/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120702.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, July 2, 2012, Vol. 16, No. 182 Headlines 116 PROSPECT: Case Summary & 4 Largest Unsecured Creditors 180 PROSPECT: Case Summary & 3 Largest Unsecured Creditors 1ST FINANCIAL: Vincent Rees Elected as Director 23 EAST: SLC2 Holdings Seeks Case Dismissal or Relief of Stay 4 M INVESTMENTS: Case Summary & 6 Largest Unsecured Creditors 530 W. 28TH: Voluntary Chapter 11 Case Summary ABOUND SOLAR: Green Energy Startup to File Chapter 11 in Delaware ABRAHAM PETROLEUM: Bankr. Court Upholds Tax Statements Ruling ACE AVIATION: Ernst & Young Inc. Appointed Liquidator ADVANSTAR INC: S&P Ups Corp. Credit Rating to 'CCC+'; Outlook Neg AE BIOFUELS: AAFK Issues $400,000 Promissory Notes to Third Eye ALISAL WATER: Fitch Affirms 'BB+' Rating on $7.6MM Secured Bonds ALLIED SYSTEMS: Section 341(a) Meeting Scheduled for July 26 ALLIED SYSTEMS: Court Approves Rust Consulting as Noticing Agent ALT HOTEL: Cash Collateral Hearing Resumes Today ALT HOTEL: Employment of LW Hospitality Denied as Unnecessary APPLETON PAPERS: Soliciting Consents for Hicks Purchase Pact ARCADIA RESOURCES: Directors Resign; Now Winding Up Operations ARCAPITA BANK: Court Approves Committee's Counsel, Advisors ARCTIC GLACIER: To Sell Business to H.I.G. via CCAA ARCTIC GLACIER: Moody's Assigns 'B2' Corp. Family Rating ARCTIC GLACIER: S&P Assigns 'B-' Corporate Credit Rating BEDFORD LOFTS: Voluntary Chapter 11 Case Summary BENT CREEK: Case Summary & 20 Largest Unsecured Creditors BEST UNION: Files for Chapter 11 in Los Angeles BILLMYPARENTS INC: Nets $3.4 Million from Sale of Shares BLACK PRESS: Moody's Lowers CFR/PDR to 'B2'; Outlook Negative BLACKBELT ACADEMIES: Case Summary & 9 Largest Unsecured Creditors BLACK DAVIS: Court Dismisses Two Counts in Suit Against Frontier BOWMAN COMPANY: Voluntary Chapter 11 Case Summary BUD'S CAR WASH: Claimants' Response Deadline Moved to July 17 BUD'S CAR WASH: Diener Estate Has More Time to Challenge Suit BUFFETS INC: Confirms Second Chapter 11 Plan CAESARS ENTERTAINMENT: Deregisters 4.5MM Shares of Common Stock CATALYST PAPER: BC Court Approves Reorganization Plan CCGI HOLDING: S&P Withdraws B- Corp. Credit Rating on Repaid Debt CHARLESTON & 28TH: Case Summary & 11 Largest Unsecured Creditors CHEYENNE HOTEL: Aug. 8 Set as Government Claims Bar Date CHEYENNE HOTEL: Henslee Halle and Assoc. Approved as Accountants CINE PHOTO: Case Summary & 20 Largest Unsecured Creditors CNA FINANCIAL: Moody's Upgrades Provisional Rating From (P)Ba1 COLOUR CONCEPTS: Case Summary & 20 Largest Unsecured Creditors CONFORCE INTERNATIONAL: Delays Form 10-K for Fiscal 2012 CONSTRUCTORA DE HATO: Required to File Plan Disclosures by Aug. 31 CROWN MEDIA: All 14 Director Nominees Elected CRYSTALLEX INTERNATIONAL: Draws Down Add'l $8MM Under DIP Pact CULLIGAN INT'L: Moody's Cuts PDR to 'D' After Debt Restructuring DEAN FOODS: Moody's Retains 'Ba3' Corporate Family Rating DELTA AIR LINES: S&P Rates Class B Pass-through Certs. 'BB' DELTA AIR LINES: S&P Raises Rating on Class G1 Certs. From 'BB+' DEX ONE: Alan Schultz Succeeds Eugene Davis as Board Chairman DJ CHRISTIE: Lawsuit Against Pratt et al. Stays in Bankr. Court DOLLAR GENERAL: S&P Rates Proposed $450MM Unsecured Notes 'BB+' EASTMAN KODAK: No Equity Committee or Valuation Trial for Now EASY RENTAL: Case Summary & 20 Largest Unsecured Creditors ELECTRICAL & ELECTRONIC: Case Summary & Creditors List ENDURANCE INTERNATIONAL: S&P Affirms 'B' Corporate Credit Rating ENERGY CONVERSION: Taps Diversified Property to Give Tax Review ENERGY CONVERSION: Hilco IP Approved to Monetize IP Assets ENERGY CONVERSION: McDonald Hopkins Approved as Conflicts Counsel ENERGY CONVERSION: Signature OK'd as Real Estate Brokers ENTERTAINMENT PROPERTIES: Fitch Affirms 'B' Rating on Pref. Stock EPIC WINGS: Case Summary & 13 Largest Unsecured Creditors EQUITABLE OF IOWA: Fitch Keeps 'BB' Rating on Trust Pref. Stock FAIRVIEW APARTMENTS: Case Summary & 3 Largest Unsecured Creditors FNB UNITED: Added to Russell Indices; Issues $7.3MM Common Shares FONAR CORP: Five Directors Elected at Annual Meeting FOREST AVENUE: Voluntary Chapter 11 Case Summary FULLER BRUSH: Has Plan Exclusivity Until Sept. 19 GENERAL MARITIME: Levi & Korsinsky to Seek Lead Plaintiff Position GOLD RESERVE: Shareholders Approve Restructuring of Debt GOLDEN OAKS: Case Summary & 20 Largest Unsecured Creditors GUIDED THERAPEUTICS: Extends Warrant Exchange Offer to July 5 GW PARTNERS: Plan of Reorganization Wins Court Approval HAMPTON ROADS: CapGen Capital Now Has 37.5% Ownership HEMCON MEDICAL: Miller Nash Approved as IP Counsel HEMCON MEDICAL: Obsidian Finance Approved as Financial Consultant HEMCON MEDICAL: Tonkon Torp Approved as Bankruptcy Counsel HOUGHTON MIFFLIN: Case Moved to Boston Following Confirmation HOUGHTON MIFFLIN: Exit From Bankruptcy Cues Fitch to Raise Ratings HOWELL TOWNSHIP, MI: Fitch Rates 3 LTGO Bond Classes at Low-Bs INTERNATIONAL GOSPEL: Lawyer Can Receive Payment From Excess Funds JER/JAMESON: Wants Until Oct. 20 to Propose Chapter 11 Plan KBK INC.: Case Summary & 20 Largest Unsecured Creditors KENAN ADVANTAGE: S&P Affirms 'BB-' Corporate Credit Rating KLN STEEL: Court Denies Banco Popular's Case Conversion Motion KLN STEEL: Third Amended Reorganization Plan Confirmed LARSON LAND: Ball Janik Approved as Chapter 11 Trustee's Counsel LARSON LAND: Hawley Troxell as Chapter 11 Trustee's Attorney LAXMI ENTERPRISES: Case Summary & 8 Largest Unsecured Creditors LIBERTY CABLEVISION: S&P Assigns 'B' Corporate Credit Rating LINN ENERGY: S&P Affirms 'B+' Corp. Credit Rating; Outlook Stable LODGENET INTERACTIVE: Healthcare Chief's Contract Extended LSP MADISON: S&P Rates $750MM Senior Secured Term Loan 'BB+' LUBAVITCH CHABAD: Case Summary & 5 Largest Unsecured Creditors LUCAS ELECTRIC: Case Summary & 20 Largest Unsecured Creditors LUMBER PRODUCTS: From Appraiser, Murphy to Serve as Auctioneer LUMBER PRODUCTS: Broderick Approved as Case Trustee's Realtor LUMBER PRODUCTS: Hires Kiemle & Hagood as Real Estate Broker LUMBER PRODUCTS: Committee Wants to Employ Counsel's New Firm LYMAN LUMBER: Court Approves Capacity Commercial as Realtor M.G. MILLER-MANAGEMENT: Case Summary & Creditors List M&T BANK: Fitch Affirms Rating on Preferred Stock at 'BB' MADISON BENTLEY: Alter Ego Claims Require Report MARINA BAY SANDS: S&P Assigns Gives 'BB+' Corp. Credit Rating METAL STORM: Noteholders' Meeting Scheduled for July 16 MITEL NETWORKS: Moody's Affirms 'B3' CFR/PDR; Outlook Stable MORGAN'S FOODS: Seven Directors Elected at Annual Meeting MOTORS LIQUIDATION: To Modify Tax Holdback Calculation Approach NUVILEX INC: Pays 100-Mil. Shares for 100% of Austrianova OLD CORKSCREW: Reorganization Plan Declared Effective OLYMPIC HOLDINGS: Files for Chapter 11 in Los Angeles PALM AVENUE: Case Summary & 10 Largest Unsecured Creditors PDQ COOLIDGE: Hires TriNet HR for Payroll Services PHILADELPHIA ORCHESTRA: To Exit Chapter 11 in July PIGGLY WIGGLY: Voluntary Chapter 11 Case Summary PINNACLE AIRLINES: Court Fixes Aug. 6 as General Claims Bar Date PINNACLE AIRLINES: NSB Aviation Approved as Advisor/Consultant PRINCE SPORTS: Creditors Voting on Chapter 11 Plan PROFESSIONAL AUDIO: Case Summary & 20 Largest Unsecured Creditors PRY-WING, LLC: Case Summary & 20 Largest Unsecured Creditors QUANTUM CORP: Assigns $25MM of Revolver Commitment to Silicon QUANTUM FUEL: Sells $4.6 Million Bridge Notes QUICKSILVER RESOURCES: S&P Lowers Corp. Credit Rating to 'B-' QVC INC: S&P Keeps 'BB' Corporate Credit Rating; Outlook Stable RCR PLUMBING: Plan Outline Hearing Continued Until July 10 RESEARCH IN MOTION: To Ax 5,000 Jobs After Another Losing Quarter RESIDENTIAL CAPITAL: Triax Objects to $8.7-Bil. RMBS Trust Deal RESIDENTIAL CAPITAL: Hearing on Plan Support Deal Adjourned RESIDENTIAL CAPITAL: Court Approves AFI Shared Services Agreement RESIDENTIAL CAPITAL: Wins Approval to Pay Employee Obligations RG STEEL: Mountain State Carbon Lawsuit Goes Back to State Court ROBERTS HOTELS: Fails to Win Retroactive Relief in Danna Hiring ROBERTS HOTELS: Taps Robert N. Goldstein as Consultant ROBERTS HOTELS: Taps William Sessions, III, as Litigation Counsel ROOMSTORE INC: Liquidators Guarantee 59% of Inventory Cost ROTECH HEALTHCARE: Five Directors Elected at Annual Meeting SBA COMMUNICATIONS: S&P Affirms 'B+' CCR on TowerCo Acquisition SEQUENOM INC: Names Carolyn Beaver as Vice President and CAO SHERIDAN REHABILLITATIVE: Voluntary Chapter 11 Case Summary SHRI SHIV: Case Summary & 20 Largest Unsecured Creditors SKINNY NUTRITIONAL: Issues 30 Million Shares to Ironridge SOMMERSET PROPERTIES: Lenders Want to Foreclose on Property SOTERA DEFENSE: S&P Keeps 'B' Corp. Credit Rating; Outlook Stable SOUPMAN INC: Says SKI Claims "Baseless"; Parties in Mediation SOUTHERN PRODUCTS: Faces Lawsuit Over Televisions Disposition SPARKS, NV: Moody's Affirms 'B2' Rating on Salex Tax Bonds SPECIALTY PRODUCTS: Asbestos Claimants Tap Motley Rice as Counsel SPECTRUM BRANDS: S&P Affirms 'B' Corp. Credit Rating; Outlook Pos STAFFORD RHODES: South Carolina and Georgia Malls in Chapter 11 STOCKTON, CA: Files for Chapter 9 Bankruptcy STOCKTON, CA: S&P Lowers Issuer Credit Rating From 'SD' to 'D' SUCCESS SYSTEMS: Case Summary & 9 Largest Unsecured Creditors SWIFT AIR: Voluntary Chapter 11 Case Summary SYNOVUS FINANCIAL: Fitch Affirms 'BB-' Issuer Default Rating THOMAS JEFFERSON: S&P Cuts Rating on Revenue Bonds to 'BB' TOUR WORLD: Case Summary & 20 Largest Unsecured Creditors TROPICANA ENT: LandCo Debtors, Hotel Workers Fund Settle Claim TROPICANA ENT: OpCo Debtors Allow Louisiana Lawsuits to Proceed UNITED MARITIME: S&P Affirms 'B' Corp. Credit Rating; Off Watch UNIV OF NORTH CAROLINA: S&P Cuts Rating on Bonds to 'BB' USEC INC: Expects $1.9 Billion Revenue in 2012 VISUALANT INC: Names Richard Mander as VP of Product Management VISUALANT INC: Sumitomo Precision Discloses 21.8% Equity Stake VITESSE SEMICONDUCTOR: W. Martin Has 12.8% Stake at June 26 VITRO SAB: Appeals Court Stops Bondholders From Seizing Assets WARNER MUSIC: Terminates Supply Agreements with Cinram WATERFORD LAKES: Case Summary & 4 Largest Unsecured Creditors WAVELAND - INGOTS: Fitch Withdraws 'D' Rating on Two Note Classes WINDMILL DURANGO: Buying a Claim & Changing a Vote Not Permitted WJO INC: Health Clinic Taken Over by Chapter 11 Trustee XINERGY CORP: Moody's Downgrades CFR to 'Caa3'; Outlook Negative YANG CENTRAL: Case Summary & Largest Unsecured Creditor * Moody's Sees Slow Earnings Growth in Global E&P Sector * Claims Trading in May Second-Lowest in the Past Year * Kramer Levin Receives Award for Work on Capmark Committee * BOND PRICING -- For Week From June 25 to 29, 2012 ********* 116 PROSPECT: Case Summary & 4 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: 116 Prospect Realty, Inc. 372 North Main Street Lodi, NJ 07644 Bankruptcy Case No.: 12-26154 Chapter 11 Petition Date: June 26, 2012 Court: U.S. Bankruptcy Court District of New Jersey (Newark) Judge: Novalyn L. Winfield Debtor's Counsel: Richard J. Kwasny, Esq. KWASNY REILLY HAFT & SACCO 53 South Main Street Yardley, PA 19067 Tel: (215) 321-0300 Fax: (215) 321-9336 E-mail: kwasnylaw@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 four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb12-26154.pdf The petition was signed by Wilfredo Alvarez, president/shareholder. Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- 180 Prospect Realty, Inc 12-26157 Fairview Apartments, Inc. 12-26158 State Properties 2005, LLC 12-26159 180 PROSPECT: Case Summary & 3 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: 180 Prospect Realty, Inc. 372 North Main Street Lodi, NJ 07644 Bankruptcy Case No.: 12-26157 Chapter 11 Petition Date: June 26, 2012 Court: U.S. Bankruptcy Court District of New Jersey (Newark) Judge: Novalyn L. Winfield Debtor's Counsel: Richard J. Kwasny, Esq. KWASNY REILLY HAFT & SACCO 53 South Main Street Yardley, PA 19067 Tel: (215) 321-0300 Fax: (215) 321-9336 E-mail: kwasnylaw@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 three largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb12-26157.pdf The petition was signed by Wilfredo Alvarez, president/shareholder. Affiliates that simultaneously filed Chapter 11 petitions: Entity Case No. ------ -------- State Properties 2005, LLC 12-26159 Fairview Apartments, Inc. 12-26158 116 Prospect Realty, Inc. 12-26154 1ST FINANCIAL: Vincent Rees Elected as Director ----------------------------------------------- 1st Financial Services Corporation held its annual meeting of stockholders on June 25, 2012. Vincent K. Rees was elected as director for a term of three years. The stockholders approved a non-binding resolution to approve the compensation of the Corporation's named executive officers and ratified the appointment of Elliott Davis PLLC as the Corporation's independent accountants for the fiscal year ending Dec. 31, 2012. About 1st Financial Hendersonville, North Carolina-based 1st Financial Services Corporation is the bank holding company for Mountain 1st Bank & Trust Company. 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. After auditing the 2011 results, 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." 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. 23 EAST: SLC2 Holdings Seeks Case Dismissal or Relief of Stay ------------------------------------------------------------- SLC2 Holdings LLC asks the U.S. Bankruptcy Court for the Southern District of New York to dismiss the Chapter 11 case of 23 East 39th Street Developers LLC, or in the alternative, vacate the automatic stay. According to SLC2, the case must be dismissed for cause, including for bad faith and for the impermissible use of Chapter 11 as a litigation tactic to gain leverage in a two-party mortgage foreclosure dispute. SLC2 wants the automatic stay vacated so that it can complete its foreclosure sale based upon the Debtor's inability to provide adequate protection, the lack of equity in the subject property coupled with the fact that the property has no income, and the Debtor's failure to pay real estate taxes for over two years all pointing to the Debtor's dubious reorganization prospects. The referee determined that $10,083,638 was owed to SLC2 as of Dec. 29, 2011. Interest at the default rate of 10.9% or $65,854,a month continued to accrue until the Petition Date. U.S. Trustee's Plea to Dismiss Case As reported in the Troubled Company Reporter on June 6, 2012, Tracy Hope Davis, the U.S. Trustee for Region 2, filed its own motion to dismiss or convert the Debtor's case to one under Chapter 7 of the Bankruptcy Code. According to the U.S. Trustee: -- the Debtor is a corporation but has not retained counsel under Section 327 of the Bankruptcy Code; -- the Debtor has not filed its schedules or a statement of financial affairs even though the case is over one month old; and -- the Debtor's failure to file the appropriate pleadings represents a gross mismanagement of the estate. About 23 East 39th Street 23 East 39th Street Developers LLC filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11304) on March 30, 2012. The Debtor estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. According to a state court filing, the Debtor bought in October 2007 a building on 23 East 39th Street in Bronx, New York, from entity 23 East 39th Street Management Corp. Subsequent to the sale, Management leased the property from the Debtor and subsequently vacated the property in May 2008. A June 2009 post by http://www.loopnet.com/the building is/was available for sale for $16.5 million. The property has two luxury residential dwellings in addition to five stories of commercial space. The six-story building has 11,649 square feet of space. Judge Robert E. Gerber oversees the case. James O. Guy, Esq., in Clifton Park, New York, serves as counsel to the Debtor. 4 M INVESTMENTS: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: 4 M Investments, LLC P.O. Box 15 Granite Falls, NC 28630 Bankruptcy Case No.: 12-50690 Chapter 11 Petition Date: June 27, 2012 Court: United States Bankruptcy Court Western District of North Carolina (Wilkesboro) Judge: Laura T. Beyer Debtor's Counsel: Richard S. Wright, Esq. MOON WRIGHT & HOUSTON, PLLC 227 W. Trade Street Suite 1800 Charlotte, NC 28202 Tel: (704) 944-6564 Fax: (704) 944-0380 E-mail: rwright@mwhattorneys.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/ncwb12-50690.pdf The petition was signed by Mark Hudson, member manager. 530 W. 28TH: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: 530 W. 28th Street, L.P. 530 West 28th Street New York, NY 10001 Bankruptcy Case No.: 12-12722 Chapter 11 Petition Date: June 26, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Alan E. Gamza, Esq. MOSES & SINGER LLP The Chrysler Building 405 Lexington Avenue New York, NY 10174-1299 Tel: (212) 554-7800 Fax: (212) 554-7700 E-mail: Agamza@mosessinger.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Joseph Morissey, manager of general partner. ABOUND SOLAR: Green Energy Startup to File Chapter 11 in Delaware ----------------------------------------------------------------- Abound Solar Inc., a manufacturer of solar panels from Loveland, Colorado, said Thursday that it is suspending operations and will file for bankruptcy protection this week in Delaware. Abound Solar manufactures next generation, cadmium telluride thin- film photovoltaic modules, and has facilities in Longmont, Loveland and Fort Collins, in Colorado. About Solar was awarded a $400 million loan guarantee from the U.S. Department of Energy in July 2010 to build a facility in Indiana and expand its Longmont facility. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Abound made the last draw on the loan in August, around the time Solyndra LLC halted manufacturing. Solyndra shut down after receiving a $535 million loan guarantee from the same U.S. Energy Department program. Solyndra filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011 and is currently liquidating its assets. Department of Energy spokesman Damien Lavera told the Denver Post that Abound Solar's liquidation would cost taxpayers between $40 million and $60 million after the liquidation because the company had used $70 million of the loan guarantee. Abound halted production in February from one plant in Colorado. The 125 remaining employees will lose their jobs when the company files for bankruptcy. Abound, according to the Denver Business Journal, laid off 180 people at its Longmont factory earlier this year and eliminated 100 temporary jobs as it tried to retool its operations. No Buyer Found Abound said in a statement that earlier this year, it ceased production of its first generation PV module and has been working to scale up manufacturing for its high-efficiency, second generation PV module, which was tested and verified by the National Renewable Energy Laboratory (NREL) to deliver 85 watts per panel and 12.5% efficiency. Abound has been in discussions with potential buyers over the last several months, but ended negotiations when the involved parties were unable to come to an agreement on terms. No Draws Since August Abound's funding has come from $300 million in private investment and $70 million from a DOE loan guarantee program. Abound had used $70 million of the awarded $400 million DOE loan guarantee for construction of solar panel manufacturing lines in Colorado. Abound has not drawn down any further DOE funds since August of 2011 when the DOE determined that challenging market conditions in the solar industry did not merit additional funding risk. Rivals from China Abound believes that, at scale, its USA-made CdTe panel technology has the ability to achieve lower cost per watt than competing crystalline silicon technology made in China. However, aggressive pricing actions from Chinese solar panel companies have made it very difficult for an early stage startup company like Abound to scale in current market conditions. According to the U.S. Commerce Department, the U.S. solar market has seen the prices for panels drop by more than 50% in the past year at a time when the value of imports of Chinese-made solar cells nearly quadrupled from $639 million in 2009 to $3.1 billion in 2011. Abound supports recent initiatives to enforce fair trade with import tariffs, but this action is unfortunately too late for the company. Green Energy Policy According to Bloomberg News, Cliff Stearns, the chairman of the House Energy and Commerce Committee's oversight panel that has held several hearings and collected thousands of administration e-mails relating to Solyndra's guarantee, said he didn't think Abound's closure warranted its own investigation. "We know why they went bankrupt. We warned them they would go bankrupt," Rep. Stearns, a Florida Republican, told reporters Thursday. "The larger question is why the administration was pursuing a green-energy policy in which companies are going bankrupt and wasting taxpayer money." ABRAHAM PETROLEUM: Bankr. Court Upholds Tax Statements Ruling ------------------------------------------------------------- Bankruptcy Judge Enrique S. LaMoutte in Puerto Rico denied the request of the Municipal Revenue Collection Center (CRIM) for reconsideration of the Court's prior order canceling certain postpetition tax statements CRIM filed against Abraham Petroleum Corporation. CRIM argues that the postpetition real property taxes in controversy for fiscal years 2010, 2011 and 2012 constitute administrative expenses which were addressed in the Debtor's Plan of Reorganization which stated that the same would be paid upon the plan's Effective Date. CRIM further argues that pursuant to 11 U.S.C. Sec. 503(b)(1)(D), the requirement to file a request for payment of an administrative expense pursuant to 11 U.S.C. Sec. 503(b)(1)(B) and (C) does not apply to tax claims of a governmental unit as a condition to having an allowed administrative expense. CRIM also argues the postpetition property taxes constitute the first lien (statutory lien) on the real estate properties and thus have priority over any other liens on said properties in conformity with the Puerto Rico Mortgage Act, 30 L.P.R.A. Sec. 2651, and thus may not be cancelled by the Plan and pursuant to 11 U.S.C. Sec. 1141(c), since the same does not refer to" claims against or interests in property" as does 11 U.S.C. Sec. 363(f), which allows for the sale "free and clear of any interest in such property." CRIM's third argument is that since the Debtor's plan is essentially a liquidation plan, the Debtor is not entitled to a discharge pursuant to 11 U.S.C. Sec. 1141(d)(3) which is a corollary provision to 11 U.S.C. Sec. 727(a). The Court, however, said CRIM has not established a manifest error of law nor presented newly discovered evidence in its motion for reconsideration which would warrant the Court to reconsider its order entered on April 17, 2012, granting the Debtor's motion for an Order directing the cancellation of tax statements. A copy of the Court's June 27, 2012 Opinion and Order is available at http://is.gd/I1Ti86from Leagle.com. About Abraham Petroleum Based in Dorado, Puerto Rico, Abraham Petroleum Corporation filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 09-05928) on July 17, 2009. Charles Alfred Cuprill, Esq., in San Juan, Puerto Rico, served as bankruptcy counsel. In its petition, the Debtor estimated US$1 million to US$10 million in both assets and debts. The Court on Aug. 2, 2011, granted an order confirming the Debtor's plan of liquidation. ACE AVIATION: Ernst & Young Inc. Appointed Liquidator ------------------------------------------------------- ACE Aviation Holdings Inc. disclosed that further to the approval by its shareholders on April 25, 2012 of a special resolution providing for the voluntary liquidation of ACE, the Quebec Superior Court - Commercial Division has issued an order appointing Ernst & Young Inc. as liquidator of ACE. Effective as of June 28, all of the directors and officers of ACE have resigned from their positions and the liquidator is vested with the powers of the directors of ACE. Under the supervision of the Court, the liquidator will establish a process for the identification, resolution and barring of claims and other contingent liabilities against ACE. The liquidator will also proceed with the distribution of ACE's remaining net cash to its shareholders, after providing for outstanding liabilities, contingencies and costs of the liquidation. The final distribution to shareholders and the cancellation of the shares of ACE will not occur earlier than mid-year 2013 in order to allow that any remaining contingent liabilities be settled or otherwise provided for. About ACE Aviation Headquartered in Montreal, Canada, ACE Aviation Holdings Inc. (Toronto: ACE-A.TO) -- http://www.aceaviation.com/-- is the parent holding company of Air Canada, Aeroplan, Jazz, Air Canada Technical Services, Air Canada Vacations, Air Canada Cargo, and Air Canada Ground Handling Services. For 2011, ACE recorded a loss and reduction in net assets in liquidation of $90 million. This includes unrealized losses of $76 million and $5 million respectively on ACE's investment and warrants in Air Canada. In the fourth quarter of 2011, ACE recorded a loss and reduction in net assets in liquidation of $21 million. This includes unrealized losses of $15 million and $1 million respectively on ACE's investment and warrants in Air Canada. ACE Aviation on Feb. 10, 2012 announced its intention to seek shareholder approval for its winding-up, the distribution of its remaining net assets and ultimately its dissolution in the future. ADVANSTAR INC: S&P Ups Corp. Credit Rating to 'CCC+'; Outlook Neg ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Santa Monica, Calif.-based Advanstar Inc. to 'CCC+' from 'CC'. The outlook is negative. "We raised our issue-level rating on Advanstar Communications Inc.'s first-lien term loan due 2014 to 'CCC+' (the same as the corporate credit rating on parent Advanstar Inc.). The recovery rating on this debt remains '4', indicating our expectation of average (30% to 50%) recovery for lenders in the event of a payment default," S&P said. "The rating actions reflect our view that the risk of meaningful subpar buybacks is not as high as it was. We believe Advanstar may have an economic incentive to buy back its debt at subpar prices because of its steep leverage, especially if the trading level of the debt dips further. However, we expect Advanstar to retain its available cash to support overall liquidity," S&P said. "For the quarter ended March 31, 2012, revenue was up 2% and EBITDA was essentially flat as growth in the tradeshow segment revenue offset declines in publishing and increased production costs resulted in a slightly lower EBITDA margin. For the 12 months ended March 31, 2012, lease-adjusted leverage was extremely high at around 10x and lease-adjusted interest coverage was 2.5x. We expect leverage to remain high and interest coverage to remain in the mid-2x area over the mid-to-intermediate term. Based on Advanstar's current interest rate on its term debt, small EBITDA base, and modest discretionary cash flow, we believe it may be unable to absorb current market rates when the debt matures in 2014, and its leverage could pose a significant impediment to refinancing," S&P said. "The negative rating out look reflects our view that the company may still pursue buybacks of debt or other negotiated restructuring transactions at prices below par value, which would lead us to lower our rating on Advanstar to 'SD' (selective default) and the issue-level rating on the company's senior secured term loan to 'D'," S&P said. "Revision of the outlook to stable would likely require that the company make significant progress toward refinancing its debt. An upgrade, which we regard as a remote likelihood, would likely entail a refinancing that boosts equity and reduces leverage, together with stabilizing trends in revenue and EBITDA," S&P said. AE BIOFUELS: AAFK Issues $400,000 Promissory Notes to Third Eye --------------------------------------------------------------- Aemetis Advanced Fuels Keyes, Inc., a subsidiary of Aemetis, Inc., formerly known as AE Biofuels, Inc., entered into Note and Warrant Purchase Agreements with Third Eye Capital Corporation pursuant to which AAFK sold 5% Subordinated Promissory Notes in the aggregate principal amount of $400,000 and 5-year warrants exercisable for 133,333 shares of Aemetis common stock and paid a fee of $50,000. The Promissory Notes are guaranteed by Aemetis and are due and payable upon the earlier of: (i) Dec. 31, 2012; (ii) completion of an equity financing by AAFK or Aemetis in an amount of not less than $25,000,000; (iii) the completion of an Initial Public Offering by AAFK or Aemetis; (iv) the completion of a revolving credit facility upon the acquisition of an ethanol facility; or (v) after the occurrence of an Event of Default, including failure to pay interest or principal when due; breaches of note covenants; false, incorrect, misleading or incorrect representations and warranties; voluntary bankruptcy or insolvency proceedings not discharged within 60 days. About AE Biofuels AE Biofuels, Inc. (OTC BB: AEBF) -- http://www.aebiofuels.com/-- is a biofuels company based in Cupertino, California, developing sustainable solutions to address the world's renewable energy needs. The Company is commercializing its patent-pending next- generation cellulosic ethanol technology that enables the production of biofuels from both non-food and traditional feedstocks. Its wholly-owned Universal Biofuels subsidiary built and operates a nameplate 50 million gallon per year biodiesel production facility on the east coast of India. The Company reported a net loss of $1.72 million on $1.59 million of sales for the three months ended Sept. 30, 2010, compared with a net loss of $3.78 million on $4.05 million of sales for the same period a year earlier. BDO Seidman, LLP, in San Jose, Calif., expressed substantial doubt about AE Biofuels' ability to continue as a going concern, following the Company's 2009 results. The independent auditors noted that the Company has incurred recurring losses, and has a working capital deficit and total stockholders' deficit as of December 31, 2009. The Company's balance sheet at Sept. 30, 2010, showed $20.23 million in total assets, $29.03 million in total liabilities, all current, and a stockholders' deficit of $8.80 million. The Company has not filed financial reports after filing its Form 10-Q for the quarter ended Sept. 30, 2010. ALISAL WATER: Fitch Affirms 'BB+' Rating on $7.6MM Secured Bonds ---------------------------------------------------------------- Fitch Ratings takes the following actions on Alisal Water Corporation (Alco): -- $7.6 million of outstanding 2007A senior secured taxable bonds affirmed at 'BB+'; -- Issuer Default Rating (IDR) affirmed at 'BB-'. The Rating Outlook is Stable. SECURITY The bonds are secured by a security interest in pledged collateral, which consists of all tangible and intangible assets owned by Alco. KEY RATING DRIVERS FINANCIALS REMAIN NARROW BUT ADEQUATE: Alco's ratings reflect the utility's adequate but relatively weak financial metrics, particularly with regards to liquidity. A recent general rate increase has improved Alco's financial profile from prior levels, although ongoing margins are expected to be somewhat modest. CONSTRUCTIVE REGULATORY ENVIRONMENT: The California regulatory environment is relatively predictable, and the utility has achieved rate relief as needed, although customer charges are high. SMALL SERVICE AREA: The customer base is limited and includes a narrow economic profile and very high unemployment. CAPITAL STRUCTURE TO CONTINUE: Capital needs are manageable, which should help to further improved Alco's elevated debt to equity mix. LONG-TERM SUPPLY ADEQUACY: The utility provides an essential service and water supplies are sufficient to meet long-term demands. WHAT COULD CHANGE THE RATING SUSTAINED FINANCIAL IMPROVEMENT: Sustained performance of key financial metrics and improvement in liquidity would be viewed favorably. CAPITAL STRUCTURE: Improvement in Alco's capital structure would alleviate leverage concerns. REGULATORY FRAMEWORK: Unfavorable changes in California's regulatory environment would be viewed negatively. CREDIT PROFILE With a marginal decrease in sales and a 15% increase in operating expenses, income statement results were moderately lower overall in calendar 2011 relative to 2010 (Alco's fiscal year also ends Dec. 31). For 2011, EBITDA covered interest by 2.5 times (x) (down from 3.2x in 2010) and EBITDA covered total debt service by 1.7x (down from 2.2x). Alco's forecast through 2016 anticipates an additional drop in EBITDA coverage of interest to 1.8x in 2012 in light of rising interest costs associated with a note placement. But coverage is expected to gradually improve thereafter once the note is extinguished by the end of 2012 and assuming certain rate base offsets in future years. Despite the weakened income statement results in 2011, cash flows were more favorable as a result of approval of various surcharges and a general rate base increase by the California Public Utilities Commission (CPUC) in March 2011. For 2011, cash flow from operations more than doubled from the prior year to $3.4 million, allowing Alco to boost capital spending to $1.4 million or a solid 219% of depreciation. The strong cash flow performance in 2011 also allowed Alco to pay down $2 million of debt. The reduction in debt is a positive given Fitch's historical concerns relating to Alco's capital structure. For 2011, Alco's debt relative to equity dropped to 77% from 85% in 2010. With the amortization of debt and relative maintenance of net income over the last two years, debt-to-EBITDA also has gradually improved, falling to an average 3.9x in 2011. Despite the positive changes in capital structure and expected improvement over the near term, the system's elevated debt profile continues to be a major credit factor. Alco's current capital improvement program for 2012-2016 totals $8.9 million and is anticipated to be funded largely from surplus revenues (around 70%), with a moderate 30% funded through capital leases. While the extent of equity capital funding will assist in further reducing debt levels to some extent, it should limit any increase in Alco's weak liquidity position; for 2011 days cash equaled just 18 days. However, the completion of projects should allow Alco to seek rate base offsets, which will enhance future annual cash flows. Alco is regulated by the CPUC, but regulations are fairly well defined, and Alco has received timely rate relief. However, as a result of the recent rate increase passed by the CPUC, Alco's residential charges, which were already relatively high, have risen to a very high 1.4% of median household income based on 1,400 cubic feet per month. While Fitch expects the CPUC will allow future adjustments to cover necessary operating and capital expenditures and to generate a continued return on equity commensurate with other similarly-sized private water utilities in the state (currently in the 10% range), the system's level of charges poses some concern. Alco is a private retail water company in Monterey County California, serving a portion of the city of Salinas and a population of around 29,000. Part of Alco's certificated service area includes undeveloped land within the city's extra-territorial jurisdiction. Water supplies are derived exclusively from groundwater sources, which are estimated to be sufficient to meet customer demands for the foreseeable future. ALLIED SYSTEMS: Section 341(a) Meeting Scheduled for July 26 ------------------------------------------------------------ Roberta A. DeAngelis, U.S. Trustee for Region 3, will convene a meeting of creditors in the Chapter 11 cases of Allied Systems Holdings, Inc., et al., on July 26, 2012, at 10 a.m. (Eastern Daylight Time). The meeting will be held at the J. Caleb Boggs Federal Building, 844 King Street, 2nd Floor, Room 2112, Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. Allied Systems Holdings Inc. has an official creditors' committee with four members. ALLIED SYSTEMS: Court Approves Rust Consulting as Noticing Agent ---------------------------------------------------------------- Allied Systems Holdings Inc. and Allied Systems Ltd. sought and obtained approval from the U.S. Bankruptcy Court to employ Rust Consulting/Omni Bankruptcy to act as an official claims and noticing agent to the court. Scott D. Macauley attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm's rates are: Personnel Rates --------- ----- Senior Consultant $195 Consultants $125 - 175/hour Project Specialists $67.50 - $125/hour Programming $117 - 157.50/hour Clerical Support/Quality Assurance $25 - 67.50/hour About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. ALT HOTEL: Cash Collateral Hearing Resumes Today ------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Illinois continued until July 2, 2012, at 10 a.m., the hearing to consider ALT Hotel, LLC's request for continued access to cash collateral. The bankruptcy judge previously entered an order authorizing ALT Hotel to access cash collateral until June 30, 2012. Pursuant to a stipulation with the senior lender, DiamondRock Allerton Owner, LLC; -- the senior lender consents to the use of the cash collateral relating to the hotel's room revenues, meeting space revenues, food and beverage revenues and other operating department revenues, rentals and other income, and monies received or held in impound or trust accounts, to fund the payment of expenses of the hotel; -- with respect to the professional fees, Arcturus, other consultant and professional incidentals line items in the aggregate amount of $285,000, the Debtor will fund the payment of the budgeted professional fees to Neal Wolf & Associates, LLC, counsel to the Debtor; and -- the senior lender has agreed and the Debtor is directed that, among other things: (i) until the ninth interim expiry date, the Debtor will (a) continue to adhere to the terms of the cash management system set forth in the senior loan agreement, including without limitation, maintaining the lock-box concentration account system as set forth in the senior loan agreement; (ii) adhere to the ninth interim period budget subject to a 10% variance allowance per line item; (iii) make monthly payments to the senior lender. As reported in the TCR on April 19, 2012, as adequate protection to the diminution in the value of the lender's collateral, the Debtor will grant the senior lender, among other things: (i) replacement liens with the same validity and priority on all rents and all other property of the estate of the same kind and nature on which the senior lender had a duly perfected and valid lien and security interest on a prepetition basis; (ii) make payments to the senior lender equal to interest on the outstanding senior debt at the default rate set forth in the senior loan agreement; (iii) continue to maintain adequate insurance on all property on which the senior lender holds a duly perfected and valid lien and security interest on a prepetition basis. About ALT Hotel LLC ALT Hotel, LLC's sole asset is the Allerton Hotel located in the "Magnificent Mile" area of Chicago. The Hotel is managed by Kokua Hospitality, LLC, pursuant to a Hotel Management Agreement, dated Nov. 9, 2006. Kokua is the exclusive manager and operator of the Hotel, and receives management fees for its services, with the amount of such fees directly linked to the annual performance of the Hotel. Hotel Allerton Mezz, LLC, is the sole member of ALT Hotel. ALT Hotel filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-19401) on May 5, 2011. Judge A. Benjamin Goldgar presides over the case. In its petition, the Debtor estimated $100 million to $500 million in assets and $50 million to $100 million in debts. Neal L. Wolf, Esq., Dean C. Gramlich, Esq., and Jordan M. Litwin, Esq., at Neal Wolf & Associates, LLC, in Chicago, Illinois, serve as bankruptcy counsel to the Debtor. FTI Consulting serves as the Debtor's financial advisors. Affiliate PETRA Fund REIT Corp. sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-15500) on Oct. 20, 2010. ALT HOTEL: Employment of LW Hospitality Denied as Unnecessary ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois denied ALT Hotel, LLC's request to employ LW Hospitality Advisors, LLC as valuation expert. The Court determined that the employment was unnecessary. As reported in the Troubled Company Reporter on June 20, 2012, the Debtor tapped LWHA to conduct an appraisal of the Debtor's primary asset -- a hotel located off Michigan Avenue in Chicago, Illinois, known as Allerton Hotel, and to testify as an expert witness at the July 23 confirmation hearing. Prepetition, the Debtor employed LWHA for the initial appraisal of the hotel and accompanying expert report. On May 11, an affiliate of the Debtor, Petra CDO P&I paid an additional $15,000 fee to LWHA in connection with the update to the initial LWHA report. The Debtor owed LWHA $21,317. NW&A intends to pay the amount out of the firm's IOLTA trust account. The Debtor proposed to pay the firm at these hourly rates: Daniel H. Lesser, president, CEO $600 Executive Managing Director $450 Managing Director $400 Senior Vice President $350 Senior Associate $200 Associate $175 In connection with the litigation support services, LWHA has requested a retainer of $20,000. The Debtor intends to pay from the NW&A IOLTA trust account plus a balance of $1,317 in expenses incurred earlier in the case. About ALT Hotel LLC ALT Hotel, LLC's sole asset is the Allerton Hotel located in the "Magnificent Mile" area of Chicago. The Hotel is managed by Kokua Hospitality, LLC, pursuant to a Hotel Management Agreement, dated Nov. 9, 2006. Kokua is the exclusive manager and operator of the Hotel, and receives management fees for its services, with the amount of such fees directly linked to the annual performance of the Hotel. Hotel Allerton Mezz, LLC, is the sole member of ALT Hotel. ALT Hotel filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-19401) on May 5, 2011. Judge A. Benjamin Goldgar presides over the case. Neal L. Wolf, Esq., Dean C. Gramlich, Esq., and Jordan M. Litwin, Esq., at Neal Wolf & Associates, LLC, in Chicago, Illinois, serve as bankruptcy counsel to the Debtor. In its petition, the Debtor estimated $100 million to $500 million in assets and $50 million to $100 million in debts. FTI Consulting serves as the Debtor's financial advisors. Affiliate PETRA Fund REIT Corp. sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-15500) on Oct. 20, 2010. APPLETON PAPERS: Soliciting Consents for Hicks Purchase Pact ------------------------------------------------------------ Appleton Papers Inc. is soliciting consents to amend each of the indentures governing its 10.50% Senior Secured Notes due 2015 and 11.25% Second Lien Notes due 2015 to permit, and give effect to, the transactions contemplated by the Equity Purchase Agreement dated as of May 16, 2012, as amended, by and among Appleton, Paperweight Development Corp., Hicks Acquisition Company II, Inc., and HH-HACII, L.P., and the Cross Purchase Agreement dated as of May 16, 2012, between PDC and HACII. The consent solicitations will expire at 5:00 p.m., New York City time, on Tuesday, July 10, 2012, unless extended. Registered holders of the Notes on June 26, 2012, that validly consent to the proposed amendments at or prior to Expiration Time, will receive a consent payment, of $1.25 for each $1,000 principal amount of the Notes covered by that consent. Consents may be revoked prior to receipt of the Requisite Consents. The consent solicitations are subject to certain conditions, including the receipt of consents from the registered holders of at least a majority in aggregate principal amount of each of the Notes outstanding as of June 26, 2012. Appleton reserves the right to waive these conditions or to terminate or withdraw the consent solicitations at any time and for any reason. Questions regarding the consent solicitation may be directed to the Information and Tabulation Agent, which is i-Deal LLC, 512 Seventh Avenue, 31st Floor, New York, NY 10018; (888) 593-9546, or the Solicitation Agent, which is Jefferies & Company, Inc., The Metro Center, One Station Place, Three North, Stamford, CT 06902; (888) 708-5831. About Appleton Papers Appleton, Wisconsin-based Appleton Papers Inc. -- http://www.appletonideas.com/-- produces carbonless, thermal, security and performance packaging products. Appleton has manufacturing operations in Wisconsin, Ohio, Pennsylvania, and Massachusetts, employs approximately 2,200 people and is 100% employee-owned. Appleton Papers is a 100%-owned subsidiary of Paperweight Development Corp. The Company reported a net loss of $2.11 million for the year ended Dec. 31, 2011, compared with a net loss of $31.66 million for the year ended Jan. 1, 2011. Appleton's balance sheet at April 1, 2012, showed $609.83 million in total assts, $864.04 million in total liabilities, and a $254.21 million deficit. * * * Appleton Papers carries a 'B' corporate credit rating, with stable outlook, from Standard & Poor's. IT has a 'B2/LD' probability of default rating from Moody's. ARCADIA RESOURCES: Directors Resign; Now Winding Up Operations -------------------------------------------------------------- John T. Thornton, Joseph Mauriello, Matthew R. Middendorf and Steven L. Zeller resigned as directors of Arcadia Resources, Inc., on June 27, 2012. Mr. Zeller ceased to be employed as Chief Operating Officer and General Counsel of the Company, and Mr. Middendorf ceased to be employed as Chief Financial Officer, Treasurer and Secretary of the Company. The Board of Directors determined that in light of the Company's present circumstances it was appropriate for the Company to wind up its affairs. The Board adopted resolutions authorizing the winding up of the Company's affairs and entered into an agreement with a Wind-Down Administrator to oversee the wind up process in accordance with the authority given by the Board of Directors. The Wind-Down Administrator has no authority to operate any business or engage in any business activity and is authorized solely to take actions to wind up the affairs of the Company. The Company expects that holders of its outstanding unsecured debt and other trade creditors will receive no payments, or nominal payments, on their claims after the wind down of the Company's affairs is completed. The Company has determined that its shares of common stock have no value. The Company has previously discouraged investors from trading in the Company's common stock. On June 26, 2012, the Company sent a letter to OTC Markets Group (a) terminating the Company's agreement with OTCG, (b) requesting that OTCG place a "Caveat Emptor" designation on the Company's common stock and (c) requesting that OTCG take steps to cause further trading through OTCG facilities to cease, including taking action to prevent broker-dealers from trading the Company's securities on OTCG trading facilities. As of June 27, the Company has closed its executive offices at 9320 Priority Way West Drive, Indianapolis, IN 46240. Communications with the Company may be done in writing addressed to: Wind-Down Administrator, P.O. Box 40507, Indianapolis, IN 46240, or by calling and leaving a message at (317) 222-3035. About Arcadia HealthCare Arcadia HealthCare is a service mark of Arcadia Resources, Inc. (nyse amex:KAD), and is a leading provider of home care, medical staffing and pharmacy services under its proprietary DailyMed program. The Company, headquartered in Indianapolis, Indiana, has 65 locations in 18 states. Arcadia HealthCare's comprehensive solutions and business strategies support the Company's vision of "Keeping People at Home and Healthier Longer." The Company reported a net loss of $15.76 million for the nine months ended Dec. 31, 2011. The Company had a net loss of $14.35 million for the fiscal year ended March 31, 2011, following a net loss of $31.09 million in the preceding year. The Company's balance sheet at Dec. 31, 2011, showed $15.93 million in total assets, $51.50 million in total liabilities, and a $35.57 million total stockholders' deficit. BDO USA, LLP, in Troy, Michigan, issued a "going concern" qualification on the consolidated financial statements for the year ended March 31, 2011, citing recurring losses from operations and net capital deficiency. As reported by the TCR on May 7, 2012, Arcadia Services, Inc., entered into a foreclosure agreement, dated May 1, 2012, with Arcadia Holdings II, Inc. As a result of the foreclosure transaction, the Company no longer owns any operating businesses. ARCAPITA BANK: Court Approves Committee's Counsel, Advisors ----------------------------------------------------------- Bankruptcy Judge Sean H. Lane on Friday approved applications lodged by the Official Committee of Unsecured Creditors in the Chapter 11 case of Arcapita Bank B.S.C.(C) to employ bankruptcy professionals. The Court approved the Committee's retention of: -- Milbank, Tweed, Hadley & McCloy LLP as lead counsel; -- Walkers Global as Cayman counsel; -- Hassan Radhi & Associates as Bahraini counsel; -- Houlihan Lokey Capital, Inc., as financial advisor and investment banker; and -- FTI Consulting, Inc. as financial advisor. Houlihan's retention was approved on an interim basis. Judge Lane said FTI and Houlihan will coordinate on the services they are providing to the Committee to ensure that there is no unnecessary duplication of services by either firm during the pendency of the chapter 11 cases. The services that FTI provides to the Committee will remain separate and distinct from the services that Houlihan provides to the Committee. FTI will be principally responsible for providing to the Committee financial analyses of the Debtors' liquidity, cash activities, cash control, intercompany activities, as well as tax-related advice, claims analysis and a review of potential avoidance actions, all subject to the Committee's specific authorization and direction. Houlihan will be primarily responsible for advising the Committee on the financial and strategic elements of the Debtors' business plan (including an assessment of all investments, proposed deal funding, relevant valuations and the viability of a stand-alone plan of reorganization), potential merger and acquisition transactions, and financing alternatives for the Debtors, including exit financing. Should the Committee request FTI or Houlihan to render other services as it may deem necessary that may vary from those services described, FTI and Houlihan will undertake to coordinate such services to ensure that there remains no unnecessary duplication of services. All requests by Houlihan for payment of indemnity pursuant to the Engagement Letter will be made by application and subject to review by the Court to ensure that payment of indemnity conforms to the terms of the Engagement Letter and is reasonable based upon the circumstances of the litigation or settlement in respect of which indemnity is sought. The Court also approved the Debtors' request to authorize parties to file under seal names of the Debtors' investment vehicles and portfolio corporations. 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. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. 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: To Sell Business to H.I.G. via CCAA --------------------------------------------------- Arctic Glacier Income Fund said that the proposed sale of substantially all of its business and assets to an affiliate of H.I.G. Capital will be carried out by way of a court approved sale under the Companies' Creditors Arrangement Act ("CCAA"). The agreement and completion of the transaction remain subject to court approval in the United States and the satisfaction of certain closing conditions customary in transactions of this nature, including the absence of a material adverse change in respect of Arctic Glacier. The transaction is expected to close by no later than July 31, 2012. On closing, all of the employees of Arctic Glacier will be offered employment and the company's head office will remain in Winnipeg. The purchaser will assume Arctic Glacier's current trade payables and all of its leases and certain contractual obligations. Based upon a total purchase price of US$434.5 million (subject to a customary closing working capital adjustment and other adjustments), Arctic Glacier's existing secured lenders will be paid in full on closing and Arctic Glacier expects that the net proceeds of the sale will be sufficient to pay all of its remaining known creditors and may be sufficient to permit a distribution to its unitholders after all creditor claims have been proven and satisfied pursuant to a court-ordered claims process. The timing and amount of any distributions to creditors and unitholders cannot be determined at this time. About Arctic Glacier Winnipeg, Canada-based Arctic Glacier Inc., et al., manufacture packaged ice for distribution in Canada and the United States. On Feb. 22, 2012 Arctic Glacier Income Fund, together with its subsidiaries, initiated proceedings in the Manitoba Court of Queens Bench seeking a court supervised recapitalization under the Companies' Creditors Arrangement Act. Concurrently, 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. ARCTIC GLACIER: Moody's Assigns 'B2' Corp. Family Rating -------------------------------------------------------- Moody's Investors Service assigned a B2 corporate family rating and probability of default rating to Arctic Glacier U.S.A., Inc. Moody's also assigned B1 ratings to Arctic Glacier's proposed senior secured credit facilities, consisting of a $25 million revolving credit facility and $200 million term loan. The ratings outlook is stable. This is a first time rating for the company. Earlier this year, Arctic Glacier Income Fund filed for bankruptcy in both Canada and the U.S. In June 2012, Arctic Glacier Income Fund announced that it entered into a binding agreement to sell substantially all of its business and assets to an affiliate of H.I.G. Capital ("the sponsor"). As part of the transaction, the sponsor plans to form a new entity ("the purchaser") that will purchase substantially all of Arctic Glacier Income Fund's assets. The obligor under the credit facilities, Arctic Glacier U.S.A., Inc., is an indirect subsidiary of the purchaser and will have an ownership interest in substantially all of the U.S. subsidiaries. The transaction, which is expected to close by July 31, 2012, will be funded with proceeds from the proposed revolving credit facility and term loan combined with an unsecured mezzanine loan (unrated) and a common equity contribution from the sponsor. Ratings assigned: Corporate family rating at B2 Probability of default rating at B2 Proposed $25 million senior secured revolving credit facility due 2017 at B1 (LGD3, 34%) Proposed $200 million senior secured term loan due 2018 at B1 (LGD3, 34%) Rating Rationale Arctic Glacier's B2 corporate family rating reflects its high initial pro forma leverage in excess of 6.0 times (Moody's adjusted) and Moody's expectation that leverage will decline below 5.5 times over the next 12 to 18 months driven by debt repayments, modest revenue growth and cost saving initiatives.. The rating also considers modest pro forma coverage with EBIT to interest in the range of 1.4 to 1.5 times. The rating is also restrained by the company's modest scale with revenues less than $250 million, exposure to weather and regional economic conditions, and an expected ramp-up in acquisition activity as it seeks to expand its presence in certain regions. The rating derives support from the company's business position as the second largest manufacturer and distributor of ice in the U.S. and first in the smaller Canadian market, one of the few players of scale in a highly fragmented industry, the relative diversity of the customer base, the potential benefits associated with its planned cost reduction initiatives, and the material equity contribution by the sponsors. The acquisition is structured as an asset purchase and the non- operating liabilities of the bankrupt entity are not being assumed by the acquirer. The stable outlook reflects Moody's expectation that Arctic Glacier will organically grow its volumes and execute on its cost reduction initiatives such that profitability levels improve. The outlook also reflects Moody's expectation for significant near term debt reduction as seasonal inflows of cash are applied to the revolving credit facility and term loan. The ratings could be downgraded if soft consumer spending, unfavorable weather conditions, or an increase in competitive activity leads to a contraction in pricing or product volumes such that debt to EBITDA is sustained above 6.0 times or EBIT to interest falls below 1.2 times. If annual free cash flow is negative or if acquisition spending exceeds expectation, the ratings could also be pressured. Moody's does not expect near-term positive ratings pressure given Arctic Glacier's small scale and high initial pro forma leverage. However, to the extent the company demonstrates sustained revenue and earnings growth and reduces debt through internal cash flow such that debt to EBITDA is sustained below 4.0 times and EBIT to interest exceeds 2.0 times, the ratings could be upgraded. The ratings are subject to the conclusion of the transactions, as proposed, and Moody's review of final documentation. Additional information can be found in the Arctic Glacier Credit Opinion published on Moodys.com. The principal methodology used in rating Arctic Glacier was the Global Packaged Goods Industry Industry Methodology published in July 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Arctic Glacier is a manufacturer, marketer, and distributor of packaged ice products in the U.S. and Canada. The company reported revenues of $240 million for the twelve months ended March 31, 2012. ARCTIC GLACIER: S&P Assigns 'B-' Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' preliminary long-term corporate credit rating to newly formed Delaware-based Arctic Glacier Holdings, Inc., an affiliate of Miami-based H.I.G. Capital. The outlook is stable. "We assigned a preliminary 'B' issue-level rating (one notch above the corporate credit rating on the company) to Arctic Glacier's proposed US$25 million senior secured revolving credit facility due 2017 and US$200 million senior secured term loan due 2018. The recovery rating is '2', indicating our expectation of substantial (70%-90%) recovery for creditors in the event of default," S&P said. "The corporate credit rating and issue-level ratings are subject to the completion of the acquisition in a timely manner and closing of the proposed financing in line with our expectations," S&P said. "The ratings on Arctic Glacier reflect Standard & Poor's view of the company's 'vulnerable' business risk profile and 'highly leveraged' financial risk profile. 