/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120507.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, May 7, 2012, Vol. 16, No. 126 Headlines 1555 WABASH: Exclusive Filing Period Extended to June 28 ACCO BRANDS: Moody's Upgrades Corp. Family Rating to 'Ba3' AFA INVESTMENT: Insurer Says Policies Can't Be Assigned in Sale AFA INVESTMENT: Schedules Filing Deadline Extended to May 24 ALL SMILES: Case Summary & 20 Largest Unsecured Creditors ALLIED IRISH: Cancels EUR3.9BB Capital Redemption Reserve Fund ARCH COAL: S&P Lowers Corp. Credit Rating to 'B+'; Outlook Stable ARCADIA RESOURCES: Foreclosed by Lender; To Wind Down Operations ASSOCIATED MATERIALS: Facility Amendment No Impact on Caa1 Rating AUGUST CAYMAN: S&P Assigns 'B' Corp Credit Rating; Outlook Stable AUTOMOTORIES GILDMEISTER: Stable Market Cues Fitch to Hold Ratings BASS LTD: Court Rules in Lease Dispute With City of New Iberia BLUE SPRINGS: Hires Polsinelli Shughart as Counsel BLUE SPRINGS: Hires Donlin Recano as Claims & Noticing Agent BLUE SPRINGS: Files Schedules of Assets and Liabilities BP CLOTHING: Amended Reorganization Plan Confirmed CAPITOL BANCORP: Incurs $8.9 Million Net Loss in First Quarter CAPITOL INFRASTRUCTURE: Auction Protocol Hearing Set for May 15 CERTENEJAS INC: Can Employ Luis Carrasquillo as Consultant CERTENEJAS INC: Can Hire Charles Cuprill as Attorney CERTENEJAS INC: Sec. 341(a) Creditors' Meeting Set for May 21 CGO ENTERPRISE: Marijuana Grower Files for Bankruptcy in Denver CHARMING SHOPPES: S&P Puts 'B-' CCR on Watch Pos on Proposed Sale CHEF SOLUTIONS: Joint Liquidation Plan Confirmed CHINA TEL GROUP: Amends 104.9MM Class A Shares Offering Prospectus CIRCUS AND ELDORADO: Has Until May 14 to Finalize Restructuring CIVIL BUILDING: Case Summary & Largest Unsecured Creditor CLARK SPECIALTY: Case Summary & 20 Largest Unsecured Creditors CLEAR CHANNEL: Bank Debt Trades at 18% Off in Secondary Market CNO FINC'L: Moody's Reviews 'B1' Sr. Sec. Ratings for Downgrade COGENT COMMUNICATIONS: Dividend No Impact on Moody's 'Caa1' CFR COLLECTIVE BRANDS: S&P Puts 'B' CCR on Watch Neg on Proposed Sale COLT DEFENSE: Moody's Puts 'Caa1' CFR Under Review for Downgrade COMMERCIAL MANAGEMENT: Case Summary & Creditors List COMMERCIAL VEHICLE: Reports $11.9 Million Net Income Q1 COMMUNITY HEALTH: Fitch Upgrades Issuer Default Rating to 'B+' CONGRESSIONAL HOTEL: Writ of Garnishments on Propertly Lifted CONTRACT RESEARCH: Court Extends Cash Collateral Use Until May 10 CONTRACT RESEARCH: Committee Taps Morris Anderson as Fin'l Advisor CONTRACT RESEARCH: Committee Proposes Pachulski as Counsel COSO GEOTHERMAL: Fitch Cuts Rating on $629-Mil. Certs. to 'CCC' COTT CORP: $35MM Share Repurchase No Impact on Moody's 'B2' CFR CPI CORP: In Talks With Lenders to Obtain Waiver CUMULUS MEDIA: Swaps Stations with Townsquare Media DEWEY & LEBOEUF: Warns Employees on Possible Closure DEX MEDIA EAST: Bank Debt Trades at 45% Off in Secondary Market DIAGNOSTIC IMAGING: S&P Withdraws 'CC' Corporate Credit Rating DINEEQUITY INC: Fitch Affirms Issuer Default Rating at 'B' DUNE ENERGY: Incurs $3.6 Million Net Loss in First Quarter EDGEN MURRAY: Brian Friedman Holds 58% of Class A Shares EL MONTE PUBLIC: Fitch Lowers Rating on $19-Mil. Bonds to 'BB+' ELEPHANT & CASTLE: Converted to Chapter 7 After Sale ENERGY CONVERSION: Sub-Committee Hiring Clark Hill as Counsel ESSAR STEEL: Moody's Reviews 'Caa1' CFR for Possible Downgrade FILENE'S BASEMENT: Court Moves Auction of IP Assets to June 5 FIRST DATA: Incurs $152.5 Million Net Loss in First Quarter FNX MINING: S&P Raises Corp. Credit Rating to 'BB-'; Off Watch Pos FREEDOM GROUP: S&P Rates New $330 Million Term Loan 'B+' GALLANT ACQUISITIONS: Conroe Golf Course Files for Chapter 11 GALLANT ACQUISITIONS: Voluntary Chapter 11 Case Summary GATEHOUSE MEDIA: Incurs $13.4 Million Net Loss in First Quarter GATEWAY CENTER: Files for Chapter 11 in Jacksonville GENERAL MARITIME: Wins Confirmation of Reorganization Plan GENON ENERGY: S&P Cuts Corp. Credit Rating to 'B-'; Outlook Stable GRACE INDUSTRIES: Court Permits Discovery in NYSDOT Dispute HAWKER BEECHCRAFT: Files for Chapter 11 in New York for Debt Swap HAWKER BEECHCRAFT: Case Summary & 50 Largest Unsecured Creditors HAWKER BEECHCRAFT: Bank Debt Trades at 33% Off in Secondary Market HAZLAHA, LLC: Case Summary & 3 Largest Unsecured Creditors HCA INC: S&P Rates $725MM Senior Secured Term Loan 'BB' JEFFERSON COUNTY, AL: State Senate Approves Revival of Jobs Tax KIM'S PROVISION: Case Summary & 7 Largest Unsecured Creditors KUNKEL REAL ESTATE: Case Summary & 14 Largest Unsecured Creditors LAKELAND DEVELOPMENT: Files for Chapter 11 in Los Angeles LEHMAN BROTHERS: Monday Properties to Manage 237 Park Ave. LEHMAN BROTHERS: Claims Totaling $6.4-Bil. Traded in March LEHMAN BROTHERS: New Docs Reveal Huge Pre-Bankruptcy Pay to Execs LEVEL 3: Lowers Net Loss to $138 Million Net Loss in Q1 LIBERTY MUTUAL: Fitch Retains Junior Sub. Notes Ratings at 'BB' LIGHTS & SIGNALS: Case Summary & 20 Largest Unsecured Creditors LIGHTSQUARED INC: Lenders Agree to Another One-Week Extension M/I HOMES: Moody's Rates $25MM Add-On Sr. Unsecured Notes 'Caa1' M/I HOMES: S&P Keeps B- CCR, Negative Outlook on $25MM Add-on Note MARIANA RETIREMENT FUND: Demands Names of Objecting Creditors MEDIA GENERAL: Files Form 10-Q; Incurs $34.3MM Net Loss in Q1 MERCED FALLS: Disclosure Statement Gets Court's Approval MF GLOBAL: SIPA Trustee to Distribute $685-Mil. to Customers MF GLOBAL: SIPA Trustee Wants to Litigate $700MM Claim in UK MF GLOBAL: SIPA Trustee May Sue Officers for Breach of Duty MF GLOBAL: Ch. 11 Trustee to Subpoena Ex-Officers, Lenders MGM RESORTS: Incurs $203.3 Million Net Loss in First Quarter MICKEY MANTLE'S: Facing Eviction by Month's End MP-TECH AMERICA: Can Hire Capell & Howard as Counsel in IICC Rift NADYA SULEMAN: May 7 Foreclosure Forces Octomom to Seek Ch. 7 NATIONAL CINEMEDIA: S&P Rates $105MM Ext. Revolver Facility 'BB-' NAUTICA LAKES: Lawsuit Against D.S.C. of Newark Stayed OSAGE EXPLORATION: Issues $10 Senior Secured Note to Apollo PEMCO WORLD: Sun Aviation Wants to Hire Cross & Simon as Counsel PENN HILLS: Voluntary Chapter 11 Case Summary PETTUS PROPERTIES: Court OKs Mitchell & Culp as Attorney PHOENIX HORIZONS: Case Summary & 3 Largest Unsecured Creditors PINNACLE AIRLINES: Pays More Interest to Modify CIT Loan Terms PMI GROUP: May 16 Hearing Set on Ernst & Young Engagement QUALTEQ INC: Chapter 11 Trustee Takes Over RGIS SERVICES: Moody's Cuts PDR to 'B3', Rates New Facility 'B2' RGIS HOLDINGS: S&P Raises Corporate Credit Rating to 'B+' RINE LAND: Case Summary & 13 Largest Unsecured Creditors RITE AID: Commences Cash Offer to Purchase $405MM Senior Notes RITE AID: To Offer Add'l $426 Million of 9.25% Senior Notes RITE AID: Fitch Junks Rating on $421 Million Sr. Unsecured Notes RITE AID: Moody's Upgrades Corp. Family Rating to 'Caa1' SAVTIRA CORP: CEO Explains Financial Issues in Letter to Creditors SCI REAL ESTATE: Plan Confirmation Hearing Set for June 13 SEARS HOLDINGS: Seven Directors Elected at Annual Meeting SECURITY BANK NA: Closed; Banesco USA Assumes All Deposits SEQUENOM INC: Incurs $24.4 Million Net Loss in First Quarter SOMERSET APARTMENTS: To Pay Claims From R.E. Sales Under Plan SOUTHERN DEVELOPMENT: Case Summary & 9 Largest Unsecured Creditors SPRINGLEAF FINANCE: Bank Debt Trades at 5% Off in Secondary Market SPRINT NEXTEL: Files Form 10-Q; Incurs $863MM Net Loss in Q1 SPYGLASS ESTATE: Case Summary & 16 Largest Unsecured Creditors SQUARE AT FALLING RUN: Placed in Chapter 7 Liquidation TENET HEALTHCARE: Fitch Raises Issuer Default Rating to 'B' TPF II: S&P Cuts Rating on $205MM Facilities to 'B-'; Outlook Neg TRAINOR GLASS: Files Schedules of Assets and Liabilities TRIBUNE CO: Bank Debt Trades at 31% Off in Secondary Market0 U.S. STEEL: Fitch Downgrades Issuer Default Rating to 'BB' ULTIMATE ACQUISITION: Suit Against Mitsubishi Digital Dismissed UNITED RENTALS: Moody's Affirms 'B2' Corp. Family Rating VERSO PAPER: Has Exchange Offer, Sub Debt at 69 Cents VERSO PAPER: S&P Lowers Corp. Credit Rating to 'CC'; Outlook Neg WIN-WIN INVESTMENT: Case Summary & 8 Largest Unsecured Creditors WINTDOTS DEVELOPMENT: Sec. 341 Creditors' Meeting Reset to May 18 WEST SPEEDWAY II: Not Bound to Supply Natural Gas to Lot Owners WSG CHARLOTTESVILLE: Case Summary & 11 Largest Unsecured Creditors YRC WORLDWIDE: Incurs $85.5 Million Net Loss in First Quarter * April 2012 Chapter 11 Bankruptcy Filings Down 17% * Florida Bank's Failure Bring Year's Tally to 23 * BOND PRICING -- For Week From April 30 to May 4, 2012 ********* 1555 WABASH: Exclusive Filing Period Extended to June 28 -------------------------------------------------------- The Hon. Carol A. Doyle extended the periods under which 1555 Wabash LLC has the exclusive right to file a plan to June 28, 2012, and the right to solicit acceptances thereto to Aug. 28, 2012. 1555 Wabash LLC owns and operates a 14-story mixed use building located at 1555 South Wabash, in Chicago, Illinois. The property is comprised of 176 residential units plus 11,000 square feet of commercial space located on the first floor of the building. The property was originally developed as condominium units to be sold at designated sale prices to qualified buyers. Construction was generally completed as of the middle of 2009. Only 36 of the 100 sale contracts closed. As of the Petition Date, 1555 Wabash leased 115 of the remaining 140 residential apartment units -- roughly 82% -- to qualified tenants, while the commercial space is presently vacant. 1555 Wabash LLC filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 11-51502) on Dec. 27, 2011, to halt foreclosure of the property. Judge Jacqueline P. Cox oversees the case. David K. Welch, Esq., at Crane Heyman Simon Welch & Clar, serves as the Debtor's counsel. The Debtor scheduled $90,055 in personal property and said the current value if its condo building is unknown. The Debtor also listed $51.6 million in liabilities. The petition was signed by Theodore Mazola, president of New West Realty Development Corp, sole member and manager of the Debtor. ACCO BRANDS: Moody's Upgrades Corp. Family Rating to 'Ba3' ---------------------------------------------------------- Moody's Investors Service upgraded ACCO Brands Corporation's Corporate Family Rating and Probability of Default Rating to Ba3 from B2 following the closing of the merger with MeadWestvaco ("Mead C&OP"). Moody's also affirmed the Ba1 rating on the $1.05 billion senior secured credit facility, the B1 rating on the $500 million of senior unsecured notes and the SGL-2 speculative grade liquidity rating. Moody's withdrew the Caa1 rating on the senior subordinated notes that were redeemed in full and the B1 rating on the senior secured notes that were also fully taken out through a combination of a tender offer and satisfaction and discharge. These actions conclude a review for upgrade that was initiated on November 18, 2011. The rating outlook is stable. "The two notch upgrade of the Corporate Family Rating to Ba3 reflects a material improvement in credit metrics pro forma for the transaction, a significant increase in the scale of the combined company and increased exposure to faster growing emerging markets in Latin America," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. "In addition, the acquisition will broaden ACCO's distribution to more mass retailers and away from the traditional Office Super Stores," he said. MeadWestvaco's Consumer & Office Products business is a manufacturer and marketer of school supplies, office products, and planning and organizing tools -- including the Mead(R), Five Star(R), Trapper Keeper(R), AT-A-GLANCE(R), Cambridge(R), Day Runner(R), Hilroy, Tilibra and Grafons brands in the United States, Canada and Brazil. With the addition of this business, ACCO Brands increased its scale and strengthens its position in school and office products. Ratings upgraded: Corporate Family Rating to Ba3 from B2; Probability of Default Rating to Ba3 from B2; Ratings affirmed (no change in LGD assessments): $500 million Senior Unsecured Notes at B1 (LGD 5, 80%); $320 million Term Loan A at Ba1 (LGD2, 26%); $450 million Term Loan B at Ba1 (LGD2, 26%); $250 million Revolver at Ba1 (LGD2, 26%); Speculative grade liquidity rating at SGL-2 Ratings withdrawn: Senior subordinated notes rating at Caa1; Senior secured notes rating at B1; RATING RATIONALE ACCO's Ba3 Corporate Family Rating reflects its size at over $2 billion for the combined company, moderate Debt/Ebitda of around 4 times proforma for the acquisition, good product and geographic diversification, and the expectation for steady financial performance. The rating also considers ACCO's increased exposure to the faster growing emerging markets of Latin America at 12% of pro forma sales. The rating incorporates the mature nature of the office and school supplies industry. ACCO serves a consumable segment, about 60% of which is tied to discretionary consumer spending and a durable exposure, which is driven more by business spending but is more vulnerable to cyclicality. Mitigating these factors is ACCO's solid market position within the office supply product categories, improved margins through a realignment of its cost structure, good free cash flow generation, commitment to pay down debt and good liquidity profile that provides financial flexibility to continue to weather the uncertain economic environment. Moody's also considers the relevance of ACCO to its largest customers as one of only a few global suppliers of office products. The stable outlook reflects Moody's expectation that the integration of Mead C&OP will not encounter any material disruptions. Moody's expects the combined company to consistently generate at least $125 million of free cash flow and EBITDA of $340 million or more. Debt/EBITDA is expected to remain around 4 times or lower. The rating could be upgraded if the combined company outperforms Moody's expectations for a sustained period. Key credit metrics driving a potential upgrade are EBITA margins remaining above 15% (16.1% proforma) and debt/EBITDA below 3 times (currently over 4 times proforma). For the debt/ EBITDA upgrade threshold to be met, EBITDA needs to increase by about $160 million from proforma levels as of December 31, 2011 or debt needs to decrease by around $480 million. The rating could be downgraded if the integration of the two companies is unsuccessful and expected operating improvements are not realized. Key credit metrics driving a potential downgrade would be if EBITA margins fall to the high single digits or lower for a prolonged period and debt/EBITDA is sustained at 5 times or higher. For the debt/ EBITDA downgrade threshold to be met, EBITDA needs to decrease by about $50 million from proforma levels as of December 31, 2011 or debt needs to increase by around $250 million. The principal methodology used in rating ACCO was Moody's Global Consumer Durables methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ACCO Brands Corporation is a leading supplier of branded office products, which are marketed in over 100 countries to retailers, wholesalers, and commercial end-users. Revenue for ACCO approximated $1.3 billion for the year ending December 31, 2011. The office product segment of MeadWestvaco ("Mead C&OP'), located in Dayton, Ohio, is a leading provider of school, office, and time management products in North America and Brazil. It manufactures brands such as At-A-Glance, Day Runner, Five-Star, Mead, and Hilroy. Sales for the year ending December 31, 2011 approximated $740 million. AFA INVESTMENT: Insurer Says Policies Can't Be Assigned in Sale --------------------------------------------------------------- Zurich American Insurance Company has submitted a limited objection and reservation of rights to AFA Investment Inc.'s proposed sale of assets. Jesse N. Silverman, Esq., at Dilworth Paxson LLP, representing Zurich, states various insurance policies were issued to the Debtors in accordance with Zurich's applicable underwriting criteria which require an evaluation of the risks associated with extending insurance coverage. Because any assignment of the Policies would alter Zurich's potential exposure under those contracts, the Policies contain anti-assignment provisions which prohibit the assignment of the contracts without the consent of Zurich. Accordingly, the assignment of the Policies without the consent of Zurich is prohibited by the terms of the Policies, as well as applicable non-bankruptcy law. In addition, the Policies by their own terms insure only those entities which are named insureds or additional named insureds under the policies. Even if the Debtors could assume and assign the Policies, the Buyer would not be provided with any coverage under the Policies post- assumption since it would not be a named insured under the Policies. In the event the parties to the proposed sale intend to assign or transfer Debtors' rights under the Policies, Zurich objects and does not consent to the approval of any proposed to the extent that any of its rights are modified and prejudiced in any manner. In the event that Debtors seek to assign the Policies, Zurich reserves all of its rights to consent to any assignment of the Policies, as well as to insist on Debtors' and Buyer's full compliance with the requirements of section 365(b) of the Bankruptcy Code. Zurich also reserves its rights to assert claims for any presently unliquidated amounts for any obligations due and owing under the Policies. In the event that Zurich does consent to any assignment of the Policies, any and all obligations of Debtors, as insureds under the Policies and the Agreements, must be assumed by the Buyer in connection with any assumption and assignment of the Policies and the Agreements including the obligation to maintain any collateral in amounts required by the Policies and the Agreements. Zurich's counsel may be reached at: Jesse N. Silverman, Esq. DILWORTH PAXSON LLP 704 King Street Wilmington, Delaware 19801 Tel: (302) 571-9800 Fax: (302) 571-8875 The Debtors will ask for approval of the proposed sale procedures on May 8 at 2:00 p.m. (ET). As reported in the Troubled Company Prospector on April 27, 2012, the lenders under the Debtors' prepetition first lien credit facility provided a postpetition debtor-in-possession financing facility to allow the Debtors to pursue the sale in a manner that will maximize asset value and preserve as many employee, vendor and customer relationships as possible. The interim financing order establishes, among other things, several milestones for the Debtors' sale process, including requirements that the Debtors: a) obtain approval of bid procedures by May 14; b) obtain one or more executed letters of intent to purchase the assets by May 17; c) conduct the auction by June 17; d) seek to have the sale hearing occur and the sale order(s) entered no later than five business days after the auction; and e) consummate any sale(s) of the assets by June 28. The Debtors retained Imperial Capital, LLC, to identify potential buyers and to assist in completing a Sale of the Assets as a single lot to one buyer, or in discrete lots to multiple buyers. The Debtors have not yet designated a stalking horse bidder or entered into a stalking horse agreement or other asset purchase agreement. To incentivize potential bidders and maximize the potential value of their assets, the Debtors request that they be authorized, upon their receipt of any bid (or bids, if for less than substantially all assets) that the Debtors deem, in an exercise of their sound business judgment to be acceptable, to designate one or more bids as a stalking horse bid, at any time up to 24 hours before the commencement of the auction. The Debtors also seek approval to grant the stalking horse bidder bid protections, including a topping fee. The interim order approving the DIP facility preserves, among other things, credit bidding rights for the Debtors' secured lenders. The Debtors propose to deem General Electric Capital Corporation, the agent under the DIP facility, as a "qualified bidder." The Debtors proposed these key milestones under the sale procedures: * The Debtors will seek to obtain letters of intent to purchase the assets until May 29, 2012. * Until 24 hours before the auction, the Debtors may select one or more stalking horse bidders. * The Debtors will continue soliciting interest from and assisting potential bidders in conducting due diligence until June 11, 2012. * If they receive more than one qualified bid, the Debtors will conduct an auction on June 12, 2012, beginning at 10:00 a.m. The Debtors have scheduled the sale approval hearing at June 15, 11:30 a.m. Objections, if any, are due June 14, at 12:00 noon. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. is one of the largest processors of ground beef products in the United States. The Company has five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA has seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% percent of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings -- BLBT -- affected sales. Judge Mary Walrath presides over the case. Lawyers at Jones Day and Pachulski Stang Ziehl & Jones LLP serve as the Debtors' counsel. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. McDonald Hopkins LLC and Potter Anderson & Corroon LLP represents the Committee. AFA INVESTMENT: Schedules Filing Deadline Extended to May 24 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware extended until May 24, 2012, AFA Investment Inc., et al.'s time to file their schedules and statements of financial affairs. The Court was advised that the Debtors and the Official Committee of Unsecured Creditors had resolved the Committee's limited objection to the extension motion. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. is one of the largest processors of ground beef products in the United States. The Company has five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA has seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% percent of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings -- BLBT -- affected sales. Judge Mary Walrath presides over the case. Lawyers at Jones Day and Pachulski Stang Ziehl & Jones LLP serve as the Debtors' counsel. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. McDonald Hopkins LLC and Potter Anderson & Corroon LLP represents the Committee. ALL SMILES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: All Smiles Dental Center, Inc., Debtor 4901 LBJ Freeway, Suite 300 Dallas, TX 75244 Bankruptcy Case No.: 12-32924 Affiliate that simultaneously filed a separate Chapter 11 petition: Entity Case No. ------ -------- AS Property Holdings 12-32925 Chapter 11 Petition Date: May 2, 2012 Court: U.S. Bankruptcy Court Northern District of Texas (Dallas) Judge: Stacey G. Jernigan About the Debtors: All Smiles Dental Center is a dental practice management service organization supporting 33 dental and orthodontic practices within Texas. The practices are at 22 different physical locations spanning the Dallas, Fort Worth, and Houston metropolitan areas. Non-debtor affiliate All Smiles Dental Professionals, P.C. ("PC") employs the clinical staff and provides all dental and orthodontic services at these practices. Richard J. Malouf, D.D.S. founded All Smiles in 2002. In June 2010, ASDC Holdings, LLC acquired 80% of the outstanding equity interest in All Smiles. Dr. Malouf resigned from the board as of April 19, 2012. Debtors' Counsel: Jason B. Binford, Esq. KANE RUSSELL COLEMAN & LOGAN PC 1601 Elm Street, Suite 3700 Dallas, TX 75201 Tel: (214) 777-4227 Fax: (214) 777-4299 E-mail: jbinford@krcl.com - and ? Joseph A. Friedman, Esq. KANE, RUSSELL, COLEMAN & LOGAN 1601 Elm Street, Suite 3700 Dallas, TX 75201-7207 Tel: (214) 777-4200 E-mail: jfriedman@krcl.com Debtors' Consultant: TURN WORKS LLC Neil Minihane Lead Debtor's Estimated Assets: $1,000,001 to $10,000,000 Lead Debtor's Estimated Debts: $50,000,001 to $100,000,000 The petitions were signed by Neil J. Minihane, interim president. Consolidated List of Creditors Holding 20 Largest Unsecured Claims: Entity Nature of Claim Claim Amount ------ --------------- ------------ Caymus Partners, LLC -- $3,425,355 c/o Samir Kaushik/ Riy T. Atwood Jones Day 2727 North Harwood Street Dallas, TX 75201-1515 Valor Management Corp. -- $265,252 200 South Michigan Avenue, Suite 1020 Chicago, IL 60604 United Constructors of Texas, Inc. -- $218,028 6989 West Little York, Suite F Houston, TX 77040 Greenberg Traurig -- $212,718 Henry Schein -- $182,980 Southlake General Contractors, Inc.-- $140,077 McKenna Long & Aldridge, LLP -- $139,281 Fish & Richardson P.C. -- $139,129 CP Richard Ellis -- $125,471 Susman Godfrey LLP -- $116,346 Abrams & Baylis LLP -- $96,745 Waller Lansden Dortch & Davis -- $92,279 Alorica, Inc. -- $72,572 SYBRon/SDS ORMCO-#0382900 -- $71,468 Logix Communication -- $45,151 Univision 23 -- $25,445 Richard Malouf -- $20,246 Duff & Phelps LLC -- $20,000 OpS Corp -- $19,250 Process in Focus -- $16,666 ALLIED IRISH: Cancels EUR3.9BB Capital Redemption Reserve Fund -------------------------------------------------------------- The Irish High Court, confirmed the application by Allied Irish Banks, p.l.c., to cancel its capital redemption reserve fund of EUR3,957,595,068 and EUR2bn of its share premium account. The reserve resulting from those cancellations will be used to eliminate permanent losses and be treated as distributable reserves. The implementation of the Court Order will have no impact on the Group's capital ratios. About Allied Irish Banks Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a major commercial bank based in Ireland. It has an extensive branch network across the country, a head office in Dublin and a capital markets operation based in the International Financial Services Centre in Dublin. AIB also has retail and corporate businesses in the UK, offices in Europe and a subsidiary company in the Isle of Man and Jersey (Channel Islands). Since the onset of the global and Irish financial crisis, AIB's relationship with the Irish Government has changed significantly. As at Dec. 31, 2010, the Government, through the National Pension Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary shares of the Company (the share of the voting rights at shareholders' general meetings), 10,489,899,564 convertible non- voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On April 8, 2011, the NPRFC converted the total outstanding amount of CNV shares into 10,489,899,564 ordinary shares of AIB, thereby increasing its holding to 92.8% of the ordinary share capital. In addition to its shareholders' interests, the Government's relationship with AIB is reflected through formal and informal oversight by the Minister and the Department of Finance and the Central Bank of Ireland, representation on the Board of Directors (three non-executive directors are Government nominees), participation in NAMA, and otherwise. The Company reported a loss of EUR2.29 billion in 2011, a loss of EUR10.16 billion in 2010, and a loss of EUR2.33 billion in 2009. Allied Irish's consolidated statement of financial position for the year ended Dec. 31, 2011, showed EUR136.65 billion in total assets, EUR122.18 billion in total liabilities and EUR14.46 billion in shareholders' equity. ARCH COAL: S&P Lowers Corp. Credit Rating to 'B+'; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Arch Coal to 'B+' from 'BB-'. "We are also lowering our rating on Arch Coal's senior unsecured notes to 'B-' from 'B+' and revising our recovery rating to '6', which indicates our expectation for negligible (0%-10%) recovery in the event of default, from '5'. These actions reflect our expectation that the company will fully repay senior unsecured notes issued by the Arch Western Finance LLC subsidiary. Upon repayment, Arch Western will become a guarantor subsidiary to a new secured bank loan package, further subordinating the Arch Coal unsecured notes, in our view," S&P said. "We are assigning our 'BB' (two notches above the corporate credit rating) issue-level rating and our '1' recovery rating to the company's proposed $2 billion senior secured bank credit facility, which includes a $1 billion revolver and a $1 billion term loan. The '1' recovery rating indicates our expectation for very high (90%-100%) recovery in the event of a payment default," S&P said. "We are removing all ratings from CreditWatch, where they were placed with negative implications on April 25, 2012," S&P said. "The downgrade on Arch Coal reflects our expectation that 2012 and 2013 EBITDA will be much lower than previously anticipated because of a sharp cyclical downturn in domestic coal demand," said Standard & Poor's credit analyst James Fielding. "A mild winter and natural gas substitution has hurt the thermal coal market. Demand for metallurgical coal has softened a bit on lower steel production overseas and because supply disruptions in Australia inflated export demand last year. As a result, Arch Coal recently cut its 2012 production guidance by 10%-15%. These factors also contribute to our lower EBITDA expectations." "Our 'B+' corporate credit rating reflects our view of the company's 'fair' business risk and its 'aggressive' financial risk. Weaknesses include exposure to volatile demand and pricing for its commodity coal products. During cyclical downturns, the company's credit ratios will typically be weak relative to those of similarly rated but less-cyclical industrial peers. Strengths include the company's 'adequate' liquidity profile, its large and diverse reserve base, and its competitive cost position," S&P said. "Our baseline scenario assumes that Arch Coal realizes about $4 billion of annual sales in 2012 and 2013. We expect lower margins as fixed production costs are spread over a lower production base and because some variable input costs such as fuel are higher. These factors contribute to our annual EBITDA estimate of less than $750 million in both years. This implies leverage over 7x, or about twice our earlier expectations and well above our 5x threshold for the previous rating. We also expect funds from operation (FFO) to debt to drop below 12%," S&P said. "Although we expect 2012 and 2013 debt ratios to be weak, we hold the view that the current downturn in the coal sector is primarily cyclical rather than secular and we expect that ratios will return levels more consistent with our 'aggressive' financial risk assessment over the intermediate term. We hold this view because we expect Arch Coal's large and diverse coal reserves and its generally competitive cost structure will enable the company to meaningful grow its exports while benefiting from an eventual recovery in domestic demand," S&P said. "Arch Coal is the nation's second largest coal producer with geographically diversified operations in most of the major U.S. thermal coal basins. This allows the company to serve a broad base of utility companies. The company's 2011 acquisition of competitor International Coal Group (not rated) provided access to large, relatively efficient metallurgical coal mines that we expect to further broaden Arch Coal's customer base, both domestically and overseas. In our view, this diversity and ability to serve export markets with long-term growth prospects offsets risks associated with declining domestic demand related adverse regulatory initiatives and cheaper alternative fuels such as natural gas," S&P said. "Our stable rating outlook reflects our view that the company will obtain its proposed term loan and credit facility under the terms currently contemplated and that its adequate liquidity profile will enable Arch Coal to endure the current downturn. The outlook further reflects our view that the current downturn in the coal sector is cyclical rather than secular," S&P said. "We would lower our rating if cash flows are much weaker than we currently anticipate, such that we no longer viewed the company's liquidity profile to be adequate. This could occur if the cyclical downturn is more severe or protracted than we currently anticipate or the company accelerates capital spending significantly above the $410 million to $440 million currently planned," S&P said. "Though an upgrade seems unlikely in the near term given the current operating environment, one could occur over time if domestic coal demand improves and exports increase such that leverage returned to the company's historical norms of 4x-5x," S&P said. ARCADIA RESOURCES: Foreclosed by Lender; To Wind Down Operations ---------------------------------------------------------------- Arcadia Services, Inc., disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that it entered into a foreclosure agreement, dated May 1, 2012, with Arcadia Holdings II, Inc. As a result of the Foreclosure Transaction, the Company no longer owns any operating businesses. The Company said it intends to wind-down its affairs and expects that holders of its outstanding unsecured indebtedness will receive no payment, or nominal payment, on their claims. After the Foreclosure Transaction, the Company estimates that it will have more than $33 million in unsecured current liabilities. The Company estimates that it will have less than $1 million in assets, all of which will be used to wind down its affairs. Arcadia Services and four of its wholly-owned subsidiaries are parties to an Amended and Restated Credit Agreement dated July 13, 2009, as amended, with Comerica Bank. Repayment of the Credit Note is guaranteed by RKDA, Inc., ASI's parent company. Prior to the maturity, Comerica Bank declared a default under the Comerica Credit Agreement and the Credit Note. The principal balance due from the Services Borrowers under the Credit Note as of April 30, 2012, was $11 million. The Indebtedness is secured by all of the assets of the Services Borrowers and by the pledge by RKDA of all of the shares of ASI capital stock. On April 17, 2012, the Services Borrowers and RKDA entered into an agreement with Comerica with respect to the Comerica Credit Agreement and amounts due under the Credit Note. Comerica agreed to forbear until April 30, 2012, from taking any action to collect the liabilities, provided the Services Borrowers and RKDA comply with the terms of the Forbearance Agreement. On May 1, 2012, Comerica sold a portion of the Indebtedness to Arcadia Holdings, and assigned to AHI all of Comerica's security interest in and with respect to the Pledged Stock. AHI is a privately-held Delaware corporation having its principal place of business in Southfield, Michigan. The Company and its directors, officers, subsidiaries and affiliates have no ownership interest in AHI and have no business relationships or agreements with AHI. In connection with the Foreclosure Transaction, the Services Borrowers and RKDA also entered into an amendment to the Forbearance Agreement with Comerica Bank. The Forbearance Amendment, dated as of May 1, 2012, provides for: (a) the execution and delivery by the Services Borrowers of a $1,000,000 single disbursement demand note to Comerica replacing an equal amount of indebtedness under the Credit Note, evidencing the Purchased Indebtedness; (b) a reduction in the maximum amount available under the Comerica Credit Agreement from $11,500,000 to $10,500,000 and a change in the formula for advances under the credit facility; and (c) immediate termination of Comerica's forbearance under the Forbearance Agreement. In light of the foregoing, the Company believes that its common shares outstanding have no value and strongly discourages investors from trading in its common stock. A copy of the Form 8-K is available for free at: http://is.gd/MFnqxg About Arcadia HealthCare Arcadia HealthCare is a service mark of Arcadia Resources, Inc. (nyse amex:KAD), and is a leading provider of home care, medical staffing and pharmacy services under its proprietary DailyMed program. The Company, headquartered in Indianapolis, Indiana, has 65 locations in 18 states. Arcadia HealthCare's comprehensive solutions and business strategies support the Company's vision of "Keeping People at Home and Healthier Longer." The Company reported a net loss of $15.76 million for the nine months ended Dec. 31, 2011. The Company had a net loss of $14.35 million for the fiscal year ended March 31, 2011, following a net loss of $31.09 million in the preceding year. The Company's balance sheet at Dec. 31, 2011, showed $15.93 million in total assets, $51.50 million in total liabilities, and a $35.57 million total stockholders' deficit. BDO USA, LLP, in Troy, Michigan, expressed substantial doubt about Arcadia Resources' ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency. ASSOCIATED MATERIALS: Facility Amendment No Impact on Caa1 Rating ----------------------------------------------------------------- Moody's Investors Service commented that the amendment to Associated Materials, LLC's revolving credit facility will enhance its liquidity and is a credit positive, but will have no immediate impact on the company's Caa1 corporate family rating. The principal methodology used in rating Associated was the Global Manufacturing Industry Methodology, published December 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Associated Materials, LLC, headquartered in Cuyahoga Falls, Ohio, is a North American manufacturer and distributor of exterior residential building products. The company's core products are vinyl windows, vinyl siding, aluminum trim coil, and aluminum and steel siding and accessories. Associated is also a distributor of roofing materials, insulation, and exterior doors produced by third parties. Hellman & Friedman LLC, through its respective affiliates, is the primary owner of Associated. Revenues for the twelve months through December 31, 2011 totaled approximately $1.1 billion. AUGUST CAYMAN: S&P Assigns 'B' Corp Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to August Cayman Intermediate Holdco Inc. The rating outlook is stable. "At the same time, we assigned our issue-level ratings of 'B' to the senior secured $270 million first-lien debt (recovery rating '3') and 'B-' to the $100 million second-lien term loan (recovery rating '5'). The $270 million first-lien debt consists of a $35 million revolver and a $235 million term loan. The '3' and '5' recovery ratings reflect our expectations for meaningful (50%-70%) and modest (10%-30%) recovery, respectively, of principal in the event of default," S&P said. "The ratings reflect what we consider Schrader's 'weak' business risk profile, reflecting its exposure to cyclical auto production levels--limited scale and product diversity--somewhat offset by growth prospects supported by regulatory requirements, and its 'highly leveraged' financial risk profile, given leverage expectations between 4.5x to 5.0x, with limited positive free cash flow generation prospects over the next two years," S&P said. Schrader manufactures tire pressure monitoring systems (TPMS), fluid control components, and tire hardware and accessories, primarily for the light-vehicle automotive end-markets. The $505 million leveraged buyout (LBO) transaction announced by Madison Dearborn Partners, the private-equity sponsor, was financed with equity of $205 million and debt of $370 million, including the $235 million first-lien term loan, the $100 million second-lien term loan, and an undrawn $35 million revolver. "Pro forma for the transaction, we estimate leverage of over 4.5x, expected to remain in the 4.5x-5.0x range, because we do not incorporate any meaningful EBITDA expansion over the next two years. We do not incorporate any large debt-financed acquisitions or a significant dividend payout to the sponsors in our base case, but we expect its financial policies to be aggressive given its private-equity ownership structure, which is likely to preclude sustained de-leveraging," S&P said. "We expect cash flow generation prospects to remain modest over the next two years," said Standard & Poor's credit analyst Nishit Madlani, "given that potentially sluggish growth in end markets will limit any significant margin expansion till 2013. Beyond 2013, we expect revenue growth to accelerate, given TPMS-related legislation, especially in Europe. Even with regulatory requirements, the level of cash generation is highly sensitive to future production, which could eventually be volatile, in our view." "In our opinion," added Mr. Madlani, "Schrader's EBITDA margin is fair by industry standards, partly reflecting its market share and vertical integration capabilities. We believe continued success in sustaining single-sourced contracts with key customers will be critical to the maintenance of margins around current levels. Given that Schrader has operated as an independent business previously under Tomkins, in our base-case scenario, we do not expect significant future incremental stand-alone costs. Still, we expect some costs to inevitability rise, and higher commodity costs and demand weakness in Europe during 2012 and perhaps 2013 remain risks." "The stable rating outlook reflects our expectation that the company's leverage will be about 4.5x-5.0x over the next 12 months, with modest cash flow generation prospects for debt reduction given potentially sluggish growth in its end markets limiting any significant margin expansion," S&P said. "We could raise the ratings if we believed that Schrader could sustain free operating cash flow (FOCF) of about $15 million to $20 million to repay borrowings under its debt facilities, and allow for sustainable liquidity (cash and availability under its revolver) of about $30 million-$40 million with a sustained pattern of leverage approaching 4x or less. We estimate that EBITDA would need to reach about $85 million for this to occur, perhaps through greater volume growth or margin expansion than we assume," S&P said. "We could lower our rating if FOCF turned negative for consecutive quarters, which would reduce liquidity. For example, we estimate that if gross margins (excluding depreciation and amortization) fall by more than 200 basis points over the next 12 months, while revenue growth and working capital performance are less favorable than we expect, the company could begin to use cash and need to borrow more under its revolver. We could also lower the ratings if the company's leverage were to increase well above 5x because of shareholder-driven actions such as a debt-financed acquisition or a dividend to the new sponsors," S&P said. AUTOMOTORIES GILDMEISTER: Stable Market Cues Fitch to Hold Ratings ------------------------------------------------------------------ Fitch Ratings has affirmed the ratings of Automotores Gildemeister S.A.'s (AG) as follows: -- Foreign currency Issuer Default Rating (IDR) at 'BB'; -- Local currency IDR at 'BB'; -- USD400 million unsecured senior notes due in 2021 at 'BB'. The Rating Outlook is Stable. AG's credit ratings reflect the company's stable market position, solid brand recognition, and high margins. AG's business position in the automobile distribution and retailing industry within Chile and Peru is seen as sustainable in the medium term, with market shares in each of these markets of approximately 11% and 17%, respectively, at the end of 2011. The ratings consider AG's ability to withstand competitive pressures based upon its market position, as the third largest auto distributor in Chile and the second most important importer and distributor in Peru. Also incorporated in the ratings is the company's unique business model, which combines importation, distribution, and retailing activities and has resulted in EBITDAR margins between 11% and 13.5% during the last few years. The company benefits from the strong brand recognition of the vehicles it sells. Hyundai Motor Company (Hyundai), rated 'BBB'/ Positive Outlook by Fitch, is the most important brand sold and distributed by the company, accounting for approximately 70% of AG's revenues. The company's commercial tie to Hyundai is seen as stable as the commercial relationship between AG and Hyundai has existed for more than 20 years. AG is Hyundai's sole importer in Chile and Peru of passenger cars (PC) and light commercial vehicles (LCV). Based upon AG's success in managing the Hyundai brand, this commercial relationship, which is renewed every four years with the next renewal taking place in 2013, is expected to remain solid through the foreseeable future. The ratings are constrained by the cyclicality of AG's business, moderate leverage, negative FCF generation during strong sales years due to increasing working capital needs, and limited diversification. The high working capital needs in AG's operations limit the company capacity to increase cash flow from operations (CFFO) during periods of significant expansion. During 2011, revenue increased by 34.3% and the company's CFFO was USD23 million, resulting in a low CFFO margin of 1.7%. Increasing working capital needs totaled USD114 million, as inventory levels increased by USD67 million during 2011. For 2011, calculations consider end of period and average exchange rates of CHP519.50 and CHP483.68 per USD, respectively. The company's product mix is highly dependent upon Hyundai products, exposing the company to reputation risk and shortage supply risk associated with the Hyundai brand. In addition, the automobile business is AG's core business, generating approximately 90% of its total revenues. The company's geographic diversification is somewhat limited, as Chile represents about 65% of revenues, while Peru accounts for the remainder. The Stable Outlook reflects Fitch's view that AG will maintain the positive trend in its operating results based upon its market position and brand recognition coupled with a positive business and macro economic environment in its main markets. The Stable Outlook also factors in the expectation that the company's gross adjusted leverage, measured by the total adjusted debt to EBITDAR ratio, will remain stable at around 3 times (x) and that the company will maintain an adequate liquidity and manageable debt profile in the short to medium term. Shareholder- Friendly Actions Negative For Credit Quality: From a credit perspective, Fitch negatively views AG's decision to increase the level of inter company loans by approximately USD33 million during 2011. This level represented 20%, 6%, and 140% of the company's cash, total on-balance debt, and CFFO. 2011. AG's ratings incorporate the expectation that the company will not materially increase inter company loans in the future. Deviations from this expectation would likely result in a negative rating action. Business Expected to Grow between 15% and 20% during 2012, Supported by Volume Trend: The ratings incorporated the expectation that the favorable macroeconomic-driven sales environment in the company's markets, Chile and Peru, will continue in the medium term, with rising demand for new cars. Total new cars sold in Chile and Peru during 2011 were 340,801 and 119,540 units, respectively, representing increases of 17.4% and 17%, respectively, versus 2010. After growing 6% and 6.9%, during 2011, the Chilean and Peruvian economies are forecasted to post growth rates of 4.1% and 5.4%, respectively, during 2012. The company's 2011 revenue was USD1.4 billion, representing an increase of 34% from the prior year. For 2012, the company's revenue is forecasted to continue growing between 15% and 20% driven primarily by higher volume. The company's 2011 total units sales, were 66,920 units, Fitch's base case is that AG will increase its sales volume by approximately 17% during 2012, while the company's EBITDAR margin is expected to remain stable at around 12%. Adequate Liquidity, Refinancing Completion a Positive: The company rebuilt its liquidity during the LTM period ended in March 2012 with the proceeds from the USD400 million senior notes, including the USD100 million reopening completed during the first quarter of 2012. At the end of December 2011, the company had USD160.9 million of cash (USD60 million as of December 2010) and USD204.2 million of short-term debt (USD154 million as of December 2010). After the completion of the recent reopening, AG's short- term debt at the end of March 2012 is expected to be around USD100 million, primarily composed of used credit lines and bank debt financing car imports. The company's flexible debt payment schedule post reopening is a positive factor. Other than the short-term financing, the company does not have any material debt payment due during 2012, 2013 and 2014. AG's main debt maturity is composed by the USD400 million senior notes issuance due in 2021. Adjusted Gross Leverage Expected to Continue Below 3.5x: The company's operations grew significantly during 2011. This growth was reflected in AG's cash flow generation, measured by EBITDAR, which increased by 54% during the period, from USD124 million (2010) to USD190 million (2011). The business growth also resulted in the company's total adjusted debt increasing by 49% during 2011. The increase in the company's total adjusted debt was primarily used to finance the company's 2011 negative free cash flow (FCF) of USD55 million and to improve its cash position from USD62 million (December 2010) to USD161 million (December 2011). AG had USD620 million of total adjusted debt by the end of December 2011. This debt consists of USD524.5 million of on- balance debt including the senior notes due in 2021 and approximately USD95 million of off-balance lease adjusted debt (calculated as 7x annual rental expenses of approximately USD14.6 million). AG's total adjusted gross leverage, as measured by total adjusted debt versus total EBITDAR was 3.3x and 3.4x during 2011 and 2010, respectively. The company's gross adjusted leverage is expected to remain below 3.5x during the next 24 months ended in December 2013. FCF to Remain Negative in 2012 Driven by Growing Business: AG had a negative FCF of USD55 million during 2011; this level represented 3.9%, 34.1% and 10.5% of the company's LTM revenues, cash, and total on-balance debt by the end of Dec. 2011. Fitch's FCF calculation for the period considers cash flow from operations (CFFO) of USD23 million less capital expenditures (capex) and distributed dividends of USD49.7 million and USD28.8 million, respectively. The ratings incorporate the view that the company's FCF will remain negative in the low single digits during 2012, driven primarily by business growth, increasing capex levels, and stable gross working capital cycle (account receivables and inventories) of approximately 155 days. Expectation on the company's 2012 capex level has been adjusted, and it is now forecasted to be around USD90, reflecting the opening of new own car sale centers as the business continues to expand. The expectation of 2012 capex levels that were previously incorporated in the ratings were lower at USD50 million. Distributed dividends should remain in the range of USD30 million to USD40 million per year. Key Rating Drivers: The ratings factored in the expectation that AG will maintain leverage and liquidity at the aforementioned levels. Fitch will view as a positive to credit quality that could trigger a positive rating action a combination of the following factors: improvement in the company's FCF generation resulting in consistent positive FCF levels coupled with solid liquidity and lower gross adjusted leverage. Factors that could lead to the consideration of a negative rating action include a combination of the following factors: expectations by Fitch of total adjusted gross leverage being consistently at or beyond 4.0x, decline in sales volume due to a deteriorating business and political environment, shareholder friendly actions; and events negatively affecting its reputation with the Hyundai brand. BASS LTD: Court Rules in Lease Dispute With City of New Iberia -------------------------------------------------------------- In the lawsuit, Bass, Ltd., v. City of New Iberia and Spanish Town Investments, LLC, Adv. Proc. No. 11-05048 (Bankr. W.D. La.), the City of New Iberia filed a motion for summary judgment challenging claims brought by Bass, Ltd. arising from a lease of land for the specific purpose of erecting and maintaining an advertising billboard. The