported a net loss of $7.54 million in 2010 compared with a net loss of $17.34 million in 2009. The Company also reported a net loss of $2.81 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $2.22 million in total assets, $25.68 million in total liabilities, and a $23.46 million total stockholders' deficit. As reported by the TCR on April 5, 2011, Whitley Penn LLP, in Dallas, Texas, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's 2010 results. The independent auditors noted that the Company has had recurring losses from operations, negative cash flows from operating activities and has an accumulated deficit. AHERN RENTALS: Committee Taps Downey Brand as Nevada Counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Ahern Rentals, Inc., asks the Bankruptcy Court for authority to retain Downey Brand LLP as local Nevada counsel. Downey Brand has agreed to provide the Committee: a. advice on Nevada law and local practice; b. representation before the Bankruptcy Court in Nevada; c. assistance with preparation and filing of Bankruptcy Court documents; and d. other services as may be requested by the Committee. The firm's Sallie B. Armstrong, Esq., and Michelle N. Kazmar, Esq., will be primarily responsible for performing services for the Committee. The customary hourly rates for each professional initially assigned to the case are: Name Position Rate ---- -------- ---- Sallie B. Armstrong Partner $410 Michelle N. Kazmar Associate $295 In addition, Downey Brand's paralegals bill between $145 and $250 per hour. Downey Brand can be contacted at: Sallie B. Armstrong, Esq. DOWNEY BRAND LLP 427 West Plumb Lane Reno, Nevada 89509 Tel: (775) 329-5900 Fax: (775) 786-5443 E-mail: reno@downeybrand.com About Ahern Rentals Founded in 1953 with one location in Las Vegas, Nevada, Ahern Rentals Inc. -- http://www.ahern.com/-- now offers rental equipment to customers through its 74 locations in Arizona, Arkansas, California, Colorado, Georgia, Kansas, Maryland, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and Washington. Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain an extension of the Aug. 21, 2011 maturity of its revolving credit facility. Judge Bruce T. Beesley presides over the case. Lawyers at Gordon Silver serve as the Debtor's counsel. The Debtor's financial advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to Bank of America, as the DIP Agent and First Lien Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer. Attorneys for the Majority Term Lenders are Paul Aronzon, Esq., and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP. Counsel for the Majority Second Lienholder are Paul V. Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq., at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert LLP argue for certain revolving lenders. Attorneys for U.S. Bank National Association, as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard, Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland & Hart. In its schedules, the Debtor disclosed $485,807,117 in assets and $649,919,474 in liabilities. The Official Committee of Unsecured Creditors has tapped Covington & Burling LLP as counsel, Downey Brand LLP as local counsel, and FTI Consulting as financial advisor. AMERICAN AIRLINES: Paul Hastings Hiring Approved on Interim ----------------------------------------------------------- The Bankruptcy Court approved, on an interim basis, American Airlines' application to employ Paul Hastings LLP as their special labor counsel, nunc pro tunc to the Petition Date. The Court will consider final approval of the Debtors' Application on February 29, 2012. Objections are due no later than Feb. 24. Before the Final Hearing and pending further order of the Court, no compensation or expense reimbursement will be paid by the Debtors to Paul Hastings. As special labor counsel, Paul Hastings will advise the Debtors regarding litigation, labor and employment law. The firm will also assist the Debtors in objecting to and litigating any potential bankruptcy claims by employees or unions. The firm will be paid on an hourly basis for its services and will be reimbursed of its expenses. Its hourly rates range from $585 to $1,100 for partners and counsel, $345 to $790 for associates, and $50 to $460 for paraprofessionals. Scott Flicker, Esq., a member of Paul Hastings LLP disclosed in court papers that his firm does not represent any interest adverse to the Debtors or their estates. Mr. Flicker may be reached at: Scott Flicker, Esq. PAUL HASTINGS LLP 875 15th Street, N.W. Washington, D.C. 20005 Tel: (202) 551-1726 Fax: (202) 551-0126 E-mail: scottflicker@paulhastings.com AMERICAN AIRLINES: PSAs Want Official Retirees Committee -------------------------------------------------------- The Ad Hoc Committee of Passenger Service Agents in American Airlines' Chapter 11 cases asks Judge Sean Lane to direct appointment of an official committee of retired employees pursuant to Section 1114(d) of the Bankruptcy Code. Susan Jennik, Esq., at Kennedy, Jennik & Murray, P.C., in New York -- sjennik@kjmlabor.com -- asserts that thousands of passenger service agents employed by American Airlines, Inc. paid thousands of dollars during their employment to ensure that they would have medical benefits when they retired. The Debtors are now proposing to eliminate medical benefits for retirees who were promised that they would have their prefunded medical benefits upon their retirement and who retired in reliance on that promise, she points out. These individuals are retirees of AA who paid in advance for retiree medical benefits and are receiving medical and life insurance benefits subsidized by AA: * Carolyn Collier * Dorothy Gorecki * Arlene Milom Each of these retirees, Ms. Jennik tells the Court, is interested in serving on a Retirees Committee appointed pursuant to Section 1114(d) of the Bankruptcy Code. Ms. Jennik insists that cause exists to appoint a Retirees Committee at this time because the Debtors have made it clear that they are proposing to modify retiree benefits. She contends that repayment of the prefunded amount paid by retirees does not adequately compensate them for losing the benefits which they were promised and on which they relied in making their decisions to retire. Moreover, a Retirees Committee should be reflective of all groups of retirees whose benefits are being modified and should include representatives of the passenger service agents, representatives and planners, she adds. The Court will consider the Ad Hoc Committee's request on February 29, 2012. Objections are due no later than Feb. 22. 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: Wins DOT Nod of Hainan Codeshare Deal -------------------------------------------------------- American Airlines, a founding member of oneworld(R), publicly thanked the U.S. Department of Transportation (DOT) for granting its request to approve a reciprocal codeshare agreement with Hainan Airlines of the People's Republic of China. "This decision comes after Chinese Vice President Xi Jinping appeared at the White House on Tuesday with President Barack Obama, who stressed that the U.S. is focused on building a better economic and strategic relationship between the two nations," said Will Ris, American's Senior Vice President -- Government Affairs. "In this spirit, American applauds the president and DOT for their approval of the proposed codeshare relationship between American and Hainan Airlines, China's fourth largest carrier. "This new codeshare relationship will promote travel and tourism and further strengthen economic and cultural ties between the U.S. and China," Mr. Ris added. "A codeshare relationship will allow American and Hainan to efficiently connect Chinese air travelers from cities throughout China to the U.S. via Beijing and Shanghai. Similarly, the approval will create more convenient travel options for U.S. consumers when traveling to China." With this approval, Hainan will be able to display the AA* designator code on its flights between the U.S. and China (currently Seattle-Beijing) and on its flights within China beyond American's Beijing and Shanghai gateways. In addition, American may now display the HU* code on its flights between the U.S. and China (currently Chicago-Beijing, Chicago-Shanghai and Los Angeles-Shanghai) and on flights operated by American within the U.S. beyond Hainan's Seattle gateway. 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: Reports January 2012 Traffic Results ------------------------------------------------------- American Airlines reported a January load factor of 78.5 percent, an increase of 2.7 points versus the same period last year. Traffic increased 1.4 percent, while capacity was lower by 2.1 percent year-over-year. International traffic increased 5.0 percent relative to last year as capacity increased 1.2 percent, resulting in an increase in international load factor of 2.9 points versus January last year. Domestic load factor was 78.0 percent, an increase of 2.6 points year-over-year. Domestic capacity and traffic were 4.4 percent and 1.1 percent lower year-over-year respectively. American Airlines Passenger Division Comparative Preliminary Traffic Summary Excludes Charter Services January 2012 2011 Change ---- ---- ------ Revenue Passenger Miles ('000) System 10,004,510 9,868,063 1.4% D.O.T. Domestic 5,821,010 5,884,828 (1.1%) International 4,183,500 3,983,236 5.0% Atlantic 1,186,096 1,150,263 3.1% Latin America 2,384,593 2,311,038 3.2% Pacific 612,811 521,935 17.4% Available Seat Miles ('000) System 12,740,158 13,019,838 (2.1%) D.O.T. Domestic 7,467,575 7,807,739 (4.4%) International 5,272,583 5,212,098 1.2% Atlantic 1,569,722 1,704,570 (7.9%) Latin America 2,939,341 2,838,837 3.5% Pacific 763,520 668,691 14.2% Load Factor System 78.5% 75.8% 2.7pts. D.O.T. Domestic 78.0% 75.4% 2.6pts. International 79.3% 76.4% 2.9pts. Atlantic 75.6% 67.5% 8.1pts. Latin America 81.1% 81.4% (0.3pts.) Pacific 80.3% 78.1% 2.2pts. Passengers Boarded 6,769,282 6,706,457 0.9% System Cargo Ton Miles ('000) 135,653 137,744 (1.5%) Note: All load factor numbers rounded to nearest tenth of a percent. 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: AA Flight Attendant Want New Management ---------------------------------------------------------- "Dear Sky Steward" creator Gailen David has said in a press release that a controversial series of YouTube videos mocking a flight attendant's bosses at American Airlines has morphed into an all-out grassroots movement to remove the upper-management team now running American Airlines. AMR's bankruptcy filing in November was followed by an announcement of extensive layoffs and planned pay cuts at the airline. Multi-million-dollar bonuses and lavish perks were paid to top executives while 15,000 employees expect to lose their jobs and benefits. A Web site has been created -- http://www.sAAveAA.com-- to allow American employees, the traveling public and workers everywhere to sign the petition online asking that the leadership at American be replaced during the reorganization. Once 250,000 signatures are collected, the petition will be turned over to Judge Sean Lane, who is presiding over the American Airlines bankruptcy case. Gailen David, a 24-year flight attendant with American, has been joined in this campaign by thousands of supporters gained through the popularity of his videos and blogs. Why would a flight attendant put his job at risk by speaking out so publicly against his employer? "The current management team has led American though more than a decade of profound decline in customer service, leadership, financial stability and employee morale. The time has come to take a new direction. We ask Judge Lane to put an end to the madness and bring in proven, competent leadership to help create a new American Airlines," says David, who recently released a series of videos on YouTube poking fun at the management of American Airlines. A "Message to American Airlines Flight Attendants" was the first video released on YouTube by David -- now on a leave of absence. In the video, dressed as a female airline executive with a Texas accent, Mr. David reads a letter sent to flight attendants by American's Vice President of Onboard Services, Lauri Curtis. His tongue-in-cheek, saccharin-laced rendition of the letter resonated with employees and the public alike and quickly reached viral status on the Internet. "The response from other American Airlines staff and the general public has been overwhelming and has only given me determination to shine a spotlight on the reckless mismanagement that has been occurring at American for over a decade. It is time for fresh, visionary leadership at AA that will make it an airline that people love to fly and to be a part of once again," David says. The next videos were based on the movie trailers for the motion picture "Iron Lady," which starred Meryl Streep as Margaret Thatcher, former Prime Minister of the UK. The "Aluminum Lady" and "Aluminum Lady 2" are his spoof on the "Iron Lady" trailers starring American Airlines' fictional "Minister of Flight Attendants," a character he created that embodies all of the most inhumane and avaricious qualities of today's boardroom villains. American Airlines was not amused and they quickly threatened to terminate David's employment if he did not show up for an investigatory/disciplinary meeting. Following worldwide media coverage, American's spokesperson, Bruce Hicks, issued a new statement to the media claiming that they had "no intention" of terminating David. They only wished to discuss the matter with him as he returns to work at the end of his leave of absence. The airline has not yet made a statement since the petition was launched on February 17, 2012. About Gailen David Gailen David has flown for American Airlines for 24 years and is based in Miami. In 2007, he created "Dear Sky Steward," his travel blog in which he leads a discussion about "Jetiquette -- Civilized Travel." Through his blog, social media and monthly television appearances, he reaches an audience of over 20 million viewers per month. He is passionate about customer service and hopes that he can bring honor and dignity back to air travel. 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 SCIENTIFIC: Austin Kazinetz Appointed to Board ------------------------------------------------------- The board of directors of American Scientific Resources, Inc., appointed Austin Kazinetz to serve as a member of the Board until the next annual stockholders' meeting. Mr. Kazinetz, 55, has served as the Chief Executive Officer of Mortgage Superstore, Inc., since November 2002, as the Chief Executive Officer of Bankers Title Company since June 1991, as the Chief Executive Officer of Group Service Organization since 2005 and as a real estate sales person for Harvard Realty and Investments since 1994. Mr. Kazinetz earned his Bachelor of Science degree in Accounting and Finance from the University of Florida and attended the MBA program at Harvard Business School. The Company believes that Mr. Kazinetz's business experience, his management expertise and network of contacts will help the Company develop its business strategies and thus he will be a valuable addition to the Board. There is no family relationship between Mr. Kazinetz and any of the Company's directors or officers. About American Scientific Weston, Fla.-bases American Scientific Resources, Inc., provides healthcare and medical products. The Company develops, manufactures and distributes healthcare and medical products primarily to retail drug chains, retail stores specializing in sales of products for babies and medical supply dealers. The Company does sub-component assembly and packaging for the Disintegrator product line. All of the Company's other products are manufactured by third parties. The Company was comprised of three subsidiaries: (i) Kidz-Med, Inc., (ii) HeartSmart, Inc., and (iii) Ulster Scientific, Inc., of which only Kidz-Med was active until Dec. 31, 2010. All subsidiaries are currently inactive. The Company reported a net loss applicable to common shareholders of $6.92 million on $763,020 of net product sales for the nine months ended Sept. 30, 2011, compared with a net loss applicable to common shareholders of $4.78 million on $578,961 of net product sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.26 million in total assets, $9.21 million in total liabilities, and a $7.95 million total shareholders' deficit. Rosenberg Rich Baker Berman & Company, in Somerset, New Jersey, expressed substantial doubt about American Scientific Resources' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has suffered recurring losses, its current liabilities exceed its current assets and it is in default with certain of its obligations. AMERICAN SCIENTIFIC: May Issue 302-Mil Shares if Notes Converted ---------------------------------------------------------------- American Scientific Resources, Inc., is authorized to issue 500,000,000 shares of common stock, par value $0.0001 per share. As of Sept. 30, 2011, it had 20,770,452 shares of common stock issued and outstanding. Between Oct. 1, 2011, and Feb. 15, 2012, the Company issued an aggregate of 157,040,829 shares of common stock to certain investors in connection with the conversion of $457,761 of convertible note principal. Mainly because of these conversions, the Company's issued and outstanding common stock as of Feb. 15, 2012, was 175,018,052 shares. The outstanding principal balance remaining on the convertible notes as of Feb. 15, 2012, was $558,832. If the convertible note holders would convert the remaining principal balances at Feb. 15, 2012, in their entirety at the conversion rates in effect on Feb. 15, 2012, the Company expects that it would need to issue approximately 302,000,000 additional shares of common stock. About American Scientific Weston, Fla.-bases American Scientific Resources, Inc., provides healthcare and medical products. The Company develops, manufactures and distributes healthcare and medical products primarily to retail drug chains, retail stores specializing in sales of products for babies and medical supply dealers. The Company does sub-component assembly and packaging for the Disintegrator product line. All of the Company's other products are manufactured by third parties. The Company was comprised of three subsidiaries: (i) Kidz-Med, Inc., (ii) HeartSmart, Inc., and (iii) Ulster Scientific, Inc., of which only Kidz-Med was active until Dec. 31, 2010. All subsidiaries are currently inactive. The Company reported a net loss applicable to common shareholders of $6.92 million on $763,020 of net product sales for the nine months ended Sept. 30, 2011, compared with a net loss applicable to common shareholders of $4.78 million on $578,961 of net product sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.26 million in total assets, $9.21 million in total liabilities, and a $7.95 million total shareholders' deficit. Rosenberg Rich Baker Berman & Company, in Somerset, New Jersey, expressed substantial doubt about American Scientific's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has suffered recurring losses, its current liabilities exceed its current assets and it is in default with certain of its obligations. ANTERION THERAPEUTICS: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Anterion Therapeutics, Inc. 57 Wharf St. Suite 3C Salem, MA 01970 Bankruptcy Case No.: 12-11341 Chapter 11 Petition Date: February 21, 2012 Court: United States Bankruptcy Court District of Massachusetts (Boston) Judge: Joan N. Feeney Debtor's Counsel: Jay P. Johnson, Esq. LAW OFFICE OF JAY P. JOHNSON 10 First Avenue, Suite 34 Peabody, MA 01960 Tel: (978) 531-5600 E-mail: jpj@jpjlaw.net Estimated Assets: $1,000,001 to $10,000,000 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 Richard Millian, acting president and board member. APOLLO MEDICAL: Names Health Care Exec. Ted Schreck as Chairman --------------------------------------------------------------- Apollo Medical Holdings, Inc., appointed Edward "Ted" Schreck as Chairman of its Board of Directors. In connection with his service to the Company as a director and Chairman, Mr. Schreck entered into the Company's form of Director Agreement which entitles that director to receive a combined $30,000 annual cash retainer for his board service as well as an initial option grant of 1,000,000 options. These options will vest evenly over a 3 year period. Mr. Schreck is a senior health care executive whose career spans over 37 years in both the private and public sectors. He joined Tenet Healthcare Corporation in 1998 as CEO of USC University Hospital and USC/Norris Cancer Hospital. Under his leadership, both USC University Hospital and USC/Norris achieved significant growth and clinical program development. In 2000, he was promoted to Regional Vice President of Operations, charged with leading a group of ten Los Angeles-area hospitals. Two years later, he was promoted to Senior Vice President of Operations. Mr. Schreck returned as CEO of USC University Hospital and USC/Norris Cancer Center in 2004. Prior to joining Tenet, Mr. Schreck worked for the St. Joseph Health System, serving as CEO of Santa Rosa General Hospital and Senior Vice President of Santa Rosa Memorial Hospital, and for Sutter Health System as CEO of Delta Memorial Hospital. He also served as CEO of the Eden Township District Hospitals. Mr. Schreck retired in 2006 but returned to work as a consultant for Portland-based Legacy Health System, which operates five hospitals, a research facility, a hospice agency, and specialty and primary care clinics. Most recently, he served on the board of Los Angeles Orthopaedic Hospital, a member of the UCLA Health System. Mr. Schreck earned his Bachelor's degree at UCLA and holds a Master's and Doctorate from USC, the latter from the Price School of Public Policy. "We are honored that Ted has joined our Board," stated Warren Hosseinion, M.D., Chief Executive Officer of Apollo Medical Holdings, Inc. "He has a proven track record of success. His extensive experience in hospital and executive management make him an ideal leader for ApolloMed." "I'm delighted to be a part of the ApolloMed team, and excited about their vision for integrated medical management services," stated Ted Schreck, Chairman of the Board. "ApolloMed is a pioneer in developing new strategies and innovations for achieving effective, high quality patient care. I believe ApolloMed will make significant contributions for its patients and its hospital, medical group and health plan clients." About Apollo Medical Glendale, Calif.-based Apollo Medical Holdings, Inc., provides hospitalist services in the Greater Los Angeles, California area. Hospitalist medicine is organized around the admission and care of patients in an inpatient facility such as a hospital or skilled nursing facility and is focused on providing, managing and coordinating the care of hospitalized patients. The Company reported a net loss of $156,331 in 2011 and a net loss of $196,280 during the prior year. The Company reported a net loss of $293,559 for the nine months ended Oct. 31, 2011. As reported in the Troubled Company Reporter on June 2, 2010, Kabani & Company, Inc., in Los Angeles, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for the fiscal year ended Jan. 31, 2010. The independent auditors noted that the Company has an accumulated deficit of $1.24 million as of Jan. 31, 2010, working capital of $1.07 million and cash flows used in operating activities of $338,141. ARCADIA RESOURCES: Incurs $9.7 Million Net Loss in Dec. 31 Qtr. --------------------------------------------------------------- Arcadia Resources, Inc., filed with the U.S. Securities and Exchange Commission a Form 10-Q disclosing a net loss of $9.77 million on $20.64 million of revenue for the three months ended Dec. 31, 2011, compared with a net loss of $2.31 million on $21.14 million of revenue for the same period a year ago. The Company reported a net loss of $15.76 million on $61.50 million of revenue for the nine months ended Dec. 31, 2011, compared with a net loss of $9.25 million on $62.43 million of revenue for the same period during the prior year. The Company had a net loss of $14.35 million for the fiscal year ended March 31, 2011, following a net loss of $31.09 million in the preceding year. The Company's balance sheet at Dec. 31, 2011, showed $15.93 million in total assets, $51.50 million in total liabilities, and a $35.57 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 On Sept. 13, 2011, the Company and three of Arcadia Services, Inc.'s wholly-owned subsidiaries, as borrowers, received a letter from Comerica stating that they failed to comply with certain covenants under the credit agreement because as of July 31, 2011. Comerica informed the Borrowers that Comerica has no obligation to make further advances under the credit facility and that future advances will be subject to the sole discretion of Comerica. Comerica has not sought to accelerate the repayment of the indebtedness or to foreclose on any of the security interests. While Comerica continues to make advances under the credit facility and the Company expects that advances will continue to be made, there can be no assurances that Comerica will exercise its discretion to make further advances or that Comerica will not accelerate the repayment of the indebtedness. Should Comerica not continue to provide advances under the credit facility, the Company and the Borrowers would not have access to the funds needed to operate the business. In that event, the Company would be forced to consider alternative sources of liquidity to operate the business, which may require them to commence a proceeding under the federal bankruptcy laws to cause Comerica to provide access funds under the Credit Agreement. A full-text copy of the Form 10-Q is available for free at: http://is.gd/wgDfw6 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." ARCTIC GLACIER: Pursues Recapitalization Via CCAA Filing -------------------------------------------------------- Arctic Glacier Income Fund disclosed that its Trustees have authorized the Fund, together with its subsidiaries, to initiate proceedings in the Manitoba Court of Queens Bench seeking a court supervised recapitalization under the Companies' Creditors Arrangement Act. In the CCAA application, Arctic Glacier seeks approval for a court supervised recapitalization process and for the immediate initiation of a sale and investment solicitation process. The CCAA application also seeks a stay of certain creditor claims and approval of debtor-in-possession financing that would enable Arctic Glacier to maintain normal business operations as the solicitation process is implemented. Court proceedings are to take place today in Winnipeg. "We believe that a court supervised recapitalization of Arctic Glacier's business is the best method available to secure its future," said Keith McMahon, President and CEO of Arctic Glacier. "The CCAA process would allow the time and stability required to implement the solicitation process, while continuing our normal day-to-day operations. We expect that it would result in a sale or recapitalization of the business, which will maximize value for the benefit of all of our stakeholders." The solicitation process has the support both of Arctic Glacier's secured lenders and two of its unitholders, Coliseum Capital Management, LLC and Talamod Asset Management, LLC. Both the lenders and the Concerned Unitholders believe the implementation of the solicitation process is in the best interest of all stakeholders of Arctic Glacier. "Over the last several months, the company has received proposals from a number of parties that indicated value for all company stakeholders, including unitholders," said Gary Filmon, Chairman of the special committee of the board of trustees. "We believe a court supervised solicitation process would maximize value by allowing all interested parties to fully evaluate the opportunity presented by Arctic Glacier while setting a reliable timetable for the ultimate sale or recapitalization." Arctic Glacier's secured lenders have also agreed, subject to court approval, to provide up to $50 million in a debtor-in- possession financing facility to fund Arctic Glacier's operations during the CCAA process. An application will also be made seeking recognition of the CCAA proceedings in the U.S. pursuant to Chapter 15 of the U.S. Bankruptcy Code. During the CCAA process, Arctic Glacier expects to maintain all operations at their normal capacity in both Canada and the United States. No layoffs or lease terminations are planned and all suppliers of goods and services are intended to be paid as usual, including amounts owed prior to the CCAA filing. About Arctic Glacier Arctic Glacier Income Fund, through its operating company, Arctic Glacier Inc., is a leading producer, marketer and distributor of high-quality packaged ice in North America, primarily under the brand name of Arctic Glacier(R) Premium Ice. Arctic Glacier operates 39 production plants and 48 distribution facilities across Canada and the northeast, central and western United States servicing more than 75,000 retail locations. Arctic Glacier Income Fund trust units are listed on the Toronto Stock Exchange under the trading symbol AG.UN. There are currently 39.0 million trust units outstanding. Following the issuance of units to the Debenture holders on August 2, 2011, there will be 350.3 million trust units outstanding. BERNARD L. MADOFF: $59BB Racketeering Claims Vs. UniCredit Junked ----------------------------------------------------------------- Keith Goldberg at Bankruptcy Law360 reports that U.S. District Judge Jed S. Rakoff on Tuesday tossed racketeering claims against UniCredit SpA and an affiliate in a $59 billion suit lodged by Bernard L. Madoff's bankruptcy trustee, ruling that they had been insufficiently pled. Law360 relates that Judge Rakoff said Irving H. Picard's allegations that UniCredit SpA and affiliate UniCredit Bank Austria AG helped Austrian banker Sonja Kohn funnel investors' money into Madoff's Ponzi scheme couldn't sustain claims under the Racketeer Influenced and Corrupt Organizations Act. 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. BIOLIFE SOLUTIONS: Grants CFO Option to Buy 250,000 Common Shares ----------------------------------------------------------------- The Board of Directors of Biolife Solutions, Inc., granted Daphne Taylor, the Company's Chief Financial Officer, an option to purchase 250,000 shares of the Company's common stock, exercisable at the fair market value of the common stock on the date of grant. The option vests vest 25% on the first anniversary of the date of the grant and one-thirty sixth of the remaining balance thereof in each of the ensuing 36 months following the first anniversary date of the grant. About BioLife Solutions Bothell, Washington-based BioLife Solutions, Inc. develops and markets patented hypothermic storage and cryopreservation solutions for cells, tissues, and organs, and provides contracted research and development and consulting services related to optimization of biopreservation processes and protocols. The Company has been unable to generate sufficient income from operations in order to meet its operating needs and has an accumulated deficit of approximately $53 million at June 30, 2011. This raises substantial doubt about the Company's ability to continue as a going concern. Peterson Sullivan LLP, in Seattle, Wash., expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The accounting firm noted that the Company has been unable to generate sufficient income from operations in order to meet its operating needs and has an accumulated deficit of approximately $52 million at Dec. 31, 2010. The Company reported a net loss of $1.98 million in 2010 compared with a net loss of $2.77 million during the prior year. The Company also reported a net loss of $1.54 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $1.56 million in total assets, $12.38 million in total liabilities, and a $10.82 million total stockholders' deficiency. BOOMERANG SYSTEMS: Incurs $3 Million Net Loss in Dec. 31 Quarter ---------------------------------------------------------------- Boomerang Systems, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $3 million on $201,779 of total revenues for the three months ended Dec. 31, 2011, compared with a net loss of $6.54 million on $1.16 million of total revenues for the same period a year ago. The Company reported a net loss of $19.10 million for 2011 and a net loss of $15.78 million during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $6.89 million in total assets, $13.76 million in total liabilities and a $6.87 million total stockholders' deficit. A full-text copy of the Form 10-Q is available for free at: http://is.gd/hqPfXs About Boomerang Systems Headquartered in Morristown, New Jersey, Boomerang Systems, Inc. (Pink Sheets: BMER) through its wholly owned subsidiary, Boomerang Utah, is engaged in the design, development, and marketing of automated racking and retrieval systems for automobile parking and automated racking and retrieval of containerized self-storage units. Bankruptcy Warning The Company said its operations may not generate sufficient cash to enable it to service its debt. If the Company were to fail to make any required payment under the notes and agreements governing its indebtedness or fail to comply with the covenants contained in the notes and agreements, the Company would be in default. The Company's debt holders would have the ability to require that the Company immediately pay all outstanding indebtedness. If the debt holders were to require immediate payment, the Company might not have sufficient assets to satisfy its obligations under the notes or the Company's other indebtedness. In such event, the Company could be forced to seek protection under bankruptcy laws, which could have a material adverse effect on its existing contracts and its ability to procure new contracts as well as its ability to recruit or retain employees. Accordingly, a default could have a significant adverse effect on the market value and marketability of the Company's common stock. BRYCO ARMS: Owner's Ex-Wife Liable for Fraudulent Transfer ---------------------------------------------------------- The U.S. Court of Appeals for the Eleventh Circuit affirmed a district court order ruling that Janice K. Jennings' debt from a fraudulent transfer judgment was nondischargeable in bankruptcy under 11 U.S.C. Sec. 523(a)(6). The Eleventh Circuit agreed that the transfer of property was fraudulent and constituted a "willful and malicious injury" under Sec. 523(a)(6). When Brandon James Maxfield was seven years old, he was rendered permanently quadriplegic after being shot by the accidental discharge of a handgun. The handgun was manufactured by Bryco Arms Inc. and distributed by B.L. Jennings Inc. companies controlled by Janice Jennings's former husband, Bruce Jennings. In May 2001, Maxfield sued Bruce Jennings and the two companies for personal injury in California state court. In December 2001, Maxfield filed an amended complaint to add Janice (Bruce's second ex-wife), Anna Leah Jennings (his third ex-wife), and RKB Investments as defendants in the personal-injury action, seeking to hold them liable under joint venture/enterprise, partnership, and alter-ego theories. RKB is a partnership created by Bruce and Janice, who acted as co-trustees of three California trusts that were the three partners in RKB. RKB held title to a parcel of property, called Shoreview. In February 2002, Bruce directed Janice to execute a deed on behalf of RKB transferring Shoreview to Anna Leah Jennings. When Janice completed the transfer, Bruce recorded the deed. Maxfield became aware of the transfer through Bruce's responses to interrogatories in the personal-injury action. In response, Maxfield filed a complaint in California state court against Janice, RKB, and the trusts forming RKB's partnership, alleging fraud, conspiracy, and fraudulent transfer. On May 13, 2003, a jury found Bruce, Bryco Arms and B.L. Jennings liable for Maxfield's injury, and awarded Maxfield $24,774,146 in damages. At that time, there had been no determination as to Maxfield's joint venture/enterprise, partnership, and alter-ego claims against Janice, Anna Leah, and RKB. The next day, Janice, Bruce, Bryco Arms, B.L. Jennings and RKB filed Chapter 11 bankruptcy petitions. Janice's petition was later converted to a Chapter 7 petition. Janice and RKB filed declaratory actions seeking to determine which of their assets creditors, including Maxfield, may reach. Shortly thereafter, Maxfield's state cases were transferred to the bankruptcy court and joined with the declaratory actions. Then, in June 2007, the court concluded that Janice participated in a joint venture with Bruce, Bryco Arms and B.L. Jennings and was therefore jointly and severally liable with those parties for damages awarded to Maxfield in his personal injury suit. The court also found that Janice was a conspirator with Bruce and RKB in the fraudulent transfer of Shoreview and was therefore jointly and severally liable for the damages to Bruce's creditors in the amount of $3,900,000, the value of Shoreview. The bankruptcy court concluded that Janice was liable to Bruce's creditors for the value of Shoreview because she "knew that RKB, through Bruce Jennings, intended to transfer the Shoreview Property to Anna Leah Jennings to keep it out of the hands of creditors." Janice never challenged the bankruptcy court's ruling. In December 2007, Maxfield filed an adversary complaint in bankruptcy court against Janice, seeking an exception under 11 U.S.C. Sec. 523(a)(6) to Janice's Chapter 7 debt discharge, in the amount of Shoreview's value. Under Sec. 523(a)(6), any debt "for willful and malicious injury by the debtor to another entity or to the property of another entity" is excepted from discharge in bankruptcy. 11 U.S.C. ? 523(a)(6). Janice responded by filing a motion to dismiss. The bankruptcy court granted that motion, concluding that a conspiracy claim -- such as the one against Janice -- was not the sort of intentional tort that Sec. 523(a)(6) required for discharge. On appeal, the district court reversed and remanded, finding "that in certain circumstances willful and malicious injury may be inflicted by a co-conspirator." On remand, the bankruptcy court granted Janice's motion for summary judgment, finding that the debt owed -- which the court said resulted from the personal injury suit -- did not result from willful and malicious injury by the debtor. Furthermore, the bankruptcy court found that, even though Janice aided in the Shoreview transfer with knowledge of the Maxfield suit and of Bruce's desire to keep Shoreview out of his creditors' hands, her conduct and knowledge were "insufficient as a matter of law to establish the intent to harm or cause injury to [Maxfield] as required by Sec. 523(a)(6)." And the court stated that, even if Janice acted with intent to harm Maxfield under that section, her participation in the conspiracy "was not substantially certain to cause injury to" Maxfield because the Shoreview transfer occurred over a year before Maxfield obtained a judgment in his personal injury action. Maxfield again appealed to the district court, arguing that Janice's active participation in the fraudulent transfer satisfied the "willful and malicious" standard in Sec. 523(a)(6), and that he possessed a cognizable interest in Shoreview at the time of its transfer sufficient to establish that Janice's actions were substantially certain to cause him injury. The district court agreed. The district court found that Janice's "undisputed conduct constitute[d] a willful and malicious attempt to injure Maxfield's interests, as a matter of law on this record." The court made clear that the fact that Maxfield's personal injury claim had not been reduced to a judgment before he initiated his fraudulent transfer claim did not affect the Sec. 523(a)(6) analysis because, under California law, a tort claimant is a "creditor" who may attack a fraudulent transfer. The district court reversed the bankruptcy court's ruling, concluding that, as a matter of law, Janice's adjudicated debt of $3,900,000 was nondischargeable under Sec. 523(a)(6). The district court directed the bankruptcy court to enter judgment in favor of Maxfield. The appeal to the Eleventh Circuit followed. In affirming the district court's ruling, a three-judge panel comprised of Circuit Judges Rosemary Barkett, William H. Pryor and Phyllis A. Kravitch held that the evidence in the record showed that Janice transferred Shoreview willfully and with malice. She knew that the purpose of the transfer was to keep Shoreview out of the reach of creditors. She was acutely aware of Maxfield's personal injury claim, because she, Bruce, and their trust, RKB, were named as defendants in the suit just three months before the transfer. Janice admitted these facts, despite her later testimony to the contrary. This evidence illustrates that Janice acted willfully in preventing Maxfield from reaching Shoreview to satisfy part of his personal injury judgment. And she had no just cause to effect the transfer: she knew Anna Leah had no claim to Shoreview, and she knew Bruce had no legitimate reason to transfer it to her. She effected the transfer without just cause, and therefore did so with malice. The appellate case is BRANDON JAMES MAXFIELD, Plaintiff-Appellee, v. JANICE K. JENNINGS, Defendant-Appellant, No. 11-11422 (11th Cir.). A copy of the Eleventh Circuit's Feb. 22, 2012 per curiam ruling is available at http://is.gd/4MGcJtfrom Leagle.com. BULL POINT: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Bull Point, LLC 2421 Owl Circle West Columbia, SC 29169 Bankruptcy Case No.: 12-01070 Chapter 11 Petition Date: February 21, 2012 Court: United States Bankruptcy Court District of South Carolina (Charleston) Judge: John E. Waites Debtor's Counsel: Michael W. Mogil, Esq. 2 Corpus Christie Place, Ste. 303 Hilton Head Island, SC 29928 Tel: (843) 785-8110 Fax: (843) 785-9676 E-mail: mwmogil@aol.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/scb12-01070.pdf The petition was signed by Donald W. Barrett/Stancel Kirkland, co- managing members. CARPENTER CONTRACTORS: DIP Loan, Cash Coll. Access Ends May 1 ------------------------------------------------------------- The Hon. Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida authorized Carpenter Contractors of America, Inc., and CCA Midwest, Inc., to modify the order authorizing the Debtors to obtain postpetition financing and access cash collateral. On April 6, 2011, the Court entered the DIP Order which, among other things, authorized the Debtors to use First American Bank's cash collateral, authorized the Debtors to obtain postpetition financing from the Bank. The DIP Order authorized the Debtors to borrow $2,500,000 in the form of a term note, which is subject to a floating interest rate of 30-day LIBOR plus 4.0% (with an interest rate floor of 6.0%). The Debtors' right to borrow funds or use cash collateral or any proceeds of the Postpetition Loans already received was to terminate on Nov. 1, 2011, unless the Bank consents to an extension. The Debtors needed additional funds to continue the operation of their business. The Debtors were unable to obtain the required funds in the form of unsecured credit or unsecured debt allowable under Section 503(b)(1) of the Bankruptcy Code as an administrative expense. The Court's order provides that the DIP order is amended to reflect that: -- all obligations and commitments of the prepetition lender and the postpetition lender will terminate at the earliest to occur of the: (a) May 1, 2012; (b) the effective date of any Plan of Reorganization or liquidation in the Chapter 11 cases; (c) conversion of either of the Chapter 11 cases; (d) appointment of a trustee in either of the case; or (e) dismissal of either cases; -- The Debtors will continue to repay the DIP Term Note to the bank according to a 36-month amortization schedule, commencing on Nov. 1, 2011, subject to a floating interest rate of 30-day LIBOR plus 4.0% (with a interest rate floor of 6%); and -- the DIP order and the extension order will remain in full force and effect and nothing in the order will be constructed to have modified or amended the DIP order's or the extension order's terms or conditions or the Bank's rights and interest granted thereunder. About Carpenter Contractors Pompano Beach, Florida-based Carpenter Contractors of America, Inc., dba R&D Thiel, provides carpentry services to builders of new homes primarily in Illinois and Florida. It also manufactures building components and distributes construction materials in Illinois, Florida, and North Carolina. CCA Midwest Inc. provides carpentry services to builders of new homes in Illinois. It is a wholly-owned subsidiary of Carpenter Contractors. Carpenter Contractors and CCA Midwest filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Lead Case No. 10-42604) on Oct. 25, 2010. Chad P. Pugatch, Esq., and Christian Savio, Esq., at Rice Pugatch Robinson & Schiller, P.A., in Ft. Lauderdale, Fl., serve as the Debtors' bankruptcy counsel. Attorneys at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC, serve as special counsel. GlassRatner Advisory & Capital Group, LLC, led by Thomas Santoro, is the Debtors' financial advisor, and Scott L. Spencer, CPA and Crowe Horwath, LLP. is the Debtors' accountant for audit work. Carpenter Contractors disclosed $42,900,573 in assets and $25,861,652 in liabilities as of the Chapter 11 filing. CDC CORP: Court Approves Share Sale Deal with Vista Affiliate ------------------------------------------------------------- BankruptcyData.com reports that the U.S. Bankruptcy Court approved CDC's motion for an order (A) authorizing and approving a share purchase agreement with stalking horse purchaser Archipelago Holding, a Cayman Islands exempted company, or another purchaser providing a higher or better offer for sale of CDC Software shares. Archipelago, the stalking horse bidder, is an affiliate of Vista Equity Holdings LLC. The Court also approved and scheduled an auction for the solicitation of the highest or best bid for the sale of CDC Software Shares and approved the break-up fee payable to Archipelago. The Court scheduled a March 3, 2012 bid deadline and a March 16, 2012 auction, if necessary. CDC Software Deal 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 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 said 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. CEMTREX INC: Reports $190,000 Net Income in Dec. 31 Quarter ----------------------------------------------------------- Cemtrex, Inc., filed with the U.S. Securities and Exchange Commission it's a orm 10-Q disclosing net income of $189,562 on $2.02 million of revenue for the three months ended Dec. 31, 2011, compared with net income of $144,217 on $1.82 million of revenue for the same period a year ago. Cemtrex reported net income of $1.01 million on $13.73 million of revenue for the 12 months ended Sept. 30, 2011, compared with a net loss of $1.02 million on $3.30 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $2.76 million in total assets, $2.48 million in total liabilities and $284,048 in total stockholders' equity. A full-text copy of the Form 10-Q is available for free at: http://is.gd/k1XHid About Cemtrex, Inc. Farmingdale, N.Y.