/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120321.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 21, 2012, Vol. 16, No. 80 Headlines AK STEEL: Moody's Assigns 'B2' Rating to Senior Unsecured Notes AK STEEL: S&P Rates New $250-Mil. Senior. Unsecured Notes 'BB-' ALEXANDER GALLO: Michigan Treasury Says Plan Fails on Tax Claims ALLIANCE LAUNDRY: S&P Raises Corporate Credit Rating to 'B+' AMERICAN AIRLINES: Panel Gets OK for Epiq as Information Agent AMERICAN AIRLINES: Reports February 2012 Traffic Results AMERICAN AIRLINES: 17 Affiliates File Schedules and Statements APEX KATY: Section 341(a) Meeting Scheduled for April 10 ARCAPITA BANK: Bahrain Bank Files for Ch. 11 in Manhattan ARCAPITA BANK: Case Summary & 50 Largest Unsecured Creditors AVEOS: Initiates CCAA Proceedings in Canada BARBETTA LLC: Chapter 11 Plan Wins Court Approval BEACON POWER: Compromise with DOE Stricken Off Cash Use Order BOWLES SUB: Plan Disclosure Hearing Continued Until May 5 BEAU VIEW: Wants to Hire Prestige Luxury as Real Estate Broker BERNARD L. MADOFF: Trustee's Firm Gets $44MM for June-Sept. Work CARBON ENERGY: Kelvin Buchanan Appointed as Chapter 11 Trustee CARBON ENERGY: Chapter 11 Trustee Taps McDonald Carano as Counsel CATALINA MARKETING: S&P Affirms 'B+' Corporate Credit Rating CENGAGE LEARNING: S&P Lowers Corporate Credit Rating to 'B-' CENTENE CORPORATION: Moody's Issues Summary Credit Opinion CENTRAL PLAINS: Moody's Cuts Rating on Revenue Bonds to 'B2' CHEF SOLUTIONS: Has Until May 1 to Decide on Unexpired Leases CHEF SOLUTIONS: Has Until May 1 to Propose Chapter 11 Plan CHEMBULK NEW YORK: Files Chapter 15 to Avoid Seizure of Vessels CHINA PRECISION: Gets NASDAQ Bid Price Non-Compliance Notice CIGNA CORPORATION: Moody's Issues Summary Credit Opinion COREL CORP: Moody's Puts 'Caa1' CFR Under Review for Downgrade CRET RESTORATION: Hearing on Case Dismissal Bid Set for April 9 D.R. HORTON: S&P Keeps 'BB-' Corp Credit Rating; Outlook Positive DELPHI AUTOMOTIVE: S&P Raises Corporate Credit Rating to 'BB+' DIPPIN' DOTS: Hearing on Further Access to Cash Tomorrow DIPPIN' DOTS: Wants to Incur $2MM DIP Loan from Fischer Ventures EASTERN LIVESTOCK: Ch. 11 Trustee Taps Kroger Gardis as Auctioneer EASTERN LIVESTOCK: Kroger Gardis Tapped to Probe Unpaid Notes EASTMAN KODAK: Noteholders Balk at Photo Biz. Auction Rules EASTMAN KODAK: Shareholders Want Own Committee EASTMAN KODAK: Retiree Wants to Form Own Official Committee EASTMAN KODAK: To Pay $3.2MM in Settlement With Flextronics EDWARD DEETS: Section 341(a) Meeting Reset for March 30 ELPIDA MEMORY: Files Chapter 15 Petition in Delaware ELPIDA MEMORY: Chapter 15 Case Summary EVERGREEN SOLAR: Has Until June 12 to Propose Chapter 11 Plan EVERGREEN SOLAR: Court OKs Settlement With Noteholders EXPRESS LLC: Moody's Raises CFR to 'Ba2'; Outlook Stable FENTON SUB: Wants Plan Solicitation Exclusivity Until May 21 FIBERTECH NETWORKS: S&P Keeps 'B' Rating on $260-Mil. Secured Debt FLYING FORTRESS: Fitch Rates $900 Million Secured Loan at 'BB' GENERAL MARITIME: GCG OK'd as Committee's Communications Agent GLOBAL AVIATION: Meeting of Creditors Rescheduled to March 29 GLOBAL AVIATION: Kirkland & Ellis Approved as Bankruptcy Counsel GREDE HOLDINGS: S&P Gives 'B+' Corp. Credit Rating; Outlook Stable GRUBB & ELLIS: Wants to Increase BGC Partners Loan to $15.5MM GRUBB & ELLIS: Taps Kurtzman Carson Consultants as Admin. Agent HHI HOLDINGS: S&P Affirms 'B+' Corp. Credit Rating; Outlook Stable HOMBURG INVEST: Obtains May 31 CCAA Stay Extension HOSTESS BRANDS: April 24 Fixed as General Claims Bar Date HOSTESS BRANDS: To Pay $75,000 Per Month for IBT Legal Fees HOUGHTON MIFFLIN: Said to Have Hired Restructuring Advisors HUMANA INC: Moody's Issues Summary Credit Opinion HUMPUSS SEA TRANSPORT: Files for Chapter 15 in Manhattan HUMPUSS SEA TRANSPORT: Chapter 15 Case Summary IDQ HOLDINGS: Moody's Assigns 'B3' Corporate Family Rating IDQ HOLDINGS: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable INFOR ENTERPRISE: S&P Gives B Corp. Credit Rating; Outlook Stable INTERNATIONAL MEDIA: Files Schedules of Assets and Liabilities INTERNATIONAL MEDIA: Wants to Hire BCWS as Tax Consultants J.B. POINDEXTER: Moody's Raises Corporate Family Rating to 'B1' JACUZZI BRANDS: S&P Cuts Corp. Credit Rating to 'CCC'; Outlook Neg JESCO CONSTRUCTION: Court Won't Remove War-Con from Committee JOBSON MEDICAL: Gordian OK'd for Financial Advisory Services JOBSON MEDICAL: Lowenstein Sandler Approved as Bankruptcy Counsel KILROY REALTY: S&P Rates $100-Mil. Series G Preferred Stock 'BB' LEHMAN BROTHERS: Gets US$1.5BB Distribution From Asian Subsidiary LIONCREST TOWERS: Withdraws Motion to Dismiss Chapter 11 Case LYMAN LUMBER: Panel to Retain Conway MacKenzie as Fin'l Advisor MADISON 92ND: Taps Cushman & Wakefield as Financial Advisors MADISON 92ND: CIM-Led Auction of All Assets Set for April 16 MADISON 92ND: Taps Tuchman Korngold on Tax Certiorari Claim MAGUIRE GROUP: Has Until May 21 to Decide on Unexpired Leases MAGUIRE GROUP: Plan Exclusivity Extended Until July 20 MARCO POLO SEATRADE: Has Until March 31 to File Chapter 11 Plan MF GLOBAL: SIPA Trustee to Distribute $685-Mil. to Clients MF GLOBAL: SIPA Trustee Seeks Nod for $14.5MM Precious Metal Sale MF GLOBAL: Sec. 341 Meeting of Creditors Adjourned to April 5 MF GLOBAL: UK Directors Unsure of Shortfall MF GLOBAL: Investors Seek to Buy Out Australian Unit's Clients MOVIE GALLERY: Claimant Given 30 Days to Amend Priority Claim NEBRASKA BOOK: U.S. Trustee Amends Committee to Add SOF-LBCW NEWMARKET CORP: S&P Withdraws 'BB+' Corp. Credit Rating at Request OVERSEAS SHIPHOLDING: Moody's Keeps 'B3' Corporate Family Rating PANTRY INC: S&P Affirms 'B+' Corp. Credit Rating; Outlook Stable POST STREET: Plan Confirmation Hearing Set for April 3, 4 and 5 PUEBLO OF SANTA ANA: Fitch Affirms 'BB+' Rating on $21MM Bonds SALT VERDE: Moody's Cuts Rating on Sub. Gas Revenue Bonds to 'B2' SANDUSKY BAY: Court Says Injunction Bid Procedurally Improper SOUTHEASTERN MATERIALS: Injunction Bid v. Dennis-Lambert Denied TBS INTERNATIONAL: Combined Hearing on Plan Resumes March 28 VERSO PAPER: S&P Rates $200-Mil. ABL and Credit Facilities 'BB-' WASHINGTON MUTUAL: Completes Chapter 11 Restructuring Process WEIRTON MEDICAL: Moody's Cuts Bond Rating to 'B3;' Outlook Neg. WILCOX EMBARCADERO: Amends Application to Employ Gabrielson WILLBROS GROUP: S&P Keeps 'B-' Corp. Credit Rating on Watch Neg WINDOW FACTORY: Section 341(a) Meeting Continued Until April 3 WINCHESTER'S HIGHLAND: Files for Chapter 11 in New Haven WINCHESTER'S HIGHLAND: Case Summary & Creditors List WP EVENFLO: Moody's Upgrades CFR to 'Caa1'; Outlook Positive ZAYO GROUP: Moody's Reviews 'B2' Corp Family Rating for Downgrade * Moody's Says Liquidity Stress-Index Holds Steady * Moody's Says Las Vegas Strip Gaming Recovery Gaining Traction * Upcoming Meetings, Conferences and Seminars ********* AK STEEL: Moody's Assigns 'B2' Rating to Senior Unsecured Notes --------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to the senior unsecured notes due 2022 issued by AK Steel Corporation. The notes are guaranteed by AK Steel Holding Corporation. At the same time, Moody's affirmed the B1 corporate family rating and probability of default rating, the B2 rating on the existing senior unsecured notes and tax exempt financings and the (P)B2 shelf rating for senior unsecured debt. Proceeds from the new issue will be used to repay outstandings under the company's asset-backed revolving credit facility. Ratings Rationale AK Steel's B1 Corporate Family Rating considers its business mix, its strong contract position, and its excellent reputation for service and technological leadership. In addition, the company's product mix benefits from a meaningful level of value-added products, including coated, electrical and stainless products. However, the rating also considers the cyclicality of the steel industry, the expected slow recovery to volume levels that will result in better fixed cost absorption, and the company's higher, although much improved, cost base relative to its peers. The rating incorporates as well AK Steel's high sensitivity to downward price movements, exposure to raw material cost inflation, particularly for iron ore, and meaningful, although improved, other liabilities such as pension and OPEB. The relatively weak debt protection metrics, as reflected in the EBIT/interest ratio of 2.1x at year-end December 31, 2011 and leverage position (4.2x debt/EBITDA) are also important considerations in the rating. The stable outlook reflects Moody's expectation that the company's overall credit profile is appropriately-positioned in the B rating category, although metrics could face continued pressure until broader and sustainable economic and industry conditions improve. Nonetheless, Moody's expects the company to show improving trends over the next twelve to eighteen months as end markets for steel consumption continue to move upwards. The outlook also incorporates Moody's expectation that AK Steel will likely have difficulty in materially improving credit metrics in the near term given the time required before savings from recent initiatives to improve raw material self sufficiency can be realized. AK Steel's rating could be downgraded if savings from the company's recent initiatives do not sufficiently offset high raw material costs and if economic weakness and increased competition dampens sales growth, leading to further deterioration in operating performance and credit metrics. Quantitatively, the rating could be downgraded if the debt/EBITDA ratio remains above 4x, EBIT/interest does not track around 2.5x or (CFO minus dividends)/debt is unlikely to approach at least 10% over a sustained period. The rating is unlikely to be upgraded in the near term, given the structural challenges facing AK Steel's operations and the time required before savings from its recent initiatives will be realized. The rating could be upgraded should economic fundamentals in the U.S. strengthen, and raw material prices moderate for a prolonged period. Quantitatively, the rating could be upgraded if the debt/EBITDA ratio is sustainable at no more than 3.75x, EBIT/interest is sustainable above 2.75x and (CFO minus dividends)/debt tracks above 15%. The principal methodology used in rating AK Steel 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. Headquartered in West Chester, Ohio, AK Steel Corporation ranks as a middle tier, high quality, integrated steel producer in the United States, operating seven steelmaking and finishing plants in Indiana, Kentucky, Ohio and Pennsylvania. The company produces flat-rolled carbon steels, including coated, cold-rolled and hot- rolled products, as well as specialty stainless and electrical steels. Principal end markets include automotive, steel service centers, appliance, industrial machinery, infrastructure, construction and distributors and converters. Revenues for the last twelve months ending December 31, 2011 were approximately $6.5 billion and total shipments of steel were approximately 5.7 million tons. AK STEEL: S&P Rates New $250-Mil. Senior. Unsecured Notes 'BB-' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating (the same as the corporate credit rating) to West Chester, Ohio-based AK Steel Corp.'s proposed $250 million senior unsecured notes due 2022. "The recovery rating is '3' indicating our expectation of a meaningful (50% to 70%) recovery in the event of a payment default. The notes are being issued under the company's shelf registration filed on April 26, 2010," S&P said. "The notes will be guaranteed by AK Steel Holding Corp., the parent of AK Steel, on a senior unsecured basis. The notes will be senior unsecured obligations and will rank equally with all of AK Steel's existing and future senior unsecured indebtedness. The company intends to use the proceeds from this offering to repay borrowings under its asset-backed revolving credit facility," S&P said. "The 'BB-' corporate credit rating and negative rating outlook on AK Steel Holding Corp. reflect our assessment of the company's business risk profile as fair and financial risk profile as aggressive. The ratings also reflect its good market positions in a number of value-added steel products and its adequate liquidity. These positive factors are somewhat offset by the company's relatively small size, high cost position as an integrated steelmaker, lack of backward integration, high exposure to the cyclical automotive market, significant legacy costs, and credit metrics that are currently very weak for the rating," S&P said. "In 2011, adjusted EBITDA was below $250 million due to continued volatile industry conditions and the company's inability to pass through all of its raw material costs. This resulted in adjusted debt to EBITDA of more than 10x and adjusted funds from operations (FFO) to total debt below 10%, well below our expectations for a 'BB-' rating. Although our expectations for 2012 are for continued sluggish demand and volatile pricing, we expect that AK Steel's operating performance in the first half of 2012 will likely improve based on stronger end market demand, in particular, automotive sales. We now expect 2012 EBITDA in the $375 million to $400 million range based on modest price increases, moderating raw material costs and better product mix. This should result in adjusted debt to EBITDA of 5.5x to 6x. However, the negative rating outlook reflects the potential for credit measure to remain weak for the rating if prices and volumes do not improve as expected and operating performance again falls short of our expectations. We expect total adjusted debt to EBITDA to average of 4x to 5x and FFO to total adjusted debt at about 20% through a cycle," S&P said. RATINGS LIST AK Steel Corp. AK Steel Holding Corp. Corporate Credit Rating BB-/Negative/-- NEW RATING AK Steel Corp. $250 mil sr unsec notes due 2022 BB- Recovery Rating 3 ALEXANDER GALLO: Michigan Treasury Says Plan Fails on Tax Claims ---------------------------------------------------------------- The State of Michigan, Department of Treasury, by its attorneys, objects to the Second Modified Plan of Liquidation of AGH Liquidating, LLC, formerly known as Alexander Gallo Holdings, LLC, et al. As reported in Troubled Company Reporter on March 2, 2012, the Debtors filed a Chapter 11 Plan that provides for the limited substantive consolidation of the Debtors' estates, but solely for the purposes of the Plan, including voting on the Plan by the holders of claims and making any distributions to holders of claims. A full-text copy of the Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/ALEXANDER_GALLO_ds_2ndmodified.pdf According to Treasury, the Plan, among other things: -- fails to provide for appropriate interest on Treasury's priority tax claims; -- attempts to exculpate corporate officers and enjoins collection of taxes due from non-debtors violates the tax injunction act; and -- attempts to enjoin Treasury's right to setoff. The Treasury is represented by: Bill Schuette, attorney general Moe Freedman, assistant attorney general Revenue and Collections Division 3030 W. Grand Blvd., Suite 10-200 Detroit, MI 48202 Tel: (313) 456-0140 About Alexander Gallo Marietta, Georgia-based Alexander Gallo Holdings LLC -- http://www.alexandergalloholdings.com-- is the largest full service, IT-enabled court reporting and litigation support services company in the United States. AGH offers court reporting, litigation support, trial software and other similar services and has the only true national footprint in its market, with roughly 55 offices located throughout the United States, and a preferred provider network which serves as an extension of Alexander Gallo's geographic reach. Founded in 1999 by Alexander J. Gallo, a former court reporter, AGH has made 18 acquisitions since 2003. Mr. Gallo has remained as CEO. AGH, along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-14220) on Sept. 7, 2011. Alexander Gallo will sell the business via 11 U.S.C. Sec. 363 to Bayside Capital Inc., which had acquired $22 million in second- lien debt. The price wasn't disclosed. Alexander Gallo disclosed assets of $208 million and debt totaling $258 million as of June 30, 2011. Liabilities include $47 million on a first-lien revolving credit and term loan where Wells Fargo Bank NA is agent. In addition to the second-lien debt held by Bayside, there is $33 million in junior unsecured subordinated notes owing to Harvest Equity Partners LLC plus another $148 million in junior unsecured subordinated notes owing to insider Gallo Holdings LLC. As reported in the Troubled Company Reporter on Nov. 1, 2011, the Alexander Gallo disclosed $41,981,048 in assets and $259,153,046 in liabilities as of the Chapter 11 filing. Bayside is providing $20 million in financing for the Chapter 11 effort. The new loan will have a first priority lien on unencumbered assets and a lien behind the first-lien debt. Bankruptcy Judge Allan J. Gropper presides over the case. Thomas R. Califano, Esq., Jeremy R. Johnson, Esq., Esq., and Daniel G. Egan, Esq., at DLA Piper LLP (US), in New York, serve as the Debtors' general counsel. Squire, Sanders & Demsey (US) LLP serves as the Debtor's corporate counsel. The Debtors' financial advisor is Gordian Group, LLC. Marc L. Pfefferle, a partner at Carl Marks Advisory Group LLC, serves as the Debtors' chief restructuring advisor. Kurtzman Carson Consultants LLC serves as the Debtor's claims agent. KPMG LLP serves as their auditors to provide auditing, tax compliance and tax consulting services. As reported in the TCR on Dec. 8, 2011, an affiliate of Bayside Capital, Inc., completed the acquisition of Alexander Gallo's assets. ALLIANCE LAUNDRY: S&P Raises Corporate Credit Rating to 'B+' ------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Ripon, Wisc.-based Alliance Laundry Systems LLC to 'B+' from 'B'. "We removed all ratings from CreditWatch, where they were placed with positive implications on Sept. 28, 2011, following several quarters of stable operating performance and improvement in credit metrics," S&P said. "At the same time, we assigned a 'BB-' issue-level rating (one notch higher than the corporate credit rating) to Alliance Laundry's proposed $350 million senior secured credit facilities due 2017. The recovery rating is a '2', indicating our expectation for substantial (70% to 90%) recovery in the event of a payment default. The proposed senior secured credit facilities comprise a $75 million revolving credit facility and a $275 million term loan A. The company intends to use the net proceeds of this offering to repay its existing term loan due 2016 and to fund a $47 million distribution to shareholders," S&P said. The new issue-level ratings are subject to review upon receipt of final documentation by Standard & Poor's. "We also raised the issue-level ratings on the company's existing $60 million senior secured revolver and $285 million ($243 million outstanding) senior secured term loan to 'BB-' from 'B+', reflecting the raising of the corporate credit rating. The recovery rating remains '2'. We will withdraw our ratings on the company's existing senior secured debt upon closing of the new senior secured credit facilities," S&P said. "The raising of our corporate credit rating primarily reflects Alliance Laundry's improvement in operating performance and credit measures over the past year," said Standard & Poor's credit analyst Rick Joy. "The ratings on Alliance Laundry reflect Standard & Poor's view that the company has an 'aggressive' financial risk profile and 'weak' business risk profile. Key credit factors considered in our business risk assessment are the company's narrow product focus, small scale, and customer concentration, yet strong market position in the U.S.," S&P said. "Alliance Laundry is a manufacturer of a full line of self- contained commercial laundry equipment, primarily serving laundromats, multiunit housing laundries, and on-premise laundries. About 70% of its sales are in the U.S. and Canada, and we believe certain segments of the niche commercial laundry equipment sector are somewhat recession-resistant. In 2011, Alliance Laundry derived more than 24% of net sales from its 10 largest customers. Coinmach Corp., the operating company of Coinmach Service Corp. (B-/Stable/--), was the largest customer and accounted for about 8.6% of 2011 net sales. We believe the loss of any of these customers would have a material effect on Alliance Laundry's operations. However, we believe the market has high barriers to entry given the substantial capital necessary to establish production, the company's long-standing trade relationships, and its large installed equipment base. Consequently, we expect Alliance Laundry to be able to maintain its overall good domestic market position," S&P said. "The outlook is stable, reflecting our expectation that Alliance Laundry will maintain adequate liquidity and credit measures close to those commensurate with an aggressive financial risk profile, including adjusted leverage at or under 4x and FFO to total debt close to 20%. We expect credit metrics to improve slightly over the near term and for the company to maintain free cash flow close to historical levels," S&P said. "Although unlikely over the next 12 months, we could raise the ratings if operating performance continues to improve and the company was to further diversify its products and global market share. Alternatively, we could lower the ratings if operating performance and credit measures were to deteriorate such that total leverage increased to more than 4.5x. We believe this could happen in a scenario where sales declined by more than 8% and EBITDA margins deteriorate at least 150 basis points over the next year," S&P said. AMERICAN AIRLINES: Panel Gets OK for Epiq as Information Agent -------------------------------------------------------------- The Official Committee of Unsecured Creditors in AMR Corp.'s cases won Bankruptcy Court permission to retain Epiq Bankruptcy Solutions, LLC, as its information agent, nunc pro tunc to Jan. 16, 2012. As the Committee's information agent, Epiq will: (A) establish and maintain a Web site at http://www.amrcreditorscommittee.com/that provides, without limitation: * General information regarding the chapter 11 cases; * A general overview of the chapter 11 process; * Contact information for the Debtors (and any information hotlines that they establish), the Debtors' counsel and the Committee's counsel; * The date by which Unsecured Creditors must file their proofs of claim; * The voting deadline with respect to any Chapter 11 plan of reorganization filed in the Chapter 11 cases; * The claims docket, as established by the Debtors and Epiq; * The Debtors' monthly operating reports; * A list of upcoming omnibus hearing dates and the calendar of matters on such hearing dates; * Answers to frequently asked questions; and * Links to other relevant Web sites (e.g., the Debtors' corporate Web site, the Web site of the Debtors' notice, claims and soliciting agent, Garden City Group, the Court Web site and the website of the United States Trustee for Region 2. (B) Provide e-mail functionality to allow Unsecured Creditors to send questions and comments concerning the Debtors' Chapter 11 cases. (C) Maintain an electronic inquiry form for creditors to submit questions and comments. (D) Assist the Committee with certain administrative tasks, including, but not limited to, printing and serving documents as directed by the Committee and its counsel. Epiq's services will be billed according to a pricing schedule, copy of which is available for free at: http://bankrupt.com/misc/AmAir_EpiqPricingSched.pdf Joseph N. Wharton, vice president and senior consultant of Epiq, insists that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., 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: Reports February 2012 Traffic Results -------------------------------------------------------- American Airlines reported a February 2012 load factor of 75.8%, an increase of 1.0 point versus the same period last year, according to a company statement dated March 5, 2012. Traffic increased 6.0% and capacity increased 4.7% year-over-year, the company said. Domestic load factor was 78.1%, 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 said it boarded 6.4 million passengers in February. A copy of the February 2012 traffic and capacity results is accessible for free at http://ResearchArchives.com/t/s?779c American Eagle's Traffic American Eagle reported a February 2012 traffic increase of 18.9% year-over-year as capacity increased 14.0%, the company said in a statement dated March 5, 2012. February load factor was 70.2%, an increase of 2.9 points compared to the same period last year. American Eagle boarded almost 1.5 million passengers in February 2012. A copy of the February 2012 traffic and capacity data is accessible for free at http://ResearchArchives.com/t/s?779d 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, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., 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: 17 Affiliates File Schedules and Statements -------------------------------------------------------------- Seventeen debtor-affiliates of AMR Corp. and American Airlines, Inc., disclose these assets and liabilities: Debtor Assets Liabilities ------ ------ ----------- AMR Eagle Holding Corporation $2,771,901 $21,042,220 Full-text copies of AMR Eagle's Schedules are available for free at http://bankrupt.com/misc/amr1432sal.pdf Americas Ground Services, Inc. $15,624,119 $16,435,535 Full-text copies of Americas Ground Services' Schedules are available for free at http://bankrupt.com/misc/amr1434sal.pdf Executive Airlines, Inc. $37,256,784 $5,379,227 Full-text copies of Executive Airlines' Schedules are available for free at http://bankrupt.com/misc/amr1442sal.pdf AA Real Estate Holding L.P. $78,678,135 $38,491,474 Full-text copies of AA Real Estate's Schedules are available for free at http://bankrupt.com/misc/amr1458sal.pdf American Aviation Supply LLC $31,540,309 $22,022,326 Full-text copies of American Aviation's Schedules are available for free at http://bankrupt.com/misc/amr1464sal.pdf American Airlines Marketing Services LLC $24,792,116 $0 Full-text copy of American Airlines Marketing's Schedule is available for free at http://bankrupt.com/misc/amr1460sal.pdf American Airlines Vacations LLC $100,619,768 $0 Full-text copies of American Airlines Vacations' Schedules are available for free at http://bankrupt.com/misc/amr1462sal.pdf Eagle Aviation Services, Inc. $5,714,457 $284,492 Full-text copies of Eagle Aviation's Schedules are available for free at http://bankrupt.com/misc/amr1448sal.pdf Executive Ground Services, Inc. $14,462 $157,981 Full-text copies of Executive Ground's Schedules are available for free at http://bankrupt.com/misc/amr1446sal.pdf AA Real Estate Holding GP LLC $100 $0 Full-text copies of AA Real Estate's Schedules are available for free at http://bankrupt.com/misc/amr1456sal.pdf American Airlines Realty $5,900 $534 (NYC) Holdings, Inc. Full-text copies of American Airlines Realty's Schedules are available for free at http://bankrupt.com/misc/1426_15463.pdf SC Investment, Inc. $0 $43,284,220 Full-text copies of SC Investment's Schedules are available for free at http://bankrupt.com/misc/amr1438sal.pdf PMA Investment Subsidiary, Inc. $0 $0 Full-text copies of PMA Investment's Schedules are available for free at http://bankrupt.com/misc/amr1469sal.pdf Admirals Club, Inc. $0 $0 Full-text copies of Admirals Club's Schedules are available for free at http://bankrupt.com/misc/amr1450sal.pdf Business Express Airlines, Inc. $0 $0 Full-text copies of Business Express's Schedules are available for free at http://bankrupt.com/misc/amr1452sal.pdf Reno Air, Inc. $0 $0 Full-text copies of Reno Air's Schedules are available for free at http://bankrupt.com/misc/amr1454sal.pdf American Airlines IP Licensing Holding, LLC $0 $0 Full-text copies of American Airlines IP's Schedules are available for free at http://bankrupt.com/misc/amr1466sal.pdf Statements of Financial Affairs Seventeen debtor-affiliates of AMR Corp. and American Airlines, Inc., disclose, among other things, income received from the operation of their businesses or from other income during the two years preceding the Petition Date and payments made to creditors during the 90-days before the Petition Date. (1) AMR Eagle Holding AMR Eagle Holding Corporation reported income received from employment, trade, or profession, or from operation of the Debtor's business for the two years immediately preceding the Petition Date: YTD 11/29/11 $0 FYE 2010 $38,804 FYE 2009 $86,492,448 Full-text copies of AMR Eagle Holding's Statements are available for free at http://bankrupt.com/misc/amr1433sofa.pdf (2) American Ground Service American Ground Services, Inc., reported income received from employment, trade, or profession, or from operation of the Debtor's business for the two years immediately preceding the Petition Date: YTD 11/29/2011 $2,712,153 FYE 2010 $2,330,800 FYE 2009 $2,453,330 American Ground Services, Inc., reported income it received other than from employment, trade, profession, or operation of the Debtor's business during the two years immediately preceding the Petition Date: YTD 11/29/11 $65,213 FYE 2010 $68,112 FYE 2009 $89,922 American Ground Services, Inc., also disclosed that it is party to six lawsuits and administrative proceedings relating to labor disputes and injury claims pending in various jurisdictions. A full-text copy of American Ground's Statement is available for free at http://bankrupt.com/misc/amr1435sofa.pdf (3) Executive Airlines Executive Airlines, Inc., reported income received from employment, trade, or profession, or from operation of the Debtor's business for the two years immediately preceding the Petition Date: YTD 11/29/11 $260,469,978 FYE 2010 $284,100,482 FYE 2009 $269,895,614 Executive Airlines, Inc., reported income it received other than from employment, trade, profession, or operation of the Debtor's business during the two years immediately preceding the Petition Date: YTD 11/29/11 $23,862 FYE 2010 $18,468 FYE 2009 $520,157 Executive Airlines, Inc., also disclosed payments to creditors within the 90 days preceding the Petition Date. The 90-day payments include: Creditor Payment Amount -------- -------------- Aircraft Propeller Service Inc. $669,021 ATR Support Inc. 875,834 Aviation Repair Technologies 1,044,426 Bahamas Public Treasury 764,735 Colector Impuestos Internos 909,697 Dade County Aviation Department 4,034,391 IATA 1,200,140 MNAviation Inc. 593,247 Northwing Accessories Corporation 802,610 Pratt & Whitney Canada 2,285,567 Puerto Rico Ports Authority 626,881 Executive Airlines, Inc., also disclosed that it has been named party in 12 lawsuits and administrative proceedings within one year before the Petition Date. Of the 12, six are pending as of the Petition Date. Full-text copies of Executive Airlines' Statements are available for free at http://bankrupt.com/misc/amr1445sofa.pdf (4) Executive Ground Services Executive Ground Services, Inc., reported income received from employment, trade, or profession, or from operation of the Debtor's business for the two years immediately preceding the Petition Date: YTD 11/29/11 $1,893,572 FYE 2010 $0 FYE 2009 $0 Executive Ground Services, Inc., is named defendant in an injury claim lawsuit pending in a court in Buenos Aires, Argentina. Full-text copies of Executive Ground's Statements are available for free at http://bankrupt.com/misc/amr1447sofa.pdf (5) Eagle Aviation Eagle Aviation Services, Inc., reported income received from employment, trade, or profession, or from operation of the Debtor's business for the two years immediately preceding the Petition Date: YTD 11/29/11 $22,601,187 FYE 2010 $23,270,356 FYE 2009 $18,381,505 Eagle Aviation Services, Inc., also reported income it received other than from employment, trade, profession, or operation of the Debtor's business during the two years immediately preceding the Petition Date: YTD 11/29/11 $20,877 FYE 2010 $15,302 FYE 2009 $20,913 Eagle Aviation Services, Inc., also disclosed they made payments to 10 creditors within the 90 days preceding the Petition Date. The 90-day payments total more than $120,000. Full-text copies of Eagle Aviation's Statements are available for free at http://bankrupt.com/misc/amr1449sofa.pdf (6) American Airlines Marketing American Airlines Marketing Services LLC reported income received from employment, trade, or profession, or from operation of the Debtor's business for the two years immediately preceding the Petition Date: YTD 11/29/11 $2,054,186 FYE 2010 $9,126,560 FYE 2009 $0 Full-text copies of American Airlines Marketing's Statements are available for free at http://bankrupt.com/misc/amr1461sofa.pdf (7) AA Real Estate AA Real Estate Holding L.P. reported income it received other than from employment, trade, profession, or operation of the Debtor's business during the two years immediately preceding the Petition Date: YTD 11/29/11 $0 FYE 2010 $0 FYE 2009 $26,750 Full-text copies of AA Real Estate Holding's Statements are available for free at http://bankrupt.com/misc/amr1459sofa.pdf (8) American Airlines Vacations American Airlines Vacations LLC reported income received from employment, trade, or profession, or from operation of the Debtor's business for the two years immediately preceding the Petition Date: YTD 11/29/11 $12,996,299 FYE 2010 $14,293,437 FYE 2009 $15,809,283 American Airlines Vacations LLC reported income it received other than from employment, trade, profession, or operation of the Debtor's business during the two years immediately preceding the Petition Date: YTD 11/29/11 $0 FYE 2010 $0 FYE 2009 $199,739 Full-text copies of American Airlines Vacations' Statements are available for free at http://bankrupt.com/misc/amr1463sofa.pdf (9) 9 Debtors Nine debtor affiliates did not disclose income received during the two years immediately preceding the Petition Date nor payments to creditors during the 90-days before the Petition Date: * American Airlines Realty (NYC) Holdings, Inc. Full-text copies of American Airlines Realty's Statements are available for free at: http://bankrupt.com/misc/amr15463sofa.pdf * PMA Investment Subsidiary, Inc. Full-text copies of PMA Investment's Statements are available for free at: http://bankrupt.com/misc/amr1470sofa.pdf * SC Investment, Inc. Full-text copies of SC Investment's Statements are available for free at: http://bankrupt.com/misc/amr1439sofa.pdf * Admirals Club, Inc. Full-text copies of Admirals Club's Statements are available for free at: http://bankrupt.com/misc/amr1451sofa.pdf * Business Express Airlines, Inc. Full-text copies of Business Express's Statements are available for free at http://bankrupt.com/misc/amr1453sofa.pdf * Reno Air, Inc. Full-text copies of Reno Air's Statements are available for free at: http://bankrupt.com/misc/amr1455sofa.pdf * AA Real Estate Holding GP LLC. Full-text copies of AA Real Estate's Statements are available for free at: http://bankrupt.com/misc/amr1457sofa.pdf * American Aviation Supply LLC. Full-text copies of American Aviation's Schedules are available for free at: http://bankrupt.com/misc/amr1465sofa.pdf * American Airlines IP Licensing Holding, LLC. Full-text copies of American Airlines IP's Statements are available for free at http://bankrupt.com/misc/amr1467sofa.pdf 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, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., 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). APEX KATY: Section 341(a) Meeting Scheduled for April 10 -------------------------------------------------------- The U.S. Trustee for Region 7 will convene a meeting of creditors of Apex Katy Physicians, LLC on April 10, 2011, at 10:00 a.m. The meeting will be held at RM 2612, 725 S Figueroa St., in Los Angeles, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Creditors must submit their proofs of claim not later than July 9, 2012. About Apex Katy Physicians Apex Katy Physicians, LLC, filed a bare-bones Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-31848) on March 6, 2012, estimating $10 million to $50 million in assets and debts. Judge Marvin Isgur presides over the case. Attorneys at Hoover Slovacek, LLP, represent the Debtor. An affiliate, Apex Long Term Acute Care - Katy, LP, a long-term care facility, filed a Chapter 11 petition (Case No. 09-37096) on Sept. 25, 2009. ARCAPITA BANK: Bahrain Bank Files for Ch. 11 in Manhattan --------------------------------------------------------- Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. Henry A. Thompson, executive director, explains in a court filing, "Like virtually all private equity institutions and investment banks, the Debtors have been adversely impacted by the global economic downturn, and have been especially hard hit by the recent debt crisis in the Eurozone. This global recession has hampered the Debtors' ability to obtain liquidity from the capital markets, and has also resulted in a reduction in asset values." The Debtors do not have the liquidity necessary to repay a $1.1 billion syndicated unsecured facility when it comes due on March 28, 2012, according to Mr. Thompson. The Debtors have tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG, Inc., as notice and claims agent. The Debtors expect that during the first 30 days of the Chapter 11 case, payments to employees will total $250,000 per week, and officers and senior management will be paid $60,000 per week. Total estimate for accrual of business and financial consultants during the first 30 days is $7.24 million. Investment Bank Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group currently has approximately $7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at approximately $3.06 billion and has liabilities of approximately $2.55 billion. The Debtors owe $96.7 million under two secured facilities made available by Standard Chartered Bank. As to unsecured debt, Arcapita: * is a borrower under a $1.1 billion unsecured murabaha, Shari'ah-compliant syndicated facility, dated as of March 28, 2007. * owes $145 million in various unsecured strategic investor facilities. * is a sponsor of a $100 million murabaha-based Arcsukuk facility, dated as of Sept. 7, 2011 and maturing on Sept. 7, 2013. * is a borrower under an approximately $256 million unsecured facility issued by the CBB; * is a borrower under a number of shortterm, unsecured regional bank loans, of which obligations outstanding are comprised of: (i) $28.4 million of U.S. dollar-denominated debt, (ii) EUR2.7 million of Euro-denominated debt and (iii) BHD3.6 million of Bahraini dinar-denominated debt. * is a borrower under that certain unsecured Bahrain Bay Development Facility in the approximate amount of $116 million. As there is currently no cash collateral associated with the collateral pledged to secure their obligations, the Debtors are not required to seek, and have not sought, the use of cash collateral. Dispute With Hedge Funds Arcapita explored out-of-court restructuring scenarios. The Debtors, however, have been unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. "More importantly in the short term, one or more hedge funds that are minority participants in the syndicated facility ? and who purchased their interests at deep discounts and are seeking to leverage their opposition to a restructuring to obtain a buyout at par while other lenders may well receive less favorable treatment ? have threatened precipitous action that would, if successful, undermine the Debtors' going concern value to the detriment of other creditors and stakeholders," Mr. Thopmson explains. In assessing these threats -- which included, among other things, the commencement of an involuntary and value-destructive straight liquidation proceeding in the Cayman Islands -- the Debtors considered reorganization options under the laws of various other jurisdictions. It is management's view, however, that Chapter 11 is the proper and most effective venue for implementing a comprehensive restructuring plan for all the Debtors that will maximize recoveries for all creditors and stakeholders. Cayman Proceeding Subsequent to the commencement of the Chapter 11 Cases, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 Cases AIHL commenced the Cayman Proceeding, seeking the appointment of Zolfo Cooper as a provisional liquidator. The summons in the Cayman Proceedings contains not only a request for the appointment of the Provisional Liquidator, but also a petition for a winding- up (or liquidation) order. AIHL has requested that the Winding-Up Order be stayed pending resolution of the Chapter 11 cases. While the Debtors believe that all of the Debtors' creditors are fully bound by the provisions of the world-wide automatic stay imposed by Section 362 of the Bankruptcy Code, the Cayman Proceeding ensures that the automatic stay is honored in the Cayman Islands and that none of the Debtors' creditors, including creditors who might be willing to risk violation of the automatic stay in an attempt to increase their own returns to the detriment of the Debtors' other creditors and stakeholders, will be able to use the courts in the Cayman Islands to collect or enforce obligations owed to them by AIHL. ARCAPITA BANK: Case Summary & 50 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Arcapita Bank B.S.C.