/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120511.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, May 11, 2012, Vol. 16, No. 130 Headlines 785 PARTNERS: Judge Approves Amended Bankruptcy Exit Plan ALPHA NATURAL: S&P Cuts Corp Credit Rating to 'BB-' on Demand Drop AMBAC FINANCIAL: Sues BofA & JPMorgan Over MBS Transactions AMBAC FINANCIAL: Withdraws Suit Over $8.5-Bil. Mortgage Bond Deal AMBAC FINANCIAL: Delaware High Court Upholds DPRFS Suit Dismissal AMERICA'S SUPPLIERS: Incurs $43,800 Net Loss in First Quarter AMWINS GROUP: S&P Affirms 'B' Counterparty Credit Rating ART HORIZONS: Case Summary & 20 Largest Unsecured Creditors ASP NEP/NCP: S&P Gives 'B' Corporate Credit Rating; Outlook Stable AUBURN SPORTSPLEX: Voluntary Chapter 11 Case Summary AVANTAIR INC: Richard Pytak Quits as Chief Accounting Officer BARNEYS NEW YORK: Moody's Affirms 'Caa3' CFR After Restructuring BARNEYS NEW YORK: S&P Raises Corporate Credit Rating to 'B-' BETSEY JOHNSON: Fails to Attract Going Concern Buyer; To Shut Down BILL BARRETT: S&P Affirms 'BB-' Corp. Credit Rating; Outlook Neg BILL PLISE: Has $506MM in Debts Against $4,700 in Assets BOWLES SUB: Case Summary & 20 Largest Unsecured Creditors CAESARS ENTERTAINMENT: To Sell St. Louis for $610 Million CAESARS ENTERTAINMENT: Fitch Junks LT Issuer Default Rating CAGLE'S INC: Suspending Filing of Reports with SEC CAPITOL INFRASTRUCTURE: DirecTV Denies Blame for Chapter 11 CDC CORP: China.com Wants Order Denying Case Dismissal Reviewed CENTURION PROPERTIES: Access to GECC's Cash OK'd Until June 30 CENTURION PROPERTIES: Wants to Use Cash to Pay Sigma Expenses CHARLIE McGLAMRY: Files for Chapter 11 With 14 Companies CHESAPEAKE ENERGY: Moody's Affirms 'Ba2' CFR, Outlook Negative CICERO INC: CBH Replaces Marcum as Independent Accountant CITRUS COUNTY: Fitch Cuts Rating on $39.4-Mil. Notes to 'BB-' CLAYTON WILLIAMS: Moody's Upgrades CFR to 'B2', Outlook Stable COLT DEFENSE: S&P Puts 'B-' Corp. Credit Rating on Watch Negative COMSTOCK RESOURCES: S&P Lowers Corporate Credit Rating to 'B' CONDOR DEVELOPMENT: Court Okays Larry B. Feinstein as Counsel CONTRACT RESEARCH: Durata Therapeutics Balks at Specifics of Sale DEWEY & LEBOEUF: PBGC to Terminate 3 Underfunded Pension Plans DEWEY & LEBOEUF: Employee Sues Over WARN Act Violations DOLE FOOD: S&P Affirms 'B' Corp. Credit Rating; Outlook Developing E*TRADE BANK: S&P Keeps 'B+' Issuer Credit Rating; Outlook Stable EGPI FIRECREEK: Incurs $4.9 Million Net Loss in 2011 ELO TOUCH: S&P Assigns 'B' Corporate Credit Rating; Outlook Stable ENERGY CONVERSION: Hearing on Equity Panel Adjourned to May 16 ENERGY CONVERSION: Trony Solar Still Interested in Buying Unit ESSELTE GROUP: S&P Gives 'B' Corp. Credit Rating; Outlook Stable EXCO RESOURCES: S&P Lowers Corp. Credit Rating to 'B'; Outlook Neg FERROMET CORP: Case Summary & 20 Largest Unsecured Creditors FIRST REPUBLIC: Fitch Affirms Rating on Preferred Stock at 'BB-' FIRSTFED FINANCIAL: Seeks to Adjourn Disclosure Statement Hearing FLORIDA DEV'T: Fitch Affirms Rating on $89-Mil. Bonds at 'BB+' GENERAC POWER: S&P Puts 'BB-' Corp. Credit Rating on Watch Neg GEORGIA GULF: S&P Affirms 'BB-' Corp. Credit Rating; Off Watch Pos GIBSON ENERGY: Moody's Issues Correction to April 26 Release GLOBAL FOOD: Incurs $658,000 Net Loss in First Quarter GUITAR CENTER: S&P Affirms 'B-' Corp. Credit Rating; Outlook Neg GUSHAN ENVIRONMENTAL: Gets NYSE Notice of Non-Compliance HARCH CLO III: Moody's Raises Rating on Class D Notes From 'Ba1' HANMI FINANCIAL: Files Form 10-Q; Posts $7.3MM Net Income in Q1 HAYDEL PROPERTIES: Can Hire Alfonso for Sale of 9424 Three Rivers HAYDEL PROPERTIES: Can Hire Schwartz Orgler to Handle Assets Sale HAYDEL PROPERTIES: Court Okays Mark Cumbest as Real Estate Broker HAYDEL PROPERTIES: Has OK to Hire Owen & Co. as Real Estate Broker HEALTH DISTILLERS: Case Summary & 4 Largest Unsecured Creditors HCSB FINANCIAL: Authorized Common Shares Hiked to $500 Million HOLLIFIELD RANCHES: Can Access $1.6-Mil JR Simplot Secured Debt HOLLIFIELD RANCHES: Pegs KeyBank Claim at $14.1 Million HOLLIFIELD RANCHES: To Liquidate White Gold Dairy HOOPER PROPERTY: Files for Bankruptcy to Restructure Debts HOOPER PROPERTY: Case Summary & 4 Largest Unsecured Creditors HOSTESS BRANDS: Teamsters Willing to Continue Talks HOSTESS BRANDS: Warns Workers That Everyone May Be Fired HUBBARD PROPERTIES: Can Hire Hendry Real Estate as Appraiser ICON HEALTH: Moody's Affirms 'B1' CFR, Outlook Negative INMET MINING: S&P Assigns 'B+' Corp Credit Rating; Outlook Stable INTELSAT SA: Lowers Net Loss to $24.2 Million in First Quarter INTERACCIONES BANKING: Antigua Liquidators File Ch. 15 Petition INTERNATIONAL MEDIA: Wants Plan Filing Deadline Extended to July 9 INTRINSIC TECHNOLOGIES: Files for Chapter 11 Bankruptcy Protection ISLAND RECYCLING: Voluntary Chapter 11 Case Summary JEFFERSON COUNTY, AL: FGIC Blocked on Raising Sewer Rates JESCO CONTRUCTION: Wants 90-Day Extension of Exclusive Periods LAS VEGAS MONORAIL: Bankruptcy Judge to Confirm Plan LEVEL 3: Files Form 10-Q, Incurs $138 Million Net Loss in Q1 LITTLE SCHOOLHOUSE: Case Summary & 12 Largest Unsecured Creditors LOUISIANA-PACIFIC CORP: S&P Rates New $300MM Sr. Unsec. Notes 'BB' LENNY DYKSTRA: Pleads Not Guilty to Bankruptcy Fraud Charges LSP ENERGY: Keeps Sole Chapter 11 Control Through Sept. 7 M WAIKIKI: Wants Additional $6.3MM Loan from Davidson Trust MARIANA RETIREMENT FUND: Has 7-Member Creditors' Committee MARIANA RETIREMENT FUND: Members Complain About Lack of Info MARIANA RETIREMENT FUND: Hiring Brown Rudnick as Lead Counsel MARIANA RETIREMENT FUND: Asks Court to OK Huesman as Local Counsel MARIANA RETIREMENT FUND: Taps Buck as Actuarial Consultants MARKWEST ENERGY: Fitch Says Pending Buy Won't Affect Ratings MARQUIS HOMES: Case Summary & 6 Largest Unsecured Creditors MF GLOBAL: Covington Okayed as Ch. 11 Trustee's Insurance Counsel MF GLOBAL: Claimants Ask SIPA Trustee to Correct Amounts MGM RESORTS: Files Form 10-Q, Incurs $203.3MM Net Loss in Q1 MILACRON HOLDINGS: S&P Hikes Corp. Credit Rating to 'B+' MOMENTIVE SPECIALTY: Files Form 10-Q; Incurs $16MM Net Loss in Q1 MMRGLOBAL INC: Granite to Resell 100 Million Common Shares MMRGLOBAL INC: David Loftus Discloses 10.3% Equity Stake MMRGLOBAL INC: Sherry Hackett Discloses 6.3% Equity Stake MS PARTNERSHIP: Case Summary & 9 Largest Unsecured Creditors NASSAU BROADCASTING: Bankruptcy Court Approves Asset Sale NCI BUILDING: S&P Puts 'B' Corp. Credit Rating on Watch Negative NEBRASKA BOOK: Wants $250,000 Exit Lender Work Fees Approved NEP II: Moody's Assigns 'B2' CFR, Rates 2nd Lien Facility 'Caa1' NEWPAGE CORP: U.S. Trustee Forms 8-Member Creditors Committee NEXSTAR BROADCASTING: Swings to $3 Million Net Income in Q1 NFR ENERGY: S&P Affirms 'B' Corp. Credit Rating; Outlook Negative NORTHCORE TECHNOLOGIES: To Release Q1 Results on May 14 NORTHERN OIL: S&P Gives 'B' Corp. Credit Rating; Outlook Stable OSAGE EXPLORATION: Director L. Ray Resigns for Personal Reasons PENN NAT'L: Moody's Says St. Louis Casino Acquisition Favorable PENN VIRGINIA: S&P Rates New $450-Mil. Senior Unsecured Notes 'B' PETE'S FAMOUS RESTAURANT: Case Summary & Largest Unsec. Creditors POSTMEDIA NETWORK: S&P Revises Outlook to Negative on Performance QUALITY DISTRIBUTION: To Buy Bice and RM Resources for $79.3MM QUALITY DISTRIBUTION: Reports $6.7 Million Net Income in Q1 QUICKSILVER RESOURCES: S&P Lowers Corporate Credit Rating to 'B' RAAM GLOBAL: S&P Affirms 'B-' Corp. Credit Rating; Outlook Neg RE LOANS: Court Extends Exclusive Solicitation Period to June 30 REDDY ICE: Unsecured Creditors Committee Retain Advisors REICHHOLD INDUSTRIES: S&P Raises Corporate Credit Rating to 'B-' REFCO INC: Judge Keeps $80MM Trustee Suit in Bankruptcy Court REGAL ENTERTAINMENT: Swings to $46.30 Million Net Income in Q1 RESIDENTIAL CAPITAL: Ally Board to Meet to Authorize Bankruptcy RPM AUTOWORX: Case Summary & 17 Largest Unsecured Creditors RYLAND GROUP: Files Form 10-Q, Incurs $5.1-Mil. Net Loss in Q1 SALERNO PINCENTE: Case Summary & 20 Largest Unsecured Creditors SALLY HOLDINGS: Share Repurchase No Impact on Moody's 'Ba3' CFR SEAWORLD PARKS: S&P Lowers Sr. Secured Credit Debt Rating to 'BB-' SEQUENOM INC: Steven Cohen Discloses 5.4% Equity Stake SOLO CUP: Moody's Withdraws Ratings After Dart Container Buyout SB PARTNERS: SRE Clearing Owns 36% of Units Outstanding SPRINGLEAF FINANCE: Incurs $47.9-Mil. Net Loss in First Quarter STEREOTAXIS INC: Agrees to Sell 21.7 Million Common Shares STEREOTAXIS INC: Incurs $5.8 Million Net Loss in First Quarter TECHNEST HOLDINGS: Consummates Merger, Now Known as AccelPath TEKNI-PLEX INC: Moody's Upgrades CFR to 'Caa1', Outlook Stable TENET HEALTHCARE: Reports $67 Million Net Income in Q1 TRANSALTA CORPORATION: Moody's Issues Summary Credit Opinion TOWN CENTER: Doral District to Open June 15 Auction TRIBUNE CO: Citadel Seeks Reconsideration From Recovery Ruling TRIBUNE CO: Committee Drops Some Claims in FitzSimons Lawsuit TRIDENT MICROSYSTEMS: Has Until Aug. 1 to Decide on Leases TRIDENT MICROSYSTEMS: Panel Taps Fenwick & West as Tax Counsel TRIDENT MICROSYSTEMS: Sigma Closes Acquisition of DTV Business TRIUS THERAPEUTICS: Incurs $7.6 Million Net Loss in First Quarter TRIUS THERAPEUTICS: Brian Atwood Discloses 8.5% Equity Stake TSO INC: Sands Anderson Replaces DurretteCrump as Counsel TSO INC: Wants Case Converted to Chapter 7 Liquidation TSO INC: Has Accord With PeoplesBank Over Use of $65K Cash TTC PLAZA: Chapter 11 Case Converted to Chapter 7 Liquidation UNIFI INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable UNITED CONTINENTAL: 10-Q Info Designated as Confidential UNITED CONTINENTAL: To Finalize Deal for 100+ Boeing Aircraft UNITED CONTINENTAL: Has Deal With Denver Airport on $100MM Debt UNITED RETAIL: Taps Deborah Paganis as Wind-Down Administrator US POSTAL: Plan to Cut Rural Post Office Hours to Save VELO HOLDINGS: Committee Taps Carl Marks as Financial Advisor VOLKSWAGEN-SPRINGFIELD: Case Summary & Creditors List VITAMINSPICE INC: Jehu Hand Sues Company of Libel VITESSE SEMICONDUCTOR: Incurs $6.2 Million Net Loss in Q1 WESTMORELAND COAL: Lowers Net Loss to $1.5 Million in Q1 WOODCREST COUNTRY CLUB: Files for Chapter 11 in New Jersey WP CAMP: S&P Assigns 'B' Corporate Credit Rating; Outlook Stable WPCS INTERNATIONAL: Sovereign Bank Loan Reduced to $6.5 Million * Moody's Says Not-for-Profit Hospitals Face Credit Challenge * Business Bankruptcy Drop 14% for Year Ended March 31 * McDermott Taps Walsh as Int'l Head of Restructuring Practice * Katten Muchin's D. Pentlow Moves to Herrick Feinstein * BOOK REVIEW: Corporate Venturing -- Creating New Businesses ********* 785 PARTNERS: Judge Approves Amended Bankruptcy Exit Plan --------------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that 785 Partners LLC won a bankruptcy judge's approval on Wednesday for a newly submitted Chapter 11 exit plan under which the firm will put to rest contentious negotiations by handing over a 43-story New York apartment building to First Manhattan Development REIT. Following an hour-long hearing, U.S. Bankruptcy Judge Stuart M. Bernstein confirmed the amended plan, which was filed just Tuesday, after making minor changes, according to Law360. About 785 Partners 785 Partners LLC owns a 43-story building on 785 Eighth Avenue, New York. The developer intended to sell 122 condominium units, but it failed to obtain the requisite condominium approvals from the New York State Attorney General. 785 Partners is owned 98.75% by 8 Avenue and 48th Street Development LLC. The remaining membership interests are held by Esplanade Tower Corporation -- its managing member, the holder of a 1% membership interest, and a wholly-owned subsidiary of 8 Avenue -- and Esplanade 8th Avenue LLC -- holder of a passive 0.25% membership interest. The Company obtained $84 million of secured financing in January 2007 from PB Capital Corporation, and TD Bank, N.A. First Manhattan later bought the secured claim and says the claim has risen to $101 million, which is higher than the market value of the property. 785 Partners filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 11-13702) on Aug. 3, 2011. Sheldon I. Hirshon, Esq., Craig A. Damast, Esq., and Lawrence S. Elbaum, Esq., at Proskauer Rose LLP, in New York, represent the Debtor as counsel. Weitzman Group Inc. serves as real estate and financial consultant. In its schedules, the Debtor disclosed $106 million in assets and $95.5 million in liabilities, all secured. Attorneys for First Manhattan Developments REIT are Silverman Acampora LLP and Schiff Hardin, LLP. On Dec. 14, 2011, the Bankruptcy Court approved the adequacy of the Second Amended Disclosure Statement for the Third Amended Plan of Reorganization filed in the Chapter 11 case of 785 Partners. Terms of the Plan were reported in the Jan. 13, 2012, Nov. 10, 2011, and Oct. 24, 2011 editions of the Troubled Company Reporter. Holders of allowed general unsecured claims will be paid in full, in cash, under the plan. Old membership interests will be canceled and extinguished. 8 Avenue will receive 63.75% of the new membership interests, Tower will receive 1.00%, and Esplanade will receive 0.25%. In March 2012, Judge Bernstein ruled that the 43-story glass-clad condominium building at 785 Eighth Avenue and 48th Street in Manhattan is worth $91.7 million as a rental. The expert for the lender said the building is worth $70.3 million as a rental and $76.4 million as a condominium. The owner's expert testified that the project is worth $103 million as a rental and $93.3 million as a condominium. ALPHA NATURAL: S&P Cuts Corp Credit Rating to 'BB-' on Demand Drop ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings Alpha Natural Resources Inc. "We lowered the corporate credit rating to 'BB-' from 'BB'. The outlook is stable. We also lowered our rating on Alpha's $1.5 billion senior notes due 2019 and 2021 to 'BB-' from 'BB', while maintaining the recovery rating at '3', which indicates our expectation for meaningful (50%-70%) recovery in the event of default. In addition, we lowered our rating on Alpha's 2.375% convertible notes due 2015 to 'B' from 'B+' while maintaining the recovery rating at '6', indicating our expectations for negligible (0%-10%) recovery in the event of default," S&P said. "At the same time, we affirmed the 'BB-' issue-level rating on subsidiary Massey Energy Co.'s 3.25% convertible senior notes due 2015, and revised the recovery rating to '4' from '3', indicating our expectations for average (30%-50%) recovery in the event of a payment default. We removed the Massey issue-level ratings from CreditWatch, where we placed them with positive implications on June 6, 2011, pending the determination of the ultimate capital structure after the expiration of the exercise period of Massey's 3.25% convertible notes," S&P said. "The downgrade reflects our expectation that 2012 EBITDA will decline to about $1 billion, contrasted with our previous expectations of about $1.3 billion, because of a sharp cyclical downturn in domestic coal demand," said Standard & Poor's credit analyst Maurice Austin. "A mild winter and natural gas substitution has hurt the domestic thermal coal market. Demand for metallurgical coal has softened a bit because of increased global supply and a geographically mixed demand picture. As a result, Alpha reduced its 2012 production guidance by 6%-10%. These factors also contribute to our lower EBITDA expectations. As a result, we expect a ratio of debt to EBITDA of about 5x, a level we consider weak for its 'significant' financial risk profile," S&P said. "Our baseline scenario assumes that Alpha's 2012 production declines from our expectations of about 118 million tons to below 110 million tons. Consequently, our expectations for cash costs increases to about $50 per ton from our previous assumptions of about $47 per ton, resulting in EBITDA of about $1 billion. We now estimate debt to EBITDA of about 5x and funds from operations to debt of about 17%, levels more commensurate with the 'BB-' rating," S&P said. "We expect 2013 production to increase to above 115 million tons despite the challenges facing the domestic steam coal market. However, we believe met coal prices will improve as the global economy improves, benefitting from strong global demand and limited supply. Given these assumptions, we expect Alpha's leverage to improve in 2013 but still remain above 4.5x, a level we believe is in line with the 'BB-' rating," S&P said. AMBAC FINANCIAL: Sues BofA & JPMorgan Over MBS Transactions ----------------------------------------------------------- Ambac Financial Group, Inc. initiated separate lawsuits against Bank of America Corp. and J.P. Morgan Chase & Co. in New York over various mortgage-backed securitization transactions. In a lawsuit filed on February 17, AFG accused Bank of New York of breach of contract regarding a mortgaged-backed securitization sponsored by its Merrill Lynch unit, Chris Dolmetsch of Bloomberg News reported. AFG alleged in the complaint that it has made "hundreds of millions of dollars" in claim payments to cover the defaults and has suffered "enormous damages" from the investment, the report relayed. AFG accused Bank of America of alleged fraudulent inducement and breach of contract in the complaint before the New York Supreme Court, Bloomberg said. AFG is seeking punitive and compensatory damages and wants the court to direct the defendants to repurchase the loans, the report relayed. Bloomberg noted that First Franklin was a sub-prime originator acquired in 2006 by Merrill Lynch, which was later acquired by Bank of America in 2008. The case is Ambac Assurance Corp. v. First Franklin Financial Corp., 651217/2012, New York State Supreme Court, New York County. J.P. Morgan Litigation In late March, AFG sued J.P. Morgan and a former Bear Stearns unit over alleged misrepresentations regarding the quality of mortgages backing hundreds of securities it insured, Chad Bray of The Wall Street Journal wrote. AFG alleged in a complaint filed with the New York State Court that it has been forced to pay or is obligated to pay more than $200 million in claims on mortgaged-backed securities issued by Bear Stearns between 2003 and early 2007, the Journal reported. Bear Stearns was acquired by JP Morgan in 2008. "Driven by management's 'Bear don't care' mentality, Bear Stearns perpetrated a massive fraud that deceived investors and financial guarantors, such as Ambac, into believing that the mortgage loans backing its securitizations were originated pursuant to established underwriting guidelines and were therefore of good quality," Ambac wrote in the lawsuit, the Journal relayed. AFG also alleged in the lawsuit that Bear Stearns knew that its representations about its quality control process were false and misleading and that Bear Stearns disregarded "loan quality for loan quantity," the Journal related. The lawsuit noted that transactions at issue have resulted in losses of more than $1.8 billion, the report disclosed. AFG further alleged in the complaint that Bear Stearns did not implement policies recommended by the then-head of its internal due-diligence department to screen out bad loans in 2005 and in 2007, the Journal reported. "The due-diligence process was a charade: touted as rigorous to give comfort to securitization participants like Ambac, but in reality purposefully deficient to ensure an unimpeded flow of loans to the securitizations, regardless of quality," AFG said in the lawsuit, the Journal relayed. On March 14, 2012, Judge Shelley C. Chapman of the U.S. Bankruptcy Court for the Southern District of New York confirmed AFG's Chapter 11 Plan of Reorganization. The Plan's centerpiece is an amended settlement entered among the bond insurer, its operating arm Ambac Assurance Corp., AAC's Segregated Account, the Official Committee of Unsecured Creditors, and the Office of the Commissioner of Insurer for the State of Wisconsin as rehabilitator of the Segregated Account. AFG has also begun to seek approval from government agencies regarding its offer to settle disputes with the Internal Revenue Service over the company's $7.3 billion in net operating losses or NOLs. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMBAC FINANCIAL: Withdraws Suit Over $8.5-Bil. Mortgage Bond Deal ----------------------------------------------------------------- Ambac Financial Group, Inc. is withdrawing its litigation over Bank of America Corp.'s proposed $8.5 billion mortgage bond settlement, according to Bloomberg News, citing a court filing. AFG did not cite a reason for the withdrawal in a May 1, 2012 letter filed with the New York State Supreme Court, the report said. The report noted that AFG intervened in the case joining others who have challenged the settlement or sought more information about it. The settlement, which intends to resolve claims arising from Countrywide Financial mortgage bonds, is awaiting court approval, the report added. The case is In the application of the Bank of New York Mellon, 651786-2011, New York State Supreme Court (Manhattan). In late March, Judge Chapman approved a stipulation for the withdrawal of Claim Nos. 2644, 2824, 2826 and 2838 filed by Bank of America and Countrywide Securities Corp., Countrywide Financial Corp. n/k/a Bank of America Home Loans, and Countrywide Home Loans, Inc. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMBAC FINANCIAL: Delaware High Court Upholds DPRFS Suit Dismissal ----------------------------------------------------------------- The Supreme Court of Delaware affirmed the dismissal of the Police and Fire Retirement System of the City of Detroit's derivative action asserting fiduciary duty claims on behalf of Ambac Financial Group, Inc. against certain of AFG's current and former directors and officers. In February 2008, DPFRS filed a complaint in the Delaware Court of Chancery, alleging that various AFG officers and directors had breached their fiduciary duties to the Company in various respects. The Chancery Action was later stayed in favor of a companion derivative action arising out of similar facts pending in the U.S. District Court for the Southern District of New York. In 2011, AFG sought and obtained approval from the U.S. Bankruptcy Court for the Southern District of New York of a settlement to resolve a related federal securities class action. Under the settlement, the derivative claims in the Court of Chancery and the federal actions would be released, and those actions would be dismissed. Separately, the New York District Court in the federal securities class action approved the settlement. DPFRS has appealed both decisions, which are pending in the U.S. Court of Appeals for the Second Circuit. At AFG's behest, the Court of Chancery dismissed the Derivative Action in December 2011. In dismissing the derivative action, the Vice Chancellor held that "upon the filing of . . . bankruptcy [DPFRS' claims] became Ambac's claims," and as a result DPFRS lost standing to pursue them. The Vice Chancellor further determined that the Bankruptcy Court's order approving the securities class action settlement, which released DPFRS' derivative claims and was affirmed by the New York District Court, was entitled to "full faith and credit . . . [absent] an authoritative decision" to the contrary by a higher federal court. The Delaware Supreme Court thus determined that AFG's bankruptcy filing, by operation of law, divested DPFRS of standing to pursue the Company's claims derivatively, unless and until DPFRS is authorized to do so by the Bankruptcy Court. DPFRS has neither sought nor acquired that authority, the Delaware Supreme Court found. "Accordingly, the judgment of the Court of Chancery dismissing the derivative action was correct and must be upheld," the Delaware Supreme Court concluded. A full-text copy of the ruling decided on May 7, 2012 is accessible for free at http://is.gd/nVj0pD About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Creditors' Service, Inc., publishes Ambac Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMERICA'S SUPPLIERS: Incurs $43,800 Net Loss in First Quarter ------------------------------------------------------------- America's Suppliers, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $43,818 on $3.34 million of net revenues for the three months ended March 31, 2012, compared with a net loss of $126,787 on $3.29 million of net revenues for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $1.65 million in total assets, $1.67 million in total liabilities, all current, and a $23,149 total shareholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/4tN9Y6 About America's Suppliers Scottsdale, Ariz.-based America's Suppliers, Inc., develops software programs that allow the Company to provide general merchandise for resale to businesses through its Web site at http://www.DollarDays.com AMWINS GROUP: S&P Affirms 'B' Counterparty Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' counterparty credit rating on Charlotte, N.C.-based AmWINS Group Inc. and removed it from CreditWatch with developing implications, where S&P placed it on April 18, 2012, following the announced acquisition of AmWINS by New Mountain Capital. The outlook is stable. "At the same time, we assigned our 'B+' debt rating with a '2' recovery rating, indicating our expectation for substantial a (70%-90%) recovery of principal in the event of a default, to AmWINS' proposed first-lien facilities, consisting of a $295 million term loan and $75 million revolver. And we assigned our 'CCC+' debt rating with a '6' recovery rating, indicating our expectation for negligible a (0%-10%) recovery of principal in the event of a default, to AmWINS proposed $350 million second-lien term loan," S&P said. "Our affirmation of the counterparty credit rating reflects our belief that, although the proposed recapitalization under private equity sponsor New Mountain Capital results in meaningfully weaker credit protection measures, the company's business and financial profile will continue to be supportive of the current rating level," said Standard & Poor's credit analyst Julie Herman. "Underpinning this, our rating already incorporated a high likelihood that AmWINS would refinance its debt at somewhat higher levels in light of the approaching maturities under its current capital structure. Further, our better reassessment of the company's profitability provides for additional capacity to support this increased debt and enable gradual delevering." "The proposed transaction, if completed successfully, also qualitatively improves the company's financial profile by extending its 2013 maturities to 2019 and beyond. While AmWINS' balance sheet is more levered as a result, we view favorably the elimination of the nearing refinancing risk that exists under its current capital structure," S&P said. "The counterparty credit rating on AmWINS reflects the company's limited financial flexibility resulting from its highly leveraged capital structure. The company faces earnings volatility due to its susceptibility to underwriting, pricing, and economic cycles. Further, AmWINS faces integration and execution risks in its growth-by-acquisition strategy. Offsetting these negative factors is the company's enhanced competitive position following a series of 28 opportunistic acquisitions since 2002. In addition to its niche expertise in the excess and surplus market, the company differentiates itself from peers through its increasingly diverse revenue base in its specialty underwriting and group benefits divisions," S&P said. "For 2012, we expect that AmWINS will maintain its trajectory of favorable performance, with an overall organic growth rate in the positive low- to mid-single digit area arising from continued market share gains from successful sales strategies as well as improving rate and exposure trends in the company's markets. We believe EBITDA should increase to more than $125 million due to continued core earnings growth, the recent acquisition of THB, and sustained margins of at least 25%. As a result of these performance gains, we also expect AmWINS' credit protection measures to improve modestly by year-end 2012, with a debt-to- last-12-month adjusted EBITDA of less than 7x and EBITDA fixed- charge coverage of 2x or above. The company should also generate healthy positive cash flows from operations, maintain a cushion of unrestricted cash of at least $15 million, and remain comfortably in compliance with its financial covenants," S&P said. "If, at any point during 2012, AmWINS appears to be underperforming relative to our outlined expectations," Ms. Herman continued, "we will consider lowering the ratings. The ratings will particularly come under pressure if underperformance results from financial management that's more aggressive than we expected, loss of market share to competitors, or poor execution regarding management's international expansion strategy. Given the company's highly levered profile following the New Mountain Capital transaction, we don't expect to raise the rating over the next year." ART HORIZONS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Art Horizons, Inc. 483 Hwy 6 West Batesville, MS 38606 Bankruptcy Case No.: 12-24834 Chapter 11 Petition Date: May 8, 2012 Court: United States Bankruptcy Court Western District of Tennessee (Memphis) Judge: George W. Emerson Jr. Debtor's Counsel: Steven N. Douglass, Esq. HARRIS SHELTON HANOVER WALSH, PLLC 2700 One Commerce Square Memphis, TN 38103 Tel: (901) 525-1455 Fax: (901) 526-4084 E-mail: snd@harrisshelton.com Estimated Assets: $500,001 to $1,000,000 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/tnwb12-24834.pdf The petition was signed by Ed Brucker. ASP NEP/NCP: S&P Gives 'B' Corporate Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned Pittsburgh-based ASP NEP/NCP Holdco Inc. (analyzed on a consolidated basis with its operating subsidiary NEP II Inc.) its 'B' corporate credit rating. The rating outlook is stable. "We assigned NEP II Inc.'s new secured first-lien credit facility our 'B' issue-level rating with a recovery rating of '3', indicating our expectation of meaningful (50% to 70%) recovery for lenders in the event of default. The first-lien credit facilities consist of a $60 million revolving credit facility due 2017 and a $460 million first-lien term loan facility due 2019," S&P said. "We assigned NEP II Inc.'s new $160 million senior secured, second-lien term loan due 2019 our 'CCC+' issue-level rating with a recovery rating of '6', indicating our expectation of negligible (0% to 10%) recovery for lenders in the event of default," S&P said. "The corporate credit rating on ASP NEP/NCP Holdco Inc. (NEP) reflects our expectation that NEP's leverage will remain high, given the company's ownership by private-equity investors and its high capital intensity. We view NEP's business risk profile as 'weak' (based on our criteria) given its narrow business focus, high customer concentration, potential volatility over the intermediate term stemming from possible contract gains and losses, and the somewhat unpredictable revenue trends of its Screenworks and Studios units," S&P said. "We view the markets in which NEP operates as relatively mature and expect organic revenue growth over the near term will be relatively flat," said Standard & Poor's credit analyst Tulip Lim. "We regard NEP's financial risk profile as 'highly leveraged' (based on our criteria) because of its high debt burden, high capital expenditures, and likelihood of future acquisitions that will limit future de-leveraging." "Our rating outlook on NEP is stable. We could consider lowering the rating if operating performance weakens, causing NEP's margin of covenant compliance to approach 10%, discretionary cash flow to turn negative, and curtailed revolving credit facility access. This could occur as a result of a loss of a major contract; volatility in the company's Screenworks, Roll to Record, and Studios businesses; and high capital spending or continued acquisition activity that generates weak returns and prevents the company from reducing leverage," S&P said. "Although less likely, we could raise the rating if NEP continues to improve operating results, generates more substantial and sustainable discretionary cash flow, maintains an appropriate cushion of compliance with its bank covenants, reduces leverage below 5x, and demonstrates a commitment to a less aggressive financial policy," S&P said. AUBURN SPORTSPLEX: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Auburn Sportsplex, LLC 5 Saint Marks Street Auburn, MA 01501 Bankruptcy Case No.: 12-41761 Chapter 11 Petition Date: May 8, 2012 Court: United States Bankruptcy Court District of Massachusetts (Worcester) Judge: Melvin S. Hoffman Debtor's Counsel: Darren J. Rillovick, Esq. PORTNOY & GREENE 687 Highland Avenue Needham, MA 02494 Tel: (508) 499-2116 E-mail: drillovick@portnoygreene.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by John Natoli, secretary. AVANTAIR INC: Richard Pytak Quits as Chief Accounting Officer ------------------------------------------------------------- Richard Pytak departed Avantair, Inc., from his position as Chief Accounting Officer, effective May 2, 2012. Mr. Pytak's responsibilities have been reassigned to the Company's Executive Vice President and Chief Financial Officer, Stephen Wagman. About Avantair Inc. Headquartered in Clearwater, Fla., Avantair, Inc. (OTC BB: AAIR) -- http://www.avantair.com/-- sells fractional ownership interests in, and flight hour card usage of, professionally piloted aircraft for personal and business use, and the management of its aircraft fleet. According to AvData, Avantair is the fifth largest company in the North American fractional aircraft industry. Avantair also operates fixed flight based operations (FBO) in Camarillo, California and in Caldwell, New Jersey. Through these FBOs and its headquarters in Clearwater, Florida, Avantair provides aircraft maintenance, concierge and other services to its customers as well as to the Avantair fleet. The Company's balance sheet at Dec. 31, 2011, showed $108.23 million in total assets, $140.46 million in total liabilities, $14.75 million in series A convertible preferred stock, and a $46.98 million total stockholders' deficit. The Company reported a net loss of $2.57 million on $76.58 million of total revenue for the six months ended Dec. 31, 2011, compared with a net loss of $8.88 million on $72.36 million of revenue for the same period a year ago. BARNEYS NEW YORK: Moody's Affirms 'Caa3' CFR After Restructuring ---------------------------------------------------------------- Moody's Investors Service has changed Barneys New York, Inc.'s Probability of Default Rating (PDR) to D from Caa3 following the restructuring of the company's debt and affirmed its Caa3 Corporate Family Rating. The outlook remains negative. Moody's expects to withdraw all ratings for the company in the near term. Ratings Rationale The downgrade of the PDR to D follows the company's recapitalization, which Moody's classifies as a "default" event, consistent with the "D" Probability of Default Rating. Barneys retired an aggregate of $590 million in principal amount of its senior secured term loan and the PIK mezzanine notes under its prior capital structure in exchange for $50 million in principal amount of newly issued debt and equity. The principal methodology used in rating Barneys New York, Inc was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Barneys New York, Inc. is a luxury retailer of apparel and accessories for men, women, and children, operating about 40 stores in the United States. Revenues for the last twelve months through October 29, 2011 were $735 million. BARNEYS NEW YORK: S&P Raises Corporate Credit Rating to 'B-' ------------------------------------------------------------ Standard & Poor's Ratings Services related in a May 9, 2012 press release that it raised the corporate credit rating on New York City-based Barneys New York Inc. to 'B-' from 'SD'. "At the same time, we withdrew the 'D' issue-level rating and '5' recovery rating on the company's second-lien debt, which was subject to the debt-for-equity exchange. The upgrade reflects the substantial reduction of debt as a result of the company's debt-for-equity swap. The outlook is stable," S&P said. Earlier, in a May 8, 2012 press release, S&P lowered its corporate credit rating on Barneys New York to 'SD' from 'CC'. In the same release, S&P lowered the issue-level rating on the company's second-lien debt to 'D' from 'CC'. The ratings agency maintained its our '5' recovery rating on the debt, indicating its expectation of modest (10%-30%) recovery in the event of default. S&P's credit analyst David Kuntz said the 'SD' rating reflected its view that the executed debt for equity swap is tantamount to a default, given the previously distressed financial condition of the company, and since the investors received less than the original promise of the original security. In S&P's its recent May 9 press release, Mr. Kuntz said, "Despite the recently completed deleveraging transaction, we continue to assess Barneys New York Inc.'s financial risk profile as 'highly leveraged' under our criteria because of its substantially leveraged capital structure and very thin cash flow protection measures." "Pro forma for the debt-for-equity swap, we estimate that leverage and interest coverage were about 8.7x and 1.3x, respectively, as of Jan. 31, 2012," S&P said. "The stable outlook reflects our view that the company is likely to benefit from positive trends in the luxury retail segment. Although we expect some improvement in the company's credit protection metrics, we believe the company will remain 'highly leveraged.' Although unlikely, we could raise the rating if further performance gains result in leverage in the mid-5x. We could lower the rating if merchandise missteps or operational difficulties result in a reduction of interest coverage meaningfully below 1x or if the company's liquidity position erodes substantially," S&P said. S&P Withdraws 'B-' CCR Also on May 9, Standard & Poor's Ratings Services withdrew its 'B-' corporate credit rating on New York City-based luxury retailer Barneys New York Inc. This action was taken at the request of the company. "We estimate that there is less than $175 million of debt outstanding," S&P said. BETSEY JOHNSON: Fails to Attract Going Concern Buyer; To Shut Down ------------------------------------------------------------------ The Wall Street Journal's Katy Stech reports Betsey Johnson LLC executives got approval from a bankruptcy judge Thursday morning to begin liquidation after the retail chain failed to attract going concern bidders. The Company will close its 69 stores. Liquidators Gordon Brothers Group Inc. and Hilco Merchant Resources offered the top bid for the right to run the chain's going-out-of-business sales. WSJ notes that bid will bring the chain about $5.2 million immediately, and more money could trickle in to pay off its debts if the liquidation effort brings in more money than expected. The company owes at least $6.8 million to creditors. According to WSJ, it isn't clear whether a handful of stores will outlast the liquidation. Steven Madden Ltd., which owns the Betsey Johnson license, is expected to keep a handful of stores in shopping destinations like New York. Madden will continue to sell Betsey Johnson-branded clothing through department stores. About Betsey Johnson New York-based women's fashion retailer Betsey Johnson LLC filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 12-11732) on April 26, 2012, to effectuate a sale of its assets. Formed as B.J. Vines by its namesake, iconic fashion designer Betsey Johnson in 1978, the Debtor sells clothing, footwear, handbags and a signature fragrance through 63 Betsey Johnson retail stores and outlets in the U.S. The Company, which has 400 employees, also sells its products in department and specialty stores worldwide, including Macy's and Lord & Taylor, and online at http://www.betseyjohnson.com/ Non-debtor subsidiaries operate five stores in Canada and one store in England. In 2010, Steven Madden Ltd. a footwear designer and marketer, swapped US$27.4 million of secured debt for ownership of Betsey Johnson's trademarks and intellectual property. The deal satisfied all outstanding debt under a US$50 million term loan used to finance the business' acquisition by Castanea Partners. At the same time, Castanea, the company's majority owner, made a new capital investment of US$3 million as part of the deal with Madden. Betsey Johnson estimated assets and debts of US$10 million to US$50 million as of the Chapter 11 filing. Judge James Peck oversees the case. The Debtor has tapped the law firm of Goulston & Storrs, as counsel; Togut, Segal & Segal, LLP, as co-counsel; Richter Consulting, Inc., as financial advisor, and Donlin Recano & Company as claims and notice agent. The petition was signed by Jonathan Friedman, chief financial officer. Hilco Merchant Resources, LLC, is represented by Chris L. Dickerson, Esq., at DLA Piper LLP (US). Counsel for Steven Madden, Ltd., is Neil Herman, Esq., at Morgan, Lewis & Bockius LLP. Counsel for First Niagara Commercial Finance, Inc., the DIP Lender, is James C. Fox, Esq., at Ruberto, Israel & Weiner. BILL BARRETT: S&P Affirms 'BB-' Corp. Credit Rating; Outlook Neg ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Denver- based Bill Barrett Corp. (BBG) to negative from stable. "We affirmed the 'BB-' corporate credit rating," S&P said. "The outlook revision follows our recent reduction of our natural gas price assumptions through 2014 and BBG's weakened cash flows and profitability. Natural gas constituted over 90% of BBG's production in 2011 (although about 30% was sold as higher priced natural gas liquids [NGLs])," said Standard & Poor's credit analyst Carin Dehne-Kiley. "Although the company is focusing on increasing its oil and NGL volumes, the shift to liquids production takes time and requires substantial capital outlays. Falling natural gas prices have weakened the company's credit measures during its transition to higher liquids production," S&P said. "The negative outlook reflects our view that the company's credit measures will deteriorate over the next 12 months, due to weak natural gas prices, the company's limited scale and diversity, and relatively high capital spending (on oil/NGL projects)," S&P said. "We could lower our rating if credit measures worsen materially relative to our current expectations, due to the company incurring debt to finance capital expenditures or acquisitions, or if liquids production does not ramp up as we expect. We would consider a downgrade if debt to EBITDAX exceeds 4x for a sustained period, without a clear path to improvement. For this target to be breached in 2012, EBITDAX would have to fall more than 7% from our current estimate," S&P said. BILL PLISE: Has $506MM in Debts Against $4,700 in Assets -------------------------------------------------------- Steve Green at Las Vegas Sun reports that Las Vegas developer Bill Plise has revealed in Bankruptcy Court that he owes $506.5 million in debt, while his assets are valued at just $4,738. The report notes creditors are likely to look into Mr. Plise's finances and some of their attorneys have already signed in with the court to signal their participation. According to the report, Mr. Plise is involved in a dozen lawsuits already, most over defaulted loans. And even though he's unemployed, his monthly living expenses totaling $4,305 are being covered by a credit facility with an entity called 5550 Las Vegas LLC. Much of Mr. Plise's debt relates to his role as a guarantor to loans for City Crossing and other developments. Key creditors in his bankruptcy filing include three failed Nevada banks or their successors: Community Bank of Nevada, First National Bank of Nevada and Silver State Bank. The report adds other creditors include Bank of America, U.S. Bank, Wells Fargo Bank, Clayton Mortgage & Investment, Aspen Financial Services, Eliot A. Alper Trust, City National Bank, Bank of George and Bank of Nevada. Bill Plise filed for personal Chapter 7 bankruptcy protection on April 23. Mr. Plise is known for developing projects such as Centennial Corporate Center and the Rainbow Sunset Pavilion mixed- used center. BOWLES SUB: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Bowles Sub Parcel A, LLC 275 Market Street, Suite 439 Minneapolis, MN 55402 Bankruptcy Case No.: 12-42765 Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- Fenton Sub Parcel A, LLC 12-42768 Bowles Sub Parcel B, LLC 12-42769 Fenton Sub Parcel B, LLC 12-42770 Bowles Sub Parcel C, LLC 12-42772 Fenton Sub Parcel C, LLC 12-42774 Chapter 11 Petition Date: May 8, 2012 Court: U.S. Bankruptcy Court District of Minnesota (Minneapolis) Judge: Gregory F. Kishel About the Debtors: In 2007, StoneArch II/WCSE Minneapolis Industrial LLC acquired various LLCs, which in turn owned 27 industrial multi-tenant properties located in the Twin Cities. The properties were divided into four separate pools: A, B, C, and D. Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC, which jointly own the properties in pool D previously sought Chapter 11 protection (Bankr. D. Minn. Case Nos. 11-44430 and 11-44434) on June 29, 2011. The May 8 debtors jointly own parcels A, B and C. Debtors' Counsel: Ralph Mitchell, Esq. LAPP LIBRA THOMSON STOEBNER & PUSCH One Financial Plaza, Suite 2500 120 S. 6th Street Minneapolis, MN 55402 Tel: (612) 338-5815 E-mail: rmitchell@lapplibra.com Bowles Sub Parcel A's Estimated Assets: $10,000,001 to $50,000,000 Bowles Sub Parcel A's Estimated Debts: $1,000,001 to $10,000,000 The petitions were signed by Steven B. Hoyt, chief manager. Affiliates that previously filed separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Bowles Sub Parcel D, LLC 11-44434 06/29/11 Fenton Sub Parcel D, LLC 11-44430 06/29/11 Steven Bruce Hoyt 11-43816 05/31/11 Bowles Sub Parcel A's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Steven B. Hoyt Money Advanced to $642,022 275 Market Street, Suite 439 Debtor Minneapolis, MN 55405 Water Heater Innovations Security Deposit $20,000 3107 Sibley Memorial Highway Eagan, MN 55121 Viking Magazine Service Security Deposit $11,483 1503 East Highway 13 Burnsville, MN 55337 M.G. Kruse, LLC Security Deposit $10,000 International Office Technology Security Deposit $7,955 Pase Group, Inc. Security Deposit $7,042 RHMM Security Deposit $6,134 Curbside Lawn Care Services $3,411 May Distributing, Inc. Security Deposit $3,084 On-Belay of Minnesota, Inc. Security Deposit $2,885 Michael Walsh Tenant $2,554 Drs. Franjs, Schlet & Lucht Security Deposit $2,216 Amerimark Security Deposit $2,050 Plaza Dental Security Deposit $2,007 Eastco, Inc. Security Deposit $1,980 Cental Business Jets Security Deposit $1,760 Boost Learning Enrichment Pro Security Deposit $1,300 Ellison & Associates Security Deposit $1,022 Gary D. Orris Security Deposit $980 United Operations, Inc. Services $98 CAESARS ENTERTAINMENT: To Sell St. Louis for $610 Million --------------------------------------------------------- Caesars Entertainment Corporation has signed a definitive agreement to sell Harrah's St. Louis to Penn National Gaming, Inc., for $610 million in cash. The transaction is expected to close in the second half of 2012, subject to regulatory approvals. "Harrah's St. Louis is a quality property with a talented team. We are grateful to our colleagues in St. Louis for their commitment to providing excellent service to our customers. The sale of this property exemplifies our strategy to maximize returns from our mix of assets through investments in new markets as well as occasional divestitures," said Gary Loveman, chairman, president and chief executive officer of Caesars Entertainment. "We are committed to expanding our distribution network into growth markets that have the potential for high returns." The property will continue to operate as Harrah's St. Louis until the transaction is closed. Deutsche Bank Securities, Inc., served as financial advisor to Caesars Entertainment on this transaction. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. --http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. The Company reported a net loss of $666.70 million in 2011, and a net loss of $823.30 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $28.51 billion in total assets, $27.46 billion in total liabilities, and $1.05 billion in total stockholders' equity. * * * As reported by the TCR on March 28, 2012, Moody's Investors Service upgraded Caesars Entertainment Corp's Corporate Family Rating (CFR) and Probability of Default Rating both to Caa1 from Caa2. The upgrade of Caesars' ratings reflects very good liquidity, an improving operating outlook for gaming in a number of the company's largest markets that is expected to drive earnings growth, the completion of a bank amendment that resulted in the extension of debt maturities to 2018 from 2015, and the public listing of the company's equity that increases financial flexibility by providing it with another potential source of capital. The upgrade of the SGL rating reflects minimal debt maturities over the next few years, significant cash balances (approximately $900 million at December 31, 2011) and revolver availability that will be more than sufficient to fund the company's cash interest and capital spending needs. CAESARS ENTERTAINMENT: Fitch Junks LT Issuer Default Rating ----------------------------------------------------------- Caesars Entertainment Corp.'s announced $610 million sale of Harrah's St. Louis to Penn National Gaming will improve Caesars' liquidity profile, a development that Fitch Ratings views as a credit positive to Caesars' ratings. The sale is expected to close during second-half 2012. The proceeds can help fund the sizable free cash flow (FCF) drain at Caesars Entertainment Operating Company, Inc (CEOC; OpCo) in 2012 and 2013. Additionally, it will allow Caesars to more aggressively reinvest capital into its existing properties or pursue higher return investments. Alternatively, Caesars can repurchase debt. The liquidity benefit outweighs the following concerns: -- the loss of Harrah's St. Louis's EBITDA (just under $80 million per Penn's disclosed sale multiple of 7.75x), which will immediately have a negative impact on OpCo's FCF; -- the increase in OpCo's overall gross leverage by about 0.3x to 13.1x if proceeds are used to paydown debt and by 0.7x to 13.5x if proceeds are retained. However, net leverage through the senior secured debt will be reduced slightly as long as cash remains on the balance sheet or Caesars uses proceeds to retire first lien debt. The latter point is important since Caesars' main maintenance covenant is based on net senior secured leverage. Covenant Restrictions with Respect to the Proceeds: CEOC's credit agreement and first-lien indentures permit Caesars to spend asset sale proceeds on capital expenditures within 15 months of receipt. Caesars is also permitted to pay down the term loans maturing 2015 or repurchase/call first lien notes (11.25% notes are callable at 105.625 starting June 2013). A covenant in the June 2009 credit agreement amendment limits first lien note repurchases to roughly $210 million. Fitch believes reinvestment of proceeds in Caesars' business is the more likely scenario. In terms of FCF, the sale would be somewhat analogous to a debt issuance at roughly 12%, given the $80 million of EBITDA less roughly $5-$7 million of annual maintenance capex at the property, relative to the $610 million sales proceeds. The 2015 term loans can be addressed much more cost effectively through first lien note issuance (current yield on the first line notes is around 8.5%). Additionally, the 11.25% notes do not mature until 2017. FCF Impact: Proforma for the transaction, Fitch expects OpCo's FCF to be roughly negative $500 million in 2012 and negative $400 million in 2013. This assumes the sale proceeds are not used to repurchase or retire debt and does not count Project Linq spending, which was largely pre-funded with an earlier financing. Fitch's base case incorporates negative FCF for several years, although it is reduced to more manageable levels (deficits of $50 million -$100 million) by 2015-2016. Fitch has cited asset quality deterioration as a concern for Caesars' ratings. While the transaction reduces FCF by as much as $75 million (less if proceeds are used to retire debt), Fitch has greater confidence in Caesars' ability to reinvest in its properties and remain competitive in key markets in the near term. More importantly, the liquidity injection provides the OpCo with additional time to get to FCF positive. Fitch believes this is attainable within a four-to-six year timeframe (most likely after the 2015 maturity wall). The OpCo swap agreements mature in January 2015 and have an estimated $150 million - $165 million drag on the FCF in the interim. Rating Guidance: Fitch does not have '+/-' indicators at the CCC rating level (Caesars' and OpCo's IDRs are at 'CCC') so the next move up would be to 'B-'. While Fitch is more positive about Caesars' probability of default following this transaction, credit quality remains too weak for Fitch to consider an upgrade to 'B-' or Outlook revision to Positive at this time. Factors that may precipitate an Outlook revision to Positive may include: -- Fitch gaining greater confidence in OpCo's path to being FCF positive; -- OpCo's ability to access capital markets beyond the first- lien; -- a refinancing or amendment of the CMBS debt at favorable terms; -- continued strength in the Las Vegas market and better than expected performance in weaker markets, such as Atlantic City; -- legalization of online gaming; and -- a sizable equity issuance(s). A Positive Outlook would indicate that there is a strong possibility of an upgrade within a one-to-two year timeframe. Since Caesars' is now public, there is a chance that the company may attempt to execute debt-for-equity exchanges. This scenario could be considered an event of default, depending on the terms and circumstances, per Fitch's distressed debt exchange criteria. Caesars' long-term ratings are as follows: Caesars Entertainment Corp. -- Long-term IDR 'CCC'. Caesars Entertainment Operating Co. -- Long-term IDR 'CCC'; -- Senior secured first-lien revolving credit facility and term loans 'B/RR2'; -- Senior secured first-lien notes 'B/RR2'; -- Senior secured second-lien notes 'C/RR6'; -- Senior unsecured notes with subsidiary guarantees 'C/RR6'; -- Senior unsecured notes without subsidiary guarantees 'C/RR6'. Chester Downs and Marina LLC (and Chester Downs Finance Corp as co-issuer) -- Long-term IDR 'B-'; -- Senior secured notes 'BB-/RR1'. Caesars Linq, LLC & Caesars Octavius, LLC -- Long-term IDR 'CCC'; -- Senior secured credit facility 'B-/RR3'. CAGLE'S INC: Suspending Filing of Reports with SEC -------------------------------------------------- Cagle's, Inc., filed a Form 15 with the U.S. Securities and Exchange Commission notifying of its suspension of its duty under Section 15(d) to file reports required by Section 13(a) of the Securities Exchange Act of 1934 with respect to its Class A common stock. Pursuant to Rule 12g-4, the Company is suspending reporting because there are currently less than 500 holders of record of the Class common shares. There were only 110 holders of the Class A common shares as of May 8, 2012. About Cagle's Cagle's Farms (NYSE: CGL.A) -- http://www.cagles.net/-- engages in the production, marketing, and distribution of fresh and frozen poultry products in the United States. Cagle's Inc. and its wholly owned subsidiary Cagle's Farms filed on Oct. 19, 2011, voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 11-80202 and 11-80203). Paul K. Ferdinands, Esq., at King & Spalding, in Atlanta, Georgia, serves as counsel. FTI Consulting, Inc., serves as the Debtors' financial advisors. Kurtzman Carson LLC serves as their claims, noticing, and balloting agent. In its schedules, Cagle's Inc. disclosed $81,998,077 in assets and $55,304,599 in liabilities as of the Petition Date. The Official Committee of Unsecured Creditors is represented by McKenna Long & Aldridge LLP and Lowenstein Sandler as counsel. J.H. Cohn LLP serves as its financial advisors. No trustee or examiner has been appointed in the Debtors' bankruptcy cases. CAPITOL INFRASTRUCTURE: DirecTV Denies Blame for Chapter 11 ----------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that satellite cable provider DirecTV on Wednesday denied that its termination of a contract with Capitol Infrastructure LLC had pushed the company into bankruptcy, blasting the debtors' bid to quickly shut down much of their operations. 