-based Cemtrex, Inc., is engaged in manufacturing and selling the most advanced instruments for emission monitoring of particulate, opacity, mercury, sulfur dioxide, nitrogen oxides, etc. Cemtrex also provides turnkey services for carbon creation projects from abatement of greenhouse gases pursuant to Kyoto protocol and assists project owners in selling of carbon credits globally. The Company's products are sold to power plants, refineries, chemical plants, cement plants & other industries including federal and state governmental agencies. CHARLES RIVER: Moody's Affirms 'Ba2' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service changed the Speculative Grade Liquidity Rating of Charles River Laboratories International Inc. to SGL-3 from SGL-2. Moody's also affirmed Charles River's Ba2 Corporate Family and Probability of Default Ratings. The rating outlook remains stable. Ratings affirmed/LGD point estimates adjusted: $350 million senior secured revolving credit facility expiring 2016, Ba1 (LGD 2, 26%) from Ba1 (LGD 2, 28%) $395 million senior secured term loans (includes Euro tranche) due 2016, Ba1 (LGD 2, 26%) from Ba1 (LGD 2, 28%) Corporate Family Rating, Ba2 Probability of Default Rating, Ba2 The outlook is stable. Rating Changed: Speculative Grade Liquidity Rating, to SGL-3 from SGL-2 RATINGS RATIONALE The change in the Speculative Grade Liquidity Rating to SGL-3 (signifying adequate liquidity) from SGL-2 (good liquidity) reflects the maturity of the $350 million 2.25% Convertible Senior Notes (not rated) in June 2013. The notes become convertible into cash and shares at the holder's option in April 2013. Charles River will not have sufficient internal source of cash to repay the obligation and therefore will need to refinance the debt or seek other sources of liquidity. Moody's believes, given the overall strength of the company's credit profile, that Charles River will be able to access the capital markets in order to meet the obligation. Regardless, the approaching maturity increases refinancing risk until such time as the matter is addressed. The Ba2 Corporate Family Rating reflects Charles River's continued strength and leading competitive position in its core research models markets, as well as good geographic and customer diversity. Despite aggressive debt funded share repurchase activity over the past 18 months, the company has repaid a meaningful amount of debt with free cash flow, restoring credit metrics to levels which are generally in-line with the Ba rating category. Moody's believes the company will continue to generate strong free cash flow over the next 12-18 months. The ratings are constrained by ongoing weakness in the company's preclinical testing business, which continues to show year over year revenue declines on an organic, constant currency basis, and the company's appetite for acquisitions and debt funded share repurchases. Further, the company's absolute size is modest relative to other Ba rated companies. If Charles River experiences declines in profits due to competitive pressures or overall market contraction, such that adjusted leverage is expected to be sustained above 4.0 times, Moody's could downgrade the ratings. Deterioration in operating cash flow or a significant increase in capital expenditures such that free cash flow to debt is sustained below 15% could also result in a downgrade. Increased debt to fund acquisitions or share repurchases leading to erosion of credit metrics to these levels could also result in a downgrade. Moody's could upgrade the ratings if the company's preclinical business shows a meaningful rebound in revenue growth and profitability, and the rating agency expects leverage to be sustained below 2.5 times and free cash flow to debt to be sustained above 20%. The principal methodology used in rating Charles River was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Charles River Laboratories International, Inc., ("Charles River"; NYSE: CRL) headquartered in Wilmington, MA, is a contract research organization ("CRO") that provides research tools and services for drug discovery and development. The company's revenues are roughly 62% from the Research Models and Services ("RMS") business, which involves the commercial production and sale of research models (e.g. rodents); and 38% from the Preclinical Services ("PCS") business, which involves the development and safety testing of drug candidates. The company reported revenues of approximately $1.1 billion for the twelve months ended December 31, 2011. CHURCH STREET: To Have Sale Deal With Garrison in Few Days ---------------------------------------------------------- Church Street Health Management, LLC, a provider of management services for 67 dental practices in 22 states, filed a Chapter 11 petition (Bankr. M.D. Tenn. Case No. 12-01573) in Nashville, Tennessee on Feb. 20, 2012. The following day, four affiliates, Small Smiles Holding Company, LLC, Forba NY, LLC, EEHC, Inc., and Forba Services, LLC, filed their Chapter 11 petitions (Case Nos. 12-01574 to 12-01577). At a hearing on Feb. 21 Church Street informed the bankruptcy judge that "in the next few days" it will submit an agreement with a group led by Garrison Investment Group to open an auction for the assets. The group, which is being backed by the senior lenders, would buy the assets absent higher and better offers. Church Street filed typical first day motions on Feb. 21, including expedited requests to extend the schedules deadline to March 21, and pay the prepetition wages of employees, and obtain DIP financing. As of the Petition Date, the Debtors' assets have book value of $895 million, with debt totaling $303 million. There is about $131.5 million owing on first-lien obligations, plus $25.6 million on a second-lien obligation. There is an additional $152 million on three subordinated debts. The company's finances are structured to comply with Islamic Shariah financing regulations. Federal and state authorities began investigations in 2007 into whether services charged to the government were medically necessary. A television investigative news report that was rebroadcast on Good Morning America and picked up by other media outlets on the allegations added an "extraordinary burden" on the Company. The Company said it spent millions defending itself and its dental centers during the investigations. In January 2010, the Company agreed to pay the Department of Justice and 22 states a total $24 million over a five year period without admitting culpability. As part of the deal, the Company agreed to implement a robust compliance program and engage an independent monitor. The settlements and the adverse publicity encouraged led to 11 lawsuits on behalf of over 100 plaintiffs against the Company and certain dental centers. The suits assert a variety of tort and fraud claims. No longer able to sustain viable long-term business operations in light of that financial situation, Church Street decided to file for Chapter 11 protection. In the Chapter 11 cases, the Debtors have engaged Waller Lansden Dortch & Davis, LLP as bankruptcy counsel, and Alvarez & Marsal Healthcare Industry Group, LLC, as financial and restructuring advisor. Martin McGahan, a managing director at A&M, will serve as chief restructuring officer of Church Street. Morgan Joseph TriArtisan, LLC, is the investment banker. Garden City Group is the claims and notice agent. Sale to Garrison Church Street intends to file papers "in the next few days" to set up auction and sale procedures. If the bankruptcy court adopts the schedule, prospective buyers can conduct investigations until the week of April 2, followed by an auction the week of April 9 and a hearing to approve the sale during the same week. Church Street will seek approval to sell the assets to Garrison absent higher and better offers. The Debtor expects the closing of the sale by April 30, 2012. Garrison is providing funding for the Chapter 11 case. The Debtor intends to enter into a DIP credit agreement with lenders led by Garrison Loan Agency Services, LLC. The credit agreement will provide the Debtor with up to an aggregate principal amount of $12 million in a revolving credit facility. The Debtors have yet to present an Asset Purchase Agreement signed with Garrison but it is likely Garrison and the first-lien lenders are submitting a 'credit bid' in the 11 U.S.C. Sec. 363 process. "Although it is anticipated that a credit bid may be the winning bid in the 363 sale process, such sale will result in the assumption of a significant portion of the Debtors' existing unsecured obligations and ensure the continued provision of services to the Dental Centers and its patients," Martin McGahan, the CRO, said in a court filing. The sale terms will also likely wipe out unsecured creditors. "It is unlikely that cash sufficient to fully satisfy the Senior Lenders will be generated from a sale of the Assets, although that is the purpose of putting the Assets up for auction. Although it is unlikely that the general unsecured creditors will receive anything from the Assets on account of their claims, some of the creditors who potentially make up the unsecured creditor pool hold executory contracts, many of which will be cured, assumed and assigned as part of the sale of the Assets," Mr. McGahan said. CHURCH STREET: Updated Case Summary & Creditors' Lists ------------------------------------------------------ Lead Debtor: Church Street Health Management, LLC fdba Sanus Holdings, LLC FORBA Holdings, LLC 618 Church Street, Suite 520 Nashville, TN 37219 Bankruptcy Case No.: 12-01573 Chapter 11 Petition Date: February 20, 2012 Affiliates that filed Chapter 11 petitions on Feb. 21, 2012: Debtor Case No. ------ -------- Small Smiles Holding Company, LLC 12-01574 Forba NY, LLC 12-01575 Assets: up to $50,000 Debts: $100 million to $500 million EEHC, Inc. 12-01576 Forba Services, Inc. 12-01577 About the Debtors: Church Street provides management services to 67 low-income dental centers. The Debtor told the bankruptcy judge at the first day hearing that a group led by Garrison Investment Group has agreed to be the stalking horse bidder at a bankruptcy auction for the assets. Court: U.S. Bankruptcy Court Middle District of Tennessee (Nashville) Judge: Keith M. Lundin Debtors' Local Counsel: John Charles Tishler, Esq. WALLER LANSDEN DORTCH & DAVIS, LLP 511 Union Street, Suite 2700 Nashville, TN 37219 Tel: (615) 850-8756 Fax: (615) 244-6804 E-mail: john.tishler@wallerlaw.com Debtors' Financial and Restructuring Advisors: ALVAREZ & MARSHAL HEALTHCARE INDUSTRY GROUP, LLC Debtors' Investment Banker: MORGAN JOSEPH TRIARTISAN, LLC Debtors' Noticing and Claims Agent: THE GARDEN CITY GROUP, INC. Attn: Church Street Health Management, LLC P.O. Box 9871 Dublin, Ohio 43017-5771 Tel: (877) 906-0209 Total Assets: $895 million as of Petition Date Total Debts: $303 million as of Petition Date The petitions were signed by Tore Nelson, chief executive officer. A. Church Street's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ National Association of Settlement $10,714,233 Medicaid Fraud Control Units 2030 M. Street NW, 8th Floor Washington, DC 20036 Medicaid Fraud Control Unit of Settlement $991,496 Massachusetts Office of Attorney General One Ashburton Place Boston, MA 02108 MCBH Church Square LLC Lease Guarantee $888,195 2701 N. Charles Street, Suite 404 Baltimore, MD 21218 Michael Lindley Severance Obligation $859,955 857 Curtiswood Lane Nashville, TN 37204 Medicaid Fraud Control Unit Settlement $841,364 Of Colorado Office of the Attorney General 1525 Sherman Street, 2nd Floor Denver, CO 80203 Medicaid Fraud Control Unit Settlement $685,799 of Ohio Office of the Attorney General 150 East Gay Street, 17th Floor Columbus, OH 43215 Alfred Smith Severance Obligation $674,546 1652 Jacobs Drive Gallatin, TN 37066 Medicaid Fraud Control Unit Settlement $644,276 Of South Carolina Office of the Attorney General P.O. Box 11549 Columbia, SC 29211-1549 Henry Schein Inc. Trade Debt $568,478 Dept CH 10241 Palatine, IL 60055-0241 Shary Retail Ltd. Lease Guaranty $542,125 P.O. Box 924133 Houston, TX 77292-4133 Medicaid Fraud Control Unit Settlement $485,361 Of Oklahoma Office of the Attorney General 313 NE 21st Street Oklahoma City, OK 73105 Medicaid Fraud Control Unit Settlement $475,969 of Indiana Office of the Attorney General 8005 Castleway Drive Indianapolis, IN 46250-1946 Medicaid Fraud Control Unit Settlement $431,334 of New York Office of the Attorney General 120 Broadway, 13th Floor New York, NY 10271 Medicaid Fraud Control Unit Settlement $394,545 of Georgia Office of the Attorney General 2100 East Exchange Place Building One, Suite 200 Tucker, GA 30084 Medicaid Fraud Control Unit Settlement $376,661 of Maryland Office of the Attorney General 200 St. Paul Place, 18th Floor Baltimore, MD 21202 Medicaid Fraud Control Unit Settlement $356,388 of Kansas Office of the Attorney General 120 SW 10th Avenue, 2nd Floor Topeka, KS 66612-1597 Habi Ltd. Lease Guarantee $326,162 P.O. Box 887 Holland, OH 43528 Medicaid Fraud Control Unit Settlement $312,206 Of Virginia Office of the Attorney General 900 E. Main Street, 5th Floor Richmond, VA 23219 Shearman & Sterling LLP Trade Debt $310,700 525 Market Street San Francisco, CA 94105-2723 Medicaid Fraud Control Unit Settlement $249,058 B. Forba NY, LLC's List of Its 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Multistate Associates, Inc. Trade Debt $4,225 515 King Street, Suite 300 Alexandria, VA 22314 Mel Carr Electric Corp. Trade Debt $1,410 6 Highland Avenue Albany, NY 12205 Woodcock & Armani Trade Debt $971 6500 New Venture Gear Drive, E Syracuse, NY 13057 Cintas Corporation #411 Trade Debt $362 Aramark Uniform ? Syracuse 308 Trade Debt $256 Adirondack Cabling, Inc. Trade Debt $227 Steven P. Mellor Remodeling Inc. Trade Debt $170 Flower City Pest Elimination, Inc. Trade Debt $60 EMS Systems, Inc. Trade Debt $27 Propio Language Services, LLC Trade Debt $12 C. Small Smiles Holding Company's List of Its Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Michael Lindley Severance Obligation $859,955 857 Curtiswood Lane Nashville, TN 37204 Alfred Smith Severance Obligation $674,546 1652 Jacobs Drive Gallatin, TN 37066 Jason Owen Severance Obligation $57,649 3095 Rock Manor Way Buford, GA 30519 CICERO INC: Anthony Pizi Resigns as Board Member ------------------------------------------------ Anthony Pizi, on Feb. 16, 2012, notified Cicero Inc. of his resignation from the Company's Board of Directors, effective immediately. About Cicero Inc. Cary, N.C.-based Cicero, Inc., provides business integration software solutions and also provides technical support, training and consulting services as part of its commitment to providing customers with industry-leading solutions. The Company focuses on the customer experience management market with emphasis on desktop integration and business process automation with its Cicero XM(TM) products. Cicero XM enables the flow of data between different applications, regardless of the type and source of the application, eliminating redundant entry and costly mistakes. As reported by the TCR on April 6, 2011, Marcum LLP, in Bala Cynwyd, Pennsylvania, noted that the Company's recurring losses from operations and working capital deficiency raise substantial doubt about its ability to continue as a going concern. The Company has extended the maturity dates of several debt obligations that were due in 2011 to 2012, to assist with liquidity and may attempt to extend these maturities again if necessary. Despite the recent additions of several new clients, the Company continues to struggle to gain additional sources of liquidity on terms that are acceptable to the Company. The Company reported a net loss of $459,000 in 2010 and a net loss of $1.28 million during the prior year. The Company reported a net loss of $1.91 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $4.58 million in total assets, $13.15 million in total liabilities and a $8.57 million total stockholders' deficit. CIT GROUP: CEO John Thain Sells Shares to Pay Tax ------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that John Thain, chairman and chief executive of CIT Group Inc., sold 19,089 of the lender's shares to pay for tax obligations stemming from restricted stock units, the company said. About CIT Group Bank holding company CIT Group Inc. and affiliate CIT Group Funding Company of Delaware LLC filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 09-16565) on Nov. 1, 2009, with a prepackaged Chapter 11 plan of reorganization. Evercore Partners, Morgan Stanley and FTI Consulting served as the Company's financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel in connection with the restructuring plan. Sullivan & Cromwell served as legal advisor to CIT's Board of Directors. The Court validated the vote of CIT's impaired classes of creditors and confirmed the Plan on Dec. 8, 2009. The Plan provided for the conversion to equity or reinstatement of seven classes of debt issued primarily in the form of notes and debentures; one class of unsecured notes was exchanged for new debt. General unsecured creditors, including holders of claims arising from the rejection of executory contracts, were paid in full and deemed unimpaired. Holders of preferred and common stock, as well as subordinated claims, received no recovery. CIT emerged from bankruptcy protection on Dec. 11, 2009. * * * In May 2011, Moody's Investors Service upgraded CIT Group Inc.'s Corporate Family Rating to 'B2' from 'B3'. The rating outlook is stable. The upgrade reflects the progress CIT has made addressing its most immediate organizational, operational, and financial challenges subsequent to its bankruptcy reorganization in December 2009. Moody's, however, notes that CIT's weak margins and uncertainty regarding the pace and adequacy of future margin improvements are constraints on the firm's ratings. As reported by the Troubled Company Reporter on Aug. 7, 2011, Dominion Bond Rating Service affirmed CIT's ratings, including its Issuer Rating of B (high), unchanged following the Company's second quarter 2011 financial results. COLONIAL GOLF: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Colonial Golf and Country Club, Inc. 42 Colonial Club Drive Harahan, LA 70123 Bankruptcy Case No.: 12-10472 Chapter 11 Petition Date: February 21, 2012 Court: United States Bankruptcy Court Eastern District of Louisiana (New Orleans) Judge: Elizabeth W. Magner Debtor's Counsel: Tristan E. Manthey, Esq. HELLER, DRAPER, PATRICK & HORN, LLC 650 Poydras Street, Suite 2500 New Orleans, LA 70130 Tel: (504) 299-3300 Fax: (504) 299-3399 E-mail: tmanthey@hellerdraper.com Estimated Assets: $1,000,001 to $10,000,000 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 Anthony R. Manzella, Jr., majority shareholder. COMMSCOPE INC: Moody's Says Loan Price Reduction No Impact on CFR ----------------------------------------------------------------- Moody's Investors Service says Commscope's B2 corporate family rating and Ba3 senior secured debt ratings were not affected by the proposed reduction in pricing on the revolver and term loan facilities. The individual debt instrument ratings were assigned using Moody's Loss Given Default Methodology. The Ba3 rating on the first lien debt is driven by its senior most position in the capital structure. The principal methodology used in rating Commscope, 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. COMMSCOPE INC: S&P Affirms 'B+' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Rating Services revised its outlook on Hickory, N.C.-based CommScope Inc. to stable from negative. "At the same time, we affirmed our 'B+' corporate credit rating on the company," S&P said. "The outlook revision to stable from negative is based on our belief that leverage will be sustained at or below 5x through cost-control efforts and further modest debt repayments," explained Standard & Poor's credit analyst Alfred Bonfantini. "The ratings on CommScope reflect the company's meaningful market share and favorable long-term demand fundamentals in its selected end markets and good geographic and product diversity, as well as its strong free cash flow generation capabilities. Limited revenue visibility in a cyclical operating environment, exposure to volatile raw material pricing, a leveraged balance sheet, and an aggressive financial policy temper those positive credit characteristics," S&P said. "The stable outlook on CommScope reflects our belief that the company will realize the full benefit of restructuring initiatives over the near term, continue to make modest debt repayments, and experience more stable U.S. wireless spending. However, if debt to EBITDA exceeds 6x because the company does not achieve anticipated cost savings, global (particularly U.S.) wireless infrastructure spending remains soft, or volatile raw material costs cause gross margins to contract 2% or more, we could lower the corporate credit rating to 'B'," S&P said. "An upgrade is unlikely over the near term given the company's current ownership structure, which we believe precludes sustained de-leveraging," S&P said. COYOTES HOCKEY: NHL to Finalize Sale on Franchise ------------------------------------------------- Sports Direct, citing Mike Sunnucks of the Phoenix Business Journal, relates that the National Hockey League said it is close to finalizing a sale of the Phoenix Coyotes franchise to a group led by former San Jose Sharks CEO Greg Jamison. According to the report, the NHL is trying to keep the sale price at $170 million, but is willing to include rebates and a fund to help cover the team's financial losses to keep the team playing in the Phoenix market. The report says the deal has to go through final approvals by the city of Glendale, Arizona, which owns Jobing.com Arena where the Coyotes currently play. About Coyotes Hockey Dewey Ranch Hockey LLC, Arena Management Group, LLC, Coyotes Holdings, LLC, and Coyotes Hockey, LLC -- owners and affiliates of the Phoenix Coyotes National Hockey League team -- filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 09-09488) on May 5, 2009. The Debtors were represented by Squire, Sanders & Dempsey, LLP, in Phoenix, and estimated their assets and debts to be between $100 million and $500 million. In the third quarter of 2009, Judge Redfield T. Baum approved the sale of the Phoenix Coyotes to the National Hockey League, which acquired the team to quash a plan by Research-In-Motion founder Jim Balsillie to move the team to Ontario, Canada. Coyotes was sent to Chapter 11 to effectuate a sale by owner Jerry Moyes to Mr. Balsillie. The NHL acquired the team for $140 million in October 2009 and said it wants to sell the team for $170 million. The city of Glendale, Arizona, owns Jobing.com Arena, where the team plays. In September 2010, the Bankruptcy Court rejected a motion to impose a trustee or convert the case to a Chapter 7 liquidation. CROATAN SURF: Hearing on Plan Outline Continued Until April 4 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of North Carolina has continued until April 4, 2012, at 10:00 a.m., the hearing to consider adequacy of the Disclosure Statement explaining Croatan Surf Club, LLC's Second Amended Chapter 11 Plan. On Oct. 28, 2011, Croatan filed a supplement to the Disclosure Statement filed Feb. 18, 2011. A copy of the supplement is available for free at http://bankrupt.com/misc/croatansurf.dkt289.pdf As reported in the Troubled Company Reporter on April 1, 2011, according to the Second Amended Disclosure Statement, dated Feb. 18, 2011, the Debtor's Plan establishes 10 classes for claims. Classes 1, 2, 3 and 4 consist of the claims of the Internal Revenue Service, the North Carolina Department of Revenue, Employment Security Commission and Dare County. The Debtor does not believe that any of these parties hold prepetition unsecured priority Claims. To the extent that these Claims exist, they will be paid on the Extended Maturity Date as described in the Plan. Classes 5, 6 and 7 consist of the Allowed Secured Claims of creditors, including the Lender and Mezzanine Lender, which are secured by various assets of the Debtor. Croatan Surf Club Condominium Association, Inc., would also have an Allowed Secured Claim for any unpaid dues, assessments, or other charges. Each of the Allowed Secured Claims will be paid as provided by the Plan. Class 9 consists of the Claims of unsecured creditors holding Claims against the Debtor, except for those Claims of insiders. These creditors will be paid in full as set forth in the Plan. The Debtor may object to certain unsecured Claims for reasons including, but not limited to, their improper classification, an improper amount claimed, or the fact that the Claim is not owed by the Debtor. Class 10 consists of the Claims of insiders. This class does not include the membership interests of the insiders. These claims will be paid in full, after the payment of all other Claims. A copy of the Second Amended Disclosure Statement is available for free at http://bankrupt.com/misc/CroatanSurf_AmendedDS.pdf About Croatan Surf Kill Devil Hills, North Carolina-based Croatan Surf Club, LLC, is the owner of 35 residential condominium units at a development in Dare County, North Carolina known as Croatan Surf. It filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.C. Case No. 11- 00194) on Jan. 10, 2011. Walter L. Hinson, Esq., at Hinson & Rhyne, P.A., in Wilson, N.C., serve as counsel to the Debtor. Kevin J. Silverang, Esq., and Philip S. Rosenzweig, Esq., at Silverang & Donohoe, LLC, in St. Davids, Pa., serve as co-counsel to the Debtor. No creditors committee has been formed in the case. In its schedules, the Debtor disclosed $26,151,718 in assets and $19,350,000 in liabilities. CRYOPORT INC: Incurs $2.1 Million Net Loss in Dec. 31 Quarter ------------------------------------------------------------- Cryoport, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q reporting a net loss of $2.08 million on $144,254 of net revenues for the three months ended Dec. 31, 2011, compared with a net loss of $1.45 million on $99,569 of net revenues for the same period a year ago. The Company reported a net loss of $6.16 million on $378,718 of net revenues for the nine months ended Dec. 31, 2011, compared with a net loss of $4.29 million on $375,438 of net revenues for the same period during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $4.22 million in total assets, $3.60 million in total liabilities and $620,873 in total stockholders' equity. A full-text copy of the Form 10-Q is available for free at: http://is.gd/A31vJ5 About CryoPort Inc. Headquartered in Lake Forest, Calif., CryoPort, Inc. (OTC BB: CYRXD) -- http://www.cryoport.com/-- provides innovative cold chain frozen shipping system dedicated to providing superior, affordable cryogenic shipping solutions that ensure the safety, status and temperature of high value, temperature sensitive materials. The Company has developed a line of cost-effective reusable cryogenic transport containers capable of transporting biological, environmental and other temperature sensitive materials at temperatures below 0-degree Celsius. KMJ Corbin & Company LLP expressed substantial doubt about CryoPort's ability to continue as a going concern, following the Company's fiscal 2009 results. The firm noted that the Company has incurred recurring losses and negative cash flows from operations since inception. CRYSTAL HOMES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Crystal Homes of Wyndham Point, Inc. 6479 Wyndham Drive West Bloomfield, MI 48322 Bankruptcy Case No.: 12-43942 Chapter 11 Petition Date: February 21, 2012 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Steven W. Rhodes Debtor's Counsel: Michael E. Baum, Esq. SCHAFER AND WEINER, PLLC 40950 Woodward Ave., Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 E-mail: mbaum@schaferandweiner.com Estimated Assets: $0 to $50,000 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/mieb12-43942.pdf The petition was signed by Avie Benaderet, president. CYCLONE POWER: Completes Acquisition of Advent Power Systems ------------------------------------------------------------ Cyclone Power Technologies Inc. has closed the acquisition of Advent Power Systems. Cyclone will assume Advent's position as prime contractor with the U.S. Army/Tank Command, subject to formal novation, in a project utilizing Cyclone's engine technology to develop an auxiliary power unit for multiple lines of combat vehicles, including the M1 Abrams tank, the IAV Stryker and the Bradley Fighting Vehicle. The value of the Army contract being transferred to Cyclone is $1.4 million. Should this Phase I project advance to Phase II next year, it could be worth several million dollars in additional revenue to Cyclone and provide further development support towards the ultimate commercialization of these compact, efficient and multi-fuel power generators. Christopher Nelson, President of Cyclone, commented, "The closing of the Advent acquisition marks an important milestone for our company and shareholders. With the TACOM contract, we expect to achieve solid revenue over the next year and, hopefully, gain a long term customer. We believe that while military budgets are being trimmed, eco-friendly technologies that make our military forces more efficient and save the government money -- like the Cyclone engine -- will continue to receive funding and support. Cyclone will aggressively pursue these rewarding opportunities." Dr. Myers commented, "We are pleased to have this acquisition closed. Advent's existing government relationships coupled with Cyclone's engine technology provides us many advantages now and going forward. This is an exciting time for both companies. I have great faith in Cyclone's ability to complete the U.S. Army contract, and ultimately, to commercialize its engine technology for both military and civilian customers." The purchase price for the acquisition was 1.5 million shares of Cyclone common stock. This consideration is being held in escrow pending the official novation of the Army contract, and is further restricted for resale by a contractual two-year leak-out provision. Advent's CEO has received a 12 month consulting agreement, providing for a monthly retainer and a warrant to purchase 500,000 shares of the Company common stock for 5-years at a premium to the Company's stock price as of the date of closing. These warrants and the retainer are also subject to forfeiture if there are any negative changes in the value of the acquired assets within 12 months. The cash retainer does not commence until the U.S. Army contract novation process has been completed. About Cyclone Power Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink Sheets: CYPW) is a clean-tech engineering company, whose business is to develop, commercialize and license its patented Rankine cycle engine technology for applications ranging from renewable power generation to transportation. The Company is the successor entity to the business of Cyclone Technologies LLLP, a limited liability limited partnership formed in Florida in June 2004. Cyclone Technologies LLLP was the original developer and intellectual property holder of the Cyclone engine technology. The Company reported a net loss of $23.2 million on $250,000 of revenues for the nine months ended Sept. 30, 2011, compared with net income of $447,016 on $202,375 of revenues for the same period last year. The Company's balance sheet at Sept. 30, 2011, showed $1.2 million in total assets, $3.8 million in total liabilities, and a stockholders' deficit of $2.6 million. The Company incurred substantial operating losses for the nine months ended Sept. 30, 2011, of $2.7 million. The cumulative deficit since inception is approximately $45.2 million, which is comprised of $13.8 million attributable to operating losses, and $31.4 million in non-cash derivative liability accounting. The Company has a working capital deficit at Sept. 30, 2011, of approximately $2.3 million. "There is no guarantee whether the Company will be able to generate enough revenue and/or raise capital to support its operations," the Company said in the filing. "This raises substantial doubt about the Company's ability to continue as a going concern." CYTOCORE INC: Clint Severson Resigns from Board of Directors ------------------------------------------------------------ Clint H. Severson resigned his position as a director of Cytocore, Inc., on Feb. 14, 2012. Mr. Severson also served as a member of the Company's audit committee. Mr. Severson's resignation was not a result of any disagreement with the Company over policies, practices, or procedures. About Cytocore Inc. Headquartered in Chicago, Illinois, CytoCore Inc. (OTC BB: CYOE) -- http://www.cytocoreinc.com/-- is a biomolecular diagnostics company engaged in the design, development, and commercialization of cost-effective screening systems to assist in the early detection of cancer. CytoCore(R) is currently focused on the design, development, and marketing of its CytoCore Solutions(TM) System and related image analysis platform. The CytoCore Solutions(TM) System and associated products are intended to detect cancer and cancer-related diseases, and may be used in a laboratory, clinic, or doctor's office. The Company reported a net loss of $2.09 million in 2010 and a net loss of $3.55 million in 2009. The Company also reported a net loss of $1.55 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $1.67 million in total assets, $6.58 million in total liabilities, all current, and a $4.90 million total stockholders' deficit. As reported by the TCR on April 18, 2011, L J Soldinger Associates LLC, in Deer Park, Illinois, said in its audit report on the financial statements for the year ended Dec. 31, 2010, that the Company's recurring losses from operations and resulting dependence upon access to additional external financing, raise substantial doubt concerning its ability to continue as a going concern. DELTA PETROLEUM: Amends Schedules of Assets and Liabilities ----------------------------------------------------------- Delta Petroleum Corporation filed with the U.S. Bankruptcy Court for the District of Delaware amended schedules of assets and liabilities, disclosing $0 assets and $272,393,439 in creditors holding unsecured non-priority claims resulting to $272,393,439 liabilities. A full-text copy of the Amended Schedules is available for free at http://bankrupt.com/misc/DELTA_PETROLEUM_sal_amended.pdf In its first schedule, the Debtor disclosed: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $356,774,329 B. Personal Property $17,062,029 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $38,535,348 E. Creditors Holding Unsecured Priority Claims $1,740,387 F. Creditors Holding Unsecured Non-priority Claims $272,589,053 ----------- ------------ TOTAL $373,836,358 $312,864,788 A full-text copy of the original schedules is available for free at http://bankrupt.com/misc/DELTA_PETROLEUM_sal_firstsal.pdf About Delta Petroleum Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil and gas company engaged primarily in the exploration for, and the acquisition, development, production, and sale of, natural gas and crude oil. Natural gas comprises over 90% of Delta's production services. The core area of its operations is the Rocky Mountain Region of the United States, where the majority of the proved reserves, production and long-term growth prospects are located. Delta and seven of its subsidiaries sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013, inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31, 2012 scheduled maturity of its $38.5 million secured credit facility with Macquarie Bank Limited and after several months of unsuccessful attempts to sell the business. Delta disclosed $375,498,248 in assets and $310,679,157 in liabilities, which also include $152,187,500 in outstanding obligations on account of the 7% senior unsecured notes issued in March 2005 with US Bank National Association indenture trustee; and $115,527,083 in outstanding obligations on account of 3-3/4% Senior Convertible Notes due 2037 issued in April 2007. W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A. Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard & Reed LLP, in New York, N.Y., represent the Debtors as counsel. Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights, Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del., represent the Debtors as co-counsel. Conway Mackenzie is the Debtors's restructuring advisor. Evercore Group L.L.C. is the financial advisor and investment banker. The Debtors selected Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The petition was signed by Carl E. Lakey, chief executive officer and president. Delta will hold an auction for the business on March 26, 2012. No buyer is under contract. There is $57.5 million in financing for the Chapter 11 effort. The U.S. Trustee told the bankruptcy judge that there was insufficient interest from creditors to form an official committee of unsecured creditors. DELTA PETROLEUM: Moves to Protect $1.1 Billion in Tax Benefits -------------------------------------------------------------- Dow Jones' DBR Small Cap reports that Delta Petroleum Corp. has moved to protect some of the more-than $1.1 billion worth of tax benefits that the Colorado company risks losing at the end of its bankruptcy case. About Delta Petroleum Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil and gas company engaged primarily in the exploration for, and the acquisition, development, production, and sale of, natural gas and crude oil. Natural gas comprises over 90% of Delta's production services. The core area of its operations is the Rocky Mountain Region of the United States, where the majority of the proved reserves, production and long-term growth prospects are located. Delta and seven of its subsidiaries sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013, inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31, 2012 scheduled maturity of its $38.5 million secured credit facility with Macquarie Bank Limited and after several months of unsuccessful attempts to sell the business. Delta disclosed $375,498,248 in assets and $310,679,157 in liabilities, which also include $152,187,500 in outstanding obligations on account of the 7% senior unsecured notes issued in March 2005 with US Bank National Association indenture trustee; and $115,527,083 in outstanding obligations on account of 3-3/4% Senior Convertible Notes due 2037 issued in April 2007. W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A. Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard & Reed LLP, in New York, N.Y., represent the Debtors as counsel. Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights, Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del., represent the Debtors as co-counsel. Conway Mackenzie is the Debtors's restructuring advisor. Evercore Group L.L.C. is the financial advisor and investment banker. The Debtors selected Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The petition was signed by Carl E. Lakey, chief executive officer and president. Delta will hold an auction for the business on March 26, 2012. No buyer is under contract. There is $57.5 million in financing for the Chapter 11 effort. The U.S. Trustee told the bankruptcy judge that there was insufficient interest from creditors to form an official committee of unsecured creditors. DYNEGY INC: Disclosure Statement Hearing Pushed Back to March 9 --------------------------------------------------------------- Judge Cecelia G. Morris of the U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on March 9, 2012, at 10:00 a.m. (Eastern Time) to consider the adequacy of the disclosure statement describing the Chapter 11 Plan of Reorganization for Dynegy Holdings, LLC. The hearing was previously scheduled for February 24, 2012. The Disclosure Statement Hearing will be held at the courthouse located at One Bowling Green, New York, NY 10004-1408 in a courtroom to be determined at a later date. Meanwhile, the Official Committee of Unsecured Creditors asks the U.S. Bankruptcy Court for the Southern District of New York not to approve the Disclosure Statement describing the Chapter 11 Plan of Reorganization proposed by Dynegy, Inc. and Dynegy Holdings LLC and its Debtor affiliates. Counsel to the Committee, Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, contends that the Debtors are "seeking the Court's approval of an inadequate Disclosure Statement, for an unconfirmable Plan, at a hearing scheduled to take place 17 days before the Court-appointed Examiner is due to release his report on the Prepetition Transactions that are the impetus for the filing of these Chapter 11 cases and the object of the settlement under the terms of the Plan." Mr. Dizengoff points out that the timing of the Disclosure Statement hearing is another example of the Debtors' determination to rush the cases toward a conclusion before the Court and parties-in-interest have the time and ability to adequately investigate and thereafter analyze the very actions the cases were initiated to resolve. "This latest attempt by the Debtors to do so should not be condoned and must be stopped before significant estate resources are needlessly wasted," he says. The Disclosure Statement hearing should not go forward until the Examiner Report has been submitted and the Court and all parties have an opportunity to review and analyze it, Mr. Dizengoff asserts. He notes that the Examiner Report is due to be submitted on March 12, 2012. Amended Plan As reported in the TCR on Jan. 27, 2012, Dynegy Holdings LLC and its Debtor affiliates filed an amended Chapter 11 Plan of Reorganization and an accompanying Disclosure Statement for Dynegy Holdings LLC to the U.S. Bankruptcy Court for the Southern District of New York on January 19, 2012. The Amended Plan, among other things, provide for an increase in the amount of consideration to be provided under the Plan. The Amended Plan addresses claims against and interests in Dynegy Holdings only and does not address claims against and interests in the other Debtors. The Amended Plan will implement a modified agreement worked out with holders of $1.8 billion of the $3.5 billion in unsecured senior notes and the $215 billion in subordinated notes. Under the Plan, noteholders and other unsecured creditors would share $400 million in cash, $1.015 billion in seven-year 11% secured notes, and $2.1 billion in convertible pay-in-kind notes mandatorily convertible at maturity in December 2015 into 97% of the equity. Claims on the notes and other general unsecured claims together will total from $3.67 billion to $3.89 billion. 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: Defends Same Grouping of Senior and Subordinated Debt ----------------------------------------------------------------- Dynegy, Inc., and Dynegy Holdings LLC and its Debtor affiliates ask the Bankruptcy Court not to grant Claren Road Asset Management LLC and CQS DO S1 Limited's request to determine the classification of the Subordinated Notes Claims. J. Christopher Shore, Esq., at White & Case LLP, in New York, contends that despite CQS and Claren Road's clever attempts to distract the Court with allegations of improper motives and violations of the absolutely priority rule, the issue raised is a narrow one: whether senior and subordinated debt may be classified together in the same class. "On that issue the law is clear: single classification of senior and subordinated debt is permissible under Section 1122 of the Bankruptcy Code," Mr. Shore argues. Mr. Shore asserts that the Subordinated Notes Claims are "substantially similar" to other claims classified as Class 3 - General Unsecured Claims under the Plan, as required by Section 1122 of the Bankruptcy Code, and may be classified together. He contends that focusing only on Senior Notes Claims, which are also classified as Class 3 Claims under the Plan, CQS and Claren Road argue that the subordination provisions in the Subordinated Notes Indenture renders them substantially dissimilar from the Senior Notes Claims and requires separate classification. Whether the Subordinated Notes Claims are "substantially similar" to other Class 3 Claims, including the Senior Notes Claims, is not determined by looking at their contractual rights but by looking at their rights on Dynegy Holdings, Mr. Shore contends. He notes that all the rights of holders of Class 3 Claims on Dynegy Holdings are substantially similar if not identical. "The fact that holders of Subordinated Notes Claims have contractually agreed to be subordinated to the holders of Senior Notes Claims does not change this result," Mr. Shore argues. In addition, Mr. Shore says the Movants' assertions that they are being "disenfranchised" under the Plan, and should thus be classified separately from other Class 3 Claims, boils down to the simple fact that they are relatively small holders of Class 3 Claims compared to the aggregate amount of all Class 3 Claims, and they are dissatisfied with their level of negotiating power in the Chapter 11 Cases. "The size of a claim relative to other substantially similar claims, however, is not a valid basis for classifying such claims separately," he notes. Furthermore, Mr. Shore contends that CQS and Claren Road's purported objection to the claims classification scheme under the Plan is premature and should be addressed at the hearing on confirmation of the Plan. The Court has adjourned the hearing CQS and Claren Road's requests to March 9, 2012 at 10:00 a.m. The hearing was originally scheduled for February 24, 2012. 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: Examiner Proposes to Tap DWP&V as Tax Counsel --------------------------------------------------------- Susheel Kirpalani, Esq., the Court-appointed Chapter 11 examiner for Dynegy Holdings LLC and its affiliates, asks the Bankruptcy Court for authority to retain Davies Ward Phillips & Vineberg LLP as special tax counsel nunc pro tunc to February 11, 2012. As special tax counsel, Davies Ward will help the Examiner analyze the tax effects of past transactions by the Debtors, evaluate transactional and other documentation, conduct interviews, participate in the Bankruptcy Court proceedings, and render other legal services relating to the tax matters as Davies Ward may ask in connection with the case. The Examiner proposes to retain Davies Ward on its usual terms and conditions, with one exception. If retention of Davies Ward is approved by the Court, and without prejudice to Davies Ward's existing or future engagements, Davies Ward will provide a discount of 10% on the rates of professionals and paraprofessionals who incur time on the engagement. The Chapter 11 Examiner expects to retain these Davies Ward professionals and pay them according to their hourly rate: Peter A. Glicklich, Esq. $895 Abraham Leitner, Esq. $730 Megan J. Grandinetti, Esq. $405 Davies Ward will also be reimbursed for all actual out-of-pocket expenses it incurs, like photocopying services, printing, delivery charges, filing fees, postage, travel expenses, computer research time, and other disbursements. Peter A. Glicklich, Esq., a partner at Davies Ward, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. 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) DZF PROPERTIES: Can Hire Grubb & Ellis as Real Estate Broker ------------------------------------------------------------ Judge Arthur S. Weissbrodt has authorized DZF Properties, LLC, to employ Grubb & Ellis Commercial Real Estate Services, a real estate brokerage firm, to represent the Debtor in the sale of a real estate property. Charles B. Greene, Esq., representing the Debtor, relates that among the assets of the Debtor's estate is a parcel of real property located at 2600 Augustine Drive, 3380 Montgomery Drive, and 3265 Scott Boulevard in Santa Clara, California. The Debtor believes that it is in best interests of its estate to employ a real estate broker to assist in the marketing and sale of the real property. The general terms of the agreement between the Debtor and the proposed real estate broker with regard to the real property are: A. The sales price of the real property will be $11,000,000. B. The compensation sought by the proposed real estate broker is equal to 3% of the gross sales price. The professional who will be primarily be responsible for the engagement is: Nigel P. Keep Grubb & Ellis Commercial Real Estate Services 1732 N. 1st St., Suite 100 San Jose, California 95112 Tel: (408) 453-2388 About DZF Properties DZF Properties, LLC, based in Los Gatos, California, filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 11-60649) on Nov. 17, 2011. Judge Arthur S. Weissbrodt presides over the case. It scheduled $12,750,000 in assets and $8,661,625 in debts. The petition was signed by David Feece, Sr., the Debtor's managing member. Mr. Feece has been appointed by the Court as responsible individual for the Debtor. EAST HARLEM: Plan Exclusivity Extended to April 13 -------------------------------------------------- The Hon. James M. Peck has approved a stipulation between East Harlem Property Holdings, LP, and secured creditor C-III Acquisitions LLC extending the exclusive period within which to solicit acceptances of the plan of reorganization to Apr. 13, 2012. In addition, the confirmation hearing on the plan should occur on or before May 15, 2012, according to the order. As reported in the Troubled Company Reporter on Feb. 17, 2012, East Harlem Property Holdings, LP, submitted to the U.S. Bankruptcy Court for the Southern District of New York a plan of reorganization and disclosure statement dated Feb. 10, 2012. The Plan contemplates the sale, assignment, and transfer of the Debtor's right title and interest in its "membership interests" in 27 special purpose entities to SG2-E&M Harlem Portfolio Owner LLC in exchange for $4 million. The special purpose entities own in the aggregate 1,200 residential units and 50 commercial units located within 46 buildings a New York area known as East Harlem. Distributions to allowed claims and interests under the Plan will be funded from the sale of the Membership Interests. With respect to its Class 1 Secured Claim estimated for $27,561,855, C-III Acquisitions LLC has agreed to release any liens and claims in and to the Membership Interests and exchange general releases with the Debtor. Class 2 Priority Claims and Class 3 Unsecured Claims, estimated at $229,447, will be paid in full on or within 15 days of the Effective Date. Class 4 Partner Interests will be paid any funds remaining in the Confirmation Account after the payment of Allowed Claims. Allowed Administrative Claims, estimated at $150,000, and Allowed Priority Tax Claims, estimated at $16,696, will also be paid in full. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/EASTHARLEM_DSFeb10.PDF About East Harlem East Harlem Property Holdings, LP, is a limited partnership formed in Delaware on March 13, 2007. The Debtor owns 100% of the limited liability company membership interests in 27 special purpose entities, which own, in the aggregate, approximately 1,200 residential units and 50 commercial units located within 47 buildings located in New York, New York. The Real Properties are primarily located in an area bounded by 100th Street to the south, 188th Street to the north, Pleasant Avenue to the east and Park Avenue to the west. The Debtor filed for Chapter 11 relief (Bankr. S.D.N.Y. Case No. 11-14368) on Sept. 15, 2011. Judge James M. Peck presides over the bankruptcy case. Joseph S. Maniscalco, Esq., and Jordan Pilevsky, Esq., at Lamonica Herbst & Maniscalco, LLP, in Wantagh, New York, represents the Debtor as counsel. In its schedules, the Debtor disclosed assets of $230,000,000 and liabilities of $27,807,999. The petition was signed by Linda Greenfield, vice president of Harlem Housing, LLC, sole and managing member of East Harlem GP, LLC, general partner. EASTMAN KODAK: Application to Tap Lazard as Investment Banker ------------------------------------------------------------- Eastman Kodak Co. and its affiliates filed an application to employ Lazard Freres & Co. LLC as their investment banker nunc pro tunc to the Petition Date. Lazard will provide investment banking services as the firm and the Debtors deem appropriate and feasible in order to advise the Debtors and their affiliates in the course of the Chapter 11 cases, including, but not limited to: (a) reviewing and analyzing the Company's business and financial condition, as well as its business plan and financial projections; (b) assisting the Company in evaluating potential strategic and capital structure alternatives, including one or more Transactions; (c) assisting the Company in evaluating the potential use of any Transaction proceeds; (d) attending meetings of the Board of Directors of Kodak with respect to matters on which Lazard has been engaged to advise under the Engagement Letter dated September 12, 2011; (e) assisting the Company in any potential IP Sale Transaction, including identifying and interacting with potential Buyers, marketing the Portfolio to potential Buyers, advising the Company in connection with any subsequent negotiations and aiding in the consummation of any IP Sale Transaction; (f) assisting the Company in evaluating and consummating any potential Sale Transactions; (g) advising and assisting the Company in evaluating any potential Financing transaction by the Company, and, subject to Lazard's agreement so to act and, if requested by Lazard, to execution of customary agreements, on behalf of the Company, contacting potential sources of capital as the Company may designate and assisting the Company in implementing that Financing; and (h) rendering financial advice to the Company in connection with any Restructuring, including: (i) assisting in the determination of a range of values for the Company on a going concern basis; (ii) evaluating the Company's potential debt capacity in light of its projected cash flows and assisting in the determination of a capital structure for the Company; (iii) advising the Company on the timing, nature, and terms of new securities, other consideration or other inducements to be offered pursuant to any Restructuring; (iv) advising the Company on tactics and strategies for negotiating with the Stakeholders; (v) participating in meetings and negotiations with the Stakeholders, rating agencies and other appropriate parties; (vi) assisting the Company in preparing documentation within Lazard's area of expertise that is required in connection with any Restructuring; and (vii) providing testimony, as necessary, with respect to matters on which Lazard has been engaged to advise under the Engagement Letter in any proceeding before the Court. In the original proposal, the Debtors said Lazard will be paid these fees for its services: -- A $250,000 monthly fee payable until the completion of a Restructuring or the termination of Lazard's engagement. All Monthly Fees paid following the 12th month of Lazard's engagement will be credited against any fees paid to Lazard if the Company consummates a sale of its intellectual property portfolio or a sale transaction incorporating all or a majority of the Debtors' assets or all or a majority or controlling interest in the equity securities of Eastman Kodak Company; provided, that that credit will only apply to the extent that those fees are approved in their entirety by the Court. -- Separate fees if the Company consummates an IP Sale Transaction or a Sale Transaction, or if the Company consummates any Sale Transaction not covered by the sale of all or substantially all of the Debtors' assets. One half of any Minority Sale Transaction Fee paid will be credited against any Restructuring Fee or Sale Transaction Fee subsequently payable. -- A fee equal to 20% of any break-up, termination, topping or similar fee or payment paid to the Debtors related to an IP Sale Transaction, a Sale Transaction Lazard or a Minority Sale Transaction. -- A fee if the Company consummates any Financing. One-half of any Financing Fees paid will be credited against any Restructuring Fee or Sale Transaction Fee subsequently payable. -- A $12.5 million fee if the Company consummates a Restructuring, which fee is payable to Lazard upon consummation of the Restructuring. Lazard will be periodically reimbursed for all of its reasonable expenses provided that those expenses will not exceed $100,000 in the aggregate without the Company's consent. The Debtors and Lazard have agreed that the terms of an indemnification letter, dated October 24, 2006, between the firm and Eastman Kodak Company will remain in full force and effect and apply to Lazard's engagement under the Sept. 12, 2011 Engagement Letter. David Descoteaux, a managing director of Lazard, assures the Court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b), and holds no interest adverse to the Debtors or their estates. Lazard has informed the Debtors that it is owed approximately $170,000 associated with services performed and expenses incurred prior to the Petition Date. Lazard has waived any and all entitlement to make a prepetition claim against the Debtors with respect to any those fees and expense reimbursement. Accordingly, Mr. Descoteaux says, Lazard will not be a "creditor" of the Debtors within the meaning of Section 101(10). Mr. Descoteaux also discloses that, prior to the Petition Date, Lazard was paid $1,263,333 of Monthly Fees for prepetition services, and received $66,244 for the reimbursement of expenses, in accordance with the Engagement Letter and the Prior Engagement Letter. EASTMAN KODAK: Agrees to Proceed With Trial on RIM Patent Suit -------------------------------------------------------------- Eastman Kodak Co. and Research In Motion Ltd. agreed to proceed with a trial in a lawsuit in U.S. District Court in Texas to decide whether RIM's products infringe Kodak patents, Bloomberg News reported. Eastman Kodak's filing for bankruptcy protection on January 19 automatically halted the patent-infringement trial that had been scheduled to begin next month. If the U.S. Bankruptcy Court in Manhattan agrees at a March 8 hearing, Ontario-based RIM will be able to proceed with a suit it filed in November 2008, seeking a declaration that its products do not infringe Kodak patents. Eastman Kodak filed counterclaims later, seeking hundreds of million in damages for patent infringement, according to the report. The committee representing Eastman Kodak's unsecured creditors also believes the lawsuit should go forward. If the company succeeds, the suit will bring funds into the bankrupt estate or increase the price it will receive for selling technology, Bloomberg News reported. 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: Sec. 341 Meeting of Creditors Set for March 12 ------------------------------------------------------------- Tracy Hope Davis, the U.S. Trustee for Region 2, will convene a meeting of creditors of Eastman Kodak Co. and its affiliated debtors on March 12, 2012, at 1:00 p.m., at 80 Broad Street, 4th Floor, in New York. This is the first meeting of creditors under Section 341(a) of the Bankruptcy Code. The meeting offers creditors a one-time opportunity to examine Eastman Kodak's representative under oath about its financial affairs and operations that would be of interest to the general body of creditors. Attendance by creditors at the meeting is welcome, but not required. The meeting may be continued and concluded at a later date specified in a notice filed with the U.S. Bankruptcy Court for the Southern District of New York. 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: Gets Final Approval to Borrow $950 Million --------------------------------------------------------- Eastman Kodak Co. obtained final approval from Judge Allan Gropper of the U.S. Bankruptcy Court in Manhattan to continue borrowing on its $950 million debtor-in-possession loan from Citigroup Inc. The company previously received interim approval to borrow $650 million. The bankruptcy loan allows Eastman Kodak to operate normally during bankruptcy while it tries to sell its digital- imaging patents. The financing consists of (a) up to $700 million under a senior secured non-amortizing term loan facility, with $450 million available at the effective date and an additional $250 million that will be available after entry of the final order, and (b) up to $250 million under a senior secured non-amortized asset-based revolving credit facility; provided that $25 million will be available to fund only non-Debtor affiliate Kodak Canada. The revolving credit facility will include a sub-facility for letters of credit in the aggregate amount of $200 million. Citicorp North America serves as both syndication and administrative agent for the lenders, and interest will be paid at: (i) the applicable margin plus the base rate or (ii) the applicable margin plus the current LIBO rate, provided that the LIBO rate will be not less than 1.50%. Earlier, International Business Machines Corp. and FujiFilm Corp. called for the approval of an additional provision proposed by Samsung Electronics Co. Ltd. protecting their defenses to claims by Eastman Kodak as well as their rights as licensees of intellectual property. To resolve the objections, the final DIP order gives all licensees of Eastman Kodak's intellectual property the right to assert that any lien or interest conferred under the final order is subject to their other license or ownership rights, or that they must be granted adequate protection for such other rights as a precondition to any impairment. A full-text of the final order is available without charge at http://bankrupt.com/misc/Kodak_FinalDIPOrder.pdf The loan approval came on the heels of a settlement Eastman Kodak offered to holders of $750 million in second-lien debt, according to a report by Bloomberg News. Specifically, the Debtors entered into a settlement with representatives of an "ad hoc committee" of holders of Eastman Kodak's 10.625% Senior Secured Notes due March 15, 2019 and its 9.75% Senior Secured Notes due March 1, 2018. The settlement describes how the proceeds will be distributed when the company sells intellectual property that may be worth billions of dollars. The settlement would assure the junior noteholders of payment of their professional fees and interest, assuming the sale price is high enough. The noteholders in return would give up any claim for interest at the higher default rate as well as claims for so- called prepayment penalty or make-whole premium if the notes are paid before scheduled maturity, according to the report. Specifically, under the settlement, professionals representing the Prepetition Second Lien Noteholders will be paid regardless of whether those fees and expenses were incurred before or after the Petition Date. The professionals are: Akin Gump Strauss Hauer & Feld LLP, as special counsel; Blackstone Advisory Partners LP, as financial advisor; Capstone Advisory Group, LLC, as special intellectual property financial advisor; and Covington & Burling LLP, as counsel to the Notes Trustee. Under the settlement, technology sale proceeds would first go to pay off the term loan and revolving credit and cover letters of credit. Next, excess proceeds will pay half of accrued interest owing to the noteholders. Eastman Kodak can retain the next $250 million. After that, the noteholders receive the remainder of their accrued interest. The settlement then includes a formula for paying principal owing on the second-lien notes, Bloomberg News reported. Antonio M. Perez, Chairman and Chief Executive Officer, said in a Company statement, "Today's agreement is another step towards ensuring that Kodak is positioned to execute on the goals the Company set out last month: Bolster our liquidity in the U.S. and abroad, monetize our non-strategic intellectual property, fairly resolve legacy liabilities, and enable Kodak to focus on its most valuable business lines." A full-text copy of the Second Lien Noteholders' Settlement filed with the U.S. Securities and Exchange Commission is available for free at http://ResearchArchives.com/t/s?7791 U.S. Trustee Hits Kodak's Bid to Keep Fee Letter Under Seal In a related development, the U.S. Trustee, a Justice Department agency overseeing bankruptcy cases, opposed Eastman Kodak's request to file under seal a so-called fee letter it executed with Citigroup Global Markets Inc. The letter dated January 20, 2012, contains fees and other costs connected with Eastman Kodak's $950 million bankruptcy loan from Citigroup. The U.S. Trustee said there is no reason that the "routinely disclosed fees and costs" related to the bankruptcy loan cannot be disclosed through a redaction of the fee letter so to protect Citigroup Global's methodology for calculating fees and the market flex terms, which the lender regarded as highly sensitive and confidential. Amendment No. 2 to DIP Agreement Kodak disclosed with the U.S. Securities and Exchange Commission that it has entered into Amendment No. 2 of the DIP Credit Agreement. The amendments include modification of the definition of the term "Adjusted EBITDA" and other terms used in the credit agreement. A full-text copy of Amendment No. 2 is available for free at http://ResearchArchives.com/t/s?7792 Cash Collateral Access Approved Judge Allan Gropper authorized, on a final basis, Eastman Kodak Co. and its affiliates to use Cash Collateral and all other collateral securing any prepetition debt. Adequate protection is granted to any prepetition secured creditor with respect to, among others, use of their Cash Collateral and all use and diminution in the value of the Prepetition Collateral. The Prepetition First Lien Agent will be granted (1) a replacement security interest in and lien upon all the Collateral, subject and subordinate only to (i) the security interests and liens granted to the DIP Agent and (ii) the Carve Out, (2) contingent adequate protection liens, (3) a superpriority claim, and (4) payment of interest, fees and expenses. The Prepetition Second Lien Noteholders and Notes Trustee are also granted adequate protection in the form of junior adequate protection liens, a superpriority claim subject to the Carve Out, and payment of fees and expenses incurred by their professionals. "Carve Out" means (i) all fees and interest required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States Trustee, (ii) all reasonable fees and expenses incurred by a trustee under section 726(b) of the Bankruptcy Code in an amount not exceeding $100,000 and (iii) all allowed and unpaid claims of any professional of the Debtors or the statutory committee of unsecured creditors appointed in the Chapter 11 Cases in an aggregate amount not exceeding $10,000,000. 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: Apple Proposes to Prosecute Patent Complaint ----------------------------------------------------------- Apple Inc. sought approval from the U.S. Bankruptcy Court in Manhattan to file a patent-infringement complaint against Eastman Kodak Co. in the International Trade Commission. Apple accuses the company of infringing on patents it owns, which cover technologies used in digital products that Eastman Kodak imports to and sells in the U.S. The complaint seeks an investigation into Eastman Kodak's alleged patent infringement. It is also requesting the ITC to issue an "exclusion" order to the U.S. Customs and Border Protection barring the Kodak products that infringe on Apple's patents from entry into the U.S. as well as a cease-and-desist order prohibiting the company from selling those products in the country. Apple will also lodge a complaint based on patent-infringement claims in U.S. District Court in Manhattan for permanent injunction against Eastman Kodak as ITC's jurisdiction only extends to regulation of imported goods. Eastman Kodak will have the right to ask the bankruptcy court to halt the district court case until ITC makes its ruling, Apple said in court papers. The hearing to consider approval of the request is set for February 28, 2012. Objections are due by February 23, 2012. Apple previously claimed it is the true owner of the image- preview patent that is the subject of infringement claims lodged against it and Research in Motion Ltd. The California-based company contends that it developed a digital camera in the early 1990s that it shared with Eastman Kodak, and that the latter then sought the patent on the technology which Eastman Kodak denied, according to a report by Bloomberg News. Earlier, Apple objected to a patent-infringement complaint that Eastman Kodak filed last month before the ITC against it and HTC Corp. It argued that the commission should not investigate the complaint because of Eastman Kodak's bankruptcy filing and the company's plan to sell its patents and digital camera business, Bloomberg News reported. In a February 10 response, Eastman Kodak said its bankruptcy does not alter the fact that it has invested in digital imaging technology and continues to seek licenses for its inventions. The ITC is scheduled to decide by February 23 whether it will institute the investigation, 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). ELEPHANT TALK: Steven Velden Discloses 7.6% Equity Stake -------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Steven Paul Karel Maire Van der Velden disclosed that, as of Dec. 31, 2011, he beneficially owns 8,689,660 shares of common stock of Elephant Talk Communications Corp. representing 7.66% based on 113,380,067 shares of common stock outstanding as of Dec. 31, 2011. A full-text copy of the filing is available for free at http://is.gd/AjdKAh About Elephant Talk Lutz, Fla.-based Elephant Talk Communications, Inc. (OTC BB: ETAK) -- http://www.elephanttalk.com/-- is an international provider of business software and services to the telecommunications and financial services industry. The Company reported a net loss of $92.48 million in 2010 compared with a net loss of $17.30 million in 2009. The Company reported a net loss of $18.70 million for the nine months period ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $50.86 million in total assets, $9.53 million in total liabilities and $41.32 million in total stockholders' equity. As reported by the TCR on April 6, 2011, BDO USA, LLP, noted that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. As of Dec. 31, 2010, the Company incurred a net loss of $92.5 million, used cash in operations of $14.1 million and had an accumulated deficit of $154.8 million. ESTATE FINANCIAL: Ch. 11 Trustee Wants Litigation Claims Expert --------------------------------------------------------------- Thomas P. Jeremiassen, the Chapter 11 trustee for the estate of Estate Financial Inc., asks the U.S. Bankruptcy Court for the Central District of California for permission to employ consultant/expert for the prosecution of litigation claims effective as of Aug. 1, 2011. The EFI Trustee also requested that the Court issue an order authorizing and directing (a) that the application to employ consultant/expert and the related order be filed under seal, including all documents relating thereto. To the best of the trustee's knowledge, the expert does not hold or represent an interest adverse to the Debtor's estate and that the expert is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The EFI trustee is represented by: Robert B. Orgel, Esq. Samuel R. Maizel, Esq. Jeffrey L. Kandel, Esq. PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Blvd., 13th Floor Los Angeles, CA 90067-4100 Tel: (310) 300-2027 Fax: (310) 201-0760 E-mail: jkandel@pszjlaw.com - and - David A. Juhnke, Esq. Joshua W. Martin, Esq. SINSHEIMER JUHNKE LEBENS & McIVOR, LLP 1010 Peach Street, Post Office Box 31 San Luis Obispo, California 93406 Tel: (805) 541-2800 Fax: (805) 541-2802 E-mail: djuhnke@sjlmlaw.com About Estate Financial Estate Financial, Inc. -- http://www.estatefinancial.com/-- was a license real estate brokerage firm since the later 1980's. EFI solicited funding for, and arranged and made, loans secured by various real property. EFI also was the sole manager of Estate Financial Mortgage Fund LLC, which was organized for the purpose of investing in and funding loans originated by EFI which were secured by first deeds of trust encumbering commercial and real estate located primarily in California and has been funding such mortgage loans since 2002. Five creditors of EFI filed an involuntary Chapter 11 petition against the real estate broker on June 25, 2008 (Bankr. C.D. Calif. Case Number 08-11457). Estate Financial Inc. consented to the bankruptcy filing on July 16, 2008. Robert B. Orgel, Esq., at Pachulski Stang Ziehl & Jones LLP, and William C. Beall, Esq., at Beall and Burkhardt, represented the Debtor as counsel. A Chapter 11 trustee, Thomas P. Jeremiassen, was appointed by the Court on July 23, 2008. Robyn B. Sokol, Esq., and Steven T. Gubner, Esq., at Ezra Brutzkus & Gubner, represent the official committee of unsecured creditors as counsel. In its schedules, Estate Financial disclosed total assets of $27,428,550, and total debts of $7,316,755. On July 30, 2008, Thomas P. Jeremiassen accepted his appointment as the chapter 11 trustee of EFI and has served as the duly qualified and acting chapter 11 trustee of the estate. Berkeley Research Group, LLC, serves as its successor accountants. EUROMAX INT'L: Moody's Affirms 'Caa1' Corp. Family Rating --------------------------------------------------------- Moody's Investors Service revised the rating outlook for Euramax International, Inc. to stable from positive and affirmed all of the company's existing ratings, including the Caa1 corporate family and probability of default ratings and the Caa1 rating for the company's senior secured notes due in 2016. The following rating actions were taken: - Caa1 Corporate Family Rating affirmed - Caa1 Probability of Default Rating affirmed - Caa1 (LGD4, 50%) rating on $375 million senior secured notes due 2015 affirmed RATINGS RATIONALE The change in the rating outlook from positive to stable reflects Euramax's inability to reduce debt leverage and meet expectations for improved operating profitability on an annual basis. Moody's expects sustained weak profitability to diminish the company's free cash flow generation over the next 12 to 18 months, which may prompt increased usage of the revolving credit facility compared with prior years. Expectations for only moderately higher revenues, continued softness in operating margins and no significant reduction in balance sheet debt point to elevated adjusted debt leverage in excess of 8.0x over the next 12 to 18 months. The Caa1 corporate family rating considers the company's elevated adjusted debt leverage of approximately 8.5x debt-to-EBITDA, adjusted interest coverage below 1.0x, and weakening operating margins despite increasing revenues. In addition, the rating reflects Moody's expectations for a slow recovery in the residential repair and remodeling and non-residential construction markets, exposure to commodity price volatility and on-going uncertainty about the euro zone. The rating also takes into consideration the limited ability to reduce long-term debt, due largely to expectations for weak free cash flow generation over the next 12 to 18 months. However, the lack of significant long- term debt maturities until 2016 supports the company's liquidity and gives it time to work toward restoring operating profitability. The ratings may be upgraded if the company is able to show improvement in operating margins such that adjusted EBITA margin improves to at least mid-single digits on an annual basis, adjusted EBITA-to-interest expense approaches 2.0x, and adjusted debt-to-EBITDA falls below 6.5x. The ratings may come under pressure if adjusted EBITA-to-interest expense falls below 0.5x or if the company is unable to achieve adjusted debt-to-EBITDA less than 8.0x. Also, if the company remains unable to meet its springing fixed charge coverage covenant in the event that availability under the revolver approaches the minimum threshold, the ratings could be affected. The principal methodology used in rating Euramax 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. Headquartered in Norcross, Georgia, Euramax International, Inc. is an international producer of value-added aluminum, steel, vinyl and fiberglass products. EVERYWARE INC: S&P Assigns Prelim. 'B' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned a preliminary 'B' corporate credit rating to U.S.-based EveryWare Inc., a manufacturer and distributor of tableware, including glassware, dinnerware, and flatware. The outlook is stable. Standard & Poor's also assigned a preliminary 'B' issue-level rating to EveryWare's $150 million senior secured term loan due in six years. "The preliminary recovery rating is '3', indicating our expectation for meaningful (50% to 70%) recovery in the event of a payment default," S&P said. "The speculative-grade ratings on U.S.-based EveryWare reflect Standard & Poor's assessment that the company's financial risk profile is 'highly leveraged', given the significant debt obligations following the merger, and its very aggressive financial policy of seeking acquisitions and paying dividends to its owners. Pro forma for the transaction, we estimate that the company will have about $190 million of reported debt outstanding," S&P said. "Based on the company's small EBITDA base and heavy debt burden, we believe its credit metrics will deteriorate quickly if it incurs operating difficulties," said Standard & Poor's credit analyst Stephanie Harter. "The ratings also incorporate our assessment of EveryWare's business risk profile as 'weak.' Key factors in this assessment include our view of EveryWare's narrow product portfolio; participation in the mature and highly competitive glassware, dinnerware, and flatware categories; exposure to commodity costs; and limited brand and geographic diversity," S&P said. FANNIE MAE: Legal Fees Cost Taxpayers Almost $50 Million -------------------------------------------------------- American Bankruptcy Institute reports that a regulatory analysis has found that taxpayers have advanced almost $50 million in legal payments to defend former executives of Fannie Mae and Freddie Mac in the three years since the government rescued the giant mortgage companies. 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. FILENE'S BASEMENT: Equity Committee Wants to File Competing Plan ---------------------------------------------------------------- The Official Committee of Syms Corp. Equity Security Holders asks the Bankruptcy Court to terminate the period during which Filene's Basement, LLC, et al., have the exclusive right to file a plan of reorganization and terminate the period during which the Debtors have the exclusive right to solicit acceptances of that Plan. The Equity Committee wants to file and solicit a competing Chapter 11 plan that pays allowed claims in full and maximizes value for equity holders. The Equity Committee is concerned that the Debtors are not using exclusivity for a limited purpose of negotiating a plan of reorganization with their key stakeholders. "To date, all of the Debtors' actions and statements, both prepetition and in the first ninety days of these cases, suggest that they have considered nothing but the liquidation of the Syms real estate. The Debtors have proceeded in this manner notwithstanding their awareness that the Equity Committee will oppose a liquidation plan because it believes that liquidating Syms will destroy substantial equity value," asserts Matthew B. Harvey, Esq., counsel to the Equity Committee. About Syms Corp. Massachusetts-based Filene's Basement, also called The Basement, is the oldest off-price retailer in the United States. The Basement focuses on high-end goods and is known for its distinctive, low-technology automatic markdown system. Filene's Basement first filed for Chapter 11 bankruptcy protection in August 1999. Filene's Basement was bought by a predecessor of Retail Ventures, Inc., the following year. Retail Ventures in April 2009 transferred the unit to Buxbaum. Filene's Basement, Inc. and its affiliates filed for Chapter 22 (Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy Solutions serves as claims and notice agent. The Debtors estimated $50 million to $100 million in assets and $100 million to $500 million in debts. The 2009 Debtor was formally renamed FB Liquidating Estate, following the sale of all of its assets to Syms Corp. in June 2009. Pursuant to the Liquidating Plan confirmed in January 2010, secured creditors in the Chapter 11 case have been paid in full, and holders of priority, administrative and convenience class claims have received 100% of their allowed claims. As reported by the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen, Chairman of Abacus Advisors LLC and Chief Restructuring Officer for FB Liquidating Estate disclosed that a second distribution of dividend checks to Filene's unsecured creditors amounting to 12.5% of approved claims has been made, bringing the cumulative distributions on unsecured claims to 62.5%. On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-13511 to 11-13514) after a failed bid to sell the business. The two units are Syms Clothing Inc. and Syms Advertising Inc. Judge Kevin J. Carey presides over the case. Lawyers at Skadden Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The Debtors tapped Rothschild Inc. as investment banker and Cushman and Wakefield Securities, Inc., as real estate financial advisors. Syms shuttered its namesake and Filene's Basement outlets upon the bankruptcy filing and tapped a joint venture of Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC to run the going-out-of-business sales. The sale may continue until Jan. 31, 2012. Filene's Basement estimated $1 million to $10 million in assets and $50 million to $100 million in debts. The petitions were signed by Gary Binkoski, authorized representative of Filene's Basement. The official committee of unsecured creditors appointed in the 2011 case has retained Hahn & Hessen LLP as legal counsel. Holders of equity in Syms Corp. pushed for an official shareholders' committee and separation of the Syms and Filene's Basement bankruptcy estates. Gordon Brothers and Hilco are represented by Goulston & Storrs, P.C. and Ashby & Geddes, P.A. FLINT ENERGY: Moody's Reviews 'B1' Corp. Rating for Upgrade ----------------------------------------------------------- Moody's Investors Service placed Flint Energy Services Ltd's (Flint) B1 Corporate Family Rating (CFR), B1 Probability of Default Rating (PDR) and B2 senior unsecured rating under review for upgrade following the announcement that the company has signed a definitive agreement to be acquired by URS Corporation (URS) (Baa3 stable). The total transaction value is $1.5 billion including $225 million of debt and finance leases. Closing of the transaction is subject to the approval of Flint's shareholders and other customary closing conditions. "We have put the ratings of Flint on review for an upgrade based on its announced agreement to be acquired by URS, a company with a much stronger credit profile", said Terry Marshall, Moody's Senior Vice President. On Review for Possible Upgrade: Issuer: Flint Energy Services Ltd. -- Probability of Default Rating, Placed on Review for Possible Upgrade, currently B1 -- Corporate Family Rating, Placed on Review for Possible Upgrade, currently B1 -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently B2 Outlook Actions: Issuer: Flint Energy Services Ltd. -- Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE The review for upgrade will focus on whether URS guarantees, legally assumes or otherwise contractually supports the C$175 million of senior unsecured notes, in which case the rating is likely to be upgraded to the rating of URS Corporation. If Flint's senior unsecured notes remain outstanding and are not guaranteed or otherwise supported after the acquisition is completed, the ratings could still be upgraded as long as sufficient financial information for Flint is available to monitor the ratings, but not to the level of the URS Corporation rating. Should the notes be repaid in connection with the closing of the transaction, Moody's will withdraw all of the Flint's ratings. The principal methodology used in rating Flint Energy Services Ltd. was the Global Oilfield Services 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. Flint Energy Services Ltd. is a Calgary, Alberta-based provider of products, services and maintenance to the oil and gas industry. FLINT ENERGY: S&P Puts 'BB-' Corp. Credit Rating on Watch Pos. -------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB-'long-term corporate credit and senior unsecured debt ratings on Calgary, Alta.-based Flint Energy Services Ltd. on CreditWatch with positive implications, following URS Corp.'s (BBB-/Stable/--) announced intention to acquire all of Flint's issued and outstanding common shares for a total purchase price of C$1.25 billion. The '3' recovery rating on Flint's C$175 million senior unsecured debt, maturing in 2019, remains unchanged. The transaction is expected to close by June 30, 2012. Given the higher credit rating on URS, Standard & Poor's expects to raise its long-term corporate credit and senior unsecured debt ratings on Flint on completion of the URS acquisition. Pro forma this transaction, Flint is estimated to account for about 22% of the consolidated entity's revenues, based on the year-to-date financial performance at Sept. 30, 2011. "With the addition of URS' engineering capability to Flint's construction services, we believe Flint should be able to improve its competitive position in the growing oil sands sector of the oil and gas industry. There is the potential for the Flint and URS combined entity to increase its participation in the future development of in-situ oil sands projects, which are expected to account for the majority of the estimated C$180 billion of development activity likely to occur during the next 10 years. These business opportunities will largely occur in the company's Facility Infrastructure division, a segment that has historically generated operating margins that are slightly weaker than the company's consolidated margins; however, the combined company should be able to improve the segment's operating margin performance through its expanded service capabilities (which will now include engineering, procurement, and construction). Although we do not expect this segment's operating margins will reach or exceed Flint's recent 8%-10% realized consolidated operating margins during the next 24 months, we believe the segment will continue to grow as a percentage of Flint's total revenues and operating income," S&P said. "As Flint will now be able to add URS' engineering capability to its service offering in the market segments where it operates, we believe the company could improve its overall competitive position as a service provider to the Canadian oil and gas industry," said Standard & Poor's credit analyst Michelle Dathorne. "Flint's ability to improve its profitability will, however, remain contingent on the company's ability to pass unanticipated cost increases to its customers," Ms. Dathorne added. Standard & Poor's expects to resolve the CreditWatch placement before June 30, 2012. FREDERICK WENDT-HUGHES: Attorney's Lawsuit Survives Dismissal Bid ----------------------------------------------------------------- District Judge Juan M. Perez-Gimenez denied the request of co-defendants Juan Piza Blondet and La Julia Development, Inc., to dismiss a lawsuit by Stuart A. Weinstein-Bacal on the grounds that the plaintiff failed to join an indispensable party, namely, Word Processing Centers, Inc., to the action. On Aug. 3, 2010, attorney Mr. Weinstein-Bacal filed a claim for damages against Frederick Wendt-Hughes, his wife Alice Wendt, the Conjugal Partnership Wendt-Wendt, La Julia Development, TSH Corporation, and other unknown defendants. Essentially, Mr. Weinstein-Bacal alleges that the events that bring about the claim stem from Mr. Wendt's Chapter 11 bankruptcy proceedings, wherein Mr. Weinstein-Bacal represented the Wendts and a closely-held corporation by the name of Word Processing Center, Inc. A bankruptcy court approved a plan of reorganization that included the payment of $72,790.83 in attorney fees to be made upon the sale of a real-estate property in the Las Olas Condominium in Condado, Puerto Rico. Subsequent to the discharge of the debtors in bankruptcy court, Mr. Weinstein-Bacal alleges that the Wendts sold the Las Olas property without notice and did not pay the attorney fees owed to Mr. Weinstein-Bacal. As a result, Mr. Weinstein-Bacal sued the Wendts and WPC before the local courts, and in 2001, obtained a judgment in his favor for $72,790.83 plus interest. Mr. Weinstein-Bacal now claims, however, that to avoid paying the fees owed, co-defendant Mr. Wendt filed for personal bankruptcy on at least three occasions after the local court judgment was issued. Following the dismissal of the bankruptcy cases, on May 2, 2006, the local court issued an embargo order seizing all of the Wendts' shares of WPC. This order was notified to the parties on May 8, 2006. Mr. Weinstein-Bacal alleges that at the time of the embargo order, WPC's only asset was a property on the first floor of a building located at 103 University Avenue in Rio Piedras, Puerto Rico. In accordance with the embargo order, Mr. Weinstein-Bacal recorded a preventive entry with the Property Registrar in the amount of the attorney fees owed, and Mr. Wendt's shares of WPC were seized. Thereafter, on Sept. 10, 2006, a lawfully conducted auction took place and the shares of WPC stock were adjudicated to Mr. Weinstein-Bacal. However, on May 24, 2006, Mr. Wendt, appearing as president of WPC, sold the University Avenue Property to a company by the name of La Julia, represented by Juan Piza, in a deed of sale prepared by attorney and notary public Rafael J. Baragano, who is now deceased. Although attorney Mr. Baragano allegedly warned the parties in the deed that the property in question was subject to a lien in favor of Mr. Weinstein-Bacal, both Messrs. Piza and Wendt represented that the debt had been satisfied prior to the execution of the deed. However, Mr. Weinstein-Bacal now claims this information was false. In addition, Mr. Weinstein-Bacal now complains that he was never provided a notice of the intended sale of the property and alleges the transaction was made with the purpose to defraud him inasmuch as Mr. Wendt and La Julia are alter egos. Mr. Weinstein-Bacal now requests that the District Court declare the sale of the University Avenue Property to La Julia null and void ab initio and order the Property Registrar of the Commonwealth of Puerto Rico to cancel the registration of the transfer. In addition, Mr. Weinstein-Bacal now requests that the District Court order Mr. Wendt, his alter egos and/or La Julia to cease and desist from interfering with the use and enjoyment of the property in question; order Mr. Wendt to pay Mr. Weinstein- Bacal $400,000 for the rent received as a result of the fraudulent sale; and order all defendants to pay Mr. Weinstein-Bacal $500,000 in damages. The lawsuit is STUART A. WEINSTEIN-BACAL, Plaintiff, v. FREDERICK WENDT-HUGHES, ET ALS., Defendants, Civ. No. 10-1750 (D. P.R.) A copy of the Court's Feb. 15, 2012 Opinion and Order is available at http://is.gd/RTiTPsfrom Leagle.com. Stuart A. Weinstein-Bacal is represented by: Javier A. Vega-Villalba, Esq. Peter W. Miller, Esq. WEINSTEIN-BACAL & ASSOCIATES, PSC Gonzalez Padin Building Penthouse 154 Rafael Cordero Street Old San Juan, PR 00901 Tel: 787-977-2550 E-mail: swb@w-bmlaw.com pwm@w-bmlaw.com Frederick Wendt-Hughes, Alice Wendt and TSH Corporation are represented by Jose R. Olmo-Rodriguez, Esq., Olmo & Rodriguez Matias. FULLER BRUSH: Files for Chapter 11 in Manhattan ----------------------------------------------- Leicester, New York-based The Fuller Brush Company, Inc., filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 12-10714) in Manhattan on Feb. 21, 2012. The Fuller Brush estimated assets and debts of $10 million to $50 million. Debt is owing to more than 5,000 creditors. Its parent, CPAC, Inc., also filed a Chapter 11 petition (Case No. 12-10715). The corporate resolution authorizing the bankruptcy filing says that the Debtors are retaining Conway MacKenzie, Inc., as restructuring crisis manager and Lawrence R. Perkins as chief restructuring officer. Herrick, Feinstein LP is the bankruptcy counsel. According to Chief Restructuring Officer, Lawrence Perkins, the filing was a necessary means to effectuate a reorganization of the Company in an effort to return the Company to profitability and restructure its balance sheet. The Company has negotiated a new line of credit that provides immediate and ample funds for working capital while undergoing the reorganization. The Company is lowering its operating costs, while seeking to broaden its existing revenue streams. "After careful consideration of Chapter 11 at this time the board of directors and senior management team believe this is a necessary step and the right thing to do for the future success of the Company," stated CRO Lawrence Perkins. Fuller has 180 employees, the majority of which work from its headquarters in Great Bend. The filing listed assets of between $10 million and $50 million, debts of between $10 million and $50 million. Perkins further assured employees that it will be business as usual under Chapter 11. "Fuller Brush expects to pay employees wages and benefits and provide even greater levels of service to its customers," the Company said. Perkins said the Company has multiple objectives while in Chapter 11, amongst them is maximizing the revenue streams from the Company's most popular products, while eliminating the production of other, less profitable items, obtaining the financing to reassure its employee, customers, and stakeholders that the Company is in business; lowering operating costs to levels that will allow the Company to be more competitive in its markets, and driving growth through new market channels and focusing on its most valuable business/product lines. Currently, the Fuller Brush Company sells branded and private label products for personal care, commercial and household cleaning and produces more than 2,000 items including household cleaning aids, commercial and industrial cleaners, personal care products, lotions and health care aids. The Company's business is comprised of several different businesses/distribution channels including: direct selling, commercial, custom products, factory outlet stores and retail (including catalog, internet, and retail stores. Some of Fuller's retail partners include; Home Trends, Bi- Mart, Byerly's, Lunds, Home Depot, Do-It-Best, Primetime Solutions, Vermont Country Store and Starcrest. The Company will continue to actively developing channel of distribution through retail opportunities during the reorganization. Over the last six months, the Fuller Brush Company has re-launched the Brand and Products into Mass Market through retail stores and E-Commerce/Consumer web portal. Additionally, they've invested in talent, systems, new product development and marketing to bring the brand forward to today's target market of 27 - 45 year old women (core purchaser for cleaning products). About The Fuller Brush Company Founded in 1906, The Fuller Brush Company -- http://www.fuller.com/-- delivers cleaning remedies. Fuller's expanded distribution includes direct, online and retail channels. Fuller Brush and its parent CPAC, Inc., filed for bankruptcy five years after the company was taken over by private equity firm Buckingham Capital Partners. FULLER BRUSH: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: The Fuller Brush Company, Inc. 2364 Leicester Road Leicester, NY 14481 Bankruptcy Case No.: 12-10714 Chapter 11 Petition Date: February 21, 2012 About the Debtor: Founded in 1906, The Fuller Brush Company -- http://www.fuller.com/-- delivers cleaning remedies. Fuller's expanded distribution includes direct, online and retail channels. Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Hanh V. Huynh, Esq. HERRICK, FEINSTEIN LLP 2 Park Avenue New York, NY 10016 Tel: (212) 592-1482 Fax: (212) 592-1500 E-mail: hhuynh@herrick.