(c) aka First Islamic Investment Bank B.S.C. (c) Arcapita Bank Building Bahrain Bay Building 551, Road 4612 Manama Sea Front 346 Manama Bahrain Bankruptcy Case No.: 12-11076 Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- Arcapita Bank B.S.C.(c) 12-11076 Arcapita Investment Holdings Limited 12-11077 Arcapita LT Holdings Limited 12-11078 WindTurbine Holdings Limited 12-11079 AEID II Holdings Limited 12-11080 RailInvest Holdings Limited 12-11081 Chapter 11 Petition Date: March 19, 2012 About the Debtors: Founded in 1996, Arcapita is a global manager of Shari'ah-compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the U.S. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third- party investors in conformity with Islamic Shari'ah rules and principles. Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Sean H. Lane Debtor's Counsel: Michael A. Rosenthal, Esq. GIBSON, DUNN & CRUTCHER LLP 200 Park Avenue, 47th Floor New York, NY 10166 Tel: (212) 351-4000 Fax: (212) 351-4035 E-mail: mrosenthal@gibsondunn.com Total Assets: $3.06 billion (includes non-debtor affiliates) Total Liabilities: $2.55 billion (includes non-debtor affiliates) The petition was signed by Henry A. Thompson, general counsel. Arcapita Bank's List of Its 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Central Bank of Bahrain Bank Loan $255,120,417 P.O. Box 27 Diplomatic Area Manama, Kingdom of Bahrain Commerzbank Bank Loan $164,687,500 C ommerzbank Aktiengesellschaft Corporates & Markets, Leveraged Finance, Maizner Landstr. 153, DLZ-Geb. 2, Handlerhaus, 60327 Frankfurt am Main, Germany National Bank of Bahrain Bank Loan $132,251,777 P.O. Box 106 Manama, Kingdom of Bahrain Bahrain Bay Development B.S.C.(c) Bank Loan $116,481,112 P.O. Box 5092 Manama, Kingdom of Bahrain District Cooling Capital Limited Bank Loan $110,673,521 c/o Paget-Brown Trust Company Ltd. Boundary Hall Cricket Square P.O. Box 1111, Grand Cayman KY1-1102 Cayman Islands Arcsukuk (2011 - 1) Limited Bank Loan $100,000,000 P.O. Box 1093 GT Queensgate House South Church Street George Town Grand Cayman Cayman Islands Euroville Sarl (formally Bank Loan $88,750,000 Satinland Finance Sarl) 125 London Wall London EC2Y 5AJ Riyad Bank Bank Loan $75,000,000 P.O. Box 22622, Riyadh 11416, Saudi Arabia VR Global Partners LP Bank Loan $74,900,000 400 Madison Avenue, 15th Floor New York, NY 10017 Midtown Acquisitions LP Bank Loan $50,050,000 C65 East 55th Street, 19th Floor New York, NY 10022 Thornbeam Limited Bank Loan $50,118,502 #10F1, Ministry of Finance Building, Commonwealth Drive Jalan Kebangsan BB3910 Negara Brunei Darussalam Perbadanan Tabung Amanah Islam Bank Loan $47,258,216 Brunei Jalan Sultan, Bandar Seri Begawan BS8811, Brunei Darussalam Fortis Bank NA/NV Bank Loan $40,094,802 Warandeberg 3 1000 Brussels Belgium Overseas Fund Co. S.P.C. Bank Loan $40,000,000 P.O. Box 836 Sheraton Commercial Complex Manama, Kingdom of Bahrain Devonshire Limited Bank Loan $35,000,000 P.O. Box 61999 Abu Dhabi Investment Council Sheikh Hamdan Building ? Silver Tower Abu Dhabi, United Arab Emirates Standard Bank PLC Bank Loan $31,000,000 20 Gresham Street London EC2V 7JE England United Kingdom BBB Holding Company II Limited Bank Loan $30,025,128 c/o Paget-Brown Trust Company Ltd. Boundary Hall Cricket Square P.O. Box 1111, Grand Cayman KY1-1102 Cayman Islands Goldman Sachs Lending Partners Bank Loan $30,000,000 Goldman Sachs International Daniel House 133 Fleet Street London EC4A 2BB Barclays Bank PLC Bank Loan $30,000,000 5 The North Colonnade Canary Wharf London E14 4BB United Kingdom Bank of America N.A. Bank Loan $30,000,000 Bank of America Merrill Lynch Financial Centre 2 King Edward St. London EC1A 1HQ United Kingdom CIMB Bank Berhad Bank Loan $30,000,000 10th Floor Bangunan CIMB Jalan Semantan Damansara Heights 50490 Kuala Lumpur Malaysia Credit Suisse, London Bank Loan $30,000,000 One Cabot Square London E14 4QJ United Kingdom Deutsche Bank Luxembourg S.A. Bank Loan $30,000,000 2, Boulevard Konrad Adenauer L-1115 Luxemburg Luxemburg European Islamic Investment Bank Loan $30,000,000 Bank PLC 60 Chiswell Street London, EC1Y 4SA England Malayan Banking Berhad, Bank Loan $30,000,000 London Branch Maybank Bahrain Branch 8th Floor, Al-Jasrah Tower P.O. Box 10470, Diplomatic Area Manama Kingdom of Bahrain Mashreqbank PSC Bank Loan $30,000,000 P.O. Box 1250, Dubai Near Al Ghurair City, Deira Royal Bank of Scotland N.V. Bank Loan $30,000,000 280 Bishopsgate London EC2M 4RB United Kingdom The Royal Bank of Scotland PLC Bank Loan $30,000,000 280 Bishopsgate London EC2M 4RB United Kingdom The Arab Investment Company S.A.A. Bank Loan $30,000,000 Sharq - Ahmed Al-Jaber Street Emad Commercial Center - 4th & 5th Floor P.O.Box: 26630 Safat 13127 Kuwait ING Bank N.V. Bank Loan $29,000,000 ING Commercial Banking Amsterdamse Poort Building Bijlmerplein 888 1102 MG, Amsterdam, The Netherlands HSH Nordbank AG, Bank Loan $29,000,000 Luxembourg Branch 2 Rue Jean Monnet 2180 Luxembourg Luxembourg Yayasan Sultan Haji Hassanal Bank Loan $23,631,610 Bolkiah Peti Surat 1166, Bandar Seri Begawan BS8672 Negara Brunei Darussalam Bandtree SDN BHD Bank Loan $23,631,592 Level 12, Ministry of Finance Building Commonwealth Drive Jalan Kebangsaan, BSB BB3910, Brunei Darussalam Saudi Industrial Capital I Limited Bank Loan $21,314,389 Boundary Hall Cricket Square P.O. Box 1111, Grand Cayman KY1-1102 Cayman Islands Fuad Al Ghanim & Sons Bank Loan $21,147,000 General Trading and Contracting P.O. Box 2118 Safat 13022, Kuwait BAWAG P.S.K. Bank fr Arbeit und Bank Loan $20,000,000 Wirtschaft und Osterreichische Postsparkasse Aktiengesellschaft Seitzergasse 2-4, A-1010 Vienna BBK B.S.C. Bank Loan $20,000,000 P.O. Box 597 43 Government Avenue Manama, Kingdom of Bahrain Boubyan Bank K.S.C. Bank Loan $20,000,000 Mubarak tower Kuwait City, Abdullah Al Salem Street, Block 5, Building 15 Central Commercial Area, Kuwait Doha Bank Bank Loan $20,000,000 P.O. Box 3818, Grand Hamad Street Doha, Qatar Natixis Bank Loan $20,000,000 30, Avenue Pierre MendŠs-France 75013 Paris Perbadanan Tabung Amanah Islam Bank Loan $19,696,798 Brunei Jalan Sultan, Bandar Seri Begawan BS8811, Brunei Darussalam Tadhamon Capital B.S.C. Bank Loan $18,421,924 P.O. Box 75511 GBCorp Tower 12th Flr. Bahrain Financial Harbour Manama, Kingdom of Bahrain Kuwait Finance House KSC Bank Loan $18,000,000 Aras 18, Tower Two Etiqa Twins, 11 Jalan Pinang, 50450 Kuala Lumpur, Malaysia NavIndia Holding Company Limited Bank Loan $17,605,878 Boundary Hall Cricket Square P.O. Box 1111, Grand Cayman KY1-1102 Cayman Islands Commerzbank (beneficiary PVC Bank Loan $17,127,500 (Lux) Lux Holding Company S.a. r.l.) Commerzbank Aktiengesellschaft, Corporates & Markets Leveraged Finance Maizner Landstr. 153 DLZ-Geb. 2, Handlerhaus, 60327 Frankfurt am Main, Germany Falcon Gas Storage Company, Inc. Bank Loan $15,160,475 5847 San Felipe, Suite 3050 Houston, TX 77057 The Governor and Company of the Bank Loan $15,000,000 Bank of Ireland Bank of Ireland Corporate Banking Lower Baggot Street, Dublin 2 Bank of Taiwan, Singapore Branch Bank Loan $15,000,000 80 Raffles Place #28-20 UOB Plaza 2 Singapore 048624 G.P. Zachariades Overseas Ltd. Bank Loan $13,250,000 P.O. Box 5632 Manama, Kingdom of Bahrain Tabung Amanah Pekerja Bank Loan $12,219,295 Island Block Level 1 Commonwealth Drive Jln Kebangsaan Bandar Seri Begawan BB3910 Negara Brunei Darussalam AVEOS: Initiates CCAA Proceedings in Canada ------------------------------------------- Aveos has initiated proceedings under the Companies' Creditors Arrangement Act (CCAA) in Canada. As of March 18, 2012, Aveos ceased its Airframe maintenance service operations and will make decisions with respect to its other operations as it seeks Court protection to allow it a period of time to assess its options. Aveos employs approximately 2,600 employees across Canada. "This was an extremely difficult decision, one we made only after lengthy and careful consideration of all other options. We deeply regret the job losses and the impact this decision has on our employees in Canada," said Joe Kolshak, President and Chief Executive Officer, Aveos Fleet Performance. The company was forced to file CCAA proceedings, in part, due to uncertain work volume across its business lines from Aveos' principal customer. Since the beginning of the year, its principal customer reduced, deferred, and cancelled maintenance work, which resulted in approximately $16 million in lost revenue in less than two months. While Aveos remained ready, willing and able to perform such work, such work did not materialize. This has been a devastating blow to Aveos, which contributed to the company needing to file for CCAA protection. FTI Consulting Canada has been appointed to direct and supervise the CCAA process as Court-appointed monitor. BARBETTA LLC: Chapter 11 Plan Wins Court Approval ------------------------------------------------- The Hon. J. Rich Leonard of the U.S. Bankruptcy Court for the Eastern District of North Carolina confirmed the Chapter 11 Plan of Barbetta, LLC filed Oct. 18, 2011. The Plan contemplates a continuation of the Debtor's business. The Debtor intends to satisfy creditor claims from income earned through continued operations of leasing its real property. The Plan focuses on retaining the Debtor's properties that are financially feasible for the Debtor to maintain as rental properties and restructuring the obligations secured by such properties. General unsecured claims, estimated at $260,400, will be paid in full, in quarterly installments of $13,000 per quarter, over a period of 5 years. All payments will be distributed pro rata to allowed creditors within the Class. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/barbettallc.dkt96.pdf About Barbetta, LLC Based in Selma, North Carolina, Barbetta, LLC, along with its owners, Charles E. Hester and Barbetta G. Hester, own a combined total of over 70 properties throughout the state of North Carolina. A significant majority of these properties are located in Johnston County, North Carolina; however, the Debtor, along with the Hesters, own property in 23 separate counties across the state of North Carolina. All of the income producing properties are rental properties leased for either commercial or residential use. The Debtor is the surviving entity after a merger with Hester 1996 Family Limited Partnership, South Pollock Street Development & Sign Co., LLC, Hester 5, LLC, and Hester 8, LLC. The Debtor filed for Chapter 11 bankruptcy (Bankr. E.D.N.C. Case No. 11-04370) on June 6, 2011. Judge J. Rich Leonard presides over the case. Trawick H. Stubbs, Jr. and Stubbs & Perdue, P.A., represents the Debtor in its restructuring efforts. The Debtor tapped Charles E. Hester, as member-manager of the Debtor, and the accounting firm of David J. Bradley, CPA, as accountants. In its schedules filed together with the petition, the Debtor disclosed $24,889,321 in total assets and $12,855,596 in total liabilities. The petition was signed by Charles E. Hester, member manager. Charles and Barbetta Hester also filed a separate Chapter 11 petition (Bankr. E.D.N.C. Case No. 11-04375) on June 6, 2011. BEACON POWER: Compromise with DOE Stricken Off Cash Use Order ------------------------------------------------------------- Beacon Power Corporation, et al., notify the U.S. Bankruptcy Court for the District of Delaware that paragraph 12 of the final cash collateral order is not effective and is stricken from the cash collateral order. The final cash collateral order remains in full force and effect in all other respects. On Jan. 23, 2012, the U.S. Department of Justice informed the Debtors that it did not approve the compromise contained in paragraph 12 of the final cash collateral order, which referred to the terms of a proposed compromise between the Debtors and the U.S. Department of Energy. About Beacon Power Beacon Power Corporation, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-13450) on Oct. 30, 2011, in Delaware. Brown Rudnick and Potter Anderson & Corroon serve as the Debtors' 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. 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). BOWLES SUB: Plan Disclosure Hearing Continued Until May 5 --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Minnesota has continued until May 5, 2012, the hearing to consider adequacy of the Disclosure Statement explaining Bowles Sub Parcel D, LLC's Chapter 11 Plan. As reported in the Troubled Company Reporter on Jan. 31, 2012, the Plan anticipates that all property of the estate will be vested in the Reorganized Debtors. The Debtors will continue to operate Pool D Properties -- six parcels of real property located in Anoka, Dakota, and Hennepin Counties, Minnesota; may market the Pool D Properties for sale either individually or in one or more groups; and may seek alternative financing. The secured claim of Wells Fargo Bank N.A. as Lender will be paid in full over time with the income generated by the operation of the Pool D Properties, by the proceeds of the sale(s) of one or more of the Pool D Properties, with the proceeds of new financing, or with a combination of these options. The Lender will retain its liens to secure such payments. Steven B. Hoyt's lien in the properties will be released. Unsecured creditors will receive up to 100% of their claims, without interest, from distributions from excess cash generated by postpetition operations and from the sale(s) or refinancing and operations after the Lender is paid in full. The actual amount to be paid depends on the results of operations and sales or refinancing. The most likely range of recovery from operations is estimated to be 0% to 21%; the ultimate sales prices are unknown, but could result in full payment to unsecured creditors. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/FENTON_SUB_ds.pdf About Fenton Sub Parcel D and Bowles Sub Parcel D Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC jointly own industrial multi-tenant properties located in the Twin Cities. They are controlled by StoneArch II/WCSE Minneapolis Industrial LLC. StoneArch is the 100% member of Bowles Subsidiary, LLC and of Fenton Subsidiary LLC. Bowles Subsidiary LLC is then the 100% member of Bowles Sub Parcel D LLC, and Fenton Subsidiary LLC is the 100% member of Fenton Sub Parcel D, LLC. In 2007, StoneArch acquired various LLCs, which in turn owned 27 industrial multi- tenant properties located in the Twin Cities. The properties were divided into four separate pools: A, B, C, and D. Fenton Sub Parcel D and Bowles Sub Parcel D jointly own the properties in pool D. As tenants in common, Fenton Sub Parcel D has an undivided 74.5394% interest and Bowles Sub Parcel D has an undivided 25.4606% interest. The Pool D Properties consist of six parcels of real property located in Anoka, Dakota, and Hennepin Counties, Minnesota. The Debtors expect the Pool D Properties to be worth $13,135,656 as of the Petition Date. Although they are two separate legal entities, Fenton Sub Parcel D and Bowles Sub Parcel D have consistently been treated as one enterprise. Hoyt Properties, Inc., acts as agent in managing the Pool D Properties. Fenton Sub Parcel D and Bowles Sub Parcel D filed for Chapter 11 bankruptcy (Bankr. D. Minn. Case Nos. 11-44430 and 11-44434) on June 29, 2011. The Debtors' petitions were signed by Steven Bruce Hoyt, chief manager, who is also a debtor (Bankr. D. Minn. Case No. 11-43816). He is separately represented by Michael C. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman, P.A. The cases were originally assigned to Judge Dennis D. O'Brien and reassigned to Judge Robert J. Kressel as the cases are related to the Hoyt case, which was filed earlier before Judge Kressel. Cynthia A. Moyer, Esq., James L. Baillie, Esq., and Sarah M. Gibbs, Esq., at Fredrikson & Byron, PA, represent the Debtors. BEAU VIEW: Wants to Hire Prestige Luxury as Real Estate Broker -------------------------------------------------------------- Beau View of Biloxi, LLC asks the U.S. Bankruptcy Court for the District of Mississippi for permission to employ Prestige Luxury Properties, LLC as real estate broker. Prepetition, Charlene Moschella of Prestige has a contract with the Debtor for the exclusive right of sale listing agreement Beau View Towers Condominium Project. Prestige will market and sell condominium units at the Beau View Condominiums located at 2668 Beach Boulevard, Biloxi, Harrison County, Mississippi. The Debtor proposes to pay Prestige at 6% of gross sales price of each unit. To the best of the Debtor's knowledge, Prestige is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtor set an April 19, 2012, hearing at 1:30 p.m., on Prestige employment. Objections, if any, are due April 12. About Beau View of Biloxi Beau View of Biloxi, LLC, filed a bare-bones Chapter 11 petition (Bankr. S.D. Miss. Case No. 12-50141) on Jan. 26, 2012. The Mandeville, Louisiana-based debtor disclosed that it is a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101 (51B) with assets and debts of $10 million to $50 million. Judge Katharine M. Samson presides over the case. J. Walter Newman, IV, Esq., at Newman & Newman, serves as the Debtor's counsel. The petition was signed by Richard L. Landry, III, designated representative. According to the case docket, Beau View of Biloxi is required to file a Chapter 11 Plan and disclosure statement by May 25, 2012. Proofs of claim are due in the case by May 25, 2012. Government proofs of claim are due July 24, 2012. BERNARD L. MADOFF: Trustee's Firm Gets $44MM for June-Sept. Work ---------------------------------------------------------------- The Bankruptcy Court on Monday approved applications for interim compensation filed by bankruptcy professionals working for Irving H. Picard, as trustee for the substantively consolidated SIPA liquidation proceedings of Bernard L. Madoff Investment Securities LLC and the bankruptcy estate of Bernard L. Madoff, for the period from June 1, 2011, to Sept. 30, 2011. Mr. Picard's law firm, Baker & Hostetler, L.L.P., was awarded $43,170,634 in fees and $1,245,333 in expenses for the billing period. Baker & Hostetler has billed the Madoff estate $273,066,911 since the start of the proceedings and has incurred $6,149,828 in expenses. A list of the firms and the corresponding fees and expenses approved by the Court is available at http://is.gd/hDf2nC Meanwhile, the Bankruptcy Court will hold an Avoidance Action Omnibus Hearing for April 25, 2012 at 10:00 a.m. Mr. Picard will file a report of the status of each of the avoidance actions scheduled to be heard. 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. 17, 2012 and in the 38 months since his appointment, the SIPA Trustee has recovered or entered into agreements to recover more than $9 billion, representing roughly 52% of the roughly $17.3 billion in principal estimated to have been lost in the Ponzi scheme by BLMIS customers who filed claims. The recoveries exceed prior restitution efforts related to Ponzi schemes both in terms of dollar value and percentage of stolen funds recovered. Pro rata distributions from the Customer Fund to BLMIS customers whose claims have been allowed by the SIPA Trustee totaled $325.7 million. 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. CARBON ENERGY: Kelvin Buchanan Appointed as Chapter 11 Trustee -------------------------------------------------------------- The U.S. Bankruptcy Court approved the appointment of Kelvin J. Buchanan as Chapter 11 trustee in the bankruptcy case of Carbon Energy Holdings LLC and Carbon Energy Reserve Inc. Nicholas Strozza, the acting U.S. Trustee for the District of Nevada, selected Mr. Buchanan upon the Court's directive. The acting U.S. Trustee attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The Court authorized the appointment of a Chapter 11 Trustee upon the request of creditor Beartooth Land Company, LP. The Court, however, denied its Beartooth's request to convert the case to Chapter 7. As reported by the Troubled Company Reporter on Dec. 27, 2011, Beartooth sought conversion or, in the alternative, appointment of a Chapter 11 trustee in the Debtors' case. Beartooth said it has offered to purchase the Debtors' sole asset for a gross purchase price of $15 million. Beartooth noted that the purchase price is more than sufficient to pay all creditors in full and provide for a return to equity. The Debtors' controlling shareholders and management remain in a deadlock, unable to move these cases forward and realize any return for Debtors' constituents. Beartooth argued it is in the best interests of all parties-in- interest to have an independent trustee appointed to liquidate the Debtors' assets. Beartooth is represented by Brett A. Axelrod, Esq., and Kimberly P. Stein, Esq., at Fox Rothschild LLP. As reported in the TCR on Jan. 27, 2012, Carbon Energy Holdings and Carbon Energy Reserve asked the Bankruptcy Court to deny Beartooth's request because it is premature and is not supported by the facts of the case. Carbon Energy's only asset of significance is its ownership interest in Carbon Energy Reserve, which in turn owns certain real property and a large deposit of coal located on approximately 8,200 contiguous acres of real property in Carbon County, Montana. The Debtors denied Beartooth's allegation that they are not moving their bankruptcy cases forward. The Debtors said they have been diligently trying to complete the required financial reports and produce a plan of reorganization. Contrary to Beartooth's assertions, the Debtors argue that the only way to maximize value for their property is to obtain the highest and best offer for the Coal Rights, adding that "Beartooth's only interest in this case is to obtain the property as cheaply as possible." About Carbon Energy Holdings Based in Wickenburg, Arizona, Carbon Energy Holdings LLC and Carbon Energy Reserve Inc. filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case Nos. 11-52099 and 11-52101) on June 28, 2011. Judge Bruce T. Beesley presides over the cases. Carbon Energy Holdings Inc. disclosed $0 in assets and $146,270 in liabilities in its schedules filed in court. Carbon Energy Reserve Inc. scheduled $40,000,000 in assets and $2,009,573 in liabilities. Kolesar & Leatham Chtd. acts as the Debtors' general counsel. CARBON ENERGY: Chapter 11 Trustee Taps McDonald Carano as Counsel ----------------------------------------------------------------- Kelvin J. Buchanan, the Chapter 11 Trustee in the bankruptcy case of Carbon Energy Holdings LLC and Carbon Energy Reserve Inc., asks for permission from the U.S. Bankruptcy Court to employ Kaaran E. Thomas, Sylvia Harrison, and Lisa Wiltshire together with other partners and associates of McDonald Carano Wilson LLP as bankruptcy counsel. The scope of MCW's services will include assistance in negotiation and preparation of sales proceedings, examination and preparation of records and reports required by the Bankruptcy Code; Federal Rules of Bankruptcy Procedure and Local Bankruptcy Rules; preparation of motions, applications, orders and other pleadings; identification of claims and causes of action assertable by the Debtors and their Estates; examination of claims against the Estates; assist the Trustee in his negotiations with Debtors and other parties-in-interest; and other legal matters as may arise in connection with the Trustee duties. The firm's rates are: Personnel Rates --------- ----- Ms. Thomas $450 Ms. Harrison $375 Ms. Wiltshire $250 For other partners/ associates $225 to $450 MCW attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Carbon Energy Holdings Based in Wickenburg, Arizona, Carbon Energy Holdings LLC and Carbon Energy Reserve Inc. filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case Nos. 11-52099 and 11-52101) on June 28, 2011. Judge Bruce T. Beesley presides over the cases. Carbon Energy Holdings Inc. disclosed $0 in assets and $146,270 in liabilities in its schedules filed in court. Carbon Energy Reserve Inc. scheduled $40,000,000 in assets and $2,009,573 in liabilities. Kolesar & Leatham Chtd. acts as the Debtors' general counsel. CATALINA MARKETING: S&P Affirms 'B+' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on St. Petersburg, Fla.-based Catalina Marketing Corp. and parent Checkout Holding Corp. to negative from stable. "At the same time, we affirmed our 'B+' corporate credit rating on the company, along with all related issue-level ratings on the company's debt," S&P said. "In addition, we assigned the extended portion of the company's term loan due October 2017 (amount to be determined) an issue- level rating of 'BB-' with a recovery rating of '2', indicating our expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default," S&P said. "The outlook revision reflects our view that near-term operating trends at Catalina will remain weak," said Standard & Poor's credit analyst Chris Valentine. "We believe that that the company's credit measures could weaken further in 2012, and leverage could rise above our threshold of 6.5x for the current rating. The current refinancing transaction is leverage-neutral, while EBITDA coverage of interest pro forma for the transaction declines slightly due to higher interest expense," S&P said. "The 'B+' corporate credit rating on Catalina reflects our view of the company's fairly aggressive financial policy and the competitive nature of the consumer promotion industry. We view Catalina's business risk profile as 'fair', in light of limited direct competition in its U.S.-based point-of-sale (POS) marketing communications segment, its high customer renewal rates, and the business' relatively high barriers to entry. We continue to assess the company's financial risk profile as 'highly leveraged' (based on our criteria), reflecting Catalina's high capital investment requirements, high debt leverage, and an aggressive financial policy that has led to special dividends in the past," S&P said. "The negative outlook reflects our expectation that the company's operating performance will remain under pressure over the near term. We could lower the rating if it appears likely that EBITDA declines will not moderate over the next 12 months and that adjusted leverage will remain above our target on a sustained basis. We believe this could occur if EBITDA declines at a mid- single-digit percentage rate in 2012," S&P said. "We could also lower the rating if we become convinced that a long-term structural shift is the cause of recent operating weakness. We could revise the outlook back to stable if we become convinced that operating trends have stabilized, resulting in a more stable earnings pattern," S&P said. CENGAGE LEARNING: S&P Lowers Corporate Credit Rating to 'B-' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Stamford, Conn.-based Cengage Learning Holdings II L.P. to 'B-' from 'B'. "At the same time, we assigned the extended portion of subsidiary Cengage Learning Acquisitions Inc.'s term loan due 2017 and revolving credit facility due 2017 (amount to be determined) issue-level ratings of 'B' with recovery ratings of '2', indicating our expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default. The outlook is stable," S&P said. "The transaction extends the maturity of the majority of term debt by three years to July 2017 and revolving credit to March 2017 from July 2013. Cengage is offering the extending term loan lenders repayment of 30% of their loans at par, which is a condition to the amendment being effective. Total debt was roughly $5.4 billion as of Dec. 31, 2011," S&P said. "The downgrade reflects the increase in the average cost of debt as a significant risk, as the transaction, while extending some of the company's debt maturities, diminishes pro forma EBITDA coverage of interest expense and discretionary cash flow," said Standard & Poor's credit analyst Hal Diamond. He added, "Also, the company will need to refinance its remaining near-term maturities over the next two years, which could further reduce interest coverage and discretionary cash flow." "The rating outlook is stable. Prospects of increasing enrollments over the intermediate term, relatively stable operating performance, and positive discretionary cash flow generation should be able to slowly reduce leverage. We could downgrade the rating to 'CCC+' if we become convinced that revenue and EBITDA will not grow as we expected, leverage will increase above 9x, or discretionary cash flow will swing negative. This scenario could occur if enrollments decline or pressure increases from textbook rentals, and weakness in the library reference business continues. In this case, an EBITDA decline of 10% over the next year would reduce pro forma EBITDA coverage of total interest (after prepublication costs) to only 1.1x. Although unlikely over the near term, we could raise the rating to 'B' if the company restores sustainable EBITDA growth, generates increasing discretionary cash flow, and restores interest coverage to about 1.5x," S&P said. CENTENE CORPORATION: Moody's Issues Summary Credit Opinion ---------------------------------------------------------- Moody's Investors Service issued a summary credit opinion on Centene Corporation and includes certain regulatory disclosures regarding its ratings. The release does not constitute any change in Moody's ratings or rating rationale for Centene Corporation. Moody's current ratings on Centene Corporation are: Long Term Corporate Family Ratings (domestic currency) ratings of Ba2 Senior Unsecured (domestic currency) ratings of Ba2 Senior Unsecured Shelf (domestic currency) ratings of (P)Ba2 Subordinate Shelf (domestic currency) ratings of (P)Ba3 Ratings Rationale Moody's Baa2 insurance financial strength rating (IFS) of Centene Corporation's (Centene) operating subsidiaries and Ba2 senior debt rating of Centene are based primarily on the company's concentration in the Medicaid market, acquisitive nature, and moderate level of financial leverage, offset by its multi-state presence, expansion into other healthcare product opportunities, relatively stable financial profile and adequate capitalization. Headquartered in St. Louis, Missouri, Centene provides Medicaid and Medicaid-related programs to organizations and individuals through government-subsidized programs including Medicaid, Supplemental Security Income, Foster Care, Medicare Special Needs Plans and the State Children's Health Insurance Program. The company currently has health plans in twelve states (Indiana, Wisconsin, Texas, Arizona, Ohio, Georgia, Florida, Massachusetts, Mississippi, Illinois, Kentucky and South Carolina). Centene also provides national individual health insurance through Celtic Insurance Company, and specialty service products including behavioral health, care management software, health insurance exchanges, life and health management, long-term care programs, managed vision, telehealth services and pharmacy benefits management to state programs, healthcare organizations, employer groups and other commercial organizations, as well as to its subsidiaries. Through expansions into new states, as well as through acquisitions, the company has grown to cover 1.6 million members as of September 30, 2011. The company markets under local brands in each of its markets; however, it maintains strong and conservative centralized management oversight of the financial and operational functions. The company is adequately capitalized at approximately 187% NAIC risk-based capital (RBC) at company action level on a consolidated basis. While Centene has a good track record in the Medicaid market and has worked closely with the states in designing programs and establishing reimbursement levels for healthcare plans, there are unique risks associated with this business. First, each of the state contracts is renewed on a periodic basis. The loss of any one of these contracts could have a considerable impact on the revenues and earnings of Centene. Second, the Medicaid business is very reliant on reputation and an operating problem in one state could jeopardize the Medicaid contract in other states. However, the company's health plans operate with separate local names to help mitigate this risk. Lastly, Moody's has had concerns with respect to the level of reimbursements to managed care companies as states fall under budgetary and political pressures. While rate increases have been under pressure over the last two years, it appears that states have adhered to actuarial valuations in determining reimbursement levels. It should also be noted that healthcare reform legislation, which will increase the number of persons eligible for Medicaid, has increased interest among states in Medicaid managed care options, providing growth opportunities for Centene. Rating Outlook The rating outlook for Centene and its subsidiaries is stable. What to Watch For - The level of Medicaid rate increases provided to Centene by the states - Additional Healthcare Reform regulations impacting Medicaid - A movement by more states to transfer their Medicaid populations to managed care programs. What Could Change the Rating - Up The following could lead to a rating upgrade: - A sustained increase in the NAIC RBC ratio to at least 200% of company action level, - A reduction in the company's debt to capital ratio to below 35% (where debt includes operating leases), - An increase in EBITDA interest coverage above 10x, - Maintaining specialty segment earnings in the range of 25% of total earnings. What Could Change the Rating - Down The following could result in a rating downgrade: - A loss or impairment of one or more of Centene's Medicaid contracts, - EBITDA interest coverage falling below 6x, - An increase in the debt to EBITDA ratio above 3x, or - An increase in the overall annual health benefits ratio above 86%. The principal methodology used in this rating was Moody's Rating Methodology for U.S. Health Insurance Companies published in May 2011. CENTRAL PLAINS: Moody's Cuts Rating on Revenue Bonds to 'B2' ------------------------------------------------------------ Moody's Investors Service has downgraded the rating of Central Plains Energy Project Gas Project Revenue Bonds, Series 2007A&B (Project No. 1) to B2 from Ba3 on review for downgrade. The downgrade results from the presence of a repurchase agreement provided by MBIA Inc. (B2) that is also insured by MBIA Insurance Corporation (B3 under review for downgrade) in which funds needed for debt service payments are invested. Principal Methodology Used The principal methodologies used in assigning the rating were; (i) Methodology Update: Ratings that Rely on Guaranteed Investment Contracts and (ii) Gas Prepayment Bond Methodology both of which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered in the process of rating this issue can also be found in the Credit Policy & Methodologies directory. CHEF SOLUTIONS: Has Until May 1 to Decide on Unexpired Leases ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended until May 1, 2012, Chef Solutions Inc., now known as Food Processing Liquidation Holdings, LLC's time to assume or reject unexpired leases of nonresidential real property. About Chef Solutions Chef Solutions, through subsidiary Orval Kent Food, is the second largest manufacturer in North America of fresh prepared foods for retail, food service and commercial channels. Chef Solutions and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-13139) on Oct. 4, 2011. Debtor Orval Kent Food Company disclosed $82,902,336 in assets and $126,085,311 in liabilities in its schedules. Judge Kevin Gross presides over the case. Lawyers at Richards, Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel. Donlin Recano is the claims and notice agent. Piper Jaffray & Co. has been hired as investment banker. PricewaterhouseCoopers serves as financial advisor. Lowenstein Sandler PC and Polsinelli Shughart serve as counsel to the creditors' committee appointed in the case. Mesirow Financial Consulting, LLC, is the financial advisor. CHEF