/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120802.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, August 2, 2012, Vol. 16, No. 213 Headlines ACCREDITED MEMBERS: To Acquire HOJ in Reverse Triangular Merger ADVANCED ACQUISITIONS: Files Schedules of Assets and Liabilities ALLIED IRISH: Incurs EUR1.1BB Operating Loss in Half-Year 2012 ALLIED SYSTEMS: Utility Providers Barred From Halting Services ALLIED SYSTEMS: Can Pay $1.1-Mil in Critical Vendor Claims ALLIED SYSTEMS: Wants to Employ Richards Layton as Co-Counsel ALON USA: S&P Withdraws 'B+' Rating on $700MM Senior Secured Loan AMERICAN AIRLINES: Grants Adequate Protection to Aircraft Parties AMERICAN AIRLINES: Allows Setoff With Wayne County Airport AMERICAN ARCHITECTURAL: Files Schedules of Assets and Debts AMERICAN ARCHITECTURAL: Section 341(a) Meeting Set for Aug. 7 AMERICAN ARCHITECTURAL: Univest Opposing Continued Cash Use AMERICAN ARCHITECTURAL: U.S. Trustee Forms Creditors Committee AMERICAN CAPITAL: Moody's Affirms 'B2' Corporate Family Rating AMERICAN INT'L: Judicial Files FOIA Suit vs. Fed Reserve Govs AQUILEX LLC: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable AVX CORPORATION: Has $136.8 Mil. Net Loss in June 30 Quarter BILLMYPARENTS INC: CEO's Salary to Grow by $40,000 Per Year CALIFORNIA: Municipal Funds Get Most Demand Since 2007 CASTAIC PARTNERS: Voluntary Chapter 11 Case Summary CCI FUNDING I: Bankr. Court Keeps Jurisdiction in Fall River Suit CHILE MINING: Fails to Achieve Fiscal 2012 Financial Target CISCO BROTHERS: Exits Chapter 11; 5% Recovery for Unsecureds COLT DEFENSE: Moody's Confirms 'Caa1' CFR/PDR; Outlook Negative COMARCO INC: Settles Lawsuit with Contract Manufacturer EDAC COMSTOCK MINING: Has $10MM Loan Commitment from Caterpillar & RIF CONCHO RESOURCES: Moody's Affirms 'Ba3' Corporate Family Rating CUBIC ENERGY: Gets NYSE MKT Approval for Extension of Plan Period CURAXIS PHARMACEUTICALS: Files for Chapter 7 Liquidation DBSI INC: Wavetronix Asks to Name Trustee in RICO Suit DEER PARK: S&P Lowers Stand-alone Credit Profile to 'bb' DELUXE ENTERTAINMENT: S&P Lowers Corporate Credit Rating to 'B-' DEWEY & LEBOEUF: Bonuses Okayed, Use of Discretionary Funds Denied DEWEY & LEBOEUF: Gets 2-Week Cash Lifeline to Aid Ex-Partner Deal DRINKS AMERICAS: Delays Form 10-K for Fiscal 2012 DUNKIN' BRANDS: S&P Affirms 'B+' CCR After $400MM Term Loan Add-On DUTCH LAKE: Voluntary Chapter 11 Case Summary E-MAX GROUP: Case Summary & 20 Largest Unsecured Creditors ELBIT VISION: Reports $519,000 Net Profit in Second Quarter ENERGY CONVERSION: Court Confirms Liquidation Plan FC-GEN OPERATIONS: Moody's Assigns 'B2' CFR/PDR; Outlook Stable FINANCIAL DATA: Voluntary Chapter 11 Case Summary FIVE PONDS: Voluntary Chapter 11 Case Summary FRANKLIN CREDIT: Bankruptcy Court Confirms Prepackaged Plan FREEDOM ENVIRONMENTAL: Posts $390,100 Net Loss in Q1 2012 GEL LLC: Court Says Chapter 22 Cases Filed in Bad Faith GENERAL AUTO: Hires Cassinelli Jackson as Appraiser GENTA INC: Has Go Signal to Start Tesetaxel Clinical Trial GENTA INC: Warns of Possible Bankruptcy Filing GORDIAN MEDICAL: Exclusive Plan Filing Period Extended to Oct. 31 GYNGER L. WILLIAMS: Wells Fargo Has Green Light to Foreclose HARPER BRUSH: U.S. Trustee Appoints 5-Member Creditors Panel HARPER BRUSH: Wants Until Sept. 26 to Use Cash Collateral HARPER BRUSH: Can Use Cash Through December HD SUPPLY: To Launch Track-On Offering of $200-Mil. Senior Notes HRK HOLDINGS: Files Schedules of Assets and Liabilities HRK HOLDINGS: Proposes $125,000 DIP Financing From Arsenal INDIANAPOLIS DOWNS: CEO Objects to Racino's Confirmation Plan INFINITY CUSTOM: Case Summary & 20 Largest Unsecured Creditors INOVA TECHNOLOGY: Incurs $1.2 Million Net Loss in Fiscal 2012 IOWORLDMEDIA INC: Amends Terms & Designations of Preferred Stock HUGHES TELEMATICS: Communications Investors Owns 0% Equity Stake INOVA TECHNOLOGY: MaloneBailey LLP Raises Going Concern Doubt INTERNATIONAL TEXTILE: Inks Debt Swap Agreement with WLR JABIL CIRCUIT: Moody's Rates New $500MM Sr. Unsecured Notes 'Ba1' JABIL CIRCUIT: S&P Rates Senior Unsecured Notes Due 2022 'BB+' JENBELLA PROPERTIES: Case Summary & 2 Unsecured Creditors LEGENDS GAMING: Returns to Ch. 11 to Sell DiamondJack's for $125MM LEVEL 3: Fitch Rates $1.415-Bil. Secured Credit Facility 'BB' LEVITT AND SONS: Court Enforces Plan Injunction LOCATION BASED TECH: Launches New Commercial Business Solutions LONGTERM LODGING: Case Summary & 20 Largest Unsecured Creditors LSP ENERGY: Texas County May Lose $4.4MM If SMEPA Wins Auction MALDEN BROOK: Judge Converts Case to Chapter 7 Proceeding MAMTEK U.S.: Assets From Missouri Sweetener Plant Set for Auction MARATHON OIL: Moody's Issues Summary Credit Opinion MARSH HAWK: Prudential to Pay $232K Under Confirmed Plan MCCLATCHY CO: Reports $26.9 Million Net Income in Second Quarter METOKOTE CORP: Moody's Withdraws Ratings After Loan Repayment MF GLOBAL: Corzine Tie Didn't Compel Gensler Recusal, Review Says MICHAEL LINDSEY: Case Summary & 4 Unsecured Creditors MOHEGAN TRIBAL: Files Statistical Report for Mohegan Sun MONTROSE APARTMENTS: Case Summary and Unsecured Creditor MORGAN'S FOODS: JCP Investment Discloses 15.4% Equity Stake MPG OFFICE: Eight Directors Elected at Annual Meeting MPG OFFICE: Caspian Holds 4.9% of Series A Preferred Shares MSC SOFTWARE: Moody's Withdraws 'B2' Corporate Family Rating MSR RESORT: Judge Hands Down Mixed Rulings in MSR-Hilton Row NELSON EDUCATION: Moody's Lowers Corp. Family Rating to 'Caa1' NEOMEDIA TECHNOLOGIES: Sells $450,000 Debenture to YA Global NESBITT PORTLAND: Eight Embassy Hotels Seek Chapter 11 NET TALK.COM: Issues 1.5 Million Common Shares to Rate Technology NEW LEAF BRANDS: EisnerAmper Raises Going Concern Doubt NOVADEL PHARMA: Effectively Insolvent, May Seek Bankruptcy NUVILEX INC: Delays Form 10-K for Fiscal 2012 OAKFIELD STONE: Case Summary & 20 Largest Unsecured Creditors OPTIMUMBANK HOLDINGS: Incurs $800,000 Net Loss in 2nd Quarter OZZIR PROPERTIES: Case Summary & 13 Unsecured Creditors PACIFIC RIM MINING: Posts US$1.8-Mil. Net Loss in Fiscal 2012 PBJT935927 2008: Case Summary & 4 Unsecured Creditors PEREGRINE FIN'L: Trustee to Set Foreign-Exchange Claims Procedures PHARMOS CORP: Incurs $382,878 Net Loss in Second Quarter PHILADELPHIA ORCHESTRA: Officially Emerges From Chapter 11 POSITIVEID CORP: Amends Form S-1 Registration Statement PMI GROUP: CFO Donald Lofe Quits to Work for Another Company RAAM GLOBAL: S&P Affirms 'B-' Corp. Credit Rating; Outlook Stable RADIOSHACK CORP: Has 80% Chance of Default, Bloomberg Says READER'S DIGEST: S&P Puts 'CCC+' CCR on Watch Neg on Weak Earnings REDPRAIRIE CORP: $20MM Debt Upsize No Impact on S&P's 'B+' CCR RESIDENTIAL CAPITAL: Court OKs Scope of Examiner Investigation RESIDENTIAL CAPITAL: Nov. 12 Settlement Deadline for RMBS Trustees RESIDENTIAL CAPITAL: Can Continue Loss Mitigation Programs RESIDENTIAL CAPITAL: To Process Mortgage Loan Commitments RESIDENTIAL CAPITAL: Has Deloitte & Touche as Auditor SCOTTO RESTAURANT: Suit Challenging Lenders' Liens Goes to Trial SAGAMORE PARTNERS: Court Extends Solicitation Period for 3rd Time SAGAMORE PARTNERS: Can Access Cash Collateral Until Aug. 23 SEVEN SEAS: S&P Rates $340MM First-Lien Sr. Credit Facilities BB- SFRP, LLC: Voluntary Chapter 11 Case Summary SHAW GROUP: Moody's Reviews 'Ba1' CFR/PDR for Downgrade SHERRILL MANUFACTURING: Great American Holds Auction SP NEWSPRINT: Wins Court Approval for Aug. 17 Auction STANDARD PACIFIC: Fitch Rates $150MM Senior Notes Offering 'B-' STANDARD PACIFIC: Moody's Rates $150MM Senior Note Offering 'B3' STELLAR GT TIC: The Georgian Remains Under Receiver's Care SUPERMEDIA INC: Reports $64 Million Net Income in Second Quarter THORNBURG MORTGAGE: Objection to Case Trustee's Fees Bid Extended TXCO RESOURCES: Court Enters $15.9MM Judgment on Trade Secrets U.S. POSTAL: Declines to Make $5.5-Bil. Prefunding for Retirees UNI-PIXEL INC: Incurs $2 Million Net Loss in Second Quarter VANN'S INC: CEO Seeks Financing for Possible Chapter 11 VITESSE SEMICONDUCTOR: Raging Buys $4 Million Debenture WALL STREET SYSTEMS: S&P Alters 'B' Rating Outlook to Positive WINDSOR CAPITAL: Sends 8 Embassy Suites Hotels to Chapter 11 WPCS INTERNATIONAL: J.H. Cohn Raises Going Concern Doubt WOUND MANAGEMENT: Amends Forbearance Agreement with Juventas * Moody's Says Fewer States to Issue Cash Flow Notes * CFPB and DOE Issue Report on Student Loans and Bankruptcy * Creditors May Take Loss in Clearinghouse Failure * Recent Small-Dollar & Individual Chapter 11 Filings ********* ACCREDITED MEMBERS: To Acquire HOJ in Reverse Triangular Merger --------------------------------------------------------------- Accredited Members Holding Corporation entered into an Agreement and Plan of Merger and Reorganization with Hangover Joe's, Inc., whereby the Company would acquire HOJ in a reverse triangular merger. On July 25, 2012, the parties closed the Acquisition and a Statement of Merger was filed and effective with the Colorado Secretary of State on that day. Upon closing the Acquisition, the Company issued a total number of common shares to the HOJ shareholders in exchange for all of their ownership interests in HOJ such that they now own approximately 69% of the Company. The current shareholders of the Company would own approximately 31% of the Company after the closing of the Acquisition. The Merger Agreement further provided that, within five business days after the closing of the Acquisition the Company would sell to Accredited Members Acquisition Corporation all of the equity interests in three of the Company's subsidiaries, being Accredited Members, Inc., AMHC Managed Services, Inc. and World Wide Premium Packers, Inc. Buyer would pay $10,000 and assume all liabilities related to the Subsidiaries in exchange for all of the shares in the Subsidiaries owned by the Company. The parties closed the Sale on July 27, 2012. On July 25, 2012, pursuant to the terms of the Merger Agreement, David Lavigne submitted his resignation as a director and the Chief Financial Officer of the Company. On July 25, 2012, pursuant to the terms of the Merger Agreement (a) Michael Jaynes was appointed as a director and the President and Chief Executive Officer of the Company, (b) Michael Malm was appointed as a director of the Company, and (c) J.W. Roth was appointed as the Treasurer of the Board, Mr. Roth continues in his capacity as Secretary and Chairman of the Company. Hangover Joe's has obtained shareholder approval for a transaction with Accredited Members Holding Corporation. As part of the transaction, Hangover Joe's will trade under the ACCM ticker symbol until a new symbol is assigned. The name change of AMHC to Hangover Joe's Holding Corporation, and the new trading symbol, are expected to be in effect prior to the end of July. "This is a tremendous opportunity for us to continue our exponential growth with the support of new investors and the guidance and expertise of Accredited Members behind us," said Hangover Joe's co-founder Mike Jaynes. "Hangover Joe's has become an international sensation through our partnership with Warner Bros. Pictures and new distribution deals in Canada, Australia and New Zealand. We're eager and ready to ramp up and expand our reach both around the globe and with new distributors and retail outlets here in the U.S." "The merger just makes good business sense, giving us the opportunity to grow the Hangover Joe's brand both domestically and internationally in any number of unique and exciting ways," said co-founder Shawn Adamson. Annual Meeting Results At the annual meeting of shareholders on July 24, 2012, the Company's shareholders approved two amendments to the Company's Articles of Incorporation. The Company filed each of the amendments to its Articles of Incorporation with the Colorado Secretary of State to effect such amendments. The two amendments accomplished the following: 1. Increased the Company's authorized capital to 150,000,000 shares of common stock and 10,000,000 shares of preferred stock. Filed and effective July 24, 2012. 2. Change the name of the Company from Accredited Members Holding Corporation to a name approved by the Company's directors. The designation of the Company's name by the directors was approved on July 24, 2012, to be filed as "Hangover Joe's Holding Corporation". This amendment was filed July 25, 2012, and was effective as of July 30, 2012. The shareholders elected J.W. Roth and David Lavigne to serve on the Company's Board of Directors. The shareholders also approved the sale of three subsidiaries in a related party transaction, which may constitute the sale of substantially all of the Company's assets and approved the Company's 2012 Stock Option Plan. The shareholders ratified GHP Horwath, P.C., as the Company's independent registered public accounting firm. A copy of the Form 8-K is available for free at: http://is.gd/GjWT20 About Accredited Members Colorado Springs, Colo.-based Accredited Members Holding Corporation currently provides various services and products both directly and through its subsidiary corporations Accredited Members, Inc. ("AMI"), and AMHC Managed Services ("AMMS"), which provides management services to third parties including services typically provided by executive level personnel on a fix-contract basis. Through August 2011, the Company provided services through its subsidiary World Wide Premium Packers, Inc. ("WWPP"). The Company's balance sheet at March 31, 2012, showed $2.11 million in total assets, $2.15 million in total liabilities, and a stockholders' deficit of $40,790. As reported in the TCR on April 9, 2012, GHP Horwath, P.C., in Denver, Colorado, expressed substantial doubt about Accredited Members' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company reported a net loss of approximately $3,461,000 and used net cash in operating activities of approximately $2,125,000 in 2011, and has an accumulated deficit of approximately $7,570,000 at Dec. 31, 2011. ADVANCED ACQUISITIONS: Files Schedules of Assets and Liabilities ---------------------------------------------------------------- Advanced Acquisitions, LLC, filed with the Bankruptcy Court for the Eastern District of Pennsylvania its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $3,871,819 B. Personal Property $3,133 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $2,912,338 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $346 ----------- ----------- TOTAL $3,874,952 $2,912,684 A full text copy of the schedules of assets and liabilities is available free at: http://bankrupt.com/misc/ADVANCED_ACQUISITIONS_sal.pdf About American Architectural and Advanced Acquisitions Bensalem, Pennsylvania-based American Architectural, Inc., and Advanced Acquisitions, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 12-15818 and 12-15819) on June 15, 2012. Judge Magdeline D. Coleman oversees the case. Maschmeyer Karalis P.C. serves as the Debtors' general bankruptcy counsel. Douglas Ziegler LLC serves as accountants. American Architectural provides quality building enclosures. Advanced Acquisitions is the beneficial owner of a 98,000 square feet facility in Bensalem, which houses AAI's offices and manufacturing plant. AAI has 49 employees. AAI completed work on many high profile projects in New York including, the AOL/Time Warner facility at Columbus Circle, the Lincoln Center, the Museum of Arts and Design, the New York Historical Society, and the JetBlue Terminal 5 at JFK International Airport, to name just a few of noteworthy projects. Recently, AAI completed the east coast's largest canopy for Goldman Sachs and has recently closed its fourth major World Trade Center rebuild project. The petitions were signed by John Melching, president and CEO. ALLIED IRISH: Incurs EUR1.1BB Operating Loss in Half-Year 2012 -------------------------------------------------------------- Allied Irish Banks p.l.c. announced preliminary interim results for the half year ended June 30, 2012. The Company reported operating loss of EUR1.1 billion for the half year of 2012, compared with an operating loss of EUR3.0 billion for the half year of 2011. The performance reflected a reduction in the credit provision charge, although provisions still remained at a high level. Provisions for impairments of loans and receivables reduced from EUR3.0 billion in the half-year to June 2011 to EUR0.9 billion in the half-year to June 2012, a level which reflected the continued weak economic environment. Net interest income (including ELG costs) was EUR568 million, a decrease of EUR36 million on the first half of 2011 David Duffy, AIB Chief Executive, said, "The half year results for the bank are broadly in line with our internal expectations and we are encouraged by the sharp decline in the levels of provisions relative to previous periods. "Ultimately, our plan is to return to sustainable profitability by 2014. Achieving this will be key to our ambition to attract private investment and return value to the taxpayer as principal shareholder." "AIB will also continue to have the largest distribution reach in the country. Our mutually beneficial agreement with An Post is designed to minimise disruption to our customers." A copy of the AIB Group preliminary results can be found at: http://bankrupt.com/misc/ALLIEDjune30.pdf A copy of the press release is available for free at: http://is.gd/eOKIoE About Allied Irish Banks Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a major commercial bank based in Ireland. It has an extensive branch network across the country, a head office in Dublin and a capital markets operation based in the International Financial Services Centre in Dublin. AIB also has retail and corporate businesses in the UK, offices in Europe and a subsidiary company in the Isle of Man and Jersey (Channel Islands). Since the onset of the global and Irish financial crisis, AIB's relationship with the Irish Government has changed significantly. As at Dec. 31, 2010, the Government, through the National Pension Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary shares of the Company (the share of the voting rights at shareholders' general meetings), 10,489,899,564 convertible non- voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On April 8, 2011, the NPRFC converted the total outstanding amount of CNV shares into 10,489,899,564 ordinary shares of AIB, thereby increasing its holding to 92.8% of the ordinary share capital. In addition to its shareholders' interests, the Government's relationship with AIB is reflected through formal and informal oversight by the Minister and the Department of Finance and the Central Bank of Ireland, representation on the Board of Directors (three non-executive directors are Government nominees), participation in NAMA, and otherwise. The Company reported a loss of EUR2.29 billion in 2011, a loss of EUR10.16 billion in 2010, and a loss of EUR2.33 billion in 2009. Allied Irish's consolidated statement of financial position for the year ended Dec. 31, 2011, showed EUR136.65 billion in total assets, EUR122.18 billion in total liabilities and EUR14.46 billion in shareholders' equity. ALLIED SYSTEMS: Utility Providers Barred From Halting Services -------------------------------------------------------------- Judge Christopher Sontchi of the U.S. Bankruptcy Court for the Northern District of Georgia has signed off on an order determining adequate assurance of payment for future utility services filed by Allied Systems Holdings Inc. and its affiliates. As adequate assurance, the Debtors will deposit in an adequate assurance deposit account that will be held for the benefit of the utility providers. In exchange, the utility providers are prohibited from altering or refusing service for unpaid prepetition charges and are deemed to receive adequate assurance of payment. 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. An official committee of unsecured creditors has been appointed in the Chapter 11 cases of Allied Systems Holdings Inc. and Allied Systems Ltd. The Committee An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. ALLIED SYSTEMS: Can Pay $1.1-Mil in Critical Vendor Claims ---------------------------------------------------------- Judge Christopher Sontchi of the U.S. Bankruptcy Court for the Northern District of Georgia has authorized Allied Systems Holdings Inc. and its affiliates to pay critical vendor claims in an amount not to exceed a total of $1.1 million. Each of the financial institutions where the Debtors maintain their accounts are authorized to honor checks presented for payment related to critical vendor claims. Judge Sontchi further orders that if a critical vendor accepts the adequate assurance payment and then fails to extend credit on the same terms as those prepetition, the payment will be deemed unauthorized postpetition transfer which will be recoverable by the Debtors. 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. An official committee of unsecured creditors has been appointed in the Chapter 11 cases of Allied Systems Holdings Inc. and Allied Systems Ltd. The Committee An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. ALLIED SYSTEMS: Wants to Employ Richards Layton as Co-Counsel ------------------------------------------------------------- Al1ied Systems Holdings Inc. and its affiliates ask the Bankruptcy Court for authorization to employ Richards, Layton & Finger, P.A., as its bankruptcy co-counsel nunc pro tunc to June 10, 2012, to render these professional services: A. prepare all necessary petitions, motions, applications, orders, reports, and papers necessary to commence the Chapter 11 Cases; B. advise the Debtors of their rights, powers, and duties as a debtor and debtor-in-possession under chapter 11 of the Bankruptcy Code; C. prepare on behalf of the Debtors all motions, applications, answers, orders, reports, and papers in connection with the administration of the Debtors' estate; D. take action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of actions commenced against the Debtors in the Chapter 11 Cases, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors; E. assist the Debtors with the sale of any of their assets pursuant to Section 363 of the Bankruptcy Code; F. prepare the Debtors' disclosure statement and any related motions, pleadings, or other documents necessary to solicit votes on the Debtors' plan of reorganization; G. prepare the Debtors' plan of reorganization; H. prosecute on behalf of the Debtors, the proposed plan of reorganization and seeking approval of all transactions contemplated therein and in any amendments thereto; and I. perform all other necessary legal services in connection with the Chapter 11 Cases. The RL&F principal professionals and paraprofessionals designated to represent the Debtors and their current standard hourly rates are: Mark D. Collins $750 per hour Chris Samis $375 per hour Marisa A. Terranova $325 per hour Janel Gates $200 per hour Prior to the Petition Date, the Debtors paid RL&F a total retainer of $85,000 in connection with and in contemplation of the Chapter 11 Cases. The Debtors propose that the retainer paid to RL&F and not expended for prepetition services and disbursements be treated as an evergreen retainer to be held by RL&F as security throughout the Chapter 11 Cases until RL&F's fees and expenses are awarded by final order and payable to RL&F. Mark D. Collins, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. 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. An official committee of unsecured creditors has been appointed in the Chapter 11 cases of Allied Systems Holdings Inc. and Allied Systems Ltd. The Committee An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. ALON USA: S&P Withdraws 'B+' Rating on $700MM Senior Secured Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B+' issue rating on Alon USA Energy Inc.'s $700 million senior secured term loan. "At the same time, we affirmed our 'B' corporate credit ratings on Alon and Alon Refining Krotz Springs Inc. (ARKS) and revised the outlooks to stable from negative. Alon's senior secured issue rating is 'B+' with a '2' recovery rating, indicating our expectation of a substantial (70% to 90%) recovery if a payment default occurs. We raised ARKS' senior secured issue rating to 'B+' from 'B' and revised our recovery rating to '2' from '3', also indicating our expectation of a substantial (70% to 90%) recovery if a payment default occurs," S&P said. "The rating on Alon reflects its 'vulnerable' business risk profile and its 'aggressive' financial risk profile. Standard & Poor's takes a consolidated analytical approach to Alon, including results from the Krotz Springs refinery, and its asphalt and retail businesses. The ratings also incorporate Alon Israel Oil Co. Ltd.'s support for Alon," S&P said. "The company faces challenges as a relatively small, independent oil refining and marketing company with limited diversity and complexity, and a high degree of financial and operating leverage," said Standard & Poor's credit analyst Mark Habib. "The company participates in a competitive refining industry that has unpredictable and cyclical profitability and high fixed-cost requirements for equipment and compliance with environmental regulations. The refining industry is extremely volatile and supply-demand economics of crude oil supply and product demand can cause large swings in industry profitability in short periods of time. Thus, exposure to downtime, planned or unplanned, in profitable industry conditions is a disadvantage," S&P said. "The stable outlook reflects our expectation that Alon's financial measures will improve, with debt to EBITDA leverage of about 2.5x over the next two years as a result of debt repayment and increased EBITDA driven by access to discounted crude supply. We could lower the rating if the company fails to repay additional debt, operating problems occur at the refinery business, or lower margins lead us to expect sustained debt to EBITDA approaching 4x. We could also lower the rating if Alon does not refinance its $425 million term loan due in 2013 this fall and we believe liquidity will be tight. Given the inherent volatility and unpredictability of the refining industry, an upgrade is unlikely at this time. However, we could consider it if the company can establish a track record of strong operational performance and if we expect a combination of lower debt and mid-cycle margins that will yield a sustainable debt to EBITDA ratio below 2x," S&P said. AMERICAN AIRLINES: Grants Adequate Protection to Aircraft Parties ----------------------------------------------------------------- AMR Corp. and its affiliates and U.S. Bank Trust National Association, not in its individual capacity but solely as Trustee and Security Agent, for the benefit of the noteholders under that certain (a) Indenture and Security Agreement for the Senior Secured Notes Due 2016, dated as of July 31, 2009 and (b) Aircraft Security Agreement dated as of July 31, 2009, solely with respect to the aircraft finance transactions relating to aircraft bearing FAA REG. NO. -- N909AN -- N910AN -- N912AN -- N914AN -- N915AN -- N916AN -- N917AN -- N918AN -- N919AN -- N399AN -- N778AN -- N779AN, entered into a stipulation concerning adequate protection. The Aircraft Finance Party, who has rights and interests in airframes, engines, related equipment and/or other equipment, documents and records with respect to the Transactions, has agreed, subject to certain terms and conditions, not to file motions for adequate protection pursuant to sections 361, 362, 363 or 364 of the Bankruptcy Code at this time. In exchange for the Aircraft Finance Party's forbearance, the Debtors have agreed that any motion by the Aircraft Finance Party for adequate protection, if subsequently filed, will be treated as if filed on the Petition Date. For the avoidance of doubt, whether or not the Forbearance Termination Date has occurred, the Aircraft Finance Party reserves its right to file an objection to any motion filed in the Debtors' chapter 11 cases, including, without limitation, those seeking authority (i) pursuant to section 363 of the Bankruptcy Code, to sell any Aircraft Equipment in which such Aircraft Finance Party holds an Aircraft Interest, or (ii) pursuant to section 365 of the Bankruptcy Code to reject or to assume and assign to a third party an unexpired lease for any Aircraft Equipment in which such Aircraft Finance Party holds an Aircraft Interest; and in each such instance, as appropriate, to raise adequate protection rights as part of such objection. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Allows Setoff With Wayne County Airport ---------------------------------------------------------- AMR Corp. and its affiliates and Wayne County Airport Authority are parties to an Airport Use and Lease Agreement, dated July 31, 2008. Pursuant to the Airport Agreement, American Airlines pays the Authority an estimated monthly charge of approximately $500,000, which includes fixed and variable rent and landing fees each month for the use of various facilities at Detroit Metropolitan Wayne County Airport and services provided by the Authority at DTW. At the end of each fiscal year, the Authority conducts a reconciliation of American Airlines' actual obligations under the Airport Agreement for that year and either refunds any amounts paid by American Airlines in excess of American Airlines' actual obligations or requests payment from American Airlines for any deficiency. As of the Petition Date, American Airlines owes the Authority $298,610 on account of the Airport Agreement for the use of various facilities at DTW and for services provided by the Authority prior to the Petition Date. However, pursuant to a recent Reconciliation, the Authority has determined that a refund of $448,600 is due to American Airlines for the prepetition period under the Airport Agreement. The Parties have agreed that, pursuant to section 553(a) of the Bankruptcy Code, the Authority is permitted to set off the amount it is owed on account of the Authority Prepetition Claim against the Reconciliation Amount in full satisfaction of the Authority Prepetition Claim. The Parties have further agreed that, after the Setoff, there will be $149,990 of the Reconciliation Amount due and owing to American Airlines, which shall be paid to the Debtors within 10 business days after entry of a final, non- appealable order of the Court approving the Stipulation. The Parties stipulate and agree that upon the Effective Date, the automatic stay pursuant to section 362(a) of the Bankruptcy Code will be modified solely to the limited extent necessary to effectuate the Setoff. For the avoidance of any doubt, modification of the Automatic Stay permits the Authority to apply $448,600 in refunds due to American Airlines against American Airlines' obligations on account of the Airport Agreement for the use of various facilities at DTW and for services provided by the Authority prior to the Petition Date in the aggregate amount of $298,610. Except for this, the provisions of the Automatic Stay, including, without limitation, those provisions prohibiting any act to collect, assess or recover a claim that arose before the commencement of the Debtors' chapter 11 cases from the Debtors and/or assets or property of the Debtors' estates will remain in full force and effect. The Parties agree that, after effectuating the Setoff, the Authority Prepetition Claim will be satisfied. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN ARCHITECTURAL: Files Schedules of Assets and Debts ----------------------------------------------------------- American Architectural, Inc., filed with the Bankruptcy Court for the Eastern District of Pennsylvania its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $9,754,802 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $5,381,231 E. Creditors Holding Unsecured Priority Claims $2,369,103 F. Creditors Holding Unsecured Non-priority Claims $4,623,989 ----------- ----------- TOTAL $9,754,802 $12,374,324 A full text copy of the schedules of assets and liabilities is available free at: http://bankrupt.com/misc/AMERICAN_ARCHITECTURAL_sal.pdf About American Architectural and Advanced Acquisitions Bensalem, Pennsylvania-based American Architectural, Inc., and Advanced Acquisitions, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 12-15818 and 12-15819) on June 15, 2012. Judge Magdeline D. Coleman oversees the case. Maschmeyer Karalis P.C. serves as the Debtors' general bankruptcy counsel. Douglas Ziegler LLC serves as accountants. American Architectural provides quality building enclosures. Advanced Acquisitions is the beneficial owner of a 98,000 square feet facility in Bensalem, which houses AAI's offices and manufacturing plant. AAI has 49 employees. AAI completed work on many high profile projects in New York including, the AOL/Time Warner facility at Columbus Circle, the Lincoln Center, the Museum of Arts and Design, the New York Historical Society, and the JetBlue Terminal 5 at JFK International Airport, to name just a few of noteworthy projects. Recently, AAI completed the east coast's largest canopy for Goldman Sachs and has recently closed its fourth major World Trade Center rebuild project. The petitions were signed by John Melching, president and CEO. AMERICAN ARCHITECTURAL: Section 341(a) Meeting Set for Aug. 7 ------------------------------------------------------------- The U.S. Trustee for Region 13 will convene a meeting of creditors of American Architectural, Inc., on Aug. 7, 2011, at 2:00 p.m. 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 American Architectural and Advanced Acquisitions Bensalem, Pennsylvania-based American Architectural, Inc., and Advanced Acquisitions, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 12-15818 and 12-15819) on June 15, 2012. Judge Magdeline D. Coleman oversees the case. Maschmeyer Karalis P.C. serves as the Debtors' general bankruptcy counsel. Douglas Ziegler LLC serves as accountants. American Architectural provides quality building enclosures. Advanced Acquisitions is the beneficial owner of a 98,000 square feet facility in Bensalem, which houses AAI's offices and manufacturing plant. AAI has 49 employees. AAI completed work on many high profile projects in New York including, the AOL/Time Warner facility at Columbus Circle, the Lincoln Center, the Museum of Arts and Design, the New York Historical Society, and the JetBlue Terminal 5 at JFK International Airport, to name just a few of noteworthy projects. Recently, AAI completed the east coast's largest canopy for Goldman Sachs and has recently closed its fourth major World Trade Center rebuild project. AAI scheduled $9,754,802 in assets and $12,374,324 in liabilities. Advanced Acquisitions scheduled $3,874,952 in assets and $2,912,684 in liabilities. The petitions were signed by John Melching, president and CEO. AMERICAN ARCHITECTURAL: Univest Opposing Continued Cash Use ----------------------------------------------------------- American Architectural, Inc., and Advanced Acquisitions, LLC, are slated to return to the Bankruptcy Court on Aug. 15 for a hearing on their request to use cash collateral. The Debtors are expected to spar with lender Univest Bank and Trust Company, which has lodged objections to American Architectural's continued use of its cash collateral. Prepetition, Univest Bank entered into various loan agreements with AAI wherein Univest agreed to extend financial accommodation to AII. As of Petition Date, the aggregate outstanding balance under the AII Loans was $5,305,520. Advanced Acquisitions is a guarantor of the AII Loans. The Debtors each filed motions to use cash collateral. Before the hearing on the motion, Univest agreed to the Debtor's use of Cash Collateral in reliance upon the budgets given by the Debtor to Univest for the period in which Cash Collateral was to be used. The Debtors' motion was granted and was given authority to use cash collateral through July 22, 2012, conditioned upon Univest's receipt of adequate protection payments as provided in the Debtors' budget and the Debtors' adherence to the payment set forth in the budget. According to Univest, AAI failed to abide by the terms of the cash collateral order. AAI made no payment to Univest as adequate protection for the use of the cash collateral, in contravention of the express provisions of the Order and the budget. The proposed budget also did not bear absolute resemblance to the Debtors' actual receipts and expenditures during the time period covered by the budget. The budget was completely devoid of any realistic assessment of the Debtors' financial position. Univest complains that the Debtors' budget for the cash collateral period going forward does not provide adequate protection for the use of the AAI Cash Collateral. The round number listed on the budget indicated that the budget may be more of a "guesstimate" than a carefully prepared, detailed analysis of AAI's financial condition for the time period covered. Univest requests that the Court enter an order denying AAI's continued use of cash collateral. About American Architectural and Advanced Acquisitions Bensalem, Pennsylvania-based American Architectural, Inc., and Advanced Acquisitions, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 12-15818 and 12-15819) on June 15, 2012. Judge Magdeline D. Coleman oversees the case. Maschmeyer Karalis P.C. serves as the Debtors' general bankruptcy counsel. Douglas Ziegler LLC serves as accountants. American Architectural provides quality building enclosures. Advanced Acquisitions is the beneficial owner of a 98,000 square feet facility in Bensalem, which houses AAI's offices and manufacturing plant. AAI has 49 employees. AAI completed work on many high profile projects in New York including, the AOL/Time Warner facility at Columbus Circle, the Lincoln Center, the Museum of Arts and Design, the New York Historical Society, and the JetBlue Terminal 5 at JFK International Airport, to name just a few of noteworthy projects. Recently, AAI completed the east coast's largest canopy for Goldman Sachs and has recently closed its fourth major World Trade Center rebuild project. AAI scheduled $9,754,802 in assets and $12,374,324 in liabilities. Advanced Acquisitions scheduled $3,874,952 in assets and $2,912,684 in liabilities. The petitions were signed by John Melching, president and CEO. AMERICAN ARCHITECTURAL: U.S. Trustee Forms Creditors Committee -------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, pursuant to 11 U.S.C. Sec. 1102(a) and (b), appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of based American Architectural, Inc. The Creditors Committee members are: 1. O'Neal Flat Rolled Metals, LLC. 1229 South Fulton Avenue Brighton, CO 80601 Attn: Cyndi Wallin Corporate Credit Manager Tel: (303) 655-4534 Fax: (303) 655-4634 E-mail: cyndi.wallin@ofrmetals.com 2. Major Tool & Machine, Inc. 1458 East 19th Street Indianapolis, IN 46218 Attn: James C. Flanagan Vice Chairman Tel: (317) 917-2601 Fax: (317) 634-9420 E-mail: jcflanagan@majortool.com 3. Jackson Installation, LLC 8008 Route 130 North Building A, Suite 210 Delran, NJ 08075 Attn: Michael C. Jackson Managing Member Tel: (856) 255-5480 Fax: (856) 255-5473 E-mail: mjackson@jacksoninstall.com About American Architectural and Advanced Acquisitions Bensalem, Pennsylvania-based American Architectural, Inc., and Advanced Acquisitions, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 12-15818 and 12-15819) on June 15, 2012. Judge Magdeline D. Coleman oversees the case. Maschmeyer Karalis P.C. serves as the Debtors' general bankruptcy counsel. Douglas Ziegler LLC serves as accountants. American Architectural provides quality building enclosures. Advanced Acquisitions is the beneficial owner of a 98,000 square feet facility in Bensalem, which houses AAI's offices and manufacturing plant. AAI has 49 employees. AAI completed work on many high profile projects in New York including, the AOL/Time Warner facility at Columbus Circle, the Lincoln Center, the Museum of Arts and Design, the New York Historical Society, and the JetBlue Terminal 5 at JFK International Airport, to name just a few of noteworthy projects. Recently, AAI completed the east coast's largest canopy for Goldman Sachs and has recently closed its fourth major World Trade Center rebuild project. AAI scheduled $9,754,802 in assets and $12,374,324 in liabilities. Advanced Acquisitions scheduled $3,874,952 in assets and $2,912,684 in liabilities. The petitions were signed by John Melching, president and CEO. AMERICAN CAPITAL: Moody's Affirms 'B2' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service affirmed American Capital, Ltd.'s B2 Corporate Family Rating ("CFR") and the B2 Senior Unsecured rating on the debt currently issued by the company which is expected to be repaid on August 1, 2012. Moody's also expects to assign a B2 rating to American Capital's proposed $600 million new Senior Secured Term Loan Facility. The ratings outlook for American Capital remains stable. Ratings Rationale American Capital's ratings are supported by its expertise and scale in investing in private middle market companies. Additionally, these ratings are supported by the company's diversified (both by geography and business sector) and granular investment portfolio. Also, American Capital benefits from its substantial equity base as mandated by business development company ("BDC") regulations. American Capital's high asset/debt coverage ratio provides significant support to its ability to repay its debt obligations. Moody's also stated that the refinancing of the company's existing senior secured debt (excluding securitization debt) will lengthen American Capital's debt maturity profile and will also improve operating earnings through lower interest cost on the new debt. Offsetting these positives factors are the inherent risks of the BDC business model which carries significant event risk in times of economic stress. Moody's noted that similar to other BDCs, American Capital's business model includes portfolio investments that are highly levered and illiquid, and that are fair valued each quarter which can result in volatile investment values (Level III assets). Moody's also stated that the vast majority of American Capital's investments are subordinated debt, mezzanine, and equity securities whose valuations are more volatile and less liquid than those of other BDCs that invest primarily in senior debt securities within a portfolio company's capital structure. Moody's maintained the stable outlook for American Capital's ratings reflecting the stabilization of the company's investment portfolio since the company conducted a distressed debt exchange in fiscal year 2010. The last rating action on American Capital was on June 24, 2010 when Moody's confirmed American Capital's B2 CFR and B2 Senior Unsecured ratings and changed the outlook to stable. The principal methodology used in this rating was Finance Company Global Rating Methodology published in March 2012. AMERICAN INT'L: Judicial Files FOIA Suit vs. Fed Reserve Govs ------------------------------------------------------------- Judicial Watch disclosed that on July 18, 2012, it filed a Freedom of Information Act (FOIA) lawsuit (judicial watch v. board of governors of the federal reserve system (no. 1:12-cv-01175)) against the Board of Governors of the Federal Reserve System (the Board) seeking records related to the government bailout of American International Group, Inc. (AIG). Judicial Watch filed its lawsuit on behalf of Vern McKinley, a former employee of the Board of Governors of the Federal Reserve and the Federal Deposit Insurance Corporation and author of Financing Failure: A Century of Bailouts. Judicial Watch seeks the following records pursuant to its original May 15, 2012, FOIA request: "Copies of any and all records of the Board located at the [Federal Reserve Bank of New York] concerning, regarding, or relating to the proposition that 'the disorderly failure of AIG was likely to have a systemic effect on financial markets that were already experiencing a significant level of fragility.' Such records include, but are not limited to... detailed meeting minutes, meeting notes, supporting memoranda, communications, and electronic messages and attachments." The Board acknowledged receiving Judicial Watch's request on May 15, 2012, and requested a 10-day extension to respond. A response was due by June 27, 2012. However, as of the date of Judicial Watch's lawsuit, the Board failed to respond in accordance with FOIA law. On Sept. 16, 2008, the Board decided to extend an initial $85 billion loan to insurance giant AIG, which it claimed "faced the imminent prospect of declaring bankruptcy." According to minutes from the September 16, 2008, meeting: "Board members agreed that the disorderly failure of AIG was likely to have a systemic effect on financial markets that were already experiencing a significant level of fragility and that the best alternative available was to lend to AIG to assist it in meeting its obligations in an orderly manner as they came due... " According to CNN, the total cost committed to AIG was $182 billion. The Board's contention -- that the failure of major corporations would spread a contagion throughout the financial system -- has been used repeatedly to justify the bailouts. However, to date, the