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Lawrence R. Perkins, chief restructuring officer. Affiliate that simultaneously filed Chapter 11 petition: Debtor Case No. ------ -------- CPAC, Inc. 12-10715 Assets: $10 million to $50 million Debts: $10 million to $50 million GAGE'S LONG: Judge Approves Plan to Sell Assets to Big Cedar ------------------------------------------------------------ Tyler Francke at Branson Tri-Lake News reports that a federal bankruptcy judge approved a plan last week to sell Gage's Long Creek Marina and its associated assets to Big Cedar Lodge. According to the report, David Schroeder, who represents Gage's Long Creek Marina Inc., said the $2.3 million deal with Big Cedar was approved on Feb. 16, 2012, pending a formal bidding process established by the judge. "The court provided that if there's a third party willing to make a higher or better offer, they must do so by 5 p.m. March 12," the report quotes Mr. Schroeder as saying. The report relates that if any other offers do come in, the bankruptcy court will schedule and conduct an auction. If the deadline passes without another offer, the Hollister-based marina company will "ask the court to enter an order approving the sale and schedule a closing," Mr. Schroeder said. He said he would file the motion by March 15. The report adds that, to qualify, interested bidders must submit certain financial documents to the court and put $100,000 into an escrow account, as Big Cedar has done. Prospective buyers must also be willing to pay with immediately available funds. The report further adds that, if the sale is finally approved by the judge next month and the deal closes, the $2.3 million Big Cedar has agreed to pay will be distributed to the marina company's creditors. According to the report, Mr. Schroeder said the proceeds will cover all of the secured creditors, the tax claims and is estimated to cover anywhere from 95% to 100% of the remaining claims. He said none of the sum paid by Big Cedar will be retained by the marina. The marina's largest secured claim is held by Commerce Bank and amounts to more than $1.6 million. Case filings list more than $550,000 in unsecured claims. The report, citing papers filed with the court, relates that, at last week's hearing, the judge also agreed to grant a request by Big Cedar for a break-up fee, which will require the marina to pay $100,000 if it backs out of the deal. The report says a letter of intent to purchase the company's assets signed by Big Cedar was filed in the case in January. According to case filings, the assets include the main commercial dock on Table Rock Lake and associated buildings, eight other docks, a commercial yacht, all existing furniture, equipment and inventory and approximately 130 annual boat slip rental accounts. Though court documents list that another asset, the marina's lease with the U.S. Army Corps of Engineers, will also be assumed by the buyer upon the sale, corps spokeswoman Laurie Driver said the lease is "not assumable." Based in Ridgedale, Missouri, Gage's Long Creek Marina Inc. filed for Chapter 11 protection on June 20, 2011 (Bankr. W.D. Mo. Case No.11-61319). Judge Arthur B. Federman presides over the case. The David Schroeder Law Offices, PC, represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. GALP CYPRESS: Case Dismissal Hearing Scheduled for March 6 ---------------------------------------------------------- The Bankruptcy Court will conduct a hearing on March 6, 2012, at 2:00 p.m., to consider the request of Judy A. Robbins, the U.S. Trustee for the Southern District of Texas, to convert or dismiss the Chapter 11 case of GALP Cypress Limited Partnership. The U.S. Trustee sought conversion or dismissal of the Debtor's cases in light of the Court's order allowing a secured creditor to proceed with foreclosure of the real estate owned by the Debtor, which asset is necessary for the Debtor to have any prospect at reorganization. About GALP Cypress GALP Cypress Limited Partnership owns an apartment complex in Houston, Texas. The Debtor filed for Chapter 11 bankruptcy (Bankr. S.D. Tex. Case No. 11-40427) on Dec. 6, 2011. Judge Letitia Z. Paul presides over the case. The Debtor estimated assets of $10 million to $50 million and debts of $1 million to $10 million. Gary Gray signed the petition as president of Cypress-1 GP, Inc., general partner of Cypress GP, L.P. The Debtor is represented by Matthew Hoffman, Esq., at Law Offices of Matthew Hoffman, P.C. This is the second case filed by the Debtor. The Debtor's previous case was filed on Oct. 4, 2010, under Bankruptcy Case Number 10-38991, and was dismissed Sept. 29, 2011, on an unopposed motion of the US Trustee. GENERAL MARITIME: Plan Omits Crucial Info, BNY Mellon Says ---------------------------------------------------------- According to Lisa Uhlman at Bankruptcy Law360, General Maritime indenture trustee The Bank of New York Mellon Corp. said Tuesday that the bankrupt oil tanker operator's disclosure statement left out important information that could significantly reduce payments owed to the noteholders the bank represents. Dow Jones' Daily Bankruptcy Review reports that creditors of General Maritime are accusing the oil tanker operator and "old friend" Oaktree Capital Management LLC of contriving to give the hedge fund manager ownership of the company and leave them holding the bag. As reported in yesterday's edition of the TCR, the creditors' committee is opposing approval of the disclosure statement explaining the Company's Chapter 11 plan. The committee claims that the company's proposed reorganization plan is "patently unconfirmable." The committee's principal objection is to releases contained in the plan that would preclude creditors from suing third parties, such as Oaktree. The hearing to approve the explanatory disclosure statement is set for Feb. 28. The Company filed a proposed Chapter 11 plan on Jan. 31 to implement an agreement reached prepetition with affiliates of Oaktree Capital Management LP, the leader of a group of lenders on three credits totaling more than $1 billion. The Oaktree group is to invest $175 million while converting secured debt to equity. The Plan contemplates a $61.25 million rights offering where holders of general unsecured claims will have the opportunity to purchase up to 17.5% of the new equity of the reorganized Company. 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. 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. GENERAL MOTORS: In Talks With Peugeot Citroen on Possible Alliance ------------------------------------------------------------------ Dow Jones' Daily Bankruptcy Review reports that PSA Peugeot Citroen is in talks over a potential European alliance with General Motors Co., a French government official said, as the two grapple with weak sales and a raging price war on the continent. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. GM employs 208,000 people in every major region of the world and does business in more than 120 countries. GM and its strategic partners produce cars and trucks in 30 countries, and sell and service these vehicles through the following brands: Baojun, Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall, and Wuling. GM's largest national market is China, followed by the United States, Brazil, the United Kingdom, Germany, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government once owned as much as 60.8% stake in New GM on account of the financing it provided to the bankrupt entity. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. On Nov. 1, 2011, Moody's Investors Service raised New GM's Corporate Family Rating and Probability of Default Rating to Ba1 from Ba2, and its secured credit facility rating to Baa2 from Baa3. Moody's also raised the Corporate Family Rating of GM's financial services subsidiary -- GM Financial -- to Ba3 from B1. On Oct. 7, 2011, Fitch Ratings upgraded the Issuer Default Ratings of New GM, General Motors Holdings LLC, and General Motors Financial Company Inc., to 'BB' from 'BB-'. On Oct. 3, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on New GM to 'BB+' from 'BB-'; and revised the rating outlook to stable from positive. "We also raised our issue-level rating on GM's debt to 'BBB' from 'BB+'; the recovery rating remains at '1'," S&P said. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. GOLDENPARK LLC: Fails to File Plan, MORs; Case Dismissed -------------------------------------------------------- The Hon. Peter H. Carroll of the U.S. Bankruptcy Court for the Central District of California dismissed the Chapter 11 case of Goldenpark LLC. As reported in the Troubled Company Reporter on Sept. 21, 2011, Urban Commons Sycamore LLC, a creditor of Goldenpark LLC, asked the Court to dismiss the Debtor's case or, in the alternative, convert the Debtor's case to Chapter 7 liquidation proceeding because the Debtor has ignored and failed to comply with the scheduling order's deadline for the filing of its plan and disclosure statement. Urban Commons noted that the Debtor's plan filing deadline expired on Sept. 15, 2011. Urban Commons added that the Debtor has failed to comply with the requirements of the Court's local rules by failing to file any monthly operating reports at all in case and is concealing assets. About Goldenpark LLC Goldenpark LLC operates a 171-room hotel in Norwalk, California. Pursuant to a franchise agreement with Hilton Worldwide, the hotel is currently being operated as a Double Tree Hotel. Goldenpark LLC filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-30070) on May 8, 2011, to halt a secured lender's attempt to place the hotel in the hands of a receiver. Judge Peter Carroll presided over the case. The Debtor estimated $10 million to $50 million in both assets and debts as of the Chapter 11 filing. Timothy 1. Yoo, Esq., David B. Golubchik, Esq., and Lindsey L. Smith, Esq., at Levene, Neale, Bender, Yoo & Brill L.L.P., represented the Debtor. GRUBB & ELLIS: Wins Interim Approval of BGC Partners DIP Loan ------------------------------------------------------------- Grubb & Ellis Company and its debtor affiliates won interim authority to borrow funds under a postpetition secured financing agreement with BGC Note Acquisition Co., L.P., an affiliate of BGC Partners Inc., and to use cash collateral. After several months of negotiating with the Debtors' prior prepetition secured lenders regarding an out-of-court restructuring and following the termination of two important facility management contracts in January 2012 and the loss of 20% of their brokers, Grubb & Ellis reached a Letter of Intent, Term Sheet for Senior Secured Super-Priority Debtor in Possession Financing and Term Sheet for Asset Acquisition, each dated Feb. 17, 2012, with BGC Partners, Inc. BGC is providing up to $5.5 million in secured term loans to be made available subject to the satisfaction of the Material Conditions to each Advance: -- $1.5 million, an amount equal to 5% of the proposed purchase price, to made available after entry of the Interim DIP Order; -- an additional $1.5 Million, amount equal to 5% of the Purchase Price, to be made available upon approval of procedures for the Proposed Sale; and -- the balance of the DIP Facility upon or after the entry of the Final Order. BGC initially agreed to provide a loan of as much as $4.8 million. The Debtors said the DIP Facility and use of cash collateral will, among other things, provide the Debtors with sufficient funds to continue operating in accordance with a budget and maintain the value of the business pending the completion of an expedited sale of the Debtors' businesses as a going concern to BGC or such higher and better purchaser pursuant to 11 U.S.C. Sec. 363. The DIP Credit Agreement will also preserve and enhance the Sale Process so that in addition to containing events of default that are usual and customary for facilities of this size, that DIP Lender, in accordance with the DIP Term Sheet and proposed Interim Order, will also be required to fund an administrative reserve as a component of a Carve-Out, whether a default or Event of Default has occurred and is continuing. Absent the DIP financing, the Debtors will likely be required to cease operations. The DIP facility carries a non-default interest rate of 8.0% per annum. The rate will rise to 10.0% per annum in the event of default. The Debtors are required to pay a Commitment Fee equal to 1.5% of the maximum commitment amount as well as pay the DIP Lender's costs and expenses incurred in connection with Chapter 11 cases. The DIP Facility will mature on the earliest to occur of (i) the date that is 60 days after the Closing Date, (ii) the date the Borrowers enter into an agreement to sell other than to BGC, (iii) the date of the occurrence of an Event of Default under the DIP Facility, (iv) the date the Debtors file a motion to proceed with any sale or liquidation of any Borrowers without the consent of the DIP Lender, or (v) the date the Borrowers pay the DIP Lender in full. The DIP Credit Agreement imposes these milestones for the Debtors: (a) Entry of Interim Order by Feb. 21, 2012 or as soon as practicable. (b) Entry of Final Order within 21 days of the Closing Date. (c) Entry of Procedures Order within 10 days after Petition Date. (d) Entry of Sale Order within 25 days of executing APA. (e) Closing of the Proposed Sale within 45 days of the Closing. The Court has scheduled a Feb. 29 hearing to consider the sale procedures. The BGC affiliate holds an interest in the cash collateral after it acquired the Debtors' debt from the original lenders, Colfin GNE Loan Funding LLC and C-III Investments LLC. As of the Petition Date, the aggregate amount of all obligations owing by the Debtors to the Prepetition Secured Lender was $30,029,055. The Original Credit Facility matures on March 1, 2012. The DIP Agreement provides that the DIP Lender will be required to fund a Carve-Out whether a default or Event of Default has occurred and is continuing solely in accordance with the Interim Order and DIP Term Sheet. The Carve-Out means sums having priority ahead of the super priority claims and liens securing the DIP Financing for (a) statutory fees payable to the United States Trustee pursuant to 28 U.S.C. Section 1930(a)(6); and (b) all fees and disbursements incurred by the Debtors and any official committee of unsecured creditors appointed in the Debtors' Chapter 11 Cases for any attorneys and a single financial advisor for the Borrowers and the Committee to the extent allowed by Court order; provided, that following a notice to the Borrowers from the DIP Lender of the occurrence of an Event of Default, in no event will the amount of the Carve-Out exceed the greater of (a) $200,000 and (b) the amount of the DIP Facility less Advances made as of the Termination Date. A final hearing to consider approval of the DIP facility is set for March 16, 2012 at 10:00 a.m. About Grubb & Ellis Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is a commercial real estate services and property management company with more than 3,000 employees conducting throughout the United States and the world. It is one of the oldest and most recognized brands in the industry. Grubb & Ellis and 16 affiliates filed for Chapter 11 bankrutpcy (Bankr. S.D.N.Y. Lead Case No. 12-10685) on Feb. 21, 2012, to sell almost all its assets to BGC Partners Inc. The Santa Ana, California-based company disclosed $150.16 million in assets and $167.2 million in liabilities as of Dec. 31, 2011. Judge Martin Glenn presides over the case. The Debtors have engaged Togut, Segal & Segal, LLP as general bankruptcy counsel, Zuckerman Gore Brandeis & Crossman, LLP, as general corporate counsel, and Alvarez & Marsal Holdings, LLC, as financial advisor in the Chapter 11 case. Kurtzman Carson Consultants is the claims and notice agent. The sale to BGC is subject to higher and better offers at an auction. The Debtors have proposed a March 9 deadline for preliminary bids, a March 19 deadline for binding bids, an auction on March 31, 2012, and a sale hearing on March 23, 2012. Pursuant to the term sheet signed by the parties, BGC will buy the assets for $30.02 million, consisting of a credit bid the full principal amount outstanding under the (i) $30 million credit agreement dated April 15, 2011, with BGC Note, (ii) the amounts drawn under the $4.8 million facility, and (iii) the cure amounts due to counterparties. BGC can terminate the contract if the sale order has not been entered by the bankruptcy court in 25 days after the execution of the Asset Purchase Agreement. BGC Partners, Inc., and its affiliate, BGC Note Acquisition Co., L.P., the DIP lender and Prepetition Secured Lender, are represented in the case by: Emanuel C. Grillo, Esq. GOODWIN PROCTER LLP The New York Times Building 620 Eighth Avenue New York, NY 10018 E-mail: egrillo@goodwinprocter.com GRUBB & ELLIS: Organizational Meeting Today to Form Committee ------------------------------------------------------------- The United States Trustee for Region 2 will hold an organizational meeting today, Feb. 24, at 10:00 a.m. to form an official committee of unsecured creditors in the Chapter 11 cases of Grubb & Ellis Company. Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is a commercial real estate services and property management company with more than 3,000 employees conducting throughout the United States and the world. It is one of the oldest and most recognized brands in the industry. Grubb & Ellis and 16 affiliates filed for Chapter 11 bankrutpcy (Bankr. S.D.N.Y. Lead Case No. 12-10685) on Feb. 21, 2012, to sell almost all its assets to BGC Partners Inc. The Santa Ana, California-based company disclosed $150.16 million in assets and $167.2 million in liabilities as of Dec. 31, 2011. Judge Martin Glenn presides over the case. The Debtors have engaged Togut, Segal & Segal, LLP as general bankruptcy counsel, Zuckerman Gore Brandeis & Crossman, LLP, as general corporate counsel, and Alvarez & Marsal Holdings, LLC, as financial advisor in the Chapter 11 case. Kurtzman Carson Consultants is the claims and notice agent. The sale to BGC is subject to higher and better offers at an auction. The Debtors have proposed a March 9 deadline for preliminary bids, a March 19 deadline for binding bids, an auction on March 31, 2012, and a sale hearing on March 23, 2012. Pursuant to the term sheet signed by the parties, BGC will buy the assets for $30.02 million, consisting of a credit bid the full principal amount outstanding under the (i) $30 million credit agreement dated April 15, 2011, with BGC Note, (ii) the amounts drawn under the $4.8 million facility, and (iii) the cure amounts due to counterparties. BGC can terminate the contract if the sale order has not been entered by the bankruptcy court in 25 days after the execution of the Asset Purchase Agreement. BGC Partners, Inc., and its affiliate, BGC Note Acquisition Co., L.P., the DIP lender and Prepetition Secured Lender, are represented in the case by Emanuel C. Grillo, Esq., at Goodwin Procter LLP. GRUBB & ELLIS: Taps Togut Segal as Bankruptcy Counsel ----------------------------------------------------- Grubb & Ellis Company and its debtor-affiliates seek Bankruptcy Court permission to hire lawyers at Togut, Segal & Segal LLP, led by Frank A. Oswald, Esq., Scott E. Ratner, Esq., and Jonathan P. Ibsen, Esq., as their general bankruptcy counsel. The Togut Firm was engaged on Jan. 31, 2012, to assist the Debtors with evaluating its restructuring options and to prepare for a chapter 11 case should a filing become necessary or desirable. To date, the Company has paid an aggregate of $850,000 as a retainer to the Togut Firm. The Debtors propose to compensate the Togut Firm on an hourly basis at its customary hourly rates for services rendered, plus reimbursement of actual, necessary expenses incurred by the Togut Firm. The current standard hourly rates for the Togut Firm are (i) partners $800 to $935; (ii) associates and counsel $185 to $715; (iii) paralegals and law clerks $145 to $285. Mr. Oswald, a member of the Togut Firm, attests that the Firm does not represent or hold any interest adverse to the Debtors or their estates with respect to the matters on which the firm is to be employed. The Togut Firm also does not have any connection with any creditors or other parties in interest, or their attorneys or accountants, or the United States Trustee or any of its employees. About Grubb & Ellis Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is a commercial real estate services and property management company with more than 3,000 employees conducting throughout the United States and the world. It is one of the oldest and most recognized brands in the industry. Grubb & Ellis and 16 affiliates filed for Chapter 11 bankrutpcy (Bankr. S.D.N.Y. Lead Case No. 12-10685) on Feb. 21, 2012, to sell almost all its assets to BGC Partners Inc. The Santa Ana, California-based company disclosed $150.16 million in assets and $167.2 million in liabilities as of Dec. 31, 2011. Judge Martin Glenn presides over the case. The Debtors have engaged Togut, Segal & Segal, LLP as general bankruptcy counsel, Zuckerman Gore Brandeis & Crossman, LLP, as general corporate counsel, and Alvarez & Marsal Holdings, LLC, as financial advisor in the Chapter 11 case. Kurtzman Carson Consultants is the claims and notice agent. The sale to BGC is subject to higher and better offers at an auction. The Debtors have proposed a March 9 deadline for preliminary bids, a March 19 deadline for binding bids, an auction on March 31, 2012, and a sale hearing on March 23, 2012. Pursuant to the term sheet signed by the parties, BGC will buy the assets for $30.02 million, consisting of a credit bid the full principal amount outstanding under the (i) $30 million credit agreement dated April 15, 2011, with BGC Note, (ii) the amounts drawn under the $4.8 million facility, and (iii) the cure amounts due to counterparties. BGC can terminate the contract if the sale order has not been entered by the bankruptcy court in 25 days after the execution of the Asset Purchase Agreement. BGC Partners, Inc., and its affiliate, BGC Note Acquisition Co., L.P., the DIP lender and Prepetition Secured Lender, are represented in the case by Emanuel C. Grillo, Esq., at Goodwin Procter LLP. GSS BUSINESS: Case Summary & 4 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: GSS Business, Inc. 1011 N. Route 130 Burlington, NJ 08016 Bankruptcy Case No.: 12-14168 Chapter 11 Petition Date: February 21, 2012 Court: U.S. Bankruptcy Court District of New Jersey (Trenton) Judge: Raymond T. Lyons, Jr. Debtor's Counsel: Ellen M. McDowell, Esq. MCDOWELL RIGA POSTERNOCK, P.C. 46 W. Main Street Maple Shade, NJ 08052 Tel: (856) 482-5544 Fax: (856) 482-5511 E-mail: emcdowell@mrpattorneys.com Scheduled Assets: $311,153 Scheduled Liabilities: $1,499,490 The Company's list of its four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb12-14168.pdf The petition was signed by Banadur Sidhu, president. Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- S & S Business, Inc. 12-14174 Assets: $500,000 to $1 million Debts: $1 million to $10 million GSS Property Management, LLC 12-14179 Assets: $500,000 to $1 million Debts: $1 million to $10 million H & N Oil Corporation 12-14183 Assets: up to $50,000 Debts: $1 million to $10 million HSN Petroleum, Inc. 12-14187 Assets: up to $50,000 Debts: $100,000 to $500,000 GSS Petroleum, LLC 12-14193 Assets: up to $50,000 Debts: $500,000 to $1 million HMC/CAH: Has Until April 10 to File a Chapter 11 Plan ----------------------------------------------------- The Bankruptcy Court extended until April 10, 2012, the deadline for HMC/CAH Consolidated, Inc., et al., to file a Chapter 11 plan. The Debtors have until June 11 to solicit acceptances of that Plan. The hearing with respect to the further extension of the Exclusive Periods to June 6 and August 6, respectively, as requested by the Debtors, is continued to the Court's Omnibus Hearing on April 10, 2012, at 1:30 p.m. The limited extension of the Exclusive Periods was agreed by the Debtors and the Official Committee of Unsecured Creditors. About HMC/CAH Consolidated Kansas City, Missouri-based HMC/CAH Consolidated, Inc., is in the business of acquiring and operating a system of acute care hospitals located in rural communities that are certified by The Centers for Medicare and Medicaid Services as Critical Access Hospitals or CAHs. The core focus of HMC/CAH's business plan is to replace the technologically out of date and operationally inefficient medical facilities of its CAHs with newly constructed state-of-the art facilities. Since its incorporation, HMC/CAH has purchased 12 rural hospitals certified as Critical Access Hospitals. These CAH Hospitals are located in Kansas (3), Oklahoma (5), Missouri (1), Tennessee (1) and North Carolina (2). The CAH Hospitals are the lifeline of the communities that they serve. The CAH Hospitals provide critical health services to rural residents, including emergency medical services. HMC/CAH and 12 affiliates filed for Chapter 11 bankruptcy (Bankr. W.D. Mo. Case Nos. 11-44738 to 11-44750) on Oct. 10, 2011. Judge Dennis R. Dow presides over the case. Mark T. Benedict, Esq., at Husch Blackwell Sanders LLP, represents the Debtors as counsel. In its petition, the Debtors estimated $10 million to $50 million in assets and debts. The petition was signed by Dennis Davis, chief legal officer. Nancy J. Gargula, U.S. Trustee for Region 13, appointed five members to serve on the Official Committee of Unsecured Creditors of HMC/CAH Consolidated, Inc. Kilpatrick Townsend & Stockton LLP serves as the committee's counsel. HOSTESS BRANDS: U.S. Trustee Protests New Contract for Chief ------------------------------------------------------------ Dow Jones' Daily Bankruptcy Review reports that a federal bankruptcy watchdog is taking aim at Hostess Brands Inc.'s request to dole out millions of dollars to Chief Executive Brian J. Driscoll. As reported in the Feb. 14, 2012 edition of the TCR, Hostess Brands is asking the bankruptcy court to approve an employment agreement with Chief Executive Officer Brian J. Driscoll so he won't be hired away by a competitor. Mr. Driscoll was president of sales for Kraft Foods Inc. before joining Hostess in June 2010. The new contract with Hostess gives Mr. Driscoll a $1.5 million annual base salary and offers a $2 million bonus covering three years ending May 2013. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein will head up the legal team for the committee. The bankruptcy judge on Feb. 3 gave Hostess Brands final authority for $75 million in secured financing. The day following the Jan. 11 Chapter 11 filing, Hostess had secured interim approval for a $35 million loan. HOVNANIAN ENTERPRISES: Regains Compliance with NASDAQ Rule ---------------------------------------------------------- Hovnanian Enterprises, Inc., was informed by The Nasdaq Stock Market that the depositary shares representing shares of Hovnanian's 7.625% Series A Preferred Stock have regained compliance with Nasdaq Listing Rule 5450(b)(2)(C) (the "Rule"), as a result of Nasdaq's determination that for ten consecutive trading days, from Feb. 6, 2012, to Feb. 17, 2012, the market value of publicly held Depositary Shares has been $15,000,000 or greater. As previously disclosed, the Depositary Shares had been the subject of a deficiency notice relating to the minimum market value requirements under the Rule. Nasdaq has informed Hovnanian that the matter is now closed. About Hovnanian Enterprises Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV) -- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian, is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes, Oster Homes and CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. The Company reported a net loss of $286.08 million on $1.13 billion of total revenues for the fiscal year ended Oct. 31, 2011, compared with net income of $2.58 million on $1.37 billion of total revenues during the prior year. The Company's balance sheet at Oct. 31, 2011, showed $1.60 billion in total assets, $2.09 billion in total liabilities, and a $496.60 million total deficit. * * * As reported by the TCR on Nov. 4, 2011, Fitch Ratings has lowered the Issuer Default Rating (IDR) of Hovnanian Enterprises, Inc., (NYSE: HOV) to Restricted Default (RD) from 'CCC'. The downgrade reflects Fitch's view that the debt exchange of certain of Hovnanian's existing senior unsecured notes for new senior secured notes is a distressed debt exchange under Fitch's 'Distressed Debt Exchange Criteria', published Aug. 12, 2011. Fitch anticipates adjusting the company's IDR to the appropriate level to reflect the new capital structure within the next 14 days. In the Nov. 7, 2011, edition of the TCR, Standard & Poor's Ratings Services raised its corporate credit rating on Hovnanian Enterprises Inc. (Hovnanian) to 'CCC-' from 'SD' (selective default). "We also raised our ratings on the company's 10.625% senior secured notes due 2016 to 'CCC-' from 'CC' and senior unsecured notes to 'CC' from 'D'. The '3' recovery rating on the senior secured notes and the '6' recovery rating on the senior unsecured notes remain unchanged," S&P stated. "These rating actions follow our reassessment of Hovnanian's business and financial risk profile following the completion of the company's debt exchange offer, in which the company exchanged $195 million of its seven series of senior unsecured notes for $141.8 million 5% senior secured notes due 2021 and $53.2 million 2% senior secured notes due 2021," said credit analyst George Skoufis. "Our rating on Hovnanian reflects the company's highly leveraged financial risk profile, a less-than-adequate liquidity position, and very weak credit metrics." As reported by the TCR on Sept. 13, 2011, Moody's Investors Service downgraded the corporate family and probability of default ratings of Hovnanian Enterprises, Inc. to Caa2 from Caa1. The downgrade reflects Hovnanian's continued operating losses, weak gross margins, very high homebuilding debt leverage, and Moody's expectation that the weakness in year-over-year revenues, deliveries, and net new contracts experienced by the company will continue for the next one to two years. In addition, the downgrades acknowledge that Hovnanian's cash balance is weakening and cash flow generation is negative as it pursues new land opportunities, which represented about $300 million of investment over the first nine months of fiscal 2011. HYPERION FOUNDATION: Court Sides With Landlord in Contract Rift --------------------------------------------------------------- District Judge Keith Starrett rejected Hyperion Foundation Inc.'s claim that Academy Health Center Inc. has breached the implied covenant of good faith and fair dealing on account of the parties' lease agreement. According to the Court, AHC has acted as a typical landlord in attempting to protect its rights and interests in the facility. AHC is the owner and lessor of a nursing facility that is currently operated by Hyperion. The facility is a 120-bed nursing facility located at 6428 U.S. Highway 11, Lumberton, Mississippi. On July 15, 2008, AHC filed a Motion and/or Affidavit to Remove Tenant in the Justice Court of Lamar County, Mississippi in an effort to evict Hyperion from the premises and terminate the relationship between Hyperion and AHC due to Hyperion's alleged failure to pay rent. The case is ACADEMY HEALTH CENTER, INC. f/k/a ADVENTIST HEALTH CENTER, INC. PLAINTIFF/COUNTER-DEFENDANT, v. HYPERION FOUNDATION, INC.; ALTACARE MANAGEMENT CORPORATION DEFENDANTS/COUNTER- PLAINTIFFS, DOUGLAS K. MITTLEIDER; LONG TERM CARE SERVICES, INC.; HARRY M. CLARK; AND JOHN DOES 1-25 DEFENDANTS, Civil Action No. 2:10cv123-KS-MTP (S.D. Miss.). A copy of the Court's Feb. 16, 2012 Memorandum Opinion and Order is available at http://is.gd/XLKGsufrom Leagle.com. Academy Health Centers, Inc., formerly known as Adventist Health Center, Inc., is represented by Matthew D. Miller, Esq. -- MMiller@cctb.com -- at Copeland, Cook, Taylor & Bush, PA. Based in Lumberton, Mississippi, Hyperion Foundation, Inc., dba Oxford Health & Rehabilitation Center, filed a Chapter 11 bankruptcy petition (Bankr. S.D. Miss. Case No. 08-51288) on Aug. 5, 2008, one day before the scheduled hearing on its landlord's eviction motion. Douglas K. Mittleider, manager, filed the petition on the Debtor's behalf. Craig M. Geno, Esq. -- cmgeno@harrisgeno.com -- at Harris Jernigan & Geno, PLLC, serve as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and debts. INGRID E. TRENKLE: Case Summary & 7 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Ingrid E. Trenkle M.D., Inc. 124 E. Olive Ave. Redlands, CA 92373 Bankruptcy Case No.: 12-14260 Chapter 11 Petition Date: February 21, 2012 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Wayne E. Johnson Debtor's Counsel: Stephen R Wade, Esq. THE LAW OFFICES OF STEPHEN R WADE 400 N Mountain Ave Ste 214B Upland, CA 91786 Tel: (909) 985-6500 Fax: (909) 985-2865 E-mail: dlr@srwadelaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-14260.pdf The petition was signed by Ingrid E. Trenkle, president. INTEGRATED BIOPHARMA: Incurs $784,000 Net Loss in Dec. 31 Qtr. -------------------------------------------------------------- Integrated Biopharma, Inc., filed with the U.S. Securities and Exchange Commission a Form 10-Q disclosing a net loss of $784,000 on $7.24 million of net sales for the three months ended Dec. 31, 2011, compared with a net loss of $423,000 on $5.65 million of net sales for the same period during the prior year. The Company reported a net loss of $422,000 on $15.28 million of net sales for the six months ended Dec. 31, 2011, compared with a net loss of $424,000 on $12.09 million of net sales for the same period a year ago. The Company's balance sheet at Dec. 31, 2011, showed $11.53 million in total assets, $19.63 million in total liabilities, all current, and a $8.10 million total stockholders' deficiency. A full-text copy of the Form 10-Q is available for free at: http://is.gd/05JbWz About Integrated BioPharma Based in Hillside, N.J., Integrated BioPharma, Inc. (INBP.OB) -- -- http://www.healthproductscorp.us/ -- is engaged primarily in manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products. The Company's customers are located primarily in the United States. The Company was previously known as Integrated Health Technologies, Inc., and, prior to that, as Chem International, Inc. The Company was reincorporated in its current form in Delaware in 1995. The Company continues to do business as Chem International, Inc., with certain of its customers and certain vendors. The Company reported a net loss of $2.28 million in 2011 and a net loss of $5.53 million during the prior fiscal year. Friedman, LLP, in East Hanover, NJ, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a working capital deficiency, recurring net losses and has defaulted on its debt obligations. INVESTCORP BANK: Fitch Cuts Issuer Default Ratings to 'BB' ---------------------------------------------------------- Fitch Ratings has downgraded the Long-term Issuer Default Ratings (IDRs) of Investcorp Bank B.S.C. (Investcorp) and its affiliates to 'BB' from 'BB+', as well as the senior debt rating of Investcorp Capital Ltd. to 'BB' from 'BB+'. The Rating Outlook remains Negative. Investcorp's downgrade primarily stems from Fitch's concern regarding the firm's $838 million of debt maturities coming due within the next 14 months. 2012 debt maturities are relatively muted, but the bulk of obligations mature in March and April 2013. The ratings also incorporate Investcorp's high dependence on more volatile asset-based income (as opposed to stable fee income) for profits and payment of preference share dividends. Although preference share dividends are discretionary and subject to approval by shareholders and regulators, Fitch considers them as a component of fixed charges. The firm's balance sheet has meaningful co-investment concentrations and a significant proportion of high-cost preferred stock in the capital structure. Fitch's current ratings incorporate the expectation that Investcorp will successfully refinance and/or retire its upcoming debt maturities. The Negative Outlook reflects the potential liquidity risk of a refinancing where the capital structure results in a lack of maturity laddering for the significant amount of debt maturing in fiscal-year 2013 as well as the company's potentially volatile earnings stream. The rating outlook could be changed to Stable if Investcorp is able to successfully ladder its upcoming debt maturities at a reasonable cost. A significant liquidation of the firm's hedge fund positions could be used to retire upcoming debt maturities but it would potentially weaken the firm's earnings power, though Fitch recognizes this would be offset by lower fixed charges as well as lower reliance on and volatility of asset-based income. If the cost of refinancing its maturing obligations is onerous and profitability remains weak, the IDR could be downgraded further. Fitch does not envision upward ratings momentum over the medium- term until Investcorp develops a more predictable earnings stream, improves its debt maturity profile and reduces the concentration of co-investments. Cash and undrawn bank facilities totaled approximately $420 million at end-December 2011, which provides some cushion for the firm to fund some of the maturities. While the hedge fund co- investments ($623 million) have proven to be a source of liquidity in the past, Fitch believes that such realizations are unpredictable in difficult market conditions and liquidation of a material portion of the hedge funds co-investment over a short period of time could be problematic. Investcorp has a strong Gulf-based alternative investment franchise as well as adequate capital. However, Fitch believes that management's medium-term goals of substantially reducing balance sheet co-investments and bolstering fee-based income will be difficult to achieve in the face of adverse market conditions and modestly lower client funds under management. Although profitability rebounded in fiscal-year 2010 (ended June 30, 2010) and fiscal-year 2011 after severe losses in the financial crisis, gross and net fee-based income declined in absolute terms and as a percentage of total revenue. This negative trend reversed itself in first half 2012 but revaluation losses in the hedge fund co-investment portfolio resulted in a net profit of only $5 million for the period. Management is confident that 2H12 will benefit from the historically more active period for new fund investments and realizations. Client assets under management (AUM) have declined since fiscal- year-end 2010 and totaled $9.2 billion at end-December 2011 despite strong fund raising efforts. This reduction came in part due to asset value depreciation and in part due to realizations from the Corporate Investment and Real Estate portfolios. Co- investments in corporate investments, hedge funds and commercial real estate have approximated an above-average 20% of total AUM for several years (21% at end-December 2011). The five largest corporate investments within the U.S. and European business approximated 60% of that portfolio indicating relatively high concentration. Investcorp's Tier 1 regulatory capital ratio diminished slightly at end-December 2011 to 23.0% from 25.7% at fiscal-year 2011 but remains well above the regulatory minimum of 12%. Fitch Core Capital improved slightly to 12.3% due to a reduction in risk- weighted assets. Approximately 52% of equity is comprised of preference shares issued in fiscal-year 2009 at a 12% coupon. EBITDA coverage of interest and preferred dividends is relatively thin based on 1H12 results. While Fitch notes the political unrest in Investcorp's domicile in the Kingdom of Bahrain, Fitch believes that the risk is largely mitigated. Investcorp's group corporate structure contains force majeure provisions that transfer Bahraini shareholder interests to Investcorp S.A. in the Cayman Islands. Moreover, most assets and core operations are outside of the Persian Gulf area. Over time, disruption in the Gulf economies could make it more difficult for Investcorp to raise funds and place assets with Gulf-based clients. However, this risk is incorporated into Investcorp's IDR. Fitch has taken the following rating actions: Investcorp Bank B.S.C. -- Long-term Issuer Default Rating (IDR) downgraded to 'BB' from 'BB+'; Outlook Negative; -- Short-term IDR affirmed at 'B'; -- Viability Rating downgraded to 'bb' from 'bb+'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Investcorp S.A. -- Long-term IDR downgraded to 'BB' from 'BB+'; Outlook Negative; -- Short-term IDR affirmed at 'B'; -- Viability Rating downgraded to 'bb' from 'bb+'; -- Support Rating of '5' withdrawn. Investcorp Capital Ltd. -- Long-term IDR downgraded to 'BB' from 'BB+'; Outlook Negative; -- Short-term IDR affirmed at 'B'; -- Senior unsecured debt downgraded to 'BB' from 'BB+'; -- Support Rating of '5' withdrawn. IVOICE INC: Former President Inks Note Exchange Pact with ASRC -------------------------------------------------------------- Jerome Mahoney, the former president and controlling shareholder of Ivoice, Inc., entered into a Promissory Note Exchange Agreement with American Security Resources Corporation, whereby Mahoney transferred a $972,202 Promissory Note that was issued to Mahoney by the Ivoice on Aug. 13, 2002, to ASRC. In exchange for the iVoice Note, ASRC issued a new Promissory Note payable to Mahoney in the principal sum of $972,202. Upon the Promissory Note Exchange, voting control of the Company was transferred to ASRC based upon the convertibility of the iVoice Note into 972,202 shares of iVoice, Inc., Class B Common stock. These Class B Common Stock shares could vote the equivalent of 21,604,488,888 shares based upon the Class B to Class A conversion price of $.000045, or 70.38% of the total votes of all Class A and Class B shareholders. On Jan. 5, 2012, Jerome Mahoney and Frank Esser, as members of the Company's Board of Directors, elected Frank Neukomm, Robert C. Farr, and James Twedt as their replacements to serve as the Company's Board of Directors, effective upon the resignation of Messrs. Mahoney and Esser. About iVoice Matawan, N.J.-based iVoice, Inc. -- http://www.ivoice.com/-- is focused on the development and licensing of its proprietary technologies. To date the Company has filed fifteen (15) patent applications with the United States Patent and Trademark Office for speech enabled applications that the Company has developed internally. Of the patent applications the Company has filed, four (4) patents have been awarded. The Company reported a net loss of $826,318 on $171,527 of sales for the nine months ended Sept. 30, 2011, compared with a net loss of $719,745 on $142,996 of sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.36 million in total assets, $3.96 million in total liabilities, and a $2.60 million total stockholders' deficit. As reported by the TCR on April 25, 2011, Rosenberg Rich Baker Berman & Co, in Somerset, New Jersey, expressed substantial doubt about iVoice, Inc.'s ability to continue as a going concern. The independent auditors noted that the Company has incurred substantial accumulated deficits. JANE ADDAMS: Chicago Charity Files for Chapter 7 Bankruptcy ----------------------------------------------------------- Becky Yerak at Chicago Tribune reports that The Jane Addams Hull House Association, a 122-year-old Chicago charity, has filed for bankruptcy. Last month, the report relates, the organization announced that it was going out of business and would file soon for bankruptcy. Its Chapter 7 filing, for liquidation, estimated the number of creditors at 200 to 999, and liabilities of $10 million to $50 million, the report discloses. It has assets of $1 million to $10 million. According to the Tribune, the filing included a disclaimer that, "due to significant changes in the debtor's management," in December 2011, including the resignation of an interim chief executive officer and its chief financial officer, the bankruptcy records might be incomplete and contain inaccuracies. The hundreds of creditors listed include Blue Cross & Blue Shield of Illinois, Cook County's Bureau's of Economic Development and the Chicago Board of Education, the report discloses. The Jane Addams Hull House Association provided foster care, domestic violence counseling and job training to 60,000 children, families and community groups annually. JEWISH COMMUNITY: Wants to Hire Bederson & Company as Accountant ---------------------------------------------------------------- Jewish Community Center of Greater Monmouth County seeks permission from the Bankruptcy Court to employ Bederson & Company, LLP, as accountant to assist it with the preparation of financial statements, including but not limited to income tax returns and monthly operating reports as required by the Office of the United States Trustee. The Debtor will pay Bederson & Company at the firm's normal hourly rates: Partners $350 to $405 Directors $305 Managers $300 Supervisors $235 Senior Accountants $230 Semi Sr. Accountants $190 to $200 Staff Accountants $155 Para Professionals $140 To the best of the Debtor's knowledge, Bederson & Company is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Jewish Community Headquartered in Deal Park, New Jersey, Jewish Community Center Of Greater Monmouth County, A Not-For-Profit Corporation -- http://jccmonmouth.org/-- offers services, programs, events, activities, and facilities to Jewish families and individuals in Monmouth County. Jewish Community filed for Chapter 11 bankruptcy (Bankr. D. N.J. Case No. 11-44738) on Dec. 5, 2011. Judge Michael B. Kaplan presides over the case. Timothy P. Neumann, Esq., at Broege, Neumann, Fischer & Shaver, serves as the Debtor's bankruptcy counsel. In its petition, the Debtor estimated assets of $10 million to $50 million and debts of $1 million to $10 million. JIM PALMER: Dist. Court Has Jurisdiction on Navistar Lawsuit ------------------------------------------------------------ In the lawsuit, NAVISTAR FINANCIAL CORPORATION, and NAVISTAR LEASING COMPANY, Plaintiffs, v. JIM PALMER TRUCKING, aka JIM PALMER TRUCKING, INC.; JIM PALMER EQUIPMENT, INC; and JIM PALMER EQUIPMENT II, LLC, Defendants, No. CV 11-134-M-JCL (D. Mont.), Magistrate Judge Jeremiah C. Lynch denied the defendants' motion for summary judgment for lack of subject matter jurisdiction. Navistar brought the action alleging that the Palmer entities breached payment obligations established by confirmed Chapter 11 reorganization plans and clarified in a subsequent written agreement between the parties. The parties have stipulated that the total amount remaining to be paid by the Palmer entities to Navistar under the Confirmed Chapter 11 Plans of Reorganization and the Agreement is $305,509.68, net of payment received as of the date of their Stipulation. Because there is no acceleration clause in the confirmed Chapter 11 reorganization plans or subsequent Agreement, Navistar is not entitled to accelerate that debt. Navistar Financial Corporation is represented by Michael P. Talia, Esq., and Steven M. Johnson, Esq. -- mtalia@chjw.com and sjohnson@chjw.com -- at Church Harris Johnson & Williams. A copy of the Court's Feb. 17, 2012 Order is available at http://is.gd/ebmxBzfrom Leagle.com. About Jim Palmer Headquartered in Missoula, Montana, Jim Palmer Trucking Inc. -- http://www.jimpalmertrucking.com/-- offers truckload transportation of temperature-controlled cargo. The company operates throughout the US from terminals in Missoula, Montana; Salina, Kansas; and Tampa. The Debtor and two of its affiliates filed for separate Chapter 11 protection on July 15, 2008, (Bankr. D. Mont. Lead Case No. 08-60922). James A. Patten, Esq., represents the Debtors in their restructuring efforts. The Debtors have $11,897,554 in total assets and $12,089,808 in total debts. Judge Ralph B. Kirscher presides over the case. James A. Patten, Esq. -- japatten@ppbglaw.com -- at Patten Peterman Bekkedahl & Green, serves as the Debtors' counsel. On May 8, 2009, the Court entered orders confirming Chapter 11 reorganization plans for the Palmer entities in their bankruptcy cases. In particular, the Court confirmed the Amended Chapter 11 Plan of Reorganization of Jim Palmer Equipment II LLC. The Court also confirmed the Third Amended Chapter 11 Plan of Reorganization of Jim Palmer Trucking. The Court confirmed the Third Amended Chapter 11 Plan of Reorganization of Jim Palmer Equipment, Inc. The Palmer entities' bankruptcy cases were closed in July 2010. KM ASSOCIATES: Court Wants Agreed Order on Cash Use -------------------------------------------------- The Bankruptcy Court held a hearing Feb. 22 on KM Associates LLC's request for interim approval to use cash collateral, which is being challenge by its bank lenders. According to the court docket, the parties have been directed to submit an agreed order by Feb. 29, regarding the Debtor's use of Cash Collateral. CNB Bank also has agreed to withdraw a request filed earlier this month to terminate the automatic stay in the Debtor's case. At the Feb. 22 hearing, the Court also permitted the Debtor to assume an insurance contract with Traveler's. KM Associates' major source of funds with which to operate is from rental income from leased property of the Shops at Kanawha Mall located at 5707 MacCorkle Ave., Charleston, West Virginia. As of Jan. 30, 2012, Debtor's major assets had an approximate value of $17,000,000. In its Cash Collateral Motion, the Debtor said Thistle Financial Group, LLC, Citizens National Bank, CNB Bank, First United Bank & Trust, Merchants National Bank of Kittanning, Progressive Bank, NA, and Standard Bank PaSB currently hold perfected security interests in the form of a Deed of Trusts on the real estate located in the Shops at Kanawha Mall. The Debtor said if it is unable to use the cash balance on hand at the commencement of its case and the proceeds received during the case, it would be forced to terminate its operations. Since the filing of the petition, Debtor has only paid its obligations in a manner consistent with operating in the ordinary cause of business. As reported by the Troubled Company Reporter on Feb. 20, 2012, CNB Bank, Standard Bank PaSB First United Bank & Trust, Progressive Bank, N.A., Citizens Bank of West Virginia, Inc. and Farmers and Merchants Bank of Western Pennsylvania, National Association, are asking the Court to prohibit the Debtor's use of cash collateral. The lenders said the rental payments constitute "cash collateral" and they do not consent to the use of cash collateral. On July 20, 2007, KM Associates executed and delivered to Thistle Financial Group, as agent for the benefit of CNB Bank, Standard Bank PaSB, First United Bank & Trust, Progressive Bank N.A., Citizens National Bank, and Merchants National Bank of Kittaning, six construction and term loan promissory notes totaling $17,134,420. Pursuant to a forbearance agreement dated July 31, 2011, KM Associates acknowledged its defaults in the payment of the Indebtedness and its violation of certain covenants contained in the loan documents associated with the Notes and agreed to make monthly principal reduction payments in addition to regulator monthly instalment payments on the Indebtedness, beginning Aug. 1, 2011, with a final payment of all outstanding principal, accrued and unpaid interest and fees due on Oct. 31, 2011. KM Associates defaulted on its obligations under the Forbearance Agreement, and as of Jan. 31, 2012, remained indebted to the Lenders for $24,336,494. As a result of KM Associate's defaults under the terms of the Forbearance Agreement, the Lenders proceeded with foreclosure preparations relative to the Real Estate, with a sale having been set pursuant to the terms of the first priority Deed of Trust for Jan. 31, 2012. On Dec. 16, 2011, as a result of KM Associate's defaults under the Notes and the Forbearance Agreement, the Lenders began notifying tenants of the Real Estate that they were enforcing their rights under the Assignment of Rents and requested that the tenants re- direct rent payments to a lockbox account maintained with CNB Bank. The Debtor has repeatedly interfered with the Lenders right to receive the rents derived from the Real Estate by retaining rent payments that had been sent directly to the Debtor for the month of January 2012 and by contacting tenants directly to request that they not comply with the Lenders instructions, despite the Debtor's awareness that the Lenders notified tenants on Dec. 16, 2011 to re-direct rent payments to the account maintained with CNB Bank. About KM Associates KM Associates, LLC, filed a Chapter 11 bankruptcy petition (Bankr. S.D. W.Va. Case No. 12-bk-20041) on Jan. 30, 2012. Judge Ronald G. Pearson presides over the case. The petition was signed by Donald S. Simpson, managing member. The Debtor, a Single Asset Real Estate under 11 U.S.C. Sec. 101 (51B), disclosed assets of $17.3 million and liabilities of $26.5 million. Bank lenders The CNB Bank, Standard Bank PaSB First United Bank & Trust, Progressive Bank, N.A., Citizens Bank of West Virginia, Inc. and Farmers and Merchants Bank of Western Pennsylvania, National Association, are represented by Arthur M. Standish, Esq., and Kristian J. Jamieson, Esq., at Steptoe & Johnson PLLC. LA BUENA: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------ Debtor: La Buena Vida, Inc. 404 West Hand Avenue, Unit 200 Wildwood, NJ 08260 Bankruptcy Case No.: 12-14236 Chapter 11 Petition Date: February 21, 2012 Court: United States Bankruptcy Court District of New Jersey (Camden) Judge: Judith H. Wizmur Debtor's Counsel: Carrie J. Boyle, Esq. LAW OFFICE OF SCOTT H. MARCUS & ASSOC. 