SOLUTIONS: Has Until May 1 to Propose Chapter 11 Plan ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended Chef Solutions Inc., now known as Food Processing Liquidation Holdings, LLC's exclusive periods to file and solicit acceptances for the proposed a Chapter 11 Plan until May 1, 2012, and July 1, respectively. As reported in the Troubled Company Reporter on Feb. 8, 2012, the Debtors told the Court that they have been working closely with the statutory committee of unsecured creditors to ensure that the Debtors' assets are liquidated and distributed in a manner that is acceptable to the Debtors' general unsecured creditors. According to the Debtors, these efforts may be lost if the Exclusivity Periods are not extended as requested. About Chef Solutions Chef Solutions, through subsidiary Orval Kent Food, is the second largest manufacturer in North America of fresh prepared foods for retail, food service and commercial channels. Chef Solutions and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 11-13139) on Oct. 4, 2011. Debtor Orval Kent Food Company disclosed $82,902,336 in assets and $126,085,311 in liabilities in its schedules. Judge Kevin Gross presides over the case. Lawyers at Richards, Layton & Finger, P.A., serve as the Debtors' bankruptcy counsel. Donlin Recano is the claims and notice agent. Piper Jaffray & Co. has been hired as investment banker. PricewaterhouseCoopers serves as financial advisor. Lowenstein Sandler PC and Polsinelli Shughart serve as counsel to the creditors' committee appointed in the case. Mesirow Financial Consulting, LLC, is the financial advisor. CHEMBULK NEW YORK: Files Chapter 15 to Avoid Seizure of Vessels --------------------------------------------------------------- Singapore-based PT Berlian Laju Tanker Tbk filed Chapter 15 bankruptcy petitions in New York for subsidiaries (Bankr. S.D.N.Y. Lead Case No. 12-11007) to prevent creditors from seizing the company's vessels when they call on U.S. ports. Cosimo Borrelli, recently appointed vice president for restructuring for PT Berlian, signed the Chapter 15 petitions for Chembulk New York Pte Ltd and 12 other entities. The Berlian group operates 72 vessels, of which 50 are owned. The vessels owned by Chembulk, et al., are mortgaged to a consortium of banks comprising BNP Paribas, ING Bank N.V., NIBC Bank Ltd., Nordea Bank Finland Plc, Standard Chartered Bank and DnB Nor Bank ASA, Singapore Branch as security for sums borrowed under a $685 million loan agreement dated Feb. 18, 2011. The financial crisis in the United States and Europe that began in 2008 caused companies in the global shipping, industry, including the Berlian Group, to suffer significant financial difficulties. In January, the Berlian Group violated covenants to maintain cash ratios under the $685 million loan agreement and announced that some subsidiaries failed to pay certain charter hires. The Berlian Group later declared a "standstill on payment of its financial obligations." FTI Consulting was tapped as financial advisor. Since the declaration of the standstill, creditors have taken steps to arrest certain vessels operated by companies in the Berlian Group. In order to prevent ship arrests and other collection efforts, the Berlian Group initiated proceedings in the High Court of the Republic of Singapore on March 12, 2012. The Singapore court entered orders prohibiting for three months any arrest of vessels or collection effort. The Berlian Group filed the Chapter 15 petitions to obtain entry of an order enjoining creditors from seizing vessels that are at port in the United States. The Debtors do not have assets in the U.S. other than the transitory basis vessels that are in the U.S. CHINA PRECISION: Gets NASDAQ Bid Price Non-Compliance Notice ------------------------------------------------------------ China Precision Steel, Inc., a niche precision steel processing company principally engaged in producing and selling high precision, cold-rolled steel products, announced today that it received a letter from the listing qualifications department staff of The NASDAQ Stock Market LLC, granting China Precision Steel an additional 180 days, or until Sept. 10, 2012, to regain compliance with NASDAQ's minimum bid price requirement. On Sept. 16, 2011, China Precision Steel received a letter from NASDAQ, notifying the Company that for 30 consecutive business days the bid price of its common stock had closed below $1.00 per share, the minimum closing bid price required by the continued listing requirements set forth in Listing Rule 5450(a)(1), and that, pursuant to Listing Rule 5810(c)(3)(A), China Precision Steel has 180 calendar days, or until March 14, 2012, to regain compliance with the minimum bid price requirement. On March 15, 2012, the Company received a second letter from NASDAQ notifying the Company that it had not regained compliance during the initial 180-day grace period, but that NASDAQ was granting the Company an additional 180-day period to regain compliance with the minimum bid price requirement. NASDAQ's determination was based on the Company having met the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the NASDAQ Capital Market, with the exception of the bid price requirement, and on the Company's written notice to NASDAQ of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split if necessary. The notice has no effect at this time on the listing of China Precision Steel's common stock, which will continue to trade under the symbol "CPSL." If China Precision Steel cannot demonstrate compliance with Rule 5450(a)(1) by Sept. 10, 2012, NASDAQ will provide notice to China Precision Steel that its securities may be delisted. At that time, China Precision Steel may appeal NASDAQ's decision to a Listing Qualifications Panel. About China Precision China Precision Steel Inc. is a niche precision steel processing company principally engaged in the production and sale of high precision cold-rolled steel products and provides value added services such as heat treatment and cutting medium and high carbon hot-rolled steel strips. China Precision Steel's high precision, ultra-thin, high strength (7.5 mm to 0.05 mm) cold-rolled steel products are mainly used in the production of automotive components, food packaging materials, saw blades and textile needles. The Company primarily sells to manufacturers in the People's Republic of China as well as overseas markets such as Nigeria, Thailand, Indonesia and the Philippines. China Precision Steel was incorporated in 2002 and is headquartered in Sheung Wan, Hong Kong. CIGNA CORPORATION: Moody's Issues Summary Credit Opinion -------------------------------------------------------- Moody's Investors Service issued a summary credit opinion on CIGNA Corporation and includes certain regulatory disclosures regarding its ratings. This release does not constitute any change in Moody's ratings or rating rationale for CIGNA Corporation. Moody's current ratings on CIGNA Corporation are: Senior Unsecured (domestic currency) ratings of Baa2 Senior Unsecured MTN Program (domestic currency) ratings of (P)Baa2 Senior Unsecured Shelf (domestic currency) ratings of (P)Baa2 Subordinate Shelf (domestic currency) ratings of (P)Baa3 Junior Subordinate Shelf (domestic currency) ratings of (P)Baa3 Preferred Shelf (domestic currency) ratings of (P)Ba1 Commercial Paper (domestic currency) ratings of P-2 Ratings Rationale Moody's A2 insurance financial strength ratings of Connecticut General Life Insurance Company (CG Life), CIGNA Health and Life Insurance Company (CHLIC), Life Insurance Company of North America (LINA) and three operating subsidiaries of HealthSpring (acquired on January 31, 2012), and the Baa2 senior unsecured debt rating of CIGNA Corp. (CIGNA; NYSE:CI) are based primarily on the company's strong business profile driven by its strong national presence and brand name, large membership base, and its broad range of group benefits products. The majority of CIGNA's customer base consists of self-insured employers, which mitigates the risk of unanticipated increases in healthcare costs. The rating is also supported by a solid financial profile characterized by the company's earnings performance, strong capitalization, and liquidity position, offset to a degree by high financial leverage (adjusted debt to capital, where debt includes unfunded pension liabilities and operating leases). These strengths are offset by the uncertainty associated with the legal challenges and regulatory environment surrounding healthcare reform and the impact these may have on the sector. CIGNA's long term growth strategy involves growth in targeted markets and products and pursuit of additional opportunities in high growth markets. With respect to this strategy, CIGNA has expanded its international focus highlighted by its acquisition of Vanbreda International during 2010 and into Medicare Advantage with the acquisition of HealthSpring in 2012. With respect to Vanbreda, Moody's considers this diversification as a credit positive, as it provides a non-regulated earnings stream outside of CIGNA's domestic healthcare business. The HealthSpring acquisition also provides significant diversity to both CIGNA's premium and earnings streams with growth opportunities in the domestic senior market, although the Medicare Advantage market will be subject to reduced reimbursement rates and further regulation under the reform law. Prior to the HealthSpring transaction, the company had targeted modest sized acquisitions that have complemented its strategy without being disruptive to CIGNA's operations. Additionally CIGNA's equity exposure in its run-off reinsurance operations (in particular, the guaranteed minimum death benefit (GMDB) within variable annuities) continues to be a concern. Although the risk of a significant adverse financial impact to the company has been reduced as a result of a decreasing number of policies and an equity hedge program instituted by CIGNA, the risk has not been entirely eliminated. Recent economic conditions have also highlighted the sensitivity of CIGNA's under-funded position of the company's defined pension plan. A combination of lower than expected asset returns and lower interest rates used in valuations has increased CIGNA's financial leverage from Moody's analytic viewpoint, where debt includes operating leases and unfunded pension liabilities. While the actions CIGNA has taken in freezing the pension plan and making voluntary contributions to the plan have had a positive impact, the large remaining unfunded liability and the low interest rate environment continue to place pressure on financial flexibility and the company's ratings. CIGNA, which is incorporated in Delaware and headquartered in Connecticut, is one of the largest healthcare and related benefits organizations in the United States. Domestically, the company offers a large portfolio of benefit products including health care products and services, group disability, life and accident insurance. In addition, CIGNA's international operations offer healthcare, life, accident and supplemental health insurance products and services. Rating Outlook The rating outlook on all of CIGNA's ratings is stable. What to Watch For: - Ability to price appropriately given changes in medical utilization - Larger than expected volatility in run-off Reinsurance segment - Newly issued or modified Healthcare Reform regulations. - Integration of HealthSpring and Medicare Advantage results What Could Change the Rating - Up - EBITDA margins remain above 10% with a consolidated RBC ratio of at least 300% CAL - Adjusted financial leverage is reduced to 40%, - Annual membership growth of at least 2% - EBITDA interest coverage approaching 9 times What Could Change the Rating - Down - EBITDA earnings margins below 5% - EBITDA coverage ratio below 5 times - Adjusted financial leverage increasing above 50% - Consolidated RBC ratio below 250% CAL - Annual reinsurance losses exceeding 10% of equity - Integration problems that result in a >10% loss of membership and/or a >10% reduction in earnings. The principal methodology used in this rating was Moody's Rating Methodology for U.S. Health Insurance Companies published in May 2011. COREL CORP: Moody's Puts 'Caa1' CFR Under Review for Downgrade -------------------------------------------------------------- Moody's Investors Service placed Corel Corporation's ratings under review for possible upgrade, including its Caa1 Corporate Family Rating (CFR) and the Caa1 rating for the company's existing senior secured credit facility. Corel is in the process of amending and extending all or a portion of its approximately $73 million of senior secured term loans by two years to May 2014. As part of the ratings actions, Moody's also assigned a Caa1 rating to the extended tranche of the company's senior secured credit facility and placed the rating on review for possible upgrade. Ratings Rationale The extension of maturity for a sizeable portion of Corel's existing credit facility would remove the overhang from the imminent debt maturity and provide the company more time to improve its profitability by deemphasizing its cash-absorptive WinDVD product line. Moody's expects that synergies from the acquisition of Roxio assets coupled with the operating efficiencies from Corel's digital media product segment should improve the company's cash flow generation. The extension of debt maturities and Corel's improved cash flow should provide the company incremental flexibility to make tuck-in acquisitions to boost its cash flows from consolidation of mature products. Moody's could upgrade Corel's CFR, PDR and debt instrument ratings to B3 if the transaction closes consistent with the proposed terms, including maintaining adequate levels of cash at the close to fund the debt repayment for any unextended tranche and to provide cushion for potential operating requirements over the next 12 to 15 months Moody's could confirm the Caa1 CFR if the company fails to complete the refinancing or in Moody's assessment Corel's liquidity remains weak upon the close of the transaction. If the entire balance of the existing secured credit facility is extended, then the Caa1 rating on such facility will be withdrawn. The ratings reflect Corel's challenges in driving revenue and EBITDA growth from a portfolio of mature products, the company's small operating scale, and its modest market shares in key product segments which are dominated by Microsoft Corporation (rated Aaa) and Adobe Systems (rated Baa1). The ratings are supported by Corel's improved prospective free cash flow, low debt leverage (1.7x Total Debt-to-EBITDA, Moody's adjusted) pro forma for the proposed transaction, the company's diverse and well-known product portfolio of desktop applications with a sizeable installed base of customers globally, and its portfolio of patents. Moody's has taken the following ratings actions: Issuer: Corel Corp. On Review for Possible Upgrade: Corporate Family Rating -- Placed on Review for Possible Upgrade, currently Caa1 Probability of Default Rating -- Placed on Review for Possible Upgrade, currently Caa1 Unextended Senior Secured Bank Credit Facility due May 2012 -- Placed on Review for Possible Upgrade, currently Caa1 LGD3 (48%) Assignments: Extended Senior Secured Bank Credit Facility due May 2014 -- Assigned Caa1, LGD3 47%; Placed Under Review for further Possible Upgrade Outlook Actions: Outlook, Changed To Rating Under Review From Negative Corel Corporation is a packaged software vendor that develops and markets consumer software for the office productivity, graphics and digital media markets. The company's well-known brands include Word Perfect, WinZip, CorelDRAW, Paint Shop Pro and WinDVD. The principal methodology used in rating Corel Corp. was the Global Software Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CRET RESTORATION: Hearing on Case Dismissal Bid Set for April 9 --------------------------------------------------------------- The hearing on a motion to dismiss the bankruptcy case of CRET Restoration, Inc. is scheduled for April 4, 2012, at 2:30 p.m. at Courtroom 3-C, Greenbelt. CRET Restoration Inc., based in Fort Washington, Maryland, was placed in involuntary Chapter 11 bankruptcy (Bankr. D. Md. Case No. 12-10648) by creditors M. Evelyn Jones, A Powell Management LLC, CDM Associates Inc., and NKB Investment Group on Jan. 13, 2012. Judge Wendelin I. Lipp presides over the case. D.R. HORTON: S&P Keeps 'BB-' Corp Credit Rating; Outlook Positive ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on D.R. Horton Inc. to positive from stable. "At the same time, we affirmed our ratings on the company, including the 'BB-' corporate credit and issue-level ratings on the company's debt. Our recovery rating on the company's unsecured senior notes is '3', indicating a meaningful (50%-70%) recovery in the event of a payment default," S&P said. "The outlook revision reflects our expectation that moderate revenue growth and improved profitability over the balance of 2012 could materially improve EBITDA-based credit metrics," said credit analyst Susan Madison. "In our view, if D. R. Horton posts 10% year-over-year growth in 2012 homebuilding revenue while modestly expanding adjusted EBITDA margins to the mid 7% area, adjusted debt-to-EBITDA should decline to the mid-5x area over the next six to 12 months, down from 6.8x at Dec. 31, 2011." Ms. Madison stated that the positive outlook revision also assumes that D.R. Horton can fund investment in land and inventory necessary to achieve 10% revenue growth while maintaining a cash balance of more than $500 million. "Our positive outlook acknowledges our expectation that credit metrics will improve to the mid-5x area by year end 2012, with further improvement expected in 2013. We could raise our corporate credit rating to 'BB' if we think D.R. Horton is poised to achieve low double-digit revenue growth in 2013 and adjusted EBITDA margins in the mid-7% area. However, we could revise the outlook back to stable if sales growth is more moderate than we currently expect (i.e., it falls below 5%) and adjusted EBITDA margins decline to the high 6% area," S&P said. DELPHI AUTOMOTIVE: S&P Raises Corporate Credit Rating to 'BB+' -------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Delphi Automotive PLC (the parent of Delphi Corp.), to 'BB+' from 'BB'. The rating outlook is stable. "At the same time, we raised our ratings on the senior secured debt of Delphi Corp., the borrower and operating company, to 'BBB' from 'BBB-' and the senior unsecured debt of Delphi Corp. to 'BB+' from 'BB'. The recovery ratings are unchanged. Delphi Corp. is based in Troy, Mich., although the parent company is incorporated in Jersey," S&P said. "The upgrade on Delphi reflects our assessment of Delphi's financial risk profile as 'intermediate' and the business risk profile as 'fair,' according to our criteria definitions," said Standard & Poor's credit analyst Nancy Messer. She added, "Our financial risk assessment incorporates our assumption that current leverage and free cash flow is sustainable." "We currently expect that Delphi's lease-adjusted total debt to EBITDA will remain at about 2x and that adjusted free operating cash flow to total debt will remain more than 10% during a normal downturn and at least 15% in stronger times (adjusted was 28% for 2011). Our assumptions for 2012 include a 1.6% revenue increase and an EBITDA margin of 13.7%. Credit metrics resulting from these assumptions include free operating cash flow (after capital spending) to adjusted total debt of more than 50%. We estimate that leverage for 2012 could decline to somewhat less than 1x. Still, for the longer term, we believe Delphi will operate at about 2x leverage, in order to optimize its capital structure," S&P said. "Our stable rating outlook on Delphi reflects our view that the company can maintain its competitive market position, sustain its EBITDA margin at or near 13.7%, and successfully withstand the weakness in Europe. In particular, we think the company has solid market positions for powertrain, electrical, and electronic architecture components. We assume the company will maintain leverage at no more than 2x and free cash flow generation to adjusted total debt of at least 10%, in a downturn. We assume Delphi's cost base improvements are permanent and, therefore, that the company can sustain adjusted margins of at least 13% in the existing environment of rising auto production volumes," S&P said. "Although we do not expect to do so in the next year, to raise the corporate credit rating to investment-grade we would need to believe that Delphi's business profile was 'satisfactory' under our criteria. Given the cyclicality of the auto industry, combined with consistent pricing pressures and exposure to volatile commodity costs, few rated North American auto suppliers have a 'satisfactory' business risk profile in our assessment. For example, we would need to believe that the company's business was even more resilient than we currently assume--perhaps because of greater customer diversity and products for which demand would continue to increase more than the industry norm," S&P said. "Also, we would likely need to observe that the shareholder base was much broader, that former creditors had moved on, and that financial policies would be consistent with a higher rating," S&P said. "Alternatively, we could lower the ratings if we believed auto industry markets would not improve as we currently assume, which could occur if the North American economic recovery falters or the European downturn is more severe than we currently observe. This would prevent the company from maintaining the financial measures that we would expect for the rating in the near term. For example, we could lower the ratings if we believed free operating cash flow to adjusted total debt would be less than 10%, perhaps because of flat revenues year-over-year in 2013 and a drop in gross margins to 22%. We could also lower the rating if the company used cash in any quarter for a reason we believed would be likely to persist. The financing of a transforming acquisition, which we have not incorporated into the rating, could also cause us to reassess our Rating," S&P said. DIPPIN' DOTS: Hearing on Further Access to Cash Tomorrow -------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Kentucky has continued until March 22, 2012, at 9:30 a.m., the hearing to consider Dippin' Dots, Inc.'s motion to use cash collateral. At a Feb. 23, 2012 hearing, Regions Bank and the Debtor agreed to extend the existing cash collateral order until March 22, 2012. As reported in the Troubled Company Reporter on Nov. 7, 2011, the Company sought permission from the Bankruptcy Court to use some of the cash collateral that secures the Regions Bank loan to enable it to continue operations. The company will use the cash to pay suppliers. According to the Company's proposed spending budget, it will need at least $23,000 to pay for liquid nitrogen alone through the end of the year. The liquid nitrogen is used to keep the ice cream dots below the necessary temperature of minus 40 degrees Fahrenheit. About Dippin' Dots Founded in 1988 by microbiologist Curt Jones, Dippin' Dots Inc. manufactures quirky and colorful ice cream beads, which are flash frozen using liquid nitrogen. It owns a 120,000-square-foot plant in Kentucky that can produce more than 25,000 gallons of frozen dots a day. It has about 140 Dippin' Dots retail locations, which are mostly controlled by franchisees, and agreements with 9,952 small vendors who sell the ice cream at fairs, festivals and sports games. Dippin' Dots isn't sold in grocery stores because of its extreme cooling requirements. Dippin' Dots filed a Chapter 11 petition (Bankr. W. D. Ky Case No. 11-51077) on Nov. 3, 2011 in Paducah, Kentucky. Judge Thomas H. Fulton presides over the case. Farmer & Wright, PLLC, represents the Debtor as Chapter 11 counsel. The Debtor disclosed $20,233,130 in assets and up to $20,233,130 in debts. The petition was signed by Curt Jones, president. Regions Bank, the Debtor's secured lender, is represented by Brian H. Meldrum, Esq., at Stites & Harbison PLLC. DIPPIN' DOTS: Wants to Incur $2MM DIP Loan from Fischer Ventures ---------------------------------------------------------------- Dippin' Dots, Inc., asks the U.S. Bankruptcy Court for the Western District of Kentucky for authority to obtain debtor-in-possession financing; and grant related security interest and priority claims. The Debtor related that at a Feb. 23, 2012, hearing, Regions Bank and the Debtor agreed to extend the existing cash collateral order until March 22, 2012. Through negotiations, Fischer Ventures, LLC, agreed to provide the Debtor with financing pursuant to the certain postpetition credit line. The terms of the agreement include: Borrower: Dippin Dots, Inc., revolving loan commitment, $2,000,000 in the aggregate. Use of Proceeds: The proceeds of these loans will be used to finance ordinary working capital expenses and ongoing administrative expenses of the borrow of the Chapter 11 case. Interest: Prime plus 3% per annum. Interest will adjust on the loan on a monthly basis and interest shall accrue and be due and payable on a monthly basis. Maturity: The earlier of the acceleration of the maturity upon the occurrence of default or Oct. 1, 2012. Liens and Priority Claims: The DIP lender will receive a priority lien on all outstanding accounts receivable generated after the date of approval of this action. Regions Bank objected to the terms of the DIP loan noting that the Debtor's motion contravenes both the letter and spirit of the Court's cash collateral order. It notes that the asset sale commitment by the Debtor is the sine qua non of the cash collateral order. Regions would not have consented without it. In addition, seeking to prime Regions with an additional loan is itself an event of default, the bank claims. About Dippin' Dots Founded in 1988 by microbiologist Curt Jones, Dippin' Dots Inc. manufactures quirky and colorful ice cream beads, which are flash frozen using liquid nitrogen. It owns a 120,000-square-foot plant in Kentucky that can produce more than 25,000 gallons of frozen dots a day. It has about 140 Dippin' Dots retail locations, which are mostly controlled by franchisees, and agreements with 9,952 small vendors who sell the ice cream at fairs, festivals and sports games. Dippin' Dots isn't sold in grocery stores because of its extreme cooling requirements. Dippin' Dots filed a Chapter 11 petition (Bankr. W. D. Ky Case No. 11-51077) on Nov. 3, 2011 in Paducah, Kentucky. Judge Thomas H. Fulton presides over the case. Farmer & Wright, PLLC, represents the Debtor as Chapter 11 counsel. The Debtor disclosed $20,233,130 in assets and up to $20,233,130 in debts. The petition was signed by Curt Jones, president. Regions Bank, the Debtor's secured lender, is represented by Brian H. Meldrum, Esq., at Stites & Harbison PLLC. EASTERN LIVESTOCK: Ch. 11 Trustee Taps Kroger Gardis as Auctioneer ------------------------------------------------------------------ James A. Knauer, the Chapter 11 trustee in the cases of Eastern Livestock Co., LLC, et al., asks the U.S. Bankruptcy Court for the Southern District of Indiana for permission to employ Ken Byrd Realty & Auction, Inc. as auctioneer. Ken Byrd will be auctioning the Debtors' certain real estate located in Harrison County, Indiana and commonly known as 8394 Tandy Road, Lanesville, Indiana. The trustee believes that allowing the successful bidder at the auction sale of the real estate to pay 10% of the winning bid at the auction, with the remaining 90% to be paid within 30 days will incentivize bidding and maximize the purchase price to be realized from the sale of the real estate. To the best of the trustee's knowledge, Ken Byrd is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The trustee also request that that the order approving the application waive the bond requirement contained in Rule-B-6005-1 because the trustee is unable to determine the gross proceeds likely to be realized from the sale of the real estate. About Eastern Livestock Eastern Livestock Co., LLC, was one of the largest cattle brokerage companies in the United States, with operations and assets located in at least 11 states. ELC was headquartered in New Albany, Indiana, with branch locations across several states. It shut operations in November 2010. On Dec. 6, 2010, creditors David L. Rings, Southeast Livestock Exchange, LLC, and Moseley Cattle Auction, LLC, filed an involuntary Chapter 11 petition (Bankr. S.D. Ind. Case No. 10-93904) for the Company. The creditors asserted $1.45 million in claims for "cattle sold," and are represented by Greenebaum Doll & McDonald PLLC. The Court entered an Order for Relief on Dec. 28, 2010. Judge Basil H. Lorch III, at the behest of the creditors, appointed a trustee to operate Eastern Livestock's business. The Chapter 11 trustee has tapped James M. Carr, Esq., at Baker & Daniels LLP, as counsel and Katz, Sapper & Miller, LLP, as accountants. BMC Group Inc. is the claims and notice agent. The Debtor has disclosed $81,237,865 in assets and $40,154,698 in papers filed in Court. An affiliate, East-West Trucking Co., LLC, filed a Chapter 7 petition (Bankr. S.D. Ind. Case No. 10-93799) on Nov. 23, 2010, estimating assets and debts of $1 million to $10 million. The petition was signed by Thomas P. Gibson, as manager. Michael J. Walro, appointed as Chapter 7 Trustee for East-West Trucking, has tapped James T. Young, Esq., at Rubin & Levin, P.C., in Indianapolis as counsel. Mr. Gibson, together with his spouse, Patsy M. Gibson, pursued a personal bankruptcy case (Bankr. S.D. Ind. Case No. 10-93867) in 2010. Kathryn L. Pry, the court-appointed trustee for the Gibson's Chapter 7 case, tapped Dale & Eke, P.C., as counsel. James A. Knauer was appointed as Chapter 11 trustee for the Debtor's estate. Faegre Baker Daniels, LLP represents the trustee. EASTERN LIVESTOCK: Kroger Gardis Tapped to Probe Unpaid Notes ------------------------------------------------------------- James A. Knauer, the Chapter 11 trustee in the cases of Eastern Livestock Co., LLC, et al., asks the U.S. Bankruptcy Court for the Southern District of Indiana for permission to employ the firm of Kroger, Gardis & Regas, LLP to serve as its special counsel. KGR's primary role as special counsel to the trustee will be to investigate and prosecute claims of the estate in the collection of certain Promissory Notes payable to the Debtors which remain unpaid, and the bringing of actions to avoid and subsequently recover prepetition preferential transfers pursuant to Sections 547 an 550 of the Bankruptcy Code. To the best of the trustee's knowledge, KGR is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Eastern Livestock Eastern Livestock Co., LLC, was one of the largest cattle brokerage companies in the United States, with operations and assets located in at least 11 states. ELC was headquartered in New Albany, Indiana, with branch locations across several states. It shut operations in November 2010. On Dec. 6, 2010, creditors David L. Rings, Southeast Livestock Exchange, LLC, and Moseley Cattle Auction, LLC, filed an involuntary Chapter 11 petition (Bankr. S.D. Ind. Case No. 10-93904) for the Company. The creditors asserted $1.45 million in claims for "cattle sold," and are represented by Greenebaum Doll & McDonald PLLC. The Court entered an Order for Relief on Dec. 28, 2010. Judge Basil H. Lorch III, at the behest of the creditors, appointed a trustee to operate Eastern Livestock's business. The Chapter 11 trustee has tapped James M. Carr, Esq., at Baker & Daniels LLP, as counsel and Katz, Sapper & Miller, LLP, as accountants. BMC Group Inc. is the claims and notice agent. The Debtor has disclosed $81,237,865 in assets and $40,154,698 in papers filed in Court. An affiliate, East-West Trucking Co., LLC, filed a Chapter 7 petition (Bankr. S.D. Ind. Case No. 10-93799) on Nov. 23, 2010, estimating assets and debts of $1 million to $10 million. The petition was signed by Thomas P. Gibson, as manager. Michael J. Walro, appointed as Chapter 7 Trustee for East-West Trucking, has tapped James T. Young, Esq., at Rubin & Levin, P.C., in Indianapolis as counsel. Mr. Gibson, together with his spouse, Patsy M. Gibson, pursued a personal bankruptcy case (Bankr. S.D. Ind. Case No. 10-93867) in 2010. Kathryn L. Pry, the court-appointed trustee for the Gibson's Chapter 7 case, tapped Dale & Eke, P.C., as counsel. James A. Knauer was appointed as Chapter 11 trustee for the Debtor's estate. The trustee is represented by: James M. Carr, Esq. Kevin Toner, Esq. Terry E. Hall, Esq. Harmony Mappes, Esq. Dustin R. DeNeal, Esq. FAEGRE BAKER DANIELS, LLP 300 N. Meridian Street, Suite 2700 Indianapolis, IN 46204-1782 Tel: (317) 237-0300 Fax: (317) 237-1000 E-mails: jim.carr@bakerd.com kevin.toner@bakerd.com terry.hall@bakerd.com harmony.mappes@bakerd.com dustin.deneal@bakerd.com Wendy W. Ponader, Esq. 600 East 96th Street, Suite 600 Indianapolis, IN 46240 Tel: (317) 569-9600 Fax: (317) 569-4800 E-mail: wendy.ponader@bakerd.com EASTMAN KODAK: Noteholders Balk at Photo Biz. Auction Rules ----------------------------------------------------------- The committee representing Eastman Kodak Co.'s noteholders questioned an aspect of the bid process, which it says could chill the bidding on the company's KODAK Gallery online photo services business. As reported in the March 8, 2012 edition of the TCR, Eastman Kodak and its debtor affiliates are asking Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York for permission to hold bidding in connection with the sale of its KODAK Gallery online photo services business. The bid process will allow potential buyers to match the $23.8 million offer from Shutterfly Inc., an Internet-based social expression and personal publishing service. Eastman Kodak will hold an auction on April 26 if it receives an offer from other bidders. A full-text copy of the sale agreement is available without charge at: http://bankrupt.com/misc/Kodak_ShutterflyAgreement.pdf The committee said Shutterfly should not be entitled to receive proposals from rival bidders and certain documents prior to the evaluation of those bids. "This early look confers a substantial advantage upon the stalking horse as it offers the stalking horse an exclusive window into any potential infirmities or issues with the bids or the bidders' inability or unwillingness to meet the bid requirements," the committee said in court papers. "The stalking horse's access to this information, which is not publicly available may give the appearance of impropriety, thereby potentially dissuading interested parties from proceeding to the bid stage and depressing the value of the Gallery assets," the committee said. The objection drew support from an indenture trustee Wilmington Trust N.A. "This bidding term should be removed from the proposed bidding procedures because it does not advance the bankruptcy estates' interest in creating a fair and competitive bidding environment that will maximize the value of the Gallery assets," the indenture trustee said. The Court was slated to consider the bid process at the March 20 hearing. A court hearing will be convened on April 30 to consider the sale of the online photo services business to the winning bidder. Separately, Eastman Kodak filed with the bankruptcy court a document containing changes to the proposed bidding terms. The revised bidding terms provide that the Debtors will determine whether a bidder who delivers a preliminary bid is a "Potential Bidder" and a "Qualified Bid" after consultation with the Official Committee of Unsecured Creditors, the Second Lien Noteholders Committee and the DIP Agent. A copy of the document is available without charge at: http://bankrupt.com/misc/Kodak_RevisedBidTerms.pdf About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. are not included in the filing and will continue to operate as usual. The Company, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Having invested significantly in research and development for over a century, Kodak has a vast portfolio of patents. In 1975, Kodak scientists invented the first digital camera. Kodak then went on to develop a vast collection of patented technologies to enhance digital image capture and processing, technologies that are used in virtually every modern digital camera, smartphone and tablet, as well as numerous other devices. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Kodak says it has "significant" legacy liabilities, which include $1.2 billion in non-U.S. pension liabilities, $1.3 billion of Other Post-Employment Benefit ("OPEB") liabilities and roughly $100 million in environmental liabilities. Kodak has outstanding funded debt in an aggregate amount of roughly $1.6 billion, consisting primarily of roughly: (a) $100 million outstanding under the first lien revolving credit facility plus an additional $96 million in face amount of outstanding letters of credit; (b) $750 million in principal amount of second lien secured notes; (c) $400 million in principal amount of convertible notes; and (d) $283 million in principal amount of other senior unsecured debt. Kodak also has roughly $425 million in outstanding trade debt. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). EASTMAN KODAK: Shareholders Want Own Committee ---------------------------------------------- Eastman Kodak Co.'s shareholders are seeking the appointment of a committee of equity security holders to better protect their interest in the company's bankruptcy. The shareholders, who claimed no one is advocating their interests, want their own committee where the cost of professionals will be paid by Eastman Kodak. The appointment of a committee will allow the shareholders to participate actively in the company's restructuring. The group's lawyer, Robert Stark, Esq., at Brown Rudnick LLP, in New York, said a shareholders committee should be appointed since there is possibility that Eastman Kodak is not insolvent. Mr. Stark said the value of the company's bankruptcy estate is not yet certain but there is already evidence that "strongly suggests equity value." Based on the company's own estimates, its assets are worth between $3.35 billion and $4.31 billion. This does not yet include Eastman Kodak's technology, which the group believes, could be worth billions. It is also unlikely that Eastman Kodak will have "any meaningful UK pension exposure," according to the shareholders. They are confident the company can restructure without terminating its U.S. pension plans and, therefore, avoid an underfunding liability. The group also asked the bankruptcy court not to consider the trading value of claims as an indication that Eastman Kodak is insolvent. Earlier, the company, along with the committees representing unsecured creditors and noteholders, used such argument in convincing the U.S. Trustee to deny the shareholders' bid to appoint their own committee. The U.S. Trustee's refusal prompted the shareholders to bring the matter to the bankruptcy court as an attempt to get the court to do what the U.S. Justice Department agency would not. Eastman Kodak also said on Tuesday that it is opposed to appointment of a shareholders committee at least for now, according to a Democrat and Chronicle article. "Our position is, fundamentally, that it is too early in the process to form an equity committee, particularly in view of the additional costs such a committee would impose," the March 14 article quoted Christopher Veronda, the company's spokesman, as saying. "We are committed to building a company that is successful in the marketplace -- an objective which precisely reflects our desire to obtain the best possible outcome for all our stakeholders. That is the best way to create value for all concerned," Mr. Veronda said. The motion for a shareholders' committee is on the court's calendar for April 18. Mr. Stark may be reached at: Robert J. Stark, Esq. BROWN RUDNICK LLP Seven Times Square New York, NY 10036 Tel: (212) 209-4800 Fax: (212) 209-4801 E-mail: rstark@brownrudnick.com About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. are not included in the filing and will continue to operate as usual. The Company, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Having invested significantly in research and development for over a century, Kodak has a vast portfolio of patents. In 1975, Kodak scientists invented the first digital camera. Kodak then went on to develop a vast collection of patented technologies to enhance digital image capture and processing, technologies that are used in virtually every modern digital camera, smartphone and tablet, as well as numerous other devices. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Kodak says it has "significant" legacy liabilities, which include $1.2 billion in non-U.S. pension liabilities, $1.3 billion of Other Post-Employment Benefit ("OPEB") liabilities and roughly $100 million in environmental liabilities. Kodak has outstanding funded debt in an aggregate amount of roughly $1.6 billion, consisting primarily of roughly: (a) $100 million outstanding under the first lien revolving credit facility plus an additional $96 million in face amount of outstanding letters of credit; (b) $750 million in principal amount of second lien secured notes; (c) $400 million in principal amount of convertible notes; and (d) $283 million in principal amount of other senior unsecured debt. Kodak also has roughly $425 million in outstanding trade debt. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). EASTMAN KODAK: Retiree Wants to Form Own Official Committee ----------------------------------------------------------- A group of Eastman Kodak Co. retired workers filed a motion with the U.S. Bankruptcy Court in Manhattan seeking appointment of a committee "to protect the interests of those receiving retiree benefits." The move comes after Eastman Kodak sought court approval to end payment of some retiree benefits as part of its cost-cutting measures. "Given the debtors' intention to terminate benefits and seek other modifications of their legacy liabilities a retiree committee is appropriate," said the retirees' lawyer, R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker LLC, in Birmingham, Alabama. The date for a hearing on the motion has not been set yet. Mr. Williams may be reached at: R. Scott Williams, Esq. HASKELL SLAUGHTER YOUNG & REDIKER LLC 2001 Park Place, Suite 1400 Birmingham, AL 35203 Tel: 205-251-1000 Fax: 205-324-1133 E-mail: rsw@hsy.com About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. are not included in the filing and will continue to operate as usual. The Company, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Having invested significantly in research and development for over a century, Kodak has a vast portfolio of patents. In 1975, Kodak scientists invented the first digital camera. Kodak then went on to develop a vast collection of patented technologies to enhance digital image capture and processing, technologies that are used in virtually every modern digital camera, smartphone and tablet, as well as numerous other devices. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Kodak says it has "significant" legacy liabilities, which include $1.2 billion in non-U.S. pension liabilities, $1.3 billion of Other Post-Employment Benefit ("OPEB") liabilities and roughly $100 million in environmental liabilities. Kodak has outstanding funded debt in an aggregate amount of roughly $1.6 billion, consisting primarily of roughly: (a) $100 million outstanding under the first lien revolving credit facility plus an additional $96 million in face amount of outstanding letters of credit; (b) $750 million in principal amount of second lien secured notes; (c) $400 million in principal amount of convertible notes; and (d) $283 million in principal amount of other senior unsecured debt. Kodak also has roughly $425 million in outstanding trade debt. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). EASTMAN KODAK: To Pay $3.2MM in Settlement With Flextronics ----------------------------------------------------------- Eastman Kodak Co. asked the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement with a major supplier, Flextronics Corp. Flextronics supplies goods for Eastman Kodak's retail kiosk and scanner business under a 2003 agreement. Under the deal, Eastman Kodak will pay more than $3.2 million for goods Flextronics supplied immediately before the company's bankruptcy filing. In exchange, Flextronics will give the company a $750,000 discount. It also agreed to release its so-called "first priority purchase-money security interest" in certain goods, according to court papers. The deal also extends the terms of the 2003 agreement until June 13, 2013, and authorizes Eastman Kodak and Flextronics to enter into another contract to replace the 2003 agreement. "Entry into the settlement agreement will benefit the estates by allowing the debtors to avoid the substantial cost of re-sourcing the Flextronics manufactured goods," said Eastman Kodak's lawyer, Andrew Dietderich, Esq., at Sullivan & Cromwell LLP, in New York. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, voluntarily filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. are not included in the filing and will continue to operate as usual. The Company, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Having invested significantly in research and development for over a century, Kodak has a vast portfolio of patents. In 1975, Kodak scientists invented the first digital camera. Kodak then went on to develop a vast collection of patented technologies to enhance digital image capture and processing, technologies that are used in virtually every modern digital camera, smartphone and tablet, as well as numerous other devices. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Kodak says it has "significant" legacy liabilities, which include $1.2 billion in non-U.S. pension liabilities, $1.3 billion of Other Post-Employment Benefit ("OPEB") liabilities and roughly $100 million in environmental liabilities. Kodak has outstanding funded debt in an aggregate amount of roughly $1.6 billion, consisting primarily of roughly: (a) $100 million outstanding under the first lien revolving credit facility plus an additional $96 million in face amount of outstanding letters of credit; (b) $750 million in principal amount of second lien secured notes; (c) $400 million in principal amount of convertible notes; and (d) $283 million in principal amount of other senior unsecured debt. Kodak also has roughly $425 million in outstanding trade debt. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). EDWARD DEETS: Section 341(a) Meeting Reset for March 30 ------------------------------------------------------- The U.S. Trustee for Region 3 has rescheduled the meeting of creditors in the Chapter 11 case of Edward Deets Holding Company, Inc to March 30, 2012, at 12:00 p.m. The hearing will be held at Wm J. Nealon Fed Bldg., US Courthouse, Washington & Linden Streets, Scranton, Pennsylvani. The U.S. Trustee originally scheduled Feb. 24 meeting of creditors. Mountain Top, Pa.-based Edward Deets Holding Company, Inc., filed for Chapter 11 bankruptcy (Bankr. M.D. Pa. Case No. 11-06869) on Oct. 6, 2011. The Debtor disclosed $2,825,000 in assets and $6,025,000 in liabilities as of the Chapter 11 filing. The Hon. Robert N. Opel, II, presides over the case. The petition was signed by Edward Deets, president. ELPIDA MEMORY: Files Chapter 15 Petition in Delaware ---------------------------------------------------- Tokyo, Japan-based Elpida Memory Inc. is seeking the U.S. bankruptcy court's recognition of its reorganization proceedings currently pending in Tokyo District Court, Eight Civil Division. Yuko Sakamoto, as foreign representative, filed a Chapter 15 petition (Bankr. D. Del. Case No. 12-10947) for Elpida on March 19, 2012. Mr. Sakamoto says that ongoing litigation in the U.S. will force Elpida to incur substantial costs and divert significant monetary and personnel resources from the Japan reorganization effort. Elpida has been named as a defendant or counter-claim defendant in a number of matters in which it is alleged that Elpida products infringe certain patents. The suits alleged that certain Elpida DRAM products infringe on patents held by the complaining parties. Elpida has also been paying the cost of defense for non-debtor subsidiary Elpida USA and certain of its customers. Elpida is a party to numerous contracts with U.S. counterparties and/or non-U.S. counterparties, including license agreements, sublicense agreements and other agreements involving U.S. patents, patent applications or intellectual property, some of which contain provisions granting the counterparty a right to terminate for various reasons, including Elpida's filing bankruptcy, becoming a debtor under the Bankruptcy Code or becoming insolvent. To ensure that the reorganization in Japan continues in a smooth and stable manner, Elpida seeks provisional relief on an emergency basis, pursuant to Sections 105 and 1519, to, among other things, stay litigation pending against (i) Elpida and (ii) its non-debtor subsidiary, Elpida USA, as well the down-stream customers, to whom Elpida owes indemnification obligations. Tokyo Proceeding Elpida Memory and its subsidiary, Akita Elpida Memory, Inc., filed for corporate reorganization proceedings in Tokyo District Court on Feb. 27, 2012. The Tokyo District Court immediately rendered a temporary restraining order to restrain creditors from demanding repayment of debt or exercising their rights with respect to the company's assets absent prior court order. Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo Court as Supervisor and Examiner in the case. Elpida said liabilities totaled JPY448.03 billion, or $5.52 billion, as of March 31, 2011. Elpida's total outstanding loans equal JPY102 billion and its total outstanding bonds equal JPY138.3 billion. Elpida's loan facilities include a (i) JPY66.6 billion secured syndicated loan facility due April 2, 2012; (ii) JPY18.3 billion secured syndicated loan facility due March 31, 2012; (iii) JPY6 billion secured loan from the Development Bank of Japan, Inc. due March 31, 2013; (iv) JPY10 billion unsecured loan from the DBJ due April 2, 2012; and (v) JPY1 billion unsecured loan from ORIX Trust and Banking Corporation due Sept. 30, 2013. Elpida explained that investments by DRAM vendors in production capacity in recent years led to an oversupplied market and a sharp decline in PC DRAM prices. The DRAM industry also saw a significant drop in demand as a result of a rapid downturn in global economic conditions beginning in 2008. In 2009, Elpida submitted a business restructuring plan to the Ministry of Economy, Trade and Industry in Japan and obtained a JPY$100 billion syndicated loan from banks. However, the business environment surrounding Elpida was still unfavorable, in 2010 due to a historic appreciation of the yen against the dollar and a steep fall in the price of DRAM products as a result of fierce competition in the DRAM industry. Elpida's failure to reach agreement with creditors on a refinancing forced the company to file for bankruptcy. Upcoming scheduled debt payments included: (i) redemption of JPY15 billion bonds due March 22, 2012; (ii) repayment of JPY18.3 billion of the syndicated loan and JPY2 billion of the DBJ loan, due March 30, 2012; (iii) payment of a JPY31 billion put option of preferred stock to DBJ, exercisable on or after April 1, 2012; and (iv) repayment of JPY66.6 billion of the syndicated loan, JPY10 billion of the DBJ loan, and JPY0.1 billion of the ORIX loan. "In the future, pursuant to the Corporate Reorganization Act and under the instruction and supervision of the Tokyo District Court and Mr. Atsushi Toki, Attorney-at-Law and the Supervisor and Examiner, we will work together so that we can secure as much repayment funds as possible for the creditors," Elpida said. Dow Jones Newswires says that Elpida's bankruptcy filing is the largest corporate failure among Japan's manufacturers since the end of World War II. Elpida has posted a net loss for five consecutive quarters through December. About Elpida Memory Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is a Japan-based company principally engaged in the development, design, manufacture and sale of semiconductor products, with a focus on dynamic random access memory (DRAM) silicon chips. The main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM, Mobile RAM and XDR DRAM, among others. The Company distributes its products to both domestic and overseas markets, including the United States, Europe, Singapore, Taiwan, Hong Kong and others. The company has eight subsidiaries and two associated companies. ELPIDA MEMORY: Chapter 15 Case Summary -------------------------------------- Chapter 15 Petitioner: Yukio Sakamoto Chapter 15 Debtor: Elpida Memory, Inc. 2-1, Yaesu 2-chome, Chuo-ku Chuo-ku Tokyo 104-0028 Japan Chapter 15 Case No.: 12-10947 Type of Business: Elpida is a company based in Japan that manufactures Dynamic Random Access Memory (DRAM) integrated circuits. It is seeking the U.S. bankruptcy court's recognition of its reorganization proceedings currently pending in Tokyo District Court, Eight Civil Division. Elpida's bankruptcy filing is the largest corporate failure among Japan's manufacturers since the end of World War II. Chapter 15 Petition Date: March 19, 2012 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Christopher S. Sontchi Debtor's Counsel: Lee E. Kaufman, Esq. RICHARDS, LAYTON & FINGER, P.A. 920 North King Street One Rodney Square Wilmington, DE 19801 Tel: (302) 651-7582 Fax: (302) 651-7701 E-mail: kaufman@rlf.com - and ? Mark D. Collins, Esq. RICHARDS LAYTON & FINGER, P.A. One Rodney Square P.O. Box 551 Wilmington, DE 19899 Tel: (302) 651-7700 Fax: (302) 651-7701 E-mail: collins@RLF.com Estimated Assets: More than $1 billion Estimated Debts: More than $1 billion The Debtor did not file a list of creditors together with its petition. EVERGREEN SOLAR: Has Until June 12 to Propose Chapter 11 Plan ------------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware extended Evergreen Solar, Inc.'s exclusive periods to file and solicit acceptances for the proposed Chapter 11 Plan until June 12, 2012, and Aug. 13, 2012, respectively. About Evergreen Solar Evergreen Solar, Inc. -- http://www.evergreensolar.com/-- developed, manufactured and marketed String Ribbon solar power products using its proprietary, low-cost silicon wafer technology. The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge Mary F. Walrath. The Company's balance sheet at April 2, 2011, showed $373,972,000 in assets, $455,506,000 in total liabilities, and a stockholders' deficit of $81,534,000. Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham McCutchen LLP, serve as general bankruptcy counsel to the Debtor. Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as co-counsel. Hilco Industrial LLC serves as exclusive marketing and sales agent. Klehr Harrison Harvey Branzburg serves as special conflicts counsel. Zolfo Cooper LLC is the financial advisor. UBS Securities, LLC, serves as investment banker. Epiq Bankruptcy Solutions has been tapped as claims agent. In conjunction with the Chapter 11 filing, the Company entered into a restructuring support agreement with certain holders of more than 70% of the outstanding principal amount of the Company's 13% convertible senior secured notes. As part of the bankruptcy process the Company will undertake a marketing process and will permit all parties to bid on its assets, as a whole or in groups pursuant to 11 U.S.C. Sec. 363. An entity formed by the supporting noteholders, ES Purchaser, LLC, entered into an asset purchase agreement with the Company to serve as a 'stalking-horse" and provide a "credit-bid" pursuant to the Bankruptcy Code for assets being sold. The supporting noteholders are represented by Michael S. Stainer, Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York. An official committee of unsecured creditors has retained Pepper Hamilton and Kramer Levin Naftalis & Frankel as counsel. The Committee tapped Garden City Group as communications services agent. Evergreen Solar is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are start-up Spectrawatt Inc., which also filed in August, Solyndra Inc., which filed early in September, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. Evergreen sold the assets piecemeal in three auctions. Max Era Properties Ltd. from Hong Kong paid $6 million cash and $3.2 million in stock of China Private Equity Investment Holdings Ltd. for the company name, intellectual property, and wafermaking assets. Kimball Holdings LLC paid $3.8 million for solar panel inventory while the secured lenders exchanged $21.5 million of their $165 million claim for a $171 million claim against Lehman Brothers Holdings Inc. Max Era Properties Limited and Sovello AG bought equipment and machinery located at the Debtor's Devens, Massachusetts facility for $8.9 million. EVERGREEN SOLAR: Court OKs Settlement With Noteholders ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approved a stipulation of settlement among Evergreen Solar, Inc., the Official Committee of Unsecured Creditors, certain unaffiliated holders of 13% Convertible Senior Secured Notes due 2015, and U.S. Bank National Association, as indenture trustee and collateral agent for the senior secured noted. As reported in the Troubled Company Reporter on March 2, 2012, the five main components of the stipulation are: i) resolution of outstanding litigation and contested matters, including that relating to the extent and validity of the secured indenture trustee's claims and liens; ii) provision of an additional carve out of the secured indenture trustee's collateral for the benefit of the Debtor's estate (including payment of administrative and priority claims); iii) provision of an additional carve out of the secured indenture trustee's collateral for the benefit of, and distribution to, general unsecured creditors, including pursuant to the unsecured creditor vehicle; iv) transfer of collateral and proceeds thereof free of the Debtor liabilities to the secured indenture trustee less amounts otherwise agreed to be left for the benefit of the estate or the unsecured creditors; and v) agreement to support the pursuit of a Chapter 11 Plan to conclude the Chapter 11 case to the extent reasonably feasible. Pursuant to the stipulation, the parties agreed that, among other things: 1) a) the secured indenture trustee holds valid, perfected, enforceable claims and liens on all of the assets of the Debtor; b) the secured indenture trustee's adequate protection claims and liens granted pursuant to the cash collateral order have a value in excess of the value of all of the Debtor's property as of Feb. 8, 2012, and therefore apply to all assets of the Debtor's bankruptcy estate; and c) the secured indenture trustee also holds a deficiency claim in the amount of $108,296,430 less future distributions to the secured indenture trustee or its designee, including (x) the initial secured assets, (y) the cash proceeds of the Devens Assets and the equipment located thereat, and (z) any other cash proceeds received by the secured indenture trustee or its designee; 2) the Commercial Tort Claims will be deemed to have remained in the Debtor's estate; 3) the Debtor will reserve $167,000 plus the amounts held in Euro-denominated account of the Debtor maintains with the Deutsche Bank AG; 4) the 4,232,964 ordinary share of China Private Equity Investment Holdings Limited, which is an initial secured asset, will be valued at $913,437 solely for the purpose of calculation of the deficiency claim; 5) on the settlement effective date, all claims under the Bankruptcy Code Section 547 for the avoidance or recovery of transfers in the amount of $59,999 or less will be released; and 6) the Debtor's obligation to the secured indenture trustee under the stipulation do not depend in any way upon the Debtor's successful confirmation of any Chapter 11 Plan. About Evergreen Solar Evergreen Solar, Inc. -- http://www.evergreensolar.com/-- developed, manufactured and marketed String Ribbon solar power products using its proprietary, low-cost silicon wafer technology. The Marlboro, Mass.-based Company filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-12590) on Aug. 15, 2011, before Judge Mary F. Walrath. The Company's balance sheet at April 2, 2011, showed $373,972,000 in assets, $455,506,000 in total liabilities, and a stockholders' deficit of $81,534,000. Ronald J. Silverman, Esq., and Scott K. Seamon, Esq., at Bingham McCutchen LLP, serve as general bankruptcy counsel to the Debtor. Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, serve as co-counsel. Hilco Industrial LLC serves as exclusive marketing and sales agent. Klehr Harrison Harvey Branzburg serves as special conflicts counsel. Zolfo Cooper LLC is the financial advisor. UBS Securities, LLC, serves as investment banker. Epiq Bankruptcy Solutions has been tapped as claims agent. In conjunction with the Chapter 11 filing, the Company entered into a restructuring support agreement with certain holders of more than 70% of the outstanding principal amount of the Company's 13% convertible senior secured notes. As part of the bankruptcy process the Company will undertake a marketing process and will permit all parties to bid on its assets, as a whole or in groups pursuant to 11 U.S.C. Sec. 363. An entity formed by the supporting noteholders, ES Purchaser, LLC, entered into an asset purchase agreement with the Company to serve as a 'stalking-horse" and provide a "credit-bid" pursuant to the Bankruptcy Code for assets being sold. The supporting noteholders are represented by Michael S. Stainer, Esq., and Natalie E. Levine, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York. An official committee of unsecured creditors has retained Pepper Hamilton and Kramer Levin Naftalis & Frankel as counsel. The Committee tapped Garden City Group as communications services agent. Evergreen Solar is at least the fourth solar company to seek court protection from creditors since August 2011. Other solar firms are start-up Spectrawatt Inc., which also filed in August, Solyndra Inc., which filed early in September, and Stirling Energy Systems Inc., which filed for Chapter 7 bankruptcy late in September. Evergreen sold the assets piecemeal in three auctions. Max Era Properties Ltd. from Hong Kong paid $6 million cash and $3.2 million in stock of China Private Equity Investment Holdings Ltd. for the company name, intellectual property, and wafermaking assets. Kimball Holdings LLC paid $3.8 million for solar panel inventory while the secured lenders exchanged $21.5 million of their $165 million claim for a $171 million claim against Lehman Brothers Holdings Inc. Max Era and Sovello AG bought equipment and machinery located at the Debtor's Devens, Massachusetts facility for $8.9 million. EXPRESS LLC: Moody's Raises CFR to 'Ba2'; Outlook Stable -------------------------------------------------------- Moody's Investors Service upgraded Express LLC's Corporate Family Rating and Probability of Default Rating to Ba2 from B1 and its $200 million senior unsecured note rating to Ba3 from B3. At the same time, Moody's withdrew Express' $120 million term loan rating due to its full repayment. The speculative grade liquidity rating of SGL-1 was affirmed. The outlook was changed to stable from positive. "The upgrade to Ba2 was driven by Express' strong credit metrics as a result of sales and earnings growth and the full repayment of the term loan," stated Moody's analyst Mariko Semetko. The company has been reporting solid same store sales growth and margin improvements. Margin improvements were primarily driven by the company's "go-to-market" strategy, which involves significant product testing before making a material inventory commitment, a strategy that helps drive higher full priced selling and reduced markdowns. Furthermore, the company has been able to selectively raise prices on key items with limited unit attrition. The combination of earnings growth and the full repayment of the term loan have resulted in a debt/EBITDA of about 3.1 times (incorporating Moody's standard analytical adjustments) for the fiscal year ended January 28, 2012. "With no outstanding balances under the revolver, about $200 million of senior unsecured notes are the company's only outstanding debt," added Mr. Semetko. Ratings Upgraded: - Corporate Family Rating to Ba2 from B1 - Probability of Default Rating to Ba2 from B1 - $200 million Senior Unsecured Notes due 2018 to Ba3 (LGD4, 65%) from B3 (LGD 5, 76%) Ratings Affirmed: - Speculative Grade Liquidity Rating of SGL-1 Ratings Withdrawn: - $120 million senior secured term loan at Ba3 (LGD3, 36%) Ratings Rationale Express' Ba2 Corporate Family Rating reflects its solid credit metrics, very good liquidity, and solid operating profitability. The rating also incorporates the company's competitive position and its well recognized brand name. Partly offsetting these are the company's relatively modest scale and its aggressive international expansion plans. The rating also incorporates the company's meaningful business risk as a niche retailer operating in the highly competitive specialty apparel market, its susceptibility to trends in discretionary consumer spending, and moderate seasonality of operations. The stable outlook reflects Moody's view that Express will continue to grow operating earnings through cost leveraging and organic growth opportunities such as international expansion, e- commerce, and new store development. The outlook incorporates Moody's expectation for modest margin growth as higher commodity costs normalize. An upgrade in the near term is unlikely given the relatively limited scale and the lack of track record of expanding overseas. Over time, ratings could be upgraded should the company increase its scale, demonstrate a consistent earnings track record, and profitably expand internationally while maintaining credit metrics at the current levels, good liquidity and conservative financial policies. Ratings could be downgraded if Express' financial policies become more aggressive or if the international growth plans are not successfully executed. Ratings could also be downgraded should operating performance deteriorate such that operating margins meaningfully erode, debt/EBITDA is sustained above 4.0 times or EBITA/interest expense falls below 2.5 times. The principal methodology used in rating Express 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. Express LLC, headquartered Columbus, Ohio, is a specialty apparel retailer targeting 20 to 30 year old men and women. The company operates approximately 600 stores in the United States and six stores in Canada. It also franchises stores in the Middle East. Revenues for the fiscal year ended January 28, 2012 were about $2.1 billion. FENTON SUB: Wants Plan Solicitation Exclusivity Until May 21 ------------------------------------------------------------ Fenton Sub Parcel D, LLC, asks the U.S. Bankruptcy Court for the District of Minnesota to extend until May 21, 2012, its time to solicit acceptances for the proposed Plan of Reorganization. The Debtor states that it needs additional time to complete the settlement with its major secured creditor. In the event the Court does not approve the settlement, or the settlement does not close, the Debtors would move forward with their joint plan of reorganization. The settlement reached, as a result of the mediation, provides for the Debtors to deed the Pool D Properties to the lender in full satisfaction of the Debtor's obligations to the lender; and Steven B. Hoyt and the related entities to make certain concessions in exchange for the waiver of certain defaults. Material Terms of the Plan The Plan anticipates that the Debtors will continue to operate the Pool D Properties, but would have the ability to sell the Pool D Properties either individually or in one or more groups. The secured claim of the lender will be paid in full over time with the income generated by the operation of the Pool D Properties, by the proceeds of the sale(s) of one or more of the Pool D Properties, with the proceeds of new financing, or with a combination of these options. The lender will retain its liens to secure such payments. Mr. Hoyt's lien in the properties will be released. Unsecured creditors will receive up to 100% of their claims, without interest, from distributions from excess cash generated by postpetition operations and from the sale(s) or refinancing and operations after the lender is paid in full. The actual amount to be paid depends on the results of operations and sales or refinancing. The most likely range of recovery from operations is estimated to be 0% to 21%; the ultimate sales prices are unknown, but could result in full payment to unsecured creditors. The Debtor notes that the Court has continued until May 2, 2012, at 9:00 a.m., the hearing to consider adequacy of the Disclosure Statement. About Fenton Sub Parcel D and Bowles Sub Parcel D Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC jointly own industrial multi-tenant properties located in the Twin Cities. They are controlled by StoneArch II/WCSE Minneapolis Industrial LLC. StoneArch is the 100% member of Bowles Subsidiary, LLC and of Fenton Subsidiary LLC. Bowles Subsidiary LLC is then the 100% member of Bowles Sub Parcel D LLC, and Fenton Subsidiary LLC is the 100% member of Fenton Sub Parcel D, LLC. In 2007, StoneArch acquired various LLCs, which in turn owned 27 industrial multi- tenant properties located in the Twin Cities. The properties were divided into four separate pools: A, B, C, and D. Fenton Sub Parcel D and Bowles Sub Parcel D jointly own the properties in pool D. As tenants in common, Fenton Sub Parcel D has an undivided 74.5394% interest and Bowles Sub Parcel D has an undivided 25.4606% interest. The Pool D Properties consist of six parcels of real property located in Anoka, Dakota, and Hennepin Counties, Minnesota. The Debtors expect the Pool D Properties to be worth $13,135,656 as of the Petition Date. Although they are two separate legal entities, Fenton Sub Parcel D and Bowles Sub Parcel D have consistently been treated as one enterprise. Hoyt Properties, Inc., acts as agent in managing the Pool D Properties. Fenton Sub Parcel D and Bowles Sub Parcel D filed for Chapter 11 bankruptcy (Bankr. D. Minn. Case Nos. 11-44430 and 11-44434) on June 29, 2011. The Debtors' petitions were signed by Steven Bruce Hoyt, chief manager, who is also a debtor (Bankr. D. Minn. Case No. 11-43816). He is separately represented by Michael C. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman, P.A. The cases were originally assigned to Judge Dennis D. O'Brien and reassigned to Judge Robert J. Kressel as the cases are related to the Hoyt case, which was filed earlier before Judge Kressel. Cynthia A. Moyer, Esq., James L. Baillie, Esq., and Sarah M. Gibbs, Esq., at Fredrikson & Byron, PA, represent the Debtors. FIBERTECH NETWORKS: S&P Keeps 'B' Rating on $260-Mil. Secured Debt ------------------------------------------------------------------ Standard & Poor's Ratings Services said its ratings on Fibertech Networks LLC's secured debt remain unchanged following a $30 million add-on to the facilities. The facilities consist of a $260 million term loan, which was increased from the original $245 million, and a $52.5 million revolving credit facility, increased from $37.5 million. "The issue-level ratings on these facilities remain at 'B' (at the same level as the 'B' corporate credit rating on the company) and the recovery rating remains at '3', indicating our expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default," S&P said. "The corporate credit rating on Fibertech is 'B' and the rating outlook is positive. The rating reflects what we consider an 'aggressive' financial risk profile, including our expectation for high capital spending leading to flat or negative free operating cash flow for all of 2012. The ratings also incorporate our assumption that enterprise and other telecom carrier demand for data-and-voice-transport services will support double-digit revenue and EBITDA growth over the next few years," S&P said. RATINGS LIST Fibertech Networks LLC Corporate Credit Rating B/Positive/-- Senior Secured B Recovery Rating 3 FLYING FORTRESS: Fitch Rates $900 Million Secured Loan at 'BB' -------------------------------------------------------------- Fitch Ratings has assigned a 'BB' rating to the $900 million secured term loan facility issued by Flying Fortress, Inc. on Feb. 23, 2012. Flying Fortress is a wholly owned, indirect subsidiary of International Lease Finance Corp. (ILFC). The debt is secured via a pledge of stock of Flying Fortress and related subsidiaries and is guaranteed by ILFC. The rating on the new facility is not notched above ILFC's Issuer Default Rating (IDR) due to the lack of a perfected first priority claim on aircraft provided to support repayment of the term loan. Furthermore, there is a risk of substantive consolidation of Flying Fortress and related subsidiaries in the event of an ILFC bankruptcy. The general structure and terms of the new term loan are similar to the $550 million senior secured term loan issued by Delos Aircraft, Inc. (another wholly owned subsidiary of ILFC), which also carries a 'BB' rating. In both of these facilities, the lenders have a perfected first lien on subsidiary stock as opposed to the aircraft owned by the subsidiaries. This type of structure is attractive for ILFC as it benefits from greater operational flexibility with respect to the encumbered aircraft. Based on the estimated value of the aircraft, the loan-to-value (LTV) for this transaction equaled approximately 54% at closing. The borrower will be required to maintain a maximum 63% LTV on an ongoing, quarterly basis or repay the loan or provide additional aircraft to meet the test. Structural protection also includes aircraft and lessee concentration limits and appropriate restrictions on the borrower and related subsidiaries to create liens and to sell aircraft. Approximately half of the proceeds from the new term loan were used to repay the remaining $456.9 million outstanding under ILFC's revolving facility that was scheduled to mature in October 2012. The rest of the proceeds will be used for general corporate purposes, including acquisition of new aircraft. There is no significant impact on ILFC's leverage as a result of this transaction. ILFC is a market leader in the leasing and remarketing of commercial jet aircraft to airlines around the world. As of Dec. 31, 2011, ILFC owned an aircraft portfolio with a net book value of approximately $36 billion, consisting of 930 jet aircraft. Fitch has assigned the following rating: Flying Fortress, Inc. -- $750 million senior secured term loan 'BB'. Fitch currently rates ILFC and its related subsidiaries as follows: International Lease Finance Corp. -- Long-term IDR 'BB'; Outlook Stable; -- $3.9 billion senior secured notes 'BBB-'; -- Senior unsecured debt 'BB'; -- Preferred stock 'B'. Delos Aircraft Inc. -- $550 million senior secured term loan 'BB'. ILFC E-Capital Trust I -- Preferred stock 'B'. ILFC E-Capital Trust II -- Preferred stock 'B'. GENERAL MARITIME: GCG OK'd as Committee's Communications Agent -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of General Maritime Corporation, et al., to retain GCG, Inc., as it communications agent. As reported in the Troubled Company Reporter on March 6, 2012, the hourly rates of GCG's personnel are: Administrative and Claims Control $45 - $55 Project Administrator $70 - $85 Quality Assurance Staff $80 - $125 Project Supervisor $95 - $110 Systems, Graphic Support and Technology Staff $100 - $200 Project Manager and Senior Project Manager $125 - $175 Director and Assistant Vice President $200 - $295 Vice President and above $295 Angela Ferrante, GCG's assistant vice president, assures the Court that GCG does not hold an interest adverse to the Debtors' estates respecting the matters upon which GCG is to be engaged. About General Maritime New York-based General Maritime Corporation, through its subsidiaries, provides international transportation services of seaborne crude oil and petroleum products. The Company's fleet is comprised of VLCC, Suezmax, Aframax, Panamax and product carrier vessels. The fleet consisted of 30 owned vessels and three chartered vessels. The company generates substantially all of its revenues by chartering its fleet to third-party customers. The largest customers include major international oil companies, oil producers, and oil traders such as BP, Chevron Corporation, CITGO Petroleum Corp., ConocoPhillips, Exxon Mobil Corporation, Hess Corporation, Lukoil Oil Company, Stena AB, and Trafigura. General Maritime and 56 subsidiaries filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-15285) on Nov. 17, 2011. Douglas Mannal, Esq., and Adam C. Rogoff, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, serve as counsel to the Debtors. Moelis & Company is the financial advisor. Garden City Group