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. CDC CORP: China.com Wants Order Denying Case Dismissal Reviewed --------------------------------------------------------------- Party-in-interest China.com, Inc., is appealing the U.S. Bankruptcy Court for the Northern District of Georgia's order denying China.com's motion to dismiss CDC Corporation's Chapter 11 case. China.com filed with the bankruptcy court a motion for leave to appeal and its emergency motion for (i) expedited appeal, and, if necessary (ii) a limited stay pending appeal. As reported in the Troubled Company Reporter on May 4, 2012, the bankruptcy judge denied the dismissal motion on May 1, opening the door to another hearing May 22 for approval of a disclosure statement explaining the reorganization plan. China.com asserted that the Bankruptcy Court lacks subject matter jurisdiction in this case to hear and finally determine the "remaining shareholder disputes". Furthermore, China.com submits that "cause" exists under 11 U.S.C. 1112(b) to dismiss the Debtor's bankruptcy case because no bankruptcy purpose will be served by continuing the case and out of deference to Cayman Islands law. CDC Corp. and the official equity committee opposed the dismissal. CDC Corp. will seek approval of the disclosure statement explaining its Chapter 11 plan on May 22. In addition to paying creditors in full and distributing the excess to shareholders, the plan would allow filing lawsuits against insiders who CDC claims were behind the motion to dismiss. China.com filed a competing reorganization plan. CDC interprets the plan as giving releases of claims that CDC's plan would prosecute instead. About CDC Corp. Based in Atlanta, CDC Corp. (Nasdaq: CHINA) -- http://www.cdccorporation.net/-- is the parent company of CDC Software (Nasdaq: CDCS). CDC Software is based dually in Shanghai, China, and Atlanta and produces enterprise software applications, IT consulting services, outsourced applications development and IT staffing. The company's owners include Asia Pacific Online Ltd., Xinhua News Agency and Evolution Capital Management. CDC Corp., doing business as Chinadotcom, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011. James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA, in Atlanta, Georgia, serves as counsel. Moelis & Company LLC serves as its financial advisor and investment banker. Marcus A. Watson at Finley Colmer and Company serves as chief restructuring officer. The Debtor estimated assets and debts at US$100 million to US$500 million as of the Chapter 11 filing. The Official Committee of Equity Security Holders of CDC Corp. is represented by Troutman Sanders. The Committee tapped Morgan Joseph TriArtisan LLC as its financial advisor. The stock of CDC Software Corp. was sold for $249.8 million to an affiliate of Vista Equity Holdings. The Debtor's Plan provides that in addition to paying creditors in full and distributing the excess to shareholders, the plan would allow filing lawsuits against insiders who CDC claims were behind the motion to dismiss. China.com filed a competing reorganization plan. CDC interprets the plan as giving releases of claims that CDC's plan would prosecute instead. CENTURION PROPERTIES: Access to GECC's Cash OK'd Until June 30 -------------------------------------------------------------- Centurion Properties III, LLC, asks the U.S. Bankruptcy Court for the Eastern District of Washington to approve a seventh stipulated order authorizing continued access to General Electric capital Corporation's cash collateral until June 30, 2012. As reported by the Troubled Company Reporter on Jan. 19, 2012, the Debtor will use the cash collateral to administer the estate, meet contractual obligations, and meet payments of creditors associated with post-confirmation operations. As adequate protection from any diminution in value of the lender's collateral, the Debtor will grant first priority perfected security interest in and lien upon the Money Marcket Account, all of the Debtor's rights in the funds therein, and any interest earned thereon. The Debtor will timely pay any and all payments required by the terms of the GECC Settlement agreement and the loan modification agreement, including without limitation, the payment of $330,000. CPIII will submit its budget for the next budget period which will commence on July 1 by June 15, and a hearing for approval thereof will be held on or before June 30. About Centurion Properties Kennewick, Washington-based Centurion Properties III, LLC, was established in 2006 for the sole purpose of acquiring real estate project Battelle Leaseholds located in Richland, Washington. Its sole asset is its leasehold interests in the Battelle Memorial Institute Campus and improvements, valued in excess of $90 million. CPIII filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wash. Case No. 10-04024) on July 9, 2010. John D. Munding, Esq., at Crumb & Munding, assists the Company in its restructuring effort. Dan. E. Gorczycki of Savills LLC serves as its finance advisor. The Company disclosed $98.9 million in assets and $115.3 million in liabilities. The Plan is premised upon CPIII's ability to obtain replacement financing for its secured debt obligations within a fixed period of time. General unsecured claims will be paid in full, with interest at 5% from the Effective Date, within 26 months of the initial distribution date and after all secured claims paid in full. The United States Trustee was unable to appoint an official committee of unsecured creditors. CENTURION PROPERTIES: Wants to Use Cash to Pay Sigma Expenses ------------------------------------------------------------- Centurion Properties III, LLC asks the U.S. Bankruptcy Court for the Eastern District of Washington for authorization to use the cash collateral to pay administrative expenses by Sigma Management, Inc., postpetition and post-confirmation in the amounts of $132,599, and 18,737, respectively. In addition, the Debtor proposes to reimburse Sigma $26,219 for appraisal fees. Sigma is the property manager for CPIII, and Sigma continues to handle the day to day management activities for the Battelle Property pursuant to a management agreement with CPIII. Under the management agreement, CPIII's tenant pays Sigma's fees and costs for providing certain identified property management services related to the Batelle Property. However, the tenant does not pay or reimburse Sigma for any services that fall outside the scope of the management agreement. A full-text copy of the motion is available for free at http://bankrupt.com/misc/CENTURIONPROPERTIES_cashcoll.pdf About Centurion Properties Kennewick, Washington-based Centurion Properties III, LLC, was established in 2006 for the sole purpose of acquiring real estate project Battelle Leaseholds located in Richland, Washington. Its sole asset is its leasehold interests in the Battelle Memorial Institute Campus and improvements, valued in excess of $90 million. CPIII filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wash. Case No. 10-04024) on July 9, 2010. John D. Munding, Esq., at Crumb & Munding, assists the Company in its restructuring effort. Dan. E. Gorczycki of Savills LLC serves as its finance advisor. The Company disclosed $98,907,255 in assets and $115,334,775 in liabilities. The Plan is premised upon CPIII's ability to obtain replacement financing for its secured debt obligations within a fixed period of time. General unsecured claims will be paid in full, with interest at 5% from the Effective Date, within 26 months of the Initial Distribution Date and after all secured claims paid in full. The United States Trustee was unable to appoint a creditors committee in the case. CHARLIE McGLAMRY: Files for Chapter 11 With 14 Companies -------------------------------------------------------- Centerville, Georgia-based real estate developer Charlie N. McGlamry filed a petition for Chapter 11 protection, along with his 14 companies, in Macon, Georgia on May 9, 2012. Over the past 44 years, Mr. McGlamry has managed to successfully develop numerous real estate developments in and around Houston County, Georgia. Mr. McGlamry continues to operate his real estate development business through sole proprietorship McGlamry Properties -- http://www.mcglamryproperties.com-- and USA Land Development Inc. Mr. McGlamry individually owns, through his sole proprietorship, approximately, 74 acres of undeveloped commercial property at the intersection of Russell Parkway and Corder Road in Houston County, Georgia. Mr. McGlamry established a number of single member limited liability companies and sole shareholder corporations to own and develop specific tracts of land. Mr. McClamry and his affiliated companies have sought joint administration of their Chapter 11 cases and have Mr. McGlamry's as the lead case (Bankr. M.D. Ga. Case No. 12-51197). The Debtors have filed applications to employ Cohen Pollock Merlin & Small, PC, as bankruptcy counsel. The Debtors are also seeking permission to maintain their existing bank accounts and honor certain prepetition obligations. Bank accounts are being kept by Mr. McGlamry and USA Land in SunMark Bank. USA Land is the entity Mr. McGlamry uses for the development of real estate. The Debtors have sought an expedited hearing on the first-day motions. A hearing is scheduled for May 11, 2012 at 10:00 a.m. Judge James P. Smith has been assigned to the case. Mr. McGlamry estimated up to $50 million in assets and up to $100 million in liabilities in his Chapter 11 filing. The Debtor's three largest bank creditors and their claims are Synovus Bank ($35.1 million), Wells Fargo Commercial Mortgage Servicing ($18.2 million), and KeyBank Real Estate Capital ($15.9 million). According to the case docket, schedules of assets and liabilities and the statements of financial affairs are due May 23, 2012. The Chapter 11 plan and disclosure statement are due Sept. 6, 2012. The Debtors did not disclose the basis for the Chapter 11 filing in court documents filed on the Petition Date. Assets Owned by McGlamry's Companies Mr. McGlamry, as sole shareholder or member, has signed Chapter 11 petitions for these companies: * USA Land Development (Case No. 12-51198) -- platted, unplatted and partially developed lots in the Georgian Mill subdivision at "The Woodlands of Houston" located north of Highway 127 between Moody Road and Old Perry Road in Houston County, Georgia. * Barrington Hall Development Corp. (12-51199) -- 500 acres of land for the future phases of "The Woodlands of Houston" subdivision in Houston County, Georgia. * Bear Branch, LLC (12-51200) -- undeveloped land off Langston Road and east of Highway 41 in Houston County, Georgia. * By-Pass/Courthouse, LLC (12-51201) -- commercial and residential undeveloped land off the Perry Bypass and Kings Chapel Road in Houston County, Georgia. * Chinaberry Place, LLC (12-51202) -- 177 acres of undeveloped land at the end of Hill Road south of Highway 341 in Houston County, Georgia. * Eagle Springs, LLC (12-51203) -- 51 acres of commercial properties at the intersections of Gunn Road and Houston Lake Road, and Gunn Road and Hwy 41 in Houston County, Georgia. * Elmdale Development, LLC (12-51204) -- 119 acres of undeveloped land located south of Highway 96 near Cartwright Drive in Houston County, Georgia. * Gurr/Kings Chapel Road, LLC (12-51205) -- 110 acres of land located at the southeast corner at Kings Chapel Road and Gurr Road in Houston County, Georgia. * Jaros Development, LLC (12-51206) -- developed and undeveloped land in the Carlton Ridge South and The Terraces subdivisions located south of Feagin Mill Road near Highway 41 in Houston County, Georgia. * Lake Joy Development, LLC (12-51207) -- platted lots and undeveloped land for the future phases of "The Tiffany" subdivision located south of Feagin Mill Road between Highway 41 and Lake Joy Road in Houston County, Georgia. * Old Hawkinsville Road, LLC (12-51208) -- (x) platted, unplatted and partially developed lots in The Cottages and Charlestown subdivisions located south of Sandy Run Road between Highway 247 and Old Hawkinsville Road in Houston County, Georgia, and (y) 86 acres of future development property for the extension of The Cottages and Charlestown subdivisions. * South Houston Development, LLC (12-51209) -- undeveloped property located west of Houston Lake Road and Thistlewood subdivision in Houston County, Georgia. * The Villages at Nunn Farms, LLC (12-51210) -- 600 acres of agricultural property located at Highway 341, Arena Road, and Highway 247 in Houston County, Georgia. * Houston-Peach Investments, LLC (12-51212) -- 337 acres of farm land on ighway 49 in Peach County, Georgia. CHESAPEAKE ENERGY: Moody's Affirms 'Ba2' CFR, Outlook Negative -------------------------------------------------------------- Moody's Investors Service changed the rating outlook for Chesapeake Energy Corporation to negative from stable. Moody's also changed to negative from stable the rating outlooks for Chesapeake Midstream Partners, L.P. (CHKM) and Chesapeake Oilfield Operating, L.L.C. (COO). Chesapeake's, CHKM's and COO's Ba2 Corporate Family Ratings (CFR) and Ba3 senior unsecured ratings were affirmed. Chesapeake's Speculative Grade Liquidity Rating remains SGL-3. These rating actions follow Chesapeake's reported first quarter results that point to an even larger capital spending funding gap for 2012 caused primarily by lower natural gas prices but also by increased spending. Ratings Rationale "The negative outlook reflects the escalating execution risk of Chesapeake's plan for funding its large capital spending budget, rising leverage metrics and accompanying liquidity concerns," commented Pete Speer, Moody's Vice President. "The company's already diminished cash flows are vulnerable to further declines in natural gas prices and it remains dependent on completing asset sales and other financing transactions with third parties to maintain adequate liquidity and fund its transition towards higher liquids production." The recent disclosures related to the chief executive officer's personal financing transactions to fund his participation in the Founder Well Participation Program have raised conflict of interest questions and reflect poorly on Chesapeake's corporate governance. These issues further confirm Moody's existing views regarding the CEO's dominant role at Chesapeake and his strong influence on the company's risk appetite and growth objectives. This influence is reflected in the company's aggressive financial policies and complicated structure which are incorporated into Moody's ratings. However, if the resulting SEC inquiry, shareholder litigation or the audit committee's review of the CEO's personal financing transactions raises additional issues or adversely effects the company's execution of its funding strategy then there could be negative ratings implications. Chesapeake's latest guidance is for capital spending to exceed operating cash flow in 2012 by around $10.5 billion, up from $8 billion in its February guidance. This funding gap could continue to rise if natural gas prices decline further, lowering the company's earnings and increasing its compliance risk with its bank credit facility debt covenants in the second half of 2012. Year to date Chesapeake has raised nearly $4 billion through a bond offering and planned monetization transactions. Moody's views volumetric production payments (VPP) and the recent subsidiary preferred stock transactions as debt and therefore the company's debt (reflecting Moody's adjustments) has increased to approximately $23.6 billion at March 31, 2012 from $19.2 billion at the beginning of the year. Consequently, Debt/proved developed (PD) reserves and Debt/average daily production have increased to around $12.30/boe and $35,700/boe, respectively, at March 31, 2012. "We are also concerned that the company's leverage metrics could remain elevated or continue to increase," said Mr. Speer. In order for Chesapeake to reverse this rise in leverage metrics and maintain adequate compliance headroom with its credit facility covenants it must execute its plan to meet most of its remaining funding needs through asset sales, reduce its reported debt and continue to grow its production volumes. If the company has to instead rely more heavily on debt funding then its leverage metrics could remain at levels inconsistent with its current ratings. The affirmation of Chesapeake's Ba2 CFR is supported by its very large proved reserve and production scale, big acreage positions in multiple basins across the US, low operating costs and successful execution through the drillbit. The company is among the largest independent exploration and production companies rated by Moody's, with reserve and production scale comparable much higher rated investment grade E&Ps. Chesapeake has acreage positions in many oil and wet gas plays that are very attractive to both peers and financial investors and a strong track record of completing its planned monetization transactions. Liquidity issues or further increases in leverage metrics could result in Chesapeake's ratings being downgraded. Debt/average daily production and Debt/PD reserves sustained above $35,000/boe and $12/boe and RCF/Debt below 20% could result in a ratings downgrade. The outlook could return to stable if the company completes its planned asset sales, reduces its leverage metrics and improves its liquidity. In order for the ratings to be upgraded Chesapeake's leverage metrics have to decline significantly and its liquidity will have to substantially improve and be less reliant on monetization transactions. Debt/average daily production, Debt/PD, and Retained Cash Flow (RCF)/Debt approaching $25,000/boe, $9/boe and 35% on a sustainable basis could result in a ratings upgrade to Ba1. The outlooks for CHKM and COO were changed to negative because of their dependence on Chesapeake for a substantial majority of their revenues and Chesapeake's ownership interest in those entities. CHKM is a master limited partnership that primarily provides natural gas gathering services. Chesapeake owns 50% of CHKM's general partner and a sizable amount of its limited partner interests. COO is a wholly owned oilfield services subsidiary of Chesapeake. The principal methodology used in rating Chesapeake was the Global Independent Exploration and Production Industry Methodology published in December 2011. The principal methodologies used in rating CHKM and COO were the Global Midstream Energy Industry Methodology published in December 2010 and the Global Oilfield Services Industry Methodology published in December 2009, respectively. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Moody's current ratings for Chesapeake Energy and its affiliates are: Chesapeake Energy Corporation Long Term Corporate Family Ratings (domestic currency) of Ba2 Probability of Default Rating of Ba2 Speculative Grade Liquidity Rating of SGL-3 Senior Unsecured (domestic currency) Rating of Ba3 Senior Unsecured (foreign currency) Rating of Ba3 Senior Unsecured Shelf (domestic currency) Rating of (P)Ba3 LGD Senior Unsecured (domestic currency) Assessment of 71 - LGD5 LGD Senior Unsecured (foreign currency) Assessment of 71 - LGD5 Chesapeake Energy Corporation is an independent exploration and production company based in Oklahoma City, Oklahoma. CICERO INC: CBH Replaces Marcum as Independent Accountant --------------------------------------------------------- Cicero Inc. dismissed its principal independent accountant, Marcum LLP on May 2, 2012. The dismissal was approved by the Audit Committee of the Company's Board of Directors. Marcum was the Company's principal independent accountant and reported on the Company's financial statements for the fiscal years ended Dec. 31, 2010, and 2011. During the Company's two most recent fiscal years, and subsequently up to the date of dismissal, there were no disagreements between the Company and Marcum on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements that, if not resolved to Marcum's satisfaction, would have caused Marcum to make reference to the subject matter of the disagreement in connection with its report issued in connection with the audit of the Company's financial statements. In connection with the audit of the Company's Dec. 31, 2011, financial statements, Marcum advised the Company of a material weakness in its internal control over financial reporting, in that the Company did not independently account for a significant, complex, and non-routine transaction as of Dec. 31, 2011. However, the transaction has been properly disclosed in the consolidated financial statements filed with the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2011. Marcum's audit report on financial statements for the fiscal year ended Dec. 31, 2011, of the Company contained no adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles. Marcum's audit report on financial statements for the fiscal year ended Dec. 31, 2010, of the Company contained no adverse opinion or disclaimer of opinion, however it was qualified as to uncertainty as a going concern. On May 2, 2012, the Company engaged Cherry, Bekaert & Holland, L.L.P, as its principal independent accountant. The decision to engage CBH as the Company's principal independent accountant was approved by the Audit Committee of the Company's Board of Directors. During the two most recent fiscal years ended Dec. 31, 2010, and 2011 and through May 2, 2012, neither the Company nor anyone acting on its behalf consulted with CBH the regarding either (i) the application of accounting principles to a specific transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's financial statements, and no written report was provided to the Company or oral advice was provided that CBH concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of either a disagreement or a reportable event. In March 2012, the Company engaged CBH as an independent resource to assist management in evaluating the application of ASC 985-605 Software Revenue Recognition for a specific revenue transaction that occurred in December 2011. The Company, in that transaction, entered into a multiple element arrangement. CBH read the contract and assisted management in determining and assessing the applicable provisions of ASC 985-605. As part of that assistance, CBH inquired of management with respect to the nature and type of evidential matter that was available to the Company in order for management to make an appropriate assessment of the timing of the revenue recognition. As part of those discussions, CBH did not, at any time, indicate or provide their professional opinion with respect to the appropriate revenue recognition for the transaction. But rather, they maintained that such determination was the decision of management and would be subject to the professional judgment of their auditors with respect to the sufficiency of the evidential matter provided to the auditor to support that determination. Marcum concluded that the deferral of revenue was proper based upon the prescribed guidance in ASC 985-605. About Cicero Inc. Cary, N.C.-based Cicero, Inc., provides business integration software solutions and also provides technical support, training and consulting services as part of its commitment to providing customers with industry-leading solutions. The Company focuses on the customer experience management market with emphasis on desktop integration and business process automation with its Cicero XM(TM) products. Cicero XM enables the flow of data between different applications, regardless of the type and source of the application, eliminating redundant entry and costly mistakes. The Company has extended the maturity dates of several debt obligations that were due in 2011 to 2012, to assist with liquidity and may attempt to extend these maturities again if necessary. Despite the recent additions of several new clients, the Company continues to struggle to gain additional sources of liquidity on terms that are acceptable to the Company. The Company reported a net loss of $2.97 million in 2011, compared with a net loss of $459,000 in 2010. The Company's balance sheet at Dec. 31, 2011, showed $5.04 million in total assets, $14.66 million in total liabilities, and a $9.62 million total stockholders' deficit. CITRUS COUNTY: Fitch Cuts Rating on $39.4-Mil. Notes to 'BB-' ------------------------------------------------------------- Fitch Ratings has downgraded the following bonds issued by the Citrus County Hospital Board (Citrus Memorial Health Foundation, Inc.), on behalf of Citrus Memorial Hospital (CMH) to 'BB-' from 'BB+'. -- $39.4 million series 2002 The Rating Outlook is revised to Evolving from Negative. An evolving outlook indicates that the rating may be affirmed, lowered or raised. SECURITY: The series 2002 bonds are secured by a pledge of gross revenues of the Foundation. KEY RATING DRIVERS: CONTINUED WEAK FINANCIAL PERFORMANCE: The rating downgrade to 'BB-' reflects CMH's continued operating losses and a steep liquidity decline due to the ongoing legal dispute over the control of the hospital, integration of a new billing system, and increasing outpatient competition. ONGOING LEGAL DISPUTE: The Foundation and Citrus County Hospital Board (CCHB) have been involved in a significant legal dispute over the control of the hospital. Since 2009, over $10 million in levied tax revenue by CCHB has not been dispersed to CMH for operational purposes. Fitch believes it is imperative for both parties to resolve this dispute so the organization can return its focus to strategic and operational initiatives. MANAGEABLE CAPITAL NEEDS: CMH has limited capital needs with no major construction projects planned. In 2012, CMH's capital budget calls for approximately $6.7 million in expenditures. UNFAVORABLE SERVICE AREA CHARACTERISTICS: CMH has a high percentage of Medicare payors (almost 70% of gross revenues) and there has been increasing outpatient competition. CREDIT SUMMARY: RATING DOWNGRADE TO 'BB-' The rating downgrade to 'BB-' reflects CMH's continued weak financial performance that has stemmed from the withhold of tax revenue that has historically totaled approximately $10 million a year. Citrus Memorial Health Foundation (Foundation) operates CMH under a long-term lease with CCHB. When the lease was executed, CCHB entered into a hospital care agreement, which stated that CCHB would provide funds to the Foundation through its ability to levy ad valorem taxes as an independent special district in Citrus County. The CCHB can levy taxes up to 3 mills of assessed value. From 2009 - 2012, the Foundation and CCHB have been involved in a legal dispute regarding future operational control of the facility. Because of this, CCHB began reducing the tax millage rate as well as withholding tax revenue that has been levied. The total amount due to the Foundation from fiscal years 2009 - 2011 is approximately $13 million. One case currently being litigated relates to a local bill that would provide for a change in the structure of the Foundation's board of directors, which would grant control of the Foundation to the CCHB. Fitch will monitor the outcome of the situation, which CMH's current management team believes could be resolved by summer 2012. Fitch will review any impact to the credit rating when the litigation issues are resolved. Without tax revenue and one-time items, CMH reduced its losses in fiscal 2011 to $4.4 million from $8 million the prior year. Management implemented several cost reduction initiatives including a reduction in force. Fitch believes CMH's fiscal 2012 net income budget of $1 million (without any tax revenue) is aggressive. Debt service coverage was weak at 1.4x on maximum annual debt service ($4.2 million) for fiscal 2011, which is slightly above the organization's 1.0x coverage covenant. At March 31, 2012, CMH had $29.3 million in unrestricted cash and investments, which translated into 70.4 days cash on hand (DCOH), 6.8x cushion ratio, and 53.8% cash to debt. CMH's liquidity position is down from fiscal 2011 with $38.2 million and is close to violating the 65 DCOH liquidity covenant on the organization's series 2006 and 2008 bonds. Additional negative credit factors include CMH's competitive service area, unfavorable payor mix, and weak service area characteristics. CMH does have the leading market position in its service area, but operates in a competitive market with acute care and physician providers successfully taking market share from CMH. In 2011, inpatient admissions, inpatient and outpatient surgeries all fell from prior year levels. Overall, CMH's service area is relatively weak economically with high unemployment and below average wealth and income levels. CMH's payor mix is primarily composed of governmental payors (Medicare and Medicaid; 75.1% of gross revenues), which presents exposure to federal and state programmatic modifications or funding reductions. In 2012, CMH is budgeting for a $600,000 cut in Medicaid reimbursement. However, CMH is also expecting a $2.4 million payment from Medicare in fiscal 2012 due to a settlement regarding rural hospital reimbursement. OUTLOOK The Evolving Outlook reflects Fitch's view that CMH's rating could be affirmed, lowered, or raised. Fitch will continue to monitor the situation and legal proceedings between the Foundation and CCHB. The release of tax revenues collected from prior years to CMH would be viewed positively by Fitch and could warrant positive rating pressure at that time. However, further negative rating pressure could occur if there is continued deterioration in CMH's current financial position. DEBT PROFILE As of Sept. 2011 total debt was $55.3 million, of which nearly two-thirds was fixed-rate. The $9.2 million series 2006 bonds are a direct placement with SunTrust Bank and the bank can put the debt back to the hospital with a 366 day notice. Fitch views this as a risk especially given CMH's worsened financial position and already limited balance sheet cushion. ORGANIZATIONAL OVERVIEW CMH is a 198-bed community hospital located in Inverness, FL., approximately 75 miles north of Tampa. In 2011, CMH had $177.4 million in total operating revenues. CMH covenants to provide quarterly disclosure by written request to bondholders who hold more than $1 million in bonds and distributes annual financial statements to the Municipal Securities Rulemaking Board's EMMA system. CLAYTON WILLIAMS: Moody's Upgrades CFR to 'B2', Outlook Stable -------------------------------------------------------------- Moody's Investors Service upgraded Clayton Williams Energy's (CWEI) Corporate Family Rating (CFR) to B2 from B3. The rating on the existing $350 million senior unsecured notes was upgraded to B3. Moody's also affirmed the SGL-3 Speculative Grade Liquidity rating (SGL). The rating outlook is stable. This action concludes Moody's review for upgrade, which commenced April 2, 2012. Ratings Rationale "CWEI has made a noteworthy transition to oil in four years. In 2007, about 57% of production and 42% of total proved reserves were natural gas. Now 76% of total proved reserves and 74% of production derive from oil and liquids with a reserve life extension of about 4-years," said Harry Schroeder, Moody's Vice President. CWEI's B2 Corporate Family Rating reflects the company's oil weighted production and reserves, high level of operating control of its property base, its migration to properties with longer reserve lives and a capital budget primarily focused on developmental drilling in order to increase its oil production. The rating also reflects the company's seasoned management team, which has operated through numerous sector cycles. The scale of its production and reserves when compared to its development plans restrains the B2 Corporate Family Rating. Having acquired substantial prospect positions in promising areas, it will likely outspend cash flow for the foreseeable future to develop them. Transition to the next level will require an adroit balancing of debt used for acquiring new acreage and converting them and the attendant proved undeveloped reserves to proved producing oil reserves that generate actual cash flow. Production since the beginning of 2009 has been static with proved developed reserves increasing 40% and proved undeveloped 400% after spending about $800 million in acquisition, development, and exploration costs. Proved undeveloped reserves are now about 40% of total, up from 15% in 2009. CWEI's SGL-3 rating reflects an adequate liquidity profile, supported by adequate availability under its revolver, supportive hedges and expected growing oil production. Moody's expects the company to outspend cash flow by about $170 million in 2012 with the shortfall funded through drawings under its revolver. The company has a $350 million revolving credit with an approved Borrowing Base of $475 Million. After expanding the revolver to the full $475 million, it will have approximately $125 million available at year-end 2012. Moody's believes it is likely that the company will go to market prior to year-end 2013. Assuming a new $250 million issue, it would yield availability of about $290 million by year end-2013 with no increase in the present borrowing base. Financial covenants under the revolver include a minimum current ratio of 1.0x and maximum Total Debt/EBITDAX ratio of 4.0x. Moody's expects that it will remain well in compliance with its covenant in 2012, supported by the company's growing oil production. The B3 rating on the company's senior unsecured notes reflects both the overall probability of default, to which Moody's assigns a Probability of Default of B2, and a loss given default of LGD 5 (77%). The senior unsecured notes are rated B3 one notch below the B2 Corporate Family Rating, reflecting the contractual subordination of the notes relative to the company's secured bank credit facility and high level of payables. A continuing increase in the size of the revolver with requisite greater borrowings, without an unsecured refinancing of those borrowings could precipitate an additional notch to Caa1 for the unsecured notes. As mentioned above, Moody's anticipates a return to the capital markets by 2013 which should alleviate this concern. The bank credit facility is secured with substantially all of its oil and gas properties. CWEI's wholly owned subsidiaries guarantee both the credit facility and senior unsecured notes. The stable outlook reflects the favorable oil price outlook, the lower risk development strategy and assumes that the company is able to continue to grow production and reserves relative to expected increased debt levels. It is unlikely that CWEI will be upgraded in the near term primarily due to its modest average daily production. When average daily production approaches 20,000 bpd, proved developed reserves exceed 65 million boe and there is a greater balance between present and non- Permian, Moody's will consider an upgrade. Over the next 2-3 years, it is likely CWEI will outspend cash flow. Under current ownership it is unlikely that new equity will be issued - therefore leverage is expected to increase. If Debt/average daily production is expected to exceed $47,000 for a material period, Retained Cash Flow /Total Debt declines below 25% or if Leveraged Full Cycle Ratio declines below 1.75 times, a downgrade would be considered. The principal methodology used in rating Clayton Williams was the Global Independent Exploration and Production Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Clayton Williams Energy Inc. which is headquartered in Midland, Texas, is engaged in the exploration and production of oil, natural gas liquids and natural gas. COLT DEFENSE: S&P Puts 'B-' Corp. Credit Rating on Watch Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Connecticut-based Colt Defense LLC, including its 'B-' corporate credit rating, on CreditWatch with negative implications. "The CreditWatch placement reflects the potential negative long- term impact of the loss of a key contract," said Standard & Poor's credit analyst Chris Mooney. "The U.S. Army recently selected Remington Arms Co. Inc. for an $84 million contract to supply the standard-issue M4 rifle through 2017. Colt had been the sole-source supplier to the U.S. government since 1997, and this is the first time the Army has awarded the contract to a competitor," S&P said. The near-term impact is limited. Standard & Poor's already assumed zero M4 sales in 2012 in its analysis because of U.S. troop withdrawals from the Middle East. "However, we consider the recent contract loss, if upheld, a setback in the long term as Colt prepares to bid on the potential replacement rifle, currently scheduled to be awarded in 2013," Mr. Mooney added. Standard & Poor's will assess the magnitude of potential lost revenue and cash flow related to the M4 contract, as well as the longer-term effects on the company's credit profile, and plans to resolve the CreditWatch in the coming weeks. COMSTOCK RESOURCES: S&P Lowers Corporate Credit Rating to 'B' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Frisco, Texas-based Comstock Resources Inc. to 'B' from 'B+'. The outlook is negative. "Standard & Poor's also lowered its issue rating on the company's senior unsecured debt to 'B-' from 'B'. The recovery rating remains '5', indicating our expectation of modest (10% to 30%) recovery for bondholders in the event of a payment default," S&P said. "The downgrade follows our recent reduction of our natural gas price assumptions and Comstock's weakened liquidity," said Standard & Poor's credit analyst Carin Dehne-Kiley. Although the company is increasing its oil-related production, the shift to liquids-based production takes time and requires substantial capital outlays. Falling natural gas prices and the company's lack of natural gas hedges have further weakened credit measures and liquidity during the company's transition to higher oil production. "The ratings on Comstock reflect the company's 'vulnerable' business risk and 'aggressive' financial risk," S&P said. "We expect that natural gas prices will remain weak over the next one to two years, which will pressure the company's profitability while it shifts capital to oil projects," Ms. Dehne-Kiley said. "In addition, we expect Comstock's liquidity to weaken considerably by the end of 2012, based on our estimate that the company will outspend operating cash flows in 2012." "Comstock is an independent exploration and production (E&P) company that operates primarily onshore in Texas and Louisiana. As of year-end 2011, the company's proven reserve base was relatively small at about 1.3 trillion cubic feet equivalent (tcfe) and weighted toward natural gas (85%). Although Comstock's cost structure is competitive due to efficiencies gained in the Haynesville shale, costs are likely to rise as the company shifts to higher-cost oil production," S&P said. CONDOR DEVELOPMENT: Court Okays Larry B. Feinstein as Counsel ------------------------------------------------------------- Condor Development, LLC, obtained permission from the U.S. Bankruptcy Court for the Western District of Washington to employ Larry B. Feinstein, Esq., at Vortman & Feinstein, as the primary attorney involved in the Chapter 11 case. As reported by the Troubled Company Reporter on May 3, 2012, Mr. Feinstein will be paid $395 per hour to, among other things, negotiate with creditors concerning a Chapter 11 plan, prepare a Chapter 11 plan and disclosure statement and related documents, and take the steps necessary to confirm and implement the proposed plan of liquidation. About Condor Development Condor Development LLC, aka Ciara Inn and Condor Management Group, operates the Comfort Inn Suites, a hotel located at Seatac, Washington. Condor Development filed a Chapter 11 petition (Bankr. W.D. Wash. Case No. 12-13287) on March 30, 2012, in Seattle. The petition was signed by Joseph Ciaramella, managing member. In its schedules, the Debtor disclosed $16.4 million in total assets and $9.11 million in total liabilities. Affiliate Seattle Group also filed for Chapter 11 protection (Bankr. Case No. 12-13263) on March 30, 2012, disclosing $16.3 million in total assets and $9.21 million in total liabilities. CONTRACT RESEARCH: Durata Therapeutics Balks at Specifics of Sale ----------------------------------------------------------------- Durata Therapeutics, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to (i) deny Contract Research Solutions, Inc., et al.'s motion for approval of assumption and assignment of the Durata agreement, unless the assumption and assignment is conditioned on the provision of adequate assurance and reservation of rights. According to Durata, through the sale motion and notices, the Debtors seek approval for the potential assumption of three contracts between one of the Debtors, CRS Management, Inc., and Durata: (a) a single study agreement dated as of March 23, 2011; (b) a single study agreement dated as of March 20, 2012; and (c) a mutual confidentiality and non-use agreement dated as of Nov. 11, 2010. Durata does not object to the assumption and assignment of the Durata agreements provided that: 1. If any of the Durata agreements is assumed or assigned, all of the Durata agreement are assumed by CRS or assumed and assigned to a single assignee that is also the assignee of substantially all assets and personnel of CRS related to the Durata agreements -- because only a single counterparty to all Durata agreement will be able to provide adequate assurance of future performance of CRS obligations under any of the three Durata agreements; and 2. Even if Durata is not entitled to any cure as a condition to assumption or assignments of the Durata agreements, Durata maintains that, notwithstanding the terms of any assumption or assignment of the Durata agreements or order approving the same, CRS and any assignee will remain liable to Durata for any current breaches, defaults, facts or damages under the Durata agreements. In a separate filing, Quest Diagnostic Incorporated and Quest Diagnostic Clinical Laboratories, Inc., file their objection to the Debtors' sale motion. According to QDI, through the sale motion, the Debtors seek approval for the potential assumption and assignment of a purported contract between one of the Debtors and "Quest": A "Clinical lab testing" agreement dated Nov. 27, 2007. Despite diligent search, QDI is unaware of any such executory contract between it and the Debtor. Accordingly, without specificity as to the nature and details of the contract, QDI objects to the assumption of the contract. As reported in the Troubled Company Reporter on April 18, 2012, the Debtors will hold an auction on May 15 where an offer by first-lien lenders to buy the business for $80.3 million will be the opening bid. Absent higher and better offers, Cetero will sell the business to lenders in exchange for a credit bid of $50 million of secured debt, and the assumption of $30 million in liabilities. Under bidding procedures approved April 13, competing bids are due May 11. A hearing to approve the sale is set for May 17. 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. Jefferies & Company Inc. serves as financial advisors. 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. The Committee tapped Morris Anderson & Associates, Ltd., as its financial advisors. DEWEY & LEBOEUF: PBGC to Terminate 3 Underfunded Pension Plans -------------------------------------------------------------- Jennifer Smith, writing for The Wall Street Journal, reports the Pension Benefit Guaranty Corp. ants to terminate three Dewey & LeBoeuf plans that it says are underfunded by about $80 million and at risk as the firm tries to liquidate its assets. The PBGC determined Thursday that the Dewey plans, which cover 1,788 participants, should end on May 11, 2012. Dewey & LeBoeuf has only $127 million in assets to cover $214 million in obligations, according to a person familiar with the matter, WSJ reports. WSJ says a spokesman for Dewey & LeBoeuf declined to comment. Dewey & LeBoeuf has lost more than 40% of its partners since January amid disputes over compensation. Dewey is also facing a May 15 deadline with a syndicate of banks. According to WSJ, taking over the pension plans now will give PBGC a better shot at recovering the $80 million shortfall, and also give the PBGC a claim on any additional cash raised by the future sale of firm assets, such as Dewey's overseas offices in London or Paris. DEWEY & LEBOEUF: Employee Sues Over WARN Act Violations ------------------------------------------------------- Joe Palazzolo, writng for The Wall Street Journal's Law Blog, reports that Vittoria Conn, an employee of Dewey & LeBoeuf LLP, sued the law firm in federal district court in Manhattan on Thursday alleging the firm failed to give notice to the employees, as required by state and federal law. WSJ relates Ms. Conn, a document specialist at Dewey, accuses Dewey of violating a federal law that requires employers to give their employees 60 days advance written notice of their termination. The lawsuit also alleges the firm broke a state labor law that requires 90 days advance written notice. WSJ relates Ms. Conn said she and about 450 others will lose their jobs on Friday. Ms. Conn said the firm announced the mass layoff on Monday and informed employees that their last day was May 11. WSJ relates a lawyer for Ms. Conn didn?t immediately respond to request for comment. A representative for the firm did not immediately respond to a request seeking comment. DOLE FOOD: S&P Affirms 'B' Corp. Credit Rating; Outlook Developing ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its corporate credit rating on Dole Food Co. Inc. at 'B', and revised its rating outlook to developing from stable. The outlook change follows Dole's recent announcement that it has initiated a comprehensive strategic review of its businesses seeking to enhance shareholder value. The alternatives to be considered may include a full or partial separation of one or more of its businesses. 