/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120307.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, March 7, 2012, Vol. 16, No. 66 Headlines 155 EAST: Hooters Casino Hotel Wins Approval to Exit Bankruptcy ACADIA HEALTHCARE: Debt Hike Has Modest Moody's Rating Impact ACCO BRANDS: Upsized Loan No Effect on Sec. Facility 'Ba2' Rating AES EASTERN: Wins OK to Auction Two Plants March 26 AFFIRMATIVE INSURANCE: Moody's Cuts Corp Family Rating to 'Caa2' ALCO CORPORATION: Court OKs Carmen D. Conde Torres as Counsel ALEXANDER SRP: Odyssey Lake Apartments Owner in Chapter 11 ALLEN FAMILY: Court Extends Exclusive Plan Filing Period to June 5 ALLIS-CHALMERS: Moody's Withdraws B3 Rating over Notes Redemption AMERICAN AIRLINES: OKs Lift Stay for BNY Mellon to Apply Funds AMERICAN AIRLINES: Stay Lifted for World Trace Center Suit AMERICAN AIRLINES: Delta Reportedly Evaluating AMR Purchase AMERICAN AIRLINES: To Trim Down NY Flights in Summer AMERICAN AIRLINES: Reports February Traffic AMERICAN AIRLINES: Travelport Extends Full-Content Deal ATC VENTURE: NYSE Amex Accepts Compliance Plan BANKATLANTIC BANCORP: Deal to Sell Bank to BB&T Needs Revision BANKUNITED FINANCIAL: Committee's Liquidating Plan Confirmed BANNING LEWIS: Holland & Hart OK'd to Assist in Adversary Case BANNING LEWIS: NAI Highland Approved as Real Estate Broker BEACON POWER: $31MM Sale Bright Spot for DOE Program, Experts Say BEAR MOUNTAIN: Court OKs Davidson Backman as Bankruptcy Counsel BEAR MOUNTAIN: May Incur $37K Debt for Farming & Mgmt Services BERNARD L. MADOFF: Trustee Too Late for Suit, Son's Ex-Wife Says BILL BARRETT: Moody's Rates New $400MM Senior Notes at 'B1' BOWE BELL: Motion to Hold BSGmbH in Contempt of Sale Order Denied BROOKSTREET SECURITIES: CEO Must Pay $10MM Penalty in SEC Case BROADSIGN INTERNATIONAL: Case Summary & Creditors List CALIFORNIA PIZZA: Moody's Assigns 'B3' Corp. Family Rating CAMARILLO PLAZA: Court to Consider Counsel Employment on April 3 CAMARILLO PLAZA: Taps Sergio Salinas for Monthly Reports, et al. CAPMARK FINANCIAL: Goldman Sachs Bid to Move $147MM NY Suit Denied CAROLINA TRAIL: Case Summary & 3 Largest Unsecured Creditors CASELLA WASTE: Moody's Cuts Corporate Family Rating to 'B3' CENTERPOINT ENERGY: Moody's Keeps Ba1 Sub. Domestic Curr. Rating CENTRAL FALLS, R.I.: Receiver Turns Attention to School Costs CENTURY PLAZA: Has Until June 18 to Propose Reorganization Plan CHINA TEL GROUP: Secures $7.7 Million Funding from Investors CHOCTAW RESORT: S&P Raises Issuer Credit Rating to 'B+' CHURCH STREET HEALTH: To Shut Down Clinic By End of March CIRCUS AND ELDORADO: Has Forbearance Until March 15 CIRCUS AND ELDORADO: Moody's PDR to 'D' Following Missed Payment CIRCUS AND ELDORADO: S&P Lowers Corporate Credit Rating to 'D' CITIZENS CORP: U.S. Trustee Objects to Plan Valuation CLECO CORP: Moody's Gives Ba1 Sub Shelf Domestic Currency Rating CONCHO RESOURCES: Moody's Raises Corp Family Rating to 'Ba3' CONTINENTAL RESOURCES: Moody's Raises Corp. Family Rating to Ba1 CRC HEALTH: S&P Assigns 'B' Rating to $87.6-Mil. Term Loan B CREEKHILL REALTY: Files Schedules of Assets and Liabilities CROWN HOLDINGS: Fitch Upgrades Issuer Default Rating to 'BB+' DALLAS ROADSTER: Files List of 20 Largest Unsecured Creditors DALLAS ROADSTER: Texas Capital Objects to Cash Collateral Use DELTA PETROLEUM: Seeks to Maintain Control as Auction Nears DRH MINISTRIES: Case Summary & 4 Largest Unsecured Creditors DRYDOCKS WORLD: Aims to Close Debt Restructuring by July EAST RIVER: Case Summary & 4 Largest Unsecured Creditors EASTMAN KODAK: Moody's Rates $700MM DIP Term Loan at 'B1' ELITE PHARMACEUTICALS: Amends Socius Securities Purchase Pact ENERGY CONVERSION: Taps AlixPartners as Financial Advisor FIDELITY NATIONAL: Moody's Rates New $500MM Debt at 'Ba2' FIDELITY NATIONAL: Fitch Lifts Issuer Default Rating From 'BB+' FIRST CAPITAL: Moody's Confirms 'Caa1' CFR, 'Caa3' Notes Rating FOREST OIL: S&P Affirms 'BB-' Corporate Credit Rating FULLER BRUSH: Lists $22 Million Owing to Victory Park GIORDANO'S ENTERPRISES: VPC Forms New Mgt. After Ch. 11 Purchase GLOBAL FOOD: Fryer Resigns from Board Due to Potential Conflicts GOLF RESORT: Economic Woes Prompt Chapter 11 Bankruptcy Filing GRACEWAY PHARMACEUTICALS: Sets April 11 Liquidating Plan Hearing GRAHAM SLAM: Has Access to Cash Collateral Until March 15 GREAT PLAINS: Files List of 20 Largest Unsecured Creditors GRUBB & ELLIS: Could Liquidate If Sale Plan Isn't Approved HEXION U.S.: Moody's Assigns 'Ba3' Rating to 1st Lien Notes HORIZON GLOBAL: SEC Raises Fraud Charges & Obtains Asset Freeze HORNBECK OFFSHORE: Moody's Rates New Notes Due 2020 at 'Ba3' HORNBECK OFFSHORE: S&P Rates $350-Mil. Sr. Unsec. Notes at 'BB-' HOSTESS BRANDS: Judge Can't Rule on Contracts, Union Argues JACOBS ENTERTAINMENT: Moody's Keeps 'Caa1' Rating on $210MM Notes JDA SOFTWARE: S&P Affirms 'BB-' Corporate Credit Rating JEFFERSON COUNTY: Eligible to File Chapter 9 Bankruptcy JETSTAR PARTNERS: Files for Chapter 11 in Dallas JOBSON MEDICAL: Wins Nod of Prepack in Less Than Five Weeks KEY ENERGY: Moody's Rates $200 Million Add-On Sr. Notes at 'B1' LAKE TAHOE: Says Owens-Backed Chapter 11 Plan is Confirmable LEHMAN BROTHERS: Plan Now Effective; Distributions Start April 17 LEHMAN BROTHERS: SIPA Trustee, Lehman Settle Claims LICHTIN/WADE LLC: Files List of 20 Unsecured Creditors LITTLE MOUNTAIN: Files for Chapter 11 in Salt Lake City LIZ CLAIBORNE: S&P Upgrades Corporate Credit Rating to 'B' LOS ANGELES DODGERS: Beaten Fan Rebuffs Bankruptcy Compromise MA BB OWEN: Sale of All Assets to Castle Hill Approved MAGUIRE GROUP: Court Approves Payments of Critical Vendor Claims MAGUIRE GROUP: Final Hearing on Cash Access Set for Today MAGUIRE GROUP: Hearing on Plan Outline Adequacy Set for Today MAGUIRE GROUP: Wants Plan Filing Exclusivity Until May 21 MAGUIRE GROUP: Wants Until May 21 to Decide on Unexpired Leases MALIBU ASSOCIATES: Court Approves Dismissal Motion MARKETING WORLDWIDE: Ronald Kletter Discloses 15.8% Equity Stake MASCO CORP: Moody's Assigns 'Ba2' to $400MM Sr. Unsec. Notes MASCO CORP: Fitch Rates Proposed $400MM Sr. Notes Offering at 'BB' METALDYNE CORP: New York Judge Refuses to Seal Settlement MILACRON HOLDINGS: Moody's 'B2' CFR/PDR for Possible Upgrade MUNICIPAL CORRECTIONS: Faces Involuntary Chapter 11 Bankruptcy NBOR CORP: Court Dismisses Involuntary Chapter 11 Case NEBRASKA BOOK: Deloitte Tax Approved as Income Tax Advisors NEBRASKA BOOK: Devises Severance Bonuses for Workers NEIMAN MARCUS: Fitch Affirms Issuer Default Rating at 'B' NET ELEMENT: Enters Into $2-Mil. Subscription Pact with Rakishev NISOURCE INC: Moody's Assigns '(P)Ba2' Domestic Currency Rating NORTEL NETWORKS: Files Schedules of Assets and Liabilities NORTH AMERICAN ENERGY: Moody's Cuts CFR to B3; Sr. Notes Now Caa1 NORTHEAST UTILITIES: Moody's Assigns Ba1 Domestic Currency Rating NUVILEX INC: Dismisses M&K as Auditors, Hires Robison Hill OTERO COUNTY: Court OKs BofA Deal on Cash Use Until Nov. 15 OTTER TAIL: Moody's Gives Ba1 Sr. Unsec. Domestic Currency Rating PAWTUCKET ASPHALT: Files for Chapter 11 Bankruptcy Protection PEMCO WORLD: Sun Aviation to Fund Ch. 11 Case, Buy Back Business PENINSULA HOSPITAL: U.S. Trustee Wants Chapter 11 Trustee PIEDMONT CENTER: Chapter 11 Trustee Hires Nelson as Accountant PIEDMONT CENTER: Can Use KeySource Cash Collateral Until Apr. 30 PIEDMONT CENTER: KeySource Wins Lift Stay for Mebane Property PINNACLE AIRLINES: Postpones Annual Meeting Indefinitely PINNACLE AIRLINES: Financial Chief Christie Joins Spirit Airlines PINNACLE ENTERTAINMENT: Moody's Rates $250MM New Notes at 'B3' PINNACLE ENTERTAINMENT: Fitch Rates Proposed $250MM Loan at 'B-' PINNACLE WEST: Moody's Assigns '(P)Ba2' Domestic Currency Rating PNM RESOURCES: Moody's Gives Ba1 Sr. Unsec. Domestic Curr. Rating POMPANO CREEK: U.S. Trustee Appoints Chapter 7 Trustee POMPANO CREEK: Section 341(a) Meeting Scheduled for March 27 QUADRA FNX: KGHM Unit Completes Acquisition of All Shares RADIOSHACK CORP: S&P Cuts Corporate to 'B+'; Outlook Negative RBS GLOBAL: Moody's Assigns 'Ba3' Rating to $1.1-Bil. Facility RESERVOIR CORPORATE: Daniel Steinberg Pleads Guilty of Fraud ROAD INFRASTRUCTURE: S&P Assigns Preliminary 'B' Rating ROBERT E. DERECKTOR: Files for Chapter 11 Bankruptcy Protection ROCK POINTE: Files List of 20 Largest Unsecured Creditors ROUNDTABLE CORPORATION: Case Summary & Creditors List ROUNDY'S SUPERMARKETS: Moody's Affirms B1 Rating on 1st Lien Debt SAND SPRING: Shareholders Group Wants Official Equity Committee SENSIVIDA MEDICAL: Sidney Braginsky Named to Board of Directors SL GREEN: Fitch Affirms Issuer Default Rating at 'BB+' STANFORD FINANCIAL: Founder Guilty of $7-Bil. Ponzi Scheme STOCKTON, CALIFORNIA: S&P Lowers Issuer Credit Rating to 'SD' TBS INTERNATIONAL: AlixPartners LLP OK'd as Financial Advisors TBS INTERNATIONAL: Has Until April 6 to File Schedules TBS INTERNATIONAL: Taps Lazard Freres as Investment Banker TBS INTERNATIONAL: Taps Cardillo & Corbett as Corporate Counsel TECO ENERGY: Moody's Assigns '(P)Ba2' Domestic Currency Rating TEXAS WESLEYAN: Moody's Withdraws 'Ba2' Rating on Revenue Bonds THERMADYNE HOLDINGS: S&P Keeps 'B-' Rating on $100-Mil. Add-On TOUSA INC: Seeks OK of Settlement of Transeastern Committee Action TRAILER BRIDGE: Hearing on Exclusivity Extensions Set for March 8 TRAILER BRIDGE: Wants Until June 13 to Assume or Reject Leases TRIBUNE CO: Seeks Further Extension of Rule 4(m) Deadline TRIBUNE CO: Files Objection to Marta Waller's Claims TRIBUNE CO: LA Times Objects to V. Comparsi's $1.56MM Claim TRONOX INC: Anadarko Says Bankr. Court Can't Rule on Claims TUBE CITY: Moody's Raises Corp. Family Rating to 'Ba3' UNISOURCE ENERGY: Moody's Assigns Ba1 Sr Domestic Currency Rating UNITED RETAIL: Versa-Led Auction Set for March 23 UNITED SURGICAL: Moody's Rates US$440MM New Notes at '(P)Caa1' VIKING SYSTEMS: Incurs $2.9 Million Net Loss in Full Year 2011 VOICES OF FAITH: Creditors' Proofs of Debt Due March 20 WEIRTON MEDICAL: Moody's 'Ba3' Bond Rating for Possible Downgrade WILLBROS GROUP: S&P Lowers Corporate Credit Rating to 'B-' WYNN LAS VEGAS: Fitch Rates $900-Mil. Mortgage Notes at 'BB+' YANKEE CANDLE: Moody's Rates Proposed $580MM Loan at 'Ba3' YANKEE CANDLE: S&P Affirms 'B' Corporate Credit Rating YELLOWSTONE MOUNTAIN: $375MM Malpractice Suit vs. Garlington Nixed * Straddling Taxes Are Pre-Bankruptcy, 5th Circuit Rules * February Bankruptcies Lower, Chapter 11s May Have Hit Bottom * Debt Load Not Main Cause of Credit Strain for Most Muni Issuers * Marks to Head Vorys' Bankruptcy & Creditors Rights Practice * SmithAmundsen's P. Jones Joins Greensfelder Bankruptcy Group * Upcoming Meetings, Conferences and Seminars ********* 155 EAST: Hooters Casino Hotel Wins Approval to Exit Bankruptcy --------------------------------------------------------------- Dow Jones' DBR Small Cap reports that the owner of the Hooters Casino Hotel won permission to exit bankruptcy under a Chapter 11 plan that has the sale of the Las Vegas property at its heart. The U.S. Bankruptcy Court for the District of Nevada held a hearing on March 2 to consider confirmation of 155 East Tropicana LLC's Chapter 11 reorganization plan. The bankruptcy judge previously signed an order approving the sale of 155 East's Hooters Casino Hotel in Las Vegas to secured creditor Canpartners Realty Holding Co. IV LLC. Completion of the sale requires approval of the reorganization plan at the confirmation hearing. Canpartners owns 98.4% of the $130 million in 8.75% second-lien senior secured notes. It will acquire the property in exchange for $45 million of the notes and the assumption of $15 million in financing for the bankruptcy. To fund the plan, Canpartners is allowing the casino to retain $10.6 million cash to cover professional costs and full payment on $3.35 million in secured notes owned by third parties. Unsecured creditors with about $265,000 in claims are to be paid in full. The first-lien credit facility, with about $14.5 million outstanding, will be assumed by the new owners. Wells Fargo Capital Finance Inc. is agent for holders of first-lien debt. About 155 East Tropicana 155 East Tropicana LLC owns the world's first Hooters Casino Hotel, a 696-room and 4-suite hotel located one block from the Las Vegas Strip and across Tropicana Blvd. from MGM Grand. 155 East Tropicana, along with an affiliate, sought Chapter 11 protection (Bankr. D. Nev. Case No. 11-22216) on Aug. 1, 2011. 155 East sought bankruptcy protection to stop a scheduled Aug. 8 foreclosure of the second-lien debt. The two secured credit facilities were accelerated early this year. Canpartners Realty Holding Co. IV LLC acquired 98.4% of the $130 million in 8.75% second-lien senior secured notes. An additional $32.2 million of interest is owing on the second-lien debt, with US Bank NA as the indenture trustee. Holders of the $14.5 million in first-lien debt have Wells Fargo Capital Finance Inc. as their agent. The first-lien obligation is fully secured. Interest has been paid at the default rate. Gerald M. Gordon, Esq., and Brigid M. Higgins, Esq., at Gordon Silver, in Las Vegas, Nevada, serve as counsel to the Debtors. Garden City Group, Inc., is the claims agent. William G. Kimmel & Associates has been hired to provide an appraisal of the Debtors' casino hotel/property. Alvarez & Marsal serves as financial and restructuring advisor. Innovation Capital LLC serves as financial advisor for capital raising transactions and M&A transactions. ACADIA HEALTHCARE: Debt Hike Has Modest Moody's Rating Impact ------------------------------------------------------------- Moody's Investors Service commented that Acadia Healthcare Company, Inc.'s announcement that it has expanded its senior secured credit facility by $70 million, has a modest negative impact on the company's credit profile, and the expected loss given default on the company's outstanding senior unsecured notes. However, the change in Acadia's capital structure is not enough to warrant a change in the ratings of the company, including the B1 Corporate Family and Probability of Default Ratings and the B3 rating on the unsecured notes. The principal methodology used in rating Acadia was the Global Healthcare Service Provider Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Franklin, Tennessee, Acadia is a provider of inpatient behavioral health care services. Acadia operates a network of 32 behavioral health facilities with over 2,100 licensed beds in 19 states. Acadia provides psychiatric and chemical dependency services to its patients in a variety of settings, including inpatient psychiatric hospitals, residential treatment centers, outpatient clinics and therapeutic school-based programs. ACCO BRANDS: Upsized Loan No Effect on Sec. Facility 'Ba2' Rating ----------------------------------------------------------------- Moody's Investors Service says the $100 million upsizing of ACCO Brands Corporation's term loan has no effect on the Ba2 rating assigned to the senior secured credit facility (term loan A, term loan B and revolver) but is a credit positive. The principal methodology used in rating ACCO was Moody's Global Packaged Goods Industry methodology published in July 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ACCO Brands Corporation ("ACCO") is a leading supplier of branded office products, which are marketed in over 100 countries to retailers, wholesalers, and commercial end-users. Revenue for ACCO approximated $1.4 billion for the year months ended December 31, 2011. AES EASTERN: Wins OK to Auction Two Plants March 26 --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AES Eastern Energy LP prevailed over the opposition and was given authorization to hold a March 26 auction for the two operating power plants. Under a deal reached prepetition, the Debtor would turn the two operating facilities over to debt holders in exchange for debt, absent higher and better offers. The judge has approved the agreement. The bankruptcy judge is requiring the submission of competing bids by March 19. A hearing to approve the sale will take place March 26. About AES Eastern Ithaca, New York-based AES Eastern Energy, L.P., either directly or indirectly, control six coal-fired electric generating plants located in New York State. Currently, the Debtors actively operate two of the six Power Plants and sell the electricity generated by those Power Plants, as well as unforced capacity and ancillary services, into the New York wholesale power market to utilities and other intermediaries under short-term agreements or directly in the spot market. AES Eastern Energy and 13 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-14138 through 11-14151) on Dec. 30, 2011. Lawyers at Weil, Gotshal & Manges LLP and Richards, Layton & Finger, P.A., are legal counsel to AES Eastern Energy and affiliates. Barclays Capital is serving as investment banker and financial advisor. Kurtzman Carson Consultants serves as claims and noticing agent. AES Eastern Energy estimated $100 million to $500 million in assets and $500 million to $1 billion in debts. The petition was signed by Peter Norgeot, general manager. Gregory A. Horowith, Esq., and Robert T. Schmidt, Esq., at Kramer, Levin, Naftalis & Frankel LLP; and William T. Bowden, Esq., Benjamin W. Keenan, Esq., and Karen B. Skomorucha, Esq., at Ashby & Geddes, P.A., serve as counsel to the Creditors Committee. FTI Consulting Inc. is the financial advisor. AFFIRMATIVE INSURANCE: Moody's Cuts Corp Family Rating to 'Caa2' ---------------------------------------------------------------- Moody's Investors Service announced that it lowered the insurance financial strength ratings (IFS) of Affirmative Insurance Company (AIC) and Insura Property and Casualty Insurance Company, both subsidiaries of Affirmative Insurance Holdings, Inc. (Affirmative), to B1 from Ba3. In the same rating action, Moody's lowered the corporate family rating of Affirmative to Caa2 from Caa1 and the senior secured credit rating of its bank credit facility to Caa2 from Caa1. The outlook for the ratings was changed to negative from stable. Ratings Rationale According to Moody's, the downgrades reflect the company's strained financial condition, limited cash flows available for debt service, elevated potential to breach covenants in its bank credit facility, and concerns regarding execution risks related to insurance operations. The company's regulated insurance operations have poor profitability, are in a negative unassigned surplus position and are not permitted to dividend funds to the parent without regulatory approval. Given its deteriorating fundamentals, the company has exercised the deferral feature of its trust preferred securities in order to preserve cash. Expanding on its rationale, Moody's notes that for the first nine months of 2011, the company's consolidated shareholders' equity declined 20%, in part reflecting a 44% decline in total revenues. The company's significant negative consolidated tangible equity position (-$106 million at 9/30/11) reflects $164 million of goodwill which is subject to annual and interim impairment testing. Although Affirmative's underwriting results stabilized somewhat in 2011, the group's lead insurer, AIC, reported a decline in surplus of 19% during the year and posted negative operating cash flows of $84 million. During 2011, AIC's gross premium volume fell by 36%, in part due to planned broad restructuring efforts to exit non- profitable business and states, but also significantly, due to increased competition. Although the substantial majority of debt service is supported by unregulated cash flows from agent's commissions and premium finance fees, both sources depend to a meaningful extent on the premium revenues of the insurance operations. A further deterioration in the health of the insurance subsidiaries could adversely impact the magnitude of Affirmative's unregulated cash flows to the holding company. The negative outlook reflects the continued heightened potential to breach loan covenants in the bank credit facility, and operations risks in its insurance business, including possible adverse development on prior accident year reserves. The following ratings were downgraded and assigned a negative outlook: Affirmative Insurance Holdings, Inc. -- senior secured bank credit facility to Caa2 from Caa1; corporate family rating to Caa2 from Caa1; Affirmative Insurance Company -- insurance financial strength to B1 from Ba3; Insura Property & Casualty Company -- insurance financial strength to B1 from Ba3. Affirmative, based in Addison, TX, is a producer and provider of non-standard personal automobile insurance to consumers in highly targeted geographic markets. The company offers products in 10 states, including Texas, Louisiana, California, and Illinois. For the first nine months of 2011, Affirmative reported revenues of $197 million and a net loss of $19 million. As of September 30, 2011, Affirmative's shareholders' equity was $74 million. The principal methodology used in this rating was Moody's Global Rating Methodology for Property and Casualty Insurers published in May 2010. ALCO CORPORATION: Court OKs Carmen D. Conde Torres as Counsel ------------------------------------------------------------- Alco Corporation sought and obtained approval from the Bankruptcy Court for permission to employ Carmen D. Conde Torres, Esq., and C. Conde & Associates as its Chapter 11 lawyer. Mrs. Conde Torres, Esq., a senior attorney at the firm, charges US$300 an hour for her services. Associates at the firm bill US$275 per hour while paralegals charge US$150 per hour. The firm received a non-refundable retainer of US$20,000 which was paid by Desarrolladora Los Filters Inc. About Alco Corp. Alco Corporation in Dorado, Puerto Rico, filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 12-00139) on Jan. 12, 2012. It scheduled US$11,200,030 in assets and $7,762,314 in debts. The petition was signed by Alfonso Rodriguez, president. Alco tapped Jimenez Vasquez & Associates, PSC, as accountants. ALEXANDER SRP: Odyssey Lake Apartments Owner in Chapter 11 ---------------------------------------------------------- Alexander SRP Apartments, LLC, filed a bare-bones Chapter 11 petition (Bankr. S.D. Ga. Case No. 12-20272) in its hometown on March 5, 2012. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), owns the Odyssey Lake Apartments in Brunswick, Georgia. The Debtor estimated assets and debts of $10 million to $50 million. ALLEN FAMILY: Court Extends Exclusive Plan Filing Period to June 5 ------------------------------------------------------------------ The U.S. Bankruptcy Court has approved Allen Family Foods, Inc. and its debtor affiliates' motion for a second extension of their exclusive right to file a chapter 11 plan through June 5, 2012 and their exclusive right to solicit acceptances on that plan through Aug. 4, 2012. The Debtors assert that they need more time and the opportunity to fully reconcile and object to claims filed in their cases, as appropriate. The Debtors add that parties involved need more time to have an understanding of the extent to which any of the estates' remaining assets may be unencumbered by the liens of the Debtors' prepetition lenders before they potentially propose a chapter 11 plan or an alternative resolution of these cases. About Allen Family Foods Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry company. Allen Family Foods and two affiliates, Allen's Hatchery Inc. and JCR Enterprises Inc., filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-11764) on June 9, 2011. Allen estimated assets and liabilities between $50 million and $100 million in its petition. Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as counsel to the Debtors. FTI Consulting is the financial advisor. BMO Capital Markets is the Debtors' investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Roberta DeAngelis, U.S. Trustee for Region 3, appointed seven creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' cases. Lowenstein Sandler PC and Womble Carlyle Sandridge & Rice, PLLC, serve as counsel for the committee. J.H. Cohn LLP serves as the Committee's financial advisor. ALLIS-CHALMERS: Moody's Withdraws B3 Rating over Notes Redemption ----------------------------------------------------------------- Moody's Investors Service withdrew all ratings assigned to Allis- Chalmers Energy Inc.'s (ALY), including its B3 Corporate Family Rating, B3 Probability of Default Rating, SGL-3 Speculative and Caa1 senior unsecured note ratings. This action follows the expected redemption of ALY's senior unsecured notes. The principal methodology used in rating Allis-Chalmers Energy 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. Allis-Chalmers Energy Inc. is headquartered in Houston, TX. AMERICAN AIRLINES: OKs Lift Stay for BNY Mellon to Apply Funds -------------------------------------------------------------- AMR Corp. and The Bank of New York Mellon, as depository under certain deposition agreements, entered into a Court-approved stipulation for the modification of the automatic stay for BNY Mellon to apply certain amounts it holds in escrow to satisfy American Airlines, Inc.'s payment obligations to BNY Mellon. In 2011, American Airlines, Inc., created two separate pass through trusts that issued: -- American Airlines, Inc. Class A Pass-Through Certificates, Series 2011-1, with an aggregate face amount of $503,206,000, an interest rate of 5.25% and a final expected distribution date of January 31, 2021; and -- American Airlines, Inc. Class B Pass-Through Certificates, Series 2011-1, with an aggregate face amount of $153,826,000, an interest rate of 7.00% and a final expected distribution date of January 31, 2018. Proceeds from the public sale of the certificates were held in escrow and deposited with BNY Mellon. Under a deposit agreement between American and BNY Mellon, BNY Mellon makes interest payments to U.S. Bank, N.A., as paying agent, for distribution to the public holders of the Certificates. American agreed to indemnify BNY Mellon for any amount it pays to U.S. Bank. Pursuant to the stipulation, the parties agreed to modify the automatic stay to allow BNY Mellon to apply the amount it holds in escrow to satisfy American's indemnification obligations totaling $1,094,660 on January 31, 2012. 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: Stay Lifted for World Trace Center Suit ---------------------------------------------------------- AMR Corp. and its affiliates and World Trade Center Properties LLC, 1 World Trade Center LLC, 2 World Trade Center LLC, 3 World Trade Center LLC, 4 World Trade Center LLC, and 7 World Trade Company L.P. entered into a stipulation for the modification of the automatic stay to allow the WTC Entities to prosecute their injury and damages claims solely to the extent of available collectible insurance. The claimants initiated litigation against the Debtors in relation to the September 11 attacks. The cases are In re September 11, 2001 Litigation, docketed as 21 MC 101, World Trade Center Properties LLC, et al. v. American Airlines, Inc., et al., docketed as 08 CIV 3722, and World Trade Center Properties LLC, et al. v. United Airlines, Inc., et al., docketed as 08 CV 3719, all before the U.S. District Court for the Southern District of New York. The injury & damage claims that are the subject of the Proceeding are covered in full or in part by available and collectible insurance coverage. 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: Delta Reportedly Evaluating AMR Purchase ----------------------------------------------------------- Anne Swardson of Bloomberg News reported on Feb. 21 that Delta Air Lines Inc. (DAL) is evaluating a purchase of AMR Corp (AAMRQ).'s American Airlines, La Tribune Web site reported, citing unidentified people at Delta partner Air France-KLM (AF) Group. Delta Chief Executive Officer Richard Anderson is especially interested in American's Miami hub and Latin American routes, the Web site said, according to Bloomberg. 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: To Trim Down NY Flights in Summer ---------------------------------------------------- Mary Schlangenstein and Mary Jane Credeur of Bloomberg News reported on Feb. 22 that American Airlines will trim down service in New York City, the world's busiest aviation market, during the peak of the U.S. travel season as parent AMR Corp. reorganizes in bankruptcy and larger rivals expand. Seating on June flights at the three major airports will fall 4.7% from a year earlier based on current schedules, said Jim Faulkner, a spokesman, Bloomberg related. The drop will be 6.9% by July, when nonstop Kennedy airport trips end to venues like Aruba, based on data compiled for Bloomberg by consultant OAG. Tim Smith, an airline spokesman, said the July schedule isn't set yet and may change as Fort Worth, Texas-based American reshapes its fleet in bankruptcy, Bloomberg noted. "AMR is wise to put its eggs in the baskets where they are going to get the biggest return," George Hamlin, president of Hamlin Transportation Consulting in Fairfax, Virginia, told New York. "Apparently that's no longer New York." Hunter Keay, a Wolfe Trahan & Co. analyst based in New York, told Bloomberg that a pulldown starting in June is a "reasonable strategy," and much of the drop may come from paring a few international flights in New York. "They're stopping losses by making cuts like these, and American's near-term charge is to stop the bleeding," Mr. Keay said. "American is losing a lot of money in the first quarter and jet fuel is more than $3.20 a gallon and that's burning more money. Applying the tourniquet is what should be happening." Bloomberg noted that, besides Aruba, American flights being dropped in July from Kennedy airport include those to markets like Turks & Caicos and Halifax, Nova Scotia, current schedules show. At LaGuardia Airport, service will end to Boston and Traverse City, Michigan, according to OAG, a unit of Luton, England-based UBM Aviation. Bloomberg also noted that American has said a flight from Kennedy to Tokyo's Narita airport that was operated last summer by American shifts this year to Oneworld alliance partner Japan Airlines Co. American said will continue flying between Kennedy and Tokyo's Haneda airport. 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 February Traffic ------------------------------------------- American Airlines reported a February load factor of 75.8%, an increase of 1.0 point versus the same period last year. Traffic increased 6.0% and capacity increased 4.7% year-over-year. Domestic load factor was 78.1 percent, an increase of 0.9 point year-over-year. Domestic traffic increased 4.4% year-over-year on 3.2% more capacity. International traffic increased by 8.6% relative to last year on a capacity increase of 6.9%, resulting in an increase in international load factor of 1.2 points versus February of last year. American boarded 6.4 million passengers in February. A full text copy of the Company's detailed traffic and capacity is available free at http://is.gd/Epjqq0 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 serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the 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: Travelport Extends Full-Content Deal ------------------------------------------------------- American Airlines and Travelport disclosed that the existing full- content agreements between American and Travelport's global distribution systems, Apollo, Galileo and Worldspan, have been extended concurrently and are no longer due to expire until late 2012. Terms of Travelport's subscriber opt-in programs for American Airlines remain unchanged. No further details will be disclosed at this time. 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 serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the 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). ATC VENTURE: NYSE Amex Accepts Compliance Plan ---------------------------------------------- ATC Venture Group Inc. had received notice from the NYSE American Stock Exchange indicating that the Company is not in compliance with the continued listing standards of the NYSE Amex. The Company was given the opportunity to submit a plan of compliance to NYSE Amex and has done so. On Feb., 28, 2012, NYSE Amex notified the Company that it accepted the Company's plan of compliance and granted the Company an extension until April 16, 2012 to regain compliance with the continued listing standards. The Company will be subject to periodic review by the NYSE Amex staff during the extension period. Failure to make progress consistent with the plan or to regain compliance by the end of the extension period could result in the Company being delisted. Minnetonka, Minnesota-based ATC Venture Group Inc., formerly Cycle Country Accessories Corp., is a manufacturer and marketer of branded outdoor recreational and power sports products. BANKATLANTIC BANCORP: Deal to Sell Bank to BB&T Needs Revision -------------------------------------------------------------- BankAtlantic Bancorp's Chairman and CEO, Alan B. Levan, commented on the recent court ruling in Delaware prohibiting BankAtlantic Bancorp from selling its banking subsidiary, BankAtlantic, to BB&T. Mr. Levan stated, "The Delaware Court of Chancery has concluded that, were we to complete the sale of BankAtlantic to BB&T Corporation, we would be selling all or substantially all of Bancorp's assets. Thus, the Court held, we were obligated to structure a transaction in which the buyer would assume all of our obligations to the holders of Bancorp trust preferred securities. While we respectfully disagree with much of the Court's reasoning and its order, we do agree with the Court's conclusion that BankAtlantic has effectively worked through the worst economic conditions since the Great Depression and that market conditions in Florida appear to be improving. We are obviously disappointed as this ruling prevents the transaction from going forward as currently structured. However, BankAtlantic will continue to operate in its normal course while we consider our options. "In the meantime, BankAtlantic will continue to serve the community and its customers and, it appears, will continue to operate as it has in the past under the control of Bancorp. While its financial results are still preliminary, BankAtlantic currently anticipates its Dec. 31, 2011, regulatory capital ratios will continue to exceed all regulatory capital requirements applicable to it. The fact that BankAtlantic's capital ratios never fell below its regulatory requirements throughout the last several difficult years for the U.S. and Florida economy appeared to be a critical factor in the Court's conclusion. We do agree with the Court's conclusion that BankAtlantic is the best independent banking franchise in Florida. "This order is an obvious setback to a transaction we believed and continue to believe to be in everyone's best interests. In the days ahead we will be considering all of the options available to us," Levan concluded. About BankAtlantic Bancorp BankAtlantic Bancorp (NYSE: BBX) -- http://www.BankAtlanticBancorp.com/-- is a bank holding company and the parent company of BankAtlantic. BankAtlantic -- "Florida's Most Convenient Bank" with a Web presence at http://www.BankAtlantic.com/-- has nearly $6.0 billion in assets and more than 100 stores, and is one of the largest financial institutions headquartered junior in Florida. BankAtlantic has been serving communities throughout Florida since 1952 and currently operates more than 250 conveniently located ATMs. The Company reported a net loss of $143.25 million in 2010 and a net loss of $185.82 million in 2009. The Company also reported a net loss of $11.28 million for the nine months ended Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2011, showed $3.74 billion in total assets, $3.73 billion in total liabilities, and $7.12 million in total equity. * * * As reported by the TCR on March 1, 2011, Fitch has affirmed its current Issuer Default Ratings for BankAtlantic Bancorp and its main subsidiary, BankAtlantic FSB at 'CC'/'C' following the announcement regarding the regulatory order with the Office of Thrift Supervision. BankAtlantic has announced that it has entered into a Cease and Desist Order with the OTS at both the bank and holding company level. The regulatory order includes increased regulatory capital requirements, limits to the size of the balance sheet, no new commercial real estate lending and improvements to its credit risk and administration areas. Further, the holding company must also submit a capital plan to maintain and enhance its capital position. BANKUNITED FINANCIAL: Committee's Liquidating Plan Confirmed ------------------------------------------------------------ U.S. Bankruptcy Court confirmed the Third Amended Joint Plan of Liquidation dated Dec. 15, 2011, proposed by the official committee of unsecured creditors of BankUnited Financial, a holding company of a bank taken over by regulators three years ago. In connection with the Plan, Clifford A. Zucker was named as disbursing agent. According to Bill Rochelle, the bankruptcy columnist for Bloomberg News, the plan is based on a partial settlement with the Federal Deposit Insurance Corp, which asserted a $1.47 billion claim. The disclosure statement says that holders owed $321 million on senior notes will recover about 1% to as much as 14.3%. Holders owed $245 million on subordinated notes won't receive anything as the result of a subordination agreement. There is almost nothing in the way of unsecured claims, the committee believes. Almost all unsecured claims are against the bank subsidiary, in the committee's judgment. "In order to effectuate the Distributions, the Plan provides that all of the assets of the Debtors' Estates (including Causes of Action not expressly released under the Plan) shall vest in Liquidating BankUnited. Liquidating BankUnited shall continue in operation in order to monetize the remaining assets, continue remaining litigation with the Federal Deposit Insurance Corporation, in its capacity as receiver for the Bank ('FDIC'), and potentially pursue litigation against other parties, and make distributions under the Plan. The Plan Administrator shall be appointed on the Effective Date of the Plan and shall be responsible for implementing the Plan, subject to the oversight of the Plan Committee," according to Court documents cited by BankruptcyData.com. About BankUnited Financial BankUnited Financial Corp. (OTC Ticker Symbol: BKUNQ) -- http://www.bankunited.com/-- was the holding company for BankUnited FSB, the largest banking institution headquartered in Coral Gables, Florida. On May 21, 2009, BankUnited FSB was closed by regulators and the Federal Deposit Insurance Corporation facilitated a sale of the bank to a management team headed by John Kanas, a veteran of the banking industry and former head of North Fork Bank, and a group of investors that include W.L. Ross & Co., Blackstone Group, Carlyle and Centerbridge. The new owners installed Mr. Kanas as CEO and he sought to revamp BankUnited as a commercial lender in south Florida. BankUnited Financial and its affiliates filed for Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 09-19940) on May 22, 2009. Stephen P. Drobny, Esq., and Peter Levitt, Esq., at Shutts & Bowen LLP; Mark D. Bloom, Esq., and Scott M. Grossman, Esq., at Greenberg Traurig, LLP; and Michael C. Sontag, at Camner, Lipsitz, P.A., represent the Debtors as counsel. Corali Lopez-Castro, Esq., David Samole, Esq., at Kozyak Tropin & Throckmorton, P.A.; and Todd C. Meyers, Esq., at Kilpatrick Stockton LLP, serve as counsel to the official committee of unsecured creditors. The banking unit had assets of $12.8 billion and deposits of $8.6 billion as of May 2, 2009. The holding company, in its bankruptcy petition, disclosed $37,729,520 in assets against $559,740,185 in debts. Aside from those assets, BankUnited said a "valuable" asset is its $3.6 billion net operating loss carryforward. Wilmington Trust Co., U.S. Bank, N.A., and the Bank of New York were listed among the company's largest unsecured creditors in their roles as trustees for security issues. BankUnited estimated the Bank of New York claim tied to convertible securities at $184 million. U.S. Bank and Wilmington Trust are owed $120 million and $118.171 million on account of senior notes. The Bankruptcy Court will hold a hearing on Feb. 21 for approval of the Chapter 11 plan proposed by the Creditors' Committee. The disclosure statement says that holders owed $321 million on senior notes will recover about 1% to as much as 14.3%. Holders owed $245 million on subordinated notes won't receive anything as the result of a subordination agreement. There is almost nothing in the way of unsecured claims, the committee believes. Almost all unsecured claims are against the bank subsidiary, in the committee's judgment. Federal Deposit Insurance Corp. asserts a $1.47 billion claim based on the bank's capital deficiency. There is a separate dispute over ownership of a $50 million tax refunds. The plan is based on a partial settlement with the FDIC. Aside from the tax refund claim, a principal asset is the $4.25 billion net tax loss carryforward. The bankruptcy judge has ruled that the tax refund claim belongs to BankUnited. The FDIC has taken an appeal. BANNING LEWIS: Holland & Hart OK'd to Assist in Adversary Case -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized The Banning Lewis Ranch Company LLC, et al., to employ Holland & Hart LLP as special counsel. As reported in the Troubled Company Reporter on Feb. 15, 2012, Holland & Hart is expected to assist the Debtors in an adversary proceeding pending before the Bankruptcy Court for the District of Colorado captioned, The Banning Lewis Ranch Company, LLC, and Ultra Resources, Inc., v. City of Colorado Springs, Colorado, and Colorado Springs Utilities (Case No. 11-01634 (HRT)). The case is based on a complaint filed by the Debtor and Ultra for declaratory judgment against the City. The Debtor needs Colorado counsel to represent its interests in the Colorado Action. Holland & Hart was previously employed as an ordinary course professional. The firm will also be representing Ultra since Ultra's and the Debtor's interests in the Colorado Action are fully aligned. In the event a conflict arises, however, Ultra has agreed to engage other counsel to represent or advise it. The Debtor has consented to Holland & Hart's representation of Ultra. Ultra has agreed to reimburse the Debtor for its reasonable attorney's fees arising from its prosecution of the Colorado Action. The firm's current hourly rates are: Partners $760 - $310 Associates $565 - $180 Paraprofessionals $200 - $60 Risa L. Wolf-Smith, Esq., assures the Court her firm does not represent or hold any interest adverse to the Debtor or to the estate with respect to the Colorado Action. About Banning Lewis The Banning Lewis Ranch Co. is the owner of the undeveloped portion of a 21,000-acre ranch in Colorado Springs, Colo. The Banning Lewis Ranch is a master-planned community in Colorado Springs, Colorado. The first section built, the 350-acre Northtree Village, opened in September 2007 and will have 1,000 homes priced from the high $100,000s to the mid-$300,000s. The Banning Lewis Ranch filed for Chapter 11 bankruptcy protection from creditors (Bankr. D. Del. Case No. 10-13445) on Oct. 28, 2010. It estimated assets of $50 million to $100 million and debts of $100 million to $500 million in its Chapter 11 petition. An affiliate, The Banning Lewis Ranch Development I & II, LLC, also filed for Chapter 11 (Bankr. D. Del. Case No. 10-13446). Kevin Scott Mann, Esq., at Cross & Simon, LLC, serves as counsel to the Debtors. Edward A. Phillips of Eisner Amper LLP has been retained as the Company's chief restructuring officer. The Devco assets, or the northern portion, drew at a bankruptcy auction a high bid of $24.5 million from KeyBank NA as agent for lenders who will pay by swapping secured debt for ownership. The southern portion of the project, brought in a high bid of $26.25 million from Ultra Resources Inc. BANNING LEWIS: NAI Highland Approved as Real Estate Broker ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized The Banning Lewis Ranch Company LLC, et al., to employ NAI Highland Commercial Group, LLC as real estate broker to assist in the marketing and sale of the Debtor's real property. As reported in the Troubled Company Reporter on Feb. 15, 2012, Banning remains the owner, in part, of 72 acres of undeveloped land in the northeastern corner of approximately 20,000 acres of land in eastern Colorado Springs, Colorado, adjacent to the property formerly owned by Banning Lewis Ranch Development I & II, LLC and sold to KeyBank National Association. The Directors' Parcel is not encumbered by any liens or mortgages, except for certain liens created in favor of the postpetition lenders. This parcel was created by previous owners of the Debtors' assets to serve as a "master" district, which, in turn, controls the "subordinate" metro districts located in the northern portion of the Property. Local law requires the Directors' Parcel to be owned by a majority of Colorado residents. Notwithstanding the Debtors' extensive marketing efforts, no party ever submitted a bid for the Directors' Parcel. Although the Directors' Parcel was previously marketed by Eastdil Secured, LLC, the Debtor has determined to retain a local real estate broker to market and sell the Directors' Parcel. The Debtor has conferred with Eastdil, and Eastdil supports and concurs with this decision. NAI will be employed by the Debtor to perform a highly specialized task. The Debtor submits that, inasmuch as NAI's compensation is result-oriented and directly related to benefits received by the Debtor's estate per transaction, NAI's submission of fee applications is unnecessary. NAI will be paid seven percent of the selling price. To the best of the Debtor's knowledge, NAI does not hold or represent any interest adverse to the Debtor or its estate with respect to the matters for which it is being employed. About Banning Lewis The Banning Lewis Ranch Co. is the owner of the undeveloped portion of a 21,000-acre ranch in Colorado Springs, Colo. The Banning Lewis Ranch is a master-planned community in Colorado Springs, Colorado. The first section built, the 350-acre Northtree Village, opened in September 2007 and will have 1,000 homes priced from the high $100,000s to the mid-$300,000s. The Banning Lewis Ranch filed for Chapter 11 bankruptcy protection from creditors (Bankr. D. Del. Case No. 10-13445) on Oct. 28, 2010. It estimated assets of $50 million to $100 million and debts of $100 million to $500 million in its Chapter 11 petition. An affiliate, The Banning Lewis Ranch Development I & II, LLC, also filed for Chapter 11 (Bankr. D. Del. Case No. 10-13446). Kevin Scott Mann, Esq., at Cross & Simon, LLC, serves as counsel to the Debtors. Edward A. Phillips of Eisner Amper LLP has been retained as the Company's chief restructuring officer. The Devco assets, or the northern portion, drew at a bankruptcy auction a high bid of $24.5 million from KeyBank NA as agent for lenders who will pay by swapping secured debt for ownership. The southern portion of the project, brought in a high bid of $26.25 million from Ultra Resources Inc. BEACON POWER: $31MM Sale Bright Spot for DOE Program, Experts Say ----------------------------------------------------------------- Liz Hoffman at Bankruptcy Law360 reports that experts said the $31 million bankruptcy sale of Beacon Power Corp. to private equity investors, approved by regulators on Friday, is a surprise success story for the much-criticized U.S. Department of Energy loan program following the black eye it suffered with the failure of Solyndra LLC. As reported in the Troubled Company Reporter on Feb. 16, 2012, Beacon Power Corp., received authorization from the bankruptcy court in Delaware to sell the business to Rockland Capital LLC. The buyer is paying $30.5 million, including a note for $25 million and $5.5 million in cash. In addition, The Woodlands, Texas-based Rockland is giving the U.S. Energy Department $6.6 million in guarantees and undertakings to provide funding. About Beacon Power Beacon Power Corporation filed for Chapter 11 protection on Oct. 30, 2011, in Delaware (Bankr. D. Del. Case No. 11-13450). Brown Rudnick and Potter Anderson & Corroon serve as the Debtor's counsel. Beacon disclosed assets of $72 million and debt totaling $47 million, including a $39.1 million loan guaranteed by the U.S. Energy Department. Beacon built a $69 million facility with 20 megawatts of balancing capacity in Stephentown, New York, funded mostly by the DoE loan. The Debtors tapped Miller Wachman, LLP as auditors, Pluritas, LLC as intellectual property advisors, CRG Partners Group LLC as financial advisors. Beacon Power is the second cleantech company which has been backed by the U.S. Department of Energy via loan guarantees to fail this year. The first was Solyndra, which declared Chapter 11 bankruptcy on Sept. 6, 2011. Roberta A. DeAngelis, the United States Trustee for Region 3, appointed four unsecured creditors to serve on the Official Committee of Unsecured Creditors of Beacon Power Corporation. Affiliates that simultaneously sought Chapter 11 protection are Stephentown Holding LLC (Bankr. D. Del. Case No. 11-13451) and Stephentown Regulation Services LLC (Bankr. D. Del. Case No. 11-13452). BEAR MOUNTAIN: Court OKs Davidson Backman as Bankruptcy Counsel --------------------------------------------------------------- Bear Mountain Ranch Holdings, LLC, f/k/a Bear Mountain, L.L.C., and d/b/a Bear Mountain Orchards, sought and obtained approval from the Court to employ Davidson Backman Medeiros PLLC as bankruptcy counsel. Davidson Backman will assist and advise the Debtor in: -- consultations with creditors regarding the administration of the Chapter 11 case; -- any manner relevant to a review of Bear Mountain Ranch Holdings, LLC's leases and other contractual obligations, and asset dispositions; -- any issues associated with the acts, conduct, assets, liabilities, and financial condition of Bear Mountain Ranch Holdings, LLC; -- the negotiation, formulation, and drafting of any Plan of Reorganization; -- the performance of all of its duties and powers under the Bankruptcy Code and the Bankruptcy Rules and in the performance of such other services as are in the interests of Bear Mountain Ranch Holdings, LLC; -- litigation matters or real estate matters as requested; and other necessary advice and services as Bear Mountain Ranch Holdings, LLC may require in connection with its Chapter 11 case. Billing rates for attorneys range from $225 to $375 per hour, with rates for legal assistants ranging from $90 to $125 per hour. The Debtor is responsible for all costs and expenses incurred in the course of representation, subject to Court approval. The Debtor asserts that Davidson Backman is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Bear Mountain Ranch Holdings Chelan, Washington-based Bear Mountain Ranch Holdings, LLC, fka Bear Mountain, LLC, and dba Bear Mountain Orchards, filed for Chapter 11 bankruptcy (Bankr. E.D. Wash. Case No. 11-04354) on Sept. 1, 2011, before Judge Patricia C. Williams. The Debtor disclosed $13,005,047 in assets and $4,439,811 in liabilities as of the Chapter 11 filing. Robert D. Miller Jr., the United States Trustee for the Eastern District of Washington, in Spokane, failed to appoint an official committee of unsecured creditors due to the lack of entities eligible to serve on the committee. BEAR MOUNTAIN: May Incur $37K Debt for Farming & Mgmt Services -------------------------------------------------------------- Bear Mountain Ranch Holdings, LLC, won permission from the Court to incur debt of up to $37,000 that would be allowable as an expense of administration. The Debtor also was authorized to pay Custom Orchards for immediate farming expenses and management services, including pruning work and utilities, using 2011 crop proceeds, without interest. Custom Apple Packers, Inc., which provided farming and management services for the maintenance and development of the orchard commonly known as the East Side Orchard, decided to terminate the parties' contract. Bear Mountain said Custom Packers and its affiliate Custom Orchards are well situated to continue providing farming and management services for the East Side Orchard, and such services, particularly pruning, need to be performed as soon as possible. Pursuant to continued negotiations for the restructuring of the contractual relationships between Bear Mountain and Custom Packers, Custom Orchards has agreed to provide farming and management services for the East Side Orchard, but only if expenses were allowable as an expense of administration, and if payment would be made from the 2011 fruit proceeds that are payable from Custom Packers to Bear Mountain. The anticipated expense of these services is not expected to exceed $37,000. About Bear Mountain Ranch Holdings Chelan, Washington-based Bear Mountain Ranch Holdings, LLC, fka Bear Mountain, LLC, and dba Bear Mountain Orchards, filed for Chapter 11 bankruptcy (Bankr. E.D. Wash. Case No. 11-04354) on Sept. 1, 2011, before Judge Patricia C. Williams. The Debtor disclosed $13,005,047 in assets and $4,439,811 in liabilities as of the Chapter 11 filing. Robert D. Miller Jr., the United States Trustee for the Eastern District of Washington, in Spokane, failed to appoint an official committee of unsecured creditors due to the lack of entities eligible to serve on the committee. BERNARD L. MADOFF: Trustee Too Late for Suit, Son's Ex-Wife Says ---------------------------------------------------------------- The trustee liquidating Bernard L. Madoff Investment Securities Inc. is time-barred from suing a former wife of the Bernard Madoff son who committed suicide, the ex-wife said in court papers, according to a report by Bill Rochelle, the bankruptcy columnist for Bloomberg News. The report relates that the effort to amend the complaint against Madoff family members by adding the former wife of the late Mark Madoff comes too late because it's beyond the six years allowed by New York law, the ex-wife says. The lawsuit is Picard v. Estate of Mark Madoff, 09-01503, S.D.N.Y. (Manhattan). 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. BILL BARRETT: Moody's Rates New $400MM Senior Notes at 'B1' ----------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the proposed offering of $400 million senior notes due 2022 by Bill Barrett Corporation. The proceeds from the offering will be used to redeem a $172.5 million convertible note, repay revolver borrowings and fund 2012 capital expenditures in excess of operating cash flow. The outlook remains stable. Ratings Rationale "This debt offering will provide cash and additional revolver capacity to fund Bill Barrett's capital intensive effort to boost its liquids production," commented Pete Speer, Moody's Vice- President. "The rising debt levels could pressure the company's ratings if the production and proved reserve growth from the newer oil and liquids plays doesn't meet expectations." The B1 senior notes ratings reflect both the overall probability of default of Bill Barrett, to which Moody's assigns a PDR of Ba3, and a loss given default of LGD 5, 70%. The company has a $900 million committed senior secured revolving credit facility with a current borrowing base of $1.1 billion. The senior notes are unsecured and therefore are subordinate to the senior secured credit facility's potential priority claim to the company's assets. This results in the senior notes being notched one rating beneath Bill Barrett's Ba3 Corporate Family Rating (CFR) under Moody's Loss Given Default Methodology. Bill Barrett's Ba3 CFR is supported by management's extensive experience in the Rocky Mountain region, good liquidity and competitive finding and development costs and returns. The rating is restrained by the company's concentration in natural gas and limited geographic diversification. Bill Barrett has significant hedging in place to protect its 2012 cash flows as it continues to make heavy capital investments to increase its oil and natural gas liquids (NGL) production. Acreage acquisitions and outspending of cash flows in 2011 have resulted in rising debt levels that Moody's expects to continue through 2012 and 2013. Bill Barrett began 2012 with debt/average daily production and debt/proved developed reserves around $18,400/boe and $8/boe, respectively. Thanks to its conservative hedging policy and low operating costs, the company still has strong cash flow coverage of debt with retained cash flow (RCF)/debt of 53%. The company's leverage metrics are likely to weaken in 2012 and 2013 as rising debt levels will outpace the growth in total reserves and production. The stable outlook is based on Moody's expectation that the company is able to significantly increase its oil and NGL production over this period, with oil increasing from 8% of production in 2011 to around 20% in 2013. This should boost Bill Barrett's cash flow generation and the value of its reserves, offsetting the weakness in natural gas prices and providing adequate support for the higher debt levels. Moody's current ratings on Bill Barrett Corporation are: Bill Barrett Corporation - Long Term Corporate Family Ratings (domestic currency) Rating of Ba3 - Probability of Default Rating of Ba3 - Speculative Grade Liquidity Rating of SGL-2 - Senior Unsecured (domestic currency) Rating of B1 - LGD Senior Unsecured (domestic currency) Assessment of 70 - LGD5 - Senior Unsecured Shelf (domestic currency) Rating of (P)B1 - LGD Senior Unsecured Shelf (domestic currency) Assessment of 70 - LGD5 - Subordinate Shelf (domestic currency) Rating of (P)B2 - LGD Subordinate Shelf (domestic currency) Assessment of 97 - LGD6 - Preferred Shelf (domestic currency) Rating of (P)B2 - LGD Preferred Shelf (domestic currency) Assessment of 97 - LGD6 The principal methodology used in rating Bill Barrett Corporation was the Global Independent Exploration and Production Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Bill Barrett Corporation is a publicly traded independent exploration and production company headquartered in Denver, Colorado. BOWE BELL: Motion to Hold BSGmbH in Contempt of Sale Order Denied ----------------------------------------------------------------- The Hon. Peter J. Walsh of the Bankruptcy Court for the District of Delaware denies the joint motion of Mail Systems Liquidation, Inc., et al., and Bell and Howell, LLC -- the purchaser of the Debtors' assets -- to: (a) hold Bowe System GmbH in civil contempt for violating the Court's order pursuant to Sections 363 and 365 of the Bankruptcy Code and Bankruptcy Rules 2002, 6004, 6006, 9007; and (b) sanctioning BSGmbH for the civil contempt by ordering it to pay attorney's fees and expenses by the movants as a result of BSGmbH's conduct. Judge Walsh states that the relief sought in the joint motion may be obtained only by adversary proceeding pursuant to Fed. R. Bankr. P. 7001(7). In their motion, the Debtors claimed that despite having knowledge of the purchase agreement and the sale order, BSGmbH has continued to use and has refused to surrender to the purchaser certain software and intellectual property that was owned and developed by the U.S. Debtors. About Bowe Bell Headquartered in Wheeling, Ill., BOWE BELL + HOWELL -- http://www.bowebellhowell.com/-- provides high performance document management solutions and services. In 1936, the company pioneered gripper arm mail-inserting systems. The company currently has a complete portfolio of inserting, sorting, plastic card, integrity, cutting, packaging, print-on-demand and software solutions. In addition to its headquarters offices, the company maintains major manufacturing and service locations in Durham, N.C. and Bethlehem, Penn. Bowe Bell + Howell sought bankruptcy protection in the U.S. as part of a deal to itself to creditor Versa Capital Management Inc. to pay off debt. Bowe Systec, Inc., Bowe Bell + Howell Holdings, Inc., and other affiliates, including Bowe Bell + Howell Holdings, Inc., filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 11-11186) on April 18, 2011. Bowe Systec estimated assets and debt of $100 million to $500 million as of the bankruptcy filing. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel. McDermott Will & Emery is the Debtors' special corporate counsel. Focus Management Group is the Debtors' financial advisors. Lazard Middle Market LLC is the Debtors' investment banker. The Garden City Group, Inc is the Debtors' claims and notice agent. Bowe Bell + Howell International Ltd., BBH's Canadian subsidiary, commenced parallel ancillary proceeding under Part IV of the Companies' Creditors Arrangement Act. BBH Canada, as the proposed foreign representative for the Debtors in the ancillary proceeding, will ask an Ontario Superior Court judge to recognize the bankruptcy proceedings in the U.S. PricewaterhouseCoopers Inc. is the prospective Information Officer in the Canadian Proceeding. The U.S. Trustee has formed an Official Committee of Unsecured Creditors and an Official Retirees' Committee. The Retiree Committee tapped Thorp Reed & Armstrong, LLP, as co-counsel. Versa Capital Management, Inc. in June 2011 completed its acquisition of the assets of Bowe Bell + Howell and the formation of a new company and brand, Bell and Howell, LLC. Versa, having purchased the $121 million secured term loan and revolving credit, signed a contract to buy the business in exchange for secured debt, the loan financing the Chapter 11 case, the cost of curing contract defaults, and $315,000 for the Canadian assets. BROOKSTREET SECURITIES: CEO Must Pay $10MM Penalty in SEC Case -------------------------------------------------------------- The Securities and Exchange Commission said March 2 that a federal judge has ordered the former CEO of Brookstreet Securities Corp. to pay a maximum $10 million penalty in a securities fraud case related to the financial crisis. The SEC litigated the case beginning in December 2009, when the agency charged Stanley C. Brooks and Brookstreet with fraud for systematically selling risky mortgage-backed securities to customers with conservative investment goals. Brookstreet and Mr. Brooks developed a program through which the firm's registered representatives sold particularly risky and illiquid types of Collateralized Mortgage Obligations (CMOs) to more than 1,000 seniors, retirees, and others for whom the securities were unsuitable. Brookstreet and Mr. Brooks continued to promote and sell the risky CMOs even after Mr. Brooks received numerous warnings that these were dangerous investments that could become worthless overnight. The fraud caused severe investor losses and eventually caused the firm to collapse. The Honorable David O. Carter in federal court in Los Angeles granted summary judgment in favor of the SEC on Feb. 23, finding Brookstreet and Mr. Brooks liable for violating Section 10(b) of the Securities Exchange Act of 1934 as well as Rule 10b-5. The court entered a final judgment in the case March 1 and ordered the financial penalty sought by the SEC. "Brooks' aggressive promotion and sale of risky mortgage products to seniors and other risk-averse investors deserves the maximum penalty possible, and that is what he got," said Robert Khuzami, Director of the SEC's Division of Enforcement. "Those who direct such exploitative practices from the boardroom will be held personally accountable and face severe consequences for their egregious actions." Rosalind Tyson, Director of the SEC's Los Angeles Regional Office, added, "The CMOs that Brookstreet sold its customers were among the most risky of all mortgage-backed securities. This judgment highlights the responsibility of brokerage firm principals to ensure the suitability of the securities they sell to customers." In addition to the $10,010,000 penalty, Mr. Brooks was ordered to pay $110,713.31 in disgorgement and prejudgment interest. The court's judgment also enjoins both Brookstreet and Mr. Brooks from violating Section 10(b) of the Exchange Act as well as Rule 10b-5. The SEC is awaiting a court decision in a separate Brookstreet- related enforcement action filed in federal court in Florida. In that case, the SEC charged 10 former Brookstreet registered representatives with making misrepresentations to investors in the purchases and sales of risky CMOs. Two representatives settled the charges, and the SEC tried the case against the remaining eight representatives in October 2011. The SEC has brought enforcement actions stemming from the financial crisis against 95 entities and individuals, including 49 CEOs, CFOs, and other senior officers. Headquartered in Irvine, California, Brookstreet Securities Corporation, which went out of business in 2007, was a network of investment professionals that offer brokering, advisory, planning, securities and commodities, and insurance agent services. Brookstreet also offered life and variable life, variable and fixed annuities, long-term care, and health insurance. The firm was founded in 1990. BROADSIGN INTERNATIONAL: Case Summary & Creditors List ------------------------------------------------------ Debtor: BroadSign International, Inc. 12987 N. Schicks Road Boise, ID 83714 Bankruptcy Case No.: 12-10789 Chapter 11 Petition Date: March 4, 2012 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Debtor's Counsel: Kevin Scott Mann, Esq. CROSS & SIMON, LLC 913 N. Market Street, 11th Floor P.O. Box 1380 Wilmington, DE 19899-1380 Tel: (302) 777-4200 Fax: (302) 777-4224 E-mail: kmann@crosslaw.com Debtors' Investment Banker: SSG CAPITIAL ADVISORS, LLC Debtors' Restructuring Officer Provider: WALKER, TRUESDELL, ROTH & ASSOCIATES Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company?s list of its 12 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/deb12-10789.pdf The petition was signed by Brian Dusho, chief executive officer. Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- BroadSign USA, LLC 12-10790 Assets: $500,000 to $1 million Debts: $10 million to $50 million BroadSign Canada, Inc. 12-10791 CALIFORNIA PIZZA: Moody's Assigns 'B3' Corp. Family Rating ---------------------------------------------------------- Moody's Investors Service assigned a B2 rating to California Pizza Kitchen, Inc.'s ("CPK") $260 million senior secured first lien term loan that expires in July 2017 and $30 million senior secured first lien revolver that expires July 2016. In addition, Moody's assigned CPK a B3 Corporate Family Rating and Probability of Default Rating. The outlook is stable. This is the first time Moody's is rating California Pizza Kitchen. Ratings Rationale The B3 Corporate Family Rating reflects CPK's high leverage as of January 1, 2012, of about 7.5 times (including Moody's analytic adjustments but before preferred equity), while leverage inclusive of the preferred equity adjustment would be about 9.0 times. The ratings also incorporate CPK's modest scale and geographic concentration relative to comparable casual dining concepts. The ratings are supported by CPK's high level of brand awareness and good liquidity. The stable outlook is based on Moody's expectation that CPK will improve debt protection metrics in the near term, as cost saving initiatives related to labor and purchasing drive earnings improvement and better position the company within the B3 rating category. Moreover, with capital spending limited to required maintenance and refurbishments debt reduction in excess of mandatory amortization, due to required excess cash flow payments should also help to strengthen credit metrics over the intermediate term. Factors that cold result in a downgrade include an inability to strengthen debt protection metrics in the near term. Specifically, a downgrade could occur if the company is unable to reduce debt to EBITDA towards 6.5 times and sustain interest coverage on an EBITDA less CAPEX coverage of interest of above 1.2 times. A deterioration in liquidity for any reason could also result in a downgrade. Given Moody's view that debt protection metrics need to strengthen from current levels to better position the company in the B3 rating category, an upgrade over the intermediate term is unlikely. However, a sustained improvement in earnings that is driven in part by positive same store sales, as opposed to purely cost savings, that results in lower leverage and higher coverage could cause upward ratings pressure. Specifically, an upgrade would require debt to EBITDA sustained below 5.75 times and EBITDA less Capex coverage of interest of over 2.0 times. An upgrade would also require good liquidity. The principal methodology used in rating California Pizza Kitchen, Inc. was the Global Restaurant Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. California Pizza Kitchen, Inc., headquartered in Los Angeles, CA, is an owner, operator and franchisor of approximately 262 casual dining restaurants throughout 32 states and 11 countries. Annual revenues are about $640 million. CAMARILLO PLAZA: Court to Consider Counsel Employment on April 3 ---------------------------------------------------------------- The Hon. Robin Riblet of the U.S. Bankruptcy Court for the Central District of California will convene a hearing on April 3, 2012, at 10:00 a.m. to consider Camarillo Plaza, LLC's request to employ Janet A. Lawson, Esq., as attorney. As reported in the Troubled Company Reporter on Jan. 18, 2012, Ms. Lawson will, among other things: (a) advise the Debtor concerning the rights, duties, and obligations of a debtor-in-possession under the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, and the requirements of the United States Trustee; (b) represent the Debtor in all hearings and meetings before the Bankruptcy Court; (c) prosecute and defend appropriate adversary proceedings in the Bankruptcy Court; (d) prosecute any claim objection; and (e) prepare a disclosure statement and a plan of reorganization. To the Debtor's knowledge, Ms. Lawson does not represent interest adverse to the estate. Janet A. Lawson's present hourly rate is $300. The Debtor paid Ms. Lawson a $20,000 retainer. About Camarillo Plaza LLC Shopping center operator Camarillo Plaza LLC, based in Los Angeles, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-59637) on Dec. 5, 2011. Judge Sheri Bluebond was assigned to the case. At the Debtor's behest the next day, the case was transferred to the Northern Division (Bankr. C.D. Calif. Case No. 11-bk-15562). The case in the Los Angeles Division was closed, and Judge Robin Riblet took over from Judge Bluebond. The Debtor scheduled assets of $21,646,714 and liabilities of $12,286,585 as of the Chapter 11 filing. Janet A. Lawson, Esq., in Ventura County, California, serves as the Debtor's counsel. CAMARILLO PLAZA: Taps Sergio Salinas for Monthly Reports, et al. --------------------------------------------------------------- Camarillo Plaza, LLC, asks the U.S. Bankruptcy Court for the Central District of California for permission to employ book keeper Sergio Salinas. Mr. Salinas works for a flat fee of $2,000 per month. In addition to the normal book keeping duties, Mr. Salinas will prepare the monthly and quarterly reports as required by the U.S. Trustee. About Camarillo Plaza LLC Shopping center operator Camarillo Plaza LLC, based in Los Angeles, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-59637) on Dec. 5, 2011. Judge Sheri Bluebond was assigned to the case. At the Debtor's behest the next day, the case was transferred to the Northern Division (Bankr. C.D. Calif. Case No. 11-bk-15562). The case in the Los Angeles Division was closed, and Judge Robin Riblet took over from Judge Bluebond. The Debtor scheduled assets of $21,646,714 and liabilities of $12,286,585 as of the Chapter 11 filing. Janet A. Lawson, Esq., in Ventura County, California, serves as the Debtor's counsel. CAPMARK FINANCIAL: Goldman Sachs Bid to Move $147MM NY Suit Denied ------------------------------------------------------------------ Lana Birbrair at Bankruptcy Law360 reports that Goldman Sachs Group Inc. on Monday lost its bid to move to Delaware a New York suit launched by Capmark Financial Group Inc., which seeks $147 million from the bank over alleged preferential transfers. U.S. District Judge Robert W. Sweet found that Goldman Sachs had failed to prove that moving the case to Delaware would be in justice's best interest, denying the bank's motion to relocate the suit, Law360 relates. About Capmark Financial Based in Horsham, Pennsylvania, Capmark Financial Group Inc. -- http://www.capmark.com/-- provided financial services to investors in commercial real estate-related assets. Capmark has three core businesses: lending and mortgage banking, investments and funds management, and servicing. Capmark operates in North America, Europe and Asia. Capmark has 1,000 employees located in 37 offices worldwide. On Oct. 25, 2009, Capmark Financial and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 (Bankr. D. Del. Lead Case No. 09-13684). Capmark disclosed assets of US$20 billion against total debts of US$21 billion as of June 30, 2009. Capmark's financial advisors were Lazard Freres & Co. LLC and Loughlin Meghji + Company. Capmark's bankruptcy counsel were Dewey & LeBoeuf LLP, and Richards, Layton & Finger, P.A. Beekman Advisors, Inc., is serving as strategic advisor. KPMG LLP served as tax and accounting advisor. Epiq Bankruptcy Solutions, LLC, served as claims and notice agent. The Official Committee of Unsecured Creditors tapped Kramer Levin Naftalis & Frankel LLP as its counsel and JR Myriad 1LLC as its commercial real estate business advisors. The Committee also retained Cutler Pickering Hale and Dorr LLP as its attorneys for the special purpose of providing legal services in connection with Federal Deposit Insurance Corporation matters. Protech Holdings C LLC, an affiliate of Capmark, filed for Chapter 11 protection on July 29, 2010 (Bankr. D. Del. Case No. 10-12387). Protech estimated assets and debts in excess of $1 billion as of the filing date. Since filing for Chapter 11, Capmark completed three sales to generate more than $1 billion in cash. Berkshire Hathaway Inc. and Leucadia National Corp. bought most of the business for $468 million. In April 2011, Greenline Ventures LLC completed the acquisition of the New Markets Tax Credit division of Capmark Financial Group Inc. Since inception of the NMTC program, Capmark's NMTC division has closed over $1.1 billion of NMTC investment funds and financed over $2.5 billion of projects and businesses in low income communities nationwide. Capmark won confirmation of its reorganization plan in August 2011 allowing it to distribute about $4 billion of stock, cash and new debt to unsecured creditors and streamline operations around its flagship bank. Unsecured creditors were to receive $900 million in cash, $1.25 billion in secured notes and 100 million shares in reorganized Capmark, now a bank holding company. The plan was declared effective in October. Also in October 2011, Capmark closed the sale of its low-income housing tax credit asset portfolio to Hunt Cos. Inc., a national real estate services company. El Paso, Texas-based Hunt was the successful bidder in the auction of the assets, paying $102.4 million. CAROLINA TRAIL: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Carolina Trail, LLC dba Timberland Trail Subdivision 24 Vardry Street, Suite 401 Greenville, SC 29601 Bankruptcy Case No.: 12-01404 Chapter 11 Petition Date: March 4, 2012 Court: U.S. Bankruptcy Court District of South Carolina (Spartanburg) Judge: Helen E. Burris Debtor's Counsel: Robert A. Pohl, Esq. STODGHILL LAW FIRM CHARTERED 201 East McBee Avenue, Suite 300A Greenville, SC 29601 Tel: (864) 271-0966 Fax: (864) 770-6167 E-mail: rpohl@stodghill-law.com Scheduled Assets: $1,950,161 Scheduled Liabilities: $2,359,075 The Company?s list of its three largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/scb12-01404.pdf The petition was signed by Keith Schemm, manager. CASELLA WASTE: Moody's Cuts Corporate Family Rating to 'B3' ----------------------------------------------------------- Moody's Investors Service has lowered the ratings of Casella Waste Systems, Inc., including the corporate family rating to B3 from B2, and changed to rating outlook to negative from stable. The revisions reflect expectation of continuing low interest coverage, minimal free cash flow generation and a weak liquidity profile. Stabilization of the ratings will likely require a material level of debt prepayment from asset sales, a bank facility covenant amendment, and evidence that a markedly better performance level can be realized and maintained -- factors that will probably take time to develop -- and risk of further rating pressure will exist until then. The ratings: - Corporate family, to B3 from B2 - Probability of default, to B3 from B2 - $180.0 million 11.00% gtd second lien notes due 2014, to B3, LGD 3, 44% from B2, LGD 3, 44% - $21.4 million Finance Authority of Maine bonds due 2025, to Caa1, LGD 4, 63% from B3, LGD 4, 63% - $200.0 million 7.75% gtd sub notes due 2019, to Caa2, LGD 5, 84% from Caa1, LGD 5, 84% - Speculative grade liquidity, unchanged at SGL-4 - Rating outlook, to Negative from Stable Ratings Rationale The B3 corporate family rating considers a high debt load and track record of net losses from continuing operations against Casella's established network of solid waste disposal, recycling and hauling assets throughout the New England region. Despite Moody's view that the intensity of solid waste price competition within New England has not risen to the elevated levels witnessed across other parts of the U.S., when compared to rated sector peers, Casella's EBITDA margins have significantly declined since FY2010. Collection route density is more difficult to attain in some of the company's less populated operating areas, but fewer end disposal facilities within the region has historically helped disposal pricing, partly offsetting lower margin from the less advantaged hauling economics. Moody's anticipates that U.S. waste volumes should begin growing during 2012 but only at a modest level that will probably not boost Casella's earnings without better operational execution. Progress from the Company's ongoing operational restructuring plan has not taken hold as Moody's expected it would. In March 2011 Casella sold some recycling assets for $134 million, which went toward debt prepayment. Some EBITDA margin degradation was expected to follow the divestiture, but subsequent progress from the operational restructuring plan was also expected. This has not developed. Sales initiatives, especially those focused on raising collection prices, are showing progress but increased landfill yields have proven hard to achieve as special waste (contaminated soils, non-hazardous sludge, etc.) volumes have not been of a beneficial level/mix and landfill maintenance expenses have grown. Softer commodity prices that took hold in late 2011 have constrained revenues from sale of recyclables and will probably continue to hamper recycling earnings across 2012. Further, Casella's Maine waste-to-energy related business will probably continue operating at a loss unless electricity prices rise, or unless the company secures permit changes that enable more economic disposal methods. The company has stated that it is focused on divesting some of its equity investments or its Maine waste-to-energy related business in order to raise cash for debt reduction. Moody's thinks a range of factors-- some internally and some externally controlled-- will also be required to swing in Casella's favor for the credit profile to stabilize. Moody's views Casella's liquidity situation to be weak, as denoted by the speculative grade liquidity rating of SGL-4. Moody's thinks that financial ratio covenant tests under the bank credit facility will likely be breached when the test levels tighten as scheduled at April 30th. A significant level of borrowings exist under the revolver, cash on hand is minimal, and although only $1.5 million of near-term scheduled debt maturities exist, revolver borrowing availability is effectively nil because of the covenant pressure. Moody's expects a level of cash flow from operations over 2012 that should cover the near-term maintenance spending need, but the surplus Moody's anticipates is sufficiently small that a slight deficit could develop as well. Stabilization of the rating would follow expectation of liquidity profile adequacy, EBIT to interest approaching 1x and a steady (not necessarily robust) free cash flow generation level. The rating would be downgraded if leverage continues at 6.5x or if the liquidity profile remains weak. The principal methodology used in rating Casella was the Solid Waste Management Industry Methodology published in February 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. Casella Waste Systems, Inc., based in Rutland, VT, is a vertically-integrated regional solid waste services company that provides collection, transfer, disposal and recycling services to residential, industrial and commercial customers, primarily in the eastern United States. Revenues for the last twelve months ended January 31, 2012 were $481 million. CENTERPOINT ENERGY: Moody's Keeps Ba1 Sub. Domestic Curr. Rating ---------------------------------------------------------------- Moody's Investors Service issued summary credit opinion on CenterPoint Energy, Inc. and includes certain regulatory disclosures regarding its ratings. The release does not constitute any change in Moody's ratings or rating rationale for CenterPoint Energy, Inc. and its affiliates. Moody's current ratings on CenterPoint Energy, Inc. and its affiliates are: Senior Unsecured domestic currency rating of Baa3 Senior Unsecured Bank Credit Facility domestic currency rating of Baa3 LT Issuer Rating rating of Baa3 Subordinate domestic currency rating of Ba1 Senior Unsec. Shelf domestic currency rating of (P)Baa3 Junior Subord. Shelf domestic currency rating of (P)Ba1 Pref. Shelf domestic currency rating of (P)Ba2 Preferred shelf -- PS2 domestic currency rating of (P)Ba2 Commercial Paper domestic currency rating of P-3 ST Issuer Rating rating of P-3 BACKED Senior Secured domestic currency rating of A3 BACKED LT IRB/PC domestic currency rating of Baa3 Underlying Senior Secured domestic currency rating of A3 CenterPoint Energy Resources Corp. Senior Unsecured domestic currency rating of Baa2 Senior Unsecured Bank Credit Facility domestic currency rating of Baa2 Senior Unsec. Shelf domestic currency rating of (P)Baa3 on watch for possible upgrade Commercial Paper domestic currency rating of P-2 CenterPoint Energy Houston Electric, LLC Senior Secured domestic currency rating of A3 Senior Unsecured Bank Credit Facility domestic currency rating of Baa2 LT Issuer Rating rating of Baa2 Senior Secured Shelf domestic currency rating of (P)A3 Backed First Mortgage Bonds domestic currency rating of A3 Underlying First Mortgage Bonds domestic currency rating of A3 Underlying Senior Secured domestic currency rating of Baa2 Underlying LT IRB/PC domestic currency rating of Baa2 Reliant Energy HL&P Backed First Mortgage Bonds domestic currency rating of A3 Underlying First Mortgage Bonds domestic currency rating of A3 Ratings Rationale CNP's ratings reflect the low-risk, stable cash flows generated by a diverse portfolio of regulated electric and gas businesses in generally constructive jurisdictions. CEHE, CNP's legacy T&D subsidiary, is still by far its largest, but CERC's midstream gas operations have been growing faster, giving CERC a slight majority in total company operating income. The Shell/Encana gas gathering projects will increase CNP and CERC's business risks, but volume and price risks are mitigated by the mostly fixed fee, long-term nature of those contracts. CNP has gradually improved its credit metrics by obtaining higher regulated rates, implementing midstream projects, and reducing its leverage. The approximately $1.7 billion of proceeds it raised from issuing securitization bonds in early 2012 will boost CNP's financial flexibility to invest in new businesses (although this raises M&A event risk) as well as to further manage its balance sheet. Rating Outlook The stable outlook anticipates CNP using the securitization proceeds and financing its investments so as to maintain CFO pre- W/C/debt in the mid-teens on a consolidated basis. What Could Change the Rating - Up CNP could be upgraded after it applies the securitization proceeds in a way that sustains CFO pre-W/C/debt in the high teens, without increasing its business risk. A change in the rating -- either up or down -- for CEHE more so than CERC, is likely to move CNP's ratings. What Could Change the Rating - Down The rating could be downgraded if CNP undertakes a transaction which significantly increases its business risk profile, and which results in CFO pre-W/C/debt sustained in the low teens. The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology. CENTRAL FALLS, R.I.: Receiver Turns Attention to School Costs ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the receiver for the City of Central Falls, Rhode Island, is focusing now on reducing health-care, pension and wage costs for the school system as part of the Chapter 9 municipal bankruptcy. Previously, the receiver reached agreements with retired police and firefighters regarding pension benefits. About Central Falls Central Falls is a city in Providence County, Rhode Island. The population was 18,928 at the 2000 census. Central Falls is the smallest and most densely populated city in Rhode Island. Central Falls sought bankruptcy protection under Chapter 9 of the U.S. Bankruptcy Code (Bankr. D. R.I. Case No. 11-13105) on Aug. 1, 2011. The Chapter 9 filing was made after former Rhode Island Supreme Court Judge Robert Flanders, who serves as state-appointed receiver for the city, was unable to negotiate significant concessions from unions representing police officers, firefighters and other city workers. The city grappled with an $80 million unfunded pension and retiree health benefit liability that is nearly quadruple its annual budget of $17 million. Judge Robert Flanders succeeded the role from retired Superior Court Associate Justice Mark A. Pfeiffer, who was appointed in July 2010. The Central Falls receivership, the state's first, has left the mayor and council without any power to govern. Judge Frank Bailey presides over the Chapter 9 case. Theodore Orson, Esq., at Orson and Brusini Ltd., serves as bankruptcy counsel to the receiver. The receiver is negotiating new contracts with unions representing city workers. The receiver filed a proposed debt adjustment plan for the city in September. It won't affect bondholders. CENTURY PLAZA: Has Until June 18 to Propose Reorganization Plan ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Indiana extended Century Plaza LLC's exclusive periods to file and solicit acceptances for a proposed plan of reorganization until June 18, 2012, and Aug. 31, respectively. As reported in the Troubled Company Reporter on Feb. 28, 2012, the Debtor related that it needed more time to complete the negotiations with the lender relating to a transaction that would fund a plan. The lender has just signed a confidentiality agreement that will permit the Debtor to disclose the transaction to the lender and discuss its terms. About Century Plaza Based in Merrillville, Indiana, Century Plaza LLC owns and operates a commercial shopping center known as "Century Plaza". It filed for Chapter 11 bankruptcy (Bankr. N.D. Ind. Case No. 11-24075) on Oct. 18, 2011. Judge J. Philip Klingeberger presides over the case. Crane, Heyman, Simon, Welch & Clar serves as the Debtor's counsel. Anderson & Anderson PC serves as local bankruptcy counsel. The Debtor estimated assets and debts at $10 million to $50 million. The petition was signed by Richard Dube, president of Tri-Land Properties, Inc., manager. CHINA TEL GROUP: Secures $7.7 Million Funding from Investors ------------------------------------------------------------ VelaTel Global Communications, Inc., formerly known as as China Tel Group, Inc., entered into these agreements with Isaac Organization, Inc.: (1) Agreement to Extend and Increase First Line of Credit Loan Agreement and Promissory Note, Cancel Stock Purchase Agreement, and Grant Option in VN Tech Agreement; and (2) Second Line of Credit Loan Agreement and Promissory Note. On July 1, 2011, the Company entered into a Line of Credit Loan Agreement and Promissory Note with Isaac. In the Credit Line, the Company and Isaac agreed that the Company may borrow up to $5.0 million in those installments and subject to the same procedure for making funding requests. Although the credit limit under the First Note was $5,000,000 and the Due Date of the First Note was Dec. 31, 2011, Isaac has advanced the Company funds in excess of the credit limit, including advances made after the Due Date. In entering into the Extension Agreement, the Parties are agreeing to extend the Due Date for the First Note to June 30, 2012, and to increase the credit limit under the First Note to reflect the total amount borrowed, namely $6,385,000 disbursed, plus 5% Holdback fees totaling $336,052, for a total principal balance of $6,721,052. Interest in the amount of $332,793 has accrued on the principal balance, for a total amount due as of Feb. 23, 2012, of $7,053,846. In the Extension Agreement, the principal balance of the First Note is increased to $7,425,101, representing the Pre- Extension Total Amount Due plus an additional 5% Holdback fee of $371,255. Interest will accrue on the Increased Principal Balance at the rate of 10% per annum. The Extension Agreement provides that Isaac will be granted an option to at any time convert all or any portion of the balance of principal and interest due under the First Note to shares of the Company's Series A common stock to Isaac or any of its assigns. The details of the conversion feature will be agreed to between the Parties when VelaTel has additional authorized Shares available for issuance. Under the Second Note, the Company promises to pay to the order of Isaac the principal sum of $7,368,421, or so much thereof as may be disbursed to, or for, the benefit of the Company by Isaac, in Isaac's discretion and subject to Isaac's approval of budgets identifying the Company's proposed use of each funding request. For each funding request, Isaac will retain a 5% Holdback as a set-up fee and compensation for Isaac's due diligence. Each Holdback will be added to the principal balance and will accrue interest along with the amount disbursed and outstanding from time to time. The total potential amount to be disbursed, net of 5% Holdback fees, is $7,000,000. On Feb. 24, 2012, the Company granted promissory notes to (3) Kevin Morrell and (4) Viking Retirement Assets Custodian for the benefit of Kenneth Hobbs IRA. On Feb. 28, 2012, the Company filed an SEC Form S-8 Registration Statement to register 43,166,078 shares of the Company's Series A Common Stock, some of which are to be issued to officers of the Company pursuant to independent contractor agreements. In a letter to shareholders, George Alvarez said: "VelaTel is today announcing several events that secure the 2012 budget needs for our current projects. We have secured approximately $7.7 million of cash funding commitments under promissory notes from investors. Our U.S. based independent contractors (former employees) have agreed to accept up to 100% of their remaining 2012 compensation in the form of our stock, saving us approximately $4.3 million in cash over the course of the year. This allows us to devote more of the working capital we have raised towards launching and expanding our networks." A full-text copy of the Form 8-K is available for free at: http://is.gd/mPOXGH A copy of the Letter to Shareholders is available for free at: http://is.gd/14lM3W About China Tel Based in San Diego, California, and Shenzhen, China, China Tel Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/-- provides high speed wireless broadband and telecommunications infrastructure engineering and construction services. Through its controlled subsidiaries, the Company provides fixed telephony, conventional long distance, high-speed wireless broadband and telecommunications infrastructure engineering and construction services. ChinaTel is presently building, operating and deploying networks in Asia and South America: a 3.5GHz wireless broadband system in 29 cities across the People's Republic of China with and for CECT-Chinacomm Communications Co., Ltd., a PRC company that holds a license to build the high speed wireless broadband system; and a 2.5GHz wireless broadband system in cities across Peru with and for Perusat, S.A., a Peruvian company that holds a license to build high speed wireless broadband systems. Since the Company's inception until June 30, 2011, it has incurred accumulated losses of approximately $242.36 million. The Company expects to continue to incur net losses for the foreseeable future. The Company's independent accountants have expressed substantial doubt about the Company's ability to continue as a going concern in their audit report, dated April 15, 2011, for the period ended Dec. 31, 2010. As reported by the TCR on April 21, 2011, Mendoza Berger & Company, LLP, in Irvine, California, expressed substantial doubt about the Company's ability to continue as a going concern, following the 2010 financial results. The Company reported a net loss of $66.6 million in 2010, following a net loss of $56.0 million in 2009. The Company reported a net loss of $18.0 million on $488,000 of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $38.2 million on $730,000 of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $11.57 million in total assets, $22.22 million in total liabilities and a $10.64 million total stockholders' deficit. CHOCTAW RESORT: S&P Raises Issuer Credit Rating to 'B+' ------------------------------------------------------- Standard & Poor's Ratings Services raised its issuer credit rating on Philadelphia, Miss.-based Choctaw Resort Development Enterprise (CRDE) to 'B+' from 'B-'. The rating outlook is positive. "At the same time, we assigned our 'B+' issue-level rating to CRDE's $78 million term loan due 2017 and raised our issue-level rating on CRDE's existing senior notes to 'B' from 'CCC+'," S&P said. "The upgrade reflects CRDE's successful refinancing of its two term loans (totaling $74.75 million at Dec. 31, 2011), which were scheduled to mature May 2012, with a new $78 million term loan due 2017," S&P said. "It also reflects our expectation that credit measures will remain good for the current rating, and that CRDE will maintain an ability to comfortably fund all required debt services payments," said Standard & Poor's credit analyst Ariel Silverberg. "Our positive rating outlook on CRDE reflects our view that there is rating upside if CRDE demonstrates it has addressed its accounting and management issues, given our expectation that credit measures will remain good for the current rating. We could consider higher ratings once CRDE has established a longer track record without accounting issues and we have more clarity into the new management team's operating strategy," S&P said. "An outlook revision to stable or lower ratings would likely result from meaningful underperformance relative to our current expectations, resulting in a deterioration in interest coverage to closer to 1.5x, which could raise uncertainty around CRDE's ability to fund required amortization and sinking fund payments while meeting the distribution needs of the Band. Additionally, a lower rating could reflect failure by CRDE to demonstrate that accounting and management issues have been fully resolved over the next several quarters," S&P said. CHURCH STREET HEALTH: To Shut Down Clinic By End of March --------------------------------------------------------- NewsChannel 9 reports that Small Smiles will close at the end of March. It's one of the dental offices currently under watch by the state of New York as it fights lawsuits brought by a group of parents. According to the report, the company that operates Small Smiles filed for Chapter 11 bankruptcy in late February, but it said that has nothing to do with the dental clinics. The report relates the company said closing the office in Syracuse and possibly in Rochester will ensure that care can continue at their more than 60 locations throughout the country. The report, citing court documents, says children were strapped to chairs for unnecessary root canals, fillings and crowns. Some reports say nothing was used to numb the pain. That caught the attention of the state Medicaid inspector general's office and Small Smiles was ordered to operate under strict standards. According to the report, the company later reached an agreement with the U.S. government to pay back $24 million to 22 different states over a five year period. The latest bankruptcy filing is not likely to affect these payments. The report says the state said Small Smiles has to give patients a 30-day notice of their closing and they have to provide a list of other dentists who will accept Medicaid. CIRCUS AND ELDORADO: Has Forbearance Until March 15 --------------------------------------------------- Circus & Eldorado Joint Venture defaulted on its secured notes upon maturity on March 1, 2012, but has a forbearance agreement that expires March 15. Circus and Eldorado Joint Venture and Silver Legacy Capital Corp. issued 10-1/8% Mortgage Notes pursuant to an Indenture, dated as of March 5, 2002, by and among the Partnership, Capital and The Bank of New York, as trustee. On March 1, 2012, the Notes matured in accordance with the terms of the Indenture and the Partnership did not make the required principal payment and elected not to make the scheduled interest payment on the Notes. As a result, an aggregate of $142,800,000 principal amount of Notes were outstanding and accrued interest of $7,229,250 on the Notes, as of March 1, 2012, is due and payable. The Partnership is in continuing discussions with potential financing sources and the holders of the Notes regarding a restructuring of its obligations under the Notes and has entered into a forbearance agreement with a substantial holder of the outstanding Notes. Pursuant to the terms of the forbearance agreement, the Note holders party thereto have agreed not to exercise remedies with respect to outstanding defaults and events of default, including the failure to make the March 1, 2012 principal and interest payment, before March 15, 2012, unless the forbearance agreement is terminated earlier pursuant to the terms thereof. About Circus and Eldorado Reno, Nevada-based Circus and Eldorado Joint Venture, doing business as Silver Legacy Resort Casino, owns and operates the Silver Legacy Resort Casino, a themed hotel-casino and entertainment complex in Reno, Nevada. Silver Legacy is a leader within the Reno market, offering the largest number of table games, the second largest number of hotel rooms and the third largest number of slot machines of any property in the Reno market. The Company reported a net loss of $4.0 million on $95.6 million of revenues for nine months ended Sept. 30, 2011, compared with a net loss of $3.7 million on $95.1 million of revenues for the same period last year. The Company's balance sheet at Sept. 30, 2011, showed $267.8 million in total assets, $165.4 million in total liabilities, and partners' equity of $102.4 million. CIRCUS AND ELDORADO: Moody's PDR to 'D' Following Missed Payment ---------------------------------------------------------------- Moody's Investors Service lowered Circus and Eldorado Joint Venture's Probability of Default Rating to D from Ca. This rating action follows Circus and Eldorado's announcement in an 8-K filing dated March 1, 2012 that the company did not make the required principal payment of its 10.125% mortgage notes on the maturity date of March 1, 2012. The company also elected not to make the scheduled interest payment. Moody's affirmed Circus and Eldorado's Corporate Family Rating and 10.125% mortgage notes at Ca and its Speculative Grade Liquidity rating at SGL-4. The rating outlook is stable. The following rating was lowered: Probability of Default Rating to D from Ca The following ratings were affirmed: Corporate Family Rating at Ca $143 million senior secured mortgage notes due 2012 at Ca (LGD 4, 67%) SGL-4 Speculative Grade Liquidity rating Ratings Rationale Circus and Eldorado reported it is in discussions with potential financing sources and holders of the notes regarding a restructuring of its obligations and has entered into a forbearance agreement with a substantial holder of the outstanding notes. Pursuant to the terms of the forbearance agreement, the note holders party have agreed not to exercise remedies with respect to outstanding defaults and events of default before March 15, 2012, unless the forbearance agreement is terminated earlier. According to Moody's definitions, Circus and Eldorado is currently in default. Further downward pressure on the Corporate Family Rating could develop if Moody's revised downward the estimated recovery rate on the notes. Ratings could be upgraded if, through the restructuring, a material amount of debt is eliminated thereby resulting in a more sustainable capital structure. The principal methodology used in rating Circus and Eldorado was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Circus & Eldorado Joint Venture, a 50/50 joint venture between Eldorado Limited Liability Company and Galleon, Inc., owns and operates the Silver Legacy Resort Casino in Reno, Nevada. The company generates annual net revenues of approximately $120 million. CIRCUS AND ELDORADO: S&P Lowers Corporate Credit Rating to 'D' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Reno-based gaming operator Circus And Eldorado Joint Venture (CEJV), and its issue-level rating on CEJV's $143 mortgage notes, to 'D' from 'CCC-'. The rating action followed CEJV's failure to repay the principal on its mortgage notes at maturity. "The rating action stems from CEJV's inability to successfully repay the principal on its mortgage notes, due March 1, 2012, which constitutes a default under the terms of the notes' indenture. CEJV is in continuing discussions with potential financing sources and the holders of the notes regarding a restructuring of its obligations under the notes and has entered into a forbearance agreement with a substantial holder of the outstanding notes. CEJV is a joint venture of affiliates of MGM Resorts International and Eldorado Resorts LLC. CEJV owns and operates a single property, the Silver Legacy Resort Casino in Reno," S&P said. CITIZENS CORP: U.S. Trustee Objects to Plan Valuation ----------------------------------------------------- Sam Crocker, the U.S. Trustee for Region 8, objects to the disclosure statement explaining to the proposed Chapter 11 plan dated Jan. 19, 2012, of by Citizens Corp. because it does not provide adequate information to explain the discrepancy between the scheduled value of the Debtor's interest in the stock of Fi- Data ($19,551,000) and the liquidation value of the Fi-Data stock asserted in the Disclosure Statement ($128,000). The Disclosure Statement, the U.S. Trustee points out, also does not provide adequate information concerning whether the Debtor has made any postpetition efforts to market the Fi-Data stock or what return would be made to creditors if the Debtor's interest in the Fi-Data stock were sold under the supervision of the Bankruptcy Court. In addition, the Disclosure Statement, according to the U.S. Trustee, does not provide adequate information to explain the discrepancy between the scheduled value of the Debtor's interest in accounts receivable ($33,994,468.20) and the liquidation value of the accounts receivable asserted in the Disclosure Statement ($2,072,988.37). Finally, the U.S. Trustee notes that the Disclosure Statement does not explain why the Debtor filed an adversary proceeding to contest the claim of the secured creditor group, Case No. 11-AP- 00628, but has not filed suit or taken other actions to collect the substantial accounts receivable owed by insiders. The U.S. Trustee is represented by: Lloyd E. Mueller, Esq. 701 Broadway, Suite 318 Nashville, Tennessee 37203 Tel: (615) 736-2254 Fax: (615) 736-2260 E-mail: Lloyd.E.Mueller@usdoj.gov The Chapter 11 Plan As reported in the Troubled Company Reporter on Feb. 6, 2012, Citizens Corp. filed a proposed plan of reorganization dated Jan. 19, 2012, and an explanatory disclosure statement. Under the Plan, the Debtor will refinance or sell sufficient assets to make any balloon payments in year five of the Plan in excess of projected cash flow. The Debtor expects to have accumulated sufficient funds to meet its operating expenses post- confirmation and make all Plan payments. The Debtor also possesses claims against Tennessee Commerce Bank and Legends Bank and other possible recovery causes of action, the value of which is not known at this time. Plan payments are not dependent upon the outcome of any litigation. The classification and treatment of claims under the Plan are: A. Class 1 Administrative Claims will be fully paid within 10 business days of the later of a final order allowing the Claim, or the Effective Date of the Plan. B. Class 2 Tax Claims will be fully paid with interest at 2% in equal monthly installments beginning six months after the Effective Date of the Plan until paid in full 60 months after the Effective Date of the Plan. C. Class 3 Secured Claim of Lender Group will be paid in full, plus interest accruing since the Petition Date and reasonable attorneys' fees and costs, but in no event will any Class 3 Allowed Claim exceed the value of the Class 3 Collateral. The Debtor will pay any Class 3 Allowed Claim in equal monthly installments of principal and interest at an interest rate of 2% in an amount that would fully amortize any Class 3 Allowed Claim over a period of 30 years. All principal amounts that remain owing on any Class 3 Allowed Claim will be due and payable in full 60 months after the Effective Date of the Plan. D. Class 4 Secured Claim of Cisco Capital will be allowed in the amount of $45,000, plus interest accruing since the Petition Date and reasonable attorneys' fees and costs, but in no event will the Allowed Class 4 Claim exceed the value of the Class 4 Collateral. The Debtor will pay the Allowed Class 4 Claim in equal monthly installments of principal and interest at an interest rate of 2% in an amount that would fully amortize the Allowed Class 4 Claim over a period of 30 years. All principal amounts that remain owing on the Allowed Class 4 Claim will be due and payable in full 60 months after the Effective Date of the Plan. E. Class 5 Secured Claim of US Bancorp Equipment Finance will be allowed in the amount of $13,897.36, plus interest accruing since the Petition Date and reasonable attorneys' fees and costs, but in no event will the Allowed Class 5 Claim exceed the value of the Class 5 Collateral. The Debtor will pay the Allowed Class 5 Claim in equal monthly installments of principal and interest at an interest rate of 2% in an amount that would fully amortize the Allowed Class 5 Claim over a period of 30 years. All principal amounts that remain owing on the Allowed Class 5 Claim will be due and payable in full 60 months after the Effective Date of the Plan. F. Class 6 Unsecured Claims of Lender Group will be allowed in the amount of $462,775.63. The Debtor will commence paying all Allowed Class 6 Unsecured Claims in 60 equal monthly installments of $7,713 until all Class 6 Allowed Claimants will be paid in full. G. Class 7 General Unsecured Claims will be allowed in the amount of $80,939.81. The Debtor will commence paying all allowed Class 7 General Unsecured Claims in 60 equal monthly installments of $1,349 until all Class 7 allowed claimants will be paid in full. H. Class 8 Landlord Claims will be allowed in the amount of $22,797.10. The Debtor will commence pay any allowed Class 8 Landlord Claim in 60 equal monthly installments of $380 until it is paid in full. I. Class 9 Interest Holders will retain their interests in the Debtor. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/CITIZENS_CORPORATION_ds.pdf The hearing on the Disclosure Statement has been continued to March 28, 2012, at 9:00 a.m. About Citizens Corp. Franklin, Tennessee-based Citizens Corp. operates a mortgage brokerage business. Citizens Corp. filed for Chapter 11 bankruptcy (Bankr. M.D. Tenn. Case No. 11-11792) on Nov. 28, 2011. Judge George C. Paine, II, presides over the case. Robert J. Mendes, Esq., at MGLAW, PLLC, serves as the Debtor's counsel. Marion Ed Lowery, a former owner of Peoples State Bank of Commerce of Nolensville and various other entities, serves as chairman of the company. He signed the Chapter 11 petition. Lenders Tennessee Commerce Bank is represented by David W. Houston, IV, Esq., at Burr & Forman LLP. Citizens filed lists of assets and liabilities showing property worth $40.1 million and debt of $17.8 million. As reported by the TCR on Jan. 24, 2012, Citizens Corp. filed a reorganization plan offering to pay all creditors in full over time, including Tennessee Commerce Bank and other secured lenders owed $17.3 million. Unsecured creditors, owed a combined $81,000, would be paid off in equal installments over five years. CLECO CORP: Moody's Gives Ba1 Sub Shelf Domestic Currency Rating ---------------------------------------------------------------- Moody's Investors Service's current ratings on Cleco Corporation and its affiliates are: Senior Unsecured Bank Credit Facility domestic currency rating of Baa3 Senior Unsec. Shelf domestic currency rating of (P)Baa3 Subordinate Shelf domestic currency rating of (P)Ba1 Cleco Power LLC Senior Unsecured domestic currency rating of Baa2 Senior Unsecured MTN domestic currency rating of (P)Baa2 Senior Unsecured Bank Credit Facility domestic currency rating of Baa2 LT Issuer Rating rating of Baa2 Pref. Stock rating of Ba1 Senior Unsec. Shelf domestic currency rating of (P)Baa2 Pref. Shelf domestic currency rating of (P)Ba1 Ratings Rationale Cleco's Baa3 senior unsecured rating reflects the company's financial and cash flow metrics and stable regulatory environment. However, Cleco Power's large Rodemacher 3 construction project, relative to its small size, has weakened Cleco's consolidated financial performance over the last few years. Rating Outlook Cleco's stable outlook is based on its consolidated financial metrics stabilizing in the near term from the timely conclusion of the Rodemacher 3 project and sufficient rate relief in its pending rate case. What Could Change the Rating - Up Not likely in during this period of continued heavy capital spending and weakened credit metrics at Cleco Power. What Could Change the Rating - Down Cleco's ratings could be downgraded if there is a further sustained weakening of its financial metrics, including CFO pre- working capital interest coverage in the low 2 times range and CFO pre-working capital-to-debt below 10%. The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in August 2009. CONCHO RESOURCES: Moody's Raises Corp Family Rating to 'Ba3' ------------------------------------------------------------ Moody's Investors Service upgraded Concho Resources Inc.'s Corporate Family Rating (CFR) to Ba3 from B1, upgraded the ratings on the senior notes to B1 from B3, and affirmed the SGL-2 Speculative Grade Liquidity (SGL) rating. The outlook was changed to positive from stable. Ratings Rationale "The upgrade of the CFR reflects increased production and reserves, strong full cycle returns, and low cash flow based leverage metrics in the current supportive oil price environment," commented Jonathan Kalmanoff, Moody's Analyst. "The positive outlook reflects our expectation of continuing rapid growth in production and reserves with strong full cycle returns." The Ba3 CFR reflects Concho's scale which is comparable to Ba3 rated E&P peers, strong returns relative to peers driven by a high proportion of oil and NGL production, a high degree of geological diversification, a position as one of the largest producers in the Permian Basin, and low leverage. The rating also considers the company's history of leveraging acquisitions, followed by subsequent leverage reduction, and geographic concentration in the Permian Basin. The SGL-2 reflects good liquidity through 2012. At December 31, 2011, Concho had $1.4 billion of availability under its credit facility and less than $1 million of cash. The company plans to fund its 2012 drilling program with internal cash flow, and any acquisitions with its credit facility. Financial covenants under the facility are debt / EBITDAX of not more than 4.0x and a current ratio of at least 1.0x. Moody's expects Concho to remain well within compliance with these covenants during 2012. There are no debt maturities until 2016 when the credit facility matures. Substantially all of Concho's oil and gas assets are pledged as security under the facility which limits the extent to which asset sales could provide a source of additional liquidity if needed. The B1 senior unsecured note rating reflects both the overall probability of default of Concho, to which Moody's assigns a PDR of Ba3, and a loss given default of LGD5-78%. The size of the senior secured revolver's priority claim relative to the senior unsecured notes results in the notes being rated one notch beneath the Ba3 CFR under Moody's Loss Given Default Methodology. The positive outlook reflects Moody's expectation of continued growth in production and reserves with strong full cycle metrics. Moody's could upgrade the ratings if Concho continues to grow production and reserves, maintains strong full cycle metrics, and reduces leverage on production and reserves. Moody's could downgrade the ratings if RCF/debt is expected to be sustained at or below 30% due to a leveraging acquisition, or if profitability deteriorates materially due to sustained operational issues. The principal methodology used in rating Concho was the Global Independent Exploration and Production Industry published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Concho Resources Inc. is an independent exploration and production company headquartered in Midland, Texas. CONTINENTAL RESOURCES: Moody's Raises Corp. Family Rating to Ba1 ---------------------------------------------------------------- Moody's Investors Service upgraded Continental Resources, Inc.'s (CLR) Corporate Family Rating (CFR) to Ba1 from Ba3. Moody's assigned a Ba2 rating to CLR's proposed offering of $650 million senior unsecured notes due 2022. The rating on the existing senior unsecured notes was also upgraded to Ba2. The proceeds of the notes will be used to repay revolving credit borrowings. The rating outlook is stable. Ratings Rationale "Continental Resources holds a major position in the growing, prolific and predominately oil Bakken as well as the Woodford and Red River. It has grown very rapidly by capitalizing on low finding and operating costs and redeploying the resulting substantial cash flow in a low risk drilling environment," said Harry Schroeder, Moody's Vice President. The Ba1 Corporate Family Rating (CFR) is supported by Continental's high quality asset base, leverage metrics, and returns on capital. Harold Hamm, Chairman and CEO, beneficially owns 68% of CLR, is very active in the operation of the company and has a solid management team supporting him. Moody's rating incorporates the expectation that CLR's management will be diligent in maintaining its existing leverage metrics which is something they should easily be able to achieve. Moody's estimates estimate a capital expenditure budget of $1.75 billion in 2012 and $2.25 billion in 2013 yielding total year-end proved reserves at year-end 2012 and 2013 of about 645 MMBOE and 845 MBOE respectively. Production should be in the 33 - 35 million boe and 43 - 45 million boe range respectively. This will require incremental debt financing of about $300 - $350 million but leverage will decrease as measured by Debt/Average Daily Production to about $17,000 per boe by 2013 from $23,000 today; Debt / PD reserves - $6.00 per boe by 2013 from $8.40 and Debt/ Proved Reserves to $2.50 per boe from $3.40. The reduced leverage is largely the result of a capital expenditure budget that addresses operating realities in the Bakken with infrastructure constraints. It underspends a constant leverage, capital formation relationship. CLR has the apparent financial wherewithal to grow faster than the indicated 30% in proved reserves and retain leverage metrics. It also retains capacity for acquisitions. A cash margin approximating $50 per boe permits significant growth when reinvested and finding costs are in the $10-$12 BOE range. Asset growth has been remarkable. From 2008 - 2011 proved developed reserves grew an average of 25% a year to 205 million boe - 71% oil and proved reserves have grown an average of 47% a year to 508 million boe - 64% oil. There is a tremendous inventory of acreage yet to be developed: Net Undeveloped Acres total 1.2 million acres; 604 thousand net acres of which (the equivalent of a 5-mile wide swath running from New York to Boston) are in the Bakken. The equally notable element is that it has accomplished this rapid growth while maintain a balanced and stable capital structure. This is rooted in the returns on drilling capital it earns. It has reinvested all internally generated cash flow ($2.1 billion since 2008), supplemented this by debt ($1.3 billion) and equity ($660 million in 2011) -- for a total investment of about $4.0 billion. As a gauge of value creation, the standardized measure of discounted future net cash flow (SEC10) is $7.5 billion at 12/31/2011, a $ 6.2 billion increase after giving effect to taxes and gives no credit for the very valuable acreage position it holds. These results are empirical evidence of the core philosophy of management that that, having operated through numerous cycles, uses debt to augment, not drive, disciplined development through the drill bit. CLR's liquidity position is good. After the issuance of this note, it will have availability under its revolving credit facility of approximately $1.1 billion. Note that the borrowing base for the revolving credit facility is $2.25 billion which is $1.0 billion greater than the committed amount. With an estimate of about $300 - $350 million of incremental debt required through the end of 2013, CLR has ample liquidity; it should also add more capacity to its borrowing base as value is created by investment. CLR has two covenants: Debt/EBITDAX < 3.75x and a current ratio of 1.0x. Both have significant head room with the first expected to be approximately 1.0 X in 2012 and the latter well in excess of 1.0 X as availability under the revolver is reckoned as cash for the calculation. With the upgrade, CLR's rating outlook is now stable. Moody's believes that significant additional growth in reserves and production will follow and CLR will ultimately achieve the size and metrics of an investment grade company. Moody's will, however, look carefully at production diversification (significant unexploited acreage position in the Red River, Anadarko Woodford and Niobrara) and takeaway infrastructure in the Bakken before an upgrade to Baa3 would be considered. A downgrade becomes possible if CLR's capital efficiency deteriorates meaningfully with a concurrent run up of leverage due to a continued aggressive expansion or sizeable acquisition of non-immediate production. Should the ratio of debt to average daily production exceed $ 25,000 per boe or if the ratio of Debt to Proved Developed Reserves exceeds $10.00 per Boe, a review of the rating is possible. Exceeding these ratios would indicate a change in the core value drivers of the reserves translating into additional risk for the senior note holders. Commitments under the senior secured revolving credit facility are $1.25 billion million which results in the $1.55 billion of senior unsecured notes being rated Ba2 (LGD4-, 66%) or one notch below the Ba1 CFR, in accordance with Moody's Loss Given Default (LGD) Methodology. The principal methodology used in rating Continental Resources, Inc. was the Global Independent Exploration and Production Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Continental Resources, Inc., which is headquartered in Enid, Oklahoma, is engaged in the exploration and production of oil, natural gas liquids and natural gas. CRC HEALTH: S&P Assigns 'B' Rating to $87.6-Mil. Term Loan B ------------------------------------------------------------ Standard & Poor's Ratings Services assigned Cupertino, Calif.