Inc. is the claims and notice agent. Prepetition, General Maritime reached agreements with its key senior lenders, including its bank group, led by Nordea Bank Finland plc, New York Branch as administrative agent, as well as affiliates of Oaktree Capital Management, L.P., on the terms of a restructuring. Under terms of the agreements, Oaktree will provide a $175 million new equity investment in General Maritime and convert its prepetition secured debt to equity. In conjunction with the filing, General Maritime has received a commitment for up to $100 million in new DIP financing from a group of lenders led by Nordea as administrative agent. Counsel for Nordea, as the DIP Agent and the Senior Agent, are Thomas E. Lauria, Esq., and Scott Greissman, Esq., at White & Case LLP. Counsel for Oaktree Capital Management, the Junior Agent, are Edward Sassower, Esq., and Brian Schartz, Esq., at Kirkland & Ellis, LLP. The Official Committee of Unsecured Creditors appointed in the case has retained lawyers at Jones Day as Chapter 11 counsel. Jones Day previously represented an ad hoc group of holders of the 12% Senior Notes due 2017 issued by General Maritime Corp. This representation began Sept. 20, 2011, and concluded Nov. 29, 2011, with the agreement of all members of the Noteholders Committee. The Creditors Committee also tapped Lowenstein Sandler PC as special conflicts counsel. The Noteholders Committee consisted of Capital Research and Management Company, J.P. Morgan Investment Management, Inc., J.P. Morgan Securities LLC, Stone Harbor Investment Partners LP and Third Avenue Focused Credit Fund. The Creditors Committee is comprised of Bank of New York Mellon Corporate Trust, Stone Harbor Investment Partners, Delos Investment Management, and Ultramar Agencia Maritima Ltda. GenMar filed a a proposed Chapter 11 plan on Jan. 31 to implement an agreement worked out before the Nov. 17 bankruptcy filing with affiliates of Oaktree Capital Management LP. The Oaktree group, lenders on three credits totaling more than $1 billion, are to invest $175 million while converting secured debt to equity. In addition, there is to be a $61.3 million rights offering where creditors can purchase new stock. The Company intends to seek confirmation of the Plan by April 2012. GLOBAL AVIATION: Meeting of Creditors Rescheduled to March 29 ------------------------------------------------------------- The U.S. Trustee for Region 2 has rescheduled the meeting of creditors in the Chapter 11 cases of Global Aviation Holdings Inc., et al., March 29, 2012, at 1:00 p.m. (prevailing Eastern Time). The meeting will be held at the Office of the United States Trustee, 271 Cadman Plaza, Room 4529, Brooklyn, New York. The meeting was previously scheduled for March 15. About Global Aviation Holdings Global Aviation Holdings Inc., based in Peachtree City, Ga., is the parent company of North American Airlines and World Airways. Global is the largest commercial provider of charter air transportation for the U.S. military, and a major provider of worldwide commercial global passenger and cargo air transportation services. North American Airlines, founded in 1989 and based in Jamaica, N.Y., operates passenger charter flights using B757-200ER and B767-300ER aircraft. World Airways, founded in 1948 and based in Peachtree City, Ga., operates cargo and passenger charter flights using B747-400 and MD-11 aircraft. Global Aviation, along with affiliates, filed Chapter 11 petitions (Bankr. E.D.N.Y. Case No. 12-40783) on Feb. 5, 2012. Global's lead counsel in connection with the restructuring is Kirkland & Ellis LLP and its financial advisor is Rothschild. Kurtzman Carson Consultants LLC is the claims agent. The Debtors disclosed $589.8 million in assets and $493.2 million in liabilities as of Dec. 31, 2011. Liabilities include $146.5 million on 14% first-lien secured notes and $98.1 million on a second-lien term loan. Wells Fargo Bank NA is agent for both. Global said it will use Chapter 11 to shed 16 of 30 aircraft. In addition, Global said it will use Chapter 11 to negotiate new collective bargaining agreements with its unions and deal with liabilities on multi-employer pension plans. On Feb. 13, 2012, the U.S. Trustee for Region 2 appointed a seven- member official committee of unsecured creditors in the case. GLOBAL AVIATION: Kirkland & Ellis Approved as Bankruptcy Counsel ---------------------------------------------------------------- The Hon. Carla E. Craig of the U.S. Bankruptcy Court for the Eastern District of New York authorized Global Aviation Holdings Inc., et al., to employ Kirkland & Ellis LLP as counsel. As reported in the Troubled Company Reporter on March 2, 2012, K&E began representing the Debtors in December of 2011 with respect to a potential restructuring. The hourly rates for K&E's personnel are: Partners $670 - $1,045 Of Counsel $560 - $1,045 Associates $370 - $750 Paraprofessionals $145 - $320 These professionals are expected to have primary responsibility for providing services to the Debtors: Jonathan S. Henes, P.C. $995 Ryan B. Bennett $815 Christopher T. Greco $670 In addition, as necessary, other K&E professionals and paraprofessionals will provide services to the Debtors. On Dec. 20, 2011, the Debtors paid $400,000 to K&E as a classic retainer. On Feb. 4, 2012, the K&E invoiced the Debtors for $157,858, leaving the retainer balance at $125,928. To the best of the Debtors' knowledge, K&E is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Global Aviation Global Aviation Holdings Inc., based in Peachtree City, Ga., is the parent company of North American Airlines and World Airways. Global is the largest commercial provider of charter air transportation for the U.S. military, and a major provider of worldwide commercial global passenger and cargo air transportation services. North American Airlines, founded in 1989 and based in Jamaica, N.Y., operates passenger charter flights using B757-200ER and B767-300ER aircraft. World Airways, founded in 1948 and based in Peachtree City, Ga., operates cargo and passenger charter flights using B747-400 and MD-11 aircraft. Global Aviation, along with affiliates, filed Chapter 11 petitions (Bankr. E.D.N.Y. Case No. 12-40783) on Feb. 5, 2012. Global's lead counsel in connection with the restructuring is Kirkland & Ellis LLP and its financial advisor is Rothschild. Kurtzman Carson Consultants LLC is the claims agent. The Debtors disclosed $589.8 million in assets and $493.2 million in liabilities as of Dec. 31, 2011. Liabilities include $146.5 million on 14% first-lien secured notes and $98.1 million on a second-lien term loan. Wells Fargo Bank NA is agent for both. Global said it will use Chapter 11 to shed 16 of 30 aircraft. In addition, Global said it will use Chapter 11 to negotiate new collective bargaining agreements with its unions and deal with liabilities on multi-employer pension plans. On Feb. 13, 2012, the U.S. Trustee for Region 2 appointed a seven- member official committee of unsecured creditors in the case. GREDE HOLDINGS: S&P Gives 'B+' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its preliminary 'B+' corporate credit rating to Southfield, Mich.-based casting supplier Grede Holdings LLC. The outlook is stable. "At the same time, we assigned a preliminary 'BB-' issue-level rating and preliminary '2' recovery rating to Grede's proposed $250 million five-year senior secured term loan. The '2' recovery rating indicates our expectation that lenders would receive substantial (70% to 90%) recovery in the event of a payment default," S&P said. "The final rating will depend on receipt and satisfactory review of all final transaction documentation; accordingly, the preliminary rating should not be construed as evidence of a final rating," said Standard & Poor's credit analyst Nishit Madlani. "If we do not receive final documentation within a reasonable time frame, or if final documentation departs from materials reviewed, we reserve the right to withdraw or revise our rating," S&P said. "The ratings reflect what we consider to be Grede's 'weak' business risk profile and 'aggressive' financial risk profile, according to our criteria. Our business risk assessment incorporates the multiple industry risks facing companies supplying the light vehicle and commercial vehicle markets, including volatile demand, high fixed costs, competition and pricing pressures, and potential raw material recovery risk," S&P said. GRUBB & ELLIS: Wants to Increase BGC Partners Loan to $15.5MM ------------------------------------------------------------- Grubb & Ellis Company, et al., ask the U.S. Bankruptcy Court for the Southern District of New York to: -- approve (A) an amendment to the interim order, dated Feb. 22, 2012, authorizing the Debtors to incur postpetition senior secured priming indebtedness with administrative superpriority, and use of cash collateral; and -- authorize an amendment to the DIP Facility. The Debtors seek to increase the borrowing limits under their DIP Facility by an additional $10 million -- from $5.5 Million to $15.5 Million -- so as to implement the Debtors' proposed broker loan program entered into with the Debtors' non-insider brokerage sales professionals, whether employed by the Debtors or as independent contractors, and to allow for certain payments of commissions to brokers in the ordinary course. The material provisions of the First Amendment to the DIP Credit Agreement are: 1. Increased Borrowing Limits: An additional $10 million, for an aggregate of $15.5 million, in secured term loans to be made available for the Loan Program. 2. Retention Loans: Subject to Court approval and documentation by the parties, the Debtors can make (a) loans and advances to employees in the ordinary course of the business, consistent with the Budget, in an amount not to exceed $25,000, and (b) Approved Retention Loans, consistent with the Budget, in an aggregate principal amount not to exceed $10,000,000. 3. Commitment Fee: the Debtor agree to pay to the DIP Lender, on the Closing Date a commitment fee in the amount of 1.50% of the Commitment in effect as of the Closing Date. 4. Revised Event of Default: An Event of Default will include (1) the payment of any brokerage commission or any retention payment without the DIP Lender's prior written consent, (2) the making of any Retention Loans other than Approved Retention Loans, and (3) the remittance of any Retention Loan remittance amounts to any applicable governmental authority without the prior written consent of DIP Lender. 5. Revised Carve Out: The Carve-Out means sums having priority ahead of the super priority claims and liens securing the DIP Financing for (a) statutory fees payable to the United States Trustee pursuant to 28 U.S.C. Section 1930(a)(6); and (b) subject to the terms and conditions of the Interim Order and Final Orders, all fees and disbursements incurred by the Debtors and any official committee of unsecured creditors appointed in the Debtors' Chapter 11 Cases for any attorneys and a single financial advisor for the Borrowers and the Committee to the extent allowed by order of the Bankruptcy Court, but solely to the extent such fees and disbursements are within the corresponding amounts set forth in the Budget; provided, that following a notice to the Borrowers from the DIP Lender of the occurrence of an Event of Default, in no event will the amount of the Carve-Out exceed the greater of (a) $200,000 and (b) the amount of the $5,500,000 under the DIP Facility less Advances made as of the Termination Date. As reported in the Troubled Company Reporter on March 15, 2012, unsecured creditors objected to the terms of the Company's planned debtor-in-possession financing agreement with BGC Partners Inc., saying the deal favors BGC over any other potential bidders in the proposed Grubb & Ellis sale. The unsecured creditors committee called certain provisions in the interim DIP order "unacceptable" and recommended modifications to terms that the creditors say unfairly favor stalking-horse bidder BGC. 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 Company has won court approval for a March 21 auction to test whether an affiliate of BGC has the best offer for the assets. Sale procedures approved by the bankruptcy judge call for competing bids on March 20, followed by the auction on March 21 and a hearing to approve the sale March 22. The creditors' committee was opposed to a quick sale, contending that the absence of competitive bidding "guarantees" there will be no recovery by unsecured creditors. Pursuant to the term sheet signed by the parties, BGC will buy the assets for $30.02 million, consisting of a credit bid the full principal amount outstanding under the (i) $30 million credit agreement dated April 15, 2011, with BGC Note, (ii) the amounts drawn under the $4.8 million facility, and (iii) the cure amounts due to counterparties. BGC can terminate the contract if the sale order has not been entered by the bankruptcy court in 25 days after the execution of the Asset Purchase Agreement. BGC Partners, Inc., and its affiliate, BGC Note Acquisition Co., L.P., the DIP lender and Prepetition Secured Lender, are represented in the case by Emanuel C. Grillo, Esq., at Goodwin Procter LLP. On Feb. 24, 2012, the U.S. Trustee for the Southern District of New York appointed an official committee of unsecured creditors. GRUBB & ELLIS: Taps Kurtzman Carson Consultants as Admin. Agent --------------------------------------------------------------- Grubb & Ellis Company asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Kurtzman Carson Consultants LLC as administrative agent. The Debtors anticipate that there will be in excess of 5,000 creditors and other parties in interest to be noticed. In view of the number of anticipated creditors and parties in interest and the complexity of the Debtors' business, the Debtors submit that the appointment of KCC as the administrative agent is both necessary and in the best interests of the Debtors, their estates and other parties in interest. As part of the overall compensation payable to KCC under the terms of the KCC Agreement, the Debtors have agreed to certain indemnification and contribution obligations. The KCC Agreement provides that the Debtors will indemnify and hold harmless KCC, its officers, employees and agents under certain circumstances specified in the KCC Agreement, except in circumstances of gross negligence or willful misconduct. To the best of the Debtors' knowledge KCC is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtor set a hearing on March 20, 2012, at 12:00 noon, on the application. 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 Company has won court approval for a March 21 auction to test whether an affiliate of BGC has the best offer for the assets. Sale procedures approved by the bankruptcy judge call for competing bids on March 20, followed by the auction on March 21 and a hearing to approve the sale March 22. The creditors' committee was opposed to a quick sale, contending that the absence of competitive bidding "guarantees" there will be no recovery by unsecured creditors. Pursuant to the term sheet signed by the parties, BGC will buy the assets for $30.02 million, consisting of a credit bid the full principal amount outstanding under the (i) $30 million credit agreement dated April 15, 2011, with BGC Note, (ii) the amounts drawn under the $4.8 million facility, and (iii) the cure amounts due to counterparties. BGC can terminate the contract if the sale order has not been entered by the bankruptcy court in 25 days after the execution of the Asset Purchase Agreement. BGC Partners, Inc., and its affiliate, BGC Note Acquisition Co., L.P., the DIP lender and Prepetition Secured Lender, are represented in the case by Emanuel C. Grillo, Esq., at Goodwin Procter LLP. HHI HOLDINGS: S&P Affirms 'B+' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ On March 16, 2012, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on HHI Holdings LLC its 'B+' issue- level rating and '4' recovery rating on the company's $355 million term loan B, including the proposed $30 million add-on. The rating outlook is stable. "The ratings on Royal Oak, Mich.-based auto supplier HHI Holdings LLC reflect what Standard & Poor's Ratings Services considers a 'weak' business risk profile and 'aggressive' financial risk profile, according to our criteria. Our business risk assessment incorporates the multiple industry risks facing automotive suppliers, including volatile demand, high fixed costs, intense competition, and severe pricing pressures," S&P said. "We consider HHI's concentrated customer base to be another key risk factor; significant concentration with the Detroit-based automakers; almost half of its backlog of future revenues is tied directly or indirectly to General Motors Co. (GM; BB+/Stable/--), its largest customer. Geographic diversity is also limited, as virtually all sales are in North America. We believe GM's return to profitability in its North American operations is sustainable and its automotive operations in North America will remain profitable, even if the key U.S. auto market does not recover significantly. In our base case, HHI should benefit from GM's ongoing improvement in its competitive position, but the lack of customer diversity could lead to more volatility in sales and could limit potentially higher growth through a more balanced customer base," S&P said. "In the U.S. light-vehicle market, we expect 2012 and 2013 sales to increase 11% and 5% to 14.1 million and 14.8 million units. We assume HHI's revenue growth in 2012 and 2013 will be determined by the pace of stabilizing auto production in North America. Although production improved over 21% during January 2012 (mostly on Japanese restocking), we believe the production growth rate could decelerate in 2012 and 2013, but remain in the mid-high-single- digit area. We also believe that production could return to more historical levels of volatility, now that inventories are fully restocked and prospects for higher gas prices begin to more strongly influence consumer vehicle mix preferences and potentially volumes," S&P said. HOMBURG INVEST: Obtains May 31 CCAA Stay Extension -------------------------------------------------- Homburg Invest Inc. obtained an order from the Superior Court under the Canadian Companies' Creditors Arrangement Act further extending the CCAA protection granted to Homburg Invest and certain of its affiliates on September 9, 2011 and as extended on Oct. 7, 2011 and Dec. 8, 2011. The extension will be in effect until May 31, 2012, at which time the matter will be reviewed by the Court. The order received will give Homburg Invest additional time to further develop a restructuring plan for the benefit of all stakeholders, including its creditors and bondholders. The CCAA process is carried out under the supervision of the Superior Court, which appointed SamsonBelair/Deloitte & Touche Inc. as independent monitor to oversee proceedings. The Monitor provides oversight of Homburg Invest's business and assists the Company in preparing its restructuring plan. All Courts applications and orders as well as a copy of the Monitor's reports are posted by the Monitor on its website at the following address: http://www.deloitte.com/ca/homburg-invest. The Monitor's contact information is also available on its website. Homburg Invest Inc. owns and develops a diversified portfolio of quality commercial real estate including office, retail, industrial and development properties throughout Canada, Europe and the United States. HOSTESS BRANDS: April 24 Fixed as General Claims Bar Date --------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has established 5:00 p.m. Eastern Time on April 24, 2012, as the deadline for any individual or entity to file proofs of claim against Hostess Brands Inc., et al. Proofs of claim must be filed by mailing the original proof of claim or delivering the original proof of claim by hand or overnight courier to: Hostess Brands Claims Processing Center c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245 Proofs of claim submitted by facsimile or electronic mail will not be accepted and shall not be deemed properly filed. The Court also set July 9, at 5:00 p.m. as the Governmental Bar Date. 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. HOSTESS BRANDS: To Pay $75,000 Per Month for IBT Legal Fees ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Hostess Brands, Inc., et al., to: -- assume certain retention agreements with financial advisors to the International Brotherhood of Teamsters and the Bakery, Confectionary, Tobacco and Grain Workers International Union; -- pay, on an interim basis, certain fees and expenses of non- litigation legal advisors to the IBT and the BCT, nunc pro tunc to the Petition Date; -- assume the MAEVA Agreement, pursuant to Section 365 of the Bankruptcy Code, effective as of March 13, 2012; -- pay to MAEVA the monthly fees for work on behalf of the IBT, nunc pro tunc to the Petition Date; and -- assume the Glanzer Agreement (as amended), pursuant to Section 365 of the Bankruptcy Code, effective as of March 13, and pay to Glanzer the monthly fees for work on behalf of the BCT, nunc pro tunc to the Petition Date, subject to certain modifications. Pursuant to Sections 105(a) and 363 of the Bankruptcy Code and on the terms set forth herein, the Debtors are authorized to pay on an interim basis, nunc pro tunc to the Petition Date, (i) up to $75,000 per month for the IBT Legal Fees in connection with the Section 1113/1114 Process, subject to the terms and conditions contained in the Willkie Farr Agreement for Willkie Farr fees, and (ii) up to $75,000 per month for the BCT Legal Fees in connection with the Section 1113/1114 Process; provided, however, that the Debtors shall maintain the unilateral right to terminate the commitment to pay the Legal Advisor Fees at any time upon written notice. 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. HOUGHTON MIFFLIN: Said to Have Hired Restructuring Advisors ----------------------------------------------------------- The Wall Street Journal's Mike Spector and Jeffrey A. Trachtenberg report that people familiar with the matter said textbook publisher Houghton Mifflin Harcourt Publishers Inc. has once again hired restructuring advisers as it tries to tackle a heavy debt load while important customers pull back. Sources told the Journal the Company has retained law firm Paul, Weiss, Rifkand, Wharton & Garrison and Blackstone Group. WSJ says the hirings mark the second time in two years Houghton has had to consider a debt restructuring. WSJ notes Houghton carries more than $3 billion in debt from a leveraged buyout. The Journal recounts Houghton's debt problems trace back to 2006, when Dublin-based Education Media & Publishing Group Ltd. bought Houghton Mifflin for $1.75 billion and soon after purchased Harcourt from Reed Elsevier for about $4 billion. The transactions loaded the current Houghton with debt and prompted the company's first big restructuring in 2010. According to the report, creditors owed $4 billion forgave that debt for ownership stakes in Houghton, eliminating a large chunk of roughly $7 billion in obligations. Now a group of 10 investors owns more than 75% of the company's equity and debt. Those investors include Paulson & Co. and Avenue Capital Group, among others, people familiar with the matter told the Journal. Paul, Weiss advised Houghton on the 2010 restructuring. The sources told the Journal that Houghton doesn't have debt coming due until 2013 and no restructuring is imminent. The Journal says a Houghton spokesman said Tuesday that "we're very optimistic about our position in the market and the future, but like other companies with challenging balance sheets, we are looking at our options to make sure we position the company for long term growth. We have no liquidity issues and no covenant issues." Unsustainable As reported by the Troubled Company Reporter on March 15, 2012, Moody's Investors Service downgraded Houghton's Corporate Family Rating, Probability of Default Rating, and debt instrument ratings to Caa3 from Caa2. The downgrade reflects Moody's view that a debt restructuring in the near term is increasingly likely. The rating outlook is negative. Moody's considers Houghton's capital structure to be unsustainable without a significant rebound in earnings. There is limited time to accomplish this with the looming maturities of the revolver and term loan in December 2013 and June 2014, respectively, and ongoing educational funding pressures at state and local governments. Management indicated in Houghton's fourth quarter earnings call that the company is actively looking at ways to strengthen the balance sheet and that the company does not have funding for all of the investments it wants to makes. Moody's believes Houghton's ability to maintain share relative to its two primary competitors -- both of which are much more conservatively capitalized and diversified -- would become increasingly challenging without additional financial flexibility to invest. Houghton is expected to burn more than $100 million in cash this year, making it difficult to keep up with interest payments on debt and make needed investments, said John Puchalla, a vice president and senior credit officer at Moody's, according to the Journal. Mr. Puchalla said Houghton had roughly $440 million in cash at the end of 2011 and also has a $250 million receivables facility from which it can borrow subject to certain limits. Rivals include Pearson PLC's Pearson Education and McGraw-Hill Education, a unit of McGraw-Hill Cos. Houghton Mifflin Harcourt Publishers Inc., headquartered in Boston, Massachusetts, is one of the three largest U.S. education publishers focusing on the K-12 market with roughly $1.3 billion of revenue for fiscal year ended December 2011. HUMANA INC: Moody's Issues Summary Credit Opinion ------------------------------------------------- Moody's Investors Service issued a summary credit opinion on Humana Inc. and includes certain regulatory disclosures regarding its ratings. This release does not constitute any change in Moody's ratings or rating rationale for Humana Inc. Moody's current ratings on Humana Inc. are: Senior Unsecured (domestic currency) ratings of Baa3 Senior Unsecured Shelf (domestic currency) ratings of (P)Baa3 Subordinate Shelf (domestic currency) ratings of (P)Ba1 Preferred Shelf (domestic currency) ratings of (P)Ba2 Ratings Rationale Moody's A3 insurance financial strength ratings for Humana Insurance Company (HIC) and Humana Medical Plan, Inc. (HMP) and the Baa3 senior unsecured debt rating for Humana Inc. (Humana), are based on the combination of a historically consistent financial profile, highlighted by solid capital adequacy, stable earnings margins, and a moderate financial leverage ratio, together with a significant market position as a result of over 8.5 million medical members in 23 states and Puerto Rico. However, the company's risk profile is increased as a result of having a significant portion of its earnings and revenue dependent on its Medicare Advantage (MA) business. Humana offers a wide array of health, pharmacy and supplemental benefit products for employer groups, government benefit programs, and individuals. Over the last three years, Humana's government sponsored products (Medicare, Medicaid, and TRICARE) have accounted for approximately 77% of total premiums and fees. Of these, Medicare (MA and Part D) is the largest, currently contributing approximately 65% of the Humana's premiums and fees. The major concern with MA business is the change in government reimbursement levels under the healthcare reform law. It is not clear how current MA members will respond to the resulting benefit and premium changes that will likely result from the reduced reimbursement levels over the next several years. However, it should be noted that despite significant reimbursement reductions in 2010 and 2011, Humana and other Medicare Advantage carriers continued to show increased membership. At December 31, 2011, Humana's military services business, which accounted for approximately 10% of total premiums and services revenue for the year ended December 31, 2011, primarily consisted of the TRICARE South Region contract. The original 5-year South Region contract expired on March 31, 2009 and was extended through March 31, 2012. On February 25, 2011, the Department of Defense TRICARE Management Activity awarded the new TRICARE South Region contract to Humana, which is expected to take effect on April 1, 2012. The new 5-year South Region contract, which expires March 31, 2017, is subject to annual renewals on April 1 of each year during its term at the government's option. Since the end of 2008, Humana's commercial membership has declined by 18.6% (approximately 670,000 members). While a large portion of this membership loss is attributable to the economic downturn, which impacted the entire sector, some of the larger insurers have begun to see commercial membership stabilize in 2011. However, Humana's commercial membership, especially in its Employer Group segment, continues to decline. Despite the decline in commercial membership, as a result of continued lower medical utilization patterns experienced in 2010 and continuing into 2011, Humana's operating income in this business has improved. For the newly defined Employer Group segment (which does include a portion of Humana's Medicare business) the pre-tax margin was 4.2% for the first nine months of 2011 compared to 3.6% for the same period in 2010. Humana (NYSE: HUM), headquartered in Louisville, Kentucky is one of the nation's largest publicly-traded health benefits companies. The company provides benefits and services to members in Medicare, TRICARE, and Medicaid government-sponsored programs as well as medical (HMO and PPO) and specialty (dental, life and disability) products to employer groups and individuals. Rating Outlook The outlook on the A3 insurance financial strength rating for HIC and HMP and the Baa3 senior debt rating for Humana is stable. What to Watch For: - Ability to price appropriately given changes in medical utilization - Impact on membership from lower reimbursement levels for Medicare Advantage products - Additional Healthcare Reform regulations impacting Medicare Advantage What Could Change the Rating - Up The following could result in an upgrade: - EBITDA margins sustained above 6% - Annual organic membership growth rate of at least 3% balanced between commercial and Medicare Advantage products - A more balanced distribution between Medicare and Commercial premiums - RBC ratio is maintained at or above 200% What Could Change the Rating - Down The following could result in downgrade: - An annual membership decline of 25% or more - Medicare premiums accounting for over 70% of total premiums and fees - RBC ratio decreasing to below 150% based on CAL - Adjusted financial leverage above 40% - Loss or impairment of a major Medicare contract. The principal methodology used in this ratings was Moody's Rating Methodology for U.S. Health Insurance Companies published in May 2011. HUMPUSS SEA TRANSPORT: Files for Chapter 15 in Manhattan -------------------------------------------------------- The joint liquidators of Singapore-based Humpuss Sea Transport PTE LTD filed documents seeking the U.S. Bankruptcy Court's recognition of the winding up proceeding initiated in the High Court of the Republic of Singapore. The joint liquidators want the Manhattan court to recognize the Singapore Proceeding as "foreign Main proceeding" pursuant to 11 U.S.C. Sec. 1515 and 1517. Cosimo Borrelli and Jason ALeksander Kardachi, of the restructuring and forensic accounting firm Borrelli Wash, are the joint liquidators. HST is a Singapore-based shipping company that operated a fleet of vessels. It ceased shipping at the end of 2009. In 2009, HST's books and records listed it's assets at roughly US$182 million. HST is a wholly-owned subsidiary of PT Humpuss Intermoda Transportasi, which is registered and based in Indonesia and publicly listed on the Busra Efek Jakarta (the Jakarta Stock Exchange). Following the global financial crisis in 2008, shipping rates sharply decreased. HST became unable to satisfy all of its obligations under its fixed and long-term charter agreements. Many of the counterparties to the charter agreements initiated arbitration proceedings and obtained judgments and worldwide freezing orders exceeding US$100 million in the aggregate, including a US$75 million judgment obtained by the Empire Group and $30 million judgment obtained by Parbulk II, AS. Certain creditors also attempted to enforce judgments in the United States. According to Mr. Kardachi, the Chapter 15 Case, after recognition of the Singapore Proceeding, will allow for a stay of proceedings while the Liquidators get up to speed on HST's proceedings and, if necessary, potentially provide the Liquidators with the powers of discovery with respect to assets located in the United States. HUMPUSS SEA TRANSPORT: Chapter 15 Case Summary ---------------------------------------------- Chapter 15 Petitioners: Jason Aleksander Kardachi Cosimo Borrell BORRELLI WASH as joint liquidators Chapter 15 Debtor: Humpuss Sea Transport PTE LTD #07-16 Park Mall 9 Penang Road Singapore 238459 Chapter 15 Case No.: 12-11086 Type of Business: The Debtor is a company based in Singapore that operated a fleet of oil tanker ships and provides charter services in the shipping industry. It stopped shipping at the end of 2009. The joint liquidators are seeking U.S. court recognition of the winding up proceeding initiated in the High Court of the Republic of Singapore. Chapter 15 Petition Date: March 19, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Shelley C. Chapman Petitioners' Counsel: Curtis C. Mechling, Esq. STROOCK & STROOCK & LAVAN, LLP 180 Maiden Lane New York, NY 10038 Tel: (212) 806-5609 Fax: 212-806-6006 E-mail: cmechling@stroock.com Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $100,000,001 to $500,000,000 IDQ HOLDINGS: Moody's Assigns 'B3' Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service has assigned a B3 Corporate Family Rating (CFR) to IDQ Holdings Inc. Concurrently, Moody's assigned a B3 rating to the company's proposed $210 million senior secured notes. Proceeds from the notes are expected to be use to repay existing indebtedness and fund a $54 million dividend. The rating outlook is stable. The following ratings have been assigned subject to the review of final documentation: B3 CFR; B3 Probability of Default Rating; and B3 (LGD4, 57%) to the proposed $210 million senior secured notes due 2017. Ratings Rationale The B3 CFR reflects IDQ's small scale, exclusive focus on the niche, automotive air-conditioning maintenance and repair market, significant seasonal working capital needs, and a high customer concentration. Moody's views proforma leverage as relatively high at 4.7x debt-to-EBITDA (including Moody's adjustments and seasonal borrowings) following the dividend payment to its sponsor, Castle Harlan, Inc., given IDQ's narrow product focus in the automotive aftermarket. The rating benefits from the company's high market share within its key end market, the stable demand for its need- based products, strong margins and demonstrated ability to pass through commodity cost increases. Moody's expects IDQ's liquidity to be adequate in the next twelve to eighteen months. In Moody's view, the company's high seasonal working capital requirements will require meaningful reliance on the company's $35 million revolver due 2017 (unrated) and receivables factoring arrangements. While Moody's anticipates these arrangements to be adequate, the potential for additional working capital requirements in the case of higher than expected revenue growth or increased commodity input costs could result in minimal operating flexibility during seasonal peaks. Moody's anticipates that IDQ will generate modest positive cash flows over the next twelve months and will maintain minimal cash balances. The B3 rating on the proposed $210 million senior secured notes reflects its first priority lien on all assets subject to a first priority lien securing IDQ's $35 million revolver (unrated), and the upstream guarantees by IDQ's operating subsidiary and any future domestic restricted subsidiaries. The stable outlook reflects Moody's expectation of moderate earnings growth, minimal deleveraging and stable fiscal policies, despite the company's recent history of equity friendly transactions. Further, the outlook incorporates Moody's expectation for no near-term US regulatory developments that would be adverse to the use of refrigerant gas R-134a or other components of IDQ's products, following the California Air Resources Board automotive refrigerant regulation in 2009. The ratings could be downgraded if leverage increases above 5.0x or liquidity deteriorates. Further, adverse regulatory developments, while not expected, would create negative ratings pressure. Ratings could be upgraded if IDQ increases its scale and diversification and strengthens its liquidity profile to better accommodate future growth and seasonal working capital needs, while maintaining leverage levels around 4.0x Debt-to-EBITDA (including Moody's adjustments and seasonal borrowings). The principal methodology used in rating IDQ Holdings was the 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. IDQ, headquartered in Garland, Tx, is a leading provider of packaged refrigerant products including cans, all in one kits, chemicals, lubricants, leak sealants, tools, and accessories for the servicing of automotive air conditioning systems primarily for the Do-It-Yourself (DIY) automotive aftermarket in North America. IDQ was acquired by Castle Harlan, Inc. in 2010. Revenues for the year ended December 31, 2011 were approximately $177 million. IDQ HOLDINGS: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Rating Services assigned a preliminary 'B' corporate credit rating to Garland, Texas-based IDQ Holdings Inc. The outlook is stable. "At the same time, we assigned a preliminary 'B' issue rating to the company's proposed $210 million senior secured notes due 2017. The preliminary recovery rating on the senior secured credit facility is '4', indicating our expectation for average (30%-50%) recovery in the event of payment default. The notes are to be issued under the SEC's Rule 144a without registration rights, guaranteed by each of the company's existing and future domestic subsidiaries, and subject to incurrence-based covenants. The company will use net proceeds of the notes to refinance