'We base our business risk assessment on the company's narrow product portfolio, seasonality of demand, and participation in the challenging packaged ice industry, which is highly competitive, commoditized, fragmented, and susceptible to unfavorable weather and economic conditions," said Standard & Poor's credit analyst Lori Harris. "Partially offsetting these factors is Arctic Glacier's solid market position in North America as the second-largest player in the fragmented industry. We base our financial risk assessment on an aggressive financial policy, including a highly leveraged capital structure." "The company plans to use the proposed debt proceeds, along with mezzanine debt and an equity injection, to finance the acquisition of substantially all of the assets of the fund and its subsidiaries. The fund filed for creditor protection in Canada (under the Companies' Creditors Arrangement Act) and in the U.S. (under Chapter 15) in February 2012," S&P said. "The stable outlook reflects Standard & Poor's belief that Arctic Glacier's performance will meet our expectations in the next year, including maintaining its solid market position and generating positive free cash flow. We could raise the ratings if Arctic Glacier demonstrates sustainable improvement in its operating performance while strengthening its credit metrics, resulting in leverage remaining below 4.5x on a sustainable basis and good covenant cushion. We could lower the ratings if there is deterioration in the company's operations or negative free cash flow or less than a 15% EBITDA cushion within the financial covenants," S&P said. "Standard & Poor's has provided the foregoing independent credit opinions based on the information that has been provided. In offering such opinions, Standard & Poor's is independent from the engaging company and any parties to the bankruptcy proceeding. We do not advise, advocate, or support any particular plan of reorganization and a rating opinion does not indicate whether the plan is fair, reasonable, or appropriate or likely to be confirmed as the basis for the company's emergence from bankruptcy," S&P said. "The issue ratings provided by Standard & Poor's to companies prior to exiting bankruptcy are preliminary, and subsequent developments or changes to the plan or information considered by us in our analysis could result in final conclusions that differ from the preliminary ratings. Issuer ratings provided by Standard & Poor's to companies prior to exiting bankruptcy are our current opinion of the ratings that we expect to assign at a future date and subsequent developments or changes to the plan or information considered by us in our analysis could result in rating conclusions that differ from the expected ratings. Rating opinions provided by Standard & Poor's to a company in bankruptcy are assumed to be used in accordance with all applicable laws," S&P said. BEDFORD LOFTS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: The Bedford Lofts, LLC 331 Rutledge Street, #208 Brooklyn, NY 11211 Bankruptcy Case No.: 12-44672 Chapter 11 Petition Date: June 26, 2012 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Carla E. Craig Debtor's Counsel: Leo Fox, Esq. 630 Third Avenue, 18th Floor New York, NY 10017 Tel: (212) 867-9595 Fax: (212) 949-1857 E-mail: leofox1947@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Max Stark, owner. Affiliates that filed separate Chapter 11 petitions: Entity Case No. Petition Date ------ -------- ------------- Southside House, LLC 09-43576 04/30/09 84 George, LLC 10-44253 05/10/10 BENT CREEK: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Bent Creek Partners, LLC 700 South Avalon Street West Memphis, AR 72301 Bankruptcy Case No.: 12-13749 Chapter 11 Petition Date: June 27, 2012 Court: United States Bankruptcy Court Eastern District of Arkansas (Jonesboro) Debtor's Counsel: Ben F. Arnold, Esq. 111 Center Street, Suite 1200 Little Rock, AR 72201 Tel: (501) 374-2225 Fax: (501) 374-3390 E-mail: ben@bfalaw.net Scheduled Assets: $1,455,104 Scheduled Liabilities: $1,746,959 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/areb12-13749.pdf The petition was signed by Brian Baniqued, member and co-manager. BEST UNION: Files for Chapter 11 in Los Angeles ----------------------------------------------- West Covina, California-based The Best Union LLC filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-32503) in Los Angeles on June 28, 2012. The Debtor disclosed $11.43 million in assets and $9.195 million in liabilities. The Debtor owns properties in West Covina and Fresno, California. Bank of China and SPCP Group V, LLC, have secured claims of $5.888 million and $2.255 million, respectively. The West Covina property generated income of $752,000 last year. The Fresno property generated income of $251,000 in 2011. Copies of the schedules and the statement of financial affairs filed together with the petition are available at: http://bankrupt.com/misc/cacb2-12-bk-32503.pdf BILLMYPARENTS INC: Nets $3.4 Million from Sale of Shares -------------------------------------------------------- BillMyParents, Inc., on June 20, 2012, entered into subscription agreements with 29 accredited investors pursuant to which the Company issued 3,815 shares of the Company's Series B Preferred Stock, five year warrants to purchase up to an additional 6,250,000 shares of the Company's common stock at an exercise price of $0.50 per share and five year warrants to purchase up to an additional 796,875 shares of the Company's common stock at an exercise price of $0.60 per share, in exchange for gross proceeds totaling $3,815,000. This financing transaction resulted in net proceeds to the Company of $3.4 million after deducting fees and expenses. The placement agent, a FINRA registered broker-dealer, in connection with the financing received a cash fee totaling $381,500 and will receive warrants to purchase up to 953,750 shares of common stock at an exercise price of $0.60 per share as compensation. A copy of the Form 8-K is available for free at: http://is.gd/MoAljc About BillMyParents San Diego, Calif.-based BillMyParents, Inc., markets prepaid cards with special features aimed at young people and their parents. BMP is designed to enable parents and young people to collaborate toward the goal of responsible spending. For Fiscal 2011, the Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. BDO USA, LLP, in La Jolla, California, noted that the Company has incurred net losses since inception and has an accumulated deficit and stockholders' deficiency at Sept. 30, 2011. The Company reported a net loss of $14.2 million for the fiscal year ended Sept. 30, 2011, compared with a net loss of $6.9 million for the fiscal year ended Sept. 30, 2010. The Company's balance sheet at March 31, 2012, showed $1.19 million in total assets, $1.18 million in total liabilities, all current, and $6,797 in total stockholders' equity. BLACK PRESS: Moody's Lowers CFR/PDR to 'B2'; Outlook Negative ------------------------------------------------------------- Moody's Investors Service downgraded Black Press Ltd's (Black Press) Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to B2 from B1. The C$110 million Series A Unsecured Subordinated Notes was also downgraded to Caa1 from B3. The senior secured credit facility rating was affirmed at Ba3. Black Press' ratings were downgraded due to weaker than expected results and the upcoming maturity of its senior secured credit facility in August 2013. The outlook was changed to negative from stable. A summary of the rating actions are listed below: Issuer: Black Press Ltd. Corporate Family Rating, Downgraded to B2 from B1 Probability of Default Rating, Downgraded to B2 from B1 C$110 million Series A Unsecured Subordinated Notes due 2/4/14, Downgraded to Caa1 (LGD-5, 77%) from B3 (LGD-5, 83%) US$90.1 million Senior Secured Term Loan B1 due 8/2/2013, Affirmed at Ba3 (LGD-2, 23% updated from LGD-3, 30%) US$54.7 million Senior Secured Term Loan B2 due 8/2/2013, Affirmed at Ba3 (LGD-2, 23% updated from LGD-3, 30%) US$13.8 million Term Loan A1 due 8/2/2013, Affirmed at Ba3 (LGD-2, 23% updated from LGD-3, 30%) Rating Rationale The B2 CFR considers Black Press' high pro-forma leverage of approximately 4.8x (including Moody's standard adjustments) at fiscal yearend 2012 and the August 2013 maturity of its senior secured credit facilities. Weaker than anticipated results, primarily at its American newspapers and its commercial printing operations weighed on the ratings. Its western Canadian newspapers, which comprise approximately 80% of EBITDA, performed better but were also below Moody's expectations driven by negative secular trends in the industry and challenging economic conditions. Unfunded pension liabilities also increased and contributed to higher leverage levels in FY 2012. Black Press is exposed to currency movements as most of its earnings are in CAD$, while the majority of its debt is denominated in US$ which is largely unhedged. The company benefits from good free cash flow, partly driven by low capex requirements, that has been used to paydown debt. While it is expected to continue to generate free cash flow that will lead to further debt repayment, it operates without the benefit of a revolver which could provide additional liquidity if needed. Despite lower revenue, the company has been disciplined about reducing costs which has helped the company maintain EBITDA margins above 20%. The credit also receives support from its experienced management team and ownership. Additionally, assets outside the restricted group could potentially be contributed to Black Press' lender group that would modestly reduce leverage levels and diversify its asset base. The company derives most of its revenue from advertising sales which makes the company especially sensitive to economic conditions. Despite generating good free cash flow, Moody's considers its liquidity position to be weak given its upcoming debt maturities in August 2013 and February 2014, as well as its lack of a revolver facility. Capital expenditures are expected to be less than 2% of revenue which should allow for continued free cash flow generation. Its Hawaiian operation which is an unrestricted subsidiary is anticipated to be free cash flow positive and is not expected to be a drain on cash flow as it had been in the past. Black Press is subject to financial covenants and has less than a 10% cushion of compliance with its total leverage test, although the company's focus on debt repayment should help them remain in compliance. The Negative outlook reflects the company's upcoming debt maturities and the challenging economic environment and trends facing the industry. The outlook is also reflective of potentially higher interest expenses from a refinancing that would diminish its existing free cash flow levels. Moody's expects modest declines in revenue going forward that will pressure EBITDA margins which will necessitate a continued focus on cost cutting. The credit could receive support from combining currently unrestricted subsidiaries into the restricted subsidiary group. Moody's would consider changing the outlook to stable if the company is able to refinance its debt maturities without materially impairing its free cash flow and achieve stable organic revenue and EBITDA levels on a sustained basis. A continued commitment to debt repayment would also be necessary. Black Press would experience downward pressure if it is unable to refinance its upcoming debt maturities in a timely manner or if operations deteriorated so that debt-to-EBITDA was to exceed 5.5x (including Moody's standard adjustments) due to deterioration in revenue and earnings. The principal methodology used in rating Black Press was the Global Publishing 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. Black Press Ltd.'s restricted group ("Black Press") is a privately-held community newspaper and printing company headquartered in British Columbia, Canada. The company publishes more than 150 daily and weekly newspapers in British Columbia, Alberta, Washington and Ohio. The Hawaii operations are not part of the rated entity. Black Press Ltd. is 80% owned by the David Black family and 20% by Torstar Corporation. BLACKBELT ACADEMIES: Case Summary & 9 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Blackbelt Academies, LLC fka Blackbelt Academies, Inc. dba Karate America 1400 Millcoe Road Jacksonville, FL 32225 Bankruptcy Case No.: 12-04234 Chapter 11 Petition Date: June 27, 2012 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Judge: Jerry A. Funk Debtor's Counsel: Taylor J. King, Esq. Bryan K. Mickler, Esq. LAW OFFICES OF MICKLER & MICKLER 5452 Arlington Expressway Jacksonville, FL 32211 Tel: (904) 725-0822 Fax: (904) 725-0855 E-mail: court@planlaw.com Scheduled Assets: $1,500 Scheduled Liabilities: $4,084,643 A copy of the Company's list of its nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb12-04234.pdf The petition was signed by William G. Clark, II, managing member. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Success Systems, LLC 12-04233 06/26/12 BLACK DAVIS: Court Dismisses Two Counts in Suit Against Frontier ---------------------------------------------------------------- Frontier Insurance Company in Rehabilitation convinced a bankruptcy judge to dismiss two counts in the lawsuit, BLACK, DAVIS and SHUE AGENCY, INC., Plaintiff, v. FRONTIER INSURANCE COMPANY IN REHABILITATION, Defendant, Adv. Proc. No.:1-11-ap- 00160MDF (Bankr. M.D. Pa.). Black Davis is an insurance agency located in Harrisburg, Pennsylvania. Prior to 2001, Frontier was an insurance carrier headquartered in New York. Frontier and Black Davis executed an insurance agency agreement in October 2000. Under the terms of the Agency Agreement, Frontier was to underwrite workers' compensation insurance, and Black Davis was to act as its agent by marketing and servicing policies for professional employer organizations. The Agency Agreement also involved the creation of an offshore insurance provider, formed by Black Davis' principals and a third party, to reinsure the policies issued by Frontier. Frontier filed two proofs of claim in Black Davis' bankruptcy case. The Debtor filed counterclaims against Frontier. The Debtor and its insurer, Westport Insurance Corp., objected to the claims. The dispute was converted into an adversary proceeding. In its lawsuit, Black Davis alleges Frontier had breached its fiduciary duty to the Debtor, and made certain negligent or intentional misrepresentations upon which the Debtor relied. A copy of Chief Bankruptcy Judge Mary D. France's June 27, 2012 Opinion is available at http://is.gd/wWB0wgfrom Leagle.com. Black, Davis and Shue Agency, Inc., filed for Chapter 11 bankruptcy (Bankr. M.D. Pa. Case No. 06-00051) in 2006. BOWMAN COMPANY: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: The Bowman Company dba Piggly Wiggly 509 West Marion Avenue Crystal Springs, MS 39059 Bankruptcy Case No.: 12-02052 Chapter 11 Petition Date: June 25, 2012 Court: U.S. Bankruptcy Court Southern District of Mississippi (Jackson Divisional Office) Judge: Neil P. Olack Debtor's Counsel: J. Walter Newman, IV, Esq. NEWMAN & NEWMAN 248 East Capitol Street, Suite 539 Jackson, MS 39201 Tel: (601) 948-0586 Fax: (601) 948-0588 E-mail: wnewman95@msn.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Kenneth Bowman, Jr., vice president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Piggly Wiggly of Crystal Springs, Inc. 12-02054 06/25/12 BUD'S CAR WASH: Claimants' Response Deadline Moved to July 17 ------------------------------------------------------------- In the jointly administered bankruptcy cases of Bud's Car Wash Mountain Road, LLC, and AMR, Inc., Bankruptcy Judge David E. Rice signed off on a Stipulation and Order extending the time within which Mark Einstein, Equity Trust Company, Estate of Howard Alan Diener, Vadim Fishkin, H.A.D., Inc. and Art Scher must respond to the Debtors' First Omnibus Objection to Certain Claims. The parties are currently engaged in the drafting of a settlement agreement that will resolve all of the objections to the claims filed by the Claimants raised in the Debtors' First Omnibus Objection. The deadline for the Claimants to file a response to the Objection is July 2. The parties have agreed to move that date to July 17. A copy of the Stipulation approved June 28 is available at http://is.gd/QnHkyifrom Leagle.com. Based in Cockeysville, Maryland, Bud's Car Wash Mountain Road, LLC, and AMR, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Md. Case Nos. 10-26052 and 10-26054) on July 16, 2010. Bud's Car Wash scheduled assets of $45,723 and debts of $4,629,977. AMR Inc. scheduled assets of $3,673,296 and debts of $4,640,090. James Greenan, Esq., at McNamee, Hosea, et al., serves as the Debtors' counsel. The petition was signed by Charles W. Irwin, Jr., managing member. BUD'S CAR WASH: Diener Estate Has More Time to Challenge Suit ------------------------------------------------------------- Bankruptcy Judge David E. Rice approved a stipulation and order extending to July 17 the deadline for the defendants to file a response in the lawsuit, CHARLES W. IRWIN, JR. and JUDITH G. IRWIN, Plaintiffs, v. THE ESTATE OF HOWARD ALAN DIENER, et al., Defendants, Adv. Proc. No. 12-00367 (Bankr. D. Md.). The parties are currently engaged in the drafting of a settlement agreement that will resolve all of the issues raised in the adversary proceeding. The original deadline for the defendants to file an answer or otherwise respond to the complaint was June 28. A copy of the Stipulation approved June 28 is available at http://is.gd/CTP29Wfrom Leagle.com. James A. Vidmar, Esq. -- jvidmar@yvslaw.com -- at Yumkas, Vidmar & Sweeney, LLC, in Annapolis, Maryland, represents the Plaintiffs. James C. Olson, Esq., in Owings Mills, Maryland, argues for the Defendants. A separate stipulation also extended to July 17 the Diener estate's deadline to respond to the lawsuit, AMR, INC, Plaintiff, v. THE ESTATE OF HOWARD ALAN DIENER, et al., Defendants, Adv. Proc. No. 12-00375 (Bankr. D. Md.). The original response deadline to the complaint is July 5. A copy of the stipulation, also approved June 28, is available at http://is.gd/qVgg30from Leagle.com. Based in Cockeysville, Maryland, Bud's Car Wash Mountain Road, LLC, and AMR, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Md. Case Nos. 10-26052 and 10-26054) on July 16, 2010. Bud's Car Wash scheduled assets of $45,723 and debts of $4,629,977. AMR Inc. scheduled assets of $3,673,296 and debts of $4,640,090. James Greenan, Esq., at McNamee, Hosea, et al., serves as the Debtors' counsel. The petition was signed by Charles W. Irwin, Jr., managing member. BUFFETS INC: Confirms Second Chapter 11 Plan -------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Buffets Inc. won approval of a Chapter 11 reorganization plan for a second time. The bankruptcy judge in Delaware signed a confirmation order on June 27. All voting classes were in favor of the plan. As reported by the Troubled Company Reporter, Buffets Inc. in April 2012 filed an amended bankruptcy exit plan that proposes to pay $4 million to a pool of unsecured creditors who are owed more than $44 million. Unsecured creditors are expected to recover 6% to 9% of their claims. Previously, unsecured creditors were to receive nothing. The plan will also create a trust for unsecured creditors that will pursue lawsuits. First-lien lenders are receiving the new stock in return for $251.8 million owing on the existing first-lien facility and $34.8 million in outstanding letters of credit. About Buffets Inc. Buffets Inc., the nation's largest steak-buffet restaurant company, operates 494 restaurants in 38 states, comprised of 483 steak-buffet restaurants and 11 Tahoe Joe's Famous Steakhouse(R) restaurants, and franchises 3 steak-buffet restaurants in two states. The restaurants are principally operated under the Old Country Buffet(R), HomeTown(R) Buffet, Ryan's(R) and Fire Mountain(R) brands. Buffets employs 28,000 team members and serves 140 million customers annually. Buffets Inc. and all of its subsidiaries filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-10237) on Jan. 18, 2012, after it reached a restructuring support agreement with 83% of its lenders to eliminate virtually all of the Company's roughly $245 million of outstanding debt. In its schedules Buffets Inc. disclosed $384,810,974 in assets and $353,498,404 in liabilities. The Debtors are seeking to reject leases for 83 underperforming restaurants. Buffets had 626 restaurants when it began its prior bankruptcy case (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). It emerged from bankruptcy in April 2009. Higher gasoline and energy costs, along with a decline in guest count, have hampered the Debtors' ability to service their long- term debt and caused a liquidity strain, forcing the Company to return to Chapter 11 bankruptcy. In the new Chapter 11 case, Buffets Inc.'s legal advisors are Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young, Conaway, Stargatt & Taylor, LLP. The Company's financial advisor is Moelis, Inc. Epiq Bankruptcy Solutions LLC serves as claims, noticing and balloting agent. An ad hoc committee of secured lenders is represented by Willkie Far & Gallagher LLP and Blank Rome LLP as counsel and Conway, Del Genio, Gries & Co. as financial advisors. Credit Suisse, as DIP Agent and Prepetition First Lien Agent, is represented by Skadden Arps Slate Meagher & Flom as counsel. The U.S. Trustee has appointed a 5-member Official Committee of Unsecured Creditors in the Debtors' cases. In March 2012, Buffets Inc. received court approval for an incentive bonus program that may pay as much as $2.3 million to executives if cash flow targets are met. There was an April 30 hearing schedule on another program to pay bonuses for a successful sale of the business that could cost $2.7 million. CAESARS ENTERTAINMENT: Deregisters 4.5MM Shares of Common Stock --------------------------------------------------------------- Caesars Entertainment Corporation filed a Post-Effective Amendment No. 1 to Form S-8 Registration Statement to deregister securities originally registered by the Company pursuant to its Registration Statement on Form S-8 filed with the Securities and Exchange Commission on Dec. 13, 2010, thereby registered for offer or sale pursuant to the Caesars Entertainment Corporation Management Equity Incentive Plan. A total of 4,566,919 shares of common stock were initially registered for issuance under the Registration Statement. On June 27, 2012, the Company filed a Registration Statement on Form S-8 to register shares of common stock underlying options granted under the Plan. A copy of the Form S-8 is available for free at http://is.gd/5AMloM About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. --http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. The Company reported a net loss of $666.70 million in 2011, and a net loss of $823.30 million in 2010. The Company's balance sheet at March 31, 2012, showed $28.40 billion in total assets, $27.56 billion in total liabilities and $849.20 million in total equity. * * * As reported by the TCR on March 28, 2012, Moody's Investors Service upgraded Caesars Entertainment Corp's Corporate Family Rating (CFR) and Probability of Default Rating both to Caa1 from Caa2. The upgrade of Caesars' ratings reflects very good liquidity, an improving operating outlook for gaming in a number of the company's largest markets that is expected to drive earnings growth, the completion of a bank amendment that resulted in the extension of debt maturities to 2018 from 2015, and the public listing of the company's equity that increases financial flexibility by providing it with another potential source of capital. The upgrade of the SGL rating reflects minimal debt maturities over the next few years, significant cash balances (approximately $900 million at December 31, 2011) and revolver availability that will be more than sufficient to fund the company's cash interest and capital spending needs. CATALYST PAPER: BC Court Approves Reorganization Plan ----------------------------------------------------- Catalyst Paper Corporation received approval for its reorganization plan from the Supreme Court of British Columbia. The company's second amended plan under the Companies' Creditors Arrangement Act received 99% support from creditors at meetings held earlier. Court approval of the reorganization plan comes only five months following Catalyst Paper's entry into creditor protection on Jan. 31, 2012. A confirmation hearing under the Chapter 15 process of the U.S. Bankruptcy Court for the District of Delaware is expected to occur in mid-July. Approval from both courts is required before the company can complete its reorganization. "Today's court order is a major milestone in our drive to emerge from creditor protection efficiently and quickly," said President and Chief Executive Officer Kevin J. Clarke in a June 28 statement. "We said from the outset that our objective was to put our company on stronger financial footing for the future and we are proceeding at a rapid pace to do just that. We're in discussion now with lenders to secure the necessary exit financing and expect to complete the reorganization process in the near term." The Court also authorized and directed Catalyst to take all actions necessary to implement the Amended Plan and Catalyst is working towards implementation. Implementation of the Amended Plan is subject to a number of conditions, including the company obtaining an order of the US Court recognizing that the Sanction Order is in full force and effect in the United States and that Catalyst Paper 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 the conditions must be satisfied within 45 days unless such condition is waived or the date for fulfillment is extended in accordance with the provisions of the Amended Plan. 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. CCGI HOLDING: S&P Withdraws B- Corp. Credit Rating on Repaid Debt ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on CCGI Holdings Corp., including its 'B-' corporate credit rating and 'B- ' senior secured issue-level rating. As part of a recent refinancing, CCGI has repaid its rated debt. CHARLESTON & 28TH: Case Summary & 11 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Charleston & 28th LLC c/o J. Dapper, Manager 985 White Drive Las Vegas, NV 89119 Bankruptcy Case No.: 12-17409 Chapter 11 Petition Date: June 22, 2012 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Kirk D. Homeyer, Esq. GORDON SILVER 3960 Howard Hughes Parkway, 9th Floor Las Vegas, NV 89169 Tel: (702) 796-5555 E-mail: bankruptcynotices@gordonsilver.com - and ? Thomas H. Fell, Esq. 3960 Howard Hughes Parkway, 9th Floor Las Vegas, NV 89169 Tel: (702) 796-5555 Fax: (702) 369-2666 E-mail: tfell@gordonsilver.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its 11 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nvb12-17409.pdf The petition was signed by J. Dapper, manager of Ten 15 Development, LLC, manager. CHEYENNE HOTEL: Aug. 8 Set as Government Claims Bar Date -------------------------------------------------------- The Bankruptcy Court granted the motion of Cheyenne Hotel Investments LLC to set August 29, 2012, as the deadline for government entities to file proofs of claim. Cheyenne Hotel Investments, LLC, owns a property consisting of a 104 room hotel located in Colorado Springs, and known as Homewood Suites by Hilton. The company filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No. 11-25379) on June 28, 2011. The Debtor disclosed assets of $12,912,702 and liabilities of $8,074,325 as of the Petition Date. Thomas F. Quinn, P.C., in Denver, represents the Debtor as counsel. John H. Bernstein, Esq., at Kutak Rock LLP, in Denver, represents Wells Fargo Bank as counsel. CHEYENNE HOTEL: Henslee Halle and Assoc. Approved as Accountants ---------------------------------------------------------------- Cheyenne Hotel Investments LLC sought and obtained approval from the U.S. Bankruptcy Court to employ Henslee, Halle and Associates, P.C., under a general retainer to provide accounting services to the Debtor. The firm will, among other things, provide these services: (a) process and record financial transactions on an as needed basis; (b) perform monthly reconciliations of bank accounts and other subsidiary ledgers to the general ledger; and (c) prepare general ledger and trial balance monthly or as otherwise requested. The Debtor attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Cheyenne Hotel Cheyenne Hotel Investments, LLC, owns a property consisting of a 104 room hotel located in Colorado Springs, and known as Homewood Suites by Hilton. The company filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No. 11-25379) on June 28, 2011. The Debtor disclosed assets of $12,912,702 and liabilities of $8,074,325 as of the Petition Date. Thomas F. Quinn, P.C., in Denver, represents the Debtor as counsel. John H. Bernstein, Esq., at Kutak Rock LLP, in Denver, represents Wells Fargo Bank as counsel. CINE PHOTO: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Cine Photo Tech, Inc. 1240 Oakleigh Drive Atlanta, GA 30344-1823 Bankruptcy Case No.: 12-65689 Chapter 11 Petition Date: June 22, 2012 Court: U.S. Bankruptcy Court Northern District of Georgia (Atlanta) Judge: C. Ray Mullins Debtor's Counsel: Edward F. Danowitz, Jr., Esq. DANOWITZ & ASSOCIATES, P.C. 300 Galleria Parkway, NW, Suite 960 Atlanta, GA 30339 Tel: (770) 933-0960 E-mail: edanowitz@danowitzlegal.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 with the petition is available for free at: http://bankrupt.com/misc/ganb12-65689.pdf The petition was signed by Brian McGraw, president. CNA FINANCIAL: Moody's Upgrades Provisional Rating From (P)Ba1 -------------------------------------------------------------- Moody's Investors Service has upgraded the debt ratings of CNA Financial Corporation (NYSE: CNA; senior unsecured to Baa2 from Baa3) with a stable outlook. In the same action, Moody's has affirmed the A3 insurance financial strength (IFS) ratings for Continental Casualty Company (CCC) and other rated members of its property/casualty insurance intercompany pool ("CNA Insurance Companies") while revising the outlook to positive from stable. According to Moody's, the affirmation of the CNA Insurance Companies' A3 IFS ratings reflects CNA's leadership position in many major commercial and specialty property & casualty insurance lines in the US, its consistently profitable specialty lines segment, a sound liquidity position and good risk-adjusted capitalization, and the historically supportive parentage of Loews Corporation. These strengths remain tempered by earnings weakness and persistent high combined underwriting ratios in commercial lines, by potential claim reserve volatility associated with commercial casualty lines of business, and to a lesser degree by exposures to natural and manmade catastrophes, as well as interest rate sensitivity and other risks inherent in CNA's run-off long- duration pension and long term care operations. The shift to a positive outlook, however, reflects notable sustained improvements in the group's credit profile in recent years, particularly with respect to asset quality and profitability as well as improved stability in its risk-adjusted capital adequacy profile and enhanced strategic focus. Moody's noted that CNA significantly de-risked its investment portfolio in recent years, and has demonstrated consistent profitability in its specialty lines segment while continuing to make steady, if gradual, improvements in its commercial lines operations, which remain challenged by weak underwriting profitability and elevated combined ratios. Moody's added that risk management has become a core discipline, and one that has enabled the company to identify areas of risk concentrations and capital inefficiencies, and support strategic decisions with respect to its core operations, as well as the divestiture of non-strategic segments or subsidiaries. The upgrade of CNA Financial's debt ratings considers both the above-noted positive developments at CNA's core insurance operations, as well as the upgrade of Loews' Corporation's senior debt to A2, from A3, and Moody's view that creditors of CNA Financial benefit not only from the improving underlying strength of the group's insurance operations, but also incrementally from the implied support of a higher-rated Loews Corporation, through its internal liquidity resources, as well as its diversified sources of cash flow. The stable outlook for CNA Financial's debt ratings reflects Moody's view that, should the positive rating outlook on the group's insurance A3 financial strength ratings ultimately resolve in a rating upgrade, CNA Financial's senior debt rating would likely remain stable, consistent with Moody's standard 3-notch spread between insurance subsidiary financial strength and holding company senior unsecured debt ratings. "CNA has made strides in strengthening its profitability, enhancing its actuarial and reserving discipline, de-risking its investment portfolio, stabilizing its risk-adjusted capitalization, and improving the underwriting performance of its commercial lines segment," commented Moody's senior credit officer Alan Murray. "We view the enterprise as being well positioned to build on its property-casualty insurance franchise going forward, including sustaining its long-standing leadership is specialty lines (e.g. professional liability and surety) and in re-focusing and improving its commercial insurance segment, which nevertheless continues to face significant headwinds." Moody's noted that a combination of the following factors could lead to an upgrade: 1) sustained improvement in core operating earnings, particularly in the commercial lines segment; 2) adjusted financial leverage below 25% on a sustained basis; 3) risk-adjusted capitalization on par with more highly-rated industry peers; 4) an upgrade of Loews Corporation (senior debt currently at A2); and 5) earnings coverage of interest on fixed maturities above 6x. Conversely, factors that could lead to a return to a stable outlook include the following: 1) a non- temporary decline in shareholders' equity of 10% or more (with adjustments for variability in unrealized gains/losses), absent further capital support from Loews Corporation or other outside investors; 2) sustained adjusted financial leverage in excess of 30%; 3) a downgrade of Loews Corporation to the Baa level or below, and/or an indication of diminished support of CNA by Loews; 4) earnings coverage of interest on debt and preferred dividends below 4x; or 5) annual adverse reserve development in excess of 5% of total reserves. The following ratings have been upgraded, with a stable outlook: CNA Financial Corporation: senior unsecured debt to Baa2 from Baa3; provisional rating for senior unsecured debt to (P)Baa2 from (P)Baa3; provisional rating for subordinated debt to (P)Baa3 from (P)Ba1; preferred stock to Ba1 (hyb) from Ba2 (hyb); provisional rating for preferred stock to (P)Ba1 from (P)Ba2; The Continental Corporation: senior unsecured debt to Baa2 from Baa3; CNA Financial Capital I, II and III: provisional rating for capital securities to (P)Baa3 from (P)Ba1. The following ratings have been affirmed and the outlook has been changed to positive from stable: American Casualty Company of Reading, Pennsylvania -- insurance financial strength at A3; Columbia Casualty Company -- insurance financial strength at A3; The Continental Casualty Company -- insurance financial strength at A3; The Continental Insurance Company of New Jersey -- insurance financial strength at A3; Continental Insurance Company -- insurance financial strength at A3; National Fire Insurance Company of Hartford -- insurance financial strength at A3; Transportation Insurance Company -- insurance financial strength at A3; Valley Forge Insurance Company -- insurance financial strength at A3. CNA Financial Corporation is engaged through its subsidiaries in commercial and specialty property and casualty insurance. For the full year 2011, CNA Financial Corporation reported net earned premiums of $6.6 billion and net income of $614 million. As of March 31, 2012, shareholders' equity was $12.0 billion. The principal methodology used in these ratings was Moody's Global Rating Methodology for Property and Casualty Insurers, published in May 2010. COLOUR CONCEPTS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Colour Concepts Inc. dba Postmaster Mailing dba 4 Printers Only dba FPO Network dba Partner Printing 6980 Sycamore Canyon Blvd Riverside, CA 92507 Bankruptcy Case No.: 12-25299 Chapter 11 Petition Date: June 27, 2012 Court: United States Bankruptcy Court Central District of California (Riverside) Judge: Mark S Wallace Debtor's Counsel: Gordon Strange, Esq. LAW OFFICES OF GORDON C STRANGE 15333 Culver Drive Suite 340-223 Irvine, CA 92604 Tel: (949) 874-7555 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 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/cacb12-25299.pdf The petition was signed by Mark Sears, president. CONFORCE INTERNATIONAL: Delays Form 10-K for Fiscal 2012 -------------------------------------------------------- Conforce International, Inc.'s annual report on Form 10-K could not be filed within the prescribed time period due to the Company and its accountants requiring additional time to prepare and review the financial statements of the Company for the year ended March 31, 2012. That delay could not be eliminated by the Company without unreasonable effort and expense. In accordance with Rule 12b-25 of the Securities Exchange Act of 1934, the Company will file its Form 10-K no later than the 15th calendar day following the prescribed due date. About Conforce International Headquartered in Concord, Ontario, Canada, Conforce International, Inc., has been in the shipping container business repairing, selling or storing containers for over 25 years. The Company has been engaged in the research and development of a polymer based composite shipping container and highway trailer flooring product. As a result, the Company has developed EKO-FLOR. The Company is now outfitting its new manufacturing facility in Peru, Indiana for the production of EKO-FLOR for the North American highway trailer market. The Company reported a net loss of $2.1 million for the fiscal year ended March 31, 2011, compared with a net loss of $729,903 for the fiscal year ended March 31, 2010. The Company's balance sheet at Dec. 31, 2011, showed US$6 million in total assets, $2.20 million in total liabilities and US$3.79 million in shareholders' equity. CONSTRUCTORA DE HATO: Required to File Plan Disclosures by Aug. 31 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Puerto Rico has ordered Constructora De Hato Rey Incorporada to file a Disclosure Statement by Aug. 31, 2012, according to a document posted in the case docket. The minutes of a hearing also disclosed that the application for employment of Debtor's counsel and accountant are approved. About Constructora De Hato Rey Incorporada Constructora De Hato Rey Incorporada filed a Chapter 11 petition (Bankr. D. P.R. Case No. 12-02876-11) in Old San Juan, Puerto Rico, on April 13, 2012. The Debtor is represented by Charles Alfred Cuprill, Esq., at Charles A. Curpill, PSC Law Office, in San Juan. The Debtor disclosed $10.8 million in assets and $6.86 million in liabilities in its schedules. The Debtor owns parcels of land in Puerto Rico with an aggregate value of $1.82 million. The Debtor has "uncollectible" receivables of $4.05 million owed by affiliates. It also has construction equipment worth $4.1 million. Secured debt only totals $2.13 million. A copy of the schedules filed with the petition is available for free at: http://bankrupt.com/misc/prb12-02876.pdf CROWN MEDIA: All 14 Director Nominees Elected --------------------------------------------- The annual meeting of stockholders of Crown Media Holdings, Inc., was held on June 27, 2012. All nominees were elected as directors, namely: (1) William J. Abbott; (2) Dwight C. Arn; (3) Robert Bloss; (4) William Cella; (5) Glenn Curtis; (6) Steve Doyal; (7) Brian E. Gardner; (8) Herbert Granath; (9) Timothy Griffith; (10) Donald Hall, Jr.; (11) Drue A. Jennings; (12) Peter A. Lund; (13) Brad R. Moore; and (14) Deanne Stedem. The chief executive officer's and other executive officers' performance-based compensation were approved. About Crown Media Studio City, Calif.-based Crown Media Holdings, Inc. (NASDAQ: CRWN) -- http://www.hallmarkchannel.com/-- owns and operates cable television channels dedicated to high quality, broad appeal, entertainment programming. The Company currently operates and distributes Hallmark Channel in both high definition (HD) and standard definition (SD) to 90 million subscribers in the U.S. Crown Media also operates a second 24-hour linear channel, Hallmark Movie Channel, available in both HD and SD, which focuses on family-friendly movies with a mix of classic theatrical films, presentations from the acclaimed Hallmark Hall of Fame library, original Hallmark Channel movies and special events. The Company's balance sheet at March 31, 2012, showed $939.05 million in total assets, $688.28 million in total liabilities and $250.76 million in total stockholders' equity. Bankruptcy Warning According to the Form 10-K for the year ended Dec. 31, 2011, the Company's senior secured credit facilities and the indenture governing the Notes contain a number of covenants that impose significant operating and financial restrictions on the Company, including restrictions on its ability to, among other things, incur additional debt or issue certain preferred shares, pay dividends on or make distributions in respect of the Company's capital stock or make other restricted payments, and make certain payments on debt that is subordinated or secured on a junior basis. Any of these restrictions could limit the Company's ability to plan for or react to market conditions and could otherwise restrict corporate activities. Any failure to comply with these covenants could result in a default under the Company's senior secured credit facilities and the indenture governing the Notes. Upon a default, unless waived, the lenders under the Company's senior secured credit facilities could elect to terminate their commitments, cease making further loans, foreclose on the Company's assets pledged to those lenders to secure its obligations under the senior secured credit facilities and force the Company into bankruptcy or liquidation. * * * As reported by the TCR on May 28, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Studio City, Calif.-based cable network company Crown Media Holdings Inc. to 'B+' from 'B'. "The upgrade reflects Crown Media's recent operating performance, which achieved higher EBITDA and lower leverage than our expectations," said Standard & Poor's credit analyst Deborah Kinzer. CRYSTALLEX INTERNATIONAL: Draws Down Add'l $8MM Under DIP Pact ---------------------------------------------------------------- Crystallex International Corporation has drawn down an additional amount of US$8 million (for an aggregate total of US$21 million) under the terms of the credit agreement governing the Company's debtor-in-possession US$36 million term loan facility provided by an entity managed by Tenor Capital Management Company LP. These funds will be used to fund the Company's operations, including the prosecution of its arbitration claim against the government of Venezuela. As disclosed on April 23, 2012, as a result of such draw down, the Company has provided to the Lender, in accordance with the provisions of the Credit Agreement and a conversion and voting agreement, additional compensation which is dependent on the amount of the net proceeds realized from an award or settlement in respect of the Company's arbitration with the government of Venezuela and which, at the option of the Lender, could be converted into up to 35% of the equity of the Company. In addition, the Credit Agreement requires certain changes to the governance of Crystallex. The Lender has been provided with the right to appoint two of the five directors of the Company, and as a result Mr. Michael Brown and Mr. Johan C. van't Hof, each of whom voted in favor of the Credit Agreement, have voluntarily resigned from the Board in order to enable Mr. Robin Shah and Mr. David Kay, the nominees of the Lender, to join the Board. Mr. Shah founded Tenor Capital when the firm was spun off from Putnam Lovell NBF (PLNBF) in July 2004. Mr. Shah joined PLNBF in July 2003, from JP Morgan, to establish a proprietary trading relative value convertible arbitrage effort. At J.P. Morgan, Mr. Shah was a senior trader in the proprietary Convertibles and Relative Value Group. Prior to joining the Convertibles and Relative Value Group, Mr. Shah was a member of the Equity Derivatives Research team, the Fixed Income Derivatives Trading team, and the Fixed Income proprietary trading group at J.P. Morgan. Mr. Kay joined Tenor in October of 2009. Previously, Mr. Kay worked at Jefferies & Company as a senior associate in the Restructuring and Recapitalization Group and at Akin Gump Strauss Hauer & Feld as an attorney in the Financial Restructuring Group The Board has appointed Harry Near as "Designated Director" and has delegated certain powers to him, including the conduct of the proceedings under the Companies' Creditors Arrangement Act and certain related matters. However, before making any decision regarding those delegated matters, Mr. Near will be required to consult with the newly established Advisory Panel of the Company. The members of the Advisory Panel are Messrs. Near, Brown and van't Hof. Mr. Near has agreed to serve as the Designated Director for a minimum period of three months. The Board has also agreed that certain transactions will be subject to the approval of the Board, including the approval of one of the Lender's nominees. Mr. Fung, the Chairman and Chief Executive Officer of Crystallex stated, "I wish to thank Michael and Johan for their selfless service to Crystallex as directors and I am pleased that they will continue to provide the Company with their valuable advice as members of the Advisory Panel." He also noted that, "Crystallex will be well served by having Robin Shah and David Kay as directors as their experience and knowledge will prove helpful to the Company as it seeks to recover value from its Las Cristinas investment." Crystallex also announced that the shareholder rights plan agreement dated as of June 22, 2006, with CIBC Mellon Trust Company, as rights agent, which was last reconfirmed by the shareholders of the Company at a shareholders' meeting held on June 24, 2009, will terminate on June 30, 2012. In light of the fact that the Company has obtained a Court order to delay its annual shareholders' meeting, the shareholders of the Company will not be able to reconfirm the Rights Plan as required, and therefore the Rights Plan will terminate. The Company's shareholder rights plan agreement of March 16, 2012, remains in force. On June 25, 2012, the Board of Directors of Crystallex International Corporation adopted a Certificate of Amendment to the articles of the Company. A copy of the Certificate of Amendment has been made available for review under the Company's profile at www.sedar.com, a copy of which is available at no charge at http://is.gd/5CLhUM About Crystallex Crystallex International Corporation is a Canadian based mining company, with a focus on acquiring, exploring, developing and operating mining projects. Crystallex has successfully operated an open pit mine in Uruguay and developed and operated three gold mines in Venezuela. The Company's principal asset is its international claim in relation to its investment in the Las Cristinas gold project located in Bolivar State, Venezuela. On Dec. 23, 2011, announced that it obtained an order from the Ontario Superior Court of Justice (Commercial List) for protection under the Companies' Creditors Arrangement Act (Canada) (CCAA). Ernst & Young Inc. was appointed monitor under the order. Crystallex has also commenced a proceeding under Chapter 15 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware in order to ensure that relevant CCAA orders are enforced in the United States. The Bankruptcy Court has recognized Crystallex's CCAA proceeding as well as the initial order and subsequent stay extension of the Ontario Superior Court of Justice. The Company reported a net loss of US$33.7 million for the nine months ended Sept. 30, 2011, compared with a net loss of US$27.7 million for the same period in 2010. The Company reported losses from continuing operations of US$22.0 million and US$14.5 million for the nine months Sept. 30, 2011, and 2010, respectively. Following the Government of Venezuela's unilateral cancellation of the Las Cristinas Mine Operating Contract (the "MOC") on Feb. 3, 2011, the Company filed for arbitration before ICSID's Additional Facility and commenced the process of handing the Las Cristinas project back to the Government of Venezuela. The handover to the Government of Venezuela was completed on April 5, 2011, upon receipt of a certificate of delivery from the Corporacion Venezolana de Guayana (the "CVG"). As a result, the Company has determined that its operations in Venezuela should be accounted for as a discontinued operation. The Company reported losses from discontinued operations of US$11.7 million and US$13.1 million for the nine months ended Sept. 30, 2011, respectively. The Company's balance sheet at Sept. 30, 2011, showed US$19.8 million in total assets, US$115.17 million in total liabilities and a stockholders' deficit of US$95.3 million. CULLIGAN INT'L: Moody's Cuts PDR to 'D' After Debt Restructuring ---------------------------------------------------------------- Moody's Investors Service has lowered Culligan International Company's probability of default rating to D following its exchange of its first lien term loan for cash and new first and second lien term loans. As part of this transaction, the second lien debt was exchanged for equity of the post exchange entity. Moody's views this exchange as distressed in accordance with its definition of default. All ratings on Culligan will be withdrawn following this action since the debt restructuring has eliminated all rated debt. Ratings Rationale The principal methodology used in rating Culligan was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Culligan International Company, headquartered in Rosemont, Illinois, is a global provider of water treatment products and services for household, commercial and industrial applications. DEAN FOODS: Moody's Retains 'Ba3' Corporate Family Rating --------------------------------------------------------- Moody's Investors Service raised the speculative grade liquidity rating for Dean Foods to SGL-2 from SGL-3. The company's corporate family rating (CFR) remains Ba3 with a negative outlook. Ratings Rationale The SGL rating upgrade reflects improved liquidity following stronger cash flow in the most recent quarter, and a better cushion expected under financial covenants. Moody's expects Dean to maintain solid liquidity over the next 12- 18 months, with good (over 20%) headroom under the leverage covenant. Moody's expects that a combination of cash on hand and internally generated cash flow will be sufficient to cover all basic cash needs, including working capital, CapEx and term loan amortization, over the next four quarters. Dean has a $1.275 billion senior credit facility expiring April 2014. At March 31, 2012 there was $145 million outstanding under the revolver. The facility is governed by three financial covenants: Interest Coverage (currently 2.75x, stepping up to 3.0x in Q1 2013), Total Leverage (Debt to EBITDA of 5.5x currently, stepping down to 5.25x in Q1 2013, and 4.5 X in Q3 2013) and Senior Leverage (currently 3.75x, stepping down to 3.5x in Q1 2013). Moody's expects covenant cushion to be good -- in the low 20s on a percentage basis, even allowing for the step down in leverage covenant in the first quarter of 2013. The company also has a $600 million receivables securitization facility (expiring on September 25, 2013) which is typically sufficient to cover working capital fluctuations. Dean had $280 million borrowed and $245.5 million in letters of credit issued against the facility at March 31, 2012. Alternate liquidity is somewhat limited. Dean's senior credit agreement is secured by all domestic tangible and intangible assets of the company, (excluding real property owned by Dean Holdings Company and accounts receivable pledged under the securitization facility), and by 65% of the stock first-tier foreign subsidiaries. The agreement allows the company to sell up to 10% of assets each fiscal year without lenders consent, but requires it to use the proceeds to repay indebtedness under the credit agreement if sale proceeds exceed $250 million annually. Dean's Ba3 rating reflects its very narrow margins inherent in its largest, commodity-oriented milk business, high leverage, more limited product, geographic and customer diversification than certain other large global food and agriculture companies, and the potential for both volatility in milk prices, as well as shifts in the pricing strategies of retailers to erode profitability. The rating is supported by the company's leading market share, national scale in the US dairy industry, and strong distribution network with comprehensive refrigerated direct store delivery systems. The rating also reflects the potential for further cost efficiencies/productivity improvements as management focuses on internal integration, streamlining of operations and further cost reduction initiatives. The negative outlook reflects weak credit metrics that have resulted from the profitability pressure that the company has experienced amid price, volume and mix shifts in its Fresh Dairy Direct business. Despite improved profitability in the first quarter ended March 2012, leverage remains over 5.3 times for the last twelve month period ended in March, while EBITA margin remained low at around 4.5% (both ratios calculated using Moody's standard accounting adjustments). To stabilize the outlook Moody's would need to see further improvement in credit metrics, with leverage being reduced to 5 times or below. Dean Foods is the largest processor and distributor of milk and various other dairy products in the United States and the largest producer of soy milk in Europe. The company also markets and sells a variety of branded dairy and dairy-related products including, Silk(R) soymilk and almondmilk, Horizon Organic(R) dairy products, International Delight(R) coffee creamers, LAND O'LAKES(R) creamers and fluid dairy products, and cultured dairy products. Headquartered in Dallas, Texas, Dean Foods had sales of approximately $13.2 billion for the latest twelve months ending March 30, 2012. DELTA AIR LINES: S&P Rates Class B Pass-through Certs. 