'Specific information regarding the terms of any potential transaction is not yet available," said Standard & Poor's credit analyst Jeff Burian. "We will assess the impact on Dole's business risk profile, financial risk profile, and overall corporate credit rating as more information becomes available." "The ratings on Dole reflect our view that the company's financial risk profile is 'highly leveraged' and business risk profile is 'weak.' Key credit factors in our assessment of Dole's business risk profile include the company's participation in the competitive, commodity-oriented, seasonal, and volatile fresh produce industry, which is subject to political and economic risks. We also consider the benefits of Dole's strong market positions, good geographical, product and customer diversification, and its well-recognized brand name." "The developing outlook reflects the possibility of a lower or higher rating following the outcome of Dole's strategic review. We could lower the ratings if the company divests its higher-margin, less-volatile packaged food businesses and uses the proceeds to reward shareholders with little to no debt reduction. We believe a divestiture of these businesses could result in a weaker business risk profile given our opinion that this would reduce Dole's product diversity and profitability as the surviving, commodity- like produce business will be characterized by more-volatile earnings. We also believe Dole's financial risk profile could weaken if the company adopts a more aggressive financial policy, financial performance falls well below our expectations, liquidity becomes constrained, or credit protection measures weaken; specifically, if average leverage increases to about 6x through reduced earnings with little to no debt reduction at the surviving entity," S&P said. "Alternatively, we could raise the ratings if the company uses sale proceeds to reduce debt to an extent that would materially improve the company's financial risk profile, despite our opinion that Dole's business risk profile would weaken following a divestiture of the packaged food businesses. A significant improvement in Dole's financial risk profile could occur if divestiture proceeds are used to reduce debt, while at the same time, Dole demonstrates sustained improved performance resulting in indicative ratios commensurate with an 'aggressive' financial risk profile, including achieving and maintaining a rolling four- quarter average lease-adjusted leverage ratio of less than 5x, while maintaining a prudent financial policy. We estimate this would require a reduction in current debt levels in excess of $950 million, assuming flat EBITDA levels," S&P said. E*TRADE BANK: S&P Keeps 'B+' Issuer Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its issuer credit ratings on BGC Partners Inc., Charles Schwab & Co. Inc., E*TRADE Bank, E*TRADE Financial Corp. (ETFC), and Interactive Brokers LLC. Standard & Poor's also said that it affirmed its 'BBB+' issuer and issue credit ratings on CI Investments Inc., but lowered its issuer credit rating on CI Investments' parent company, CI Financial Corp. (CI), to 'BBB' from 'BBB+'. In addition, Standard & Poor's affirmed its ratings on CI's debt because CI Investments guarantees it. The outlooks on all of these companies remain stable. "BGC (BBB-/Stable/--) is partially owned, but majority controlled, by institutional brokerage holding company Cantor Fitzgerald L.P. (BBB/Negative/--). BGC is a holding company for several interdealer-brokers and commercial real estate brokers. We consider BGC to be 'highly strategic' to Cantor Fitzgerald according to our group rating methodology. As a result, we rate BGC two notches below the 'bbb+' group credit profile. The two- notch differential reflects the rating cap on a 'highly strategic' operating company at one notch below the group credit profile and the one-notch differential for BGC's structural subordination as a holding company," S&P said. "CS&Co (A+/Stable/--) is a U.S. brokerage firm and principal operating subsidiary of Charles Schwab Corp. (Schwab; A/Stable/A- 1), a financial services company providing securities brokerage, mutual funds, and banking services, primarily to individual investors. Schwab is one of, if not the, largest U.S. retail brokers, with total client assets of $1.83 trillion as of March 31, 2012. We consider CS&Co to be 'core' to Schwab according to our group rating methodology. As a result, we rate CS&Co at the level of the 'a+' group credit profile. The 'A' issuer credit rating on Schwab is one notch below the group credit profile. The one-notch differential reflects both the structural subordination and the potential for regulatory restrictions on the broker's ability to upstream dividends to the holding company, though there are currently no such restrictions," S&P said. "CI Investments (BBB+/Stable/--) is the principal operating subsidiary of CI. CI Investments is a leading provider of investment management services as the third largest fund company in Canada by assets under management (AUM) (C$69.6 billion as of Dec. 31, 2011). We base the rating on CI Investments on our view that it is a core subsidiary of its parent, CI. As a result, we rate CI Investments at the level of the 'bbb+' group credit profile. The 'BBB' issuer credit rating on CI, the holding company, is one notch below the group credit profile. The one- notch differential reflects the structural subordination of an investment-grade holding company," S&P said. "E*TRADE Bank (B+/Stable/B) is the principal operating subsidiary of ETFC (B-/Stable/--), a financial services company providing online securities brokerage and banking services, primarily to individual investors. As of Dec. 31, 2011, the company had a total of 4.3 million accounts, consisting of 2.8 million domestic brokerage accounts, 1.0 million stock plan accounts, and 463,600 banking-only accounts. We consider E*TRADE Bank to be 'core' to ETFC according to our group rating methodology. As a result, we rate E*TRADE Bank at the level of the 'b+' group credit profile. The 'B-' issuer credit rating on ETFC, the holding company, is two notches below the group credit profile. The two-notch differential reflects both structural subordination of a speculative-grade holding company and the regulatory restrictions on the bank's ability to upstream dividends to the holding company," S&P said. "IBLLC (A-/Stable/A-2) is a U.S. brokerage firm and one of IBG LLC's (IBG's; BBB+/Stable/--) two principal operating subsidiaries. IBG is a brokerage holding company involved in institutional brokerage and options market making. We consider IBLLC to be 'core' to IBG according to our group rating methodology. As a result, we rate IBLLC at the level of the 'a-' group credit profile. The 'BBB+' issuer credit rating on IBG is one notch below the group credit profile. The one-notch differential reflects both structural subordination and the potential for regulatory restrictions on the broker's ability to upstream dividends to the holding company, though there are currently no such restrictions," S&P said. "The stable outlook on BGC Partners takes into account our expectations that the firm will improve its profitability, that Cantor Fitzgerald will maintain its ownership of the firm, and that both BGC Partners' and Cantor Fitzgerald's financial profile will remain sound. If BGC Partners' liquidity or leverage measures erode materially, we could lower the rating. Given Standard & Poor's group methodology criteria, which limits the rating uplift for a strategically important subsidiary, it is highly unlikely that we would raise the rating on BGC Partners given the current rating on Cantor Fitzgerald," S&P said. "The stable outlook on Schwab reflects our opinion that the company's strong underlying fundamentals should allow it to maintain sound creditworthiness in all but a severe stress scenario. It is unlikely that we could upgrade the company in the near term, given the rating level and the bank subsidiary's recent growth. However, if the firm is able to maintain solid profitability metrics, a strong liquidity profile, and solid risk adjusted capital measures, we could raise the ratings in the long term. Conversely, a prolonged period of very weak profit margins, a material increase in credit or market risk, a deterioration in the liquidity profile, or an increase in leverage such that the adjusted total equity-to-adjusted assets ratio falls below 5.5% could result in a downgrade. We could also lower the rating if the firm's regulatory capital ratios approach the minimum required to remain 'well capitalized,'" S&P said. "The stable outlook on CI reflects our expectation that the company will continue to generate strong cash flows from operations -- even in moderately volatile markets -- to fund its day-to-day operations and service existing debt obligations. We believe that CI's business profile -- not its financial profile -- could prevent a potential upgrade. The firm's asset mix is skewed toward equity products for retail investors, and it primarily operates in the relatively small, yet highly competitive Canadian market. We believe CI's ability to diversify its business mix and geography will take several years. Consequently, we don't expect to raise the rating over the time frame of our ratings outlook, which is typically 12-24 months. Conversely, we do not see any downgrade risks, except if the company was to issue a sizable amount of debt to finance either a large acquisition or an aggressive share repurchase program," S&P said. "The stable outlook on ETFC reflects our expectation that the company will continue to make headway addressing the asset-quality problems in its large residential mortgage loan portfolio over the next 12 months. If ETFC is able to improve fundamental profitability on a sustainable basis during this time period and if it obtains regulatory approval to upstream dividends to the holding company from the principal operating subsidiaries, we could raise the rating. Alternatively, if the holding company does not begin to obtain regulatory approval within the next 12 months to upstream cash dividends from the principal operating subsidiaries, we could lower the rating," S&P said. "The outlook on IBG is stable. We believe the firm's continued strong margins and capitalization should buttress its financial profile against most likely downturns in operating conditions. We expect IBG's brokerage business and international operations to continue to grow and, thereby, reduce dependence on U.S. options- market volumes and equity-market volatility. We are unlikely to raise the rating due to the firm's business model, but we could upgrade the firm if it maintains its strong financial profile and continues to develop its governance and diversification efforts. Conversely, if the market-making business suffers prolonged revenue compression, if the firm increases leverage so that its adjusted total equity to managed assets ratio falls below 10% or decreases liquidity, or if it moves into higher risk businesses, we would likely lower the rating," S&P said. EGPI FIRECREEK: Incurs $4.9 Million Net Loss in 2011 ---------------------------------------------------- EGPI Firecreek, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $4.97 million on $293,712 of total revenue for the year ended Dec. 31, 2011, compared with a net loss of $4.48 million on $15,705 of total revenue during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $2.70 million in total assets, $5.51 million in total liabilities, all current, $1.87 million in series D preferred stock, and a $4.67 million total shareholders' deficit. For 2011, M&K CPAS, PLLC, in Houston, Texas, noted that the Company has suffered recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. A copy of the Form 10-K is available for free at: http://is.gd/xlg3Dq About EGPI Firecreek Scottsdale, Ariz.-based EGPI Firecreek, Inc. (OTC BB: EFIR) was formerly known as Energy Producers, Inc., an oil and gas production company focusing on the recovery and development of oil and natural gas. The Company has been focused on oil and gas activities for development of interests held that were acquired in Texas and Wyoming for the production of oil and natural gas through Dec. 2, 2008. Historically in its 2005 fiscal year, the Company initiated a program to review domestic oil and gas prospects and targets. As a result, EGPI acquired non-operating oil and gas interests in a project titled Ten Mile Draw located in Sweetwater County, Wyoming for the development and production of natural gas. In July 2007, the Company acquired and began production of oil at the 2,000 plus acre Fant Ranch Unit in Knox County, Texas. This was followed by the acquisition and commencement in March 2008 of oil and gas production at the J.B. Tubb Leasehold Estate located in the Amoco Crawar Field in Ward County, Texas. ELO TOUCH: S&P Assigns 'B' Corporate Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned a preliminary corporate credit rating of 'B' to Menlo Park, Calif.-based Elo Touch Solutions Inc. The outlook is stable. "At the same time, we assigned a preliminary issue rating of 'B+' to the company's proposed senior secured first-lien term loan due in 2018 and revolving line of credit due in 2017 with a preliminary recovery rating of '2', indicating our expectation of substantial (70%-90%) recovery in the event of default. We also assigned a preliminary rating of 'CCC+' to the company's proposed senior secured second-lien term loan due in 2019 with a preliminary recovery rating of '6', indicating our expectation of negligible (0%-10%) recovery in the event of default," S&P said. "The preliminary ratings on Elo reflect our expectation that after the transaction, the company will have a 'vulnerable' business risk profile," said Standard & Poor's credit analyst Christian Frank, "based on its narrow market focus in the fragmented and competitive touch screen solutions industry, its concentrated customer base and retail end market, and its lack of a track record operating as a stand-alone company. Partially offsetting these factors are its strong presence in the retailer segment and its relationships with distributors and original equipment manufacturers (OEMs). The company will have an 'aggressive' financial risk profile, reflecting its leveraged capital structure, which we expect will remain near 5x over the medium term." "The stable outlook reflects our expectation that Elo will generate modest growth and successfully transition to a stand- alone company. We anticipate that Elo will not de-lever materially over the intermediate term as it uses cash flow for investing in its stand-alone infrastructure and generates limited EBITDA growth, and therefore an upgrade is unlikely. We could lower the rating if stand-alone transition challenges, increased competition, or a large customer loss cause EBITDA to decline and leverage to increase to the mid-5x area," S&P said. ENERGY CONVERSION: Hearing on Equity Panel Adjourned to May 16 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan approved a stipulation adjourning the hearing on the Ad Hoc Shareholders Committee's motion for the appointment of an Official Equity Committee in the Chapter 11 cases of Energy Conversion Devices, Inc., and United Solar Ovonic LLC. The Court ordered that the hearing originally scheduled for May 9, 2012, is adjourned to May 16, at 12:00 noon. The parties may file a supplemental brief regarding the motion, no later than May 11. The stipulation was entered among the Debtors, the Ad Hoc Shareholders Committee; the Official Committee of Unsecured Creditors, the Ad Hoc Consortium of Noteholders, and the U.S. Trustee. 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. A group of shareholders 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. ENERGY CONVERSION: Trony Solar Still Interested in Buying Unit -------------------------------------------------------------- Karl Henkel at the Detroit News reports that Trony Solar Holdings Co. Ltd. remains interested in United Solar Ovonic LLC. The report relates Trony said in a statement to investors that it will "negotiate further" with Energy Conversion Devices regarding the possible acquisition of USO. The news comes two days after ECD and USO canceled a scheduled auction for USO after it failed to receive an acceptable bid before May 8, the day of the auction. ECD sought to sell assets on a going concern basis. The auction was previously scheduled for April 24. According to the report, the cancellation caused ECD to lay off 300 employees, including 150 in Greenville. Salamon Group Inc. last month made the only publicly known offer to buy bankrupt ECD for about $2.4 million worth of its stock. Salamon Group, a solar energy project company, said it was interested in buying ECD mainly for its financial losses that could be written off on Salamon's taxes. 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. ESSELTE GROUP: S&P Gives 'B' Corp. Credit Rating; Outlook Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B' corporate credit rating to Stamford, Conn.-based Esselte Group Holdings SA, a global manufacturer and distributor of mostly branded office products. "At the same time, we assigned our preliminary 'B+' issue-level rating to Esselte's proposed $200 million senior secured term loan. The preliminary recovery rating is '2', indicating our expectation for substantial (70% to 90%) recovery in the event of a payment default. The term loan will be issued at the operating company level through its Esselte AB and Esselte Holdings Inc. subsidiaries. The company is also seeking to extend its existing $60 million asset-based lending (ABL) revolving term loan (unrated) to March 2016. All ratings are subject to review of final documentation. We understand that Esselte will use the net proceeds to refinance its term loans, repay debt at the holding company level, and pay $22.5 million of dividends to shareholders, including majority owner JW Childs Associates," S&P said. "The outlook is stable. Pro forma for the transaction, we estimate that the company will have about $200 million of reported debt outstanding. Including our adjustments for operating leases, pension obligations, and other contingent liabilities, we estimate Esselte will have approximately $360 million total adjusted debt outstanding," S&P said. "The ratings on Esselte reflect our assessment of the company's financial risk profile as 'highly leveraged' and its business risk profile as 'vulnerable.' Key credit factors in our business risk assessment include Esselte's participation in the highly competitive and fragmented branded office products industry, low barriers to entry, customer concentration, sensitivity to cyclical demand conditions, and significant exposure to Europe's fragile economy," S&P said. "We estimate the company's pro forma ratio of total debt to EBITDA is close to 4x for the fiscal year ended Dec. 31, 2011, and we estimate the ratio of funds from operations (FFO) to adjusted total debt to be about 19%. Although both leverage and FFO-to-debt metrics are currently close to or within the ranges of indicative ratios for an 'aggressive' financial risk profile (which include leverage between 4x and 5x and FFO/debt between 12% and 20%), we assess Esselte's financial risk profile as highly leveraged given the dividend proposal in its current transaction," S&P said. "The company has taken steps to streamline costs, such as discontinuing underperforming products, which could offset EBITDA margin pressures from higher commodity costs," said Standard & Poor's credit analyst Stephanie Harter. "However, we expect Esselte's credit measures to deteriorate slightly in fiscal 2012 from continued weakness in consumer and corporate spending for office products and as the company exits underperforming product lines." EXCO RESOURCES: S&P Lowers Corp. Credit Rating to 'B'; Outlook Neg ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Dallas-based Exco Resources Inc. (Exco) to 'B' from 'B+'. The outlook is negative. "At the same time, we lowered our issue rating on Exco's senior unsecured debt to 'CCC+' from 'B-'. The recovery rating remains '6', indicating our expectation of negligible (0% to 10%) recovery in the event of a payment default," S&P said. "The downgrade reflects our expectation for weaker profitability and credit measures following our revised assumptions for natural gas prices," said Standard & Poor's credit analyst Christine Besset. "We recently reduced our natural gas pricing assumptions to $2.00 per million Btu (mmBtu) from $3.00/mmBtu in 2012, to $2.75 from $3.25/mmBtu in 2013, and to $3.50 from $4.00/mmBtu in 2014. Natural gas represents nearly all of Exco's production and reserves, and the company does not have any meaningful crude oil or natural gas liquid (NGL) prospects to help shift its production mix. In addition, although Exco has hedged about 45% of its natural gas production above market prices this year, the company's very weak hedge book in 2013 and thereafter leaves it vulnerable to lower natural gas price realizations. Thus, we have lowered our 2012 and 2013 EBITDA forecasts," S&P said. "The negative outlook reflects our expectation that credit measures will deteriorate through 2012 and 2013, and remain weak for the rating category. We could lower the rating if debt to EBITDA increases to more than 5.25x, with no clear path to improvement or if liquidity materially deteriorates. We could revise the outlook to stable if the company is able to maintain leverage below 5.0x, which will necessitate natural gas prices in excess of $3 in 2013 as well as $500 million of debt reduction from the company's asset sale program," S&P said. FERROMET CORP: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Ferromet Corporation 526 South Jefferson Street New Castle, PA 16101 Bankruptcy Case No.: 12-22477 Chapter 11 Petition Date: May 8, 2012 Court: United States Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Judge: Jeffery A. Deller Debtor's Counsel: Robert O Lampl, Esq. 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 E-mail: rol@lampllaw.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/pawb12-22477.pdf The petition was signed by Mark Heuschkel, president. FIRST REPUBLIC: Fitch Affirms Rating on Preferred Stock at 'BB-' ---------------------------------------------------------------- Fitch Ratings has affirmed the long-term Issuer Default Rating (IDR) and short-term IDR of First Republic Bank (FRC) at 'BBB+' and 'F2', respectively. The Rating Outlook has been revised to Positive from Stable. The affirmation and outlook revision reflects FRC's excellent asset quality, strong capital position and consistent performance over an extended period. The ratings also reflect FRC's solid and stable management which has imbued the bank with a consistent credit and service culture. These rating strengths are offset by robust growth, product and geographic concentrations in the loan book and a weaker funding profile than many higher rated peers. FRC is a private banking and wealth management bank whose jumbo residential loans represent its flagship product and serve as its platform to cross sell many products. Fitch views FRC as a superior credit underwriter to its rated peers, as evidenced by its exceptionally low loss history over a 26 year period. Net charge-offs (NCOs) totaled only 21 basis points (bps) cumulative during this period, including only 6bps of cumulative losses on its residential originations. While GAAP basis performance measures are considered solid, they are impacted by significant purchase accounting adjustments. For example, FRC's return on average assets (ROAA), net interest margin (NIM), and efficiency ratios, as reported for the full year 2011, were 1.39%, 4.63%, and 48.7% respectively. In assessing FRC's profitability, Fitch focuses on adjusted measures, which exclude purchase accounting. On this basis, ROA, NIM and efficiency would be 0.88%, 3.53%, and 59.2%, respectively. These adjusted performance measures are in line with similarly rated institutions and reported performance metrics are expected to trend towards these adjusted levels over the next few years. Tangible common equity levels of roughly 9%, taken in conjunction with the bank's excellent asset quality, stands out amongst FRC's rated peers. This owes in part to the bank's de novo status due to its divestiture from Bank of America in June 2010. De novo status requires FRC to maintain a Tier 1 leverage ratio of 8% compared to the 5% minimum leverage ratio that would ordinarily be the minimum for non de novo institutions. The bank's de novo status expires in 2017 and Fitch expects the bank to maintain a healthy cushion of Tier 1 capital above this minimum at least through 2017. The bank's Tier 1 leverage ratio stands at 9.48% at the first quarter of 2012 (1Q'12). Loan growth has been robust since its divestiture with a compounded annual growth rate of 17%. While deposit growth has been strong as well, loan growth has outpaced with the difference being funded with FHLB advances which amount to $3.05 billion as of March 31, 2012. While FRC has considerable capacity at the FHLB (owing to its large residential mortgage book) and demonstrated good access throughout the crisis, Fitch notes the company's operates with a higher than peer average loan to deposit ratio, which was 103% at March 31, 2012. Fitch also notes there are significant concentrations within the banks investment portfolio, loan book and deposit base. Owing to the company's focus on high net worth individuals its deposit base is concentrated with 1% of its deposit relationships representing 38% of total deposits. The loan book is similarly concentrated with 67% of the loan portfolio being secured by residential real estate, roughly half of which is in quake-prone San Francisco. Finally, the bank's securities portfolio is more heavily weighted towards municipals, given its loan book is already mortgage- centric. Fitch expects that resolution of the Positive Outlook would occur within the next 18-24 months. Ratings could be upgraded if FRC can demonstrate that the performance of recent loan growth conforms with the company's strong historical underwriting standards. In addition, Fitch will factor in the company's ability to operate with a loan to deposit ratio that is not significantly above its current level. Fitch will also consider FRC's ability to expand its footprint in key markets in keeping with its core objectives. With that said, the bank's ratings could be pressured if loan growth continues to outstrip deposit growth and performance of more recent loan vintages is comparatively weaker. Also, given its municipal exposures, significant changes to the creditworthiness of underlying obligors could also be a negative rating factor. FRC is a wealth management and private banking institution with $30 billion in assets and $26 billion of assets under administration. The bank operates primarily in the San Francisco Bay area, New York, Los Angeles, Boston and San Diego. Fitch has affirmed the following ratings: First Republic Bank -- Long-term IDR at 'BBB+'; Outlook Positive -- Short-term IDR at 'F2'; -- Viability Rating at 'bbb+'; -- Long-term deposit at 'A-'; -- Short-Term deposits at 'F2'; -- Subordinated debt at 'BBB'; -- Preferred stock at 'BB-'; -- Support Floor 'NF'; -- Support '5'. First Republic Preferred Capital Corp. -- Preferred stock at 'BB-'. FIRSTFED FINANCIAL: Seeks to Adjourn Disclosure Statement Hearing ----------------------------------------------------------------- BankruptcyData.com reports that FirstFed Financial, HoldCo Advisors, the Federal Deposit Insurance Corporation and the Los Angeles County Treasurer and Tax Collector filed with the U.S. Bankruptcy Court a motion for approval of a stipulation that would adjourn the Disclosure Statement hearing, currently scheduled for May 23, 2012, until June 6, 2012. About FirstFed Financial Irvine, Calif.-based FirstFed Financial Corp. is the bank holding company for First Federal Bank of California and its subsidiaries. The Bank was closed by federal regulators on Dec. 18, 2009. FirstFed Financial Corp. filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 10-10150) on Jan. 6, 2010. Jon L. Dalberg, Esq., at Landau Gottfried & Berger LLP, represents the Debtor in its restructuring effort. Garden City Group is the claims and notice agent. The Debtor disclosed assets at $1 million and $10 million, and debts at $100 million and $500 million. The Debtor's exclusive period to propose a plan expired in January 2011. The Debtor has proposed a Plan of Liquidation, which proposes an orderly liquidation of the Debtor's estate. Holdco Advisors L.P., submitted a competing plan of reorganization. FLORIDA DEV'T: Fitch Affirms Rating on $89-Mil. Bonds at 'BB+' -------------------------------------------------------------- Fitch Ratings has affirmed the 'BB+' rating on the Florida Development Finance Corporation's (FDFC) approximately $89.2 million in outstanding revenue bonds, series 2011A/B. The bonds are issued on behalf of Renaissance Charter School, Inc. (RCS). The Rating Outlook is Stable. SECURITY -- Unrestricted revenues of the Financed Schools; -- A cash-funded debt service reserve fund; -- First liens on three of the financed facilities and a leasehold interest in the fourth; and -- 36 months of capitalized interest during the enrollment ramp- up period (approximately 24 months remaining). The Financed Schools include Hollywood Academy of Arts and Sciences, Hollywood Academy of Arts and Sciences Middle School, Duval Charter School at Baymeadows, Duval Charter High School at Baymeadows, Renaissance Charter School at Coral Springs, and the Homestead Facility with students from Keys Gate Charter School and Keys Gate Charter High School. KEY RATING DRIVERS INITIAL GROWTH ON TRACK: Consolidated enrollment growth at the financed facilities, including three startup schools, exceeded aggressive base case projections for fiscal 2012. The financing plan still anticipates substantial growth over the next few years. Fitch views this as characteristic of non-investment grade transactions; EXPERIENCED MANAGEMENT DRIVES SUCCESS: The Financed Schools benefit from the experience and successful record of Charter Schools USA (CSUSA), which serves as their education management organization (EMO). CSUSA's EMO contracts are not coterminous with final maturity of the bonds. Fitch views this as a credit risk since the Financed Schools have virtually no management capability absent CSUSA; BENEFICIAL LEGAL PROVISIONS: Bondholders benefit from structural aspects of the transaction. This includes the consolidated revenue pledge of the Financed Schools and subordination of operating expenses along with CSUSA's management fees. Unrestricted revenues of the Financed Schools flow monthly to the trustee, with initial allocations to debt service; STANDARD SECTOR CONCERNS: Limited financial cushion, very high reliance on per-pupil revenues, and charter renewal risk are credit concerns common in all charter school transactions. FACTORS THAT MAY TRIGGER A RATING ACTION UNEXPECTED ENROLLMENT VOLATILITY: Preliminary data indicates the Financed Schools will meet or exceed fiscal 2013 (fall 2012) base case enrollment projections. Any unanticipated enrollment shortfalls without appropriate management budgetary response could trigger negative rating action; CHARTER OR MANAGEMENT CONTRACT NONRENEWAL: Charter and EMO contracts with the Financed Schools expire at various points over the next five years, including one charter expiring this June. Fitch anticipates regular renewals, but any failures, would likely trigger a negative rating action. CREDIT PROFILE MEETING EXPECTATIONS Combined enrollment at the Financed Schools of 3,162 (as of April 17, 2012) exceeded the base case projection for fiscal 2012 by 6.9%. Positive variances at several schools (primarily Duval Charter School at Baymeadows and Renaissance Charter School at Coral Springs) offset shortfalls at others. Fitch reviewed interim financial statements for the Financed Schools (through Dec. 31, 2011) and anticipates fiscal 2012 year- end performance close to the base case projection of breakeven (adjusting for the use of capitalized interest). Higher than budgeted operating expenses, not uncommon for startup charter schools, offset the modestly above-projection consolidated enrollment growth. As calculated by Fitch, projected fiscal 2012 net income available for debt service (including capitalized interest) would cover transaction-defined MADS by 0.93 times (x), in line with the base case. CSUSA projects just over 1x coverage of transaction-defined MADS based on the calculation described in bond documents. This includes add-back of one-half of CSUSA's management fee. Fitch notes that legally, the entire fee is subordinated to debt service. CONTINUED GROWTH REQUIRED CSUSA's preliminary budgets for the Financed Schools rely on a substantial 55.4% growth in enrollment from the current 3,162. The EMO's history of successful new school ramp-ups and promising early enrollment trends data for the Financed Schools mitigates some of the growth-related risk. Nonetheless, Fitch views reliance on such substantial enrollment growth as a fundamentally non-investment grade characteristic for charter schools. Enrollment stabilization at the Financed Schools within the next three to four years as originally projected, combined with improved financial performance, may lead to positive rating movement. PRUDENT FINANCIAL MANAGEMENT In addition to enrollment growth, CSUSA's fiscal 2013 budgets will also incorporate the state of Florida's (general obligation bonds rated 'AAA' with a Negative Rating Outlook by Fitch) adopted budget for next year. While the budget reportedly increases average per-pupil funding 2.4% across the state, CSUSA projects the Financed Schools will see a 2% increase given their anticipated student populations. In the event of unanticipated mid-year reductions, or enrollment shortfalls, Fitch believes CSUSA could implement offsetting expense reductions to maintain budgetary balance. The EMO centralizes fiscal oversight for its managed schools and has a history of adjusting expenses to match changes in state funding. MANAGEABLE RENEWAL RSK Keys Gate Charter School (KGCS)'s charter with Miami-Dade County Public Schools (M-DCPS) expires on June 30. Fitch received feedback from a M-DCPS representative, indicating the working relationship with KGCS is stable with no significant outstanding issues. CSUSA reports that M-DCPS's charter review committee will recommend renewal of the KGCS charter at the M-DCPS School Board's May 16 meeting. An unexpected denial of renewal would likely trigger a negative rating action by Fitch. Representatives from the chartering agencies for the other Financed Schools (M-DCPS, Broward County Public Schools, and Duval County Public Schools) all reported stable working relationships with the Financed Schools they authorize. There were no reports of unresolved issues, or potential challenges to future charter renewals. Fitch will continue to monitor charter renewal applications and the Financed Schools' relationships with their authorizers. FINANCED CONSTRUCTION NEARLY COMPLETE All but one of the series 2010 bond-financed projects opened in fall 2011. Construction on the final facility for Hollywood Academy of Arts and Sciences and the related middle school began in late 2011 as planned. CSUSA reports the project is on schedule and within budget for a July 15 completion, well in advance of the start of the new school year. GENERAC POWER: S&P Puts 'BB-' Corp. Credit Rating on Watch Neg -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Waukesha, Wisc.-based Generac Power Systems Inc., including the 'BB-' corporate credit rating, on CreditWatch with negative implications. "The CreditWatch listing indicates we could either affirm or lower the rating following the completion of our analysis," S&P said. "The CreditWatch listing follows Generac's announcement that it intends to issue $1.2 billion of new debt to repay existing debt as well as fund a special dividend to shareholders. Our base-case scenario for 2012 assumes that Generac's operating results in 2012 will be aided by storm activity in 2011, which we believe will translate into greater sales of higher margin residential standby generators. However, we previously assumed that leverage would be 3x or less by year-end, given around $575 million of balance sheet debt. As a result of the significant increase in debt, leverage will likely rise to around 5.5x by year-end 2012, which is more in line with an 'aggressive' financial risk profile and a lower rating," S&P said. "Generac primarily manufacturers standby and portable generators for residential, industrial, light commercial, and telecommunications use in the U.S. The company derives about half of its sales from the residential generator market, where customer purchases are largely discretionary and driven by storm preparedness and the threat of power outages due to an aging electrical grid," S&P said. "In resolving the CreditWatch listing, Standard & Poor's will assess Generac's operating strategies and financial policy in light of the significant amount of new debt and the special dividend, as well as the impact of these actions on the company's credit measures," S&P said. "Based on the current proposal, it is likely that we would lower the corporate credit rating by one notch when the company completes its refinancing transaction," said Standard & Poor's credit analyst Megan Johnston. GEORGIA GULF: S&P Affirms 'BB-' Corp. Credit Rating; Off Watch Pos ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed all its ratings, including its 'BB-' corporate credit rating, on Atlanta-based Georgia Gulf Corp. "At the same time, we removed them from CreditWatch where we had placed them with positive implications on Jan. 17, 2012. The outlook is stable," S&P said. "Our rating actions on Georgia Gulf follow higher-rated Westlake Chemical Corp.'s [BBB-/Stable/--] withdrawal of its unsolicited offer to acquire Georgia Gulf," said Standard & Poor's credit analyst Cynthia Werneth. "While the ratings on Georgia Gulf were on CreditWatch, we raised them based on its improved standalone credit quality." "The ratings reflect our assessment of Georgia Gulf's business profile as 'weak' and financial profile as 'significant'," S&P said. "Georgia Gulf's credit measures have strengthened significantly through earnings improvement and debt reduction since 2009, when it completed a debt restructuring that included a debt for equity exchange. As of March 31, 2011, total adjusted debt was about $620 million, with debt to EBITDA of about 2.5x and funds from operations (FFO) to debt of about 30%. We adjust debt to include capitalized operating leases as well as tax-effected postretirement, environmental, and asset retirement liabilities. At the current ratings, we expect FFO to debt to average 20% to 25%. As a result, there is cushion in the ratings for earnings and cash flow volatility, as well as seasonal and price-related working capital increases. The company should also be able to execute some debt-funded capital spending or acquisitions while maintaining credit quality," S&P said. "Based in Atlanta, Georgia Gulf is an integrated vinyls and building materials producer operating a primarily commodity business with some volatility in earnings and cash flow. Georgia Gulf is an integrated producer of PVC building and home improvement products, PVC resin, and aromatic chemicals, with trailing-12-month revenue of nearly $3.3 billion. It also sells caustic soda, a co-product resulting from its backward integration into chlorine, which is used in PVC production. Georgia Gulf is among the top four U.S. producers of PVC. It also benefits from favorable long-term demand growth prospects linked to economic output and the housing market, and a significant degree of backward integration into major inputs (like chlorine) and value- added PVC products. Relative to its competitors, it is also well forward-integrated into PVC end products (window and door components, siding, and pipe), mainly as a result of its 2006 acquisition of the Royal Group. Still, demand remains susceptible to cyclical downturns, and operating performance is vulnerable to large supply additions by competitors. PVC exports offset ongoing weakness in domestic demand, but depend at least partly on the continuation of low ethylene prices in North America and favorable exchange rates," S&P said. "The outlook is stable. At the current ratings we expect Georgia Gulf's FFO to debt to average 20% to 25%. Despite industry cyclicality and potentially significant capital spending to expand chlorine capacity, we believe this performance level is sustainable based on favorable natural gas costs, prospects for North American construction markets to gradually strengthen, and our expectation that Georgia Gulf will use debt prudently to support modest growth initiatives in its core businesses," S&P said. "We could lower the ratings in the unlikely event that growth initiatives strain credit metrics beyond our expectations (resulting in FFO to debt below 20% with no prospects for improvement). Given Georgia Gulf's current business risk profile, FFO to debt would have to average above 30% for us to consider an upgrade. We view this as unlikely in the near term given the capital expansion that management is currently considering," S&P said. GIBSON ENERGY: Moody's Issues Correction to April 26 Release ------------------------------------------------------------ Moody's Investors Service issued a correction to the April 26, 2012 ratings release of Gibson Energy Inc. Moody's upgraded Gibson Energy Inc.'s Corporate Family Rating (CFR) to Ba3 from B1, and upgraded the company's senior secured bank credit facility to Ba3 from B1. The Speculative Grade Liquidity rating was changed to SGL-3 from SGL-2. The outlook is stable. "The upgrade reflects Gibson's growth in the terminals and pipelines business, enhanced trucking presence in the United States through the Taylor acquisition, and significant improvement in the company's debt metrics," said Terry Marshall, Moody's Senior Vice President. "Gibson's EBITDA has increased significantly over the last 12 to 18 months. Moody's believes that the company's terminals and pipelines, and trucking segments will remain sufficiently healthy through 2013 to uphold the Ba3 CFR." Downgrades: Issuer: Gibson Energy Inc. Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Upgrades: Issuer: Gibson Energy Inc. Probability of Default Rating, Upgraded to Ba3 from B1 Corporate Family Rating, Upgraded to Ba3 from B1 Issuer: Gibson Energy ULC Senior Secured Bank Credit Facility, Upgraded to a range of Ba3, LGD3, 39% from a range of B1, LGD3, 43% Senior Secured Bank Credit Facility, Upgraded to a range of Ba3, LGD3, 39% from a range of B1, LGD3, 43% Outlook Actions: Issuer: Gibson Energy Inc. Outlook, Changed To Stable From Positive Issuer: Gibson Energy ULC Outlook, Changed To Stable From Positive Withdrawals: Issuer: Gibson Energy ULC Senior Secured Regular Bond/Debenture, Withdrawn, previously rated Ba3, LGD3, 39% Senior Secured Regular Bond/Debenture, Withdrawn, previously rated Ba3, LGD3, 39% Ratings Rationale Gibson's Ba3 CFR reflects the company's small size, and price and volume risks inherent in the company's business segments, particularly with respect to its marketing and trading activities, which expose the company to market risks resulting from movements in commodity prices between the time volumes are purchased and sold. The marketing business has a track record of consistent if modest profitability, and Gibson's experienced management team has hedged price risk inherent in this business segment appropriately to date. The rating also considers the company's low leverage, which Moody's expects to remain below 4.0x following significant improvement since 2010 because of considerable EBITDA growth. The rating is further supported by Gibson's diversified operations in several midstream segments, solid market position in each of its principal business areas, and proximity and ability to service the oil sands industry. The rating also considers the exit of Riverstone Holdings LLC, a private equity firm, from the company reducing the likelihood of leverage increasing. The SGL-3 Speculative Grade Liquidity rating indicates adequate liquidity through mid 2013. During this period Moody's expects Gibson to generate C$230 million of negative free cash flow, which will be funded with cash, revolver drawings and possibly equity. At December 31, 2011 Gibson had about C$65 million of cash and C$215 million available, after C$60 million in letters of credit, under its C$275 million senior secured revolving credit facility expiring June, 2016. The revolver has two financial covenants (maximum senior secured leverage ratio of 5:1 with two step-downs; minimum interest coverage ratio of 2.5:1 with two step-ups), neither of which is expected to pose a compliance issue. Gibson's alternative sources of liquidity are limited principally to the sale of existing properties, which are largely encumbered and would require the approval of secured lenders. The secured revolver and term loan B are rated at the Ba3 CFR, reflecting both the overall probability of default, to which Moody's assigns a PDR of Ba3, and a loss given default (LGD) of LGD3 (39%) using Moody's Loss Given Default Methodology. Moody's LGD model indicates a rating of Ba2 for the secured revolver and term loan B, but Moody's applies a one notch override to Ba3 given the large and volatile trade payables tied to the company's marketing business. This large trade payables balance reflects the significant weighting of purchase and sale activity. Given that approximately 50% of these payables are netted against receivables on a monthly basis, only 50% of trade payables are included in the LGD model. The stable outlook reflects Gibson's low leverage, solid EBITDA, and diversification across several midstream segments in western Canada and in the United States. While an upgrade is unlikely in the near term, the rating could be considered for an upgrade if Gibson expands the scale and scope of its operations, increasing EBITDA to over US$400 million per annum, while maintaining debt to EBITDA below 3.0x. The rating could be downgraded if Gibson's financial leverage increases due to debt funded capital expenditures. More specifically, if debt to EBITDA cannot be sustained under 5.0x a ratings downgrade could result. A downgrade is also likely if the company produces any material losses from the marketing segment. The principal methodology used in rating Gibson Energy was the Global Midstream Energy Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Gibson Energy Inc. is a Calgary, Alberta-based midstream energy company engaged in the transportation, storage, blending, processing, marketing and distribution of crude oil and related products. Gibson Energy ULC is a wholly-owned subsidiary of publicly-traded Gibson Energy Inc., which will provide a downstream guarantee for the rated debt. GLOBAL FOOD: Incurs $658,000 Net Loss in First Quarter ------------------------------------------------------ Global Food Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $657,557 on $29,736 of revenue for the three months ended March 31, 2012, compared with a net loss of $998,194 on $89,566 of revenue for the same period during the prior year. Global Food reported a net loss of $3.68 million in 2011, compared with a net loss of $3.74 million in 2010. The Company's balance sheet at March 31, 2012, showed $1.11 million in total assets, $4.46 million in total liabilities, all current, and a $3.35 million total stockholders' deficit. Following the 2011 results, Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport Beach, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted the Company has an accumulated deficit of approximately $68,000,000 at Dec. 31, 2011, has negative cash flow from operations of approximately $2,800,000 for the year ended Dec. 31, 2011, and has negative working capital at Dec. 31, 2011. The Company's ability to continue operations is predicated on its ability to raise additional capital and, ultimately, to achieve profitability. A copy of the Form 10-Q is available for free at: http://is.gd/j7syPC About Global Food Headquartered in Hanford, California, Global Food Technologies, Inc., is a life sciences company focused on food safety processes for the food processing industry by using its proprietary scientific processes to substantially increase the shelf life of commercially packaged seafood and to make those products safer for human consumption. The Company has developed a process using its technology called the "iPuraT Food Processing System". The System is installed in processor factories in foreign countries with the product currently sold in the United States. GUITAR CENTER: S&P Affirms 'B-' Corp. Credit Rating; Outlook Neg ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its ratings outlook on Westlake Village, Calif.-based musical instrument retailer Guitar Center Holdings Inc. to negative from stable. "At the same time we affirmed all existing rating on the company, including our 'B-' corporate credit rating," S&P said. "We rate subsidiary Guitar Center Inc.'s $375 million revolver due 2016 'B+' with a recovery rating of '1', indicating our expectation for high (90% to 100%) recovery in the event of a payment default. We rate the company's $650 million term loan due 2017 'B-' with a recovery rating of '3', indicating our expectation for meaningful (50% to 70%) recovery of principal in the event of a payment default," S&P said. "In addition, we rate both Guitar Center Inc.'s $375 million cash interest-paying senior unsecured notes due 2017 and Guitar Center Holdings' $401.758 million senior unsecured notes due 2018 'CCC'. Both notes have a recovery rating of '6', indicating our expectation for negligible (0% to 10%) recovery in the event of a payment default," S&P said. "Our ratings on Guitar Center reflect our assessment that the company's liquidity is 'less than adequate' but sufficient to avoid a default within two years," S&P said. "The March 2011 amendment of the company's capital structure allowed it to accrue 50% of interest on the Holdco notes for the next four payment periods, the last being in October 2012. Subsequently, the company will have to pay cash interest on these notes with the first payment due in April 2013. In addition, Guitar Center must make a $134.7 million AHYDO payment in April 2013. This cash payment represents accrued payment-in-kind (PIK) interest of $189.7 million on the company's Holdco notes that has been added to the principal, minus the first payment that the company made in the amount of $55 million. As such, we believe the company will have to borrow under its asset-based loan (ABL) revolver to meet its financing and operating needs during 2013. In our view, this will result in cushion to its net senior leverage covenant narrowing to about 10%," S&P said. "We view Guitar Center's financial risk profile as 'highly leveraged,' reflecting its high debt levels resulting from 2007 LBO transaction and weak cash flow protection measures," said Standard & Poor's credit analyst Mariola Borysiak. "Our rating outlook is negative and reflects our less-than- adequate liquidity assessment. We anticipate the company will have to borrow under its revolver to meet its financing and operating needs during 2013. We therefore believe that cushion to the company's senior secured leverage will narrow to about 10%," S&P said. "A downgrade could occur if lower-than-expected EBITDA growth leads us to believe that the company could breach its financial covenants," S&P said. "Although unlikely in the near term, a positive rating action would entail our reassessment of liquidity back to 'adequate' and leverage decreasing toward 6x," S&P said. GUSHAN ENVIRONMENTAL: Gets NYSE Notice of Non-Compliance -------------------------------------------------------- Gushan Environmental Energy Limited, a producer of biodiesel and a manufacturer of copper products in China, disclosed on May 1, 2012, it received a letter from the New York Stock Exchange notifying the Company that it was not in compliance with one of the NYSE's standards for continued listing of the Company's American depositary shares on the exchange. Specifically, the NYSE indicated that it considers the Company to be "below criteria" because, as of Dec. 31, 2011, its average global market capitalization over a consecutive 30 trading-day period was less than $50 million and, at the same time, its total stockholders' equity was less than $50 million. On April 27, 2012, the Company reported that as of Dec. 31, 2011, its total shareholders' equity attributable to the Company was approximately $36.2 million. As of Dec. 31, 2011, the Company's global market capitalization over a consecutive 30 trading-day period was $27.5 million. Under NYSE continued listing rules, the Company has 90 days from the receipt of the letter to submit a plan advising the NYSE of definitive action the Company has taken, or is taking, that would bring it into conformity with the applicable standards within 18 months of receipt of the letter. If the NYSE staff determines that the Company has not made a reasonable demonstration of an ability to come into conformity with the applicable standards within 18 months, the NYSE staff will promptly initiate suspension and delisting procedures. Otherwise, if the NYSE staff accepts the plan, the Company will be subject to semi-annual review by the NYSE staff for compliance with this plan until either the Company is able to demonstrate that it has returned to compliance for a period of two consecutive quarters or the expiration of the 18 month period. The NYSE staff will promptly initiate suspension and delisting procedures if the Company fails to meet the continued listing standards at the end of the 18 month period. The Company currently intends to submit such a plan and is exploring alternatives for curing the deficiency and regaining compliance with the NYSE's continued listing standards. The Company's business operations and Securities and Exchange Commission reporting requirements are unaffected by this letter. The Company's ADSs will remain listed on the NYSE under the symbol GU but will be assigned a ".BC" indicator by the NYSE to signify that the Company is currently not in compliance with the NYSE's continued listing standards. About Gushan Environmental Environmental Energy Limited produces biodiesel, a renewable, clean-burning and biodegradable fuel and a raw material used to produce chemical products, primarily from used cooking oil, and by-products from biodiesel production, including glycerine and plant asphalt. Gushan sells biodiesel directly to users, such as marine vessel operators and chemical factories, as well as to petroleum wholesalers and individual retail gas stations. The Company has seven production facilities, located in the Sichuan, Hebei, Fujian and Hunan provinces and in Beijing, Shanghai and Chongqing, with a combined annual production capacity of 490,000 tons. Gushan's Sichuan production facility is currently in operation. Gushan also operates a copper products business in China which manufactures copper rods, copper wires, copper granules and copper plates primarily from recycled copper. Currently, the copper products business has two plants, with a daily production capacity of approximately 210 tons of recycled copper products. HARCH CLO III: Moody's Raises Rating on Class D Notes From 'Ba1' ---------------------------------------------------------------- Moody's Investors Service has upgraded the ratings of the following notes issued by Harch CLO III Limited: U.S. $26,000,000 Class B Floating Rate Notes, Due 2020 Notes, Upgraded to Aaa (sf); previously on December 12, 2011 Upgraded to Aa1 (sf); U.S. $20,000,000 Class C Deferrable Floating Rate Notes, Due 2020 Notes, Upgraded to A1 (sf); previously on December 12, 2011 Upgraded to A3 (sf); U.S. $19,000,000 Class D Deferrable Floating Rate Notes, Due 2020 Notes, Upgraded to Baa3 (sf); previously on September 1, 2011 Upgraded to Ba1 (sf). Ratings Rationale According to Moody's, the rating actions taken on the notes are primarily a result of delevering of the senior notes resulting in an increase in the transaction's overcollateralization ratios since the rating action in December 2011. Moody's notes that the Class A Notes have been paid down by approximately 37.7% or $48 million since the last rating action. Based on the latest trustee report dated April 20, 2012, the Class A/B, Class C, Class D, and Class E overcollateralization ratios are reported at 136.7%, 122.0%, 110.7% and 103.2%, respectively, versus December 2011 levels of 131.1%, 119.0%, 109.4% and 102.8%, respectively. Moody's notes that its analysis takes into account (1) the current constraints around reinvesting due to the failure to meet certain reinvestment criteria and (2) the possibility that the deal will be allowed to reinvest in additional collateral obligations if the restrictions on reinvesting are removed. In its analysis Moody's assigned a higher likelihood that the deal will be able to reinvest principal proceeds. As of the April 2012 trustee report, the principal collections account balance is $31.3 million. Due to the unique constraints around the deal's reinvestment capability, Moody's analyzed two alternative scenarios for this transaction. In the first case (the "static case"), Moody's assumed that the current outstanding principal collections along with future amortizations are held in a reserve account until the end of the reinvestment period. After the end of the reinvestment period, the cash is released from the reserve account for application in accordance with the priority of payments. Moody's also analyzed a second scenario where reinvesting is permitted (the "reinvesting case"). Due to the uncertainty in the composition of the new asset pool in the reinvesting case, Moody's chose a combination of WARF, WAS, and Diversity that is achievable, in Moody's view, when reinvstment is reinstated, taking into account both the collateral covenants and the additional diversity benefits from reinvesting the current balance in the principal collections account. Moody's also extended the weighted average life by one year from the current weighted average life in Moody's analysis, consistent with the covenant. In the reinvesting case, Moody's assumed that the additional collateral obligations purchased with principal collections will have a credit risk profile which is no worse than the portfolio parameters of the current pool. Due to the impact of revised and updated key assumptions referenced in "Moody's Approach to Rating Collateralized Loan Obligations" published in June 2011, key model inputs used by Moody's in its analysis, such as par, weighted average rating factor, diversity score, and weighted average recovery rate, may be different from the trustee's reported numbers. In both the static and reinvesting case, Moody's analyzed the underlying collateral pool to have a performing par and principal proceeds balance of $209.0 million (the principal proceeds of $31.3 million are assumed to be held in a reserve account until the end of the reinvestment period in the static case, and are assumed to be used to reinvest in additional collateral in the reinvesting case), a defaulted par balance of $0.6 million, a WARF of 2646, a weighted average recovery rate upon default of 48.62%. In the static case, Moody's assumes a WAL of 4.0 years, a weighted average default probability of 17.32%, and a diversity score of 41. In the reinvesting case, Moody's assumes a WAL of 5.0 years, a weighted average default probability of 19.82%, and a diversity score of 45. The default and recovery properties of the collateral pool are incorporated in cash flow model analysis where they are subject to stresses as a function of the target rating of each CLO liability being reviewed. The default probability is derived from the credit quality of the collateral pool and Moody's expectation of the remaining life of the collateral pool. The average recovery rate to be realized on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance trends and collateral manager latitude for trading the collateral are also factors. Harch CLO III Limited, issued on April 17, 2007, is a collateralized loan obligation backed primarily by a portfolio of senior secured loans. The principal methodology used in this rating was "Moody's Approach to Rating Collateralized Loan Obligations" published in June 2011. Moody's modeled the transaction using the Binomial Expansion Technique, as described in Section 2.3.2.1 of the "Moody's Approach to Rating Collateralized Loan Obligations" rating methodology published in June 2011. In addition to the base case analysis, Moody's also performed sensitivity analyses to test the impact on all rated notes of various default probabilities. Below is a summary of the impact of different default probabilities (expressed in terms of WARF levels) on all rated notes (shown in terms of the number of notches' difference versus the current model output, where a positive difference corresponds to lower expected loss), assuming that all other factors are held equal: Moody's Adjusted WARF -- 20% (2117) Class A-1: 0 Class A-2: 0 Class B: 0 Class C: 3 Class D: 1 Class E: 1 Moody's Adjusted WARF + 20% (3169) Class A-1: 0 Class A-2: 0 Class B: -1 Class C: -1 Class D: -1 Class E: -3 Sources of additional performance uncertainties are described below: 1) Currently, a substantial proportion of the portfolio is held in cash due to high prepayment levels in the loan market and the deal's inability to reinvest. In its reinvesting case analysis, Moody's assumed that the cash would be reinvested primarily in senior secured loans. The deal may also be impacted by the timing and pace of any potential reinvesting in the future. 