government has no evidence to support this contention. Judicial Watch, meanwhile, has launched a comprehensive investigation to determine under what legal authorities and lawful rationales the federal government initiated the Wall Street bailouts and has filed a number of lawsuits on behalf of Mr. McKinley. "We are now trillions of taxpayer dollars into these financial bailouts and the government refuses to answer basic questions about the government's radically intrusive response to the financial crisis," said Judicial Watch President Tom Fitton. "The American people are tired of the Obama administration's stonewalling and they want answers. The Fed should obey Freedom of Information Act law and respond immediately." With respect to the AIG bailout, Judicial Watch previously uncovered documents showing that the government did not expect taxpayers to recover their "investment" in AIG. For example, Judicial Watch uncovered a series of presentation slides detailing the terms of the AIG bailout. Included among the items is a slide entitled "Investment Considerations." On the slide the words, "The prospects of recovery of capital and a return on the equity investment to the taxpayer are highly speculative" are crossed out by hand. On Feb. 25, 2010, Judicial Watch also filed a FOIA lawsuit against the Obama Treasury Department to obtain documents regarding meetings involving Kenneth Feinberg, special master for executive compensation under the Troubled Asset Relief Program (TARP); AIG Chairman Robert Benmosche; and New York Federal Reserve Bank President William Dudley. Feinberg, also known as the Obama administration's "pay czar," is the federal official responsible for setting compensation guidelines for the seven largest firms, including AIG, using funds from TARP. In March 2009, AIG disbursed $165 million in taxpayer-funded TARP funds to its top executives, prompting a massive public backlash. Obama officials reportedly lobbied Congress to insert legislative language allowing the AIG bonus payments and then apparently lied about their knowledge of the payment scheme. As then-head of the New York Federal Reserve, current Treasury Secretary Timothy Geithner helped craft the original AIG deal. About AIG American International Group, Inc. -- http://www.aig.com/-- is an international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services around the world. AIG common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. At the height of the 2008 financial crisis, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. AIG almost collapsed under the weight of bad bets it made insuring mortgage-backed securities. The Company, however, was bailed out by the Federal Reserve, but even after an initial infusion of $85 billion, losses continued to grow. The later rescue packages brought the total to $182 billion, making it the biggest federal bailout in U.S. history. AIG sold off a number of its businesses and other assets to pay down loans received from the U.S. government. AQUILEX LLC: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating and stable outlook to Norcross, Georgia-based Aquilex LLC. "At the same time, we assigned our 'B' issue rating and '3' recovery rating to the company's term loan," S&P said. "The ratings reflect the company's highly leveraged financial risk profile, as the company is controlled by equity sponsor Centerbridge Partners L.P.," said credit analyst James Siahaan. "They also reflect the company's weak business risk profile, characterized by its narrow scope of operations, high exposure to cyclical energy end-markets and the potential of project deferrals, as well as below average EBITDA margins. Partially offsetting these weaknesses are Aquilex's leading market position in its niche markets, its largely variable cost structure, and its long-term customer relationships." "The rating outlook is stable. Through the out-of-court financial restructuring, Aquilex's book debt has been reduced substantially, and the lower interest expense is likely to enable Aquilex to service its obligations and achieve credit metrics that are consistent with the ratings. Nevertheless, we could lower the rating if operating performance weakens and liquidity becomes constrained to the point that EBITDA headroom under financial covenants declines to less than 15%. This could occur with a simultaneous 10% decline from trailing-12-month revenue and a 3.4 percentage-point decline in EBITDA margin, caused by delays or cancellations of cleanouts and turnarounds at refinery and petrochemical customers along with continued weakness in coal- fired power generation. We could raise the rating modestly if company continually exceeds a 15% FFO/debt ratio. However, to consider an upgrade, we would also need to obtain greater clarity regarding future financial policies, and those policies would need to be consistent with those representative of higher ratings," S&P said. AVX CORPORATION: Has $136.8 Mil. Net Loss in June 30 Quarter ------------------------------------------------------------ AVX Corporation reported preliminary unaudited results for the first quarter ended June 30, 2012. Chief Executive Officer and President, John Gilbertson, stated, "During the quarter, we executed well in a challenging market environment, generating a gross profit margin of 19.5%. We are optimistic that the market demand will increase later in the year as a result of an increase in order activity since the prior quarter." Net sales were $353.2 million for the quarter ended June 30, 2012. As discussed in the Company's Annual Report on Form 10-K for the year ended March 31, 2012, on April 18, 2012, the Environmental Protection Agency (EPA) issued an enforcement order to the Company to implement certain remedial work at the New Bedford Harbor Superfund Site in Massachusetts. An alleged legal predecessor company, Aerovox Corporation, produced liquid filled capacitors adjacent to the harbor from the late 1930's through the early 1970's. Subsequent owners of the facility are dissolved or in bankruptcy. AVX itself has never produced this type of capacitor, nor does it do so. The Company has been in mediation with the EPA and other government agencies in order to resolve this matter. The Company recorded an additional pre-tax charge of $266 million, or $0.98 per share on an after-tax basis, related to this matter in the results for the fiscal quarter ended June 30, 2012 in order to increase its current estimate of potential liability to $366 million. As a result of the environmental charge, the Company had a net loss of $(136.8) million, or $(0.81) per share, for the quarter ended June 30, 2012. Net income, excluding the environmental charge, was $29.6 million, or $0.17 per share, for the quarter ended June 30, 2012. Chief Financial Officer, Kurt Cummings, stated, "Despite what continues to be a challenging market environment, we have continued to generate positive operating cash flows while focusing carefully on cost reductions and operating efficiencies. The Company's financial position remains exceptionally strong with cash, cash equivalents and short and long-term investments in securities of $1.1 billion and no debt at June 30, 2012. During the quarter, we paid $12.7 million of dividends to stockholders and spent $1.8 million to repurchase shares of AVX stock on the open market which are held as treasury stock." Headquartered in Greenville, South Carolina, AVX -- http://www.avx.com-- is a leading manufacturer and supplier of a broad line of passive electronic components and related products. BILLMYPARENTS INC: CEO's Salary to Grow by $40,000 Per Year ----------------------------------------------------------- BillmyParents, Inc., amended the employment agreement of its Chairman and Chief Executive Officer, Michael R. McCoy, to provide that (1) Mr. McCoy's Base Salary will be increased by $40,000 per year, and (2) Mr. McCoy will be entitled to a lump sum cash payment equal to one and one-half times his annual Base Salary in the event the Company changes his title to any position below that of Chief Executive Officer. All other terms of the Employment Agreement remain in effect. On July 23, 2012, the Company granted to Mr. McCoy options to purchase 4,400,000 shares of the Company's common stock. The options vest monthly over a period of 12 months; have an exercise price of $0.43 per share; and expire 5 years after the date of grant. On July 23, 2012, the Company granted warrants to purchase common stock to certain Board members for their extraordinary efforts on behalf of the Company, as follows: Isaac Blech, 5,000,000; Joseph Proto, 3,000,000; Cary Sucoff, 2,000,000; and Patrick Kolenik, 2,000,000. The warrants vest monthly over a period of 12 months; have an exercise price of $0.43 per share; include a cashless exercise option; and expire 5 years after the date of grant. Effective as of July 24, 2012, Mr. Jesse Itzler was appointed to the Company's Board of Directors. In 2011, Mr. Itzler founded 100 Mile Group LLC, a brand incubator and creative marketing company, which is a successor to Suite 850, LLC (founded by Mr. Itzler in 2009). Mr. Itzler serves as the managing member of 100 Mile Group. In June 2010, Mr. Itzler co-founded PureBrands, LLC, a consumer products company featuring nutritional and dietary supplements. From 2001 through 2010, Mr. Itzler served as co- founder and vice-chairman of Marquis Jet Partners, a private aviation company. Mr. Itzler is a graduate of American University. In connection with Mr. Itzler's appointment to the Board, the Company agreed to grant Mr. Itzler warrants to purchase up to 2,000,000 shares of common stock at an exercise price of $0.43 per share, vesting monthly over a period of 36 months provided Mr. Itzler continues to serve on the Board, and having a term of 5 years. Mr. Itzler has been named to the Company's Compensation Committee. Effective as of July 24, 2012, Mr. Brian Thompson was appointed to the Company's Board of Directors. Since 2006, Mr. Thompson has been working for Mr. John Pappajohn at Equity Dynamics, Inc., a financial consulting firm. In his role as senior vice president, Mr. Thompson evaluates investment opportunities, performs due diligence, negotiates investment transactions, raises capital for new ventures and interacts with management teams through various board and board observer positions. Prior to this, Mr. Thompson was the CFO and CAO for Kum & Go, LC, a convenience retailer. Prior to KG, Mr. Thompson was the President and CFO of Astracon, Inc. of Denver, CO, a provider of connectivity intelligence OSS software for communications service providers, until its sale in 2003. From 1995 to 2000, Mr. Thompson was a Partner and CFO of the Edgewater Private Equity Funds. After receiving his BS/BA in accounting from the University of South Dakota in 1991, Mr. Thompson spent four years in the audit department of KPMG, LLP in San Antonio and Des Moines. In connection with Mr. Thompson's appointment to the Board, the Company agreed to grant Mr. Thompson warrants to purchase up to 2,000,000 shares of common stock at an exercise price of $0.43 per share, vesting monthly over a period of 36 months provided Mr. Thompson continues to serve on the Board, and having a term of 5 years. Mr. Thompson has been named to the Company's Audit Committee. 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. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, BDO USA, LLP, expressed substantial doubt about the Company's ability to continue as a going concern. BDO 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. CALIFORNIA: Municipal Funds Get Most Demand Since 2007 ------------------------------------------------------ Gillian White at Bloomberg News reports that California municipal funds are garnering the most demand since 2007, helping fuel the biggest rally in the state's debt since May and allaying concern that bankruptcies would curb the appetite of individual investors. With local yields close to the lowest since the 1960s, investors seeking tax-free income are willing to take the added risk of debt from Standard & Poor's lowest-rated U.S. state. According to the report, bond funds focusing on California issuers have added assets for 18 straight weeks, the longest streak since 2007, according to Lipper US Fund Flows data. The funds increased even as three municipalities from the most-populous state decided to file for bankruptcy protection in the past six weeks, including San Bernardino and Stockton, a city east of San Francisco that is trying to set a precedent by imposing losses on bondholders. San Bernardino hasn't yet sought Chapter 9 bankruptcy protection. CASTAIC PARTNERS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Castaic Partners, LLC 800 Silverado Street, Suite 301 La Jolla, CA 92037 Tel: (858) 456-9301 Bankruptcy Case No.: 12-36123 Chapter 11 Petition Date: July 30, 2012 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) About the Debtor: The Debtor owns 847 acres of unimproved land by Tapia Canyon Road, in Castaic, California. Compass USA SPE LLC has a $22 million claim secured by a deed of trust on the property. The County of Los Angeles is owed $1.98 million for unpaid property taxes on the property. Castaic Partners I previously sought Chapter 11 protection in October 2010 (Bankr. C.D. Calif. Case No. 10-53956). At the time, the Debtor said the property was worth $29.5 million. Castaic Partners said during the 2010 filing that it owes $24 million on a mortgage held by Compass USA and almost $2 million in property taxes owing to Los Angeles County. Debtor's Counsel: Jennifer J. Panicker, Esq. GILMORE WOOD VINNARD & MAGNESS 10 River Park Place E., Suite 240 Fresno, CA 93720 Tel: (559) 448-9800 Fax: (559) 448-9899 E-mail: jpanicker@gwvm.com Scheduled Assets: $29,505,000 Scheduled Liabilities: $23,977,749 Affiliate that simultaneously sought Chapter 11 protection: Debtor Case No. ------ -------- Castaic Partners II 12-36116 Scheduled Assets: $9,400,000 Scheduled Liabilities: $5,600,102 The petitions were signed by William J. Barkett, managing member. Castaic Partners I's list of its largest unsecured creditors filed with the petition does not contain any entry. Castaic Partners II's list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Franchise Tax Board State Taxes $102 P.O. Box 942857 Sacramento, CA 94257-2021 CCI FUNDING I: Bankr. Court Keeps Jurisdiction in Fall River Suit ----------------------------------------------------------------- Bankruptcy Judge Michael E. Romero ruled that the Bankruptcy Court has the statutory authority to address the claims raised in the lawsuit, JANICE STEINLE, CHAPTER 11 TRUSTEE FOR CCI FUNDING I, LLC, Plaintiff, v. FALL RIVER VILLAGE COMMUNITIES, LLC #2, NOEL WEST LANE III, and THE LANE III GROUP, INC., Defendants, Adv. Proc. No. 09-1530 (Bankr. D. Colo.). Accordingly, the Court denied the Motion for Court Evaluation of Applicability of Stern v. Marshall, 131 S.Ct. 2594 (2011), filed by the defendants. CCIF in September 2009 filed the Complaint for Declaration of Validity and Extent of Assets of the Estate, alleging CCIF's affiliated entity, Commercial Capital Inc., made five loans in the aggregate original principal amount of $13,235,358, related to the Fall River condominium project in Larimer County with a common address known as 511 West Elkhorn Avenue, Estes Park, Colorado. Fall River II and its affiliated entities filed multiple proofs of claim against the CCIF and CCI estates, asserting secured and unsecured debts in the aggregate amount of roughly $150 million. A copy of the Court's July 30, 2012 Order is available at http://is.gd/s2r3jTfrom Leagle.com. About Commercial Capital Greenwood Village, Colorado-based Commercial Capital, Inc. -- http://www.commercialcapitalinc.com/-- and its affiliate, CCI Funding I LLC, were commercial real estate lenders and investment partners engaged in short-term commercial mortgage. Commercial Capital and CCI Funding filed separate petitions for Chapter 11 protection on April 22, 2009, and April 24, 2009, respectively (Bankr. D. Colo. Lead Case No. 09-17238). The cases were jointly administered. Robert Padjen, Esq., at Laufer and Padjen LLC, assists Commercial Capital in its restructuring efforts. In its bankruptcy petition, Commercial Capital estimated between $100 million and $500 million in assets, and between $50 million and $100 million in debts. CCI Funding estimated between $100 million and $500 million each in assets and debts. On Nov. 10, 2009, in the CCIF bankruptcy case, the Court approved the U.S. Trustee's appointment of Janice Steinle as the Chapter 11 Trustee for CCIF. On Dec. 7, 2011, in the CCIF bankruptcy case, the Court confirmed the Fourth Amended Plan of Liquidation Under Chapter 11 Filed by WestLB, New York Branch. Ms. Steinle is the Responsible Officer of CCIF pursuant to the confirmed plan. CHILE MINING: Fails to Achieve Fiscal 2012 Financial Target ----------------------------------------------------------- Chile Mining Technologies Inc. has determined that it has not met the financial performance targets for the fiscal year ended March 31, 2012, as agreed to with investors in the Company's May 12, 2010, private placement. Accordingly, the make good common stock purchase warrants issued in connection with the May 12, 2010, private placement have vested in full and may be exercised for shares of the Company's common stock. Investors who wish to exercise the their make good common stock purchase warrants should either follow the procedure set forth in their warrant certificate, or they may deliver their original warrant certificate together with the executed exercise notice to the Company's outside legal counsel by mail at: Pillsbury Winthrop Shaw Pittman LLP, 2300 N Street N.W., Washington, DC 20007, Attention: Brian J. Buck. About Chile Mining Chile Mining Technologies Inc. is a mineral extraction company based in the Republic of Chile, with copper as its principal "pay metal." Its founders, Messrs. Jorge Osvaldo Orellana Orellana and Jorge Fernando Pizarro Arriagada, have refined the electrowin process in a way that permits the electrowin process to be used at a relatively small mine and/or tailings sites. Electrowinning is a process in which positive and negative electrodes are placed in an acidic solution containing copper ions, and an electric current passed through the solution causes the copper to be deposited on the negative electrodes so that it can be collected. Schwartz Levitsky Feldman LLP, in Toronto, Ontario, Canada, expressed substantial doubt about Chile Mining's ability to continue as a going concern following the fiscal year ended March 31, 2012, annual report. The independent auditors noted that the continuance of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the production of copper. The Company reported a net loss of US$3.95 million on US$433,554 of sales in fiscal 2012, compared with a net loss of US$7.25 million on US$188,227 of sales in fiscal 2011. The Company's balance sheet at March 31, 2012, showed US$5.92 million in total assets, US$7.37 million in total liabilities, and a stockholders' deficit of US$1.45 million. CISCO BROTHERS: Exits Chapter 11; 5% Recovery for Unsecureds ------------------------------------------------------------ Gary Evans at Furniture Today reports that upholstery maker Cisco Brothers has emerged from Chapter 11 bankruptcy. According to the report, the bankruptcy court approved the plan on May 30 with a July 11 effective date. The company, known for its efforts in promoting "green" upholstered furniture and for renovating an abandoned textile mill in High Point, filed for protection in April 2011. The report, citing court documents, says unsecured creditors would be paid 5% of the amount they are owed in quarterly installments during the next five years. About $4.5 million in claims have been filed by unsecured creditors. The reorganization plan also spells out payment plans for several secured creditors, as well as various government agencies who had filed claims for unpaid taxes, the report adds. The report relates Cisco Brothers founder and CEO Cisco Pinedo said the company will continue its efforts to revitalize Mill Village, a historic factory site occupying a 26-acre compound in High Point that was abandoned in the 1990s, and which houses the company's 20,000-square-foot High Point Market showroom and a distribution center. COLT DEFENSE: Moody's Confirms 'Caa1' CFR/PDR; Outlook Negative --------------------------------------------------------------- Moody's Investors Service confirmed Colt Defense's Corporate Family and Probability of Default Ratings at Caa1. Moody's also confirmed the Caa1 rating on the company's $250 million senior unsecured notes due 2017. The company's SGL rating remains unchanged at SGL-2, denoting a good liquidity profile. The rating outlook is negative. These rating actions complete the review for possible downgrade that commenced on May 3rd, 2012. The following ratings were confirmed and LGD assessments updated: Corporate Family Rating at Caa1 Probability of Default Rating at Caa1 $250 million senior unsecured notes due 2017 at Caa1 (LGD-4, 56% (from 58%)) Ratings Rationale The confirmation of the Caa1 Corporate Family Rating ("CFR") reflects Moody's view that the company's geographic and product mix has shifted over the last two years positively positioning it to better contend with the anticipated lower domestic defense spending environment. Credit metrics are weak with debt/EBITDA for the last twelve month period ending April 1, 2012 of over 7.0 times and interest coverage of roughly 1.0 times on a Moody's adjusted basis. Metrics are expected to remain at the Caa1 rating category over the intermediate term. Expectations for maintenance of the company's good liquidity profile for the next twelve months further supports the confirmation of the ratings. The negative outlook incorporates the increased likelihood, or possibility of a capital restructuring if the expansion of international and commercial firearm sales do not offset lower anticipated future U.S. government sales stemming from domestic fiscal budget pressures and uncertainty of their competitive position in legacy platforms. Colt's Caa1 CFR considers the company's still high financial leverage and weak credit metrics. Credit metrics are expected to remain weak but improved over the double digit debt/EBITDA levels reported over a year ago. The ratings incorporate that during the latter half of 2012 into part of 2013, credit metrics should remain within the Caa1 category as potentially lower U.S. government sales are expected to be partially offset by sales abroad (currently comprising over half of the company's total sales) and continued near-term strong demand in the commercial firearms market. EBITDA margins can likely be lower than historical levels due to the geographic/product mix versus two years ago. More positively, as of July 24, 2012, Colt's bid protest regarding a five-year contract awarded to Remington to supply up to 120,0000 M4/M4A1 carbines, worth $84 million over the term of the contract for the U.S. Army was sustained according to the U.S. Government Accountability Office bid docket. The outcome is uncertain. The SGL-2 liquidity rating reflects a near term good liquidity profile supported primarily by a $29 million cash balance at April 1, 2012 and the absence of any meaningful debt maturities over the intermediate term. The company does have interest expense payments of roughly $22 million it must meet related to their senior notes. Free cash flow (prior to any tax-distribution payments to LLC members) is expected to be breakeven to slightly positive. The company also has access to a $50 million borrowing based facility with no anticipated drawing in the near-term and limited LC usage to support foreign bids. Availability under the facility is lower than the face amount due to the size of the company's actual borrowing base. Ratings could be downgraded if the company's liquidity position deteriorates including cash balances declining from current levels, there is an increased likelihood that the company would enter into a capital restructuring or credit metrics weaken such as that debt/EBITDA reaches over 8.0x and interest coverage well below 1.0 times. The outlook could be stabilized if the company demonstrates an improvement in operating performance. Over time ratings could be upgraded if debt/EBITDA improves to and is sustained below 6.0 times and interest coverage exceeds 1.0 times. An expectation of a sustained liquidity profile adequacy would also be necessary. The principal methodology used in rating Colt Defense LLC was the Global Aerospace and Defense Industry Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Colt Defense LLC, headquartered in West Hartford, CT, manufactures small arms weapons systems for individual soldiers and law enforcement personnel for the U.S. military, U.S. law enforcement agencies, and foreign militaries. The company also modifies its rifles and carbines for civilian use and sell them to its affiliate, Colt's Manufacturing, which resells them into the commercial market. Revenues for the last twelve months ended April 1, 2012 totaled $205 million. COMARCO INC: Settles Lawsuit with Contract Manufacturer EDAC ------------------------------------------------------------ Comarco, Inc., entered into a Settlement Agreement and Mutual Release with EDAC Electronics Co. Ltd. that settles all claims and disputes between the parties. Comarco previously announced it filed a lawsuit against EDAC, one of its contract manufacturers. As a result of the Settlement Agreement, the Company is able to remove a significant liability from its balance sheet. In particular, the Company will be able to reduce its total liabilities by approximately $1.9 million, and will be required to reduce its accounts receivable by approximately $0.5 million. The result of these adjustments is an increase in shareholders' equity of approximately $1.4 million. Additional material terms of the Settlement Agreement include: * mutual release of all claims, liabilities, damages, demands, costs and expenses, whether known or unknown, arising in connection with the dispute; * an agreement allowing EDAC to retain specific equipment and tooling specially developed for the purpose of manufacturing the products that were the subject of the dispute; * an agreement allowing EDAC to retain certain inventory produced in the connection with the dispute and to sell the Inventory to a third party; and * an agreement that EDAC will not obtain any intellectual property rights of the Company in connection with the Settlement Agreement. About Comarco Inc. Based in Lake Forest, California, Comarco, Inc. (OTC: CMRO) -- http://www.comarco.com/-- is a provider of innovative, patented mobile power solutions that can be used to power and charge notebook computers, mobile phones, and many other rechargeable mobile devices with a single device. Comarco reported a net loss of $5.31 million for the year ended Jan. 31, 2012, compared with a net loss of $5.97 million during the prior year. After auditing the fiscal 2012 financial results, Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport Beach, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and negative cashflow from operations, has had declining working capital and uncertainties surrounding the Company's ability to raise additional funds. The Company's balance sheet at April 30, 2012, showed $4.88 million in total assets, $6.89 million in total liabilities and a $2.01 million total stockholders' deficit. COMSTOCK MINING: Has $10MM Loan Commitment from Caterpillar & RIF ----------------------------------------------------------------- Comstock Mining Inc. has developed new strategic alliances with two financing partners. The Company arranged a loan commitment up to $5 million, subject to certain conditions with Caterpillar Financial Services Corporation and a $5 million secured revolving credit facility with Resource Income Fund, with Auramet Trading LLC, acting as gold agent. The Company may borrow up to $5 million at any one time under the Revolving Credit Facility. On July 30, 2012, the Company drew down $5 million. Each of the Company and Comstock Mining LLC agreed to secure the Company's obligations under the Revolving Credit Facility. In connection with entry into the Revolving Credit Facility, the Company and the Subsidiary have also entered related sale and trading agreements with Auramet. In order to repay the Revolving Credit Facility, the Company agreed to deliver 3,720 ounces of gold over a 26-week term beginning in February 2013 through July 2013. The proceeds of the Revolving Credit Facility will be used primarily for working capital and capital expenditures associated with the commencement of production. The Cat Equipment Facility is a 30 month term loan of $5 million. The Company will use the proceeds to finance its Cat mobile equipment fleet, its Crushing facility and its Merrill Crowe facility. The Company closed on the first $2 million tranche of this financing on July 30, 2012. The Company has begun mining operations in the mine and has commissioned its new Crushing facility. The Company will commence commissioning the Merrill Crowe facility and plans on hauling ore the first week of August. After crushing and stacking this ore to sufficient quantity, the Company will then commence leaching and recovering the contained precious metals through the Merrill Crowe zinc precipitation process. "These working capital financings are consistent with our business plans as we become Nevada's newest gold and silver miner. These financing packages not only accelerate the transition into sales from production, but they represent two outstanding, industry- leading, production partners who are enabling and supporting the growth and development of the Comstock. We remain on track for our first pour this summer," stated Mr. De Gasperis. About Comstock Mining Virginia City, Nev.-based Comstock Mining Inc. is a Nevada-based, gold and silver mining company with extensive, contiguous property in the historic Comstock district. The Company began acquiring properties in the Comstock in 2003. Since then, the Company has consolidated a substantial portion of the Comstock district, secured permits, built an infrastructure and brought the exploration project into test mining production. The Company continues acquiring additional properties in the Comstock district, expanding its footprint and creating opportunities for exploration and mining. The goal of the Company's strategic plan is to deliver stockholder value by validating qualified resources (measured and indicated) and reserves (probable and proven) of 3,250,000 gold equivalent ounces by 2013, and commencing commercial mining and processing operations by 2011, with annual production rates of 20,000 gold equivalent ounces. The Company reported a net loss of $11.61 million in 2011, compared with a net loss of $60.32 million in 2010. The Company's balance sheet at March 31, 2012, showed $40.97 million in total assets, $14.64 million in total liabilities, and $26.33 million in total stockholders' equity. CONCHO RESOURCES: Moody's Affirms 'Ba3' Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service affirmed Concho Resources Inc.'s (Concho) corporate family rating(CFR) at Ba3 and changed the outlook to stable. The SGL-2 Speculative Grade Liquidity (SGL) rating and the B1 rating on the existing senior notes are unchanged. This action concludes Moody's review for upgrade, which commenced April 2, 2012. Ratings Rationale "Concho closed on the Three Rivers Operating Company acquisition in mid-July. While an all debt transaction, the purchase price of about $17.25 BOE for proved reserves in a heavily oil/liquids play with substantial incremental drilling acreage is reasonable on its face and complements its portfolio and strategy," said Harry Schroeder, Moody's Vice President. The Ba3 CFR reflects Concho's strong position in the Permian Basin, large drilling inventory, and strong cash margins driven by a high proportion of oil and NGL production. Post-acquisition the leverage is nominally high compared to its rated peers but Concho's production derives from areas with unlevered cash margins exceeding $50 BOE affording them the ability to self-fund an approximate $1.5 billion capex budget going forward. Protecting this budget is a prudent hedging strategy for the two-years post March 31, 2012 of about 41 million BOE of oil and a very modest level of gas at an average price of $94.85 BOE. The company should easily and economically replace produced reserves with the drill bit. There are no debt maturities until 2016 when the credit facility matures and the company has a quite lengthy reserve life, in excess of fifteen years. The SGL-2 reflects adequate liquidity through June 30, 2013. The Three Rivers acquisition was funded by drawing $1 billion on the revolver. Pro-forma for the acquisition, as of March 31, 2012 Concho has $1.3 billion of availability under its recently upsized to $2.5 billion credit facility. The company plans to fund its 2012 drilling program with internal cash flow, and small bolt-on acquisitions with its credit facility. Financial covenants under the facility are debt / EBITDAX of not more than 4.0x and a current ratio of at least 1.0x. Moody's expects Concho to remain well within compliance with these covenants during the next 12 months. There are no debt maturities until 2016 when the credit facility matures. Substantially all of Concho's oil and gas assets are pledged as security. The B1 senior unsecured note rating reflects both the overall probability of default of Concho, to which Moody's assigns a PDR of Ba3, and a loss given default of LGD5-78%. The size of the senior secured revolver's priority claim relative to the senior unsecured notes results in the notes being rated one notch below the Ba3 CFR under Moody's Loss Given Default Methodology. The stable outlook reflects Moody's expectation of an absorption phase where Concho focuses on integrating the assets acquired from Three Rivers and subsequent asset sales to partially fund the acquisition. Moody's expects leverage to compress over time through organic production growth as well as debt reduction from announced asset sales of $200 - $400 million. Moody's could upgrade the ratings if Concho continues to grow production and reserves essentially within cash flow with debt / proved developed reserves of less than $10 BOE and debt / average daily production of less than $30,000 BOE. Strong full cycle metrics are clearly the underlying driver of the economics. Moody's could downgrade the ratings if RCF / debt degrades to below 30% due to a leveraging acquisition, or if profitability deteriorates materially due to sustained operational issues. The principal methodology used in rating Concho Resources Inc was the Global Independent Exploration and Production Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Concho Resources Inc. is an independent exploration and production company headquartered in Midland, Texas. CUBIC ENERGY: Gets NYSE MKT Approval for Extension of Plan Period ----------------------------------------------------------------- Cubic Energy, Inc. disclosed that by letter dated July 27, 2012, the NYSE MKT LLC, formerly NYSE Amex, LLC notified Cubic that the Exchange has accepted the Company's request for extension of the plan period until December 31, 2012 to regain compliance with Section 1003(a)(iv) of the NYSE MKT Company Guide. On March 2, 2012, the Exchange provided Cubic with notice that the Company is not in compliance with Section 1003(a)(iv) of the Company Guide in that the Exchange believed that the Company has sustained losses which are so substantial in relation to its overall operations or its existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether the Company will be able to continue operations and/or meet its obligations as they mature. In that March 2, 2012 letter, the Company was originally given until July 31, 2012 to regain compliance with Section 1003(a)(iv). On Dec. 27, 2011 and Feb. 24, 2012, Cubic received letters from the Exchange indicating that the Company is not in compliance with Section 1003(a)(i) of the Exchange's Company Guide because the Company has stockholders' equity of less than $2,000,000 and losses from continuing operations and/or net losses in two out of its three most recent fiscal years, Section 1003(a)(ii) of the Company Guide with stockholders' equity of less than $4,000,000 and losses from continuing operations and/or net losses in three out of its four most recent fiscal years, and Section 1003(a)(iii) of the Company Guide with stockholders' equity of less than $6,000,000 and losses from continuing operations and/or net losses in its five most recent fiscal years. The Company was given until June 27, 2013 to regain compliance with these Company Guide Sections. The Company will be subject to periodic review by the Exchange during the extension periods. If the Company does not make progress consistent with the plan or the Company is not in compliance with the applicable continued listing standards by the respective dates set forth above, the Company would be subject to delisting; however, the Company would be entitled to appeal any delisting determination by the Exchange. Cubic Energy, Inc., headquartered in Dallas, Tex., is an independent upstream energy company engaged in the development and production of, and exploration for, crude oil and natural gas. Its oil and gas assets and activities are concentrated in Louisiana. CURAXIS PHARMACEUTICALS: Files for Chapter 7 Liquidation -------------------------------------------------------- BankruptcyData.com reports that Curaxis Pharmaceuticals filed for Chapter 7 protection in Raleigh, California (Bankr. E.D. Calif. Case No. 12-05475). The Company is represented by N. Hunter Wyche, Jr. of Wilson & Ratledge. A Chapter 7 trustee was appointed, and the Company's assets will be liquidated in accordance with the Code. With the installation of the Chapter 7 trustee and concurrent with the bankruptcy filing, the employment of Timothy R. Wright, chairman and interim chief executive officer, and Judith S. T. Geaslen, secretary and vice president - finance, was terminated. As a result, the Company no longer has any employees. All members of the Company's board also resigned. Curaxis Pharmaceuticals is an emerging specialty pharmaceutical company with a hormone drug product candidate for the treatment of Alzheimer's disease and multiple cancers. DBSI INC: Wavetronix Asks to Name Trustee in RICO Suit ------------------------------------------------------ Jamie Santo at Bankruptcy Law360 reports that Wavetronix LLC, a traffic-data company that launched an Idaho action against DBSI Inc. officers, asked a Delaware bankruptcy judge Tuesday for permission to add the bankrupt firm's liquidating trustee to the RICO suit so it can sue him in his court-appointed role. According to Bankruptcy Law360, Wavetronix LLC received more than $21 million in funding from DBSI before the investment firm sought court protection in Delaware, where a bankruptcy examiner subsequently concluded that DBSI management had conducted a massive Ponzi scheme that defrauded investors of some $500 million. About DBSI Inc. Headquartered in Meridian, Idaho, DBSI Inc. and its affiliates were engaged in numerous commercial real estate and non-real estate projects and businesses. On Nov. 10, 2008, and other subsequent dates, DBSI and 180 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-12687). DBSI estimated assets and debts between $100 million and $500 million as of the Chapter 11 filing. Lawyers at Young Conaway Stargatt & Taylor LLP represent the Debtors as counsel. The Official Committee of Unsecured Creditors tapped Greenberg Traurig, LLP, as its bankruptcy counsel. Kurtzman Carson Consultants LLC is the Debtors' notice claims and balloting agent. Joshua Hochberg, a former head of the Justice Department fraud unit, served as an Examiner and called the seller and servicer of fractional interests in commercial real estate an "elaborate shell game" that "consistently operated at a loss" in his report released in October 2009. McKenna Long & Aldridge LLP was counsel to the Examiner. On Sept. 11, 2009, the Honorable Peter J. Walsh entered an Order appointing James R. Zazzali as Chapter 11 trustee for the Debtors' estates. On Oct. 26, 2010, the trustee of DBSI Inc. won court confirmation of its Chapter 11 plan of liquidation, paving the way for it to pay creditors and avoid years of expensive litigation over its complex web of affiliates. The plan, which was declared effective Oct. 29, 2010, was jointly proposed by DBSI's unsecured creditors and the bankruptcy trustee in charge of DBSI and its 170-plus affiliates. Pursuant to DBSI Inc.'s confirmed Chapter 11 plan, the DBSI Real Estate Liquidating Trust was established as of the effective date and certain of the Debtors' assets, including the Debtors' ownership interest in Florissant Market Place was transferred to the RE Trust. Mr. Zazzali and Conrad Myers were appointed as the post-confirmation trustees. Messrs. Zazzali and Myers are represented by lawyers at Blank Rime LLP and Gibbons P.C. DEER PARK: S&P Lowers Stand-alone Credit Profile to 'bb' -------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'A' corporate credit rating and 'A-1' short-term on U.S. refiner Deer Park Refining L.P. following a review. "We lowered the stand-alone credit profile from 'bb+' to 'bb'. The outlook is stable," S&P said. "The ratings on Deer Park Refining L.P. (Deer Park) reflect both the company's standalone credit characteristics, and Standard & Poor's Ratings Services' view that its credit profile is enhanced by the support of its parents, Royal Dutch Shell PLC (Shell; AA/Stable/A-1+) and PMI Norteamerica S.A. de C.V. (PMI; an unrated subsidiary of Petroleos Mexicanos [PEMEX; foreign currency: BBB/Stable; local long-term: A-/Stable]). Specifically, the 'A' corporate credit rating incorporates a multiple-notch uplift from Deer Park's 'bb' standalone credit profile to reflect our belief that the company would receive support from Shell when required. (Shell is the general partner and operator, while PMI is the limited partner.) The 'bb' standalone credit profile reflects our assessment of the company's 'fair' business risk profile as a single, highly complex petroleum refiner and its 'intermediate' financial risk profile," S&P said. "The strategic importance of Deer Park to its parents, particularly Shell, reflects past capital contributions, continued liquidity support arrangements, and integration with the companies' other business divisions," said Standard & Poor's credit analyst Terry Pratt. "Shell supplies a significant portion of its retail network from the refiner, while PMI ships a material amount of its crude oil to it." "The stable outlook reflects our expectations that Deer Park will be able to fund itself internally through an extended margin downturn and our belief that the asset will continue to be strategic to its parent companies, particularly Shell. We could lower ratings if there are indications that the parents would no longer provide the support that we expect or if financial metrics continue to worsen such that FFO to debt is below 20% and debt to EBITDA is above 4x for an extended period. More explicit parental support or a diversification of assets could lead to higher ratings, although we expect any upgrade potential to be limited," S&P said. DELUXE ENTERTAINMENT: S&P Lowers Corporate Credit Rating to 'B-' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on U.S. entertainment services provider Deluxe Entertainment Services Group Inc. to 'B-' from 'B'. The rating outlook is stable. "We also lowered our issue-level rating on Deluxe Entertainment's senior secured term loan to 'B' from 'B+' (one notch above the 'B- ' corporate credit rating). The recovery rating on this debt remains unchanged at '2', indicating our expectation of substantial (70%-90%) recovery for lenders in the event of a payment default," S&P said. "The downgrade reflects Deluxe Entertainment's thin margin of compliance with financial covenants and the potential that discretionary cash flow could contract," said Standard & Poor's credit analyst Tulip Lim. "The rating also reflects our financial risk profile assessment of 'highly leveraged' (based on our criteria) on the company, given its high debt service requirements, including its sizable mandatory amortization payments and its high leverage. In addition, it is owned by private-equity investors that financed a special dividend from the company using debt. We view Deluxe Entertainment's business profile as 'vulnerable' (based on our criteria) because of its exposure to the widespread adoption of digital projection technology by motion picture exhibitors, particularly in North America." "We expect the company's film processing and distribution business to continue to decline over the next few years," added Ms. Lim, "and while we expect the company's creative service business will grow at a brisk pace, we also expect total revenue to be flat or decline at a low, single-digit percent rate this year." "The rating outlook is stable. We could lower the rating if we become convinced that the company