'BB' ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'A-' (sf) rating to Delta Air Lines Inc.'s series 2012-1 Class A pass- through certificates with an expected maturity of May 7, 2020, and its preliminary 'BB' (sf) rating to the series 2012-1 Class B pass-through certificates with an expected maturity of May 7, 2019. The final legal maturities will be 18 months after the expected maturity. The issues are drawdowns under a Rule 415 shelf registration. "We will assign final ratings upon the conclusion of a legal review of the documentation," S&P said. The preliminary 'A-' (sf) and 'BB' (sf) ratings are based on: - The credit quality of Delta (B/Positive/--). - Conservative collateral coverage (initial Class A loan-to- value of 49.6% using prospectus appraisal values and 53.6% using the values that Standard & Poor's focused on by planes that S&P believes Delta would seek to keep in any future bankruptcy reorganization. - Legal and structural protections available to the pass-through certificates. The company will use proceeds of the offering to refinance these aircraft that Delta owns: nine A319-100s, seven A320-200s, one B757-200, eight B767-300ERs, and six B767-400ERs. "Each aircraft's secured notes are cross-collateralized and cross- defaulted--a provision we believe increases the likelihood that Delta would affirm the notes (and thus continue to pay on the certificates) in bankruptcy. We believe that these provisions are particularly important protection for the pass-through certificates because the aircraft securing the notes are already nine to 17 years old, and newer models will replace all these aircraft over the life of the certificates," S&P said. RATINGS LIST Delta Air Lines Inc. Corporate credit rating B/Positive/-- New Ratings Delta Air Lines Inc. Series 2012-1 Class A pass-thru certs A- (sf)(prelim) Series 2012-1 Class B pass-thru certs BB (sf)(prelim) DELTA AIR LINES: S&P Raises Rating on Class G1 Certs. From 'BB+' ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on Delta Air Lines Inc.'s 2002-1 Class G1 certificates to 'BBB' from 'BB+'. "The upgrade reflects our expectation of improved asset coverage for the 2002-1 Class G1 certificates after Delta repays the G2 certificates," said Standard & Poor's credit analyst Philip Baggaley. "When Delta repays the G2 certificates, 15 planes will exit the collateral pool that currently secures indirectly the Class G1 and G2 certificates. Standard & Poor's believes that the remaining 17 B737-800 aircraft, which Boeing delivered to Delta in 1998-2002, are better collateral than the B757-200, B767-300ER, and B767- 400ER aircraft, which will no longer serve as collateral once Delta repays the G2 certificates, scheduled for July 2, 2012," S&P said. "Further, we estimate that the loan-to-value for the G1 certificates will improve to the 60%-65% range, compared with a current combined loan-to-value for the G1 and G2 certificates of more than 70%," S&P said. DEX ONE: Alan Schultz Succeeds Eugene Davis as Board Chairman ------------------------------------------------------------- Dex One Corporation has elected Alan F. Schultz as Chairman of the Board of Directors. He succeeds Eugene I. Davis who has resigned from the Dex One Board, citing a number of new director commitments requiring a substantial amount of his time and attention. About Dex One Dex One, headquartered in Cary, North Carolina, is a local business marketing services company that includes print directories and online voice and mobile search. Revenue was approximately $1.1 billion for the LTM period ended Sept. 30, 2010. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection on May 28, 2009 (Bank. D. Del. Case No. 09- 11833 through 09-11852). They emerged from bankruptcy on Jan. 29, 2010. On the Effective Date and in connection with its emergence from Chapter 11, RHD was renamed Dex One Corporation. Dex One reported a net loss of $518.96 million in 2011 compared with a net loss of $923.59 million for the eleven months ended Dec. 31, 2010. The Company's balance sheet at March 31, 2012, showed $3.14 billion in total assets, $3.09 billion in total liabilities and $48.87 million in total shareholders' equity. * * * As reported in the April 2, 2012 edition of the TCR, Moody's Investors Service has downgraded the corporate family rating (CFR) for Dex One Corporation's to Caa3 from B3 based on Moody's view that a debt restructuring is inevitable. Moody's has also changed Dex's Probability of Default Rating (PDR) to Ca/LD from B3 following the company's purchase of about $142 million of par value bank debt for about $70 million in cash. The Caa3 rating also reflects Moody's view that additional exchanges at a discount are likely in the future since the company amended its bank covenants to make it possible to repurchase additional bank debt on the open market through the end of 2013. As reported by the TCR on April 4, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Cary, N.C.-based Dex One Corp. and related entities to 'CCC' from 'SD' (selective default). "The upgrade reflects our assessment of the company's credit profile after the completion of the subpar repurchase transaction in light of upcoming maturities, future subpar repurchases, and our expectation of a continued week operating outlook," explained Standard & Poor's credit analyst Chris Valentine. DJ CHRISTIE: Lawsuit Against Pratt et al. Stays in Bankr. Court --------------------------------------------------------------- District Judge Carlos Murguia adopted Report and Recommendation issued by Bankruptcy Judge Dale Somers in Topeka, Kansas, and rejected the request of John R. Pratt to withdraw the bankruptcy court reference of the lawsuit, DJ CHRISTIE, INC., Plaintiff, v. ALAN E. MEYER, JOHN R. PRATT, ALEXANDER W. GLENN, DAVID J. CHRISTIE, and WASHINGTON INTERNATIONAL INSURANCE CO., Defendants, and UNITED STATES BANKRUPTCY COURT-TOPEKA DIVISION, Interested Party, Case No. 12-mc-00405-CM, No. 11-07043 (Bankr. D. Kan.). Judge Murguia said the most efficient way to handle the many interrelated and outstanding disputes is to delay withdrawal of the reference until the issues are narrowed, nonjury claims are resolved, and the case is ready for trial. The Bankruptcy Court is fully equipped with the tools to proceed with this matter without interference by the district court. The dispute originally arose from an alleged oral joint venture/partnership agreement to construct, develop, and manage a mixed-use residential apartment complex in Junction City, Kansas. Alan Meyer and John Pratt sued David Christie, Alexander Glenn, and DJ Christie, Inc., in federal court, Case No. 07-2230. On May 21, 2009, following a 10-day trial, a jury returned a verdict for Meyer and Pratt on all counts. Messrs. Meyer and Pratt elected the jury's damage award of $9,196,345 and the court subsequently awarded plaintiffs $100 in nominal punitive damages. As a condition of their appeal, Messrs. Christie and Glenn, and DJC posted a supersedeas bond of $1,125,000, which Mr. Christie did as principal with Washington International Insurance Company acting as surety. On May 20, 2011, DJC filed a Chapter 11 Bankruptcy in the United States Bankruptcy Court for the District of Kansas, Case No. 11- 40764-DLS. Pursuant to 11 U.S.C. Sec. 362(a), the filing of the bankruptcy petition stayed enforcement of the judgment against it. Following remand from the Tenth Circuit's decision in Meyer v. Christie, 634 F.3d 1152 (10th Cir. 2011) (affirming in part and reversing in part Meyer v. Christie, No. 07-2230-CM, 2009 WL 4782118 (D. Kan. Dec. 8, 2009)), the District Court entered a final amended judgment on July 15, 2011, in favor of Messrs. Meyer and Pratt, and against Messrs. Christie and Glenn, and DJC in the amount of $7,170,603, plus $100 in punitive damages, along with costs. At some point after the Tenth Circuit's mandate was issued, Messrs. Christie and Glenn apparently acquired, by assignment, certain judgments entered by Iowa courts against Messrs. Meyer and Pratt and other parties and in favor of various lenders. After the final judgment in 07-2230 but before the court ruled on certain of Messrs. Meyer and Pratt's motions regarding collection on/enforcement of the judgment, DJC filed an adversary proceeding in the Bankruptcy Court naming Messrs. Meyer and Pratt, the surety (Washington International), Messrs. Glenn and Christie, Case No. 11-07043. In the adversary proceeding, DJC seeks a determination on whether it may offset these Iowa Judgments -- owed to it by Messrs. Meyer and Pratt -- against the Judgment it owes in this case. Specifically, the adversary complaint alleges that DJ Christie Inc., and Messrs. Glenn and Christie own judgments against Messrs. Meyer and Pratt in the amount of $7,543,500.40, i.e., more than the 07-2230 Judgment owed by DJC, and Messrs. Glenn and Christie to Messrs. Meyer and Pratt. Messrs. Christie and Glenn initiated garnishment actions naming the surety as garnishee. An interpleader complaint, Adv. No. 12- 07016, was filed in the Bankruptcy Court regarding $1,000,000 ostensibly representing Messrs. Christie and Glenn's shares in half of the net proceeds of the sale of the Junction City property in a separate bankruptcy proceeding. Other complications exist. DJC's adversary complaint alleges three counts. On cross-claim, Messrs. Glenn and Christie assert three counts against Messrs. Meyer and Pratt. On counter- and cross-claims, Messrs. Meyer and Pratt assert five causes of action against DJC, Christie, Glenn, and Washington. Mr. Pratt's motion to withdraw the reference to the adversary proceeding seeks permissive withdrawal pursuant to 28 U.S.C. Sec. 157(d) (permitting withdrawal, in whole or part, on timely motion, for cause, on core and noncore matters). Mr. Pratt argues that withdrawal is necessary to prevent forum shopping, to promote judicial economy, and to reduce cost and delay. Regarding judicial economy, Mr. Pratt argues that the Bankruptcy Court lacks the authority to enter final judgment on the state law claims. A copy of the District Court's June 27, 2012 Memorandum and Order is available at http://is.gd/wU72yafrom Leagle.com. Overland Park, Kansas-based D.J. Christie Inc. filed for Chapter 11 bankruptcy (Bankr. D. Kan. Case No. 11-40764) on May 20, 2011. Judge Dale L. Somers presides over the case. Kathryn E. Sheedy, Esq., and Tom R. Barnes, II, Esq., at Stumbo Hanson, LLP, serve as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and under $1 million in debts. The petition was signed by David J. Christie, its president. DOLLAR GENERAL: S&P Rates Proposed $450MM Unsecured Notes 'BB+' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB+' issue-level rating to Dollar General Corp.'s proposed $450 million unsecured notes due 2017. The company plans to use the proceeds of this debt offering to refinance all $451 million of its subordinated notes due 2017. "We rate the proposed unsecured notes one notch below our 'BBB-' corporate credit rating on the company because of the substantial amount of priority debt on the capital structure. Priority debt includes about $1.96 billion of senior secured term loans and $585 million outstanding under its asset-based revolving credit facility as of May 4, 2012," S&P said. The 'BBB-' corporate credit rating and stable outlook on Dollar General remain unchanged. RATINGS LIST Dollar General Corp. Corporate Credit Rating BBB-/Stable/-- New Ratings Dollar General Corp. Senior Unsecured $450 mil nts due 2017 BB+ EASTMAN KODAK: No Equity Committee or Valuation Trial for Now ------------------------------------------------------------- Bankruptcy Judge Allan L. Gropper declined for now to appoint an official equity security holders' committee in the Chapter 11 cases of Eastman Kodak Company, saying the appointment is not "necessary" to assure Kodak's shareholders adequate representation in the chapter 11 cases and the costs appear unreasonable in light of the possible benefits. The Court, however, left the window open for the Shareholders to renew their request. "There is no reason to think that the interests of shareholders will be ignored in these cases, particularly where Kodak's directors and officers own over 10 million shares of Kodak stock themselves," Judge Gropper pointed out. The judge also held that Kodak's unsecured creditors' committee has a duty to maximize the value of the Kodak estates which would inhere to the benefit of shareholders. According to Judge Gropper, the Shareholders wholly fail to support the position taken in their papers that the creditors' committee will cease to attempt to maximize value once the point is reached at which creditors will be paid in full -- as if it were possible to divine that point at this stage in these cases. "For present purposes, creditor and shareholder interests are generally aligned," Judge Gropper said. The common stock of Kodak is publicly held, with approximately 270 million shares outstanding. After the Petition Date, counsel for certain Kodak shareholders sent letters to the U.S. Trustee requesting the formation of an official committee of equity security holders. After consideration of extensive information supplied by the Shareholders in support of the motion and by Kodak and certain other parties in opposition, the U.S. Trustee denied the Shareholders' request on Feb. 29, 2012. The Shareholders then filed the motion, asking the Court to order the appointment of an official equity committee under Sec. 1102(a)(2) of the Bankruptcy Code. At oral argument on the motion, the Shareholders argued that the possibility of a return to equity justified the appointment of an official equity committee, and asserted that without a committee they would be denied a meaningful opportunity to participate in Kodak's restructuring. The Shareholders' motion is opposed by Kodak, the U.S. Trustee, the official unsecured creditors' committee, and an unofficial, ad hoc second lien noteholders' committee. The objecting parties assert that the Shareholders' assertions of solvency are premature and that Kodak should not be required to bear the cost of an additional committee when the interests of Kodak's shareholders are adequately represented by other constituencies that share a common desire to maximize the value of Kodak's estate. Judge Gropper also noted that, given the quality of the legal talent hired by the Shareholders, there is no reason to conclude that the Shareholders cannot be represented ably through an unofficial, or ad hoc, committee. If the Shareholders make a substantial contribution to Kodak's reorganization, they can obtain compensation for their fees under Bankruptcy Code Sec. 503(b)(3)(D). On the other hand, the estate will not be forced to fund a constituency that appears to be out of the money. Stephen G. Grygiel, Esq., at Keefe Bartels, LLC, in Red Bank, New Jersey, represents Frank E. Williams, Jr.; Andrew Gregor for Putnam Capital Services; George Karfunkel; William Stern; Lance Laifer for Wapiti Partners, L.P.; Eric Wagoner for Source Capital Group; Roman Stockhammer; Luis Diaz; and Chris DePierro. Judge Gropper also declined the Shareholders' invitation to undertake a valuation trial. The Shareholders have argued that Kodak could be solvent assuming it terminates certain retiree benefits. Judge Gropper, however, held that any potential benefit to conducting such a trial is outweighed by the considerable time and expense it would impose on Kodak at this stage of its reorganization. Nothing could be more harmful to Kodak's restructuring efforts than a hearing at which it would be required to adduce evidence of its insolvency at a time when its efforts should be focused on maximizing the value of its enterprise for all stakeholders. The Court also pointed out that, based on the record, there is no substantial evidence that equity will be entitled to a meaningful distribution in this case. Kodak's most recent Form 10-K Annual Report for the year ending Dec. 31, 2011 reflects a consolidated balance sheet (in accordance with GAAP) with $7.028 billion of liabilities compared to only $4.678 billion of assets. As of the Petition Date, Kodak identified more than $4.6 billion in prepetition liabilities, a sum which has since been augmented by its DIP financing facility and post-petition administrative costs. Kodak's first four monthly operating reports also show net losses of approximately $100 million per month. The Court also rejected the Shareholders' argument that they should have a committee since an official committee has been appointed for Kodak's retirees. Judge Gropper explained that Congress provided that in certain cases (generally cases where there is no union representing retirees), the court "shall order" the appointment of a representative committee of retired employees "if the debtor seeks to modify or not pay the retiree benefits or if the court otherwise determines that it is appropriate." Since Kodak has publicly announced its decision to modify retiree benefits, it could not reasonably object to the retirees' motion for a committee. The issues are entirely different with respect to the appointment of an equity committee. A copy of Judge Gropper's June 28, 2012 Memorandum of Decision is available at http://is.gd/YpPKFHfrom Leagle.com. 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. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. EASY RENTAL: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Easy Rental Equipment Inc. P.O. Box 150 Mercedita, PR 00715 Bankruptcy Case No.: 12-04939 Chapter 11 Petition Date: June 25, 2012 Court: U.S. Bankruptcy Court District of Puerto Rico (Ponce) Debtor's Counsel: Wigberto Lugo Mender, Esq. LUGO MENDER & CO Centro Internacional De Mercadeo Carr 165 Torre 1, Suite 501 Guaynabo, PR 00968 Tel: (787) 707-0404 E-mail: wlugo@lugomender.com Scheduled Assets: $7,142,891 Scheduled Liabilities: $14,521,111 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/prb12-04939.pdf The petition was signed by Carlos Julian Teissonniere Qui�ones, president. ELECTRICAL & ELECTRONIC: Case Summary & Creditors List ------------------------------------------------------ Debtor: Electrical & Electronic Suppliers, Inc. aka Electrical & Electronics Suppliers, Inc. Electrical & Electronic Supplies, Corp. Calle Jardines Suite 3 Caguas, PR 00725 Bankruptcy Case No.: 12-04944 Chapter 11 Petition Date: June 25, 2012 Court: U.S. Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Carlos A. Ruiz Rodriguez, Esq. P.O. Box 1298 Caguas, PR 00726-1298 Tel: (787) 286-9775 Fax: (787) 747-2174 E-mail: caruiz@reclamatusderechos.com Scheduled Assets: $1,550,000 Scheduled Liabilities: $1,311,837 A copy of the Company's list of its six largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/prb12-04944.pdf The petition was signed by Jose Rafael Dieppa Bernabe, president. ENDURANCE INTERNATIONAL: S&P Affirms 'B' Corporate Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Burlington, Mass.-based Endurance International Group Inc. The outlook is stable. "We also assigned a 'B' issue rating and '3' recovery rating to the company's $100 million incremental first-lien term loan. The '3' recovery rating indicates our expectation for meaningful (50%- 70%) recovery for lenders in the event of payment default," S&P said. "At the same time, we assigned a 'CCC+' issue rating and a '6' recovery rating to the company's $125 million second-lien term loan. The recovery rating of '6', indicates our expectation of negligible (0%-10%) recovery for lenders in the event of payment default," S&P said. "In addition, we affirmed our 'B' issue rating on the company's existing senior secured facilities, including the revolver (upsized to $75 million). The '3' recovery rating on this debt remains unchanged," S&P said. "The company is using the loan proceeds to purchase HostGator, which is one of the largest providers of web hosting services," S&P said. "The acquisition won't materially affect Endurance's leverage profile," said Standard & Poor's credit analyst Katarzyna Nolan. "The rating on Endurance reflects the company's 'vulnerable' business profile, characterized by its competitive industry, acquisition-driven growth, and what we view as an 'aggressive' (based on our criteria) financial risk profile. The company's high recurring revenues and stable cash flow generation partly offset these factors," S&P said. Endurance is a Web-based service provider focusing on helping small and midsize businesses to build, promote, and optimize their online presence. "The stable outlook reflects the company's positive free cash flow generation, thanks to a recurring and predictable revenue base. It also reflects our expectation that the company will maintain its competitive position in key markets. A possible upgrade is limited over the next year, as the company digests its recent acquisitions and establishes a longer track record of performance at its current scale," S&P said. "We could lower the rating if FOCF-to-debt measures were to deteriorate to the low-single-digit area as a result of increased price competition, a significant loss of its customer base, or acquisition integration challenges," S&P said. ENERGY CONVERSION: Taps Diversified Property to Give Tax Review --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan authorized Energy Conversion Devices, Inc., and United Solar Ovonic, LLC, to employ Diversified Property Solutions LLC to provide personal property and real estate tax review and appeal services to the Debtors. About Energy Conversion Energy Conversion Devices -- http://energyconversiondevices.com/ -- has a renowned 51 year history since its formation in Detroit, Michigan and has been a pioneer in materials science and renewable energy technology development. The company has been awarded over 500 U.S. patents and international counterparts for its achievements. ECD's United Solar wholly owned subsidiary has been a global leader in building-integrated and rooftop photovoltaics for over 25 years. The company manufactures, sells and installs thin-film solar laminates that convert sunlight to clean, renewable energy using proprietary technology. ECD filed for Chapter 11 protection (Bankr. E.D. Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker presides over the case. Aaron M. Silver, Esq., Judy B. Calton, Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz & Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel. The Debtor estimated assets and debts of between $100 million and $500 million as of the petition date. The petition was signed by William Christopher Andrews, chief financial officer and executive vice president. Affiliate United Solar Ovonic LLC filed a separate Chapter 11 petition on the same day (Bankr. E.D. Mich. Case No. 12-43167). Affiliate Solar Integrated Technologies, Inc., filed a petition for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 12-43169). An official committee of unsecured creditors has been appointed in the case. Foley and Lardner, LLP represents the Committee. Scouler & Company, LLC, serves as financial advisor. A group of shareholders had asked a bankruptcy judge to allow it to form an official committee with lawyers and expenses paid for by the company. The company had estimated in court papers that it was worth $986 million, based on nearly $800 million of investment in the manufacturing unit. The Debtors disclosed that they had canceled the auction of the going concern sale of USO and discontinued the court-approved sale process because of the failure to receive an acceptable qualified bid by the bid deadline. Quarton Partners, the companies' investment banker, is continuing to work with prospective buyers on alternative transactions. In addition, the companies have retained auction services provider Hilco Industrial to prepare for an orderly sale of the companies' assets. ENERGY CONVERSION: Hilco IP Approved to Monetize IP Assets ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan authorized Energy Conversion Devices, Inc., and United Solar Ovonic, LLC, to employ Hilco IP Services LLC doing business as Hilco Streambank as their exclusive agent for purposes of monetizing the Debtors' intangible and intellectual property assets. As reported in the Troubled Company Reporter on June 13, 2012, Hilco Streambank will: a. work with the Debtors' management and advisors to collect and secure all of the available information and data concerning the IP Assets; b. prepare marketing materials designed to advertise the availability of the IP Assets for sale, assignment, license, or other disposition; c. develop and execute a sales and marketing program designed to elicit proposals to acquire the IP Assets from qualified acquirers with a view toward completing one or more sales, assignments, licenses, or other dispositions of the IP assets within the next four to six months; d. assist the Debtors in connection with the transfer of the IP assets to the acquirer(s) who offer the highest or otherwise best consideration for the IP Assets; and e. be responsible for all execution of all marketing and sales activities related to the marks. For purposes of clarification, the IP Sale Services will not be duplicative of: -- the investment banking and consulting services for which the Debtors have retained Quarton Partners, LLC as investment banker to the Debtors. Further, no Success Fee is payable to Hilco Streambank if a success fee is also payable to Quarton. -- the marketing and sales services for which the Debtors have retained Heritage Global Partners, Inc.; Hilco Industrial, LLC; Maynards Industries (1991) Inc.; Counsel RB Capital, LLC; and Van Acker Associates (the auctioneers). Further, no Success Fee is payable to Hilco Streambank if a transaction fee is also payable to the auctioneers. Hilco Streambank will be paid: a. a management fee of $20,000 per month commencing on May 1, 2012. b. a success fee upon the completed sale or sales of some or all of the IP Assets. In addition, the Debtors will reimburse Hilco Streambank's reasonable and customary expenses incurred in connection with the performance of the services required under the IP Sale Agreement, including, but not limited to, reasonable expenses of marketing, advertising, economy travel and transportation; long distance telephone charges; postage and courier/overnight express fees To the best of the Debtor's knowledge, Hilco Streambank is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Energy Conversion Energy Conversion Devices -- http://energyconversiondevices.com/ -- has a renowned 51 year history since its formation in Detroit, Michigan and has been a pioneer in materials science and renewable energy technology development. The company has been awarded over 500 U.S. patents and international counterparts for its achievements. ECD's United Solar wholly owned subsidiary has been a global leader in building-integrated and rooftop photovoltaics for over 25 years. The company manufactures, sells and installs thin-film solar laminates that convert sunlight to clean, renewable energy using proprietary technology. ECD filed for Chapter 11 protection (Bankr. E.D. Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker presides over the case. Aaron M. Silver, Esq., Judy B. Calton, Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz & Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel. The Debtor estimated assets and debts of between $100 million and $500 million as of the petition date. The petition was signed by William Christopher Andrews, chief financial officer and executive vice president. Affiliate United Solar Ovonic LLC filed a separate Chapter 11 petition on the same day (Bankr. E.D. Mich. Case No. 12-43167). Affiliate Solar Integrated Technologies, Inc., filed a petition for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 12-43169). An official committee of unsecured creditors has been appointed in the case. Foley and Lardner, LLP represents the Committee. Scouler & Company, LLC, serves as financial advisor. A group of shareholders had asked a bankruptcy judge to allow it to form an official committee with lawyers and expenses paid for by the company. The company had estimated in court papers that it was worth $986 million, based on nearly $800 million of investment in the manufacturing unit. The Debtors disclosed that they had canceled the auction of the going concern sale of USO and discontinued the court-approved sale process because of the failure to receive an acceptable qualified bid by the bid deadline. Quarton Partners, the companies' investment banker, is continuing to work with prospective buyers on alternative transactions. In addition, the companies have retained auction services provider Hilco Industrial to prepare for an orderly sale of the companies' assets. ENERGY CONVERSION: McDonald Hopkins Approved as Conflicts Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan authorized Energy Conversion Devices, Inc., and United Solar Ovonic, LLC, to employ McDonald Hopkins PLC as conflicts counsel for ECD in matters that may arise for which ECD's general bankruptcy counsel, Honigman Miller Schwartz and Cohn LLP, may be conflicted from representing ECD. To the best of Debtors' knowledge, McDonald Hopkins does not have any other connection with the Debtors, their creditors, any other party in interest or their attorneys and accountants, the U.S. Trustee, or any person employed in the office of the U.S. Trustee. About Energy Conversion Energy Conversion Devices -- http://energyconversiondevices.com/ -- has a renowned 51 year history since its formation in Detroit, Michigan and has been a pioneer in materials science and renewable energy technology development. The company has been awarded over 500 U.S. patents and international counterparts for its achievements. ECD's United Solar wholly owned subsidiary has been a global leader in building-integrated and rooftop photovoltaics for over 25 years. The company manufactures, sells and installs thin-film solar laminates that convert sunlight to clean, renewable energy using proprietary technology. ECD filed for Chapter 11 protection (Bankr. E.D. Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker presides over the case. Aaron M. Silver, Esq., Judy B. Calton, Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz & Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel. The Debtor estimated assets and debts of between $100 million and $500 million as of the petition date. The petition was signed by William Christopher Andrews, chief financial officer and executive vice president. Affiliate United Solar Ovonic LLC filed a separate Chapter 11 petition on the same day (Bankr. E.D. Mich. Case No. 12-43167). Affiliate Solar Integrated Technologies, Inc., filed a petition for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 12-43169). An official committee of unsecured creditors has been appointed in the case. Foley and Lardner, LLP represents the Committee. Scouler & Company, LLC, serves as financial advisor. A group of shareholders had asked a bankruptcy judge to allow it to form an official committee with lawyers and expenses paid for by the company. The company had estimated in court papers that it was worth $986 million, based on nearly $800 million of investment in the manufacturing unit. The Debtors disclosed that they had canceled the auction of the going concern sale of USO and discontinued the court-approved sale process because of the failure to receive an acceptable qualified bid by the bid deadline. Quarton Partners, the companies' investment banker, is continuing to work with prospective buyers on alternative transactions. In addition, the companies have retained auction services provider Hilco Industrial to prepare for an orderly sale of the companies' assets. ENERGY CONVERSION: Signature OK'd as Real Estate Brokers -------------------------------------------------------- The Hon. Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern District of Michigan authorized Energy Conversion Devices, Inc., and United Solar Ovonic LLC to employ Signature Associates, L.L.C., as real estate consultants and brokers. As reported in the Troubled Company Reporter on March 16, 2012, Signature will, among other things, provide the Debtors with strategic consulting, financial analysis, transaction management and disposition services for the numerous buildings, properties and facilities located in North America and Europe that are currently occupied, owned or utilized by the Debtors. Signature will also provide the Debtors with brokerage services for the land and premises commonly referred to as 10 Clark Road, Battle Creek, Michigan, consisting of a 267,672 square foot building on 45 gross acres of land pursuant to the exclusive listing agreement for sale, dated July 21, 2011, as amended by the exclusive listing agreement extension -- sale dated Jan. 5, 2012. The real estate services and the brokerage services are necessary for the Debtors to maximize the value of their estate; improve the administration of key facilities; assist the Debtors in efficiently and effectively using their resources and personnel; and facilitate disposition of the properties. The Debtors intend to compensate Signature for its service under the real estate service agreement based upon completion of the transactions that result from Signature's performance of the real estate services. These transaction fees will be paid out of the funds received by the Debtors at the closing of the applicable transaction, either though the Debtors or the third-party, as the circumstances require. In the sale of a property or lease, the transaction fees to be paid to Signature, and any required cooperating or local broker, are based on the cash received by the Debtors and range from 3.5% - 6% in total. Upon a rent reduction or lease modification, Signature earns 8% of the net savings to the Debtors as agreed to by the Debtors and Signature and payable in three installments within 60 days of the closing date of the transaction. In any sublease brokered by Signature, Signature will receive 6% of the aggregate rental for the first five years and 3% for the next five years or any renewal period. Each individual transaction fee is capped at $300,000, excluding any payments by Signature to cooperating or local brokers. Fees for appraisal services requested by the Debtors will be mutually agreed upon with the Debtors and will not exceed $25,000. The Debtors intend to compensate Signature for its services under the listing agreement by paying Signature a commission of 6% of the aggregate sale price of the Battle Creek property in a sale or option to purchase granted within 90 days after expiration or termination of the listing agreement to a purchaser known to the Debtors to have been shown the Battle Creek property by Signature during the term of the listing agreement. Compensation will be payable upon the closing of a sale transaction and will be paid out of the sale proceeds. The Court also ordered that Signature will only be compensated for the disposition services and brokerage services out of the funds received by the Debtors at the closing of the applicable transaction, either through the Debtors or the third-party, as the circumstances require, based on these commission percentages: a. In the sale of a property or lease, Signature, and any required cooperating or local broker, will be paid (i) 6% if gross proceeds are less than $10,000,000; (ii) 4.5% if gross proceeds are between $10,000,000 to $20,000,000; and (iii) 3.5% if gross proceeds are greater than $20,000,000; b. Signature will earn a commission of 6% of the aggregate sale price of the Battle Creek Property in a sale or option to purchase granted within 90 days after expiration or termination of the Battle Creek Listing Agreement to a purchaser known to the Debtors to have been shown the Battle Creek Property by Signature during the term of the Battle Creek Listing Agreement; c. Signature will earn a commission of 6% of the aggregate sale price of the Greenville Property in a sale or option to purchase granted within 90 days after expiration or termination of the Greenville Listing Agreement to a purchaser known to the Debtors to have been shown the Greenville Property by Signature during the term of the Greenville Listing Agreement; d. Each individual transaction fee is capped at $300,000, excluding any payments by Signature to cooperating or local brokers, which may not include other brokers at Signature; e. Signature will not earn any commission for any rent reduction or lease modification; and f. Any payment to a cooperating or local broker under the Battle Creek Listing Agreement or Greenville Listing Agreement, as applicable, will be made by Signature. John Boyd, Signature Executive Vice President, assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Energy Conversion Energy Conversion Devices -- http://energyconversiondevices.com/ -- has a renowned 51 year history since its formation in Detroit, Michigan and has been a pioneer in materials science and renewable energy technology development. The company has been awarded over 500 U.S. patents and international counterparts for its achievements. ECD's United Solar wholly owned subsidiary has been a global leader in building-integrated and rooftop photovoltaics for over 25 years. The company manufactures, sells and installs thin-film solar laminates that convert sunlight to clean, renewable energy using proprietary technology. ECD filed for Chapter 11 protection (Bankr. E.D. Mich. Case No. 12-43166) on Feb. 14, 2012. Judge Thomas J. Tucker presides over the case. Aaron M. Silver, Esq., Judy B. Calton, Esq., and Robert B. Weiss, Esq., at Honigman Miller Schwartz & Cohn LLP, in Detroit, Michigan, represent the Debtor as counsel. The Debtor estimated assets and debts of between $100 million and $500 million as of the petition date. The petition was signed by William Christopher Andrews, chief financial officer and executive vice president. Affiliate United Solar Ovonic LLC filed a separate Chapter 11 petition on the same day (Bankr. E.D. Mich. Case No. 12-43167). Affiliate Solar Integrated Technologies, Inc., filed a petition for relief under Chapter 7 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 12-43169). An official committee of unsecured creditors has been appointed in the case. Foley and Lardner, LLP represents the Committee. Scouler & Company, LLC, serves as financial advisor. A group of shareholders had asked a bankruptcy judge to allow it to form an official committee with lawyers and expenses paid for by the company. The company had estimated in court papers that it was worth $986 million, based on nearly $800 million of investment in the manufacturing unit. The Debtors disclosed that they had canceled the auction of the going concern sale of USO and discontinued the court-approved sale process because of the failure to receive an acceptable qualified bid by the bid deadline. Quarton Partners, the companies' investment banker, is continuing to work with prospective buyers on alternative transactions. In addition, the companies have retained auction services provider Hilco Industrial to prepare for an orderly sale of the companies' assets. ENTERTAINMENT PROPERTIES: Fitch Affirms 'B' Rating on Pref. Stock ----------------------------------------------------------------- Fitch Ratings has affirmed the credit ratings of Entertainment Properties Trust (NYSE: EPR) as follows: -- Issuer Default Rating (IDR) at 'BBB-'; -- Unsecured revolving line of credit at 'BBB-'; -- Senior unsecured term loan at 'BBB-'; -- Senior unsecured notes at 'BBB-'; -- Preferred stock at 'BB'. The Rating Outlook is Stable. The affirmation of EPR's IDR at 'BBB-' is driven by the consistent cash flows generated by the company's triple-net leased megaplex movie theatres and charter schools, together with the cash flows from the company's other recreational and entertainment-based investments, which are solidly in excess of the company's fixed charges. The affirmation also takes into account credit concerns including idiosyncratic risks involved with charter school investments and the company's investment in asset classes that are likely less liquid and financeable during periods of potential financial stress. For the 12 months ended March 31, 2012, EPR's fixed charge coverage ratio was 2.5 times (x) compared with 2.5x and 2.3x for the years ended Dec. 31, 2011 and 2010, respectively. This coverage is solid for a 'BBB-' IDR. Fitch projects that EPR's fixed charge coverage ratio will improve slightly over the next 12-to-24 months due primarily to the spread on new acquisitions over the cost of financing, and assuming future acquisitions are effected on a leverage-neutral basis. Fitch defines fixed charge coverage as recurring operating EBITDA less recurring capital expenditures, non-cash interest income and straight-line rent adjustments, divided by interest incurred and preferred stock dividends. EPR has a manageable lease expiration profile. Of the company's megaplex theatre revenue, which represents 63% of total revenue, the majority of leases expire beyond 2018. Of the company's charter school leases, which represent 11% of total revenue, all leases expire after 2020. Historically, many tenants have chosen to exercise their renewal options, which has mitigated re-leasing risk and provided predictability to portfolio-level cash flows. That said, there is a risk that expiring leases are not renewed, or are renewed on less favorable terms to EPR given that a theatre's performance may have weakened during the term of the long-term lease. The company's leverage, measured as net debt to trailing 12 months recurring operating EBITDA was 4.7x as of March 31, 2012, up from 4.4x and 4.6x as of Dec. 31, 2011 and 2010, respectively. The small uptick is a result of EPR funding acquisitions primarily with debt over the last year. Fitch projects that EPR's leverage will be in the mid- to high-4.0x range over the next 12-to-24 months, which would remain appropriate for the 'BBB-' IDR. EPR has solid contingent liquidity from its unencumbered property pool. Unencumbered asset coverage of net unsecured debt would be 2.1x utilizing a stressed 12% capitalization rate on unencumbered NOI from the owned property portfolio, a ratio that is strong for a 'BBB-' IDR. The company also has $364 million book value of unencumbered mortgage notes receivable that are currently performing. Including 75% of these unencumbered assets to reflect the cash-flowing nature of these investments would improve unencumbered asset coverage to approximately 2.6x, which would also be strong for a 'BBB-' IDR. The company has a well-laddered debt maturity profile. Aside from 2017 and 2020, when the $240 million unsecured term loan and $250 million of unsecured senior notes expire, annual debt maturities do not account for more than 13.1% of total debt in any given year, alleviating refinance risk. Over the next five years 51% of total debt will mature, the majority of which is comprised of mortgages. EPR intends to further migrate towards an unsecured funding model, and will likely use unsecured debt to repay these mortgages, broadening the unencumbered asset pool. Fitch calculates that EPR's sources of liquidity (unrestricted cash, availability under its unsecured revolving credit facility, expected retained cash flows from operating activities after dividend payments) cover uses of liquidity (pro rata debt maturities and expected capital expenditures) by 2.0x for the period from April 1, 2012 to Dec. 31, 2013. This strong liquidity surplus is driven in large part by a mostly undrawn unsecured revolving credit facility, and further reflects manageable debt maturities and the relatively low capital-intensive nature of EPR's business. In addition, the covenants under EPR's credit agreements do not limit financial flexibility. As of March 31, 2012, the company was well within its covenants for the revolving credit facility, term loan and senior unsecured notes. EPR currently faces increased risk from its largest charter school tenant. Imagine Schools, Inc. Imagine is the lessee of 82% of EPR's charter schools as of March 31, 2012, and recently closed or is in the process of closing nine schools due to poor academic performance. With EPR's approval, Imagine can sell, sub-lease or substitute non-performing schools with performing schools on the nine assets. Although EPR is relatively well protected by a master lease structure, currently good cash flow coverage, and a letter of credit, these closings are indicative of idiosyncratic risks of charter school investments. The ratings also take into consideration a certain degree of tenant concentration. The company's two largest theatre operators collectively accounted for 43% of total revenues in the first quarter of 2012. Rental revenues from American Multi-Cinema, Inc. (AMC; IDR of 'B' with a Negative Rating Outlook) comprised 33% of total revenue and Rave Cinemas accounted for 10% of total revenues. Imagine, EPR's largest public charter school operator, accounted for 9% of total revenue in the first quarter of 2012. Given that most of EPR's top tenants are either unrated or have below-investment grade ratings, the potential for corporate default, bankruptcy and lease rejection could reduce EPR's rental revenues. One mitigant to this risk is that on a portfolio basis, property- level EBITDAR covers rent payments by a healthy margin for nearly all of EPR's theatre and charter school assets, indicative of solid four-wall profitability. Box office revenues have been relatively resilient over the last decade, as total box office revenues have risen or stayed flat in eight of the last 10 years, indicative of stability in operator top-line cash flows. In addition, no theatre tenant has ever missed a lease payment since EPR's formation in 1997, and no tenants on a portfolio-wide basis have EBITDAR coverage of rent below 1.0x. The company's real estate investments are in, or are backed by mostly non-core property types (e.g., megaplex movie theatres, charter schools, wineries, ski areas and waterparks) and thus may be less liquid or financeable in periods of company or market stress. The demonstrated alternative use of certain of the company's assets may be limited, absent the company incurring costs to attract new non-theatre tenants, despite EPR's theatre properties typically being well-located and having high-quality amenities. The Stable Outlook reflects Fitch's expectation that leverage will stay relatively unchanged and coverage will increase above 2.5x, over the next 12-to-24 months, metrics that are appropriate for a 'BBB-' IDR. The company's unencumbered asset coverage of unsecured debt will likely decline slightly as the company repays mortgages with unsecured debt, but will remain appropriate for the 'BBB-' IDR. In addition, the company has strong liquidity and good demonstrated access to capital, mitigating potential refinance risk. The two-notch differential between EPR's IDR and its preferred stock rating is consistent with the 'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis' Criteria Report dated Dec. 15, 2011, as EPR's preferred securities have cumulative coupon deferral options exercisable by EPR and thus have readily triggered loss absorption provisions in a going concern. The following factors may have a positive impact on the ratings or Outlook: -- Net debt to recurring operating EBITDA sustaining below 4.0x; -- Fixed charge coverage sustaining above 3.0x; -- Growth in the unencumbered portfolio, particularly in the megaplex movie theatre portfolio. The following factors may have a negative impact on the ratings or Outlook: -- Net debt to recurring operating EBITDA sustaining above 5.5x; -- Fixed charge coverage sustaining below 2.2x; -- A sustained liquidity coverage ratio of below 1.0x. -- A weakening in the credit quality of EPR's tenants; -- The company deviating materially from its core strategy of acquiring theatres, charter schools and other entertainment-based assets. EPIC WINGS: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Epic Wings, LLC aka Wild Wings Cafe - Uptown 20 Rum Row Hilton Head Island, SC 29928 Bankruptcy Case No.: 12-03904 Chapter 11 Petition Date: June 22, 2012 Court: U.S. Bankruptcy Court District of South Carolina (Charleston) Judge: David R. Duncan Debtor's Counsel: Robert E. Culver, Esq. THE CULVER FIRM, PC 575 King Street, Suite A Charleston, SC 29403 Tel: (843) 853-9816 E-mail: bob@culverlaw.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 13 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/scb12-03904.pdf The petition was signed by Peter Verhoeven, managing member. EQUITABLE OF IOWA: Fitch Keeps 'BB' Rating on Trust Pref. Stock --------------------------------------------------------------- Fitch Ratings has assigned a long-term Issuer Default Rating (IDR) of 'BBB' to ING U.S., Inc. (ING U.S.). Fitch has maintained the Rating Watch Evolving status on all ratings, including the Insurer Financial Strength (IFS) ratings for ING U.S.'s life insurance company subsidiaries. Fitch's Rating Watch Evolving is based on uncertainty over ING U.S.'s pending change in ownership and concern over weakness in the company's operating performance. Based on an agreement with the European Commission, ING Group has agreed to divest its global insurance operations by the end of 2013. Fitch expects that the divestiture of ING U.S. will most likely occur via IPO. ING U.S.'s standalone credit profile reflects the material progress ING Verzekeringen, the parent insurance holding company, has made in restructuring the U.S. life insurance operations in preparation for a potential IPO. ING U.S. has strengthened statutory capitalization, improved operating profitability in its ongoing businesses and reduced intercompany financial leverage. Further, Fitch believes that management has made good progress reducing the risk profile of current product offerings and mitigating capital and earnings volatility related to its closed block variable annuity businesses with increased hedging and the write-down of deferred acquisition costs. ING U.S.'s ratings reflect the company's adequate statutory capitalization on the aggregate U.S. insurance operations including captives, large scale and solid business profile in retirement and individual life markets, and improving operating earnings performance within the core businesses. ING US has also improved the credit quality of its investment portfolio through reduced exposure to commercial mortgage backed securities (CMBS), subprime residential mortgage backed securities and alternative investments. Fitch's ratings anticipate that a group rating approach for ING U.S. companies would be the most likely result of an IPO with all operating subsidiaries receiving a similar rating. In the event that legal entity and product line restructuring occurs, individual companies receiving ongoing business lines with adequate capital profile and business outlooks could expect to be affirmed at current ratings levels. Those companies restructured to contain mainly runoff businesses/closed blocks could expect to be downgraded at least one notch depending on the resulting capital profile and business outlook. The key rating triggers that could result in a downgrade include: -- A decline in reported RBC below 385%; -- Financial leverage exceeding 30%-35% resulting after the IPO; -- Significant adverse operating results; -- Further material reserve charges required in insurance/variable annuity books or a significant weakening of distribution channel or scale advantages. The key rating triggers that could result in an upgrade include: -- Increased operating profitability and generation of consistent statutory capital; -- A reported RBC above 450%, and financial leverage below 25%; -- Private sale of closed block book at good value with boost to capitalization and reduction in volatility and risk; -- Acquisition of ING U.S. by a higher rated entity outside of IPO. The rating actions are as follows: Fitch has assigned: ING U.S., Inc. -- Long-term IDR at 'BBB'; Rating Watch Evolving. Maintain Rating Watch Evolving: ING Life Insurance and Annuity Company ING USA Annuity and Life Insurance Company ReliaStar Life Insurance Company ReliaStar Life Insurance Company of New York Security Life of Denver Insurance Company -- Insurer Financial Strength (IFS) at 'A-'; Rating Watch Evolving. Equitable of Iowa Companies, Inc. -- Long-term IDR at 'BBB'; Rating Watch Evolving. Equitable of Iowa Companies Capital Trust II -- 8.424% Trust preferred stock at 'BB'; Rating Watch Evolving. FAIRVIEW APARTMENTS: Case Summary & 3 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Fairview Apartments, Inc. 372 North Main Street Lodi, NJ 07644 Bankruptcy Case No.: 12-26158 Chapter 11 Petition Date: June 26, 2012 Court: U.S. Bankruptcy Court District of New Jersey (Newark) Judge: Novalyn L. Winfield Debtor's Counsel: Richard J. Kwasny, Esq. KWASNY REILLY HAFT & SACCO 53 South Main Street Yardley, PA 19067 Tel: (215) 321-0300 Fax: (215) 321-9336 E-mail: kwasnylaw@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 three largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb12-26158.pdf The petition was signed by Wilfredo Alvarez, president/shareholder. Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- 180 Prospect Realty, Inc 12-26157 116 Prospect Realty, Inc. 12-26154 State Properties 2005, LLC 12-26159 FNB UNITED: Added to Russell Indices; Issues $7.3MM Common Shares ----------------------------------------------------------------- FNB United Corp. was added to the Russell 3000 Index, the Russell 2000 Index, the Russell Global Index and the Russell Microcap Index when Russell Investments reconstituted its comprehensive set of U.S. and global equity indexes. Russell indices are widely used by investment managers and institutional investors for both index funds and as benchmarks for passive and active investment strategies. In the institutional marketplace, an industry leading $3.9 trillion in assets currently are benchmarked to them. The Company will hold its membership in the Indices until Russell reconstitutes them again in June 2013. The annual reconstitution of the Russell 3000 captures the 3,000 largest U.S. stocks as of the end of May, ranking them by total market capitalization. The largest 1,000 companies in the ranking comprise the Russell 1000 and the next 2,000 companies become the Russell 2000. The Russell 3000 also serves as the U.S. component to the Russell Global Index. In addition, between May 21, 2012, and June 26, 2012, the Company issued $7.29 million of common stock through its "At The Market" offering. The net proceeds from the offering have been contributed to CommunityOne Bank, N.A. 