dispute centers on whether the Lease was terminated pre-petition as well as the validity of a right of first refusal contained in the Lease. Bass also filed a cross motion for summary judgment seeking a declaration that the Lease was not validly terminated prior to the bankruptcy filing. In a May 1, 2012 Memorandum Opinion available at http://is.gd/0fIMyWfrom Leagle.com, Bankruptcy Judge Robert Summerhays granted the City's motion for summary judgment in part and denied the motion in part. The Court also granted Bass' motion for summary judgment with respect to the termination of the Lease. Lafayette, Louisiana-based Bass Ltd. and Bass Digital Sign Sales LLC filed for Chapter 11 bankruptcy (Bankr. W.D. La. Case Nos. 11- 51393 and 11-51396) on Sept. 27, 2011. Judge Robert Summerhays presides over the case. Louis M. Phillips, Esq., and Ryan James Richmond, Esq., at Gordon, Arata, McCollam, Duplantis & Eagan LLC. Bass Ltd. estimated $1 million to $10 million in both assets and debts. Bass Digital estimated $500,001 to $1 million in assets and $1 million to $10 million in debts. The petitions were signed by Stephen Sonnier, managing member. BLUE SPRINGS: Hires Polsinelli Shughart as Counsel -------------------------------------------------- Blue Springs Ford Sales, Inc., asks the U.S. Bankruptcy Court for permission to employ Polsinelli Shughart PC as counsel. Michael M. Tamburini, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Polsinelli has advised the Debtor that Polsinelli's hourly rates range from $275 to $500 per hour for shareholders, from $210 to $300 per hour for associates and senior counsel and from $110 to $190 per hour for paraprofessionals. Prior to the Petition Date, Polsinelli received, and continues to hold, a $200,000 retainer from the Debtor and deposited the Retainer in a Polsinelli trust account. About Blue Springs Ford Blue Springs Ford Sales, Inc. -- http://www.bluespringsford.com/ -- is a Ford dealer, serving Blue Springs in Missouri. A jury verdict assessing actual damages of $171,500 and punitive damages in the amount of $1.75 million (54 times the actual damages) prompted Blue Springs Ford to seek Chapter 11 protection. The judgment was on account of a suit filed by a customer in Circuit Court of Jackson County, Missouri, under a variety of legal claims, including, but not limited to, the company's alleged failure to adequately disclose a full detailed vehicle history report in connection with a sale of a used Ford. Blue Springs Ford filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-10982) on March 21, 2012, listing $10 million to $50 million in assets and debts. Christopher A. Ward, Esq., at Polsinelli Shughart PC, serves as the Debtor's counsel. Donlin Recano & Company Inc. serves as the Debtor's claims agent. The petition was signed by Robert C. Balderston, president. Delaware Bankruptcy Judge Mary F. Walrath in a March 28 order transferred the case's venue following an oral motion by the judgment, creditors Kimberly and Michael von David, at a March 23 hearing. The case was transferred to the U.S. Bankruptcy Court Western District of Missouri Court (Case No. 12-41176) and assigned to the Hon. Jerry W. Venters. BLUE SPRINGS: Hires Donlin Recano as Claims & Noticing Agent ------------------------------------------------------------ Blue Springs Ford Sales Inc. asks the U.S. Bankruptcy Court for permission to employ Donlin, Recano & Company, Inc. as claims and noticing agent. The Debtor provided DRC with a $15,000 retainer. DRC's Colleen McCormick attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Blue Springs Ford Blue Springs Ford Sales, Inc. -- http://www.bluespringsford.com/ -- is a Ford dealer, serving Blue Springs in Missouri. A jury verdict assessing actual damages of $171,500 and punitive damages in the amount of $1.75 million (54 times the actual damages) prompted Blue Springs Ford to seek Chapter 11 protection. The judgment was on account of a suit filed by a customer in Circuit Court of Jackson County, Missouri, under a variety of legal claims, including, but not limited to, the company's alleged failure to adequately disclose a full detailed vehicle history report in connection with a sale of a used Ford. Blue Springs Ford filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-10982) on March 21, 2012, listing $10 million to $50 million in assets and debts. Christopher A. Ward, Esq., at Polsinelli Shughart PC, serves as the Debtor's counsel. Donlin Recano & Company Inc. serves as the Debtor's claims agent. The petition was signed by Robert C. Balderston, president. Delaware Bankruptcy Judge Mary F. Walrath in a March 28 order transferred the case's venue following an oral motion by the judgment, creditors Kimberly and Michael von David, at a March 23 hearing. The case was transferred to the U.S. Bankruptcy Court Western District of Missouri Court (Case No. 12-41176) and assigned to the Hon. Jerry W. Venters. BLUE SPRINGS: Files Schedules of Assets and Liabilities ------------------------------------------------------- Blue Springs Ford Sales Inc. filed with the Bankruptcy Court for the District of Missouri its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $10,282,348 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $7,999,555 E. Creditors Holding Unsecured Priority Claims $15,746 F. Creditors Holding Unsecured Non-priority Claims $5,985,929 ----------- ----------- TOTAL $10,282,347 $14,001,234 A full text copy of the company's financial report is available free at http://bankrupt.com/misc/BLUE_SPRINGS_sal.pdf About Blue Springs Ford Blue Springs Ford Sales, Inc. -- http://www.bluespringsford.com/ -- is a Ford dealer, serving Blue Springs in Missouri. A jury verdict assessing actual damages of $171,500 and punitive damages in the amount of $1.75 million (54 times the actual damages) prompted Blue Springs Ford to seek Chapter 11 protection. The judgment was on account of a suit filed by a customer in Circuit Court of Jackson County, Missouri, under a variety of legal claims, including, but not limited to, the company's alleged failure to adequately disclose a full detailed vehicle history report in connection with a sale of a used Ford. Blue Springs Ford filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-10982) on March 21, 2012, listing $10 million to $50 million in assets and debts. Christopher A. Ward, Esq., at Polsinelli Shughart PC, serves as the Debtor's counsel. Donlin Recano & Company Inc. serves as the Debtor's claims agent. The petition was signed by Robert C. Balderston, president. Delaware Bankruptcy Judge Mary F. Walrath in a March 28 order transferred the case's venue following an oral motion by the judgment, creditors Kimberly and Michael von David, at a March 23 hearing. The case was transferred to the U.S. Bankruptcy Court Western District of Missouri Court (Case No. 12-41176) and assigned to the Hon. Jerry W. Venters. BP CLOTHING: Amended Reorganization Plan Confirmed -------------------------------------------------- Bankruptcy Judge Shelley C. Chapman confirmed the amended Chapter 11 plan of reorganization filed BP Clothing LLC. The Plan provides that Holders of the Senior Lender First-Out Obligation Claims will be receiving an aggregate of 65% of the Reorganized Debtor Common Units (for an estimated recovery of 95.9%), Holders of the Senior Lender Second-Out Obligation Claims will be receiving their pro rata share of 35% of the Reorganized Debtor Common Units (for an estimated recovery of 89.7%), and the Holders of the Subordinated Lender Claims will not receive a recovery on account of such Claims. Both the Senior Lender First-Out Obligation Claims and the Senior Lender Second-Out Obligation Claims will be Impaired under the Plan. The classification, treatment and estimated recoveries of Claims and Interests under the Plan are: A. Class 1 (Priority Non-Tax Claims) will be paid the Allowed Amount in full in Cash on the later of the Effective Date and the first Distribution Date subsequent to the date the Priority Non-Tax Claim becomes an Allowed Priority Non-Tax Claim. Estimated recovery is 100%. B. Class 2 (Senior Lender First-Out Obligation Claims) will receive its pro rata share of 65.0% of the Reorganized Debtor Common Units. These claims are estimated to total $30.23 million and recovery is estimated to be 95.9%. C. Class 3 (Senior Lender Second-Out Obligation Claims) receive a pro rata share of 35.0% of the Reorganized Debtor Common Units. These claims are estimated to total $17.50 million and recovery is estimated to be 89.7%. D. Class 4 (Factor Claims) will be paid in Cash or as agreed by the Senior Lenders and the Factor Lenders. These claims are estimated to total $3.71 million and recovery is unknown. E. Class 5 (Subordinated Lender Claims) will receive no distribution and will be cancelled. These claims are estimated to total $35.13 million and recovery is 0%. F. Class 6 (PIK Lender Claims) will receive no distribution and will be cancelled. These claims are estimated to total $6.84 million and recovery is 0%. G. Class 7 (General Unsecured Claims) will receive no distribution and will be cancelled. These claims are estimated to total $684.51 million and recovery is 0%. H. Class 8 (Existing Equity Interests) will receive no distribution and will be cancelled. Estimated recovery is 0%. A full-text copy of the disclosure statement is available for free at http://bankrupt.com/misc/BP_CLOTHING_ds_amended.pdf About BP Clothing New York-based BP Clothing LLC is an apparel company specializing in the design, manufacture and sale of women's apparel products. The business primarily consists of selling merchandise directly to Walmart, as well as miscellaneous wholesale providers. It is also involved with a third party, eFashionSolutions LLC, which hosts the Web site http://www.babyphat.com/ It sells certain of its inventory through the Web site, and pays a percentage of sales to E-Fashions. BP Clothing LLC is wholly owned by BP Clothing Holdings LLC. BP Clothing LLC filed a chapter 11 case (Bankr. S.D.N.Y. Case No. 11-15696) on Dec. 12, 2011, to effectuate a proposed restructuring that will substantially reduce debt and enhance the Debtor's liquidity. The Debtor intends to emerge from bankruptcy quickly. Judge Shelley C. Chapman presides over the case. Michael S. Fox, Esq., and Sherri D. Lydell, Esq., at Olshan Grundman Frome Rosenzweig & Wolosky, LLP, serves as the Debtor's counsel. In its petition, the Debtor estimated $50 million to $100 million in both assets and debts. The petition was signed by Kevin Weber, executive vice president and CFO. FCC LLC d/b/a/ First Capital Western Region LLC as Factor and DIP lender, is represented by Jeff J. Friedman, Esq., at Katten Muchin Rosenman LLP. Guggenheim Corporate Funding LLC, as Administrative Agent to the prepetition Senior Term Lenders, is represented by Ronit J. Berkovich, Esq., at Weil, Gotshal & Manges LLP. CAPITOL BANCORP: Incurs $8.9 Million Net Loss in First Quarter -------------------------------------------------------------- Capitol Bancorp Ltd. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $8.93 million on $22.99 million of total interest income for the three months ended March 31, 2012, compared with a net loss of $2.77 million on $28.36 million of total interest income for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $2.05 billion in total assets, $2.17 billion in total liabilities, and a $121.25 million total deficit. As of March 31, 2012, there are several significant adverse aspects of Capitol's consolidated financial position and results of operations which include, but are not limited to: * An equity deficit approximating $121.3 million; * Regulatory capital classification on a consolidated basis as less than "adequately-capitalized" and related negative amounts and ratios; * Numerous banking subsidiaries with regulatory capital classification as "undercapitalized" or "significantly- undercapitalized"; * Certain banking subsidiaries which are generally subject to formal regulatory agreements have received "prompt corrective action" notifications or directives from the FDIC, which require timely action by bank management and the respective boards of directors to resolve regulatory capital ratios which result in classification as less than "adequately- capitalized" (the basis of a PCAN) or to submit an acceptable capital restoration plan to the FDIC (the basis of a PCAD), and it is likely additional PCANs or PCADs may be issued in the future or the banking subsidiaries may be unable to satisfactorily resolve those notices or directives; * Capitol has sold several of its banking subsidiaries during the past few years and has other divestiture transactions p pending. The proceeds from those divestitures have been redeployed at certain remaining banking subsidiaries which have experienced a significant erosion of capital due to operating losses. While those proceeds have been a significant source of funds for redeployment, the Corporation will need to raise significant other sources of new capital in the future; * The Corporation and substantially all of its banking subsidiaries are operating under various regulatory agreements which place a number of restrictions on them and impose other requirements limiting activities and requiring preservation of capital, improvement in regulatory capital measures, reduction of nonperforming assets and other matters for which the entities have not achieved full compliance. * Elevated levels of nonperforming loans and other nonperforming assets as a percentage of consolidated loans and total assets, respectively; and * Significant losses from continuing operations, resulting primarily from elevated provisions for loan losses and costs associated with foreclosed properties and other real estate owned. Capitol said these considerations raise some level of doubt (potentially substantial doubt) as to its ability to continue as a going concern. Capitol's Chairman and CEO Joseph D. Reid said in a press release, "Our focus continues to be on deleveraging the consolidated balance sheet, while also efficiently managing risk and improving liquidity. We believe that these efforts, in addition to the bank divestitures and regional consolidations that have occurred over the past few years, will address the challenges that we continue to face in multiple markets in which our network of affiliate banks operate and help the Corporation return to fundamental performance over time." A copy of the Form 10-Q is available for free at: http://is.gd/x0bWkq About Capitol Bancorp Limited Capitol Bancorp Limited (NYSE: CBC) -- http://www.capitolbancorp.com/-- is a $5.1 billion national community banking company, with a network of bank operations in 16 states. Founded in 1988, Capitol Bancorp Limited has executive offices in Lansing, Michigan and Phoenix, Arizona. In September 2009, Capitol and its second-tier bank holding companies entered into a written agreement with the Federal Reserve Bank of Chicago under which Capitol has agreed, among other things, to submit to the Reserve Bank a written plan to maintain sufficient capital at Capitol on a consolidated basis and at Michigan Commerce Bank (as a separate legal entity on a stand- alone basis); and a written plan to enhance the consolidated organization's risk management practices, a strategic plan to improve the consolidated organization's operating results and overall condition and a cash flow projection. Certain of Capitol's bank subsidiaries have entered into formal agreements with their applicable regulatory agencies. Those agreements provide for certain restrictions and other guidelines and/or limitations to be followed by the banks. In 2009, Capitol commenced the deferral of interest payments on its various trust-preferred securities, as is permitted under the terms of the securities, to conserve cash and capital resources. The payment of interest may be deferred for periods up to five years. During such deferral periods, Capitol is prohibited from paying dividends on its common stock (subject to certain exceptions) and is further restricted by Capitol's written agreement with the Federal Reserve Bank of Chicago. Accrued interest payable on such securities approximated $18.1 million at June 30, 2010. The Company reported a net loss of $51.92 million in 2011, a net loss of $254.36 million in 2010, and a net loss of $264.54 million in 2009. CAPITOL INFRASTRUCTURE: Auction Protocol Hearing Set for May 15 --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Capitol Broadband LLC scheduled a hearing for May 15 where the bankruptcy judge in Delaware will set up auction and sale procedures. Capitol already has an $11 million offer from Hotwire Communications Ltd. for the assets at 190 locations. Capitol is yet to specify when it wants the auction and the initial deadline for competing bids. About Capitol Infrastructure Capitol Infrastructure, LLC, a Cary, North Carolina-based provider of communication services operating under the name of Connexion Technologies, filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-11362) on April 26, 2012. David M. Fournier, Esq., at Pepper Hamilton LLP, serves as counsel to the Debtor. Prior to the financial crisis that precipitated the Chapter 11 filing, the Debtors served communities with operations in 48 states and had 102,460 video customers, 14,034 voice customers and 47,993 data customers. During the year ended Dec. 31, 2011, the Debtors had 570 full time employees and had annual revenues from its service provider business of $69.2 million. The Debtor estimated up to $10 million in assets and up to $100 million in debts. Capitol concluded earlier in 2012 that its "deteriorating relationship with DirecTV and their overall corporate complexity made it highly unlikely the debtors would be able to obtain adequate financing in a timely fashion," according to its CEO. Capitol is owned by Capitol Broadband LLC, which isn't in bankruptcy. CERTENEJAS INC: Can Employ Luis Carrasquillo as Consultant ---------------------------------------------------------- The Bankruptcy Court authorized the Certenejas Incorporado to employ CPA Luis R. Carrasquillo & Co., P.S.C, as financial consultant. The Debtor said it is in need of an accountant to assist its management in the financial restructuring of its affairs by providing advice in strategic planning and the preparation of Debtor's plan of reorganization, disclosure statement and business plan, and participating in Debtor's negotiations with Debtor's creditors. In selecting CPA Luis R. Carrasquillo & Co., P.S.C, the Debtor said it made careful and diligent inquiry into the qualifications and connections and has found Carrasquillo and its members to be duly qualified to assist Debtor in the aforesaid areas by reason of their ability, integrity and professional experience. The duties of Carrasquillo will consist of strategic counseling and advice, pro forma modeling preparation, financial/business assistance, preparation of documentation as requested for and during Debtor's Chapter 11, specifically as it is related to and has an effect on Debtor, as well as recommendations and financial/business assessments regarding issues specifically related to Debtor. The Debtor paid CPA Luis R. Carrasquillo a $30,000 retainer, against which the Firm will bill the Debtor its regular hourly rates. The regular hourly rates of the firm are: CPA Luis R. Carrasquillo $160 per hour CPA Marcelo Gutierrez $125 per hour Other CPA's $90-$125 per hour To the best of the Debtor's knowledge, the Firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Certenejas Incorporado Certenejas Incorporado -- aka Hotel Flor Del Valle, Motel El Eden, Motel Molino Azul, Motel Molino Rojo, Motel Las Palmas, and Motel El Rio -- owns motels or short-term guest houses in Puerto Rico. It filed a Chapter 11 petition (Bankr. D. P.R. Case No. 12-02806) in Old San Juan, Puerto Rico, on April 11, 2012. The Debtor disclosed $27.68 million in assets and $45.29 million in debts as of the Chapter 11 filing. Charles Alfred Cuprill, Esq., serves as the Debtor's counsel. The petition was signed by Luis J. Meaux Vazquez, president. Certenejas Incorporado and three affiliates also sought Chapter 11 bankruptcy protection (Bankr. D. P.R. Case Nos. 09-08470 to 09-08473) on Oct. 2, 2009. The affiliates are Rojoazul Hotel, Inc., Jonathan Corporation, and Silvernugget Development Corporation. According to the schedules filed in the 2009 case, Certenejas Incorporado had total assets of $13,800,000, and total debts of $41,596,637. The petition was signed by Luis J. Meaux Vazquez, the Company's president. CERTENEJAS INC: Can Hire Charles Cuprill as Attorney ---------------------------------------------------- The Bankruptcy Court authorized Certenejas Incorporado to employ Charles A. Cuprill, P.S.C., Law Offices, as attorney for the Debtor. The Debtor said it has made careful and diligent inquiry into the qualifications and connections of Charles A. Cuprill, P.S.C., Law Offices, and has found that the law firm and its members to be duly qualified to represent Debtor in the proceedings by reason of their ability, integrity and professional experience. The Debtor has paid the firm a $30,000 retainer. As compensation, the law firm will bill the Debtor $350 per hour, plus expenses, for work performed or to be performed by Charles A. Cuprill- Hernandez, Esq. In addition, other professionals may be needed in performing services to the Debtor. The regular rates of the Firm's professionals are: Senior Associates $250 per hour Junior Associates $150 per hour Paralegals $85 per hour To the best of the Debtor's knowledge, the Firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Certenejas Incorporado Certenejas Incorporado -- aka Hotel Flor Del Valle, Motel El Eden, Motel Molino Azul, Motel Molino Rojo, Motel Las Palmas, and Motel El Rio -- owns motels or short-term guest houses in Puerto Rico. It filed a Chapter 11 petition (Bankr. D. P.R. Case No. 12-02806) in Old San Juan, Puerto Rico, on April 11, 2012. The Debtor disclosed $27.68 million in assets and $45.29 million in debts as of the Chapter 11 filing. Charles Alfred Cuprill, Esq., serves as the Debtor's counsel. The petition was signed by Luis J. Meaux Vazquez, president. Certenejas Incorporado and three affiliates also sought Chapter 11 bankruptcy protection (Bankr. D. P.R. Case Nos. 09-08470 to 09-08473) on Oct. 2, 2009. The affiliates are Rojoazul Hotel, Inc., Jonathan Corporation, and Silvernugget Development Corporation. According to the schedules filed in the 2009 case, Certenejas Incorporado had total assets of $13,800,000, and total debts of $41,596,637. The petition was signed by Luis J. Meaux Vazquez, the Company's president. CERTENEJAS INC: Sec. 341(a) Creditors' Meeting Set for May 21 ------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of creditors of Certenejas Incorporado on May 21, 2012, at 9:00 a.m. The meeting will be held at 341 Meeting Room, Ochoa Building, 500 Tanca Street, First Floor, San Juan. 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. Government Proofs of Claim is due by Oct. 15, 2012. Certenejas Incorporado -- aka Hotel Flor Del Valle, Motel El Eden, Motel Molino Azul, Motel Molino Rojo, Motel Las Palmas, and Motel El Rio -- owns motels or short-term guest houses in Puerto Rico. It filed a Chapter 11 petition (Bankr. D. P.R. Case No. 12-02806) in Old San Juan, Puerto Rico, on April 11, 2012. The Debtor disclosed $27.68 million in assets and $45.29 million in debts as of the Chapter 11 filing. Charles Alfred Cuprill, Esq., serves as the Debtor's counsel. The petition was signed by Luis J. Meaux Vazquez, president. Certenejas Incorporado and three affiliates also sought Chapter 11 bankruptcy protection (Bankr. D. P.R. Case Nos. 09-08470 to 09-08473) on Oct. 2, 2009. The affiliates are Rojoazul Hotel, Inc., Jonathan Corporation, and Silvernugget Development Corporation. According to the schedules filed in the 2009 case, Certenejas Incorporado had total assets of $13,800,000, and total debts of $41,596,637. The petition was signed by Luis J. Meaux Vazquez, the Company's president. CGO ENTERPRISE: Marijuana Grower Files for Bankruptcy in Denver --------------------------------------------------------------- Katy Stech, writing for Dow Jones' Daily Bankruptcy Review, reports that a medical marijuana grower called CGO Enterprise filed for Chapter 11 bankruptcy in Denver, Colorado. According to DBR, assets include $130,000 worth of unharvested marijuana leaves. CGO Enterprises said it owes about $800,000 to its landlord, which has moved to evict it for nonpayment. The report notes Colorado has helped lead the state-by-state charge to license, regulate and tax the medical marijuana industry, though it's doing so under the disapproving watch of the U.S. Drug Enforcement Agency. The federal government still considers the substance to be very illegal. DBR says it's unclear what CGO is trying to accomplish in bankruptcy court. Its attorney declined to comment. DBR also notes CGO Enterprise doesn't even appear to be recognized one of the Colorado's 865 licensed "cultivators." A spokeswoman for the Colorado Department of Revenue's medical marijuana enforcement division said a business entity that shares the same warehouse address as CGO Enterprise was denied a license last November. CHARMING SHOPPES: S&P Puts 'B-' CCR on Watch Pos on Proposed Sale ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Bensalem, Pa.-based Charming Shoppes Inc., including its 'B-' corporate credit rating and its 'B-' issue-level rating on the company's convertible notes, on CreditWatch with positive implications. The CreditWatch placement follows the announcement that Ascena Retail Group Inc. (unrated) intends to acquire Charming Shoppes in a cash transaction valued at $890 million. "In our view, the transaction could strengthen Charming's financial risk profile," said Standard & Poor's credit analyst Diya Iyer. "We expect the company's estimated $140 million in convertible notes will be repaid at par by the transaction's close, which is likely to be in the second calendar quarter of 2012. Ascena had no long-term balance-sheet debt as of Jan. 28, 2012, and the consummation of the deal is not subject to financing. As such, Ascena appears to have a stronger financial risk profile. Ascena has obtained commitments that, together with cash on hand, will be sufficient to fund the transaction," S&P said. "As of Jan. 28, 2012, we calculated Charming's operating lease- adjusted debt to EBITDA at 4.8x. Ascena is a growing retailer of women's and teenage apparel and we anticipate potential to improve Charming's Fashion Bug and Lane Bryant stores. Currently, we view Charming's business risk profile as 'vulnerable' and its financial risk profile as 'highly leveraged," S&P said. "The CreditWatch placement reflects our expectation that we could raise our corporate credit rating on Charming as a result of the announced transaction. Subsequently, we would expect to withdraw those ratings," S&P said. CHEF SOLUTIONS: Joint Liquidation Plan Confirmed ------------------------------------------------ Judge Kevin Gross of the Bankruptcy Court for the District of Delaware confirmed the joint plan of liquidation filed by Food Processing Liquidation Holdings LLC and its affiliates. All objections to the Plan that are not withdrawn are overruled. Class 3 (General Unsecured Claims) which is the only impaired claims entitled to vote under the Plan, voted to accept the plan with 92.93% of the total amount of claims. The plan projected to give unsecured creditors with $32 million in claims a recovery between 0.5% and 5%. Additionally, no equity interests will receive distribution under the plan. About Chef Solutions Chef Solutions, through subsidiary Orval Kent Food, was 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. The Debtor was renamed to Food Processing Liquidation Holdings LLC, following the sale of most of the assets to RMJV, L.P., a joint venture between Mistral Capital Management LLC and Reser's Fine Foods Inc. In addition to debt assumption, the price included $35.9 million in cash to pay off secured debt plus a $25.3 million credit bid. The Debtors entered into an asset purchase agreement with RMJV on the Petition Date. On Nov. 15, 2011, the Court approved the APA and the sale, and on Nov. 21, the sale closed. 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. CHINA TEL GROUP: Amends 104.9MM Class A Shares Offering Prospectus ------------------------------------------------------------------ VelaTel Global Communications, Inc., formerly known as China Tel Group Inc., filed with the U.S. Securities and Exchange Commission an amended Form S-3 relating to the registration of 104.9 million shares of Series A common stock. Te Company's shares are quoted on the OTC Markets Group, Inc.'s electronic quotation system. The trading symbol for the Company's Shares is "VELA." The reported closing sale price of the Company's Shares utilized in this Prospectus is on April 27, 2012. The reported "closing sale price" on that date was $0.0224 per Share. The transfer agent and registrar for the Company's common stock is Aspen Stock Transfer Agency, Inc., located at 6623 Las Vegas Boulevard South, Suite 255, Las Vegas, Nevada 89119. Aspen's telephone number is (702) 463-8832. A copy of the amended prospectus is available for free at: http://is.gd/2W2owj About China Tel Based in San Diego, California, and Shenzhen, China, China Tel Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/-- provides high speed wireless broadband and telecommunications infrastructure engineering and construction services. Through its controlled subsidiaries, the Company provides fixed telephony, conventional long distance, high-speed wireless broadband and telecommunications infrastructure engineering and construction services. ChinaTel is presently building, operating and deploying networks in Asia and South America: a 3.5GHz wireless broadband system in 29 cities across the People's Republic of China with and for CECT-Chinacomm Communications Co., Ltd., a PRC company that holds a license to build the high speed wireless broadband system; and a 2.5GHz wireless broadband system in cities across Peru with and for Perusat, S.A., a Peruvian company that holds a license to build high speed wireless broadband systems. The Company, in the untimely filed Form 10-K, reported a net loss of $21.79 in 2011, compared with a net loss of $66.62 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $12.83 million in total assets, $22.76 million in total liabilities and a $9.92 million total stockholders' deficiency. After auditing the 2011 results, Kabani & Company, Inc., in Los Angeles, California, expressed substantial doubt as to the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred a net loss for the year ended Dec. 31, 2011, cumulative losses of $253,660,984 since inception, a negative working capital of $16,386,204 and a stockholders' deficiency of $9,928,838. CIRCUS AND ELDORADO: Has Until May 14 to Finalize Restructuring --------------------------------------------------------------- Bill O'Driscoll at RGJ.com reports that the deadline for finalizing the Silver Legacy Resort Casino's $142.8 million debt restructuring agreement has been extended again, this time to May 14. According to the report, Gary Carano, CEO of Circus and Eldorado Joint Venture, owner of the downtown Reno high-rise, declined to give details but said progress continues in discussions with the largest bondholder and the hotel-casino continues to generate revenue. "This extension will allow us additional time to work towards a positive plan to restructure our debt," the report quotes Mr. Carano as saying. "Additionally, we are continuing 'business as usual' at Silver Legacy through this process." The extension follows Mr. Carano's March 19 announcement of a support agreement with creditors, with an April 30 deadline for finalizing, on the mortgage note originally due March 1. Under the terms, the Silver Legacy's creditors would receive $100 million in cash paid with a new $70 million Silver Legacy loan, $15 million from Silver Legacy balance sheet cash and $15 million split between the joint venture's partners. The report notes Circus and Eldorado Joint Venture first filed notice with the Securities and Exchange Commission on Feb. 6 of its intent to restructure the entiredebt. The filing cited the Silver Legacy auditor's doubt about its ability to continue as a going concern if the restructuring fails. The report, citing documents filed in the Securities and Exchange Commission, notes its owners took out a $160 million mortgage at 10.125% interest payable in full on March 1, 2012, About Circus and Eldorado Reno, Nevada-based Circus and Eldorado Joint Venture, doing business as Silver Legacy Resort Casino, owns and operates the Silver Legacy Resort Casino, a themed hotel-casino and entertainment complex in Reno, Nevada. Silver Legacy Resort Casino is a 35-story, 1,700-room hotel that opened in 1995 at a cost of $350 million. CEJV is a joint venture of affiliates of MGM Resorts International and Eldorado Resorts LLC. CEJV reported a net loss of $4.0 million on $95.6 million of revenues for nine months ended Sept. 30, 2011, compared with a net loss of $3.7 million on $95.1 million of revenues for the same period last year. CEJV's balance sheet at Sept. 30, 2011, showed $267.8 million in total assets, $165.4 million in total liabilities, and partners' equity of $102.4 million. The Company did not make the required principal payment of its 10.125% mortgage notes on the maturity date of March 1, 2012. The company also elected not to make the scheduled interest payment. As a result, an aggregate of $142,800,000 principal amount of Notes were outstanding and accrued interest of $7,229,250 on the Notes, as of March 1, 2012, is due and payable. * * * In March 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on Circus and Eldorado Joint Venture and its issue-level rating on CEJV's $143 mortgage notes, to 'D' from 'CCC-'. The rating action followed CEJV's failure to repay the principal on its mortgage notes at maturity. Also in March 2012, Moody's Investors Service lowered Circus and Eldorado Joint Venture's Probability of Default Rating to D from Ca. "The rating action stems from CEJV's inability to successfully repay the principal on its mortgage notes, due March 1, 2012, which constitutes a default under the terms of the notes' indenture. CEJV is in continuing discussions with potential financing sources and the holders of the notes regarding a restructuring of its obligations under the notes and has entered into a forbearance agreement with a substantial holder of the outstanding notes," S&P said. CIVIL BUILDING: Case Summary & Largest Unsecured Creditor --------------------------------------------------------- Debtor: Civil Building Company Stam c/o Sonja Tremont-Morgan 162 E. 63rd Street New York, NY 10065 Bankruptcy Case No.: 12-11829 Chapter 11 Petition Date: May 1, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: J. Ted Donovan, Esq. GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP 1501 Broadway, 22nd Floor New York, NY 10036 Tel: (212) 221-5700 Fax: (212) 422-6836 E-mail: TDonovan@GWFGlaw.com Scheduled Assets: $6,094,305 Scheduled Liabilities: $1,346,670 The petition was signed by Sonja Tremont-Morgan, manager. The Company's list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ UGGC ? Adocats A La Cour Fees $6,670 7 Rue de Monceau Paris, France 75008 Affiliate that previously filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Sonja Tremont-Morgan 10-16132 11/17/10 CLARK SPECIALTY: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Clark Specialty Co. Inc. 8440 State Route 54 Hammondsport, NY 14840 Bankruptcy Case No.: 12-20771 Chapter 11 Petition Date: May 1, 2012 Court: U.S. Bankruptcy Court Western District of New York (Rochester) Judge: Paul R. Warren Debtor's Counsel: Mark A. Weiermiller, Esq. COOPER, PAUTZ & WEIERMILLER, LLP 2854 Westinghouse Road Horseheads, NY 14845 Tel: (607) 739-8763 E-mail: mweiermiller@cpwlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/nywb12-20771.pdf The petition was signed by James L. Presley, president. CLEAR CHANNEL: Bank Debt Trades at 18% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Clear Channel Communications, Inc., is a borrower traded in the secondary market at 82.00 cents-on-the-dollar during the week ended Friday, May 4, 2012, an increase of 1.93 percentage points from the previous week, according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 365 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 30, 2016, and carries Moody's 'Caa1' rating and Standard & Poor's 'CCC+' rating. The loan is one of the biggest gainers and losers among 162 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Clear Channel San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) -- http://www.ccmediaholdings.com/-- is the parent company of Clear Channel Communications, Inc. CC Media Holdings is a global media and entertainment company specializing in mobile and on-demand entertainment and information services for local communities and premier opportunities for advertisers. The Company's businesses include radio and outdoor displays. Clear Channel reported a net loss of $302.09 million on $6.16 billion of revenue in 2011, compared with a net loss of $479.08 million on $5.86 billion of revenue in 2010. The Company had a net loss of $4.03 billion on $5.55 billion of revenue in 2009. The Company's balance sheet at Dec. 31, 2011, showed $16.54 billion in total assets, $24.01 billion in total liabilities and a $7.47 billion total member's deficit. * * * The Troubled Company Reporter said on Feb. 10, 2012, Fitch Ratings has affirmed the 'CCC' Issuer Default Rating of Clear Channel Communications, Inc., and the 'B' IDR of Clear Channel Worldwide Holdings, Inc., an indirect wholly owned subsidiary of Clear Channel Outdoor Holdings, Inc., Clear Channel's 89% owned outdoor advertising subsidiary. The Rating Outlook is Stable. Fitch's ratings concerns center on the company's highly leveraged capital structure, with significant maturities in 2014 and 2016; the considerable and growing interest burden that pressures free cash flow; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. CNO FINC'L: Moody's Reviews 'B1' Sr. Sec. Ratings for Downgrade --------------------------------------------------------------- Moody's Investors Service has placed the ratings of CNO Financial Group's (CNO, NYSE: CNO, senior secured at B1) on review for upgrade. In addition, Moody's placed the Ba1 insurance financial strength (IFS) ratings of CNO's primary life insurance subsidiaries (except as noted below) on review for possible upgrade. Ratings Rationale In commenting on the review for upgrade, Moody's Vice President and Senior Credit Officer, Ann Perry, said: "The review for upgrade of CNO's credit ratings reflects the substantial headway that the company has made in improving its financial profile and in enhancing its risk management." Moody's commented that the review will focus on the company's financial flexibility, which has been strengthened by the company's actions to reduce debt and to improve holding company liquidity. The review will also assess the company's profitability and capital adequacy given the stabilized and improving operating performance of the life insurance subsidiaries as reflected in gradually increasing sales and stronger operating earnings. The rating agency said the review will also consider CNO's recently announced tentative settlement of class action litigation relating to non-guaranteed elements (NGE) of a closed block of life insurance. Resolution of the class action litigation would be a credit positive as it would reduce the potential for future charges. As part of the rating action, Moody's also affirmed the Ba1 IFS rating (stable outlook) of Conseco Life Insurance Company (CLIC). CLIC's operations consist primarily of a closed block of life insurance, a portion of which has been the object of class action litigation. The company, which Moody's considers "non-core", no longer writes new business and is managed at a capital level considerably below that of CNO's main operating life insurance subsidiaries. As a result, the rating agency said that CLIC's rating has been affirmed, while the other operating subsidiaries are being reviewed for upgrade. According to Moody's, the following could result in an upgrade of CNO's and its operating subsidiaries' (other than CLIC) ratings: sustained annual run-rate consolidated statutory EBIT of at least $150 million; a sustained NAIC RBC ratio on a consolidated basis consistently above 300%. Conversely, the following could result in a confirmation of CNO's and its operating subsidiaries' (except for CLIC) ratings with a stable outlook: statutory EBIT of less than $150 million; adjusted earnings coverage of less than five times; and a consolidated NAIC RBC ratio (without diversification benefit) of less than 300%. Given CLIC's effective runoff status and low capitalization, an upgrade is unlikely. CLIC's ratings could be downgraded if: the NAIC RBC ratio falls below 150% or the company is unable to implement price increases in the block of NGE-related business. The following ratings have been placed on review for upgrade: CNO Financial, Inc. -- senior secured debt at B1 and senior unsecured debt at B2; Bankers Life and Casualty Company -- insurance financial strength rating at Ba1; Colonial Penn Life Insurance Company -- insurance financial strength rating at Ba1; Washington National Life Insurance Company -- insurance financial strength rating at Ba1. The following rating was affirmed with a stable outlook: Conseco Life Insurance Company -- insurance financial strength rating at Ba1. CNO Financial Group is a specialized financial services holding company that operates primarily in the life and health insurance sectors through its subsidiaries. As of March 31, 2012, CNO, which is headquartered in Carmel, Indiana, reported total assets of approximately $33 billion and shareholders' equity of $4.7 billion. The principal methodology used in this rating was Moody's Rating Methodology for U.S. Life Insurers published in May 2010. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations. COGENT COMMUNICATIONS: Dividend No Impact on Moody's 'Caa1' CFR --------------------------------------------------------------- Cogent Communications Group, Inc.'s announcement on May 3 that its board authorized a recurring common dividend does not impact either the Company's Caa1 Corporate Family Rating (CFR), B2 Senior Secured Rating, Speculative Grade Liquidity rating of SGL-2, or the stable outlook. The principal methodology used in rating Cogent Communications Group Inc was the Global Communications Infrastructure Rating 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. Cogent Communications, with headquarters in Washington, DC, is a multinational Tier 1 Internet service provider. The company offers Internet access and data transport over its fiber optic, IP network. Cogent also offers colocation via 43 Internet Data Centers and serves business and service provider companies with Ethernet-over-fiber services for Internet access. The Company generated $309 million in revenues for the last four quarters ending 3/31/2012. COLLECTIVE BRANDS: S&P Puts 'B' CCR on Watch Neg on Proposed Sale ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Topeka, Kansas-based Collective Brands Inc., including its 'B' corporate credit rating, 'B+' senior secured term loan rating, and 'CCC+' subordinated debt rating, on CreditWatch with negative implications. "The CreditWatch placement follows the announcement that unrated Wolverine Worldwide, Blum Capital Partners, and Golden Gate Capital intend to acquire Collective for about $2 billion, including the assumption of debt. The three buyers have formed an acquisition company to purchase the footwear retailer and wholesaler. Ultimately, Wolverine will acquire Collective's Performance and Lifestyle Group, which includes the wholesale and retail operations of the Sperry Top-Sider, Keds, Stride Rite, and Saucony brands. Blum and Golden Gate will jointly acquire the Payless ShoeSource and Collective Licensing International units, which together will operate as a stand-alone entity," S&P said. "In our view, the transaction will potentially weaken Collective's financial risk profile through the addition of a meaningful amount of debt with one or more of the buyers," said Standard & Poor's credit analyst Diya Iyer. "As of Jan. 28, 2012, we calculated operating lease-adjusted debt to EBITDA at 5x. Collective's existing debt includes change of control provisions that will likely result in repayment of the term loan and notes by the transaction's close, likely in the third or fourth quarter of this calendar year." "However, as part of the transaction, Wolverine plans to finance the deal with a $900 million term loan, a $375 million bridge loan, and a $200 million revolver that will be undrawn at close. The financing for Blum and Golden Gate has not been disclosed. Currently, we view Collective's business risk profile as 'weak' and its financial risk profile as 'aggressive,'" S&P said. "We expect that any change in the rating would be limited to one notch from the current 'B' corporate credit rating. Upon repayment of the existing debt, we would expect to withdraw our ratings on Collective," S&P said. COLT DEFENSE: Moody's Puts 'Caa1' CFR Under Review for Downgrade ---------------------------------------------------------------- Moody's Investors Service has placed all ratings, including the Caa1 corporate family rating, of Colt Defense LLC under review for downgrade. The review is prompted by the recent loss of the five- year M4 carbine contract with the U.S. Army to Remington Arms Company, LLC. The aforementioned IDIQ (indefinite delivery/indefinite quantity) contract to Remington includes supplying up to 120,0000 M4/M4A1 carbines, worth $84 million over the term of the contract. The current SGL rating remains SGL-2, reflecting good liquidity supported by a $29 million cash balance, anticipated roughly breakeven free cash flow, no near-term debt maturities and no borrowings under the company's ABL facility as of April 1, 2012. Moody's has taken the following ratings actions: On Review for Downgrade: Issuer: Colt Defense LLC Corporate Family Rating, Placed on Review for Downgrade, currently Caa1 Probability of Default Rating, Placed on Review for Downgrade, currently Caa1 Senior Unsecured Regular Bond/Debenture, Placed on Review for Downgrade, currently Caa1 Outlook Actions: Issuer: Colt Defense LLC Outlook, Changed To Rating Under Review From Stable Ratings Rationale The review will include the analysis of the magnitude and impact of lost revenue and cash flow from loss of the M4 carbine contract, discussions with management on the extent of offsets in terms of royalties or other source of income from the company's historical ownership of the M4 carbine technical data package, and an assumption for Colt's foreign military sales done via the U.S. government. Further, Moody's will assess the current Defense industry budget pressures and consider the adequacy of Colt Defense's initiatives to diversify the company's revenue stream thereby affecting the company's ability to maintain credit metrics consistent with the assigned ratings. As part of the review Moody's will consider Colt Defense's liquidity profile, the company's ability to adapt its business to the current defense spending environment and potential for longer-term improvement in financial metrics that could facilitate confirmation of the Caa1 rating. However, evidence of further erosion of financial metrics or indications of weakening liquidity could result in a rating downgrade. In Moody's opinion, the loss of the US Army M4 carbine contract to Remington represents a significant setback to Colt Defense. The company had historically possessed M4 sole supplier status with its largest customer, the U.S. Army. The M4 carbine is the U.S. Army's standard issue rifle. Moody's does note however that although the U.S. Army remains Colt's main customer, the company has become less dependent on sales to the U.S. government evidenced by sales to the government comprising 33% of fiscal 2011 sales versus roughly 60% in fiscal 2009 and first quarter 2012 sales reportedly not incorporating any M4 carbine sales. The principal methodology used in rating Colt Defense LLC was the Global Aerospace and Defense Industry Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Colt Defense LLC, headquartered in West Hartford, Connecticut, manufactures small arms including the M4 carbine and M16 rifle for the U.S. military, U.S. law enforcement agencies, and foreign militaries. Revenues for the last twelve months ended April 1, 2012, totaled $205 million. COMMERCIAL MANAGEMENT: Case Summary & Creditors List ---------------------------------------------------- Debtor: Commercial Management, LLC dba Buena Vista 6860 Shingle Creek Parkway, Suite A217 Brooklyn Center, MN 55430 Bankruptcy Case No.: 12-42676 Chapter 11 Petition Date: May 2, 2012 Court: U.S. Bankruptcy Court District of Minnesota (Minneapolis) Judge: Nancy C. Dreher About the Debtor: Commercial Management, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101 (51B), does business as Buena Vista Apartments, and owns the property at 6860 Shingle Creek Parkway, in Brooklyn Center, Minnesota. Debtor's Counsel: Neil P. Thompson, Esq. NEIL P. THOMPSON 2249 East 38th Street Minneapolis, MN 55407 Tel: (612) 246-4788 Fax: (612) 728-3873 E-mail: nptrxlaw@gmail.