existing indebtedness (a term loan and mezzanine debt) of approximately $150 million and to pay a $54 million dividend to its financial sponsor, Castle Harlan. The ratings are based on preliminary terms and are subject to change upon review of the final loan documents," S&P said. "The ratings on automotive aftercare market player IDQ Holdings Inc. reflect what we consider to be a 'highly leveraged' financial profile and a 'vulnerable' business profile, as our criteria define the terms," S&P said. "We expect credit measures will improve modestly over the next 12 months, but remain weak," said Standard & Poor's credit analyst Mark Salierno. "Our business risk assessment incorporates our view that the company's business focus is very narrow, in a small, niche industry space: air conditioning (A/C) repair in the automotive aftercare market, which the company estimates to have a market size of about $1.5 billion. IDQ is concentrated in this niche category, with approximately two-thirds of revenues generated by 'value-added' A/C recharge kits and refrigerant blends that service the do-it-yourself (DIY) automobile caretaker. The company's product diversity is limited, in our opinion. Geographic diversity, in our view, is also limited as the vast majority of sales are generated in the U.S. and as we believe that international expansion will be limited by environmental protection regulations," S&P said. "The outlook is stable. We expect IDQ's operating performance to be steady and credit protection measures to remain in line with the criteria and indicative ratios for a highly leveraged financial profile over the next 12 months," S&P said. "We could consider a downgrade if any threat to the company's business were to materialize and weaken operating performance, or if the company were to engage in more aggressive financial policy, such as large shareholder dividends," S&P said. "While unlikely over the next 12 months, we could consider an upgrade if the company were to strengthen its business profile, potentially through diversification, while sustaining solid operating performance; and if it were to achieve an adjusted leverage ratio in the 3x area or below, possibly as a result of a 30% EBITDA improvement," S&P said. INFOR ENTERPRISE: S&P Gives B Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B' corporate credit rating to Infor Enterprise Applications Ltd. following the merger of GGC Software Holdings LLC (a/k/a Lawson Software Inc.) and Infor Global Holdings Solutions Ltd. The rating outlook is stable. "We are also assigning our preliminary 'B+' issue-level rating and preliminary '2' recovery rating to Lawson's (a subsidiary of Infor Enterprise Applications) $3.5 billion senior secured term loans, consisting of a $3.1 billion six-year term loan and a $400 million four-and-a-half-year term loan," S&P said. "In addition, we assigned our preliminary 'B-' rating and preliminary '5' recovery rating to Lawson's $1.15 billion seven- year senior unsecured notes. Lawson's existing $560 million senior unsecured notes (currently rated 'B-' with a '5' recovery rating) will remain outstanding," S&P said. "The new entity intends to use the newly issued debt, along with approximately $550 million of new sponsor equity, $213 million cash on hand, $375 million of amended & extended Infor HoldCo payment-in-kind (PIK) notes, and rolled equity from Infor and Lawson shareholders to merge the two companies and to refinance existing debt," S&P said. "At the close of the transaction, we will withdraw our 'B' corporate credit rating on GGC Software Holdings LLC, our issue ratings on Lawson's existing $1.04 billion senior secured notes, and our 'B-' rating on Infor Global Holdings Solutions Ltd., as well as all its issue-level debt ratings," S&P said. "Standard & Poor's preliminary corporate credit rating on Infor reflects the company's highly leveraged capital structure, with pro forma debt to EBITDA in the high-6x area," said Standard & Poor's credit analyst Philip Schrank. "We view the combination of enterprise software and services providers Infor and Lawson as possessing a 'fair' business risk profile characterized by a significant recurring revenue base, stable margins, and recognized product strength, but also a second-tier position in the overall enterprise resource planning (ERP) market," S&P said. "The outlook is stable. The stable outlook reflects the company's recurring revenue base and expectation of modest revenue growth with stable margins. Given Infor's highly leveraged financial profile and our expectations for modest de-leveraging over the next 12 months, we are unlikely to raise the rating over this timeframe," S&P said. "If EBITDA margins compress due to competitive pressures or if operational integration missteps cause its financial covenant cushion to drop below the 15% area, we could lower the rating," S&P said. INTERNATIONAL MEDIA: Files Schedules of Assets and Liabilities -------------------------------------------------------------- International Media Group Inc., filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $206,825,047 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $77,351,817 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $155,866,256 ----------- ----------- TOTAL $206,825,047 $233,218,073 Debtor-affiliates also filed their respective schedules, disclosing: Company Assets Liabilities ------- ------ ----------- AMG Intermediate LLC $0 $77,743,876 Asianmedia Group LLC $100,000 $78,591,157 KHAI, Inc. $1,560,521 $82,446,399 KSCI, Inc. $162,739,963 $97,822,834 KSLS, Inc. $0 $77,351,817 KHLS, Inc. $0 $77,351,817 Full-text copies of the schedules are available for free at: http://bankrupt.com/misc/INTERNATIONAL_MEDIA_amgintermediate_sal.p df http://bankrupt.com/misc/INTERNATIONAL_MEDIA_asianmediagroup_sal.p df http://bankrupt.com/misc/INTERNATIONAL_MEDIA_khaiinc_sal.pdf http://bankrupt.com/misc/INTERNATIONAL_MEDIA_khlsinc_sal.pdf http://bankrupt.com/misc/INTERNATIONAL_MEDIA_ksciinc_sal.pdf http://bankrupt.com/misc/INTERNATIONAL_MEDIA_kslsinc_sal.pdf http://bankrupt.com/misc/INTERNATIONAL_MEDIA_sal.pdf About International Media Group International Media Group Inc. and its affiliates operate television station KSCI-TV (Channel 18) Long Beach, California; KUAN-LP (Channel 48) Poway, California; and KIKU-TV (Channel 19) Honolulu, Hawaii. KSCI, KUAN and KIKU focus primarily on the large Asian markets of Southern California and Hawaii and offer programming in six (6) main languages -- (i) Chinese; (ii) Korean; (iii) Tagalog (Filipino); (iv) Vietnamese; (v) English; and (vi) Japanese. The Television Stations' programming is a mix of locally produced original news, entertainment, and talk shows, purchased or syndicated foreign language programming, and paid programming comprised principally of infomercials, per-inquiry and direct response television advertisements. KHAI Inc. owns all of the equity of KHLS Inc., which holds the FCC license for KIKU-TV (Channel 19). KSCI Inc. owns all of the equity of KHAI and of KSLS Inc., which holds the FCC license for KSCI-TV (Channel 18) and KUANLP (Channel 48). International Media Group Inc. owns all of the equity of KSCI. AMG Intermediate LLC owns all of the equity of IMG, and AsianMedia Group LLC owns all of the equity of AMG. Non-debtor AsianMedia Investors I L.P. owns all of the equity of AsianMedia. International Media Group and six affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-10140) on Jan. 9, 2012, with the intent to sell their business as a going concern under 11 U.S.C. Sec. 363(a). NRJ TV II LLC, an entity owned by the first lien lender, will be the stalking horse bidder. As of Jan. 9, 2012, the Debtors owe $77.3 million on a first lien debt, including $67 million on a term-loan. Fortress Credit Corp. serves as agent. Unless outbid at the auction, the pre-petition lenders will acquire the assets in exchange for a credit bid of $45 million, will assume certain liabilities, and fund a "carve-out". An auction and sale hearing is contemplated to be held in March. Judge Mary F. Walrath oversees the Debtors' cases. International Media Group tapped Houlihan Lokey Capital, Inc., in October to market the assets. Houlihan will continue marketing the assets post-petition. William E. Chipman, Jr., Esq., and Mark D. Olivere, Esq., at Cousins Chipman & Brown, LLC, in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. The Debtors' claims agent is Epiq Bankruptcy Solutions LLC. In its petition, International Media Group estimated $100 million to $500 million in assets and debts. The petition was signed by Dennis J. Davis, chief restructuring officer. INTERNATIONAL MEDIA: Wants to Hire BCWS as Tax Consultants ---------------------------------------------------------- International Media Group Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Brigante, Cameron, Watters & Strong, LLP as tax consultants. The Debtors relate that on Feb. 2, 2012, Ernst & Young notified the Debtors that they would be unable to continue assisting wit the Debtors' tax return preparation. In this relation, BCWS will prepare the 2011 Federal (Form 1120) and 2011 California (Form 100) corporate income tax returns, and at the Debtors' request may assist with the corporate income tax tax planning for 2011 and 2012 tax years. The hourly rates of BCWS' personnel range from $85 to $462, depending on the staff member assigned and complexity of the work being performed. BCWS estimates the total fees for their services will be approximately $24,000. The Debtors set a March 23, 2012, hearing at 9:30 a.m. for the employment of BCWS. To the best of the Debtors' knowledge, BCWS is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About International Media Group International Media Group Inc. and its affiliates operate television station KSCI-TV (Channel 18) Long Beach, California; KUAN-LP (Channel 48) Poway, California; and KIKU-TV (Channel 19) Honolulu, Hawaii. KSCI, KUAN and KIKU focus primarily on the large Asian markets of Southern California and Hawaii and offer programming in six (6) main languages -- (i) Chinese; (ii) Korean; (iii) Tagalog (Filipino); (iv) Vietnamese; (v) English; and (vi) Japanese. The Television Stations' programming is a mix of locally produced original news, entertainment, and talk shows, purchased or syndicated foreign language programming, and paid programming comprised principally of infomercials, per-inquiry and direct response television advertisements. KHAI Inc. owns all of the equity of KHLS Inc., which holds the FCC license for KIKU-TV (Channel 19). KSCI Inc. owns all of the equity of KHAI and of KSLS Inc., which holds the FCC license for KSCI-TV (Channel 18) and KUANLP (Channel 48). International Media Group Inc. owns all of the equity of KSCI. AMG Intermediate LLC owns all of the equity of IMG, and AsianMedia Group LLC owns all of the equity of AMG. Non-debtor AsianMedia Investors I L.P. owns all of the equity of AsianMedia. International Media Group and six affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-10140) on Jan. 9, 2012, with the intent to sell their business as a going concern under 11 U.S.C. Sec. 363(a). NRJ TV II LLC, an entity owned by the first lien lender, will be the stalking horse bidder. As of Jan. 9, 2012, the Debtors owe $77.3 million on a first lien debt, including $67 million on a term-loan. Fortress Credit Corp. serves as agent. Unless outbid at the auction, the pre-petition lenders will acquire the assets in exchange for a credit bid of $45 million, will assume certain liabilities, and fund a "carve-out". An auction and sale hearing is contemplated to be held in March. Judge Mary F. Walrath oversees the Debtors' cases. International Media Group tapped Houlihan Lokey Capital, Inc., in October to market the assets. Houlihan will continue marketing the assets postpetition. William E. Chipman, Jr., Esq., and Mark D. Olivere, Esq., at Cousins Chipman & Brown, LLC, in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. The Debtors' claims agent is Epiq Bankruptcy Solutions LLC. In its petition, International Media Group estimated $100 million to $500 million in assets and debts. The petition was signed by Dennis J. Davis, chief restructuring officer. No trustee, examiner or committee has been appointed in any of the Debtors' cases. J.B. POINDEXTER: Moody's Raises Corporate Family Rating to 'B1' --------------------------------------------------------------- Moody's Investors Service upgraded J.B. Poindexter & Co., Inc.'s Corporate Family ("CFR") and Probability of Default ("PDR") ratings to B1 from B2. Concurrently, Moody's assigned a B2 to the company's proposed $200 million senior unsecured notes issuance, proceeds of which will be used in part to refinance the existing 8.75% senior unsecured notes due March 2014, also upgraded to B2 from B3. The company's short-term speculative grade liquidity rating ("SGL") was upgraded to SGL-2 from SGL-3. The rating outlook is stable. The rating upgrade to a B1 CFR reflects the company's improved operational and financial performance, as well as Moody's expectations for continued improvement along with the maintenance of good liquidity at J.B. Poindexter. The following ratings/assessments have been affected: Corporate Family Rating, upgraded to B1 from B2; Probability of Default Rating, upgraded to B1 from B2; $200 million senior unsecured notes due 2022, assigned B2 (LGD4, 61%); Existing senior unsecured notes due March 2014, upgraded to B2 (LGD4, 63%) from B3 (LGD4, 63%); Speculative Grade Liquidity Rating, upgraded to SGL-2 from SGL-3. The outlook remains stable. The ratings on the existing senior unsecured notes due March 2014 will be withdrawn upon the successful tender and retirement of these notes. The company's SGL rating will also be withdrawn at that time as the new proposed notes will be 144a for life and the company is not expected to continue filing its financials with the Securities and Exchange Commission post-refinancing. Ratings Rationale The B1 CFR considers improvement in reported EBITDA to over $59 million in 2011 from roughly $35 million in 2010 with significant improvements at Morgan Corporation and Specialty Manufacturing Division (especially its MIC business unit which has considerable exposure to oil and gas exploration and production service industry). The rating action recognizes the increase in backlog at the Morgan segment, exiting of unprofitable products at MIC, and a generally better outlook for class 5-7 truck sales and for energy exploration activity in 2012. J.B. Poindexter has been able to reduce its debt leverage (on a Moody's adjusted basis) from over 7 times at its recent recession-era peak at March 31, 2010 to under 4 times at the most recent year ended December 31, 2011. Moody's expects leverage to be maintained below 4 times with continued gradual improvement in this metric. Moody's also expects interest coverage to improve above 2.5x EBIT-to-Interest and free cash flow to remain positive over the intermediate term. The SGL upgrade to SGL-2 from SGL-3 reflects the extension of the company's $25 million asset based revolving credit facility for four year, solid cash balances, and positive free cash flow generation, which enabled the company to repay $39.5 million of outstanding notes in the fourth quarter of 2011 while ending the year with over $40 million of cash. The stable outlook assumes that continued improvement in production volumes across major end markets and robust backlogs will result in improved credit metrics for the company. The outlook further anticipates that J.B. Poindexter will maintain a good liquidity profile (including a healthy cash balance) and will not pursue leveraging transactions. An additional near-term ratings upgrade is unlikely. However, Moody's could consider a positive action with expectations for leverage to be sustained below 2.5x debt-to-EBITDA and interest coverage in excess of 3.5x EBIT-to-interest. Absent permanent debt reduction, a rating upgrade would also likely require progress towards improving through-the-cycle profitability above and beyond any positive cyclical effects from higher exploration activity and vehicle production. Moody's could consider a negative outlook or rating downgrade with expectations for sustained leverage in excess of 4.5x debt-to-EBITDA, interest coverage below 2.0x EBIT- to-interest, or if the company experienced a deterioration in its liquidity position. Moody's could also consider a negative action if J.B. Poindexter pursues a leveraging transaction or adopts a more aggressive financial philosophy. The principal methodology used in rating J.B. Poindexter & Co., Inc. was the Global Automotive Supplier 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. J.B. Poindexter & Co., Inc., headquartered in Houston, Texas, manufactures commercial truck bodies for medium-duty trucks, pickup truck caps and tonneau covers, truck bodies for walk-in step vans, funeral coaches and limousines, provides contract manufacturing services for precision metal parts and machining and casting services. J.B. Poindexter's revenue for the year ended December 31, 2011 was approximately $708 million. JACUZZI BRANDS: S&P Cuts Corp. Credit Rating to 'CCC'; Outlook Neg ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Chino, Calif.-based spa and bath manufacturer Jacuzzi Brands Corp. to 'CCC' from 'B-'. The outlook is negative. "At the same time, we lowered the issue-level ratings on the company's first-lien bank term loan and synthetic letters of credit facility to 'CCC-' (one notch below the corporate credit rating) from 'CCC+'. The recovery rating on these loans remains '5', indicating our expectation for modest (10% to 30%) recovery in the event of payment default," S&P said. "The downgrade reflects our view that highly leveraged Jacuzzi faces significant near-term refinancing risk as its entire capital structure matures over the next two years," said Standard & Poor's credit analyst Megan Johnston. "The company's revolving credit facilities mature in February 2013, a $35 million term loan matures in November 2013, and its $170 million first-lien term loan matures in February 2014." "In addition, we expect that operating performance will remain challenged in light of the continued downturn in residential construction, which has led to weak demand for its discretionary bath and spa products. For fiscal year 2012, (Jacuzzi's fiscal year ends Oct. 1), we are projecting that sales could decline modestly from 2011 levels, given depressed demand in both the U.S. and international markets. Approximately 50% of sales are to international markets, including Europe where Standard & Poor's economists are projecting a mild recession in the first half of 2012, with 0% GDP growth for the entire year. However, we believe that EBITDA could improve slightly over fiscal year 2011 levels due to the company's ongoing rationalization and cost-cutting measures. Still, debt to EBITDA should remain well above 10x in 2012, with EBITDA coverage of interest of about 1.5x. (Privately- held Jacuzzi does not disclose financial performance publicly,)" S&P said. Jacuzzi Brands Corp. designs, manufactures and markets hot tubs, spas, whirlpool baths, showers, toilets and sinks for the worldwide residential and commercial markets. The company's Jacuzzi, Sundance, and Astracast branded products are primarily sold in North America, Europe and South America. "The rating outlook is negative, reflecting Jacuzzi's refinancing risk, as well as our belief that residential construction and spending on discretionary bath and spa products will remain weak. If the company is unable to refinance its maturities within the coming months, we could lower the ratings. Although unlikely in the near term, we could raise the ratings if the company is able to improve its operating performance while also addressing its upcoming debt maturities and improving its liquidity position," S&P said. JESCO CONSTRUCTION: Court Won't Remove War-Con from Committee ------------------------------------------------------------- The Hon. Neil P. Olack of the U.S. Bankruptcy Court for the Southern District of Mississippi denied without prejudice JESCO Construction Corp.'s motion to modify appointment of statutory committee of unsecured creditors to eliminate Theodore Conner, III, doing business as War-Con Construction. The Court also ordered that the U.S. Trustee will consider appointing at least two additional members to diversify the representation of the Official Committee of Unsecured Creditors in the case. As reported in the Troubled Company Reporter on March 2, 2012, the Debtor requested that Theodore Conner, III, doing business as War- Con Construction be eliminated from the Committee explaining that it does not owe Conner any sums of money and, in fact, the Debtor is advised, and on information and belief alleges, that the transaction giving rise to Conner's claim came about prior to the Debtor being in existence. As reported in the TCR on Feb. 14, 2012, Henry G. Hobbs, the Acting United States Trustee for Region 5, appointed Walter C. Ernest, III, Marine; R.E. Huber Construction Company; and Theodore Conner, III, doing business as War-Con Construction to serve on the Committee. About Jesco Construction Corp. Headquartered in Wiggins, Mississippi, Jesco Construction Corp., a Delaware Corporation, specializes in disaster response and was part of the Hurricane Katrina cleanup. It filed for Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50014) on Jan. 5, 2012. Judge Katharine M. Samson presides over the case. Attorneys at the Law Offices of Craig M. Geno, PLLC, serve as counsel for the Debtor. In its schedules, the Debtor disclosed $100 million in assets and $14,662,901 in liabilities. JOBSON MEDICAL: Gordian OK'd for Financial Advisory Services ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized Jobson Medical Information Holdings LLC. et al., to employ Gordian Group, LLC to provide financial advisory and investment banking services effective as of the Petition Date. As reported in the Troubled Company Reporter on Feb. 14, 2012, Gordian was founded in 1988 and is an investment banking firm with deep expertise in financial restructurings, providing a broad range of corporate financial advisory services. Today, Gordian has a nationwide practice, providing financial advisory services to companies in distressed situations. Gordian rendered prepetition services to the Debtors, making the firm familiar to the Debtors' business operations, capital structure, financing documents, and other material information. Gordian's services include assisting the Debtors in raising new or replacement capital or an investment (debt or equity) in the Company, and in soliciting and evaluating proposals from potential parties to financial transactions and with the negotiation, structuring and implementation of a financial transaction, including participation in negotiations with creditors, equity holders and other parties involved in a financial transaction. Gordian will be compensated according to this Fee Structure: a) Monthly fees of $25,000 per month; b) In connection with the consummation of a Financial Transaction or Financial Transactions, fees consisting of $1,000,000 plus: (i) 1.0% of the Aggregate Consideration that is paid or payable in connection with any Financial Transaction to the extent that it involves parties that either are not already invested in the debt of the Company or have not previously engaged in discussions with the Company's sponsor with respect to a Financial Transaction, plus; (ii) 0.5% of (A) the Aggregate Consideration that is paid or payable in connection with any Financial Transaction to the extent that it involves parties that are already invested in the debt of the Company, less the amount of their total loan commitments under the senior secured credit facilities of the Company immediately prior to the closing of the Financial Transaction, plus (B) the Aggregate Consideration paid or payable in connection with any Financial Transaction to the extent that it involves The Wicks Group of Companies, L.L.C., the Debtors' sponsor and principal equity holder, plus; (iii) 0.25% of such portion of the Aggregate Consideration paid or payable in connection with any Financial Transaction to the extent that it constitutes a reinvestment of funds by parties that are already invested in the debt of the Company; and c) Notwithstanding, the aggregate fees payable to Gordian will not exceed the sum of $1,925,000. Gordian will be reimbursed for out-of-pocket expenses. The Debtors also have agreed, among other things, to indemnify and hold harmless Gordian and its personnel in connection with Gordian's representation of the Debtors. Peter S. Kaufman -- psk@gordiangroup.com -- president of Gordian Group, attests that his firm does not hold or represent any interest adverse to the Debtors, their creditors or estates and is a disinterested person. 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. JOBSON MEDICAL: Lowenstein Sandler Approved as Bankruptcy Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Jobson Medical Information Holdings LLC. et al., to employ Lowenstein Sandler PC as counsel. AS reported in the Troubled Company Reporter on Feb. 14, 2012, the Lowenstein Sandler team is led by Sharon L. Levine, Esq., Paul Kizel, Esq., and Tatiana Ingman, Esq. Lowenstein's current hourly rates are: Members of the Firm $435 - $895 Senior Counsel $390 - $660 Counsel $350 - $630 Associates $250 - $470 Paralegals and Legal Assistants $145 - $245 Lowenstein was first retained to represent the Debtors in late September 2011. On Nov. 28, 2011, the Debtors' paid Lowenstein $350,000 for services rendered and to be rendered in the future. On Nov. 30, 2011, the Debtors paid Lowenstein another $100,000 as an additional retainer for future services. On Dec. 2, 2011, the Debtors paid Lowenstein $60,000 as an additional retainer for future services, and on Feb. 1, 2012, the Debtors paid Lowenstein $425,000. As of the Petition Date, Lowenstein is holding roughly $15,000 as a retainer for future services and expenses. In addition, on Nov. 30, 2011, the Debtors remitted to Lowenstein the amount necessary for payment of the filing fees ($17,782) associated with the filing of the Debtors' chapter 11 cases. Ms. Levine, Esq., a member of the firm, attests that the members, counsel, and associates of Lowenstein do not have any connection with the Debtors, their creditors, or any other party-in-interest, or their attorneys, and Lowenstein is "disinterested" and does not hold or represent an interest adverse to the Debtors' estates. 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. KILROY REALTY: S&P Rates $100-Mil. Series G Preferred Stock 'BB' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' rating to the $100 million 6.875% series G cumulative redeemable preferred stock issued by Kilroy Realty Corp. Kilroy indicated that it intends to use net proceeds from the offering to fund a portion of its recently announced redemption of all outstanding shares of its 7.80% series E and 7.50% series F cumulative redeemable preferred stock and for other general corporate purposes, which may include acquiring properties and repaying outstanding indebtedness. "Standard & Poor's ratings on Los Angeles-based Kilroy and its operating partnership, Kilroy Realty L.P., including its 'BBB-' corporate credit ratings, reflect the office and industrial REIT's satisfactory business risk profile, characterized by a good- quality, well-located portfolio, and the strong local presence of its management team. We believe that the quality of Kilroy's portfolio, coupled with the strength of the company's local team and balance sheet, provides the REIT with an advantage over smaller local competitors, as well as larger, less-nimble national competitors," S&P said. "During the recent sharp cyclical economic downturn, the REIT issued equity and cut its 2009 dividend to bolster its intermediate financial profile. These actions cushioned coverage measures during a period of significant occupancy attrition arising from tough economic conditions in the company's Southern California markets. Over the past year, strong leasing activity has steadily improved occupancy, as same-store average occupancy for full-year 2011 was 92%, up 570 basis points from occupancy in the prior year," S&P said. "Our stable outlook on Kilroy reflects our view that same-store portfolio cash flows have stabilized and will strengthen over the next year due to better portfolio performance and contributions from the REIT's significant acquisition activity over the past 18 months. We could lower our corporate credit rating on Kilroy if cash flow deteriorates more severely than we expect, or if a debt financed acquisition strategy causes fixed-charge coverage to fall below 1.9x on a sustained basis and total coverage (including the common dividend) falls below 1.0x. We would consider an upgrade if portfolio occupancy and operating performance strengthen, the company prudently pursues growth that improves the diversity of the portfolio, and fixed-charge coverage approaches 3x," S&P said. Ratings List Kilroy Realty Corp./Kilroy Realty L.P. Corporate credit rating BBB-/Stable/-- Kilroy Realty Corp./Kilroy Realty L.P. $100M 6.875% series G cumulative redeemable preferred stock BB LEHMAN BROTHERS: Gets US$1.5BB Distribution From Asian Subsidiary ----------------------------------------------------------------- Lehman Brothers Holdings Inc. has received a cash distribution of $1.534 billion from Lehman Brothers Asia Holdings, its affiliate in liquidation in Hong Kong. The payment was LBHI?s aggregate share of its affiliate?s first two distributions. It was pursuant to a settlement agreement entered into on July 31, 2011, which became effective upon the March 6, 2012 effective date of LBHI?s bankruptcy plan. This distribution, which was received on March 15, 2012, had been anticipated and will be included in LBHI?s first distribution to its creditors on April 17, 2012. LBHI and its affiliated Debtors expect additional cash recoveries from the Hong Kong entities in the future. 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) LIONCREST TOWERS: Withdraws Motion to Dismiss Chapter 11 Case ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois approved the withdrawal of motions dismissing Lioncrest Towers, LLC's Chapter 11 case and granting relief from automatic stay. As reported in the Troubled Company Reporter on March 16, 2011, Wells Fargo Bank N.A. asked the Court to grant relief from the automatic stay to allow it to foreclose on its collateral, and to dismiss the Debtor's case. About Lioncrest Towers Lioncrest Towers, LLC, owns and operates a residential apartment project in Richton Park, Illinois, known as Park Towers. It filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 10-36805) on Aug. 17, 2010. Richard H. Fimoff, Esq., at Robbins, Salomon & Patt, Ltd., in Chicago, assists the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million. The Debtor's plan of reorganization provides that secured creditor Wells Fargo, owed $29.5 million, will be paid in full. It will be paid in monthly installments of interest for five years, plus four annual principal repayments of $300,000 each, with payment of the unpaid balance at the end of the fifth year. Unsecured creditors will also be paid in full in quarterly installments with interest over one year. Unsecured creditors are expected to recover $38,917 plus interest at 5%. Equity owners will receive no distribution but will retain its ownership interest. LYMAN LUMBER: Panel to Retain Conway MacKenzie as Fin'l Advisor --------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 case of Lyman Lumber Company seeks permission from the U.S. Bankruptcy Court to retain Conway MacKenzie, Inc. as its financial advisor. The firm's rates are: Personnel Rates --------- ----- Kevin Berry $395 Other professionals $350 Kevin A. Berry, Managing Director of Conway, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Lyman Lumber Lyman Lumber Company sells building supplies, such as framing beams, roofing materials, siding and drywall to residential builders. The 113-year old company and several affiliates sought Chapter 11 petition (Bankr. D. Minn. Lead Case No. 11-45190) on Aug. 4, 2011. Judge Dennis O'Brien presides over the cases. Lyman Lumber estimated $50 million to $100 million in assets and $100 million to $500 million in debts. The petition was signed by James E. Hurd, president and chief executive officer. The affiliates that filed for Chapter 11 are: Lyman Holding Company; Automated Building Components, Inc.; Building Material Wholesalers; Carpentry Contractors Corp.; Construction Mortgage Investors Co.; Lyman Development Co.; Lyman Lumber of Wisconsin, Inc.; Lyman properties LLC; Mid-America Cedar, Inc.; Woodinville Lumber, Inc.; and Woodinville Construction Services LLC. Cynthia A. Moyer, Esq., Douglas W. Kassebaum, Esq., James L. Baillie, Esq., and Sarah M. Gibbs, Esq., at Fredrikson & Bryon, P.A., serve as bankruptcy counsel. BGA Management, LLC d/b/a Alliance Management, developed and executed a sale process and marketing strategy for the Debtors' assets. The Official Committee of Unsecured Creditors of Lyman Lumber Company tapped Fafinsky, Mark & Johnson, P.A., as its counsel. Alliance Management is the financial and turnaround consultant. When they filed for bankruptcy, the Debtors had in hand a term sheet with SP Asset Management, LLC, a unit of Steel Partners Holdings L.P., to serve as stalking horse bidder for the assets of the Debtors. The cash portion of Steel Partners' offer was $22 million. New York City-based Steel Partners is a diversified holding company that owns and operates businesses in a variety of industries. The Steel Partners' deal did not include the Debtors' businesses located in Washington State as well as some other assets in Minnesota, Wisconsin, and North Carolina. The Debtors will bring separate motions to address the sale or other disposition of these assets. At an October 2011 auction, SP Asset Management and two other bidders lost to BlackEagle Partners. BlackEagle acquired the Debtors' Midwest operations, including its Chanhassen location, Automated Building Components, Carpentry Contractors Corp., and Lyman Lumber of Wisconsin. BlackEagle paid roughly $23 million. The transaction was effective Oct. 28, 2011. BlackEagle Partners -- http://www.blackeaglepartners.com/-- owns US LBM Holdings, a collection of eight building products distributors serving the Midwest, Northeast, and Mid-Atlantic in nine states with more than 40 locations. US LBM is one of the fastest growing suppliers of building products in the United States. MADISON 92ND: Taps Cushman & Wakefield as Financial Advisors ------------------------------------------------------------ Madison 92nd Street Associates, LLC asks the U.S. Bankruptcy Court for the Southern District of New York for permission to Cushman & Wakefield Sonnenblick Goldman, LLC as financial advisors to assist in the sale of the Debtor's hotel. As exclusive financial advisor, Cushman will, among other things: a) provide financial analysis of the hotel; b) prepare a descriptive memorandum concerning the hotel; and c) develop, update and review on an ongoing basis a list of parties who might be interested in acquiring the hotel, or an interest therein. In consideration of the services to be performed by Cushman, the Debtor agrees to pay Cushman: -- In the event of a sale with a stalking horse, a non- refundable base fee of $250,000, together with an Advisory Fee equal to 5% of the amount by which the successful bid exceeds the cover bid required in the stalking horse contract, plus 6% on any incremental amount above $90 million and 7% on any incremental amount above $93 million. -- In the event of a sale without a stalking horse, a Base Fee of 0.5% (50 basis points) of total Consideration up to $88 million plus an Advisory Fee equal to 5% of the amount by which the successful bid exceeds $88 million, plus 6% on any incremental amount above $90 million, plus 7% on any incremental amount above $93 million. -- The Debtor will also reimburse Cushman's reasonable expenses up to $30,000. -- The Debtor agrees to indemnify Cushman for acts related to the engagement except for acts of gross negligence. Cushman's decision to accept this engagement to advise and assist the Debtor is contingent upon its ability to be retained in accordance with its customary terms and conditions of employment, compensated for its services and reimbursed for the out-of-pocket expenses it incurs in accordance with its customary billing practices and be indemnified. Cushman is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Madison 92nd Madison 92nd Street Associates, LLC, owns real property improved by a hotel located at 410 East 92nd Street, New York, known as the Upper East Side Courtyard by Marriott. It filed for Chapter 11 bankruptcy protection as lender General Electric Capital Corp., owed $74 million, has scheduled a foreclosure sale for Aug. 24, 2011. The petition (Bankr. S.D.N.Y. Case No. 11-13917) was filed Aug. 16, 2011, before Judge Stuart M. Bernstein. J. Ted Donovan, Esq., at Goldberg Weprin Finkel Goldstein LLP, serves as the Debtor's counsel. It scheduled $84,471,069 in assets and $75,398,580 in debts. The petition was signed by Louis Taic, managing member of 92nd Hotel Associates, LLC and Jeffrey Kosow, managing member of JKNY, LLC, members of the Debtor. Courtyard Management Corporation, which manages and operates the hotel pursuant to a management agreement, is represented by Thomas R. Califano, Esq., and William M. Goldman, Esq., at DLA Piper LLP (US). The Bankruptcy Judge appointed an examiner to explore the best route to reorganization for the Debtor amid a rift between two investor groups. Thomas R. Slome, the examiner, tapped his firm, Meyer, Suozzi, English & Klein, P.C., as his counsel. MADISON 92ND: CIM-Led Auction of All Assets Set for April 16 ------------------------------------------------------------ The Hon. Stuart M. Bernstein U.S. Bankruptcy Court for the Southern District of New York authorized Madison 92nd Street Associates, LLC to sell substantially all of the estate's real estate assets in an auction led by CIM Group Acquisitions, LLC. The Debtors scheduled an April 16, 2012 auction for the assets. Competing bids are due 9:00 a.m. (Eastern Time) on April 12. The Court will consider the sale of the assets to CIM or the winning bidder at a hearing on April 23, at 2:00 p.m. Objections, if any, are due April 19. On Feb. 16, 2012, the Debtor filed an amendment to the sale motion. A full-text copy of the amended motion and sale procedures is available for free at: http://bankrupt.com/misc/MADISON92ND_Amended-SaleProcedures.pdf As reported in the Troubled Company Reporter on Jan. 13, 2012, the Debtor asked the Court for entry an order to approve sale procedures, break-up fee and notice requirements and authority to sell of substantially all of estate's real estate assets free and clear of liens, claims and interests and assumption and assignment of executory contracts and payment of senior secured claims. A contract of sale has been executed between the Debtor and CIM, under which CIM has agreed to purchase the Debtor's Hotel and assume and assign certain leases and executory contracts, for a purchase price of $84,100,000. CIM has also agreed to be the stalking horse in the auction under Purchase Agreement. Specifically excluded from the Sale Assets are causes of action against third parties, including without limitation avoidance actions, actions against Courtyard, Marriott and any affiliates of such parties. The Debtor has determined that the conducting of an auction will enable the Debtor to obtain the highest and best offers and maximize the value of the estate for the benefit of creditors. The sale proceeds will be used to fund the Sale Plan. About Madison 92nd Madison 92nd Street Associates, LLC, owns real property improved by a hotel located at 410 East 92nd Street, New York, known as the Upper East Side Courtyard by Marriott. It filed for Chapter 11 bankruptcy protection as lender General Electric Capital Corp., owed $74 million, has scheduled a foreclosure sale for Aug. 24, 2011. The petition (Bankr. S.D.N.Y. Case No. 11-13917) was filed Aug. 16, 2011, before Judge Stuart M. Bernstein. J. Ted Donovan, Esq., at Goldberg Weprin Finkel Goldstein LLP, serves as the Debtor's counsel. It scheduled $84,471,069 in assets and $75,398,580 in debts. The petition was signed by Louis Taic, managing member of 92nd Hotel Associates, LLC and Jeffrey Kosow, managing member of JKNY, LLC, members of the Debtor. Courtyard Management Corporation, which manages and operates the hotel pursuant to a management agreement, is represented by Thomas R. Califano, Esq., and William M. Goldman, Esq., at DLA Piper LLP (US). The Bankruptcy Judge appointed an examiner to explore the best route to reorganization for the Debtor amid a rift between two investor groups. Thomas R. Slome, the examiner, tapped his firm, Meyer, Suozzi, English & Klein, P.C., as his counsel. MADISON 92ND: Taps Tuchman Korngold on Tax Certiorari Claim ----------------------------------------------------------- Madison 92nd Street Associates, LLC asks the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Tuchman, Korngold, Weiss, Lippman & Gelles, LLP as special counsel in connection with a tax certiorari claim against the New York City Tax Commission. Tuchman will: a) protest to the NYCTC the actual assessed value of the Debtor's property; b) appear before the NYCTC on behalf of the Debtor; and c) institute proceedings such as the Certiorari Claim to review the final determination of the NYCTC. The Debtor agreed to pay Tuchman a contingent fee equal to 15% of the tax benefit resulting from a reduction in the actual assessed value of the Debtor's property. To the best of the Debtor's knowledge, Tuchman is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About Madison 92nd Madison 92nd Street Associates, LLC, owns real property improved by a hotel located at 410 East 92nd Street, New York, known as the Upper East Side Courtyard by Marriott. It filed for Chapter 11 bankruptcy protection as lender General Electric Capital Corp., owed $74 million, has scheduled a foreclosure sale for Aug. 24, 2011. The petition (Bankr. S.D.N.Y. Case No. 11-13917) was filed Aug. 16, 2011, before Judge Stuart M. Bernstein. J. Ted Donovan, Esq., at Goldberg Weprin Finkel Goldstein LLP, serves as the Debtor's counsel. It scheduled $84,471,069 in assets and $75,398,580 in debts. The petition was signed by Louis Taic, managing member of 92nd Hotel Associates, LLC and Jeffrey Kosow, managing member of JKNY, LLC, members of the Debtor. Courtyard Management Corporation, which manages and operates the hotel pursuant to a management agreement, is represented by Thomas R. Califano, Esq., and William M. Goldman, Esq., at DLA Piper LLP (US). The Bankruptcy Judge appointed an examiner to explore the best route to reorganization for the Debtor amid a rift between two investor groups. Thomas R. Slome, the examiner, tapped his firm, Meyer, Suozzi, English & Klein, P.C., as his counsel. MAGUIRE GROUP: Has Until May 21 to Decide on Unexpired Leases -------------------------------------------------------------- The U.S. Bankruptcy Court Southern District of Florida extended until May 21, 2012, Maguire Group Holdings, Inc., et al.'s time to assume or reject all of their unexpired leases of nonresidential real property. As reported in the Troubled Company Reporter on March 7, 2012, the Debtors related 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. MAGUIRE GROUP: Plan Exclusivity Extended Until July 20 ------------------------------------------------------ The U.S. Bankruptcy Court Southern District of Florida extended Maguire Group Holdings, Inc., et al.'s exclusive period to solicit acceptances for a proposed plan of reorganization July 20, 2012. The Court denied as moot the Debtors' request to extend its exclusive period to file a Plan because the Debtors had filed a Plan within the exclusive period. As reported in the Troubled Company Reporter on March 7, 2012, the Court also requested that its exclusive period to file a proposed Plan be extended until May 21. 