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. FONAR CORP: Five Directors Elected at Annual Meeting ---------------------------------------------------- The annual meeting of Stockholders of Fonar Corporation was held on June 25, 2012, at the Double Tree Hotel, Wilmington Downtown, 700 King Street, Wilmington, Delaware 19801. At the meeting, the stockholders elected Raymond V. Damadian, M.D., Claudette J. V. Chan, Robert J. Janoff, Charles N. O'Data and Ronald G. Lehman, all of whom were sitting directors, as the directors of the Company. The stockholders also ratified the selection of Marcum LLP as the Company's auditors for the fiscal year ending June 30, 2012. About FONAR Corp. FONAR was incorporated in 1978, making it the first, oldest and most experienced MRI company in the industry. FONAR introduced the world's first commercial MRI in 1980, and went public in 1981. Since its inception, nearly 300 recumbent-OPEN MRIs and 150 UPRIGHT(R) Multi-Position(TM) MRI scanners worldwide have been installed. FONAR's stellar product line includes the Upright(TM) MRI (also known as the Stand-Up(TM) MRI), the only whole-body MRI that performs Position(TM) imaging (pMRI(TM)) and scans patients in numerous weight-bearing positions, i.e. standing, sitting, in flexion and extension, as well as the conventional lie-down position. After auditing the financial statements for fiscal 2011, the Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. Marcum, LLP, in New York, noted that the Company has negative working capital at June 30, 2011, and is dependent on asset sales to fund its operations. The Company's balance sheet at March 31, 2012, showed $34.82 million in total assets, $24.16 million in total liabilities and $10.65 million in total stockholders' equity. FOREST AVENUE: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Forest Avenue Development, LLC 209 Wagner Avenue Mamaroneck, NY 10543 Bankruptcy Case No.: 12-23186 Chapter 11 Petition Date: June 26, 2012 Court: U.S. Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Jonathan S. Pasternak, Esq. RATTET PASTERNAK, LLP 550 Mamaroneck Avenue, Suite 510 Harrison, NY 10528 Tel: (914) 381-7400 Fax: (914) 381-7406 E-mail: jsp@rattetlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Michael P. Castaldi, managing member. FULLER BRUSH: Has Plan Exclusivity Until Sept. 19 ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Fuller Brush Co. prevailed on the bankruptcy judge to grant an exclusivity motion and extend the exclusive right to propose a reorganization plan until Sept. 19. Fuller Brush previously said Victory Park Capital Advisors LLC intends to buy the business in exchange for debt. About The Fuller Brush Company The Fuller Brush Company -- http://www.fuller.com/-- sells branded and private label products for personal care, commercial and household cleaning and has a current catalog of 2,000 cleaning products. Some of Fuller's retail partners include Home Trends, Bi-Mart, Byerly's, Lunds, Home Depot, Do-It-Best, Primetime Solutions, Vermont Country Store and Starcrest. Founded in 1906 and based in Great Bend, Kansas, The Fuller Brush Company, Inc., and its parent, CPAC, Inc., filed for Chapter 11 protection (Bankr. S.D.N.Y. Case Nos. 12-10714 and 12-10715) in Manhattan on Feb. 21, 2012. Fuller Brush filed for bankruptcy five years after the company was taken over by private equity firm Buckingham Capital Partners. Fuller said it will be business as usual while undergoing Chapter 11 restructuring. But it said that while in reorganization, it intends to trim about half of the current catalog of cleaning products. Fuller, which has 180 employees as of the Chapter 11 filing, disclosed $22.9 million in assets and $50.9 million in debt. Herrick Feinstein LP is the Debtor's bankruptcy counsel. The official committee of unsecured creditors tapped Kelley Drye & Warren LLP as counsel. The reorganization is being financed with a $5 million loan from an affiliate of Victory Park Capital Advisors LLC, the secured lender owed $22.7 million that plans to buy the business in exchange for debt. GENERAL MARITIME: Levi & Korsinsky to Seek Lead Plaintiff Position ------------------------------------------------------------------ Levi & Korsinsky disclosed that a class action lawsuit has been commenced in the U.S. District Court for the Southern District of New York on behalf of investors who purchased General Maritime Corporation securities between May 10, 2010 and Nov. 16, 2011. Lead Plaintiff Filing Deadline: August 27, 2012 The complaint alleges that, during the Class Period, certain members of the Board and other officers made materially false and misleading statements regarding the Company's business and financial results. Specifically, the Complaint alleges that the defendants made statements that General Maritime's cash balances, operating cash flows and available borrowings were sufficient to meet the Company's liquidity needs for late 2011 and early 2012, when there was no reasonable basis to believe so. Then on November 17, 2011, the Company had a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code, thus completely eliminating all of the Company's equity. If you suffered a loss in General Maritime you have until Aug. 27, 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://zlk.9nl.com/general-maritime-gmrrq 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 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. General Maritime emerged from Chapter 11 protection in May 2012. The Plan reflects the terms of a global settlement among the Company's main creditor constituencies. The plan gives unsecured creditors $6 million in cash, 25 of the new stock, and warrants for another 3%, for a predicted 5.41% recovery. GOLD RESERVE: Shareholders Approve Restructuring of Debt -------------------------------------------------------- Gold Reserve Inc. disclosed that the shareholders of the Company overwhelmingly approved all items voted on at the Company's Annual and Special Meeting held, including the restructuring of the Company's 5.5% Senior Subordinated Convertible Notes due 2022. The five matters voted on at the meeting included the election of Directors, appointment of the auditors, approval of the Equity Incentive Plan, approval of the Amendment to the Shareholder Rights Plan, and the restructuring of the Notes. 67.6% of the shares outstanding voted at the meeting and all five matters were approved by at least 95% of the vote with the restructuring of the Notes being approved by over 99% of the vote. Doug Belanger, President, stated, "We anticipate that the restructuring will allow us to accomplish our objective of minimizing shareholder dilution resulting in less than 73 million shares of common stock outstanding or approximately 80 million on a fully diluted basis. We are very pleased to have obtained the support of our shareholders and noteholders for the debt restructuring. Upon the completion of the restructuring we will continue to pursue our $2.1 billion arbitration claim against the Bolivarian Republic of Venezuela for the expropriation of the Company's Brisas project and other mining projects to become an operating company." GOLDEN OAKS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Golden Oaks Senior Living Community, LLC 2801 Redbird Enid, OK 73703 Bankruptcy Case No.: 12-13143 Chapter 11 Petition Date: June 25, 2012 Court: U.S. Bankruptcy Court Western District of Oklahoma (Oklahoma City) Judge: Sarah A. Hall Debtor's Counsel: Craig Riffel, Esq. MITCHEL GASTON RIFFEL & RIFFEL, PLLC 3517 W. Owen K Garriott, Suite One Enid, OK 73703 Tel: (580) 234-8447 Fax: (580) 234-5547 E-mail: criffel@westoklaw.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 with the petition is available for free at: http://bankrupt.com/misc/okwb12-13143.pdf The petition was signed by Michael G. Miller, member/manager. GUIDED THERAPEUTICS: Extends Warrant Exchange Offer to July 5 ------------------------------------------------------------- Guided Therapeutics, Inc., has extended its exchange offer for certain of its outstanding warrants to purchase up to an aggregate of approximately 28.4 million shares of its common stock. The warrants eligible for exchange have an exercise price of $0.65 per share and exercise periods ending on July 26, 2012, or March 1, 2013. The exchange offer will now expire at 5:00 p.m. (Eastern) on Thursday, July 5, 2012, unless extended. The purpose of this extension is to allow holders of eligible warrants additional time to tender their warrants for exchange. Notice of the extension is being provided to all holders of eligible warrants pursuant to a Supplemental Letter to Holders of Original Warrants. No other changes to the exchange offer are being made at this time and the offer remains subject to the terms and conditions set forth in the Offer to Exchange, the documents referred to therein and all other documents related to the exchange offer. As of June 27, 2012, holders of eligible warrants exercisable to purchase approximately 10,305,040 shares of the Company's common stock had tendered those warrants for exchange. 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. 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. 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. GW PARTNERS: Plan of Reorganization Wins Court Approval ------------------------------------------------------- The Hon. Karen S. Jennemann of the U.S. Bankruptcy Court for the Middle District of Florida approved the Disclosure Statement and confirmed GW Partners Ltd 1, et al.'s Chapter 11 Plan, as twice amended. According to the Second Amendment to the Plan, Fifth Third, or its successor or assigns, will receive relief from the automatic stay on June 6, 2012, to allow Fifth Third, or its successor or assigns, to immediately proceed in the state court action, pending in the Circuit Court of the Fifth Judicial Circuit in and for Lake County, Florida, for the entry of a final judgment of foreclosure, and to schedule a foreclosure sale for a date no earlier than Sept. 6, 2012. The holder of the Claim will receive on account of and in full satisfaction of the Claim cash in the amount of: a. if the Effective Date is on or before June 30, 2012, then $432,273; b. if the Effective Date is after June 30, 2012, and on or before the July 31, 2012, then $455,024; c. if the Effective Date is after July 31, 2012, and on or before Aug. 31, 2012, then $493,616. d. if the Effective Date is after Aug. 31, 2012, then $493,616 and such additional amounts as may be determined under applicable non-bankruptcy law. A full-text copy of the Second Amendment to the Plan is available for free at http://bankrupt.com/misc/GWPARTNERS_plan_2amended.pdf The Court also overruled objections filed by creditors: (a) Peachtree Jacksonville, LLC; (b0 MK Gas LLC; (c) 1st United Bank, successor to Anderen Bank; (d) NRG Investment Partners, LLC, successor to Regions Bank; and (e) Chevron Products Company. Further, the Court ordered that these motions are denied or withdrawn as moot: 1. motions to dismiss case filed by these creditors: (a) SunTrust Bank; (b) Peachtree Jacksonville, LLC; (c) Fifth Third Bank; and (d) NRG Investment Partners; 2. motions for stay relief or adequate protection filed by these creditors: (a) SunTrust Bank; (b) MK Gas LLC; (c) Fifth Third Bank; and (d) 1st United Bank; 3. motions by Peachtree Jacksonville LLC to: (a) prohibit use of cash collateral; and (b) estimate claim; and 4. motion by Debtors to approve adequate protection agreement with SunTrust. Additionally, the Court ordered that to the extent the automatic stay continues following entry of the order, the automatic stay is terminated in all respects, without further hearing, notice, or order, effective Sept. 1, 2012. About GW Partners Apopka, Florida-based GW Partners Ltd 1 owns real estate and improvements in Kissimmee and Leesburg, Florida. GW filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 12-02045) on Feb. 17, 2012. Attorneys at Wolff, Hill, Mcfarlin & Herron, P.A., serve as bankruptcy counsel to the Debtors. GW Partners estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. HAMPTON ROADS: CapGen Capital Now Has 37.5% Ownership ----------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, CapGen Capital Group VI LP, CapGen Capital Group VI LLC, and Eugene A. Ludwig disclosed that, as of June 27, 2012, they beneficially own 39,752,106 shares of common stock of Hampton Roads Bankshares which represents 37.5% of the shares outstanding. The calculation of the percentage of outstanding shares is based on 34,561,145 shares of common stock outstanding as of May 17, 2012, plus 71,428,572 shares issued on June 27, 2012, in the private placement. On June 27, 2012, pursuant to the terms of the Standby Purchase Agreement, CapGen LP completed its purchase of 33,710,394 shares of common stock from the Company in the Private Placement that comprises a part of the capital raise and surrendered all of its outstanding warrants. CapGen Capital previously reported beneficial ownership of 163,563,002 common shares or a 19.3% equity stake as of Dec. 30, 2010. A copy of the amended filing is available for free at: http://is.gd/6hjnqV About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and fifteen ATMs. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company reported a net loss of $98 million in 2011, compared with a net loss of $210.35 million in 2010. The Company's balance sheet at March 31, 2012, showed $2.13 billion in total assets, $2.02 billion in total liabilities and $105.29 million in total shareholders' equity. HEMCON MEDICAL: Miller Nash Approved as IP Counsel -------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon authorized HemCon Medical Technologies, Inc., to employ Miller Nash, LLP, as special purpose counsel, in connection with corporate, intellectual property, litigation, contract, employment, securities, tax, and merger and acquisition matters As reported in the Troubled Company Reporter on June 5, 2012, Miller Nash will be paid these hourly rates: Partners $280 - $575 Associates $210 - $330 Paralegals $125 - $230 Meghan Williams $76 To the best of the Debtor's knowledge, Miller Nash is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About HemCon Medical Technologies Portland, Oregon-based HemCon Medical Technologies Inc., fdba HemCon, Inc. filed a Chapter 11 bankruptcy petition (Bankr. D. Ore. Case No. 12-32652) on April 10, 2012, estimating up to $50 million in assets and liabilities. Founded in 2001, HemCon -- http://www.hemcon.com/-- is a diversified medical technology company that develops, manufactures and markets innovative wound care, anti-microbial and oral care products for the military, emergency medical, surgical, dental and over-the-counter markets. HemCon has subsidiaries in the United Kingdom and Europe. The bankruptcy filing comes after an en banc decision by the U.S. Court of Appeals for the Federal Circuit on March 15, 2012, which affirmed an award of $34.2 million in damages to Marine Polymer Technologies Inc. in a patent infringement case initiated in 2006. HemCon's European subsidiary is not subject to the Chapter 11 proceedings. Judge Elizabeth L. Perris presides over the case. Attorneys at Tonkon Torp LLP represent the Debtor. The petition was signed by Nick Hart, CFO. Robert D. Miller Jr., U.S. Trustee for Region 18 appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of HemCon Medical Technologies, Inc. The Committee has appointed Marine Polymer as its chair. HEMCON MEDICAL: Obsidian Finance Approved as Financial Consultant ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon authorized HemCon Medical Technologies, Inc., to employ Obsidian Finance Group, LLC, as its financial consultant, effective as of April 25, 2012. As reported in the Troubled Company Reporter on June 5, 2012, Obsidian Finance will perform an analysis of Debtor's financial situation and provide critical advice to Debtor and its management on the prospects for a successful reorganization and satisfaction of claims in this case for these hourly rates: Senior Principals $600 Vice Presidents $450 Assistant Vice Presidents $400 Project Analysts/Associates $200 - $300 Administrative $100 - $125 About HemCon Medical Technologies Portland, Oregon-based HemCon Medical Technologies Inc., fdba HemCon, Inc. filed a Chapter 11 bankruptcy petition (Bankr. D. Ore. Case No. 12-32652) on April 10, 2012, estimating up to $50 million in assets and liabilities. Founded in 2001, HemCon -- http://www.hemcon.com/-- is a diversified medical technology company that develops, manufactures and markets innovative wound care, anti-microbial and oral care products for the military, emergency medical, surgical, dental and over-the-counter markets. HemCon has subsidiaries in the United Kingdom and Europe. The bankruptcy filing comes after an en banc decision by the U.S. Court of Appeals for the Federal Circuit on March 15, 2012, which affirmed an award of $34.2 million in damages to Marine Polymer Technologies Inc. in a patent infringement case initiated in 2006. HemCon's European subsidiary is not subject to the Chapter 11 proceedings. Judge Elizabeth L. Perris presides over the case. Attorneys at Tonkon Torp LLP represent the Debtor. The petition was signed by Nick Hart, CFO. Robert D. Miller Jr., U.S. Trustee for Region 18 appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of HemCon Medical Technologies, Inc. The Committee has appointed Marine Polymer as its chair. HEMCON MEDICAL: Tonkon Torp Approved as Bankruptcy Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon authorized HemCon Medical Technologies, Inc., to employ Tonkon Torp LLP as Chapter 11 counsel, nunc pro tunc to April 10, 2012. As reported in the Troubled Company Reporter on June 5, 2012, Tonkon Torp will, among other things, advise the Debtor on its debt restructuring and render the Debtor general legal services for these hourly rates: Albert N. Kennedy, Partner $475 Michael W. Fletcher, Partner $350 Spencer Fisher, Paralegal $125 Leslie Hurd, Legal Asst/Paralegal $90 To the best of the Debtor's knowledge, Tonkon Torp is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About HemCon Medical Technologies Portland, Oregon-based HemCon Medical Technologies Inc., fdba HemCon, Inc. filed a Chapter 11 bankruptcy petition (Bankr. D. Ore. Case No. 12-32652) on April 10, 2012, estimating up to $50 million in assets and liabilities. Founded in 2001, HemCon -- http://www.hemcon.com/-- is a diversified medical technology company that develops, manufactures and markets innovative wound care, anti-microbial and oral care products for the military, emergency medical, surgical, dental and over-the-counter markets. HemCon has subsidiaries in the United Kingdom and Europe. The bankruptcy filing comes after an en banc decision by the U.S. Court of Appeals for the Federal Circuit on March 15, 2012, which affirmed an award of $34.2 million in damages to Marine Polymer Technologies Inc. in a patent infringement case initiated in 2006. HemCon's European subsidiary is not subject to the Chapter 11 proceedings. Judge Elizabeth L. Perris presides over the case. Attorneys at Tonkon Torp LLP represent the Debtor. The petition was signed by Nick Hart, CFO. Robert D. Miller Jr., U.S. Trustee for Region 18 appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of HemCon Medical Technologies, Inc. The Committee has appointed Marine Polymer as its chair. HOUGHTON MIFFLIN: Case Moved to Boston Following Confirmation ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that what remains of the Houghton Mifflin Harcourt Publishing Co. reorganization was sent Thursday to the U.S. Bankruptcy Court in Boston. The bankruptcy judge in New York ruled on June 22, the day after he signed an order confirming Houghton's prepackaged plan, that the case was improperly filed in New York. The judge said he would send the case away officially when the reorganization plan was implemented. According to the report, there will be no further proceedings in New York. As a result, the bankruptcy judge in Boston, where the company is based, will rule on professionals' fee requests. The New York judge decided he was required to send the case away because none of the Houghton companies was incorporated in New York and none had principal assets or a principal place of business in Manhattan. About Houghton Mifflin Houghton Mifflin Harcourt Publishers Inc., headquartered in Boston, Massachusetts, is one of the three largest U.S. education publishers focusing on the K-12 market with roughly $1.3 billion of revenue for fiscal year ended December 2011. Houghton Mifflin Harcourt and its affiliates filed a prepackaged Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-12171) on May 21, 2012. Paul, Weiss, Rifkind, Wharton & Garrison LLP has been tapped as bankruptcy counsel. Blackstone Advisory Services, LP, is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. The Debtor disclosed assets of $2.68 billion and debt totaling $3.535 billion as of the Chapter 11 filing. Houghton Mifflin on June 22 obtained confirmation of its prepackaged Chapter 11 reorganization plan. The Debtor promptly completed the Plan's closing conditions and emerged from bankruptcy. The plan gives ownership of the company to senior secured creditors in exchange for debt. Trade and other unsecured creditors will be paid in full in the ordinary course of business. Stockholders are receiving seven-year warrants for 5% of the stock exercisable at a price equivalent to a $3.1 billion equity value for the reorganized company. HOUGHTON MIFFLIN: Exit From Bankruptcy Cues Fitch to Raise Ratings ------------------------------------------------------------------ Fitch Ratings has upgraded the long-term IDR on Houghton Mifflin Harcourt Publishers Inc. (HMH) and its subsidiaries to 'B+' from 'D'. The rating action follows HMH's exit from bankruptcy. The Rating Outlook is Stable. HMH continues to be a leader in the K-12 educational material and services sector, capturing 41% of its Association of American Publishers addressable market. Fitch believes investments made into digital products and services will position HMH to take a meaningful share of the rebound in the K-12 educational market. Fitch's expects HMH will be able to, at a minimum, maintain its market share. Fitch expects Basal revenues to continue to decline in the mid to high- single digits in 2012. Under Fitch conservative base case, total revenues decline in the low single digits can be accommodated within the current ratings. The education business is in a cyclical trough. Fitch believes that HMH and its peers will benefit from the adoption of common core standards in 2014/2015. Post-bankruptcy, HMH has materially more financial flexibility to invest into digital content and new business initiatives. These investments into international markets and adjacent K-12 educational material markets may provide diversity away from highly cyclical state and local budgets. Fitch calculates post plate unadjusted gross leverage of 2.1x as of March 31, 2012 (pro forma the restructuring). Fitch expects leverage to decline by years end, remaining above 1x. Funded debt upon bankruptcy exit is $250 million in senior secured amortizing term loans due 2018. Fitch does not believe that the post-bankruptcy capital structure will be permanent. The current private equity ownership and the risk to HMH's balance sheet from shareholder friendly actions. Fitch believes the sponsors may look to extract shareholder returns (leveraged dividend) prior to exiting their investment. Fitch does not believe that such a transaction would occur in the near term. Key Rating Drivers: -- Revenue declines in the mid-single digits could result in rating pressures; -- Long term, meaningful diversification into international markets and into new business initiatives could lead to rating upgrades; Liquidity consists of approximately $140 million in cash and HMH's undrawn $250 million ABL facility. Fitch expects 2012 ending cash balance to be $350 million to $450 million. Fitch's expects free cash flow (FCF) to continue to be negative in 2012. This is impacted in part by cost associated with the new debt issuance, bankruptcy filings and interest payments associated with its previous $3.1 billion debt balance. However, Fitch expects FCF to turn positive by 2014. Fitch's FCF expectations incorporate expectation that HMH will invest in digital products and adjacent K-12 educational material markets. Fitch believes HMH has sufficient liquidity to endure negative FCF over the next one to two years. Term loan facility provisions/covenants includes 1% annual required amortization and a provision that requires 50% of excess cash flow to be dedicated to reducing debt balances. Starting in 2014, the excess cash flow repayment is not required if covenant leverage is under 0.75x. The agreement also includes, covenant leverage of 2.25x (declining to 2x on Dec. 31, 2013); interest coverage of 7x (increasing ultimately to 9x by March 31, 2014); and change of control provision. Fitch notes that the restricted payments are primarily limited by the financial covenants and a required minimum liquidity of $250 million. Given the strong recovery prospects, the $250 million senior secured term loan and the $250 million asset backed credit facility is notched up to 'BB+/RR1' rating. This Recovery Rating analysis reflect a restructuring scenario (going-concern) and an adjusted, distressed enterprise valuation of $1.4 billion using a 6 times (x) multiple. Fitch has taken the following rating actions: HMH Publishers -- IDR upgraded to 'B+' from 'D'; -- Senior secured term loan assigned 'BB+/RR1'; -- Senior secured asset backed revolver assigned 'BB+/RR1'; -- Secured first lien credit facility 'C/RR4' ratings are withdrawn; -- Senior secured first lien notes 'C/RR4' ratings are withdrawn. Houghton Mifflin Harcourt Publishing Company -- IDR upgraded to 'B+' from 'D'. HMH Publishers LLC -- IDR upgraded to 'B+' from 'D'. The Rating Outlook is Stable. HOWELL TOWNSHIP, MI: Fitch Rates 3 LTGO Bond Classes at Low-Bs -------------------------------------------------------------- Fitch Ratings has taken the following actions on the following limited tax general obligation (LTGO) bonds for Howell Township, Michigan (the township): -- $2.85 million LTGO bonds series 2004, to 'BB' from 'BBB'; -- $16.48 million special assessment limited tax bonds, series 2005, 2006, and 2007, to 'BB' from 'BBB'; -- Implied unlimited tax general obligation bonds to 'BB+' from 'BBB+'. Fitch has also placed the bonds on Rating Watch Negative. SECURITY The special assessment bonds are secured by special assessments associated with various special assessment districts. They are also secured, as are LTGO bonds, by ad valorem taxes levied on all taxable property in the township (subject to statutory and constitutional limitations). Debt service on LTGO bonds has historically been paid from revenues from the waste water treatment plant that the bonds were issued to construct. KEY RATING DRIVERS PASSAGE OF ADDITIONAL MILLAGE CRUCIAL TO OPERATIONS: The downgrades and Rating Watch Negative reflect Fitch's concerns that without the passage of an additional millage, debt service payments for the special assessment bonds will deplete available reserves and significantly increase the probability of a default. GENERAL FUND LIQUIDITY ADEQUATE: A loan was made to the water/sewer (w/s) fund to pay debt service in 2011 and revenue raising opportunities have been limited. Nonetheless, the general fund has maintained an adequate level of liquidity due to expenditure reductions and careful cost containment practices. RATE INCREASES HAVE NOT RESTORED STABILITY: The township has raised utility rates and introduced a debt service fee for the w/s fund. However these increases have been insufficient to allow the w/s fund to fully support LTGO bonds, as was intended. Repayment is therefore reliant on general fund support. TAXABLE VALUES DECLINING: Past declines in taxable value (TV) combined with a limited tax base are a concern as property tax revenue is approximately 43% of general fund revenues. REVENUE RAISING OPTIONS LIMITED: While general fund liquidity is currently adequate, the one-notch distinction between the ULTGO- implied rating and the LTGO rating reflects the limited level of financial flexibility given that the township's revenue raising options are restricted. TOWNSHIP OPERATIONS LIMITED: General fund reserves are adequate. However, the township's small budget leaves little margin for unexpected revenue shortfalls or spending needs. WHAT COULD TRIGGER A RATING ACTION: FAILURE TO APPROVE ADDITIONAL MILLAGE: Fitch believes passage of the 3.5 mill five-year tax levy is crucial to township operations and the failure of this millage will significantly increase the probability of a default. REDUCTION OF GENERAL FUND RESERVES: Drains on general fund and other reserves to fund debt service on special assessment bonds would apply significant pressure and could result in further rating action. CREDIT PROFILE W/S OPERATIONS REMAIN UNSTABLE The special assessment bonds provided financing for w/s infrastructure in anticipation of housing developments that did not occur due to the economic downturn. The general fund loaned the w/s fund approximately $1.1 million to cover debt service and expenditures in fiscal 2011 with no set repayment schedule. W/S rates have since been increased (sewer rate doubled while water rate increased 30%) and the township instated debt service fee. While the increases generate additional revenue, restoration of the w/s fund to self- supporting operations remains reliant on the passage of an additional 3.5 mill levy. This would also allow for debt repayment from the general fund. ADDITIONAL LEVY CURCIAL TO OPERATIONS On Aug. 7, township voters will be asked to approve a 3.5 mill, five-year tax levy to cover the debt service payments for the w/s special assessment bonds. The 3.5 mills would provide an additional $1 million in revenue, compared to average annual debt service of $2.2 million. Without the passage of this millage, the township will likely exhaust all available reserves including general fund reserves. Management has publicly stated that without the levy it would miss a bond payment within the next year. If not approved in August, the levy would be placed on the ballot again in November. Failure to pass the millage in either August or November would likely result in further rating action. Township management has stated that if the November ballot initiative fails they will continue to ask voters to approve additional millages (albeit at a lower rate). In addition to the millage, w/s rate increases and the sale of tax lien properties are being pursued. POSITIVE GENERAL FUND OPERATIONS The township has maintained large unreserved general fund balances relative to the very small budget in the past four years and produced similar results in fiscal 2011. Ending unrestricted general fund balance (the sum of assigned, unassigned, and committed under GASB 54) was $2.4 million or 326% of expenditures. Township management estimates that they have approximately $1 million cash on hand in the general fund. This provides a small cushion for any unexpected revenue shortfalls or spending needs. However, drastic expenditure reductions have left little room for further cuts and revenue raising opportunities are limited. INCREASES IN GENERAL FUND REVENUE UNCERTAIN Taxable values (TV) in the township saw sharp declines in recent years with the largest decline of 12% occurring in fiscal 2011. 2012 TV declined 1.5%, below the 5%-7% declines projected by the county assessor and well below the 15% decline budgeted for by the township. Declines in TV are a cause for concern as property tax revenue is the township's largest revenue source, at approximately 43% of total general fund revenues. The township is already levying the maximum operating millage under the Headlee amendment. The township's tax base is very small, magnifying concerns about the potential volatility of property tax revenue. The township's other main revenue source is state funding which was approximately 43% of total general fund revenues is fiscal 2011. Declines in fiscal 2009 and 2010 were reversed with a large increase in 2011. As the state economy begins to recover it is likely that the township will see small increases in state aid as well. The township is not eligible for the Economic Incentive Vitality Program portion of state aid and is therefore less vulnerable to state aid reductions. LIMITED LOCAL ECONOMY SHOW SIGNS OF IMPROVEMENTS Howell Township is located between Lansing and Detroit where the majority of its residents commute to work, generally in the hi- tech, higher education, and health care sectors. Township employment data is unavailable. However, unemployment in Livingston County was 7.9% in March 2012, well below the state rate of 9% and the national rate of 8.4%. Unemployment in the county has declined over 25% from the same month last year, with minimal labor force declines indicating the possible beginnings of a recovery. Expansions at Magna (Food Services and Baking Equip.) and BD Electrical combined with the relocation of Automatic Turning (transmission shaft and gear manufacturer for off-highway equipment) formerly AA Gear (gear grind shop and research/development house) to the township will provide for additional job growth in the area. ELEVATED DEBT BURDEN, MANAGEABLE PENSION OBLIGATIONS The township's overall debt burden is elevated at $4,319 per capita and 10% of market value (including the special assessment bonds). Principal amortization is above average, with 70% of the total outstanding retired within 10 years. Pensions for township employees are provided through a township run single employer defined contribution plan. The fiscal 2011 contribution was moderate at 7% of general fund expenditures and the township regularly contributes 100% of the required amount. Other post employment benefits are not provided. INTERNATIONAL GOSPEL: Lawyer Can Receive Payment From Excess Funds ------------------------------------------------------------------ A twist in the Chapter 11 case of International Gospel Party Boosting Jesus Groups, Inc., now permits the Debtor's bankruptcy counsel to be paid for services rendered following appointment of a Chapter 11 trustee. Both the United States trustee and the Chapter 11 trustee objected to the Fee Application in part, asserting that David Nickless, Esq., counsel to International Gospel, cannot, consistent with 11 U.S.C. Sec. 330(a) as interpreted by the Supreme Court in Lamie v. U.S. Trustee, 540 U.S. 526 (2004), be compensated by the bankruptcy estate for services rendered following the appointment of the Chapter 11 trustee. "But here there is a twist. Attorney Nickless seeks payment from funds that will not be necessary to pay creditors. There are sufficient funds in this case to pay creditors in full, and the funds from which Attorney Nickless seeks payment constitute the type of 'surplus' typically returned to a debtor after dismissal of a Chapter 11 case, pursuant to Sec. 349 of the United States Bankruptcy Code," Bankruptcy Judge Henry J. Boroff said. Judge Boroff directed the Chapter 11 trustee to pay $10,345.45 to Mr. Nickless, representing his unpaid fees of $10,088 and unpaid expenses of $257.45. Judge Boroff said under Sec. 349(b), the Court retains jurisdiction over the surplus, non-estate funds to direct distribution to an entity other than the Debtor for cause. "Since Attorney Nickless's reasonable, uncontested fees remain unpaid, the Court finds cause for directing the Trustee to pay Attorney Nickless the remainder of the compensation he is owed upon dismissal of the case," the judge held. A copy of the Court's June 28, 2012 Order is available at http://is.gd/P1JRZIfrom Leagle.com. About International Gospel International Gospel Party Boosting Jesus Groups Inc., a Massachusetts non-profit organization, filed for Chapter 11 protection (Bankr. D. Mass. Case No. 10-19012) on Aug. 19, 2010. Its real estate at 554 Massachusetts Avenue in Boston was the only discernible asset at the time of filing. In its Schedule, the Debtor estimated the Property's value at $1,425,100, and disclosed encumbrances totaling $775,000. Shortly after the case filing, it became apparent that the Debtor was operating without the benefit of cash collateral authorization. On Oct. 12, 2010, the Court, sua sponte, ordered the appointment of a Chapter 11 trustee; on Oct. 15, the Court approved the appointment of Attorney Joseph G. Butler. Although no Chapter 11 plan of reorganization has been proposed or confirmed, the Debtor's estate has essentially been fully administered. Two matters related to the case remain pending. The first is the appeal taken by Jeff Ross, the buyer of the Property, from the Court's order denying him payment of one-half of the broker's commission in connection with the sale of the Property. The second unresolved issue is whether and when Attorney Nickless will be compensated for services rendered to the Debtor after the appointment of the Chapter 11 Trustee. JER/JAMESON: Wants Until Oct. 20 to Propose Chapter 11 Plan ----------------------------------------------------------- JER/Jameson Mezz Borrower I LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to file and solicit acceptances for the proposed chapter 11 Plan until Oct. 20, 2012, and Dec. 19, respectively. The Debtors, in their request for a second extension, explained that, among other things: -- their ability to timely file a chapter 11 plan has been affected by, among other things, prior delays associated with the litigation concerning the dismissal motion and various administrative tasks associated with the cases, such as the submission of the Debtors' schedules of assets and liabilities and schedules of financial affairs; and -- the Debtors and their directors, officers, management, counsel and lenders have been engaged in ongoing efforts to resolve certain claims asserted by either for professionals of the Debtors or individuals and entities who purport or purported to be officers, directors or managers of one or more of the Debtors. A hearing on July 25, at 9:30 a.m. (EST) has been set. Objections, if any, are due July 6, at 4 p.m. About JER/Jameson Mezz Borrower II Founded in 1987, Jameson is a chain of 103 small, budget hotels operating under the Jameson brand in the Southeast and Midwest. The Jameson properties are operated under the names Jameson Inn and Signature Inn. The hotels are based in Smyrna, Georgia. The chain was taken private in a 2006 buyout by JER Partners, a unit of real-estate investor J.E. Robert Cos. JER then put $330 million of debt on the chain to finance the buyout. At the top of the list is a $175 million mortgage loan with Wells Fargo Bank NA serving as special servicer. There are four tranches of mezzanine loans, each for $40 million. The collateral for each of the Mezz Loans is the equity interest in the entity or entities immediately below the borrower of each Mezz Loan. All of the mezzanine loans matured in August. JER/Jameson NC Properties LP and JER/Jameson Properties LLC are borrowers under the loan with Wells Fargo. The mortgage loan is secured by mortgages on hotel properties. The first set of foreclosure sales were set for Nov. 1, 2011. The Mortgage Borrowers have not sought bankruptcy protection. Colony Capital affiliates, CDCF JIH Funding LLC and ColFin JIH Funding LLC, hold the first and second mezzanine loans. The First Mezz Loan is secured by a pledge of JER/Jameson Mezz Borrower I LLC's 100% interest in the Mortgage Borrowers. Prior to the maturity default, the Colony JIH Lenders purchased the Second Mezz Loan from a previous holder. The Second Mezz Loan is secured by a pledge of JER/Jameson Mezz Borrower II's 100% membership interest in the First Mezz Borrower. Gramercy Warehouse Funding I LLC and Gramercy Loan Services LLC hold a controlling participation interest in the Third Mezz and Fourth Mezz Loans. JER Investors Trust Inc. holds the remaining participation interests in the Third Mezz and Fourth Mezz Loans. JER/Jameson Holdco LLC, an affiliate of the Mortgage Borrowers, owns the 100% equity interest in the Fourth Mezz Borrower. Gramercy took over its mezzanine borrower in August. JER/Jameson Mezz Borrower II LLC filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13338) on Oct. 18, 2011, to prevent foreclosure by Colony. The Chapter 11 filing had the effect of preventing Colony from wiping out Gramercy's interest. Seven days later, JER/Jameson Mezz Borrower I LLC filed for bankruptcy (Bankr. D. Del. Case No. 11-13392) on Oct. 25, 2011. Judge Mary F. Walrath presides over the case. The Debtors tapped Ashby & Geddes, P.A. to represent their restructuring efforts. Epiq Bankruptcy Solutions, LLC, serves as its noticing, claims and balloting agent. Each of the Debtors estimated $100 million to $500 million in assets and $10 million to $50 million in debts. JER/Jameson Properties LLC disclosed $294,662,815 in assets and $163,424,762 in liabilities as of the Chapter 11 filing. The petitions were signed by James L. Gregory, vice president. Colony specializes in real estate and has roughly $34 billion of assets under management. Colony is represented in the case by Pauline K. Morgan, Esq., John T. Dorsey, Esq., Margaret Whiteman Greecher, Esq., and Patrick A. Jackson, Esq., at Young Conaway Stargatt & Taylor LLP; and Lindsee P. Granfield, Esq., Sean A. O'Neil, Esq., and Jane VanLare, Esq., at Cleary Gottlieb Steen & Hamilton LLP. The U.S. Trustee has not appointed an official Committee of unsecured creditors in any of the Debtors' cases. KBK INC.: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: KBK, Inc. 2110 Park Chesapeake Drive Lusby, MD 20657 Bankruptcy Case No.: 12-21780 Chapter 11 Petition Date: June 24, 2012 Court: U.S. Bankruptcy Court District of Maryland (Greenbelt) Judge: Thomas J. Catliota Debtor's Counsel: Augustus T. Curtis, Esq. COHEN, BALDINGER & GREENFELD, L.L.C. 7910 Woodmont Avenue, Suite 1103 Bethesda, MD 20814 Tel: (301) 881-8300 Fax: (301) 881-8350 E-mail: augie.curtis@cohenbaldinger.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/mdb12-21780.pdf The petition was signed by Wade Kingsley, president. KENAN ADVANTAGE: S&P Affirms 'BB-' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on North Canton, Ohio-based Kenan Advantage Group Inc., including the 'BB-' corporate credit rating. "At the same time, we affirmed our 'BB-' issue rating and '3' recovery rating on the company's senior secured credit facility, which it upsized to upsized $700 million. The '3' recovery rating indicates our expectation of a meaningful (50%-70%) recovery of principal in a payment default scenario," S&P said. "The ratings affirmation reflects Kenan Advantage's strategy of debt-financed acquisitions, which have increased earnings over the past few quarters," said Standard & Poor's credit analyst Anita Ogbara. "However, we expect the company to continue to employ an aggressive financial policy as it relates to financial leverage." "Over the past several years, Kenan Advantage has expanded by consolidating small private carriers and increasing its geographic footprint through midsize strategic acquisitions. Currently, credit metrics are acceptable for the ratings, but credit metrics likely will fluctuate somewhat with the timing of acquisitions," S&P said. "Kenan Advantage operates in a competitive and fragmented industry with relatively modest returns. However, the company maintains a leading market position in short-haul-truck fuel delivery and a diverse mix of customers, geographic regions, and end markets. Kenan Advantage serves 48 states in the U.S., as well as Canada and Mexico. The company operates approximately 162 terminals and 176 satellite locations and maintains a specialized fleet of approximately 4,400 tractors and more than 5,800 trailers," S&P said. "The outlook is stable, reflecting Standard & Poor's expectation for modest improvement in earnings and cash flow over the next several quarters, given stable demand for liquid bulk transportation services and disciplined acquisition spending," S&P said. KLN STEEL: Court Denies Banco Popular's Case Conversion Motion -------------------------------------------------------------- The Hon. Craig A. Gargotta of the Western District of Texas denied lender Banco Popular North America's motion to convert KLN Steel Products Co. LLC's Chapter 11 case to one under Chapter 7 of the Bankruptcy Code. As reported in the Troubled Company Reporter on April 25, 2012, Banco Popular sought to have the Debtor's bankruptcy case converted to a liquidation because there is no buyer for KLN's operations and assets. Banco Popular, in its motion, stated that Avteq Inc., a major KLN customer, was unable to obtain financing to move forward with the purchase, and no other bidders have emerged. The TCR on June 5, 2012 reported that Avteq has obtained a line of credit from its bank to proceed with the purchase. About KLN Steel Products KLN Steel Products Company LLC, Dehler Manufacturing Co. Inc., and Furniture by Thurston manufacture and market high quality furniture for multi-person housing facilities and packaged services for federal government offices and dormitory facilities. They have two manufacturing facilities. One is in San Antonio, Texas, which is consolidated and designed to accommodate high volume fabrication of standard and semi-custom steel furniture and case goods of high quality for colleges and universities, military quarters, and job corps centers, or wherever high quality, long life, low maintenance furniture is essential. The facility includes a manufacturing facility of more than 170,000 square feet capable of producing substantial projects on a timely basis. The second facility is located in Grass Valley, California, with more than 61,000 square feet dedicated to the manufacturing of wood furniture for military and university housing. KLN Steel filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-12855) on Nov. 22, 2011. Dehler (Case No. 11-12856) and Furniture by Thurston (Case No. 11-12858) filed on the same day. Judge Craig A. Gargotta oversees the case. Patricia Baron Tomasco, Esq., at Jackson Walker LLP, serves as the Debtors' counsel. Horwood Marcus & Berk Chartered serves as their special counsel. Conway MacKenzie, Inc., serves as financial advisor. Each of the Debtors estimated assets and debts of $10 million to $50 million. San Antonio, Texas-based 4200 Pan Am LLC filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-13154) on Dec. 29, 2011. Judge Gargotta oversees the case, taking over from Judge H. Christopher Mott. Patricia Baron Tomasco, Esq., at Jackson Walker LLP, serves as 4200 Pan Am's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Edward J. Herman, manager. 4200 Pan Am sought joint administration of its case with those of affiliates Dehler, Furniture By Thurston, and KLN. The Official Committee of Unsecured Creditors in the Chapter 11 cases of KLN Steel Products Company, LLC, et al., is represented by Hall Attorneys, P.C. The Committee tapped Navigant Consulting (PI), LLC as its financial advisor. KLN STEEL: Third Amended Reorganization Plan Confirmed ------------------------------------------------------ The Hon. Craig A. Gargotta of the Western District of Texas confirmed KLN Steel Products Co. LLC, et al.'s Third Amended Plan of Reorganization dated May 24, 2012. As reported in the Troubled Company Reporter on June 5, 2012, KLN Steel Products Co. LLC and its two sister companies will be sold to a Dallas company as part of a Chapter 11 reorganization plan which calls for Avteq Inc. to make some payments and assume various liabilities that combined are about $11 million. A full-text copy of the order and the Third Amended Plan is available for free at: http://bankrupt.com/misc/KLNSTEEL_3RdAPlan_order.pdf On May 30, 2012, Judy A. Robbins, U.S. Trustee for Region 7, filed an objection to the confirmation of the Debtors' Second Amended Plan stating that the Debtors/Liquidating Trust must be required to file a notice of the Effective Date with the Court because Class 20[c] claims will be paid within six months after the Effective Date. The U.S. Trustee explained that without knowing the Effective Date, claimants in that class will not know when they will receive payment or whether there is a default under the Plan. About KLN Steel Products KLN Steel Products Company LLC, Dehler Manufacturing Co. Inc., and Furniture by Thurston manufacture and market high quality furniture for multi-person housing facilities and packaged services for federal government offices and dormitory facilities. They have two manufacturing facilities. One is in San Antonio, Texas, which is consolidated and designed to accommodate high volume fabrication of standard and semi-custom steel furniture and case goods of high quality for colleges and universities, military quarters, and job corps centers, or wherever high quality, long life, low maintenance furniture is essential. The facility includes a manufacturing facility of more than 170,000 square feet capable of producing substantial projects on a timely basis. The second facility is located in Grass Valley, California, with more than 61,000 square feet dedicated to the manufacturing of wood furniture for military and university housing. KLN Steel filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-12855) on Nov. 22, 2011. Dehler (Case No. 11-12856) and Furniture by Thurston (Case No. 11-12858) filed on the same day. Judge Craig A. Gargotta oversees the case. Patricia Baron Tomasco, Esq., at Jackson Walker LLP, serves as the Debtors' counsel. Horwood Marcus & Berk Chartered serves as their special counsel. Conway MacKenzie, Inc., serves as financial advisor. Each of the Debtors estimated assets and debts of $10 million to $50 million. San Antonio, Texas-based 4200 Pan Am LLC filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 11-13154) on Dec. 29, 2011. Judge Gargotta oversees the case, taking over from Judge H. Christopher Mott. Patricia Baron Tomasco, Esq., at Jackson Walker LLP, serves as 4200 Pan Am's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Edward J. Herman, manager. 