/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120822.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, August 22, 2012, Vol. 16, No. 233 Headlines 1717 MARKET: Sec. 341 Creditors' Meeting Set for Sept. 5 2279-2283 THIRD: Files Schedules of Assets and Liabilities ACCO BRANDS: Moody's Affirms 'Ba3' CFR; Outlook Negative ADAMSON APPAREL: Committee Loses Bid to Recoup $4-Mil. ADVANCED MOLECULAR: Case Summary & Largest Unsecured Creditor ADVANCED MOLECULAR: Voluntary Chapter 11 Case Summary AFA INVESTMENT: Wants to Pay Employee Bonuses During Transition AFFINION GROUP: S&P Puts 'B' Corp. Credit Rating on Watch Negative AGUA CALIENTE: Fitch Affirms 'BB' Rating on Revenue Bonds AIRTRONIC USA: Global Signs Letter of Intent to Buy Business AMBAC FINANCIAL: Reviewing RMBS Securities, Initiates Litigation AMERICAN AIRLINES: Renews Request to Scrap Pilots' Contract AMERICAN AIRLINES:: FAs' Vote Pressures Pilots' Union AMERICAN AIRLINES: To Make Decision on Merger Within Weeks AMERICAN AIRLINES: Asks for More Time to Reject 12 Contracts AMERICAN AIRLINES: Opts to Keep Houston Cargo Facility AMERICAN NANO: Had $12,500 Net Loss in June 30 Quarter AMERICAN NATURAL: Sells $2MM Convertible Debenture to Palo Verde APEX DIGITAL: Cuts Deal With U.S. Trustee on Dismissal Bid ARRAY BIOPHARMA: Files Form 10-K, Incurs $23.6-Mil. Loss in 2012 ARTE SENIOR: Files Schedules of Assets and Liabilities ARTE SENIOR: Syble Oliver Appointed as Patient Care Ombudsman ATLANTIC COAST FINANCIAL: Bank Agrees to Consent Order With OCC ATP OIL: Credit Suisse, DIP Lenders Want Plan in 11 Months ATP OIL: Updated Case Summary & Creditors' List ATP OIL: Moody's Lowers PDR to 'D' on Chapter 11 Filing BERNARD L. MADOFF: SIPC Cuts Fee Request by Lawyers BERNARD L. MADOFF: Fights Dismissal of Fraud Suits vs. Foreigners BERNARD L. MADOFF: Has Deal With NY Atty General on Merkin Case BERWIND REALTY: Special Counsel OK'd for PMC Avoidance Lawsuit BIOLIFE SOLUTIONS: CFO's Salary Hiked to $180,000 Per Year BIOZONE PHARMACEUTICALS: Q1 Net Loss Revised to $9.39-Mil. BLUE BUFFALO: S&P Gives 'B' Corp. Credit Rating; Outlook Positive BOSTON GENERATING: Trustee Sues Ex-Parent to Recoup $60 Million BRANSON HOTELS: Marshall Hotels Adds 2 Receiverships CAPITAL CITY: Court Dismisses Chapter 11 Case CCI FUNDING I: Bankr. Court Has Jurisdiction on Trico Dispute CHAMPION INDUSTRIES: Common Stock Delisted from NASDAQ CHINA GREEN: Reports $811,291 Net Income in Second Quarter CHURCH STREET: Robert H. Welhoelter Approved as Co-Counsel CIG WIRELESS: Had $1.7 Million Net Loss in June 30 Quarter CLARE OAKS: Court Approves Jones Day as Special Bond Counsel CLARE OAKS: U.S. Trustee Adds Robert Webb to Creditors' Panel CLARE OAKS: Use of Cash for $50,000 APA Option Fee Payment Denied CLIFFS CLUB: Cassidy Not a Creditor, Drops Plan Objection COMMONWEALTH BIOTECH:: Incurs $119,700 Net Loss in 2nd Quarter CONSOLIDATED TRANSPORT: Files for Chapter 11 in Indiana CUMULUS MEDIA: To Issue 35MM Shares Under 2011 Incentive Plan CYBRDI INC: Had $154,700 Net Loss in Second Quarter DAVITA INC: S&P Affirms 'BB-' Issuer Credit Rating DZF PROPERTIES: Chapter 11 Case Dismissed Pending Payment of Fees DIAL GLOBAL: Had $15.1 Million Net Loss in Second Quarter DRINKS AMERICAS: To Issue 2 Million Shares Under Incentive Plan EASTGATE TOWER: Eastgate Hotel Files Ch. 11 With Prepack Plan EASTGATE TOWER: Case Summary & 20 Largest Unsecured Creditors EASTMAN KODAK: Again Attacks Apple's Claim to 8 Patents EAU TECHNOLOGIES: Incurs $563,000 Net Loss in Second Quarter EC DEVELOPMENT: Had $624,200 Net Loss in Second Quarter EDIETS.COM INC: Incurs $144,000 Net Loss in Second Quarter EMMIS COMMUNICATIONS: Agrees to Sell Two Magazines for $9 Million ENERGY FUTURE: Completes Offering of $850 Million Senior Notes ENVISION SOLAR: Had $235,400 Net Loss in Second Quarter EVENSTAR INC: Case Summary & 20 Largest Unsecured Creditors FANNIE MAE: Amends Preferred Stock Purchase Pact with Treasury FIBERTOWER NETWORK: Files Schedules of Assets and Liabilities FLINTKOTE COMPANY: Wants Plan Exclusivity Until Jan. 31 FRESH START: Had $438,500 Net Loss in Second Quarter GATOR INVESTMENT: Files for Chapter 11 in Gainesville, Fla. GATOR INVESTMENT: Case Summary & 20 Largest Unsecured Creditors GAMMA MEDICA-IDEAS: Case Summary & 9 Largest Unsecured Creditors GENERAL MOTORS: Again Losing Market Share GEOMET INC: Common Stock Delisted from NASDAQ Stock Market GETTY IMAGES: S&P Puts 'BB-' Issuer Credit Rating on Watch Neg GRESHAM & GRAHAM: Case Summary & 6 Largest Unsecured Creditors HALLWOOD GROUP: Files Form 10-Q, Had $1.2MM Net Loss in 2nd Qtr. HEALTHWAREHOUSE.COM INC: To Provide Mail-Order Services to Restat HIGH UP DAIRY: Owner of Convenience Stores in Va. File Chapter 11 HORIZON VILLAGE: Plan Exclusivity Extended Beyond Confirmation HORNE INTERNATIONAL: Incurs $506,000 Net Loss in Second Quarter HOSTESS BRANDS: Teamsters Union Members Will Vote on Final Offer HOSTESS BRANDS: Plan Filing Exclusivity Extended Nov. 6 HOSTESS BRANDS: Interstate Brands Files Second Amended Schedules HORIYOSHI WORLDWIDE: Posts $572,900 Net Loss in Second Quarter HOWREY LLP: Bankruptcy Will Rely on Contingency Fees, Ex-Partners INCOMING INC: Had $100,300 Net Loss in Second Quarter INFUSION BRANDS: Vicis Capital Discloses 91.1% Equity Stake INFUSYSTEM HOLDINGS: CFO J. Foster Has Consulting Agreement INTELLIGENT COMMUNICATION: Has $474,800 Net Loss in 2nd Quarter INTERNATIONAL LEASE: Fitch to Rate Senior Unsecured Notes 'BB' IRONSTONE GROUP: Had $42,100 Net Loss in Second Quarter IZEA INC: Had $1.8 Million Net Loss in Second Quarter JENNE HILL: Cambria Associates' John Schnure OK'd as Consultant KNIGHT CAPITAL: GETCO Owns 37.4% of Class A Common Shares KNIGHT CAPITAL: Jefferies & Company Owns 46% of Class A Shares KNIGHT CAPITAL: TD Ameritrade Holds 7.3% of Class A Shares KNIGHT CAPITAL: Stephen Schwarzman Owns 10.6% of Class A Shares KNIGHT CAPITAL: Stephens Investments Owns 20-Mil. Common Shares KNIGHT CAPITAL: Stifel Financial Owns 4.9% of Class A Shares KRYSTAL INFINITY: May Use Cash, But Can't Pay $150,000 to Bank KRYSTAL INFINITY: Hiring Levene Neale as Bankruptcy Counsel LIBERTY MUTUAL: Fitch Affirms Low-B Rating on Three Note Classes LITHIUM TECHNOLOGY: Delays Form 10-Q for Second Quarter LOGIC DEVICES: Had $143,900 Net Loss in June 30 Quarter LSP ENERGY: Settles Turbine Failure Dispute With Insurers for $7MM MERCY MEDICAL: Fitch Affirms 'BB+' Rating on $75MM Rev. Bonds MICRON TECHNOLOGY: Moody's Assigns 'Ba3' CFR/PDR; Outlook Stable MPG OFFICE: Said to Hire Adviser to Sell Biz or Seek Investment MONTE CRISTO: Case Summary & 3 Largest Unsecured Creditors MSR RESORT: Selects $1.5B Singapore Fund Offer as Stalking Horse MSR RESORT: Eastdil Secured Approved as Financing Broker MSR RESORT: Paulson & Co. and Winthrop Give Up on 4 Resorts NATIVE WHOLESALE: Sec. 341 Creditors' Meeting Moved to Aug. 29 NATIVE WHOLESALE: Has OK to Hire Phillips Murrah for Oklahoma Case NORTHAMPTON GENERATING: Makes Fourth Exclusivity Request NORTHSTAR AEROSPACE: Taps Christopher Picone as Wind Down Officer NORTHWEST PARTNERS: Fannie Mae Seeks Turnover of Cash Collateral OCALA FUNDING: $5.2-Mil. DIP Financing Approved on Final Basis OCALA FUNDING: Neil Luria Approved as Chief Restructuring Officer OCALA FUNDING: Paul Steven Singerman OK'd as Litigation Counsel OCALA FUNDING: Proskauer Rose Approved as Bankruptcy Counsel OCALA FUNDING: Stichte Riedel Approved as Local Counsel OLD SECOND BANCORP: Reports $1.25-Mil. Net Income in 2nd Quarter PACIFIC MONARCH: Gibson Dunn OK'd as Reorganization Counsel PATRICK FARMS: M.D. Ga. Court Confirms Reorganization Plan PEREGRINE FINANCIAL: Wasendorf Pleads Not Guilty at Arraignment PLATINUM PROPERTIES: Has Until Oct. 25 to File Reorganization Plan POWIN CORPORATION: Had $634,500 Net Loss in Second Quarter PROTECTIVE LIFE: Fitch Puts 'BB+' Rating on $150-Mil. Debt PULTEGROUP INC: Fitch Affirms Senior Unsecured Ratings at 'BB' QUALTEQ INC: Hilco Real Approved as Trustee's Real Estate Advisor R & D DEVELOPMENT: Voluntary Chapter 11 Case Summary REOSTAR ENERGY: Hatcher & Harris to Defend Inglish Family Suit RESIDENTIAL CAPITAL: Triaxx Wants Docs From Certificateholders RESIDENTIAL CAPITAL: FHFA Defends Bid to Access Documents RG STEEL: Union Agrees to $6.5 Million Settlement on Benefits RG STEEL: Committee Joins Objection to Motion to Lift Stay RICHFIELD OIL: Had $864,900 Net Loss in Second Quarter RITZ CAMERA: Taps Ernst & Young as Tax Service Provider RITZ CAMERA: Taps Hilco Streambank to Sell Intellectual Property SAAB CARS: Creditors Committee Taps MBAF CPAs as Financial Advisor SAN BERNARDINO, CA: Pivotal Hearing May Come at Year End SANDY CREEK: S&P Cuts Rating on $735-Mil. Secured Facility to 'B+' SANTA YSABEL: Files List of 20 Largest Unsecured Creditors SAUK TRAIL: Case Summary & 2 Unsecured Creditors SEARS HOLDINGS: William Harker Named SHO Board Chairman SIMCO SALES: Case Summary & 13 Largest Unsecured Creditors SKINNY NUTRITIONAL: Trim Provides Advance Loan of $270,000 SPECIALTY PRODUCTS: Panel Can Hire Firms to Handle Medical Science STEREOTAXIS INC: Files Form S-1, Registers 2MM Common Shares STOCKTON, CA: Calpers Justifies Not Taking Concessions STRATUS MEDIA: Incurs $3.4 Million Net Loss in Second Quarter SUPERMEDIA INC: To Combine With Dex Media in Merger of Equals SUNPEAKS VENTURES: Had $474,100 Net Loss in Second Quarter SUNRISE REAL ESTATE: To Amend 2011 Report for Accounting Errors SWISHER HYGIENE: Gets NASDAQ Non-Compliance Notice SYMS CORP: Ch. 11 Plan Harms Creditor Setoff Rights, IRS Says SYNAGRO TECHNOLOGIES: S&P Downgrades CCR to 'CCC' Over High Debt TALON THERAPEUTICS: Issues 60,000 Pref. Stock to Warburg, et al. TALON THERAPEUTICS: Joseph Landy Discloses 92.3% Equity Stake TARGETED MEDICAL: Had $2.8 Million Net Loss in Second Quarter TECHNEST HOLDINGS: MaloneBailey Succeeds Wolf as Accountants TELETOUCH COMMUNICATIONS: Sells Radio Division to DFW for $1.5MM THOMPSON CREEK: Inks Copper Sales Agreement with Glencore TRAFFIC CONTROL: Statewide Holdings Rise as Winning Bidder TRIDENT MICROSYSTEMS: Trade Creditors Expect Big Payout TW TELECOM: Moody's Raises Rating on $430MM Bond to 'Ba3' UNIGENE LABORATORIES: Terminates VP Investor Relations, 4 Others UNITED COMMERICAL: Case Summary & 8 Largest Unsecured Creditors VIEW SYSTEMS: Amends 2010 Annual Report to Correct Error VISUALANT INC: Board of Directors Approves Bylaws Amendment VWR FUNDING: Moody's Rates $750 Million Notes Offering 'Caa1' VWR FUNDING: S&P Rates New $750MM Senior Unsecured Notes 'B-' WATERLOO RESTAURANT: Authorized to Sell Certain Restaurant Assets ZOOM TELEPHONICS: Had $210,800 Net Loss in Second Quarter ZYTO CORP: Reports $31,200 Net Income in Second Quarter * Fitch Says 31 U.S. Issuers at Risk of Repeat Default * Fitch Says US High Yield Default Rate Falls Back to 2% in July * Syracuse, N.Y. Seeks Legal Expert's Opinion for Info Purposes * All Chapter 13 Payments May Go to Debtor's Lawyer * Legal Name Not Required on UCC Financing Statement * Upcoming Meetings, Conferences and Seminars ********* 1717 MARKET: Sec. 341 Creditors' Meeting Set for Sept. 5 -------------------------------------------------------- The U.S. Trustee for the Western District of Missouri will hold a meeting of creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of 1717 Market Place, L.L.C., on Sept. 5, 2012, at 1:30 p.m. at the Jury Assembly Room, 222 N. John Q Hammons Pkwy, Springfield, Missouri. 1717 Market Place LLC, a grocery-store business, filed for Chapter 11 protection (Bankr. W.D. Mo. Case No. 12-bk-00984) on July 17, 2012, in Springfield, Missouri. The Debtor estimated assets and liabilities of at least $10 million. G&S Holdings LLC owns 98% of the company and the remaining 2% is owned by J. Scott Schaefer and Richard T. Gregg, according to court papers. 1717 Market Place said it is a defendant in a lawsuit brought by Regions Bank in Joplin, Missouri, relating to a promissory note. The bank is seeking the appointment of a receiver. David Schroeder Law Offices, P.C., serves as the Debtor's counsel. 2279-2283 THIRD: Files Schedules of Assets and Liabilities ---------------------------------------------------------- 2279-2283 Third Avenue Associates LLC filed with the U.S. Bankruptcy Court for the Southern District of New York its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $14,000,000 B. Personal Property $839,697 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $16,148,374 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $825,618 ----------- ------------ TOTAL $14,839,697 $16,973,992 A copy of the schedules is available at: http://bankrupt.com/misc/2279-2283_THIRD_sal.pdf About 2279-2283 Third Avenue 2279-2283 Third Avenue Associates LLC and 2279-2283 Third Avenue Development LLC sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 12-13092 and 12-13093) on July 17, 2012. Third Avenue Associates owns two contiguous multi residential buildings located at 2279-2283 Third Avenue, in New York. Third Avenue Development is the sole member of Associates. The Property is Associate's primary asset, while Development's membership interests in Associates is its sole asset. The managing member of each of the Debtors is Michael Waldman. He is also the managing member of 3210 Riverdale Associates LLC and the managing member of the sole member of 3210 Riverdale Development LLC, other Chapter 11 proceedings currently pending before the SDNY Court under Case Nos. 12-11286 and 12-11109. Third Avenue Associates obtained financing from commerce bank of $14 million and Development obtained mezzanine financing from HSBC Capital (USA) Inc. in the amount of $6 million. HSBC refused to grant additional $700,000 in financing requested by the Debtor to fund build-outs required by the Internal Revenue Service. The Commerce note -- which was assigned to TD Bank and then to LSV-JCR 124th LLC -- was secured by a mortgage on the Properties, and the HSBC obligation is secured by a mortgage on Associates' membership interest owned by Development. The HSBC note matured in 2011 and HSBC called the loan into default and commenced a foreclosure action. The state court entered an order appointing Steven Weiss as receiver of rents. THSBC has assigned its mezzanine note to LCP-GC LLC. On July 3, 2012, the Debtors and their two secured lenders, LSV- JCR 124th LLC and LCP-GC LLC entered into a settlement that requires the Debtors to transfer ownership of the buildings to the secured lenders through a Chapter 11 plan. Judge James Peck oversees the case. Lawyers at Rattet Pasternak, LLP, serve as the Debtors' counsel. ACCO BRANDS: Moody's Affirms 'Ba3' CFR; Outlook Negative -------------------------------------------------------- Moody's Investors Service revised ACCO Brands Corporation's rating outlook to negative following recent earnings guidance revision. The company lowered its 2012 revenue forecast by about $150 million. At the same time, all ratings were affirmed, including the Ba3 Corporate Family Rating. "The change in outlook reflects the sudden shift in revenue and earnings guidance from just a few months ago, which we are concerned may continue," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. "The fact that the recently-acquired Mead Business and the Latin America business are performing well helps, but there is increasing risk as both Europe and the United States are showing weakness." Ratings affirmed (no change in LGD assessments): Corporate Family Rating at Ba3; Probability of Default Rating at Ba3; $500 million Senior Unsecured Notes at B1 (LGD 5, 80%); $320 million Term Loan A at Ba1 (LGD2, 26%); $450 million Term Loan B at Ba1 (LGD2, 26%); $250 million Revolver at Ba1 (LGD2, 26%); Speculative grade liquidity rating at SGL-2 Rating Rationale ACCO's Ba3 Corporate Family Rating reflects its size at around $2 billion for the combined company, good product and geographic diversification, and the expectation for improved financial performance over the longer term, despite recent weakness in both Europe and in the United States. The acquisition of the Consumer & Office Products business from MeadWestvaco ("the Mead Business") is still expected to improve ACCO's credit metrics over the longer term, but 2012 will be weaker than previously expected and there is a risk the expected improvement may be delayed. Debt to EBITDA was originally projected to be around 4 times by the end of 2012, but is now likely to be around 5 times. The rating reflects Moody's expectation that Debt to EBITDA will be reduced to around 4 times over time, but the negative outlook incorporates the risk that this will take longer than previously expected. The rating also considers ACCO's increased exposure to the faster growing emerging markets of Latin America at around 10% of pro forma sales. The rating incorporates the mature nature of the office and school supplies industry. ACCO serves a consumable segment, about 60% of which is tied to discretionary consumer spending and a durable exposure, which is driven more by business spending but is more vulnerable to cyclicality. Mitigating these factors is ACCO's solid market position within the office supply product categories, improved margins through a realignment of its cost structure, adequate free cash flow generation, commitment to pay down debt and good liquidity profile. Moody's also considers the relevance of ACCO to its largest customers as one of only a few global suppliers of office products. The negative outlook reflects the risk that the recent soft consumer spending patterns in Europe and in the United States persist or get even worse in the near to midterm, further pressuring revenue, earnings and cash flow. In addition to possible integration issues, which appear unlikely based on preliminary results, the rating could be downgraded if revenue, earnings and cash flow don't improve as Moody's expects. Key credit metrics driving a potential downgrade would be if EBITA margins fall to the high single digits or lower for a prolonged period (expected to be just below 15% proforma at end of 2012) or if proforma Debt to EBITDA remains above 5 times for a sustained period (expected to be around 5 times by end of 2012, but falling below 5 times in 2013). The rating is unlikely to be upgraded in the near term given the negative outlook. Over the longer term, the rating could be upgraded if the combined company outperforms Moody's expectations for a sustained period. Key credit metrics driving a potential upgrade are EBITA margins above 15% and Debt to EBITDA below 3 times. The principal methodology used in rating ACCO was Moody's Global Consumer Durables methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ACCO Brands Corporation is a leading supplier of branded office products, which are marketed in over 100 countries to retailers, wholesalers, and commercial end-users. Proforma revenue for ACCO approximated $2.0 billion for the year ending December 31, 2011. The Mead Business , located in Dayton, Ohio, is a leading provider of school, office, and time-management products in North America and Brazil. It manufactures brands such as At-A-Glance, Day Runner, Five-Star, Mead, and Hilroy. ADAMSON APPAREL: Committee Loses Bid to Recoup $4-Mil. ------------------------------------------------------ The Official Committee of Unsecured Creditors of Adamson Apparel, Inc., lost at the district court level on its attempt to recoup as a preferential transfer $4,898,934 from Arnold H. Simon, who guaranteed Adamson Apparel's 2002 secured loan with CIT Group/Commercial Services, Inc. District Judge Virginia A. Phillips upheld a January 2011 bankruptcy ruling that Mr. Simon waived his subrogation rights, eliminating his status as a "creditor" for purposes of preference liability. According to Judge Phillips, the Bankruptcy Court correctly held that the $4,989,934 transfer did not constitute a preference under 11 U.S.C. Section 547(b). The Court also noted Mr. Simon did not file a proof of claim in the Debtor's case, which effectuated a complete waiver of claims against the Debtor. The case before the District Court is The Official Committee of Unsecured Creditors of Adamson Apparel, Inc., Appellant, v. Arnold H. Simon, Appellee, Case No. CV 11-01204-VAP (C.D. Calif.). A copy of the District Court's Aug. 15, 2012 Order is available at http://is.gd/N6KLE4from Leagle.com. Adamson Apparel, Inc., manufactures and sells clothing and accessories bearing the "Members Only," "Baby Phat," and "XOXO" trademarks. Adamson Apparel filed for Chapter 11 bankruptcy (Bankr. C.D. Calf. Case No. 04-30799) on Sept. 28, 2004. ADVANCED MOLECULAR: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------- Debtor: Advanced Molecular Imaging, LLC 19355 Business Center Drive, Suite 8 Northridge, CA 91324 Bankruptcy Case No.: 12-17475 Chapter 11 Petition Date: August 20, 2012 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Debtor's Counsel: Krikor J. Meshefejian, Esq. Ron Bender, Esq. LEVENE, NEALE, BENDER, YOO & BRILL LLP 10250 Constellation Blvd, Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 E-mail: kjm@lnbrb.com rb@lnbyb.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 In its list of 20 largest unsecured creditors, the Company placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bradley Patt $180,000 5416 Katherine Avenue Sherman Oaks, CA 91401 The petition was signed by James Calandra, president and chief executive officer. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Gamma Medica-Ideas (USA), Inc. 12-17469 08/20/12 ADVANCED MOLECULAR: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Advanced Molecular Imaging, Inc. 19355 Business Center Drive, Suite 8 Northridge, CA 91324 Bankruptcy Case No.: 12-17479 Chapter 11 Petition Date: August 20, 2012 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Debtor's Counsel: Krikor J. Meshefejian, Esq. Ron Bender, Esq. LEVENE, NEALE, BENDER, YOO & BRILL LLP 10250 Constellation Blvd, Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 E-mail: kjm@lnbrb.com rb@lnbyb.com Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by James Calandra, president and chief executive officer. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Gamma Medica-Ideas (USA), Inc. 12-17469 08/20/12 AFA INVESTMENT: Wants to Pay Employee Bonuses During Transition --------------------------------------------------------------- AFP Investment inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware for authorization to offer and pay certain retention bonuses to a small number of non-insider key employees. According to the Debtor, during the Chapter 11 cases, they have sold four of their five facilities. In connection with the sales of the Debtors' assets associated with their Texas and Pennsylvania Facilities, the Debtors and the buyers entered into transition services agreements. Pursuant to the TSAs, the Debtors are required to provide certain transition services to the applicable buyer for a period of up to 90 days following the closing of the applicable sale. The Debtors must maintain adequate resources to satisfy their obligations under the TSAs -- for which the buyers agreed to pay $180,000 per month for each month they continue to require support under the TSAs. The key employees perform all of the roles, including certain accounting functions, purchasing, and account management, that are critical to the Debtors' ability to continue operating their remaining business, administering these cases and maximizing the value of their estates. The Debtors seek authorization to offer retention bonuses to these non-insider key employee in these amounts: Chris Aldworth, accounts payable specialist $10,734 Kevin Brandis, procurement manager $19,687 Dana Fox, customer services representative $11,440 Kadie Klump, senior accountant $18,750 Patricia Olivos, treasurer $33,750 Cindy Yanchus, corporate controller $31,250 A hearing on Aug. 29, 2012, at 10:30 a.m. (E.T.) has been set. Objections, if any, are due Aug. 22, at 4:00 p.m. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. is one of the largest processors of ground beef products in the United States. The Company has five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA has seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings -- BLBT -- affected sales. Judge Mary Walrath presides over the case. Lawyers at Jones Day and Pachulski Stang Ziehl & Jones LLP serve as the Debtors' counsel. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. AFA Foods, Inc., disclosed $615,859,574 in assets and $544,499,689 in liabilities as of the Petition Date. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. The Committee has obtained approval to hire McDonald Hopkins LLC as lead counsel and Potter Anderson & Corroon LLP serves as co-counsel. The Committee also obtained approval to retain J.H. Cohn LLP as its financial advisor, nunc pro tunc to April 13, 2012. AFFINION GROUP: S&P Puts 'B' Corp. Credit Rating on Watch Negative ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings, including its 'B' corporate credit rating, on Stamford, Conn.