could violate its financial covenants, if we become convinced that its discretionary cash flow could contract below $50 million, or if the company's liquidity shrinks. This could occur if revenue from creative services does not grow at a double-digit rate and if EBITDA does not grow a mid-single-digit percent pace." "Although less likely, we could raise the rating if the company's operating performance improves based on sustainable demand trends and its margin of compliance with financial covenants widens to 20%," S&P said. DEWEY & LEBOEUF: Bonuses Okayed, Use of Discretionary Funds Denied ------------------------------------------------------------------ Michael Bathon, substituting for Bloomberg bankruptcy columnist Bill Rochelle, reports that Dewey & LeBoeuf LLP won court approval to pay incentive and retention bonuses to employees that will help wind down the firm. According to the report, U.S. Bankruptcy Judge Martin Glenn in Manhattan on July 30 approved the company's request saying in a 14-page opinion the payments "are justified under the circumstances." Judge Glenn denied the company's proposal to use $100,000 in discretionary funds that would have been used to pay short-term billing and collection staff and could be used for employees who remained past their "stay date." Judge Glenn said "there is insufficient information for the court to conclude that this aspect of the plan does not discriminate unfairly." The report relates that the original program proposed as much as $700,000 for the employees. The workers include six members of the billing and collection staff and 42 members of the operational staff. Under the retention plan, 16 employees are eligible for an additional two weeks pay if they stay until Aug. 31, court papers show. Seven could get three extra weeks of pay if they stay until Sept. 20, and eighteen can receive as much as eight weeks of pay if they stay through Nov. 30. Three employees are covered under the incentive plan which could total as much as $250,000. Two are director of billing and director of collections, while the third is a collection and billings analyst, according to court documents. The two directors are eligible for as much as $110,000 and the analyst is capable of getting up to $30,000, JPMorgan Chase & Co. said in a court filing. The United States Trustee objects to the proposal, saying (i) it does not provide sufficient information to allow the Court to determine whether the payments under the Incentive Plan are more costly than the alternative of only retaining a collection agent; (ii) it is unclear whether the Plans are economically feasible, in light of the upcoming expiration of the cash collateral order; and (iii) the Incentive Plan is not justified under the facts and circumstances of the case. In reply, the Debtor argues that in addition to being permissible under applicable law, the "need to stem further employee attrition is greater now than ever." With certain exceptions, the Court concludes that both the Retention Plan and the Incentive Plan are justified under the circumstances. A copy of the Court's July 30 Memorandum Opinion and Order is available at http://is.gd/ZqZMu2from Leagle.com. About Dewey & LeBoeuf New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. Dewey & LeBoeuf has won Court authority to use lenders' cash collateral through July 31, 2012. DEWEY & LEBOEUF: Gets 2-Week Cash Lifeline to Aid Ex-Partner Deal ----------------------------------------------------------------- Lance Duroni at at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Martin Glenn on Tuesday granted Dewey & LeBoeuf LLP a cash lifeline to sustain the cratered law firm for two more weeks as it attempts to cobble together a critical settlement with former partners. Judge Glenn signed off on an order extending Dewey's access to its lenders' cash collateral ? which was set to expire Tuesday ? until Aug. 15. The extension will provide a window for Dewey to determine whether enough of its partners have accepted a recent settlement. About Dewey & LeBoeuf New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. Dewey & LeBoeuf has won Court authority to use lenders' cash collateral through July 31, 2012. DRINKS AMERICAS: Delays Form 10-K for Fiscal 2012 ------------------------------------------------- Drinks Americas Holdings, Ltd., notified the U.S. Securities and Exchange Commission that the compilation, dissemination and review of the information required to be presented in the Form 10-K for the year ended April 30, 2012, has imposed time constraints that have rendered timely filing of the Form 10-K impracticable without undue hardship and expense to the Company. The Company undertakes the responsibility to file that annual report no later than 15 days after its original due date. It is anticipated that a significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the Form 10-K. The Company anticipates its results of operations to reflect an increase in gross margin from $(31,644) to $1,252,670 for the year ended April 30, 2011, and for the year ended April 30, 2012, respectively. The increase in gross margin is attributable to the transition in business model with the addition of distribution rights acquired from Worldwide Beverage Imports, LLC, in addition to a premium product selling strategy targeting premium price points for products, low overhead and targeted marketing. Furthermore, the Company anticipates its results of operations to reflect an increase in total operating expenses from $2,753,547 to $2,814,836 for the year ended April 30, 2011, and for the year ended April 30, 2012, respectively. The increase in expenses were attributable to increased sales commissions, marketing and sales expenses related to an increase in revenues and brand ambassadors and selling staff associated with the companies increased sales. About Drinks Americas Headquartered in Wilton, Conn., Drinks Americas Holdings, Ltd. -- http://www.drinksamericas.com/-- through its majority-owned subsidiaries, Drinks Americas, Inc., Drinks Global, LLC, D.T. Drinks, LLC, and Olifant U.S.A Inc., imports, distributes and markets unique premium wine and spirits and alcoholic beverages associated with icon entertainers, celebrities and destinations, to beverage wholesalers throughout the United States. The Company reported a net loss of $4.58 million on $497,453 of net sales for the year ended April 30, 2011, compared with a net loss of $5.61 million on $890,380 of net sales during the prior year. After auditing the fiscal 2011 financial statements, Bernstein & Pinchuk, in New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses from operations since its inception and has a working capital deficiency. The Company's balance sheet at Jan. 31, 2012, showed $6.74 million in total assets, $4.39 million in total liabilities, and $2.35 million in total stockholders' equity. DUNKIN' BRANDS: S&P Affirms 'B+' CCR After $400MM Term Loan Add-On ------------------------------------------------------------------ On July 31, 2012, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating, along with all existing issue-level ratings, on Canton, Mass.-based Dunkin' Brands Inc., following the company's announcement that it plans to increase its existing term loan by $400 million. The outlook is stable. The company intends to use the proceeds from the add-on term loan to partly fund shareholder initiatives and/or general corporate purposes. The recovery rating remains '3', indicating our expectations for meaningful (50-70%) recovery in the event of a payment default. Rationale "The ratings on Dunkin' Brands reflect our assessment of the company's business risk as 'fair' and its financial risk as "highly leveraged." Our assessment of its business risk is supported by its highly franchised business model and good market position in the beverage-and-snack sector. Despite our expectations for modest debt reduction with cash flows, we expect its financial risk profile to remain highly leveraged. We believe that the company will likely pursue additional shareholder initiatives because of prospects for earnings improvement and minimal capital spending requirements," S&P said. Pro forma for the transactions, S&P estimates that debt to EBITDA and funds from operations (FFO) to debt will reach 6.6x and 7%, respectively. In its forecast for the next year, S&P thinks EBITDA will continue to grow on positive performance from modest same- store sales growth at franchisee operations and new store openings. S&P forecasts leverage declining to slightly under 6x and FFO/debt improving to about 11% in 2013. These credit metrics are in line with the indicative ratios of a highly leveraged financial risk profile. As a franchisor, its revenues come primarily from royalty payments from its franchisees, and it does not bear the risk of their operations or of significant swings in commodity costs. As such, S&P expects Dunkin' Brands to maintain its good cash flow generation capabilities, as well as solid free cash flow conversion given modest capital spending needs. Dunkin' Brands has been expanding into new markets, which S&P thinks will lead to a gradual increase in earnings and cash flows and help strengthen its geographic diversity. These new store openings are opened by franchisees, so Dunkin' Brands' capital spending is kept at modest levels. The company benefits from good penetration in its key geographic markets in the eastern U.S., which we think leverages its cost structure. Domestically, it is targeting new stores away from its core eastern U.S. markets, which S&P thinks will help with geographic diversification. The company's rental income and licensing fees, which account for about 25% of revenues, also provide stability to earnings. S&P's assumptions for Dunkin' Brands in the next year include the following: -- Systemwide same-store sales of about 3% on product initiatives; -- Modest improvement in EBITDA margins, to about 53%, due to new franchisee store openings, both domestically and internationally, that leverages its cost structure; -- Capital spending of about $25 million annually; -- Free cash flows of nearly $175 million, a portion of which will be used for debt reduction; and -- S&P expects the company to continue its organic growth strategy; the rating does not incorporate any large debt- financed acquisitions or additional sizable shareholder returns in the next 12 months. Liquidity S&P views Dunkin' Brands' liquidity as "adequate," based on its criteria. The rating agency's liquidity assumptions for the next 12 months include the following: -- S&P thinks the company has a good relationship with its banks, considering recent successful amendments to the credit agreement. -- Cash sources will exceed cash uses by 1.2x or more. -- Cash sources will exceed uses, even if EBITDA declines by 15%. -- The company should maintain covenant compliance, given S&P's performance and cash flow expectations. -- Dunkin' Brands would be able to absorb high-impact, low- probability events with limited need for refinancing, given S&P's cash flow expectations. Liquidity sources include about $219 million cash on hand at June 30, 2012, and availability under its $100 million revolving credit facility. "Given our cash flow assumptions, we do not anticipate any borrowings under the revolver," S&P said. The credit agreement includes a mandatory cash flow sweep, which should result in additional debt repayment. Outlook The stable outlook incorporates S&P's view that the company will use free cash flows to reduce debt, and performance trends will remain favorable with margin gains from new store openings and positive same-store trends. S&P forecasts leverage declining to slightly under 6x in the next year and EBITDA margins increasing to 53%. S&P anticipates the company would use excess cash flow for shareholder initiatives without incurring additional debt. A downgrade could occur if financial policy changes so that leverage is sustained above 6.5x and FFO/debt hovers around 7%, which could result from aggressive shareholder returns or a major acquisition. Intensified competition that exerts prolonged pricing pressures could also lead to weaker credit ratios. "An upgrade is unlikely at this time given the company's elevated debt level. However, it could occur if we see performance improvement and debt declining so that leverage falls under 5x and FFO/debt increases to about 15% on a sustained basis," according to S&P. Ratings List Ratings Affirmed Dunkin' Brands Inc. Corporate Credit Rating B+/Stable/-- Senior Secured $1.9-bil term loan B+ Recovery Rating 3 DUTCH LAKE: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Dutch Lake Knoll Holdings, LLC 1635 County 110 North Mound, MN 55364 Bankruptcy Case No.: 12-44430 Chapter 11 Petition Date: July 30, 2012 Court: U.S. Bankruptcy Court District of Minnesota (Minneapolis) Judge: Dennis D. O'Brien Debtor's Counsel: Will R. Tansey, Esq. RAVICH MEYER KIRKMAN MCGRATH & NAUMAN 4545 IDS Center 80 South Eighth Street Minneapolis, MN 55402 Tel: (612) 317-4760 Fax: (612) 332-8302 E-mail: wrtansey@ravichmeyer.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 George Gulso, chief manager. E-MAX GROUP: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: E-Max Group, Inc. dba www.databazaar.com www.databazaar.net 12070 Miramar Parkway Hollywood, FL 33025 Bankruptcy Case No.: 12-28274 Chapter 11 Petition Date: July 30, 2012 Court: U.S. Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: John K. Olson Debtor's Counsel: David R. Rothenstein, Esq. EHRENSTEIN CHARBONNEAU CALDERIN 501 Brickell Key Drive, #300 Miami, FL 33131 Tel: (305) 722-2002 E-mail: drr@ecclegal.com - and ? Jacqueline Calderin, Esq. EHRENSTEIN CHARBONNEAU CALDERIN 501 Brickell Key Drive, #300 Miami, FL 33131 Tel: (305) 722-2002 Fax: (305) 722-2001 E-mail: jc@ecclegal.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flsb12-28274.pdf The petition was signed by Anindya Oney Seal, president. ELBIT VISION: Reports $519,000 Net Profit in Second Quarter ----------------------------------------------------------- Elbit Vision Systems Ltd. reported net profit of $519,000 on $1.96 million of revenue for the three months ended June 30, 2012, compared with net profit of $302,000 on $1.42 million of revenue for the same period during the prior year. The Company reported net profit of $753,000 on $3.58 million of revenue for the six months ended June 30, 2012, compared with net profit of $532,000 on $2.67 million of revenue for the same period a year ago. Elbit Vision's balance sheet at June 30, 2012, showed $3.41 million in total assets, $4.33 million in total liabilities, and a $923,000 in shareholders' deficiency. Sam Cohen, CEO of EVS commented, "Our achievements in the first half of this year, serve as further justification of the vision and direction of EVS since the reorganization two years ago. We are continuing to expand our operations in Asia which have contributed almost 50% of our revenues in 2012, and our targeted marketing campaigns have allowed us to penetrate new territories like Sri Lanka and Thailand. All this has been achieved while maintaining growth within our core competencies in Europe and the Americas. "Additionally, we are excited about our future evolution given some very encouraging recent advances by our R&D team. Over the next few months, we plan to introduce a revolutionary new inspection tool that we expect will bring EVS into new global markets," concluded Mr. Cohen. A copy of the press release is available for free at: http://is.gd/Qr5Qma About Elbit Vision Based in Caesarea, Israel, Elbit Vision Systems Ltd. (OTC BB: EVSNF.OB) offers a broad portfolio of automatic State-of-the-Art Visual Inspection Systems for both in-line and off-line applications, and process monitoring systems used to improve product quality, safety, and increase production efficiency. ENERGY CONVERSION: Court Confirms Liquidation Plan -------------------------------------------------- Energy Conversion Devices, Inc. and its wholly-owned subsidiary United Solar Ovonic LLC disclosed that the United States Bankruptcy Court for the Eastern District of Michigan has confirmed its Second Amended Joint Plan of Liquidation. On July 30, 2012, the United States Bankruptcy Court for the Eastern District of Michigan entered a confirmation order in respect of the Second Amended Joint Plan of Liquidation of ECD and USO. The confirmation order is expected to become final on Aug. 14, 2012, assuming no appeals of the order before that time, at which time, the Plan will be effective. The Plan obtained overwhelming support from all classes of voting creditors and is a significant advancement of the company's efforts to maximize the return to its creditors through an efficient administration of its bankruptcy cases. The Plan provides for the treatment of claims against ECD and USO and equity interests in ECD. ECD and USO have completed sales of substantially all of their machinery, equipment, and inventory and are in the process of conducting sales of their intellectual property, real estate holdings, interest in Ovonyx, Inc. and other miscellaneous assets. The Plan provides for a liquidation trust to complete the liquidation, wind-up the affairs of ECD and USO, and to distribute the cash to creditors of each company on a consolidated basis. The Plan also establishes a warranty trust to settle warranty claims. The liquidation trust and warranty trust will be managed by an oversight committee comprised of selected unsecured creditors. On the effective date of the Plan, all equity interests in ECD will be cancelled. On Feb. 14, 2012, ECD and USO filed voluntary petitions for relief under Chapter 11 the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Michigan. On May 23, 2012, ECD and USO filed a proposed plan of liquidation and disclosure statement with the Bankruptcy Court, both the proposed plan and disclosure statement were later amended and filed with the Bankruptcy Court on May 29, 2012 and May 31, 2012. 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. FC-GEN OPERATIONS: Moody's Assigns 'B2' CFR/PDR; Outlook Stable --------------------------------------------------------------- Moody's Investors Service assigned B2 Corporate Family and Probability of Default Ratings to FC-GEN Operations Investment, LLC, the parent company of Genesis HealthCare LLC (collectively Genesis). Moody's also assigned a B2 (LGD 3, 45%) rating to the company's proposed $325 million senior secured term loan. The outlook for the ratings is stable. Moody's understands that the proceeds of the loan along with a draw on a new asset based revolving credit facility (not rated by Moody's) will be used to fund the acquisition of the outstanding equity of Sun Healthcare Group, Inc. (Sun) and refinance existing debt. The $275 million acquisition of Sun is expected to close in the fourth quarter of 2012. The ratings of Sun, including the B1 Corporate Family Rating, remain unchanged and will be withdrawn upon the closing of the transaction and the repayment of Sun's outstanding debt. Following is a summary of Moody's rating actions. Ratings are subject to Moody's review of final documentation. Ratings assigned: FC-GEN Operations Investment, LLC: Corporate Family Rating, B2 Probability of Default Rating, B2 Genesis HealthCare LLC: $325 million senior secured term loan due 2018, B2 (LGD 3, 45%) Ratings unchanged and to be withdrawn at the close of the transaction: Sun Healthcare Group, Inc.: Senior secured revolving credit facility expiring 2015, Ba1 (LGD 2, 17%) Senior secured term loan due 2016, Ba1 (LGD 2, 17%) Corporate Family Rating, B1 Probability of Default Rating, B1 Speculative Grade Liquidity Rating, SGL-3 Ratings Rationale Genesis' B2 Corporate Family Rating reflects Moody's expectation that the company will continue to operate with very high lease adjusted leverage given the long term leases for the majority of its facilities. While Moody's expects the cash requirements for these obligations to increase over time, it expects the company to have a relatively modest amount of funded debt outstanding. The rating also reflects Moody's assessment of the risks associated with the reliance on government programs for the majority of revenue and its anticipation that Medicare and Medicaid reimbursement rates will remain under pressure. The rating also reflects Moody's belief that the considerable scale the combined company will have as one of the largest providers of post-acute care services and the increased geographic diversification provided by the acquired facilities will represent a strength over the company's previous position in the sector. The stable outlook reflects Moody's expectation that the company will continue to generate stable cash flows that can be used to fund planned investment in growth initiatives. The outlook also reflects Moody's expectation that credit metrics will not likely improve in the near term given that the majority of adjusted debt is related to the significant lease obligations of the company. Finally, Moody's expects that the company will remain disciplined with regard to acquisitions and the use of incremental debt following the significant transformational acquisition of Sun. Moody's expects that metrics will decline from pro forma levels as the company fully absorbs the impact of the October 2011 Medicare rate reduction and meaningful improvement beyond that will be limited given the majority of the adjusted debt balance relates to the significant lease obligations. Given that, Moody's does not expect an upgrade of the rating in the near term. However, if the company can grow EBITDA while sustaining debt to EBITDA on a GAAP basis below 5.0 times and decrease the risk related to escalating rent expense requirements, Moody's could upgrade the ratings. If metrics weaken considerably from integration issues or negative regulatory or reimbursement developments, Moody's could lower the rating. Additionally, if Moody's does not expect Genesis to be able to offset increasing rent expense with sufficient revenue and cash flow growth, or if it increases leverage for a significant debt financed acquisition, Moody's could lower the rating. For example, while Moody's expects metrics to deteriorate initially as the company absorbs a full year of lower Medicare reimbursement levels, if over time Genesis does not reduce debt to EBITDA on a GAAP basis below 7.0 times, Moody's could downgrade the ratings. For further details refer to Moody's Credit Opinion for FC-GEN Operations Investment, LLC on moodys.com. The principal methodology used in rating Genesis was the Global Healthcare Service Providers Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Genesis provides post-acute care services, including skilled nursing and contract rehabilitation. Pro forma for the proposed acquisition of Sun, the company recognized approximately $4.7 billion in revenue for the twelve months ended March 31, 2012. FINANCIAL DATA: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Financial Data Technology Corporation aka Fi-Data aka fiData 201 Jordan Road Franklin, TN 37067 Bankruptcy Case No.: 12-07012 Chapter 11 Petition Date: July 31, 2012 Court: United States Bankruptcy Court Middle District of Tennessee (Nashville) Judge: Marian F. Harrison Debtor's Counsel: Barbara Dale Holmes, Esq. David Phillip Canas, Esq. Glenn Benton Rose, Esq. Tracy M Lujan, Esq. HARWELL HOWARD HYNE GABBERT & MANNER PC 333 Commerce Street, Suite 1500 Nashville, TN 37201 Tel: (615) 256-0500 Fax: (615) 251-1059 E-mail: bdh@h3gm.com dpc@h3gm.com gbr@h3gm.com tml@h3gm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Gary M. Murphey, trustee of Citizens Corporation, Debtor's sole shareholder. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Citizens Corporation 11-11792 11/28/11 FIVE PONDS: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Five Ponds LP 1225 W. Street Road Warminster, PA 18974 Bankruptcy Case No.: 12-17171 Chapter 11 Petition Date: July 30, 2012 Court: U.S. Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Eric L. Frank Debtor's Counsel: Albert A. Ciardi, III, Esq. CIARDI CIARDI & ASTIN, P.C. One Commerce Square 2005 Market Street, Suite 1930 Philadelphia, PA 19103 Tel: (215) 557-3550 Fax: (215) 557-3551 E-mail: aciardi@ciardilaw.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 John McGrath, Jr., president. FRANKLIN CREDIT: Bankruptcy Court Confirms Prepackaged Plan ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey confirmed the Prepackaged Plan of Reorganization of Franklin Credit Holding Corporation and approved the adequacy of the solicitation procedures with respect to the solicitation of votes to accept or reject the Prepackaged Plan, and the adequacy of information contained in the Disclosure Statement. The Confirmation Order approved three technical or non-material changes to the Prepackaged Plan that did not materially adversely affect or change the treatment of any claims, interests, or options and did not modify the Prepackaged Plan. Each holder of an allowed general unsecured claim will receive, to the extent available, (a) his/her/its pro rata share of the proceeds of the liquidation of the remaining assets of the estate after the payment of the creditors holding allowed claims with a higher priority of payment under the Prepackaged Plan and liquidation costs. The Prepackaged Plan provides for, among other things, liquidation and disposal of the assets including the sale of Franklin Credit Management Corporation Stock pursuant to Section 1123(b)(4) of the Bankruptcy Code, rejection of executory contracts and unexpired non-residential leases pursuant to Sections 1123(b)(2) and 356 of the Bankruptcy Code, and resolution of disputed, contingent and unliquidated claims. All cash necessary to fund the consummation of the Prepackaged Plan will be provided from the proceeds of FCMC Sale Payment ($250,000 plus payment on the promissory note of $1,109,000 payable over a period of five years with interest at 3.25% per annum, with Thomas Axon, Chairman and President, and shareholder of the the Company and FCMC, guaranteeing the payment obligations under the promissory note) and any other assets. A copy of the Confirmation Order is available for free at: http://is.gd/1lgkB5 About Franklin Credit Franklin Credit Holding Corporation (OTC BB: FCMC) -- http://www.franklincredit.com/-- is a specialty consumer finance company primarily engaged in the servicing and resolution of performing, re-performing and nonperforming residential mortgage loans, including specialized loan recovery servicing, and in the analysis, pricing, due diligence and acquisition of residential mortgage portfolios for third parties. The Company's executive, administrative and operations offices are located in Jersey City, N.J. Franklin Credit Holding Corporation filed a Chapter 11 bankruptcy petition (Bankr. D. N.J. Case No. 12-24411) in Newark, New Jersey, on June 4, 2012. Franklin Credit also filed a prepackaged plan. The Debtor is seeking a combined hearing on the plan and the explanatory disclosure statement. Judge Donald H. Steckroth presides over the case. Lawyers at McCarter & English, LLP, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and $500 million to $1 billion in debts. In a recent regulatory filing with the U.S. Securities and Exchange Commission, Franklin Credit Holding's balance sheet at March 31, 2012, showed $29.02 million in total assets, $874.02 million in total liabilities, and a $845 million total stockholders' deficit. The petition was signed by Paul Colasono, executive vice president and chief financial officer. The Plan provides for the liquidation of its assets -- the ownership of 80% of the stock in non-debtor Franklin Credit Mortgage Corp. -- with the proceeds or the fair market value of the assets being distributed in accordance with the Bankruptcy Code. The fair market value of FCMC will be distributed through the payment of $250,000 in cash on the effective date of the Plan and an aggregate $1.11 million over a period of five years, evidenced by a promissory note guaranteed by Thomas J. Axon, the chairman and president of the Debtor and FCMC, and the owner of 20% of the common shares of FCMC, and 45.2% of the common shares of the Debtor. The payments will be made by FCMC, and will be the primary source of cash for distributions contemplated by the Plan. IN exchange for the payment by FCMC, the Debtor's interests in the stock of FCMC will be distributed, pro-rata, to holders of allowed interests. The Plan provides for payment in full of allowed priority non-tax claims. The secured claims of the legacy lenders totaling $820.6 million will be unaltered by the Plan. Huntington National Bank and Huntington Finance LLC will release the Debtor from any obligations in connection with their secured claims of $4.7 million. Holders of general unsecured claims estimated to total $1.9 million will receive their pro rata share of the proceeds of the liquidation of the remaining assets. FREEDOM ENVIRONMENTAL: Posts $390,100 Net Loss in Q1 2012 --------------------------------------------------------- Freedom Environmental Services, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $390,104 on $1.17 million of revenues for the three months ended March 31, 2012, compared with a net loss of $354,086 on $1.39 million of revenues a year earlier. The Company's balance sheet at March 31, 2012, showed $2.68 million in total assets, $3.05 million in total liabilities, and a stockholders' deficit of $368,588. As reported in the TCR on July 10, 2012, Tarvaran Askelson & Company, LLP, in Laguna Niguel, California, expressed substantial doubt about Freedom Environmental's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred significant losses. "The Company's viability is dependent upon its ability to obtain future financing and the success of its future operations." A copy of the Form 10-Q is available for free at: http://is.gd/llzpRO Orlando, Fla., Freedom Environmental Services, Inc., provides wastewater management and recycling services to its customers through its different divisions. GEL LLC: Court Says Chapter 22 Cases Filed in Bad Faith ------------------------------------------------------- Chief Bankruptcy Judge Carla E. Craig dismissed the Chapter 11 cases of GEL, LLC and GRL, LLC, with prejudice pursuant to 11 U.S.C. Sections 362(d)(4), 707(A) and 1112(b), at the behest of Archer Capital Fund, L.P. Judge Craig said multiple grounds to dismiss exist, including the failure of the Debtors comply with their reporting obligations, the failure of the Debtors to maintain insurance and numerous indicia of a bad faith filing. GEL LLC owns real property in Queens, New York, located at 29-08 Hoyt Avenue South, Astoria, New York, and 29-10 Hoyt Avenue South, Astoria, New York (Block 838, Lots 3 and 4, respectively). GRL LLC owns two parcels of real property in Queens located at 3276/3278 31st Street, Astoria, New York (Block 587, Lot 68). The Debtors are owned and operated by members of the Lambrakis family, including George Lambrakis or his two brothers Gregory Lambrakis and Alexander Lambrakis. The GRL Property consists of a single story building currently used as a medical office by Emmanuel Lambrakis, who is the father of the principal of the Debtors. An affiliate of the Debtors, Eagle Realty LLC, owned real property in Queens located at 178-02/178-18 Hillside Avenue, Jamaica, New York, 178-20/178-36 Hillside Avenue, Jamaica, New York and 881- 0/88-16 179th Street, Jamaica, New York (Block 9913, Lots 25, 35, and 41 respectively). GEL LLC and GRL LLC filed pro se Chapter 11 petitions (Bankr. E.D.N.Y. Case Nos. 11-47910 and 11-47911) on Sept. 16, 2011. Eagle Realty filed a separate pro se Chapter 11 petition (Bankr. E.D.N.Y. Case No. 11-47909) on the same day. Eagle's petition was dismissed with prejudice by the Court on Dec. 23, 2011. The dismissal order bars Eagle from filing any future petitions under the Bankruptcy Code. On March 8, 2007, Archer made a loan in the principal sum of $2,600,000 to the Debtors. The Debtors failed to make full payment on the GEL/GEL Loan on April 1, 2008. On Nov. 10, 2008, Archer commenced an action to foreclose on the GEL/GRL Mortgage in the Supreme Court of the State of New York, Queens County, against the Debtors, the Guarantors, and other defendants with a purported interest in the Properties. The state court appointed a receiver to manage the Properties. A referee appointed under state law determined that a sum of $2,406,528 was due Archer as of March 22, 2011, plus per diem interest every day thereafter. Emmanuel Lambrakis is the current tenant at the GRL Property, and is the subject of a landlord tenant proceeding for the non-payment of rent. Insurance on the GRL Property lapsed on Dec. 26, 2011. On Aug. 5, 2011, a judgment was entered in the Foreclosure Action, and in connection therewith, a foreclosure sale was scheduled for Sept. 16, 2011. On the Original Sale Date, the Debtors filed their first Chapter 11 petitions thereby staying the foreclosure sale. Upon the motion of the U.S. Trustee, the Court entered orders on Jan. 27, 2012 dismissing petitions of GRL and GEL. About one month after the dismissal of the initial Chapter 11 petitions, the Debtors each filed another chapter 11 petition (Case Nos. 12-108011 and 12-10800), this time in the U.S. Bankruptcy Court for the Southern District of New York. After a hearing, Judge Alan L. Gropper determined that venue was improper in the Southern District of New York and ordered that the cases be transferred to the Eastern District (Bankr. E.D.N.Y. Case Nos. 12-41911 and 12-41913). A copy of the Court's July 30, 2012 Decision is available at http://is.gd/U2EwPwfrom Leagle.com. Karamvir Dahiya, Esq., at Dahiya Law Offices, LLC, represents the Debtors. Jerold C. Feuerstein, Esq., at Kriss & Feuerstein LLP, in New York, NY, represents counsel for Archer Capital Fund, L.P. GENERAL AUTO: Hires Cassinelli Jackson as Appraiser --------------------------------------------------- General Auto Building, LLC, asks for permission from the U.S. Bankruptcy Court to employ Cassinelli Jackson, LLC, as appraiser for the Debtor. The Debtor was formed to renovate and lease commercial property located at 411 NW Park Avenue, in Portland, Oregon. As of the petition date, the Debtor has developed virtually all of the General Automotive Building and has leased roughly 98% of the building's space to retail and commercial tenants. The Debtor continues to seek tenants for the remaining spaces. The professional services Cassinelli Jackson is to render include the completion of a summary appraisal report to estimate the "as is market value" of the subject property, which will be prepared to conform to the Uniform Standards of Professional Appraisal Practice. Cassinelli Jackson also will prepare for and provide testimony at hearings in this bankruptcy case, to the extent necessary. Subject to Court approval, the Debtor has agreed to compensate Cassinelli Jackson with a flat fee of $3,500 for the summary appraisal report. To the extent Cassinelli Jackson provides additional consultation services after the appraisal is completed or testifies on the Debtor's behalf, Cassinelli Jackson will be compensated at the rate of $200 per hour. The Debtor attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About General Auto Building General Auto Building, LLC, filed for Chapter 11 bankruptcy (Bankr. D. Ore. Case No. 12-31450) on March 2, 2012. The Debtor is an Oregon limited liability company formed in 2007 with its principal place of business in Spokane, Washington. It was formed to renovate and lease its namesake commercial property located at 411 NW Park Avenue, Portland, Oregon. As of the Petition date, the Debtor has developed virtually all of the General Automotive Building and has leased approximately 98% of the building's space to retail and commercial tenants. The Debtor continues to seek tenants for the remaining spaces. Judge Elizabeth L. Perris presides over the case. Albert N. Kennedy, Esq., and Ava L. Schoen, Esq., at Tonkon Torp LLP, serve as the Debtor's counsel. The Debtor has scheduled $10,010,620 in total assets and $13,519,354 in total liabilities. The U.S. Trustee was unable to appoint an official committee of unsecured creditors in the case. GENTA INC: Has Go Signal to Start Tesetaxel Clinical Trial ---------------------------------------------------------- Genta Incorporated has received formal notice from the drug regulatory authority of the People's Republic of China that the Company has received approval to start clinical trials with tesetaxel, its lead clinical compound, in China. SFDA has requested and approved a dose-ranging study of the combination of capecitabine plus tesetaxel, up to and including the dose used in a pivotal randomized trial (known as TESEGAST), as well as subsequent participation by China in the TESEGAST study. The TESEGAST study is designed to evaluate the safety and activity of tesetaxel plus capecitabine compared with capecitabine plus placebo in patients with advanced gastric cancer. Gastric cancer is the second most common tumor type in China. About Genta Incorporated Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB: GNTA) -- http://www.genta.com/-- is a biopharmaceutical company engaged in pharmaceutical (drug) research and development. The Company is dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. In its report on the financial statements for 2011, EisnerAmper LLP, in Edison, New Jersey, noted that the Company's recurring losses from operations and negative cash flows from operations and current maturities of convertible notes payable raise substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $69.42 million in 2011, compared with a net loss of $167.30 million during the prior year. The Company's balance sheet at March 31, 2012, showed $4.56 million in total assets, $34.74 million in total liabilities and a $30.17 million total stockholders' deficit. Bankruptcy Warning According to the Form 10-K for the year ended Dec. 31, 2011, the Company in September 2011, issued $12.7 million of units, consisting of $4.2 million of senior secured convertible notes and $8.5 million of senior secured cash collateralized convertible notes. In connection with the sale of the units, the Company also issued two types of debt warrants in an amount equal to 100% of the purchase price for each unit. The Company had direct access to $4.2 million of the proceeds, and the remaining $8.5 million of the proceeds were placed in a blocked account as collateral security for the $8.5 million senior secured cash collateralized convertible notes. Presently, with no further financing, the Company projects that it will run out of funds during the first quarter of 2012. The Company currently does not have any additional financing in place. If it is unable to raise additional funds, the Company could be required to reduce its spending plans, reduce its workforce, license one or more of its products or technologies that it would otherwise seek to commercialize itself, sell some or all of its assets, cease operations or even declare bankruptcy. There can be no assurance that the Company can obtain financing, if at all, or raise those additional funds, on terms acceptable to it. GENTA INC: Warns of Possible Bankruptcy Filing ---------------------------------------------- Genta Inc., a biopharmaceutical company focused on treatments for cancer, warned that it may need to seek bankruptcy protection if it can't obtain financing. "The company has actively sought additional financing and a strategic partner; however, to date those efforts have been unsuccessful. If the company cannot secure financing or a strategic partner, the company may file for reorganization under bankruptcy," Genta said in a filing with the Securities and Exchange Commission on July 27. About Genta Incorporated Berkeley Heights, New Jersey-based Genta Incorporated (OTC BB: GNTA) -- http://www.genta.com/-- is a biopharmaceutical company engaged in pharmaceutical (drug) research and development. The Company is dedicated to the identification, development and commercialization of novel drugs for the treatment of cancer and related diseases. In its report on the financial statements for 2011, EisnerAmper LLP, in Edison, New Jersey, noted that the Company's recurring losses from operations and negative cash flows from operations and current maturities of convertible notes payable raise substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $69.42 million in 2011, compared with a net loss of $167.30 million during the prior year. The Company's balance sheet at March 31, 2012, showed $4.56 million in total assets, $34.74 million in total liabilities and a $30.17 million total stockholders' deficit. Bankruptcy Warning According to the Form 10-K for the year ended Dec. 31, 2011, the Company in September 2011, issued $12.7 million of units, consisting of $4.2 million of senior secured convertible notes and $8.5 million of senior secured cash collateralized convertible notes. In connection with the sale of the units, the Company also issued two types of debt warrants in an amount equal to 100% of the purchase price for each unit. The Company had direct access to $4.2 million of the proceeds, and the remaining $8.5 million of the proceeds were placed in a blocked account as collateral security for the $8.5 million senior secured cash collateralized convertible notes. Presently, with no further financing, the Company projects that it will run out of funds during the first quarter of 2012. The Company currently does not have any additional financing in place. If it is unable to raise additional funds, the Company could be required to reduce its spending plans, reduce its workforce, license one or more of its products or technologies that it would otherwise seek to commercialize itself, sell some or all of its assets, cease operations or even declare bankruptcy. There can be no assurance that the Company can obtain financing, if at all, or raise those additional funds, on terms acceptable to it. GORDIAN MEDICAL: Exclusive Plan Filing Period Extended to Oct. 31 ----------------------------------------------------------------- Judge Mark S. Wallace of the U.S. Bankruptcy Court for the Central District of California has extended the exclusive plan filing period of Gordian Medical, Inc., dba American Medical Technologies, up to and including Oct. 31, 2012. The Debtor's Exclusive Solicitation Period is extended up to and including Dec. 30, 2012. The Debtor said the extension of the Exclusive Periods will facilitate its ability to reach a resolution, whether by agreement or through litigation, of its dispute with The Centers for Medicare & Medicaid Services pertaining to CMS's refusal to pay for certain wound dressings sold by the Debtor to residents of nursing home facilities and the related withholding from the Debtor of certain Medicare payments, which payments account for a substantial amount of the Debtor's revenue. Although the Debtor has been attempting to negotiate a resolution of the issues with CMS, no such resolution has yet been achieved, therefore, the Debtor will not be in a position to file a plan within the original 120 day exclusive plan filing period. About Gordian Medical Gordian Medical, Inc., dba American Medical Technologies, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-12339) in Santa Ana, California, on Feb. 24, 2012, after Medicare refunds were halted. The Debtor estimated assets and debts of up to $50 million. It has $4.3 million in cash and $31.1 million in receivables due from Medicare. Irvine, California-based Gordian Medical provides supplies and services to treat serious wounds. The company has active relationships with and serves patients in more than 4,000 nursing facilities in 49 states with the heaviest concentration of the nursing homes being in the south and southeast sections of the United States. Judge Mark S. Wallace oversees the case. Pachulski Stang Ziehl & Jones LLP serves as the Debtor's counsel. GlassRatner Advisory & Capital Group LLC serves as the Debtor's financial advisor. The U.S. Trustee appointed five members to the Official Committee of Unsecured Creditors. The Committee is represented by Landau Gottfried & Berger LLP. GYNGER L. WILLIAMS: Wells Fargo Has Green Light to Foreclose ------------------------------------------------------------ Wells Fargo won relief from the automatic stay in the Chapter 11 case of Gynger L. Williams to foreclose on real property commonly referred to as DRW Farms. The Debtor is a joint tenant with the right of survivorship with Patty S. Williams. The property is used to operate a poultry farm. The Debtor and P. Williams are indebted to Wells Fargo pursuant to a commercial mortgage note and a commercial construction mortgage note both of which are dated Jan. 1, 2007. The original principal balance of the notes totaled $1,362,100. The notes are secured by a commercial mortgage and security agreement dated Jan. 17, 2007, granting Wells Fargo a first priority mortgage and security interest in the poultry farm, among other things. The loans matured on Jan. 17, 2012. The Debtor and P. Williams defaulted on the loans by failing to pay the balance due on or before maturity date. Gynger Lea Williams filed a voluntary Chapter 11 petition Bankr. N.D. Ala. Case