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Jeffrey J. Wirth, sole member. Affiliates that previously filed separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Jeffrey J. Wirth 12-42368 04/11/12 Palmer Lake Plaza, LLC 12-42266 03/06/12 Tomah Hospitality, LLC 12-10894 02/23/12 Tomah Hotel Properties, LLC 12-10895 02/23/12 Commercial Management's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ City of Richfield Utility $47,778 6700 Portland Avenue South Richfield, MN 55423-2599 Centerpoint Energy Minnegasco Utility $38,629 P.O. Box 1144 Minneapolis, MN 55440-1144 Renovation Systems Trade Debt $10,174 2735 Cheshire Lane North Plymouth, MN 55447 Fireman's Fund Insurance Insurance $5,892 Home Depot Supply Facilities Trade Debt $5,243 Xcel Energy Utility $4,804 Allied Waste Services #894 Trade Debt $3,632 HSBC Business Solutions Trade Debt $3,021 Latino Communications Network Trade Debt $2,400 Hirshfield's Lathrop Paint Trade Debt $2,305 B&E Pest Control Trade Debt $2,203 Best Service, LLC Trade Debt $2,060 Fabulous Service, Inc. Trade Debt $2,004 Aavalon Carpet Restoration Svc Trade Debt $1,945 Appliance Depot, Inc. Trade Debt $1,921 M&A Painting, Inc. Trade Debt $1,815 WUMN-TV Trade Debt $1,650 White Bear Glass Trade Debt $1,432 Midwest Latino Media Group Trade Debt $900 Velocity Drain Services Trade Debt $73 COMMERCIAL VEHICLE: Reports $11.9 Million Net Income Q1 ------------------------------------------------------- Commercial Vehicle Group, Inc., reported net income of $11.99 million on $236.99 million of revenue for the three months ended March 31, 2012, compared with net income of $3.27 million on $182.51 million of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $437.09 million in total assets, $409.29 million in total liabilities and $27.80 million in total stockholders' equity. "We are very pleased with our first quarter results, which represents our twelfth consecutive quarter of operating income improvement, when excluding impairment and restructuring charges, and surpasses the fourth quarter of 2011 as our highest revenue and operating income levels since the fourth quarter of 2006. Our results reflect our continued focus on capturing results from our top line growth as well as our commitment to our long-term strategy for growth and diversification," said Mervin Dunn, President and CEO of Commercial Vehicle Group. A copy of the press release is available for free at: http://is.gd/Uj3HPO About Commercial Vehicle Group New Albany, Ohio-based Commercial Vehicle Group, Inc., (Nasdaq: CVGI) supplies fully integrated system solutions for the global commercial vehicle market, including the heavy-duty truck market, the construction and agricultural markets, and the specialty and military transportation markets. The Company has facilities located in the United States in Arizona, Indiana, Illinois, Iowa, North Carolina, Ohio, Oregon, Tennessee, Virginia and Washington and outside of the United States in Australia, Belgium, China, Czech Republic, Mexico, Ukraine and the United Kingdom. * * * In the Oct. 4, 2011, edition of the TCR, Moody's Investors Service upgraded Commercial Vehicle Group, Inc.'s Corporate Family Rating to B2 from B3, and Probability of Default Rating to B2 from B3. The B2 CFR reflects modest size, relatively high debt leverage, and exposure to highly cyclical commercial vehicle end markets. Demand for commercial vehicle components is primarily sensitive to economic cycles, fleet age, and regulatory implementation schedules. The CFR considers the substantial cash balance and absence of funded debt maturities until 2019. Moody's recognizes CVGI's demonstrated ability to manage its cost structure and working capital position to minimize cash burn in a challenging economic environment. Moody's believes the company is positioned to benefit from additional modest improvement in commercial vehicle build rates at least through mid 2012 and has sufficient liquidity to support associated working capital needs. As reported by the TCR on Jan. 30, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on New Albany, Ohio- based Commercial Vehicle Group Inc. (CVG) to 'B' from 'B-'. "The upgrade reflects the progress made by CVG during the past two years of North American commercial vehicle production expansion to improve revenues, EBITDA, and leverage," said Standard & Poor's credit analyst Nancy Messer. "We believe that for 2011, CVG will have reduced lease-adjusted leverage to below 5x and earned adjusted EBITDA of about $67 million. We expect free cash flow in 2012 to break even or move into positive territory." COMMUNITY HEALTH: Fitch Upgrades Issuer Default Rating to 'B+' -------------------------------------------------------------- Fitch Ratings has upgraded Community Health Systems' ratings, including the Issuer Default Rating (IDR) to 'B+' from 'B'. The Rating Outlook is Stable. The ratings apply to approximately $9.3 billion of debt at March 31, 2012. The 'B+' IDR Primarily Reflects -- Community's financial flexibility has improved in recent years. Debt-to-EBITDA dropped to around 5.0 times (x) at March 31, 2012 from 5.8x in 2008, the year immediately following the $6.9 billion acquisition of Triad Hospitals. -- Liquidity is solid. The company generated free cash flow (FCF; cash from operations less dividends and capital expenditures) of about $454 million in the latest 12 months (LTM) ended March 31, 2012, and 2012-2013 debt maturities are small. Fitch expects Community to continue to prioritize hospital acquisitions as a use of cash. -- Organic operating trends in the for-profit hospital industry are weak and Fitch expects them to remain so throughout 2012. In the near term, Community's growth will be supported by its recent hospital acquisitions. -- Community's patient admission policies and associated billing practices are facing heightened regulatory scrutiny and there is ongoing uncertainty about any potential financial or operating impact. Solid Financial Flexibility Community's debt leverage has declined since the approximately $6.9 billion debt funded acquisition of Triad Hospitals in 2007. Since the acquisition, Community has generated about $1.9 billion in cumulative FCF and has applied about $300 million for debt reduction. Total debt-to-EBITDA has dropped to about 5.0x at March 31, 2012 versus around 5.8x post the acquisition. The reduction in leverage is about 50% attributable to a lower outstanding debt balance and 50% to growth in EBITDA. At March 31, 2012, debt-to-EBITDA was increased by about 0.2x versus the 2011 year end level of 4.8x, due to debt proceeds in the first quarter of 2012 (1Q'12) which were used in part to fund the company's recent acquisitions. At March 31, 2012, Fitch calculates debt leverage through the secured bank debt of 3.3x and 5.0x through the senior unsecured notes. The company's bank agreement requires total debt maintained below 5.5x EBITDA and interest coverage of at least 2.25x EBITDA. At March 31, 2012, the company had an adequate operating cushion under the covenants. Fitch does not anticipate Community to apply cash to meaningful debt reduction during 2012. Any incremental drop in leverage is expected to be nominal and to depend upon growth in EBITDA. Maintenance of the 'B+' IDR will depend on total debt-to-EBITDA generally maintained at or below 5.0x. Recent Debt Refinancing Improves Liquidity Profile A favorable debt maturity schedule and good liquidity support the credit profile. Near-term debt maturities include about $35 million and $75 million of annual required principal amortization on the bank term loans in 2012-2013, respectively. The company has recently made progress in extending its maturity profile. Over the past year it has moved a total of $3.75 billion of the $6 billion of bank term loans due 2014 to 2016 and 2017, through the issuance of a new $750 million term loan A due 2016 and two separate amend and extend agreements which pushed out $3 billion of the 2014 term loan B maturities to 2017. The 2016 and 2017 term loan maturity dates are contingent upon the refinancing of the non-extended portion of term loan B due July 2014 and the senior notes due July 2015. Community refinanced $1.9 billion of the $2.8 billion 2015 notes with new notes due 2019 in 4Q'11 and 1Q'12. There are about $930 million of remaining notes due 2015 and the non-extended portion of term loan B maturing 2014 is currently about $2.2 billion. Community's liquidity was provided by approximately $129 million of cash and marketable securities at March 31, 2012, availability on the company's $750 million bank revolver ($712.3 million available at March 31, 2012 reduced for outstanding letters of credit), and FCF of about $453 million for the LTM ended March 31, 2012. Community generates solid cash flow relative to its operating and reinvestment requirements. Fitch projects FCF sustained above $300 million annually. The lower level of forecasted FCF is primarily based on Fitch's expectation of higher capital expenditures and cash taxes. Fitch expects that Community will continue to prioritize use of cash for hospital acquisitions. Community stepped up its acquisition activity in 2011, spending $415 million to complete four transactions during the year. The company states that its 2011 acquisitions represent about $400 million of annual revenue. Since the start of 2012, Community has completed three additional acquisitions, including two hospital acquisitions and an acquisition of outpatient diagnostic clinics. The two hospital acquisitions are expected to contribute $360 million of annual revenue. Combined, the company's 2011 and year-to-date 2012 hospital acquisitions represent about 6% of the company's 2010 revenues of $13 billion. Weak Organic Operating Trends Community's organic patient volume growth lagged the broader for- profit hospital provider industry in 2011. Across the Fitch-rated group of for-profit hospital providers, same-hospital admissions declined 1.6% on average in 2011 while same-hospital adjusted admissions (a measure that is adjusted for outpatient activity) grew by just 0.4%. Community's same hospital admissions were down 5.6%, and adjusted admissions down 0.7%. Community's organic operating trend did show some improvement in 1Q'12. The company's same hospital admissions declined 2.3% year-over-year, while adjusted admissions were up 2.5%. This is the company's first quarter of positive organic volume growth in eight consecutive quarters. Despite its recently weak organic patient volume trend, Community has not lagged its peers in top-line and EBITDA growth. Strong pricing and an active hospital acquisition strategy have supported revenue and EBITDA growth. Community has managed to achieve consistent incremental growth in EBITDA in recent periods despite the margin impacts of integrating less profitable acquired hospitals. The 13.4% EBITDA margin in 2011 was only down about 18 basis points (bps) from the 2010 level. Since there is no apparent catalyst for near-term improvement in organic patient volumes, Fitch thinks Community's volume trends will remain weak in 2012, although the 1Q'12 levels showed some improvement. Trends that indicate higher levels of structural unemployment and growth in the consumer share of healthcare spending support an expectation of weak organic volume trends in the sector for some time to come. Continued strength in pricing will be critical to maintenance of profitability. There some concerning headwinds to the pricing outlook, particularly in government reimbursement rates (Medicare and Medicaid payors). Heightened Regulatory Scrutiny Community's patient admission policies and associated billing practices have recently been the subject of heightened regulatory scrutiny. There is ongoing uncertainty about the potential for financial liability with respect to past Medicare billing practices or a reduction in the company's revenues and EBITDA resulting from changes in admissions practice. The regulatory issues will take some time to resolve and in the interim period, there is the concern that a reputational issue associated with the governmental inquires could negatively affect operations. However, this does not appear to be the case in recent periods. Organic patient volume trends improved somewhat in 1Q'12, the company is showing strong results in physician recruitment, and it has not been hindered in its acquisition activity. Guidelines for Further Rating Actions Maintenance of a 'B+' IDR for Community would be consistent with financial and credit metrics maintained at the current levels, including total debt-to-EBITDA at or below 5.0x and annual FCF generation above $300 million. Given the company's currently solid level of financial flexibility, Fitch thinks that downward pressure on the ratings is unlikely outside of event risk surrounding an acquisition or any potential financial liability stemming from the regulatory issues facing the company. Community has demonstrated that it will consider large acquisitions, as evidenced by the $6.9 billion Triad Hospitals acquisition in 2007 and its December 2010 bid to acquire Tenet Healthcare Corp. Fitch expects though that in the near term Community will probably continue to focus its acquisition efforts on smaller transactions that can be primarily cash funded. Debt Issue Ratings Fitch has taken the following rating actions on Community: -- IDR upgraded to 'B+' from 'B'; -- Senior secured credit facility upgraded to 'BB+/RR1' from 'BB/RR1'; -- Senior unsecured notes affirmed at 'B', recovery rating revised to 'RR5' from 'RR4'. The recovery ratings (RR) reflect Fitch's expectation that the enterprise value of Community will be maximized in a restructuring scenario (going concern), rather than a liquidation. Fitch uses a 6.5x distressed enterprise value (EV) multiple and stresses LTM EBITDA by 30%, considering post restructuring estimates for interest and rent expense and maintenance level capital expenditure as well as debt financial maintenance covenant requirements. The affirmation of the unsecured notes rating at 'B' despite the upgrade of the IDR is based on a lower estimated distressed EV multiple. In previous recovery analysis for Community, Fitch assigned a 7.0x multiple. The 6.5x multiple is based on recent acquisition multiples in the healthcare provider space as well as the recent trends in the public equity valuations of the for- profit hospital providers. Fitch estimates Community's distressed enterprise valuation in restructuring to be approximately $8.3 billion. The 'BB+/RR1' rating for the bank facility reflects Fitch's expectations for 100% recovery under a bankruptcy scenario. The 'B/RR5' rating on the unsecured notes rating reflects Fitch's expectations for recovery in the 11%-31% range. CONGRESSIONAL HOTEL: Writ of Garnishments on Propertly Lifted ------------------------------------------------------------- Bankruptcy Judge Paul Mannes approved a stipulation and consent order providing: -- for the dismissal of the avoidance action, Congressional Hotel Corporation, v. Mervis Diamond Corporation et al., Adv. Proc. No. 12-00040 (D. Md.); and -- that the Writ of Garnishments of the Debtor's property issued by the Circuit Court of Maryland for Montgomery County in the case captioned Mervis Diamond Corporation v. Congressional Hotel Corporation, Case No. 259919-V, at Mervis' request, upon Wells Fargo Bank, National Association, SunTrust Bank and Interstate Management, LLC, will be avoided; and -- that Wells Fargo, SunTrust and Interstate Management are authorized to immediately release to the Debtor property subject to the Writ of Garnishment. A copy of the May 2, 2012 Stipulation and Consent Order is available at http://is.gd/iAk7XBfrom Leagle.com. About Congressional Hotel and CASCO Hotel Group Casco Hotel Group, LLC, owns the Legacy Hotel in Rockville, Maryland. Congressional Hotel Corporation is a holdover tenant on the Property and manages the Property on behalf of CASCO. The hotel was previously known as Ramada Inn. Congressional Hotel filed for Chapter 11 relief (Bankr. D. Md. Case No. 11-26732) on Aug. 15, 2011. CASCO filed for Chapter 11 relief (Bankr. D. Md. Case No. 11-26880) two days later. CASCO is a single-asset real estate company. It declared assets and liabilities each in the range of $10 million to $50 million. Congressional Hotel scheduled $709,121 in assets and $19,883,667 in debts. James Greenan, Esq., at McNamee Hosea, represents Congressional Hotel. Congressional Hotel previously filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 09-17901) on May 3, 2009. James Greenan, Esq., at McNamee Hosea represented the Debtor in its restructuring efforts. The 2009 petition estimated the Debtor's assets and debts from $10 million to $50 million. The case was dismissed on May 18, 2011, at the request of creditor Mervis Diamond Corp. But a resolution couldn't be confirmed with Mervis Diamond and other creditors, prompting Congressional Hotel to seek Chapter 11 protection again. The U.S. Trustee said an official committee has not been appointed in the bankruptcy case of Congressional Hotel because an insufficient number of persons holding unsecured claims against the Debtor expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. Congressional Hotel and Casco Hotel Group filed a joint disclosure statement in support of its plan of liquidation dated Feb. 7, 2012. Rockville Hospitality LLC agreed to purchase the Debtors' assets for $19,500,000, less a Mold Remediation Credit of $475,000. For purposes of allocating the Purchase Price between the Debtors' estates, each Debtor is deemed to retain title to its property as the property was titled prior to the termination of the Ground Lease. Accordingly, Casco is selling its right, title and interest in the Land, while CHC is selling its right, title and interest in the remaining Assets. Casco has engaged an appraiser who has valued the Land encumbered by the Ground Lease to be $3,450,000, and the Land unencumbered by the Ground Lease to be $5,700,000. Further Court Order will conclusively determine the value of the Land owned by Casco and therefore the allocation of the proceeds of the sale of the Debtors' Assets. Prior to disbursement of funds pursuant to the Plan, the Court will determine the allocation of the proceeds from the sale of the Debtors' Assets to the Debtors' respective estates. The Plan contemplates, among other things, the payment in full in cash of all Administrative Claims and Priority Tax Claims. General Unsecured Claims against Congressional Hotel will receive a pro rata share of any remaining funds after the payment of all secured, administrative and priority claims. Estimated recovery is yet to be determined, once valuation of the Debtors' respective estates is determined by further Court order. Holders of Equity Interest in Congressional Hotel will be cancelled. The Allowed Secured Claim of Montgomery County, Maryland, will be paid in full at Closing from the proceeds of the sale of the Assets. Estimated recovery is 100%. Equity Interest in Casco Hotel will be cancelled. CONTRACT RESEARCH: Court Extends Cash Collateral Use Until May 10 ----------------------------------------------------------------- The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware has approved a second stipulation and agreement made by and among Contract Research Solutions, Inc., et al., the Official Committee of Unsecured Creditors, the prepetition agents, and DIP agent Freeport Financial LLC, on postpetition secured financing, and access to the cash collateral of the prepetition secured parties. Under the second stipulation, the Debtors, Committee and secured lenders agree that: 1. the interim period set forth in the interim order will be modified to (i) the entry of a final order, and (ii) May 10, 2012; and 2. the final hearing will be modified to May 9, at 10:00 a.m. (prevailing Eastern time), or such later date as scheduled by the Court without any further notice or order. A full-text copy of the second stipulation is available for free at http://is.gd/HCRXpU As reported by the Troubled Company Reporter on May 1, 2012, the Court previously approved a stipulation extending time periods relating to interim order authorizing the Debtors to (i) obtain postpetition secured financing, and (ii) access the cash collateral of the prepetition secured parties. Under the previous stipulation, the interim period set forth in the interim order was modified to (i) the entry of a final order, and (ii) May 2, 2012; and (ii) the final hearing was modified to May 1, at 3:00 p.m. In late March, the Debtors won an interim order authorizing them to obtain postpetition secured financing and utilize cash collateral securing their obligations to the prepetition lenders. The DIP lenders committed to provide up to $15 million under a senior secured, super-priority, non-amortizing revolving credit facility. Under the Interim DIP Order, the Debtors may use up to $2.4 million of the DIP funds. The DIP facility also provides for the roll up of $15 million of US Term Loan B. About Cetero Contract Research Solutions Inc., doing business as Cetero, a provider of early-phase clinical research services for pharmaceutical and biotechnology firms, filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-11004) on March 26, 2012. Cetero's 19 affiliates also sought bankruptcy protection (Bankr. D. Del. Case Nos. 12-11005 to 12-11023). Cetero plans to sell the business, including their rights to pursue avoidance actions, to first-lien secured lenders in exchange for $50 million in debt, absent higher and better offers. Cetero has filed a motion seeking approval of procedures that will govern the bidding and auction. The first-lien lenders have formed entities that will acquire the business -- CSRI Holdings LLC, as U.S. Purchaser, and 0935867 B.C. Ltd and 0935870 B.C. Ltd, as Canadian Purchasers. Together, they will serve as stalking horse bidders and have offered to exchange $50 million in secured debt and assume $30 million in liabilities to buy the assets. First lien lenders are also providing a $15 million loan to finance the Chapter 11 effort. The procedures require that the bidding protocol be approved by April 12 and an auction be held between April 30 and May 5. Competing bids are due three days prior to the auction date. The hearing for approval of the sale must take place prior to May 10. Assets are $205 million, with debt total $248 million. There is $185 million in debt for borrowed money, including $116 million on a first-lien term loan and revolving credit. The second-lien loan is $25 million. Second-lien lenders have agreed to the sale. Freeport Financial LLC serves as the sole lead arranger and bookrunner, and as U.S. administrative agent and collateral agent under the first lien facility. Bank of Montreal serves as the Canadian agent. Freeport is also the agent under the second lien facility. Judge Kevin Gross oversees the case. Lawyers at Young Conaway Stargatt & Taylor, LLP, and Paul Hastings LLP serve as the Debtors' counsel. Stikeman Elliott LLP serves as Canadian counsel. Carl Marks Advisory Group LLC serves as restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. The petitions were signed by Michael T. Murren, CFO. The first lien lenders and the stalking horse buyers are represented by Peter Knight, Esq., at Latham & Watkings, LLP; and Wael Rostom, Esq., at McMillan LLP. Roberta A. Deangelis, U.S. Trustee for Region 3 appointed three persons to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Contract Research Solutions, Inc., et al. CONTRACT RESEARCH: Committee Taps Morris Anderson as Fin'l Advisor ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in the Contract Research Solutions, Inc., et al. bankruptcy case seeks permission from the Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to retain Morris Anderson & Associates, Ltd., as financial advisors, nunc pro tunc to April 9, 2012. Morris Anderson will, among other things: a. analyze the financial operations of the Debtors pre- and post-petition, as necessary; b. analyze the financial ramifications of any proposed transactions for which the Debtors seek court approval including, but not limited to, postpetition financing, sale of all or a portion of the Debtors' assets, retention of management and employee incentive and severance plans; and c. assist and advise the Committee and its counsel in the development, evaluation and documentation of any plan(s), financing or strategic transaction(s) and strategic alternatives for recovery, and the consideration that is to be provided to unsecured creditors thereunder. The customary hourly rates, subject to periodic adjustments, charged by Morris Anderson professionals anticipated to be assigned to the Chapter 11 cases are: Principals $475-$550 Managing Directors $350-$425 Directors $275-$325 In addition, MA is seeking approval of a one-time success fee of up to $150,000, payable at the sole and reasonable discretion of the Committee in cash by wire upon court approval. To the best of the Committee's knowledge, Morris Anderson is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Cetero Contract Research Solutions Inc., doing business as Cetero, a provider of early-phase clinical research services for pharmaceutical and biotechnology firms, filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-11004) on March 26, 2012. Cetero's 19 affiliates also sought bankruptcy protection (Bankr. D. Del. Case Nos. 12-11005 to 12-11023). Cetero plans to sell the business, including their rights to pursue avoidance actions, to first-lien secured lenders in exchange for $50 million in debt, absent higher and better offers. Cetero has filed a motion seeking approval of procedures that will govern the bidding and auction. The first-lien lenders have formed entities that will acquire the business -- CSRI Holdings LLC, as U.S. Purchaser, and 0935867 B.C. Ltd and 0935870 B.C. Ltd, as Canadian Purchasers. Together, they will serve as stalking horse bidders and have offered to exchange $50 million in secured debt and assume $30 million in liabilities to buy the assets. First lien lenders are also providing a $15 million loan to finance the Chapter 11 effort. The procedures require that the bidding protocol be approved by April 12 and an auction be held between April 30 and May 5. Competing bids are due three days prior to the auction date. The hearing for approval of the sale must take place prior to May 10. Assets are $205 million, with debt total $248 million. There is $185 million in debt for borrowed money, including $116 million on a first-lien term loan and revolving credit. The second-lien loan is $25 million. Second-lien lenders have agreed to the sale. Freeport Financial LLC serves as the sole lead arranger and bookrunner, and as U.S. administrative agent and collateral agent under the first lien facility. Bank of Montreal serves as the Canadian agent. Freeport is also the agent under the second lien facility. Judge Kevin Gross oversees the case. Lawyers at Young Conaway Stargatt & Taylor, LLP, and Paul Hastings LLP serve as the Debtors' counsel. Stikeman Elliott LLP serves as Canadian counsel. Carl Marks Advisory Group LLC serves as restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. The petitions were signed by Michael T. Murren, CFO. The first lien lenders and the stalking horse buyers are represented by Peter Knight, Esq., at Latham & Watkings, LLP; and Wael Rostom, Esq., at McMillan LLP. Roberta A. Deangelis, U.S. Trustee for Region 3 appointed three persons to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Contract Research Solutions, Inc., et al. CONTRACT RESEARCH: Committee Proposes Pachulski as Counsel ---------------------------------------------------------- The Official Committee of Unsecured Creditors of Contract Research Solutions, Inc., et al., asks for authorization from the Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to employ Pachulski Stang Ziehl & Jones LLP as counsel, nunc pro tunc to April 5, 2012. Pachulski Stang will, among other things assist, advise and represent the Committee in analyzing the Debtors' assets and liabilities, investigating the extent and validity of liens and participating in and reviewing any proposed asset sales, any asset dispositions, financing arrangements and cash collateral stipulations or proceedings, for these hourly rates: Bruce Grohsgal $725 Bradford J. Sandler $695 Peter J. Keane $395 Karma Yee $275 To the best of the Committee's knowledge, Morris Anderson is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Cetero Contract Research Solutions Inc., doing business as Cetero, a provider of early-phase clinical research services for pharmaceutical and biotechnology firms, filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-11004) on March 26, 2012. Cetero's 19 affiliates also sought bankruptcy protection (Bankr. D. Del. Case Nos. 12-11005 to 12-11023). Cetero plans to sell the business, including their rights to pursue avoidance actions, to first-lien secured lenders in exchange for $50 million in debt, absent higher and better offers. Cetero has filed a motion seeking approval of procedures that will govern the bidding and auction. The first-lien lenders have formed entities that will acquire the business -- CSRI Holdings LLC, as U.S. Purchaser, and 0935867 B.C. Ltd and 0935870 B.C. Ltd, as Canadian Purchasers. Together, they will serve as stalking horse bidders and have offered to exchange $50 million in secured debt and assume $30 million in liabilities to buy the assets. First lien lenders are also providing a $15 million loan to finance the Chapter 11 effort. The procedures require that the bidding protocol be approved by April 12 and an auction be held between April 30 and May 5. Competing bids are due three days prior to the auction date. The hearing for approval of the sale must take place prior to May 10. Assets are $205 million, with debt total $248 million. There is $185 million in debt for borrowed money, including $116 million on a first-lien term loan and revolving credit. The second-lien loan is $25 million. Second-lien lenders have agreed to the sale. Freeport Financial LLC serves as the sole lead arranger and bookrunner, and as U.S. administrative agent and collateral agent under the first lien facility. Bank of Montreal serves as the Canadian agent. Freeport is also the agent under the second lien facility. Judge Kevin Gross oversees the case. Lawyers at Young Conaway Stargatt & Taylor, LLP, and Paul Hastings LLP serve as the Debtors' counsel. Stikeman Elliott LLP serves as Canadian counsel. Carl Marks Advisory Group LLC serves as restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. The petitions were signed by Michael T. Murren, CFO. The first lien lenders and the stalking horse buyers are represented by Peter Knight, Esq., at Latham & Watkings, LLP; and Wael Rostom, Esq., at McMillan LLP. Roberta A. Deangelis, U.S. Trustee for Region 3 appointed three persons to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Contract Research Solutions, Inc., et al. COSO GEOTHERMAL: Fitch Cuts Rating on $629-Mil. Certs. to 'CCC' --------------------------------------------------------------- Fitch Ratings has downgraded the rating on Coso Geothermal Power Holdings LLC's (CGP) $629 million ($523 million outstanding) pass through certificates due 2026 from 'B' to 'CCC'. The downgrade reflects the continued decline in net capacity of the Coso geothermal resource (Coso) and projected cash flows that will be insufficient to meet debt obligations. Key Rating Drivers -- Geothermal Resource Depletion: Coso's average net capacity declined over 5% to 170 megawatts (MW) in 2011 from approximately 180MW in 2010. The continued decline in capacity is reducing revenues, and lowering cash flows to levels that are not sufficient to meet debt obligations. -- Expected Payment Shortfall: Fitch's expectation for performance at Coso for the calendar year 2012 indicates that cash available for debt service will result in a payment shortfall. This will necessitate a draw on the letter of credit-funded senior rent reserve to meet debt obligations. -- Limited Revenue Risk: Price risk on energy revenues is now limited to one-fifth of total revenues from July 2014 - March 2019. Coso executed an amendment with off-taker Southern California Edison (SCE) to fix the energy price earned at the BLM plant through June 30, 2014. What Could Trigger A Rating Action -- If the geothermal resource depletion accelerates, revenues and cash flows will shrink more quickly, reducing already below breakeven coverages. -- Letter of credit-funded facilities supporting the power purchase agreement collateral posting and debt service reserve are set to expire on Dec. 7, 2012. If not renewed or replaced, the facilities would be drawn in cash, substantially increasing Coso's debt obligations. Security Each tranche of the certificates represents an undivided interest in a related pass-through trust, which holds the lessor notes (notes) issued by the owner lessors. The notes are the sole collateral and source of repayment of the certificates. Credit Update Coso has been unable to reverse a steady decline in geothermal resource output, and is expected to draw from its letter of credit-funded senior rent reserve in order to meet the debt portion of its lease rent obligation beginning in 2012. Absent a significant improvement in net capacity levels, operating cash flow will be insufficient to meet long-term debt obligations. In developing a base case for long-term expected performance, Fitch applied minimal project and financial stresses, and utilized a sponsor assumption for Coso's 2012 net capacity. This scenario indicates a financial profile where default is a real possibility. Fitch expects Coso to operate close to or below breakeven levels on its debt obligations for the remainder of the debt tenor, with a DSCR average of 0.85 times (x) and minimum of 0.70x. Fitch projects that the reserve will be fully depleted by 2017, leading to a default on payment of the CGP certificates. These projections assume that Coso will extend or replace its current credit facilities, which are set to expire on Dec. 7, 2012. If the facilities are not extended or replaced, it is likely that Coso would draw on the existing letters of credit, creating additional debt obligations that would accelerate default. Despite continuing geothermal resource declines, CGP managed to make the full rent payments out of cash flow from Coso and Beowawe in January and July of 2011. These payments resulted in an audited lease rent coverage ratio of 1.21x, with a coverage ratio of the debt portion at 1.26x for 2011. The major contributing factors to facilitate this payment (beyond normal operations) were a large distribution from Beowawe, a temporary tax payment settlement, and the delay of previously anticipated well workovers. In June 2011, Coso executed an amendment with off- taker Southern California Edison (SCE, Fitch rated 'A-', with a Stable Outlook) to replace Short-Run Avoided Cost-based energy pricing with fixed pricing through June 30, 2014. This agreement brings near-term stability to Coso's revenue stream, though revenues are still dependent on geothermal resource production. Fitch is projecting cash shortfalls beginning in 2012, although the sponsor, Terra-Gen Power LLC, has indicated that the January 2012 rent payment was made in full with cash flows from operations. The next rent payment is due in July 2012. While Coso continues to actively manage the resource and implement above-ground improvements, Fitch notes that the budget for capital expenditures is diminishing. Major enhancement to below-ground resource production is not expected. CGP is a special-purpose company formed to lease and operate the Coso project, which consists of three interlinked geothermal power plants located in Inyo County, CA. Coso provides royalty payments to the U.S. Navy and the Bureau of Land Management for use of the geothermal resource. Under a series of power purchase agreements, Coso's entire output will be sold to SCE through January 2030. Cash flows from both Coso and Beowawe, an affiliated geothermal project in Nevada, are available to service CGP's rent payments under the CGP lease. Rent payments are the sole source of cash available to pay debt service on the pass-through trust certificates. COTT CORP: $35MM Share Repurchase No Impact on Moody's 'B2' CFR --------------------------------------------------------------- Moody's Investors Service said that Cott Corporation's announcement of a $35 million share repurchase authorization expiring May 2013 is a slight credit negative but has no impact on the company's B2 corporate family rating or stable outlook. "We expect that the company will use cash on hand and free cash flow to repurchase shares and will not weaken its liquidity profile or increase debt levels," stated Brian Grieser, an Analyst at Moody's. The principal methodology used in rating Cott was the Global Soft Beverage Methodology published in December 2009, 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 issuer can also be found in the Credit Policy & Methodologies directory at www.moodys.com/methodology. Headquartered in Toronto, Ontario, and Tampa, Florida, Cott Corporation (Cott) is one of the world's largest private label beverage companies. Cott's product portfolio includes carbonated soft drinks (CSD), clear, still and sparkling flavored waters, juice, juice-based products, bottled waters, energy related drinks, and ready-to-drink teas. Cott's customers include many of the largest national and regional grocery, drugstore, wholesalers and convenience store chains. Sales for the twelve months ending March 31, 2012 were approximately $2.3 billion. CPI CORP: In Talks With Lenders to Obtain Waiver ------------------------------------------------ CPI Corp.'s primary sources of liquidity have historically been cash flows from operations and the borrowing capacity available under its Credit Agreement. Its business is highly seasonal, with significant operating cash flow historically being generated in the fiscal fourth quarter. The reduction in available borrowing capacity resulting from the Amendment coupled with a significant reduction in earnings and operating cash flow, which is largely attributable to lower than expected sales during in the fourth quarter and continuing into the current year, has resulted in significant liquidity challenges for the Company. The company incurred a net loss of $56.7 million for the fiscal year ended Feb. 4, 2012, which included significant impairment, restructuring and other related charges, and used $5.7 million of cash for operations. As of Feb. 4, 2012, current liabilities of $116.5 million (including $74 million due under our Credit Agreement) exceed current assets of $25.3 million, and there is a total stockholders' deficit of $58.8 million. As of Feb. 4, 2012, it is not in compliance with its covenants under the Credit Agreement, and such noncompliance continues to exist as of today. Additional liquidity through cash flows from operations, additional borrowing capacity under its Credit Agreement, or a combination of both, is needed to satisfy the Company's cash flow needs in fiscal 2012, to meet debt service obligations as they come due under the Credit Agreement, and to provide for any necessary capital maintenance spending to support operations. The Company is in active discussions with its lenders to obtain both a short-term financial debt covenant compliance waiver to cure the existing default, as well as further amendments to the Credit Agreement to avoid a subsequent default, and to increase the borrowing capacity under the lending arrangement. There can be no assurances that the lenders will grant such waivers or agree to amendments on commercially reasonable terms, if at all. If the Company's debt is accelerated and it is unable to obtain other adequate financing, the Company's existing assets are not sufficient to repay its debt in full. Headquartered in St. Louis, Missouri, CPI Corp. provides portrait photography services at more than 2,500 locations in the United States, Canada, Mexico and Puerto Rico and offers on location wedding photography and videography services through an extensive network of contract photographers and videographers. CPI's digital format allows its studios and on location business to offer unique posing options, creative photography selections, a wide variety of sizes and an unparalleled assortment of enhancements to customize each portrait - all for an affordable price. CUMULUS MEDIA: Swaps Stations with Townsquare Media --------------------------------------------------- Cumulus Media announced the sale of 55 stations in 11 non- strategic markets to Townsquare Media in exchange for the acquisition of 10 radio stations in two markets plus $116 million in cash. The transaction is part of Cumulus's ongoing plan to focus on radio stations in top markets and geographically strategic regional clusters. "This transaction represents strategic portfolio management which enables us to focus on accretive large market consolidation as well as further de-leveraging of our balance sheet," said Lew Dickey, CEO of Cumulus. As part of the transaction, Cumulus is acquiring 10 stations in Bloomington, IL, and Peoria, IL. The stations being sold by Cumulus to Townsquare reside in the following markets: Augusta, ME; Bangor, ME; Binghamton; NY, Bismarck, ND; Grand Junction, CO; Killeen-Temple, TX, New Bedford, MA, Odessa-Midland, TX; Presque Isle, ME; Sioux Falls, SD and Tuscaloosa AL. UBS Investment Bank acted as financial advisor and Jones Day acted as legal advisor to Cumulus in connection with the transaction. About Cumulus Media Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ: CMLS) -- http://www.cumulus.com/-- is the second largest radio broadcaster in the United States based on station count, controlling 350 radio stations in 68 U.S. media markets. In combination with its affiliate, Cumulus Media Partners, LLC, the Company believes it is the fourth largest radio broadcast company in the United States when based on net revenues. Cumulus Media put AR Broadcasting Holdings Inc. and three other units to Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13674) after struggling to pay off debts that topped $97 million as of June 30, 2011. Holdings estimated debts between $50 million and $100 million but said assets are worth less than $50 million. AR Broadcasting are Missouri and Texas radio stations. Cumulus Media reported a net loss of $13.13 million on $290.20 million of net revenues for the quarter ended Dec. 31, 2011, compared with net income of $7.51 million on $69.78 million of net revenues for the same period a year ago. The Company's balance sheet at Dec. 31, 2011, showed $4.04 billion in total assets, $3.63 billion in total liabilities, $113.47 million n total redeemable preferred stock, and $290.71 million in total stockholders' equity. Bankruptcy Warning The Company said in its annual report for the year ended Dec. 31, 2011, that the lenders under the 2011 Credit Facilities have taken security interests in substantially all of the Company's consolidated assets, and the Company has pledged the stock of certain of its subsidiaries to secure the debt under the 2011 Credit Facilities. If the lenders accelerate the repayment of borrowings, the Company may be forced to liquidate certain assets to repay all or part of such borrowings, and the Company cannot assure that sufficient assets will remain after it has paid all of the borrowings under those 2011 Credit Facilities. If the Company was unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness and the Company could be forced into bankruptcy or liquidation. * * * Standard & Poor's Ratings Services in October 2011 affirmed is 'B' corporate credit rating on Cumulus Media. "The ratings reflect continued economic weakness and higher post- acquisition leverage than we initially expected," said Standard & Poor's credit analyst Jeanne Shoesmith. "They also reflect the combined company's sizable presence in both large and midsize markets throughout the U.S." DEWEY & LEBOEUF: Warns Employees on Possible Closure ---------------------------------------------------- The Wall Street Journal's Ashby Jones and Jennifer Smith report that New York law firm Dewey & LeBoeuf LLP on Friday sent a notice to its employees saying, "Although we could continue to pursue various avenues, it is possible that adverse developments could ultimately result in the closure of the firm, which would result in the termination of your employment. The notice said, "In order to give you as much advance notice as possible . . . this letter will serve as conditional advance notice . . . of the possibility that your employment may be terminated, and if that occurs your separation will be permanent, not temporary." The notice was reviewed by The Wall Street Journal. WSJ relates the notice -- known as a WARN notice -- is required under state and federal law to be sent to employees prior to a mass layoff or a shutdown of operations. Employers that fail to give such notice can be held liable for back pay. WSJ says a spokesman for the 1,000-lawyer firm did not immediately respond to a request seeking comment about the notice. Earlier Friday, a Dewey spokesman denied reports that the firm was winding down its affairs. According to WSJ, one Dewey employee said the firm organized a job fair on Friday at the 10th floor of its Manhattan headquarters. That employee said legal assistants, paralegals and others met with recruiters and job-placement agencies. WSJ also reports a person familiar with the matter said Dewey's top partners are still in talks with a bank syndicate that is continuing to ask the law firm for financial information. The firm owes about $75 million on a $100 million credit line. WSJ says the firm's leaders have said the firm has no immediate plans to file for bankruptcy. DEX MEDIA EAST: Bank Debt Trades at 45% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media East LLC is a borrower traded in the secondary market at 55.08 cents-on- the-dollar during the week ended Friday, May 4, 2012, an increase of 1.83 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2014. The loan is one of the biggest gainers and losers among 162 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About R.H. Donnelley & Dex Media East Dex One, headquartered in Cary, North Carolina, is a local business marketing services company that includes print directories and online voice and mobile search. Revenue was approximately $1.1 billion for the LTM period ended Sept. 30, 2010. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09- 11833 through 09-11852). They emerged from bankruptcy on Jan. 29, 2010. On the Effective Date and in connection with its emergence from Chapter 11, RHD was renamed Dex One Corporation. Dex One reported a net loss of $518.96 million in 2011 compared with a net loss of $923.59 million for the eleven months ended Dec. 31, 2010. * * * As reported in the April 2, 2012 edition of the TCR, Moody's Investors Service has downgraded the corporate family rating (CFR) for Dex One Corporation's to Caa3 from B3 based on Moody's view that a debt restructuring is inevitable. Moody's has also changed Dex's Probability of Default Rating (PDR) to Ca/LD from B3 following the company's purchase of about $142 million of par value bank debt for about $70 million in cash. The Caa3 rating also reflects Moody's view that additional exchanges at a discount are likely in the future since the company amended its bank covenants to make it possible to repurchase additional bank debt on the open market through the end of 2013. As reported by the TCR on April 4, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Cary, N.C.-based Dex One Corp. and related entities to 'CCC' from 'SD' (selective default). "The upgrade reflects our assessment of the company's credit profile after the completion of the subpar repurchase transaction in light of upcoming maturities, future subpar repurchases, and our expectation of a continued week operating outlook," explained Standard & Poor's credit analyst Chris Valentine. DIAGNOSTIC IMAGING: S&P Withdraws 'CC' Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'CC' corporate credit and 'CC' secured debt ratings on Hicksville, N.Y.