/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120518.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 18, 2012, Vol. 16, No. 137 Headlines 13 PARTNERSHIP: Case Summary & 3 Largest Unsecured Creditors 1ST FINANCIAL: Reports $584,000 Net Income in First Quarter 258 NEST: Case Summary & 8 Largest Unsecured Creditors 30DC INC: Delays Form 10-Q for March 31 Quarter 4TH STREET EAST: Lender Wins Relief From Bankruptcy Stay 785 PARTNERS: F Reorganization Plan Wins Confirmation 9362 JOINT: Case Summary & 7 Largest Unsecured Creditors ACCESS PHARMACEUTICALS: Incurs $4.9 Million Net Loss in Q1 ADAMAR OF NEW JERSEY: Tort Suit Dismissed Over Plaintiff's No-Show ADINO ENERGY: Delays First Quarter Form 10-Q for Review ADVANCE PRESORT: Case Summary & 20 Largest Unsecured Creditors ADVANCED MEDICAL: Incurs $1.1 Million Net Loss in First Quarter AEOLUS PHARMACEUTICALS: Reports $2.7MM Income in March 31 Qtr. AETERNA ZENTARIS: Gets NASDAQ Notification on Low Bid Price AFA INVESTMENTS: Faces Class Suit Over WARN Act Violations AGY HOLDING: Incurs $8.4 Million Net Loss in First Quarter AHERN RENTALS: Committee Now OKs Terms of Settlement Conferences ALLIED NEVADA: Moody's Gives 'B3' CFR; 'B3' C$400MM Notes Rating AMBAC ASSURANCE: AAC Receiver to Purchase $939MM in Surplus Notes AMBAC FINANCIAL: AAC Barred From Paying Interest on Surplus Notes AMBAC FINANCIAL:: AAC Receiver Seeks to Begin Paying Policyholders AMERICAN AIRLINES: Reports April 2012 Traffic Results AMERICAN APPAREL: Incurs $7.8 Million Net Loss in 1st Quarter AMERICAN CAMPUS: Moody's Lifts Rating on $27.67MM Bonds From Ba1 AMERICAN CAMPUS: Moody's Lifts Rating on $19.55MM Bonds From Ba1 AMERICAN FINANCIAL: Moody's Rates Preferred Securities '(P)Ba1' AMSCAN HOLDINGS: Swings to $2.1-Mil. Net Income in First Quarter APPLETON PAPERS: Moody's Reviews 'B2' CFR/PDR for Upgrade ARCAPITA BANK: Schedules Filing Deadline Extended to June 8 ARCTIC GLACIER: Ch. 15 Case Recognized in U.S. Bankruptcy Court AUSTRALIAN EQUITY: Case Summary & 12 Largest Unsecured Creditors AXION INTERNATIONAL: Delays Q1 Form 10-Q; To Restate 2011 Reports BANKATLANTIC BANCORP: Incurs $14.2 Million Net Loss in Q1 BEHRINGER HARVARD: Incurs $2.5 Million in First Quarter BETSEY JOHNSON: Has Access to Funding Through May 30 BETSEY JOHNSON: Has 7-Member Creditors' Panel BETSEY JOHNSON: Starts GOB Sale; Gordon And Hilco Run Sale BIOFUELS POWER: Delays Form 10-Q for First Quarter BIOLIFE SOLUTIONS: Incurs $297,000 Net Loss in First Quarter BISON BUILDING: Preferential Suit Against Tomball Forest Goes On BLUEGREEN CORP: Reports $5.6 Million Net Income in First Quarter BROADCAST INT'L: Incurs $185,000 Net Loss in First Quarter CABI SMA: Files Amended Schedules of Assets and Liabilities CABI SMA: Brickell Central's Property Valued at $17-Mil Under Plan CABI SMA: Brickell Central Says Amended Plan Can't Be Confirmed CAKE SHOP: Files for Chapter 11 Bankruptcy Protection CANO PETROLEUM: Can Hire Canaccord Genuity as Investment Banker CAPITOL CITY: Delays Form 10-Q for Q1, Needs Time for Review CAPITOL INFRASTRUCTURE: Assets to be Auctioned June 4 CATALYST PAPER: Amends Proposed Plan of Arrangement CENTRAL FEDERAL: Incurs $739,000 Net Loss in First Quarter CENTRAL PACIFIC: Solid Capital Level Cues Fitch to Upgrade Ratings CHIQUITA BRANDS: Moody's Changes Rating Outlook to Negative CLIFFS CLUB: Has Until Sept. 25 to Decide on Unexpired Leases CLIFFS CLUB: Has Deal Extending Plan Deadline Until May 22 COATES INTERNATIONAL: Incurs $1.4 Million Net Loss in Q1 COMMUNITY FIRST: Reports $1.7 Million Net Income in 1st Quarter CONCORD CAMERA: Board OKs Liquidating Distribution of Shares CONTRACT RESEARCH: Auction Cancelled; Lenders to Take Over CONVERTED ORGANICS: Swings to $2.9 Million Net Income in Q1 DAIS ANALYTIC: Lowers Net Loss to $18,400 Net Loss in Q1 DELPHI FIN'L: Moody's Lifts Sub. Debt Shelf Rating From '(P)Ba1' DELTA PETROLEUM: Must Try Again to Stop Shareholder Class Suit DELTATHREE INC: Swings to $542,000 Net Loss in First Quarter DEWEY & LEBOEUF: PBGC OKs Transfer of Warsaw Unit to Greenberg DIALOGIC INC: Tennenbaum Discloses 19.9% Equity Stake DYNEGY INC: Levi & Korsinky Commences Suit for Investors EASTMAN KODAK: Sells British Special Effects Business EASTMAN KODAK: P. Jotwani Resigns as Consumer Business Head EASTMAN KODAK: Has $366 Million Net Loss in First Quarter EASTMAN KODAK: Court OKs Termination of Orange Barrel Deal EAU TECHNOLOGIES: Incurs $558,000 Net Loss in First Quarter EDIETS.COM INC: Incurs $1.1 Million Net Loss in First Quarter EPAZZ INC: Delays Form 10-Q for First Quarter EPAZZ INC: Swings to $337,000 Net Loss in 2011 FIRST BANKS: Files Form 10-Q, Swings to $6.8MM Net Income in Q1 FIRST DATA: Files Form 10-Q, Incurs $152.5MM Net Loss in Q1 FIRST MARINER: Files Form 10-Q, Posts $1.8MM Net Income in Q1 FIRST SECURITY: Incurs $5.8 Million Net Loss in First Quarter FNB UNITED: Incurs $10.8 Million Net Loss in First Quarter FNB UNITED: Amends $60 Million Shares Offering Prospectus GENCORP INC: Moody's Affirms 'B1' CFR; Outlook Positive GENERAL MARITIME: Completes Restructuring, Emerges From Chapter 11 GENMED HOLDING: Delays Form 10-Q for First Quarter GENTA INC: Reports $5.2 Million Net Income in First Quarter GLOBAL AVIATION: Wants Plan Filing Period Extended to Dec. 1 GLOBAL AVIATION: Imperial Capital Ok'd as Committee Fin'l Advisor GLOBAL AVIATION: Wants Sept. 2 Deadline to Decide on Leases GLOBAL BRASS: Moody's Rates New $375MM Sr. Secured Notes 'B3' GLOBAL SHIP: Reports $7.9 Million Net Income in First Quarter GMAC MORTGAGE: Master Servicer Rating Cut on ResCap Bankruptcy GMAC-RFC: Fitch Cuts U.S. Res. Master Servicer Rating to 'RMS4' GREEN EARTH: Incurs $611,000 Net Loss in March 31 Quarter GUIDED THERAPEUTICS: Incurs $1 Million Net Loss in First Quarter GUITAR CENTER: Incurs $16.2 Million Net Loss in First Quarter GOOD SAM: Reports $4,000 Net Income in First Quarter HAYDEL PROPERTIES: Can Use Gene Whitehurst's Cash Collateral HCA INC: Moody's Rates New Senior Secured Term Loan A-3 at 'Ba3' HCSB FINANCIAL: Incurs $471,000 Net Loss in First Quarter HOSTESS BRANDS: Judge Combines Both Sides' CBA Proposals HUGHES TELEMATICS: Facing $92 Million Debt Maturity ICONIX BRAND: Moody's Upgrades Corp. Financial Rating to 'Ba3' IMAGEWARE SYSTEMS: Incurs $8.6 Million Net Loss in First Quarter IMEDICOR INC: Delays Form 10-Q for March 31 Quarter IMPERIAL INDUSTRIES: Incurs $426,000 Net Loss in First Quarter INGRID E. TRENKLE: Case Summary & 16 Largest Unsecured Creditors INTELSAT SA: Unit to Redeem Outstanding 9 1/2% Notes on June 15 INTERMETRO COMMUNICATIONS: Incurs $195,000 Net Loss in Q1 JAG ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors JC PENNEY: Moody's Says Rocky Strategic Turnaround Credit Neg. JEFFERSON COUNTY, AL: To Have Committee, No New Taxes JG WENTWORTH: Sued For Deceptive Trade Practices JSG HOSPITALITY: Voluntary Chapter 11 Case Summary KIWIBOX.COM INC: Delays Form 10-Q for First Quarter KRONOS WORLDWIDE: Fitch Rates New $600 Million Term Loan 'BB' LIGHTSQUARED INC: Hiring Milbank as Bankruptcy Attorneys LIGHTSQUARED INC: Can Hire Kurtzman Carson as Claims Agent LIGHTSQUARED INC: Schedules Filing Deadline Extended to June 27 LIGHTSQUARED INC: To Hold Initial Case Conference on June 11 MARIANA RETIREMENT FUND: CNMI Also Wants Court to Dismiss Case MBI ENERGY: Moody's Issues Correction to April 17 Rating Release MEDIA GENERAL: Sells Newspapers, Except Tampa Assets, to Berkshire MERCURY COS: Lawsuit Over Sale of Colorado Units Goes to Trial MOHEGAN TRIBAL: Reports $14.6 Million Net Income in March 31 Qtr. MOMENTIVE PERFORMANCE: Moody's Rates Senior Secured Notes 'B2' MOUNTAIN PROVINCE: Incurs C$4.4 Million Net Loss in First Quarter MPG OFFICE: Caspian Holds 9.2% of Series A Preferred Stock MUNICIPAL MORTGAGE: Incurs $8.8-Mil. Net Loss in First Quarter NADYA SULEMAN: Incomplete Documents Cue Judge to Reject Case NB&J LLC: Case Summary & 6 Largest Unsecured Creditors NEWLAND INT'L: Fitch Cuts Rating on $220-Mil. Sr. Notes to 'Dsf' NORD RESOURCES: Incurs $2.5 Million Net Loss in First Quarter NORMAN REGIONAL: Moody's Upgrades Long-Term Bond Rating From Ba1 NORTHCORE TECHNOLOGIES: Annual Meeting Scheduled for June 6 NORTHERN CALIFORNIA BANCORP: Delays Form 10-Q for First Quarter OMNICOMM SYSTEMS: Reports $3.8 Million Revenue in First Quarter OVERLAND STORAGE: Incurs $3.8 Million Net Loss in March 31 Qtr. PACIFIC MONARCH: Case Status Conference Continued Until July 19 PACIFIC MONARCH: Cash Collateral Access Extended Until May 22 PATRIOT NATIONAL: Swings to $546,000 Net Income in 1st Quarter PETROLEOS DE VENEZUELA: Fitch to Rate $3BB Issuance at 'B+/RR4' PGI INCORPORATED: Incurs $1.5 Million Net Loss in First Quarter PHI GROUP: Delays March 31 Form 10-Q for Review PILSEN LOFTS: Case Summary & 20 Largest Unsecured Creditors PINNACLE AIRLINE: Steelworkers Deal Deadline Extended to July 13 PINNACLE AIRLINES: Wins Final OK of $74.3-Mil. DIP Financing PLY GEM HOLDINGS: Incurs $25.6 Million Net Loss in 1st Quarter PRAYOSHA INVESTMENTS: Case Summary & 19 Largest Unsec. Creditors PRINCE SPORTS: Asian Creditors Named to Committee PROTECTIVE LIFE: Fitch Puts Rating on Subordinated Debt at 'BB+' REDDY ICE: Creditors Committee Taps BDO USA as Financial Advisors REDDY ICE: Wants Until May 31 to File Schedules and Liabilities REDDY ICE: Balks at Equity Holders Committee Appointment REDDY ICE: Shareholders Want More Details About Arctic Plan REICHHOLD INDUSTRIES: Moody's Withdraws Ratings RESIDENTIAL CAPITAL: Ally Pays $750MM to Avoid "Meritless" Claims RESIDENTIAL CAPITAL: Final Hearing on Barclays DIP Loan June 12 RESIDENTIAL CAPITAL: Ally's $150MM Financing Has Interim Approval RESIDENTIAL CAPITAL: Use of Citi Cash Collateral Has Interim Nod RESIDENTIAL CAPITAL: Proposes AFI Shared Services Agreement RESIDENTIAL CAPITAL: Amends List of 50 Largest Unsec. Creditors RITE AID: Completes Add-On Offering of $421MM 9.25% Senior Notes ROSETTA GENOMICS: Effects a 1-for-15 Reverse Stock Split ROTECH HEALTHCARE: Incurs $17.2 Million Net Loss in Q1 ROTHSTEIN ROSENFELDT: Don King Suit Moved to District Court ROOMSTORE INC: Duels With Creditors Over Bankruptcy Probe RUBICON FINANCIAL: Reports $83,900 Net Income in First Quarter SAAB CARS: To Sell U.S. Parts Inventory at May 29 Auction SALLY HOLDINGS: Has $700 Million 5.75% Senior Notes Offering SAN JOAQUIN TRANS: Fitch Affirms 'BB' Rating on Outstanding Bonds SB PARTNERS: Delays Q1 Form 10-Q to Review Omaha Financials SBD AIRPORT: SBIA Chief Insists Right to Cancel Fuel Access SEARS HOLDINGS: To Pursue Partial Spin-Off of Sears Canada SIMON WORLDWIDE: Incurs $464,000 Net Loss in First Quarter SMART-TEK SOLUTIONS: Incurs $8.1MM Comprehensive Loss in 2011 SMART-TEK SOLUTIONS: Delays Form 10-Q for First Quarter SP NEWSPRINT: Lease for Polk County Recycling Operations Approved SP NEWSPRINT: Panel's Investigation Period Extended Until June 13 SP NEWSPRINT: R.L. Reimers Wins Lift Stay to Commence Proceedings SPECIALTY PRODUCTS: Asbestos Creditors Float Ch. 11 Plan SPEEDEMISSIONS INC: Incurs $117,000 Net Loss in First Quarter STRATEGIC AMERICAN: Provides Operational Update for Galveston Bay STUDEBAKER'S URBANA: Case Summary & 20 Largest Unsecured Creditors SWORDFISH FINANCIAL: Delays Form 10-Q for First Quarter TALON INTERNATIONAL: Incurs $206,000 Net Loss in First Quarter TALON INTERNATIONAL: Morris Weiss Named to Board of Directors TELECONNECT INC: Incurs $810,000 Net Loss in March 31 Quarter THERMOENERGY CORP: Incurs $17.4 Million Net Loss in 2011 TIME SERVICE: Voluntary Chapter 11 Case Summary TN-K ENERGY: Reports $3.1 Million Net Income in First Quarter TPF GENERATION: Moody's Upgrades Rating on 2nd Lien Loan to 'B2' TRAFFIC CONTROL: Auction to Take Place on July 25 TRAVELPORT HOLDINGS: Has $175-Mil. Credit Pact with Credit Suisse TREASURES FURNITURE: Owes $2.1 Million to Creditors TRITON AVIATION: Credit Risk Cues Fitch to Affirm All Ratings UNIVERSAL SOLAR: Incurs $439,000 Net Loss in First Quarter USG CORP: Three Directors Elected at Annual Meeting VELO HOLDINGS: Seeks to Sell New Equity at July Auction VELO HOLDINGS: Rejects Marketing Deal with Travelocity.com VELO HOLDINGS: Wants to Hire Q Advisors LLC as Investment Banker VELO HOLDINGS: Proposes Key Employee Incentive Plan VERENIUM CORP: Reports $30.1 Million Net Income in 1st Quarter VHGI HOLDINGS: Delays Form 10-Q for First Quarter VIASPACE INC: Incurs $668,000 Net Loss in First Quarter VITESSE SEMICONDUCTOR: S. Jarvis Appointed to Board of Directors WARNER MUSIC: Incurs $34 Million Net Loss in First Quarter WESTERN MOHEGAN: Tribe Wants Bankruptcy Moved to District Court WHITEHALL AVENUE: Case Summary & 34 Largest Unsecured Creditors ZOGENIX INC: Incurs $10.3 Million Net Loss in First Quarter ZOO ENTERTAINMENT: Delays Form 10-Q for First Quarter * BOOK REVIEW: Ralph H. Kilmann's Beyond the Quick Fix ********* 13 PARTNERSHIP: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: 13 Partnership 1600 Naud Street Los Angeles, CA 90012 Bankruptcy Case No.: 12-26852 Chapter 11 Petition Date: May 14, 2012 Court: United States Bankruptcy Court Central District of California (Los Angeles) Judge: Thomas B. Donovan Debtor's Counsel: Rachel S Ruttenberg, Esq. LAW OFFICES OF MARK E GOODFRIEND 16255 Ventura Blvd., Suite 205 Encino, CA 91436 Tel: (818) 783-8866 Fax: (818) 783-5445 E-mail: rruttenberg@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-26852.pdf The petition was signed by Manes Wiezel, general partner. 1ST FINANCIAL: Reports $584,000 Net Income in First Quarter ----------------------------------------------------------- 1st Financial Services Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $584,000 on $6.54 million of total interest income for the three months ended March 31, 2012, compared with net income of $602,000 on $7.12 of total interest income for the same period during the prior year. The Company reported a net loss of $20.5 million on net interest income of $20.5 million for 2011, compared with a net loss of $5.3 million on interest income of $20.4 million for 2010. The Company's balance sheet at March 31, 2012, showed $700.18 million in total assets, $681.56 million in total liabilities and $18.61 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/j9U3g0 About 1st Financial Hendersonville, North Carolina-based 1st Financial Services Corporation is the bank holding company for Mountain 1st Bank & Trust Company (the Bank). 1st Financial has essentially no other assets or liabilities other than its investment in the Bank. 1st Financial's business activity consists of directing the activities of the Bank. The Bank has a wholly owned subsidiary, Clear Focus Holdings LLC. The Bank was incorporated under the laws of the state of North Carolina on April 30, 2004, and opened for business on May 14, 2004, as a North Carolina chartered commercial bank. At Dec. 31, 2011, the Bank was engaged in general commercial banking primarily in nine western North Carolina counties: Buncombe, Catawba, Cleveland, Haywood, Henderson, McDowell, Polk, Rutherford, and Transylvania. The Bank operates under the banking laws of North Carolina and the rules and regulations of the Federal Deposit Insurance Corporation (the FDIC). As a North Carolina bank, the Bank is subject to examination and regulation by the FDIC and the North Carolina Commissioner of Banks (the Commissioner). The Bank is further subject to certain regulations of the Federal Reserve governing reserve requirements to be maintained against deposits and other matters. The business and regulation of the Bank are also subject to legislative changes from time to time. The Bank's primary market area is southwestern North Carolina. Its main office and Hendersonville South office are located in Hendersonville, North Carolina. At Dec. 31, 2011, the Bank also had full service branch offices in Asheville, Brevard, Columbus, Etowah, Forest City, Fletcher, Hickory, Marion, Shelby, and Waynesville, North Carolina. The Bank's loans and deposits are primarily generated from within its local market area. For 2011, Elliott Davis PLLC, in Greenville, South Carolina, expressed substantial doubt about 1st Financial Services' 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, Mountain First Bank & Trust Company, is under a regulatory Consent Order with the Federal Deposit Insurance Corporation and the North Carolina Commissioner of Banks that requires, among other provisions, capital ratios to be maintained at certain heightened levels. "In addition, the Company is under a Written Agreement with the Federal Reserve Bank of Richmond that requires, among other provisions, the submission and implementation of a capital plan to improve the Company and the Bank's capital levels. As of Dec. 31, 2011, both the Bank and the Company are considered "significantly undercapitalized" based on their respective regulatory capital levels." 258 NEST: Case Summary & 8 Largest Unsecured Creditors ------------------------------------------------------ Debtor: The 258 Nest 2455 E. Speedway #101 Tucson, AZ 85719 Bankruptcy Case No.: 12-10610 Chapter 11 Petition Date: May 14, 2012 Court: United States Bankruptcy Court District of Arizona (Tucson) Judge: Eileen W. Hollowell Debtor's Counsel: Scott D. Gibson, Esq, THOMPSON KRONE GIBSON 6303 E. Tanque Verde Road, Suite 210 Tucson, AZ 85715 Tel: (520) 884-9694 Fax: (520) 323-4613 E-mail: sdgecf@lawtkg.com Estimated Assets: $1,000,001 to $100,000,000 Estimated Debts: $1,000,001 to $100,000,000 A copy of the Company's list of its eight largest unsecured creditors is available for free at http://bankrupt.com/misc/azb12-10610.pdf The petition was signed by Gregory Moore, president of Gregory Moore Real Estate Company, Inc., general partner. 30DC INC: Delays Form 10-Q for March 31 Quarter ----------------------------------------------- 30DC, Inc., was unable, without unreasonable effort and expense, to prepare its accounting records and schedules in sufficient time to allow its accountants to complete their review of the Company's financial statements for the period ended March 31, 2012, before the required filing date. The Company intends to file the subject Quarterly Report on Form 10-Q on or before the fifth calendar day following the prescribed due date. About 30DC Inc. New York-based 30DC, Inc., provides Internet marketing services and related training to help Internet companies in operating their businesses. It operates in two divisions, 30 Day Challenge and Immediate Edge. The Company reported a net loss of $1.44 million for the fiscal year ended June 30, 2011, following a net loss of $1.06 million in fiscal 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.77 million in total assets, $2.08 million in total liabilities and a $315,408 total stockholders' deficiency. As of Dec. 31, 2011, the Company has a working capital deficit of approximately $1,873,000 and has accumulated losses of approximately $3,050,100 since its inception. The Company's ability to continue as a going concern is dependent upon its ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due and upon attaining profitable operations. The Company does not have sufficient capital to meet its needs and continues to seek loans or equity placements to cover those cash needs. No commitments to provide additional funds have been made and there can be no assurance that any additional funds will be available to cover expenses as they may be incurred. If the Company is unable to raise additional capital or encounters unforeseen circumstances, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, issuance of additional shares of the Company's stock to settle operating liabilities which would dilute existing shareholders, curtailing its operations, suspending the pursuit of its business plan and controlling overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company's ability to continue as a going concern. As reported in the TCR on Dec. 19, 2011, Marcum LLP, in New York, expressed substantial doubt about 30DC's ability to continue as a going concern, following the Company's results for the fiscal year ended June 30, 2011. The independent auditors noted that the Company has had recurring losses, and has a working capital and stockholders' deficiency as of June 30, 2011. 4TH STREET EAST: Lender Wins Relief From Bankruptcy Stay -------------------------------------------------------- Bankruptcy Judge Neil W. Bason issued a "tentative ruling" this week granting Coastline RE Holdings Corp. relief from the automatic stay in the Chapter 11 case of 4th Street East Investors, Inc. Coastline alleges "bad faith" by the Debtor and argues that this is sufficient cause for relief from the automatic stay and for conversion of the case to Chapter 7. Coastline also alleges that relief is warranted because the case is essentially a "two-party dispute." Coastline also contends the Debtor cannot confirm a plan of reorganization and that creditors would be better served if the funds used for the Debtor's attorneys were paid directly to those creditors. Coastline also argues that the Debtor or its principals have violated fiduciary duties by favoring insiders. The Debtor attributed its financial troubles to "the general deterioration of the market over the past several years [that] caused several vacancies in storage units" which created "some cash flow problems," as well as the balloon payment on Coastline's promissory note which came due Nov. 1, 2011. According to Judge Bason, Coastline has not shown bad faith by the Debtor or established other cause for relief from the stay or for conversion to Chapter 7. But Coastline has shown that the Debtor lacks equity in the Property and has not shown "a reasonable possibility" that it can cram down a plan and accomplish "a successful reorganization within a reasonable time." Therefore, relief from the automatic stay is appropriate, the judge said. Judge Bason held that Coastline is correct that this is essentially a two-party dispute: apart from Coastline's deficiency claim and the claims of the Debtor's insiders, all other general unsecured claims amount to less than $9,000. It is also true that, although the Debtor alleges substantial insider claims, insider votes cannot be counted for purposes of "cramdown" under 11 U.S.C. Sec. 1129(a)(10) and (b). A copy of Judge Bason's May 15, 2012 ruling is available at http://is.gd/GnnizOfrom Leagle.com. 4th Street East Investors, Inc., owns and operates a storage facility consisting of 5 buildings with 240 rentable storage units, an office, and a residence for an on-site manager. 4th Street filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 12-17951) on March 5, 2012, listing $1.02 million in assets and $1.47 million in liabilities. Judge Neil W. Bason oversees the case. Craig G. Margulies, Esq., at The Margulies Law Firm, APLC, serves as the Debtor's counsel. The petition was signed by Kim Holmes, president. 785 PARTNERS: F Reorganization Plan Wins Confirmation ----------------------------------------------------- The Hon. Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York confirmed 785 Partners LLC's Fifth Amended Plan of Reorganization dated as of May 9, 2012. According to the Plan, the funds utilized to make cash payments under the Plan will be generated from, among other things, the disposition of the BPA Down Payment Escrow and other escrows. Moreover, Time Square and First Manhattan will pay administrative expense claims in full in cash, and allowed general unsecured Claims will be paid in full in cash. 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%. 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. A full-text copy of the Fifth Amended Plan is available for free at http://bankrupt.com/misc/785Partners_Blacklined5THPlan.pdf 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. 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. 9362 JOINT: Case Summary & 7 Largest Unsecured Creditors -------------------------------------------------------- Debtor: 9362 Joint Venture, LLC 3950 North Lowell Avenue Chicago, IL 60641 Bankruptcy Case No.: 12-19819 Chapter 11 Petition Date: May 15, 2012 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: A. Benjamin Goldgar Debtor's Counsel: Ethan Ostrow, Esq. BROWN, UDELL, POMERANTZ & DELRAHIM, LTD. 1332 North Halsted Street, Suite 100 Chicago, IL 60642 Tel: (312) 475-9900 Fax: (312) 475-1188 E-mail: eostrow@bupdlaw.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the company's list of its seven largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb12-19819.pdf The petition was signed by Paul Leongas, manager. ACCESS PHARMACEUTICALS: Incurs $4.9 Million Net Loss in Q1 ---------------------------------------------------------- Access Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $4.89 million on $1.85 million of total revenues for the three months ended March 31, 2012, compared with a net loss of $1.89 million on $150,000 of total revenues for the same period during the prior year. The Company reported a net loss of $2.53 million in 2011, compared with a net loss of $7.53 million in 2010. The Company's balance sheet at March 31, 2012, showed $3.19 million in total assets, $23.35 million in total liabilities and a $20.16 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/p90MhU About Access Pharmaceuticals Access Pharmaceuticals, Inc., develops pharmaceutical products primarily based upon its nano-polymer chemistry technologies and other drug delivery technologies. The Company currently has one approved product, one product candidate at Phase 3 of clinical development, three product candidates in Phase 2 of clinical development and other product candidates in pre-clinical development. After auditing the 2011 results, Whitley Penn LLP, in Dallas Texas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has had recurring losses from operations, negative cash flows from operating activities and has an accumulated deficit. ADAMAR OF NEW JERSEY: Tort Suit Dismissed Over Plaintiff's No-Show ------------------------------------------------------------------ District Judge Kiyo A. Matsumoto dismissed with prejudice a 2006 lawsuit, FLOROS EFSTRATIOU and TRACEY EFSTRATIOU, Plaintiffs, v. ADAMAR OF NEW JERSEY, INC. d/b/a TROPICANA CASINO & HOTEL RESORT, Defendant, No. 06-CV-764(E.D.N.Y), for plaintiffs' failure to prosecute and to follow court orders. The complaint, filed Feb. 22, 2006, alleges state law tort claims against Adamar of New Jersey, Inc. A copy of the District Court's May 14, 2012 Memorandum and Order is available at http://is.gd/Kokwf8from Leagle.com. By letter dated Dec. 9, 2011, counsel for the Debtor advised the District Court that the bankruptcy proceedings had concluded with the complete liquidation of the Debtor, leaving no assets remaining to satisfy any judgment that the plaintiffs may seek in the action. In response to inquiries from the plaintiffs regarding insurance coverage that may be available to satisfy a judgment, the Debtor's counsel advised the plaintiffs that the Debtor was self-insured for the first $1 million of any liability, and provided a declarations page from the insurance policy in place for the period when the plaintiffs' alleged injury occurred. Magistrate Judge Viktor V. Pohorelsky directed the plaintiffs' counsel to advise the Court by March 1, 2012, whether information provided by the Debtor's counsel was sufficient. The plaintiffs' counsel failed to do so. On April 6, 2012, Magistrate Judge Pohorelsky issued a Report and Recommendation recommending that the court dismiss plaintiffs' claims against the Debtor. Notice of the Report and Recommendation was sent electronically to the parties appearing on the docket via the court's electronic filing system on April 6, 2012. Any objections to the Report and Recommendation were to be filed within 14 days of receipt of the report. No objections were filed and the filing deadline has expired. On April 23, 2012, the District Court directed the plaintiffs to show cause by April 30 (i) why the Report and Recommendation recommending dismissal should not be adopted; and (ii) why the case should not be dismissed. The plaintiffs did not respond in writing to the Order to Show Cause by the April 30 deadline. About Tropicana Entertainment Las Vegas, Nevada-based Tropicana Entertainment Inc., along with its affiliates, owns or operates nine casinos and resorts in Indiana, Louisiana, Mississippi, Nevada and New Jersey. The Company owns a development property in Aruba. Tropicana Entertainment LLC and certain affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 08-10856) on May 5, 2008. Kirkland & Ellis LLP and Richards Layton & Finger, represent the Debtors in their restructuring efforts. Lazard Ltd. served as financial advisor and Kurtzman Carson Consultants LLC served as notice, claims, and balloting agent. Epiq Bankruptcy Solutions LLC served as the Debtors' Web site administration agent. AlixPartners LLP served as the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represented the Official Committee of Unsecured Creditors. Capstone Advisory Group LLC served as financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana obtained confirmation of a reorganization plan in May 2009. Effective March 31, 2010, Tropicana emerged from the Chapter 11 reorganization process as an Carl Icahn-owned entity. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, obtained approval of a separate Chapter 11 plan. On April 29, 2009, non-debtor units of the OpCo Debtors, designated as the New Jersey Debtors -- Adamar of New Jersey, Inc., and its affiliate, Manchester Mall, Inc. -- filed for Chapter 11 protection (Bankr. D. N.J. Lead Case No. 09-20711) to effectuate a sale of the Atlantic City Resort and Casino to a group of investors-led by Carl Icahn. Judge Judith H. Wizmur presides over the New Jersey cases. Manchester Mall was a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represented the New Jersey Debtors. Kurtzman Carson Consultants LLC served as claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Adamar of New Jersey and Manchester Mall later merged into Adamar of NJ In Liquidation LLC. The merger and name change was in accordance with an Amended and Restated Purchase Agreement, which governs the sale and transfer of the operations of the Tropicana Casino and Resort - Atlantic City, including substantially all of the New Jersey Debtors' assets, to Tropicana Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana AC Sub Corp., free and clear of any and all liens, claims and encumbrances. ADINO ENERGY: Delays First Quarter Form 10-Q for Review ------------------------------------------------------- Adino Energy Corporation informed the U.S. Securities and Exchange Commission that it will be late in filing its quarterly report on Form 10-Q for the period ended March 31, 2012. The Company said it is completing its review of various transactions made in the fiscal quarter, and this review could not be completed without unreasonable effort or expense by the filing date. About Adino Energy Based in Houston, Texas, Adino Energy Corporation (OTC BB: ADNY) -- http://www.adinoenergycorp.com/-- through its wholly owned subsidiary Intercontinental Fuels, LLC, specializes in fuel terminal operations for retail, wholesale, and governmental suppliers. The Company reported a net loss of $1.31 million on $277,917 of total revenues in 2011, compared with a net loss of $277,802 on $58,107 of total revenues in 2010. The Company's balance sheet at Dec. 31, 2011, showed $4.37 million in total assets, $7.09 million in total liabilities and a $2.71 million total shareholders' deficit. In its audit report for the 2011 results, M&K CPAS, PLLC, in Houston, Texas, 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 from operations and maintains a working capital deficit. ADVANCE PRESORT: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Advance Presort Service, Inc. 4258 N. Knox Ave. Chicago, IL 60641-1903 Bankruptcy Case No.: 12-19621 Chapter 11 Petition Date: May 14, 2012 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Donald R. Cassling Debtor's Counsel: Scott R. Clar, Esq. CRANE HEYMAN SIMON WELCH & CLAR 135 S Lasalle, Suite 3705 Chicago, IL 60603 Tel: (312) 641-6777 Fax: (312) 641-7114 E-mail: sclar@craneheyman.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/ilnb12-19621.pdf The petition was signed by Dennis MacHarg, president. ADVANCED MEDICAL: Incurs $1.1 Million Net Loss in First Quarter --------------------------------------------------------------- Advanced Medical Isotope Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.15 million on $48,584 of revenue for the three months ended March 31, 2012, compared with a net loss of $753,267 on $150,557 of revenue for the same period during the prior year. The Company reported a net loss of $2.7 million for 2011, compared with a net loss of $4.1 million for 2010. The Company's balance sheet at March 31, 2012, showed $969,233 in total assets, $6.43 million in total liabilities and a $5.46 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/cbtfam About Advanced Medical Kennewick, Washington-based Advanced Medical Isotope Corporation is engaged in the production and distribution of medical isotopes and medical isotope technologies. Medical isotopes are used in molecular imaging, therapy, and nuclear medicine to diagnose, manage and treat diseases. After auditing the financial statements for the year ended Dec. 31, 2011, HJ & Associates, LLC, in Salt Lake City, Utah, expressed substantial doubt about Advanced Medical Isotope's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses, used significant cash in support of its operating activities and, based upon current operating levels, requires additional capital or significant restructuring to sustain its operation for the foreseeable future. AEOLUS PHARMACEUTICALS: Reports $2.7MM Income in March 31 Qtr. -------------------------------------------------------------- Aeolus Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $2.76 million on $2.23 million of contract revenue for the three months ended March 31, 2012, compared with net income of $3.77 million on $785,000 of contract revenue for the same period during the prior year. The Company reported net income of $5.74 million on $4.44 million of contract revenue for the six months ended March 31, 2012, compared with a net loss of $3.84 million on $785,000 of contract revenue for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $3.11 million in total assets, $19.76 million in total liabilities, and a $16.65 million total stockholders' deficit. Going Concern The Company has incurred significant losses since its inception. At March 31, 2012, the Company's accumulated deficit was $176,672,000. This raises substantial doubt about the Comany's ability to continue as a going concern, which will be dependent on the Company's ability to generate sufficient cash flows to meet the Company's obligations on a timely basis, obtain additional financing and, ultimately, achieve operating profits through product sales or Biomedical Advanced Research and Development Authority procurements. The Company intends to explore strategic and financial alternatives, which may include a merger or acquisition with or by another company, the sale of shares of stock or convertible debentures, the establishment of new collaborations for current research programs that include initial cash payments and on-going research support and the out-licensing of our compounds for development by a third party. The Company believes that without additional investment capital it will not have sufficient cash to fund its activities in the near future, and will not be able to continue operating. As such, the Company's continuation as a going concern is dependent upon its ability to raise additional financing. If the Company is unable to obtain additional financing to fund operations, it will need to eliminate some or all of its activities, merge with another company, sell some or all of its assets to another company, or cease operations entirely. There can be no assurance that the Company will be able to obtain additional financing on acceptable terms or at all, or that the Company will be able to merge with another Company or sell any or all of its assets. Haskell & White LLP, in Irvine, Calif., expressed substantial doubt about the Company's ability to continue as a going concern following the fiscal 2011 financial results. The independent auditors noted that the Company has suffered recurring losses, negative cash flows from operations and management believes the Company does not currently possess sufficient working capital to fund its operations past the second quarter of fiscal 2012. A copy of the Form 10-Q is available for free at: http://is.gd/G7XDnq About Aeolus Pharmaceuticals Based in Mission Viejo, California, Aeolus Pharmaceuticals Inc. (OTC BB: AOLS) -- http://www.aeoluspharma.com/-- is developing a variety of therapeutic agents based on its proprietary small molecule catalytic antioxidants, with AEOL 10150 being the first to enter human clinical evaluation. AEOL 10150 is a patented, small molecule catalytic antioxidant that mimics and thereby amplifies the body's natural enzymatic systems for eliminating reactive oxygen species, or free radicals. Studies funded by the National Institutes for Health are currently underway evaluating AEOL 10150 as a treatment for exposure to radiation, sulfur mustard gas and chlorine gas. A second compound, AEOL 11207, has demonstrated efficacy in animal models of Parkinson's disease and is currently being evaluated as a potential treatment for epilepsy. AETERNA ZENTARIS: Gets NASDAQ Notification on Low Bid Price ----------------------------------------------------------- Aeterna Zentaris Inc. has received a notice from The NASDAQ Stock Market indicating that the Company's minimum bid price has fallen below $1.00 for 30 consecutive business days, and, therefore, was not in compliance with NASDAQ Marketplace Rule5450(a)(1). The Company has been provided 180 calendar days, or until Nov. 12, 2012, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company's common stock must be at least$1.00per share for a minimum of 10 consecutive business days. This notice does not impact the Company's listing on The NASDAQ Global Market at this time. If the Company does not regain compliance within the initial 180- day period, but otherwise meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for The NASDAQ Capital Market, except for the bid price requirement, and the Company provides NASDAQ with notice of its intention to cure the bid price deficiency, the NASDAQ rules may permit the Company to transfer to The NASDAQ Capital Market, which would give the Company an additional 180 calendar days to regain compliance. If the Company is not eligible for an additional compliance period, NASDAQ will notify the Company that its securities are subject to delisting. At that time, the Company may appeal this determination to delist its securities to a Listing Qualifications Panel. The Company intends to monitor the bid price for its securities between now and Nov. 12, 2012 and will consider all available options to resolve the deficiency and regain compliance with the minimum bid price requirement. About Aeterna Zentaris Aeterna Zentaris Inc. -- http://www.aezsinc.com/-- is an oncology and endocrinology drug development company currently investigating treatments for various unmet medical needs. The Company's pipeline encompasses compounds at all stages of development, from drug discovery through to marketed products. AFA INVESTMENTS: Faces Class Suit Over WARN Act Violations ---------------------------------------------------------- Huffington Post reports that Nadia Sanchez has filed a class action lawsuit in the bankruptcy court in Delaware, asserting that she and 200 co-workers were abruptly laid off early last month when AFA decided to shutter a plant in Southern California amidst an Internet backlash to its controversial beef-trimmings product. According to the report, the lawsuit says the workers weren't given the 60-days advance notice required under the federal Worker Adjustment and Retraining Notification (WARN) Act and California labor law. Ms. Sanchez's lawyer, Rene S. Roupinian of New York, told HuffPost that the low-wage meatpacking workers weren't given any written warning of the impending layoffs. Of the roughly one dozen AFA workers to whom Mr. Roupinian and her colleagues have talked, she said, most appeared to be from Mexico, like Ms. Sanchez, and worked on the floor of the meatpacking plant. The report relates Mr. Roupinian said the workers earned an average of about $8.25 an hour, for an annual salary of roughly $17,000. They worked in a plant just south of downtown Los Angeles, where the mandated living wage for workers on city contracts is $10.42 an hour. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. is one of the largest processors of ground beef products in the United States. The Company has five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA has seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% percent of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings -- BLBT -- affected sales. Judge Mary Walrath presides over the case. Lawyers at Jones Day and Pachulski Stang Ziehl & Jones LLP serve as the Debtors' counsel. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. McDonald Hopkins LLC and Potter Anderson & Corroon LLP represents the Committee. AGY HOLDING: Incurs $8.4 Million Net Loss in First Quarter ---------------------------------------------------------- AGY Holding Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $8.40 million on $47.05 million of net sales for the three months ended March 31, 2012, compared with a net loss of $7.06 million on $44.93 million of net sales for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $232.85 million in total assets, $280.34 million in total liabilities and a $47.49 million total shareholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/E73unm About AGY Holding AGY Holding Corp. -- http://www.agy.com/-- produces fiberglass yarns and high-strength fiberglass reinforcements used in composites applications. AGY serves a range of markets including aerospace, defense, electronics, construction and industrial. Headquartered in Aiken, South Carolina, AGY has a European office in Lyon, France and manufacturing facilities in the U.S. in Aiken, South Carolina and Huntingdon, Pennsylvania and a controlling interest in a manufacturing facility in Shanghai, China. AGY Holding reported a net loss of $66.76 million in 2011, a net loss of $14.57 million in 2010, and a net loss of $93.51 million in 2009. * * * As reported by the TCR on Nov. 23, 2011, Moody's Investors Service lowered AGY Holding Corporation's (AGY) Corporate Family Rating (CFR) to Caa2 from B3, reflecting the decline in the company's liquidity and weak operating performance. In the Dec. 5, 2011, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Aiken, S.C.-based AGY Holding Corp. (AGY) to 'CCC-' from 'CCC+'. "Our rating action reflects our view that AGY's credit quality has deteriorated due to ongoing weakness in its operating performance, a decline in liquidity, and the potential for insufficient liquidity to meet interest payments in 2012. As of Sept. 30, 2011, the company reported total liquidity of $17 million including $16.2 million of availability under its unrated revolving credit facility. AGY reported that it expected liquidity to decline to levels of around $12.4 million in November following the payment of nearly $10 million in semiannual interest on its notes. It also expects effective availability to be lower than the reported figures, because the company is also subject to a fixed-charge coverage ratio covenant if availability under its revolving credit facility declines to below $6.25 million. We do not expect to be in compliance if the covenant becomes applicable. Current liquidity levels have declined from our expectations of a minimum liquidity of $20 million at the previous rating. Key credit risks, in our view, are liquidity insufficient to meet requirements (including approximately $20 million in future interest payments in 2012). An additional risk is potential liquidity requirements possibly arising from the put option available with the seller of AGY Hong Kong Ltd. for the remaining 30% of the company not yet purchased by AGY. The put option can be exercised through Dec. 31, 2013. AGY reports a fair value of about $0.23 million for the remaining 30% of the AGY Hong Kong Ltd. as of Sept. 30, 2011 -- a decline from an initial estimated value of about $12 million in 2009. AGY Hong Kong also has about $10.5 million of debt, which the company reports it is trying to extend, and approximately $11.5 million in annually renewable working capital facilities due in 2012 (debt at AGY Hong Kong is nonrecourse to AGY)," S&P said. AHERN RENTALS: Committee Now OKs Terms of Settlement Conferences ---------------------------------------------------------------- BankruptcyData.com reports that Ahern Rentals' official committee of unsecured creditors filed with the U.S. Bankruptcy Court a response to the Debtors amended motion for an order, pursuant to Section 105(A) of the Bankruptcy Code and Local Rule 9019, requiring each personal injury claimant to attend and participate in a settlement conference as a condition precedent to relief from the automatic stay. The response states, "The Committee has no objection to the relief requested by the Amended Motion because the Amended Motion addresses the primary concerns raised by the Committee and the Court to the Debtor's previous motion to approve alternative dispute resolution procedures." About Ahern Rentals Founded in 1953 with one location in Las Vegas, Nevada, Ahern Rentals Inc. -- http://www.ahern.com/-- now offers rental equipment to customers through its 74 locations in Arizona, Arkansas, California, Colorado, Georgia, Kansas, Maryland, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and Washington. Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain an extension of the Aug. 21, 2011 maturity of its revolving credit facility. Judge Bruce T. Beesley presides over the case. Lawyers at Gordon Silver serve as the Debtor's counsel. The Debtor's financial advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to Bank of America, as the DIP Agent and First Lien Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer. Attorneys for the Majority Term Lenders are Paul Aronzon, Esq., and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP. Counsel for the Majority Second Lienholder are Paul V. Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq., at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert LLP argue for certain revolving lenders. Attorneys for U.S. Bank National Association, as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard, Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland & Hart. In its schedules, the Debtor disclosed $485.8 million in assets and $649.9 million in liabilities. The Official Committee of Unsecured Creditors has tapped Covington & Burling LLP as counsel, Downey Brand LLP as local counsel, and FTI Consulting as financial advisor. ALLIED NEVADA: Moody's Gives 'B3' CFR; 'B3' C$400MM Notes Rating ---------------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Allied Nevada Gold Corp., including a B3 Corporate Family Rating, B3 Probability of Default Rating, and SGL-3 Speculative Grade Liquidity Rating. Moody's also assigned a B3 foreign currency rating to the company's C$400 million 8.75% senior unsecured notes due May 2019 ("2019 Notes"). The rating outlook is stable. Proceeds from the offering, along with cash flow and cash balances, will be used to fund the expansion of the company's Hycroft Mine in Nevada and for general corporate purposes. The 2019 Notes will be offered and sold on a private placement basis in the Canadian and US markets and have been underwritten by Scotia Capital Inc. and GMP Securities L.P. The company has simultaneously entered into a cross-currency interest rate swap with Scotia Capital which guarantees an effective principal amount of US$400.4 million at an effective annual interest rate of 8.375%. The 2019 Notes have not been, and will not be registered under U.S. securities laws. Ratings Rationale Allied Nevada's B3 Corporate Family, Probability of Default and Foreign Currency Ratings reflect the company's modest size and limited geographic and product diversification. The company's Hycroft Mine is expected to account for all of the company's gold and silver production within the intermediate time horizon. Consequently, operational difficulties at Hycroft could have a significant impact on the company's financial position. The ratings also reflect the company's exposure to metal price volatility, operating and development cost pressures and substantial investment requirements to grow and diversify the company's production profile. However the ratings acknowledge the current strength in gold and silver prices, which Moody's anticipates will continue through 2012 and into 2013 and the better level of cash flow that will be available to internally support the strategic capital expenditures to grow the business. Nonetheless, while Moody's recognizes the importance of these investment requirements to Allied Nevada's future operations, Moody's anticipates that the external funding levels required for expansionary capital spending could pressure free cash flow, particularly in a lower gold and silver price environment. Notwithstanding Moody's view that at current prices of gold and silver, Allied Nevada's margins will remain strong for its rating category within the next 12 to 18 months, Moody's expects that free cash flow will be negative considering the company's substantial capital spending requirements and cost pressures. Allied Nevada has forecasted capital expenditures of approximately $1.2 billion over the next five years to expand Hycroft, including increasing the mine's output, expanding leaching operations and constructing a mill. Furthermore, cost inflation of key inputs such as energy, materials and labor costs, as well as potentially higher local and/or state government taxation could constrain cash flow generation. The Speculative Grade Liquidity rating of SGL-3 reflects Moody's view that Allied Nevada will maintain adequate liquidity in the next four quarters. Although Moody's expects that near-term free cash flow will be negative due to high levels of capital expenditures, Moody's also anticipates that following the proposed transaction, pro forma cash balances will sufficiently supplement working capital and CAPEX requirements. External liquidity sources consist of a modest $30 million senior secured revolving credit facility that expires on May 2014. The revolver is secured by substantially all of the company's assets. Since the company is expected to generate positive quarterly operating cash flow and maintain sufficient cash balances, Moody's believes that the revolver will remain undrawn over the next four quarters. The company is required to satisfy financial maintenance covenants (recently amended) under the credit facility, including a maximum leverage ratio (net debt-to-EBITDA) of 3.0 times, minimum interest coverage ratio of 3.0 times and minimum tangible net worth equal to the sum of $392 million and 25% of positive net income. Moody's anticipates that cushions, specifically under the interest coverage covenant, will tighten for several quarters following the transaction, but should eventually increase to sufficient levels as the company generates earnings from higher gold and silver production. In addition, since Hycroft constitutes substantially all of the company's tangible assets, Moody's believes that these assets do not represent a significant source of alternate liquidity. The B3 rating on Allied Nevada's senior unsecured notes reflects their position in the capital structure and the absence of material levels of secured debt, as the secured revolver is currently of modest size. As a consequence, the rating for the notes is at the same level as the corporate family rating. Moody's notes that a material increase in the size of the committed credit facility, among other factors, could have a negative impact on the unsecured rating. The stable outlook reflects Moody's view that the price environment for gold will remain favorable in the intermediate term and should drive strong margins and positive operating cash flow for Allied Nevada. The outlook also reflects Moody's expectation that Hycroft will remain to be the company's single operating mine over the next several years, and account for all of the company's revenue, earnings and cash flow. Furthermore, given the company's substantial CAPEX requirements, Moody's expects that free cash flow will continue to be negative during the foreseeable time horizon. Given Allied Nevada's product and geographic concentration, dependence of its performance on a single mine, exposure to volatile gold prices, inflationary pressures on operating and development costs and substantial planned capital expenditures resulting in negative free cash flow, an upward movement in the rating is unlikely at this point. An upgrade or positive outlook could be considered should the company successfully execute the expansion of Hycroft, diversify its operations away from a single mine and geography, and consistently generate positive free cash flow. Ratings could be downgraded if prices of gold and silver decline sharply, if operations at Hycroft become challenged, and if input costs escalate such that profit margins, debt protection metrics and the company's liquidity position deteriorate significantly. Quantitatively, metrics could be lowered if debt-to-EBITDA exceeds 4.5 times, EBIT-to-interest fell below 2.5 times and cash from operations less dividends-to-debt were sustained below 10%. The principal methodology used in rating Allied Nevada was the Global Mining Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Allied Nevada Gold Corp. is a gold producer which operates the Hycroft Mine in Nevada as its single operating mine. Hycroft is currently an open pit, run-of-mine and crushed ore heap leach gold mine that concurrently produces silver as a byproduct. In the last 12 months ending March 31, 2012, the company sold approximately 87,200 ounces of gold and 441,000 ounces of silver. Allied Nevada is implementing an expansion of Hycroft's mining and processing facilities, with a target of increasing annual production to 616,800 ounces of gold and 25.9 million ounces of silver from 2015 to 2024. The company also owns six exploration properties in Nevada, including Hasbrouk, Mountain View, Three Springs, Wildcat, Pony Creek/Elliot Dome and Maverick Springs, a 45% joint venture with Silver Standard Resources Inc. Revenues for the last 12 months ending March 31, 2012 were approximately $159.3 million. AMBAC ASSURANCE: AAC Receiver to Purchase $939MM in Surplus Notes ----------------------------------------------------------------- Ambac Assurance Corporation has received approval from its regulator, the Wisconsin Office of the Commissioner of Insurance, and the Commissioner in his capacity as the Rehabilitator of the Segregated Account of Ambac Assurance Corporation to exercise call options to purchase approximately $939 million in aggregate par amount of surplus notes issued by Ambac Assurance on June 7, 2010, for an aggregate cash payment of approximately $278 million. As previously announced on May 10, 2012, Ambac Assurance's board of directors approved the exercise of such surplus note call options. The approvals of OCI and the Rehabilitator are conditioned upon receipt of approval of the Circuit Court of the State of Wisconsin in Dane County. The Rehabilitator has submitted a motion to the Rehabilitation Court seeking such approval. The Rehabilitator also announced that he is seeking approval from the Rehabilitation Court to make partial interim policy claim payments to Segregated Account policyholders. If the interim payments are approved by the Rehabilitation Court, the Segregated Account will, upon the direction of the Rehabilitator, begin paying 25% of each permitted policy claim that has arisen since the commencement of the rehabilitation proceedings for the Segregated Account, and 25% of each policy claim submitted and permitted in the future. Ambac Assurance expects to begin making such payments no sooner than the third quarter 2012. As of March 31, 2012, approximately $3.2 billion in Segregated Account policy claims were outstanding. Although the Plan of Rehabilitation, confirmed by the Rehabilitation Court in January 2011, also contemplated payment of 25% of each policy claim in cash and 75% in surplus notes, such Plan has not yet been put into effect. No decision has been announced with respect to effectuating or amending such Plan or whether surplus notes will be issued with respect to the remaining balance of unpaid claims. The Rehabilitator has previously announced that more specific information regarding the status of the Plan, including possible modifications, will be provided as soon as appropriate. Lastly, the Rehabilitator is also seeking Rehabilitation Court approval of a settlement on terms set forth in an offer made to the United States on behalf of the Internal Revenue Service with respect to pending disputes over the tax treatment of credit default swap contracts and related matters. The Offer was jointly made by the Rehabilitator, OCI, Ambac Assurance, Ambac Financial Group, Inc. and the Official Committee of Unsecured Creditors of Ambac on Feb. 24, 2012. The settlement contemplated by the Offer will resolve all related litigation with the IRS, eliminating uncertainty on several tax issues important to the rehabilitation, and allow Ambac to satisfy one of the conditions required for the consummation of Ambac's Fifth Amended Plan of Reorganization. A hearing in the Rehabilitation Court relating to the motions described herein (other than the last motion relating to the IRS settlement) is scheduled for June 4, 2012. A hearing in the Rehabilitation Court relating to the motion concerning the IRS settlement is scheduled for June 13, 2012. The motions filed with the Rehabilitation Court and supporting affidavits and exhibits have been made available by the Rehabilitator. 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: AAC Barred From Paying Interest on Surplus Notes ----------------------------------------------------------------- Ambac Assurance Corporation disclosed that the Commissioner of Insurance of the State of Wisconsin has disapproved the requests of Ambac Assurance and the Special Deputy Commissioner of the Segregated Account of Ambac Assurance, acting on behalf of the Rehabilitator of the Segregated Account, to pay accrued interest on all outstanding Surplus Notes issued by Ambac Assurance and the Segregated Account on the scheduled interest payment date of June 7, 2012. 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:: AAC Receiver Seeks to Begin Paying Policyholders ------------------------------------------------------------------ Stephanie Gleason at Dow Jones' Daily Bankruptcy Review reports that the Wisconsin state official who's overseeing the receivership of Ambac Assurance Corp., the one-time issuer of municipal bonds, said Wednesday he's asking for court permission to pay policyholders 25% in cash on claims from the segregated Ambac account. 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). AMERICAN AIRLINES: Reports April 2012 Traffic Results ----------------------------------------------------- AMR Corporation, the parent company of American Airlines Inc., reported April 2012 consolidated revenue and traffic results for its principal subsidiary, American Airlines, Inc. and its wholly owned subsidiary, AMR Eagle Holding Corporation. April's consolidated passenger revenue per available seat mile (PRASM) increased an estimated 11.6 percent compared to the prior year period, driven by high load factors and a strong yield environment. The Company reported an April consolidated load factor of 82.9 percent, an increase of 2.5 points versus the same period last year. Consolidated traffic and capacity were lower by 0.2 percent and 3.2 percent year-over-year, respectively. International traffic increased 1.8 percent relative to last year, on 2.8 percent lower capacity, resulting in an international load factor of 81.7 percent, an increase of 3.7 points versus April of last year. Domestic load factor was 84.8 percent, an increase of 1.6 points year-over-year. Domestic capacity and traffic were 4.1 percent and 2.2 percent lower year-over-year, respectively. A full-text copy of the April 2012 traffic result is accessible for free at http://is.gd/UJ68Pt About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. The Company's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN APPAREL: Incurs $7.8 Million Net Loss in 1st Quarter ------------------------------------------------------------- American Apparel, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $7.89 million on $132.66 million of net sales for the three months ended March 31, 2012, compared with a net loss of $20.74 million on $116.06 million of net sales for the same period a year ago. The Company reported a net loss of $39.31 million in 2011 and a net loss of $86.31 million in 2010. The Company's balance sheet at March 31, 2012, showed $331.38 million in total assets, $288.97 million in total liabilities and $42.41 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/hB75eU About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. AMERICAN CAMPUS: Moody's Lifts Rating on $27.67MM Bonds From Ba1 ---------------------------------------------------------------- Moody's Investors Service has upgraded the underlying rating on approximately $27.67 million of outstanding American Campus Properties Student Housing Financing, Ltd.'s Taxable Insured Bonds (University Village Apartments at Prairie View A&M University, TX) Series 1999 to Baa3 from Ba1. The outlook on the rating has been revised to stable from positive. The bonds are insured by National Public Finance Guarantee Corp.and carry an insured rating of Baa2 with a negative outlook based on the rating of the insurer. Rating Rationale The rating action is based on the project's history of strong financial performance, healthy occupancy levels, and presence of well-funded reserves. The stable outlook reflects Moody's expectation that the project will continue to exhibit solid performance consistent with the assigned rating. The bonds are limited obligation of the issuer, American Campus Student Housing Financing, Ltd., payable solely from project revenues and Trustee-held funds, further secured by a lease-hold mortgage on land, improvements, and equipment therein. The bond insurance and debt service reserve surety policies for the bonds are provided by National Public Finance Guarantee Corp. (rated Baa2 negative), which insures timely payment of principal and interest on the bonds. Strengths: -- Strong debt service coverage of 1.49x in 2011, an increase over prior year's coverage of 1.39x. -- High average occupancy of 98% in 2011 -- Presence of fully funded reserves -- Manager has a successful track record and experience with privatized student housing projects -- Gross revenue pledge with bond principal and interest covered before operating expenses Challenges: -- Absence of long-term legal commitment from the University -- Stand-alone project financing, in which surplus cash flow is released each year, rather than being retained in Trustee-held funds for future benefit of the Project Outlook The outlook on the rating is stable based on Moody's expectation that the Project will continue to exhibit strong performance consistent with assigned rating. This will depend, in part, on the Project's ability to achieve competitive rent increases while maintaining strong occupancy rates. WHAT COULD MAKE THE RATING GO UP?: -- Sustained increase in physical occupancy levels -- Increase in debt service coverage levels driven by strong rent increases and improving operating ratios WHAT COULD MAKE THE RATING GO DOWN?: -- Decrease in occupancy levels -- Decrease in debt service coverage below underwritten levels -- A significant decline in headcount enrollment at the University -- An instance of tapping of debt service reserve funds in order to make full debt service payment The principal methodology used in this rating was Global Housing Projects published in July 2010. AMERICAN CAMPUS: Moody's Lifts Rating on $19.55MM Bonds From Ba1 ---------------------------------------------------------------- Moody's Investors Service has upgraded the underlying rating on approximately $19.55 million of outstanding American Campus Properties Student Housing Financing, Ltd. Taxable Insured Bonds (University College Apartments at Prairie View A&M University, TX) Series 2001 & Series 2003 to Baa3 from Ba1. The outlook on the bonds has been changed to stable from positive. The bonds are insured by National Public Finance Guarantee Corp.and carry an insured rating of Baa2 with a negative outlook based on the rating of the insurer. Rating Rationale The rating action is supported by the project's history of strong financial performance, healthy occupancy levels, and presence of well-funded reserves. The stable outlook reflects Moody's expectation that the project will continue to exhibit solid performance consistent with the assigned rating. The bonds are limited obligation of the issuer, American Campus Student Housing Financing, Ltd., payable solely from project revenues and Trustee-held funds, further secured by a lease-hold mortgage on land, improvements, and equipment therein. The bond insurance and debt service reserve surety policies for the bonds are provided by National Public Finance Guarantee Corp. (rated Baa2 negative), which insures timely payment of principal and interest on the bonds. Strengths: -- Strong debt service coverage of 1.53x in 2011 -- Satisfactory average occupancy of 96.6% in 2011 -- Presence of fully funded reserves -- Benefits from University's freshmen housing requirement -- Experienced management with successful track record -- Gross revenue pledge with bond fund being funded before operating expenses Challenges: -- Moderately declining freshmen enrollment in 2011 -- Absence of long-term legal commitment from the University -- Stand-alone project financing, in which surplus cash flow is released each year, rather than being retained in Trustee-held funds for future benefit of the Project Outlook The outlook on the rating is stable based on Moody's expectation that the Project will continue to exhibit satisfactory performance consistent with the assigned rating. This will depend, in part, on the Project's ability to achieve competitive rent increases while maintaining strong occupancy rates. WHAT COULD MAKE THE RATING GO UP?: -- Sustained high occupancy levels -- Increase in debt service coverage levels driven by improving operating ratio WHAT COULD MAKE THE RATING GO DOWN?: -- Decrease in occupancy levels -- Decrease in debt service coverage below underwritten levels -- A significant decline in freshmen enrollment at the University -- An instance of tapping of debt service reserve funds in order to make full debt service payment The principal methodology used in this rating was Global Housing Projects published in July 2010. AMERICAN FINANCIAL: Moody's Rates Preferred Securities '(P)Ba1' --------------------------------------------------------------- Moody's Investors Service has assigned provisional ratings to American Financial Group, Inc.'s multi-seniority, multi-issuer shelf registration statement (senior unsecured debt at (P)Baa2) filed by the company on March 2, 2012. The new shelf rating replaces AFG's previous shelf registration which expired on March 2, 2012. AFG maintains its shelf registration statement for general corporate purposes, which may include investment in the insurance businesses, or the repayment of outstanding debt. The outlook for the provisional ratings is positive. Ratings Rationale According to Moody's, AFG's ratings reflect the group's solid franchise as a diversified insurance operation, its strong profitability reflecting a disciplined underwriting approach, low exposure to catastrophe volatility, and demonstrated expertise within its chosen specialty P&C and tax deferred annuity niches. The company has also maintained a conservative adjusted financial leverage profile. These strengths are offset by relatively high operating leverage, exposure to adverse reserve development in its casualty portfolio (including its expanding international operations), and meaningful exposure to residential and commercial mortgage-backed securities. The positive outlook on the ratings reflects the company's strong prospective profitability as a result of leading market positions in various core commercial specialty and tax deferred annuity segments, moderate limits profile and limited catastrophe risk, good risk-adjusted capital position, and its moderate financial leverage. Moody's noted that the following factors could lead to an upgrade: 1) lower P&C statutory gross underwriting leverage (i.e., consistently below 4.5x); 2) pre-tax interest coverage levels consistently above 7x; 3) continued improvements in risk-adjusted capital; 4) adjusted financial leverage consistently in the low to mid 20% range; 5) further improvement in board director independence. Conversely, although a rating downgrade is unlikely given the positive outlook, factors that could lead to a stable outlook include: 1) gross underwriting leverage above 5x; 2) adverse reserve development in excess of 2.5% of reserves;3) maintaining financial leverage in the mid to high 20% range; 4) pretax interest coverage levels below 5x. The following provisional ratings have been assigned with a positive outlook: American Financial Group, Inc. -- provisional senior unsecured debt rating at (P)Baa2; provisional junior subordinated debt at (P)Baa3; provisional subordinated debt at (P)Baa3; provisional preferred securities at (P)Ba1; provisional non-cumulative preferred securities at (P)Ba1. American Financial Capital Trust II, III and IV -- provisional preferred securities at (P)Baa3. American Financial Group, Inc. is an Ohio-based holding company that, through its operating subsidiaries, provides specialty commercial property and casualty ("P&C") insurance, as well as tax-deferred annuities and supplemental ("A&S") insurance. For 1Q2012, AFG reported total revenue of $1.1 billion and net income of $113 million. Shareholders' equity at March 31, 2012 was $4.7 billion. The principal methodologies used in this rating was Moody's Global Rating Methodology for Property and Casualty Insurers published in May 2010 and Moody's Global Rating Methodology for Life Insurers published in May 2010. AMSCAN HOLDINGS: Swings to $2.1-Mil. Net Income in First Quarter ---------------------------------------------------------------- Amscan Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $2.08 million on $383.07 million of total revenues for the three months ended March 31, 2012, compared with a net loss of $2.49 million on $356.18 million of total revenues for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $1.73 billion in total assets, $1.36 billion in total liabilities, $52.45 million in redeemable common securities, and $316.16 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/HuGXqS About Amscan Holdings Based in Road Elmsford, New York, Amscan Holdings, Inc., designs, manufactures, contracts for manufacture, and distributes party goods, including paper and plastic tableware, metallic balloons, accessories, novelties, gifts and stationery. The Company also operates retail party goods and social expressions supply stores in the United States under the names Party City, Party America, The Paper Factory, Halloween USA and Factory Card & Party Outlet, and franchises both individual stores and franchise areas throughout the United States and Puerto Rico principally under the names Party City and Party America. The Company is a wholly owned subsidiary of AAH Holdings Corporation. * * * Amscan Holdings carries Moody's Investors Service's 'B2' Corporate Family and Probability of Default Ratings. In the April 19, 2012, edition of the TCR, Standard & Poor's Ratings Services raised its corporate credit rating on Elmsford, N.Y.