2) Weighted average life: The notes' ratings are sensitive to the weighted average life assumption of the portfolio, which may be extended due to the manager's decision to reinvest into new issue loans or other loans with longer maturities and/or participate in amend-to-extend offerings. Moody's tested for a possible extension of the actual weighted average life in its reinvesting case analysis. 3) Other collateral quality metrics: The deal will likely be able to reinvest after the rating actions, and the manager will have the ability to deteriorate the collateral quality metrics' existing cushions against the covenant levels. In its reinvesting case analysis, Moody's analyzed the impact of assuming the worse of reported and covenanted values for WARF, WAS, WAC, and diversity score. However, as part of the base case, Moody's considered spread levels higher than the covenant levels due to the large difference between the reported and covenant levels. Moody's also considered diversity levels higher than the covenant levels reflecting additional diversity benefits from reinvesting the current balance in the principal collections account. HANMI FINANCIAL: Files Form 10-Q; Posts $7.3MM Net Income in Q1 --------------------------------------------------------------- Hanmi Financial Corporation filed with the U.S. Securities and Exchange Commission its quarterly on Form 10-Q disclosing net income of $7.34 million on $30.29 million of total interest and dividend income for the three months ended March 31, 2012, compared with net income of $10.43 million on $33.87 million of total interest and dividend income for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $2.77 billion in total assets, $2.47 billion in total liabilities and $293.71 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/qhmPqd About Hanmi Financial Headquartered in Los Angeles, California, Hanmi Financial Corp. (Nasdaq: HAFC) -- http://www.hanmi.com/-- is the holding company for Hanmi Bank, a state chartered bank with headquarters located at 3660 Wilshire Boulevard, Penthouse Suite A, in Los Angeles. Hanmi Bank provides services to the multi-ethnic communities of California, with 27 full-service offices in Los Angeles, Orange, San Bernardino, San Francisco, Santa Clara and San Diego counties, and a loan production office in Washington State. Going Concern At Dec. 31, 2011, the Bank had a tangible stockholders' equity to total tangible assets ratio of 12.48 percent. Accordingly, the Company is in compliance with the Final Order. Pursuant to the Written Agreement, the Company is also required to increase, and is required to maintain, sufficient capital at the Company and at the Bank that is satisfactory to the Federal Reserve Bank. Should the Company's asset quality erode and require significant additional provision for credit losses, resulting in consistent net operating losses at the Bank, the Company's capital levels will decline and the Company will need to raise capital to satisfy its agreements with the regulators and any future regulatory orders or agreements the Company may be subject to. The Bank is subject to additional regulatory oversight as a result of a formal regulatory enforcement action issued by the Federal Reserve Bank and the California Department of Financial Institutions. On Nov. 2, 2009, the members of the Board of Directors of the Bank consented to the issuance of the Final Order from the California Department Financial Institutions. On the same date, the Company and the Bank entered into the Written Agreement with the Federal Reserve Bank. Under the terms of the Final Order and the Written Agreement, the Bank is required to implement certain corrective and remedial measures under strict time frames. HAYDEL PROPERTIES: Can Hire Alfonso for Sale of 9424 Three Rivers ----------------------------------------------------------------- Haydel Properties, LP, obtained permission from the U.S. Bankruptcy Court for the Southern District of Mississippi to employ Alfonso Realty, Inc., doing business as Coldwell Bank Alfonso Realty, as real estate broker to represent the Debtor in the sale of 9424 Three Rivers Road, Gulfport, Mississippi during the pendency of the Chapter 11 proceeding. As reported by the Troubled Company Reporter on May 1, 2012, the professional services to be rendered by Alfonso Realty will include, but not is limited to the showing of 9424 Three Rivers parcel and assisting in the closing of the sale of said parcel. Haydel Properties LP, in Biloxi, Mississippi, filed for Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50048) on Jan. 11, 2012. Judge Katharine M. Samson presides over the case. Patrick A. Sheehan, Esq., at Sheehan & Johnson, PLLC; and Robert Gambrell, Esq., at Gambrell & Associates, PLLC, serve as the Debtor's counsel. Christy Pickering serves as accountant. The Debtor disclosed $11.7 million in assets and $7.24 million in liabilities as of the Chapter 11 filing. The petition was signed by Michael D. Haydel, manager of general partner. HAYDEL PROPERTIES: Can Hire Schwartz Orgler to Handle Assets Sale ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Mississippi granted Haydel Properties, LP, authorization to employ Schwartz, Orgler & Jordan, PLLC, as special counsel. As reported by the Troubled Company Reporter on May 2, 2012, the Debtor expects to sell different parcels of real property during the course of the Chapter 11 Proceeding. SOJ will represent the Debtor in the sale of 9424 Three Rivers Road, Gulfport, Mississippi and the sale of any other parcels of real property during the pendency of the Chapter 11 proceeding. Haydel Properties LP, in Biloxi, Mississippi, filed for Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50048) on Jan. 11, 2012. Judge Katharine M. Samson presides over the case. Patrick A. Sheehan, Esq., at Sheehan & Johnson, PLLC; and Robert Gambrell, Esq., at Gambrell & Associates, PLLC, serve as the Debtor's counsel. Christy Pickering serves as accountant. The Debtor disclosed $11.7 million in assets and $7.24 million in liabilities as of the Chapter 11 filing. The petition was signed by Michael D. Haydel, manager of general partner. HAYDEL PROPERTIES: Court Okays Mark Cumbest as Real Estate Broker ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Mississippi granted Haydel Properties, LP, permission to employ Mark Cumbest as real estate broker. As reported by the Troubled Company Reporter on May 1, 2012, Mr. Cumbest's professional services include listing for sale, marketing and selling the Debtor's real property. The Debtor agreed, subject to a Court approval, to pay Mr. Cumbest an 8% of the gross sale price of each property sold, to be paid at closing. Haydel Properties LP, in Biloxi, Mississippi, filed for Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50048) on Jan. 11, 2012. Judge Katharine M. Samson presides over the case. Patrick A. Sheehan, Esq., at Sheehan & Johnson, PLLC; and Robert Gambrell, Esq., at Gambrell & Associates, PLLC, serve as the Debtor's counsel. Christy Pickering serves as accountant. The Debtor disclosed $11.7 million in assets and $7.24 million in liabilities as of the Chapter 11 filing. The petition was signed by Michael D. Haydel, manager of general partner. HAYDEL PROPERTIES: Has OK to Hire Owen & Co. as Real Estate Broker ------------------------------------------------------------------ Haydel Properties, LP, obtained authorization from the U.S. Bankruptcy Court for the Southern District of Mississippi to employ Owen & Co., LLC doing business as Owen & Co. Real Estate, as a real estate broker. As reported by the Troubled Company Reporter on May 1, 2012, the professional services of Owen & Co. will include: a. listing and showing of any parcels of real property in which the Debtor wishes to sell; b. assisting the Debtor in negotiations with any prospective purchasers; and c. assisting in the closing of any sales procured by Owen & Co. Haydel Properties LP, in Biloxi, Mississippi, filed for Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50048) on Jan. 11, 2012. Judge Katharine M. Samson presides over the case. Patrick A. Sheehan, Esq., at Sheehan & Johnson, PLLC; and Robert Gambrell, Esq., at Gambrell & Associates, PLLC, serve as the Debtor's counsel. Christy Pickering serves as accountant. The Debtor disclosed $11.7 million in assets and $7.24 million in liabilities as of the Chapter 11 filing. The petition was signed by Michael D. Haydel, manager of general partner. HEALTH DISTILLERS: Case Summary & 4 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Health Distillers International, Inc. Bda. Buena Vista 167 Quisqueya Hato Rey, PR 00917 Bankruptcy Case No.: 12-03574 Chapter 11 Petition Date: May 7, 2012 Court: U.S. Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Carmen D. Conde Torres, Esq. C. CONDE & ASSOC. 254 San Jose Street, 5th Floor San Juan, PR 00901-1523 Tel: (787) 729-2900 Fax: (787) 729-2203 E-mail: notices@condelaw.com Scheduled Assets: $4,520,825 Scheduled Liabilities: $3,024,332 A copy of the Company's list of its four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb12-36165.pdf The petition was signed by Andrew Bert Foti, president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- International Home Products, Inc. 12-02997 04/19/12 HCSB FINANCIAL: Authorized Common Shares Hiked to $500 Million -------------------------------------------------------------- The 2012 annual meeting of shareholders of HCSB Financial Corporation was held on April 26, 2012, at the Center for Health and Fitness at 3207 Casey Street, Loris, South Carolina. The meeting was adjourned and reconvened on May 8, 2012, for the approval of the final proposal, to amend the Company's Articles of Incorporation. At the annual meeting, the stockholders approved the amendment to the Company's Articles of Incorporation to increase the number of authorized shares of common stock from 10,000,000 shares to 500,000,000 shares. About HCSB Financial Loris, South Carolina-based HCSB Financial Corporation was incorporated on June 10, 1999, to become a holding company for Horry County State Bank. The Bank is a state chartered bank which commenced operations on Jan. 4, 1988. From its 13 branch locations, the Bank offers a full range of deposit services, including checking accounts, savings accounts, certificates of deposit, money market accounts, and IRAs, as well as a broad range of non-deposit investment services. During the third quarter of 2011, the Bank closed its Covenant Towers branch located at Myrtle Beach. All deposits were transferred to the Bank's Myrtle Beach branch and the Bank does not expect any disruption of service in that market for its customers. HCSB reported a net loss of $29.01 million in 2011, compared with a net loss of $17.27 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $535.69 million in total assets, $540.91 million in total liabilities and a $5.21 million total shareholders' deficit. For 2011, Elliott Davis, LLC, in Columbia, South Carolina, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses that have eroded regulatory capital ratios and the Company's wholly owned subsidiary, Horry County State Bank, is under a regulatory Consent Order with the Federal Deposit Insurance Corporation (FDIC) that requires, among other provisions, capital ratios to be maintained at certain levels. As of Dec. 31, 2011, the Company is considered significantly undercapitalized based on their regulatory capital levels. Consent Order On Feb. 10, 2011, the Bank entered into the Consent Order with the FDIC and the State Board. The Consent Order conveys specific actions needed to address the Bank's current financial condition, primarily related to capital planning, liquidity/funds management, policy and planning issues, management oversight, loan concentrations and classifications, and non-performing loans. The Company believes it is currently in substantial compliance with the Consent Order except for the requirement to achieve and maintain, within 150 days from the effective date of the Consent Order, Total Risk Based capital at least equal to 10% of risk- weighted assets and Tier 1 capital at least equal to 8% of total assets. At Sept. 30, 2011, the Bank was categorized as "significantly undercapitalized." Pursuant to the requirements under the Consent Order, the Company submitted its capital plan to the FDIC for review. The FDIC has directed the Company to revise the capital plan and, in addition, to develop a capital restoration plan, which the Company has resubmitted. HOLLIFIELD RANCHES: Can Access $1.6-Mil JR Simplot Secured Debt --------------------------------------------------------------- The Hon. Jim D. Pappas of the Bankruptcy Court for the District of Idaho authorized Hollifield Ranches, Inc., to incur secured debt. The terms of the secured transaction are: Lender: Simplot Amount of Loan: Not to exceed $1.6 million Purpose: For fertilizer, chemicals, to spray crops and fuel Interest rate: 4% Date of Repayment: On demand, but not later than Dec. 31, 2012 Collateral: First and paramount lien against the Debtor's crops The amount of crop proceeds expected from the 2012 farming season is projected to be $6,849,000. KeyBank has a lien on the same collateral. Judge Pappas orders that KeyBank's lien will be subordinate to the J R Simplot lien as to crops and crop proceeds. About Hollifield Ranches Hansen, Idaho-based Hollifield Ranches Inc. filed for Chapter 11 bankruptcy (Bankr. D. Idaho Case No. 10-41613) on Sept. 9, 2010. Hollifield Ranches owns a farming, cattle and dairy operation, and allegedly is owed money for potatoes it sent to Cummins Family Produce, Inc., for processing. Brent T. Robinson, Esq., in Rupert, Idaho, represents the Debtor. The Debtor estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. The Debtor, which is run by Terry Hollifield, was forced to seek bankruptcy after its dairy business encountered cash flow problems in 2008 when the cost of feed was very high, and its cattle business had problems with the falling price for livestock. J. Justin May, Esq., at May, Browning & May, represents the Official Committee of Unsecured Creditors. HOLLIFIELD RANCHES: Pegs KeyBank Claim at $14.1 Million ------------------------------------------------------- Hollifield Ranches Inc. seeks approval of a stipulation with KeyBank National Association providing for these terms: -- Hollifield Ranches Inc., White Gold Dairy, LLC, Double H Cattle L.P., Hollifield Ranches Inc., and Terry and Carol Hollifield, as Borrowers, will be jointly and severally liable for the totality of the claim of KeyBank, until the Claim of KeyBank is paid in full. -- The amount of the KeyBank Claim is stipulated to be $14.1 million as of May 2, 2012. The Claim will accrue interest at the rate of Key Bank prime plus 2%. -- After Court approval, the Debtor or Entities will immediately pay over to KeyBank the sum of $1.2 million, which KeyBank will apply to its Claim. About Hollifield Ranches Hansen, Idaho-based Hollifield Ranches Inc. filed for Chapter 11 bankruptcy (Bankr. D. Idaho Case No. 10-41613) on Sept. 9, 2010. Hollifield Ranches owns a farming, cattle and dairy operation, and allegedly is owed money for potatoes it sent to Cummins Family Produce, Inc., for processing. Brent T. Robinson, Esq., in Rupert, Idaho, represents the Debtor. The Debtor estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. The Debtor, which is run by Terry Hollifield, was forced to seek bankruptcy after its dairy busine2ss encountered cash flow problems in 2008 when the cost of feed was very high, and its cattle business had problems with the falling price for livestock. J. Justin May, Esq., at May, Browning & May, represents the Official Committee of Unsecured Creditors. HOLLIFIELD RANCHES: To Liquidate White Gold Dairy ------------------------------------------------- Hollifield Ranches Inc. asks the Bankruptcy Court for approval of a stipulation to commence the liquidation or sale or lease of all assets of the estate of White Gold Dairy. The Liquidation proceeds of the real property and all tangible personal property assets necessary for the lease or sale of White Gold Dairy as a "turn-key" dairy are designated as the "MetLife Collateral", which includes a first lien in the Debtor's milk proceeds, but only up to $29,060 per month. All remaining personal property owned by White Gold Dairy is designated the "KeyBank Collateral," which includes milk proceeds, all livestock of any kind or nature, all cattle, feed, and non-dairy equipment. The Parties agree that KeyBank holds a first perfected security interest in all KeyBank Collateral, subject only to the purchase money security interest of certain creditors as identified in the Plan. The Debtor will deliver to KeyBank no later than June 1, 2012, a copy of a valuation of all equipment from an independent third party, valuing each item of equipment separate from the other. It is the goal of the Parties to liquidate the KeyBank assets, and pay the proceeds to KeyBank, no later than Sept. 30, 2012. The Parties wish to complete an orderly Liquidation of White Gold Dairy so as to maximize the Liquidation proceeds. The Debtor and White Gold Dairy will, by Sept. 30, 2012, pay over to KeyBank the sum of the Initial Cash Payment; plus the greater of (i) $3 million; or (ii) the actual proceeds of the Liquidation. The failure to complete the Liquidation by Sept. 30, 2012, will be considered to be an Event of Default. The payment of the KeyBank Remaining Claim Balance Due will be governed by the Plan to be proposed by the Debtor in compliance with the Stipulation. The Parties anticipate that the amount of the KeyBank Remaining Claim Balance Due will be the difference between the amount of the Claim ($14.1 million as of May 2, 2012), less (a) the Initial Cash Payment ($1.2 million), less the Liquidation proceeds (at least $3 million), less the First Discount ($2 million), for a total KeyBank Remaining Claim Balance Due of approximately $7.9 million. The Liquidation process will be considered to be a Liquidation undertaken by the Debtor and the Entities, and will in no way be considered or interpreted to be a sale by KeyBank subject to the terms of the Uniform Commercial Code, as adopted by the Idaho Statutes. About Hollifield Ranches Hansen, Idaho-based Hollifield Ranches Inc. filed for Chapter 11 bankruptcy (Bankr. D. Idaho Case No. 10-41613) on Sept. 9, 2010. Hollifield Ranches owns a farming, cattle and dairy operation, and allegedly is owed money for potatoes it sent to Cummins Family Produce, Inc., for processing. Brent T. Robinson, Esq., in Rupert, Idaho, represents the Debtor. The Debtor estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. The Debtor, which is run by Terry Hollifield, was forced to seek bankruptcy after its dairy business encountered cash flow problems in 2008 when the cost of feed was very high, and its cattle business had problems with the falling price for livestock. J. Justin May, Esq., at May, Browning & May, represents the Official Committee of Unsecured Creditors. HOOPER PROPERTY: Files for Bankruptcy to Restructure Debts ---------------------------------------------------------- Annie Johnson, staff reporter at Nashville Business Journal, says Hooper Property voluntarily filed for Chapter 11 bankruptcy protection. The report, citing court documents, notes the company, headed by Kingsley Hooper, listed between $1 million and $10 million in both assets and liabilities. Among the company's largest unsecured creditors are Metro Nashville for $50,000 and Bank of America for a $26,000 line of credit. No other information was provided in the initial filing. HOOPER PROPERTY: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Hooper Property LLC 1932 Upland Dr. Nashville, TN 37216 Bankruptcy Case No.: 12-04349 Chapter 11 Petition Date: May 8, 2012 Court: United States Bankruptcy Court Middle District of Tennessee (Nashville) Judge: Keith M. Lundin Debtor's Counsel: Griffin S. Dunham, Esq. Robert J. Mendes, Esq. MGLAW PLLC 2525 West End Avenue, Suite 1475 Nashville, TN 37203 Tel: (615) 846-8000 Fax: (615) 846-9000 E-mail: gsd@mglaw.net rjm@mglaw.net 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 four largest unsecured creditors is available for free at http://bankrupt.com/misc/tnmb12-04349.pdf The petition was signed by Kingsley Hooper, principal. HOSTESS BRANDS: Teamsters Willing to Continue Talks --------------------------------------------------- Bruce Vail at In These Times reports Teamster spokeswoman Leigh Strope said Teamster leaders are willing to continue talks with Hostess Brands toward an out-of-court settlement. The Bankruptcy Court will convene a hearing May 14 to consider Hostess Brands' request to terminate its contracts with the Teamsters. According to the report, Ms. Strope said Judge Robert Drain is expected to rule at that time on a motion allowing Hostess to cancel the Teamster contracts. On May 4, 2012, Judge Drain permitted Hostess Brands to unilaterally cancel union contracts covering thousands of production workers represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers Union. The report says Judge Drain's decision is equally bad news for the Hostess employees represented by the Teamsters and a half-dozen other smaller unions. Bankruptcy court proceedings are already in progress to strip these workers of their labor rights as well, and Judge Drain's action against the BCTGM indicates that other union members can expect the same sort of treatment at his hands. The report adds cancellation of the Teamster contracts next week could well provoke a new crisis at the company. Rank-and-file members have already voted to authorize a strike if the contracts are cancelled, and Hostess officials have warned that such an action could mean the final collapse of the company. BCTGM President Frank Hurt told In These Times the union has been already been told that as many as 10 of the company's bakeries will be shuttered, even if the company can move forward with a reorganization plan. That means mass layoffs all along the production and distribution chain even in a "best case" scenario. According to the report, the company has also ceased to make any pension plan contributions for the workers, and there is every indication that Hostess plans to use the bankruptcy laws to avoid paying pension contributions that it owes from years past, he said. Mr. Hurt said company executives were using the cash saved from starving the pension plans to keep the company afloat while plans are finalized for a breakup. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. Hostess in April concluded the trial seeking authorization to terminate contracts with the Teamsters and bakery workers, the two largest unions. The trial to reject contracts with other unions is scheduled to begin May 21. The company says costs must be reduced to attract new capital required to exit bankruptcy. HOSTESS BRANDS: Warns Workers That Everyone May Be Fired -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Hostess Brands Inc. gave its workers notice last week that they may all be fired. The notice was given under the Worker Adjustment Retraining and Notification Act, commonly known as the WARN Act, which requires telling workers 60 days before mass firings. The WARN notice, given May 4, was "sent to alert employees that a sale or wind down of the company is possible in the future," Hostess spokesman Lance Ignon said in an e-mailed statement, according to the Bloomberg report. Mr. Rochelle relates that Hostess is in the midst of trials seeking bankruptcy court permission to terminate existing union contracts. Hostess has already been given authority to end the contract with the bakery workers union, the second-largest of the Hostess unions behind the Teamsters. The company previously told workers that the business will be liquidated or sold if there aren't sufficient concessions from labor to make Hostess profitable. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. HUBBARD PROPERTIES: Can Hire Hendry Real Estate as Appraiser ------------------------------------------------------------ Hubbard Properties, LLC, sought and obtained permission from the U.S. Bankruptcy Court for the Middle District of Florida to employ Haynes T. Hendry of Hendry Real Estate Advisors, Inc., to provide appraisal and valuation services with respect to the real property located at 150 Johns Pass Boardwalk West, Madeira Beach, Florida. The Debtor further seeks authority to pay HREA a fixed base fee in the amount of $7,500 for the appraisal and valuation services (consisting of a $6,500 retainer and the remaining $1,000 balance due upon completion of the appraisal). The Debtor anticipates that the appraiser may be required to provide certain litigation and support services, including time spent preparing for and attending meetings, hearings, depositions, trial, and any other Court related activities. In the event the litigation services are required, the Debtor will also seek authority to pay HREA a retainer in the amount of $10,000. HREA's hourly rates for the litigation services are: Hourly Event Professional Rate ----- ------------ ------ Pre-Deposition/Litigation Support Haynes T. Hendry, MAI $290 Pre-Deposition/Litigation Support Associate Appraiser $190 Pre-Deposition/Litigation Support Research Analyst $110 Pre-Deposition/Litigation Support Secretarial $85 Mediation/Deposition Day Haynes T. Hendry, MAI $390 Mediation/Deposition Day Associate Appraiser $250 Litigation/Trial Day Haynes T. Hendry, MAI $490 (4-hr. min.) Litigation/Trial Day Associate Appraiser $290 Haynes T. Hendry, President of HREA, attested to the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Hubbard Properties Hubbard Properties owns and operates a retail and entertainment complex, located in Madeira Beach, Florida, commonly known as the John's Pass Boardwalk. Investors Warranty of America, Inc. (IWA) claims that it is owed $28,404,980 secured by a mortgage on the Property and an assignment of rents and related security interests. Hubbard Properties, LLC, filed for Chapter 11 protection (Bankr. M.D. Fla. Case No. 11-01274) in Tampa, Florida, on Jan. 27, 2011. David S. Jennis, Esq., and James Allen McPheeters, Esq., at Jennis & Bowen, P.L., in Tampa, Fla., serve as bankruptcy counsel. The Debtor also tapped Bacon & Bacon, P.A., as special counsel; Tony Buzbee and The Buzbee Law Firm as special counsel in connection with the assessment and recovery of the Debtor's BP oil spill claim, Van Middlesworth and Company, P.A., as accountant; and Claims Strategies Group, LLC, as claim consultant. The law firm of Hill, Ward and Henderson, P.A., represents the Official Committee of Unsecured Creditors as counsel. In its amended schedules, the Debtor disclosed $12.6 millioni in assets and $23.8 million in liabilities. ICON HEALTH: Moody's Affirms 'B1' CFR, Outlook Negative ------------------------------------------------------- Moody's Investors Service revised ICON Health & Fitness'outlook from stable to negative, citing weakening credit metrics and increased leverage as key concerns. ICON's Corporate Family Rating ("CFR") of B1 was affirmed, as was its senior secured notes rating of B2. "The negative outlook reflects our concern about ICON's increased leverage and margin pressure due to soaring commodity prices, exposure to the Chinese renmimbi, and higher freight costs" stated Nancy Meadows, a Senior Analyst at Moody's. "These issues have weakened the company's credit metrics and driven leverage from 3.7 times at the end of fiscal year 2011 to 5.4 times for the twelve month period ending March 3, 2012", Meadows added. These concerns are tempered slightly by the company's recent product supply agreement struck with Dick's Sporting Goods ("Dick's"), which will enable ICON to manufacture and supply to the sports retailer cardio products under the EPIC brand name. The contract with Dick's is a clear credit positive and should drive not just incremental top line growth but also enhance product mix toward higher-priced, higher-margin product lines and grow ICON's presence in that channel. ICON will need to recapture its margins and bring leverage down to 4 to 4.5 times over the next 12 to 18 months in order to be more comfortably situated in its rating category. Ratings Rationale The B1 Corporate Family Rating (CFR) is constrained by ICON's relatively small size, lack of product diversification beyond fitness equipment, its revenue concentration within North America and with key customers, and the vulnerability of revenues to cyclical swings in consumer spending. Nevertheless, the company demonstrated stable growth trends during the recession and continues to have a leading market position within the fitness equipment sector and strong brands such as NordicTrack Moody's sees no near-term upward pressure on the ratings. However over time, a upgrade could occur if significant revenue growth and an improvement in financial metrics such that adjusted debt to EBITDA is sustained below 3 times, retained cash flow to net adjusted debt exceeds 20%, and free cash flow to adjusted debt was sustained above 10% . A rating downgrade could occur if ICON's credit metrics remain at current weak levels as a result of weakness in the company's core business or if margin pressure continues. Key credit metrics which could result in a downgrade would be leverage remaining above 5 times, low single digit EBITA margins, or a reduction in liquidity. Located in Logan, Utah, ICON manufactures, markets and distributes a broad line of products in the fitness equipment market, which includes cardiovascular equipment, strength training equipment and equipment service products. Revenues for the twelve months ended March 2012 exceeded $800 million. The principal methodologies used in rating Icon Health & Fitness, Inc. were Global Consumer Durables published in October 2010, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found on Moody's website. INMET MINING: S&P Assigns 'B+' Corp Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' long-term corporate credit rating and stable outlook to Toronto-based base metals miner Inmet Mining Corp. "At the same time, Standard & Poor's assigned its 'B+' issue-level rating and '3' recovery rating to Inmet's proposed US$1 billion senior unsecured notes. A '3' recovery rating indicates our expectation of meaningful (50%-70%) recovery in a default scenario," S&P said. "We understand that proceeds from the unsecured notes issuance will be used to fund the development of the company's Cobre Panama copper-gold-silver project in Panama," S&P said. "The ratings on Inmet reflect our view of the project execution risks associated with its 80%-owned Cobre Panama copper project, the company's reliance on volatile metals prices to support its capital funding obligations, and short reserve lives," said Standard & Poor's credit analyst Donald Marleau. "These risks are counterbalanced by the company's attractive second-quartile cash cost position, geographically diversified operations, and strong operating margins," Mr. Marleau added. Inmet operates three mines in Finland, Spain, and Turkey and holds a majority interest in the advanced development stage Cobre Panama copper-gold-silver project. "The stable outlook reflects our view that contemporary base metals prices should support Inmet's credit measures, which are strong for the rating, with funds from operations (FFO) generation reinforcing its liquidity in a period of extraordinarily large growth capital expenditures. We expect that a copper price of US$3.50 per pound would result in an average leverage ratio of 3x and an average FFO to debt of 25% in the next few years. We could lower the rating if large capital spending increases alter the cost profile of Cobre Panama while at the same time its producing mines encounter unexpected operational disruptions, higher costs, or weaker metals prices. In such a scenario, Inmet's financial flexibility would begin to tighten as leverage approaches 4.5x in conjunction with thinner FFO levels, causing major delays to Cobre Panama's existing construction timeline. A positive rating action is unlikely during the initial stages of Cobre Panama's construction program," S&P said. INTELSAT SA: Lowers Net Loss to $24.2 Million in First Quarter -------------------------------------------------------------- Intelsat S.A. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $24.26 million on $644.16 million of revenue for the three months ended March 31, 2012, compared with a net loss of $215.75 million on $640.18 million of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $17.40 billion in total assets, $18.52 billion in total liabilities, $49.51 million in noncontrolling interest and a $1.16 billion total Intelsat S.A. shareholder's deficit. Intelsat CEO Dave McGlade said, "In the first quarter, Intelsat achieved steady financial performance, driven by our customers' demand for the mission-critical communications infrastructure our network offers. We successfully launched Intelsat 22 in March, carrying the Australian Defence Force hosted payload and continuing the deployment of beams for our global broadband mobility infrastructure. This continued enhancement of our network positions Intelsat to serve high-demand applications in regions where growth is strongest." McGlade continued, "With contracted backlog of $10.5 billion providing visibility for future revenue and cash flows, we are focused on our 2012 investment program, which involves the launch of four additional satellites, providing incremental capacity to support future customer growth." A copy of the Form 10-Q is available for free at: http://is.gd/NokcPh About Intelsat Intelsat S.A., formerly Intelsat, Ltd., provides fixed-satellite communications services worldwide through a global communications network of 54 satellites in orbit as of Dec. 31, 2009, and ground facilities related to the satellite operations and control, and teleport services. It had US$2.5 billion in revenue in 2009. Washington D.C.-based Intelsat Corporation, formerly known as PanAmSat Corporation, is a fully integrated subsidiary of Intelsat S.A., its indirect parent. Intelsat Corp. had US$7.70 billion in assets against US$4.86 billion in debts as of Dec. 31, 2010. The Company reported a net loss of $433.99 million in 2011, a net loss of $507.77 million in 2010, and a net loss of $782.06 million in 2009. * * * Luxembourg-based Intelsat S.A. carries 'B' issuer credit ratings from Standard & Poor's. It has 'Caa1' corporate family and probability of default ratings from Moody's Investors Service. INTERACCIONES BANKING: Antigua Liquidators File Ch. 15 Petition --------------------------------------------------------------- Joint liquidators of Antigua-based Interacciones Banking Corporation, Ltd. filed a Chapter 15 bankruptcy petition before the U.S. Bankruptcy Court in Houston, Texas, to stop a U.S. lawsuit involving assets of the winding up company. Charles Walwyn and Robert Wilkinson of PricewaterhouseCoopers in Antigua, were appointed receiver-managers of the Debtor by Antigua's Financial Services Regulatory Commission in June 2011. They filed a petition to wind up IBC in October 2011. They were later appointed liquidators in March 2012. Messrs. Walwyn and Wilkinson concluded in June 2011 that IBC was insolvent and unable to pay creditors, with a deficit of $18.8 million as of June 30, 2011. Assets amounted to $8.45 million while liabilities amounted to $27.25 million. According to the liquidators, IBC had deposited $7.3 million of bonds and other assets with Harris, Texas-based Global Financial Services, LLC. Global provided brokerage services to IBC for several years. Curacao, Dutch West Indies-based Donzi, N.V., which was a party to custodial services agreement with the Debtor, claims rights to the assets transferred by IBC to its accounts at Global. Donzi filed a complaint against Global in the District Court of Harris County, Texas (Case No. 2011-11903), for declaratory relief in connection with $5.1 million in bonds and equities held in custody at Global. The parties to the litigation are now in discovery. Messrs. Walwyn and Wilkinson have asked the U.S. Bankruptcy Court to recognize the pending case in the Eastern Caribbean Supreme Court in the High Court of Justice of Antigua and Barbuda as "foreign main proceeding." The liquidators want the bankruptcy court to stay all proceedings against the Debtor and its assets in the United States. INTERNATIONAL MEDIA: Wants Plan Filing Deadline Extended to July 9 ------------------------------------------------------------------ International Media Group Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend the exclusive period for the Debtor to file a Chapter 11 plan to July 9, 2012, and solicit acceptances to the plan to Sept. 5, 2012. Absent an extension, the Debtors' current exclusive filing period expires on May 8, 2012, and the exclusive solicitation period will expire on July 7, 2012. Since the Petition Date, the Debtors have focused the majority of their time and resources towards selling substantially all of their assets. The Debtors are working to address numerous issues relating to the sale of substantially all of their assets and are working expeditiously to consummate the sale. The Debtors and their professional advisors have focused much of their time, energy and resources on obtaining maximum value for substantially all of the Debtors' assets, preparing the schedules of assets and liabilities and statements of financial affairs for each of the Debtors, and reviewing and rejecting certain unexpired leases and executor contracts. The Debtors are contemplating various ways to conclude the Chapter 11 cases. Since the Petition Date, the Debtors have paid their creditors in the ordinary course of business or as otherwise provided by court order and the U.S. Bankruptcy Code. The Debtors submit that the requested extension of the Exclusive Periods won't prejudice the legitimate interests of post-petition creditors, as the Debtors continue to make timely payments on their undisputed post-petition obligations. The Debtors say that they are actively negotiating with the lenders towards a consensual means to wind down the estate. About International Media Group International Media Group Inc. and its affiliates operate television station KSCI-TV (Channel 18) Long Beach, California; KUAN-LP (Channel 48) Poway, California; and KIKU-TV (Channel 19) Honolulu, Hawaii. KSCI, KUAN and KIKU focus primarily on the large Asian markets of Southern California and Hawaii and offer programming in six (6) main languages -- (i) Chinese; (ii) Korean; (iii) Tagalog (Filipino); (iv) Vietnamese; (v) English; and (vi) Japanese. The Television Stations' programming is a mix of locally produced original news, entertainment, and talk shows, purchased or syndicated foreign language programming, and paid programming comprised principally of infomercials, per-inquiry and direct response television advertisements. KHAI Inc. owns all of the equity of KHLS Inc., which holds the FCC license for KIKU-TV (Channel 19). KSCI Inc. owns all of the equity of KHAI and of KSLS Inc., which holds the FCC license for KSCI-TV (Channel 18) and KUANLP (Channel 48). International Media Group Inc. owns all of the equity of KSCI. AMG Intermediate LLC owns all of the equity of IMG, and AsianMedia Group LLC owns all of the equity of AMG. Non-debtor AsianMedia Investors I L.P. owns all of the equity of AsianMedia. International Media Group and six affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-10140) on Jan. 9, 2012, with the intent to sell their business as a going concern under 11 U.S.C. Sec. 363(a). NRJ TV II LLC, an entity owned by the first lien lender, will be the stalking horse bidder. As of Jan. 9, 2012, the Debtors owe $77.3 million on a first lien debt, including $67 million on a term-loan. Fortress Credit Corp. serves as agent. Unless outbid at the auction, the pre-petition lenders will acquire the assets in exchange for a credit bid of $45 million, will assume certain liabilities, and fund a "carve-out". An auction and sale hearing is contemplated to be held in March. Judge Mary F. Walrath oversees the Debtors' cases. International Media Group tapped Houlihan Lokey Capital, Inc., in October to market the assets. Houlihan will continue marketing the assets post-petition. William E. Chipman, Jr., Esq., and Mark D. Olivere, Esq., at Cousins Chipman & Brown, LLC, in Wilmington, Delaware, serve as the Debtors' bankruptcy counsel. The Debtors' claims agent is Epiq Bankruptcy Solutions LLC. International Media disclosed $206,825,047 in assets and $233,218,073 in liabilities as of the Chapter 11 filing. The petition was signed by Dennis J. Davis, chief restructuring officer. INTRINSIC TECHNOLOGIES: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------------------ Steve Green at Las Vegas Sun reports that Intrinsic Technologies LLC filed for Chapter 11 bankruptcy reorganization on May 8, 2012, in Las Vegas, Nevada. According to the report, Intrinsic said in the filing its principal place of business is in Lisle, Ill., while its principal assets are in Las Vegas. The report says a request for comment was placed with the company, which didn't disclose detailed financial information in the initial bankruptcy filing. The report relates Intrinsic estimated from $500,000 to $1 million in assets and from $1 million to $10 million in debts. Creditors include Yash & Lujan Consulting Inc. of San Antonio, owed $1.13 million on a contingent basis; CyberDefenses Inc. in Round Rock, Texas, owed $479,000 on a contingent basis; Information Technology Coalition Inc. in Alexandria, Va., with a $307,000 disputed claim; and Ken Langone of New York with a contingent claim of $687,000 for a loan. The report notes the filing was signed by Richard Schendelman, managing director. Intrinsic Technologies LLC provides information technology services including "Zero Touch Deployment," in which new operating systems are installed in computers and data, applications and user settings are migrated to the machines. ISLAND RECYCLING: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Island Recycling Solutions LLC 135 PIne Aire Drive Bay Shore, NY 11706 Bankruptcy Case No.: 12-43334 Chapter 11 Petition Date: May 7, 2012 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Elizabeth S. Stong About the Debtor: Island Recycling provides municipal, commercial and residential resource collector and removal services. Debtor's Counsel: Julio E. Portilla, Esq. LAW OFFICE OF JULIO E. PORTILLA, P.C. 350 Broadway, Suite 400 New York, NY 10013 Tel: (212) 365-0292 Fax: (212) 365-4417 E-mail: jp@julioportillalaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $0 to $50,000 The Company did not file a list of creditors together with its petition. The petition was signed by Joseph S. Kalinowski, partner. Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- Island Resources Corporation 12-72900 Assets: $0 to $50,000 Debts: $1 million to $10 million Island Enviromental Group LLC 12-72901 Assets: $0 to $50,000 Debts: $0 to $50,000 Island Container Services LLC 12-72902 JEFFERSON COUNTY, AL: FGIC Blocked on Raising Sewer Rates --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Financial Guaranty Insurance Co., which guaranteed about half of the $3.1 billion in sewer bonds sold by Jefferson County, Alabama, didn't succeed with its effort in bankruptcy court to allow the receiver for the sewer system to complete the process of raising rates. Rather than rule one way or the other, the bankruptcy judge in Birmingham this week told the county to report every 45 days on the status of the "sewer ratemaking process." FGIC's motion to modify the so-called automatic stay was put off indefinitely. According to the report, the county had responded to FGIC by saying it was "pursuing" the issue of rate increases. Ultimately, the county says, the Chapter 9 municipal bankruptcy process must end with "a reasonable rate structure that is legally sound and economically feasible." FGIC guaranteed $1.6 billion of the bonds. The last rate increase was before 2008, FGIC said. The report recounts that in June 2011, the receiver for the sewer system was on the brink of raising rates 25% before he halted the process in favor of discussions that led to agreement on slower- paced increases and an overall restructuring. The settlement was never implemented because the state failed to adopt necessary legislation and the county filed for Chapter 9 bankruptcy. Later, the bankruptcy judge ruled that the receiver was automatically ousted from control and thus lost the ability to raise rates. Bondholders are appealing rulings ousting the receiver and concluding that the county is eligible for municipal bankruptcy. 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. JESCO CONTRUCTION: Wants 90-Day Extension of Exclusive Periods -------------------------------------------------------------- Jesco Construction Corporation asks the U.S. Bankruptcy Court for the Southern District of Mississippi for a 90-day extension of its exclusive periods to file and solicit acceptances for the proposed Chapter 11 plan. Prior to the filing of the motion, the exclusive period to propose a Chapter 11 plan was set to expire on May 4. The Debtor relates that it has been in discussions with various creditors with regard to a disclosure statement and the proposed plan of reorganization to be filed. In addition, the Debtor says the certain prepetition litigation must be moved forward into the discovery phases before a plan will be filed so that the Debtor will have better idea as to the value of the claim when confirmation occurs. About Jesco Construction Headquartered in Wiggins, Mississippi, Jesco Construction Corp., a Delaware Corporation, specializes in disaster response and was part of the Hurricane Katrina cleanup. It filed for Chapter 11 bankruptcy (Bankr. S.D. Miss. Case No. 12-50014) on Jan. 5, 2012. Judge Katharine M. Samson presides over the case. Attorneys at the Law Offices of Craig M. Geno, PLLC, serve as counsel for the Debtor. The Debtor tapped Kelly Baker, CPA, PA, as accountant. In its schedules, the Debtor disclosed $100 million in assets and $14,662,901 in liabilities. Henry G. Hobbs, the Acting U.S. Trustee for Region 5, appointed three unsecured creditors to serve on the Committee of Unsecured Creditors of Jesco Construction Corp. LAS VEGAS MONORAIL: Bankruptcy Judge to Confirm Plan ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Las Vegas Monorail Co., a project characterized by the bankruptcy judge as a "glaring example of nonsense on stilts," will be permitted to emerge from Chapter 11 reorganization with a plan that reduces debt 98%. The report recounts that although creditors overwhelmingly supported the proposed reorganization, U.S. Bankruptcy Bruce A. Markell in Las Vegas refused to approve the plan in November, saying that $40.4 million in debt would be "unsupportable." According to the report, to remedy the defects, the monorail offered a modified plan reducing debt to $13 million and cutting the interest rate to 5.5% from 9.55%. Judge Markell said the changes were "a huge discount by any reckoning." Even though the project was built with $650 million in bonds, 90% of creditors still supported the diminished plan, Judge Markell said in his seven-page opinion May 9. Judge Markell said he will sign a confirmation order approving the revised plan because testimony showed the monorail "can service this debt for the short and long term." As a result, the plan passed the so-called feasibility test because the monorail "will be able to pay its reorganization debt," Judge Markell said. Tim O'Reiley at Las Vegas Review-Journal reports Judge Markell found that Monorail's financial projections had a good chance of working. The report notes when Judge Markell shot down the previous plan in November, he said it was based on unproven ridership projections plus too little cash flow to pay off debt and the cost of equipment upgrades. The new deal with the lenders and other factors led Judge Markell to rule that the new plan met legal muster. About Las Vegas Monorail Las Vegas, Nevada-based Las Vegas Monorail Company, organized by the State of Nevada in 2000 as a nonprofit corporation, owns and manages the Las Vegas Monorail. The Monorail is a seven-stop, elevated train system that travels along a 3.9-mile route near the Las Vegas Strip. LVMC has contracted with Bombardier Transit Corporation to operate the Monorail. Though it benefits from its tax-exempt status due to being a nonprofit entity, LVMC claims to be the first privately-owned public transportation system in the nation to be funded solely by fares and advertising. LVMC says it receives no governmental financial support or subsidies. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-10464) on Jan. 13, 2010. Gerald M. Gordon, Esq., William M. Noall, Esq., and Gabriel A. Hamm, Esq., at Gordon Silver, assist the Company in its restructuring effort. Alvarez & Marsal North America, LLC, is the Debtor's financial advisor. Stradling Yocca Carlson & Rauth is the Debtor's special bond counsel. Jones Vargas is the Debtor's special corporate counsel. The Company disclosed $395,959,764 in assets and $769,515,450 in liabilities as of the Petition Date. In April 2010, bondholder Ambac Assurance Corp. lost in its bid to halt the bankruptcy after U.S. Bankruptcy Judge Bruce A. Markell ruled that Monorail isn't a municipality and is therefore entitled to reorganize in Chapter 11. U.S. District Judge James Mahan in Reno upheld the ruling in October 2010. LEVEL 3: Files Form 10-Q, Incurs $138 Million Net Loss in Q1 ------------------------------------------------------------ Level 3 Communications, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing 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 total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/1e1zTp 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. LITTLE SCHOOLHOUSE: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: The Little Schoolhouse Day Care Center, Inc. fka St. Joesph's Hospital School of Nursing, Inc. 1522 West Girard Avenue Philadelphia, PA 19130 Bankruptcy Case No.: 12-14519 Chapter 11 Petition Date: May 8, 2012 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Magdeline D. Coleman Debtor's Counsel: Joshua T. McNamara, Esq. 2201 Pennsylvania Avenue, Suite 104 Philadelphia, PA 19130 Tel: (215) 260-8012 E-mail: jmcnamaralaw@comcast.net Scheduled Assets: $396,156 Scheduled Liabilities: $1,755,825 A copy of the Company's list of its 12 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/paeb12-14519.pdf The petition was signed by Eugene Edw. J. Maier, president. LOUISIANA-PACIFIC CORP: S&P Rates New $300MM Sr. Unsec. Notes 'BB' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB' issue-level rating and '3' recovery rating to U.S.-based Louisiana-Pacific Corp.'s proposed $300 million senior unsecured notes due 2020. "The '3' recovery rating indicates our expectations for meaningful (50% to 70%) recovery in the event of a payment default. We expect the company to use proceeds to repay its 13% senior secured notes due 2017 and for general corporate purposes," S&P said. "Louisiana-Pacific is a leading manufacturer of building materials with operations in the U.S., Canada, and South America. Our corporate credit rating on the company is unchanged and continues to reflect our opinion that the company will maintain its 'strong' liquidity until end markets recover sufficiently to support meaningful improvement in credit measures, which are currently very weak relative to our assessment of the company's financial risk as 'significant'. Our assessment of the company's business risk as 'fair' reflects our view that Louisiana-Pacific has good operating leverage and that profitability will improve quickly when the nation's housing recovery accelerates, which we expect will begin this year," S&P said. RATINGS LIST Louisiana-Pacific Corp. Corporate credit rating BB/Negative/-- New Rating $300 mil sr unsecd nts due 2020 BB Recovery rating 3 LENNY DYKSTRA: Pleads Not Guilty to Bankruptcy Fraud Charges ------------------------------------------------------------ Steven Melendez at Bankruptcy Law360 reports that former baseball star Lenny Dykstra pled not guilty to bankruptcy fraud and other charges Monday, two weeks after asking a California federal judge to dismiss the case because of a bankruptcy trustee's alleged conflict of interest that he said marred the underlying proceeding. According to Law360, Mr. Dykstra was indicted on federal charges last year including bankruptcy fraud, embezzlement from a bankruptcy estate and obstruction of justice for allegedly ignoring a freeze on his property and selling items from his $18 million mansion, ranging from World Series memorabilia to furniture. About Lenny Dykstra Lenny Dykstra is a former Major League Baseball all-star player. He was center fielder for the New York Mets and Philadelphia Phillies. He filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 09-18409) on July 7, 2009, in Woodland Hills, California. The Law Office of M. Jonathan Hayes, in Northridge, California, represents the Debtor. The Debtor estimated up to $50,000 in assets and $10 million to $50 million in debts in his Chapter 11 petition. A Chapter 11 trustee was appointed in September 2009, and the case was converted to a liquidation in Chapter 7 on November 20, 2009. The trustee -- Arturo M. Cisneros -- was investigating the disposition of personal property both before and after the Chapter 11 filing. In August 2010, Mr. Cisneros stepped down as Chapter 7 trustee following issues with his failing to disclose the extent of his business with J.P. Morgan Chase & Co., which happens to be largest creditor in Mr. Dykstra's case. LSP ENERGY: Keeps Sole Chapter 11 Control Through Sept. 7 --------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware extended, at the behest of LSP Energy Limited Partnership, et al., the exclusive period for the Debtor to file a Chapter 11 plan to Sept. 7, 2012, and for the Debtor to solicit acceptances of that plan to Nov. 6, 2012. The Debtors stated that they have proceeded in good faith in negotiating a process for reorganizing the estate -- or otherwise resolving this chapter 11 case -- in the best interests of all parties. The Debtors' declared purpose of these procedures is to complete a sale of the electric generation facility in Batesville, Mississippi, or the equity interests in LSP, the owner of the Facility. The sale of equity may include the requirement for the reinstatement of the Debtors' various bond obligations. Until the sales process is complete, the Debtors are unable to propose a precise plan. "Allowing the Exclusive Proposal Period to expire on June 9, 2012, could give rise to the threat of multiple plans and a contentious confirmation process resulting in increased administrative expenses and consequently diminishing returns to the Debtors' creditors. Moreover, to force the Debtors to file a plan by June 9, 2012, prior to the completion of the sales process, would be an inefficient exercise, as the results of the sales process will, to a large extent, dictate the terms of a plan," the Debtors said. About LSP Energy LSP Energy Limited Partnership, LSP Energy, Inc., LSP Batesville Holding, LLC, and LSP Batesville Funding Corporation filed separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 12-10460) on Feb. 10, 2012. LSP owns and operates an electric generation facility located in Batesville, Mississippi. The Facility consists of three gas-fired combined cycle electric generators with a total generating capacity of roughly 837 megawatts and is electrically interconnected into the Entergy and Tennessee Valley Authority transmission systems. LSP's principal assets are the Facility and the 58-acre parcel of real property on which it is located, as well as its rights under a tolling agreements. LSP filed bankruptcy to complete an orderly sale of its assets or the ownership interests of LSP Holding in LSP, LSP Energy and LSP Funding for the benefit of all stakeholders. The remaining three Debtors filed bankruptcy due to their relationship as affiliates of LSP and their ultimate obligations on a significant portion of LSP's secured bond debt. The Debtors also suffered losses due to a mechanical failure of a combustion turbine at their facility and resultant business interruption. LSP Energy is the general partner of LSP. LSP Holding is the limited partner of LSP and the 100% equity holder of LSP Energy and LSP Funding. LSP Funding is a co-obligor on the Debtors' bond debt, and each of LSP Energy and LSP Holding has pledged their equity interests in LSP and LSP Funding as collateral for the bond debt. No statutorily authorized creditors' committee has yet been appointed in the Debtors' cases by the United States Trustee. Judge Mary F. Walrath oversees the case. Lawyers at Whiteford Taylor & Preston LLC serve as the Debtors' counsel. M WAIKIKI: Wants Additional $6.3MM Loan from Davidson Trust ----------------------------------------------------------- M Waikiki LLC asks the U.S. Bankruptcy Court for the District of Hawaii to: i) approve a Second Amended and Restated Loan and Security Agreement with Robert M. Davidson and Janice G. Davidson as trustees of the Davidson Family Trust dated Dec. 22, 1999, as amended; and ii) authorize the Debtor to incur additional postpetition secured indebtedness. Pursuant the Second Amended DIP Credit Agreement, the Debtor will obtain additional secured, second-priority, postpetition financing in an aggregate principal amount of up to $15.3 million, such amount being inclusive of the $9 million that the Debtor has been authorized to borrow pursuant to prior orders of the Court. The Second Amended DIP Credit Agreement amends the Amended and Restated Loan and Security Agreement dated as of Jan. 17, 2012, by providing for additional loans of up to $6.3 million, and extending the maturity date from April 30, 2012, to Aug. 10. Furthermore, the definition of "DIP Credit Facility Termination Event" is amended to remove the Debtor's loss of exclusivity as a termination event and replace it with two new events tied to the failure of the Debtor to confirm the Plan proposed by the Debtor and the DIP lender. The Debtor is using the DIP loans to finance orderly operation of its business and pay the necessary, critical expenses. As reported in the TCR on Oct. 14, 2011, the significant terms of the original DIP Credit Facility are: Borrower: M Waikiki LLC Administrative Agent: The Davidson Group, a Nevada corporation DIP Lender: The Davidson Family Trust DIP Credit Facility: Secured debtor-in-possession term credit family Availability: In two or more draws. Up to $1,000,000 will be immediately available upon entry of the Interim DIP Order. Upon entry of the Final DIP Order, up to an additional $1,500,00 will be available. Term: All obligations will be due on the earlier of six months from the Interim DIP Order Date and (b) the occurrence of a DIP Credit Facility Termination Event. Interest and Fees: 15% p.a. Upon any default, interest will be at the default rate of 20% p.a. Borrower will pay the DIP Credit Facility Costs. Security: Second priority perfected priming interests in all property of the Borrower, junior only to the security interests of Wells Fargo Bank, National Association, as Indenture Trustee, and the Carve Out. DIP Credit Facility Costs: All reasonable costs of the Administrative Agent and the DIP Lender associated with the DIP Credit Facility, including, but not limited to the Administrative Agent's and the DIP Lender's out-of-pocket expenses associated with the transaction, professional fees, recording fees, search fees, and filing fees will be paid by the Borrower. About M Waikiki M Waikiki owns the Modern Honolulu, a world-class, luxury hotel property located close to Waikiki Beach in Hawaii. The hotel is being managed by Modern Management Services LLC, an affiliate of Aqua Hotels and Resorts. M Waikiki is a Hawaii limited liability company with its principal place of business located in San Diego, California. It is a special purpose entity, having roughly 75 indirect investors, which was formed to acquire the Hotel. The Company filed for Chapter 11 protection (Bankr. D. Hawaii Case No. 11-02371) on Aug. 31, 2011. Judge Robert J. Faris presides over the case. Patrick J. Neligan, Esq., and James P. Muenker, Esq., at Neligan Foley LLP, in Dallas, Tex.; Simon Klevansky, Esq., at Klevansky Piper, LLP, in Honolulu, Hawaii, are the attorneys to the Debtor. Bickel & Brewer serves as special litigation counsel. The Debtor tapped XRoads Solutions Group, LLC, and Xroads Case Management Services, LLC, as its financial and restructuring advisor. The Debtor disclosed $216,116,142 in assets and $135,085,843 in liabilities as of the Chapter 11 filing. Modern Management is represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC. Marriott Hotel Services, which used to provide management services, is represented by Susan Tius, Esq., at Rush Moore LLP LLP, and Carren B. Shulman, Esq., at Sheppard Mullin Richter & Hampton LLP. James A. Wagner, Esq., and Chuck C. Choi, Esq., at Wagner Choi & Verbrugge, in Honolulu, serve as bankruptcy counsel for the Creditors' Committee. MARIANA RETIREMENT FUND: Has 7-Member Creditors' Committee ---------------------------------------------------------- The Office of the U.S. Trustee for Region 15 appointed seven members to serve on the official committee of unsecured creditors in the Chapter 11 case of the Northern Mariana Islands Retirement Fund. The committee members are: Roman Tudela Mariano Taitano Christopher Leon Guerrero Sapuro Rayphand Barbara Torres Juan Cepeda Paul Joyce Alexie Villegas Zotomayor at Marianas Variety reports that Mariano Taitano, a former Retirement Fund employee, heads the creditors committee. According to the report, Mr. Taitano was chosen chairman of the committee during the first committee meeting on May 9. Variety, citing a separate interview, relates attorney Michael Dotts clarified that June 15 is not the first meeting of the creditors committee. Rather, June 15 will be the "examination of the debtor" by the creditors committee, where the fund will answer questions on the record and under oath. Variety also learned from sources that the creditors committee has yet to obtain a legal counsel of its own as the bankruptcy filing proceeds in court. 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. The U.S. Trustee and certain retirees have sought dismissal of the Chapter 11 case, saying the Fund is not eligible to file one. A hearing is slated for June 1 on the Motions to Dismiss. MARIANA RETIREMENT FUND: Members Complain About Lack of Info ------------------------------------------------------------ Mariana Variety reports that active members of the Mariana Islands Retirement Fund are complaining about the lack of information leading to the agency's Chapter 11 bankruptcy filing. "Though the Fund has a legal obligation to protect active employees' investments, no information session or other publicly made available session has been available to the active employees," the report quotes active member Mark Staal as saying. He said active employees continue to pay into the Fund "with no sight of return on their investment." According to the report, Mr. Staal, Joe Pangelinan, Paul Joyce, and Phyllis Ain acted as facilitators during a meeting of active members at the American Memorial Park Visitor Center. One member of the unsecured creditors committee, Mr. Joyce told Variety they held the meeting to inform all the active employees of the current situation and get their input as to how they will proceed as a group. The report relates active employees were told that while there is a stay as a result of the Chapter 11 filing, "our funds will be frozen until the court makes a decision to remove the Chapter 11 protection." The report adds over 110 members attended the meeting and they agreed to "make a noise" on Capital Hill through a petition addressed to Gov. Benigno R. Fitial and the CNMI Superior Court. Their petition urges the governor to sign H.B. 17-226, which permits active employees to withdraw their contribution regardless of their years of service, and to provide a permanent funding source for current retirees. The report says the petition also asks the Court to force "the government to pay for existing retirees benefits." 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. The U.S. Trustee and certain retirees have sought dismissal of the Chapter 11 case, saying the Fund is not eligible to file one. A hearing is slated for June 1 on the Motions to Dismiss. MARIANA RETIREMENT FUND: Hiring Brown Rudnick as Lead Counsel ------------------------------------------------------------- The Northern Mariana Islands Retirement Fund filed a formal application seeking Court authority to engage Brown Rudnick LLP as its general bankruptcy counsel in connection with the prosecution of the Chapter 11 case and pursuit of confirmation of a plan of reorganization. Brown Rudnick began working for the Debtor on April 4, 2012, providing advice on a potential restructuring and related matters. Prior to April 4, 2012, for a period of six months, and from time to time, the Debtor sought Brown Rudnick's advice as it considered available options to address its financial issues. During that period (prior to April 4, 2012), Brown Rudnick did not charge the Debtor for its services. Based on the firm's hour rates, those services total roughly $187,000. For its services during the bankruptcy proceedings, Brown Rudnick will bill the Debtor at a "blended hourly" rate of $475 for attorneys. Paraprofessionals will charge at customary rates, which range from $265 to $295 per hour. Brown Rudnick has agreed to cap the current monthly payment of its fees and expenses at $125,000 per month, with any amounts in excess of the cap payable at the conclusion of the case. Brown Rudnick also has agreed not to exceed $750,000 from the date of the engagement letter without prior written consent of the Debtor. The firm received an advance retainer of $250,000, which includes an advance of estimated fees and expenses from April 4 through April 17, 2012. Brown Rudnick forwarded $15,000 out of the retainer to AlixPartners LLP for communication services provided to the Debtor prior to the petition date. The Debtor has not yet decided whether to engage AlixPartners in the bankruptcy case. Jeremy B. Coffey, Esq., a partner at Brown Rudnick, attests his firm does not hold or represent any interest adverse to the Debtor or its estate or the board of trustees. 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. The U.S. Trustee and certain retirees have sought dismissal of the Chapter 11 case, saying the Fund is not eligible to file one. A hearing is slated for June 1 on the Motions to Dismiss. MARIANA RETIREMENT FUND: Asks Court to OK Huesman as Local Counsel ------------------------------------------------------------------ The Northern Mariana Islands Retirement Fund seeks Bankruptcy Court authority to employ the Law Office of Braddock J. Huesman LLC as its special counsel and designated local counsel for certain matters. The Debtor proposes to pay Mr. Huesman at $150 hourly rate and reimburse him of necessary expenses. The Huesman Firm has represented the Debtor's board of trustees since May 2010 in various litigation involving the Fund as well as in the examination of various proposed and passed legislation, and various financial issues affecting the Fund. The Debtor wants the Huesman Firm to continue representing the Fund on those matters and serve as local counsel to the Debtor's general bankruptcy counsel, Brown Rudnick. Mr. Huesman, the sole member of the firm, attests his firm does not hold or represent any interest adverse to the Debtor or its estate or the board of trustees. The Huesman Firm disclosed that it received $20,000 as advance retainer. An exhibit filed by the firm showed that it submitted an invoice on March 31, 2012, for $9,135 which was paid April 11. Another invoice was sent April 17 for $5,859 which was paid on the same day. 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. The U.S. Trustee and certain retirees have sought dismissal of the Chapter 11 case, saying the Fund is not eligible to file one. A hearing is slated for June 1 on the Motions to Dismiss. MARIANA RETIREMENT FUND: Taps Buck as Actuarial Consultants ----------------------------------------------------------- The Northern Mariana Islands Retirement Fund seeks the Bankruptcy Court's permission to employ Buck Consultants LLC as an actuarial consultant. The Debtor needs Buck to quantify claims of beneficiaries for distribution purposes, propose terms on which certain beneficiaries continue to receive benefit payments during the course of the Chapter 11 case, and develop a plan of reorganization that fairly and reasonably treats the claims of all beneficiaries. The firm will be paid at these hourly rates: Principal $550 - $600 Director $400 - $550 Senior consultant $300 - $425 Consultant $245 - $600 Associate $165 - $250 Administrative Staff $92 - $100 Buck provided actuarial services to the Debtor pre-bankruptcy. Dylan Porter, a principal of the Los Angeles, Calif.-based firm, attests that Buck does not hold or represent any interest adverse to the Debtor or its estate or the board of trustees. Xerox Corporation is the ultimate parent company of Buck, which operates independently. 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. The U.S. Trustee and certain retirees have sought dismissal of the Chapter 11 case, saying the Fund is not eligible to file one. A hearing is slated for June 1 on the Motions to Dismiss. MARKWEST ENERGY: Fitch Says Pending Buy Won't Affect Ratings ------------------------------------------------------------ Fitch Ratings anticipates that MarkWest Energy Partners, L.P.'s pending acquisition of Keystone Midstream Services, LLC for $512 million will not impact Markwest's ratings. The proposed transaction is expected to close in the second quarter of 2012. Transaction Financing: To fund the acquisition, the company announced an equity offering which should generate approximately $500 million of net proceeds (which assumes all 1.2 million units for the overallotment are exercised). Fitch views the transaction financing as favorable from a credit perspective. MarkWest last raised equity in March 2012 when it offered equity units for net proceeds of $388 million. Proceeds were used to fund the company's significant capital expenditure plan. Capital Expenditures: With the announcement of the Keystone acquisition, MarkWest increased its forecast for spending in 2012. Previously, spending was planned in the range of $900 million to $1.3 billion. The new forecast will raise this estimate by $200 million to a range of $1.1 billion to $1.5 billion. In 2011, capital expenditures were much lower at $551 million (which excluded contributions of $126 million for the Liberty joint venture). The significant increase in 2012's projected spending over 2011 is a result of MarkWest's 100% ownership of Liberty versus its previous stake of 51%, spending associated with Keystone expansion projects, and other organic growth opportunities. Distributions and DCF: Following the increase in distributable cash flow (DCF) in the recent quarter to $109 million from $76 million in the year ago period, MarkWest increased its quarterly distribution by 18%. The distribution coverage for the latest 12 months (LTM) period ending with the first quarter of 2012 was healthy at 1.2 times (x) which was unchanged from the end of 2011. In 2011, DCF was $333 million. The company projects 2012 in the range of $440 million to $500 million. Liquidity: At the end of the first quarter of 2012, MarkWest had $1.2 billion of liquidity which consisted of $348 million of cash and $878 million available on its revolving bank facility. Leverage: At the end of the first quarter of 2012, debt to adjusted EBITDA was 3.7x which was an improvement from 4.1x at the end of 2011. Fitch anticipates that leverage should remain around or below 4.0x by the end of 2012. MarkWest's financing strategy for the large capital expenditure program may ultimately result in leverage which differs from Fitch's expectations. Hedging: The company uses a proxy hedging strategy which is exposed to a periodic breakdown in the correlation between crude oil and natural gas liquids (NGL) prices. At the end of the first quarter 2012, 65% of its contracts were hedged for 2012, approximately 55% for 2013, and 27% for 2014. Fitch currently rates MarkWest as follows: -- Long-term Issuer Default Rating (IDR), 'BB'; -- Senior secured revolving credit facility, 'BB+'; -- Senior unsecured debt, 'BB'. MARQUIS HOMES: Case Summary & 6 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Marquis Homes of Tennessee, Inc 1700 Hayes Street, Suite 102 Nashville, TN 37203 Bankruptcy Case No.: 12-04338 Chapter 11 Petition Date: May 8, 2012 Court: United States Bankruptcy Court Middle District of Tennessee (Nashville) Judge: Marian F. Harrison Debtor's Counsel: Steven L. Lefkovitz, Esq. LAW OFFICES LEFKOVITZ & LEFKOVITZ 618 Church St., Suite 410 Nashville, TN 37219 Tel: (615) 256-8300 Fax: (615) 255-4516 E-mail: slefkovitz@lefkovitz.com Scheduled Assets: $4,121,474 Scheduled Liabilities: $5,282,091 A copy of the Company's list of its six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/tnmb12-04338.pdf The petition was signed by Mack C. McClung president. MF GLOBAL: Covington Okayed as Ch. 11 Trustee's Insurance Counsel ----------------------------------------------------------------- Judge Martin Glenn authorized Louis J. Freeh, the Chapter 11 trustee for MF Global Holdings, Ltd. and its debtor affiliates, to employ Covington & Burling LLP as his special insurance counsel, nunc pro tunc to November 28, 2012. Covington will not withdraw as the Chapter 11 Trustee's special insurance counsel prior to the effective date of any Chapter 11 plan confirmed in the Debtors' Chapter 11 cases without prior approval of the Court in accordance with Rule 2090-1(e) of the Local Bankruptcy Rules for the Southern District of New York. As the Chapter 11 Trustee's special counsel, Covington will: (a) provide legal analysis and advice concerning the Chapter 11 Trustee's rights and obligations with respect to the captive insurance subsidiary MFG Assurance Company Limited, and policies issued to the Debtors by MFGA; (b) review claims asserted under outstanding insurance policies and insurers' responses to such claims, and advise the Chapter 11 Trustee with respect to such claims; (c) represent the Chapter 11 Trustee in these proceedings with respect to matters involving the scope or availability of insurance coverage or entitlement to proceeds under the policies; and (d) confer with and assist when appropriate the Chapter 11 Trustee's bankruptcy counsel concerning insurance coverage issues within the scope of Covington's special expertise, and pursue potential claims for indemnification or reimbursement under such policies on behalf of the Chapter 11 Trustee. Covington will be paid according to its professionals' customary hourly rates. The firm's customary hourly rates range: $600 to $965 for partners; $600 per hour to $965 for "of counsel;" $280 to $595 for associates; and $200 to $360 for paraprofessionals. These professionals are presently expected to have primary responsibility for providing services to the Chapter 11 Trustee: Name Title Rate per Hour ---- ----- ------------- Dianne Coffino Partner $890 P. Benjamin Duke Partner $825 David A. Goodwin Partner $795 Anthony J. Sun Associate $475 Covington will also be reimbursed for expenses to be incurred. P. Benjamin Duke, Esq., at Covington & Burling LLP, in New York -- pbduke@cov.com -- discloses that the Debtors owe the firm $114,275 for services rendered before October 31, 2011. He further discloses that certain parties-in-interest are or may be current or former Covington clients, in matters in which those clients or affiliates are adverse to the Chapter 11 Trustee, the Debtors, or their estates. A schedule of the clients is available for free at: http://bankrupt.com/misc/MFGlobal_CovingtonClients.pdf Notwithstanding those disclosures, Mr. Duke maintains that Covington is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- 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: Claimants Ask SIPA Trustee to Correct Amounts -------------------------------------------------------- Several claimants want James W. Giddens, the trustee for the liquidation of MF Global Inc. under the Securities Investor Protection Act, to correct the remaining amounts due to their claims and pay those amounts as owed: Claimant Remaining Claim Amount -------- ---------------------- Scott B. Hildebrandt $17,343 Cheryl A. Boyce $4,988 Diane Thiel $5,773 David C. Chamness $3,559 Patricia A. Preissler $1,462 Thomas W. Hinkle $2,800 Robert Hanna $20,496 Industrial Asphalt Inc. $68,625 Richard/Patricia Horst Weissman $23,372 Michael Chiles $1,636 Jason W. Bakke $4,252 Stevan J. Bosses $86,697 Frederick Shaw $2,265 Jeffrey Senesac $233 Alejandro Quiceno $12,094 Cafe Vittoria, Inc. $7,742 Astral Financial $52,913 Magnum Feedyard $130,606 Rostilav Holan $60,246 Coffee Export & CIA S EN C.C.I. $60,219 Case Gabel & Zach May $107,100 David Oster $118,913 Cascade Investment, L.L.C. $283,100 Stevel Gabel $25,676 Cornelius Schwarz $101,658 Cafiver, S.A. DE C.V. $10,899 Compania Hondurena de Mercadeo Agricola S.A. $121,393 Boyd Criswell $4,182 Mountain Coffee Corporation $107,279 The Steven M. Abraham Trust wants the SIPA Trustee to correct the misdesignation of $550,000 to reflect that is in fact part of the firm's segregated futures account funds and compel the SIPA Trustee to void any transfer of the $550,000 out of the segregated futures account. James E. Brennan, Wayne A. Zemke, Gary Zucafoose and Hal Rogers insist that they did not receive transfers for their claims as set forth in the SIPA Trustee's notices of claim determination. Roger Wiklund, Angela Dozier-Carter and Ronald Drosselmeyer disagree with the SIPA Trustee's determination of his claim. William May, Maurice Rusnak and Lynn Edward Cox seek clarification or full accounting as to how the SIPA Trustee arrived at his determination of their claims. Timmi Ryerson also seeks the return of his money as a public claimant. Robert Eitel says that the check issued by MF Global for $50,000 has not yet been credited to his account and thus seeks a new notice of trustee's determination of claim. Meanwhile, Daniel Goedken filed with the Court a declaration that he did not receive any payment or other transfer of the allowed amount with respect to Claim No. 900006711. Robert N. Webb agrees with the SIPA Trustee's determination of his claims and asks the Court to discard his previous objections. He also submitted a declaration, release and agreement. Futures claimants William Griffin and John McKillip assert that their claims as for domestic futures accounts and not foreign futures accounts. Ancile Global Diversification Fund I, LLC filed documents providing detailed calculations of the valuation of its foreign futures position. 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: Files Form 10-Q, Incurs $203.3MM Net Loss in Q1 ------------------------------------------------------------ MGM Resorts International filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing 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 previous 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. A copy of the Form 10-Q is available for free at: http://is.gd/rK9j1g 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. MILACRON HOLDINGS: S&P Hikes Corp. Credit Rating to 'B+' -------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Ohio-based Milacron Holdings Inc. by one notch to 'B+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with positive implications on April 16, 2012," S&P said. The upgrade follows the completion of Milacron's acquisition by private-equity firm CCMP Capital with moderate initial leverage. "We believe that the company's credit metrics could remain stronger than our expectations in 2012," said Standard & Poor's credit analyst Gregoire Buet. "However, we expect financial policies to remain aggressive, and exposure to cyclical markets and ownership by CCMP Capital could lead to higher leverage." At the same time, Standard & Poor's affirmed its 'B+' issue rating and '4' recovery rating on the company's senior secured notes due 2019, co-issued by wholly owned subsidiaries Mcron Finance Sub LLC and Mcron Finance Corp. The '4' recovery rating indicates the expectation of average (30%-50%) recovery in a payment default scenario. The notes were upsized by $10 million, to $275 million. Following stronger-than-expected revenue and profit growth in 2011, Standard & Poor's expects relatively steady operating performance for Milacron this year. Milacron serves the plastics-processing industries and metalworking industries. It provides injection, extrusion, and blow-molding equipment; parts and services; mold bases and related products; and industrial fluids to a broad customer base in automotive, packaging, and various industrial and consumer end markets. The company should continue to benefit from its broad product portfolio, a large installed base, and its brand recognition. Milacron's global market position is well-established. However, the global plastic processing machinery market is cyclical and remains plagued by residual excess supply, despite improved capacity utilization over the past two years. MOMENTIVE SPECIALTY: Files Form 10-Q; Incurs $16MM Net Loss in Q1 ----------------------------------------------------------------- Momentive Specialty Chemicals Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $16 million on $1.23 billion of net sales for the three months ended March 31, 2012, compared with net income of $63 million on $1.24 billion of net sales for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $3.25 billion in total assets, $5 billion in total liabilities and a $1.75 billion total deficit. A copy of the Form 10-Q is available for free at: http://is.gd/UGYyty About Momentive Specialty Momentive Specialty Chemicals, Inc., headquartered in Columbus, Ohio, is a leading producer of thermoset resins (epoxy, formaldehyde and acrylic). The company is also a supplier of specialty resins for inks and specialty coatings sold to a diverse customer base as well as a producer of commodities such as formaldehyde, bisphenol A, epichlorohydrin, versatic acid and related derivatives. Momentive Specialty reported net income of $118 million on $5.20 billion of net sales in 2011, compared with net income of $214 million on $4.59 billion of net sales in 2010. * * * Momentive Specialty carries a 'B-' issuer credit rating from Standard & Poor's Ratings Services. It has 'B3' corporate family and probability of default ratings from Moody's Investors Service. corporate credit rating from Standard & Poor's. As reported in the Oct. 27, 2010 edition of TCR, Moody's Investors Service assigned a 'Caa1' rating to the guaranteed senior secured second lien notes due 2020 of Momentive Specialty (formerly known as Hexion Specialty Chemicals Inc.). Proceeds from the notes were allocated for the repayment of $533 million of guaranteed senior secured second lien notes due 2014. "With this refinancing Hexion will have refinanced or extended the maturities on the vast majority of the debt that was originally slated to mature prior to 2015. There is less than $600 million of this debt remaining, which should be much easier to for the company to refinance as its credit metrics improve further," stated John Rogers, Senior Vice President at Moody's. MMRGLOBAL INC: Granite to Resell 100 Million Common Shares ---------------------------------------------------------- MMRGlobal, Inc., filed with the U.S. Securities and Exchange Commission a Form S-1 registration statement relating to the offer and resale of up to 100,000,000 shares of the Company's common stock, par value $0.001 per share, by the selling stockholder, Granite State Capital, LLC. Granite has agreed to purchase 100,000,000 shares pursuant to the investment agreement the Company entered into with Granite on April 16, 2012. Subject to the terms and conditions of that investment agreement, the Company has the right to "draw," or sell, up to $15 million in shares of the Company's common stock to Granite. The Company will not receive any proceeds from the resale of the Shares offered by Granite. The Company will, however, receive proceeds from the sale of shares to Granite pursuant to the Facility. When the Company draws an amount of the Shares, the per share purchase price that Granite will pay to the Company in respect to that draw will be determined in accordance with a formula set forth in the Investment Agreement. Generally, with respect to each draw, Granite will pay the Company a per share purchase price equal to 95% of the lowest daily volume weighted average price, or the "VWAP," of the Company's common stock during the five consecutive trading day period beginning on the trading day immediately following the day on which Granite receives the Company's draw notice and ending on and including the date that is four trading days after the date of the Company's draw notice. The Company's common stock is quoted on the OTCQB, the OTC market tier for companies that are reporting with the SEC, under the symbol "MMRF," and on the OTC Bulletin Board under the symbol "MMRF.OB." The last reported sale price of our common stock on the OTC Bulletin Board on April 30, 2012, was $0.02 per share. A copy of the prospectus is available for free at: http://is.gd/YfizHo About MMRGlobal Los Angeles, Calif.-based MMR Global, Inc. (OTC BB: MMRF) -- http://www.mmrglobal.com/-- through its wholly-owned operating subsidiary, MyMedicalRecords, Inc., provides secure and easy-to- use online Personal Health Records (PHRs) and electronic safe deposit box storage solutions, serving consumers, healthcare professionals, employers, insurance companies, financial institutions, and professional organizations and affinity groups. The Company reported a net loss of $8.88 million in 2011, compared with a net loss of $17.90 million in 2010. The Company reported a net loss of $10.3 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $2.22 million in total assets, $7.51 million in total liabilities, and a $5.28 million total stockholders' deficit. For 2011, Rose, Snyder & Jacobs LLP, in Encino, California, expressed substantial doubt about the Company's ability to continue as a going concern. The auditor issued going concern qualification in the 2010 and 2011 financial statements. The independent auditors noted that the Company has incurred significant operating losses and negative cash flows from operations during the years ended Dec. 31, 2011, and 2010. MMRGLOBAL INC: David Loftus Discloses 10.3% Equity Stake -------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, David T. Loftus disclosed that, as of April 27, 2012, he beneficially owns 40,163,523 shares of common stock of MMRGlobal, Inc., representing 10.32% of the shares outstanding. E-Mail Frequency, LLC, beneficially owns 2,777,778. Mr. Loftus is the managing member of E-Mail Frequency and, in connection therewith, has dispositive power with respect to the shares held by E-Mail Frequency, LLC. Mr. Loftus disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. A copy of the filing is available for free at: http://is.gd/v2Vyze About MMRGlobal Los Angeles, Calif.-based MMR Global, Inc. (OTC BB: MMRF) -- http://www.mmrglobal.com/-- through its wholly-owned operating subsidiary, MyMedicalRecords, Inc., provides secure and easy-to- use online Personal Health Records (PHRs) and electronic safe deposit box storage solutions, serving consumers, healthcare professionals, employers, insurance companies, financial institutions, and professional organizations and affinity groups. The Company reported a net loss of $8.88 million in 2011, compared with a net loss of $17.90 million in 2010. The Company reported a net loss of $10.3 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $2.22 million in total assets, $7.51 million in total liabilities, and a $5.28 million total stockholders' deficit. Following the 2011 results, Rose, Snyder & Jacobs LLP, in Encino, California, expressed substantial doubt about the Company's ability to continue as a going concern. The auditor issued going concern qualification in the 2010 and 2011 financial statements. The independent auditors noted that the Company has incurred significant operating losses and negative cash flows from operations during the years ended Dec. 31, 2011, and 2010. MMRGLOBAL INC: Sherry Hackett Discloses 6.3% Equity Stake --------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Sherry Hackett disclosed that, as of April 27, 2012, she beneficially owns 24,040,689 shares of common stock of MMRGlobal, Inc., representing 6.26% of the shares outstanding. A copy of the filing is available for free at: http://is.gd/kEcwfS About MMRGlobal Los Angeles, Calif.-based MMR Global, Inc. (OTC BB: MMRF) -- http://www.mmrglobal.com/-- through its wholly-owned operating subsidiary, MyMedicalRecords, Inc., provides secure and easy-to- use online Personal Health Records (PHRs) and electronic safe deposit box storage solutions, serving consumers, healthcare professionals, employers, insurance companies, financial institutions, and professional organizations and affinity groups. The Company reported a net loss of $8.88 million in 2011, compared with a net loss of $17.90 million in 2010. The Company reported a net loss of $10.3 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $2.22 million in total assets, $7.51 million in total liabilities, and a $5.28 million total stockholders' deficit. For 2011, Rose, Snyder & Jacobs LLP, in Encino, California, expressed substantial doubt about the Company's ability to continue as a going concern. The auditor issued going concern qualification in the 2010 and 2011 financial statements. The independent auditors noted that the Company has incurred significant operating losses and negative cash flows from operations during the years ended Dec. 31, 2011, and 2010. MS PARTNERSHIP: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: MS Partnership 1700 Hayes Street, Suite 104 Nashville, TN 37203 Bankruptcy Case No.: 12-04337 Chapter 11 Petition Date: May 8, 2012 Court: United States Bankruptcy Court Middle District of Tennessee (Nashville) Judge: Keith M. Lundin Debtor's Counsel: Steven L. Lefkovitz, Esq. LAW OFFICES LEFKOVITZ & LEFKOVITZ 618 Church St., Suite 410 Nashville, TN 37219 Tel: (615) 256-8300 Fax: (615) 255-4516 E-mail: slefkovitz@lefkovitz.com Scheduled Assets: $3,698,598 Scheduled Liabilities: $6,275,466 A copy of the Company's list of its nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/tnmb12-04337.pdf The petition was signed by Mack H. McClung, partner. NASSAU BROADCASTING: Bankruptcy Court Approves Asset Sale --------------------------------------------------------- Stephanie Gleason at Dow Jones' DBR Small Cap reports that the bankruptcy court signed off on the sale of Nassau Broadcasting Partners LP's assets Tuesday to five different buyers, including a Goldman Sachs Group Inc. affiliate, which bought the majority of the radio stations. As reported in the May 9, 2012 edition of the TCR, Nassau Broadcasting announced ahead of its sale hearing that an affiliate of Goldman Sachs Group Inc. purchased the majority of Nassau's radio stations at auction with a $37.8 million credit bid, which uses debt as currency. According to Dow Jones Newswires, Goldman Sachs Credit Partners LP was the successful bidder during the May 3 auction for 11 radio stations -- a combination of AM and FM -- located in Pennsylvania and New Jersey. The Goldman Sachs affiliate was one of three petitioning creditors that pushed Nassau into bankruptcy in September, claiming that the company owed it $69.8 million in an involuntary petition. Other auction results, according to Dow Jones: $6.4 million -- amount paid by Manning Broadcasting Inc. to acquire three Maryland radio stations. Two of those radio stations had belonged to Maryland radio-station owner Manning Broadcasting prior to 2004, according to the Herald-Mail. Nassau paid at least $18 million for two radio stations -- one that it sold back to Manning and another that it didn't -- in 2004. $2.7 million -- amount paid by John H. Garabedian, the host of a weekend pop-music show called Open House Party, to purchase three Cape Cod, Mass., FM radio stations. $250,000 -- amount paid by Presence Radio Network Inc., a Catholic radio-station operator, for one station in Maine; and $150,000 -- amount paid by Mainestream Media LLC for another station in Maine. About Nassau Broadcasting Nassau Broadcasting Partners LP is a radio-station owner and operator. Three secured lenders -- affiliates of Goldman Sachs Group Inc., Fortress Investment Group LLC and P.E. Capital LLC -- filed involuntary Chapter 7 bankruptcy petitions (Bankr. D. Del. Case No. 11-12934) on Sept. 15, 2011, against Nassau Broadcasting Partners LP, the owner of 45 radio stations in the northeastern U.S. The lender group said in court papers that they are owed $83.8 million secured by all of Nassau's property. Involuntary petitions were also filed against three affiliates of Nassau, which is based in Princeton, New Jersey. The lenders said the stations aren't worth enough to pay them in full. Nassau Broadcasting in October won a Delaware bankruptcy court's blessing to convert its involuntary Chapter 7 bankruptcy -- pressed by creditors including Goldman Sachs Lending Partners LLC -- to a proceeding on its own terms in Chapter 11. NCI BUILDING: S&P Puts 'B' Corp. Credit Rating on Watch Negative ---------------------------------------------------------------- Standard & Poor's Rating Services placed its ratings, including its 'B' long-term corporate credit rating, on Houston-based metal building and components manufacturer and distributor NCI Building Systems on CreditWatch with negative implications. "The CreditWatch listing follows NCI's announcement of an agreement to acquire insulated panel supplier Metl-Span for $145 million in cash," said Standard & Poor's credit analyst Thomas Nadramia. "NCI plans to enter into a new credit facility to fund the acquisition and refinance its $128 million bank term loan. NCI also announced that it has reached agreement with Clayton, Dubilier & Rice and affiliates (CD&R), the holders of NCI's convertible preferred shares, to eliminate NCI's quarterly dividend obligation on the preferred shares." "Based on preliminary information, we expect NCI's financial leverage to increase as a result of the incremental acquisition- related debt," Mr. Nadramia added. "Pro forma the acquisition, we estimate that total debt/EBITDA leverage, adjusted for operating leases and nearly $350 million of convertible preferred equity, could reach about 7x, which we would consider to be weak for the current rating given NCI's 'weak' business risk profile. Partially mitigating the increase in leverage is increased sales, vertical integration and diversity, as well as potential synergies that will result from the Metl-Span acquisition. Also, NCI plans to eliminate its quarterly dividend obligation on its preferred shares." "We expect to resolve the CreditWatch placement within the next 90 days or upon the transaction's completion. In resolving the CreditWatch listing, Standard & Poor's will meet with management to review its operating plans and strategies post acquisition. We will also assess the company's financial policies, liquidity and capital structure pro forma for the acquisition. We could affirm or lower ratings based on our assessment of the higher debt leverage, liquidity, and financial policies post-transaction. If a downgrade were to occur, it would likely be limited to one notch," S&P said. NEBRASKA BOOK: Wants $250,000 Exit Lender Work Fees Approved ------------------------------------------------------------ BankruptcyData.com reports that Nebraska Book filed with the U.S. Bankruptcy Court a motion for an order authorizing the payment of up to $250,000 in work fees to potential exit lenders in connection with their diligence and documentation related to the proposed new $75 million asset-backed revolving credit facility. According to the motion, "If the Potential Lenders were to delay their efforts to complete diligence and prepare documentation of the Exit Facility, such delay could frustrate the Debtors' ability realize a smooth and timely exit from chapter 11." The Debtors requested a May 14, 2012 hearing on the matter. About Nebraska Book Lincoln, Nebraska-based Nebraska Book Company, Inc., is one of the leading providers of new and used textbooks for college students in the United States. Nebraska Book and seven affiliates filed separate Chapter 11 petitions (Bankr. D. Del. Case Nos. 11-12002 to 11-12009) on June 27, 2011. Hon. Peter J. Walsh presides over the case. Lawyers at Kirkland & Ellis LLP and Pachulski Stang Ziehl & Jones LLP, serve as the Debtors' bankruptcy counsel. The Debtors; restructuring advisors are AlixPartners LLC; the investment bankers are Rothschild, Inc.; the auditors are Deloitte & Touche LLP; and the claims agent is Kurtzman Carson Consultants LLC. As of the Petition Date, the Debtors had consolidated assets of $657,215,757 and debts of $563,973,688. JPMorgan Chase Bank N.A., as administrative agent for the DIP lenders, is represented by lawyers at Richards, Layton & Finger, P.A., and Simpson Thacher & Bartlett LLP. J.P. Morgan Investment Management Inc., the DIP arranger, is represented by lawyers at Bayard, P.A., and Willkie Farr & Gallagher LLP. An ad hoc committee of holders of more than 50% of the Debtors' Second Lien Notes is represented by lawyers at Brown Rudnick. An ad hoc committee of holders of the Debtors' 8.625% unsecured notes are represented by Milbank, Tweed, Hadley & McCloy LLP. The Official Committee of Unsecured Creditors selected Lowenstein Sandler LLP and Stevens & Lee, P.C., as lawyers and Mesirow Financial Inc. as financial advisers. Nebraska Book has been unable to confirm a pre-packaged Chapter 11 plan that would have swapped some of the existing debt for new debt, cash and the new stock, due to an inability to secure $250 million in exit financing. NEP II: Moody's Assigns 'B2' CFR, Rates 2nd Lien Facility 'Caa1' ---------------------------------------------------------------- Moody's Investors Service assigned a B2 corporate family rating to NEP II, Inc., a B1 rating to its proposed first lien credit facility, and a Caa1 rating to its proposed second lien credit facility. The transaction consists of a $460 million first lien term loan, a $60 million first lien revolver (undrawn at close), and a $160 million second lien term loan. Proceeds will repay existing debt and fund an approximately $225 million dividend to American Securities Capital Partners, the company's primary owner. Moody's also assigned a stable outlook, and a summary of the actions follow. NEP II, Inc Corporate Family Rating, Assigned B2 Probability of Default Rating, Assigned B2 $460M Senior Secured First Lien Term Loan, Assigned B1, LGD3, 36% $60M Senior Secured First Lien Revolver, Assigned B1, LGD3, 36% $160M Senior Secured Second Lien Term Loan, Assigned Caa1, LGD5, 87% Outlook, Stable Ratings Rationale The high leverage (in the mid 5 times debt-to-EBITDA pro forma for the transaction) creates significant financial risk, especially for a small company seeking to expand through both acquisitions and organic growth in related segments and new geographies, which drives NEP's B2 corporate family rating. The company's leading position within its niche business facilitates good client relationships as well as access to potential acquisitions, and its long term contractual relationships with key broadcast networks and cable channels provide some measure of cash flow stability. These factors mitigate some of the risk related to scale and execution, as does NEP's track record of acquiring and integrating smaller companies without negatively impacting the credit profile. The strong EBITDA margin (in the low 30% range) enables the company to better manage the leverage, but the capital intensity of the business and the high interest expense will likely limit free cash flow to less than 5% of debt. Also, given the sponsor ownership, the potential for future leveraging events, such as incremental dividends or an exit through the sale of the company, constrains the rating. NEP's fleet of mobile broadcast trucks and engineering expertise provides for a strong value proposition to its customers and also lends asset value, supporting the rating. Furthermore, NEP facilitates the viewing of live events, a service Moody's considers key to content producers and content distributors, which positions the company well regardless of how the consumption and delivery of media evolves and therefore suggests sustainability of the cash flow. The stable outlook assumes leverage in the low to mid 5 times debt-to-EBITDA range, modestly positive free cash flow, and the maintenance of adequate or better liquidity. The stable outlook incorporates tolerance for continued modest acquisitions in line with the historic pattern, provided these do not cause a material negative impact on the operating or credit profile. The lack of scale and sponsor ownership limit upward ratings momentum. However, Moody's would consider a positive rating action with expectations for sustainable leverage in the low 4 times debt-to-EBITDA range and sustainable positive free cash flow in excess of 5% of debt. Deterioration of the liquidity profile or expectations for sustained leverage of 6 times debt-to-EBITDA or higher or sustained negative free cash flow would likely have negative ratings implications. NEP II, Inc's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside NEP II, Inc's core industry and believes NEP II, Inc's ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. NEP II, Inc., is a wholly owned subsidiary of ASP NEP/NCP HoldCo, Inc., which provides outsourced media services necessary for the delivery of live and broadcast sports and entertainment events to television and cable networks, television content providers, and sports and entertainment producers. The company's majority owner is American Securities Capital Partners and it maintains its headquarters in Pittsburgh, Pennsylvania. Revenue for the year ended December 31, 2011, was approximately $333 million. NEWPAGE CORP: U.S. Trustee Forms 8-Member Creditors Committee ------------------------------------------------------------- Roberta A. Deangelis, U.S. Trustee for Region 3, amended the appointment of the Official Committee of unsecured Creditors in the Chapter 11 cases of NewPage Corporation, et al., to reflect the resignation of Alden Global effective April 24, 2012. The Committee members are: 1. HSBC Bank USA, National Association Attn: Sandra Horwitz 10 East 40 th Street, 14th Floor New York, NY 10016 Tel: (212) 525-1358 Fax: (212) 252-1366 2. Deutsche Bank Trust Company Americas Attn: Rodney Gaughan 60 Wall Street, MS NYC 60-2710 New York, NY 10005 Tel: (212) 250-2935 Fax: (212) 797-8610 3. US Bank National Assocation Attn: Timothy Sandell 60 Livingston Avenue Saint Paul, MN 55107 Tel: (651) 495-3959 Fax: (651) 495-8100 4. Pension Benefit Guaranty Corporation Attn: Darren Huff 1200 K. Street NW Washington, DC 2005 Tel: (202) 326-4070 Fax: (202) 842-2643 5. United Steelworkers Attn: David Jury Five Gateway Center, Room 807 Pittsburgh, PA 15222 Tel: (412) 562-2545 Fax: (412) 562-2574 6. Eugene Davis as Litigation Trustee for the Quebecor World Litigation Trust Attn: Joseph L. Steinfeld, Jr. 2600 Eagan Woods Drive, Suite 400 St. Paul, MN 55121 Tel: (651) 289-3850 Fax: (651) 406-9676 7. OMNOVA Solutions Inc. Attn: Chet Fox 175 Ghent Road Fairlawn, OH 44333 Tel: (330) 869-4279 Fax: (330) 869-4210 8. National Starch LLC Attn: Larry Karr 10 Finderne Avenue Bridgewater, NJ 08807 Tel: (908) 685-5069 About NewPage Group Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. NewPage Group, NewPage Holding, NewPage, and certain of their U.S. subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del. Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its subsidiary, Consolidated Water Power Company, is not a part of the Chapter 11 proceedings. Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage Port Hawkesbury Corp., brought a motion before the Supreme Court of Nova Scotia to commence proceedings to seek creditor protection under the Companies' Creditors Arrangement Act of Canada. NPPH is under the jurisdiction of the Canadian court and the court- appointed Monitor, Ernst & Young in the CCAA Proceedings. Initial orders were issued by the Supreme Court of Nova Scotia on Sept. 9, 2011 commencing the CCAA Proceedings and approving a settlement and transition agreement transferring certain current assets to NewPage against a settlement payment of $25 million and in exchange for being relieved of all liability associated with NPPH. On Sept. 16, 2011, production ceased at NPPH. Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., Dewey & LeBoeuf LLP, in New York, serve as counsel in the Chapter 11 case. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, serves as co- counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, the Debtors disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. The Official Committee of Unsecured Creditors selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. NewPage prevailed over most objections from the official creditors' committee and won agreement from the bankruptcy judge on final approval of $600 million in secured financing. Moody's Investors Service assigned a Ba2 rating to the $350 million first-out revolving debtor-in-possession credit facility and a B2 rating to the $250 million second-out debtor-in- possession term loan for NewPage. NEXSTAR BROADCASTING: Swings to $3 Million Net Income in Q1 ----------------------------------------------------------- Nexstar Broadcasting Group, Inc., reported net income of $3.01 million on $83.64 million of net revenue for the three months ended March 31, 2012, compared with a net loss of $6.31 million on $69.94 million of net revenue for the same period during the prior year. Perry A. Sook, Chairman, President and Chief Executive Officer of Nexstar Broadcasting Group, Inc., commented, "Nexstar's growth and operating momentum is accelerating in 2012. In the first quarter we generated significant increases from all of our revenue sources leading to record net revenue, adjusted EBITDA and free cash flow. Nexstar's 19.6% rise in first quarter net revenue again highlights the value of our long-term strategy to transition the traditional television broadcasting operating model and our locally focused content and advertiser relationships into a diversified model of high margin revenue streams." A copy of the press release is available for free at: http://is.gd/bDCXMI About Nexstar Broadcasting Group Irving, Texas-based Nexstar Broadcasting Group Inc. currently owns, operates, programs or provides sales and other services to 62 television stations in 34 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama, New York, Rhode Island, Utah and Florida. Nexstar's television station group includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches approximately 13 million viewers or approximately 11.5% of all U.S. television households. The Company reported a net loss of $11.89 million in 2011, a net loss of $1.81 million in 2010, and a net loss of $12.61 million in 2009. * * * As reported by the Troubled Company Reporter on Aug. 30, 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Nexstar Broadcasting Group to 'B' from 'B-'. The rating outlook is stable. "The 'B' corporate credit rating reflects S&P's expectation that Nexstar's core ad revenue will continue growing modestly in 2010 and 2011," said Standard & Poor's credit analyst Deborah Kinzer. The EBITDA growth resulting from the rebound in core advertising, combined with political ad revenue from the 2010 midterm elections, should, in S&P's view, enable Nexstar to reduce its leverage significantly by the end of the year. NFR ENERGY: S&P Affirms 'B' Corp. Credit Rating; Outlook Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Houston- based NFR Energy LLC to negative from stable and affirmed all of its ratings, including the 'B' corporate credit rating, on the company. "The ratings on NFR Energy LLC reflect our assessment of the company's 'vulnerable' business risk and 'aggressive' financial risk," said Standard & Poor's credit analyst Marc D. Bromberg. "The ratings incorporate NFR's operations in the volatile oil and natural gas industry, its small size and scope of operations, concentrated operations in natural gas, expected near-term negative free cash flow generation, and geographic concentration of its asset base. The company is owned by Nabors Industries Ltd. and First Reserve Corp." "NFR is a relatively small independent oil and gas exploration and production company with approximately 1.4 trillion cubic feet equivalent of natural gas of estimated proved reserves (about 43% were proved developed as of Dec. 31, 2011). About 97% of the company's proved reserves are in the East Texas region, which includes the Haynesville Shale and Cotton Valley formations. In the near term, Standard & Poor's expects that the company will focus its efforts on developing liquids production. Average daily production was about 121 million cubic feet equivalent (mmcfe) in 2011," S&P said. "NFR is highly concentrated in natural gas, which faces unfavorable supply and demand dynamics in North America. Natural gas represented about 86% of the company's total proved reserves at year end 2011. To help mitigate revenue volatility, NFR has meaningful gas price hedges in place in 2012 and 2013. We expect that the company will continue to maintain an active hedging policy to help offset the impact of natural gas price volatility while it seeks to expand its liquids production," S&P said. NORTHCORE TECHNOLOGIES: To Release Q1 Results on May 14 ------------------------------------------------------- Northcore Technologies Inc. is scheduled to release its financial results for the first quarter of 2012 on Monday, May 14 following the close of the markets. About Northcore Toronto, Ontario-based Northcore Technologies Inc. (TSX: NTI; OTC BB: NTLNF) -- http://www.northcore.com/-- provides a Working Capital Engine(TM) that helps organizations source, manage, appraise and sell their capital equipment. Northcore offers its software solutions and support services to a growing number of customers in a variety of sectors including financial services, manufacturing, oil and gas and government. Northcore owns 50% of GE Asset Manager, LLC, a joint business venture with GE. Together, the companies work with leading organizations around the world to help them liberate more capital value from their assets. The Company reported a loss and comprehensive loss of C$3.93 million in 2011, compared with a loss and comprehensive loss of C$3.03 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed C$2.91 million in total assets, C$415,000 in total liabilities and C$2.49 million in total shareholders' equity. NORTHERN OIL: S&P Gives 'B' Corp. Credit Rating; Outlook Stable --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Wayzata, Minn.-based Northern Oil & Gas Inc. (NOG). The outlook is stable. "At the same time, we assigned our 'B' issue rating to Northern Oil & Gas's proposed $250 million senior unsecured notes due 2020. The recovery rating is '4', indicating our expectation of average (30% to 50%) recovery in the event of a payment default, albeit at the low end of the range. We expect proceeds from the offering to be used to term-out the $177.5 million in principal outstanding on the company's revolving credit facility as of March 31, 2012, and to fund its capital expenditure needs," S&P said. "The ratings on Northern Oil and Gas reflect the company's relatively small asset base and production levels, lack of geographical diversification, aggressive growth strategy, negative cash flow generation, and a non-operator business model that depends on other 'operators' companies drilling plans, hence restricting the company's ability to pace or channel its growth," said Standard & Poor's credit analyst Vishal Merani. "The ratings also reflect the company's significant exposure to robust crude oil prices, a favorable cost structure and a sizeable acreage position, for the rating level." "Standard & Poor's views NOG's business profile as 'vulnerable'. The company's year-end 2011 proved reserve base totals a relatively small 46.8 million barrels of oil equivalent (boe), 34% of which was proved developed. Average daily production for the quarter ended March 31, 2012, was also relatively small at about 8,500 boe per day. The company has limited operating diversity with all of its operations concentrated in the Williston basin of North Dakota and Montana. The concentration in the Williston basin is somewhat offset by its large, albeit fractional holding of wells, which is split across a range of operators, some of whom have a strong operating track record. Given the high level of exploration and production development and currently limited transportation infrastructure in the Williston basin, profitability lags other producing regions due to higher service costs and the negative price differential(currently in the $8 to $10 range) to West Texas Intermediate (WTI) crude oil in the region. Also, NOG's non-operator business model makes it reliant on operators to develop its reserves and acreage, thus limiting NOG in its ability to control the pace of reserve development and raising the inherent risk on expectations surrounding capital spending plans and production increases," S&P said. "The company's acreage position in the Williston Basin (173,000 net acres) and the relative low-risk nature of resource play development should provide a solid platform for reserve and production growth. Based on expected capital spending of $360 million on resource development, NOG in 2012, could nearly double production over prior year. NOG's oil focus (89% of proved reserves) and the current crude oil pricing environment, yields better profitability compared with more gas weighted peers. NOG also plans to spend $60 million to $80 million on additional acreage acquisitions in 2012," S&P said. "The stable outlook reflects our expectations that NOG will manage its aggressive capital spending in a manner that does not significantly erode its credit protection measures. An upgrade is possible if NOG can increase its reserves above 100 million boe's and increase run-rate production to over 22,000 barrels per day, without material deterioration in its credit metrics. A negative rating action would occur if adjusted debt leverage exceeded 5x, or liquidity were to significantly erode with no near-term remedy," S&P said. OSAGE EXPLORATION: Director L. Ray Resigns for Personal Reasons --------------------------------------------------------------- Larry Ray resigned as a member of Osage Exploration and Development, Inc.'s Board of Directors on May 6, 2012, for personal reasons. 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. PENN NAT'L: Moody's Says St. Louis Casino Acquisition Favorable --------------------------------------------------------------- Moody's Investors Service commented on the recent announcement that Penn National Gaming (Ba2, Positive) has agreed to acquire Harrah's Maryland Heights casino in St. Louis, Missouri from Caesars Entertainment Corporation (Caa1, Stable). Moody's says Penn's agreement to acquire the St. Louis casino from Caesars is favorable for Penn but will increase Caesars' leverage. The principal methodology used in rating Penn National Gaming and Caesars Entertainment Corporation was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. PENN VIRGINIA: S&P Rates New $450-Mil. Senior Unsecured Notes 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' issue-level credit rating and '6' recovery rating to Penn Virginia Resource Partners L.P.'s (PVR; BB-/Negative/--) proposed $450 million senior unsecured notes due 2020. The company intends to use note proceeds to fund a portion of the purchase price for its previously announced acquisition of Chief Gathering LLC and repay a portion of the borrowings outstanding under its revolver. As of March 31, 2012, PVR had total debt of $917 million. PVR is a master limited partnership that manages coal and natural resource properties, and gathers and processes natural gas. RATINGS LIST Penn Virginia Resource Partners L.P. Corporate credit rating BB-/Negative/--) New Ratings Penn Virginia Resource Partners L.P. Penn Virginia Resource Finance Corp. II $450 mil sr unsecd notes due 2020 B Recovery rating 6 PETE'S FAMOUS RESTAURANT: Case Summary & Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Pete's Famous Restaurant of Hyde Park, Inc. dba Pete's Famous Cafe Grill 4200 Albany Post Road Hyde Park, NY 12538 Bankruptcy Case No.: 12-36165 Chapter 11 Petition Date: May 7, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Poughkeepsie) Judge: Cecelia G. Morris Debtor's Counsel: Thomas Genova, Esq. GENOVA & MALIN, ATTORNEYS Hampton Business Center 1136 Route 9 Wappingers Falls, NY 12590-4332 Tel: (845) 298-1600 Fax: (845) 298-1265 E-mail: genmallaw@optonline.net Scheduled Assets: $58,501 Scheduled Liabilities: $1,160,500 A copy of the Company's list of its eight largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb12-36165.pdf The petition was signed by Panagiotis Sassos, president. POSTMEDIA NETWORK: S&P Revises Outlook to Negative on Performance ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Toronto- based Postmedia Network Inc. to negative from stable. At the same time, Standard & Poor's affirmed its ratings on the company, including its 'B' long-term corporate credit rating on Postmedia. "The outlook revision reflects Postmedia's poor operating performance for the second quarter ended Feb. 29, 2012, which was far weaker than we expected," said Standard & Poor's credit analyst Lori Harris. "While revenue declined 7.6% during the quarter, compared with the same period in 2011, reported operating income (before depreciation and amortization and restructuring costs) dropped a material 36.6% in the quarter. 'Given the slow economic recovery and declining industry advertising sales, we expect the company's performance to remain stressed for the rest of the year with revenue declines in the high single digits, as well as continued margin pressure," Ms. Harris added. "The ratings on Postmedia reflect Standard & Poor's assessment of the company's 'vulnerable' business risk profile and 'aggressive' financial risk profile. Our business risk assessment is based on the company's weak operating performance, lower profitability, and participation in the challenging newspaper publishing industry, which is characterized by declining advertising and circulation revenues, digital media substitution, and pricing pressures. We believe the newspaper industry is facing long-term secular pressures related to market share erosion toward online and other forms of advertising. Partially offsetting these business risk factors, in our opinion, is the company's solid market position in Canadian newspaper publishing. Our financial risk assessment is based on Postmedia's aggressive financial policy and weak credit protection measures," S&P said. "The negative outlook reflects Standard & Poor's view of the ongoing challenges Postmedia faces with revenue and profitability declines given difficult industry fundamentals. Downward pressure on the ratings could result from further deterioration in the company's operating performance or adjusted debt to EBITDA above 4.5x or less than a 15% cushion within the financial covenants. We could revise the outlook to stable if the company demonstrates sustainable improvement in its operating performance, including revenue growth and margin stability, which should result in adequate covenant cushion," S&P said. QUALITY DISTRIBUTION: To Buy Bice and RM Resources for $79.3MM -------------------------------------------------------------- Quality Distribution, Inc., announced that certain of its wholly- owned subsidiaries have entered into definitive agreements to acquire the operating assets of Wylie Bice Trucking, LLC, and the operating assets and rights of RM Resources, LLC, for an aggregate purchase price of $79.3 million, plus potential additional consideration of $19.0 million, if certain future operating and financial performance criteria are satisfied. The transactions are expected to close by the end of the second quarter, subject to customary closing conditions. Headquartered in Killdeer, ND, Bice is a leading provider of transportation services to the unconventional oil and gas industry within the Bakken shale region, primarily hauling fresh water, flowback and production water, and oil for numerous energy customers. The flowback and production water Bice hauls is primarily disposed of utilizing four existing salt water injection wells owned and operated by RM. "The acquisition of Bice and RM represents the single-most significant step in expanding and diversifying our energy logistics business," said Gary Enzor, Quality's Chief Executive Officer. "The Bice and RM operations are top-tier transportation and disposal well providers in the fast growing Bakken shale region, and we are confident that we can build on their already solid platform. This transaction also supports our strategy to broaden our reach into key oil-rich shales. When we combine this Bakken acquisition with our existing Eagle Ford shale presence, Quality's energy logistics business will be more diversified and balanced between oil producing fields and our predominantly gas producing presence in the Marcellus shale. We are confident these transactions will further strengthen our customer offering, as we are fast becoming a water and oil hauling logistics solutions provider across multiple shales on a more national scale." On a combined basis for its most recent fiscal year ended Dec. 31, 2011, Bice and RM had revenues of approximately $106.0 million and Adjusted EBITDA of approximately $12.7 million. Adjusted EBITDA excludes approximately $0.9 million of charges not expected to recur. Quality expects the collective acquisitions to be accretive to earnings beginning in the third quarter of 2012. Mr. Enzor continued, "Bice and RM have grown rapidly over the last several years and we are excited about their prospects heading into their peak season." The transactions are structured as asset acquisitions, and aggregate consideration will be paid to the sellers as follows: (i) $49.0 million in cash at closing; (ii) a $21.3 million 5-year subordinated seller note bearing interest at a 5% fixed rate; and (iii) $9.0 million in unregistered shares of Quality common stock. An additional $19.0 million may be payable in cash one year after the anticipated closing date, contingent upon the collective businesses meeting certain future operating and financial performance criteria. Wylie C. Bice, President of Bice, stated: "We believe that Quality is an ideal partner for us and we are excited about joining the team. Opportunities in the Bakken shale continue to grow, and combining with Quality provides us with access to growth capital and enables us to leverage their capabilities to capitalize on this dynamic market." Bice operates two trucking terminals in North Dakota utilizing approximately 500 drivers, making it one of the largest haulers of fresh and disposal water and oil in the Bakken shale. Bice is principally an asset light business as the company primarily utilizes independent contractors who own their own equipment. RM has four existing disposal wells and is expected to add another well prior to the anticipated closing of the acquisitions; RM is required to deliver a sixth well within 6 months of the anticipated closing date, adding significant disposal capacity. About Quality Distribution Quality Distribution, LLC, and its parent holding company, Quality Distribution, Inc., are headquartered in Tampa, Florida. The company is a transporter of bulk liquid and dry bulk chemicals. The company's 2010 revenues are approximately $686 million. Apollo Management, L.P., owns roughly 30% of the common stock of Quality Distribution, Inc. The Company reported net income of $23.43 million on $745.95 million of total operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $7.40 million on $686.59 million of total operating revenues during the prior year. The Company's balance sheet at March 31, 2012, showed $330.79 million in total assets, $398.38 million in total liabilities, and a $67.58 million total shareholders' deficit. Bankruptcy Warning The Company had consolidated indebtedness and capital lease obligations, including current maturities, of $307.1 million as of Dec. 31, 2011. The Company must make regular payments under the New ABL Facility and its capital leases and semi-annual interest payments under its 2018 Notes. The New ABL Facility matures August 2016. However, the maturity date of the New ABL Facility may be accelerated if the Company defaults on its obligations. If the maturity of the New ABL Facility or such other debt is accelerated, the Company does not believe that it will have sufficient cash on hand to repay the New ABL Facility or such other debt or, unless conditions in the credit markets improve significantly, that the Company will be able to refinance the New ABL Facility or such other debt on acceptable terms, or at all. The failure to repay or refinance the New ABL Facility or such other debt at maturity will have a material adverse effect on the Company's business and financial condition, would cause substantial liquidity problems and may result in the bankruptcy of the Company or its subsidiaries. Any actual or potential bankruptcy or liquidity crisis may materially harm the Company's relationships with its customers, suppliers and independent affiliates. * * * As reported by the Troubled Company Reporter on Feb. 18, 2011, Moody's Investors Service said the $38 million public offering of 4 million shares of Quality Distribution's common stock on Feb. 9, 2011, does not affect Quality's 'Caa1' corporate family and probability of default ratings with a positive outlook. However, Moody's notes that the intended debt reduction at par from $17.5 million of the proceeds would be viewed favorably. In the Nov. 8, 2010 edition of the TCR, Standard & Poor's Ratings Services said that it has raised its corporate credit ratings on U.S.-based Quality Distribution Inc. to 'B' from 'B-'. S&P also removed the ratings from CreditWatch, where S&P had placed them with positive implications on Oct. 28, 2010, following the launch of the bond offering. The outlook is stable. "The rating action reflects the improvement in Quality Distribution's financial profile after completing its refinancing," said Standard & Poor's credit analyst Anita Ogbara. "Following the transaction, S&P expects Quality Distribution to benefit from lower interest expense, improved cash flow adequacy, and a substantial reduction in debt maturities over the next few years." QUALITY DISTRIBUTION: Reports $6.7 Million Net Income in Q1 ----------------------------------------------------------- Quality Distribution, Inc., reported net income of $6.70 million on $191.91 million of total operating revenues for the three months ended March 31, 2012, compared with net income of $2.72 million on $177.91 million of total operating revenues for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $330.79 million in total assets, $398.38 million in total liabilities and a $67.58 million total shareholders' deficit. "I am pleased with the Company's growth in earnings this quarter, especially with the progress we have made entering the energy markets," said Gary Enzor, Chief Executive Officer. "We are making tangible progress in improving our chemical logistics driver counts and continue to see solid performance from our intermodal and energy logistics businesses." A copy of the press release is available for free at: http://is.gd/8QBFIZ About Quality Distribution Quality Distribution, LLC, and its parent holding company, Quality Distribution, Inc., are headquartered in Tampa, Florida. The company is a transporter of bulk liquid and dry bulk chemicals. The company's 2010 revenues are approximately $686 million. Apollo Management, L.P., owns roughly 30% of the common stock of Quality Distribution, Inc. The Company reported net income of $23.43 million on $745.95 million of total operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $7.40 million on $686.59 million of total operating revenues during the prior year. Bankruptcy Warning In its Form 10-K for 2011, the Company noted that it had consolidated indebtedness and capital lease obligations, including current maturities, of $307.1 million as of Dec. 31, 2011. The Company must make regular payments under the New ABL Facility and its capital leases and semi-annual interest payments under its 2018 Notes. The New ABL Facility matures August 2016. However, the maturity date of the New ABL Facility may be accelerated if the Company defaults on its obligations. If the maturity of the New ABL Facility or such other debt is accelerated, the Company does not believe that it will have sufficient cash on hand to repay the New ABL Facility or such other debt or, unless conditions in the credit markets improve significantly, that the Company will be able to refinance the New ABL Facility or such other debt on acceptable terms, or at all. The failure to repay or refinance the New ABL Facility or such other debt at maturity will have a material adverse effect on the Company's business and financial condition, would cause substantial liquidity problems and may result in the bankruptcy of the Company or its subsidiaries. Any actual or potential bankruptcy or liquidity crisis may materially harm the Company's relationships with its customers, suppliers and independent affiliates. QUICKSILVER RESOURCES: S&P Lowers Corporate Credit Rating to 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Quicksilver Resources Inc. to 'B' from 'B+'. The outlook is negative. "The downgrade primarily reflects the prospects for weaker profitability and deteriorating credit protection measures at Quicksilver following the recent revision of our natural gas pricing assumptions. We recently reduced our natural gas pricing assumptions to $2.00 per million Btu (mmBtu) from $3.00/mmBtu in 2012, to $2.75 from $3.25/mmBtu in 2013, and to $3.50 from $4.00/mmBtu in 2014. Natural gas constitutes about 80% of Quicksilver's total equivalent production. Although the company has hedged about 65% of this year's and 45% of next year's natural gas volumes at above market prices, we have reduced our 2012 and 2013 EBITDAX expectations given lower natural gas price realizations on the unhedged portion of Quicksilver's natural gas production," S&P said. "The rating action reflects our view that debt-to-EBITDAX (EBITDA before exploration expense) will increase above levels that are appropriate for the 'B+' rating category in 2012," Said Standard & Poor's credit analyst Carin Dehne-Kiley. "Based on this year's capital budget of $370 million, we estimate the company's debt to EBITDAX will approach 4.9x by year-end 2012 and could exceed 6.0x at year-end 2013, up from 4.1x at the end of 2011." "Our revised 'B' rating on Ft. Worth, Texas-based Quicksilver reflects the company's 'vulnerable' business risk and 'aggressive' financial risk. Our assessment of the company's business risk is based on its participation in the cyclical and capital-intensive E&P industry and its vulnerability to the currently weak natural gas market, given that gas accounts for about 80% of current production. The ratings also reflect the company's relatively large proven reserve base for the rating category, low cost structure, above market-priced hedges and adequate liquidity," S&P said. RAAM GLOBAL: S&P Affirms 'B-' Corp. Credit Rating; Outlook Neg -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on RAAM Global Energy Co. to negative from stable and affirmed the 'B-' corporate credit rating. "The outlook revision on RAAM reflects our expectation that the company's liquidity will weaken as a result of depressed natural gas prices (under our revised price assumptions) and its aggressive capital spending program of $177 million in 2012 to develop its onshore oil properties," said Standard & Poor's credit analyst Susan Ding. "We expect the company to face funding issues in 2013 if weak natural gas prices persist." "The outlook is negative, reflecting our expectation that lower natural gas prices will weaken the company's cash flow and liquidity. We could lower the rating if liquidity drops below $50 million. We could revise the outlook to stable if the company is able to strengthen its liquidity position and improve its cash flows, although we deem it unlikely the company would reduce its capital spending due to its desire to grow onshore oil and liquids volumes," S&P said. RE LOANS: Court Extends Exclusive Solicitation Period to June 30 ---------------------------------------------------------------- R.E. Loans, LLC, et al., ask the U.S. Bankruptcy Court for the Northern District of Texas to extend the exclusive period in which only the Debtors may solicit acceptances of a Chapter 11 plan to June 30, 2012, from May 31, 2012. On Feb. 1, 2012, the Debtors filed their Joint Chapter 11 Plan of Reorganization dated Feb. 1, 2012, and the Disclosure Statement for the Debtors' Joint Chapter 11 Plan of Reorganization, dated March 2, 2012. On March 2, 2012, after discussions with their creditors' constituencies, the Debtors filed their First Amended Joint Chapter 11 Plan of Reorganization and the Disclosure Statement for the Debtors' First Amended Joint Chapter 11 Plan of Reorganization, dated March 2, 2012. After further discussions with their creditors' constituencies and to resolve a number of objections made to the Amended Disclosure Statement, on April 26, 2012, the Debtors filed their Second Amended Joint Chapter 11 Plan of Reorganization, dated April 26, 2012, and their Disclosure Statement for the Debtors' Second Amended Joint Chapter 11 Plan of Reorganization, dated April 26, 2012. Prior to and since the filing of the original Plan and the Disclosure Statement, the Debtors have been engaged in ongoing plan discussions with the Official Committee of Noteholders, Wells Fargo Capital Finance, LLC, the Debtors' prepetition and debtor in possession financing lender, and Mortgage Fund '08, LLC, one of the Debtors' largest general unsecured creditors. The Debtors are hopeful that with the requested extension of the Solicitation Exclusivity Period, they can reach a consensus on a revised plan with these key creditors. The Debtors seek to negotiate a consensual plan of reorganization and not for the purpose of undue delay. On April 24, 2012, the Debtors, the Noteholders Committee, Wells Fargo, MF08, and Development Specialists, Inc., the former collateral agent for the Noteholders, participated at mediation in Dallas, Texas, to attempt to reach agreement on a consensual plan of reorganization, among other related issues, with the Hon. Randall Newsome, former U.S. Bankruptcy Judge, as mediator. A global solution was not reached. However, the Debtors believe that the mediation may have aided them in their efforts to reach a consensual plan of reorganization with the Noteholders Committee, Wells Fargo, and MF08, which will result in the Third Amended Plan and Third Amended Disclosure Statement. The Debtors' cases are large and complex and satisfy the first exclusivity factor. The Debtors have also fully complied with all reporting and other requirements. About R.E. Loans R.E. Loans, LLC, was, for many years, in the business of providing financing to home builders and developers of real property. R.E. Future LLC and Capital Salvage own the real property obtained following foreclosure proceedings initiated by R.E. Loans against its borrowers. R.E. Loans is the sole shareholder of Capital Salvage and the sole member of R.E. Future. B-4 Partners LLC is the sole member of R.E. Loans. As a result of the multiple defaults by R.E. Loans' borrowers, R.E. Loans has transitioned from being a lender to becoming a property management company. Lafayette, California-based R.E. Loans, R.E. Future and Capital Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge Barbara J. Houser presides over the case. Stutman, Treister & Glatt Professional Corporation, in Los Angeles, and Gardere, Wynne Sewell LLP, in Dallas, represent the Debtors as counsel. James A. Weissenborn at Mackinac serves as R.E. Loans' chief restructuring officer. The Debtors tapped Hines Smith Carder as their litigation and outside general counsel. The Debtors tapped Alixpartners, LLP as noticing agent, and Latham & Watkins LLP as special counsel in real estate matters. R.E. Loans disclosed $713,622,015 in assets and $886,002,786 in liabilities as of the Chapter 11 filing. Akin Gump Strauss Hauer & Feld LLP, in Dallas, represents the Official Committee of Note Holders as counsel. REDDY ICE: Unsecured Creditors Committee Retain Advisors -------------------------------------------------------- BankruptcyData.com reports that Reddy Ice Holdings' official committee of unsecured creditors filed with the U.S. Bankruptcy Court motions to retain: -- Pachulski Stang Ziehl & Jones (Contact: Robert J. Feinstein) as attorney/lead counsel at hourly rates ranging from $200 to $995; -- Cox Smith Matthews Incorporated (Contact: George H. Tarpley) as attorney at hourly rates ranging from $180 to $565; and -- BDO USA (Contact: William K. Lenhart) as financial advisor at these hourly rates: partner/managing director at $475 to $795, director/senior manager/senior vice president at $375 to $525, manager/vice president at $325 to $425, senior/analyst at $200 to $350 and staff at $150 to $225. About Reddy Ice Reddy Ice Holdings Inc. and wholly owned subsidiary Reddy Ice Corp. manufacture and distribute packaged ice in the United States. As of Dec. 31, 2011, the Company had assets totaling $434 million and total liabilities of $531 million. The bulk of the liabilities were total debt outstanding of $471.5 million. Reddy Holdings and Reddy Corp. on April 12, 2012, filed voluntary Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Case Nos. 12- 32349 and 12-32350) together with a plan of reorganization and accompanying disclosure statement to complete a previously announced plan to strengthen its balance sheet and ensure strong financial footing for the future. As part of the restructuring, Reddy Ice seeks to pursue a strategic acquisition of all or substantially all of the businesses and assets of Arctic Glacier Income Fund and its subsidiaries, including Arctic Glacier Inc., a major producer, marketer and distributor of packaged ice in North America. Arctic Glacier on Feb. 22, 2012, filed for protection under the Companies' Creditors Arrangement Act in Canada and Chapter 15 of the Bankruptcy Code in the United States. Arctic is seeking sale or investment proposals from qualified bidders. Reddy Ice's Plan provides for the restructuring of the Company's obligations with respect to $300 million of First Lien Notes; $139.4 million of Second Lien Notes; and $11.7 million of Discount Notes. If the Plan is approved, all Second Lien Notes will be exchanged and will be retired and cancelled and all Discount Notes will be cancelled. Reddy Ice said the Plan has the support of a majority of its lenders and major creditors, led by Centerbridge Capital Partners II, L.P. A hearing to approve the Disclosure Statement and confirm the Plan has been set for May 18, 2012. Judge Stacey G. Jernigan presides over the case. Reddy Ice's financial advisors are Jefferies & Company, Inc. and FTI Consulting, Inc. Kurtzman Carson Consultants serves as claims and notice agent. Centerbridge Partners is represented by Jonathan S. Zinman, Esq., Joshua A. Sussberg, Esq., James H.M. Sprayregen, Esq., and Anup Sathy, Esq., at Kirkland & Ellis. Macquarie Bank Limited is represented by Sarah Hiltz Seewer, Esq., and David R. Seligman, Esq., also at Kirkland & Ellis. The ad hoc group of First Lien and Second Lien Noteholders is represented by Joshua Andrew Feltman, Esq., at Wachtell Lipton Rosen & Katz. Wells Fargo Bank, National Association, serves as First Lien and Second Lien Agent. REICHHOLD INDUSTRIES: S&P Raises Corporate Credit Rating to 'B-' ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on Durham, N.C.-based Reichhold Industries Inc. to 'B-' from 'D'. The outlook is stable. "At the same time, Standard & Poor's assigned its 'CCC+' issue- level rating to Reichhold's $206.6 million senior secured notes due 2017, with a recovery rating of '5', indicating the expectation for a modest (10% to 30%) recovery in the event of a payment default," S&P said. "The upgrade reflects our reassessment of Reichhold's credit profile following the completion of the exchange offer," said Standard & Poor's credit analyst Seamus Ryan. "While the exchange did not reduce leverage, the payment-in-kind feature of the newly issued notes increases the company's financial flexibility and cash flow." "The company remains highly leveraged, and we expect reported debt to increase over the next two years as a result of the PIK interest payments," he added. "Nevertheless, we believe Reichhold's operating performance will improve over the next year, as key transportation and construction end markets gradually recover and the company benefits from recent cost cuts." "Reichhold produces unsaturated polyester resins used for composite applications and resins used for coatings by architectural and industrial customers. The company has low EBITDA margins, exposure to cyclical end-markets, and high leverage, somewhat offset by its established market positions in its resins product lines and some geographic diversity of sales. Standard & Poor's characterizes Reichhold's business risk profile as 'vulnerable' and its financial risk profile as 'highly leveraged.'" REFCO INC: Judge Keeps $80MM Trustee Suit in Bankruptcy Court ------------------------------------------------------------- Lana Birbrair at Bankruptcy Law360 reports that U.S. District Judge Jed S. Rakoff on Wednesday sent back to bankruptcy court an adversary suit brought by the trustee for Refco Inc. against executives accused of fraudulently receiving $80 million in funds in connection with a scheme to hide the bank's impending insolvency. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- was a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries were members of principal U.S. and international exchanges, and were among the most active members of futures exchanges in Chicago, New York, London and Singapore. Refco was also a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco was one of the largest global clearing firms for derivatives. The Company had operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc., and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. REGAL ENTERTAINMENT: Swings to $46.30 Million Net Income in Q1 -------------------------------------------------------------- Regal Entertainment Group filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $46.30 million on $684.90 million of total revenue for the quarter ended March 29, 2012, compared with a net loss of $23.70 million on $570.90 million of total revenue for the three months ended March 31, 2011. The Company's balance sheet at March 29, 2012, showed $2.30 billion in total assets, $2.85 billion in total liabilities, and a $552.60 million total deficit. A copy of the Form 10-Q is available for free at: http://is.gd/H2KIjg About Regal Entertainment Group Based in Knoxville, Tennessee, Regal Entertainment Group (NYSE: RGC) -- http://www.REGmovies.com/-- is the largest motion picture exhibitor in the world. Regal's theatre circuit, comprising Regal Cinemas, United Artists Theatres and Edwards Theatres, operates 6,739 screens in 545 locations in 38 states and the District of Columbia. Regal operates theatres in 43 of the top 50 U.S. designated market areas. * * * Regal Entertainment carries 'B1' corporate family and probability of default ratings from Moody's Investors Service, 'B+' issuer default rating from Fitch Ratings, and 'B+' corporate credit rating from Standard & Poor's Ratings Services. Moody's said in February 2011 that Regal's B1 CFR reflects the trade-offs between the relative stability and the small magnitude of the company's cash flow stream. With no change expected in either parameter, and with very good liquidity, the rating outlook is stable. S&P said in February that the rating reflects S&P's view that the company's aggressive financial policies will likely cause leverage to remain elevated over the intermediate term. Furthermore, Regal's revenue and EBITDA trends are highly dependent on the performance of the U.S. box office. Other rating factors include the company's participation in the mature and highly competitive U.S. movie exhibition industry, exposure to the fluctuating popularity of Hollywood films, and the long-term risk of increased competition from the proliferation of entertainment alternatives. RESIDENTIAL CAPITAL: Ally Board to Meet to Authorize Bankruptcy --------------------------------------------------------------- Dan Fitzpatrick and Mike Spector at Dow Jones' Daily Bankruptcy Review report that the board of Ally Financial Inc.'s ailing mortgage unit is expected to meet Sunday to authorize a bankruptcy filing, said people familiar with the situation. Bloomberg News, citing people with knowledge of the talks, reported early this week that Residential Capital LLC will file for Chapter 11 reorganization early next week. The business will be sold to Fortress Investment Group LLC. Financing of $1.45 billion has been arranged for the ResCap Bankruptcy, according to the Bloomberg report. A ResCap sale is part of a strategy for parent Ally Financial to reduce assets and debt in anticipation of a public offering to pay off some of a $17 billion government bailout. Ally Financial, according to reports, has already received U.S. Treasury Department approval to put its Residential Capital unit into bankruptcy as the government seeks to recover bailout funds. About Ally Financial & Rescap Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. Residential Capital is Ally's mortgage subsidiary. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3% stake. Private equity firm Cerberus Capital Management LP keeps 14.9%, while General Motors Co. owns 6.7%. Ally reported a net loss of $157 million in 2011, compared with net income of $1.07 billion in 2010. Net income was $310 million for the three months ended March 31, 2012. Ally's balance sheet at March 31, 2012, showed $186.35 billion in total assets, $166.68 billion in total liabilities and $19.66 billion in total equity. Sources told Reuters in March 2012 that White & Case, which announced in January it represents some ResCap secured bondholders, is currently representing investors who hold more than 45% of junior secured notes at ResCap. The sources also said billionaire Warren Buffett's Berkshire Hathaway has another 45% of the junior secured notes and also holds a significant portion of ResCap unsecured notes that mature in May 2012. In April 2012, ResCap didn't make a semi-annual $20 million interest payment on $473.4 million of senior unsecured notes due April 2013. The U.S. Treasury owns a 73.8% stake in Ally after a bailout during the financial crisis in 2008, while GM and its trust have 9.9% and Cerberus Capital Management owns 8.9%. * * * In February 2012, Fitch Ratings downgraded the long-term Issuer Default Rating (IDR) and the senior unsecured debt rating of Ally Financial and its subsidiaries to 'BB-' from 'BB'. The Rating Outlook is Negative. The downgrade primarily reflects deteriorating operating trends in ResCap, which has continued to be a drag on Ally's consolidated credit profile, as well as exposure to contingent mortgage-related rep and warranty and litigation issues tied to ResCap, which could potentially impact Ally's capital and liquidity levels. RPM AUTOWORX: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: RPM Autoworx Incorporated 26 Amberwood Circle Savannah, GA 31405 Bankruptcy Case No.: 12-40879 Chapter 11 Petition Date: May 7, 2012 Court: U.S. Bankruptcy Court Southern District of Georgia (Savannah) Debtor's Counsel: Richard C. E. Jennings, Esq. LAW OFFICES OF SKIP JENNINGS, P.C. 115 W. Oglethorpe Avenue Savannah, GA 31401 Tel: (912) 234-6872 Fax: (912) 236-7549 E-mail: skipjenningspc@comcast.net Scheduled Assets: $131,700 Scheduled Liabilities: $1,346,842 A copy of the Company's list of its 17 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/gasb12-40879.pdf The petition was signed by Richard Broussard, CEO. Affiliates that filed separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Richard J. Broussard, Jr. & Moira Sheehan 11-41272 06/22/11 RIMO Landworx, LLC 12-40465 03/06/12 RYLAND GROUP: Files Form 10-Q, Incurs $5.1-Mil. Net Loss in Q1 -------------------------------------------------------------- The Ryland Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $5.11 million on $215.86 million of total revenues for the three months ended March 31, 2012, compared with a net loss of $19.53 million on $167.67 million of total revenues for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $1.54 billion in total assets, $1.06 billion in total liabilities and $479.91 million in total equity. A copy of the Form 10-Q is available for free at: http://is.gd/EZoVrw About Ryland Group Headquartered in Calabasas, California, The Ryland Group, Inc. (NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's largest homebuilders and a leading mortgage-finance company. Since its founding in 1967, Ryland has built more than 285,000 homes and financed more than 240,000 mortgages. The Company currently operates in 15 states and 19 homebuilding divisions across the country and is listed on the New York Stock Exchange under the symbol "RYL." The Company reported a net loss of $50.75 million in 2011, a net loss of $85.14 million in 2010, and a net loss of $162.47 million in 2009. * * * Ryland Group carries 'B1' corporate family and probability of default ratings, with stable outlook, from Moody's. It has 'BB-' issuer credit ratings, with stable outlook, from Standard & Poor's. SALERNO PINCENTE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Salerno Pincente Ristorante, LLC 9301 W. 63rd Street Hodgkins, IL 60525 Bankruptcy Case No.: 12-18900 Chapter 11 Petition Date: May 8, 2012 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtor's Counsel: Chester H. Foster, Jr., Esq. FOSTER & SMITH 3825 W 192nd St. Homewood, IL 60430 Tel: (708) 799-6300 Fax: (708) 799-6339 E-mail: chf@fostersmithlaw.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/ilnb12-18900.pdf The petition was signed by Andrew Salerno, manager. SALLY HOLDINGS: Share Repurchase No Impact on Moody's 'Ba3' CFR --------------------------------------------------------------- Moody's Investors Service said that while Sally Holdings LLC's announcement that it agreed to repurchase approximately $200 million of its common stock directly from funds associated with Clayton, Dubilier, & Rice (CD&R) is a credit negative, it will have no impact on the company's Ba3 Corporate Family Rating or stable outlook. The principal methodology used in rating Sally Holdings LLC was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Sally Holdings LLC, based in Denton, Texas, is an international retailer and distributor of beauty supplies. Its two subsidiaries, Sally Beauty Supply and Beauty Supply Group (BSG), sell and distribute beauty products to individual retail consumers and salon professionals. Products are distributed through a network of over 4,300 stores in 12 countries. Revenues exceeded $3.4 billion for the twelve month period ended March 31, 2012. SEAWORLD PARKS: S&P Lowers Sr. Secured Credit Debt Rating to 'BB-' ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its recovery rating on Orlando, Fla.-based SeaWorld Parks & Entertainment Inc.'s senior secured credit facility to '2', indicating its expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default, from '1'. "In addition, in accordance with our notching criteria, we lowered our issue-level rating on the senior secured credit facility to 'BB-' from 'BB' and removed the rating from CreditWatch, where it was placed with Negative implications on March 13, 2012. The revised recovery rating reflects the increase in senior secured debt following the addition of the $500 million incremental term loan B, which reduced recovery prospects under our simulated default scenario. The company's senior secured credit facility now consists of a $172.5 million revolver, a $160 million term loan A, and a $1.3 billion term loan B," S&P said. "Our 'B+' corporate credit rating on SeaWorld remains unchanged. The rating outlook is stable," S&P said. "Our 'B+' corporate credit rating on SeaWorld reflects our assessment of the company's business risk profile as 'fair' and our assessment of the company's financial risk profile as 'aggressive', according to our criteria," S&P said. "Our assessment of SeaWorld's business risk profile as fair reflects recent strong performance, including improvement in its EBITDA margin from the realization of cost-reduction efforts, and our belief the company will maintain an EBITDA margin in the high- 20% area," said Standard & Poor's credit analyst Ariel Silverberg. "While this level of profitability is still below other rated theme park operators, it compares favorably with many issuers in the leisure space. The assessment also reflects our belief that the company will continue to benefit from productive investments made in the business on new attractions. We believe these positive factors are partially offset by the company's EBITDA concentration in a few of its parks, its reliance on consumer discretionary spending, the capital intensity of the theme park business, and the seasonal nature of several of its parks." "Our assessment of SeaWorld's financial risk profile as aggressive reflects our belief that the owners will maintain an aggressive financial policy with respect to distributions, which we believe will result in adjusted leverage remaining around 5x over the long term," S&P said. "Our ratings currently incorporate our expectation for a slight decline in attendance and flat year-over-year per capita spending in 2012, which we believe would translate into a low-single-digit percent decline in revenue. We expect only slight growth in attendance and per-capita spending in 2013. This scenario reflects our economists' current expectation for only modest growth in consumer spending in 2012 and 2013 and for unemployment to remain high (our economists' forecast is for unemployment to remain high, declining to just under 8% through 2013). We remain somewhat cautious that a weaker economic recovery could pressure attendance and per-capita spending this year and our economists are currently forecasting a 20% risk (albeit down from as high as 40% in 2011) of the U.S. falling into a recession. Still, we believe SeaWorld will sustain cost controls and maintain EBITDA margin in the high 20% area, resulting in EBITDA declining only modestly in 2012 and growing slightly in 2013," S&P said. SEQUENOM INC: Steven Cohen Discloses 5.4% Equity Stake ------------------------------------------------------ In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Steven A. Cohen and his affiliates disclosed that, as of May 7, 2012, they beneficially own 6,128,919 shares of common stock of Sequenom, Inc., representing 5.4% of the shares outstanding. A copy of the filing is available for free at: http://is.gd/gpgqP4 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. 