-based Diagnostic Imaging Group at the request of the issuer. DINEEQUITY INC: Fitch Affirms Issuer Default Rating at 'B' ---------------------------------------------------------- Fitch Ratings has affirmed the ratings of DineEquity, Inc. (NYSE:DIN) as follows: DineEquity, Inc. -- Long-term Issuer Default Rating (IDR) at 'B'; -- Senior secured bank credit facility at 'BB/RR1'; -- 9.5% senior unsecured notes at 'B+/RR3'. The Rating Outlook is Stable. At March 31, 2012, DineEquity had approximately $1.6 billion of total debt. Rating Rationale: DineEquity's ratings reflect the company's high financial leverage, consistent free cash flow (FCF) generation, and on-going business strategy. The firm's primary focus is to grow same-store sales (SSS), reduce debt, and refranchise company-operated restaurants. DineEquity's scale and competitive U.S. position of over 2,000 Applebee's and 1,500 IHOP units are also incorporated into ratings. DineEquity's credit profile is enhanced by the stable source of royalty-based revenue and high level of profitability provided by its growing mix of franchised restaurants. The company's goal is to become 99% franchised across the Applebee's and IHOP system. At Mar. 31, 2012, DineEquity was 95% franchised on a combined system basis. Fitch believes DineEquity can achieve its refranchising goal over the next couple of years due to the recent pace of transactions and views the company's franchise system as being in good shape. DineEquity has not experienced any material issues with the collection of royalties, franchisees have financed the remodeling of restaurants, and many existing franchisees have purchased units sold by the firm. On May 1, 2012, the firm announced an asset-purchase agreement to sell 39 of its 160 company-operated Applebee's units to Potomac Family Dining Group, LLC - an existing franchisee. The transaction is expected to close in the third quarter of 2012. Net after-tax proceeds will be approximately $25 million and the financing obligation associated with the 2008 sale-leaseback of 181 Applebee's properties will decline by about $40 million. As of Dec. 31, 2011, DineEquity's continuing involvement with 80 of the 181 properties ended by the assignment of lease obligations to qualified franchisees or a release from the lessor. The 'RR1' recovery rating on DineEquity's secured bank facility reflects Fitch's view that recovery prospects for this debt are outstanding and would exceed 90% in a distressed situation. The 'RR3' rating on the firm's 9.5% senior unsecured notes incorporates Fitch's opinion that bondholders would recover between 51% - 70% of principal in a distressed scenario. DineEquity's fairly balanced mix of secured priority debt and unsecured notes improves recovery prospects for bondholders. Credit Statistics and Rating Triggers: DineEquity's credit statistics are in line with Fitch's expectations. Leverage continues to gradually decline but remains high because debt pay down has been partially offset by the EBITDA give up associated with refranchising company-operated units. For the latest-twelve-month (LTM) period ended March 31, 2012, rent- adjusted leverage (defined as total debt plus 8 times gross rent- to-operating EBITDA plus gross rent) was 6.2 times (x). Operating EBITDAR-to-Gross Interest Expense plus rent was 1.7x and FFO Fixed Charge Coverage was 1.6x. The company generated $89.2 million of FCF and had an EBITDA margin of 28.9%. Fitch does not include receipts from long-term receivables in its FCF calculation. Fitch believes DineEquity is capable of reducing leverage by up to 1.0x within the next 24 months as the firm continues to utilize internally generated cash and refranchising proceeds to reduce debt. Since 2008, FCF has averaged roughly $100 million annually and after-tax refranchising proceeds have totaled over $170 million. When including the reduction in the firm's financing obligation, total debt has declined by nearly $800 million to $1.6 billion over the same period. An upgrade of DineEquity's IDR could occur if rent-adjusted leverage declines to the mid-5.0x range due to SSS growth, stable or improving FCF generation, and continued debt reduction. Conversely, the firm's IDR would be lowered if there is a material increase in leverage, due to a shift in financial strategy, substantial declines in FCF and persistently negative SSS performance. Changes in recovery ratings would be driven by sustained increases or decreases in EBITDA, material debt reduction, or changes in the firm's capital structure. Same-Store Sales Performance: Fitch views DineEquity's 2012 SSS guidance as reasonable, given the extremely competitive nature of the U.S. restaurant industry and gradually declining high U.S. unemployment rate. The firm expects SSS growth at Applebee's to range between 0.5% and 2.5% while SSS performance at IHOP is projected to range between negative 1.5% and positive 1.5%. During the first quarter ended Mar. 31, 2012, SSS increased 1.2% at Applebee's but fell 0.5% at IHOP. Traffic at both brands was modestly negative. Applebee's strategy to drive sales is to frequently update core menu items, the brand's 2 for $20 and Great Tasting Under 550 calories platforms, and to continue initiatives around the late- night day part. Efforts to improve sales trends at IHOP consist of changes to the brand's promotional strategy, including its recently launched 7 for $7 platform and reduced emphasis on limited time offers. DineEquity is also working with franchisees to improve service quality. Liquidity, Maturities and Financial Covenants: DineEquity's liquidity is adequate given the firm's FCF and limited near-term maturities. Furthermore, the cash needs of a highly franchised system are minimal as franchisees self-finance unit development and remodeling requirements. At March 31, 2012, DineEquity had $110 million of liquidity consisting of $48.7 million of cash and $61.2 million availability, excluding $13.8 million of letters of credit, on its $75 million revolver expiring Oct. 19, 2015. At March 31, 2012, scheduled maturities of long-term debt were immaterial until Oct. 19, 2017 when the remaining $612.0 million balance on DineEquity's term loan becomes due. The term loan amortizes at 1% of original principal annually. DineEquity's 9.5% notes, which have a remaining balance of $760.8 million, mature on Oct. 30, 2018. Financial covenants in DineEquity's secured credit facility include a maximum consolidated leverage ratio (defined as total indebtedness minus no more than $75 million of cash-to-EBITDA) and a minimum interest coverage ratio. The maximum leverage ratio is 7.25x in 2012 but steps down 0.25x annually through 2016 to 6.0x. The minimum coverage ratio is 1.5x in 2012, stepping up 0.25x in 2013 and then again in 2016. At March 31, 2012, the ratios were 5.2x and 2.4x, respectively. Fitch estimates that EBITDA would have to decline by approximately 30% or more to breach these covenants. DineEquity's senior unsecured notes do not have financial covenants but contain a Negative Pledge clause that requires equal and ratable security if non-permitted secured debt is incurred and have a change of control put option at 101% of principal plus accrued and unpaid interest. DUNE ENERGY: Incurs $3.6 Million Net Loss in First Quarter ---------------------------------------------------------- Dune Energy, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $3.59 million on $13.39 million of revenue for the three months ended March 31, 2012, compared with a net loss of $8.34 million on $17.42 million of revenue for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $249.87 million in total assets, $127.82 million in total liabilities and $122.05 million in total stockholders' equity. At the end of the quarter the Company had $16.2 million in cash and $25 million available under the Company's Sr. Credit Facility based on $63 million of availability. James A. Watt, President and CEO of the Company, said in a statement, "So far this year our Garden Island Bay drilling and workover program has been successful. We anticipate initiating a program at Leeville in the second quarter. We are seeking a joint venture partner to commence additional drilling in our Garden Island Bay field post the hurricane season. All projects are designed to increase oil production and reserves." A copy of the Form 10-Q is available for free at: http://is.gd/90kglG About Dune Energy Dune Energy, Inc. (NYSE AMEX: DNE) -- http://www.duneenergy.com/ -- is an independent energy company based in Houston, Texas. Since May 2004, the Company has been engaged in the exploration, development, acquisition and exploitation of natural gas and crude oil properties, with interests along the Louisiana/Texas Gulf Coast. The Company's properties cover over 90,000 gross acres across 27 producing oil and natural gas fields. The Company reported a net loss of $60.41 million in 2011, compared with a net loss of $75.53 million in 2010. * * * As reported by the TCR on Dec. 27, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on Dune Energy Inc. to 'SD' (selective default) from 'CC'. "The rating actions follow the company's announcement that it has completed the exchange offer for its 10.5% senior notes due 2012, which we consider a distressed exchange and tantamount to a default," said Standard & Poor's credit analyst Stephen Scovotti. "Holders of $297 million of principle amount of the senior secured notes exchanged their 10.5% senior secured notes for common stock, which in the aggregate constitute 97.0% of Dune's common stock post-restructuring, and approximately $49.5 million of newly issued floating rate senior secured notes due 2016. We consider the completion of such an exchange to be a distressed exchange and, as such, tantamount to a default under our criteria." In the Jan. 2, 2012, edition of the TCR, Moody's Investors Service revised Dune Energy, Inc.'s Probability of Default Rating (PDR) to Caa3/LD from Ca following the closing of the debt exchange offer of the company's 10.5% secured notes. Simultaneously, Moody's upgraded the Corporate Family Rating (CFR) to Caa3 reflecting Dune's less onerous post-exchange capital structure and affirmed the Ca rating on the secured notes. The revision of the PDR reflects Moody's view that the exchange transaction constitutes a distressed exchange. Moody's will remove the LD (limited default) designation in two days, change the PDR to Caa3, and withdraw all ratings. EDGEN MURRAY: Brian Friedman Holds 58% of Class A Shares -------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Brian P. Friedman and his affiliates disclosed that, as of May 2, 2012, they beneficially own 24,541,233 Class A common shares of Edgen Group Inc. representing 58% of the shares outstanding. Between April 30, 2012, and May 1, 2012, Mr. Friedman purchased 198,095 shares of Class A Common Stock on the open market. Mr. Friedman is a managing member of Jefferies Capital Partners LLC, which is the managing member of the general partner of Jefferies Capital Partners IV L.P. J efferies Capital Partner IV L.P. is the manager of Bourland & Leverich Holdings LLC and controls the general partner of Edgen Murray II, L.P. The percentage is based on 42,329,043 shares of Class A Common Stock outstanding as of April 27, 2012. A copy of the filing is available for free at: http://is.gd/eh8Emw About Edgen Murray Edgen Murray II L.P., headquartered in Baton Rouge, Louisiana, is a distributor of carbon steel and alloy products for use primarily in specialized applications in the energy and niche industrial segments. The company operates on a global basis, with approximately one-third of its sales generated outside of the Americas, and has distribution centers in five countries to facilitate timely deliveries to companies and contractors engaged in the development of new energy infrastructure projects and the maintenance of existing facilities. In 2010, Edgen Murray had sales of $628 million. The company is primarily owned by Jefferies Capital Partners, certain co-investors and members of senior management. The Company reported a net loss of $24.52 million in 2011, a net loss of $98.28 million in 2010, and a net loss of $20.88 million in 2009. The Company's balance sheet as of Dec. 31, 2011, showed $551.05 million in total assets, $706.11 million in total liabilities and a $155.05 million total deficit. * * * In April 2012, Standard & Poor's Ratings Services placed its ratings, including the 'B-' corporate credit rating, on Edgen Murray II L.P. on CreditWatch with positive implications. "The positive CreditWatch placement follows the announcement by Edgen Murray's parent, Edgen Group Inc. (not rated), that it has commenced an IPO of 15 million shares with approximately $200 million expected in net proceeds. We expect Edgen Group to use the proceeds to repay $170 million of B&L's outstanding debt and to reduce Edgen Murray's asset-backed revolving credit facility balance. Following the IPO, the operations of both Edgen Murray and B&L will be subsidiaries of the newly formed EDG LLC. Additionally, as part of the reorganization, EM Holdings LLC will be formed and will replace Edgen Murray as the guarantor of Edgen Murray's senior secured notes," S&P said. In April 2011, Moody's Investors Service lowered Edgen Murray II, L.P.'s probability of default rating (PDR) to Caa2 from Caa1, its corporate family rating (CFR) to Caa3 from Caa1 and the company's 12.25% senior secured notes to Caa3 from Caa2. The downgrade was prompted by Edgen Murray's continuing weak performance even as many of its peers began to benefit in 2010 from higher oil prices, a higher rig count for oil drilling, and increased drilling in and production from alternative shale plays. EL MONTE PUBLIC: Fitch Lowers Rating on $19-Mil. Bonds to 'BB+' --------------------------------------------------------------- Fitch Ratings has downgraded the following obligation issued by the El Monte Public Financing Authority, CA (authority): -- $19.1 million lease revenue bonds (city yard project), series 2010A and 2010B to 'BB+' from 'A-'. In addition, Fitch assigns the following ratings: -- Implied general obligation (GO) bond rating at 'BBB'. The bonds are on Rating Watch Negative. SECURITY The city of El Monte, CA (city) covenants to budget and appropriate lease rental payments, subject to abatement, for use of its public works yard and its civic center complex from any source of available funds of the city. KEY RATING DRIVERS WEAK COMMITMENT TO DEBT OBLIGATIONS: The downgrade to 'BB+' reflects Fitch's concern about the city's willingness to adhere to its financial agreements, including the covenant to budget and appropriate for use and occupancy of the civic center complex from any available funds. POTENTIAL COVENANT VIOLATION: The Negative Rating Watch reflects the city's comments that it might choose to violate its covenant to budget and appropriate in fiscal 2013 for the full lease revenue bond debt service payment due Aug. 1, 2012. The covenant applies to all legally available funds; however, the city has cooperative agreements with its water and sewer funds and redevelopment agency to pay debt service. FINANCIAL POSITION AND REPORTING: The city's financial operations appear to be satisfactory based on audited information for fiscal 2010 and prior years, and unaudited information for fiscal 2011. However, the downgrade further reflects Fitch's concerns about the timeliness and transparency of financial information. If these concerns are not addressed Fitch will not be able to continue to maintain its rating on the city's debt. ADEQUATE LIQUIDITY: The city's general fund liquidity is somewhat limited, totaling about $4 million at the end of fiscal 2011 according to the draft audit. This amount is only about 70% of the current liabilities listed. Sizeable internal liquidity in an employee retirement account funded with a voter-approved property tax over-ride in perpetuity offsets this concern. BELOW AVERAGE ECONOMY: The 'BBB' GO rating also reflects the city's weak economic indicators, including a high unemployment rate (14.8% in February 2012), low taxable assessed value (TAV) per capita ($51,000) and low per capita and median household income levels (52% and 82% of the national average, respectively). WHAT COULD TRIGGER A RATING ACTION FAILURE TO BUDGET AND APPROPRIATE: Failure of the city to pay lease payments when due regardless of receipt of outside funds would result in a downgrade to the 'BB' category. The city stated its intent to draw on the cash debt service reserve fund, which it believes is sufficient to cover an estimated maximum deficiency, to fund debt service until tax increment funds are received from the county. CREDIT PROFILE POTENTIAL VIOLATION OF COVENANT TO BUDGET AND APPROPRIATE The bonds are secured by a covenant to budget and appropriate from any legally available funds; however, the city has cooperative agreements with its water and sewer funds and redevelopment agency to pay debt service. Although the city is expecting a former redevelopment agency tax increment payment from the county on June 1, management is concerned about the timeliness and sufficiency of the payment to fund its pro-rata portion of the lease payments when due. This concern stems from the cumbersome process of winding down redevelopment agencies. WEAK ECONOMIC BASE El Monte is located about 12 miles east of downtown Los Angeles and serves a population of about 125,000. The city's unemployment rate is consistently higher than state and national averages. The jobless rate improved modestly in February 2012 compared to a year prior, but remained high at 14.8%. In addition, income levels are very low, with per capita income at about 52% of the national average. Despite the financial downturn, TAV declined a moderate 2.1% in fiscal year 2011 to $5.8 billion, and 0.1% the prior year. Nonetheless, the city's tax base remains vulnerable to further declines. ADEQUATE FINANCIAL OPERATIONS; CHALLENGES AHEAD; COMPLICATED FINANCIALS The city's financial position has fluctuated in recent years as a result of declining revenue, increased sales tax rate, transfers in from the redevelopment agency and audit restatements. The most recent audit (fiscal 2010) showed an $8.6 million surplus, bringing the unreserved fund balance to $4.1 million, or 8.8% of expenditures. This followed a $7 million deficit in fiscal 2008 and a $282,000 surplus in fiscal 2009. Unreserved fund balance ranged from a high 37% of spending in fiscal 2006 to a low 1.6% in fiscal 2009. Unaudited results in fiscal 2011 point to an $8.4 million unrestricted fund balance (the sum of committed, assigned and unassigned under GASB 54), or 17% of expenditures. Fiscal 2012 revenues are estimated to be about $400,000 under budget, but no estimates for expenditures were provided. Future budgets will be challenged due to improving but still stagnant revenue, commitments for increased spending starting in fiscal 2013, and costs the city will need to absorb in connection with the dissolution of the city-sponsored redevelopment agency. Committed spending includes $2.3 million to staff fire stations, $1.7 million in salary and benefit increases and $330,000 in medical inflation. The redevelopment agency dissolution may cost about $900,000. The city is beginning labor negotiations and anticipates saving about $885,000 through various program changes such as increasing business license fees, cutting crossing guards and reevaluating programs. An additional $685,000 is expected to be saved though labor concessions and eliminating positions. Management noted that after cutting staff, service levels suffered and the city intends to reverse some of its service cuts. In addition to budgetary concerns, Fitch has concerns about the timeliness and transparency of the city's financial information. Statement are difficult to interpret due to a large number of interconnected funds (loans to and from funds with negative fund balances), multiple years of restatements, large transfers to the city-sponsored redevelopment agency in fiscal 2010 which will need to be reversed in fiscal 2011. MODERATE DEBT; HIGH RETIREE COSTS El Monte's overall debt burden is moderate at about $1,916 per capita and 3.7% of TAV. General fund supported debt service (including the 2010 lease revenue bonds) totals about $2.2 million annually, or an affordable 4.5% of spending (net of the Build America Bonds federal subsidy). However, total retiree costs are very high. The city participates in CalPERS, and for fiscal 2011, the required contribution was $8.6 million, representing a high 17% of general fund spending. Combined with other retiree costs including another pension system and the city's other post- employment benefits (additional $2.7 million), retiree costs rise to about 23% of spending. ELEPHANT & CASTLE: Converted to Chapter 7 After Sale ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the liquidation of Elephant & Castle Group Inc., once the operator of 19 British-style restaurant pubs, will be completed by a trustee in Chapter 7. The company was authorized in January to sell the business for $22.8 million to an affiliate of the Original Joe's restaurant chain from Calgary, Alberta. There were no other bids at auction. The U.S. Trustee told the bankruptcy judge in Boston that there was a "breakdown in relations" between the company and its lawyers. Company counsel, according to the U.S. Trustee, was prepared to withdraw from the case. The bankruptcy judge formally converted the Chapter 11 case to Chapter 7 liquidation last week. In Chapter 7, a trustee is appointed immediately by the U.S. Trustee, the Justice Department's watchdog for bankruptcy. About Massachusetts Elephant & Castle Group Boston-based Massachusetts Elephant & Castle Group and its affiliates operated 21 British-style restaurant pubs in the U.S. and Canada. The chain, with 10 locations in the U.S., generated revenue of $47.5 million in 2010, throwing off $3.9 million of earnings before interest, taxes, depreciation, amortization, and foreign exchange gains or losses. Elephant & Castle filed for Chapter 11 protection (Bankr. D. Mass. Lead Case No. 11-16155) on June 28, 2011. Bankruptcy Judge Henry J. Boroff presides over the case. Repechage Investments' estimated assets and debts at $10 million to $50 million. Other Debtors' estimated assets and debts at $0 to $10 million. Eckert Seamans Chein & Mellott, LLC, represent the Debtors as counsel and BellMark Partners, LLC as financial advisor. Epiq Bankruptcy Solutions, LLC as claims, noticing and balloting agent. Phoenix Management serves as the Company's Chief Restructuring Advisor. FTI Consulting, Inc., is the Official Committee of Unsecured Creditors' financial advisors. Goulston & Storrs, P.C., is the Committee's counsel. ENERGY CONVERSION: Sub-Committee Hiring Clark Hill as Counsel ------------------------------------------------------------- The Official ECD Creditors Sub-Committee of the Official Committee of Unsecured Creditors of Energy Conversion Devices Inc., and United Solar Ovonic LLC seeks Court permission to employ Clark Hill PLC as the subcommittee's counsel. On Feb. 27, 2012, the U.S. Trustee appointed the official unsecured creditors' committee. The members of the Committee may be creditors of one or both of the Debtors. The Committee has obtained approval to hire Foley & Lardner LLP as its counsel. In the committee's application to engage Foley, certain procedures were provided to handle potential conflicts of interest which may arise between creditors of ECD's and of Ovonic's estates. The procedures provided for the formation of two ad hoc sub-committees -- (i) the ECD Creditors Sub-Committee comprosing committee members who are creditors of ECD and choose to participate on the ECD Sub-Committee and (ii) an ad hoc sub-committee comprising committee members who are creditors of Ovonics and choose to participate on the Ovonics Sub-Committee. The sole member of the ECD Sub-Committee is The Bank of New York Mellon Trust Company N.A., as indenture trustee. Pursuant to the Amended Foley Application and the Court order approving Foley's employment, the ECD Sub-Committee has the right to retain independent counsel and other professionals to evaluate any conflict issue and take any required action in the Debtors' cases. The ECD and Ovonics Sub-Committees also have the right to take independent action as if a separate, official committee of that Debtor, if each Sub-Committee determines to do so. To the extent an actual conflict arises where both the ECD and Ovonics Sub-Committees have been formed and both are addressing an actual conflict that requires both to take appropriate action, Foley is to represent only the Ovonics Sub-Committee and not the ECD Sub- Committee with respect to the actual conflict. Accordingly, the ECD Sub-Committee seeks to hire Clark Hill. The ECD Sub-Committee proposes that Clark Hill will be paid at these hourly rates: Members $275 - $600 per hour Senior attorneys $290 - $360 per hour Associates $165 - $340 per hour Legal assistants $100 - $220 per hour Robert D. Gordon, Esq., is leading the engagement. He charges $550 per hour. About Energy Conversion Energy Conversion Devices -- http://energyconversiondevices.com/ -- has a renowned 51 year history since its formation in Detroit, Michigan and has been a pioneer in materials science and renewable energy technology development. The company has been awarded over 500 U.S. patents and international counterparts for its achievements. ECD's United Solar wholly owned subsidiary has been a global leader in building-integrated and rooftop photovoltaics for over 25 years. The company manufactures, sells and installs thin-film solar laminates that convert sunlight to clean, renewable energy using proprietary technology. ECD filed for Chapter 11 protection (Bankr. E.D. Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker presides over the case. Aaron M. Silver, Esq., Judy B. Calton, Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz & Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel. The Debtor estimated assets and debts of between $100 million and $500 million as of the petition date. The petition was signed by William Christopher Andrews, chief financial officer and executive vice president. Affiliate United Solar Ovonic LLC filed a separate Chapter 11 petition on the same day (Bankr. E.D. Mich. Case No. 12-43167). Affiliate Solar Integrated Technologies, Inc., filed a petition for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 12-43169). An official committee of unsecured creditors has been appointed in the case. ECD is seeking to sell assets on a going concern basis. An auction is currently set for May 8. The auction was previously scheduled for April 24. Cassandra Sweet, writing for Dow Jones Newswires, reported that company executives told a bankruptcy court in Detroit earlier in April the auction might not bring in enough proceeds to pay off the company's $249 million in debt and likely won't be enough to pay shareholders. A group of shareholders hoping to recover money from the auction had asked a bankruptcy judge to allow it to form an official committee with lawyers and expenses paid for by the company. The company had estimated in court papers that it was worth $986 million, based on nearly $800 million of investment in the manufacturing unit. But the company said it was unlikely to recover that amount from the auction and didn't expect to raise enough to pay off its debts and pay shareholders. The Troubled Company Reporter on April 19, 2012, citing a report by Garret Ellison at mlive.com, said Salamon Group has offered about $2.5 million to acquire United Solar Ovonic. According to the report, Salamon is offering up to 5 million shares in their company in exchange for all shares of bankrupt flexible solar panel maker Energy Conversion Devices. The offer amounts to about $2.5 million based on Salamon's 49 cents per share mid-day trading price on April 17. ESSAR STEEL: Moody's Reviews 'Caa1' CFR for Possible Downgrade -------------------------------------------------------------- Moody's Investors Service placed Essar Steel Algoma's (ESA) Caa1 corporate family rating and probability of default rating under review for possible downgrade. Also placed under review for possible downgrade are the company's B3 senior secured note rating and its Caa2 senior unsecured note rating. The company's speculative grade liquidity rating of SGL-4 was affirmed. Ratings Rationale The review for downgrade is a result of the company not yet having been able to extend its $350 million asset backed revolving credit facility due June 20, 2012 and does not currently have alternative sources of liquidity. The facility is used to support working capital requirements. Approximately C$225 million was outstanding at December 31, 2011. The review will focus on the steps the company is taking to ensure that it continues to have adequate liquidity to support its business requirements, including any support that might be forthcoming from its ultimate parent, Essar Global. The principal methodology used in rating Essar Steel Algoma Inc. 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. Essar Steel Algoma Inc. is an integrated steel producer headquartered in Sault Ste. Marie, Ontario. Approximately 80% to 85% of ESA's sales are sheet products, with plate products accounting for the balance. The company's products are sold primarily in North America with roughly 60% going to steel service centers and the balance to customers in the automotive, construction, energy, manufacturing, pipe and tube industries. For the twelve months ended December 31, 2011, ESA generated revenues of approximately C$2 billion. FILENE'S BASEMENT: Court Moves Auction of IP Assets to June 5 ------------------------------------------------------------- The Bankruptcy Court rescheduled for June 5, 2012 at 10:00 a.m. Eastern Time, the auction for Filene's Basement LLC and Syms Corp.'s intellectual property assets, including the Filene's Basement and Syms tradenames. A Sale Hearing to approve the sale to the successful bidder has been adjourned to June 11 at 10:00 a.m. Eastern Time. Interested bidders must submit their bids no later than May 31, 2012, at 4:00 p.m. (Eastern time). The IP auction was originally scheduled for May 3. The Debtors' Intellectual Property Disposition Consultants is: Jack Hazan HILCO-STREAMBANK LLC 400 Madison Avenue New York, NY 10017 Fax (847) 897-0880 E-mail: jhazan@hilcostreambank.com About Syms Corp. Massachusetts-based Filene's Basement, also called The Basement, is the oldest off-price retailer in the United States. The Basement focuses on high-end goods and is known for its distinctive, low-technology automatic markdown system. Filene's Basement first filed for Chapter 11 bankruptcy protection in August 1999. Filene's Basement was bought by a predecessor of Retail Ventures, Inc., the following year. Retail Ventures in April 2009 transferred the unit to Buxbaum. Filene's Basement, Inc. and its affiliates filed for Chapter 22 (Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy Solutions serves as claims and notice agent. The Debtors estimated $50 million to $100 million in assets and $100 million to $500 million in debts. The 2009 Debtors' estate was formally renamed FB Liquidating Estate, following the sale of all of assets to Syms Corp. in June 2009. Pursuant to the Liquidating Plan confirmed in January 2010, secured creditors in the 2009 case have been paid in full, and holders of priority, administrative and convenience class claims have received 100% of their allowed claims. As reported by the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen, Chairman of Abacus Advisors LLC and Chief Restructuring Officer for FB Liquidating Estate, disclosed that a second distribution of dividend checks to Filene's unsecured creditors amounting to 12.5% of approved claims has been made, bringing the cumulative distributions on unsecured claims to 62.5%. On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-13511 to 11-13514) after a failed bid to sell the business. The two units are Syms Clothing Inc. and Syms Advertising Inc. Judge Kevin J. Carey presides over the 2011 case. Lawyers at Skadden Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The Debtors tapped Rothschild Inc. as investment banker and Cushman and Wakefield Securities, Inc., as real estate financial advisors. Syms shuttered its namesake and Filene's Basement outlets upon the bankruptcy filing and tapped a joint venture of Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC to run the going-out-of-business sales. Filene's Basement estimated $1 million to $10 million in assets and $50 million to $100 million in debts. The petitions were signed by Gary Binkoski, authorized representative of Filene's Basement. The official committee of unsecured creditors appointed in the 2011 case has retained Hahn & Hessen LLP as legal counsel. Holders of equity in Syms Corp. pushed for an official shareholders' committee and separation of the Syms and Filene's Basement bankruptcy estates. Gordon Brothers and Hilco are represented by Goulston & Storrs, P.C. and Ashby & Geddes, P.A. The Debtors finished going-out-of-business sales in December and are auctioning off trademarks and other intellectual property. Syms and Filene's also disposed of their leases, leaving mostly real property for later sale or retention as the basis for a reorganization. FIRST DATA: Incurs $152.5 Million Net Loss in First Quarter ----------------------------------------------------------- First Data Corporation reported a net loss attributable to the Company of $152.50 million on $2.56 billion of revenue for the three months ended March 31, 2012, compared with a net loss attributable to the Company of $217.10 million on $2.54 billion of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $41.42 billion in total assets, $38 billion in total liabilities, $66.20 million in redeemable noncontrolling interest and $3.34 billion in total equity. "For the second quarter in a row, First Data achieved double-digit EBITDA growth on an expanding top-line, supported by improving trends in the U.S. economy, and cost management," said Chief Executive Officer Jonathan J. Judge. "Our scale, our people and our strong relationships with both merchants and financial institutions drove great results this quarter, and we are positioned to continue to benefit from emerging opportunities in mobile commerce and secular payments growth." A copy of the press release is available for free at: http://is.gd/hgCoek About First Data Based in Atlanta, Georgia, First Data Corporation, with over $10 billion of revenue for the 12 months ended June 30, 2010, provides commerce and payment solutions for financial institutions, merchants, and other organizations worldwide. The Company reported a net loss of $336.10 million in 2011, a net loss of $846.90 million in 2010, and a net loss of $1.01 billion on $9.31 million in 2009. * * * The Company's carries a 'B3' corporate family rating, with a stable outlook, from Moody's Investors Service, a 'B' corporate credit rating, with stable outlook, from Standard & Poor's, and a 'B' long-term issuer default rating from Fitch Ratings. FNX MINING: S&P Raises Corp. Credit Rating to 'BB-'; Off Watch Pos ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term corporate credit on Vancouver-based Quadra FNX Mining Ltd, to 'BB-' from 'B+'. At the same time, Standard & Poor's affirmed its 'BB-' issue-level rating on the company's senior unsecured debt and revised its recovery rating on the debt to '3' from '2', as per S&P's recovery criteria, which caps the ratings of unsecured debt issued by companies rated in the 'BB' rating category. Finally, Standard & Poor's removed its ratings on the company from CreditWatch, where they had been placed with positive implications on March 6. The outlook is stable. "We had placed the ratings on Quadra on CreditWatch following KGHM Polska Miedz S.A.'s acquisition of Quadra on March 5, 2012," S&P said. "We base the upgrade and removal from CreditWatch on our expectation of potential support for Quadra from a parent with a stronger credit profile amid large capital expenditures in the next few years," said Standard & Poor's credit analyst Donald Marleau. "As a result, we believe that the long-term corporate credit rating on Quadra should be one notch higher than it would be on a stand-alone basis," Mr. Marleau added. "The ratings on Quadra reflect what we view as the company's weak business risk profile highlighted by its fourth-quartile cost profile, large growth capital expenditures, short reserve lives at some of its mines, and vulnerability to volatile copper prices. Counterbalancing these factors, in our opinion, are Quadra's modest debt leverage amid strong copper prices, and satisfactory operating diversity in attractive mining jurisdictions. Moreover, the long-term corporate credit rating on Quadra is one notch higher than it would be on a stand-alone basis, reflecting our expectation of potential support from a parent with a stronger credit profile amid large capital expenditures in the next few years," S&P said. "The stable outlook reflects our view that currently strong copper prices should allow Quadra to generate credit measures that support the rating while maintaining adequate liquidity through a multi-year period of large growth-oriented capital spending. Nevertheless, we expect that pressure on the rating would emerge if leverage were to escalate beyond 4x because of weaker commodity prices or higher capital expenditures. We believe that such a scenario would occur if copper prices dropped below $3.00 per pound, or about 20% lower than current prices and consistent with Standard & Poor's base-case prices for 2013 and 2014. Such a scenario would likely weaken Quadra's liquidity but leave it with adequate resources to complete the construction of the Chile-based Sierra Gorda mine if capital costs remain stable. A positive rating action is unlikely during the initial development of Sierra Gorda," S&P said. FREEDOM GROUP: S&P Rates New $330 Million Term Loan 'B+' -------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue-level rating to Freedom Group Inc.'s $330 million term loan due 2019. The recovery rating is '3', indicating S&P's expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. "We also assigned our 'B-' issue-level rating to the company's $250 million senior secured notes due 2020. The recovery rating is '6', indicating our expectation of negligible (0% to 10%) recovery for lenders in the event of a payment default," S&P said. "Freedom Group used the proceeds from the term loan and notes to pay outstanding balances under its 10.25% senior secured notes due 2015, of which $247.6 million was outstanding on Dec. 31, 2011, and 11.25%/11.75% senior payment-in-kind (PIK) notes due 2015, of which $241.8 million was outstanding on Dec. 31, 2011. It also used the proceeds to pay for tender premiums, fees, and expenses, and to provide additional balance-sheet cash. In conjunction with the notes issuances, the company entered into a new $150 million asset-based lending (ABL) facility (unrated) to replace its prior $150 million ABL facility," S&P said. "Our 'B+' corporate credit rating on Freedom Group remains unchanged. The rating outlook is stable," S&P said. "Our rating on Freedom Group reflects our assessment of the company's business risk profile as 'weak' and our assessment of its financial risk profile as 'highly leveraged,' according to our criteria," S&P said. "Our assessment of Freedom Group's business risk profile as weak reflects the company's exposure to unfavorable changes in commodity prices, vulnerability to changes in regulation, and a highly competitive operating environment for discretionary consumer spending dollars," said Standard & Poor's credit analyst Ariel Silverberg. "We believe Freedom Group's leading position in many of the markets in which it operates, its breadth of product offerings, and strong brand recognition partly offset the aforementioned weaknesses." "The stable outlook reflects our expectation for modest growth in EBITDA and debt reduction to propel improvement in debt to EBITDA toward the mid-5x area by 2013, in line with the current rating. A higher rating is unlikely over the intermediate term, as it would necessitate a reassessment of Freedom Group's business risk profile and a meaningful reduction in leverage to at least the mid-4x area," S&P said. "We could lower the rating if leverage rises above 6x on a sustained basis or interest coverage falls to the mid-1x area. This could result from declines in demand or increasing commodity prices, combined with an inability to pass them on to customers through higher prices," S&P said. GALLANT ACQUISITIONS: Conroe Golf Course Files for Chapter 11 ------------------------------------------------------------- Gallant Acquisitions Ltd. filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-33353) in Houston, Texas on May 1, 2012. In the petition, the Debtor disclosed total assets of $10 million and total liabilities of $9.15 million, all on account of liquidated secured debt. The Debtor owns various properties in Texas, including a 130-acre Land & Golf Course and 32-acre multiuse land on Highway 105, in Conroe, Texas. A copy of the schedules filed with the petition is available for free at http://bankrupt.com/misc/txsb12-33353.pdf GALLANT ACQUISITIONS: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Gallant Acquisitions Ltd. 13878 Longwood Drive Willis, TX 77318 Bankruptcy Case No.: 12-33353 Chapter 11 Petition Date: May 1, 2012 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Jeff Bohm Debtor's Counsel: Barbara Mincey Rogers, Esq. ROGERS & ANDERSON, PLLC 1415 North Loop West, Suite 1020 Houston, TX 77008 Tel: (713) 868-4411 Fax: (713) 868-4413 E-mail: brogers@ralaw.net Scheduled Assets: $10,000,000 Scheduled Liabilities: $9,150,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Warrant Gallant, president of Gallan GP, LLC, general partner. GATEHOUSE MEDIA: Incurs $13.4 Million Net Loss in First Quarter --------------------------------------------------------------- Gatehouse Media, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $13.37 million on $120.01 million of total revenues for the three months ended April 1, 2012, compared with a net loss of $18.19 million on $119.81 million of total revenues for the three months ended March 27, 2011. The Company's balance sheet at April 1, 2012, showed $493.34 million in total assets, $1.31 billion in total liabilities and a $823.70 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/jXHA3Y About GateHouse Media GateHouse Media, Inc. -- http://www.gatehousemedia.com/-- headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites. The Company reported a net loss of $22.22 million for the year ended Jan. 1, 2012, a net loss of $26.64 million for the year ended Dec. 31, 2010, and a net loss of $530.61 million for the year ended Dec. 31, 2009. Bankruptcy Warning According to the Form 10-K for the year ended Dec. 31, 2011, the Company's ability to make payments on its indebtedness as required depends on its ability to generate cash flow from operations in the future. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond the Company's control. There can be no assurance that the Company's business will generate cash flow from operations or that future borrowings will be available to the Company in amounts sufficient to enable it to pay its indebtedness or to fund our other liquidity needs. Currently the Company does not have the ability to draw upon its revolving credit facility which limits its immediate and short- term access to funds. If the Company is unable to repay its indebtedness at maturity the Company may be forced to liquidate or reorganize its operations and business under the federal bankruptcy laws. GATEWAY CENTER: Files for Chapter 11 in Jacksonville ---------------------------------------------------- Gateway Center Economic Development Partnership, Ltd., filed a bare-bones Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-bk- 03038) on May 3, 2012, in Jacksonville. The Debtor estimated assets and debts of $10 million to $50 million. According to the list of top unsecured claims, Gateway Retail Center, LLC, owner of a Retail Shopping Center located at 5000-7 Norwood Avenue, in Jacksonville, has a $15.09 million claim, of which $14.1 million is secured. Colbyco Enterprises, Inc., owns 65.4% of the Debtor. GENERAL MARITIME: Wins Confirmation of Reorganization Plan ---------------------------------------------------------- General Maritime Corporation disclosed that the U.S. Bankruptcy Court for the Southern District of New York confirmed the second amended joint plan of reorganization of the Company and its direct and indirect subsidiaries that are debtors under Chapter 11 of the Bankruptcy Code. General Maritime currently expects to emerge from Chapter 11 in May 2012 after the conditions to effectiveness of the Plan are satisfied. The Plan reflects the terms of a global settlement among the Company's main creditor constituencies that, among other things, provides for a meaningful recovery to the unsecured creditors of the Debtors and resolves all disputes on plan-related issues between and among the Debtors, funds managed by Oaktree Capital Management, L.P. and their investment entities, the Official Committee of Unsecured Creditors, the Company's senior secured lenders, and holders of more than 57% of the Company's Senior Notes. All voting classes of creditors voted in favor of the Plan, with the Debtors' senior secured lenders voting unanimously in favor of the Plan and approximately 97% in amount and 69% in number of general unsecured creditors voting in favor of the Plan. The Plan will substantially deleverage the Debtors' balance sheet and position the Debtors to be a financially stronger global enterprise post-emergence. Through the Plan, (i) the Debtors' financial debt will be reduced by approximately $600 million, (ii) the Debtors' cash interest expense will be reduced by approximately $42 million annually, and (iii) the Debtors will receive a new equity capital infusion of approximately $175 million from the Oaktree Funds. Jeffrey D. Pribor, General Maritime's Chief Financial Officer, said, "The confirmation of our Plan represents a major milestone and is one of the last remaining steps in our restructuring. We are proud of what we have accomplished and believe that, through this process, we will establish a foundation to emerge as a stronger and more competitive company. I would like to thank our customers and vendors for their support throughout this process as well as our employees for their ongoing to commitment to General Maritime." Under the Plan, holders of unsecured claims against the Company and its Debtor subsidiaries that guarantee the Company's obligations under its secured credit facilities will share in $6 million in cash, warrants exercisable for up to three percent of the equity in the reorganized Company, and two percent of the equity in the reorganized Company. The Plan provides that the Debtors' prepetition senior lenders will receive a $75 million paydown of their existing prepetition obligations and provide exit financing to the Debtors. Funds managed by Oaktree Capital Management will receive 98% of the equity in the reorganized Company for the $175 million equity capital infusion and the conversion of $175 million of secured claims against the Company. The common stock of the Company will be extinguished under the Plan and holders of the Company's common stock will not receive a distribution under the Plan. Hearing Thursday Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that General Maritime convinced the bankruptcy judge at a hearing Thursday to sign an order approving the Chapter 11 plan that reduces debt for borrowed money by $600 million. In return for a $175 million equity infusion and the conversion of secured debt into equity, affiliates of Oaktree Capital Management LP will receive 98% of the new stock. According to the report, impediments to confirmation were resolved with a settlement sweetening the pot for unsecured creditors. The plan gives them $6 million in cash, 25 of the new stock, and warrants for another 3%, for a predicted 5.41% recovery. Before enhancement, the unsecured creditors' committee was opposing the plan and the maximum 1.88% it was then offering. 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. GENON ENERGY: S&P Cuts Corp. Credit Rating to 'B-'; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on GenOn Energy Inc. to 'B-' from 'B'. "We left unchanged our various recovery ratings on various debt issues throughout the capital structure. At the same time, we lowered our corporate credit ratings on GenOn's subsidiaries, GenOn Energy Holdings Inc., GenOn Americas Generating LLC, and GenOn REMA LLC, to 'B-' from 'B'. We also lowered our issue ratings on GenOn and all subsidiaries, including GenOn Mid-Atlantic LLC, by one notch. The rating outlook is stable," S&P said. "The downgrades reflect the group's reduced cash flow prospects as result of continued margin compression," said Standard & Poor's credit analyst Terry Pratt. "We view GenOn Energy's financial risk profile as even more highly leveraged than it was before given our expectation of weaker operating cash flows as a result of low natural gas prices and several plant closures. The business risk profile remains 'weak' under our criteria. The company's good liquidity position partially mitigates the worsened cash flow forecast." "The stable ratings outlook reflects financial performance over the medium term which we expect will likely be on the weak side for the rating, offset by large liquidity balances. We would consider a negative ratings action if the Cross-State Air Pollution Rule comes into effect and results in a mild deterioration in financial performance or significant capital expenditures that drain liquidity. In terms of metrics, we would consider a negative ratings action if FFO to debt falls below 2% in 2012 and we do not believe it will likely improve to at least 6% in 2013-14. Although we think GenOn can accommodate some additional decline in power prices with its available liquidity, we could lower the ratings if natural gas prices drop substantially from our current deck of $2/mmBtu. We would also consider a downgrade if GenOn's liquidity position erodes materially relative to our forecast. A positive outlook or upgrade would require more visibility on the impact of emission regulations, in terms of both capital expenditures and market prices. We would only consider a positive rating action if we believed FFO to debt will likely rise above about 12%," S&P said. GRACE INDUSTRIES: Court Permits Discovery in NYSDOT Dispute ----------------------------------------------------------- Bankruptcy Judge Carla Craig granted the motion of New York State Department of Transportation seeking to compel GII Industries, Inc. f/k/a Grace Industries, Inc., to produce in connection with an upcoming bench trial certain documents pertaining to the amount of overhead and profit GII included in its bid for a project on the West Side Highway in Manhattan. The case is, GII Industries, Inc., f/k/a Grace Industries, Inc., v. New York State Department of Transportation, Adv. Proc. No. 07-1464 (Bankr. E.D.N.Y.). A copy of the Court's April 30, 2012 decision is available at http://is.gd/XAXTpEfrom Leagle.com. On Aug. 15, 2007, GII commenced the adversary proceeding asserting a breach of contract claim against NYSDOT, seeking $7,870,619 in damages, and seeking a declaratory judgment with respect to the rights and obligations of the parties pursuant to an alleged agreement dated March 3, 2003. On Oct. 1, 2007, NYSDOT interposed an answer to the complaint, including a counterclaim asserting that GII had received more than its actual, reasonable, and verifiable costs, and seeking to recover the excess amount paid to GII. On Jan. 29, 2008, GII filed an amended complaint, seeking damages of $10,680,503 for NYSDOT's breach of contract, and again seeking a declaratory judgment with respect to the Agreement. On March 12, 2008, NYSDOT interposed an answer to the amended complaint, and again asserted a counterclaim seeking to recover excess payments made to GII. On March 24, 2008, GII interposed an answer to NYSDOT's counterclaim. On July 22, 2008, the Court issued a consent order assigning the disputes between NYSDOT and GII to mediation. The parties reached an impasse regarding the issue of enforceability of the Agreement, and whether it may be rescinded. A four day trial was conducted in connection with the parties' request for a determination of these issues. On Sept. 23, 2009, the Court issued a decision concluding that the Agreement was not supported by consideration and was therefore not enforceable as a contract pursuant to New York law. After that decision, the parties returned to mediation. However, another impasse was reached with respect to (i) the appropriate cost methodology for the parties to use to calculate GII's damage claim against NYSDOT and (ii) (a) whether GII is entitled to prejudgment interest and (b) from what date should prejudgment interest begin to accrue. After another multi-day trial, the Court issued a decision and a separate order on Sept. 30, 2011, directing GII to calculate its claim using a total cost methodology and awarding GII the right to recover prejudgment interest. A third trial is presently scheduled to commence in October 2012 to determine the actual value of GII's claims using the total cost methodology and to resolve NYSDOT's counterclaims for recovery of certain estimated payments made to GII. NYSDOT filed the Motion in connection with the upcoming trial on these issues. About GII Industries Headquartered in Whitestone, N.Y., Grace Industries Inc. nka GII Industries, Inc., -- http://www.graceindustriesinc.com/-- specializes in asphalt manufacturing & paving, concrete paving; airport, highway & bridge construction; electrical, interior and exterior engineering and design; demolition, foundations, piling, real estate, and roads, sewer and water main construction. The Company and its debtor-affiliate Grace Asphalt, Inc., filed for chapter 11 protection on Dec. 6, 2004 (Bankr. E.D.N.Y. Case Nos. 04-27013 and 04-27015). Matthew G. Roseman, Esq., at Cullen and Dykman Bleakley Platt LLP, represents the Debtors in their restructuring. Gordon Z. Novod, Esq., and P. Bradley O'Neill, Esq., at Kramer Levin Naftalis & Frankel LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they reported $46 million in total assets and $30 million in total debts. Grace appears to have emerged from chapter 11 in 2006 under the terms of a confirmed chapter 11 plan. HAWKER BEECHCRAFT: Files for Chapter 11 in New York for Debt Swap ----------------------------------------------------------------- Hawker Beechcraft Inc., a designer and manufacturer of light and medium-sized jet, turboprop and piston aircraft, filed for Chapter 11 reorganization Thursday in New York, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan, to be filed by June 30, will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Robert S. (Steve) Miller, CEO of Hawker Beechcraft said, "We are pleased to have reached an agreement with our largest lenders and bondholders on a solution to stabilize and improve our capital structure. In the last three years, the company has made aggressive transformational changes in all operational functions, and today's announcement represents the next step forward. Restructuring our balance sheet and recapitalizing the company in partnership with our debtholders will dramatically improve Hawker Beechcraft's ability to compete in a rapidly changing environment." Some of the senior prepetition lenders are providing $400 million in financing for the Chapter 11 effort. The company's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Road to Bankruptcy The company blamed its bankruptcy on declining sales resulting from the economic downturn in recent years. "Since the onset of the global economic crisis, the Debtors have taken a series of operational and financial measures in an attempt to respond to changing market conditions and declining demand for the Debtors' aircraft. However, given the severity and prolonged duration of the economic crisis, the Debtors have been unable to maintain profitability through cost-cutting and self-help measures alone. Revenue of $2.34 billion in 2011 represented a 34% decline from 2008. The Debtors delivered just 291 aircraft in 2011, compared with 477 in 2008, 418 in 2009, and 318 in 2010. Despite their best efforts, the Debtors can no longer afford to maintain their current capital structure. Earnings before interest, taxes, depreciation and amortization in 2011 was $53.8 million, after reporting EBITDA of $72.2 million in 2010, $127.3 million in 2009, and $338.6 million in 2008. The Debtors are levered 33x on a secured debt basis and 46x on a total debt basis, based on 2011 EBITDA. Prepetition Capital Structure Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Total debt for borrowed money is $2.38 billion, including $1.827 billion of obligations under a senior secured credit facility. Unsecured debt for borrowed money consists of $409 million in senior fixed-rate notes, $415.7 million in senior notes paying interest with more debt, $308.3 million in senior subordinated notes, and a $59.6 million facility with Export Development Canada. Other claims include pensions underfunded by $493 million. The equity interests in Hawker Beechcraft, Inc., the direct or indirect owner of all of the Debtors' subsidiaries are held 49% each, by affiliates of GS Capital and Onex, with the remainder owned by certain existing and former members of the Debtors' management. First Day Motions Hawker Beechcraft and 17 debtor-affiliates on Friday obtained approval of their first day motions from Judge James M. Peck. Among the first-day motions granted, Hawker Beechcraft received approval to continue to pay employees, and to pay all vendors and suppliers in the ordinary course for goods and services delivered after the commencement of the Chapter 11 case. The company will utilize a commitment for $400 million in Debtor-in-Possession (DIP) financing, negotiated as part of the prearranged restructuring, to meet these obligations. The Debtors estimate that they have over 1,600 vendors to whom they owe $225 million on account of goods or services provided prior to the