- based CRC Health Corp.'s new $87.6 million term loan B its 'B' issue-level rating (one notch higher than the 'B. "Our recovery rating on the new Term Loan B is a '2', indicating our current expectation for substantial (70%-90%) recovery of principal in the event of payment default," S&P said. "In addition, we revised our rating outlook on the company to positive from stable. The 'B-' corporate credit rating was affirmed," S&P said. "The 'B-' rating reflects our assessment of CRC Health's business risk profile as 'vulnerable', based on its reliance on uncertain private-pay and commercial insurance for about 81% of revenues, highly fragmented markets, and the discretionary nature of its services. The company's 'highly leveraged' financial risk profile reflects its large debt burden and its operation as a sponsor- owned company. We expect mid-single-digit percentage revenue growth in 2011 and 2012 benefiting from the ongoing growth initiatives of a relatively new management team and an improving economy. We expect existing EBITDA margins to be maintained," S&P said. "Our base-case revenue projections incorporate continued mid- single-digit revenue growth in CRC's Recovery division (80% of revenues) as a result of continued demand for chemical dependency rehabilitative services, offset by a temporary closing of one of the company's facilities. We are expecting the temporarily closed facility to reopen midyear. Our growth expectations also incorporate mid- to high-single-digit revenue growth in the company's Weight Management and Youth divisions (20% of revenues), benefiting from heightened demand with the improving economy and increased revenue per patient day. We think this division will experience better pricing as a result of management's initiative to increase the mix of private-pay sales. We expect EBITDA margins to be maintained despite investment in an expanded sales force," S&P said. "CRC's highly leveraged financial risk profile is characterized by its high debt burden, which includes the holding company's payment?in-kind (PIK) loan of over $160 million. Standard & Poor's adjusted calculation of debt to EBITDA is over 8x, and funds from operations to debt is below 10%. While we expect some modest de- leveraging in 2012, we do not anticipate leverage falling below 5x, largely because of the accretion of its PIK debt. We also factor the company's sponsor ownership by Bain Capital in CRC's financial risk profile," S&P said. "The overarching feature of CRC's vulnerable business risk profile is its reliance on uncertain private-pay and commercial insurance for about 81% of revenues. Some of CRC's service offerings are discretionary in nature. This exposes the company to volatile macroeconomic conditions. While business is improving, CRC's youth and weight management divisions have had past struggles, stemming from low occupancy rates and reduced admissions due to the recessionary environment and limited accessibility to the student loan market. These factors resulted in CRC closing certain underperforming facilities. The company has also been unfavorably affected by a temporary closure of one its recovery facilities in Tennessee. The business risk profile also considers the highly fragmented industry in which CRC operates. This is despite the company's well-established positions within its respective business segments, which benefit from its scale, as CRC primarily competes with local and regional players," S&P said. CREEKHILL REALTY: Files Schedules of Assets and Liabilities ----------------------------------------------------------- Creekhill Realty, LLC, filed with the U.S. Bankruptcy Court for the Southern District of New York its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $6,700,000 B. Personal Property $74,990 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $3,265,000 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $2,425,321 ----------- ----------- TOTAL $6,774,990 $5,690,321 A full-text copy of the schedules is available for free at http://bankrupt.com/misc/CREEKHILLREALTY_sal.pdf About Creekhill Realty, LLC Ky'Mara Inc. filed an involuntary Chapter 11 petition for New York City based Creekhill Realty, LLC (Bankr. S.D.N.Y. Case No. 11- 15365) on Nov. 18, 2011. Bankruptcy Judge Martin Glenn presides over the case. The petitioner is represented by Arlene Gordon- Oliver, Esq., at Arlene Gordon-Oliver, P.C. Order for relief under the Chapter 11 of the Bankruptcy Code was issued Feb. 7, 2012. The Debtor is represented by Arnold Mitchell Greene, Esq., at Robinson Brog Leinwand Greene Genovese & Gluck, P.C. CROWN HOLDINGS: Fitch Upgrades Issuer Default Rating to 'BB+' ------------------------------------------------------------- Fitch Ratings has upgraded the ratings for Crown Holdings, Inc. (Crown), and its subsidiaries Crown Cork & Seal Company, Inc. (CCS), Crown Americas, LLC. (CA), and Crown European Holdings, SA (CEH) as follows: Crown: -- Issuer Default Rating (IDR) to 'BB+' from 'BB'. CCS: -- IDR to 'BB+' from 'BB'; -- Senior unsecured notes to 'BB' from 'BB-'. CA: -- IDR to 'BB+' from 'BB'; -- Senior unsecured notes to 'BB+' from 'BB'. CEH: -- IDR to 'BB+' from 'BB'; -- Senior unsecured notes to 'BB+' from 'BB'. Fitch has affirmed the following ratings: CA: -- Senior secured dollar term facility at 'BBB-'; -- Senior secured dollar revolving facility at 'BBB-'. CEH: -- Senior secured euro term facility at 'BBB-'; -- Senior secured euro revolving facility at 'BBB-'. Fitch also assigns a 'BBB-' rating to CA's additional $350 million term loan due June 2016. The Rating Outlook is Stable. The ratings upgrade reflects the continued progress and expansion within Crown's operating segments that have led to sustainable improvements in profitability and credit measures. Consequently, Fitch believes the company is well positioned to materially increase its sustainable cash generation in 2013 and 2014 as a result of several factors. Support for Crown's ratings is due to the stable cash flows associated with its contractual commitments and cost pass-through despite a challenging economic global environment. Supply/demand characteristics should continue to remain tight in its emerging market regions with the company indicating sold-out capacity expansions. Past capacity rationalizations, restructurings and selective mix realignments by the can industry in its mature markets also provides pricing stability. Crown's geographical diversification across both mature and emerging markets with a diverse customer mix results in a balanced revenue stream that can lend greater stability through economic cycles. Crown's liquidity is very good and includes its sustainable free cash flow (FCF) generation, cash and availability under its revolving facility and securitization programs. At the end of 2011, Crown had in excess of $1 billion in liquidity under its $1.2 billion credit facilities. In 2012, Fitch estimates FCF (less minority distributions) should be at least $250 million. Going forward, Fitch expects significant growth in FCF due to several factors. These include lower growth-related capital, expectations for completed restructuring projects, lower pension contributions, and ramp-up in organic capacity expansions. Crown's near to medium term maturities are relatively modest (under $150 million) during the next three years and are primarily related to term loan amortization. Consequently, Crown's next material maturities are in June 2015, when the $1.2 billion revolving facilities mature and in June 2016, when the term loans mature. Crown also has significant cushion under its present covenants. Crown has considerable ability to move cash through various mechanisms to fund cash requirements in the U.S. Cash at the end of the year was $342 million. $314 million of the cash was located outside of the U.S and approximately half of that cash was held by foreign subsidiaries for which earnings are considered indefinitely reinvested. Crown also had available capacity of $100 million on its $200 million North American securitization facility that matures in March 2013. Expectations for leverage in 2012 are approximately 3 times (x). Fitch views the leverage range for the rating at 2.5x to low 3x. Crown will use the majority of its cash flows for the benefit of shareholders or targeted growth opportunities since the company is within its net leverage target goal of 2x-3x (2.8x at the end of 2011). This will include share repurchases, growth-related capital primarily in emerging market regions and potential opportunistic acquisitions or minority interests purchases. Fitch does not expect significant levels of minority interest acquisitions given Crown's past focus. Expectations are for Crown to pace share repurchases to the level of FCF. Crown pays out approximately $80 million in minority distributions but does not have a dividend. Credit risks include the increase in revenue exposure to more volatile, higher-growth emerging markets, macro events outside the control of the company, the asbestos liability and pension deficit. In late 2011, Crown took steps to address its growing pension deficit in the U.S. with funding from proceeds of an add- on $350 million term loan. The GAAP funding levels at the end of 2011 for the U.S. and non-U.S plans were 78% and 89% on benefit obligations of $1.5 billion and $3.3 billion respectively. Crown's current assumptions for pension contributions for the next three years are $130 million, $89 million and $104 million. As can operators rapidly expand capacity in emerging market regions, the risk for over-capacity could occur. However, Fitch believes the company has taken prudent steps in the past to delay projects because of its local knowledge and experience to minimize excess capacity. In addition, Crown has significant flexibility to address unexpected cash requirements on the business. Fitch does not expect further ratings upgrades unless the company changes its current financial policies. In particular, this would require the company to commit to a reduced, more conservative financial leverage policy in the lower 2x range and increased free cash generation relative to adjusted debt. DALLAS ROADSTER: Files List of 20 Largest Unsecured Creditors ------------------------------------------------------------- Dallas Roadster, Limited, filed with the Bankruptcy Court a list of creditors holding the 20 largest unsecured claims against its estate: Name of creditor Nature of claim Amount of Claim ---------------- --------------- --------------- Alberto Dal Cin 2600 Avenue K Plano, TX 75074 Business debt $900,000 Abdollah Nouri 2141 East Arapaho Road Richardson, TX 75081 Business Debt $200,000 Russell Jabari Oak Ridge Drive Plano, TX 75025 Business Debt $150,000 Abdollah Adloo Business Debt $150,000 Abdee Molavi Business Debt $88,000 American Express Credit Card $35,936 Auto Trader Vender $23,750 Ben Amini Salary $20,000 Ben Khobahy Salary $16,000 Ali Hafezamini Business Debt $15,000 DMN Media Vender $8,372 Worldpac Vender $6,146 Interstate Billing Service Vender $5,173 Finish Master Vender $5,139 LKQ North Texas Vender $4,872 Carfax Vender $4,771 D' Ruiz Body Shop Vender $4,441 O'Reilly Automotive Vender $3,682 Corelogic Credco Vender $3,511 Fleet Services Credit Card $3,500 About Dallas Roadster and IEDA Enterprises Dallas Roadster Ltd. owns and operates an auto dealership with locations in both Richardson and Plano, Texas. IEDA Enterprises, Inc., is the general partner of Roadster. Dallas Roadster and IEDA Enterprises filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases. Michael S. Mitchell, Esq., and Robert T. DeMarco, Esq. -- mike@demarcomitchell.com and robert@demarcomitchell.com -- at DeMarco-Mitchell, PLLC, serve as the Debtors' bankruptcy counsel. Dallas Roadster estimated $10 million to $50 million in assets. The Debtors' assets were placed under the care of a receiver on Nov. 16, 2011, pursuant to a state court action by Texas Capital Bank, National Association. No trustee has been appointed in the Chapter 11 cases. DALLAS ROADSTER: Texas Capital Objects to Cash Collateral Use ------------------------------------------------------------- Texas Capital Bank, N.A., objects to the second motion of Dallas Roadster Ltd. to use cash collateral because the proposed budget and terms for the use of cash collateral do not provide adequate protection to the Bank. The Bank is currently in discussions with the Debtors regarding certain revisions to the proposed budget and to the terms of use of cash collateral and anticipates being able to reach an agreement with the Debtors based on these discussions. Texas Capital Bank is represented by: Kenneth Stohner, Jr., Esq. Heather M. Forrest, Esq. Jackson Walker, LLP Dallas, Texas 75202 Tel: (214) 953-6000 Fax: (214) 953-5822 E-mail: kstohner@jw.com Cash Collateral Motion As reported in the Troubled Company Reporter on Dec. 16, 2011, Dallas Roadster Ltd. and IEDA Enterprises Inc. have sought Bankruptcy Court authority to use proceeds of assets on which Texas Capital Bank, National Association, asserts a first priority lien and security interest. As of Nov. 16, 2011, the Debtors owe TCB $2.9 million on a revolving line of credit note and $1.6 million on a real property note. The Debtors said they were current on all financial obligations due and owing TCB. The bank lender is also oversecured by collateral totaling $10,163,727. TCB asserts that it is secured by first priority liens on and security interests in substantially all Roadster's personal property, including, without limitation all vehicles, accounts, and car notes. TCB further asserts that it has a valid and perfected first mortgage recorded against all of Roadster's real property holdings. The Debtors proposed to provide adequate protection to TCB as regards any diminution in value of the Secured Lender's interest in the Collateral as existing on the Petition Date. The Debtors assert that TCB is adequately protected as a result of the continued business operations. Moreover, there is an equity cushion in excess of 50% in the Prepetition Collateral. The Debtors also anticipate making interest only payments to the Secured Lender by way of adequate protection under the terms of a final cash collateral order. About Dallas Roadster and IEDA Enterprises Dallas Roadster Ltd. owns and operates an auto dealership with locations in both Richardson and Plano, Texas. IEDA Enterprises, Inc., is the general partner of Roadster. Dallas Roadster and IEDA Enterprises filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases. Michael S. Mitchell, Esq., and Robert T. DeMarco, Esq. -- mike@demarcomitchell.com and robert@demarcomitchell.com -- at DeMarco-Mitchell, PLLC, serve as the Debtors' bankruptcy counsel. Dallas Roadster estimated $10 million to $50 million in assets. The Debtors' assets were placed under the care of a receiver on Nov. 16, 2011, pursuant to a state court action by Texas Capital Bank, National Association. No trustee has been appointed in these cases. DELTA PETROLEUM: Seeks to Maintain Control as Auction Nears ----------------------------------------------------------- Dow Jones' DBR Small Cap reports that Delta Petroleum Corp. is asking a bankruptcy judge for an extension of its exclusive right to file a Chapter 11 plan while it shops its oil-and-gas exploration business to highest bidder at court-supervised auction slated for later this month. As reported in the Troubled Company Reporter on March 1, 2012, the U.S. Bankruptcy Court for the District of Delaware authorized Delta Petroleum to employ HYPERAMS, LLC as auctioneer. The engagement letter contemplates that the Debtors' assets will be liquidated in multiple tranches, to be determined by the Debtors in the exercise of their business judgment. HYPERAMS will be assigned to sell these assets: (i) office equipment on the 42nd floor and excess computer equipment on the 43rd floor of Delta Petroleum Corporation's corporate office; and (ii) unused office equipment in off-site storage facilities of Mesa Systems Moving and Storage. 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. In its amended schedules, the Delta Petroleum disclosed $373,836,358 in assets and $312,864,788 in liabilities. 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. DRH MINISTRIES: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: DRH Ministries Inc. 918 Orange Avenue Daytona Beach, FL 32114 Bankruptcy Case No.: 12-01395 Chapter 11 Petition Date: March 4, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Bryan K. Mickler, Esq. LAW OFFICES OF MICKLER & MICKLER 5452 Arlington Expressway Jacksonville, FL 32211 Tel: (904) 725-0822 Fax: (904) 725-0855 E-mail: court@planlaw.com - and ? Taylor J. King, Esq. LAW OFFICES OF MICKLER & MICKLER 5452 Arlington Expressway Jacksonville, FL 32211 Tel: (904) 725-0822 Fax: (904) 725-0855 E-mail: court@planlaw.com Scheduled Assets: $1,400,011 Scheduled Liabilities: $2,257,867 The Company?s list of its four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-01395.pdf The petition was signed by Derrick Harris, president. DRYDOCKS WORLD: Aims to Close Debt Restructuring by July -------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Drydocks World, Dubai's shipyard arm, said it will present its lenders with a proposal to restructure its $2.2 billion debt, and aims to finalize the restructuring package by July. Drydocks World is the largest shipyard facility in the Middle East. The Drydocks World - Dubai shipyard specializes in ship repairs, vessel conversions, and barge and floating dock construction. It services about 400 vessels per year, mostly ultra-large and very large crude carriers. EAST RIVER: Case Summary & 4 Largest Unsecured Creditors -------------------------------------------------------- Debtor: East River Mortgage Corp. 311 West Broadway, Suite 8C New York, NY 10013 Bankruptcy Case No.: 12-10861 Chapter 11 Petition Date: March 2, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Robert E. Gerber Debtor's Counsel: David H. Leventhal, Esq. LAW OFFICE OF DAVID H. LEVENTHAL 188 Ludlow Street, Suite 3G New York, NY 10002 Tel: (212) 729-3179 Fax: (253) 423-3179 E-mail: david@dhllawfirm.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 four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb12-10861.pdf The petition was signed by James McGown, president. EASTMAN KODAK: Moody's Rates $700MM DIP Term Loan at 'B1' --------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to the $250 million revolving debtor-in-possession credit facility and a B1 rating to the $700 million debtor-in-possession term loan of Eastman Kodak Company. The ratings were primarily driven by the following factors: i) collateral coverage available to the DIP lenders; ii) structural features of the DIP facilities; iii) the size of the DIP facilities relative to pre-petition debt; and iv) the cause of bankruptcy and prospects for reorganization. On February 15, 2012, the bankruptcy court approved the execution of the DIP facilities in its final debtor-in-possession order, granting the DIP lenders a super priority claim over Kodak's domestic assets pursuant to Section 364 of the US Bankruptcy Code. Both facilities are scheduled to mature on July 20, 2013. Ratings assigned: $250 million DIP Revolver -- Ba1 $700 million DIP Term Loan -- B1 Moody's withdrew all previous ratings for Kodak on January 19, 2012 following its Chapter 11 bankruptcy filing. The ratings on the DIP facilities are being assigned on a "point- in-time" basis and will not be monitored going forward, and therefore no outlook is assigned to the rating. Ratings Rationale The primary factors underlying the Ba1 and B1 ratings on the DIP Revolver and Term Loan, respectively, were the collateral coverage and ranking under the priority of payment schedule. Primary first lien security interests for the DIP Revolver include accounts receivable, inventory, and certain equipment while primary first lien security interests for the Term Loan consists of intellectual property. Each has a second lien on the assets securing the other facility's first lien position. Despite the potentially sizeable value that could be realized from the sale of all or parts of Kodak's IP portfolio, the collateral coverage available to the DIP lenders is subject to a wide range of outcomes given its intangible and illiquid nature. This high degree of variability was incorporated in our assessment of the Portfolio's realizable value as one of the primary factors. We looked at multiple scenarios that would enable Kodak to raise varying amounts of liquidity from the sale of the IP portfolio under different circumstances. As a result, we estimate the total collateral coverage of the joint DIP facilities to be in the range of 1 to 2 times. In Moody's view, the structural features of the DIP facilities provide the DIP lenders with a reasonable degree of protection. The DIP Revolver has a first lien position on a conservatively structured borrowing base of eligible accounts receivable and inventory, with advance rates of 85% and 65%, respectively, as well as some eligible equipment that is capped at $35 million. While the DIP Term Loan has a second lien position on the borrowing base assets, it has a first lien on Kodak's intellectual property (IP). The DIP credit agreement contains 2 financial covenants that are tested on a monthly basis: i) a minimum US liquidity covenant, varying from $100 to $250 million; and ii) a minimum EBITDA covenant, gradually increasing from negative $105 million to positive $175 million. The credit agreement lacks a limitation on capital expenditures, however we do not anticipate meaningful needs for capital expenditures and the liquidity covenant effectively governs this issue. The credit agreement also allows Kodak to make investments in foreign subsidiaries (that are not part of the bankruptcy proceedings) of up to $100 million over the tenor of the loans. The ratio of the DIP facilities face value to the Kodak's pre- petition debt is approximately 60%. Moody's views the relatively large size of the DIP facilities as a percentage of the pre- petition debt as credit negative. Moody's view is primarily driven by the burden of debt service on the company during reorganization, as well as the high hurdle of debt repayment that the company might face trying to emerge from bankruptcy should the sale of IP Portfolio fail to meet management's expectations. The bankruptcy will enable Kodak to reduce its debt burden and interest expense to more manageable levels. However, the large number of secured and unsecured lenders (including the trustees of Kodak's post-retirement and pension obligations) with differing priorities of claim increases the complexity of the reorganization. It also increases the risk that Kodak may not be able to complete the restructuring process and exit Chapter 11 proceedings within the tenor of the DIP facilities. "In our opinion, Kodak has deep fundamental challenges to overcome in order to successfully emerge from bankruptcy. Even if the company achieves steps to exit parts of its digital still camera business, manage the sun setting of the traditional film segment, and reduce its overall cost structure, we believe Kodak will remain highly challenged to generate sufficient cash flows necessary to invest and remain competitive in its digital printing and packaging portfolio," according to Moody's. The principal methodology used in rating Eastman Kodak Corporation was the Debtor-In-Possession Lending Industry Methodology published in March 2009. ELITE PHARMACEUTICALS: Amends Socius Securities Purchase Pact ------------------------------------------------------------- On Jan. 9, 2012, Elite Pharmaceuticals, Inc., entered into a securities purchase agreement with Socius CG II, Ltd. On Feb. 28, 2012, the Company and Socius executed an amendment to the Purchase Agreement, certain exhibits thereto, and the Warrant. The primary changes effected in the Amendment are: 1. The exercise price for the Additional Investment Right and the Warrant was increased from $0.07 per share to $0.10 per share and the initial number of shares of the Company's common stock issuable upon exercise of the Warrant was reduced from 25,000,000 to 17,500,000. 2. Pursuant to the Purchase Agreement, Socius had the option to pay for shares of the Company's common stock that it receives from the exercise of the Warrant and the Additional Investment Right with cash or a promissory note. Pursuant to the Amendment, Socius no longer has the option of paying in cash. 3. Pursuant to the Company's Articles of Incorporation, the Company has the option to redeem the shares of Series F Preferred Stock held by Socius by paying the redemption price either (i) in cash or (ii) by offset, exchange and cancellation of all outstanding promissory notes issued by Socius to the Company in connection with the automatic exercise of each of the Warrant and the Additional Investment Right such that following such offset, exchange and cancellation, no further amounts will be due or payable with respect to those shares of Series F Preferred Stock or those promissory notes and all of those shares of Series F Preferred Stock and promissory notes will no longer be outstanding. Pursuant to the Amendment, the Company has agreed that it will only elect to pay the redemption price by offset, exchange and cancellation of all outstanding promissory notes issued by Socius to the Company. 4. Pursuant to the Purchase Agreement, in the event the closing bid price of the Company's common stock during any one or more of the nine trading days on or immediately following the delivery or deemed delivery of a tranche notice falls below 75% of the closing bid price of the Company's common stock on the trading day immediately prior to the delivery or deemed delivery of a tranche notice, the tranche will be cancelled, and upon such cancellation, Socius was required to redeem any outstanding promissory note tendered by Socius in lieu of cash payment for Additional Investment Shares or Warrant Shares issued in connection with the applicable tranche notice for the principal amount of the promissory note plus accrued interest in exchange for, at Socius' option, either (i) cash or (ii) (a) 92% of any gross proceeds received by the Socius upon the sale of those Additional Investment Shares or Warrant Shares issued to Socius in connection with such tranche notice and (b) the return to the Company of any unsold Additional Investment Shares or Warrant Shares issued to Socius in connection with that tranche notice. Pursuant to the Amendment, Socius no longer has the option to redeem its outstanding promissory notes using cash. 5. No provision of the Purchase Agreement or the Warrant can be amended or waived by the Company or Socius. 6. Neither the Company nor Socius can assign any of their respective rights or obligations under the Purchase Agreement. Additionally, Socius cannot transfer any of its obligations under the Warrant. A full-text copy of the Amendment is available for free at: http://is.gd/mxZUCT About Elite Pharmaceuticals Northvale, New Jersey-based Elite Pharmaceuticals, Inc., is a specialty pharmaceutical company principally engaged in the development and manufacture of oral, controlled-release products, using proprietary technology and the development and manufacture of generic pharmaceuticals. The Company has one product, Phentermine 37.5mg tablets, currently being sold commercially. The Company's balance sheet at Dec. 31, 2011, showed $10.34 million in total assets, $24.65 million in total liabilities, and a $14.31 million total stockholders' deficit. Demetrius & Company, L.L.C., in Wayne, New Jersey, expressed substantial doubt about Elite Pharmaceuticals' ability to continue as a going concern. The independent auditors noted that the Company has experienced significant losses resulting in a working capital deficiency and shareholders' deficit. ENERGY CONVERSION: Taps AlixPartners as Financial Advisor --------------------------------------------------------- BankruptcyData.com reports that Energy Conversion Devices filed with the U.S. Bankruptcy Court motions to retain AlixPartners (Contact: Ted Stenger) as financial advisor at these hourly rates: managing director at $815 to $970, director at $620 to $760, vice president at $455 to $555, associate at $305 to $405, analyst at $270 to $300 and paraprofessional at $205 to $225 and Signature Associates (Contact: John Boyd) as real estate consultant for transaction fees ranging from 3.5 to 6%. About Energy Conversion Devices Energy Conversion Devices -- http://energyconversiondevices.com/ -- has a renowned 51 year history since its formation in Detroit, Michigan and has been a pioneer in materials science and renewable energy technology development. The company has been awarded over 500 U.S. patents and international counterparts for its achievements. ECD's United Solar wholly owned subsidiary has been a global leader in building-integrated and rooftop photovoltaics for over 25 years. The company manufactures, sells and installs thin-film solar laminates that convert sunlight to clean, renewable energy using proprietary technology. Energy Conversion Devices filed for Chapter 11 relief (Bankr. E.D. Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker presides over the case. Aaron M. Silver, Esq., Judy B. Calton, Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz & Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel. The Debtor estimated assets and debts of between $100 million and $500 million as of the petition date. The petition was signed by William Christopher Andrews, chief financial officer and executive vice president. Affiliate United Solar Ovonic LLC filed a separate Chapter 11 petition on the same day (Bankr. E.D. Mich. Case No. 12-43167). Affiliate Solar Integrated Technologies, Inc., filed a petition for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 12-43169. FIDELITY NATIONAL: Moody's Rates New $500MM Debt at 'Ba2' --------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Fidelity National Information Services, Inc.'s proposed $500 million of senior notes due 2022. All other ratings, including the Ba1 corporate family rating (CFR) and the stable outlook, remain unchanged. Proceeds would be used to repay a portion of the senior secured term loans. The instrument ratings are not expected to change from the debt reallocation because the change in priority of claims is modest relative to FIS' total debt of about $4.8 billion. Ratings Rationale The Ba1 CFR and stable outlook reflect Moody's expectation that FIS will generate low to mid single digit organic revenue growth and consistent free cash flow of at least $700 million in 2012. Despite the slow U.S. economic recovery and still challenging environment facing U.S. financial institutions, Moody's expects FIS' performance to remain steady over the intermediate term. This is because of its recurring revenue stream and the ongoing customer demand for its core processing services and electronic payment capabilities. The outlook assumes that FIS will maintain an adjusted debt to EBITDA target of less than 3 times. Principal Methodology The principal methodology used in rating FIS was the Global Business & Consumer Service Industry 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. With over $5.8 billion of projected annual revenues, FIS provides card issuing, core bank processing, and online payment services to financial institutions. FIS is the largest provider of U.S. core banking services, as measured by revenues, ahead of Fiserv and Jack Henry. The following rating has been assigned: - $500 million Senior Notes due 2022 -- Ba2 (LGD-5, 84%) The following ratings remain unchanged (assessments revised): - CFR Ba1 - PDR Ba1 - $1.05 billion Revolving Credit Facility maturing 2014 -- Ba1 (LGD-3, 38%) - $2.1 billion Term Loan A due 2014 -- Ba1 (LGD-3, 38%) - $1.25 billion Term Loan B due 2016 -- Ba1 (LGD-3, 38%) - $750 million Senior Notes due 2017 -- Ba2 (LGD-5, 84% from 88%) - $500 million Senior Notes due 2020 -- Ba2 (LGD-5, 84% from 88%) - Speculative Grade Liquidity Rating -- SGL-1 FIDELITY NATIONAL: Fitch Lifts Issuer Default Rating From 'BB+' --------------------------------------------------------------- Fitch Ratings has upgraded Fidelity National Information Services, Inc. (FIS) Issuer Default Rating (IDR) to 'BBB-' from 'BB+'. Fitch also expects to rate FIS' announced offering of $500 million in 10-year senior unsecured bonds 'BBB-'. Proceeds from this offering will be used to repay an equivalent portion of senior secured debt. The rating upgrade reflects FIS' continued de-leveraging efforts and expectations for more conservative capital allocation going forward. Specifically, FIS has reduced leverage (total debt to EBITDA) to 2.7 times (x) as of Dec. 31, 2011, from 3.2x at the end of 2010. EBITDA growth of 8.8%, per Fitch estimates, and total debt reduction of $382 million to $4.8 billion during 2011 drove the decline in leverage. Free cash flow also increased from $681 million in 2010 to $811 million in 2011. Fitch believes that FIS has adopted a more conservative approach to capital allocation. Historically the company actively pursued debt financed acquisitions and debt-financed share repurchases. Going forward, Fitch believes that acquisitions will be limited to small niche additions to the business and funded by cash from operations. Fitch expects that FIS will continue to focus on shareholder returns but that share repurchases will not result in significant leveraging events beyond levels contemplated in the rating. FIS' ratings are supported by many qualitative factors which also drive significant event risk. Specifically, FIS competes in a relatively stable market with high barriers to entry, significant recurring revenue and long-term contracts. The company's strong profitability (EBITDA margins of 31% in 2011) and free cash flow generation are evidence of this position in the marketplace. The company has in the past viewed these characteristics as a platform for leveraging events and has also been the target of various leverage buyout inquiries. Fitch believes that a leveraged recap or leveraged buyout event remains the biggest risk for the credit. However, a more conservative approach to capital allocation from management and recent significant increase in the dividend rate, Fitch believes, reduces the probability of such an event. While higher dividends are not generally considered credit friendly, Fitch believes that for FIS, this should reduce some activist shareholder pressure in the future. FIS' annual dividend was raised from $0.20 per share to $0.80 per share in January 2012. This represents a 2.6% dividend yield based on the current stock price. Fitch believes this dividend level should support the stock in the future which would in theory partially mitigate shareholder interest in increasing leverage at the company. Of note, FIS' current unsecured bonds contain a restricted payment basket which could restrict future debt finance buybacks based on a total leverage ratio of 3x. However, if FIS attains an investment grade rating, this and other covenants in the unsecured note indenture fall away. Fitch estimates FIS' cash flow leverage (funds from operations less capex and dividends to total adjusted debt) at 14.6% for the LTM ended December 2012 (11.4% when adjusted for the higher dividend rate going forward in 2012). A key consideration of FIS' ratings is its free cash flow (FCF) conversion rate and FCF to debt leverage metrics. Fitch believes that the company's capitalization of software development costs tends to exaggerate EBITDA on a relative basis. To compensate for this potential discrepancy, Fitch places greater emphasis on evaluating FIS' leverage on a cash flow basis relative to peers. Fitch expects debt to EBITDA to remain under 3x going forward and cash flow leverage to remain above 10%. The ratings for FIS' senior secured credit facility and term loans have been upgraded to 'BBB-' from 'BB+' while the senior unsecured notes have also been upgraded to 'BBB-' from 'BB'. The prior senior unsecured rating, 1-notch below the IDR and senior secured rating, reflected both the high mix of secured debt in the capital structure as well as the non-investment grade IDR. The move to equalize the ratings across all debt tranches with the IDR reflects Fitch's expectation that the company will eventually adjust its capital structure to be unsecured once it can issue debt as an investment grade credit. Rating strengths include the following: -- Stable end demand; -- Strong diversification, with increasing international diversification although highly dependent on small- and mid- tier banks; -- High switching costs. Rating concerns include: -- History of debt M&A and shareholder friendly actions; -- High fixed cost business; -- Potential regulatory changes; -- Increasing competition from non-traditional competitors such as IBM and Oracle which have greater resources. Total liquidity as of Dec. 31, 2011 was $1.2 billion consisting of approximately $824 million available under FIS' $1 billion senior secured revolving credit facility which expires in July 2014 and $415 million in cash. Total debt as of Dec. 31, 2011 was $4.8 billion and consisted principally of: -- $175 million outstanding under FIS' aforementioned revolving credit facility; -- $2.1 billion outstanding under a senior secured term loan-A maturing July 2014; -- $1.25 billion outstanding under senior secured term loan-B maturing July 2016; -- $750 million in 7.625% senior unsecured notes due July 2017; -- $500 million in 7.875% senior unsecured notes due July 2020. Fitch has upgraded FIS' ratings as follows: -- IDR to 'BBB-' from 'BB+'; -- $1 billion secured revolving credit facility (RCF) to 'BBB-' from 'BB+'; -- Senior secured term loan A to 'BBB-' from 'BB+'; -- Senior secured term loan B to 'BBB-' from 'BB+'; -- $750 million in 7.625% senior unsecured notes due July 2017 to 'BBB-' from 'BB'; -- $500 million in 7.875% senior unsecured notes due July 2020 to 'BBB-' from 'BB'. The Rating Outlook is Stable. FIRST CAPITAL: Moody's Confirms 'Caa1' CFR, 'Caa3' Notes Rating --------------------------------------------------------------- Moody's Investors Service confirmed First Capital Holdings, Inc's Corporate Family Rating (CFR) of Caa1 and Senior Unsecured Notes rating of Caa3, both with a negative outlook. This action concludes the rating review initiated on October 12, 2011. The CFR rating reflects the limitations of the company's short- term, bilateral funding structure, as well as First Capital's significant reliance on secured funding. The rating also considers the company's leverage position. The negative rating outlook reflects the fact that while First Capital has sufficient near-term availability under its credit facilities, Moody's has concerns about the company's medium-term liquidity position and growth prospects. First Capital's dependence on private borrowing arrangements with a limited number of bilateral facilities represents a key rating constraint. Reliance on secured debt facilities with relatively short tenors, together with major concentrations among its lender group, subjects the company to significant renewal and refinancing risk. Reliable access to funding is critical to the firm's ability to provide factoring services and extend loans to its clients. First Capital's prevalent use of secured debt results in a high level of encumbered assets that limits the firm's financial and operational flexibility. In addition, First Capital's concentrated ownership structure provides some uncertainty regarding its future plans for growth and capital and liquidity policies. The principal methodology used in rating First Capital is analyzing the Credit Risks of Finance Companies, which can be found at www.moodys.com in the Rating Methodologies subdirectory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating these issuers can also be found in the Rating Methodologies sub- directory. First Capital is a commercial finance company headquartered in Boca Raton, FL. FOREST OIL: S&P Affirms 'BB-' Corporate Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Denver- based Forest Oil Corp. (Forest) to negative from stable and affirmed all of its ratings, including the 'BB-' corporate credit rating, on the company. "The outlook revision reflects the potential for leverage to exceed our 4x downgrade threshold in 2013," said Standard & Poor's credit analyst Marc D. Bromberg. "Forest is levered primarily to very weak natural gas, and it is focusing its drilling program primarily on more profitable liquids (oil and natural gas liquids (NGLs). However, Forest is relatively new to some of its liquids- rich plays, including the Eagle Ford and Permian basins, adding some uncertainty around its liquids-production growth and drilling costs over the next couple years. Given that most of its production will continue to come from natural gas (we forecast about 70% over the next couple years) and its weak hedge book in 2013, Forest's profitability and credit measures will depend on a successful drilling program in its liquids-rich basins." "At our price deck, which for oil and gas in 2013 is $70 per barrel and $3.25 per thousand cubic feet (Mcf), respectively, we forecast that Forest will need to increase oil production at least 20% from 2012 to 2013 to remain below our 4x downgrade trigger. We think this is achievable given its good acreage positions in prolific oil-rich basins, but we think it will depend on good production from its liquids-rich wells while maintaining cash costs in-line with current $2.44/Mcfe to $2.71/Mcfe guidance. If this occurs, we will revise the outlook to stable," S&P said. "The rating on Forest reflects the capital-intensive and cyclical nature of the E&P industry and a reserve mix that is weighted toward weak natural gas prices. Ratings also reflect the company's good liquidity, onshore geographic diversity, and the relatively low-risk nature of its drilling program. With the spin-off of its Canadian assets (Lone Pine), the company's remaining reserves are now levered exclusively to the U.S. We consider Forest to have an 'aggressive' financial risk and 'fair' business profile (as our criteria define the term)," S&P said. "The outlook is negative because we believe Forest could possibly exceed leverage of 4x in 2013 if its liquids-rich drilling program performs below our expectations. For a stable outlook, we envision that Forest would need to increase oil production by more than 20% between 2012 and 2013 to generate profits necessary to maintain leverage below 4x. We think that Forest could also exceed our downgrade trigger if it adds debt to finance a more aggressive capital spending plan or an acquisition. We could revise the outlook to stable if its liquids focused drilling program is successful and costs are in-line, or below, current guidance," S&P said. FULLER BRUSH: Lists $22 Million Owing to Victory Park ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Fuller Brush Co. explained in a bankruptcy court filing that the Chapter 11 became necessary to prevent the landlord from terminating the lease for the principal facility in Great Bend, Kansas. The landlord is listed in a court filing as having a $10.6 million claim based on a capitalized lease. The assets are $22.9 million, with debt totaling $50.9 million, a court filing says. About The Fuller Brush Company Founded in 1906, The Fuller Brush Company -- http://www.fuller.com/-- sells branded and private label products for personal care, commercial and household cleaning and has a current catalog of 2,000 cleaning products. 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. Founded in 1906 and based in Great Bend, Kansas, The Fuller Brush Company, Inc., and its parent, CPAC, Inc., filed for Chapter 11 protection (Bankr. S.D.N.Y. Case Nos. 12-10714 and 12-10715) in Manhattan on Feb. 21, 2012. Fuller Brush filed for bankruptcy five years after the company was taken over by private equity firm Buckingham Capital Partners. Fuller said it will be business as usual while undergoing Chapter 11 restructuring. But it said that while in reorganization, it intends to trim about half of the current catalog of cleaning products. The Debtors have tapped Conway MacKenzie, Inc., as restructuring crisis manager and Lawrence R. Perkins as chief restructuring officer. Herrick, Feinstein LP is the bankruptcy counsel. Fuller, which has 180 employees as of the Chapter 11 filing, disclosed $22.9 million in assets and $50.9 million in debt. An affiliate of the landlord, Victory Park Capital Advisors LLC, is now the secured lender owed more than $22 million. An affiliate of Chicago-based Victory Park has agreed to provide $5 million in secured financing for the Chapter 11 effort. The new loan will come ahead of existing liens. GIORDANO'S ENTERPRISES: VPC Forms New Mgt. After Ch. 11 Purchase ---------------------------------------------------------------- Victory Park Capital disclosed that the appointment of new management for Giordano's, a leading casual dining brand, as part of an overall business restructuring plan. The appointments, effective immediately, follow the purchase of the pizza chain out of Chapter 11 bankruptcy in November 2011 by VPC, the alternative asset-management firm, which provides direct financing to small cap and middle-market companies. The new top management of Giordano's and its "World Famous Stuffed Pizza" brand are: -- CEO Yorgo Koutsogiorgas, 57, will assume the senior leadership position for the Giordano's organization as he and the team work to revitalize the menu offerings and position the company for the next chapter of exciting growth. Koutsogiorgas, who has more than 25 years of restaurant industry experience, is a former partner of Chicago-based Lettuce Entertain You Enterprises, and, most recently, a co-founder and partner of Go Roma, an Italian restaurant group in the Chicagoland area. -- Chief Financial Officer Brent Johnson, 47, with responsibility for Giordano's finance and accounting functions, will provide valuable leadership and best practices for improving the operations of Giordano's. Johnson has more than 20 years of experience and leadership in financial operations and in leadership roles with large public, mid-cap private-equity, growth-minded and financially distressed companies. "The Giordano's brand will benefit greatly under this new leadership team," said Richard Levy, managing partner of Victory Park Capital. "Combined, Yorgo and Brent have spent more than 50 years in the restaurant and hospitality industry. Their proven track records will be invaluable in executing the operational changes and business strategy to reposition Giordano's for long- term growth while preserving its unique brand philosophy and superior customer experience, a hallmark of Giordano's for the past 40 years. In addition, we look forward to adding some additional talent in the next few months that will further enhance the strengths of this management team." Previously, Koutsogiorgas was a partner and vice president of operations at Lettuce Entertain You Enterprises, where he managed operations and was Chief People Officer at Maggiano's Little Italy. There, he developed a strong culture centered on people, food and hospitality. He graduated from the University of Athens in Greece and completed his graduate studies at Southern Methodist University. Formerly, Johnson served as vice president of financial planning, business analysis and strategy at Culligan International and vice president of finance at Movie Gallery. Previous to that, he held several leadership positions at Yum! Brands and most recently was vice president of planning and strategy at Yum! Restaurants International. He received his Master of Business Administration degree from the University of North Carolina and a Bachelor of Science degree in business administration, graduating cum laude, from Marquette University. About Giordano's Enterprises Chicago, Illinois-based Giordano's Enterprises, Inc., was founded in 1974 in Chicago, Illinois, by two Argentinean immigrants, Efren and Joseph Boglio. In 1988, John and Eva Apostolou purchased control of Giordano's. Although this casual dining eatery offers a broad array of fine Italian cuisine, it is primarily know for its "Chicago's World Famous Stuffed Pizza". Giordano's Enterprises and 26 affiliates filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Lead Case No. 11-06098) on Feb. 16, 2011. Six additional affiliates filed for Chapter 11 protection on Feb. 17, 2011. Michael L. Gesas, Esq., David A. Golin, Esq., Miriam R. Stein, Esq., and Kevin H. Morse, at Arnstein & Lehr, LLP, in Chicago, serve as the Debtors' bankruptcy counsel. Giordano's Enterprises disclosed $59,387 in assets and $45,538,574 in liabilities as of the Chapter 11 filing. Philip V. Martino was appointed as Chapter 11 trustee in the Debtors' bankruptcy cases, at the behest of the U.S. Trustee. In November 2011, VPC Pizza Holdings, LLC, bought substantially all of Giordano's Enterprises' assets, business and goodwill out of bankruptcy in an 11 U.S.C Sec. 363 purchase. Judge Eugene R. Wedoff authorized the Chapter 11 trustee to modify the consolidated case caption to reflect the change of name from Giordano's Enterprises Inc., et al., to GEI-RP. GLOBAL FOOD: Fryer Resigns from Board Due to Potential Conflicts ---------------------------------------------------------------- Stephen J. Fryer resigned as a member of the Board of Directors of Global Food Technologies, Inc. The resignation was due to the fact that Mr. Fryer is an investment banker who may desire to propose certain potential financing, listing or other strategic transactions. His resignation ensures that any such proposals will be an arms-length transaction and avoid any potential conflicts of interest. The Board of Directors is conducting a search for a qualified person to fill the vacancy on the Board. About Global Food Headquartered in Hanford, California, Global Food Technologies, Inc., is a life sciences company focused on food safety processes for the food processing industry by using its proprietary scientific processes to substantially increase the shelf life of commercially packaged seafood and to make those products safer for human consumption. The Company has developed a process using its technology called the "iPuraT Food Processing System". The System is installed in processor factories in foreign countries with the product currently sold in the United States. The Company had a net loss of $2.9 million on $107,000 of revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $2.7 million on $933,000 of revenues for the same period last year. The Company's balance sheet at Sept. 30, 2011, showed $1.3 million in total assets, $4.3 million in total liabilities, all current, and a stockholders' deficit of $3.0 million. Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport Beach, California, expressed substantial doubt about Global Foods Technologies' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has an accumulated deficit of approximately $64.4 million at Dec. 31, 2010, has negative cash flow from operations of approximately $2.8 million for the year ended Dec. 31, 2010, and has negative working capital at Dec. 31, 2010. GOLF RESORT: Economic Woes Prompt Chapter 11 Bankruptcy Filing -------------------------------------------------------------- Vishal Persaud at Ocala.com reports that Golden Hills Golf and Turf Club filed for protection in U.S Bankruptcy Court for the Middle District of Florida, citing the "downturn in the economy" and leases and secured debt "that is too burdensome for the cash flow." The report notes that the petition includes bills from various service vendors, loans and close to $67,000 in sales tax owed to the Florida Department of Revenue. According to the report, in a separate foreclosure complaint filed in Marion County court on Feb. 7, Air Golf, LLC is suing Arthur Skula, the new owner, and Golf Resort Properties LLC, the club's corporate entity, for $897,160.55. That is the amount remaining on a $900,000 mortgage agreed to last June, when the Skulas bought the 500-acre club from Castro Convertibles heiress Bernadette Castro. The property faces foreclosure if that amount is not paid. The report relates that the mortgage was modified in November, but the Skulas defaulted on the note after they failed to make payments due on Sept. 23, 2011. All subsequent payments also were not received. The report adds that the Skulas are responsible for the full amount owed to the secured creditors, the mortgage lender and lessors. But that isn't the case for unsecured creditors, such as the service vendors who contracted to provide food and other similar services to the club. The report says the bankruptcy petition stated that the golf club is worth about $3 million and the owners have no other assets. The report notes a hearing was scheduled for March 1 on the golf club's motion to pay $39,297 in wages owed to 48 employees for a two-week period before the petition was filed. The report adds that Air Golf, the golf club's primary creditor, objected to the request. About Golf Resort Properties Golf Resort Properties, LLC, dba Golden Hills Golf & Turf Club, in Ocala, Florida, filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 12-00928) on Feb. 16, 2012. Judge Jerry A. Funk presides over the case. The Law Office of Thomas W. Cartwright, Esq., serves as the club's counsel. The club scheduled $2,742,721 in assets and $1,419,277 in liabilities. The petition was signed by Art Skula, managing member. GRACEWAY PHARMACEUTICALS: Sets April 11 Liquidating Plan Hearing ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Graceway Pharmaceuticals LLC scheduled an April 11 confirmation hearing for approval of the liquidating bankruptcy plan after the bankruptcy judge in Delaware approved the explanatory disclosure statement on March 1. Terms of the Plan are: * For the remainder of their claims not paid when the business was sold, first-lien creditors with claims of as much as $433 million are to receive remaining proceeds from their collateral plus most proceeds from lawsuits to be prosecuted by a trust. * The first-lien debt will be paid from 96.7% to 100%. * Second-lien lenders with as much as $364 million in claims should see a recovery of 2.7% to 4.6%, from whatever is left of the collateral after the first lien is paid. The second-lien creditors will also collect some lawsuit proceeds. * Unsecured creditors are expected to have a payday between 0.9% and 3.3% from a slice of lawsuit proceeds. About Graceway Pharmaceuticals Based in Bristol, Tennessee, Graceway Pharmaceuticals LLC offered dermatology, respiratory, and women's health products. Its Zyclara Cream is used for the treatment of external genital and perianal warts (EGW) in patients 12 years of age and older. The company offers products for the treatment of dermatology conditions, such as actinic keratosis, superficial basal cell carcinoma, external genital warts, atopic dermatitis, and acne; and respiratory conditions, such as asthma. Graceway Pharmaceuticals and its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 11-13036) on Sept. 29, 2011. The company's debt includes $430.7 million owing on a first-lien revolving credit and term loan. Second-lien debt is $330 million, with mezzanine debt totaling another $81.4 million. Attorneys at Young Conaway Stargatt & Taylor LLP serve as counsel to the Debtors. Latham & Watkins LLP is the co-counsel. Alvarez and Marsal North America, LLC, is the financial advisor. Lazard Freres & Co. LLC is the investment banker. PricewaterhouseCoopers LLP is the tax consultant. BMC Group serves as claims and notice agent. Lowenstein Sandler PC serves as the committee counsel. Graceway Pharmaceuticals LLC completed the sale of the business in December 2011 to Medicis Pharmaceutical Corp. for $455 million. GRAHAM SLAM: Has Access to Cash Collateral Until March 15 --------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Washington entered a second interim order allowing Graham Slam, LLC, continued use of cash collateral of Garrison Commercial Funding VII, LLC, until March 15, 2012. The court entered the first interim order on Jan. 17, 2012. The Debtor is obligated to the lender under the terms of two Promissory Notes both dated as of Oct. 1, 2009. As of the Petition Date, the outstanding principal amount of the first loan was $6.87 million and the outstanding principal amount of the second loan was $5.1 million. The indebtedness is secured in first position by a Deed of Trust recorded against certain real property and improvements owned by the Debtor commonly known as the Northeast corner of 224th Street East and State Route 161, Graham, Washington. The Debtor also granted Garrison a first- position security interest in leases, rents and profits of the Property. As of July 11, 2011, the principal, interest, and late charges were $12.6 million, plus additional sums for interest, late fees, attorneys' fees and costs. Garrison also seeks additional interest and late fees. The Debtor's sole source of revenue is cash generated from the rental income of the Property, including Cash Collateral, and it is necessary for the Debtor to pay operating expenses. As adequate protection for any Cash Collateral used by the Debtor, the lender is granted, pursuant to sections 361(1) and 363(e) of the Bankruptcy Code, security interests in and liens against all property of the estate of the same kind, type and nature as the Prepetition Collateral that is acquired after the Petition Date and all proceeds of the Postpetition Collateral. In addition to the Replacement Lien, under the interim Order, the Debtor will pay the Lender $39,371.92 per month for the months of February 2012 and March 2012. This payment will be made by allowing the Lender to apply $78,743.84 of the rents it has collected from Rite-Aid to its secured claim. The Lender's retention of the balance of the Rite-Aid funds from November 2011 shall not be deemed a violation of the automatic stay. The final hearing will be held on March 14, 2012, at 10:00 a.m. Graham Slam, LLC, filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 11-49300) on Oct. 20, 2011. Judge Brian D. Lynch oversees the case. The Debtor disclosed assets of $13,483,263 and liabilities of $12,890,039. The Debtor tapped Richard G. Birinyi, Esq., at Schwabe Williamson & Wyatt P.C., in Seattle, as its bankruptcy counsel. The petition was signed by Brent C. Nicholson, managing member. GREAT PLAINS: Files List of 20 Largest Unsecured Creditors ------------------------------------------------------------- Great Plains Exploration, LLC, filed with the Bankruptcy Court a list of creditors holding the 20 largest unsecured claims: Name of creditor Nature of claim Amount of Claim ---------------- --------------- --------------- Lake Hospital Foundation 10 E. Washington Street Painesville, OH 44077 Trade Debt $81,975 Westfield Insurance P.O. Box 9001566 Louisville, KY 40290 Insurance $67,765 Quality Boring & Excavating P.O. Box 12 Newbury, OH 44065 Trade Debt $43,699 Standard Funding Corp Trade Debt $39,141 Lake Hospital System, Inc. Royalty Payment $34,979 Newell Creek Preserve, LLC Trade Debt $16,079 AGCS Marine Insurance Company Trade Debt $14,452 GE Capital Trade Debt $14,443 GEO Services Trade Debt $11,760 Typro Ltd. Trade Debt $10,923 Midway Industrial Campus Co. Ltd. Trade Debt $8,141 Komatsu Financial Trade Debt $7,279 Co-op Industries Trade Debt $5,050 Newell Creek Development Company Trade Debt $4,991 W & W Construction Trade Debt $4,940 Steve Calabrese Royalty Payment $4,885 Dworken & Bernstein, LPA Legal Services $4,517 J.R. Smail, Inc. Trade Debt $4,381 Montana State Fund Trade Debt $4,097 Hoover Oil Field Supply Trade Debt $3,914 About Great Plains Exploration, Oz Gas and John D. Oil Mentor, Ohio-based Great Plains Exploration LLC engaged primarily in the acquisition, development, production, exploration, and sale of oil and gas. Great Plains primarily sells its oil and gas products to gas marketing companies and refiners. Oz Gas, LTD. and Great Plains filed voluntary Chapter 11 petitions (Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10059) on Jan. 11, 2012. John D. Oil and Gas Company filed a voluntary Chapter 11 petition (Bankr. W.D. Pa. Case No. 12-10063) on Jan. 13, 2012. Judge Thomas P. Agresti oversees the cases. Robert S. Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to the Debtors. Each of Great Plains and Oz Gas estimated $10 million to $50 million in assets and debts. The petitions were signed by Richard M. Osborne, CEO. John D. Oil, also based in Mentor, Ohio, was in the business of acquiring, exploring, developing, and producing oil and natural gas in Northeast Ohio. It had 58 producing wells. Its balance sheet at Sept. 30, 2011, showed $8.12 million in total assets, $12.92 million in total liabilities and a $4.79 million total deficit. GRUBB & ELLIS: Could Liquidate If Sale Plan Isn't Approved ---------------------------------------------------------- Grubb & Ellis Co. said it would "highly likely" be forced to liquidate if the bankruptcy court fails to approve a quick sale process where BGC Partners Inc. would buy the assets absent higher and better offers. As reported in the Troubled Company Reporter on March 1, 201, the committee of unsecured creditors in Grubb & Ellis Co.'s Chapter 11 case, joined by the largest unsecured creditor owed $12.1 million, are objecting to the real-estate company's proposed sale plan, saying it locks in BGC Partners Inc.'s bid, which provides them with no recovery. A hearing on the auction procedures was scheduled for March 6. According to Bill Rochelle, the bankruptcy columnist for Bloomberg News, the company said it is willing to make some changes in sale procedures sought by the committee. The Creditors Committee has claimed that the absence of competitive bidding "guarantees" there will be no recovery by unsecured creditors. 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 Official Committee of Unsecured Creditors has selected Alston & Bird LLP to serve as legal counsel. 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. HEXION U.S.: Moody's Assigns 'Ba3' Rating to 1st Lien Notes ----------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the guaranteed senior secured first lien notes due 2020 of Hexion U.S. Finance Corp (HFC), a wholly owned subsidiary of Momentive Specialty Chemicals Inc. (MSC). Proceeds from the notes will be used to repay amounts outstanding under MSC's Term Loan B maturing in May 2013. Moody's also assigned Ba3 ratings to MSC's amended and extended revolving credit facility due 2014 and Term Loan B due 2017. As part of this actions, Moody's also affirmed all of MSC's other ratings (CFR at B3) and moved the outlook to stable from positive due to the company's weak performance in the fourth quarter of 2011 and the expectation for a slow recovery in financial performance in 2012. "With this refinancing MSC will have refinanced or extended the maturities on the vast majority of the debt that was originally slated to mature prior to 2015," stated John Rogers, Senior Vice President at Moody's. "There is roughly $120 million of debt maturing at the end of 2014, which can easily be repaid from the revolver or operating cash flows; $150 million of short term debt at international subsidiaries will likely be rolled over on an ongoing basis." Moody's affirmed MSC's other ratings (Corporate Family Rating at B3) and adjusted the LGD assessments to reflect the slight increase in debt as a result of this transaction. Ratings Rationale MSC's B3 Corporate Family Rating reflect its elevated leverage, exposure to volatile commodities and the lack of consistent free cash flow generation. The rating benefits from its size, product and operational diversity, a seasoned management team that has demonstrated the ability to successfully manage through difficult end market conditions and a growing presence in Asia and Latin America (although North America and Europe still account for over 75% of sales). The Ba3 rating on the new notes and extended term loan reflect their position in the capital structure relative to almost $2.2 billion of junior debt. The new notes will share the same collateral package as the other secured debt and rank pari passu with the term loan. Moody's noted that there is an intercreditor agreement between the first lien debt holders that allows the term loan debtholders to unilaterally make decisions on certain matters regarding the collateral, which could cause the notes to be subordinated to an asset based lending facility in the future. The move to a stable outlook reflects the weakening of MSC's credit metrics in the fourth quarter of 2011 with Debt/EBITDA widening to 6.7x and Retained Cash Flow/Debt falling to 7%. Additionally, comments by the company on its fourth quarter conference call indicate that the first quarter of 2012 is off to a slow start suggesting that the first quarter will be weaker than the first quarter of 2011. To the extent that MSC can get Net Debt/EBITDA sustainably below 6.0x and Retained Cash Flow/ Net Debt above 8%, Moody's would likely raise its CFR to a B2. Moody's noted that MSC had a large cash balance at the end of the year but a large portion of that cash will likely be plowed back into working capital as sales recover in the first and second quarter. The aforementioned metrics reflect Moody's Global Standard Adjustments which include the capitalization of pensions, operating leases and the inclusion of roughly $300 million of holdco debt maturing in 2014, which will likely be refinanced over the next year once earnings have improved. Moody's stated that there was limited downside to the rating at the current time as the company's liquidity and lack of debt maturities have substantially reduced the probability of a default. Only some exogenous event that greatly reduces its cash balance and raises Net Debt/EBITDA back above 10x could trigger a downgrade. Ratings assigned: Hexion U.S. Finance Corp. - Guaranteed senior secured first lien notes due 2022 at Ba3 (LGD2, 18%) Momentive Specialty Chemicals Inc. - Amended and extended guaranteed senior secured revolver due 2014 at Ba3 (LGD2, 18%) - Amended and extended guaranteed senior secured term loan due 2017 at Ba3 (LGD2, 18%) Ratings affirmed: Momentive Specialty Chemicals Inc - Corporate Family Rating at B3 - Probability of Default Rating at B3 - Guaranteed senior secured revolver due 2013* at Ba3 (LGD2, 18%) - Guaranteed senior secured term loan due 2013* at Ba3 (LGD2, 18%) - Guaranteed senior secured term loan due 2015* at Ba3 (LGD2, 18%) - Guaranteed senior secured 1.5 lien notes due 2018 at B3 (LGD4, 52%) - Guaranteed senior secured second lien floating rate notes due 2014 at Caa1 (LGD5, 77%) - Guaranteed senior secured second lien fixed rate notes due 2014 at Caa1 (LGD5, 77%) * - Senior unsecured notes at Caa2 (LGD6, 91%) *: These ratings will be withdrawn upon successful completion of this transaction. The principal methodology used in rating Momentive Performance Material Inc was the Global Chemical Industry rating 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. Momentive Specialty Chemicals, Inc., headquartered in Columbus, Ohio, is a leading producer of thermoset resins (epoxy, formaldehyde and acrylic). The company is also a supplier of specialty resins for inks and specialty coatings sold to a diverse customer base as well as a producer of commodities such as formaldehyde, bisphenol A (BPA), epichlorohydrin (ECH), versatic acid and related derivatives. HORIZON GLOBAL: SEC Raises Fraud Charges & Obtains Asset Freeze --------------------------------------------------------------- The Securities and Exchange Commission has charged a New York- based investment adviser with defrauding investors in five offshore funds and using some of their money to buy himself a multi-million dollar beach resort property on Long Island. The SEC alleges that Brian Raymond Callahan of Old Westbury, N.Y., raised more than $74 million from at least two dozen investors since 2005, promising them their money would be invested in liquid assets. Instead, Mr. Callahan diverted investor money to his brother-in-law's beach resort project that was facing foreclosure, and in return received unsecured, illiquid promissory notes. Mr. Callahan also used investor funds to pay other investors and make a down payment on the $3.35 million unit he purchased at his brother-in-law's real estate project. According to the SEC's complaint filed March 5 in federal court in Islip, N.Y., Mr. Callahan operated the five funds through his investment advisory firms Horizon Global Advisors Ltd. and Horizon Global Advisors LLC. He used the promissory notes to hide his misuse of investor funds. The promissory notes overstated the amount of money diverted to the real estate project. For instance, in 2011, Mr. Callahan received $14.5 million in promissory notes in exchange for only $3.3 million he provided to his brother-in-law. The inflated promissory notes allowed Mr. Callahan to overstate the amount of assets he was managing and inflate his management fees by 800% or more. "Callahan misled investors in his funds with false promises, and he enriched himself at their expense when he diverted fund assets for his personal use and pocketed inflated management fees," said Antonia Chion, Associate Director in the SEC's Division of Enforcement. According to the SEC's complaint, Mr. Callahan refused to testify in the SEC's investigation and recently informed investors about the investigation, but gave false assurances that no laws had been broken. Mr. Callahan also misled investors by not disclosing that in 2009, the Financial Regulatory Industry Authority barred him from associating with any FINRA member. The SEC charges Mr. Callahan and his advisory firms with violating federal antifraud laws, specifically Sections 17(a)(1), (2) and (3) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a), (b) and (c) thereunder, and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The SEC is seeking preliminary and permanent injunctions against Mr. Callahan and his firms, return of ill-gotten gains with interest, and financial penalties. At the SEC's request, and after a court hearing Monday, the court granted a temporary restraining order freezing the assets of Mr. Callahan and his advisory firms, enjoining them from violating the antifraud provisions, and granting other emergency relief. The SEC's investigation has been conducted by Holly Pal, Linda French, Osman Handoo, Ann Rosenfield, Natalie Lentz and Lisa Deitch of the SEC's Division of Enforcement. The SEC's litigation is being led by Dean Conway. The Commission acknowledges the assistance of the British Virgin Islands Financial Services Commission and the Bermuda Monetary Authority. HORNBECK OFFSHORE: Moody's Rates New Notes Due 2020 at 'Ba3' ------------------------------------------------------------ Moody's assigned a Ba3 rating to Hornbeck Offshore Services, Inc.'s (Hornbeck) proposed notes due 2020. The Ba3 Corporate Family Rating (CFR), Ba3 rating on the existing notes due 2014 and 2017, and the stable outlook remain unchanged. Hornbeck plans to use the proceeds from the offering to fund a tender offer for the $300 million senior notes due 2014, and upon completion of the tender the ratings on the notes due 2014 will be withdrawn. Ratings Rationale "The transaction enhances liquidity by extending debt maturities and reducing refinancing risk," commented Jonathan Kalmanoff, Moody's Analyst. The Ba3 CFR reflects Hornbeck's highly cyclical business, as well as the company's high quality fleet of vessels, good market position, geographic diversification, and deepwater focus. Demand for OSV's is sensitive to oil and natural gas price cycles which drive the levels of offshore E&P activity. Hornbeck's small size relative to most Ba3 oilfield service peers is balanced by its high EBITDA margins. The Ba3 CFR and stable outlook incorporates the expectation of increasing EBITDA throughout 2012, bringing elevated leverage back to within limits assumed in the Ba3 CFR. The Ba3 senior unsecured note rating reflects Hornbeck's overall probability of default, to which Moody's assigns a PDR of Ba3, and a loss given default of LGD4-58%. The size of the senior secured revolver's potential priority claim relative to the senior unsecured notes is not large enough to result in the notes being notched below the CFR given the assumed levels of revolver usage. Hornbeck has good liquidity through the end of 2012 with a December 31, 2011 pro forma cash balance of $396 million and $300 million of credit facility availability. Moody's expects the company to fund negative free cash flow during 2012, resulting from the newbuild program, with a portion of its cash balance. Financial covenants under the credit facility are EBITDA / cash interest of at least 2.0x, debt / capitalization of no more than 55.0%, and senior secured debt / EBITDA of no more than 2.0x. We expect Hornbeck to remain in compliance with the covenants during 2012. There are no debt maturities (pro forma for the tender of the notes due 2014) until November 2016 when the undrawn credit facility matures. Since only a portion of the fleet of vessels is pledged as collateral for the secured credit facility, Hornbeck would likely be able to utilize asset sales as a source of backup liquidity if needed. The stable outlook incorporates Moody's' expectation of increasing EBITDA, bringing debt / EBITDA back toward the 3.5x maximum sustained long-term leverage target which we view as appropriate for the Ba3 CFR. An increase in scale with assets approaching $3 billion, a larger worldwide market share, continued geographic diversification, and debt / EBITDA sustained around 2x could result in an upgrade. An increase in leverage, caused by either a severe market contraction or heavily debt funded growth in the fleet, with debt / EBITDA sustained above 3.5x could result in a downgrade. The principal methodology used in rating Hornbeck Offshore Services, Inc. was the Global Oilfield Services Rating 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. Hornbeck Offshore Services, Inc. provides marine transportation services to exploration and production, oilfield service, offshore construction, and U.S. military customers. HORNBECK OFFSHORE: S&P Rates $350-Mil. Sr. Unsec. Notes at 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned issue-level and recovery ratings to Covington, La.-based Hornbeck Offshore Services Inc.'s $350 million senior unsecured notes due 2020. The assigned issue rating on the notes is 'BB-' (one notch higher than the corporate credit rating). "The recovery rating on this debt is '2', indicating our expectation of a substantial (70% to 90%) recovery in the event of default," S&P said. "The company will use the proceeds to refinance $300 million of existing senior notes due 2014 and for general corporate purposes," S&P said. "The rating on marine service provider Hornbeck Offshore Services Inc. reflects the company's position in the volatile and cyclical marine services industry, as well as improved market conditions over the past year. Standard & Poor's rating on Hornbeck also incorporates its increased geographic diversity, and adequate liquidity of about $657 million, including $356.8 million of cash, as of Dec. 31, 2011," S&P said. Ratings List Hornbeck Offshore Services Inc. Corporate credit rating B+/Stable/-- New Rating $350 mil sr unsecd notes due 2020 BB- Recovery rating 2 HOSTESS BRANDS: Judge Can't Rule on Contracts, Union Argues ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Hostess Brands Inc. bakery workers' union took a page from the playbook of the pilots' union at American Airlines Inc. by arguing that the bankruptcy court can't authorize the termination of union contracts that already expired by their terms. According to the report, the bakery workers, in papers filed March 5, told the bankruptcy judge that the National Labor Relations Board now has exclusive jurisdiction following expiration of labor agreements. The union explained how the contracts were negotiated during Hostess's prior journey through Chapter 11. Contracts with 30 of the local unions expired on March 3, the pleading shows. Courts have "repeatedly held," according to the union, that bankruptcy courts lack jurisdiction or power to authorize modification of terms of employment once a contract has terminated by its terms. The union, the report relates, contends that relations between Hostess and the workers are now governed by federal labor law, not by bankruptcy law. Consequently, the union says the company has a duty to continue negotiating until impasses and may only then impose new wage rates or lower benefits. In that event, the union says it has the right to strike. Trial Put Off to March 23 There was to be a trial beginning March 5 on Hostess's motion to reject existing labor contracts. The company and the Teamsters union agreed to push the trial back to March 23. Mr. Rochelle notes that adjournments in such circumstances sometimes indicate the parties are working on settlement. 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. JACOBS ENTERTAINMENT: Moody's Keeps 'Caa1' Rating on $210MM Notes ----------------------------------------------------------------- Moody's Investors Service revised Jacobs Entertainment Inc's ("JEI") speculative grade liquidity (SGL) rating to SGL-3 from SGL-4 to reflect the modest improvement in near-term liquidity after it completed an amendment to extend its maturing bank credit facilities until December 16, 2013. Moody's affirmed all other long term ratings, including B3 Corporate Family (CFR) and Probability of Default (PDR) ratings, and Caa1 senior unsecured notes rating. The rating outlook remains negative. On Feb 29, 2012, JEI announced that effective February 23, 2012, it has executed an amendment to their existing $100 million credit facility agreement to amend and extend its maturing bank debt from June 16, 2012 to December 16, 2013. In addition, the company intended to pay down $11.7 million outstanding balance on the term loan and upsized the commitment under its $37 million revolving credit facility to $40 million. Moody's has withdrawn the ratings of the amended $100 million senior secured facilities. Ratings affirmed and assessment updated: Corporate Family Rating at B3 Probability of Default Rating at B3 $210 million Sr. Unsecured Notes to Caa1 (LGD4, 67%) from Caa1 (LGD4, 69%) Rating upgraded: Speculative Grade Liquidity Rating to SGL-3 from SGL-4 Rating withdrawn: $40 million Sr. Secured Revolving Credit Facility due December 2013 at Ba3 $45 million Sr. Secured Term Loan due December 2013 at Ba3 $11.8 million Sr. Secured Term Loan (non extended) due July 2012 at Ba3 Ratings Rationale The revision of the liquidity rating recognizes JEI's modestly improved liquidity profile, as the amendment and extension extends its debt maturity profile. "However, JEI still faces significant refinancing risk as bank debt will become current again in December 2012," commented Moody's analyst John Zhao. The liquidity rating could revert to a SGL-4 should the company fail to address the refinancing plan by the year end 2012. JEI's adequate liquidity profile is also tempered by expected increases in borrowing under its revolver, and anticipated tight cushion under its financial covenants within the next 12 months. The rating outlook remains negative, reflecting Moody's view that refinancing risk, albeit abated temporarily due to the amendment, remains substantial. Additionally, although Moody's anticipates relatively benign competitive environment in JEI's Colorado operation, its Louisiana truck stop's profitability will likely be under pressure in the next 12 months given the volatility in gasoline prices, weak local economy and potential new supply in the Louisiana market ( large casinos in Baton Rouge and Lake Charles). The affirmation of B3 CFR reflects JEI's high financial leverage as measured by debt/EBITDA of 5.8x at September 30, 2011. Despite JEI's recent relatively stable revenues and earnings in Black Hawk, Co and Louisiana truck stops, which combined generated approximately 86% of the company's property EBITDA, the possibility of significant deleveraging is limited in the near term considering the company's run-rate EBITDA and its acquisitive business strategy which could accelerate in the near future. Therefore, Moody's expects leverage to remain above 5.5x in the medium term. The ratings also consider JEI's small size and earnings concentration, as well as low overall operating margins compared to other gaming operators. JEI's ratings will likely be downgraded if liquidity deteriorates for any reason. Additionally, ratings could be lowered if the company does not appear to be making progresses on the refinancing of its debt obligations well in advance of their maturity. A downgrade could also materialize if total debt/EBITDA remains materially above 6.0x or EBIT/Interest falls below 1.0x. An upgrade is unlikely in the near term. Should the refinancing issue be addressed in a timely manner and on economical terms, the rating outlook could return to stable. Moody's has withdrawn the rating on the credit facilities for its own business reasons. The methodologies used in this rating were the Global Gaming Methodology published in December 2009, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Jacobs Entertainment Inc is the owner and operator of gaming facilities located in Colorado, Nevada, Louisiana and Virginia. Net revenues for the twelve-month period ended September 30, 2011 were approximately $351 million. JDA SOFTWARE: S&P Affirms 'BB-' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Scottsdale, Ariz.-based JDA Software Group Inc. to negative from stable. "We also affirmed our ratings on JDA, including our 'BB-' corporate credit rating and our 'BB-' senior unsecured rating. The '3' recovery rating on the senior unsecured debt remains unchanged," S&P said. "The outlook revision follows the company's filing of a form 12b- 25 'Notification of Late Filing' with the U.S. Securities and Exchange Commission (SEC) with regard to its annual report on form 10-K for year ended Dec. 31, 2011. The filing provides the company with an additional 15 calendar days to file its form 10-K. The company was unable to file its form 10-K as it is reviewing its revenue recognition policies for certain past years in connection with a previously disclosed inquiry from the SEC," S&P said. "If the company does not file the 10-K following the 15-day extension and an event of default occurs, it has 60 days (beginning March 30, 2012) to invoke a 365-day remedy on its $275 million senior notes by paying additional interest on the notes at an annual rate equal to 0.50% of the principal amount of the notes. Additionally, the company will seek waivers (by March 31, 2012--if required) from its bank group on its undrawn $100 million revolving credit facility," S&P said. "Even if the credit facility is withdrawn, we would still view JDA as possessing adequate liquidity," said Standard & Poor's credit analyst Philip Schrank, "with good free cash flow generation and unrestricted cash of $286 million as of Dec. 31, 2011." "The ratings on JDA reflect its second-tier presence in a highly competitive and consolidating industry and its niche product offerings. A solid base of recurring revenues and currently moderate leverage for the rating partially offset these fundamental business characteristics," S&P said. JDA is a provider of software applications offering a comprehensive suite of products, specializing in enterprise resource planning (ERP), supply-and-demand chain optimization, and analytics. "The acquisition of I2 Technologies Inc. expanded JDA's customer base and product capabilities into the discrete manufacturing market, provided additional scale, and should help JDA realize cost synergies through higher utilization and rationalization of the combined sales, product development, and service organizations. Revenues for 2011 were $672 million with more than one-third of that amount from recurring annual service and subscription fees," S&P said. "Since the rating incorporates our expectation for continued acquisitive growth," added Mr. Schrank, "the company's established track record of integrating operations helps temper acquisition- related risk concerns." "The outlook is negative. We will monitor developments regarding the delayed release of financial results, the SEC inquiry, and the company's negotiations with its lenders. We do not currently have visibility about the timing of JDA's filing of its financial statements, whether the scope of the SEC inquiry will be expanded, nor the potential impact a negative outcome could have on the company's financial results and assessment of its internal controls. However, even with an extended filing delay, we believe that JDA's liquidity should remain adequate over the next 12 months and that there is no outstanding debt that could be accelerated during this period. Conversely, we could revise the outlook to stable following the resolution of financial reporting issues that results in minimal impact to ongoing business and financial performance," S&P said. JEFFERSON COUNTY: Eligible to File Chapter 9 Bankruptcy ------------------------------------------------------- A Birmingham, Ala., judge ruled that Jefferson County can move forward with its Chapter 9 bankruptcy case, the largest municipal case in U.S. history. U.S. District Judge Thomas B. Bennett ruled that Jefferson County is eligible under state law to restructure more than $3 billion in debt from a failed sewer system project. Judge Bennett overruled objections to the Chapter 9 filing by Bank of New York Mellon Corp., the indenture trustee for county sewer warrants, and several other bank creditors. Holders of these defaulted sewer debt challenged the county's right to be in Chapter 9, interpreting Alabama state law as requiring a county to have outstanding bonds, which Jefferson County doesn't have. According to Bill Rochelle, the bankruptcy columnist for Bloomberg News, Judge Bennett concluded in his 28-page, single-spaced opinion that the ability file a municipal bankruptcy isn't limited to counties or municipalities with bonded debt. He said that to resort to bankruptcy court "is not constrained by the types of debts outstanding on the day a bankruptcy case is initiated." Mr. Rochelle notes that Judge Bennett differed from another bankruptcy judge who ruled in August that the city of Prichard, Alabama, wasn't entitled to be in bankruptcy because it didn't have outstanding bonds. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. A report by Bloomberg News in January said, citing Jefferson's attorney, that the default on sewer bonds has already cost Jefferson County $22 million in attorneys' fees. JETSTAR PARTNERS: Files for Chapter 11 in Dallas ------------------------------------------------ Jetstar Partners, Ltd., filed a bare-bones Chapter 11 petition (Bankr. N.D. Tex. Case NO. 12-31444) in its hometown in Dallas, Texas, on March 5, 2012. The partnership estimated assets of $10 million to $50 million and debts of up to $10 million. JOBSON MEDICAL: Wins Nod of Prepack in Less Than Five Weeks ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Jobson Healthcare Information LLC won the signature of the bankruptcy judge on a confirmation order March 5 approving the Chapter 11 plan. The Debtors filed their proposed Chapter 11 Plan, dated Jan. 10, 2012, together with their bankruptcy petition. The Debtors solicited votes on the Plan in January. Kurtzman Carson Consultants has certified that secured lenders and holders of the Class A equity have approved the Plan. The Plan gives the company three more years to pay off its loan and grants its secured lender equity in the new company. Under the Plan, maturity of first-lien debt will be extended by three years and the lenders owed $117.4 million will be given 20% of the equity. Unsecured creditors with claims totaling about $2 million will be paid in full. The Plan allows the Class A shareholders to retain 80% of the new stock. The existing Class B shareholders retain nothing. The Plan Support Agreement requires approval from the bankruptcy court through a confirmation order no later than March 23. The agreement also requires consummation of the Plan by March 26. About Jobson Medical Jobson Medical Information Holdings LLC, a health-care information and service provider, filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 12-bk-10434) on Feb. 2, 2012, along with 16 affiliates. JMIH estimated assets and debt of as much as $500 million each in its petition. Closely held Jobson, based in New York, works with pharmacies, clinics, government and employer groups as well as specialty medical groups to deliver medical information. Judge Sean H. Lane presides over the case. Lawyers at Lowenstein Sandler PC led by Sharon L. Levine, Esq., serve as the Debtors' counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent and as administrative agent. The petition was signed by Derek Winston, chief financial officer. General Electrical Capital Corporation, as administrative agent to the prepetition lenders (as successor to Toronto Dominion (Texas) LLC in such capacity), is represented by Michael C. Rupe, Esq., and Heath D. Rosenblat, Esq., at King & Spalding LLP. KEY ENERGY: Moody's Rates $200 Million Add-On Sr. Notes at 'B1' --------------------------------------------------------------- Moody's Investors Service rated Key Energy Services, Inc.'s $200 million of add-on senior notes B1, consistent with the rating for the notes that are currently outstanding. Proceeds from the offering will be used to reduce outstandings under the company's senior secured revolving credit facility. The outlook remains stable. Ratings Rationale "Key Energy's Ba3 Corporate Family Rating incorporates the company's position as one of the leading well service providers in North America," said Stuart Miller, Moody's Vice President -- Senior Analyst. "However, the company operates in the very volatile oilfield services industry. The issuance of longer term, fixed rate debt to replace bank borrowings provides a degree of protection from the variability of its cash flow." Key Energy is the largest onshore, rig-based well servicing contractor in North America. Using rigs and coiled tubing units, the company provides the equipment and services that are used to complete new wells, as well as to maintain, workover, and plug and abandon older wells. Moody's expects continuing improvement in the company's reported results in line with the agency's positive outlook for the oilfield services industry in general. Key Energy has been focusing its investment in equipment that can be used to complete horizontally drilled wells, a rapidly growing area in oilfield services. Increases in cash flow and EBITDA should outpace borrowings contributing to lower leverage levels at least for the next few quarters. At December 31, 2011, the ratio of debt to EBITDA, using Moody's standard adjustments, was 2.2x. A positive outlook or rating upgrade would be considered if Key Energy's maintains leverage below 2.0x while it continues to grow and expands its presence in less cyclical products and services. Conversely, if the company ramps up investment or completes a large, debt-funded acquisition that pushes leverage over 3.5x, a change to a negative outlook is likely and a downgrade is possible. Pro forma for the add on offering, Key Energy will have about $385 million available under its $550 million senior secured revolving credit facility. The credit facility has a maturity date of March 31, 2016. The credit facility has a number of financial maintenance tests, none of which Key Energy was in danger of breaching at December 31, 2011. The structurally superior position of the $550 million senior secured credit facility relative to the company's unsecured senior notes causes the notes to be rated one-notch below the Ba3 CFR. Moody's current ratings on Key Energy are: - Long Term Corporate Family Ratings (domestic currency) Rating of Ba3 - Probability of Default Rating of Ba3 - Senior Unsecured (domestic currency) Rating of B1 - Senior Unsecured Shelf (domestic currency) Rating of (P)B1 - Subordinate Shelf (domestic currency) Rating of (P)B2 - Preferred Shelf (domestic currency) Rating of (P)B3 - Speculative Grade Liquidity Rating of SGL-2 - LGD Senior Unsecured Ratings of LGD4 - 66% The principal methodology used in rating Key Energy Services was the Global Oilfield Services Rating 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. Key Energy Services is a Houston, Texas based oilfield service company with operations in most major operating basins in the continental US as well as in Mexico, South America, the Middle East, Russia, and Canada. LAKE TAHOE: Says Owens-Backed Chapter 11 Plan is Confirmable ------------------------------------------------------------ Lake Tahoe Development Co., LLC, asks the U.S. Bankruptcy Court for the Eastern District of California to confirm its Chapter 11 Plan and deny the motion to convert its case to one under Chapter 7 of the Bankruptcy Code. The Debtor explains that the case has undergone significant developments since City National Bank first filed its motion. Owens Mortgage Investment Fund, the Debtor's largest non-insider creditor, has agreed to pay the Debtor's property taxes in the event the Plan is confirmed, and to provide additional funds to unsecured creditors. The agreement renders the Plan confirmable and very attractive to real creditors of the estate. As reported in the Troubled Company Reporter on Jan. 30, 2012, CNB asserted that the Plan is not feasible and thus unconfirmable because (1) the Debtor is incapable of selling or developing the fragmented pieces of what remains of the Chateau Project; and (2) there is no evidence that after the payment to the Tax Collector due in January 2102, which will almost completely deplete the Debtor's remaining cash, the Debtor will have the ability to pay the installments in the future necessary to comply with the Tax Collector's "agreement" with respect to the unpaid real property taxes accrued (a) prior to the Oct. 4, 2011, filing of the Debtor's Chapter 11 petition; and (b) following the filing of the petition through the 2010/2011 tax year. Moreover, in April 2012, the Debtor will have to pay all of the 2011/2012 real property taxes, including the 10% penalty on account of the late payment of the first installment, past due as of Dec. 11, 2011. CNB says the Debtor lacks the funds to do so, and neither the Plan nor the disclosure statement even hint at the source of such payment. The Creditors also contended that the Debtor's failure to pay a "penny" of postpetition real property taxes violates obligations imposed by 28 U.S.C. Sections 959 and 960. A full-text copy of the Fifth Amended Plan of Reorganization dated Jan. 31, 2012, is available for free at http://bankrupt.com/misc/laketahoe.doc507.pdf About Lake Tahoe Development Based in Zepher Cove, Nevada, Lake Tahoe Development Co., LLC, is a real estate development company with substantial expertise in the real estate land entitlement and permitting areas in the unique geographic location of South Lake. Its principal, Randy Lane, who is the sole owner of Mountain Ventures, LLC, which is the managing member of the Debtor, has resided and developed real estate in South Lake Tahoe since 1976. The Company owns an interest in two separate real estate development projects. The first project owned exclusively by the Debtor is a large, mixed use, condominium, 19 hotel and retail space development comprised of 29 separate real estate parcels with multiple lien holders holding liens against various parcels located at the California/Nevada state line on Highway 50, South Lake Tahoe, California. The second is property owned by the Debtor located at 1259 Emerald Bay Road, South Lake Tahoe, CA (the "Gateway Project"), which is separate and apart from the Project, 24 and is being developed by Danny Freeman pursuant to a development agreement. The Company filed for Chapter 11 protection (Bankr. E.D. Calif. Case no. 09-41579) on Oct. 5, 2009. Daniel L. Egan, Esq., Megan A. Lewis, Esq., and Steven J. Williamson, Esq., at Wilke, Fleury, Hoffelt, Gould & Birney, LLP, in Sacramento, Calif., serve as counsel to the Debtor. The Debtor estimated assets at $100 million and $500 million, and debts at $50 million and $100 million in its Chapter 11 petition. LEHMAN BROTHERS: Plan Now Effective; Distributions Start April 17 ----------------------------------------------------------------- Lehman Brothers Holdings Inc. and its affiliates disclosed that the occurrence of the Effective Date of their plan and emergence from chapter 11. They will commence distributions to creditors on April 17, 2012. Distributions will be made to record holders of claims as of March 18, 2012. A new board of directors will guide Lehman Brothers Holdings Inc. and its affiliates as they move toward a complete liquidation of their assets, following a strategy to efficiently and expeditiously maximize results for creditors. John Suckow, a Managing Director with Alvarez & Marsal and Lehman's President and Chief Operating Officer, said: "We are proud to announce Lehman's exit from chapter 11 and entrance into the final stage of this process -- distributions to creditors. Our objective remains to provide the best results possible for creditors -- by continuing to strategically position assets to produce strong values, to pursue the resolution of disputed claims and other matters in litigation, and to manage expenses in line with the asset disposition process. We thank the hundreds of Lehman employees and outside professionals who have worked hard and diligently since September 2008 to achieve this monumental result." 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: SIPA Trustee, Lehman Settle Claims --------------------------------------------------- The trustee liquidating Lehman Brothers Holdings Inc.'s brokerage under the Securities Investor Protection Act said he reached an agreement in principle with the company and certain affiliates to resolve all claims among them, according to a February 28 report by Reuters. The agreement, about which no further details were provided, is subject to approval by the U.S. Bankruptcy Court in Manhattan. A spokesman for the trustee and a spokeswoman for Lehman declined to comment on the amount these claims might represent, the report said. As of the trustee's Oct. 21 interim operating report, 244 claims worth $7.9 billion remained in dispute out of the 630 claims worth $19.9 billion filed by Lehman and its subsidiaries against the brokerage. 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) LICHTIN/WADE LLC: Files List of 20 Unsecured Creditors ------------------------------------------------------ Amanda Jones Hoyle, staff writer at Triangle Business Journal, reports that Raleigh real estate developer Harold Lichtin has fulfilled his obligation to the U.S. Bankruptcy Court by supplying a list of the top 20 unsecured creditors owed money by one of his subsidiaries, Lichtin/Wade LLC According to the report, the list of creditors still owed money is the Wake County Revenue Department, which is owed $179,513 for unpaid 2011 property taxes, confirms Wake County Revenue Director Marcus Kinrade. The report says the county in late January had taken the unusual action of issuing a rent levy on the business tenants renting space in the Wade I and Wade II office buildings to cover the cost of the unpaid taxes. However, the garnishing of rent was halted by the bankruptcy court to protect the properties' secured creditors, including BB&T bank. Lichtin/Wade owns 20 acres, plus the Wade I and Wade II office buildings located at the intersection of Wade Avenue and Edwards Mill Road in west Raleigh. The report relates that Mr. Kinrade says the county was only able to collect about $17,000 from the rent levy before the bankruptcy petition was filed. The revenue department has also returned five payments totaling $95,506 that was received after the bankruptcy petition was filed. The report notes that the top creditors list also includes debt owed to several local and national real estate brokerage firms, several construction contractors and subcontractors and local law firms. About Lichtin/Wade Lichtin/Wade LLC filed for Chapter 11 bankruptcy (Bankr. E.D.N.C. Case No. 12-00845) on Feb. 2, 2012. Lichtin/Wade, based in Wake County, North Carolina, owns and operates an office park known as the Offices at Wade, comprised of two Class A office buildings and vacant land approved for additional office buildings. The buildings are known as Wade I and Wade. Each building is over 90% leased, with only three vacant spaces remaining between the two buildings. Judge Randy D. Doub presides over the case. Trawick H. Stubbs, Jr., Esq., and Laurie B. Biggs, Esq., at Stubbs & Perdue, P.A., serve as the Debtor's counsel. The Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Harold S. Lichtin, president of Lichtin Corporation, the Debtor's manager. LITTLE MOUNTAIN: Files for Chapter 11 in Salt Lake City ------------------------------------------------------- Little Mountain Rabbit Patch, LLC, filed a bare-bones Chapter 11 bankruptcy petition (Bankr. D. Utah Case No. 12-22554) in Salt Lake City on March 5. North Salt Lake-based Little Mountain estimated up to $50 million in assets and up to $10 million in liabilities. LIZ CLAIBORNE: S&P Upgrades Corporate Credit Rating to 'B' ---------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on New York City-based Liz Claiborne Inc. to 'B' from 'B-'. The outlook is stable. "We have removed the ratings from CreditWatch, where they had been placed with positive implications on Oct. 14, 2011, following the company's announcement that it had entered a definitive agreement to sell several brands and use proceeds to repay debt," S&P said. "At the same time, we raised the issue rating on the company's senior secured notes and unsecured notes to 'B' from 'B-' and to 'CCC+' from 'CCC'. We revised the recovery rating on the senior secured notes to '4', indicating our expectation for average (30%- 50%) recovery for lenders in the event of a payment default, from '3'. Our unsecured recovery rating remains unchanged at '6', indicating our expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default," S&P said. "The one-notch upgrade reflects our view that Liz Claiborne's credit measures have improved and operations have largely stabilized following the substantial sale of assets, including trademarks to its legacy Liz Claiborne brand and struggling Mexx brand, during the second half of 2011," said Standard & Poor's credit analyst Linda Phelps. "Thus far, the company has deployed a portion of the proceeds from the asset sales to reduce debt. We expect it to undertake further debt reductions with excess cash on balance sheet during the course of 2012. The lower recovery rating largely reflects the decline in the company's pro forma EBITDA following the asset sale transactions." "The ratings on Liz Claiborne reflects Standard & Poor's view that the company's financial risk profile has improved following the sale of assets resulting in lower debt levels, but remains 'highly leveraged'. In addition, we believe the company's business risk profile will continue to be 'weak' given its ongoing exposure to fashion risk within the highly competitive apparel industry and still-soft consumer discretionary spending," S&P said. "Our ratings outlook on Liz Claiborne is stable. We believe operating performance will be relatively stable going forward without the drag from the Mexx business. In addition, we believe the company's profitability will benefit from corporate overhead cost reduction initiatives. However, we could lower the rating if the total debt-to-EBITDA ratio does not decline below 6x by the end of fiscal 2012, possibly as a result of weaker operating performance, and the company does not continue to reduce debt balances," S&P said. "Though unlikely, we could raise the rating if we believe the company can sustain debt to EBITDA leverage below 4.5x and FFO to debt approaches 20%. EBITDA would have to increase about 35% from current levels for this to occur," S&P said. LOS ANGELES DODGERS: Beaten Fan Rebuffs Bankruptcy Compromise ------------------------------------------------------------- Amanda Bransford at Bankruptcy Law360 reports that the baseball fan severely beaten last year at a Los Angeles Dodgers game rejected a compromise Monday in which the team would support moving his negligence claims out of Delaware bankruptcy court if he agreed to pursue only the team's insurers. The bankrupt baseball team has offered to drop its objections to moving Bryan Stow's claims to California state court provided Stow supports the team's reorganization plan, agrees not to pursue his claims until after the plan's confirmation, and releases claims against nondebtor affiliates, according to Law360. 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. MA BB OWEN: Sale of All Assets to Castle Hill Approved ------------------------------------------------------ Judge Brenda Rhoades of the Eastern District of Texas, following a hearing on Feb. 14, authorized MA BB Owen LP and MA-BBO Five LP to sell substantially all of their assets to CH-B Trinity Falls, L.P. All objections to the sale motion were denied and overruled. At an auction held on Feb. 10, 2012 and adjourned and continued to Feb. 14, CH-B offered and the Debtors accepted, the highest and best qualified bid, which is a cash bid in the amount of (i) $17.6 million allocated to the property owned by MA BB Owen, LP and $8.75 million allocated to the property owned by MA BBO Five, LP, (ii) $330,000 to cure defaults under leases identified as "Desired 365 Contracts", (iii) $125,000 to be paid to the Debtors? estates for the benefit of creditors, and (iv) the payment of $22,400 of past due ad valorem taxes on the Properties. Castle Hill Partners, Inc.'s CH-B Trinity was the stalking horse bidder. For opening the auction, it is entitled to a break-up fee $704,323 if the Debtors sell the assets to another party on or before June 13, 2013, according to the court-approved bid procedures. Castle Hill's opening offer had allocated $15.5 million for the MA BB Owen property and $7.5 million for the MA- BBO Five property. Castle Hill and other parties, as well as secured creditor Hillcrest Bank, earlier filed objections, all in connection with the Debtors' failure to hold an auction on Feb. 10. The Debtors adjourned the auction on Feb. 10, without holding an open bidding process due to issues that arose between the purported qualified bidders. A court filings said that the Debtors received a bid from Klabzuba Realty, LLC, in addition to the bid received from their stalking horse purchaser, CH-B Trinity Falls. The Debtors selected Klabzuba as the "initial highest bid." The parties have disagreed on the ability of the Debtors to determine that subsequent bids that have different terms than the prior bids constitute qualified bids. CH-B Trinity Falls, L.P., is represented by: William L. Wallander, Esq. Bradley R. Foxman, Esq. VINSON & ELKINS LLP 2001 Ross Avenue, Suite 3700 Dallas, Texas 75201-2975 Tel: (214) 220-7700 Fax: (214) 220-7716 E-mail: bwallander@velaw.com bfoxman@velaw.com Hillcrest Bank is represented by: Brian C. Mitchell, Esq. BRACEWELL & GIULIANI LLP 1445 Ross Avenue Suite 3800 Dallas, Texas 75202-2711 Tel: (214) 468-3800 Fax: (214) 468-3888 About MA BB Owen MA BB Owen LP and MA-BBO Five LP are single-purpose entities created by Marlin Atlantis, a Dallas, Texas-based commercial real estate developer. MA BB Owen purchased 1,115 acres of land in the City of McKinney, Texas, using a $22.8 million loan from Hillcrest Bank. MA-BBO Five acquired 592 acres of land adjacent to the property utilizing a $11.07 million loan from Heritage bank. MA-BBO Five and MA BB Owen filed for Chapter 11 bankruptcy protection (Bankr. E.D. Tex. Case Nos. 11-40644 and 11-40645) on Feb. 28, 2011. Joyce W. Lindauer, Esq., serves as bankruptcy counsel. MA BB estimated its assets at $10 million to $50 million. MA-BBO Five estimated assets of up to $10 million and liabilities of $50 million to $100 million. MAGUIRE GROUP: Court Approves Payments of Critical Vendor Claims ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida authorized Maguire Group Holdings, Inc., et al., to pay in the ordinary course of their business, as and when due, the critical vendor claims. The Court also ordered that the critical vendors will continue to provide the Debtors with the same services, upon the same terms, as they provided prior to the Petition Date upon payment of the critical vendor claims. About Maguire Group Holdings Maguire Group Holdings, Inc., along with affiliates, sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 11-39347) on Oct. 24, 2011. Attorneys at Berger Singerman, P.A., serve as Kurtzman Carson Consultants LLC is the claims and notice agent. Berkowitz Dick Pollack & Brant serves as their financial advisors. Rasky Baerlein Strategic Communications, Inc., is the communications consultant. Maguire Group Inc. disclosed $6,526,196 in assets and $46,760,759 in liabilities. The United States Trustee said until further notice, it will not appoint an official committee under 11 U.S.C. Sec. 1102 in the bankruptcy case of Maguire Group Holdings, Inc., along with affiliates. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. MAGUIRE GROUP: Final Hearing on Cash Access Set for Today --------------------------------------------------------- The Hon. Robert A. Mark of the U.S. Bankruptcy Court for the Southern District of Florida has continued until March 7, 2012, at 2:00 p.m., the final hearing on Maguire Group Holdings, Inc., et al.'s request for continued access to cash collateral. On Feb. 14, creditors Metric Engineering, Inc., and Metric Engineering Group, Inc., asked the Court to reschedule the Feb. 16 hearing on the Debtor's use of the cash collateral. The creditors explained that there's an unavoidable conflict at 2:00 p.m. on Feb. 16. The creditors' counsel's daughter was inducted into the Junior National Honor Society at the same time on Feb. 16. As reported in the Troubled Company Reporter on Dec. 14, 2011, Regions Bank holds a security interest in the personal property of Debtor Maguire Corp., including cash collateral. The lender, as of the Petition Date, was owed the principal amount of $950,000; provided, however, that the representations are not binding on any other party in interest. As adequate protection for any diminution in value of the lenders' collateral, the Debtors will grant the lender a replacement lien on and in all property of the Debtors acquired or generated after the Petition Date, subject to carve out on certain fees. Metric Engineering is represented by: Diane Noller Wells, Esq. DEVINE GOODMAN RASCO & WELLS, P.A. 777 Brickell Avenue, Suite 850 Miami, FL 33131 Tel: (305) 374-8200 Direct: (305) 444-6695 Fax: (305) 374-8208 E-mail: dwells@devinegoodman.com About Maguire Group Holdings Maguire Group Holdings, Inc., along with affiliates, sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 11-39347) on Oct. 24, 2011. Attorneys at Berger Singerman, P.A. now known as Berger Singerman LLP, is bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. Berkowitz Dick Pollack & Brant serves as their financial advisors. Rasky Baerlein Strategic Communications, Inc., is the communications consultant. Maguire Group Inc. disclosed $6,526,196 in assets and $46,760,759 in liabilities. The United States Trustee said until further notice, it will not appoint an official committee under 11 U.S.C. Sec. 1102 in the bankruptcy case of Maguire Group. MAGUIRE GROUP: Hearing on Plan Outline Adequacy Set for Today ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida will convene a hearing today, March 7, 2012, at 2:00 p.m., to consider adequacy of the Disclosure Statement explaining Maguire Group Holdings, Inc., et al.'s proposed Plan of Reorganization dated Jan. 27, 2012. The Debtors will begin soliciting votes on the Plan following approval of the adequacy of the information in the Disclosure Statement. According to the Disclosure Statement, based on the Debtors' views as to the value of their estates and their projected cash flows, the Debtors concluded that they would be unable to pay the total of either of the known and potential litigation-related unsecured claims or unsecured claims arising from the 2009 Transaction and subsequent related transactions. On the other hand, given the fundamental importance of the sub-consultants in Class 4 of the Plan (General Unsecured Claims Necessary for the Continued Operation of the Reorganized Debtors) to the Debtors' future, the Debtors believe that it is absolutely necessary to pay the allowed claims of the Class 4 sub-consultants in full over a brief period of time. Accordingly, the Debtors' restructuring efforts focused on creating a stand-alone Chapter 11 plan that would provide (i) the sub-consultant appearing in Class 4 of the Plan a distribution totaling 100% of their allowed claims, to be paid over nine months from the Effective Date; and (ii) a distribution to the holders of allowed remaining unsecured claims not necessary for the Debtors' reorganization that have been placed in in Class 5 of the Plan, including the holders of known and potential litigation-related unsecured claims and other unsecured claims arising from the 2009 Transaction and subsequent related transactions, equal to a pro rata share of cash from a "pot plan" distribution. The Plan contemplates that the combination of a necessary and substantial contribution by Carlos Duart (in the amount of $350,000), along with the Debtors' cash on hand, together with the cash flow from the Debtors' future operations and a guaranty of payment to be provided by Carlos Duart with respect to the payment of all allowed claims under the Plan, will be sufficient and used to (i) pay all unclassified claims, including Allowed Administrative Expense Claims (including Professional Claims), Priority Tax Claims and Statutory Fees; (ii) fund the Disputed Claims Reserve; and (iii) make distributions to the holders of allowed claims in each of the classes that will (or could) receive distributions under the Plan, including Class 1, Class 3. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/MAGUIRE_GROUP_ds.pdf About Maguire Group Holdings Maguire Group Holdings, Inc., along with affiliates, sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 11-39347) on Oct. 24, 2011. Attorneys at Berger Singerman, P.A. now known as Berger Singerman LLP, is bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. Berkowitz Dick Pollack & Brant serves as their financial advisors. Rasky Baerlein Strategic Communications, Inc., is the communications consultant. Maguire Group Inc. disclosed $6,526,196 in assets and $46,760,759 in liabilities. The United States Trustee said until further notice, it will not appoint an official committee under 11 U.S.C. Sec. 1102 in the bankruptcy case of Maguire Group. MAGUIRE GROUP: Wants Plan Filing Exclusivity Until May 21 --------------------------------------------------------- Maguire Group Holdings, Inc., et al., ask the U.S. Bankruptcy Court Southern District of Florida to extend their exclusive periods to file and solicit acceptances for a proposed plan of reorganization until May 21, 2012, and July 20, respectively. The Debtor relate that termination of the exclusivity period and acceptance period could give rise to the threat of multiple plans and a contentious confirmation process, resulting in increased administrative expenses and consequently diminishing returns to the Debtors' creditors. The Debtors, on Jan. 27, 2012, filed a Plan Of Reorganization which contemplates that the combination of a necessary and substantial contribution by Carlos Duart (in the amount of $350,000), along with the Debtors' cash on hand, together with the cash flow from the Debtors' future operations and a guaranty of payment to be provided by Mr. Duart with respect to the payment of all allowed claims under the Plan, will be sufficient and used to (i) pay all unclassified claims; (ii) fund the Disputed Claims Reserve, and (iii) make distributions to the holders of allowed claims in each of the classes that will (or could) receive distributions under the Plan, including Class 1, Class 3, Class 4, and Class 5. About Maguire Group Holdings Maguire Group Holdings, Inc., along with affiliates, sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 11-39347) on Oct. 24, 2011. Attorneys at Berger Singerman, P.A. now known as Berger Singerman LLP, is bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. Berkowitz Dick Pollack & Brant serves as their financial advisors. Rasky Baerlein Strategic Communications, Inc., is the communications consultant. Maguire Group Inc. disclosed $6,526,196 in assets and $46,760,759 in liabilities. The United States Trustee said until further notice, it will not appoint an official committee under 11 U.S.C. Sec. 1102 in the bankruptcy case of Maguire Group. MAGUIRE GROUP: Wants Until May 21 to Decide on Unexpired Leases --------------------------------------------------------------- Maguire Group Holdings, Inc., et al., ask the U.S. Bankruptcy Court Southern District of Florida to extend until May 21, 2012, their time to assume or reject all of their unexpired leases of nonresidential real property. The Debtors relate that they had been unable to make reasoned decisions as to whether to assume or reject all the unexpired leases. About Maguire Group Holdings Maguire Group Holdings, Inc., along with affiliates, sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 11-39347) on Oct. 24, 2011. Attorneys at Berger Singerman, P.A. now known as Berger Singerman LLP, is bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims and notice agent. Berkowitz Dick Pollack & Brant serves as their financial advisors. Rasky Baerlein Strategic Communications, Inc., is the communications consultant. Maguire Group Inc. disclosed $6,526,196 in assets and $46,760,759 in liabilities. The United States Trustee said until further notice, it will not appoint an official committee under 11 U.S.C. Sec. 1102 in the bankruptcy case of Maguire Group. MALIBU ASSOCIATES: Court Approves Dismissal Motion -------------------------------------------------- The U.S. Bankruptcy Court has approved Malibu Associates, LLC's motion to dismiss its Chapter 11 case. As reported by the Troubled Company Reporter on Jan. 5, 2012, the Debtor said it has closed a Court-approved refinancing of its secured debt with U.S. Bank, National Association and negotiated a restructuring of its equity which, together, enable the Debtor to pay its creditors upon the approval of the motion and move forward with re-entitlement of the real property commonly known as Malibu Country Club, the Debtor's primary asset. The Debtor will pay all undisputed prepetition general unsecured creditors and administrative expense creditors in full without interest, or as otherwise agreed with individual creditors. According to the Debtor, it will (i) deposit $622,291 into the Kaye Scholer client trust account to pay unpaid agreed amount owed to the professionals; and (ii) have on deposit in its operating account available funds of at least $554,906 designated to satisfy the remaining payments owed to creditors. A full-text copy of the motion and the terms of the refinancing is available for free at: http://bankrupt.com/misc/MALIBUASSOCIATES_dismissalterms.pdf About Malibu Associates Malibu, California-based Malibu Associates, LLC, dba Malibu Country Club and Malibu Country Club filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. No. 09-24625) on Nov. 3, 2009. Ashleigh A. Danker, Esq., and Marc S. Cohen, Esq., at Kaye Scholer LLP, in Los Angeles, represent the Debtor in its restructuring effort. The Company disclosed assets of $42,853,592, and debts of $35,758,538 as of the Petition Date. MARKETING WORLDWIDE: Ronald Kletter Discloses 15.8% Equity Stake ---------------------------------------------------------------- In a Schedule 13G filed with the U.S. Securities and Exchange Commission, Ronald W. Kletter disclosed that, as of Feb. 20, 2012, he beneficially owns 31,280,911 shares of common stock of Marketing Worldwide Corporation representing 15.8% of the shares outstanding. The percentage is based on the number of shares of common stock of Marketing Worldwide outstanding at Feb. 15, 2012, as reported in the Company's Quarterly Report on Form 10-Q for the quarter ended Dec. 31, 2011, plus 25,000,000 shares issued to the Reporting Person as of Feb. 20, 2012. Ronald W. Kletter Family Dynasty Trust owns 27,340,633 shares of the Company's Common Stock. Mr. Kletter is the sole trustee of Ronald W. Kletter Family Dynasty Trust. A full-text copy of the filing is available for free at: http://is.gd/X9ynZQ 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. 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. 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. MASCO CORP: Moody's Assigns 'Ba2' to $400MM Sr. Unsec. Notes ------------------------------------------------------------ Moody's Investors Service assigned a Ba2 to Masco Corporation's proposed $400 million senior unsecured notes due 2022. Proceeds from the notes issuance and cash on hand will be used to fully redeem the company's $745.0 million (originally $850 million) notes due July 2012. Moody's also affirmed the Corporate Family Rating and Probability of Default Rating at Ba2 and other senior unsecured notes at Ba2. The company's speculative grade liquidity assessment remains SGL-1. The rating outlook remains negative. The following ratings/assessments were affected by this action: Corporate Family Rating affirmed at Ba2; Probability of Default Rating affirmed at Ba2; Senior unsecured notes ratings affirmed at Ba2 (LGD4, 52%); $400 million senior unsecured notes due 2022 assigned Ba2 (LGD4, 52%); and, Various shelf securities affirmed at (P)Ba2/(P)B1. The company's speculative grade liquidity assessment remains SGL-1. Ratings Rationale The Ba2 rating assigned to the proposed $400 million senior unsecured notes due 2022, the same rating as the corporate family rating, are pari passu to Masco's other senior unsecured debt. Proceeds from the Notes and cash on hand will be used to redeem all of the company's existing $745.0 million (originally $850 million) 5.875% senior unsecured notes due July 2012 -- at which time the ratings will be withdrawn -- and to pay other related fees and expenses. The proposed note issuance will improve Masco's debt leverage and interest coverage ratios slightly due to the lower amount of balance sheet debt. On a pro forma basis through December 31, 2011, debt leverage improves to about 6.0 times from 6.5 times, and EBITA-to-interest expense improves slightly to about 1.6 times from 1.5 times (all ratios adjusted per Moody's standard adjustments). Also, reduced interest costs of about $21 million annually should improve free cash flow. The transaction also extends Masco's debt maturity profile. The next maturity is its $200 million 7.125% senior unsecured notes due August 2013, which Masco has more than sufficient cash to fully redeem, followed by its revolving credit facility maturing January 2014. The negative rating outlook continues to reflect Moody's view that Masco's financial performance will be hindered by anemic growth prospects for major remodeling projects and weak forecasts for new housing construction. Despite the modest improvement in credit metrics on a pro forma basis, high levels of debt and ongoing weakness in the home construction and remodeling markets may make it difficult for Masco to bring credit metrics in-line with levels that support the current rating. Additionally, Masco will likely face higher raw material costs on a year-over-year basis for such commodities as lumber, resin and titanium dioxide for paints. The Cabinet and Installation businesses will continue to be a drag on earnings. The upcoming summer and early fall months, peak repair/remodeling season, will be telling as to Masco's longer- term operating performance and resulting credit metrics. Masco's Ba2 Corporate Family Rating reflects its robust liquidity profile and broad product offerings, mitigating the adverse impact of weakness in any single line of business. The Decorative Architectural Products and the Plumbing Products segments continue to perform well, partially offsetting the lackluster performance in the company's Cabinets and Related Products and Installation and Other Services businesses. Masco's SGL-1 speculative grade liquidity assessment reflects Moody's view that it will maintain a very good liquidity profile over the next twelve months. Operating cash flow should be sufficient to fund its normal operating requirements and capital expenditures. Combined cash on hand of $1.3 billion, net the usage of cash to partially-redeem its Notes due July 2012, at the end of 2011 and about $630 million of borrowing availability under its recently amended revolving credit facility is more than ample to meet potential operating cash shortfalls, growth capital expenditures and its maturing debt in August 2013. The company's assets are unencumbered, providing an alternate source of liquidity. A downgrade could occur if the company's restructuring initiatives and continued recovery in the remodeling and housing construction markets do not support continued improvement in operating performance. Debt-to-EBITDA remaining above 5.0 times or EBITA-to- interest expense staying below 3.0 times (all ratios incorporate Moody's standard adjustments), or deterioration in the company's liquidity profile without offsetting debt reductions could pressure the ratings. Stabilization of the ratings is unlikely until Masco is able to generate significant earnings that result in debt-to-EBITDA approximating 4.5 times and EBITA-to-interest expense approaching 3.5 times (all ratios incorporate Moody's standard adjustments). The principal methodology used in rating Masco was the Global Manufacturing Industry Methodology, published December 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Masco Corporation, headquartered in Taylor, MI, is one of the largest manufacturers in North America of a number of home improvement and building products, including faucets, cabinets, architectural coatings and windows. It is also one of the largest installers of insulation and other products for the new home construction market. The Company generally distributes products through multiple channels including home builders and wholesale and retail channels. North American operations generated approximately 75% of its sales. Revenues for 2011 totaled about $7.5 billion. MASCO CORP: Fitch Rates Proposed $400MM Sr. Notes Offering at 'BB' ------------------------------------------------------------------ Fitch Ratings has assigned a 'BB' rating to Masco Corporation's (NYSE: MAS) proposed offering of $400 million senior notes due 2022. The new issue will be ranked on a pari passu basis with all other senior unsecured debt. Proceeds from the notes offering will be used for general corporate purposes, including the repayment of a portion of the company's $791 million senior notes due on July 15, 2012. On March 1, 2012, Fitch downgraded the company's ratings to 'BB' from 'BB+'. The Rating Outlook is Stable. Fitch currently rates Masco as follows. -- Long-term Issuer Default Rating (IDR) at 'BB'; -- Senior unsecured notes at 'BB'; -- Unsecured bank credit facility at 'BB'. The ratings reflect Masco's leading market position with strong brand recognition in its various business segments, the breadth of its product offerings, and solid liquidity position. Risk factors include weak operating margins and credit metrics, sensitivity to general economic trends, as well as the cyclicality of the residential construction market. The Stable Outlook reflects Fitch's view of moderately improving housing and home improvement markets in 2012 compared with 2011. Masco's margins and credit metrics have deteriorated over the past year. Masco ended fiscal 2011 with debt to EBITDA (as calculated by Fitch) of 6.2 times (x) compared with 5.3x at year-end 2010. EBITDA to interest coverage declined from 3.1x in 2010 to 2.5x in 2011 while funds from operations (FFO) interest coverage fell from 2.4x in 2010 to 1.7x in 2011. Fitch does not expect a meaningful improvement in Masco's financial performance this year as housing, although expected to grow modestly, remains very weak in absolute terms and spending for big ticket renovation continues to be constrained. Additionally, raw material costs are expected to remain elevated for Masco's paint products during 2012. Although the company is expected to reduce debt by roughly $400 million this year, Fitch projects Masco's leverage will remain elevated in the intermediate term and is expected to continue to be above 5x in 2012. Fitch also projects interest coverage ratios to improve only marginally this year compared with 2011. Masco's historically strong free cash flow (FCF; cash flow from operations less capital expenditures and dividends) generation diminished in 2011. During the past decade, the company generated significant FCF, even during periods when revenues and profitability declined. During the 2000 - 2010 periods, Masco generated FCF in excess of $5.7 billion. (Masco generated FCF of $220 million in 2010 and $414 million in 2009). In 2011, the company was slightly FCF negative. Fitch currently expects Masco to generate minimal FCF in 2012. The Stable Outlook also reflects the company's solid liquidity position, although this is expected to decline moderately this year due to an upcoming debt maturity. Masco ended the year with $1.66 billion of cash on the balance sheet and $630 million of availability under its $1.25 billion unsecured revolving credit facility that matures in January 2014. The company has $791 million of notes coming due in July 2012, which it intends to repay with the proposed notes issuance and cash on hand. Fitch expects Masco to continue to have cash in excess of $1 billion by year-end 2012. In February 2012, the company amended its revolving credit facility, which provided for certain add-backs to shareholder's equity in its covenant calculation for certain non-cash charges taken in 2010 and 2011. This amendment increased the company's borrowing availability under the revolver from $178 million to $630 million. The company indicated that as of Dec. 31, 2011, the company can absorb a reduction in shareholder's equity of $340 million and remain in compliance with its leverage covenant. Fitch expects Masco to continue to have access to its revolving credit facility, although the amount available will likely continue to be lower than the total facility amount due to covenant constraints. Fitch is encouraged that management has taken steps to preserve its liquidity during these still uncertain times. Masco had been an aggressive purchaser of its stock starting in 2003, spending about $1.2 billion annually, on average, in share repurchases and dividends during the 2003-2007 periods. The company has not repurchased stock since July 2008 and has put its share repurchase program on hold, except for stock buybacks to offset the dilutive effect of stock grants. In March 2009, Masco also reduced its quarterly dividend from $.235 per common share ($.94 annually) to $0.075 per share ($.30 annually), saving approximately $225 million per year. Fitch expects the company will preserve its strong liquidity position and refrain from meaningful share repurchases through at least this year. Fitch's rating also takes into account the cyclicality of Masco's end markets. Fitch's housing forecasts for 2012 assume a modest rise off a very low bottom. New home inventories are at historically low levels and affordability is at near record highs. In a slowly growing economy with distressed home sales competition similar to 2011, less competitive rental cost alternatives, and, probably, even lower mortgage rates, total housing starts should improve almost 7% to 650,000 homes, while new home sales increase approximately 5.6% to 319,000 and existing home sales grow 3% to 4.388 million. The home improvement industry has shown moderate recovery during the past two years. Fitch currently projects home improvement spending will grow 4% in 2012. Remodeling expenditures are likely to continue to pick up this year as homeowners who deferred maintenance and/or improvements during the recent recession start revisiting these projects. The gradual improvement in the economy and moderately better housing market conditions could provide the catalyst for a slightly more robust increase in spending for home remodeling projects this year as compared to the estimated 3% growth in 2011. However, Fitch expects spending on big ticket renovations will remain constrained as credit availability remains tight and returns on home improvement projects continue to fall. Future ratings and outlooks will be influenced by broad housing and home improvement market trends, as well as company specific activity, particularly FCF trends and uses. Masco's rating is constrained in the intermediate term due to weak credit metrics, but a Positive Rating Outlook may be considered if the recovery in housing metrics and home improvement spending is significantly better than Fitch's outlook and the company significantly improves its credit metrics above Fitch's current expectations. Negative rating actions could occur if the anticipated recoveries in Masco's end-markets do not materialize and if management resumes a meaningful share repurchase program before a clearly established recovery has began in the housing and home improvement markets. METALDYNE CORP: New York Judge Refuses to Seal Settlement --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Martin Glenn in New York refused to seal a settlement agreement in the Chapter 11 case of Metaldyne Corp. The trustee for the liquidating trust established under the confirmed plan hashed out a settlement of claims against a Russian automaker named GAZ. The settlement agreement required filing in bankruptcy court under seal so the terms wouldn't be known publicly. According to the report, Judge Glenn refused to allow the settlement agreement to be filed under seal. For the court to approve the settlement, Judge Glenn is requiring public disclosure of the terms. Judge Glenn cited the familiar principle that there is a "strong presumption and public policy in favor of public access to court records." He said there must be "compelling or extraordinary circumstances" before court filings are sealed. Judge Glenn did say it will be acceptable to delete bank account or routing numbers from the publicly filed documents. About Metaldyne Corp. Metaldyne Corp. was a global designer and supplier of metal based components, assemblies and modules for transportation related powertrain applications including engine, transmission/transfer case, driveline, and noise and vibration control products to the motor vehicle industry. Metaldyne and its affiliates filed for Chapter 11 protection on May 27, 2009 (Bankr. S.D.N.Y. Case No. 09-13412). The filing did not include the company's non-U.S. entities or operations. Richard H. Engman, Esq., at Jones Day represented the Debtors in their restructuring. Judy A. O'Neill, Esq., at Foley & Lardner LLP served as conflicts counsel; Lazard Freres & Co. LLC and AlixPartners LLP as financial advisors; and BMC Group Inc. as claims agent. A committee of Metaldyne creditors was represented by Mark D. Silverschotz, Esq., and Kurt F. Gwynne, Esq., at Reed Smith LLP, and the committee tapped Huron Consulting Services, LLC, as its financial advisor. For the fiscal year ended March 29, 2009, the company recorded annual revenues of approximately US$1.32 billion. As of March 29, 2009, utilizing book values, the Company had assets of US$977 million and liabilities of $927 million. Judge Glenn approved the sale of substantially all assets to Carlyle Group in November 2009 for roughly $496.5 million, and confirmed the Debtors' liquidating chapter 11 plan on Feb. 23, 2010. Under the terms of the confirmed liquidation plan, Oldco M Distribution Trust is the post-confirmation entity charged with prosecuting all claim objections and distributing all plan assets pursuant to the terms of the plan. The Trust is represented by Kimberly E.C. Lawson, Esq., at Reed Smith LLP, in Wilmington, Del. MILACRON HOLDINGS: Moody's 'B2' CFR/PDR for Possible Upgrade ------------------------------------------------------------ Moody's Investors Service placed the B2 Corporate Family Rating and B2 Probability of Default Rating of Milacron Holdings, Inc. and the B1 Senior Secured Term loan rating of Milacron LLC under review for possible upgrade. Ratings placed under review for possible upgrade: Corporate Family Rating, B2 Probability of Default, B2 First Lien bank term loan, B1 (LGD-3, 44%) The last rating action was on April 11, 2011 at which time a CFR/PDR of B2 was assigned. Ratings Rationale In February, Milacron increased the size of its first-lien term loan by $60 million to take the total to $196.5 million. Proceeds from the loan along with cash on hand and a minor drawing under the company's asset backed revolving credit facility (unrated) were used to repurchase shares held by its private equity owner, Avenue Capital. While the transaction adds to the company's debt burden, its debt/EBITDA measure is relatively unchanged from levels in May 2011 when the company was recapitalized. At that time, Moody's assigned a B2 CFR /PDR and a B1 rating to a $140 million term loan. The one-notch rating differential of the term loan above the underlying CFR reflected expectations that amounts outstanding under the term loan would decline at a certain pace over the rating horizon, and, as a result, lift its recovery rate in downside scenarios. In the intervening period, Milacron's revenues and earnings have exceeded expectations and may continue to do so over the rating horizon. Importantly, higher volumes have contributed to an increase in its margins. Potentially offsetting these improving fundamentals is a perceived shift toward a more aggressive financial policy in which returns to shareholders have been funded with incremental debt. De-leveraging may occur over a longer-time frame. Similarly, the capital goods sector remains cyclical and resin costs for many of the company's molding equipment customers have risen in step with higher oil prices. Weaker customer cash flows historically have been a factor affecting orders for Milacron's equipment. The review will focus on the prospects for improving operating fundamentals and the extent to which they are offset by higher debt levels and financial strategies that may keep financial leverage at elevated levels. In addition, the review will assess changes in the expected recovery rate of the term loan. That recovery rate will have been diluted by the higher proportion which the term loan represents in the company's capital structure, possibly pulling the term loan rating to a level matching that of the underlying CFR. The principal methodology used in rating Milacron was the Global Heavy Manufacturing Rating Methodology published in November 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Milacron Holdings, Inc., based in Cincinnati, OH, produces equipment used in plastics-processing industries as well as fluids used in metalworking industries. Milacron LLC, a wholly-owned subsidiary of Milacron Holdings, Inc., remains the borrowing entity with both a down-streamed parent guarantee and up-streamed guarantees from significant domestic subsidiaries. Revenues in 2011 exceeded $780 million. MUNICIPAL CORRECTIONS: Faces Involuntary Chapter 11 Bankruptcy -------------------------------------------------------------- Bondholders have filed an involuntary Chapter 11 petition (Bankr. D. Nev. Case No. 12-12253) on Feb. 29, 2012, against Municipal Corrections LLC, which operates a private prison facility, alleging that the Municipal Corrections "is generally not paying debts as they become due." The bondholders said they are owed $54.195 million. Alex Ferreras at LoanSafe.org reports that there has been a default in payment obligations for the municipal bonds -- officially called Irwin County, Ga., Participation Certificates -- backed by the prison and the revenue it generates. The report says the petitioning creditors include Hamlin Capital Management, LLC of New York; Oppenheimer Rochester National Municipals of Rochester, N.Y.; and UMB N.A. of Minneapolis and Kansas City. UMB is the bond trustee charged with representing the interests of bondholders, and its claim was made in bankruptcy court on behalf of all bondholders. The report says Ballard Spahr LLP and Dorsey and Whitney LLP represent the bondholders. Municipal Corrections LLC has offices in Stratham, N.H., and Atlanta, Ga. NBOR CORP: Court Dismisses Involuntary Chapter 11 Case ------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of California has approved NBOR Corporation's motion to dismiss the involuntary Chapter 11 bankruptcy case filed against it. The Debtor explains that: -- the interests of creditors and the debtor would be better served by dismissal of the case; -- the petitioning creditor fails to meet the requirements of Bankruptcy Code Section 303(b); -- the petitioning creditor did not file the petition in good faith; and -- the petitioning creditor's claim is contingent, subject to bona fide dispute as to amount, and less than the statutory minimum. Mako Strategies Inc. filed an involuntary chapter 11 petition (Bankr. N.D. Calif. Case No. 11-72855) against Oakland, California-based NBOR Corporation on Dec. 9, 2011. Bankruptcy Judge William J. Lafferty presides over the case. The petitioner is represented by Randy Michelson, Esq., at Michelson Law Group. The Law Offices of Stephen D. Finestone serve as counsel to NBOR. NEBRASKA BOOK: Deloitte Tax Approved as Income Tax Advisors ----------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware authorized Nebraska Book Company, Inc., to employ Deloitte Tax as income tax advisors nunc pro tunc Jan. 9, 2012. Deloitte Tax is expected to perform tax advisory services related to debt discharge and other tax issues arising in connection with the Debtor's Chapter 11 filing. The hourly rates of Deloitte Tax's personnel are: National partner/Principal/Director $740 Partner/Principal/Director $630 Senior Manager $550 Manager $470 Senior $380 Staff $290 Deloitte Tax will file interim and final fee applications for the allowance of compensation for services rendered and reimbursement of expenses. 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. NEBRASKA BOOK: Devises Severance Bonuses for Workers ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Nebraska Book Co. said the bankruptcy case has lasted "much longer" than originally anticipated. To "allay fears," the company is proposing adoption of a severance bonus program under which non-executive workers would have a minimum of two week's pay. The bonus would grow to three months pay for workers with the longest tenure. 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. NEIMAN MARCUS: Fitch Affirms Issuer Default Rating at 'B' --------------------------------------------------------- Fitch Ratings has affirmed its ratings on Neiman Marcus, including the Issuer Default Rating (IDR) on Neiman Marcus, Inc. and its subsidiary, The Neiman Marcus Group, Inc. (NMG), at 'B'. The Rating Outlook has been revised to Stable from Positive, as the company is contemplating an extraordinary dividend of up to $500 million to its sponsors, which is likely to remove the potential for improving credit metrics in spite of improving fundamentals. The Positive Outlook had reflected the potential for leverage to move to the low 5.0 times (x) range in fiscal 2012 on continued improvement in EBITDA on strong mid-to-high single-digit top-line growth. Neiman ended its fiscal second quarter (ending January 2012) with leverage at 5.2x (adjusted debt/EBITDAR) on comparable store sales (comps) growth of 9.4% and a latest 12-month (LTM) EBITDA of $558 million (+15% year over year) and the company is expected to continue to show improvement in EBITDA to potentially the $600 million range in fiscal 2013, which would have taken leverage to the 5.0x range. However, should NMG complete up to a $500 million dividend which would require borrowings on its revolver, leverage could creep up to 5.8x-6.0x. Improved Sales and EBITDA: Neiman Marcus, Inc.'s (NMG) operating results have recovered strongly from the 2008-2009 recession with mid-to-high single-digit comps growth over the past eight quarters, given the overall recovery in luxury spending. LTM EBITDA increased to $558 million from a low of $274 million in 2009 on low double-digit margins. EBITDA is still below the peak level of $700 million attained in calendar 2007, with overall sales still 10% lower than the pre-recession run rate. Luxury Should Continue to Outperform: Fitch expects the luxury department stores to post comps growth of 3%-5% on average in 2012-2013, on top of a sales-weighted average of 8.1% in 2011. Assuming comps in the mid-single-digit range, NMG's EBITDA could be at or slightly above $600 million in 2013. Liquidity and Refinancing Risk: As of Jan. 28, 2012, the company had approximately $430 million in cash on hand and $628 million of availability under its $700 million asset-based revolving credit facility. Fitch expects NMG to generate annual free cash flow (FCF) in the $75 million-$100 million range over the next couple of years, even as the company ramps up capital expenditures to $170 million-$180 million from $94 million in fiscal 2011. Should NMG declare an extraordinary dividend of $500 million and assuming the company needs to maintain cash balances in the range of $200 million-$250 million (at January end to fund peak seasonal working capital needs in the fall), Fitch projects it would need incremental debt financing of approximately $300 million-$400 million. Following its major refinancing activity in April 2011, the next sizable maturity is the $500 million subordinated notes due in October 2015. Given NMG's strong liquidity and FCF profile, Fitch expects the company will be able to refinance this maturity. The ratings of the various classes of debt listed below reflect their respective recovery prospects. Fitch's recovery analysis assumes an enterprise value (EV) of $1.8 billion in a distressed scenario. This is based on a distressed EBITDA of $300 million and market valuation of 6.0x EV/EBITDA. Applying this value across the capital structure results in outstanding recovery prospects (91%-100%) for the revolving credit facility, which is rated three notches above the IDR at 'BB/RR1'. The $700 million credit facility maturing in May 2016 is secured by a first lien on inventory and cash of NMG and the subsidiary guarantors and a second lien on real estate, capital stock and all other tangible and intangible assets, including a significant portion of NMG's owned and leased real property (which currently consists of approximately half of NMG's full-line retail stores) and equipment. The $2.06 billion term loan and the $121 million of secured debentures are secured by a first lien on the company's fixed and intangible assets and a second lien on inventory and cash. They are expected to have good recovery prospects (51%-70%) and are rated one notch above the IDR at 'B+/RR3'. The senior subordinated notes have poor recovery prospects (less than 10%) and are rated three notches below the IDR at 'CC/RR6'. Fitch has affirmed Neiman Marcus's ratings: --Long-Term IDR at 'B'; --Secured revolving credit facility at 'BB/RR1'; --Secured term loan facility at 'B+/RR3'; --Secured debentures at 'B+/RR3'; --Senior subordinated notes at 'CC/RR6'. The Rating Outlook is Stable. NET ELEMENT: Enters Into $2-Mil. Subscription Pact with Rakishev ---------------------------------------------------------------- Net Element, Inc., on Feb. 23, 2012, entered into a Subscription Agreement pursuant to which it agreed to sell, subject to the satisfaction of customary closing conditions, 13,333,334 newly issued shares of common stock of the Company to Kenges Rakishev for an aggregate purchase price of $2,000,000, or $0.15 per share. Pursuant to the Subscription Agreement, the Company granted Mr. Rakishev the right to participate in any equity-based financing of the Company so long as Mr. Rakishev and his affiliates beneficially own greater than 5% of the Company's common stock, as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder. In connection with that participation right, Mr. Rakishev may elect to purchase all or any part of any equity or equity-based securities proposed to be issued by the Company in any financing transaction. On Feb. 24, 2012, the Company entered into a Shareholder Rights Agreement with Mark Global Corporation, Kenges Rakishev, Mike Zoi, TGR Capital, LLC, MZ Capital, LLC (Delaware), MZ Capital, LLC (Florida) and Enerfund, LLC. The companies TGR Capital, LLC, MZ Capital, LLC (Delaware), MZ Capital, LLC (Florida) and Enerfund, LLC are directly or indirectly owned and controlled by Mike Zoi. Pursuant to the Shareholder Rights Agreement, the Shareholders agreed to certain corporate governance matters pertaining to the Company and the Company granted registration rights to each of Mark Global Corporation, Kenges Rakishev, TGR Capital, LLC, Mike Zoi and certain of their assignees. The Shareholders agreed to cause the Board of Directors of the Company to be comprised of not less than four and not more than eight directors. For so long as TGR Capital, LLC, together with its affiliates, has beneficial ownership of greater than 5% of the Company's common stock, TGR Capital, LLC, is entitled to nominate one director. For so long as Mark Global Corporation, together with its affiliates, has beneficial ownership of greater than 5% of the Company's common stock, Mark Global Corporation is entitled to nominate one director. For so long as the Shareholder Rights Agreement remains in effect, TGR Capital, LLC, and Mark Global Corporation are entitled to nominate two independent directors mutually acceptable to TGR Capital, LLC, and Mark Global Corporation. In the event that Mark Global Corporation's director nominee is unable to attend any meeting of the Board of Directors, Mark Global Corporation is entitled to have another representative attend such meeting in a non-voting observer capacity. In addition, so long as Mark Global Corporation, together with its affiliates, has beneficial ownership of greater than 10% of the Company's common stock, the Shareholders agreed to cause Mark Global Corporation's director nominee to be a member of any compensation committee, nominating committee and audit committee that the Board of Directors may establish, in each case to the extent those directors are permitted to serve on such committees under applicable Securities and Exchange Commission rules. Additionally, the Company agreed to obtain customary director and officer indemnity insurance and the Shareholders agreed to cause the Company's bylaws to be amended, in a manner acceptable to Mark Global Corporation, to provide mandatory indemnification and advancement of expenses for directors of the Company. Upon demand by any of the Holders, the Company agreed to register from time to time with the Securities and Exchange Commission for resale (i) all shares of common stock of the Company from time to time owned by Mark Global Corporation, Kenges Rakishev or any other person or entity controlled by Kenges Rakishev, and (ii) all shares of common stock of the Company from time to time owned by TGR Capital, LLC, Mike Zoi or any other person or entity controlled by Mike Zoi. The Company also granted the Holders piggyback registration rights with respect to all of those shares. The Company agreed to bear substantially all expenses incidental to the registration rights granted pursuant to the Shareholder Rights Agreement. The Shareholder Rights Agreement is not effective until 12:01 a.m. (New York time) on the first business day immediately following the date on which Mark Global Corporation, together with its affiliates, has beneficial ownership of greater than 10% of the Company's common stock. A full-text copy of the Shareholder Rights Agreement is available for free at http://is.gd/bgrTMe A full-text copy of the Subscription Agreement is available for free at http://is.gd/X68LzC About Net Element Miami, Fla.-based Net Element, Inc. (formerly TOT Energy, Inc.) currently operates several online media websites in the film, auto racing and emerging music talent markets. The Company reported a net loss of $3.1 million for the nine-month period ended Dec. 31, 2010. The Company had a net loss of $6.6 million for the twelve months ended March 31, 2010. The Company also reported a net loss of $23.53 million on $143,988 of net revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $2.62 million on $0 of net revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.95 million in total assets, $5.69 million in total liabilities, and a $3.73 million total stockholders' deficit. Daszkal Bolton LLP, in Fort Lauderdale, Fla., expressed substantial doubt about Net Element's ability to continue as a going concern. The independent auditors noted that the Company has experienced recurring losses and has an accumulated deficit and stockholders' deficiency at Dec. 31, 2010. NISOURCE INC: Moody's Assigns '(P)Ba2' Domestic Currency Rating --------------------------------------------------------------- Moody's Investors Service's current ratings on NiSource Inc. and its affiliates are: Pref. Shelf domestic currency rating of (P)Ba2 Preferred shelf -- PS2 domestic currency rating of (P)Ba2 Bay State Gas Company Senior Unsecured domestic currency rating of Baa2 Senior Unsecured MTN domestic currency rating of (P)Baa2 NiSource Capital Markets, Inc. BACKED Senior Unsecured domestic currency rating of Baa3 BACKED Senior Unsecured MTN domestic currency rating of (P)Baa3 BACKED Senior Unsec. Shelf domestic currency rating of (P)Baa3 Northern Indiana Public Service Company Senior Unsecured domestic currency rating of Baa2 Senior Unsecured MTN domestic currency rating of (P)Baa2 LT Issuer Rating rating of Baa2 BACKED Senior Secured domestic currency rating of Baa2 BACKED Senior Unsecured domestic currency rating of Baa2 BACKED LT IRB/PC domestic currency rating of Baa2 BACKED Other Short Term domestic currency rating of VMIG 2 Underlying Senior Unsecured domestic currency rating of Baa2 NiSource Finance Corporation Senior Unsecured domestic currency rating of Baa3 LT Issuer Rating rating of Baa3 Commercial Paper domestic currency rating of P-3 BACKED Senior Unsecured domestic currency rating of Baa3 BACKED Senior Unsec. Shelf domestic currency rating of (P)Baa3 Ratings Ratioanle NiSource's Baa3 ratings reflect modest but repeatable credit metrics which derive from its diverse portfolio of regulated subsidiaries. Being virtually all regulated, the company can support more leverage than similarly rated diversified utilities that are exposed to riskier commodity-price and market-sensitive businesses. Nevertheless, the company is regaining its financial health after spending much of the last decade in maintenance mode due to balance sheet constraints and operational issues. After a round of rate cases in all its jurisdictions and addressing a number of its legacy items, NiSource's financial position has stabilized, and the company is gradually putting more of its capital in growth investments. The rating takes into consideration the management's stated commitment to its current investment-grade rating. Rating Outlook NiSource's stable outlook is based on its current financial plan, which should sustain modest but stable metrics, including Moody's adjusted cash flow pre-working capital-to-debt in the low to mid teens. What Could Change the Rating - Up If NiSource reduces debt and sustains stronger metrics, including cash flow pre-working capital-to-debt in the mid to upper teens. What Could Change the Rating - Down If NiSource fails to achieve top-line revenue growth it expects from its regulatory initiatives and investments or adopts a more aggressive corporate finance model, causing a sustained decline in its credit metrics, such as cash flow pre-working capital-to-debt around 10%. The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology. NORTEL NETWORKS: Files Schedules of Assets and Liabilities ---------------------------------------------------------- Nortel Networks filed with the U.S. Bankruptcy Court for the District of Delaware its sixth amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $84,911,532 B. Personal Property $5,700,072,932 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims $18,589,796 F. Creditors Holding Unsecured Non-priority Claims $5,025,334,776 ----------- ----------- TOTAL $5,784,984,464 $5,043,924,572 A full-text copy of the Amended Schedules is available for free at http://bankrupt.com/misc/NORTEL_NETWORKS_amendedsal.pdf About Nortel Networks Nortel Networks (OTC BB: NRTLQ) -- http://www.nortel.com/-- was once North America's largest communications equipment provider. It has sold most of the businesses while in bankruptcy. Nortel Networks Corp., Nortel Networks Inc., and other affiliated corporations in Canada sought insolvency protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. The Monitor sought recognition of the CCAA Proceedings in the U.S. by filing a bankruptcy petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10164). Mary Caloway,Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as the Chapter 15 petitioner's counsel. Nortel Networks Inc. and 14 affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case No. 09-10138) on Jan. 14, 2009. Judge Kevin Gross presides over the case. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. Certain of Nortel's European subsidiaries also made consequential filings for creditor protection. On May 28, 2009, at the request of the Administrators, the Commercial Court of Versailles, France ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in this Court for recognition of the English Proceedings as foreign main proceedings under chapter 15 of the Bankruptcy Code. Nortel Networks divested off key assets while in Chapter 11. Nortel has raised $3.2 billion by selling its operations as it prepares to wind up a two-year liquidation due to insolvency. In June 2011, Nortel added US$4.5 billion to its cash pile after agreeing to sell its remaining patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a $900 million stalking horse bid by Google Inc. at an auction. The deal closed in July 2011. Nortel Networks has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. The Office of the United States Trustee for the District of Delaware has appointed an Official Committee of Unsecured Creditors in respect of the Debtors, and an ad hoc group of bondholders has been organized. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. The Official Committee of Retired Employees and the Official Committee of Long-Term Disability Participants tapped Alvarez & Marsal Healthcare Industry Group as financial advisor. The Retiree Committee is represented by McCarter & English LLP as Delaware counsel, and Togut Segal & Segal serves as the Retiree Committee. The Committee retained Alvarez & Marsal Healthcare Industry Group as financial advisor, and Kurtzman Carson Consultants LLC as its communications agent. NORTH AMERICAN ENERGY: Moody's Cuts CFR to B3; Sr. Notes Now Caa1 ----------------------------------------------------------------- Moody's Investors Service downgraded North American Energy Partners Inc.'s (NAEP) Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to B3 from B2 and its senior unsecured notes rating to Caa1 from B3. The ratings were placed under review for further downgrade. A Speculative Grade Liquidity Rating of SGL-4 was assigned. "The downgrade of NAEP's CFR to B3 reflects its weak liquidity, demonstrated weaknesses in its customer contracts that continue to negatively impact its earnings and cash flow, and continuing high leverage," said Terry Marshall, Moody's Senior Vice President. "The company is also faced with an oil sands services market in which its customers have become more financially disciplined, resulting in project start-up delays, short notice deferrals and overall reduced predictability, all of which have driven down margins." Downgrades: Issuer: North American Energy Partners, Inc. Probability of Default Rating, Downgraded to B3 from B2 Corporate Family Rating, Downgraded to B3 from B2 Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 from B3 Upgrades: Issuer: North American Energy Partners, Inc. Senior Unsecured Regular Bond/Debenture, Upgraded to LGD4, 64% from LGD5, 70% Assignments: Issuer: North American Energy Partners, Inc. Speculative Grade Liquidity Rating, Assigned SGL-4 Outlook Actions: Issuer: North American Energy Partners, Inc. Outlook, Changed To Rating Under Review From Stable Ratings Rationale The review will focus on NAEP's ability to i) improve its liquidity, including renegotiation of covenants as necessary, and meet its cash obligations, ii) improve its operating earnings and cash flow given the weaknesses in its customer contracts, and iii) operate with consistency in the oil sands services market. The SGL-4 Speculative Grade Liquidity rating reflects weak liquidity. We expect that NAEP will have negative free cash flow of about C$35 million in fiscal year 2012 and must rely on external sources of cash to fund the deficit. As of December 31, 2011 the company had approximately C$45 million available, after letters of credit, under its C$105 million revolving credit facility due April 2013. The amount of the credit facility reduces to C$85 million as of March 31, 2012. Given the company's poor performance in early January 2012 due to underperformance on contracts and warm weather, problems which are anticipated to continue in March 2012, Moody's believes that availability under the revolver will be virtually nil at March 31, 2012, absent receipt of a cash settlement from Canadian Natural Resources Limited (Baa1 stable) under the memorandum of understanding the two companies executed in early January 2012. Moody's expects NAEP to breach compliance under its senior leverage ratio (maximum 2.0x) and interest coverage ratio (minimum 2.5x) as of its March 31, 2012 fiscal year absent renegotiation of these covenants. Alternate liquidity is limited. The principal methodology used in rating NAEP 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. Based in Calgary, Alberta, North American Energy Partners Inc. is a provider of mining, construction, piling, and pipeline services with a principal focus on the oil sands industry in Western Canada. NORTHEAST UTILITIES: Moody's Assigns Ba1 Domestic Currency Rating ----------------------------------------------------------------- Moody's Investors Service's current ratings on Northeast Utilities and its affiliates are: Senior Unsecured domestic currency rating of Baa2 LT Issuer Rating rating of Baa2 Senior Unsec. Shelf domestic currency rating of (P)Baa2 Pref. Shelf domestic currency rating of (P)Ba1 Connecticut Light and Power Company First Mortgage Bonds domestic currency rating of A2 LT Issuer Rating rating of Baa1 Pref. Stock rating of Baa3 Pref. Stock domestic currency rating of Baa3 Senior Secured Shelf domestic currency rating of (P)A2 Backed First Mortgage Bonds domestic currency rating of A2 Underlying First Mortgage Bonds domestic currency rating of A2 Yankee Gas Services Company LT Issuer Rating domestic currency rating of Baa2 Public Service Company of New Hampshire First Mortgage Bonds domestic currency rating of A3 LT Issuer Rating rating of Baa2 Senior Secured Shelf domestic currency rating of (P)A3 Western Massachusetts Electric Company Senior Unsecured domestic currency rating of Baa2 LT Issuer Rating rating of Baa2 Senior Unsec. Shelf domestic currency rating of (P)Baa2 Ratings Rationale NU's Baa2 senior unsecured rating is based on the predominantly regulated nature of the group's operations following the 2006 divestiture of several non-regulated competitive businesses. The rating is further underpinned by some geographic and operational diversification, and reflects our mixed views about the utilities' multi-jurisdictional regulatory frameworks albeit we consider them overall credit supportive. The rating further assumes that the merger between NU and NSTAR despite the delay to 2012 will be approved and implemented in a credit supportive way. Should the merger not be approved or be subject to onerous conditions, maintaining the current ratings will materially depend upon the corporate finance decisions that NU's management makes on funding the group's planned investments, particularly in terms of any material reliance on new indebtedness. To that end, the rating captures an expectation that NU will report credit metrics over the medium-term in line within its current rating category. Nevertheless, the rating factors the structural subordination that exists for parent level debt holders relative to the existing debt outstanding at the utility subsidiaries. Rating Outlook The stable outlook incorporates the assumption that the electric subsidiaries will recover the 2011 storm restoration costs over a reasonable timeframe, and that the NSTAR merger will be completed and implemented under credit supportive terms. Should the merger not be approved, the rating assumes NU management with utilize prudent financing strategies to fund the restoration costs, increased operating costs as well as the group's material capex program. The stable outlook is largely predicated on our expectation that NU and its subsidiaries will report over the medium-term key credit metrics that are commensurate with their current rating category; specifically, a consolidated CFO pre-W/C to debt and CFO pre-W/C interest coverage of at least 17% and 3.5x, respectively. NU's stable outlook incorporates the structural subordination that exists for parent-level debt holders relative to the existing debt outstanding at its utility subsidiaries. What Could Change the Rating - Up In light of the anticipated substantial deterioration of NU's and the utilities' credit metrics in the aftermath of the 2011 severe storms, the prospects for a rating upgrade in the near-term are limited. Over the medium-term, Moody's could consider NU's ratings for an upgrade following an upgrade of its subsidiaries' ratings, especially its largest subsidiary, CL&P. Over the medium to long- term, NU's ratings could be considered for an upgrade if there were an improvement in the company's consolidated financial and operating profile following the merger. For example, if NU is able to achieve consolidated CFO pre-W/C to debt and interest coverage well above 18% and closer to 4.5x, respectively, for a sustained period of time. What Could Change the Rating - Down NU's rating is likely to be downgraded following a downgrade of its subsidiaries' ratings given the structural subordination embedded in its ratings. If the pending merger with NSTAR is not approved, the ratings of NU and its subsidiaries are likely to experience negative rating pressure unless management decides to rely less than we currently anticipate on new indebtedness to fund the group's growth programs, such that the metrics of NU and the subsidiaries remain commensurate with their respective rating categories. Specifically, a downgrade could be triggered if NU reports consolidated CFO pre-W/C to debt and interest coverage below 17% and 3.5x, respectively, for an extended period. The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in August 2009. NUVILEX INC: Dismisses M&K as Auditors, Hires Robison Hill ---------------------------------------------------------- Nuvilex, Inc.'s Board of Directors dismissed the present independent auditors M & K CPAS, PLLC, as the Company prepares to complete the acquisition of the assets of SG Austria, and wish to concurrently thank M & K CPAS, PLLC, for their attention to detail and regulations, having aided Nuvilex substantially in moving the company forward over the past year. The dismissal of M & K CPAS, PLLC, as the Company's independent accountants was a result of a competitive bidding process involving several accounting firms and was approved by the Company's Board of Directors. The reports of M & K CPAS, PLLC, on the Company's financial statements for the fiscal years ended April 30, 2011, and 2010, did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that it included an emphasis paragraph on the substantial doubt about the Company's ability to continue as a going concern as of a result of the Company having suffered recurring losses from operations. In connection with the audits of the Company's financial statements for the fiscal years ended April 30, 2011, and 2010 and from April 30, 2011, and the subsequent interim period through Feb. 9, 2012: (1) there were no disagreements with M & K CPAS, PLLC, on any matter of accounting principles or practices, financial statement disclosure or auditing scope and procedure which, if not resolved to the satisfaction of M & K CPAS, PLLC, would have caused M & K CPAS, PLLC, to make reference to the matter in its report; and (2) there were no "reportable events" as that term is defined in Item 304 of Regulation S-K promulgated under the Securities Exchange Act of 1934. On Feb. 10, 2012, the Company engaged Robison, Hill & Company as the Company's independent accountant to audit the Company's financial statements and to perform reviews of interim financial statements. During the fiscal years ended April 30, 2011, and 2010, and from April 30, 2011, and the subsequent interim period through Feb. 10, 2012, neither the Company nor anyone acting on its behalf consulted with Robison, Hill & Company regarding (i) either the application of any accounting principles to a specific completed or contemplated transaction of the Company, or the type of audit opinion that might be rendered by Robison, Hill & Company on the Company's financial statements; or (ii) any matter that was either the subject of a disagreement with M & K CPAS, PLLC, or a reportable event with respect to M & K CPAS, PLLC. About Nuvilex Inc. Silver Spring, Md.