-based Amscan Holdings Inc. to 'B+' from 'B'. "The upgrade reflects our belief that Amscan's credit measures have improved and will remain indicative of those for an 'aggressive' financial risk profile. We anticipate that credit measures will improve modestly through fiscal year-end 2012, through acquisition-related synergies and EBITDA expansion during the next year," said Standard & Poor's credit analyst Stephanie Harter. APPLETON PAPERS: Moody's Reviews 'B2' CFR/PDR for Upgrade --------------------------------------------------------- Moody's Investors Service places Appleton Papers Inc.'s B2 Corporate Family Rating (CFR), B2 Probability of Default Rating (PDR), B1 senior secured, B3 senior second lien and Caa1 senior subordinate ratings under review for upgrade following the announcement that the company has signed a definitive agreement to engage in a business combination with Hicks Acquisition Company II Inc (Hicks - a special purpose acquisition company). The total transaction value is $675 million and the combined company will be listed on the Nasdaq exchange. Closing of the transaction is expected in July 2012 and is subject to the approval of Hick's shareholders and other customary closing conditions. Ratings Rationale Moody's current ratings on Appleton are: Long Term Corporate Family Ratings (domestic currency) Rating of B2 on watch for upgrade. Probability of Default Rating of B2 on watch for upgrade. Speculative Grade Liquidity Rating of SGL-3 Senior Secured Rating of B1 (LGD3 36%) on watch for upgrade. Senior Secured 2nd Lien Rating of B3 (LGD5 73%) on watch for upgrade. Senior Subordinate Rating of Caa1 (LGD6 93%) on watch for upgrade. The review for upgrade will focus on the positive impact of the elimination of payments under the privately held employee stock ownership plan (ESOP) structure and the improved liquidity and potential debt repayment from the proceeds of the transaction. The principal methodology used in rating Appleton was the Global Paper and Forest Products Industry Methodology published in September 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. Appleton headquartered in Appleton, Wisconsin, develops and manufactures specialty coated paper products, including carbonless and security papers (52% of revenues), thermal papers (41%), as well as a microencapsulating business (7% ). Appleton has four manufacturing sites, two of which are located in Wisconsin, one in Pennsylvania and one in Ohio. In 2001, the company was acquired by its employees through an employee stock ownership plan (ESOP). LTM sales ending December 31, 2011 were $857 million. ARCAPITA BANK: Schedules Filing Deadline Extended to June 8 ----------------------------------------------------------- The Bankruptcy Court extended through June 8, 2012, the deadline for Arcapita Bank B.S.C.(c), et al., and its affiliated debtors to file their schedules of assets and liabilities, statements of financial affairs, and Rule 2015.3 Reports. The ruling is without prejudice to the Debtors' rights to request further extensions or to file a motion seeking a modification or waiver of the documents for cause. About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., later filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group has roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. ARCTIC GLACIER: Ch. 15 Case Recognized in U.S. Bankruptcy Court --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware Arctic recognized Glacier International Inc., et al.'s Chapter 15 petition as foreign main proceeding commenced under Canada's Companies Creditors Arrangement Act, as amended, and pending before the Court of Queen's Bench Winnipag Centre. Philip J. Reynolds of Alvarez & Marsal Canada Inc., serves as monitor and foreign representative for the Debtors. About Arctic Glacier Winnipeg, Canada-based Arctic Glacier Inc., et al., manufacture packaged ice for distribution in Canada and the United States. Philip J. Reynolds of Alvarez & Marsal Canada Inc., as monitor and foreign representative, filed Chapter 15 petitions for Arctic Glacier, et al. (Bankr. D. Del. Lead Case No. 12-10603) on Feb. 22, 2012. Bankruptcy Judge Kevin Gross presides over the case. Mr. Reynolds is represented by Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP. The Debtors is estimated to have assets and debts at $100 million to $500 million. AUSTRALIAN EQUITY: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Australian Equity Investors 2455 E. Speedway #101 Tucson, AZ 85719 Bankruptcy Case No.: 12-10590 Chapter 11 Petition Date: May 14, 2012 Court: United States Bankruptcy Court District of Arizona (Tucson) Judge: Eileen W. Hollowell Debtor's Counsel: Scott D. Gibson, Esq, THOMPSON KRONE GIBSON 6303 E. Tanque Verde Road, Suite 210 Tucson, AZ 85715 Tel: (520) 884-9694 Fax: (520) 323-4613 E-mail: sdgecf@lawtkg.com Estimated Assets: $1,000,001 to $100,000,000 Estimated Debts: $1,000,001 to $100,000,000 A copy of the Company's list of its 12 largest unsecured creditors is available for free at http://bankrupt.com/misc/azb12-10590.pdf The petition was signed by Gregory Moore, president of Gregory Moore Real Estate Company, Inc., general partner. AXION INTERNATIONAL: Delays Q1 Form 10-Q; To Restate 2011 Reports ----------------------------------------------------------------- Axion International Holdings, Inc., determined that it will need to restate its previously issued financial statements for the interim period ended Sept. 30, 2011, and for the fiscal year ended Dec. 31, 2011. The restatement process has resulted in delays in obtaining and compiling the financial data necessary to complete the restatement and prepare the Company's financial statements for the period ended March 31, 2012. As a result, the Company has been unable to complete the preparation and review of its Quarterly Report on Form 10-Q for the period ended March 31, 2012, in time to file it by the prescribed deadline without unreasonable effort and expense. However, the Company expects to file that Form 10-Q within the five-day extension provided by Rule 12b-25. Donald W. Fallon, Axion's chief financial officer, in consultation with the Company's board of directors, concluded that reliance should no longer be afforded to the Company's financial statements for the interim period ended Sept. 30, 2011, and for the fiscal year ended Dec. 31, 2011. It came to Mr. Fallon's attention that the Company failed to properly record a derivative liability related to the potential issuance of approximately 3.8 million warrants exercisable at a price of $1.00 per share. These warrants were to be issued to the holders of the Company's 10% convertible preferred stock if the Company failed to achieve at least $10,000,000 in sales revenue for 2011. In addition, the Dec. 31, 2011, financial statements failed to reflect the financial impact of the adjustment from $1.25 to $1.00 of the conversion price under the Company's outstanding 10% convertible preferred stock again as a result of the failure to achieve 2011 sales revenue of at least $10,000,000. The Company, through Mr. Fallon, discussed these issues with RBSM, LLP, the Company's independent accountant for all quarterly reporting periods in Dec. 31, 2011, and for the fiscal year then ended. About Axion International New Providence, N.J.-based Axion International Holdings, Inc. (OTC BB: AXIH) - http://www.axionintl.com/-- is the exclusive licensee of patented and patent-pending technologies developed for the production of structural plastic products such as railroad crossties, pilings, I-beams, T-Beams, and various size boards including a tongue and groove design that are utilized in multiple engineered design solutions such as rail track, rail and tank bridges (heavy load), pedestrian/park and recreation bridges, marinas, boardwalks and bulk heading to name a few. RBSM LLP, in New York, the auditor, issued a going concern qualification each in the Company's financial statements for the years ended Dec. 31, 2010 and 2011. RBSM LLP noted that the Company has incurred significant operating losses in current year and also in the past. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern, it said. Axion International reported a net loss of $8.06 million on $3.88 million of revenue for the 12 months ended Dec. 31, 2011, compared with a net loss of $7.10 million on $1.56 million of revenue for the 12 months ended Sept. 30, 2010. The Company's balance sheet at Dec. 31, 2011, showed $5.54 million in total assets, $2.86 million in total liabilities, $6.80 million in 10% convertible preferred stock, $242,500 in redeemable common stock, and a $4.36 million total stockholders' deficit. BANKATLANTIC BANCORP: Incurs $14.2 Million Net Loss in Q1 --------------------------------------------------------- BankAtlantic Bancorp, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $14.21 million on $8.33 million of total interest income for the three months ended March 31, 2012, compared with a net loss of $22.88 million on $11.83 million of total interest income for the same period during the prior year. BankAtlantic's balance sheet at March 31, 2012, showed $3.84 billion in total assets, $3.87 billion in total liabilities and a $31.56 million total deficit. A copy of the Form 10-Q is available for free at: http://is.gd/Hi4YQL About BankAtlantic Bancorp BankAtlantic Bancorp (NYSE: BBX) -- http://www.BankAtlanticBancorp.com/-- is a bank holding company and the parent company of BankAtlantic. BankAtlantic -- "Florida's Most Convenient Bank" with a Web presence at http://www.BankAtlantic.com/-- has nearly $6.0 billion in assets and more than 100 stores, and is one of the largest financial institutions headquartered junior in Florida. BankAtlantic has been serving communities throughout Florida since 1952 and currently operates more than 250 conveniently located ATMs. BankAtlantic reported a net loss of $28.74 million in 2011, a net loss of $143.25 million in 2010, and a net loss of $185.82 million in 2009. * * * As reported by the TCR on March 1, 2011, Fitch has affirmed its current Issuer Default Ratings for BankAtlantic Bancorp and its main subsidiary, BankAtlantic FSB at 'CC'/'C' following the announcement regarding the regulatory order with the Office of Thrift Supervision. BankAtlantic has announced that it has entered into a Cease and Desist Order with the OTS at both the bank and holding company level. The regulatory order includes increased regulatory capital requirements, limits to the size of the balance sheet, no new commercial real estate lending and improvements to its credit risk and administration areas. Further, the holding company must also submit a capital plan to maintain and enhance its capital position. BEHRINGER HARVARD: Incurs $2.5 Million in First Quarter ------------------------------------------------------- Behringer Harvard Short-Term Opportunity Fund I LP filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $2.54 million on $5.01 million of total revenues for the three months ended March 31, 2012, compared with a net loss of $5.25 million on $5.18 million of total revenues for the same period during the prior year. Behringer reported a net loss of $50.15 million in 2011, a net loss of $18.71 million in 2010, and a net loss of $15.47 million in 2009. The Company's balance sheet at March 31, 2012, showed $112.45 million in total assets, $135.77 million in total liabilities and a $23.32 million total deficit. Bankruptcy Warning Of Behringer's $122.8 million in notes payable at March 31, 2012, $51.3 million has matured and is subsequently in default and an additional $50.8 million is scheduled to mature in the next twelve months. As of March 31, 2012, of the Company's $122.8 million in notes payable, $110.4 million was secured by properties and $99.9 million was recourse to the Company. The Company continues to have negotiations and discussions with lenders to modify or restructure loans, outcomes of which may include a sale to a third party or returning the property to the lender. The Company may also consider putting certain of its subsidiaries into bankruptcy in order to protect the Company's interest in the property. A copy of the Form 10-Q is available for free at: http://is.gd/tABBbP About Behringer Harvard Addison, Tex.-based Behringer Harvard is a limited partnership formed in Texas on July 30, 2002. The Company's general partners are Behringer Harvard Advisors II LP and Robert M. Behringer. As of Sept. 30, 2011, seven of the twelve properties the Company acquired remain in the Company's portfolio. The Company's Agreement of Limited Partnership, as amended, provides that the Company will continue in existence until the earlier of Dec. 31, 2017, or termination of the Partnership pursuant to the dissolution and termination provisions of the Partnership Agreement. For the year ended Dec. 31 2011, Deloitte & Touche LLP, in Dallas, Texas, noted that the uncertainty surrounding the ultimate outcome of settling unpaid debt and its effect on the Partnership, as well as the Partnership's operating losses at its subsidiaries, raise substantial doubt about its ability to continue as a going concern. The Partnership is facing a significant amount of debt maturities in the near future and debt which has matured but remains unpaid, which is recourse to the Partnership. BETSEY JOHNSON: Has Access to Funding Through May 30 ---------------------------------------------------- Betsey Johnson LLC secured continued access to financing as it winds down the business after failing to obtain going concern bids. Judge James M. Peck issued a second interim order permitting the fashion retailer to borrow under a $2.50 million credit facility arranged by First Niagara Commercial Finance, Inc. First Niagara is a prepetition lender owed not less than $2.11 million in first lien debt. The Debtor-in-Possession Revolving Credit Facility provides that at no time will the sum of the Pre-Petition Obligations and the aggregate amount outstanding under the DIP Credit Facility exceed $3.50 million. The Court also gave the Debtor continued access to cash collateral securing prepetition obligations to Steven Madden, Ltd., the Debtor's subordinated lender. Madden is owed not less than $3.40 million as of the bankruptcy filing date. The DIP loan matures on the earliest to occur of (i) May 31, 2012, (ii) the date Borrower terminates the Line of Credit in accordance with the Loan Agreement, as amended, (iii) the date the Lender terminates the Line of Credit following an Event of Default in accordance with the terms of the Loan Agreement, or (iv) emergence from Chapter 11. Betsey Johnson filed for bankruptcy with the plan to effectuate an all-asset sale, either as a going concern or through an orderly wind-down process using a nationally recognized liquidator. At a May 8 auction, no going concern buyer stepped forward prompting the Debtor to hand the keys to Gordon Brothers Group Inc. and Hilco Merchant Resources, which offered the top bid for the right to run the chain's going-out-of-business sales. The Company is set to close its 69 stores. According to The Wall Street Journal, the bid will bring the chain about $5.2 million immediately, and more money could trickle in to pay off the Company's debts if the liquidation effort brings in more money than expected. The Company owes at least $6.8 million to creditors. WSJ says it isn't clear whether a handful of stores will outlast the liquidation. Madden, 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. The Second Interim Order provides pursuant to sections 363(b)(1) and 364(c)(2) of the Bankruptcy Code, any provisions in any of the leases that require the consent or approval of one or more of the Debtor's landlords in order for the Debtor to pledge the proceeds from the disposition of leases are and will be deemed to be inconsistent with the provisions of the Bankruptcy Code, and are and will have no force and effect with respect to the transactions granting the Lender an interest in such proceeds. The Court will hold a final hearing on the financing on May 30, 2012 at 10:00 a.m. 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. BETSEY JOHNSON: Has 7-Member Creditors' Panel --------------------------------------------- Tracy Hope Davis, the United States Trustee for Region 2, earlier this month named an Official Committee of Unsecured Creditors in Betsey Johnson LLC's Chapter 11 case. The Committee members are: 1. MCM Enterprise 148 39th Street, 3rd Floor Brooklyn, NY 11232 Phone: (718) 438-8443 Fax: (718) 438-8804 Attn: George T. Lau, Owner 2. CIT Group Commercial Services, Inc. 201 South Tryon Street, 3rd Floor Charlotte, NC 28202 Phone: (704) 339-2903 Fax: (704) 339-2237 Attn: Robert W. Franklin, Director and Regional Chief Counsel 3. Chinamine Trading Ltd. 214 West 39th Street, Room 304 New York, NY 10018 Phone: (212) 575-1525 Fax: (212) 575-0003 Attn: Carri Barnett, Vice President 4. American Express 200 Vesey Street New York, NY 10285 Phone: (212) 640-1086 Attn: Craig McDowell, Senior Manager - GMS Risk 5. Intertex U.S.A. Inc. d/b/a BC America 131 West Street, 10th Floor New York, NY Phone: (212) 279-3601 Attn: Yong C. Lee, President 6. Simon Property Group, Inc. 225 West Washington Street Indianapolis, IN 46204 Phone: (317) 263-2346 Fax: (317) 263-7901 Attn: Ronald M. Tucker, Vice President/ Bankruptcy Counsel 7. GGP Limited Partnership 110 North Wacker Drive (BSC 1-26) Chicago, IL 60606 Phone: (312) 960-2707 Fax: (312) 442-6374 Attn: Julie Minnick Bowden, National Bankruptcy Manager 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. BETSEY JOHNSON: Starts GOB Sale; Gordon And Hilco Run Sale ---------------------------------------------------------- Reuters reports that Betsey Johnson LLC has commenced a going-out- of-business sale at its stores and outlets. According to the report, Gordon Brothers Group and Hilco Merchant Resources are jointly running the sale on Betsey Johnson's behalf. All store fixtures such as apparel racks, shelving and lighting are also available for sale, said the company, whose licenses are owned by Steven Madden. 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. BIOFUELS POWER: Delays Form 10-Q for First Quarter -------------------------------------------------- Biofuels Power Corp.'s financial statements for the quarter ended March 31, 2012, are not yet ready for distribution as a result of recent measures the Company has taken with regard to efforts to sign operating agreements which will effect subsequent events to the balance sheet date. Biofuels Power Humble, Tex.-based Biofuels Power Corporation is a distributed energy company that is pioneering the use of biodiesel to fuel small electric generating facilities that are located in close proximity to end-users. BPC's first power plant is currently located near Houston, Texas in the city of Oak Ridge North. The Company reported a net loss of $1.28 million on $0 of sales in 2011, compared with a net loss of $2.05 million on $0 of sales in 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.89 million in total assets, $6.44 million in total liabilities and a $4.54 million total stockholders' deficit. Following the 2011 results, Clay Thomas, P.C., in Houston, Texas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered significant losses and will require additional capital to develop its business until the Company either (1) achieves a level of revenues adequate to generate sufficient cash flows from operations; or (2) obtains additional financing necessary to support its working capital requirements. BIOLIFE SOLUTIONS: Incurs $297,000 Net Loss in First Quarter ------------------------------------------------------------ Biolife Solutions, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $296,877 on $835,880 of total revenue for the three months ended March 31, 2012, compared with a net loss of $630,122 on $610,799 of total revenue for the same period during the prior year. The Company reported a net loss of $1.95 million in 2011, compared with a net loss of $1.98 million in 2010. The Company's balance sheet at March 31, 2012, showed $1.86 million in total assets, $13.29 million in total liabilities and a $11.43 million in total shareholders' deficiency. Following the 2011 results, Peterson Sullivan LLP, in Seattle, Washington, expressed substantial doubt about BioLife Solutions' ability to continue as a going concern. The independent auditors noted that the Company has been unable to generate sufficient income from operations in order to meet its operating needs and has an accumulated deficit of $54 million at Dec. 31, 2011. A copy of the Form 10-Q is available for free at: http://is.gd/zxOh4Y About BioLife Solutions Bothell, Washington-based BioLife Solutions, Inc. develops and markets patented hypothermic storage and cryopreservation solutions for cells, tissues, and organs, and provides contracted research and development and consulting services related to optimization of biopreservation processes and protocols. BISON BUILDING: Preferential Suit Against Tomball Forest Goes On ---------------------------------------------------------------- Tomball Forest, Ltd., failed to convince a bankruptcy judge to stop the lawsuit by a post-confirmation committee in Bison Building Holdings Inc.' Chapter 11 case, which seeks to recoup $63,000 in payments received from Bison in 2009. The Committee alleges the funds are preferential transfers. Bankruptcy Judge Marvin Isgur, siding with the Committee, denied Tomball Forest's motion for summary judgment, ruling that Tomball Forest did not meet its burden of establishing that the transfer was intended to be a contemporaneous exchange. The Committee said summary judgment is premature. The case is POST-CONFIRMATION COMMITTEE, Plaintiff(s), v. TOMBALL FOREST, LTD. Defendant(s), Adv. Proc. No. 11-3339 (Bankr. S.D. Tex.). A copy of Judge Isgur's May 14, 2012 Memorandum Opinion is available at http://is.gd/yOFPKYfrom Leagle.com. About Bison Building Materials Houston, Texas-based Bison Building Materials LLC -- http://www.bisonbuilding.com/-- began in 1962 as Roy W. Bierschwale's small retail store and lumber shed. Over the past four decades, Bison Building has grown into Texas' single largest independent supplier of lumber, full service millwork and other added value products. Bison and its affiliates filed for Chapter 11 on June 28, 2009 (Bankr. S.D. Tex. Case No. 09-34452). The debtor-affiliates are Bison Building Holdings, Inc.; Bison Multi-Family Sales, LLC; Bison Construction Services, LLC; Bison Building Materials Nevada, LLC; Bison Building GP, Inc.; HLBM Company; and Milltech, Inc. David Ronald Jones, Esq., at Porter & Hedges, L.L.P., represented the Debtors. At the time of the filing, the Company said it had assets and debts of $50 million to $100 million. Bison's chapter 11 plan was confirmed on June 29, 2010. The Plan established a Post-Confirmation Committee, which was granted the exclusive right to pursue avoidance actions. BLUEGREEN CORP: Reports $5.6 Million Net Income in First Quarter ---------------------------------------------------------------- Bluegreen Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income attributable to the Company of $5.65 million on $97.17 million of revenue for the three months ended March 31, 2012, compared with net income attributable to the Company of $2.53 million on $89.77 million of revenue for the same period a year ago. The Company reported a net loss of $17.25 million in 2011, compared with a net loss attributable of $43.96 million in 2010. The Company's balance sheet at March 31, 2012, showed $1.06 billion in total assets, $757.74 million in total liabilities and $309.80 million in total stockholders' equity. John M. Maloney Jr., president and chief executive officer of Bluegreen, commented, "We are very pleased with our performance during the first quarter of 2012. We experienced strong growth in system-wide sales and our fee-based service business. We also generated positive free cash flow and reduced outstanding debt." A copy of the Form 10-Q is available for free at: http://is.gd/Eg9uoT About Bluegreen Corp. Bluegreen Corporation -- http://www.bluegreencorp.com/-- provides places to live and play through its resorts and residential community businesses. In December 2010, Standard & Poor's Rating Services raised its corporate credit rating on Bluegreen Corp to 'B-' from 'CCC'. BROADCAST INT'L: Incurs $185,000 Net Loss in First Quarter ---------------------------------------------------------- Broadcast International, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $185,447 on $1.74 million of net sales for the three months ended March 31, 2012, compared with a net loss of $746,965 on $1.68 million of net sales for the same period during the prior year. The Company reported net income of $1.30 million in 2011, compared with a net loss of $18.66 million in 2010. The Company's balance sheet at March 31, 2012, showed $4.52 million in total assets, $11.22 million in total liabilities and a $6.69 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/4u03GW About Broadcast International Based in Salt Lake City, Broadcast International, Inc., installs, manages and supports private communication networks for large organizations that have widely-dispersed locations or operations. The Company owns CodecSys, a video compression technology to convert video content into a digital data stream for transmission over satellite, cable, Internet, or wireless networks, as well as offers audio and video production services. The Company's enterprise clients use its networks to deliver training programs, product announcements, entertainment, and other communications to their employees and customers. CABI SMA: Files Amended Schedules of Assets and Liabilities ----------------------------------------------------------- Cabi SMA Tower I LLP filed with the U.S. Bankruptcy Court for the Southern District of Florida its amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------------ ----------- A. Real Property B. Personal Property $15,014,691 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $34,128,377 E. Creditors Holding Unsecured Priority Claims $104,000 F. Creditors Holding Unsecured Non-priority Claims $3,531,766 ------------ ------------ TOTAL $15,014,691 $37,764,144 A full-text copy of the Schedules of Asset and Liabilities is available for free at http://bankrupt.com/misc/CABI_SMA_sal.pdf About Cabi SMA Tower I Based in Miami, Florida, Cabi SMA Tower I, LLLP -- fka Cabi SMA Retail 1, LLC; Cabi SMA, LLLP; Cabi SMA Tower 2, LLC; Cabi SMA Tower 2, LLLP; Capital at Brickell; Cabi SMA Retail 2, LLLP; Cabi SMA Retail 2, LLC; Cabi SMA Tower 1, LLC; and Cabi SMA Retail I, LLLP -- owns multiple vacant parcels around South Miami Avenue and S.W. 14th Street in Miami, Florida. It acquired the parcels to develop residential, hotel, and retail space, including a condominium development. The parcels are being managed by Cabi Developers, LLC pursuant to a management agreement. Cabi SMA Tower I filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 10-49009) on Dec. 28, 2010. Mindy A. Mora, Esq., and Tara V. Trevorrow, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, in Miami, serve as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates Cabi Downtown, LLC (Bankr. S.D. Fla. Case No. 09-27168) and Cabi New River LLC (Bankr. S.D. Fla. Case No. 10-49013) filed separate Chapter 11 petitions. No creditor's committee has been appointed in Cabi SMA Tower I, LLLP's Chapter 11 case. CABI SMA: Brickell Central's Property Valued at $17-Mil Under Plan ------------------------------------------------------------------ Judge A. Jay Cristol of the U.S. Bankruptcy Court for the Southern District of Florida ordered the Brickell Central LLC's real estate property, which represents Brickell Central's collateral in the bankruptcy proceeding of Cabi SMA Tower I, LLLP, will be deemed to have a value of $17 million. The valuation of the property is for the sole purpose of determining the amount of Brickell Central's secured claim under a plan of reorganization submitted by the Debtor. About Cabi SMA Tower I Based in Miami, Florida, Cabi SMA Tower I, LLLP -- fka Cabi SMA Retail 1, LLC; Cabi SMA, LLLP; Cabi SMA Tower 2, LLC; Cabi SMA Tower 2, LLLP; Capital at Brickell; Cabi SMA Retail 2, LLLP; Cabi SMA Retail 2, LLC; Cabi SMA Tower 1, LLC; and Cabi SMA Retail I, LLLP -- owns multiple vacant parcels around South Miami Avenue and S.W. 14th Street in Miami, Florida. It acquired the parcels to develop residential, hotel, and retail space, including a condominium development. The parcels are being managed by Cabi Developers, LLC pursuant to a management agreement. Cabi SMA Tower I filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 10-49009) on Dec. 28, 2010. Mindy A. Mora, Esq., and Tara V. Trevorrow, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, in Miami, serve as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates Cabi Downtown, LLC (Bankr. S.D. Fla. Case No. 09-27168) and Cabi New River LLC (Bankr. S.D. Fla. Case No. 10-49013) filed separate Chapter 11 petitions. No creditor's committee has been appointed in Cabi SMA Tower I, LLLP's Chapter 11 case. CABI SMA: Brickell Central Says Amended Plan Can't Be Confirmed --------------------------------------------------------------- Brickell Central, LLC, which asserts more than $30.5 million in secured note obligations owed by CABI SMA Tower I LLP, objects to the Debtor's First Amended Plan of Reorganization. Although the revised Plan states that the Equity Contribution will be backstopped by an "irrevocable letter of instruction" from a depository financial institution in the United States, the Debtor's counsel has clarified that an additional modification to the revised Plan will be filed in the near term, which provides for the backstop to be in the form of an irrevocable standby letter of credit from Credit Suisse AG in New York, which will provide credit for the full amount owed under the New Brickell Central Note in the event of any nonpayment. Leyza F. Blanco, Esq., at GrayRobinson P.A., notes that the Debtor has not filed any revision to its Disclosure Statement to address the foregoing modifications. Brickell Central has not received information explaining (i) how the Equity Contribution will be increased by $50 million and/or (ii) whether an enforceable letter of credit, as opposed to a letter of instruction, will ultimately be issued as a condition to confirmation in this case. Ms. Blanco contends that the Debtor's proposed reorganization is no longer dependent on the performance of a building project and a long-term payout, but, rather, on an Equity Contribution that has been increased from $5 million to $55 million, and upon the terms of an irrevocable letter of instruction, which may become an irrevocable standby letter of credit. Brickell Central has not received concrete and/or reliable disclosure regarding either source of funding and, as such, is forced to speculate as to its recoveries in this case, the terms and timing of the massive Equity Contribution to be provided, the ultimate terms and enforceability of any proposed letter of credit that is offered (if one is ultimately required as opposed to merely promised by the Debtor), all of which go to the feasibility of the Debtor's reorganization. To date, Brickell Central has had no access to the underlying transactions between Credit Suisse and the sponsor of the letter of credit, any opportunity to assess the creditworthiness of such sponsor, or any opportunity to review any covenants, conditions and/or representations that will govern the issuance of a letter of credit and the obligations of the parties. The Debtor has stated that a standby letter of credit will be available upon confirmation and has provided a preliminary draft of that proposed instrument to Brickell Central. Ms. Blanco states that Brickell Central is currently faced with a Plan that does not require the issuance of any such letter, and impending confirmation based on an Equity Contribution, the source of funding for which has not been explained and/or confirmed. To date, Brickell Central has not received any documents to support the viability of the Equity Contribution. Brickell Central submits that the revised Plan has been solicited in violation of Section 1125 of the Bankruptcy Code and cannot be confirmed. CABI SMA Files Non-Material Modifications to Amended Plan CABI SMA Tower I, LLLP, filed a modification to its First Amended Plan of Reorganization with the U.S. Bankruptcy Court for the Southern District of Florida. Article I of the Plan is modified to reflect the deletion of the definitions for the following terms and the substitution of the definitions below in their place: "Initial Equity Contribution", "Mortgage", "New Brickell Central Note", "Plan Supplement", and "Prepetition Loan Claim". Article I is further modified by the addition of the definition for the term, "Letter of Credit". A copy of the modifications to the plan is available for free at: http://bankrupt.com/misc/CABI_planmodification.pdf About Cabi SMA Tower I Based in Miami, Florida, Cabi SMA Tower I, LLLP -- fka Cabi SMA Retail 1, LLC; Cabi SMA, LLLP; Cabi SMA Tower 2, LLC; Cabi SMA Tower 2, LLLP; Capital at Brickell; Cabi SMA Retail 2, LLLP; Cabi SMA Retail 2, LLC; Cabi SMA Tower 1, LLC; and Cabi SMA Retail I, LLLP -- owns multiple vacant parcels around South Miami Avenue and S.W. 14th Street in Miami, Florida. It acquired the parcels to develop residential, hotel, and retail space, including a condominium development. The parcels are being managed by Cabi Developers, LLC pursuant to a management agreement. Cabi SMA Tower I filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 10-49009) on Dec. 28, 2010. Mindy A. Mora, Esq., and Tara V. Trevorrow, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, in Miami, serve as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. Affiliates Cabi Downtown, LLC (Bankr. S.D. Fla. Case No. 09-27168) and Cabi New River LLC (Bankr. S.D. Fla. Case No. 10-49013) filed separate Chapter 11 petitions. No creditor's committee has been appointed in Cabi SMA Tower I, LLLP's Chapter 11 case. CAKE SHOP: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------- San Antonio Express-News reports that The Cake Shop LLC filed for Chapter 11 bankruptcy reorganization on May 11, 2012. According to report, company CEO Perla Salzillo and CFO Jose D. Salzillo, who together own the bakery, also filed for personal bankruptcy reorganization under Chapter 13 of the U.S. Bankruptcy Code. The report notes the shop disclosed assets of $45,000 and debts of about $110,000 in its bankruptcy petition. A landlord sued The Cake Shop for breach of lease in March. Court records also show a mortgage servicer in February initiated a foreclosure action against the Salzillos. The Cake Shop operates from two locations in The Colonnade and Stone Oak. CANO PETROLEUM: Can Hire Canaccord Genuity as Investment Banker --------------------------------------------------------------- Cano Petroleum Inc. obtained permission from the U.S. Bankruptcy Court for the Northern District of Texas to employ Canaccord Genuity as financial advisor. Canaccord Genuity will, among other things, assist in analyzing and evaluating the business, operations and financial position of the Debtor and its strategic alternatives. About Cano Petroleum Cano Petroleum, Inc. (NYSE Amex: CFW), an independent Texas- based energy producer with properties in the mid-continent region of the United States, filed for Chapter 11 bankruptcy (Bank. N.D. Tex. Lead Case No. 12-31549) on March 7, 2012. Other affiliates also sought bankruptcy protection: Cano Petro of New Mexico, Ladder Companies, Inc., Square One Energy, Inc., Tri-Flow, Inc., W.O. Energy of Nevada, Inc., W.O. Operating Company, Ltd., W.O. Production Company, Ltd., and WO Energy, Inc. The cases are jointly administered. The Debtors filed for bankruptcy to pursue a sale under a joint plan of reorganization filed on the petition date. Cano Petroleum have entered into a Stalking Horse Stock Purchase Agreement with NBI Services Inc., pursuant to which NBI would purchase all of the shares of common stock that would be issued by Reorganized Cano under the Plan for $47.5 million. The deal is subject to higher and better offers and a possible auction. The petitions were filed by James R. Latimer, III, chief executive officer. Judge Barbara J. Houser oversees the case. The Debtors are represented by lawyers at Thompson & Knight LLP, in Dallas Texas. Cano Petroleum's consolidated balance sheet at Sept. 30, 2011, showed $63.37 million in total assets, $116.25 million in total liabilities, and a $52.88 million total stockholders' deficit. In schedules filed with the Court, Cano Petroleum disclosed $1.16 million in assets and $82.5 million in liabilities. Union Bank of California, the administrative agent and issuing lender under the Debtors' prepetition senior credit facility; and UnionBanCal Equities, Inc., the administrative agent and issuing lender, under the junior credit facility, are represented by: William A. "Trey" Wood III, Esq., at Bracewell & Giuliani LLP. CAPITOL CITY: Delays Form 10-Q for Q1, Needs Time for Review ------------------------------------------------------------ Capitol City Bancshares, Inc., requests an extension of time to file its Form 10-Q for the period ended March 31, 2012, as it could not complete the filing of its Form 10-Q on or before the prescribed due date without unreasonable effort. The Company needs additional time to complete the compilation, dissemination and review of the information required to be presented in the Form 10-Q. The Company expects to file its Quarterly Report on Form 10-Q on or before the fifth day following the prescribed due date for the Company's Form 10-Q. About Capitol City Bancshares Atlanta, Georgia-based Capitol City Bancshares, Inc., was incorporated under the laws of the State of Georgia for the purposes of serving as a bank holding company for Capitol City Bank and Trust Company. The Bank operates a full-service banking business and engages in a broad range of commercial banking activities, including accepting customary types of demand and timed deposits, making individual, consumer, commercial, and installment loans, money transfers, safe deposit services, and making investments in U.S. government and municipal securities. For the year ended Dec. 31, 2011, Nichols, Cauley and Associates, LLC, in Atlanta, Georgia, expressed substantial doubt about Capital City Bancshares' ability to continue as a going concern. The independent auditors noted that the Company is operating under regulatory orders to, among other items, increase capital and maintain certain levels of minimum capital. "As of Dec. 31, 2011, the Company was not in compliance with these capital requirements. In addition to its deteriorating capital position, the Company has suffered significant losses related to nonperforming assets, has experienced declining levels of liquid assets, and has significant maturities of liabilities within the next twelve months." The Company reported a net loss of $1.59 million on $8.91 million of net interest income (before provision for loan losses) for 2011, compared with net income of $37,030 on $8.06 million of net interest income (before provision for loan losses) for 2010. The Company's balance sheet at Dec. 31, 2011, showed $295.88 million in total assets, $287.68 million in total liabilities, and stockholders' equity of $8.20 million. CAPITOL INFRASTRUCTURE: Assets to be Auctioned June 4 ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports Capitol Broadband LLC obtained approval to sell the assets in two auctions taking place June 4. There is already an $11 million offer from Hotwire Communications Ltd. for the assets at 190 locations. According to the court-approved bid procedures, competing bids must be submitted by May 30. A hearing to approve the sale will take place June 14. The remaining assets, for which no buyer is yet under contract, will also be held June 4. 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. CATALYST PAPER: Amends Proposed Plan of Arrangement --------------------------------------------------- Catalyst Paper has amended its proposed Plan of Arrangement under the Companies' Creditors Arrangement Act. The Plan as so amended will be considered by Catalyst Paper's secured and unsecured creditors at the meetings scheduled for May 23, 2012. "We're pleased that over the past weeks, the various stakeholders, advisors and the company have worked diligently to craft an agreement that sizably reduces the company's debt level," said Kevin J. Clarke, President and Chief Executive Officer. "This agreement, with the support of creditors at the meetings on May 23, 2012, will enable Catalyst to emerge from creditor protection with improved liquidity and the capacity to return and sustain normal trade terms for the foreseeable period." The court-appointed monitor is recommending that creditors vote in favour of the Amended Plan at the Meetings. Catalyst Paper's Board of Directors is unanimously recommending that all holders of First Lien Notes, Unsecured Notes and General Unsecured Claims vote in favour of the Amended Plan at the Meetings. The principal changes to the Plan include: * a reduction of US$120 million in the amount of notes to be issued under the Amended Plan so that the total debt reduction under the Amended Plan will be US$435 million (rather than the US$315 million reduction under the Plan); * the reduction of the principal amount of New First Lien Notes to be issued under the Plan from US$325 million to US$250 million; and * the elimination of the New First Lien Coupon Notes to be issued under the Plan (approximately US$45 million); * the distribution of 50% of the net proceeds (PREI Proceeds Pool) from the sale of Catalyst Paper's interest in Powell River Energy Inc. and Powell River Energy Limited Partnership (PREI Interest) to Unsecured Creditors who do not receive a Convenience Cash Amount or elect to receive equity; * 100% of the New Common Shares to be issued to holders of the First Lien Notes subject to the ability for Unsecured Creditors to elect (Equity Election) to acquire up to 600,000 New Common Shares (4%) rather than receive cash from the PREI Proceeds Pool or the Maximum Convenience Claims Pool; and * the elimination of the issuance of the Warrants under the Plan. There were no changes to the provisions of the Plan relating to the payment of Convenience Cash Amounts. The Amended Plan Specifically, the Amended Plan treats each of the creditor classes as follows: -- 11% Senior Secured Notes due 2016 (First Lien Notes) -- Pursuant to the Amended Plan, Catalyst Paper's US$390.4 million aggregate principal amount of outstanding First Lien Notes will be exchanged for: -- US$250 million aggregate principal amount of 11% first lien notes due November1, 2017 (New First Lien Notes) allocated as to US$182 million on account of the Class A Notes and US$68 million on account of the Class B Notes; and -- 14.4 million New Common Shares of Catalyst Paper (being 100% of the outstanding common shares of Catalyst Paper subject to dilution from the issuance of common shares to Unsecured Creditors who make the Equity Election described below and under any Management Incentive Plan), 10,502,352 New Common Shares on account of the Class A Notes and 3,897,648 New Common Shares on account of the Class B Notes. Prior to this amendment, the Plan provided that the outstanding First Lien Notes would be exchanged for (a) US$325 million aggregate principal amount of New First Lien Notes (b)80% of Catalyst Paper's New Common Shares and (c) New First Lien Coupon Notes in a principal amount equal to accrued and unpaid interest on the New First Lien Notes as of the Effective Date. 7 3/8% Senior Notes Due 2014 Pursuant to the Amended Plan, Catalyst Paper's US$250 million aggregate principal amount of outstanding Unsecured Notes will be exchanged as follows: unless the holder of Unsecured Notes has made an Equity Election, such holder will receive its pro rata share (calculated by reference to the aggregate amount of all claims of Unsecured Creditors allowed under the Plan) of the PREI Proceeds Pool; and each holder of Unsecured Notes may elect (the Equity Election) to receive its pro rata share (calculated by reference to the aggregate amount of all claims of Unsecured Creditors allowed under the Plan) of 600,000 New Common Shares of Catalyst Paper rather than participate in the PREI Proceeds Pool. An Equity Election Form and information on how to make such election will be provided to Unsecured Creditors following the Sanction Order. General Unsecured Claims Pursuant to the Amended Plan, in exchange for all General Unsecured Claims, each holder of an allowed General Unsecured Claim shall receive: Unless the holder of such General Unsecured Claim has made an Equity Election or a Cash Election or is a Convenience Creditor, such holder will receive its pro rata share (calculated by reference to the aggregate amount of all claims of Unsecured Creditors allowed under the Plan) of the PREI Proceeds Pool; Each holder of an allowed General Unsecured Claim who has not made a Cash Election may elect by way of the Equity Election to receive its pro rata share (calculated by reference to the aggregate amount of all claims of Unsecured Creditors allowed under the Plan) of 600,000 New Common Shares of Catalyst Paper rather than receive such holder's pro rata share of the PREI Proceeds Pool or Convenience Cash Amount. Holders of General Unsecured Claims who have filed a Cash Election under the prior Plan and who wish to file an Equity Election under the Amended Plan must revoke their prior Cash Election prior to the date of the meetings. See "Revoking a Cash Election" below; and Each holder of a General Unsecured Claim equal to or less than C$10,000 (unless such holder makes an Equity Election) and holders of General Unsecured Claims in an amount over C$10,000 who validly file a Cash Election (pursuant to which the allowed amount of such holder's General Unsecured Claim will be reduced to C$10,000), will receive cash in an amount equal to 50% of such holder's allowed General Unsecured Claim, provided that the aggregate amount of cash payable to all such holders shall not exceed C$2.5 million. Prior to this amendment, the Plan provided that the outstanding Unsecured Notes and General Unsecured Claims would be exchanged for (a) 20% of Catalyst Paper's New Common Shares (b)Warrants exercisable, on a cashless basis, to acquire up to 15% of the fully diluted New Common Shares of Catalyst Paper for up to four years from the effective date of the Plan and (c) in respect of holders of General Unsecured Claims in an amount equal to or less than C$10,000 (or who agreed to reduce their claim to such amount), cash in an amount equal to up to 50 percent of such holder's General Unsecured Claims (unless they elected to receive the New Common Shares and Warrants referred to above), provided that the aggregate amount of cash payable to such holders would not exceed C$2.5 million. General Unsecured Claims Under the Amended Plan, Catalyst has agreed to use commercially reasonable efforts to sell all of its right, title and interest in Powell River Energy Inc. and the Powell River Energy Limited Partnership (PRELP) comprising 50,001 common shares in Powell River Energy Inc., long term subordinated debt of $20.8 million owed by Powell River Energy Inc. to Catalyst Paper Energy Holdings Inc. and a 49.95% limited partnership interest in PRELP. The PREI Proceeds Pool shall consist of an amount equal to 50% of the net proceeds received by Catalyst on account of the sale of the PREI Interest. The sale shall be conducted pursuant to an amended sale and investor solicitation process, which would likely not include a stalking horse bid, to be established and approved by the Supreme Court of British Columbia (Court) following obtainment of the Sanction Order for the Plan and is subject to the terms of a contractual right of first refusal in favour of Catalyst's joint venture partner. Power River Energy Inc. owns two hydroelectric dams near the Powell River mill, with a combined generating capacity of 83 megawatts. Pursuant to a power purchase agreement between Catalyst Paper and Power River Energy Inc., Power River Energy Inc. provides the power generated by its facilities to Catalyst Paper at a fixed rate approximating current British Columbia Hydro and Power Authority rates. Power River Energy Inc.'s hydroelectric facilities supply approximately 40% of the annual power needs of the Powell River mill, although this amount varies depending on hydrological conditions. The power purchase agreement will continue following the sale. New First Lien Notes There are no material changes to the terms of the New Notes under the Amended Plan other than as described above and other than: the Priority Lien Debt Cap will be reduced from US$400 million to US$325 million; the definition of Threshold PIK Notes will be revised to refer to New Notes outstanding, if any, in excess of US$250 million (as opposed to US$325 million), excluding any New Notes issued after the issue date (other than any PIK notes); and the maturity date of the New Notes will be November 1, 2017 rather than October 30, 2017. Required Approvals Implementation of the Amended Plan will be subject to the requisite approval by Catalyst Paper's secured and unsecured creditors at the Meetings to be held on May 23, 2012, the approval of the Court and, to the extent applicable, the approval of the United States Bankruptcy Court for the District of Delaware. In the event the Amended Plan is not approved at the Meetings, Catalyst Paper will commence a sale transaction in accordance with certain agreed and Court-approved sale and investor solicitation procedures. Conditions and Timing of Distributions Implementation of the Amended Plan remains subject to a number of other conditions including a condition that Catalyst shall have entered into agreements with respect to a new ABL Facility and, if necessary, Exit Facility, satisfactory to the Majority Initial Supporting Noteholders, in consultation with the Initial Supporting Unsecured Noteholders. The conditions are set out in the Amended Plan and in the Circular. Under the Amended Plan, each of these conditions must be satisfied within 45 days of the date of the Sanction Order unless such condition is waived or the date for fulfillment is extended in accordance with the provisions of the Amended Plan. The Amended Plan contemplates that distributions to the holders of the Unsecured Notes and General Unsecured Creditors (other than General Unsecured Creditors who are receiving the Convenience Cash Amount) will not be made until all claims of Unsecured Creditors being disputed have been allowed or determined by Final Order in accordance with the Claims Procedure Order. Voting Catalyst Paper's Board of Directors is unanimously recommending that all holders of First Lien Notes, Unsecured Notes and General Unsecured Claims vote in favour of the Amended Plan at the Meetings. The Meetings to consider the Amended Plan will be held on May 23, 2012 at the Westin Wall Centre, Vancouver Airport, 3099 Corvette Way, Richmond, BC at 10:00 am for Unsecured Creditors (including holders of Unsecured Notes and General Unsecured Claims) and 11:00 am for First Lien Noteholders. Revoking a Proxy Individuals who have already submitted a proxy may revoke their proxy by delivering to the Monitor a document specifying that the proxy is revoked that is signed by the individual or the individual's attorney duly authorized in writing. Creditors who are not individuals who have already submitted a proxy may revoke their proxy by delivering to the Monitor a document specifying that the proxy is revoked that is signed by a duly authorized officer or attorney thereof. Revoking a Cash Election Holders of General Unsecured Claims in excess of $10,000 who previously filed an election (Cash Election) to receive cash for their General Unsecured Claim may revoke their Cash Election by contacting the Monitor and completing the form that will be provided by the Monitor. Any previously filed Cash Election must be revoked prior to the date of the Meetings in order to make an Equity Election. Certain Canadian Federal Income Tax Considerations The following discussion supplements the summary of certain Canadian federal income tax considerations of the Restructuring located under the heading "Certain Canadian Federal Income Tax Considerations" in the Circular. The following summary is of a general nature only and is not intended to be, nor should be construed to be, legal or tax advice to any particular Affected Claimholder. This discussion is subject to the limitations, assumptions and caveats set out in the Canadian Tax Disclosure. Consequently, Affected Claimholders are urged to consult read carefully the following discussion, the Canadian Tax Disclosure and to consult their own tax advisors for advice as to the tax considerations in respect of the Restructuring having regard to their particular circumstances. Residents of Canada Pursuant to the Restructuring, Resident Affected Claimholders will dispose of their First Lien Notes and will receive consideration comprised of the New First Lien Notes and New Common Shares. Similarly, Resident Affected Claimholders will dispose of their Unsecured Notes or General Unsecured Claims, as applicable, and will receive consideration comprised of a pro rata share of the PREI Proceeds Pool, New Common Shares or cash, as applicable. In general, the transfer by a Resident Affected Claimholder of its First Lien Notes, Unsecured Notes or General Unsecured Claims for New Common Shares, New First Lien Notes, PREI Proceeds Pool or cash, as applicable, pursuant to the Restructuring will result in a gain or loss as described in the Tax Disclosure. Resident Affected Claimholders will be required to value their share of the PREI Proceeds Pool as of the Effective Date based on all available facts and circumstances at the time they file their tax returns. Because the amount of cash to be received under the PREI Proceeds Pool is uncertain, the fair market value of the PREI Proceeds Pool is not clear. A Resident Affected Claimholder's adjusted cost base of its pro rata share of the PREI Proceeds Pool received pursuant to the Restructuring will be equal to the fair market value thereof on the Effective Date. A Resident Affected Claimholder holding First Lien Notes or Unsecured Notes will generally be required to include in its income the amount of interest in respect of the First Lien Note or the Unsecured Notes as described in the Tax Disclosure in the context of the Unsecured Notes (under the heading "Disposition of Unsecured Notes, First Lien Notes and General Unsecured Claims"); however, where a Resident Affected Claimholder is required to include an amount in income on account of interest on the First Lien Notes or Unsecured Notes, as the case may be, that is not paid on the Restructuring, the Resident Affected Claimholders should be entitled to a deduction in computing income of an equivalent amount. A Resident Affected Claimholder that holds its Unsecured Notes in a trust governed by a Deferred Plan should consult its tax advisors for purposes of determining whether the Restructuring, including the right to receive PREI Proceeds Pool, will give rise to any adverse tax consequences. Non-Residents of Canada No taxes will be payable under the ITA by a Non-Resident Affected Claimholder upon the disposition of the First Lien Notes, the Unsecured Notes or the General Unsecured Claims by the Non- Resident Affected Claimholder to the Corporation for New Common Shares, New First Lien Notes, PREI Proceeds or cash, as applicable, pursuant to the Restructuring. To the extent that amounts received under the PREI Proceeds Pool by a Non-Resident Affected Claimholder constitutes "participating debt interest" for purposes of the ITA, such amount will be subject to Canadian withholding tax at the rate of 25%, subject to relief provided under an applicable income tax treaty or convention between Canada and the country in which the Non- Resident Affected Claimholder resides. Certain U.S. Federal Income Tax Considerations The following discussion supplements the summary of certain material U.S. federal income tax consequences of the Restructuring located under the heading "Certain U.S. Federal Income Tax Considerations" (the Tax Disclosure) in the Circular. This discussion does not purport to be a complete analysis of all of the potential U.S. federal income tax considerations that may be relevant to U.S. Holders in light of their particular circumstances, and U.S. Holders are urged to read carefully the Tax Disclosure and to consult their own tax advisors. The exchange of First Lien Notes for New First Lien Notes and New Common Shares should constitute a recapitalization, as discussed in the Tax Disclosure, and a U.S. Holder that exchanges First Lien Notes generally will not recognize any gain or loss as a result of such exchange (except to the extent of any New First Lien Notes or New Common Shares allocable to accrued and unpaid interest) and will have a holding period for the New First Lien Notes and New Common Shares (except to the extent allocable to accrued and unpaid interest) that includes its holding period of the First Lien Notes. The exchange of Unsecured Notes for a pro rata share of the PREI Proceeds Pool will be a taxable exchange, and a U.S. Holder of Unsecured Notes who does not make a valid Equity Election will recognize gain or loss equal to the difference between its basis in the Unsecured Notes and its share of the PREI Proceeds Pool received in exchange therefor (except to the extent attributable to accrued and unpaid interest, which a U.S. Holder will recognize as ordinary income to the extent it has not already). The Exchange of Unsecured Notes for New Common Shares should constitute a recapitalization, as discussed in the Tax Disclosure, and any U.S. Holders of Unsecured Notes who make a valid Equity Election generally will not recognize any gain or loss as a result of such exchange (except to the extent of any New Common Shares allocable to accrued and unpaid interest) and will have a holding period for the New Common Shares (except to the extent allocable to accrued and unpaid interest) that includes its holding period of the Unsecured Notes. U.S. Holders of General Unsecured Claims will recognize gain or loss as described in the Tax Disclosure. About Catalyst Paper Catalyst Paper Corp. -- http://www.catalystpaper.com/-- manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With four mills, located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 1.9 million tons. The Company is headquartered in Richmond, British Columbia, Canada and its common shares trade on the Toronto Stock Exchange under the symbol CTL. Catalyst on Dec. 15, 2011, deferred a US$21 million interest payment on its outstanding 11.00% Senior Secured Notes due 2016 and Class B 11.00% Senior Secured Notes due 2016 due on Dec. 15, 2011. Catalyst said it was reviewing alternatives to address its capital structures and it is currently in discussions with noteholders. Perella Weinberg Partners served as the financial advisor. In early January 2012, Catalyst entered into a restructuring agreement, which will see its bondholders taking control of the company and includes an exchange of debt for equity. The agreement said it would slash the company's debt by C$315.4 million ($311 million) and reduce its cash interest expenses. Catalyst also said it will continue to "operate and satisfy" its obligations to customers, trade creditors, employees and retirees in the ordinary course of business during the restructuring process. On Jan. 17, 2012, Catalyst applied for and received an initial court order under the Canada Business Corporations Act (CBCA) to commence a consensual restructuring process with its noteholders. Affiliate Catalyst Paper Holdings Inc., filed for creditor protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 12-10219) on the same day and sought recognition of the Canadian proceedings. Catalyst joins a line of paper producers that have succumbed to higher costs, increased competition from Asia and Europe, and falling demand as more advertisers and readers move online. In 2011, Cerberus Capital-backed NewPage Corp. filed for bankruptcy protection, followed by SP Newsprint Co., owned by newsprint magnate and fine art collector Peter Brant. In December, Wausau Paper said it will close its Brokaw mill in Wisconsin, cut 450 jobs and exit its print and color business. The Supreme Court of British Columbia granted Catalyst creditor protection under the CCAA until April 30, 2012. As of Dec. 31, 2011, the Company had C$737.6 million in total assets and C$1.35 million in total liabilities. CENTRAL FEDERAL: Incurs $739,000 Net Loss in First Quarter ---------------------------------------------------------- Central Federal Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $739,000 on $2.01 million of interest and dividend income for the three months ended March 31, 2012, compared with a net loss of $1.71 million on $2.64 million of interest and dividend income for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $241.44 million in total assets, $232.21 million in total liabilities and $9.22 million in total stockholders' equity. Eloise L. Mackus, CEO, commented, "We are pleased that the levels of nonperforming loans, criticized and classified loans, and past due loans have continued to improve. These balances decreased by 30%, 10% and 15%, respectively, during the first quarter of 2012. Since we began our workout efforts in June of 2010, nonperforming loans and criticized and classified loans decreased 45% and 33%, respectively. We remain committed to the continued improvement of our asset quality." A copy of the Form 10-Q is available for free at: http://is.gd/okVsrF About Central Federal Fairlawn, Ohio-based Central Federal Corporation (Nasdaq: CFBK) is the holding company for CFBank, a federally chartered savings association formed in Ohio in 1892. CFBank has four full-service banking offices in Fairlawn, Calcutta, Wellsville and Worthington, Ohio. Central Federal reported a net loss of $5.42 million in 2011, a net loss of $6.87 million in 2010, and a net loss of $9.89 million in 2009. Following the 2011 results, Crowe Horwath LLP, in Cleveland, Ohio, expressed substantial doubt about the Company's ability to continue as a going concern. The Company's auditors noted that the Holding Company and its wholly owned subsidiary (CFBank) are operating under regulatory orders that require among other items, higher levels of regulatory capital at CFBank. The Company has suffered significant recurring net losses, primarily from higher provisions for loan losses and expenses associated with the administration and disposition of nonperforming assets at CFBank. These losses have adversely impacted capital at CFBank and liquidity at the Holding Company. At Dec. 31, 2011, regulatory capital at CFBank was below the amount specified in the regulatory order. Failure to raise capital to the amount specified in the regulatory order and otherwise comply with the regulatory orders may result in additional enforcement actions or receivership of CFBank. Regulatory Matters On May 25, 2011, Central Federal Corporation and CFBank each consented to the issuance of an Order to Cease and Desist (the Holding Company Order and the CFBank Order, respectively, and collectively, the Orders) by the Office of Thrift Supervision (OTS), the primary regulator of the Holding Company and CFBank at the time the Orders were issued. The Holding Company Order required it, among other things, to: (i) submit by June 30, 2011, a capital plan to regulators that establishes a minimum tangible capital ratio commensurate with the Holding Company's consolidated risk profile, reduces the risk from current debt levels and addresses the Holding Company's cash flow needs; (ii) not pay cash dividends, redeem stock or make any other capital distributions without prior regulatory approval; (iii) not pay interest or principal on any debt or increase any Holding Company debt or guarantee the debt of any entity without prior regulatory approval; (iv) obtain prior regulatory approval for changes in directors and senior executive officers; and (v) not enter into any new contractual arrangement related to compensation or benefits with any director or senior executive officer without prior notification to regulators. The CFBank Order required CFBank to have by Sept. 30, 2011, and maintain thereafter, 8% Tier 1 (Core) Capital to adjusted total assets and 12% Total Capital to risk weighted assets. CFBank will not be considered well-capitalized as long as it is subject to individual minimum capital requirements. CFBank did not comply with the higher capital ratio requirements by the Sept. 30, 2011 required date. CENTRAL PACIFIC: Solid Capital Level Cues Fitch to Upgrade Ratings ------------------------------------------------------------------ Fitch Ratings has upgraded the long-term Issuer Default Rating (IDR) of Central Pacific Corp. (CPF) and its banking subsidiary, Central Pacific (CPB), to 'BB-' from 'B+' due to solid capital levels for its rating, improving asset quality trends, and a resilient local economy. The Rating Outlook is Stable. CPF's ratings upgrade reflects its sustained enhanced capital levels that help to mitigate declining but still elevated non- performing assets (NPAs). Its tangible common equity ratio of 10.6% at 1Q'12 relative to its credit risk profile is consistent with other 'BB-' rated companies. CPF's ratio of non-performing loans to tangible common equity and reserves stood at 35% at 1Q12. CPB is still subject to an eight percent minimum Tier 1 Leverage ratio pursuant to a Memorandum of Understanding (MOU) with regulators, which is easily satisfied by the 13.3% Tier 1 Leverage ratio at the bank. Despite elevated capital levels, CPF cannot pay dividends until it receives regulatory approval due to the MOU. CPF realized significant declines in year over year NPAs, net charge-offs (NCOs), and NPL inflows. Management continues to de- risk its balance sheet by significantly reducing exposure to both construction and development loans and California real estate. Although problem credits are still higher than historical averages, credit risk improved enough for the company to take five consecutive negative quarterly loss provisions despite being under a MOU with state and federal regulators. Remaining loan loss reserves represent 70 percent of impaired loans, which is slightly better than other similarly rated companies. Earnings have improved but remain weak. Pre-provision net income was negative in 2011 due to non-recurring charges, but rose to $8.5 million in the first quarter of 2012. Earnings have been augmented by negative credit loss provisions over the past five quarters. Additionally, CPF realized $9.9 million in income in 2011 from deferred tax asset (DTA) reserve releases. Fitch expects CPF to continue to release DTA reserves during 2012 due to improving asset quality. This should lead to positive earnings in 2012. CPF, whose bank branches are located in Hawaii, should benefit from the relative strength of the local economy compared to the U.S. economy. For the past decade, Hawaii's unemployment rate has been approximately 200bps lower than U.S. unemployment rate. Similarly, mortgage delinquencies have trailed U.S. mortgage delinquency rates by approximately 200bps. When coupled with favorable trends in tourism, this should benefit future profitability. U.S. Treasury sold remaining common stock held in CPF which exited the Troubled Assets Relief Program (TARP) during in 2012. The U.S. Treasury procured the common stock in February 