petition date. The Debtors sought, however, to pay only up to $81 million, or approximately 35%, to their most essential vendors and suppliers, approximately half of which is owed on account of 11 U.S.C. Section 503(b)(9) Claims. According to the PBGC, Hawker's pension plans are 56% funded, with $769 million in assets to cover $1.4 billion in benefits. With respect to the Debtors' motion to continue operating their cash management system in the ordinary course of business, the PBGC in a court filing asked the Court to bar intercompany transfers between the Debtors and their non-debtor affiliates and subsidiaries. The Chapter 11 Plan The Debtors and holders of a significant majority of the Debtors' secured bank debt and senior bond claims have agreed to a restructuring term sheet and have executed a restructuring support agreement. According to the restructuring support agreement, the Debtors will file a Plan that will give 81.9% of the new stock to holders of $1.83 billion of secured debt. The $780.9 million unsecured deficiency claims of secured lenders are to participate in the pool of unsecured claims to share in 18.9% of the new equity. The $308.3 million in subordinated debt will be allowed as an allowed unsecured claim, and holders of these claims will share in the new equity allocated for unsecured creditors. However, holders of the subordinated debt claims will turn over their recovery to holders of senior notes. Holders of existing equity interests won't receive anything. Key deadlines agreed by the parties include: * The Debtors' disclosure statement and Chapter 11 plan of reorganization must be filed by June 30, 2012. * The adequacy of the information in the Disclosure Statement must be approved by Aug. 31, 2012. * The Plan must be confirmed by Nov. 15, 2012. Bloomberg News notes that the $183 million in 8.5% senior unsecured notes due 2015 last traded on April 30 for 9.86 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The $302 million in 8.875% senior unsecured notes due 2015 traded Thursday for 16 cents, Trace said. The $145 million in 9.75% senior subordinated notes traded on April 26 for 3.5 cents on the dollar, according to Trace. Terms of DIP Financing Following a multi-week, competitive process, the Debtors have obtained a commitment for a fully underwritten $400 million debtor-in-possession financing facility from Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, in such capacity, which is being financed by at least four of the Debtors' prepetition lenders holding in the aggregate approximately 66% of the obligations under the Debtors' prepetition credit agreement. The facility consists of $400 million in delayed-draw loans on a superpriority, administrative claim and first priority priming lien basis, a portion of which may be applied to provide cash collateral for the issuance of letters of credit with an aggregate maximum face amount of up to $75 million and cash collateralized in an amount equal to 104% of the face amount thereof. The Debtors are requesting authority to access $300 million of the DIP Facility on an interim basis pursuant to the Interim DIP Order. In addition, the Debtors are seeking authority to use the Cash Collateral of their existing secured lenders to support the Debtors' working capital needs throughout the Chapter 11 cases. The DIP facility will expire Dec. 15, 2012, or earlier in an event of default. The PBGC is represented by: Merrill B. Stone, Esq. Benjamin D. Feder, Esq. Jennifer D. Raviele, Esq. KELLEY DRYE & WARREN LLP 101 Park Avenue New York, NY 10178 Telephone: (212) 808-7800 The ad hoc committee of Senior Secured Lenders is represented by: Richard G. Mason, Esq. Emily D. Johnson, Esq. WACHTELL, LIPTON, ROSEN & KATZ 51 West 52nd Street New York, NY 10019 Fax: (212) 403-2000 The ad hoc committee of Senior Notes is represented by: Gregory A. Bray, Esq. Cindy Chen Delano, Esq. MILBANK, TWEED, HADLEY & MCCLOY LLP 1 Chase Manhattan Plaza New York, NY 10005 Fax: (212) 530-5219 Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by: Harold L. Kaplan, Esq. Mark F. Hebbeln, Esq. FOLEY & LARDNER LLP 321 North Clark Street, Suite 2800 Chicago, IL 60654 Fax: (312) 832-4700 HAWKER BEECHCRAFT: Case Summary & 50 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Hawker Beechcraft, Inc. aka Hawker Beechcraft Holding Corp. Hawker Beechcraft Corporation 10511 East Central Wichita, KS 67206 Bankruptcy Case No.: 12-11873 Affiliates that simultaneously filed Chapter 11 petitions: Entity Case No. ------ -------- Hawker Beechcraft, Inc. 12-11873 Arkansas Aerospace, Inc. 12-11874 Beech Aircraft Corporation 12-11875 Beechcraft Aviation Company 12-11876 Hawker Beechcraft Acquisition Company, LLC 12-11877 Hawker Beechcraft Corporation 12-11878 Hawker Beechcraft Defense Company, LLC 12-11879 Hawker Beechcraft Finance Corporation 12-11880 Hawker Beechcraft Global Customer Support Corporation 12-11881 Hawker Beechcraft Holding, Inc. 12-11882 Hawker Beechcraft International Delivery Corporation 12-11883 Hawker Beechcraft International Service Company 12-11884 Hawker Beechcraft International Holding LLC 12-11885 Hawker Beechcraft Notes Company 12-11886 Hawker Beechcraft Quality Support Company 12-11887 Hawker Beechcraft Regional Offices, Inc. 12-11888 HBC, LLC 12-11889 Rapid Aircraft Parts Inventory and Distrib. Co., LLC 12-11890 Chapter 11 Petition Date: May 3, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Stuart M. Bernstein About the Debtors: Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kan., is a manufacturer of business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Debtors' Counsel: Paul M. Basta, Esq. KIRKLAND & ELLIS, LLP 601 Lexington Avenue New York, NY 10022 Tel: (212) 446-4800 Fax: (212) 446-4900 E-mail: pbasta@kirkland.com Debtors' Investment Banker: PERELLA WEINBERG PARTNERS LP Debtors' Restructuring Advisor: ALVAREZ & MARSAL NORTH AMERICA, LLC Debtors' Claims Agent: EPIQ BANKRUPTCY SOLUTIONS LLC http://dm.epiq11.com/HBC/Project# Total Assets: $2.77 billion as of Dec. 31, 2011 Total Debts: $3.73 billion as of Dec. 31, 2011. The petitions were signed by KJ Tjon, authorized signatory. Consolidated List of the Debtors' 50 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Deutsche Bank National Unsecured Notes $318,300,000 Trust Company Senior Pik Election Notes 222 South Riverside Plaza, 25th Floor Chicago, IL 60606 Victoria Douyon ? Administrative Agent E-mail: victoria.douyon@db.com Deutsche Bank National Unsecured Notes $191,900,000 Trust Company Senior Pik Election Notes 222 South Riverside Plaza, 25th Floor Chicago, IL 60606 Victoria Douyon ? Administrative Agent E-mail: victoria.douyon@db.com Deutsche Bank National Unsecured Notes $153,400,000 Trust Company Senior Pik Election Notes 222 South Riverside Plaza, 25th Floor Chicago, IL 60606 Victoria Douyon ? Administrative Agent E-mail: victoria.douyon@db.com Export Development Canada Unsecured Notes $59,600,000 150 Slater Ottawa, ON K1A 1K3 Canada Rockwell Collins Inc. Trade Payable $21,578,703 400 Collins Road NE Cedar Rapid, LA 82498 Honeywell International Inc. Trade Payable $12,271,215 111 S. 34Th Street Phoenix, AZ 85034 Pt Lion Mentari Customer Deposit $10,000,000 Lion Air Tower, 8Th Floor Jln. Gajah Mada No. 7 Jakarta Pusat, 10130 Indonesia Attn: Rusdi Kirana ? President Director E-mail: Rusdi.Kirana@Lionair.Com.Sg Nigerian Presidential Air Wing Customer Deposit $9,000,000 Nnamdi Azikiwe International Airport Presidential Air Fleet Abuja Nigeria Mr. Ma Yakubu ? Group Captain Email: Maminuyana@Yahoo.Com IBM Corp Trade Payable $8,221,075 New Orchard Road Armonk, NY 10504 Dave Miller ? Managing Partner, Americas And Global Industrial Sector E-mail: David.E.Miller@Us.Ibm.Com Perfectura Naval Argentina Customer Deposit $7,782,446 Aeropuerto Internatcional De San Fernando Hangar De Pna Ruta 202 Esquina Balcarce Buenos Aires, San Fernando, 1646 Argentina Majo Lezama - Major E-mail: Majo_Lezama@Aerobaires.Com.Ar Airbus Operations Limited Trade Payable $7,591,839 1 Rond-Point Maurice Bellonte 31707 Blagnac Cedex France Soeren Fischer - Vice President Diversification Programme E-mail: Soeren.Fischer@Airbus.Com Madis Management Customer Deposit $7,000,000 Morgan And Morgan Building Pasea Estate P.O. Box 958 Road Town, Tortola, Virgin Islands (British) Mr. Vladimir Ann ? CEO E-mail: Anvv1968@Mail.Ru Aernnova Aerospace Mexico Sa De Cv Trade Payable $6,656,419 Av Benito Juarez No109 Piq Queretaro, 76220 Mexico Inaki Lopez Gandasegui - CEO E-mail: Luis.Perez@Aernnova.Com Fuji Heavy Industries Ltd. Trade Payable $6,173,372 101011 Yonan Utsunomiya Tochigi, 3208564 Japan Shoichiro Tozuka ? Vice President Email: Tozukas@Uae.Subaru-Fhi.Co.Jp Flightsafety Services Corp Trade Payable $6,129,904 La Guardia Airport Flushing, NY 11371 Avion Pacific Limited Customer Deposit $5,800,366 Room 1501, 15/F Wanchai Commercial Building 194-204 Johnston Road Wanchai Hong Kong Wu Zhendong ? Managing Director E-mail: Bei@Avionpacific.Com Labinal De Mexico Trade Payable $5,484,664 12120 Esther Lama Dr El Paso, TX 79936 Karen Bomba ? CEO E-mail: Karen.Bomba@Us.Labinal.Com Inter Aviation Customer Deposit $5,000,000 1-3 Verii Street 3rd Floor - Et 3 Room 303, Sector 2 Bucharest, 20723 Romania Ms. Olivia Ticleanu - Counsellor Email: Olivia@Interagro.Ro Corporate Aircraft S.A. Customer Deposit $4,922,165 Palazzo Del Sole Roveredo, 6535 Switzerland Email: T.Letourneur@Corporate- Aircraft.Com L3 Communications Trade Payable $4,761,392 555 Inductrial Drive South Madison, IL 39110 Donald Spetter - CEO Email: Edi.Info@L-3Com.Com Hawker Pacific Pty. Ltd. Customer Deposit $4,220,978 112 Airport Avenue Bankstown Airport Sydney, NSW, 2200 Australia Tony Jones - Senior Vice President E-mail: Tony.Jones@Hawkerpacific.Com Genuine Parts Company Customer Deposit $4,000,000 2999 Circle 75 Parkway Atlanta, GA 30339 Scott Smith - Senior Vice President & Corporate Counsel E-mail: Wbrown1945@Bellsouth.Net IQ Navigator Inc. Trade Payable $3,970,400 6465 Greenwood Plaza Boulevard, Suite 800 Centennial, CO 80111 Art Knapp - Evp Global Service Delivery Email: Aknapp@Iqnavigator.Com Messier Dowty Inc. Trade Payable $3,933,968 574 Monarch Avenue Ajax, ON L1S2GB Canada Lider Taxi Aero S.A. Air Brazil Customer Deposit $3,872,333 Av. Santa Rosa, 123 Pampulha Belo Horizonte, Minas, 31270-750 Brazil Eduardo Vaz - President E-mail: Eduardo.Vaz@Lideraviacao.Com.Br Netjets Middle East/Nasjets Customer Deposit $3,649,329 Po Box 305161 1St Floor Al Salam Center Prince Muhammad Ibn Abdulaziz (Tahliya) Street Olaya, Riyadh, 11361 Saudi Arabia Attn: Mr. Salaiman Al Hamdan - CEO E-mail: Salhamdan@Nasaviation.Com Computer Sciences Corporation Trade Payable $3,557,136 1520 Hughes Way Long Beach, CA 90810 Pete Wiese - Director E-mail: Kwiese@Csc.Com Martin Baker Aircraft Co Ltd. Trade Payable $3,386,542 Lower Road Higher Denham Uxbridge, Middlesex, UB9 5AJ United Kingdom Cmc Electronics Inc. Trade Payable $3,244,410 600 Dr. Federik-Phillips Boulevard Ville Saint-Laurent Quebec, H4M259 Canada Spirit Aerosystems Europe Limited Trade Payable $2,761,492 Glascow Prestwick Airport Prestwick Ayrchire Prestwick Ayrshire, Scotland, KA9 2RW United Kingdom Colentra Leasing Enterprises Ltd Customer Deposit $2,149,008 30 Karpenisiou Nicosia, Cyprus Mr. Viktor Lebed - Chairman E-mail: Colentra@Spidernet.Com.Cy Itochu Aviation Inc. Customer Deposit $2,102,685 Suite 2200, 222 N. Sepulveda El Segundo, CA 90245 Claire Hanna - Sr. Manager E-mail: Nobu@Iaj.Co.Jp Be Aerospace Consumables Trade Payable $1,633,602 Management 9100 Northwest 105Th Circle Miami, FL 33178 Wayne Exton - Group Vice President E-mail: Wayne_Exton@Beaerospace.Com Airviaggi San Raffaele S.R.1. Customer Deposit $1,530,000 Via Olgettina North 60 Milan, 20132 Italy Fokker Elmo Bv Trade Payable $1,523,251 Postbus 75 Hoogerheide, Noord-Holland, 4630 AB Netherlands Dassault Systemes Americas Corp Trade Payable $1,513,231 10330 David Taylor Rd Charlotte, NC 28262 Bob Waddell E-mail: Robert.Waddell@3Ds.Com North Slope Borough Customer Deposit $1,504,851 P.O. Box 69 Barrow, AK 99723 Satyam Computer Services LTD Trade Payable $1,493,149 Unit-12, Plot No. 35/36 Hyderabad, Andhra Pradesh, 500 081 India Global Parts Inc. Trade Payable $1,475,531 901 Industrial Road Augusta, KS 67010 Attn: Troy T. Palmer - CEO E-mail: Roypalmer@Globalparts.Aero The Highland Consulting Group Inc. Trade Payable $1,343,533 933 South Talbot Street, Suite 15 Saint Michaels, MD 21663 Aviaservice International, N.V. Customer Deposit $1,328,830 Pareraweg 45 Americorp Building Willemstad, Curacao, Netherlands Istvan (Steve) Von Fedak - Executive Vice President E-mail: Lvfedak@Gmail.Com Hamilton Sundstrand Corporation Trade Payable $1,208,116 1 Hamilton Road Windsor Lock, CT 6095 Am Castle & Co Trade Payable $1,206,874 1420 Kensington Road, Suite 220 Oak Brook, IL 60523 Aircell Inc. Trade Payable $1,179,695 1172 W. Century Drive Louisville, CO 80027 Pilatus Aircraft Ltd. Trade Payable $1,174,024 P.O. Box 992 Stans, 6371 Switzerland Attn: Oskar Bruendler - Senior Vice President, Special Projects, Audit & Compliance E-mail: Obruendler@Pilatus-Aircraft.Com CE Machine Co Inc. Trade Payable $1,162,452 1741 S. Hoover Court Wichita, KS 67209 Brian Eck - CEO E-mail: Brian@Cemachine.Com Air Routing Card Services LP Trade Payable $1,143,463 400 Collins Road NE Cedar Rapid, LA 82498 Topstone Investment Corp Customer Deposit $1,031,650 Whitehall House - 238 North Church Street ? 3rd Floor P.O. Box 1334-Ky-1-1108 George Town Grand Cayman, Cayman Islands Adriana Porto Dias E-mail: Adrianadias@Hpd.Com.Br Himalyaputra Aviation Limited Customer Deposit $1,000,000 Sector 128, District Gautam Budh Nagar Uttar Pradesh, 201304 India Pension Benefit Pension Benefit Unliquidated Guarantee Corporation HAWKER BEECHCRAFT: Bank Debt Trades at 33% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Hawker Beechcraft is a borrower traded in the secondary market at 67.29 cents-on- the-dollar during the week ended Friday, May 4, 2012, an increase of 3.57 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on March 26, 2014, and carries Moody's Caa3 rating and Standard & Poor's D rating. The loan is one of the biggest gainers and losers among 162 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft reported a net loss of $631.90 million on $2.43 billion of sales in 2011, compared with a net loss of $304.30 million on $2.80 billion of sales in 2010. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities, and a $956.90 million total deficit. Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. HAZLAHA, LLC: Case Summary & 3 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Hazlaha, LLC 9975 Santa Monica Boulevard Beverly Hills, CA 90212 Bankruptcy Case No.: 12-25458 Chapter 11 Petition Date: May 1, 2012 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Barry Russell Debtor's Counsel: Brian L. Davidoff, Esq. DAVIDOFF GOLD, LLP 1900 Avenue of the Stars, 20th Floor Los Angeles, CA 90067 Tel: (310) 201-7501 Fax: (310) 402-5026 E-mail: bdavidoff@davidoffgold.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $0 to $50,000 A copy of the Company's list of its three largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/cacb12-25458.pdf The petition was signed by Michal Dakar (aka Mimi Dakar), manager and sole member. HCA INC: S&P Rates $725MM Senior Secured Term Loan 'BB' ------------------------------------------------------- Standard & Poor's Ratings Services assigned its issue-level rating of 'BB' (two notches above the 'B+' corporate credit rating on the company) to Nashville-based HCA Inc.'s $725 million senior secured A-3 term loan due 2016. "We also assigned this debt a recovery rating of '1', indicating our expectation of very high (90% to 100%) recovery in the event of a payment default," S&P said. All issue-level and recovery ratings on the company's existing debt issues remain unchanged, as does the 'B+' corporate credit rating. The rating outlook is stable. "The ratings on HCA reflect Standard & Poor's assessment of its business risk profile as 'fair' and its financial risk profile as 'highly leveraged,' according to our criteria," said Standard & Poor's credit analyst David Peknay. "The ratings also reflect our expectation mid-single-digit organic growth rate driven by blended rate increases under 3% and small increases in patient volume, and no further significant acquisition activity beyond the recent acquisition of the remaining interest in HCA-HealthONE LLC in Denver." "Our rating outlook on HCA is stable. HCA's recent earnings weakness has been influenced by pricing pressure, adverse payor mix shift, and still-increasing total uncompensated care. We expect these industry difficulties to continue to pressure EBITDA margins. We also expect the company to maintain its historically aggressive, shareholder-friendly policies," S&P said. "If HCA can sustain margins, keep bad debt expense relatively controlled, and, most importantly, commit to an improvement in its financial risk profile to aggressive from highly leveraged, we could raise the rating," S&P said. "However, because we believe any near-term improvement will be temporary, we do not believe an upgrade is possible for the next year, to give the company an opportunity to demonstrate such commitment. Conversely, if HCA cannot overcome industry pressure on earnings and cash flow, or if shareholder distributions become excessive to the point that lease-adjusted debt to EBITDA climbs well above 6x, we could consider a lower rating. We believe that, without debt-financed shareholder activity, HCA's EBITDA margin would have to fall about 350 basis points from recent levels for leverage to increase this much. This would occur before any concern about covenant compliance because of the large covenant cushion," S&P said. JEFFERSON COUNTY, AL: State Senate Approves Revival of Jobs Tax --------------------------------------------------------------- Verna Gates at Reuters reports that the Alabama State Senate has approved a bill allowing Jefferson County to revive a local jobs tax that county officials say is central to working out its $4.27 billion bankruptcy case. According to the report, the bill, which must also be approved by the legislature's lower house and the governor, would allow any county in Alabama seeking relief from creditors under Chapter 9 of the U.S. Bankruptcy Code to levy and collect taxes. The bill is worth about $60 million a year to Jefferson County and passed in Montgomery with a vote of 16 to 11, with one senator abstaining. The report relates, in Alabama, the state constitution grants all taxing authority to the state legislature. Local state legislators that have effective veto power over Jefferson County legislation have been divided over how and whether to allow a revenue fix. The report notes an amendment reauthorizing the occupational tax added a clause limiting the life of the levy to three years, giving the county time to complete its bankruptcy. The report adds the Distressed County Bill also allows local officials unencumbered use of the collected taxes, unlike other occupational tax bills that reserved some tax revenues for fixed purposes or tied tax rates to sewer rates. A new occupational tax would replace one struck down by the Alabama Supreme Court last year. The occupational tax provided $66 million in revenue; its loss crippled the county's general fund, causing it to default on payments for a general obligation bond on April 2, according to the report. The report says county officials have repeatedly said replacing the tax was crucial for preparing a plan for repaying JPMorgan Chase and other creditors that must be approved by a federal judge. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Alabama legislature is moving bills forward that would allow the state's Jefferson County to impose taxes on wages and increase sales taxes. A county commissioner has said that the county can't reorganize without more revenue. The county's financial problems are partly the result of the state Supreme Court's invalidation of a 25-year-old wage tax that generated one- quarter of the county's revenue. Only the state legislature has power to give the county additional taxing authority. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. KIM'S PROVISION: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Kim's Provision Co., Inc. Hunts Point Coop Market, Building G-2 Bronx, NY 10474 Bankruptcy Case No.: 12-11820 Chapter 11 Petition Date: May 1, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Stuart M. Bernstein Debtor's Counsel: Sangwon D. Sohn, Esq. SANGWON D. SOHN, ATTORNEY AT LAW 2071 Lemoine Avenue, Suite 301 Fort Lee, NJ 07024-6007 Tel: (201) 947-5225 Fax: (201) 947-5355 E-mail: SWDSohn@Gmail.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its seven largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb12-11820.pdf The petition was signed by Ki Kim, president. KUNKEL REAL ESTATE: Case Summary & 14 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Kunkel Real Estate Investments LLC 311 Golf Rd., Suite 100 West Palm Beach, FL 33407 Bankruptcy Case No.: 12-20893 Chapter 11 Petition Date: May 1, 2012 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman Jr. Debtor's Counsel: Joshua T Hauserman, Esq. HARRINGTON LAW ASSOCIATES, PLLC 100 S Olive Ave. West Palm Beach, FL 33401 Tel: (561) 253-6690 Fax: (561) 429- 8488 E-mail: joshua@myhlaw.com Scheduled Assets: $867,971 Scheduled Liabilities: $2,070,733 A copy of the Company's list of its 14 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flsb12-20893.pdf The petition was signed by Susan M. Kunkel, managing member. LAKELAND DEVELOPMENT: Files for Chapter 11 in Los Angeles --------------------------------------------------------- Lakeland Development Company filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-25842) in Los Angeles on May 4. According to the case docket, the schedules of assets and liabilities, the statement of financial affairs and other incomplete filings are due May 18, 2012. The Debtor has filed a motion to use cash collateral and an emergency motion to pay prepetition wages and benefits. Lakeland is a privately held subsidiary in a family of companies headed by Energy Merchant Corp. Lakeland Processing Company is a sister company of Lakeland. Lakeland has 19 employees engaged in the rendition of services in a waste water reclamation facility located on its real property. Lakeland changed its name from Cenco Refining Company in June 2004. Lakeland owns the real property located at 12345 Lakeland Road, Santa Fe Springs, California 90670. The real property is composed of ten parcels totaling approximately 55 acres forming a rectangular tract bounded by Lakeland Avenue, Florence Avenue and Bloomfield Avenue, and abutting a tract owned by others which runs along Norwalk Boulevard. Michael Egner explains in a bankruptcy court filing that the Debtor's property had been used as an oil refinery commencing in the 1930's and as a general disposal repository for the petroleum industry from 1949 through at least 1964. Chemicals of significant environmental concern were discovered at the site, and a suit was brought by the Community Development Commission of the City of Santa Fe Springs in the Los Angeles Superior Court, Case No. VC 03890 which ultimately led to the issuance of an injunction requiring the remediation of the contaminants on/in the property in accordance with the Water Board's Order. That injunction remains in effect. In addition, the Environmental Protection Agency commenced an action in the United States District Court for the Central District of California, Western Division, seeking reimbursement of certain fees, costs, and expenses and the assessment of certain penalties in connection with the environmental issues surrounding the property. A Consent Decree was entered in 2008, and that judgment was recorded thereby encumbering the property. The Debtor has been working with the EPA, the City of Santa Fe Springs, and the various authorities of the State of California to develop the methods and means of remediating the property. These authorities have not pressed forward with the remedies available to them because they are satisfied that the Debtor is working hard and effectively to fulfill its duties. The Option Agreement with Western is designed to provide the funding for the clean up which will start shortly after funding is received. LEHMAN BROTHERS: Monday Properties to Manage 237 Park Ave. --------------------------------------------------------- Lehman Brothers Holdings Inc. appointed Monday Properties as the managing agent for its 21-storey office building located at 237 Park Avenue in New York, according to an April 30 report by Citybizlist Real Estate. Lehman's appointment of Monday Properties comes after the company obtained full ownership and control of the property early last month. 237 Park Avenue is a building "we are very familiar with as a prior owner and managing agent," Citybizlist quoted Anthony Westreich, chief executive officer of Monday Properties, as saying. Monday Properties served as managing agent for 237 Park from 1999 to 2009. In 2003, it bought the property and leased over 325,000 square feet. In turn, Monday Properties recapitalized the asset in 2005 with Beacon Capital Partners. The Monday-Beacon venture sold 237 Park Avenue to Broadway Partners in May 2007. Monday Properties remained the managing agent until 2009, according to the report. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. 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 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. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. 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 215/945-700) LEHMAN BROTHERS: Claims Totaling $6.4-Bil. Traded in March ---------------------------------------------------------- Almost a thousand claims against Lehman Brothers Holdings Inc. totaling about $6.5 billion were traded in March 2012. Among the claims traded in March were: Claimant Claim No. Claim Amount -------- --------- ------------ Banca Monte dei Paschi di Siena S.p.A. 56130 $163,061,881 Chase Lincoln First Commercial Corporation 27553 110,479,860 Goldman Sachs Bank USA 28099 100,000,000 Goldman Sachs International 28104 100,000,000 Deutsche Bank AG, London Branch 59006 120,489,700 Deutsche Bank AG, London Branch 58233 109,158,566 Deutsche Bank AG, London Branch 58233 113,289,019 Goldman Sachs Lending Partners LLC 15921 459,325,000 Lehman Brothers International (Europe) 62783 150,177,083 An April 5, 2012, report prepared by Second Market showed that the claims trading market closed the first quarter on a high note. The aggregate dollar amount of transfers topped $6.2 billion, an 88% increase from February, the report said. In February, more than 600 claims were traded during the month, with an aggregate amount totaling more than $3.6 billion. Lehman continues to be the top player in the claims trading market both in terms of dollar amount of claims traded and the volume of claims traded. LEHMAN BROTHERS: New Docs Reveal Huge Pre-Bankruptcy Pay to Execs ----------------------------------------------------------------- New documents filed in Lehman Brothers' bankruptcy case reveal the extraordinary compensation bestowed on 50 of the bank's highest- paid employees in the years leading to its demise in September 2008, Peter Lattman of The New York Times reported on April 27. According to the documents, Robert Millard, head of Lehman's proprietary trading operations -- the group that traded the bank's own money -- was in line to make $51.3 million in 2007, making him the highest-paid employee on a list of the top-50 paid employees that year. The list shows that he was paid $44.5 million in 2006 and $3.8 million in 2005, the document said, the NY Times reported. Mr. Millard now runs Realm Partners, a hedge fund in New York, the NY Times noted. The report also disclosed that the second highest Lehman employee was Marvin Schwartz, the low-profile, legendary money manager at Lehman's Neuberger Berman unit. He was paid $31.2 million in 2007, $27 million the year before and $14.8 million in 2005, the documents revealed. Mr. Schwartz is still at Neuberger, which spun out of Lehman and is now an independent, privately held company, the NY Times disclosed. The third highest-paid Lehman employee in 2007 was Jonathan Hoffman, who is listed as trading "global rates," which is trading in government bonds and more complex instruments including derivatives tied to interest rates, the NY Times reported. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. 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 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. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. 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 215/945-700) LEVEL 3: Lowers Net Loss to $138 Million Net Loss in Q1 ------------------------------------------------------- Level 3 Communications, Inc., reported a net loss of $138 million on $1.58 billion of revenue for the three months ended March 31, 2012, compared with a net loss of $205 million on $914 million of revenue for the same period during the prior year. The Company reported a net loss of $756 million in 2011, a net loss of $622 million in 2010, and a net loss of $618 million in 2009. The Company's balance sheet at March 31, 2012, showed $13.07 billion in total assets, $11.76 billion in total liabilities, and $1.31 billion in stockholders' equity. "We made good progress on integration this quarter, while delivering growth in revenue and Adjusted EBITDA," said James Q. Crowe, CEO of Level 3. With our continued focus on customer experience and the strong demand we see in the market, we believe we are well-positioned for continued growth." As of March 31, 2012, the company had cash of approximately $748 million. A copy of the press release is available for free at: http://is.gd/MoP0u8 About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. * * * Level 3 Communications carries a 'Caa1' corporate family rating, and 'Caa2' probability of default rating, with negative outlook from Moody's, a 'B-' issuer default rating from Fitch, and 'B-' long term issuer credit ratings from Standard & Poor's. As reported by the TCR on April 2, 2012, Fitch Ratings upgraded Level-3 Communications' Issuer Default Rating to 'B' from 'B-' on Oct. 4, 2011, and assigned a Positive Outlook. The rating action followed LVLT's announcement that the company closed on its previously announced agreement to acquire Global Crossing Limited (GLBC) in a tax-free, stock-for-stock transaction. LIBERTY MUTUAL: Fitch Retains Junior Sub. Notes Ratings at 'BB' --------------------------------------------------------------- Fitch Ratings has affirmed Liberty Mutual Group Inc.'s (LMG) Issuer Default Rating (IDR) at 'BBB' and LMG's operating subsidiaries' (collectively referred to as Liberty Mutual) Insurer Financial Strength (IFS) ratings at 'A-' with a Positive Outlook. Additionally, Fitch has assigned a 'BBB-' debt rating to LMG's two new debt issuances that total $1 billion. The affirmation of Liberty Mutual's operating subsidiary ratings are based on the company's established and sustainable positions in its chosen markets, benefits derived from the company's multiple distribution channels, improved core underwriting earnings, and good liquidity profile. Fitch also recognizes Liberty Mutual's moderately improved capital position and notes that recent accident year reserve estimates continue to develop favorably. For the three months ended March 31, 2012, Liberty reported a GAAP combined ratio of 100.9% that was negatively affected from natural catastrophe losses by 4.4 percentage points. LMG's net earnings were $459 million for the first three months of 2012, or a 26% improvement over the prior year primarily attributable to lower catastrophes and higher premiums. Over the past several years, LMG has gradually reduced the unfavorable margin between its underwriting results and those of its peers. LMG's commercial multi-line peers have utilized larger amounts of reserve releases than LMG in recent years, which has served to benefit its reported calendar-year results. LMG's accident-year underwriting results, excluding reserve development have improved relative to peers. Fitch believes that Liberty Mutual's capital position provides an adequate cushion against the operational and financial risks the company faces. At March 31, 2012, LMG's annualized ratio of GAAP net written premium to equity was considerably higher than peers at 1.8x; however, during the first three months of 2011, LMG's shareholder's equity increased by 3.5% to $18.5 billion from $17.9 billion at Dec. 31, 2011. On April 18, 2012, Liberty announced a tender offer for LMG's 10.75% Series C Junior Subordinated Notes due 2088 and Liberty Mutual Insurance Company's (LMIC) 7.697% Surplus Notes due 2097. The company made a second cash tender offer to purchase LMG's 5.75% Senior Notes due 2014 and its 7.3% Senior Notes due 2014. These tender offers are expected to expire in the next few weeks. In connection with the tender offer LMG issued two new debt securities: a 10-year 5% $500 million and a 30-year 6.5% $500 million offering. The proceeds of the offering are intended to be used to fund the tender offer primarily and for general corporate purposes secondarily. Fitch notes Liberty Mutual's financial leverage as of March 31, 2012 was 26.7% and on a tangible basis was 34.2%. The additional $1 billion in debt, assuming no tender offers are accepted, would increase Liberty's financial and tangible financial leverage to approximately 30% and 38%, respectively, on a pro forma March 31, 2012 basis. Liberty has indicated that response for the tender offer appears strong initially and thus Fitch estimates financial leverage will likely move to approximately 27%. Fitch notes that this tender offer has the potential for several favorable credit results to occur, primarily lower interest expense and a reduction in near-term debt maturities. However, increases in financial leverage have to be analyzed more vigorously for Liberty given the decreased financial flexibility from being a mutual company. It is important to analyze the company holistically; consequently, Fitch looks for better debt servicing metrics to compensate for the reduced financial flexibility. Key rating triggers that could lead to an upgrade include: -- Improved performance in underwriting results with a combined ratio of approximately 100%; -- Operating leverage below 1.80x; -- Financial leverage below 25%. Key rating triggers that could lead to downward rating pressure include: -- A return to accident year underwriting results that trail large multi-line peers by a wide margin of 10 points on the combined ratio; -- Material weakening in the company's current reserve position, as measured by a return to a period of multiple years of material unfavorable reserve development; -- Another large acquisition in the near term, especially if the balance sheet was weakened through increased financial leverage. Fitch has affirmed the following ratings with a Positive Outlook: Liberty Mutual Group, Inc. -- IDR at 'BBB'; -- Short-term IDR at 'F2'; -- Commercial paper at 'F2'; -- $187 million 7.25% notes due 2012 at 'BBB-'; -- $260 million 8% notes due 2013 at 'BBB-'; -- $200 million 7.3% notes due 2014 at 'BBB-'; -- $500 million 5.75% notes due 2014 at 'BBB-'; -- $249 million 6.7% notes due 2016 at 'BBB-'; -- $3 million 7.625% notes due 2028 at 'BBB-'; -- $231 million 7% notes due 2034 at 'BBB-'; -- $471 million 6.5% notes due 2035 at 'BBB-'; -- $19 million 7.5% notes due 2036 at 'BBB-'; -- 600 million 5.0% notes due 2021 at 'BBB-'; -- $300 million 7% junior subordinated notes due 2067 at 'BB'; -- $700 million 7.8% junior subordinated notes due 2087 at 'BB'; -- $942 million 10.75% junior subordinated notes due 2088 at 'BB'. Fitch has rated the following issuances of Liberty Mutual Group, Inc.: -- $500 million 4.95% notes due 2022 'BBB-'; -- $500 million 6.5% notes due 2042 'BBB-'; Liberty Mutual Insurance Co. -- IDR at 'BBB+'; -- $140 million 8.5% surplus notes due 2025 'BBB'; -- $227 million 7.875% surplus notes due 2026 'BBB'; -- $435 million 7.697% surplus notes due 2097 'BBB'. Ohio Casualty Corporation -- IDR 'BBB'; -- $20.4 million 7.3% notes due 2014 'BBB-'. Safeco Corporation -- IDR 'BBB'; -- $16.7 million 7.25% notes due 2012 'BBB-'. Fitch has affirmed the 'A-' IFS ratings with a Positive Outlook for the following members of Liberty Mutual Inter-company Insurance Pool (LMIC Pool): -- Liberty Mutual Insurance Company -- Liberty Mutual Fire Insurance Company -- Employers Insurance Company of Wausau -- Liberty Insurance Corporation -- Wausau Business Insurance Company -- Wausau Underwriters Insurance Company -- LM Insurance Corporation -- The First Liberty Insurance Corporation -- LM General Insurance Company -- Liberty Mutual Personal Insurance Company -- Liberty Personal Insurance Company -- Liberty Lloyds of Texas Insurance Company -- Liberty Surplus Insurance Corporation -- Wausau General Insurance Company -- Liberty Mutual Mid-Atlantic Insurance Company -- Insurance Company of Illinois Fitch has affirmed the 'A-' IFS ratings of the following ratings with a Positive Outlook for the following companies that participate in a 100% quota share with the LMIC Pool: -- Liberty County Mutual Insurance Company -- LM Property and Casualty Insurance Company -- Bridgefield Casualty Insurance Company -- Bridgefield Employers Insurance Company -- Liberty Insurance Underwriters Inc. Fitch has affirmed the 'A-' IFS ratings of the following ratings with a Positive Outlook for the following members of Peerless Insurance Inter-company Insurance Pool (Peerless Pool): -- Peerless Insurance Company -- Peerless Indemnity Insurance Company -- America First Insurance Company -- America First Lloyd's Insurance Company -- Colorado Casualty Ins. Company -- Consolidated Insurance Company -- Excelsior Insurance Company -- Golden Eagle Ins. Corporation -- Hawkeye-Security Insurance Company -- Indiana Insurance Company -- Mid-America Fire & Casualty -- The Midwestern Indemnity Company -- Montgomery Mutual Insurance Company -- The Netherlands Insurance Company -- National Insurance Association -- The Ohio Casualty Insurance Company -- West American Insurance Company -- American Fire and Casualty Company -- Ohio Security Insurance Company -- Safeco Insurance Company of Illinois -- American Economy Insurance Company -- American States Insurance Company -- American States Preferred Insurance Company -- Safeco Insurance Company of Indiana -- Safeco National Insurance Company -- Safeco Insurance Company of Oregon -- American States Lloyds Insurance Company -- Safeco Lloyds Insurance Company -- First National Insurance Company of America -- General Insurance Company of America -- Safeco Insurance Company of America -- Safeco Surplus Lines Insurance Company -- American States Insurance Company of Texas Fitch has affirmed the 'A-' IFS ratings of the following ratings with a Positive Outlook for the following companies that participate in a 100% quota share with the Peerless Pool: -- Liberty Northwest Insurance Company -- North Pacific Insurance Company -- Oregon Automobile Insurance Company LIGHTS & SIGNALS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Lights & Signals, Inc. aka LSI, Inc. 9827 Stowaway Cove Fort Wayne, IN 46835 Bankruptcy Case No.: 12-11511 Chapter 11 Petition Date: May 1, 2012 Court: United States Bankruptcy Court Northern District of Indiana (Fort Wayne Division) Judge: Robert E. Grant Debtor's Counsel: Daniel J. Skekloff, Esq. Sarah Mustard Heil, Esq. Scot T. Skekloff, Esq. SKEKLOFF, ADELSPERGER & KLEVEN, LLP 927 South Harrison Street Fort Wayne, IN 46802 Tel: (260) 407-7000 Fax: (260) 407-7137 E-mail: djs@sak-law.com sheil@sak-law.com sts@sak-law.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/innb12-11511.pdf The petition was signed by Rosalie Waldrop, president. LIGHTSQUARED INC: Lenders Agree to Another One-Week Extension ------------------------------------------------------------- Dow Jones Newswires' Greg Bensinger and The Wall Street Journal's Mike Spector report that people familiar with the matter said lenders to Philip Falcone's LightSquared Inc. agreed to give the Company another one-week extension when a waiver on debt-term violations expires Monday, May 7, 2012. The sources said the two sides are discussing ways to restructure LightSquared in a way that could eventually give the lenders equity in the company. The sources added the lenders want to participate in any upside should LightSquared end up tackling its problems and become successful. The report notes the extension is the second since the waiver expired April 30 and would give Mr. Falcone extra time to consider a tentative proposal to have him eventually give up his board seat and at some point take a less public role in the company's efforts to build out a nationwide high-speed mobile broadband network. If the hedge-fund manager cannot reach an agreement with lenders, he has said he may seek bankruptcy protection for LightSquared. According to the report, a person familiar with the matter said the extension could be the final reprieve before Mr. Falcone and LightSquared's lenders either reach a deal or face off in bankruptcy court. The report relates the lenders have continued to propose so-called "bankruptcy-remote" measures that would make it difficult for LightSquared to seek Chapter 11 protection at a later date, the people said. One of the proposals is to have Mr. Falcone be held personally liable should it be found he caused or influenced a decision by the company to seek bankruptcy protection at a later date, the people said. That liability would involve Mr. Falcone essentially writing a $1.7 billion check to pay back the lenders' debt, the people said. According to the report, people close to Mr. Falcone said he wouldn't agree to such a term if he's no longer on LightSquared's board or making any key decisions for the company. M/I HOMES: Moody's Rates $25MM Add-On Sr. Unsecured Notes 'Caa1' ---------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to $25 million of 8.625% add-on senior unsecured notes due 2018 issued by M/I Homes, Inc. In a related action, Moody's affirmed the company's B3 corporate family and probability of default ratings, as well as the Caa1 rating on the existing senior unsecured notes and the Caa3 rating on the company's Series A preferred shares. Proceeds of the note offering are expected to be used to enhance liquidity and for general corporate purposes. The following ratings were affected by this action: Corporate family rating affirmed at B3 Probability of default rating affirmed at B3 Proposed $25 million add-on 8.625% senior unsecured notes due November 2018 rated Caa1 (LGD4, 66%) Existing $200 million 8.625% senior unsecured notes due November 2018 affirmed at Caa1 (LGD4, 66%) versus Caa1 (LGD4, 60%) Ratings Rationale The B3 corporate family rating reflects weakness in many of M/I Homes' key credits metrics, including interest coverage and return on assets, and Moody's expectation that these metrics will remain weak through 2012 until conditions in the homebuilding industry improve. Additionally, free-cash-flow to debt will likely remain negative, unless the company reduces its land spend. At the same time, the company's corporate family rating is supported by its relatively modest adjusted debt-to-capitalization ratio relative to its similarly-rated peers, although this ratio has recently weakened due to the 2010 debt issuance. In addition, the rating acknowledges M/I Homes' conservative and disciplined operating strategy, which has helped the company stay relatively clear of significant off-balance sheet obligations and long land positions. The stable outlook reflects Moody's expectation that M/I Homes will maintain its conservative approach and disciplined operating strategy while maintaining a satisfactory liquidity profile. Moody's believes, however, that the prospects for returning to profitability over the next 12 to 18 months may be limited. The ratings could be lowered if the company's liquidity deteriorated, earnings turned increasingly negative, the size of its impairment charges increased materially, or adjusted debt leverage increased to higher than 65%. The ratings could be raised if the company augmented its liquidity position, sustainably restored profitability, and held adjusted gross debt leverage below 55%. The principal methodology used in rating M/I Homes was the Global Homebuilding Industry Methodology published in March 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Columbus, Ohio, and begun in 1976, M/I Homes, Inc. sells homes under the trade names M/I Homes, Showcase Homes, Tristone Homes and Triumph Homes, with homebuilding operations located in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Tampa and Orlando, Florida; Charlotte and Raleigh, North Carolina; the Virginia and Maryland suburbs of Washington, D.C; and Houston and San Antonio, Texas. Homebuilding revenues and consolidated net income for the twelve months ended March 31, 2012 were approximately $576 million and ($20) million, respectively. M/I HOMES: S&P Keeps B- CCR, Negative Outlook on $25MM Add-on Note ------------------------------------------------------------------ Standard & Poor's Ratings Services' ratings and outlook on Columbus, Ohio-based M/I Homes Inc. (B-/Negative/--) remain unchanged following the company's recent $25.0 million senior unsecured note add-on. "The recovery rating on the notes is '4' and reflects our expectation for an average recovery (30%-50%) in the event of a default. Following the add-on, the company will have $225.0 million 8.625% senior unsecured due notes maturing on Nov. 15, 2018," S&P said. "We expect M/I Homes to use proceeds from the add-on to bolster liquidity. As of March 31, 2012, the company had $67.0 million cash and cash equivalents and $48.5 million borrowing availability on a $140.0 million secured revolving credit facility, which had $18.3 million letters of credit outstanding and matures on Dec. 31, 2014. On April 2, 2012, M/I Homes used some of its liquidity to pay off $41.4 million 6.875% senior unsecured notes that came due. Other than letters of credit outstanding, the company has no debt maturities until 2018," S&P said. RATING LIST M/Homes Inc. Corporate credit rating B-/Negative/-- New rating M/Homes Inc. 8.625% $25.0 million senior unsecured note add-on B- Recovery rating 4 MARIANA RETIREMENT FUND: Demands Names of Objecting Creditors ------------------------------------------------------------- Northern Mariana Islands Retirement Fund is demanding that Jane Roe and Doe John, the two anonymous pensioners who sought dismissal of the Fund's bankruptcy petition, identify themselves as a condition to having their dismissal motion heard on June 1. The two pensioners contend that the fund isn't eligible for bankruptcy because it isn't a "person" as defined in the Bankruptcy Code. Instead, it's an agency of the Commonwealth of the Northern Mariana Islands. As an arm of the government, it can't be in bankruptcy, the creditors contend. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the fund responded during a court hearing on other matters by demanding under a bankruptcy rule to know the identities of Doe and Roe. The fund said there are "legitimate questions" about whether Doe and Roe's lawyers represent anyone who is actually a creditor. The fund noted in a court filing that two other judges concluded that Roe and Doe have no need for anonymity. The fund wants the bankruptcy judge to rule before the June 1 hearing whether Roe and Doe can press for dismissal without identifying themselves. The lawyers for Doe and Roe contend they are class representatives who aren't required to comply with the bankruptcy rule. Mr. Rochelle notes that if the judge decides they must disclose their identities and they don't, he has power under the rule to throw out the motion to dismiss. Assuming the hearing goes ahead, it will start at 1:30 p.m. Honolulu time on May 31 and 9:30 a.m. on June 1 in Saipan. Ferdie de la Torre at Saipan Tribune reports that the Fund, through counsel Jeremy B. Coffey, Esq., wrote a letter on May 2 to Chief Bankruptcy Judge Robert J. Faris of the U.S. Bankruptcy Court for the District of Hawaii, who is handling the case, seeking clarification regarding disclosures of the unnamed retirees' identities. Mr. Coffey said the Fund believes there are questions whether attorney Bruce Jorgensen, Esq., as the unnamed retirees' counsel, in fact represents these creditors and whether he represents parties in interest under the Bankruptcy Code. According to the Saipan Tribune, Margery Bronster, Esq., in a letter to Mr. Coffey dated April 26, 2012, stated that their clients (the unnamed retirees) are believed to be in the same situation as other retiree beneficiaries of the Fund in a pending federal court class action. Mr. Bronster said that because these unnamed creditors only represent other creditors in the bankruptcy case in their status as "class representatives," they were not required to file the disclosures required by Fed.R.Bankr.P. 2019. About NMI Retirement Fund The Northern Mariana Islands Retirement Fund -- http://www.nmiretirement.com/-- is a public corporation of the Commonwealth of the Northern Mariana Islands that receives and invests retirement contributions and pays certain benefits to or on account of certain retirees of the Commonwealth government, their survivors, and certain disabled persons. The Fund, through its administrator Richard Villagomez, filed a Chapter 11 bankruptcy petition in the U.S. District Court for the Northern District of Mariana Islands in Saipan (Case No. 12-00003) on April 17, 2012. The Fund is represented by Brown Rudnick LLP and the Law Office of Braddock J. Huesman, LLC. The Fund said in court papers that the Chapter 11 filing was precipitated by the discrepancy between the Debtor's current ability to pay benefits to beneficiaries and the Debtor's current obligations to those same beneficiaries. The Fund said it would exhaust its cash by July 2014. It has been unable to collect a $325 million judgment against the islands' government, and the commonwealth decided to reduce contributions toward workers' pensions. As a result of continuous underfunding, which necessitated withdrawing from its portfolio to cover funding shortfalls, the value of the Fund's assets has fallen from $353,475,412 in 2009 to its current level of $268,448,997, the Debtor's counsel has said. The counsel also said the Fund is subject to liabilities (both current and actuarial) totaling about $911 million. MEDIA GENERAL: Files Form 10-Q; Incurs $34.3MM Net Loss in Q1 ------------------------------------------------------------- Media General, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $34.42 million on $149.51 million of total revenues for the three months ended March 25, 2012, compared with a net loss of $25.80 million on $148.94 million of total revenues for the three months ended March 27, 2011. The Company's balance sheet at March 25, 2012, showed $1.04 billion in total assets, $1.04 billion in total liabilities, and $17,000 in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/OC4l8G About Media General Richmond, Virginia-based Media General Inc. (NYSE: MEG) -- http://www.mediageneral.com/-- is an independent communications company with interests in newspapers, television stations and interactive media in the United States. The Company operates in three business segments: Publishing, Broadcast and Interactive Media. The Company owns 25 daily newspapers and more than 150 other publications, as well as 23 television stations. The Company also operates more than 75 online enterprises. In March 2008, the Company completed the purchase of DealTaker.com, an online social shopping portal. The Company reported a net loss of $74.32 million for the fiscal year ended Dec. 25, 2011, a net loss of $22.64 million for the fiscal year ended Dec. 26, 2010, and a net loss of $35.76 million for the fiscal year ended Dec. 27, 2009. * * * As reported by the TCR on April 12, 2012, Moody's Investors Service downgraded, among other things, Media General, Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Caa1 from B3, concluding the review for downgrade initiated on Feb. 13, 2012. The downgrade reflects the significant increase in interest expense associated with the company's credit facility amend and extend transaction and an assumed issuance of at least $225 million of new notes, which will result in limited free cash flow generation and constrain Media General's capacity to reduce its very high leverage. The weak free cash flow and high leverage create vulnerability to changes in the company's highly cyclical revenue and EBITDA generation. MERCED FALLS: Disclosure Statement Gets Court's Approval -------------------------------------------------------- The Hon. W. Richard Lee of the U.S. Bankruptcy Court for the Eastern District of California has approved the joint disclosure statement explaining the Chapter 11 Plan dated March 30, 2012, that was co-proposed by debtor Merced Falls Ranch LLC and lender American AgCredit, FLCA. The confirmation hearing of the Plan is set for June 14, 2012, at 9:00 a.m. The Disclosure Statement states that the Debtor and ACC reached an agreement on a consensual Joint Plan with these terms, among other things: (i) the Debtor stipulates to a valid and fixed amount owed to AAC as of the Petition Date ($12,509,567), plus certain accrues expenses and fees; (ii) interest accrues at 9.75% from the Petition Date on the AAC claim; and (iii) non-insider Class 4 unsecured claims are to be paid in full plus interest at 9.75% by Dec. 31, 2012. About Merced Falls Merced Falls Ranch LLC filed a Chapter 11 petition (Bankr. E.D. Calif. Case No. 11-19212) on Aug. 16, 2011, in Fresno, California. The Debtor disclosed assets of $100 million to $500 million and debts of $10 million to $50 million. Judge W. Richard Lee presides over the case. Walter & Wilhelm Law Group serves as the Debtor's bankruptcy counsel. Cappello and Noel LLP acts as special litigation counsel. Atherton & Associates acts as accountants. The petition was signed by Stephen W. Sloan, the Debtor's member. The United States Trustee said that an official committee has not been appointed in the bankruptcy case of Merced Falls Ranch LLC because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. MF GLOBAL: SIPA Trustee to Distribute $685-Mil. to Customers ------------------------------------------------------------ Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York issued an opinion and entered an order granting the motion filed by James W. Giddens, the trustee for the liquidation of MF Global Inc. under the Securities Investor Protection Act, for an interim distribution of approximately $685 million for finalized commodity futures customer claims. The SIPA Trustee has received Court approval to distribute on a pro rata basis to customers with allowed claims 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. The distributions will be in addition to the more than $4 billion in Section 4d funds and delivery class funds that have already been distributed. All objections to the SIPA Trustee's Motion that have not been withdrawn, waived, or settled, and all reservation of rights included therein, are overruled on the merits or otherwise resolved for the reasons set forth in the Memorandum Opinion, Judge Glenn ruled. In a 22-page opinion, Judge Glenn found that Delivery Credits, Delivery Debits, and Frozen Proceeds properly belong in the Delivery Class, pursuant to Part 190 of the Electronic Code of Federal Regulations, along with Physical Customer Property, despite the effect that they may have on the shortfall of that class. To the extent that Delivery Credits, Delivery Debits and Frozen Proceeds were not identified on the books and records of MFGI as related to the delivery of Physical Customer Property or exercise of the related contracts, the SIPA Trustee has properly classified this category of property, Judge Glenn determined. Judge Glenn further determined that there is no requirement in the applicable statutes or regulations that Delivery Credits and Frozen Funds be segregated. MFGI's failure to segregate this property does not exclude it from the definition of "specifically identifiable property" under Part 190.01 Regulations, the bankruptcy judge opined. During the hearing, Patrick O'Malley, Matthew Johnson and Michael Dokupil argued that Part 1.21 of the Electronic Code of Federal Regulations mandates that trading proceeds not required to be segregated be allocated across customer classes rather than allocated to a single customer class. Because that argument was not contained in the O'Malley objection, the Court allowed counsel to file a sur-reply limited to the impact of Section 1.21. The Court found that the sur-reply improperly raises new and untimely arguments. The Court also concluded that Section 1.21 is inapplicable to the issues. Assignment and Release of Claims Controversy An issue arose with respect to the SIPA Trustee's requiring claimants to release their claims against the MFGI estate and assign their claims third parties to the SIPA Trustee before receiving payment of their allowed claims. "Without seeking Court approval or disclosing the condition, the SIPA Trustee required claimants to sign a 'Declaration, Release and Assignment' form before receiving any distribution of allowed net equity claims," Judge Glenn opined. As of April 24, 2012, the SIPA Trustee has sent individual claim determination letters to more than 21,000 claimants and has received in excess of 7,500 executed DRAs in response. Only the numerous objections filed by claimants brought this issue the Court's attention, Judge Glenn said. Neither the Claims Process Order nor any of the Bulk Transfer Orders provided for any release or assignment agreement; nor did any of the Bulk Transfer Orders provided for any release or assignment agreement; nor did the Claim Distribution Motion seek approval of a mandatory release and assignment agreement, Judge Glenn held. The bankruptcy judge held that the SIPA Trustee did not provide any legal authority for requiring commodities customers to assign the customers' claims against third parties to the SIPA Trustee. In an attempt to resolve objection relating to assignment and release of claims, the SIPA Trustee and certain former customers of MFGI who objected to the assignment and release provisions of the DRAs previously entered into a stipulation. Under the stipulation, the parties agree that the DRA will be limited to releasing claims for actual payments or distributions to a Customer only to the extent of funds such Customer actually receives from the SIPA Trustee in connection with the MFGI Liquidation. The DRA will also not release any claims against any current or former employee, officer, or director of MF Global Holdings, Ltd., or any of its subsidiaries or affiliates, including MFGI, except with respect to any work performed by such employee, officer, or director in connection with the MFGI Liquidation under the supervision of the SIPA Trustee. Paradigm Global Fund I Ltd. and several former futures account customers however objected to the stipulation, saying they have been unable to come to a consensual resolution with the SIPA Trustee that would protect their valuable litigation rights. Sapere Wealth Management, Granite Asset Management and Sapere CTA Fund, L.P. also opposed the assignment and release provisions in the DRA and the stipulation. To address the objections, the SIPA Trustee filed with the Court a proposed amended stipulation, which makes clear that the DRA will not alter or limit any rights a Customer has, or any standing the customer has, to assert claims against third parties other than the released persons as defined in the DRA, and to recover against such third parties on any such claims. The DRA will also not alter the relative priority of a Customer and the SIPA Trustee to assert or recover on any claims against third parties other than the Released Persons. Paradigm still insisted that requiring former futures account customers of MFGI to execute the DRA as a condition of the return of their funds is without statutory authority and is in direct contravention of established case law. Occidental Energy Marketing Inc. filed a reservation of rights with respect to the SIPA Trustee's reply. During the hearing, the SIPA Trustee and objectors agreed to confer in order to find acceptable language, resulting in the proposed Third Amended Release. The Third Amended Release clarifies that claimants receiving a distribution based on their net equity claims must agree to release the SIPA Trustee, the Securities Investor Protection Corporation, and MFGI from any net equity claim in any amounts other than as approved in the claim determination and agreed to by the claimant. Once the SIPA Trustee and a claimant reach agreement on a net equity claim, the claimant cannot later contest that determination. Any claimant that objects to the SIPA Trustee's claim determination remains free to contest it in accordance with the procedures set forth in the Claims Process Order; it is only where the claimant agrees with the claim determination and will receive a pro rata distribution based on the net equity claim that a release is required. The Court concluded the proposed release is fully appropriate and warranted in the circumstances. The Third Amended Release also provides that the 7,500-plus customers who signed and returned the earlier version of the DRA to the SIPA Trustee or filed it with the Court need not take further measures as the prior DRA form which is hereby modified and clarified by this order will be in full force and effect in such modified form upon entry of this order. Judge Glenn held that the clarification of the Release language benefits the claimants, and the SIPA Trustee agrees that the modified Release provisions apply to all claimants who agree upon the claim determination. Judge Glenn noted that the argument in the written objections and at the hearing focused on whether the SIPA Trustee can condition receipt of distributions required by SIPA, the Bankruptcy Code, the CEA, and the Part 190 Regulations on claimants' assigning their rights to assert claims against third parties for any losses the claimants suffered. Several class actions have already been filed by MFGI commodities customers against third parties seeking recovery of the claimants' losses. Days after the hearing, the SIPA Trustee's counsel advised the Court that the SIPA Trustee withdraws the requirement that claimants execute the assignment. Against this backdrop, it is unnecessary for the Court to decide whether such a requirement could be imposed by the SIPA Trustee with Court approval before customers can receive distributions on otherwise agreed claims, Judge Glenn held. The issue remains, however, about the status of the assignments already received by the SIPA Trustee, Judge Glenn recognized. The Court concluded that the assignments already received are void and will be of no further force or effect. "Although the Court need not decide whether the SIPA Trustee can compel an assignment, it is clear that the SIPA Trustee could not obtain the assignments of claims belonging to commodity customers in exchange for distributions from the estate without first obtaining court approval," Judge Glenn opined. To avoid any confusion arising from the approximately 7,500 DRA forms already returned to the SIPA Trustee, containing release language that has now been changed and an assignment of claims that is void, the SIPA Trustee must obtain new signed forms from all claimants, "even though imposing this requirement will add to the SIPA Trustee's administrative burden and expense," Judge Glenn held. "This requirement is, in short, a self-inflicted wound," Judge Glenn said. A full-text copy of the memorandum opinion signed on April 24, 2012, is available for free at: http://bankrupt.com/misc/MFGlobal_Apr24ReleaseOpinion.pdf The Court also entered an order authorizing the releases as modified and the new release form, a full-text copy of which is available for free at: http://bankrupt.com/misc/MFGlobal_ReleaseFormOrder.pdf Per the Court's instructions, the SIPA Trustee's staff will mail new release forms that comply with the requirements established by the judge. All claimants will receive the new form in the mail in the next few weeks, once the Court's order becomes final. Claimants who agree with the SIPA Trustee's claim determination, even those who have already returned the previous release form, need to sign and return the new form as quickly as possible once it is received. The quick return of forms will allow the Trustee to begin the interim distribution process as soon as possible on a rolling basis. 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 Chapter 11 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. The Official Committee of Unsecured Creditors retained Dewey & LeBoeuf LLP, as counsel; and 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 Wants to Litigate $700MM Claim in UK ------------------------------------------------------------ James W. Giddens, the trustee for the liquidation of MF Global Inc. under the Securities Investor Protection Act, wants a U.K. court to preside over a dispute concerning the return of approximately $700 million of segregated customer property, according to an April 18, 2012 update to customers. In furtherance of the SIPA Trustee's duty to secure all segregated customer property for the benefit of MFGI's former commodity customers, the SIPA Trustee has been engaged since November 2011 in active discussions with KPMG, the Joint Special Administrators for the estate of MF Global UK Ltd. concerning the return of approximately $700 million of segregated customer property. The SIPA Trustee has filed a client claim with the Joint Special Administrators seeking the return of all such segregated customer property. The SIPA Trustee has also engaged in an exchange of information with the Joint Special Administrators concerning his claim. That process has shown that there is a dispute between the SIPA Trustee and the Joint Special Administrators as to whether the customer property that is the subject of the MFGI Trustee's client claim was or should have been segregated under English law. The SIPA Trustee believes that it is in the best interests of MF Global Inc.'s former commodity customers that this dispute be determined by the court and the SIPA Trustee has proposed, as a first step, that the Joint Special Administrators seek direction from the English court on these issues. The SIPA Trustee is pleased that the Joint Special Administrators have indicated their willingness to do so and hopes that an application for direction may be filed with the court as promptly as possible. The SIPA Trustee notes that to adjudicate this litigation on this basis will involve robust evidentiary disclosures and hearings, the completion of which is subject to English law and the procedures of the English court. The SIPA Trustee will press to have this litigation concluded as expeditiously as possible. 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 Chapter 11 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. The Official Committee of Unsecured Creditors retained Dewey & LeBoeuf LLP, as counsel; and 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 May Sue Officers for Breach of Duty ----------------------------------------------------------- Based on his investigation of conduct, allocation of responsibilities and reporting with respect to the segregated customer accounts, James W. Giddens, the trustee for the liquidation of MF Global Inc. under the Securities Investor Protection Act, believes there are claims he may assert against certain responsible individuals at MF Global Inc. and MF Global Holdings Ltd. for, among other things, breach of fiduciary duties owed to both MFGI and its customers, and violations of the segregation requirements of the Commodity Exchange Act, according to an April 12, 2012 update posted in the SIPA Trustee's Web site. The SIPA Trustee said he is committed to discussing and working cooperatively to the extent possible with representatives of customers, with the goal of recovering customer property for distribution in accordance with the established claims process in the MFGI liquidation. 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 Chapter 11 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. The Official Committee of Unsecured Creditors retained Dewey & LeBoeuf LLP, as counsel; and 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: Ch. 11 Trustee to Subpoena Ex-Officers, Lenders ---------------------------------------------------------- Louis J. Freeh, the Chapter 11 trustee for MF Global Holdings, Ltd. and its debtor-affiliates, won Bankruptcy Court permission to issue subpoenas to compel production of documents and testimony of certain witnesses in connection with his investigation of the Debtors' estates and to complete a status report, pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure. During an April 12, 2012 hearing, the Court asked the Chapter 11 Trustee to submit a report substantially similar to the report required of the SIPA Trustee, on or before June 4, 2012. To fulfill his duties under Section 1106(a)(3) of the Bankruptcy Code, the Chapter 11 Trustee wants to conduct examination on persons and entities deemed to have information relevant to his statutory investigation, including, but not limited to, the Debtors' affiliates and subsidiaries, the Debtors' former employees, current and former officers, directors and employees of the Debtors' affiliates and subsidiaries, lenders, investors, creditors and employees of the Debtors' affiliates and subsidiaries, lenders, investors, creditors and counterparties to transactions with the Debtors. The Court also established certain procedures governing the responses, objections, appearances and production of documents. Among other things, the Chapter 11 Trustee will serve each subpoena and a copy of the order granting this motion on (i) the target of the subpoena, (ii) the U.S. Securities and Exchange Commission, (iii) the Commodity Futures Trading Commission, (iv) the Internal Revenue Service, and (v) the U.S. Attorney for the Southern District of New York. Witnesses are directed to produce, on a rolling basis, all responsive documents described in the subpoena such that all responsive documents are received by the Chapter 11 Trustee within 10 days of the service of a subpoena upon such Witness, subject to any documents withheld under a claim of privilege. 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 Chapter 11 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. The Official Committee of Unsecured Creditors retained Dewey & LeBoeuf LLP, as counsel; and 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) MGM RESORTS: Incurs $203.3 Million Net Loss in First Quarter ------------------------------------------------------------ MGM Resorts International reported a net loss of $203.30 million on $2.47 billion of revenue for the three months ended March 31 2012, compared with a net loss of $89.87 million on $1.66 billion of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $27.39 billion in total assets, $17.89 billion in total liabilities and $9.49 billion in total stockholders' equity. "We continue to see growth across our domestic business fundamentals with revenues, casino volumes, REVPAR and Adjusted EBITDA all increasing year over year, while MGM China continues to report strong results," said Jim Murren, MGM Resorts International Chairman and CEO. "Our forward booking pace remains strong, M life is further enhancing its capabilities, we continue to focus on online and social media initiatives, and are finalizing our build out for MGM Macau and our future Cotai plans." A copy of the press release is available for free at: http://is.gd/aHly49 About MGM Resorts MGM Resorts International (NYSE: MGM) -- http://www.mgmresorts.com/-- has significant holdings in gaming, hospitality and entertainment, owns and operates 15 properties located in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, Illinois and Macau. The Company reported net income of $3.23 billion in 2011 and a net loss of $1.43 billion in 2010. Bankruptcy Warning In the Form 10-K for the year ended Dec. 31, 2011, the Company said that any default under the senior credit facility or the indentures governing the Company's other debt could adversely affect its growth, its financial condition, its results of operations and its ability to make payments on its debt, and could force the Company to seek protection under the bankruptcy laws. * * * As reported by the TCR on Nov. 14, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on MGM Resorts International to 'B-' from 'CCC+'. In March 2012, S&P revised the outlook to positive from stable. "The revision of our rating outlook to positive reflects strong performance in 2011 and our expectation that MGM will continue to benefit from the improving performance trends on the Las Vegas Strip," S&P said. In March 2012, Moody's Investors Service affirmed its B2 corporate family rating and probability of default rating. The affirmation of MGM's B2 Corporate Family Rating reflects Moody's view that positive lodging trends in Las Vegas will continue through 2012 which will help improve MGM's leverage and coverage metrics, albeit modestly. Additionally, the company's declaration of a $400 million dividend ($204 million to MGM) from its 51% owned Macau joint venture due to be paid shortly will also improve the company's liquidity profile. The ratings also consider MGM's recent bank amendment that resulted in about 50% of its $3.5 billion senior credit facility being extended one year from 2014 to 2015. MICKEY MANTLE'S: Facing Eviction by Month's End ----------------------------------------------- Steve Cuozzo, writing for The New York Post, reports that the landlord of Mickey Mantle's eatery, which was once owned by the legendary Yankee slugger, from its 25-year home on Central Park South for nonpayment of rent. "They want to get rid of us at the end of May," said the current owner Chris Villano, who put the place into bankruptcy a few months ago, according to the Post. According to The Post, Bill Liederman, a friend of Mr. Villano who was Mr. Mantle's original partner and sold his stake seven years ago, is trying to raise funds and talking with former pinstripers including David Cone, Ron Guidry and Goose Gossage to chip in as little as $10,000 each. "We need $1 million to get it back on its feet," said Mr. Liederman, the report says. According to The Post, Mr. Villano says he kept up the cafe despite a recent business falloff, adding 30 flat-screen TVs and putting "even better food" on its simple American menu. But Mr. Villano says he stopped paying rent four months ago because of "issues" with landlord ATCO -- including a longstanding scaffold that prevented him from renovating its fa‡ade. Mr. Villano says he'll countersue ATCO for trying to find a new tenant even though Mr. Villano has eight years left on his lease. The Post notes when the eatery opened in 1987, Mr. Mantle, a Hall of Famer owned a mere 7% of the business, but got so much of a kick out of it, he often hung out there until his death in 1995. The rent at the opening was $250,000 a year, Mr. Liederman said, compared with $850,000 today, according to The Post. The report says ATCO's president, Dale Hemmerdinger, declined to comment. MP-TECH AMERICA: Can Hire Capell & Howard as Counsel in IICC Rift ----------------------------------------------------------------- The Bankruptcy Court authorized MP-Tech America, LLC, to employ Richard H. Allen, Esq., and Capell & Howard, P.C., as special counsel. The Debtor has filed an objection to the claim of International Industrial Contracting Corporation (IICC) and pursuant to a Scheduling Order a trial in the matter is scheduled for May 8, 2012. In its application, the Debtor said Mr. Allen and his firm, Capell & Howard, are experienced construction litigation counsel. He and his firm acted as local counsel for the Debtor in the state court litigation pending prior to the Chapter 11 filing, styled International Industrial Contracting Corporation v. MP-Tech America, LLC, Chambers County Development Authority, and the Korean Development Bank, New York Branch, Circuit Court of Chambers County, Alabama, Case No. CV2010-900018.00. Mr. Allen and his firm will act as special counsel to assist the Debtor's general counsel in the conduct of the trial of the Claim Objection proceeding as necessary. Capell & Howard's engagement will paid on an hourly basis at the firm's normal hourly rates. Those hourly rates are: Richard H. Allen $225 Lister Hubbard $275 Paralegal $90 To the best of the Debtor's knowledge, Capell & Howard is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code. About MP-Tech America Cusseta, Alabama-based MP-Tech America, LLC, is the maker of parts for Kia Motors Corp. and Hyundai Motor Co. at their plants in Georgia and Alabama. It filed a Chapter 11 petition (Bankr. M.D. Ala. Case No. 11-30895) on April 8, 2011. The Debtor estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. The Debtor has a $15 million secured debt to Korea Development Bank. The Debtor is represented by Michael A. Fritz, Sr., Esq., at Fritz Hughes & Hill, LLC, in Montgomery, Alabama, and Joseph J. Burton, Jr., Esq., at Burton & Armstrong, LLP, in Atlanta, Georgia. EXIM Bank, Venture Express, Woori Bank, Sunkyoung, ICS & M, Inc., and Midsouth Employee Services Corp. were appointed members to the Official Committee of Unsecured Creditors. The Committee is represented by Clark R. Hammond, Esq., and Lindan J. Hill, Esq., at Johnston Barton Proctor & Rose LLP, in Birmingham, Alabama. NADYA SULEMAN: May 7 Foreclosure Forces Octomom to Seek Ch. 7 ------------------------------------------------------------- Nadya Suleman, aka Octomom, filed a Chapter 7 petition (Bankr. C.D. Calif. Case No. 12-15375) on April 30 and is facing a May 7 foreclosure of her home in La Habra, California. John Rogers, writing for The Associated Press, reported that documents filed in court for Ms. Suleman's bankruptcy case list her creditors as including her parents, her gardener, a babysitting company, a private school, a cable TV provider, a pest control company, her mortgage holder, her utility companies and the state Department of Motor Vehicles. Marc Daniel at Black Saturday Magazine reported Ms. Suleman had roughly $50,000 in assets and roughly $1 million in debt. She receives roughly $4,000 or $5,000 per month in public assistance to feed and clothe her family. TMZ on Saturday reported that Ms. Suleman accepted an offer to shoot for an adult film. She completed her first day of XXX shooting at a porn mansion in the San Fernando Valley on Thursday, TMZ said. Ms. Suleman on Jan. 26, 2009, gave birth to octuplets, spawned by invitro fertilization, at a Southern California hospital. All survived. NATIONAL CINEMEDIA: S&P Rates $105MM Ext. Revolver Facility 'BB-' ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned ratings to the extended portion of Centennial Colo.-based theater advertising company National CineMedia LLC's senior secured revolving credit facility; the company is extending $105 million of the revolver to 2017. "We assigned the extended portion of the revolver our issue-level rating of 'BB-' (at the same level as our 'BB-' corporate credit rating on the company) with a recovery rating of '3', indicating our expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default," S&P said. "We rate operating company National CineMedia LLC and its parent, National CineMedia Inc., on a consolidated basis. The corporate credit rating on the company is 'BB-' and the rating outlook is stable. The 'BB-' rating reflects our expectation that National CineMedia should be able to maintain leverage in the mid-3x area over the intermediate term, despite its aggressive dividend policy. We consider the company's business risk profile as 'fair', based on its historically strong EBITDA margin and good market position. A high dividend payout and minimal cash retention by the operating subsidiary underpin our view that the company's financial risk profile is 'aggressive.' Although the company's credit metrics deteriorated slightly in the fourth quarter of 2011 because of weak advertising demand, we expect revenue and EBITDA to grow at a low- to mid-single-digit percentage rate in 2012," S&P said. RATINGS LIST National CineMedia Inc. National CineMedia LLC Corporate Credit Rating BB-/Stable/-- New Ratings National CineMedia LLC $105M extended revolver due 2017 BB- Recovery Rating 3 NAUTICA LAKES: Lawsuit Against D.S.C. of Newark Stayed ------------------------------------------------------ Bankruptcy Judge Robert A. Gordon signed off on a stipulation and consent order between Nautica Lakes, Inc., and its creditor D.S.C. of Newark Enterprises, Inc., over: -- DSC's request to dismiss the Chapter 11 case; -- the Debtor's request to reject a so-called Executory Post Closing Agreement/Memorandum; and -- the Debtor's Complaint for Declaratory Relief against DSC captioned as, Nautica Lakes, Inc., v. D.S.C. of Newark Enterprises, Inc., Adv. Proc. No. 12-00259 (Bankr. D. Md.) Litigation and proceedings relating the Motion to Reject and the Adversary Proceeding is stayed, pending the Court's full adjudication of the Motion to Dismiss. If the Court denies the Motion to Dismiss, DSC will have 14 days from the denial to file pleading responsive to the Motion to Reject and the Complaint. A copy of the Court's May 3, 2012 Stipulation and Consent Order is available at http://is.gd/H2bJibfrom Leagle.com. Stephen B. Gerald, Esq. -- sgerald@wtplaw.com -- at Whiteford, Taylor & Preston L.L.P., argues for D.S.C. of Newark Enterprises, Inc. Nautica Lakes, Inc., based in Columbia, Maryland, filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 12-11820) on Feb. 2, 2012, estimating $1 million to $10 million in assets and debts. The petition was signed by Bethany H. Hooper, senior vice president and treasurer. Alan M. Grochal, Esq., at Tydings & Rosenberg LLP, in Baltimore, represents the Debtor. OSAGE EXPLORATION: Issues $10 Senior Secured Note to Apollo ----------------------------------------------------------- Osage Exploration and Development, Inc., entered into a $10,000,000 senior secured note purchase agreement with Apollo Investment Corporation. The Notes, which mature on April 27, 2015, are secured by substantially all of the assets of the company, including a mortgage on all of the Company's Oklahoma leases. The Notes have an interest rate of Libor plus 15% with a Libor floor of 2.0%, with interest payable in cash monthly. In addition, Apollo received a warrant to purchase 1,496,843 shares of common stock, $0.0001 par value, exercisable at $0.01 per share with an expiration date of April 27, 2017. Minimum draw downs on the Note Purchase Agreement are $1,000,000. At closing, the Company did not draw down any funds. At closing, the Company paid $100,000 placement fee, to CC Natural Resource Partners, LLC, and issued a warrant to purchase 250,000 shares of common stock, $0.0001 par value, exercisable at $0.01 per share with an expiration date of April 27, 2014. The Company will pay CCNRP an additional placement fee of 4.0% of the amount drawn, once the Company has drawn $2,500,000 under the Note Purchase Agreement. About Osage Exploration Based in San Diego, California with production offices in Oklahoma City, Oklahoma, and executive offices in Bogota, Colombia, Osage Exploration and Development, Inc. (OTC BB: OEDV) -- http://www.osageexploration.com/-- is an independent exploration and production company with interests in oil and gas wells and prospects in the US and Colombia. The Company's balance sheet at Dec. 31, 2011, showed $5.47 million in total assets, $1.32 million in total liabilities, and a $4.15 million in total stockholders' equity. GKM, LLP, in Encino, California, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's 2011 financial results. The independent auditors noted that the Company has suffered recurring losses from operations and has an accumulated deficit as of Dec 31, 2011. PEMCO WORLD: Sun Aviation Wants to Hire Cross & Simon as Counsel ---------------------------------------------------------------- Sun Aviation Services, LLC, will appear in Bankruptcy Court today, May 7, 2012, to seek authorization to employ Cross & Simon, LLC, as bankruptcy counsel, nunc pro tunc to April 13. Sun Aviation employed Cross & Simon as its attorneys in connection with the preparation, filing and prosecution of its chapter 11 case. Sun Aviation also wants to employ C&S as its attorneys to provide other legal services that are necessary and appropriate including, without limitation, general corporate and litigation services relating to this case. Subject to the Court's approval, C&S will render these professional services to Sun Aviation: A. Perform all necessary services as Sun Aviation's counsel in connection with this chapter 11 case, including providing Sun Aviation with advice concerning its rights and duties, representing Sun Aviation, and preparing all necessary documents, motions, applications, answers, orders, reports and papers in connection with the administration of this chapter 11 case on behalf of Sun Aviation; B. Take all necessary actions to protect and preserve Sun Aviation's estate during the pendancy of this chapter 11 case, including prosecute actions by Sun Aviation, defend any actions commenced against Sun Aviation, negotiate all litigation in which Sun Aviation is involved, and object to claims filed against Sun Aviation's estate; C. Represent Sun Aviation at hearings, meetings, and conferences on matters pertaining to the affairs of Sun Aviation as debtor-in-possession; and D. Perform all other necessary legal services. Sun Aviation proposes to pay C&S its customary hourly rates in effect plus reimbursement of actual, necessary expenses incurred by C&S on Sun Aviation's behalf. C&S's current hourly rates are: Partners and Counsel $450 Associates $275-$375 Paraprofessionals $170 To the best of the Debtor's knowledge, the Firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Pemco World Air Services Headquartered in Tampa, Florida Pemco World Air Services -- http://www.pemcoair.com/-- performs large jet MRO services, and has operations in Dothan, AL (military MRO and commercial modification), Cincinnati/Northern Kentucky (regional aircraft MRO), and partner operations in Asia. Pemco filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 12-10799) on March 5, 2012, with a $37.8 million DIP financing and a "stalking horse" bid from an affiliate of its current owner, Sun Aviation Services, LLC. Young Conaway Stargatt & Taylor, LLP has been tapped as general bankruptcy counsel; Kirkland & Ellis LLP as special counsel for tax and employee benefits issues; AlixPartners, LLP as financial advisor; Bayshore Partners, LLC as investment banker; and Epiq Bankruptcy Solutions LLC as notice and claims agent. On March 14, 2012, the U.S. Trustee appointed an official committee of unsecured creditors. On April 13, 2012, Sun Aviation Services LLC (Bankr. D. Del. Case No. 12-11242) filed its own Chapter 11 bankruptcy petition. Sun Aviation owns 85.08% of the stock of Pemco debtor-affiliate WAS Aviation Services Holding Corp., which in turn owns 100% of the stock of debtor WAS Aviation Services Inc., which itself owns 100% of the stock of Pemco World Air Services Inc. Pemco also owes Sun Aviation $5.6 million. As a result, Sun Aviation is seeking separate counsel. However, Sun Aviation obtained an order jointly administering its case with those of the Pemco debtors. PENN HILLS: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Penn Hills Enterprises, Inc. P.O. Box 309 Analomink, PA 18320 Bankruptcy Case No.: 12-02695 Chapter 11 Petition Date: May 1, 2012 Court: United States Bankruptcy Court Middle District of Pennsylvania (Wilkes-Barre) Judge: Robert N. Opel II Debtor's Counsel: Philip W. Stock, Esq. LAW OFFICE OF PHILIP W. STOCK 706 Monroe Street Stroudsburg, PA 18360 Tel: (570) 420-0500 Fax: (570) 338-0920 E-mail: pwstock@ptd.net Scheduled Assets: $1,317,800 Scheduled Liabilities: $1,720,201 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Charles A. Poalillo, president. PETTUS PROPERTIES: Court OKs Mitchell & Culp as Attorney -------------------------------------------------------- Pettus Properties Inc. sought and obtained permission from the U.S. Bankruptcy Court to re-employ Mitchell & Culp PLLC as attorney. As reported by the Troubled Company Reporter on June 18, 2010, the Debtor obtained Court permission to hire Mitchell as counsel. Early in March 2012, Mitchell sought and obtained approval from the U.S. Bankruptcy Court to withdraw as Pettus Properties' attorneys. According to reporting by the TCR, discussions about the arrangement of the firm's services to the Debtor have been contentious and have irreparably harmed the relationship. The firm was unable to provide further services to the Debtor under these circumstances. On March 26, the Debtor filed the new application to employ the firm. The Debtor proposed to pay the firm at these rates: Personnel Rates --------- ----- Richard M. Mitchell/attorney $450 Heather W. Culp/attorney $325 Christopher J. Culp/ of counsel $275 Cynthia A. Baker/paralegal $150 Jennifer N. Short/paralegal $140 Kelly Spruill/staff $50 Richard M. Mitchell, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Charlotte, North Carolina-based Pettus Properties, Inc., filed for Chapter 11 bankruptcy protection (Bankr. W.D.N.C. Case No. 10-31632) on June 8, 2010. The Company estimated its assets and debts at $10 million to $50 million. In 2011, the Debtor filed a Chapter 11 plan of reorganization, which was challenged by VFC Partners 8 LLC. Terms of the Plan and VFC's objections were reported by the Troubled Company Reporter on June 24 and July 15, 2011. Robert A. Cox, Jr., Esq., at McGuireWoods LLP, represents VFC. A full-text copy of the disclosure statement is available for free at http://bankrupt.com/misc/PETTUS_DS.pdf PHOENIX HORIZONS: Case Summary & 3 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Phoenix Horizons, Inc. dba Northeast Community Center 2840 Holme Avenue Philadelphia, PA 19152 Bankruptcy Case No.: 12-14344 Chapter 11 Petition Date: May 1, 2012 Court: U.S. Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Eric L. Frank Debtor's Counsel: David B. Smith, Esq. SMITH KANE, LLC 112 Moores Road, Suite 300 Malvern, PA 19355 Tel: (610) 407-7217 Fax: (610) 407-7218 E-mail: dsmith@smithkanelaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its three largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/paeb12-14344.pdf The petition was signed by Walter Laub, vice president. PINNACLE AIRLINES: Pays More Interest to Modify CIT Loan Terms -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Pinnacle Airlines Corp. agreed to increase the interest rate on a pre-bankruptcy $34 million term loan from CIT Bank in return for a default waiver. As it is giving up all 70 of its Saab 340 and Bombardier 400 aircraft, Pinnacle will violate covenants in the CIT loan. For a waiver, Pinnacle agreed to raise the interest rate from the range of 6.9% or 7.5% to 8.5%. The modified loan will allow Pinnacle to sell the parts and spare engines associated with the Saab and Bombardier aircraft that are some of CIT's collateral. Canceling the operating certificates with the Federal Aviation Administration for the Mesaba and Colgan airline subsidiaries will be another covenant violation to be waived. The revised loan requires paying proceeds from parts sales toward reduction of the CIT loan. A hearing on the amendment is scheduled for May 16. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems - Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. A seven-member official committee of unsecured creditors has been appointed in the case. PMI GROUP: May 16 Hearing Set on Ernst & Young Engagement --------------------------------------------------------- The Delaware Bankruptcy Court will hold a hearing May 16 to consider approval of The PMI Group Inc.'s request to employ Ernst & Young LLP as financial reporting advisor and tax service provider. The Debtor wants the employment to be effective April 14. The Debtor engaged Ernst & Young, which has been providing services pre-bankruptcy, pursuant to the terms and conditions set forth in a master services agreement and statements of work issued under the MSA. Separate Statements of Work were issued for financial reporting advice, bankruptcy tax services, and for preparation of U.S. consolidated federal income tax return for the Debtor and its affiliated companies. For tax compliance services, the firm will charge an $85,000 fixed fee. For financial reporting services, the firm will charge at its standard hourly rates: Title Rate Per Hour ----- ------------- Partner/Executive Director $600 Senior manager $540 Manager $400 Senior $330 Staff $200 For bankruptcy tax services, the firm will charge at these hourly rates: Title Rate Per Hour ----- ------------- Partner/Principal/ Executive Director $725-$885 Senior manager $620-$755 Manager $550-$670 Senior $375-$455 Staff $210-$255 The firm will also seek reimbursement of expenses and seek indemnification. Petrus D. Theron, a partner at Ernst & Young, attests the firm is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. The firm says it is not owed any amount for prepetition services. No payments were made within the 90-day period pre-bankruptcy. About The PMI Group Del.-based The PMI Group, Inc., is an insurance holding company whose stock had, until Oct. 21, 2011, been publicly-traded on the New York Stock Exchange. Through its principal regulated subsidiary, PMI Mortgage Insurance Co., and its affiliated companies, the Debtor provides residential mortgage insurance in the United States. The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor disclosed $167,963,354 in assets and $770,362,195 in liabilities. Stephen Smith signed the petition as chairman, chief executive officer, president and chief operating officer. The Debtor said in the filing that it does not have the financial resources to pay the outstanding principal amount of the 4.50% Convertible Senior Notes, 6.000% Senior Notes and the 6.625% Senior Notes if those amounts were to become due and payable. The Debtor is represented by James L. Patton, Esq., Pauline K. Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP. The Official Committee of Unsecured Creditors appointed in the case retained Morrison & Foerster LLP and Womble Carlyle Sandridge & Rice, LLP, as bankruptcy co-counsel. Peter J. Solomon Company serves as the Committee's financial advisor. QUALTEQ INC: Chapter 11 Trustee Takes Over ------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Bank of America Corp. persuaded the bankruptcy judge in Chicago to appoint a Chapter 11 trustee to take over Qualteq Inc. The loss was Qualteq's second major defeat in bankruptcy court. In February, the bankruptcy judge in Delaware, where company filed in August, sent the case to Chicago, saying there was "no factor that weighs in favor of" keeping it in Delaware. The bank argued there should be a trustee because the Chapter 11 filing was designed to protect the controlling Veluchamy family from lawsuits. The order calling for a trustee was signed Thursday. As reason for having a trustee, Bank of America pointed to allegedly fraudulent transfers of $18.6 million in cash and other property. About QualTeq Inc. South Plainfield, New Jersey-based QualTeq, Inc., engages in the design, manufacture, and personalization of plastic cards in the United States. The company manufactures magnetic, contact, and dual interface smart cards. Qualteq Inc. and 17 affiliated companies filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12572) on Aug. 14, 2011. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, serve as local counsel to the Debtors. K&L Gates LLP is the general bankruptcy counsel. Eisneramper LLP is the accountants and financial advisors. Scouler & Company is the restructuring advisors. Lowenstein Sandler PC is counsel to the Committee. Avadamma LLC disclosed $38,491,767 in assets and $36,190,943 in liabilities as of the Petition Date. As reported in the Troubled Company Reporter on Feb. 23, 2012, Bankruptcy Judge Kevin J. Carey in Delaware granted the request of Bank of America, N.A., to transfer the venue of the Chapter 11 cases of Qualteq, Inc., et al., to the U.S. Bankruptcy Court for the Northern District of Illinois. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed four unsecured creditors to serve on the Official Committee of Unsecured Creditors. RGIS SERVICES: Moody's Cuts PDR to 'B3', Rates New Facility 'B2' ---------------------------------------------------------------- Moody's Investor Service assigned B2 ratings to: i) a new $60 million senior secured revolver due 2017 and a new $215 million senior secured term loan due 2017 offered by RGIS Services, LLC ("RGIS"), a wholly-owned subsidiary of RGIS Holdings, LLC, and ii) a senior secured term loan due 2016 proposed as an amendment and extension of an existing term loan due 2014. The rating on the non-extended portion of the existing term loan due 2014 has been lowered to B2 from Ba3 to reflect the preponderance of senior secured debt in the capital structure post-transaction. Concurrently, Moody's affirmed RGIS's B2 Corporate Family Rating (CFR) and lowered the Probability of Default Rating to B3 from B2. The ratings outlook remains stable. Proceeds from the new $215 million term loan, along with cash on hand, will be used to repay $300 million of senior subordinated notes (unrated). Post-close, only first lien debt will remain in the capital structure and, as such, the ratings on the first lien debt will no longer benefit from loss absorption previously provided by the subordinated notes. Ratings assigned (LGD assessments): - Proposed $60 million sr secured revolver expiring 2017, B2 (LGD 3, 34%) - Proposed $215 million sr secured term loan due 2017, B2 (LGD 3, 34%) - Proposed sr secured extended term loan tranche due 2016, B2 (LGD 3, 34%) Ratings lowered (LGD assessment revised): - Non-extended portion of $441 (originally $525) million sr secured term loan due April 2014, to B2 (LGD 3, 34%) from Ba3 (LGD 2, 29%) - Probability of Default Rating, to B3 from B2 Ratings affirmed: - Corporate Family Rating, B2 - $75 million sr secured revolver expiring April 2013, Ba3 (LGD 2, 29%) -- to be withdrawn upon closing The ratings are contingent upon closing of the proposed transaction and Moody's review of final documentation. Ratings Rationale RGIS's B2 CFR is constrained by continued pricing pressure on domestic inventory counting services and incremental investments to fund growth initiatives, resulting in a steady contraction in margins. Moody's expects consolidated EBITDA to remain flat over the next 12-18 months, as declines in domestic earnings are offset by lower-margin international revenue growth. However, free cash flow and key credit metrics are expected to strengthen due to a material reduction in debt and interest expense. Pro forma for the proposed transaction, Moody's estimates financial leverage (total debt / EBITDA) will fall to 4.9 times as of December 31, 2011 using Moody's standard adjustments, in line with the B2 rating category. The ratings continue to reflect RGIS's vulnerability to cyclical swings and secular trends impacting retail customers' inventory levels, a moderate level of customer concentration, and the potential for certain clients to shift to in-house solutions. These risks are partly mitigated by RGIS's long-standing relationships with its largest customers, a leading market share and national footprint in the US, and increasing geographic diversity from international revenue growth. The ratings further reflect the company's good liquidity and a track record of steady debt reduction. The stable outlook anticipates that 5-10% organic revenue growth internationally over the next 12-18 months will offset potential domestic earnings declines caused by competitive pricing pressures. The ratings could be upgraded if core domestic revenue and earnings show sustained growth, and RGIS continues to reduce debt such that financial leverage (total debt / EBITDA) is expected to be sustained at about 4 times, using Moody's standard adjustments. The ratings could be downgraded if competitive pressures intensify resulting in consolidated revenue and earnings declines, or if financial leverage or free cash flow to debt approaches 6 times or fall below 3%, respectively. Headquartered in Auburn Hills, Michigan, RGIS provides inventory counting services primarily to retailers. The company reported revenues of $645 million in 2011. The principal methodology used in rating RGIS Holdings was the Global Business & Consumer Service Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. RGIS HOLDINGS: S&P Raises Corporate Credit Rating to 'B+' --------------------------------------------------------- Standard & Poor's Rating Services raised its corporate credit rating on Auburn Hills, Mich.