-based Nuvilex, Inc., Nuvilex, Inc. operates independently and through wholly-owned subsidiaries. The Company is dedicated to bringing to market scientifically derived products designed to improve the health and well-being of those who use them. The Company's current strategy is to focus on developing and marketing products in the biotechnology arena it believes have potential for long-term corporate growth. The Company's balance sheet at Oct. 31, 2011, showed $1.7 million in total assets, $3.5 million in total liabilities, $580,000 of preferred stock, and a shareholders' deficit of $2.4 million. M&K CPAS, PLLC, in Houston, Texas, expressed substantial doubt about Nuvilex's ability to continue as a going concern, following the Company's results for the fiscal year ended April 30, 2011. The independent auditors noted that the Company has suffered recurring losses from operations. OTERO COUNTY: Court OKs BofA Deal on Cash Use Until Nov. 15 ----------------------------------------------------------- Judge Robert H. Jacobvitz of the U.S. Bankruptcy Court for the District of New Mexico has approved the extension of a stipulation between Otero County Hospital Association Inc. and Bank of America, N.A., providing for the continued use of cash collateral and approving payment of extension fee. The cash collateral extension will terminate on Nov. 15, 2012. As adequate protection and in addition to the prepetition liens held by the Bank and the replacement liens granted to the Bank, the Bank will have additional replacement liens in the Hospital Campus Real Property Collateral to secure the full amount of the prepetition obligations; provided however, the replacement liens will remain junior to the Carve-Out. Judge Jacobvitz approved the payment of the $225,000 extension fee to Bank of America as an administrative expense. The allowed amount of the Carve-Out will also be increased to the aggregate amount not to exceed $500,000. As reported in the Troubled Company Reporter on Feb. 28, 2012, the Debtor had two principle goals in its negotiations with the Bank, each of which are satisfied by the extension agreement: * First, the Debtor sought a nine month extension of the term. The Debtor believes that such an extension will resolve all cash collateral issues through the remainder of the case and will permit the Debtor to reorganize without the need for any further extensions. * Second, the Debtor sought additional covenant relief from the Bank. Among other things, for reasons unrelated to the Debtor, the State of New Mexico has delayed paying approximately $2.3 million in "sole community provider payments" to the Debtor, which has strained the Debtor's cash position. In addition, the patient census at the Debtor's hospital was unusually low from August to November of 2011, which affected the Debtor's revenue. The new financial covenants set forth in the Extension Agreement will allow the Debtor to function comfortably for the remainder of the case. The Debtor related that the stipulation with BofA expired on Feb. 16. The extension agreement contains these material terms, among other things: -- The term of the stipulation will be extended to the earliest to occur of (i) Nov. 15, 2012, or (ii) the occurrence of a Termination Event. -- The cash on hand covenant set forth in the stipulation is reduced from 75 days cash on hand in the stipulation to 55 days of cash on hand. In short, the Debtor must maintain at least 55 days cash on hand on the last day of each fiscal quarter in order to prevent a default under the terms of the Reimbursement Agreement with BofA. -- The Bank will be entitled to retain a financial advisor of its choice at the expense of the Debtor to conduct financial and other analysis of the Debtor and its operations. -- The Debtor will pay to the Bank an Extension fee in the amount of $225,000, which will be fully earned on the date the Court enters an Order approving the motion. Of that amount, $75,000 will be payable on the Effective Date, an additional $75,000 will be payable on May 16, 2012, and the final $75,000 will be payable on Aug. 16, 2012. In exchange for these accommodations, the Debtor has agreed to provide the Bank with additional adequate protection. 1. The Debtor will grant the Bank an additional replacement lien in the real estate and improvements located on the Debtor's main medical campus that were to not part of the Bank's prepetition collateral. The additional replacement lien will secure all of the Debtor's obligations to the Bank, including any prepetition obligations. The stipulation provides the Bank with a lien on the real estate to secure any diminution in the value of the Bank's prepetition collateral. The Extension Agreement expands the lien to secure the prepetition obligations themselves. 2. The Debtor will agree to pay the reasonable cost of a financial advisor for the Bank. 3. The Debtor will provide additional financial reporting to the Bank. 4. The Debtor will pay for an appraisal of the Bank's collateral, and, finally, the Debtor will pay an extension fee of $225,000. The terms of the stipulation is available for free at http://bankrupt.com/misc/OTEROCOUNTY_CC_stipulation_ext.pdf About Otero County Hospital Otero County Hospital Association Inc. filed for Chapter 11 protection (Bankr. D. N.M. Case No. 11-13686) in Albuquerque, New Mexico, on Aug. 16, 2011. The Alamogordo, New Mexico-based nonprofit developed and operates the Gerald Champion Regional Medical Center. GCRMC serves a total population of approximately 70,000 people. Otero County Hospital Association also does business as Mountain View Catering. Judge Robert H. Jacobvitz presides over the case. Craig H. Averch, Esq., and Roberto J. Kampfner, Esq., at White & Case, LLP, in Los Angeles; and John D. Wheeler, Esq., at John D. Wheeler & Associates, PC, in Alamogordo, New Mexico, serve as bankruptcy counsel. Kurtzman Carson Consultants, LLC, serves as claims agent. The Debtor disclosed $124,186,104 in assets and $40,506,759 in liabilities as of the Chapter 11 filing. Alice Nystel Page, U.S. Trustee for Region 20, appointed five creditors to serve on the Official Committee of Unsecured Creditors of the Debtor. Gardere Wynne Sewell LLP serves as the Committee's counsel. The Committee tapped James Morell of JCM Advisors, LLC, as healthcare management consultant. The U. S. Trustee appointed E. Marissa Lane PLLC as patient care ombudsman on Sept. 13, 2011. No trustee or examiner has been requested or appointed in the Chapter 11 Case. OTTER TAIL: Moody's Gives Ba1 Sr. Unsec. Domestic Currency Rating ----------------------------------------------------------------- Moody's Investors Service's current ratings on Otter Tail Corporation are: Senior Unsecured domestic currency rating of Ba1 Senior Unsec. Shelf domestic currency rating of (P)Ba1 BACKED Senior Unsecured domestic currency rating of Baa3 Ratings Rationale Based on factors in Moody's August 2009 Rating Methodology for Regulated Electric and Gas Utilities (the Methodology), OTC's Baa3 senior unsecured (guaranteed) rating is driven by OTP's supportive regulatory environments and its stable regulated cash flow and the significantly greater business risk profile for OTC's non- regulated operations, which represent about 40% of consolidated assets but generated minimal cash flow in 2010. Credit metrics are appropriate for the rating given the level of non-regulated operations. The Baa3 rating also considers the upstream guarantees provided by the majority of OTC's non-electric subsidiaries and the structurally subordinate position of the senior unsecured (guaranteed) debt at OTC relative to the unsecured debt held at OTP. Rating Outlook OTC's stable outlook assumes continued credit supportive cash flows generated by OTP and its constructive regulatory environments but also reflects OTC's volatile unregulated operations which are expected to be self-funding for their planned capital expenditures. What Could Change the Rating - Up OTC's ratings could be upgraded if there is a material reduction of OTC's unregulated operations accompanied by a corresponding reduction of debt leading to a reduced level of business risk within the OTC consolidated entity. What Could Change the Rating - Down OTC's rating could be downgraded if OTP's rating is downgraded, which could occur due to weakening credit metrics or regulatory rulings affecting the timely recovery of planned capital expenditures. OTC could also be downgraded if the non-regulated operating results decline significantly, if OTC increases its investments in unregulated businesses or if consolidated metrics decline below current levels, including cash flow to debt below 20% on a sustained basis. The principal methodology used in this rating was Regulated Electric and Gas Utilities published in August 2009. PAWTUCKET ASPHALT: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------- Pawtucket Asphalt Corp. has filed for Chapter 11 protection in the U.S. Bankruptcy Court in Providence, Rhode Island, in an attempt to remain in business by reorganizing its finances. Providence Journal reports that Pawtucket Asphalt disclosed assets of roughly $3 million and debts of roughly $6.4 million. Among the entities to which Pawtucket Asphalt owes money are: Bank Rhode Island, the U.S. Small Business Administration, and the Small Business Loan Fund Corp. -- an arm of the R.I. Economic Development Corp. Pawtucket Asphalt Corp. -- http://pawtucketasphalt.com/-- is owned by West Warwick resident Jeffrey S. Joaquin. The Company operates a hot mix asphalt facility. Pawtucket Asphalt filed a Chapter 11 petition (Bankr. D. R.I. Case No. 12-10602) on Feb. 27, 2012. Andrew S. Richardson, Esq., at Boyajian Harrington & Richardson, in Providence, Rhode Island, Serves as counsel. PEMCO WORLD: Sun Aviation to Fund Ch. 11 Case, Buy Back Business ---------------------------------------------------------------- Pemco World Air Services, Inc. filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 12-10799) with a $37.8 million DIP financing and a "stalking horse" bid from an affiliate of its current owner, Sun Aviation Services, LLC. Benjamin B. Ward, CFO of Pemco, said in a court filing that the challenges facing the airline industry following the events of Sept. 11, 2001, have contributed to a slowdown in aircraft maintenance, repair, and overhaul (MRO) orders. Mr. Ward said the reduced MROs, combined with increased competition, rising material costs, and the overall impact of the economic downturn have precipitated the bankruptcy filing by Pemco and two affiliates. The Debtors currently have 877 employees at leased facilities located in Tampa, Florida; Dothan, Alabama; and Erlanger, Kentucky. About 26% of employees are subject to CBAs and are represented by the International Association of Machinists and Aerospace Workers AFL-CIO Local 1632. The Company said in a press release it is reviewing its options at its Dothan facility and anticipates a decision will be made shortly regarding the potential for a prompt closure of the facility. Pemco estimated $50 million to $100 million in assets and debts as of the Chapter 11 filing. An affiliate of Sun Aviation, Avion Services Holdings, LLC, holds $31.8 million in aggregate senior secured debt. Sun Aviation is also the holder of subordinated secured notes, of which $5.6 million remains outstanding, and $12 million in unsecured notes. Sun also owns 85.08% of the stock of the Debtors. A wholly owned Canadian subsidiary, Pemco World Air Services (Canada) Inc., is not involved in the Chapter 11 cases or in any analogous proceeding. The Debtors say that most effective way to maximize the value of the Debtors' estate is to seek bankruptcy protection in order to (i) sell their viable aircraft maintenance and conversion business in an auction conducted under the supervision of the Bankruptcy Court; and (ii) complete a prompt and orderly liquidation of the remaining U.S.-based assets. The Debtors say that Avion Services will be the "stalking horse" bidder for substantially all of the Debtors' assets. The Debtors have not yet filed bidding procedures. The Company said it is commencing a marketing process to determine if there are other interested parties. Avion will also fund the Chapter 11 effort. Avion will provide a $5 million revolving credit on an interim basis. Upon final approval of the loan, the revolving credit will be hiked to $6 million and the Debtors will be granted access to a $31.8 million term credit facility. Each revolving loan will bear interest at 7% per annum and the term loan will bear annual interest at LIBOR plus 13.5%. The DIP facility will mature June 25, 2012, or earlier if the Debtors fail to: * obtain approval of the bid procedures within 25 days after the Petition Date; * conduct an auction regarding the sale of substantially all assets within 75 days after the Petition Date; and * obtain a sale order 90 days after the Petition Date; or * fail to close the sale within 14 days after a winning bidder is chosen. Aside from a request for approval of the DIP financing and standard "first day" motions, the Debtors have also filed proposals to pay (i) prepetition claims aggregating $3.5 million of critical vendors, and (ii) claims aggregating $2 million of certain foreign vendors. A hearing on the first day motions was scheduled for March 6. Pemco anticipates emerging from bankruptcy within the next 90 days. About Pemco World Air Services Headquartered in Tampa, Florida Pemco World Air Services -- http://www.pemcoair.com/-- performs large jet MRO services, and has operations in Dothan, AL (military MRO and commercial modification), Cincinnati/Northern Kentucky (regional aircraft MRO), and partner operations in Asia. According to the resolution authorizing the bankruptcy filing, Young Conaway Stargatt & Taylor, LLP has been tapped as general bankruptcy counsel; Kirkland & Ellis LLP as special counsel for tax and employee benefits issues; AlixPartners, LLP as financial advisor; Bayshore Partners, LLC as investment banker; and Epiq Bankruptcy Solutions LLC as notice and claims agent. Avion Services is represented by: Wendy Walker, Esq. Patricia Brennan, Esq. MORGAN, LEWIS & BOCKIUS LLP 101 Park Avenue New York, NY 10178-0060 Tel: (212) 309-6001 E-mail: wwalker@morganlewis.com - and - Bradford J. Sandler, Esq. PACHULSKI, STANG, ZIEHL AND JONES 919 North Market Street, 17th Floor Wilmington, DE 19801 E-mail: bsandler@pszjlaw.com PENINSULA HOSPITAL: U.S. Trustee Wants Chapter 11 Trustee --------------------------------------------------------- Crain's New York Business reports that the U.S. Trustee's office filed on Feb. 24, 2012, a motion to appoint a Chapter 11 trustee to oversee the case of Peninsula Hospital Center. According to the report, the U.S. Trustee's motion came after the state Department of Health shut down Peninsula's lab. The state's action, the trustee argued, proved Peninsula was being mismanaged under CEO Todd Miller. The report relates that Peninsula Hospital executives were warned in late December of deficiencies in the hospital's laboratory so serious that the state Department of Health had grounds to shut the lab down. Peninsula commissioned an outside consultant to analyze its lab at the end of 2011, and the result was a blistering December 26 report. The report says, despite the call to action, the new management team at Peninsula Hospital did not show a sense of urgency in late December and January in correcting the deficiencies. The report relates the U.S. Trustee said Mr. Miller took charge of the hospital in September after its board of directors accepted a financing package from an affiliate of Revival Home Health Care. Mr. Miller is the former chief operating officer of Revival. His previous ties to the entity now financing Peninsula is a situation that raised concerns of conflicts of interest between Peninsula and Revival, the U.S. Trustee argues. The report notes that the U.S. Trustee's office has asked the bankruptcy court judge, twice, to appoint a Chapter 11 trustee to take over Peninsula's operations, displacing Mr. Miller. According to the report, citing court documents, Peninsula's representatives said the hospital had selected an outside management group, Analytical Diagnostic Labs, to take over the lab's operation after Peninsula received the December report. That company's team of managers arrived on site in early February. According to the report, Peninsula's legal team has argued that appointing a Chapter 11 trustee "would serve no legitimate purpose." They added that the appointment would put Peninsula "at serious risk of being in default under their post-petition financing agreement, which if called, could mean, in practical terms, the end of the debtors' ability to operate." The report adds the hospital's unsecured creditors also argued against the unusual appointment of an overseer, who would have broad power to run Peninsula and its nursing home. About Peninsula Hospital Wayne S. Dodakian, Vinod Sinha, and Shannon Gerardi filed an involuntary Chapter 11 bankruptcy protection against Peninsula Hospital Center -- http://www.peninsulahospital.org/-- (Bankr. E.D.N.Y. Case No. 11-47056) on Aug. 16, 2011. Judge Elizabeth S. Stong presides over the case. Marilyn Cowhey Macron, Esq., at Macron & Cowhey, represents the petitioners. Peninsula Hospital Center and Peninsula General Nursing Home Corp., employed Alvarez & Marsal Healthcare Industry Group, LLC, as financial advisors. The Hospital employed Abrams Fensterman, et al., as their attorneys. Nixon Peabody serves as their special counsel; GCG, Inc., serves as claims and noticing agent. Judge Stong appointed Daniel T. McMurray at Focus Management Group as patient care ombudsman. Neubert, Pepe & Monteith P.C. serves as PCO's counsel. Richard J. McCord, Esq., has been appointed by the Court as examiner in the Debtors' cases. He is tasked to conduct an investigation of the Debtors' relationship and transactions with Revival Home Health Care, Revival Acquisitions Group LLC, Revival Funding Co. LLC, and any affiliates. Certilman Balin, & Hyman, LLP, which counts Mr. McCord as one of the firm's members, serves as counsel for the Examiner. CBIZ Accounting, Tax & Advisory of New York, LLC and CBIZ, Inc., serve as financial advisors for the Official Committee of Unsecured Creditors. Robert M. Hirsh, Esq., at Arent Fox LLP, in New York, N.Y., represents the Committee as counsel. PIEDMONT CENTER: Chapter 11 Trustee Hires Nelson as Accountant -------------------------------------------------------------- Judge J. Rich Leonard has authorized John A. Northern, the Chapter 11 trustee for Piedmont Center Investments, LLC, to employ Lehman Pollard of Nelson & Company, PA, as accountant. Lehman Pollard will prepare and file all necessary tax returns for the estate, review financial records, and to perform other services as may be requested by the Trustee. Mr. Pollard is a duly licensed C.P.A. with experience in these matters. Mr. Pollard submits that Nelson & Company, PA is disinterested as that term is defined in 11 U.S.C. Section 101(14). About Piedmont Center Investments Raleigh, North Carolina-based Piedmont Center Investments, LLC, owns, leases, and manages seven shopping centers located in (i) Graham, Alamance County, North Carolina; (ii) Mebane, Alamance County, North Carolina; (iii) Pittsboro, Chatham County, North Carolina; (iv) Gibsonville, Guilford County, North Carolina; (v) Murfreesboro, Hertford County, North Carolina; (vi) Nashville, Nash County, North Carolina; and (vii) Roxboro, Person County, North Carolina. Manager and part-owner Roger Camp signed a Chapter 11 petition for Piedmont Center Investments, LLC (Bankr. E.D.N.C. Case No. 11-06178) on Aug. 11, 2011. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., in New Bern, North Carolina, serves as counsel to the Debtor. In its schedules, the Debtor disclosed $27.2 million in assets and $15.5 million in liabilities. The Debtor's two primary secured creditors are Business Partners, LLC, and KeySource Commercial Bank. Counsel for KeySource are James B. Angell, Esq., and Nicolas C. Brown, Esq., at Howard, Stallings, From & Hutson, P.A. The Honorable J. Rich Leonard appointed John A. Northen, Esq. as Chapter 11 trustee in September 2011. The Bankruptcy Administrator sought a Chapter 11 trustee, citing that in August 2011, federal grand jury in the Eastern District of North Carolina indicted Piedmont's Roger van Santvoord Camp on fifteen felony counts related to bank fraud, false statements, and identity theft. PIEDMONT CENTER: Can Use KeySource Cash Collateral Until Apr. 30 ---------------------------------------------------------------- The Hon. J. Rich Leonard of the U.S. Bankruptcy Court for the Eastern District of North Carolina authorized, on an interim basis, Piedmont Center Investments, LLC, to use cash collateral which KeySource and Business Partners assert first priority security interests and liens. John A. Northen, Chapter 11 trustee for the Debtor, would use the cash collateral to pay operating expenses until Apr. 30, 2012, provided however, expenses must not to exceed 110% on a line-item cumulative basis, pending further orders of the Court after notice and hearing. A further hearing regarding on the continued use of cash collateral will be held on April 24, 2012, at 10:00 a.m. As reported in the Troubled Company Reporter on Oct. 27, 2011, KeySource asserts and appears to have a perfected security interest in the properties known as 101-105 South 5th Street, Mebane, North Carolina and the Debtor's rental income generated therefrom. Business Partners asserts and appears to have a perfected security interest in these properties and the Debtor's rental income: -- 303 Burke Street, Gibsonville, North Carolina; -- 412 S. Main Street, Graham, North Carolina -- 835 W. Main Street, Murfreesboro, North Carolina; -- E. Washington and Park Avenue, Nashville, North Carolina; -- 300 Block East Street (US Highway 64); -- Pittsboro, North Carolina, 816 N. Madison Boulevard, Roxboro, North Carolina Business Partners' security interest extends to the identifiable rents and other receipts derived from the Business Partners Properties and on hand as of the Petition Date and the rents and other receipts derived from the Business Partners. As of the Petition Date, there appear to be lien claims filed against the Mebane Property by contractors or subcontractors who supplied materials or labor for the purpose of constructing the improvements located on and thus an affixed part of the Mebane Property. The inchoate lien rights of the Lien Claimants are unliquidated, of unknown and uncertain priority, and junior to the lien of KeySource. There do not appear to be any additional lien claims filed against the Business Partners Properties. A full-text copy of the approved budget is available for free at http://bankrupt.com/misc/PIEDMONTCENTER_CC_order_budget.pdf About Piedmont Center Investments Raleigh, North Carolina-based Piedmont Center Investments, LLC, owns, leases, and manages seven shopping centers located in (i) Graham, Alamance County, North Carolina; (ii) Mebane, Alamance County, North Carolina; (iii) Pittsboro, Chatham County, North Carolina; (iv) Gibsonville, Guilford County, North Carolina; (v) Murfreesboro, Hertford County, North Carolina; (vi) Nashville, Nash County, North Carolina; and (vii) Roxboro, Person County, North Carolina. Manager and part-owner Roger Camp signed a Chapter 11 petition for Piedmont Center Investments, LLC (Bankr. E.D.N.C. Case No. 11-06178) on Aug. 11, 2011. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., in New Bern, North Carolina, serves as counsel to the Debtor. In its schedules, the Debtor disclosed $27.2 million in assets and $15.5 million in liabilities. The Debtor's two primary secured creditors are Business Partners, LLC, and KeySource Commercial Bank. Counsel for KeySource are James B. Angell, Esq., and Nicolas C. Brown, Esq., at Howard, Stallings, From & Hutson, P.A. The Honorable J. Rich Leonard appointed John A. Northen, Esq. as Chapter 11 trustee in September 2011. The Bankruptcy Administrator sought a Chapter 11 trustee, citing that in August 2011, federal grand jury in the Eastern District of North Carolina indicted Piedmont's Roger van Santvoord Camp on fifteen felony counts related to bank fraud, false statements, and identity theft. PIEDMONT CENTER: KeySource Wins Lift Stay for Mebane Property ------------------------------------------------------------- The Hon. J. Rich Leonard of the U.S. Bankruptcy Court for the Eastern District of North Carolina has ordered that the automatic stay will be immediately lifted with respect to a commercial real property located at 101-105 South 5th Street, in Mebane, North Carolina, and the rent generated from the Property. In addition, KeySource will be entitled to pursue all rights and remedies under its loan documents and applicable non-bankruptcy law with respect to the Property and the rents generated. As reported in the Troubled Company Reporter on Dec. 28, 2011, KeySource Commercial Bank, sought a (i) relief from the automatic stay in Piedmont Center Investments, LLC's assets, and (ii) terminate the Chapter 11 Trustee's use of cash collateral. The Debtor is obligated to KeySource in the original principal amount of $3,800,000. The note is secured by a deed of trust and assignment of rents on commercial property located at 101-105 South 5th Street, Mebane, North Carolina. As of the petition Date, the Debtor owed KeySource the total amount of $4,101,586. KeySource sought relief from the automatic stay to allow KeySource to pursue all rights and remedies available to it under its loan documents and applicable nonbankruptcy law, including but not limited to foreclosure or appointment of a receiver. KeySource asserts that interests of KeySource in the property and the rents generated thereon are not adequately protected. KeySource also stated that the relief is appropriate because the Debtor lacks equity in the property and the property is not necessary for an effective reorganization. About Piedmont Center Investments Raleigh, North Carolina-based Piedmont Center Investments, LLC, owns, leases, and manages seven shopping centers located in (i) Graham, Alamance County, North Carolina; (ii) Mebane, Alamance County, North Carolina; (iii) Pittsboro, Chatham County, North Carolina; (iv) Gibsonville, Guilford County, North Carolina; (v) Murfreesboro, Hertford County, North Carolina; (vi) Nashville, Nash County, North Carolina; and (vii) Roxboro, Person County, North Carolina. Manager and part-owner Roger Camp signed a Chapter 11 petition for Piedmont Center Investments, LLC (Bankr. E.D.N.C. Case No. 11-06178) on Aug. 11, 2011. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., in New Bern, North Carolina, serves as counsel to the Debtor. In its schedules, the Debtor disclosed $27.2 million in assets and $15.5 million in liabilities. The Debtor's two primary secured creditors are Business Partners, LLC, and KeySource Commercial Bank. Counsel for KeySource are James B. Angell, Esq., and Nicolas C. Brown, Esq., at Howard, Stallings, From & Hutson, P.A. The Honorable J. Rich Leonard appointed John A. Northen, Esq. as Chapter 11 trustee in September 2011. The Bankruptcy Administrator sought a Chapter 11 trustee, citing that in August 2011, federal grand jury in the Eastern District of North Carolina indicted Piedmont's Roger van Santvoord Camp on fifteen felony counts related to bank fraud, false statements, and identity theft. PINNACLE AIRLINES: Postpones Annual Meeting Indefinitely -------------------------------------------------------- The annual Meeting of Shareholders of Pinnacle Airlines Corp. will not convene at its usual time in mid-May. The Company has not yet set the date to which the meeting will be postponed. The Company will endeavor to provide reasonable notice in advance of the date when that meeting is to be scheduled. About Pinnacle Airlines Corp. Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. The Company reported $8.81 million on $938.05 million of total operating revenue for the nine months ended Sept. 30, 2011, compared with net income of $17.02 million on $729.13 million of total operating revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. The Company warned in a letter to employees in February that it may be forced to file for Chapter 11 absent a deal with United Airlines. "We still have work to do to reduce our costs and we still have work to do to make our partner agreements profitable. Unless we have long-term agreements in place, the best way for us to improve our financial performance and ensure a viable future for our company may still be the court-supervised Chapter 11 process," said Sean Menke, president and chief executive officer of the Company, in the February 2012 letter. PINNACLE AIRLINES: Financial Chief Christie Joins Spirit Airlines ----------------------------------------------------------------- Dow Jones' Daily Bankruptcy Review reports that Pinnacle Airlines Corp. is looking for new chief financial officer as Edward "Ted" Christie will leave the company March 30 to become Spirit Airlines Inc.'s chief financial officer. About Pinnacle Airlines Corp. Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. The Company reported $8.81 million on $938.05 million of total operating revenue for the nine months ended Sept. 30, 2011, compared with net income of $17.02 million on $729.13 million of total operating revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. The Company warned in a letter to employees in February that it may be forced to file for Chapter 11 absent a deal with United Airlines. "We still have work to do to reduce our costs and we still have work to do to make our partner agreements profitable. Unless we have long-term agreements in place, the best way for us to improve our financial performance and ensure a viable future for our company may still be the court-supervised Chapter 11 process," said Sean Menke, president and chief executive officer of the Company, in the February 2012 letter. PINNACLE ENTERTAINMENT: Moody's Rates $250MM New Notes at 'B3' -------------------------------------------------------------- Moody's Investors Service raised Pinnacle Entertainment Inc.'s Corporate Family ("CFR") and Probability of Default ("PDR") ratings to B1 from B2. In conjunction with the CFR and PDR upgrade, Moody's affirmed Pinnacle's B1 senior unsecured note rating, and raised the company's existing subordinated note rating to B3 from Caa1. At the same time, Moody's assigned a B3 to Pinnacle's proposed $250 million senior subordinated notes due 2012, and a Ba1 to the company's existing $410 million senior secured revolver expiring 2016 and proposed $250 million term loan due 2019. Proceeds from the proposed term loan and senior subordinated note offerings will be used to repay in full the company's $380 million 7.5% senior subordinated notes due 2015 and add approximately $45 million of cash to its balance sheet. Ratings upgraded: - CFR to B1 from B2 - PDR to B1 from B2 - $350 million 8.750% sr. sub. notes due 2020 to B3 (LGD 5, 85%) from Caa1 (LGD 5, 79%) Rating affirmed and LGD assessment revised: - $445 million 8.625% sr. unsec. notes due 2017 at B1 (to LGD 4, 51% from LGD 3, 35%) New ratings assigned: - $250 million sr. sub. notes due 2022 at B3 (LGD 5, 85%) - $250 million term loan B due 2019 at Ba1 (LGD 2, 14%) - $410 million revolver expiring 2016 at Ba1 (LGD 2, 14%) - $1.5 billion senior secured, unsecured, subordinated and preferred debt shelf at (P) Ba1,(P) B1, (P) B3, and (P) B3, respectively Ratings Rationale The upgrade of Pinnacle's CFR to B1 from B2 reflects a higher degree of comfort on Moody's part that the company can achieve and maintain debt/EBITDA at/or below 5.0 times over the longer-term. Moody's view is based on Pinnacle's strong fourth quarter performance, both in terms of revenue and EBITDA, along with Moody's view that regional gaming trends will remain stable over the foreseeable future. Pro forma for the proposed offering, debt/EBITDA is about 5.3 times, but expected to drop below 5.0 times by the end of fiscal 2012, partly due to the expected incremental earnings contribution from the planned September opening of Baton Rouge. Moody's expects that Pinnacle's Baton Rouge project will capture a significant share of the Baton Rouge, LA gaming market when the casino opens in September 2012. This should offset potential losses to its L'Auberge casino in Lake Charles, LA if and when Mojito Pointe, a potential competing facility in Lake Charles, opens. The Ba1 assigned to Pinnacle's secured credit facility reflects the considerable credit support provided to it by less senior debt. Conversely, the B3 rating on Pinnacle's senior subordinated notes considers the significant amount of senior secured and senior unsecured debt ahead of it. The stable rating outlook reflects Moody's view that Pinnacle has the credit profile and liquidity to pursue planned new developments and that it can maintain the margin and operating cash flow improvements achieved during the past year. The stable rating outlook also considers that despite Moody's opinion that the regional gaming trends have stabilized, there is still some uncertainty regarding regional gaming growth prospects. Further ratings improvement is possible if Pinnacle can demonstrate some resilience to the new supply threat, and/or achieve initial ramp-up results at Baton Rouge that suggest the property will be able to achieve an annual EBITDA-based rate of return greater than 15%. A higher rating would also likely require that Pinnacle achieve and maintain debt/EBITDA at or below 4.0 times. Ratings could be lowered if it appears that Pinnacle -- for any reason -- is unable to maintain debt/EBITDA below 5.5 times. Given that a significant portion of Pinnacle's revenue and earnings come from its Lake Charles, LA casino, any formal approval of gaming in neighboring Texas could also have a negative ratings impact. The principal methodology used in rating Pinnacle Entertainment Inc. was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Pinnacle Entertainment Inc. owns and operates casinos, located in Louisiana, Missouri, Indiana and a racetrack in Ohio. The company is also developing L'Auberge Casino & Hotel Baton Rouge, which is scheduled to open in the summer of 2012. In August 2011, Pinnacle acquired a 26% ownership stake in Asian Coast Development (Canada) Ltd., an international development and real estate company currently developing a resort in Vietnam. The company generates about $1.1 billion of consolidated net revenue. PINNACLE ENTERTAINMENT: Fitch Rates Proposed $250MM Loan at 'B-' ---------------------------------------------------------------- Fitch rates Pinnacle Entertainment Inc's (Pinnacle) proposed $250 million senior secured term loan 'BB/RR1' and $250 million in senior subordinated unsecured notes due 2022 'B-/RR5'. In addition, Pinnacle's senior unsecured notes are downgraded to 'BB- /RR2' from 'BB/RR1'. Other security specific ratings are affirmed (see list at the end of the release). Pinnacle's Issuer Default Rating (IDR) is affirmed at 'B'. The Rating Outlook is Positive. The proceeds from the two transactions will refinance $385 million of the 7.5% subordinated notes coming due in 2015. The remaining balance will be used to term out the amount outstanding on the company's revolver ($56 million as of Dec. 31, 2011), fund project capital expenditures and fund issuance costs. Fitch views these transactions as leverage neutral, since the incremental debt would have otherwise been drawn on the revolver to fund Baton Rouge construction. The term loan is borrowed under Pinnacle's existing credit agreement and is pari passu with the revolver. The term loan will mature in 2019 and will amortize at 1% per year. Maturity could be accelerated to May 2017 if 8.625% senior unsecured notes remain outstanding on May 1, 2017 (mature August 2017). The credit agreement, as amended in August 2011, has tight restricted payment covenants and includes a 50% cash flow sweep provision, which mandates that the term loans are prepaid first. Per the agreement, Pinnacle may issue up to $1.5 billion in senior unsecured debt as long as leverage remains less than 6 times (x). The new subordinated note's indenture is similar to that of the 8.75% subordinated notes issued in May 2010 and provides for limited bondholder protection. Transactions viewed favorably: Fitch views the proposed transactions positively, since they improve Pinnacle's already healthy maturity profile and provide additional flexibility with respect to Pinnacle's considerable project pipeline. The next maturity will be in 2017, when the $450 million outstanding in senior unsecured notes come due. Project pipeline includes $212.5 million that remains to be spent at Baton Rouge (as of Dec. 31, 2011), the $82 million River City expansion planned for a 2013 opening, and the potential installation of slots at River Downs. The development of River Downs is awaiting a resolution of a legal matter and is expected to cost at least $150 million (excluding $50 million license fee) per the minimum investment provision in the Ohio law. Senior unsecured downgrade: The downgrade of the senior unsecured notes to 'BB-/RR2' is consistent with Fitch's recovery criteria, which limits notching for senior unsecured debt from the IDR at +2. The addition of $250 million in senior secured debt weakens the recovery prospects for the senior unsecured notes. Fitch still considers the senior unsecured notes to be fully covered in an event of default. The proposed transactions do not affect the recovery ratings on the subordinated notes or the senior secured credit facility. Resolution to the Positive Outlook: The Positive Outlook reflects Pinnacle's strong operating performance, particularly in the Lake Charles and St. Louis markets; the near-term horizon for the L'Auberge Baton Rouge project opening (summer 2012); and its solid liquidity position. With the L'Auberge Baton Rouge opening, Pinnacle should have leading positions in three distinct markets. Baton Rouge, along with the continued ramp up at Pinnacle's two St. Louis properties and market leading position in Lake Charles, offers the credit a level of diversification and competitive position that is more commensurate with the higher end of the 'B' category. The Positive Outlook suggests that there is a good likelihood of an upgrade to a 'B+' IDR over the next 12-24 months. However, the upgrade would be contingent on Pinnacle's financial profile being able to absorb new competition that is expected to come online around the 2013-2014 timeframe. Fitch's base case, which is consistent with an upgrade scenario, reflects EBITDA approaching $300 million and leverage in the mid- 4x range once the Baton Rouge opening anniversaries in the second half of 2013 but before competition opens and begins to ramp up. This scenario does not take into account drawing on the revolver to fund the installation of slots at River Downs, which may temporarily push leverage closer to 5x as the project reaches completion. Around the 2013-2014 timeframe, there is the potential that Creative Casinos may open its $400 million Mojito Pointe project in Lake Charles. Pinnacle's L'Auberge Lake Charles accounts for about a third of Pinnacle's property EBITDA pro forma for the Baton Rouge opening and captures roughly half of the market share in Lake Charles. Also around the same timeframe, Rock Ohio Caesars' Horseshoe Cincinnati will open in second-quarter 2013 (impacts Belterra), and there could be another casino in Bossier City by 2013 (impacts Bossier City Boomtown). Fitch expects Pinnacle's leverage to remain below or close to 5.0x as these projects ramp up, with enough cushion for a 20%-30% EBITDA decline in Lake Charles; 15%-20% declines at Bossier City Boomtown and Belterra; and a slow ramp up of L'Auberge Baton Rouge. On a latest 12 months (LTM) basis as of Dec. 31, 2011, reported consolidated adjusted EBITDA was roughly $252 million compared to $1.3 billion in pro forma debt for a debt/EBITDA leverage ratio of 5.2x. With interest expense running in the $100 million-$105 million range, pro forma EBITDA/interest coverage is around 2.4x- 2.5x on an LTM basis. Fitch's base case forecasts this ratio to remain comfortably above 2x as the new competition ramps up. Drivers that may place negative pressure on Pinnacle's ratings and cause Fitch to revise the Outlook back to Stable include: -- Pinnacle undertaking a significant development outside of River City phase II or outfitting River Downs for video lottery terminals (VLTs); -- Texas legalizing gaming in its 2013 legislative session, which would place pressure on Pinnacle's Lake Charles and Bossier City markets; -- General operating underperformance relative to Fitch's base case pressuring discretionary FCF to well below $100 million before competing facilities open; -- Deterioration in the macro-economic environment. Fitch's base case currently incorporates the continuation of a slow-growth recovery in the U.S. Fitch considers it unlikely that Pinnacle's IDR will move beyond 'B+' in the foreseeable future taking into account the company's relatively small size, high exposure to limited number of markets, and the tendency to be an active developer. The ratings also take into account a longer-term leverage target in the 4x-5x range, with the potential for temporary spikes slightly above this range due to conservatively funded development projects. The higher-end of the 'B' category would give Pinnacle credit for the prudent bottom-up building of its capital structure; leading, high quality assets in three distinct markets; increased focus on operating efficiencies, and solid liquidity. Fitch has assigned the following ratings: -- $250 million senior secured term loan 'BB/RR1'; -- $250 million subordinated notes due 2022 'B-/RR5'. Fitch downgrades the following: -- $450 million in 8.625% senior unsecured notes due 2017 to 'BB-/RR2' from 'BB/RR1'. In addition, Fitch affirms the following: -- IDR at 'B'; -- $410 million senior secured revolver at 'BB/RR1'; -- $350 million in 8.75% subordinated notes due 2020 at 'B-/RR5'; -- $385 million in 7.5% subordinated notes due 2015 at 'B-/RR5'. PINNACLE WEST: Moody's Assigns '(P)Ba2' Domestic Currency Rating ---------------------------------------------------------------- Moody's Investors Service's current ratings on Pinnacle West Capital Corporation and its affiliates are: Senior Unsecured Bank Credit Facility domestic currency rating of Baa3 LT Issuer Rating rating of Baa3 Senior Unsec. Shelf domestic currency rating of (P)Baa3 Subordinate Shelf domestic currency rating of (P)Ba1 Pref. Shelf domestic currency rating of (P)Ba2 Commercial Paper domestic currency rating of P-3 Arizona Public Service Company Senior Unsecured domestic currency rating of Baa2 Senior Unsecured Bank Credit Facility domestic currency rating of Baa2 LT Issuer Rating rating of Baa2 Senior Unsec. Shelf domestic currency rating of (P)Baa2 BACKED Commercial Paper domestic currency rating of P-2 Ratings Rationale Based on factors in Moody's August 2009 Rating Methodology for Regulated Electric and Gas Utilities (the Methodology), Pinnacle's Baa3 senior unsecured rating is driven by the historically challenging though improving regulatory environment in Arizona and credit metrics at the upper end of the range for U.S. utility holding companies rated Baa. Rating Outlook Pinnacle' stable outlook reflects our expectation that APS' proposed rate settlement will be approved and implemented in a timely manner with minimal modifications and that Pinnacle's credit metrics will remain strong for its rating. What Could Change the Rating - Up Pinnacle's rating is not likely to be upgraded in the medium term. Although the rate case settlement is credit positive, we will need to see further supportive regulatory results before we would consider the regulatory environment to be average when compared to most of the other U.S. utility frameworks. At which point, an upgrade would be possible. What Could Change the Rating - Down Pinnacle's rating could be downgraded if APS' regulatory framework becomes less supportive or less predictable, including if the proposed rate settlement is significantly modified in a manner that makes it difficult for APS to earn a reasonable ROE and recover its operating costs. In addition, if credit metrics declined to the low-Baa range, including cash flow to debt at or below 16%. The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in August 2009. PNM RESOURCES: Moody's Gives Ba1 Sr. Unsec. Domestic Curr. Rating ----------------------------------------------------------------- Moody's Investors Service's current ratings on PNM Resources, Inc. and its affiliates are: Senior Unsecured domestic currency rating of Ba1 Senior Unsec. Shelf domestic currency rating of (P)Ba1 Public Service Company of New Mexico Senior Unsecured domestic currency rating of Baa3 LT Issuer Rating rating of Baa3 Senior Unsec. Shelf domestic currency rating of (P)Baa3 Texas-New Mexico Power Company First Mortgage Bonds domestic currency rating of A3 Senior Secured Bank Credit Facility domestic currency rating of A3 LT Issuer Rating rating of Baa2 Ratings Rationale Based on factors in Moody's August 2009 Rating Methodology for Regulated Electric and Gas Utilities (the Methodology), PNMR's Ba1 rating is driven by the challenging regulatory environment for PSNM in New Mexico, reasonable cost recovery mechanisms, and investment grade credit metrics. Rating Outlook PNMR's stable outlook reflects our expectation that its two subsidiary utilities will experience moderate regulatory lag, reasonable periodic rate relief and timely recoveries of fuel and purchased power costs and that PNMR's credit metrics will remain strong for its rating with limited further improvement expected going forward. What Could Change the Rating - Up PNMR's ratings or outlook could be revised upward if PSNM's rating is upgraded due to an improvement in the New Mexico regulatory environment and PSNM's credit metrics are maintained in the upper end of the Baa-rating category, as demonstrated, for example, by cash flow to debt pre-working capital changes above 18% on a sustainable basis. What Could Change the Rating - Down PNMR's ratings or outlook could be revised downward if PSNM or TNMP experience prolonged operational difficulties or increased non-recoverable costs causing consolidated credit metrics to decline below low-Baa levels including cash flow to debt below 13% on a sustained basis. In addition, a negative rating action could occur if PNMR increases its business risk via new non-regulated investments. The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in August 2009. POMPANO CREEK: U.S. Trustee Appoints Chapter 7 Trustee ------------------------------------------------------ Donald F. Walton, the United States Trustee for Region 21, has appointed Sonya Salkin as Chapter 7 trustee in the bankruptcy case of Pompano Creek Associates, LLC. The U.S. Bankruptcy Court granted Mr. Walton's motion to convert the Chapter 11 case of the Debtor to Chapter 7 on Feb. 8, 2012. As reported in the Troubled Company Reporter on Nov. 30, 2011, the U.S. Trustee sought dismissal or conversion of the Debtor's case because: -- the Debtor has failed to file monthly operating reports for the months of July, August, and September 2011; and -- the case was filed over 10 months ago and the Debtor has not yet filed a plan of reorganization. Pompano Creek Associates, LLC, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-11989) on Jan. 26, 2011, Judge John K. Olson presiding. The Debtor disclosed $24,000,000 in assets and $6,028,539 in liabilities as of the Chapter 11 filing. The U.S. Trustee did not appoint an official committee of unsecured creditors in the Chapter 11 case. POMPANO CREEK: Section 341(a) Meeting Scheduled for March 27 ------------------------------------------------------------ The U.S. Trustee for Region 21 will convene a meeting of creditors of Pompano Creek Associates, LLC on March 27, 2011, at 11:30 a.m. The meeting will be held at U.S. Courthouse, 299 E Broward Blvd #411, Ft Lauderdale, Florida. This is the first meeting of creditors required after the Debtor's Chapter 11 case was converted to Chapter 7 on Feb. 8, 2012. Creditors' must file their proof of claim not later than June 25, 2012. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Pompano Creek Associates, LLC, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-11989) on Jan. 26, 2011, Judge John K. Olson presiding. The Debtor disclosed $24,000,000 in assets and $6,028,539 in liabilities as of the Chapter 11 filing. The U.S. Trustee did not appoint an official committee of unsecured creditors in the Chapter 11 case. QUADRA FNX: KGHM Unit Completes Acquisition of All Shares --------------------------------------------------------- Quadra FNX Mining Ltd. and KGHM Polska Miedz S.A. disclosed the completion of the acquisition of all of the issued and outstanding common shares of Quadra FNX and all of the outstanding Quadra FNX warrants by 0929260 B.C. Unlimited Liability Company, an indirect, wholly-owned subsidiary of KGHM. The transaction was structured as a court-approved plan of arrangement under The Business Corporations Act (British Columbia) between Quadra FNX, AcquireCo and Quadra FNX securityholders. The Company is now a wholly-owned subsidiary of AcquireCo and its name will change to KGHM International Ltd. in due course. The management team will continue to be led by Paul Blythe, the current CEO of Quadra FNX. It is expected that the Common Shares and the 2009 Warrants will be de-listed from the Toronto Stock Exchange effective at the close of business on March 7, 2012. Securityholders who have not already taken steps to deposit the certificates representing their Common Shares or 2009 Warrants in order to receive the consideration to which they are entitled pursuant to the Completion of the Arrangement constitutes a "Change of Control" under the indenture governing Quadra FNX's US$500 million aggregate principal amount 7.75% senior notes (the "Notes") due 2019. In accordance with the indenture, the Company will, within 30 days of the date hereof, make a change of control offer to purchase all of the outstanding Notes at a purchase price in cash equal to 101% of the principal amount of such outstanding Notes, plus accrued and unpaid interest to the date of redemption. Further details regarding the Arrangement are set out in the Company's Notice of Special Meeting of Securityholders and Information Circular dated Jan. 6, 2012, which has been filed with the applicable securities regulatory. RADIOSHACK CORP: S&P Cuts Corporate to 'B+'; Outlook Negative ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Fort Worth, Texas-based RadioShack Corp. to 'B+' from 'BB-'. The outlook is negative. "The recovery rating remains '4', indicating our expectations for average (30% to 50%) recovery in the event of a payment default," S&P said. "The downgrade of RadioShack reflects our estimate that even if operating performance improves in the second half of the year, it will be very difficult for the company to improve its gross margin, given the highly promotional nature of year-end holiday retailing in the wireless and consumer electronic categories," said Standard & Poor's credit analyst Jayne Ross. She added, "It is our belief that all segments of the company's business will remain under margin pressure for 2012." "Our negative outlook on RadioShack reflects our expectation that the company's operating trends will remain at their new lower level and will likely be negative over the very near term. We expect flat to modest sales growth in the wireless segment as well as mixed sales performance in the company's other segments for most of 2012, given the weak industry dynamics in consumer electronics. We are not estimating any meaningful improvement in margins in 2012," S&P said. "We would consider a negative rating action if operating performance and credit metrics continue to deteriorate, with debt leverage of more than 5.5x, EBITDA margin of less than 6%, and EBITDA interest coverage of 3.0x or less. This could occur if gross margin contracts by about 200 bps, or revenues decline by about 2% or more, or some combination of both. In addition, we would consider a negative rating action if the company's financial policies become more aggressive, while operating performance remains at current levels or worsens," S&P said. "Although unlikely, we could consider a positive rating action if we begin to see stabilization in sales results in the company's signature segment, solid results in RadioShack's mobility platform, and sustained stronger credit metrics. For this to occur, we would have to see gross margin improvement of at least 100 bps and revenue growth of 4% or more, or some combination of higher gross margin and sales growth. We estimate that if this occurred, total debt to EBITDA would improve to the low-3x area and EBITDA coverage of interest expense would be in the high-4x area. We would also consider a positive rating action if the company reduced its debt levels such that total debt to EBITDA remained at less than 3x, other credit metrics improved, and operating performance stabilized," S&P said. RBS GLOBAL: Moody's Assigns 'Ba3' Rating to $1.1-Bil. Facility -------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to RBS Global, Inc.'s ("RBS") new $1.1 billion Senior Secured Facility to be issued to partially refinance existing debt. Concurrently, the company's Corporate Family Rating ("CFR") and Probability of Default Rating ("PDR") were affirmed at B3 as credit metrics remain largely unchanged as a result of the transaction. Upon repayment, Moody's will withdraw the ratings on the current, existing revolving credit facility and term loan B. The company's Speculative Grade Liquidity Rating ("SGL") was affirmed at SGL-2. The rating outlook is stable. Assignments: Issuer: RBS Global, Inc. $1.1 billion Senior Secured Bank Credit Facility rated Ba3, LGD2- 16% Affirmations/Adjustments: Issuer: RBS Global, Inc. $300 million Senior Subordinated Regular Bond/Debenture affirmed at Caa2, LGD changed to LGD6-94% from LGD6- 92%, $1.2 billion aggregate amount Senior Unsecured Regular Bond/Debenture affirmed at Caa1, LGD changed to LGD4-68% from LGD4-63%. Ratings Rationale The B3 Corporate Family Rating balances the company's high leverage resulting from a 2006 buyout transaction against its proven ability to generate positive free cash flow and a good liquidity profile. Net sales grew by 14.5% for the LTM period ended December 31, 2011 and its operating income grew by about 12%. Nevertheless, even as RBS' performance has improved, the debt/EBITDA leverage metric is still highly reflective of the current B3 CFR. The rating considers the expectation that the company will continue to deleverage as its process and motion control segment continues to benefit from demand across a majority of its end markets offsetting weaker performance in the water management segment. The new senior secured credit facility is comprised of a $180 million first lien senior secured revolving credit facility maturing March 2017, and a $950 million first lien term loan facility, maturing April 2018. The ratings reflect the facility's first lien status and support provided by the more junior facilities in the capital structure. The stable rating outlook is based on Moody's expectations that RBS will likely outperform the slow growing economy. Moody's expects the company to strengthen itself in the current rating category by paying down debt with its free cash flow over the next 18 months. The rating could experience positive momentum if Debt/EBITDA was anticipated to improve below 5.5x and if free cash flow to total debt was expected to be sustained above 5%. The rating or outlook may experience downward pressure if leverage was projected to be over 7 times on a sustained basis. A contraction in sales would be a concern given current expectations is for positive sales growth. RBS' SGL-2 speculative grade liquidity rating reflects Moody's belief that the company will maintain a good liquidity profile over the next twelve months. RBS maintains strong cash balances that are currently over $220 million as of December 31, 2011 with good availability anticipated under the company's $180 million revolving credit facility with ample covenant headroom. Moreover, Moody's anticipates that the company will experience low single digit free cash flow to debt. The principal methodology used in rating RBS 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. Rexnord Corporation, headquartered in Milwaukee, WI, is the indirect parent of RBS Global, Inc. RBS is an industrial company comprised of two strategic segments: Process and Motion Control (about 65% of revenues) and water management (about 35% of revenues). Revenues for the last twelve months through December 31, 2011 totaled approximately $1.9 billion. Apollo Management, L.P. ("Apollo") through its affiliates, is the majority owner of RBS. RESERVOIR CORPORATE: Daniel Steinberg Pleads Guilty of Fraud ------------------------------------------------------------ Vanessa Inzitari at Westport reports that Daniel Steinberg, who pleaded guilty to embezzling money from Reservoir Corporate Group LLC, was sentenced to 30 months in a federal prison and must pay back nearly $1 million. According to the report, in August 2011, Mr. Steinberg pleaded guilty to one count of bankruptcy fraud. August 2009 to August 2010, Mr. Steinberg illegally transferred $770,000 to himself from Reservoir Corporate. At the time of the fraud, Mr. Steinberg was the manager of the company. He used the money for personal expenses and expenses of other businesses he owned or controlled, according to the statement. The report relates that Mr. Steinberg concealed the fraud by falsifying the company's books and records during the bankruptcy proceedings and by providing false information to the Office of the U.S. Trustee. The fraud was discovered after a Chapter 11 bankruptcy trustee was appointed to operate the company. Further investigation revealed that Mr. Steinberg embezzled additional funds from the company before the bankruptcy filings. In total, Mr. Steinberg embezzled $968,973, the U.S. attorney's office reported. Mr. Steinberg's imprisonment will be followed by three years of supervised release. U.S. District Judge Janet C. Hall in Bridgeport also ordered Mr. Steinberg to pay full restitution. Reservoir Corporate Group remains in bankruptcy and owes $47 million, says the report. Reservoir Corporate Group LLC filed for Chapter 11 protection (Bankr. D. Conn. Case No. 09-51706) on Aug. 28, 2009. Reservoir Corporate owns office buildings on Research Drive in Shelton, Connecticut. ROAD INFRASTRUCTURE: S&P Assigns Preliminary 'B' Rating ------------------------------------------------------- U.S.