121 Johnson Road Turnersville, NJ 08012 Tel: (856) 227-0800 Fax: (856) 227-7939 E-mail: cboyle@marcuslaw.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/njb12-14236.pdf The petition was signed by Jon Paul Paxton, president. LAND CONSERVANCY: Congregation Wins Tiff Over Elkins Park Property ------------------------------------------------------------------ Bankruptcy Judge Eric L. Frank granted the request of Dominican Congregation of St. Catherine De'Ricci for modification of the automatic stay to permit the Congregation to exercise all of its in rem rights and remedies under applicable nonbankruptcy law with respect to the property located at 1750 Ashbourne Road, in Elkins Park, Pennsylvania. Judge Frank, meanwhile, denied a request by Land Conservancy of Elkins Park, Inc., to vacate a prior court order approving the Debtor's revised settlement agreement with the Congregation. On Dec. 22, 2011, the Court approved the revised settlement agreement which resolves a dispute between the parties relating to a debt owed to the Congregation by the Debtor and the parties' competing claims to ownership of the Elkins Park property. The Revised Settlement Agreement provides, inter alia, for: (1) a release of all claims held by the Debtor against the Congregation; (2) the allowance of the Congregation's allowed secured claim in an agreed amount; (3) the satisfaction of the Congregation's claim, with interest at an agreed rate, through a payment schedule requiring payments by the Debtor of $300,000 on or before Dec. 31, 2011, April 30, 2012 and Sept. 15, 2012, with a balloon payment for the balance of the claim to be paid on or before Dec. 31, 2012; (4) time being of the essence and no right to cure or grace period in the event of a payment default by the Debtor; (5) upon completion of the Debtor's payment obligations, the Congregation's consent to the entry of an order setting aside its deed to the Property (thereby restoring title to the Property to the Debtor); (6) specified remedies in the event of a default by the Debtor, including (i) termination of the Congregation's obligation to consent to the entry of an order setting aside its deed to the Property; and (ii) surrender of the Property by the Debtor to the Congregation. The Debtor entered into the Revised Settlement Agreement with the expectation that its initial payment to the Congregation of $300,000 due on Dec. 31, 2011 would be funded from the refund of a deposit the Debtor had previously paid to a prospective lender Atlantic Rim Funding. However, Atlantic Rim failed to return the deposit to the Debtor, as a result of which the Debtor defaulted on its Dec. 31, 2011 payment obligation under the Revised Settlement Agreement. The Congregation sought relief from the automatic stay to exercise all of it remedies relating to the Property including actions necessary to eject the Debtor from possession. The Debtor countered with the motion to vacate the prior order. The Debtor argues that the Revised Settlement Agreement is unenforceable (i) because neither party executed it; and (ii) under the doctrine of impracticability. Even if the Revised Settlement Agreement is enforceable, the Debtor said the Court should exercise its equitable discretion to deny immediate relief from the automatic stay. At an evidentiary hearing on Feb. 15, 2012, the Court concluded that the Revised Settlement Agreement is enforceable notwithstanding the parties' failure to execute the written agreement; (2) the doctrine of impracticability does not bar enforcement of the Revised Settlement Agreement; and (3) cause exists to grant the Congregation relief from the automatic stay. The case before the Court is LAND CONSERVANCY OF ELKINS PARK, INC., Plaintiff, v. DOMINICAN CONGREGATION OF ST. CATHERINE DE'RICCI, Defendant, Adv. Proc. No. 10-0449 (Bankr. E.D. Pa.). A copy of the Court's Feb. 21, 2012 Order is available at http://is.gd/CtAG1Mfrom Leagle.com. Land Conservancy of Elkins Park, Inc., filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 10-19522) on Nov. 11, 2010, listing $1 million to $10 million in assets and debts. Judge Eric L. Frank presides over the case. Edmond M. George, Esq. -- edmond.george@obermayer.com -- at Obermayer Rebmann Maxwell & Hippel, LLP, serves as the Debtor's counsel. The petition was signed by David D. Dobson, president. LEHMAN BROTHERS: Committee Members Seek $26.3MM in Fees, Expenses ----------------------------------------------------------------- Members of the Official Committee of Unsecured Creditors in Lehman Brothers' Chapter 11 cases and certain indenture trustees jointly ask the United States Bankruptcy Court for the Southern District of New York to approve their omnibus application for the payment of (i) $25,358,967 in fees for services rendered from the Petition Date through December 31, 2011, and (ii) $932,148 in expenses incurred in connection with rendering the services during the same period, for a total award of $26,291,116. The Committee Members are The Bank of NY Mellon, Elliott Management Corp., Mizuho Corporate Bank, Ltd., Metropolitan Life Insurance Co., Shinsei Bank, Limited, U.S. Bank National Association, The Vanguard Group and Wilmington Trust Company. Wilmington, BNYM, and US Bank serve as indenture trustees for various notes issued by Lehman Brothers Holdings Inc. Representing the Applicants, Michael B. Hopkins, Esq., at Covington & Burling LLP, in New York -- mhopkins@cov.com -- asserts that the confirmation of the Debtors' Plan of Reorganization was made possible through the efforts of many constituents and their professionals, prominently the Applicants, whose tireless efforts in connection with every aspect of the Chapter 11 Cases resulted in the Debtors' commitment to pay all the reasonable fees and expenses, including attorneys' fees, incurred by the Applicants in connection with the cases. This commitment is memorialized in Section 6.7 of the Plan. The payments contemplated by the Fee Payment Provision remain subject to the approval of the Court, which should be granted under the "reasonableness" standard of Section 1129(a)(4) of the Bankruptcy Code. Based upon the time and expense records set forth in the application, the Court should have little difficulty concluding that the Applicants' Fees and Expenses are "reasonable," Mr. Hopkins contends. He adds that the Fees and Expenses were incurred by the Applicants in the course of meeting the extraordinary demands the Chapter 11 Cases have made on their time and efforts, and are clearly within the scope of the fees and expenses contemplated by the Fee Payment Provision. Summary of the Fees and Expenses: Committee Member Fees Expenses Total ---------------- --------- -------- ---------- Wilmington Trust Company - Covington & Burling $7,788,744 $68,759 $7,857,503 The Bank of NY Mellon - Sheppard Mullin 4,054,024 35,519 4,089,544 Mizuho Corporate Bank Ltd. - Stroock & Stroock & Lavan 2,863,196 17,742 2,880,938 Wilmington Trust Company 2,569,577 696,949 3,266,526 U.S. Bank National Assoc. - Sullivan Worcester, LLP 1,752,369 12,928 1,765,297 The Vanguard Group - Arent Fox LLP 1,346,234 21,221 1,367,455 Elliott Management Corp. - Greenberg Traurig, LLP 1,308,655 53,841 1,362,497 Elliot Management Corp. - Kleinberg, Kaplan, Wolff & Cohen, P.C. 1,142,094 11,425 1,153,519 U.S. Bank National Assoc. 1,051,412 0 1,051,412 The Bank of NY Mellon - Administration Fee 490,740 0 490,740 Wilmington Trust Company - Loeb & Loeb, LLP 394,029 8,208 402,237 Metropolitan Life Ins. Co. 254,402 0 254,402 U.S. Bank National Assoc. - Shipman & Goodwin, LLP 111,232 1,217 112,449 Wilmington Trust Company - Citibank 96,000 0 96,000 Shinsei Bank, Limited - Vinson & Elkins LLP 71,460 1,614 73,074 U.S. Bank National Assoc. - Edwards Angell Palmer & Dodge, LLP 64,796 2,721 67,517 ---------- ------- ---------- Grand Total $25,358,967 $932,148 $26,291,116 A hearing will be held on February 22, 2012, to consider the application. U.S. Trustee, Fee Committee Object A lawyer for the U.S. Trustee, a Justice Department agency that oversees bankruptcy cases, has filed court papers opposing the application by members of the Official Committee of Unsecured Creditors. Susan Golden, a trial attorney, criticized the committee members for not seeking approval of their application under Section 503(b) of the U.S. Bankruptcy Code. Section 503(b) provides a procedure for the approval of fees and expenses incurred by a committee member. "Notwithstanding this specific statutory provision that governs the applicants' claims, the applicants urge the court to bypass Section 503(b)," Ms. Golden said. According to the lawyer, the committee members sought approval of their application under another provision since they "cannot recover the majority of the fees and expenses" under Section 503(b) either because the provision does not allow them or they failed to prove that they have made substantial contribution in Lehman's bankruptcy cases. Ms. Golden also said that although a committee member is entitled to an administrative expense claim for expenses it incurs, it is not entitled to an administrative expense claim for its professional fees. A committee, which oversees the fees and expenses of Lehman bankruptcy professionals, also criticized the application, saying the fees and expenses requested have not yet been reviewed by the committee for reasonableness. Court Approves Fee Applications In another development, the U.S. Bankruptcy Court for the Southern District of New York approved the application of Weil Gotshal & Manges LLP for interim allowance of fees in the sum of $35,848,624 for services provided for the period October 1, 2010 to January 31, 2011. The bankruptcy court also approved another application by the firm for interim allowance of $35,381,916 in fees for the period February 1 to May 31, 2011. Separately, The O'Neil Group LLC sought allowance of $269,914 in fees and reimbursement of $19,636 in expenses for the period October 1, 2011 to January 31, 2012. 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: Wants to Subpoena Treasury's Geithner ------------------------------------------------------ Lehman Brothers Holdings Inc. and its creditors said they want to subpoena Treasury Secretary Timothy Geithner to question him under oath over allegations J.P. Morgan Chase & Co. illegally siphoned billions of dollars from the company before its bankruptcy filing, Dow Jones Daily Bankruptcy Review reported. Lawyers for Lehman subpoenaed Mr. Geithner as part of its lawsuit against J.P. Morgan, claiming the bank's chief executive Jamie Dimon and other top executives used inside knowledge to take advantage of the company as its financial state worsened, according to the report. Lehman filed the lawsuit to recover billions of dollars that it allegedly seized as collateral. J.P. Morgan, which served as the company's main clearing bank in the 2008 financial crisis, allegedly threatened to discontinue its services unless the company posted excessive collateral. Meanwhile, the Official Committee of Unsecured Creditors alleged that Mr. Geithner has refused to comply with an August 9, 2011 subpoena. It wants a court to force him to give a deposition by a March 16 deadline, Dow Jones reported. The Committee said Mr. Geithner had more than 35 phone conversations with Richard Fuld, former Lehman chief executive, and more than 10 with Mr. Dimon in the week before Lehman's bankruptcy filing, according to the report. "The Department of the Treasury now turns its back on the President's commitment to transparency as it refuses to provide the creditors of Lehman Brothers with key evidence from the current Secretary of the Treasury, Timothy F. Geithner, who was a crucial witness to certain key events at issue in the creditors' litigation with JPMorgan Chase Bank, N.A," the Committee said. The Committee said that it also wants to question then-Treasury Secretary Hank Paulson, but that he too has turned the request down. It said it will handle the Paulson matter separately, Dow Jones 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: CDO Holders Sue LBSF, BNY ------------------------------------------ Holders of notes in synthetic collateralized debt obligations created by Lehman Brothers Special Financing Inc. filed a lawsuit in the U.S. Bankruptcy Court for the Southern District of New York to compel the company to comply with a ruling from a U.K. court that reached a result at odds with the bankruptcy court, Bloomberg News reported. The dispute involves a so-called flip clause where Lehman would receive proceeds of collateral in ordinary circumstances. The flip clause agreements provided that noteholders instead would receive the collateral first if Lehman would go bankrupt. The flip clauses thus turned profits for the company into losses as a result of bankruptcy. Lehman has argued in the bankruptcy court that the flip clause violates the so-called ipso facto clause in U.S. bankruptcy law, which provides that companies can't forfeit rights or property simply on account of filing bankruptcy. In another Lehman case, U.S. Bankruptcy Judge James Peck ruled in January 2010 that flip clauses aren't enforceable in bankruptcy. Meanwhile, the noteholders in the so-called Dante program sued Lehman in the High Court of Justice in the U.K. because their particular notes were governed by U.K. law and Lehman had consented to being sued in England. The noteholders won in the trial court. The ruling was affirmed all the way up to U.K.'s Supreme Court. The noteholders filed the lawsuit on February 8 in the bankruptcy court, asking for enforcement of the U.K. judgment. They immediately filed papers seeking to have the lawsuit removed from the bankruptcy court and lodged in U.S. District Court in New York, Bloomberg News reported. The noteholders contend that the lawsuit doesn't involve legal questions governed by bankruptcy law. Instead, they see the case turning on issues of international law, the interpretation of agreements under U.K. law, and the question of enforcing a ruling by an English court in the U.S, according to the report. The lawsuit is Belmont Park Investments Pty Ltd. v. Lehman Brothers Special Financing Inc. (In re Lehman Brothers Holdings Inc.), 12-01045, 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: Fontainebleau Counterclaims Stay Put ----------------------------------------------------- A New York bankruptcy judge denied Lehman Brothers Holdings Inc.'s bid to dismiss counterclaims filed by developer Jeffrey Soffer and his Fontainebleau Resorts LLC over a $400 million construction loan, according to a February 15 report by Law360. Soffer and Fontainebleau filed the fraud counterclaims in September, alleging Lehman's misrepresentations about its financial condition before its bankruptcy filing induced them to enter into a loan arrangement with the lender, which in turn caused Fontainebleau and related properties to fold, 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: Barclays Asks Court to Enforce $50-Bil. Deal ------------------------------------------------------------- Barclays Plc asked a U.S. district judge to enforce a $50 billion deal struck in 2008 to buy Lehman Brothers Holdings Inc.'s North American assets, saying it would jeopardize future sales of distressed companies if contracts and promises were not honored, Bloomberg News reported. More than three years after the purchase, Barclays continues to fight the remnants of Lehman's brokerage over about $3 billion in assets, which it says belong to the U.K. bank according to sale contracts and the company's promises. The trustee liquidating the Lehman brokerage says a key contract was altered to benefit Barclays, and he needs the assets to pay the remaining brokerage customers. Both parties appealed a bankruptcy court's rulings on the assets and are preparing for a hearing in a U.S. district court, Bloomberg News reported. In a court filing, Barclays pressed its claim to about $2 billion in margin assets, saying it would never have taken on Lehman's trading positions without the margin backing them. The U.K. bank also claimed $769 million in other assets. Meanwhile, the brokerage trustee demanded $1.1 billion in so- called "clearance box assets" held to clear trades, which Barclays agreed to give up in the 2008 credit crisis, according to the report. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Additional units, Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC, sought for bankruptcy protection in December 2009 or more than a year after LBHI and its other affiliates filed their bankruptcy cases. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on Sept. 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) LEHMAN BROTHERS: Court Grants Ch. 15 Protection to Australian Unit ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York granted bankruptcy protection to Lehman Brothers Australia Ltd., a move that protects the company from lawsuits or creditor attempts to seize its U.S. assets, according to a February 15 report by Fox Business. Under Chapter 15, a feature added to the U.S. bankruptcy code in 2005, a company such as Lehman Australia can seek a U.S. bankruptcy court's recognition of its foreign bankruptcy case as the main proceeding. In its bankruptcy petition last month, Lehman Australia said it has $1.3 billion in claims against Lehman Brothers Holdings Inc. for losses related to structured finance arrangements known as synthetic collateralized-debt obligations or CDOs, Fox Business reported. Investors in Australia are suing the Lehman unit over losses associated with synthetic credit-linked notes issued by a Lehman- sponsored vehicle called Dante. Lehman Australia said it may have claims against its U.S.-based parent if investors succeed in the lawsuit, according to the report. 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: Aussie Court Reopens Investors' Class Suit ----------------------------------------------------------- Elisabeth Sexton, writing for The Sydney Morning Herald, reported that a class action by councils, charities and churches against the liquidators of Lehman Brothers Australia has been reopened in the Federal Court to allow fresh evidence about the value of the complex structured finance products at its heart. Justice Steven Rares finished hearing the case in June, but allowed new material to be tendered about the extent of damages claimed by the 72 members of the class action. All bought synthetic collateralized debt obligations, or CDOs, from the Australian arm of the collapsed investment bank. They allege misleading conduct, breach of contract, breach of fiduciary duty and negligence. At a hearing on Feb. 3, Justice Rares was told that since the case finished eight months ago, some of the CDOs have failed, with no prospect of any return to investors. Others have matured and repaid their full face value to investors, leaving no losses to claim in court. Three more are due to mature in the next eight weeks. The task of assigning values to the 39 CDOs bought by class action members has also been complicated by conflicting findings by courts in Britain and the United States over the contractual documents used by Lehman Brothers for many of the CDOs it arranged before its collapse in September 2008. Investors, including some of the members of the Australian class action, won a landmark case over a US subsidiary, Lehman Brothers Special Financing Inc, in the British Supreme Court in July. But the trustee involved, Bank of New York Mellon, has not yet paid the investors. A letter to some of the councils was tendered to Justice Rares on Feb. 3, in which BNY Mellon said it could not release the funds because "the competing claims have not been determined". In contrast to the British judgment, Judge James Peck in the US Bankruptcy Court has ruled that the trustee is obliged to return the funds to Lehman Brothers Special Financing. The Australian liquidators, Stephen Parbery and Marcus Ayres of the insolvency firm PPB Advisory, want Justice Rares to postpone putting a value on the CDOs affected by the overseas litigation, all issued as part of what Lehman called the Dante program. The liquidators' barrister, John Sheahan, SC, said if the judge rejected this suggestion, he should assume, in line with the British Supreme Court decision, that investors would recoup the face value of their Dante notes. Mr. Sheahan said an English subsidiary of BNY was holding the investors' property in England and the investors could issue a letter of demand based on the court's ruling. An alternative course would be to replace the trustee. Noel Hutley, SC, for the class action, said Lehman Brothers Australia held some Dante notes on its own account yet the liquidators had taken no such action to force the trustee to comply with the British judgment. Instead they had recently tried to break the impasse in the United States by seeking to intervene in Judge Peck's case, he said. "Rational players in the marketplace accept that Judge Peck's judgment is a real impediment to what's going on," he said. LIMA'S TASTE: Blames Economic Downturn for Bankruptcy Filing ------------------------------------------------------------ Lisa Fickenscher at Crain's New York Business reports that Lima's Taste Ceviche Bar and Restaurant in the West Village, New York, filed on Feb. 20, 2012, for Chapter 11 bankruptcy protection. According to the report, co-owner Jason Godfrey said the restaurant, located at the corner of Christopher and Bedford streets, was hurt by the economic downturn. Its gross revenues declined to $500,000 last year from $700,000 in 2009. The report notes the restaurant's liabilities are between $100,000 and $500,000, and its assets are as much as $50,000. Randall S.D. Jacobs, Esq., represents the restaurant. LOS ANGELES DODGERS: Cleared by Judge to Move Forward With Plan --------------------------------------------------------------- A bankruptcy judge cleared the Los Angeles Dodgers to advance their plan for a new owner to take the ball club out of Chapter 11. U.S. Bankruptcy Judge Kevin Gross on Wednesday approved the disclosure statement explaining the Los Angeles Dodgers LLC's Chapter 11 bankruptcy plan. Max Stendahl at Bankruptcy Law360 notes that the plan disclosures were approved despite a barrage of objections, including one by a fan who suffered severe injuries last year at a baseball game. The Plan contemplates that creditors will be unimpaired and will be paid in full. Hence, only one creditor -- the parent of a holding company for the team -- os vote on the plan by March 16, according to Law360. A statement by the team said, "The Los Angeles Dodgers are pleased that the U.S. Bankruptcy Court has approved its revised Disclosure Statement, which keeps the Dodgers on track to emerge from Bankruptcy as planned on April 30. Bidders have shown tremendous interest in the opportunity to purchase the Dodgers and related assets, and the Dodgers look forward to a very successful conclusion to their bankruptcy case." As reported in the TCR on Jan. 24, 2012, the Debtors filed a Plan that resolves fully the financial challenges confronting the Dodgers that precipitated the filing by the Debtors of the Chapter 11 cases through a sale of all of the equity of the Dodgers, which will result in a change in ownership of the team. The plan contemplates that all creditor claims will be satisfied in full either through their assumption by the reorganized debtors or by the payment of cash from proceeds from the sale of the Dodgers. About Los Angeles Dodgers Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a professional Major League Baseball club in the Los Angeles metropolitan area. Frank McCourt, a Boston real-estate developer who unsuccessfully bid for the Boston Red Sox, bought the Dodgers from Rupert Murdoch's Fox Entertainment Group, Inc. in 2004 for $330 million. Mr. McCourt also bought the Dodgers Stadium from Fox for $100 million. Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB Commissioner Bud Selig rejected a television deal with News Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for June 30 and July 1. Fox Sports has exclusive cable television rights for Dodgers games until the end of 2013 baseball season. Chapter 11 filings were also made for LA Real Estate LLC, an affiliated entity which owns Dodger Stadium, and three other related holding companies. The petition estimates assets of up to $500 million and debts of up to $1 billion. In its schedules, the LA Dodgers baseball club disclosed $77,963,734 in assets and $4,695,702 in liabilities. LA Real Estate LLC disclosed $161,761,883 in assets and $0 in liabilities. According to Forbes, the team is worth about $800 million, making it the third most valuable baseball team after the New York Yankees and the Boston Red Sox. Judge Kevin Gross presides over the case. Lawyers at Young, Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Public relations specialist Kekst and Company has been hired for crisis support. Covington & Burling LLP serves as special counsel. An official committee of unsecured creditors has been appointed in the case. The panel has tapped Lazard Freres & Co. as financial adviser and investment banker, and Morrison & Foerster LLP and Pinckney, Harris & Weidinger, LLC as counsel. The LA Dodgers is the 12th sports team in North America to have sought bankruptcy protection. The reorganization is being financed with a $150 million unsecured loan from the Commissioner of Major League Baseball. The loan gives the Commissioner few of the controls lenders often demanded from bankrupt companies. MACROSOLVE INC: Issues Convertible Debentures and Warrants ---------------------------------------------------------- MacroSolve, Inc., on Feb. 17, 2012, issued (i) convertible debentures in the aggregate principal amount of $500,000 and (ii) Series C warrants to purchase shares of common stock of the Company to certain investors for aggregate cash proceeds of $180,000 and the exchange of $320,000 in previously issued promissory notes. There were four Investors, who are all directors of the Company. The Debentures accrue interest at an annual rate of 8%, which will be paid quarterly exclusively from the Debenture Account. Principal on the Debentures will be paid quarterly, on a pro rata basis with all Debentures, as the Debenture Account permits, but only after all accrued interest has been paid. The Debenture Account is a bank account established with a financial institution for the deposit of 25% of any funds the Company receives from any judgment or settlement in any patent infringement cases involving United States Patent Number 7,822,816. The Debentures mature on Dec. 31, 2019, to the extent not previously repaid. Any Debentures that are outstanding on the maturity date that have not been repaid from the Debenture Account will be repaid by the issuance of those number of shares of Common Stock equal to the outstanding principal or accrued interest divided by the volume weighted average price per share of the Company's Common Stock for the three trading days prior to the maturity date. The Investor has the right, at any time after Dec. 31, 2017, to require the Debentures to be repaid in full by cash from the Debenture Account, and to the extent such cash is not available, by shares of Common Stock at the Conversion Price. The Company has the right, at any time after Dec. 31, 2018, to require the Debentures to be repaid in full by cash, shares of Common Stock at the Conversion Price, or a combination of cash and shares of Common Stock. The Warrants are exercisable at an exercise price of $0.10 per share until the earlier of Dec. 31, 2019, or when the Investor no longer holds any Debentures. The Warrants are also exercisable on a cashless basis at any time. The number of shares of Common Stock issuable upon exercise of the Warrants is equal to 50% of the then outstanding principal amount of the Debenture held by such Investor divided by the Conversion Price. About MacroSolve, Inc. Tulsa, Okla.-based MacroSolve, Inc. (OTC BB: MCVE) -- http://www.macrosolve.com/-- is a technology and services company that develops mobile solutions for businesses and government. A mobile solution is typically the combination of mobile handheld devices, wireless connectivity, and software that streamlines business operations resulting in improved efficiencies and cost savings. As reported in the Troubled Company Reporter on April 7, 2010, Hood Sutton Robinson & Freeman CPAs, P.C., expressed substantial doubt about the Company's ability to continue as a going concern, following its 2009 results. The independent auditors noted of the Company's recurring losses from operations and net capital deficiency. The Company reported a net loss of $1.84 million on $928,674 of net sales for the nine months ended Sept. 30, 2011, compared with a net loss of $1.42 million on $533,223 of net sales for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $2.30 million in total assets, $3.20 million in total liabilities and a $898,737 total stockholders' deficit. MARKETING WORLDWIDE: Incurs $2.1 Million Net Loss in Dec. 31 Qtr. ----------------------------------------------------------------- Marketing Worldwide Corporation filed with the U.S. Securities and Exchange Commission a Form 10-Q reporting a net loss of $2.06 million on $223,589 of revenue for the three months ended Dec. 31, 2011, compared with net income of $526,238 on $594,509 of revenue for the same period a year ago. The Company's balance sheet at Dec. 31, 2011, showed $1.50 million in total assets, $7.90 million in total liabilities, $3.50 million in Series A convertible preferred stock, and a $9.90 million total stockholders' deficiency. A full-text copy of the Form 10-Q is available for free at: http://is.gd/YMZnE4 About Marketing Worldwide Based in Howell, Michigan, Marketing Worldwide Corporation operates through the holding company structure and conducts its business operations through its wholly owned subsidiaries Colortek, Inc., and Marketing Worldwide, LLC. Marketing Worldwide, LLC, is a complete design, manufacturer and fulfillment business providing accessories for the customization of vehicles and delivers its products to large global automobile manufacturers and certain Vehicle Processing Centers primarily in North America. MWW operates in a 23,000 square foot leased building in Howell Michigan. Colortek, Inc., is a Class A Original Equipment painting facility and operates in a 46,000 square foot owned building in Baroda, which is in South Western Michigan. MWW invested approximately $2 million into this paint facility and expects the majority of its future growth to come from this business. The Company reported a net loss of $2.27 million for the year ended Sept. 30, 2011, compared with a net loss of $2.34 million during the prior year. RBSM LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's 2011 financing results. The independent auditors noted that the Company has generated negative cash flows from operating activities, experienced recurring net operating losses, is in default of loan certain covenants, and is dependent on securing additional equity and debt financing to support its business efforts. MAYSVILLE INC: Chapter 11 Reorganization Case Dismissed ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida ordered and adjudged that the Chapter 11 case of Maysville, Inc. is dismissed. The Clerk of the Court is instructed to close the case and deem all pending motions denied as moot. As reported in the Troubled Company Reporter on Jan. 3, 2012, the Court denied the Debtor's emergency motion to reconsider order of dismissal and to reinstate original deadline to post confirmation funds. The judge said in an order last year that the case would be dismissed if the deposit of $2.1 million was not made by Oct. 27, 2011. About Maysville, Inc. Maysville, Inc., is the record title holder of a multi parcel property in Miami-Dade County, Florida. The property consists of six apartment buildings with 133 apartment units. The property also includes 21 unsold units in the Platinum Condominium. The Debtor is owned and operated by its principals, Alex Guillermo Redondo, Aurora Brito de Redondo, Carmen Redondo, Jhosmar Redondo and Algemiro Redondo, Jr., who have owned and operated the property for 24 years. Maysville filed its second voluntary petition under Chapter 11 on Aug. 11, 2011, with the U.S. Bankruptcy Court for the Southern District of Florida (Miami) before the Hon. Laurel M. Isicoff. The bankruptcy case is Maysville, Inc., Case No. 11-32532. Jeffrey P. Bast, Esq., at Bast Amron LLP, in Miami, Florida, serves as the Debtor's bankruptcy counsel. Jeffery J. Pardo, Esq., at Pardo Gainsburg P.L., in Miami, Florida, is the Debtor's litigation counsel. The Debtor disclosed $17,590,927 in assets and $25,076,637 in liabilities. In the first voluntary petition for bankruptcy (Bankr. S.D. Fla. Case No. 10-28244) which was filed on June 28, 2010, the Bankruptcy Court granted Mellon United National Bank n/k/a MUNB Loan Holdings, LLC, relief from the automatic stay to continue the foreclosure litigation. On Aug. 24, 2010, Mellon obtained a final summary judgment in the sum of $24,489,076 and a judgment of foreclosure was entered. The final judgment was later amended on May 3, 2011, to reflect a credit of $583,045 reducing the judgment to $23,906,031.62. On Jan. 28, 2011, the first Chapter 11 case was dismissed by the Court because the Debtor failed to timely file a confirmable plan. The order of dismissal precluded the Debtor from commencing a case for a six month period which expired on July 28, 2011. Mellon's foreclosure sale was scheduled to occur on Aug. 12, 2011. On Aug. 10, 2011, Mellon assigned its interest in its foreclosure judgment and the right to credit bid at the foreclosure sale to Fifteen Encore Platinum, LLC. MCDONALD BROTHERS: Has Final OK to Use BB&T Cash Collateral ----------------------------------------------------------- The Bankruptcy Court entered a final order authorizing McDonald Brothers, Inc., to use cash collateral, in which Branch Banking and Trust Company asserts an interest, to pay expenses that accrue prior to and including Dec. 20, 2011, for the purposes and subject to the sub-limits as set forth in the budget for that period, not to exceed 110% on a line-item cumulative basis, pending further orders of the Court after notice and hearing. The Debtor may not use Cash Collateral for any purpose other than operations in the ordinary course of business or the payment of allowed administrative fees, costs, or expenses, irrespective of whether such purpose would be proper under applicable law, without further notice and hearing. BB&T has consented to the continued use of cash collateral in accordance with the Budget and subject to the provisions of the prior orders. A full-text copy of the Final Order is available for free at: http://bankrupt.com/misc/MCDONALD_CashFinOrd.pdf About McDonald Brothers McDonald Brothers, Inc., in Southern Pines, North Carolina, is a building materials and services supplier that has been a family- owned and operated business since 1885. It has three business operations in North Carolina located in the towns of Southern Pines, Siler City, and West End. It sells its products and services throughout the south-central region of North Carolina and northeastern South Carolina. Over the past few years, its business has declined as a result of the depressed real estate market and the recession. McDonald Brothers filed for Chapter 11 bankruptcy (Bankr. M.D.N.C. Case No. 11-81363) on Aug. 22, 2011. John A. Northen, Esq., and Stephanie Osborne-Rodgers, Esq., at Northen Blue, LLP, in Chapel Hill, N.C., serve as the Debtor's counsel. In its schedules, the Debtor disclosed $10,540,708 in assets and $10,138,358 in liabilities. METHANEX CORP: Moody's Assigns 'Ba1' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service assigned a Ba1 rating to Methanex Corporation's (Methanex) new notes due 2022. Methanex's Ba1 Corporate Family Rating (CFR) and existing debt ratings were unaffected. Proceeds from the new debt issue will be used to repay the $200 million of notes maturing in August 2012 and for general corporate purposes. The outlook is positive. The following summarizes the ratings: Methanex Corporation Ratings assigned $250 million senior unsecured notes due 2022 -- Ba1 (LGD4, 61%) Shelf (senior unsecured debt) -- (P)Ba1 Existing Ratings: Corporate Family Rating -- Ba1 Probability of Default Rating -- Ba1 $150 million senior unsecured notes due 2015 - Ba1 (LGD4, 61%) $200 million senior unsecured notes due 2012 - Ba1 (LGD4, 61%) ** Outlook -- Positive ** Rating to be withdrawn RATINGS RATIONALE The outlook on the Methanex's ratings was recently moved positive, reflecting Methanex's strong leverage and financial strength credit metrics supportive of a higher rating, its 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 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. MF GLOBAL: Trustee Proposes Freeh Sporkin as Regulatory Counsel --------------------------------------------------------------- Louis J. Freeh, the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates, seeks the Bankruptcy Court's permission to employ Freeh Sporkin & Sullivan, LLP, as his investigative counsel, nunc pro tunc to Nov. 28, 2011. As the Chapter 11 Trustee's investigative counsel, Freeh Sporkin will: (a) represent the Chapter 11 Trustee in his dealings with various regulatory authorities, including but not limited to the Commodity Futures Trading Commission, the Securities and Exchange Commission, and the Chicago Mercantile Exchange; (b) represent the Chapter 11 Trustee in his dealings with various prosecutors' offices and law enforcement authorities; (c) represent the Chapter 11 Trustee in his dealings with various U.S. House and Senate Committees and Sub- Committees; (d) coordinate, on behalf of the Chapter 11 Trustee, information requests and responses to all regulators, Congressional committees, prosecutors' offices, lender groups, and other parties-in-interest in the bankruptcy process; (e) in the execution of the Chapter 11 Trustee's duties under Section 1106(a)(3) of the Bankruptcy Code, assisting the Chapter 11 Trustee in his investigation of the acts and conduct of the Debtors including, but not limited to, scheduling, preparing for, and conducting witness interviews in connection with the Chapter 11 Trustee's investigations, provided that Freeh Sporkin and Kasowitz, Benson, Torres & Friedman, LLP will make every effort to reduce or avoid duplication of work as Kasowitz Benson transitions out of the Debtors' Chapter 11 cases; and (f) assist the Chapter 11 Trustee in undertaking additional tasks that the Court may direct. The Chapter 11 Trustee and Freeh Sporkin have agreed that in connection with its services the firm will be paid its customary hourly rates, less a discount of 10%. Freeh Sporkin will also be reimbursed for expenses incurred. The principal professionals expected to provide investigative counsel services to the Chapter 11 Trustee and their hourly rates are: Name/Title Rate per Hour ---------- ------------- Louis J. Freeh $850 Partner Thomas McC. Souther, Esq. $750 Partner souther@freehgroup.com Thomas O. Melvin, Esq. $300 Associate melvin@freehgroup.com The current hourly rates for other Freeh Sporkin professional staff members, who may be retained in these Chapter 11 Cases, are as set forth: Title Rate per Hour ----- ------------- Partners $600 to $750 Senior Counsel $600 to $750 Associates $275 to $500 Mr. Freeh, in his capacity as founder and senior managing partner of Freeh Sporkin & Sullivan, LLP, discloses that James Bucknam, former Assistant United States Attorney for the Southern District of New York worked for the United States Attorney for the Southern District of New York at the same time as Serene K. Nakano, who is now employed by the U.S. Trustee for Region 2. Mr. Freeh relates that to ensure that as Chapter 11 Trustee he will remain disinterested, Freeh Sporkin and its affiliate law firm Freeh Group International Solutions, LLC, to which Mr. Freeh is the founder and chairman agree that they will not represent any client other than him as Chapter 11 Trustee in connection with these Chapter 11 cases. Mr. Freeh insists that Freeh Sporkin is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on December 19, 2011. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: Trustee Proposes Freeh Group as Advisor -------------------------------------------------- Louis J. Freeh, the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates, seeks the Bankruptcy Court's permission to employ Freeh Group International Solutions, LLC, as his advisor, nunc pro tunc to November 28, 2011. As the Chapter 11 Trustee's advisor, Freeh Group will: (a) manage the facilitation and coordination of information and data exchange between the various worldwide administrations including, but not limited to, the SIPA proceeding: SIPC v. MF Global Inc. and the United Kingdom Administration of MF Global Overseas Limited; (b) coordinate the workflow administration between the Chapter 11 Trustee's professionals, the Official Committee of Unsecured Creditors and its professionals, and the various worldwide administrations including, but not limited to, the MFGI SIPA Proceeding and the MF Global UK Proceeding; (c) assist the Chapter 11 Trustee with the day-to-day, short- term and long-term management of the bankruptcy process, including evaluation of strategic and tactical options with respect to the SIPA proceeding and various insolvency administrations throughout the world, as well as management of the wind down of the Debtors operations; and (d) assist the Chapter 11 Trustee in undertaking additional tasks that the Court may direct. In connection with its representation of the Chapter 11 Trustee, Freeh Group has agreed to a 10% reduction from its standard hourly rates in effect at the time that it performs professional services. The principal professionals expected to provide advisory services to the Chapter 11 Trustee and their hourly rates are: Name/Title Rate per Hour ---------- ------------- James R. Bucknam $750 Chief Executive Officer bucknam@freehgroup.com Francis A. Piantidosi $750 The current hourly rates for other FGIS professional staff members, who may be retained in these Chapter 11 Cases, are: Title Rate per Hour ----- ------------- Managing Director $475 to $600 Investigator $250 to $450 Freeh Group will also be reimbursed for expenses incurred. Louis Freeh, the Chapter 11 Trustee, in his capacity as founder and chairman of Freeh Group International Solutions, LLC, discloses that his firm does not currently represent any parties- in-interest or potential parties-in-interest in these Chapter 11 cases. Thus, Freeh Group is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code, he tells the Court. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on December 19, 2011. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: Trustee Proposes FTI as Financial Advisor ---------------------------------------------------- Louis J. Freeh, the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates, in an amended request, seeks the Bankruptcy Court's permission to employ FTI Consulting, Inc., as his financial advisor, nunc pro tunc to November 1, 2011. On November 1, 2011, FTI was engaged and began providing restructuring consulting services to the Debtors. The work undertaken by FTI since November 1, 2011 has greatly assisted the Chapter 11 Trustee in gaining an understanding of the facts and circumstances of the cases and has allowed for a smooth transition from the Debtors to the Chapter 11 Trustee. Specifically, FTI will provide these services to the Chapter 11 Trustee: (a) Assist with the preparation of financial related disclosures required by the Court, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs and Monthly Operating Reports; (b) Assist with information and analyses required pursuant to the Debtors' pursuit of debtor-in-possession financing including, but not limited to, preparation for hearings regarding the use of cash collateral and DIP financing; (c) Assist with the identification and implementation of short-term cash management procedures; (d) Advise and assist with the development and implementation of key employee retention and other critical employee benefit programs; (e) Assist with and advise the Debtors and the Chapter 11 Trustee with respect to the identification of core business assets and the disposition of assets or liquidation of unprofitable operations; (f) Assist with the identification of executory contracts and leases and performance of cost/benefit evaluations with respect to the affirmation or rejection of each; (g) Assist with the valuation of the present level of operations and identification of areas of potential cost savings, including overhead and operating expense reductions and efficiency improvements; (h) Assist in the preparation of financial information for distribution to creditors and others; (i) Attend meetings and assist in discussions with potential investors, banks and other secured lenders, any official committee appointed in these Chapter 11 cases, the U.S. Trustee for Region 2, other parties-in-interest and professionals hired by the same, as sought; (j) Analyze creditor claims by type, entity and individual claim, including assisting with development of databases, as necessary, to track those claims; (k) Assist with monitoring the various other insolvency proceeding of the Debtors' affiliates (including the SIPA proceeding, UK insolvency proceedings and various administration proceeding in Asia and other parts of the world); (l) Assist in the preparation of information and analysis necessary for the confirmation of a plan in these Chapter 11 proceedings; (m) Assist in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; (n) Litigation advisory services with respect to accounting and tax matters, along with expert witness testimony on case-related issues, if those services are necessary; (o) Render other general business consulting or other assistance as the Debtors' management or counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in these Chapter 11 proceedings; and (p) Assist with forensic accounting, forensic reviews and investigations, information technology issues, data retention, data preservation, data collection, and data analysis. FTI will seek payment for compensation on a monthly fixed fee of $1,500,000 for the months of November and December, 2011, $1,000,000 for the months of January and February, 2012, $750,000,000 for the months of March and April, 2012, and $500,000 thereafter, plus reimbursement of actual and necessary expenses incurred by the firm. Michael Eisenband, a senior managing director with FTI Consulting, Inc., relates that during the 90-day period before the Petition Date, his firm received no payments from the Debtors for professional services performed and expenses incurred on behalf of the Debtors. According to FTI's books and records, FTI has unpaid receivables due from the Debtors of $167,028 in Aggregate, he says. FTI has agreed to write off the amount and not seek collection. Mr. Eisenband also filed with the Court an updated schedule of entities, which FTI continues to represent, a schedule of which is available for free at: http://misc/bankrupt.com/misc/MFGlobal_AmFTIClients.pdf Mr. Eisenband maintains that FTI remains a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. As a result of conversations with the U.S. Trustee for Region 2, Mr. Eisenband submitted a supplemental declaration to disclose that FTI and its affiliates do not own any debt or equity securities issued by MF Global or its affiliates. Likewise, no employee of FTI and its affiliates who will render services in connection with the proposed retention as financial advisor owns any debt or equity securities issued by MF Global or its affiliates, he notes. He adds that no professional employed by FTI or its U.S. or U.K. affiliates, owns any debt or equity securities issued by MF Global or its affiliates. In the event it is determined subsequently that any professional employed by FTI or its U.S. or U.K. affiliates is an owner of debt or equity securities issued by MF Global or its affiliates, that person will be directed by the general counsel and chief risk offer to divest those securities on an expedited basis, he assures the Court. In light of those disclosures, he believes that FTI does not represent an interest an interest adverse to the Debtors or the Chapter 11 Trustee. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on December 19, 2011. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: Slaughter and May Shares Info on Clients --------------------------------------------------- George E.S. Seligman, Esq., a partner at Slaughter & May, in England, filed with the Court a supplemental declaration to address certain inquiries made by the Court at a January 19, 2012 hearing. In order to comply with the Court's request and with the Code of Conduct, Mr. Seligman provided the Court with an anonymised description of its five relevant clients. (a) Current Client: * Acting for a Swiss private bank in relation to a potential claim it may have as a general unsecured creditor of MF Global United Kingdom Limited. An indicative estimate provided by the bank suggests that the claim is unlikely to exceed GBP500,000. (b) Former Clients: * Advised a Northern European banking group in relation to, among other things, its potential exposure under a number of stock lending transactions under a master stock lending agreement with MFG UK. The client closed out these transactions following the commencement of the Special Administration and applied the collateral it was holding in respect of those transactions in satisfaction of amounts which remained owing to it. The client has no outstanding claim against MFG UK in respect of any of these transactions. * Advised a UK securities house in relation to its potential exposure with respect to a number of stock lending transactions under a stock lending agreement with MFG UK. Slaughter and May's work related primarily to advice on the termination provisions under the agreement. Slaughter and May is not advising, and will not advise, on any claim that the client may have against MFG UK in respect of this agreement. * Advised an Australian bank on its potential exposure in respect of a number of stock lending transactions under a stock lending agreement with MFG UK. The client closed out these transactions prior to the commencement of the Special Administration of MFG UK. Following the commencement of the Special Administration of MFG UK, the client applied the collateral it was holding in satisfaction of amounts which remained owing to it. Excess collateral was returned to MFG UK. The client therefore has no claim against MFG UK in respect of these transactions. * Advised a corporate client on the acquisition of certain assets from MFG UK. Slaughter and May has not advised, and will not advise, the client on any claim against MFG UK. The revenue generated from those clients represent a de minimis percentage of the total revenue generated by Slaughter and May during the fiscal year 2011, Mr. Seligman tells the Court. Slaughter and May has not represented or advised, and will not represent or advise, any clients in connection with claims against MFG UK that assert priority of recovery or distribution over claims of MFGI or its customers in the Special Administration of MFG UK, Mr. Seligman says. The Application MF Global Bankruptcy News, Issue No. 10, reports that the SIPA Trustee is seeking the U.S. Bankruptcy Court for the Southern District of New York's permission to employ Slaughter and May as his English counsel, nunc pro tunc to December 21, 2011. Pursuant to an order of the English High Court of Justice, issued on October 31, 2011 prior to commencement of the SIPA liquidation, Michael Robert Pink, Richard Dixon Fleming and Richard Heis were appointed Joint Special Administrators of MF Global UK Limited. The Joint Special Administrators of MF Global UK Limited dispute the classification under English law of approximately $600 to $700 million in MFGI's commodities claimant funds that were purportedly held by MFG UK as segregated assets for US customers of MFGI dealing in foreign futures. The SIPA Trustee believes that those funds were segregated for US customers of MFGI who traded on foreign exchanges and, thus, should be returned to MFGI for distribution to those MFGI customers. Absent a return, the SIPA Trustee's ability to satisfy -- even in part -- the claims of MFGI's US customers who traded on foreign exchanges will be severely compromised. It is anticipated that there may be other areas in which disputes could arise between the SIPA Trustee and the Joint Special Administrators regarding MFGI's claims, on its own account and on behalf of its US customers, against the estate of MFG UK. As the SIPA Trustee's English counsel, Slaughter and May will, among other things: * represent the SIPA Trustee at creditor meetings of MFG UK, meetings with the Joint Special Administrators and/or their lawyers, and English Court hearings in relation to the Special Administration; * review and analyze motions, applications, orders, statements of operations and schedules filed with the English Court and advise the SIPA Trustee as to their propriety, and to the extent deemed appropriate by the SIPA Trustee, support, join or object thereto; and * assist the SIPA Trustee by preparing English Court documents and pleadings including, without limitation, applications, motions, affidavits, witness statements, records, memoranda, complaints, adversary complaints, objections or comments as may be necessary in furtherance of the SIPA Trustee's interests in the Special Administration. Slaughter and May will be paid according to its professionals' customary hourly rates: Rate per Hour Title in GBP in US$ ----- ------ ------ Partners GBP550 $856 Senior Associates GBP450 $701 Junior Associates GBP325 $506 Trainee Solicitors and paralegals GBP125 $194 George E.S. Seligman, Esq., a partner at Slaughter and May, in England -- george.seligman@slaughterandmay.com -- disclosed that in February 2008, Slaughter and May represented MFG UK with respect to certain tax and intellectual property matters. Specifically, Slaughter and May provided advice to MFG UK on these matters: (A) advice, from December 2009 to February to July 2010, on the bank payroll tax which was announced by the UK government wherein Slaughter and May billed (and was paid) GBP75,000 plus VAT for this matter; (B) advice, from August 2010 to August 2011, on general tax matters wherein Slaughter and May has an outstanding bill for GBP5,500 plus VAT for this work that Slaughter and May will write-off; and (c) advice, from February 2008 to May 2009, on the preparation of a software development agreement. Slaughter and May billed and was paid GBP24,930 plus VAT for this matter. Slaughter and May has agreed not to seek to collect from MFG UK, subject to approval by the Bankruptcy Court of its retention as English counsel to the SIPA Trustee, any amount owing to Slaughter and May by MFG UK for accrued and unpaid fees for services rendered or reimbursement for expenses incurred, Mr. Seligman says. Moreover, Slaughter and May will not perform any future services for MFG UK, the Joint Special Administrators of MFG UK acting in that capacity or any other MFGI affiliate, he adds. Slaughter and May is also advising various clients on issues arising out of the Special Administration, Mr. Seligman relates. Several of these and future engagements, include advising clients on potential claims against MFG UK, the actual preparation and submission of claims on their behalf against the MFG UK estate or the purchase of assets from the MFG UK estate. Slaughter and May also performs services for professional firms that may be employed by MFG UK, and other parties of interest in the SIPA proceeding, he states. The attorneys that have performed those services for any other professional firms will each be subject to an Information Barrier segregating him or her from work performed for the SIPA Trustee, he assures the Court. Despite those disclosures, Mr. Seligman insists that Slaughter and May is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on December 19, 2011. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: Committee Proposes to Retain Capstone as Advisor ----------------------------------------------------------- The Official Committee of Unsecured Creditors in MF Global Holdings Ltd.'s cases seeks permission from the Bankruptcy Court to retain Capstone Advisory Group, LLC, together with its wholly- owned subsidiary Capstone Valuation Services, Inc., as its financial advisor, nunc pro tunc to Nov. 9, 2011. As the Creditors Committee's financial advisor, Capstone will: (a) advise and assist the Creditors' Committee in its analysis and monitoring of the Debtors' historical and current financial affairs, including without limitation, schedules of assets and liabilities, statement of financial affairs, periodic operating reports, analyses of: cash receipts and disbursements, cash flow forecasts, intercompany transactions, trust accounting, various asset and liability accounts, analyses of ongoing wind down activities, any unusual or significant transactions between the Debtors and any other entities, and proposed restructuring transactions; (b) advise and assist the Creditors' Committee with respect to any proposed financing or use of cash collateral that the Debtors may seek; (c) develop a periodic monitoring report to enable the Creditors' Committee to effectively evaluate the Debtors' performance and cost reductions on an ongoing basis; (d) advise and assist the Creditors' Committee with respect to analyzing and monitoring the impact on the Debtors' affairs from the wind down of the entities under the control of the SIPA Trustee or other regulators; (e) advise and assist the Creditors' Committee and counsel in reviewing and evaluating any court motions, applications or other forms of relief filed or to be filed by the Debtors, or any other parties-in-interest; (f) monitor the Debtors' claims management process, analyze claims, analyze guarantees, and summarize claims by entity; (g) advise and assist the Creditors' Committee in identifying or reviewing any preference payments, fraudulent conveyances and other potential causes of action that the Debtors' estates may hold against insiders or third parties; (h) analyze the Debtors' assets and analyze possible recovery to the various creditor constituencies under various scenarios; (i) advise and assist the Creditors' Committee with respect to the Debtors' identification of core business assets or liquidation of unprofitable operations, in evaluating and analyzing restructuring proposals of the Debtors and assist counsel and the Creditors' Committee in developing negotiation strategies to support the Creditors' Committee's position; (j) advise and assist the Creditors' Committee in its assessment of the Debtors' employee needs and related costs; (k) advise and assist the Creditors' Committee in its review of intercompany transactions between the Debtors and its subsidiary companies, including understanding its historical business and accounting practices, whether or not the transactions were cash or non-cash, financial terms of those amounts; (l) advise and assist the Creditors' Committee in the evaluation of the operations and any insolvency proceedings of foreign entities related to the ultimate parent, MF Global Holdings Ltd.; and (m) render expert testimony as requested from time to time by the Creditors' Committee and counsel; and (n) attend Creditors' Committee meetings and court hearings as may be required in the role of advisors to the Creditors' Committee. Capstone will be paid according to its professionals' customary hourly rates, which are revised annually effective January 1st: Rate per Hour Title 2011 2012 ----- ---- ---- Executive Director $600 to $760 $610 to $795 Managing Director $475 to $590 $475 to $600 Directors $360 to $475 $360 to $475 Consultants $160 to $350 $170 to $350 Support staff $120 to $150 $120 to $160 Capstone will also be reimbursed for reasonable and actual out- of-pocket expenses. Christopher J. Kearns, executive director of Capstone Advisory Group, LLC, discloses that has relationships with certain parties-in-interest in matters unrelated to the Debtors or their Chapter 11 cases. Capstone has advised the Creditors' Committee and the U.S. Trustee for Region 2 that, it will not provide expert witness services adverse to organizations or persons that are parties-in-interest in which Capstone has relationships and associations with. However, Capstone is willing to perform all investigations related to potential causes of actions that the Creditors' Committee may seek to pursue, he says. A schedule of the parties-in-interest in which Capstone has relationships is available for free at: http://misc/bankrupt.com/misc/MFGlobal_CapstoneClients.pdf Mr. Kearns further notes that CVS may be asked to value and manage the liquidation of assets of investment funds. Those investment funds could take positions in debt or equity of the Debtors, without Capstone's or CVS's knowledge or consent, he notes. He clarifies that neither Capstone nor CVS has any pecuniary interest in those investment funds, or will profit from the value realized from the sale of their assets. To the extent any employee of CVS is utilized for valuation expertise on behalf of the Creditors' Committee that employee will not perform any valuation work on any debt or equity securities of the Debtors for any investment fund for the duration of this engagement, he assures the Court. If CVS is providing valuation work on any debt or equity securities of the Debtors for any investment fund for the duration of this engagement, then the CVS employee undertaking such work will be restricted and have no access to the confidential information of the Debtors, he adds. Mr. Kearns insists that Capstone, together with CVS, is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on December 19, 2011. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: Committee Wins OK for Dewey & LeBoeuf as Attorneys ------------------------------------------------------------- The statutory creditors' committee sought and obtained the Court's authority to employ Dewey & LeBoeuf LLP as their attorneys, nunc pro tunc to November 9, 2011. As attorneys, D&L will: (a) assist and advise the Committee in its consultation with the Chapter 11 Trustee and the Debtors relative to the administration of the bankruptcy cases and MF Global Inc.'s liquidation under the Securities Investor Protection Act; (b) attend meetings and negotiate with representatives of the affiliated debtors and administration officials presiding over MF entity cases around the globe; (c) assist and advise the Committee in its examination and analysis of the conduct of the Debtors' affairs and their subsidiaries' affairs; (d) assist the Committee in the formulation, review, analysis, and negotiation of any Chapter 11 plan that may be filed and assist the Committee in the formulation, review, and analysis of the disclosure statement accompanying any Chapter 11 plan; (e) take all necessary action to protect and preserve the interests of the Committee and general unsecured claims against the Debtors' estates, including (i) the investigation and possible prosecution of actions on their behalf; (ii) if appropriate, negotiations concerning all litigation in which the Debtors' estates are involved; and (iii) review, and analysis of claims filed against the Debtors' estates; (f) generally prepare on behalf of the Committee all necessary motions, applications, answers, orders, reports, and papers in support of positions taken by the Committee; and (g) appear, as appropriate, before this Court, the appellate courts, and the U.S. Trustee, and protect the interests of the Committee before those courts and before the U.S. Trustee. The D&L professionals will be paid in accordance to their customary hourly rates: Partners $775 to $1200 Of counsel $760 to $900 Associates $395 to $675 Paraprofessionals $200 to $295 The Committee expects these D&L to take a lead role in representing the panel in the Debtors' bankruptcy cases: Martin J. Bienenstock, Esq. $1000 Michael P. Kessler, Esq. $1000 Mark Fennessy, Esq. $995 Hazel Miller, Esq. $950 Irena M. Goldstein, Esq. $875 Timothy Q. Karcher, Esq. $875 Elizabeth P. Smith, Esq. $760 Marc M. Allon, Esq. $640 Vincent Indelicato, Esq. $580 Kathleen E. Barber, Esq. $395 Maja Zerjal, Esq. $395 D&L will also be reimbursed for all its necessary out-of-pocket expenses. Martin J. Bienenstock, Esq., at Dewey & LeBouef LLP, in New York, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Committee's. Mr. Bienenstock further discloses that: * In August 2011, MF Global Inc. retained D&L to provide general tax advice for three transactions. D&L said it provided limited and discrete services in connection with tax advice related to those transactions and, in relation to the services provided, D&L was paid $59,720. The entirety of the amount was paid within 90 days prior to the Petition Date. * Deloitte Touche Tohmatsu has been appointed Joint Administrator of Australian indirect subsidiaries of MF Global Holdings Ltd. * KPMG has been appointed administrators of MF Global UK Ltd., et al. The Committee said KPMG has also been hired to advise a potential sale of MF Global Holdings Ltd. indirect subsidiary MF Global Sify Securities India PVT., Ltd. D&L is not representing KPMG in connection with any of these matters. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11- 15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on December 19, 2011. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MFJT LLC: Has Access to BACM 2007's Cash Collateral Until Feb. 29 ----------------------------------------------------------------- The Hon. Eugene R. Wedoff of the U.S. Bankruptcy Court for the Northern District of Illinois, in a sixth interim order, authorized MFJT, LLC's continued access to the cash collateral. Lender BACM 2007-3 Aslip Complex LLC consented to the Debtor's continued use of the cash collateral until Feb. 29, 2012. The Debtor would use the cash collateral to fund its business postpetition. As adequate protection from diminution in value of the lender's collateral, the Debtor will, among other things: -- grant the lender valid perfected, enforceable security interests in and to the Debtor's postpetition assets; -- permit the lender to inspect, upon reasonable notice, within reasonable hours, the Debtor's book and records; -- make only the expenditures set forth in the budget plus no more than 10% of the total proposed expense payments unless otherwise agreed by the lender or upon further order of the Court; -- maintain and pay premiums for insurance to cover all of its assets from fire, theft and water damage to the extent set forth in the budgets; and -- escrow sufficient funds for the payment of current real estate taxes relating to the property. A status hearing on the motion is scheduled for Feb. 28, 2012, at 10:00 a.m. About MFJT, LLC Alsip, Illinois-based MFJT, LLC -- dba Somerset Park Apartments and Somerset II - is the owner and operator of two separate residential projects in Alsip and Merrinette Park, Illinois, commonly known as Somerset Park Apartments and Somerset II. The Company filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 11-11819) on March 22, 2011. Arthur G. Simon, Esq., David K. Welch, Esq., and Jeffrey C. Dan, Esq., at Crane Heyman Simon Welch & Clar, in Chicago, serve as the Debtor's bankruptcy counsel. The Debtor proposes to employ Tailwind Services, LLC as its financial advisor. The Debtor disclosed $16,137,365 in assets and $17,952,853 in liabilities as of the Chapter 11 filing. MILL RIVER: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Mill River Foundation, Inc. dba William And Sally Tandet Center For Continuing Care 146 West Broad Street Stamford, CT 06902 Bankruptcy Case No.: 12-50306 Chapter 11 Petition Date: February 21, 2012 Court: U.S. Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Stephen M. Kindseth, Esq. ZEISLER & ZEISLER, P.C. 558 Clinton Avenue P.O. Box 3186 Bridgeport, CT 06605 Tel: (203) 368-4234 Fax: (203) 367-9678 E-mail: skindseth@zeislaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/ctb12-50306.pdf The petition was signed by Doug Mittleider, president. MONEYGRAM INT'L: Silver Point Ceases to Own 5% of Common Shares --------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Silver Point Capital, L.P., and its affiliates disclosed that as of Feb. 18, 2012, they beneficially own 749,118 shares of common stock of MoneyGram International, Inc., representing 1.3% based upon 57,834,779 outstanding shares of common stock as of Dec. 22, 2011. Silver Point owns the same amount of shares as of Dec. 22 2011. A full-text copy of the amended filing is available at http://is.gd/7r9oMh About MoneyGram International MoneyGram International, Inc. (NYSE: MGI) -- http://www.moneygram.com/-- is a leading global payment services company. The Company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram is a New York Stock Exchange listed company with 203,000 global money transfer agent locations in 191 countries and territories. The Company's balance sheet at Dec. 31, 2011, showed $5.17 billion in total assets, $5.28 billion in total liabilities and a $110.19 million total stockholders' deficit. * * * According to the Troubled Company Reporter on July 1, 2010, Fitch Ratings has affirmed the Issuer Default Ratings for MoneyGram International Inc. and MoneyGram Payment Systems Worldwide, Inc., at 'B+'. Outlook is stable. Fitch noted that the ratings could be negatively impacted by further declines in remittance volumes driven by macro economic factors or decreases in migrant labor populations worldwide. MONEYGRAM INT'L: Thomas Lee Discloses 50.8% Equity Stake -------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Thomas H. Lee Advisors, LLC, and its affiliates disclosed that, as of Feb. 18, 2012, they beneficially own 36,332,270 shares of common stock of MoneyGram International, Inc., representing 50.8% of the shares outstanding. As of Dec. 22, 2011, Thomas Lee disclosed ownership of 37,081,388 shares. A full-text copy of the amended filing is available for free at http://is.gd/5QqKsm About MoneyGram International MoneyGram International, Inc. (NYSE: MGI) -- http://www.moneygram.com/-- is a leading global payment services company. The Company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram is a New York Stock Exchange listed company with 203,000 global money transfer agent locations in 191 countries and territories. The Company's balance sheet at Dec. 31, 2011, showed $5.17 billion in total assets, $5.28 billion in total liabilities and a $110.19 million total stockholders' deficit. * * * According to the Troubled Company Reporter on July 1, 2010, Fitch Ratings has affirmed the Issuer Default Ratings for MoneyGram International Inc. and MoneyGram Payment Systems Worldwide, Inc., at 'B+'. Outlook is stable. Fitch noted that the ratings could be negatively impacted by further declines in remittance volumes driven by macro economic factors or decreases in migrant labor populations worldwide. MOUNTAIN CITY: To Present Plan for Confirmation on April 16 ----------------------------------------------------------- The Bankruptcy Court approved the Disclosure Statement explaining the Chapter 11 Liquidating Plan filed by Mountain City Meat Co., Inc. The Court found that the Disclosure, as modified at the hearing, contains adequate information within the meaning of Section 1125 of the Bankruptcy Code. The objections that were filed by the United States Trustee and Fifth Third Bank have been resolved or are otherwise overruled. The Disclosure Statement, as amended, stated that as of Jan. 31, 2012, the Debtor held approximately $1,700,000 of unencumbered funds and is confident that Unencumbered Funds will total, at a minimum, $1,050,000, after payment of all amounts due on the Effective Date of the Plan, including Tax Claims and Secured Claims, and after accounting for expected unpaid Professional Fees. Fifth Third Bank, the Debtor's pre-petition secured lender, has demanded that the Debtor set aside $500,000 in cash in a separate escrow account to pay for at least a portion of its attorneys fees with respect to an investigation by the Creditors' Committee of Fifth Third Bank's Secured Claim. The Debtor has not consented to the bank's demand. The Debtor maintains that if Fifth Third Bank successfully seeks that relief in the Bankruptcy Court, the creation of the escrow fund will delay the Effective Date of the Plan. All ballots accepting or rejecting the Plan must be delivered to counsel for the Debtor on or before 5:00 p.m. on March 23, 2012. Any objections to confirmation of the Plan must be filed with the Court on or before March 23, 2012. A hearing to consider confirmation of the Plan is set for April 16, 2012, at 1:30 p.m. The hearing on the Motion to Dismiss the Involuntary Bankruptcy Case, Case No. 11-29209 will be continued to April 16. A full-text copy of the Amended Disclosure Statement is available for free at http://bankrupt.com/misc/MOUNTAINCITY_FEB14DS.pdf About Mountain City Meat Denver, Colorado-based Mountain City Meat Co., Inc. -- http://www.mountaincitymeat.com/-- is one of the largest portion control beef processors in the United States. Through its headquarters and manufacturing facility in Denver, and its second manufacturing facility in Nashville, Tennessee, Mountain City supplies high quality ground beef and portion control steak cuts through several channels, including retail stores, chain restaurants and broadline food service distributors. On Aug. 9, 2011, Mountain City's board of directors appointed BGA Management LLC d/b/a Alliance Management, through its agent, Alex G. Smith as the company's Chief Restructuring Officer until the need for a CRO no longer existed. Immediately after appointing Alliance as CRO, the Board resigned. On Aug. 11, 2011, Mountain City's secured lender, Fifth Third Bank commenced a receivership action against the company in Denver District Court. At 5:00 p.m. that same day, the Denver District Court appointed Alliance as receiver for Mountain City's personal property and related operations. However, minutes before the receivership order, certain putative unsecured creditors -- Orleans International, Inc., National Beef Packing, Inc. and XL Four Star Beef, Inc. -- commenced an involuntary Chapter 7 bankruptcy petition (Bankr. D. Colo. Case No. 11-29209) against Mountain City. The Involuntary Chapter 7 petition was filed as a result of, among other reasons, the Debtor (a) ordering and not paying for in excess of $2,400,000 of meat inventory from the Petitioning Creditors; and (b) issuing checks to the Petitioning Creditors for a portion of the inventory, which checks were refused for payment by Fifth Third Bank. The Debtor sought dismissal of the Involuntary Petition on the grounds that it was filed in bad faith because the Petitioning Creditors were motivated solely by their desire to preserve their claims under Section 503(b)((9) of the Bankruptcy Code to have that portion of their claims related to goods sold to the Debtor within 20 days prior to the filing treated as an administrative expense. In the Involuntary Case, the Secured Lender obtained two interim orders annulling the automatic stay to allow the receiver to keep control of the Debtor. Mountain City filed a voluntary Chapter 11 petition (Bankr. D. Colo. Case No. 11-32656) on Sept. 24, 2011. Judge Howard R. Tallman presides over the case. Michael J. Pankow, Esq., Daniel J. Garfield, Esq., Heather B. Schell, Esq., at Brownstein Hyatt Farber Schreck, LLP, represent the Debtors as counsel. The Debtor estimated up to $50 million in assets and debts. Attorneys for the Petitioning Creditors are John B. Wasserman, Esq., at Sender & Wasserman, P.C., and Howard S. Sher, Esq., and Michele L. Walton, Esq., at Jacob & Weingarten, P.C. Fifth Third is represented in the case by James T. Markus, Esq., and John F. Young, Esq., at Markus Williams Young & Zimmermann LLC. An official committee of unsecured creditors has been appointed in the case. The panel is represented by Harold G. Morris, Jr., Esq., and John C. Smiley, Esq., at Lindquist & Vennum PLLP. NEBRASKA BOOK: Judge Gives April 23 Deadline to File New Plan ------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that a judge said Nebraska Book Co. can keep control over its Chapter 11 case through April 23 while it works to negotiate a new bankruptcy-exit plan with its second-lien lenders. As reported in the TCR on Feb. 6, 2012, Nebraska Book filed a motion to further extend their exclusive periods to file a Chapter 11 Plan and solicit acceptances of such a Plan by 91 days, through and including April 23, 2012, and June 21, 2012, respectively. The Debtors intend to continue discussions with key stakeholders regarding a consensual plan of reorganization. The Debtors already filed a fully-consensual plan but have been unable to confirm "for reasons outside of their control." About Nebraska Book Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the leading providers of new and used textbooks for college students in the United States. Nebraska Book and seven affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002 to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over the case. Lawyers at Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The Debtors; restructuring advisors are AlixPartners LLC; the investment bankers are Rothschild, Inc.; the auditors are Deloitte & Touche LLP; and the claims agent is Kurtzman Carson Consultants LLC. As of the Petition Date, the Debtors had consolidated assets of $657,215,757 and debts of $563,973,688. JPMorgan Chase Bank N.A., as administrative agent for the DIP lenders, is represented by lawyers at Richards, Layton & Finger, P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment Management Inc., the DIP arranger, is represented by lawyers at Bayard, P.A., and Willkie Farr & Gallagher LLP. An ad hoc committee of holders of more than 50% of the Debtors' Second Lien Notes is represented by lawyers at Brown Rudnick. An ad hoc committee of holders of the Debtors' 8.625% unsecured notes are represented by Milbank, Tweed, Hadley & McCloy LLP. The Official Committee of Unsecured Creditors selected Lowenstein Sandler LLP and Stevens & Lee, P.C., as lawyers and Mesirow Financial Inc. as financial advisers. Nebraska Book has been unable to confirm a pre-packaged Chapter 11 plan that would have swapped some of the existing debt for new debt, cash and the new stock, due to an inability to secure $250 million in exit financing. The company's exclusive period for proposing a plan is set to expire on Jan. 23. NEW DIRECTION: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: New Direction Community Church fka New Gethsemane Church of God In Christ of Pomona 1100 E. Holt Ave. Pomona, CA 91767 Bankruptcy Case No.: 12-16147 Chapter 11 Petition Date: February 21, 2012 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Neil W. Bason Debtor's Counsel: Michael R. Totaro, Esq. TOTARO & SHANAHAN P.O. Box 789 Pacific Palisades, CA 90272 Tel: (310) 573-0276 Fax: (310) 496-1260 E-mail: mtotaro@aol.com Scheduled Assets: $3,176,900 Scheduled Liabilities: $5,427,166 A list of the Company's 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-16147.pdf The petition was signed by Raymond Eugene Watts, president. NORANDA ALUMINUM: Moody's Affirms 'B1'; Outlook Negative -------------------------------------------------------- Moody's Investors Service changed the outlook for Noranda Aluminum Holding Corporation and Noranda Aluminum Acquisition Corporation to negative from stable, and affirmed Holdco's B1 Corporate Family and Probability of Default Ratingsas well as its SGL-2 Speculative Grade Liquidity Rating. Moody's also affirmed the Ba2 ratings on Noranda Aluminum Acquisition Corporation's senior secured revolving credit facility and senior secured term loan facility and assigned a Ba2 rating to the company's proposed $300 million senior secured term loan. At the same time, Moody's downgraded Noranda's senior unsecured notes rating to B3 from B2. Proceeds from the new term loan will be used to retire the remaining balance under the existing term loan, tender for a portion of the senior unsecured notes, pay a special dividend to shareholders, and fund general corporate uses of cash. Noranda Aluminum Acquisition Corporation is also entering into a new $250 million asset-based revolving credit facility, which will not be rated. Upon closing of the new bank facilities, Moody's will withdraw the ratings on the existing bank revolver and term loan. RATINGS RATIONALE The negative outlook incorporates Moody's expectation for weaker operating and cash flow generation over the next twelve to eighteen months, given the lower aluminum price levels and continued slow economic recovery, which Moody's believes will result in relatively flat shipment levels year-on-year and moderation in earnings. The negative outlook also reflects the increase in leverage in this environment to fund a further special dividend and the resultant the tightening in debt protection ratios, such as EBIT/interest. Also considered are the weaker cash flow metrics given the special dividend and other 2012 expected cash outflows relating to the out of the money natural gas hedge position and tax payments on the aluminum hedge gains from prior years. An additional factor in the outlook is evidence of a more aggressive, shareholder-friendly financial policy. The downgrade in the senior unsecured floating rate notes rating to B3 from B2 under Moody's Loss Given Default methodology reflects the weaker position and less loss absorption ability of these instruments in the capital structure following the increase in the secured term loan to $300 million from currently $78 million. Borrowings under the unrated ABL revolver, which will be limited by a borrowing base, will be secured on a first priority basis on the company's inventory and accounts receivables ("ABL priority collateral"), and on a second priority basis on the assets that are pledged on a first lien basis to the new term loan. Borrowings under the new term loan will be secured on a first priority basis on assets apart from the ABL priority collateral and on a second priority basis on the ABL priority collateral. Both the ABL revolver and new term loan will be guaranteed by Noranda's subsidiaries. Noranda's B1 Corporate Family Rating reflects the company's good position with its customer base and its markets served. Additionally, continued focus on cost control and cost reduction under its "Cost-Out, Reliability and Effectiveness"(CORE) program, as well as the benefits to its overall cost position from its alumina refinery and bauxite operations are expected to continue to provide some mitigation to the volatility of aluminum prices. These latter benefits are derived from the earnings generated b third party sales of both excess bauxite and aluminum, which the company views as a reduction to overall production costs in its primary aluminum operations. At the same time, the rating reflects Noranda's relatively small size, its earnings leverage to performance of the primary metal business, and the reliance of this business on a single smelter and refinery - which leaves the company exposed to any future disruptions at the New Madrid, Missouri smelter and Gramercy, Louisiana refinery. While the downstream operations add a level of relative stability, their EBITDA contribution is still likely to remain relatively small, absent a significant increase in production capacity. The upstream primary operations will remain the dominant earnings driver and will continue to reflect the cyclicality of the aluminum price and demand levels. Noranda's rating could be downgraded if LME aluminum prices were to trend at $0.90/lb or less on an ongoing basis, production costs were to escalate, or the company's operations encountered disruptions leading to a deterioration in operating performance and credit metrics. Furthermore, the rating could be downgraded should the company engage in aggressive financial policies that result in a material impact on its leverage profile. Under the current circumstances, there is limited cushion in the company's rating for further increases in debt. Specifically, the rating could be lowered if adjusted debt-to-EBITDA increased to greater than 4.0 times, free cash flow-to-debt fell to less than 4%, or EBIT-to-interest decreased to less than 2.5 times. At this point, an upgrade to Ba3 is unlikely, given Noranda's relatively small size, reliance on one smelter, exposure to the cyclicality of aluminum price and demand swings and uncertainty over financial policies The principal methodology used in rating Noranda was the Global Steel Industry Methodology published in January 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 Franklin, Tennessee, Noranda Aluminum Holding Corporation is the holding company for Noranda Aluminum Acquisition Corporation, which in turn directly owns Noranda Aluminum, Inc. and indirectly controls Noranda Aluminum Inc.'s subsidiaries (we collectively refer to the group of companies as "Noranda"). Noranda is involved in primary aluminum production at its New Madrid, Missouri smelter and in downstream operations through four rolling mills. In its primary operations, the company seeks to enhance returns by focusing on value-added products such as billet, rod and foundry products, with the former two comprising a relatively higher proportion of product sales. In its downstream operations, the company has up to 495 million pounds of annual production capacity, with key products including HVAC finstock (which represents the majority of output), semi-rigid containers, flexible packaging, and foil. In addition, Noranda has a 100% interest in an alumina refinery in Gramercy, Louisiana and through its wholly owned subsidiary, St. Ann Bauxite Holdings Ltd., ultimately owns 49% of a bauxite mining operation in St. Ann, Jamaica. Production of bauxite, alumina and chemical grade alumina that exceeds internal requirements is sold to third parties. During the fiscal ending December 31, 2011, Noranda shipped approximately 513 million pounds of primary aluminum to external customers and 363 million pounds of fabricated products, generating revenues of $1.6 billion. NORANDA ALUMINUM: S&P Affirms 'B+', Gives Stable Outlook -------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Franklin, Tenn.-based Noranda Aluminum Holding Corp. (Noranda). The rating outlook is stable. "At the same time, we assigned our 'BB-' issue-level rating (one notch above the corporate credit rating) to the proposed $300 million term loan of Noranda Aluminum Acquisition Corp., a subsidiary of Noranda. We also assigned a recovery rating of '2', indicating our expectation for a substantial (70% to 90%) recovery in the event of payment default," S&P said. "We also lowered our issue-level rating on Noranda Aluminum Acquisition's existing senior unsecured notes due 2015 to 'B-' (two notches below the corporate credit rating) from 'B'. We also revised our recovery rating to '6', indicating our expectation for a negligible (0% to 10%) recovery in the event of payment default, from '5'," S&P said. "The company will use the proceeds from the proposed term loan to repay Noranda Aluminum Acquisition's existing senior secured credit facilities, to fund a tender offer for a portion of its existing senior unsecured notes and a special dividend of $1.25 per share, and for other general corporate purposes. We anticipate that we will withdraw our ratings on Noranda's existing bank credit facilities upon the successful completion of its refinancing," S&P said. "The ratings on Noranda reflect the company's 'vulnerable' business risk profile and 'significant' financial risk profile. The vulnerable business risk profile is reflected in Noranda's limited operating diversity, its exposure to the highly cyclical aluminum industry, and its relatively high cost position (absent earnings credits from bauxite and alumina sales). The significant financial risk profile reflects our expectation that, despite lower aluminum prices, the company will maintain leverage between 4x and 5x and funds from operations to total debt of around 15%," said Standard & Poor's credit analyst Megan Johnston. "The rating and outlook incorporate our expectation that the company will sell more than 580 million pounds of primary aluminum to external customers in 2012, roughly the same amount it sold in 2011. We assume that the company will sell about 80% of the 2012 amount as a value-added product, which would command a premium over the Midwest transaction price. (This price includes the cost of freight and handling to ship aluminum from London Metals Exchange [LME] warehouses to the Midwest.) In addition, we have assumed shipments from Noranda's downstream operations in 2012 to be about 365 million pounds--an amount similar to 2011 levels," S&P said. "Our EBITDA assumptions are sensitive to aluminum prices and fluctuate about $60 million for every 10 cent change in price. We expect EBITDA of about $150 million to $200 million in 2012. This combines the above assumptions with an assumed average LME aluminum price of $0.95 per pound and a Midwest premium of $0.05 compared with an average LME aluminum price of about $1.10 per pound and Midwest premium of $0.075 in 2011. Our EBITDA expectation also factors in relatively flat cash costs over 2011 levels. This, combined with higher debt balances, could result in adjusted leverage of between 4x and 5x--a level we would consider to be acceptable for the current rating," S&P said. "Noranda, a primary aluminum producer with downstream operations, has a vertically integrated upstream segment which can account for more than 80% of EBITDA. However, this segment operates only one smelter, thus highlighting the risk we associate with the company's limited operating diversity since any disruption has the potential to severely affect overall financial results," S&P said. "In our view, the aluminum industry is cyclical and volatile, and profitability suffered during the economic downturn. End-market demand softened materially starting in 2008, and prices declined by about 50% between March 2008 and March 2009, before beginning to recover later in 2009 and 2010. Indeed, prices were less than $0.85 per metric pound for a period of about 12 months, a level at which we believe 50% or more of primary aluminum smelters become unprofitable. Although prices recovered significantly in 2010 and 2011, we expect price volatility to continue and believe that prices could continue to be pressured if high LME inventories begin to flood the market," S&P said. "The stable rating outlook reflects our expectation that Noranda will continue to maintain leverage metrics of 4x to 5x, which we would consider to be in line with the current rating, despite our view of lower aluminum prices in 2012 as compared with 2011. A gradual recovery in end-market demand should also aid operating performance in 2012," S&P said. "A negative rating action could occur if aluminum prices decline to and are sustained below $0.95 for an extended period, resulting in our assessment that the company's liquidity position could tighten significantly and adjusted leverage would likely remain greater than 5x," Ms. Johnston continued. "An upgrade is unlikely at this time given Noranda's vulnerable business risk profile-- owing to its relatively small size, its lack of operating diversity, and its exposure to volatile aluminum price and demand swings." NORTHERN BERKSHIRE: Hearing on Further Cash Access Set for April 2 ------------------------------------------------------------------ The Hon. Henry J. Boroff of the U.S. Bankruptcy Court for the District of Massachusetts, in a seventh interim order, authorized Northern Berkshire Healthcare, Inc., et al.'s continued use of cash collateral. The outstanding principal and interest as of the Petition Date under the Massachusetts Development Finance Agency Bonds and under the master note No. 1 of $13,585,000 in principal and $280,802, respectively. Wells Fargo Bank, National Association is successor to the Bank of New York, as master trustee for the master indenture. The Debtors' authorization to use cash collateral will terminate on the earliest to occur of (i) 5:00 p.m. (Eastern Time) on the date that is two business days after the date of the further hearing; and (ii) the expiration of the cure period following the delivery of a default notice by the master trustee. The Debtors set an April 2 hearing at 10:00 p.m. (ET) on their request for further access to the cash collateral. As reported in the Troubled Company Reporter on Jan. 19, 2012, the Debtors would use the cash collateral to fund their business operations, provided that the actual amount for each line item for expenses in the budget may not exceed the budgeted amount by up to 15%. The Debtor will maintain casualty and loss insurance coverage for the prepetition collateral at all times on substantially the same basis as maintain prepetition. As adequate protection for any diminution in value of the master trustee's interest, the Debtor will grant the master trustee replacement liens, superpriority administrative claim status, subject to carve out on certain fees. 