-based Affinion Group Holdings Inc. on CreditWatch with negative implications. Total debt was $2.25 billion as of June 30, 2012. "The CreditWatch placement reflects our concern that weak operating performance in the second half of 2012 will significantly narrow the margin of compliance with the credit agreement's net debt leverage covenant," said Standard & Poor's credit analyst Hal Diamond. "Operating performance is under pressure as a result of a slight decline in membership products revenues stemming from regulatory uncertainty experienced in the financial services industry, the company's largest client pool. Overall revenues declined 2.5% in the second quarter of 2012, while EBITDA was roughly flat. We believe that EBITDA may decline at a mid-to-high single digit rate for the full year 2012 as regulatory pressures likely will result in lower new campaign launches by large financial institution marketing partners," S&P said. "Affinion's consolidated lease-adjusted debt-to-EBITDA ratio was high at 7.2x for the 12 months ended June 30, 2012, and we believe leverage may approach 8x by year-end 2012. Lease-adjusted EBITDA coverage of interest expense was thin, at 1.6x for the 12 months ended June 30, 2012, and we believe coverage may decline to 1.5x for full-year 2012. Discretionary cash flow was minimal for the 12 months ended June 30, 2012, at roughly 10% of EBITDA, because of increasing working capital related to recent acquisitions and higher capital spending. We expect discretionary cash flow to remain low at roughly 10% of EBITDA in the full year 2012," S&P said. "Credit facility financial covenants apply to the Affinion Group Inc. operating company, and exclude public debt at the Affinion Group Holdings parent. Pro forma net debt leverage, including the contribution from recent acquisitions, was 5.22x as of June 30, 2012, compared with a 5.75x covenant, providing a modest 13% margin of compliance. We expect Affinion's margin of compliance with its net debt leverage covenant to diminish to the mid-single- digit percentage area by year-end 2012 because of weaker operating performance and a slight increase in cash balances. We also expect Affinion to need an amendment to remain in compliance with the step-down to 5.25x as of June 30, 2013, unless management executes it near-term financial strategies," S&P said. "We will review Affinion's business and financial strategies as and operating outlook in reassessing our rating. We believe that ratings downside risk is limited to one notch, to our 'B-' corporate credit rating," S&P said. AGUA CALIENTE: Fitch Affirms 'BB' Rating on Revenue Bonds --------------------------------------------------------- Fitch Ratings has affirmed the Agua Caliente Band of Cahuilla Indians' Issuer Default Rating (IDR) at 'BB-'. Fitch has also affirmed Agua's gaming revenue bonds at 'BB.' The Rating Outlook has been revised to Positive from Stable. The Rating Outlook to Positive reflects stronger than expected operating improvement at Agua Caliente's two casino resorts. Fitch's previous forecast had been anticipating flat revenue growth with some modest EBITDA expansion from cost cutting initiatives. Revenue and EBITDA have outperformed this forecast, with revenue growing in low-to-mid single digit range over the last three reported quarters ending June 30, 2012. Due to the expense-side initiatives, revenue flow through to EBITDA has been meaningful. For the latest-12-month (LTM) period ending June 30, 2012 EBITDA grew 17.9% over the prior year period. As a result of this improvement, coverage of maximum annual debt service (MADS) by LTM based EBITDA increased to 2.7x from 2.3x one year ago and debt/EBITDA ratio improved to 2.3x from 2.9x. These ratios are now more consistent with the mid-range of 'BB' IDR category. However, the regional economy remains fragile and there is potential for competitive pressures to intensify. The competitive environment has been benign through the downturn and most tribes in the area have capacity under their state compacts to expand, which they may consider more as the recovery progresses. That said, another 6-12 months of stable-to-improving operating performance could support an upgrade of the IDR to 'BB' and the revenue bonds to 'BB+'. Fitch sees limited rating upside in the near term beyond the 'BB' IDR given the operating risk inherent in gaming operations concentrated in a limited geographic area. (Although relative to most other Native American issuers Agua Caliente has a degree of diversification with casinos in two distinct locations.) The ratings are also pressured by the lack of transparency regarding the tribe's financials over the last few years. Fitch does not have current access to the tribe's financial statements and management is opaque when discussing the tribe's financial health. Previously, Fitch was concerned that the tribe was depleting its reserves during the downturn as casino transfers fell short of the tribe's per capita payments. According to management the tribe instituted policies aimed at restoring the reserves but Fitch cannot verify. Agua Caliente's sizable annual debt service is also limiting the upside, as the relatively heavy annual debt burden constrains coverage and cash flows made available to the tribe. Positively, the annual principal amortization supports rapid deleveraging of the credit profile. Coverage is expected to improve markedly by 2016 when a bulk of the tribe's debt matures. Past 2016, debt service coverage and leverage could be consistent with the higher end of the 'BB' category but an upgrade of the IDR to investment grade can be constrained due to the transparency concerns expressed above and/or potential project expansion plans beyond Fitch's expectations. Economy Remains Fragile: Agua Caliente is susceptible to the local economic conditions, which remain fragile, particularly in the San Bernardino-Riverside metro area. The unemployment rate in the metropolitan statistical area remains high at 12.6% as of June and the foreclosure rate in Riverside County is still uncomfortably elevated at one out of 182 households filing for foreclosure in July (realtytrack.com). The broader economic headwinds such as the recent deceleration in U.S. economic trends, including employment and consumer sentiment, may exacerbate local conditions. Tribe's Per Capita Policy Now Sustainable: The tribe's revenue allocation plan (RAP) calls for an allocation for economic development (which includes debt service), an allocation for per capita payments to the members and an allocation for other tribal expenses (mostly governmental services). Agua Caliente's gaming operations became pressured during the recession and scheduled annual amortization payments began to tick up in calendar years 2009 and 2010. The tribe used some of its reserves to cover debt service rather than reduce per capita payments enough to cover the debt service payments organically from the casino operations. Prior rating actions reflected Fitch's concern related to reduced tribal liquidity should this practice continue indefinitely. The concern was amplified by the lack of financial disclosure by the tribe. Fitch only receives statements for the gaming operations and does not have access to the current consolidated statements of the tribe. For fiscal 2011 the tribal council voted to set the per capita at a significantly reduced fixed dollar amount. The surplus between the RAP-defined per capita allocation and the budgeted per capita payments was used to make up the shortfall in debt service allocation and to restore tribal reserves. For 2012, the tribe has returned to making per capita distributions based on the RAP allocation; however, the shortfall in debt service is now made up for by reducing the per capita payment rather than using the reserves. The tribal reserves can potentially be bolstered to the extent that the general government allocation exceeds general government expenditures. Debt Structure and Liquidity: All of Agua Caliente's debt is pari passu with respect to bondholders' security interest in the cash flows of the tribe's casino gaming operations. The 2003 bonds have the benefit of a fully funded trustee held debt service reserve fund. There are also reserve accounts established for the 2006 and 2007 notes but the tribe can access these funds between quarterly deficiency test dates. There is a financial maintenance coverage covenant set at 2.0x of MADS. A breach of the covenant would be an event of default. However, Fitch considers this threshold to be high relative to the agency's rated universe, so obtaining a waiver or an amendment in case of a breach would not be difficult, in Fitch's view. There is also an additional debt test limiting debt issuance if pro forma MADS coverage is less than 2.25x or leverage exceeds 3.0x. There is a $20 million carveout for additional debt. The tribe's limited capacity to issue pari passu debt supports strong recovery prospects for the bonds in an event of default and the one notch positive differentiation from the IDR. The tribe is required to make mandatory sinking fund payments with respect to the debt outstanding, so there is low refinancing risk. Cash at the casinos just meets cage cash and day-to-day operating needs with the bulk of the tribe's cash kept at the governmental level. Fitch believes that the tribe's reserves remain sizable but is not able to verify. The tribe does not have access to external liquidity, such as a revolving credit facility. Rating Drivers: Rating drivers that would result in positive rating pressure include: -- Continued growth or stabilization in revenues over the next 6 to 12 months would likely result in an upgrade of the IDR to 'BB'. -- Longer-term further improvement in coverage and leverage metrics could lead to an upgrade of the IDR to 'BB+'. Leverage is expected to improve in the near-term from debt amortization but coverage will remain constrained by a heavy debt service schedule, which will ease up around 2016. There is now considerable cushion for mild-to-moderate operating deterioration relative to the 'BB-' IDR and the 2.0x MADS coverage covenant. Fitch takes the following rating actions on the Agua Caliente Band of Cahuilla Indians: -- IDR affirmed at 'BB-'; -- Senior Secured Notes due 2015, 2016 and 2021 affirmed at 'BB'; -- Revenue Bonds due 2013 and 2018 affirmed at 'BB'. AIRTRONIC USA: Global Signs Letter of Intent to Buy Business ------------------------------------------------------------ California-based Global Digital Solutions, Inc., signed a letter of intent to acquire Illinois-Based Airtronic USA, Inc. Founded in 1990, Airtronic USA is a manufacturer of battlefield weapons including the MK 777 - a shoulder-fired recoilless rifle - the RPG-7 rocket launcher, and the M203 grenade launcher, the most widely used grenade launcher in the world. The companies have agreed, on an exclusive basis, to enter into good faith discussions involving a potential strategic combination in which Airtronic would be acquired by GDSI. If the acquisition is completed as expected, Airtronic will continue to operate as a subsidiary of GDSI. The exclusive agreement is subject to the completion of due diligence reviews by both companies and certain other conditions, including agreement by the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division. "This proposed strategic acquisition is extremely exciting for both GDSI and Airtronic,' said GDSI founder and largest shareholder Richard J. Sullivan, who will become non-executive chairman of GDSI after the acquisition is completed. 'I'm looking forward to finalizing all necessary approvals and working with Dr. Merriellyn Kett and the entire Airtronic team going forward. Airtronic has a great track record of manufacturing essential battlefield weapons for the United States and our allies and is well-connected with key agencies in the U.S. and around the world. Working together, I believe GDSI and Airtronic will be a very powerful combination that fits perfectly into GDSI's evolving strategy to become a leader in knowledge-based consulting and security-related solutions in unsettled, complex areas." Merriellyn Kett, PhD, Airtronic's CEO and President, joined the company in 2003 as a partner and helped to refocus the business on several essential battlefield weapons, including the M203 40mm Grenade Launcher - one of the most widely used grenade launchers in the world - the .50 cal. Machine Gun, the MK 19 Grenade Machine Gun, and most recently the MK 777, a shoulder-fired recoilless rifle that is light, lethal, and affordable. Dr. Kett, who has a PhD in analytic philosophy, also commented on the planned acquisition. "I believe very strongly that Airtronic has enormous growth potential and that we provide critically important small arms for the U.S. military and allied militaries. I look forward to finalizing this agreement and continuing to provide strong leadership for Airtronic in the years ahead." Once the acquisition is finalized, Dr. Kett is expected to continue serving as CEO of Airtronic. About Global Digital Solutions Global Digital Solutions (PINKSHEETS:GDSI) is refocusing its business strategy on providing knowledge-based and culturally attuned societal consulting and security-related solutions in unsettled areas. See http://www.gdsi.co About Airtronic USA Airtronic USA, Inc., an engineering design and manufacturing company, was founded in 1990 and incorporated in 1993. Its first initiative was an investigation of fully non-magnetic electronic headsets that could be used within Functional Echo-Planner Magnetic Resonnance systems. Airtronic is a member of the National Small Arms Technology Consortium (NSATC) and the largest woman-owned small arms manufacturing company in the United States. The company has received commendations from the US Army Tank, Armaments, and Automotive Command and the Defense Logistics Agency for the quality and on-time delivery of its products. On March 13, 2012 Airtronic was placed into involuntary bankruptcy by five of unsecured creditors AFCO Products, Total Solutions Central, Fox Machine & Tool Triple Edge Manufacturing, and Concise National Components. On May 16, 2012 Airtronic converted the Chapter 7 bankruptcy case to a Chapter 11 reorganization. The former president of the company, Robert Walter, surrendered all of his shares in the company on May 15, 2012, for zero dollars and has no further role in the company. AMBAC FINANCIAL: Reviewing RMBS Securities, Initiates Litigation ---------------------------------------------------------------- Ambac Assurance Corporation is currently reviewing certain residential mortgage-backed securities that are insured by it. That review includes forensic analyses of loan origination files and process and a re-underwriting of loans to determine whether there were breaches of representations and warranties made by the sponsors of those securities at the time those securities were issued. AAC believes, based on its review, that the sponsors of these securities are obligated to pay sums, which may in certain cases be material, to the issuers of some or all of the RMBS Securities or to AAC in respect of those breaches of representations and warranties. AAC believes, based on its review and internal calculations, that any recoveries will vary from security to security. The RMBS Securities under review are: Bear Stearns Mortgage Funding Trust 2006-AR4, Class A-2 Countrywide Revolving Home Equity Loan Trust 2004-D Countrywide Revolving Home Equity Loan Trust 2004-G Countrywide Revolving Home Equity Loan Trust 2004-J Countrywide Revolving Home Equity Loan Trust 2004-S DSLA Mortgage Loan Trust 2006-AR2 Greenpoint Mortgage Funding Trust 2005-AR5 Greenpoint Mortgage Funding Trust 2005-HE3 Greenpoint Mortgage Funding Trust 2006-AR2 Structured Asset Mortgage Investment Trust, Series 2006-AR8 In addition, AAC has initiated litigation with respect to a number of other RMBS securities and may from time to time file further RMBS securities litigation. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L. Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's bankruptcy counsel. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Judge Shelley C. Chapman entered an order confirming the Fifth Amended Plan of Reorganization of Ambac Financial Group, Inc. on March 14, 2012. The Plan provides for the full payment of secured claims and 8.5% to 13.2% recovery for general unsecured claims. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). The Company's balance sheet at June 30, 2012, showed $26.61 billion in total assets, $30.36 billion in total liabilities and a $3.75 billion total stockholders' deficit. AMERICAN AIRLINES: Renews Request to Scrap Pilots' Contract ----------------------------------------------------------- AMR Corp. again asked a bankruptcy judge for permission to cancel a collective bargaining agreement with the Allied Pilots Association. Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York previously denied AMR's earlier proposal to remove all restrictions on its power to furlough pilots and to outsource flying via code-share agreements with other airlines. The bankruptcy judge said AMR did not prove that a successful restructuring depended on being able to end those restrictions, according to an August 16 report by Bloomberg News. The Allied Pilots Association has voted to reject a tentative agreement from AMR earlier this month. Results of the voting, held Aug. 8, showed that 2,935 pilots voted for the tentative agreement, while 4,600 pilots voted against the tentative agreement. The APA represents 10,000 pilots. In the new request filed Friday, AMR removed its prior proposal on furlough protections while it added a cap on how many code-share agreements it could enter. Specifically, the new proposal permits American Airlines Inc., an AMR subsidiary, to enter new code-sharing agreements with other domestic carriers and their regional partners if the total number of air seat miles of all aircraft of the partner carriers on which the company places the America code during a rolling 12-month period does not exceed 50% of the domestic American scheduled monthly ASMs during that period. The new proposal on code-sharing also eliminates the provision for adding new domestic code-sharing relationships previously found in the contract. Judge Lane sided with AMR on the other proposed terms in the initial request, leaving a second ruling to focus on the new proposals. The bankruptcy judge has scheduled a hearing for September 4, according to an August 17 report by The Wall Street Journal. AMR spokesman Bruce Hicks said in an e-mail that the changes "properly address the court's concern" and that the company will allow the request to move forward quickly. According to the WSJ report, the APA said it expects Judge Lane to approve AMR's second request to cancel the contract. Meanwhile, the Association of Professional Flight Attendants, which represents American Airlines' 18,000 flight attendants, were voting on a new contract. Balloting was scheduled to conclude Sunday, according to the report. Denise Lynn, senior vice president for labor, said members of the union of flight attendants at American Airlines should not assume that the bankruptcy judge would prevent the voiding of their current labor agreement if they reject the latest plan. She said the issues raised in Judge Lane's decision are specific to pilots, Bloomberg News reported. Two of the Transport Workers Union factions that represent mechanics and store clerks at American have already ratified new contracts that include givebacks, according to the Bloomberg report. 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:: FAs' Vote Pressures Pilots' Union ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the flight attendants' union at American Airlines Inc. voted to ratify a new contract, leaving only the pilots without a consensual collective-bargaining agreement. According to the report, the pilots this month voted down a contract negotiated by their leadership. The bankruptcy judge then filed a lengthy opinion describing two changes that AMR Corp., the airline's parent company, needed to make so the revised contract would pass muster with the court. The report relates that AMR responded by making the necessary changes and arranging a Sept. 4 hearing, where it will ask the bankruptcy judge to impose a new collective-bargaining agreement on the Allied Pilots Association. 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: To Make Decision on Merger Within Weeks ---------------------------------------------------------- AMR Corp.'s chief executive said the company is in the middle of reviewing strategic options that include a merger and will likely make a decision within weeks, according to an August 12 report by Chicago Tribune. American Airlines Inc., an AMR subsidiary, has begun reviewing strategic alternatives including a merger with US Airways Group Inc. to determine whether merging with a rival will generate more in recoveries for its creditors than going it alone. In an interview with Financial Times, AMR CEO Tom Horton said a possible merger with US Airways "may be an attractive option under the right circumstances." "Our view (earlier this year) was not that that combination was unwise. It was that that was not the right time to discuss it," the Financial Times quoted Mr. Horton as saying. Mr. further said there were potentially meaningful revenue synergies from a combination with US Airways but stressed that other combinations would be considered and that remaining independent was also an option. Meanwhile, The American Antitrust Institute and the Business Travel Coalition called the potential merger of American Airlines and US Airways "troubling." In a report sent to the U.S. Department of Justice, which may probe the possible anti-competitive effects of combining the two airlines, the groups said the merger could eliminate competition on key flight routes and raise prices for consumers, Law360 reported. 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: Asks for More Time to Reject 12 Contracts ------------------------------------------------------------ AMR Corp. has filed a motion asking the U.S. Bankruptcy Court for the Southern District of New York to give the company additional time to decide on whether to assume or reject 12 contracts. The contracts include leases for nonresidential real properties that American Airlines Inc. and American Eagle Airlines Inc. entered into with airport authorities. A list of the leases is available at http://bankrupt.com/misc/AMR_12Leases081412.pdf AMR lawyer Stephen Youngman, Esq., at Weil Gotshal & Manges LLP, in New York, said the proposed extension is "appropriate to preserve value for all stakeholders." "The leases directly affect the debtors' business operations and reorganization because the majority of the leases are related to the debtors' airport and flight service operations," Mr. Youngman said in court papers. Mr. Youngman will present the motion to Judge Sean Lane today, Aug. 22. Objections were due Aug. 21. Court Gives AMR More Time to Assume or Reject 15 Leases In a related development, the bankruptcy court issued an order giving AMR more time to decide on whether to assume or reject 15 nonresidential real property leases. The contracts include a maintenance base lease between American Airlines Inc. and Tulsa Municipal Airport Trust, and various lease contracts between the airline and the City of Los Angeles. A list of these contracts is available without charge at: http://bankrupt.com/misc/AMR_15Leases080812.pdf 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: Opts to Keep Houston Cargo Facility ------------------------------------------------------ AMR Corp. has filed a motion seeking court approval to assume a lease contract between American Airlines Inc. and Aero Houston East II LP. American Airlines, an AMR subsidiary, entered into the contract to lease a cargo facility located at the George Bush Intercontinental Airport. Stephen Youngman, Esq., at Weil Gotshal & Manges LLP, in New York, said the lease is "important" to the company's business operations and "enhances the value" of AMR estate. The motion also seeks court permission to assume a lease contract between Niagara Frontier Transportation Authority and American Eagle Airlines Inc., another subsidiary. The lease is for a nonresidential real property located at Buffalo Niagra International Airport. A court hearing to consider the proposed assumption of the two contracts is scheduled for Aug. 22. Meanwhile, AMR received a go-signal from Judge Sean Lane to assume a 1990 lease between American Airlines and the City of Chicago. 