4200 Pan Am sought joint administration of its case with those of affiliates Dehler, Furniture By Thurston, and KLN. The Official Committee of Unsecured Creditors in the Chapter 11 cases of KLN Steel Products Company, LLC, et al., is represented by Hall Attorneys, P.C. The Committee tapped Navigant Consulting (PI), LLC as its financial advisor. LARSON LAND: Ball Janik Approved as Chapter 11 Trustee's Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Idaho authorized the Chapter 11 Trustee of Larson Land Company LLC, fka Select Onion Co. LLC, to employ Ball Janik LLP as counsel. As reported in the Troubled Company Reporter on June 7, 2012, Ball Janik is expected to: a) prepare all necessary applications, motions, memoranda, responses, complaints, answers, orders, notices, reports, and other papers required from the Trustee in connection with administration of the case; b) take all actions necessary to protect and preserve the Debtor's bankruptcy estate, including the prosecution of actions on the Trustee's behalf, the defense of any actions commenced against the Debtor's bankruptcy estate, negotiations concerning all litigation in which the Trustee is involved, objections to claims filed in this bankruptcy case, and the compromise or settlement of claims; c) represent the Trustee in all other aspects of the Chapter 11 case; and d) provide such other legal advice or services as may be required in connection with this Chapter 11 case or the general operation and management of the Debtor's business and/or the conduct of the Debtor's financial affairs. The firm's rates are: Professional Status Rates ------------ ------ ----- Brad T. Summers Partner $450 David W. Criswell Partner $435 Mathew W. Lauritsen Associate $260 Thorkild G. Tingey Associate $225 Carole E. Brock Paralegal $195 Brad T. Summers, Esq., attests the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Larson Land Company Ontario, Oregon-based Larson Land Company LLC, fka Select Onion Co. LLC -- http://www.selectonion.com/-- a privately held agribusiness company that grows, stores, processes and ships bagged onions, fresh processed onions, whole peel onions, IQF onions, and delicious raw breaded hand packed onion rings, filed a Chapter 11 petition (Bankr. D. Idaho Case No. 12-00820) in Boise, Idaho, on April 12, 2012, estimating assets of up to $100 million and debts of up to $500 million. Judge Terry L. Myers presides over the case. Brent T. Robinson, Esq., at Robinson, Anthon & Tribe, serves as the Debtor's counsel. The petition was signed by Farrell Larson, president. LARSON LAND: Hawley Troxell as Chapter 11 Trustee's Attorney ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Idaho authorized the Chapter 11 Trustee of Larson Land Company LLC, fka Select Onion Co. LLC, to employ Hawley Troxell Ennis & Hawley, LLP as attorney. As reported in the Troubled Company Reporter on June 7, 2012, Hawley Troxell attorneys' hourly rates are: Professional Status Rates ------------ ------ ----- Sheila R. Schwager partner $250 Nicholas Smith associate $160 Kathy Royster paralegal $125 The Chapter 11 Trustee attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Larson Land Company Ontario, Oregon-based Larson Land Company LLC, fka Select Onion Co. LLC -- http://www.selectonion.com/-- a privately held agribusiness company that grows, stores, processes and ships bagged onions, fresh processed onions, whole peel onions, IQF onions, and delicious raw breaded hand packed onion rings, filed a Chapter 11 petition (Bankr. D. Idaho Case No. 12-00820) in Boise, Idaho, on April 12, 2012, estimating assets of up to $100 million and debts of up to $500 million. Judge Terry L. Myers presides over the case. Brent T. Robinson, Esq., at Robinson, Anthon & Tribe, serves as the Debtor's counsel. The petition was signed by Farrell Larson, president. The bankruptcy judge appointed a Chapter 11 trustee at the behest of the U.S. Trustee. LAXMI ENTERPRISES: Case Summary & 8 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Laxmi Enterprises, Inc. dba Comfort Inn 70 Springdale Boulevard Mobile, AL 36606 Bankruptcy Case No.: 12-02216 Chapter 11 Petition Date: June 27, 2012 Court: United States Bankruptcy Court Southern District of Alabama (Mobile) Debtor's Counsel: Robert M. Galloway, Esq. GALLOWAY WETTERMARK EVEREST RUTENS & GAILLARD P.O. Box 16629 Mobile, AL 36616-0629 Tel: (251) 476-4493 E-mail: bgalloway@gallowayllp.com Scheduled Assets: $1,981,500 Scheduled Liabilities: $1,341,853 A copy of the Company's list of its eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/alsb12-02216.pdf The petition was signed by Puyish Patel, president. LIBERTY CABLEVISION: S&P Assigns 'B' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services assigned Puerto Rican cable-TV operator Liberty Cablevision of Puerto Rico LLC (LCPR) its 'B' corporate credit rating. The outlook is stable. "We also assigned our 'B+' issue-level rating and '2' recovery rating to the new credit facility, consisting of a $175 million five-year term loan and a $10 million five-year revolving credit facility. The '2' recovery rating indicates expectations of substantial (70%-90%) recovery prospects in the event of a payment default. These ratings are predicated on close of the merger agreement with San Juan Cable, which is subject to regulatory approval, and incorporate a pro forma leverage for the merged entity of around 6x," S&P said. "The rating on LCPR reflects its 'highly leveraged' financial risk profile, with debt to EBITDA of about 6x, pro forma for the completion of the merger with San Juan Cable Holdings," said Standard & Poor's credit analyst Catherine Cosentino. "In addition, the company has a 'weak' business risk profile, which incorporates its lagging video market penetration compared with U.S. peers due both to high off-air TV viewing and continued competition from satellite direct-to-home (DTH) TV companies. Other business risk factors include a lack of geographic diversity, the challenges of a fairly weak macroeconomic environment, and the potential for increased competition from telecom providers. Claro is the wireline provider of telephony and data services in Puerto Rico, and has announced plans to introduce a competing TV offering following recent receipt of regulatory approval. Tempering factors include good revenue visibility from its subscription-based business model and some potential for growth from bundled advanced services provided over the merged company's upgraded cable plant," S&P said. "We do not incorporate ratings uplift from the merged entity's majority owner, U.S. international cable-TV operator and broadband services provider Liberty Global Inc. (LGI; B+/Positive/--), since we do not consider the merged company strategically important to LGI, especially if the merged entity's operations deteriorate materially. However, we do factor in the possibility of near-term parental support (should the need arise) in our assessment of the merged company's liquidity profile, which we consider 'adequate.' We would assess the merged company's stand-alone credit profile as 'B', the same as its long-term credit rating," S&P said. "In addition, the ratings are likely to remain capped over the medium term by those of its majority-owned U.S. international cable-TV operator and broadband services provider LGI, primarily due to LGI's majority control over the merged company's corporate strategy and financial policy, and also by what we see as LGI's very aggressive financial policy," S&P said. "The outlook is stable. The merged company will benefit from the revenue visibility inherent in cable's subscription-based business model and has the potential for some additional growth in cash flow from increased telephony and broadband penetration. We also expect the merged entity to benefit from some integration savings, enabling it to modestly improve leverage from the approximate 6x pro forma level anticipated at close," S&P said. "However, more aggressive competition from the satellite providers or from IPTV deployment by Claro, could translate into higher subscriber churn and bad debt, or increased pricing pressures. Such adverse factors could prompt a downgrade if resultant leverage reached 8x, especially since the associated EBITDA deterioration could constrain the company's ability to meet financial maintenance covenants and if liquidity support from LGI was not forthcoming," S&P said. "The merged company's highly leveraged financial profile currently limits a possible upgrade. However, a decrease in its leverage to below 5x, coupled with a material increase in cash flow generation from initial minimum levels, could lead us to raise the ratings, although we would not expect this to occur in the next few years. At the same time, before we consider a positive rating action, we would assess LGI management's financial policies for the merged company, particularly with regard to targeted leverage and future use of cash," S&P said. "Given the lower leverage of LCPR prior to the merger of around 4x, if the proposed merger plan with San Juan Cable were to be terminated, we would expect to raise the corporate credit rating on LCPR to 'B+', although the term loan's issue-level rating would remain 'B+' since we would expect to revise the recovery rating to '3' from '2'," S&P said. LINN ENERGY: S&P Affirms 'B+' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Houston, Texas-based Linn Energy LLC following the announcement that it will acquire BP America's Jonah Field assets for $1.025 billion. The outlook is stable. "At the same time, we placed the issue ratings on Linn's senior unsecured debt on CreditWatch with negative implications, following Linn's announcement to seek a $1 billion increase in the secured borrowing base of its credit facility," S&P said. "We affirmed the corporate credit rating on Linn Energy LLC following the recently announced $1.025 billion acquisition of properties in the Jonah Field from BP America," said Standard & Poor's credit analyst Paul B. Harvey. "We estimate debt leverage of about 4.8x as of Dec. 31, 2012, assuming debt funding of the acquisition. Although this would exceed our 4.75 downgrade threshold in 2012, we currently expect debt leverage to fall to about 4x or less in 2013. Pro forma for the potential $1 billion increase to the company's borrowing base, we expect liquidity to remain adequate." "The negative CreditWatch listing on Linn's senior unsecured debt ratings reflects the $1 billion additional commitments it plans to add to its secured credit facility--bringing the total to $3.0 billion--and the potential negative impact on senior unsecured recovery prospects despite the value added from the Jonah Field acquisitions," added Mr. Harvey. "We expect to resolve the CreditWatch listing within the next 60 to 90 days following the receipt of a June 30, 2012, reserve valuation, pro forma the Jonah Field acquisition, using our recovery price assumptions of $45 per barrel WTI crude oil and $4 per mmBtu natural gas." "We could lower the senior unsecured issue ratings to 'B-' from 'B' if the recovery rating is revised to '6', indicating our expectation for negligible (0% to 10%) recovery in the event of a payment default, from the current '5'. If the recovery rating remains unchanged (10% to 30% recovery), we could leave the existing 'B' senior unsecured issue rating unchanged," S&P said. "The ratings on Linn Energy LLC reflect the company's growing midsize reserve base, elevated financial leverage, and substantial quarterly distributions paid to unitholders. The low geological risk inherent in the company's reserve base, balanced production mix between natural gas and liquids, and substantial commodity price hedges partially offset these weaknesses," S&P said. Linn Energy is a limited liability company. However, it resembles a master limited partnership (MLP) in several ways, and Standard & Poor's generally refers to the company as an exploration and production MLP. Most notably, Linn Energy pays out substantially all available cash flow to unitholders on a quarterly basis, and equity investors tend to value the company on a yield basis. Unlike an MLP, there is neither a general partnership interest nor incentive distribution rights. "The outlook on the corporate credit rating is stable. We expect Linn to maintain run-rate debt to EBITDA between 3.5x to 4x, although debt leverage may temporarily exceed this range due to acquisitions," S&P said. "We could consider a downgrade if debt to EBITDA exceeds 4.75x on a sustained basis. Given the cash flow protection the company's strong hedge program provides, such an outcome would likely be the result of successive large debt financed acquisitions, or borrowing significantly to fund capital expenditures," S&P said. "We could consider a positive rating action if we expect adjusted debt to EBITDA will remain below 3.5x. Given Linn's high cash distributions which limit available cash flow for debt repayment, an upgrade would likely follow equity financed acquisitions if it increased EBITDA without materially raising its debt level," S&P said. LODGENET INTERACTIVE: Healthcare Chief's Contract Extended ---------------------------------------------------------- LodgeNet Healthcare, Inc., a wholly-owned subsidiary of LodgeNet Interactive Corporation entered into a new executive employment agreement with Mr. Gary Kolbeck, President of LodgeNet Healthcare, effective as of Jan. 1, 2012. Under the Agreement, Mr. Kolbeck's employment with LodgeNet Healthcare continues through Dec. 31, 2012, and will automatically renew for additional terms of one year unless notice of termination is given prior to Nov. 1 of the appropriate term. The Agreement provides that Mr. Kolbeck's base salary is $200,000. The Agreement also contains provisions regarding bonus opportunities based on formula, targets and criteria determined by the Board of Directors and severance provisions, including severance in the event of termination as a result of a change in control of the Company. The Agreement also contains a covenant not to compete with the Company for a period of twelve months following termination. About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET), formerly LodgeNet Entertainment Corp. -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. The Company reported a net loss of $631,000 in 2011, a net loss of $11.68 million in 2010, and a net loss of $10.15 million in 2009. The Company's balance sheet at March 31, 2012, showed $388.41 million in total assets, $442.16 million in total liabilities and a $53.75 million total stockholders' deficiency. * * * Lodgenet carries a 'B3' long term corporate family rating and a 'Caa1' probability of default rating, with 'stable' outlook, from Moody's. It has 'B' long term foreign and local issuer credit ratings, with 'stable' outlook, from Standard & Poor's. "In Moody's opinion, continued cautious investment from LodgeNet's hotel customers will hamper intermediate term growth in its core hospitality services business, and over the long term competing forms of entertainment will pressure this revenue stream as the company seeks to defend its relevance to both hotel operators and hotel guests. The B3 corporate family rating incorporates these weak growth prospects, mitigated somewhat by the company's moderately high financial risk profile and demonstrated capacity to generate positive free cash flow throughout challenging economic conditions, along with a measure of stability from the monthly fees it receives from hotels regardless of occupancy," Moody's said in October 2010. LSP MADISON: S&P Rates $750MM Senior Secured Term Loan 'BB+' ------------------------------------------------------------ Standard $ Poor's Ratings Services assigned its 'BB+' rating to LSP Madison Funding LLC's $750 million senior secured term loan. The recovery rating is '2', indicating its expectation of substantial recovery (70% to 90%) recovery of principal in a default scenario. The outlook on the ratings is stable. "Standard & Poor's ratings on the project reflect cash flow generation from natural gas and hydro power plants, some of which is supported by higher quality cash flows from power purchase agreements (PPA), Federal Energy Regulatory Commission (FERC)- related tariff revenues, and capacity revenues earned in the PJM Interconnection and Independent System Operator (ISO) New England capacity markets," S&P said. "We base the 'BB+' rating on the project's diversified portfolio of gas-fired and hydro assets across diverse markets, as well as moderate levels of initial leverage," said Standard & Poor's credit analyst Theodore Dewitt. "LSP Madison was created to recapitalize a diversified portfolio of power plants and has a nameplate capacity of 3,626 megawatts (MW) (3,582 MW average winter and summer capacity) and includes natural gas combined-cycle gas-turbine (CCGT) assets, gas-fired combustion turbine (CT) peaking assets, and one hydro asset. The assets have commercial operation dates ranging from 1931 (Safe Harbor) to 2003," S&P said. "The stable rating outlook reflects our expectations that the project's more stable revenue streams, consisting of PPAs, hedged power prices, and capacity payments, will allow for significant deleveraging over the loan tenor, even if merchant power revenues are weak. A ratings upgrade is unlikely given the limited asset diversity, the age of the assets, and the project's exposure to merchant power revenue. If the assets underperform operationally, causing energy gross margins and capacity payment revenue to fall below expectations, we could lower the ratings. We could also lower ratings if we materially lower our base-case assumptions, which would affect our expectations of merchant revenue. Specifically, we would consider a downgrade if we forecast a refinancing risk of $100/kW or more at the LSP Madison level," S&P said. LUBAVITCH CHABAD: Case Summary & 5 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Lubavitch Chabad of The Loop, Gold Coast and Lincoln Park, a domestic corporation 1236 North Dearborn Chicago, IL 60610 Bankruptcy Case No.: 12-25698 Chapter 11 Petition Date: June 27, 2012 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff Debtor's Counsel: Neil P. Gantz, Esq. NEIL GANTZ LAW OFFICES 105 W Madison St Chicago, IL 60602 Tel: (312) 726-4880 Fax: (312) 236-6999 E-mail: neilgantz@yahoo.com Scheduled Assets: $1,148,650 Scheduled Liabilities: $199,255 A copy of the Company's list of its five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ilnb12-25698.pdf The petition was signed by Meir Chai Benhiyoun, president. LUCAS ELECTRIC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Lucas Electric Co, Inc. 415 Mercer Street Hightstown, NJ 08520 Bankruptcy Case No.: 12-25959 Chapter 11 Petition Date: June 22, 2012 Court: U.S. Bankruptcy Court District of New Jersey (Trenton) Judge: Kathryn C. Ferguson Debtor's Counsel: Carol L. Knowlton, Esq. TEICH GROH 691 State Highway 33 Trenton, NJ 08619 Tel: (609) 890-1500 E-mail: cknowlton@teichgroh.com Scheduled Assets: $2,330,824 Scheduled Liabilities: $5,558,135 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb12-25959.pdf The petition was signed by Matthew D. Lucas, president. LUMBER PRODUCTS: From Appraiser, Murphy to Serve as Auctioneer -------------------------------------------------------------- Edward C. Hostmann, the Chapter 11 trustee for the estate of Lumber Products, seeks Court authority to employ James G. Murphy, Co. as auctioneer. The Chapter 11 trustee previously sought and obtained Court approval to employ Murphy as machinery and equipment appraiser. On May 22, 2012, the Chapter 11 Trustee filed a First Amended Motion for Order Approving (A) Sale of Assets Free and Clear of Liens, Claims and Encumbrances, (B) Assumption and Assignment of Executory Contracts, and (C) Bid Procedures. It is anticipated that some of the Debtor's equipment may not be sold pursuant to the procedures set forth in the Sale Motion and, accordingly, may need to be auctioned separately. Murphy -- webinfo@murphyauction.com -- will serve as auctioneer of any of the Debtor's equipment not sold pursuant to the Sale Motion. The Chapter 11 Trustee attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. With respect to any assets sold by Murphy at auction, Murphy will charge and retain a 10% buyer's premium from each sale. The Debtor's estate will be responsible for payment of advertising expenses and other out-of-pocket expenses incurred by Murphy in connection with the auctions; provided the incurrence of the expenses has first been approved in writing by the Chapter 11 Trustee. The expenses will be deducted and paid to Murphy from the sale proceeds. About Lumber Products Lumber Products -- http://www.lumberproducts.com/-- is a wholesale distributor of some of the finest hardwood lumber, hardwood plywood, and door and millwork products to the Northwest, Intermountain, and Southwest states since 1938. It has headquarters in Tualatin, Oregon, and operations in Oregon, Washington, Idaho, Montana, Utah, Arizona, and New Mexico. Lumber Products is the sole owner of Lumber Products Holding and Management Company. Holdco is the sole owner of: Lumber Products Holding and Management Company; Sunrise Wood Products, Inc.; Lumber Products Washington, Inc.; Components & Millwork, Inc.; Wood Window Distributors, Inc.; D&J Wood Resources, Inc.; and Brady International Hardwoods Company. Lumber Products filed for Chapter 11 bankruptcy (Bankr. D. Ore. Case No. 12-32729) on April 11, 2012, listing under $50 million in assets and debts. Judge Elizabeth L. Perris presides over the case. The petition was signed by Craig Hall, president and chief operating officer. The Debtor owes Wells Fargo in excess of $22.8 million. Wells Fargo is represented by Lane Powell PC. Edward C. Hostmann, the Chapter 11 trustee, is represented by Tonkon Torp LLP. LUMBER PRODUCTS: Broderick Approved as Case Trustee's Realtor ------------------------------------------------------------- Edward C. Hostmann, the Chapter 11 trustee for the estate of Lumber Products, sought and obtained approval from the U.S. Bankruptcy Court to employ Broderick Group, Inc., including brokers Steve Henderson, Al Hodge and Eric Meussner, to represent or to assist the Debtors in marketing, locating a buyer for, and negotiating the sale of real property located in Woodinville, Washington, owned by Debtor 300 WLI, Inc. (f/k/a Woodinville Lumber, Inc.) and formerly operated as a corporate office, manufacturing and distribution facility. Under the listing agreement, Broderick Group will receive a 3% commission for a sale without a buyer's agent and a 4% commission for a sale with a buyer's agent, which commission will be shared between Broderick Group and the buyer's agent. The listing agreement also provides Broderick Group a 1-1/2% commission through Nov. 30, 2012, on a sale to any of five potential buyers that the Debtors identify in the listing agreement. Finally, in the event that the Property is transferred to the secured lender prior to the expiration of the listing agreement, the listing agreement will terminate and the Debtors will pay Broderick Group $10,000 if the Property is transferred before Aug. 31, 2012, and $20,000 if the Property is transferred after that date. The Debtors have consulted with the Unsecured Creditors Committee and secured lender on the Property regarding the listing agreement and believe those parties consent to the employment of the Broderick Group. Steven J. Henderson attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Lumber Products Lumber Products -- http://www.lumberproducts.com/-- is a wholesale distributor of some of the finest hardwood lumber, hardwood plywood, and door and millwork products to the Northwest, Intermountain, and Southwest states since 1938. It has headquarters in Tualatin, Oregon, and operations in Oregon, Washington, Idaho, Montana, Utah, Arizona, and New Mexico. Lumber Products is the sole owner of Lumber Products Holding and Management Company. Holdco is the sole owner of: Lumber Products Holding and Management Company; Sunrise Wood Products, Inc.; Lumber Products Washington, Inc.; Components & Millwork, Inc.; Wood Window Distributors, Inc.; D&J Wood Resources, Inc.; and Brady International Hardwoods Company. Lumber Products filed for Chapter 11 bankruptcy (Bankr. D. Ore. Case No. 12-32729) on April 11, 2012, listing under $50 million in assets and debts. Judge Elizabeth L. Perris presides over the case. The petition was signed by Craig Hall, president and chief operating officer. The Debtor owes Wells Fargo in excess of $22.8 million. Wells Fargo is represented by Lane Powell PC. Edward C. Hostmann, the Chapter 11 trustee, is represented by Tonkon Torp LLP. LUMBER PRODUCTS: Hires Kiemle & Hagood as Real Estate Broker ------------------------------------------------------------ Edward C. Hostmann, the Chapter 11 Trustee for Lumber Products, asks for permission from the U.S. Bankruptcy Court to employ Kiemle & Hagood as real estate broker to assist the Trustee in selling the Debtor's "Barker Road Property" in Spokane, Washington. The Chapter 11 Trustee seeks to compensate Kiemle & Hagood at its usual and customary commission rate of 5% of the sale price of the Property, to be paid out of the proceeds from the sale of the Property. The Chapter 11 Trustee attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Lumber Products Lumber Products -- http://www.lumberproducts.com/-- is a wholesale distributor of some of the finest hardwood lumber, hardwood plywood, and door and millwork products to the Northwest, Intermountain, and Southwest states since 1938. It has headquarters in Tualatin, Oregon, and operations in Oregon, Washington, Idaho, Montana, Utah, Arizona, and New Mexico. Lumber Products is the sole owner of Lumber Products Holding and Management Company. Holdco is the sole owner of: Lumber Products Holding and Management Company; Sunrise Wood Products, Inc.; Lumber Products Washington, Inc.; Components & Millwork, Inc.; Wood Window Distributors, Inc.; D&J Wood Resources, Inc.; and Brady International Hardwoods Company. Lumber Products filed for Chapter 11 bankruptcy (Bankr. D. Ore. Case No. 12-32729) on April 11, 2012, listing under $50 million in assets and debts. Judge Elizabeth L. Perris presides over the case. The petition was signed by Craig Hall, president and chief operating officer. The Debtor owes Wells Fargo in excess of $22.8 million. Wells Fargo is represented by Lane Powell PC. Edward C. Hostmann, the Chapter 11 trustee, is represented by Tonkon Torp LLP. LUMBER PRODUCTS: Committee Wants to Employ Counsel's New Firm ------------------------------------------------------------- The Unsecured Creditors Committee of Lumber Products asks permission from the U.S. Bankruptcy Court to employ McKittrick Leonard LLP as its attorneys. On May 21, 2012, the Court approved employment of Peter C. McKittrick, Esq., and Tara J. Schleicher, Esq., of Farleigh Wada Witt as counsel for the Committee. On June 1, 2012, Mr. McKittrick left FWW and began practicing law with Justin D. Leonard at ML LLP. The Committee desires that both Peter C. McKittrick and Tara J. Schleicher continue to assist the Committee in their respective roles. Mr. McKittrick's hourly rate is $385 while Mr. Leonard's is $325. The firm attests it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Lumber Products Lumber Products -- http://www.lumberproducts.com/-- is a wholesale distributor of some of the finest hardwood lumber, hardwood plywood, and door and millwork products to the Northwest, Intermountain, and Southwest states since 1938. It has headquarters in Tualatin, Oregon, and operations in Oregon, Washington, Idaho, Montana, Utah, Arizona, and New Mexico. Lumber Products is the sole owner of Lumber Products Holding and Management Company. Holdco is the sole owner of: Lumber Products Holding and Management Company; Sunrise Wood Products, Inc.; Lumber Products Washington, Inc.; Components & Millwork, Inc.; Wood Window Distributors, Inc.; D&J Wood Resources, Inc.; and Brady International Hardwoods Company. Lumber Products filed for Chapter 11 bankruptcy (Bankr. D. Ore. Case No. 12-32729) on April 11, 2012, listing under $50 million in assets and debts. Judge Elizabeth L. Perris presides over the case. The petition was signed by Craig Hall, president and chief operating officer. The Debtor owes Wells Fargo in excess of $22.8 million. Wells Fargo is represented by Lane Powell PC. Edward C. Hostmann, the Chapter 11 trustee, is represented by Tonkon Torp LLP. LYMAN LUMBER: Court Approves Capacity Commercial as Realtor ----------------------------------------------------------- Lyman Holding Company sought and obtained approval from the U.S. Bankruptcy Court to employ the real estate services of Capacity Commercial Group to represent or assist the Debtors in marketing, locating a buyer for, and negotiating the sale of real property located in Longview, Washington, owned by Debtor Woodinville Lumber, Inc. and formerly operated as a truss production facility. On May 23, 2012, the Debtors agreed to the terms of a listing agreement with Capacity Commercial Group for the purposes of marketing and selling the Property. If sale of the property is actually consummated, the Broker will receive a commission equal to 6% of the Gross Sales Price. If a Cooperating Broker is the procuring cause of a sale of the Property, the Broker may share the commission with such Cooperating Broker. In any case, the sale commission will be due and payable at closing. "Gross Sales Price" as used in the Exclusive Listing Agreement will consist of the total sum of the consideration paid at closing for the Property. About Lyman Lumber Lyman Lumber Company sells building supplies, such as framing beams, roofing materials, siding and drywall to residential builders. The 113-year old company and several affiliates sought Chapter 11 petition (Bankr. D. Minn. Lead Case No. 11-45190) on Aug. 4, 2011. Judge Dennis O'Brien presides over the cases. Lyman Lumber estimated $50 million to $100 million in assets and $100 million to $500 million in debts. The petition was signed by James E. Hurd, president and chief executive officer. The affiliates that filed for Chapter 11 are: Lyman Holding Company; Automated Building Components, Inc.; Building Material Wholesalers; Carpentry Contractors Corp.; Construction Mortgage Investors Co.; Lyman Development Co.; Lyman Lumber of Wisconsin, Inc.; Lyman properties LLC; Mid-America Cedar, Inc.; Woodinville Lumber, Inc.; and Woodinville Construction Services LLC. Cynthia A. Moyer, Esq., Douglas W. Kassebaum, Esq., James L. Baillie, Esq., and Sarah M. Gibbs, Esq., at Fredrikson & Bryon, P.A., serve as bankruptcy counsel. BGA Management, LLC d/b/a Alliance Management, developed and executed a sale process and marketing strategy for the Debtors' assets. The Official Committee of Unsecured Creditors of Lyman Lumber Company tapped Fafinsky, Mark & Johnson, P.A., as its counsel. Alliance Management is the turnaround consultant. Conway MacKenzie, Inc. is the panel's financial advisor. When they filed for bankruptcy, the Debtors had in hand a term sheet with SP Asset Management, LLC, a unit of Steel Partners Holdings L.P., to serve as stalking horse bidder for the assets of the Debtors. New York City-based Steel Partners is a diversified holding company that owns and operates businesses in a variety of industries. At an October 2011 auction, SP Asset Management and two other bidders lost to BlackEagle Partners. BlackEagle acquired the Debtors' Midwest operations, including its Chanhassen location, Automated Building Components, Carpentry Contractors Corp., and Lyman Lumber of Wisconsin. BlackEagle paid roughly $23 million. The transaction was effective Oct. 28, 2011. BlackEagle Partners owns US LBM Holdings, a collection of eight building products distributors serving the Midwest, Northeast, and Mid-Atlantic in nine states with more than 40 locations. M.G. MILLER-MANAGEMENT: Case Summary & Creditors List ----------------------------------------------------- Debtor: M.G. Miller-Management & Holding Ltd. Co. dba Golden Oaks Nursing Center 2801 Redbird Enid, OK 73703 Bankruptcy Case No.: 12-13144 Chapter 11 Petition Date: June 25, 2012 Court: U.S. Bankruptcy Court Western District of Oklahoma (Oklahoma City) Judge: Sarah A. Hall Debtor's Counsel: Craig Riffel, Esq. MITCHEL GASTON RIFFEL & RIFFEL PLLC 3517 W. Owen K. Garriott, Suite One Enid, OK 73703 Tel: (580) 234-8447 Fax: (580) 234-5547 E-mail: criffel@westoklaw.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 with the petition is available for free at: http://bankrupt.com/misc/okwb12-13144.pdf The petition was signed by Michael G. Miller, member/manager. M&T BANK: Fitch Affirms Rating on Preferred Stock at 'BB' --------------------------------------------------------- Fitch Ratings has affirmed the long-term and short-term Issuer Default Ratings (IDRs) of M&T Bank Corporation (MTB) at 'A-' and 'F1', respectively. The Rating Outlook has been revised to Stable from Negative. The affirmation of MTB's ratings and the Stable Outlook reflects the bank's consistently sound financial performance during a difficult operating environment, including credit losses and problem assets that have remained much lower than most peers. Additionally, MTB's ratings are supported by its solid franchise, veteran management team, and good revenue diversification. Although MTB manages with capital levels lower than peers, Fitch believes current capitalization is adequate given good asset quality, solid reserves when compared to net charge-offs (NCOs) and moderate dividend payout. More recently, MTB has been in a capital building mode. Despite balance sheet growth, TCE and Tier I common capital ratios have improved to 6.46% and 7.04%, respectively. Further, MTB's solid earnings, strong equity generation and low credit losses enable the company to operate at leaner capital levels. MTB has a long history of modest levels of problem assets and loan losses. The sizeable commercial real estate portfolio has demonstrated good performance through various credit cycles and evidenced of conservative underwriting. MTB's nonaccrual loans (NAL) and credit losses have risen but still compares very well to most regional banks. NALs stood at a manageable 1.75% of loans while NCOs were 32 basis points (bps) for the first quarter of 2012 (1Q12). The company's earnings capacity and stability has helped absorbed higher credit costs during the credit downturn evidenced by PPNR/NCOs at 7.7 times (x) for 1Q12. Even when NCOs peaked at $514 million in 2009, PPNR/NCOs was 2.2x. Additionally, reserve coverage of NCOs is also strong at 4.3x. Fitch recognizes that MTB faces some challenges as the implementation of Basel III takes effect. MTB has a large portion of preferred securities in its capital structure, of which $381.5 million relates to issuances under the U.S. Treasury's TARP program, along with a sizeable DTA and negative impacts from its Bayview investment and private label MBS. However, given its earnings profile, Fitch believes MTB will meet the required minimum Tier 1 Common ratio plus countercyclical buffer in advance of required implementation dates Fitch's estimate of Tier 1 Common ratio under Basle III for 1Q12 was below 7%. Fitch is comfortable with MTB operating levels of capital at current rating levels. Positive momentum could result as MTB continues to build capital up to peer averages while maintaining strong asset quality, reserves, and earnings. Although not anticipated, a more aggressive approach to capital management, or a rise in net losses could lead to a negative rating action. Fitch has affirmed the following ratings, with a Stable Outlook: M&T Bank Corporation -- Long-term Issuer Default Rating (IDR) at 'A-'; -- Short-term IDR at 'F1'; -- Viability at 'a-'; -- Preferred stock at 'BB'; -- Support at '5'; -- Support floor 'NF'. Manufacturers and Traders Trust Co -- Long-term IDR at 'A-'; -- Short-term IDR at 'F1'; -- Viability at 'a-'; -- Senior unsecured debt at 'A-'; -- Subordinated debt at 'BBB+' -- Long-term deposits at 'A'; -- Short-term deposits at 'F1'; -- Support at '5'; -- Support floor 'NF'. Wilmington Trust, N.A. (formerly M&T Bank, NA) -- Long-term IDR at 'A-'; -- Short-term IDR at 'F1'; -- Viability at 'a-'; -- Long-term deposits at 'A'; -- Short-term deposits at 'F1'; -- Support at '5'; -- Support floor 'NF'. Wilmington Trust Corporation -- Long-term IDR at 'A-'; -- Subordinated debt at 'BBB+'; -- Short-term IDR at 'F1'; -- Viability at 'a-'; -- Support at '5'; -- Support floor at `NF'. Wilmington Trust Company -- Long-term IDR at 'A-'; -- Short-term IDR at 'F1'; -- Viability at 'a-'; -- Support at '5'; -- Support floor at `NF' M&T Capital Trust I - IV -- Preferred stock at 'BB+' Provident Bankshares Corp. -- Preferred stock at 'BB'. Provident Bank of Maryland -- Subordinated debt at 'BBB+'. Provident (MD) Capital Trust I -- Preferred stock at 'BB+'. MADISON BENTLEY: Alter Ego Claims Require Report ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a federal judge said although an alter ego claim was derived from a fraudulent transfer claim and isn't a dispute where the bankruptcy court can make final rulings under the Supreme Court's Stern v. Marshall ruling, the case nonetheless should remain in bankruptcy court. According to the report, U.S. District Judge Shira A. Scheindlin in Manhattan ruled on June 26 in a 21-page opinion that the bankruptcy court could retain the lawsuit, while being limited to issuing recommended findings of fact and conclusions of law. The case involved a lawsuit where the bankruptcy trustee sued defendants contending that a lease had been fraudulently transferred. The suit also alleged that a defendant was an alter ego for the bankrupt company. The defendants filed a motion to withdraw the reference, asking Judge Scheindlin to take the lawsuit out of bankruptcy court. Judge Scheindlin refused. According to the report, the judge said that statements in Stern were dicta to the extent they said that fraudulent transfer claims involve private rights where bankruptcy courts can't make final rulings. Regardless, she followed other courts in New York in ruling that fraudulent transfer suits fall within the ambit of Stern. Judge Scheindlin could find no cases saying whether an alter ego claim concerns a public right or a private right. She decided that the bankruptcy court lacks the ability to make final rulings because the alter ego claim was "entirely derivative" of the fraudulent transfer claim. She left the lawsuit in bankruptcy court for the judge to make a report and recommendation. The case is Messer v. Bentley Manhattan Inc. (In re Madison Bentley Associates LLC), 11-9027, U.S. District Court, Southern District New York (Manhattan). Madison Bentley filed a Chapter 7 petition (Bankr. Case No. 09-15479) on Sept. 11, 2009. MARINA BAY SANDS: S&P Assigns Gives 'BB+' Corp. Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' corporate credit rating to Singapore-based Marina Bay Sands Pte. Ltd. (MBS), a subsidiary of Las Vegas Sands Corp. (LVSC; BB+/Positive/--). The outlook is positive. "We also assigned MBS' S$5.1 billion credit facilities our 'BBB' issue-level rating (two notches higher than our corporate credit rating) and a recovery rating of '1', indicating our expectation for very high (90% to 100%) recovery for lenders in the event of a default. The credit facilities are composed of a S$500 million revolving credit facility due Dec. 25, 2017 and a S$4.6 billion term loan due June 25, 2018. MBS will use proceeds from its new facilities to refinance existing debt, pay fees, expenses and accrued interest, and for general corporate purposes," S&P said. All other existing ratings for the Las Vegas Sands Corp. family of companies remain unchanged. "Our corporate credit rating on MBS reflects the overall credit quality of the LVSC family of companies and is aligned with our 'BB+' corporate credit rating on LVSC," said Standard & Poor's credit analyst Melissa Long. "Despite the distinct financing structures at LVSC's U.S., Macau, and Singapore subsidiaries, we consider the consolidated entity when assessing LVSC's credit quality. We deem the strategic relationship between the parent and each subsidiary as an important factor that has a bearing on the credit quality of the overall consolidated entity. We consider MBS to be a core subsidiary of LVSC as we believe that the company is integral to LVSC's current identity and future strategy. MBS is wholly owned through various entities of LVSC and shares a similar brand with other group entities. Additionally, MBS represented close to half of LVSC's consolidated property level EBITDA for the 12 months ended March 31, 2012, which in our view is significant. Thus, despite credit measures on a standalone basis that might otherwise be supportive of a higher rating, we are assigning MBS a corporate credit rating at the same level as our corporate credit rating on LVSC," S&P said. "The positive outlook reflects our view that a higher rating is possible over the next several quarters, based on our current performance expectations. To raise the rating to 'BBB-', we would expect leverage to be generally closer to 3x, though we would be comfortable with it temporarily spiking to the high-3x area to fund development projects. In the event of a strong ramp-up of Sands Cotai Central, we believe an upgrade to 'BBB-' is possible, as we would expect leverage to improve to below 2.5x by early 2013. An investment-grade rating on Las Vegas Sands, however, would also require management to publicly articulate a financial policy around its tolerance for leverage that is aligned with our leverage threshold at a 'BBB-' rating. In addition, while we are unclear when the aforementioned lawsuits and investigations would be resolved and what effect, if any, a potential judgment would have on credit quality, these issues may weigh on upgrade potential until we have further clarity. METAL STORM: Noteholders' Meeting Scheduled for July 16 ------------------------------------------------------- A meeting of Note Holders of Metal Storm Limited will be held at Brisbane Polo Club, Naldham House, 1 Eagle Street, Brisbane, 4000 on Monday, July 16, 2012, commencing at 11:00 a.m. Brisbane time. The proposals submitted for resolution at the Note Holders meeting are: (a) Approval of the modification of the Note Terms, by amending the Note Terms in the manner generally described in the Explanatory Statement and as detailed in the Amendment Deed produced at the meeting; and (b) Proposal to authorize the Trustee to effect the amendments to the Note Terms by executing the Amendment Deed. General Meeting Results Metal Storm announced the resolutions passed at the Company's Annual General Meeting, held in Brisbane on May 31, 2012. -- The section of the Directors' report in the 2011 annual report dealing with the remuneration of the Company's Directors and senior executives described as 'Remuneration Report' was adopted. -- Mr Trevor Tappenden, who retires by rotation in accordance with Clause 16.1 of the Company's Constitution, was re- elected as a Director of the Company. -- Mr Terry O'Dwyer, who retires by rotation in accordance with Clause 16.1 of the Company's Constitution, was re-elected as a Director of the Company. -- Shareholders approved the issue of up to 500,000,000 Shares to Dutchess or its nominee in accordance with the terms of the Line Agreement. -- Shareholders approved and ratified the previous issue of 437,500,000 shares under the First Luxinvest Agreement. -- Shareholders approve the issue of 437,500,000 shares under the Second Luxinvest Agreement. Metal Storm proposes to issue 155,428,462 ordinary shares pursuant to a subscription agreement. Metal Storm proposes to issue 437,500,000 ordinary shares pursuant to a subscription agreement. About Metal Storm Headquartered in Darra, Queensland, Australia, Metal Storm Limited is a defense technology company with offices in Australia and the United States. It specializes in the research, design, development and integration of projectile launching systems utilizing its "electronically initiated/stacked projectile" technology for use in the defense, homeland security, law enforcement and industrial markets. The Company reported a net loss of A$6.03 million in 2011, a net loss of A$8.93 million in 2010, and a net loss of A$11.30 million in 2009. The Company's balance sheet at Dec. 31, 2011, showed A$1.08 million in total assets, A$21.07 million in total liabilities and a A$19.99 million total deficiency. PricewaterhouseCoopers, in Brisbane, Australia, issued a "going concern" qualification on the financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and net capital deficiency that raised substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning Metal Storm said in the annual report for the year ended Dec. 31, 2011, that there can be no assurance that it will be able to raise sufficient capital to continue its operations and redeem the convertible notes on the maturity date. If the Company is unsuccessful in its efforts to obtain sufficient financing to continue to fund its current operations and redeem the convertible notes on the Maturity Date, the Company will be required to significantly reduce or cease operations altogether. If Metal Storm does not have reasonable grounds to believe that it will be successful in its efforts to obtain sufficient financing to continue to fund its operations and redeem the convertible notes at the Maturity Date, Metal Storm will be required to appoint an administrator under Australia's bankruptcy system. MITEL NETWORKS: Moody's Affirms 'B3' CFR/PDR; Outlook Stable ------------------------------------------------------------ Moody's Investors Service changed Mitel Networks Corporation's (Mitel) speculative grade liquidity rating to SLG-4 (weak) from SGL-3 (adequate) on concerns that EBITDA expansion may not be sufficient to maintain financial covenant compliance cushions as thresholds become more stringent in quick succession over the next several quarters. However, given prospects for EBITDA expansion and positive free cash flow, addressing the potential compliance issues should not be problematic and, accordingly, Mitel's B3 corporate family and probability of default ratings, B1 senior secured credit facility rating, Caa1 senior secured second lien term loan ratings and stable outlook remain unchanged and were affirmed. The following summarizes Mitel's ratings and the rating actions: Issuer: Mitel Networks Corporation Speculative Grade Liquidity Rating, downgraded to SGL-4 from SGL-3 Corporate Family Rating, affirmed at B3 Probability of Default Rating, Affirmed at B3 Senior Secured First Lien Bank Credit Facility, affirmed at B1 with the LGD assessment revised to (LGD2, 24%) from (LGD2, 25%) Senior Secured Second Lien Bank Credit Facility, affirmed at Caa1 with the LGD assessment revised to (LGD4, 61%) from (LGD5, 70%) Outlook: unchanged at Stable Ratings Rationale Mitel's B3 ratings are driven primarily by the company's vulnerability to competition resulting from its relatively small aggregate scale and from margin performance that does not suggest a strongly positioned niche telecommunication equipment/services offering. As well, the company's weak liquidity position, which is caused by the potential of declining covenant compliance cushions as thresholds successively tighten over the next several quarters, is credit-negative and, despite positive fundamentals that see EBITDA expanding and good free cash generation, weighs on the rating. Since Mitel's unused revolving credit facility matures in August, 2012 with term loans maturing in 2014 and 2015, near term refinance activities also warrant caution. The opacity of the company's relative positioning is also credit-negative and results from the fact that neither the company nor its competitors report measures that can be used to interpret supply/demand balance or market positioning. The strongest support for Mitel's B3 ratings stems from the company's ability to generate free cash flow. With post-IPO interest expense having been reduced and with only nominal capital expenditure requirements, Mitel has the ability to be free cash flow positive and to gradually pay down debt. Management's commitment to reduce debt is a key to the rating. Rating Outlook Even with the covenant compliance cushions deteriorating due to thresholds becoming more stringent over the next several quarters, since Mitel's EBITDA is growing and as the company is free cash flow positive, prospect of dealing with the matter are favorable and allow the outlook to be stable. What Could Change the Rating -- Up Given solid liquidity arrangements (which are a pre-requisite to positive ratings actions) and should Debt/EBITDA be expected to be sustained below 4.5x with free cash flow (FCF) being sustained above 5% of Debt, consideration for positive outlook and ratings actions would occur (all measures are inclusive of Moody's standard adjustments). What Could Change the Rating -- Down Should refinance/liquidity arrangements become unmanageable or if free cash flow generation returns to break-even or negative levels, adverse rating actions are likely. MORGAN'S FOODS: Seven Directors Elected at Annual Meeting -------------------------------------------------------- Morgan's Foods, Inc.'s annual meeting of shareholders was held on June 22, 2012. The shareholders elected Marilyn A. Eisele, Kenneth L. Hignett, Steven S. Kaufman, Bernard Lerner, James J. Liguori, James C. Pappas, and Leonard R. Stein-Sapir as directors. The proposal to ratify the appointment of Grant Thornton LLP as the Company's independent registered public accounting firm for the year ended March 3, 2013, was approved. The shareholders did not approve the proposals to amend the Amended and Restated Articles of Incorporation and to amend the Amended and Restated Code of Regulations. About Morgan's Foods Cleveland, Ohio-based Morgan's Foods, Inc., which was formed in 1925, operates through wholly-owned subsidiaries KFC restaurants under franchises from KFC Corporation, Taco Bell restaurants under franchises from Taco Bell Corporation, Pizza Hut Express restaurants under licenses from Pizza Hut Corporation and an A&W restaurant under a license from A&W Restaurants, Inc. As of May 20, 2011, the Company operates 56 KFC restaurants, 5 Taco Bell restaurants, 10 KFC/Taco Bell "2n1's" under franchises from KFC Corporation and franchises from Taco Bell Corporation, 3 Taco Bell/Pizza Hut Express "2n1's" under franchises from Taco Bell Corporation and licenses from Pizza Hut Corporation, 1 KFC/Pizza Hut Express "2n1" under a franchise from KFC Corporation and a license from Pizza Hut Corporation and 1 KFC/A&W "2n1" operated under a franchise from KFC Corporation and a license from A&W Restaurants, Inc. The Company reported a net loss of $1.68 million for the year ended Feb. 26, 2012, compared with a net loss of $988,000 for the year ended Feb. 27, 2011. The Company's balance sheet at Feb. 26, 2012, showed $52.42 million in total assets, $53.47 million in total liabilities and a $1.04 million total shareholders' deficit. MOTORS LIQUIDATION: To Modify Tax Holdback Calculation Approach --------------------------------------------------------------- Following the close of the fiscal quarter ended March 31, 2012, the trust administrator and trustee of the Motors Liquidation Company GUC Trust conducted a detailed review of the calculation utilized to determine the tax holdback for the quarter ended March 31, 2012. The GUC Trust was formed on March 30, 2011, pursuant to the Second Amended Joint Chapter 11 Plan filed by Motors Liquidation Company (f/k/a General Motors Corporation), or MLC, and its affiliated debtors on March 18, 2011, and as confirmed by order of the bankruptcy court for the Southern District of New York, dated March 29, 2011. On Dec. 15, 2011, MLC transferred all remaining common stock and warrants, issued by General Motors Company then held by it to the GUC Trust. On the GUC Trust Funding Date, the GUC Trust established a tax basis, or the Tax Basis, in the New GM Securities that were then transferred to it by MLC, other than certain New GM Securities that were distributed pursuant to Section 2.3(a) of the Motors Liquidation Company GUC Trust Agreement, or, as amended, the GUC Trust Agreement, or that were sold pursuant to a Bankruptcy Court order dated March 8, 2012. The GUC Trust is treated, for U.S. federal income tax purposes, as a disputed ownership fund taxed as a qualified settlement fund. As such, the GUC Trust recognizes taxable gain or loss from any dispositions and distributions to beneficiaries of the GUC Trust, or GUC Trust Beneficiaries, of New GM Securities, equal to the difference between the market value of the New GM Securities at the time of disposition or distribution and the Tax Basis of those New GM Securities. As of March 31, 2012, the GUC Trust withheld New GM Securities in the amount of $108.6 million from distribution to holders of Units, in accordance with Section 6.1(e) of the GUC Trust Agreement. The Tax Holdback was intended to be used to cover the potential Taxes on Distribution measured as of March 31, 2012. On June 27, 2012, the Trust Administrator announced that, in conjunction with the professionals employed by the GUC Trust and the trust monitor of the GUC Trust, it had determined to modify the methodology underlying the calculation to determine the amount of New GM Securities that, as withheld from distribution, would be sufficient to satisfy the current and projected taxes on distribution. The modified calculation includes any current and estimated potential future income tax liabilities for both gains on the New GM Securities realized upon distribution or other liquidation during the current and prior fiscal periods and potential unrealized gains on the then-remaining New GM Securities held by the GUC Trust as at the end of the current fiscal period. The Revised Calculation calculates those gains by comparing to their tax basis the respective market prices of the liquidated or distributed New GM Securities as at the date and time of any liquidation or distribution, or the respective highest market prices of New GM Securities from Dec. 15, 2011, to the relevant date of measurement for the then remaining New GM Securities held by the GUC Trust. The then-current applicable tax rate is applied to the realized and estimated potential unrealized gains determined in the manner set forth above, resulting in the total Tax Holdback as at the end of such fiscal period. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq.,and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31. NUVILEX INC: Pays 100-Mil. Shares for 100% of Austrianova --------------------------------------------------------- Nuvilex, Inc., on June 21, 2012, purchased 100% of the shares of Austrianova Singapore Pte. Ltd., in exchange for 100,000,000 shares of restricted Nuvilex common stock. Under the terms of the Asset Purchase Agreement, the Nuvilex and ASPL shares are held in escrow until the completion of Nuvilex's financing obligations. The Asset Purchase Agreement, as amended, provides that Nuvilex will fund future ASPL operations in the amount of $2.5 million with a target date to complete the funding by Dec. 31, 2012. Nuvilex will continue current funding of $60,000 monthly in operating capital until the overall funding is completed. About Nuvilex Inc. Silver Spring, Md.-based Nuvilex, Inc., Nuvilex, Inc. operates independently and through wholly-owned subsidiaries. The Company is dedicated to bringing to market scientifically derived products designed to improve the health and well-being of those who use them. The Company's current strategy is to focus on developing and marketing products in the biotechnology arena it believes have potential for long-term corporate growth. The Company's balance sheet at Oct. 31, 2011, showed $1.7 million in total assets, $3.5 million in total liabilities, $580,000 of preferred stock, and a shareholders' deficit of $2.4 million. M&K CPAS, PLLC, in Houston, Texas, expressed substantial doubt about Nuvilex's ability to continue as a going concern, following the Company's results for the fiscal year ended April 30, 2011. The independent auditors noted that the Company has suffered recurring losses from operations. OLD CORKSCREW: Reorganization Plan Declared Effective ----------------------------------------------------- Old Corkscrew Plantation LLC, et al., notifies the U.S. Bankruptcy Court for the Middle District of Florida that the effective date of its Second Amended Joint Plan of Reorganization occurred on May 10, 2012. As reported in the Troubled Company Reporter on March 1, 2012, the primary source of the funds necessary to implement the Plan initially will be the funding under the DIP Loan and the Debtors' cash from operations. At the present time, the Debtors believe that the Reorganized Debtor will have sufficient funds as of the Effective Date through funding of the DIP Loan and the Debtors' cash from operations to pay in full the expected payments required under the Plan, including to the Holders of Allowed Administrative Claims (including Allowed Administrative Claims of Professionals), Allowed Priority Claims, and DIP Lender Allowed Claims. Under the Plan, each holder of an Allowed Unsecured Claim in Class 4 will receive cash from the Reorganized Debtor in an amount equal to 100% of the Allowed Unsecured Claim, plus Postpetition Interest. A full-text copy of the Amended Disclosure Statement is available for free at http://bankrupt.com/misc/OLD_CORKSCREW_ds_amended.pdf About Old Corkscrew Plantation Fort Myers, Florida-based Old Corkscrew Plantation LLC, whose oranges are made into Minute Maid and Tropicana juice, filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 11-14559) on July 29, 2011, disclosing $25,264,047 in assets and $60,751,633 in debts. Old Corkscrew sought Chapter 11 protection along with its affiliates. Donald G. Scott, Esq., -- dscott@mcdowellrice.com -- at McDowell, Rice, Smith & Buchanan, in Kansas City, Missouri, serves as the Debtors' bankruptcy co-counsel. Berger Singerman, P.A., serves as their bankruptcy counsel. Arcadia Citrus Enterprises, Inc., serves as manager of their citrus growing properties. Kapila & Company serves as chief restructuring officer. The Debtors' orange groves are valued at $24 million. Scott Westlake, the Debtors' managing member, signed the petition. Mr. Westlake is also listed as the Debtors' largest unsecured creditor, with $4,827,906 owed. Another $338,511 debt is owed to Scott and Vicki Westlake. No trustee or examiner has been appointed in this Chapter 11 case. An official committee of unsecured creditors was appointed and is represented by counsel. OLYMPIC HOLDINGS: Files for Chapter 11 in Los Angeles ----------------------------------------------------- Beverly Hills, California-based Olympic Holdings, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-32707) on June 29, 2012 in Los Angeles. According to the case docket, the schedules of assets and liabilities and the statement of financial affairs are due July 31, 2012. The Debtor estimated assets and liabilities of $10 million to $50 million. A related entity, Wooton Group, LLC, earlier sought bankruptcy protection (Case No. 12-31323) on June 19, 2012. PALM AVENUE: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Palm Avenue Partners, LLC 309 Main Street A Peoria, IL 61602 Tel: (941) 228-1814 Bankruptcy Case No.: 12-09808 Chapter 11 Petition Date: June 26, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Edmund S. Whitson, III, Esq. BRYANT MILLER OLIVE, P.A. One Tampa City Center, Ste 2700 Tampa, FL 33602 Tel: (813) 273-6677 Fax: (813) 223-2702 E-mail: ewhitson@bmolaw.