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. NORTHERN BERKSHIRE: Fine-Tunes Plan Ahead of April 2 Hearing ------------------------------------------------------------ Northern Berkshire Healthcare, Inc., et al., filed on Feb. 7, 2012, with the U.S. Bankruptcy Court for the District of Massachusetts, a Final Third Amended Plan of Reorganization and an explanatory Final Third Amended Disclosure Statement. The Plan reflects a negotiated settlement among the Debtors, Nuveen (who holds the majority of the MHEFA Bonds and a substantial portion of the MDFA Bonds), ACA (the insurer of the MDFA Bonds), the Official Committee of Unsecured Creditors of the Debtors, and the Pension Benefit Guaranty Corporation. If the Plan is confirmed by the Bankruptcy Court, MDFA Bondholders and MHEFA Bondholders with Allowed MDFA Note Claims or MHEFA Note Claims will respectively receive, in full satisfaction and discharge of their Claims, new bonds secured by beneficial interests in the New MDFA Note, New MHEFA Note, and the ECF Notes (and, if NARH or NBH affiliates with another healthcare institution under certain conditions, the Affiliation Notes); the Holder of the Allowed VNA Hoosac Bank Secured Claim will receive proceeds of the sale of the VNA Building up to the Allowed amount of its Secured Claim; the Holders of Allowed General Unsecured Claims and the Allowed VNA Hoosac Bank Deficiency Claim will receive, in full satisfaction and discharge of their Claims, their Pro-Rata Share of the Post-Effective Trust Interests; and the Holder of the Allowed PBGC Prepetition Claim will receive, in full satisfaction and discharge of both its PBGC Prepetition Claim and the PBGC Post-Effective Claim, the PBGC Note, which will be secured by all of NBHPG's assets and substantially all of VNA and NBR's real estate assets and repaid with, among other things, the proceeds of sale of substantially all the real estate assets of VNA and NBR. All distributions under the Plan will be made on or soon as practicable after the Effective Date, except as otherwise provided in the Plan. Under the Plan, the projected recovery for these classes are: Class 1A ? NBH MDFA Note Claims 44% Class 1B ? NBH MHEFA Note Claims 44% Class 1C ? NBH PBGC Prepetition Claim 5% Class 1D ? NBH General Unsecured Claims 5% Class 2A ? NARH MDFA Note Claims 44% Class 2B ? NARH MHEFA Note Claims 44% Class 2C ? Capital Lease Claims 100% Class 2D ? NARH PBGC Prepetition Claim 5% Class 2E ? NARH General Unsecured Claims 5% Class 3A ? VNA MDFA Note Claims 44% Class 3B ? VNA MHEFA Note Claims 44% Class 3C ? VNA Hoosac Bank Secured Claim 93.6% - 100% Class 3D ? VNA PBGC Prepetition Claim 5% Class 3E ? VNA General Unsecured Claims 5% Class 3F ? VNA Hoosac Bank Deficiency Claim 5% Class 4A ? NBR MDFA Note Claims 44% Class 4B ? NBR MHEFA Note Claims 44% Class 4C ? NBR PBGC Prepetition Claim 5% Class 4D ? NBR General Unsecured Claims 5% Class 5A ? NBHPG PBGC Prepetition Claim 5% Class 5B ? NBHPG General Unsecured Claims 5% Class 6 ? Other Priority Claims 100% Class 7 ? Other Secured Claims 100% A copy of the Disclosure Statement is available for free at http://is.gd/1w2NwM The Court will convene a hearing on April 2, 2012, at 10:00 a.m., to consider the confirmation of the Debtors' Final Third Amended Plan of Reorganization. Objections, if any to confirmation of the Plan, are due March 22, on or before 4:30 p.m. (prevailing Eastern Time). 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. NORTHWEST PARTNERS: Files Plan; Disclosures Hearing April 26 ------------------------------------------------------------ Northwest Partners has filed a proposed plan of reorganization dated Feb. 15, 2012 and an explanatory disclosure statement. The hearing to consider the adequacy of the information in the Disclosure Statement is scheduled on April 26, 2012, at 2:00 p.m. The Plan designates five classes of claims. Those classes take into account the differing nature and priority of the various classified claims under the Bankruptcy Code. Under the plan, the Debtor will continue to operate its business of leasing its Property post-confirmation. The income generated will be used to fund the Plan. The equity owners of the Debtor will contribute funds as are necessary to implement the Plan. The classification and treatment of claims under the Plan are: A. Administrative Expenses will be paid in full on or before the Effective Date. B. Class 1 (Secured Claim of Federal National Mortgage Association) will be treated as follows: Option I: Reinstatement - Except to the extent that Fannie Mae and the Debtor agree to a less favorable treatment to Fannie Mae, the Allowed Secured Claim of Fannie Mae will be reinstated and rendered unimpaired. Option II: Loan Restructure - The Fannie Mae Allowed Secured Claim will bear interest at the rate of .75% per annum from and after the Effective Date, or another rate as the Court will determine is appropriate at the Confirmation Hearing. On or before the 15th day of each month, the Debtor will distribute to Fannie Mae the Monthly Net Income generated from the Debtor's business operations, up to a maximum amount equal to the normal amortized monthly payment based upon the Fannie Mae Interest Rate and a 30-year amortized mortgage term. C. Class 2 (Fannie Mae Deficiency Claim): Based on the Debtor's projections, the Property will appreciate in value following the Confirmation Date. Following each anniversary of the Effective Date, the Allowed Secured Claim of Fannie Mae will be adjusted to equal the Appreciated Value, and payments will continue to be made. Interest will accrue based on the Fannie Mae Interest Rate applied to the Appreciated Value, and the normalized monthly payment will be based upon the Fannie Mae Interest Rate, the Appreciated Value and a 30-year amortization. D. Class 3 (Washoe County HOME Consortium): The amount of the Washoe County HOME Consortium Allowed Secured Claim will be the lesser of the value of the Property determined as of the Confirmation Date less the Class 1 Allowed Secured Claim or the balance owed under the promissory note as of the Petition Date. The balance owed on the Washoe HOME Allowed Secured Claim, together with any and all accrued interest, fees and costs due will be paid on or before July 1, 2049, or other date as the Debtor may propose at the Confirmation Hearing which is approved by the Court. E. Class 4 (Unsecured Claims): Allowed Unsecured Claims will receive quarterly pro rata disbursements of $l0,000 commencing on the first day of the month at least 90 days following the Effective Date, and continuing on the first day of each and every third month thereafter, until the claims are paid in full. F. Class 5 (Membership Interests): The members will retain their membership interests in the Reorganized Debtor, but will receive no distribution until Classes 1 through 4 are paid in full. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/NORTHWEST_PARTNERS_ds.pdf About Northwest Partners Northwest Partners owns the 268-unit Austin Crest Apartment in Northwest Reno, Nevada. It filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case No. 11-53528) on Nov. 17, 2011. Judge Bruce T. Beesley oversees the case. The Debtor scheduled $13,513,361 in assets and $14,135,158 in liabilities. The petition was signed by Robert F. Nielsen, president of IDN I, the Debtor's general partner. PAPILLON ISLAND: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Papillon Island Trust 23241 Bayshore Road Port Charlotte, FL 33980 Bankruptcy Case No.: 12-10580 Chapter 11 Petition Date: February 21, 2012 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Peter J. Walsh Debtor's Counsel: John D. McLaughlin, Jr., Esq. CIARDI CIARDI & ASTIN 919 North Market Street, Suite 700 Wilmington, DE 19801 Tel: (302) 658-1100 Fax: (302) 658-1300 E-mail: jmclaughlin@ciardilaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Abe Al-Armusi, trustee. PARMALAT SPA: 2nd Cir. Sends Securities Litigation to Illinois -------------------------------------------------------------- The U.S. Court of Appeals for the Second Circuit vacated judgments of the U.S. District Court for the Southern District of New York in the Parmalat Securities Litigation, and remanded the cases to the District Court with instructions to transfer them to the Northern District of Illinois so that they can be remanded to Illinois state court. Parmalat Capital Finance Limited and Dr. Enrico Bondi have taken an appeal from the judgments of the United States District Court for the Southern District of New York (Kaplan, J.) dismissing their claims against Grant Thornton International, Inc., Grant Thornton International Ltd, and Grant Thornton LLP. The cases arise out of the collapse of Parmalat Finanziaria, S.p.A. in 2003. Dr. Bondi represents Old Parmalat's Italian bankruptcy estate as its Extraordinary Commissioner under Italian law. Parmalat's plan of reorganization, the Concordato, was approved after the commencement of the lawsuits, and is proceeding in Italy. PCFL is a Grand Caymans-based corporate subsidiary of Parmalat. PCFL is in liquidation in the Cayman Islands. In 2004, PCFL and Bondi commenced separate proceedings pursuant to former 11 U.S.C. Sec. 304 in the Bankruptcy Court for the Southern District of New York. The proceedings permitted PCFL and Dr. Bondi, as representatives of the foreign bankruptcy estates, to commence bankruptcy cases in the United States in order to enjoin litigation against PCFL and Parmalat in the United States courts. The bankruptcy court entered a preliminary injunction shielding Old Parmalat from American lawsuits. Purchasers of Old Parmalat's debt and equity securities had filed securities fraud class action lawsuits in the United States against Old Parmalat and against various banks and auditing firms that had allegedly participated in the fraud, including Appellees Grant Thornton, who had been auditors for Old Parmalat and PCFL. After the issuance of the preliminary injunction, the securities fraud plaintiffs dropped Old Parmalat as a defendant. In August 2004, Dr. Bondi filed suit in Illinois state court against Grant Thornton, alleging claims arising under Illinois law including professional malpractice, fraud, negligent misrepresentation, and unlawful civil conspiracy. Dr. Bondi filed a similar suit in New Jersey state court against Citigroup. In September 2004, Grant Thornton removed the Illinois case to the United States District Court for the Northern District of Illinois on the basis of 28 U.S.C. Sections 1334(b) and 1452, arguing that removal was proper because the case was "related to" Dr. Bondi's Sec. 304 proceeding in the Southern District of New York. Dr. Bondi filed a motion to remand, arguing that the court was required to abstain from hearing the case pursuant to 28 U.S.C. Sec. 1334(c)(2). The Judicial Panel on Multidistrict Litigation transferred Dr. Bondi's action against Grant Thornton to Judge Kaplan in the Southern District of New York. On Feb. 25, 2005, Judge Kaplan denied Dr. Bondi's motion to remand to state court. The District Court found that it had jurisdiction pursuant to Sec. 1334(b) and that abstention was not mandatory. The District Court denied Dr. Bondi's motion for an interlocutory appeal pursuant to 28 U.S.C. Sec. 1252(b). In December 2005, PCFL filed suit against Grant Thornton in the same Illinois state court, alleging similar claims to those asserted by Dr. Bondi. PCFL also filed a complaint in North Carolina state court against Bank of America alleging some similar claims. Grant Thornton removed the Illinois case to the United States District Court for the Northern District of Illinois, again arguing that removal was proper because the state law claims were related to PCFL's Sec. 304 proceeding. PCFL, like Dr. Bondi, filed a motion to abstain and remand, arguing that abstention was mandatory pursuant to 28 U.S.C. Sec. 1334(c)(2). The Northern District of Illinois denied PCFL's motion. That court then transferred the case to Judge Kaplan in the Southern District of New York for consolidation with Bondi's case. In a separate proceeding, the North Carolina case against Bank of America was also transferred to the Southern District of New York. In October 2005, the Italian bankruptcy court approved the Concordato. Under the Concordato, a newly formed entity, Parmalat, S.p.A. -- New Parmalat -- assumed all of the legal liabilities, as well as the assets, of its predecessor companies. New Parmalat acts as a claims administrator for creditors of Old Parmalat under the Concordato. In June 2007, the District Court denied Dr. Bondi's motion to bar the securities fraud plaintiffs from bringing direct claims against New Parmalat. The District Court also granted a motion to permit Grant Thornton to file third party contribution claims against Parmalat in the securities class action. The securities class actions eventually settled. Meanwhile, the Illinois and North Carolina actions continued in the Southern District of New York. Following discovery, the District Court issued a detailed and thoughtful opinion granting summary judgment to the defendants. With regard to the North Carolina action, the Second Circuit affirmed the District Court's grant of summary judgment to Bank of America. In a separate Opinion regarding the Illinois actions against Grant Thornton, the Second Circuit vacated the decisions not to abstain from deciding these cases pursuant to the mandatory abstention provision in 28 U.S.C. Sec. 1334(c)(2). The Second Circuit remanded the Illinois cases to the District Court for a determination of whether the cases could be "timely adjudicated" in Illinois state court within the meaning of Sec. 1334(c)(2), in accordance with the factors set forth in that Opinion. On remand, the District Court again concluded that mandatory abstention did not apply. PCFL and Dr. Bondi renewed their appeals to the Second Court arguing for mandatory abstention. The appellate case is In re Parmalat Sec. Litig., Nos. 09-4302-cv (L), 09-4306-cv (con), 09-4373-cv (con) (2nd Cir.). The appellate panel is composed of Circuit Judges Jose A. Cabranes and Richard C. Wesley and the Honorable John G. Koeltl, of the United States District Court for the Southern District of New York, sitting by designation. A copy of the Second Circuit's Feb. 21, 2012 per curiam decision is available at http://is.gd/sH7NGTfrom Leagle.com. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court declared the units insolvent. On June 22, 2004, Dr. Bondi, on behalf of the Italian entities, sought protection from U.S. creditors by filing a petition under Sec. 304 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 04-14268). Parmalat's U.S. operations filed for Chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represented the U.S. Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Three special-purpose vehicles established by Parmalat S.p.A. -- Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. -- commenced separate winding up proceedings before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. were appointed liquidators in the cases. On Jan. 20, 2004, the Liquidators filed a Sec. 304 petition (Bankr. S.D.N.Y. Case No. 04-10362). Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represented the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presided over the Parmalat Debtors' U.S. cases and Sec. 304 cases. In 2007, Parmalat obtained a permanent injunction in the Sec. 304 cases. PEAK BROADCASTING: Court Approves Reorganization Plan ----------------------------------------------------- Peak Broadcasting, LLC on Feb. 23 disclosed that the company has received approval from the U.S. Bankruptcy Court on its plan of reorganization. The prepackaged plan, which was approved by the requisite majority of creditors, is the document that addresses how the company will restructure its debt and satisfy creditor claims. The plan provides for continuing payment to Peak's employees, vendors and other unsecured creditors. The confirmation paves the way for the emergence of Peak Broadcasting from Chapter 11 protection. The company anticipates emergence sometime in early March, just two months after the initial filing of its petitions. "I want to thank everyone involved with our organization for the smooth transition through the debt restructuring," stated Todd Lawley, Peak's Chief Executive Officer. "We now have the right capital structure on which to grow our business and support the communities in which we operate. We thank our employees, customers and vendors whose support has never wavered." About Peak Broadcasting, LLC Peak Broadcasting, LLC provides market-leading audio programming, focused advertiser solutions, and innovative traditional and digital media technology. The company is headquartered in Fresno, California. Peak operates five stations in the Fresno market and six stations in the Boise, Idaho market. 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. PEGASUS RURAL: Plan Provides Transfer of 700MHz Assets to NewCo --------------------------------------------------------------- Pegasus Rural Broadband, LLC, et al., filed with the U.S. Bankruptcy Court for the District of Delaware a Plan of Reorganization dated Feb. 7, 2012. The provisions of the Plan will constitute a good faith compromise and settlement of all claims and interests and controversies resolved pursuant to the Plan. Under the Plan, the Debtors and sponsors (the non-Debtor parties to the exit credit facility or an asset purchase agreement, if any) will enter into the exit credit facility which will provide, among other things, for the transfer of the 700 MHz Assets to NewCo for cash consideration equal to the amount necessary to satisfy 100% of each of the: (i) Prepetition Noteholder Claims, (ii) DIP Facility Claims, (iii) Administrative Claims, (iv) General Unsecured Claims; (v) Priority Claims; (vi) Intercompany Claims; and (vii) Interests. As reported in the Troubled Company Reporter on Feb. 10, 2012, in addition to 10,000 customers in smaller markets in parts of Texas, Oklahoma and Illinois, the company says the spectrum licenses are worth $200 million to $400 million, based on "recent transactions" in that frequency band. The licenses were purchased in Federal Communications Commission auctions in 2000 and 2001 for $96 million. The licenses cover geographic areas with a population of 164 million. Debt to be paid in the plan includes $52 million under a secured credit agreement. The plan wasn't accompanied by an explanatory disclosure statement. A full-text copy of the Plan is available for free at http://bankrupt.com/misc/PEGASUS_RURAL_plan.pdf About Pegasus Rural Broadband Pegasus Rural Broadband, LLC, and its affiliates, including Xanadoo Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11772) on June 10, 2011. The Debtors are subsidiaries of Xanadoo Company, a 4G wireless Internet provider. Xanadoo Co. was not among the Chapter 11 filers. The subsidiaries sought Chapter 11 protection after they were unable to restructure $52 million in 12.5% senior secured promissory notes that matured in May. The notes are owing to Beach Point Capital Management LP. Xanadoo Holdings, through Xanadoo LLC -- XLC -- offers wireless high-speed broadband service, including digital phone services, under the Xanadoo brand utilizing licensed frequencies in the 2.5 GHz frequency band. As of May 31, 2011, XLC served 12,000 subscribers in Texas, Oklahoma and Illinois. In the summer of 2010, the Debtors closed all of their retail stores and kiosks in its six operating markets and severed all fulltime sales personnel. Since the closings, the Debtors relied one key retailer in each market to serve as local point of presence to market customer transactions. Judge Peter J. Walsh presides over the case. Rafael Xavier Zahralddin-Aravena, Esq., Shelley A. Kinsella, Esq., and Jonathan M. Stemerman, Esq., at Elliott Greenleaf, in Wilmington, Delaware, serve as counsel to the Debtor. NHB Advisors Inc. is their financial advisors. Epiq Systems, Inc., is the claims and notice agent. Xanadoo Holdings, Pegasus Guard Band and Xanadoo Spectrum each estimated assets of $100 million to $500 million and debts of $50 million to $100 million. The Chapter 11 filing followed the maturity in May 2011 of almost $60 million in secured notes owing to Beach Point Capital Management LP. After filing for bankruptcy, the Debtors faced an effort by the agent for secured noteholders to appoint a trustee or dismiss the case. The agent contended that on the eve of bankruptcy, Xanadoo created a new intermediate holding company to hinder and delay creditors by taking over ownership of the operating companies. The Debtors called the trustee motion a distraction that hindered them from moving the case more quickly. On Oct. 14, 2011, the Court denied the motion to dismiss the Chapter 11 case of Xanadoo Spectrum, LLC, and to appoint a Chapter 11 trustee for Xanadoo Holdings, Inc., Pegasus Rural Broadband, LLC, Pegasus Guard Band, C, and Xanadoo LLC. In December 2011, the Debtors were authorized in December to borrow an additional $500,000 from the parent, bringing the financing package to $3 million. PERFORMANT FIN'L: S&P Assigns Prelim. 'B+' Corp. Family Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B+' corporate credit rating and stable outlook to debt collections agency and recovery services provider Performant Financial Corp. "We also assigned a preliminary 'B+' issue-level rating (at the same level as the preliminary 'B+' corporate credit rating on the company) and preliminary '3' recovery rating to subsidiary DCS Business Services Inc.'s proposed $10 million revolving credit facility, $40 million term loan A, and $70 million term loan B. The preliminary '3' recovery indicates our expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default," S&P said. "These ratings are preliminary and do not consider the risks associated with the company's existing debt, which we understand will be repaid with proceeds from the proposed refinancing. In addition to refinancing approximately $103 million in existing bank debt, the company has said it will partially repay preferred stock," S&P said. "The proposed new credit agreement also allows the company to request a $75 million increase in its term loan B. Given the company's targeted leverage of 3x and clearly stated intention to issue this additional debt to fully repay its preferred stock and fund a $20 million dividend to common shareholders, our corporate credit rating and recovery analysis assume the company incurs the additional $75 million of senior secured debt either in this refinancing or at a later date," S&P said. "The ratings on California-based Performant reflect what we consider the company's 'vulnerable' business risk profile and 'significant' financial risk profile. Our business risk assessment recognizes the long-standing relationships that the company has with its student loan clients and relative predictability of its revenue stream over the short-term horizon based on the deferred payment model on rehabilitated loans. However, these attributes are overshadowed by what we believe is a substantial ongoing business risk: Performant has significant customer concentration, with its top five customers comprising about 74% of its total revenues," S&P said. "The ratings incorporate our expectation that adjusted debt to EBITDA will be in the high-2x area and funds from operations (FFO) to debt will be around 20% by the end of 2012, and anticipate some modest improvement in the company's financial profile beyond that point. Our analysis for 2012 also incorporates revenue growth of around 20% and EBITDA growth of at least 10% as Performant continues to ramp up recovery volumes under its fairly new Medicare recovery program, as well as achieving previously delayed rehabilitation revenue growth in its Department of Education contract. Despite the significant financial risk profile assessment, the company's majority stockholder is private-equity firm Parthenon Capital Partners; we therefore assume the company's longer term financial policy will be aggressive," S&P said. Performant provides collections and related services primarily on student loans for government-backed agencies. Over 95% of annual revenue is success based as a percent of collections made on behalf of its clients, while the rest are incentive based. Performant does not own or assume liability for any of the loans, and only acts as an intermediary to work with borrowers on behalf of its clients, thereby minimizing risk. QUIGLEY CO: Has Until Aug. 24 to Settle Creditor Claims ------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that a New York bankruptcy judge on Wednesday allowed Pfizer Inc. subsidiary Quigley Co. to stay in Chapter 11 for up to six more months, as the insulation maker continues trying to hammer out a deal with asbestos claimants. Law360 relates that the company, which at one point made asbestos- laden insulation, has been closing in for some time on a reorganization plan. It now has until Aug. 24 to settle the creditor claims and work out a plan before its $65 million debtor- in-possession financing agreement expires. About Quigley Co. Quigley Co. was acquired by Pfizer in 1968 and sold small amounts of products containing asbestos until the early 1970s. In September 2004, Pfizer and Quigley took steps that were intended to resolve all pending and future claims against the Company and Quigley in which the claimants allege personal injury from exposure to Quigley products containing asbestos, silica or mixed dust. Quigley filed for bankruptcy in 2004 and has a Chapter 11 plan and a settlement with Chrysler. Quigley filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 04-15739) on Sept. 3, 2004, to implement a proposed global resolution of all pending and future asbestos- related personal injury liabilities. Lawrence V. Gelber, Esq., and Michael L. Cook, Esq., at Schulte Roth & Zabel LLP, represent the Debtor in its restructuring efforts. Elihu Inselbuchm Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it disclosed $155,187,000 in total assets and $141,933,000 in total debts. Quigley has not exited bankruptcy protection more than seven years after filing for bankruptcy. In April 2012, the bankruptcy judge approved a plan-support agreement with Pfizer and an ad hoc committee representing 30,000 asbestors claimants. Futher complicating matters is a May 20, 2012 opinion by District Judge Richard Holwell concluding that Pfizer was directly liable for some asbestos claims arising from products sold by its now non-operating subsidiary Quigley. QUINCY MEDICAL: 2 Officers Seek $603,000 in Severance Pay --------------------------------------------------------- Jessica Bartlett at Crain's New York Business reports that Dr. Apurv Gupta, the former senior vice president for Clinical Affairs/Chief Medical Officer of Quincy Medical Center, and Victor Munger, Senior Vice President of Human Resources, are seeking a total of $603,000 in severance pay that they claim is a part of their contract. According to the report, the two senior executives were ousted days after the Steward Health Care acquired the facility. The executives asserted that they were in good standing with the hospital when the medical center filed for Chapter 11 bankruptcy on July 1 of last year. The report relates that Messrs. Gupta and Munger were both terminated without cause effective Oct. 1, when all the assets of Quincy Medical Center and its affiliates were acquired by Steward Family Hospital, Inc. The report notes that Mr. Munger is claiming $135,000 -- consisting of severance pay of $90,000, or six months salary, and $45,000, representing the minimum three months salary he would have received had Steward hired him, from the center. On the other hand, Mr. Gupta is claiming $468,000 from Quincy Medical Center, which includes $312,000 or 12 months salary, and $156,000, or 180 days salary -- because the hospital failed to give Mr. Gupta the requisite 180 days notice -- a requirement of his contract. About Quincy Medical Center Quincy Medical Center is a 196-bed, nonprofit hospital in Quincy, Massachusetts. Quincy Medical Center, Inc. together with two affiliates, sought Chapter 11 protection (Bankr. D. Mass. Lead Case No. 11-16394) on July 1, 2011. John T. Morrier, Esq., at Casner & Edwards, LLP, in Boston, serves as counsel to the Debtors. Navigant Capital Advisor LLC and Navigant Consulting Inc. serve as financial advisors. Epiq Bankruptcy Solutions LLC is the claims, noticing, and balloting agent. Quincy disclosed assets of $73 million and liabilities of $79.4 million. Debt includes $56.4 million owing on secured bonds issued through a state health-care finance agency. There is another $2.5 million secured obligation owing to Boston Medical Center Corp. Accrued liabilities are $18.2 million. On July 12, 2011, the U.S. Trustee for the District of Massachusetts appointed the Official Committee of Unsecured Creditors. Counsel to the Creditors' Committee is Jeffrey D. Sternklar, Esq., at Duane Morris LLP, in Boston, Massachusetts. Deloitte Financial Advisory Services LLC is the financial advisor to the Creditors' Committee. Quincy sold its hospital facility to Steward Health Care System LLC, in October 2011 for $52.4 million, not enough for full payment to secured bondholders owed $56.5 million. The bonds were issued through a state health-care finance agency. Nonetheless, $562,500 -- not subject to bondholders' deficiency claims -- was set aside for unsecured creditors with claims estimated to total between $6 million and $7 million. The disclosure statement estimated unsecured creditors would recover about 8.4%. In November 2011, the Court approved the Chapter 11 liquidation plan. The Plan was later declared effective on Dec. 7, 2011. RAMZ REAL ESTATE: Case Summary & 2 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: RAMZ Real Estate Co., LLC 13 Huff Road Newburgh, NY 12550 Bankruptcy Case No.: 12-35381 Chapter 11 Petition Date: February 21, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Poughkeepsie) Judge: Cecelia G. Morris Debtor's Counsel: Thomas Genova, Esq. GENOVA & MALIN Hampton Business Center 1136 Route 9 Wappingers Falls, NY 12590-4332 Tel: (845) 298-1600 Fax: (845) 298-1265 E-mail: genmallaw@optonline.net Scheduled Assets: $824,750 Scheduled Liabilities: $1,086,712 The Company's list of its two largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb12-35381.pdf The petition was signed by Ronan O'Neill, managing member. RCR PLUMBING: Has Access to Cash Collateral Until Aug. 13 --------------------------------------------------------- RCR Plumbing and Mechanical, Inc., has obtained consensual order authorizing its use of cash collateral on a final basis, or through Aug. 31, 2012. The Debtor to use cash collateral pursuant to the terms and conditions set forth in the stipulation filed on Jan. 31, 2012. A copy of the stipulation is available for free at: http://bankrupt.com/misc/RCR_PLUMBING_cashcoll_stipulation.pdf The Stipulation states that the Debtor, lender PNC Bank, National Association, and the Official Committee of Unsecured Creditors stipulate to the Debtor's final use of cash collateral in connection with the Debtor's Oct. 12, 2011 emergency motion for order (i) authorizing cash collateral use, and (ii) compelling turnover of estate funds. The Stipulation states that the Debtor can use cash collateral solely to pay the expenses for the period Feb. 7, 2012, through the expiration date Aug. 31, 2012 or the date of default, to the extent actually incurred by the Debtor for its business operations during the case, and not exceed the amounts set forth in the budget by more than 10% in the aggregate. The Debtor was required to provide the Lender and the Committee by Feb. 3, 2012, with an amended budget for the period June 1, 2012, through and including Aug. 31, 2012. On Feb. 2, the Debtor filed an amended budget, a copy of which is available for free at: http://bankrupt.com/misc/RCR_PLUMBING_cashcoll_amendedbudget.pdf The Stipulation says that cash collateral, now or hereafter in possession of the Debtor, will be deposited by the Debtor into the reserve account -- a segregated blocked bank account established with the Lender to be named the RCR - PNC Collateral Account -- and the Debtor's bank accounts established at Wells Fargo Bank, and will be subject to the secured creditors' liens and the postpetition lien. For each month during the operative period, beginning with February 2012, the amounts, if any, will be transferred by the Debtor to the Reserve Account for the Lender's benefit by no later than the 10th calendar day with respect to each preceding month. The Reserve Account will be funded up to the amount of the outstanding irrevocable standby by letters of credit issued by the Lender in favor of Ace American Insurance Co. and Arch Insurance Co., respectively, which collectively total approximately $4,828,000. The Secured Creditors -- the Lender and the Robert C. Richey Family Trust UAD 1/20/97 -- will have and are each granted, effective as of the Petition Date, a replacement lien in all prepetition and postpetition assets. Postpetition Lien in favor of each of Secured Creditors will be senior in priority to any and all prepetition and postpetition claims, rights, liens and interests, but subject only to any lien or security interest that is valid, perfected and senior to the respective interests of the Secured Creditors effective as of the Petition Date. The respective Postpetition Liens of the Secured Creditors will have the same priority as the prepetition lien to which the Postpetition Lien relates. The Debtor will timely pay from the cash collateral all non- default fees and charges related to any letter of credit issued by the Lender and as provided for under the loan documents in the approximate amount of $49,000 per quarter as the amounts become due and payable. The Lender retains any right to seek reimbursement from the Debtor for any draws on letters of credit issued by the Lender, and the Debtor and the Committee retain any and all rights to oppose the same. Upon the Expiration Date and resulting termination of the Debtor's rights to use cash collateral, any and all liens, interests, and claims in favor of the Lender and any and all assets that may be encumbered by or subject to liens, interests, or claims, will be subject to, subordinate, and junior to the claims and rights of payment relating to fees and costs incurred by the Debtor's and the Committee's retained professionals, (a) up to a cumulative aggregate sum of $275,000 for any unpaid and allowed fees and costs incurred by the Professionals during the Prior Interim Period or the Operative Period through the Expiration Date, plus (b) the amount of cash collateral budgeted but not paid for the Professionals. PNC Bank is represented by: J. Alexandra Rhim, Esq. Senior Counsel BUCHALTER NEMER Los Angeles, California Tel: (213) 891-5098 Fax: (213) 630-5698 E-mail arhim@buchalter.com 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. RCR PLUMBING: Gets Extension of Deadline to Decide on Leases ------------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California has extended, at the behest of RCR Plumbing and Mechanical, Inc., the deadline for the Debtors to assume or reject unexpired leases of two commercial real properties for 90 days. As reported by the Troubled Company Reporter on Feb. 21, 2012, Kyra E. Andrassy, Esq., counsel for the Debtor, told 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. RCR PLUMBING: Court Sets March 30 as Claims Bar Date ---------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has established March 30, 2012 as the deadline for all creditors to file a proof of claim or interest. Any creditor that holds an administrative expense claim must file an application for payment of the claim by March 30. 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. RCR PLUMBING: Has OK to Hire Oliva and Assoc. as Special Counsel ---------------------------------------------------------------- RCR Plumbing and Mechanical, Inc., obtained authority from the U.S. Bankruptcy Court for the Central District of California to employ Oliva and Associates, ALC, as its prepetition insurance counsel to continue to advise the Debtor with respect to insurance cover issues. As reported by the Troubled Company Reporter on Feb. 2, 2012, the Debtor proposed that the firm would assist with broader issues as they relate to the insurance carriers, like contractual and collateral requirements and claim handling responsibilities, as necessary. The firm would perform the required services at its customary hourly rates which currently range from $110 to $400 per hour, depending on the experience and expertise of the attorney or paralegal performing the work and will be reimbursed its actual, out-of-pocket expenses. 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. RCR PLUMBING: Gets Nod to Hire KCC as Claims Agent -------------------------------------------------- RCR Plumbing and Mechanical, Inc., obtained approval from the U.S. Bankruptcy Court for the Central District of California to amend the terms of retention of Kurtzman Carson Consultants, LLC. As reported by the Troubled Company Reporter on Dec. 15, 2011, the Debtor said that it was authorized to employ KCC to serve as noticing agent and to provide consulting services. The Debtor then sought authorization to amend KCC's employment to include serving as claims agent, or provide services including, but not limited to, handling and processing claims and setting up the claims register, however, KCC's additional duties will not include any claims acknowledging services. The Debtor will pay KCC's invoice on a monthly basis, and in the event total fees and expenses are expected to exceed $10,000 in any single month, KCC may require advance payment from the Debtor due and payable upon demand and prior to performance of services. KCC will receive a $5,000 retainer as security for payment obligations. 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. REICHHOLD INDUSTRIES: Cut by Moody's to Caa3 After Missed Payment ----------------------------------------------------------------- Moody's Investors Service lowered Reichhold Industries' (Reichhold) Probability of Default (PDR) to Ca/LD from Caa1 and downgraded the Corporate Family Rating (CFR) to Caa3 from Caa1. These actions reflect the recently announced exchange offer for notes due 2014, which Moody's deems to be a distressed exchange. The Caa3 Corporate Family Rating reflects expectations for continued weak operating performance. The /LD (limited default) rating on the PDR will remain in place for three days. The rating outlook is negative. Ratings downgraded: Reichhold Industries, Inc. Probability to default rating -- Ca/LD from Caa1 Corporate Family Rating -- Caa3 from Caa1 $195 million senior unsecured notes due 2014 -- Ca (LGD5, 72%) from Caa2 (LGD4, 64%)** Outlook: Negative ** The rating on the unsecured notes will be withdrawn should all of the existing notes be exchanged. RATING RATIONALE Moody's deems the move from paying cash interest on the notes to paying interest in kind (PIK) to be a distressed exchange. Additionally, a missed payment default may occur if the grace period after the missed February 15, 2012, interest payment on the notes is exceeded prior to the exchange taking place. The downgrade in Reichhold's Caa3 CFR reflects the difficult industry conditions with sales volumes well below 2008 levels and excess capacity that leave the firm with limited options to improve its free cash flow. Raw material inflation and limited pricing power because of the loose supply -- demand balance has resulted in Reichhold's margins remaining below levels achieved prior to the downturn in the housing and construction markets in 2007-08. The exchange offer will allow Reichhold to avoid cash interest payments for two years, saving the firm $35.1 million in cash. Moody's views this a positive for the firm's liquidity, as is the extension of the notes' maturity for about two and one-half years. However, after two years Reichhold will revert to paying cash interest on the new notes balance, which will have increased by almost $60 million because of paying interest in kind and increase the annual cash interest burden from $17.5 million to about $23 million. The principal methodology used in rating Reichhold Industries 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. Reichhold is a leading supplier of unsaturated polyester resins for composites applications and of resins and other polymers for coatings applications. Revenues for the LTM period ending September 30, 2011, were approximately $1.2 billion. RESPONSE GENETICS: Regains NASDAQ Compliance -------------------------------------------- Response Genetics, Inc. was notified that it has regained compliance with The NASDAQ Capital Market and its minimum market value of listed securities requirement. The Company regained compliance with NASDAQ Marketplace Rule 5550(b)(2) and was notified by NASDAQ that the delisting matter is now closed. Response Genetics, Inc. -- http://responsegenetics.com/-- is focused on the development and sale of molecular diagnostic tests for cancer. RGI's technologies enable extraction and analysis of genetic information from genes derived from tumor samples stored as formalin-fixed and paraffin-embedded specimens. In addition to diagnostic testing services, RGI also generates revenue from the sales of its proprietary analytical pharmacogenomic testing services of clinical trial specimens to the pharmaceutical industry. The Company's headquarters is located in Los Angeles, California. ROTHSTEIN ROSENFELDT: Fund Objects to $70MM Bank Settlement ----------------------------------------------------------- Sindhu Sundar at Bankruptcy Law360 reports that CBM Capital LLC on Tuesday opposed a $70 million settlement between Gibraltar Private Bank & Trust and bankruptcy trustees over Gibraltar's alleged involvement in a $1.2 billion Ponzi scheme perpetrated by former attorney Scott Rothstein. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. RP EDGINGTON: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: RP Edgington Enterprises, Inc. aka FLOORCO 87 S. William Dillard Drive Gilbert, AZ 85233 Bankruptcy Case No.: 12-03027 Chapter 11 Petition Date: February 21, 2012 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: D. Lamar Hawkins, Esq. AIKEN SCHENK HAWKINS & RICCIARDI PC 4742 North 24th Street, Suite 100 Phoenix, AZ 85016 Tel: (602) 248-8203 Fax: (602) 248-8840 E-mail: dlh@ashrlaw.com Estimated Assets: $1,000,001 to $10,000,000 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 Reno P. Edgington, president. SBA COMMS: S&P Puts 'B+' Corp. Credit Rating on Watch Negative -------------------------------------------------------------- Standard & Poor's Ratings Services placed all its ratings of SBA Communications Corp. on CreditWatch with negative implications, including its 'B+' corporate credit rating, its 'BB' issue-level rating on its subsidiary's secured credit facilities, and its 'B+' issue-level rating on its unsecured notes. "The ratings on Mobilitie Investments II LLC, including our 'B' corporate credit rating, remain unchanged, and will be withdrawn when this transaction is completed, since borrowings under their credit facilities will be repaid at time of the close and subsequently cancelled," S&P said. "The CreditWatch listing reflects our expectations that SBA's leverage will increase due to the proposed acquisition of the Mobilitie assets, to around the low-9x area, including our adjustments. This compares with SBA's current stand-alone leverage of about 8.8x for the 12 months ended Sept. 30, 2011, for which we did not expect material improvement," S&P said. "The combination may also lead us to revise our 'strong' business risk profile assessment on SBA (as defined in our criteria). Mobilitie's tower cash flow margin is lower than that of many of the other tower operators, since its towers are relatively new and it has fewer carriers as tenants on each tower site. Moreover, Mobilitie's business model has included revenue sharing with anchor tenants as an incentive to spur additional tenants, which in our view, limits future margin expansion compared with the peer group," S&P said. "We consider Mobilitie Investments II LLC (B/Stable/--), which is the larger part of the Mobilitie assets to be acquired, to have a 'satisfactory' business risk profile (as defined in our criteria), with significant customer concentration; T-Mobile USA represents roughly 60% of its revenues," S&P said. "While SBA has a $500 million financial commitment for the cash portion of the transaction, we will evaluate its longer term funding plans, as well as its financial policy, which we have always considered very aggressive, in resolving the CreditWatch," S&P said. "We expect the transaction to close in the second quarter of 2012. We plan to resolve the CreditWatch within the next 90 days, once we have gotten clarity on SBA's longer term financial policy, including targeted leverage under our adjustments, and can assess business prospects for the acquired towers. However, given the favorable fundamentals of the tower leasing business, including very predictable cash flows, if a downgrade were to occur, it would likely be limited to one notch," S&P said. SEARCHMEDIA HOLDINGS: Names Peter Tan as Chief Executive Officer ---------------------------------------------------------------- SearchMedia Holdings Limited has appointed Peter W.H. Tan, a current member of the Company's Board of Directors, as its Chief Executive Officer. Additionally, the Company announced that it has entered into an agreement for a new $3,000,000 Convertible Note with Frost Gamma Investments Trust, an entity affiliated with Dr. Phillip Frost, the Company's largest shareholder and several other investors, including TGC Financial Partners Limited, and entity affiliated with Mr. Tan, and CS Capital USA, LLC, an entity affiliated with Chien Lee, an advisor to the Company. Paul Conway, the Company's former Chief Executive Officer, will be appointed to the Company's Board of Directors in the near future and will serve as a consultant to the Company. The Note has a one year term and borrowings bear interest at a rate of 10% per annum. In addition, the Note is convertible into the Company's common shares at $1.25 per share. The Company anticipates that proceeds from the Note will be utilized to fund the repurchase of shares at an average price per share of $0.25 that was announced on Jan. 26, 2012, from the partial settlement of the arbitration with predecessor shareholders. Other proceeds from the Note are anticipated to be utilized for new concessions, acquisitions and general working capital purposes. Robert Fried, Chairman of the Board of Directors of SearchMedia, commented, "We are pleased that Peter has agreed to serve as our Chief Executive Officer. It is a great challenge for a U.S. listed company operating in China to find someone of Peter's talent and experience. He is trustworthy, communicates excellently, understands the needs of U.S. public investors as well as the ground level business needs of a Chinese media company. He is passionate, bold and creative. We consider this a major step toward our goal of being the best run, most trusted company in the China advertising space. Peter has been very active in the China media industry in the last decade and, through a major US fund which invested in more than 40 companies in China, was an early investor, board member or observer in AirMedia (NASDAQ:AMCN), Bona Entertainment Group (NASDAQ: BONA) Home Inns (NASDAQ: HMIN) and E-House (NYSE: EJ), and previously served as an attorney with White & Case LLP and Perkins Coie LLP. We thank Paul for his service and look forward to him bringing his investment banking expertise and knowledge of the Chinese media and advertising markets, and M&A contacts, to the Company as a consultant and future Board member." Wilfred Chow, the Company's Chief Financial Officer comments, "We are pleased by the additional capital commitment and support from our investors, including new CEO, Peter Tan, which allows us to further capture the attractive market opportunities within China's media industry. Dr. Frost and the members of the Frost Group have been very supportive of the Company, including strategic, operational and financial support and we intend to continue a very close relationship with them. We are pleased to have added Chien Lee as an advisor to the Company in September 2011. Chien is a Co-Founder of 7 Days Group Holding Limited (NYSE: SVN), one of China 's leading economy hotel chains. In addition, Chien was Chairman of CS China Acquisition Corp., which completed its initial business combination in 2010 with Asia Gaming & Resorts, Ltd. to form Asia Entertainment and Resources, Ltd. (NASDAQ: AERL) one of the leading operators of VIP gaming rooms in Macau." 