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 NANO: Had $12,500 Net Loss in June 30 Quarter ------------------------------------------------------ American Nano Silicon Technologies, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $12,553 on $77,352 of revenues for the three months ended June 30, 2012, compared with a net loss of $157,738 on $3.7 million of revenues for the three months ended June 30, 2011. For the nine months ended June 30, 2012, the Company had a net loss of $1.2 million on $93,857 of revenues, compared with net income of $2.9 million on $15.9 million of revenues for the nine months ended June 30, 2011. The Company did not generate any significant sales for the three and nine months ended June 30, 2012. According to the regulatory filing, the lack of significant revenue in fiscal year 2012 was due to the fact that when the Company moved its factory site during the second half of fiscal year 2011 production was completely suspended. "Through the date of this report, the equipment and production line in the new facility is still undergoing adjustments." The Company's balance sheet at June 30, 2012, showed $25.0 million in total assets, $10.0 million in total liabilities, and stockholders' equity of $15.0 million. The Company has a working capital deficiency of $4.9 million and an accumulated deficit of $547,116. As reported in the TCR on Jan. 17, 2012, Friedman LLP, in Marlton, New Jersey, expressed substantial doubt about American Nano Technologies' ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2011. The independent auditors noted that the Company suspended its operations in May 2011. In addition, the Company has suffered negative cash flows for the year ended Sept. 30, 2011, and has a net working capital deficiency as of Sept. 30, 2011. A copy of the Form 10-Q is available for free at: http://is.gd/GeAkSg Sichuan, China-based American Nano Silicon Technologies, Inc., was originally incorporated in the State of California on Sept. 6, 1996 as CorpHQ, Inc. The Company has been primarily engaged in the business of manufacturing and distributing refined consumer chemical products through its subsidiaries, Nanchong Chunfei Nano- Silicon Technologies Co., Ltd. ("Nanchong Chunfei"), Sichuan Chunfei Refined Chemicals Co., Ltd. ("Chunfei Chemicals"), and Sichuan Hedi Veterinary Medicines Co., Ltd. ("Hedi Medicines"). AMERICAN NATURAL: Sells $2MM Convertible Debenture to Palo Verde ---------------------------------------------------------------- American Natural Energy Corporation entered into a Securities Purchase Agreement with Palo Verde Acquisitions, LLC, pursuant to which the Company sold to Palo Verde (1) a $2,000,000 12% Convertible Debenture due Aug. 13, 2014, and (2) warrants to purchase up to 20,000,000 shares of common stock of the Company at an exercise price of US$0.23 per share and expiring on Aug. 13, 2014. The aggregate consideration paid to the Company by Palo Verde for the Palo Verde Debenture and the Warrants was $2,000,000. The obligations of the Company to Palo Verde under the Palo Verde Debenture are unsecured obligations of the Company. Interest on the outstanding principal amount of the Palo Verde Debenture will accrue at a rate of 12% per annum, and is payable by the Company on a quarterly basis. At the Company's election, interest may be payable by the Company in shares of common stock of the Company in lieu of cash. Pursuant to the Palo Verde Purchase Agreement, Palo Verde may purchase from the Company an additional $1,000,000 12% convertible debenture and additional warrants to purchase up to 10,000,000 shares of common stock of the Company at an exercise price of US$0.23 per share for a total payment of an additional $1,000,000. Prior to the consummation of any such additional purchase and pursuant to the Palo Verde Purchase Agreement, the Company has agreed to hold an annual stockholders meeting in 2012 to, among other things, submit to the stockholders a proposal to permit Palo Verde to convert the Palo Verde Debenture and exercise the Warrants without the limitation of the Beneficial Ownership Limitation. Pursuant to the Securities Purchase Agreement dated as of Dec. 29, 2011, between the Company and TCA Global Credit Master Fund, LP, the Company's issuance of the Palo Verde Debenture required the prior consent of TCA, which the Company received. Pursuant to the TCA Purchase Agreement, the Company sold to TCA a $1,000,000 Senior Secured Redeemable Debenture due Dec. 29, 2012. The Company received the proceeds of the sale of the TCA Debenture on Feb. 1, 2012. Interest on the outstanding principal amount of the TCA Debenture accrues at a rate of 5% per annum, and is payable by the Company on a monthly basis. Principal payments in the amount of US$83,333.33 are also required to be made monthly. The Company may, at its option, redeem the TCA Debenture at any time prior to maturity for an amount equal to the sum of the amount of principal then outstanding, all accrued interest and a redemption premium of 7% of the amount of principal then outstanding. The TCA Debenture contains customary events of default, affirmative covenants and negative covenants. Two Directors Resign On Aug. 13, 2012, both Mr. Bennett Shelton and Mr. William Grant resigned from their position as members of the board of directors of the Company. In connection with the closing of the Palo Verde Purchase Agreement, the board of directors of the Company agreed with Palo Verde to fill three of the vacancies on the board with individuals selected by Palo Verde. On Aug. 13, 2012, Palo Verde recommended each of Mr. Douglas B. MacGregor, Mr. James L. Ferraro and Mr. William Yuan to fill those vacancies and the board of directors of the Company elected each such individual to fill a vacancy on the board until the next annual meeting of shareholders of the Company and until such individual's respective successor is duly elected and qualifies, unless such individual sooner dies, retires or resigns. None of the new board members have been appointed to the Company's Audit Committee; however, it is anticipated that one or more of the new board members will be appointed to the Audit Committee in 2012. On July 31, 2012, Mr. MacGregor purchased from the Company 1,800,000 shares of common stock of the Company at a price of US$0.06 per share, and Mr. Ferraro purchased from the Company 600,000 shares of common stock of the Company at a price of US$0.06 per share. A copy of the Form 8-K is available for free at: http://is.gd/1iVJXT About American Natural American Natural Energy Corporation (TSX Venture: ANR.U) is a Tulsa, Oklahoma-based independent exploration and production company with operations in St. Charles Parish, Louisiana. The Company reported a net loss of $905,792 in 2011, compared with a net loss of $2.06 million in 2010. In its audit report accompanying the 2011 financial statements, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company incurred a net loss in 2011 and has a working capital deficiency and an accumulated deficit at Dec. 31, 2011. The Company's balance sheet at June 30, 2012, showed $17.11 million in total assets, $10.44 million in total liabilities and $6.67 million in total stockholders' equity. APEX DIGITAL: Cuts Deal With U.S. Trustee on Dismissal Bid ---------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California has approved an oral stipulation between Apex Digital Inc.; Peter C. Anderson, the U.S. Trustee for the Central District of California; and the Official Committee of Unsecured Creditors, in order to resolve the U.S. Trustee's motion to dismiss the Debtor's Chapter 11 case. Under the terms of the stipulation, the U.S. Trustee's motion is granted to the limited extent of mandating compliance with United States Trustee Guidelines. The Debtor will remain in full and timely compliance with United States Trustee requirements during the remaining pendency of the bankruptcy case. In the event that the Debtor later fails to be or stay in compliance with United States Trustee requirements, the U.S. Trustee will provide the Debtor a written Notice of Deficiency up to a maximum of three additional occasions. If the Debtor fails to cure within seven calendar days after the Notice of Deficiency, the U.S. Trustee may submit without further hearing, an application, declaration and proposed order, dismissing this case and granting the United States Trustee a judgment for any outstanding U.S. Trustee quarterly fees. As reported by the Troubled Company Reporter on May 24, the U.S. Trustee asked the Bankruptcy Court to convert the Chapter 11 case to one under Chapter 7 or, in the alternative, dismiss the case. Kenneth G. Lau, Esq., representing the U.S. Trustee, argued that: -- no disclosure statement and reorganization plan has been filed to date in the Debtor's case; -- the Debtor has failed to file monthly operating reports since Jan. 31, 2012; -- the Debtor has failed to pay the quarterly fees for the quarter ended March 31, 2012, amounting to $4,875. In addition, quarterly fees continue to accrue and will be due on July 31, 2012. About Apex Digital Walnut, California-based Apex Digital, Inc., was a leading producer and seller of consumer electronic products, including high-definition LCD televisions, home entertainment media devices, digital set top boxes and lighting products (e.g., solar powered lights), which are carried and sold in hundreds of retail outlets nationwide. Apex Digital filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 10-44406) on Aug. 17, 2010. Juliet Y. Oh, Esq., Lindley L. Smith, Esq., Philip A. Gasteier, Esq., at Levene, Neale, Bender, Rankin & Brill LLP, in Los Angeles, California, represent the Debtor. In its schedules, the Debtor disclosed $12.8 million in assets and $27.1 million in liabilities, as of the Petition Date. Rosendo Gonzalez was named Chapter 11 examiner in the bankruptcy case. Mr. Gonzalez retained C. John M. Melissinos, Esq., at Davidoff Gold LLP, as counsel. ARRAY BIOPHARMA: Files Form 10-K, Incurs $23.6-Mil. Loss in 2012 ---------------------------------------------------------------- Array BioPharma Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $23.58 million on $85.13 million of total revenue for the year ended June 30, 2012, a net loss of $56.32 million on $71.90 million of total revenue for the year ended June 30, 2011, and a net loss of $77.63 million on $53.88 million of total revenue for the year ended June 30, 2010 The Company's balance sheet at June 30, 2012, showed $108.07 million in total assets, $193.87 million in total liabilities, and a $85.80 million total stockholders' deficit. "If we are unable to obtain additional funding from these or other sources when needed, or to the extent needed, it may be necessary to significantly reduce the current rate of spending through further reductions in staff and delaying, scaling back, or stopping certain research and development programs, including more costly Phase 2 and Phase 3 clinical trials on our wholly owned programs as these programs progress into later stage development," the Company said in its annual report for the year ended June 30, 2012. "Insufficient liquidity may also require us to relinquish greater rights to product candidates at an earlier stage of development or on less favorable terms to us and our stockholders than we would otherwise choose in order to obtain up-front license fees needed to fund operations. These events could prevent us from successfully executing our operating plan and in the future could raise substantial doubt about our ability to continue as a going concern." A copy of the Form 10-K is available for free at: http://is.gd/Sadtlr About Array Biopharma Boulder, Colo.-based Array BioPharma Inc. is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small-molecule drugs to treat patients afflicted with cancer and inflammatory diseases. Array has four core proprietary clinical programs: ARRY-614 for myelodysplastic syndromes, ARRY-520 for multiple myeloma, ARRY-797 for pain and ARRY-502 for asthma. In addition, Array has 10 partner-funded clinical programs including two MEK inhibitors in Phase 2: selumetinib with AstraZeneca and MEK162 with Novartis. ARTE SENIOR: Files Schedules of Assets and Liabilities ------------------------------------------------------ Arte Senior Living LLC filed with the U.S. Bankruptcy Court for the District of Arizona its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $49,400,000 B. Personal Property $2,917,766 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $34,360,943 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $50,353 ----------- ----------- TOTAL $52,317,766 $34,411,296 A copy of the schedules is available for free at http://bankrupt.com/misc/ARTE_SENIOR_sal.pdf About Arte Senior Living Arte Senior Living L.L.C. owns and operates an independent and assisted living facility, known generally as the Arte Resort retirement community, located at 11415 North 114th Street, in Scottsdale, Arizona. The Property consists of approximately 128,514 square feet of rentable living space. The Property is managed by Encore Senior Living. Arte Senior Living filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-14993) in Phoenix on July 5, 2012. The Debtor estimated assets and liabilities of $10 million to $50 million. Judge George B. Nielsen Jr. oversees the case. John J. Hebert, Esq., at Polsinelli Shughart, P.C., serves as counsel to the Debtor. SMA Portfolio Owner L.L.C. is represented by lawyers at Greenberg Traurig, LLP. ARTE SENIOR: Syble Oliver Appointed as Patient Care Ombudsman ------------------------------------------------------------- The Hon. George B. Nielsen of the U.S. Bankruptcy Court for the District of Arizona appointed Syble Oliver Long Term Care Ombudsman Department of Economic Security Division of Aging and Adult Services 1789 W. Jefferson S/C 950A Phoenix, AZ 85007 Tel: (602) 542-6454 E-mail: SOliver@azdes.gov as patient care ombudsman for Arte Senior Living LLC. The Court has directed the Ilene J. Lashinsky, U.S. Trustee for Region 14, to appoint a patient care ombudsman in the Chapter 11 case of the Debtor. Ms. Oliver, as patient care ombudsman will, among other things: 1) monitor the quality of patient care provided to patients of the Debtor, to the extent necessary under the circumstances, including interviewing patients and physicians; 2) not later than 60 days after the date of this appointment, and not less frequently than at 60 day intervals thereafter, report to the court after notice to the parties in interest, at a hearing or in writing, regarding the quality of patient care provided to patients of the debtor; and 3) if the ombudsman determines that the quality of patient care provided to patients of the Debtors is declining significantly or is otherwise being materially compromised, file with the court a motion or a written report, with notice to the parties-in-interest immediately upon making the determination. To the best of U.S. Trustee's knowledge, Ms. Oliver has no adverse interest against the Debtor or the estate. About Arte Senior Living Arte Senior Living L.L.C. owns and operates an independent and assisted living facility, known generally as the Arte Resort retirement community, located at 11415 North 114th Street, in Scottsdale, Arizona. The Property consists of approximately 128,514 square feet of rentable living space. The Property is managed by Encore Senior Living. Arte Senior Living filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-14993) in Phoenix on July 5, 2012. The Debtor estimated assets and liabilities of $10 million to $50 million. Judge George B. Nielsen Jr. oversees the case. John J. Hebert, Esq., at Polsinelli Shughart, P.C., serves as counsel to the Debtor. SMA Portfolio Owner L.L.C. is represented by lawyers at Greenberg Traurig, LLP. The Debtor disclosed $52,317,766 in assets and $34,411,296 in liabilities as of the Chapter 11 filing. ATLANTIC COAST FINANCIAL: Bank Agrees to Consent Order With OCC ---------------------------------------------------------------- Atlantic Coast Financial Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $3.0 million on $5.1 million of net interest income for the three months ended June 30, 2012, compared with a net loss of $1.5 million on $5.4 million of net interest income for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $4.7 million on $10.1 million of net interest income, compared with a net loss of $4.9 million on $10.7 million of net interest income for the same period of 2011. The Company's balance sheet at June 30, 2012, showed $778.5 million in total assets, $734.5 million in total liabilities, and stockholders' equity of $44.0 million. Consent Order With OCC At June 30, 2012 and Dec. 31, 2011, Atlantic Coast Bank was classified as "well capitalized" under prompt corrective action requirements. However, the Bank operates under a Supervisory Agreement with the Office Thrift Supervision ("OTS"), the predecessor to the OCC, entered into in December 2010 and also received an individual minimum capital requirement ("IMCR") from the OTS on May 13, 2011. Under the IMCR, the Bank agreed to achieve and maintain a Tier 1 leverage ratio of 6.25% at June 30, 2011, and 7% at Sept. 30, 2011. The Bank's Tier 1 (core) capital to adjusted total assets was 5.36% at June 30, 2012, and therefore the Bank is not in compliance with the IMCR. According to the regulatory filing, in light of the IMCR and the losses the Company has incurred over the past four years, the Company's Board of Directors began a review of strategic alternatives late in 2011, which includes consideration of a potential business combination, rights offering or other capital- raising actions. "This process continues, however, there can be no assurances as to the outcome of these actions." On Aug. 10, 2012 the Board of Directors of the Bank agreed to a Consent order ("the Agreement") with its primary regulator, the OCC. The Agreement provides, among others, that by Dec. 31, 2012, the Bank must achieve and maintain a total risk based capital of 13% of risk weighted assets and Tier 1 capital of 9% of adjusted total assets. "If the Bank fails to achieve and maintain the required capital ratios by Dec. 31,2012, fails to submit a capital plan within 90 days of the date of the Agreement or fails to implement a written capital plan for which the OCC has provided a written determination of no supervisory objection, then, at the sole discretion of the OCC, the Bank may be deemed undercapitalized for purposes of the Agreement." "The Agreement replaces and therefore terminates the Supervisory Agreement entered into between the Bank and the Office of Thrift Supervision on Dec. 10, 2010." "As a result of entering into the Agreement to achieve and maintain specific capital levels, the Bank's capital classification under the Prompt Corrective Action("PCA") rules will be lowered to adequately capitalized, notwithstanding actual capital levels that otherwise may be deemed well capitalized under such rules." A copy of the Consent Order is available for free at: http://is.gd/WgxCS1 A copy of the Form 10-Q is available for free at: http://is.gd/go4mS0 Jacksonville, Florida-based Atlantic Coast Financial Corporation is the holding company for Atlantic Coast Bank, a federally chartered and insured stock savings bank. It is a community- oriented financial institution serving northeastern Florida and southeastern Georgia markets through 12 locations, with a focus on the Jacksonville metropolitan area. ATP OIL: Credit Suisse, DIP Lenders Want Plan in 11 Months ---------------------------------------------------------- ATP Oil & Gas Corporation disclosed it has negotiated with existing senior lenders led by Credit Suisse AG, as administrative agent, a senior secured priming, superpriority debtor-in- possession term loan facility in an aggregate principal amount of up to $617,600,000. The Debtor is seeking emergency consideration of its request to obtain the DIP financing, pay critical vendors, and other "first day" motions. The Debtor says the DIP financing will allow it to quickly complete the pipeline installation necessary to enable production at the Clipper Wells, two completed wells in Green Canyon Block 300 in the deepwater Gulf of Mexico. Despite its best efforts, ATP Oil's ongoing project construction costs and declining oil prices put it in the untenable position of running out of cash before it could complete the Clipper Wells pipeline project and generate the revenues necessary to remedy its liquidity position. The Debtor has more than $2 billion of debt and less than $10 million in cash as of the Petition Date. Upon interim approval of the DIP financing, the DIP Facility will provide access to roughly $80 million in incremental liquidity. The Debtor is also seeking approval to access cash collateral. ATP Oil said the primary reason for the reorganization began with the Macondo well blowout in April 2010 and the imposition beginning in May 2010 of the moratoria on drilling and related activities in the Gulf of Mexico. These events prevented ATP from bringing to production in 2010 and in early 2011 six development wells that would have added significant production to ATP Oil. As of the bankruptcy filing date, three of these wells are yet to be drilled. Terms of DIP Facility The Debtor prepetition received five indications of interest from potential DIP financing provider, although the first lien lenders and one of the large financial institutions provided DIP term sheets that met the Debtor's liquidity requirements. Following intensive bargaining, the Debtor selected a proposal from the existing firs lien lenders as the best offer. The DIP financing consists of (a) a new money term loan facility in the aggregate principal amount of $250,000,000; and (b) a refinancing facility in the aggregate principal amount of up to $367,600,000. The mechanics of the refinancing facility provide that for each $1 of commitment of any DIP Lender in respect of the new money facility, such lender shall be entitled to refinance, pursuant to a cashless exchange of loans, after giving effect to the capitalization of the certain fees, $1.471 of loans under the Debtor's existing first-lien credit facility. The interest rates under the New Money DIP Facility and Refinancing Facility will be, at the option of ATP, Adjusted LIBOR with a 1.50% floor plus 8.50% or at Credit Suisse's Alternate Base Rate plus 7.50%. The loans under the New Money Facility will be issued at an original issue discount of 98.0% of the principal amount thereof, and the DIP Lenders will be entitled to a commitment fee of 4.25% per annum on the undrawn amounts thereunder. Under the terms of the DIP Facility, the DIP Lenders will receive (i) joint and several superpriority claim status, (ii) a perfected first priority lien on all property of the Debtor and the Debtor's estate; (iii) a perfected junior lien on all property of the Debtor and the Debtor's estate; and (iv) a perfected first priority, senior priming lien on all property of the Debtor and the Debtor's estate. The DIP Facility also is subject to a customary carve-out of up to $3 million for the payment of professional fees and fees of the United States Trustee. The only liens that the DIP Facility seeks to prime would be liens, if any exist, on prepetition collateral that are junior thereto (which are already behind nearly $2 billion in secured debt). One Year to Propose Plan The DIP facility will mature in 18 months or earlier in an event of default. The DIP lenders have required the Debtor to retain an individual with experience in corporate restructuring and in the oil and gas industry as chief restructuring officer. Within 25 days after the Petition Date, the Debtor is required to file all necessary pleadings with respect to the retention of the CRO. Failure to obtain approval of the CRO retention within 60 days after the Petition Date is an event of default under the DIP loan. The DIP facility further requires the Debtor to: (i) on or before 330 days after the Petition Date, file a Plan of Reorganization and disclosure statement acceptable to the DIP Lenders, (ii) on or before 375 days after the Petition Date, either (x) obtain Bankruptcy Court approval of the disclosure statement or (y) obtain approval of bid procedures for a sale of the Debtor's assets on terms acceptable to the DIP Lenders, or (iii) on or before 420 days after the Petition Date, either (x) obtain an order confirming the Plan or (y) obtain an order approving the asset sale. Cravath, Swaine & Moore LLP serves as counsel to the DIP Agent. Netherland Sewell & Associates, Inc., serves as consultants to CSM. According to Bloomberg News, ATP said it owes $365 million on a first-lien loan with Credit Suisse as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. In addition, there is $35 million outstanding on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers are owed $147 million. Bloomberg also reports that an intercreditor agreement prohibits the second-lien noteholders from objecting to the new financing. The agreement also limits the demands that the junior lenders can make for so-called adequate protection. ATP said the senior lenders' collateral is worth more than enough to pay the first- lien debt in full. ATP reported a net loss of $145.1 million in the first quarter on revenue of $146.6 million. Income from operations in the quarter was $11.8 million. For 2011, the net loss was $210.5 million on revenue of $687.2 million. The year's operating income was $152.7 million. The second-lien notes last traded on Aug. 17 for 29.625 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The notes lost 61 percent of their value since May 1. During the past three years, ATP's stock traded as high as $23.97 on April 15, 2010. The closing price on Aug. 17 was about 46 cents in trading on the Nasdaq Stock Market. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. The Company trades publicly as ATPG on the NASDAQ Global Select Market. The Company's balance sheet at March 31, 2012, showed $3.63 billion in total assets, $3.48 billion in total liabilities, $115.81 million in redeemable noncontrolling interest, $71.18 million in 8% convertible perpetual preferred stock, and a $34.44 million total shareholders' deficit. ATP OIL: Updated Case Summary & Creditors' List ----------------------------------------------- Debtor: ATP Oil & Gas Corporation 4600 Post Oak Place, Suite 100 Houston, TX 77027 Bankruptcy Case No.: 12-36187 Chapter 11 Petition Date: Aug. 17, 2012 Court: U.S. Bankruptcy Court Southern District of Texas Type of Business: ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. The Company trades publicly as ATPG on the NASDAQ Global Select Market. Debtors' Bankruptcy Counsel: Charles S. Kelley, Esq. MAYER BROWN LLP 700 Louisiana Street, Suite 3400 Houston, TX 77002-2730 Tel: (713) 238-3000 Fax: (713) 238-4888 http://www.mayerbrown.com - and - Stuart M. Rozen, Esq. Craig E. Reimer, Esq. Rue K. Toland, Esq. MAYER BROWN LLP 71 South Wacker Drive Chicago, IL 60606 Tel: (312) 782-0600 Fax: (312) 701-7711 http://www.mayerbrown.com Debtors' Conflicts Counsel: MUNSCH HARDT KOPF & HARR, P.C. Debtors' Financial Advisors: OPPORTUNE LLP Debtors' Investment Bank: JEFFERIES & COMPANY Debtors' Claims and Noticing Agent: KURTZMAN CARSON CONSULTANTS LLC Total Assets: $3,638,399,000 as of March 31, 2012 Total Liabilities: $3,485,838,000 as of March 31, 2012 The petition was signed by Albert L. Reese, Jr., chief financial officer. ATP Oil & Gas Corporation's List of Its 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bluewater Industries, LP Trade Debt $53,813,614 5300 Memorial Drive, Suite 550 Houston, TX 77007 Nabors Offshore Corporation Trade Debt $15,425,820 P.O. Box 973531 Dallas, TX 75397 Schlumberger Technology Trade Debt $11,993,843 Corporation P.O. Box 201193 Houston, TX 77216-1193 Greystar Corporation Dept. 132 Trade Debt $4,883,568 P.O. Box 4346 Houston, TX 77210-4346 Seacor Marine, Inc. Trade Debt $4,584,169 P.O. Box 8500-6315 Philadelphia, PA 19178-6315 Hornbeck Offshore Services, Trade Debt $3,792,224 LLC P.O. Box 54863 New Orleans, LA 70154-4863 Harvey Gulf International Trade Debt $2,885,134 Marine, Inc. 701 Poydras St. Ste 3700 New Orleans, LA 70139 Bison Capital Corporation Lawsuit Judgment $2,766,527 Attn: Jeffrey W. Gutchess, Esq. 111 Brickell Avenue; Miami, FL 33139 Bristow U.S. LLC Trade Debt $2,742,359 Dept 890149 P.O. Box 120149 Dallas, TX 75312-0149 M-I Swaco, LLC Trade Debt $2,659,471 P.O. Box 200132 Dallas, TX 75320-0132 Era Helicopters LLC Trade Debt $1,740,621 Lock Box #3156 P.O. Box 8500-3156 Philadelphia, PA 19178-3156 Seamar Divers, Inc. Trade Debt $1,701,430 P.O. Box 740976 Houston, TX 77274 C-Port/Stone LLC Trade Debt $1,469,053 Dept. 211 P.O. Box 4869 Houston, TX 77210-4869 Omega Natchiq Trade Debt $1,270,235 P.O. Box 203320 Dallas, TX 75320-3320 Warrior Energy Services Corp. Trade Debt $1,255,717 Dept. 2114 P.O. Box 122114 Dallas, TX 75312-2114 Dril-Quip, Inc. Trade Debt $1,170,422 P.O. Box 973669 Dallas, TX 75397-3669 Apache Corporation Contract $1,118,927 P. O. Box 840094 Dallas, TX 75284-0094 Oceaneering International, Inc. Trade Debt $1,065,711 C/O Citibank, N.A. P.O. Box 7247-8051 Philadelphia, PA 19170-8051 Smith International, Inc. Trade Debt $1,012,059 P.O. Box 200760 Dallas, TX 75320-0760 Frank's Casing Crew Trade Debt $1,007,852 P.O. Box 51729 Lafayette, LA 70505-1729 Offshore Energy Services Inc. Trade Debt $949,898 P.O. Box 53508 Lafayette, LA 70505 Quail Tools, L.L.P. Trade Debt $940,672 P.O. Box 10739 New Iberia, LA 70562-0739 Martin Energy Services LLC Trade Debt $925,823 Dept. 30616 P.O. Box 11407 Birmingham, AL 35246-3061 PricewaterhouseCoopers LLP Trade Debt $900,277 P.O. Box 952282 Dallas, TX 75395-2282 Supreme Service & Specialty Trade Debt $886,434 Co., Inc. 204 Industrial Ave. C Houma, LA 70363 Patton Boggs LLP Trade Debt $831,100 Attn: Mr. Robert P. Thibault 1801 California Street Suite 4900 Denver, CO 80202 Superior Energy Services, L.L.C. Trade Debt $819,895 Dept 2203 P.O. Box 122203 Dallas, TX 75312-2203 Gulf Coast Chemical, LLC Trade Debt $784,690 220 Jacqulyn Street Abbeville, LA 70510 Burnham Contract $700,000 c/o Edward Kovalik (KLR Group) 510 Madison 10th Floor New York, NY 10022 Champion Technologies Trade Debt $697,277 P.O. Box 2243 Houston, TX 77252-2243 ATP OIL: Moody's Lowers PDR to 'D' on Chapter 11 Filing ------------------------------------------------------- Moody's Investors Service downgraded the probability of default rating (PDR) for ATP Oil & Gas Corporations (ATP) to D in response to the company's announcement on August 17, 2012 that it had filed voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code. Moody's also lowered the company's Corporate Family Rating (CFR) and the secured second lien note rating to Ca from Caa2. The rating outlook was changed to negative. Ratings Rationale Shortly following these rating actions, Moody's will withdraw all of ATP's ratings (refer to Moody's ratings withdrawal policy on moodys.com). ATP is seeking Court approval of a debtor in possession (DIP) financing facility of $617.6 million as it works through the bankruptcy process. The Ca rating of the 11.875% notes reflects the noteholders' secured second-lien position and subordinated claim to ATP's assets under Moody's Loss Given Default (LGD) Methodology framework. In Moody's LGD waterfall, the proposed super-priority DIP facility lenders rank first, the secured first- lien credit facility lenders rank second, followed by the secured second-lien position of the 11.875% notes. The principal methodology used in rating ATP 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. ATP Oil & Gas Corporation (ATP) is a 100% offshore oil and gas exploration and production (E&P) company based in Houston, Texas. BERNARD L. MADOFF: SIPC Cuts Fee Request by Lawyers --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Securities Investor Protection Corp. is seeking reductions to fees requested by the trustee liquidating Bernard L. Madoff Investment Securities LLC. According to the report, to receive the Madoff assignment, SIPA trustee Irving Picard and his principal lawyers from Baker & Hostetler LLP agreed with SIPC to cut their standard rate by 10%. When the time came for seeking final approval for fees covering the period Oct. 1, 2011, through Jan. 31, 2012, the firm voluntarily cut the fees by an additional $723,000 on top of the 10% reduction that amounted to $5.3 million. The report relates SIPC reviewed the fee request and decided it should be reduced by another $1.2 million. In addition, SIPC told the bankruptcy judge in a filing last week that an additional 10% should be held back and paid only later in the case. Totaling all the deductions and holdbacks, SIPC recommended that Mr. Picard and his firm be paid $43.3 million. SIPC recommended that $16 million held back from previous fee requests be paid at this time. The report notes that SIPC told the judge that he is obliged to pay the recommended amounts under a provision in the Securities Investor Protection Act giving SIPC the right to determine fees in cases where there is no reasonable expectation for SIPC to recover the costs of the brokerage liquidation. The hearing on payment of fees is set for Aug. 29. In a brokerage liquidation, expenses are paid by the SIPC fund and don't come out of the money collected for distributions to creditors. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) The SIPA Trustee has said that as of March 31, 2012, through prepetition litigation and other settlements, he has successfully recovered, or reached agreements to recover, more than $9 billion -- over 50% of the principal lost in the Ponzi scheme by those who filed claims -- for the benefit of all customers of BLMIS. The liquidation has so far has cost the Securities Investor Protection Corp. $1.3 billion, including $791 million to pay a portion of customers' claims. Mr. Picard has so far made only one distribution in October of $325 million for 1,232 customer accounts. Uncertainty created by the appeals has limited Mr. Picard's ability to distribute recovered funds. Outstanding appeals include the $5 billion Picower settlement and the $1.025 billion settlement. BERNARD L. MADOFF: Fights Dismissal of Fraud Suits vs. Foreigners ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Irving Picard, the trustee liquidating Bernard L. Madoff Investment Securities LLC, is trying to avoid dismissal of fraudulent-transfer lawsuits against foreigners and has an agreement to hold up completion of a settlement by the New York Attorney General. The report relays that on Aug. 17, Mr. Picard filed his brief in district court opposing dismissal of dozens of lawsuits filed against foreigners. The foreigners contend fraudulent transfer law can't be applied outside the U.S., thus immunizing them from being required to return fictitious profits that Madoff paid out before bankruptcy. The case will turn on the interpretation given by U.S. District Judge Jed Rakoff to a 2010 U.S. Supreme Court decision called Morrison v. National Australia Bank. Judge Rakoff removed the lawsuit from bankruptcy court to decide threshold issues such as the extraterritorial applicability of U.S. fraudulent transfer law. According to the report, Mr. Picard contends Morrison isn't applicable because it involved a lawsuit where a foreign plaintiff was suing foreign and U.S. defendants regarding securities sold on foreign exchanges. He says the Supreme Court didn't intend to immunize foreigners entirely from being sued under U.S. securities laws. Mr. Picard also points to Section 541 of the Bankruptcy Court where the trustee has power over property of the estate "wherever located." Courts, Mr. Picard says, have interpreted the language as an as indication of congressional intent for U.S. bankruptcy law to have foreign application. If foreign defendants are granted dismissal, Mr. Picard argues that foreigners will be able to receive distributions from U.S. bankruptcies while being absolved from being required to return fraudulently transferred property, according to the report. The report discloses that the foreign defendants will file another set of papers on Aug. 31. Judge Rakoff will hold a hearing for oral argument on Sept. 21. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) The SIPA Trustee has said that as of March 31, 2012, through prepetition litigation and other settlements, he has successfully recovered, or reached agreements to recover, more than $9 billion -- over 50% of the principal lost in the Ponzi scheme by those who filed claims -- for the benefit of all customers of BLMIS. The liquidation has so far has cost the Securities Investor Protection Corp. $1.3 billion, including $791 million to pay a portion of customers' claims. Mr. Picard has so far made only one distribution in October of $325 million for 1,232 customer accounts. Uncertainty created by the appeals has limited Mr. Picard's ability to distribute recovered funds. Outstanding appeals include the $5 billion Picower settlement and the $1.025 billion settlement. BERNARD L. MADOFF: Has Deal With NY Atty General on Merkin Case --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Irving Picard, the trustee liquidating Bernard L. Madoff Investment Securities LLC, won an agreement where New York Attorney General Eric Schneiderman won't attempt go to ahead with a $410 million settlement with a Madoff investor named J. Ezra Merkin. The report recounts that Mr. Picard sued Mr. Schneiderman in bankruptcy court on Aug. 1 contending that New York State's top lawyer is recovering on claims that belong to all Madoff customers and that only the Madoff trustee can pursue. Mr. Schneiderman told Mr. Picard that he intends to have the suit moved from bankruptcy court to U.S. district court. According to the report, the agreement requires Mr. Schneiderman to file his transfer papers by Aug. 31. The attorney general agreed that he will not take any steps to carry out the settlement or transfer any of the $410 million. In return, Mr. Picard agreed not to go ahead with a scheduled Aug. 22 hearing for a preliminary injunction preventing Mr. Schneiderman from completing the settlement. The lawsuit with Schneiderman is Picard v. Schneiderman, 12-01778, (Bankr. S.D.N.Y.) About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) The SIPA Trustee has said that as of March 31, 2012, through prepetition litigation and other settlements, he has successfully recovered, or reached agreements to recover, more than $9 billion -- over 50% of the principal lost in the Ponzi scheme by those who filed claims -- for the benefit of all customers of BLMIS. The liquidation has so far has cost the Securities Investor Protection Corp. $1.3 billion, including $791 million to pay a portion of customers' claims. Mr. Picard has so far made only one distribution in October of $325 million for 1,232 customer accounts. Uncertainty created by the appeals has limited Mr. Picard's ability to distribute recovered funds. Outstanding appeals include the $5 billion Picower settlement and the $1.025 billion settlement. BERWIND REALTY: Special Counsel OK'd for PMC Avoidance Lawsuit -------------------------------------------------------------- The Hon. Brian K. Tester of the U.S. Bankruptcy Court for the District of Puerto Rico granted Berwind Realty, LLC, permission to employ Fuentes Law Offices as special counsel. As reported by the Troubled Company Reporter on July 19, 2012, Noreen Wiscovitch Rentas, Esq., the Chapter 7 Trustee appointed in the case of PMC Marketing Corp. (Case No. 09-2048), filed on March 2, 2012, about 124 complaints of avoidable actions. One of those complaints is filed by Ms. Rentas against Berwind Realty. The Debtor's court-appointed counsel is unable to represent the Debtor in the adversary proceedings since he acted as counsel for PMC's Chapter 11 proceedings prior to the conversion of that case to Chapter 7. Fuentes Law Offices agreed to represent the Debtor on the basis of a $1,987 retainer, against which Fuentes will bill on the basis of $200 per hour. About Berwind Realty Berwind Realty, LLC, filed a Chapter 11 petition (Bankr. D. P.R. Case No. 12-02701) in Old San Juan, Puerto Rico, on April 5, 2012. Berwind Realty, a real estate firm, scheduled assets of $53.8 million and liabilities of $58.1 million. Saleh Yassin signed the petition as president. Charles A. Cuprill, PSC Law Offices, serves as bankruptcy counsel. BIOLIFE SOLUTIONS: CFO's Salary Hiked to $180,000 Per Year ---------------------------------------------------------- The Board of Directors of Biolife Solutions, Inc., increased the compensation of Daphne Taylor, the Company's Chief Financial Officer, to $180,000 per year, effective Sept. 1, 2012. About BioLife Solutions Bothell, Washington-based BioLife Solutions, Inc. develops and markets patented hypothermic storage and cryo-preservation solutions for cells, tissues, and organs, and provides contracted research and development and consulting services related to optimization of biopreservation processes and protocols. The Company reported a net loss of $1.95 million in 2011, compared with a net loss of $1.98 million in 2010. The Company's balance sheet at March 31, 2012, showed $1.86 million in total assets, $13.29 million in total liabilities and a $11.43 million in total shareholders' deficiency. Following the 2011 results, Peterson Sullivan LLP, in Seattle, Washington, expressed substantial doubt about BioLife Solutions' ability to continue as a going concern. The independent auditors noted that the Company has been unable to generate sufficient income from operations in order to meet its operating needs and has an accumulated deficit of $54 million at Dec. 31, 2011. BIOZONE PHARMACEUTICALS: Q1 Net Loss Revised to $9.39-Mil. ---------------------------------------------------------- Biozone Pharmaceuticals, Inc., amended its quarterly report on Form 10-Q to restate and amend the Company's previously issued and unaudited interim financial statements and related financial information as of March 31, 2012, and for the three months ended March 31, 2012, which was originally filed with the Securities and Exchange Commission on May 21, 2012. During the Company's review of the interim financial statements for the three and six months ended June 30, 2012, the Company determined that the financial statements contained a misstatement that needed to be corrected. Specifically, the Company failed to record a Beneficial Conversion Feature for the OPKO Notes issued on Feb. 24, 2012, which provide for a rate of conversion that is below market value of the common stock. The BCF results in a charge to interest expense of $5,750,000 that should have been recorded in the quarter ended March 31, 2012. The carrying value of the OPKO Notes has been recorded net of the discount related to the warrants issued with the notes and with no further reduction for the BCF. In addition, while not a cause of the restatement, management believed that certain expense items should be disclosed as a separate line item in the statement of operations and classified as selling expenses, while certain other expenses should be included in the cost of goods sold line item and have been reclassed to those accounts. The restated statement of operations reflects a net loss of $9.39 million on $3.51 million of sales for the three months ended March 31, 2012. The Company originally reported a net loss of $3.64 million on $3.51 million of sales for that period. The restatement had no effect on the Company's balance sheet at March 31, 2012. A copy of the amended Form 10-Q is available for free at: http://is.gd/yn5e8h About Biozone Pharmaceuticals Biozone Pharmaceuticals, Inc., formerly, International Surf Resorts, Inc., was incorporated under the laws of the State of Nevada on Dec. 4, 2006, to operate as an internet-based provider of international surf resorts, camps and guided surf tours. The Company proposed to engage in the business of vacation real estate and rentals related to its surf business and it owns the Web site isurfresorts.com. During late February 2011, the Company began to explore alternatives to its original business plan. On Feb. 22, 2011, the prior officers and directors resigned from their positions and the Company appointed a new President, Director, principal accounting officer and treasurer and began to pursue opportunities in medical and pharmaceutical technologies and products. On March 1, 2011, the Company changed its name to Biozone Pharmaceuticals, Inc. Since March 2011, the Company has been engaged primarily in seeking opportunities related to its intention to engage in medical and pharmaceutical businesses. On May 16, 2011, the Company acquired substantially all of the assets and assumed all of the liabilities of Aero Pharmaceuticals, Inc., pursuant to an Asset Purchase Agreement dated as of that date. Aero manufactures markets and distributes a line of dermatological products under the trade name of Baker Cummins Dermatologicals. On June 30, 2011, the Company acquired the Biozone Labs Group which operates as a developer, manufacturer, and marketer of over- the-counter drugs and preparations, cosmetics, and nutritional supplements on behalf of health care product marketing companies and national retailers. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Paritz and Company. P.A., in Hackensack, N.J., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company does not have sufficient cash balances to meet working capital and capital expenditure needs for the next twelve months. In addition, as of Dec. 31, 2011, the Company has a shareholder deficiency and negative working capital of $4.37 million. The continuation of the Company as a going concern is dependent on, among other things, the Company's ability to obtain necessary financing to repay debt that is in default and to meet future operating and capital requirements. Biozone reported a net loss of $5.45 million in 2011, compared with a net loss of $319,813 in 2010. The Company's balance sheet at June 30, 2012, showed $9.07 million in total assets, $13 million in total liabilities, and a $3.93 million total shareholders' deficiency. BLUE BUFFALO: S&P Gives 'B' Corp. Credit Rating; Outlook Positive ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Wilton, Conn.-based Blue Buffalo Co. Ltd., a manufacturer and marketer of pet food. The outlook is positive. "We also assigned our 'B+' issue-level rating to Blue Buffalo's $390 million senior secured credit facilities, which consist of a $40 million revolving credit facility due 2017 and a $350 million term loan B due 2019. The recovery rating on these facilities is '2', reflecting our expectation that lenders would receive substantial recovery (70%-90%) in the event of a default. We understand that the company will use all of the gross proceeds from the term loan to fund a special dividend to its shareholders," S&P said. "Pro forma for the transaction, we estimate Blue Buffalo will have about $350 million in total debt outstanding," S&P said. "The ratings on Blue Buffalo reflect our view that the company's financial risk profile is 'highly leveraged' and its business risk profile is 'vulnerable' under our criteria. 