2011 when they exchanged preferred stock and unpaid dividends for common stock upon the completion of CPF's $325 million capital raise. Continued improvement in asset quality metrics, core earnings and payment of preferred dividends in arrears could result in positive ratings momentum for CPF. However, in the near term, the level and trend of core earnings could be difficult to overcome due to weak efficiency ratios. Deteriorating asset quality trends or a significant economic slowdown in Hawaii could negatively pressure CPF's current ratings. The ratings on CPF's trust preferred securities remain at 'C' given that these issues remain in deferral status. Until CPF begins to pay dividends on its trust preferred securities and the deferred dividends are brought current, the ratings on these issues will remain at 'C'. Central Pacific Financial Corp., a Hawaii based bank holding company, is a $4.2 billion FDIC insured bank. The bank and its subsidiaries offers full-service commercial banking with 34 bank branches and 120 ATMs located throughout the Hawaii. Fitch rates Central Pacific Financial Corp as follows: -- Long-term Issuer Default Rating (IDR) upgraded to 'BB-' from 'B+'; Outlook Stable; -- Short-term IDR affirmed 'B'; -- Viability rating upgraded to 'bb-' from 'b+'; -- Support Rating Floor affirmed at 'NF'; -- Support affirmed at '5'. Central Pacific Bank -- Long-term IDR upgraded to 'BB-' from 'B+'; Outlook Stable; -- Long-term deposits upgraded to 'BB' from 'BB-/RR3'; -- Short-term IDR affirmed at 'B'; -- Short-term deposits affirmed at 'B'; -- Viability rating upgraded to 'bb-' from 'b+'; -- Support Rating Floor affirmed at 'NF'; -- Support Rating affirmed at '5'. CPB Capital Trust I, II & IV CPB Statutory Trust III & V -- Trust Preferred Securities affirmed at 'C' (formerly C/RR6). CHIQUITA BRANDS: Moody's Changes Rating Outlook to Negative ----------------------------------------------------------- Moody's Investors Service has changed its outlook for Chiquita Brands International, Inc. to negative from stable and has affirmed its B2 corporate family rating (CFR). Concurrently, Moody's lowered the ratings on Chiquita Brands LLC's (a wholly owned operating subsidiary of Chiquita Brands International, Inc., collectively Chiquita) senior secured credit facility to Ba3 from Ba2. The change in outlook to negative reflects Moody's view that weakness in both of Chiquita's bananas and salads and healthy snacks segments will persist resulting in the weakening of its earnings and cash flows and an increase in leverage. As a result of its increasing leverage profile, Chiquita recently announced plans to renegotiate its bank covenants with lenders. Moody's estimates that without covenant relief, Chiquita may not be in compliance with its leverage covenant as early as the second or third quarter of 2012, absent incremental debt reduction. The negative outlook incorporates Moody's view that Chiquita will execute an amendment in the second quarter to increase covenant headroom and will maintain access to its $150 million revolving credit facility, prospectively. The following ratings have been affirmed at Chiquita Brands International, Inc.: Corporate family rating at B2; Probability of default rating at B2; and $106 million 7.5% senior notes due 2014 at Caa1 (LGD5, 88%). The following ratings have been lowered at Chiquita Brands LLC: $150 million senior secured revolver due 2016 to Ba3 (LGD2, 23%) from Ba2 (LGD2, 20%); and $321 million senior secured term loan due 2016 to Ba3 (LGD2, 23%) from Ba2 (LGD2, 20%). Ratings Rationale The negative outlook reflects Moody's view that Chiquita's leverage will rise above 6.5x (on a Moody's adjusted basis) as earnings continue to fall in 2012 due to weak banana prices in both North America and Europe, headwinds from foreign currency and higher fuel costs. In addition, Moody's anticipates that further volume declines in Chiquita's value-added salad business and its headquarters relocation will compound the earnings pressure driven by the banana business this year. Moody's anticipates that Chiquita's cash flows will be constrained due to the decline in earings and upfront investment associated with its headquarters relocation. The B2 CFR incorporates Chiquita's high financial leverage, 6.0x at March 31, 2012, ongoing business volatility and certain litigation exposures. Further, the rating is constrained by Chiquita's exposure to sharp performance fluctuations due to the commodity-like nature of its banana and value-added salad products as well as external factors including fuel prices, weather, crop infestation and local government policies. These factors are mitigated, in part, by the company's adequate liquidity profile, albeit weaker than Moody's expectations given Moody's current view with regard to covenant compliance absent an amendment. In addition, Chiquita's modest product and geographic diversification and well-established brands, namely Chiquita and Fresh Express, generally support its ratngs. The downgrade of the senior secured credit facility to Ba3 from Ba2 reflects its increased proportion in the capital structure following the company's redemption of a portion of its unsecured notes in 2011. Moody's would likely downgrade Chiquita's ratings if they were unable to execute an amendment that provides adequate covenant headroom or lost access to its revolver due to covenant constraints. Further, the ratings could be downgraded if Chiquita's performance continues to deteriorate resulting in leverage remaining at elevated levels for several quarters or a weakened liquidity profile driven by an inability to generate cash flows. Debt-to-EBITDA maintained at or above 6.5x could result in a ratings downgrade, particularly if liquidity remains a challenge for the business. A ratings upgrade is unlikely prior to Chiquita demonstrating the ability to operate with leverage below 4.0x for an extended period while maintaining a good liquidity profile. The outlook could stabilize if Chiquita were to stem volume losses in its value- added salad business and restore earnings growth in its banana businesses such that earnings began to rebound and Chiquita generated free cash flow on a sustainable basis. The principal methodology used in rating Chiquita was the Global Food - Protein and Agriculture Industry Methodology published in September 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. Chiquita, based in Cincinnati, Ohio, is a leading international marketer and distributor of bananas and other fresh produce in over 70 countries and a producer of packaged salads under the Fresh Express brand name primarily in the United States. Total sales for the last twelve months ending March 31, 2012 were $3.1 billion. CLIFFS CLUB: Has Until Sept. 25 to Decide on Unexpired Leases ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Carolina extended until Sept. 25, 2012, The Cliffs Club & Hospitality Group, Inc., et al.'s time to assume or reject unexpired nonresidential real property leases under which any of the Debtors is a lessee. According to the Debtors, they needed additional time to fully appraise their financial situation and the potential value of their assets in terms of the formulation of a Chapter 11 plan, and require additional time to assess and evaluate whether to assume or reject any unexpired leases as part of the Debtors' overall objective of reorganization. About Cliffs Club Units of The Cliffs Communities, led by The Cliffs Club & Hospitality Group, Inc., doing business as The Cliffs Golf & Country Club, along with 10 affiliates, sought Chapter 11 protection (Bankr. D. S.C. Lead Case No. 12-01220) on Feb. 28, 2012. The Cliffs has eight premier, private master-planned residential communities, each to have its own world-class golf course. Approximately 3,734 lots have been sold. There are currently 1,385 finished homes, with 63 under construction. The properties for sale are owned by non-debtor DevCo entities. The Feb. 28 Debtors operate the exclusive membership clubs for golf, tennis, wellness and social activities at The Cliffs' communities in North and South Carolina. The clubs have 2,280 members, and there are 766 resigned members with refundable deposits totaling $37 million. The Debtors do not own the golf courses -- they only own or lease all the "core amenities" for the operation of the golf courses. Another affiliate, Keowee Falls Investment Group, LLC, filed a Chapter 11 petition (Bankr. D. S.C. Case No. 12-01399) in Spartanburg, South Carolina, on March 2, 2012. Travelers Rest- based Keowee Falls estimated at least $100 million in assets and liabilities of up to $50 million. Judge John E. Waites presides over the Debtors' cases. Lawyers at McKenna Long & Aldridge LLP serve as the Debtors' lead counsel. Dana Elizabeth Wilkinson, Esq., serves as local counsel. Grisanti Galef & Goldress serves as restructuring advisors and Katie S. Goodman of GGG serves as CRO. BMC Group Inc. serves as the Debtors' claims and noticing agent. According to papers filed in Court, the Debtors' total assets had a $175 million book value at Dec. 31, 2011. The Debtors' total liabilities had a $333 million book value at Dec. 31, 2011. The petition was signed by Timothy P. Cherry, authorized officer. Wells Fargo, as Indenture Trustee, is represented in the case by Daniel S. Bleck, Esq., at Mintz Levin Cohn Ferris Glovsky and Popeo P.C.; and Elizabeth J. Philp, Esq., and Michael Beal, Esq., at McNair Law Firm P.A. The Official Committee of Unsecured Creditors is represented in the case by John B. Butler, III, P.A., and Jonathan B. Alter, Esq., at Bingham McCutchen LLP. CLIFFS CLUB: Has Deal Extending Plan Deadline Until May 22 ---------------------------------------------------------- The Cliffs Club & Hospitality Group, Inc., et al., ask the U.S. Bankruptcy Court for the District of South Carolina to approve a stipulation extending until May 22, 2012, their time to file a Disclosure Statement and Plan of Reorganization. The stipulation was entered among the Debtors, Wells Fargo Bnk, National Association, in its capacity as indenture trustee and collateral trustee; Carlile Development Company, LLC, the DIP lender; SP 50 Investments LTD, the prepetition bridge lender; Carlile Development Group, the stalking horse bidder; Steve and Penny Carlile of marshall, Texas; and Cliffs Club Partners, LLC, along with Silver Sun, LLC; SunTx Urbana GP I, LP; Arendale Holdings Corp., and Carlile Cliffs Investment, LLC, and their agents, affiliates and assigns. Pursuant to the stipulation: -- the filing of the disclosure statement after the previous deadline of May 13, will not be deemed to be an event of default in the DIP financing order, termination event, or otherwise a breach or violation in any manner of the cash collateral order, DIP financing order, bidding procedures or any other orders, documents or agreements; and -- all parties reserve all other rights with respect to the disclosure statement and proposed plan. About Cliffs Club Units of The Cliffs Communities, led by The Cliffs Club & Hospitality Group, Inc., doing business as The Cliffs Golf & Country Club, along with 10 affiliates, sought Chapter 11 protection (Bankr. D. S.C. Lead Case No. 12-01220) on Feb. 28, 2012. The Cliffs has eight premier, private master-planned residential communities, each to have its own world-class golf course. Approximately 3,734 lots have been sold. There are currently 1,385 finished homes, with 63 under construction. The properties for sale are owned by non-debtor DevCo entities. The Feb. 28 Debtors operate the exclusive membership clubs for golf, tennis, wellness and social activities at The Cliffs' communities in North and South Carolina. The clubs have 2,280 members, and there are 766 resigned members with refundable deposits totaling $37 million. The Debtors do not own the golf courses -- they only own or lease all the "core amenities" for the operation of the golf courses. Another affiliate, Keowee Falls Investment Group, LLC, filed a Chapter 11 petition (Bankr. D. S.C. Case No. 12-01399) in Spartanburg, South Carolina, on March 2, 2012. Travelers Rest- based Keowee Falls estimated at least $100 million in assets and liabilities of up to $50 million. Judge John E. Waites presides over the Debtors' cases. Lawyers at McKenna Long & Aldridge LLP serve as the Debtors' lead counsel. Dana Elizabeth Wilkinson, Esq., serves as local counsel. Grisanti Galef & Goldress serves as restructuring advisors and Katie S. Goodman of GGG serves as CRO. BMC Group Inc. serves as the Debtors' claims and noticing agent. According to papers filed in Court, the Debtors' total assets had a $175 million book value at Dec. 31, 2011. The Debtors' total liabilities had a $333 million book value at Dec. 31, 2011. The petition was signed by Timothy P. Cherry, authorized officer. Wells Fargo, as Indenture Trustee, is represented in the case by Daniel S. Bleck, Esq., at Mintz Levin Cohn Ferris Glovsky and Popeo P.C.; and Elizabeth J. Philp, Esq., and Michael Beal, Esq., at McNair Law Firm P.A. The Official Committee of Unsecured Creditors is represented in the case by John B. Butler, III, P.A., and Jonathan B. Alter, Esq., at Bingham McCutchen LLP. COATES INTERNATIONAL: Incurs $1.4 Million Net Loss in Q1 -------------------------------------------------------- Coates International, Ltd., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.39 million on $4,800 of total revenues for the three months ended March 31, 2012, compared with a net loss of $543,269 on $0 of total revenues for the same period during the prior year. Coates reported a net loss of $2.99 million in 2011, compared with a net loss of $1.05 million in 2010. The Company's balance sheet at March 31, 2012, showed $2.72 million in total assets, $4.69 million in total liabilities and a $1.97 million total stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/OnHYQQ About Coates International Based in Wall Township, N.J., Coates International, Ltd. (OTC BB: COTE) -- http://www.coatesengine.com/-- was incorporated on August 31, 1988, for the purpose of researching, patenting and manufacturing technology associated with a spherical rotary valve system for internal combustion engines. This technology was developed over a period of 15 years by Mr. George J. Coates, who is the President and Chairman of the Board of the Company. The Coates Spherical Rotary Valve System (CSRV) represents a revolutionary departure from the conventional poppet valve. It changes the means of delivering the air and fuel mixture to the firing chamber of an internal combustion engine and of expelling the exhaust produced when the mixture ignites. For 2011, Meyler & Company, LLC, in Middletown, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern. The independed auditors noted that the Company continues to have negative cash flows from operations, recurring losses from operations, and a stockholders' deficiency. COMMUNITY FIRST: Reports $1.7 Million Net Income in 1st Quarter --------------------------------------------------------------- Community First, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $1.76 million on $6.28 million of total interest income for the three months ended March 31, 2012, compared with a net loss of $469,000 on $7.74 million of total interest income for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $583.77 million in total assets, $572.78 million in total liabilities and $10.99 million in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/KK0pJt About Community First Columbia, Tennessee-based Community First, Inc., is a registered bank holding company under the Bank Holding Company Act of 1956, as amended, and became so upon the acquisition of all the voting shares of Community First Bank & Trust on Aug. 30, 2002. An application for the bank holding company was approved by the Federal Reserve Bank of Atlanta (the "FRB") on Aug. 6, 2002. The Company was incorporated under the laws of the State of Tennessee as a Tennessee corporation on April 9, 2002. After auditing the Company's 2011 results, Crowe Horwath LLP, in Brentwood, Tennessee, expressed substantial doubt about Community First's ability to continue as a going concern. The independent auditors noted that the Company's bank subsidiary, Community First Bank & Trust, is not in compliance with a regulatory enforcement action issued by its primary federal regulator requiring, among other things, a minimum Tier 1 Leverage capital ratio at the Bank of not less than 8.5%, a minimum Tier 1 capital to risk-weighted assets ratio of not less than 10.0% and a minimum Total capital to risk-weighted assets ratio of not less than 12.0%. "The Bank's Tier 1 Leverage capital ratio was 4.92%, its Tier 1 capital to risk-weighted assets ratio was 7.22% and its Total-capital to risk weighted assets ratio was 8.51% at Dec. 31, 2011. Continued failure to comply with the regulatory enforcement action may result in additional adverse regulatory action." The Company reported a net loss of $15.0 million on $19.6 million of net interest income (before provision for loan losses) in 2011, compared with a net loss of $18.2 million on $21.0 million of net interest income (before provision for loan losses) in 2010. Total non-interest income was $3.4 million for 2011, compared with $4.7 million for 2010. CONCORD CAMERA: Board OKs Liquidating Distribution of Shares ------------------------------------------------------------ Concord Camera Corp.'s board of directors approved a liquidating distribution of $0.20 per share to the shareholders of record at the close of business on May 11, 2009, in accordance with the previously announced plan of dissolution and liquidation. In accordance with the Plan of Liquidation, the Company's stock transfer books were closed at the close of business on May 11, 2009, and no transfers of its common stock were recorded after that time. The Company currently anticipates that payment of the liquidating distribution will be made in May 2012 and shareholders of record on the Record Date will receive a communication from the Company's stock transfer agent in May 2012 regarding the distribution. The timing and amounts of any future distributions, if any, will be determined by the Company's Board of Directors in accordance with the Plan of Liquidation. There can be no assurance that there will be any future distributions. Concord's shareholders approved the Plan of Dissolution and Liquidation of the company at the annual meeting on Dec. 18, 2008. The Plan of Liquidation contemplates an orderly wind down of the Concord Camera's business and operations, the monetization of the company's non-cash assets, the satisfaction or settlement of its remaining liabilities and obligations and one or more distributions to its shareholders. About Concord Camera Headquartered in Hollywood, Florida, Concord Camera Corp. (NASDAQ:LENS) -- http://www.concord-camera.com/-- through its subsidiaries, provides easy-to-use 35mm single-use and traditional film cameras. Concord markets and sells its cameras on a private- label basis and under the POLAROID and POLAROID FUNSHOOTER brands through in-house sales and marketing personnel and independent sales representatives. The POLAROID trademark is owned by Polaroid Corporation and is used by Concord under license from Polaroid. CONTRACT RESEARCH: Auction Cancelled; Lenders to Take Over ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Contract Research Solutions Inc. attracted no bids to compete with the offer from secured lenders to buy the business in exchange for debt. As a result, the May 11 auction was canceled. The hearing for approval of the sale was set for May 17. According to the report, selling the business without opposition from the unsecured creditors' committee was made possible by a settlement approved last week. It carves out $1.5 million for payment to holders of unsecured claims or other uses the committee finds necessary. The settlement provides that the lenders won't use their secured deficiency claims to take any part of the $1.5 million. The company said that the settlement will give some recovery to unsecured creditors even though secured lenders are "not likely to be paid in full" by taking ownership. 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. Assets are $205 million, with debt total $248 million. There is $185 million in debt for borrowed money, including $116 million on a first-lien term loan and revolving credit. The second-lien loan is $25 million. Second-lien lenders have agreed to the sale. Freeport Financial LLC serves as the sole lead arranger and bookrunner, and as U.S. administrative agent and collateral agent under the first lien facility. Bank of Montreal serves as the Canadian agent. Freeport is also the agent under the second lien facility. Judge Kevin Gross oversees the case. Lawyers at Young Conaway Stargatt & Taylor, LLP, and Paul Hastings LLP serve as the Debtors' counsel. Stikeman Elliott LLP serves as Canadian counsel. Carl Marks Advisory Group LLC serves as restructuring advisor. Epiq Bankruptcy Solutions serves as claims and notice agent. The petitions were signed by Michael T. Murren, CFO. The first lien lenders and the stalking horse buyers are represented by Peter Knight, Esq., at Latham & Watkings, LLP; and Wael Rostom, Esq., at McMillan LLP. Roberta A. Deangelis, U.S. Trustee for Region 3 appointed three persons to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Contract Research Solutions, Inc., et al. CONVERTED ORGANICS: Swings to $2.9 Million Net Income in Q1 ----------------------------------------------------------- Converted Organics Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $2.96 million on $400,989 of revenue for the three months ended March 31, 2012, compared with a net loss of $1.84 million on $739,176 of revenue for the same period during the prior year. Converted Organics reported a net loss of $17.98 million in 2011, compared with a net loss of $47.81 million in 2010. The Company's balance sheet at March 31, 2012, showed $7.18 million in total assets, $6.81 million in total liabilities and $367,679 in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/PDqrIq About Converted Organics Boston, Mass.-based Converted Organics Inc. utilizes innovative clean technologies to establish and operate environmentally friendly businesses. Converted Organics currently operates in three business areas, namely organic fertilizer, industrial wastewater treatment and vertical farming. After auditing the 2011 results, Moody, Famiglietti & Andronico, LLP, noted that the Company has suffered recurring losses and negative cash flows from operations and has an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. DAIS ANALYTIC: Lowers Net Loss to $18,400 Net Loss in Q1 -------------------------------------------------------- Dais Analytic Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $18,383 on $1.03 million of revenue for the three months ended March 31, 2012, compared with a net loss of $3.28 million on $858,694 of revenue for the same period during the prior year. The Company reported a net loss of $2.33 million in 2011, compared with a net loss of $1.43 million in 2010. The Company's balance sheet at March 31, 2012, showed $1.56 million in total assets, $6.44 million in total liabilities and a $4.87 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/7sYAYC About Dais Analytic Odessa, Fla.-based Dais Analytic Corporation has developed and patented a nano-structure polymer technology, which is being commercialized in products based on the functionality of these materials. The initial product focus of the Company is ConsERV, an energy recovery ventilator. The Company also has new product applications in various developmental stages. IN its report on the financial statements for 2011, Cross, Fernandez & Riley LLP, in Orlando, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses since inception and has a working capital deficit and stockholders' deficit of $3.22 million and $4.90 million at Dec. 31, 2011. DELPHI FIN'L: Moody's Lifts Sub. Debt Shelf Rating From '(P)Ba1' ---------------------------------------------------------------- Moody's Investors Service has upgraded the senior debt rating of Delphi Financial Group, Inc. to Baa2 from Baa3 and the insurance financial strength (IFS) ratings of DFG's wholly-owned operating companies, Reliance Standard Life Insurance Company (Reliance Standard) and Safety National Casualty Corporation (Safety National) to A2 from A3, upon the completion of the acquisition of Delphi for $2.7 billion by Tokio Marine Holdings, Inc. (Tokio Marine: ultimate parent of Tokio Marine & Nichido Fire Insurance Co., Ltd, IFS at Aa3, stable). In addition, all other outstanding debt ratings of Delphi Financial Group have been upgraded by one notch (see list below). The outlook on Delphi and its subsidiaries is stable. The rating action concludes a review that was initiated on December 21, 2011, upon the announcement of a definitive agreement of the proposed transaction between Tokio Marine and Delphi. Ratings Rationale Commenting on the upgrade of Delphi's and its affiliates' ratings, Moody's said that the acquisition provides Delphi and its subsidiaries the benefits of being part of the larger Tokio Marine group, with greater financial resources and stronger credit profile. Vice President, Neil Strauss, added, "We view the transaction as positive to Delphi's life and property casualty operations in terms of strengthening their financial flexibility and risk management." The rating agency said that the upgrade of Reliance Standard's and Safety National's IFS ratings incorporates the benefit of implicit support from Tokio Marine, whose financial profile reflects strong capital and liquidity resources. The companies' A2 IFS ratings incorporate one notch of uplift from their standalone credit profiles. While the one notch of uplift recognizes the benefits of financial support from Tokio Marine, the credit for uplift is tempered by Moody's view that (1) Delphi companies are relatively small compared to Tokio Marine, (2) Delphi companies are niche insurers not necessarily aligned with new parents' product strategy and (3) Delphi will not be fully integrated operationally, structurally or brand-wise for the foreseeable future. Reliance Standard Life Insurance Company Moody's commented that the A2 IFS rating on Reliance Standard reflects -- in addition to the benefit of parental support -- the company's established position in the group employee benefits market. Reliance Standard is well positioned in the small-to- medium size case group employee benefits market and its solid underwriting discipline is demonstrated by its consistently favorable combined ratio for this business. In addition, capitalization is good on a risk-adjusted basis and liquidity is strong. The rating agency added that the company's strong financial profile is partially offset by its modest overall market presence and limited diversification among insurance products and distribution as compared to other A-rated life insurance companies. Safety National Casualty Corporation Moody's commented that Safety National's A2 IFS rating reflects -- in addition to the benefit of parental support -- its presence in the excess workers' compensation market, where the company has a market share of approximately 30%. The company also benefits from a high level of management expertise and experience within its chosen niche, a good earnings track record, and good quality investment portfolio. These strengths are offset by the fundamental characteristics of the excess workers' compensation market, which has a high risk profile owing to its very long loss payout patterns and high degree of volatility in results. Because of the inherent challenge in accurately estimating loss reserves at Safety National, Moody's expects that the company will maintain a significant capital buffer in the form of readily available liquid assets at its parent company, Delphi Financial Group. Delphi Financial Group Moody's stated that the Baa2 senior debt rating of the holding company, Delphi, is notched down from the A2 IFS ratings of its principal operating subsidiaries, Reliance Standard and Safety National, by 3 notches, which is the standard notching treatment. Though the two primary subsidiaries are in differing business lines, Moody's does not give diversification credit to narrow the notching as Moody's believes that the group's excess workers' compensation insurance and group disability insurance have similar business and economic characteristics, and thus could potentially have reasonable levels of correlation, particularly in a tail event. Ratings Drivers Moody's said the following could lead to an upgrade of Delphi's ratings: (1) Tokio Marine provides explicit support for Delphi; (2) upgrade of the IFS rating of Reliance Standard Life Insurance Company, and/or Safety National Casualty Corp. Conversely, the following could lead to a downgrade of Delphi's ratings: (1) reduction in support from Tokio Marine; (2) downgrade of the rating of Tokio Marine and its affiliates; (3) downgrade of the rating of Reliance Standard Life Insurance Company, and/or Safety National Casualty Corp. The following could lead to an upgrade of Reliance Standard's rating: (1) Tokio Marine provides explicit support; (2) NAIC RBC ratio sustained at the 425% level; and (3) significant diversification among lines of business and distribution. The following could lead to a downgrade of Reliance Standard's rating: (1) a reduction in support from Tokio Marine; (2) downgrade of Tokio Marine; (3) NAIC RBC ratio maintained below 300%; (4) return on surplus below 5%. Moody's noted that Safety National's business profile as an excess workers' compensation company somewhat limits its intrinsic rating at the current level, given the mono-line nature of the company, its very long loss payout pattern, and the high severity, low frequency characteristics of its business. However, the following could lead to an upgrade of Safety National's rating: Tokio Marine provides explicit support. The following could lead to a downgrade of Safety National's rating: (1) a reduction in support from Tokio Marine; (2) downgrade of Tokio Marine; (3) gross underwriting leverage greater than 4x; (4) adverse reserve development greater than 7% of prior year reserve; (5) sudden losses amounting to more than 15% of surplus; (6) return on surplus below 5%. The following ratings have been upgraded, with a stable outlook: Delphi Financial Group, Inc. -- senior unsecured debt to Baa2 from Baa3, junior subordinate debt to Baa3(hyb) from Ba1(hyb); provisional senior debt shelf to (P)Baa2 from (P)Baa3; provisional subordinated debt shelf to (P)Baa3 from (P)Ba1; provisional preferred shelf to (P)Ba1 from (P)Ba2; Reliance Standard Life Insurance Company -- insurance financial strength rating to A2 from A3; Safety National Casualty Corp. -- insurance financial strength rating to A2 from A3. Delphi Financial Group, Inc. has its operations headquartered in New York, NY. As of March 31, 2012, it held $9.1 billion in assets and shareholders' equity was $1.9 billion. Reliance Standard Life insurance Co., headquartered in Philadelphia, PA, reported total assets of $4.6 billion and statutory policyholders' surplus of $466 million as of Dec. 31, 2011. Safety National Casualty Corporation, headquartered in St. Louis, MO, reported total assets of $2.9 billion and statutory policyholders' surplus of $844 million as of Dec. 31, 2011. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations. The methodologies used in this rating were Moody's Global Rating Methodology for Property and Casualty Insurers published in May 2010, and Moody's Global Rating Methodology for Life Insurers published in May 2010. DELTA PETROLEUM: Must Try Again to Stop Shareholder Class Suit -------------------------------------------------------------- Stephanie Gleason at Dow Jones' DBR Small Cap reports that a group of Delta Petroleum's securities investors, who say the company's stock traded at artificially high prices, have been given the go- ahead by the bankruptcy court to proceed with a lawsuit against Delta Petroleum's top executives. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports Delta Petroleum Corp. was rebuffed by the bankruptcy judge in the company's first effort at halting a shareholders' class- action lawsuit commenced against officers and directors in April. According to the report, the bankruptcy judge in Delaware found the request procedurally defective. The judge will consider stopping the lawsuit if Delta files a new set of papers in the form of a lawsuit filed in bankruptcy court. The class suit, the report relates, seeks damages from directors and officers on behalf of those who purchased stock between November 2009 and November 2010. The company contends the suit should be stopped because it's a distraction for executives who must devote their energies to the bankruptcy process. Chapter 11 automatically halts lawsuits only against the bankrupt company. To stop suits against non-bankrupt individuals or companies, specific requests must be made to the bankruptcy judge. About Delta Petroleum Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil and gas company engaged primarily in the exploration for, and the acquisition, development, production, and sale of, natural gas and crude oil. Natural gas comprises over 90% of Delta's production services. The core area of its operations is the Rocky Mountain Region of the United States, where the majority of the proved reserves, production and long-term growth prospects are located. Delta and seven of its subsidiaries sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013, inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31, 2012 scheduled maturity of its $38.5 million secured credit facility with Macquarie Bank Limited and after several months of unsuccessful attempts to sell the business. Delta disclosed $375,498,248 in assets and $310,679,157 in liabilities, which also include $152,187,500 in outstanding obligations on account of the 7% senior unsecured notes issued in March 2005 with US Bank National Association indenture trustee; and $115,527,083 in outstanding obligations on account of 3-3/4% Senior Convertible Notes due 2037 issued in April 2007. In its amended schedules, the Delta Petroleum disclosed $373,836,358 in assets and $312,864,788 in liabilities. W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A. Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard & Reed LLP, in New York, N.Y., represent the Debtors as counsel. Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights, Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del., represent the Debtors as co-counsel. Conway Mackenzie is the Debtors' restructuring advisor. Evercore Group L.L.C. is the financial advisor and investment banker. The Debtors selected Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The petition was signed by Carl E. Lakey, chief executive officer and president. The U.S. Trustee told the bankruptcy judge that there was insufficient interest from creditors to form an official committee of unsecured creditors. Laramie Energy II LLC has been approved by the Court to serve as the sponsor for Delta's reorganization plan. DELTATHREE INC: Swings to $542,000 Net Loss in First Quarter ------------------------------------------------------------ deltathree, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $542,000 on $2.84 million of revenue for the three months ended March 31, 2012, compared with net income of $28,000 on $3.78 million of revenue for the same period during the prior year. The Company reported a net loss of $3.05 million in 2011, a net loss of $2.49 million in 2010, and a net loss of $3.19 million in 2009. The Company's balance sheet at March 31, 2012, showed $1.86 million in total assets, $6.80 million in total liabilities and a $4.93 million in total stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/xnqMuw About deltathree Based in New York, deltathree, Inc. (OTC QB: DDDC) -- http://www.deltathree.com/-- is a global provider of video and voice over Internet Protocol (VoIP) telephony services, products, hosted solutions and infrastructures for service providers, resellers and direct consumers. After auditing the 2011 results, Brightman Almagor Zohar & Co., noted that Company's recurring losses from operations and deficiency in stockholders' equity raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning The Company disclosed in its annual report for the period ended Dec. 31, 2011, that in view of its current cash resources, nondiscretionary expenses, debt and near term debt service obligations, the Company may begin to explore all strategic alternatives available to it, including, but not limited to, a sale or merger of the Company, a sale of its assets, recapitalization, partnership, debt or equity financing, voluntary deregistration of its securities, financial reorganization, liquidation or ceasing operations. In the event that it is unable to secure additional funding, the Company may determine that it is in its best interests to voluntarily seek relief under Chapter 11 of the U.S. Bankruptcy Code. Seeking relief under the U.S. Bankruptcy Code, even if the Company is able to emerge quickly from Chapter 11 protection, could have a material adverse effect on the relationships between the Company and its existing and potential customers, employees, and others. Further, if the Company was unable to implement a successful plan of reorganization, the Company might be forced to liquidate under Chapter 7 of the U.S. Bankruptcy Code. DEWEY & LEBOEUF: PBGC OKs Transfer of Warsaw Unit to Greenberg -------------------------------------------------------------- Jennifer Smith, writing for Dow Jones' Daily Bankruptcy Review, reports that pension regulators approved the transfer on Monday of Dewey & LeBoeuf LLP's Warsaw office to Greenberg Traurig LLP. The regulators released Greenberg and other parties from liability for Dewey's pensions, the report says, citing a person familiar with the transaction. DBR also reports Pension Benefit Guaranty Corp. sued Dewey on Monday. The agency gave notice last week that it wanted to take over three of Dewey's pension plans -- the Dewey & LeBouef LLP Cash Balance Retirement Plan, the Dewey & LeBoeuf LLP Pension Plan and the Dewey & LeBoeuf 2007 Partners Cash Balance Plan -- which the agency says are underfunded by $80 million and at risk. DBR, citing court documents and people familiar with the matter, relates PBGC's move to take over Dewey's pensions, which cover 1,776 people, was prompted in part by a phone call with the firm last week. During that call regulators learned the firm planned to sell off two or three affiliates -- most likely overseas offices -- for an estimated $7.2 to $9.7 million. The report notes those entities are not beholden to Dewey's secured lenders, but are partly responsible for funding the pensions. The agency is concerned the sale would make it harder for PBGC to recover money for the shortfall. DBR says a PBGC spokesman declined to comment on whether the entities included the firm's Poland office, which was taken over this week by law firm Greenberg Traurig LLP. The firm was not immediately available for comment. The suit by pension regulators seeks to terminate the three Dewey plans, set May 11 as the official termination date, and appoint PBGC as the plans' trustee. The law firm has 21 days to respond from the time it received the complaint, a PBGC spokesman said. DIALOGIC INC: Tennenbaum Discloses 19.9% Equity Stake ----------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Tennenbaum Capital Partners, LLC, disclosed that, as of May 10, 2012, it beneficially owns 7,356,748 shares of common stock of Dialogic Inc. representing 19.99% of the shares outstanding. Tennenbaum previously reported beneficial ownership of 7,331,398 common shares or a 19.99% equity stake as of April 11, 2012. A copy of the amended filing is available for free at: http://is.gd/NyFr15 About Dialogic Milpitas, Calif.-based Dialogic Inc. provides communications platforms and technology that enable developers and service providers to build and deploy innovative applications without concern for the complexities of the communication medium or network. The Company reported a net loss of $54.81 million in 2011, compared with a net loss of $46.71 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $163.34 million in total assets, $178.77 million in total liabilities and a $15.43 million total stockholders' deficit. Bankruptcy Warning The Company said in its 2011 annual report that in the event of an acceleration of the Company's obligations under the Term Loan Agreement or Revolving Credit Agreement and its failure to pay the amounts that would then become due, the Revolving Credit Lender or Term Lenders could seek to foreclose on the Company's assets. As a result of this, or if the Company's stockholders do not approve the Private Placement and the Notes become due and payable, the Company would likely need to seek protection under the provisions of the U.S. Bankruptcy Code or the Company's affiliates might be required to seek protection under the provisions of applicable bankruptcy codes. In that event, the Company could seek to reorganize its business, or the Company or a trustee appointed by the court could be required to liquidate the Company's assets. DYNEGY INC: Levi & Korsinky Commences Suit for Investors -------------------------------------------------------- Levi & Korsinsky disclosed that a class action lawsuit has been commenced in the United States District Court for the Southern District of New York on behalf of investors who purchased Dynegy Inc. stock between Sept. 2, 2011 and March 9, 2012. The complaint alleges that defendants made materially false and misleading statements and failed to disclose materially adverse information about the Company's business and operations. In particular, the complaint alleges that the Company knew or recklessly failed to inform investors that Dynegy's wholly-owned subsidiary fraudulently transferred direct ownership in one of Dynegy's indirectly owned subsidiaries to the Company. On March 9, 2012, a bankruptcy-court examiner disclosed that Dynegy improperly acquired direct ownership of the indirectly owned subsidiary through a fraudulent transfer. According to an article in The Wall Street Journal, this "asset reshuffling" specifically "benefited billionaire Carl Icahn and other shareholders at the expense of creditors." Upon this news, Dynegy stock fell approximately 35% below the closing price of the previous day. If you suffered a loss in Dynegy you have until May 29, 2012 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as a lead plaintiff. To obtain additional information, contact Joseph E. Levi, Esq. either via email at jlevi@zlk.com or by telephone at (877) 363-5972, or visit http://www.zlk.com. Levi & Korsinsky is a national firm with offices in New York and Washington D.C. The firm has extensive expertise in prosecuting securities litigation involving financial fraud, representing investors throughout the nation in securities and shareholder lawsuits. About Dynegy Inc. Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. In August, Dynegy implemented an internal restructuring that created two units, one owning eight primarily natural gas-fired power generation facilities and another owning six coal-fired plants. Dynegy missed a $43.8 million interest payment Nov. 1, 2011, and said it was discussing options for managing its debt load with certain bondholders. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7 to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion, while Roseton LLC and Dynegy Danskammer LLC each estimated $100 million to $500 million in assets and debt. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. Dynegy was advised by Lazard Freres & Co. LLC and the Debtor Entities' financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors has tapped Akin Gump Strauss Hauer & Feld LLP as counsel nunc pro tunc to November 16, 2011. Bankruptcy Creditors' Service, Inc., publishes DYNEGY BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Dynegy Inc. (http://bankrupt.com/newsstand/or 215/945-7000). EASTMAN KODAK: Sells British Special Effects Business ----------------------------------------------------- Eastman Kodak CO. is selling off Cinesite Ltd. to the special effects company's management team and to private equity firm Endless LLP, according to a report by Democrat and Chronicle. The U.K.-based Cinesite sale joins a growing list of operations which Eastman Kodak has exited since filing for bankruptcy protection, including its Kodak Gallery photo online service, and its digital capture business of point-and-shoot cameras and pocket video cameras. Cinesite has done special effects for such television series as Band of Brothers and Rome and such motion pictures as X-Men: First Class and the Harry Potter series. The British special effects company said its goal now is to expand its service offerings and the territories in which it operates, Democrat and Chronicle reported. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). EASTMAN KODAK: P. Jotwani Resigns as Consumer Business Head ----------------------------------------------------------- Eastman Kodak Company announced that Pradeep Jotwani, President of the Consumer Business, Chief Marketing Officer, and Senior Vice President, will resign from the Company, effective May 31. "We are grateful to Pradeep for his contributions in leading our Consumer Business and our brand management through a period of transformation, and we wish him well in his new endeavors. Even under the circumstances of the last several months, our Consumer Segment has continued to improve performance, and the Kodak brand remains extremely strong," said Antonio M. Perez, Chairman and Chief Executive Officer. Laura Quatela, who was elected President and Chief Operating Officer on January 1, 2012, overseeing the Consumer Business and corporate functions, will assume direct responsibility for leadership of the Consumer Business. The Marketing function has already been realigned along business segment lines to increase efficiency, reporting to Consumer and Commercial, respectively. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). EASTMAN KODAK: Has $366 Million Net Loss in First Quarter --------------------------------------------------------- Eastman Kodak Company said on April 27 that its strategy of focusing on its most profitable businesses and strengthened cost controls resulted in profitability improvements in both of its business segments during the quarter and an increased cash balance at the end of the quarter. Selling, General and Administrative (SG&A) expenses decreased by $84 million compared to the first quarter of 2011, as Kodak reduced its investment in unprofitable business lines and consolidated into two business segments -- Commercial and Consumer. Kodak's liquidity improved, ending the first quarter with a cash balance of $1.4 billion, up $500 million from year- end 2011, as a result of $600 million in net new financing, utilization of the Chapter 11 process, and reduced year-over-year cash usage for continuing operations. "During the quarter, we took decisive steps -- including filing for Chapter 11 and exiting unprofitable businesses -- to accelerate our transformation and emerge in 2013 as a profitable, sustainable business," said Antonio M. Perez, Chairman and Chief Executive Officer. "As a result, during the quarter we saw improved profitability of our Commercial and Consumer business segments. We will continue to exploit our competitive advantage at the intersection of materials science, digital imaging, and deposition technologies. Our commercial and consumer products and services continue to offer unique technologies and market- leading value propositions." "With the support of our valuable suppliers, we continued to serve our customers with the same high-quality products and services that they have come to expect from Kodak. As demonstrated by our performance in the first quarter, Kodak's reorganization is proceeding according to plan. As we move forward, we are continuing to make progress in realizing each of these fundamental objectives in our Chapter 11 filing. We have exceptionally talented and dedicated employees, and I am proud of the way they managed the immediate impact of the filing. I also want to extend appreciation to our customers for their continued loyalty." Kodak noted that since filing for Chapter 11 reorganization in January, the company has bolstered its liquidity, and made good progress in the process of monetizing its non-strategic intellectual property, right-sizing its legacy liabilities, and focusing the company on a core set of businesses that most profitably leverage Kodak's exceptional technology and brand strengths. Kodak's revenue of $965 million in the quarter represented a decline of 27 percent from the same period in the prior year, reflecting the exit of digital cameras, continued secular decline of the traditional businesses, and a $61 million reduction in revenue associated with a tax refund sharing agreement with intellectual property licensees. This reduction is the result of a refund of Korean withholding taxes recorded in the quarter as a $122 million income tax benefit. The Consumer Segment's loss improved by $23 million in the first quarter of 2012 to $164 million from $187 million in the same period in the prior year. Excluding the impact of the Korean tax refund, the Consumer Segment generated an $84 million year-over- year improvement in profitability. Driving this improvement were several factors, including enhanced cost controls, solid revenue growth in the retail systems solutions business driven by higher demand for consumables, a 34% increase in consumer inkjet ink revenues, and the decision to phase out of the digital capture business. The profitability of the Commercial Segment modestly improved, driven by a reduction in operating expenses, with a segment loss of $64 million. The improvement in operating expenses was partially offset by continued decline in the traditional business, price erosion on plates due to industry overcapacity, and the slowdown in industry activity prior to the start of the drupa trade show. On the basis of GAAP, the company reported a first quarter net loss of $366 million compared with a net loss of $246 million from the prior-year quarter. The results reflect the improvement in segment profitability discussed above, reorganization costs associated with the Chapter 11 case, the absence of a gain from an asset sale in the prior-year quarter, and higher restructuring charges, partially offset by the tax benefit from the net impact of the Korean tax refund. Kodak noted that as of March 31, 2012, it was in compliance with all covenants under its lender agreements. "Kodak is focusing on its opportunities, reducing costs, and fine-tuning the balance between liquidity and growth to enable the enterprise to emerge from its Chapter 11 restructuring in 2013 as a leaner, stronger, and sustainable business," Mr. Perez said. A full-text copy of Kodak's First Quarter 2012 Financial Results filed on Form 10-Q with the U.S. Securities and Exchange Commission is available for free at http://is.gd/Y9Tiod Eastman Kodak Company Balance Sheet As of March 31, 2012 ASSETS Current Assets Cash and cash equivalents $1,361,000,000 Receivables, net 968,000,000 Inventories, net 676,000,000 Deferred income taxes 66,000,000 Other current assets 82,000,000 -------------- Total current assets 3,153,000,000 Property, plant and equipment, net of accumulated depreciation of $4,644 and $4,590 844,000,000 Goodwill 278,000,000 Other long-term assets 778,000,000 -------------- TOTAL ASSETS $5,053,000,000 ============== LIABILITIES AND EQUITY (DEFICIT) Current Liabilities Accounts payable, trade $484,000,000 Short-term borrowings and current portion of long-term debt 42,000,000 Accrued income and other taxes 45,000,000 Other current liabilities 1,043,000,000 -------------- Total current liabilities 1,614,000,000 Long-term debt, net of current portion 1,446,000,000 Pension and other postretirement liabilities 1,457,000,000 Other long-term liabilities 408,000,000 Liabilities subject to compromise 2,831,000,000 -------------- Total Liabilities 7,756,000,000 Equity (Deficit) Common stock, $2.50 par value 978,000,000 Additional paid in capital 1,104,000,000 Retained earnings 3,645,000,000 Accumulated other comprehensive loss (2,650,000,000) -------------- 3,077,000,000 Less: Treasury stock, at cost (5,782,000,000) -------------- Total Eastman Kodak Company shareholders' deficit(2,705,000,000) Noncontrolling interests 2,000,000 -------------- Total deficit (2,703,000,000) -------------- TOTAL LIABILITIES AND DEFICIT $5,053,000,000 ============== Eastman Kodak Company Unaudited Consolidated Statement of Operations For the Three Months Ended March 31, 2012 Net Sales Products $841,000,000 Services 182,000,000 Licensing & royalties (58,000,000) -------------- Total net sales 965,000,000 Cost of sales Products 777,000,000 Services 150,000,000 -------------- Total cost of sales 927,000,000 -------------- Gross profit 38,000,000 Selling, general and administrative expenses 227,000,000 Research and development costs 66,000,000 Restructuring costs and other 94,000,000 Other operating expenses (income), net (1,000,000) -------------- Loss from continuing operations before interest expense, other income (charges), net, reorganization items, net and income taxes (348,000,000) Interest expense (contractual interest of $46) 36,000,000 Loss on early extinguishment of debt, net 7,000,000 Other income (charges), net 3,000,000 Reorganization items, net 88,000,000 -------------- Loss from continuing operations before income taxes (476,000,000) Benefit for income taxes (110,000,000) -------------- Loss from continuing operations (366,000,000) Earnings from discontinued operations, net of income taxes -------------- Net Loss Attributable to Eastman Kodak Co. ($366,000,000) ============== Eastman Kodak Company Unaudited Consolidated Statement of Cash Flows For the Three Months Ended March 31, 2012 Cash flows from operating activities: Net loss ($366,000,000) Adjustments to reconcile to net cash used in operating activities: Earnings from discontinued operations, net of income taxes - Depreciation and amortization 66,000,000 Gain on sales of businesses/assets - Loss on early extinguishment of debt 7,000,000 Non-cash restructuring costs, asset impairments and other charges - Provision for deferred income taxes 15,000,000 Decrease in receivables 156,000,000 Increase in inventories (61,000,000) Increase (decrease) in liabilities excluding borrowings 129,000,000 Other items, net (14,000,000) -------------- Total adjustments 298,000,000 Net cash used in continuing operations (68,000,000) -------------- Net cash used in discontinued operations -------------- Net cash used in operating activities (68,000,000) -------------- Cash flows from investing activities: Additions to properties (10,000,000) Proceeds from sales of businesses/assets - Business acquisitions, net of cash acquired - Funding of restricted cash & investment accounts - Marketable securities - sales 28,000,000 Marketable securities - purchases (28,000,000) -------------- Net cash used in investing activities (10,000,000) Cash flows from financing activities: Proceeds from DIP credit agreement 686,000,000 Proceeds from other borrowings - Repayment of other borrowings (119,000,000) Debt issuance costs (33,000,000) Proceeds from sale and leaseback transaction 41,000,000 -------------- Net cash provided by financing activities 575,000,000 -------------- Effect of exchange rate changes on cash 3,000,000 -------------- Net increase (decrease) in cash and cash equivalents 500,000,000 Cash and cash equivalents, beginning of period 861,000,000 -------------- Cash and cash equivalents, end of period $1,361,000,000 ============== About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). EASTMAN KODAK: Court OKs Termination of Orange Barrel Deal ---------------------------------------------------------- The U.S. Bankruptcy Court in Manhattan approved a stipulation calling for the termination of an agreement between Eastman Kodak Co. and Orange Barrel Media. Under the stipulation, Eastman Kodak agreed to pay $120,000 to Orange Barrel for the termination of their agreement reached early last month. The agreement dated April 4 calls for the sale of Eastman Kodak's lease to its giant digital billboard overlooking New York's Times Square. Eastman Kodak chose to terminate the April 4 agreement after it drew opposition from Clear Channel Spectacolor LLC, which submitted a better offer to acquire the lease. A copy of the court-approved stipulation can be accessed for free at http://bankrupt.com/misc/Kodak_StipOBMMay1.pdf About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. A group of second lien lenders are represented by Akin Gump Strauss Hauer & Feld LLP. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Bankruptcy Creditors' Service, Inc., publishes EASTMAN KODAK BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Eastman Kodak and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). EAU TECHNOLOGIES: Incurs $558,000 Net Loss in First Quarter ----------------------------------------------------------- EAU Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $557,995 on $75,694 of net revenues for the three months ended March 31, 2012, compared with a net loss of $700,830 on $630,642 of net revenues for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $2.17 million in total assets, $6.76 million in total liabilities and a $4.58 million total stockholders' deficit. For 2011, HJ & Associates, LLC, in Salt Lake City, Utah, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a working capital deficit as well as a deficit in stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/lUhbU7 About EAU Technologies Kennesaw, Ga.-base EAU Technologies, Inc., is in the business of developing, manufacturing and marketing equipment that uses water electrolysis to create non-toxic cleaning and disinfecting fluids for food safety applications as well as dairy drinking water. EDIETS.COM INC: Incurs $1.1 Million Net Loss in First Quarter ------------------------------------------------------------- eDiets.com, Inc., reported a net loss of $1.07 million on $7.12 million of total revenues for the three months ended March 31, 2012, compared with a net loss of $383,000 on $6.93 million of total revenues for the same period during the prior year. Ediets.com reported a net loss of $4.39 million in 2011, a net loss of $43.27 million in 2010, and a net loss of $12.06 million in 2009. The Company's selected balance sheet data at March 31, 2012, showed $2.29 million in total assets, $1 million in total debt and a $2.28 million stockholders' deficit. "Over the past several months, we have initiated a number of operational and strategic changes, including strengthening our management team, implementing significant cost cutting measures, and introducing a creative marketing strategy that focuses on eDiets' customer testimonials and weight loss results," said Tom Connerty, President and CEO, eDiets.com. "We recognize that a key component of our success is growing our meal delivery customer base, and we are sharpening our focus across all touch points to better serve our customers. We recently began offering new meal delivery packages and food options based on feedback from our customers. In addition, we reenergized our advertising with the launch of our first new commercial in nearly two years and new print and online ad content." A copy of the press release is available for free at: http://is.gd/jNajwP About eDiets eDiets.com, Inc. is a leading provider of personalized nutrition, fitness and weight-loss programs. eDiets currently features its award-winning, fresh-prepared diet meal delivery service as one of the more than 20 popular diet plans sold directly to members on its flagship site, http://www.eDiets.com For 2011, Ernst & Young LLP, in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses, was not able to meet its debt obligations in the current year and has a working capital deficiency. Bankruptcy Warning The Company said in its 2011 annual report that the continuation of its business is dependent upon raising additional financial support. In light of the Company's results of operations, management has and intends to continue to evaluate various possibilities. These possibilities include: raising additional capital through the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt, selling one or more lines of business, or all or a portion of the Company's assets, entering into a business combination, reducing or eliminating operations, liquidating assets, or seeking relief through a filing under the U.S. Bankruptcy Code. These possibilities, to the extent available, may be on terms that result in significant dilution to the Company's existing stockholders or that result in the Company"s existing stockholders losing all of their investment in the Company. EPAZZ INC: Delays Form 10-Q for First Quarter --------------------------------------------- Epazz, Inc., has experienced delays in completing its financial statements for the quarter ended March 31, 2012, as its auditor has not had sufficient time to review the financial statements for the quarter ended March 31, 2012. As a result, the Company is delayed in filing its Form 10-Q for the quarter ended March 31, 2012. About EPAZZ Inc. Chicago, Ill.-based EPAZZ, Inc., was incorporated in the State of Illinois on March 23, 2000, to create software to help college students organize their college information and resources. The idea behind the Company was that if the information and resources provided by colleges and universities was better organized and targeted toward each individual, the students would encounter a personal experience with the college or university that could lead to a lifetime relationship with the institution. This concept is already used by business software designed to retain relationships with clients, employees, vendors and partners. The Company reported a net loss of $336,862 in 2011, compared with net income of $120,785 in 2010. The Company's balance sheet at March 31, 2012, showed $1.03 million in total assets, $1.57 million in total liabilities and a $536,695 total stockholders' deficit. In its report on the financial statements for 2011, Lake & Associates CPA's LLC, in Schaumburg, Illinois, expressed substantial doubt as to the Company's ability to continue as a going concern. The independent auditors noted that the Company has a significant accumulated deficit and continues to incur losses. The Company's viability is dependent upon its ability to obtain future financing and the success of its future operations. Bankruptcy Warning The Company said in its 2011 annual report that it cannot be certain that any financing will be available on acceptable terms, or at all, and the Company's failure to raise capital when needed could limit its ability to continue and expand its business. The Company intends to overcome the circumstances that impact its ability to remain a going concern through a combination of the commencement of additional revenues, of which there can be no assurance, with interim cash flow deficiencies being addressed through additional equity and debt financing. The Company's ability to obtain additional funding for the remainder of the 2012 year and thereafter will determine its ability to continue as a going concern. There can be no assurances that these plans for additional financing will be successful. Failure to secure additional financing in a timely manner to repay the Company's obligations and supply the Company sufficient funds to continue its business operations and on favorable terms if and when needed in the future could have a material adverse effect on its financial performance, results of operations and stock price and require the Company to implement cost reduction initiatives and curtail operations. Furthermore, additional equity financing may be dilutive to the holders of the Company's common stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary to raise additional funds, and may require that the Company relinquish valuable rights. In the event that the Company is unable to repay its current and long-term obligations as they come due, the Company could be forced to curtail or abandon its business operations, or file for bankruptcy protection; the result of which would likely be that the Company's securities would decline in value or become worthless. EPAZZ INC: Swings to $337,000 Net Loss in 2011 ---------------------------------------------- Epazz, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $336,862 on $735,972 of revenue for the year ended Dec. 31, 2011, compared with net income of $120,785 on $705,005 of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $1.03 million in total assets, $1.57 million in total liabilities, and a $537,000 stockholders' deficit. Lake & Associates CPA's LLC, in Schaumburg, Illinois, expressed substantial doubt as to the Company's ability to continue as a going concern. The independent auditors noted that the Company has a significant accumulated deficit and continues to incur losses. The Company's viability is dependent upon its ability to obtain future financing and the success of its future operations. Bankruptcy Warning The Company said in the annual report that it cannot be certain that any such financing will be available on acceptable terms, or at all, and the Company's failure to raise capital when needed could limit its ability to continue and expand its business. The Company intends to overcome the circumstances that impact its ability to remain a going concern through a combination of the commencement of additional revenues, of which there can be no assurance, with interim cash flow deficiencies being addressed through additional equity and debt financing. The Company's ability to obtain additional funding for the remainder of the 2012 year and thereafter will determine its ability to continue as a going concern. There can be no assurances that these plans for additional financing will be successful. Failure to secure additional financing in a timely manner to repay the Company's obligations and supply the Company sufficient funds to continue its business operations and on favorable terms if and when needed in the future could have a material adverse effect on its financial performance, results of operations and stock price and require the Company to implement cost reduction initiatives and curtail operations. Furthermore, additional equity financing may be dilutive to the holders of the Company's common stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary to raise additional funds, and may require that the Company relinquish valuable rights. In the event that the Company is unable to repay its current and long-term obligations as they come due, the Company could be forced to curtail or abandon its business operations, or file for bankruptcy protection; the result of which would likely be that the Company's securities would decline in value or become worthless. A copy of the Form 10-K is available for free at: http://is.gd/JtDJ5R About EPAZZ Inc. Chicago, Ill.