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. SOLO CUP: Moody's Withdraws Ratings After Dart Container Buyout --------------------------------------------------------------- Moody's Investors Service has withdrawn all ratings for Solo Cup Company following its acquisition by Dart Container. Solo's outstanding 10.5% Senior Secured Notes due 2013 and 8.5% Senior Subordinated Notes due 2014 have been called for redemption at 100% of the principal amount plus accrued and unpaid interest to their respective redemption dates of May 21, 2012 and June 4, 2012. The company has no public or rated debt outstanding. Dart Container is privately held, not rated by Moody's and does not publicly file financial statements. The following ratings were withdrawn: Corporate Family Rating, B3 Probability of Default Rating, B3 $200 million asset-based revolver due 2013, Ba2 (LGD 2, 17%). $300 million of senior secured notes due 2013, B2 (LGD3, 41%). $325 million senior subordinated notes due 2014, Caa2 (LGD 5, 86%) Speculative grade liquidity rating SGL-2 The outlook is changed to withdrawn from stable. Ratings Rationale The principal methodology used in rating Solo was Moody's Global Packaging Manufacturers Metal, Glass, and Plastic Containers, published in June 2009. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. SB PARTNERS: SRE Clearing Owns 36% of Units Outstanding ------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, SRE Clearing Services Corporation disclosed that, as of April 30, 2012, it beneficially owns 2791.0 Units of Limited Partnership Interest of SB Partners representing 36% of the Units outstanding. SRE Clearing previously reported beneficial ownership of 2,721.5 Units representing 35.1% as of June 21, 2011. A copy of the amended filing is available for free at: http://is.gd/EjJHxn About SB Partners Milford, Conn.-based SB Partners is a New York limited partnership engaged in acquiring, operating and holding for investment a varying portfolio of real estate interests. As of June 30, 2010, the partnership owns an industrial flex property in Maple Grove, Minnesota and warehouse distribution centers in Lino Lakes, Minnesota and Naperville, Illinois. The Company has a 30% interest in Sentinel Omaha, LLC. Sentinel Omaha is a real estate investment company which currently owns 24 multifamily properties and 1 industrial property in 17 markets. Sentinel Omaha is an affiliate of the partnership's general partner. As reported by the TCR on June 23, 2011, Dworken, Hillman, LaMorte and Sterczala, P.C., in Shelton, Connecticut, did not include a substantial doubt qualification in its report on the Company's 2010 financials. As reported in the Troubled Company Reporter on June 15, 2010, Dworken Hillman expressed substantial doubt about SB Partners' ability to continue as a going concern, following its 2009 results. The independent auditors noted that the partnership's unsecured credit facility matured on Feb. 28, 2009, and the partnership has not yet been able to arrange a replacement loan, extension or refinancing. The Company reported a net loss of $623,117 on $2.61 million of total revenues for the year ended Dec. 31, 2010, compared with a net loss of $23.60 million on $2.58 million of total revenues during the prior year. The Company reported a net loss of $750,526 on $1.89 million of total revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $468,171 on $1.96 million of total revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2011, showed $18.34 million in total assets, $20.75 million in total liabilities and a $2.41 million total partners' deficit. SPRINGLEAF FINANCE: Incurs $47.9-Mil. Net Loss in First Quarter --------------------------------------------------------------- Springleaf Finance Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $47.96 million on $442.08 million of total interest income for the three months ended March 31, 2012, compared with a net loss of $55.17 million on $471.22 million of total interest income for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $15.62 billion in total assets, $14.23 billion in total liabilities and $1.38 billion in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/12ZniO About Springleaf Finance 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. * * * The Troubled Company Reporter said on Feb. 8, 2012, that 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'. Standard & Poor's also said it lowered its issue credit ratings on Springfield's senior secured debt to 'CCC+' from 'B+' and on the company's preferred debt to 'CC' from 'CCC-'. 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. As reported by the Troubled Company Reporter on Sept. 9, 2011, Fitch Ratings has downgraded the Issuer Default Ratings (IDRs) and unsecured debt ratings on Springleaf Finance, Inc. (Springleaf) and affiliates to 'CCC' from 'B-'. The downgrade of Springleaf's IDR was driven by Fitch's continued concerns regarding the company's lack of meaningful liquidity and funding flexibility, as $2 billion of unsecured debt matures in 2012. Minimal progress has been made in implementing a long-term funding plan since the acquisition by Fortress Investment Group LLC (Fortress) in November 2010; therefore, barring meaningful access to the securitization market over the next several months, Springleaf may have insufficient flexibility to address its near- term debt maturities. STEREOTAXIS INC: Agrees to Sell 21.7 Million Common Shares ---------------------------------------------------------- Stereotaxis, Inc., on May 7, 2012, entered into a Stock and Warrant Purchase Agreement with certain institutional investors whereby it agreed to sell an aggregate of approximately 21.7 million shares of the Company's common stock at a price of $0.3361 per share, together with six-year warrants at a price of $0.125 per share to purchase an aggregate of approximately 21.7 million shares of common stock having an exercise price of $0.3361 per share. Each purchaser received a PIPE Warrant to purchase one share of common stock for every share of PIPE Common Stock purchased. The Company anticipates that the transaction will close on May 10, 2012. The sale of securities under the PIPE SPA is subject to certain conditions . Net proceeds from the sale of the securities under the PIPE SPA will be approximately $9.2 million, after placement agent fees and other offering expenses. Oppenheimer & Co, Inc., registered broker dealer, acted as sole placement agent in connection with the sale under the PIPE SPA. The Company plans to use the funds to repay $7 million of the revolving credit facility guaranteed by Alafi Capital and affiliates of Sanderling Venture Partners, for working capital, and for general corporate purposes, as described below. Subordinated Convertible Debentures On May 7, 2012, the Company also entered into a Securities Purchase Agreement with certain institutional investors whereby it agreed to sell an aggregate of approximately $8.5 million in aggregate principal amount of unsecured, subordinated, convertible debentures, which will become convertible into shares of common stock at a conversion price of $0.3361 per share, no later than the date that the Company is required to hold a meeting to approve the Shareholder Approval Matters. The purchasers of the Debentures also received six-year warrants to purchase 25.2 million shares of the Company's common stock at an exercise price of $0.3361 per share. The Company anticipates that the transaction will close on May 10, 2012. Net proceeds from the sale of securities under the Convertible Debt SPA will be approximately $7.5 million, after placement agent fees and other offering expenses, and will be used for working capital and general corporate purposes, subject to certain restrictions set forth in the Convertible Debt SPA. The Placement Agent also acted as placement agent in connection with the sale under the Convertible Debt SPA. In connection with the above closing and funding of the above transactions, the Company and a wholly-owned subsidiary of the Company expect to further amend its Second Amended and Restated Loan and Security Agreement with Silicon Valley Bank to extend the maturity of the current working capital line of credit from May 15, 2012, to March 31, 2013, and decrease the $10 million sublimit for borrowings supported by guarantees from the Lenders to $3 million. Under the revised facility the Company would be required to maintain a minimum liquidity ratio and a minimum tangible net worth as defined in the Amended Loan Agreement. Also in connection with the above closing and funding of the above transactions, the Company and the Subsidiary expect to also enter into an Export-Import Bank Second Loan Modification and Waiver Agreement with Silicon Valley Bank to extend the maturity date of the revolving line of credit under that certain Amended and Restated Export-Import Bank Loan and Security Agreement dated Nov. 30, 2011, from May 15, 2012, to March 31, 2013, and reduce the revolving line of credit from $10 million to $5 million. Also in connection with the above closing and funding of the above transactions and with the Silicon Valley Bank extension, the Company entered into a further amendment to the Note and Warrant Purchase Agreement dated Feb. 21, 2008, as amended, with Sanderling Venture Partners and Alafi Capital to decrease from $10 million in aggregate to $3 million, and to further extend, the Lenders' obligation to provide either direct loans to the Company or loan guarantees to the Company's primary bank lender through the earlier of March 31, 2013, the date that the Company elects to extinguish the guarantee, or the date the Company receives $30 million of third party, non-bank financing. The Company expects to grant to the Lenders warrants to purchase an aggregate of approximately 2.3 million shares of Common Stock in exchange for their extension. The 2013 Extension Warrants would be exercisable at a per share price equal to the closing bid price for Nasdaq purposes on the day prior to the commitment being entered into. The Lenders are affiliates of Fred A. Middleton and Christopher Alafi, respectively, each of whom is a member of the Company's Board of Directors. This facility may also be used by the Company to guarantee its loan commitments with Silicon Valley Bank, its primary bank lender, through the same extended term. A copy of the Form 8-K is available for free at: http://is.gd/taBDF4 About Stereotaxis Based in St. Louis, Mo., Stereotaxis, Inc., designs, manufactures and markets the Epoch Solution, which is an advanced remote robotic navigation system for use in a hospital's interventional surgical suite, or "interventional lab", that the Company believes revolutionizes the treatment of arrhythmias and coronary artery disease by enabling enhanced safety, efficiency and efficacy for catheter-based, or interventional, procedures. For the year ended Dec. 31, 2011, Ernst & Young LLP, in St. Louis, Missouri, expressed substantial doubt about Stereotaxis' ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. The Company reported a net loss of $32.0 million for 2011, compared with a net loss of $19.9 million for 2010. The Company's balance sheet at March 31, 2012, showed $36.79 million in total assets, $60.16 million in total liabilities and a $23.36 million total stockholders' deficit. STEREOTAXIS INC: Incurs $5.8 Million Net Loss in First Quarter -------------------------------------------------------------- Stereotaxis, Inc., reported a net loss of $5.81 million on $12.28 million of total revenue for the three months ended March 31, 2012, compared with a net loss of $9.54 million on $10.22 million of total revenue for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $36.79 million in total assets, $60.16 million in total liabilities and a $23.36 million total stockholders' deficit. Michael P. Kaminski, President and Chief Executive Officer of Stereotaxis, said, "In the first quarter, we continued to capitalize on strong market response to the release of the Epoch Solution and robust utilization, realizing a 20% improvement in revenue over the prior year quarter. By quarter end, we had completed 25 upgrades to the Niobe ES system in existing sites since its launch in December 2011; on pace with our forecast to achieve 40 upgraded sites during the first half of 2012. We expect Niobe ES system sales will gain momentum throughout the year as we increase reference sites and optimize product value." A copy of the press release is available for free at: http://is.gd/D1bd3H About Stereotaxis Based in St. Louis, Mo., Stereotaxis, Inc., designs, manufactures and markets the Epoch Solution, which is an advanced remote robotic navigation system for use in a hospital's interventional surgical suite, or "interventional lab", that the Company believes revolutionizes the treatment of arrhythmias and coronary artery disease by enabling enhanced safety, efficiency and efficacy for catheter-based, or interventional, procedures. For the year ended Dec. 31, 2011, Ernst & Young LLP, in St. Louis, Missouri, expressed substantial doubt about Stereotaxis' ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. The Company reported a net loss of $32.0 million for 2011, compared with a net loss of $19.9 million for 2010. TECHNEST HOLDINGS: Consummates Merger, Now Known as AccelPath ------------------------------------------------------------- Pursuant to the Agreement and Plan of Merger dated as of May 1, 2012, by and between, Technest Holdings, Inc, and AccelPath, Inc., a wholly-owned subsidiary of Technest, effective as of May 2, 2012, Technest merged with and into AccelPath, with AccelPath being the surviving entity. The Reincorporation Merger was consummated to move the Company's domicile from Nevada to Delaware. The Merger Agreement and Reincorporation Merger were duly approved by the written consent of stockholders of Technest owning at least a majority of the outstanding shares of Technest's common stock, par value $0.0001 per share, dated Feb. 17, 2012. The Reincorporation Merger did not result in any change in headquarters, business, jobs, management, location of any offices or facilities, number of employees, assets, liabilities or net worth. Management, including all directors and officers, remain the same immediately after the Reincorporation Merger. There were no changes in any direct or indirect interests of the current directors or executive officers as a result of the Reincorporation Merger. Following the Reincorporation Merger, the common stock of the Surviving Corporation will be registered under Section 12(g) of the Securities Exchange Act of 1934, as amended by virtue of Rule 12g-3 of the Exchange Act. The CUSIP number for the common stock of the Surviving Corporation is 00433U100. At the effective time of the Reincorporation Merger, each outstanding share of Technest Common Stock automatically was converted into one share of AccelPath Common Stock. Stockholders are not required to exchange their existing stock certificates, which now represent an equal number of shares of AccelPath Common Stock. The common stock of the Surviving Corporation will trade on the OTCBB under the trading symbol ACLP (instead of TCNH.OB). A copy of the Form 8-K is available for free at: http://is.gd/gahPpa About Technest Holdings Bethesda, Md.-based Technest Holdings, Inc., has two primary businesses: AccelPath, which is in the business of enabling pathology diagnostics and Technest, which is in the business of the design, research and development, integration, sales and support of three-dimensional imaging devices and systems. Wolf & Company, P.C., in Boston, Massachusetts, expressed substantial doubt about Technest Holdings' ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations, has negative cash flows from operations, a stockholders' deficit and a working capital deficit. The Company reported a net loss of $2.9 million on $449,937 of revenues for the fiscal year ended June 30, 2011, compared with a net loss of $325,235 on $0 revenue for the fiscal year ended June 30, 2010. The Company's balance sheet as of Sept. 30, 2011, showed $5.51 million in total assets, $6.21 million in total liabilities and a $700,374 total stockholders' deficit. TEKNI-PLEX INC: Moody's Upgrades CFR to 'Caa1', Outlook Stable -------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family and Probability of Default Ratings of Tekni-Plex Inc. to Caa1 from Caa2. Moody's also assigned a Caa1 (LGD 4, 55%) rating to the company's proposed senior secured note offering of $480 million due 2019. The proceeds, along with a $50 million equity investment from the sponsor, will be used to refinance the company's existing 8.75% senior secured notes due 2013 and its outstanding Term Loan. The equity investment has a liquidation preference which accretes at 20% per year compounded annually, which Moody's considers a PIK. The equity investment PIKs at a rate that is a significant percentage of the purchase price compounded annually and has a liquidation preference which includes an amount per share that is significantly above the purcahse price and includes the accreted PIK amount. Moody's will withdraw the ratings on the Term Loan following the closing of the transaction. Moody's took the following rating actions: Ratings assigned: $480 million senior secured notes due 2019, Caa1(LGD 4, 55%) Ratings upgraded: Corporate Family Rating, to Caa1from Caa2 Probability of Default Rating, to Caa1from Caa2 The outlook for the ratings is revised to stable from negative. Ratings Rationale The upgrade of the Corporate Family Rating to Caa1 from Caa2 reflects the improvement in liquidity and reduction in default risk from the refinancing of the term loan and the projected full availability under the company's $60 million ABL revolver pro- forma for the deal. Tekni-Plex has limited cushion under the financial covenants for the current term loan and the refinancing of the instrument to a secured note with only incurrence based covenants will reduce the risk of default as well as improve liquidity. However, both pro-forma cash and total interest coverage will remain weak (the majority of the sponsor's $50 million equity investment and its accretion are included in interest expense and debt according to Moody's standard adjustments). Additionally, the sponsor's net investment in the company will decline as a result of the transaction as the 2nd lien notes are refinanced. The Caa1 Corporate Family Rating reflects Tekni-Plex's low percentage of business under long-term contract with cost pass- through provisions, high percentage of commodity products, and limited pricing power in its competitive, fragmented market. The rating also reflects the company's concentration of sales, poor historical operating performance and small revenue base. The contracted business has lengthy lags and not all costs are passed through. The rating is supported by the high concentration of sales in the food and healthcare markets and some long-term customer relationships. The rating is also supported by some exposure to custom pharmaceutical and medical product end markets and the anticipated benefits from recently completed cost-cutting and rationalization initiatives and acquisitions. The company will also have adequate liquidity pro-forma for the transaction. The ratings are subject to the closing of the deal as proposed and the receipt and review of the final documentation. The stable ratings outlook contemplates reflects an expectation that the company will maintain credit metrics within the rating category and adequate liquidity. The ratings could be downgraded if operating performance, liquidity and/or the competitive and operating environment deteriorate. Specifically, the ratings could be downgraded if free cash flow to debt turns negative and/or EBITA/Interest declines below 1.0 time. The ratings could be upgraded if Tekni-Plex sustainably improves credit metrics and maintains adequate liquidity within the context of a stable operating and competitive environment. Specifically, the ratings could be upgraded if free cash flow to debt remians above 3.0%, debt to EBITDA declines below 6.0 times and EBITA/Interest increases to above 1.3 times. The principal methodology used in rating Tekni-Plex Inc was the Global Packaging Manufacturers: Metal, Glass, and Plastic Containers Industry Methodology published in June 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. TENET HEALTHCARE: Reports $67 Million Net Income in Q1 ------------------------------------------------------ Tenet Healthcare Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $67 million on $2.35 billion of net operating revenues for the three months ended March 31, 2012, compared with net income of $82 million on $2.29 billion of net operating revenues for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $8.54 billion in total assets, $6.99 billion in total liabilities, $16 million in redeemable noncontrolling interests in equity of consolidated subsidiaries, and $1.53 billion in total equity. "Our volume growth metrics again rank among the very strongest in the investor-owned sector," said Trevor Fetter, president and chief executive officer. "It is especially encouraging that much of our volume growth is concentrated in the service lines we targeted for growth, including orthopedic and spinal surgeries, major trauma, and gastrointestinal disorders. The quarter's performance makes it abundantly clear that when individuals need immediate medical care they are increasingly turning to their local Tenet hospital. This is evidenced by the 5.2 percent increase in emergency department visits we achieved in the quarter. Our solid first quarter performance allowed us to raise our 2012 Outlook for Adjusted EBITDA by an additional $25 million. This was our second Outlook increase this year." A copy of the Form 10-Q is available for free at: http://is.gd/rS0ZNF About Tenet Healthcare Dallas, Texas-based Tenet Healthcare Corporation (NYSE: THC) -- http://www.tenethealth.com/-- is a health care services company whose subsidiaries and affiliates own and operate acute care hospitals, ambulatory surgery centers and diagnostic imaging centers. * * * Fitch Ratings in May 2012 upgraded Tenet Healthcare's ratings, including the company's Issuer Default Rating (IDR), to 'B' from 'B-'. The Rating Outlook is Stable. 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. + + + This concludes the Troubled Company Reporter's coverage of Tenet Healthcare until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. TRANSALTA CORPORATION: Moody's Issues Summary Credit Opinion ------------------------------------------------------------ Moody's Investors Service issued a summary credit opinion on TransAlta Corporation and includes certain regulatory disclosures regarding its ratings. The release does not constitute any change in Moody's ratings or rating rationale for TransAlta Corporation Moody's current ratings on TransAlta Corporation are: Senior Unsecured foreign currency ratings of Baa2 Senior Unsec. Shelf foreign currency ratings of (P)Baa2 Pref. Shelf foreign currency ratings of (P)Ba1 Ratings Rationale TransAlta's Baa2 senior unsecured rating was placed under review for possible downgrade on April 19, 2012. The review follows analysis of the December, 2011 financial statements and consideration of the potential impact that the Sundance 1 & 2 arbitration decision could have on TransAlta's financial metrics. The review will assess results for the first six months and will focus on the company's cash flow, capital expenditure and dividend expectations for 2012 and 2013. In addition, the review will incorporate the pending Sundance 1 & 2 arbitration decision which is expected around mid-year. Approximately 44% of TransAlta's generation is effectively rate-regulated until approximately 2020 and in aggregate, TransAlta's portfolio is highly contracted for relatively long tenors. The rating reflects the inherent risks in TransAlta's wholesale power generation and proprietary trading business model which the company manages through its conservative hedging strategy. TransAlta's financial metrics are relatively weak and are not recovering as rapidly as Moody's had expected following the acquisition of KHD in 2009 due to lower trading profits and the current weak markets for power. The review reflects Moody's concern that TransAlta may not achieve financial metrics consistent with its Baa2 rating. TransAlta currently maps to a Baa3 under Moody's Unregulated Utilities and Power Companies rating grid. What Could Change the Rating - Up TransAlta's rating could be stabilized at the Baa2 level if it is able to demonstrate a sustainable improvement in its financial metrics including CFO pre-WC interest cover of approximately 4.5x and CFO pre-WC/Debt above 21%. Moody's notes that these levels are within the ranges targeted by management. Given management's targeted range of financial metrics and Moody's current understanding of TransAlta's business model, Moody's does not believe that TransAlta will achieve the level of financial metrics that would be required to support a rating upgrade to Baa1. An increase in TransAlta's rating would require financial metrics in the Baa2 range or better such as CFO pre-WC interest coverage in excess of 6x and CFO pre-WC/Debt above 30%. What Could Change the Rating - Down TransAlta's rating could be negatively impacted by some combination of the following: Any material reduction in the level and duration of contractedness, for instance as a result of a material acquisition of merchant assets A significant expansion of, or increase in, the risk profile of proprietary trading activities. Failure to achieve a sustainable improvement in financial metrics such as CFO pre-WC interest cover of approximately 4.5x or CFO pre-WC/Debt above 21%. The principal methodology used in this rating was Unregulated Utilities and Power Companies published in August 2009. TOWN CENTER: Doral District to Open June 15 Auction --------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida entered an order (i) authorizing the sale of Town Center at Doral, LLC, et al.'s assets outside of the ordinary course of business; and (ii) approving sale and bid procedures and certain bid protections. On April 12, 2012, Plan Proponents -- Landmark at Doral Community Development District, U.S. Bank, National Association, solely as indenture trustee with regard to the bonds and under their indenture, and Florida Prime Holdings, LLC -- filed a sale motion. The Court ordered that, among other things: 1. The District will act as the stalking horse bidder, and the District's stalking horse bid and the asset purchase agreement in the amount of $68.5 million to which the payment of certain cure costs, if any, will be added is approved. At the auction, if an auction is necessary, the District will be entitled to credit bid up to $79 million of the District's secured claim. If the District is the successful bidder, the full amount of any credit bid by the District will be applied dollar for dollar, toward satisfaction of the secured District claim against the Debtors, but the sale will not be free and clear of all liens, claims and encumbrances. 2. The sale assets will consist of substantially all of the Debtors' assets. 3. The Debtors are authorized to sell the property through an auction, if necessary. 4. The Debtors' estates will close the sale with the successful bidder within five days after entry of both the final sale order and the confirmation order. 5. The auction of the property will be conducted on June 15, 2012, at 10:00 a.m., at the offices of Arnstein & Lehr LLP located at 200 S. Biscayne Blvd., Suite 3600, Miami, Florida. Qualified bids are due 5:00 p.m. five business days prior to the auction. 6. The sale hearing is scheduled for June 18, at 2:00 p.m. A full-text copy of the order containing the bid procedures is available for free at http://bankrupt.com/misc/TOWNCENTER_sale_order.pdf About Town Center About Town Center Town Center at Doral, LLC, Landmark at Doral East, LLC, Landmark at Doral South, LLC, Landmark Club at Doral, LLC, and Landmark at Doral Developers, LLC, companies associated with the aborted Landmark at Doral development, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case Nos. 11-35884 to 11-35888) on Sept. 19, 2011, almost three years after AmTrust Bank sought to foreclose on the project. Town Center at Doral, LLC, posted assets of $29,297,300 and liabilities of $166,133,171. Isaac Kodsi signed the petitions as vice president. The Property consists of 16 individual tracts of land that remain undeveloped with the exception of an unfinished 4-level parking garage. Prior to the Petition Date, the Debtors had sought and obtained approvals for the development of residential units (townhomes and condominiums), retail/office/mixed use, and flex office at the Property. Mindy A. Mora, Esq., and Tara V. Trevorrow, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, in Miami, serve as counsel to the Debtors. Glenn D. Moses, Esq., at Genovese, Joblove & Battista, P.A., IN Miami, represents the official committee of unsecured creditors. Cleveland, Ohio-based AmTrust filed for foreclosure in October 2008 based on the $124.4 million in mortgages that were granted the developer in 2005. Several projects started by EB Developers fell into foreclosure after owner and CEO Elie Berdugo died in February 2008. TRIBUNE CO: Citadel Seeks Reconsideration From Recovery Ruling -------------------------------------------------------------- Citadel Equity Fund Ltd. and Camden Asset Management ask the U.S. Bankruptcy Court for the District of Delaware for reconsideration or clarification of the April 9, 2012 memorandum and order regarding the Allocation Disputes with respect to these issues: (A) Did the Bankruptcy Court, in its decision, intend in any way to affect the rights and remedies of Tendering Noteholders in the state law fraudulent conveyance litigation captioned In re: Tribune Company Fraudulent Conveyance Litigation, 11-MD- 02296 (WHP) (S.D.N.Y.); and (B) Did the Bankruptcy Court, in its Decision, intend in any way, to fix or establish the classification of the claims of Tendering Noteholders in any Chapter 11 Plan for the Debtors. Citadel and Camden, as tendering noteholders, in the aggregate hold approximately $222 million initial principal amount of PHONES. Based on the Court's Allocation Disputes Decision, the claims held by the Tendering Noteholders aggregate approximately $26 million. Paul N. Silverstein, Esq., at Andrews Kurth LLP, in New York, argues that the April 9 Decision is silent with respect to those issues and could be construed to constitute rulings that (i) affect, or have a substantive impact on, the existing "state claim" fraudulent conveyance or transfer litigation pending in the MDL Court, or (ii) establish the classification of the Tendering Noteholders' claims under any Chapter 11 Plan for the Debtors in these Chapter 11 cases, including the Plan proposal set for consideration later this year. Moreover, the Allocation Disputes Decision is unclear as to whether (i) the Tendering Noteholders hold "PHONES claims," albeit in a significantly reduced amount (approximately 12% of the Original PHONES), or (ii) the Tendering Noteholders hold general unsecured claims equal to the cash amount that Tribune is obligated to pay such holders as a result of their tender of their PHONES, Mr. Silverstein points out. Indeed, the amount of the Tendering Noteholders claims in these Chapter 11 cases or, under a Chapter 11 plan for the Debtors, is a separate issue from the amount of the Tendering Noteholders' claims with respect to state law fraudulent conveyance in the MDL, he asserts. "Notwithstanding the Bankruptcy Court's ruling in the Decision that the PHONES holders who tendered their PHONES no longer 'hold' PHONES but, rather, hold a right to receive approximately $18.26 per PHONE previously held by them, such holders (including the Tendering Noteholders) continue to have the right to be plaintiffs for the full amount of the PHONES held by each of them on the date the causes of action asserted in the MDL accrued," Mr. Silverstein maintains. Likewise, nothing in the Decision changes this fact, nor should the Decision in any way be used in the MDL for the proposition that the PHONES plaintiffs' claims in the MDL litigation only aggregate approximately $759 million rather than approximately $1.24 billion, he insists. * * * The Bankruptcy Court held a telephonic status conference on April 27, 2012, with respect to Citadel's Motion. At the status conference, the Bankruptcy Court set forth various deadlines with respect to the scheduling the Citadel Motion for hearing. At the Bankruptcy Court's request, the parties have conferred and agreed to a proposed order containing these deadlines: * responses, if any, to Citadel's Motion are due on or before May 21, 2012; * replies, if any, are due on or before June 1, 2012; * hearing on Citadel's Motion will be held on June 7, 2012. The Bankruptcy Court signed the order on May 4, 2012. Plan Allocation Disputes As reported in the April 16, 2012 edition of the Troubled Company Reporter, Judge Kevin Carey entered a formal order decreeing that the disputes relating to how recoveries under Tribune Co.'s proposed reorganization plan should be allocated are resolved for reasons set forth in a memorandum opinion dated April 9, 2012. The Allocation Disputes are resolved, subject to, conditioned upon, and for the purpose of obtaining confirmation of a Chapter 11 plan substantially in the form of the Third Amended Plan. Tribune Chairman Samuel Zell came out the biggest loser in the wake of the Court's recent decision, Peg Brickley of The Wall Street Journal wrote. Judge Carey determined that the Zell- controlled EGI-TRB LLC Notes are at the bottom of Tribune's capital structure. Mr. Zell's claims ranked last in the Chapter 11 payments priority scheme, lagging behind holders of PHONES notes, which are allowed in the aggregate amount of $759 million. Mr. Zell, who called the buyout "deal from hell," put only $315 million of his own money at risk in the deal, the WSJ report noted. In recent litigation, his investment venture attempted to get equal footing with other low-ranking creditors when it comes to sharing recovery, on the basis of a claim for $225 million, the report noted. The attempt failed, the WSJ report said. A copy of the Court's April 9, 2012 Memorandum Regarding Allocation Disputes is available at http://is.gd/2SE6pPfrom Leagle.com. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Tribune CRO Don Liebentritt said it is possible the media company could emerge late in the third quarter of 2012. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Committee Drops Some Claims in FitzSimons Lawsuit ------------------------------------------------------------- The Official Committee of Unsecured Creditors in Tribune Co.'s cases asks the Bankruptcy Court to dismiss intentional fraudulent transfer claims identified In re Official Committee of Unsecured Creditors of Tribune Co. v. FitzSimons, et al., Adv. Proc. No. 10-54010, against former Tribune shareholders who received less than $50,000 in proceeds from the 2007 leveraged buy-out of Tribune. Upon review, the Creditors' Committee determined that the group of LBO Shareholder Defendants under the FitzSimons Action who received $50,000 or more in LBO Proceeds, along with the other defendants, accounts for almost 98% of the total dollar amount of LBO Proceeds (more than $7 billion). In contrast, the more than 20,000 LBO Shareholder Defendants specifically named as individual defendants in the Complaint who received less than $50,000 in LBO Proceeds account for just over 2% of the identified LBO Proceeds, says the Creditors' Committee. The Creditors' Committee estimates that the approximately 20,000 Sub-Threshold Defendants received on average, approximately $8,000 in LBO Proceeds. James S. Green, Jr., Esq., at Landis Rath & Cobb LLP, in Wilmington, Delaware, asserts that dismissal of those claims will conserve the resources of the Court and the Debtors' estates. The potential benefits of the Creditors' Committee's prosecuting claims against Sub-Threshold Defendants as individual defendants are outweighed by the costs of doing so, he insists. The Creditors' Committee proposes that the Sub-Threshold Defendants, like the other Shareholder Defendants, will continue to be members of the putative Shareholder Class. They will not, however, be individually named defendants with respect to the intentional fraudulent transfer claims and will not be individually served (unless they are defendants on other claims.) Mr. Green assures the Court that the collective amount of identified LBO Proceeds that went to Shareholder Defendants who received more than $50,000 if recovered, will far exceed the amount necessary for full recovery to Tribune's non-bank creditors on the Creditors' Committee's intentional fraudulent transfer claims. Indeed, a $50,000 threshold for LBO Proceeds strikes an appropriate balance to ensure that the costs do not exceed case recoveries, he adds. The Court will consider the Creditors' Committee's Motion on May 29, 2012. Objections are due no later than May 22. 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) TRIDENT MICROSYSTEMS: Has Until Aug. 1 to Decide on Leases ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended until Aug. 1, 2012, Trident Microsystems, Inc. et al.'s time to assume or reject unexpired leases of nonresidential real property. As reported in the Troubled Company Reporter on April 18, 2012, the Debtors related that it would not be prudent to make any determinations concerning the assumption or rejection of the real property leases until such time as the sale of all their assets have been consummated and they are certain as to the ultimate disposition of their assets, including real property leases. About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $310 million in assets and $39.6 million in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. Trident Microsystems, Inc., closed on the sale of certain of its assets pursuant to the previously disclosed Asset Purchase Agreement dated as of Jan. 4, 2012, as amended, by and among Trident, certain of Trident's wholly-owned subsidiaries and Entropic Communications, Inc. The aggregate consideration received by Trident for the purchase of Trident's Set Top Box (STB) system-on-a-chip assets was comprised of $65 million in cash plus the assumption of certain liabilities. TRIDENT MICROSYSTEMS: Panel Taps Fenwick & West as Tax Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Trident Microsystems, Inc. et al., asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain Fenwick & West LLP as its special tax and claims counsel. Fenwick will, among other things: a. evaluate the tax assets and liabilities of the Debtors; b. assist in the review of tax assessments (final and proposed) made against the Debtors; and c. assist in the determination of the proper levels of debt and equity for Debtor TMFE and help to evaluate the debt capacity of Debtor TMFE in light of its operating cash flows, particularly as the determinations are addressed in the Internal Revenue Code and the regulations promulgated thereunder. The Committee relates that Fenwick's services will not be duplicative of the services provided by PSZJ. The attorneys expected to be principally responsible for the case, and their respective hourly rates are: Michael F. Solomon $950 Will Skinner $650 Mark Porter $520 Ora Grinberg $425 To the best of the Committee's knowledge, Fenwick does not represent any other entity having an adverse interest in connection with the Chapter 11 cases. A hearing on May 15 at 10:00 a.m. (Eastern Time) has been set. About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $310 million in assets and $39.6 million in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. Trident Microsystems, Inc., closed on the sale of certain of its assets pursuant to the previously disclosed Asset Purchase Agreement dated as of Jan. 4, 2012, as amended, by and among Trident, certain of Trident's wholly-owned subsidiaries and Entropic Communications, Inc. The aggregate consideration received by Trident for the purchase of Trident's Set Top Box (STB) system-on-a-chip assets was comprised of $65 million in cash plus the assumption of certain liabilities. TRIDENT MICROSYSTEMS: Sigma Closes Acquisition of DTV Business -------------------------------------------------------------- Sigma Designs, Inc., has completed its asset purchase of Trident Microsystems' Digital Television (DTV) Business. The acquisition includes Trident's complete digital TV product portfolio, including its digital TV SoC (system-on-chip), frame-rate- conversion (FRC), and extensive SmartTV software suite, as well as some legacy analog TV products. The acquisition includes these products, intellectual property licenses, software and leased facilities. "This transaction adds tremendous potential to Sigma's business, enabling us to leverage our core investments of media streaming, connectivity and software platforms towards penetration of all types of intelligent media devices, including SmartTVs," said Thinh Tran, chairman and CEO of Sigma Designs. "The acquisition expands our total addressable market, provides us with complementary intellectual property and establishes an immediate position in the SmartTV market. We believe this SmartTV business, together with our existing set-top box and connected media player businesses, positions Sigma as a full-breadth SoC platform provider for world-class consumer electronics manufacturers." Moving forward, Sigma has established a Digital TV business unit based around the Trident acquisition and has appointed Mustafa Ozgen as its Vice President and General Manager in charge. Mr. Ozgen will be responsible for directing the definition and development of all SmartTV SoC solutions, including management of the worldwide resources assigned to this business unit as well as driving synergies with the existing media processor group. Mr. Ozgen has spent the last 15 years in the digital television semiconductor industry in engineering management and executive positions. Most recently, Mr. Ozgen served as the Vice President of Home Entertainment Products at CSR Technology, a UK-based provider of consumer electronics solutions that acquired Zoran. For the previous eight years, Mr. Ozgen worked at Zoran, where he was most recently their Vice President and General Manager of the TV Business Unit, a part of their $450 million business where he managed 360 employees in the US, France, China, Taiwan, Serbia, Russia and India. Prior to this, Mr. Ozgen worked in engineering and management positions at Oak Technology, TeraLogic and Wind River Systems. "I am excited to work with the team at Sigma Designs to develop a DTV division, mapping to the long-term strategy of the organization to become the industry's leading provider of advanced SoC solutions for converged media platforms," said Mustafa Ozgen, Vice President and General Manager DTV Business Unit, Sigma Designs. "With Sigma's long history in media processors, set-top boxes, connectivity and home control, DTV is a logical step for the organization." In connection with the Trident transaction, approximately 320 global employees will become part of Sigma Designs. The transaction, originally announced on March 19, 2012, closed effective as of May 4, 2012. As a result of the acquisition, Sigma's results for its second quarter of fiscal year 2013, which will end on July 28, 2012, will include approximately 12 weeks of Trident STB business activity. Total cash paid for the DTV assets was $42.2 million which consisted of $19.5 million for inventory at various stages of completion, $13.4 million for accounts receivable, $5.5 million for equipment and various assets, $2.1 million for prepaid expenses and $1.7 million for development projects in process. Sigma management will provide more detailed information about the combined company's outlook during its next regularly scheduled earnings announcement for its first fiscal quarter. At that time, the Company will review its quarterly results and provide financial guidance for the second quarter of fiscal 2013, including the impact of the Trident Digital TV acquisition. About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $310 million in assets and $39.6 million in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. TRIUS THERAPEUTICS: Incurs $7.6 Million Net Loss in First Quarter ----------------------------------------------------------------- Trius Therapeutics, Inc., reported a net loss of $7.60 million on $9.83 million of total revenues for the three months ended March 31, 2012, compared with a net loss of $10.06 million on $2.71 million of total revenues for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $106.55 million in total assets, $15.04 million in total liabilities and $91.50 million in total stockholders' equity. On May 3, 2012, Trius was notified in writing by the Defense Threat Reduction Agency, or DTRA, that it has elected not to exercise its option to continue funding under the four and one- half-year federal contract with the Company for the development of novel antibiotics directed against gram-negative bacterial pathogens, and therefore, the contract will not be extended beyond July 20, 2012. As a result, Trius has chosen to discontinue its marine natural products discovery program, which was solely funded by the DTRA contract. A copy of the press release is available for free at: http://is.gd/Jnr6UJ About Trius Therapeutics San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) -- http://www.triusrx.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of innovative antibiotics for serious, life-threatening infections. The Company's first product candidate, torezolid phosphate, is an IV and orally administered second generation oxazolidinone being developed for the treatment of serious gram-positive infections, including those caused by MRSA. In addition to the company's torezolid phosphate clinical program, it is currently conducting two preclinical programs using its proprietary discovery platform to develop antibiotics to treat infections caused by gram-negative bacteria. In the Form 10-K for the year ended Dec. 31, 2011, the Company said it has incurred losses since its inception and it anticipates that it will continue to incur losses for the foreseeable future. As of December 31, 2011, the Company had an accumulated deficit of $95.4 million. The Company has funded, and plan to continue to fund, its operations from the sale of securities, through research funding and from collaboration and license payments, including payments under the Bayer collaboration. However, the Company has generated no revenues from product sales to date. The Company reported a net loss of $18.25 million in 2011, a net loss of $23.86 million in 2010, and a net loss of $22.68 million in 2009. TRIUS THERAPEUTICS: Brian Atwood Discloses 8.5% Equity Stake ------------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Brian G. Atwood and his affiliates disclosed that, as of they beneficially own 3,269,141 shares of common stock of representing 8.48% of the shares outstanding. Mr. Atwood previously reported beneficial ownership of 3,257,141 common shares or a 11.41% equity stake as of Dec. 31, 2011. A copy of the amended filing is available for free at: http://is.gd/2VvhUF About Trius Therapeutics San Diego, Calif.-based Trius Therapeutics, Inc. (Nasdaq: TSRX) -- http://www.triusrx.com/-- is a biopharmaceutical company focused on the discovery, development and commercialization of innovative antibiotics for serious, life-threatening infections. The Company's first product candidate, torezolid phosphate, is an IV and orally administered second generation oxazolidinone being developed for the treatment of serious gram-positive infections, including those caused by MRSA. In addition to the company's torezolid phosphate clinical program, it is currently conducting two preclinical programs using its proprietary discovery platform to develop antibiotics to treat infections caused by gram-negative bacteria. In the Form 10-K for the year ended Dec. 31, 2011, the Company said it has incurred losses since its inception and it anticipates that it will continue to incur losses for the foreseeable future. As of December 31, 2011, the Company had an accumulated deficit of $95.4 million. The Company has funded, and plan to continue to fund, its operations from the sale of securities, through research funding and from collaboration and license payments, including payments under the Bayer collaboration. However, the Company has generated no revenues from product sales to date. The Company reported a net loss of $18.25 million in 2011, a net loss of $23.86 million in 2010, and a net loss of $22.68 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed $68.12 million in total assets, $18.23 million in total liabilities, all current, and $49.89 million in total stockholders' equity. TSO INC: Sands Anderson Replaces DurretteCrump as Counsel --------------------------------------------------------- TSO, Inc., obtained authorization from the Bankruptcy Court to employ Sands Anderson PC as counsel effective Dec. 1, 2011. The Debtor was previously authorized by the Bankruptcy Corut to employ DurretteCrump PLC as counsel. The DurretteCrump attorneys responsible for the representation of the Debtor were Roy M. Terry, Jr., John C. Smith and Elizabeth L. Gunn. Effective Dec. 1, 2011, Roy M. Terry, Jr., John C. Smith and Elizabeth L. Gunn joined Sands Anderson. The Debtor still requires the assistance of competent and experienced bankruptcy counsel to enable it to perform its statutory duties. The services to be performed by Sands Anderson may include, without limitation: A. Preparing any instruments, agreements, pleadings, or other documents necessary to initiate and effectuate any reorganization or bankruptcy proceeding; B. Advising the Debtor of its rights, powers and dues as a debtor and debtor-in-possession continuing to operate and manage its business as property under Chapter 11 of the Bankruptcy Code; C. Attendance and representation of the Debtor at all creditors' meetings, hearings, trials, conferences, and other proceedings, whether in or out of Court; D. Preparation on behalf of the Debtor all necessary and appropriate applications, motions, draft orders, other pleadings, notices, schedules and other documents and review all financial and other reports to be filed in the Chapter 11 case; and E. Assist, advise, represent the Debtor, and perform all other necessary or appropriate legal services in connection with Debtor's Chapter 11 case for or on behalf of the Debtor. The Debtor will employ Sands Anderson under the balance of the $40,000 retainer paid pre-petition to DurretteCrump PLC after payment of DurretteCrump's final fees and costs. Sands Anderson will provide services at the firm's customary hourly rates for comparable services. The firm's standard hourly rates are: Roy M. Terry, Jr. $365 John C. Smith $270 Elizabeth L. Gunn $255 In addition, the present standard hourly rate for legal assistant is $135. Mr. Terry assures the Court that Sands Anderson is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About TSO Inc. Doswell, Va.-based TSO, Inc., dba Doswell Truck Stop, Roady's of Doswell, Econolodge at the Park, filed for Chapter 11 relief on December 13, 2010 (Bankr. E.D. Va. Case No. 10-38524). In its petition, the Debtor estimated assets of $10 million to $50 million, and debts of $1 million to $10 million. TSO INC: Wants Case Converted to Chapter 7 Liquidation ------------------------------------------------------ TSO, Inc., asks the Bankruptcy Court to convert its Chapter 11 case to one under Chapter 7. Elizabeth L. Gunn, Esq., at Sands Anderson PC, tells the Court that the Debtor sold substantially all of its assets to two purchasers by auction. The sales to each of the purchasers closed on Jan. 20, 2012. After the sale of the assets, the only outstanding issue in the Debtor's case was the resolution of two insurance claims filed with respect to damage to the Debtor's property in December 2010 and January 2011. After substantial negotiations, the Debtor has entered into Settlement Agreement and Release with Great American Insurance Company of New York and PeoplesBank, a Condorus Valley Company, regarding the insurance claims. The Debtor believes that after approval of the Settlement Motion, conversion of its case to Chapter 7 is in the best interest of its estate, creditors, and parties-in-interest. The Debtor believes that cause exists to convert the case to one under Chapter 7 because substantially all assets of the Debtor's estate have been sold and there is no chance of an effective reorganization. About TSO Inc. Doswell, Va.