'Key credit factors in our assessment of Blue Buffalo's business risk profile include its narrow product focus; customer, supplier, and geographic concentration; and the company's small size relative to its financially stronger and larger competitors," said Standard & Poor's credit analyst Jeffrey Burian. "We also considered the benefits of Blue Buffalo's good market position and participation in the faster growing natural segment of the U.S. pet food industry, as well as the somewhat nondiscretionary and recession- resistant nature of pet food." "Blue Buffalo has a narrow product focus as a manufacturer and marketer of pet food. Primary products include dry and wet types of dog and cat food, and all products are sold under the Blue Buffalo brand name with several formulations. The company believes it has the leading position in the 'natural' pet food segment (defined based on ingredients), which it believes represents 40% of the faster growing $6 billion 'pet specialty' segment of U.S. pet food sales. However, Blue Buffalo competes against larger, financially stronger competitors offering premium brands such as Colgate-Palmolive (Science Diet brand), Mars (Nutro and Royal Canin), Nestle (Pro Plan), and Procter & Gamble (Iams and Eukanuba). Blue Buffalo has been able to increase its sales and market share through successful innovation in its products and marketing," S&P said. "Significant customer concentration exists, with pet specialty retailers PetSmart and Petco combined accounting for the majority of Blue Buffalo's sales during 2011. Although there is also some supplier concentration, we believe this will diminish as the company moves from its current 100% co-packer manufacturing to a hybrid model given plans to bring its first owned plant on-line in 2015. The company also lacks geographic diversity, with about 95% of sales in the U.S. and the remainder in Canada. However, pet food is not a very discretionary product, and sales, including premium items, tend to remain fairly stable even during economic downturns," S&P said. "We believe Blue Buffalo is exposed to commodity cost volatility, which it has largely addressed through supply contracts and product price increases, given the relatively low price elasticity of natural pet foods as a premium product," S&P said. Blue Buffalo has maintained its trend of rapid, yet diminishing, growth rates off of an initial relatively small base. Sales of about $352 million in 2011 grew 83% relative to 2010. For the same period, EBITDA increased by more than 150% as the company realized operating leverage benefits relating to its increasing scale. This trend continued into the first half of 2012 as sales increased more than 60% compared with the first half of 2011. "Blue Buffalo's highly leveraged financial risk profile reflects the company's substantial increase in debt and aggressive financial policy following its proposed debt-financed special dividend to shareholders. Pro forma for this transaction, we estimate the company's credit measures will be close to indicative ratios for an 'aggressive' financial risk descriptor, which includes a ratio of lease-adjusted total debt to EBITDA of 4x to 5x and a ratio of adjusted funds from operations (FFO) to total debt of 12% to 20%," S&P said. "Our positive rating outlook on Blue Buffalo reflects our expectation that it will maintain adequate liquidity while continuing to improve operating performance and strengthening credit measures over the near term. We could raise the ratings if the company is able to achieve and sustain adjusted leverage close to 4x and adjusted FFO to debt approaching 20%, and the covenant cushion remains at or above 15%. We estimate this would require little moderation in recent sales growth rates and EBITDA margins in the low- to mid-20% area," S&P said. "We would consider revising the outlook to stable if the company's adjusted leverage remains between 4x and 5x, its ratio of FFO to debt is near 12%, and the covenant cushion remains at or above 15%. We estimate this could occur if the sales growth rate declined to about 20% over the next year and EBITDA margin remained unchanged," S&P said. BOSTON GENERATING: Trustee Sues Ex-Parent to Recoup $60 Million --------------------------------------------------------------- Jacqueline Palank at Dow Jones' Daily Bankruptcy Review reports that Boston Generating LLC's former parent, US Power Generating Co., drained it of some $60 million in management fees while it was 'hopelessly insolvent,' according to a new lawsuit seeking to claw back those funds. About Boston Generating New York-based Boston Generating, LLC, owns nearly 3,000 megawatts of mostly modern natural gas-fired power plants in the Boston area. Privately held Boston Generating is an indirect subsidiary of US Power Generating Co., and considers itself as the third- largest fleet of plants in New England. Boston Generating filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-14419) on Aug. 18, 2010. Boston Generating estimated its assets and debts at more than $1 billion as of the Petition Date. EBG Holdings LLC; Fore River Development, LLC; Mystic, LLC; Mystic Development, LLC; BG New England Power Services, Inc.; and BG Boston Services, LLC, filed separate Chapter 11 petitions. D. J. Baker, Esq., at Latham & Watkins LLP, serves as bankruptcy counsel for the Debtors. JPMorgan Securities is the Debtors' investment banker. Perella Weinberg Partners, LP, is the Debtors' financial advisor. Brown Rudnick LLP is the Debtors' regulatory counsel. FTI Consulting, Inc., is the Debtors' restructuring consultant. Anderson Kill & Olick, P.C., is the Debtors' conflicts counsel. The Garden City Group, Inc., is the Debtors' claims agent. The Official Committee of Unsecured Creditors tapped the law firm of Jager Smith P.C. as its counsel. BRANSON HOTELS: Marshall Hotels Adds 2 Receiverships ---------------------------------------------------- Marshall Hotels & Resorts, Inc. has added two management contracts and two receiverships to its growing portfolio. The managed hotels include the newly opened 113-room Hampton Inn and Suites in the resort town of Ocean City, Md., and the 122-room Country Inns and Suites at the Louisville, Ky. airport. The two receivership properties, also managed by Marshall, are independent hotels located in Branson, Mo. "There is significant activity by owners seeking new management companies and from lenders who are accelerating the number of properties they are taking back," said Mike Marshall, president and CEO. "Of note, we see a sharp increase in interest from developers who have been largely on the sidelines the past four years. Although financing for new construction still remains difficult to obtain, deals are starting to get underwritten, and we expect to see a steady increase in this area due to our extensive expertise in both supervising construction and our track record in pre-opening and rapidly ramping up our hotels. "We were quite active in pre-opening actives for The Hampton Inn and Suites in Ocean City, which opened earlier this month," he said. "The property is on the bay and offers both an indoor and outdoor swimming pool. We expect this property to perform well. Our managed resort portfolio is enjoying its strongest summer in four years, a trend we see continuing." Marshall said the Louisville property will convert to the Four Points by Sheraton brand this fall, following an extensive renovation program that includes installing a full-service restaurant and bar. The management company is developing the restaurant concept, name and menu. The two Branson properties are in the limited-serviced segment and comprise 330 and 440 rooms respectively. "We have already conducted extensive training and have significantly improved operations and guest satisfaction at both hotels," he noted. "Working with the lender, we are reviewing suitable brand options for the hotels. We have strong relationships with all the major franchise brand families and currently are in negotiations." About Marshall Hotels & Resorts Salisbury, Md.-based Marshall Hotels & Resorts, Inc. -- http://www.marshallhotels.com/-- has special expertise in operating three- and four-star branded hotels and resorts, averaging 100 to 500 rooms, in urban and central business districts, as well as suburban/drive-to and resort locations. In addition, the company has a proven track record managing independent resort and unique urban properties. The company has managed a wide array of leading hotel brands, including those under the Hilton, Starwood, InterContinental Hotel Group, Hyatt, Choice and Wyndham flags. CAPITAL CITY: Court Dismisses Chapter 11 Case --------------------------------------------- The Hon. Nancy C. Dreher of the U.S. Bankruptcy Court for the District of Minnesota has dismissed Capital City Ventures, LLC's Chapter 11 bankruptcy case. The Debtor asked for the dismissal of its Chapter 11 case, saying, "The interests of all parties to this case are protected. All creditors holding valid prepetition or administrative expense claims in this case either will be paid upon dismissal or have agreed to take a note in payment of the claim." The Debtor said that the schedules show general unsecured claims held by non-affiliates totaling $294,401 which remain unpaid and unsecured claims of affiliates totaling $1,661,736. After consulting with the unsecured creditors, the Debtor agreed to pay these claims of non-affiliates: $45,708 in cash on dismissal, $22,904 by trade-outs with the Debtor or affiliates of the Debtor, and $104,201 by promissory notes. Administrative expenses, which are minimal, will be paid in the ordinary course of business, the Debtor stated. On April 12, 2012, the Court entered an order approving a Global Settlement Agreement between the Debtors and lender Mortgage Acquisition, LLC, which provided in relevant part that John Rupp, the chief manager of Debtor, can purchase the claim of the Lender in its entirety by the payment of $10,975,000 by June 11, 2012. The Purchase Price was paid at a closing on June 11, 2012. As part of that transaction, the Lender's claim against the Debtor was purchased by North American Bank. North American Bank agrees that this case should be dismissed. The Debtor said that prior to dismissal of the case it will pay, or provide for payment of, all U.S. Trustee fees payable or to be paid in the case. About Capital City Ventures Capital City Ventures, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Minn. Case No. 12-30630) on Feb. 6, 2012, in its hometown in St. Paul, Minnesota. The Debtor owns the Saint Paul Athletic Club Building in 340 Cedar Street, in St. Paul, Minnesota. Michael L. Meyer, Esq. at Ravich Meyer Kirkman McGrath Nauman & Tansey, serves as counsel to the Debtor. The petition was signed by John R. Rupp, chief manager. In its schedules, the Debtor disclosed $12,022,943 in total assets and $9,397,750 in total liabilities. CCI FUNDING I: Bankr. Court Has Jurisdiction on Trico Dispute ------------------------------------------------------------- Bankruptcy Judge Michael E. Romero said the Bankruptcy Court has constitutional authority to hear and render a final decision on all claims for relief as alleged in the lawsuit, JANICE A. STEINLE, Chapter 11 Trustee for the bankruptcy estate of CCI FUNDING I, LLC, a Delaware limited liability company, Plaintiff, v. TRICO REAL ESTATE, L.P., Defendant, Adv. Proc. No. 10-1418 (Bankr. D. Colo.). Prior to the bankruptcy filing, CCI made three loans to Trico in the total face amount of $9,175,000 pursuant to three separate promissory notes dated Sept. 28, 2007, and three separate loan agreements dated Sept. 28, 2007, between Trico, as Borrower, and CCI, as Lender. Charles Snider, III, in his capacity as president of Trico, executed each of the Promissory Notes and Loan Agreements. Each Promissory Note provided its principal outstanding balance would bear interest at the one-month LIBOR rate plus 4%, and all amounts outstanding under each Promissory Note would be due and payable on Dec. 28, 2008. The purpose of the Loans was funding to purchase certain real property and related improvements located in Kingwood, Harris County, Texas including certain condominium units, service units and related real property interests, in the Westminster House Condominiums, a 134-unit senior independent living facility. On June 4, 2010, Ms. Steinle commenced the adversary proceeding against Trico and James T. Markus as Chapter 11 trustee of the CCI estate. In an Amended Complaint, Ms. Steinle asserts two claims for relief: (1) judgment against Trico on the Promissory Notes in the principal amount of $8,470,102 plus accrued interest, late charges, attorneys' fees and costs; and (2) disallowance of Trico's proofs of claim in the CCIF and CCI cases. Trico denied any default on the Loans. On April 10, 2012, Trico filed a Statement of Non-Consent, stating "[a]t this time, Trico does not consent to the Court's constitutional authority." Trico cited the U.S. Supreme Court's opinion in Stern v Marshall may prevent the Bankruptcy Court from adjudicating this matter. A copy of the Court's Aug. 15, 2012 Order is available at http://is.gd/hKdOKXfrom 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. CHAMPION INDUSTRIES: Common Stock Delisted from NASDAQ ------------------------------------------------------ The NASDAQ Stock Market LLC notified the U.S. Securities and Exchange Commission regarding the removal from listing or registration of Champion Industries Inc.'s common stock on NASDAQ. About Champion Industries Champion Industries, Inc., is a commercial printer, business forms manufacturer and office products and office furniture supplier in regional markets in the United States. The Company also publishes The Herald-Dispatch daily newspaper in Huntington, WV. The Company's sales force sells printing services, business forms management services, office products, office furniture and newspaper advertising. Its subsidiaries include Interform Corporation, Blue Ridge, Champion Publishing, Inc., The Dallas Printing, The Bourque Printing, The Capitol, and The Herald- Dispatch. Champion's balance sheet at April 30, 2012, showed $58.28 million in total assets, $58.45 million in total liabilities and a $174,198 total shareholders' deficit. The Company reported a net loss of $3.97 million for the year ended Oct. 31, 2011, compared with net income of $488,134 during the prior year. CHINA GREEN: Reports $811,291 Net Income in Second Quarter ---------------------------------------------------------- China Green Energy Industries, Inc., filed its quarterly report on Form 10-Q, reporting net income of $811,291 on $10.9 million of revenues for the three months ended June 30, 2012, compared with a net loss of $18,447 on $7.9 million of revenues for the same period last year. For the six months ended June 30, 2012, the Company had net income of $1.2 million on $19.7 million of revenues, compared with a net loss of $340,075 on $11.2 million of revenues for the same period of 2011. The Company's balance sheet at June 30, 2012, showed $58.3 million in total assets, $53.4 million in total liabilities, and stockholders' equity of $4.9 million. The Company has a negative cash flow from operations of $1,147,592 for the period ended June 30, 2012. A copy of the Form 10-Q is available for free at: http://is.gd/I3X2I5 Located in Changzhou City, Jiangsu Province, China, China Green Energy Industries, Inc., manufactures and distributes clean technology-based consumer products, including light electric vehicles, or LEVs, and cryogen-free refrigerators. The Company also manufactures and distributes network and High-Definition Multimedia Interface, or HDMI, cables. * * * As reported in the TCR on April 23, PKF, in San Diego, Calif., expressed substantial doubt about China Green Energy'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 experienced negative cash flows from operations and is dependent upon future financing in order to meet its planned operating activities. CHURCH STREET: Robert H. Welhoelter Approved as Co-Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Tennessee authorized Church Street Health Management, LLC, now known as, CS DIP, LLC, et al., to employ Robert H. Welhoelter as co-bankruptcy counsel effective as of the Petition Date. As reported in the Troubled Company Reporter on July 26, 2012, Mr. Welhoelter serves as the Debtors' co-bankruptcy counsel effective as of the Petition Date. Early on in the Chapter 11 cases, the Debtors' primary bankruptcy counsel, Waller Lansden Dortch & Davis LLP, included Mr. Welhoelter in its retention application and disclosures. Recently, the U.S. Trustee requested that Mr. Welhoelter be separately retained as co-counsel with the retention to be effective as of the Petition Date. Mr. Welhoelter will, among other things: a. advise the Debtors regarding the requirements of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, and the requirements of the U.S. Trustee pertaining to the administration of the Debtors' estates; b. advise and represent the Debtors concerning the rights and remedies of their estates in regards to the assets of the estates; and c. prepare motions, applications, answers, orders, memoranda, reports, and other documents in connection with the administration of the Debtors' estates. To the best of the Debtors' knowledge, Mr. Welhoelter does not hold nor represent any interest adverse to the Debtors' estates. Mr. Welhoelter disclosed that it has not received any retainer payments from the Debtors during his employment. As of the Petition Date, Mr. Welhoelter was not a creditor of the Debtors' estates, having been paid in full through retainer funds held by Waller Lansden Dortch & Davis, LLP, the Debtors' counsel. About Church Street Church Street Health Management, LLC, a provider of management services for 67 dental practices in 22 states, filed a Chapter 11 petition (Bankr. M.D. Tenn. Case No. 12-01573) in Nashville, Tennessee on Feb. 20, 2012. The following day, four affiliates, Small Smiles Holding Company, LLC, Forba NY, LLC, EEHC, Inc., and Forba Services, LLC, filed their Chapter 11 petitions (Case Nos. 12-01574 to 12-01577). As of the Petition Date, the Debtors' assets have book value of $895 million, with debt totaling $303 million. There is about $131.5 million owing on first-lien obligations, plus $25.6 million on a second-lien obligation. There is an additional $152 million on three subordinated debts. The company's finances are structured to comply with Islamic Shariah financing regulations. In the Chapter 11 cases, the Debtors have engaged Waller Lansden Dortch & Davis, LLP as bankruptcy counsel, and Alvarez & Marsal Healthcare Industry Group, LLC, as financial and restructuring advisor. Martin McGahan, a managing director at A&M, will serve as chief restructuring officer of Church Street. Morgan Joseph TriArtisan, LLC, is the investment banker. Garden City Group is the claims and notice agent. Garrison Investment Group is providing funding for the Chapter 11 case. The credit agreement will provide the Debtor with up to an aggregate principal amount of $12 million in a revolving credit facility. Church Street Health Management LLC changed its name as a result of the sale of the business to existing first-lien lenders in exchange for $25 million in debt. The new name for the company in Chapter 11 is CS DIP LLC. U.S. Trustee for Region 8, has removed two creditors from the Official Unsecured Creditors Committee. Through the sale of assets approved by the Court, these two members no longer have debts against the Debtors. The Committee tapped Gilbert LLP as special insurance and mass tort counsel. CIG WIRELESS: Had $1.7 Million Net Loss in June 30 Quarter ---------------------------------------------------------- CIG Wireless Corp., filed its quarterly report on Form 10-Q, reporting a net loss of $1.7 million on $585,380 of revenues for the three months ended June 30, 2012, compared with net income of $336,416 on $578,872 of revenues for the same period last year. 2011. The results of operations referred to below for the nine months ended June 30, 2012, represents the combined results of operations for the predecessor entity for the period from Oct. 1, 2011, through Nov. 30, 2011, and the successor entity for the period from Dec. 1, 2011, through June 30, 2012. The acquisition of Communications Infrastructure Group, LLC, by CIG Wireless Corp. closed on Dec. 5, 2011. The CI Group's net loss for the nine-month period ended June 30, 2012, was $2.6 million, which compares to the net income of $233,605 for the nine month period ended June 30, 2011. During the nine month ended June 30, 2012, the CI Group had total revenues of $1.4 million. During the nine month period ended June 30, 2011, the CI Group had total revenues of $1.5 million. The Company's balance sheet at June 30, 2012, showed $20.1 million in total assets, $6.5 million in total liabilities, and stockholders' equity of $13.6 million. "The Company has a working capital deficit as of June 30, 2012. As shown in the accompanying financial statements, the Company has also incurred significant losses since inception. These conditions raise substantial doubt as to the Company?s ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/KaiCNY Atlanta-based CIG Wireless Corp., formerly known as Cyber Supply Inc., was incorporated in the State of Nevada on Feb. 12, 2008. The Company is fully engaged in the business of the management of towers and other wireless infrastructure. The Company now conducts its business and all operations through the CI Group. CLARE OAKS: Court Approves Jones Day as Special Bond Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Illinois authorized Clare Oaks to employ Jones Day as special bond counsel. As reported in the Troubled Company Reporter on Aug. 17, 2012, as special bond counsel, Jones Day will advise the Debtor with respect to certain matters regarding bonds issued by the Illinois Finance Authority in 2006 and the issuance of bonds or other similar financing instruments in connection with a chapter 11 plan, including: a) the review of due diligence materials provided to Jones Day by the Debtor and other parties necessary to enable Jones Day to render any bond counsel opinions required for the transaction, including an opinion that the interest on the Series 2012 Bonds is excludable from the gross income of the owners thereof for federal income tax purposes or that the Transaction would not adversely affect any exemption from federal income taxes to which the Series 2006 Bonds would otherwise be entitled; b) the preparation of authority proceedings authorizing the issuance of the Series 2012 Bonds and the execution of related documents by the authority, including any amendments to the Series 2006 Bond documents; and c) the drafting or review of certain bond documentation, including, as applicable, bond trust indentures, the loan agreements, the master trust indentures, mortgage and related amendments to the existing bond documents for the Series 2006 Bonds. John F. Bibby, Jr., a partner atJones Day, tells the Court that his and Robert Capizzi's hourly rates are $650. Other lawyers and paralegals may be assigned to work on the matter as needed. Their hourly rates range from $475 to $825. Mr. Bibby, assures the Court that Jones Day does not represent or hold any interest adverse to the Debtor or its estate with respect to the matters for which the Debtor proposes to retain Jones Day. About Clare Oaks Clare Oaks, an Illinois not-for-profit corporation organized under section 501(c)(3) of the Internal Revenue Code, operates a namesake continuing care retirement community in Bartlett, Illinois. Its members are the Sisters of St. Joseph of the Third Order of St. Francis, a Roman Catholic religious institute, who are elected and serving as the members of the Central Board of the Congregation. Clare Oaks is managed by CRSA/LCS Management LLC, an affiliate of Life Care Services LLC. Clare Oaks filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-48903) on Dec. 5, 2011. Judge Pamela S. Hollis presides over the case. David R. Doyle, Esq., George R. Mesires, Esq., and Patrick F. Ross, Esq., at Ungaretti & Harris LLP, in Chicago, serve as the Debtor's counsel. North Shores Consulting serves as the Debtor's operations consultant. Continuum Development Services and Alvarez & Marsal Healthcare Industry Group LLC serve as advisors. Alvarez & Marsal's Paul Rundell serves as the Chief Restructuring Officer. Sheila King Marketing + Public Relations serves as communications advisors. CliftonLarsonAllen is the Debtor's accountants. B.C. Ziegler and Company is the Debtor's proposed investment banker and financial advisor. In its petition, Clare Oaks estimated $100 million to $500 million in assets and debts. The petition was signed by Michael D. Hovde, Jr., president. Attorneys at Neal Wolf & Associates, LLC, represent the Official Committee of Unsecured Creditors as counsel. Wells Fargo, as master trustee and bond trustee, is represented by Daniel S. Bleck, Esq., and Charles W. Azano, Esq., at Mintz Levin Cohen Ferris Glovsky and Popeo PC; and Robert M. Fishman, Esq., and Allen J. Guon, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC. Sovereign Bank, the letters of credit issuer, is represented by John R. Weiss, Esq., at Duane Morris LLP. Senior Care Development LLC, the DIP Lender, is represented by William S. Fish, Jr., Esq., and Sarah M. Lombard, Esq., at Hinckley Allen & Snyder LLP. The Debtor intends to sell its Clare Oaks Campus to ER Propco Co, LLC aka Evergreen for $16,000,000, subject to higher and better offers. CLARE OAKS: U.S. Trustee Adds Robert Webb to Creditors' Panel ------------------------------------------------------------- Patrick S. Layng, U.S. Trustee for Region 11 amended the appointment of the Official Committee of Unsecured Creditors in the Chapter 11 case of Clare Oaks to reflect the addition of Robert Webb to the Committee. The Committee now comprises of: 1. PharMerica Drug Systems, LLC Attn: Phillip A. Martin c/o 101 South Fifth St., 27th Fl. Louisville, KY 40202 2. Pizzo & Associates, LTD Attn: Doug Bauer 136 Railroad Leland, IL 60531 3. Harold Koenen 769 Woodland Ct. Bartlett, IL 60103 4. Tom Maguire Clare Oaks - Suite 327 827 Carillon Dr. Bartlett, IL 60103 5. Lucille Merlihan 759 Woodland Ct. Bartlett, IL 60103 6. Robert Webb Clare Oaks -- No. 407 827 Carillion Drive Bartlett, IL 60103 About Clare Oaks Clare Oaks, an Illinois not-for-profit corporation organized under section 501(c)(3) of the Internal Revenue Code, operates a namesake continuing care retirement community in Bartlett, Illinois. Its members are the Sisters of St. Joseph of the Third Order of St. Francis, a Roman Catholic religious institute, who are elected and serving as the members of the Central Board of the Congregation. Clare Oaks is managed by CRSA/LCS Management LLC, an affiliate of Life Care Services LLC. Clare Oaks filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-48903) on Dec. 5, 2011. Judge Pamela S. Hollis presides over the case. David R. Doyle, Esq., George R. Mesires, Esq., and Patrick F. Ross, Esq., at Ungaretti & Harris LLP, in Chicago, serve as the Debtor's counsel. North Shores Consulting serves as the Debtor's operations consultant. Continuum Development Services and Alvarez & Marsal Healthcare Industry Group LLC serve as advisors. Alvarez & Marsal's Paul Rundell serves as the Chief Restructuring Officer. Sheila