No. 12-81268) on April 17, 2012. Patty S. Williams, the co-owner of the subject property and co-obligor, is not in bankruptcy. Wells Fargo asserts that the Debtor has no equity in the collateral. As of the petition date, the balance due on the loans was $1,326,041. Post-petition, Wells Fargo has received roughly $240,000 from additional loan collateral which is due to be applied to the loan balance. At the hearing on this matter, the Debtor turned over a check to Wells Fargo for insurance proceeds totaling $150,000 issued to a non-debtor third party to be applied to the debt. Wells Fargo was also scheduled to foreclose on additional loan collateral owned separately by P. Williams. Counsel for Wells Fargo stated in court that the creditor anticipated a credit bid of $90,000. With these reductions totaling $240,000, the current balance due Wells Fargo is approximately $1,086,041. In her petition, the debtor listed the value of her one-half interest in the real property securing Wells Fargo's loan as $700,000. A recent appraisal obtained by Wells Fargo values the collateral at $980,000. Using either the value listed by the debtor on her schedules of her one-half interest totaling $700,000 or Wells Fargo's appraisal value of $980,000, the Court noted the Debtor clearly has no equity in the property even after receiving credit for the $240,000 in post-petition debt reduction. A copy of Bankruptcy Judge Jack Caddell's July 30, 2012 Memorandum Opinion is available at http://is.gd/qjpDGufrom Leagle.com. HARPER BRUSH: U.S. Trustee Appoints 5-Member Creditors Panel ------------------------------------------------------------ Daniel M. McDermott, United States Trustee for Region 12, appointed three unsecured creditors to serve on the Committee of Unsecured Creditors of Harper Brush Works, Inc.: 1. Whitley Monahan Handle Co Attn: Jim Monahan 202 North Oak Street Arcola, IL 61910 Tel: (217) 268-5755 Fax: (217) 268-3113 E-mail: Jim_Monahan@thomasmonahan.com 2. SourceCut Industries, Inc. Attn: Brad Wiedenhoeft 51149 Whitetail Rd Osseo, WI Tel: (715) 597-6525 Fax: (715) 597-6625 Email: bw@sourcecut.co 3. Robert Jensen P.O. Box 1061 Muscatine, IA 52761 Tel: (563) 263-6589 Fax: (563) 263-6604 Email: bjensen@tempassociates.com 4. Fairfield Economic Development Attn: John Morrissey 204 West Broadway Fairfield, IA Tel: (641) 472-3436 (217) 268-5755 Email: jmorrisseymblow@iowatelecom.net 5. Prologis Industrial Attn: Pia Thompson 222 North LaSalle Street Suite 800, Chicago, IL 60601 Tel: (312) 899-1630 Cell: (312) 622-6109 Jim Monahan is designated as Acting Chairperson of said Committee pending selection by the Committee members of a permanent Chairperson. About Harper Brush Works Fairfield, Iowa-based Harper Brush Works, Inc., filed a Chapter 11 petition (Bankr. S.D. Iowa) in Des Moines on May 29, 2012. Family-owned Harper Brush -- http://www.harperbrush.com/-- provides more than 1,000 products, including pushbrooms, mops, floor squeegees, automotive brushes, dust pans, and buckets. The Company disclosed assets of $10.4 million against debt totaling $10 million, including $6 million owing to secured creditors. Judge Anita L. Shodeen presides over the case. Donald F. Neiman, Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C., serve as bankruptcy counsel to the Debtor. Marc B. Ross serves as the Debtor's Chief Restructuring Officer. HARPER BRUSH: Wants Until Sept. 26 to Use Cash Collateral --------------------------------------------------------- Harper Brush Works, Inc., asks the U.S. Bankruptcy Court for the Southern District of Iowa for final authority to use cash collateral securing obligations to Secured Creditors UMB Bank and the Iowa Economic Development Authority, pursuant to a proposed budget, for 120 days from the Petition Date, or until Sept. 26, 2012, for the payment of its usual, ordinary, customary, regular, and necessary post-petition expenses incurred in the ordinary course of its business and for payment of those pre-petition claims approved and allowed by Order of the Bankruptcy Court. As proposed, Secured Lenders are granted replacement security interests in, and liens on, the same type of assets which constitute their prepetition Collateral that are acquired postpetition by the Debtor. UMB Bank will be entitled to a super-priority claim that will have priority in the Debtor's bankruptcy case over all priority claims and unsecured claims against the Debtor and its estate, now existing or hereafter arising, of any kind or nature whatsoever including, without limitation, administrative expenses of the kinds specified in or ordered pursuant to Sections 105, 326, 328, 330, 331, 503(a), 503(b), 506(c), 507(a), 507(b), 546(c), 726(b), and 1114 of the Bankruptcy Code in the amount of $20,000. All proceeds received from the sale of Collateral in the ordinary course of business, and the collection of accounts receivable and profits, will be deposited in the Debtor's DIP Accounts at Iowa State Bank and Trust of Fairfield, Iowa. The Debtor proposes that the existing rights, liens and interests of the Secured Creditors will attach to the funds deposited into the DIP Accounts with the same priority that such rights, liens and interests had in the other accounts at UMB prepetition. At a scheduled hearing on June 14, 2012, the Bankruptcy Court authorized the Debtor to continue using cash collateral on an interim basis through and including July 2, 2012, and continuing the hearing on final use of cash collateral until a hearing on July 2, 2012. The Debtor has advised the Court and its creditors that it is actively seeking secured DIP Financing to fund its operations through plan confirmation, in lieu of funding such operations with cash collateral, and that it is actively engaged in good-faith discussions with several third-party lenders who have expressed interest in providing the Debtor with DIP Financing. A copy of the proposed budget is available for free at: http://bankrupt.com/misc/harperbrush.doc91.pdf The Official Committee of Unsecured Creditors appointed in the Debtor's bankruptcy case supports the Debtor's request for final use of cash collateral. The Committee tells the Court that the pre-petition secured lenders will not be prejudiced by the Debtor's use of cash collateral for a limited period of time, based upon a reasonable budget. About Harper Brush Works Fairfield, Iowa-based Harper Brush Works, Inc., filed a Chapter 11 petition (Bankr. S.D. Iowa) in Des Moines on May 29, 2012. Family-owned Harper Brush -- http://www.harperbrush.com/-- provides more than 1,000 products, including pushbrooms, mops, floor squeegees, automotive brushes, dust pans, and buckets. The Company disclosed assets of $10.4 million against debt totaling $10 million, including $6 million owing to secured creditors. Judge Anita L. Shodeen presides over the case. Donald F. Neiman, Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C., serve as bankruptcy counsel to the Debtor. Marc B. Ross serves as the Debtor's Chief Restructuring Officer. HARPER BRUSH: Can Use Cash Through December ------------------------------------------- The Gazette reports a bankruptcy judge has given Harper Brush Works of Fairfield at least four more months to operate in bankruptcy. According to the report, UMB Bank of Kansas City, the largest secured creditor of Harper Brush Works, had objected to the company's plans to borrow money from another lender so it can continue operations. UMB has declined to loan additional funds to Harper. The lender also objected to the Company's plans to use payments from customers and other "cash collateral" to fund continuing operations. The report says Bankruptcy Judge Anita Shodeen, however, allowed Harper Brush Works to use operating cash coming into the company until Dec. 14. She said the deadline could be reconsidered under several conditions. They included financing agreements worked out amicably between UMB Bank and Harper Brush Works. The report notes the judge rejected Harper Brush Work's petition to obtain DIP financing. The company's financing terms had come under fire from creditors as too costly. The Company has filed motions seeking the judge's approval to hire a financial adviser and an investment banker. The investment banker would help work out a possible sale of the business, according to the report. The report notes Fairfield Economic Development Association Executive Director Tracy Vance is a member of the committee that represents unsecured creditors in the bankruptcy case. About Harper Brush Works Fairfield, Iowa-based Harper Brush Works, Inc., filed a Chapter 11 petition (Bankr. S.D. Iowa) in Des Moines on May 29, 2012. Family-owned Harper Brush -- http://www.harperbrush.com/-- provides more than 1,000 products, including pushbrooms, mops, floor squeegees, automotive brushes, dust pans, and buckets. The Company disclosed assets of $10.4 million against debt totaling $10 million, including $6 million owing to secured creditors. Judge Anita L. Shodeen presides over the case. Donald F. Neiman, Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C., serve as bankruptcy counsel to the Debtor. Marc B. Ross serves as the Debtor's Chief Restructuring Officer. HD SUPPLY: To Launch Track-On Offering of $200-Mil. Senior Notes ---------------------------------------------------------------- HD Supply, Inc., intends to commence a tack-on offering of an additional $200 million aggregate principal amount of its 8 1/8% Senior Secured First Priority Notes due 2019. The Additional Notes will be issued under the indenture pursuant to which HD Supply previously issued $950 million aggregate principal amount of 8 1/8% Senior Secured First Priority Notes due 2019, all of which remains outstanding. There can be no assurance that the proposed offering of Additional Notes will be completed. HD Supply intends to use the proceeds from the sale of the Additional Notes for general corporate purposes and, pending that allocation, the entire net proceeds will be applied to reduce outstanding borrowings under its revolving ABL facility. The Additional Notes will be offered in a private offering exempt from the registration requirements of the United States Securities Act of 1933, as amended. The Additional Notes will be offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The Additional Notes will not be and have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. About HD Supply HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the largest North American wholesale distributors supporting residential and non-residential construction and to a lesser extent electrical consumption and repair and remodeling. HDS also provides maintenance, repair and operations services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates through approximately 800 locations throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. The Company reported a net loss of $543 million for the year ended Jan. 29, 2012, a net loss of $619 million for the year ended Jan. 30, 2011, and a net loss of $514 million on $6.94 billion of net sales for the year ended Jan. 31, 2010. The Company's balance sheet at April 29, 2012, showed $6.32 billion in total assets, $7.10 billion in total liabilities and a $780 million total stockholders' deficit. * * * HD Supply carries 'Caa2' probability of default rating and corporate family rating, with negative outlook, from Moody's Investors Service, and a 'B' corporate credit rating, with negative outlook, from Standard & Poor's Ratings Services. In April 2010, when Moody's downgraded the ratings to 'Caa2' from 'Caa1', it said, "The downgrade results from Moody's views that the construction industry, the main driver of HDS' revenues, will continue to be weak for the foreseeable future, pressuring the company's ability to generate meaningful levels of earnings and free cash flow relative to its debt." HRK HOLDINGS: Files Schedules of Assets and Liabilities ------------------------------------------------------- HRK Holdings LLC filed with the Bankruptcy Court for the Middle District of Florida its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $33,000,000 B. Personal Property $366,529 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $22,391,649 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $3,677,558 ----------- ----------- TOTAL $33,366,529 $26,069,208 A full text copy of the schedules of assets and liabilities is available free at http://bankrupt.com/misc/HRK_HOLDINGS_sal.pdf About HRK Holdings Based in Palmetto, Florida, HRK Holdings LLC owns real property in Manatee County that accommodates a phosphogypsum stack system, a portion of which is used as an alternate disposal area for the management of dredge materials pursuant to a contract with Port Manatee and as authorized under an administrative agreement with the Florida Department of Environmental Protection. HRK Holdings and its affiliate, HRK Industries, LLC, filed for Chapter 11 protection (Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on June 27, 2012. Judge K. Rodney May oversees the case. Barbara A. Hart, Esq., at Stichter, Riedel, Blain & Prosser, P.A., represents the Debtors. The petitions were signed by William F. Harley, III, managing member. HRK HOLDINGS: Proposes $125,000 DIP Financing From Arsenal ---------------------------------------------------------- HRK Holdings LLC and HRK Industries, LLC, ask the U.S. Bankruptcy Court for authority to borrow $125,000 on a secured basis from Arsenal Group, LLC. Arsenal Group owns all of the membership interests in HRK Industries and HRK Holdings. Arsenal Group is also an unsecured creditor of HRK Holdings. The Debtors have on-going sales and operations and the Debtors have filed a motion to use cash collateral. The Debtors anticipate that revenues during certain weeks will be insufficient to pay debts during such weeks. The Debtors have filed a motion seeking to approve the sale of certain real property but need to borrow funds to supplement cash flow until the sale closes. The DIP Lender has agreed to make funds available to the Debtors to supplement cash flow and pay the following obligations set forth on the Budget. The DIP Loan will be in the maximum amount of $125,000 with interest accruing at the rate of 9%. Default interest will be 18% per annum. The Debtors shall pay an unused line fee of 3%. The Debtors may repay the DIP Loan in whole or in part from excess cash. The termination date for the DIP Loan will be 150 days from the date of the entry of the final DIP order, unless terminated earlier pursuant to the occurrence of an event of default or renewed at the option of the DIP Lender. The Debtors' obligation to repay the DIP Lender under the terms of the DIP Loan will be accorded a first lien on all unencumbered assets and a junior lien on all assets encumbered by valid, pre-petition liens. The DIP Lender will not be granted a lien on any claim or cause of action. A preliminary hearing was scheduled July 12. About HRK Holdings Based in Palmetto, Florida, HRK Holdings LLC owns real property in Manatee County that accommodates a phosphogypsum stack system, a portion of which is used as an alternate disposal area for the management of dredge materials pursuant to a contract with Port Manatee and as authorized under an administrative agreement with the Florida Department of Environmental Protection. HRK Holdings and its affiliate, HRK Industries, LLC, filed for Chapter 11 protection (Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on June 27, 2012. Judge K. Rodney May oversees the case. Barbara A. Hart, Esq., at Stichter, Riedel, Blain & Prosser, P.A., represents the Debtors. HRK Holdings estimated both assets and debts of between $10 million and $50 million. The petitions were signed by William F. Harley, III, managing member. INDIANAPOLIS DOWNS: CEO Objects to Racino's Confirmation Plan ------------------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that a group of creditors led by Indianapolis Downs LLC's own chairman and CEO objected to the confirmation of the company's proposed restructuring Tuesday, claiming the plan being solicited by the bankrupt horse track and casino contains multiple defects. According to Bankruptcy Law360, Chairman and CEO Ross Mangano filed the objection in Delaware bankruptcy court on behalf of himself and several family trusts -- collectively known as the Oliver parties -- that hold some $40 million of unsecured notes issued by Indianapolis Downs. About Indianapolis Downs Indianapolis Downs LLC operates Indiana Live -- http://www.indianalivecasino.com/-- a combined race track and casino at a state-of-the-art 283 acre Shelbyville, Indiana site. It also operates two satellite wagering facilities in Evansville and Clarksville, Indiana. Total revenue for 2010 was $270 million, representing an 8.7% increase in 2009. The casino captured 53% of the Indianapolis market share. In July 2001, Indianapolis Downs was granted a permit to conduct a horse track operation in Shelvyville, Indiana, and started operating the track in 2002. It was granted permission to operate the casino at the racetrack operation in May 2007. The casino began operations in July 2010. Indianapolis Downs and subsidiary, Indianapolis Downs Capital Corp., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11046) in Wilmington, Delaware, on April 7, 2011. Indianapolis Downs estimated $500 million to $1 billion in assets and up to $500 million in debt as of the Chapter 11 filing. According to a court filing, the Debtor owes $98,125,000 on a first lien debt. It also owes $375 million on secured notes and $72.6 million on subordinated notes. Matthew L. Hinker, Esq., Scott D. Cousins, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP in Wilmington, Delaware, have been tapped as counsel to the Debtors. Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, is the conflicts counsel. Lazard Freres & Co. LLC is the investment banker. Bose Mckinney & Evans LLP and Bose Public Affairs Group LLC serve as special counsel. Kobi Partners, LLC, is the restructuring services provider. Epiq Bankruptcy Solutions is the claims and notice agent. INFINITY CUSTOM: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Infinity Custom Estates II, LLC 7700 Congress Avenue, #3112 Boca Raton, FL 33487 Bankruptcy Case No.: 12-28196 Chapter 11 Petition Date: July 30, 2012 Court: U.S. Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtor's Counsel: Steven E. Wallace, Esq. THE WALLACE LAW GROUP, P.L. 1375 Gateway Boulevard Boynton Beach, FL 33426 Tel: (561) 767-4413 E-mail: rerun34440@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 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flsb12-28196.pdf The petition was signed by Edward Suh, member. INOVA TECHNOLOGY: Incurs $1.2 Million Net Loss in Fiscal 2012 ------------------------------------------------------------- Inova Technology, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $1.24 million on $21.20 million of revenue for the year ended April 30, 2012, compared with a net loss of $3.35 million on $22.12 million of revenue during the prior year. The Company's balance sheet at April 30, 2012, showed $8.67 million in total assets, $19.81 million in total liabilities and a $11.14 million total stockholders' deficit. MaloneBailey, LLP, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2012. The independent auditors noted that Inova incurred losses from operations for the years ended April 30, 2012, and 2011 and has a working capital deficit as of April 30, 2012, which raise substantial doubt about Inova's ability to continue as a going concern. A copy of the Form 10-K is available for free at: http://is.gd/azAPqJ About Inova Technology Based in Las Vegas, Nevada, Inova Technology, Inc. (OTC BB: INVA) -- http://www.inovatechnology.com/-- through its subsidiaries, provides information technology (IT) consulting services in the United States. It also manufactures radio frequency identification (RFID) equipment; and provides computer network solutions. The company was formerly known as Edgetech Services Inc. and changed its name to Inova Technology, Inc., in 2007. IOWORLDMEDIA INC: Amends Terms & Designations of Preferred Stock ---------------------------------------------------------------- IOWorldMedia, Incorporated, and holders of the Company's Preferred Stock both agreed to amend and restate in their entirety the terms and designations of the Preferred Stock to read substantially as follows: 1. All or a portion of the Preferred Stock will be convertible at the option, in its sole and absolute discretion, of the Company into shares of the Company's common stock at $0.0606 per share of Common Stock. 2. The holder of the Preferred Stock will have the right to initiate a conversion thereof at any time at the Conversion Price, provided, however, that no such conversion would cause the number of shares of Common Stock issued and outstanding to exceed the figure that is 50,000,000 less than the authorized number of shares of Common Stock. All prior conversion formulas are null and void. 3. To the extent any shares of Preferred Stock remain issued and outstanding on the one-year anniversary of this letter agreement, the Preferred Stock will begin accruing interest at the rate of 5%. The original terms provide that: 1. Upon a Change of Control Event or an equity raise for the company, or its subsidiaries, of $20,000,000 or greater, and at the discretion of the New Control party or equity party either: a. Cash redemption with an 8% per annum accrued interest rate, or b. Stock conversion redemption with a 50% premium to the preceding 20 day average closing price of the Company's Common Stock prior to a Change of Control Event or equity infusion. c. Any combination of 1(a) or 1(b) above. 2. Conversion rights into the Company's Common Stock after Two Years from issue with a 25% discount to the preceding 20 day average closing price of the Company's Common Stock. About ioWorldMedia Tampa, Fla.-based ioWorldMedia, Incorporated, operates three primary internet media subsidiaries: Radioio, ioBusinessMusic, and RadioioLive. As reported in the TCR on April 20, 2012, Patrick Rodgers, CPA, PA, in Altamonte Springs, Fla., expressed substantial doubt about ioWorldMedia's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditor noted that the Company has suffered recurring losses from operations and negative cash flows from operations the past two years. The Company's balance sheet at Dec. 31, 2011, showed $1,952,418 in total assets, $1,863,459 in total liabilities, preferred stock of $3,025, additional paid-in capital of $5,769,279, and a stockholders' deficit of $5,683,345. HUGHES TELEMATICS: Communications Investors Owns 0% Equity Stake ---------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Communications Investors LLC and its affiliates disclosed that, as of July 26, 2012, they do not beneficially own any shares of common stock of HUGHES Telematics, Inc. Communications Investors previously reported beneficial ownership of 53,814,291 common shares or a 51.1% equity stake as of Oct. 7, 2011. On July 26, 2012, Verizon Telematics Inc., merged with and into Hughes Telematics pursuant to the Agreement and Plan of Merger dated June 1, 2012. Upon the consummation of the Merger, all of HUGHES Telematics' common stock owned of record by Communications Investors LLC, PLASE HT, LLC, and Apollo Management V, L.P., that were not currently in escrow were converted into the right to receive $12.00 in cash per share. The outstanding shares of the Company's common stock that were held of record by Communications Investors and PLASE, but were held in escrow as of July 26, 2012, were canceled without any consideration being paid for those shares. A copy of the amended filing is available for free at: http://is.gd/IppugL About HUGHES Telematics Atlanta, Ga.-based HUGHES Telematics, Inc. is a telematics services company that provides a suite of real-time voice and data communications services and applications for use in vehicles and is developing additional applications for use within and outside of the automotive industry. HUGHES reported a net loss of $85.35 million in 2011, a net loss of $89.56 million in 2010, and a net loss of $163.66 million in 2009. The Company's balance sheet at March 31, 2012, showed $110.18 million in total assets, $211.81 million in total liabilities, and a $101.62 million total stockholders' deficit. In its report on the Company's 2011 financial results, PricewaterhouseCoopers LLP, in Atlanta, Georgia, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring losses from operations and has a net capital deficiency. INOVA TECHNOLOGY: MaloneBailey LLP Raises Going Concern Doubt ------------------------------------------------------------- Inova Technology, Inc., filed on July 30, 2012, its annual report on Form 10-K for the fiscal year ended April 30, 2012. MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about Inova's ability to continue as a going concern. The independent auditors noted that Inova incurred losses from operations for the years ended April 30, 2012, and 2011, and has a working capital deficit as of April 30, 2012. The Company reported a net loss of $1.25 million on $21.21 million of revenues for fiscal 2012, compared with a net loss of $3.35 million on $22.12 million of revenues for fiscal 2011. The Company's balance sheet at April 30, 2012, showed $8.67 million in total assets, $19.81 million in total liabilities, and a stockholders' deficit of $11.14 million. A copy of the Form 10-K is available for free at: http://is.gd/azAPqJ Las Vegas, Nev.-based Inova Technology, Inc., is a technology holding company. The Company operates in three segments and owns 100% of all subsidiaries: (1) providing information technology (IT) solutions and services through its Edgetech Services subsidiary, (2) providing radio frequency identification (RFID) products through its Trakkers (Montana) and RightTag (California) subsidiaries, and (3) providing network solutions through its Desert Communications subsidiary (Texas). INTERNATIONAL TEXTILE: Inks Debt Swap Agreement with WLR -------------------------------------------------------- International Textile Group, Inc., entered into a Debt Exchange Agreement with each of WLR Recovery Fund III, L.P., WLR Recovery Fund IV, L.P., and WLR IV Parallel ESC, L.P. Pursuant to the Agreement, the Investors released the Company in full from the Company's obligations to the Investors under approximately $112.5 million in Amended and Restated Unsecured Subordinated Promissory Notes, and the Company cancelled, extinguished and discharged those obligations, in exchange for the issuance to the Investors of an aggregate of 112,469.2232 shares of a newly designated series of preferred stock of the Company. As a result of the foregoing, the Company's total debt, as reported on its consolidated balance sheet, has been reduced by approximately $112.5 million as of July 24, 2012. The Investors are each funds affiliated with Wilbur L. Ross, Jr., the chairman of the board of directors of the Company. Affiliates of Mr. Ross collectively owned approximately 88% of the Company's total voting power on a fully diluted basis as of June 30, 2012. The Board formed a special committee consisting of members of the Board who are not affiliates of Wilbur L. Ross, Jr., the Investors or of management of the Company, and the Special Committee, along with its independent legal and financial advisors, negotiated and approved the terms and conditions of the Agreement and the Preferred Stock, and recommended that the Board approve and adopt the Agreement, and approve the terms, issuance and sale of, the Preferred Stock. Morris James LLP acted as independent legal counsel to the Special Committee, and Duff & Phelps acted as financial advisor to the Special Committee. A copy of the Debt Exchange Agreement is available at: http://is.gd/EADrbV Amendment to Bylaws In connection with the issuance of the Preferred Stock, on July 24, 2012, the Board adopted, and the Company filed with the Secretary of State of the State of Delaware, a Certificate of Designation of Series C Preferred Stock. The Certificate of Designation provides, among other terms, as follows: * each share of Preferred Stock has an initial liquidation preference of $1,000; * the Preferred Stock is not convertible; * the Preferred Stock, with respect to dividend rights and rights upon liquidation, winding up or dissolution, ranks (i) senior to the Company's Series A Convertible Preferred Stock, Series B Convertible Preferred Stock, common stock and all classes and series of stock which expressly provide they are junior to the Preferred Stock or which do not specify their rank; (ii) on parity with each other class or series of stock, the terms of which specifically provide they will rank on parity with the Preferred Stock; and (iii) junior to each other class or series of stock of the Company, the terms of which specifically provide they will rank senior to the Preferred Stock; * dividends on the Preferred Stock are cumulative and accrue and are payable quarterly, in arrears, at an annual rate of 8.0%; and are payable in additional shares of Preferred Stock; * shares of Preferred Stock are redeemable at the option of the Company at any time upon notice to the holder thereof and payment of 100% of the Liquidation Value, plus accrued dividends; and * shares of Preferred Stock generally do not have any voting rights except as may be prescribed under the Delaware General Corporation Law; provided, however, that for so long as any shares of Preferred Stock are outstanding, certain fundamental corporate actions set forth in the Certificate of Designation may not be taken without the consent or approval of the holders of 66 2/3% of the outstanding Preferred Stock. About International Textile International Textile Group, Inc., is a global, diversified textile manufacturer headquartered in Greensboro, North Carolina, with current operations principally in the United States, China, Mexico, and Vietnam. ITG's long-term focus includes the realization of the benefits of its global expansion, including reaching full production at ITG facilities in China and Vietnam, and continuing to seek other strategic growth opportunities. The Company reported a net loss of $69.43 million in 2011, compared with a net loss of $46.30 million in 2010. The Company's balance sheet at March 31, 2012, showed $432.77 million in total assets, $630.60 million in total liabilities and a $197.82 million total stockholders' deficit. JABIL CIRCUIT: Moody's Rates New $500MM Sr. Unsecured Notes 'Ba1' ----------------------------------------------------------------- Moody's Investors Service affirmed Jabil Circuit, Inc.'s Ba1 ratings on the Corporate Family (CFR), Probability of Default (PDR) and existing senior unsecured notes. Moody's also assigned a Ba1 rating to the proposed $500 million senior unsecured notes due 2022. Net proceeds are expected to be used to repay borrowings under the revolving credit facility and for general corporate purposes. The rating outlook is stable. Ratings Rationale The affirmation of the Ba1 Corporate Family Rating (CFR) is supported by Jabil's status as one of the two leading Tier-1 electronics manufacturing services (EMS) providers in North America, with expanding core competencies and growing differentiation across a broad mix of materials technologies, higher complexity products and services. It also considers Jabil's increasing revenue exposure to the Diversified Manufacturing segment (comprised of instrumentation, industrial, healthcare, specialized services and clean technology), which is a faster growth and higher margin business with greater customer diversity compared to the traditional EMS segments (i.e., Enterprise & Infrastructure and High Velocity). The rating reflects Moody's expectation that Jabil will continue to generate solid EBITDA (in the range of at least $800 million to $1 billion) and gross cash flow, and maintain prudent financial policies and a very good liquidity position. Moody's expects leverage will remain near 2.5x adjusted total debt to EBITDA. The Ba1 rating is constrained by Jabil's history of large working capital swings, inconsistent free cash flow generation and low (albeit improving) ROA. Jabil's smaller scale relative to larger EMS players, limited demand visibility, significant customer concentration, and high fixed costs associated with its vertically integrated consumer electronics operations are additional factors that weigh on the rating. Lastly, the rating embeds the company's exposure to the more volatile consumer segment and growing presence of other EMS providers in the higher margin business segments that Jabil is pursuing. The Ba1 LGD-4, 63% rating was assigned to the unsecured notes using Moody's Loss Given (LGD) Default Methodology. Moody's notes that Jabil has significant international accounts payable balances at the foreign subsidiaries, which are deemed structurally senior to the general unsecured debt at the parent company. As such, Moody's LGD model indicates a Ba2 rating for the unsecured notes, but Moody's applies a one notch override to Ba1 to be equal to the CFR, given the company's strong credit profile, leading position in the EMS sector and healthy cash balances. Should Jabil's credit profile deteriorate or the proportion of unsupported/unguaranteed parent debt relative to the international trade payables changes, the rating of the unsecured notes may be notched down from the CFR. Jabil's SGL-1 rating reflects its very good liquidity position. This is supported by Moody's expectation of balance sheet cash of at least $500 million (cash was $742 million as of May 2012) and continued improvement in free cash flow consistency due to better working capital management. As manufacturing efficiencies improve combined with reduced working capital and incrementally higher gross cash flows from new programs, Moody's expects free cash flow of at least $300 million over the next twelve months. Jabil has historically exhibited several quarters of negative free cash flow due to working capital usage associated with inventory-build for new customer programs ramping simultaneously when manufacturing volumes and yields are typically lower. Liquidity is also supported by Jabil's access to a $1.3 billion committed unsecured revolver maturing March 2017 and Moody's expectation that Jabil will remain covenant compliant over the next twelve months. The stable rating outlook reflects Moody's expectation that Jabil will continue to maintain steady customer relationships and demonstrate measured operating performance improvement and solid cash flow generation as a result of good execution on customer penetration and new program wins in higher margin segments. Though Moody's expects the business environment to remain soft in the coming quarters, Moody's anticipates that Jabil will benefit from continued exposure to higher mix, lower volume programs. Ratings could be upgraded upon evidence of improved consistency in free cash flow generation and continued improvement in working capital management resulting in reduced free cash flow volatility. Ratings could also be considered for an upgrade to the extent Jabil continued to exhibit strong execution of expanding its low- volume/high mix higher margin strategy into non-traditional EMS end markets such as instrumentation, industrial, healthcare and specialized services. In addition, an upgrade could be considered to the extent operating margins were maintained in the 3% to 5% range (Moody's adjusted) and adjusted total debt to EBITDA is sustained below 2.5x. Ratings could be downgraded if Jabil experiences: (i) material customer/program losses without offsetting increases in new customer wins/program ramps; (ii) a sustained decline in core operating margins below 1.5% (Moody's adjusted); (iii) sustained reduction in retained cash flow to debt below 20% (Moody's adjusted); (iv) consistently negative free cash flow; and/or (v) a sustained increase in adjusted total debt to EBITDA above 3.5x. Rating Assigned: $500 Million Senior Unsecured Notes due 2022 -- Ba1 (LGD-4, 63%) Ratings Affirmed: Corporate Family Rating -- Ba1 Probability of Default Rating - Ba1 $312 Million 7.750% Senior Unsecured Notes due July 2016 - Ba1, LGD assessment revised to (LGD-4, 63%) $400 Million 8.250% Senior Unsecured Global Notes due March 2018 - Ba1, LGD assessment revised to (LGD-4, 63%) $400 Million 5.625% Senior Unsecured Notes due 2020 -- Ba1, LGD assessment revised to (LGD-4, 63%) Speculative Grade Liquidity Rating - SGL-1 The assigned rating is subject to review of final documentation and no material change in the terms and conditions of the transaction as advised to Moody's. Jabil intends to use the debt offering proceeds to repay borrowings under the revolving credit facility and for general corporate purposes. Moody's subscribers can find additional information in the Jabil Credit Opinion published on www.moodys.com. The last rating action was on October 28, 2010 when Moody's assigned a Ba1 rating to Jabil's $400 Million 5.625% Senior Notes due 2020. The principal methodologies used in rating Jabil were Global Distribution and Supply Chain Services published in November 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. With headquarters in St. Petersburg, Florida, Jabil Circuit, Inc. is an electronic product solutions company providing comprehensive electronics design, manufacturing and product management services to global electronics and technology companies in the networking, telecommunications, computing and storage, industrial, instrumentation, consumer electronics, automotive, clean technology and healthcare industries. JABIL CIRCUIT: S&P Rates Senior Unsecured Notes Due 2022 'BB+' -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' senior unsecured rating and '3' recovery rating to St. Petersburg, Fla.- based Jabil Circuit Inc.'s senior unsecured notes due 2022. "The '3' recovery rating indicates our expectation for a meaningful (50%-70%) recovery of principal in the event of payment default. The company intends to use proceeds of the new notes to repay outstanding revolver balances and for general corporate purposes," S&P said. "Standard & Poor's 'BB+' corporate credit rating and positive outlook on Jabil remain unchanged and reflect the company's diversified end markets, consistent profitability despite difficult market conditions, increasing market share, and stable financial profile. We expect the company to continue to pursue its moderate financial policies by maintaining leverage that is low for the rating, modest dividends, and annual share repurchases at or below discretionary cash flows. The company's financial risk profile is 'intermediate' and the business risk profile is 'fair,'" S&P said. "Jabil has the capacity within its rating category to absorb the modest amount of incremental debt, given adequate cash flows and liquidity," S&P said. Ratings List Jabil Circuit Inc. Corporate Credit Rating BB+/Positive/-- New Ratings Jabil Circuit Inc. Senior Unsecured Notes Due 2022 BB+ Recovery Rating 3 JENBELLA PROPERTIES: Case Summary & 2 Unsecured Creditors --------------------------------------------------------- Debtor: Jenbella Properties, LLC 115 Timberlachen Circle, Suite 2001 Lake Mary, FL 32746 Bankruptcy Case No.: 12-10338 Chapter 11 Petition Date: July 30, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: David R. McFarlin, Esq. WOLFF, HILL, MCFARLIN & HERRON, P.A. 1851 West Colonial Drive Orlando, FL 32804 Tel: (407) 648-0058 Fax: (407) 648-0681 E-mail: dmcfarlin@whmh.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 two largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-10338.pdf The petition was signed by Frank Cerasoli, managing member. Affiliates that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- Michael Lindsey Properties, LLC 12-10339 Carousel Properties, Inc. 12-10340 LEGENDS GAMING: Returns to Ch. 11 to Sell DiamondJack's for $125MM ------------------------------------------------------------------ Gaming facilities located in Bossier City, Louisiana, and Vicksburg, Mississippi, operating under the DiamondJack's trade name are again undergoing the Chapter 11 process. Owners of the gaming facilities Legends Gaming LLC, and five related entities, including Louisiana Riverboat Gaming Partnership, filed Chapter 11 petitions (Bankr. W.D. La. Case No. 12-12013) in Shreveport, Indiana, on July 31, 2012, to sell the business for $125 million to Global Gaming Solutions LLC, absent higher and better offers. Legends Gaming acquired the business from Isle of Capri Casinos Inc., in 2006 for $240 million. After breaching covenant with lenders, the Debtors in March 2008 sought Chapter 11 protection, jointly administered under Louisiana Gaming Partnership (Case No. 08-10824). The Debtors emerged from bankruptcy in September 2009 and retained ownership and operation of two "DiamondJacks" hotels and casinos in Bossier City and Vicksburg. The Plan restructured $162.1 million owed to the first lien lenders and $75 million owed to secured lien lenders, which would be paid in full, with interest, over time. The Debtors' properties comprise 60,000 square feet of gaming space with 1,913 slot machines, 48 table games and 693 hotel rooms. Revenues in fiscal 2011 were $99.8 million in Louisiana and $39.7 million in Mississippi. As of July 31, 2012, first lien lenders are owed $181.2 million and second lien lenders are owed $114.7 million. Attorneys at Heller, Draper, Hayden Patrick & Horn serve as counsel to the Debtors. Sea Port Group Securities, LLC is the financial advisor. Kurtzman Carson Consultants LLC as is the claims and notice agent. The Debtors have tapped Jenner & Block LLP as special counsel. $125 Million Sale The Debtors say that the projections in the 2009 Plan were not realized and the revenues cannot support repayment of the debt. The Debtors' financial condition deteriorated in 2010 and 2011, and the Debtors ultimately failed to make interest payment to the first lien lenders at the end of 2011. The Debtors began exploring a strategic transaction in late 2010. In early 2011 it was approached by Global Gaming Solutions, LLC, operator of 13 casinos and gaming centers in Oklahoma. Due to competitive pressures, and lack of resources, the Debtors have determined that a sale of substantially all assets would maximize the value of their enterprise. To establish a value benchmark for other interested bidders, the Debtors have selected Global Gaming as stalking horse bidder. Global Gaming has signed an asset purchase agreement dated July 25, 2012, to acquire the assets for the aggregate purchase price of $125 million plus the assumption of certain liabilities including trade payables and consumer liabilities. Under the purchase agreement, the consideration to be provided by Global Gaming will be in the forms of cash and "take back" debt. First lien lenders will receive $61.5 million in new first lien debt, and $36.0 million of new second lien debt, from Global. The remainder of the purchase price will be paid in cash at the closing. Given the structure of the sale transaction and in order to comply with applicable Louisiana Gaming regulations, the sale will be implemented pursuant to a joint plan for liquidation for the Debtors. Competing Offers The bidding procedures proposed by the Debtors will provide the opportunity to achieve higher and better offer for the assets. In the event the Debtors pursue an alternative transaction, they have agreed to pay Global a break-up fee of $3,750,000 and expense reimbursement of up to $500,000. The bidding procedures allow the first lien lenders and second lien lenders to submit credit bids at the auction. The Debtors have proposed this timeline: * Potential bidders have until Sept. 7, 2012 to submit a preliminary letter of intent; * Potential bids will have until Sept. 24 to submit definitive bid materials, with each bid subject to an initial overbid requirement of $4.5 million. * If the Debtors receive qualified bids, an auction will be conducted at the offices of Jenner & Block in New York on Oct. 15, 2012. LEVEL 3: Fitch Rates $1.415-Bil. Secured Credit Facility 'BB' ------------------------------------------------------------- Fitch Ratings has assigned a 'BB/RR1' rating to Level 3 Financing, Inc.'s proposed $1.415 billion senior secured credit facility. The facility is expected to include a minimum of $300 million tranche maturing in February 2016 and up to a $1.1 billion tranche maturing during August 2019. Level 3 Financing is a wholly owned subsidiary of Level 3 Communications, Inc. (LVLT). The Issuer Default Rating (IDR) for both LVLT and Level 3 Financing is 'B' with a Positive Rating Outlook. The terms of the new credit facility are expected to be substantially similar to the existing term loan B II ($650 million outstanding, 2018 maturity) and the term loan B III ($550 million outstanding, 2018 maturity). Proceeds of the new term loan are expected to be used to refinance the company's outstanding $1.4 billion term loan A, which is scheduled to mature during 2014. LVLT had approximately $8.5 billion of debt outstanding on June 30, 2012. The new credit facilities addresses the refinancing risk associated with the company's $1.4 billion of scheduled maturities during 2014. Outside of the extension of the company's maturity profile and improved liquidity, LVLT's credit profile has not substantially changed. Fitch believes that LVLT's liquidity position is adequate given the rating and is primarily supported by cash carried on its balance sheet, which as of June 30, 2012 totaled approximately $733 million (pro forma for LVLT's issuance of its 8.875% senior notes due 2019 cash balance is $1.026 billion). The company does not maintain a revolver and relies on capital market access to replenish cash reserves, which when combined with the lack of positive free cash flow generation limits the company's financial flexibility in Fitch's opinion. LVLT does not have any significant maturities scheduled during 2012 and Fitch believes LVLT's pro forma cash position is sufficient to address 2013 maturities which total approximately $172 million while funding anticipated free cash flow deficits during 2012. Considering the successful execution of the proposed credit facilities, LVLT's next scheduled maturity is not until 2015 when approximately $775 million of debt is scheduled to mature. LVLT's ratings recognize, in part, the de-leveraging of the company's balance sheet resulting from its acquisition of Global Crossing Limited (GLBC). Pro forma for the acquisition and LVLT's senior note issuance, LVLT's leverage declines to 6.4 times (x) for the latest 12 month (LTM) period ended June 30, 2012, compared with the company's actual leverage of 6.8x as of June 30, 2012, and 8.1x as of Dec. 31, 2011. Moreover, based on the company's ability to realize anticipated operating cost synergies, the GLBC acquisition positions LVLT to further improve its credit profile and generate consistent levels of free cash flow. The acquisition accelerates LVLT's progress in achieving its target leverage ratio of 3.0x to 5.0x. The Positive Rating Outlook reflects Fitch's belief that LVLT's credit profile will strengthen as the company achieves the cost synergies associated with the GLBC acquisition. Fitch anticipates that LVLT's credit protection metrics during 2012 will remain relatively consistent with year-end 2011 metrics as integration costs will largely offset positive operating momentum. Fitch expects LVLT's leverage as of year-end 2012 (on a pro forma basis) will dip below 6.2x. Fitch expects to observe the strengthening of LVLT's credit metrics during 2013 as cost synergies begin to take effect. Positive rating actions will likely occur as the company demonstrates that it is successfully integrating GLBC without material disruption to its operations. Equal consideration will be given to the company's ability to attain cost synergies while maintaining positive operational momentum. Evidence of positive operating momentum includes stable to expanding gross margins and revenue growth within the company Core Network Services segment. Fitch would expect LVLT to be generating consistent positive free cash flow and reduce leverage to 5.5x before taking a positive rating action. A stabilization of the Rating Outlook at the current rating level would coincide with LVLT experiencing difficulty or delay in fully integrating GLBC and achieving anticipated cost synergies. A weakening of LVLT's operating profile, as signaled by deteriorating margins and revenue erosion brought on by difficult economic conditions or competitive pressure will likely lead to negative rating action. Overall, Fitch's ratings incorporate LVLT's highly levered balance sheet, its weaker competitive position and lack of scale relative to larger and better capitalized market participants. The ratings for LVLT reflect the company's strong metropolitan network facilities position relative to alternative carriers, as well as the diversity of its customer base and service offering, and a relatively stable pricing environment for a significant portion of LVLT's service portfolio. Based largely on LVLT's strategy to invest in metropolitan facilities and carry more communications traffic on its network, the company derives strong operating leverage from its cost structure and network, enabling it to enhance margins and rapidly increase cash flows once revenue growth returns. Additionally, Fitch expects that the company can further strengthen its operating leverage as it continues to migrate its revenue mix to more margin rich data services and away from lower margin voice services. What Could Trigger a Rating Action -- Consolidated leverage reduces to 5.5x or lower; -- Consistent generation of positive free cash flow; -- Successful integration of GLBC without material disruption to its operations. A STABILIZATION OF THE RATING OUTLOOK WOULD OCCUR -- Difficulty or delay in fully integrating GLBC and achieving anticipated cost synergies; -- Weakening of LVLT's operating profile, as signaled by deteriorating margins and revenue erosion brought on by difficult economic conditions or competitive pressure. LEVITT AND SONS: Court Enforces Plan Injunction ----------------------------------------------- Bankruptcy Judge Raymond B. Ray granted the request of Woodbridge Holdings, LLC, to enforce the third party release and injunction provided under the confirmed Joint Chapter 11 Plan for Levitt and Sons, LLC, and its affiliated debtors. The court's ruling bars Ami Haley and Nancy Wells from further prosecuting their negligence claim against Woodbridge, the direct parent of LAS and the ultimate parent of all LAS Debtors, before the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida under Case No: 07-ca-7830(37). A copy of the Court's July 30, 2012 Order is available at http://is.gd/Dbtz09from Leagle.com. About Levitt & Sons Headquartered in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on November 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Judge Raymond B. Ray presides over the case. Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represented the Debtors in their bankruptcy cases. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, was not included in the bankruptcy filing. The Court confirmed Levitt & Sons' liquidating Chapter 11 plan on Feb. 20, 2009. LOCATION BASED TECH: Launches New Commercial Business Solutions --------------------------------------------------------------- Location Based Technologies, Inc., launched its new Business Solutions system. LBT's new system delivers flexible business solutions that drive operational efficiencies and money savings. New Web and App based functionality, with management, monitoring and reporting capability, delivers a sophisticated yet easy-to-use customer interface minimizing training cost and time and maximizes asset management capabilities. Approximately 60 existing business customers have been migrated from LBT's more consumer oriented PocketFinder Web site, including two new customers: Minnesota's Cambria USA (provider of top quality quartz countertops) with its 100+ Prius powered fleet, and Century Shower Door serving California, Arizona and Nevada. Adam Slutske, owner of Century Shower Door, stated, "I have used a leading GPS solution for the past 9 years and switched to Location Based Tech because I could achieve all of the same savings and benefits as I had with the other solution but at a much better price. LBT's devices were easy to install, had no external antenna, and we are very pleased with the performance. I especially like the app as I am often traveling and it keeps me connected to my multi-state team." "Cambria was looking for a GPS solution for its corporate fleet and Location Based Technologies fit the bill," said Peter Martin Cambria's Executive Vice President. "LBT's devices are compact, easy to install, and its monitoring systems provided Cambria all the data and flexibility it needed in managing a complex logistics system." "Soon after our retail launch we began hearing from business owners who were using our personal location devices and wanted the same high quality, easy-to-use interface and services for their fleets and equipment," said Dave Morse, CEO of Location Based Technologies. "With today's new Business Solutions system they will enjoy an asset tracking solution that is the best value and easiest to use solution we have found. Our awesome team of developers has delivered once again," Morse adds. LBT's A-GPS Vehicle and Asset Tracking System have a best-in-class end user interface, accessed via a web browser, mobile web browser, or smartphone app for the highly mobile executive on the go. Its GPS Mapping Application pinpoints the location of the device along with vital decision making information that is transmitted wirelessly to the Business Solutions platform in near real time. Users can customize the map application by establishing and flexibly applying zones through easy to use Zone Banks that will automatically send established alerts. Alerts are sent via email, SMS text and push notification. About Location Based Irvine, Calif.-based Location Based Technologies, Inc., designs, develops, and sells leading-edge personal locator devices and services. The Company's balance sheet at May 31, 2012, showed $7.64 million in total assets, $5.44 million in total liabilities, $499,387 of commitments and contingencies, and stockholders' equity of $1.70 million. "The Company has incurred net losses since inception, and as of May 31, 2012, had an accumulated deficit of $42,125,209. These conditions raise substantial doubt as to the Company's ability to continue as a going concern," the Company said in its quarterly report for the period ended May 31, 2012. As reported in the TCR on Dec. 2, 2011, Comiskey & Company, in Denver Colorado, expressed substantial doubt about the Company'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 incurred recurring losses since inception and has an accumulated deficit in excess of $37,000,000. "There is no established sales history for the Company's products, which are new to the marketplace." LONGTERM LODGING: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Longterm Lodging, Inc. dba Abaco Rehabilitation and Nursing Facility WeCare Health Facility 721 S. Souder Avenue Columbus, OH 43223-2302 Bankruptcy Case No.: 12-56505 Chapter 11 Petition Date: July 30, 2012 Court: U.S. Bankruptcy Court Southern District of Ohio (Columbus) Judge: C. Kathryn Preston Debtor's Counsel: Tim J. Robinson, Esq. DINSMORE & SHOHL LLP 1900 Chemed Center 255 E. Fifth Street Cincinnati, OH 45202 Tel: (513) 977-8261 E-mail: trobinson@dinsmore.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/ohsb12-56505.pdf The petition was signed by Mary K. Rhinehart, president/CEO. LSP ENERGY: Texas County May Lose $4.4MM If SMEPA Wins Auction -------------------------------------------------------------- The Associated Press reports that Panola County, Texas, could lose as much as $4.4 million in future property taxes if South Mississippi Electric Power Association succeeds in its bid for LSP Energy. According to the AP, county officials tell The Panolian that if SMEPA succeeds the assets of LSP will come off future years' tax rolls. SMEPA serves as stalking horse bidder to purchase all assets of LSP Energy for $249 million. The deal is subject to higher and better offers at an auction scheduled for Aug. 13. Several parties in interest have objected to the SMEPA deal, including Quantum Utility Generation LLC, which is seen as a rival bidder, according to Bankruptcy Law360. Quantum has complained the SMEPA deal had been obtained through extensive negotiations that ignored the bankruptcy court-approved bidding procedures. Carla Main, substituting for Bloomberg News bankruptcy columnist Bill Rochelle, reported that a group known as TPF II also objected to a provision in the SMEPA deal that requires the Debtor to pay a $7.5 million fee in the event the Debtor closes a sale with another buyer. The group said the Court's order "prohibited bidders from receiving break-up fees or other stalking horse benefits." They also noted they have conducted due diligence and negotiations with the Debtor before and since the bankruptcy filing, and were "ready to submit a qualified bid" and intended to participate in the auction. About LSP Energy LSP Energy Limited Partnership, LSP Energy, Inc., LSP Batesville Holding, LLC, and LSP Batesville Funding Corporation filed separate Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 12-10460) on Feb. 10, 2012. LSP owns and operates an electric generation facility located in Batesville, Mississippi. The Facility consists of three gas-fired combined cycle electric generators with a total generating capacity of roughly 837 megawatts and is electrically interconnected into the Entergy and Tennessee Valley Authority transmission systems. LSP's principal assets are the Facility and the 58-acre parcel of real property on which it is located, as well as its rights under a tolling agreements. LSP filed bankruptcy to complete an orderly sale of its assets or the ownership interests of LSP Holding in LSP, LSP Energy and LSP Funding for the benefit of all stakeholders. The remaining three Debtors filed bankruptcy due to their relationship as affiliates of LSP and their ultimate obligations on a significant portion of LSP's secured bond debt. The Debtors also suffered losses due to a mechanical failure of a combustion turbine at their facility and resultant business interruption. LSP Energy is the general partner of LSP. LSP Holding is the limited partner of LSP and the 100% equity holder of LSP Energy and LSP Funding. LSP Funding is a co-obligor on the Debtors' bond debt, and each of LSP Energy and LSP Holding has pledged their equity interests in LSP and LSP Funding as collateral for the bond debt. No statutorily authorized creditors' committee has yet been appointed in the Debtors' cases by the United States Trustee. Judge Mary F. Walrath oversees the case. Lawyers at Whiteford Taylor & Preston LLC serve as the Debtors' counsel. MALDEN BROOK: Judge Converts Case to Chapter 7 Proceeding --------------------------------------------------------- Bankruptcy Judge Melvin S. Hoffman converted the Chapter 11 case of Malden Brook Farms LLC to Chapter 7 at the behest of the Chapter 11 Trustee, who argued that the Debtor has no business to reorganize and that the Debtor's principals have hindered and interfered with the trustee's performance of its duties. A copy of the Court's July 20 Order is available at http://is.gd/bpydIY from Leagle.com. West Boylston, Massachusetts-based Malden Brook Farms LLC filed for bankruptcy (Bankr. D. Mass. Case No. 10-42617) on May 24, 2010. Judge Melvin S. Hoffman presides over the case. Roy W. Pastor, Esq., at Lorden, Pastor & Lilly, P.C., serves as bankruptcy counsel. The Debtor estimated assets and debts between $1 million and $10 million. MAMTEK U.S.: Assets From Missouri Sweetener Plant Set for Auction ----------------------------------------------------------------- The Associated Press reported July 27 that assets at Mamtek U.S. Inc.'s facility, which was supposed to have brought more than 600 jobs to central Missouri, will be auctioned off this Fall, said the trustee for bondholders of the failed artificial sweetener facility after it couldn't find a buyer for the plant. According to the AP, UMB Bank officials said in a public notice they spent at least four months searching for a buyer and contacted about 100 potential buyers. The bank said it never received any offers for the assets. About Mamtek Mamtek U.S. Inc. was a company that had planned to open a sucralose plant in Moberly Missouri. The project was to be owned by the city but operated by Mamtek. In order to finance the Project, including construction of the manufacturing facility, Mamtek relied heavily on state tax incentives and bonds issued by the City. Additional funding was supported by bonds issued by the Industrial Development Authority of the City, which issued three series of bonds totaling $39 million. Mamtek missed bond payments starting August 2011 and the construction was halted. UMB Bank, as trustee for $39 million bonds, and four other creditors of Mamtek, filed involuntary bankruptcy petition for Mametk (Bankr. W.D. Mo. Case No. 11-22092). The court, located in Kansas City, granted UMB's request to appoint Bruce Strauss as Mamtek's Chapter 7 bankruptcy trustee. Mamtek U.S. is a unit of Mamtek International, a company based in HongKong which purportedly operated a manufacturing facility producing sucralose, branded "SweetO," in the Fujian Province of China. MARATHON OIL: Moody's Issues Summary Credit Opinion --------------------------------------------------- Moody's Investors Service issued a summary credit opinion on Marathon Oil Corporation (MRO) and includes certain regulatory disclosures regarding its ratings. The release does not constitute any change in Moody's ratings or rating rationale for MRO and its affiliates. Moody's current ratings for MRO and its affiliates are: Marathon Oil Corporation Senior Unsecured (domestic currency) Rating of Baa2 Senior Unsecured MTN (domestic currency) Rating of (P)Baa2 Senior Unsec. Shelf (domestic currency) Rating of (P)Baa2 Subordinate Shelf (domestic currency) Rating of (P)Baa3 Junior Subord. Shelf (domestic currency) Rating of (P)Baa3 Pref. Shelf (domestic currency) Rating of (P)Ba1 Commercial Paper (domestic currency) Rating of P-2 Marathon Global Funding Corporation BACKED Senior Unsec. Shelf (domestic currency) Rating of (P)Baa2 Marathon Financing Trust I BACKED Pref. Shelf (domestic currency) Rating of (P)Baa1 Marathon Financing Trust II BACKED Pref. Shelf (domestic currency) Rating of (P)Baa1 Ratings Rationale Marathon Oil's Baa2 long-term and Prime-2 commercial paper ratings reflect its position as a mid-sized independent exploration and production company with a diversified reserves and production base, following the recent spin-off of its downstream business. MRO benefits post-spin from a reduced financial leverage profile that is more appropriate and in line with its peers, given the commodity price and reinvestment risks inherent to the E&P industry. In addition, higher oil prices and the oil orientation of MRO's reserves and production are supporting stronger cash flows and liquidity. These will facilitate MRO's pending acquisition of Hilcorp, a producer in the Eagle Ford shale, as well as support large future capital requirements required for its U.S. unconventional reserves, oil sands, and deepwater projects, among key growth areas. Moody's believes the company is committed to managing dividends and capital spending to maintain financial leverage consistent with its investment grade rating and peer group. The rating outlook is stable, reflecting largely internally funding of rising capital spending and the company's commitment to capital discipline and maintaining a solid balance sheet. The rating could be upgraded as a result of sustained success in diversifying and growing its reserve and production profile, attaining and maintaining competitive costs, and executing and funding its forward capital program without material leverage increases. MRO's ratings could be downgraded if its aggressive production target falls short or high capital spending were to increase financial leverage. The principal methodology used in rating MRO was the Independent Exploration and Production Industry Methodology published in December 2011. MARSH HAWK: Prudential to Pay $232K Under Confirmed Plan -------------------------------------------------------- Judge Frank J. Santoro approved the reconciliation of Patrick E. Corbin -- the Plan Trustee of Marsh Hawk Golf Club, LLC, and Ford's Colony Country Club, Inc. -- and Prudential Industrial Properties, LLC. The confirmed Second Amended Chapter 11 Plans of Reorganization in the Debtors' case require a determination of the "cash on hand" as of May 3, 2011. The Plan Trustee and Prudential have determined that the proper amount of Cash on Hand for purposes of the Plans is $232,870.69. Prior to paying any funds to the Plan Trustee, Prudential has requested that (i) the reconciliation of Cash on Hand be approved by the Court; and (ii) Prudential be granted a release of any further obligations in relation to the calculation of Cash on Hand. Judge Santoro ruled that Prudential will pay to the Plan Trustee $232,870.69, which represents all amounts due and owing from Prudential on account of the Cash on Hand calculation contained in the Plans. Upon payment of the amount, Prudential is released and forever discharged from its obligation to pay any amounts determined to constitute Cash on Hand under the Plans. About Marsh Hawk Golf Club Marsh Hawk Golf Club, LLC, and Ford's Colony Country Club, own and operate a country club in Williamsburg, Virginia. The Club features a 54-hole private golf course, restaurants, meeting rooms, banquet halls and numerous recreational facilities. The Companies filed for Chapter 11 bankruptcy protection (Bankr. E.D. Va. Lead Case No. 10-50632) on April 1, 2010. Marsh Hawk disclosed $26,915,398 in assets and $18,259,162 in liabilities as of the Chapter 11 filing. MCCLATCHY CO: Reports $26.9 Million Net Income in Second Quarter ---------------------------------------------------------------- The McClatchy Company reported net income of $26.86 million on $299.29 million of net revenues for the three months ended June 24, 2012, compared with net income of $4.94 million on $314.25 million of net revenues for the three months ended June 26, 2011. The Company reported net income of $24.77 million on $587.59 million of net revenues for the six months ended June 24, 2012, compared with net income of $2.98 million on $617.98 million of net revenues for the six months ended June 26, 2011. Commenting on McClatchy's second quarter results, Pat Talamantes, McClatchy's president and CEO, said, "Advertising revenues were down 5.7% in the second quarter. Despite economic headwinds, we were encouraged to see sequential improvement in advertising trends in the second quarter compared to the first quarter of 2012 when ad revenues were down 6.8%. Not only did we experience calendar switches for certain holidays, but we continue to see the trend of advertisers consolidating their marketing budgets around specific holidays. This was evident in the second quarter around the Easter, Mother's Day and Fourth of July holidays, with the impact clearly evident in the revenue results in each month. Advertising revenues were down 8.2% in April, 0.5% in May and 7.9% in June. A copy of the press release is available for free at: http://is.gd/hpnm6W About The McClatchy Company Sacramento, Calif.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extend its audience reach. The websites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The Company's balance sheet at March 25, 2012, showed $2.91 billion in total assets, $2.74 billion in total liabilities and $173.68 million in stockholders' equity. * * * McClatchy carries a 'Caa1' corporate family rating from Moody's Investors Service. In May 2011, Moody's changed the rating outlook from stable to positive following the company's announcement that it closed on the sale of land in Miami for $236 million. The outlook change reflects Moody's expectation that McClatchy will utilize the net proceeds to reduce debt, including its underfunded pension position, which will reduce leverage by approximately half a turn and lower required contributions to the pension plan over the next few years. METOKOTE CORP: Moody's Withdraws Ratings After Loan Repayment ------------------------------------------------------------- Moody's Investors Service has withdrawn all assigned ratings to MetoKote Corporation. The company has repaid in full its senior term loan and revolver that Moody's rated, warranting the rating withdrawal. MetoKote has put in place a new credit facility which provides for borrowings under a revolver and a term loan facility maturing in 2017. Since Moody's does not rate any of the company's existing debt, the assigned Corporate Family Rating and Probability of Default Rating are withdrawn as well. MetoKote Corporation provides outsourced industrial coating services to manufacturers in North America, Europe, and Brazil. The company offers solutions both within a customer facility or at one of the company's regional facilities. End markets served include automotive, heavy truck, agriculture, construction, metal furniture, appliances, and consumer products. Ratings Rationale The principal methodology used in rating MetoKote Corporation was the Global Automotive Supplier Industry Methodology published in January 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. As reported by the Troubled Company Reporter on Dec. 2, 2011, Moody's Investors Service upgraded MetoKote Corporation's Corporate Family Rating to B3 from Caa2, and its Probability of Default Rating to Caa1 from Caa2. MF GLOBAL: Corzine Tie Didn't Compel Gensler Recusal, Review Says ----------------------------------------------------------------- Michael Bathon at Bloomberg News reports that an internal analysis by the Commodity Futures Trading Commission's lawyers found that Gary Gensler, chairman of the Commodity Futures Trading Commission and Jon S. Corzine, the former chairman and chief executive officer of failed brokerage MF Global Holdings Ltd., didn't have a close relationship. According to the report, the agency's review of Mr. Gensler's links to Mr. Corzine and other MF Global executives culminated in a 15-page "confidential memorandum" dated Dec. 13. The lawyers, who interviewed only Mr. Gensler, concluded that the chairman's Nov. 8 decision to recuse himself from the agency's probe of MF Global wasn't necessary. "From a legal and ethical perspective, Chairman Gensler's participation in commission matters involving MFGI would not be improper," Dan M. Berkovitz, general counsel and ethics officer, and John P. Dolan, counsel and alternate ethics official, concluded in the memo. The CFTC, alongside the Securities and Exchange Commission and Justice Department, has spent nine months investigating the collapse of MF Global and a resulting $1.6 billion gap in customer funds. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provided access to more than 70 exchanges around the world. The firm was also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Chapter 11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has retained Capstone Advisory Group LLC as financial advisor. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. MICHAEL LINDSEY: Case Summary & 4 Unsecured Creditors ----------------------------------------------------- Debtor: Michael Lindsey Properties, LLC 115 Timberlachen Circle, #2001 Lake Mary, FL 32746 Bankruptcy Case No.: 12-10339 Chapter 11 Petition Date: July 30, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: David R. McFarlin, Esq. WOLFF, HILL, MCFARLIN & HERRON, P.A. 1851 West Colonial Drive Orlando, FL 32804 Tel: (407) 648-0058 Fax: (407) 648-0681 E-mail: dmcfarlin@whmh.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/flmb12-10339.pdf The petition was signed by Frank Cerasoli, authorized agent. Affiliates that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- Jenbella Properties, LLC 12-10338 Carousel Properties, Inc. 12-10340 MOHEGAN TRIBAL: Files Statistical Report for Mohegan Sun -------------------------------------------------------- The Mohegan Tribal Gaming Authority posted on its Web site its Table Games Statistical Report for Mohegan Sun at Pocono Downs containing statistics relating to gross table games revenues, table games tax and weighted average number of table games. The Table Games Statistical Report includes these statistics on a monthly basis for the nine months ended June 30, 2012, and the fiscal year ended Sept. 30, 2011 . A copy of the Table Games Statistical Report is available at http://is.gd/rpLzFM About Mohegan Tribal Gaming Authority Mohegan Tribal Gaming Authority -- http://www.mtga.com/-- is an instrumentality of the Mohegan Tribe of Indians of Connecticut, or the Tribe, a federally-recognized Indian tribe with an approximately 507-acre reservation situated in Southeastern Connecticut, adjacent to Uncasville, Connecticut. The Authority has been granted the exclusive authority to conduct and regulate gaming activities on the existing reservation of the Tribe, including the operation of Mohegan Sun, a gaming and entertainment complex located on a 185-acre site on the Tribe's reservation. Through its subsidiary, Downs Racing, L.P., the Authority also owns and operates Mohegan Sun at Pocono Downs, a gaming and entertainment facility located on a 400-acre site in Plains Township, Pennsylvania, and several off-track wagering facilities located elsewhere in Pennsylvania. PricewaterhouseCoopers LLP, in Hartford, Connecticut, expressed substantial doubt about the Authority's ability to continue as a going concern following the 2011 annual report. The independent auditors noted that of the Authority's total debt of $1.6 billion as of Sept. 30, 2011, $811.1 million matures within the next twelve months, including $535.0 million outstanding under the Authority's Bank Credit Facility which matures on March 9, 2012, and the Authority's $250.0 million 2002 8% Senior Subordinated Notes which mature on April 1, 2012. In addition, a substantial amount of the Authority's other outstanding indebtedness matures over the following three fiscal years. The Company's balance sheet at March 31, 2012, showed $2.27 billion in total assets, $2.06 billion in total liabilities and $211.30 million in total capital. * * * As reported by the TCR on March 14, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Uncasville, Conn.-based Mohegan Tribal Gaming Authority (MTGA) to 'B-' from 'SD'. "The upgrade to 'B-' reflects our reassessment of the Authority's capital structure following the completion of its comprehensive debt refinancing plan," said Standard & Poor's credit analyst Melissa Long. "While the completed transactions were not a de- leveraging event, the post-exchange capital structure substantially reduced MTGA's debt maturities over the next few years," S&P said. MONTROSE APARTMENTS: Case Summary and Unsecured Creditor -------------------------------------------------------- Debtor: Montrose Apartments, Inc. 4014 N. Wilson Drive Milwaukee, WI 53211 Bankruptcy Case No.: 12-31435 Chapter 11 Petition Date: July 31, 2012 Court: United States Bankruptcy Court Eastern District of Wisconsin (Milwaukee) Judge: Pamela Pepper Debtor's Counsel: Jonathan V. Goodman, Esq. LAW OFFICES OF JONATHAN V. GOODMAN 788 North Jefferson Street, Suite 707 Milwaukee, WI 53202-3739 Tel: (414) 276-6760 Fax: (414) 287-1199 E-mail: jgoodman@ameritech.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of 20 largest unsecured creditors has only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Waste Management Waste Disposal $1,200 of WI-MN W132 N10487 Grant Drive Germantown WI 53022-4445 The petition was signed by Arthur L. Post, president. MORGAN'S FOODS: JCP Investment Discloses 15.4% Equity Stake ----------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, JCP Investment Partnership, LP, and its affiliates disclosed that, as of July 26, 2012, they beneficially own 451,496 shares of common stock of Morgan's Foods, Inc., representing 15.4% of the shares outstanding. JCP Investment previously reported beneficial ownership of 414,380 common shares or a 14.1% equity stake as of July 12, 2012. A copy of the amended filing is available for free at: http://is.gd/1MvsxM 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 May 20, 2012, showed $53.51 million in total assets, $54.51 million in total liabilities and a $1 million total shareholders' deficit. MPG OFFICE: Eight Directors Elected at Annual Meeting ----------------------------------------------------- The 2012 Annual Meeting of Stockholders of MPG Office Trust, Inc., was held on July 27, 2012, at which six nominees were elected to serve on the Board of Directors until the 2013 Annual Meeting of Stockholders and until their respective successors are duly elected and qualify, namely: (1) Christine N. Garvey; (2) Michael J. Gillfillan; (3) Joseph P. Sullivan; (4) George A. Vandeman; (5) Paul M. Watson; and (6) David L. Weinstein. In addition, the stockholders: -- approved the adoption, on an advisory basis, of a resolution approving the compensation of certain executives; and -- ratified the selection of KPMG LLP as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2012. The holders of the Company's 7.625% Series A Cumulative Redeemable Preferred Stock elected Robert M. Deutschman and Edward J. Ratinoff to the Board to serve a one-year term and until their respective successors are duly elected and qualify. About MPG Office Trust MPG Office Trust, Inc., fka Maguire Properties Inc. -- http://www.mpgoffice.com/-- is the largest owner and operator of Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high- quality office properties in the Southern California market. MPG Office Trust is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. The Company has been focused on reducing debt, eliminating repayment and debt service guarantees, extending debt maturities and disposing of properties with negative cash flow. The first phase of the Company's restructuring efforts is substantially complete and resulted in the resolution of 18 assets, relieving the Company of approximately $2.0 billion of debt obligations and potential guaranties of approximately $150 million. The Company reported net income of $98.22 million in 2011, compared with a net loss of $197.93 million in 2010. The Company's balance sheet at June 30, 2012, showed $2.06 billion in total assets, $2.88 billion in total liabilities, and a $827.88 million total deficit. MPG OFFICE: Caspian Holds 4.9% of Series A Preferred Shares ----------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Caspian Capital LP and its affiliates disclosed that, as of July 26, 2012, they beneficially own 485,207 shares of 7.625% Series A Cumulative Redeemable Preferred Stock, Par Value $.01 per share, of MPG Office Trust, Inc., representing 4.9% of the shares outstanding. Caspian previously reported beneficial ownership of 898,047 preferred shares or 9.2% of the shares outstanding as of May 14, 2012. A copy of the amended filing is available for free at: http://is.gd/uQ608L About MPG Office Trust MPG Office Trust, Inc., fka Maguire Properties Inc. -- http://www.mpgoffice.com/-- is the largest owner and operator of Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high- quality office properties in the Southern California market. MPG Office Trust is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. The Company has been focused on reducing debt, eliminating repayment and debt service guarantees, extending debt maturities and disposing of properties with negative cash flow. The first phase of the Company's restructuring efforts is substantially complete and resulted in the resolution of 18 assets, relieving the Company of approximately $2.0 billion of debt obligations and potential guaranties of approximately $150 million. The Company reported net income of $98.22 million in 2011, compared with a net loss of $197.93 million in 2010. The Company's balance sheet at June 30, 2012, showed $2.06 billion in total assets, $2.88 billion in total liabilities, and a $827.88 million total deficit. MSC SOFTWARE: Moody's Withdraws 'B2' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service has withdrawn the ratings for MSC Software Corporation. The previously rated debt was not issued by the company. The following ratings have been withdrawn. Corporate Family Rating, B2 Probability of Default Rating, B3 $20 million senior secured revolver due 2016, B2 (LGD 3, 31%) $215 million senior secured term loan due 2017, B2 (LGD 3, 31%) Ratings Rationale The principal methodology used in rating MSC Software Corporation was the Global Business Software Industry Rating 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. MSR RESORT: Judge Hands Down Mixed Rulings in MSR-Hilton Row ------------------------------------------------------------ Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Sean Lane handed down a mixed ruling Tuesday in a dispute between bankrupt MSR Resort Golf Course LLC and a Hilton Worldwide Inc. unit over the cancellation of property management agreements, with Hilton losing at least $151.5 million in sought damages. Judge Lane's decision featured victories for both parties, whose damages estimations in two post-trial briefs differed by more than $288 million, according to the report. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owns a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. The resorts have agreement with lenders allowing the companies to remain in Chapter 11 at least until September 2012. The Official Committee of Unsecured Creditors is represented by Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP, in New York. NELSON EDUCATION: Moody's Lowers Corp. Family Rating to 'Caa1' -------------------------------------------------------------- Moody's Investors Service downgraded Nelson Education Ltd.'s corporate family and probability of default ratings to Caa1 from B3 and changed the ratings outlook to negative from stable. As part of the same rating action, the company's senior secured credit facility was downgraded to B2 from B1 while the rating for the company's second lien notes was downgraded to Caa3 from Caa2. The rating and outlook actions were prompted by expectations that recently observed weak financial performance will continue for the foreseeable future and, with leverage creeping up as EBITDA gradually declines, the repayment or refinance of the company's debts will be more difficult than was already the case. As well, refinance prospects are also likely to be adversely affected by the impact of higher all-in interest rates since they will consume free cash flow at the expense of debt amortization capacity. Lastly, as it is unlikely that Nelson will be able to repay or refinance the entirety of its debt load prior to maturity, there is the potential of debt being restructured as the maturity dates of term debts approach (and, in certain circumstances, such activities may be deemed to be equivalent to a default). The following summarizes the rating action along with Nelson's ratings: Issuer: Nelson Education Ltd. Corporate Family Rating, Downgraded to Caa1 from B3 Probability of Default Rating, Downgraded to Caa1 from B3 Outlook, Changed to Negative from Stable Senior Secured Bank Credit Facility, Downgraded to B2 (LGD3, 32%) from B1 (LGD3, 31%) Senior Second Secured Regular Bond/Debenture, Downgraded to Caa3 (LGD5, 83%) from Caa2 (LGD5, 84%) Ratings Rationale Nelson's Caa1 corporate family rating (CFR) reflects Moody's view that the company's debt load is not sustainable. Weakening financial results that have caused leverage of debt-to-EBITDA to increase over the recent past (to 8.9x at March 31, 2012 from 8.0x at the end of fiscal 2008, inclusive of Moody's adjustments), limited prospects for EBITDA growth, and uncertain debt market appetite, suggest that a portion of the company's debts are not refinanceable prior to their stated maturities. In turn, there is the potential of a negotiated debt restructuring (that may be deemed to be equivalent to a default, i.e. a distressed exchange) if refinance activities stall. The company's solid position as one of the three leading digital and print publishers of educational texts in the Canadian higher education and K-through-12 markets, together with solid relationships with educational institutions, provincial education ministries and various content providers, are positive considerations that support the rating. As well, despite difficult circumstances, the company's ability to be free cash flow positive also supports the rating. Rating Outlook The negative outlook reflects the potential of further ratings migration as the maturity dates of term debts approach. What Could Change the Rating - Up Positive outlook or ratings actions are not expected until Nelson completes the refinance of its term debts at a reasonable all-in cost. If that were to occur, good operating execution that leads to revenue and earnings growth, consistent free cash flow generation and debt reduction, or debt repayment from asset sales or an equity offering could lead to an upgrade if leverage is reduced. What Could Change the Rating - Down Over the near term, it is likely that liquidity and refinance- related matters will signal or precipitate downwards rating activities. In this regard, Moody's would consider Nelson's ratings for downgrade if the company's safety cushion of unused liquidity was eroded, likely owing to minimal or negative free cash flow generation. As well, as the maturity dates of term debts approaches, the potential of distressed exchange activity increases. The principal methodology used in rating Nelson Education 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. Corporate Profile: Headquartered in Toronto, Ontario, Canada, Nelson Education Ltd. (Nelson) is a privately owned leading provider of publishing services for the Canadian educational market. Nelson publishes college and K-through-12 textbooks and reference materials, and supplements its print publications with digital solutions. The company was acquired by funds managed by Apax Partners and OMERS Capital Partners in a leveraged buy-out from Thomson Reuters Corporation in July 2007. NEOMEDIA TECHNOLOGIES: Sells $450,000 Debenture to YA Global ------------------------------------------------------------ NeoMedia Technologies, Inc., on July 20, 2012, entered into an agreement to issue and sell a secured convertible debenture to YA Global Investments, L.P., in the principal amount of $450,000. The closing of the transaction was held on July 23, 2012. In addition to the Debenture, the Company also issued a warrant to YA Global to purchase 1,000,000 shares of the Company's common stock, par value $0.001 per share, for an exercise price of $0.15 per share. The Debenture will mature on Aug. 1, 2013, and will accrue interest at a rate equal to 9.5% per annum and that interest will be paid on the Maturity Date in cash or, provided that certain Equity Conditions are satisfied, in shares of Common Stock at the applicable Conversion Price. At any time, the Buyer will be entitled to convert any portion of the outstanding and unpaid principal and accrued interest thereon into fully paid and non- assessable shares of Common Stock at a price equal to the lesser of $0.10 and 95% of the lowest volume weighted average price of the Common Stock during the 60 trading days immediately preceding each conversion date. The Debenture is secured by certain pledges made with respect to the assets of the Company and its subsidiaries as set forth in the Twentieth Ratification Agreement dated July 20, 2012, and that certain Security Agreement and Patent Security Agreement both dated July 29, 2008, by and among the Company, each of the Company's subsidiaries made a party thereto, and the Buyer. In connection with the Agreement, the Company also entered into those certain Irrevocable Transfer Agent Instructions with the Buyer, an escrow agent and World Wide Stock Transfer, LLC, the Company's transfer agent. About NeoMedia Technologies Atlanta, Ga.