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. SHAMROCK-SHAMROCK: Has Jeffrey Badgley for State Suit ----------------------------------------------------- Shamrock-Shamrock Inc. asks the Bankruptcy Court for authorization to retain Jeffrey Scott Badgley, Esq., as attorney to represent the Debtor in certain State Court litigation proceedings. The Debtor is in need of an attorney versed in legal malpractice and litigation to represent the Debtor-in-Possession before State Court relating to Claims against a former attorney for the Debtor and his firm for alleged legal malpractice related to foreclosure defense. These claims would generate funds to be paid to unsecured creditors in the Chapter 11 Plan of the Debtor. There is currently pending before the Circuit Court, a claim by the principal of the Debtor, Patrick Sullivan, for the same legal malpractice as related to his personal damages. As a result of the property at issue being titled in the name of the Debtor, the Debtor is expected to file suit and combine the damage claims as one action. Mr. Badgley will be compensated for the representation in the state court litigation at his hourly rate of $250 per hour. Mr. Badgley can be contacted at: Jeffrey Scott Badgley, Esq. 827 Irma Avenue Orlando, Florida 32803 Tel: (407) 781-0420 About Shamrock-Shamrock Inc. Daytona Beach, Florida-based Shamrock-Shamrock Inc. owns 70 parcels of Florida real property. It filed for Chapter 11 protection (Bankr. M.D. Fla. Case No. 11-07061) on May 10, 2011. Judge Arthur B. Briskman presides over the case. The Law Offices of Mickler & Mickler serves as bankruptcy counsel. The Debtor tapped George Gingo, Esq., to represent the Debtor in certain claims litigation proceedings; Stephen R. Ponder to represent the Debtor in certain state court litigation proceedings, and Marshall J. Gilmore, Esq., to represent in certain state court litigation proceedings. The Debtor disclosed in its amended schedules $12,904,154 in assets and $17,036,102 in liabilities. In the original schedules, the Company disclosed assets of $12,904,154 and liabilities of $17,021,201, owing on mortgages to a variety of lenders. SKINNY NUTRITIONAL: Signs Exclusive Pact with Cott Subsidiary ------------------------------------------------------------- Skinny Nutritional Corp. entered into an exclusive agreement with the Cliffstar subsidiary of the Cott Corporation. Cott operates soft drink, juice, water and other beverage bottling facilities in the United States, Canada, the U.K. and Mexico. Cott markets beverage concentrates in over 50 countries around the world. Independently, SkinnyWater is quickly expanding its popular beverage line, which is now available in all 50 states, along with the rapidly increasing demand among retailers for the products. As a result of this agreement, Skinny Nutritional's line of Skinny Water zero-calorie enhanced beverages will be exclusively manufactured and distributed by Cott to selected new and existing customers through its retail channels, providing increased scalability for the Skinny Water brand. This agreement spans beverage production, raw materials procurement, research and development, freight management and retail inventory management. The agreement comes on the heels of Skinny Nutritional Corp.'s addition of many new regional distributors and new chain store authorizations in 2011. "We are extremely excited to announce this strategic relationship with Cliffstar," said Michael Salaman, CEO of Skinny Nutritional Corporation. "This agreement allows us to do business with some of the largest retailers in the country and concentrate our resources on marketing and sales. We will be closely working with Cliffstar to introduce and aggressively market Skinny Water throughout the territory. As demand continues to rise, our retail channels are becoming increasingly aware that the concept of 'Skinny' works everywhere." "We are excited to support Skinny Water in their continued growth," said Mike Gibbons, President of Cott's U.S. business unit. "We think that 'Skinny ' is an exciting brand and the company's mission to provide healthy beverages is right in tune with today's marketplace. Cott is very careful when selecting new beverages to take to market, so considering Skinny Water's exceptional taste and zero-calorie characteristics it was an easy decision, which we believe will resonate with health-conscious consumers." About Skinny Nutritional Bala Cynwyd, Pa.-based Skinny Nutritional Corp. (OTC BB: SKNY.OB) -- http://www.SkinnyWater.com/-- has developed and is marketing a line of enhanced waters, all branded with the name "Skinny Water" that are marketed and distributed primarily to calorie and weight conscious consumers. The Company reported a net loss of $6.91 million in 2010, compared with a net loss of $7.30 million in 2009. The Company also reported a net loss of $5.86 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $3.22 million in total assets, $3.58 million in total liabilities, all current, and a $366,271 stockholders' deficit. As reported by the TCR on April 25, 2011, Marcum, LLP, in Bala Cynwyd, Pennsylvania, 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 had a working capital deficiency of $3,517,280, an accumulated deficit of $37,827,090, stockholders' deficit of $2,658,043 and no cash on hand. The Company had net losses of $6,914,269 and $7,305,831 for the years ended Dec. 31, 2010 and 2009, respectively. Additionally, the Company is currently in arrears under its obligation for the purchase of trademarks. Under the agreement, the seller of the trademarks may choose to exercise their legal rights against the Company's assets, which includes the trademarks. SNOKIST GROWERS: Wants to Use $75,000 for Repair and Maintenance ---------------------------------------------------------------- Snokist Growers asks the U.S. Bankruptcy Court for the Eastern District of Washington to modify the third interim cash collateral order entered on Jan. 30, 2012. The Jan. 30, 2012 order authorized, on an interim basis, the Debtor to use the cash collateral which Rabo Agrifinance, Inc. and KeyBank, N.A., assert an interest. Pre-bankruptcy, Rabo and KeyBank provided the Debtor with a $27 million revolving line of credit. Roughly $26.5 million of the facility is currently outstanding. The debt is secured by substantially all of Snokist's operating assets, including raw product, inventory, equipment and accounts receivable. The Court also ordered that the status conference on the Debtor's motion is scheduled for March 30, at 1:30 p.m. by telephone conference call (Call In Number 509-353-3192). The continued final cash collateral hearing well as the continued hearing on Community Bank's motion for adequate protection will be held in Court on April 3, commencing at 10:00 a.m. The Debtor relates that it has executed a memorandum of understanding with Truitt Brothers, Inc., on Jan. 24. The MOU generally outlines a transaction in which TBI will purchase substantially all of the assets of Snokist for a price sufficient to pay substantially all of Snokist's secured and unsecured creditors in full. The MOU contemplates a date for closing the sale of March 15. As a result of the March 15 deadline, and performing due diligence, TBI believes that the employees must be retained pending closing of the TBI transaction. The Debtor relates that its previous staffing plans contemplated that its would make significant layoffs of personnel beginning Feb. 3. In this relation, the Debtor relates that between Feb. 3 and March 15, it would incur labor costs of approximately $75,000 related to the repair and maintenance operations. The Debtor believes that the minimal repair and maintenance operations being proposed will increase the chances that the TBI transaction can be successfully consummated. 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 Lane Powell PC. SOUTHWEST HEALTH: Case Summary & 3 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Southwest Health Care Properties, LLC 3391 Old Getwell Road Memphis, TN 38118 Bankruptcy Case No.: 12-21854 Chapter 11 Petition Date: February 21, 2012 Court: United States Bankruptcy Court Western District of Tennessee (Memphis) Judge: David S. Kennedy Debtor's Counsel: John L. Ryder, Esq. HARRIS SHELTON HANOVER WALSH, PLLC One Commerce Square, Suite 2700 Memphis, TN 38103-2555 Tel: (901) 525-1455 E-mail: jryder@harrisshelton.com Scheduled Assets: $4,500,000 Scheduled Liabilities: $3,329,529 A list of the Company's three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/tnwb12-21854.pdf The petition was signed by Steve Brookins, chief manager. SRCR LLC: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------ Debtor: SRCR, LLC P.O. Box 2101 Wilmington, NC 28402 Bankruptcy Case No.: 12-01339 Chapter 11 Petition Date: February 21, 2012 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: William P Janvier, Esq. JANVIER LAW FIRM, PLLC 1101 Haynes Street, Suite 102 Raleigh, NC 27604 Tel: (919) 582-2323 Fax: (866) 809-2379 E-mail: bill@janvierlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A list of the Company's six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nceb12-01339.pdf The petition was signed by James Keith Stark, member/manager. SWAMI SHREE: Can Use Cash Collateral Through March 16 ----------------------------------------------------- Bankruptcy Judge David E. Rice signed off on a Stipulation and Consent Order further extending an interim agreement between Swami Shree LLC and its senior creditor, S4H Hospitality LLC, allowing the Debtor to use cash collateral and granting adequate protection through March 16, 2012. First-Citizens Bank & Trust Company is the Debtor's junior creditor. On Aug. 12, 2011, the Court entered a Consent Order Approving Interim Agreement for Use of Cash Collateral, Authorizing Debtor to Use Cash Collateral, and Granting Adequate Protection. The Interim Order covered the period through Sept. 15, 2011. The Interim Order has been subsequently amended, the latest through Feb. 15, 2012. The Debtor said it has a continuing need to use Cash Collateral to fund the operation of its business. The Stipulation includes a budget stating the Debtor's cash requirements for the period from February through March 2012. The Stipulation requires the Debtor to continue to escrow $8,500 per month to be applied to the so-called PIP expenditure required by its franchisor. The Debtor will also pay the Senior Creditor $15,000 on or before March 21, 2011, as additional adequate protection. A copy of the Stipulation and Consent Order, signed Feb. 21, 2012, is available at http://is.gd/Cdjfsyfrom Leagle.com. About Swami Shree Based in Media, Pennsylvania, Swami Shree, LLC, owns and operates a La Quinta franchised hotel, containing 70 suites and amenities, located at 304 Belle Hill Road, in Elkton, Maryland. Swami Shree filed a Chapter 11 petition (Bankr. D. Md. Case No. 11-25973) on Aug. 4, 2011. Curtis C. Coon, Esq., at Coon & Cole, LLC, serves as the Debtor's bankruptcy counsel. The Debtor scheduled $338,140 in assets and $4,861,772 in debts. The petition was signed by Vasudev Patel, managing member. Attorney for senior lender SS4H Hospitality LLC is Alan M. Grochal, Esq., at Tydings & Rosenberg LLP, in Baltimore, Maryland. Attorney for junior lender First-Citizens Bank & Trust Company is Peter J. Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware. TELECONNECT INC: Incurs $1.2 Million Net Loss in Dec. 31 Quarter ---------------------------------------------------------------- Teleconnect Inc. filed with the U.S. Securities and Exchange Commission a Form 10-Q reporting a net loss of $1.23 million on $19,385 of sales for the three months ended Dec. 31, 2011, compared with net income of $505,100 on $11,971 of sales for the same period a year ago. The Company reported a net loss of $3.26 million on $112,722 of sales for the year ended Sept. 30, 2011, compared with net income of $1.97 million on $254,446 of sales during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $7.28 million in total assets, $10.47 million in total liabilities, all current, and a $3.19 million total stockholders' deficit. Coulter & Justus, P.C., in Knoxville, Tenn., expressed substantial doubt about the Company's ability to continue as a going concern following the fiscal 2011 financial results. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency in addition to a working capital deficiency. A full-text copy of the Form 10-Q is available for free at: http://is.gd/kbPtCB About Teleconnect Inc. Based in Breda, in The Netherlands, Teleconnect Inc. (OTC BB: TLCO) Teleconnect Inc. (initially named Technology Systems International Inc.) was incorporated under the laws of the State of Florida on November 23, 1998. Serving as a telecommunications service provider in Spain for almost 9 years, the Company never fully reached expectations and decided late in 2008 to change its course of business. In November 2009, 90% of the Company's telecommunication business was sold to a Spanish group of investors, and on October 15, 2010, the Company completed the acquisition of Hollandsche Exploitatie Maatschappij BV (HEM), a Dutch entity established in 2007. HEM's core business involves the age validation of consumers when purchasing products which cannot be sold to minors, such as alcohol or tobacco. The Company regards this age validation business as its new strategic direction. The Dutch companies acquired in 2007 (Giga Matrix, The Netherlands, 49% and Photowizz, The Netherlands, 100%) are considered to function complementary to this new service offering. Through the purchase of HEM and its ownership in Photowizz and Giga Matrix the Company now controls all four pillars under its business model: the manufacturing and leasing of electronic age validation equipment, the performance of age validation transactions remotely, the performance of market surveys and the broadcasting of in-store commercial messages using the age validation equipment in between age checks. TELLICO LANDING: Has Until Today to File New Plan Documents ----------------------------------------------------------- The Bankruptcy Court authorized Tellico Landing, LLC, to file an amendment to its Disclosure Statement in connection with its Chapter 11 Plan until today. The Debtor requested additional time to amend the Disclosure Statement in order to address the issue surrounding the amenities to be provided to lot owners at Rarity Pointe and to address the status of the federal court litigation involving Mike Ross. As reported by the TCR on Feb. 9, 2012, the U.S. Trustee filed an objection to the Disclosure Statement asserting, among other things, that the Disclosure Statement should (a) disclose any litigation in which the Debtor or any principal of the Debtor is a party, its status, and its potential impact on the Plan of any adverse ruling and (b) specifically state whether the creditors retain acceleration and foreclosure remedies under their former contracts in the event the Plan does not succeed. 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. TRIBUNE CO: Says SLCFC Actions Will Delay Plan Process ------------------------------------------------------ Deutsche Bank Trust Company Americas, Law Debenture Trust Company of New York, and Wilmington Trust Company, are asking the U.S. Bankruptcy Court for the District of Delaware to lift the stay of prosecution of the state law constructive fraudulent conveyance actions imposed pursuant to the Court's April 25, 2011 order. On June 2 and 3, 2011, the Indenture Trustees commenced the SLCFC Actions by filing complaints in three state courts -- New York, Delaware and California -- and 20 federal district courts across the country including Arizona, California, Colorado, Connecticut, the District of Columbia, Florida, Illinois, Indiana, Massachusetts, Maryland, Minnesota, North Carolina, New Jersey, Ohio, Pennsylvania, Texas, Virginia, Vermont, Washington and Wisconsin. In accordance with the April 25 Order, the Indenture Trustees sought to stay the SLCFC Actions pending further order lifting the stays, and successfully obtained such stays in nearly all of the SLCFC Actions. They subsequently filed additional SLCFC Actions in Colorado, Texas and New York district courts. By this motion, the Indenture Trustees ask the Bankruptcy Court to lift the stay of the SLCFC Actions directed by the April 25 Order, so that the SLCFC Actions transferred to the New York District Court, and the California Action, can proceed on a schedule and in a manner to be determined by the courts presiding Aurelius Capital Management, LP, on behalf of its managed entities, joins in the Indenture Trustees' motion to lift the U.S. Bankruptcy Court for the District of Delaware's stay of prosecution of the state law constructive fraudulent conveyance actions. The request, however, drew objections from the Debtors; JPMorgan Chase Bank, N.A.; the Official Committee of Unsecured Creditors; Morgan Stanley & Co. LLC; The Times Mirror Company retirees; Artis Capital Management, the president and fellows of Harvard College, and Marcia Tingley; the Henry Francis Dupont Winterthur Museum, Inc.; and defendants to the SLCFC Actions composed of directors and officers of the Debtors and Merrill Lynch Capital Corporation. The Debtors, joined by JPMorgan, complain that lifting the stay of the SLCFC Claims before the Bankruptcy Court issues its next confirmation decision can only distract the Debtors' efforts towards confirmation of the Chapter 11 Plan and impede their prompt emergence from bankruptcy. The Creditors' Committee and the rest of the parties who raised objections to the Lift Stay Motion assert that the stay of the state law actions should be coordinated with the stay of the FitzSimons Actions so that litigants in the actions would not be unduly burdened. Allowing the state law actions and the FitzSimons Actions to proceed in an uncoordinated manner increases the risk and costs to defendants without providing any measurable benefit to any other parties-in-interest, Morgan Stanley asserts. Merrill Lynch Capital Corporation; Merrill Lynch, Pierce, Fenner & Smith Incorporated and certain of their affiliates ask that if the Court grants the Indenture Trustee's Motion, the order should clarify that it will not (i) prejudice or impair any claims or defenses of any defendant with respect to a Creditor SLCFC Claim, and (ii) make no finding and issues no ruling determining the standing of the Original Plaintiff Group to assert the Creditor SLCFC Claims or whether those claims are preempted or otherwise affected by Section 546(e) of the Bankruptcy Code. The Henry Francis Dupont Museum proposes that the Court should broaden the stay to allow parties involved in the constructive fraudulent conveyance litigation to seek discovery from the Debtors and bring claims against the Debtors' officers and advisers. Indenture Trustees Talk Back Counsel to Deutsche Bank Trust Company Americas, Katharine L. Mayer, Esq., at McCarter & English LLP, in Wilmington, Delaware, argues that the Debtors and other parties' concern that Judge Holwell's management of the MDL cases somehow will conflict with the ongoing Chapter 11 cases are misguided. While a confirmation hearing is scheduled for May, it will not involve litigation of standing, Section 546(e), or other preliminary issues that may arise in the MDL Proceedings, Ms. Mayer points out. Even if the MDL Court was to embark immediately on the myriad preliminary tasks necessary to the orderly management of the consolidated cases, the chances that substantial MDL litigation would occur before the May confirmation hearing are very small, she asserts. "The only chance for Tribune's non-LBO creditors to be made whole lies in a successful prosecution of these claims, and these actions should now get underway," she tells Judge Carey. The parties' other concern that scheduling for the FitzSimons Action will be out of sync with the SLCFC Actions and other cases transferred to the MDL if the stay is lifted is similarly unfounded, Ms. Mayer avers. She asserts that the stay currently in place in the MDL will apply equally to the FitzSimons Action as soon as it is transferred, and Judge Holwell thereafter will determine an appropriate schedule on which the coordinated matters will move forward. In contrast, the Bankruptcy Court's original justifications for the stay of the SLCFC Actions no longer exist, Ms. Mayer argues. She recalls that the stay of the SLCFC Actions was intended only to ensure that the parties-in-interest to the then-pending confirmation litigation -- including former Tribune shareholders the Robert R. McCormick Tribune Foundation and the Cantigny Foundation -- would have a full and fair opportunity to present objections to the competing plans based on arguments that Section 546(e), and theories of federal preemption and standing, precluded Tribune creditors from pursuing the SLCFC Actions. Now that the Bankruptcy Court has ruled that these issues should be determined by the courts presiding over the SLCFC Actions, she points out. Ms. Mayer notes that the SLCFC Actions originally filed in, or removed to, federal courts all have been transferred to the MDL Court for coordinated or consolidated pretrial proceedings before Judge Holwell. In this light, the TM Retirees can not expect the Bankruptcy Court to hold nearly 50 actions in abeyance simply because they are now unprepared or unwilling to prosecute their own actions, and -- in any event -- should not expect the Bankruptcy Court to continue to dictate the schedule of their SLCFC Actions after they purposefully sought to have their cases consolidated before Judge Holwell in the MDL, she adds. In response to the Indenture Trustees' reply, the McCormick Entities object to the Indenture Trustees' assertion that their not objecting to the Lift Stay Motion has signaled their tacit agreement with the Indenture Trustees' position. Counsel to the McCormick Entities, Richard W. Riley, Esq., at Duane Morris LLP, in Wilmington, Delaware -- rwriley@duanemorris.com -- clarifies that his clients' silence should not be construed as an endorsement of either side's position, and that the McCormick Entities need not file a joinder or objection to every motion that before the Bankruptcy Court. Morgan Stanley is represented by: David M. Powlen, Esq. E. Rebecca Workman, Esq. BARNES & THORNBURG LLP 1000 North West Street, Suite 1200 Wilmington, DE 19801 Telephone: 302-888-4536 E-mail: david.powlen@btlaw.com rebecca.workman@btlaw.com -- and -- Jonathan D. Polkes, Esq. Michael F. Walsh, Esq. Richard Slack, Esq. WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153 Tel: (212) 310-8000 E-mail: jonathan.polkes@weil.com michael.walsh@weil.com richard.slack@weil.com Merrill Lynch is represented by: Laurie Selber Silverstein, Esq. R. Stephen McNeill, Esq. POTTER ANDERSON & CORROON LLP 1313 N. Market Street, 6th Floor Wilmington, DE 19899 Tel: (302) 984-6000 E-mail: lsilverstein@potteranderson.com rmcneill@potteranderson.com -- and -- Madlyn Gleich Primoff, Esq. Jane W. Parver, Esq. KAYE SCHOLER LLP 425 Park Avenue New York, NY 10022 Tel: (212) 836-800 E-mail: mprimoff@kayescholer.com jparver@kayescholer.com Henny Francis Winterthur is represented by: Joseph Grey, Esq. CROSS & SIMON, LLC 913 North Market Street, 11th Floor P.O. Box 1380 Wilmington, DE 19899-1380 Tel: (302) 777-4200 Fax: (302) 777-4224 E-mail: jgrey@crosslaw.com Crane Keeney is represented by: Kathleen M. Miller, Esq. SMITH, KATZENSTEIN & JENKINS LLP The Corporate Plaza 800 Delaware Avenue, Suite 1000 Wilmington, DE 19899-0410 Tel: (302) 652-8400 Fax: (302) 652-8405 E-mail: kmiller@skjlaw.com -- and -- Richard A. Saldinger, Esq. Allen J. Guon, Esq. Kimberly Bacher, Esq. SHAW GUSSIS FISHMAN GLANTZ WOLFSON & TOWBIN LLC 321 N. Clark St., Suite 800 Chicago, IL 60610 Tel: (312) 276-1325 Fax: (312) 275-0566 E-mail: rsaldinger@shawgussis.com aguon@shawgussis.com kbacher@shawgussis.com Charles Baugh, et al., are represented by: Daniel K. Hogan, Esq. THE HOGAN FIRM 1311 Delaware Avenue Wilmington, DE 19806 Tel: (302) 656-7540 Fax: (302) 656-7599 E-mail: dkhogan@dkhogan.com -- and -- Frances Gecker, Esq. Reed Heiligman, Esq. FRANK/GECKER LLP 325 North LaSalle Street, Suite 625 Chicago, Illinois 60654 Tel: (312) 276-1400 Fax: (312) 276-0035 E-mail: fgecker@fgllp.com rheiligman@fgllp.com About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Tribune CRO Don Liebentritt said it is possible the media company could emerge late in the third quarter of 2012. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: $30-Mil. Letter of Credit Extended to April 2013 ------------------------------------------------------------ Tribune Co. and its affiliates sought and obtained permission from the Court to enter into an amendment no. 5 to the $30,000,000 Letter of Credit Agreement with Barclays Bank PLC. The request was unopposed. The Debtors' current letter of credit facility pursuant to the Amended Letter of Credit Agreement, as amended and authorized pursuant to the Fourth Financing Order, terminates on April 20, 2012. The Amended Letter of Credit Agreement provides a letter of credit facility in an amount up to $30 million. Bryan Krakauer, Esq., at Sidley Austin LLP, in Chicago, Illinois, noted that the Debtors have letters of credit issued on their behalf by Barclays as Agent under the Amended Letter of Credit Agreement and need to ensure continued access to the Letter of Credit Facility to adequately support their insurance programs and business operations. Accordingly, the parties entered into Amendment No. 5 to the Letter of Credit Agreement, which will, among other things, extend the Termination Date to the earliest to occur of (a) April 10, 2013, (b) the effective date of a plan of reorganization under the Chapter 11 cases, or (c) other date on which the Commitments terminate pursuant to Section 9 of the Amended Letter of Credit Agreement. The Debtors' access to the Letter of Credit Facility will ensure that the "going concern" value of the assets are preserved and substantially greater than the value of the assets if the funding was denied, Mr. Krakauer told the Court. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Tribune CRO Don Liebentritt said it is possible the media company could emerge late in the third quarter of 2012. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Asks for Court Nod of Local TV License Agreement ------------------------------------------------------------ Debtor Tribune Broadcasting Company sought and obtained permission from the Court to enter into a license agreement with Local TV, LLC. Tribune Broadcasting is an indirect subsidiary of Tribune Co. and is the parent company of each of the entities that comprise the Broadcasting segment of Tribune Co. Local TV owns 18 television stations in the United States. Tribune Broadcasting (or its subsidiaries or parent) is party to several agreements with Local TV or its affiliates that benefit Tribune Broadcasting's operations. Pursuant to local marketing agreements or LMAs, Local TV provides programming and related operational and programming services to two television stations that are owned by the Debtors: (i) KWGN-TV in Denver, Colorado; and (ii) KPLR-TV in St. Louis, Missouri. The LMAs enable the KWGN and KPLR stations to integrate operating facilities, production of local news, and certain programming functions. Moreover, a management services agreement among the companies, Tribune and certain of its subsidiaries, including Tribune Broadcasting, provides certain management services to Local TV's television stations, including systems development. Tribune Broadcasting has developed certain broadcasting systems and software as described in the License Agreement. In general, the System is used or is intended to be used in the day-to-day operations of broadcast stations operated by Tribune Broadcasting. Local TV reimbursed Tribune Broadcasting for approximately half of the development costs associated with the System and seeks to utilize the System in the operation of certain of its broadcast stations. Because of Local TV's reimbursement of development costs associated with the System, Tribune Broadcasting and Local TV have engaged in negotiations regarding granting Local TV a license to the System and associated intellectual property rights in the System. Accordingly, Tribune Broadcasting and Local TV entered into the License Agreement, which salient terms include: (a) Tribune Broadcasting grants to Local TV and its affiliates a non-exclusive license to the System and to the System IP Rights; (b) exercise of the Licensed Rights by Local TV and its affiliates is restricted, and neither Local TV nor its affiliates have the right to transfer or assign the System or the licensed System IP Rights to any third party, except in connection with an enumerated list of transactions; (c) Tribune Broadcasting is the sole and exclusive owner of the System and System IP Rights; (d) Tribune Broadcasting, in its discretion, has the sole and exclusive right to commercialize the System and System IP Rights to third parties; and (e) the License Agreement is conditioned on Court approval. The parties have also agreed to certain other commercial terms, covenants, indemnification provisions, termination procedures, disclaimers, and confidentiality provisions. Tribune Broadcasting obtained Court authorization to enter into the License Agreement, to the extent it represents a compromise of estate claims related to the System and the System IP Rights. Tribune Broadcasting also won Court permission to file under seal the License Agreement to protect information that is deemed confidential. The License Agreement provides appropriate clarity allowing Tribune Broadcasting to continue to invest in and innovate with respect to the System and System IP Rights to the financial benefit of Tribune Broadcasting, Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, told the Court. The Court granted the Debtors' request after a certification of no objection was filed. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Tribune CRO Don Liebentritt said it is possible the media company could emerge late in the third quarter of 2012. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) VENOCO INC: S&P Keeps 'B' Corporate Credit Rating on Watch Neg. --------------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery rating on Venoco Inc.'s unsecured debt to '5' from '4'. "The '5' recovery rating reflects our expectation for a modest (10% to 30%) recovery for creditors in the event of a payment default. As a result, we have lowered our rating on Venoco's two senior unsecured debt issues ($150 million 11.50% senior unsecured notes due 2017 and $500 million 8.875% senior unsecured notes due 2019) to 'B-' from 'B'. Our 'B' corporate credit rating on the company remains unchanged and on CreditWatch with negative implications, where we placed it on Jan. 18, 2012," S&P said. "The issue-level rating revision reflects Venoco's recently revised, higher, borrowing base redetermination and an updated PV- 10 valuation based on year-end 2011 proven reserves using Standard & Poor's recovery methodology and stressed price deck assumptions," S&P said. Ratings List Venoco Inc. Corporate Credit Rating B/Watch Negative Rating Lowered, Remain on Watch; Recovery Rating Revised To From Venoco Inc. Senior Unsecured B-/Watch Negative B/Watch Negative Recovery Rating 5 4 WASHINGTON MUTUAL: Former Execs Balk at Plan for D&O Claims ----------------------------------------------------------- Ian Thoms at Bankruptcy Law360 reports that a number of former Washington Mutual Inc. executives objected Wednesday to the bank's refusal to set aside cash reserves to cover their existing and potential indemnification claims. According to Law360, former WaMu CEO Kerry K. Killinger, Chief Financial Officer Thomas Casey, President Stephen Rotella and a host of others filed motions opposing the debtors' request to estimate their potential director and officer indemnification claims at zero dollars. The Delaware bankruptcy court will hold a hearing on the estimation debate Friday, says Law360. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York, and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. On Jan. 7, 2011, the Bankruptcy Court entered a 107-page opinion determining that the global settlement agreement, among certain parties including WMI, the Federal Deposit Insurance Corporation and JPMorgan, upon which the Plan is premised, and the transactions contemplated therein, are fair, reasonable, and in the best interests of WMI. However, the Opinion and related order denied confirmation, but suggested certain modifications to the Company's Sixth Amended Joint Plan of Affiliated Debtors that, if made, would facilitate confirmation. On Sept. 13, 2011, Judge Walrath denied confirmation of WaMu's Modified Sixth Amended Plan and granted equity committee standing to prosecute claims for equitable disallowance but stayed the ruling pending mediation. WaMu has filed a Seventh Amended Plan but is yet to obtain approval of that plan. Records filed Jan. 24, 2012, say that Washington Mutual Inc., former owner of the biggest U.S. bank to fail, has spent $232.8 million on bankruptcy professionals since filing its Chapter 11 case in September 2008. WAVE2WAVE COMMUNICATIONS: Meeting to Form Committee on Feb. 29 -------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold can organizational meeting on Feb. 29, 2012, at 10:00 a.m. in the bankruptcy case of Wave2Wave Communications, Inc. The meeting will be held at: J. Caleb Boggs Federal Building 844 King Street, Room 2112 Wilmington DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Wave2Wave Wave2Wave Communications, Inc. -- http://www.wave2wave.com/-- provides communication services to small to mid-sized businesses in the northeast and midwest United States. It offers integrated products that include wired and wireless broadband Internet access services, voice over Internet protocol, data, email hosting, point-to point connections, managed network services, collocation, virtual private networks, and Web hosting. Wave2Wave Communications filed a Chapter 11 petition (Bankr. D. N.J. Case No. 12-13896) on Feb. 17, 2012, in Newark, New Jersey. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, serves as counsel to the Debtor. The Debtor estimated up to $100 million in assets and liabilities. Affiliates RNK, Inc. and RNK VA, LLC, sought Chapter 11 protection (Case No. 12-13899 and 12-13900) on the same day. WILSON INTERNATIONAL: Files for Chapter 11 in Delaware ------------------------------------------------------ Camden, New Jersey-based Wilson International Partners, LLC, and an affiliate filed bare-bones Chapter 11 petitions (Bankr. D. Del. Case Nos. 12-10578 and 12-10579) in Delaware on Feb. 21, 2012. Wilson International Partners estimated up to $10 million in assets and liabilities. Affiliate Wilson Development Associates, LLC, which claims to be a Single Asset Real Estate as defined in 11 U.S.C. Sec. 01(51B), estimated assets and debts of up to $50 million. WILSON INTERNATIONAL: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Wilson International Partners, LLC 130 N. Broadway Camden, NJ 08102 Bankruptcy Case No.: 12-10578 Chapter 11 Petition Date: February 21, 2012 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Christopher S. Sontchi Debtor's Counsel: John D. Wallen, Esq. O'KELLY ERNST BIELLI & WALLEN, LLC 1000 N. West Street, Suite 1200 Wilmington, DE 19801 Tel: (302) 295-4933 Fax: (302) 295-4801 E-mail: jwallen@oebwlegal.com - and ? Thomas D. Bielli, Esq. O'KELLY ERNST BIELLI & WHALEN, LLC 1600 Market Street, 25th Floor Philadelphia, PA 19103 Tel: (215) 543-7182 Fax: (215) 391-4350 E-mail: tbielli@oebwlegal.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Daniela A. Curbelo, authorized signatory. Affiliate that simultaneously filed Chapter 11 petition: Debtor Case No. ------ -------- Wilson Development Associates, LLC 12-10579 Assets: $10 million to $50 million Debts: $10 million to $50 million WYNN RESORTS: Fitch Affirms 'BB' Amid Suit vs. Board Member ----------------------------------------------------------- Fitch Ratings affirms the Issuer Default Ratings (IDRs) of Wynn Resorts, Ltd (Wynn Resorts or the parent) and its subsidiaries (collectively, Wynn or the company) at 'BB'. The Rating Outlook has been revised to Stable from Positive. Subsidiaries include Wynn Las Vegas, LLC (Wynn LV LLC) and Wynn Resorts (Macau), SA (Wynn Macau SA). Fitch currently equalizes the IDRs of all three entities. All security specific ratings have also been affirmed. Dispute with Principal Shareholder On Saturday, Feb. 19, 2011, Wynn announced that its internal Compliance Committee found its largest shareholder 'unsuitable' under the company's articles of incorporation. The Compliance Committee decision follows a year-long investigation, which concluded with an independent report of potential violations of the U.S. Foreign Corrupt Practices Act (FCPA) involving Aruze USA, Inc. (Aruze USA), its parent company Universal Entertainment Corporation (Universal), and its principal shareholder, Kazuo Okada. Mr. Okada indirectly owns roughly 20% of Wynn's shares through Aruze USA, and he was pursuing a gaming development in the Philippines. The Compliance Committee had concerns regarding Okada's dealings with Philippine regulators. The company's board of directors reviewed an independent investigation report on Feb. 18, 2011 and unilaterally redeemed the 24 million Wynn Resorts shares that are held by Aruze USA. The value of 24 million publicly-traded shares based on Friday's market prices was roughly $2.7 billion. However, those shares are subject to a stockholders agreement with Chairman and CEO Steve Wynn, in which all parties subject to the agreement must provide written consent in order to sell shares, albeit with some carveouts. Additionally, all parties agree to vote their shares for a slate of directors, a majority of which are designated by Mr. Wynn. As a result of these and other restrictions, an independent financial advisor (Moelis & Co.) determined a 30% discount to the current trading price was appropriate. Pursuant to stipulations in the company's articles of incorporation, Wynn Resorts redeemed the shares by issuing a 10- year, $1.9 billion promissory note, which carries a 2% interest rate. The promissory note is unsecured and at the parent level, so it is structurally subordinate to existing secured debt at the Las Vegas and Macau subsidiaries. The transaction did not trigger any Change of Control (CoC) occurrences under the company's Wynn LV LLC or Wynn Macau SA credit agreements. An amendment to the Wynn Macau SA credit agreement in August 2011 revised certain definitions that could have potentially triggered a CoC occurrence. Heightened Governance Concerns Fitch expects additional litigation to occur, so there is risk related to the uncertainty of the ultimate outcome and potential financial impact. Universal has already issued a statement noting that it intends to pursue legal action. The major risk is that investigations surrounding the dispute reveal unsuitable conduct with respect to Wynn, thereby jeopardizing its existing gaming licenses, or its potential attractiveness as a bidder in new gaming market opportunities. On Feb. 8, the SEC notified the company that it was launching an informal investigation with respect to a $135 million donation made to the University of Macau. The investigation was prompted by litigation from Mr. Okada, as he was attempting to access financial records surrounding the donation. Fitch believes it's possible both Nevada and Macau regulators could pursue investigations regarding the dispute. Currently, Fitch is not aware of any evidence that would suggest regulators would uncover any unsuitable behavior on the part of Wynn, or any potential concerns related to the FCPA. The Outlook revision to Stable from Positive indicates limited near-term upward rating momentum. Wynn has sufficient financial flexibility at the 'BB' IDR to withstand some additional financial impact related to the dispute. Still, litigation and investigations surrounding the dispute are likely to be ongoing for some time, which increases Fitch's concern about the potential for adverse tail-risk outcomes. Financial Impact is Manageable Wynn's financial profile is strong relative to its 'BB' IDR, so the financial impact is manageable, based on the terms of the announced transaction. As of Dec. 31, 2011, the company had total debt of $3.2 billion, including $2.6 billion at Wynn LV LLC, $628 million at Wynn Macau SA and no debt at the parent level. All of the pre-existing debt is secured. Adjusted for the Macau minority interest, Fitch calculates consolidated gross leverage and coverage of 2.4 times (x) and 5.9x, respectively, as of Dec. 31, 2011. At the subsidiary level, Fitch calculates gross leverage of 0.6x at Wynn Macau SA and 6.2x at Wynn LV LLC as of Dec. 31, 2011, respectively. The incremental parent level promissory note of $1.9 billion increases consolidated leverage to 3.8x on a pro forma LTM basis, which remains adequate for the 'BB' IDR, given its business risks. The $38 million of annual interest expense at the parent level can be easily covered by management fees from its Macau subsidiary, which are currently north of $100 million annually. Management fees from the Las Vegas subsidiary are currently being accrued, rather than paid in cash because leverage at that subsidiary is greater than 3.5x. Wynn maintains a strong liquidity profile. The company's sizable cash balance and robust free cash flow profile in Macau provides significant financial flexibility to fund the Cotai development, return cash to shareholders, and maintain solid credit protection measures. As of Dec. 31, 2011, the company had $1.3 billion of cash, or approximately $1.05 billion after adjusting for Fitch's estimate of roughly $250 million in cage/operational cash. Wynn's debt maturities are manageable with roughly $200 million annually in 2012-2014 primarily from term loan amortizations. The only significant piece of debt maturing in the near term is the $1 billion Macau revolver in June 2012, which Fitch believes will be addressed soon, possibly in connection with progress on Cotai development approvals. Reduced Financial Flexibility The additional debt and uncertain outcome of this dispute has reduced near- to medium-term financial flexibility, resulting in the Outlook revision to Stable from Positive. Still, the company maintains adequate flexibility with respect to future near- to medium-term capital allocation decisions, including its annual special dividends and funding of the Cotai development project. Longer-term capital allocation decisions could include potential large-scale new market development projects, such as Massachusetts, Japan, Florida, etc. The company has historically managed its balance sheet prudently by maintaining discretion with its practice of annual special dividends, and raising a significant amount of equity capital since its initial IPO in 2002. Still, Fitch's base case scenarios reflect a credit profile that is reflective of a 'BB' IDR over the next 12-24 months, given the company's business risks. Fitch has affirmed Wynn's ratings as follows: Wynn Resorts, Ltd. (Wynn Resorts) -- IDR at 'BB'. Wynn Las Vegas, LLC (Wynn LV LLC) -- IDR at 'BB'; -- Senior secured bank credit facility at 'BB+'; -- Senior secured first mortgage notes (FMNs) at 'BB+'. Wynn Resorts (Macau), SA (Wynn Macau SA) -- IDR at 'BB'; -- Senior secured bank credit facility at 'BBB-'. WYNN RESORTS: S&P Affirms 'BB+' on Reduced Flexibility ------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Las Vegas-based Wynn Resorts Ltd. to stable from positive. "We affirmed our 'BB+' corporate credit rating on the company, along with all related issue ratings on the company's debt," S&P said. "The revision of our rating outlook to stable from positive reflects our view that the $1.9 billion promissory note issued to fund the common share redemption reduces the likelihood that Wynn will have the flexibility to maintain a financial risk profile supportive of a higher rating over the intermediate term," said Standard & Poor's credit analyst Ben Bubeck. "This assessment incorporates our performance expectations and assumptions regarding future development spending and shareholder distributions. In addition, the outlook revision reflects the likelihood of further litigation and potential governance disruption related to this issue, as well as the risk that the valuation of the redeemed shares will be contested, resulting in a potentially higher payout." "The affirmation of our 'BB+' corporate credit rating reflects our expectation that Wynn will maintain credit measures comfortably in line with the rating, including leverage generally at or below 4x, and maintain some flexibility to pursue development opportunities beyond Cotai over the longer term. Our affirmation also assumes that this issue will not affect Wynn's gaming license in Nevada or its concession in Macau," S&P said. "Our 'BB+' corporate credit rating on Wynn reflects our assessment of the company's business risk profile as 'satisfactory' and its financial risk profile as 'significant," according to our rating criteria. "Our view of Wynn's business risk reflects the company's leading presence in two of the largest global gaming markets, its high-quality assets and well-known brand, and an experienced management team. These business strengths are somewhat offset by the gaming industry's vulnerability to economic cycles given its discretionary nature. The high levels of competition in the Las Vegas and Macau gaming markets, and management's relatively aggressive expansion strategy, which includes substantial expected debt-financed development spending in Cotai over the next several years, are also mitigating business risk factors." "Our assessment of Wynn's financial risk takes into account the company's large debt burden and track record of returning substantial capital to shareholders. Still, notwithstanding these factors, we expect Wynn's strong liquidity position to allow the company to pursue and finance developments in a manner that preserves credit quality in line with the current rating. Pro forma for the issuance of the $1.9 billion promissory notes, Wynn's operating lease-adjusted leverage was approximately 3.3x and EBITDA coverage of interest was nearly 6.0x as of Dec. 31, 2011," S&P said. * BOOK REVIEW: Performance Evaluation of Hedge Funds ---------------------------------------------------- Edited by Greg N. Gregoriou, Fabrice Rouah, and Komlan Sedzro Publisher: Beard Books Hardcover: 203 pages Listprice: $59.95 Review by Henry Berry Hedge funds can be traced back to 1949 when Alfred Winslow Jones formed the first one to "hedge" his investments in the stock market by betting that some stocks would go up and others down. However, it has only been within the past decade that hedge funds have exploded in growth. The rise of global markets and the uncertainties that have arisen from the valuation of different currencies have given a boost to hedge funds. In 1998, there were approximately 3,500 hedge funds, managing capital of about $150 billion. By mid-2006, 9,000 hedge funds were managing $1.2 trillion in assets. Despite their growing prominence in the investment community, hedge funds are only vaguely understood by most people. Performance Evaluation of Hedge Funds addresses this shortcoming. The book describes the structure, workings, purpose, and goals of hedge funds. While hedge funds are loosely defined as "funds with no rules," the editors define these funds more usefully as "privately pooled investments, usually structured as a partnership between the fund managers and the investors." The authors then expand upon this definition by explaining what sorts of investments hedge funds are, the work of the managers, and the reasons investors join a hedge fund and what they are looking for in doing so. For example, hedge funds are characterized as an "important avenue for investors opting to diversify their traditional portfolios and better control risk" -- an apt characterization considering their tremendous growth over the last decade. The qualifications to join a hedge fund generally include a net worth in excess of $1 million; thus, funds are for high net-worth individuals and institutional investors such as foundations, life insurance companies, endowments, and investment banks. However, there are many individuals with net worths below $1 million that take part in hedge funds by pooling funds in financial entities that are then eligible for a hedge fund. This book discusses why hedge funds have become "notorious as speculating vehicles," in part because of highly publicized incidents, both pro and con. For example, George Soros made $1 billion in 1992 by betting against the British pound. Conversely, the hedge fund Long-Term Capital Management (LTCP) imploded in 1998, with losses totalling $4.6 billion. Nonetheless, these are the exceptions rather than the rule, and the editors offer statistics, studies, and other research showing that the "volatility of hedge funds is closer to that of bonds than mutual funds or equities." After clarifying what hedge funds are and are not, the book explains how to analyze hedge fund performance and select a successful hedge fund. It is here that the book has its greatest utility, and the text is supplemented with graphs, tables, and formulas. The analysis makes one thing clear: for some investors, hedge funds are an investment worth considering. Most have a demonstrable record of investment performance and the risk is low, contrary to common perception. Investors who have the necessary capital to invest in a hedge fund or readers who aspire to join that select club will want to absorb the research, information, analyses, commentary, and guidance of this unique book. Greg N. Gregoriou teaches at U. S. and Canadian universities and does research for large corporations. Fabrice Rouah also teaches at the university level and does financial research. Komlan Sedzro is a professor of finance at the University of Quebec and an advisor to the Montreal Derivatives Exchange. ********* 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 ***