-based EPAZZ, Inc., was incorporated in the State of Illinois on March 23, 2000, to create software to help college students organize their college information and resources. The idea behind the Company was that if the information and resources provided by colleges and universities was better organized and targeted toward each individual, the students would encounter a personal experience with the college or university that could lead to a lifetime relationship with the institution. This concept is already used by business software designed to retain relationships with clients, employees, vendors and partners. FIRST BANKS: Files Form 10-Q, Swings to $6.8MM Net Income in Q1 --------------------------------------------------------------- First Banks, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $6.83 million on $52.33 million of total interest income for the three months ended March 31, 2012, compared with a net loss of $6.08 million on $62.16 million of total interest income for the same period during the prior year. First Banks reported a net loss of $44.1 million for the fiscal year ended Dec. 31, 2011, compared with a net loss of $198.3 million for the fiscal year ended Dec. 31, 2010. The Company's balance sheet at March 31, 2012, showed $6.67 billion in total assets, $6.40 million in total liabilities and $275.73 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/NRDqBl About First Banks First Banks, Inc., is a registered bank holding company incorporated in Missouri in 1978 and headquartered in St. Louis, Missouri. The Company operates through its wholly owned subsidiary bank holding company, The San Francisco Company, or SFC, headquartered in St. Louis, Missouri, and SFC's wholly owned subsidiary bank, First Bank, also headquartered in St. Louis, Missouri. FIRST DATA: Files Form 10-Q, Incurs $152.5MM Net Loss in Q1 ----------------------------------------------------------- First Data Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of $152.50 million on $2.56 billion of revenue for the three months ended March 31, 2012, compared with a net loss attributable to the Company of $217.10 million on $2.54 billion of revenue for the same period during the prior year. The Company reported a net loss of $336.10 million in 2011, a net loss of $846.90 million in 2010, and a net loss of $1.01 billion on $9.31 million in 2009. The Company's balance sheet at March 31, 2012, showed $41.42 billion in total assets, $38 billion in total liabilities, $66.20 million in redeemable noncontrolling interest, and $3.34 billion in total equity. A copy of the Form 10-Q is available for free at: http://is.gd/mEbRC4 About First Data Based in Atlanta, Georgia, First Data Corporation, with over $10 billion of revenue for the 12 months ended June 30, 2010, provides commerce and payment solutions for financial institutions, merchants, and other organizations worldwide. * * * The Company's carries a 'B3' corporate family rating, with a stable outlook, from Moody's Investors Service, a 'B' corporate credit rating, with stable outlook, from Standard & Poor's, and a 'B' long-term issuer default rating from Fitch Ratings. FIRST MARINER: Files Form 10-Q, Posts $1.8MM Net Income in Q1 ------------------------------------------------------------- First Mariner Bancorp filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $1.82 million on $11.62 million of total interest income for the three months ended March 31, 2012, compared with a net loss of $7.31 million on $12.18 million of total interest income for the same period during the prior year. The Company reported a net loss of $30.24 million in 2011, a net loss of $46.58 million in 2010, and a net loss of $22.28 million in 2009. The Company's balance sheet at March 31, 2012, showed $1.17 billion in total assets, $1.20 billion in total liabilities and a $22.97 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/x30EM8 About First Mariner Headquartered in Baltimore, Maryland, First Mariner Bancorp -- http://www.1stmarinerbancorp.com/-- is a bank holding company whose business is conducted primarily through its wholly owned operating subsidiary, First Mariner Bank, which is engaged in the general general commercial banking business. First Mariner was established in 1995 and has total assets in excess of $1.3 billion as of Dec. 31, 2010. "Quantitative measures established by regulation to ensure capital adequacy require the [First Mariner] Bank to maintain minimum amounts and ratios of total and Tier I capital to risk-weighted assets, and of Tier I capital to average quarterly assets," the Company said in the filing. "As of March 31, 2011, the Bank was "under-capitalized" under the regulatory framework for prompt corrective action." For the year ended Dec. 31, 2011, Stegman & Company, in Baltimore, Maryland, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company continued to incur significant net losses in 2011, primarily from loan losses and costs associated with real estate acquired through foreclosure. The Company has insufficient capital per regulatory guidelines and has failed to reach capital levels required in the Cease and Desist Order issued by the Federal Deposit Insurance Corporation in September 2009. Bankruptcy Warning As of Dec. 31, 2011, the Bank's and the Company's capital levels were not sufficient to achieve compliance with the higher capital requirements the Company was required to have met by June 30, 2010. The failure to meet and maintain these capital requirements could result in further action by the Company's regulators. In the September Order, the FDIC and the Commissioner directed the Bank to raise its leverage and total risk-based capital ratios to 6.5% and 10%, respectively, by March 31, 2010 and to 7.5% and 11%, respectively, by June 30, 2010. The Company did not meet these requirements. The Company has been in regular communication with the staffs of the FDIC and the Commissioner regarding efforts to satisfy the higher capital requirements. First Mariner currently does not have any material amounts of capital available to invest in the Bank and any further increases to the Company's allowance for loan losses and operating losses would negatively impact the Company's capital levels and make it more difficult to achieve the capital levels directed by the FDIC and the Commissioner. Because the Company has not met all of the capital requirements set forth in the September Order within the prescribed timeframes, the FDIC and the Commissioner could take additional enforcement action against the Company, including the imposition of monetary penalties, as well as further operating restrictions. The FDIC or the Commissioner could direct us to seek a merger partner or possibly place the Bank in receivership. If the Bank is placed into receivership, the Company would cease operations and liquidate or seek bankruptcy protection. If the Company were to liquidate or seek bankruptcy protection, First Mariner does not believe that there would be assets available to holders of the capital stock of the Company. FIRST SECURITY: Incurs $5.8 Million Net Loss in First Quarter ------------------------------------------------------------- First Security Group Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $5.82 million on $9.68 million of total interest income for the three months ended March 31, 2012, compared with a net loss of $2.65 million on $11.50 million of total interest income for the same period a year ago. The Company reported a net loss of $23.06 million in 2011, a net loss of $44.34 million in 2010, and a net loss of $33.45 million in 2009. The Company's balance sheet at March 31, 2012, showed $1.13 billion in total assets, $1.06 billion in total liabilities and $61.83 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/wkv1dg About First Security Group First Security Group, Inc., is a bank holding company headquartered in Chattanooga, Tennessee, with $1.2 billion in assets as of Sept. 30, 2010. Founded in 1999, First Security's community bank subsidiary, FSGBank, N.A., has 37 full- service banking offices, including the headquarters, along the interstate corridors of eastern and middle Tennessee and northern Georgia and 325 full-time equivalent employees. In Dalton, Georgia, FSGBank operates under the name of Dalton Whitfield Bank; along the Interstate 40 corridor in Tennessee, FSGBank operates under the name of Jackson Bank & Trust. For 2011, Joseph Decosimo and Company, PLLC, in Chattanooga, Tennessee, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has recently incurred substantial losses. The Company is also operating under formal supervisory agreements with the Federal Reserve Bank of Atlanta and the Office of the Comptroller of the Currency and is not in compliance with all provisions of the Agreements. Failure to achieve all of the Agreements' requirements may lead to additional regulatory actions. FNB UNITED: Incurs $10.8 Million Net Loss in First Quarter ---------------------------------------------------------- FNB United Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $10.85 million on $19.99 million of total interest income for the three months ended March 31, 2012, compared with a net loss of $43.70 million on $15.46 million of total interest income for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $2.38 billion in total assets, $2.26 billion in total liabilities, and $117.97 million in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/YlLhGQ About FNB United Asheboro, N.C.-based FNB United Corp. (Nasdaq:FNBN) is the bank holding company for CommunityOne Bank, N.A., and the bank's subsidiary, Dover Mortgage Company. Opened in 1907, CommunityOne Bank -- http://www.MyYesBank.com/-- operates 45 offices in 38 communities throughout central, southern and western North Carolina. Through these subsidiaries, FNB United offers a complete line of consumer, mortgage and business banking services, including loan, deposit, cash management, wealth management and internet banking services. FNB United reported a net loss of $137.31 million in 2011, a net loss of $131.82 million in 2010, and a net loss of $101.69 million in 2009. FNB UNITED: Amends $60 Million Shares Offering Prospectus --------------------------------------------------------- FNB United Corp. filed with the U.S. Securities and Exchange Commission amendment no.1 to Form S-3 relating to the offer and sale of up to $60,000,000 of shares of common stock, warrants, and rights of FNB United Corp. The Company's common stock is traded on The Nasdaq Capital Market, or Nasdaq, under the symbol "FNBN." The closing sales price of the Company's common stock on the Nasdaq Stock Market on May 14, 2012 was $17.34 per share. A copy of the amended prospectus is available for free at: http://is.gd/NAzUuM About FNB United Asheboro, N.C.-based FNB United Corp. (Nasdaq:FNBN) is the bank holding company for CommunityOne Bank, N.A., and the bank's subsidiary, Dover Mortgage Company. Opened in 1907, CommunityOne Bank -- http://www.MyYesBank.com/-- operates 45 offices in 38 communities throughout central, southern and western North Carolina. Through these subsidiaries, FNB United offers a complete line of consumer, mortgage and business banking services, including loan, deposit, cash management, wealth management and internet banking services. FNB United reported a net loss of $137.31 million in 2011, a net loss of $131.82 million in 2010, and a net loss of $101.69 million in 2009. The Company's balance sheet at March 31, 2012, showed $2.38 billion in total assets, $2.26 billion in total liabilities and $117.97 million in total shareholders' equity. GENCORP INC: Moody's Affirms 'B1' CFR; Outlook Positive ------------------------------------------------------- Moody's Investors Services affirmed the B1 corporate family rating and the subordinated note ratings of GenCorp Inc. Separately, Moody's changed GenCorp's ratings outlook to positive from stable. The positive outlook reflects the company's announced call of its $75 million of 9. 5% Subordinated Notes, to be funded through cash on hand (about $200 million as of February 29, 2012). Once completed, the call will reduce the company's funded debt by about 25% and bring key credit metrics to levels at the strong end of the rating category. As well, Moody's anticipates GenCorp to maintain a good liquidity profile post-closing of the call - because the company will maintain cash levels at about half of its funded debt. Ratings Rationale The call of the $75 million notes -- anticipated to complete on May 23, 2012 -- will reduce GenCorp's funded debt by about 25%. Post-redemption, Moody's expects Debt-to-EBITDA of about 4.4 times, using Moody's standard accounting adjustments -- consistent with the rating category. Moody's anticipates continued top-line growth during fiscal 2012 -- sales having grown +15% cumulatively since Fiscal 2009 -- because of GenCorp's position as a key supplier on multiple long-lived Department of Defense ("DoD") programs that are prioritized by the DoD in its current Future Years Defense Plan (published in February 2012). Combined with some cost structure enhancements, Moody's expects earnings and internally-generated cash flows to grow over the forward 12-month period -- which should sustain GenCorp's key credit metrics (EBIT- to-Interest, Free Cash Flow-to-Debt) at the high end of the B1 rating category. Moody's anticipates positive free cash flows for the current fiscal year (ending November 30, 2012), despite some near-term increases to capital spending to support internal systems enhancements. The improving trajectory of operating results and reduction to funded debt, along with GenCorp's large position on key DoD contracts for Missile Defense and Space and Launch Systems and established record as a supplier to large prime contractors (particularly Raytheon and Lockheed Martin, collectively about two-thirds of sales) supports the positive ratings outlook. The B1 Corporate Family Rating reflects GenCorp's improving financial performance as a key niche supplier of solid and liquid propulsion systems with a large funded backlog (now about 100% of sales). GenCorp supplies many long-lived (Standard Missile 3, Patriot Advanced Capability) contracts as well as more recent programs (THAAD), and is a sole-source supplier for many DoD contracts. Moody's expects a favorable earnings environment for GenCorp over the intermediate term - notwithstanding the current pressures on U.S. defense budgets. GenCorp's technical capabilities and specialized infrastructure provides some barriers to entry to its products, which have a limited number of competitors (mainly Alliant Techsystems and RocketDyne, a unit of United Technologies). GenCorp's ratings could be upgraded should the company sustain improvements to operating performance and cash flow generation, such that Debt-to-EBITDA approximates 4.0 times and Retained Cash Flow-to-Debt approaches 15% (both using Moody's standard accounting adjustments). Continued growth in the contract backlog and GenCorp's key programs would be necessary for any ratings upgrade. Though it is not likely given current market conditions and the company's performance, a downward revision in the outlook and/or rating would likely occur if the company earnings declined such that Debt-to-EBITDA was sustained above 5.0 times (using Moody's standard accounting adjustments), the company generates negative free cash flows for a prolonged period, and/or if GenCorp's liquidity profile were to deteriorate substantially from current levels. The principal methodology used in rating GenCorp Inc. was the Global Aerospace and Defense Industry Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. GenCorp Inc., through its Aerojet-General Corporation subsidiary, produces propulsion systems for defense and space applications and armament systems for precision tactical weapon systems. GENERAL MARITIME: Completes Restructuring, Emerges From Chapter 11 ------------------------------------------------------------------ General Maritime Corporation has successfully completed its financial restructuring and has emerged from Chapter 11 of the U.S. Bankruptcy Code. Through the restructuring process, General Maritime substantially deleveraged its balance sheet, positioning the reorganized Company to be a financially stronger global enterprise. General Maritime successfully reduced its outstanding debt by approximately $600 million and its cash interest expense by approximately $42 million annually. In addition, the Company received a new capital infusion of $175 million from investment entities affiliated with Oaktree Capital Management, L.P. Jeffrey D. Pribor, General Maritime's Chief Financial Officer, said, "Today marks the successful completion of our financial restructuring and the start of a new chapter for our Company. With enhanced financial flexibility, we are moving forward as a stronger and more competitive company, better equipped to address the challenges of today's tanker shipping market. General Maritime will continue to operate one of the world's largest and most diverse fleets of tankers and is committed to safely and efficiently providing seaborne oil transportation services. I also thank our employees around the world, whose hard work and loyalty have been instrumental in enabling us to reach this achievement and who will be important contributors to our future success." Kramer Levin Naftalis & Frankel LLP is serving as the Company's legal advisor, and Moelis & Company is serving as the Company's financial advisor. The Chapter 11 Plan The Plan reflects the terms of a global settlement among the Company's main creditor constituencies that, among other things, provides for a meaningful recovery to the unsecured creditors of the Debtors and resolves all disputes on plan-related issues between and among the Debtors, funds managed by Oaktree Capital Management, L.P. and their investment entities, the Official Committee of Unsecured Creditors, the Company's senior secured lenders, and holders of more than 57% of the Company's Senior Notes. All voting classes of creditors voted in favor of the Plan, with the Debtors' senior secured lenders voting unanimously in favor of the Plan and approximately 97% in amount and 69% in number of general unsecured creditors voting in favor of the Plan. Under the Plan, holders of unsecured claims against the Company and its Debtor subsidiaries that guarantee the Company's obligations under its secured credit facilities will share in $6 million in cash, warrants exercisable for up to three percent of the equity in the reorganized Company, and two percent of the equity in the reorganized Company. The Plan provides that the Debtors' prepetition senior lenders will receive a $75 million paydown of their existing prepetition obligations and provide exit financing to the Debtors. Funds managed by Oaktree Capital Management will receive 98% of the equity in the reorganized Company for the $175 million equity capital infusion and the conversion of $175 million of secured claims against the Company. The common stock of the Company will be extinguished under the Plan and holders of the Company's common stock will not receive a distribution under the Plan. According to Bloomberg's Bill Rochelle, impediments to confirmation were resolved with a settlement sweetening the pot for unsecured creditors. The plan gives them $6 million in cash, 25 of the new stock, and warrants for another 3%, for a predicted 5.41% recovery. Before enhancement, the unsecured creditors' committee was opposing the plan and the maximum 1.88% it was then offering. About General Maritime New York-based General Maritime Corporation, through its subsidiaries, provides international transportation services of seaborne crude oil and petroleum products. The Company's fleet is comprised of VLCC, Suezmax, Aframax, Panamax and product carrier vessels. The fleet consisted of 30 owned vessels and three chartered vessels. The company generates substantially all of its revenues by chartering its fleet to third-party customers. The largest customers include major international oil companies, oil producers, and oil traders such as BP, Chevron Corporation, CITGO Petroleum Corp., ConocoPhillips, Exxon Mobil Corporation, Hess Corporation, Lukoil Oil Company, Stena AB, and Trafigura. General Maritime and 56 subsidiaries filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-15285) on Nov. 17, 2011. Douglas Mannal, Esq., and Adam C. Rogoff, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, serve as counsel to the Debtors. Moelis & Company is the financial advisor. Garden City Group Inc. is the claims and notice agent. Prepetition, General Maritime reached agreements with its key senior lenders, including its bank group, led by Nordea Bank Finland plc, New York Branch as administrative agent, as well as affiliates of Oaktree Capital Management, L.P., on the terms of a restructuring. Under terms of the agreements, Oaktree will provide a $175 million new equity investment in General Maritime and convert its prepetition secured debt to equity. In conjunction with the filing, General Maritime has received a commitment for up to $100 million in new DIP financing from a group of lenders led by Nordea as administrative agent. Counsel for Nordea, as the DIP Agent and the Senior Agent, are Thomas E. Lauria, Esq., and Scott Greissman, Esq., at White & Case LLP. Counsel for Oaktree Capital Management, the Junior Agent, are Edward Sassower, Esq., and Brian Schartz, Esq., at Kirkland & Ellis, LLP. The Official Committee of Unsecured Creditors appointed in the case has retained lawyers at Jones Day as Chapter 11 counsel. Jones Day previously represented an ad hoc group of holders of the 12% Senior Notes due 2017 issued by General Maritime Corp. This representation began Sept. 20, 2011, and concluded Nov. 29, 2011, with the agreement of all members of the Noteholders Committee. The Creditors Committee also tapped Lowenstein Sandler PC as special conflicts counsel. The Noteholders Committee consisted of Capital Research and Management Company, J.P. Morgan Investment Management, Inc., J.P. Morgan Securities LLC, Stone Harbor Investment Partners LP and Third Avenue Focused Credit Fund. The Creditors Committee is comprised of Bank of New York Mellon Corporate Trust, Stone Harbor Investment Partners, Delos Investment Management, and Ultramar Agencia Maritima Ltda. GENMED HOLDING: Delays Form 10-Q for First Quarter -------------------------------------------------- Genmed Holding Corp. informed the U.S. Securities and Exchange Commission that it will be late in filing its quarterly report on Form 10-Q for the period ended March 31, 2012. The Company said the compilation, dissemination and review of the information required to be presented in the form 10-Q for the relevant quarter has imposed time constraints that have rendered timely filing of the Form 10-Q impracticable without undue hardship and expense to the Company. The Company undertakes the responsibility to file that quarterly report no later than 5th calendar day after its original date. About Genmed Holding Based in The Netherlands, Genmed Holding Corp. through its wholly owned Dutch subsidiary Genmed B.V. is focusing on the delivery of low cost generic medicines directly to distribution chains throughout Europe. Generic medicines, which become available when the originator medicines patents has expired, are, due to continuing governmental pressure and new insurance policies, increasingly used as equally effective alternatives to higher- priced originator pharmaceuticals by general practitioners, specialists and hospitals. The Company reported a net loss of $5.44 million on $0 of net sales in 2011, compared with a net loss of $7.72 million on $0 of net sales in 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.03 million in total assets, $2.65 million in total liabilities and a $1.61 million total stockholders' deficit. In its report on the 2011 financial statements, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt as to the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred a series of net losses resulting in negative cash flow from operations during the year ended Dec. 31, 2011. GENTA INC: Reports $5.2 Million Net Income in First Quarter ----------------------------------------------------------- Genta Incorporated filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $5.23 million on $4,000 of net product sales for the three months ended March 31, 2012, compared with net income of $513,000 on $53,000 of net product sales for the same period during the prior year. The Company reported a net loss of $69.42 million in 2011, compared with a net loss of $167.30 million during the prior year. The Company's balance sheet at March 31, 2012, showed $4.56 million in total assets, $34.74 million in total liabilities and a $30.17 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/t1S9Af About Genta Incorporated Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB: GNTA) -- http://www.genta.com/-- is a biopharmaceutical company engaged in pharmaceutical (drug) research and development. The Company is dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. In its report on the financial statements for 2011, EisnerAmper LLP, in Edison, New Jersey, noted that the Company's recurring losses from operations and negative cash flows from operations and current maturities of convertible notes payable raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning According to the Form 10-K for the year ended Dec. 31, 2011, the Company in September 2011, issued $12.7 million of units, consisting of $4.2 million of senior secured convertible notes and $8.5 million of senior secured cash collateralized convertible notes. In connection with the sale of the units, the Company also issued two types of debt warrants in an amount equal to 100% of the purchase price for each unit. The Company had direct access to $4.2 million of the proceeds, and the remaining $8.5 million of the proceeds were placed in a blocked account as collateral security for the $8.5 million senior secured cash collateralized convertible notes. Presently, with no further financing, the Company projects that it will run out of funds during the first quarter of 2012. The Company currently does not have any additional financing in place. If it is unable to raise additional funds, the Company could be required to reduce its spending plans, reduce its workforce, license one or more of its products or technologies that it would otherwise seek to commercialize itself, sell some or all of its assets, cease operations or even declare bankruptcy. There can be no assurance that the Company can obtain financing, if at all, or raise those additional funds, on terms acceptable to it. GLOBAL AVIATION: Wants Plan Filing Period Extended to Dec. 1 ------------------------------------------------------------- Global Aviation Holdings Inc., et al., ask the U.S. Bankruptcy Court for the Eastern District of New York to extend the exclusive period to file a Chapter 11 plan for each Debtor through and including Dec. 1, 2012, and the exclusive period to solicit acceptances of a Chapter 11 plan of each Debtor through and including Jan. 30, 2013. A hearing on the request is scheduled for May 30. The Debtors say that they are making significant progress in their restructuring efforts. To date, the Debtors have stabilized the business, accessed liquidity, reduced headcount, and substantially rationalized their fleet. Currently, the Debtors are engaged in negotiations with three unions over necessary modifications to four collective bargaining agreements. Once this step is complete, through negotiation or (if necessary) litigation, the Debtors will turn to the development of a plan of reorganization and securing exit financing. These remaining steps require more time. The Debtors' businesses have performed according to expectations during these Chapter 11 cases to date. "However, the future of the Debtors depends on their ability to create a competitive, sustainable cost structure, and to be able to operate with the efficiency and flexibility required by the Debtors' business plan. That will not and cannot occur without substantial modifications to the Debtors' CBAs. The Debtors have made proposals for the CBA modifications that are necessary for a successful reorganization, and are in the midst of good faith negotiations that the Debtors hope will end in consensual modifications. If they do not, the Debtors will have no choice but to file a motion pursuant to section 1113 of the Bankruptcy Code," the Debtors say. According to the Debtors, finalizing their labor savings is critical to exiting Chapter 11. The Debtors assure the Court that no party will be harmed by giving the Debtors additional time to pursue these labor savings, preferably by consensual agreement. With the Debtors' initial 120-day exclusive period to file a Chapter 11 plan set to expire on June 4, 2012, the Debtors now seek a 180-day extension of the Exclusive Periods to ensure that additional time is available to provide the Debtors' efforts with an opportunity to succeed. During the coming weeks and months, the Debtors will work to complete their labor cost savings efforts. The Debtors will continue to analyze their operations to maximize the value of the Debtors' estates during an extension of the Exclusive Periods. Once the Debtors' labor savings are finalized, the Debtors will be able to determine the path forward to emerge from Chapter 11. The Debtors' large and complex Chapter 11 cases warrant extending the Exclusive Periods. As of the Commencement Date, the Debtors' outstanding long-term debt obligations were in the aggregate principal amount of approximately $245 million. The Debtors estimated that their trade creditors had outstanding prepetition claims of approximately $109.1 million. Moreover, the Debtors employ approximately 1,500 employees, serving 140 airports in over 100 countries across six continents. The Debtors, through their two airlines, are the largest commercial provider of air transportation for the United States Military. The nature of the Debtors' business with the United States Military adds another layer of complexity. Even before the Commencement Date, the Debtors conducted meetings with the Defense Security Service to ensure that its facilities clearance would not be terminated upon the commencement of these Chapter 11 cases. Facilities clearance can take months to receive approval and has been revoked in other instances upon a company commencing a Chapter 11 case. Maintaining the facilities clearance over the course of the Debtors' bankruptcy and upon emergence is essential to the Debtors' reorganization plan prospects. In the ordinary course of their business, the Debtors have been paying their undisputed postpetition bills as they become due. Funded with their postpetition financing facility, the payment by the United States of prepetition receivables and revenue received from operating activities, the Debtors will continue to pay their bills on time throughout these Chapter 11 cases. About Global Aviation Holdings Global Aviation Holdings Inc., based in Peachtree City, Ga., is the parent company of North American Airlines and World Airways. Global is the largest commercial provider of charter air transportation for the U.S. military, and a major provider of worldwide commercial global passenger and cargo air transportation services. North American Airlines, founded in 1989 and based in Jamaica, N.Y., operates passenger charter flights using B757-200ER and B767-300ER aircraft. World Airways, founded in 1948 and based in Peachtree City, Ga., operates cargo and passenger charter flights using B747-400 and MD-11 aircraft. Global Aviation, along with affiliates, filed Chapter 11 petitions (Bankr. E.D.N.Y. Case No. 12-40783) on Feb. 5, 2012. Global's lead counsel in connection with the restructuring is Kirkland & Ellis LLP and its financial advisor is Rothschild. Kurtzman Carson Consultants LLC is the claims agent. The Debtors disclosed $589.8 million in assets and $493.2 million in liabilities as of Dec. 31, 2011. Liabilities include $146.5 million on 14% first-lien secured notes and $98.1 million on a second-lien term loan. Wells Fargo Bank NA is agent for both. Global said it will use Chapter 11 to shed 16 of 30 aircraft. In addition, Global said it will use Chapter 11 to negotiate new collective bargaining agreements with its unions and deal with liabilities on multi-employer pension plans. On Feb. 13, 2012, the U.S. Trustee for Region 2 appointed a seven member official committee of unsecured creditors in the case. The Committee tapped Lowenstein Sandler PC as its counsel, and Imperial Capital, LLC as its financial advisor. Lowenstein Sandler PC serves as the Official Committee of Unsecured Creditors' counsel. GLOBAL AVIATION: Imperial Capital Ok'd as Committee Fin'l Advisor ----------------------------------------------------------------- The Hon. Carla E. Craig of the U.S. Bankruptcy Court for the Eastern District of New York granted permission to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Global Aviation Holdings Inc., et al., to retain of Imperial Capital, LLC, as its financial advisor. Imperial will provide, among other things, analysis of the Debtors' businesses, operations, properties, financial condition, competition, forecast, prospects and management. About Global Aviation Holdings Global Aviation Holdings Inc., based in Peachtree City, Ga., is the parent company of North American Airlines and World Airways. Global is the largest commercial provider of charter air transportation for the U.S. military, and a major provider of worldwide commercial global passenger and cargo air transportation services. North American Airlines, founded in 1989 and based in Jamaica, N.Y., operates passenger charter flights using B757-200ER and B767-300ER aircraft. World Airways, founded in 1948 and based in Peachtree City, Ga., operates cargo and passenger charter flights using B747-400 and MD-11 aircraft. Global Aviation, along with affiliates, filed Chapter 11 petitions (Bankr. E.D.N.Y. Case No. 12-40783) on Feb. 5, 2012. Global's lead counsel in connection with the restructuring is Kirkland & Ellis LLP and its financial advisor is Rothschild. Kurtzman Carson Consultants LLC is the claims agent. The Debtors disclosed $589.8 million in assets and $493.2 million in liabilities as of Dec. 31, 2011. Liabilities include $146.5 million on 14% first-lien secured notes and $98.1 million on a second-lien term loan. Wells Fargo Bank NA is agent for both. Global said it will use Chapter 11 to shed 16 of 30 aircraft. In addition, Global said it will use Chapter 11 to negotiate new collective bargaining agreements with its unions and deal with liabilities on multi-employer pension plans. On Feb. 13, 2012, the U.S. Trustee for Region 2 appointed a seven member official committee of unsecured creditors in the case. The Committee tapped Lowenstein Sandler PC as its counsel, and Imperial Capital, LLC as its financial advisor. Lowenstein Sandler PC serves as the Official Committee of Unsecured Creditors' counsel. GLOBAL AVIATION: Wants Sept. 2 Deadline to Decide on Leases ----------------------------------------------------------- Global Aviation Holdings Inc., et al., ask the U.S. Bankruptcy Court for the Eastern District of New York to extend by 90 days, or until Sept. 2, 2012, the time to assume or reject unexpired leases of nonresidential real property. The Debtors' operations are based in two locations: (1) Peachtree City, Georgia (World Airways), and (2) JFK International Airport in Jamaica, New York (North American Airlines). At each location, the Debtors lease the facilities in which they operate. The Debtors serve approximately 140 airports in over 100 countries across six continents. At several of these airports, the Debtors lease small offices or warehouses to provide operational and maintenance support for their fleet and employees. Certain of the Debtors are lessees or sublessees under approximately 14 unexpired leases and subleases of nonresidential real property. The current 120-day period to decide on the leases expires on June 4, 2012. Unless the Assumption/Rejection Deadline is extended, the Debtors will be required to make decisions concerning the Unexpired Leases by the first business day of next month. The Debtors' failure to take any action to assume or reject the Unexpired Leases or obtain an extension of the Assumption/Rejection Deadline would result in the Unexpired Leases being deemed rejected. The Debtors tell the Court that they are making significant progress in these Chapter 11 cases. Since the Commencement Date, the Debtors stabilized their business operations, secured postpetition financing to provide them the liquidity they need to operate during their restructuring efforts, and reduced their fleet. A substantial portion of the Debtors' efforts since the Commencement Date have been concentrated on their complex relationship with the Department of Defense as an essential customer and supplier. The Debtors' next step will be to reduce their labor costs, which reductions will occur either consensually through continued negotiations with their unions or in connection with litigation under section 1113 of the Bankruptcy Code. Once the issues with the unions are resolved, the Debtors will be able to determine the path forward to emerge from Chapter 11. The Debtors are evaluating the Unexpired Leases (and have already sought to reject at least one lease not necessary to their operations). The Debtors need additional time to evaluate the Unexpired Leases in the context of implementing their long-term business and restructuring plan. About Global Aviation Holdings Global Aviation Holdings Inc., based in Peachtree City, Ga., is the parent company of North American Airlines and World Airways. Global is the largest commercial provider of charter air transportation for the U.S. military, and a major provider of worldwide commercial global passenger and cargo air transportation services. North American Airlines, founded in 1989 and based in Jamaica, N.Y., operates passenger charter flights using B757-200ER and B767-300ER aircraft. World Airways, founded in 1948 and based in Peachtree City, Ga., operates cargo and passenger charter flights using B747-400 and MD-11 aircraft. Global Aviation, along with affiliates, filed Chapter 11 petitions (Bankr. E.D.N.Y. Case No. 12-40783) on Feb. 5, 2012. Global's lead counsel in connection with the restructuring is Kirkland & Ellis LLP and its financial advisor is Rothschild. Kurtzman Carson Consultants LLC is the claims agent. The Debtors disclosed $589.8 million in assets and $493.2 million in liabilities as of Dec. 31, 2011. Liabilities include $146.5 million on 14% first-lien secured notes and $98.1 million on a second-lien term loan. Wells Fargo Bank NA is agent for both. Global said it will use Chapter 11 to shed 16 of 30 aircraft. In addition, Global said it will use Chapter 11 to negotiate new collective bargaining agreements with its unions and deal with liabilities on multi-employer pension plans. On Feb. 13, 2012, the U.S. Trustee for Region 2 appointed a seven member official committee of unsecured creditors in the case. The Committee tapped Lowenstein Sandler PC as its counsel, and Imperial Capital, LLC as its financial advisor. Lowenstein Sandler PC serves as the Official Committee of Unsecured Creditors' counsel. GLOBAL BRASS: Moody's Rates New $375MM Sr. Secured Notes 'B3' ------------------------------------------------------------- Moody's Investors Service affirmed Global Brass and Copper, Inc.'s B2 Corporate Family Rating and B2 Probability of Default Rating. In a related rating action, Moody's assigned a B3 rating to the company's proposed $375 million Senior Secured Notes due 2019. These actions result from the company's recent announcement that it is refinancing its entire capital structure. The rating outlook is positive. GBC is refinancing its capital structure with a $200 million senior secured asset-based revolving credit facility maturing in 2017 and $375 million Senior Secured Notes due 2019. Proceeds from the Notes due 2019, along with combined cash on hand and revolver borrowings of approximately $52 million, will be used to distribute a dividend to the affiliates of KPS Capital Partners, to redeem the company's existing $266.5 million (originally $315 million) term loan maturing August 2015, and to pay related fees and expenses. The rating assigned to the term loan maturing August 2015 will be withdrawn once it is fully redeemed. The following ratings/assessments were affected by this action: Corporate Family Rating affirmed at B2; Probability Default Rating affirmed at B2; and, Proposed Sr. Sec. Notes due 2019 assigned B3 (LGD4, 68%). Ratings Rationale GBC's B2 Corporate Family Rating reflects its exposure to cyclical end markets and tough competition. Its metal conversion model limits its risk to metal price volatility, but the company's performance is very sensitive to sales volumes. Also, the company will have a more leveraged capital structure due to the proposed debt-financed dividend, which Moody's views as modest since it represents about 3.5 times of GBC's FY11 free cash flow. Moody's estimates that on a pro forma basis for the last 12 months through March 31, 2012 that debt-to-EBITDA will worsen to about 3.5 times and debt-to-book capitalization will exceed 100%. Despite the increase in total adjusted debt, interest coverage is estimated to remain around 3.0 times (all ratios incorporate Moody's standard adjustments). The anticipated rate for the proposed notes will be lower than the rate for the term loan, which will be repaid. However, Moody's recognizes the company's broad range of products and end markets as strengths. GBC manufactures an extensive array of brass and copper products, ranging from casings for small caliber ammunition to components for the electronics industry. Furthermore, the company sells into a wide range of end markets including defense, automotive, building and households, machinery and transportation and electronics. The change in rating outlook to positive from stable reflects expectations that the company's operations will improve, resulting in better credit metrics. Also, Moody's anticipates consistent free cash flows, which will be applied to reducing borrowings under the revolving credit facility. The positive outlook is also supported by a better post-refinancing liquidity profile, as GBC's revolving credit facility, which will have to meet only a springing fixed charge coverage ratio, will be upsized to $200 million from $150 million and its nearest maturity will be extended to 2017. The B3 rating assigned to the proposed Sr. Sec. Notes due 2019 reflects its position as the most junior committed debt in GBC's capital structure, as well as the net commitment increase of $108.5 million between the proposed $375 million notes and existing $266.5 million term loan. The increase in the commitment of the proposed senior secured asset-based revolving credit facility is providing downward pressure on the secured notes ratings as well. A rating upgrade is possible if GBC's operating performance results in EBITA-to-interest expense sustained above 3.5 times and free cash flow-to-debt staying above 5.0% (all ratios incorporate Moody's standard adjustments). Reducing the borrowings under the revolving credit facility would also be supportive of favorable ratings movement. A rating downgrade could ensue if GBC's financial performance deteriorates due to an unexpected decline in the company's end markets. Debt-to-EBITDA trending towards 6.0 times or EBITA-to- interest expense nearing 2.0 times (all ratios incorporate Moody's standard adjustments) could pressure the ratings. Deterioration in the company's liquidity profile could negatively impact the ratings as well. The principal methodology used in rating GBC was the Global Manufacturing Industry Methodology, published December 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Global Brass and Copper, Inc., headquartered in Schaumburg, IL, is North America's leading manufacturer and distributor of copper and brass products, operating through three businesses - Olin Brass, Chase Brass, and A.J. Oster. KPS Capital Partners, through its affiliates, is the primary owner of GBC. Revenues for the twelve months through March 31, 2012 totaled about $1.7 billion. GLOBAL SHIP: Reports $7.9 Million Net Income in First Quarter ------------------------------------------------------------- Global Ship Lease, Inc., reported net income of US$7.95 million on US$38.35 million of time charter revenue for the three months ended March 31, 2012, compared with net income of US$10.83 million on US$39.10 million of time charter revenue for the same period a year ago. The Company's balance sheet at March 31, 2012, showed US$937.52 million in total assets, US$595.25 million in total liabilities and US$342.26 million in total stockholders' equity. Ian Webber, Chief Executive Officer of Global Ship Lease, stated, "We continued to generate strong financial results and achieve high utilization levels during the first quarter of 2012, as our entire fleet remained secured on long-term fixed rate charters. During a time in which we completed three of seven scheduled drydockings for 2012, we achieved EBITDA of $25.2 million and utilization of 97%. Despite continuing macro-economic uncertainty, a welcome positive development in our industry has been the recent successful implementation by the liner companies of freight rate increases. Global Ship Lease remains well positioned for long-term success as our fleet has a weighted average remaining lease term of 8.1 years with a contracted revenue stream of $1.2 billion." A copy of the press release is available for free at: http://is.gd/cmQ58B About Global Ship Lease London, England-based Global Ship Lease (NYSE: GSL, GSL.U and GSL.WS) -- http://www.globalshiplease.com/-- is a containership charter owner. Incorporated in the Marshall Islands, Global Ship Lease commenced operations in December 2007 with a business of owning and chartering out containerships under long-term, fixed rate charters to world class container liner companies. Global Ship Lease owns 17 vessels with a total capacity of 66,297 TEU with a weighted average age at June 30, 2010, of 6.3 years. All of the current vessels are fixed on long-term charters to CMA CGM with an average remaining term of 8.6 years. The Company has contracts in place to purchase two 4,250 TEU newbuildings from German interests for approximately $77 million each that are scheduled to be delivered in the fourth quarter of 2010. The Company also has agreements to charter out these newbuildings to Zim Integrated Shipping Services Limited for seven or eight years at charterer's option. As reported in the Dec. 1, 2012 edition of the TCR, Global Ship Lease disclosed that it had entered into an agreement with its lenders to waive until Nov. 30, 2012 the requirement under its credit facility to conduct loan-to-value tests. The credit facility requires that loan-to-value, which is the ratio of outstanding borrowings under the credit facility to the aggregate charter-free market value of the secured vessels, cannot exceed 75%. GMAC MORTGAGE: Master Servicer Rating Cut on ResCap Bankruptcy -------------------------------------------------------------- Fitch Ratings, on May 14, downgraded the U.S. residential mortgage servicer ratings of GMAC Mortgage LLC (GMAC Mortgage) as follows: -- Residential primary servicer rating for prime product to 'RPS4'from 'RPS3'; -- Residential primary servicer rating for Alt-A product to 'RPS4'from 'RPS3'; -- Residential primary servicer rating for subprime product to 'RPS4'from 'RPS3'; -- Residential primary servicer rating for HLTV product to 'RPS4'from 'RPS3'; -- Residential primary servicer rating for HELOC product to 'RPS4'from 'RPS3'; -- Residential primary servicer rating for subservicer to 'RPS4'from 'RPS3'; and -- Residential special servicer rating to 'RSS4'from 'RSS3'. The rating downgrades are due to the bankruptcy filing by GMAC Mortgage's parent, Residential Capital LLC (ResCap), on May 14, 2012. Fitch had placed GMAC Mortgage's servicer ratings on Rating Watch Negative on April 19, 2012. Fitch does not expect the downgrade of GMAC Mortgage's primary and special servicer ratings to affect the RMBS ratings at this point. On April 19th, Fitch reviewed all transactions that are serviced by GMAC Mortgage and placed 157 classes on Rating Watch Negative. These classes were identified as being at risk for a rating revision due to the increased risk of a servicer disruption. Fitch will resolve the Rating Watch Negative for the 157 classes as more is disclosed about the future of the servicing for each respective pool over the coming weeks. Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within some of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-) as well as the flat rating. GMAC-RFC: Fitch Cuts U.S. Res. Master Servicer Rating to 'RMS4' --------------------------------------------------------------- Fitch Ratings has downgraded the U.S. residential mortgage master servicer rating of GMAC-RFC, LLC (RFC) as follows: -- U.S. residential master servicer rating downgraded to 'RMS4' from 'RMS3'. The rating downgrade is due to the bankruptcy filing by RFC's parent, Residential Capital LLC (ResCap), on May 14, 2012. Fitch had placed RFC's servicer rating on Rating Watch Negative on April 19, 2012. Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within some of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-) as well as the flat rating. GREEN EARTH: Incurs $611,000 Net Loss in March 31 Quarter --------------------------------------------------------- Green Earth Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $611,000 on $1.52 million of net sales for the three months ended March 31, 2012, compared with a net loss of $4.03 million on $2.57 million of net sales for the same period during the prior year. The Company reported a net loss of $12.20 million for the year ended June 30, 2011, compared with a net loss of $12.88 million during the prior year. The Company reported a net loss of $7.56 million on $4.94 million of net sales for the nine months ended March 31, 2012, compared with a net loss of $9.28 million on $3.71 million of net sales for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $4.23 million in total assets, $9.79 million in total liabilities, and a $5.56 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/Go49n5 About Green Earth Technologies White Plains, N.Y.-based Green Earth Technologies, Inc. (OTC QB: GETG) -- http://www.getg.com/-- markets, sells and distributes bio-degradable performance and cleaning products. The Company's product line crosses multiple industries including the automotive aftermarket, marine and outdoor power equipment markets. In its audit report on the financial statements for fiscal year ended June 30, 2011, Friedman LLP, in East Hanover, New Jersey, noted that the Company's losses, negative cash flows from operations, working capital deficit and its ability to pay its outstanding liabilities through fiscal 2012 raise substantial doubt about its ability to continue as a going concern. GUIDED THERAPEUTICS: Incurs $1 Million Net Loss in First Quarter --------------------------------------------------------------- Guided Therapeutics, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.01 million on $718,000 of contract and grant revenue for the three months ended March 31, 2012, compared with a net loss of $726,000 on $767,000 of contract and grant revenue for the same period during the prior year. The Company reported a net loss of $6.64 million in 2011, compared with a net loss of $2.84 million in 2010. The Company's balance sheet at March 31, 2012, showed $3.08 million in total assets, $2.17 million in total liabilities and $908,000 in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/b8va9B About Guided Therapeutics Guided Therapeutics, Inc. (OTC BB and OTC QB: GTHP) -- http://www.guidedinc.com/-- is developing a rapid and painless test for the early detection of disease that leads to cervical cancer. The technology is designed to provide an objective result at the point of care, thereby improving the management of cervical disease. Unlike Pap and HPV tests, the device does not require a painful tissue sample and results are known immediately. GT has also entered into a partnership with Konica Minolta Opto to develop a non-invasive test for Barrett's Esophagus using the LightTouch technology platform. In its report on the Company's 2011 Form 10-K, UHY LLP, in Sterling Heights, Michigan, noted that the Company's recurring losses from operations and accumulated deficit raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning According to the Form 10-K for the year ended Dec. 31, 2011, the Company's capital-raising efforts are ongoing. If sufficient capital cannot be raised during the fourth quarter of 2012, the Company has plans to curtail operations by reducing discretionary spending and staffing levels, and attempting to operate by only pursuing activities for which it has external financial support, such as under the Konica Minolta development agreement and additional NCI or other grant funding. However, there can be no assurance that such external financial support will be sufficient to maintain even limited operations or that the Company will be able to raise additional funds on acceptable terms, or at all. In that a case, the Company might be required to enter into unfavorable agreements or, if that is not possible, be unable to continue operations, and to the extent practicable, liquidate or file for bankruptcy protection. GUITAR CENTER: Incurs $16.2 Million Net Loss in First Quarter ------------------------------------------------------------- Guitar Center Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $16.21 million on $528.15 million of net sales for the three months ended March 31, 2012, compared with a net loss of $11.45 million on $502.80 million of net sales for the same period during the prior year. Guitar Center reported a net loss of $236.94 million in 2011, a net loss of $56.37 million in 2010, and a net loss of $189.85 million in 2009. The Company's balance sheet at March 31, 2012, showed $1.89 billion in total assets, $1.99 billion in total liabilities and a $93.96 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/1Wvhd6 About Guitar Center Guitar Center, Inc., headquartered in Westlake Village, Calif., is the largest musical instrument retailer with 312 stores and a direct response segment, which operates its websites. It operates three distinct musical retail business - Guitar Center (about 70% of revenue), Music & Arts (about 7% of revenue), and Musician's Friend (its direct response subsidiary with 24% of revenue). Total revenue is about $2 billion. Bankruptcy Warning The Company said in its annual report for the period ended Dec. 31 2011, that if it cannot make scheduled payments on its debt, the Company will be in default and, as a result: * the Company's debt holders could declare all outstanding principal and interest to be due and payable; * the lenders under the Company's senior secured credit facilities could terminate their commitments to lend the Company money and foreclose against the assets securing their borrowings; and * the Company could be forced into bankruptcy or liquidation. * * * As reported in the Troubled Company Reporter on Feb. 28, 2011, Moody's Investors Service affirmed Guitar Center, Inc.'s Caa2 Corporate Family Rating and the $622 million existing term loan rating of Caa1 due October 2014. The Probability of Default Rating was revised to Caa2/LD from Caa2 while the Speculative Grade Liquidity assessment was changed to SGL-2 from SGL-3. The rating outlook remains stable. The Caa2/LD Probability of Default rating reflects Moody's view that the extended deferral of interest on the Holdco notes constitutes a distressed exchange under Moody's definition and also anticipates that additional exchanges of this nature are possible over the near term. The Limited Default designation was prompted by the company's executed amendment of the HoldCo notes, which allows for a deferral of 50% of the interest payments for 18 months. Moody's views this as a distressed exchange that provides default avoidance. This LD designation applies to the proposed follow-on amendment to defer the HoldCo note interest payments by another six months. Subsequent to the actions, Moody's will remove the LD designation and the PDR will be Caa2 going forward. GOOD SAM: Reports $4,000 Net Income in First Quarter ---------------------------------------------------- Good Sam Enterprises, LLC, filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $4,000 on $110.05 million of revenue for the three months ended March 31, 2012, compared with a net loss of $2.59 million on $104.56 million of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $232.60 million in total assets, $486.69 million in total liabilities, and a $254.09 million total members' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/ogGHR5 About Affinity Group Ventura, Calif.-based Affinity Group Holding, Inc., now known as Good Sam Enterprises, LLC, is a holding company and the direct parent of Affinity Group, Inc. The Company is an indirect wholly- owned subsidiary of AGI Holding Corp, a privately-owned corporation. The Company is a member-based direct marketing organization targeting North American recreational vehicle owners and outdoor enthusiasts. The Company operates through three principal lines of business, consisting of (i) club memberships and related products and services, (ii) subscription magazines and other publications including directories, and (iii) specialty merchandise sold primarily through its 78 Camping World retail stores, mail order catalogs and the Internet. * * * Affinity Group Inc. carries 'B3' long term corporate family and probability of default ratings, with 'stable' outlook, from Moody's Investors Service. As reported in the Troubled Company Reporter on November 9, 2010, Standard & Poor's Ratings Services assigned Affinity Group Inc.'s proposed $325 million senior secured notes due 2016 its preliminary 'B-' issue-level rating. Following the close of the proposed transaction, S&P expects to assign a 'B-' corporate credit rating to Affinity Group Inc., and withdraw S&P's current 'D' corporate credit rating on Affinity Group Holding Inc. A portion of the proceeds of the new notes will be used, in conjunction with cash contributions from Holding's parent, to repay in full $88 million of senior notes that are currently outstanding at Holding. S&P said the expected 'B-'corporate credit rating on Affinity Group reflects S&P's expectation that, following the proposed refinancing transaction, adjusted debt leverage will be reduced by about 1x, the company will not have any meaningful near-term debt maturities, and the company will generate some discretionary cash flow (albeit minimal). Still, credit measures will remain relatively weak, as adjusted debt leverage will remain above 6.0x (S&P's operating lease adjustment adds about a turn to leverage), and S&P expects interest coverage to remain in the low- to mid- 1.0x area over the intermediate term. HAYDEL PROPERTIES: Can Use Gene Whitehurst's Cash Collateral ------------------------------------------------------------ Judge Katharine Samson of the U.S. Bankruptcy Court for the Southern District of Mississippi authorized Haydel Properties LP to use cash collateral of Gene Whitehurst. Specifically, the Debtor is given the authority to use any additional rents received on 1900 Denny Avenue above the amount required to pay the adequate protection payments and to set aside funds for payment of taxes for any and all necessary expenses of the Debtor, including payment of insurance, repairs and administrative expenses. Judge Samson ruled that the Debtor will pay the outstanding real estate taxes on or before Sept. 30, 2012. The Debtor will pay $1,030 as adequate protection payments to Whitehurst on the 10th day of each month starting April 10, 2012. The adequate protection payments will increase to $1,530 per month commencing with the payment due on Jan. 10, 2013, until the Plan is confirmed. The Debtor owes Gene Whitehurst on a promissory note, which is secured by a deed of trust on property located in Jackson County, Mississippi. The note as of the filing of the case had an approximate payoff balance of $166,724.05 and the approximate total of the liens, including the prior tax liens as of the Petition Date was $170,216.79. 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. HCA INC: Moody's Rates New Senior Secured Term Loan A-3 at 'Ba3' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 (LGD 3, 36%) rating to HCA Inc.'s (HCA) new term loan A-3 due 2016. Moody's understands that the new term loan tranche results from the extension of the maturity of $74.6 million of term loan A-1 due November 2012 and $651.2 million of term loan B-1 due November 2013. The transaction improves the company's maturity profile but does not impact leverage. HCA's B1 Corporate Family and Probability of Default Ratings remain unchanged. The outlook for the ratings is stable. Moody's rating actions are summarized below. Ratings assigned: Senior secured term loan A-3 due 2016, Ba3 (LGD 3, 36%) Ratings unchanged: Corporate Family Rating, B1 Probability of Default Rating, B1 ABL revolver expiring 2016, Ba1 (LGD 1, 2%) Revolving credit facility expiring 2015, Ba3 (LGD 3, 36%) Senior secured term loan A-1 due 2012, Ba3 (LGD 3, 36%) Senior secured term loan A-2 due 2016, Ba3 (LGD 3, 36%) Senior secured term loan B-1 due 2013, Ba3 (LGD 3, 36%) Senior secured term loan B-2 due 2017, Ba3 (LGD 3, 36%) Senior secured term loan B-3 due 2018, Ba3 (LGD 3, 36%) Euro term loan due 2013, Ba3 (LGD 3, 36%) 8.5% first lien secured notes due 2019, Ba3 (LGD 3, 36%) 7.875% first lien secured notes due 2020, Ba3 (LGD 3, 36%) 7.25% first lien secured notes due 2020, Ba3 (LGD 3, 36%) 6.5% first lien secured notes due 2020, Ba3 (LGD 3, 36%) 5.875% first lien secured notes due 2022, Ba3 (LGD 3, 36%) 9.875% second lien notes due 2017, B2 (LGD 5, 70%) Senior unsecured notes (various), B3 (LGD 5, 86%) 7.75% senior unsecured HoldCo notes due 2021, B3 (LGD 6, 96%) Speculative Grade Liquidity Rating, SGL-2 First lien senior secured shelf, (P)Ba3 Senior unsecured shelf, (P)B3 Ratings Rationale HCA's B1 Corporate Family Rating reflects Moody's expectation that the company will continue to operate with significant leverage. Furthermore, HCA has large debt maturities in future periods, although the company has continued to make progress to push those maturities out. The rating also reflects Moody's consideration of HCA's scale and position as the largest for-profit hospital operator, which should aid in the company's ability to weather industry pressures and benefit in providing access to resources needed in adapting to changes in the sector brought on by healthcare reform legislation. Finally, the rating incorporates Moody's expectation that the company will limit the use of additional debt for shareholder initiatives and see modest improvement in credit metrics through both EBITDA growth and debt repayment. Given the aggressive financial policy of the company and private equity sponsorship of HCA, Moody's would have to become more comfortable that the company will maintain a conservative financial profile, consistent with that expected of the Ba3 rating, prior to it considering an upgrade of the rating to that level. Additionally, Moody's would have to expect a continuation of positive operating trends such that the company is able to grow earnings or repay debt so that debt/EBITDA is expected to be maintained below 4.5 times. If the company experiences a deterioration of operating trends, for example, negative trends in same-facility adjusted admissions or same-facility revenue per adjusted admission, Moody's could downgrade the rating. Additionally, Moody's could downgrade the ratings if the company were to incur additional debt to fund shareholder distributions or acquisitions so that it expects adjusted debt/EBITDA to be sustained above 5.0 times. The principal methodology used in rating HCA was the Global Healthcare Service Providers Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Nashville, Tennessee, HCA is the nation's largest acute care hospital company with 164 hospitals owned and operated by its subsidiaries as of March 31, 2012. For the twelve months ended March 31, 2012, the company recognized revenue in excess of $30.5 billion, net of the provision for doubtful accounts. HCSB FINANCIAL: Incurs $471,000 Net Loss in First Quarter --------------------------------------------------------- HCSB Financial Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss available to common shareholders of $471,000 on $5.54 million of total interest income for the three months ended March 31, 2012, compared with a net loss available to common shareholders of $7.88 million on $7.59 million of total interest income for the same period during the prior year. 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 March 31, 2012, showed $536.74 million in total assets, $541.08 million in total liabilities, and a $4.33 million total shareholders' deficit. As of March 31, 2012, the Company was categorized as "critically undercapitalized" and the Bank was categorized as "significantly undercapitalized." The Company's losses for 2010 and 2011 have adversely impacted its capital. As a result, the Company has been pursuing a plan to increase its capital ratios in order to strengthen its balance sheet and satisfy the commitments required under the Consent Order. In addition, the Consent Order required the Company to achieve and maintain by July 10, 2011, Total Risk Based capital at least equal to 10% of risk-weighted assets and Tier 1 capital at least equal to 8% of total average assets. The Company did not meet that requirement and, as a result, submitted a revised capital restoration plan to the FDIC on July 15, 2011. The revised capital restoration plan was determined by the FDIC to be insufficient and, as a result, the Company submitted a further revised capital restoration plan to the FDIC on Sept. 30, 2011. The Company received the FDIC's non-objection to the further revised capital restoration plan on Dec. 6, 2011. If the Company continues to fail to meet the capital requirements in the Consent Order in a timely manner, then this would result in additional regulatory actions, which could ultimately lead to the Bank being taken into receivership by the FDIC. After auditing the 2011 results, 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. A copy of the Form 10-Q is available for free at: http://is.gd/uV744y 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. HOSTESS BRANDS: Judge Combines Both Sides' CBA Proposals -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that neither Hostess Brands Inc. nor the Teamsters union emerged victorious from the trial on April 18 and 19 where the Wonder bread maker was seeking court permission to break existing labor contracts and modify retirement benefits. According to the report, in a lengthy opinion delivered orally in the early evening on May 14, U.S. Bankruptcy Judge Robert Drain cobbled together elements from both sides' proposals into a new contract and pension proposal he could accept. The main sticking point was the company's demand for withdrawal from union-sponsored multiemployer pension plans facing insolvency in future years. Judge Drain, in White Plains, New York, agreed with Hostess that complete withdrawal from the three weakest multiemployer plans is essential for Hostess to attract new capital necessary for emerging from reorganization. When it came to how Hostess should accomplish labor cost savings, Judge Drain came down on the side of the union's proposal. Judge Drain sided with Hostess in ruling that the company should withdraw from all multiemployer plans and re-enter as a new employer only those that are economically sound. Workers in the unsound pension funds would be moved to stable ones. The report adds that the judge took sides with the Teamsters on another aspect of the pension proposal. While Hostess wanted all new hires to be in a company-sponsored plan, Judge Drain said it was crucial for the health of the union pension plans that they cover new workers. Judge Drain turned down a proposal by the Teamsters that they have control over increases in salaries for non-union and management workers. On the other hand, he said it was reasonable for labor to have a representative on the board of directors and for the unions to have claims resulting from revisions in their contracts. Unless the two sides can't come to terms on a contract, the trial is over. If they can't agree, Judge Drain said he would hold a hearing on short notice to consider approving a request by the company to impose new terms of employment along the lines he found acceptable. Originally, the bakery workers' union was to have been in the April trial. The bakery union, Hostess' second-largest, decided not to oppose, and its existing contract was rejected this month. A trial to deal with other unions is scheduled for later this month. According to The Dallas Business Journal, Teamsters General Secretary-Treasurer Ken Hall said, "We told our Hostess members all along that we would vigorously oppose the imposition of unjust working conditions since Hostess first filed bankruptcy, and we have done just that." In a statement to the Dallas Business Journal, Hostess spokesman Erik Halvorson said the company would continue to try and reach a deal with the Teamsters. "Hostess had planned to continue bargaining in good faith with its unions regardless of the Court's decision, and we intend to pursue that path," the Business Journal quotes Mr. Halvorson as saying. "We will also consider our option of submitting a revised proposal that addresses the judge's concerns." Hostess had warned earlier this month that certain conditions -- such as an "unsatisfactory resolution to its pending motion before the bankruptcy court regarding certain modifications to its collective bargaining agreements" -- could force it to liquidate. Hostess sent potential layoff notices, required by the federal WARN Act, to its 18,000 employees nationwide. Business Journal notes Hostess said 127 jobs possibly are at risk in the Dallas-Fort Worth area. 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. HUGHES TELEMATICS: Facing $92 Million Debt Maturity --------------------------------------------------- Mara Lemos Stein at Dow Jones' DBR Small Cap reports that Hughes Telematics Inc. needs to raise fresh cash in coming months to pay down or refinance $92 million in debt that matures in March 2013, the company said in a regulatory filing, which raises doubt about its ability to continue as a going concern. Atlanta, Ga.