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. MARCO POLO SEATRADE: Has Until March 31 to File Chapter 11 Plan --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended Marco Polo Seatrade B.V., et al.'s exclusive periods to file and solicit acceptances for a proposed Chapter 11 Plan until March 31, 2012, and May 31, respectively. The Debtors related that they needed to complete the negotiations and discussions that will dictate whether a consensual plan is possible. About Marco Polo Marco Polo Seatrade B.V. operates an international commercial vessel management company that specializes in providing commercial and technical vessel management services to third parties. Founded in 2005, the Company mainly operates under the name of Seaarland Shipping Management and maintains corporate headquarters in Amsterdam, the Netherlands. The primary assets consist of six tankers that are regularly employed in international trade, and call upon ports worldwide. Marco Polo and three affiliated entities filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-13634) on July 29, 2011. The other affiliates are Seaarland Shipping Management B.V.; Magellano Marine C.V.; and Cargoship Maritime B.V. Marco Polo is the sole owner of Seaarland, which in turn is the sole owner of Cargoship, and also holds a 5% stake in Magellano. The remaining 95% stake in Magellano is owned by Amsterdam-based Poule B.V., while another Amsterdam company, Falm International Holding B.V. is the sole owner of Marco Polo. Falm and Poule didn't file bankruptcy petitions. The filings were prompted after lender Credit Agricole Corporate & Investment Bank seized one ship on July 21, 2011, and was on the cusp of seizing two more on July 29. The arrest of the vessel was authorized by the U.K. Admiralty Court. Credit Agricole also attached a bank account with almost US$1.8 million on July 29. The Chapter 11 filing precluded the seizure of the two other vessels. The company started a lawsuit against the two creditors in January 2012. The cases are before Judge James M. Peck. Evan D. Flaschen, Esq., Robert G. Burns, Esq., and Andrew J. Schoulder, Esq., at Bracewell & Giuliani LLP, in New York, serve as the Debtors' bankruptcy counsel. Kurtzman Carson Consultants LLC serves as notice and claims agent. The petition noted that the Debtors' assets and debts are both more than US$100 million and less than US$500 million. Tracy Hope Davis, the United States Trustee for Region 2, appointed three members to serve on the Official Committee of Unsecured Creditors. The Committee has retained Blank Rome LLP as its attorney. Creditor Credit Agricole Corporate and Investment Bank is represented by Alfred E. Yudes, Jr., Esq., and Jane Freeberg Sarma, Esq., at Watson, Farley & Williams (New York) LLP. Gregory M. Petrick, Esq., Ingrid Bagby, Esq., and Sharon J. Richardson, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, represents secured creditor and post-petition lender The Royal bank of Scotland plc. MF GLOBAL: SIPA Trustee to Distribute $685-Mil. to Clients ---------------------------------------------------------- James W. Giddens, the trustee for the liquidation of the business of MF Global Inc. under the U.S. Securities Investor Protection Act of 1970, seeks permission from Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to make first interim claims distribution of commodities customer property for allowed customer claims. The SIPA Trustee specifically seeks to effect claims distribution of: (i) up to $600 million of customer property held as segregated by MFGI for its former commodities futures customers who traded on US exchanges pursuant to Section 4d of the Commodity Exchange Act; (ii) up to $50 million of customer property associated with commodity transactions in foreign markets pursuant to Part 30.7 of Title 17 of the Electronic Code of Federal Regulations; and (iii) up to $35 million of customer property to a domestic delivery class, which the SIPA Trustee has identified as consisting of physical customer property that has been or will be reduced to cash in any manner. James B. Kobak, Jr., Esq., at Hughes Hubbard & Reed LLP, in New York, apprised the Court that commodities customers have received roughly 72% of their 4d funds. Because the SIPA Trustee has recovered only a small portion of 30.7 funds so far, customers have yet to receive any distribution of 30.7 funds, he noted. At this point, the SIPA Trustee's best estimates of expected distribution percentages are more than 80% of each Finalized Claim for Segregated Funds, more than 80% of each Finalized Claim for Delivery Funds, and somewhat less than 10% of each Finalized Claim for Secured Funds. Mr. Kobak said the timing of the sought distributions is not currently known, clarifying that the distributions would not be in bulk. The distributions would be made as part of the claims process and would occur on a rolling basis to individual commodities customers who filed claims by the Jan. 31, 2012 deadline and have received and agreed to the SIPA Trustee's determination of their claims, he noted. "We believe that requesting an additional distribution is prudent and appropriate at this time and is consistent with our goal of returning as much customer property as possible, as quickly as possible, in a manner that is fair to all customers and that is consistent with the law," the SIPA Trustee said in a March 15 statement. "We will also continue our efforts to recover additional assets for the former customers of MF Global Inc. in an efficient manner." The SIPA Trustee expects the three bulk transfers plus the first interim distribution will lead to commodities customers receiving: * Over 80% of each finalized claim for US commodities customers who traded on US exchanges; * Over 80% of each finalized claim for delivery funds; * Less than 10% of each finalized claim for US commodities customers who traded on foreign exchanges. This distribution would still allow the SIPA Trustee to maintain a proper reserve of funds for each class of customer property, including a reserve of roughly $700 million for 4d funds, approximately $40 million for 30.7 funds, and roughly $10 million for delivery funds, Mr. Kobak said. The SIPA Trustee is required by law to hold an appropriate reserve until disputed claims against the estate are either resolved through negotiation or by the Court, he added. Disputes with MF Global U.K. Ltd. and other units may make it impossible to determine the exact amounts to be distributed, Bloomberg News quoted the SIPA Trustee as saying. The Commodity Futures Trading Commission filed a statement in support of the SIPA Trustee's Motion. The proposed distribution, says the CFTC, would further the objective of making whole all public customers of MFGI. The Court will consider the SIPA Trustee's request on April 12, 2012. Objections are due no later than March 30. 2012. Objections are due no later than March 26. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- was one of the world's leading brokers of commodities and listed derivatives. MF Global provided access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It was the largest bankruptcy filing in 2011. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on Dec. 19, 2011. MF Global Holdings USA Inc., doing business as Farr Whitlock Dixon & Co. Inc., and Man Group USA Inc., filed a Chapter 11 petition on March 2, 2012. Holdings USA provided administrative services to MF Ltd. and its domestic subsidiaries. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel; and (h) authorizing the Committee to retain and employ (i) Dewey & LeBoeuf LLP, as the Committee's counsel; and (ii) Capstone Advisory Group LLC as financial advisor. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: SIPA Trustee Seeks Nod for $14.5MM Precious Metal Sale ----------------------------------------------------------------- James W. Giddens, the trustee for the liquidation of the business of MF Global Inc. under the U.S. Securities Investor Protection Act of 1970, seeks Bankruptcy Court approval of a purchase agreement governing the sale of precious metal warehouse receipts to Jefferies Bache Financial Services, Inc., for $14.5 million, free and clear of all liens, claims, and encumbrances. As part of the third Court-approved bulk transfer, the Court authorized the SIPA Trustee to distribute non-liquid assets, like warehouse receipts, precious metal certificates, shipping certificates, and other certificates of title for commodities, held by MFGI for its customers on the same pro rata basis as domestically held segregated property. The SIPA Trustee, working in concert with The CME Group, has sought to find the most prudent and cost-effective method of converting the Physical Customer Property to cash. The SIPA Trustee determined that the best means of doing so is to through a bulk sale of the Certificates to Jefferies. Subject to Court approval, the SIPA Trustee and Jefferies have agreed that Jefferies will purchase the untransferred Physical Customer Property for 99% of the aggregate closing price for futures contracts on the precious metals underlying the Certificates for the next active trading month. The sale of the Certificates is subject to the satisfaction of the condition that the Court will have issued an order approving the transaction. A full-text copy of the Purchase Agreement is available for free at http://bankrupt.com/misc/MFGlobal_JefferiesPurchaseAgr.pdf The SIPA Trustee seeks to complete the implementation of the third bulk transfer order by liquidating the Physical Customer Property remaining under his control. The sale of the Certificates to Jefferies pursuant to the Purchase Agreement represents the optimal means for the SIPA Trustee to liquidate the Physical Customer Property still under the SIPA Trustee's control, thus enabling him to satisfy the remaining pro rata distributions owed to Physical Property Customers and fully effectuate the Third Bulk Transfer Order, James B. Kobak, Jr., Esq., at Hughes Hubbard & Reed LLP, in New York, tells the Court. In conjunction, the SIPA Trustee asks the Court to waive the 14- day stay provided for by Rule 6004(h) of the Federal Rules of Bankruptcy Procedure. The Court will consider the SIPA Trustee's request on April 2, About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- was one of the world's leading brokers of commodities and listed derivatives. MF Global provided access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It was the largest bankruptcy filing in 2011. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on Dec. 19, 2011. MF Global Holdings USA Inc., doing business as Farr Whitlock Dixon & Co. Inc., and Man Group USA Inc., filed a Chapter 11 petition on March 2, 2012. Holdings USA provided administrative services to MF Ltd. and its domestic subsidiaries. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel; and (h) authorizing the Committee to retain and employ (i) Dewey & LeBoeuf LLP, as the Committee's counsel; and (ii) Capstone Advisory Group LLC as financial advisor. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: Sec. 341 Meeting of Creditors Adjourned to April 5 ------------------------------------------------------------- Tracy Hope Davis, the U.S. Trustee for Region 2, adjourned the meeting of creditors of MF Global Holdings Ltd. and MF Global Finance USA Inc. from January 26, 2012 to April 5, 2012, Thursday, at 3:00 p.m. Eastern Time. The location of the meeting is at the Office of the U.S. Trustee at 80 Broad Street, 4th Floor, New York. Similarly, the Section 341 meeting of creditors for MF Global Capital LLC, MF Global FX Clear LLC, and MF Global Market Services LLC, which began on January 26, 2012, is also adjourned to April 5, 2012. The Sec. 341 meeting of creditors for MF Global Holdings USA Inc., which filed for bankruptcy protection on March 2, 2012, is also set on April 5, 2012. The meeting offers creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. Attendance by the Debtor's creditors at the meeting is welcome, but not required. MFGH USA Case The U.S. Trustee also will convene a meeting of the creditors of MF Global Holdings USA Inc. on April 5 at 3:00 p.m. Eastern Time. The location of the meeting is at Office of the U.S. Trustee at 80 Broad Street, 4th Floor, New York. This is the first meeting of creditors under Section 341(a) of the Bankruptcy Code. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- was one of the world's leading brokers of commodities and listed derivatives. MF Global provided access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It was the largest bankruptcy filing in 2011. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on Dec. 19, 2011. MF Global Holdings USA Inc., doing business as Farr Whitlock Dixon & Co. Inc., and Man Group USA Inc., filed a Chapter 11 petition on March 2, 2012. Holdings USA provided administrative services to MF Ltd. and its domestic subsidiaries. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel; and (h) authorizing the Committee to retain and employ (i) Dewey & LeBoeuf LLP, as the Committee's counsel; and (ii) Capstone Advisory Group LLC as financial advisor. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: UK Directors Unsure of Shortfall ------------------------------------------- Directors of MF Global Holding Ltd.'s U.K. unit said they don't know whether the brokerage is in the red or the black, leaving creditors like JPMorgan Chase & Co. and Unipec Singapore Pte. uncertain how much they will recover, Heather Smith of Bloomberg News reported. Administrators of the UK unit from KPMG LLC said the "statement of affairs" from the directors showed about GBP1.87 billion (US$2.93 billion) of assets, compared with liabilities of around GBP1.77 billion, the directors didn't know for how much some assets may be sold, Bloomberg related. JPMorgan is owed about GBP100 million, and Unipec Singapore Pte. GBP23.6 million, the report noted. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- was one of the world's leading brokers of commodities and listed derivatives. MF Global provided access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It was the largest bankruptcy filing in 2011. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on Dec. 19, 2011. MF Global Holdings USA Inc., doing business as Farr Whitlock Dixon & Co. Inc., and Man Group USA Inc., filed a Chapter 11 petition on March 2, 2012. Holdings USA provided administrative services to MF Ltd. and its domestic subsidiaries. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel; and (h) authorizing the Committee to retain and employ (i) Dewey & LeBoeuf LLP, as the Committee's counsel; and (ii) Capstone Advisory Group LLC as financial advisor. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: Investors Seek to Buy Out Australian Unit's Clients -------------------------------------------------------------- Ben Butler of The Sydney Morning Herald reported on March 15 that the liquidator of MF Global's Australian unit has confirmed that investors are proposing to buy out clients of the failed brokerage firm. Deloitte partner Chris Campbell said he did not know who made the approaches, which came from a Britain-based broker, the report said. The approaches follow on from a bidding war for MF Global client positions in the United States, where rival banks are offering up to 91 cents in the dollar, the report added. Mr. Campbell said he has collected $240 million so far but is seeking court guidance on how to divide the amounts he has collected. Mr. Campbell also revealed he failed in an attempt to sell MF Global's business because it was impossible to bind clients to a potential buyer, the report said. Mr. Campbell added he was trying to claw back $34 million held by MF Global's British arm, which acted as a clearing house for Australian customers, and an additional $17 million held at the company's worldwide headquarters in New York, the report added. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- was one of the world's leading brokers of commodities and listed derivatives. MF Global provided access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It was the largest bankruptcy filing in 2011. MFGH's subsidiaries MF Global Capital LLC, MF Global FX Clear LLC and MF Global Market Services, LLC filed for bankruptcy protection on Dec. 19, 2011. MF Global Holdings USA Inc., doing business as Farr Whitlock Dixon & Co. Inc., and Man Group USA Inc., filed a Chapter 11 petition on March 2, 2012. Holdings USA provided administrative services to MF Ltd. and its domestic subsidiaries. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel; and (h) authorizing the Committee to retain and employ (i) Dewey & LeBoeuf LLP, as the Committee's counsel; and (ii) Capstone Advisory Group LLC as financial advisor. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. Seven directors of MF Global Holdings resigned from their posts on Nov. 28, 2011. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. The New York Stock Exchange has removed MFGI securities from listing. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MOVIE GALLERY: Claimant Given 30 Days to Amend Priority Claim ------------------------------------------------------------- Chief Bankruptcy Judge Douglas O. Tice, Jr., deferred ruling on the objection filed by Corliss Moore & Associates, LLC, in its capacity as liquidating trustee for the First Lien Term Lenders Liquidating Trust established under Movie Gallery, Inc.'s confirmed liquidation plan, against proof of claim number 3498 filed by Mario Guerriero and gave the claimant 30 days from the Court's order to amend his claim to set forth with specificity the basis of the claim. Mr. Guerriero asserts a $10,950 priority claim on account of a purported class suit. Mr. Guerriero had attached to the claim form a copy of a complaint that he had filed in October 2009 in the Superior Court of California, San Diego County, seeking to pursue a class action to recover damages against debtor Hollywood Entertainment Corporation8 for, among other things, various alleged violations of the California state labor code relative to wages and work conditions. A class was never certified in that California action, and that action was stayed by the filing of the Feb. 2, 2010, bankruptcy petitions. The Trust objected to the claim, saying the claimant had included insufficient supporting information. The Trust has resolved thousands of claims; Mr. Guerriero's claim remains as one of only a handful of claims as to which an objection by the debtors or the liquidating trustee has not been resolved. A copy of Judge Tice's March 15, 2012 Memorandum Opinion is available at http://is.gd/kWYZTLfrom Leagle.com. About Movie Gallery Based in Wilsonville, Oregon, Movie Gallery, Inc., was the second largest North American video and game rental company behind Blockbuster Inc. Movie Gallery operated stores in the U.S. and Canada under the Movie Gallery, Hollywood Video and Game Crazy brands. Movie Gallery first filed for Chapter 11 bankruptcy protection (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853) on Oct. 16, 2007. Kirkland & Ellis LLP and Kutak Rock LLP represented the Debtors. The Company emerged from bankruptcy on May 20, 2008, with private- investment firms Sopris Capital Advisors LLC and Aspen Advisors LLC as its principal owners. William Kaye was appointed plan administrator and litigation trustee. Movie Gallery returned to Chapter 11 (Bankr. E.D. Va. Case No. 10- 30696) on Feb. 3, 2009. Attorneys at Sonnenschein Nath & Rosenthal LLP and Kutak Rock LLP represented the Debtors in their second restructuring effort. Kurtzman Carson Consultants served as claims and notice agent. In October 2010, a federal bankruptcy judge approved Movie Gallery's liquidation plan, wherein most assets would go to secured creditors, $5 million would go to unsecured creditors, and shareholders would be wiped out. The Plan had the support of the Official Committee of Unsecured Creditors. NEBRASKA BOOK: U.S. Trustee Amends Committee to Add SOF-LBCW ------------------------------------------------------------ Roberta A. Deangelis, U.S. Trustee for Region 3, filed with U.S. Bankruptcy Court for the District of Delaware a third amended notice of appointment of Official Committee of Unsecured Creditors in the Chapter 11 cases of Nebraska Book Company, Inc., et al., to reflect that SOF-LBCW Managed Fund, LP was added to the Committee on March 15, 2012. The Committee now comprises: 1. U.S. Bank National Association Attn: James E. Murphy 100 Wall Street, Suite 1600 New York, NY 10005 Tel: (212) 361-6174 Fax: (212) 514-6841 2. The Bank of New York Mellon Trust Company N.A., as Trustee Attn: David M. Kerr 101 Barclay Street New York, NY 10283 Tel: (212) 815-5650 Fax: (732) 667-9322 3. SOF-LBCW Managed Fund, LP c/o Diao Capital Management LLC Attn: H.C. Charles Diao 477 Madison Ave., 6th Floor New York, NY 10022 Tel: (917) 342-2231 Fax: (885) 335-2231 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. NEWMARKET CORP: S&P Withdraws 'BB+' Corp. Credit Rating at Request ------------------------------------------------------------------ Standard & Poor's Ratings Services has withdrawn its ratings, including its 'BB+' corporate credit rating, on Richmond, Va.- based NewMarket Corp. at the company's request. OVERSEAS SHIPHOLDING: Moody's Keeps 'B3' Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service lowered its Speculative Grade Liquidity rating of Overseas Shipholding Group, Inc, ("OSG") to SGL-4 from SGL-3 to reflect a weak near-term liquidity profile. All of Moody's other ratings of OSG, including the B3 Corporate Family, B3 Probability of Default and Caa1 senior unsecured ratings, remain unchanged. The outlook is negative. Issuer: Overseas Shipholding Group, Inc. Downgrades: Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 LGD Assessments: Senior Unsecured Regular Bond/Debenture, Changed to 70 - LGD5, from 71 - LGD5 Ratings Rationale The downgrade of the Speculative Grade Liquidity rating reflects tightening liquidity at OSG, primarily because of the upcoming step-down on February 8, 2013 of its unsecured revolving credit facility to $900 million from $1.5 billion. Current drawings on the revolver surpass $1.05 billion since OSG drew $150 million subsequent to December 31, 2011. Moody's believes that sustained increases in average spot tanker freight rates are not likely in 2012 because of another year of fleet growth that outweighs ton- mile demand growth. An operating loss and negative free cash flow in 2012 and possibly 2013 are likely based on Moody's rate forecast. Moody's estimates that OSG will need to raise between $350 million and $400 million to fund the aggregate of operating losses and scheduled debt amortization through year-end 2013 and reduction of the outstanding balance of the revolver to restore an adequate liquidity profile, which Moody's sizes at about $150 million: $50 million of cash on hand plus $100 million of availability on the revolver. The SGL-4 rating represents a weak liquidity profile. OSG recently announced that it had withdrawn its application for U.S. Government guaranteed financing under Title XI of the U.S. Jones Act. The financing under this program, that contemplated raising about $400 million, was to be the avenue for OSG to reduce the outstanding balance of its revolving credit facility to below $900 million. Abandoning this potential source of financing now requires OSG to raise the needed capital from the bank market or from the sale of one or more vessels or investments in operating assets. The company will likely balance the potential of incurring higher interest costs of bank financing but retaining investments producing cash flows against lower interest costs and lower cash flows if one or more of the investments were sold rather than encumbering vessels while ship valuations are at multi-year lows. The lowered liquidity rating also considers the potential for OSG to need an amendment or waiver of one or more financial covenants as early as the December 31, 2012 measurement date based on Moody's forecast of freight rates. The ratings outlook remains negative because of the liquidity pressures and the weak market outlook. The negative outlook also considers the execution risk in, and uncertain timeframe for, monetizing shipping assets at a time of ongoing challenging fundamental conditions in the international shipping sectors. The Corporate Family rating remains at B3, for now, because of the seemingly good sources of alternate liquidity. The company has the ability to raise the amount of forecasted funds needed by pledging a number of ships for new financing and or selling at least one operating investment. The inability to close the liquidity gap in a timely manner could lead to a downgrade of all of the ratings assigned to OSG. The asset cushion should also provide the company negotiating room with the bank group in the event a waiver or amendment of financial covenants is needed. The terms of the forward start credit agreement require the removal of the add-back for treasury stock when calculating the leverage ratio (debt-to-total capitalization) effective with the December 31, 2012 measurement date. Under Moody's forecast assumptions, compliance could be tested on this covenant as early as at year end 2012 and possibly on the minimum net worth covenant sometime in 2013 if sustained higher spot tanker rates do not prevail. The B3 rating balances OSG's position as a market leader in the majority of its trades and the alternate liquidity sources it has in hand against the increased liquidity pressure that accompanies the abandonment of the application for Title XI financing, anticipation of ongoing weak sector fundamentals for 2012 and possibly 2013 and very weak credit metrics. The B3 rating also considers the contributions of the company's Jones Act fleet, which have helped to prevent a difficult situation from being even worse and should continue to do so going forward. Trading the majority of the international tankers in pools helps OSG's vessels earn relatively higher freight rates throughout the shipping cycle because pool trading typically increases vessel utilization. Demands on liquidity could be even greater without this trading strategy. The outlook could be changed to stable once OSG strengthens its liquidity after the stepped-down revolver becomes effective and if improved operating results and vessel values reduce the prospect of non-compliance with financial covenants of its mortgage financings or of the revolving credit agreement. Sustained improvements in credit metrics, such as Debt to EBITDA of less than 6.5 times, Funds from Operations + Interest to Interest of at least 3.0 times and positive free cash flow generation that is applied to debt reduction could lead to a one notch upgrade of the Corporate Family rating to B2. However, Moody's does not anticipate OSG achieving these metrics levels before 2014 at the earliest. The inability to reduce the drawn amount of the revolver to below $880 million by February 8, 2013, to exercise the facility's accordion feature to create availability if the drawn amount remains above $890 million net of issued letters of credit or to otherwise reduce the outstanding balance of the revolver by the end of August 2012 could lead to a downgrade of the ratings. Stabilization of the outlook requires a return to an adequate liquidity profile. However, debt-funded fleet growth could derail any positive ratings momentum that might accompany sustained unexpectedly stronger freight rates that led to improved cash flow generation. The principal methodology used in rating [Company name] was the Global Shipping 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. Overseas Shipholding Group, Inc., headquartered in New York City, NY, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. PANTRY INC: S&P Affirms 'B+' Corp. Credit Rating; Outlook Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Sanford, N.C.