-based NeoMedia Technologies, Inc., provides mobile barcode scanning solutions. The Company's technology allows mobile devices with cameras to read 1D and 2D barcodes and provide "one click" access to mobile content. After auditing the 2011 results, Kingery & Crouse, P.A, in Tampa, FL, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has ongoing requirements for additional capital investment. The Company reported a net loss of $849,000 in 2011, compared with net income of $35.09 million in 2010. The Company's balance sheet at March 31, 2012, showed $7.88 million in total assets, $236.06 million in total liabilities, all current, $4.84 million series C convertible preferred stock, $989,000 series D preferred stock, and a $234 million total shareholders' deficit. NESBITT PORTLAND: Eight Embassy Hotels Seek Chapter 11 ------------------------------------------------------ Windsor Capital Group Inc. CEO Patrick M. Nesbitt sent hotel- companies to Chapter 11 bankruptcy to stop a receiver named by U.S. Bank National Association from taking over eight Embassy Suites hotels. Nesbitt Portland Property, LLC, and seven affiliates filed bare- bones Chapter 11 petitions (Bankr. C.D. Calif. Lead Case No. 12-12883) on July 31, in Santa Barbara, California. Nesbitt Portland estimated assets of up to $50 million and liabilities of less than $500 million. According to http://www.wcghotels.com/Santa Monica-based Windsor Capital owns and/or operates 23 branded hotels in 11 states across the U.S. Windsor Capital is the largest private owner and operator of Embassy Suites hotels. Documents from Justia.com say that in May, U.S. Bank successfully obtained a district court ruling appointing a receiver of eight hotels in six states that were pledged by the Debtors as collateral for loans. In April 2012, Windsor received letters from the licensor with regard to each of the Hotels, explaining that each of the Hotels was in default of the license agreement "as a result of its failure to comply with required Embassy Suites brand and product quality standards." Windsor needed $4.4 million to pay for the improvements necessary to avoid the imminent loss of the Embassy Suites franchise. However, U.S. Bank declined to provide additional financing to the Debtors, which are already in arrears to their loan obligations. In the case U.S. Bank vs. Nesbitt Bellevue Property LLC, et al. (S.D.N.Y. 12 Civ. 423), U.S. Bank obtained approval from the district judge in June to name Alan Tantleff -- alan.tantleff@fticonsulting.com -- of FTI Consulting, Inc., as receiver for: * Embassy Suites Colorado Springs in Colorado; * Embassy Suites Denver Southeast in Colorado; * Embassy Suites Cincinnati - Northeast in Blue Ash, Ohio; * Embassy Suites Portland - Washington Square in Tigard, Oregon; * Embassy Suites Detroit - Livornia/Novi in Michigan; * Embassy Suites El Paso in Texas; * Embassy Suites Seattle - North/Lynwood in Washington; and * Embassy Suites Seattle - Bellevue in Washington The receiver obtained district court permission to engage Crescent Hotels and Resorts LLC to manage the eight hotels. But before Mr. Adam could take physical possession of the properties and take control of the Hotels, the eight borrowers filed chapter 11 petitions, Nicole Madison of FTI confirmed to the Troubled Company Reporter. The Debtors are represented in the Chapter 11 case by attorneys at Susi & Gura. Attorneys at Kilpatrick Townsend & Stockton LLP represented the Debtors in the receivership case. According to the bankruptcy case docket, the schedules of assets and liabilities and the statements of financial affairs are due Aug. 14, 2012. NET TALK.COM: Issues 1.5 Million Common Shares to Rate Technology ----------------------------------------------------------------- Net Talk.com, Inc., approved and issued a total of 1,500,000 shares of common stock to Rate Technology, Inc., pursuant the Company's 2011 and 2012 Stock Option Plan. On July 25, 2012, Nettalk.com created, adopted and implemented its 2012 Stock Option Plan. The purpose of the Plan is to advance the interest of the Company's shareholders by enhancing the Company's ability to attract, retain and motivate its employees who make important contributions by providing those employees with equity ownership opportunities and performance - based incentives. The maximum aggregate number of common stock shares of the 2012 Stock Option Plan that may be issued under the plan is 5,000,000 common stock shares. About Net Talk.com Based in Miami, Fla., Net Talk.com, Inc., is a telephone company, that provides, sells and supplies commercial and residential telecommunication services, including services utilizing voice over internet protocol technology, session initiation protocol technology, wireless fidelity technology, wireless maximum technology, marine satellite services technology and other similar type technologies. The Company reported a net loss of $26.17 million $2.72 million of revenue for the year ended Sept. 30, 2011, compared with a net loss of $6.30 million on $737,498 of revenue during the prior year. The Company's balance sheet at March 31, 2012, showed $6.64 million in total assets, $12.46 million in total liabilities, $9.19 million in redeemable preferred stock, and a $15 million total stockholders' deficit. NEW LEAF BRANDS: EisnerAmper Raises Going Concern Doubt ------------------------------------------------------- New Leaf Brands, Inc., filed its annual report on Form 10-K for the fiscal year ended Dec. 31, 2011. EisnerAmper LLP, in New York City, expressed substantial doubt about New Leaf's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations, has a working capital deficiency, was not in compliance with certain financial covenants related to debt agreements, and has a significant amount of debt maturing in 2012. The Company reported a net loss of $6.68 million on $2.27 million of net sales for 2011, compared with a net loss of $9.13 million on $4.26 million of net sales for 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.59 million in total assets, $5.52 million in total liabilities, and a shareholders' deficit of $3.93 million. A copy of the Form 10-K is available for free at: http://is.gd/3o74El Old Tappan, N.J.-based New Leaf Brands, Inc., is a diversified beverage holding company acquiring brands, distributors and manufacturers within the beverage industry. NOVADEL PHARMA: Effectively Insolvent, May Seek Bankruptcy ---------------------------------------------------------- NovaDel Pharma Inc. reported unaudited financial results for the six months ended June 30, 2012. As previously reported, if the Company cannot secure financing or a strategic partner, the Company may file for bankruptcy. The Company, at the end of March 2012, deregistered its common stock and exited the Securities and Exchange Commission reporting system. The Company recorded a loss of $24,000 or $(0.00) per share for the six months ended June 30, 2012, compared to a net loss of $7,597,000 or $(0.07) per share in the six months ended June 30, 2011. During the six months of 2012, the Company earned royalties from the license of NitroMist(R) and Zolpimist(TM) in the amount of $293,000. The Company also received $200,000 from the sale of NitroMist rights outside the US, Canada and Mexico. Also included in revenue is the recognition of previously received payments under various license agreements. Expenses for the six months ended June 30, 2012, were $1,019,000 as compared to $2,417,000 for the six months ended June 30, 2011, and include amounts to maintain and expand our intellectual property base as well as an expense accrual under a severance agreement with a former officer of the Company. The Company continues to closely manage its expenses as well as actively negotiate with its creditors to reduce its outstanding debts. As of June 30, 2012, the Company has approximately $38,000 in cash and cash equivalents. The current liabilities of the Company, at June 30, 2012, of $3,104,000 include fees due to the FDA approximating $1,500,000. The imposition of these fees is an impediment to our ability to raise capital to continue to develop our product opportunities or find a strategic partner. The Company has filed an appeal with the FDA for relief of the fees currently imposed and future fees relating to our licensed and marketed products. There is no assurance that our request will be granted nor are we certain as to the time frame for a response to our request of the FDA. The remaining liabilities at June 30, 2012, of $5,253,000 reflect deferred revenue to be recognized over the term of various license agreements. The Company is effectively insolvent and is actively engaged in seeking capital or a strategic relationship. To date this effort has not been successful. A copy of the statement is available for free at: http://is.gd/AHlAID About Novadel Pharma NovaDel Pharma Inc. -- http://www.novadel.com/-- is a specialty pharmaceutical company that develops oral spray formulations of marketed pharmaceutical products. The Company's patented oral spray drug delivery technology seeks to improve the efficacy, safety, patient compliance, and patient convenience for a broad range of prescription pharmaceuticals. NUVILEX INC: Delays Form 10-K for Fiscal 2012 --------------------------------------------- Nuvilex, Inc., was unable to file its annual report on Form 10-K for the year ended April 30, 2012, within the prescribed time period because the Company did not complete all of assessments of the status of the Company to enable the auditors to complete the review on time because of the large number of simultaneously ongoing Company activities. 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 Jan. 31, 2012, showed $1.86 million in total assets, $3.53 million in total liabilities, $580,000 in commitments and contingencies and a $2.24 million total stockholders' deficit. 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. OAKFIELD STONE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Oakfield Stone Company, Inc. P.O. Box 1656 Fond Du Lac, WI 54936-1656 Bankruptcy Case No.: 12-31341 Chapter 11 Petition Date: July 30, 2012 Court: U.S. Bankruptcy Court Eastern District of Wisconsin (Milwaukee) Judge: Pamela Pepper Debtor's Counsel: Paul G. Swanson, Esq. STEINHILBER, SWANSON, MARES, MARONE & MCDERMOTT 107 Church Avenue P.O. Box 617 Oshkosh, WI 54903-0617 Tel: (920) 426-0456 E-mail: pswanson@oshkoshlawyers.com Scheduled Assets: $8,416,459 Scheduled Liabilities: $3,613,423 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/wieb12-31341.pdf The petition was signed by Bruce W. Rademann, president. OPTIMUMBANK HOLDINGS: Incurs $800,000 Net Loss in 2nd Quarter ------------------------------------------------------------- OptimumBank Holdings, Inc., reported a net loss for the second quarter ended June 30, 2012, of approximately $800,000 as compared to a net loss for the same period last year of approximately $2 million. The 2012 second quarter loss increased from the previous quarter's loss of $600,000 million primarily due to a $154,000 provision for loan losses recorded in the June 2012 quarter as compared to a $27,000 provision recorded in the March 2012 quarter. Chairman Moishe Gubin said, "We are still experiencing some weakness in real estate valuations, but overall we believe the real estate market in Florida has stabilized and local values are rising." The net loss for the six months ended June 30, 2012, was approximately $1.4 million, as compared to a net loss for the same period last year of approximately $3.1 million. The $1.7 million reduction in losses for the comparative six month periods was primarily due to a significant reduction in the provision for loan losses in 2012 as compared to 2011. Chairman Gubin said, "Operating losses appear to be stabilizing as we continue to focus our efforts on cost containment and income generation." The Company's capital ratios exceeded its regulatory capital requirements at June 30, 2012, with a tier one leverage capital ratio of 8.63% and a total risk-based capital ratio of was 13.18%. The Company expects to raise additional capital during the September 2012 quarter with an additional $2.7 million investment from Chairman Gubin, subject to regulatory approval, and approximately $2.0 million from other investors. Chairman Gubin said, "I believe the Company has a great future and I am here to support it." The Company recently upgraded its internet business banking systems and offers a wide array of lending and retail banking products to individuals and businesses in Broward, Miami-Dade and Palm Beach Counties through its executive offices and three branch offices in Broward County, Florida. A copy of the press release is available for free at: http://is.gd/C9dlan About OptimumBank Holdings Fort Lauderdale, Fla.-based OptimumBank Holdings, Inc. is a is a one-bank holding company and owns 100% of OptimumBank, a state (Florida)-chartered commercial bank. The Bank offers a variety of community banking services to individual and corporate customers through its three banking offices located in Broward County, Florida. The Bank's wholly-owned subsidiaries are OB Real Estate Management, LLC, OB Real Estate Holdings, LLC, OB Real Estate Holdings 1503, LLC, and OB Real Estate Holdings 1695, LLC, all of which were formed in 2009. OB Real Estate Management, LLC, is primarily engaged in managing foreclosed real estate. OB Real Estate Holdings, LLC, OB Real Estate Holdings 1503, LLC, and OB Real Estate Holdings 1695, LLC, hold and dispose of foreclosed real estate. The Company reported a net loss of $3.74 million in 2011, compared with a net loss of $8.45 million in 2010. The Company's balance sheet at March 31, 2012, showed $152.93 million in total assets, $144.76 million in total liabilities and $8.17 million in total stockholders' equity. Regulatory Enforcement Actions On April 16, 2010, the Bank consented to the issuance of a Consent Order by the Federal Deposit Insurance Corporation and the State of Florida Office of Financial. The Consent Order covers areas of the Bank's operations that warrant improvement and imposes various requirements and restrictions designed to address these areas, including the requirement to maintain certain minimum capital ratios. Management believes that the Bank is currently in substantial compliance with all the requirements of the Consent Order except for the following requirements: * Scheduled reductions by Oct. 31, 2011, and April 30, 2012, of 60% and 75%, respectively, of loans classified as substandard and doubtful in the 2009 FDIC Examination; * Retention of a qualified chief executive officer and chief lending officer; and * Development of a plan to reduce Bank's concentration in commercial real estate loans acceptable to the supervisory authorities. The Bank has implemented comprehensive policies and plans to address all of the requirements of the Consent Order and has incorporated recommendations from the FDIC and OFR into these policies and plans. OZZIR PROPERTIES: Case Summary & 13 Unsecured Creditors ------------------------------------------------------- Debtor: Ozzir Properties, LLC P.O. Box 1496 Plaistow, NH 03865 Bankruptcy Case No.: 12-12415 Chapter 11 Petition Date: July 30, 2012 Court: U.S. Bankruptcy Court District of New Hampshire (Manchester) Judge: J. Michael Deasy Debtor's Counsel: Joel Jay Rogge, Esq. LAW OFFICE OF JOEL JAY ROGGE 84 County Road Ipswich, MA 01938-2356 Tel: (978) 356-7040 Fax: (978) 356-3678 E-mail: jjrogge@comcast.net Scheduled Assets: $217,647 Scheduled Liabilities: $1,725,578 A copy of the Company's list of its 13 unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nhb12-12415.pdf The petition was signed by Vincent R. Rizzo, manager. PACIFIC RIM MINING: Posts US$1.8-Mil. Net Loss in Fiscal 2012 ------------------------------------------------------------- On July 27, 2012, Pacific Rim Mining Corp. reported its financial and operating results for the twelve months ended April 30, 2012. For the fiscal year ended April 30, 2012, Pacific Rim recorded a loss of US$1.8 million, compared to a loss of US$3.8 million for the fiscal year ended April 30, 2011. The decrease in net loss for fiscal 2012 compared to fiscal 2011, despite increased exploration and general and administrative expenses, is primarily related to substantially increased unrealized gains on the Company's derivative liability in fiscal 2012 compared to fiscal 2011, as well as a decrease in costs related to the Arbitration year over year. The Company's general and administrative costs are expected to remain stable during fiscal 2013. Expenditures related to PacRim's Arbitration claim are expected to increase substantially as the case proceeds through the final phase. The Company has currently accumulated a liability of approximately US$1.4 million related to the Arbitration and is currently discussing vendor- specific alternative financing opportunities aimed at reducing this accounts payable position. Although the Company believes it has sufficient cash and short term investments to fund its immediate general and administrative and legal obligations, additional working capital (likely through equity financing) will be required to fund ongoing general and administrative costs. Additionally, the costs associated with the final phase of the Arbitration action are expected to be high. The Company is currently exploring various alternative financing opportunities to fund the legal costs associated with the Arbitration while minimizing dilution to its current share structure. In this regard the Company has received encouraging feedback from potential sources of non-equity financing. Balance Sheet The Company's balance sheet at April 30, 2012, show US$6,942,000 in total assets, US$1,846,000 in total liabilities, and shareholders' equity of US$5,096,000. Going Concern Assumption According to the regulatory filing, there are events and conditions that raise substantial doubt about the Company's ability to continue as a going concern. "During the year ended April 30, 2012, the Company had a loss of US$1,834,000 and as at April 30, 2012, has an accumulated deficit of US$89,815,000 and a working capital deficiency of US$236,000. The Company will require additional funding to maintain its ongoing exploration programs and property commitments, for administrative purposes and for the arbitration and legal costs related to the case under the El Salvador's Foreign Investment Law etween the Company and the Government of El Salvador, which is being administered by the Centre for Settlement of Investment Disputes ("ICSID"). The legal and arbitration costs for the case are substantial." A copy of the news release is available for free at: http://is.gd/Ee0Qdk A copy of the Form 20-F is available for free at: http://is.gd/vlLPiO A copy of the Consolidated Financial Statements for the fiscal year ended April 30, 2012, is available for free at: http://is.gd/JuEyoF Based in Vancouver, British Columbia, Canada, Pacific Rim Mining Corp. is an exploration company whose business plans and management talent focus on high grade, environmentally clean gold deposits in the Americas. Pacific Rim's most advanced asset is the vein-hosted El Dorado gold project in El Salvador, where the Company also owns several grassroots gold projects. The Company holds a joint venture option on the Hog Ranch epithermal gold project in Nevada and is actively pursuing additional exploration opportunities elsewhere in the Americas. The El Dorado gold project in El Salvador was the focus of virtually all of the Company's exploration work between 2002 and 2008, when efforts to advance its El Salvador projects, including El Dorado, ceased as a result of the Government of El Salvador's ("GOES") passive refusal to issue a decision on the Company's application for environmental and mining permits for the El Dorado project. The El Dorado project is now the subject of an arbitration claim (the "Arbitration") being heard at the International Center for the Settlement of Investment Disputes ("ICSID") in Washington, DC. Initiated in 2009 by the Company's subsidiary and owner of the El Dorado project, PacRim, the Arbitration claim was originally filed, under the Dominican Republic-United States-Central America Free Trade Agreement ("CAFTA") and the Investment Law of El Salvador (the "Investment Law"). The Arbitration was recently given permission by ICSID to proceed, under the Investment Law, to its final phase wherein the merits of the claim will finally be addressed. PBJT935927 2008: Case Summary & 4 Unsecured Creditors ----------------------------------------------------- Debtor: PBJT935927 2008 Investments LLC 7621 Reynolds Circle Huntington Beach, CA 92647 Bankruptcy Case No.: 12-10462 Chapter 11 Petition Date: July 30, 2012 Court: U.S. Bankruptcy Court Southern District of California (San Diego) Judge: Margaret M. Mann Debtor's Counsel: J. John Oh, Esq. KIM KANG & OH APC 625 The City Drive, Suite 105 Orange, CA 92868 Tel: (714) 703-1100 E-mail: john@kimkangoh.com Scheduled Assets: $3,208,000 Scheduled Liabilities: $3,205,600 A copy of the Company's list of its four unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/casb12-10462.pdf The petition was signed by Dave Thomas, managing member. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Puente Holdings, LLC 12-08084 06/04/12 PEREGRINE FIN'L: Trustee to Set Foreign-Exchange Claims Procedures ------------------------------------------------------------------ Michael Bathon, substituting for Bloomberg bankruptcy columnist Bill Rochelle, reports that Peregrine Financial Group Inc. asked a judge to approve the setting of procedures for fixing customers' claims related to termination of foreign-exchange contracts, after a court hearing set for Aug. 9. A 343-page filing in U.S. Bankruptcy Court in Chicago lists customers with addresses from the Middle East to Europe and Asia. Details of the proposal also can be found on the trustee's Web site, according to the filing. About Peregrine Financial Peregrine Financial Group Inc. on July 10, 2012, filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488), disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier on July 10, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's Chief Executive Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial Group Inc. is the regulated unit of the brokerage PFGBest. At a quickly-convened hearing on July 13, the bankruptcy judge authorized the Chapter 7 trustee to operate Peregrine's business on a "limited basis" through Sept. 13. PHARMOS CORP: Incurs $382,878 Net Loss in Second Quarter -------------------------------------------------------- Pharmos Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $382,878 for the three months ended June 30, 2012, compared with a net loss of $500,433 for the same period during the prior year. For the six months ended June 30, 2012, the Company reported a net loss of $959,183, as compared to a net loss of $1.10 million for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $634,295 in total assets, $1.17 million in total liabilities and a $539,693 total shareholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/8VKtvP About Pharmos Corp Iselin, N.J.-based Pharmos Corporation is a biopharmaceutical company that discovers and develops novel therapeutics to treat a range of metabolic and nervous system disorders, including gout, disorders of the brain-gut axis (e.g., Irritable Bowel Syndrome), pain/inflammation, and autoimmune disorders. Friedman LLP, in ast Hanover, New Jersey, expressed substantial doubt about Pharmos' ability to continue as a going concern, following the Company's results for 2011. The independent auditors noted that the Company has suffered recurring losses from operations, has significant 2012 cash flow commitments in connection with its current proof-of-concept clinical trial, and its ability to continue as a going concern is ultimately dependent on achieving a collaboration agreement or raising additional capital in 2012. PHILADELPHIA ORCHESTRA: Officially Emerges From Chapter 11 ---------------------------------------------------------- The Philadelphia Orchestra Association said it has officially emerged from Chapter 11 bankruptcy protection, effective July 30, 2012. The Association's Plan of Reorganization was confirmed by the United States Bankruptcy Court of the Eastern District of Pennsylvania on June 28, 2012. Through its financial reorganization, the Association addressed 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 as of the effective date. The remainder of the Association's settlement payments will be distributed based upon previously agreed upon multiyear schedules. "We are deeply grateful to all who have championed and supported our Orchestra during this difficult yet necessary process," said Allison Vulgamore, president and CEO of The Philadelphia Orchestra Association. "With the conclusion of our financial reorganization, we turn the institution's full focus to what we are all passionate about -- sharing the incredible artistry of The Philadelphia Orchestra with our Philadelphia audiences, especially as we welcome the electrifying Yannick Nezet-Seguin as music director in October. The Philadelphia Orchestra remains among the best in the world, bringing audiences to the edge of their seats, earning rave reviews and generating enthusiasm in this great city and as its ambassador abroad. There is much critical diligence and fiscal capitalization to be achieved for the Orchestra and we embrace this new era -- and our audiences -- with gratitude and dedication." 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. POSITIVEID CORP: Amends Form S-1 Registration Statement ------------------------------------------------------- PositiveID Corporation filed with the U.S. Securities and Exchange Commission amendment no.1 to Form S-1 registration statement relating to the resale of up to 34,000,000 shares of the Company's common stock by Ironridge Technology Co., a division of Ironridge Global IV, Ltd., pursuant to a Stock Purchase Agreement entered into between the Company and Ironridge dated July 12, 2012. The total amount of shares of common stock which may be sold pursuant to this prospectus would constitute approximately 25% of the Company's issued and outstanding common stock as of July 19, 2012. Pursuant to the Stock Purchase Agreement, 15 trading days after the date of this prospectus, the Company has the obligation to sell to Ironridge, and Ironridge must purchase from the Company, up to $10,000,000 of shares of the Company's common stock over a 24-month period. The Company will do continuous drawdowns of 2,000,000 shares under the Stock Purchase Agreement unless the Company sends a notice suspending the draw downs. The draw down pricing period is the number of consecutive trading days necessary for 6,000,000 shares of the Company's common stock to trade, provided that for the first draw down, the draw down pricing period is the 15 day trading period after the date of this prospectus. Only one draw down will be allowed in each draw down pricing period. The Company's common stock is quoted on the OTC Bulletin Board under the symbol "PSID.OB." On July 26, 2012, the closing sale price of the Company's common stock was $0.02 per share. A copy of the amended prospectus is available for free at: http://is.gd/5Ui9tu About PositiveID Delray Beach, Fla.-based PositiveID Corporation (OTC BB: PSID) is a technology development company with two divisions: HealthID and MicroFluidic Systems. HealthID develops unique medical devices, focused primarily on diabetes management, and MicroFluidic Systems develops molecular diagnostic systems, focused primarily on bio- threat detection products. The Company's balance sheet at March 31, 2012, showed $2.99 million in total assets, $4.17 million in total liabilities, and a $1.18 million total stockholders' deficit. "The Company's ability to continue as a going concern is dependent upon its ability to obtain financing to fund the continued development of its HealthID products, the operations of MicroFluidic, and working capital requirements. Until the Company is able to achieve operating profits, it will continue to seek to access the capital markets," the filing said. On Aug. 31, 2011, the Company received notification that its stock was being delisted from the Nasdaq Capital Market and on Sept. 1, 2011, the Company's stock began trading on the OTC Bulletin Board. The delisting from Nasdaq could adversely affect the market liquidity of the Company's common stock and harm the business and may hinder or delay the Company's ability to consummate potential strategic transactions or investments. That delisting could also adversely affect the Company's ability to obtain financing for the continuation of its operations and could result in the loss of confidence by investors, suppliers and employees. These conditions raise substantial doubt about the Company's ability to continue as a going concern. PMI GROUP: CFO Donald Lofe Quits to Work for Another Company ------------------------------------------------------------ Donald P. Lofe, Jr., has informed The PMI Group, Inc., that he has accepted an offer of employment with a San Francisco, California- based company and of his intention to resign as Executive Vice President, Chief Financial Officer and Chief Administrative Officer of TPG upon the completion of an appropriate transition period. About The PMI Group Del.-based The PMI Group, Inc., is an insurance holding company whose stock had, until Oct. 21, 2011, been publicly-traded on the New York Stock Exchange. Through its principal regulated subsidiary, PMI Mortgage Insurance Co., and its affiliated companies, the Debtor provides residential mortgage insurance in the United States. The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor disclosed $167,963,354 in assets and $770,362,195 in liabilities. Stephen Smith signed the petition as chairman, chief executive officer, president and chief operating officer. The Debtor said in the filing that it does not have the financial resources to pay the outstanding principal amount of the 4.50% Convertible Senior Notes, 6.000% Senior Notes and the 6.625% Senior Notes if those amounts were to become due and payable. The Debtor is represented by James L. Patton, Esq., Pauline K. Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP. The Official Committee of Unsecured Creditors appointed in the case retained Morrison & Foerster LLP and Womble Carlyle Sandridge & Rice, LLP, as bankruptcy co-counsel. Peter J. Solomon Company serves as the Committee's financial advisor. RAAM GLOBAL: S&P Affirms 'B-' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Lexington, Ky.-based RAAM Global Energy Co. (RAAM) to stable from negative and affirmed its 'B-' corporate credit rating. "At the same time, we lowered the issue-level rating on RAAM's $200 million senior notes due 2015 to 'B-' (one notch lower than the corporate credit rating) from 'B', and we revised the recovery rating to '3', indicating our expectation of meaningful (50% to 70%) recovery of principal in the event of a payment default, from '2'," S&P said. "The outlook revision on RAAM reflects our expectation that the company's liquidity and cash flow will improve as a result of higher natural gas prices based on our revised price assumptions as of July 24, 2012," said Standard & Poor's credit analyst Susan Ding. "The lowering of the issue rating on the company's secured debt and revision of the recovery rating result from our updated calculation of the company's reserve valuation." "The ratings on RAAM reflect the company's 'vulnerable' business risk and 'highly leveraged' financial risk. Our assessment of the business risk is based on the company's limited and small reserve base, very short reserve life, meaningful exposure to weak natural gas prices, and its concentration in the Gulf of Mexico (which constitutes about 70% of proved reserves as of year-end 2011 and 60% of 2011 annual production). The ratings also reflect the company's participation in a highly cyclical, capital-intensive, and very competitive industry as well as its satisfactory credit metrics and adequate liquidity over the next 12 months. RAAM had about $223 million of adjusted debt as of March 31, 2012," S&P said. "As of Dec. 31, 2011, the company had a relatively small proven reserve base of 14 billion cubic feet equivalent (bcfe) (though reserves did grow by 25% from 2010), and production was about 66 million cubic feet equivalent per day (mmcfe/d) for 2011. Natural gas accounted for about 45% of the company's reserves but 73% of production in 2011," S&P said. "We expect the company's production mix to remain relatively unchanged in 2012. Almost 73% of the production is from the company's offshore assets: Breton Sound 53 field, and fields on the outer continental shelf (in federal waters). The remaining production is from onshore conventional plays on the coasts of Louisiana and Texas. For 2012, the company plans to increase its production through its onshore assets and the Breton Sound field. The company's projected capital expenditure budget for 2012 is about $177 million, a 22% decrease from 2011, the majority of which is allocated to onshore oil and natural gas liquids plays," S&P said. "The stable outlook reflects our view that the company's liquidity will remain adequate to fund fixed costs and capital spending over the next 12 months. We expect leverage for 2012 and 2013 to be in the 2x range, and EBITDA interest coverage of about 4x for the same period. We could lower the rating if liquidity drops below $50 million. Alternatively, we could consider an upgrade if RAAM diversifies its assets and production while maintaining adequate liquidity and leverage below 3x," S&P said. RADIOSHACK CORP: Has 80% Chance of Default, Bloomberg Says ---------------------------------------------------------- Michael Bathon, substituting for Bloomberg bankruptcy columnist Bill Rochelle, reports that derivatives linked to RadioShack Corp. debt imply the retailer has an 84% chance of default within five years, a level Eastman Kodak Co. and AMR Corp. reached within six months of filing bankruptcy protection. Credit-default swaps on the Fort Worth, Texas-based electronics chain's debt have been rising since January, when they indicated a 50% default risk, jumping after the company reported a second-quarter loss last week. According to the report, investors are concerned RadioShack may burn through its $517.7 million of cash as competition from online and discount retailers such as Amazon.com Inc. to Wal-Mart Stores Inc. squeeze margins at electronics chains including RadioShack and Best Buy Co. "The market seems to be saying it is surprised that the company has continued to survive," said Melissa Weiler, managing director at Crescent Capital Group LP, an alternative-credit asset manager that oversees about $10 billion. "RadioShack seems to be one of a few dinosaurs remaining out there," she said in a telephone interview from Los Angeles with Bloomberg's Mary Childs. RadioShack swaps jumped 28.3 percentage points this year to a mid- price of 38% upfront July 30, according to data provider CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market. That means investors pay $3.8 million initially and $500,000 annually to protect $10 million of the company's debt for five years. That's up from $966,000 upfront in January, and compares with $1.5 million upfront for contracts tied to Best Buy. RadioShack's credit-default swaps are the widest of the group of U.S. retailers tracked by Bloomberg, and the 11th widest of global credit-default swaps, trailing Energy Future Holdings Corp. and Caesars Entertainment Operating Co., according to data compiled by Bloomberg. The report notes swaps tied to Kodak reached levels that implied an 84% chance of default in five years on July 18, 2011, six months before it filed for Chapter 11 protection. American Airlines parent AMR's credit-default swaps passed that level on Sept. 22, before it filed on Nov. 29. RadioShack sells consumer electronics and peripherals, including cellular phones. It operates roughly 4,700 stores in the U.S. and Mexico. It also operates about 1,500 wireless phone kiosks in Target stores. The company also generates sales through a network of 1,100 dealer outlets worldwide. Revenues for the last 12 months' period ending June 30, 2012 were roughly $4.4 billion. READER'S DIGEST: S&P Puts 'CCC+' CCR on Watch Neg on Weak Earnings ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'CCC+' corporate credit rating and 'CCC' senior secured ratings for New York-based publisher and direct marketer Reader's Digest Assn. Inc. on CreditWatch with negative implications. "The CreditWatch placement reflects our concern that continued weak operating performance and negative discretionary cash flow may result in meaningful reduction in the company's cash balances and that it may need an amendment to its credit facility within the next year," said Standard & Poor's credit analyst Minesh Patel. "Reader's Digest's direct mail and publishing business are subject to significant medium term structural risks, and we view a meaningful decline in liquidity or a covenant violation as a key short-term catalyst that would contribute to a payment default." "Sales, pro forma for discontinued operations and fresh start accounting, fell 11.3% in the three months ended March 31, 2012, while negative covenant EBITDA increased to $37.7 million from $16.2 million on the inability to reduce costs at the same pace as the revenue declines. Cash balances are the primary source of liquidity as the company does not have a revolving credit facility. Liquid cash balances were only $81.6 million as of March 31, 2012, after subtracting $72.3 million of cash held by foreign subsidiaries, while negative discretionary cash flow was about $84 million for the 12 months ended March 31, 2012," S&P said. "We also expect the company to continue facing secular pressure in its publications and direct marketing businesses, restricting its ability to improve operating performance and generate positive discretionary cash flow. For the 12 months ended March 31, 2012, pro forma for the impact of fresh start accounting and the divestiture of Every Day with Rachael Ray, music and video revenue declined about 14.5%, books revenue declined about 9.1%, and magazine circulation revenue declined 4.9%. Advertising and non- published products and services revenue, supported by increased North America partnership licensing and advertising revenue, increased 11.7%," S&P said. REDPRAIRIE CORP: $20MM Debt Upsize No Impact on S&P's 'B+' CCR -------------------------------------------------------------- Standard & Poor's Ratings Services said RedPrairie Corp.'s announced upsizing of its proposed term loan to $360 million from $340 million does not affect its 'B+' corporate credit rating on the company or its 'B+' issue-level rating and '3' recovery rating on the company's proposed credit facilities. "The company increased the proposed dividend by $9 million to $145 million from $136 million and it will hold the incremental $11 million of proceeds on the balance sheet. The upsizing modestly increases March 2012 pro forma leverage to the low-5x area from about 5x," S&P said. "The ratings on RedPrairie reflect the company's 'weak' business risk profile deriving from its niche position within a fragmented and highly competitive market, and its exposure to the cyclical retail industry. The company also has an 'aggressive' financial risk profile marked by an acquisitive growth strategy and an ownership structure we believe precludes sustained de-leveraging. However, we expect that the company's revenues will increase modestly, given its leading position in the market for supply- chain management software and its diverse and entrenched customer base," S&P said. RATINGS LIST RedPrairie Corp. Corporate Credit Rating B+/Stable/-- $360 mil. term loan B+ Recovery Rating 3 RESIDENTIAL CAPITAL: Court OKs Scope of Examiner Investigation -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the scope of investigation proposed by the examiner appointed in the bankruptcy cases of Residential Capital LLC and its affiliated debtors. Retired bankruptcy judge Arthur Gonzalez will investigate all transactions among Residential Capital LLC, Ally Financial Inc. and its affiliates prior to the company's bankruptcy filing. The examiner will also investigate the companies' corporate relationships in connection with Residential Capital's decisions to file for bankruptcy protection, to pursue a sale of substantially all of its assets, among other things. The examiner plans to seek authority to issue subpoenas on anyone possessing "information relevant to the investigation," and will need "a substantial amount of time" to prepare his report, Reuters reported citing papers filed in court. A copy of the examiner's statement regarding the scope and timing of his investigation can be accessed without charge at http://bankrupt.com/misc/Rescap_ExaminerScopeProbe.pdf The request for examiner appointment came from Berkshire Hathaway Inc., which holds more than $900 million of ResCap junior secured bonds. Berkshire alleged that ResCap's first-day pleadings and public securities filings reveal dozens of transactions with Ally Financial. The transactions allegedly involved billions of dollars of asset transfers and intercompany financing whose net effect was to transfer a substantial share of ResCap's operating assets to its parent. About Residential Capital 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: Nov. 12 Settlement Deadline for RMBS Trustees ------------------------------------------------------------------ At the Bankruptcy Court's directive, MBIA Insurance Corporation, an unsecured creditor, submitted a status report regarding its progress in negotiating with parties-in-interest in relation to the Debtors' request for approval of settlement agreements with the residential mortgage-backed securities trusts. MBIA related that it has engaged in preliminary discussions with the Debtors concerning the substance of the RMBS Trust Settlement and the Debtors agreed to produce relevant documents to enable MBIA to more fully evaluate the impact of the proposed settlement upon its claims. MBIA also related that it has been in contact with the Talcott Franklin Group and the Group has answered some of MBIA's questions concerning the RMBS Trust Settlement and has agreed to produce certain categories of documents to MBIA. MBIA further related that it has outlined a process for discovery with the committee of consenting claimants (the "Steering Committee"). As reported in the June 22, 2012 edition of the Troubled Company Reporter, the Debtors have asked the Court 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 roughly 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. Scheduling Order The Debtors, Bank of New York Mellon Trust Company, N.A., Deutsche Bank Trust Company Americas, Deutsche Bank National Trust Company, U.S. Bank National Association, and Wells Fargo Bank, N.A., entered into a court-approved timeline for resolving issues related to the sale of the Debtors' assets and the RMBS Trust Settlement. The Official Committee of Unsecured Creditors and Financial Guaranty Insurance Company support the scheduling order. The schedule is as follows: July 24, 2012 - Fact discovery will commence Aug. 15, 2012 - Debtors will supplement the 9019 Motion Sept. 24, 2012 - Fact discovery will end - Designation of expert witness Oct. 5, 2012 - Submission of objections from a party other than the Creditors' Committee and the RMBS Trustees to the 9019 Motion Oct. 8, 2012 - Offering in evidence of any expert report Oct. 12, 2012 - Expert discovery will end Oct. 15, 2012 - Submission of objections from Committee and RMBS Trustees to the 9019 Motion Oct. 29, 2012 - Filing of reply to objections Nov. 5, 2012 - Commencement of evidentiary hearing Nov. 12, 2012 - Deadline for RMBS Trustees to accept or reject the settlement About Residential Capital 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: Can Continue Loss Mitigation Programs ---------------------------------------------------------- Residential Capital LLC and its affiliates sought and obtained final authority from Judge Glenn to continue developing and implementing loss mitigation programs and procedures in the ordinary course of business, including making incentive payments to borrowers in connection with the closing of short sales, or vacating properties in lieu of foreclosure of eviction proceedings, or in the form of borrower rebates for loan payoffs. Cash payments under the Loss Mitigation Programs during the period from the Petition Date through the date of the final approval of the request will not exceed $2.0 million in the aggregate. The Debtors explained that their loss mitigation programs assist borrowers to avoid foreclosure while stabilizing the risk of loss to investors. For borrowers who accept the offer to participate in the loss mitigation programs, the Debtors' foreclosure resolution timeliness may be reduced considerably, thus reducing the amount of foreclosure timeline penalties assessed against them and improving their short-term liquidity. The Court also granted the Debtors limited relief from the automatic stay to permit (w) borrowers or their tenants to prosecute direct claims and counterclaims in foreclosure and eviction proceedings, (x) borrowers to prosecute certain actions in borrower bankruptcy cases, (y) the Debtors to prosecute foreclosure actions in those circumstances where they service senior mortgage loans and own the junior mortgage loans on the underlying property, and (z) third party lien holders to prosecute direct claims and counterclaims in actions involving the amount, validity or priority of liens on properties subject to foreclosure proceedings. The Court also authorized the Debtors to pay certain securitization trustee fees and expenses. Wendy Alison Nora, a contingent claimant holding a claim in excess of $10 billion, object to the entry of a final order approving the loss mitigation program arguing that such approval would allow the Debtors to continue their racketeering enterprise. Creditor Seeks Reconsideration Wendy Alison Nora, a contingent claimant in litigation, holding a claim in excess of $10 billion, seeks reconsideration of the order allowing the Debtors to continue to implement loss mitigation programs asserting that such authority allows the continuation of the operation of the Debtors' racketeering enterprise. About Residential Capital 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: To Process Mortgage Loan Commitments --------------------------------------------------------- Residential Capital LLC and its affiliated debtors obtained final approval from the U.S. Bankruptcy Court for the Southern District of New York to continue their operations in the ordinary course including the retail marketing of mortgage loan products. The Debtors were also authorized to continue the funding of mortgage loans they originated in Ohio and Nevada, and the sale of mortgage loans directly to securitization trusts guaranteed by Ginnie Mae for securitization or to Ally Bank for subsequent resale to Fannie Mae or Freddie Mac. The final order also authorized the Debtors to purchase mortgage loans from Ally Bank and subsequently sell those loans to securitization trusts guaranteed by Ginnie Mae