-based HUGHES Telematics, Inc. is a telematics services company that provides a suite of real-time voice and data communications services and applications for use in vehicles and is developing additional applications for use within and outside of the automotive industry. ICONIX BRAND: Moody's Upgrades Corp. Financial Rating to 'Ba3' -------------------------------------------------------------- Moody's Investors Service upgraded Iconix Brand Group, Inc.'s Corporate Family Rating to Ba3 from B1. The B1 rating on the company's $287.5 million convertible senior subordinated notes due June 2012 was affirmed. The rating outlook is stable. The company's Speculative Grade Liquidity rating of SGL-2 was also affirmed. Ratings affirmed and LGD assessments revised: Senior Subordinated Convertible Notes due 2012 at B1 (LGD 4, 60% from LGD 4, 50%) Speculative Grade Liquidity at SGL-2 Ratings Upgraded: Corporate Family Rating to Ba3 from B1 Probability of Default Rating to Ba3 from B1 Ratings Rationale The upgrade of Iconix's CFR to Ba3 from B1 reflects the company's improved leverage, with debt/EBITDA at 2.7 times as well as consistently high level of free cash flow generation from its expanding portfolio of brands. Moody's expects further improvement in leverage when the company redeems its $287.5 million (face amount) convertible notes in June, 2012, primarily from existing cash on the company's balance sheet. Iconix rating remains limited by its narrow business model that is focused solely on licensing activities, a growth strategy that is expected to remain reliant on acquisitions and high customer concentrations. Positive consideration is given to the significant diversification across its brands by both product type and end retailer as well as the significant amount of Iconix's revenue derived from minimum contractual guaranties. The one notch difference between the Ba3 CFR and the B1 rating on Iconix $287.5 million convertible senior subordinated notes due June 2012 reflects its unsecured position vis-a-vis the company's secured $150 million revolver. The stable rating outlook reflects expectations that the company will utilize free cash flow to undertake acquisitions or, in the absence of suitable acquisition opportunities, return cash to shareholders while also redeeming its June 2012 notes. In view of the company's narrow business model and the importance of acquisitions to the company's growth strategies, there is limited upward rating momentum. Further diversification by brand, product category, retailer channels and geographies would be positives over time. Ratings could be downgraded if the company begins to experience non-renewal, or renewals at material lower revenue streams, for its licenses or the company were to become meaningfully more aggressive in its financial policies. Quantitatively, ratings could be downgraded if debt/EBITDA were sustained above 4.0 times or free cash flow/debt fell below 15%. Iconix's ratings have been assigned by evaluating factors that Moody's believe are relevant to the company's risk profile, 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. These attributes were compared against other issuers both within and outside Iconix's core industry. Iconix's ratings are believed to be 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. Iconix Brand Group, Inc. owns, licenses and markets a growing portfolio of consumer brands including Candie's, Bongo, Badgley Mischka, Joe Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific, Danskin, Rocawear, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter, Waverly, Zoo York and the Sharper Image. Iconix also owns interests in the Artful Dodger, Ed Hardy, Ecko, Material Girl and Peanuts brands. IMAGEWARE SYSTEMS: Incurs $8.6 Million Net Loss in First Quarter ---------------------------------------------------------------- Imageware Systems, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $8.59 million on $1.12 million of revenue for the three months ended March 31, 2012, compared with a net loss of $7.85 million on $1.92 million of revenue for the same period during the prior year. The Company reported a net loss of $3.18 million in 2011, compared with a net loss of $5.05 million in 2010. The Company's balance sheet at March 31, 2012, showed $9.42 million in total assets, $10.20 million in total liabilities and a $776,000 total shareholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/BfHB0w ImageWare provided a corporate update to highlight its progress over the last six months: * Completed a $10.0 million equity financing with MDB Capital Group; * Eliminated all long-term debt and existing Series C and D Preferred Stock; * Finalized and released version 2.0 of ImageWare's flagship Biometric Engine (BE); * Began a definitive marketing campaign within the port and commercial marketplaces; * Los Angeles World Airports (LAWA) ordered a suite of ImageWare's biometric identity management and credentialing software, valued at approximately $1.0 million; * Awarded four patents in U.S., Canada, China and Australia; * John Cronin, managing director of the world's largest Intellectual Property (IP) strategy consulting firm, ipCG, was appointed to ImageWare's board of directors; and * Reestablished current reporting status with the U.S. Securities and Exchange Commission. "The key steps we have taken over the last several months to strengthen our capital resources and enhance our product offerings clearly positions ImageWare as the leader in multimodal biometric security solutions, a position which we intend to now extensively exploit," said Jim Miller, chairman and CEO of ImageWare. A copy of the press release is available for free at: http://is.gd/I9seJv About ImageWare Systems Headquartered in San Diego, California, ImageWare Systems, Inc. is a leader in the emerging market for software-based identity management solutions, providing biometric, secure credential, law enforcement and enterprise authorization. Its "flagship" product is the IWS Biometric Engine. Scalable for small city business or worldwide deployment, the Company's biometric engine is a multi- biometric platform that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. The Company's identification products are used to manage and issue secure credentials, including national IDs, passports, driver licenses, smart cards and access control credentials. Its law enforcement products provide law enforcement with integrated mug shot, fingerprint LiveScan and investigative capabilities. The Company also provides comprehensive authentication security software. IMEDICOR INC: Delays Form 10-Q for March 31 Quarter --------------------------------------------------- iMedicor, Inc., notified the U.S. Securities and Exchange Commission that it will delayed in filing its quarterly report on Form 10-Q for the period ended March 31, 2012. The Company said the external auditors have not had time to properly review the financial information prior to the filing deadline. The Form 10-Q will be filed as soon as practicable and within the 5 day extension period. About iMedicor Inc. Nanuet, N.Y.-based iMedicor, Inc., formerly Vemics, Inc., builds portal-based, virtual work and learning environments in healthcare and related industries. The Company's focus is twofold: iMedicor, the Company's web-based portal which allows Physicians and other healthcare providers to exchange patient specific healthcare information via the internet while maintaining compliance with all Health Insurance Portability and Accountability Act of 1996 ("HIPAA") regulations, and; recently acquired ClearLobby technology, the Company's web-based portal adjunct which provides for direct communications between pharmaceutical companies and physicians for the dissemination of information on new drugs without the costs related to direct sales forces. The Company's solutions allow physicians to use the internet in ways previously unavailable to them due to HIPAA restrictions to quickly and cost- effectively exchange and share patient medical information and to interact with pharmaceutical companies and review information on new drugs offered by these companies at a time of their choosing. Demetrius & Company, L.L.C., expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 financial results. The independent auditors noted that the Company has experienced significant losses resulting in a working capital deficiency and shareholders' deficit. The Company had a net loss of $5.20 million for the year ended June 30, 2011, following an $11.40 million net loss in the preceding year. The Company's balance sheet at Dec. 31, 2011, showed $2.10 million in total assets, $5.78 million in total liabilities, all current, and a $3.68 million total stockholders' deficit. IMPERIAL INDUSTRIES: Incurs $426,000 Net Loss in First Quarter -------------------------------------------------------------- Imperial Industries, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $426,000 on $1.88 million of net sales for the three months ended March 31, 2012, compared with a net loss of $319,000 on $1.77 million of net sales for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $4.18 million in total assets, $2.86 million in total liabilities and $1.32 million in total stockholders' equity. S. Daniel Ponce, Imperial's Chairman of the Board, stated: "While sales have shown some improvement, we continue to operate in a weak construction market with demand for our products remaining near historic lows. Due to these conditions and continuing losses, we have made it a priority to obtain equity and/or debt capital to maintain liquidity and focus on initiatives to expand our product line offerings and geographic reach in an effort to reduce and eliminate our negative cash flows. We recently entered into a non-binding debt proposal with a proposed lender for an asset-based type of financing arrangement which is subject to the lender?s due diligence. There can be no assurance that we will be able to conclude this type of financing arrangement on satisfactory terms. We are continuing our efforts to seek capital and evaluate other strategic options in this difficult environment to sustain operations until market conditions improve." A copy of the Form 10-Q is available for free at: http://is.gd/i711WE About Imperial Industries Pompano Beach, Fla.-based Imperial Industries, Inc. (OTC BB: IPII) -- http://www.imperialindustries.com/-- manufactures and distributes stucco, plaster and roofing products to building materials dealers, contractors and others through its subsidiary, Premix-Marbletite Manufacturing Co. The Company sells its products primarily in the State of Florida and to a certain extent the rest of the Southeastern United States. In its report on the 2011 financial statements, Grant Thornton LLP, in Fort Lauderdale, Florida, noted that the industry in which the Company is operating has been impacted by a number of factors and accordingly, the Company has experienced a significant reduction in its sales volume. In addition, for the year ended Dec. 31, 2011, the Company has a loss from continuing operations of approximately $1,310,000. These factors, among others, raise substantial doubt about the Company?s ability to continue as a going concern. INGRID E. TRENKLE: Case Summary & 16 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Ingrid E. Trenkle M.D., Inc. 124 E. Olive Ave. Redlands, CA 92373 Bankruptcy Case No.: 12-22008 Chapter 11 Petition Date: May 15, 2012 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Mark D. Houle Debtor's Counsel: Stephen R. Wade, Esq. THE LAW OFFICES OF STEPHEN R WADE 400 N Mountain Ave., Suite 214B Upland, CA 91786 Tel: (909) 985-6500 Fax: (909) 985-2865 E-mail: dlr@srwadelaw.com Scheduled Assets: $319,509 Scheduled Liabilities: $3,456,033 A copy of the Company's list of its 16 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-22008.pdf The petition was signed by Ingrid E. Trenkle, president. INTELSAT SA: Unit to Redeem Outstanding 9 1/2% Notes on June 15 --------------------------------------------------------------- Intelsat Jackson Holdings S.A. issued a notice of redemption pursuant to the indenture governing its 9 1/2% Senior Notes due 2016 that it intends to redeem all of the outstanding 9 1/2% Notes on June 15, 2012, at a redemption price equal to 103.167% of the principal amount of the notes, plus accrued and unpaid interest thereon to the redemption date. On May 14, 2012, Intelsat Jackson issued a notice of redemption pursuant to the indenture governing its 11 1/4% Senior Notes due 2016 that it intends to redeem $434,941,000 aggregate principal amount of the 11 1/4% Notes on June 15, 2012, at a redemption price equal to 103.75% of the principal amount of the notes, plus accrued and unpaid interest thereon to the redemption date. 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. 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. * * * 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. INTERMETRO COMMUNICATIONS: Incurs $195,000 Net Loss in Q1 --------------------------------------------------------- InterMetro Communications, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $195,000 on $4.39 million of net revenues for the three months ended March 31, 2012, compared with net income of $2.02 million on $6.25 million of net revenues for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $3.02 million in total assets, $16.35 million in total liabilities and a $13.32 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/Dq8NUs About Intermetro Simi Valley, Calif.-based InterMetro Communications, Inc. -- http://www.intermetro.net/-- is a facilities-based provider of enhanced voice and data communication services. Gumbiner Savett Inc., in Santa Monica, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company incurred net losses in previous years, and as of Dec. 31, 2011, the Company had a working capital deficit of approximately $12,696,000 and a total stockholders' deficit of approximately $13,274,000. The Company anticipates that it will not have sufficient cash flow to fund its operations in the near term and through fiscal 2012 without the completion of additional financing. JAG ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: JAG Enterprises Inc. dba Miracle Ear dba Peach State Hearing Aid Centers 4409 Oxbourgh Park Flowery Branch, GA 30542 Bankruptcy Case No.: 12-21781 Chapter 11 Petition Date: May 15, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Gainesville) Debtor's Counsel: Leslie M. Pineyro, Esq. JONES AND WALDEN, LLC 21 Eighth Street, NE Atlanta, GA 30309 Tel: (404) 564-9300 Fax: (404) 564-9301 E-mail: lpineyro@joneswalden.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/ganb12-21781.pdf The petition was signed by Johnny A. Guest, III, president. JC PENNEY: Moody's Says Rocky Strategic Turnaround Credit Neg. -------------------------------------------------------------- Department store chain J.C. Penney (Ba1 stable) announced a 20.1% sales decline and a 18.9% comparable store sales decline for the first quarter of 2012. While Moody's expected J.C. Penney's first quarter sales to decline, this level of decline was worse than anticipated and clearly signals that the strategic turnaround got off to a difficult start. Although Moody's views this as a credit negative announcement, J.C. Penney's Ba1 Corporate Family Rating and stable outlook are currently unaffected. Moody's Ba1 Corporate Family Rating acknowledges that Moody's expects J.C. Penney's 2012 and 2013 operating performance will be soft. While sales fell more than anticipated, Moody's continues to forecast that J. C. Penney's debt to EBITDA will not rise above 4.25 times nor EBITA to interest expense fall below 2.25 times on a sustainable basis, levels Moody's sights as prompting downward rating pressure. In fact, Moody's anticipates that J.C. Penney's debt to EBITDA will likely be below 4.0 times and EBITA to interest expense will be above 2.25 times at February 2, 2013. Furthermore, the company continues to have sizable cash balances ($839 million at April 28, 2012) and a $1.5 billion asset based revolving credit facility. Moody's notes that J.C. Penney's elimination of its corporate dividend will further bolster its liquidity. J. C. Penney launched the first stages of its strategic turnaround at the beginning of the first quarter which included a new pricing and promotion strategy along with a new media campaign. These changes drove a sizable reduction in store traffic, the largest driver of the sales decline. J.C. Penney attributes this to its media campaign not clearly explaining its new pricing strategy to consumers and has implemented some immediate changes to its media campaign. Although Moody's believes the changes to J.C. Penney's media campaign better explain its pricing strategy, the rating agency is concerned about J.C. Penney's performance over the near term. Moody's anticipates monitoring J.C. Penney's ongoing performance closely for signs of improvement. Ratings could be negatively impacted should Moody's not see signs of improvement in J.C. Penney's store traffic and reported sales. Ratings could be downgraded should J.C. Penney's operating performance fall beyond Moody's expectations or debt increase such that it becomes likely that debt to EBITDA would remain above 4.25 times and EBITA to interest expense would remain below 2.25 times.The principal methodology used in rating J.C. Penney was the was the Global Retail Industry Methodology published in June 2011. J.C. Penney is one of the U.S.'s largest department store operators with about 1,100 locations in the United States and Puerto Rico. It also operates a website, www.jcp.com. Revenues are about $16.5 billion. JEFFERSON COUNTY, AL: To Have Committee, No New Taxes ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Jefferson County, Alabama, is on the road to having an official creditors' committee with three members, although it won't have any new taxes to assist in exiting from Chapter 9 municipal bankruptcy. According to the report, the bankruptcy administrator polled the county's creditors and found three willing to serve on an official committee. Accordingly, he filed papers asking the bankruptcy judge in Birmingham to form a committee with the three creditors. The committee is to include Bayerische Landesbank, with an office in New York, and UAB Health System from Birmingham. Mr. Rochelle also reports that the Alabama legislature is set to adjourn for the year without passing legislation allowing the county to raise taxes by reinstating a wage tax that had been voided by the state Supreme Court. The legislature won't convene again until February. The county manager told Bloomberg News that the county may miss a $10 million payment in October on general obligation bonds. The county already failed to make a $15 million payment on general obligation bonds. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. 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. JG WENTWORTH: Sued For Deceptive Trade Practices ------------------------------------------------ JG Wentworth parent JGWPT Holdings has been accused of engaging in widespread deceptive trade practices in a recently filed lawsuit. A longtime industry participant alleges Peachtree and Wentworth deceive consumers into believing they are competing with one other, when in fact they are sharing databases which are used to support high rates imposed on consumers. After acquiring their major direct competitor, Settlement Funding, L.L.C. in June 2011, Wentworth fired 153 employees, virtually Peachtree's entire structured settlement business group, while continuing to market under the former "Peachtree" name using Wentworth's staff, confusing customers in the process, according to the Structured Settlement Institute. Paul McHugh, Vice President of Sales & Marketing at RSL, commented, "Customers call Peachtree and then they call Wentworth, thinking that they are getting competitive bids. What customers don't realize is that they are calling the same company. Peachtree and Wentworth don't compete; in fact they are commonly owned and staffed by each other's employees and together claim a 70% market share. They work cooperatively, collectively and out of the same office to ensure that the customer gets the least value for their future payments." JG Wentworth and the remnants of Peachtree operate in lock step, despite the public perception that they are competing with one another. JG Wentworth was insufficiently capitalized and filed for bankruptcy protection in 2009 while owned by JLL Partners, Inc. because it could not meet its financial obligations. After emerging from bankruptcy and still owned by JLL Partners, Wentworth purchased Peachtree in June 2011, which had also fallen on hard times because of ill-advised venturing into life settlements. JG Wentworth continues to be controlled along with Peachtree Settlement Funding by New York based investment fund, JLL Partners. "What this means for those seeking to sell their structured settlement or annuity or lottery payments for an upfront lump sum is that choosing a structured settlement factoring company has to be carefully considered," commented McHugh. "Doing business with Wentworth or Peachtree means you are dealing with a single company that has not been able to meet its financial obligations in recent years. In fact, in 2009 Wentworth sent out hundreds of letters to customers abandoning transactions underway because of its inability to fund court ordered transfers. Finding a company that has both the financial resources and the desire to deal with you honestly and honorably is essential." JLL Partners' controlled companies have recently experienced a series of setbacks in the courts where they have continued their anti-consumer practices. Wentworth's deceptive tactics include trying to block their customers from even talking with competitors offering more money for the customers' payments, and then using the court system to interfere with structured settlement transactions underway with competitors offering better deals. In response to such actions, a Texas court upheld the right for RSL Funding, LLC, to offer former Wentworth clients more money for their future payments. Repeated inquiry to counsel for JG Wentworth and Peachtree, L. Bradley Hancock, a partner in Greenberg Traurig's Houston office, resulted in a demand that this information not be publicly disclosed. About J.G. Wentworth J.G. Wentworth, Inc. -- http://www.jgwentworth.com/-- based in Bryn Mawr, Pennsylvania, is the nation's oldest, largest and most respected buyer of deferred payments for illiquid financial assets like structured settlements and annuities. Since 1992, J.G. Wentworth has purchased over $3 billion of future payment obligations from consumers and is also the nation's largest securitizer of structured settlement and annuity backed notes. J.G. Wentworth and its affiliates filed for Chapter 11 protection on May 19, 2009 (Bankr. D. Del. Case No. 09-11731). Norman L. Pernick, Esq., and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represented the Debtors. JSG HOSPITALITY: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: JSG Hospitality LLC 7443 Acree Lane Olive Branch, MS 38654 Bankruptcy Case No.: 12-11966 Chapter 11 Petition Date: May 14, 2012 Court: United States Bankruptcy Court Northern District of Mississippi (Aberdeen) Debtor's Counsel: Craig M. Geno, Esq. CRAIG M. GENO, PLLC P.O. Box 3380 Ridgeland, MS 39158-3380 Tel: (601) 427-0048 E-mail: cmgeno@cmgenolaw.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 Sukhjinder Singh Gill, managing member. KIWIBOX.COM INC: Delays Form 10-Q for First Quarter --------------------------------------------------- Kiwibox.Com, Inc., informed the U.S. Securities and Exchange Commission that it will be late in filing its quarterly report on Form 10-Q for the period ended March 31, 2012. The Company said the required financial statements cannot be completed within the prescribed filing date without unreasonable effort and expense. About Kiwibox.com New York-based Kiwibox.com, Inc., acquired in the beginning of 2011 Pixunity.de, a photoblog community and launched a U.S. version of this community in the summer of 2011. Effective July 1, 2011, Kiwibox.com, Inc., became the owner of Kwick! --a top social network community based in Germany. Kiwibox.com shares are freely traded on the bulletin board under the symbol KIWB.OB. Rosenberg Rich Baker Berman & Company, in Somerset, New Jersey, expressed substantial doubt about Kiwibox.Com's ability to continue as a going concern, after reviewing the Company's financial statements as of and for the three and nine-month periods ended Sept. 30, 2011, and 2010. The independent auditors noted that the Company has suffered losses from operations and has a working capital deficiency as of Sept. 30, 2011. The Company reported a net loss of $5.90 million in 2011, compared with a net loss of $3.97 million in 2010. The Company's balance sheet at Dec. 31, 2012, showed $8.35 million in total assets, $16.32 million in total liabilities, all current, and a $7.97 million total stockholders' impairment. In its report on the 2011 financial statements, Rosenberg Rich Baker Berman & Company, in Somerset, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered losses from operations and has a working capital deficiency as of Dec. 31, 2011. KRONOS WORLDWIDE: Fitch Rates New $600 Million Term Loan 'BB' ------------------------------------------------------------- Fitch Ratings has assigned an Issuer Default Rating (IDR) of 'BB' to Kronos Worldwide, Inc. (NYSE: KRO) and rates the prospective $600 million term loan B at 'BB' and the prospective $125 million asset-based lending (ABL) revolving credit at 'BB+'. The Rating Outlook is Stable. Proceeds of the term loan B are to be used to repay the notes at its wholly owned subsidiary, Kronos International, Inc.(KII) due 2013 ($371 million at March 31, 2012), seasonal revolver borrowings at KII ($106 million at March 31, 2012) and general corporate purposes including to pay a dividend. Fitch's ratings reflect the company's solid market position in the titanium dioxide (TiO2) industry, strong liquidity and modest financial leverage. Worldwide TiO2 capacity declined by about 6.5% as a result of the global financial crisis. The industry is fairly concentrated with roughly 60% of the global market accounted for by the top five manufacturers. This has allowed considerable price increases by suppliers and high operating rates. The titanium feedstock industry is also highly concentrated with the top three producers accounting for about 63% of supply. As feedstock contracts have come up for re-pricing, costs have accelerated more than TiO2 prices which has reduce margins from record levels in 2011. Fitch expects operating EBITDA to be at least $500 million in 2012 and free cash flow (FCF) generation before any special dividends to run about $100 million per year on average as working capital, capital expenditures and dividends are managed to earnings. Pro forma scheduled debt maturities over the next five years are estimated to be $3 million in 2012, $6 million in each of 2013 through 2016. KII's EUR80 million revolver, expiring October 2013, the proposed $125 million ABL revolver and cash balances are expected to be sufficient to support seasonal needs. Pro forma for the proposed transaction, cash on hand would be $39 million and the revolvers would be fully available as of March 31, 2012. Pro forma total debt/operating EBITDA would be 0.85 times (x). KII's EUR80 million revolver covenants are calculated at the operating subsidiary level. Fitch expects the company to be well within the net secured debt to EBITDA maximum of 0.7x and the net debt to equity maximum of 0.50x to 1.00x. The $125 million ABL revolver is expected to have a minimum 1:1x fixed charges covenant at such times that the facility has less than 10% available. The term loan B is expected to have no maintenance financial covenants. The Stable Outlook reflects Fitch's view that leverage should remain below 2x. An unexpected cash burn or leverage greater than 2.5x for more than 12 months would result in a review of the ratings for a possible downgrade. Should debt be repaid to a greater degree than Fitch's expectations, Fitch would review the ratings for a possible upgrade. Fitch rates Kronos Worldwide, Inc. as follows: -- Issuer Default Rating (IDR) at 'BB'; -- ABL revolver at 'BB+'; -- Term loan B at 'BB'. Fitch has taken the following rating actions at Kronos International, Inc.: -- Issuer Default Rating (IDR) upgraded to 'BB-' from 'B+'; -- Senior secured revolving credit facility affirmed at 'BB+' and recovery rating has been withdrawn; -- Senior secured notes affirmed at 'BB-' and recovery rating has been withdrawn. LIGHTSQUARED INC: Hiring Milbank as Bankruptcy Attorneys -------------------------------------------------------- LightSquared Inc. and certain of its affiliates filed formal applications to employ Milbank, Tweed, Hadley & McCloy LLP as attorneys for the Debtors, nunc pro tunc to the bankruptcy filing date. The Debtors propose to pay Milbank at its standard hourly rates: $825 to $1,140 for partners, $795 to $995 for of counsel, $295 to $750 for associates and senior attorneys, and $130 to $290 for legal assistants. Matthew S. Barr, Esq., a partner at Milbank's Financial Restructuring Group, attests that the firm does not have any connection with, or any interest adverse to, the Debtors, their creditors or any other party in interest, or their attorneys and accountants. Milbank also is a "disinterested person," as the term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code. Prior to and since the Petition Date, Milbank has represented Harbinger Capital Partners LLC or one or more of its affiliates who are shareholders of LightSquared in connection with matters unrelated to the Debtors, including, among other things, corporate and securities matters unrelated to the Debtors. In addition, prior to the Petition Date and prior to its representation of LightSquared, Milbank represented LightSquared's indirect parent company, HGW US Holding Company, L.P., in connection with potential financings and general corporate matters. Milbank does not believe that its representation of Harbinger in matters unrelated to the Debtors constitutes a conflict of interest in connection with the Chapter 11 cases. Milbank obtained appropriate waivers from both Harbinger and LightSquared with respect to any conflicts of interest arising from Milbank's previous representation of Harbinger or from Milbank's representation of LightSquared going forward. According to Milbank's books and records for the year prior to the Petition Date, Milbank has received payment from the Debtors of roughly $2,500,000 on account of invoices for legal services performed and expenses incurred in contemplation of, or in connection with, the Debtors' restructuring efforts including, among other things, the preparation of various "first day" pleadings and negotiations with various creditor groups on restructuring. As of Jan. 17, 2012, the Debtors provided Milbank with an aggregate advance payment of $1 million to establish a retainer to pay for legal services rendered or to be rendered in connection with the Debtors' restructuring efforts. As of the date petition date, Milbank holds a $370,000 retainer that it will hold according to its standard internal procedures in the same manner as Milbank holds retainers received from each of its other clients. Milbank intends to hold the retainer during the Chapter 11 cases and apply the retainer against fees and expenses allowed, at Milbank's option, after submission of Milbank's fee applications and approval by the Court, with any balance to be returned to the Debtors. About LightSquared LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, as the Company seeks to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties, prompting the bankruptcy filing. As of the Petition Date, the Debtors employed roughly 168 people in the United States and Canada. As of Feb. 29, 2012, the Debtors had $4.48 billion in assets (book value) and $2.29 billion in liabilities. LightSquared also sought ancillary relief in Canada on behalf of all of the Debtors, pursuant to the Companies' Creditors Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended, in the Ontario Superior Court of Justice (Commercial List) in Toronto, Ontario, Canada. The purpose of the ancillary proceedings is to request the Canadian Court to recognize the Chapter 11 cases as a "foreign main proceeding" under the applicable provisions of the CCAA to, among other things, protect the Debtors' assets and operations in Canada. The Debtors named affiliate LightSquared LP to act as the "foreign representative" on behalf of the Debtors' estates. Judge Shelley C. Chapman presides over the Chapter 11 case. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to UBS AG as agent under the October 2010 facility is Melissa S. Alwang, Esq., at Latham & Watkins LLP. The ad hoc secured group of lenders under the Debtors' October 2010 facility was formed in April 2012 to negotiate an out-of- court restructuring. The members are Appaloosa Management L.P.; Capital Research and Management Company; Fortress Investment Group; Knighthead Capital Management LLC; and Redwood Capital Management. Counsel to the ad hoc secured group is Thomas E. Lauria, Esq., at White & Case LLP. Philip Falcone's Harbinger Capital Partners indirectly owns 96% of LightSquared's outstanding common stock. Harbinger and certain of its managed and affiliated funds and wholly owned subsidiaries, including HGW US Holding Company, L.P., Blue Line DZM Corp., and Harbinger Capital Partners SP, Inc., are represented in the case by Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP. LIGHTSQUARED INC: Can Hire Kurtzman Carson as Claims Agent ---------------------------------------------------------- LightSquared Inc. and certain of its affiliates received the go- signal to employ Kurtzman Carson Consultants LLC as their claims and noticing agent. Prior to the Petition Date, KCC received a $40,000 retainer. Albert Kass, Vice President of Corporate Restructuring Services at Kurtzman Carson Consultants LLC, attests that KCC (a) does not have any adverse connection with the Debtors, the Debtors' creditors, any other parties in interest or their attorneys and accountants, or the U.S. Trustee and (b) does not hold or represent an interest adverse to the Debtors' estate. KCC is a "disinterested person," as that term is defined in section 101(14) of the Bankruptcy Code. About LightSquared LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, as the Company seeks to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties, prompting the bankruptcy filing. As of the Petition Date, the Debtors employed roughly 168 people in the United States and Canada. As of Feb. 29, 2012, the Debtors had $4.48 billion in assets (book value) and $2.29 billion in liabilities. LightSquared also sought ancillary relief in Canada on behalf of all of the Debtors, pursuant to the Companies' Creditors Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended, in the Ontario Superior Court of Justice (Commercial List) in Toronto, Ontario, Canada. The purpose of the ancillary proceedings is to request the Canadian Court to recognize the Chapter 11 cases as a "foreign main proceeding" under the applicable provisions of the CCAA to, among other things, protect the Debtors' assets and operations in Canada. The Debtors named affiliate LightSquared LP to act as the "foreign representative" on behalf of the Debtors' estates. Judge Shelley C. Chapman presides over the Chapter 11 case. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to UBS AG as agent under the October 2010 facility is Melissa S. Alwang, Esq., at Latham & Watkins LLP. The ad hoc secured group of lenders under the Debtors' October 2010 facility was formed in April 2012 to negotiate an out-of- court restructuring. The members are Appaloosa Management L.P.; Capital Research and Management Company; Fortress Investment Group; Knighthead Capital Management LLC; and Redwood Capital Management. Counsel to the ad hoc secured group is Thomas E. Lauria, Esq., at White & Case LLP. Philip Falcone's Harbinger Capital Partners indirectly owns 96% of LightSquared's outstanding common stock. Harbinger and certain of its managed and affiliated funds and wholly owned subsidiaries, including HGW US Holding Company, L.P., Blue Line DZM Corp., and Harbinger Capital Partners SP, Inc., are represented in the case by Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP. LIGHTSQUARED INC: Schedules Filing Deadline Extended to June 27 --------------------------------------------------------------- At the behest of LightSquared Inc., the Bankruptcy Court extended through June 27, 2012, the Debtors' deadline to file their (a) statements of financial affairs, (b) schedules of assets and liabilities, (c) schedules of current income and expenditures, (d) schedules of executory contracts and unexpired leases and (e) lists of equity security holders. The ruling is without prejudice to the Debtors' rights to seek further extensions. The Debtors said they have begun compiling the information required to complete their Schedules and Statements. Nevertheless, as a consequence of the complexity of their business operations, coupled with the limited time and resources available, the Debtors have not yet finished gathering information. Section 521 of the Bankruptcy Code and Bankruptcy Rules 1007(a) and (c) require the Debtors to file their Schedules and Statements within 14 days after the Petition Date. Pursuant to Bankruptcy Rules 1007(a)(5) and (c), and 9006(b), the Court has authority to extend the deadline to file the Schedules and Statements "for cause." About LightSquared LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, as the Company seeks to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties, prompting the bankruptcy filing. As of the Petition Date, the Debtors employed roughly 168 people in the United States and Canada. As of Feb. 29, 2012, the Debtors had $4.48 billion in assets (book value) and $2.29 billion in liabilities. LightSquared also sought ancillary relief in Canada on behalf of all of the Debtors, pursuant to the Companies' Creditors Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended, in the Ontario Superior Court of Justice (Commercial List) in Toronto, Ontario, Canada. The purpose of the ancillary proceedings is to request the Canadian Court to recognize the Chapter 11 cases as a "foreign main proceeding" under the applicable provisions of the CCAA to, among other things, protect the Debtors' assets and operations in Canada. The Debtors named affiliate LightSquared LP to act as the "foreign representative" on behalf of the Debtors' estates. Judge Shelley C. Chapman presides over the Chapter 11 case. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to UBS AG as agent under the October 2010 facility is Melissa S. Alwang, Esq., at Latham & Watkins LLP. The ad hoc secured group of lenders under the Debtors' October 2010 facility was formed in April 2012 to negotiate an out-of- court restructuring. The members are Appaloosa Management L.P.; Capital Research and Management Company; Fortress Investment Group; Knighthead Capital Management LLC; and Redwood Capital Management. Counsel to the ad hoc secured group is Thomas E. Lauria, Esq., at White & Case LLP. Philip Falcone's Harbinger Capital Partners indirectly owns 96% of LightSquared's outstanding common stock. Harbinger and certain of its managed and affiliated funds and wholly owned subsidiaries, including HGW US Holding Company, L.P., Blue Line DZM Corp., and Harbinger Capital Partners SP, Inc., are represented in the case by Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP. LIGHTSQUARED INC: To Hold Initial Case Conference on June 11 ------------------------------------------------------------ The Bankruptcy Court will hold an initial case management conference in the Chapter 11 case of LightSquared Inc. to aid in the efficient conduct of the case. Judge Shelley C. Chapman set the case management conference in Room 610, United States Bankruptcy Court, One Bowling Green, in New York on June 11, 2012, at 2:00 p.m. About LightSquared LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, as the Company seeks to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties, prompting the bankruptcy filing. As of the Petition Date, the Debtors employed roughly 168 people in the United States and Canada. As of Feb. 29, 2012, the Debtors had $4.48 billion in assets (book value) and $2.29 billion in liabilities. LightSquared also sought ancillary relief in Canada on behalf of all of the Debtors, pursuant to the Companies' Creditors Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended, in the Ontario Superior Court of Justice (Commercial List) in Toronto, Ontario, Canada. The purpose of the ancillary proceedings is to request the Canadian Court to recognize the Chapter 11 cases as a "foreign main proceeding" under the applicable provisions of the CCAA to, among other things, protect the Debtors' assets and operations in Canada. The Debtors named affiliate LightSquared LP to act as the "foreign representative" on behalf of the Debtors' estates. Judge Shelley C. Chapman presides over the Chapter 11 case. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to UBS AG as agent under the October 2010 facility is Melissa S. Alwang, Esq., at Latham & Watkins LLP. The ad hoc secured group of lenders under the Debtors' October 2010 facility was formed in April 2012 to negotiate an out-of- court restructuring. The members are Appaloosa Management L.P.; Capital Research and Management Company; Fortress Investment Group; Knighthead Capital Management LLC; and Redwood Capital Management. Counsel to the ad hoc secured group is Thomas E. Lauria, Esq., at White & Case LLP. Philip Falcone's Harbinger Capital Partners indirectly owns 96% of LightSquared's outstanding common stock. Harbinger and certain of its managed and affiliated funds and wholly owned subsidiaries, including HGW US Holding Company, L.P., Blue Line DZM Corp., and Harbinger Capital Partners SP, Inc., are represented in the case by Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP. MARIANA RETIREMENT FUND: CNMI Also Wants Court to Dismiss Case -------------------------------------------------------------- Ferdie de la Torre at Saipan Tribune reports that the Commonwealth of the Northern Mariana Islands filed its own request seeking dismissal of the NMI Retirement Fund's Chapter 11 bankruptcy petition. The report relates the CNMI, through assistant attorney general Teresita J. Sablan, echoed the position of other parties in the case that the Fund is a government instrumentality and therefore not eligible to file for Chapter 11 bankruptcy. Ms. Sablan said in Wednesday's filing that the Fund does not fall within the definition of a person or entity eligible for Chapter 11 protection. Ms. Sablan said the CNMI government is an interested party in the proceeding since it created the Fund. The report relates Ms. Sablan said the CNMI government believes the Fund is an integral part of the Executive Branch of the government and wishes to restrain the Fund and its managers from taking actions that are beyond their powers or are contrary to Commonwealth law. As reported by the Troubled Company Reporter, requests seeking dismissal of the Fund's bankruptcy have been filed by two unnamed clients of lawyer Bruce Jorgensen and the office of the United States Trustee. Two retirees and members of the NMI Retirement Fund joined in the Dismissal Motion. A hearing has been set for June 1 on the Motions to Dismiss. 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 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. MBI ENERGY: Moody's Issues Correction to April 17 Rating Release ---------------------------------------------------------------- Moody's Investors Service issued a correction to the April 17, 2012 ratings release of MBI Energy Services, Inc. Moody's assigned a Caa1 rating to MBI's senior unsecured notes due 2020. Moody's also assigned a B3 Corporate Family Rating (CFR) and Probability of Default Rating (PDR). This is the first time that Moody's has rated MBI. The outlook is stable. Ratings Rationale "The B3 CFR is restrained by MBI's geographic and business line concentration, small scale, Moody's expectation of rapid growth with negative free cash flow, leverage which we view as high considering the company's business risk profile, and exposure to the oilfield services sector which is inherently cyclical and indirectly driven by commodity prices," commented Jonathan Kalmanoff, Moody's Analyst. "The rating is supported by MBI's market position in the rapidly growing Bakken, a thirty year operating history in the region, flexible capital spending requirements, and low operating leverage." Moody's estimates December 31, 2011 LTM adjusted debt / EBITDA to be 2.9x, pro forma for the proposed notes issuance and acquisitions through March of 2012. Assignments: Issuer: MBI Energy Services, Inc. Probability of Default Rating, Assigned B3 Corporate Family Rating, Assigned B3 Senior Unsecured Regular Bond/Debenture, Assigned a range of 63 - LGD4 to Caa1 MBI has adequate liquidity to cover expected negative free cash flow through the second quarter of 2013, considering current capital spending plans. As of April 12, 2012 (pro forma for the notes issuance) the company had $13.7 million of cash and an undrawn $100 million secured revolving credit facility which matures in 2017. There are no additional debt maturities until 2020 when the notes mature. Financial covenants under the credit facility are debt / EBITDA of no more than 3.5x, secured debt / EDITDA of no more than 2.5x, and EBITDA / interest of at least 3.0x. Considering both pro forma leverage and Moody's expectation of negative free cash flow for 2012 in the range of $50 million to $65 million at the current capital spending budget, Moody's expects that MBI will be able to maintain a comfortable level of headroom under the covenants. Substantially all of MBI's assets are pledged as security under the credit agreement, which limits the extent to which asset sales could provide a source of additional liquidity if needed. The Caa1 senior unsecured note rating reflects both the overall probability of default of MBI, to which Moody's assigns a PDR of B3, and a loss given default of LGD4-63%. The size of the senior secured revolver's priority claim relative to the senior unsecured notes results in the notes being rated one notch beneath the B3 CFR under Moody's Loss Given Default Methodology. Moody's could upgrade the ratings if MBI increases its geographic and/or business line diversification while maintaining leverage below 3.0x. Moody's could downgrade the ratings if leverage increases due to a leveraging acquisition, growth which is more rapid than anticipated, or a cyclical or regional downturn in activity which is much stronger than anticipated and debt / EBITDA appears likely to be 4.5x or higher. The principal methodology used in rating MBI Energy Services was the Global Oilfield Services Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. MBI Energy Services, Inc. is an oilfield services company headquartered in Belfield, ND. MEDIA GENERAL: Sells Newspapers, Except Tampa Assets, to Berkshire ------------------------------------------------------------------ Media General, Inc., said Thursday it has signed agreements with Berkshire Hathaway, Inc., (NYSE: BRK.A and BRK.B) for the purchase of newspapers and new financing. A subsidiary of Berkshire Hathaway, BH Media Group, will purchase all of the newspapers owned by Media General, except the Tampa group (The Tampa Tribune), for $142 million in cash. Media General said it is in discussions with other prospective buyers for its Tampa print assets. Under a separate credit agreement, Berkshire Hathaway will provide Media General with a $400 million term loan and a $45 million revolving credit line. The new loan will be used to fully repay the company's existing bank debt due March 2013 and will mature in May 2020. Media General will issue Berkshire Hathaway penny warrants for roughly 4.6 million Class A shares, which represents 19.9% of Media General's existing shares outstanding. In addition, Berkshire Hathaway has the option to nominate a director to Media General's Board of Directors. The newspapers being purchased by BH Media Group include 63 daily and weekly titles in Virginia, North Carolina, South Carolina and Alabama, in addition to digital assets, including Web sites and mobile and tablet applications. The newspapers also have a substantial commercial printing business. Following the sale to Berkshire Hathaway, Media General's operations will include 18 network-affiliated television stations and their associated Web sites. Media General owns eight NBC affiliates, eight CBS, one ABC and one CW. Six of its stations operate in the Top 40 markets in the United States, including WFLA-TV in Tampa, Florida, the country's 14th largest DMA. Media General's stations reach more than one-third of TV households in the Southeast and more than 8% of U.S. TV households. The Media General newspapers will be part of BH Media Group, along with the Omaha World-Herald Company newspapers. A sister company of the Omaha World-Herald Company, World Media Enterprises, Inc., will manage the Media General newspapers. The newspaper transaction is expected to close on June 25. The closing date of the new credit agreement is expected to be no later than May 24. Marshall N. Morton, president and chief executive officer of Media General, said, "Selling our newspapers represents a monumental change for us. We're very happy that our newspapers will become part of Berkshire Hathaway's BH Media Group, a company with a strong commitment to local news leadership and community engagement. This single transaction for virtually all of our newspapers accelerates the timing of our strategy to focus on our broadcast television business and its future growth opportunities, including digital content and Mobile DTV," said Mr. Morton. "We are extremely pleased to enter into a new financing partnership with the highly respected Berkshire Hathaway organization. Our new credit agreement addresses Media General's long-term capital needs and provides the company with significant financial and operating flexibility," said Mr. Morton. "These newspapers are great institutions and powerful brands in their respective markets," said Terry Kroeger, president of BH Media Group. "We are honored to have the opportunity to work with our new colleagues as we continue to produce top-notch news and advertising products in both print and digital platforms." "In towns and cities where there is a strong sense of community, there is no more important institution than the local paper," said Warren Buffett, Chairman of Berkshire Hathaway. "The many locales served by the newspapers we are acquiring fall firmly in this mold and we are delighted they have found a permanent home with Berkshire Hathaway." The New York Times notes this is the second newspaper deal that Berkshire, based in Omaha, has reached in the last six months. In November, Mr. Buffett struck a deal to buy The Omaha World-Herald Company, the publisher of his hometown paper, for a reported $200 million. NY Times also notes Mr. Buffett had hinted of future newspaper deals at his company's annual shareholders convention this month, telling investors, "We may buy more." Berkshire also holds stakes in The Buffalo News and The Washington Post Company. Media General said that in recent years its model has shifted toward its broadcast and digital businesses. Broadcast television accounted for 77% of total Platform Cash Flow for the full year 2011; in the first quarter of this Political year, it accounted for 87%. Mr. Morton said Media General is capitalizing well on this year's event-driven revenue opportunities in broadcast. The company expects to generate $40 million to $45 million in political revenues and will benefit from operating in the key battleground states of Ohio, Florida, Virginia and North Carolina. Super Bowl revenues on its eight NBC stations were strong and the company expects Summer Olympics revenues will be strong as well. Retransmission fees are expected to reach $32 million to $37 million, compared with $21 million last year, as a result of rate increases in renewed agreements. "Longer term, we have a solid plan for significantly increasing our broadcast cash flow margins and total company EBITDA," said Mr. Morton. A transition will take place over several months, in coordination with Media General personnel. World Media Enterprises president Douglas Hiemstra will closely oversee the transition and operations of the acquired newspapers for Berkshire Hathaway. After transaction fees and retaining $25 million in cash, Media General will use the proceeds from the newspaper sale to offer to repay existing senior secured notes, with any remaining funds to be used for repayment of the new term loan at par. The sale is subject to customary closing conditions, including Federal Trade Commission approval under the Hart-Scott-Rodino antitrust act. The $400 million first lien term loan will have an interest rate of 10.5%, which could step down to 9% if total leverage were to reach 3.50x. The new loan will be issued at a discount of 11.5% and is secured pari passu with the company's existing 11-3/4% senior secured notes due 2017. The existing term loan in the amount of roughly $364 million will be fully repaid the same day the new credit agreement becomes effective. Media General now expects total cash interest expense in 2012 will be roughly $67 million. Total interest expense, including non-cash amortization of issue discount, new issuance fees, and the warrants, is expected to be $80 million in 2012. Media General's financial advisor is Peter J. Solomon Company. JPMorgan was the sole arranger and syndication agent on financing. About Media General Richmond, Virginia-based Media General Inc. (NYSE: MEG) -- http://www.mediageneral.com/-- is an independent communications company with interests in newspapers, television stations and interactive media in the United States. The Company reported a net loss of $74.32 million for the fiscal year ended Dec. 25, 2011, a net loss of $22.64 million for the fiscal year ended Dec. 26, 2010, and a net loss of $35.76 million for the fiscal year ended Dec. 27, 2009. As reported by the Troubled Company Reporter on April 12, 2012, Moody's Investors Service downgraded, among other things, Media General's Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Caa1 from B3, concluding the review for downgrade initiated on Feb. 13, 2012. The downgrade reflects the significant increase in interest expense associated with the company's credit facility amend and extend transaction and an assumed issuance of at least $225 million of new notes, which will result in limited free cash flow generation and constrain Media General's capacity to reduce its very high leverage. The weak free cash flow and high leverage create vulnerability to changes in the company's highly cyclical revenue and EBITDA generation. MERCURY COS: Lawsuit Over Sale of Colorado Units Goes to Trial -------------------------------------------------------------- In the case, MERCURY COMPANIES, INC., Plaintiff/Counter-Defendant, v. FNF SECURITY ACQUISITION, INC., Defendant/Counter-Claimant and FIDELITY NATIONAL TITLE COMPANY, USA DIGITAL SOLUTIONS, INC., AMERICAN HERITAGE TITLE AGENCY, INC., and MERCURY SERVICES OF UTAH, INC. Defendants, Adv. Proc. No. 10-1133 (Bankr. D. Colo.), both the plaintiff and the defendants failed to advance their motions for partial summary judgment. Bankruptcy Judge Michael E. Romero said summary judgment is inappropriate for either FNF or Mercury as there are genuine issues of material fact that remain to be tried. Mercury entered into a stock purchase agreement with Fidelity under which Fidelity would purchase from Mercury all the outstanding capital stock of certain of Mercury's subsidiaries, specifically Defendants USA Digital Solutions, Inc., American Heritage Title Agency, Inc., Mercury Settlement Services of Utah, Inc., and United Title Company, Inc., and take on the Colorado Subsidiaries' ongoing operational liabilities. The Amended Complaint alleges Fidelity did not fully perform under the stock purchase agreement. In addition, it alleges Mercury paid approximately $1.68 million to the Colorado Subsidiaries after the transaction with Fidelity closed, for transactions which had occurred pre-closing, in the belief the payment was required under the stock purchase agreement. The Amended Complaint seeks 1) recovery of a fraudulent transfer against Fidelity; 2) damages for breach of contract against Fidelity; 3) damages from alleged breach of implied covenant of good faith and fair dealing by Fidelity; 4) recovery of the $1.68 million as a fraudulent transfer against the Colorado Subsidiaries; and 5) avoidance of the $1.68 million payment to the Colorado Subsidiaries as a preference under 11 U.S.C. Sec. 547. The Defendants' Answer to the Amended Complaint admits Mercury was in a difficult financial position in August 2008, and admits Comerica Bank's sweep of Mercury's bank accounts and the closure of Mercury's California, Arizona, and Texas subsidiaries rendered Mercury insolvent. The Defendants also admit Fidelity entered into a stock purchase agreement to purchase the outstanding stock of the Colorado Subsidiaries. Fidelity wired $1 million of the $5 million purchase price directly to Mercury, and wired an additional $1,484,004 to Comerica Bank, but refused to pay the remaining $2,516,000. However, the Defendants deny knowledge as to whether Mercury was insolvent on the date of the sale or as a result of the sale, and deny the $5 million purchase price was less than equivalent value. They dispute assertions of breach of contract by Fidelity, and deny the transfers of the funds of the Colorado Subsidiaries constituted fraudulent transfers or preferences. The Defendants raise affirmative defenses: 1) Mercury's claims are subject to the doctrine of estoppel; 2) Mercury's claims are barred due to a failure of consideration; 3) Mercury's claims are barred due to laches; 4) Mercury has waived the claims; 5) Mercury's claims are barred in whole or in part due to failure to comply with a condition precedent; 6) Mercury has not stated a cause of action upon which relief may be granted; 7) Mercury's claims are barred in whole or in party by the applicable statue of limitations; 8) the alleged fraudulent transfers by Mercury to Defendant are not avoidable because the Defendants took such transfers for value and in good faith; 9) the alleged preferential transfers are not avoidable because any such payments were intended by the parties to be contemporaneous exchanges for new value, and were in fact such exchanges; and 10) the alleged preferential transfers are not avoidable because they were made with earmarked funds. A copy of Judge Romero's May 15, 2012 Order is available at http://is.gd/v1hQk1from Leagle.com. About Mercury Companies Inc. Denver, Colorado-based Mercury Companies Inc. was a holding company primarily for subsidiaries that until recently were involved in the settlement services industry, including title services, escrow services, real estate services, mortgage services, mortgage document preparation, and settlement services software development. Mercury has since wound down or sold its operations. Mercury Cos. filed for Chapter 11 protection on Aug. 28, 2008. Two months later, six subsidiaries, namely Arizona Title Agency, Inc., Financial Title Company, Lenders Choice Title Company, Lenders First Choice Agency, Inc., Texas United Title, Inc., dba United Title of Texas and Title Guaranty Agency of Arizona, Inc., also filed voluntary Chapter 11 petitions. The units' cases are jointly administered with Mercury's (Bankr. D. Colo. Lead Case No. 08-23125). Lawywers at Brownstein Hyatt Farber Schreck, LLP, led by Daniel J. Garfield, Esq., served as the Debtors' bankruptcy counsel. Lars H. Fuller, Esq., at Baker Hostetler, served as the official committee of unsecured creditors' counsel. Mercury Companies disclosed $21.8 million in assets and $63.6 million in liabilities as of the Petition Date. The Bankruptcy Court confirmed the Debtors' liquidating Chapter 11 Plan, as amended, on Dec. 13, 2010, after objections by the Texas Comptroller of Public Accounts and the former employee creditors were withdrawn. Under the Plan, Mercury would set $25 million cash aside in a fund for distribution to general unsecured creditors. Mercury estimated that at the conclusion of the claims resolution process the total allowed general unsecured claims would be $35 million. The initial $25 million must be sufficient to pay unsecured creditors roughly 70% of their claims (although it will not be paid all at once because of the need to reserve for disputed claims). Mercury's remaining activities would generate more cash so that eventually creditors must receive greater distributions. MOHEGAN TRIBAL: Reports $14.6 Million Net Income in March 31 Qtr. ----------------------------------------------------------------- Mohegan Tribal Gaming Authority filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $14.61 million on $351.15 million of net revenues for the three months ended March 31, 2012, compared with net income of $24.74 million on $347.94 million of net revenues for the same period during the prior year. The Authority reported net income of $38.28 million on $703.03 million of net revenues for the six months ended March 31, 2012, compared with net income of $37.22 million on $683.54 million of net revenues for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $2.27 billion in total assets, $2.06 billion in total liabilities and $211.30 million in total capital. A copy of the Form 10-Q is available for free at: http://is.gd/v1fKWD About Mohegan Tribal Gaming Authority Mohegan Tribal Gaming Authority -- http://www.mtga.com/-- is an instrumentality of the Mohegan Tribe of Indians of Connecticut, or the Tribe, a federally-recognized Indian tribe with an approximately 507-acre reservation situated in Southeastern Connecticut, adjacent to Uncasville, Connecticut. The Authority has been granted the exclusive authority to conduct and regulate gaming activities on the existing reservation of the Tribe, including the operation of Mohegan Sun, a gaming and entertainment complex located on a 185-acre site on the Tribe's reservation. Through its subsidiary, Downs Racing, L.P., the Authority also owns and operates Mohegan Sun at Pocono Downs, a gaming and entertainment facility located on a 400-acre site in Plains Township, Pennsylvania, and several off-track wagering facilities located elsewhere in Pennsylvania. PricewaterhouseCoopers LLP, in Hartford, Connecticut, expressed substantial doubt about the Authority's ability to continue as a going concern. The independent auditors noted that of the Authority's total debt of $1.6 billion as of Sept. 30, 2011, $811.1 million matures within the next twelve months, including $535.0 million outstanding under the Authority's Bank Credit Facility which matures on March 9, 2012, and the Authority's $250.0 million 2002 8% Senior Subordinated Notes which mature on April 1, 2012. In addition, a substantial amount of the Authority's other outstanding indebtedness matures over the following three fiscal years. * * * As reported by the TCR on March 14, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Uncasville, Conn.-based Mohegan Tribal Gaming Authority (MTGA) to 'B-' from 'SD'. "The upgrade to 'B-' reflects our reassessment of the Authority's capital structure following the completion of its comprehensive debt refinancing plan," said Standard & Poor's credit analyst Melissa Long. "While the completed transactions were not a de- leveraging event, the post-exchange capital structure substantially reduced MTGA's debt maturities over the next few years," S&P said. MOMENTIVE PERFORMANCE: Moody's Rates Senior Secured Notes 'B2' -------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to the guaranteed senior secured notes due 2020 of Momentive Performance Material's Inc. (MPM). Proceeds of from the notes will be used to repay $250 million of its guaranteed senior secured term loan due 2015 and $130 million of its guaranteed senior secured second lien notes due 2014, as well as adding $50 million cash to the balance sheet. The new notes will have a lien on the same collateral as the existing second lien notes, but rank ahead of those notes with regard to payment. However, the new notes will be contractually subordinated to the first lien term loan. The company's outlook is stable. "While credit metrics remain weak, this transaction extends the debt maturities, supplies additional liquidity, and provides extra headroom under the bank facility's secured leverage covenant," stated John Rogers, Senior Vice President at Moody's. Moody's changed the LGD assessments on the outstanding debt as a result of changes to the company's debt balances as a result of this transaction. Ratings assigned Momentive Performance Materials Inc. Guaranteed senior secured notes due 2020 at B2 (LGD2, 27%) Ratings list: Momentive Performance Materials Inc. Corporate Family Rating at Caa1 Probability of Default Rating at Caa1 Speculative Grade Liquidity Rating at SGL-3 Senior Secured Letter of Credit Facility due 2013 to B1 (LGD1, 9%) from B1 (LGD2, 12%) Guaranteed senior secured revolver due 2014 to B1 (LGD1, 9%) from B1 (LGD2, 12%) Guaranteed senior secured term loan due 2015 to B1 (LGD1, 9%) from B1 (LGD2, 12%) Guaranteed senior secured second lien notes due 2014 to B3 (LGD3, 43%) from B3 (LGD3, 40%) Guaranteed senior unsecured notes due 2021 to Caa1 (LGD4, 58%) from Caa1 (LGD4, 57%) Senior subordinated notes due 2016 at Caa3 (LGD5, 84%) The outlook is stable. Ratings Rationale MPM's Caa1 CFR reflects a slow recovery in EBITDA in 2012 as a result of new industry capacity and weaker than anticipated demand in key downstream markets - automotive and electronics. While quarterly EBITDA should improve to the $70-90 million per quarter for the remainder of the year, credit metrics will continue to be extremely weak. MPM's leverage (Debt/EBITDA of 12.5x at March 31, 2012), outweigh its strong business profile and the expectation that earnings and cash flow will improve over the next four quarters. As of March 31, 2012 the company's weak credit metrics include minimal Retained Cash Flow/Debt (RCF/Debt; less than 1%) and negative Free Cash Flow/Debt (FCF/Debt). The aforementioned ratios reflect Moody's Global Standard Adjustments, which include the capitalization of pensions and operating leases, as well as MPM's HoldCo PIK debt (the PIK debt has a value of $708 million at March 31, 2011 and is accreting at 11% per year, or roughly $80 million/year). The stable outlook reflects that operating performance will improve modestly through the year, as well as the good liquidity position with no near-term maturities. Moody's expects continued soft demand through 2012 and anticipates a slower recovery in volumes, such that unadjusted EBITDA could remain below $300 million on an LTM basis for several quarters. The ratings would decline if the company's EBITDA is likely to remain below $300 million into 2013, or if cash and revolver availability falls, or appears likely to fall, below $200 million for a sustained period. Moody's expects that the company will continue to reduce costs and take additional actions to improve its financial performance over the next year. While an upgrade is unlikely in the near-term, if MPM is able to raise its EBITDA above $450 million/year, Moody's would consider a higher rating. Moody's would also look for FCF/Debt above 2% and RCF/Debt above 6% on a sustainable basis. The Speculative Grade Liquidity Rating of SGL-3 results from expectations for negative free cash flow through the year as volumes will continue to be pressured by weak demand in certain end markets and new industry capacity. The addition of $50 million to the balance sheet from this debt issuance will provide MPM with needed liquidity, especially if the recovery is slower than currently expected. MPM's liquidity is supported by a pro forma cash balance of $172 million and revolver availability of $259 million at March 31, 2012. There is little concern regarding MPM's ability to maintain compliance with covenants given the additional reduction in first lien debt from this debt offering. On a pro forma basis debt maturities will be relatively small through the end of 2014 (roughly $160 million) but increase significantly in 2015 to $740. The principal methodology used in rating Momentive Performance Materials Inc. was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Momentive Performance Materials Inc., headquartered in Albany, New York, is the second largest producer of silicones and silicone derivatives worldwide. The company has two divisions: silicones (which accounted for roughly 90% of revenues) and quartz. Revenues were roughly $2.6 billion for the LTM ending March 31, 2012. MOUNTAIN PROVINCE: Incurs C$4.4 Million Net Loss in First Quarter ----------------------------------------------------------------- Mountain Province Diamonds Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 6-K disclosing a net loss of C$4.40 million for the three months ended March 31, 2012, compared with a net loss of C$1.60 million for the same period during the prior year. Mountain Province reported a net loss of C$11.53 million in 2011, compared with a net loss of C$14.53 million in 2010. The Company's balance sheet at March 31, 2012, showed C$66.84 million in total assets, C$13.13 million in total liabilities, and C$53.70 million in total shareholders' equity. The Company's mineral assets are in the exploration and evaluation stage and, as a result, the Company has no source of revenues. In the three months ended March 31, 2012, the Company incurred losses and will be required to obtain additional sources of financing to complete its business plans going into the future. Although the Company had working capital of $10,888,002 at March 31, 2012, including $17,649,897 of cash and short-term investments, the Company has insufficient capital to finance its operations and the Company's costs of the Gahcho Kue Project over the next 12 months. The Company is currently investigating various sources of additional liquidity to increase the cash balances required for ongoing operations over the foreseeable future. These additional sources include, but are not limited to, share offerings, private placements, credit facilities, and debt, as well as exercises of outstanding options. However, there is no certainty that the Company will be able to obtain financing from any of those sources. These conditions indicate the existence of a material uncertainty that results in substantial doubt as to the Company's ability to continue as a going concern. For the year ended Dec. 31, 2011, KPMG LLP, in Toronto, Canada, noted that the Company has incurred a net loss in 2011 and expects to require additional capital resources to meet planned expenditures in 2012 that raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 6-K is available for free at: http://is.gd/JHbOZz About Mountain Province Headquartered in Toronto, Canada, Mountain Province Diamonds Inc. (TSX: MPV, NYSE AMEX: MDM) -- http://www.mountainprovince.com/-- is a Canadian resource company in the process of permitting and developing a diamond deposit known as the "Gahcho Kue Project" located in the Northwest Territories of Canada. The Company's primary asset is its 49% interest in the Gahcho Kue Project. MPG OFFICE: Caspian Holds 9.2% of Series A Preferred Stock ---------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Caspian Capital LP and its affiliates disclosed that, as of May 14, 2012, they beneficially own 898,047 shares of 7.625% Series A Cumulative Redeemable Preferred Stock, par value $.01 per share, of MPG Office Trust, Inc., representing 9.2% of the shares outstanding. The percentage was calculated based upon an aggregate of 9,730,370 shares of Preferred Stock outstanding as of March 31, 2012. A copy of the filing is available for free at http://is.gd/4J77YR About MPG Office Trust MPG Office Trust, Inc., fka Maguire Properties Inc. -- http://www.mpgoffice.com/-- is the largest owner and operator of Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high- quality office properties in the Southern California market. MPG Office Trust is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. The Company has been focused on reducing debt, eliminating repayment and debt service guarantees, extending debt maturities and disposing of properties with negative cash flow. The first phase of the Company's restructuring efforts is substantially complete and resulted in the resolution of 18 assets, relieving the Company of approximately $2.0 billion of debt obligations and potential guaranties of approximately $150 million. The Company reported net income of $98.22 million in 2011, compared with a net loss of $197.93 million in 2010. The Company's balance sheet at March 31, 2012, showed $2.19 billion in total assets, $3.11 billion in total liabilities, and a $913.35 million total deficit. MUNICIPAL MORTGAGE: Incurs $8.8-Mil. Net Loss in First Quarter -------------------------------------------------------------- Municipal Mortgage & Equity, LLC, filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $8.87 million on $25.35 million of total revenue for the three months ended March 31, 2012, compared with a net loss of $16.52 million on $24.76 million of total revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $1.83 billion in total assets, $1.12 billion in total liabilities and $714.15 million in total equity. A copy of the Form 10-Q is available for free at: http://is.gd/UUDGk8 About Municipal Mortgage Baltimore, Md.