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 10 largest unsecured creditors is available for free at http://bankrupt.com/misc/flmb12-09808.pdf The petition was signed by Matt Leiter, manager. PDQ COOLIDGE: Hires TriNet HR for Payroll Services -------------------------------------------------- PDQ Coolidge Formad LLC and PDQ Cooformad Washores LLC ask permission from the U.S. Bankruptcy Court to employ TriNet HR Corporation to provide payroll services. The Debtor attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The Debtor seeks the Court's approval to make payments of postpetition payroll as they become due with an additional 5.0661% a month added to the total payroll as payment to TriNet for human resources services without the need for further Court approval. About PDQ Coolidge Formad PDQ Coolidge Formad, LLC, filed a bare-bones Chapter 11 petition (Bankr. S.D. Fla. Case No. 12-18495) in its home-town in Miami on April 8, 2012. PDQ Coolidge owns 12 low income residential rental apartment complexes. The membership interests of PDQ Coolidge are owned by Education Empowerment Foundation, Inc., a Florida non- profit corporation. Pursuant to an Asset Management Agreement with EEF, the Properties are completely managed and operated by Prestige Enterprise Group, Inc. The principals of Prestige were also the principals of one of the prior owners, and have all available knowledge with respect to the ongoing operations of the Debtor. The principals of Prestige are located in Miami, Florida. Ten of the Properties are located in Orange County, Florida, and two are located in Duval County, Florida. All of the Properties provide affordable housing, and a small number of the total units provide Section 8 housing. PDQ Coolidge Formad scheduled $7,160,877 in assets and $22,842,455 in liabilities. PDQ Coolidge Formad projects that funds will be available for distribution to unsecured creditors. Judge Robert A. Mark presides over the case. Lawyers at Aaronson Schantz P.A., represent the Debtor. An affiliate, PDQ Cooformad Washores, LLC, also filed a separate petition (Bankr. S.D. Fla. Case No. 12-18496). It scheduled $2,576,028 in assets and $16,754,815 in liabilities. The petitions were signed by Salomon Yuken, manager. PHILADELPHIA ORCHESTRA: To Exit Chapter 11 in July -------------------------------------------------- The Philadelphia Orchestra Association and its wholly owned subsidiary, the Academy of Music, Inc., disclosed that its Plan of Reorganization has been confirmed by the United States Bankruptcy Court of the Eastern District of Pennsylvania. With the confirmation order entered by the Honorable Eric L. Frank, the Association anticipates its emergence from Chapter 11 by the end of July at the time that all conditions to effectiveness of the Plan are satisfied. As confirmed, the Association will address more than $100 million in claims, debts, and liabilities with a settlement of $5.49 million. Of that total, $4.25 million will be paid on or before the effective date of the Plan. Bill Rochelle, the bankruptcy columnist for Bloomberg News, notes that not a single creditor voted against the plan. The plan incorporates settlements with the musicians' union, the musicians' pension plan, the Pension Benefit Guaranty Corp. and the Kimmel Center, where the orchestra performs. The orchestra's board made gifts to cover the $5.49 million cost of the plan that extinguishes $100 million in debt. The orchestra incurred $8.9 million in professional fees and other costs while in Chapter 11. Although there was no long-term debt, the orchestra said it was facing a $14.5 million structural deficit. "When we made the difficult, yet necessary decision to file for bankruptcy, our objective was to reduce our structural deficit by creating a realistic cost structure that would allow the Orchestra to survive and ultimately thrive," said Richard B. Worley, chairman of The Philadelphia Orchestra Association. "This has been a challenging process and we would not have succeeded without the hard work, cooperation, and support of many. We are deeply grateful to all who worked with us and who supported us, especially our musicians and staff, the Kimmel Center, the Annenberg Foundation, and generous supporters in the community who were willing to invest substantial sums to help us weather the storm. That we were able to conclude this process consensually without litigation or work stoppage is particularly gratifying. We would be remiss if we didn't make special mention of the efforts of Judge Frank who kept our case on track toward confirmation and Chief Judge Stephen Raslavich, who played a pivotal role as mediator in helping our musicians and the Association reach a new labor agreement." Mr. Worley further said, "In receiving Plan confirmation, we are now well-positioned to rebuild our audiences, rebuild our donor base and grow our endowment. There is still much work to be done to ensure our future and we intend to make the most of the opportunities available to us as we conclude the reorganization process. We move forward with confidence knowing that with hard work, outstanding execution, and support from the Philadelphia community, the Orchestra's vibrancy and excellence will remain for our beloved audiences--both here and abroad." On April 16, 2011, The Philadelphia Orchestra Association filed for Chapter 11 bankruptcy protection. This decision was based upon several critical financial challenges facing the organization, specifically its rapidly dwindling operating funds and a structural deficit of $14.5 million. Although The Philadelphia Orchestra had no long-term debt, it was operating at a significant loss based upon depleted revenues, eroding endowment income, unfunded pension obligations, and increased fixed costs. With consensual agreements reached in the reorganization process with the musicians of The Philadelphia Orchestra, the Kimmel Center, the American Federation of Musicians and Employers' Pension Fund (AFM-EPF), the Pension Benefit Guaranty Corporation (PBGC), as well as Encore Series Incorporated and Peter Nero and the Philly Pops (PNPP), the Association will exit bankruptcy having addressed key issues that had greatly impacted its significant structural deficit. Since its filing, the Association has experienced increased attendance and an increased number of Annual Fund donors, specifically new donors. The Association has also raised nearly $37 million for its Transformation Fund, which was created in April 2011 to assist the Orchestra through its financial restructuring and in the runway funding for its plan. "We have tremendous momentum--artistically and institutionally--as we move forward from this process," said Allison Vulgamore, president and CEO of The Philadelphia Orchestra. "Returning from our successful residency pilot in China where the Orchestra reaffirmed its world-renowned sound throughout the provinces, to the profound enthusiasm displayed by Philadelphia audiences during our recent Stokowski Celebration at the Academy of Music, our community is newly invigorated around The Philadelphia Orchestra. As we close a critical time in our history with this confirmation, we have begun a transformative new era with Yannick Nezet-Seguin as our music director with a strong resolve to ensure that this Orchestra remains the cultural icon of Philadelphia that it has always been--a world ambassador for our Commonwealth." About Philadelphia Orchestra The Philadelphia Orchestra -- http://www.philorch.org/-- claims to be among the world's leading orchestras. Bloomberg News says the orchestra became the first major U.S. symphony to file for bankruptcy protection, surprising the music world. Previous conductors include Fritz Scheel (1900-07), Carl Pohlig (1907-12), Leopold Stokowski (1912-41), Eugene Ormandy (1936-80), Riccardo Muti (1980-92), Wolfgang Sawallisch (1993-2003), and Christoph Eschenbach (2003-08). Charles Dutoit is currently chief conductor, and Yannick Nezet-Seguin has assumed the title of music director designate until he takes up the baton as The Philadelphia Orchestra's next music director in 2012. The Philadelphia Orchestra Association, Academy of Music of Philadelphia, Inc., and Encore Series, Inc., filed separate Chapter 11 petitions (Bankr. E.D. Pa. Case Nos. 11-13098 to 11-13100) on April 16, 2011. Judge Eric L. Frank presides over the case. The Philadelphia Orchestra Association is being advised by Dilworth Paxson LLP, its legal counsel, and Alvarez & Marsal, its financial advisor. Curley, Hessinger & Johnsrud serves as its special counsel. Philadelphia Orchestra disclosed $15,950,020 in assets and $704,033 in liabilities as of the Chapter 11 filing. Encore Series, Inc., tapped EisnerAmper LLP as accountants and financial advisors. Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Debtors' case. Reed Smith LLP serves as the Committee's counsel. The orchestra postpetition signed a new contract with musicians and authority to terminate the existing musicians' pension plan. PIGGLY WIGGLY: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Piggly Wiggly of Crystal Springs, Inc. 509 W. Marion Avenue Crystal Springs, MS 39059 Bankruptcy Case No.: 12-02054 Chapter 11 Petition Date: June 25, 2012 Court: U.S. Bankruptcy Court Southern District of Mississippi (Jackson Divisional Office) Judge: Neil P. Olack Debtor's Counsel: J. Walter Newman, IV, Esq. NEWMAN & NEWMAN 248 East Capitol Street, Suite 539 Jackson, MS 39201 Tel: (601) 948-0586 Fax: (601) 948-0588 E-mail: wnewman95@msn.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Kenneth Bowman, Jr., vice president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- The Bowman Company 12-02052 06/25/12 PINNACLE AIRLINES: Court Fixes Aug. 6 as General Claims Bar Date ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York established Aug. 6, 2012, at 5 p.m. (prevailing Eastern Time) as the deadline for any individual or entity to file proofs of claim against Pinnacle Airlines Corp., et al. The Court also set Sept. 28, at 5 p.m. as governmental bar date. Proofs of claim may be delivered: * by hand or overnight courier to: Pinnacle Airlines Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC 757 Third Avenue, 3rd Floor New York, NY 10017 The United States Bankruptcy Court, SDNY One Bowling Green, Room 534 New York, NY 10004-1408 or * by mailing the original proof of claim to: Pinnacle Airlines Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC FDR Station, P.O. Box 5071 New York, NY 10150-5071 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. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. 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: NSB Aviation Approved as Advisor/Consultant -------------------------------------------------------------- The Hon. Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York authorized Pinnacle Airlines Corp., et al., to employ NSB Aviation, LLC as their advisor/consultant to provide interim management and restructuring services; and (b) designate Steven A. Rossum as chief restructuring officer in each case. As reported in the Troubled Company Reporter on June 21, 2012, NSB will, among other things: a) assist the Debtors' management in the design and implementation of a restructuring strategy; b) advise the Debtors' management and boards of directors and working with management and its advisors on achieving cost targets contemplated by the Debtors' business plan; and c) provide, if requested by the Debtors, testimony in connection with any Chapter 11 cases. Mr. Rossum, president and managing director of NSB, tells the Court that the Debtors agreed to compensate him and NSB as: 1. A monthly fee in the amount of $57,000, payable upon submission of monthly invoices. 2. In the event of a Termination without Cause by the Debtors, the Engagement Letter provides that the Debtors will have no further liability or obligation whatsoever, except that they will pay NSB all compensation that has accrued, but is unpaid prior to the termination, and any expenses incurred prior to the termination and payable pursuant to the Engagement Letter. 3. NSB will submit monthly invoices to the Debtors that will include (i) a reasonable summary of services provided, (ii) an approximation of the aggregate hours worked, and (iii) a summary of expenses incurred to the Debtors. 4. NSB will file with the Court quarterly reports of compensation earned and provide copies to the U.S. Trustee and Committee Counsel; and parties-in-interest in these Chapter 11 cases will have the right to object to fees paid and expenses reimbursed to NSB within 20 days after NSB files the reports. Mr. Rossum assures the Court that NSB and its professionals are "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. 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. PRINCE SPORTS: Creditors Voting on Chapter 11 Plan -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that creditors have begun voting on the reorganization plan proposed by Prince Sports Inc. The confirmation hearing for approval of the plan is scheduled to take place July 27 in U.S. Bankruptcy Court in Wilmington, Delaware. The plan calls for an affiliate of Authentic Brands Group LLC to take ownership in exchange for $67.2 million in secured debt it purchased. The plan proposes to give cash and lawsuit recoveries to unsecured creditors, for an expected recovery of 29% on $13.8 million in claims. 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. The Company pioneered many innovative designs, including the "oversized" racquet, the "longbody" racquet, and technology for racquet applications such as Triple Threat, 03 and EX03. 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. The Debtor has a Chapter 11 plan where (ABG)-Prince LLC, which acquired the secured debt from GE Capital and Madison Capital, will be acquiring 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 Consultin, Inc., to provide David J. Woodward as Chief Restructuring Officer, and provide additional personnel. Epiq Bankruptcy Solutions LLC is the claims and notice agent. An official committee of unsecured creditors has been appointed in the case. PROFESSIONAL AUDIO: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Professional Audio Design, Inc. 90 Corporate Park Drive, Suite 1420 Pembroke, MA 02359 Bankruptcy Case No.: 12-15424 Chapter 11 Petition Date: June 25, 2012 Court: U.S. Bankruptcy Court District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Nina M. Parker, Esq. PARKER & ASSOCIATES 10 Converse Place Winchester, MA 01890 Tel: (781) 729-0005 Fax: (781)729-0187 E-mail: nparker@ninaparker.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 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/mab12-15424.pdf The petition was signed by David Malekpour, president, treasurer and director. PRY-WING, LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Pry-Wing, LLC 4210 Columbia Road, Suite 17-C Martinez, GA 30907 Bankruptcy Case No.: 12-11113 Chapter 11 Petition Date: June 24, 2012 Court: U.S. Bankruptcy Court Southern District of Georgia (Augusta) Debtor's Counsel: James T. Wilson, Jr., Esq. JAMES T. WILSON, JR., P.C. 945 Broad Street, Suite 220 P.O. Box 2112 Augusta, GA 30903 Tel: (706) 722-4933 Fax: (706) 722-0472 E-mail: brooke@jtwilsonlaw.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 with the petition is available for free at: http://bankrupt.com/misc/gasb12-11113.pdf The petition was signed by William G. Wingate, member. QUANTUM CORP: Assigns $25MM of Revolver Commitment to Silicon ------------------------------------------------------------- Quantum Corporation amended its credit agreement dated March 29, 2012, with Wells Fargo Capital Finance LLC, as administrative agent, and the lenders party thereto, in order to allow for the assignment of an aggregate of $25 million of the total revolver commitment under the Credit Agreement to Silicon Valley Bank. This amendment also made certain other conforming and related modifications to the Credit Agreement. A copy of the amendment is available for free at http://is.gd/cezOAO About Quantum Corp. Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive. Quantum provides a comprehensive, integrated range of disk, tape, and software solutions supported by a world-class sales and service organization. The Company reported a net loss of $8.81 million for the fiscal year ended March 31, 2012, compared with net income of $4.54 million during the prior year. The Company's balance sheet at March 31, 2012, showed $395.34 million in total assets, $442.02 million in total liabilities, and a $46.68 million stockholders' deficit. QUANTUM FUEL: Sells $4.6 Million Bridge Notes --------------------------------------------- Quantum Fuel Systems Technologies Worldwide, Inc., entered into separate Subscription Agreements with certain "accredited investors" for the sale and purchase of $4,625,000 of unsecured senior subordinated nonconvertible promissory notes and warrants to purchase shares of the Company's common stock. The Company received gross proceeds of $4,625,000, of which $2,375,000 was paid in cash and $2,250,000 was paid by the cancellation of unsecured convertible notes owed by the Company to certain of the Investors that participated in the Private Placement that were scheduled to mature on various dates during October 2012 and November 2012. The net cash proceeds from the Private Placement will be used for general working capital purposes. The Bridge Notes are unsecured obligations of the Company and are subordinate in all respects to the Company's senior secured indebtedness. Interest accrues at a rate of 12% per year and is payable quarterly in arrears on October 1, January 1, April 1 and July 1. The Company paid its placement agent a cash fee equal to $371,250 for services rendered in connection with the Private Placement. A copy of the Form 8-K is available for free at: http://is.gd/KKJQdP About Quantum Fuel Based in Irvine, California, Quantum Fuel Systems Technologies Worldwide, Inc., is a fully integrated alternative energy company and considers itself a leader in the development and production of advanced clean propulsion systems and renewable energy generation systems and services. Quantum Fuel reported a net loss attributable to stockholders of $38.49 million on $24.47 million of total revenue for the eight months ended Dec. 31, 2011, compared with a net loss attributable to stockholders of $6.52 million on $10.51 million of total revenue for the same period a year ago. The Company reported a net loss of $11.03 million for the year ended April 30, 2011, following a net loss of $46.29 million during the prior year. The Company's balance sheet at March 31, 2012, showed $51.54 million in total assets, $17.48 million in total liabilities, and $34.06 million in total stockholders' equity. Haskell & White LLP, the Company's independent registered public accounting firm for the Transition Period ended Dec. 31, 2011, has included an explanatory paragraph in their opinion that accompanies the Company's audited consolidated financial statements as of and for the eight months ended Dec. 31, 2011, indicating that the Company's current liquidity position raises substantial doubt about its ability to continue as a going concern. If the Company is unable to further improve its liquidity position, the Company may not be able to continue as a going concern. QUICKSILVER RESOURCES: S&P Lowers Corp. Credit Rating to 'B-' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Quicksilver Resources Inc. to 'B-' from 'B'. The outlook is negative. "At the same time, we lowered the issue rating on Quicksilver's senior unsecured debt to 'CCC+' (one notch lower than the corporate credit rating) from 'B-'. The recovery rating on this debt is '5', indicating our expectation of modest (10% to 30%) recovery for lenders in the event of a default. We also lowered the issue rating on Quicksilver's subordinated debt to 'CCC'(two notches lower than the corporate credit rating) from 'CCC+'. The recovery rating on this debt is '6', indicating our expectation of negligible (0% to 10%) recovery for lenders in the event of a default," S&P said. "The downgrade primarily reflects the prospects for weaker profitability and deteriorating credit protection measures, and the risk of ongoing negative free cash flow and liquidity burn at Quicksilver as a result of our lower natural gas liquids pricing assumptions and our lower production estimate," said Standard & Poor's credit analyst Carin Dehne-Kiley. "We recently reduced our NGL pricing assumptions to 42% of West Texas Intermediate (WTI) crude oil in 2012 and 50% of WTI in 2013, from 53% of WTI in each year, previously. NGLs currently constitute about 18% of Quicksilver's total equivalent production, and although the company has about 60% of its NGL volumes hedged in 2012, it has no NGL volumes hedged for 2013." "In addition, we have reduced our production estimates for 2012 due to the company's lower guidance for second-quarter volumes. On May 8, 2012, Quicksilver provided second-quarter 2012 production guidance of 375 million cubic feet equivalent per day (MMcfe/d) to 385MMcfe/d, compared with 377 MMcfe/d in the first quarter and an average of 412 Mmcfe/d in 2011. In response to lower natural gas prices, the company has significantly slowed drilling and completion activities in the dry gas areas of the Barnett shale, leading to production declines. We are now assuming production declines about 5% year-over-year in 2012, versus increasing about 1% in our previous projections," S&P said. "Also, our view is that debt-to-EBITDA will increase above levels that are appropriate for the 'B' rating category. Based on this year's capital program of $370 million, and incorporating our assumption of a similar capital spending level in 2013, we estimate the company's debt-to-EBITDA will exceed 5.5x at year-end 2012 and approach 7.5x at year-end 2013," S&P said. "Our rating on Ft. Worth, Texas-based Quicksilver reflects the company's 'vulnerable' business risk and 'highly leveraged' financial risk. Our assessment of the company's business risk is based on its participation in the cyclical and capital-intensive E&P industry and its vulnerability to the currently weak natural gas and natural gas liquids markets, given that natural gas and NGLs account for about 80% and 18%, respectively, of its total current production and proven reserve base. Based on actual first- quarter realized prices and costs, Quicksilver's operating income (EBIT) per unit of production is negative, while it still carries relatively high debt given acquisition activity over the past few years. The ratings also reflect the company's relatively large proven reserve base for the rating category, low cost structure, and above market-priced hedges in 2012 (although these begin to roll off in 2013)," S&P said. "The negative outlook reflects our expectations that Quicksilver's cash flows and credit metrics will deteriorate over the next two years, with debt to EBITDA exceeding 5.5x by year-end 2012 and approaching 7.5x at year-end 2013. Our outlook assumes no proceeds from the company's planned MLP or joint venture agreements, which could be used to reduce leverage, or any capex reductions," S&P said. "We could lower the rating if liquidity drops below $200 million, which would most likely occur if the company loses full access to its credit facility, or if its borrowing base is significantly reduced. We could stabilize the rating if the company is able to bring debt-to-EBITDA back below 5.25x, and we believe that level is sustainable," S&P said. QVC INC: S&P Keeps 'BB' Corporate Credit Rating; Outlook Stable --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB-' issue-level rating and '1' recovery rating to QVC Inc.'s proposed $500 million senior secured notes due 2022. "The new rating is two notches above our 'BB' corporate credit rating on the company. The '1' recovery rating indicates our expectation of very high (90%-100%) recovery for debtholders in the event of a payment default. QVC is a wholly owned subsidiary of Liberty Interactive Corp. and as a result, we analyze the two companies on a consolidated basis at the Liberty Interactive level. The company intends to use the proceeds from the notes offering to repay outstanding borrowings under QVC's revolving credit facility and for general corporate purposes," S&P said. "The 'BB' corporate credit rating remains unchanged, along with the stable outlook, and is based on management's shareholder- favoring policy, including a history of split-offs and debt- financed share repurchases, but also considers QVC's solid competitive position and operating performance. We believe share repurchases will be an ongoing use of cash and that management could contemplate acquisitions and potentially a dividend. QVC's sizable equity portfolio and the solid business prospects of QVC partially mitigate these negative factors," S&P said. "For 2012, we are expecting mid-single-digit percentage revenue and EBITDA growth. We are assuming moderate growth across most of QVC's markets, with some softness in Germany. However, a return to recession, which we view as having a 20% probability, could lead to slower revenue and EBITDA gains, if any," S&P said. "The rating outlook on QVC is stable. The company's performance has been good despite the recession and a weak recovery. We expect the company's steady operating performance will continue over the intermediate term, absent a recession. We could lower the rating if Liberty Interactive pursues sizable acquisitions or debt- financed share repurchases, pushing debt leverage above 4.5x. An upgrade to 'BB+' would require the company to demonstrate a commitment to a more conservative financial policy and acquisition strategy while preserving its solid competitive position," S&P said. RATINGS LIST QVC Inc. Liberty Interactive Corp. Corporate Credit Rating BB/Stable/-- New Ratings QVC Inc. Senior Secured $500 mil notes BBB- Recovery Rating 1 RCR PLUMBING: Plan Outline Hearing Continued Until July 10 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California continued until July 10, 2012, at 1:30 p.m., the hearing to consider adequacy of the Disclosure Statement explaining RCR Plumbing and Mechanical Inc.'s Plan of Reorganization. As reported in the Troubled Company Reporter on June 6, 2012, according to the Disclosure Statement dated April 27, 2012, the Plan contemplates that the Debtor will continue operating as a plumbing and HVAC subcontractor for medium- to large-scale residential and commercial building projects. The Debtor will complete its current projects and may submit bids for new projects. The Debtor will use the proceeds from its operations, including the proceeds from the sale of any personal property no longer necessary for operations, well as any net proceeds from the Post-Confirmation Litigation to pay creditors. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/RCR_PLUMBING_ds.pdf About RCR Plumbing Founded in 1977, Riverside, California-based RCR Plumbing and Mechanical Inc. is one of the largest plumbing subcontractors in the West Coast. In 1999, RCR Plumbing was acquired by American Plumbing and Mechanical Inc. On Oct. 13, 2003, AMPAM and its affiliated entities, including RCR Plumbing, filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Lead Case No. 03-55789) in San Antonio. Pursuant to a plan of reorganization, RCR Plumbing received a discharge of any liability arising from contracts completed prior to Aug. 2, 2004, the date the plan was confirmed. The plan disaggregated RCR Plumbing from AMPAM. RCR Plumbing filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-41853) on Oct. 12, 2011. RCR Plumbing blamed a weak construction market and increased insurance costs. Judge Wayne E. Johnson oversees the case. Evan D. Smiley, Esq., and Kyra E. Andrassy, Esq. at Weiland, Golden, Smiley et al., serve as the Debtor's counsel. Sidley Austin LLP as its special labor and employment counsel BSW & Associates as financial advisor. Kurtzman Carson Consultants LLC serves as noticing agent. In its petition, RCR Plumbing estimated $10 million to $50 million in assets and debts. The petition was signed by Robert C. Richey, president/CEO. The Official Committee of Unsecured Creditors tapped Venable LLP as its counsel. RESEARCH IN MOTION: To Ax 5,000 Jobs After Another Losing Quarter ----------------------------------------------------------------- Blackberry maker Research In Motion Limited on Thursday reported first quarter results for the three months ended June 2, 2012 (for fiscal year 2013). RIM said revenue for the first quarter of fiscal 2013 was US$2.8 billion, down 33% from US$4.2 billion in the previous quarter and down 43% from US$4.9 billion in the same quarter of fiscal 2012. RIM said GAAP net loss for the quarter was US$518 million compared with a GAAP net loss of US$125 million in the prior quarter and GAAP net income of US$695 million in the same quarter last year. RIM also said its restructuring efforts are underway and will include a global workforce reduction of approximately 5,000 employees from its current workforce of 16,500 as part of its efforts to realize over US$1 billion in cost savings, based on the Company's fourth quarter fiscal year 2012 run rate. "Our first quarter results reflect the market challenges I have outlined since my appointment as CEO at the end of January. I am not satisfied with these results and continue to work aggressively with all areas of the organization and the Board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the Company on areas that have the greatest opportunities," said Thorsten Heins, President and CEO. "Our top priority going forward is the successful launch of our first BlackBerry 10 device, which we now anticipate will occur in the first quarter of calendar 2013. According to Mr. Heins, in parallel with the roll out of BlackBerry 10, we are aggressively working with our advisors on our strategic review and are actively evaluating ways to better leverage our assets and build on our strengths, including our growing BlackBerry subscriber base of approximately 78 million, our large enterprise installed base, our unique network architecture and our industry leading security capabilities." The Company said it expects to incur restructuring related charges of approximately $350 million by the end of fiscal 2013, primarily associated with the global workforce reduction. Other charges and cash costs may occur during this process, and the Company intends to share more details throughout the year regarding its progress as programs are implemented or changes are completed. RIM expects the next several quarters to continue to be very challenging for its business based on the increasing competitive environment, lower handset volumes, potential financial and other impacts from the delay of BlackBerry 10, pressure to reduce RIM's monthly infrastructure access fees, and the Company's plans to continue to aggressively drive sales of BlackBerry 7 handheld devices. The Company also expects to report an operating loss in the second quarter of fiscal 2013, as RIM continues to invest in marketing programs and continues to work through the transition to BlackBerry 10, as well as the Company's fixed costs being allocated over a lower volume of shipments. This outlook excludes the impact of charges related to the CORE Program. As of June 2, 2012, RIM had US$13.06 billion in total assets against US$3.45 billion in total liabilities. A copy of RIM's earnings release is available at no extra charge at http://is.gd/cM6zfo * * * The Wall Street Journal's Chip Cummins reports that RIM's shares fell 19% to $7.39 on Friday, June 29, driving the company's market capitalization to $3.81 billion, less than 1/20th of its peak value in 2008. The selloff came a day after the company's announcements that included a delay in the debut of its next BlackBerry phone, a larger-than-expected loss and as many as 5,000 layoffs. RIM said it is now expecting to start selling its next phone, using the coming BlackBerry 10 operating system, in early 2013. According to WSJ, stripping out its cash, investors are now essentially valuing the rest of RIM's global operations, brands and other assets at a mere $1.6 billion. A big question mark, the report says, is the value of the company's patents, which analysts have pegged anywhere between $2 billion and $5 billion. WSJ says the selling Friday ratchets up pressure on RIM to explore radical strategic shifts that it has so far signaled it doesn't yet see as a priority, such as a sale of the company. WSJ relates CEO Heins declined to discuss details of the company's strategic review Thursday, saying only that many options were still open to the board. WSJ also reports Bank of America-Merrill Lynch analysts in a Friday morning note said they do "not believe RIM will be able to build its own ecosystem" to challenge smartphone market leaders Apple Inc. and Google Inc.'s Android, and new competition from upstart player Microsoft Corp. WSJ reports that RIM CFO Brian Bidulka told analysts Thursday he expects cash levels to remain largely the same through the current quarter. About Research In Motion Founded in 1984 and based in Waterloo, Ontario, Blackberry(R) maker Research In Motion Limited -- http://www.rim.com/or http://www.blackberry.com/-- operates offices in North America, Europe, Asia Pacific and Latin America. RIM is listed on the NASDAQ Stock Market (NASDAQ: RIMM) and the Toronto Stock Exchange (TSX: RIM). RESIDENTIAL CAPITAL: Triax Objects to $8.7-Bil. RMBS Trust Deal --------------------------------------------------------------- Triaxx Prime CDO 2006-1, LLC; Triaxx Prime 2006-2, LLC; and Triaxx Prime CDO 2007-1, LLC, oppose the proposed settlement, complaining that it is inequitable and disproportionately favors investors in the riskier Trusts. As reported in the June 22, 2012 edition of the Troubled Company Reporter, the Debtors are asking Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to approve a compromise and settlement of an allowed claim of up to $8.7 billion against Debtors Residential Funding Company, LLC and GMAC Mortgage LLC, to be offered and allocated among certain securitization trusts pursuant to settlement agreements. The RMBS Trust Settlement resolves, in exchange for the Allowed Claim, alleged and potential representation and warranty claims held by up to 392 securitization trusts in connection with approximately 1.6 million mortgage loans and approximately $221 billion in original issue balance of associated residential mortgage-backed securities, comprising all of such securities issued by the Debtors' affiliates from 2004 to 2007. On behalf of Triaxx, John G. Moon, Esq., at Miller & Wrubel P.C., in New York -- jmoon@mw-law.com -- complains that the allocation formula set forth in the RMBS Trust Settlement treats all trusts as the same and merely allocates according to losses across as the trusts. He notes that Triaxx invested only safer prime and fixed- rate alt-A Trusts. The riskier Trusts would have been expected to have greater losses than prime or fixed-rate alt-A Trusts due to the greater risk associated with subprime, alt-A POA and second lien Loans, even absent any representation and warranty violations, he stresses. Notably, Triaxx has analyzed 356 of the 392 trusts covered by the proposed settlement. The trusts analyzed by Triaxx have realized losses of approximately $27.1 billion. Based on the delinquent loans still held by the Trusts and other factors Triaxx estimates that the total losses will ultimately be approximately $48 billion for the Trusts it analyzed. The total losses for all 392 Trusts would be greater. Mr. Moon further contends that the proposed settlement and the Debtors' Motion refer collectively to the Debtors and fail to differentiate among them. Notably, the Debtors that made representations and warranties to the Trusts include RFC and GMAC, operating subsidiaries of ResCap. He avers that the circumstances of the proposed settlement are questionable. It seems that the proposed Settlement appears to be part and parcel of a deal to release non-debtor AFI from liability for the Trusts' claims, he asserts. The Proposed Settlement is also vague as to the amount of the attorney compensation, which could exceed $400 million, that would actually be paid to the law firms, he adds. The entities hold 24 classes of certificates issued by 20 of the RMBS trusts covered by the settlement. As of May 31, 2012, Triaxx held an aggregate notional amount of $637 million of those certificates. Triaxx's holdings in 23 classes of these certificates constitute greater than 25% of such class. Judge Glenn adjourned the hearing to consider the RMBS Trust Settlement from July 24, 2012 to a date to be determined. 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, 2012. 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. 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: Hearing on Plan Support Deal Adjourned ----------------------------------------------------------- Judge Martin Glenn adjourned the hearing to consider approval of Residential Capital's Plan Support Agreements to a date to be determined. The hearing was originally scheduled for July 24, 2012. As reported in the June 22, 2012 edition of the Troubled Company Reporter, the Debtors seek the Bankruptcy Court's permission to assume substantially similar plan support agreements entered into with two groups of consenting claimants, one lead by the Steering Committee Group, and the other lead by Talcott Franklin, P.C. The consenting claimants from both groups are investors in residential mortgage-backed securities backed by mortgage loans held by securitizations sponsored by the Debtors between 2004 and 2007. The Plan Support Agreements, in conjunction with plan support agreements with Ally Financial Inc., will enable the Debtors to move expeditiously towards confirmation and consummation of the Plan with the support of parties representing the Debtors' key secured creditor constituencies and most of the general unsecured claim pool in these bankruptcy cases, says Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York. "The RMBS Trust Settlement Agreements and Plan Support Agreements are intended to prevent the extended litigation (relating to the RMBS and the Debtors' key restructuring activities, including Plan confirmation, distraction, costs and delays in the administration of the Debtors' bankruptcy cases that would result if the Debtors were not able to resolve the claims held by the trustees for the Trustees related to certain alleged breaches of representations and warranties by the Debtors associated with the Debtor-sponsored securitizations," according to Mr. Nashelsky. In general, the Plan Support Agreements require the Consenting Claimants to direct the Trustees to vote in favor of and support confirmation of a plan of reorganization consistent with (i) the Plan Term Sheet and (ii) a separate settlement with AFI, including the cash contribution of $750 million. The Consenting Claimants also agree to (i) support, and direct the Trustees to support, various motions and applications to be filed by the Debtors, including the Debtors' motion to stay litigation against AFI; and (ii) use commercially reasonable efforts to get other RMBS holders to join the Plan Support Agreements or RMBS Trust Settlement Agreements. In exchange, the Debtors agree to, among other things, effectuate and consummate restructuring contemplated by the Plan Term Sheet, including the AFI Settlement Agreement, in accordance with milestones contained in the Plan Support Agreements, including: * Obtaining final approval of debtor-possession financing on or before 50 days following the Petition Date; * Obtaining approval of the Plan Support Agreements by the earlier of (i) 60 days following the Petition Date and (ii) the date on which the Court enters an order approving the Disclosure Statement. * Obtaining entry of an order of the Court approving the Compromises contemplated by the RMBS Trust Settlement Agreement on or before 60 days following the Petition Date; * Obtaining approval the Disclosure Statement on or before 90 days following the Petition Date; * Obtaining approval of proposed bidding procedures for the sales of assets contemplated in the Executive Summaries on or before 90 days following the Petition Date; * Obtaining confirmation of the Plan on or before October 31, 2012; and * On or before December 15, 2012, the effective date of the Plan will have occurred. The Plan Support Agreements, however, do not materially restrict the Debtors' ability to consider alternative plan structures in a manner consistent with their fiduciary duties. Full-text copies of the Plan Support Agreements are available for free at: http://bankrupt.com/misc/ResCap_SteeringCommPlanSupportAgr.pdf http://bankrupt.com/misc/ResCap_TalcottPlanSupportPact.pdf 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, 2012. 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. 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: Court Approves AFI Shared Services Agreement ----------------------------------------------------------------- Judge Martin Glenn authorized Residential Capital LLC and its affiliates, on a final basis, to enter into a shared services agreement with Ally Financial Inc., nunc pro tunc to the Petition Date for the continued receipt and provision of shared services necessary for the operation of the Debtors' businesses. The final order also provides that the Debtors will provide a five-day advance notice to the Official Committee of Unsecured Creditors, with respect to any material amendments or modifications to the agreement, or proposed assignment of the agreement. Before entry of the final order, ResCap Chief Financial Officer James Whitlinger related that as a result of the intensive and thorough negotiations that occurred between the two companies, the final cost to ResCap for services provided by AFI under the Agreement was reduced to approximately $123 million -- a significant reduction reflecting the provision of services that are absolutely necessary to the functioning of ResCap and its subsidiaries as debtors-in-possession. The pricing methodology that was utilized in connection with the creation of the Agreement is also notable because it allowed ResCap to capture the reduction in or elimination of certain services. The Creditors' Committee earlier commented that the description of the Shared Services Agreement in the Debtors' Motion lack material discussion evidencing that the agreement was negotiated at arm's-length and in good faith, including how the intercompany activity was calculated and charged historically, and the business justification for obtaining those services through AFI, as opposed to a third-party service provider. After discussions with the Debtors and a review of the historical costs and payment structure provided to the panel, the Creditors' Committee believes that the terms of the Shared Services Agreement are not detrimental to the Debtors' estates. The Creditors' Committee has also negotiated with the Debtors regarding providing the panel with notice of any material amendments or modifications to the agreement, or proposed assignment of the agreement. With those modifications, the Creditors' Committee has no objection to entry of the Shared Services Agreement. The Debtors then filed with the Court an amended proposed final order incorporating those modifications. The Court signed the amended proposed order on June 15, 2012. 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, 2012. 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. 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: Wins Approval to Pay Employee Obligations -------------------------------------------------------------- Judge Martin Glenn allowed Residential Capital LLC and its affiliates, on a final basis, to pay their prepetition employee obligations, including its obligation to reimburse Ally Financial Inc. for any costs AFI has paid or will pay on account of the Prepetition Employee Obligations. Judge Glenn, however, limited prepetition employment obligations payments to not more than $11,725 to any single employee or contractor absent notice and consent by the Official Committee of Unsecured Creditors. George Crowley, Sr., human resources directors of the Debtors told Judge Glenn that the Debtors' businesses derive their value from the world-class service delivered by approximately 3,625 employees and 275 contractors employed by the Debtors. These employees and contractors, Mr. Crowley maintains, are the Debtors' single most valuable asset. For severance payments under the ResCap Severance Program, the Debtors will provide prior notice to the Creditors' Committee and the U.S. Trustee of any severance payment in cases where: (a) the Employee is eligible for Tier II benefits under the ResCap Severance Program; (b) the severance payment to the individual Employee exceeds $50,000; (c) the Debtors' actions in any month will cause the Debtors to incur additional aggregate severance payments in excess of $500,000; or (d) the total number of Employees eligible to receive severance payments will exceed 40 for that month. The Debtors will not make any payments under the ResCap Severance Program in excess of those Thresholds absent such notice to the Creditors' Committee or the US Trustee. The Debtors will not make any payments under the AFI Long Term Equity Compensation Plan and the ResCap Annual Plan without further order of the Court. The Debtors' banks are authorized and directed to receive, process, honor and pay any and all prepetition and postpetition checks and fund transfers evidencing payments made under this final order or any other order of the Court. The Debtors are further authorized to issue new postpetition checks or effect new postpetition fund transfers on account of the Prepetition Employee Obligations authorized by the Final Order to replace any prepetition checks or fund transfer requests that may be dishonored or rejected. Judge Glenn held that nothing in the Debtors' Motion, the Final Order, the Bankruptcy Code or the relief granted will prohibit or otherwise restrict AFI from continuing or making payments on account of any compensation and benefit programs covering the Debtors' Employees, Directors or Contractors. The Debtors are also authorized to modify, change and discontinue any of the policies, plans, programs, practices, and procedures associated with compensation and benefits programs for their Employees and Contractors and to implement new plans, policies, practices and procedures related thereto in the ordinary course of business during these Chapter 11 cases in their sole discretion without the need for further Court approval; provided that the Debtors will notify the Creditors' Committee and the U.S. Trustee of any modifications, changes, discontinuances or additions to the Debtors' compensation and benefit programs. Before entry of the final order, the Debtors filed with the Court a revised proposed final order to reflect modifications negotiated with the Creditors' Committee. The Creditors' Committee specifically wanted the final order to provide that the Debtors will notify the panel if they intend to make severance payments or any modifications, changes, discontinuances or additions to the Debtors' compensation and benefit programs. The Court signed the revised proposed order on June 15, 2012. Salary Stock Payments Mr. Crowley relates that as a result of Ally Financial Inc. having received funds under the Troubled Asset Relief Program, the U.S. Government has imposed limitations on the amount, form, and timing of compensation paid to certain employees of AFI and its subsidiaries, including the Debtors and their top executives. For those individuals among the "Top 25" highest paid employees in the AFI organization, the structure and amounts of their annual compensation are subject to the approval of the OSM. Mr. Crowley relates that there are three ResCap employees who are in AFI's "Top 25" and are scheduled to continue to receive payment postpetition on account of previously-issued Salary Stock, as well as new Salary Stock to be issued within each bi- weekly pay period: ResCap's Chief Executive Officer, President and Chief Capital Markets Officer. The amounts collectively owed to these ResCap's employees for Salary Stock issued before the Petition Date is approximately $12.5 million, he discloses. But for the TARP restrictions, the Debtors' employees in the "Top 25" would have received the monetary equivalent of the Salary Stock before the Petition Date as part of the regular payment of their base salary. To obtain requisite Court authority for these Salary Stock- related practices, the Debtors are working with AFI and the Creditors' Committee to develop a proposed resolution, for which the Debtors will file a motion as soon as practicable. The Debtors will also engage with AFI and the Creditors' Committee to develop an acceptable reimbursement mechanism for the TARP Stock and restricted stock units that vested both before and after the Petition Date, with the aim of safeguarding the interests of the Debtors' senior management, Mr. Crowley says. "These personnel are critical to the Debtors' ongoing reorganization efforts and should not be deprived of their previously-earned compensation, especially as these awards do not prejudice the Debtors' estates and its creditors and, subject to Court approval, are permissible under the Bankruptcy Code," Mr. Crowley 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, 2012. 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. 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). RG STEEL: Mountain State Carbon Lawsuit Goes Back to State Court ---------------------------------------------------------------- Mountain State Carbon, LLC, which is 50% owned by RG Steel Wheeling LLC, convinced a district judge in Wheeling, West Virginia, to remand its lawsuit against suppliers to the Circuit Court of Brooke County. Judge Robert C. Chambers said, though a number of factors weigh in favor of maintaining federal jurisdiction, the case for remand is significantly more compelling because: -- the action exclusively involves state law claims and non-debtor parties; -- the action bears only a remote connection to the bankruptcy case of RG Steel; and -- the economical use of judicial resources will be undeniably better served by remand to a state court that is equipped with nearly four years of experience not only with the ins and outs of the parties' contentions but also with the evidence discovered and anticipated to be presented at trial in support of those contentions, rather than remaining with a district court or being transferred to a bankruptcy court that will be asked to start back at day one. "[T]here can be no question that the outcome of t[he lawsuit] could conceivably have an effect on RG Steel's bankruptcy estate, which is being administered in the District of Delaware. Specifically, due to RG Steel's 50% ownership of Mountain State, any recovery in this action could conceivably increase the size of RG Steel's bankruptcy estate for the benefit of his creditors," Judge Chambers said. The lawsuit is, MOUNTAIN STATE CARBON, LLC, Plaintiff, v. CENTRAL WEST VIRGINIA ENERGY COMPANY, MASSEY ENERGY COMPANY, n/k/a Alpha Appalachia Holdings, Inc., MASSEY COAL SALES COMPANY, INC., n/k/a Appalachia Coal Sales Company, Inc., Defendants, Civil Action No. 5:12-CV-87 (N.D. W.Va). A copy of the District Court's June 26, 2012 Memorandum Opinion and Order is available at http://is.gd/DAPVxffrom Leagle.com. In 1993, Wheeling Pittsburgh Steel Corporation entered into a 10-year coal supply agreement with defendant Central West Virginia Energy Company. Pursuant to the Coal Supply Agreement, Central Energy agreed to supply, and Wheeling Pitt agreed to purchase from Central Energy, 100% of the metallurgical coal requirements of its Follansbee, West Virginia, plant. In 2002, an amendment to the Coal Supply Agreement extended the term of the contract seven years and specified that each contract year ran from November 1st to October 31st. In 2005, Mountain State Carbon, LLC, was formed as a joint venture between Wheeling Pitt and SNA Carbon, LLC, to own and operate the Follansbee plant under the Coal Supply Agreement. Prior to the commencement of each contract year, Mountain State is required to advise Central Energy of its annual coal requirements for the upcoming contract year. Central Energy is then required to deliver, and Mountain State is required to accept, not less then 95% and not more than 105% of the identified annual requirements, deliverable during that contract year. Mountain State has the right to allocate its annual requirements for delivery across the four quarters of the contract year. However, at least 90 days before an upcoming quarter, Mountain State must give Central Energy written notice of the amount of annual requirements to be delivered during that quarter. If Mountain State fails to give proper notice, then the parties operate from the quantity of coal delivered during the preceding quarter. Central Energy is required to deliver, and Mountain State is required to accept, not less than 90% and not more than 110% of the nominated quantity of coal, such coal deliverable during that quarter. Though not contractually required, Central Energy obtained its coal from Massey Energy Company, n/k/a Alpha Appalachia Holdings, Inc., through Massey Coal Sales Company, Inc., n/k/a Appalachia Coal Sales Company, Inc. During the first half of 2008, demand for steel (and thus metallurgical coal) rose significantly, pushing market prices well beyond the price agreed to in the Coal Supply Agreement. According to Mountain State, Massey consequently directed Central Energy to reduce its Mountain State deliveries so that Massey could sell and ship more coal to other customers at higher prices. In August 2008, the demand for steel dropped dramatically. At that time, Wheeling Pitt was acquired by Severstal North America, Inc., the United States domestic arm of OAO Severstal, and renamed Severstal Wheeling, Inc. Though due on Aug. 3, 2008, Mountain State failed to provide Central Energy with 90 days' notice of the quantity of coal it required for the quarter to commence Nov. 1, 2008. Instead, by letter dated Oct. 28, 2008, Mountain State advised Central Energy that it required 1,128,000 tons of coal for the upcoming contract year and only 228,000 tons for the first quarter. By letter dated Jan. 30, 2009, Mountain State advised Central Energy that it wished to reduce the nominated quantity it was obligated to accept during the second quarter. In the same letter, Mountain State advised that it would require delivery of 195,000 tons during the third quarter. By letter dated April 30, 2009, Mountain State advised that it was nominating zero tons for the fourth quarter. Mountain State failed to accept not less than 95% of its annual requirements for the contract year of 2009. According to Central Energy, Mountain State acted by and through Severstal Wheeling and at the direction of the other Severstal entities. On Aug. 27, 2008, Mountain State sued Central Energy for breach of the Coal Supply Agreement in the Circuit Court of Brooke County, West Virginia. A month later, Mountain State joined Massey with a claim of tortious interference with contractual relations. After four years of discovery, trial is currently scheduled to commence on July 30, 2012. In the meantime, on April 29, 2009, Central Energy filed a declaratory judgment action against Mountain State and Severstal Wheeling in the United States District Court for the Southern District of West Virginia seeking a number of declaratory judgments, including that the Coal Supply Agreement required Mountain State to accept not less than 95% of the 1,128,000 tons of coal that it nominated for delivery in the contract year of 2009. In June 2009, Central Energy joined SNA Carbon, Severstal U.S., and Severstal Russia, and added claims for breach of contract and tortious misconduct. In July 2009, Mountain State and Severstal Wheeling moved to dismiss for lack of subject matter jurisdiction, particularly asserting a lack of diversity between Central Energy and Severstal Wheeling. In March 2010, the Southern District court agreed that there was no diversity between Central Energy, a West Virginia corporation, and Severstal Wheeling, a Delaware corporation with its principal place of business in Wheeling. Central Energy appealed and on April 13, 2011, the United States Court of Appeals for the Fourth Circuit reversed, finding that Severstal Wheeling had its principal place of business in Dearborn, Michigan, and thus that the Southern District court had diversity jurisdiction. Severstal U.S. subsequently sold Severstal Wheeling to RG Steel Wheeling, LLC. After RG Steel filed a Chapter 11 petition, Central Energy and Massey removed the Brooke County action to the District Court on June 13, 2012, pursuant to 28 U.S.C. Sections 1452(a) and 1334(b), asserting that this matter is a civil proceeding related to RG Steel's bankruptcy case. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. ROBERTS HOTELS: Fails to Win Retroactive Relief in Danna Hiring --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Missouri authorized Roberts Hotels Houston, L.L.C., et al., to employ A. Thomas Dewoskin and the law firm of Danna McKitrick, P.C. as counsel. The Court also ordered that the Debtors are authorized to pay for services rendered at 80% of monthly fees and 100% of costs and expenses. The Debtors deposited $43,860 with the firm as a deposit toward the payment of fees and expenses earned Additionally, the Court said that the application be denied in part as to the request that the relief be granted "retroactive" to April 19, 2012. The Court said that the nunc pro tunc relief is granted only in extraordinary circumstances, which do not exist in the Debtors' cases. To the best of the Debtors' knowledge, Mr. DeWoskin and the firm do not hold or represent any interests adverse to the Debtors or to the estates. About Roberts Hotels Hotel portfolios owned by St. Louis, Mo.