-based Road Infrastructure Investment LLC is seeking to raise debt financing as part of its planned combination of the Ennis and Flint businesses. "We are assigning a preliminary 'B' corporate credit rating to Road Infrastructure Investment LLC. We are also assigning preliminary issue and recovery ratings to its credit facilities," S&P said. "The outlook is stable because we expect the company's combined competitive position and relatively steady end-market demand to support credit quality over the next few years," S&P said. ROBERT E. DERECKTOR: Files for Chapter 11 Bankruptcy Protection --------------------------------------------------------------- Superyachttimes.com reports that Robert E. Derecktor Inc. said it is seeking protection under the Chapter 11 bankruptcy and reorganization laws. According to the report, a protracted legal battle with the state of Alaska regarding vendor-related issues unconnected to the yard's workmanship on a project completed in 2005, together with the depressed economy, has put a significant strain on the company's finances. The report says the bankruptcy filing is unrelated to recent events involving Derecktor Shipyard Conn. LLC, located in Bridgeport, Connecticut. The report relates that Robert E. Derecktor Inc. is seeking to reorganize while continuing to offer the same high quality custom new construction and service offerings for which it has been synonymous for over 65 years. In addition to the 40 boats in winter storage, the yard has several yacht refits and commercial service projects underway, including work on several New York Water Taxi vessels. The report notes that Derecktor of Florida, located in Dania Beach, Florida, is unaffected by the filing in Mamaroneck. Robert E. Derecktor Inc. engages in off-site millwork projects as well as outfitting the Presto series of sailboats. Robert E. Derecktor filed a Chapter 11 petition (Banrk. S.D.N.Y. Case No. 12-22393) on Feb. 27, 2012. Dawn K. Arnold, Esq., and Julie A. Cvek, Esq., at Rattet Pasternak, LLP, serves as counsel. The Debtor estimated assets of up to $50,000 and debts of up to $10 million. ROCK POINTE: Files List of 20 Largest Unsecured Creditors --------------------------------------------------------- Rock Pointe Holdings, LLC, filed with the Bankruptcy Court a list of creditors holding the 20 largest unsecured claims against its estate: Name of creditor Nature of claim Amount of Claim ---------------- --------------- --------------- ABM Janitorial Service 112 N Altamont Street Spokane, WA 99202-3804 Trade Debt $261,257 Green Johnny LLC P.O. Box 48542 Spokane, WA 99228-1542 Trade Debt $137,635 Flooring Concepts P.O. Box 31644 Seattle, WA 98103-1644 Trade Debt $108,271 Sherwin Williams Company Trade Debt $87,932 Avista Trade Debt $80,830 Klemle & Hagood Company Trade Debt $71,181 Specialty Construction Systems, Ltd. Trade Debt $56,363 Advanced Fire Protection, Inc. Trade Debt $37,877 Spectrum Coatings Trade Debt $36,775 Cosco Fire Protection Trade Debt $28,392 Fire Protection Specialists, LLC Trade Debt $21,334 Thyssenkrupp Elevator Corp Trade Debt $13,640 Haase Landscape, Inc. Trade Debt $12,764 Clines Air Conditioning Service Trade Debt $10,074 G.W. DeMaine Trade Debt $7,385 Jamie R. Steele Trade Debt $5,937 K.C. Charles, Inc. Trade Debt $4,202 DIVCO Trade Debt $3,665 RW Fab Trade Debt $3,231 Fulcrum Environmental Consulting Trade Debt $2,700 About Rock Pointe Rock Pointe Holdings Company LLC owns the Rock Pointe Corporate Center in Spokane, Washington. The Company filed for Chapter 11 protection (Bankr. E.D. Wash. Case No.11-05811) on Dec. 2, 2011. Brett L. Wittner, Esq., at Kent & Wittner PS, represents the Debtor. The Debtor estimated both assets and debts of between $50 million and $100 million. ROUNDTABLE CORPORATION: Case Summary & Creditors List ----------------------------------------------------- Debtor: Roundtable Corporation aka RCDQ Bloomington, Inc. RCDQ Boise City, Inc. RCDQ Calvert, Inc. RCDQ Canadian, Inc. RCDQ Carrollton, Inc. RCDQ Cedar Hill, Inc. RCDQ Clarendon, Inc. RCDQ Claude, Inc. RCDQ Clayton, Inc. RCDQ Clinton, Inc. RCDQ Cloeman, Inc. RCDQ Columbus, Inc. RCDQ Conroe, Inc. RCDQ Coppell, Inc. RCDQ Corsicana, Inc. RCDQ Crosbyton, Inc. RCDQ Dalhart, Inc. RCDQ Denver City, Inc. RCDQ Dumas, Inc. RCDQ Elm Mott, Inc. RCDQ Farmers Branch, Inc. RCDQ Franklin, Inc. RCDQ Friona, Inc. RCDQ Fritch, Inc. RCDQ Giddings, Inc. RCDQ Groesbeck, Inc. RCDQ Groom, Inc. RCDQ Gruver, Inc. RCDQ Haskell, Inc. RCDQ Hearne, Inc. RCDQ Hereford, Inc. RCDQ Hewitt, Inc. RCDQ HIllsboro, Inc. RCDQ Hobbs, Inc. RCDQ Hubbard, Inc. RCDQ Idalou, Inc. RCDQ Itasca, Inc. RCDQ Lockney, Inc. RCDQ Merkel, Inc. RCDQ Olton, Inc. RCDQ Panhandle, Inc. RCDQ Perryton, Inc. RCDQ Plains, Inc. RCDQ Port Aransas RCDQ Port Lavaca Austin RCDQ Port Lavaca Virginia RCDQ Post, Inc. RCDQ Raton, Inc. RCDQ Seagraves, Inc. RCDQ Seminole, Inc. RCDQ Shamrock, Inc. RCDQ Slaton, Inc. RCDQ Spearman, Inc. RCDQ Stinnett, Inc. RCDQ Stratford, Inc. RCDQ Sunray, Inc. RCDQ Teague, Inc. RCDQ Temple, Inc. RCDQ Tomball, Inc. RCDQ Vega, Inc. RCDQ Waco, Inc. RCDQ Wellington, Inc. RCDQ Wolfforth, Inc. 1000 Emerald Isle, Suite 101 Dallas, TX 75218 Bankruptcy Case No.: 12-40512 Chapter 11 Petition Date: March 2, 2012 Court: U.S. Bankruptcy Court Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtor's Counsel: Mark A. Weisbart, Esq. THE LAW OFFICES OF MARK A. WEISBART 12770 Coit Road, Suite 541 Dallas, TX 75251 Tel: (972) 628-3694 Fax: (972) 628-3687 E-mail: weisbartm@earthlink.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company?s list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/txeb12-40512.pdf The petition was signed by John W. Beakley, president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Food Service Holdings Ltd 12-40510 03/01/12 ROUNDY'S SUPERMARKETS: Moody's Affirms B1 Rating on 1st Lien Debt ----------------------------------------------------------------- Moody's Investors Service affirmed the B1 rating of Roundy's Supermarkets Inc.'s new $125 million first lien revolving credit facility and new $675 million first lien term loan following the company's IPO. Proceeds from the new credit facilities and IPO were used to refinance and partially repay existing debt. Additionally, Moody's affirmed the company's B2 corporate family rating, lowered the probability of default rating to B3 and changed the outlook to stable from negative. All other ratings were withdrawn. Roundy's probability of default rating was lowered to B3 as a result of the change in the company's capital structure and is consistent with Moody's Loss Given Default methodology for an all first lien debt structure. The improved liquidity resulted in the stabilization of the outlook. "The refinancing resolves the pending debt maturities and improves liquidity and financial flexibility," Moody's Senior Analyst Mickey Chadha stated. Ratings Rationale The company's B2 corporate family rating reflects its high leverage, small size, geographic concentration, and financial policies skewed towards shareholder returns. Additional rating factors include Roundy's good regional presence, relatively stable operating performance in a stressed operating environment and good liquidity. The following ratings are affirmed: - Corporate Family Rating at B2 - New $125 million First Lien Revolving Credit Facility expiring February 2017 at B1 (LGD 2, 26%). - New $675 million First Lien Term Loan maturing February 2019 at B1 (LGD 2, 26%). The following ratings are downgraded: - Probability of Default Rating at B3 The following ratings are withdrawn: - $95 million First Lien Revolving Credit Facility expiring 2012 at B1 ( LGD 3, 37%) - $634 million First Lien Term Loan B maturing 2013 at B1 (LGD 3, 37%) - $150 million Second Lien Term Loan maturing 2016 rated Caa1 (LGD 5,77%). The stable outlook reflects Moody's expectation that liquidity will remain good, credit metrics will not deteriorate and financial policies will remain benign. The outlook also incorporates an expectation of a smooth execution of the company's expansion plans in Chicago. Ratings could be upgraded if the company demonstrates consistent positive same store sales growth, good liquidity and no deterioration in operating margins. Quantitatively ratings could be upgraded if debt/EBITDA is sustained below 5.25 times and EBITA to interest is sustained above 2.0 times. Ratings could be downgraded if operating performance deteriorates such that same store sales or operating margins demonstrate a declining trend or if liquidity deteriorates. Rating could also be downgraded if financial policies result in deterioration of cash flow or credit metrics. Quantitatively ratings could be downgraded if debt/EBITDA is sustained above 6.0 times or EBITA/interest is sustained below 1.5 times. The principal methodology used in rating Roundy's Supermarkets Inc was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Roundy's Supermarkets Inc., headquartered in Milwaukee, Wisconsin, owns and operates 159 retail grocery stores in Wisconsin, Illinois and Minnesota primarily under the Pick 'n' Save, Copps, Mariano's Fresh Market, Rainbow and Metro Market banners. In addition to its retail stores, Roundy's acts as supplier to one independent retailer in the Midwestern U.S. Annual revenues are about $3.8 billion for the fiscal year 2011. The company is majority owned by Willis Stein funds. SAND SPRING: Shareholders Group Wants Official Equity Committee --------------------------------------------------------------- Sand Spring Capital III, LLC's Ad Hoc Committee of Equity Security Holders asks the U.S. Bankruptcy Court to order the U.S. Trustee to appoint an official committee of security holders to ensure that all equity holders' interest are adequately represented in the Chapter 11 cases. The Ad Hoc Committee is represented by: Stuart M. Brown, Esq. R. Craig Martin, Esq. DLA PIPER LLP 919 North Market Street, Suite 1500 Wilmington, DE 19801 Tel: 302-468-5700 Fax: 302-394-2341 E-mail: stuart.brown@dlapiper.com craig.martin@dlapiper.com Sand Spring Capital III, LLC, filed a Chapter 11 petition (Bankr. D. Del. Case No. 11-13393) on Oct. 25, 2011 in Delaware. Affiliates, Sand Spring Capital III, LLC, CA Core Fixed Income Fund, LLC, CA Core Fixed Income Offshore Fund, Ltd., CA High Yield Fund, LLC, CA High Yield Offshore Fund, Ltd., CA Strategic Equity Fund, LLC, CA Strategic Equity Offshore Fund, Ltd., Sand Spring Capital III, Ltd., Sand Spring Capital III Master Fund, LLC, sought Chapter 11 protection on the same day. Sand Spring Capital III LLC disclosed $4,882,373 in assets and $4,140 in liabilities. CA Core Fixed Income Fund LLC disclosed $36,176,682 in assets and $48,244 in liabilities. CA Core Fixed Income Offshore Fund Ltd. disclosed $6,900,726 in assets and $10,393 in liabilities. CA High Yield Fund LLC disclosed $5,626,644 in assets and $11,568 in liabilities. CA High Yield Offshore Fund, Ltd. disclosed $10,840,032 in assets and $22,785 in liabilities. CA Strategic Equity Fund LLC scheduled $2,013,461 in assets and $0 debt. CA Strategic Equity Offshore Fund Ltd. disclosed $2,285,492 in assets and $0 debts. Sand Spring Capital III Ltd. disclosed $2,214,099 in assets and $1,820 in debts. Sand Spring Capital III Master Fund LLC disclosed $7,096,473 in assets and $0 in debts. SENSIVIDA MEDICAL: Sidney Braginsky Named to Board of Directors --------------------------------------------------------------- Sidney Braginsky joined the Board of Directors of Sensivida Medical Technologies, Inc., filling a vacancy on the Board. Since July 2000 Mr. Braginsky has been the President, Chief Executive Officer and Chairman of the Board of Directors of Atropos Technology, LLC. Mr. Braginsky is the Chairman of the Board and CEO of Digilab and Chairman of the Board and Managing Director of Double D Venture Fund. From October 1994 to December 1999 Mr. Braginsky served as President of Olympus America, Inc., responsible for the growth of that company's optical products, including cameras and scientific instruments, such as microscopes, endoscopes and chemistry analyzers. In addition, Mr. Braginsky currently serves on the Board of Directors of EndoRobotics, Endogene, Waveline Medical, SolidLook Medical and Invendo Medical GMBH. Mr. Braginsky also is actively involved with local educational institutions, serving as Chairman of the Board of the City University of New York, Robert Chambers Laboratory, Chairman of the Board of Advisors for Long Island University College of Management, Director on the Industrial Advisory Board of the Center for Technology Education at Hofstra University, Director of the Board of Library Overseers for the Jewish Theological Seminary, Member of the National Visiting Committee for the Long Island Consortium for Interconnected Learning NSF, Advisory Board Member to Stony Brook School of Engineering and Trustee of Long Island University. Mr. Braginsky also serves on the Board of Advisors of Tornado Medical and the Lymphatic Research Foundation. Mr. Braginsky received his Bachelor of Science degree from Queens College, City University of New York. About SensiVida Medical West Henrietta, New York-based Sensivida Medical Technologies, Inc., had operated in one business segment encompassing in the design and development of medical diagnostic instruments that detect cancer in vivo in humans by using light to excite the molecules contained in tissue and measuring the differences in the resulting natural fluorescence between cancerous and normal tissue. Effective March 3, 2009, with the merger of SensiVida Medical Systems, Inc., into the Company's wholly-owned subsidiary BioScopix, Inc., the Company's technology now focuses on the automation of analysis and data acquisition for allergy testing, glucose monitoring, blood coagulation testing, new tuberculosis testing, and cholesterol monitoring. he Company's balance sheet at May 31, 2011, showed $2.42 million in total assets, $3.87 million in total liabilities, all current, and a stockholders' deficit of $1.45 million. As reported in the TCR on June 20, 2011, Morison Cogen LLP, in Bala Cynwyd, Pennsylvania, expressed substantial doubt about Sensivida Medical Technologies' ability to continue as a going concern, following the Company's Feb. 28, 2011 results. The independent auditors noted that the Company has no revenues, incurred significant losses from operations, has negative working capital and an accumulated deficit. The Company delayed its Quarterly Report on Form 10-Q for the period ended Aug. 31, 2011, because of limited staff and resources. SL GREEN: Fitch Affirms Issuer Default Rating at 'BB+' ------------------------------------------------------ Fitch Ratings has affirmed the Issuer Default Rating (IDR) of SL Green Realty Corp. (NYSE: SLG) and its subsidiaries SL Green Operating Partnership, L.P., and Reckson Operating Partnership, L.P. The affirmations of SLG's and Reckson's ratings reflect the company's credit strengths, including its manageable lease maturity and debt expiration schedules, granular tenant base, good contingent liquidity in the form of unencumbered assets and the company's maintenance of leverage appropriate for the rating category. These positive rating elements are balanced by a weak fixed charge coverage ratio and broader concerns regarding the midtown Manhattan leasing environment, which remains somewhat dependent on the growth of large financial institutions and supporting industries such as law and accounting firms. SLG's leverage ratio, while high, remains consistent with a 'BB+' IDR given the good location and quality of the company's assets. The company's net debt to recurring operating EBITDA ratio was 8.8 times (x) as of Dec. 31, 2011, down from 9.2x as of Dec. 31, 2010, but up from 8.4x as of Dec. 31, 2009. Fitch defines leverage as net debt divided by recurring operating EBITDA. Leverage is negatively affected by the company's acquisition of some assets with vacancy, with the strategy of incurring capital expenditures to improve the quality of the space in order to generate higher rents in the future. When taking into account cash flows projected via the lease-up of this space, leverage would decline below 8.0x. SLG's fixed-charge coverage ratio was 1.4x for the year ended Dec. 31, 2011, down from 1.5x and 1.8x in 2010 and 2009, respectively. Coverage declined primarily due to the 2010 acquisition of certain land interests which increased straight-line rents, combined with recurring capital expenditure costs related to recently signed leases. Fitch expects coverage to improve from 2011 levels as free rents decline, the company benefits from net operating income (NOI) from recent acquisitions and recurring capital expenditure costs level off. Fitch defines fixed charge coverage as recurring operating EBITDA less recurring capital expenditures and straight- line rents, divided by interest incurred and preferred stock distributions. The company's portfolio benefits from tenant diversification with the top 10 tenants representing only 31% of annual base rent, and the largest tenant Citigroup, N.A. (IDR of 'A' with a Stable Outlook by Fitch) comprising 7.2% of SLG's share of annual base rent. Pro forma for the company's announced November 2011 sale of One Court Square, Viacom Inc. (IDR of 'BBB+' with a Stable Outlook by Fitch) would become the company's largest tenant. The company has a manageable lease expiration schedule with only 41% of consolidated Manhattan rents expiring over the next five years. While approximately 66% of its consolidated suburban property rents expire over the next five years, this suburban portfolio represents a limited portion of the company's total assets and only 10% of 2011 cash rent. Further supporting the ratings is the company's manageable debt maturity schedule. Over the next five years, 2016 is the largest year of debt maturities with 22% of pro rata debt expiring, with no other year greater than 11%. The ratings are further supported by SLG's unencumbered asset coverage of unsecured debt, which gives the company financial flexibility as a source of contingent liquidity. Consolidated unencumbered asset coverage of net unsecured debt (calculated as annualized fourth quarter 2011 unencumbered property net operating income divided by a 7% capitalization rate) results in coverage of 1.7x. This ratio is strong, particularly given that Midtown Manhattan assets are highly sought after by secured lenders and foreign investors, resulting in stronger contingent liquidity relative to many asset classes. The ratings also point to the strength of SLG's management team, and its ability to maintain occupancy and liquidity throughout the downturn. Further, the company's high degree of knowledge of the midtown Manhattan office market is a competitive advantage with regard to acquisition and structured finance opportunities. In addition, the company's ratios under its unsecured credit facilities' financial covenants do not hinder the its financial flexibility. Offsetting these strengths are Fitch's concerns regarding the uncertain midtown Manhattan leasing environment. While the New York City leasing environment has strengthened over the last year, SLG continues to incur significant costs in the form of tenant improvements, leasing commissions and free-rent incentives as tenant inducements, which continue to place pressure on the company's fixed charge coverage. In addition, a downturn in space demands from the financial services industry, which accounts for 39% of SLG's share of base rental revenue, may result in reduced cash flows or values of SLG's properties. The one-notch differential between SLG's IDR and junior subordinated notes rating is based on the noteholders' ability to demand full repayment of unpaid principal and interest in the event of default, which generally consists of missed interest (after allowable deferral periods) or principal payment at maturity. These notes have no covenants or cross-default provisions relative to SLG's corporate debt and are explicitly stated to be subordinate to such indebtedness. The two-notch differential between SLG's IDR and preferred stock rating is consistent with Fitch's hybrids criteria for corporate entities with an IDR of 'BB+'. Based on Fitch Research on 'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis', these preferred securities are deeply subordinated and have loss absorption elements that would likely result in poor recoveries in the event of a corporate default. The Stable Rating Outlook is driven in part by SLG's good liquidity profile. For the period Jan. 1, 2012 to Dec. 31, 2013, the company's sources of liquidity (cash, availability under the company's unsecured revolving credit facility, and Fitch's expectation of retained cash flows from operating activities after dividends and distributions) covered uses of liquidity (pro rata debt maturities and Fitch's expectation of recurring capital expenditures) by 1.2x. This stressed analysis assumes that no additional capital is raised to repay obligations and SLG has demonstrated good access to a variety of capital sources over time. If maturing secured debt were refinanced at a rate of 80%, liquidity coverage would improve to 2.4x. The company's liquidity is also strengthened by its conservative common dividend policy, which enables it to retain substantial operating cash flow. The following factors may result in positive momentum in the ratings and/or Rating Outlook: -- Net debt to recurring operating EBITDA sustaining below 7.5x for several quarters (leverage was 8.8x as of Dec. 31, 2011); -- Fixed charge coverage sustaining above 1.8x for several quarters (coverage was 1.4x for the 12 months ended Dec. 31, 2011). The following factors may result in negative momentum in the ratings and/or Rating Outlook: -- Leverage sustaining above 8.5x for several quarters; -- Fixed charge coverage sustaining below 1.5x for several quarters; -- A liquidity shortfall (base case liquidity coverage was 1.2x for the period Jan. 1, 2012 to Dec. 31, 2013). Fitch has affirmed the following ratings: SL Green Realty Corp. -- IDR at 'BB+'; -- Perpetual preferred stock at 'BB-'. SL Green Operating Partnership, L.P. -- IDR at 'BB+'; -- Unsecured revolving credit facility at 'BB+'; -- Exchangeable senior notes at 'BB+'; -- Junior subordinated notes at 'BB'. Reckson Operating Partnership, L.P. -- IDR at 'BB+'; -- Senior unsecured notes at 'BB+'; -- Exchangeable senior debentures at 'BB+'. The Rating Outlook is Stable. STANFORD FINANCIAL: Founder Guilty of $7-Bil. Ponzi Scheme ---------------------------------------------------------- A federal jury in Houston, Texas, on Tuesday convicted Robert Allen Stanford, the former Board of Directors Chairman of Stanford International Bank, for orchestrating a 20-year investment fraud scheme in which he misappropriated $7 billion from SIB to finance his personal businesses. Following a six-week trial before U.S. District Judge David Hittner, and approximately three days of deliberation, the jury found Mr. Stanford guilty on 13 of 14 counts in the indictment. Mr. Stanford, 61, was convicted of one count of conspiracy to commit wire and mail fraud, four counts of wire fraud, five counts of mail fraud, one count of conspiracy to obstruct a U.S. Securities and Exchange Commission investigation, one count of obstruction of an SEC investigation and one count of conspiracy to commit money laundering. The jury found Mr. Stanford not guilty on one count of wire fraud. The Wall Street Journal says the jury comprised of eight men and four women. At sentencing, Mr. Stanford faces a maximum prison sentence of 20 years for the count of conspiracy to commit wire and mail fraud, each count of wire and mail fraud, and the count of conspiracy to commit money laundering, and five years for the count of conspiracy to obstruct an SEC investigation and the count of obstruction of an SEC investigation. The guilty verdict was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department's Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; FBI Assistant Director Kevin Perkins of the Criminal Investigative Division; Assistant Secretary of Labor for the Employee Benefits Security Administration Phyllis C. Borzi; Chief Postal Inspector Guy J. Cottrell; Special Agent in Charge Lucy Cruz of the Internal Revenue Service-Criminal Investigations (IRS-CI). The investigation was conducted by the FBI's Houston Field Office, the U.S. Postal Inspection Service, the IRS-CI and the U.S. Department of Labor, Employee Benefits Security Administration. The case was prosecuted by Deputy Chief William Stellmach of the Criminal Division's Fraud Section, Assistant U.S. Attorney Gregg Costa of the Southern District of Texas and Trial Attorney Andrew Warren of the Criminal Division's Fraud Section. Daniel Gilbert and Tom Fowler, writing for The Wall Street Journal, report that Mr. Stanford faces a maximum of 230 years in prison. WSJ relates Mr. Stanford's attorneys, while still under a court order to not discuss the case, told reporters they would appeal but didn't specify on what grounds. Prosecutors declined to comment. According to WSJ, the end of Mr. Stanford's criminal case, which dragged on for nearly three years, could allow investors to attempt to recover hundreds of millions of dollars from his accounts and the assets of Stanford Financial Group. A judge has placed on hold the civil suit brought against him by the Securities and Exchange Commission while the criminal case is pending. An appeal of the verdict, however, may delay investors' recovery efforts, the report notes. WSJ also notes that after the verdict, jurors began to hear the case on the Justice Department's efforts to seize funds in bank accounts controlled by Mr. Stanford, estimated to hold more than $300 million. The SEC, in a separate civil action, could ask a judge for permission to move forward with its case if it believes there are additional assets to recover. WSJ recounts Mr. Stanford has been jailed since June 2009 because he was judged to be a flight risk. In prison, Mr. Stanford was beaten in September 2009 by a fellow inmate. Mr. Stanford complained of memory loss from the head trauma, and a court found that he was so addicted to his prescribed painkillers that he wasn't competent to stand trial. In December 2011, a judge found him competent and the trial commenced in January. WSJ also recounts that in 2008, before his downfall, Mr. Stanford was the 205th richest American with a net worth of $2.2 billion, according to Forbes magazine. His holdings in Antigua, where he held a dual citizenship, included banks, airlines and the country's biggest newspaper. The criminal case is U.S. v. Stanford, H-09-342, U.S. District Court, Southern District of Texas (Houston). The civil case is SEC v. Stanford International Bank, 3:09-cv-00298-N, U.S. District Court, Northern District of Texas (Dallas). About Stanford International Bank Domiciled in Antigua, Stanford International Bank Limited -- http://www.stanfordinternationalbank.com/-- is a member of Stanford Private Wealth Management, a global financial services network with US$51 billion in deposits and assets under management or advisement. Stanford Private Wealth Management serves more than 70,000 clients in 140 countries. On Feb. 16, 2009, the United States District Court for the Northern District of Texas, Dallas Division, signed an order appointing Ralph Janvey as receiver for all the assets and records of Stanford International Bank, Ltd., Stanford Group Company, Stanford Capital Management, LLC, Robert Allen Stanford, James M. Davis and Laura Pendergest-Holt and of all entities they own or control. The February 16 order, as amended March 12, 2009, directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate. STOCKTON, CALIFORNIA: S&P Lowers Issuer Credit Rating to 'SD' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its issuer credit rating (ICR) to 'SD' (selective default) from 'CC' on Stockton, Calif. In addition, Standard & Poor's kept its 'CC' issue ratings on certain series of appropriation-backed obligations and pension obligation bonds of the city and the Stockton Public Financing Authority or Stockton Redevelopment Agency on CreditWatch with negative implications, where they were placed on Feb. 24, 2012. "The lowering of the ICR reflects our view of the city's nonpayment on March 1 of its lease payments that were to back certain lease revenue bonds," said Standard & Poor's credit analyst Chris Morgan. On March 1, 2012, debt service amounts were due on four series for which the city is obligor: * Series 2004 lease revenue bonds (parking and capital projects), * Series 2007A and 2007B lease revenue bonds, and * Series 2009A lease revenue bonds. "The CreditWatch listings with negative implications on the issue ratings reflect our view of the city's concurrent decision to commence proceedings under California Assembly Bill 506, which authorizes a local government to file for bankruptcy protection under Chapter 9 of the federal Bankruptcy Code after a neutral evaluation process that involves confidential negotiations with creditors, such as debtholders and employees," S&P said. TBS INTERNATIONAL: AlixPartners LLP OK'd as Financial Advisors -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized TBS International plc, et al., to employ AlixPartners, LLP as financial advisors. AlixPartners is expected to, among other things: -- evaluate the feasibility of extending age of owned fleet beyond 30 years; -- review operations cost components and evaluating impact on financial projections; and -- assist the Debtors in developing and executing a communications strategy covering all key constituents, including customers, suppliers, employees, creditors and the media. The Debtors and AlixPartners intend that all of the services provided will be appropriately directed by the Debtors so as to avoid duplicative efforts among the other professionals, including the Debtors' investment banker, Lazard Freres & Co., retained in the Chapter 11 cases. The hourly rates of AlixPartners' personnel are: Managing Directors $815 ? $970 Directors $620 ? $760 Vice Presidents $455 ? $555 Associates $305 ? $405 Analysts $270 ? $300 Paraprofessionals $205 ? $225 Notwithstanding the provisions of the Engagement Letter, AlixPartners will not seek an administrative fee equal to 2% of the fees to cover other indirect administrative costs as postage, courier, routine copying, telephone, messenger and facsimile charges. To the best of the Debtors' is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About TBS International TBS International plc, TBS Shipping Services Inc. and its various subsidiaries and affiliates -- http://www.tbsship.com/-- filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-22224) on Feb. 6, 2012. TBS provides ocean transportation services that offer worldwide shipping solutions to a diverse client base of industrial shippers in more than 20 countries to over 300 customers. Through a 41-vessel fleet of multipurpose tweendeckers and handysize and handymax dry bulk carriers, TBS, in conjunction with a network of affiliated service companies, offers (a) liner, parcel and bulk transportation services and (b) time charter services. TBS's global headquarters, located in Yonkers, New York, oversees all major corporate and operational decision-making, including in connection with drydocking of vessels and other capital expenditures, fleet positioning, and cargo arrangements with third parties, including major vendors and customers. As of the Petition Date, TBS has roughly 140 employees worldwide, the vast majority of whom work in the corporate headquarters. For the year ended Dec. 31, 2011, TBS's consolidated net revenue was roughly $369.7 million. Its consolidated debt is roughly $220 million. TBS filed together with the petition its Joint Prepackaged Plan of Reorganization dated Jan. 31, 2012. As of the Petition Date, the Debtors have received overwhelming acceptance of the Plan from all voting classes. If confirmed, the Plan will implement an agreed restructuring of the Debtors' obligations to their prepetition secured lenders, provide for the payment of all general unsecured claims in full, and effect the cancellation of existing equity interests at the parent holding company levels and the issuance of new equity interests to certain of the Debtors' lenders and key management. To implement this restructuring, the Debtors have obtained commitments to provide $42.8 million in debtor-in- possession financing and an equivalent amount of exit financing. The Debtors are requesting a hearing to confirm the Plan within 35 days of the Petition Date. Judge Robert D. Drain presides over the case. Michael A. Rosenthal, Esq., and Matthew K. Kelsey, Esq., at Gibson, Dunn & Crutcher LLP, serve as the Debtors' counsel. The Debtors' investment banker is Lazard Freres & Co. LLC, the financial advisor is AlixPartners LLP. Cardillo & Corbett serves as special maritime and corporate counsel, Garden City Group serves as administrative agent and Gibson, Dunn & Crutcher as counsel. The petition was signed by Ferdinand V. Lepere, executive vice president and chief financial officer. TBS disclosed US$143 million in assets and US$220 million in debt. No official committee has yet been appointed by the Office of the United States Trustee. TBS INTERNATIONAL: Has Until April 6 to File Schedules ------------------------------------------------------ The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York extended until April 6, 2012, TBS International plc, et al.'s time to file their schedules and statements. TBS International plc, TBS Shipping Services Inc. and its various subsidiaries and affiliates -- http://www.tbsship.com/-- filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-22224) on Feb. 6, 2012. TBS provides ocean transportation services that offer worldwide shipping solutions to a diverse client base of industrial shippers in more than 20 countries to over 300 customers. Through a 41-vessel fleet of multipurpose tweendeckers and handysize and handymax dry bulk carriers, TBS, in conjunction with a network of affiliated service companies, offers (a) liner, parcel and bulk transportation services and (b) time charter services. TBS's global headquarters, located in Yonkers, New York, oversees all major corporate and operational decision-making, including in connection with drydocking of vessels and other capital expenditures, fleet positioning, and cargo arrangements with third parties, including major vendors and customers. As of the Petition Date, TBS has roughly 140 employees worldwide, the vast majority of whom work in the corporate headquarters. For the year ended Dec. 31, 2011, TBS's consolidated net revenue was roughly $369.7 million. Its consolidated debt is roughly $220 million. TBS filed together with the petition its Joint Prepackaged Plan of Reorganization dated Jan. 31, 2012. As of the Petition Date, the Debtors have received overwhelming acceptance of the Plan from all voting classes. If confirmed, the Plan will implement an agreed restructuring of the Debtors' obligations to their prepetition secured lenders, provide for the payment of all general unsecured claims in full, and effect the cancellation of existing equity interests at the parent holding company levels and the issuance of new equity interests to certain of the Debtors' lenders and key management. To implement this restructuring, the Debtors have obtained commitments to provide $42.8 million in debtor-in- possession financing and an equivalent amount of exit financing. The Debtors are requesting a hearing to confirm the Plan within 35 days of the Petition Date. Judge Robert D. Drain presides over the case. Michael A. Rosenthal, Esq., and Matthew K. Kelsey, Esq., at Gibson, Dunn & Crutcher LLP, serve as the Debtors' counsel. The Debtors' investment banker is Lazard Freres & Co. LLC, the financial advisor is AlixPartners LLP. Cardillo & Corbett serves as special maritime and corporate counsel, Garden City Group serves as administrative agent and Gibson, Dunn & Crutcher as counsel. The petition was signed by Ferdinand V. Lepere, executive vice president and chief financial officer. TBS disclosed US$143 million in assets and US$220 million in debt. TBS INTERNATIONAL: Taps Lazard Freres as Investment Banker ---------------------------------------------------------- TBS International plc, et al., ask the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Lazard Fr�res & Co. LLC as investment banker. Lazard will, among other things: -- assist in the determination of a range of values for Debtors on a going concern basis; -- advise the Debtors on tactics and strategies for negotiating with stakeholders; and -- render financial advice to the Debtors and participating in meetings or negotiations with stakeholders or rating agencies or other appropriate parties in connection with any restructuring. The Debtors intend that the services of Lazard will complement the services of any other professional retained in these Chapter 11 cases. Lazard will be paid: a) a monthly fee of $150,000 in cash; b) a fee equal to $2,600,000 payable upon consummation of a restructuring; c) a fee in connection with a sale of either (i) all or a majority of the Debtors assets, or (ii) less than a majority of the Debtors' assets, will be based on a schedule related to the aggregate consideration paid or the restructuring fee; d) an additional cash fee will be payable upon the closing of a financing transaction; and e) for the avoidance of any doubt, more than one fee may be payable pursuant to each of clauses (b), (c), and (d). To the best of the Debtors' knowledge, Lazard is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About TBS International TBS International plc, TBS Shipping Services Inc. and its various subsidiaries and affiliates -- http://www.tbsship.com/-- filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-22224) on Feb. 6, 2012. TBS provides ocean transportation services that offer worldwide shipping solutions to a diverse client base of industrial shippers in more than 20 countries to over 300 customers. Through a 41-vessel fleet of multipurpose tweendeckers and handysize and handymax dry bulk carriers, TBS, in conjunction with a network of affiliated service companies, offers (a) liner, parcel and bulk transportation services and (b) time charter services. TBS's global headquarters, located in Yonkers, New York, oversees all major corporate and operational decision-making, including in connection with drydocking of vessels and other capital expenditures, fleet positioning, and cargo arrangements with third parties, including major vendors and customers. As of the Petition Date, TBS has roughly 140 employees worldwide, the vast majority of whom work in the corporate headquarters. For the year ended Dec. 31, 2011, TBS's consolidated net revenue was roughly $369.7 million. Its consolidated debt is roughly $220 million. TBS filed together with the petition its Joint Prepackaged Plan of Reorganization dated Jan. 31, 2012. As of the Petition Date, the Debtors have received overwhelming acceptance of the Plan from all voting classes. If confirmed, the Plan will implement an agreed restructuring of the Debtors' obligations to their prepetition secured lenders, provide for the payment of all general unsecured claims in full, and effect the cancellation of existing equity interests at the parent holding company levels and the issuance of new equity interests to certain of the Debtors' lenders and key management. To implement this restructuring, the Debtors have obtained commitments to provide $42.8 million in debtor-in- possession financing and an equivalent amount of exit financing. The Debtors are requesting a hearing to confirm the Plan within 35 days of the Petition Date. Judge Robert D. Drain presides over the case. Michael A. Rosenthal, Esq., and Matthew K. Kelsey, Esq., at Gibson, Dunn & Crutcher LLP, serve as the Debtors' counsel. The Debtors' investment banker is Lazard Freres & Co. LLC, the financial advisor is AlixPartners LLP. Cardillo & Corbett serves as special maritime and corporate counsel, Garden City Group serves as administrative agent and Gibson, Dunn & Crutcher as counsel. The petition was signed by Ferdinand V. Lepere, executive vice president and chief financial officer. TBS disclosed US$143 million in assets and US$220 million in debt. No official committee has yet been appointed by the Office of the United States Trustee. TBS INTERNATIONAL: Taps Cardillo & Corbett as Corporate Counsel --------------------------------------------------------------- TBS International plc, et al., ask the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Cardillo & Corbett as special maritime and corporate counsel. Cardillo & Corbett will, among other things: -- provide advice to the Debtors with respect to their rights and duties under the general maritime law and under maritime contracts, including marine insurance contracts, entered into in connection with the operation of the fleet of ocean going vessels owned by the Debtors; -- negotiate with creditors of the Debtors claiming maritime liens against the fleet of vessels owned by them and participating in negotiations with respect to financing a plan of reorganization; and -- prepare on the Debtors' behalf necessary motions, answers, replies, discovery requests forms of orders, reports and other pleadings and legal documents. The Debtors and Cardillo & Corbett intend that all of the services provided will be appropriately directed by the Debtors so as to avoid duplicative efforts among the other professionals retained in the Chapter 11 cases. Cardillo & Corbett received an initial advance retainer on Feb. 3, 2012, in the amount of $75,000 from the Debtors. Prepetition, the Debtors paid Cardillo & Corbett a total of $61,109 incurred in providing services to the Debtors in connection with prepetition restructuring activities. The hourly rates of Cardillo & Corbett's personnel are: Partners $350 Paralegals $150 To the best of the Debtors' knowledge, Cardillo & Corbett is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About TBS International TBS International plc, TBS Shipping Services Inc. and its various subsidiaries and affiliates -- http://www.tbsship.com/-- filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-22224) on Feb. 6, 2012. TBS provides ocean transportation services that offer worldwide shipping solutions to a diverse client base of industrial shippers in more than 20 countries to over 300 customers. Through a 41-vessel fleet of multipurpose tweendeckers and handysize and handymax dry bulk carriers, TBS, in conjunction with a network of affiliated service companies, offers (a) liner, parcel and bulk transportation services and (b) time charter services. TBS's global headquarters, located in Yonkers, New York, oversees all major corporate and operational decision-making, including in connection with drydocking of vessels and other capital expenditures, fleet positioning, and cargo arrangements with third parties, including major vendors and customers. As of the Petition Date, TBS has roughly 140 employees worldwide, the vast majority of whom work in the corporate headquarters. For the year ended Dec. 31, 2011, TBS's consolidated net revenue was roughly $369.7 million. Its consolidated debt is roughly $220 million. TBS filed together with the petition its Joint Prepackaged Plan of Reorganization dated Jan. 31, 2012. As of the Petition Date, the Debtors have received overwhelming acceptance of the Plan from all voting classes. If confirmed, the Plan will implement an agreed restructuring of the Debtors' obligations to their prepetition secured lenders, provide for the payment of all general unsecured claims in full, and effect the cancellation of existing equity interests at the parent holding company levels and the issuance of new equity interests to certain of the Debtors' lenders and key management. To implement this restructuring, the Debtors have obtained commitments to provide $42.8 million in debtor-in- possession financing and an equivalent amount of exit financing. The Debtors are requesting a hearing to confirm the Plan within 35 days of the Petition Date. Judge Robert D. Drain presides over the case. Michael A. Rosenthal, Esq., and Matthew K. Kelsey, Esq., at Gibson, Dunn & Crutcher LLP, serve as the Debtors' counsel. The Debtors' investment banker is Lazard Freres & Co. LLC, the financial advisor is AlixPartners LLP. Cardillo & Corbett serves as special maritime and corporate counsel, Garden City Group serves as administrative agent and Gibson, Dunn & Crutcher as counsel. The petition was signed by Ferdinand V. Lepere, executive vice president and chief financial officer. TBS disclosed US$143 million in assets and US$220 million in debt. No official committee has yet been appointed by the Office of the United States Trustee. TECO ENERGY: Moody's Assigns '(P)Ba2' Domestic Currency Rating -------------------------------------------------------------- Moody's Investors Service's current ratings on TECO Energy, Inc. and its affiliates are: Senior Unsecured domestic currency rating of Baa3 Senior Unsec. Shelf domestic currency rating of (P)Baa3 Subordinate Shelf domestic currency rating of (P)Ba1 Pref. Shelf domestic currency rating of (P)Ba2 Preferred shelf -- PS2 domestic currency rating of (P)Ba2 Tampa Electric Company Senior Unsecured domestic currency rating of Baa1 Senior Unsecured Bank Credit Facility domestic currency rating of Baa1 LT Issuer Rating NA rating of Baa1 Senior Secured Shelf domestic currency rating of (P)A3 Senior Unsec. Shelf domestic currency rating of (P)Baa1 TECO Finance, Inc. BACKED Senior Unsecured domestic currency rating of Baa3 BACKED Senior Unsecured Bank Credit Facility domestic currency rating of Baa3 BACKED Senior Unsec. Shelf domestic currency rating of (P)Baa3 Ratings Rationale TECO's Baa3 senior unsecured rating is based on the solid credit quality of its principal subsidiary Tampa Electric and is notched to reflect the structural subordination of the significant amount of holding company debt. The rating also reflects the impact of TECO's non-regulated operations which are profitable and cash flow generating, but they are smaller and of a lower credit quality than the company's core Florida utility operations. Rating Outlook The stable outlook primarily reflects TECO's core regulated utility operations along with the unregulated businesses that provide riskier though still reasonably stable cash flows. The stable outlook also reflects the significant debt at the parent level and the company's continuing deleveraging over time. What Could Change the Rating - Up TECO's rating could be upgraded if there is a material reduction of parent company debt or an upgrade of Tampa Electric's ratings. What Could Change the Rating - Down TECO's rating could be downgraded if there is a material increase in parent company debt or deterioration in the performance of the non-utility investments leading to a sustained deterioration in credit metrics including CFO pre-WC interest coverage under 3.5x and CFO pre-WC to debt under 15%. Also, a downgrade could occur if Tampa Electric's credit ratings are downgraded. The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in August 2009. TEXAS WESLEYAN: Moody's Withdraws 'Ba2' Rating on Revenue Bonds --------------------------------------------------------------- Moody's Investors Service has withdrawn the Ba2 rating on Texas Wesleyan University's (TX) Revenue Bonds, Series 1997A which were issued through the Fort Worth Higher Education Finance Corporation. The rating withdrawal follows the redemption of these bonds. At this time, Texas Wesleyan University no longer maintains debt outstanding with a Moody's rating based on its own credit quality. THERMADYNE HOLDINGS: S&P Keeps 'B-' Rating on $100-Mil. Add-On -------------------------------------------------------------- Standard & Poor's Ratings Services said that St. Louis-based Thermadyne Holdings Corp.'s proposed add-on to the company's senior secured notes due 2017 is rated 'B-'. The recovery rating on the notes remains '5', reflecting our expectation for modest (10%-30%) recovery for lenders in the event of a default. Thermadyne will use the proceeds to pay its sponsors a dividend. "Although the completion of the add-on would reduce recovery prospects by increasing the aggregate amount of senior secured notes to $360 million, the outcome of our recovery analysis indicates that recovery prospects would remain in the 10%-30% range (albeit shifting down slightly from the high end of the range) synonymous with a '5' recovery rating. The add-on results in adjusted metrics that are in line with our current expectations, including debt to EBITDA of about 6x incorporating the remaining preferred stock that we treat as debt," S&P said. "The ratings on Thermayne reflect our view of the company's business risk profile as 'weak' and its financial risk profile as 'highly leveraged' based on our criteria. We believe it will maintain its leading positions in its markets as a niche participant in the competitive and cyclical global welding- equipment industry," S&P said. Ratings List Thermadyne Holdings Corp. Corporate credit rating B/Stable/-- Senior secured $360 mil. notes due 2017 B- Recovery rating 5 TOUSA INC: Seeks OK of Settlement of Transeastern Committee Action ------------------------------------------------------------------ BankruptcyData.com reports that TOUSA's conveying subsidiaries, their official committee of unsecured creditors and Monarch Alternative Capital (as investment advisor to Monarch Master Funding), JPMorgan and Bear Stearns filed with the U.S. Bankruptcy Court a motion for an order approving the partial settlement of the Transeastern Committee Action. The settlement agreement requires Monarch to make an immediate cash payment of $19.5 million to the conveying subsidiaries in partial settlement of the claims asserted against Monarch, JPMorgan, Bear Stearns and the Farallon entities in the Transeastern Committee Action. If a final order is entered in the against the senior Transeastern lenders awarding the committee damages in excess of $45 million, Monarch will make an additional payment of up to approximately $13 million. Monarch and the other settling Transeastern lenders will be released from their bonding obligations with respect to the Transeastern Committee Action and limit their potential liability solely in connection with the Transeastern Committee Action. In addition, the parties to the settlement agreement will exchange mutual releases with respect to the Transeastern Committee Action, other than with respect to the settlement payments and certain retained claims provided for under the settlement agreement. About Tousa Inc. Headquartered in Hollywood, Florida, TOUSA, Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008 (Bankr. S.D. Fla. Case No. 08-10928). Richard M. Cieri, Esq., M. Natasha Labovitz, Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP, in New York, N.Y.; and Paul S. Singerman, Esq., at Berger Singerman, in Miami, Fla., represent the Debtors in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It estimated assets and debts of $1 million to $10 million in its Chapter 11 petition. The official committee of unsecured creditors has filed a proposed chapter 11 liquidating plan for Tousa. However, the committee said that it no longer intends to pursue approval of its liquidation plan because of the pending appeal of its fraudulent transfer case in the U.S. Court of Appeals for the Eleventh Circuit. A district court in February 2011 held that the bankruptcy judge was wrong in ruling that lenders who were paid off received fraudulent transfers when Tousa gave liens on subsidiaries' properties to bail out and refinance a joint venture. Daniel H. Golden, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, N.Y., represent the creditors committee. Tousa's reorganization plan is on hold either temporarily or permanently pending appeal to the Court of Appeals from a ruling by a U.S. district judge in February reversing the bankruptcy judge. The district court held that the bankruptcy judge was wrong in ruling that other lenders who were paid off before bankruptcy received fraudulent transfers when Tousa gave liens on subsidiaries' properties to bail out and refinance a joint venture. The Tousa committee filed a Chapter 11 plan in July 2010 based on an assumption it would win the appeal. TRAILER BRIDGE: Hearing on Exclusivity Extensions Set for March 8 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida will convene a hearing on March 8, 2012, at 9:30 a.m., to consider Trailer Bridge, Inc.'s request for exclusivity extensions. The Debtor asked the Court to extend its exclusive periods to file and solicit acceptances for the proposed plan of reorganization until May 14, 2012, and July 17, respectively. The Debtor relates that the hearing to consider adequacy of the Disclosure Statement and confirmation of the Plan, amended as of Feb. 9, is scheduled for March 16, at 10:00 a.m. (Eastern Time). The Debtor files the motion out of an abundance of caution so that it may continue to explore options with its creditor constituency and preserve its exclusive right to file a plan and solicit votes in the unlikely event that its Plan is not confirmed on March 16, or if the confirmation hearing be adjourned to a later date. As reported in the Troubled Company Reporter on Feb. 16, 2012, the Plan provides that if creditors accept and the plan is technically proper, secured noteholders owed $86.3 million will receive a new secured note for $65 million plus some of the new stock, for a projected 75% recovery. Unsecured claims, excluding noteholders' deficiency claims, total $4.5 million to $6.5 million. Unsecured creditors are to split up $3.5 million cash. If they don't take home a 85% recovery in cash, they also receive some of the new stock and warrants. The projected recovery for unsecured creditors is 65% to 95%. If unsecured creditors accept the plan and receive 85% cash, existing shareholders will receive 15 cents for each old share, or some of the new stock. The reorganized company will be financed with a $31 million credit, to be used partly to make payments under the plan. About Trailer Bridge Headquartered in Jacksonville, Florida, Trailer Bridge, Inc. -- http://www.trailerbridge.com/-- provides integrated trucking and marine freight service to and from all points in the lower 48 states and Puerto Rico and Dominican Republic. This total transportation system utilizes its own trucks, drivers, trailers, containers and U.S. flag vessels to link the mainland with Puerto Rico via marine facilities in Jacksonville, San Juan and Puerto Plata. Trailer Bridge filed a voluntary Chapter 11 petition (Bankr. M.D. Fla. Case No. 11-08348) on Nov. 16, 2011, one day after its $82.5 million 9.25% Senior Secured Notes became due. Judge Jerry A. Funk presides over the case. Gardner F. Davis, Esq., at Foley & Lardner LLP, and DLA Piper LLP (US) serve as the Debtor's counsel. Global Hunter Securities LLC serves as the Debtor's investment banker. RAS Management Advisors LLC serves as the Debtor's financial advisor. Kurtzman Carson Consultants LLC serves as claims, noticing, and balloting agent. The Debtor disclosed $97,345,981 in assets, and $112,538,934 in liabilities. The petition was signed by Mark A. Tanner, co-chief executive officer. The Court will hold a combined hearing on the Plan and Disclosure Statement on March 16, 2012. The Plan, which was filed in January, proposes to give noteholders control of the company and provide some recovery for shareholders. On Dec. 6, 2011, the U.S. Trustee appointed the Official Committee of Unsecured Creditors in the Debtor's case. TRAILER BRIDGE: Wants Until June 13 to Assume or Reject Leases -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida will convene a hearing on March 8, 2012, at 9:30 a.m., to consider Trailer Bridge, Inc.'s request to extend the time to assume or reject unexpired leases of nonresidential real property. The Debtor requested that the Court extend until June 13, its time to assume or reject the leases. Absent the extension, the Debtor's lease decision period will expire March 15. The Debtor related that among other things, it is in the process of soliciting votes for the proposed Plan and the confirmation hearing is set for March 16. As part of the Plan confirmation process, the Debtor intends to seek to assume or assume and assign certain of the leases. About Trailer Bridge Headquartered in Jacksonville, Florida, Trailer Bridge, Inc. -- http://www.trailerbridge.com/-- provides integrated trucking and marine freight service to and from all points in the lower 48 states and Puerto Rico and Dominican Republic. This total transportation system utilizes its own trucks, drivers, trailers, containers and U.S. flag vessels to link the mainland with Puerto Rico via marine facilities in Jacksonville, San Juan and Puerto Plata. Trailer Bridge filed a voluntary Chapter 11 petition (Bankr. M.D. Fla. Case No. 11-08348) on Nov. 16, 2011, one day after its $82.5 million 9.25% Senior Secured Notes became due. Judge Jerry A. Funk presides over the case. Gardner F. Davis, Esq., at Foley & Lardner LLP, and DLA Piper LLP (US) serve as the Debtor's counsel. Global Hunter Securities LLC serves as the Debtor's investment banker. RAS Management Advisors LLC serves as the Debtor's financial advisor. Kurtzman Carson Consultants LLC serves as claims, noticing, and balloting agent. The Debtor disclosed $97,345,981 in assets, and $112,538,934 in liabilities. The petition was signed by Mark A. Tanner, co-chief executive officer. The Court will hold a combined hearing on the Plan and Disclosure Statement on March 16, 2012. The Plan, which was filed in January, proposes to give noteholders control of the company and provide some recovery for shareholders. On Dec. 6, 2011, the U.S. Trustee appointed the Official Committee of Unsecured Creditors in the Debtor's case. TRIBUNE CO: Seeks Further Extension of Rule 4(m) Deadline --------------------------------------------------------- The Official Committee of Unsecured Creditors asks the Court to further extend the time by which it must complete service pursuant to Rule 4(m) of the Federal Rules of Civil Procedure on defendants in the adversary proceeding captioned Tribune Company v. FitzSimons, et al, through and including July 2, 2012. The Creditors' Committee made the request before its March 1, 2012 deadline to complete service upon defendants in the FitzSimons Action. Adam G. Landis, Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, states that the current posture of the Debtors' bankruptcy cases presents circumstances that provide good cause for extending the deadline to serve the defendants. Under the DCL Plan, the Reorganized Debtors will ultimately succeed as plaintiffs to the Preference Complaints. The Reorganized Debtors will have ample reasons to carefully formulate an approach to the prosecution or settlement of the Preference Complaints, taking into consideration, among other things, that many of the Professional Defendants and Insider Defendants will have important material, ongoing relationships with the Reorganized Debtors, he notes. As of this time, all of the parties' efforts have been focused on the critical task at hand: confirming a plan of reorganization that will facilitate the Debtors' orderly exit from bankruptcy and possibly eliminate, reduce or moot the claims set forth in the Preference Complaints, Mr. Landis points out. Against this backdrop, immediate prosecution by the Creditors' Committee of the Preference Complaints against the Defendants could result in the needless expenditure of the estates' resources that may not ultimately result in additional recoveries for creditors, he asserts. Because prosecution of the Preference Complaints has been stayed, and is likely to be stayed further at least until the Court enters a confirmation order, the defendants will not be prejudiced by receiving service of this litigation after March 1, 2012, he assures the Court. The Court will consider the Debtors' request on March 22, 2012. Objections are due no later than March 15. 