-based Municipal Mortgage & Equity, LLC (Pink Sheets: MMAB) -- http://www.munimae.com/-- was organized in 1996 as a Delaware limited liability company and is classified as a partnership for federal income tax purposes. When the Company became a publicly traded company in 1996, it was primarily engaged in originating, investing in and servicing tax- exempt mortgage revenue bonds issued by state and local government authorities to finance affordable multifamily housing developments. Since then, the Company made several acquisitions that significantly expanded its business. However, in 2008, due to the financial crisis, the Company began contracting its business. The Company has sold, liquidated or closed down all of its different businesses except for its bond investing activities and certain assets and residual interests related to the businesses and assets that the Company sold due to its liquidity issues. The Company has a majority position in International Housing Solutions S.a.r.l., a partnership that was formed to promote and invest in affordable housing in overseas markets. In addition, at Dec. 31, 2010, the Company has an unfunded equity commitment of $5.1 million, or 2.67% of total committed capital with respect to its role as the general partner to the South Africa Workforce Housing Fund SA I ("SA Fund"). The SA Fund was formed to invest directly or indirectly in housing development projects and housing sector companies in South Africa. A portion of the funding of SA Fund is participating debt provided by the United States Overseas Private Investment Corporation, a federal government entity, and the remainder is equity primarily invested by institutional and large private investors. The Company expects to continue this business. Municipal Mortgage reported a net loss of $18.81 million in 2011, compared with a net loss of $72.45 million in 2010. For 2011, KPMG LLP, in Baltimore, Maryland, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has been negatively impacted by the deterioration of the capital markets and has liquidity issues which have resulted in the Company having to sell assets and work with its creditors to restructure or extend its debt arrangements. Bankruptcy Warning The Company said in its 2011 annual report that although the Company has been able to extend, restructure and obtain forbearance agreements on various debt and interest rate swap agreements, these extensions, restructurings and forbearance agreements are generally short-term in nature and do not by themselves provide a viable long-term solution to the Company's liquidity issues. If the Company is not able to negotiate other arrangements, the Company will not be able to pay the interest on certain of its subordinate debt following the rate increases that are scheduled to occur in April and May of 2012. The Company's future cash flows are not expected to be sufficient to satisfy the overall debt service required under the subordinate debt following such increases, and the Company would be unable to repay the indebtedness if the subordinate debt were accelerated. In the event management is not successful in restructuring or settling its remaining non-bond related debt, or if the bond portfolio net interest income and the common equity distributions the Company receives from its subsidiaries are substantially reduced, the Company may have to consider seeking relief through reorganization under the U.S. Bankruptcy Code. NADYA SULEMAN: Incomplete Documents Cue Judge to Reject Case ------------------------------------------------------------ The Associated Press reports that a judge threw out Nadya Suleman's bankruptcy claim after she failed to file the proper paperwork to show she can't pay as much as $1 million in debt. AP notes creditors can move to collect what they say they're owed, and a pending foreclosure can go ahead against the La Habra, Calif., house Ms. Suleman lives in with her 14 children. According to AP, Ms. Suleman's case was thrown out because she didn't file a dozen financial documents and statements required to prove bankruptcy. In her initial filing April 30, Ms. Suleman estimated that she owed as much as $1 million that she is unable to repay. AP notes Ms. Suleman had sought protection from her debts under Chapter 7 bankruptcy, which means a court-appointed trustee would have liquidated her assets to pay off creditors before she is discharged from most of her debts. She owed money to more than 20 parties, including utility companies, her father and a Christian school. Ms. Suleman is an unemployed single mother who became famous after giving birth to octuplets in 2009. Her octuplets are the world's longest living set, according to the report. NB&J LLC: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------ Debtor: NB&J, LLC dba Sleep Inn 2799 Airport Way Boise, ID 83705 Bankruptcy Case No.: 12-01134 Chapter 11 Petition Date: May 14, 2012 Court: United States Bankruptcy Court District of Idaho (Boise) Judge: Jim D. Pappas Debtor's Counsel: Patrick John Geile, Esq. FOLEY FREEMAN, PLLC P.O. Box 10 Meridian, ID 83680 Tel: (208) 888-9111 Fax: (208) 888-5130 E-mail: pgeile@foleyfreeman.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/idb12-01134.pdf The petition was signed by Avtar Jassel, member/manager. NEWLAND INT'L: Fitch Cuts Rating on $220-Mil. Sr. Notes to 'Dsf' ---------------------------------------------------------------- Fitch Ratings has downgraded the rating on the notes issued by Newland International Properties, Corp as follows: -- US$220 million senior secured notes due 2014 to 'Dsf' from 'Csf'. Fitch's rating addresses the timely payment of interest on a semiannual basis and ultimate payment of principal at maturity. Fitch was notified by management that no scheduled payment on the notes was made on May 15, 2012. As a result Fitch has downgraded the bonds to 'Dsf'. Fitch will continue to monitor this transaction for additional information in regard to the project's development and restructuring of the notes as part of the ongoing surveillance process. Newland is the real estate development company established to develop the Trump Ocean Club International Hotel & Tower (TOC), a multi-use luxury tower located on the Punta Pacifica Peninsula in Panama City, Panama. The TOC building was officially opened to the public on July 6, 2011. NORD RESOURCES: Incurs $2.5 Million Net Loss in First Quarter ------------------------------------------------------------- Nord Resources Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $2.50 million on $2.37 million of net sales for the three months ended March 31, 2012, compared with a net loss of $2.27 million on $4.75 million of net sales for the same period during the prior year. Nord Resources reported a net loss of $10.31 million on $14.48 million of net sales in 2011, compared with a net loss of $21.20 million on $28.64 million of net loss in 2010. The Company's balance sheet at March 31, 2012, showed $54.81 million in total assets, $65.15 million in total liabilities and a $10.34 million total stockholders' deficit. Going Concern Nedbank, the Company's senior lender, has declined to extend the forbearance agreement with respect to the scheduled principal and interest payments that were due between March 31, 2010, and March 31, 2012, under the Company's $25,000,000 secured term-loan credit facility. Accordingly, the Company has been in default of its obligations under the Credit Agreement with Nedbank since May 14, 2010. The full amount of the outstanding principal and accrued and unpaid interest is included in the Company's current liabilities, together with any additional amounts payable under the Credit Agreement. As of the date of these condensed consolidated financial statements, Nedbank has not exercised its rights under the Credit Agreement to provide notification of the Company's default condition or commence foreclosure actions on the collateral held, which represents substantially all of the assets of the Company. Nedbank Capital has also declined to extend the forbearance agreement regarding the Company's failure to make the timely monthly settlement payments beginning in March of 2010 through Dec. 31, 2011, under the copper hedge agreement. As of March 31, 2012, the amount due to Nedbank Capital related to these settlements is $16,106,691. The Company's continuation as a going concern is dependent upon its ability to refinance the obligations under the Credit Agreement with Nedbank and the Copper Hedge Agreement with Nedbank Capital, thus curing the current state of default under the respective agreements, raise additional capital, and on its ability to produce copper to sell at a level where the Company becomes profitable and generates cash flows from operations. The Company's continued existence is dependent upon its ability to resume full operations and achieve its operating plan. If management cannot achieve its operating plan because of sales shortfalls, a reduction in copper prices, or other unfavorable events, the Company may find it necessary to dispose of assets, or undertake other actions as may be appropriate. A copy of the Form 10-Q is available for free at: http://is.gd/XunDOw About Nord Resources Based in Tuczon, Arizona, Nord Resources Corporation (TSX:NRD/OTCBB:NRDS.OB) -- http://www.nordresources.com/-- is a copper mining company whose primary asset is the Johnson Camp Mine, located approximately 65 miles east of Tucson, Arizona. Nord commenced mining new ore on February 1, 2009. On June 2, 2010, Nord Resources appointed FTI Consulting to advise on refinancing structures and strategic alternatives. NORMAN REGIONAL: Moody's Upgrades Long-Term Bond Rating From Ba1 ---------------------------------------------------------------- Moody's Investors Service has upgraded to Baa3 from Ba1 the long- term bond rating assigned to Norman Regional Hospital Authority's (OK) $64.8 million of outstanding bonds. The outlook is revised to positive from stable. Ratings Rationale The upgrade to Baa3 from Ba1 and the positive outlook reflects Norman Regional Hospital Authority's (NRHA) dominant market position, multi-year improvement in operating performance and absolute cash relative to the rating category, and modest capital plans going forward. These factors are offset by NRHA's still high debt load, leveraged balance sheet and declining volumes. However, the positive outlook indicates Moody's confidence that NRHA will be able to continue to deleverage and maintain favorable operations that could lead to a potential upgrade within the next two years. STRENGTHS * NRHA is a three hospital system with 60% dominant market share in its primary care service area of Cleveland County, OK; NRHA's facilities in the City of Norman are protected by a local city ordinance restricting the entrance of new inpatient competitors. * Multi-year improved operating performance with 10.9% operating cash flow margin in fiscal year (FY) 2011 up slightly from 10.2% in FY 2010 (Baa3 median is 6.6%) as a result of expense reductions and revenue growth. * Improved balance sheet measures relative to the rating category with 110 days cash on hand at March 31, 2012 up from 106 days cash on hand at fiscal yearend (FYE) 2011 (Baa3 median is 97 days); although cash to debt is very weak at 39.4% at FY 2011 (Baa3 median is 83.8%). * NRHA is expected to be a net recipient from the new Oklahoma state Medicaid provider fee program through at least FY 2014. Through nine months FY 2012, Norman had received a net benefit of $5.3 million. * Conservative fixed rate debt structure with no derivatives exposure. * Located 20 miles south of Oklahoma City in the very favorable demographic area of the Aa2-rated City of Norman; unemployment is a low 4.4% and the city's economy is anchored by the University of Oklahoma, the oil and gas industry and NRHA. CHALLENGES * Very high debt burden as reflected by a low 2.20 times maximum annual debt service (MADS) coverage ratio in FY 2011, though improvement was shown through nine months FY 2012 of 2.97 times (Baa3 median is 2.7 times), 68.4% debt to operating revenue (Baa3 median is 34.5%) and unfavorably high 7.6 times debt-to-cash flow ratio (Baa3 median is 4.9 times) at FY 2011. * Declining inpatient admissions in each of the last four fiscal years with 10.1% decline in FY 2011 compared to FY 2008 largely driven by greater shift to observation stays to Medicare RAC audits; although outpatient surgeries grew 14% in FY 2011 due in part to the 2010 opening of the new HealthPlex Hospital. * Competition for more tertiary services from Oklahoma City from 307-bed Integris Southwest Medical Center (Integris Health Obligated Group is rated Aa3), 555-bed OU Medical Center (HCA- owned) and Midwest Regional (HMA owned). * Defined contribution pension plan; prior defined benefit pension plan frozen in December 2003 saw shift in last several years to underfunding of $16.1 million (60.6% funded) in FY 2011 compared to nearly $507,000 overfunding (101.3% funded) in FY 2008. Outlook The positive outlook reflects indicates Moody's belief that NRHA will continue to deleverage and maintain strong operations that could lead to a potential upgrade within the next two years. WHAT COULD MAKE THE RATING GO UP Material and sustained operating performance resulting in reduced leverage, improvement in liquidity, increased volume and net patient revenue growth. WHAT COULD MAKE THE RATING GO DOWN A decline in operating performance or further decline in liquidity indicators, increase in debt without improved operating performance levels, inability to abate the decline in inpatient volumes or uncertainty in government reimbursement. The principal methodology used in this rating was Not-For-Profit Healthcare Rating Methodology published in March 2012. NORTHCORE TECHNOLOGIES: Annual Meeting Scheduled for June 6 ----------------------------------------------------------- The annual meeting of the shareholders of Northcore Technologies Inc. will be held in the Gallery Room, at the TMX Broadcast Centre, The Exchange Tower, 130 King Street West, Toronto, Ontario M5X 1J2, on Wednesday, June 6, 2012, at 3:00 p.m., Toronto time, for these purposes: 1. to receive and consider the Company's financial statements for the financial year ended Dec. 31, 2011, together with the report of the auditors thereon; 2. to elect directors for the ensuing year; 3. to appoint auditors for the ensuing year and to authorize the Audit Committee of the Board of Directors to fix their remuneration; 4. to consider and, if deemed advisable, to pass a resolution authorizing an increase in the maximum number of options to be granted under the Company's Stock Option Plan to 15 percent of the common shares outstanding; and 5. to transact further and other business as may properly come before the Meeting or any adjournment thereof. 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 CALIFORNIA BANCORP: Delays Form 10-Q for First Quarter --------------------------------------------------------------- Northern California Bancorp, Inc., said it was not be able to file its quarterly report on Form 10-Q for the quarter ended March 31, 2012, by May 14, 2012, the prescribed due date of the Report, because additional time is needed to complete the review of its financial statements included in the Report. About Northern California Bancorp Monterey, Calif.-based Northern California Bancorp owns 100% of the stock of Monterey County Bank, Monterey, California, The Corporation, as a bank holding company, engages in commercial banking through the Bank. The Bank is subject to a Consent Order that, among other things, establishes higher minimum capital requirements than those established under the prompt corrective action framework. As of Dec. 31, 2011, the most recent notification from the Federal Deposit Insurance Corporation (FDIC) categorized the Bank as adequately capitalized under the regulatory framework for prompt corrective action. Although the Bank's capital ratios meet the definition of "well capitalized", the FDIC is permitted, by regulation, to lower an institution's capital adequacy rating by one level, if it determines the institution has a higher risk profile. The Bank received such notification from the FDIC during 2010. The Company reported a net loss of $13.65 million for 2011, compared with a net loss of $706,000 for 2010. The Company's balance sheet at Dec. 31, 2011, showed $245.68 million in total assets, $242.08 million in total liabilities, and stockholders' equity of $3.60 million. OMNICOMM SYSTEMS: Reports $3.8 Million Revenue in First Quarter --------------------------------------------------------------- OmniComm Systems, Inc., reported its results of operations for the quarter ended March 31, 2012. Revenue for the quarter ended March 31, 2012, totalled $3.8 million, a 14% increase over the results for the first quarter of 2011 and a 5% improvement over Q4 2011. "The Q1 results demonstrate our continued ability to grow our revenue year-over-year," remarked Stephen Johnson, President and Chief Operating Officer. "We expect this trend to continue over the remainder of 2012. As the economy improves, we expect to see an increased demand for our TrialMaster, TrialOne and eClinical Suite software solutions from both existing and new clients." For the quarter ended March 31, 2012, the company reported positive EBITDA of $53,772 which represents a 147% improvement over the Q1 2011 EBITDA of $(114,865). "The EBITDA improvement is the result of our ability to grow our revenue while maintaining our cost structure in line with our revenue," commented Ronald Linares, Executive Vice President and Chief Financial Officer. "Our performance in Q1 2012 continues to build on our success in 2011, the best year in the company's history," stated Cornelis F. Wit, CEO. "The entire company is dedicated to providing exceptional products and services to our clients. Over the past 18 months we have expanded the capabilities of our product offerings and successfully attracted and retained the talented employees that will allow us to continue to provide innovative EDC solutions to the marketplace." A copy of the press release is available for free at: http://is.gd/oBuAEn About OmniComm Systems Ft. Lauderdale, Fla.-based OmniComm Systems, Inc. (OTC: OMCM.OB) -- http://www.OmniComm.com/-- provides customer-driven Internet solutions to pharmaceutical, biotechnology, research and medical device organizations that conduct life changing clinical trial research. OmniComm Systems, Inc has U.S. headquarters in Fort Lauderdale, Fla. and European headquarters in Bonn, Germany, with satellite offices in New Jersey and the United Kingdom, as well as sales offices throughout the U.S. and Europe. The Company reported a net loss of $3.52 million in 2011, compared with a net loss of $3.13 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $3.77 million in total assets, $24.97 million in total liabilities and a $21.19 million total shareholders' deficit. Webb & Company, P.A., in Boynton Beach, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a net loss attributable to common shareholders of $3.73 million, a negative cash flow from operations of $311,000, a working capital deficiency of $6.68 million and a stockholders' deficiency of $21.2 million. OVERLAND STORAGE: Incurs $3.8 Million Net Loss in March 31 Qtr. --------------------------------------------------------------- Overland Storage, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $3.82 million on $15.15 million of net revenue for the three months ended March 31, 2012, compared with a net loss of $3.36 million on $17.12 million of net revenues for the same period during the prior year. The Company reported a net loss of $13.46 million on $44.33 million of net revenues for the nine months ended March 31, 2012, compared with a net loss of $10.77 million on $52.62 million of net revenues for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $41.32 million in total assets, $37.30 million in total liabilities and $4.01 million in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/ILXKFJ About Overland Storage San Diego, Calif.-based Overland Storage, Inc. (Nasdaq: OVRL) -- http://www.overlandstorage.com/-- is a global provider of unified data management and data protection solutions designed to enable small and medium enterprises (SMEs), corporate departments and small and medium businesses (SMBs) to anticipate and respond to change. The Company reported a net loss of $14.50 million on $70.19 million of net revenue for the fiscal year ended June 30, 2011, compared with a net loss of $12.96 million on $77.66 million of net revenue during the prior fiscal year. Moss Adams LLP, in San Diego, California, noted that the Company's recurring losses and negative operating cash flows raise substantial doubt about the Company's ability to continue as a going concern. PACIFIC MONARCH: Case Status Conference Continued Until July 19 --------------------------------------------------------------- The Hon. Scott C. Clarkson of the U.S. Bankruptcy Court for the Central District of California continued until July 19, 2012, at 10 a.m., the status conference relating to the Chapter 11 case of Pacific Monarch Resorts, Inc. The Debtor is required to make a report on the status of the case. About Pacific Monarch Pacific Monarch Resorts, Inc., and its affiliated debtors operate a "timeshare business" business. The Debtors filed voluntary Chapter 11 petitions (Bankr. C.D. Calif. Lead Case No. 11-24720) on Oct. 24, 2011, disclosing $100 million to $500 million in both assets and debts. The affiliated debtors are Vacation Interval Realty Inc., Vacation Marketing Group Inc., MGV Cabo LLC, Desarrollo Cabo Azul, S. de R.L. de C.V., and Operadora MGVM S. de R.L. de C.V. Based in Laguna Hills, California, Pacific Monarch and its affiliates generate revenue primarily from the sale and financing of "vacation ownership points" in a timeshare program commonly known and marketed as "Monarch Grand Vacations," a multi-location vacation timeshare program that establishes a uniform plan for the development, ownership, use and enjoyment of specified resort accommodations for the benefit of its members. MGV is a nonprofit mutual benefit corporation whose members are timeshare owners, and it is administered by a board of directors elected by MGV members. As of the Petition Date, MGV owned Resort Accommodations within these resorts: Palm Canyon Resort (Palm Springs), Riviera Oaks Resort & Racquet Club (Ramona), Riviera Beach & Spa Resort - Phases I and II (Dana Point), Riviera Shores Beach (Dana Point), Cedar Breaks Lodge (Brian Head), Tahoe Seasons Resort (South Lake Tahoe), Desert Isle of Palm Springs (Palm Springs), the Cancun Resort (Las Vegas), and the Cabo Azul Resort (Los Cabos, Mexico). Future Vacation Accommodations are currently in the pre- development stage in Kona, Hawaii and Las Vegas, Nevada. Additionally, the Cabo Azul Resort has construction in progress on two buildings. The Pacific Monarch entities do not include the entities that actually own the timeshare properties that have been dedicated to use by the purchasers of timeshare points. The trusts that own the properties are not liable for the Pacific Monarch entities' obligations. MGV is not a debtor. Judge Erithe A. Smith presides over the jointly administered cases. Lawyers at Stutman, Treister & Glatt PC, in Los Angeles, serve as counsel to the Debtors. The petition was signed by Mark D. Post, chief executive officer and director. Houlihan Lokey Capital, Inc., serves as investment baker to the Debtors. Raymond J. Gaskill, Esq., represents the Debtors as special timeshare counsel. Greenberg, Whitcombe & Takeuchi, LLP, serves as the Debtors' special counsel for employment and labor matters. Lesley, Thomas, Schwarz & Postma, Inc., serves as the Debtors' tax and vacation ownership points accountants. White & Case LLP is the Debtors' special tax counsel. Attorneys at Brinkman Portillo Ronk, PC, serve as counsel to the Official Committee of Unsecured Creditors. Creditor Ikon Financial Services is represented by Christine R. Etheridge. Creditor California Bank & Trust is represented in the case by Michael G. Fletcher at Frandzel Robins Bloom & Csato, L.C. Marshall F. Goldberg, Esq. at Glass & Goldberg argues for creditor Fifth Third Bank. Creditor The Macerich Company is represented by Brian D. Huben, Esq. at Katten Muchin Rosenman LLP. Interested Party DPM Acquisition is represented by Joshua D. Wayser, Esq. at Katten Muchin Rosenman LLP. PACIFIC MONARCH: Cash Collateral Access Extended Until May 22 ------------------------------------------------------------- The Hon. Scott C. Clarkson of the U.S. Bankruptcy Court for the Central District of California approved a stipulation authorizing Pacific Monarch Resorts, Inc.'s continued access to cash collateral subject to Resort Finance America, LLC's alleged interests. On Dec. 15, 2011, the Court approved the final use of cash collateral. Pursuant to the final cash collateral order, the outside date for the use of cash collateral was originally defined as Jan. 25, 2012. The stipulation May 10, 2012, was entered between the Debtor and RFA. Pursuant to the stipulation, among other things: -- RFA consents to the Debtor's use of the cash collateral until May 22, in order to fund the Debtors' operations through the new anticipated closing date; and -- the outside date, currently defined as "earlier of the closing or May 14, 2012" will mean the earlier of the closing or May 22, 2012. A full-text copy of the stipulation and the budget is available for free at http://bankrupt.com/misc/PACIFICMONARCH_CC6thstipulation.pdf The Debtor was authorized to sell its business in mid-January for $49.3 million to Diamond Resorts Corp but the sale hasn't been completed. The bankruptcy court meanwhile has approved a stipulation with California Bank & Trust regarding the allowance of its secured claims. About Pacific Monarch Pacific Monarch Resorts, Inc., and its affiliated debtors operate a "timeshare business" business. The Debtors filed voluntary Chapter 11 petitions (Bankr. C.D. Calif. Lead Case No. 11-24720) on Oct. 24, 2011, disclosing $100 million to $500 million in both assets and debts. The affiliated debtors are Vacation Interval Realty Inc., Vacation Marketing Group Inc., MGV Cabo LLC, Desarrollo Cabo Azul, S. de R.L. de C.V., and Operadora MGVM S. de R.L. de C.V. Based in Laguna Hills, California, Pacific Monarch and its affiliates generate revenue primarily from the sale and financing of "vacation ownership points" in a timeshare program commonly known and marketed as "Monarch Grand Vacations," a multi-location vacation timeshare program that establishes a uniform plan for the development, ownership, use and enjoyment of specified resort accommodations for the benefit of its members. MGV is a nonprofit mutual benefit corporation whose members are timeshare owners, and it is administered by a board of directors elected by MGV members. As of the Petition Date, MGV owned Resort Accommodations within these resorts: Palm Canyon Resort (Palm Springs), Riviera Oaks Resort & Racquet Club (Ramona), Riviera Beach & Spa Resort - Phases I and II (Dana Point), Riviera Shores Beach (Dana Point), Cedar Breaks Lodge (Brian Head), Tahoe Seasons Resort (South Lake Tahoe), Desert Isle of Palm Springs (Palm Springs), the Cancun Resort (Las Vegas), and the Cabo Azul Resort (Los Cabos, Mexico). Future Vacation Accommodations are currently in the pre- development stage in Kona, Hawaii and Las Vegas, Nevada. Additionally, the Cabo Azul Resort has construction in progress on two buildings. The Pacific Monarch entities do not include the entities that actually own the timeshare properties that have been dedicated to use by the purchasers of timeshare points. The trusts that own the properties are not liable for the Pacific Monarch entities' obligations. MGV is not a debtor. Judge Erithe A. Smith presides over the jointly administered cases. Lawyers at Stutman, Treister & Glatt PC, in Los Angeles, serve as counsel to the Debtors. The petition was signed by Mark D. Post, chief executive officer and director. Houlihan Lokey Capital, Inc., serves as investment baker to the Debtors. Raymond J. Gaskill, Esq., represents the Debtors as special timeshare counsel. Greenberg, Whitcombe & Takeuchi, LLP, serves as the Debtors' special counsel for employment and labor matters. Lesley, Thomas, Schwarz & Postma, Inc., serves as the Debtors' tax and vacation ownership points accountants. White & Case LLP is the Debtors' special tax counsel. Attorneys at Brinkman Portillo Ronk, PC, serve as counsel to the Official Committee of Unsecured Creditors. Creditor Ikon Financial Services is represented by Christine R. Etheridge. Creditor California Bank & Trust is represented in the case by Michael G. Fletcher at Frandzel Robins Bloom & Csato, L.C. Marshall F. Goldberg, Esq. at Glass & Goldberg argues for creditor Fifth Third Bank. Creditor The Macerich Company is represented by Brian D. Huben, Esq. at Katten Muchin Rosenman LLP. Interested Party DPM Acquisition is represented by Joshua D. Wayser, Esq. at Katten Muchin Rosenman LLP. PATRIOT NATIONAL: Swings to $546,000 Net Income in 1st Quarter -------------------------------------------------------------- Patriot National Bancorp, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $545,530 on $7.18 million of total interest and dividend income for the three months ended March 31, 2012, compared with a net loss of $8.98 million on $7.36 million of total interest and dividend income for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $671.12 million in total assets, $619.89 million in total liabilities and $51.23 million in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/NPZaXI About Patriot National Bancorp Stamford, Conn.-based Patriot National Bancorp, Inc. (NASDAQ: PNBK) is the parent company of Patriot National Bank, a national banking association headquartered in Stamford, Fairfield County, in Connecticut. Patriot National Bank has 19 full service branches, 16 in Connecticut and three in New York. PETROLEOS DE VENEZUELA: Fitch to Rate $3BB Issuance at 'B+/RR4' --------------------------------------------------------------- Fitch Ratings expects to assign a 'B+/RR4' rating to Petroleos de Venezuela S.A.'s (PDVSA) proposed issuance of $3 billion of unsecured notes due 2033, 2034 and 2035. The company expects to use the proceeds from the issuance for general corporate purposes. PDVSA's foreign and local currency ratings are 'B+'. The Rating Outlook is Negative. PDVSA's credit quality reflects the company's linkage to the government of Venezuela as a state-owned entity, combined with increased government control over business strategies and internal resources. This underscores the close link between the company's credit profile and that of the sovereign. PDVSA's ratings also consider the company's strong balance sheet, sizeable proven hydrocarbon reserves, and strategic interests in international downstream assets. Linkage to Sovereign: PDVSA credit quality is inextricably linked to the Venezuelan government. It is a state-owned entity whose royalties and tax payments have historically represented more than 50% of the government's revenues, and it is of strategic importance to the economic and social policies of the country. In 2008, the government changed PDVSA's charter and mission statement to allow it to participate in industries that contribute to the country's social development, including health care, education, and agriculture. Limited Transparency of Sovereign: The Venezuelan government displays limited transparency in the administration and use of government-managed funds, and in fiscal operations, which poses challenges to accurately assess the stance of fiscal policy and the full financial strength of the sovereign. As a direct by-product of being a state-owned entity, PDVSA displays similar characteristics, which reinforces the company's linkage of its ratings to the sovereign. Stand-Alone Credit Profile Solid for Rating Category: PDVSA continues to be an important player in the global energy sector. The company's competitive position is strong and supported by its reported sizeable proven hydrocarbon reserves, strategic interests in international downstream assets and private participation in upstream operations. The company also benefits from a strong balance sheet, which is in line with many of its competitors. These strong credit attributes are consistent with a higher rating category although sovereign related risks offset the strength of the financial profile and constrain the rating to that of the sovereign. Low Leverage Expected to Moderately Rise: PDVSA reported an EBITDA (after royalties and social expenditure which include most oil bartering agreements) and FFO of approximately USD18.7 billion and USD30.9 billion, respectively, as of year-end 2011. Total financial debt as of Dec. 31, 2011 increased to USD34.9 billion from USD24.9 billion as of 2010. The leverage level at 1.9x is low for the rating category, which is limited by credit quality of the Venezuelan government. Capital expenditures which have totaled approximately USD71.7 billion over the past five years, are expected to increase significantly starting next year as the company intensifies its exploration and production efforts on the Orinoco Oil belt. Under Fitch's base case, PDVSA's credit quality is expected to remain strong for the rating category despite an expected deterioration in the company's financial profile due to large capital expenditures of approximately USD236 billion through 2018 and increasing debt levels. Fitch expects capital expenditures to be lower than those projected by the company as they seem unrealistic compared with current levels. Under Fitch's stress case scenario, with declining production levels, same capital expenditure levels and increasing debt, PDVSA's underling credit quality could deteriorate to levels in line with the assigned rating category. Large Hydrocarbon Reserves: PDVSA's reported hydrocarbon reserves continue to increase with proved hydrocarbon reserves of 331 billion barrels of oil equivalent (boe) (approximately 89% oil and 11% natural gas) and proved developed hydrocarbon reserves of 20 billion boe as of December 2011, representing a 15-year proved developed reserve life. All reserves are property of the Bolivarian Republic of Venezuela and not the company. Venezuela reported oil production of approximately 2.99 million barrels per day (bpd) and approximately 3.86 boed during 2011. Reported cured production has declined by approximately 2% per annum on average over the last four years. Various independent reports have estimated production levels are lower than reported by the company, which adds to risk and is incorporated into the ratings. PGI INCORPORATED: Incurs $1.5 Million Net Loss in First Quarter --------------------------------------------------------------- PGI Incorporated filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.47 million on $8,000 of revenue for the three months ended March 31, 2012, compared with a net loss of $1.30 million on $26,000 of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $1.43 million in total assets, $66.38 million in total liabilities and a $64.94 million total stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/Vm7nP8 About PGI Incorporated St. Louis, Mo.-based PGI Incorporated, a Florida corporation, was founded in 1958, and up until the mid 1990's was in the business of building and selling homes, developing and selling home sites and selling undeveloped or partially developed tracts of land. Over approximately the last 15 years, the Company's business focus and emphasis changed substantially as it concentrated its sales and marketing efforts almost exclusively on the disposition of its remaining real estate. This change was prompted by its continuing financial difficulties due to the principal and interest owed on its debt. Presently, the most valuable remaining asset of the Company is a parcel of 366 acres located in Hernando County, Florida. The Company also owns a number of scattered sites in Charlotte County, Florida (the "Charlotte Property"), but most of these sites are subject to easements which markedly reduce their value and/or consist of wetlands of indeterminate value. As of Dec. 31, 2011, the Company also owned six single family lots, located in Citrus County, Florida. As of Dec. 31, 2011, the Company had no employees, and all services provided to the Company are through contract services. For 2011, BKD, LLP, in St. Louis, Missouri, expressed substantial doubt about PGI Incorporated's ability to continue as a going concern. The independent auditors noted that the Company has a significant accumulated deficit, and is in default on its primary debt, certain sinking fund and interest payments on its convertible subordinated debentures and its convertible debentures. The Company reported a net loss of $5.48 million on $56,000 of revenues for 2011, compared with a net loss of $4.93 million on $46,000 of revenues for 2010. PHI GROUP: Delays March 31 Form 10-Q for Review ----------------------------------------------- PHI Group, Inc., was unable to file, without unreasonable effort and expense, its Form 10-Q for the fiscal quarter ended March 31, 2012, due to the requirement for additional time by the auditors to review its financial information to be included in the referenced Form 10-Q. About PHI Group Huntington Beach, Calif.-based PHI Group, Inc., through its wholly owned and majority-owned subsidiaries, is engaged in a number of business activities, the scope of which includes consulting and merger and acquisition advisory services, real estate and hospitality development, mining, natural resources, energy, and investing in special situations. The Company invests in various business opportunities within its chosen scope of business, provides financial consultancy and M&A advisory services to U.S. and foreign companies, and acquires selective target companies under special situations to create additional long-term value for its shareholders. Dave Banerjee CPA, in Woodland Hills, Calif., expressed substantial doubt about PHI Group's ability to continue as a going concern. The independent auditors noted that the Company has accumulated deficit of $28,177,788 and net loss amounting $1,178,297 for the year ended June 30, 2011. The Company reported a net loss of $1.2 million for the fiscal year ended June 30, 2011, compared with a net loss of $3.6 million for the fiscal year ended June 30, 2010. The Company's balance sheet at Dec. 31, 2011, showed $2.46 million in total assets, $10.11 million in total liabilities, all current, and a $7.65 million total stockholders' deficit. PILSEN LOFTS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Pilsen Lofts LLC 1250 North Paulina Chicago, IL 60622 Bankruptcy Case No.: 12-19681 Chapter 11 Petition Date: May 14, 2012 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Jack B. Schmetterer Debtor's Counsel: Shelly A. DeRousse, Esq. STAHL COWEN CROWLEY ADDIS LLC 55 West Monroe Street, Suite 1200 Chicago, IL 60603 Tel: (312) 377-7887 Fax: (312) 423-8197 E-mail: sderousse@stahlcowen.com Scheduled Assets: $3,738,948 Scheduled Liabilities: $3,198,421 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/ilnb12-19681.pdf The petition was signed by Steven Lipe, manager. PINNACLE AIRLINE: Steelworkers Deal Deadline Extended to July 13 ---------------------------------------------------------------- The United Steelworkers said that through the successful work of Pinnacle Airlines' Official Committee of Unsecured Creditors, Pinnacle and Delta Air Lines have agreed to extend to July 13 the bankrupt regional carrier's deadline to renegotiate its union labor contracts. The USW is one of seven members of the committee. In its presentation to the U.S. Bankruptcy Court for the Southern District of New York, which convened to consider Pinnacle's motion for approval of Debtor in Possession (DIP) financing and other agreements, the USW advised the court that agreements between Pinnacle and Delta will pose problems in upcoming bargaining. USW International Vice President at Large Carol Landry, who leads the union's Airline Division, stressed that the complex economic and non-economic issues that must be addressed in negotiations will require patience, good faith and commitment from top-level corporate management, Delta and other stakeholders in order to ensure that Pinnacle emerges from bankruptcy as a viable, more stable employer in the future. Pinnacle presented the USW with a proposal on May 8 seeking changes to the labor agreement covering the company's flight attendants. "Pinnacle has already announced hundreds of layoffs and is seeking drastic cuts to flight attendant, pilot and other employee pay, benefits and work rules," Landry said. "We will not allow any party to exploit the bankruptcy process. The USW will work aggressively to protect its members' standards of living, achieve job security and obtain opportunities to participate in the company's future success." Landry pointed out that since Pinnacle filed its Chapter 11 bankruptcy case, USW officers, staff, financial experts and legal counsel have been actively involved in the proceedings. As a member of the Creditors' Committee, the USW provides the committee and its members with the unique perspective of the more than 2,700 flight attendants and ground operations employees that the union represents at Pinnacle and Colgan Air. The USW represents about 850,000 working men and women in the United States and Canada in a wide variety of industries, ranging from airlines to glass making, mining, paper, steel, tire and rubber and other manufacturing environments to the public sector, service and health care industries. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems - Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. A seven-member official committee of unsecured creditors has been appointed in the case. The Committee selected Goodrich Corporation as its chairperson. The Committee tapped Morrison & Foerster LLP as its counsel. PINNACLE AIRLINES: Wins Final OK of $74.3-Mil. DIP Financing ------------------------------------------------------------ Pinnacle Airlines Corp. has received final approval from the United States Bankruptcy Court for the Southern District of New York for $74.3 million in debtor-in-possession (DIP) financing. The funding is being provided by Delta Air Lines, Inc. "We are pleased that the court has granted Pinnacle final approval for DIP financing with the support of the unsecured creditors' committee," said Sean Menke, president and CEO of Pinnacle. "Combined with cash from our ongoing operations, this funding will be available to help ensure that Pinnacle has sufficient liquidity to meet its operational and restructuring needs. This is an important step in our ongoing efforts to develop a viable business plan, while continuing to provide passengers with safe, reliable and timely service." As previously announced, $44.3 million of the DIP financing will be used by Pinnacle to repay a secured promissory note held by Delta. The remaining $30 million will be available to fund operations during the restructuring process. Davis Polk & Wardwell LLP and Akin Gump Strauss Hauer & Feld LLP are serving as the company's legal advisors in the restructuring. Barclays Capital and Seabury Group LLC are serving as financial advisors. Lisa Uhlman at Bankruptcy Law360 reports that the DIP financing was approved over objections from equity holders, which had argued that the loan is a shotgun deal that comes with too many strings attached. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that from the loan, $44 million is being used to repay an existing secured debt owing to Delta, for which Pinnacle operates feeder flights. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems - Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. A seven-member official committee of unsecured creditors has been appointed in the case. The Committee selected Goodrich Corporation as its chairperson. The Committee tapped Morrison & Foerster LLP as its counsel. PLY GEM HOLDINGS: Incurs $25.6 Million Net Loss in 1st Quarter -------------------------------------------------------------- Ply Gem Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $25.64 million on $239.17 million of net sales for the three months ended March 31, 2012, compared with a net loss of $70.89 million on $200.10 million of net sales for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $923.03 million in total assets, $1.22 billion in total liabilities and a $301.90 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/x5nlu9 About Ply Gem Based in Cary, North Carolina, Ply Gem Holdings Inc. is a diversified manufacturer of residential and commercial building products, which are sold primarily in the United States and Canada, and include a wide variety of products for the residential and commercial construction, the do-it-yourself and the professional remodeling and renovation markets. The Company reported a net loss of $84.50 million in 2011, compared with net income of $27.66 million in 2010. * * * In May 2010, Standard & Poor's Ratings Services raised its (unsolicited) corporate credit rating on Ply Gem to 'B-' from 'CCC+'. "The ratings upgrade reflects our expectation that the company's credit measures are likely to improve modestly over the next several quarters to levels that we would consider more in line with the 'B-' corporate credit rating," said Standard & Poor's credit analyst Tobias Crabtree. SGS International carries a 'B1' corporate family rating from Moody's Investors Service. PRAYOSHA INVESTMENTS: Case Summary & 19 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Prayosha Investments, LLC dba America's Best Value Inn 333 Effingham Street Portsmouth, VA 23704 Bankruptcy Case No.: 12-72099 Chapter 11 Petition Date: May 15, 2012 Court: United States Bankruptcy Court Eastern District of Virginia (Norfolk) Judge: Frank J. Santoro Debtor's Counsel: Cullen Drescher Speckhart, Esq. Kelly Megan Barnhart, Esq. ROUSSOS, LASSITER, GLANZER & BARNHART 580 E. Main Street, Suite 300 P.O. Box 3127 Norfolk, VA 23510 Tel: (757) 622-9005 Fax: (757) 624-9257 E-mail: speckhart@rlglegal.com barnhart@rlglegal.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 19 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vaeb12-72099.pdf The petition was signed by Hetal Patel, member. PRINCE SPORTS: Asian Creditors Named to Committee ------------------------------------------------- The U.S. Trustee for Region 3 appointed five creditors to serve on the official committee of unsecured creditors in the Chapter 11 case of Prince Sports, Inc. The members are: 1. Da Sheng (BVI) International Holding Limited Attn: Chu Tu-Kung No. 133, Sec. 3 Min Sheng Road, Taya Dist. Taichung City, Taiwan Tel: +886-4-5685670 Fax: +886-4-2566-8096 2. Ocean Well Co., Ltd. Attn: James Chang No. 29-5 Lane 59 Nan Yang Road, Feng Yuan Dist. Taichung City, Taiwan R.O.C. Tel: +886-4-25281398 Fax: +886-4-25281589 3. Topkey Corporation Attn: Tony Chu 18 20th Road Industrial Park Taichung 408 Taiwan R.O.C. Tel: +886-4-23591229 x 301 Fax: +886-4-23599683 4. Marshal Industrial Corp. Attn: Henry Lin Room 1503 Parkes Commercial Center 2-8 Darkes St., Tsimshatsui Kowloon, Hong Kong Tel: +-852-2730222 Fax: +852-23758919 5. Dragon Step International Ltd. Attn: Chang Tsen-Hsin No. 912, Zhengshan Rd., Shengagn Dist. Taichung City 429, Taiwain, R.O.C. Tel: +-886-4-25623490 Fax: +886-4-259627858 The Committee selected as counsel: Michael P. Richman, Esq. Anthony Nguyen, Esq. PATTON BOGGS LLP 1185 Avenue of the Americas, 30th Fl New York, NY 10036 Tel: 646-557-5100 Fax: 646-557-5101 E-mail: mrichman@pattonboggs.com anguyen@pattonboggs.com - and - Mark A. Salzberg, Esq. PATTON BOGGS LLP 2550 M Street, NW Washington, DC 20037 Tel: 202-457-600 Fax: 202-457-6315 E-mail: msalzberg@pattonboggs.com - and - Jeffrey C. Wisler, Esq. Zhun Lu, Esq. Marc J. Phillips, Esq. Kelly M. Conlan, Esq. CONNOLLY BOVE LODGE & HUTZ LLP The Nemours Building 1007 North Orange Street PO Box 2207 Wilmington, DE 19899 Tel: 302-658-9141 Fax: 302-658-0380 E-mail: jwisler@cblh.com zlu@cblh.com mphillips@cblh.com kconlan@cblh.com About Prince Sports Prince Sports, Inc. and its U.S. affiliates filed voluntary petitions for Chapter 11 reorganization (Bankr. D. Del. Lead Case NO. 12-11439) on May 1, 2012, with a Chapter 11 plan that contemplates the transfer of ownership to Authentic Brands Group (ABG)-Prince LLC. Founded in 1970, Prince Sports has a 42-year track record of developing premium quality products for the racquet sports industry. Prince sells its products through brands like "Ektelon," which sells racquetball racquets, footwear and gloves and "Viking Athletics," through which it sells platform tennis paddles, balls and gloves. Prince is distributed in over 100 countries. Lincolnshire Management Inc. acquired Prince from Benneton Group, the parent company of United Colors of Benneton, in 2003. Lincolnshire Management sold Prince to Nautic Partners in August 2007. Under the Plan, (ABG)-Prince LLC, which acquired the secured debt from GE Capital and Madison Capital, will get 100% of the new equity in exchange of the discharge of the debt. Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the Debtors. The Debtors have also tapped FTI Consulting, Inc., to provide David J. Woodward as Chief Restructuring Officer, as well as additional personnel. Epiq Bankruptcy Solutions LLC is the claims and notice agent. PROTECTIVE LIFE: Fitch Puts Rating on Subordinated Debt at 'BB+' ---------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to Protective Life Corp.'s (PL) new issuance of subordinated debt. At the same time, Fitch has affirmed the 'BBB+' Issuer Default Rating (IDR) rating of PL, the 'A' insurer financial strength (IFS) rating of Protective Life Insurance Co. and all other PL ratings. The Outlook for all ratings is Stable. Proceeds from the new debt issuance will be used to refinance the company's outstanding trust preferreds, so Fitch does not view this as an increase in overall leverage. The new unsecured subordinated debt, which will be due in 2042, will rank in priority of payment the same as the trust preferreds being refinanced. They also include an option to defer interest payments and are therefore notched one level below straight subordinated debt. The affirmation is based on Fitch's view that PL's year-end and first quarter results are in line with expectations. The company's operating earnings continue to strengthen, and coverage of adjusted interest expense is over 10x at the end of the first quarter. All segments contributed to improved earnings in the first quarter. The group's stated NAIC risk-based capital ratio was strong at 433% of the company action level as of year-end 2011, and is estimated at well above 400% at the end of the first quarter. It is expected to remain in the same range for the full-year 2012. Fitch continues to view PL as having above average leverage due mainly to the financing of XXX and AXXX statutory reserve requirements. The financial leverage ratio (FLR), which excludes the funding requirements, was 31% as of March 31, 2012. While this is up from 28% at the end of 2011, the increase is due to the implementation in the first quarter of new DAC accounting rules, which resulted in a $509 million reduction in equity. The ratio would have been 27% without the DAC change. The total financing and commitments ratio (TFC), which includes the reserve financing, was very high at 1.9x as of March 31, 2012. PL's liquidity position is good, with $70 million at the holding company and manageable debt maturities over the next two years. Key concerns include macroeconomic headwinds in the form of low interest rates, high financial market volatility and the risk of contagion from the Eurozone debt crisis. These conditions are expected to constrain PL's ability to improve earnings over the near term and could have a material negative effect on the company's earnings and capital in a severe, albeit unexpected, scenario. The key rating triggers that could result in an upgrade include continued recovery in earnings combined with growth in equity and surplus (particularly if accomplished through earnings). Ratings could be upgraded if financial leverage remains below 25% and TFC leverage falls into the 0.8x to 1.0x range. Ratings could also be positively affected if EBIT-based interest coverage rose above 9x. The key rating triggers that could result in a downgrade include material declines in GAAP equity (that would drive financial leverage above 30%) or statutory capital (that would drive reported RBC below 300%), a downturn or weak growth in earnings, or a material reinsurance loss. Ratings could also be pressured if interest coverage fell below 5x. Fitch assigns a 'BB+' rating to the following: Protective Life Corp.'s -- $250 million 6.25% subordinated notes due 2042. Fitch Affirms the following ratings with a Stable Outlook: Protective Life Corporation -- IDR at 'BBB+'; -- $250 million in senior notes due 2013 at 'BBB'; -- $150 million in senior notes due 2014 at 'BBB'; -- $150 million in senior notes due 2018 at 'BBB'; -- $400 million of 7.38% senior notes due 2019 at 'BBB'; -- $300 million of 8.45% senior notes due 2039 at 'BBB'; -- $100 million of 8.00% senior retail notes due 2024 at 'BBB'; -- $103 million trust preferred issued through PLC Capital Trust III due 2031 at 'BB+'; -- $119 million trust preferred issued through PLC Capital IV due 2032 at 'BB+'; -- $103 million trust preferred issued through PLC Capital Trust V due 2034 at 'BB+'; -- $200 million class D junior subordinated notes due 2066 at 'BB+'. Protective Life Insurance Company Protective Life and Annuity Insurance Company West Coast Life Insurance Company -- IFS at 'A'. Protective Life Secured Trust -- Notes at 'A'; -- Medium-term notes at 'A'. REDDY ICE: Creditors Committee Taps BDO USA as Financial Advisors ----------------------------------------------------------------- The Official Unsecured Creditors' Committee in the Chapter 11 cases of Reddy Ice Holdings, Inc., and Reddy Ice Corporation asks the U.S. Bankruptcy Court for the Northern District of Texas for permission to retain the consulting firm of BDO USA, LLP, together with its subsidiaries, agents, independent contractors and employees, as its financial advisors. BDO will, among other things: a. analyze the financial operations of the Debtors pre- and postpetition, as necessary; b. analyze the financial ramifications of any proposed transactions for which the Debtors seek Bankruptcy Court approval including, but not limited to, postpetition financing, sale of all or a portion of the Debtors' assets, retention of management and/or employee incentive and severance plans; and c. conduct any requested financial analysis including verifying the material assets and liabilities of the Debtors, as necessary, and their values. BDO is not owed any amounts with respect to prepetition fees and expenses. The hourly billing rates as of the date of the application are: Partners/Managing Directors $475 - $795 Directors/Sr. Managers/ Sr. Vice Presidents $375 - $525 Managers/Vice Presidents $325 - $425 Seniors/Analysts $200 - $350 Staff 1 $150 - $225 To the best of the Committee's knowledge, BDO does not represent any other entity having an adverse interest in connection with the cases. 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. REDDY ICE: Wants Until May 31 to File Schedules and Liabilities --------------------------------------------------------------- Reddy Ice Holdings, Inc., and Reddy Ice Corporation ask the U.S. Bankruptcy Court for the Northern District of Texas to extend until May 31, 2012, the deadline by which the Debtors must file their schedules of assets and liabilities and statements of financial affairs in the event a Chapter 11 plan is not confirmed within 37 days of the Petition Date. On the Petition Date, the Debtors filed the Plan of Reorganization of Reddy Ice Holdings, Inc. and Reddy Ice Corporation, as may be amended, and the Disclosure Statement. Prior to the Petition Date, on April 11, 2012, the Debtors commenced soliciting votes with respect to the Plan. Under the schedules and statements extension order, the Debtors have until May 21, to file their schedules and statements and, if a plan is confirmed within 37 days of the Petition Date, the requirement to file schedules and statements will be waived. The Court has scheduled the confirmation hearing to consider confirmation of the Plan for May 18. In a separate filing, the Debtor requested that the Court set the hearing on the schedules and statements extension for May 18, at 9:30 a.m. (prevailing Central Time). 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. On April 20, 2012, an official committee of unsecured creditors was appointed. REDDY ICE: Balks at Equity Holders Committee Appointment -------------------------------------------------------- Reddy Ice Holdings, Inc., and Reddy Ice Corporation ask the U.S. Bankruptcy Court for the Northern District of Texas to deny the motion of an ad hoc shareholder group for an order appointing an official committee of equity interest holders. According to the Debtors, Courts have consistently maintained that the appointment of an equity committee is an extraordinary remedy and the ad hoc shareholder group cannot demonstrate that there is a substantial likelihood that shareholders will receive a meaningful distribution under a strict application of the absolute priority rule. As reported in the Troubled Company Reporter on May 9, 2012, reported that shareholders of Reddy Ice assert that the Company is solvent and are asking the bankruptcy judge in Dallas to appoint an official equity holders' committee. The Ad Hoc Shareholder Group asserts that the Debtors' claims that there "is no equity value in the Reddy Holdings estate" is based on flawed analysis. The shareholders believes Reddy Ice is worth $470 million to $503 million, according to an appraisal by Blackhill Partners LLC. Total debt of Reddy Ice is $471.5 million, they say, thus making the company "clearly solvent." When the U.S. Trustee declined to appoint an official equity committee, the shareholders filed papers asking the judge for their own committee. The Ad Hoc Shareholder Group consists of Alan Bernon, Ron Klein, Harold Ginsburg, Pete Schenkel and Wayne Stoltenberg, each an equity interest holder. Reddy Ice's Chapter 11 plan is designed to give control to funds affiliated with private-equity investor Centerbridge Capital Partners LLC. Shareholders can receive as much as 17 cents a share through the plan. The shareholders wanted to upset the schedule, in which there will be a confirmation hearing on May 18 to approve the reorganization plan on which creditors voted before the Chapter 11 filing. 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. REDDY ICE: Shareholders Want More Details About Arctic Plan ----------------------------------------------------------- BankruptcyData.com reports that Reddy Ice Holdings' ad hoc shareholders filed with the U.S. Bankruptcy Court an objection to the Debtors' Chapter 11 Plan of Reorganization and related Disclosure Statement. The shareholders state, "Its most glaring deficiency is that it provides no meaningful information concerning Arctic, even though the Debtors' pursuit of the Arctic Acquisition is a lynchpin of the Plan. There is no disclosure of Arctic's historical financial performance, the reasons that the Debtors are pursuing the Arctic acquisition, any 'synergies' that might result from the Arctic acquisition, the equity and debt financing elements of the potential acquisition, and whether (and to what extent) the Arctic acquisition will result in any increased value to the Debtors. Nor is there adequate information concerning any potential terms of the acquisition. Without this and certain other fundamental information, holders of claims and interests are unable to make an informed judgment concerning the Plan." 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: Moody's Withdraws Ratings ----------------------------------------------- Moody's Investors Service has withdrawn the ratings on Reichhold Industries following the completion of the exchange offer for its notes due 2014. Moody's deemed the exchange offer to be a distressed exchange due to the switch to paying interest in kind (PIK) versus paying cash interest. The issuer no longer has any rated debt outstanding. Ratings Rationale The principal methodology used in rating (Reichhold) was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. As reported by the Troubled Company Reporter-Europe on Feb. 24, 2012, Moody's lowered Reichhold Industries' Probability of Default (PDR) to Ca/LD from Caa1 and downgraded the Corporate Family Rating (CFR) to Caa3 from Caa1. These actions reflect the recently announced exchange offer for notes due 2014, which Moody's deems to be a distressed exchange. The Caa3 Corporate Family Rating reflects expectations for continued weak operating performance. The /LD (limited default) rating on the PDR will remain in place for three days. The rating outlook is negative. Ratings downgraded: Reichhold Industries, Inc. Probability to default rating -- Ca/LD from Caa1 Corporate Family Rating -- Caa3 from Caa1 $195 million senior unsecured notes due 2014 -- Ca (LGD5, 72%) from Caa2 (LGD4, 64%)** Outlook: Negative ** The rating on the unsecured notes will be withdrawn should all of the existing notes be exchanged. RESIDENTIAL CAPITAL: Ally Pays $750MM to Avoid "Meritless" Claims ----------------------------------------------------------------- Ally Financial Inc. Chief Executive Officer Michael Carpenter disclosed that the company paid $750 million to settle legal claims asserted against its bankrupt mortgage unit, even though the firm itself believes them to be meritless, "to avoid the noise," Dakin Campbell of Bloomberg News reported. CEO Carpenter said in a conference call with analysts the payment to subsidiary Residential Capital LLC as part of the bankruptcy plan insulated parent Ally from the costs of drawn-out litigation and damage to its bond prices, the report relayed. Put in that light, the payment was a "good economic trade" that puts the matter to rest, he said, the report noted. "That doesn't mean a lot of lawyers can't drive you nuts, create big headlines and make a lot of money," Mr. Carpenter was quoted as saying during the conference call. With the $750 million put into place to settle claims as those brought by bondholders or other third parties, claimants will have "absolutely no case" to seek additional funds from the parent company, the CEO said earlier this week, according to Bloomberg. Stephen Lubben, a bankruptcy law professor at Seton Hall University in Newark, New Jersey, commented that Ally and ResCap may meet challenges in appeasing creditors whose claims have not yet been settled, Bloomberg said. "As these new parties come to the table, you can't negotiate with them in a way that you will lose the consent you have with prior parties," Mr. Lubben explained in a phone interview with Bloomberg. Given those challenges, the parties may find themselves in a "tricky negotiation," according to Mr. Lubben. Still, the legal strategy could enable allow Ally to move ahead with plans to repay the U.S. Government for the bailout that left taxpayers with a 74% stake, Bloomberg said. Ally said in a statement that it has paid the federal government $5.5 billion, the report disclosed. Indeed, Mr. Carpenter said Ally may be considering buying back the U.S. stake and making acquisitions, Bloomberg relayed. He stated that the core auto-lending business will not be sold and an initial public offering, which was put on hold until ResCap's status was resolved, may be revived, the report noted. Mr. Carpenter also disclosed that Ally is interested in bidding ING Direct USA, which is a direct competitor of the online bank, the report relayed. Meanwhile, General Motors Co. CEO Akerson said the auto company is interested in acquiring Ally's international operations, adding however that they are not "going to bleed to buy it," Bloomberg relayed. Ally, which was once part of General Motors, ranked No. 1 in financing U.S. consumer auto sales for 2011 with more than $40 billion in contracts for new or used cars and trucks, or about 1.5 million vehicles, Bloomberg added. About ResCap Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. The ResCap is selling its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial. Together, the asset sales are expected to generate approximately $4 billion in proceeds. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Final Hearing on Barclays DIP Loan June 12 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York signed an interim order permitting Residential Capital, LLC, and its debtor affiliates to borrow up to $1.45 billion in postpetition secured superpriority financing from Barclays Bank PLC. As reported in RESIDENTIAL CAPITAL BANKRUPTCY NEWS, ISSUE NO. 1, under the Barclays DIP Loan, the Debtors can access: (a) revolving loans in an aggregate principal amount of up to $200,000,000 with an interest rate of LIBOR plus 4.00% per annum; and (b) term loans in (i) an aggregate principal amount of up to $1,050,000,000 with an interest rate of LIBOR plus 4.00%, and (ii) an aggregate principal amount up to $200,000,000 with an interest rate of LIBOR plus 6.00%, each with a LIBOR floor of 1.25% per annum. Judge James Peck, who was sitting in for Judge Martin Glenn, agreed to enter the interim order only after the Debtors agreed to remove the request for the finding from the original loan motion. The Court scheduled a final hearing to consider the Debtors' request for June 12, 2012. Objections are due no later than June 5. Other pertinent terms of the Barclays Facility: Borrowers: GMACM Borrower, wholly owned subsidiary of GMAC Mortgage LLC RFC Borrower, wholly owned subsidiary of Residential Funding Company LLC Guarantors: Residential Capital, LLC Other Debtor affiliates of ResCap Use of Proceeds: The Debtors intend to use the proceeds of the Barclays Loans to: -- refinance the GSAP Facility and the BMMZ Repo Facility through the purchase of the Initial Purchased Assets; -- fund general corporate and working capital requirements, including the acquisition of the Additional Purchased Assets; -- pay interest, fees and expenses payable under the Barclays DIP Facility; and -- pay certain costs of administration of the Chapter 11 Cases in accordance with the DIP budget. The Debtors also intend to use the Barclays Loans to purchase the Purchased Assets from the existing owners of such assets to the newly formed Debtor-Borrowers. The Purchase Transactions will bring substantial assets into the Debtors' estates. Financial Covenants: The Borrowers and Guarantors will be required to perform against a budget. They shall maintain at all times minimum liquidity of $50 million in the aggregate. The Budget will provide that up to $40 million of the Term Loan proceeds will be transferred to an unrestricted account of ResCap to be used for general corporate purposes. The Debtors prepared a 20-week cash flow projection for the Barclays loan proceeds, a copy of which is available for free at: http://bankrupt.com/misc/RESCAP_BarclaysDIPBudget.pdf Carve-Out: Includes (i) all fees and expenses in an aggregate amount of up to $25,000,000 incurred by retained professionals in the Chapter 11 Cases following delivery of notice of an Event of Default, (ii) allowed unpaid professional fees and disbursements incurred prior to the delivery of the notice, (iii) quarterly fees required to be paid pursuant to 28 U.S.C. Sec. 1930(a)(6) and any fees payable to the clerk of the Bankruptcy Court, and (iv) fees and expenses up to $500,000 incurred by a trustee under section 726(b) of the Bankruptcy Code. Does not include professional fees and disbursements incurred in connection with any challenge to the validity, perfection, priority, extent or enforceability of the Loans and the other DIP Obligations under the DIP Facility. Fees: Unused Line Fees: An amount equal to the product of (i) 0.75% per annum and (ii) the undrawn portion of the Revolver during the immediately preceding month, payable monthly in arrears. Administrative Agent Fee: $150,000 per annum Collateral Agency Fee: $250,000 per annum Other fees: An aggregate amount of approximately $52 million, net of credits, of which $18.75 million was paid prior to the Petition Date. Maturity Date: The earliest of: -- 18 months from the closing of the DIP Facility -- 45 days after entry of the Interim Order -- substantial consummation of a plan or reorganization for any Debtor -- the date on which maturity is accelerated and the commitments are terminated as a result of an event of default About ResCap Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. The ResCap is selling its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial. Together, the asset sales are expected to generate approximately $4 billion in proceeds. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Ally's $150MM Financing Has Interim Approval ----------------------------------------------------------------- The Bankruptcy Court permitted Residential Capital LLC and its affiliates, on an interim basis, to borrow up to $150 million in postpetition financing on a secured, superpriority basis from parent, Ally Financial Inc. The Debtors are permitted to use no more than $85 million of the funds. An additional $70 million in postpetition draws may be made available to the Debtors under the loan agreement with AFI if the borrowers and AFI agreed for such incremental $70 million before the final hearing. However, the aggregate amount of prepetition and postpetition draws under the AFI Loan Agreement may not exceed $600 million. The Debtors also won interim permission to use cash collateral of AFI and the holders of the 9.625% Junior Secured Notes Due 2015, and provide them with adequate protection for any diminution in value of the collateral. The Debtors prepared a 20-week forecast of anticipated cash receipts and disbursements, a schedule of which is available for free at http://bankrupt.com/misc/ResCap_AFICashCollBudget.pdf Any objection that has not been withdrawn or resolved is, to the extent not resolved, is overruled, the Court ruled. The Court scheduled a final hearing to consider the Ally DIP Motion for June 12, 2012. Objections are due no later than June 5. About ResCap Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. The ResCap is selling its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial. Together, the asset sales are expected to generate approximately $4 billion in proceeds. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Use of Citi Cash Collateral Has Interim Nod ---------------------------------------------------------------- The Bankruptcy Court authorized Residential Capital LLC and its affiliates, on an interim basis, to use the cash collateral of Citibank N.A. under the Citibank MSR (mortgage servicing rights) Facility, to fund the continued operation of the Debtors' businesses. The Debtors prepared a 20-week cash flow projection from May 14 to September 24, 2012, a copy of which is available for free at http://bankrupt.com/misc/ResCap_CitibankCashCollBudget.pdf All objections to the Citibank Cash Collateral Motion to the extent not withdrawn or resolved are withdrawn, the Court ruled. The Court scheduled a final hearing to consider the Citibank Cash Collateral Motion for June 12, 2012. Objections are due no later than May 16, with replies, if any, to be filed on or before June 5. Citibank MSR Facility As reported in RESIDENTIAL CAPITAL BANKRUPTCY NEWS, ISSUE NO. 1, The Debtors and Citibank are parties to a prepetition revolving facility. The Debtors own MSRs with a carrying value as of March 31, 2012 of $1.3 billion. GMAC Mortgage LLC is the borrower, and Residential Capital LLC is the guarantor under the Citibank MSR Facility. Until March 30, 2012, the Facility consisted of a $300 million committed line with an additional $250 million of uncommitted capacity secured by MSRs for mortgage loans in Fannie Mae and Freddie Mac securitization pools. The Citibank MSR Facility, originally scheduled to terminate March 30, 2012, was extended to the earlier of: (i) two days prior to the maturity of the prepetition Ally Financial Inc. Senior Secured Credit Facility and the prepetition Ally Financial Inc. Secured Loan Agreement; or (ii) May 30, 2012. As part of the extension, the Citibank MSR Facility is no longer revolving and the Debtors repaid $124 million of the outstanding principal. The outstanding principal amount of all loans under the Citibank MSR Facility as of the Petition Date is $152 million. Adequate Protection In exchange for the use of the MSR Cash Collateral, Citibank will receive: (i) Adequate Protection Liens on all of the collateral securing the Citibank MSR Facility, which are senior to the DIP Liens; (ii) payment of interest at the non-default rate under the Citibank MSR Facility and all fees and expenses payable to Citibank under the Agreement; and (iii) the Debtors will seek authority under any order approving the sale of Citibank's collateral to provide for the repayment of loans under the Citibank MSR Facility with the proceeds of such collateral from the sale. To the extent the Adequate Protection Liens are insufficient to provide adequate protection, Citibank will receive superpriority administrative expense claims to the extent of any diminution in value of the collateral, the Debtors propose. The Debtors further propose that they be allowed to use the MSR Cash Collateral through (i) 18 months from the closing of the DIP Facility; (ii) 45 days after entry of the Interim Order; (iii) the effective date of a Chapter 11 plan for any Debtor with assets exceeding $10 million; or (iv) the date on which maturity of the DIP Facility is accelerated pursuant to the DIP Credit Agreement as a result of an event of default. About ResCap Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. The ResCap is selling its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial. Together, the asset sales are expected to generate approximately $4 billion in proceeds. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Proposes AFI Shared Services Agreement ----------------------------------------------------------- Residential Capital, LLC, seeks the Court's permission to enter into a shared services agreement with its indirect non-debtor parent, Ally Financial Inc., nunc pro tunc to the Petition Date for the receipt and provision of shared services between ResCap and AFI necessary for the continued operation of the Debtors' businesses. Before the Petition Date, ResCap, AFI and certain of their affiliates provided various financial, operational and administrative services to each other. Historically, the services that are now subject of the Agreement were provided on an undocumented basis. Although these arrangements were suitable, the Debtors determined it was in their best interests to compile a comprehensive and integrated agreement, to become effective postpetition, to ensure that (i) the Debtors obtain and pay for only those services that are necessary during their Chapter 11 cases; (ii) the services that are being provided between ResCap and AFI are specifically identified; and (iii) ResCap may reduce or terminate the receipt of services at any time, including, without limitation, following the closing of a sale of substantially all of the Debtors' assets. Under the Agreement, the Debtors seek to continue providing to and receiving from AFI during their Chapter 11 cases these services, including: (i) information technology services; (ii) employee benefits administration and other human resources functions; (iii) accounting, tax and internal audit services; (iv) treasury and collateral management; (v) risk management functions; (vi) supply chain management, including procurement of goods and services from third parties; (vii) government and regulatory relations and compliance services; (viii) facilities management services; (ix) marketing services; and (x) capital markets services relating to managing the value of certain of the Debtors' loan servicing rights. The prices of the services being provided to AFI and ResCap pursuant to the Agreement are generally in the form of monthly service charges by Functional Service Area for services provided by ResCap to AFI and services provided by AFI to ResCap. The anticipated aggregate monthly cost to ResCap for the services received from AFI is approximately $10.2 million. The anticipated aggregated monthly cost for services provided by ResCap to AFI is approximately $4.4 million. The initial charges under the Agreement are based on projected operations at postpetition levels, which are expected to continue through one or more sales of the Debtors' assets. The Debtors are not seeking to pay any prepetition claims through or pursuant to the Agreement. The Debtors anticipate that the services they will need under the Agreement will be reduced significantly following a sale; however, the Debtors will likely require the continuation of certain limited services from AFI during a wind-down period. Pursuant to the Agreement, the Debtors will be able to secure the performance of such limited services, at reduced costs, to complete the wind-down of their businesses following a sale. Only ResCap and AFI are parties to the Agreement; however, each party is required to work with its respective subsidiaries to ensure that all of the services are provided and each of the ResCap's Debtor affiliates and AFI's non-debtor affiliates receive services as applicable. A full-text copy of the Shared Services Agreement is available for free at: http://bankrupt.com/misc/ResCap_AFISharedServicesPact.pdf Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York, asserts that the Agreement is critical to the continued operation of the Debtors' businesses during the pendency of these Chapter 11 cases, in connection with the proposed sales of their mortgage loan origination and servicing businesses and legacy portfolio. To comply with the provisions of the asset purchase agreements with Nationstar Mortgage LLC and Ally Financial Inc. and preserve the value of their businesses, the Debtors must avoid significant disruptions to their operations during this critical postpetition period, she stresses. Ms. Nashelsky further contends that discontinuing the services would disrupt fundamental administrative aspects of the Debtors' businesses. Specifically, many of the Debtors' human resources services are managed by AFI. Without AFI's human resource services, the Debtors would not be able to offer basic health benefits to employees, continue certain other employee benefit plans and administer payroll, potentially causing an exodus of the Debtors' most valuable employees and irreparable harm to employee morale and trust, she points out. In an industry where enterprise value is so heavily contingent on employees, such repercussions would be devastating to the Debtors operations, she insists. About ResCap Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. The ResCap is selling its mortgage origination and servicing businesses to Nationstar Mortgage LLC, and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets, to Ally Financial. Together, the asset sales are expected to generate approximately $4 billion in proceeds. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Amends List of 50 Largest Unsec. Creditors --------------------------------------------------------------- Residential Capital LLC and its affiliates filed with the Court on May 15, 2012, an amended list of 50 largest unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Deutsche Bank Trust Company 8.500% Senior $473,416,000 Americas Unsecured Notes C/O Kelvin Vargas due April 2013 25 De Forest Ave Summit, NJ 07901 Phone: (201) 593-2456 E-mail: kelvin.vargas@db.com Deutsche Bank Trust Company 750,000,000 Euros $127,671,000 Americas Aggregate C/O Kelvin Vargas Principal Amount 25 De Forest Ave of 7.125% Summit, NJ 07901 Notes due May 2012 Phone: (201) 593-2456 E-mail: kelvin.vargas@db.com Deutsche Bank Trust Company 8.875% Senior $112,227,000 Americas Unsecured Notes C/O Kelvin Vargas due June 2015 25 De Forest Ave Summit, NJ 07901 Phone: (201) 593-2456 E-mail: kelvin.vargas@db.com Deutsche Bank Trust Company GBP400,000,000 $103,743,000 Americas Aggregate C/O Kelvin Vargas Principal Amount 25 De Forest Ave of 9.875% Summit, NJ 07901 Notes due July 2014 Phone: (201) 593-2456 E-mail: kelvin.vargas@db.com Deutsche Bank Trust Company 8.500% Senior $79,879,000 Americas Unsecured Notes C/O Kelvin Vargas due June 2012 25 De Forest Ave Summit, NJ 07901 Phone: (201) 593-2456 E-mail: kelvin.vargas@db.com Deutsche Bank Trust Company GBP400,000,000 $59,379,200 Americas Aggregate C/O Kelvin Vargas Principal Amount 25 De Forest Ave of 8.375% Summit, NJ 07901 Notes due May 2013 Phone: (201) 593-2456 E-mail: kelvin.vargas@db.com BNY Mellon Contingent Claim- Unknown C/O Dechert LLP Securitization 1095 Avenue of the Americas New York, NY 10036 Phone: (212) 698-3621 Fax: (212) 698-3599 E-mail: hector.gonzalez@dechert.com Wells Fargo Bank N.A. Contingent Claim- Unknown c/o Alston & Bird LLP Securitization 101 South Tryon Street Suite 4000 Charlotte, NC 28280-4000 Phone: (704) 444-1335 E-mail: bill.macurda@alston.com US Bank Contingent Claim- Unknown C/O Seward & Kissel LLP Securitization One Battery Park Plaza New York, NY 10004 Phone: (212) 574-1391 Fax: (212) 480-8421 E-mail: das@sewkis.com Deutsche Bank AG, New York Contingent Claim- Unknown C/O Joe Salama Securitization 60 Wall Street New York, NY 10005-2836 Phone: (212) 250-9536 Fax: (866) 785-1127 E-mail: joe.salama@db.com Federal Housing Finance Contingent Claim- Unknown Agency Securitization C/O Alfred Pollard 400 Seventh Street, SW Phone: (202) 649-3804 E-mail: GeneralCounsel@FHFA.org MBIA, Inc. Contingent Claim- Unknown C/O Cadwalader, Wickersham Litigation & Taft One World Financial Center New York, NY 10281 Phone: 504-6373 Fax: (212) 504-6666 E-mail: gregory.petrick@cwt.com Ambac Assurance Corp Contingent Claim- Unknown C/O Patterson Belknap Webb & Litigation Tyler 1133 Avenue of the Americas New York, NY 10036 Phone: (212) 336-2140 Fax: (212) 336-2094 E-mail: prforlenza@pbwt.com Financial Guaranty Insurance Contingent Claim- Unknown Co. Litigation C/O Jones Day 222 East 41st Street New York, NY 10017-6702 Phone: (212) 326-7844 Fax: (212) 755-7306 E-mail: cball@jonesday.com Assured Guaranty Corp. Contingent Claim- Unknown C/O Margaret Yanney Litigation 31 West 52nd Street New York, NY 10019 Phone: (212) 857-0581 Fax: (212) 893-2792 E-mail: myanney@assuredguaranty.com Thrivent Financial for Contingent Claim- Unknown Lutherans Securities C/O Teresa J. Rasmussen 625 Fourth Avenue S. Minneapolis, MN 55415-1624 Phone: (800) 847-4836 West Virginia Investment Contingent Claim- Unknown Management Board Securities C/O Craig Slaughter 500 Virginia Street East, Suite 200 Phone: (304) 345-2672 Allstate Insurance Contingent Claim- Unknown C/O Quinn Emanuel Urquhart Securities & Sullivan 865 S. Figueroa Street, 10th Floor Phone: (213) 443-3000 E-mail: danbrockett@quinnemanuel.com Western & Southern Contingent Claim- Unknown C/O Wollmuth Maher & Deutsch Securities LLP 500 Fifth Avenue New York, NY 10110 Phone: (212) 382-3300 E-mail: dwollmuth@wmd-law.com The Union Central Life Contingent Claim- Unknown Insurance Company Securities C/O Robbins Geller Rudman & Dowd LLP 655 West Broadway, Suite 1900 Phone: (619) 231-1058 Fax: (519) 231-7423 E-mail: stevep@rgrdlaw.com Cambridge Place Investment Contingent Claim- Unknown Management Inc. Securities C/O Donnelly, Conroy & Gelhaar LLP 1 Beacon Street, 33rd Floor Phone: (617) 720-2880 Fax: (617) 720-3553 E-mail: msd@dcglaw.com Sealink Funding Limited Contingent Claim- Unknown C/O Labaton Sucharow LLP Securities 140 Broadway Phone: (212) 907-0869 Fax: (212) 883-7069 E-mail: jbernstein@labaton.com Stichting Pensioenfonds ABP Contingent Claim- Unknown C/O Grant & Eisenhofer Securities 123 S. Justison Street Phone: (302) 622-7040 Fax: (302) 622-7100 E-mail: gjarvis@gelaw.com Huntington Bancshares Inc. Contingent Claim- Unknown C/O Grant & Eisenhofer Securities 123 S. Justison Street Phone: (302) 622-7040 Fax: (302) 622-7100 E-mail: gjarvis@gelaw.com Federal Home Loan Bank of Contingent Claim- Unknown Chicago Securities C/O Keller Rohrback LLP 1201 Third Avenue, Suite 3200 Seattle, WA 98101 Phone: (206) 623-1900 Fax: (206) 623-3384 E-mail: dloeser@kellerrohrback.com Federal Home Loan Bank of Contingent Claim- Unknown Boston Securities C/O Keller Rohrback LLP 1201 Third Avenue, Suite 3200 Phone: (206) 623-1900 Fax: (206) 623-3384 E-mail: dloeser@kellerrohrback.com Federal Home Loan Bank of Contingent Claim- Unknown Indianapolis Securities C/O Keller Rohrback LLP 1201 Third Avenue, Suite 3200 Seattle, WA 98101 Phone: (206) 623-1900 Fax: (206) 623-3384 E-mail: dloeser@kellerrohrback.com Massachusetts Mutual Life Contingent Claim- Unknown Insurance Company Securities C/O Bernadette Harrigan 1295 State Street Phone: (413) 788-8411 Fax: (413) 226-4268 National Credit Union Contingent Claim- Unknown Administration Board Securities C/O Susman Godfrey LLP 1901 Avenue of the Stars, Suite 950 Phone: (310) 789-3100 Fax: (310) 789-3150 E-mail: mseltzer@susmangodfrey.com The Charles Schwab Contingent Claim- Unknown Corporation Securities C/O Grais & Ellsworth LLP 70 East 55th Street New York, NY 10022 Phone: (212) 755-0100 Fax: (212) 755-0052 New Jersey Carpenters Health Contingent Claim- Unknown Fund Securities C/O Cohen Milstein Sellers & Toll PLLC 150 East 52nd Street, Thirtieth Floor New York, NY 10022 Phone: (212) 838-7797 Fax: (212) 838-7745 E-mail: jlaitman@cohenmilstein.com New Jersey Carpenters Contingent Claim- Unknown Vacation Fund Securities C/O Cohen Milstein Sellers & Toll PLLC 150 East 52nd Street, Thirtieth Floor New York, NY 10022 Phone: (212) 838-7797 Fax: (212) 838-7745 E-mail: jlaitman@cohenmilstein.com Boilermaker Blacksmith Contingent Claim- Unknown National Pension Trust Securities C/O Cohen Milstein Sellers & Toll PLLC 150 East 52nd Street, Thirtieth Floor New York, NY 10022 Phone: (212) 838-7797 Fax: (212) 838-7745 E-mail: jlaitman@cohenmilstein.com Police and Fire Retirement Contingent Claim- Unknown System of the City of Detroit Securities C/O Zwerling, Schachter & Zwerling 41 Madison Avenue New York, NY 10010 Phone: (212) 223-3900 Fax: (212) 371-5969 E-mail: rzwerling@zsz.com Orange County Employees Contingent Claim- Unknown Retirement System Securities C/O Cohen Milstein Sellers & Toll PLLC 150 East 52nd Street, Thirtieth Floor New York, NY 10022 Phone: (212) 838-7797 Fax: (212) 838-7745 E-mail: jlaitman@cohenmilstein.com Midwest Operating Engineers Contingent Claim- Unknown Pension Trust Fund Securities C/O Cohen Milstein Sellers & Toll PLLC 150 East 52nd Street, Thirtieth Floor New York, NY 10022 Phone: (212) 838-7797 Fax: (212) 838-7745 E-mail: jlaitman@cohenmilstein.com Iowa Public Employees Contingent Claim- Unknown Retirement System Securities C/O Cohen Milstein Sellers & Toll PLLC 150 East 52nd Street, Thirtieth Floor New York, NY 10022 Phone: (212) 838-7797 Fax: (212) 838-7745 E-mail: jlaitman@cohenmilstein.com Lehman Brothers Holdings, Inc. Contingent Litigation Unknown 1271 Avenue of the Americas New York, NY 10020 Phone: (610) 822-0242 Brian Kessler, et al Contingent Unknown C/O Walters Bender Strohbehn Litigation & Vaughan, P.C. 2500 City Center Square, 1100 Main, Suite 2500 Donna Moore Contingent Unknown C/O Kessler Topaz Meltzer Litigation & Check, LLP 280 King of Prussia Road Radnor, PA 19087 Phone: (610) 822.0242 Fax: (610) 667.7056 E-mail: eciolko@ktmc.com Steven And Ruth Mitchell Settled $14,500,000 C/O Walters Bender Stroehbehn Litigation & Vaughan, P.C 2500 City Center Square, 1100 Main Street Kansas City, MO 64105 Phone: (816) 421-6620 Fax: (816) 421-4747 E-mail: awalter@wbsvlaw.com Indecomm Global Services General $675,000 200 Middlesex Essex Turnpike Trade Suite 102 Payable Iselin, NJ 08830 Phone: (732) 404-0081 Ext. 208 E-mail: Rajan@indecomm.net Alan Gardner Settled $555,000 C/O Williamson & Williams Litigation 187 Parfitt Way SW, Suite 250 Bainbridge Island, WA 98110 Phone: (206) 441-5444 Fax: (206) 780-5557 E-mail: roblin@williamslaw.com Loan Value Group General Trade Payable $339,148 c/o Frank Politta 47 W. River Road Rumson, NJ 07660 Phone: (732) 741-7300 E-mail: frank@loanvaluegroup.com Tiffany Smith Settled $275,000 C/O Schroeter Goldmark & Litigation Bender 500 Central Bldg., 810 Third Ave. Seattle, WA 98104 Phone: (206) 622-8000 Fax: (206) 682-2305 E-mail: info@sgb-law.com Don E. Diane M. Patterson Settled $157,950 c/o Siegel Brill, P.A. Litigation 100 Washington Avenue South, Suite 1300 Minneapolis, MN 55401 Phone: (612) 337-6100 Fax: (612) 339-6591 E-mail: heidifurlong@siegelbrill.com Wells Fargo & Company General $121,000 Wf 8113, P.O. Box 1450 Trade Payable Minneapolis, MN 55485 Phone: (612) 667-7121 Credstar General $99,773 12395 First American Way Trade Payable Poway, CA 92064 Phone: (800) 921-6700, ext. 5129 E-mail: LPulford@corelogic.com Emortgage Logic General $87,910 9151 Boulevard 26, Suite 400 Trade Payable N. Richard Hills, TX 76180-5605 Phone: (817) 581-2900 E-mail: info@emortgagelogic.com Aegis Usa Inc. General $72,116 2049 Century Park East Trade Payable Suite 300 Los Angeles, CA 90067 Phone: (632) 885-8000 E-mail: Kapil.Chopra@aegisglobal.com RITE AID: Completes Add-On Offering of $421MM 9.25% Senior Notes ---------------------------------------------------------------- Rite Aid Corporation closed its previously announced offering of an additional $421 million aggregate principal amount of 9.25% Senior Notes due 2020. The proceeds of the offering of the New Notes, together with available cash, are being used to fund Rite Aid's cash tender offer for any and all of its 9.375% Senior Notes due 2015 and the related consent solicitation. As part of the Tender Offer, Rite Aid solicited consents from the holders of the Old Notes for certain proposed amendments that would eliminate or modify certain covenants and events of default and other provisions contained in the indenture governing the Old Notes. Adoption of the Proposed Amendments required consents from holders of at least a majority in aggregate principal amount outstanding of the Old Notes. Rite Aid announced that it has received the requisite consents in the Consent Solicitation to execute a supplemental indenture to effect the Proposed Amendments pursuant to its Offer to Purchase and Consent Solicitation Statement, dated May 3, 2012. As of midnight, Eastern Time, on May 14, 2012, $296.3 million aggregate principal amount of the outstanding Old Notes (representing approximately 73.2% of the outstanding Old Notes) had been tendered. Rite Aid has exercised its option to accept for payment and settle the Tender Offer with respect to Old Notes that were validly tendered at or prior to the Consent Payment Deadline. That Early Settlement occurred concurrently with the closing of the offering of the New Notes. As a result of receiving the requisite consents, Rite Aid entered into a supplemental indenture, dated as of May 15, 2012, to the indenture governing the Old Notes to effect the Proposed Amendments. The supplemental indenture became effective upon the Early Settlement of the Tender Offer. The Tender Offer will expire at midnight, Eastern Time, on May 31, 2012, unless the Tender Offer is extended or earlier terminated. Under the terms of the Tender Offer, holders of Old Notes who validly tender their Old Notes after the Consent Payment Deadline but on or before the Expiration Date, and whose notes are accepted for purchase, will receive tender offer consideration of $998.75 per $1,000.00 in principal amount of Old Notes validly tendered plus accrued and unpaid interest from and including the most recent interest payment date, and up to, but excluding, the final settlement date, which is expected to occur the first business day following the Expiration Date. Other than in the limited circumstances set forth in the Offer to Purchase, tenders of Old Notes may not be withdrawn and consents may not be revoked following the Consent Payment Deadline. Rite Aid also delivered notice that it had called for redemption all of the Old Notes that remain outstanding following consummation of the Tender Offer at a price equal to 102.344% of their face amount, plus accrued and unpaid interest to, but not including, the date of redemption. Redemption of the remaining Old Notes is expected to occur on June 15, 2012. Requests for documents relating to the Tender Offer and Consent Solicitation may be directed to Global Bondholder Services Corp., the Information Agent, at (866) 804-2200 or (212) 430-3774 (banks and brokers). Citigroup is acting as Dealer Manager for the Tender Offer and Consent Solicitation. Questions regarding the Tender Offer and Consent Solicitation may be directed to Citigroup at (800) 558-3745 (toll free) or (212) 723-6106 (collect). A copy of the Form 8-K is available for free at: http://is.gd/Y7KjRu About Rite Aid Corp. Drugstore chain Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, has more than 4,700 stores in 31 states and the District of Columbia and fiscal 2010 annual revenues of $25.7 billion. Rite Aid reported a net loss of $368.57 million for the fiscal year ended March 3, 2012, a net loss of $555.42 million for the year ended Feb. 26, 2011, and a net loss of $506.67 million for the year ended Feb. 27, 2010. The Company's balance sheet at March 3, 2012, showed $7.36 billion in total assets, $9.95 billion in total liabilities, and a $2.58 billion in total stockholders' deficit. * * * In February 2012, S&P affirmed Rite Aid's 'B-' corporate credit rating. During that time, Moody's Investors Service also affirmed its Caa2 Corporate Family Rating, Caa2 Probability of Default Rating, and SGL-3 Speculative Grade Liquidity rating. "The ratings reflect our expectation that Camp Hill, Pa.-based retail drugstore chain Rite Aid Corp.'s financial risk profile will remain 'highly leveraged', despite improving sales trends, due to its significant debt," said Standard & Poor's credit analyst Ana Lai. Moody's said in February that Rite Aid's Caa2 Corporate Family Rating reflects its weak credit metrics and unsustainable capital structure with debt to EBITDA of 8.8 times and EBITA to interest expense of 0.8 times. Although Moody's believes that Rite Aid earnings will benefit from Walgreen's dispute with Express Scripts as well as from the strong generic pipeline, Moody's anticipates that lower reimbursement rates will offset some of this positive earnings pressure. Thus, Moody's forecasts that Rite Aid's credit metrics will remain weak. In addition, Rite Aid faces a tradeoff between the need to address its sizable 2014 and 2015 debt maturities against the likelihood that any refinancing will be at a higher interest rate. Should Rite Aid successfully refinance its 2014 and 2015 debt maturities, its borrowing costs will likely increase further weakening Rite Aid's interest coverage. Consequently, Moody's is concerned that Rite Aid may choose to voluntarily restructure its debt over the medium term. ROSETTA GENOMICS: Effects a 1-for-15 Reverse Stock Split -------------------------------------------------------- Rosetta Genomics Ltd. announced the effectiveness of a one-for- fifteen reverse stock split of its share capital. The reverse stock split, which was previously approved by the Company's Board of Directors, was approved by its shareholders at an Extraordinary General Meeting of Shareholders of the Company held on May 14, 2012. The reverse stock split is intended to increase the per share trading price of the Company's ordinary shares to satisfy the $1.00 minimum bid price requirement for continued listing on the NASDAQ Capital Market. As a result of the reverse stock split, every fifteen ordinary shares issued and outstanding prior to the opening of trading on May 15, 2012, will be consolidated into one issued and outstanding share, with a change in the nominal par value per share from NIS 0.04 to NIS 0.6. No fractional ordinary shares will be issued as a result of the reverse stock split and any fractional shares will be rounded up to the nearest whole number. Trading of the Company's ordinary shares on the NASDAQ Capital Market will continue, on a split-adjusted basis, with the opening of the markets on Tuesday, May 15, 2012, under new CUSIP number M82183126. Immediately subsequent to the reverse stock split, there will be approximately 1,241,874 of the Company's ordinary shares issued and 1,238,642 of the Company's ordinary shares outstanding. The Company has retained its transfer agent, American Stock Transfer & Trust Company, LLC, to act as its exchange agent for the reverse split. AST will provide shareholders of record as of the effective date a letter of transmittal providing instructions for the exchange of their certificates. Shareholders owning shares via a broker or other nominee will have their positions automatically adjusted to reflect the reverse stock split, subject to brokers' particular processes, and will not be required to take any action in connection with the reverse stock split. Rosetta Genomics Ltd. held an extraordinary general meeting of shareholders on May 14, 2012. The shareholders approved the consolidation of the Company's Ordinary Shares into a smaller number of shares with a greater nominal (par) value per share and the corresponding amendment to the Company's articles of association. The shareholders also approved an increase of the Company's registered (authorized) share capital and the corresponding amendment to the Articles. About Rosetta Located in Rehovot, Israel, Rosetta Genomics Ltd. is seeking to develop and commercialize new diagnostic tests based on a recently discovered group of genes known as microRNAs. MicroRNAs are naturally expressed, or produced, using instructions encoded in DNA and are believed to play an important role in normal function and in various pathologies. The Company has established a CLIA- certified laboratory in Philadelphia, which enables the Company to develop, validate and commercialize its own diagnostic tests applying its microRNA technology. For the year ended Dec. 31, 2011, Kost Forer Gabbay & Kasierer, in Tel-Aviv, Israel, expressed substantial doubt about Rosetta Genomics' ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and generated negative cash flows from operating activities in each of the three years in the period ended Dec. 31, 2011. The Company reported a net loss after discontinued operations of $8.83 million on $103,000 of revenues for 2011, compared with a net loss after discontinued operations of $14.76 million on $279,000 of revenues for 2010. The Company's balance sheet at Dec. 31, 2011, showed $2.04 million in total assets, $2.40 million in total liabilities, and a stockholders' deficit of $356,000. Bankruptcy Warning The Company said in its annual report for the year ended Dec. 31, 2011, "We have used substantial funds to discover, develop and protect our microRNA tests and technologies and will require substantial additional funds to continue our operations. Based on our current operations, our existing funds, including the proceeds from the January 2012 debt financing, will only be sufficient to fund operations until late May, 2012. We intend to seek funding through collaborative arrangements and public or private equity offerings and debt financings. Additional funds may not be available to us when needed on acceptable terms, or at all. In addition, the terms of any financing may adversely affect the holdings or the rights of our existing shareholders. For example, if we raise additional funds by issuing equity securities, further dilution to our then-existing shareholders may result. Debt financing, if available, may involve restrictive covenants that could limit our flexibility in conducting future business activities. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail one or more of our research or development programs. We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights to some of our technologies, tests or products in development or approved tests or products that we would otherwise pursue on our own. Our failure to raise capital when needed will materially harm our business, financial condition and results of operations, and may require us to seek protection under the bankruptcy laws of Israel and the United States. ROTECH HEALTHCARE: Incurs $17.2 Million Net Loss in Q1 ------------------------------------------------------ Rotech Healthcare Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $17.25 million on $116.95 million of net revenues for the three months ended March 31, 2012, compared with a net loss of $3.19 million on $121 million of net revenues for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $267.15 million in total assets, $584.24 million in total liabilities, $3.08 million in series A convertible redeemable preferred stock, and a $320.17 million total stockholders' deficiency. "While we are pleased with continued patient growth, nevertheless our first quarter 2012 financial results were negatively impacted by contractual and bad debt adjustment levels of nearly $10 million higher than prior year," said Philip Carter, President and Chief Executive Officer. "We are making efforts to reduce these higher than normal adjustment levels but such efforts may not result in any material reductions until at least the end of the second quarter of 2012," Mr. Carter added. A copy of the Form 10-Q is available for free at: http://is.gd/JZ9dD4 About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. * * * In October 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Rotech Healthcare to 'B-' from 'CCC'. The outlook is positive. In the March 22, 2011, edition of the TCR, Standard & Poor's Ratings Services said that it raised its corporate credit rating to 'B' from 'B-' on Orlando, Fla.-based Rotech Healthcare Inc., following the completion of the company's $290 million second-lien senior secured notes offering. "The ratings on Rotech Healthcare Inc. reflect the company's weak business risk profile, incorporating Rotech's exposure to Medicare reimbursement reductions for its products and services," said Standard & Poor's credit analyst Jesse Juliano. The rating also reflects the company's highly leveraged financial risk profile. As previously reported by the TCR on Jan. 13, 2012, Moody's Investors Service lowered Rotech Healthcare Inc.'s Corporate Family rating ("CFR") to B3 from B2 as a consequence of weakening liquidity and worse than expected operating performance in 2011 alongside only modest expectations for improvement in 2012. The downgrade to B3 incorporates Moody's concerns regarding the decline in Rotech's cash balance due to significant working capital usage during 2011 and lower than expected growth in EBITDA. ROTHSTEIN ROSENFELDT: Don King Suit Moved to District Court ----------------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that a fraudulent transfer suit brought against Don King Productions Inc. by the Chapter 11 trustee of Ponzi schemer Scott Rothstein's defunct law firm can be removed to district court, a Florida judge ruled Tuesday, but discovery and nondispositive pretrial motions will remain in bankruptcy court. Law360 relates that Herbert Stettin, trustee for Rothstein Rosenfeldt Adler PA, filed the adversary proceeding in an attempt to recover funds which the boxing promoter's company had allegedly received from the firm prior to its November 2009 bankruptcy. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. ROOMSTORE INC: Duels With Creditors Over Bankruptcy Probe --------------------------------------------------------- Rachel Feintzeig at Dow Jones' DBR Small Cap reports that RoomStore Inc. is accusing its unsecured creditors of harassing the company and its directors and distracting the furniture and bedding retailer from its reorganization efforts. About RoomStore Inc. Richmond, Virginia-based RoomStore, Inc., operates retail furniture stores and offers home furnishings through Furniture.com, a provider of Internet-based sales opportunities for regional furniture retailers. RoomStore was founded in 1992 in Dallas, Texas, with four retail furniture stores. With more than $300 million in net sales for its fiscal year ending 2010, RoomStore was one of the 30 largest furniture retailers in the United States. RoomStore filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case No. 11-37790) on Dec. 12, 2011, following store-closing sales at four of its retail stores, located in Hoover, Alabama; Fayetteville, North Carolina; Tallahassee, Florida; and Baltimore, Maryland. When it filed for bankruptcy, the Company operated a chain of 64 retail furniture stores, including both large-format stores and clearance centers in eight states: Pennsylvania, Maryland, Virginia, North Carolina, South Carolina, Florida, Alabama, and Texas. It also had five warehouses and distribution centers located in Maryland, North Carolina, and Texas that service the Retail Stores. RoomStore also owns 65% of Mattress Discounters Group LLC, which operates 83 mattress stores (as of Aug. 31, 2011) in the states of Delaware, Maryland and Virginia and in the District of Columbia. RoomStore acquired the Mattress Discounters stake after it filed its second bankruptcy in 2008. Mattress Discounters sought Chapter 11 relief (Bankr. D. Md. Case Nos. 08-21642 and 08-21644) on Sept. 10, 2008. It filed the first Chapter 11 bankruptcy on Oct. 23, 2002 (Bankr. D. Md. Case No. 02-22330), and emerged on March 14, 2003. Judge Douglas O. Tice, Jr., presides over RoomStore's case. Lawyers at Lowenstein Sandler PC and Kaplan & Frank, PLC serve as the Debtor's bankruptcy counsel. FTI Consulting, Inc., serves as the Debtor's financial advisors and consultants. RoomStore's balance sheet at Aug. 31, 2011, showed $70.4 million in total assets, $60.3 million in total liabilities, and stockholders' equity of $10.1 million. The petition was signed by Stephen Girodano, president and chief executive officer. Liquidator Hilco Merchant Resources, Inc., is represented in the case by Gregg M. Galardi, Esq., at DLA Piper LLP (US); and Robert S. Westermann, Esq., and Sheila de la Cruz, Esq., at Hirschler Fleischer, P.C. The U.S. Trustee for Region 4 named seven members to the official committee of unsecured creditors in the case. RUBICON FINANCIAL: Reports $83,900 Net Income in First Quarter -------------------------------------------------------------- Rubicon Financial Incorporated filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $83,950 on $4.21 million of revenue for the three months ended March 31, 2012, compared with net income of $349,022 on $4.36 million of revenue for the same period during the prior year. The Company reported a net loss of $2.0 million for 2011, compared with a net loss of $1.7 million for 2010. The Company's balance sheet at March 31, 2012, showed $5.16 million in total assets, $4.79 million in total liabilities and $362,683 total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/SK0fZ1 About Rubicon Irvine, Calif.-based Rubicon Financial Incorporated is a financial services holding company. The Company operates primarily through Newport Coast Securities, Inc., a fully-disclosed broker-dealer, which does business as Newport Coast Asset Management as a registered investment advisor and dual registrant with the Securities and Exchange Commission and Newport Coast Securities insurance general agency. After auditing the 2011 results, Weaver Martin & Samyn, LLC, in Kansas City, Missouri, expressed substantial doubt about Rubicon Financial's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and had negative cash flows from operations. SAAB CARS: To Sell U.S. Parts Inventory at May 29 Auction --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Saab Cars North America Inc. will hold an auction on May 29 to learn whether anyone will beat an affiliate of the parent when it comes to making an offer for the parts inventory. In sale procedures approved this week, competing bids are due by May 24. A hearing to approve the sale will take place on May 29 after the auction that morning. Saab Parts AB is setting up a subsidiary to take over the distribution of parts in the U.S. The affiliate is offering to buy the inventory of parts for about $2.5 million. About Saab Cars N.A. More than 40 U.S.-based Saab dealerships have signed an involuntary chapter 11 bankruptcy petition for Saab Cars North America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30, 2012. The petitioners, represented by Wilk Auslander LLP, assert claims totaling $1.2 million on account of "unpaid warranty and incentive reimbursement and related obligations" and/or "parts and warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia Gentile & Associates, in New York, signed the Chapter 11 petition on behalf of the dealers. Donlin, Recano & Company, Inc. (DRC), has been retained to provide claims and noticing agent services to Saab Cars North America, Inc. in its Chapter 11 case. The dealers want the vehicle inventory and the parts business to be sold, free of liens from Ally Financial Inc. and Caterpillar Inc., and "to have an appropriate forum to address the claims of the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg News. Saab Cars N.A. is the U.S. sales and distribution unit of Swedish car maker Saab Automobile AB. Saab Cars N.A. named in December an outside administrator, McTevia & Associates, to run the company as part of a plan to avoid immediate liquidation following its parent company's bankruptcy filing. Saab Automobile AB is a Swedish car manufacturer owned by Dutch automobile manufacturer Swedish Automobile NV, formerly Spyker Cars NV. Saab Automobile AB, Saab Automobile Tools AB and Saab Powertain AB filed for bankruptcy on Dec. 19, 2011, after running out of cash. On Feb. 24, 2012, the Court, inconsideration of the petition filed on Jan. 30, 2012, granted Saab Cars North America, Inc., relief under Chapter 11 of the Bankruptcy Code. On March 9, 2012, the U.S. Trustee formed an official Committee of Unsecured Creditors and appointed these members: Peter Mueller Inc., IFS Vehicle Distributors, Countryside Volkwagen, Saab of North Olmstead, Saab of Bedford, Whitcomb Motors Inc., and Delaware Motor Sales, Inc. The Committee tapped Wilk Auslander LLP as general bankruptcy counsel, and Polsinelli Shughart as its Delaware counsel. SALLY HOLDINGS: Has $700 Million 5.75% Senior Notes Offering ------------------------------------------------------------ Sally Holdings LLC filed with the U.S. Securities and Exchange Commission a free writing prospectus relating to the offering of $700 million 5.75% senior notes due 2022. Joint book-running managers of the offering are BofA Merrill Lynch, Credit Suisse, Wells Fargo Securities, Deutsche Bank Securities, Goldman, Sachs & Co., J.P. Morgan, and RBC Capital Markets. A copy of the fwp is available for free at: http://is.gd/BOFbTk About Sally Holdings Sally Holdings, LLC, based in Denton, Texas, is a leading retailer and distributor of beauty products with over 3,800 stores in 10 countries. Annual revenues are around $2.6 billion. The Company's balance sheet at Sept. 30, 2011, showed $1.72 billion in total assets, $2.01 billion in total liabilities, and a $281.69 million total members' deficit. Bankruptcy Warning Sally Holdings' ability to comply with the covenants and restrictions contained in the senior credit facilities and the indentures for the Notes may be affected by economic, financial and industry conditions beyond the Company's control. The breach of any of these covenants and restrictions could result in a default under either the senior credit facilities or the indentures that would permit the applicable lenders or note holders, as the case may be, to declare all amounts outstanding thereunder to be due and payable, together with accrued and unpaid interest. If the Company is unable to repay debt, lenders having secured obligations, such as the lenders under the senior credit facilities, could proceed against the collateral securing the debt. In any such case, the Company may be unable to borrow under the senior credit facilities and may not be able to repay the amounts due under the Term Loans and the Notes. This could have serious consequences to the Company's financial condition and results of operations and could cause the Company to become bankrupt or insolvent. * * * As reported by the TCR on Nov. 7, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Sally Holdings LLC to 'BB+' from 'BB'. The rating outlook is positive. "Standard & Poor's Rating Services' rating reflects our view that Sally Holdings, which is an indirect wholly owned subsidiary of Sally Beauty Holdings Inc., will continue its positive momentum with organic sales growth of 5% to 7%, positive comparable-store sales, modest gross margin improvement, and continued debt reduction, resulting in improving credit protection measures over the next 12 months," said Standard & Poor's credit analyst Jayne Ross. It has 'B2' corporate family and probability of default ratings from Moody's. SAN JOAQUIN TRANS: Fitch Affirms 'BB' Rating on Outstanding Bonds ----------------------------------------------------------------- Fitch Ratings has affirmed the underlying 'BB' rating on the San Joaquin Hills Transportation Corridor Agency (SJHTCA, or the agency), California's outstanding bonds as follows: -- $220 million senior lien toll road revenue bonds, series 1993; -- Insured portion of the toll road refunding revenue bonds, series 1997A; -- Uninsured portion of the toll road refunding revenue bonds, series 1997A. The Rating Outlook is Stable for all bonds. KEY RATING DRIVERS: -- Traffic Significantly Lower Than Forecast: The 15-mile limited access highway serves as a congestion reliever in Orange and Riverside Counties. Actual traffic performance (25.5 million in fiscal 2011) is just 43% of the agency's original projections, largely due to optimistic projections since opening and frequent toll increases. -- Limited Pricing Power: Management has increased toll rates 12 times to satisfy its toll rate covenant. The cash toll rate per mile of $0.38 on the mainline is one of the highest relative to peers. -- Back Loaded Debt with Refinance Risk: The 2011 debt restructuring provides the agency flexibility over the next 10 years to manage the unpredictable pace of traffic and revenue growth; however, it creates a debt service cliff in fiscal 2025 when it increases by 90%. Under conservative growth scenarios, a refinancing may be challenging. -- Weak Financial Profile: Leverage is high at nearly 20 times (x). With historical low rates of growth and frequent inflationary toll increases, projections indicate SJHTCA is expected to maintain coverage levels at or above 1.0x through fiscal 2024 at which point a refinancing may be required. Fitch's Base Case scenario indicates project life coverage ratios in the 1.4x range, which could support a future debt restructuring to create long-term stability. The agency's various reserves totaling nearly $350 million in fiscal 2011 provide considerable financial flexibility up to that decision-point. WHAT COULD TRIGGER A RATING ACTION: -- Revenue growth over the next decade of less than a 5% compound annual growth rate (CAGR) from a combination of traffic or toll rate increases that result in lower debt service coverage ratios (DSCRs) than Fitch's Base Case. -- Changes in management's historical stance towards timely toll rate increases to maximize revenues. SECURITY: The bonds are secured by a net pledge of toll revenue collected at the mainline and ramp toll plazas and a portion of development impact fees (DIF) assessed in the corridor. SJHTCA is authorized to retain $2.5 million of the DIF annually to be used for planning, environmental, and construction purposes. CREDIT UPDATE: The agency has increased toll rates 12 times since fiscal 1997 resulting in toll revenues (excluding fees and fines) of approximately $88.1 million in fiscal 2011 (ended June 30) - 1.2% over fiscal 2010 and down 3.5% from the peak of $91.4 million in fiscal 2008. Traffic and revenue is down 0.7% and up 4.8%, respectively, for year-to-date fiscal 2012 (July to March) reflecting the July 2011 toll increase. Management did not implement a toll increase in fiscal 2011 due to the weak economic conditions. Historical revenue growth since fiscal 2002 averaged 9.4% annually through fiscal 2007, and is estimated to average 4.9% annually including the recession through fiscal 2012. Debt service coverage for fiscal 2011 -- including the use of $32.9 million drawn from the Toll Stabilization Fund (TSF) -- was 1.39x, or much lower at 0.93x without the liquidity draw. Management does not anticipate drawing from the TSF in fiscal 2012, primarily due to the toll increase and lower debt service. DSCR is expected to be 1.06x. In 2010, Fitch noted the near-term financial challenges the SJHTCA would face given the 16% increase in debt service obligations in fiscal 2012 and similar increases every three to four years until fiscal 2033. The 2011 debt restructuring has lowered the obligations by an average of 30% in each of fiscal years 2012 to 2024. As a result, in Fitch's Base Case, debt service coverage is expected to be at least 1.0x through fiscal 2024. Traffic is projected to grow, but only moderately at nearly 1% annually through fiscal 2042 while revenue grows at a CAGR of more than 4%. Draws on internal liquidity begin in fiscal 2025 when debt service rises 90% over the year prior. Under Fitch's Rating Case, which assumes lower traffic and revenue CAGRs of 0.5% and more than 3%, respectively, larger liquidity draws are required to meet debt service obligations and, should a refinance not occur, all of the agency's reserves would be depleted by fiscal 2031. SB PARTNERS: Delays Q1 Form 10-Q to Review Omaha Financials ----------------------------------------------------------- SB Partners has a 30% non-controlling interest in Sentinel Omaha, LLC, an affiliate of the Company's general partner. The investment in Omaha is accounted for at fair value. Earlier this year, the controller for Omaha informed the Company that, due to open issues, Omaha's auditors would be unable to complete their audit and issue an audit opinion for calendar year 2011 until mid- May 2012. Because the investment in Omaha constitutes a significant portion of the assets of the Company, the Company's auditors are required to review both the financial statements of Omaha and the related workpapers prepared by Omaha's auditors after the audit work of Omaha is completed. Until the Company's auditors perform their review of the Omaha audit, the Company's auditors cannot issue an audited opinion on the Company's financial statements for the period ending December 31, 2011. As a result, the Company was not able to file its form 10-K for the period ending Dec. 31, 2011, timely and filed form NT 10-K. The Company's auditors are reviewing the Omaha report and workpapers, and anticipate completing the annual audited report for the Company shortly. The Company anticipates being prepared to file its form 10-K for the period ending Dec. 31, 2011, and form 10-Q for the period ending March 31, 2012, within the next several weeks. 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. SBD AIRPORT: SBIA Chief Insists Right to Cancel Fuel Access ----------------------------------------------------------- Contra Costa Times reports attorneys for SBD Airport Services has appeared before a federal judge to contend that interim San Bernardino International Airport chief A.J. Wilson acted improperly when he cut off the company's access to jet fuel. SBD Airport Services filed for Chapter 11 bankruptcy protection in March, one month after Mr. Wilson asserted the company violated its fuel contract and blocked the firm's access to the airport's fuel supplies and trucks. The report notes SBD Airport Services attorneys have argued the company needs access to the airport's "fuel farm" in order to conduct business. According to the report, Mr. Wilson and the airport said in court filings that SBIA officials had a right to terminate the airport's fuel services agreement with SBD Airport Services because the company did not have the minimum amount of fuel in its tanks to live up to its side of the deal. The fuel dispute stems from a February incident in which the pilot of a 727 jet was unable to purchase the full amount of requested fuel, the report notes. The report says Mr. Wilson moved quickly to cancel SBD Airport Service's fuel contract. Airport staffers have since handled fuel sales on their own. The report notes SBD Airport Services is one of several companies at the San Bernardino airport tied to Scot Spencer, a businessman who previously led the development of the airport's passenger terminal and other facilities. Mr. Spencer's role at the airport has diminished since the FBI raided SBIA offices and other locations, including Mr. Spencer's home in October 2011, while investigating alleged corruption at the airport. The report notes Mr. Wilson assumed the top job at the San Bernardino International Airport Authority after the raid and has sought to bring assets under Mr. Spencer's control into the hands of the Airport Authority. Mr. Spencer's spokesman, Coby King, has repeatedly accused Mr. Wilson of bullying Mr. Spencer in remarks related to the fuel dispute. Based in San Bernardino, California, SBD Airport Services LLC filed for Chapter 11 protection on March 5, 2012 (Bankr. C.D. Calif. Case No. 12-15504). Judge Deborah J. Saltzman presides over the case. David B. Golubchik, Esq., at Levene Neale Bender Rankin & Brill LLP, represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. SEARS HOLDINGS: To Pursue Partial Spin-Off of Sears Canada ---------------------------------------------------------- Sears Holdings Corporation said Thursday its board of directors has approved plans to pursue a partial spin-off of its interest in Sears Canada Inc. (TSX: SCC). Holdings, which currently owns about 95% of the issued and outstanding common shares of Sears Canada, expects to distribute common shares of Sears Canada held by Holdings on a pro rata basis to holders of Holdings' common stock such that following the spin-off, Holdings will retain roughly 51% of the issued and outstanding common shares of Sears Canada. Subsequent to the spin-off, Holdings may sell, hold or distribute to holders of Holdings' common stock any portion of its remaining interest in Sears Canada. Holdings expects Sears Canada to file documents with the Securities and Exchange Commission and the Canadian Securities Administrators over the next few months with the expectation of completing the proposed spin-off during the 2012 calendar year. Following the spin-off, Sears Canada will continue to be listed on the Toronto Stock Exchange. The spin-off is subject to a number of conditions, including approval of securities filings by the board of directors of Sears Canada, review by the relevant securities regulators and final approval of the Holdings board of directors. Holdings believes that the spin-off will permit each of Sears Canada and Holdings to focus on their respective businesses and allocate resources to best optimize returns on assets employed. Holdings also believes that the spin-off will provide investors with a more targeted investment opportunity by having equity in two separate public companies, allow investors to participate in a direct investment in Sears Canada, and provide stockholders with increased flexibility of choice in what assets and securities they hold. In addition, Holdings believes that the spin-off will potentially enhance the liquidity of holders of Sears Canada's common shares. Holdings expects that the spin-off will be taxable as a dividend to Holdings' stockholders. Holdings expects to continue to include Sears Canada as a consolidated subsidiary in Holdings' Consolidated Financial Statements following the spin-off. Holdings has the right not to complete the spin-off if, at any time, Holdings' board of directors determines, in its sole discretion, that the spin-off is not in the best interests of Holdings or its stockholders or is otherwise not advisable. Ben Protess, writing for The New York Times, relates the planned spinoff is the latest step in a broader effort by Sears and its chairman, the hedge fund billionaire Edward S. Lampert, to raise cash and allay concerns about liquidity problems. NY Times says the Canadian unit is a poor performer that has weighed down the struggling retailer. In a letter to shareholders earlier this year, Mr. Lampert acknowledged that the unit "experienced very poor results." According to NY Times, the spinoff marks a curious change in strategy for Mr. Lampert, who in 2009 moved to exert more control over Sears Canada, gradually ratcheting up the stake in the unit. The strategic shift also comes as Target, one of its top competitors, moves into the Canadian market. About Sears Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- is the nation's fourth largest broadline retailer with more than 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a 94% stake in Sears Canada and an 80.1% stake in Orchard Supply Hardware. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. Kmart completed its merger with Sears on March 24, 2005. Sears Holdings' balance sheet at Jan. 28, 2012, showed $21.38 billion in total assets, $17.04 billion in total liabilities, and $4.34 billion in total equity. Negative Outlook Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Ill.-based Sears Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with negative implications on Dec. 28, 2011. We are also lowering the short-term and commercial paper rating to 'C' from 'B-2'. The rating outlook is negative," S&P said. "The corporate credit rating reflects our projection that Sears' EBITDA will be negative in 2012, given our expectations for continued sales and margin pressure," said Standard & Poor's credit analyst Ana Lai. She added, "We further expect that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses." Moody's Investors Service in January 2012 lowered Sears Holdings Family and Probability of Default Ratings to B3 from B1. The outlook remains negative. At the same time Moody's affirmed Sears' Speculative Grade Liquidity Rating at SGL-2. The rating action reflects Moody's expectations that Sears will report a significant operating loss in fiscal 2011. Moody's added that the rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers. SIMON WORLDWIDE: Incurs $464,000 Net Loss in First Quarter ---------------------------------------------------------- Simon Worldwide, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $464,000 on $0 of revenue for the three months ended March 31, 2012, compared with a net loss of $490,000 on $0 of revenue for the same period during the prior year. Simon Worldwide reported a net loss of $1.97 million in 2011, compared with a net loss of $2.33 million in 2010. The Company's balance sheet at March 31, 2012, showed $8.78 million in total assets, $134,000 in total liabilities, all current, and $8.65 million in total stockholders' equity. With no revenues from operations, the Company closely monitors and controls its expenditure within a reasonably predictable range. Cash used by operating activities was $1.9 million and $2.3 million in the years ended Dec. 31, 2011, and 2010, respectively. Cash used by operating activities was $.4 million for the three months ended March 31, 2012 and 2011. The Company incurred losses within its continuing operations in 2011 and continues to incur losses in 2012 for the general and administrative expenses incurred to manage the affairs of the Company. By utilizing cash available at March 31, 2012, to maintain its scaled back operations, management believes it has sufficient capital resources and liquidity to operate the Company for at least one year. A copy of the Form 10-Q is available for free at: http://is.gd/LD7Ku2 About Simon Worldwide Based in Los Angeles, Simon Worldwide, Inc. (OTC: SWWI) no longer has any operating business. Prior to August 2001, the Company operated as a multi-national full-service promotional marketing company, specializing in the design and development of high-impact promotional products and sales promotions. At Dec. 31, 2009, the Company held an investment in Yucaipa AEC Associates, LLC, a limited liability company that is controlled by the Yucaipa Companies, a Los Angeles, California based investment firm. Yucaipa AEC in turn principally held an investment in the common stock of Source Interlink Companies, a direct-to-retail magazine distribution and fulfillment company in North America, and a provider of magazine information and front-end management services for retailers and a publisher of approximately 75 magazine titles. Yucaipa AEC held this investment in Source until April 28, 2009, when Source filed a pre-packaged plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. SMART-TEK SOLUTIONS: Incurs $8.1MM Comprehensive Loss in 2011 ------------------------------------------------------------- Smart-tek Solutions Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a comprehensive loss of $8.12 million on $21.74 million of revenue for the year ended Dec. 31, 2011, compared with a comprehensive income of $855,188 on $17.22 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $8.52 million in total assets, $15.42 million in total liabilities and a $6.90 million total stockholders' deficit. After auditing the 2011 results, PMB Helin Donovan, LLP, in Dallas, Texas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has sustained recurring losses from operations and has an accumulated deficit of approximately $13 million at Dec. 31, 2011. A copy of the Form 10-K is available for free at: http://is.gd/ate2Pq About Smart-tek Solutions Newport Beach, Calif.-based Smart-tek Solutions Inc. has two business lines. Through its wholly owned subsidiary Smart-Tek Communications Inc. the Company specializes in the design and development of Radio Frequency Identification (RFID) integration, monitoring and tracking solutions to meet industry demands. Through its wholly owned subsidiary Smart-Tek Automated Services Inc. the Company provides professional employer organization services. SMART-TEK SOLUTIONS: Delays Form 10-Q for First Quarter ------------------------------------------------------- Smart-Tek Solutions Inc. informed the U.S. Securities and Exchange Commission that it will be late in filing its quarterly report on Form 10-Q for the period ended March 31, 2012. The review of the financials by the outside auditors will be completed on or about May 18, 2012. About Smart-tek Solutions Newport Beach, Calif.-based Smart-tek Solutions Inc. has two business lines. Through its wholly owned subsidiary Smart-Tek Communications Inc. the Company specializes in the design and development of Radio Frequency Identification (RFID) integration, monitoring and tracking solutions to meet industry demands. Through its wholly owned subsidiary Smart-Tek Automated Services Inc. the Company provides professional employer organization services. The Company reported a comprehensive loss of $8.12 million on $21.74 million of revenue for the year ended Dec. 31, 2011, compared with a comprehensive income of $855,188 on $17.22 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $8.52 million in total assets, $15.42 million in total liabilities and a $6.90 million total stockholders' deficit. After auditing the financial statements for 2011, PMB Helin Donovan, LLP, in Dallas, Texas, expressed ubstantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has sustained recurring losses from operations and has an accumulated deficit of approximately $13 million at Dec. 31, 2011. SP NEWSPRINT: Lease for Polk County Recycling Operations Approved ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized SP newsprint Holdings LLC, et al., to enter into the lease for property in Polk County, to allow the Debtors to continue their Polk County recycling operations. In a separate order, the Court authorized the Official Committee of Unsecured Creditors to file a redacted version of its limited objection to the Debtors' emergency motion for order to enter into Polk County lease. About SP Newsprint Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers, Southeastern Paper Recycling and SP Newsprint Merger LLC -- and three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011. SP Newsprint Holdings LLC is a newsprint company controlled by polo-playing mogul Peter Brant. It is one of the largest producers of newsprint in North America. SP Recycling Corporation, a Georgia corporation and the Debtors' other operating company, was established in 1980 as a means for SP to secure a ready supply of recycled fiber, a key raw material for its newsprint. SP Newsprint is the second Brant-owned newsprint company to tumble into bankruptcy proceedings in recent years. Current and former affiliated entities are Bear Island Paper Company, L.L.C., Brant Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint, Inc., White Birch Paper Company. Judge Christopher S. Sontchi presides over the case. Joel H. Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr., Esq. -- jlevitin@cahill.com , mpeleg@cahill.com and rstieglitz@cahill.com -- at Cahill Gordon & Reindel LLP serve as the Debtors' lead counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq. -- kaufman@rlf.com and collins@RLF.com -- at Richards, Layton & Finger, P.A., serve as the Debtors' Delaware counsel. AlixPartners LLP serves as the Debtors' financial advisors and The Garden City Group Inc. serves as the Debtors' claims and noticing agent. SP Newsprint Co., LLC, disclosed $317,992,392 in assets and $322,674,963 in liabilities as of the Chapter 11 filing. The petitions were signed by Edward D. Sherrick, executive vice president and chief financial officer. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler PC. Ashby & Geddes, P.A., serves as its Delaware counsel, and BDO Consulting serves as its financial advisor. SP NEWSPRINT: Panel's Investigation Period Extended Until June 13 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a stipulation extending until June 13, 2012, the challenge period of the Official Committee of Unsecured Creditors in the Chapter 11 cases of SP newsprint Holdings LLC, et al. The stipulation was entered among the Debtors and General Electric Capital Corporation, as prepetition agent under the prepetition credit agreement and DIP agent under the DIP credit agreement, and the Committee. On Jan. 25, 2012, the Court entered a final order authorizing the Debtors to obtain postpetition secured financing, and use the cash collateral. Among other things, the Committee was required to investigate and prosecute the claims and defenses until Feb. 29, 2012. Pursuant to previous stipulations, the challenge period was extended. The Committee explained that the extended deadline will preserve it rights regarding the perfection-related claims and defenses and the Section 547 claims. About SP Newsprint Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers, Southeastern Paper Recycling and SP Newsprint Merger LLC -- and three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011. SP Newsprint Holdings LLC is a newsprint company controlled by polo-playing mogul Peter Brant. It is one of the largest producers of newsprint in North America. SP Recycling Corporation, a Georgia corporation and the Debtors' other operating company, was established in 1980 as a means for SP to secure a ready supply of recycled fiber, a key raw material for its newsprint. SP Newsprint is the second Brant-owned newsprint company to tumble into bankruptcy proceedings in recent years. Current and former affiliated entities are Bear Island Paper Company, L.L.C., Brant Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint, Inc., White Birch Paper Company. Judge Christopher S. Sontchi presides over the case. Joel H. Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr., Esq. -- jlevitin@cahill.com , mpeleg@cahill.com and rstieglitz@cahill.com -- at Cahill Gordon & Reindel LLP serve as the Debtors' lead counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq. -- kaufman@rlf.com and collins@RLF.com -- at Richards, Layton & Finger, P.A., serve as the Debtors' Delaware counsel. AlixPartners LLP serves as the Debtors' financial advisors and The Garden City Group Inc. serves as the Debtors' claims and noticing agent. SP Newsprint Co., LLC, disclosed $317,992,392 in assets and $322,674,963 in liabilities as of the Chapter 11 filing. The petitions were signed by Edward D. Sherrick, executive vice president and chief financial officer. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler PC. Ashby & Geddes, P.A., serves as its Delaware counsel, and BDO Consulting serves as its financial advisor. SP NEWSPRINT: R.L. Reimers Wins Lift Stay to Commence Proceedings ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware signed an agreed order granting R.L. Reimers Co., relief from the automatic stay in the Chapter 11 cases of SP newsprint Holdings LLC, et al. The Debtors agreed to lift the automatic stay to allow R.L. Reimers to pursue an action to perfect and enforce mechanic's, construction or similar lien in the Oregon state court, or alternatively, to join in any pending lien foreclosure action relating to 1301 Wynooski Street, Newberg. Oregon, including the civil action captioned G.H. McCulloch, Inc. v. SP newsprint Co.,, LLC, et al., Yamhill County Circuit Court. About SP Newsprint Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers, Southeastern Paper Recycling and SP Newsprint Merger LLC -- and three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011. SP Newsprint Holdings LLC is a newsprint company controlled by polo-playing mogul Peter Brant. It is one of the largest producers of newsprint in North America. SP Recycling Corporation, a Georgia corporation and the Debtors' other operating company, was established in 1980 as a means for SP to secure a ready supply of recycled fiber, a key raw material for its newsprint. SP Newsprint is the second Brant-owned newsprint company to tumble into bankruptcy proceedings in recent years. Current and former affiliated entities are Bear Island Paper Company, L.L.C., Brant Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint, Inc., White Birch Paper Company. Judge Christopher S. Sontchi presides over the case. Joel H. Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr., Esq. -- jlevitin@cahill.com , mpeleg@cahill.com and rstieglitz@cahill.com -- at Cahill Gordon & Reindel LLP serve as the Debtors' lead counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq. -- kaufman@rlf.com and collins@RLF.com -- at Richards, Layton & Finger, P.A., serve as the Debtors' Delaware counsel. AlixPartners LLP serves as the Debtors' financial advisors and The Garden City Group Inc. serves as the Debtors' claims and noticing agent. SP Newsprint Co., LLC, disclosed $317,992,392 in assets and $322,674,963 in liabilities as of the Chapter 11 filing. The petitions were signed by Edward D. Sherrick, executive vice president and chief financial officer. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler PC. Ashby & Geddes, P.A., serves as its Delaware counsel, and BDO Consulting serves as its financial advisor. SPECIALTY PRODUCTS: Asbestos Creditors Float Ch. 11 Plan -------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that creditors with claims for asbestos-related health problems proposed the initial reorganization plan for Specialty Products Holdings Corp. on Monday, hoping to jump-start a case stalled by the difficulty of estimating the bankrupt company's massive asbestos liability. About Specialty Products Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM, Inc., is a wholly owned subsidiary of RPM International Inc. The Company is the holding company parent of Bondex International, Inc., and the direct or indirect parent of certain additional domestic and foreign subsidiaries. The Company claims to be a leading manufacturer, distributor and seller of various specialty chemical product lines, including exterior insulating finishing systems, powder coatings, fluorescent colorants and pigments, cleaning and protection products, fuel additives, wood treatments and coatings and sealants, in both the industrial and consumer markets. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-11780) on May 31, 2010, estimating its assets and debts at $100 million to $500 million. The Company's affiliate, Bondex International, Inc., simultaneously filed a separate Chapter 11 petition (Case No. 10-11779). Gregory M. Gordon, Esq., Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve as bankruptcy counsel. Daniel J. DeFranceschi, Esq., and Zachary I. Shapiro, Esq., at Richards Layton & Finger, serve as co-counsel. Logan and Company is the Company's claims and notice agent. SPEEDEMISSIONS INC: Incurs $117,000 Net Loss in First Quarter ------------------------------------------------------------- Speedemissions, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $116,782 on $1.92 million of revenue for the three months ended March 31, 2012, compared with a net loss of $143,951 on $2.11 million of revenue for the same period during the prior year. The Company reported a net loss of $1.6 million on $8.3 million of revenue for 2011, compared with a net loss of $2.2 million on $9.3 million of revenue for 2010. The Company's balance sheet at March 31, 2012, showed $2.19 million in total assets, $851,141 in total liabilities, $4.57 million series A convertible, redeemable preferred stock, and a $3.23 million total shareholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/L4YB3F About Speedemissions Tyrone, Georgia-based Speedemissions, Inc., is a test-only emissions testing and safety inspection company. After auditing the 2011 results, Habif, Arogeti & Wynne, LLP, in Atlanta, Ga., expressed substantial doubt about Speedemissions' ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has a capital deficiency. STRATEGIC AMERICAN: Provides Operational Update for Galveston Bay ----------------------------------------------------------------- Duma Energy Corp., formerly known as Strategic American Oil Corporation, announced that with the recent addition of the Redfish Reef Field, the average production from the Company's Galveston Bay fields alone is now approximately 521 barrels of oil equivalent per day (boepd). This included 342 barrels of oil per day as well as 1,075 thousand cubic feet of natural gas per day. This figure is expected to increase in the coming days as more wells are brought online in both the Trinity Bay and Redfish Reef Fields. Additionally, completion operations for the newly drilled ST9-12A #4 in Fishers Reef Field are scheduled to take place this week, which also has the potential to significantly increase existing production and cash flow. "We have numerous opportunities in Galveston Bay including re- completions and new drilling," said Craig Alexander, Operations Manager for Duma Energy Corp. "We are optimistic about our future production due to the fact that we are currently producing from only a limited number of the total wells in these fields." Jeremy G. Driver, Chairman and CEO of Duma Energy Corp. stated, "With the production we have recently brought on and the work we already have scheduled, we are closing in on our 2012 goal of 1,000 boepd. More importantly, this translates into higher revenue and cash flow." The Company also announced the release of a corresponding video entitled "Galveston Bay Update" on its Web site at www.duma.com (direct link: http://www.duma.com/investor_info/media/). This video includes an interview on April 30, 2012, with the Company's Operations Manager, Craig Alexander, regarding Redfish Reef Field and the general operations of Galveston Bay. About Strategic American Corpus Christi, Tex.-based Strategic American Oil Corporation (OTC BB: SGCA) -- http://www.strategicamericanoil.com/-- is a growth stage oil and natural gas exploration and production company with operations in Texas, Louisiana, and Illinois. The Company's team of geologists, engineers, and executives leverage 3D seismic data and other proven exploration and production technologies to locate and produce oil and natural gas in new and underexplored areas. Strategic American a net loss of $10.28 million on $3.41 million of revenue for the year ended July 31, 2011, compared with a net loss of $3.49 million on $531,736 of revenue for the same period during the prior year. The Company's balance sheet at Jan. 31, 2012, showed $24.35 million in total assets, $11.59 million in total liabilities, and $12.75 million in total stockholders' equity. The Company reported a net loss of $4.49 million on $3.40 million of revenue for the six months ended Jan. 31, 2012. The Company had a net loss of $10.28 million on $3.41 million of revenue for the year ended July 31, 2011, compared with a net loss of $3.49 million on $531,736 of revenue for the same period during the prior year. STUDEBAKER'S URBANA: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Studebaker's Urbana Soft Water Service, Inc. dba Sellers LP Gas Co. dba Main Gas & Appliance dba Main Gas Maytag Soft Water Service dba Sellers LP Gas Service dba Main Gas Maytag 927 North Main Street Urbana, OH 43078-1005 Bankruptcy Case No.: 12-32349 Chapter 11 Petition Date: May 14, 2012 Court: United States Bankruptcy Court Southern District of Ohio (Dayton) Judge: Lawrence S. Walter Debtor's Counsel: Elden J. Hopple, Esq. ICE MILLER LLP 250 West Street Columbus, OH 43215 Tel: (614) 462-2305 E-mail: Jim.Hopple@icemiller.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ohsb12-32349.pdf The petition was signed by Joseph F. Studebaker, Jr., president. SWORDFISH FINANCIAL: Delays Form 10-Q for First Quarter ------------------------------------------------------- Swordfish Financial, Inc., has encountered a delay in assembling the information, in particular its financial statements for the quarter ended March 31, 2012, required to be included in its March 31, 2012, Form 10-Q Quarterly Report. The Company expects to file its March 31, 2012, Form 10-Q Quarterly Report with the U.S. Securities and Exchange Commission within 5 calendar days of the prescribed due date. About Swordfish Financial Rockwall, Tex.-based Swordfish Financial, Inc., formerly Nature Vision, Inc., designed, manufactured and marketed outdoor recreation products primarily for the sport fishing and hunting markets. Based on the limited assets, product lines and resources remaining after the M&I Business Credit LLC liquidation, Swordfish Financial, Inc. has decided that there is not enough remaining of the Nature Vision operations to continue as an outdoor recreations products company and will concentrate on the business on being an asset recovery company and using the financial resources recovered to retire the Company's debts and invest in other businesses domestically and internationally. The Company reported a net loss of $1.36 million on $0 of sales in 2011, compared with a net loss of $2.69 million on $0 of sales in 2010. For 2011, Patrick Rodgers, CPA, PA, in Altamonte Springs, FL, 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 from operations and negative cash flows from operations the past three years. TALON INTERNATIONAL: Incurs $206,000 Net Loss in First Quarter -------------------------------------------------------------- Talon International, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $205,630 on $8.74 million of net sales for the three months ended March 31, 2012, compared with a net loss of $400,928 on $9.22 million of net sales for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $14.99 million in total assets, $8.32 million in total liabilities, $21.44 million in series B convertible preferred stock, and a $14.78 million total stockholders' deficit. "Our sales results for the first quarter of 2012 were slightly lower than the prior year, as improvements within, and additions to, our specialty brands reflected strong growth, but were overshadowed by the soft demand from the mass merchandiser market segment of our business," noted Lonnie Schnell, Talon's CEO. A copy of the Form 10-Q is available for free at: http://is.gd/CoSUWT About Talon International Woodland Hills, Calif.-based Talon International, Inc. (OTC BB: TALN) -- http://www.talonzippers.com/-- is a global supplier of apparel fasteners, trim and interlining products to manufacturers of fashion apparel, specialty retailers, mass merchandisers, brand licensees and major retailers. Talon manufactures and distributes zippers and other fasteners under its Talon(R) brand, known as the original American zipper invented in 1893. Talon also designs, manufactures, engineers, and distributes apparel trim products and specialty waistbands under its trademark names, Talon, Tag-It and TekFit, to more than 60 apparel brands and manufacturers including Wal-Mart, Kohl's, J.C. Penney, Victoria's Secret, Tom Tailor, Abercrombie and Fitch, Polo Ralph Lauren, Phillips-Van Heusen, Reebok and Juicy Couture. Talon has offices and facilities in the United States, United Kingdom, Hong Kong, China, and Bangladesh. TALON INTERNATIONAL: Morris Weiss Named to Board of Directors ------------------------------------------------------------- Morris D. Weiss was appointed as a member of the Board of Directors of Talon International, Inc., effective May 9, 2012. Mr. Weiss was appointed by written consent of the sole holder of Talon's outstanding shares of Series B Preferred Stock, in accordance with the Certificate of Designation of Series B Convertible Preferred Stock, to fill the previously existing vacancy among one of the three director positions that the holders of our Series B Preferred Stock are entitled to elect. Mr. Weiss (age 52) is a partner at the law firm Hohmann, Taube & Summers, LLP, where Mr. Weiss specializes in commercial bankruptcy and restructuring matters as well as complex commercial litigation. Prior to joining Hohmann, Taube & Summers, LLP, in 2010, Mr. Weiss was the Managing Director of IP Navigation Group, LLC, an international patent monetization company, from April 2010 to August 2010. Mr. Weiss was the Managing Director of Investment Banking of MDB Capital Group, LLC, an independent broker dealer, from May 2009 to April 2010. From January 2009 to April 2010, Mr. Weiss served on the board of directors of Atlas Mining Company (n/k/a Applied Minerals, Inc. (OTCQB: AMNL.OB)), the leading global producer of Halloysite Clay solutions, and from November 2008 to April 2009, Mr. Weiss served as the company's Chief Restructuring Officer. From February 2002 to October 2008, Mr. Weiss was the Managing Director and Head of Investment Banking of Tejas Securities Group, Inc., a full service, independent broker dealer. Mr. Weiss has been nominated for reelection by the holders of the Series B Preferred Stock at the Talon 2012 Annual Meeting of Stockholders currently scheduled for June 14, 2012. Mr. Weiss does not have any family relationships with any of Talon's other directors or executive officers. Mr. Weiss does not have a direct or indirect material interest in any transaction with Talon involving an amount exceeding $120,000, and no such transaction is currently proposed. About Talon International Woodland Hills, Calif.-based Talon International, Inc. (OTC BB: TALN) -- http://www.talonzippers.com/-- is a global supplier of apparel fasteners, trim and interlining products to manufacturers of fashion apparel, specialty retailers, mass merchandisers, brand licensees and major retailers. Talon manufactures and distributes zippers and other fasteners under its Talon(R) brand, known as the original American zipper invented in 1893. Talon also designs, manufactures, engineers, and distributes apparel trim products and specialty waistbands under its trademark names, Talon, Tag-It and TekFit, to more than 60 apparel brands and manufacturers including Wal-Mart, Kohl's, J.C. Penney, Victoria's Secret, Tom Tailor, Abercrombie and Fitch, Polo Ralph Lauren, Phillips-Van Heusen, Reebok and Juicy Couture. Talon has offices and facilities in the United States, United Kingdom, Hong Kong, China, and Bangladesh. The Company's balance sheet at March 31, 2012, showed $14.99 million in total assets, $8.32 million in total liabilities, $21.44 million in series B convertible preferred stock, and a $14.78 million total stockholders' deficit. TELECONNECT INC: Incurs $810,000 Net Loss in March 31 Quarter ------------------------------------------------------------- Teleconnect Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $810,293 on $92,481 of sales for the three months ended March 31, 2012, compared with a net loss of $1.27 million on $7,943 of sales for the same period during the prior year. The Company reported a net loss of $2.04 million on $111,866 of sales for the six months ended March 31, 2012, compared with a net loss of $773,280 on $19,914 of sales for the same period during the prior year. The Company reported a net loss of $3.26 million on $112,722 of sales for the fiscal year ended Sept. 30, 2011, compared with net income of $1.97 million on $254,446 of sales during the prior year. The Company's balance sheet at March 31, 2012, showed $7.21 million in total assets, $11.08 million in total liabilities, all current, and a $3.87 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/TJcqy7 About Teleconnect Inc. Based in Breda, in The Netherlands, Teleconnect Inc. (OTC BB: TLCO) Teleconnect Inc. (initially named Technology Systems International Inc.) was incorporated under the laws of the State of Florida on November 23, 1998. Serving as a telecommunications service provider in Spain for almost 9 years, the Company never fully reached expectations and decided late in 2008 to change its course of business. In November 2009, 90% of the Company's telecommunication business was sold to a Spanish group of investors, and on October 15, 2010, the Company completed the acquisition of Hollandsche Exploitatie Maatschappij BV (HEM), a Dutch entity established in 2007. HEM's core business involves the age validation of consumers when purchasing products which cannot be sold to minors, such as alcohol or tobacco. The Company regards this age validation business as its new strategic direction. The Dutch companies acquired in 2007 (Giga Matrix, The Netherlands, 49% and Photowizz, The Netherlands, 100%) are considered to function complementary to this new service offering. Through the purchase of HEM and its ownership in Photowizz and Giga Matrix the Company now controls all four pillars under its business model: the manufacturing and leasing of electronic age validation equipment, the performance of age validation transactions remotely, the performance of market surveys and the broadcasting of in-store commercial messages using the age validation equipment in between age checks. Coulter & Justus, P.C., in Knoxville, Tenn., expressed substantial doubt about the Company's ability to continue as a going concern following the fiscal 2011 financial results. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency in addition to a working capital deficiency. THERMOENERGY CORP: Incurs $17.4 Million Net Loss in 2011 -------------------------------------------------------- ThermoEnergy Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $17.38 million on $5.58 million of revenue for the year ended Dec. 31, 2011, compared with a net loss of $14.85 million on $2.87 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2011, showed $8.78 million in total assets, $13.39 million in total liabilities, and a $4.60 million total stockholders' deficiency. After auditing the 2011 results, Grant Thornton LLP, in Boston, Massachusetts, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company incurred a net loss for the year ended Dec. 31, 2011, and, as of that date, the Company's current liabilities exceeded its current assets by $3,387,000 and its total liabilities exceeded its total assets by $4,603,000. A copy of the Form 10-K is available for free at: http://is.gd/6UJlrW About ThermoEnergy Corporation Little Rock, Ark.-based ThermoEnergy Corporation is a clean technologies company engaged in the worldwide development of advanced municipal and industrial wastewater treatment systems and carbon reducing clean energy technologies. TIME SERVICE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Time Service Station, Inc. 12 Dorn Place Medford, NY 11720 Bankruptcy Case No.: 12-43569 Chapter 11 Petition Date: May 15, 2012 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Jerome Feller Debtor's Counsel: Jerry M. Mims, Esq. LAW OFFICES OF JERRY M. MIMS 3239 Route 112, Building 8 Medford, NY 11763 Tel: (631) 575-1048 Fax: (631) 207-8412 E-mail: droitmoral@aol.com Scheduled Assets: $1,382,000 Scheduled Liabilities: $750,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Ziya Zeki Ercan, president. TN-K ENERGY: Reports $3.1 Million Net Income in First Quarter ------------------------------------------------------------- TN-K Energy Group Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $3.09 million on $144,649 of total revenue for the three months ended March 31, 2012, compared with net income of $596,814 on $380,782 of total revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $1.79 million in total assets, $4.13 million in total liabilities and a $2.33 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/tYFqLZ About TN-K Energy Crossville, Tenn.-based TN-K Energy Group, Inc., an independent oil exploration and production company, engaged in acquiring oil leases and exploring and developing crude oil reserves and production in the Appalachian basin. After auditing the 2011 results, Sherb & Co., LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going. The independent auditors noted that the Company has incurred recurring operating losses and will have to obtain additional financing to sustain operations. TPF GENERATION: Moody's Upgrades Rating on 2nd Lien Loan to 'B2' ---------------------------------------------------------------- Moody's Investors Service has upgraded TPF Generation Holdings, LLC's second lien senior secured term loan to B2 from B3. At the same time, Moody's has affirmed the B1 rating on the first lien credit facility. Concurrent with these actions, Moody's changed TPF's rating outlook to stable from negative. Ratings Rationale The rating changes reflects TPF Generation's April 2012 sale of the 800 MW Rio Nogales plant in Seguin, Texas to CPS Energy (Electric and Gas Revenue Bonds rated Aa1, outlook stable). This transaction followed TPF Generation's sale of the 300 MW University Park peaking facility in May 2011. Proceeds from both sales were primarily used to repay the remaining outstanding first lien term loans, cash-collateralize certain outstanding first lien letters of credit, and partially repay the second lien term loan. Specifically, net proceeds from the recent Rio Nogales plant sale were sufficient to repay all $254.6 million outstanding under the first lien term loan in full, cash collateralize $78.0 million of first lien letters of credit, reduce commitments under the first lien credit facility to $50 million (reduced from the original $250 million), repay $84.1 million of the second lien term loan (reducing its outstandings to $410.9 million from $495.0 million) and to pay transaction and other costs. Once the outstanding letters of credit roll off, the $78 million that was utilized for cash collateralization will be available to pay down additional principal on the second lien term loan. The rating action further reflects the substantially improved recovery and refinancing prospects for creditors, particularly holders of second lien debt whose rating was upgraded to B2 from B3. The first lien rating is affirmed at B1 reflecting in large part the fundamental credit profile of TPF Generation. While the two asset sales have improved the credit quality at TPF Generation, the rating affirmation at B1 considers the reduced diversity and greater concentration of cash flows in the remaining assets, primarily High Desert, and the fact that TPF Generation will likely operate in an entirely merchant environment beginning in 2013. While recovery and refinancing prospects for second lien holders have undoubtedly improved, the fundamental credit profile is still exposed to substantial cash flow volatility as a merchant generation portfolio and heightened concentration risk, both characteristics consistent with the "B" rating category. Overall, the new TPF Generation portfolio will consist of the 830 MW High Desert combined cycle plant in California, the 300 MW Wolf Hills peaking facility in Virginia, and the 250 MW Big Sandy peaking facility in West Virginia. Thus, the portfolio will be diversified between CAISO and PJM, though cash flow available to service debt will be particularly concentrated in High Desert. Through December 31, 2012, the High Desert facility benefits from an energy call option agreement with J. Aron & Company for 736 MW of the plant's capacity. Beyond December 31, 2012, in the absence of new contractual arrangements, cash flows for debt service will primarily come from the merchant California market. Moody's further observes that with the asset sales, TPF Generation's ultimate sponsor (Tenaska Power Fund) has created additional flexibility to consider further strategic options over the interim. Moreover, the substantial reduction in total debt on an absolute cash basis further mitigates any potential covenant compliance issues that Moody's outlined in previous reports, and Moody's now believes that covenant compliance will not be a cause for undue concern between now and the second lien debt maturity. The stable outlook reflects Moody's belief that the completion of the asset sales and related debt reduction has stabilized credit quality for TPF Generation over the remaining term of the debt. While increased concentration risk and greater volatility in cash flow is expected beginning in 2013, these risks are mitigated by the substantial debt reduction that has occurred, which Moody's believes enhances recovery and refinancing prospects for the term debt. Moreover, Moody's observes that to that extent that all or a portion of the $78 million in cash currently tied up in letter of credit collateralization is released, it can be used to further repay second lien principal in 2013 and 2014. To that end, the B2 rating on the second lien could potentially be revised upward to B1 once the remaining first lien letter of credit facility expires in 2013 eliminating all first lien debt from the capital structure. The ratings could come under pressure if operational issues begin to impact the portfolio assets, particularly High Desert, or if the sponsor's prospects for strategic options become increasingly uncertain as the second lien term loan approaches its maturity. The principal methodology used in this rating was Power Generation Projects published in December 2008. The last rating action on TPF Generation occurred on March 10, 2011, when Moody's downgraded the ratings on the first lien credit facilities to B1 from Ba3 and affirmed the B3 rating on the second lien credit facility, while changing the outlook to negative from stable for both. TPF Generation Holdings, LLC is an indirect subsidiary of Tenaska Power Fund, L.P., and is a special purpose entity originally formed to acquire and operate several generation facilities across the continental United States. After recent sales, the portfolio now consists of three assets, two of which are natural gas-fired peaking plants located within the PJM interconnection and the remaining asset is a natural gas fired combined-cycle plant located in CAISO. TRAFFIC CONTROL: Auction to Take Place on July 25 ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Traffic Control & Safety Corp. will learn at a July 25 auction whether the new owner will be second-lien creditors or someone else. The bankruptcy court in Delaware approved procedures this week where bids are due July 13, followed by an auction July 25, and a hearing to approve the sale on July 26. Unless a better offer is made, second-lien creditors will buy the company in exchange for $20 million of the junior secured debt. In addition, they will assume the first-lien obligations of about $18.5 million, pay expenses of the Chapter 11 case, and provide $500,000 toward expenses not paid with financing for the reorganization. When the sale is completed, the second-lien lenders will waive the remainder of their claim, meaning that their deficiency claim won't dilute the pot for unsecured creditors. About Traffic Control and Safety Traffic Control and Safety Corporation and six subsidiaries filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-11287) on April 20, 2012. TCSC is the largest independent provider of safety services and products in California and Hawaii. Formed by Marwit Capital Partners II, L.P., in June 2007, TCSC has 430 full- time employees and serves state and local agencies, public works organizations, general contractors, the motion picture industry, and provide services at special events. TCSC estimated assets of up to $50 million and debts of up to $100 million as of the Chapter 11 filing. Judge Kevin J. Carey presides over the case. Latham & Watkins LLP serves as the Debtors' bankruptcy counsel and Young Conaway Stargatt & Taylor LLP as Delaware counsel. Broadway Advisors, LLC serves as financial advisors, and Epiq Bankruptcy Solutions LLC as the claims and notice agent. No creditors committee has been appointed in the Debtors' cases. TRAVELPORT HOLDINGS: Has $175-Mil. Credit Pact with Credit Suisse ----------------------------------------------------------------- Travelport LLC entered into a credit agreement with Credit Suisse AG, as administrative agent and collateral agent, and the other agents and lenders party thereto. The Credit Agreement, among other things: (i) allows for a new $175,000,000 term loan secured on a junior priority basis to the liens under the previously disclosed Fourth Amended and Restated Credit Agreement and on a senior priority basis to the liens under the previously disclosed Indenture, to be used to refinance in full the non-extended term loans outstanding under the Fourth Amended and Restated Credit Agreement and to refinance a portion of the extended term loans outstanding under the Fourth Amended and Restated Credit Agreement; (ii) allows for incremental loans to refinance loans outstanding under the Fourth Amended and Restated Credit Agreement; (iii) subject to certain exceptions, contains covenants that are substantially the same as those in the Fourth Amended and Restated Credit Agreement, with certain negative covenant baskets set with a 10% cushion to the levels set forth in the Fourth Amended and Restated Credit Agreement; and (iv) contains a total leverage ratio test, which is initially set at 8.75X until June 30, 2013, and a senior secured leverage ratio test, which is initially set at 4.95X until Dec. 31, 2012. A copy of the Credit Agreement is available for free at: http://is.gd/hDv7j4 On May 8, 2012, the Company entered into a revolving credit loan modification agreement relating to the Fourth Amended and Restated Credit Agreement. The Revolving Credit Loan Modification Agreement, among other things, (i) extends the maturity date of certain of the revolving loans under the Fourth Amended and Restated Credit Agreement to May 24, 2015, and (ii) increases the commitment fee on such extended revolving loans from 75 basis points to 300 basis points. Meanwhile, on May 9, 2012, Simon Gray, the Company's Senior Vice President and Chief Accounting Officer, notified the Company that he intends to resign from the Company in order to accept a position with a UK FTSE 100 publicly listed company. Mr. Gray's resignation will be effective end of July 2012. About Travelport Holdings Travelport Holdings is the direct parent of Travelport Limited, is a broad-based business services company and a leading provider of critical transaction processing solutions to companies operating in the global travel industry. With a presence in 160 countries and approximately 3,500 employees, Travelport is comprised of the global distribution system (GDS) business, which includes the Galileo and Worldspan brands and its Airline IT Solutions business, which hosts mission critical applications and provides business and data analysis solutions for major airlines. Travelport also owns approximately 48% of Orbitz Worldwide (NYSE: OWW), a leading global online travel company. Travelport is a private company owned by The Blackstone Group, One Equity Partners, Technology Crossover Ventures, and Travelport management. Travelport Holdings Limited is a holding company with no direct operations. Its principal assets are the direct and indirect equity interests it holds in its subsidiaries, including Travelport Limited. The Company's balance sheet at Dec. 31, 2011, showed $3.34 billion in total assets, $4.30 billion in total liabilities, and a $957 million total deficit. * * * As reported by the TCR on Oct. 10, 2011, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on travel services provider Travelport Holdings Limited (Travelport Holdings) and indirect subsidiary Travelport LLC (Travelport) to 'SD' (selective default) from 'CC'. The downgrades follow the implementation of a capital restructuring, which was necessary because of the Travelport group's high leverage, weak liquidity, and the upcoming maturity of its $693 million (as of end-June 2011) PIK loan in March 2012. "According to our criteria, we view this restructuring as a distressed exchange and tantamount to a default (see 'Rating Implications Of Exchange Offers And Similar Restructurings, Update,' published May 12, 2009, on RatingsDirect on the Global Credit Portal)," S&P related. TREASURES FURNITURE: Owes $2.1 Million to Creditors --------------------------------------------------- Clint Engel at Furniture Today, citing court documents, reports that Treasures Furniture disclosed owing about $2.1 million in debt. The Company disclosed its creditors and their unsecured claims. The creditors are: Lane Upholstery $468,809 Lane Acceptance Group $319,395 Henredon $311,065 Marge Carson $147,731 Home Furnishings Inc. of San Diego $139,781 Drexel Heritage $138,978 Maitland-Smith $103,425 Lane Home Furnishings Retail $101,849 Sherrill $95,308 Century $74,175 Rare Collections $62,851 Hooker Furniture $58,267 Mavati's Furniture $48,167 Ital Art $46,998 According to the report, the Company's creditors are home furnishings related, and Furniture Brands International companies appears to be the largest among the group, with combined claims listed of more than $1.4 million. But the supplier indicated this is a bit misleading. "We have not been doing business with Treasures for more than two years," the report quotes a Furniture Brands spokesperson as stating. "In 2011, we received a judgment against Treasures for the amounts they owed us. These amounts are old debts that have been written off. This will have no impact on our financial statements." Based in San Diego, California, Treasures Inc. dba Treasures Furniture filed for Chapter 11 protection on May 8, 2012 (Bankr. S.D. Calif. Case No. 12-06689). Judge Margaret M. Mann presides over the case. Christine E. Baur, Esq., at Law Office of Christine E. Baur, represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. TRITON AVIATION: Credit Risk Cues Fitch to Affirm All Ratings ------------------------------------------------------------- Fitch Ratings has affirmed all classes in Triton Aviation Finance (TAF) as seen below: -- Class A-1 note at 'Bsf', Outlook Stable; -- Class B-1, B-2, C-1, and C-2 notes at 'Csf'/RE0%. The affirmation of all notes in TAF reflects credit risk that is consistent with their current ratings. The class A-1 notes pass under Fitch's 'Bsf' scenario while the subordinate notes are not expected to receive any principal payments due to significant growing interest shortfalls. The analysis of TAF is consistent with Fitch's criteria titled 'Global Rating Criteria for Aircraft Operating Lease ABS', dated April 17, 2012, with one exception. While the criteria states that Fitch will assume all aircraft have a useful life of 25 years, this was adjusted to approximately 30 years based on the characteristics of the current leases in place. UNIVERSAL SOLAR: Incurs $439,000 Net Loss in First Quarter ---------------------------------------------------------- Universal Solar Technology, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $438,990 on $375,035 of sales for the three months ended March 31, 2012, compared with a net loss of $260,382 on $955,011 of sales for the same period during the prior year. The Company reported a net loss of $2.70 million in 2011, compared with a net loss of $593,808 in 2010. The Company's balance sheet at March 31, 2012, showed $10.48 million in total assets, $14.42 million in total liabilities and a $3.93 million total stockholders' deficiency. At March 31, 2012, the Company had negative working capital of $128,397 and a stockholders' deficiency of $3,938,042 and has accumulated deficit of $4,662,661 since inception. These factors raise substantial doubt as to the Company's ability to continue as a going concern. After auditing the 2011 results, Paritz & Company, P.A., in Hackensack, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has not generated cash from its operation, has stockholders' deficiency of $3.50 million and has incurred net loss of $4.22 million since inception. A copy of the Form 10-Q is available for free at: http://is.gd/D9sN6e About Universal Solar Headquartered in Zhuhai City, Guangdong Province, in the People's Republic of China, Universal Solar Technology, Inc., was incorporated in the State of Nevada on July 24, 2007. It operates through its wholly owned subsidiary, Kuong U Science & Technology (Group) Ltd., a company incorporated in Macau, the People's Republic of China on May 10, 2007, and its subsidiary, Nanyang Universal Solar Technology Co., Ltd., a wholly foreign owned enterprise registered on Sept. 8, 2008 under the wholly foreign- owned enterprises laws of the PRC. The Company primarily manufactures, markets and sells silicon wafers to manufacturers of solar cells. In addition, the Company manufactures photovoltaic modules with solar cells purchased from third parties. USG CORP: Three Directors Elected at Annual Meeting --------------------------------------------------- USG Corporation held its 2012 annual meeting of stockholders on May 9, 2012. At the annual meeting, the stockholders elected Jose Armario, Douglas Ford and William H. Hernandez as directors for a three-year term to expire in 2015. The stockholders also ratified the appointment of Deloitte & Touche LLP as the Company's independent registered public accountants for 2012. Richard H. Fleming, executive vice president and a named executive officer and former chief financial officer of the Company, has announced that he will retire from the Company effective June 1, 2012. In connection with Mr. Fleming's upcoming retirement, Matthew F. Hilzinger, the Company's Executive Vice President and Chief Executive Officer, will now serve additionally as the Company's principal accounting officer. About USG Corporation Based in Chicago, Ill., USG Corporation -- http://www.usg.com/-- through its subsidiaries, manufactures and distributes building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The company filed for Chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). When the Debtors filed for protection from their creditors, they disclosed $3.252 billion in assets and $2.739 billion in liabilities. The Debtors emerged from bankruptcy protection on June 20, 2006. The Company reported a net loss of $390 million in 2011 and a net loss of $405 million in 2010. The Company's balance sheet at March 31, 2012, showed $3.73 billion in total assets, $3.57 billion in total liabilities and $154 million in total stockholders' equity. * * * As reported by the TCR on Aug. 15, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on USG Corp. to 'B' from 'B+'. "The downgrade reflects our expectation that USG's operating results and cash flow are likely to be strained over the next year due to the ongoing depressed level of housing starts and still- weak commercial construction activity," said Standard & Poor's credit analyst Thomas Nadramia. "It is now more likely, in our view, that any meaningful recovery in housing starts may be deferred until late 2012 or into 2013. As a result, the risk that USG's liquidity in the next 12 to 24 months will continue to erode (and be less than we incorporated into our prior ratings) has increased. The ratings previously incorporated a greater improvement in housing starts, which would have enabled USG to reduce its negative operating cash flow in 2012 and achieve breakeven cash flow or better by 2013." In the Sept. 14, 2011, edition of the TCR, Fitch Ratings has downgraded USG Corporation's Issuer Default Rating (IDR) to 'B-' from 'B'. The Rating Outlook remains Negative. The ratings downgrade and the Negative Outlook reflect Fitch's belief that underlying demand for the company's products will remain weak through at least 2012 and the company's liquidity position is likely to deteriorate in the next 18 months. With the recent softening in the economy and lowered economic growth expectations for 2011 and 2012, the environment may at best support a relatively modest recovery in housing metrics over the next year and a half. Fitch had previously forecast a slightly more robust housing environment in 2011 and 2012. Moreover, new commercial construction is expected to decline further this year and may only grow moderately next year. VELO HOLDINGS: Seeks to Sell New Equity at July Auction ------------------------------------------------------- Jacqueline Palank at Dow Jones' Daily Bankruptcy Review reports that online marketing and sales company Velo Holdings Inc. is looking to test its lenders' offer to take it out of Chapter 11 at an auction this summer. About Velo Holdings 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. VELO HOLDINGS: Rejects Marketing Deal with Travelocity.com ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York signed an agreed order regarding rejection of the agreement between Velo Holdings Inc., et al., and Travelocity.com LP. Pursuant to the stipulation, the Debtors will reject the marketing agreement nunc pro tunc to the Petition Date, and allow Travelocity to contract with a substitute advertiser. On Aug. 19, 2003, MemberWorks Incorporated, and Travelocity entered into and executed that certain marketing agreement. Debtor Adaptive Marketing LLC, a subsidiary of Velo Holdings Inc., and Travelocity entered into and executed certain addendums to the agreement, and the term of the agreement is from Aug. 19, 2003, and automatically continues for renewal terms of one year each unless earlier terminated. The agreement provides that Travelocity will market certain Adaptive programs to Travelocity's customers by cross-sell marketing on Travelocity's website. In a separate order, the Court also signed an order, rejecting as of the Petition date, that certain online advertising agreement with Trulia Inc. Debtor FYI Direct Inc., a subsidiary of Velo Holdings Inc., and Trulia entered into and executed that certain online advertising agreement, dated Dec. 22, 2011. The agreement is effective until Jan. 15, 2013, and provides FYI Direct with exclusive advertising rights in the credit monitoring category on Trulia's network of websites. 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. VELO HOLDINGS: Wants to Hire Q Advisors LLC as Investment Banker ---------------------------------------------------------------- Velo Holdings Inc., et al., ask the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Q Advisors LLC as investment banker. A hearing on May 29, 2012, at 2 p.m. (Eastern Time) has been set. Objections, if any, are due May 19, at 4 p.m. Q Advisors will, among other things: a. prepare an offering presentation or other suitable offering materials for use in informing prospective purchasers about the relevant Debtors and non-debtor affiliates that are part of the Insurance Administration Business (Coverdell) or the Lead Generation Businesses (Neverblue), as applicable; b. advise and assist the Companies in preparation of a presentation which will be given by management to selected qualified prospective purchasers; and c. develop a plan for marketing the Coverdell business and the Neverblue business, including the identification and contact of potential qualified purchasers for each business. Subject to Court approval, the Debtors will compensate Q Advisors in accordance with a fee structure, which provides in relevant part that Q Advisors will be paid by the Companies a monthly fee of $50,000 for its services in connection with the Coverdell Sale Transaction and $25,000 for its services in connection with the Neverblue Sale Transaction. In no event would the aggregate amount of monthly fees received by Q Advisors be greater than $225,000. The respective monthly fees would be credited against any transaction fee earned by Q Advisors. In the event that the Coverdell Sale Transaction is consummated, 100% of the Coverdell Monthly Fees paid will be credited against the Coverdell Sale Fee, and in the event that the Neverblue Sale Transaction is consummated, 100% of the Neverblue Monthly Fees paid will be credited against the Neverblue Sale Fee. Subject to Court approval, on consummation of the Coverdell Sale Transaction, Coverdell will pay Q Advisors a cash fee equal to the aggregate pro rata sum of (i) 0.75% of the Transaction Value up to $80 million and (ii) 3.0% of the incremental Transaction Value greater than $80 million. On consummation of the Neverblue Sale Transaction, Neverblue will pay Q Advisors a cash fee equal to the aggregate pro rata sum of (i) 2.5% of the Transaction Value up to $20 million and (ii) 5.0% of the incremental Transaction Value greater than $20 million. In the event that the administrative agent or collateral agent under the Companies' first lien credit facility, on behalf of the lenders thereunder, is the purchaser of either Coverdell or Neverblue and the purchase price paid for the relevant company is $80 million in the case of Coverdell and $20 million in the case of Neverblue, then no transaction fee will be payable hereunder to Q Advisors; provided that if the purchase price paid by the Credit Group is in excess of the Initial Credit Bid, the fees due to Q Advisors hereunder will be due and payable on the entire purchase price, including the face amount of any overbid by the lenders. The Coverdell Sale Fee and the Neverblue Sale Fee will become payable upon the closing of (i) the Coverdell Sale Transaction or Neverblue Sale Transaction, as the case may be, or (ii) the acquisition, directly or indirectly, by another person or entity, in a single transaction or series of related transactions, of (a) all or a substantial portion of the assets or business of Coverdell or Neverblue, as the case may be or (b) securities representing 50% or more of the total voting power of the relevant company in the election of Directors. In no event will the Coverdell Sale Fee be less than $650,000 and the Neverblue Sale Fee be less than $500,000. In the 90 days prior to the Petition Date, Q Advisors did not receive any retainers or payments for services rendered and expenses incurred for the Debtors. To the best of the Debtors' knowledge, Q Advisors is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. 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. VELO HOLDINGS: Proposes Key Employee Incentive Plan --------------------------------------------------- Velo Holdings Inc., et al., ask the U.S. Bankruptcy Court for the Southern District of New York to approve a proposed postpetition key employee incentive plan. A hearing will be held May 29, 2012, at 2 p.m. (Eastern Time) to consider approval of the KEIP. Objections, if any, are due May 21, at 4 p.m. The Debtors relate that prior to the Petition Date, the Debtors and their outside advisors engaged in discussions with various parties regarding potential strategic transactions, including a potential (i) sale of all or substantially all of the Debtors' assets; (ii) sale of the Debtors' business units in pieces with a stand-alone restructuring; or (iii) sale of the Debtors' business units in pieces with a "harvest" of the remaining business units. The Debtors and their professional advisors, in consultation with the advisors and holders of a majority of their first lien debt, ultimately determined that the most optimal means to maximize value for the Debtors' estates in these cases was to move forward with the Harvest of the ACU Business and pursue a going concern sale of each of the Insurance Administration Business and Lead Generation Businesses, which for purposes of this Motion the Debtors refer to collectively as the "Transactions." To maximize the value of Transactions, the Debtors and the holders of a majority of their prepetition first lien indebtedness recognized the need to properly incentivize the Debtors' employees to work diligently to generate the greatest recoveries for creditors. The KEIP provides for, among other things an incentive-based cash awards to the Key Employees who are most capable of maximizing the Debtors' financial performance. The Debtors believe the KEIP is appropriately designed to incentivize management to continue their substantial efforts in operating the Debtors' businesses and assisting in facilitating the Transactions. Without the KEIP, the Debtors believe that these Key Employees would have left the Debtors' employment, causing an interruption in the Debtors' business operations, disruption to the Transactions, and irreversible harm to the value of the Debtors' estates. The KEIP is appropriately designed to provide incentives to these Key Employees to compensate them for the additional responsibilities that they have undertaken and will continue to perform, and in connection with the Transactions. A full-text copy of the terms of the KEIP is available for free at http://bankrupt.com/misc/VELOHOLDINGS_incentiveplan_motion.pdf 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. VERENIUM CORP: Reports $30.1 Million Net Income in 1st Quarter -------------------------------------------------------------- Verenium Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income attributed to the Company of $30.12 million on $17.22 million of total revenue for the three months ended March 31, 2012, compared with net income attributed to the Company of $3.81 million on $13.39 million of total revenue for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $94.12 million in total assets, $53.80 million in total liabilities and $40.31 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/AX1uId About Verenium Corporation Cambridge, Mass.-based Verenium Corporation (NASDAQ: VRNM) -- http://www.verenium.com/-- is a pioneer in the development and commercialization of high-performance enzymes for use in industrial processes. Verenium currently sells enzymes developed using its R&D capabilities to industrial customers globally for use in markets including biofuels, animal health and oil seed processing. The Company reported net income of $5.12 million in 2011 compared with a net loss of $5.35 million in 2010. Going Concern The Company had a loss from operations of $6.5 million for year ended Dec. 31, 2011, and had an accumulated deficit of $600.8 million as of Dec. 31, 2011. The holders of the 2007 Notes have the right to require the Company to purchase the 2007 Notes for a total cash amount equal to $34.9 million on April 2, 2012, plus accrued and unpaid interest to that date. The Company expects the holders of the 2007 Notes to exercise this right and, based on the Company's current cash resources and 2012 operating plan, the Company's existing cash resources will not be sufficient to meet the cash requirements to fund the Company's required repurchase of the 2007 Notes, planned operating expenses, capital expenditures and working capital requirements without additional sources of cash. If the Company is unable to fund the repurchase of the 2007 Notes when required or otherwise raise additional capital, the Company will need to defer, reduce or eliminate significant planned expenditures, restructure or significantly curtail the Company?s operations, sell some or all its assets, file for bankruptcy or cease operations. To the extent the Company restructures rather than repurchases all or any portion of the 2007 Notes, the Company may issue common shares or other convertible debt for the 2007 Notes that are restructured, which would result in substantial dilution to the Company's equityholders. There can be no assurance that the Company will be able to obtain any sources of financing on acceptable terms, or at all. These factors raise substantial doubt about the Company's ability to continue as a going concern. VHGI HOLDINGS: Delays Form 10-Q for First Quarter ------------------------------------------------- VHGI Holdings, Inc., said its quarterly report on Form 10-Q for the period ending March 31, 2012, could not be filed within the prescribed time period the report and financial statements could not be completed, then reviewed by the Company's independent auditor in time without unreasonable effort and expense. About VHGI Holdings Fort Worth, Tex.-based VHGI Holdings, Inc., is a holding company with revenue streams from the following business segments: (a) precious metals (b) oil and gas (c) coal and (d) medical technology. For 2011, Pritchett, Siler & Hardy, P.C., in Salt Lake City, Utah, expressed substantial doubt about VHGI Holdings' ability to continue as a going concern. The independent auditors noted that the Company has incurred substantial losses and has a working capital deficit. The Company reported a net loss of $5.43 million on $499,600 of revenues for 2011, compared with a net loss of $1.67 million on $482,300 of revenues for 2010. The Company's balance sheet at Dec. 31, 2011, showed $7.22 million in total assets, $9.12 million in total liabilities, and a stockholders' deficit of $1.90 million. VIASPACE INC: Incurs $668,000 Net Loss in First Quarter ------------------------------------------------------- Viaspace Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $668,000 on $588,000 of total revenues for the three months ended March 31, 2012, compared with a net loss of $842,000 on $582,000 of total revenues for the same period during the prior year. The Company reported a net loss of $9.36 million in 2011, compared with a net loss of $2.96 million in 2010. The Company's balance sheet at March 31, 2012, showed $9.82 million in total assets, $7.32 million in total liabilities and $2.50 million in total equity. Going Concern The Company has incurred significant losses from operations, resulting in an accumulated deficit of $43,650,000. The Company expects such losses to continue. In addition, the Company has limited working capital and based on current cash flows does not have sufficient funds to pay the May 14, 2012, installment due on the note to Changs LLC. These raises substantial doubt about the Company's ability to continue as a going concern. After auditing the financial results for the year ended Dec. 31, 2011, Hein & Associates LLP, in Irvine, Calif., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that he Company has incurred significant losses from operations, resulting in an accumulated deficit of $43.05 million. The Company expects those losses to continue. In addition, the Company has limited working capital and based on current cash flows does not have sufficient funds to pay the May 2012 instalment due on the note to Changs LLC. A copy of the Form 10-Q is available for free at: http://is.gd/L72X4q About VIASPACE Inc. Irvine, Calif.-based VIASPACE Inc. (OTC Bulletin Board: VSPC - News) -- http://www.VIASPACE.com/-- is a clean energy company providing products and technology for renewable and alternative energy that reduce or eliminate dependence on fossil and high- pollutant energy sources. Through its majority-owned subsidiary VIASPACE Green Energy Inc., the Company grows Giant King Grass as a low carbon fuel for electricity generating power plants and as a feedstock for cellulosic biofuels. VITESSE SEMICONDUCTOR: S. Jarvis Appointed to Board of Directors ---------------------------------------------------------------- Vitesse Semiconductor Corporation has appointed Scot Jarvis to its board of directors, increasing the number of directors to seven. Mr. Jarvis co-founded Cedar Grove Partners, LLC, an investment and consulting/advisory partnership with a focus on wireless communication investments in 1997, and currently is its managing member. While at Cedar Grove, he has invested in several successful early-stage companies in the telecommunications area and has served on a number of public and private boards. Prior to co-founding Cedar Grove, Mr. Jarvis served as a senior executive of Eagle River, Inc., a Craig McCaw investment firm. While at Eagle River, he founded Nextlink Communications on behalf of McCaw and served on its board of directors. He also served on the board of directors of Nextel Communications, NextG Networks, Inc., Wavelink Communications Inc., NextWeb, Inc., and Cantata Technologies, Inc. From 1985 to 1994, Mr. Jarvis served in several executive capacities at McCaw Cellular Communications up until it was sold to AT&T. "Scot's extensive experience identifying leading technologies and understanding of service provider requirements makes him a strong addition to the Vitesse board of directors. We welcome him aboard," said Edward Rogas Jr., chairman of Vitesse. "As Vitesse continues to execute on our strategy to transition to the high-growth Carrier and Enterprise networking markets, Scot's knowledge of the networking communications industry combined with his business acumen will be a valuable asset," said Chris Gardner, CEO of Vitesse. "I am excited to join the Vitesse board of directors. The Company has distinguished itself in the IP Edge/mobile access networking market and I look forward to working with the Vitesse management team as it finalizes the transition into this new market," said Scot Jarvis. Mr. Jarvis currently serves on the board of Kratos Defense & Security Solutions and Airspan Networks, both publicly traded companies. He is a venture partner with Oak Investment Partners, a venture capital firm. Mr. Jarvis holds a B.A. in Business Administration from the University of Washington. Mr. Jarvis will receive the following compensation for his service as a non-employee director for the remainder of the current Board term: * Annual retainer of $30,000, pro-rated for the remainder of the current Board term; * Board meeting fees of $1,500 for attendance at each in- person Board meeting and $750 for attendance at each scheduled conference call Board meeting; * Annual equity compensation of $55,000, pro-rated for the remainder of the current Board term, in restricted stock units, or RSUs, which RSUs will be automatically granted on the second Monday in January 2013 and vest fully on the first anniversary of the grant date; and * A one-time award of $100,000 in RSUs, which RSUs vest in three annual installments of 33.33% on the first three anniversaries of the grant date. 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. 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. WARNER MUSIC: Incurs $34 Million Net Loss in First Quarter ---------------------------------------------------------- Warner Music Group Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $34 million on $628 million of revenue for the three months ended March 31, 2012, compared with a net loss of $39 million on $684 million of revenue for the same period during the prior year.' The Company reported a net loss of $60 million on $1.40 billion of revenue for the six months ended March 31, 2012, compared with a net loss of $57 million on $1.46 billion of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2012, showed $5.30 billion in total assets, $4.29 billion in total liabilities and $1.01 billion in total equity. "With growing digital and non-traditional revenue partially offsetting the impact of a light release schedule as compared to the prior-year quarter, this quarter's results show the benefits of the company's transformation," said Stephen Cooper, Warner Music Group's CEO. "We remain optimistic about the company's performance over the course of the fiscal year as we continue to execute on our long-term strategy." "Through ongoing focus on cost management, we were able to increase OIBDA, expand OIBDA margins and generate significant free cash flow," added Brian Roberts, Warner Music Group's Executive Vice President and CFO. A copy of the Form 10-Q is available for free at: http://is.gd/Lf2Wpy About Warner Music Group Based in New York, Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- was formed by a private equity consortium of investors on Nov. 21, 2003. The Company is the direct parent of WMG Holdings Corp., which is the direct parent of WMG Acquisition Corp. WMG Acquisition Corp. is one of the world's major music-based content companies and the successor to substantially all of the interests of the recorded music and music publishing businesses of Time Warner Inc. The Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing. The Company's Recorded Music business primarily consists of the discovery and development of artists and the related marketing, distribution and licensing of recorded music produced by such artists. The Company's Music Publishing operations include Warner/Chappell, its global Music Publishing company, headquartered in New York with operations in over 50 countries through various subsidiaries, affiliates and non-affiliated licensees. * * * In May 2011, Warner Music Group Corp. and Access Industries, the U.S.-based industrial group, announced the execution of a definitive merger agreement under which Access Industries will acquire WMG in an all-cash transaction valued at $3.3 billion. The purchase includes WMG's entire recorded music and music publishing businesses. WESTERN MOHEGAN: Tribe Wants Bankruptcy Moved to District Court --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Western Mohegan Tribe and Nation of New York, which calls itself a tribe although it's not yet formally recognized by the Bureau of Indian affairs, is asking for the Chapter 11 case it filed on March 9 to be transferred from the bankruptcy court in Chicago to the U.S. District Court. The report relates that to be eligible for bankruptcy, the tribe characterizes itself as an unincorporated association. The tribe and its 200 members own a 250-acre parcel in Ulster County, New York. The tribe says its purpose is to "preserve the members' way of life and to build a tribal business, including a gaming casino." The tribe has been seeking recognition for 10 years, running up $1.7 million of legal fees in the process. The tribe wants the bankruptcy transferred to district court where the judge has power to decide whether the group should be formally recognized as a tribe. Mr. Rochelle also reports that a creditor filed a motion to dismiss the case, contending the group is a tribe not eligible for Chapter 11. The U.S. Trustee filed papers requesting that the case either be dismissed or converted to liquidation in Chapter 7. According to the report, the U.S. Trustee said there was a fire on the Ulster County property that destroyed all existing buildings. There was no insurance, the U.S. Trustee says. The tribe has no income, the U.S. Trustee said. About Western Mohegan Based in New York, Western Mohegan Tribe and Nation is located at 10 Tamarack Road, Greenfield Park, New York. The tribe filed for Chapter 11 protection on March 9, 2012 (Bankr. N.D. Ill. Case No. 12-09292). Judge Susan Pierson Sonderby presides over the case. William J Factor, Esq., at The Law Office of William J. Factor, Ltd., represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. Western Mohegan Tribe owns the 255-acre Tamarack resort. The property was slated for auction March 15. But a March 9 joint bankruptcy filing by the tribe and its investor -- Illinois-based BGA LLC -- stayed the sale. WHITEHALL AVENUE: Case Summary & 34 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Whitehall Avenue, LLC dba Quality Inn Mystic Nine Whitehall Avenue Mystic, CT 06355 Bankruptcy Case No.: 12-21184 Chapter 11 Petition Date: May 13, 2012 Court: United States Bankruptcy Court District of Connecticut (Hartford) Judge: Albert S. Dabrowski Debtor's Counsel: Ellery E. Plotkin, Esq. LAW OFFICES OF ELLERY E. PLOTKIN, LLC 777 Summer Street, 2nd Floor Stamford, CT 06901 Tel: (203) 325-4457 Fax: (203) 325-4376 E-mail: EPlotkinJD@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 34 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ctb12-21184.pdf The petition was signed by Zulfikar Jafri, chief operationg officer. ZOGENIX INC: Incurs $10.3 Million Net Loss in First Quarter ----------------------------------------------------------- Zogenix, Inc., reported a net loss of $10.29 million on $18.34 million of total revenues for the three months ended March 31, 2012, compared with a net loss of $18.98 million on $9.04 million of total revenues for the same period during the prior year. The Company reported a net loss of $83.90 million in 2011, compared with a net loss of $73.56 million in 2010. The Company's balance sheet at March 31, 2012, showed $82.28 million in total assets, $82 million in total liabilities and $278,000 in total stockholders' equity. Roger Hawley, chief executive officer of Zogenix, stated, "During the first quarter, we continued to achieve growth in SUMAVEL DosePro product sales and prescriptions. We also successfully executed our transition plan with Astellas, with our sales force now responsible for detailing the specialist and primary care segments as of April 1st. Our initial experience in the transition of primary care has been encouraging. We fully expect to capitalize on this market segment as we continue to actively engage with potential co-promotion partners." A copy of the press release is available for free at: http://is.gd/dNSiXm About Zogenix Inc. Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. In its reports on the Company's financial statements for the years 2011 and 2010, the independent registered public accounting firm included an explanatory paragraph expressing substantial doubt regarding the Company's ability to continue as a going concern. Ernst & Young LLP, in San Diego, Calif., noted of the Company's recurring losses from operations and lack of sufficient working capital. ZOO ENTERTAINMENT: Delays Form 10-Q for First Quarter ----------------------------------------------------- Zoo Entertainment, Inc., filed with the U.S. Securities and Exchange Commission a Form 12b-25 report for a five-day extension, from May 15, 2012, to May 21, 2012, for filing its Quarterly Report on Form 10-Q for the period ended March 31, 2012. The Company has been unable to complete its evaluation and analysis in certain key areas. These evaluations and analyses and their implication on the Company's financial statements have caused the Company to be unable to timely file, without unreasonable effort and expense, the Form 10-Q. About Zoo Entertainment Cincinnati, Ohio-based Zoo Entertainment, Inc. (NASDAQ CM: ZOOG) is a developer, publisher and distributor of interactive entertainment for Internet-connected consoles, handheld gaming devices, PCs, and mobile devices. The Company reported a net loss of $25.87 million in 2011, compared with a net loss of $14.03 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $2.06 million in total assets, $15.24 million in total liabilities and a $13.18 million total stockholders' deficit. For 2011, EisnerAmper LLP, in Edison, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has both incurred losses and experienced net cash outflows from operations since inception. * BOOK REVIEW: Ralph H. Kilmann's Beyond the Quick Fix ------------------------------------------------------ Author: Ralph H. Kilmann Publisher: Beard Books Hardcover: 320 pages Listprice: $34.95 Review by Henry Berry Every few years, a new approach is offered for unleashing the full potential of organized efforts. These are the quick fixes to which the title of this book refers. The jargon of the quick fix is familiar to any businessperson: decentralization, human resources, restructuring, mission statement, corporate strategy, corporate culture, and so on. These terms are all limited in scope or objective, and some are even irrelevant or misconceived with regard to the overall well-being and purpose of a corporation. With his extensive experience as a corporate consultant, author of numerous articles, and professor in business studies, Kilmann recognizes that each new idea for optimum performance and results is germane to some area of a corporation. However, he also recognizes that each new idea inevitably falls short in bringing positive change -- that is, a change that is spread throughout the corporation and is lasting. At best, when a corporation relies on an alluring, and sometimes little more than fashionable, idea, it is a wasteful distraction. At worst, it can skew a corporate organization and its operations, thereby allowing the corporation's true problems or weaknesses to grow until they become ruinous. As the author puts it, "Essentially, it is not the single approach of culture, strategy, or restructuring that is inherently ineffective. Rather, each is ineffective only if it is applied by itself -- as a "quick fix"." Kilmann tells corporate leaders how to break the cycle of embracing a quick fix, discarding it after it proves ineffective, and then turning to a newer and ostensibly better quick fix that soon proves to be equally ineffective. For a corporation to break this self-defeating cycle, the author offers a five-track program. The five tracks, or elements, of this program are corporate culture, management skills, team-building, strategy-structure, and reward system. These elements are interrelated. The virtue of Kilmann's multidimensional five-track program is that it addresses a corporation in its entirety, not simply parts of it. Kilmann's five tracks offer structural and operational aspects of a corporation that executives and managers will find familiar in their day-to-day leadership and strategic thinking. Thus, the author does not introduce any unfamiliar or radical perspectives or ideas, but rather advises readers on how to get all parts of a corporation involved in productive change by integrating the five tracks into "a carefully designed sequence of action: one by one, each track sets the stage for the next track." Kilmann does more, though, than bring all significant features of a modern corporation together in a five-track program and demonstrate the interrelation of its elements. His singularly pertinent and useful contribution is providing a sequence of steps to be implemented with respect to each track so that a corporation progresses toward its goals in an integrated way. Beyond the Quick Fix is a manual for implementing and evaluating the progress of a five-track program for corporate success. The book should be read by any corporate leader desiring to bring change to his or her organization. Ralph H. Kilmann has been connected with the University of Pittsburgh for 30 years. For a time, he was its George H. Love Professor of Organization and Management at its Katz Graduate School of Business. Additionally, he is president of a firm specializing in quantum transformations. ********* 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 ***