-based TSO, Inc., dba Doswell Truck Stop, Roady's of Doswell, Econolodge at the Park, filed for Chapter 11 relief on December 13, 2010 (Bankr. E.D. Va. Case No. 10-38524). In its petition, the Debtor estimated assets of $10 million to $50 million, and debts of $1 million to $10 million. When it filed for bankruptcy, the Debtor engaged lawyers at DurretteBradshaw PLC, in Richmond, Va., as counsel. The lawyers working on the case moved to Sands Anderson PC in December 2011. As a result, the Debtor replaced DurretteBradshaw with Sands Anderson. TSO INC: Has Accord With PeoplesBank Over Use of $65K Cash ---------------------------------------------------------- TSO, Inc., asks the Bankruptcy Court to approve a stipulation with PeoplesBank for the use of cash collateral. The Debtor owes the Lender under an $8,000,000 loan. The Loan was secured by, among other things, certain real property owned by the Debtor and known as 1022 Kings Dominion Boulevard, Dowswell, V., and all of the Debtor's accounts, accounts receivable, rents, contract rights, deposit accounts, equipment, inventory and general intangibles. The Debtor has since sold the Property. As of April 17,2012, the Debtor had $65,134.74 in cash in the Debtor's DIP operating account at SunTrust Bank, which constitutes the Lender's cash collateral that secures the Loan. Under the stipulation, the Lender consents to the Debtor using the Cash Collateral remaining in the Operating Account to pay $7,500 to the Debtor's attorneys for fees and expenses incurred in connection with the Debtor's bankruptcy case. The Lender and the Debtor agree that the Debtor will immediately pay to the Bank all Cash Collateral in the Operating Account ($65,134.74) less $7,500 to pay the Remaining Expenses. The Remaining Expenses will not be paid by the Debtor until the Debtor delivers the Payment to the Lender. PeoplesBank is represented by: Michael D. Nord, Esq. GEBHARDT & SMITH LLP One South Street, Suite 2200 Baltimore, MD 21202 Tel: (410) 385-5053 E-mail: mnord@gebsmith.com About TSO Inc. Doswell, Va.-based TSO, Inc., dba Doswell Truck Stop, Roady's of Doswell, Econolodge at the Park, filed for Chapter 11 relief on December 13, 2010 (Bankr. E.D. Va. Case No. 10-38524). In its petition, the Debtor estimated assets of $10 million to $50 million, and debts of $1 million to $10 million. When it filed for bankruptcy, the Debtor engaged lawyers at DurretteBradshaw PLC, in Richmond, Va., as counsel. The lawyers working on the case moved to Sands Anderson PC in December 2011. As a result, the Debtor replaced DurretteBradshaw with Sands Anderson. TTC PLAZA: Chapter 11 Case Converted to Chapter 7 Liquidation ------------------------------------------------------------- Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas ordered the conversion of the Chapter 11 case of TTC Plaza L.P. to one under Chapter 7. TTC Plaza L.P. filed for Chapter 11 bankruptcy (Bankr. S.D. Tex. Case No. 11-38381) on Oct. 3, 2011, before Judge Marvin Isgur. Jack Nicholas Fuerst, Esq., in Houston, Texas, represents the Debtor. The Debtor scheduled assets of $12,016,768 and liabilities of $5,312,263. The petition was signed by William Wu, managing partner. UNIFI INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable -------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Greensboro, N.C.-based Unifi Inc. to stable from positive. "We also affirmed our 'B' corporate credit rating on the company and 'B+' issue-level rating on the company's senior secured notes due 2014," S&P said. "Profitability materially declined and credit measures weakened over the past year," said Standard & Poor's credit analyst Jacqueline Hui. "We no longer believe the company will hit our benchmarks for an upgrade." "For the 12 months ended March 25, 2012, Unifi's EBITDA margin was 5.6%, compared with 9.3% in the prior-year period, and adjusted leverage increased to 4.2x from 2.9x, due mainly to significant margin pressure from a spike in polyester raw material costs, lower volumes from inventory destocking, and increased competition in Brazil," S&P said. "The ratings on Greensboro, N.C.-based Unifi Inc. reflect our view that the company's business risk profile will remain 'vulnerable,' based on its narrow business focus (manufacturing synthetic yarn), the highly competitive conditions in its markets, and raw material price volatility; and its financial risk profile, which we believe will continue to be 'aggressive,'" S&P said. "We expect margins to continue to be pressured from higher commodity costs but for credit metrics to remain consistent with an aggressive financial risk profile over the next year," said Ms. Hui. UNITED CONTINENTAL: 10-Q Info Designated as Confidential -------------------------------------------------------- United Continental Holdings, Inc. filed with the U.S. Securities and Exchange Commission an application under Rule 24b-2 of the Securities Act, seeking an extension of a prior grant of confidential treatment for information it excluded from the exhibits to a Form 10-Q filed on April 21, 2011. United Continental explained that the information to be excluded qualifies as confidential commercial or financial information under the Freedom of Information Act, 5 U.S.C. Section 552(b)(4). Accordingly, Loan Lauren P. Nguyen, Esq., special counsel of the Division of Corporation Finance, ruled on February 24, 2012, that excluded information from Exhibit "10.1" of Form 10-Q will not be released to the public through June 30, 2016. About United Continental United Continental Holdings, Inc. (NYSE: UAL) -- http://www.UnitedContinentalHoldings.com/-- is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, the airlines operate a total of 5,800 flights a day to 371 airports throughout the Americas, Europe and Asia from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York, San Francisco, Tokyo and Washington, D.C. United Air Lines, UAL Corp. and their affiliates filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 02-8191) on Dec. 9, 2002. Kirkland & Ellis represented the Debtors in their restructuring efforts. Sonnenschein Nath & Rosenthal LLP, nka SNR Denton, represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for UAL on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. United Continental carries 'B2' corporate family and probability of default ratings, with stable outlook, from Moody's, 'B' issuer credit ratings, with stable outlook, from Standard & Poor's, and 'B' issuer default rating from Fitch. Fitch upgraded United Continental's IDR from 'B-' to 'B' in September 2011, citing, "The upgrade follows a year of significant debt reduction and strong free cash flow (FCF) generation since the closing of the United-Continental merger on Oct. 1, 2010. In the face of heavy fuel cost pressure during the first half of 2011, UAL has consistently reported industry-leading revenue per available seat mile (RASM) growth while funding heavy debt maturities out of internally generated cash flow. UNITED CONTINENTAL: To Finalize Deal for 100+ Boeing Aircraft ------------------------------------------------------------- Daniel Michaels of The Wall Street Journal, citing a person familiar with the matter, reported that United Continental Holdings, Inc. is close to finalizing a deal to purchase more than 100 of Boeing Co.'s 737 single-aisle jetliners. If completed, the deal would mark a significant win for Boeing, which placed far behind its European rival Airbus in landing orders for small airlines last year, Mr. Michaels said. A deal with United would also be notable because the carrier currently flies both Boeing 737s and Airbus A320s as a result of its merger with Continental, the report noted. Moreover, airline officials have expected United to select Boeing planes given that the current management came largely from Continental, which flew only Boeing planes, the report added. An order for 200 of the 737s would cost around $17 billion per Boeing's price list although airlines typically get discounts for large orders, International Business Times stated in a separate report. About United Continental United Continental Holdings, Inc. (NYSE: UAL) -- http://www.UnitedContinentalHoldings.com/-- is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, the airlines operate a total of 5,800 flights a day to 371 airports throughout the Americas, Europe and Asia from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York, San Francisco, Tokyo and Washington, D.C. United Air Lines, UAL Corp. and their affiliates filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 02-8191) on Dec. 9, 2002. Kirkland & Ellis represented the Debtors in their restructuring efforts. Sonnenschein Nath & Rosenthal LLP, nka SNR Denton, represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for UAL on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. United Continental carries 'B2' corporate family and probability of default ratings, with stable outlook, from Moody's, 'B' issuer credit ratings, with stable outlook, from Standard & Poor's, and 'B' issuer default rating from Fitch. Fitch upgraded United Continental's IDR from 'B-' to 'B' in September 2011, citing, "The upgrade follows a year of significant debt reduction and strong free cash flow (FCF) generation since the closing of the United-Continental merger on Oct. 1, 2010. In the face of heavy fuel cost pressure during the first half of 2011, UAL has consistently reported industry-leading revenue per available seat mile (RASM) growth while funding heavy debt maturities out of internally generated cash flow. UNITED CONTINENTAL: Has Deal With Denver Airport on $100MM Debt --------------------------------------------------------------- Ann Schrader of The Denver Post reported that United Air Lines, Inc. and Denver International Airport reached a deal that will enable airlines to save costs associated with their leases. Under the proposed deal, the airport will pay about $100 million in debt associated with unused and unneeded space for the original baggage system on Concourse B and maintenance space on Concourse A, the report disclosed. United, the largest carrier at DIA with a 41% domestic market share, could save up to $22 million a year if service benchmarks are met under the agreement, the report noted. United currently pays up to $151 million a year, which includes payment on the baggage space, the report said. To receive the maximum benefit under the agreement, United must grow capacity 4-1/2% and maintain that level through 2016, the report stated. About United Continental United Continental Holdings, Inc. (NYSE: UAL) -- http://www.UnitedContinentalHoldings.com/-- is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, the airlines operate a total of 5,800 flights a day to 371 airports throughout the Americas, Europe and Asia from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York, San Francisco, Tokyo and Washington, D.C. United Air Lines, UAL Corp. and their affiliates filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 02-8191) on Dec. 9, 2002. Kirkland & Ellis represented the Debtors in their restructuring efforts. Sonnenschein Nath & Rosenthal LLP, nka SNR Denton, represented the Official Committee of Unsecured Creditors. Judge Eugene R. Wedoff confirmed a reorganization plan for UAL on Jan. 20, 2006. The Company emerged from bankruptcy on Feb. 1, 2006. United Continental carries 'B2' corporate family and probability of default ratings, with stable outlook, from Moody's, 'B' issuer credit ratings, with stable outlook, from Standard & Poor's, and 'B' issuer default rating from Fitch. Fitch upgraded United Continental's IDR from 'B-' to 'B' in September 2011, citing, "The upgrade follows a year of significant debt reduction and strong free cash flow (FCF) generation since the closing of the United-Continental merger on Oct. 1, 2010. In the face of heavy fuel cost pressure during the first half of 2011, UAL has consistently reported industry-leading revenue per available seat mile (RASM) growth while funding heavy debt maturities out of internally generated cash flow. UNITED RETAIL: Taps Deborah Paganis as Wind-Down Administrator -------------------------------------------------------------- The United Retail Group, Inc., et al., ask the U.S. Bankruptcy Court Southern District of New York for permission to (a) employ AP Services, LLC, to provide the Debtors with a wind-down administrator; and (b) employ Deborah Rieger-Paganis as wind-down administrator. On April 4, 2012, the Court approved the sale and on April 13, the conditions were satisfied to effectuate the sale of substantially all of the Debtors' assets to Avenue Stores, LLC, formerly known as Ornatus URG Acquisition, LLC and the sale closed. The Debtors relate that as a result of the sale, all of the Debtors' business operations have been turned over to the buyer, however, the Debtors continue to have certain ongoing legal and other management obligations with respect to the estates, including to file sales and use tax returns and administer the payment of such taxes in connection with continued going-out-of- business sales, well as to administer payroll for certain employees remaining with the Debtors for the duration of the wind down. Following the closing, the Debtors do not have any senior management employees with the expertise to act on behalf of the Debtors in winding down these estates. In this relation, the Debtors determined that APS, a subsidiary of AlixPartners, LLP -- which provided financial, restructuring, and management advisory services pursuant to the agreement for financial advisory and consulting services dated Jan. 27, 2012, -- was the best choice to provide interim management and wind-down services to the Debtors. APS will, among other things: a. develop a Disclosure Statement and Plan of Liquidation of the Debtors; b. assist in negotiations with stakeholders and their representatives relating to the resolution of items under the APA; and c. assist the Debtors in completing the business and financial aspects of their Chapter 11 cases, including review and approval of all final tax returns and other matters necessary to dissolve the corporate entities. The Debtors intend that the services of APS will complement and not duplicate the services rendered by any other professional retained in the Chapter 11 cases. The professionals anticipated to be assigned to the cases and their hourly rates are: Ms. Rieger-Paganis, wind-down administrator $715 Holly Felder Etlin, supervising managing director $920 Nick Caputto, claims reconciliation $505 The hourly rates of other personnel are: Managing Directors $815 ? $970 Directors $620 ? $760 Vice Presidents $455 ? $555 Associates $305 ? $405 Analysts $270 ? $300 Paraprofessionals $205 ? $225 AlixPartners received a $197,865 retainer, and will transfer the AlixPartners retainer to APS pursuant to the management services agreement. Additionally, pursuant to the management services agreement, invoiced amounts will be recouped against the AlixPartners retainer. To the best of the Debtors' knowledge, APS does not hold an interest adverse to the Debtors. About United Retail Group United Retail Group Inc., owner of the Avenue brand of women's fashion apparel and a subsidiary of Redcats USA, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-10405) on Feb. 1, 2012, as it seeks to sell the business to Versa Capital Management for $83.5 million, subject to higher and better offers. The Company's legal advisor is Kirkland & Ellis LLP; AlixPartners LLP serves as restructuring advisor and Peter J. Solomon Company serves as financial advisor and investment banker; and Donlin Recano & Company Inc. is the notice, claims and administrative agent. Versa Capital's legal advisor is Sullivan & Cromwell LLP. Avenue has 433 stores and an e-commerce site -- http://www.avenue.com/. Avenue employs roughly 4,422 employees, roughly 294 of which are located at Avenue's corporate headquarters in Rochelle Park, New Jersey or at the Troy Distribution Facility. The Company disclosed $117.2 million in assets and $67.3 million in liabilities as of the Chapter 11 filing. Cooley LLP serves as counsel for the Official Committee of Unsecured Creditors. US POSTAL: Plan to Cut Rural Post Office Hours to Save ------------------------------------------------------ Max Stendahl at Bankruptcy Law360 reports that the U.S. Postal Service said Wednesday it would scrap a plan to shutter thousands of struggling rural post offices and instead reduce hours, part of an effort to save $500 million a year and stave off impending bankruptcy. Under the plan, about 13,000 rural post offices would offer between two and six hours of window service each day, thereby shifting employees from full-time hours to part-time hours, the USPS said. In addition, the USPS said it would seek to slash labor costs by offering buyout packages. About U.S. Postal Service A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation, 151 million residences, businesses and Post Office Boxes. The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations. With 32,000 retail locations and the most frequently visited website in the federal government, usps.com, the Postal Service has annual revenue of more than $65 billion and delivers nearly 40 % of the world's mail. If it were a private sector company, the U.S. Postal Service would rank 35th in the 2011 Fortune 500. In 2011, the U.S. Postal Service was ranked number one in overall service performance, out of the top 20 wealthiest nations in the world, Oxford Strategic Consulting. Black Enterprise and Hispanic Business magazines ranked the Postal Service as a leader in workforce diversity. The Postal Service has been named the Most Trusted Government Agency for six years and the sixth Most Trusted Business in the nation by the Ponemon Institute. The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations. The U.S. Postal Service ended the first three months of its 2012 fiscal year (Oct. 1 - Dec. 31, 2011) with a net loss of $3.3 billion. Management expects large losses to continue until the Postal Service has implemented its network re-design and down- sizing and has restructured its healthcare program. Additionally, the return to financial stability requires legislation which gives the Postal Service typical commercial freedoms, including delivery flexibility, returns over $10 billion of amounts overpaid to the Federal Government and resolves the need to prefund retiree healthcare at rates not assessed any other entity in the United States. To return to profitability, CEO Patrick Donahoe has advanced a plan to reduce annual costs by $20 billion by 2015. The plan includes continued aggressive actions to generate additional revenue and reduce operating expenses. To reach the goal, the Postal Service also needs changes in the law. "Passage of legislation is urgently needed that provides the Postal Service with the speed and flexibility needed to cut costs that are not under our control, including employee health care costs," Donahoe said in February 2012 "The changes will give the Postal Service a bright future and provide the nation with affordable and reliable delivery for generations to come." VELO HOLDINGS: Committee Taps Carl Marks as Financial Advisor ------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Velo Holdings Inc., et al., asks the U.S. Bankruptcy Court for the Southern District of New York for permission to retain Carl Marks Advisory Group LLC as its financial advisor. CMAG will, among other things: -- analyze the financial position of the Debtors; -- analyze the Debtors' business plans, cash flow projections, restructuring programs, and other reports or analyses prepared by the Debtors or their professionals in order to advice the Committee on the viability of the continuing operations and reasonableness of projections and underlying assumptions; and -- analyze the financial ramifications of proposed transactions by the Debtors, including but no limited to cash management, assumption/rejection of contracts, asset sales, management compensation or retention and severance plans. The hourly rates of CMAG's personnel are: Partners/Managing Directors $700 - $795 Directors/Vice Presidents $500 - $595 Associates $400 - $495 Analysts $300 - $395 CMAG has not been paid any retainer against which to bill fees and expenses. To the best of the Committee's knowledge, CMAG has no interest adverse to the Debtors' estates. A hearing on May 29, 2012, at 2:00 p.m. (E.T.) has been set. About Velo Holdings, V2V et al. V2V Corp. is a premier direct marketing services company, providing individuals and businesses with access to a wide-variety of consumer benefits in the United States, Canada, and the United Kingdom. V2V was founded in 1989 as a membership services company that marketed its membership programs exclusively via telemarketing and, after having nearly a decade of continued growth, went public in 1996. In 2007, V2V was acquired by a consortium of private equity firms led primarily by investing affiliates of One Equity Partners. Norwalk, Connecticut-based Velo Holdings Inc. and various affiliates, including V2V, filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case Nos. 12-11384 to 12-11386 and 12-11388 to 12-11398) on April 2, 2012. The debtor-affiliates are V2V Holdings LLC, Coverdell & Company, Inc., V2V Corp., LN Inc., FYI Direct Inc., Vertrue LLC, Idaptive Marketing LLC, My Choice Medical Holdings Inc., Adaptive Marketing LLC, Interactive Media Group (USA) Ltd., Brand Magnet Inc., Neverblue Communications Inc., and Interactive Media Consolidated Inc. Judge Martin Glenn presides over the case. Lawyers at Dechert LLP serve as the Debtors' counsel. The Debtors' financial advisors are Alvarez & Marsal Securities LLC. The Debtors' investment banker is Alvarez & Marsal North America, LLC. Quinn Emanuel Urquhart & Sullivan, LLP, serves as the Debtors' special counsel. Epiq Bankruptcy Solutions serves as the Debtors' claims agent. Velo Holdings estimated $100 million to $500 million in assets and $500 million to $1 billion in debts. The petitions were signed by George Thomas, general counsel. Lawyers at Willkie Farr & Gallagher LLP represent Barclays, the First Lien Prepetition Agent and the DIP Agent. The First Lien Prepetition Agent and DIP Agent also has hired FTI Consulting, Inc. Sidley Austin LLP represents the Second Lien Prepetition Agent. Tracy Hope Davis, U.S. Trustee for Region 2, appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Velo Holdings Inc., et al. VOLKSWAGEN-SPRINGFIELD: Case Summary & Creditors List ----------------------------------------------------- Debtor: Volkswagen-Springfield, Inc. 6601 Backlick Road Springfield, VA 22150 Bankruptcy Case No.: 12-12905 Chapter 11 Petition Date: May 7, 2012 Court: U.S. Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Robert G. Mayer About the Debtor: The Debtor operates one of the largest Volkswagen franchised dealerships in the Mid- Atlantic region. From 1993-1997 it was recognized as one of the top two Volkswagen dealerships in the nation based upon sales and customer care. The dealership is operated from two buildings located on Backlick Road in Springfield, Virginia; a 50,000 square foot facility for the sale of new vehicles, and a 20,000 square foot facility for the sale of used vehicles. The Debtor owns the improvements on this site (subject to mortgage) and leases the site from an affiliate of Volkswagen of America, Inc. Debtor's Counsel: Dylan G. Trache, Esq. WILEY REIN LLP 7925 Jones Branch Drive, Suite 6200 McLean, VA 22102 Tel: (703) 905-2829 Fax: (703) 905-2820 E-mail: dtrache@wileyrein.com - and ? John T. Farnum, Esq. WILEY REIN LLP 7925 Jones Branch Drive, Suite 6200 McLean, VA 22102 Tel: (703) 905-2800 Fax: (703) 905-2820 E-mail: jfarnum@wileyrein.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by M. Tawad Farzad, president. Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Him Moran and Associates, Inc. -- $44,541 P.O. Box 8567 Deerfield Beach, FL 33443 Volkswagen Group of America -- $37,384 3800 Hamlin Road, Suite 100 Auburn Hills, MI 48326 MOC -- $21,752 2120 Carter Galler Boulevard Powhatan, VA 23139-7630 Wanada Business Services -- $19,282 Reynolds and Reynolds -- $18,013 Stohlman Automotive Products -- $11,525 Reyna Capital -- $11,000 Wheels Auto Transport -- $10,345 Cintas Corporation -- $10,329 Chesapeake Petroleum -- $8,939 Autoqual USA -- $6,900 Small Car Parts Ltd. -- $6,838 The Cobalt Group -- $6,698 G&G Lazada Colors -- $6,345 Alexandria VW -- $6,204 Steinhorst -- $5,352 Washington Post Company -- $5,175 White Tower Transports, LLC -- $5,100 PDP Group, Inc. -- $4,980 Collision Specialist -- $4,283 VITAMINSPICE INC: Jehu Hand Sues Company of Libel ------------------------------------------------- VitaminSpice and its Chief Executive Officer Ed Bukstel have been sued for defamation in Orange County, California Superior Court, case number 30-2012-00567141. The complaint, filed by prominent securities attorney Jehu Hand, alleges that the defendants VitaminSpice and Ed Bukstel libeled Jehu Hand in the press release issued by them on April 25, 2012. That widely disseminated press release stated that motions filed in the Federal Bankruptcy Court for the Eastern District of Pennsylvania included documents that allegedly demonstrated that Jehu Hand and others perpetrated forgeries. The complaint further alleges that these and other statements in VitaminSpice's press release were untrue and defamatory and, furthermore, that the statements regarding purported forgeries are expressly contrary to the findings of the Bankruptcy Court. A copy of the Court's order can be viewed at http://www.jehu.com/memodismisscase.pdf/ Specifically, in his testimony before the Court, Ed Bukstel alleged that two loans of $50,000 and $35,000, reported as outstanding in VitaminSpice's quarterly reports for the March and June 2010 quarters, were not valid since his signatures on the loan documents were allegedly forged. The Court found that the two loans in question were valid and not subject to a bona fide dispute, and that Bukstel's claim that his signatures on the loan documents were forged was unsupported by the evidence. About VitaminSpice VitaminSpice makes vitamin- and antioxidant-infused spices as food and dietary supplements. Five creditors filed an involuntary Chapter 11 petition (Bankr. E.D. Pa. Case No. 16200) against Wayne, Pennsylvania-based VitaminSpice aka Qualsec on Aug. 5, 2011. The creditors, owed roughly $414,000 in the aggregate, are: John Robison in Philadelphia, Pennsylvania; IBT South Florida, LLC, in Fort Lauderdale, Florida; Learned J. Hand in Chapel Hill, North Carolina; and Jehu Hand in Dana Point, California; and Esthetics World in Cheyenne, Wyoming. Judge Magdeline D. Coleman presides over the case. Peter Edward Sheridan, Esq. -- sheridan.pete@gmail.com -- in Philadelphia, Pennsylvania, represents the petitioning creditors. In April 2012, the bankruptcy judge dismissed the involuntary case at the behest of the Debtor. Judge Magdeline D. Coleman in Philadelphia said the creditors failed to prove the company was generally not paying its debts as they mature. The company filed a motion to dismiss the petition, saying it was filed in bad faith to stop lawsuits where the VitaminSpice was targeting Mr. Hand or his companies. VITESSE SEMICONDUCTOR: Incurs $6.2 Million Net Loss in Q1 --------------------------------------------------------- Vitesse Semiconductor Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $6.19 million on $29.73 million of net revenues for the three months ended March 31, 2012, compared with a net loss of $9.04 million on $36.89 million of net revenues for the same period during the prior year. The Company reported a net loss of $7.04 million on $59.72 million of net revenues for the six months ended March 31, 2012, compared with a net loss of $16.77 million on $74.63 million of net revenues for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $58.33 million in total assets, $91.37 million in total liabilities and a $33.04 million total stockholders' deficit. "During the second fiscal quarter of 2012, we delivered revenue in the mid-point of our guidance and lower than expected operating expenses resulting in positive operating income and non-GAAP net income," said Chris Gardner, CEO of Vitesse. "We achieved these solid results in a challenging market environment, further validating our fiscal discipline and the leverage in our operating model." A copy of the Form 10-Q is available for free at: http://is.gd/phHiRj About Vitesse Based in Camarillo, California, Vitesse Semiconductor Corporation (Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of semiconductor solutions for Carrier and Enterprise networks worldwide. In October 2009, Vitesse completed a debt restructuring transaction that resulted in the conversion of 96.7% of the Company's 2024 Debentures into a combination of cash, common stock, Series B Preferred Stock and 2014 Debentures. With respect to the remaining 3.3% of the 2024 Debentures, Vitesse settled its obligations in cash. Additionally, Vitesse repaid $5.0 million of its $30.0 million Senior Term Loan, the terms of which were amended as part of the debt restructuring transactions. Vitesse Semiconductor Corporation reported a net loss of $14.81 million on $140.96 million of net revenues for the year ended Sept. 30, 2011, compared with a net loss of $20.05 million on $165.99 million of net revenues during the prior year. WESTMORELAND COAL: Lowers Net Loss to $1.5 Million in Q1 -------------------------------------------------------- Westmoreland Coal Company filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.57 million on $145.88 million of revenue for the three months ended March 31, 2012, compared with a net loss of $18.73 million on $127.76 million of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $955 million in total assets, $1.20 billion in total liabilities and a $249.08 million total deficit. A copy of the Form 10-Q is available for free at: http://is.gd/V6Txp7 About Westmoreland Coal Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest independent coal company in the United States. The Company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. The Company reported a net loss of $36.87 million in 2011, a net loss of $3.17 million in 2010, and a net loss of $29.16 million in 2009. * * * In March 2011, Standard & Poor's Ratings Services said that it assigned a 'CCC+' corporate credit rating to Colorado Springs, Colorado-based Westmoreland Coal Co. In January 2012, S&P revised its outlook on Westmoreland to positive from stable and affirmed its 'CCC+' credit rating. "The outlook revision reflects our expectation that the acquisition, improved reserve position, and stronger coal pricing could bring WLB's credit metrics in line with a higher rating over the next several quarters," said Standard & Poor's credit analyst Gayle Bowerman. The rating and outlook for WLB also incorporate the combination of what S&P considers to be its 'vulnerable' business risk profile and 'highly leveraged' financial risk profile. The ratings also reflect WLB's high-cost position in the Powder River Basin (PRB) and Texas, relatively short reserve life, high customer concentration, challenges posed by the inherent risks of coal mining, and liquidity that's less than adequate to meet the company's near-term obligations. WOODCREST COUNTRY CLUB: Files for Chapter 11 in New Jersey ---------------------------------------------------------- Woodcrest Country Club, a member-owned golf club in Cherry Hill, New Jersey, filed for Chapter 11 protection (Bankr. D.N.J. Case No. 12-22055) on May 9 in Camden, New Jersey. The Debtor estimated up to $10 million in assets and liabilities in excess of $10 million. The golf course, which opened in the early 1930s, has $10.7 million in secured debt mostly owed on mortgages to Sun National Bank of Vineland, New Jersey. About $6.37 million of those claims are unsecured. There is another $1.5 million owing to trade suppliers. WP CAMP: S&P Assigns 'B' Corporate Credit Rating; Outlook Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B' corporate credit rating to WP CAMP Holding Co. The outlook is stable. "We also assigned a preliminary 'B' issue rating with a preliminary recovery rating of '3' to the company's proposed $30 million senior secured revolving credit facility and $230 million first-lien term loan. In addition, we assigned a preliminary 'CCC+' issue rating with a preliminary recovery rating of '6 'to the company's proposed $115 million senior secured second-lien term loan. The preliminary '3' recovery rating indicates expectations for meaningful (50% to 70%) recovery of principal in the event of default and the preliminary '6' recovery rating indicates expectations for negligible (0% to 10%) recovery," S&P said. "The ratings on CAMP reflect the company's 'weak' business profile, characterized by its narrow addressable market and its 'highly leveraged' financial profile," said Standard & Poor's credit analyst Katarzyna Nolan. "The company's leading market position, strong operating margins, and strong relationships with original equipment manufacturers (OEMs) partly offset these factors." "The outlook is stable, reflecting our view that the company's recurring and predictable revenue base should result in moderate free cash flow generation, with the capacity to pay down debt modestly over the near term. We could lower the rating if the company's revenue and EBITDA decline due to a loss of a major OEM contract or cyclical end-market dynamics and as a result, leverage increases to the high-7x area on a sustained basis. An upgrade is unlikely over the next year, since the company's large debt burden is likely to prevent it from achieving a material improvement in credit metrics over this period," S&P said. WPCS INTERNATIONAL: Sovereign Bank Loan Reduced to $6.5 Million --------------------------------------------------------------- WPCS International Incorporated and its United States based subsidiaries entered into a first amendment to loan and security agreement with Sovereign Bank, N.A., pursuant to which the loan and security agreement, dated as of Jan. 27, 2012, by and among Sovereign, the Company and the Company's Subsidiaries, was amended. Pursuant to the Amendment, the Company and Sovereign agreed that: 1. The maximum available funds pursuant to the revolving line of credit was reduced from $12 million to $6.5 million; 2. The interest rate applicable to revolving loans under the Credit Agreement was changed from LIBOR plus an interest margin initially of 2.75% to Sovereign's prime rate plus 2%; 3. The Company was granted an extension until July 2, 2012, to close accounts held at another financial institution, provided, however, that those accounts are prohibited from having more a balance in excess of $20,000 at any time; and 4. The Company paid an amendment fee of $25,000 and reimbursed Sovereign for costs and expenses incurred as a result of the Amendment. A copy of the Amendment is available for free at: http://is.gd/lfEmPs About WPCS International Exton, Pennsylvania-based WPCS International Incorporated provides design-build engineering services that focus on the implementation requirements of communications infrastructure. The Company provides its engineering capabilities including wireless communication, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. As reported by the TCR on Dec. 8, 2011, WPCS International and its United Stated based subsidiaries, previously entered into a loan agreement, dated April 10, 2007, as extended, modified and amended several times, with Bank of America, N.A. The Company is seeking alternative debt financing and has conducted discussions with other senior lenders to replace the Loan Agreement. The Company may not be successful in obtaining alternative debt financing or additional financing sources may not be available on acceptable terms. If the Company is required to repay the Loan Agreement, the Company has sufficient working capital to repay the outstanding borrowings. The Company reported a net loss attributable to WPCS of $12.02 million for the nine months ended Jan. 31, 2012, compared with a net loss attributable to WPCS of $9.80 million for the same period during the prior year. The Company's balance sheet at Jan. 31, 2012, showed $37.69 million in total assets, $23.21 million in total liabilities, and $14.48 million in total equity. * Moody's Says Not-for-Profit Hospitals Face Credit Challenge ------------------------------------------------------------- As fundamental changes unfold in the US not-for-profit healthcare sector, credit ratings will rise and fall depending on how well hospital management teams adjust to being paid more for quality of service than for quantity of service, says Moody's Investors Service in a new report. "Different reimbursement models will develop in different stages over time, requiring hospitals to manage multiple and diverging payment models simultaneously, such as traditional payments that reimburse based on volumes and new methodologies based on cost and quality," said Moody's Lisa Goldstein, author of the report, "Doing More with Less: Credit Implications of Hospital Transition Strategies in Era of Reform." Different models will create new incentives and require behavioral changes from patients, payers, physicians, and hospitals alike. Hospitals that can manage well during the current period of industry transition should be able to maintain if not improve their credit ratings, according to Moody's. The greatest challenge identified by the rating agency will be the need for hospitals to focus on costs and outcomes while still being paid under the old reimbursement model that rewards volume. This is further compounded by a drop in patient volumes since the start of the recession, some of which is likely to remain. "Even as future payment methodologies change at an uncertain pace, it is already clear that payment-per-procedure will decline, creating more pressure on hospital top line growth," said Goldstein. "This weaker outlook for revenue growth and the corresponding need for cost reductions are key drivers of Moody's negative outlook on the not-for-profit hospital sector." Payment reductions from government and commercial payers, along with different payment models and incentive changes, will require management teams to develop more robust financial plans and achieve near flawless execution of strategy, according to Moody's. "The most meaningful cost reduction strategies will involve standardization of clinical care and elimination of variation in patient procedures," said Ms. Goldstein. "This will be a multi- year, ambitious journey requiring strong physician, management and board leadership." "Hospitals that cannot navigate the payment reductions or reduce their expense structures quickly enough to mitigate the impact may see negative rating pressure," said Ms. Goldstein. "Robust financial planning and flawless execution will be key to success." According to the rating agency report, the era of reform and tightened federal funding now unfolding will challenge current business models and require forward-thinking strategies to manage through a transition period that will unfold over the foreseeable future. "The strategic shift challenges current business models and require forward-thinking strategies to manage through a transition period that will unfold over the foreseeable future," said Ms. Goldstein. "Not-for-profit hospitals face an imperative to deliver higher-quality service with lower reimbursement rates per unit of service." The Moody's report outlines how major changes will come in the form of new Medicare reimbursement structures such as bundled payments, which will provide a single payment for a particular service line, and non-payment penalties for excessive patient readmissions. Commercial payers will also modify their reimbursement structures and reduce annual rate increases, narrowing hospitals' ability to subsidize losses from governmental payers. * Business Bankruptcy Drop 14% for Year Ended March 31 ------------------------------------------------------ Bankruptcy filings for the 12-month period ending March 31, 2012, fell 13 percent compared to bankruptcy filings for the 12-months ending March 31, 2011, according to statistics released by the Administrative Office of the U.S. Courts. March 2012 bankruptcy filings totaled 1,367,006, compared to 1,571,183 bankruptcy cases filed in the 12-month period ending March 31, 2011. Business and Non-Business Filings The majority of bankruptcy filings involve predominantly non- business debts. For the 12-month period ending March 31, 2012, non-business filings -- where the debts are predominantly personal or consumer in nature -- totaled 1,320,613, down 13 percent from the 1,516,971 nonbusiness bankruptcies filed in the 12-month period ending March 31, 2011. Filings involving predominantly business debts totaled 46,393, down 14 percent from the 54,212, business bankruptcies filed in the 12-month period ending March 31, 2011. Second Quarter of FY 2012 The first three months of 2012 were the second quarter of the Judiciary's 2012 fiscal year. The number of bankruptcies filed during those three months was 322,973, down 12 percent from the 366,178 filings in the same quarter of 2011. Filings by Chapter For the 12-month period ending March 31, 2012, filings fell for chapters 7, 11, 12, and 13 compared to filings in the 12-month period ending March 31, 2011. * Chapter 7 filings fell 14 percent to 958,757 from the 1,118,481 Chapter 7 filings in the 12-month period ending March 31, 2011. * Chapter 13 filings fell 10 percent to 396,175 from the 438,788 Chapter 13 bankruptcies filed in the same time period in 2011. * Chapter 11 filings fell 13 percent to 11,339 from the 13,051 Chapter 11 filings in the same time period in 2011. * Chapter 12 filings fell 18 percent to 606 from the 743 Chapter 12 filings in the same time period in 2011. * McDermott Taps Walsh as Int'l Head of Restructuring Practice -------------------------------------------------------------- McDermott Will & Emery LLP announced on May 9, 2012, the appointment of highly regarded senior restructuring lawyer Timothy W. Walsh as international head of its Restructuring & Insolvency practice. The move is part of the Firm's strategic initiative to significantly expand its worldwide restructuring and bankruptcy capabilities. Mr. Walsh, who joins from an AmLaw Top 5 corporate law firm where he served as partner and Vice Chair of that firm's Restructuring Practice Group, brings more than 20 years' experience leading some of the largest and most complex restructuring and bankruptcy proceedings through the United States and throughout the world. He focuses his practice on all aspects of restructuring transactions in major domestic and cross-border bankruptcy-related proceedings as well as out-of-court restructurings. "We are honored to welcome Tim as head of our international Restructuring & Insolvency practice," said McDermott co-chair Peter J. Sacripanti. "Tim is considered one of New York's most highly respected restructuring and bankruptcy lawyers and we are confident that he will help us significantly expand this important practice area. His broad experience advising all participants in high-profile restructuring matters will be extremely valuable to our global clients as McDermott becomes able to deliver more comprehensive, international service offerings." "Tim has exactly the background, experience, and relationships needed to lead our drive to become one of the world's top restructuring firms," added Jeffrey E. Stone, co-chair of McDermott Will & Emery LLP. "Due to the upheaval in the global economy over the past few years, the demand and opportunity to provide legal services tied to creative restructurings has never been higher. We look forward to working with him as he builds his team and executes the Firm's strategy for growing this key practice area." McDermott's Restructuring & Insolvency practice is currently recognized by Chambers, PLC Cross-Border and IFLR1000 for its outstanding team of more than 40 lawyers around the world. Mr. Walsh has represented debtors in possession, creditors' committees, trustees, secured and unsecured creditors, bondholders, insurance companies, U.S. and foreign lenders, and corporate clients in a broad range of restructuring, insolvency, bankruptcy litigation and commercial real estate matters. In addition, he represents parties in out-of-court workouts, purchases of distressed debt and distressed assets. He is an experienced restructuring and bankruptcy litigator admitted to practice in District Court in New York, the Eastern District of Michigan and the Western District of Wisconsin. With the addition of Mr. Walsh, McDermott is also bolstering its offerings to the private equity community. "As we build our international restructuring practice, we will also be able to deliver more holistic services to our private equity clients, such as in- and out-of-court restructurings as a means of facilitating acquisitions as well as dispositions of portfolio companies," said David Goldman, partner and head of McDermott's Corporate Advisory Practice Group. "Additionally, Tim's background will be of great help to clients of our Health Industry and Energy Advisory Practice Groups ? where the impact of increased governmental health-related regulations and evolving world energy strategies are putting particular strain on these industries." In the past 60 days, McDermott has brought on board 9 Corporate partners in the U.S. and Europe. Last week, the Firm announced the opening of a new Frankfurt office led by corporate finance partner Philipp von Ilberg and highly respected corporate and securities partners, Joseph Marx, Dr. Martin Kniehase and Dr. Moritz von Hutten. McDermott also recently announced the addition of private equity partners Mark Davis and Russell Van Praagh in London, corporate partner Giovanni Nicchiniello in Milan, distinguished transactions lawyer Alan D'Ambrosio in New York, and life sciences transactions lawyer Kristian Werling in Chicago. Together these moves reflect a dramatic expansion of its international transactional capabilities, with a focus on private equity, energy and cross-border M&A. * Katten Muchin's D. Pentlow Moves to Herrick Feinstein ------------------------------------------------------- Herrick, Feinstein LLP disclosed that David A. Pentlow, a veteran in the areas of corporate and securities law, has joined the firm's New York office as a Partner in the Corporate Department. Mr. Pentlow was formerly a Partner with Katten Muchin Rosenman LLP. "David Pentlow's extensive experience in securities, capital markets transactions, structured products and derivatives is an excellent complement to our highly regarded corporate department, which handles significant matters for public and private clients across the country," said Irwin Kishner, Chairman of Herrick's Executive Committee and Co-Chairman of the firm's Corporate Department. Herrick's Corporate Department has a track record of successes representing major clients across the country and around the world, including many Fortune 1000 firms. The firm's clients include financial institutions, private equity firms, venture capital firms, hedge funds, investment banks and private investors on a full range of matters. "Herrick's culture -- partners who are leaders in their fields providing hands-on service to their clients -- has enabled it to build an enviable client list and makes it an extremely attractive home for someone with my background. It will be a pleasure to work with this talented group of attorneys," said Mr. Pentlow. Mr. Pentlow specializes in representing publicly traded companies, hedge funds, financial institutions and institutional investors in the offering, purchase, structuring and negotiation of securities, derivatives and other financial products, including registered public securities offerings, private securities offerings, lending and structured notes. He also advises public companies and investors regarding ongoing compliance with federal securities laws, corporate governance and applicable stock exchange listing rules, as well as tender offers, proxy solicitations, and going private transactions. Mr. Pentlow received his undergraduate degree from Harvard University and his law degree from Georgetown University. Founded in 1928, Herrick, Feinstein is a prominent 165-lawyer firm providing a full range of legal services, including real estate, litigation, bankruptcy, employment, corporate, tax and personal planning, government relations, insurance and intellectual property law. * BOOK REVIEW: Corporate Venturing -- Creating New Businesses ------------------------------------------------------------- Authors: Zenas Block and Ian C. MacMillan Publisher: Beard Books, Washington, D.C. 2003 (reprint of 1993 book published by the President and Fellows of Harvard College). List Price: 371 pages. $34.95 trade paper, ISBN 1-58798-211-0. Creating new businesses within a firm is a way for a company to try to tap into its potential while at the same time minimizing risks. A new business within a firm is like an entreprenuerial venture in that it would have greater flexibility to opportunistically pursue profits apart from the normal corporate structure and decision-making processes. Such a business is different from a true entrepreneurial venture however in that the business has corporate resources at its disposal. Such a company business venture has to answer to the company management too. Corporate venturing--to use the authors' term--offers innovative and stimulating business opportunities. Though venturing is in a somewhat symbiotic relationship with the parent firm, the venture would never threaten to ruin the parent firm as a entrepreneur might be financially devastated by failure. Block and MacMillan contrast an entreprenuerial enterprise with their subject of corporate venturing, "When a new entrepreneurial venture is created outside an existing organization, a wide variety of environmental factors determine the fledgling business's survival. Inside an organization . . . senior management is the most critical environmental factor." This circumstance is the basis for both the strengths and limitations of a corporate venture. In their book, the authors discuss how senior management working with the leadership of a corporate venture can work in consideration of these strengths and weaknesses to give the venture the best chances for success. If the venture succeeds beyond the prospects and goals going into its formation, it can always be integrated into the parent company as a new division or subsidiary modeled after the regular parts of a company with the open-ended commitment, regular hiring practices, and reporting and coordination, etc., going with this. As covered by the authors, done properly with the right commitment, sense of realism and practicality, and preliminary research and ongoing analysis, corporate venturing offers a firm new paths of growth and a way to reach out to new markets, engage in fruitful business research, and adapt to changing market and industry conditions. The principle of corporate venturing is the familiar adage, "nothing ventured, nothing gained." While it is improbable that a corporate venture can save a dying firm, a characteristic of every dying firm is a blindness about venturing. Just thinking about corporate ventures alone can bring to a firm a vibrancy and imagination needed for business longevity. Ideas, insights, and vision are the essence of corporate venturing. But these are not enough by themselves. Corporate venturing is based as much on the right personnel, especially the top leaders. The authors advise to select current employees of a firm to lead a corporate venture whenever feasible because they already have relationships with senior management who are the ultimate overseers of a venture and they understand the corporate culture. In one of their several references to the corporate consultant and motivational speaker Peter Drucker, the authors quote him as identifying only half jokingly the most promising employees to lead the corporate venture as "the troublemakers." These are the ones who will be given the "great freedom and a high level of empowerment" required to make the venture workable and who also are most suited to "adapt rapidly to new information." Such employees for top management of a venture are not entirely on their own. The other side of this, as Brock and MacMillan go into, is for such venture management to earn and hold the trust and confidence of the firm's top management and work within the framework and follow the guidelines set for the venture. Corporate venturing is an operation which is a hybrid of the standard corporate interests and operations and an independent business with entrepreneurial flexibility mainly from focus on one product or service or at most a few interrelated ones, simplified operations, and streamlined decision-making. From identifying opportunities and getting starting through the business plan and corporate politics, Brock and MacMillan guide the readers into all of the areas of corporate venturing. Zenas Block is a former adjunct professor with the Executive MBA Program at the NYU Stern School of Business. Ian C. MacMillan is associated with Wharton as a professor and a director of a center for entrepreneurial studies. ********* 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 ***