-based Roberts Cos. have filed separate Chapter 11 bankruptcy petitions. The hotels are among those involved in a lawsuit Bank of America filed against Roberts Cos. in April 2012. BofA alleges Roberts Cos. defaulted on a loan to renovate six hotels it owns outside of Missouri and owes more than $34 million. The hotels are located in Tampa, Atlanta, Dallas, Houston, Shreveport, La., and Spartanburg, S.C. Roberts Hotels Dallas LLC, which operates as a Courtyard by Marriott at 2383 Stemmons Trail in Dallas, filed for Chapter 11 bankruptcy (Bankr. E.D. Mo. Case No. 12-45017) on May 23, 2012, listing $1 million to $10 million in assets, and $10 million to $50 million in debts. Roberts Hotels Atlanta LLC, dba Clarion Hotel Atlanta, filed for Chapter 11 (Bankr. E.D. Mo. Case No. 12-44493) on May 9, 2012, listing $1 million to $10 million in assets, and $10 million to $50 million in debts. Roberts Hotels Shreveport LLC, also under the Clarion flag, sought Chapter 11 bankruptcy protection (Bankr. E.D. Mo. Case No. 12- 44495) on May 9, listing between $1 million and $10 million in assets and between $10 million and $50 million in debts. Roberts Hotels Spartanburg LLC, which owns the Clarion Hotel, formerly named Radisson Hotel & Suites Spartanburg, filed a Chapter 11 petition (Bankr. E.D. Mo. Case No. 12-43756) on April 19, 2012. It scheduled $3,028,820 in assets and $34,775,209 in debts. Roberts Hotels Houston LLC, dba Holiday Inn Houston, filed for Chapter 11 (Bankr. E.D. Mo. Case No. 12-43590) on April 16, 2012, listing under $50,000 in assets and up to $50 million in debts. Roberts Hotels Tampa LLC, which owns the Comfort Inn hotel at 820 East Busch Blvd. in Tampa, filed for Chapter 11 Bankr. E.D. Mo. Case No. 12-44391) on May 7, estimating assets between $1 million and $10 million and debts between $10 million and $50 million. A. Thomas DeWoskin, Esq., at Danna McKitrick, PC, serves as the Debtors' counsel. The petitions were signed by Mike Kirtley, chief operating officer. On Dec. 15, 2011, Roberts Hotels Jackson LLC, which owns Roberts Walthall Hotel, filed for Chapter 11 protection (Bankr. S.D. Miss. Case No. 11-04341), estimating both assets and debts of between $1 million and $10 million. John D. Moore, P.A., represents the Debtor. The cases are jointly administered. ROBERTS HOTELS: Taps Robert N. Goldstein as Consultant ------------------------------------------------------ Roberts Hotels Houston, L.L.C., et al., ask the U.S. Bankruptcy Court for the Eastern District of Missouri for permission to employ Robert N. Goldstein and Hospitality Consultants Management Services, Inc., as consultant and advisor. Hospitality Consultants will review the assets, operational and management performance reviews, franchise status and compliance, valuation assessment, property condition and analysis, viability assessment, well as general consulting and support. Prior to filing of the application, a related Roberts Brothers entity provided a fee deposit of $5,000 to Hospitality Consultants and Hospitality Consultants has been providing services to the Debtors in the last month. The Debtors desire to pay Hospitality Consultants 80% of their monthly fees and 100% of their costs. To the best of the Debtors' knowledge, Hospitality Consultants is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Roberts Hotels Hotel portfolios owned by St. Louis, Mo.-based Roberts Cos. have filed separate Chapter 11 bankruptcy petitions. The hotels are among those involved in a lawsuit Bank of America filed against Roberts Cos. in April 2012. BofA alleges Roberts Cos. defaulted on a loan to renovate six hotels it owns outside of Missouri and owes more than $34 million. The hotels are located in Tampa, Atlanta, Dallas, Houston, Shreveport, La., and Spartanburg, S.C. Roberts Hotels Dallas LLC, which operates as a Courtyard by Marriott at 2383 Stemmons Trail in Dallas, filed for Chapter 11 bankruptcy (Bankr. E.D. Mo. Case No. 12-45017) on May 23, 2012, listing $1 million to $10 million in assets, and $10 million to $50 million in debts. Roberts Hotels Atlanta LLC, dba Clarion Hotel Atlanta, filed for Chapter 11 (Bankr. E.D. Mo. Case No. 12-44493) on May 9, 2012, listing $1 million to $10 million in assets, and $10 million to $50 million in debts. Roberts Hotels Shreveport LLC, also under the Clarion flag, sought Chapter 11 bankruptcy protection (Bankr. E.D. Mo. Case No. 12- 44495) on May 9, listing between $1 million and $10 million in assets and between $10 million and $50 million in debts. Roberts Hotels Spartanburg LLC, which owns the Clarion Hotel, formerly named Radisson Hotel & Suites Spartanburg, filed a Chapter 11 petition (Bankr. E.D. Mo. Case No. 12-43756) on April 19, 2012. It scheduled $3,028,820 in assets and $34,775,209 in debts. Roberts Hotels Houston LLC, dba Holiday Inn Houston, filed for Chapter 11 (Bankr. E.D. Mo. Case No. 12-43590) on April 16, 2012, listing under $50,000 in assets and up to $50 million in debts. Roberts Hotels Tampa LLC, which owns the Comfort Inn hotel at 820 East Busch Blvd. in Tampa, filed for Chapter 11 Bankr. E.D. Mo. Case No. 12-44391) on May 7, estimating assets between $1 million and $10 million and debts between $10 million and $50 million. A. Thomas DeWoskin, Esq., at Danna McKitrick, PC, serves as the Debtors' counsel. The petitions were signed by Mike Kirtley, chief operating officer. On Dec. 15, 2011, Roberts Hotels Jackson LLC, which owns Roberts Walthall Hotel, filed for Chapter 11 protection (Bankr. S.D. Miss. Case No. 11-04341), estimating both assets and debts of between $1 million and $10 million. John D. Moore, P.A., represents the Debtor. The cases are jointly administered. ROBERTS HOTELS: Taps William Sessions, III, as Litigation Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Missouri authorized Roberts Hotels Houston, L.L.C., et al., to employ William C. Sessions, III, of counsel of Heaton & Moore., P.C., as special litigation counsel to assist and advise the Debtors with respect to litigation and potential litigation matters. Mr. Sessions will, among other things: -- handle all aspects of all claims, including breach of contract, employment matters, taxes, and insurance claims, both for and against the Debtors; -- provide consultation services on leases, contracts, insurance issues, vendor issues and other matters which could involve litigation. The hourly rate of Mr. Sessions is $185, and his partners and associates are billed at the same rate. The Debtors desire to pay Mr. Sessions 80% of his monthly fees and 100% of his costs. To the best of the Debtors' knowledge, Mr. Sessions does not represent any interest adverse to any of the six hotel entities and has no connection with the U.S. Trustee for the region or her employees. About Roberts Hotels Hotel portfolios owned by St. Louis, Mo.-based Roberts Cos. have filed separate Chapter 11 bankruptcy petitions. The hotels are among those involved in a lawsuit Bank of America filed against Roberts Cos. in April 2012. BofA alleges Roberts Cos. defaulted on a loan to renovate six hotels it owns outside of Missouri and owes more than $34 million. The hotels are located in Tampa, Atlanta, Dallas, Houston, Shreveport, La., and Spartanburg, S.C. Roberts Hotels Dallas LLC, which operates as a Courtyard by Marriott at 2383 Stemmons Trail in Dallas, filed for Chapter 11 bankruptcy (Bankr. E.D. Mo. Case No. 12-45017) on May 23, 2012, listing $1 million to $10 million in assets, and $10 million to $50 million in debts. Roberts Hotels Atlanta LLC, dba Clarion Hotel Atlanta, filed for Chapter 11 (Bankr. E.D. Mo. Case No. 12-44493) on May 9, 2012, listing $1 million to $10 million in assets, and $10 million to $50 million in debts. Roberts Hotels Shreveport LLC, also under the Clarion flag, sought Chapter 11 bankruptcy protection (Bankr. E.D. Mo. Case No. 12- 44495) on May 9, listing between $1 million and $10 million in assets and between $10 million and $50 million in debts. Roberts Hotels Spartanburg LLC, which owns the Clarion Hotel, formerly named Radisson Hotel & Suites Spartanburg, filed a Chapter 11 petition (Bankr. E.D. Mo. Case No. 12-43756) on April 19, 2012. It scheduled $3,028,820 in assets and $34,775,209 in debts. Roberts Hotels Houston LLC, dba Holiday Inn Houston, filed for Chapter 11 (Bankr. E.D. Mo. Case No. 12-43590) on April 16, 2012, listing under $50,000 in assets and up to $50 million in debts. Roberts Hotels Tampa LLC, which owns the Comfort Inn hotel at 820 East Busch Blvd. in Tampa, filed for Chapter 11 Bankr. E.D. Mo. Case No. 12-44391) on May 7, estimating assets between $1 million and $10 million and debts between $10 million and $50 million. A. Thomas DeWoskin, Esq., at Danna McKitrick, PC, serves as the Debtors' counsel. The petitions were signed by Mike Kirtley, chief operating officer. On Dec. 15, 2011, Roberts Hotels Jackson LLC, which owns Roberts Walthall Hotel, filed for Chapter 11 protection (Bankr. S.D. Miss. Case No. 11-04341), estimating both assets and debts of between $1 million and $10 million. John D. Moore, P.A., represents the Debtor. The cases are jointly administered. ROOMSTORE INC: Liquidators Guarantee 59% of Inventory Cost ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that RoomStore Inc. was given authority by the bankruptcy judge to hire liquidators to run going-out-of-business sales at the remaining 29 stores. The liquidators will pay expenses of the sales while guaranteeing RoomStore a recovery of 59% of the cost of merchandises. In addition, the liquidators will pay $275,000 in cash. The GOB sales will be conducted by a joint venture between Hilco Merchant Resources LLC and three other liquidators. The report notes that RoomStore previously said that the final liquidation should generate enough cash to pay secured and unsecured creditors in full. The company filed a reorganization plan to preserve the company's corporate existence and stockholders' interests along with the ability to utilize tax losses and thus offset gains from the sale of assets. Immediately after bankruptcy, RoomStore hired liquidators and conducted going-out-of-business sales at 18 locations. Later, 10 stores in Texas were liquidated. The company itself closed seven others. 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 on Sept. 10, 2008 (Bankr. D. Md. Case Nos. 08-21642 and 08-21644). 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. ROTECH HEALTHCARE: Five Directors Elected at Annual Meeting ----------------------------------------------------------- Rotech Healthcare Inc.'s annual meeting of shareholders was held on June 26, 2012. The shareholders elected Arthur J. Reimers, Philip L. Carter, James H. Bloem, Nathaniel A. Gregory and Edward L. Kuntz to the Board of Directors. The shareholders also ratified the appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm. 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. 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. * * * As reported by the TCR on May 25, 2012, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and related issue-level ratings on the company. "The ratings reflect Rotech's 'highly leveraged' financial risk profile, including its negative cash flow and overall sensitivity of credit metrics to the uncertain reimbursement environment. Rotech's 'weak' business risk profile primarily reflects its narrow operating focus and exposure to continued Medicare reimbursement reductions for its products and services, particularly for its nebulizer medication," S&P said. In the Jan. 13, 2012, edition of the TCR, 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. SBA COMMUNICATIONS: S&P Affirms 'B+' CCR on TowerCo Acquisition --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on SBA Communications Corp. and its related subsidiaries. The outlook is stable. "We also affirmed all other ratings on the company, including our 'BB' issue-level rating on the secured credit facilities at subsidiary SBA Senior Finance II LLC and our 'B+' issue-level rating on unsecured debt issued by SBA Telecommunications Inc.," S&P said "The ratings on TowerCo II Holdings LLC, including our 'B' corporate credit rating, remain unchanged, and will be withdrawn when this transaction is completed, since borrowings under their credit facilities will be repaid at time of close and subsequently cancelled," S&P said. "The affirmation reflects our belief that SBA's acquisition of TowerCo's wireless towers will result in higher leverage than we had previously expected, but that the combined company's solid cash flow generation will enable leverage to decline in 2013 to a level we consider appropriate for the rating," said Standard & Poor's credit analyst Catherine Cosentino. "The stable outlook incorporates the view that the company's leverage will remain high; debt to EBITDA, pro forma for Mobilitie and TowerCo, is expected to total around 9x for 2012 and is likely to improve only moderately to around 8.5x by year-end 2013, given SBA's targeted net debt leverage of 7.0x to 7.5x, before our adjustments," S&P said. "Conversely, a downgrade could occur if leverage rises to the 10x area. We believe this could occur if the company's financial policy became materially more aggressive -- for example, if it adopted a share repurchase program or paid a special dividend exceeding around $1.3 billion, and funded these actions with additional debt. Likewise, if the company increased leverage above the 10x area to acquire or build additional towers that lacked anchor tenants or had much lower cash flow margins than their current tower base, this, too, could prompt a downgrade," S&P said. "Alternatively, while we believe that the company has good prospects to obtain external funding for its significant near-term cash needs, given its less than adequate liquidity assessment, if it does not obtain funding in a timely manner to meet such cash requirements, we could lower the ratings," S&P said. SEQUENOM INC: Names Carolyn Beaver as Vice President and CAO ------------------------------------------------------------ Carolyn Beaver was appointed as Sequenom, Inc.'s Vice President and Chief Accounting Officer. Prior to joining the Company, Ms. Beaver, age 54, served in various roles at Beckman Coulter, Inc., a global biomedical testing manufacturer, since August 2005, including Corporate Vice President, Controller and Chief Accounting Officer. Since its acquisition by Danaher Corp. in June 2011, Ms. Beaver has continued to serve at Beckman Coulter, Inc., as the Corporate Vice President, Controller. From 1987 until 2002, Ms. Beaver was a partner with KPMG LLP. Ms. Beaver also currently serves as a director of Commerce National Bank, a position she has held since 2005. Ms. Beaver holds a B.S. in Accounting from California State Polytechnic University, Pomona. In connection with her employment Ms. Beaver will receive a base salary of $320,000 per year and will be eligible for an annual cash bonus of up to 35% of her base salary. Ms. Beaver has been granted an initial stock option to purchase 100,000 shares of the Company's common stock, one-fourth of which will vest on the one year anniversary of Ms. Beaver's start date and the remaining portion of which will vest in equal monthly installments over the following three year period. Ms. Beaver was added to the Company's Change in Control Severance Benefit Plan. In connection with her relocation to San Diego, Ms. Beaver will also receive $50,000 for commuting and temporary living expenses. Ms. Beaver will also receive other benefits generally provided to the Company's employees. About Sequenom Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. The Company reported a net loss of $74.15 million in 2011, a net loss of $120.84 million in 2010, and a net loss of $71.01 million in 2009. The Company's balance sheet at March 31, 2012, showed $171.88 million in total assets, $43.31 million in total liabilities, and $128.56 million in total stockholders' equity. SHERIDAN REHABILLITATIVE: Voluntary Chapter 11 Case Summary ----------------------------------------------------------- Debtor: Sheridan Rehabillitative & Wellness Center, Inc. 7911 Rocton Avenue Chevy Chase, MD 20815 Bankruptcy Case No.: 12-21879 Chapter 11 Petition Date: June 25, 2012 Court: U.S. Bankruptcy Court District of Maryland (Greenbelt) Judge: Paul Mannes Debtor's Counsel: Theodore N. Nkwenti, Esq. LAW OFFICES OF THEODORE NKWENTI, LLC 11249-B Lockwood Drive Silver Spring, MD 20901 Tel: (301) 681 0361 E-mail: bklawcenter@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by Jacquelyn L. Wheeler, chief operating officer. SHRI SHIV: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Shri Shiv, Inc. dba Comfort Inn 130 Montrose West Akron, OH 44321 Bankruptcy Case No.: 12-52064 Chapter 11 Petition Date: June 24, 2012 Court: U.S. Bankruptcy Court Northern District of Ohio (Akron) Judge: Marilyn Shea-Stonum Debtor's Counsel: Kenneth A. Blech, Esq. KENNETH A. BLECH CO LPA 10850 Pearl Road, #D3 Strongsville, OH 44136-3305 Tel: (440) 238-7887 Fax: (440) 238-9532 E-mail: kenblech@ameritech.net Scheduled Assets: $1,397,722 Scheduled Liabilities: $3,781,654 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ohnb12-52064.pdf The petition was signed by Kuldip Mahajan, president. SKINNY NUTRITIONAL: Issues 30 Million Shares to Ironridge --------------------------------------------------------- Skinny Nutritional Corp. and Ironridge Global IV, Ltd., entered into an amendment of their agreement, which was entered into on June 7, 2012. The Amendment and underlying agreement concerned the Order for Approval of Stipulation for Settlement of Claims between the Company and Ironridge that was entered into on Jan. 23, 2012, and approved by the Superior Court of the State of California, County of Los Angeles, Central District. The parties agreed to fully resolve the Company's future obligations under the Stipulation by providing for the issuance by the Company to Ironridge of 30,000,000 shares of common stock of the Company pursuant to the Stipulation. The Amendment provides that upon satisfaction of this requirement, the terms of the prior agreement, including the mutual general release of claims, are confirmed and ratified in all respects. On June 22, 2012, the Company issued the 30,000,000 shares of common stock to Ironridge pursuant to the Amendment in the manner and time frame contemplated thereby. Jan. 27, 2012, the Company filed a current report on Form 8-K reporting that it had issued an aggregate of 65,100,000 shares of the Company's common stock, par value $0.001 per share, to Ironridge, in settlement of $1,255,231 in bona fide accounts payable of the Company. As previously reported, the Initial Shares were issued pursuant to the Stipulation. In addition, as previously reported, the Stipulation provides that for every ten million shares of the Company's common stock that trade during the a defined calculation period, or if at any time during that period a daily VWAP is below 80% of the closing price on the day before the issuance date, the Company will immediately issue additional shares, subject to a 9.99% beneficial ownership limitation specified in the Stipulation. Pursuant to the adjustment mechanism specified in the Stipulation, on April 17, 2012, May 31, 2012, and June 8, 2012, the Company issued to Ironridge 46,000,000, 21,000,000 and 20,000,000 shares of common stock, respectively. A copy of the amendment is available for free at: http://is.gd/VLp3a5 About Skinny Nutritional Bala Cynwyd, Pa.-based Skinny Nutritional Corp. (OTC BB: SKNY.OB) -- http://www.SkinnyWater.com/-- has developed and is marketing a line of enhanced waters, all branded with the name "Skinny Water" that are marketed and distributed primarily to calorie and weight conscious consumers. The Company reported a net loss of $7.66 million in 2011, compared with a net loss of $6.91 million in 2010. The Company's balance sheet at March 31, 2012, showed $2.15 million in total assets, $4.62 million in total liabilities, all current, and a $2.47 million stockholders' deficit. In its audit report for the 2011 financial statements, Marcum LLP, in Bala Cynwyd, Pennsylvania, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company had a working capital deficiency of $3.17 million, an accumulated deficit of $45,492,945, stockholders' deficit of $1.74 million and no cash on hand. The Company had net losses of $7.67 million and $6.91 million for the years ended Dec. 31, 2011, and 2010, respectively. Additionally, the Company is currently in arrears under its obligation for the purchase of trademarks. Under the agreement, the seller of the trademarks may choose to exercise their legal rights against the Company's assets, which includes the trademarks. SOMMERSET PROPERTIES: Lenders Want to Foreclose on Property ----------------------------------------------------------- Secured lenders CSFB 2001-CP4 Falls of Neuse, LLC and CSFB 2001- CP4 Bland Road, LLC, ask the U.S. Bankruptcy Court for the Eastern District of North Carolina for relief from automatic stay in the Chapter 11 case Somerset Properties SPE, LLC. The lenders, through their special servicer, LNR Partners, LLC, request for the relief to exercise their state law remedies for the Debtor's default under the parties' loan documents, including foreclosure. The current net amount of lenders' claims, after applying all adequate protection payments received, is approximately $29,277,000. The value of the collateral securing the lenders' claims is approximately $26,348,000. According to the lenders, the Debtor does not have equity in the property -- three office buildings located at 4405-4415 Falls of Neuse Road, Raleigh, North Carolina and 4401-4407 Bland Road, Raleigh, North Carolina. The lenders note that they have also voted against the confirmation of Plan. About Somerset Properties Raleigh, North Carolina-based Somerset Properties SPE, LLC, owns six office buildings in Raleigh, North Carolina. The Company filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.C. Case No. 10-09210) on Nov. 8, 2010. William P. Janvier, Esq., at Janvier Law Firm, PLLC, in Raleigh, N.C., represents the Debtor as bankruptcy counsel. The law firm of Blanchard, Miller, Lewis & Isley, P.A., in Raleigh, N.C., is the Debtor's special counsel. The Company disclosed $36.50 million in assets and $28.83 million in liabilities as of the Chapter 11 filing. SOTERA DEFENSE: S&P Keeps 'B' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on McLean, Va.-based Sotera Defense Solutions Inc. to stable from positive. All ratings on the company and its debt issues, including the 'B' corporate credit rating, remain unchanged. "We revised our rating outlook to stable from positive due to lower-than-expected revenue performance at Sotera's Force Mobility & Modernization Systems (FMMS) segment, and our expectations for adjusted leverage remaining in the low-5x area, pro forma for the recent acquisitions, over the near term," explained Standard & Poor's credit analyst David Tsui. "The rating on Sotera reflects the company's small market position as a government contractor in a highly competitive industry, the uncertainty related to volume and timing of future orders in its FMMS business segment, and its limited operating track record at its current size. Standard & Poor's expects that the company's defensible position in building expeditionary base camp systems and its newly acquired capabilities in the areas of intelligence and cyber-security and data analytics will result in consistent profitability, which partly offsets these factors," S&P said. "The outlook is stable, reflecting our expectations for strong revenue and EBITDA growth in the TIS business to offset near-term declining revenue trends at the company's FMMS business. We could raise the rating to 'B+' if Sotera can sustain its double-digit growth rate in its TIS business, while maintaining or improving its EBITDA margin, and achieve a sustained leverage below the 5x area," S&P said. "We could consider a lower rating if Sotera's TIS segment business growth slows, signaling significant government budgetary pressure, a notable decline in the company's EBITDA margin to below 10% as a result of competitive pressure, or a debt-financed acquisitions, leading to leverage above 6.5x," S&P said. SOUPMAN INC: Says SKI Claims "Baseless"; Parties in Mediation ------------------------------------------------------------- Soupman, Inc., provided updates regarding certain ongoing litigation involving a bankrupt entity known as Soup Kitchen International, Inc. The Original Soupman, Inc., the Company's subsidiary that purchased SKI's assets in December 2009, is defending itself in bankruptcy court against what the Company considers to be a baseless charge that the Company underpaid for SKI's assets. SKI had lost $20MM under its previous management since its inception and was, in fact, independently valued at a negative net worth of $5.6MM at the time of the sale of the assets to TOSI. Because The Original Soupman, Inc., believed that a new business plan could successfully bring Al Yeganeh's soups to market nationally, it has paid approximately $4.2MM for SKI's assets, including cash at closing, guarantee of $3.67MM debt and Al Yeganeh's royalty payments. This year the Company hired BDO Valuation Advisors, a nationally recognized valuation authority, to provide a second opinion of the value of SKI at the time of the 12/09 transaction. On May 14th, BDO Valuation Advisors issued its Report, which held that SKI had zero value at the time of the sale of its assets in December 2009 to The Original Soupman, Inc. The Company is currently involved in a court-ordered mediation to resolve the bankruptcy claims, and the Company fully expect to prevail on any claim that the Company did not pay fair value for these assets. Robert Bertrand, the Company's President stated, "Because this bankruptcy litigation is about the fair value of SKI at the time of sale, using language that has often been applied to the Seinfeld show, we believe this lawsuit is all about nothing - in other words ? all about SKI's zero value at the time of the sale, as recently confirmed by BDO Valuation Advisors." About Soupman Inc. Staten Island, New York-based Soupman, Inc., currently manufactures and sells soup to grocery chains and other outlets and to its franchised restaurants under the brand name "The Original Soupman". The Company's balance sheet at Feb. 29, 2012, showed $1.30 million in total assets, $7.18 million in total liabilities, and a stockholders' deficit of $5.88 million. Berman & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about Soupman's ability to continue as a going concern, following the Company's results for the fiscal year ended Aug. 31, 2011. The independent auditors noted that the Company has a net loss of $6.21 million and net cash used in operations of $2.11 million for the year ended Aug. 31, 2011; and has a working capital deficit of $5.47 million, and a stockholders' deficit of $4.68 million at Aug. 31, 2011. SOUTHERN PRODUCTS: Faces Lawsuit Over Televisions Disposition ------------------------------------------------------------- Southern Products, Inc., has been added as a named defendant in a lawsuit filed by Zhuhai Yuehua Electronic Co. in the Superior Court of California for the County of Los Angeles. The suit centers on a dispute regarding amounts alleged to be due to Zhuhai upon disposition of certain televisions. Although the suit has been pending against other defendants since Nov. 22, 2011, the Company was added as a party on June 13, 2012, when Zhuhai filed a First Amended Complaint. The Company has not been served with the First Amended Complaint. On June 21, 2012, the Court entered a Temporary Restraining Order which, inter alia, bars certain defendants, including the Company, from disposing of the televisions which are the subject of the suit or from releasing any customer payments received upon distribution of those televisions. About Southern Products City of Industry, Calif.-based Southern Products, Inc., is in the business of designing, assembling and marketing consumer electronics products, primarily flat screen high-definition televisions using LCD and LED technologies. Through Nov. 30, 2011, the Company has six LCD and LED widescreen televisions on the market. The Company reported a net loss of $1.47 million for the year ended Feb. 29, 2012, compared with a net loss of $47,966 for the year ended Feb. 28, 2011. The Company's balance sheet at Feb. 29, 2012, showed $2.08 million in total assets, $3.58 million in total liabilities and a $1.50 million total shareholders' deficit. Silberstein Ungar, PLLC, in Bingham Farms, Michigan, issued a "going concern" qualification on the consolidated financial statements for the year ended Feb. 29, 2012, citing negative working capital and losses from operations which factors raise substantial doubt about the Company's ability to continue as a going concern. SPARKS, NV: Moody's Affirms 'B2' Rating on Salex Tax Bonds ---------------------------------------------------------- Moody's Investors Service has affirmed the B2 rating on the City of Sparks, Nevada's Tourism Improvement District No. 1 (Legends at Sparks Marina) Senior Sales Tax Anticipation Revenue Bonds, Series A (the senior STAR bonds); the rating outlook has been revised to stable from negative. The bonds were issued in June 2008 as fixed- rate obligations and are secured by a net 5.0476% sales tax to be collected within the 147.7 acre district, which encompasses a retail shopping and entertainment project adjacent to Interstate 80 in the City of Sparks, Nevada (not rated). The bonds are currently outstanding in the amount of $79.665 million. Ratings Rationale Affirmation of the B2 rating reflects Moody's view that the region's lackluster economic recovery combined with still weak but improving project performance will result in sales tax collections that are sufficient to meet scheduled debt service requirements over the near-term. However, over the medium- to longer-term, sales tax collections are projected to be insufficient to keep pace with escalating debt service requirements. Further, according to Moody's assumptions and calculations, the Reserve Fund will become depleted and the bonds are expected to default on June 15, 2024, with an estimated 84% recovery rate thereafter (relative to remaining par) through final maturity in 2028. The presence of a liquid Reserve Fund, which is currently invested by the city with other overnight funds, is expected to provide the supplemental cash needed to pay debt service as scheduled until the projected default date of June 15, 2024. It is noted that the pledged sales taxes are subject to potential statutory impairment and the authorization to collect the taxes sunsets in 2028, leaving few debt restructuring options. The stable outlook reflects Moody's expectation that collections will be sufficient to cover debt service requirements over the near-term, especially in light of the recent opening of a Lowe's store in the district. However, an uncertain economic recovery will continue to be a drag on otherwise improving project performance over the near-term; accordingly, sales tax growth will be challenged to overcome the combination of already weak debt service coverage and escalating debt service requirements over the longer-term. Debt service coverage is projected at only 0.98 times in 2012, and a stronger 1.05 times in 2013, while scheduled debt service escalates by approximately 2.5% annually through final maturity. These projections include the recent addition of a Lowe's store, which opened in February 2012. Moody's notes that senior lien debt service was paid in full as scheduled on June 15, 2012 with the assistance of a $27,891 draw on the $7.96 million Reserve Fund, thereby reducing the Reserve Fund balance to approximately $7.93 million. A draw on the Reserve Fund does not constitute a technical default under the senior STAR bond indenture. Replenishment of the Reserve Fund is made from the first available sales taxes received after the draw, which would otherwise have accrued to the Bond Fund for the next scheduled debt service payment. In the near-term, key rating factors will include Moody's assessment of regional economic indicators, the performance of the retail project itself and, ultimately, the influence that these factors have on the trend of monthly sales tax collections and the magnitude of additional draws on the Reserve Fund. The recent opening of a Lowe's store in February 2012 is expected to have a significant positive impact on tax collections. Longer-term rating factors will include the timing and strength of Reno's economic recovery and the project's ability to retain existing tenants and secure additional commitments from project participants. All of these factors will be important contributors to Moody's assessment of future sales tax collections, the likelihood and timing of default, and the recovery rate to bondholders should default occur. Strengths: - Attractive retail project which is well located along Interstate 80 in Sparks - Some recent improvement in sales tax collections bolstered by the February 2012 opening of a Lowe's store Challenges: - Project is only partially completed with uncertain prospects for future phases in the near-term - Sales tax collections are not projected to keep pace with growing debt service requirements, resulting in projected default on June 15, 2024 - Uncertain economic recovery projected for the region What Could Change The Rating (Outlook) Up - A sustained trend of higher tax collections that produces coverage at or above the 1.0x - Further project expansion, including delivery of additional Phase II projects What Could Change The Rating (Outlook) Down - Depletion of the Reserve Fund at a rate faster than currently estimated - Lackluster sales tax performance, especially in the near-term - Longer-term adverse changes in the project's tenant mix Outlook The stable outlook reflects Moody's expectation that collections will be sufficient to cover debt service requirements over the near-term, especially in light of the recent opening of a Lowe's store in the district. However an uncertain economic recovery will continue to be a drag on otherwise improving project performance over the near-term; accordingly, sales tax growth will be challenged to overcome the combination of already weak debt service coverage and escalating debt service requirements. In the near-term, key rating factors will include Moody's assessment of regional economic indicators, the performance of the retail project itself and, ultimately, the influence that these factors have on the trend of monthly sales tax collections and the magnitude of additional draws on the Reserve Fund. Longer-term rating factors will include the timing and strength of Reno's economic recovery and the project's ability to retain existing tenants and secure additional commitments from project participants. All of these factors will be important contributors to Moody's assessment of future sales tax collections, the likelihood and timing of default, and the recovery rate to bondholders should default occur. The principal methodology used in this rating was US Public Finance Special Tax Methodology published in March 2012. Cl. H, Downgraded to Caa1 (sf); previously on Feb 16, 2011 Downgraded to B3 (sf) SPECIALTY PRODUCTS: Asbestos Claimants Tap Motley Rice as Counsel ----------------------------------------------------------------- The Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases of Specialty Products Holding Corp., et al., asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain Motley Rice LLC, Waters & Kraus LLP as Simon Greenstone Panatier Bartlett, PC as special litigation counsel for any medical science issues arising in connection with an estimation hearing. As special counsel, Motley Rice, et al., will, among other things, respond to and rebut the technical and scientific aspects of the Debtors' approach to estimation, as their contentions regarding the amount of asbestos released by their products, the differences among asbestos fiber types with respect to the propensity to cause mesothelioma, the type and extent of fiber exposures needed to cause mesothelioma. To date, Motley Rice has been paid the sum of $3,078 for reimbursement of expenses for round trip travel expenses incurred. Motly Rice has also been retained by the Committee as special conflicts counsel but has not been paid any sums to date for that representation. To date, Waters & Kraus has been paid the sum of $792 in June 2011 for reimbursement for expenses incurred as a consultant on estimation issues. Simon Green has not been paid any consulting fees. To the best of the Committee's knowledge, Motley Rice is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Committee set a July 16, hearing at 9:30 a.m. on the relief requested. Objections, if any, are due July 5, at 4 p.m. 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 on May 31, 2010 (Bankr. D. Del. Case No. 10-11780). 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. The Company estimated its assets and debts at $100,000,001 to $500,000,000. The Company's affiliate, Bondex International, Inc., filed a separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779), estimating its assets and debts at $100,000,001 to $500,000,000. 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 on May 31, 2010 (Bankr. D. Del. Case No. 10-11780). 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. The Company estimated its assets and debts at $100,000,001 to $500,000,000. The Company's affiliate, Bondex International, Inc., filed a separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779), estimating its assets and debts at $100,000,001 to $500,000,000. SPECTRUM BRANDS: S&P Affirms 'B' Corp. Credit Rating; Outlook Pos ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Madison, Wis.-based Spectrum Brands Inc. and revised the outlook to positive from stable. "At the same time, we affirmed the 'B' issue-level rating on the company's term loan due 2016 and $950 million senior secured notes due 2018. The recovery rating is '3', indicating out expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. We also affirmed the 'B-' (one notch below the corporate credit rating) issue-level rating on the company's $300 million senior unsecured notes due 2020. The recovery rating is '5', indicating our expectation of modest (10% to 30%) recovery for note holders in the event of a payment default. In addition, we affirmed the 'CCC+' issue-level rating on the company's senior subordinated notes due 2019. The recovery rating is '6', indicating our expectation of negligible (0% to 10%) recovery for note holders in the event of a payment default," S&P said. "The ratings action reflects Spectrum Brands stronger liquidity following the recent amendment to its 2016 term loan, combined with better credit metrics thanks to increased profitability and debt paydown," said Standard & Poor's credit analyst Brian Milligan. "The amendment significantly increased EBITDA cushion, and we believe Spectrum's profit growth and debt reduction can continue, even in a low-growth economy." "The ratings on Spectrum Brands reflect Standard & Poor's view that the company will continue to have a 'weak' business risk profile and a 'highly leveraged' financial risk profile. We believe the company's businesses will remain highly competitive, and its input costs will remain volatile. The strong negotiating power of the company's concentrated retailer customer base heightens these risks. The company benefits from its ongoing value-priced product offerings, diverse product lines, and geographic diversification. Our view of the company's financial risk profile is based on its aggressive financial policy, leveraged capital structure, and adequate liquidity," S&P said. "We would consider an upgrade if positive performance trends continue and it becomes clear that financial ratios will improve to, and be sustained at, levels consistent with or stronger than ratios indicative of an 'aggressive' financial risk profile. This includes total debt to EBITDA in the mid-3x area and funds from operations to total debt in the mid-teens percent area. We would also expect the company to sustain covenant cushion above 15% while maintaining good cash flow generation. Based on fiscal 2012 second-quarter results, EBITDA would have to increase by about 15% or $275 million or debt would have to be repaid for leverage to reach the mid-3x area," S&P said. "We could revise the outlook to stable if the company borrows additional funding to finance acquisitions, causing financial ratios to remain at current levels," S&P said. STAFFORD RHODES: South Carolina and Georgia Malls in Chapter 11 --------------------------------------------------------------- Tifton, Georgia-based Stafford Rhodes, LLC, along with three affiliates, sought Chapter 11 protection (Bankr. M.D. Ga. Lead Case No. 12-70859) on June 29, 2012. Rhodes own 27.41 acres of land located in Bluffton, Beaufort County, South Carolina. The land is improved by a 95,233 square foot retail shopping center that has 16 tenants, including Best Buy Stores, Petco, and Dollar Tree. Affiliate Beaufort Crossing, LLC, owns 10 acres of land, improved by an unanchored 19,600 square foot shopping center, the Crossings of Beaufort, in Beaufort County. Stafford Vista owns 5.69 acres of land located in Decatur, DeKalb County, Georgia, which is improved by a 45,450 square foot shopping center identified as the Vista Grove Plaza. Stafford Wesley, LLC, has 2.34 acres of land in Decatur, improved by a 30,683 square foot shopping center identified as the Wesley Chappel Retail Shopping Center. Regions Bank issued loans, secured by assets of the Debtors. The loans, which matured May 5, 2012, have been assigned to Wells Fargo Bank. Amounts owed under the secured loans are: Debtor Amount Outstanding ------ ------------------ Rhodes $18.810 million Beaufort $2.815 million Vista $3.950 million Wesley $27.000 million Frank J. Jones, the CFO, relates that the Debtors engaged in negotiations with Hudson Americas LLC, as attorney in fact for Wells Fargo, in order to refinance and/or restructure the loan. However, the attempts were unsuccessful. Hudson instead on June 14, 2012 filed suit against the Debtors (D. S.C. Case No. 9:12-cv- 1616-SB), seeking judicial foreclosure of the Debtors' properties. The Debtors intend to continue operations while in Chapter 11. The Debtors said their overall economic condition has been stable or gradually improving since 2012. Physical occupancy was 81% to 100% at the shopping centers. Rental income jumped to $2.847 million in 2011. On the petition date, the Debtors filed motions seeking to maintain their cash management system, extend the deadline to file schedules and other financial information until Aug. 13, 2012, use cash collateral, and bar utilities from discontinuing service (estimated cost $9,270 per month). A hearing on the first day motions is scheduled for July 3, 2012 at 10:00 a.m. before Judge John T. Laney III. The Debtors also filed applications to employ Arnall Golden Gregory LLP as counsel and Akin Webster & Matson PC as conflicts counsel. STOCKTON, CA: Files for Chapter 9 Bankruptcy -------------------------------------------- Stockton, California, is now the largest city to seek bankruptcy protection in U.S. history. Stockton filed a Chapter 9 petition (Bankr. E.D. Calif. Case No. 12-32118) in Sacramento on Thursday, estimating more than $1 billion in assets and in excess of $500 million in liabilities. "We are extremely disappointed that we have been unable to avoid bankruptcy," Mayor Ann Johnston said in a statement. "This is what we must do to get our fiscal house in order and protect the safety and welfare of our citizens. We will emerge from bankruptcy with a solid financial future." In addition to the bankruptcy petition, the city said it will file a motion to request permission to share information from the confidential mediation process. "This is not to diminish the service and contributions of our employees and retirees," said City Manager Bob Deis. "Our General Fund resources are depleted, and we cannot allow the City to spiral into uncontrolled default. Bankruptcy stops a barrage of lawsuits and allows the City breathing room while working toward a Plan of Adjustment and moving Stockton forward." The city was forced to file for bankruptcy after talks with bondholders and labor unions failed. A river port about 80 miles (130 kilometers) east of San Francisco, Stockton ran out of options after three months of negotiations with creditors ended June 25 without enough concessions to close a $26 million deficit, Bloomberg News said. State-mandated talks with creditors began February. The city council before the filing adopted a budget and operational plan calling for defaulting on $10.2 million in debt payments and reducing $11.2 million in employee pay and benefits under union contracts. To qualify for Chapter 9, the city says it is insolvent within the meaning of 11 U.S.C. Sec 101(32)(C) and its desires to effect a plan to adjust its debts. The city has (a) negotiated in good faith with creditors holding at least a majority in amount of claims of each class that the city indents to impair under a plan in its Chapter 9 case; or alternatively, (b) is unable to negotiate with creditors because such negotiation is impractible. The city, with a population of about 300,000, identified the California Public Employees Retirement System as the largest unsecured creditor with a claim of $147.5 million for unfunded pension costs. In second place is Wells Fargo Bank NA as trustee for $124.3 million in pension obligation bonds. The list of largest creditors includes $119.2 million owing on four other series of bonds. Reuters' Hilary Russ says Stockton's bankruptcy could create a new template for struggling cities. She says that, according to legal experts, if the city can reach consensus with creditors and craft a plan to exit bankruptcy quickly others may follow suit. The city is being represented in bankruptcy court by Orrick, Herrington & Sutcliffe LLP, a San Francisco-based law firm with five offices in California, including Sacramento. STOCKTON, CA: S&P Lowers Issuer Credit Rating From 'SD' to 'D' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its issuer credit rating (ICR) to 'D' from 'SD' (selective default) on Stockton, Calif. The outlook is not meaningful. "In addition, Standard & Poor's lowered its issue ratings to 'C' from 'CC' on the city's pension obligation bonds, lease revenue bonds, and certificates of participation (COPs), some of which were issued by the Stockton Public Financing Authority and the Stockton Redevelopment Agency. The outlook on these ratings is negative," S&P said. "The 'D' ICR reflects our view of the city's planned nonpayment of substantially all of its obligations as they come due," said Standard & Poor's credit analyst Chris Morgan. "Additionally, we understand the city plans to file for bankruptcy protection under Chapter 9 of the U.S. Bankruptcy Code," Mr. Morgan added. "The negative outlook on the city's lease revenue bond and COP rating reflects our view that we could further lower the rating in the next year as debt service reserves, sureties, and restricted funds (which are currently paying bondholders or pending payment to same in the absence of appropriated general funds) are exhausted and/or otherwise not paid to bondholders in bankruptcy. The negative outlook on the pension obligation bond rating reflects our understanding of the city's planned non-payment of debt service in September and the lack of other enhancements," S&P said. SUCCESS SYSTEMS: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Success Systems, LLC 1400 Millcoe Road Jacksonville, FL 32225 Bankruptcy Case No.: 12-04233 Chapter 11 Petition Date: June 27, 2012 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Judge: Jerry A. Funk Debtor's Counsel: Taylor J. King, Esq. Bryan K. Mickler, Esq. LAW OFFICES OF MICKLER & MICKLER 5452 Arlington Expressway Jacksonville, FL 32211 Tel: (904) 725-0822 Fax: (904) 725-0855 E-mail: court@planlaw.com Scheduled Assets: $1,855,569 Scheduled Liabilities: $4,568,212 A copy of the Company's list of its nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb12-04233.pdf The petition was signed by William G. Clark, II, managing member. SWIFT AIR: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Swift Air, LLC 2406 South 24th Street, Suite E-102 Phoenix, AZ 85034 Bankruptcy Case No.: 12-14362 Chapter 11 Petition Date: June 27, 2012 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Michael W. Carmel, Esq. MICHAEL W. CARMEL, LTD. 80 E. Columbus Ave Phoenix, AZ 85012-4965 Tel: (602) 264-4965 Fax: (602) 277-0144 E-mail: michael@mcarmellaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Hank Tobert, managing member of the board of members. SYNOVUS FINANCIAL: Fitch Affirms 'BB-' Issuer Default Rating ------------------------------------------------------------ Fitch Ratings has affirmed the long-term and short-term Issuer Default Rating (IDR) of Synovus Financial Bank (SNV) and its lead bank subsidiary, Synovus Bank at 'BB-' and 'B', respectively. The Outlook remains Negative. The ratings affirmation reflects the recent improvements in asset quality and reduction in refinancing risk at the holding company as a result of the senior notes issuance. The Rating Outlook remains Negative due to the still uncomfortably high levels of non-performing assets (NPA) and construction and land development loans. The reduction in credit losses and the successful execution of the company's efficiency initiative have allowed SNV to show modest profitability and begin to build its capital base. The last three quarters of profitability were aided by $93 million of securities gains, but going forward the credit losses and other expenses should be right-sized to the point where the company no longer needs to sell securities to show profitability. SNV's NPA ratio (including troubled debt restructurings [TDRs]), has risen modestly over the last year due in part to a shrinking loan portfolio but more importantly due to a material rise in accruing TDRs, which Fitch considers as non-performing assets. Fitch expects that NPAs will remain near current levels in the short term as accruing TDR and traditional NPL inflows offset NPL disposals and charge-offs. Reported capital adequacy ratios have begun to show modest improvement as the company has stopped reporting losses over the past three quarters. If profitability improves from current levels over the remainder of 2012, Fitch would expect the bank to reverse its valuation allowance on its deferred tax asset sometime in 2013 which could add as much as 300 basis points to the bank's tangible common equity ratio. Core capital levels, as measured by SNV's 6.8% tangible common equity (TCE) ratio, are not considered strong, especially when taken in conjunction with the bank's relatively poor asset quality and real estate concentration. However, regulatory capital levels are aided by $950 million of Treasury TARP funds, resulting in a strong bank-level tier 1 capital ratio of 13.19% at March 31, 2012. SNV has more TARP funds outstanding than any other bank in the U.S. and repayment appears to be at least a year away. The dividend on the TARP funds resets to 9% in late 2013 making this obligation more expensive if it is still outstanding at that time. The current rating level recognizes the fact that SNV is relatively weak compared to most mid-tier regional banks. Should economic conditions materially worsen in the Southeast, SNV would be particularly exposed given its real estate-centric loan portfolio and large amounts of NPAs, albeit recognizing that SNV has already taken sizable impairments on its legacy real estate portfolios. Positive rating momentum would likely entail removal of the memorandum of understanding along with a sustained reduction in NPAs (as calculated by Fitch). Moreover, positive rating actions could result from a viable plan to repay the Treasury TARP funds ahead of the coupon reset. Conversely, a continued high non- performing ratio would put further pressure on the current ratings. Fitch has upgraded SNV's subordinated debt to 'B+' from 'B' following a senior note issuance in February 2012. Fitch believes the senior note issuance provides SNV greater financial flexibility to repay its subordinated debt. SNV is a financial services holding company headquartered in Columbus GA, with roughly $27 billion in total assets. Operating via a decentralized customer delivery model through its 30 locally branded bank divisions throughout the Southeast in Georgia, Florida, South Carolina, and Tennessee, SNV provides a broad range of consumer and commercial banking products and services. Fitch has affirmed the following ratings, with a Negative Outlook: Synovus Financial Corporation -- Long-term IDR at 'BB-'; -- Short-Term IDR at 'B'; -- Viability Rating at 'bb-'; -- Preferred at 'CCC'; -- Support Floor 'NF' -- Support '5'. Synovus Bank -- Long-term IDR at 'BB-'; -- Long-term Deposit at 'BB'; -- Short-Term IDR at 'B'; -- Viability Rating at 'bb-'; -- Support Floor 'NF'; -- Support '5'. Fitch has upgraded the following rating: Synovus Financial Corporation -- Subordinated Debt to 'B+' from 'B'. Fitch has assigned the following rating: Synovus Financial Corporation -- Senior Unsecured at 'BB-'. THOMAS JEFFERSON: S&P Cuts Rating on Revenue Bonds to 'BB' ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term rating on California Statewide Communities Development Authority's tax- exempt revenue bonds, series 2008A, and taxable revenue bonds, series 2008B, issued for Thomas Jefferson School of Law, to 'BB' from 'BB+'. The outlook is negative. "The downgrade to 'BB' reflects our view of expected covenant violations in fiscal year 2012," said Standard & Poor's credit analyst Carlotta Mills. The rating reflects S&P's view of: - A high level of debt, an exceptionally high debt burden, and slim fiscal year 2011 financial resources; - A high 90% student tuition and fee dependence; - The school's history of operating surpluses; - The school's growth in enrollment and a strengthened matriculation rate; and - A dean who is further professionalizing the relatively new nonprofit institution and a curriculum that is flexible and entrepreneurial. "Management anticipates that it will not meet two covenants (unrestricted resources to debt and unrestricted resources to operating revenues) in fiscal year 2012 and does not currently expect to meet them until 2015 and 2017, respectively. The school is requesting waivers from bondholders, although we understand that bondholders have not yet decided whether to grant the waivers. It is our understanding that under the loan agreement, these covenant violations do not constitute an immediate event of default. Management reports that debt service has been paid on time and in full to date, which is expected to continue going forward. In our view, a further dilution of the balance sheet or operations that could hinder the school's ability to meet its financial obligations, or a bondholders' decision to accelerate the bonds, could lead to further, possibly multinotch negative rating actions," S&P said. TOUR WORLD: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Tour World, Inc. fdba Joe & Jans Charter & Tours, Inc. 130 McCracken Road Danville, PA 17821 Bankruptcy Case No.: 12-03729 Chapter 11 Petition Date: June 22, 2012 Court: U.S. Bankruptcy Court Middle District of Pennsylvania (Williamsport) Judge: John J. Thomas Debtor's Counsel: Lisa M. Doran, Esq. DORAN & DORAN, P.C. 69 Public Square, Suite 700 Wilkes-Barre, PA 18701 Tel: (570) 823-9111 Fax: (570) 829-3222 E-mail: ldoran@doran-law.net Scheduled Assets: $3,132,125 Scheduled Liabilities: $1,874,410 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/pamb12-03729.pdf The petition was signed by Joseph K. Schoppy, president. TROPICANA ENT: LandCo Debtors, Hotel Workers Fund Settle Claim -------------------------------------------------------------- Tropicana entities known as the Liquidating LandCo Debtors have entered into a stipulation with the Trustees of the Hotel Employees and Restaurant Employees International Union Welfare Fund (HEREIU) and the Southern Nevada Culinary & Bartenders Pension Trust for the final resolution of some reserved claims. In September 2008, the Welfare Fund and the Pension Trust, as claimants, filed Claim No. 2072 for $42,478 against Tropicana Las Vegas Resort & Casino LLC. Thereafter, after the LandCo Debtors filed a Chapter 11 plan in July 2009, the Claimants filed a Notice of Potential Administrative Claims. The Claimants went as far as filing a complaint for breach of contract and violations of the Employee Retirement Income Security Act in October 2009 in the U.S. District Court for the District of Nevada against, among others, the LandCo Debtors. The LandCo Debtors objected and disputed the Claimants' assertions. By an October 2010 stipulation, the LandCo Debtors agreed to make an $11,661 settlement payment to the Claimants in full satisfaction of claims that arose out of events on or before June 30, 2009. That first stipulation, however, excluded and reserved the claims asserted by the Claimants in the Complaint solely related to the operation of The Comedy Stop at the Tropicana Las Vegas Resort and Casino and events that arose on or after June 30, 2009. On April 11, 2011, the Nevada District Court entered a Default Judgment in favor of the Claimants and against The Comedy Shop and Robert Kephart in the amount of $49,531. Accordingly, in full satisfaction of all Reserved Claims and other claims that arose after June 30, 2009, the LandCo Debtors and the Claimants stipulate that the Reserved Claims will be reduced to, fixed at, and constitute an Allowed Other Priority Claim against the debtor estate of Hotel Ramada of Nevada for $39,288. The parties inked the stipulation in early 2012. The Claimants are represented by: Kevin B. Christensen, Esq. Sara D. Cope, Esq. CHRISTENSTEN JAMES & MARTIN 7440 W. Sahara Ave. Las Vegas, NV 89117 Tel: (702) 255-1718 Fax: (702) 255-0871 E-mail: kbchrislaw@aol.com About Tropicana Entertainment Tropicana Entertainment Inc. is a publicly reporting company that, along with its affiliates, owns or operates nine casinos and resorts in Indiana, Louisiana, Mississippi, Nevada and New Jersey. The Company owns approximately 6,000 rooms, 9,000 slot positions and 250 table games. In addition, the Company owns a development property in Aruba. The company is based in Las Vegas, Nevada. Tropicana Entertainment LLC and certain affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is 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 from the Bankruptcy Court of a reorganization 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 (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 cases. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. Effective March 8, Tropicana Entertainment successfully 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, have obtained approval of a separate Chapter 11 plan. 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 acts as their 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. Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have merged into Adamar of NJ In Liquidation, LLC. The merger and name change is 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. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Tropicana Entertainment Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: OpCo Debtors Allow Louisiana Lawsuits to Proceed --------------------------------------------------------------- Lee E. Kaufman, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, informed the Delaware Bankruptcy Court through a June 14, 2012 notice that Tropicana entities known as the Reorganized OpCo Debtors modified the injunction provided under their confirmed Chapter 11 Plan and the injunction provided by Section 524(a) of the Bankruptcy Code for the sole purpose of allowing these lawsuits to continue to judgment or settlement in the 19th Judicial District Court, Parish of East Baton Rouge, State of Louisiana: (1) Shawn Carty v. Argosy of Louisiana, Inc., No. 529665; and (2) Thyra E. Johnson v. Catfish Queen Partnership in Commendam d/b/a Belle of Baton Rouge and Argosy of Louisiana, Inc., No. 565017 The Plan Injunction and Section 524(a) of the Bankruptcy Code are being modified solely to determine the liquidated value of the claims underlying the State Court lawsuits and not to permit the enforcement or collection of any settlement or judgment except as provided in the Plan, Mr. Kaufman clarified. Nothing in the notice allows either the claim of Shawn Carty, Claim No. 1349, or the claims of Thyra Johnson and her attorney, Claim Nos. 1557 and 1558, Mr. Kaufman further related. For the avoidance of doubt, the Proofs of Claim remain disputed to date. About Tropicana Entertainment Tropicana Entertainment Inc. is a publicly reporting company that, along with its affiliates, owns or operates nine casinos and resorts in Indiana, Louisiana, Mississippi, Nevada and New Jersey. The Company owns approximately 6,000 rooms, 9,000 slot positions and 250 table games. In addition, the Company owns a development property in Aruba. The company is based in Las Vegas, Nevada. Tropicana Entertainment LLC and certain affiliates filed for Chapter 11 protection on May 5, 2008 (Bankr. D. Del. Case No. 08-10856). Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is 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 from the Bankruptcy Court of a reorganization 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 (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 cases. Manchester Mall is a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. Effective March 8, Tropicana Entertainment successfully 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, have obtained approval of a separate Chapter 11 plan. 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 acts as their 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. Debtors Adamar of New Jersey Inc. and Manchester Mall Inc. have merged into Adamar of NJ In Liquidation, LLC. The merger and name change is 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. Bankruptcy Creditors' Service, Inc., publishes Tropicana Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Tropicana Entertainment Inc. and its debtor-affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) UNITED MARITIME: S&P Affirms 'B' Corp. Credit Rating; Off Watch --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on United Maritime Group LLC. "At the same time, we raised the issue rating on the group's second-lien notes to 'BB-' from 'B' and revised the recovery rating to '1', indicating likely very high (90%-100%) recovery, from '3'. We removed all ratings from CreditWatch, where we had placed them with developing implications on April 20, 2012," S&P said. "We subsequently withdrew the ratings at the company's request," S&P said. "The company has deposited funds with the trustees to redeem its $200 million second-lien notes on July 11, 2012. The notes, which United Maritime co-issued with its wholly owned subsidiary United Maritime Group Finance Corp., would have matured in 2015," S&P said. "On June 11, 2012, the company completed the sale of United Bulk Terminal LLC, a wholly owned subsidiary that operated its bulk terminal services business, to Bulk Handling USA Inc., an affiliate of Oiltanking Holding Americas Inc. for $216.3 million," S&P said. "The company has not yet closed on its sale of United Barge Line LLC, a wholly owned subsidiary that operates its inland barge business, to Ingram Barge Co. for $222 million. United Maritime announced the definitive agreement for the sale on April 20, 2012," S&P said. UNIV OF NORTH CAROLINA: S&P Cuts Rating on Bonds to 'BB' -------------------------------------------------------- Standard & Poor's Ratings Services has lowered its long-term rating on the University of North Carolina at Pembroke's (UNCP) series 2010A and 2010B limited-obligation bonds to 'BB' from 'BBB+'. The downgrade reflects management's projection for fiscal year-end 2012 (June 30) debt service coverage that is below the 1.1x coverage required in the bond documents as well as lower- than-expected dormitory occupancy for the spring 2012 semester. The rating remains on CreditWatch with negative implications, where it was placed on Dec. 15, 2011. "At the same time, Standard & Poor's revised the outlook on its issuer credit rating (ICR) on the university to negative from stable. The negative outlook reflects Standard & Poor's opinion of the potential for a downgrade over the two-year outlook horizon if enrollment does not stabilize and the financial operations of the university deteriorate as a result. Standard & Poor's affirmed the 'A' ICR," S&P said. "The negative outlook on the ICR reflects Standard & Poor's expectation that, over the next two years, the university will continue to face enrollment challenges. In addition, the negative outlook reflects Standard & Poor's view of challenges regarding both management's ability to navigate through this difficult enrollment environment and the transition the university is currently experiencing at a number of senior management positions, including the Vice Chancellor for Business Affairs, Vice Chancellor of Enrollment Management, and the Vice Chancellor of Student Affairs," S&P said. "Consideration of a negative rating action during the outlook period could be triggered by university management's inability to effectively manage through current enrollment challenges. Additional credit factors that could, in our opinion, result in downward pressure on the rating could include deficit financial operations and the additional issuance of debt that further decreases financial resource ratios relative to the rating category," said Standard & Poor's credit analyst Jonathan Volkmann. "A return to a stable outlook on the ICR could reflect improvement in the university's demand and enrollment characteristics as well as continuity moving forward within the university's senior management team. In addition, we would expect university financial performance to be balanced on at least a cash basis and financial resource ratios to improve relative to the rating category.' USEC INC: Expects $1.9 Billion Revenue in 2012 ---------------------------------------------- USEC Inc. has provided an updated view of financial projections for 2012 following a recently signed agreement to extend Paducah Gaseous Diffusion Plant operations through May 31, 2013. In May, USEC entered into a multi-party arrangement with Energy Northwest, the Bonneville Power Administration, the Tennessee Valley Authority and the U.S. Department of Energy to extend uranium enrichment operations at the Paducah, Ky. plant. The Company has also entered into an agreement with DOE regarding a two-year, $350 million cooperative research, development and demonstration program for the American Centrifuge technology. USEC is evaluating the accounting treatment for the transfer of certain assets to DOE in connection with the RD&D program and the government's cost-sharing contributions for the RD&D program. Therefore, this update does not include the effects of the RD&D program and does not include earnings guidance. Under the Paducah agreement, Energy Northwest is required to provide USEC with approximately 9,000 metric tons of high-assay depleted uranium and 600 metric tons of natural uranium. USEC will enrich the depleted uranium tails to make about 480 metric tons of low enriched uranium. The program, combined with other USEC commercial obligations, will require approximately 5 million separative work units, a standard measure of uranium enrichment that represents the effort that is required to increase the concentration of the U-235 isotope in the uranium. The work, which began in early June, will take about 12 months. The overall tails disposal liability of the U.S. government will be reduced as a result of the agreement and subsequent processing. USEC's prior guidance for 2012 did not assume Paducah operations beyond May 31, 2012, and included an expectation that 2012 SWU deliveries would be roughly equivalent to 2011 deliveries. Under the new contract, USEC expects to increase SWU deliveries in 2012 by approximately 30 percent compared to last year and roughly equal to the volume of SWU sold in 2009. Revenue from the sale of SWU is expected to be approximately $1.8 billion, an increase of $300 million to $400 million over prior guidance. The Company anticipates the average price per SWU billed to customers will increase 5 percent over 2011. The average price billed to customers for sales of SWU increased 3 percent in each of 2011 and 2010, reflecting the particular contracts under which SWU were sold during the periods, as well as the general trend of higher prices under contracts signed in recent years. Uranium revenue in 2012 is expected to be as much as $50 million, subject to timing of sales, which is $80 million less than in 2011. Under the Megatons to Megawatts program, USEC anticipates buying 5.5 million SWU from Russia during 2012. Under the contract's pricing formula, the price we pay Russia will increase 2 percent compared to deliveries in 2011. Guidance for the contract services segment is unchanged. Contract services work for DOE at the former Portsmouth Gaseous Diffusion Plant was completed in September 2011, and revenue for the segment is expected to decline significantly in 2012. In prior years, contract work at Portsmouth represented approximately three- quarters of revenue for the contract services segment. USEC subsidiary NAC International will represent a majority of revenue for the segment going forward and the Company expects annual revenue for contract services in 2012 of approximately $85 million. Therefore, total revenue is expected to be approximately $1.9 billion. Based on the Company's view of revenue and expense, the Company expects to earn a gross profit margin in the range of 6 to 7 percent. USEC has undertaken a review to align its organization with its evolving business environment and the expected reduction in the size of its workforce over time. The recent agreements regarding Paducah operations and the RD&D program will extend the time period for additional workforce reductions. As a result of initial workforce reductions already taken, USEC expects to take a charge of $1.1 million for one-time employee termination benefits and related cash expenditures when the Company reports second quarter 2012 results. The Company expects to take additional actions during 2012 that could result in additional charges. The Company currently expect its selling, general and administrative expense to be approximately $58 million in 2012, a $4 million reduction from 2011, as the Company's financial results begin to reflect the benefit of reductions in corporate expenses. The Company expects to provide an update on advanced technology spending, all of which is currently being expensed, when it reports second quarter results. In previous years, USEC has provided guidance for cash flow from operations. Because the accounting treatment for the RD&D program is still being evaluated, the Company is not providing cash flow guidance at this time. The Company does, however, expects to end the second quarter with a cash balance of more than $200 million compared to $72.3 million at March 31, 2012. In June, $44 million of cash was returned to USEC that had been cash collateral supporting financial assurance for the disposition of a quantity of depleted uranium that was transferred to DOE in exchange for DOE acquiring U.S.-origin low enriched uranium from USEC. This was pursuant to a uranium sales agreement signed in March 2012. About USEC Inc. Headquartered in Bethesda, Maryland, USEC Inc. (NYSE: USU) -- http://www.usec.com/-- supplies enriched uranium fuel for commercial nuclear power plants. The Company reported a net loss of $540.70 million in 2011, compared with net income of $7.50 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $3.54 billion in total assets, $2.79 billion in total liabilities and $752.40 million in total stockholders' equity. * * * USEC Inc. carries 'Caa1' corporate and probability of default ratings, with "developing" outlook, from Moody's, and 'CCC+' long term foreign issuer credit rating and 'CCC-' long term local issuer credit rating, with outlook "developing", from Standard & Poor's. In May 2010, S&P said that its rating and outlook on USEC Inc. are not affected by the announcement that Toshiba Corp. and Babcock & Wilcox Investment Co., an affiliate of The Babcock & Wilcox Co., have signed a definitive investment agreement for $200 million with USEC. VISUALANT INC: Names Richard Mander as VP of Product Management --------------------------------------------------------------- Visualant, Inc., appointed Richard Mander as Vice President of Product Management and Technology. Mr. Mander will focus on optimizing Visualant technologies for three primary industries: homeland security, medical and cosmetic, and consumer goods. By using Visualant's color-based identification and diagnostic solutions, companies operating in these industries can use a wide spectrum of colors to enhance or authenticate consumer products, verify documents or debunk counterfeits. Mr. Mander served most recently as Vice President of Product Management at Contour, the Seattle-based manufacturer of sports video cameras. Mr. Mander, who has a Ph.D. from Stanford, has vast experience as a technology company senior executive bringing technology into the marketplace. Mr. Mander was also instrumental in his Product Management and Operations Engineering roles at Contour, 7th fastest growing company in the US, where he led the development of innovative rugged cameras incorporating GPS and Bluetooth technologies. Mr. Mander maintained a long-term Engineering Manager role at Apple and is known as an inspiring leader with a track record of developing innovative and high quality consumer electronic products. His previous roles include CEO of HumanWare, CTO at Navman, and leading roles in several startups. Ron Erickson, Visualant Founder and CEO stated, "We are thrilled to have Richard Mander join the Visualant team as we move our Spectral Pattern Technology into the marketplace. He is adept at managing the diverse aspects of productizing technology and will work well with our senior scientists and our new partners at Sumitomo Precision Products. We wholeheartedly welcome Richard to Visualant." "Timing is everything in life, and I am very pleased to join Visualant at this strategic moment in the company's ascent," said Mander, "Spectral Pattern Technology is the foundation for a broad array of applications. I look forward to working with the scientific team and Sumitomo Precision Products as we bring SPM into the marketplace." About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on October 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant reported a net loss of $2.39 million for the year ended Sept. 30, 2011, compared with a net loss of $1.14 million during the previous year. The Company's balance sheet at March 31, 2012, showed $3.97 million in total assets, $5.82 million in total liabilities, $29,137 in noncontrolling interest and a $1.88 million total stockholders' deficit. The Company anticipates that it will record losses from operations for the foreseeable future. As of March 31, 2012, the Company's accumulated deficit was $12.4 million. The Company has limited capital resources, and operations to date have been funded with the proceeds from private equity and debt financings. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The audit report prepared by the Company's independent registered public accounting firm relating to the Company's financial statements for the year ended Sept. 30, 2011, includes an explanatory paragraph expressing the substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Company said in its quarterly report for the period ended March 31, 2012, that if it is unable to obtain additional financing, it may need to restructure its operations, divest all or a portion of its business or file for bankruptcy. The Company had cash of $34,827, a net working capital deficit of approximately $3.3 million and total indebtedness of $2.5 million as of March 31, 2012. The Company will need to obtain additional financing to implement its business plan, service its debt repayments and acquire new businesses. There can be no assurance that the Company will be able to secure funding, or that if that funding is available, whether the terms or conditions would be acceptable to the Company. VISUALANT INC: Sumitomo Precision Discloses 21.8% Equity Stake -------------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Sumitomo Precision Products Co., Ltd., disclosed that, as of June 21, 2012, it beneficially owns 17,307,693 shares of common stock of Visualant, Inc., representing 21.8% of the shares outstanding. A copy of the filing is available for free at: http://is.gd/v3Zu3Z About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on October 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant reported a net loss of $2.39 million for the year ended Sept. 30, 2011, compared with a net loss of $1.14 million during the previous year. The Company's balance sheet at March 31, 2012, showed $3.97 million in total assets, $5.82 million in total liabilities, $29,137 in noncontrolling interest and a $1.88 million total stockholders' deficit. The Company anticipates that it will record losses from operations for the foreseeable future. As of March 31, 2012, the Company's accumulated deficit was $12.4 million. The Company has limited capital resources, and operations to date have been funded with the proceeds from private equity and debt financings. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The audit report prepared by the Company's independent registered public accounting firm relating to the Company's financial statements for the year ended Sept. 30, 2011, includes an explanatory paragraph expressing the substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Company said in its quarterly report for the period ended March 31, 2012, that if it is unable to obtain additional financing, it may need to restructure its operations, divest all or a portion of its business or file for bankruptcy. The Company had cash of $34,827, a net working capital deficit of approximately $3.3 million and total indebtedness of $2.5 million as of March 31, 2012. The Company will need to obtain additional financing to implement its business plan, service its debt repayments and acquire new businesses. There can be no assurance that the Company will be able to secure funding, or that if that funding is available, whether the terms or conditions would be acceptable to the Company. VITESSE SEMICONDUCTOR: W. Martin Has 12.8% Stake at June 26 ----------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, William C. Martin and his affiliates disclosed that, as of June 26, 2012, they beneficially own 3,226,627 shares of common stock of Vitesse Semiconductor Corporation representing 12.8% of the shares outstanding. A copy of the filing is available for free at http://is.gd/Dofg9E 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. VITRO SAB: Appeals Court Stops Bondholders From Seizing Assets -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that creditors of Vitro SAB for now can't begin to attach assets of the Mexican glassmaker and its subsidiaries. The U.S. Court of Appeals in New Orleans temporarily extended a stay pending appeal that the bankruptcy judge in Dallas imposed earlier this month when he refused to enforce Vitro's Mexican reorganization plan in the U.S. The bankruptcy judge left it up to an appellate court to decide whether the prohibition against seizing asset would extend beyond June 29. According to the report, the Fifth Circuit in New Orleans granted a direct appeal from the ruling by the bankruptcy judge and told the bondholders Thursday to submit papers on July 2 opposing an extension of the stay halting asset seizures. The appeals court said the temporary stay it imposed yesterday will remain in effect "pending further order of this court." The bankruptcy judge refused to enforce the Vitro reorganization in the U.S., finding it was "manifestly contrary" to U.S. law and public policy. He said the Mexican plan improperly allowed Vitro subsidiaries to reduce their guarantees on $1.2 billion in defaulted bonds even though they weren't in bankruptcy themselves. Vitro argues that no other Mexican reorganization plan has ever been denied enforcement in the U.S. The company called the bankruptcy court's opinion "unprecedented and erroneous." The bondholders have been fighting the Mexican plan because it gives them only a 40 percent recovery while Vitro's owners retain stock worth $500 million. The appeal in the Circuit Court is Vitro SAB de CV v. Ad Hoc Group of Vitro Noteholders (In re Vitro SAB de CV), 12-10689, U.S. Court of Appeals for the Fifth Circuit (New Orleans). The suit in bankruptcy court where the judge decided not to enforce the Mexican reorganization in the U.S. is Vitro SAB de CV v. ACP Master Ltd. (In re Vitro SAB de CV), 12-03027, U.S. Bankruptcy Court, Northern District of Texas (Dallas). About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global glass producer, serving the construction and automotive glass markets and glass containers needs of the food, beverage, wine, liquor, cosmetics and pharmaceutical industries. Vitro is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009, and sought to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. Concurso Mercantil & Chapter 15 Proceedings Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, commencing its voluntary concurso mercantil proceedings -- the Mexican equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on Dec. 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. But an appellate court in Mexico reinstated the reorganization in April 2011. Following the reinstatement, Vitro SAB on April 14, 2011, re-filed a petition for recognition of its Mexican reorganization in U.S. Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11- 11754). The Vitro parent received sufficient acceptances of its reorganization by using the US$1.9 billion in debt owing to subsidiaries to vote down opposition by bondholders. The holders of US$1.2 billion in defaulted bonds opposed the Mexican reorganization plan because shareholders could retain ownership while bondholders aren't being paid in full. Vitro announced in March 2012 that it has implemented the reorganization plan approved by a judge in Monterrey, Mexico. In the present Chapter 15 case, the Debtor seeks to block any creditor suits in the U.S. pending the reorganization in Mexico. Chapter 11 Proceedings A group of noteholders opposed the exchange -- namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P. Together, they held US$75 million, or approximately 6% of the outstanding bond debt. The Noteholder group commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders, known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. A bankruptcy judge in Fort Worth, Texas, denied involuntary Chapter 11 petitions filed against four U.S. subsidiaries. On April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro America LLC and three other U.S. subsidiaries -- that were subject to the involuntary petitions into voluntary Chapter 11. The Texas Court on April 21 denied involuntary petitions against the eight U.S. subsidiaries that didn't consent to being in Chapter 11. Kurtzman Carson Consultants is the claims and notice agent to Vitro America, et al. Alvarez & Marsal North America LLC, is the Debtors' operations and financial advisor. The official committee of unsecured creditors appointed in the Chapter 11 cases of Vitro America, et al., has selected Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, as counsel. Blackstone Advisory Partners L.P. serves as financial advisor to the Committee. The U.S. Vitro companies sold their assets to American Glass Enterprises LLC, an affiliate of Sun Capital Partners Inc., for US$55 million. U.S. subsidiaries of Vitro SAB are having their cases converted to liquidations in Chapter 7, court records in January 2012 show. In December, the U.S. Trustee in Dallas filed a motion to convert the subsidiaries' cases to liquidations in Chapter 7. The Justice Department's bankruptcy watchdog said US$5.1 million in bills were run up in bankruptcy and hadn't been paid. On June 13, 2012, U.S. Bankruptcy Judge Harlin "Cooter" Hale in Dallas entered a ruling that precluded Vitro from enforcing its Mexican reorganization plan in the U.S. The judge ruled that the Mexican reorganization was "manifestly contrary" to U.S. public policy because it bars the bondholders from holding Vitro operating subsidiaries liable to pay on their guarantees of the bonds. The Mexican plan reduced the debt of subsidiaries on $1.2 billion in defaulted bonds even though they weren't in bankruptcy in any country. WARNER MUSIC: Terminates Supply Agreements with Cinram ------------------------------------------------------ Warner-Elektra-Atlantic Corporation and WEA International, Inc., each a wholly-owned subsidiary of Warner Music Group Corp., provided notice of termination, effective immediately, of the US/Canada Manufacturing and PP&S Agreement, effective as of July 1, 2010, by and between WEA and Cinram International Inc., Cinram Manufacturing LLC and Cinram Distribution LLC and the International Manufacturing and PP&S Agreement, effective as of July 1, 2010, by and between WEA International and Cinram International Inc., Cinram GmbH and Cinram Operation UK Limited, respectively. The Company terminated the Cinram Agreements on the basis of Sections 5(b) of the US Agreement and 3(b) of the International Agreement. As a result of the termination of the Cinram Agreements, the terms of the US/Canada Transition Agreement, effective as of July 1, 2010, by and between WEA and Cinram International, Cinram Manufacturing and Cinram Distribution and the International Transition Agreement, effective as of July 1, 2010, by and between WEA International and Cinram International, Cinram GmbH and Cinram Operation UK Limited now apply and WEA, WEA International and Cinram are bound by the terms of that Transition Agreements. There are no early termination penalties incurred by any of WEA, WEA International or the Company as a result of this termination. Under the Cinram Agreements, Cinram supplies the Company with manufacturing and pick/pack/ship services in the US, Canada and Central Europe. The Company will continue operating with Cinram in a non-exclusive capacity under the Transition Agreements and for the next six months the current pricing in the Cinram Agreements will continue to apply. After that time, a new rate card can be negotiated by both companies. While the Transition Agreements now would permit the Company to use third-party vendors to fulfill any portion of its service requirements, and although there are several capable substitute suppliers including some with which the Company already has arrangements, it could be costly for the Company to switch to substitute suppliers for any such services, particularly in the short term, and any delays associated with transitioning to other suppliers could also have an adverse impact on the Company's operations. 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. On July 20, 2011, the Company notified the New York Stock Exchange, Inc., of its intent to remove the Company's common stock from listing on the NYSE and requested that the NYSE file with the SEC an application on Form 25 to report the delisting of the Company's common stock from the NYSE. On July 21, 2011, in accordance with the Company's request, the NYSE filed the Form 25 with the SEC in order to provide notification of that delisting and to effect the deregistration of the Company's common stock under Section 12(b) of the Securities Exchange Act of 1934, as amended. On August 2, 2011, the Company filed a Form 15 with the SEC in order to provide notification of a suspension of its duty to file reports under Section 15(d) of the Exchange Act. The Company continues to file reports with the SEC pursuant to the Exchange Act in accordance with certain covenants contained in the instruments governing the Company's outstanding indebtedness. The Company reported a net loss of $60 million on $1.40 billion of revenue for the six months ended March 31, 2012. The Company reported a net loss of $206 million on $2.86 billion of revenue for the combined 12 months ended Sept. 30, 2011, following a net loss of $145 million on $2.98 billion of revenue for the fiscal year ended Sept. 30, 2010. 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. WATERFORD LAKES: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Waterford Lakes Capital Partners, LLC 12850 Waterford Lakes Parkway Orlando, FL 32828 Bankruptcy Case No.: 12-08675 Chapter 11 Petition Date: June 26, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: Justin M. Luna, Esq. LATHAM, SHUKER, EDEN & BEAUDINE, LLP P.O. Box 3353 Orlando, FL 32802-3353 Tel: (407) 481-5800 Fax: (407) 481-5801 E-mail: bankruptcynotice@lseblaw.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 four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-08675.pdf The petition was signed by Whitney W. Harp, managing member. WAVELAND - INGOTS: Fitch Withdraws 'D' Rating on Two Note Classes ----------------------------------------------------------------- Fitch Ratings has downgraded two classes of notes issued by Waveland - INGOTS Ltd. and withdrawn the rating as follows: -- $22,386,997 class C-1 notes to 'Dsf' from 'Csf/RE 55%' and withdrawn; -- $1,648,310 class C-2 notes to 'Dsf' from 'Csf/RE 55%' and withdrawn. At the direction of the subordinate note holders, an optional redemption was declared, portfolio collateral was liquidated, and proceeds were distributed according to the transaction documents. On the June 21, 2012 redemption date the class B notes were paid in full while the class C-1 and C-2 notes (Class C) received only partial repayment. The optional redemption accelerated the maturity of the notes, and therefore Fitch deems the class C notes to be in default. The rating actions are the result of the transaction's inability to pay the full amount of principal and interest of the class C notes on the redemption date. Approximately $13.5 million of portfolio collateral was remaining, as of the June 11, 2012 trustee report. Proceeds from the sale of the remaining collateral are expected to be distributed to the class C notes at a future distribution date; however, Fitch does not expect proceeds to be sufficient to pay the notes in full. On a pro rata basis, the class C notes receive Basic Interest, Mezzanine Interest, Additional Interest and Contingent Interest from the interest waterfall. According to the rating definition, all but the Basic Interest is used to satisfy the rated principal balance. Mezzanine Interest, Additional Interest and Contingent Interest payments have not been made since the September 2008 payment date and a total deferred balance of $5.37 million was left unpaid at the redemption date. Waveland is a cash flow collateralized loan obligation (CLO), which closed on June 24, 2003 and is managed by Pacific Investment Management Company LLC (PIMCO). The five-year reinvestment period ended in June 2008. WINDMILL DURANGO: Buying a Claim & Changing a Vote Not Permitted ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Bankruptcy Appellate Panel for the Ninth Circuit in San Francisco ruled Thursday that a secured creditor was properly barred from buying the claim of the one unsecured creditor to block the use of cramdown. The report recounts that the case involved the bankruptcy of an office building the owner contended was worth more than the debt owing to the secured creditor with a $16 million claim. The plan provided for paying the mortgage at a reduced interest rate on a 30-year amortization schedule. The modified mortgage would mature in 10 years. Naturally, the secured creditor voted against the plan. One unsecured creditor voted in favor of the plan. According to the report, after the voting deadline, the lender bought the claim and filed a motion for permission to change the vote on the unsecured claim from "yes" to "no." The bankruptcy judge declined to allow a changed vote and confirmed the Chapter 11 plan. The lender appealed and lost. Had the lender been allowed to change the vote on the unsecured claim, there would have been no accepting class and no ability to confirm the plan based on cramdown. The report relates that in a 33-page opinion, the Appellate Panel said that Bankruptcy Rule 2018(a) allows a vote to change only on a showing of "cause." The appellate panel reviewed the bankruptcy court's decision to determine if there was an abuse of discretion in finding no "cause." The bankruptcy judge said that "cause" requires something more than a "change of heart." While it was a "close question," the appellate panel concluded that the bankruptcy judge didn't abuse her discretion in denying the motion to change the vote. The report adds that the bank also attacked the plan, saying it wasn't filed in good faith because it artificially impaired unsecured creditors by paying no interest and stretching out payment over a few months. The bank contended the property owner easily could have paid the claim in full when the plan was confirmed. The appellate panel again upheld the bankruptcy judge because it didn't have a "definite and firm conviction that the bankruptcy judge erred" in deciding that the plan was filed in good faith. The case is Beal Bank USA v. Windmill Durango Office LLC (In re Windmill Durango Office LLC), 11-1728, U.S. Bankruptcy Appellate Panel for the Ninth Circuit (San Francisco). About Windmill Durango Las Vegas, Nevada-based Windmill Durango Office, LLC, currently owns 4.49 acres of commercial real estate developed with a Class A office with improvements in Clark County, Nevada. IDC Windmill Durango, LLC, is the general partner of Windmill Durango, LP, which is the sole member of the Debtor. The Debtor is managed by Jeff Susa, Manager of IDC Windmill Durango, LLC. The Company filed for Chapter 11 protection on August 17, 2010 (Bankr. D. Nev. Case No. 10-25594). Zachariah Larson, Esq., and Shara Larson, Esq., at Larson & Stephens, in Las Vegas, represent the Debtor as counsel. The Debtor proposed the law firm of Flangas McMillan Law Group as special counsel. The Debtor disclosed $21,389,774 in assets and $16,535,000 in liabilities as of the Petition Date. Affiliates Windmill Durango Op, LLC (Bankr. D. Nev. Case No. 10-18058) and Windmill Durango Retail, LLC (Bankr. D. Nev. Case No. 10-18056) filed for Chapter 11 protection on May 3, 2010. The Debtor listed $21,389,774 in assets, and $16,543,355 in debts. WJO INC: Health Clinic Taken Over by Chapter 11 Trustee ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that WJO Inc. is being taken over by a Chapter 11 trustee at the behest of Tristate Capital Bank, the secured lender owed $4 million. The U.S. Bankruptcy Court in Philadelphia called for a trustee on June 27 after the bank said the collateral was worth less than the debt. The report relates that the company filed two reorganization plans, and the creditors' committee submitted one. The bank said none of the plans moved forward, nor was any disclosure statement approved. About WJO Inc. Bristol, Pennsylvania-based WJO, Inc., operates six family practices located in Newtown, Bristol, Bensalem, Bustleton, South Philadelphia, and Bethlehem, Pennsylvania and consists of Board Certified Osteopathic Physicians specializing in Family Medicine. Prior to the petition date, and to allow the Company to restructure effectively, HyperOx Inc., HyperOx I, LP, HyperOx III, LP, and East Coast TMR, Inc., were merged into WJO. WJO filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 10-19894) on Nov. 15, 2010. The Debtor disclosed $19,923,802 in assets and $6,805,255 in liabilities as of the Chapter 11 filing. Holly Elizabeth Smith, Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., serve as the Debtor's bankruptcy counsel. Pond Lehocky Stern Giordano serves as the Debtor's special counsel to represent it in worker's compensation proceedings pertaining to the Therapeutic Magnetic Resonance treatments. Patrick Yun serves as the Debtor's financial advisor. Attorneys at Keifer & Tsarouhis LLP serve as counsel to the official committee of unsecured creditors. ParenteBeard LLC serves as the Committee's accountant and financial advisor. The United States Trustee has appointed David Knowlton as patient care ombudsman in the case. The Ombudsman is represented in the case by Karen Lee Turner, Esq., at Eckert Seamans Cherin & Mellott, LLC, as counsel. Tristate Capital Bank, the cash collateral lender, is represented in the case by lawyers at Benesch Friedlander Coplan & Aronoff LLP. XINERGY CORP: Moody's Downgrades CFR to 'Caa3'; Outlook Negative ---------------------------------------------------------------- Moody's Investors Service downgraded Xinergy Corp.'s ratings, including corporate family rating (CFR), probability of default rating, and senior secured debt rating, to Caa3 from Caa1. At the same time, Moody's changed the company's Speculative Grade Liquidity (SGL) rating to SGL-4 from SGL-2. The outlook is negative. Moody's took the following rating actions: Downgrades: Issuer: Xinergy Corp. Probability of Default Rating, Downgraded to Caa3 from Caa1 Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-2 Corporate Family Rating, Downgraded to Caa3 from Caa1 Senior Secured Regular Bond/Debenture, Downgraded to Caa3, LGD3, 46% from Caa1, LGD3, 48% Outlook Actions: Issuer: Xinergy Corp. Outlook, Changed To Negative From Stable Ratings Rationale The downgrade reflects Moody's expectation that Xinergy's liquidity will erode due to negative EBITDA margin and cash flows over the next twelve to eighteen months, in light of unfavorable industry conditions and Xinergy's position as a small, primarily thermal coal producer concentrated in Central Appalachia. The deterioration in Xinergy's financial performance is largely driven by the market conditions and challenges facing the US thermal coal industry. Unusually warm weather in the US and low natural gas prices in 2011-2012 led to a collapse in coal prices across most coal producing regions and production cuts across the industry, with utilities decreasing their coal-fired generation in favor of lower-priced natural gas. Central Appalachian thermal coal has been most impacted, due to high costs of production and availability of natural gas capacity at the utilities traditionally served by the region. Xinergy primarily sells its thermal coal at spot prices, and as such, Moody's does not expect the company to be able to generate a meaningful margin on its thermal coal sales, unless the market recovers. Although the company has recently expanded in metallurgical coal, through acquisition of True Energy high-vol met operation in July 2011 and the start of production at South Fork mid-vol met coal mine in April 2012, Moody's does not expect the company's metallurgical business to be profitable in 2012, due to low volumes and high costs, combined with the softness in the metallurgical coal market. Moody's expects metallurgical coal market to remain soft for the next several months, due to the ongoing sovereign crisis in Europe and slowing growth rates in steel production in China. Although the company has taken a number of cost saving actions, including idling thermal operations, cutting almost 40% of workforce, and cutting back on capital programs, Moody's expects negative free cash flow of as much as $40 million for the full year 2012, which includes the non-recurring cash inflow of approximately $30 million in the first quarter of 2012 from contract settlements with two thermal customers and release of restricted cash. Although the cash burn rate will likely moderate in the second half of 2012 and 2013, Moody's believes free cash flows will remain significantly negative over the rating horizon. The SGL-4 liquidity rating reflects Moody's expectation that the company's current liquidity, which includes $69.5 million of cash at March 31, 2012, will deteriorate significantly over the next twelve to eighteen months, in light of the negative free cash flow generation expected. The negative outlook reflects Moody's expectation that the market conditions will remain challenging over the next several months, and that Xinergy's liquidity will continue to erode. A further downgrade would be considered if liquidity deteriorates more rapidly than expected. While an upgrade is unlikely, a positive action on the ratings could be considered if the company is able to secure additional sources of financing and financial performance improves, such that the company is expected to generate positive EBITDA and operating cash flows. The principal methodology used in rating Xinergy 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. YANG CENTRAL: Case Summary & Largest Unsecured Creditor ------------------------------------------------------- Debtor: Yang Central Park, LLC. 332 Tulip Circle Fredericksburg, VA 22401 Bankruptcy Case No.: 12-33831 Chapter 11 Petition Date: June 25, 2012 Court: U.S. Bankruptcy Court Eastern District of Virginia (Richmond) Judge: Kevin R. Huennekens Debtor's Counsel: Mark Joseph Dahlberg, Esq. WOEHRLE & FRANKLIN 2120 Lafayette Boulevard Fredericksburg, VA 22401 Tel: (540) 898-8881 E-mail: mark.dahlberg1@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Mary Soon Yang, president. The Company's list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Bank National Association The Shoppes at $3,497,126 190 South LaSalle Street, 7th Floor Central Park Chicago, IL 60603 * Moody's Sees Slow Earnings Growth in Global E&P Sector -------------------------------------------------------- A drop in oil prices and jitters over economic conditions in Europe, the US and China suggest the global exploration and production sector (E&P) will see its earnings grow more slowly over the next 12 to 18 months, Moody's Investors Service said in a new report. The rating agency also lowered its price assumptions for crude oil and natural gas liquids (NGLs) for the remainder of 2012, and for 2013 and beyond. In the new report, "Fading Oil-Price Boom and World Economic Conditions Point to Slower E&P Growth," Moody's said it expects E&P industry EBITDA to grow in the mid-to-high single digits year- on-year through mid-2013. Expectations for EBITDA growth in the sector above 10% would suggest a positive outlook, while a retreat of 10% or more would point to a negative outlook. Moody's changed its outlook for the E&P industry to stable from positive on June 27, 2012. The rating agency's industry outlooks reflect expectations for fundamental business conditions in the industry over the next 12 to 18 months. "With considerable weakening in oil and natural gas liquid prices and a rebound unlikely in 2012 or even 2013, earnings will be dampened, even those of companies focused toward production of oil and NGLs," said Terry Marshall, a Moody's Senior Vice President. "That, in addition to the ongoing sovereign debt crisis in Europe and a potential slowdown in China, all contribute to our change in outlook." Moody's lowered its crude price assumptions to $90/bbl for WTI and $100/bbl Brent in 2012, with an additional expected decline in 2013 to $85/bbl for WTI and $95/bbl for Brent in 2013. Moody's expects that the spread between benchmark Brent and WTI crude will narrow to about $5 in 2014. Price assumptions represent full-year baseline pricing approximations -- not forecasts -- that Moody's uses to evaluate risk when analyzing credit conditions for E&P issuers. Moody's also expects little change in US natural gas prices before the end of 2013 with a normal winter offering the best near-term support for natural gas prices as increased utility and industrial demand will ramp up slowly. The ongoing supply glut in NGLs will continue to pressure prices, leading the rating agency to lower its price assumptions for NGLs to 40% of WTI crude prices, from a previous 50%, says Moody's. The outlook update also notes that while capital spending plans remain strong across the sector, capex budgets may shrink somewhat as oil and NGL prices fell sharply in the second quarter of 2012. * Claims Trading in May Second-Lowest in the Past Year ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that according to data compiled from court records by SecondMarket Inc., the $1.95 billion in claims traded during May were the second-fewest in the last year, exceeding only the $1.5 billion of claims that changed hands in April. Lehman Brothers Holdings Inc. claims represented 80% of the month's total, with $1.55 billion in face amount of traded claims. MF Global Inc. was again in second place, with $246.1 million of traded claims, or 16% of Lehman's. In number of traded claims, MF Global's 253 reported trades approached the 265 traded claims for Lehman. April was the slowest month for claims trading since February 2010. Trading dropped once Lehman began making distributions to creditors under the confirmed Chapter 11 plan. * Kramer Levin Receives Award for Work on Capmark Committee ----------------------------------------------------------- Kramer Levin Naftalis & Frankel received a Turnaround Atlas Award Tuesday night for the firm's work as unsecured creditors committee counsel for Capmark Financial Group Inc. The complex bankruptcy transaction was named "Chapter 11 Reorganization Deal of the Year" (Large Markets) at the Global M&A Network's annual awards gala in Chicago. To qualify for the large markets category, the restructuring had to be valued above $750 million. Kramer Levin represented the Official Committee of Unsecured Creditors in Capmark's chapter 11 case. At the time of its filing, Capmark was one of the largest commercial real estate lenders and loan servicers in North America, with assets of approximately $20 billion and liabilities of approximately $21 billion. Kramer Levin actively represented the Committee in, among other things, over ten complex asset sales by Capmark, including the sale of Capmark's North American mortgage servicing business to Berkadia within the first few weeks of the case being commenced. Kramer Levin also represented the Committee in formulating and negotiating a comprehensive plan of reorganization that distributed a recovery to unsecured creditors and gave control of the reorganized Company, including the ultimate ownership of Capmark Bank, to unsecured creditors. The Kramer Levin team advising the Committee was led by Corporate Restructuring and Bankruptcy Department co-chair Thomas Moers Mayer and partners Amy Caton and Joshua Brody. The Global M&A Network presents the annual turnaround awards to honor top performances from the distressed M&A, restructurings, reorganizations and the turnaround communities, worldwide. Winners are selected on the basis of "performance" criteria by an independent awards advisory group. Kramer Levin also was honored Tuesday with the "Healthcare Services Deal of the Year" for the firm's representation of Saint Vincent Catholic Medical Centers of New York. Kramer Levin has played a leading role in some of the largest and most newsworthy bankruptcy cases, representing debtors, committees, and other significant players in chapter 11 cases. In particular, on the committee side, Kramer Levin is currently representing the official committee of unsecured creditors in the chapter 11 cases of Residential Capital, LLC, RG Steel, Hostess Brands, Inc., AES Energy Corporation and Evergreen Solar, Inc. Additionally, the firm represents the bankruptcy trustees appointed in the insolvency proceedings of Lehman Brothers Treasury Co. B.V. and the largest bondholder in the American Airlines bankruptcy. Kramer Levin Naftalis & Frankel LLP -- http://www.kramerlevin.com/ -- is a premier, full-service law firm with offices in New York, Silicon Valley and Paris. Firm lawyers are leading practitioners in their respective fields. The firm represents Global 1000 and emerging growth companies, institutions and individuals, across a broad range of industries. * BOND PRICING -- For Week From June 25 to 29, 2012 --------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- A123 SYSTEMS INC 3.750 4/15/2016 26.000 AES EASTERN ENER 9.000 1/2/2017 15.500 AES EASTERN ENER 9.670 1/2/2029 17.500 AGY HOLDING COR 11.000 11/15/2014 39.010 AHERN RENTALS 9.250 8/15/2013 64.500 ALION SCIENCE 10.250 2/1/2015 45.300 AM AIRLN PT TRST 10.180 1/2/2013 84.000 AMBAC INC 6.150 2/7/2087 1.502 AMBAC INC 9.375 8/1/2011 22.960 AMBAC INC 9.500 2/15/2021 25.000 AMER GENL FIN 4.100 7/15/2012 97.538 AMER GENL FIN 4.875 7/15/2012 99.875 ATP OIL & GAS 11.875 5/1/2015 47.875 ATP OIL & GAS 11.875 5/1/2015 47.890 ATP OIL & GAS 11.875 5/1/2015 47.875 BAC-CALL07/12 5.500 10/15/2029 100.000 BAC-CALL07/12 5.800 1/15/2028 100.000 BAC-CALL07/12 5.900 7/15/2029 99.980 BAC-CALL07/12 6.650 7/15/2027 99.982 BAC-CALL07/12 8.250 4/15/2027 101.920 BAC-CALL07/12 8.278 12/1/2026 101.570 BROADVIEW NETWRK 11.375 9/1/2012 64.750 BUFFALO THUNDER 9.375 12/15/2014 34.875 CBS-CALL07/12 8.200 5/15/2014 112.646 DIRECTBUY HLDG 12.000 2/1/2017 18.000 DIRECTBUY HLDG 12.000 2/1/2017 18.000 DOMINION RESOURC 6.250 6/30/2012 100.000 EASTMAN KODAK CO 7.000 4/1/2017 15.000 EASTMAN KODAK CO 7.250 11/15/2013 15.375 EASTMAN KODAK CO 9.200 6/1/2021 13.393 EASTMAN KODAK CO 9.950 7/1/2018 13.105 EDISON MISSION 7.500 6/15/2013 60.400 ELEC DATA SYSTEM 3.875 7/15/2023 97.000 ENERGY CONVERS 3.000 6/15/2013 42.000 EVERGREEN SOLAR 13.000 4/15/2015 48.000 GEOKINETICS HLDG 9.750 12/15/2014 57.500 GLB AVTN HLDG IN 14.000 8/15/2013 27.100 GLOBALSTAR INC 5.750 4/1/2028 49.250 GMX RESOURCES 4.500 5/1/2015 40.000 GMX RESOURCES 5.000 2/1/2013 73.815 GMX RESOURCES 5.000 2/1/2013 70.537 HAWKER BEECHCRAF 8.500 4/1/2015 19.300 HAWKER BEECHCRAF 8.875 4/1/2015 15.500 HAWKER BEECHCRAF 9.750 4/1/2017 3.050 HEWLETT-PACK CO 6.500 7/1/2012 100.010 JAMES RIVER COAL 4.500 12/1/2015 33.500 JPM-CALL07/12 5.850 8/1/2035 100.000 KENDLE INTL INC 3.375 7/15/2012 95.750 KV PHARM 12.000 3/15/2015 32.500 LEHMAN BROS HLDG 0.250 12/8/2012 21.500 LEHMAN BROS HLDG 0.250 12/8/2012 21.500 LEHMAN BROS HLDG 0.250 12/12/2013 21.500 LEHMAN BROS HLDG 0.250 1/26/2014 21.500 LEHMAN BROS HLDG 1.000 12/9/2012 21.500 LEHMAN BROS HLDG 1.000 10/17/2013 21.500 LEHMAN BROS HLDG 1.000 3/29/2014 21.500 LEHMAN BROS HLDG 1.000 8/17/2014 21.500 LEHMAN BROS HLDG 1.000 8/17/2014 22.500 LEHMAN BROS HLDG 1.250 2/6/2014 21.500 LEHMAN BROS HLDG 1.500 3/29/2013 21.500 LEHMAN BROS INC 7.500 8/1/2026 7.550 LIFECARE HOLDING 9.250 8/15/2013 49.000 MANNKIND CORP 3.750 12/15/2013 52.500 MASHANTUCKET PEQ 8.500 11/15/2015 9.250 MASHANTUCKET PEQ 8.500 11/15/2015 9.527 MASHANTUCKET TRB 5.912 9/1/2021 9.250 MF GLOBAL HLDGS 6.250 8/8/2016 41.000 MF GLOBAL LTD 9.000 6/20/2038 38.000 NETWORK EQUIPMNT 7.250 5/15/2014 50.000 NEWPAGE CORP 10.000 5/1/2012 5.050 NGC CORP CAP TR 8.316 6/1/2027 16.000 NSC EQUIP TST H 5.570 7/15/2012 98.873 PATRIOT COAL 3.250 5/31/2013 23.787 PATRIOT COAL 8.250 4/30/2018 35.000 PENSON WORLDWIDE 8.000 6/1/2014 34.155 PENSON WORLDWIDE 12.500 5/15/2017 41.500 PMI GROUP INC 6.000 9/15/2016 22.063 POWERWAVE TECH 3.875 10/1/2027 13.750 POWERWAVE TECH 3.875 10/1/2027 13.140 REAL MEX RESTAUR 14.000 1/1/2013 46.450 REDDY ICE CORP 13.250 11/1/2015 28.200 REDDY ICE HLDNGS 10.500 11/1/2012 55.500 RESIDENTIAL CAP 6.500 4/17/2013 25.750 RESIDENTIAL CAP 6.875 6/30/2015 25.250 SUNTRUST CAPITAL 6.100 12/15/2036 100.000 TERRESTAR NETWOR 6.500 6/15/2014 10.000 TEXAS COMP/TCEH 7.000 3/15/2013 15.700 TEXAS COMP/TCEH 10.250 11/1/2015 24.500 TEXAS COMP/TCEH 10.250 11/1/2015 26.250 TEXAS COMP/TCEH 10.250 11/1/2015 23.500 TEXAS COMP/TCEH 15.000 4/1/2021 33.500 TEXAS COMP/TCEH 15.000 4/1/2021 34.250 THORNBURG MTG 8.000 5/15/2013 7.375 TIMES MIRROR CO 7.250 3/1/2013 31.250 TOUSA INC 9.000 7/1/2010 31.000 TOUSA INC 9.000 7/1/2010 26.500 TRAVELPORT LLC 11.875 9/1/2016 38.250 TRAVELPORT LLC 11.875 9/1/2016 37.125 TRIBUNE CO 5.250 8/15/2015 30.450 TRICO MARINE 3.000 1/15/2027 0.750 TRICO MARINE 3.000 1/15/2027 0.750 USEC INC 3.000 10/1/2014 48.750 VERSO PAPER 11.375 8/1/2016 50.250 WASH MUT BANK FA 5.125 1/15/2015 0.010 WASH MUT BANK FA 5.650 8/15/2014 0.875 WASH MUT BANK FA 6.875 6/15/2011 0.010 WASH MUT BANK NV 6.750 5/20/2036 0.875 WESTERN EXPRESS 12.500 4/15/2015 55.000 ********* 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 ***