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: Files Objection to Marta Waller's Claims ---------------------------------------------------- Tribune Co. and its affiliates object to, and ask the Court to disallow, Claim Nos. 263 and 4411 asserted against Tribune Company by Marta Waller. Ms. Waller has failed to assert any facts or allegations that would support valid right to payment from Tribune under applicable non-bankruptcy law, much less that Ms. Walker is entitled to the $5,000,000 she seeks from Tribune, according to the Debtors. The Claims substantively duplicate a subsequently- filed proof of claim, assigned Claim No. 4412, asserted by Ms. Waller against Debtor KTLA, Inc., the Debtors point out. The Claims are based on a "wrongful termination" by KTLA of its contract with Persistence Pays, Inc., a corporation affiliated with Ms. Waller. Thus, any claim that may be asserted against Tribune or KTLA on account of Ms. Waller's contract with PPI should have properly been asserted by PPI, but PPI failed to timely file a claim, the Debtors tell 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: LA Times Objects to V. Comparsi's $1.56MM Claim ----------------------------------------------------------- Tribune Co. and its affiliates object to, and ask the Court to disallow, Claim No. 3589 asserting $1,560,043 filed against Los Angeles Times Communications LLC by Vincent Comparsi. Michael Bourgon, Vice President of Tribune Company, says neither LATC nor any of the other Debtors have any liability for the Claim because it Claim may be asserted only against the Tribune Company Cash Balance Pension Plan, which is not a Debtor. Mr. Bourgon tells the Court that the Claim has been received and denied by the Tribune Company Employee Benefits Committee, which has the exclusive authority to review benefits claims made against the Pension Plan and to make determinations regarding those claims, in accordance with the terms of the Pension Plan and the Employee Retirement Income Security Act of 1974. Mr. Comparsi has all available remedies under the Pension Plan and ERISA to appeal that denial in the appropriate non-bankruptcy forum, the Debtors assert. * * * The Court sustained the Debtors' objection to the Claim. The Claim is hereby disallowed and expunged. The Court entered the order 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) TRONOX INC: Anadarko Says Bankr. Court Can't Rule on Claims ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Anadarko Petroleum Corp. and Kerr-McGee Corp. trotted out another defense intended to blunt a trial scheduled for May in U.S. Bankruptcy Court in which Tronox Inc. is suing to recover environmental remediation costs it was given when spun off in March 2006 from Kerr-McGee. According to the report, in papers filed on March 2, Kerr-McGee and Anadarko latched on to a ruling from the U.S. Supreme Court last June and said they don't consent to allowing the bankruptcy judge to make a final ruling on fraudulent transfer claims. They contend that Stern v. Marshall from the Supreme Court means that bankruptcy judges don't have constitutional power to make final rulings on fraudulent transfer claims against creditors. In a ruling in January saying there is no cap on damages that Anadarko and Kerr-McGee might have to pay, the bankruptcy judge in New York said one method would come up with damages of as much as $15.5 billion. The lawsuit is Tronox Inc. v. Anadarko Petroleum Corp. (In re Tronox Inc.), 09-1198, Bankr. S.D.N.Y. (Manhattan). About Tronox Inc. Tronox Inc., aka New-Co Chemical, Inc., and 14 other affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09- 10156) on Jan. 13, 2009, before Hon. Allan L. Gropper. Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Colin M. Adams, Esq., at Kirkland & Ellis LLP in New York, represented the Debtors. The Debtors also tapped Togut, Segal & Segal LLP as conflicts counsel; Rothschild Inc. as investment bankers; Alvarez & Marsal North America LLC, as restructuring consultants; and Kurtzman Carson Consultants served as notice and claims agent. An official committee of unsecured creditors and an official committee of equity security holders were appointed in the cases. The Creditors Committee retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel. Until Sept. 30, 2008, Tronox was publicly traded on the New York Stock Exchange under the symbols TRX and TRX.B. Since then, Tronox has traded on the Over the Counter Bulletin Board under the symbols TROX.A.PK and TROX.B.PK. As of Dec. 31, 2008, Tronox had 19,107,367 outstanding shares of class A common stock and 22,889,431 outstanding shares of class B common stock. On Nov. 17, 2010, the Bankruptcy Court confirmed the Debtors' First Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code, dated Nov. 5, 2010. Under the Plan, Tronox reorganized around its existing operating businesses, including its facilities at Oklahoma City, Oklahoma; Hamilton, Mississippi; Henderson, Nevada; Botlek, The Netherlands and Kwinana, Australia. TUBE CITY: Moody's Raises Corp. Family Rating to 'Ba3' ------------------------------------------------------ Moody's Investors Service upgraded Tube City IMS Corporation's ("TCIMS") Corporate Family Rating ("CFR") and Probability of Default Rating to Ba3 from B1. In a related action, Moody's also assigned a B1 rating to the company's proposed $300 million term loan facility due 2019. Proceeds from the proposed facility along with some draw on a revolver and cash from the balance sheet are expected to be used to refinance the existing term loan due 2014 and a portion of subordinated notes due 2015. The rating outlook is stable. The following ratings/assessments have been affected: - Corporate Family Rating, Ba3 from B1; - Probability of Default Rating, Ba3 from B1; - Proposed Secured Term Loan due 2019 assigned B1 (LGD4, 63%) - Existing Senior Secured Letter of Credit Facility affirmed at Ba3 (LGD3, 42%)*; - Existing Senior Secured Term Loan affirmed at Ba3 (LGD3, 42%)*; and - Existing Senior Subordinate Notes affirmed at B3 (LGD 5, 79%)**. * Ratings will be withdrawn at the completion of the refinancing transaction. ** Ratings will be withdrawn if vast majority of the existing debt is repaid. SGL affirmed at SGL-2. The rating outlook is stable. Ratings Rationale The upgrade to Ba3 CFR recognizes the reduced leverage and interest expense, and TCIMS' favorable debt maturity profile pro- forma for the transaction. In addition, a material number of new contract wins in recent months that essentially improve the base- level EBITDA generation ability of TCIMS, and our expectation that steel industry capacity utilization would remain at least in 70- 75% range over the next year also support the upgrade. The company's ratings also recognize improved operating performance resulting from better steel industry fundamentals and capacity utilization rates, and increase in revolver size and borrowing base. Moody's expects that the new business wins and TCIMS' business model which allows for fixed fees, tiered pricing, and highly variable cost structure should continue to sustain strong operating results over near to intermediate term even if macro economic uncertainties pressure the capacity utilization rates somewhat from their current levels. However, the modest absolute size of the value added revenues portion (defined as sales minus raw materials cost), customer concentration, modest tangible assets, significant capital expenditure requirements, and company's dependence on volatile and highly cyclical domestic steel industry hinder upward rating momentum. Moody's rated the proposed $300 million senior secured term loan at B1, one notch below the CFR, due to the size of TCIMS' new asset-based loan (ABL) revolver (unrated), the amount of collateral the revolver will have first lien on, and the likely absence of material amount of junior debt post refinancing. In addition to its already existing first lien interest in accounts receivable and inventory, according to the terms of the proposed term loan credit agreement the revolver will obtain first lien security interest in equipment. We note that the $350 million ABL facility due 2016 was put in place in December 2011, and replaced a $165 million revolver. "The stable outlook reflects our expectation that the company to be able to sustain Debt/EBITDA less than 3x and EBIT/interest over 2.75x. The outlook also anticipates that TCIMS should generate sufficient operating cash flow to cover its capital expenditures over the next twelve months even in the case of a modest decline in utilization rates, and maintain a liquidity position sufficient to support its operations. Further rating upgrade is unlikely currently. However, we could consider a positive rating action with the expectation for improved customer and geographical diversity, materially bigger revenue base, and adherence to maintaining a relatively conservative leverage profile. We could consider a negative outlook or downgrade with expectation for a meaningful decline in site level margins, debt leverage above 3.5x, deterioration in liquidity, or sustained negative free cash flow," Moody's says. The principal methodology used in rating Tube City IMS Corporation 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. Tube City IMS Corporation, headquartered in Glassport, Pennsylvania, is a leading provider of on-site steel mill services such as material handling, scrap management, metal recovery and slag processing. For 2011, sales were approximately $2.7 billion, and revenues net of the material costs were approximately $549 million. UNISOURCE ENERGY: Moody's Assigns Ba1 Sr Domestic Currency Rating ----------------------------------------------------------------- Moody's Investors Service's current ratings on UniSource Energy Corporation and its affiliates are: Senior Secured Bank Credit Facility domestic currency rating of Ba1 Tucson Electric Power Company Senior Secured Bank Credit Facility domestic currency rating of Baa1 Senior Unsecured domestic currency rating of Baa3 LT Issuer Rating of Baa3 Senior Unsec. Shelf domestic currency rating of (P)Baa3 UNS Gas, Inc. BACKED Senior Unsecured domestic currency rating of Baa3 UNS Electric, Inc. Senior Unsecured Bank Credit Facility domestic currency rating of Baa3 BACKED Senior Unsecured domestic currency rating of Baa3 BACKED Senior Unsecured Bank Credit Facility domestic currency rating of Baa3 Ratings Rationale Based on factors in Moody's August 2009 Rating Methodology for Regulated Electric and Gas Utilities (the Methodology), UNS's Ba1 senior unsecured rating is driven by the challenging regulatory environment in Arizona, investment grade credit metrics and TEP's relatively concentrated service territory. The rating recognizes the structural subordination of the UNS credit facility compared to the Baa3-rated senior unsecured debt at UNS' utility subsidiaries. Rating Outlook UNS' stable outlook reflects Moody's expectation of continued stable cash flows at its utilities, reasonably timely recoveries of fuel and purchased power costs and credit metrics remaining strong for its rating and somewhat offsetting the still challenging regulatory environment in Arizona. The stable outlook assumes that planned capital expenditures will be financed in a manner that is consistent with UNS' current financial position. What Could Change the Rating - Up UNS' ratings is unlikely to be revised over the near-term. An upgrade is possible if the Arizona regulatory environment improves, such that the lag on investment recovery reduced significantly and Arizona would be considered in-line with the U.S. average for electric utilities. Upward pressure could also occur if there is an improvement in credit metrics, including cash flow to debt above 22% at TEP and 18% at UNS, on a sustainable basis. What Could Change the Rating - Down The ratings or outlook could be revised downward if UNS' utilities experience prolonged operational difficulties or increased costs, or their regulatory framework were to be less supportive, causing UNS' credit metric to fall below low-Baa levels, for example, if consolidated cash flow to debt fell below 13% for an extended period. The principal methodology used in these ratings was Regulated Electric and Gas Utilities published in August 2009. UNITED RETAIL: Versa-Led Auction Set for March 23 ------------------------------------------------- The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York authorized United Retail Group, Inc., et al., to sell substantially all of their assets in an auction led by Ornatus URG Acquisition LLC, an affiliate of Versa Capital Management, LLC; or liquidate their merchandise. The Debtors scheduled a March 23, 2012 auction for the assets. The preliminary bid deadline is set for March 15, at 5:00 p.m. Qualified bid deadline is set for March 20, at 5:00 p.m. The Court will consider the sale of the assets to Versa or the winning bidder at an April 3, hearing. Objections, if any, to any transactions contemplated by the APA or to entry of the sale order March 16, at 5:00 p.m. The auction objection deadline is set for March 28, at 5:00 p.m. March 22, at 11:00 p.m. is the deadline for filing a response to any timely-filed objection. In the event of any competing bids for the assets, resulting in Versa not being the successful Buyer, it will receive a breakup fee of $1,200,000 to be paid at the time of the closing of the sale with such third party buyer. As reported in the Troubled Company Reporter on Feb. 13, 2012, subject to higher and better offers at an auction, the Debtors asked the Court to approve the sale of substantially all of the assets of any or all of their stores, including related leases, on a going concern basis pursuant to the terms of an Asset Purchase Agreement, dated as of Feb. 1, 2012, by and among the Debtors, their parent Redcats USA Inc., and Ornatus URG Acquisition LLC, an affiliate of Versa Capital Management, LLC. The Versa deal is valued at roughly $83.5 million. The Debtors also propose to hand over to the Versa unit the right to act as liquidating agent in connection with the disposition of merchandise contained in any of the Stores that cannot be sold on a going concern basis pursuant to the terms substantially set forth in a Sales Agency Agreement, dated as of Feb. 1, 2012, by and among the Debtors, the Stalking Horse Bidder, and Versa. The Debtors will also assume and assign certain executory contracts and unexpired leases to the Buyer. The sale proceeds will be used first to repay the Debtors' obligations under the Wells Fargo DIP facility. Wells Fargo has a first-priority in substantially all of the Debtors' assets. Wells Fargo's consent to the Sale was conditioned on this right. Under the deal with Versa, the Buyer agrees to pay: (A) an amount in cash paid by the Buyer sufficient to satisfy: * an amount equal to the outstanding funded obligations under the Debtors' DIP Financing as of the Closing, not to exceed $15,000,000 (or, in the event that a letter of credit is drawn under the DIP Financing, $16,850,000) plus the amount, if any, by which administrative and priority claims are less than $11,100,000; * payment in cash as and when such amounts become due, on behalf of the Sellers, for wind-down costs in an amount not to exceed $2,000,000; * $500,000 to the holders (other than Redcats USA and its affiliates) of unsecured claims that are not the assumed liabilities); * payment to holders (other than RUSA and its affiliates) of administrative and priority claims as of the Closing in an amount not to exceed $11,100,000 plus, the amount, if any, by which the outstanding funded obligations under the DIP Financing are less than $15,000,000 (or, in the event that the Specified LC is drawn under the DIP Financing, $16,850,000); and * payment, on behalf of the Sellers, to Redcats Asia, Ltd. for trade payables in an amount not to exceed $2,200,000; (B) a credit bid of all or a portion of the secured obligations of the Sellers held by the Buyer; and (C) the assumption by the Buyer of certain liabilities. As a prerequisite to the Buyer's obligation to effect the Closing and pay the Purchase Price, Redcats USA will pay to the Buyer in cash at the Closing $20,000,000 multiplied by a fraction -- the numerator of which is the number of Leases designated by the Buyer to be Assumed Contracts as of the Closing Date, and the denominator of which is 300 (provided, however, that in the event that the Buyer has designated more than 300 Leases to be Assumed Contracts as of the Closing Date, the Initial Payment will be $20,000,000, and, for the avoidance of doubt, there will not be any Subsequent Payment -- to fund the Buyer's payment obligations under the asset purchase agreement and post-Closing working capital for the Business, such payment being made in consideration of the Buyer's plan to continue to operate the Business as a going concern. The Debtors are obligated to pay the Buyer a $1.2 million Break-Up Fee in the event a sale is closed with a rival bidder. The deal may be terminated if, among other things, a Sale Order does not become a Final Order within 60 days after the entry of the Bidding Procedures Order. Wells Fargo's Objection Wells Fargo Bank, National Association, as agent to the DIP lenders, objected to the Debtors' motion to approve bidding procedures. According to the Wells Fargo, under the terms of the $40 million senior secured revolving credit facility, it would violate the DIP loan documents and constitute an event of default, if the Court entered an order which, among other things, permitted any "break up fee to have administrative priority claim status equal to the superpriority claim status granted to Wells Fargo under the DIP order, unless the break up fee was payable from the proceeds of a sale transaction that would be utilized to pay in full at closing all DIP obligations owing under the DIP loan documents. About United Retail Group United Retail Group Inc., owner of the Avenue brand of women's fashion apparel and a subsidiary of Redcats USA, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Feb. 1, 2012, as it seeks to sell the business to Versa Capital Management for $83.5 million, subject to higher and better offers. The Company's legal advisor is Kirkland & Ellis LLP; AlixPartners LLP serves as restructuring advisor and Peter J. Solomon Company serves as financial advisor and investment banker; and Donlin Recano & Company Inc. is the notice, claims and administrative agent. Versa Capital's legal advisor is Sullivan & Cromwell LLP. United Retail has arranged a $40 million Debtor-in-Possession facility from its existing revolving credit lender, Wells Fargo, to provide sufficient working capital for Avenue to continue to operate the business as usual. Wells Fargo is represented in the case by Jonathan N. Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Avenue has 433 stores and an e-commerce site -- http://www.avenue.com/. Avenue employs roughly 4,422 employees, roughly 294 of which are located at Avenue's corporate headquarters in Rochelle Park, New Jersey or at the Troy Distribution Facility. The Company disclosed $117.2 million in assets and $67.3 million in liabilities as of the Chapter 11 filing. UNITED SURGICAL: Moody's Rates US$440MM New Notes at '(P)Caa1' -------------------------------------------------------------- Moody's Investors Service assigned a provisional (P)B1 rating to both United Surgical Partners International, Inc. ("USPI") proposed $125 million senior secured revolver and $330 million first lien term loan. Moody's also assigned a (P)Caa1 rating to USPI's proposed $440 million senior unsecured notes. The company's existing $503 million term loan B rating will be lowered to B1 from Ba3, upon completion of the transaction and the Ba3 rating on its existing $80 million revolver will be withdrawn, at that time. Moody's also affirmed the Corporate Family and Probability of Default Rating at B2 and assigned a Speculative Grade Liquidity Rating of SGL-2. Approximately, $375 million of the existing term loan B will be extended to 2017 from 2014, with the remaining $128 million maturing in 2014. The proceeds will be used to refinance about $454 million of USPI's existing debt, pay a special dividend to equity holders of approximately $270 million and cover transaction and financing expenses. As part of the transaction, USPI will spin-out its U.K. operations to equity holder Welsh, Carson, Anderson & Stowe. The U.K. operations represent about 18% of USPI's combined revenues. Going forward, Moody's views the spin-off favorably as it will eliminate the company's cash commitment required to sustain its growth. Over the past few years, the cash outlay averaged about $32 million annually. Moody's does recognize that the U.K. operations had provided USPI with both geographic diversity -- although modest at only 6 centers -- and scale. Following is a summary of Moody's rating actions. United Surgical Partners International, Inc. Ratings assigned: - $125 million senior secured revolving credit facility due 2017 at (P)B1 (LGD 3, 34%) - $330 million first lien term loan due 2019 at (P)B1 (LGD 3, 34) - $440 million senior unsecured notes due 2020 at (P)Caa1 (LGD 5, 87%) - $375 million term loan B at B1 (P)(LGD 3, 34%) - Speculative Grade Liquidity Rating at SGL-2 Ratings to be Lowered: - $128 million term loan B to B1 (LGD 3, 34%) from Ba3 (LGD 2, 27%) Ratings affirmed: - Corporate Family Rating at B2 - Probability of Default Rating at B2 Ratings to be withdrawn upon completion of the refinancing: - $80 million senior secured revolver at Ba3 (LGD 2, 25) - $240 million senior subordinated notes at Caa1 (LGD 5,82%) - $197 million senior subordinated notes at Caa1 (LGD 5,82%) Ratings Rationale USPI's B2 Corporate Family Rating reflects its considerable financial leverage, ongoing challenges associated with the economy and high unemployment which have resulted in an overall reduced number of ASC visits. Also, with the proposed spin-out of its U.K. operations, USPI's revenue will shrink by about 18%, which had helped contribute to diversifying its revenue stream geographically. While Moody's believe that over the long term demand for ASCs will grow, reimbursement rates may ultimately moderate. The rating also reflects Moody's expectation that the company will continue to prioritize acquisitions in lieu of deleveraging and maintain a shareholder oriented financial policy as demonstrated by the recent $270 million dividend to shareholders. Alternatively, the ratings are supported by the company's ability to generate good free cash flow, the relatively stable near term reimbursement environment and the longer term favorable prospects for the ASC industry. The ratings are also supported by the company's leading position in a fragmented and growing -- but also competitive -- healthcare segment. The stable outlook reflects Moody's expectation that the company should continue to see positive operating results characterized by strong margins and steady cash flow generation. However, Moody's believes that cash flow will likely be used for additional growth and development instead of debt repayment, although, Moody's expects the company will deleverage to about 6.5 times by the end of fiscal 2012, primarily by EBITDA growth. The outlook also reflects Moody's expectation that volume growth may continue to be soft in the near term but that increases in revenue per case and the contribution from newly developed facilities should continue to contribute to overall revenue growth. Should the company reduce and sustain adjusted leverage below 5.5 times and shift its financial policy to one of a more creditor friendly orientation, the ratings could be upgraded. Additionally, Moody's would expect to see a continuation of strong cash flow metrics with adjusted operating and free cash flow coverage of debt approximating 10% and 5%, respectively. The ratings could be downgraded if the company increases leverage on a sustained basis above 7 times, either for acquisitions or shareholder initiatives or if free cash flow to debt were to become negative. The principal methodology used in rating United Surgical Partners International, Inc. was the Global Healthcare Service Providers Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. United Surgical Partners International, Inc. (USPI), headquartered in Dallas, TX, owns and operates ambulatory surgery centers (ASCs) and surgical hospitals in the United States and Europe. At December 31, 2011, the company operated 206 short-stay surgical facilities. Of the 206 facilities, USPI consolidates the results of 58 facilities and accounts for 138 facilities under the equity method of accounting. Of the 206 total facilities, 200 are located in the US and six are located in the United Kingdom. The majority of the company's US facilities are jointly owned with local physicians and not-for-profit healthcare systems. VIKING SYSTEMS: Incurs $2.9 Million Net Loss in Full Year 2011 -------------------------------------------------------------- Viking Systems, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss applicable to common shareholders of $2.92 million on $10.77 million of sales for the year ended Dec. 31, 2011, compared with a net loss applicable to common shareholders of $2.43 million on $8.04 million of sales during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $5.44 million in total assets, $2.67 million in total liabilities and $2.76 million in total stockholders' equity. Jed Kennedy, President and CEO of Viking Systems said, "2011 was a record sales year for Viking Systems. We placed more of our new 3DHD Vision Systems during 2011 than any two years of combined placements for our previous generation 3D product. We believe the fact that this was done during a very challenging global financial climate is a testament to the potential we see developing for this technology." A full-text copy of the Form 10-K is available for free at: http://is.gd/FhrTAi About Viking Systems Based in Westborough, Massachusetts, Viking Systems, Inc. (OTCBB: VKNG.OB) -- http://www.vikingsystems.com/-- is a developer, manufacturer and marketer of visualization solutions for complex minimally invasive surgery. The Company partners with medical device companies and healthcare facilities to provide surgeons with proprietary visualization systems enabling minimally invasive surgical procedures, which reduce patient trauma and recovery time. The report of Squar, Milner, Peterson, Miranda & Williamson, LLP, on the Company's Annual Report did not contain a "going concern qualification." The report from Viking Systems, Inc.'s independent registered public accounting firm, Squar, Milner, Peterson, Miranda & Williamson, LLP, dated February 22, 2010, includes a going concern explanatory paragraph which states that factors relating to the Company's net losses and working capital concerns raise substantial doubt the Company's ability to continue as a going concern. Viking Systems said it will need to generate significant additional revenue to achieve profitability and it may require additional financing during 2010. "The going concern explanatory paragraph in the independent auditor's report emphasizes the uncertainty related to our business as well as the level of risk associated with an investment in our common stock," Viking Systems said. VOICES OF FAITH: Creditors' Proofs of Debt Due March 20 ------------------------------------------------------- Voices of Faith Ministries Inc.'s creditors must file their proofs of claim not later than March 20, 2012. June 4, 2012 is the bar date to file governmental unit claims. Voices of Faith Ministries, Inc., based in Stone Mountain, Georgia, filed for Chapter 11 bankruptcy (Bankr. N.D. Ga. Case No. 11-85028) on Dec. 5, 2011. The petition was signed by Gary Hawkins, Sr., CEO. The Debtor has hired Moore Law Group LLC and Geiger Law LLC as co-bankruptcy counsel. WEIRTON MEDICAL: Moody's 'Ba3' Bond Rating for Possible Downgrade ----------------------------------------------------------------- Moody's Investors Service has placed the Ba3 underlying rating assigned to Weirton Medical Center (WMC) on Watchlist for potential downgrade affecting $20.3 million of rated bonds outstanding. The Watchlist action is based on continued losses, cash decline, and heightened credit pressures with a debt structure that has 50% variable rate demand bonds. Based on unaudited seven months of fiscal year (FY) 2012 financial results, WMC is posting a notably larger than anticipated operating loss of $10.5 million and cash flow deficit of $7.9 million following an operating loss of $2.5 million and cash flow generation of $4.3 million in FY 2011. In October 2011, the board chose to terminate earlier than planned the management contract with Quorum Health Resources, which was entered into for two years in May 2010 to help turnaround operations. Management has since hired a new CFO and chief nursing officer to assist with turnaround operations. Moody's expects to complete the review within 90 days or earlier and after speaking with management in the coming weeks to discuss turnaround plans and status of letter of credit bank agreement and covenant and repayment provisions. The principal methodology used in this rating was Not-for-Profit Hospitals and Health Systems published in January 2008. WILLBROS GROUP: S&P Lowers Corporate Credit Rating to 'B-' ----------------------------------------------------------Standard & Poor's Ratings Services lowered its ratings on Houston-based engineering and construction company Willbros Group Inc., including the corporate credit rating, to 'B-' from 'B'. "At the same time, we placed the ratings on CreditWatch with negative implications," S&P said. "The downgrade reflects our concerns about a potential covenant violation, weak credit protection measures, pending litigation, and upcoming debt maturities," said Standard & Poor's credit analyst Sarah Wyeth. "The CreditWatch reflects our opinion that the company is at risk of a covenant violation if it does not meaningfully improve EBITDA or sell assets." "The ratings on Willbros reflect Standard & Poor's assessment of the company's 'weak' business risk profile and 'highly leveraged' financial risk profile, as our criteria define the terms. Willbros provides engineering, construction, and other services to the oil and gas market and to the North American utility and distribution market," S&P said. "The cyclical nature of the company's end markets and thin margins can significantly erode operating results during a downturn. And projects in the engineering and construction services sector involve inherent industry risks, particularly economic risks in Willbros' upstream markets and the potential for cost overruns in the execution of fixed-price contracts," S&P said. "We view the company's liquidity as 'less than adequate' under our criteria," Ms. Wyeth said. "The company has minimal headroom under its financial covenants, and its $32 million in convertible notes mature in December 2012." WYNN LAS VEGAS: Fitch Rates $900-Mil. Mortgage Notes at 'BB+' ------------------------------------------------------------- Fitch Ratings rates Wynn Las Vegas, LLC's (Wynn Las Vegas) $900 million first mortgage notes due 2022 'BB+'. Wynn Resorts, Ltd.'s (Wynn Resorts) and its primary subsidiaries' (Wynn Las Vegas and Wynn Resorts [Macau], SA) Issuer Default Ratings (IDR) are 'BB'. All of the IDRs are linked. The Rating Outlook is Stable. The proceeds from the notes will repay the amount outstanding on Wynn Las Vegas' credit facilities, which was $370.8 million as of Dec. 31, 2011. The $109 million in commitments under the revolving credit facility maturing 2013 will be terminated following the transaction and the $258 million in commitments under the revolver maturing in 2015 will be reduced to $100 million. The 2022 first mortgage notes will be pari passu with Wynn Las Vegas' existing first mortgage notes maturing 2017 and 2020 and the senior secured credit facility. The notes and the credit facility are secured by substantially all assets of the Wynn Las Vegas and Encore resorts in Las Vegas. The collateral on the notes could potentially be released should the credit facility lenders agree to release their collateral. The risk of collateral being released is increased now with the credit facility being reduced to $100 million in commitments. The covenants are in-line with the existing notes. Additional debt is limited by a 2 times (x) fixed-charge covenant. There are some notable carveouts including $1 billion that can be drawn on a credit facility. The same 2x coverage test governs restricted payments (RP), which are limited by a RP basket. Per the 2022 note's indenture, the RP basket will be based on the Consolidated Cash Flow (essentially EBITDA) minus 1.4x Fixed Charges, which is a departure from the RP basket being based on 50% of net income in the prior indentures. Also, management fee payments to the parent are permitted per the indenture so long as there is no default. The prior indentures required the fees to be accrued while leverage was above a certain threshold (3.5x on net basis for older indentures). No material impact on the IDR: About $530 million of the bond proceeds will remain on Wynn Las Vegas' balance sheet, and so debt will increase at the subsidiary level by the same amount. With the consolidated EBITDA (minus minority interest and corporate expense) for the latest 12 month period (LTM) ending Dec. 31, 2011 at approximately $1.34 billion, pro forma leverage is expected to increase by about 0.4x to about 4.2x. At the Las Vegas level, LTM EBITDA after corporate expense is around $412 million hence leverage will increase by 1.3x to about 7.5x. Pro forma interest coverage by EBITDA will be approximately 4.4x on a consolidated basis and 1.7x at Wynn Las Vegas. The credit metrics on a consolidated basis remain consistent with the 'BB' IDR, particularly considering that the Rating Outlook was revised to Stable from Positive on Feb. 22, 2012. The Outlook revision reflected the issuance of the $1.9 billion promissory note and concerns related to the dispute with Kazuo Okada. Improved liquidity at the subsidiary level: The transaction improves Las Vegas subsidiary's liquidity by increasing available liquidity and by further pushing out the maturity profile. The proceeds from the transaction will more than offset $267 million in reduced commitments under the company's existing revolving credit facilities. Pro forma liquidity at Wynn Las Vegas is expected to be nearly $800 million and will consist of $100 million in available capacity under the revolver maturing 2015 and roughly $695 million in cash net of estimate cage cash. Besides the undrawn 2015 revolver, next debt maturity will be in 2017 when $500 million of 7.875% first mortgage notes will be coming due. Fitch expects the cash to remain on the subsidiary's balance sheet since RPs are limited by the subsidiary's RP basket, which grows at 50% of net income per the existing indentures and the credit agreement. Fitch expects Wynn Las Vegas' net income to remain negative for the foreseeable future. Fitch currently rates Wynn Resorts and its subsidiaries as follows: Wynn Resorts, Ltd. (Wynn Resorts) -- IDR 'BB'. Wynn Las Vegas, LLC (Wynn LV LLC) -- IDR 'BB'; -- Senior secured bank credit facility 'BB+'; -- Senior secured first mortgage notes (FMNs) 'BB+'. Wynn Resorts (Macau), SA (Wynn Macau SA) -- IDR 'BB'; -- Senior secured bank credit facility 'BBB-'. YANKEE CANDLE: Moody's Rates Proposed $580MM Loan at 'Ba3' ---------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Yankee Candle Company, Inc.'s ("Yankee Candle") proposed $580 million senior secured term loan. Concurrently, Moody's affirmed the B2 Corporate Family and Probability of Default Ratings of Yankee Candle's indirect parent company, YCC Holdings LLC's ("YCC"). YCC's SGL-3 Speculative Grade Liquidity Rating was also affirmed. The ratings outlook is stable. Proceeds from the proposed term loan will be used in conjunction with balance sheet cash to refinance Yankee Candle's existing $388 million Term Loan B due February 5, 2014 and $180 million of its $325 million senior unsecured notes due 2015, and to pay related fees and expenses. Moody's took the following rating actions on YCC: - Corporate Family Rating affirmed at B2. - Probability of Default Rating affirmed at B2. - Speculative Grade Liquidity Ratings affirmed at SGL-3. - $315 million senior subordinated notes due 2016 affirmed at Caa1 (LGD6, 91%) from (LGD6, 90%). Moody's took the following rating actions on Yankee Candle: - $580 million senior secured term loan due 2019 assigned at Ba3 (LGD2, 29%). - $325 senior notes due 2015 affirmed at B2 (LGD4, 54%). These notes will likely be downgraded to B3 (LGD4, 62%) upon completion of the transaction, reflecting the significant increase in structurally senior debt in the capital structure. - $188 million subordinated notes due 2017 affirmed at B3 (LGD5, 77%) from (LGD5, 76%). Moody's also affirmed the following ratings on Yankee Candle. These ratings will be withdrawn upon completion of the transaction: - $140 million secured revolving credit facility due 2013 at Ba2 (LGD2, 15%). - $388 million senior secured term loan due 2014 at Ba2 (LGD2, 15%). Ratings Rationale YCC Holdings' B2 Corporate Family Rating reflects its high debt load and weak credit metrics, with pro forma debt/EBITDA of about 6.5 times for the year ended December 31, 2011. The company's high debt stems from the 2007 debt-financed acquisition of the company and a 2011 debt-financed dividend. The rating also reflects the company's limited overall scale relative to the broader global retail industry and its narrow product focus on the premium scented candle category. Supporting the rating are Yankee Candle's solid market position and breadth of distribution across its own retail business and sizable wholesale business. The company has demonstrable brand strength evident in its very high operating margins which compare favorably to best-in-class consumer product companies. Yankee Candle has shown resiliency in the recent weak economic environment, with positive free cash flow and debt reduction. Upon closing of the transaction, YCC's liquidity is expected to remain adequate, as reflected in the SGL-3 Speculative Grade Liquidity Rating. The stable rating outlook reflects our expectation that the company will be able to maintain top-line and operating margin stability, while at the same time maintaining its focus on cash generation and debt repayment. The outlook also assumes that the company maintains adequate liquidity. YCC's ratings could be downgraded if it is unsuccessful in extending its debt maturity profile over the very near term. Its current $140 million revolving credit facility is due to expire on February 6, 2013, and it current $388 million term loan matures on February 6, 2014. Near term refinancing risk aside, YCC's ratings could be downgraded if it experiences negative trends in sales and operating margins that cause credit metrics to erode. Specific metrics include debt/EBITDA sustained above 6.5 times or EBITA/interest below 1.3 times. Factors that could result in an upgrade include sustained growth in revenue and operating earnings, significant debt reduction and maintenance of financial policies that sustainably support lower leverage. Quantitatively, ratings could be upgraded if debt/EBITDA was sustained below 5.5 times and EBITA/interest maintained above 1.75 times. The principal methodology used in rating YCC Holdings LLC was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. YCC Holdings LLC is headquartered in South Deerfield, Massachusetts. Operating through its indirect operating subsidiary, The Yankee Candle Company, Inc., YCC is the largest designer, manufacturer, and distributor of premium scented candles in the U.S. Annual revenues exceed $785 million. The company is owned by affiliates of Madison Dearborn Partners, LLC ("MDP") and members of management. YANKEE CANDLE: S&P Affirms 'B' Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on South Deerfield, Mass.-based The Yankee Candle Co. Inc. "At the same time, we assigned our 'BB-' issue-level rating (two notches higher than the corporate credit rating) to Yankee Candle's proposed $580 million term loans due 2019. The recovery rating is '1', indicating our expectation for very high (90% to 100%) recovery in the event of a payment default. The net proceeds of this offering along with the company's new ABL (unrated) are intended to refinance the existing term loan and asset-based lending revolving credit facility and to retire about $180 million of the senior unsecured notes due 2015. We will withdraw our rating on the existing term loan after the transaction closes in March," S&P said. "We also lowered the issue-level rating on the company's 8.5% senior unsecured notes due 2015 to 'CCC+' from 'B'. We revised the recovery rating on this debt to '6', indicating our expectation for negligible (0 to 10%) recovery in the event of a payment default, from '3'. We revised the recovery rating based on the increased-priority obligations ahead of the senior unsecured notes," S&P said. "The 'CCC+' ratings and '6' recovery ratings on Yankee Candle's existing senior subordinated notes and senior PIK Toggle notes remain unchanged," S&P said. "The outlook is stable. About $1.4 billion of total debt (including our standard adjustments) is outstanding pro forma for the refinancing," S&P said. "Standard & Poor's ratings reflect our assessment of Yankee Candle's 'highly leveraged' financial risk profile and 'weak' business risk profile. Yankee Candle's current credit measures are reflective of indicative ratios corresponding to a highly leveraged financial profile for the 12 months ended Dec. 31, 2011, including a ratio of debt to EBITDA of over 5x, and a ratio of funds from operations (FFO) to total debt of less than 12%. We estimate Yankee Candle's adjusted total debt to EBITDA (pro forma for the refinancing, notes repayment, and our standard adjustments) is high, at about 6.8x," S&P said. "Key credit factors in our analysis of Yankee Candle's business risk profile include a narrow product focus, significant earnings seasonality, and the discretionary nature of its products. We also considered its strong market position and leading brand in the premium scented candles market," S&P said. "We expect Yankee Candle to maintain adequate liquidity, sustain current operating performance levels, and continue to use its free cash flow to reduce debt," said Standard & Poor's credit analyst Stephanie Harter. "We expect the company to improve credit measures over the near term, including leverage approaching 6x and EBITDA interest coverage close to 2x by the end of fiscal 2012 to maintain the stable outlook. We would consider lowering the rating if operating performance and credit measures weaken with leverage closer to 7x and/or if the company pursues a more aggressive financial policy." YELLOWSTONE MOUNTAIN: $375MM Malpractice Suit vs. Garlington Nixed ------------------------------------------------------------------ Maria Chutchian at Bankruptcy Law360 reports that a Montana federal judge on Monday threw out a $375 million malpractice suit the co-founder of the Yellowstone Club resort brought against his former attorney, saying he had failed to seek leave from his bankruptcy court proceedings before filing a complaint. According to Law360, Timothy Blixseth sued Garlington Lohn & Robinson PLLP and Patten Peterman Bekkedahl & Green PLLC in June, claiming they used information gained through earlier representations of him to pin the resort's bankruptcy on him. About Yellowstone Mountain Located near Big Sky, Montana, Yellowstone Mountain Club LLC -- http://www.theyellowstoneclub.com/-- is a private golf and ski community with more than 350 members, including Bill Gates and Dan Quayle. The Company was founded in 1999. Yellowstone Club and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Montana, Case No. 08-61570) on Nov. 10, 2008. The Company's owner affiliate, Edra D. Blixseth, filed a separate Chapter 11 petition on March 27, 2009 (Case No. 09-60452). Attorneys at Bullivant Houser Bailey PC and Bekkedahl & Green PLLC represented Yellowstone. The Debtors hired FTI Consulting Inc. and Ronald Greenspan as CRO. The official committee of unsecured creditors were represented by Parsons, Behle and Latimer; and James H. Cossitt, Esq., as counsel. Credit Suisse, the prepetition first lien lender, was represented by Skadden, Arps, Slate, Meagher & Flom. In June 2009, the Bankruptcy Court entered an order confirming Yellowstone's Chapter 11 Plan. Pursuant to the Plan, CrossHarbor Capital Partners LLC acquired equity ownership in the reorganized Club for $115 million. * Straddling Taxes Are Pre-Bankruptcy, 5th Circuit Rules -------------------------------------------------------- Bloomberg News' bankruptcy columnist Bill Rochelle reports the U.S. Court of Appeals in Cincinnati ruled March 5 that when an individual files a Chapter 13 bankruptcy after Jan. 1, taxes for the prior year are deemed pre-petition even though the return isn't due until after bankruptcy. The ruling in Michigan Department of the Treasury v. Hight (In re Hight), 10-2103, 6th U.S. Circuit Court of Appeals (Cincinnati), allows Chapter 13 bankrupts to stretch out payment of tax liabilities. * February Bankruptcies Lower, Chapter 11s May Have Hit Bottom -------------------------------------------------------------- Bloomberg News' bankruptcy columnist Bill Rochelle, citing data compiled from court records by Epiq Systems Inc., reports that bankruptcy filings rose in February compared with January, although the trend for the year so far points toward fewer filings in 2012 than 2011. Bankruptcies of all types in February totaled 104,400, an increase of 18.7% from January. February filings on a daily basis were 9.5% fewer than the same month in 2011. Commercial bankruptcies likewise continue following a downward trend. The 5,130 commercial bankruptcies of all types in February were down 3% from January and represented 2% fewer than February 2011 on a daily basis, Epiq reported. The 969 Chapter 11s in February were virtually unchanged from January and down 2.5% from February 2011, Epiq's statistics show. If the trend in filings for the first two month of 2012 were to continue for the remainder of the year, there would be about 1.15 million bankruptcies, or 16% fewer than the 1,379,500 bankruptcies in 2011 as a whole. * Debt Load Not Main Cause of Credit Strain for Most Muni Issuers ----------------------------------------------------------------- The debt of US public finance bond issuers has only marginally increased over the last three years, indicating that revenue pressure and expenditure strains unrelated to debt service continue to be the primary drivers of credit stress in the sector, says Moody's in a special compendium of original articles on trends in municipal debt issuance. "Total debt relative to economic output has noticeably declined and borrowing for capital purposes, not for operations, continues to be the primary purpose of new-money debt," said Moody's Public Finance Research Director Chris Holmes, editor of the publication, which examines the fundamental factors influencing the volume of public finance issuance over the next year. Over the next year, the total volume of US public finance debt issuance is expected to increase from the suppressed levels tallied in 2011. However, issuance will not likely reach 2010 volumes, which were abnormally high because of the imminent sunset of the federal Build America Bond program, according to Moody's. Prevailing low interest rates are expected to buoy refunding volume, but will not significantly impact the volume of new-money issuance. Historical data show that refunding volume is sensitive to both the level and change in interest rates, but long-term new- money bond issuance is surprisingly uncorrelated. Short-term note issuance, on the other hand, is highly responsive to interest rates. "We have observed political aversion to higher debt issuance that has, on the margin, subdued issuance volume," said Mr. Holmes. "Among other factors, anti-debt sentiment is fueled by ongoing concerns about the high debt burden of the US federal government, certain European sovereigns, fiscal strain of individual issuers, and the large unfunded pension liabilities of many state and local governments." He said curtailed federal spending will affect issuance in public finance sectors in varying ways. Borrowers in some sectors will be inclined to issue more, but issuance in other sectors will be biased lower as a result. "For example, looming federal cuts to Medicaid and Medicare will indirectly support issuance by healthcare institutions to fund consolidations needed to accelerate cost reductions and to optimize operations," said Mr. Holmes. "Cutbacks in federal healthcare spending will mostly weigh on borrowing by state governments and to some degree, local governments." Similarly, he predicted, state governments will continue to cut aid to local governments, leaving some localities little choice but to minimize borrowing in order to restrict additional debt service expenditures. The lingering effects of the economic downturn and housing slump will continue to influence issuance across various sectors to different degrees. "For example, issuance by housing finance agencies will continue to be modest because of low mortgage origination activity and competition from very low conventional mortgage interest rates," said Mr. Holmes. Since the onset of the economic downturn in 2008, Moody's has found that many public finance issuers have delayed capital spending in response to revenue pressures, creating pent-up capital requirements and borrowing needs. "The backlog will translate into more issuance in some sectors such as infrastructure and water-and-sewer utilities," said Mr. Holmes. "Higher education and other issuers will continue to hold back on capital expansion plans and associated borrowing." The report, "Debt Drivers 2012: Credit Factors Affecting US Public Finance Bond Issuance," is available at moodys.com. * Marks to Head Vorys' Bankruptcy & Creditors Rights Practice ------------------------------------------------------------- Jeffrey A. Marks has joined Vorys, Sater, Seymour and Pease LLP as a partner in its Cincinnati office, where he will be leading the office's Bankruptcy and Creditors' Rights practice. "I am truly excited to be part of such an outstanding and dynamic firm and look forward to working together with Vorys' stellar restructuring lawyers. My experience representing lenders and other parties in complex Chapter 11 cases, workouts and insolvency matters will strengthen the firm's ability to serve the needs of its financial institution, investor and other commercial client base in the Cincinnati region and elsewhere," Mr. Marks said. Mr. Marks can be reached at: Vorys, Sater, Seymour and Pease LLP 221 East Fourth Street, Suite 2000, Atrium Two Cincinnati, OH 45202 Telephone: (513) 723-4482 Mobile: (513) 284-1033 Fax: (513) 723-4056 E-mail: jamarks@vorys.com Web site: http://www.vorys.com * SmithAmundsen's P. Jones Joins Greensfelder Bankruptcy Group -------------------------------------------------------------- Brian Mahoney at Bankruptcy Law360 reports that Greensfelder Hemker & Gale PC has added a former SmithAmundsen LLC restructuring and creditors' rights partner to round out its growing bankruptcy practice in Chicago. Patrick M. Jones joined Greensfelder Hemker's creditors' rights and bankruptcy practice group as an officer March 1. He will represent creditors' committees and individual creditors as they seek claims against bankrupt entities, the firm said. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- April 3-5, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Grand Hyatt Atlanta, Atlanta, Ga. Contact: http://www.turnaround.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ ********* 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 ***