pursuant to a master mortgage loan purchase and sale agreement between Ally Bank and GMAC Mortgage. About Residential Capital 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: Has Deloitte & Touche as Auditor ----------------------------------------------------- Residential Capital LLC asked the U.S. Bankruptcy Court for the Southern District of New York to approve the hiring of Deloitte & Touche LLP as its auditor. The company tapped the firm to review its interim financial information for each of the quarters in the year ending Dec. 31, 2012. Deloitte will also review the financial statements of the company and two of its affiliates, GMAC Mortgage LLC and Residential Funding Company LLC. The firm will also examine the compliance of GMAC and RFC with the Department of Housing and Urban Development's audit guide for audits of housing and urban development programs, among other services. Deloitte will be paid for its services in an hourly basis and will be reimbursed of its expenses. For its audit services, Deloitte will be paid at these hourly rates: Personnel Hourly Rates --------- ------------ Partner/Principal/Director $365 Senior Manager $290 Manager $265 Senior Staff $215 Staff $175 For its "servicing compliance" services, Deloitte will be compensated by a fixed fee of $1.465 million, of which $300,000 was paid prior to Residential Capital's bankruptcy filing. The firm does not hold interest adverse to Residential Capital and its affiliated debtors, according to a declaration by Tom Robinson, a partner at Deloitte. About Residential Capital 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). SCOTTO RESTAURANT: Suit Challenging Lenders' Liens Goes to Trial ---------------------------------------------------------------- In the lawsuit, Scotto Restaurant Group, LLC Plaintiff, v. Mission Valley Bank and Advance Restaurant Finance, LLC, Defendants, Adv. Proc. No. 12-3027 (Bankr. W.D.N.C.), Bankruptcy Judge Laura T. Beyer denied the Plaintiff's Motion for Partial Summary Judgment seeking to have the Court find that there are no genuine issues of material fact and that the Plaintiff is entitled to judgment as a matter of law that the Defendants do not have a valid security interest in the Plaintiff's collateral and are therefore unsecured creditors. According to Judge Beyer, while the Court agrees with the Plaintiff's argument that neither the January 2008 financing statement nor the September 2009 financing statement were effective to perfect the Defendants' lien, the Motion is denied due to unsettled factual issues regarding the Plaintiff's merger with a related entity, Scotto Holdings, LLC, in June 2009. Scotto Holdings submitted its first loan application to Advance Restaurant Finance on June 21, 2006. Holdings's first application sought a $30,000 loan. On Jan. 22, 2008, Holdings submitted a second loan application seeking a $50,000 loan. Holdings executed a Merchant Agreement, and the Plaintiff and Justin Scotto, a principal of the Plaintiff and Holdings, guaranteed the loan. The guarantee signed by the Plaintiff did not include language indicating a security agreement. On Jan. 23, 2008, Justin Scotto executed Amendment F to the Merchant Agreement, providing that the Plaintiff would serve as a "Secondary Payment Source" for the January 22, 2008, loan to Holdings. On Jan. 24, the LAP Group, LLC (apparently on behalf of the Defendants) filed a Financing Statement against the Plaintiff. Holdings received five additional loans from the Defendants from March 2008 through July 2009. On June 1, 2009, Holdings and the Plaintiff merged. On Aug. 29, 2009, the Plaintiff applied for a $126,000 loan with Mission Valley Bank. The Plaintiff executed a Merchant Agreement in connection with this loan and granted the Defendants a security interest in personal property. On Sept. 8, Mission Valley filed an Amendment to the Financing Statement with the North Carolina Secretary of State. On June 25, 2010, the loan to the Plaintiff was amended to provide $150,000 in additional funds. According to the Plaintiff, the total amount of the loan after this amendment was $200,799. On June 30, ARF began withdrawing weekly payments of $4,000 from the Plaintiff's bank account. On Aug. 11, 2011, an Involuntary Petition was filed that began the Plaintiff's bankruptcy case. According to Judge Beyer, the Court cannot conclude that the Defendants' lien is entirely unperfected and therefore vulnerable to the Plaintiff's "strong-arm" powers pursuant to 11 U.S.C. Sec. 544. The judge said the impact of the merger on the Defendants' claim is a material issue of genuine fact that precludes summary judgment. A copy of the Court's July 30, 2012 Order is available at http://is.gd/ZpTWNFfrom Leagle.com. About Scotto Restaurant Denver, North Carolina-based Scotto Restaurant Group LLC, fka Scotto Holdings, LLC, operates 7 Firehouse Subs franchise locations and has approximately 100 employees. Three creditors placed Scotto Restaurant Group in bankruptcy by filing an involuntary Chapter 11 petition (Bankr. W.D.N.C. Case No. 11-40506) on Aug. 11, 2011. The petitioning creditors are Lester B. High, William Holmes and Donald L. Myers. They allege to be owed $1.85 million in the aggregate on account of unsecured promissory notes. The petitioning creditors are represented by Kiah T. Ford, IV, Esq., at Parker, Poe, Adams & Bernstein LLP, as counsel. Judge George R. Hodges oversees the case. James H. Henderson, Esq., at The Henderson Law Firm, in Charlotte, N.C., represents the Debtor as counsel. The Debtor scheduled $129,861 in assets and $3,018,705 in liabilities. SAGAMORE PARTNERS: Court Extends Solicitation Period for 3rd Time ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida, granted Sagamore Partners, Ltd.'s third motion extending the Debtor's exclusive period to obtain acceptances of its Plan of Reorganization through and including the date of the conclusion of the confirmation hearing on the Plan. On March 2, 2012, the Debtor filed its Plan of Reorganization. The Debtor cannot solicit until after approval of the Disclosure Statement, which is pending. JPMCC 2006-LDP7 Miami Beach Lodging, LLC, had objected to the motion. JPMCC cited that the Debtor still has not filed a revised plan and disclosure statement despite its repeated assurances it would do so since April, 2012. JPMCC said that the motion, if granted, would provide the Debtor with virtually an indefinite extension of time, to an uncertain date, which it alone would control by its continued failure to file a revised plan and disclosure statement. Bay Harbor, Florida-based Sagamore Partners, Ltd., owns and operates the oceanfront Sagamore Hotel, also known as The Art Hotel due to its captivating art collection from recognized artists and its contemporary design. The all-suite boutique hotel is situated within Miami's Art Deco Historic District on South Beach. Sagamore Partners is owned by Martin Taplin. Sagamore Partners filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-37867) on Oct. 6, 2011. Judge A. Jay Cristol presides over the case. Joshua W. Dobin, Esq., and Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, Fla., serve as the Debtor's counsel. The Debtor disclosed $71,099,556 in assets and $52,132,849 in liabilities as of the Chapter 11 filing. The petition was signed by Martin W. Taplin, Pres of Miami Beach Vacation Resorts, Inc., manager of Sagamore GP, LLC, general partner. SAGAMORE PARTNERS: Can Access Cash Collateral Until Aug. 23 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida, in an eleventh interim order, authorized Sagamore Partners, Ltd., to use cash collateral of Secured Lender JPMCC 2006-LDP7 Miami Beach Lodging, LLC, to pay for the operating expenses and costs of administration, pursuant to a revised budget, with a permitted variance of 5% on a per line item basis. The Debtor's authority to use the Cash Collateral is slated to expire Aug. 23, 2012. As adequate protection, the Secured Lender is granted replacement liens. In addition, the lender will receiver from the Debtor interest payments, calculated at the contract rate of 6.54%, based on the outstanding principal amount of the prepetition debt, as provided in the budget. It is also an allowed superpriority administrative expense claim under Section 507(b) of the Bankruptcy Code. Bay Harbor, Florida-based Sagamore Partners, Ltd., owns and operates the oceanfront Sagamore Hotel, also known as The Art Hotel due to its captivating art collection from recognized artists and its contemporary design. The all-suite boutique hotel is situated within Miami's Art Deco Historic District on South Beach. Sagamore Partners is owned by Martin Taplin. Sagamore Partners filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-37867) on Oct. 6, 2011. Judge A. Jay Cristol presides over the case. Joshua W. Dobin, Esq., and Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, Fla., serve as the Debtor's counsel. The Debtor disclosed $71,099,556 in assets and $52,132,849 in liabilities as of the Chapter 11 filing. The petition was signed by Martin W. Taplin, Pres of Miami Beach Vacation Resorts, Inc., manager of Sagamore GP, LLC, general partner. SEVEN SEAS: S&P Rates $340MM First-Lien Sr. Credit Facilities BB- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its issue-level and recovery ratings to Miami, Fla.-based cruise line operator Seven Seas Cruises S. DE R.L.'s proposed $340 million first-lien senior secured credit facilities. "We assigned to the company's planned $40 million five-year senior secured revolving credit facility and $300 million six-and-a-half-year term loan our issue-level rating of 'BB-' (two notches higher than our 'B' corporate credit rating on the company) with a recovery rating of '1', indicating our expectation of very high (90% to 100%) recovery for lenders in the event of a payment default," S&P said. "At the same time, we placed our issue-level rating on Seven Seas Cruises' $225 million 9.125% second-priority senior secured notes due 2019 on CreditWatch with negative implications," S&P said. "The company plans to use the proceeds from the credit facilities to refinance its existing first-lien facilities, including the $293.5 million outstanding under the term loan. The required amortization on the planned term loan would be $3 million on an annual basis compared to the $25 million annually for the existing term loan (because of prepayments, there is no required quarterly amortization until the March 2013 quarter). This would result in a higher level of first-lien debt outstanding under our simulated default scenario versus our previous analysis, which would reduce the recovery prospects for the second-priority notes enough to warrant a downward revision to our recovery rating on the notes. Upon closing of the transaction, we will revise our recovery rating on the second-priority notes to '6' (indicating our expectation of 0 to 10% recovery) from '5' (10% to 30% recovery) and lower our issue-level rating to 'CCC+' (two notches lower than the corporate credit rating) from 'B-' (one notch lower), in accordance with our notching criteria for a recovery rating of '6'," S&P said. "All other ratings, including our 'B' corporate credit rating, remain unchanged. The outlook is stable," S&P said. "We will resolve the CreditWatch regarding the issue-level rating on Seven Seas' $225 million 9.125% second-priority senior secured notes due 2019 upon the close of the proposed first lien credit facility," S&P said. SFRP, LLC: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: SFRP, LLC 7 Skyline Place Astoria, OR 97103 Bankruptcy Case No.: 12-35847 Chapter 11 Petition Date: July 29, 2012 Court: U.S. Bankruptcy Court District of Oregon Judge: Randall L. Dunn Debtor's Counsel: Nicholas J. Henderson, Esq. MOTSCHENBACHER & BLATTNER, LLP 117 SW Taylor Street, #200 Portland, OR 97204 Tel: (503) 417-0508 E-mail: nhenderson@portlaw.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 Randy Stemper, member. SHAW GROUP: Moody's Reviews 'Ba1' CFR/PDR for Downgrade ------------------------------------------------------- Moody's Investors Service has placed the Ba1 corporate family rating (CFR) and the Ba2 probability of default rating (PDR) of Shaw Group under review for downgrade, as well as the Ba1unsecured revolving credit facility rating. This rating action follows the announcement that CB&I has reached an agreement to acquire Shaw Group for approximately $3 billion in cash and stock. The company's speculative grade liquidity rating of SGL-2 was affirmed. On Review for Downgrade: Corporate Family Rating, Placed under Review for Downgrade, currently Ba1 Probability of Default Rating, Placed under Review for Downgrade, currently Ba2 $1.45 billion senior unsecured revolving credit facility due 2016, Placed under Review for Downgrade, currently rated Ba1 (LGD 3, 43%) Outlook Actions: Outlook, Changed To Rating Under Review From Stable Ratings Rationale The review of Shaw for a downgrade reflects uncertainties with regard to the ultimate credit profile of the company after the transaction with CB&I. The pro forma consolidated credit metrics are likely to be weaker than Shaw Group's current metrics as CB&I expects to fund the transaction with a significant portion of Shaw Group's cash balance and $1.9 billion of additional debt. This will result in a substantial decline in the consolidated liquidity at a time when they will be taking on greater financial and business risk and the risks associated with the integration of the two organizations. The engineering and (E&C) construction industry typically maintains elevated levels of liquidity and low levels of leverage due to the substantial uncertainty that goes along with the completion of large complicated projects. Therefore, the completion of this transaction will result in a company with a higher financial and business risk profile, and a lack of clarity at this stage as to the apportionment of financial risk between Shaw and CB&I. It is likely that Shaw Group's rating will be withdrawn and the company's senior unsecured credit facility (Ba1) terminated upon consummation of the transaction due to the change in control provision. Moody's will provide an update to the CFR and PDR ratings at that time. Moody's review of Shaw Group's ratings will consider such factors as whether or not CB&I successfully executes the transaction, which is subject to antitrust clearance, as well as the impact on Shaw of the final financing arrangement for the acquisition The principal methodology used in rating Shaw Group was the Global Construction Industry Methodology published in November 2010. Headquartered in Baton Rouge, Louisiana, Shaw Group Inc. is a global engineering, construction, technology, fabrication, environmental and industrial services contractor for clients in the energy, chemicals, environmental, infrastructure and emergency response industries. The company generated consolidated operating revenue of approximately $6.0 billion in fiscal 2011. SHERRILL MANUFACTURING: Great American Holds Auction ---------------------------------------------------- Great American Group, LLC held an auction July 19 for a wide range of flatware manufacturing equipment owned by Sherrill Manufacturing. Great American SVP Roy Gamityan expected a strong level of interest in the auction -- specifically for the Minster Press Line, Mori Seiki SL35B lathe and Mazak machining centers. Name-brand auction items include a Minster P2-150 Piece Maker High Speed Press Line, a Mazak V655 Machining Center, a Mori Seiki SL- 35B Lathe, and a Mazak FH480 Horizontal Machining Center. In addition, other fabrication machinery will be auctioned, including items from a large conventional machine shop and tooling department, heat treating equipment, boilers, air compressors, forklifts, pallet racking, and other general plant equipment. About Sherrill Manufacturing Sherrill Manufacturing was founded when a consortium of former Oneida Ltd. employees purchased the factory from Oneida Ltd. in 2005. The company stopped manufacturing in May 2010 and filed for Chapter 11 bankruptcy protection in August 2010. In September 2011, a large order from an internet marketer allowed the company to operate briefly with temporary employees, until the order was filled. Based in New Yok, Sherrill Manufacturing Inc. filed for Chapter 11 bankruptcy protection (Bankr. N.D.N.Y. Case no. 10-62669) on Oct. 4, 2010. Neil Joseph Smith, Esq., at Mackenzie Hughes LLP, represented the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. SP NEWSPRINT: Wins Court Approval for Aug. 17 Auction ----------------------------------------------------- Michael Bathon, substituting for Bloomberg bankruptcy columnist Bill Rochelle, reports that SP Newsprint Holdings LLC won court approval to hold an Aug. 17 auction to sell virtually all its assets. The report relates that U.S. Bankruptcy Judge Christopher Sontchi approved the guidelines that will govern the auction at a July 27 hearing in Wilmington, Delaware. All offers to compete in the auction must be submitted by Aug. 13, according to court documents. The company will seek court approval to sell the assets to the auction winner at a hearing scheduled for Aug. 21. Objections to the sale must be filed by Aug. 16. According to the report, SP Newsprint's lenders will act as the so-called stalking horse for the auction setting a floor for other bidders to beat, according to court filings. The lenders will make a credit bid, using forgiveness of its secured debt to buy the assets. General Electric Capital Corp., as both agent to lenders and a lender itself, is owed about $254 million. About SP Newsprint Greenwich, Conn.-based SP Newsprint Holdings LLC -- aka Bulldog Acquisition I LLC, Bulldog Acquisition II LLC, Publishers Papers, Southeastern Paper Recycling and SP Newsprint Merger LLC -- and three affiliates, SP Newsprint Co. LLC, SP Recycling Corporation and SEP Technologies L.L.C, filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 11-13649) on Nov. 15, 2011. SP Newsprint Holdings LLC is a newsprint company controlled by polo-playing mogul Peter Brant. It is one of the largest producers of newsprint in North America. SP Recycling Corporation, a Georgia corporation and the Debtors' other operating company, was established in 1980 as a means for SP to secure a ready supply of recycled fiber, a key raw material for its newsprint. SP Newsprint is the second Brant-owned newsprint company to tumble into bankruptcy proceedings in recent years. Current and former affiliated entities are Bear Island Paper Company, L.L.C., Brant Industries, Inc., F.F. Soucy, Inc., Soucy Partners Newsprint, Inc., White Birch Paper Company. Judge Christopher S. Sontchi presides over the case. Joel H. Levitin, Esq., Maya Peleg, Esq., and Richard A. Stieglitz Jr., Esq., at Cahill Gordon & Reindel LLP serve as the Debtors' lead counsel. Lee E. Kaufman, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., serve as the Debtors' Delaware counsel. AlixPartners LLP serves as the Debtors' financial advisors and The Garden City Group Inc. serves as the Debtors' claims and noticing agent. SP Newsprint Co., LLC, disclosed $318 million in assets and $323 million in liabilities as of the Chapter 11 filing. The petitions were signed by Edward D. Sherrick, executive vice president and chief financial officer. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler PC. Ashby & Geddes, P.A., serves as its Delaware counsel, and BDO Consulting serves as its financial advisor. STANDARD PACIFIC: Fitch Rates $150MM Senior Notes Offering 'B-' --------------------------------------------------------------- Fitch Ratings has assigned a 'B-/RR4' rating to Standard Pacific Corp.'s (NYSE: SPF) proposed offering of $150 million aggregate principal amount of convertible senior notes due 2032. The Rating Outlook is Stable. The company also announced the proposed concurrent public offering of 12.5 million shares of its common stock. Standard Pacific intends to use the net proceeds of the notes offering and the concurrent common stock offering for general corporate purposes, including land acquisition and development, home construction and other related purposes. Neither the notes offering nor the common stock offering will be conditioned upon consummation of the other. The rating and Outlook for SPF are influenced by the company's execution of its business model, relatively aggressive land acquisition strategy, geographic and product line diversity and healthy liquidity position. While Fitch expects moderately better prospects for the housing industry this year, there remain challenges facing the housing market. Nevertheless, SPF has the financial flexibility to navigate through the still somewhat difficult market conditions and continue to invest in land opportunities to fuel growth in the coming years. SPF is focused on growing its operations by investing in new communities, particularly in land-constrained markets. Following the significant reduction of its land supply during the 2006 -2009 periods, SPF began to increase its land holdings during 2010 and 2011. At June 30, 2012, the company had 27,757 lots controlled, a 5.1% increase over the previous year and almost 45% growth over year-end 2009 land holdings. Its owned and optioned lot positions increased 11.8% and fell 11.5% as compared to second quarter 2011, respectively, while its joint venture lot position fell 15.5% year-over-year. Based on the latest twelve month closings, SPF controlled 9.3 years of land and owned roughly 7.2 years of land. SPF increased its average community count by 2.6% to 157 active communities during the second quarter of 2012 as compared to the second quarter of 2011. The company spent roughly $437 million on land ($304 million) and development ($133 million) during 2011 compared to $336 million in 2010. In 2012, management expects roughly $400 - 500 million in total land spend, including an estimated $150 million of land development costs. Fitch is comfortable with this strategy given the company's healthy liquidity position, well-laddered debt maturity schedule and management's demonstrated ability to manage its spending. While land and development spending will remain a priority, Fitch expects that the company will adhere to its strict underwriting guidelines and continue to maintain adequate liquidity. The company ended the second quarter of 2012 with $292.1 million of unrestricted cash and $203.5 million of availability under its unsecured revolving credit facility. Fitch expects the company will be cash flow negative by about $150 million during 2012 and its cash position will decline to around $200 million at year-end 2012, excluding proceeds from these offerings. Additionally, the company has approximately $40 million of debt coming due this year. Fitch expects SPF in the intermediate term will maintain liquidity of at least $400 million from a combination of cash and revolver availability. The company continues to have relatively heavy exposure in the state of California, generating over 50% of its revenues and holding more than 55% of the dollar value of its real estate inventory in this state. SPF also has operations in major metropolitan markets in Texas, Arizona, Nevada, Colorado, Florida and the Carolinas. The company has a substantial presence and ranks in the top 10 in most of the markets where it operates. SPF constructs homes within a wide range of prices and sizes, with an emphasis on move-up buyers. During 2011, management estimates that 73% of its deliveries were directed to the move-up/luxury market, while 27% were to entry-level buyers. By comparison, 67% of its deliveries during 2010 were to move-up/luxury buyers, while 33% were directed to the entry-level market. Builder and investor enthusiasm have for the most part surged so far in 2012. However, housing metrics have not entirely kept pace. Year-over-year (yoy) comparisons have been solidly positive on a consistent basis. However, month-to-month statistics (single- family starts, new home sales, and existing home sales) have been erratic and, at times, below expectations. In any case, year to date these housing metrics are well above 2011 levels. As Fitch has noted in the past, recovery will likely occur in fits and starts. Fitch's housing forecasts for 2012 have been raised since the beginning of the year, but still assume only a moderate rise off a very low bottom. In a slowly growing economy with relatively similar distressed home sales competition, less competitive rental cost alternatives, and new home inventories at historically low levels, single-family housing starts should improve about 12%, while new home sales increase approximately 10.5% and existing home sales grow 5.6%. Further moderate improvement is forecast for 2013. Future ratings and Outlooks will be influenced by broad housing market trends as well as company specific activity, such as trends in land and development spending, general inventory levels, speculative inventory activity (including the impact of high cancellation rates on such activity), gross and net new order activity, debt levels, cash position and especially free cash flow trends and uses. Negative rating actions could occur if the anticipated recovery in housing does not materialize and the company prematurely steps up its land /development spending, leading to consistent and significant negative quarterly cash flow from operations and diminished liquidity position (below $400 million). Positive rating actions could be considered if the recovery in housing is significantly better than Fitch's current outlook and the company continues to maintain a healthy liquidity position. Fitch has affirmed the following ratings for SPF with a Stable Outlook: -- IDR at 'B-'; -- Senior unsecured notes at 'B-/RR4'; -- Unsecured Revolving Credit Facility at 'B-/RR4'; -- Senior subordinated debt at 'CC/RR6'. Fitch has also assigned a 'B-/RR4' rating to the company's $210 million unsecured revolving credit facility. The 'RR4' Recovery Rating (RR) on the company's unsecured debt indicates average recovery prospects for holders of these debt issues. Standard Pacific's exposure to claims made pursuant to performance bonds and joint venture debt and the possibility that part of these contingent liabilities would have a claim against the company's assets were considered in determining the recovery for the unsecured debt holders. The 'RR6' on Standard Pacific's senior subordinated notes indicate poor recovery prospects in a default scenario. Fitch applied a liquidation value analysis for these RRs. STANDARD PACIFIC: Moody's Rates $150MM Senior Note Offering 'B3' ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Standard Pacific Corp.'s proposed $150 million convertible senior note offering due 2032. In the same rating action, Moody's assigned a (P)B3 rating to the company's senior unsecured shelf and a (P)Caa2 rating to its senior subordinate shelf. Moody's also affirmed all of the company's existing ratings, including B3 corporate family rating, B3 probability of default rating, B3 senior unsecured note rating, Caa2 convertible senior subordinated note rating and SGL-2 speculative grade liquidity assessment. The rating outlook was changed to positive from stable. The proceeds from the proposed $150 million convertible senior unsecured note offering, along with the proceeds from the concurrent offering of 12.5 million shares of common stock, will be designated for general corporate uses, including land acquisition and development, and home construction. Ratings Rationale The change in the outlook to positive from stable reflects Moody's expectation that the improvement in the company's operating performance, including rising new orders and backlog, solid gross margin performance and positive net income generation, will continue. Additionally, the positive outlook incorporates the equity offering being a part of this transaction, which is likely to result in little change to the company's current adjusted homebuilding debt to capitalization ratio of 68%. The convertible senior unsecured notes are being rated B3 given their equal rank in the right of payment with the existing senior unsecured notes. The following rating actions were taken: Proposed $150 million convertible senior unsecured notes due 2032, assigned B3 (LGD4, 51%); Senior unsecured shelf, assigned (P)B3; Senior subordinate shelf, assigned (P)Caa2; Corporate family rating, affirmed at B3; Probability of default rating, affirmed at B3; Senior unsecured note rating, affirmed at B3 (LGD4, 51%); Convertible senior subordinated note rating, affirmed at Caa2 (LGD6, 96%); Speculative grade liquidity assessment, affirmed at SGL-2. All of Standard Pacific's debt is guaranteed by its principal operating subsidiaries. The B3 corporate family rating reflects Moody's expectation that Standard Pacific has reduced costs sufficiently that it can increase its profitability as the industry conditions continue to solidify. Impairments and other charges, which totaled approximately $2.5 billion over the past five years, are likely to be less material going forward, given the company's attractive gross margin performance and a stabilizing pricing environment. In addition, the company has substantially reduced its off-balance sheet joint venture exposure, eliminating recourse JV debt of over $500 million that was outstanding in 2007. Standard Pacific's liquidity is supported by the unrestricted cash balances of $292 million at June 30, 2012, which will increase as per the proposed equity and debt offerings, $204 million of availability under its revolving credit facility, and absence of significant debt maturities until 2016. At the same time, the company's debt leverage remains elevated, standing at about 68% homebuilding debt-to-capitalization, while net worth of $657 million at June 30, 2012, is relatively moderate to support the company's growth expectations. In addition cash flow, one of the main sources of strength for the company during the worst years of the downturn, is likely to remain negative, as the company pursues land acquisition and development. Finally, the rate of cash burn, if growth expectations are met, may leave Standard Pacific with very low cash balances in two years. The ratings could improve if the company were to maintain its profitability and solid liquidity, grow its tangible equity base, and reduce debt leverage to below 60%. Ratings pressure could ensue if the company were to deplete its cash reserves either through sharper-than-expected operating losses or through a sizable investment or other transaction without some offset such as an acceleration of earnings growth and improvement in net worth and debt leverage. The principal methodology used in rating Standard Pacific was the Global Homebuilding Industry Methodology published in March 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Irvine, California and begun in 1966, Standard Pacific Corp. constructs and sells single-family attached and detached homes focusing on the move-up market, which, together with a modest amount for the luxury market, represents about 73% of the company's overall product mix, with 27% represented by the entry level market. The company has homebuilding operations in California, Texas, Arizona, Colorado, Florida, North Carolina, and South Carolina, and serves 24 markets. Revenues and net income before declaration of preferred dividends for the LTM period ending June 30, 2012 were approximately $1.0 billion and $32 million, respectively. STELLAR GT TIC: The Georgian Remains Under Receiver's Care ---------------------------------------------------------- A receiver will continue to operate and manage The Georgian apartment complex in Silver Spring, Maryland, pursuant to a stipulation between its bankrupt owners, Stellar GT TIC LLC and VFF TIC LLC, and its lender, Wells Fargo Bank N.A. Wells Fargo is the Trustee for the registered holders of Deutsche Mortgage & Asset Receiving Corporation, COMM 2007-C9, Commercial Mortgage Pass-Through Certificates, U.S. Bank National Association, as Trustee, as successor in interest to Bank of America, National Association, as Trustee, as successor in interest to Wells Fargo Bank, N.A., as Trustee for the registered holders of Deutsche Mortgage & Asset Receiving Corporation, CD 2007-CD5 Commercial Mortgage Pass-Through Certificates, and FCP Georgian Towers, LLC, acting by and through Helios AMC, LLC, in its capacity as Special Servicer. Wells Fargo holds certain notes evidencing a mortgage loan guaranteed by the Debtors in the aggregate original principal amount of $185,000,000, secured by a certain Indemnity Deed of Trust, Security Agreement, Financing Statement, Fixture Filing and Assignment of Leases, Rents and Security Deposits dated Feb. 28, 2007. Wells Fargo on Dec. 30, 2009, commenced a receivership action in the Circuit Court for Montgomery County, Case No. 324928-V, seeking the appointment of a receiver for The Georgian, an 891- unit multi-family high rise property (consisting of two 14-story apartment buildings) located at 8750 Georgia Avenue in Silver Spring. By order dated Dec. 30, 2009, as extended by subsequent consent orders, the Circuit Court appointed Greystar Management Services, LP as Receiver, and authorized the Receiver to take any action necessary to preserve the Project and effectuate its orderly operation. On July 15, 2011, the Bankruptcy Court entered an Order temporarily modifying the automatic stay for the limited purposes of permitting (i) the Parties jointly and consensually to seek a further extension of the Receivership Order through Oct. 31, 2011, in the Receivership Action; and (ii) the Receiver to continue operating and managing the Project as directed and permitted by the Receivership Order, through Oct. 31, 2011. The Bankruptcy Court later entered orders extending the Lift Stay Order through Dec. 31, 2011, March 31, 2012 and June 30, 2012. The Receivership Order was set to expire by its own terms on July 31, 2012. Pursuant to the Stipulation and Order, the Parties agree to jointly and consensually seek a further extension of the Receivership Order through Oct. 31, 2012 in the Receivership Action. Bankruptcy Judge Paul Mannes signed off on the Stipulation and Order dated July 30, 2012, available at http://is.gd/XFWBK2from Leagle.com. About Stellar GT TIC and VFF TIC Stellar GT TIC LLC and VFF TIC LLC own an 891-unit multi-family high rise property, consisting of two 14-story apartment buildings, located at 8750 Georgia Avenue in Silver Spring, Maryland, commonly known as "The Georgian". FCP Georgian Towers holds certain notes evidencing a mortgage loan guaranteed by the Debtors in the aggregate original principal amount of $185,000,000. On Dec. 30, 2009, FCP commenced a receivership action in the Circuit Court for Montgomery County, Case No. 324928-V, seeking the appointment of a receiver for the Project. Stellar GT TIC and VFF TIC filed for Chapter 11 bankruptcy (Bankr. D. Md. Case Nos. 11-22977 and 11-22980) on June 22, 2011. Judge Paul Mannes presides over the case. Michelle Maloney-Raymond is the case administrator. Matthew G. Summers, Esq., and Michelle McGeogh, Esq., at Ballard Spahr LLP, in Baltimore, serve as the Debtors' counsel. Mark Taylor, Esq., at Kilpatrick Townsend & Stockton LLP, in Washington, DC; and Jantra Van Roy, Esq., at Zeichner Ellman & Krause LLP, in New York, represent the Lender. The U.S. Trustee for Region 4 was unable to appoint an unsecured creditors' committee in the case. The Debtors negotiated a plan of reorganization before filing for Chapter 11. The plan is premised on either (1) a sale of the project pursuant to an auction process or (2) a consensual restructuring of the secured debt. Broker CB Richard Ellis Inc. was hired to conduct the sale. On Nov. 22, 2011, Judge Mannes entered an order (I) finally approving the disclosure statement and (II) confirming Stellar GT TIC and VFF TIC's Joint Plan of Reorganization and authorizing (A) Sale of "The Georgian" free and clear of all liens, claims and interests and alternatively (B) restructuring pursuant to the Plan if the Sale does not close. The highest and best price offered at the Auction was the $193 million offer made by Lowe Enterprises Real Estate Group-East, Inc. In July 2012, the Court modified the Plan to deem Pantzer Properties Inc. as "purchaser" of the Debtors' assets. After the confirmation hearing, both the prevailing bidder, Lowe, and the second highest bidder, Berkshire Property Advisors LLC (offer at $173 million) failed to close on the purchase. Pantzer participated in the auction, but was out-bid by Lowe and Berkshire. Pantzer agreed, subject to due diligence and an appropriate sale order, to purchase the Project for $168 million. SUPERMEDIA INC: Reports $64 Million Net Income in Second Quarter ---------------------------------------------------------------- Supermedia Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $64 million on $349 million of operating revenue for the three months ended June 30, 2012, compared with net income of $29 million on $421 million of operating revenue for the same period during the prior year. The Company reported net income of $126 million on $712 million of operating revenue for the six months ended June 30, 2012, compared with net income of $59 million on $859 million of operating revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $1.49 billion in total assets, $1.98 billion in total liabilities and a $487 million total stockholders' deficit. "During the second quarter, we continued our disciplined approach to transforming and operating our business," said president and CEO Peter McDonald. "Operating improvements and efficiencies enabled us to reduce costs, while we completed the training of our premise marketing consultants to be trusted local advisers to small and medium-sized businesses by providing comprehensive solutions across digital and print media. "We also made further reductions in our debt obligations, and reduced certain post-employment benefit obligations." McDonald continued, "We are making progress in executing our initiatives across the board. Our cost reduction efforts are being reflected in our financial results. Changes in our approach to customers in creating stronger relationships take longer to appear in top line results due to our customer contact and revenue recognition cycles." A copy of the Form 10-Q is available for free at: http://is.gd/C90DwP About SuperMedia Inc. DFW Airport, Texas-based SuperMedia Inc. and its subsidiaries sells advertising solutions to its clients and places their advertising into its various advertising media. The Company's advertising media include Superpages yellow page directories, Superpages.com, its online local search resource, the Superpages.com network, an online advertising network, Superpages direct mailers, and Superpages mobile, its local search application for wireless subscribers. The Company is the official publisher of Verizon Communications Inc. print directories in the markets in which Verizon is currently the incumbent local telephone exchange carrier. The Company also has agreements with FairPoint Communications, Inc., and Frontier Communications Corporation in various Northeast and Midwest markets in which FairPoint and Frontier are the local exchange carriers. On March 31, 2009, SuperMedia Inc., formerly known as Idearc Inc., and all of its domestic subsidiaries filed voluntary petitions for Chapter 11 relief (Bankr. N.D. Tex. Lead Case No. 09-31828). On Sept. 8, 2009, the Company filed its First Amended Joint Plan of Reorganization with the Bankruptcy Court, which was later modified on Nov. 19, 2009, and on Dec. 22, 2009, the Bankruptcy Court entered an order approving and confirming the Amended Plan. On Dec. 31, 2009 (the "Effective Date"), the Debtors consummated the reorganization and emerged from the Chapter 11 bankruptcy proceedings. On Dec. 29, 2011, the Bankruptcy Court entered final decrees closing the bankruptcy cases for the Debtors. The Company reported a net loss of $771 million in 2011 and a net loss of $196 million in 2010. * * * As reported in the TCR on Dec. 27, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Dallas-based SuperMedia Inc. to 'CCC+' from 'SD' (selective default). The rating outlook is negative. In the April 2, 2012, edition of the TCR, Moody's Investors Service has changed the corporate family rating (CFR) for SuperMedia Inc. to Caa3 from Caa1 based on Moody's view that a debt restructuring is likely. Moody's expects ultimate recoveries will be about 50%. SuperMedia is attempting to reinvent its business by reducing its reliance on print advertising through the development of online and mobile directory service applications but Moody's has doubts that the company will be able to transition its business away from a reliance on print directories quickly enough to stabilize its revenues and earnings and prevent a debt restructuring. THORNBURG MORTGAGE: Objection to Case Trustee's Fees Bid Extended ----------------------------------------------------------------- In the lawsuit, Credit Suisse Securities (USA) LLC, as Collateral Agent v. TMST, Inc., et al., AP No. 09-00574 (DWK) (Bankr. D. Md. Aug. 28, 2009), the parties agreed that Joel I. Sher, the Chapter 11 Trustee of TMST, Inc., f/k/a Thornburg Mortgage, Inc., et al., would file a motion pursuant to 11 U.S.C. Sec. 506(c) for any costs and expenses that the Chapter 11 Trustee seeks to recover against property determined in the Adversary Proceeding to be the collateral of Credit Suisse Securities (USA) LLC, Credit Suisse International, UBS AG (as successor to UBS Securities, LLC), Citigroup Global Markets, Ltd., JPMorgan Chase Funding Inc. (as successor to Bear Stearns Investment Products Inc.), Royal Bank of Scotland plc, RBS Securities Inc. (f/k/a Greenwich Capital Markets, Inc.), and Greenwich Capital Derivatives. Credit Suisse Securities (USA) LLC initiated and prosecuted the Adversary Proceeding as Collateral Agent on behalf of the Counterparties. On May 31, 2012, the Chapter 11 Trustee filed the Motion Pursuant to Section 506(c). The deadline for the Collateral Agent and the Counterparties to file objections to the Motion was set for July 2, 2012. The objection deadline was later extended to July 16. The deadline was further moved to July 30. The parties to the Adversary Proceeding, as well as the Counterparties, have reached an agreement of the terms of a settlement of all litigation pending in the Adversary Proceeding, and are in the process of finalizing the documentation. Pursuant to the Proposed Settlement Agreement, the Collateral Agent, the Counterparties and the Trustee have agreed to a 60-day continuance of the July 30 deadline for filing objections to the Motion, to enable the parties to (i) present to the Court the Proposed Settlement Agreement; and (ii) resume negotiations related to the Motion, with goal of resolving either all or some portion of the Trustee's claims therein. The deadline for the Collateral Agent and the Counterparties to file objections to the Motion will be Sept. 28, 2012. A copy of the parties' Stipulation and Consent Order, signed by the Court on July 30, 2012, is available at http://is.gd/mrU4vO from Leagle.com. About Thornburg Mortgage Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- was a single- family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable rate mortgages. It originated, acquired, and retained investments in adjustable and variable rate mortgage assets. Its ARM assets comprised of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. Thornburg Mortgage and its four affiliates filed for Chapter 11 bankruptcy (Bankr. D. Md. Lead Case No. 09-17787) on May 1, 2009. Thornburg changed its name to TMST, Inc. Judge Duncan W. Keir is handling the case. David E. Rice, Esq., at Venable LLP, in Baltimore, Maryland, served as counsel to Thornburg Mortgage. Orrick, Herrington & Sutcliffe LLP served as special counsel. Jim Murray, and David Hilty, at Houlihan Lokey Howard & Zukin Capital, Inc., served as investment banker and financial advisor. Protiviti Inc. served as financial advisory services. KPMG LLP served as the tax consultant. Epiq Systems, Inc., serves claims and noticing agent. Thornburg disclosed total assets of $24.4 billion and total debts of $24.7 billion, as of Jan. 31, 2009. On Oct. 28, 2009, the Court approved the appointment of Joel I. Sher as the Chapter 11 Trustee for the Company, TMST Acquisition Subsidiary, Inc., TMST Home Loans, Inc., and TMST Hedging Strategies, Inc. He is represented by his firm, Shapiro Sher Guinot & Sandler. TXCO RESOURCES: Court Enters $15.9MM Judgment on Trade Secrets -------------------------------------------------------------- Cox Smith Matthews Incorporated disclosed Chief Bankruptcy Judge Ronald King of the United States Bankruptcy Court for the Western District of Texas has entered a $15.9 million judgment for Cox Smith client Reorganized TXCO Resources, Inc., in one of the earliest complex litigation matters arising out of the Eagle Ford development in South Texas. RTXCO is the successor entity to TXCO Resources, Inc. and affiliated entities, which was a publicly traded oil and gas exploration and production company that filed a voluntary Chapter 11 case on May 17, 2009. Cox Smith served as TXCO's counsel. Prior to confirmation of