-based The Pantry Inc. to stable from negative. "At the same time, we affirmed all ratings on the company, including the 'B+' corporate credit rating," S&P said. "The outlook revision reflects our view that the company should be able to maintain adequate cushion under its leverage covenant, of about 14% to 15%, due to modest debt reduction and somewhat stabilizing merchandising profits," said Standard & Poor's credit analyst Andy Sookram. "Nevertheless, we see credit metrics remaining at levels consistent with a 'highly leveraged' financial risk profile." "The stable outlook reflects our expectation of modest debt reduction and about 14% to 15% cushion under its financial covenants. We forecast somewhat stable performance in its merchandising segment and a modest contraction in fuel margins, to about 12.5 cents. These factors will result in debt leverage close to 6x, funds from operations to debt of about 13%, and interest coverage of slightly under 2.5x," S&P said. "We could lower the ratings if weaker-than-anticipated market conditions lead to a decline in fuel margins to 10 cents per gallon and merchandise same-store sales decrease to negative levels. If these were to occur, we would expect the cushion under financial covenants to narrow to the mid-single-digit area and leverage to increase to over 6.5x. A lower rating could also occur if the company does not refinance its revolving credit facility on a timely basis, which would constrain liquidity," S&P said. "Given the company's high debt levels, an upgrade is not a near- term consideration. However, if it reduces debt above our expectations and improves leverage to about 4x on a sustained basis, we could raise the ratings," S&P said. Drivers of better credit metrics would include merchandise same- store sales of about 10%, gross margins improving by about 100 basis points, and fuel margins staying near 12 cents. POST STREET: Plan Confirmation Hearing Set for April 3, 4 and 5 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California will convene a hearing on April 3, 4, and 5, 2012, at 9:30 a.m., to consider the confirmation of Post Street, LLC, and 240 Partners, L.P.'s First Amended Plan of Reorganization. At the Feb. 7, status conference, the Court amended the order dated Dec. 1, 2011, scheduling the Stage II of the Confirmation Hearing. Pursuant to the Amended order, March 27, at 5:00 p.m. is set as the deadline for the Debtors and secured creditor Post Investors, LLC to file their trial briefs and expert declarations of direct testimony for the confirmation hearing. As Troubled Company Reporter on Nov. 15, 2011, the Plan is premised on an immediate infusion of cash, as new capital to the Debtors, provided by Stanley W. Gribble, which, together with the Debtors' Cash on hand, will be used by the Debtors, and will be in a sufficient amount, to fund the Brooks Brothers Work, establish a working capital reserve for the Debtors, and pay all Administrative Priority Claims and Priority Tax Claims. Completing the Brooks Brothers Work will satisfy key conditions precedent to the commencement of Brooks Brothers' obligation to open for business and pay rent under the Brooks Brothers Lease. The increased revenue and profitability from the Property, as stabilized by the implemented Brooks Brothers Lease, together with the Debtors' existing assets and the New Capital Contribution, will be sufficient to pay (1) all amounts due on the Effective Date, and (2) all amounts that will come due under the New Mortgage Note. Mr. Gribble is sufficiently confident in the Debtors' ability to pay these amounts that he is committing to contribute Cash to the Debtors to fund the New Capital Contribution as equity, which by definition will be junior to all present and future creditors, including the Mortgage Lender. Creditors holding general unsecured Claims will receive future cash distributions equal to 100% of their respective Allowed Class 4 Claims, which will be paid in four equal quarterly installments over the year after the Effective Date as set forth in the Plan. The holders of Post Street Interests and Post 240 Interests will receive no distribution on account of their existing interests in the Debtors under the Plan. New equity in the Reorganized Debtors will be issued to the holder of Post Street Interests and Festival Interests in exchange for the New Capital Contribution. The Debtors believe that through the Plan, the holders of Claims in impaired Classes will obtain a greater recovery than would be available if the Debtors' assets were liquidated on the Effective Date under chapter 7 of the Bankruptcy Code. The Secured Mortgage Lender Claim in Class 2, General Unsecured Claims in Class 4, Post Street Interests in Class 5, and Post 240 Interests in Class 6 are all impaired under the Plan. The holders of Allowed Claims in Classes 2 and 4 are entitled to vote to accept or reject the Plan. The holders of interests in Classes 5 and 6 will receive nothing under the Plan and are thus deemed to have rejected the Plan. Secured Tax Claims in Class 1 and Other Priority Claims in Class are not impaired under the Plan and the holders thereof are deemed to have accepted the Plan. A full-text copy of First Amended Disclosure Statement, dated Oct. 28, 2011, is available for free at: http://bankrupt.com/misc/poststreet.firstamendedDS.pdf About Post Street LLC Post Street LLC, based in San Francisco, California, filed for Chapter 11 bankruptcy (Bankr. Case No. 11-32255) on June 15, 2011. Judge Thomas E. Carlson presides over the case. Jeffrey C. Krause, Esq., Eric D. Goldberg, Esq., H. Alexander Fisch, Esq., and Michael S. Neumeister, Esq., at Stutman, Treister and Glatt, in Los Angeles, serves as the Debtor's bankruptcy counsel. Nossaman LLP serves as special litigation counsel. In its amended schedules, the Debtor disclosed assets of $280,815 plus unknown amount and liabilities of $56,092,852 as of the Chapter 11 filing. The petition was signed by Stanley W. Gribble, authorized agent. Affiliate Post 240 Partners, LP, aka Festival Retail Fund 1 228 Post Street, LP, filed for Chapter 11 bankruptcy (Bank. N.D. Calif. Case No. 11-33788) on Oct. 19, 2011. The Debtor estimated both assets and debts of $50 million to $100 million. Post Street, LLC, and Post 240 Partners, L.P., own 34.41% and 65.59% tenant in common interests, respectively, in a building located at 228-240 Post Street, Union Square, San Francisco. PUEBLO OF SANTA ANA: Fitch Affirms 'BB+' Rating on $21MM Bonds -------------------------------------------------------------- Fitch Ratings affirms the 'BB+' rating on approximately $21.5 million of Pueblo of Santa Ana's outstanding enterprise revenue bonds. Fitch also affirms Santa Ana's 'BB' Issuer Default Rating (IDR). The Rating Outlook is Stable. Ratings Supported Largely By the Strong Financial Profile: The 'BB' IDR reflects the strong financial flexibility of Santa Ana's enterprises, whose revenues secure the enterprise revenue bonds, and the stable market position Santa Ana's gaming enterprise has historically maintained in the competitive Albuquerque market. Santa Ana's enterprises consist of the 1,400 slot machine Santa Ana Star casino, a separate Hyatt-managed hotel and two golf courses (together 'Enterprises'), with the casino comprising 94% of the latest 12 month (LTM) through Dec. 31, 2011 Enterprises' EBITDA. Santa Ana's debt to LTM EBITDA was 1.1 times (x) at Dec. 31 and EBITDA coverage of interest and principal was almost at 4x. Debt metrics should continue to improve as Santa Ana's debt amortizes quickly and future significant borrowings are unlikely in the near term. The Pueblo's Santa Ana Star casino continues to garner around 15% market share in the Albuquerque market based on state reported net slot win through the end of calendar year 2011. Future Rating Movement Limited: The ratings downside is limited in the near term, reflecting Sana Ana's considerable financial cushion. The ratings' upside is also limited in the near-to-medium term given the Santa Ana Star's marginal operational diversification and the competitive nature of the Albuquerque market, with four other Pueblos operating casinos in the area. Mitigating these concerns somewhat is Santa Ana Star's attractive location in close proximity to the local population of Rio Rancho. Stable Operations: Santa Ana's revenues largely track the market, stabilizing in 2010 and growing about 1% in calendar 2011. EBITDA was down 1% in calendar 2011, which reflects a 2% uptick in operating expenses. Fitch expects low single digit growth in revenue to continue with the management's plans to reinvest in the property offsetting Fitch's concerns related to the Albuquerque's difficult competitive environment. Liquidity Remains Strong: Cash at the enterprise level remains well in excess of the amount needed for casino cage cash purposes, and the Enterprises generated positive free cash flow in 2011 (cash from operations less capital expenditures and transfers to the tribal government). In contrast, many Native American gaming credits exhibit free cash flow close to zero after transfers to tribal government. The Pueblo does not distribute per cap payments to its members, enabling for additional flexibility with respect to governmental budgeting and enterprise transfers to the tribe. There are no bullet maturities within Santa Ana's capital structure and near-term capital expenditure plans should be covered through cash flow. Longer-term Santa Ana may pursue a larger scale project; however, Santa Ana's strong financial profile can support a moderate amount of additional debt that may accompany the project without pressuring the 'BB' IDR. Revenue Bonds: The revenue bonds benefit from a senior security interest in the Enterprises' net revenues and certain tax revenue of the tribe. The pledged revenues are subject to a trustee directed flow of funds if debt service coverage by EBITDA and pledged taxes is less than 2x. The one notch differential on the revenue bonds (rated 'BB+') from the IDR takes into account the Pueblo's limited ability to incur additional pari passu debt, which is limited by the bonds' covenants to $10 million ($20 million when including separate carveouts for FF&E debt and "short-term debt"). Fitch affirms Pueblo of Santa Ana ratings as follows: -- IDR at 'BB'; -- Enterprise revenue bonds at 'BB+'. SALT VERDE: Moody's Cuts Rating on Sub. Gas Revenue Bonds to 'B2' ----------------------------------------------------------------- Moody's Investors Service has downgraded the rating of Salt Verde Financial Corporation Subordinate Gas Revenue Bonds, Series 2007 to B2 from Ba3 (under review for downgrade). The downgrade results from the presence of a guaranteed investment agreement (GIC) provided by MBIA Inc. (B2) that is also insured by MBIA Insurance Corporation (B3 on review for downgrade). The rating of the Senior Gas Revenue Bond, Series 2007 is currently A3 on review for downgrade and is not affected by the action on the subordinate bonds. Principal Methodology Used The principal methodologies used in assigning the rating were; (i) Methodology Update: Ratings that Rely on Guaranteed Investment Contracts and (ii) Gas Prepayment Bond Methodology both of which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered in the process of rating this issue can also be found in the Credit Policy & Methodologies directory. SANDUSKY BAY: Court Says Injunction Bid Procedurally Improper ------------------------------------------------------------- Bankruptcy Judge Mary Ann Whipple denied, without prejudice, the request of Sandusky Bay Construction Company for an order (i) enjoining Colonial Pacific Leasing Corporation/G.E. Commercial Finance and "all other persons or entities acting in concert with them, and any other creditors of the Debtor" from pursuing remedies based upon any guaranty or similar assurance of performance against JLZ Construction Services, LLC, VOK and Mason P. Olgesby III, all of whom the Debtor characterizes as its affiliates, or (ii) extending the automatic stay pursuant to 11 U.S.C. Sec. 362 to any action of the Debtor's creditors based upon any guaranty. The Court said the Debtor's Motion is fatally procedurally improper. A request for injunctive relief must be brought by adversary proceeding. A copy of the Court's March 15, 2012 Order is available at http://is.gd/CgMnTdfrom Leagle.com. Sandusky Bay Construction Company filed for Chapter 11 bankruptcy (Bankr. N.D. Ohio Case No. 11-30303) in January 2011, listing under $1 million in assets and debts. SOUTHEASTERN MATERIALS: Injunction Bid v. Dennis-Lambert Denied --------------------------------------------------------------- Bankruptcy Judge Thomas W. Waldrep, Jr., denied the Motion for Preliminary Injunction W. Joseph Burns, Trustee of South Eastern Materials, Inc. Southeastern Materials had significant dealings with the Dennis- Lambert Investments Limited Partnership, which was formed on Oct. 18, 2000, by Tony Dennis, Betty Lambert, Kay Dennis, and Charlie Lambert for the purpose of acquiring and holding real estate investments. From DLI's formation until the date of the Debtor's petition, the Debtor served as the general partner of DLI and owned a 2% interest. Mr. Dennis, Ms. Lambert, and unspecified members of their respective families own the remaining 98% as limited partners. The Trustee brought an adversary proceeding against DLI on May 19, 2011, alleging fraudulent conveyances under Sections 548 and 544(b) and N.C. Gen. Stat. Sec. 39.23.4, and unjust enrichment. The Complaint seeks monetary damages of at least $1,500,000 and a constructive trust on DLI's assets. Since 2008, DLI has conveyed 15 properties in a continuing liquidation effort. The Trustee claims that a preliminary injunction is necessary to preserve its ability to collect any judgment it might obtain. The Trustee seeks to bar DLI from transferring or encumbering any of DLI's assets without approval by the Bankruptcy Court overseeing Southeastern Materials' case. DLI argues that the preliminary injunction sought is inappropriate because the Trustee has a remedy at law, namely attachment under N.C. Gen. Stat. Sections 1-144, made applicable by Federal Rule of Civil Procedure 64. Alternatively, DLI argues that the Trustee has not established any of the factors necessary for a preliminary injunction. The case is W. JOSEPH BURNS, TRUSTEE, Plaintiff, v. DENNIS-LAMBERT INVESTMENTS LIMITED PARTNERSHIP, Defendant, Adv. Proc. No. 11-6035 (Bankr. M.D. N.C.). A copy of the Court's March 15, 2012 Memorandum Opinion is available at http://is.gd/1RipPefrom Leagle.com. Southeastern Materials, Inc., manufactured wooden roof trusses, shingles, and other roofing materials. It sought Chapter 11 protection (Bankr. M.D.N.C. Case No. 09-52606) on December 30, 2009. A copy of the Debtor's Chapter 11 petition is available at http://bankrupt.com/misc/ncmb09-52606.pdfat no charge. On June 2, 2010, the Court appointed W. Joseph Burns as Chapter 11 trustee. On July 30, 2010, the case was converted to Chapter 7, and W. Joseph Burns was appointed as the Chapter 7 trustee. TBS INTERNATIONAL: Combined Hearing on Plan Resumes March 28 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York will resume on March 28, 2012, at 10:00 a.m., (prevailing U.S. Eastern time) the combined hearing to consider adequacy of the Disclosure Statement, and the confirmation of TBS International plc, et al.'s proposed Prepackaged Chapter 11 Plan. As reported in the Troubled Company Reporter on Feb. 8, 2012, the Plan implements, in effect, a silo approach with respect to the Debtors' post-Effective Date secured obligations. Under the Plan: (1) Amounts owed pursuant to the Existing BOA Credit Agreement and the Existing DVB Credit Agreement will be restructured into a new term loan with two tranches -- the "New Senior Secured Cash Pay Loan Tranche," which is a second lien term loan in the amount of $30 million with a maturity date of September 30, 2016; and the "New Senior Secured PIK Loan Tranche," which is a second lien payment-in-kind/toggle term loan in the amount of approximately $121,000,000 (which includes accrued interest and other costs) that has a maturity date of June 30, 2017; in addition, BOA Syndicate Lenders and DVB Syndicate Lenders will receive all of the New Class A Common Stock, which will represent 90% of the equity interests in New TBS Parent; (2) Amounts owed pursuant to the Existing Credit Suisse Credit Agreement will be restructured into the "Amended and Restated Credit Suisse Credit Agreement," which is a term loan in the amount of approximately $18.2 million (plus interest and costs) with an interest rate of LIBOR plus 300 basis points and a maturity date of June 30, 2017, pursuant to which Credit Suisse will receive the net cash flows and net sale proceeds generated by the vessels that secure the Existing Credit Suisse Credit Agreement in satisfaction of the amounts owed under the Amended and Restated Credit Suisse Credit Agreement; and (3) Amounts owed pursuant to the Existing AIG Credit Agreement will be restructured into the "Amended and Restated AIG Credit Agreement," which is a term loan in the amount of approximately $4.9 million that will mature at least 180 days after the Effective Date, pursuant to which AIG will receive the net cash flows and the net sale proceeds generated by the vessels that secure the Existing AIG Credit Agreement in satisfaction of the amounts owed under the Amended and Restated AIG Credit Agreement; and (4) The Debtors will assume the RBS Settlement Agreement during the Chapter 11 Cases and fully perform any remaining obligations in connection therewith. The Court also directed the U.S. Trustee not to appoint any statutory committee in the cases prior to March 17, provided, however, that the U.S. Trustee may solicit unsecured creditors prior to such date to gauge their interest in serving on a committee. 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. VERSO PAPER: S&P Rates $200-Mil. ABL and Credit Facilities 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating (two notches higher than the corporate credit rating) to Verso Paper Holdings LLC's new $150 million asset-based revolving loan facility (ABL) and $50 million revolving credit facility. "We assigned a '1' recovery rating to the facilities, indicating our expectation for very high (90% to 100%) recovery of principal in the event of payment default," S&P said. The new credit facilities will replace the company's existing $200 million revolving credit facility which matures on August 1, 2012. "The 'B' corporate credit rating on Verso Paper reflects our view of the company's 'highly leveraged' financial risk and 'weak' business risk. Our ratings incorporate the company's limited product diversity, substitution risks due to changing customer preferences for greater electronic content, and vulnerability to fluctuations in input costs and selling prices. In addition, despite our expectation that credit measures will remain somewhat weak over the next year, we expect liquidity to remain adequate, attributable to its cash position, new credit facilities, and manageable near-term debt maturity profile following the company's plans to use proceeds from the issuance of $345 million of notes due 2019 to extend $315 million of its 2014 maturities," S&P said. Verso's core business is as a producer of coated freesheet and coated groundwood papers serving customers in the catalog, magazine, inserts, and commercial-print markets. Ratings List Verso Paper Holdings LLC Corporate credit rating B/Stable/-- New Rating $150 mil asset-based revolving loan facility BB- Recovery rating 1 $50 mil revolving credit facility BB- Recovery rating 1 WASHINGTON MUTUAL: Completes Chapter 11 Restructuring Process ------------------------------------------------------------- Washington Mutual, Inc. disclosed that its Seventh Amended Joint Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code (as modified, and as confirmed by order, dated Feb. 23, 2012, the "Plan"), became effective, marking the successful completion of the chapter 11 restructuring process. In connection with the Plan becoming effective, the Company will commence the distribution of funds of approximately $7 billion to parties-in-interest on account of their allowed claims and the distribution of substantially all of the stock in the reorganized company to equity holders. The Company's common stock, traded over the counter under the ticker symbol WAMUQ, has been cancelled. As a result of the Plan becoming effective, WMI has emerged as a newly reorganized company, WMI Holdings Corp., which will consist primarily of WM Mortgage Reinsurance Company, Inc., a wholly owned subsidiary of WMI that is incorporated in Hawaii, and which will be funded by a $75 million contribution from certain WMI creditors. In addition, the Company will have access to a $125 million senior credit facility to be used for working capital and permitted acquisitions and originations in the financial services sector. Initially, the primary business of WMI Holdings will be a legacy reinsurance business that is currently operated in runoff mode by WMMRC. "The outcome of this process is a significant achievement for the equity holders of WMI, who will have the opportunity to benefit from an ownership interest in the reorganized company," said Michael Willingham, Chairman of the Official Committee of Equity Security Holders for WMI and a member of the Board of Directors of WMI Holdings. "The new Board of Directors will form a Corporate Strategy and Development Committee to begin exploring opportunities available to the Company to enhance the value of the reorganized Company's assets for the benefit of the company's new shareholders." As previously announced, Michael Willingham, Diane Glossman, Mark Holliday, Gene Davis, Timothy Graham, Steve Scheiwe, and Michael Renoff will comprise the Board of Directors of WMI Holdings. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York, and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. Records filed Jan. 24, 2012, say that Washington Mutual Inc., former owner of the biggest U.S. bank to fail, has spent $232.8 million on bankruptcy professionals since filing its Chapter 11 case in September 2008. WEIRTON MEDICAL: Moody's Cuts Bond Rating to 'B3;' Outlook Neg. --------------------------------------------------------------- Moody's Investors Service has downgraded to B3 from Ba3 the long- term bond rating assigned to Weirton Medical Center's (WMC) $20.3 million of outstanding bonds issued by the Weirton Municipal Hosp Bldg Commission, WV. The Series 2001B variable rate demand bonds are jointly supported by Weirton Medical Center and secured by a letter of credit from PNC Bank. The enhanced rating on the Series 2001B bonds is Aa3/VMIG1. The outlook is negative. Summary Rating Rationale The rating downgrade to B3 from Ba3 is attributed to a very large operating loss and cash flow deficit through seven months of fiscal year (FY) 2012 driven by methodology change in its accounting for contractual reserves, revenue cycle impairment and continued outpatient volume declines. The negative outlook reflects expected continuation of operating losses, and the uncertainty of the ability of WMC to quickly turn around operations and sustain improved performance over the longer term given a challenging payer mix, competitive environment and weak service area demographics. Furthermore, WMC maintains very thin headroom under covenants under its letter of credit agreement. Discussions are underway with the banks to request a waiver for violation of the debt service coverage ratio. Challenges * First seven months of fiscal year (FY) 2012 show significant deterioration of operations with an operating loss of $10.5 million (-22.5% operating margin) following a loss of $2.5 million (-2.6% operating margin) in FY 2011. WMC posted the largest to- date, operating cash flow deficit of $7.9 million (-17.0% operating cash flow margin) through seven months FY2012 following a modest $1.5 million (1.6% operating cash flow margin) operating cash flow generation in FY 2011 * Significant revenue contraction by 14% or $7.9 million through seven months of FY 2012. According to management, the decline was attributed to the increase in contractual reserves from a methodology change and adjustment to prior year reserve levels based on expected cash collections, decline in outpatient imaging volume to a physician owned long-term acute care hospital, and an impaired revenue cycle function related to payment authorization and collection procedures. Management has outlined a turnaround plan that addresses each of these issues * Turnover in key management positions, including three CFOs during the past two years; management also terminated engagement with Quorum Health Resources prior to completion of 2-year contract * Aging operating service area with negative population growth in Weirton from 2000 through 2010, below state and national average property values and median income levels STRENGTHS * As of January 31, 2012, unrestricted cash and investments increased slightly to $38.7 million due to the increased draw on a line of credit, resulting in favorable 147 days, 167% cash-to-debt and 97% cash-to-comprehensive debt from $36.3 million unrestricted at FYE 2011. Adjusted to excluded the draws on line of credit which is secured by a first lien security interest in the hospital's funded depreciation account, days cash would decline to 72, cash-to-debt would be 139%, and cash-to-comprehensive debt would be 90.8%. As of January 31, 2012, WMC had total draws on line of credit of $6.3 million of the available $7.0 million line * Debt service reserve fund of approximately $1.6 million remain untouched through February 2012 * Sole inpatient provider serving Hancock and Brooke Counties in West Virginia with market position protected by CON laws in the state Outlook The negative outlook reflects continued operating losses, very thin headroom under financial covenants and the uncertainty and challenge of continuing to improve and sustain improved operating performance over the longer term given a challenging payor mix, competitive pressures, and weak service area demographics. WHAT COULD MAKE THE RATING GO - UP Successful implementation of turnaround plans resulting in notable improvement in operating performance and ability to sustain improved levels for multiple years, material growth in cash outside of line of credit borrowing; material improvement in liquidity and debt service coverage ratios WHAT COULD MAKE THE RATING GO - DOWN Continued declines in operating performance, weaker debt service coverage measures; decline in unrestricted cash, significant unexpected debt issuance including bank lines or other forms of borrowings without commensurate increase in cash and cash flow generation The principal methodology used in this rating was Not-for-Profit Hospitals and Health Systems published in February 2008. WILCOX EMBARCADERO: Amends Application to Employ Gabrielson ----------------------------------------------------------- Wilcox Embarcadero Associates, LLC, filed with the U.S. Bankruptcy Court for the Northern District of California an amended application to employ Gabrielson & Company in response to the U.S. Trustee's objection filed on Feb. 17, 2012. The Debtor attached to its application an amended declaration of Michael R. Gabrielson in support of application to employ Gabrielson & Company as accountant. Coincident to the filing of the application, proposed counsel for the Debtor will serve a copy of the proposed order on the U.S. Trustee. Gabrielson will: a. assist the Debtor in the preparation of required financial reports to the Court and parties-in-interest, including monthly operating reports; and b. consult and advise with respect to any other tax and accounting matter the Debtor believes are relevant to the administration of the bankruptcy estate. Michael R. Gabrielson has agreed to undertake the matter at his standard hourly rate of $325. Mr. Gabrielson assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code . About Wilcox Embarcadero Associates Wilcox Embarcadero Associates, LLC, filed a Chapter 11 petition in Oakland (Bankr. N.D. Calif. Case No. 12-40758) on Jan. 26, 2012. Wilcox operates a commercial building, leasing warehouse, wholesale, retail and office space. Wilcox operates in the Bay Area and has been in business for 10 years. The Debtor says it is a single asset real estate case. Steele, George, Schofield & Ramos LLP represents the Debtor in its restructuring efforts. In its schedules, The Debtor disclosed $10.2 million in assets and under $8.6 million in liabilities. The Debtor's property secures an $8.55 million debt to Wells Fargo and Owens Mortgage Investment Fund, LP. The Debtor said it incurred financial difficulty when its primary lender, the holder of the First Deed of Trust, refused to extend, modify or refinance the loan. The Debtor is in negotiations with a new lender to take out the lender, but needs more time to accomplish this task. Judge Roger L. Efremsky presides over the case. WILLBROS GROUP: S&P Keeps 'B-' Corp. Credit Rating on Watch Neg --------------------------------------------------------------- Standard & Poor's Ratings Services is keeping all of its ratings on Willbros Group Inc., including the 'B-' corporate credit rating, on CreditWatch with negative implications. The ratings were placed on CreditWatch on March 2, 2012. "On March 15, 2012, the company announced that it was delaying filing its 10-K for the fiscal year ended Dec. 31, 2011. The company has determined that a material weakness existed in its controls of its accounting for income taxes, including its tax provision and related tax assets and liabilities. However, the company expects it will be able to file by the extension end date of March 30, 2012," S&P said. "We could lower the corporate credit rating if the company doesn't file its 10-K in the next 11 days," Standard & Poor's credit analyst Robyn Shapiro said. "Additionally, the CreditWatch reflects our belief that the company is at risk of violating its maximum total leverage ratio covenant under its bank credit agreement if it does not meaningfully improve EBITDA or sell assets," she added. The rating also reflects concerns regarding the company's weak credit protection measures and pending litigation involving discontinued Nigerian operations. WINDOW FACTORY: Section 341(a) Meeting Continued Until April 3 -------------------------------------------------------------- Tiffany Carroll, Assistant U.S. Trustee for Region 15 has continued until April 3, 2012, at 11:00 a.m., the meeting of creditors in the Chapter 11 case of Window Factory, Inc. The meeting will be held at 402 W. Broadway, Emerald Plaza Building, Suite 660 (B), Hearing Room B, San Diego, California. A creditors meeting was convened on Feb. 16. On Dec. 8, 2011, American Integrity Corp., Ajit Ahooja, and Herde Computer Services signed involuntary Chapter 11 petitions for The Window Factory, Inc., (Bankr. S.D. Calif. Case No. 11-19842). Judge Laura S. Taylor presides over the case. Jeffrey D. Schreiber, Esq., at The Schreiber Law Firm, serves as counsel to the petitioning creditors, which allege $407,000 in total claims. WINCHESTER'S HIGHLAND: Files for Chapter 11 in New Haven -------------------------------------------------------- Oxford, Connecticut-based Winchester's Highland Ridge Estates L.L.C. filed a bare-bones Chapter 11 petition (Bankr. D. Conn. Case No. 12-30612) in New Haven on March 16, 2012. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101 (51B), disclosed $14.8 million in assets and liabilities of $9.07 million. The Highlands Ridge Estates and St. Anne's Country Club., a residential land development and golf course, is valued at $14.8 million and serves as collateral to a $6.7 million first lien debt to TISSA Funding Corp. A copy of the schedules attached to the petition is available at http://bankrupt.com/misc/ctb12-30612.pdf The Debtor is represented by Kenneth E. Lenz, Esq., at The Lenz Law Firm, in Orange. WINCHESTER'S HIGHLAND: Case Summary & Creditors List ---------------------------------------------------- Debtor: Winchester's Highland Ridge Estates L.L.C. 23 Oxford Road Oxford, CT 06478 Bankruptcy Case No.: 12-30612 Chapter 11 Petition Date: March 16, 2012 Court: U.S. Bankruptcy Court District of Connecticut (New Haven) Judge: Lorraine Murphy Weil Debtor's Counsel: Kenneth E. Lenz, Esq. THE LENZ LAW FIRM P.O. Box 965 236 Boston Post Road 2nd Floor Orange, CT 06477 Tel: (203) 891-9800 Fax: (203) 799-0681 E-mail: bkyecf@lenzlawfirm.com Scheduled Assets: $14,800,000 Scheduled Liabilities: $9,079,668 The petition was signed by Aurora Rosa, managing member. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Winchester Estates, L.L.C. 12-30611 03/16/12 Winchester's Highland's List of Its Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Aurora Rosa Money Lent $2,000,000 27 Belinsky Circle Oxford, CT 06478 TD Bank, N.A. Loan $175,000 32 Chestnut Street Lewiston, ME 04240 WP EVENFLO: Moody's Upgrades CFR to 'Caa1'; Outlook Positive ------------------------------------------------------------ Moody's Investors Service upgraded WP Evenflo Holdings, Inc.'s corporate family rating to Caa1 from Caa2, the probability of default rating to Caa1 from Caa2, and the rating on the senior secured bank debt to B3 from Caa1. The ratings outlook was revised to positive from negative. Ratings upgraded: Corporate family rating to Caa1 from Caa2 Probability of default rating to Caa1 from Caa2 $40 million senior secured revolving credit facility due 2013 to B3 (LGD3, 39%) from Caa1 (LGD3, 43%) $17.5 million first lien term loan due 2013 to B3 (LGD3, 39%) from Caa1 (LGD3, 43%) Ratings Rationale The ratings upgrade was prompted by Evenflo's January 2012 sale of its feeding business, excluding Ameda breast pumps, to Kimberly- Clark Mexico, S.A.B de C.V. ("KMC") and the subsequent use of proceeds to pay down debt. The ratings upgrade reflects material debt reduction as the total debt balance was reduced by over $100 million. In Moody's opinion, the transaction also improves Evenflo's pro forma credit metrics. The ratings upgrade also captures Moody's view that the company's liquidity profile has improved, owing to increased availability under the revolving credit facility and enhanced covenant cushion as per an amendment to the credit agreement that was completed as part of the asset sale. However, there is refinancing risk since the revolving credit facility and remaining term loan balance still mature on February 7, 2013. The rating also considers that while the remaining business is only somewhat smaller from a revenue perspective, its margins are narrower than the pre-sale business. In addition to refinancing risk, Evenflo's Caa1 corporate family rating captures substantial customer concentration, the mature nature of the juvenile/infant product category, competition from well capitalized companies, product recall risk, and general product liability risk. Moody's estimates pro forma leverage of 5.0 times for 2011 (incorporates Moody's standard adjustments, partial debt treatment for the preferred stock, and estimates of the post-sale EBITDA and balance sheet), which is generally good for the ratings category. Leverage falls to approximately 3.0 times when excluding the preferred stock adjustment. The rating also derives support from Evenflo's established position as a seller of infant and juvenile products, strong brand recognition, and long-standing relationships with key retail customers. The positive outlook reflects Moody's view that after the feeding business sale, Evenflo is in a better position to refinance its debt maturities given substantial debt reduction and its improved short-term liquidity. The ratings could be downgraded if Evenflo's revenue and profitability deteriorate, its liquidity position weakens, or it appears unlikely that it will be able to refinance its debt maturities. Moody's could upgrade the ratings if Evenflo timely refinances its debt maturities. The principal methodology used in rating Evenflo was the 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. Headquartered in Miamisburg, Ohio, WP Evenflo is a leading provider of infant and juvenile products including car seats (convertible, booster, and infant), on-the-go products (strollers, travel systems, and portable playards), breast pumps, and playtime products (carriers, stationary activity centers, and safety gates). ZAYO GROUP: Moody's Reviews 'B2' Corp Family Rating for Downgrade ----------------------------------------------------------------- Moody's Investors Service has placed the ratings of Zayo Group LLC on review for downgrade following the company's announcement of a definitive agreement to acquire AboveNet, a provider of high bandwidth connectivity, for approximately $2.2 billion. The company's ratings were placed on review for downgrade based upon Moody's expectation that the transaction will likely be largely debt-financed, which will stress Zayo's credit metrics and cash flow profile. The transaction is expected to close in three months and Moody's anticipates concluding the review within that timeframe. Ratings Rationale Zayo's B2 corporate family rating reflects the company's strong growth profile, its stable base of contracted recurring revenues and its valuable fiber optic network assets. The acquisition of AboveNet will more than double Zayo's revenues and allow the company to compete more effectively in the enterprise segment given AboveNet's product offerings, sales force and network infrastructure. The post-merger combined company will have greater scale, broader reach and wider capabilities. However, Moody's estimates that leverage will increase by approximately 1.5x (Debt/EBITDA, Moody's adjusted) and the company's transition to positive free cash flow could be delayed beyond the rating horizon. Moody's review will focus on the timeframe required for Zayo to transition to positive free cash flow, the company's ability to reduce leverage and the company's liquidity profile following the transaction close. This deal increases the company's execution risk, which was already elevated following Zayo's $345 million acquisition of 360networks in November of 2011. Moody's could lower Zayo's ratings if liquidity becomes strained or if the company is not able to demonstrate a near-term path to positive free cash flow. Additionally, the ratings could be lowered if the post-close capital structure results in leverage exceeding 5x (including Moody's standard adjustments) for an extended time period. The ratings could be confirmed if Zayo demonstrates a credible path that would result in leverage below 5x and a transition to sustainable positive cash flow within 18-24 months. The principal methodology used in rating Zayo Group LLC was the Global Communications Infrastructure 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 or the Government- Related Issuers methodology published in July 2010. Headquartered in Louisville, Colorado, Zayo Group is a provider of Bandwidth Infrastructure and network-neutral interconnection services, predominantly in the Northeastern US with a smaller presence in the Southeast, Midwest and Northwest regions. The company operates through its three primary operating units - Zayo Bandwidth, zColo and Zayo Fiber Solutions. In October 2011, the company announced that it was acquiring 360networks for $345 million. In March 2012, the company entered a definitive agreement to purchase AboveNet for $2.2 billion. Zayo generated about $319 million in revenues for the last twelve months ended December 31, 2011. * Moody's Says Liquidity Stress-Index Holds Steady -------------------------------------------------- Moody's Liquidity-Stress Index (LSI) held steady at 4.1% in mid- March from its February level. It remains at a historically low level, says Moody's Investors Service in its latest SGL Monitor. "The Liquidity -- Stress Index for the US and Canada remains within the tight range it has held for the past year, and is just slightly higher than the 3.9% record-low posted in June to August 2011," said John Puchalla, a Moody's Vice President -- Senior Credit Officer. "The index, which increases when speculative-grade liquidity appears to decrease, continues to signal that liquidity levels are healthy for high-yield companies and the default rate should remain low." "Corporates seem to be managing current liquidity pressures," added Puchalla, "And investor thirst for yield, which is powering the recent high-yield bond issuance boom, seems to indicate that the LSI will remain low." Moody's proprietary Liquidity-Stress Index falls when corporate liquidity appears to improve and rises when it appears to weaken. Moody's notes that the US speculative-grade default rate is more highly correlated with the LSI than with its Speculative-Grade Liquidity (SGL) rating downgrade rate. Thus, even though monthly SGL downgrades have continued to outnumber upgrades since mid- 2011, the dip in the LSI from a recent peak of 4.5% in December 2011 is consistent with Moody's projection that the US speculative-grade default rate will start to decline in November 2012. An SGL rating is an assessment of a speculative-grade company's intrinsic liquidity position over the coming 12-15 months. Moody's Covenant-Stress Index (MCSI) declined slightly in February to 2.7% - from 2.9% in January - with the low reading reflecting increased covenant headroom for corporates. The Index remains up from the recent low of 1.8% recorded in July and August 2011 but well off the high of 17.3% posted in March 2009. The index measures the extent to which speculative-grade companies are likely to default or have already defaulted on covenants, and rises when covenant cushion appears to decrease. * Moody's Says Las Vegas Strip Gaming Recovery Gaining Traction --------------------------------------------------------------- The recovery of the Las Vegas Strip is gaining traction as visitor numbers increase, with hotels reaping the most benefit, says a new report by Moody's Investors Service. Nearly 40 million people visited Las Vegas in 2011, close to the 2007 peak. "After suffering through a deep trough during the recession when visitor volume declined as new capacity came online, the Las Vegas recovery is underway," said Peggy Holloway, a Moody's Vice President -- Senior Credit Officer. "Hotels are benefiting from increased visitor numbers that permit higher room rates, while gaming revenues are recovering, albeit more slowly." The report notes several improving trends in 2011 including a 4.3% rise in visitor volume from 2010, a 3.5% increase in slot revenue and a 3.4% increase -- the first since 2007 -- in hotel occupancy. The improvements are supported by low growth in hotel room supply which gives operators more pricing power, says Moody's. Still, rising gas prices could endanger the recovery as money that consumers would spend at the casino could be deployed to fuel spending. With crude oil currently trading at its highest level since 2008 and high gasoline prices, consumers could pull back on discretionary spending and travel to Las Vegas, says the report. The pace of the recovery will determine the success of companies that rely on the Strip for a large portion of their revenues, says Moody's. The report highlights MGM Resorts International, Caesar's Entertainment, American Casino, Entertainment Properties and CityCenter. * 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/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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, Ivy B. Magdadaro, 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 ***