-based RGIS Holdings LLC (RGIS) to 'B+' from 'B'. The outlook is stable. "The company plans to reduce 2014 term loan debt maturities to $126 million from $441 million by way of an extension of $315 million to mature in 2016. With a new $215 million incremental term loan due 2017, along with approximately $85 million of cash, the company plans to retire $300 million of 10.75% senior subordinated notes. The company also plans to refinance its $75 million revolver due 2013 with a $60 million revolver due 2017. RGIS Services LLC is the issuer of the debt," S&P said. "We are raising our issue ratings to 'B+' on the $126 million nonextended term loan, and we are assigning 'B+' issue ratings to the new $60 million revolver, the $315 million extended term loan, and the new $215 million incremental term loan. We are revising our recovery rating on the nonextended term loan to '4', indicating our expectation for average (30%-50%) recovery of principal in the event of a payment default, from '3'. Our recovery rating on each of the company's three new credit facilities is '4'," S&P said. "The upgrade to 'B+' from 'B' reflects RGIS' improved credit protection measures on a pro forma basis resulting from the partial repayment of debt," said Standard & Poor's credit analyst Nalini Saxena. "The overall recapitalization also addresses near- term maturities." "The upgrade reflects Standard & Poor's belief that the company will sustain improved credit metrics while pursuing acquisition and investment activity. The corporate credit rating on RGIS further reflects our assessment that the company continues to have a 'weak' business profile and, with the proposed recapitalization, improves its financial profile to 'aggressive' from 'highly leveraged,'" S&P said. "The stable outlook reflects our expectation for RGIS to sustain improved credit measures following the proposed transactions. We forecast modest sales growth, given our expectation of limited inventory expansion among retailers and our view that RGIS has likely exhausted operational gains and margin expansion opportunities. We also expect the company to maintain adequate liquidity," S&P said. RINE LAND: Case Summary & 13 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Rine Land Development, Inc. 19 Independence Drive Shippensburg, PA 17257 Bankruptcy Case No.: 12-02702 Chapter 11 Petition Date: May 1, 2012 Court: United States Bankruptcy Court Middle District of Pennsylvania (Harrisburg) Judge: Robert N. Opel II Debtor's Counsel: Craig A. Diehl, Esq. LAW OFFICES OF CRAIG A. DIEHL 3464 Trindle Road Camp Hill, PA 17011-4436 Tel: (717) 763-7613 Fax: (717) 763-8293 E-mail: cdiehl@cadiehllaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Debtor affiliate that simultaneously filed separate Chapter 11 petition: Debtor Case No. ------ -------- Rine & Rine Builders, Inc. 12-02703 Assets: $100,001 to $500,000 Debts: $1,000,001 to $10,000,000 A copy of Rine Land Development's list of its 13 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/pamb12-02702.pdf A copy of Rine & Rine Builders' list of its seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/pamb12-02703.pdf The petitions were signed by Darrin Rine/Curtis Rine, shareholders. RITE AID: Commences Cash Offer to Purchase $405MM Senior Notes -------------------------------------------------------------- Rite Aid Corporation has commenced a cash tender offer to purchase any and all of its outstanding $405 million aggregate principal amount of 9.375% Senior Notes due 2015. As part of the Tender Offer, Rite Aid is soliciting consents from the holders of the Notes for certain proposed amendments that would eliminate or modify certain covenants and events of default and other provisions contained in the indenture governing the Notes. Holders who tender their Notes will be deemed to consent to all of the proposed amendments and holders may not deliver consents to the proposed amendments without tendering their Notes in the Tender Offer. The Tender Offer and Consent Solicitation are being made pursuant to the Offer to Purchase and Consent Solicitation Statement, dated May 3, 2012, and a related Consent and Letter of Transmittal, which more fully set forth the terms and conditions of the Tender Offer and Consent Solicitation. The Tender Offer will expire at midnight, Eastern Time, on May 31, 2012, unless the Tender Offer is extended or earlier terminated. Under the terms of the Tender Offer, holders of the Notes who validly tender and do not withdraw their Notes prior to midnight, Eastern Time, on May 14, 2012, and whose Notes are accepted for purchase, will receive the "Total Consideration," which is equal to: (i) $998.75 per $1,000.00 in principal amount of Notes validly tendered; plus (ii) a consent payment of $30.00 per $1,000.00 in principal amount of the Notes validly tendered. Holders of Notes who validly tender their Notes after the Consent Payment Date but on or before the Expiration Date, and whose Notes are accepted for purchase, will receive only the Tender Offer Consideration. Rite Aid intends to call for redemption any 9.375% senior notes due 2015 not tendered in the Tender Offer and Consent Solicitation. Rite Aid may issue a notice of redemption at any time following the Consent Payment Deadline. Requests for documents relating to the Tender Offer and Consent Solicitation may be directed to Global Bondholder Services Corp., the Information Agent, at (866) 804-2200 or (212) 430-3774 (banks and brokers). Citigroup will act as Dealer Manager for the Tender Offer and Consent Solicitation. Questions regarding the Tender Offer and Consent Solicitation may be directed to Citigroup at (800) 558-3745 (toll free) or (212) 723-6106 (collect). About Rite Aid Corp. Drugstore chain Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, has more than 4,700 stores in 31 states and the District of Columbia and fiscal 2010 annual revenues of $25.7 billion. The Company reported a net loss of $368.57 million for the year ended March 3, 2012, a net loss of $555.42 million for the year ended Feb. 26, 2011, and a net loss of $506.67 million for the year ended Feb. 27, 2010. The Company's balance sheet at March 3, 2012, showed $7.36 billion in total assets, $9.95 billion in total liabilities, and a $2.58 billion in total stockholders' deficit. * * * In February 2012, S&P affirmed Rite Aid's 'B-' corporate credit rating. During that time, Moody's Investors Service also affirmed its Caa2 Corporate Family Rating, Caa2 Probability of Default Rating, and SGL-3 Speculative Grade Liquidity rating. "The ratings reflect our expectation that Camp Hill, Pa.-based retail drugstore chain Rite Aid Corp.'s financial risk profile will remain 'highly leveraged', despite improving sales trends, due to its significant debt," said Standard & Poor's credit analyst Ana Lai. Moody's said in February that Rite Aid's Caa2 Corporate Family Rating reflects its weak credit metrics and unsustainable capital structure with debt to EBITDA of 8.8 times and EBITA to interest expense of 0.8 times. Although Moody's believes that Rite Aid earnings will benefit from Walgreen's dispute with Express Scripts as well as from the strong generic pipeline, Moody's anticipates that lower reimbursement rates will offset some of this positive earnings pressure. Thus, Moody's forecasts that Rite Aid's credit metrics will remain weak. In addition, Rite Aid faces a tradeoff between the need to address its sizable 2014 and 2015 debt maturities against the likelihood that any refinancing will be at a higher interest rate. Should Rite Aid successfully refinance its 2014 and 2015 debt maturities, its borrowing costs will likely increase further weakening Rite Aid's interest coverage. Consequently, Moody's is concerned that Rite Aid may choose to voluntarily restructure its debt over the medium term. RITE AID: To Offer Add'l $426 Million of 9.25% Senior Notes ----------------------------------------------------------- Rite Aid Corporation intends to offer an additional $426 million aggregate principal amount of 9.25% senior notes due 2020. The Notes are being offered as additional notes under an existing indenture pursuant to which Rite Aid previously issued $481 million aggregate principal amount of 9.25% senior notes due 2020. The Notes to be issued in this offering and the previously issued 9.25% senior notes due 2020 will be equal in right of payment, will vote together with, and will form a single class of notes under the indenture. The Notes will be unsecured, unsubordinated obligations of Rite Aid Corporation and will be guaranteed by substantially all of Rite Aid's subsidiaries. Rite Aid intends to use the net proceeds of the offering, together with available cash, to pay the consideration, accrued and unpaid interest and related fees and expenses in connection with the previously announced tender offer for any and all of its outstanding 9.375% senior notes due 2015 and related consent solicitation. Rite Aid intends to call for redemption any 9.375% senior notes due 2015 not tendered in the tender offer. Rite Aid's results of operations, including net loss and loss per share, and guidance will likely be affected by fees, expenses and charges related to this offering and the tender offer and consent solicitation. The Notes and the related subsidiary guarantees will be offered in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and outside the United States pursuant to Regulation S under the Securities Act. The Notes and the related subsidiary guarantees have not been registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements. About Rite Aid Corp. Drugstore chain Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, has more than 4,700 stores in 31 states and the District of Columbia and fiscal 2010 annual revenues of $25.7 billion. The Company reported a net loss of $368.57 million for the year ended March 3, 2012, a net loss of $555.42 million for the year ended Feb. 26, 2011, and a net loss of $506.67 million for the year ended Feb. 27, 2010. The Company's balance sheet at March 3, 2012, showed $7.36 billion in total assets, $9.95 billion in total liabilities and a $2.58 billion in total stockholders' deficit. * * * In February 2012, S&P affirmed Rite Aid's 'B-' corporate credit rating. During that time, Moody's Investors Service also affirmed its Caa2 Corporate Family Rating, Caa2 Probability of Default Rating, and SGL-3 Speculative Grade Liquidity rating. "The ratings reflect our expectation that Camp Hill, Pa.-based retail drugstore chain Rite Aid Corp.'s financial risk profile will remain 'highly leveraged', despite improving sales trends, due to its significant debt," said Standard & Poor's credit analyst Ana Lai. Moody's said in February that Rite Aid's Caa2 Corporate Family Rating reflects its weak credit metrics and unsustainable capital structure with debt to EBITDA of 8.8 times and EBITA to interest expense of 0.8 times. Although Moody's believes that Rite Aid earnings will benefit from Walgreen's dispute with Express Scripts as well as from the strong generic pipeline, Moody's anticipates that lower reimbursement rates will offset some of this positive earnings pressure. Thus, Moody's forecasts that Rite Aid's credit metrics will remain weak. In addition, Rite Aid faces a tradeoff between the need to address its sizable 2014 and 2015 debt maturities against the likelihood that any refinancing will be at a higher interest rate. Should Rite Aid successfully refinance its 2014 and 2015 debt maturities, its borrowing costs will likely increase further weakening Rite Aid's interest coverage. Consequently, Moody's is concerned that Rite Aid may choose to voluntarily restructure its debt over the medium term. RITE AID: Fitch Junks Rating on $421 Million Sr. Unsecured Notes ---------------------------------------------------------------- Fitch Ratings has assigned a rating of 'CCC/RR5' to Rite Aid Corporation's $421 million of 9.25% guaranteed senior unsecured notes due March 15, 2020. The notes are being offered as additional notes under an existing indenture pursuant to which Rite Aid previously issued $481 million 9.25% senior notes in February 2012. Between the two bond issues, Rite Aid has addressed its 2015 debt maturities of $459 million 8.625% and $405 million 9.375% guaranteed senior unsecured notes due 2015. Rite Aid still has $1,044 million of first lien secured term loans due June 2014 and a combination of $880 million of first and second lien secured notes due mid-2016. Given the quality of its collateral, Fitch expects Rite Aid to be able to address these maturities in a timely fashion (Fitch expects the 2014 maturities will be addressed in early 2013), barring any significant deterioration in its business trends or disruption in the credit markets. RATINGS AFFIRMED; OUTLOOK TO STABLE: As a result of its recent debt refinancing activity as well as the stabilization in its operating trends, Fitch has affirmed its ratings on Rite Aid and revised the Rating Outlook to Stable from Negative. The ratings continue to reflect the following: -- Rite Aid's high leverage, limited capital for investment and operating statistics that significantly trail its two major competitors; -- Strong market share position as the third largest U.S. drug retailer; -- Management's concerted efforts to improve the productivity of its store base and manage liquidity through refinancing activity over the last two years, working capital reductions and other cost cutting initiatives. Fitch expects that credit metrics (with adjusted debt/EBITDAR at 7.4x and EBITDAR/interest + rents at 1.3x as of March 3, 2012) will remain stable over the next three years. There has been some recent improvement in EBITDA with same store sales turning modestly positive since the fourth quarter of fiscal 2011. The current impasse between Walgreen and Express Scripts since January 2012 (where Walgreen is no longer part of the Express Scripts pharmacy network) is also providing a boost to prescription volume and therefore to EBITDA. Over the next 12-24 months, the generic wave could provide a nice windfall to the company's profitability. Whether this pushes EBITDA into the $1 billion-plus range remains to be determined given offsetting factors such as (1) ongoing pressure on pharmacy reimbursement rates from both the pharmacy benefit management companies, which could intensify given the recent merger between Medco and Express Scripts, and the state and federal governments and (2) potential share losses to larger and more capitalized competitors. For the fiscal year ended Jan. 3, 2012, total same store sales was positive at 2% with a front-end same store sales increase of 1.1% and a pharmacy same store sales increase of 2.4%. Adjusted EBITDA (adjusted for non-cash and one-time items) increased to $943 million from $859 million, the first increase in four years. This partly reflects the benefit from prescription transfers from Walgreens and a 53rd week in the year. Excluding the benefit from Walgreens, Fitch expects pharmacy prescription volume and front- end sales to grow in the 1% range and EBITDA to benefit modestly in 2012 and 2013 from the introduction of higher margined generics, somewhat offset by continued pharmacy reimbursement pressures. Risks to estimates are a decline in same store sales trends due to macro weakness or share losses to its larger peers, and higher than expected decline in reimbursement rates. Rite Aid's operating metrics significantly lag those of its largest and well- capitalized competitors, CVS Caremark and Walgreen. Rite Aid has been unable to participate in the strong industry growth largely due to capital constraints, and the company's inability to appropriately invest in its stores remains an ongoing concern. Beyond the benefit from the generic wave in 2012-14, Fitch does not expect meaningful top-line and EBITDA expansion over the next few years given the lack of capital to execute successfully on its plans to address underperforming stores. As a result, EBITDA margins are likely to remain depressed, which at 3.6% (excluding non-cash and one-time items) is significantly below its two leading competitors' margins (with Walgreen's EBITDA margin at 7% excluding the loss of Express Scripts business and CVS' retail EBITDA margin at 9.9%). Liquidity and Details Of Upcoming Debt Maturities At March 3, 2012, Rite Aid had cash of $162 million and excess borrowing capacity of $911 million under its credit facility. The company has maintained liquidity in the $850 million to $1.2 billion range for the past eight quarters. Fitch expects that Rite Aid could refinance $180 million of unsecured unguaranteed bonds due August 2013 through credit facility borrowings and modest free cash flow (FCF). Rite Aid is required to buy back $64 million of 8.5% convertible notes due May 2015 should its shares become delisted. Given the quality of its collateral, Rite Aid should be able to refinance the $1 billion secured term loan due June 2014 on its own. The collateral consists of (1) marketable prescription files with a total of approximately 295 million prescriptions filled annually that could be valued at $10 to $20 per script; and (2) pharmacy as well as nonprescription inventories. Recovery Considerations The issue ratings shown above are derived from the Issuer Default Rating (IDR) and the relevant Recovery Rating. Fitch's recovery analysis assumes a liquidation value under a distressed scenario of approximately $6 billion on inventory, receivables, owned real estate and prescription files. The $1.175 billion revolving credit facility, term loans, $410 million senior secured notes due June 2016 and the $650 million senior secured notes due August 2020 have a first lien on the company's cash, accounts receivable, investment property, inventory and prescription lists, and are guaranteed by Rite Aid's subsidiaries giving them an outstanding recovery (91%-100%). The $1.175 billion revolving credit facility is due to mature on Aug. 19, 2015. However, the maturity would be April 18, 2014 in the event that Rite Aid does not repay, refinance or otherwise extend the remaining term loans ($1,079 million Tranche 2 Term Loan and $343 million Tranche 3 Term Loan due June 1, 2014) prior to that time and meet certain other conditions. The senior secured credit facility requires the company to maintain a minimum fixed charge coverage ratio (of 1.0x through Nov. 26, 2011 and 1.05x thereafter) only if availability on the revolving credit facility is less than $150 million. Rite Aid's fixed charge coverage ratio was above the minimum required amount at the end of the last quarter. Rite Aid's senior secured notes have a second lien on the same collateral as the revolver and term loans and are guaranteed by Rite Aid's subsidiaries. These are also expected to have outstanding recovery prospects. Given the amount of secured debt in the company's capital structure, the unsecured guaranteed notes are assumed to have below-average recovery prospects (11%-30%) and unsecured notes and convertible bonds are assumed to have poor recovery prospects (0%-10%) in a distressed scenario. Fitch has affirmed Rite Aid Corporation's ratings as follows: -- IIDR at 'B-'; -- Secured revolving credit facility and term loans at 'BB-/RR1'; -- First and second lien senior secured notes at 'BB-/RR1'; -- Guaranteed senior unsecured notes at 'CCC/RR5'; -- Non-guaranteed senior unsecured notes at 'CC/RR6'. The Rating Outlook has been revised to Stable from Negative. RITE AID: Moody's Upgrades Corp. Family Rating to 'Caa1' -------------------------------------------------------- Moody's Investors Service upgraded Rite Aid Corporation's Corporate Family Rating and Probability of Default Rating to Caa1. Moody's also assigned a Caa2 rating to Rite Aid's proposed $405 million principal amount of 9.25% senior unsecured notes due 2020. The proposed notes are being offered under the indenture to which Rite Aid previously issued $481 million of its 9.25% senior notes due 2020. Rite Aid has an SGL-3 Speculative Grade Liquidity rating. The rating outlook is stable. The following rating is assigned: $405 million add-on senior unsecured guaranteed notes due 2020 at Caa2 (LGD 5,82%) The following ratings are upgraded and LGD point estimates changed Corporate Family Rating to Caa1 from Caa2 Probability of Default Rating to Caa1 from Caa2 First-lien bank credit facilities to B2 (LGD 2, 27%) from B3 (LGD 2, 26%) First-lien senior secured notes to B2 (LGD 2, 27%) from B3 (LGD 2, 26%) Second-lien secured notes to Caa1 (LGD 4, 58%) from Caa2 (LGD 4, to 57%) Guaranteed senior notes to Caa2 (LGD 5, 82%) from Caa3 (LGD 5, to 82%) Senior notes and debentures to Caa3 (LGD 6, 95%) from Ca (LGD 6, 95%) The following rating is affirmed: Speculative Grade Liquidity rating at SGL-3 Ratings Rationale The upgrade acknowledges Rite Aid's ability to address its 2015 debt maturities by refinancing them until 2020 without increasing its interest expense. Moody's believe that the refinancing of Rite Aid's 2015 debt maturities somewhat reduces the likelihood of Rite Aid voluntarily choosing to restructure its debt over the medium term. However, Rite Aid's Caa1 Corporate Family Rating reflects that the likelihood of a debt restructuring remains high given its weak credit metrics and unsustainable capital structure. Rite Aid's debt to EBITDA was 8.8 times and EBITA to interest expense was 0.8 times for the year ending March 3, 2012. Moody's believes that Rite Aid's earnings will continue to benefit from Walgreen's dispute with Express Scripts as well as from the strong generic pipeline. However, Moody's anticipates that lower reimbursement rates will offset some of this positive earnings pressure. Thus, Moody's forecasts that Rite Aid's credit metrics will remain weak. In addition, Rite Aid faces the need to address its sizable 2014 debt maturities against the likelihood that any refinancing may be at a higher interest rate. Although, Moody's notes that Rite Aid's 2014 debt maturities are of its first lien secured debt which Moody's believes will be easier to refinance than Rite Aid's unsecured debt. Positive ratings consideration is given to Rite Aid's adequate liquidity, its large revenue base and the solid opportunities of the prescription drug industry. The stable outlook acknowledges Rite Aid's adequate liquidity and lack of near dated debt maturities. Rite Aid's next significant debt maturity is in 2014 when the remaining $1 billion of term loans is due. In addition, the stable outlook reflects Moody's expectation that Rite Aid's earnings will modestly improve but that the improvement will not meaningfully improve its credit metrics. A higher rating would require that Rite Aid's operating performance to improve or absolute debt levels to fall such that it demonstrates that it can maintain EBITA to interest expense above1.0 time and debt to EBITDA below 8.0 times, a level that is more sustainable over the longer term. In addition, a higher rating would require Rite Aid to continue to maintain adequate liquidity. Rite Aid's ratings could be lowered if the company experiences a decline in earnings or liquidity, should free cash flow become persistently negative, or should the probability of default increase including by way of a distressed exchange. The principal methodology used in rating Rite Aid Corporation 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. Rite Aid Corporation, headquartered in Camp Hill, Pennsylvania, operates about 4,800 drug stores in 31 states and the District of Columbia. Revenues are about $26 billion. SAVTIRA CORP: CEO Explains Financial Issues in Letter to Creditors ------------------------------------------------------------------ The Herald-Tribune reports that Savtira Corp. chairman and chief executive Timothy Roberts sent a long and often opaque letter to shareholders and creditors to explain the company's financial problems and lash out at "individuals" who are trying to "derail our strategy." According to the report, Savtira, which is attempting to develop a "Cloud Commerce System" that would sell both physical and digital goods online, has garnered headlines recently for filing bankruptcy and for a Labor Department probe. The report notes the federal agency contends Savtira has failed to pay employees regularly since at least January, which would violate fair labor standards laws. In response, Savtira shut its doors. "That event is the most difficult thing I have ever endured," the report quotes Mr. Roberts as stating. "The day we closed the door and sent our employees home felt like sending my family away." The report relates Mr. Roberts blamed some of the difficulties on "insidious actions of a few individuals who have colluded to interfere with our business." He later refers to the unnamed individuals as "malicious predators" who have infringed on protected patents by forming competitive companies. Amir Kurtovic at St. Louis Business Journal reported that Mr. Roberts, in an interview with the Tampa Bay Business Journal, an affiliated publication, called the Company's bankruptcy filing a strategic move. "We were forced to file Chapter 11," wrote Mr. Roberts. "This is actually a protection bubble around the company to ward off this hostile takeover attempt. We have plenty of money circling us and now that the blood is in the water the sharks are all circling. We feel confident we will come out of this quickly and fully funded." St. Louis Business Journal reported Savtira faces multiple lawsuits from employees and vendors over unpaid bills and is being investigated by the U.S. Department of Labor. The sheriff also confiscated computer equipment Savtira had leased from a vendor. According to St. Louis Business Journal, Mr. Roberts also said he had proposals and tax incentives from cities in five states, including St. Louis, to move his company. St. Louis Business Journal noted, however, that Jeff Rainford, chief of staff to St. Louis Mayor Francis Slay, said there was no agreement or contract between the city and Mr. Roberts. Mr. Rainford indicated that any possible incentives Savtira could get for moving would be contingent on creating jobs. According to St. Louis Business Journal, Savtira has similar incentives in Florida, where the company qualified for $2.65 million in tax breaks from the city, county and state government. The tax incentives were contingent on creating 265 high-paying jobs, which to date have not materialized. About Savtira Based in Tampa, Florida, Savtira Corp. -- http://www.savtira.com/ -- engages in the business of digital distribution with a software-as-a-service (SaaS) e-commerce platform that is a turnkey system for the distribution, marketing, merchandising, and selling of both digital media and physical goods in a single store and a single, unified shopping cart. Savtira Corporation, aka Savtira Corporation of Delaware, filed for Chapter 11 protection on April 27, 2012 (Bankr. M.D. Fla. Case No. 12-06471). Judge Catherine Peek McEwen presides over the case. Vincent B. Lynch, Esq., at Vincent Lynch, PA, represents the Debtor. The Debtor estimated assets of between $1 million and $10 million and debt of between $10 million and $50 million. SCI REAL ESTATE: Plan Confirmation Hearing Set for June 13 ---------------------------------------------------------- The Hon. Peter H. Carroll of the Bankruptcy Court for the Central District of California approved the second amended disclosure statement in support of the first amended plan of liquidation filed by SCI Real Estate Investments LLC dated April 19, 2012. The Court set the confirmation hearing to approve the Plan on June 13, 2012, at 9:30 a.m. The Court also fixed May 30, 2012, as voting deadline and as the last day for any interested party to file any opposition to confirmation of the Plan. The disclosure statement supports the liquidating plan filed by the Debtors under which all of the Debtors' assets will be transferred to a Liquidating Trust on the Effective Date. The Plan's objective is for the Liquidating Trustee to liquidate the Liquidating Trust Assets and distribute the proceeds of the liquidation to the Holders of Allowed Claims in satisfaction of the Debtors' obligations. The Plan provides for the substantive consolidation of the two Debtors into a single entity, divides Holders of Claims and Interests into Classes based on their legal rights and interests, and provides for the treatment of each of those Classes. The Plan provides that the Liquidating Trust will be administered by the Liquidating Trustee under the supervision of the Post-Confirmation Oversight Committee that will be comprised of the members of the Committee who choose to serve. The Holders of Interests will not receive or retain anything on account of their Interests. Only Classes 1, 2 and 4 are impaired and deemed eligible to vote under the plan. The Plan designates four Classes of Claims and one Class of Interests. The classification and treatment of claims under the Plan are: A. Class 1 (2009 Pledge and Security Agreements) will be paid at such time and from the Net Proceeds generated from the disposition of the Collateral securing the Claims. These claims are estimated to be $7.44 million and recovery is estimated to be 100%. B. Class 2 (SCICG Mezzanine Fund I, LLC) will be paid from the Net Proceeds generated from the disposition of the Collateral securing the Claims. These claims are scheduled for $10.8 million and recovery is estimated to be 100%. C. Class 3 (Claims for Wages) will be paid in full on the later of (1) the Effective Date or as soon as practicable thereafter and (2) if the Priority Unsecured Claim is a Disputed Claim, after the dispute is resolved by agreement of the parties or a Final Order. These claims are scheduled for $23,500 and recovery is estimated to be 100%. D. Class 4 (All Allowed General Unsecured Claims) will be made by the Liquidating Trustee as follows: (1) On the Effective Date, or as soon as practicable thereafter, the Liquidating Trustee will distribute the sums then available to the Holders of Allowed Class 4 General Unsecured Claims on a pro rata basis. (2) If at any time after the Effective Date the Liquidating Trustee is holding more than $1,000,000 in Available Cash or at such times as instructed by the Post-Confirmation Oversight Committee, the Liquidating Trustee will distribute the Available Cash to the Holders of Allowed Class 4 General Unsecured Claims on a pro rata basis; and (3) Upon the resolution of all Claims and litigation, and the liquidation of all Liquidating Trust Assets, the Liquidating Trustee will distribute all Cash remaining in the Liquidating Trust by making a final distribution to the Holders of Allowed Class 4 General Unsecured Claims. These claims are scheduled for $44.85 million and percentage recovery is unknown. E. Class 5 (Membership Interests) will receive no value under the plan. A full-text copy of the disclosure statement is available for free at http://bankrupt.com/misc/SCI_ds_2nd.pdf About SCI Real Estate Investments Los Angeles, California-based SCI Real Estate Investments, LLC, filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-15975) on Feb. 11, 2011. Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP, serves as the Debtor's bankruptcy counsel. Haskell & White LLP as accountant. Kennerly, Lamishaw & Rossi LLP as special real estate counsel. The Debtor disclosed $55,431,222 in assets and $69,514,028 in liabilities as of the Chapter 11 filing. Peter C. Anderson, the U.S. Trustee for Region 16, appointed three members to the official committee of unsecured creditors in the Chapter 11 cases of SCI Real Estate Investments. Levene, Neale, Bender, Yoo & Brill L.L.P., represents the Committee as its general bankruptcy counsel. SEARS HOLDINGS: Seven Directors Elected at Annual Meeting --------------------------------------------------------- Sears Holdings Corporation held its annual meeting of stockholders at the Company's offices in Hoffman Estates, Illinois, on May 2, 2012. Louis J. D'Ambrosio, William C. Kunkler, III, Edward S. Lampert, Steven T. Mnuchin, Ann N. Reese, Emily Scott and Thomas J. Tisch were elected to the Board of Directors for a one-year term expiring at the 2013 annual meeting of stockholders and until their successors are elected and qualified. The stockholders approved, by an advisory vote, the compensation of the named executive officers. The stockholders approved the amended and restated Sears Holdings Corporation Umbrella Incentive Program. The stockholders also ratified the appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm for 2012. About Sears Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- is the nation's fourth largest broadline retailer with more than 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a 94% stake in Sears Canada and an 80.1% stake in Orchard Supply Hardware. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. Kmart completed its merger with Sears on March 24, 2005. The Company's balance sheet at Jan. 28, 2012, showed $21.38 billion in total assets, $17.04 billion in total liabilities, and $4.34 billion in total equity. Negative Outlook Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Ill.-based Sears Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with negative implications on Dec. 28, 2011. We are also lowering the short-term and commercial paper rating to 'C' from 'B-2'. The rating outlook is negative," S&P said. "The corporate credit rating reflects our projection that Sears' EBITDA will be negative in 2012, given our expectations for continued sales and margin pressure," said Standard & Poor's credit analyst Ana Lai. She added, "We further expect that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses." Moody's Investors Service in January 2012 lowered Sears Holdings Family and Probability of Default Ratings to B3 from B1. The outlook remains negative. At the same time Moody's affirmed Sears' Speculative Grade Liquidity Rating at SGL-2. The rating action reflects Moody's expectations that Sears will report a significant operating loss in fiscal 2011. Moody's added that the rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers. SECURITY BANK NA: Closed; Banesco USA Assumes All Deposits ---------------------------------------------------------- Security Bank, National Association, of North Lauderdale, Fla., was closed on May 4, 2010, by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Banesco USA of Coral Gables, Fla., to assume all of the deposits of Security Bank, National Association. The three branches of Security Bank, National Association, will reopen during its normal business hours as branches of Banesco USA. Depositors of Security Bank, National Association, will automatically become depositors of Banesco USA. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Security Bank, National Association, should continue to use their existing branch until they receive notice from Banesco USA that it has completed systems changes to allow other Banesco USA branches to process their accounts as well. As of March 31, 2012, Security Bank, National Association had around $101.0 million in total assets and $99.1 million in total deposits. In addition to assuming all of the deposits of the failed bank, Banesco USA agreed to purchase essentially all of the assets. Customers with questions about the transaction should call the FDIC toll-free at 1-800-523-8209. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/securitybank.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $10.8 million. Compared to other alternatives, Banesco USA's acquisition was the least costly resolution for the FDIC's DIF. Security Bank, National Association, is the 23rd FDIC- insured institution to fail in the nation this year, and the third in Florida. The last FDIC-insured institution closed in the state was First Guaranty Bank and Trust Company of Jacksonville, in Jacksonville, on Jan. 27, 2012. SEQUENOM INC: Incurs $24.4 Million Net Loss in First Quarter ------------------------------------------------------------ Sequenom, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $24.45 million on $14.92 million of total revenues for the three months ended March 31, 2012, compared with a net loss of $12.67 million on $13.51 million of total revenues for the same period during the prior year. The Company reported a net loss of $74.15 million in 2011, a net loss of $120.84 million in 2010, and a net loss of $71.01 million in 2009. The Company's balance sheet at March 31, 2012, showed $171.88 million in total assets, $43.31 million in total liabilities and $128.56 million in total stockholders' equity. "Our performance during the quarter reflects the successful achievement of our operational goals throughout the organization, specifically those associated with the expansion of Sequenom CMM's testing services and the launch and rapid adoption of the MaterniT21 PLUS laboratory developed test," said Paul V. Maier, Sequenom's CFO. "We ended the quarter with a favorable cash position as we continued to strengthen our balance sheet, raising $58.2 million during the period through an underwritten public offering, the proceeds of which will primarily be used to fund the expansion of our operations in support of the growing demand for our testing services." As of March 31, 2012, total cash, cash equivalents, and marketable securities were $119.7 million. Net cash used in operating activities was $23.3 million for the first quarter, while purchases of capital equipment for the same period totaled $1.8 million, funded primarily through utilization of the Company's credit facility. As of March 31, 2012, the Company had borrowed $17.0 million under the credit facility. A copy of the Form 10-Q is available for free at: http://is.gd/SXFDI1 About Sequenom Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. SOMERSET APARTMENTS: To Pay Claims From R.E. Sales Under Plan ------------------------------------------------------------- Somerset Meadows LLC and Duvall-Watson LLC filed a disclosure statement in support of their reorganization plan of reorganization dated March 26, 2012. The Plan provides for the substantive consolidation of the assets and liabilities of both Debtors and the surviving entity -- Somerset -- will be the Reorganized Debtor. Each Class is treated as either impaired or unimpaired under the terms of the Plan. In general, the priority claims will be paid in full, the Mechanics lien claims will be paid in full, the secured claim of FirsTier Bank will be paid up to its allowed secured claim of $9 million, and the unsecured creditors will be paid the balance of the sale proceeds of the Debtors' real estate projects up to a maximum payout of $3 million. The ownership classes of each Debtor will be cancelled and new ownership will be issued to those unsecured creditors who elect to receive member interests in lieu of cash. The Debtors estimate that it will take up to five years to sell out the real estate projects though seven years is allowed to account for unforeseen circumstances. As a means of executing the Plan, the Reorganized Debtor will continue to market and sell the real estate that comprises the project for the benefit of creditors. The Reorganized Debtor will also be authorized to pursue its claim objection and lender liability claims against FirsTier Bank. The Plan provides for an orderly sale of individual lots or project parcels in the ordinary course of business, the pursuit of entitlements for those parcels that do not yet have them, refinancing of all or a portion of the secured debt at any time, or the sale of all or part of the project in a single or multiple sale transactions. The classification and treatment of claims under the plan are: A. Class 1 (Priority Claims) consists of certain pre-petition wages and employee claims. These claims be paid in full on the Effective Date but the Debtor does not expect any claims in this category. B. Class 2 and B (Allowed Secured Claim held by the Boulder County Treasurer) will be Allowed in their full amount and paid with interest at the statutory rate. The Debtor expects to pay these secured claims as lots or parcels of property are sold. C. Class 3, 4, C, and D (Allowed Secured Claims held by Mechanics Lien Claimants) will accrue interest at the rate of 4% per annum. The claims will be paid when the real property securing each given claim is sold. D. Class 5 and E (Allowed Secured Claims held by FirsTier Nebraska) will be allowed in the amount of $9,000,000. The lien position of the Class 5 and E claims will be unaffected by the Plan. However, as parcels of property are sold, the Class 5 and E lien will no longer attach to the property and will attach to the proceeds subject to distribution under the Plan. The interest rate that will be applied to the Class 5 and E claim will be fixed at a rate of LIBOR plus 3 points as of the confirmation date. Commencing on Aug. 31, 2012, the claim will be paid interest only on a monthly basis. Added payments will be applied to the secured claim as parcels of property are sold and the net proceeds are applied to the claim. E. Class 6 and F (Allowed Claims held by unsecured creditors) will receive a pro-rata distribution of the net proceeds which remain from the sale of the real property after senior creditor classes are paid in full. The maximum distribution to Class 6 and F will be $3,000,000. Assuming that the total amount of unsecured creditor claims receiving payment will be $9,872,541 and the distribution is $3,000,000, creditors will receive 30% on account of each dollar of claim. In addition to the distributions from sale of the property, the unsecured creditors will also receive the net recovery on any avoidance Actions pursued by the Debtors. Class 6 and F will also have the option to elect to receive new member interests in the Reorganized Debtor in lieu of payment. F. Class 7 and G (Interests held by pre-confirmation members) will be cancelled on the Effective Date. The hearing to consider the adequacy of the Disclosure Statement will be held on May 18, 2012, at 9:00 a.m. A copy of the disclosure statement is available for free at: http://bankrupt.com/misc/SOMERSET_MEADOWS_ds.pdf The U.S. Trustee has filed an objection to the Disclosure Statement claiming that Section 11.9 of the Plan contains an overly broad exculpation clause that releases various nondebtors, including representatives of the Debtor and its professionals, from any liability for past, present and future acts and omissions that in some way relate to the bankruptcy case or Plan, except for claims based on gross negligence or willful misconduct. At a minimum, the exculpation provision contemplates that third parties would be released from, for example, claims arising from their own future negligence. About Duvall-Watson and Somerset Meadows Duvall-Watson LLC is a real estate development company formed to develop a residential real estate project in Longmont, Colorado. The project, including land owned by Duvall-Watson and Somerset Meadows LLC, contains 18 finished lots and 177 preliminary approved lots in subdivisions known as Somerset Meadows and The Highlands at Somerset Meadows. Duvall-Watson LLC and Somerset Meadows LLC filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case Nos. 11-39586 and 11-39584) on Dec. 27, 2011. Each Debtor estimated $10 million to $50 million in assets and debts. Judge Howard R. Tallman presides over the case. SOUTHERN DEVELOPMENT: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Southern Development Co., Inc. 845 Bald Eagle Drive Marco Island, FL 34145 Bankruptcy Case No.: 12-06874 Chapter 11 Petition Date: May 1, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Ft. Myers) Debtor's Counsel: Buddy D. Ford, Esq. BUDDY D. FORD, P.A. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 E-mail: Buddy@tampaesq.com Scheduled Assets: $2,800,000 Scheduled Liabilities: $13,705,936 A copy of the Company's list of its nine largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-06874.pdf The petition was signed by Mario Curiale, president. Affiliates that previously filed separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Marco Building Supply, Inc. 11-16971 09/08/11 Mario Curiale 11-17867 09/26/11 SPRINGLEAF FINANCE: Bank Debt Trades at 5% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Springleaf Finance is a borrower traded in the secondary market at 94.65 cents-on- the-dollar during the week ended Friday, May 4, 2012, an increase of 0.44 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 425 basis points above LIBOR to borrow under the facility. The bank loan matures on May 10, 2017, and carries Moody's 'B2' rating and Standard & Poor's 'CCC+' rating. The loan is one of the biggest gainers and losers among 162 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Springleaf Springleaf was incorporated in Indiana in 1927 as successor to a business started in 1920. From Aug. 29, 2001, until the completion of its sale in November 2010, Springleaf was an indirect wholly owned subsidiary of AIG. The consumer finance products of Springleaf and its subsidiaries include non-conforming real estate mortgages, consumer loans, retail sales finance and credit-related insurance. * * * Moody's said in May 2012 that Springleaf's B3 corporate family rating reflects its position as an established national branch- based consumer lender, its conservative credit culture and controls, and its adequate capital position. These factors are offset by the company's funding constraints and weak operating performance. In February 2012, Standard & Poor's Ratings Services lowered its issuer credit rating on Springleaf Finance Corp. and its issue credit rating on the company's senior unsecured debt to 'CCC' from 'B'. The outlook on Springleaf's issuer credit rating is negative. "Springleaf's announcement that it will shut down about 60 branches and stop lending in 14 states highlights the operating, funding, and liquidity challenges that the firm faces as it works to pay down the $2 billion of debt coming due in 2012 and to establish a stable long-term funding strategy. The downgrade also reflects the company's poor earnings, exposure to weak residential markets and uncertainty about its ability to refinance debt or securitize assets over the coming year. We believe that should its funding or securitization options become unavailable, the company will not have enough liquidity to survive 2012, and in that case a distressed debt exchange would be likely. The company has retained financial advisors to assess its options," S&P said. Reports in April 2012 said Springleaf Finance Corp., the subprime lender owned by Fortress Investment Group, has hired restructuring lawyers as it struggles to raise new funds and grapples with billions in debt coming due later this year. Fortress Investment Group's consumer lending unit, Springleaf Financial Services has hired law firm, Dewey & LeBouef, to restructure its business, a person close to the matter told Reuters. SPRINT NEXTEL: Files Form 10-Q; Incurs $863MM Net Loss in Q1 ------------------------------------------------------------ Sprint Nextel Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $863 million on $8.73 billion of net operating revenues for the three months ended March 31, 2012, compared with a net loss of $439 million on $8.31 billion of net operating revenues for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $50.61 billion in total assets, $40.02 billion in total liabilities and $10.59 billion in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/eeyxGs About Sprint Nextel Overland Park, Kan.-based Sprint Nextel Corp. (NYSE: S) -- http://www.sprint.com/-- is a communications company offering a comprehensive range of wireless and wireline communications products and services that are designed to meet the needs of individual consumers, businesses, government subscribers and resellers. * * * In February 2012, Moody's Investors Service assigned a B3 rating to Sprint Nextel's proposed offering of Senior Unsecured Notes and a Ba3 rating to Sprint's proposed offering of Junior Guaranteed Unsecured Notes. The proceeds will be used for general corporate purposes, the repayment of existing debt, network expansion and modernization, and the potential funding of Clearwire. All of Sprint's ratings remain on review for possible downgrade, including those assigned and the company's B1 corporate family rating and B1 probability of default rating. Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating and '2' recovery rating to Sprint's proposed $1 billion of senior guaranteed notes due 2020. These notes have subordinated guarantees from all the subsidiaries that guarantee the existing $2.25 billion revolving credit facility. The '2' recovery rating indicates expectations for substantial (70% to 90%) recovery in the event of payment default. Fitch Ratings has assigned ratings to Sprint's $2 billion notes offering. This includes a 'BB/RR2' rating to the junior guaranteed unsecured notes due 2020 and a 'B+/RR4' rating to the unsecured senior notes due 2017. SPYGLASS ESTATE: Case Summary & 16 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Spyglass Estate Planning, LLC, a Delaware limited liability company 3525 Del Mar Heights, Suite 765 San Diego, CA 92130 Bankruptcy Case No.: 12-06417 Chapter 11 Petition Date: May 1, 2012 Court: U.S. Bankruptcy Court Southern District of California (San Diego) Judge: Laura S. Taylor Debtor's Counsel: Elissa D. Miller, Esq. SULMEYER KUPETZ 333 South Hope Street Los Angeles, CA 90071 Tel: (213) 626-2311 E-mail: emiller@sulmeyerlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 16 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/casb12-06417.pdf The petition was signed by Antonios Isaac, member. SQUARE AT FALLING RUN: Placed in Chapter 7 Liquidation ------------------------------------------------------ The Square at Falling Run, LLC, will be liquidated under Chapter 7 of the Bankruptcy Code after Judge Patrick M. Flatley sided with The Square's lender First United Bank & Trust, which filed the involuntary Chapter 7 bankruptcy for the Company. First United has established its standing under 11 U.S.C. Sec. 303(b)(2) to bring the involuntary petition against The Square, as well as grounds for relief under Sec. 303(h), Judge Flatley said in an April 30, 2012 Memorandum Opinion available at http://is.gd/9Gu0Yx from Leagle.com. On Dec. 19, 2008, several entities controlled by common principals borrowed $2.48 million from First United on a non-revolving line of credit. The Square, which also shares principals common to the borrowing entities, guaranteed the Borrowing Entities' indebtedness to First United. By signing the Dec. 19, 2008 Commercial Guaranty, The Square obligated itself to the performance and prompt payment, upon request, of all indebtedness when due, whether at maturity or earlier. To secure The Square's performance of the Guaranty, First United took a credit line leasehold deed of trust on The Square's leasehold interest in the April 17, 2008 Ground Lease executed by the City of Morgantown Building Commission, as lessor, and The Square and McCoy 6 Apartments, Limited Liability Company, as lessees. The Ground Lease required, in part, that The Square and McCoy 6 build a parking structure on the leased property by April 1, 2011. The Borrowing Entities defaulted on the note owed to First United. Subsequently, First United filed a complaint against The Square in the District Court for the Northern District of West Virginia (Case No. 1:11-cv-31) on March 18, 2011, alleging The Square's default on the Dec. 19, 2008 loan agreement and Guaranty, demanding damages flowing from the default, and seeking the appointment of a receiver to take control of The Square's assets and operations. While the district court litigation was proceeding, however, the City sent all interested parties notice of its intent to terminate the lease with The Square based on The Square's failure to complete the contemplated parking structure on the leased property by the April 1, 2011 deadline. First United's receipt of the City's notice of termination precipitated its decision to file an involuntary Chapter 7 petition (Bankr. N.D. W.Va. Case No. 11-00753) against The Square. First United asserts that the Court should enter an involuntary order for relief against The Square because (1) it holds a non- contingent claim of $2.48 million that is not the subject of a bona fide dispute as to liability or amount; (2) its claim is at least $14,425 more than the value of any lien on The Square's property securing its claim; (3) The Square has fewer than 12 creditors; and (4) The Square is generally not paying its debts as they become due. The Square asserts that First United's claim is contingent and is the subject of a bona fide dispute, First United is its only creditor causing this case to be only a two-party dispute, and First United filed the involuntary petition in bad faith. "Objectively speaking, The Square failed to show how invoking the bankruptcy process is not something a reasonable creditor in First United's position would do," Judge Flatley said. The Court noted that McCoy 6, Augusta Apartments, LLC, and Grand Central Building Limited Liability Company of Morgantown filed for bankruptcy protection, and a common bankruptcy trustee was appointed to administer each of the bankruptcy estates. McCoy 6 and The Square are both lessees to the Ground Lease with the City, and the Chapter 11 bankruptcy estate of McCoy 6 is being administered by a trustee, Robert L. Johns, who is also the gap trustee appointed in The Square's involuntary case. The Court said First United is trying to take advantage of synergies that can be achieved by having the businesses of both entities to the Ground Lease being administered in bankruptcy by a common trustee, and attempting to receive payment according to the bankruptcy priority scheme from any value that may be realized from the common administration of related debtor entities. TENET HEALTHCARE: Fitch Raises Issuer Default Rating to 'B' ----------------------------------------------------------- Fitch Ratings has upgraded Tenet Healthcare Corporation's ratings, including the company's Issuer Default Rating (IDR), to 'B' from 'B-'. The Rating Outlook is Stable. The ratings apply to approximately $4.5 billion of debt at Dec. 31, 2011. The 'B' IDR Primarily Reflects the Following Factors: -- While Tenet's liquidity and financial flexibility have recently improved, the company's ability to generate positive free cash flow remains strained. -- Otherwise, Tenet's liquidity profile is solid. Near-term debt maturities are limited and the company has adequate available liquidity in cash on hand and credit revolver availability. -- Organic operating trends in the for-profit hospital industry are weak, and Fitch expects weak patient utilization trends and the associated drag on top-line performance to persist throughout the rest of 2012. -- Tenet has made significant progress in improving its industry lagging profitability since 2008 and Fitch believes that Tenet has made some durable reductions to its cost structure. Positive Trend in Credit Metrics Tenet's credit metrics, including debt leverage and interest coverage, are strong relative to the 'B' IDR. Pro forma for a $300 million notes issuance last week, which resulted in a 0.3x increase in debt-to-EBITDA, Fitch calculates pro forma gross debt- to-EBITDA of 4.1 times (x) and EBITDA-to-LTM interest expense of 3.0x. Leverage through the secured debt is 2.4x. Tenet's gross debt-to-EBITDA has declined dramatically since 2007, dropping to near 4.0x from 6.5x. The decline in debt leverage was entirely the result of growth in EBITDA primarily stemming from operational improvements. Operating EBITDA has expanded by 59% since 2008 as the result of 2.0% CAGR in revenue and a 390 bps expansion of the operating EBITDA margin. At 4.1x debt-to-EBITDA, Tenet's debt level is in the middle of the range of its peer companies, and Fitch does not expect the company to apply cash to debt reduction beyond some small note maturities in 2012 - 2013. Improving Financial Flexibility During 2011, Tenet made progress in extending debt maturities and refinancing some of its higher cost debt. In November 2011, Tenet issued $900 million of 6.25% senior secured notes due 2018 and used a portion of the proceeds to refund the $714 million 9% senior secured notes maturing 2015. Also in November 2011, Tenet entered into an amendment to its credit facility, extending final maturity by one year, to November 2016. There is a springing maturity under the bank facility to fourth-quarter 2014 unless the company refinances or repays $238 million of its $474 million 9.25% senior notes maturing 2015. Tenet's debt agreements do not include financial maintenance covenants, except for a 2.1x fixed charge coverage ratio test under the bank facility that is in effect whenever availability under the revolver is less than $80 million (at Dec. 31, 2011 availability was $574 million). The debt agreements do allow significant capacity for additional debt, including secured debt. Under the indentures covering the senior secured notes, secured debt is permitted up to the greater of $3.2 billion and 4.0x EBITDA. Debt secured on a basis pari passu to the secured notes is limited to the greater of $2.6 billion and 3.0x EBITDA. Fitch estimates that Tenet had about $1 billion of incremental capacity for debt secured on a basis pari passu to the senior secured notes and about $2 billion of total incremental secured debt capacity at Dec. 31, 2011. Strained FCF Profile Tenet's negative free cash flow (FCF, cash from operations less capital expenditures and dividends) profile remains the most important credit risk. In 2011, Fitch calculates FCF for Tenet of negative $2 million. The company's negative FCF in 2011 was influenced by an increase in accounts receivable due to the delay of state Medicaid payments and provider taxes and about $44 million of cash payments for litigation expense. Fitch notes that the rate of cash burn has been steadily improving over the past several years, showing continued incremental progress in achieving positive cash flow. Fitch's projects that Tenet's FCF will be slightly positive in 2012 based in part on improved profitability and positive cash tax implications of a $1.8 billion net operating loss. Improvement in Operating Results Tenet's patient volume growth trends shifted favorably beginning in 2011 and for 1Q'12, Tenet reports adjusted admissions growth of 2.8%, its sixth consecutive quarter of positive growth. Positive volume growth has helped the company improve its industry lagging profitability. Although Tenet continues to be less profitable than its peers, a 55 bps improvement in its Dec. 31, 2011 LTM EBITDA margin to 12.2% versus its 2010 EBITDA margin of 11.65% indicates that it is making incremental progress in closing the gap. Since there are no apparent catalysts for near-term improvement in organic patient volumes, Fitch thinks patient volume trends in the for-profit hospital industry will remain weak throughout the rest of 2012. Trends that indicate higher levels of structural unemployment and growth in the consumer share of healthcare spending support an expectation of weak organic volume trends in the sector for some time to come. Continued strength in pricing will be critical to maintenance of profitability. There some concerning headwinds to the pricing outlook, particularly in government reimbursement rates (Medicare and Medicaid payors). Tenet's recently improved level of profitability should be supported by its high level of outpatient healthcare services acquisitions. Starting in 2010, the company began a strategy of vertical integration in markets where it has an existing inpatient hospital presence, buying various outpatient assets, such as diagnostic imaging centers, ambulatory surgery centers and oncology centers. In 2011, Tenet spent $84 million on 15 outpatient facility acquisitions. This acquisition strategy is somewhat different than the current focus of Tenet's peer companies, which is to augment weak organic growth through the acquisition of inpatient acute-care hospitals. Outpatient acquisitions will not have as immediate of an impact of topline growth as inpatient acquisitions because outpatient volumes generate less revenue. Outpatient volumes are typically, however, more profitable. Shareholder Friendly Capital Deployment Tenet's capital deployment has recently become more shareholder friendly, as evidenced by use of the proceeds of a $300 million notes issue last week to retire preferred stock. The company has also deployed cash for share repurchases in recent periods. In 2011, Tenet spent about $375 million of cash on share buy-backs. This was the first time the company has bought back shares in recent history. During Q1'12 the company reports that it repurchased $26 million worth of shares. Guidelines for Further Rating Actions Maintenance of a 'B' IDR for Tenet would be consistent with credit metrics maintained at current levels, coupled with an expectation of sustained positive FCF generation. More clarity on Tenet's cash deployment strategy would also support the ratings in light of the company's recently more shareholder friendly capital deployment. A negative rating action for Tenet is unlikely in the near term but deterioration in the operating trend that results in lower profitability and ongoing negative FCF generation could result in a downgrade. Debt Issue Ratings Fitch has taken the following rating actions on Tenet: -- IDR upgraded to 'B' from 'B-'; -- Senior secured credit facility and senior secured notes upgraded to 'BB/RR1' from 'BB-/RR1'; -- Senior unsecured notes affirmed at 'B/RR4', previous rating 'B/RR3'. The recovery ratings (RR) reflect Fitch's expectation that the enterprise value of Tenet will be maximized in a restructuring scenario (going concern), rather than a liquidation. Fitch uses a 6.5x distressed enterprise value (EV) multiple and stresses LTM EBITDA by 35%, considering post restructuring estimates for interest and rent expense and maintenance level capital expenditure. The affirmation of the unsecured notes rating at 'B' despite the upgrade of the IDR is based on a lower estimated distressed EV multiple. In its previous recovery analysis for Tenet, Fitch assigned a 7.0x multiple. The 6.5x multiple is based on recent acquisition multiples in the healthcare provider space as well as the recent trends in the public equity valuations of the for- profit hospital providers. Fitch estimates Tenet's distressed enterprise valuation in restructuring to be approximately $4.9 billion. The 'BB+/RR1' rating senior secured bank facility and senior secured notes reflects Fitch's expectations for 100% recovery for these creditors. The 'B/RR4' rating on the unsecured notes rating reflects Fitch's expectations for recovery in the 31% - 51% range. Total debt of $4.5 billion at Dec. 31, 2011 consisted primarily of: Senior unsecured notes: -- $57 million due 2012; -- $216 million due 2013; -- $60 million due 2014; -- $474 million due 2015; -- $600 million due 2020; -- $430 million due 2031. Senior secured notes: -- $714 million due 2018; -- $900 million due 2018; -- $925 million due 2019. TPF II: S&P Cuts Rating on $205MM Facilities to 'B-'; Outlook Neg ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on TPF II LC LLC's $205 million in first-lien facilities to 'B-' from 'B+'. "The facilities consist of a $165 million seven-year senior secured term loan ($74.5 million outstanding as of Dec. 31, 2011) and a $40 million revolving facility, both of which mature in 2014. The recovery rating on the secured facilities is '1', indicating our expectation of very high (90% to 100%) recovery of principal in the event of default. The rating outlook is negative," S&P said. "The cleared capacity prices for the Pennsylvania-Jersey-Maryland (PJM) region's regional transmission organization (RTO) for the delivery years 2011-2012 and 2012-2013 are significantly lower at $16.46 per megawatt (MW) day and $27.73 per MW-day than the $110 per MW-day for the delivery year 2011-2012. (The delivery year begins on June 1.) As a result, TPF II's merchant capacity revenues will decline by more than 80% beginning in the second half of 2012 through the first quarter of 2013 compared with the first half of 2012. At this level, we calculate that the project will need about $3.5 million in merchant energy margins to meet its compliance covenant calculation beginning in the second half of 2012 through the first quarter of 2013. In addition, based on the project's historical performance (capacity factors at the two projects have historically been below pro forma expectations, averaging about 1% at Crete and less than 1% at Lincoln between 2007 and 2011, though Lincoln was contracted during this period), and current weak energy market conditions, we believe it could be difficult for the project to generate sufficient cash flows to meet mandatory debt service," S&P said. "Under our projections, the project will use up the available cash on its balance sheet by the end of the first quarter of 2013 and will have to tap its debt service reserve thereafter," said Standard & Poor's credit analyst Theodore Dewitt. "Absent equity cures, the project faces a covenant default in the first half of 2013 and a potential payment default in 2013." "The negative outlook on the ratings reflects our view that reduced revenue earned from merchant energy and a drop in capacity prices will leave the project with insufficient cash from operations to cover mandatory debt service beginning in 2012. Absent equity cures or other measures the project will likely experience a covenant default in the first half of 2013 and a potential payment default by the end of 2013. We could return the outlook to stable if project management intervenes with equity cures or other measures. Absent this intervention further downgrades are likely as the project utilizes its liquidity," S&P said. TRAINOR GLASS: Files Schedules of Assets and Liabilities -------------------------------------------------------- Trainor Glass Company filed with the Bankruptcy Court for the Northern District of Illinois its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $14,276,745 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $34,059,905 E. Creditors Holding Unsecured Priority Claims $1,373,289 F. Creditors Holding Unsecured Non-priority Claims $29,407,477 ----------- ----------- TOTAL $14,276,745 $64,840,672 A full text copy of the company's financial report is available free at http://bankrupt.com/misc/TRAINOR_GLASS_sal.pdf About Trainor Glass Trainor Glass Company, doing business as Trainor Modular Walls, Trainor Solar, and Trainor Florida, filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 12-09458) on March 9, 2012. Trainor was founded in 1953 by Robert J. Trainor Sr. to pursue a residential glass business in Chicago, Illinois. Trainor's business model was focused on quality fabrication, design, engineering, and installation of glass products and framing systems in virtually every architectural application, including (a) new construction, (b) green-building solutions, (c) building rehabilitation, (d) storefronts and entrances, (e) tenant interiors, and (f) custom-specialty work. The Hon. Carol A. Doyle oversees the Chapter 11 case. David A. Golin, Esq., Michael L. Gesas, Esq., and Kevin H. Morse, Esq., at Arnstein & Lehr LLP, serve as the Debtor's counsel. High Ridge Partners, Inc., serves as its financial consultant. The Debtor estimated both assets and debts of between $50 million and $100 million. A three-member official committee of unsecured creditors has been appointed in the case. The committee retained Sugar Felsenthal Grais & Hammer LLP as counsel. TRIBUNE CO: Bank Debt Trades at 31% Off in Secondary Market0 ----------------------------------------------------------- Participations in a syndicated loan under which Tribune Co. is a borrower traded in the secondary market at 68.69 cents-on-the- dollar during the week ended Friday, May 4, 2012, an increase of 1.15 percentage points from the previous week according to data compiled by Loan Pricing Corp. and reported in The Wall Street Journal. The Company pays 300 basis points above LIBOR to borrow under the facility. The bank loan matures on May 17, 2014. The loan is one of the biggest gainers and losers among 162 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Tribune CRO Don Liebentritt said it is possible the media company could emerge late in the third quarter of 2012. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) U.S. STEEL: Fitch Downgrades Issuer Default Rating to 'BB' ---------------------------------------------------------- Fitch Ratings downgrades United States Steel Corporation's (U.S. Steel; NYSE: X) Issuer Default Rating (IDR) to 'BB-' from 'BB'. The Rating Outlook is Stable. The ratings reflect adequate liquidity, weak but improving market conditions, and a period of higher financial leverage while earnings are below expected average. The Stable Outlook reflects Fitch's view that U.S. Steel's liquidity is sufficient to support operations should the recovery remain weak for the next 12-18 months. Fitch believes that free cash flow could be negative $160 million to neutral in 2012 given high capital spending offset by a modest work down of raw material inventory. Capital expenditures are expected to remain at elevated levels with projects to improve costs or for new products. While management has a high degree of control over its raw materials, the company has a large fixed cost base and industry- wide capacity utilization in North America has been less than 80%, thereby pressuring earnings. Industry-wide capacity utilization has averaged 78% in the U.S. for the year to date and recently hit 81%, and U.S. Steel's capacity utilization for North America for the first quarter was 83%. There is no raw steel being produced in Hamilton, which accounts for 2.3 million net tons or 9.5% of annual North American capacity. EBITDA for the year is expected to be $1.5 billion improving over the recovery to about a $2 billion run-rate. EBITDA was $375 million in 1Q'12 compared with $64 million in 1Q'11 and a loss of $8 million in 4Q'11. EBITDA was $836 million in 2011, $520 million in 2010 and a loss of $1.1 billion in 2009. In January 2012, the company divested U.S. Steel Serbia, which posted losses from operations in the amount of $17 million in 1Q'12 and $206 million in 2011. Debt at March 31, 2012, pro forma for the redemption of the $300 million due in 2013, was $3.9 billion. Fitch expects leverage to remain under 4 times. Liquidity is adequate with pro forma cash on hand at March 31, 2012 of $328 million, and the $875 million inventory backed revolver and the $625 million accounts receivable facility were fully available. The revolver expires July 20, 2016, and the receivables facility expires July 18, 2014. The revolver has a 1.00:1.00 fixed charges coverage ratio requirement only at such times as availability under the facility is less than the greater of 10% of total commitments and $87.5 million. Pro forma scheduled maturities of debt are estimated to be $20 million in 2012, $863 million in 2014, and $178 million in 2015. The $863 million due in 2014 is an out-of-the-money convertible issue. Capital expenditure guidance for 2012 is $900 million. Fitch expects interest expense in the range of $240 million to $255 million. A review of the ratings would be warranted should liquidity deteriorate beyond current expectations or if results are weaker than expected. Fitch would consider a positive rating action if debt levels are materially reduced. Fitch downgrades the following ratings for U.S. Steel: -- Long-term IDR to 'BB-' from 'BB'; -- Senior secured credit facility to 'BB' from 'BB+'; -- Senior unsecured notes to 'BB-' from 'BB'. ULTIMATE ACQUISITION: Suit Against Mitsubishi Digital Dismissed --------------------------------------------------------------- In the avoidance action, Alfred T. Giuliano, Chapter 7 Trustee of Ultimate Acquisition Partners, LP, et al., v. Mitsubishi Digital Electronics America, Inc. d/b/a Mitsubishi Digital Electronics, Adv. Proc. No. 11-52663 (Bankr. D. Del.), Bankruptcy Judge Mary F. Walrath granted Mitsubishi Digital's motion to dismiss the complaint for failure to state a claim for relief, with leave to amend. The Debtors regularly purchased products for resale from various manufacturers, suppliers, and distributors, including Mitsubishi. On May 16, 2011, Mitsubishi timely filed a proof of claim comprised of a secured claim of $49,395, and a general unsecured claim of $569,107 and an administrative expense priority claim under 11 U.S.C. Section 503(b)(9) of $829,393. The Chapter 7 Trustee filed the Complaint to avoid and recover alleged preferential transfers made to Mitsubishi on July 19, 2011. Mitsubishi filed the Motion to Dismiss on Oct. 19, 2011. A copy of the Court's May 1, 2012 Memorandum Opinion is available at http://is.gd/WUk56vfrom Leagle.com. About Ultimate Electronics Ultimate Acquisition Partners, LP, and CC Retail are wholly owned by Ultimate Acquisitions, LLC. UAP and CC operated 46 home entertainment and consumer electronics stores primarily in the mid-west and western United States under the name "Ultimate Electronics." Investment firm Wattles Capital Management formed Ultimate Acquisition Partners in 2005 for the purpose of acquiring Ultimate Electronics stores out of bankruptcy. Ultimate Acquisition and CC Retail filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-10245) on Jan. 26, 2011. Ultimate Acquisition estimated assets and liabilities between $100 million and $500 million. Kathleen Campbell Davis, Esq., and Mark T. Hurford, Esq., at Campbell & Levine LLC, in Wilmington, Del.; and Jay L. Welford, Esq., Judith Greenstone Miller, Esq., and Jonathan C. Myers, Esq., at Jaffe, Raitt, Heuer & Weiss, P.C., in Southfield, Mich., served as the Debtors' bankruptcy counsel. Kurtzman Carson Consultants LLC served as the claims and notice agent. An Official Committee of Unsecured Creditors was appointed on Feb. 9, 2011. The Panel hired BDO USA LLP as its financial advisor, and Cooley LLP and Womble Carlyle Sandridge & Rice PLLC as bankruptcy counsel. The Debtors obtained formal approval from the Court in February 2011 to conduct going-out-of-business sales at all 46 stores. Controlled by Mark J. Wattles, Ultimate Acquisition decided to liquidate when no one would provide financing for the reorganization. On May 3, 2011, the Court converted the Debtors' cases to Chapter 7 after the store liquidation was completed and the secured lender, General Electric Capital Corp., terminated the right to use cash. UNITED RENTALS: Moody's Affirms 'B2' Corp. Family Rating -------------------------------------------------------- Moody's Investors Service affirmed United Rentals (North America), Inc.'s (URNA's), a direct subsidiary of United Rentals (collectively "URI"), CFR and PDR at B2 and the company's outlook remains stable following the announcement that United Rentals, Inc. has closed its acquisition of RSC Holdings, Inc. In a related action, RSC's B3 CFR and PDR as well as its SGL-3 rating were withdrawn as a result of the acquisition. URI's SGL-3 was affirmed indicating that adequate liquidity is anticipated for the company over the next year. Ratings Rationale The B2 corporate family rating (CFR) reflects URI's expected moderate pro forma leverage for its rating, its now much larger scale relative to its competitors, and the expectation for strengthening operating margins. These attributes are balanced against the ongoing cyclicality of the non-residential construction sector, meaningful uncertainty in the commercial market, and expectation for negative cash flows as fleet equipment is added in response to increased demand. The B2 CFR reflects Moody's expectation that recent increases in capital expenditures will constrain free cash flow generation through at least 2012, but will allow for improved coverage metrics over time. The rating considers the company's acquisition of RSC, including the assumption of debt, the issuance of equity, and the related synergies. The affirmation of URI's ratings reflects the expectation for continued solid performance during 2012 following the completion of the acquisition, as the company benefits from the expanded geographic footprint, a more diversified customer base, and increasing rental utilization rate. Although the acquisition of RSC improves URI's competitive position, the company's leverage is elevated from previous levels although it remains appropriate for the B2 rating category. Moody's has taken the following ratings actions: Upgrades: Issuer: RSC Equipment Rental, Inc. assumed by United Rentals (North America), Inc. Senior Unsecured Regular Bond/Debenture, Upgraded to B3, LGD4, 63% from Caa1, LGD5, 77% Issuer: RSC Holdings III, LLC assumed by United Rentals (North America), Inc. Senior Unsecured Regular Bond/Debenture, Upgraded to B3, LGD4, 63% from Caa1, LGD5, 77% Outlook Actions: Issuer: RSC Equipment Rental, Inc. Outlook, Changed To Rating Withdrawn From Rating Under Review Issuer: RSC Holdings III, LLC Outlook, Changed To Rating Withdrawn From Rating Under Review Issuer: UR Financing Escrow Corporation Outlook, Changed To No Outlook From Stable Withdrawals: Issuer: RSC Equipment Rental, Inc. Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated Caa1, LGD5, 77% Issuer: RSC Holdings III, LLC Corporate Family Rating, Withdrawn, previously rated B3 Probability of Default Rating, Withdrawn, previously rated B3 Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-3 Senior Secured Bank Credit Facility, Withdrawn, previously rated Ba2, LGD2, 17% Affirmations: Issuer: United Rentals (North America), Inc. Corporate Family Rating, B2 Probability of Default Rating, B2 Speculative Grade Liquidity Rating, SGL-3 Outlook is Stable. Senior Unsecured Regular Bond/Debenture, B3, LGD4, 63% Gtd. Convertible Sr. Subordinated Notes, Caa1, LGD6, 93% Issuer: UR Financing Escrow Corporation assumed by United Rentals (North America), Inc. Senior Secured Regular Bond/Debenture, Ba3, LGD2, 23% Senior Unsecured Regular Bond/Debenture, B3, LGD4, 63% Issuer: United Rentals Trust I Gtd. Cum. Convertible Qrtly. Incm. Pfd. Secs., Caa1, LGD6, 96% URI's stable rating outlook reflects the expectation that while the company's EBITDA will grow as a result of the acquisition and improving demand, its aggressive capital expenditure program may result in higher debt levels which will limit the rate of credit metric improvement. Moreover, URI recently repurchased $75 million worth of its outstanding shares. This was only part of a larger stock repurchase program that also constrains the rate of improvement in the company's credit metrics. URI is strongly positioned in the B2 rating category and has significant flexibility before the rating would come under pressure. The ratings may be downgraded if the company's debt to EBITDA was to increase over 6.0 times or if its EBITDA to interest coverage was to fall below 2 times and was expected to deteriorate further. A decline in its fleet utilization rates could also result in negative ratings pressure. Ratings could also be pressured if capital expenditures continue to grow without corresponding growth in operating cash flow and earnings. Positive rating action may result if the company was to delever its balance sheet so that debt to EBITDA was to fall below 4.0 times and was anticipated to further improve. Improving margins and good overall returns on its fleet would be considered in determining the level of positive ratings traction. The principal methodology used in rating United Rentals, Inc. and subsidiaries was the Global Equipment and Automobile Rental Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in July 2010. United Rentals, Inc. is a holding company that conducts its operations through its wholly owned subsidiary, United Rentals (North America), Inc. and its subsidiaries (collectively "URI"). URI is the world's largest equipment rental company operating approximately 529 rental locations in the United States (48 states; serving 99 of the 100 largest metropolitan areas) and each Canadian province. Revenues are derived primarily from equipment rentals, sales of used rental equipment, sales of new equipment, and contractor supplies sales and service. Revenues for the LTM period ended March 31, 2012 totaled $2.7 billion. RSC Holdings III, and its subsidiaries, was one of the largest equipment rental companies in North America operating 440 locations throughout the United States and Canada. The company maintained over 900 categories of equipment having an original equipment cost of $2.7 billion. RSC Holdings total revenues for 2011 totaled $1.5 billion. VERSO PAPER: Has Exchange Offer, Sub Debt at 69 Cents ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported Friday that Verso Paper Holdings LLC announced an offer to repurchase as much as $157.5 million of the $300 million in 11.375% senior subordinated notes due 2016 for $104.7 million in 11.75% secured notes due 2019. In addition, holders of the subordinated debt will receive $110 for each $1,000 in principal amount if tendered before May 8. For tenders after May 8, the cash drops to $60 per $1,000. The subordinated notes last traded Thursday for 69 cents on the dollar, according to Trace, the bond- price reporting system of the Financial Industry Regulatory Authority. According to the report, Verso, based in Memphis, Tennessee, also modified an existing exchange offer for its second-lien floating- rate notes. Verso says that the exchanges will reduce debt by $53 million and extend the maturity on some obligations to 2019. Standard & Poor's said Thursday that it will give the company a B corporate rating once the exchanges are completed. The offer for the subordinated debt qualifies as a distressed exchange, S&P said. Based in Memphis, Tennessee, Verso Paper Corp. is a North American producer of coated papers, including coated ground-wood and coated freesheet, and specialty products. Verso's paper products are used primarily in media and marketing applications, including magazines, catalogs and commercial printing applications such as high-end advertising brochures, annual reports and direct-mail advertising. VERSO PAPER: S&P Lowers Corp. Credit Rating to 'CC'; Outlook Neg ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Memphis, Tenn.-based coated-paper manufacturer Verso Paper Holdings LLC (Verso Paper) to 'CC' from 'B'. The rating outlook is negative. "At the same time, we assigned a 'BB-' (two notches higher than the post-exchange corporate credit rating) issue-level rating and a '1' recovery rating to the proposed 11.75% secured notes due 2019. The '1' recovery rating indicates our expectation of very high (90% to 100%) recovery in the event of a payment default," S&P said. "We also lowered our issue-level rating on the company's $300 million 11.375% senior subordinated notes due 2016 (subordinated notes) to 'CC' from 'CCC+'. The company has offered to issue up to $104.7 million of aggregate principal of 11.75% secured notes due 2019 (exchange notes) in exchange for up to $157.5 million of the subordinated notes. According to the exchange offer materials, the liens securing the proposed exchange notes would rank ahead of the liens securing the $396 million 8.75% notes due 2019. The liens securing the proposed exchange notes would rank junior to the liens securing the company's $345 million 11.75% notes due 2019, as well as the proposed new $150 million ABL facility and $50 million revolving credit facility," S&P said. "All other issue-level and recovery ratings remain unchanged. If the company issues the proposed exchange notes, we would expect to lower our issue-level rating to 'CCC+' from 'B' and revise the recovery rating to '6' from '3' on the $396 million notes due 2019. The '6' recovery rating indicates our expectation of negligible (0% to 10%) recovery in the event of a payment default. Under our analysis, the 8.75% notes will have weaker recovery prospects as a result of the debt exchange, since the liens securing these notes will be subordinated to the liens securing the proposed exchange notes," S&P said. "The downgrade follows Verso Paper's announced exchange offer to issue up to $104.7 million aggregate principal amount of the proposed exchange notes in exchange for up to $157.5 million of subordinated notes," said Standard & Poor's credit analyst Tobias Crabtree. "According to our criteria, we view this as a 'distressed exchange' and tantamount to default." "According to the offer, each existing holder would receive $665 principal amount (or 67% of par) of the proposed exchange notes and a cash payment of $110 for each $1,000 principal amount of subordinated notes due 2016 they validly tender on or prior to 5:00 p.m. May 8, 2012. Each holder who doesn't validly tender its subordinated notes prior to May 8, 2012, will receive $665 principal amount of the proposed exchange notes and a cash payment of $60 for each $1,000 of subordinated notes tendered. Verso Paper has offered to exchange no more than $157.5 million aggregate principal amount of the $300 million subordinated notes. As noted, the company has also amended the terms of its existing exchange offer for its second priority secured floating rate notes due 2014 (floating rate notes). Under the amended terms, the company is offering to issue the proposed exchange notes on a dollar-for- dollar basis in exchange for any and all floating rate notes, plus a cash payment of $30 million for each $1,000 principal amount of floating rate notes tendered. (Verso had previously proposed to issue 9.75% secured notes due 2019 in exchange for the floating rate notes, including a $50 an early tender payment for each $1,000 principal amount tendered). According to the offer, any exchange notes that Verso issues - whether in exchange for subordinated notes or floating rate notes - would comprise a single class of securities under the same indenture," S&P said. "The two announced exchange offers, if successfully completed, would reduce Verso Paper's debt level by approximately $53 million and extend the maturity of a portion of its debt to 2019. After the completion of the proposed debt exchanges, we have determined we would raise our corporate credit ratings to 'B' from 'SD'. The post-exchange 'B' corporate credit rating on Verso Paper reflects Standard & Poor's view of the combination of its '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, proposed new credit facilities, and manageable near-term debt maturity profile following the proposed exchange offers," S&P said. "Verso is the second largest coated paper manufacturer in North America and accounts for about 17% of total production capacity. A substantial proportion of its sales are to catalogs and magazines end users, which we believe are susceptible to substitution risks due to changing customer preferences for greater electronic content, particularly with increased penetration of e-readers and tablet computers," S&P said. "The rating outlook is negative. If Verso Paper completes the proposed exchange offer, we will lower our corporate credit rating on Verso Paper Holdings LLC to 'SD' and downgrade the 2016 subordinated notes to 'D'. After the debt exchanges, we have determined we would raise our corporate credit ratings to 'B' from 'SD' based on the proposed capital structure, our current 2012 EBITDA expectations, and our view of the company's adequate liquidity position," S&P said. WIN-WIN INVESTMENT: Case Summary & 8 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Win-Win Investment Network, LLC 6555 Sugarloaf Parkway, Suite 307-303 Duluth, GA 30097 Bankruptcy Case No.: 12-61347 Chapter 11 Petition Date: May 1, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Judge: Margaret Murphy Debtor's Counsel: Larry Russell, Esq. 5195 Clearwater Drive Stone Mountain, GA 30087 Tel: (404) 510-8888 E-mail: larry31141@yahoo.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb12-61347.pdf The petition was signed by John Clark, managing member. WINTDOTS DEVELOPMENT: Sec. 341 Creditors' Meeting Reset to May 18 ----------------------------------------------------------------- The Office of the United States Trustee rescheduled the Meeting of Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of Wintdots Development, LLC, to May 18, 2012. The meeting will be held at Ron De Lugo Federal Building & Courthouse, 5500 Veterans Drive, Suite 310, in St. Thomas, Virgin Islands. The original Sec. 341(a) meeting was scheduled on April 12, 2012. The last day to object to dischargeability is June 11, 2012. Proofs of claim are due by July 11, 2012, while government proofs of claim are due Sept. 7, 2012. The case docket says Wintdots is required to file a Chapter 11 Plan and Disclosure Statement by July 9, 2012. About Wintdots Development Wintdots Development, LLC, filed a Chapter 11 petition (Bankr. D. V.I. Case No. 12-30003) in its hometown in St. Thomas, Virgin Islands on March 11, 2011. The Debtor disclosed $56.42 million in assets and $10.79 million in liabilities in its schedules. The Debtor has three properties totaling 21 acres in St. Thomas that are valued at $56.40 million. Each of the properties secures a $9.60 million first lien debt to Kennedy Funding, Inc., and a $225,000 second lien debt to Marvin & Evelyn Freund. Delaware bankruptcy judge Mary F. Walrath oversees the case. Benjamin A. Currence P.C., represents the Debtor. WEST SPEEDWAY II: Not Bound to Supply Natural Gas to Lot Owners --------------------------------------------------------------- West Speedway Phase II, LLC, which assumed development of the Enclaves at Gates Pass subdivision in Tucson, is not contractually bound to supply natural gas to all of the lots in Phase I, including lots owned by existing lot owners, Bankruptcy Judge Eileen W. Hollowell ruled in an amended April 30, 2012 Memorandum Decision available at http://is.gd/D0MTUDfrom Leagle.com. Development at the Subdivision was to occur in two phases. Phase I was developed first and consisted of roughly 21 custom home lots. Most of those lots were sold between 2004 and 2006, despite the fact that the Subdivision's improvements were incomplete -- making it impossible for the purchasers of the lots to build their houses. Since 2006, there have been two different bankruptcies involving the Subdivision. In 2008, the first developer, West Speedway Partners, as part of its Chapter 11 plan of reorganization, transferred the unsold portions of the Subdivision to West Speedway Partners II. In 2009, after WSII's expected financing collapsed, it too filed for Chapter 11. Since then, litigation has been filed and dismissed in multiple courts. Deadlines for subdivision reports, various settlement agreements, and bankruptcy court orders have come and gone. The performance bond issued to assure completion of improvements in Phase I has been called by Pima County and, pursuant to a 2010 settlement agreement, released to WSII to be used exclusively to complete improvements in Phase I. According to the court order, regulatory approvals and disputes among the parties have led to one delay after another. Former allies have become adversaries. Multiple mediations have been held. Conflict continues. "Perhaps this Court's decision, that WSI's obligation to supply natural gas is solely contractual and does not include the Lot Owners' Lots, will bring closure and permit the parties to move forward," Judge Hollowell said. "Theoretically, anything can happen. For example, one day pigs may learn how to fly." The Court also denied the requests of Lot Owners and WSII for an award of attorneys' fees against each other. Neither side cites any authority that would permit an award of attorneys' fees in their favor, and the Court is aware of none. West Speedway Partners LLC filed for Chapter 11 bankruptcy (Bankr. D. Ariz. Case No. 06-01632) on Dec. 15, 2006, Judge Eileen W. Hollowell presiding. Jonathan M. Saffer, Esq., at Snell & Wilmer, LLP, served as counsel. As of Dec. 15, 2006, it disclosed $4,100,853 in assets and $346,177 in debts. An affiliate, Villas at Hacienda del Sol, Inc., filed for Chapter 11 protection (Bankr. D. Ariz. Case No. 05-01482) on March 28, 2005. Stockton, California-based West Speedway Phase II LLC, the second developer for the Enclaves at Gates Pass, sought Chapter 11 protection (Bankr. D. Ariz. Case No. 09-15664) on July 8, 2009, listing $1 million to $10 million in assets and $1 million to $10 million in liabilities. Eric Slocum Sparks, Esq., serves as counsel. WSG CHARLOTTESVILLE: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: WSG Charlottesville, LLC 2286 NE 123rd Street Miami, FL 33181 Bankruptcy Case No.: 12-12785 Chapter 11 Petition Date: May 1, 2012 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Debtor's Counsel: Lawrence Allen Katz, Esq. LEACH TRAVELL BRITT PC 8270 Greensboro Drive, Suite 1050 McLean, VA 22102 Tel: (703) 584-8362 Fax: (703) 584-8901 E-mail: lkatz@ltblaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vaeb12-12785.pdf The petition was signed by Eric D. Sheppard, executive and operating manager. Affiliates that previously filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- ATL 2130 LP 11-76017 09/06/11 WSG Dulles GL, LLC 12-11151 02/23/12 WSG Dulles, LP 12-11149 02/23/12 WSG Trace Fork, LP 12-11756 03/16/12 YRC WORLDWIDE: Incurs $85.5 Million Net Loss in First Quarter ------------------------------------------------------------- YRC Worldwide Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of $85.48 million on $1.19 billion of operating revenue for the three months ended March 31, 2012, compared with a net loss attributable to the Company of $102.19 million on $1.12 billion of operating revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $2.48 billion in total assets, $2.91 billion in total liabilities and a $431.81 million total shareholders' deficit. "We are experiencing increased efficiencies at each of our operating companies. Our employees are responding extremely well to our operating changes to regain a leading position in the LTL industry, and earlier this week, our senior credit facility lenders gave us a unanimous vote of confidence by amending those facilities to increase our liquidity by allowing us to retain the proceeds from the disposition of some excess real estate and increasing our financial flexibility for the foreseeable future. This is an exciting time at YRCW as our team now has the financial flexibility and the tools to take this business to the next level," stated James Welch, chief executive officer of YRC Worldwide. "Our plan is to continue building on this positive momentum throughout 2012 with the determination of delivering consistent, high-quality service that is both reliable and cost effective. The feedback we're getting is that our operating companies are providing the service levels our customers expect, and they are rewarding us with increased levels of business as our first quarter results indicate," Welch said. A copy of the Form 10-Q is available for free at: http://is.gd/jMcM3z About YRC Worldwide Headquartered in Overland Park, Kan., YRC Worldwide Inc. (NASDAQ: YRCW) -- http://www.yrcw.com/-- is a holding company that through wholly owned operating subsidiaries offers its customers a wide range of transportation services. These services include global, national and regional transportation as well as logistics. The Company reported a net loss of $354.41 million in 2011, a net loss of $327.77 million in 2010, and a net loss of $619.47 million in 2009. After auditing the 2011 results, the Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. KPMG LLP, in Kansas City, Missouri, noted that the Company has experienced recurring net losses from continuing operations and operating cash flow deficits and forecasts that it will not be able to comply with certain debt covenants through 2012. * * * As reported in the Aug. 2, 2011 edition of the TCR, Moody's Investors Service revised YRC Worldwide Inc.'s Probability of Default Rating ("PDR") to Caa2\LD ("Limited Default") from Caa3 in recognition of the agreed debt restructuring which will result in losses for certain existing debt holders. In a related action Moody's has raised YRCW's Corporate Family Rating to Caa3 from Ca to reflect modest but critical improvements in the company's credit profile that should result from its recently-completed financial restructuring. The positioning of YRCW's PDR at Caa2\LD reflects the completion of an offer to exchange a substantial majority of the company's outstanding credit facility debt for new senior secured credit facilities, convertible unsecured notes, and preferred equity, which was completed on July 22, 2011. In August 2011, Standard & Poor's Ratings Services raised its corporate credit rating on YRC Worldwide Inc. to 'CCC' from 'SD' (selective default), after YRC completed a financial restructuring. Outlook is stable. "The ratings on Overland Park, Kan.-based YRCW reflect its participation in the competitive, capital-intensive, and cyclical trucking industry," said Ms. Ogbara, "as well as its meaningful off-balance-sheet contingent obligations related to multiemployer pension plans." "YRCW's substantial market position in the less- than-truckload (LTL) sector, which has fairly high barriers to entry, partially offsets these risk factors. We categorize YRCW's business profile as vulnerable, financial profile as highly leveraged, and liquidity as less than adequate." * April 2012 Chapter 11 Bankruptcy Filings Down 17% --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that according to data compiled from court records by Epiq Systems Inc., April had the fewest commercial bankruptcies since January 2008, when business failures were increasing as a result of the recession. Individual bankruptcies similarly continued a downward trend in April. The 109,000 bankruptcies of all types in April were 7% fewer than March, 16% below April 2011, and 22% less than April 2010. There were 244 commercial failures around the country every business day in April, Epiq said. The resulting business bankruptcies in April were 25% below the same month in 2011. According to the report, annualized, individual and corporate bankruptcies of all types this year are running 8% below the 1.38 million total in 2011. In turn, 2011 bankruptcies were 12% fewer than the 1.56 million in 2010, the most bankruptcies since 2005, when the all-time record was set at 2.1 million. The 852 April filings in Chapter 11, where larger companies reorganize or sell assets, came in 17% below April 2011 and were the fewest since November, Epiq reported. Companies are increasingly able to avoid bankruptcy because "receptive credit markets are allowing issuers to refinance maturities and amend covenants," Moody's Investors Service said this month in explaining why liquidity is improving among even junk-rated companies in the weakest financial condition. * Florida Bank's Failure Bring Year's Tally to 23 ------------------------------------------------- The number of U.S. failures reached 23 this year, after regulators on Friday shut Security Bank, National Association, of North Lauderdale, Fla., and the Federal Deposit Insurance Corp. was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Banesco USA of Coral Gables, Fla., to assume all of the deposits of Security Bank, National Association. As of March 31, 2012, Security Bank, National Association had around $101.0 million in total assets and $99.1 million in total deposits. In addition to assuming all of the deposits of the failed bank, Banesco USA agreed to purchase essentially all of the assets. The FDIC estimates that the cost to the Deposit Insurance Fund will be $10.8 million. Security Bank is the third FDIC-insured institution to fail in Florida this year. 2012 Failed Banks List The FDIC was appointed as receiver for the closed banks. To protect the depositors, the FDIC entered into a purchase and assumption agreement with various banks that agreed to assume the deposits of most of the closed banks. The FDIC also entered into loss-share transactions on assets bought by the banks. For this year, the failed banks are: Loss-Share Transaction Party FDIC Cost Assets of Bank That Assumed to Insurance Closed Bank Deposits & Bought Fund Closed Bank (millions) Certain Assets (millions) ----------- ----------- ----------------- ------------ Security Bank, N.A. $101.0 Banesco USA $10.8 Palm Desert Nat'l $125.8 Pacific Premier Bank $20.1 Plantation Federal $486.4 First Federal Bank $76.0 HarVest Bank of Md. $164.3 Sonabank $17.2 Bank of the Est. Shore $166.7 [No Acquirer] $41.8 Inter Savings Bank $473.0 Great Southern Bank $117.5 Fort Lee Federal $51.9 Alma Bank $14.0 Fidelity Bank $818.2 The Huntington Nat'l $92.8 Premier Bank $268.7 Int'l Bank of Chi. $64.1 Covenant Bank $95.7 Stearns Bank, N.A. $31.5 New City Bank $71.2 [No Acquirer] $17.4 Global Commerce Bank $143.7 Metro City Bank $17.9 Central Bank of Georgia $278.9 Ameris Bank $67.5 Home Savings of Amer. $434.1 [No Acquirer] $38.8 Charter National Bank $93.9 Barrington Bank $17.4 SCB Bank $182.6 First Merchants Bank $33.9 Patriot Bank $111.3 First Resource Bank $32.6 BankEast $272.6 U.S. Bank N.A. $75.6 Tennessee Commerce $1,185.0 Republic Bank & Trust $416.8 First Guaranty Bank $377.9 CenterState Bank $82.0 American Eagle $19.6 Capital Bank, N.A. $3.2 The First State Bank $416.8 Hamilton State Bank $416.8 Central Florida $79.1 CenterState Bank $24.4 In 2011 there were 92 failed banks, compared with 157 in 2010, 140 in 2009 and just 25 for 2008. A complete list of banks that failed since 2000 is available at: http://www.fdic.gov/bank/individual/failed/banklist.html 813 Banks in Problem List The FDIC's Quarterly Banking Profile for Dec. 31, 2011, says that The number of institutions on the FDIC's "Problem List" declined from 844 to 813 during the quarter, and total assets of "problem" institutions fell from $339 billion to $319.4 billion. The number of institutions in the "problem list" has decreased for the third consecutive quarter. The FDIC defines "problem" institutions as those with financial, operational or managerial weaknesses that threaten their viability. The deposit insurance fund, which protects customer holdings up to $250,000 per account in the event of a failure, saw its balance increase in the fourth quarter to $9.2 billion (unaudited) from $7.8 billion in the third quarter, the eighth consecutive quarterly increase. Problem Institutions Failed Institutions -------------------- ------------------- Year Number Assets (Mil) Number Assets (Mil) ---- ------ ------------ ------ ------------ 2011 813 $319,432 92 $34,923 2010 884 $390,017 157 $92,085 2009 702 $402,800 140 $169,700 2008 252 $159,405 25 $371,945 2007 76 $22,189 3 $2,615 2006 50 $8,265 0 $0 2005 52 $6,607 0 $0 2004 80 $28,250 4 $170 Federal regulators assign a composite rating to each financial institution, based upon an evaluation of financial and operational criteria. The rating is based on a scale of 1 to 5 in ascending order of supervisory concern. "Problem" institutions are those institutions with financial, operational, or managerial weaknesses that threaten their continued financial viability. Depending upon the degree of risk and supervisory concern, they are rated either a "4" or "5." The number and assets of "problem" institutions are based on FDIC composite ratings. Prior to March 31, 2008, for institutions whose primary federal regulator was the OTS, the OTS composite rating was used. * BOND PRICING -- For Week From April 30 to May 4, 2012 ------------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- A123 SYSTEMS INC 3.750 4/15/2016 32.015 AES EASTERN ENER 9.000 1/2/2017 26.500 AGY HOLDING COR 11.000 11/15/2014 37.000 AHERN RENTALS 9.250 8/15/2013 60.733 ALION SCIENCE 10.250 2/1/2015 47.546 AM AIRLN PT TRST 10.180 1/2/2013 67.550 AM AIRLN PT TRST 7.379 5/23/2016 31.000 AMBAC INC 9.375 8/1/2011 18.500 AMBAC INC 9.500 2/15/2021 18.500 AMBAC INC 6.150 2/7/2087 0.625 AMER GENL FIN 5.200 5/15/2012 98.799 AMR CORP 9.000 8/1/2012 50.000 BLOCKBUSTER INC 11.750 10/1/2014 1.688 BROADVIEW NETWRK 11.375 9/1/2012 91.000 CCM MERGER INC 8.000 8/1/2013 99.875 CHRCH CAP FNDING 6.600 5/15/2013 25.000 DELTA AIR 1992B1 9.375 9/11/2017 26.625 DELTA AIR 1993A1 9.875 4/30/2049 19.260 DIRECTBUY HLDG 12.000 2/1/2017 18.000 DIRECTBUY HLDG 12.000 2/1/2017 18.000 DUNE ENERGY INC 10.500 6/1/2012 92.750 EASTMAN KODAK CO 7.250 11/15/2013 30.050 EASTMAN KODAK CO 7.000 4/1/2017 30.000 EASTMAN KODAK CO 9.950 7/1/2018 30.100 EDISON MISSION 7.500 6/15/2013 74.500 ELEC DATA SYSTEM 3.875 7/15/2023 95.000 ENERGY CONVERS 3.000 6/15/2013 50.450 EVERGREEN SOLAR 13.000 4/15/2015 50.000 FIRST METRO 6.900 1/15/2019 15.000 GLB AVTN HLDG IN 14.000 8/15/2013 33.250 GLOBALSTAR INC 5.750 4/1/2028 49.250 GMX RESOURCES 5.000 2/1/2013 72.331 GMX RESOURCES 5.000 2/1/2013 74.750 HAWKER BEECHCRAF 8.500 4/1/2015 19.250 HAWKER BEECHCRAF 8.875 4/1/2015 15.100 HAWKER BEECHCRAF 9.750 4/1/2017 3.026 KELLWOOD CO 7.625 10/15/2017 30.500 KV PHARMA 2.500 5/16/2033 17.212 KV PHARMA 2.500 5/16/2033 18.250 LEHMAN BROS HLDG 0.250 12/8/2012 22.125 LEHMAN BROS HLDG 0.250 12/8/2012 22.125 LEHMAN BROS HLDG 1.000 12/9/2012 22.125 LEHMAN BROS HLDG 1.500 3/29/2013 22.125 LEHMAN BROS HLDG 1.000 10/17/2013 22.125 LEHMAN BROS HLDG 0.250 12/12/2013 22.125 LEHMAN BROS HLDG 0.250 1/26/2014 22.125 LEHMAN BROS HLDG 1.250 2/6/2014 22.125 LEHMAN BROS HLDG 1.000 3/29/2014 22.125 LEHMAN BROS HLDG 1.000 8/17/2014 22.125 LEHMAN BROS HLDG 1.000 8/17/2014 22.125 LEHMAN BROS INC 7.500 8/1/2026 10.250 LIFECARE HOLDING 9.250 8/15/2013 64.055 MANNKIND CORP 3.750 12/15/2013 56.000 MASHANTUCKET PEQ 8.500 11/15/2015 10.360 MF GLOBAL LTD 9.000 6/20/2038 42.750 NETWORK EQUIPMNT 7.250 5/15/2014 35.100 NEWPAGE CORP 10.000 5/1/2012 5.500 OSI PHARMACEUTIC 3.000 1/15/2038 79.510 PENSON WORLDWIDE 8.000 6/1/2014 31.024 PMI CAPITAL I 8.309 2/1/2027 0.500 PMI GROUP INC 6.000 9/15/2016 23.000 POWERWAVE TECH 3.875 10/1/2027 25.079 POWERWAVE TECH 3.875 10/1/2027 25.000 REAL MEX RESTAUR 14.000 1/1/2013 46.000 REDDY ICE CORP 13.250 11/1/2015 28.650 REDDY ICE HLDNGS 10.500 11/1/2012 56.500 RESIDENTIAL CAP 6.500 4/17/2013 36.000 RESIDENTIAL CAP 6.875 6/30/2015 47.470 SUPERVALU INC 7.500 5/15/2012 100.000 TERRESTAR NETWOR 6.500 6/15/2014 10.000 TEXAS COMP/TCEH 7.000 3/15/2013 15.000 TEXAS COMP/TCEH 10.250 11/1/2015 20.500 TEXAS COMP/TCEH 10.250 11/1/2015 21.650 TEXAS COMP/TCEH 10.250 11/1/2015 20.875 TEXAS COMP/TCEH 15.000 4/1/2021 29.500 TEXAS COMP/TCEH 15.000 4/1/2021 30.000 THORNBURG MTG 8.000 5/15/2013 7.000 TIMES MIRROR CO 7.250 3/1/2013 36.000 TOUSA INC 9.000 7/1/2010 32.000 TOUSA INC 9.000 7/1/2010 31.000 TRAVELPORT LLC 11.875 9/1/2016 35.375 TRAVELPORT LLC 11.875 9/1/2016 37.750 TRIBUNE CO 5.250 8/15/2015 36.700 TRICO MARINE 3.000 1/15/2027 0.750 TRICO MARINE 3.000 1/15/2027 0.031 USEC INC 3.000 10/1/2014 42.000 VENTURE HLDGS 11.000 6/1/2007 5.000 VENTURE HLDGS 12.000 6/1/2009 5.000 WASH MUT BANK FA 6.875 6/15/2011 0.010 WASH MUT BANK FA 5.650 8/15/2014 0.010 WASH MUT BANK FA 5.125 1/15/2015 0.010 WASH MUT BANK NV 6.750 5/20/2036 0.875 ********* 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 ***