its bankruptcy plan, TXCO agreed to sell the majority of its oil and gas assets to two companies, including Newfield Exploration Company, headquartered in Houston, Texas. In February 2010, the plan became effective and RTXCO emerged from Chapter 11, with Newfield as the sole beneficiary of the RTXCO Liquidating Trust. In November 2009 and prior to its bankruptcy confirmation, TXCO filed suit against Peregrine Petroleum. TXCO alleged Peregrine Petroleum misappropriated trade secrets from TXCO in breach of the terms of a confidentiality agreement and used that information to acquire oil and gas leases in the Maverick Basin of South Texas. The trial, which took place in the U.S. Bankruptcy Court for the Western District of Texas (San Antonio Division) began May 31, 2011 and lasted until September 2011. Cox Smith shareholder James "Marty" Truss headed up the energy litigation trial team for RTXCO, assisted by Cox Smith bankruptcy shareholder Deborah Williamson and other Cox Smith attorneys. "This is a very significant result confirming a company's right to protect proprietary data from those engaged in 'data-mining' or other misappropriation of trade secrets," said Truss. "Confidentiality agreements are signed virtually every day as a matter of course in the oil and gas business. This judgment is a reminder to the industry that these agreements have teeth and may not be simply disregarded." "Marty Truss and the entire Cox Smith team were instrumental in this victory," said Albert Conly, senior managing director of FTI Consulting, president of RTXCO and trustee of the TXCO Liquidating Trust. "Marty's skill in the courtroom and his judgment and strategic insight were vitally important to us throughout this extremely long case, and Deborah Williamson's experience in bankruptcy litigation was a critical component of our success as well. The team's capability and tenacity enabled us to persevere and ultimately prevail. We are delighted with the outstanding result they achieved." The Cox Smith team was composed of attorneys from its energy, bankruptcy and litigation practice areas, including Marty Truss, Deborah Williamson, Meghan Bishop, David Vanderhider, Corey Wehmeyer, Ellen Mitchell and Thomas Rice. "The breadth and depth of our firm's legal resources permit us to pull in experienced attorneys from different practice areas to assist clients on complex matters like this one," said Jamie Smith, managing director of Cox Smith. "This was an extremely difficult and drawn-out matter, and while I am not surprised, I'm very proud of how seamlessly our diverse and talented team worked together to achieve this great result for our client. As the Eagle Ford continues to develop, we expect to see continued litigation on a variety of fronts, and this judgment confirms our ability to provide world-class services to energy-related clients on highly complex litigation and transactional matters arising out of the Eagle Ford shale play." About Cox Smith Cox Smith -- http://www.coxsmith.com/-- is one of the leading business law firms in Texas and the largest law firm headquartered in San Antonio. With a growing presence in key Texas markets including Austin, Dallas, El Paso and McAllen, Cox Smith's attorneys help regional, national and international businesses with a wide variety of matters involving all aspects of business law and litigation. About FTI Consulting FTI Consulting is a global business advisory firm dedicated to helping organizations protect and enhance their enterprise value by providing multidisciplinary solutions to complex challenges and opportunities through the power of unique depth of thought combined with the global expertise of leading professionals. About TXCO Resources TXCO Resources, Inc., was a publicly traded oil and gas exploration and production company based in San Antonio, Texas, which, along with its subsidiaries, filed a voluntary Chapter 11 case (Bankr. W.D. Tex. Case No. 09-51807) on May 17, 2009. Prior to confirmation, TXCO agreed to sell most of its oil and gas assets to Newfield Exploration Company and Anadarko E&P Company L.P. The sale was included in TXCO's Second Amended Plan of Reorganization. On Jan. 27, 2010, the Court entered an order confirming the Plan. On Feb. 11, 2010, the Plan became effective and Reorganized TXCO emerged from Chapter 11. All creditors were paid in full, including interest and attorney's fees, and equity holders received a distribution. The remaining oil and gas assets that were not transferred to Newfield or Anadarko were transferred to the TXCO Liquidating Trust. Newfield is the only shareholder of record in Reorganized TXCO and the sole beneficiary of the Liquidating Trust. U.S. POSTAL: Declines to Make $5.5-Bil. Prefunding for Retirees --------------------------------------------------------------- The U.S. Postal Service said July 30 it will not make mandated prefunding retiree health benefit payments to the Treasury of $5.5 billion due Aug. 1, 2012 or the $5.6 billion payment due Sept. 30, absent legislation enacted by Congress. This action will have no material effect on the operations of the Postal Service. "We will fully fund our operations, including our obligation to provide universal postal services to the American people. We will continue to deliver the mail, pay our employees and suppliers and meet our other financial obligations. Postal Service retirees and employees will also continue to receive their health benefits. Our customers can be confident in the continued regular operations of the Postal Service," the July 30 statement said. The Postal Service said it continues to implement its strategic plan. However, comprehensive postal legislation is needed to return the Postal Service to long-term financial stability. It remains hopeful that such legislation can be enacted during the current Congress. The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations. The Associated Press reported July 30 that the U.S. Postal Service is bracing for a first-ever default on billions in payments due to the Treasury, adding to widening uncertainty about the mail agency's solvency. According to the AP, Postal officials said they also are studying whether they may need to delay other obligations. In the coming months, a $1.5 billion payment is due to the Labor Department for workers compensation, which for now it expects to make, as well as millions in interest payments to the Treasury. The Postal Service estimates that it is now losing $25 million a day, which includes projected savings it had expected to be accruing by now if Congress had approved its five-year profitability plan this spring, the AP reported. That plan would cut Saturday delivery, reduce low-volume postal facilities and end its obligation to pay more than $5 billion each year for future retiree health payments. NRLCA Calls Congress for Changes The payment is part of a 10-year plan to fund the next 75 years of postal retiree health care benefits, a requirement no other government agency or private corporation in America must meet, according to the National Rural Letter Carriers' Association. NRLCA President Jeanette P. Dwyer said of the payments, "This unfair burden has drained postal resources and forced the Postal Service to propose unprecedented service cuts to all Americans. Congress should fix these payment issues so we can get back to the business of modernizing our network and offering competitive services to customers six days a week." Payments began after Congress passed into law the Postal Accountability and Enhancement Act of 2006. The Postal Service has said it also cannot afford an upcoming $5.6 billion payment due Sept. 30, 2012. It is doubtful the Postal Service will be able to make future payments as well. The NRLCA is an independent union whose members include 104,718 full- and part-time rural letter carriers. Rural carriers deliver mail on 73,461 routes, serving over 40 million customers and driving almost 3.5 million miles each delivery day in all 50 states, the US Virgin Islands and Puerto Rico. The average route is more than 47 miles long and serves 552 boxes. UNI-PIXEL INC: Incurs $2 Million Net Loss in Second Quarter ----------------------------------------------------------- Uni-Pixel, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $2.03 million on $70,560 of revenue for the three months ended June 30, 2012, compared with a net loss of $1.72 million on $137,978 of revenue for the same period during the prior year. The Company reported a net loss of $4.08 million on $74,124 of revenue for the six months ended June 30, 2012, compared with a net loss of $4.82 million on $189,566 of revenue for the same period a year ago. The Company reported a net loss of $8.57 million in 2011 compared to a net loss of $3.82 million in 2010. The Company's balance sheet at June 30, 2012, showed $5.60 million in total assets, $154,626 in total liabilities and $5.45 million in total shareholders' equity. "In Q2, we made strong progress towards global product launches of UniBoss and Diamond Guard," said UniPixel president and CEO, Reed Killion. "In collaboration with the Texas Instruments team to integrate TI's touch controllers with our UniBoss touch sensor films, we've produced functional prototypes that reaffirm our thoughts on the performance and cost benefits the UniBoss touch sensor brings to the touch sensor market, which Display Search estimates will reach $19 billion by 2017. We've also made progress on developing reference designs with several global controller manufacturers for UniBoss printed touch sensors. We have designs and prototype efforts at 10.1, 13.3, 15.6 and 23 inch diagonal form factors. "As we begin the second half of 2012, we are turning our focus toward developing our downstream supply chain to help meet the anticipated demand for UniBoss. We are seeking to license electro-less plating manufactures, as well as qualifying die- cutting and lamination partners, to support our touch sensor manufacturing process. We will keep our design, mastering and roll-to-roll flexible electronics manufacturing in-house for the foreseeable future." A copy of the Form 10-Q is available for free at: http://is.gd/p0DgWA About Uni-Pixel Inc. The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL) -- http://www.unipixel.com/-- is a production stage company delivering its Clearly Superior(TM) Performance Engineered Films to the Lighting & Display, Solar and Flexible Electronics market segments. VANN'S INC: CEO Seeks Financing for Possible Chapter 11 ------------------------------------------------------- nbcmontana.com reported July 27 that Vann's Inc., according to its CEO, could be headed for bankruptcy as soon as this week. "I think the ideal situation now is a restructuring, seeking protection under the bankruptcy code -- Chapter 11 --and kind of step back, look at some pieces of the business that are kind of hemorrhaging red ink, and we've got others that are profitable, so we just need to take our time and sort through those," said Vann's Chief Executive Officer Jerry McConnell. The company attempted and failed to secure financing with GE Capital and instead turned to local lenders. The company wanted financing in place for a bankruptcy filing by July 30. "We have a local lender we're working with that we think is going to do the whole package, the whole debtor-in-possession financing," Mr. McConnell said July 27. Vann's Inc. operates a home electronics & online appliance store. Founded in 1961, Vann's grew from a single store in Missoula to six stores across the state. The company, which specializes in electronics and appliances, has five retail stores in Montana and two Internet retail sites. It closed its Helena store earlier this year. VITESSE SEMICONDUCTOR: Raging Buys $4 Million Debenture ------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, William C. Martin, Raging Capital Management, LLC, Raging Capital Fund (QP), LP, Raging Capital Fund, LP, disclosed that, as of July 25, 2012, they beneficially own 3,226,627 shares of common stock of Vitesse Semiconductor Corporation representing 12.8% of the shares outstanding. The amount of shares does not include shares of Common Stock underlying 8.00% Convertible Second Lien Debentures due 2014. On July 25, 2012, Raging Capital Fund purchased $902,422 principal amount of the Debentures for $749,010 and Raging Capital Fund QP purchased $3,097,578 principal amount of the Debentures for $2,570,989. A copy of the amended filing is available for free at: http://is.gd/AcXCnM 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. WALL STREET SYSTEMS: S&P Alters 'B' Rating Outlook to Positive -------------------------------------------------------------- Standard & Poor's Ratings Services revised the rating outlook on New York City-based Wall Street Systems Holdings Inc. to positive from stable. "We also affirmed our 'B' corporate credit rating on the company," S&P said. "The outlook revision reflects Wall Street Systems' profitability improvement and de-leveraging over the past year, and our expectation that its focus on recurring revenues could improve revenue visibility," said Standard & Poor's credit analyst Christian Frank. "The rating reflects Wall Street Systems' 'weak' business risk profile resulting from its narrow market focus and its revenue exposure to the financial sector and Europe, as well as its 'aggressive' financial profile, with leverage in the low-5x area. Partial offsets to these factors are the company's solid base of recurring revenue, high customer retention rate, and good cash flow," S&P said. "Wall Street Systems' foreign exchange (FX) solutions provide trading, risk management, operations, and accounting capabilities for financial institutions, while its treasury management solutions allow multinational corporations and central banks to manage cash positions; FX, interest rate, and credit risk; and fixed income and equity investments. Since the LBO, the company has focused on increasing recurring revenue and removing excess capacity in its professional services organization," S&P said. "The positive outlook reflects Wall Street Systems' improved profitability and free cash flow generation since the LBO in June 2011. If the company can maintain its recent profitability gains while sustaining leverage at or below the low-5x area over the near term, we could raise the rating by one notch," S&P said. "Conversely, we could revise the outlook to stable if the company sustains adjusted leverage above the mid-5x area due to an aggressive financial policy (including leveraged dividends to shareholders or material debt-financed acquisitions), or EBITDA deterioration due to macroeconomic pressure among its European or financial services clients," S&P said. WINDSOR CAPITAL: Sends 8 Embassy Suites Hotels to Chapter 11 ------------------------------------------------------------ Windsor Capital Group Inc. CEO Patrick M. Nesbitt sent hotel- companies to Chapter 11 bankruptcy to stop a receiver named by U.S. Bank National Association from taking over eight Embassy Suites hotels. Nesbitt Portland Property, LLC, and seven affiliates filed bare- bones Chapter 11 petitions (Bankr. C.D. Calif. Lead Case No. 12-12883) on July 31, in Santa Barbara, California. Nesbitt Portland estimated assets of up to $50 million and liabilities of less than $500 million. According to http://www.wcghotels.com/Santa Monica-based Windsor Capital owns and/or operates 23 branded hotels in 11 states across the U.S. Windsor Capital is the largest private owner and operator of Embassy Suites hotels. Documents from Justia.com say that in May, U.S. Bank successfully obtained a district court ruling appointing a receiver of eight hotels in six states that were pledged by the Debtors as collateral for loans. In April 2012, Windsor received letters from the licensor with regard to each of the Hotels, explaining that each of the Hotels was in default of the license agreement "as a result of its failure to comply with required Embassy Suites brand and product quality standards." Windsor needed $4.4 million to pay for the improvements necessary to avoid the imminent loss of the Embassy Suites franchise. However, U.S. Bank declined to provide additional financing to the Debtors, which are already in arrears to their loan obligations. In the case U.S. Bank vs. Nesbitt Bellevue Property LLC, et al. (S.D.N.Y. 12 Civ. 423), U.S. Bank obtained approval from the district judge in June to name Alan Tantleff -- alan.tantleff@fticonsulting.com -- of FTI Consulting, Inc., as receiver for: * Embassy Suites Colorado Springs in Colorado; * Embassy Suites Denver Southeast in Colorado; * Embassy Suites Cincinnati - Northeast in Blue Ash, Ohio; * Embassy Suites Portland - Washington Square in Tigard, Oregon; * Embassy Suites Detroit - Livornia/Novi in Michigan; * Embassy Suites El Paso in Texas; * Embassy Suites Seattle - North/Lynwood in Washington; and * Embassy Suites Seattle - Bellevue in Washington The receiver obtained district court permission to engage Crescent Hotels and Resorts LLC to manage the eight hotels. But before Mr. Adam could take physical possession of the properties and take control of the Hotels, the eight borrowers filed chapter 11 petitions, Nicole Madison of FTI confirmed to the Troubled Company Reporter. The Debtors are represented in the Chapter 11 case by attorneys at Susi & Gura. Attorneys at Kilpatrick Townsend & Stockton LLP represented the Debtors in the receivership case. According to the bankruptcy case docket, the schedules of assets and liabilities and the statements of financial affairs are due Aug. 14, 2012. WPCS INTERNATIONAL: J.H. Cohn Raises Going Concern Doubt -------------------------------------------------------- WPCS International Incorporated filed on July 30, 2012, its annual report on Form 10-K for the fiscal year ended April 30, 2012. J.H. COHN LLP, in Eatontown, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended April 30, 2012. The independent auditors noted that the Company is in default of certain covenants of its credit agreement and has incurred operating losses, negative cash flows from operating activities and has a working capital deficiency as of April 30, 2012. These matters raise substantial doubt about the Company's ability to continue as a going concern. According to the regulatory filing, due to the operating losses for the quarters ended Jan. 31, 2012, and April 30, 2012, the Company did not meet the Fixed Charge Coverage Ratio of 1.2 to 1.0 when first required to be measured for the two quarters ended April 30, 2012, and Leverage Ratio of not more than 1.75 to 1.0 at April 30, 2012, and the Company is currently in default under the Credit Agreement. The Company reported a net loss of $20.57 million on $92.42 million of revenue for fiscal 2012, compared with a net loss of $37.00 million on $84.09 million of revenue for fiscal 2011. The Company's balance sheet at April 30, 2012, showed $35.79 million in total assets, $29.91 million in total liabilities, and stockholders' equity of $5.88 million. Andrew Hidalgo, CEO of WPCS, commented, "I am pleased to mention that for the year ended April 30, 2012, excluding the Trenton Operations the remaining operations centers have generated an EBITDA profit of $3.0 million compared to a loss of $3.0 million during the same period a year ago. This represents a significant improvement. The last two fiscal years have been challenging due to the economic conditions and certain projects that experienced substantial cost overruns, however, we believe our future quarters look promising. The management team is working to strengthen the balance sheet and income statement so that we can target positive revenue and EBITDA results in fiscal 2013. In this regard, we completed the $5.5 million asset sales of our Hartford and Lakewood Operations, with the proceeds used to extinguish bank debt and for future working capital. Our bid activity of $87 million remains high at the end of our fourth quarter. Our commitment to quality workmanship and our special certifications in design-build engineering continue to give us a competitive advantage during this economic recovery. As evidenced in the press releases announcing new contracts, customers continue to seek bids from WPCS because of our outstanding reputation. At the end of the fourth quarter, WPCS continues to maintain a backlog of $23.6 million comprised of a variety of projects in the public services, healthcare and energy sectors. Our goal in the next few quarters is to convert more of our bids into backlog. The conversion of these bids to backlog and the effective management of projects through completion will give us the opportunity to increase our EBITDA performance and get back to positive earnings per share results in the future. Our financial performance will be generated by the three domestic operations centers in Seattle, Suisun City, and Trenton, as well as the international operations in Australia and China. We are reiterating our guidance for the fiscal year ending April 30, 2013 of approximately $60 million in revenue and $1 million in EBITDA." A copy of the Form 10-K is available for free at: http://is.gd/QuLIQ6 About WPCS International Exton, Pennsylvania-based WPCS International Incorporated provides design-build engineering services that focus on the implementation requirements of communications infrastructure. The Company provides its engineering capabilities including wireless communication, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. As reported by the TCR on Dec. 8, 2011, WPCS International and its United Stated based subsidiaries, previously entered into a loan agreement, dated April 10, 2007, as extended, modified and amended several times, with Bank of America, N.A. The Company is seeking alternative debt financing and has conducted discussions with other senior lenders to replace the Loan Agreement. The Company may not be successful in obtaining alternative debt financing or additional financing sources may not be available on acceptable terms. If the Company is required to repay the Loan Agreement, the Company has sufficient working capital to repay the outstanding borrowings. WOUND MANAGEMENT: Amends Forbearance Agreement with Juventas ------------------------------------------------------------ In connection with a settlement agreement entered into with Juventas, LLC, Wound Management Technologies, Inc., Wound Care Innovations, L.L.C., and certain of their affiliates issued to Juventas a Secured Promissory Note, dated as of March 20, 2012, in the principal amount of $930,000. The Company Parties also entered into a security agreement with Juventas pursuant to which the 2012 Note was secured by all inventory of the Company Parties and all other assets of the Company Parties. On June 26, 2012, the Company, along with the other Company Parties, received notice from Juventas that -- pursuant to Juventas's rights under the Security Agreement and as the result of the Company Parties' default under the 2012 Note for a failure to make payments due thereunder as of May 21, 2012 -- Juventas would be exercising its right to (i) take immediate and exclusive possession of the Collateral and (ii) sell, lease, or license the Collateral in order to satisfy unpaid obligations under the 2012 Note. On July 13, 2012, Juventas and the Company Parties entered into a forbearance agreement pursuant to which Juventas agreed to suspend efforts to execute on the Collateral while the Company completes a debt offering, the proceeds of which are being used to repay amounts owed under the 2012 Note. The Forbearance Agreement provided for a forbearance period terminating upon the earlier of Sept. 13, 2012, or the occurrence of one or more default events. On July 13, 2012, the Company delivered an initial payment of $465,000 to Juventas. On July 25, 2012, Juventas and the Company Parties entered into an Amendment to Forebearance Agreement pursuant to which (i) the Company delivered an additional payment of $415,000, and (ii) Juventas agreed to forgive all remaining principal, interest or other amounts remaining unpaid under the 2012 Note. A copy of the Amended Forbearance is available at: http://is.gd/VcIITM About Wound Management Fort Worth, Texas-based Wound Management Technologies, Inc., markets and sells the patented CellerateRX(R) product in the expanding advanced wound care market; particularly with respect to diabetic wound applications. The Company's balance sheet at March 31, 2012, showed $3.27 million in total assets, $6.90 million in total liabilities, and a stockholders' deficit of $3.63 million. Pritchett, Siler & Hardy, P.C., in Salt Lake City, Utah, expressed substantial doubt about Wound Management's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred substantial losses and has a working capital deficit. * Moody's Says Fewer States to Issue Cash Flow Notes ---------------------------------------------------- The number of state governments that issue short-term cash flow notes will decline in fiscal 2013 to eight from 10 in fiscal 2012 as state revenues improve, says Moody's Investors Service in the report "As Revenues Improve, the Number of States That Issue Cash Flow Notes Declines." Although the number of states that issue notes will decline, according to the rating agency, the aggregate amount of note issuance will increase as California and Texas continue to dominate issuance. "State cash flow margins have improved, reducing the need for most states to borrow for short-term liquidity needs as revenues grow even amid an unusually slow economic recovery," said Moody's Senior Vice President Nicole Johnson. "Projected state budget deficits have narrowed considerably over the past three years, due to spending reductions and gradually improving revenue trends." California and Texas will remain the dominant cash flow note issuers, even as the economy improves and other states reduce their short-term borrowings. Moody's expects California to borrow at least $10 billion in cash flow notes in fiscal 2013, up from $6.4 billion in fiscal 2012. The rating agency expects Texas' fiscal 2013 note issuance to decline by 4.9% to $9.8 billion from $10.3 billion in fiscal 2012, which had been a record amount. Texas uses short-term borrowings even during stable economic times because it heavily front loads its school aid payments from September through November, the first three months of the fiscal year, when revenue collections are weakest. "States use short-term borrowing as tools to manage the cash flow mismatch between revenues and expenditures," said Johnson. "Large revenue streams are usually cyclical while expenditures are generally more evenly distributed, leading to these mismatches." * CFPB and DOE Issue Report on Student Loans and Bankruptcy ----------------------------------------------------------- Michael Bathon, substituting for Bloomberg bankruptcy columnist Bill Rochelle, reports that the Consumer Financial Protection Bureau and the U.S. Department of Education came out with a new report taking aim at the $150 billion private student loan industry, saying it paralleled the reckless lending that characterized the subprime housing bubble. The report's most controversial suggestion was that Congress reconsider the 2005 law that excluded student loans from bankruptcy. Congress had intended the law to promote more lending and lower interest rates, but the report says it didn't find strong evidence that those things actually happened, Bloomberg BusinessWeek reported July 27. * Creditors May Take Loss in Clearinghouse Failure -------------------------------------------------- Michael Bathon at Bloomberg News reports that global regulators said creditors of derivatives clearinghouses should take losses in the event of a collapse, rather than exhausting the institution's default funds and plunge it into liquidation. It may be "preferable to haircut the creditor's claims" even when there are reserves to fulfill them so that the payments infrastructure can continue to function, limiting the chance of a systemic collapse, the Committee on Payment and Settlement Systems and the International Organization of Securities Commissions said in a report published July 31, according to the Bloomberg report. The proposals are part of a global overhaul of rules governing derivatives contracts, encouraging banks and hedge funds to use central counterparties and spread the risk of default. Global regulators have sought tougher rules for over-the-counter derivatives since the collapse in 2008 of Lehman Brothers Holdings Inc. and the rescue of American International Group Inc., two of the largest traders of credit-default swaps. "The vital role of the financial system's infrastructure makes it essential that credible recovery plans and resolution regimes exist," Paul Tucker, deputy governor for financial stability at the Bank of England said in the statement. Clearinghouses "need to be a source of strength and continuity for the financial markets they serve." Madrid-based IOSCO brings together national market regulators from more than 100 countries to coordinate rules and share information. The CPSS, which is part of the Basel, Switzerland-based Bank of International Settlements, is made up of central bankers from developed and emerging economies and sets standards for payment, clearing and settlement systems. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Oliver Wright Bankr. W.D. Ark. Case No. 12-72840 Chapter 11 Petition filed July 24, 2012 In re Holly Fredensburg Bankr. C.D. Calif. Case No. 12-18903 Chapter 11 Petition filed July 24, 2012 In re Tumi Properties LLC Bankr. C.D. Calif. Case No. 12-27260 Chapter 11 Petition filed July 24, 2012 See http://bankrupt.com/misc/cacb12-27260.pdf represented by: Fred S. Pardes, Esq. LAW OFFICES OF FRED S. PARDES APC E-mail: paralegal@fredpardes.com In re Kurtis Sandhoff Bankr. E.D. Calif. Case No. 12-33592 Chapter 11 Petition filed July 24, 2012 In re Sean Taghani Bankr. N.D. Calif. Case No. 12-55478 Chapter 11 Petition filed July 24, 2012 In re Aircraft Welding & Manufacturing Company, LLC Bankr. D. Conn. Case No. 12-21784 Chapter 11 Petition filed July 24, 2012 See http://bankrupt.com/misc/ctb12-21784.pdf represented by: Jeffrey M. Sklarz, Esq. CONVICER, PERCY & GREEN, LLP E-mail: jsklarz@convicerpercy.com In re Elvis Cabello Bankr. D. Conn. Case No. 12-51384 Chapter 11 Petition filed July 24, 2012 In re Saffran, LLC Bankr. M.D. Fla. Case No. 12-10057 Chapter 11 Petition filed July 24, 2012 See http://bankrupt.com/misc/flmb12-10057.pdf represented by: Lawrence M. Kosto, Esq. KOSTO & ROTELLA, P.A. E-mail: lkosto@kostoandrotella.com In re Mora Enterprises, LLC Bankr. N.D. Ga. Case No. 12-68343 Chapter 11 Petition filed July 24, 2012 See http://bankrupt.com/misc/ganb12-68343.pdf represented by: Edward F. Danowitz, Jr., Esq. DANOWITZ & ASSOCIATES, P.C. E-mail: edanowitz@danowitzlegal.com In re Jeffrey Warren Bankr. S.D. Ga. Case No. 12-20816 Chapter 11 Petition filed July 24, 2012 In re Tucker Inc. Bankr. N.D. Ill. Case No. 12-29222 Chapter 11 Petition filed July 24, 2012 See http://bankrupt.com/misc/ilnb12-29222.pdf represented by: Joseph E. Cohen, Esq. COHEN & KROL E-mail: jcohen@cohenandkrol.com In re Corbin Bingo Parlor, LLC Bankr. E.D. Ky. Case No. 12-60894 Chapter 11 Petition filed July 24, 2012 See http://bankrupt.com/misc/kyeb12-60894.pdf represented by: David M. Cantor, Esq. SEILLER WATERMAN LLC E-mail: cantor@derbycitylaw.com In re James "Jay" Williams Bankr. E.D. La. Case No. 12-12188 Chapter 11 Petition filed July 24, 2012 In re L.I.C. Associates, Inc. dba Lambert's R.B.D.'s Bankr. M.D. La. Case No. 12-11081 Chapter 11 Petition filed July 24, 2012 See http://bankrupt.com/misc/lamb12-11081p.pdf See http://bankrupt.com/misc/lamb12-11081c.pdf represented by: Brandon A. Brown, Esq. STEWART ROBBINS & BROWN, LLC E-mail: bbrown@stewartrobbins.com In re Mallards Holdings, Inc. Bankr. E.D. Mich. Case No. 12-57144 Chapter 11 Petition filed July 24, 2012 See http://bankrupt.com/misc/mieb12-57144.pdf represented by: Robert N. Bassel, Esq. E-mail: bbassel@gmail.com In re Mallard Land Holdings, LLC Bankr. E.D. Mich. Case No. 12-57145 Chapter 11 Petition filed July 24, 2012 See http://bankrupt.com/misc/mieb12-57145.pdf represented by: Robert N. Bassel, Esq. E-mail: bbassel@gmail.com In re Lanphear Tool Works, Inc. Bankr. W.D. Mich. Case No. 12-06794 Chapter 11 Petition filed July 24, 2012 See http://bankrupt.com/misc/miwb12-06794p.pdf See http://bankrupt.com/misc/miwb12-06794c.pdf represented by: Robert J. Sayfie, Esq. ROBERT J. SAYFIE, P.C. E-mail: robert@sayfie.com In re Paul Capito Bankr. M.D.N.C. Case No. 12-51041 Chapter 11 Petition filed July 24, 2012 In re Ron Barshop Bankr. W.D. Tex. Case No. 12-52239 Chapter 11 Petition filed July 24, 2012 In re Uwanta Linen Supply, Inc. Bankr. N.D. W.Va. Case No. 12-01013 Chapter 11 Petition filed July 24, 2012 See http://bankrupt.com/misc/wvnb12-01013.pdf represented by: Martin P. Sheehan, Esq. SHEEHAN & NUGENT, PLLC E-mail: sheehanparalegal@wvdsl.net In re Arnold Su Bankr. C.D. Calif. Case No. 12-27392 Chapter 11 Petition filed July 25, 2012 In re Edward Fuller Bankr. C.D. Calif. Case No. 12-12800 Chapter 11 Petition filed July 25, 2012 In re Reynol Garcia Bankr. E.D. Calif. Case No. 12-92036 Chapter 11 Petition filed July 25, 2012 In re Mother Earth's Alternative Healing Cooperative, Inc. aka Mother Earth Bankr. S.D. Calif. Case No. 12-10223 Chapter 11 Petition filed July 25, 2012 See http://bankrupt.com/misc/casb12-10223.pdf represented by: David L. Speckman, Esq. Speckman & Associates E-mail: speckmanandassociates@gmail.com In re Donald DeBey Bankr. D. Colo. Case No. 12-25497 Chapter 11 Petition filed July 25, 2012 In re Rams Horn Development, LLC Bankr. D. Colo. Case No. 12-25496 Chapter 11 Petition filed July 25, 2012 See http://bankrupt.com/misc/cob12-25496p.pdf See http://bankrupt.com/misc/cob12-25496c.pdf represented by: Jeffrey S. Brinen, Esq. Kutner Miller Brinen, P.C. E-mail: jsb@kutnerlaw.com In re Island Bound Restaurants, LLC dba Hurricane Patty's at Flagler Beach Bankr. M.D. Fla. Case No. 12-04830 Chapter 11 Petition filed July 25, 2012 See http://bankrupt.com/misc/flmb12-04830.pdf represented by: Brett A. Mearkle, Esq. Law Office of Brett A. Mearkle E-mail: bmearkle@mearklelaw.com In re Yaodi Hu Bankr. W.D. Mich. Case No. 12-06821 Chapter 11 Petition filed July 25, 2012 In re Kevin Meyer Bankr. D. Nebr. Case No. 12-81632 Chapter 11 Petition filed July 25, 2012 In re Antoine Ibrahim Bankr. E.D.N.C. Case No. 12-05369 Chapter 11 Petition filed July 25, 2012 In re Elliott Wislar Bankr. D.N.J. Case No. 12-28430 Chapter 11 Petition filed July 25, 2012 In re Gurus I.T. Services, LLC Bankr. D.N.J. Case No. 12-28425 Chapter 11 Petition filed July 25, 2012 See http://bankrupt.com/misc/njb12-28425.pdf represented by: Robert C. Nisenson, Esq. Robert C. Nisenson, LLC E-mail: rnisenson@aol.com In re Margate Bachi, LLC Bankr. D.N.J. Case No. 12-28442 Chapter 11 Petition filed July 25, 2012 See http://bankrupt.com/misc/njb12-28442.pdf represented by: Ronald Kinzler, Esq. E-mail: kinzlex@aol.com In re NKL Enterprises, LLC Bankr. E.D.N.Y. Case No. 12-74599 Chapter 11 Petition filed July 25, 2012 See http://bankrupt.com/misc/nyeb12-74599.pdf Filed pro se In re Oscar C. Gido, DDS, P.C. Bankr. E.D. Pa. Case No. 12-17010 Chapter 11 Petition filed July 25, 2012 See http://bankrupt.com/misc/paeb12-17010p.pdf See http://bankrupt.com/misc/paeb12-17010c.pdf represented by: John R.K. Solt, Esq. John R.K. Solt, P.C. E-mail: jrksolt@verizon.net In re 222 Riverside Corp. Bankr. D.S.C. Case No. 12-04532 Chapter 11 Petition filed July 25, 2012 See http://bankrupt.com/misc/scb12-04532.pdf represented by: Robert A. Pohl, Esq. POHL, P.A. E-mail: robert@pohlpa.com In re Margaret Barnes Bankr. E.D. Va. Case No. 12-14573 Chapter 11 Petition filed July 25, 2012 In re Deupree's Gas, Inc. dba Deupree's of Sylacauga, Inc. Bankr. N.D. Ala. Case No. 12-41400 Chapter 11 Petition filed July 26, 2012 See http://bankrupt.com/misc/alnb12-41400p.pdf See http://bankrupt.com/misc/alnb12-41400c.pdf represented by: Frederick Mott Garfield, Esq. SPAIN & GILLON, LLC E-mail: fmg@spain-gillon.com In re Claudia Jones Bankr. C.D. Calif. Case No. 12-16742 Chapter 11 Petition filed July 26, 2012 In re Reltub, LLC aka Larry L. Butler, Manager Bankr. N.D. Calif. Case No. 12-46221 Chapter 11 Petition filed July 26, 2012 See http://bankrupt.com/misc/canb12-46221.pdf Filed as Pro Se In re Dana Cabello Bankr. N.D. Calif. Case No. 12-46224 Chapter 11 Petition filed July 26, 2012 In re Stephen Stewart Bankr. N.D. Calif. Case No. 12-55550 Chapter 11 Petition filed July 26, 2012 In re Maria Plandor Bankr. S.D. Calif. Case No. 12-10342 Chapter 11 Petition filed July 26, 2012 In re Big J's Auto Sales, Inc. Bankr. M.D. Fla. Case No. 12-10092 Chapter 11 Petition filed July 26, 2012 See http://bankrupt.com/misc/flmb12-10092.pdf Filed as Pro Se In re Odyssey Development, LLC Bankr. M.D. Fla. Case No. 12-11384 Chapter 11 Petition filed July 26, 2012 See http://bankrupt.com/misc/flmb12-11384.pdf represented by: Michael C. Markham, Esq. JOHNSON POPE BOKOR RUPPEL & BURNS LLP E-mail: mikem@jpfirm.com In re Verocity Investments LLC Bankr. C.D. Ill. Case No. 12-81714 Chapter 11 Petition filed July 26, 2012 See http://bankrupt.com/misc/ilcb12-81714.pdf represented by: Philip E. Koenig, Esq. E-mail: marcial@koeniglawfirm.com In re Burhani Industries, Inc. Bankr. N.D. Ill. Case No. 12-29472 Chapter 11 Petition filed July 26, 2012 See http://bankrupt.com/misc/ilnb12-29472.pdf represented by: Daniel L. Giudice, Esq. GIUDICE LAW, LTD. E-mail: giudicelaw@gmail.com In re Aniko Insurance Agency, Inc. Bankr. D. Mass. Case No. 12-16225 Chapter 11 Petition filed July 26, 2012 See http://bankrupt.com/misc/mab12-16225.pdf represented by: Timothy M. Mauser LAW OFFICE OF TIMOTHY MAUSER, ESQ. E-mail: tmauser@mauserlaw.com In re Supope, LLC Bankr. W.D. Mich. Case No. 12-06863 Chapter 11 Petition filed July 26, 2012 See http://bankrupt.com/misc/miwb12-06863.pdf represented by: Steven L. Rayman, Esq. RAYMAN & KNIGHT E-mail: courtmail@raymanstone.com In re Star EMS Bankr. S.D. Tex. Case No. 12-70427 Chapter 11 Petition filed July 26, 2012 See http://bankrupt.com/misc/txsb12-70427.pdf represented by: Jose Luis Flores, Esq. LAW OFFICE OF JOSE LUIS FLORES E-mail: bklaw@jlfloreslawfirm.com In re Martin Rutherford Bankr. D. Nev. Case No. 12-51748 Chapter 11 Petition filed July 26, 2012 In re Todd Riddick Bankr. D. N.J. Case No. 12-28540 Chapter 11 Petition filed July 26, 2012 In re Robert Meadows Bankr. M.D. Tenn. Case No. 12-06825 Chapter 11 Petition filed July 26, 2012 In re Woodrow Clayton, Sr. Bankr. S.D. Tex. Case No. 12-35507 Chapter 11 Petition filed July 26, 2012 In re Swadesh Foods LLC Bankr. E.D. Va. Case No. 12-14581 Chapter 11 Petition filed July 26, 2012 See http://bankrupt.com/misc/vaeb12-14581.pdf Filed as Pro Se In re Lane Scelzi Bankr. W.D. Wash. Case No. 12-28540 Chapter 11 Petition filed July 26, 2012 In re Michael Varick Bankr. W.D. Wash. Case No. 12-45207 Chapter 11 Petition filed July 26, 2012 In re Annary Cheatham Bankr. N.D. Ala. Case No. 12-82397 Chapter 11 Petition filed July 27, 2012 In re J. Sanford Bankr. C.D. Calif. Case No. 12-12836 Chapter 11 Petition filed July 27, 2012 In re Drugstore Cafe, Inc. Bankr. C.D. Calif. Case No. 12-35823 Chapter 11 Petition filed July 27, 2012 See http://bankrupt.com/misc/cacb12-35823.pdf represented by: Simon Aron, Esq. WOLF, RIFKIN, SHAPIRO & SCHULMAN LLP E-mail: saron@wrslawyers.com In re Phillip Ramirez Bankr. C.D. Calif. Case No. 12-35939 Chapter 11 Petition filed July 27, 2012 In re Bio Food Safety, Inc. Bankr. D. Colo. Case No. 12-25763 Chapter 11 Petition filed July 27, 2012 See http://bankrupt.com/misc/cob12-25763.pdf represented by: Joli A. Lofstedt, Esq. CONNOLLY, ROSANIA & LOFSTEDT, P.C. E-mail: joli@crlpc.com In re Jose Sarabia Martinez Bankr. D. Colo. Case No. 12-25768 Chapter 11 Petition filed July 27, 2012 In re Vitaliy Stepanchuk Bankr. M.D. Fla. Case No. 12-04892 Chapter 11 Petition filed July 27, 2012 In re Larry Rule Bankr. S.D. Fla. Case No. 12-28079 Chapter 11 Petition filed July 27, 2012 In re Bernard Brown Bankr. N.D. Ga. Case No. 12-42246 Chapter 11 Petition filed July 27, 2012 In re Louis Lengacher Bankr. N.D. Ind. Case No. 12-12512 Chapter 11 Petition filed July 27, 2012 In re Marek Haczkiewicz Bankr. D. Nev. Case No. 12-18796 Chapter 11 Petition filed July 27, 2012 In re Ready To Close LLC Bankr. E.D.N.Y. Case No. 12-45409 Chapter 11 Petition filed July 26, 2012 See http://bankrupt.com/misc/nyeb12-45409.pdf Filed as Pro Se In re Ronan O'Neill Bankr. S.D.N.Y. Case No. 12-36914 Chapter 11 Petition filed July 27, 2012 In re Wallace Road, LLC Bankr. W.D.N.C. Case No. 12-31811 Chapter 11 Petition filed July 27, 2012 See http://bankrupt.com/misc/ncwb12-31811.pdf represented by: William S. Gardner, Esq. GARDNER LAW OFFICES, PLLC E-mail: Billgardner@gardnerlawoffices.com In re Preferred Drilling Co., LLC fka Direct Drilling Co., LLC Bankr. N.D. Ohio Case No. 12-15510 Chapter 11 Petition filed July 27, 2012 See http://bankrupt.com/misc/ohnb12-15510.pdf represented by: Frederic P Schwieg E-mail: fschwieg@schwieglaw.com In re John Lyons Bankr. N.D. Ohio Case No. 12-41843 Chapter 11 Petition filed July 27, 2012 In re Vapis Corporation dba TCBY Bankr. S.D. Tex. Case No. 12-35524 Chapter 11 Petition filed July 27, 2012 See http://bankrupt.com/misc/txsb12-35524.pdf represented by: Donald L Wyatt WYATT GRACEY, PC E-mail: don.wyatt@wyatt-gracey.com In re AKA Partners, Inc. Bankr. S.D. Tex. Case No. 12-35525 Chapter 11 Petition filed July 27, 2012 See http://bankrupt.com/misc/txsb12-35525.pdf represented by: Samuel L. Milledge, Esq. MILLEDGE LAW FIRM, P.C. E-mail: milledge@milledgelawfirm.com In re South County Plumbing Inc. Bankr. W.D. Wash. Case No. 12-17791 Chapter 11 Petition filed July 27, 2012 Filed as Pro Se In re Little Joe Trucking, Inc. Bankr. S.D. W. Va. Case No. 12-20492 Chapter 11 Petition filed July 27, 2012 See http://bankrupt.com/misc/wvsb12-20492.pdf represented by: Joseph W. Caldwell, Esq. CALDWELL & RIFFEE E-mail: joecaldwell@frontier.com - and ? Marshall C. Spradling, Esq. E-mail: marshall@spradlinglaw.net In re Grace Child Development Center, Inc. Bankr. D. Md. Case No. 12-23928 Chapter 11 Petition filed July 29, 2012 See http://bankrupt.com/misc/mdb12-23928.pdf represented by: Charles C. Iweanoge, Esq. The Iweanoges' Firm, PC E-mail: cci@iweanogesfirm.com In re Jeremy McClain Bankr. S.D. Ala. Case No. 12-02608 Chapter 11 Petition filed July 30, 2012 In re William Beddie Bankr. E.D. Calif. Case No. 12-33885 Chapter 11 Petition filed July 30, 2012 In re Wilfredo Miclat Bankr. N.D. Calif. Case No. 12-46314 Chapter 11 Petition filed July 30, 2012 In re Bryan Maltby Bankr. S.D. Calif. Case No. 12-10483 Chapter 11 Petition filed July 30, 2012 In re James Rogers Bankr. N.D. Fla. Case No. 12-40499 Chapter 11 Petition filed July 30, 2012 In re Michael Rule Bankr. N.D. Ill. Case No. 12-30175 Chapter 11 Petition filed July 30, 2012 In re Sams Holdings, LLC Bankr. W.D. Ky. Case No. 12-11048 Chapter 11 Petition filed July 30, 2012 See http://bankrupt.com/misc/kywb12-11048.pdf represented by: Mark H. Flener, Esq. E-mail: mark@flenerlaw.com In re Brett Davis Bankr. D. Maine Case No. 12-10889 Chapter 11 Petition filed July 30, 2012 In re Douglas Roe Bankr. E.D. Mich. Case No. 12-57538 Chapter 11 Petition filed July 30, 2012 In re Richard Roe Bankr. E.D. Mich. Case No. 12-57537 Chapter 11 Petition filed July 30, 2012 In re Roe Brothers, Inc. Bankr. E.D. Mich. Case No. 12-57536 Chapter 11 Petition filed July 30, 2012 See http://bankrupt.com/misc/mieb12-57536p.pdf See http://bankrupt.com/misc/mieb12-57536c.pdf represented by: Donald C. Darnell, Esq. Darnell Law Offices E-mail: dondarnell@darnell-law.com In re Harry Stovall Bankr. E.D.N.C. Case No. 12-05477 Chapter 11 Petition filed July 30, 2012 In re Thomas Ormond Bankr. E.D.N.C. Case No. 12-05477 Chapter 11 Petition filed July 30, 2012 In re 35 Orange Street, LLC Bankr. D.N.H. Case No. 12-12422 Chapter 11 Petition filed July 30, 2012 See http://bankrupt.com/misc/nhb12-12422.pdf represented by: Robert L. O'Brien, Esq. O'Brien Law E-mail: roboecf@gmail.com In re Arbesa Rest. Corp. dba Nino's Tuscany Steakhouse Bankr. S.D.N.Y. Case No. 12-13259 Chapter 11 Petition filed July 30, 2012 See http://bankrupt.com/misc/nysb12-13259.pdf represented by: Salvatore J. Liga, Esq. The Liga Law Group, P.C. E-mail: sliga@ligalaw.com In re Pietro Mellampe Bankr. S.D.N.Y. Case No. 12-13258 Chapter 11 Petition filed July 30, 2012 In re Blue River Canyon, Inc. dba Blue River Canyon Day Spa & Store Bankr. M.D. Tenn. Case No. 12-06936 Chapter 11 Petition filed July 30, 2012 See http://bankrupt.com/misc/tnmb12-06936.pdf represented by: Steven L. Lefkovitz, Esq. Law Offices Lefkovitz & Lefkovitz E-mail: slefkovitz@lefkovitz.com In re Stafford EMS, Inc. Bankr. S.D. W.Va. Case No. 12-20499 Chapter 11 Petition filed July 30, 2012 See http://bankrupt.com/misc/wvsb12-20499.pdf represented by: Joseph W. Caldwell, Esq. Caldwell & Riffee E-mail: joecaldwell@frontier.com In re Jan Schmalenberg Bankr. W.D. Wash. Case No. 12-45274 Chapter 11 Petition filed July 30, 2012 In re Scott Breunig Bankr. W.D. Wis. Case No. 12-14327 Chapter 11 Petition filed July 30, 2012 ********* 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 ***