King Marketing + Public Relations serves as communications advisors. CliftonLarsonAllen is the Debtor's accountants. B.C. Ziegler and Company is the Debtor's proposed investment banker and financial advisor. In its petition, Clare Oaks estimated $100 million to $500 million in assets and debts. The petition was signed by Michael D. Hovde, Jr., president. Attorneys at Neal Wolf & Associates, LLC, represent the Official Committee of Unsecured Creditors as counsel. Wells Fargo, as master trustee and bond trustee, is represented by Daniel S. Bleck, Esq., and Charles W. Azano, Esq., at Mintz Levin Cohen Ferris Glovsky and Popeo PC; and Robert M. Fishman, Esq., and Allen J. Guon, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC. Sovereign Bank, the letters of credit issuer, is represented by John R. Weiss, Esq., at Duane Morris LLP. Senior Care Development LLC, the DIP Lender, is represented by William S. Fish, Jr., Esq., and Sarah M. Lombard, Esq., at Hinckley Allen & Snyder LLP. The Debtor intends to sell its Clare Oaks Campus to ER Propco Co, LLC aka Evergreen for $16,000,000, subject to higher and better offers. CLARE OAKS: Use of Cash for $50,000 APA Option Fee Payment Denied ----------------------------------------------------------------- The Hon. Donald R. Cassling of the U.S. Bankruptcy Court for the Northern District of Illinois denied Clare Oaks' request to use cash collateral for payment of an asset purchase agreement option fee. The Debtor requested for authorization to use cash collateral for the payment of a non-refundable extension fee of the asset purchase agreement in the amount of $50,000 to ER Propco CO, LLC, an Evergreen affiliate and the Debtor's proposed stalking horse bidder, to avoid the termination of the pending asset purchase agreement with Evergreen while the Debtor continues to negotiate the details of a potential joint plan of restructuring with the prepetition secured lenders, at the prepetition secured lenders' request. The Debtor related in its motion payment will prevent irreparable harm to the Debtor, its estate, and perhaps most importantly, the senior citizens residing on the Clare Oaks campus. Specifically, the payment to Evergreen will bind Evergreen to the current APA until Aug. 31, 2012, which will allow the Debtor to continue to explore the feasibility of jointly sponsoring a plan of reorganization with the secured lenders while not losing its "bird in the hand." About Clare Oaks Clare Oaks, an Illinois not-for-profit corporation organized under section 501(c)(3) of the Internal Revenue Code, operates a namesake continuing care retirement community in Bartlett, Illinois. Its members are the Sisters of St. Joseph of the Third Order of St. Francis, a Roman Catholic religious institute, who are elected and serving as the members of the Central Board of the Congregation. Clare Oaks is managed by CRSA/LCS Management LLC, an affiliate of Life Care Services LLC. Clare Oaks filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-48903) on Dec. 5, 2011. Judge Pamela S. Hollis presides over the case. David R. Doyle, Esq., George R. Mesires, Esq., and Patrick F. Ross, Esq., at Ungaretti & Harris LLP, in Chicago, serve as the Debtor's counsel. North Shores Consulting serves as the Debtor's operations consultant. Continuum Development Services and Alvarez & Marsal Healthcare Industry Group LLC serve as advisors. Alvarez & Marsal's Paul Rundell serves as the Chief Restructuring Officer. Sheila King Marketing + Public Relations serves as communications advisors. CliftonLarsonAllen is the Debtor's accountants. B.C. Ziegler and Company is the Debtor's proposed investment banker and financial advisor. In its petition, Clare Oaks estimated $100 million to $500 million in assets and debts. The petition was signed by Michael D. Hovde, Jr., president. Attorneys at Neal Wolf & Associates, LLC, represent the Official Committee of Unsecured Creditors as counsel. Wells Fargo, as master trustee and bond trustee, is represented by Daniel S. Bleck, Esq., and Charles W. Azano, Esq., at Mintz Levin Cohen Ferris Glovsky and Popeo PC; and Robert M. Fishman, Esq., and Allen J. Guon, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC. Sovereign Bank, the letters of credit issuer, is represented by John R. Weiss, Esq., at Duane Morris LLP. Senior Care Development LLC, the DIP Lender, is represented by William S. Fish, Jr., Esq., and Sarah M. Lombard, Esq., at Hinckley Allen & Snyder LLP. The Debtor intends to sell its Clare Oaks Campus to ER Propco Co, LLC aka Evergreen for $16,000,000, subject to higher and better offers. CLIFFS CLUB: Cassidy Not a Creditor, Drops Plan Objection --------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Carolina signed a stipulation and consent order signed by The Cliffs Club & Hospitality Group, Inc., et al., with Bruce Cassidy, Jr. The dispute is related to the Plan proposed by the Debtors and the plan sponsor dated June 30, 2012, which identified Mr. Cassidy as a party-in-interest in the proceeding as a counterparty to an executory contract with the Debtors. The Debtors noted that they amended Schedule G of The Cliffs at High Carolina Golf & Country Club, LLC, to delete Mr. Cassidy's honorary membership agreement from the list of the Debtors' executory contracts, consistent with the Debtors' rights reserved by the Global Notes to Debtors' schedules of assets and liabilities and statements of financial affairs. The stipulation provides for, among other things: a) The parties agree that the agreement is not a contract between the Debtors and Mr. Cassidy, and therefore, is not an executory contract subject to rejection as a Club Membership Agreement under the Plan. b) The parties agree that Mr. Cassidy is not a creditor of the Debtors' estates. c) The parties agree that by entering into the stipulation, Mr. Cassidy will not be construed to have waived or impaired any arguments or defenses regarding any and all claims in connection with any of the non-debtor affiliates, including but not limited to The Cliffs at High Carolina, LLC, The Cliffs Communities, Inc., James B. Anthony, Waterfall Investment Group, Longview Land Company, LLC, and Longview Land Company II, LLC, and therefore Mr. Cassidy expressly preserves any and all rights he has or may have in the future with respect to The Cliffs at High Carolina, LLC, a non-debtor affiliate of the Debtors. d) The parties agree that the terms resolve any and all claims Mr. Cassidy has or may have against the Debtors and the Plan Sponsor, expressly including the Cassidy Claim, which Mr. Cassidy withdraws, well as any and all claims the Debtors and Plan Sponsor have or may have against Mr. Cassidy. Furthermore, the parties agree that the terms contained resolve Mr. Cassidy's objection to the Plan, which objection Cassidy withdraws. The Debtors and the Plan Sponsor agree not to contest any claims or rights Mr. Cassidy may have against The Cliffs at High Carolina, LLC. About Cliffs Club Units of The Cliffs Communities, led by The Cliffs Club & Hospitality Group, Inc., doing business as The Cliffs Golf & Country Club, along with 10 affiliates, sought Chapter 11 protection (Bankr. D. S.C. Lead Case No. 12-01220) on Feb. 28, 2012. The Cliffs has eight premier, private master-planned residential communities, each to have its own world-class golf course. Approximately 3,734 lots have been sold. There are currently 1,385 finished homes, with 63 under construction. The properties for sale are owned by non-debtor DevCo entities. The Feb. 28 Debtors operate the exclusive membership clubs for golf, tennis, wellness and social activities at The Cliffs' communities in North and South Carolina. The clubs have 2,280 members, and there are 766 resigned members with refundable deposits totaling $37 million. The Debtors do not own the golf courses -- they only own or lease all the "core amenities" for the operation of the golf courses. Another affiliate, Keowee Falls Investment Group, LLC, filed a Chapter 11 petition (Bankr. D. S.C. Case No. 12-01399) in Spartanburg, South Carolina, on March 2, 2012. Travelers Rest- based Keowee Falls estimated at least $100 million in assets and liabilities of up to $50 million. Judge John E. Waites presides over the Debtors' cases. Lawyers at McKenna Long & Aldridge LLP serve as the Debtors' lead counsel. Dana Elizabeth Wilkinson, Esq., serves as local counsel. Grisanti Galef & Goldress serves as restructuring advisors and Katie S. Goodman of GGG serves as CRO. BMC Group Inc. serves as the Debtors' claims and noticing agent. According to papers filed in Court, the Debtors' total assets had a $175 million book value at Dec. 31, 2011. The Debtors' total liabilities had a $333 million book value at Dec. 31, 2011. The petition was signed by Timothy P. Cherry, authorized officer. Wells Fargo, as Indenture Trustee, is represented in the case by Daniel S. Bleck, Esq., at Mintz Levin Cohn Ferris Glovsky and Popeo P.C.; and Elizabeth J. Philp, Esq., and Michael Beal, Esq., at McNair Law Firm P.A. The Official Committee of Unsecured Creditors is represented in the case by John B. Butler, III, P.A., and Jonathan B. Alter, Esq., at Bingham McCutchen LLP. The Debtor has filed a Chapter 11 plan that proposes to pay lenders owed $73.5 million in secured notes, the sum of $64 million, spread over 20 years without interest. The lenders will receive the greater of $1 million a year or half of cash flow. The outstanding balance will be paid at maturity. Unsecured creditors with an estimated $3.9 million in claims are predicted to have a 75% recovery. Mechanics lienholders with $1.5 million in claims will be paid in full without interest. Members will be invited to join the newly reorganized club. Those who accept the offer will recover between 35% and 75%. Members who don't take the offer are to see a predicted recovery of 4% to 10%. COMMONWEALTH BIOTECH:: Incurs $119,700 Net Loss in 2nd Quarter -------------------------------------------------------------- Commonwealth Biotechnologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $119,757 on $0 of revenue for the three months ended June 30, 2012, compared with net income of $51,807 on $0 of revenue for the same period a year ago. The Company reported a net loss of $229,334 on $0 of revenue for the six months ended June 30, 2012, compared with a net loss of $28,753 on $0 of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $1.20 million in total assets, $1.79 million in total liabilities, and a $598,484 total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/KUUiP6 About Commonwealth Biotechnologies Based in Midlothian, Virginia, Commonwealth Biotechnologies, Inc., was a specialized life sciences outsourcing business that offered cutting-edge expertise and a complete array of Peptide-based discovery chemistry and biology products and services through its wholly owned subsidiary Mimotopes Pty Limited. Commonwealth Biotechnologies Inc. filed for Chapter 11 bankruptcy protection (Bankr. E.D. Va. Case No. 11-30381) on Jan. 20, 2011. Judge Kevin R. Huennekens presides over the case. Paula S. Beran, Esq., at Tavenner & Beran, PLC, represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. On April 7, 2011, the Bankruptcy Court approved the private sale of Mimotopes for a gross sales price of $850,000. The sale closed on April 29, 2011. Mimotopes was deconsolidated during the second quarter of 2011. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Witt Mares, PLC, in Richmond, Virginia, noted that the Company's recurring losses from operations and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern. CONSOLIDATED TRANSPORT: Files for Chapter 11 in Indiana ------------------------------------------------------- Michigan City, Indiana-based trucking company Consolidated Transport Systems, Inc., filed a Chapter 11 petition (Bankr. N.D. Ind. Case No. 12-32940), estimating up to $50 million in assets and liabilities. Walter G & Carolyn Bay owns 87.3% of the privately held Debtor. CUMULUS MEDIA: To Issue 35MM Shares Under 2011 Incentive Plan ------------------------------------------------------------- Cumulus Media Inc. filed with the U.S. Securities and Exchange Commission a Form S-8 registering 35 million shares of Class A Common Stock, $.01 par value, issuable under the Company's 2011 Equity Incentive Plan. The proposed maximum aggregate offering price is $123.7 million. A copy of the filing is available for free at http://is.gd/m3JhOt About Cumulus Media Based in Atlanta, Georgia, Cumulus Media Inc. (NASDAQ: CMLS) -- http://www.cumulus.com/-- is the second largest radio broadcaster in the United States based on station count, controlling 350 radio stations in 68 U.S. media markets. In combination with its affiliate, Cumulus Media Partners, LLC, the Company believes it is the fourth largest radio broadcast company in the United States when based on net revenues. Cumulus Media put AR Broadcasting Holdings Inc. and three other units to Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-13674) after struggling to pay off debts that topped $97 million as of June 30, 2011. Holdings estimated debts between $50 million and $100 million but said assets are worth less than $50 million. AR Broadcasting are Missouri and Texas radio stations. The Company's balance sheet at June 30, 2012, showed $3.91 billion in total assets, $3.51 billion in total liabilities, $118.23 million in total redeemable preferred stock, and $278.50 million total stockholders' equity. Bankruptcy Warning The Company said in its annual report for the year ended Dec. 31, 2011, that the lenders under the 2011 Credit Facilities have taken security interests in substantially all of the Company's consolidated assets, and the Company has pledged the stock of certain of its subsidiaries to secure the debt under the 2011 Credit Facilities. If the lenders accelerate the repayment of borrowings, the Company may be forced to liquidate certain assets to repay all or part of such borrowings, and the Company cannot assure that sufficient assets will remain after it has paid all of the borrowings under those 2011 Credit Facilities. If the Company was unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness and the Company could be forced into bankruptcy or liquidation. * * * Standard & Poor's Ratings Services in October 2011 affirmed is 'B' corporate credit rating on Cumulus Media. "The ratings reflect continued economic weakness and higher post- acquisition leverage than we initially expected," said Standard & Poor's credit analyst Jeanne Shoesmith. "They also reflect the combined company's sizable presence in both large and midsize markets throughout the U.S." CYBRDI INC: Had $154,700 Net Loss in Second Quarter --------------------------------------------------- Cybrdi, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $154,728 on $112,407 of revenues for the three months ended June 30, 2012, compared with a net loss of $137,996 on $123,419 of revenues for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $361,072 on $354,517 of revenues, compared with a net loss of $326,695 on $237,230 of revenues for the corresponding period in 2011. The Company's balance sheet at June 30, 2012, showed $10.3 million in total assets, $5.6 million in total liabilities, and stockholders' equity of $4.7 million. The Company has incurred significant losses and has not demonstrated the ability to generate sufficient cash flows from operations to satisfy its liabilities and sustain operations. The Company had an accumulated deficit of $2,740,390 and $2,447,643 as of June 30, 2012 and December 31, 2011, including net losses of $292,747 and $273,526 for the six months ended June 30, 2012 and 2011, respectively. In addition, current liabilities exceeded current assets by $3,211,515 and $2,931,175 at June 30, 2012 and December 31, 2011, respectively. These matters raise substantial doubt about the Company?s ability to continue as a going concern. A copy of the Form 10-Q is available for free at: http://is.gd/KgNDIY Cybrdi, Inc., located in Xi'an, Shaanxi, People's Republic of China, is holding company incorporated with 80% equity in Chaoying Biotech, which is engaged in biotechnology manufacturing, and research and development. Through Chaoying Biotech, Cybrdi also controls SD Chaoying, a cultural and entertainment company, which is also developing a casino. * * * As reported in the TCR on April 23, 2012, KCCW Accountancy Corp., in Diamond Bar, California, expressed substantial doubt about Cybrdi'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 recurring losses, accumulated deficit, and working capital deficit at Dec. 31, 2011, and 2010. DAVITA INC: S&P Affirms 'BB-' Issuer Credit Rating -------------------------------------------------- Standard & Poor's Ratings Services said that its 'BBB-' long-term counterparty credit rating on HealthCare Partners LLC (HCP) remains on CreditWatch with Negative implications where it was initially placed May 22, 2012. "We expect the acquisition to close by fourth-quarter 2012. The CreditWatch placement reflects HCP's anticipated acquisition by lower-rated DaVita Inc. (BB-/Stable/--), which likely will result in a downgrade of three notches," S&P said. "We will continue to monitor HCP's financial condition and discuss HCP's capital structure and role within DaVita with DaVita's management," said Standard & Poor's credit analyst Hema Singh. "We expect HCP to operate as a wholly owned subsidiary of DaVita and all of its debt to be repaid once the transaction is completed. We expect to lower the rating by three notches to be consistent with our rating on DaVita." DZF PROPERTIES: Chapter 11 Case Dismissed Pending Payment of Fees ----------------------------------------------------------------- DZF Properties Inc. obtained Bankruptcy Court approval to dismiss its Chapter 11 case pending proof of payment in full to all creditors and U.S. Trustee fees. Charles B. Greene, the Debtor's counsel, is authorized to disburse and pay from estate proceeds which he holds in his trust account of $1,595,483 these amounts: Franchise Tax Board $9,119 Cassidy Turley, CPS $55,744 Eric Morgensen $91,555 Rick Bawden $50,967 Office of the U.S. Trustee $1,625 After making the disbursements, Mr. Greene will file with the Bankruptcy Court and serve on United States Trustee San Jose office, a declaration showing proof of the disbursements. The Debtor will then upload a proposed order dismissing the case which has been approved by the office of the United States Trustee and counsel representing Sterling Savings Bank. The principal asset of the Debtor's estate consisted of commercial real estate property. Pursuant to an order dated June 14, 2012, the Debtor sold the real property asset, and escrow closed on or about June 26, 2012. Mr. Greene received $1,595,483 as net proceeds from the sale. About DZF Properties DZF Properties, LLC, based in Los Gatos, California, filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 11-60649) on Nov. 17, 2011. Judge Arthur S. Weissbrodt presides over the case. It scheduled $12,750,000 in assets and $8,661,625 in debts. The petition was signed by David Feece, Sr., the Debtor's managing member. Mr. Feece has been appointed by the Court as responsible individual for the Debtor. DIAL GLOBAL: Had $15.1 Million Net Loss in Second Quarter --------------------------------------------------------- Dial Global, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $15.1 million on $54.7 million of revenue for the three months ended June 30, 2012, compared with a net loss of $4.1 million on $21.3 million of revenue for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $27.5 million on $122.9 million of revenue, compared with a net loss of $12.0 million on $41.4 million of revenue for the same period in 2011. The Company's balance sheet at June 30, 2012, showed $439.1 million in total assets, $374.1 million in total liabilities, $10.3 million of Series A Preferred Stock, and stockholders' equity of $54.7 million. According to the regulatory filing, unless the Company obtains an equity cure or an amendment and/or waiver of certain of its financial ratios, the Company expects that it will not be in compliance with certain of its financial ratios (including its debt leverage covenant) as of the next measurement date, which is Sept. 30, 2012." "Non-compliance with our financial ratios, would cause a default under our Credit Facilities, which, if we were unable to obtain a waiver from the holders thereof, could accelerate repayment under the Credit Facilities." "If the lenders were to pursue such remedies, this could raise substantial doubt about the Company's ability to continue as a going concern. We are currently in productive discussions with our lenders regarding an amendment to our Credit Facilities and while we expect to enter into a definitive agreement with our lenders no assurance can be made that such agreement can be reached." A copy of the Form 10-Q is available for free at: http://is.gd/AhA2BT Dial Global, Inc., headquartered in New York City, is an independent, full-service network radio company that distributes, produces, and/or syndicates programming and services to more than 8,500 radio stations nationwide including representing/selling audio content of third-party producers. The Company produces and/or distribute over 200 news, sports, music, talk and entertainment radio programs, services, and digital applications, as well as audio content from live events, turn-key music formats, prep services, jingles and imaging. The Company has no operations outside the United States, but sells to customers outside the United States. DRINKS AMERICAS: To Issue 2 Million Shares Under Incentive Plan --------------------------------------------------------------- Drinks Americas Holdings, Ltd., filed with the U.S. Securities and Exchange Commission a Form S-8 registering 2 million shares of common stock issuable under the Company's 2012 Incentive Stock Option Plan. The proposed maximum aggregate offering price is $1.3 million. A copy of the filing is available for free at: http://is.gd/9NOJdQ 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. EASTGATE TOWER: Eastgate Hotel Files Ch. 11 With Prepack Plan ------------------------------------------------------------- Eastgate Tower Hotel Associates, L.P., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-13539) in Manhattan on Aug. 17, 2012, with a prepack plan of reorganization. Aside from the plan and explanatory disclosure statement, the Debtor on the petition date file motions to use cash collateral, set the claims bar date, and pay prepetition wages, as well as a motion to direct the lender to fund shortfalls. The Debtor owns property at 222 East 39th Street commonly known as the Eastgate Hotel. The Debtor owes $69.02 million to LSREF2 Clover, LLC pursuant to mortgage loans. The Debtor defaulted on the mortgage loan in December 2011. In April 2012, Atlas Capital Group LLC and Rockpoint Group, owner of membership interests of the mortgage lender, proposed a prepackaged consensual Chapter 11 plan of liquidation. Under the Prepack Plan submitted by the Debtor, the Mortgage Lender would have an 89.82% recovery. Unsecured creditors owed a total of $154,000 would recover 100% and are unimpaired. The Mortgage Lender has agreed to reduce the claim to $50 million and will accept title to the Debtor's property in full satisfaction of its claims. The Debtor will retain cash necessary to pay off administrative claims and unsecured claims. Peninsula Real Estate Fund (owner of 99% limited partnership interest) and Eastgate Hotel Associates GP, LLC (owner of 1%) would have their interest cancelled. Peninsula though will retain "profits participation rights" upon confirmation of the Plan. Counsel to the Mortgage Lender is: John H. Bae, Esq. Denise J. Penn, Esq. GREENBERG TRAURIG, LLP MetLife Building 200 Park Avenue New York, NY 10166 Counsel to Peninsula Real Estate fund is Patrick Dooley, Esq. Lisa Beckerman, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park New York, NY 10036 A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Eastgate_Plan_Outline.pdf EASTGATE TOWER: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Eastgate Tower Hotel Associates, L.P. c/o PREFNY GP,LLC-The Procacciant Group 1140 Reservoir Avenue Cranston, RI 02920 Bankruptcy Case No.: 12-13539 Chapter 11 Petition Date: August 17, 2012 Court: United States Bankruptcy Court Judge: Shelley C. Chapman About the Debtor: The Debtor owns the Eastgate Tower Hotel in midtown Manhattan. The Debtor has a plan that transfers ownership of the hotel to the secured lender. Debtor's Counsel: Lloyd A. Palans, Esq. BRYAN CAVE LLP 1290 Avenue of the Americas New York, NY 10104 Tel: (212) 541-2087 Fax: (314) 552-8301 E-mail: lapalans@bryancave.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $50,000,001 to $100,000,000 The petition was signed by Steven A. Carlson, chief restructuring officer. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ DHG Management Co. LLC Trade $109,850 551 Fifth Avenue New York, NY 10176 Con Edison Trade $17,973 4 Irving Place 9th Flr Attn: Jesse Levy New York, NY 10003 GDF Suez Energy Trade $17,414 Resources, NA 2 N 9th Street GENN 1 Allentown, PA 18010-1139 Affinia Manhattan Trade $2,695 Sobel Westex Trade $902 VDA LLC Trade $816 Affinia Fifty Trade $691 Standard Textile Trade $550 Toshiba America Trade $390 Business Solutions HD Supply Facilities Trade $390 Maintenance WB Mason Co., Inc. Trade $289 Amenity Services, Inc. Trade $266 Aalco Transport & Trade $250 Storage Inc. John Ritzenthaler Co. Trade $213 EZYield.Com Trade $193 Whitney Systems Inc. Trade $175 The Regency NYC Inc. Trade $144 Prestige Poly LLC Trade $113 Capital Supply Co. Trade $109 USA Bound/Liberty Trade $102 EASTMAN KODAK: Again Attacks Apple's Claim to 8 Patents ------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that Eastman Kodak Co. again attempted to negate Apple Inc.'s claim to eight of its patents Friday, telling a New York bankruptcy judge that it had addressed his three areas of concern in its request for summary judgment in the dispute. Bankruptcy Law360 relates that Kodak is seeking to prove that Apple and spinoff FlashPoint Inc., which laid claim to the same 10 patents as Apple, plus three more, were on actual or constructive notice at least four or six years ago, thus barring their claims under statutes of limitations. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Kodak disclosed $5.10 billion in assets and $6.75 billion in liabilities as of Sept. 30, 2011. The net book value of all assets located outside the United States as of Dec. 31, 2011 is $13.5 million. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. EAU TECHNOLOGIES: Incurs $563,000 Net Loss in Second Quarter ------------------------------------------------------------ EAU Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $563,248 on $119,237 of total revenues for the three months ended June 30, 2012, compared with a net loss of $1.06 million on $71,524 of total revenues for the same period a year ago. The Company reported a net loss of $1.12 million on $194,931 of total revenues for the six months ended June 30, 2012, compared with a net loss of $1.76 million on $702,166 of total revenues for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $1.96 million in total assets, $7.07 million in total liabilities, and a $5.11 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/iLwk9Q About EAU Technologies Kennesaw, Ga.-base EAU Technologies, Inc., is in the business of developing, manufacturing and marketing equipment that uses water electrolysis to create non-toxic cleaning and disinfecting fluids for food safety applications as well as dairy drinking water. In the auditors' report accompanying the consolidated financial statements for the period ended Dec. 31, 2011, HJ & Associates, LLC, in Salt Lake City, Utah, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a working capital deficit as well as a deficit in stockholders' equity. EC DEVELOPMENT: Had $624,200 Net Loss in Second Quarter ------------------------------------------------------- EC Development, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $624,231 on $286,058 of revenues for the three months ended June 30, 2012, compared with a net loss of $491,229 on $58,043 of revenues for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $874,335 on $451,043 of revenues, compared with a net loss of $936,541 on $114,634 of revenues for the same period of 2011. The Company's balance sheet at June 30, 2012, showed $5.5 million in total assets, $1.5 million in total liabilities, and stockholders' equity of $4.0 million. The Company had incurred cumulative losses of $10.0 million and has negative working capital of $695,147 as at June 30, 2012. A copy of the Form 10-Q is available for free at: http://is.gd/zadGVZ Shawnee, Oklahoma-based EC Development, Inc., markets and sells, casino-management systems in the form of a suite of cutting-edge technology solutions under the brand name "Tahoe". * * * As reported in the TCR on April 11, 2012, Schulman Wolfson & Abruzzo, LLP, in New York, New York, expressed substantial doubt about EC Development'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 operating losses, negative working capital, no operating cash flow and future losses are anticipated. "The Company's plan of operations, even if successful, may not result in cash flow sufficient to finance and expand its business which raises substantial doubt about its ability to continue as a going concern." EDIETS.COM INC: Incurs $144,000 Net Loss in Second Quarter ---------------------------------------------------------- eDiets.com, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $144,000 on $5.63 million of total revenue for the three months ended June 30, 2012, compared with a net loss of $851,000 on $5.63 million of total revenue for the same period a year ago. The Company reported a net loss of $1.21 million on $12.57 million of total revenue for the six months ended June 30, 2012, compared with a net loss of $1.23 million on $12.16 million of total revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $1.99 million in total assets, $4.26 million in total liabilities, all current, and a $2.26 million total stockholders' deficit. Bankruptcy Warning On Aug. 10, 2012, the Company entered into a letter of intent with As Seen On TV, Inc., a direct response marketing company, whereby ASTV agreed to acquire all of the Company's outstanding shares of common stock in exchange for 16,185,392 newly issued shares of ASTV common stock, representing an acquisition price of approximately $0.80 per share of the Company's common stock. Under the Letter of Intent, all of the Company's other outstanding securities exercisable or exchangeable for, or convertible into, the Company's capital stock would be deemed converted into, and exchanged for securities of ASTV on an as converted basis immediately prior to the record date of the acquisition. Both before and after consummation of the transactions described in the Letter of Intent, and if those transactions are never consummated, the continuation of the Company's business is dependent upon raising additional financial support. "In light of our results of operations, management has and intends to continue to evaluate various possibilities to the extent these possibilities do not conflict with our obligations under the Letter of Intent," the Company said in its quarterly report for the period ended June 30, 2012. "These possibilities include: raising additional capital through the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt, selling one or more lines of business, or all or a portion of the our assets, entering into a business combination, reducing or eliminating operations, liquidating assets, or seeking relief through a filing under the U.S. Bankruptcy Code." A copy of the Form 10-Q is available for free at: http://is.gd/Zx6qJo About eDiets eDiets.com, Inc. is a leading provider of personalized nutrition, fitness and weight-loss programs. eDiets currently features its award-winning, fresh-prepared diet meal delivery service as one of the more than 20 popular diet plans sold directly to members on its flagship site, http://www.eDiets.com Following the 2011 results, Ernst & Young LLP, in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses, was not able to meet its debt obligations in the current year and has a working capital deficiency. EMMIS COMMUNICATIONS: Agrees to Sell Two Magazines for $9 Million ----------------------------------------------------------------- Emmis Communications Corporation entered into a non-binding letter of intent to sell the assets of Country Sampler magazine, Smart Retailer magazine, and related publications for approximately $9 million. The operating income for these magazines in the twelve months ended May 31, 2012, was approximately $1 million. Under the terms of the letter of intent, the unnamed buyer has the exclusive right to purchase the magazines for a period of 60 days. Closing of this transaction is expected on or before Sept. 30, 2012, and is subject to completion of due diligence, negotiation of a definitive purchase agreement, and purchaser obtaining lender approval. About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. The Company's balance sheet at May 31, 2012, showed $350.94 million in total assets, $360.51 million in total liabilities, $46.88 million in series A cumulative convertible preferred stock, and a $56.45 million total deficit. ENERGY FUTURE: Completes Offering of $850 Million Senior Notes -------------------------------------------------------------- Energy Future Intermediate Holding Company LLC, a wholly-owned subsidiary of Energy Future Holdings Corp., and EFIH Finance Inc., a direct, wholly owned subsidiary of EFIH, completed an offering of $250 million aggregate principal amount of the Issuer's 6.875% Senior Secured Notes due 2017 and $600 million aggregate principal amount of the Issuer's additional 11.750% Senior Secured Second Lien Notes due 2022 in a private placement conducted pursuant to the exemptions from registration contained in Rule 144A and Regulation S under the Securities Act of 1933, as amended. The First Lien Notes were issued pursuant to an Indenture, dated as of Aug. 14, 2012, among the Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee. The New 2022 Second Lien Notes have identical terms, other than the issue date and issue price, will be fungible with, and constitute part of the same series as, the Initial 2022 Second Lien Notes. The holders of the New 2022 Second Lien Notes, the Initial 2022 Second Lien Notes and the 2021 Second Lien Notes will generally vote as a single class under the terms of the Second Lien Indenture. The First Lien Notes will mature on Aug. 15, 2017. Interest on the First Lien Notes is payable in cash in arrears on February 15 and August 15 of each year at a fixed rate of 6.875% per annum, commencing on Feb. 15, 2013. The 2022 Second Lien Notes will mature on March 1, 2022. Interest on the 2022 Second Lien Notes is payable in cash in arrears on March 1 and September 1 of each year at a fixed rate of 11.750% per annum, commencing on Sept. 1, 2012. On Aug. 14, 2012, the Issuer also entered into a registration rights agreement with the initial purchasers. A copy of the Indenture is available for free at: http://is.gd/gp4DK9 About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. The Company's balance sheet at Dec. 31, 2011, showed $44.07 billion in total assets, $51.83 billion in total liabilities, and a $7.75 billion total deficit. Energy Future had a net loss of $1.91 billion on $7.04 billion of operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.81 billion on $8.23 billion of operating revenues during the prior year. * * * As reported by the TCR on Aug. 15, 2012, Moody's downgraded the Corporate Family Rating (CFR) of EFH to Caa3 from Caa2 and affirmed its Caa3 Probability of Default Rating (PDR) and SGL-4 Speculative Grade Liquidity Rating. The downgrade of EFH's CFR to Caa3 from Caa2 reflects the company's financial distress and limited financial flexibility. EFH's capital structure is complex and, in Moody's opinion, untenable which calls into question the sustainability of the business model and expected duration of its liquidity reserves. ENVISION SOLAR: Had $235,400 Net Loss in Second Quarter ------------------------------------------------------- Envision Solar International, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $235,405 on $111,793 of revenues for the the three months ended June 30, 2012, compared with net income of $381,450 on $299,896 of revenues for the same period a year ago. For the six months ended June 30, 2012, the Company had a net loss of $1.2 million on $420,508 of revenues, compared with a net loss of $946,537 on $568,384 of revenues for the same period in 2011. The Company's balance sheet at June 30, 2012, showed $1.4 million in total assets, $2.6 million in total current liabilities, and a stockholders' deficit of $1.2 million. "For the six months ended June 30, 2012, the Company had net losses of $1,219,364. Additionally, at June 30, 2012, the Company had a working capital deficit of $1,345,359, an accumulated deficit of $23,559,824 and a stockholders' deficit of $1,223,622. These factors raise substantial doubt about the Company?s ability to continue as a going concern." As reported in the TCR on April 9, 2012, Salberg & Company P.A., in Boca Raton, Fla., expressed substantial doubt about Envision Solar's ability to continue as a going concern, following the Company's results for the year ended Dec. 31, 2011. The independent auditors noted that the Company reported a net loss of $2,547,493 and $2,360,851 in 2011 and 2010, respectively, and used cash for operating activities of $1,970,831 and $1,112,794 in 2011 and 2010, respectively. "At Dec. 31, 2011, the Company had a working capital deficiency, stockholders' deficit and accumulated deficit of $2,657,976, $2,482,203 and $22,340,460, respectively." A copy of the Form 10-Q is available for free at: http://is.gd/pnZqHS San Diego, Calif.-based Envision Solar International, Inc., is a developer of solar products and proprietary technology solutions. The Company focuses on creating high quality products which transform both surface and top deck parking lots of commercial, institutional, governmental and other customers into shaded renewable generation plants. EVENSTAR INC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Evenstar, Inc. 809 Aldo Avenue, Suite 105 Santa Clara, CA 95054-2255 Bankruptcy Case No.: 12-56172 Chapter 11 Petition Date: August 20, 2012 Court: United States Bankruptcy Court Northern District of California (San Jose) Judge: Arthur S. Weissbrodt Debtor's Counsel: Stanley A. Zlotoff, Esq. LAW OFFICES OF STANLEY A. ZLOTOFF 300 S 1st St. #215 San Jose, CA 95113 Tel: (408)287-1313 E-mail: zlotofflaw@gmail.com Scheduled Assets: $372,125 Scheduled Liabilities: $1,388,936 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb12-56172.pdf The petition was signed by David Miller, president. FANNIE MAE: Amends Preferred Stock Purchase Pact with Treasury -------------------------------------------------------------- Fannie Mae, through the Federal Housing Finance Agency, in its capacity as conservator, and the United States Department of the Treasury, previously entered into an amended and restated senior preferred stock purchase agreement. On Aug. 17, 2012, Treasury and Fannie Mae, through FHFA acting on Fannie Mae's behalf in its capacity as conservator, entered into a third amendment to the amended and restated senior preferred stock purchase agreement. The amendment revised the terms of the agreement and the related senior preferred stock in the following ways: * Dividends. Beginning in 2013, the method for calculating the amount of dividends Fannie Mae is required to pay Treasury on the senior preferred stock will change. The method for calculating the amount of dividends payable on the senior preferred stock in effect prior to this amendment, which will remain in effect through Dec. 31, 2012, is to apply an annual dividend rate of 10% to the aggregate liquidation preference of the senior preferred stock. Effective Jan. 1, 2013, the amount of dividends payable on the senior preferred stock for a dividend period will be determined instead based on our net worth as of the end of the immediately preceding fiscal quarter. For each dividend period from Jan. 1, 2013, through and including Dec. 31, 2017, the dividend amount will be the amount, if any, by which our net worth as of the end of the immediately preceding fiscal quarter exceeds an applicable capital reserve amount. The applicable capital reserve amount will be $3 billion for 2013 and will be reduced by $600 million each year until it reaches zero on Jan. 1, 2018. For each dividend period thereafter, the dividend amount will be the amount of our net worth, if any, as of the end of the immediately preceding fiscal quarter. * Periodic Commitment Fee. Effective Jan. 1, 2013, the periodic commitment fee provided for under the agreement is suspended, as long as the changes to the dividend payment provisions referenced above remain in effect. * Transfer of Assets Covenant. The transfer of assets covenant contained in Section 5.4 of the agreement was amended to allow the company to dispose of assets and properties at fair market value, in one transaction or a series of related transactions, without requiring the prior written consent of Treasury, if those assets have a fair market value individually or in the aggregate of less than $250 million, regardless of whether or not the transaction is in the ordinary course of business. * Mortgage Assets Covenant. The mortgage assets covenant contained in Section 5.7 of the agreement was amended to: (1) reduce the maximum allowable amount of mortgage assets Fannie Mae may own as of Dec. 31, 2012, from $656.1 billion to $650 billion; and (2) require that, on December 31 of each year following Dec. 31, 2012, Fannie Mae reduce its mortgage assets to 85% of the maximum allowable amount that it was permitted to own as of December 31 of the immediately preceding calendar year (rather than 90% as previously provided by the agreement), until the amount of Fannie Mae's mortgage assets reaches $250 billion. * Annual Risk Management Plan Covenant. A new covenant was added requiring that Fannie Mae provide an annual risk management plan to Treasury not later than December 15 of each year Fannie Mae remains in conservatorship, beginning not later than Dec. 15, 2012. Each annual risk management plan is required to set out Fannie Mae's strategy for reducing its risk profile and to describe the actions it will take to reduce the financial and operational risk associated with each of its business segments. Each plan delivered after Dec. 15, 2012, must include an assessment of Fannie Mae's performance against the planned actions described in the prior year's plan. In addition, the amendment also requires that Fannie Mae amend or replace the existing Certificate of Designation for the senior preferred stock to reflect the revised dividend payment provisions described above by no later than Sept. 30, 2012. Treasury beneficially owns more than 5% of the outstanding shares of Fannie Mae's common stock by virtue of the warrant Fannie Mae issued to Treasury on Sept. 7, 2008. A copy of the Third Amendment is available for free at: http://is.gd/jipqE5 About Fannie Mae Federal National Mortgage Association, aka Fannie Mae, is a government-sponsored enterprise that was chartered by U.S. Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. Fannie Mae has been under conservatorship, with the Federal Housing Finance Agency acting as conservator, since September 6, 2008. As conservator, FHFA succeeded to all rights, titles, powers and privileges of the company, and of any shareholder, officer or director of the company with respect to the company and its assets. The conservator has since delegated specified authorities to Fannie Mae's Board of Directors and has delegated to management the authority to conduct day-to-day operations. The U.S. Department of the Treasury owns Fannie Mae's senior preferred stock and a warrant to purchase 79.9% of its common stock, and Treasury has made a commitment under a senior preferred stock purchase agreement to provide Fannie with funds under specified conditions to maintain a positive net worth. Fannie Mae reporte a net loss of $16.85 billion in 2011, a net loss of $14.01 billion in 2010, and a net loss of $72.02 billion in 2009. The Company's balance sheet at June 30, 2012, showed $3.19 trillion in total assets, $3.19 trillion in total liabilities, and $2.77 billion in total equity. FIBERTOWER NETWORK: Files Schedules of Assets and Liabilities ------------------------------------------------------------- Fibertower Spectrum Holdings LLC, filed with the U.S. Bankruptcy Court for the Northern District of Texas its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $106,630,000 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $132,211,924 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $40,290,051 ----------- ----------- TOTAL $106,630,000 $175,501,975 Debtor-affiliates also filed their respective schedules disclosing: Company Assets Liabilities ------- ------ ----------- FiberTower Licencing Corp. $0 $172,501,975 FiberTower Network Services $66,058,071 $512,044,326 Corp. Copies of the schedules are available for free at: http://bankrupt.com/misc/FIBERTOWER-licensing_sal.pdf http://bankrupt.com/misc/FIBERTOWER_fibertowernetwork_sal.pdf http://bankrupt.com/misc/FIBERTOWER_spectrum_sal.pdf About FiberTower FiberTower Corporation, FiberTower Network Services Corp., FiberTower Licensing Corp., and FiberTower Spectrum Holdings LLC filed for Chapter 11 protection (Bankr. N.D. Tex. Case Nos. 12-44027 to 12-44031) on July 17, 2012, together with a plan support agreement struck with prepetition secured noteholders. FiberTower is an alternative provider of facilities-based backhaul services, principally to wireless carriers, and a national provider of millimeter-band spectrum services. Backhaul is the transport of voice, video and data traffic from a wireless carrier's mobile base station, or cell site, to its mobile switching center or other exchange point. FiberTower provides spectrum leasing services directly to other carriers and enterprise clients, and also offer their spectrum services through spectrum brokerage arrangements and through fixed wireless equipment partners. FiberTower's significant asset is the ownership of a national spectrum portfolio of 24 GHz and 39 GHz wide-area spectrum licenses, including over 740 MHz in the top 20 U.S. metropolitan areas and, in the aggregate, roughly 1.72 billion channel pops (calculated as the number of channels in a given area multiplied by the population, as measured in the 2010 census, covered by these channels). FiberTower believes the Spectrum Portfolio represents one of the largest and most comprehensive collections of millimeter wave spectrum in the U.S., covering areas with a total population of over 300 million. As of the Petition Date, FiberTower provides service to roughly 5,390 customer locations at 3,188 deployed sites in 13 markets throughout the U.S. The fixed wireless portion of these hybrid services is predominantly through common carrier spectrum in the 11, 18 and 23 GHz bands. FiberTower's biggest service markets are Dallas/Fort Worth and Washington, D.C./Baltimore, with additional markets in Atlanta, Boston, Chicago, Cleveland, Denver, Detroit, Houston, New York/New Jersey, Pittsburgh, San Antonio/Austin/Waco and Tampa. As of June 30, 2012, FiberTower's books and records reflected total combined assets, at book value, of roughly $188 million and total combined liabilities of roughly $211 million. As of the Petition Date, FiberTower had unrestricted cash of roughly $23 million. For the six months ending June 30, 2012, FiberTower had total revenue of roughly $33 million. With the help of FTI Consulting Inc., FiberTower's preliminary valuation work shows that the Company's enterprise value is materially less than $132 million -- i.e., the approximate principal amount of the 9.00% Senior Secured Notes due 2016 outstanding as of the Petition Date. The preliminary valuation work is based upon the assumption that FiberTower's spectrum licenses will not be terminated. Judge D. Michael Lynn oversees the Chapter 11 case. Lawyers at Andrews Kurth LLP serve as the Debtors' lead counsel. Lawyers at Hogan Lovells and Willkie Farr and Gallagher LLP serve as special FCC counsel. FTI Consulting serve as financial advisor. BMC Group Inc. serve as claims and noticing agent. The petitions were signed by Kurt J. Van Wagenen, president. Wells Fargo Bank, National Association -- as indenture trustee and collateral agent to the holders of 9.00% Senior Secured Notes due 2016 owed roughly $132 million as of the Petition Date -- is represented by Eric A. Schaffer, Esq., at Reed Smith LLP. An Ad Hoc Committee of Holders of the 9% Secured Notes Due 2016 is represented by Kris M. Hansen, Esq., and Sayan Bhattacharyya, Esq., at Stroock & Stroock & Lavan LLP. Wells Fargo and the Ad Hoc Committee also have hired Stephen M. Pezanosky, Esq., and Mark Elmore, Esq., at Haynes and Boone, LLP, as local counsel. U.S. Bank, National Association -- in its capacity as successor indenture trustee and collateral agent to holders of the 9.00% Convertible Senior Secured Notes due 2012, owed $37 million as of the Petition Date -- is represented by Michael B. Fisco, Esq., at Faegre Baker Daniels LLP, as counsel and J. Mark Chevallier, Esq., at McGuire Craddock & Strother PC as local counsel. William T. Neary, the U.S. Trustee for Region 6 appointed five members to the Official Committee of Unsecured Creditors in the Debtors' cases. The Official Committee of Unsecured Creditors are represented by David M. Posner, Esq. Gianfranco Finizio, Esq. OTTERBOURG, STEINDLER, HOUSTON & ROSEN, P.C. 230 Park Avenue New York, NY 10169-0075 E-mail: dposner@oshr.com gfinizio@oshr.com - and - Michael D. Warner, Esq. Emily S. Chou, Esq. COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A. 301 Commerce Street, Suite 1700 Fort Worth, Texas 76102 E-mail: mwarner@coleschotz.com echou@coleschotz.com FLINTKOTE COMPANY: Wants Plan Exclusivity Until Jan. 31 ------------------------------------------------------- The Flintkote Company and Flintkote Mines Limited ask the Hon. Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware to further extend to Jan. 31, 2013, the period during which the Debtors have the exclusive right to file a Chapter 11 plan of reorganization. The Debtors also ask the Court to extend to March 31, 2013, the period during which the Debtors have the exclusive right to solicit acceptances of the plan. The Official Committee of Asbestos Personal Injury Claimants supports the Debtors' extension requests. The Debtors filed an amended joint plan of reorganization in respect of the Debtors dated July 17, 2009 (as further modified on Aug. 5, 2010, Aug. 31, 2011, Nov. 16, 2011, and as may be further modified in the future), along with a supplemental document describing the minor modifications embodied under the Modified Amended Plan. The Court approved that supplemental disclosure document on July 30, 2009. The Modified Amended Plan was accepted by majority of all the classes of creditors and asbestos claimants, including nearly 95% of the Asbestos Personal Injury Claimants. The trial on confirmation of the Modified Amended Plan was held on Oct. 25-26, 2010, Sept. 12-13, 2011, and Sept. 19, 2011. The Modified Amended Plan has now been accepted by all classes of creditors and claimants, including the vast majority of Asbestos Personal Injury Claimants. "Preserving exclusivity at this crucial point in the plan process is necessary to further one of the principal goals of the Chapter 11 process -- the successful rehabilitation of a debtor through a consensual plan of reorganization," the Debtors stated. Collectively, the Debtors are defendants in over 157,000 asbestos- related personal injury claims pending in various jurisdictions and an unknown number of future asbestos-related personal injury claims. The Debtors' current and future liability for Asbestos Personal Injury Claims is estimated to exceed $3 billion. The Plan proposes establishing a section 524(g) trust to fairly and equitably address and resolve the large number and amount of Asbestos Personal Injury Claims. The Debtors successfully negotiated and formulated the Modified Amended Plan with the Asbestos Claimants Committee and Future Claimants Representative. The Debtors are in the process of resolving certain non-asbestos-related claims filed against their estates and, in this regard, have made significant progress in negotiating remediation and entering into settlement agreements with various environmental claimants. The Debtors are also continuing in their efforts to negotiate "buy-out" arrangements with their remaining insurers. About The Flintkote Company Headquartered in San Francisco, California, The Flintkote Company is engaged in the business of manufacturing, processing and distributing building materials. Flintkote Mines Limited is a subsidiary of Flintkote Company and is engaged in the mining of base-precious metals. The Flintkote Company filed for Chapter 11 protection (Bankr. D. Del. Case No. 04-11300) on April 30, 2004. Flintkote Mines Limited filed for Chapter 11 relief (Bankr. D. Del. Case No. 04-12440) on Aug. 25, 2004. Kevin T. Lantry, Esq., Jeffrey E. Bjork, Esq., Dennis M. Twomey, Esq., Jeremy E. Rosenthal, Esq., and Christina M. Craige, Esq., at Sidley Austin, LLP, in Los Angeles; James E. O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Del., represent the Debtors in their restructuring efforts. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, N.Y.; Peter Van N. Lockwood, Esq., Ronald E. Reinsel, Esq., at Caplin & Drysdale, Chartered, in Washington, D.C.; and Philip E. Milch, Esq., at Campbell & Levine, LLC, in Wilmington, Del., represent the Asbestos Claimants Committee as counsel. When Flintkote Company filed for protection from its creditors, it estimated more than $100 million each in assets and debts. When Flintkote Mines Limited filed for protection from its creditors, it estimated assets of $1 million to $50 million, and debts of more than $100 million. FRESH START: Had $438,500 Net Loss in Second Quarter ---------------------------------------------------- Fresh Start Private Management, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $438,537 on sales of $179,209 for the three months ended June 30, 2012, compared with a net loss of $68,856 on sales of $305,230 for the corresponding period last year. For the six months ended June 30, 2012, the Company had a net loss of $457,378 on sales of $440,092, compared with a net loss of $216,260 on sales of $333,880 for the same period of 2011. The Company's balance sheet at June 30, 2012, showed $5.1 million in total assets, $2.0 million in total current liabilities, and stockholders' equity of $3.1 million. "The Company has incurred significant recurring losses which have resulted in an accumulated deficit of $1,170,117, a working capital deficiency of $857,972 at June 30, 2012, and negative cash flows from operations of $615,388 for the six months ended June 30, 2012, which, raises substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/dKxV8d Fresh Start Private Management, Inc., through its wholly owned subsidiary, is an alcohol rehabilitation and treatment center headquartered in Santa Ana, California. The Company was established in January 2010 and is currently operating in Santa Ana, California. The Company's alcohol rehabilitation program consists of a Naltrexone implant that is placed under the skin in the lower abdomen coupled with life counseling sessions from specialized counselors. * * * As reported in the TCR on Jul 11, 2012, Wilson Morgan LLP, in Irvine, California, expressed substantial doubt about Fresh Start'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 of the Company's losses from operations. GATOR INVESTMENT: Files for Chapter 11 in Gainesville, Fla. ----------------------------------------------------------- Gator Investment & Development, LLC, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 12-10330) in Gainesville, Florida on Aug. 17, 2012. According to the list of creditors, TD Bank is owed $9.50 million on a mortgage, of which $5.00 million is secured by a property. The Debtor on the petition date filed emergency motions to pay prepetition wages and use cash collateral. A meeting of creditors under 11 U.S.C. Sec. 341(a) is scheduled for Oct. 4, 2012 at 1:00 p.m. The Debtor has already filed its schedules of assets and liabilities. GATOR INVESTMENT: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Gator Investment & Development, LLC 2601 SW Archer Road Gainesville, FL 32608 Bankruptcy Case No.: 12-10330 Chapter 11 Petition Date: August 17, 2012 Court: United States Bankruptcy Court Northern District of Florida (Gainesville) Debtor's Counsel: Seldon J. Childers, Esq. CHILDERSLAW, LLC 2135 N.W. 40th Terrace, Suite B Gainesville, FL 32605 Tel: (866) 996-6104 Fax: (407) 209-3870 E-mail: jchilders@smartbizlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by George G. Levin, managing member. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ TD BANK mortgage $9,504,247 c/o Tim Haines, Esq. 125 NE First Avenue, Suite 1 Ocala, FL 34470 9191 South Dixie loan from $3,309,635 Limited Partnership corporation 100 Bay Colony Lane Ft. Lauderdale, FL 33308 MaCor Realty, Inc. litigation $419,357 c/o T.Scott Frazier, Esq. 125 East Jefferson Street Orlando, FL 32801 University Commons Home association fees $104,027 Owners Assoc. Foxcroft Village, LLC loan from corp. $73,981 Stok, Folk & Kon attorney fees $66,477 Gainesville Regional utilities $18,428 Utilities Promax Painting, Inc. painting services $15,000 Greenspoon Marder PA attorney fees $9,757 Sprechman & Associates, attorney fees $8,707 PA Gerson, Preston, attorney fees $5,500 Robinson and Co. Sherwin Williams purchase money $5,495 Chadwell Supply lien $5,465 The Hartford insurance $3,790 National Medical services $3,427 Administrators, Inc. Emerson Appraisal services $2,100 Gillen Broadcasting services $1,650 Corp. Florida Pest Control services $320 A&C Professionals maintenance services $270 Roberto and Pasqualine litigation $0 Mosca GAMMA MEDICA-IDEAS: Case Summary & 9 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Gamma Medica-Ideas, Inc. 19355 Business Center Drive Suite 8 Northridge, CA 91324 Bankruptcy Case No.: 12-17474 Chapter 11 Petition Date: August 20, 2012 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Debtor's Counsel: Krikor J. Meshefejian, Esq. Ron Bender, Esq. LEVENE, NEALE, BENDER, YOO & BRILL LLP 10250 Constellation Blvd, Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 E-mail: kjm@lnbrb.com rb@lnbyb.com Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 The petitions were signed by James Calandra, president and chief executive officer. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Gamma Medica-Ideas (USA), Inc. 12-17469 08/20/12 Assets: $1,000,001 to $10,000,000 Debts: $10,000,001 to $50,000,000 Industrial Digital Imaging, Inc. 12-17483 08/20/12 Assets: $0 to $50,000 Debts: $10,000,001 to $50,000,000 A copy of Gamma Medica-Ideas's list of its nine largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-17474.pdf A copy of Gamma Medica-Ideas (USA)'s list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-17469.pdf GENERAL MOTORS: Again Losing Market Share ----------------------------------------- American Bankruptcy Institute reports that General Motors is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market, according to a commentary in Forbes. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. GM employs 208,000 people in every major region of the world and does business in more than 120 countries. GM and its strategic partners produce cars and trucks in 30 countries, and sell and service these vehicles through the following brands: Baojun, Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall, and Wuling. GM's largest national market is China, followed by the United States, Brazil, the United Kingdom, Germany, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government once owned as much as 60.8% stake in New GM on account of the financing it provided to the bankrupt entity. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. General Motors Corp. and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31, 2011. GEOMET INC: Common Stock Delisted from NASDAQ Stock Market ---------------------------------------------------------- The NASDAQ Stock Market LLC notified the U.S. Securities and Exchange Commission regarding the removal from listing or registration of GeoMet, Inc.'s common stock on NASDAQ. On Aug. 2, 2012, the Company was notified by the Listing Qualifications Department of the NASDAQ that the Company's common stock had closed at less than $1 over the previous 180 calendar days and, as a result, did not comply with listing rules. GeoMet's common stock began trading Aug. 14 on the OTCQB Marketplace under the Company's current symbol, GMET. About Geomet Inc. Houston, Texas-based GeoMet, Inc., is an independent energy company primarily engaged in the exploration for and development and production of natural gas from coal seams ("coalbed methane" or "CBM") and non-conventional shallow gas. It was originally founded as a consulting company to the coalbed methane industry in 1985 and has been active as an operator, developer and producer of coalbed methane properties since 1993. Its principal operations and producing properties are located in the Cahaba and Black Warrior Basins in Alabama and the central Appalachian Basin in Virginia and West Virginia. It also owns additional coalbed methane and oil and gas development rights, principally in Alabama, Virginia, West Virginia, and British Columbia. As of March 31, 2012, it owns a total of approximately 192,000 net acres of coalbed methane and oil and gas development rights. "As of May 11, 2012, we had $148.6 million outstanding under our Fifth Amended and Restated Credit Agreement," the Company said in its quarterly report for the period ending March 31, 2012. "As of March 31, 2012, we were in compliance with all of the covenants in our Credit Agreement. The Credit Agreement provides, however, that if the amount outstanding at any time exceeds the "borrowing base", we must provide additional collateral to the lenders or repay the excess as provided in the Credit Agreement. The borrowing base is set in the sole discretion of our lenders in June and December of each year based, in part, on the value of our estimated reserves as determined by the lenders using natural gas prices forecasted by the lenders." "Due to the decline in the bank group's price projections, we expect our outstanding loan balance at the June determination date will exceed the new borrowing base, resulting in a borrowing base deficiency. We do not have additional collateral to provide to the lenders and we expect that our operating cash flows would be insufficient to repay the expected borrowing base deficiency, as required under the Credit Agreement. As such, unless we amend the Credit Agreement, we may be in default under the agreement when the borrowing base is determined in June 2012. In addition, the elimination of the unused availability under the borrowing base, which is a factor in our working capital covenant, may result in a future default of that covenant under the Credit Agreement. We have begun discussions with our bank group; however, until the borrowing base for June 2012 has been determined, we will not know the amount of the deficiency. As of March 31, 2012, the debt is classified as long-term as we are not in violation of any debt covenants. Should we be in violation of any covenants which have not been waived or have a borrowing base deficiency as of June 30, 2012, some or all of the debt will be reclassified to current. There are no assurances that we will be able to amend our Credit Agreement or obtain a waiver. If we do obtain a waiver or an amendment, there can be no assurance as to the cost or terms of such an amendment." "These conditions raise substantial doubt about our ability to continue as a going concern for the next twelve months." The Company's balance sheet at June 30, 2012, showed $144.47 million in total assets, $173.55 million in total liabilities, $32.17 million in series A convertible redeemable preferred stock, and a $61.25 million total stockholders' deficit. GETTY IMAGES: S&P Puts 'BB-' Issuer Credit Rating on Watch Neg -------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB-' rating on Seattle-based Getty Images Inc., along with all issue-level ratings on its debt, on CreditWatch with negative implications. The CreditWatch placement is based on Getty Images' announcement that it will be acquired by private-equity investor Carlyle Group L.P. for about $3.3 billion and that both debt leverage and financial risk are likely to increase correspondingly. "Getty's second-quarter performance was below our expectations. For the three months ended June 30, 2012, reported revenue and our calculation of EBITDA declined 2.5% and 2.3%. We believe that unfavorable foreign exchange movements and soft global macroeconomic conditions contributed to the declines. Under our base-case scenario for full year 2012, we expect revenue will be flat for the year as benefits from U.S. political advertising and the London Olympics will boost results in the second half. We expect EBITDA will increase at a low- to mid-single-digit percent rate primarily due to the cost reductions taken in the first quarter of 2012," S&P said. "The company has not announced the details of its post-LBO new capital structure. At June 30, 2012, Getty's debt (adjusted for leases) to EBITDA was about 4.6x. We expect that leverage will rise as result of the transaction," S&P said. "We expect to meet with management to discuss its business outlook, review the new capital structure, and assess the financial policy post-LBO," said Standard & Poor's credit analyst Daniel Haines. "We will likely resolve the CreditWatch listing upon completion of the acquisition." GRESHAM & GRAHAM: Case Summary & 6 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Gresham & Graham General Partnership 341 W. Secretariat Tempe, AZ 85284 Bankruptcy Case No.: 12-18559 Chapter 11 Petition Date: August 20, 2012 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Blake D. Gunn, Esq. LAW OFFICE OF BLAKE D. GUNN P.O. Box 22146 Mesa, AZ 85277-2146 Tel: (480) 270-5073 E-mail: blake.gunn@gunnbankruptcyfirm.com Scheduled Assets: $1,009,000 Scheduled Liabilities: $1,245,000 A copy of the Company's list of its six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/azb12-18559.pdf The petition was signed by Theresa Littler, general partner. HALLWOOD GROUP: Files Form 10-Q, Had $1.2MM Net Loss in 2nd Qtr. ---------------------------------------------------------------- The Hallwood Group Incorporated filed its quarterly report on Form 10-Q, reporting a net loss of $1.2 million on $37.2 million of revenues for the three months ended June 30, 2012, compared with a net loss of $3.5 million on $36.7 million of revenues for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $10.8 million on $73.1 million of revenues, compared with a net loss of $4.5 million on $63.5 million of revenues for the same period of 2011. The Company's balance sheet at June 30, 2012, showed $79.7 million in total assets, $31.3 million in total liabilities, and stockholders' equity of $48.4 million. Going Concern On April 24, 2012, the United States District Court in the Adversary Proceeding (styled as Hallwood Energy, L.P. v. The Hallwood Group Incorporated, Adversary No. 09-03082) issued a Judgment awarding damages against the Company totaling approximately $18,700,000 plus prejudgment and postjudgment interest and court costs and plaintiff's attorneys' fees as may be requested and awarded pursuant to a subsequent motion. According to the regulatory filing, the Company satisfied the Judgment, including prejudgment and postjudgment interest, in two payments; $3,774,000 on May 4, 2012, and $17,947,000 on May 9, 2012. "At June 30, 2012, the litigation reserve for the Hallwood Energy Matters is $2,179,000. The parties settled the amount of court costs for approximately $101,000, which is expected to be paid on or before Aug. 28, 2012. While the Company will be required to pay some additional amount of money to the plaintiffs as compensation for their attorney fees related to the breach of contract claim they prosecuted against the Company, the amounts and timing of that payment are currently unresolved and will be determined by the Bankruptcy Court (for the Northern District of Texas). The plaintiffs have alleged that they are entitled to approximately $4,000,000 for attorney fees while the Company contends that they should only recover a small fraction of that amount. In addition, the Company is in the process of appealing to the Fifth Circuit Court of Appeals the portions of the Judgment awarding a combined $17,947,000 on the plaintiffs' tort claims. Because the initial appellate brief has not yet been filed, at this point it is difficult to determine or approximate when the appellate court might rule on the Company's appeal." "In addition to its current available cash, to obtain additional funds to satisfy the Judgment, in May 2012, the Company received an $8,000,000 dividend from Brookwood and the $10,000,000 HFL Loan." "The Company's ability to receive additional cash dividends or other advances from Brookwood above the permitted annual discretionary dividend not to exceed 50% of Brookwood's net income to repay the HFL Loan or for other purposes, is dependent upon Brookwood obtaining consent from BB&T for such payments. Any such payments or advances would also be contingent upon the approval of Brookwood's board of directors and Brookwood's ability to meet the requirements of the Delaware corporate laws for the payment of dividends and compliance with other applicable laws and requirements." "The aforementioned circumstances raise substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/S3ivEk Dallas, Texas-based The Hallwood Group Incorporated (NYSE MKT: HWG) operates as a holding company. The Company operates its principal business in the textile products industry through its wholly owned subsidiary, Brookwood Companies Incorporated. Brookwood is an integrated textile firm that develops and produces innovative fabrics and related products through specialized finishing, treating and coating processes. Prior to October 2009, The Hallwood Group Incorporated held an investment in Hallwood Energy, L.P. ("Hallwood Energy"). Hallwood Energy was a privately held independent oil and gas limited partnership and operated as an upstream energy company engaged in the acquisition, development, exploration, production, and sale of hydrocarbons, with a primary focus on natural gas assets. The Company accounted for the investment in Hallwood Energy using the equity method of accounting. Hallwood Energy filed for bankruptcy in March 2009. In connection with the confirmation of Hallwood Energy's bankruptcy in October 2009, the Company's ownership interest in Hallwood Energy was extinguished and the Company no longer accounts for the investment in Hallwood Energy using the equity method of accounting. HEALTHWAREHOUSE.COM INC: To Provide Mail-Order Services to Restat ----------------------------------------------------------------- Healthwarehouse.com, Inc., on July 31, 2012, entered into an agreement with Restat, Inc., to serve as a non-exclusive mail- order pharmacy partner to Restat and its clients. Through the partnership, HealthWarehouse.com will work with Restat and its clients to fulfill mail-order pharmacy services. Restat is the largest independent PBM in the United States, and currently serves more than 4,200 clients, ranging in size from the Fortune 50 to small managed care organizations, which represent over 16 million lives. About HealthWarehouse.com HealthWarehouse.com, Inc., headquartered in Florence, Kentucky, is a Verified Internet Pharmacy Practice Sites accredited retail mail-order pharmacy and healthcare e-commerce company that sells discounted generic and brand name prescription drugs, as well as, over-the-counter (OTC) medical products. In the auditors' report accompanying the consolidated financial statement for the year ended Dec. 31, 2011, Marcum LLP, in New York, N.Y., expressed substantial doubt about HealthWarehouse.com's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. The Company reported a net loss of $5.71 million on $10.36 million of sales in 2011, compared with a net loss of $3.69 million on $5.69 million of sales in 2010. The Company's balance sheet at Dec. 31, 2011, showed $2.67 million in total assets, $4.96 million in total liabilities, redeemable preferred stock of $566,394, and a stockholders' deficit of $2.86 million. HIGH UP DAIRY: Owner of Convenience Stores in Va. File Chapter 11 ----------------------------------------------------------------- High Up Dairy Mart Inc. filed a Chapter 11 petition (Bankr. E.D. Va. 12-14955) in Alexandria on Aug. 14. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that High Up Dairy owns or operates seven convenience stores selling gasoline. Based in Leesburg, Virginia, the company generated $90 million of revenue in 2011 and $40 million in the first half of 2012. The Debtor estimated just up to $50,000 in assets and more than $10 million in debt. HORIZON VILLAGE: Plan Exclusivity Extended Beyond Confirmation -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada extended Horizon Village Square LLC's exclusive period to solicit acceptances for the amended Plan of Reorganization until the 15th day after the Court enters its order on confirmation of the Plan. On Oct. 25, 2011, the Debtor filed a plan. The Debtor filed its Disclosure Statement on Nov. 16, 2011. The Debtor's creditors have already voted to accept or reject the Plan, and plan confirmation proceedings have concluded. Secured creditor Wells Fargo, which objected to the open-ended exclusivity request, said the Debtor's Plan represents a "kick the can down the road" approach that assumes the Debtor will be able to refinance its debt or sell Wells Fargo's collateral and pay the then-due balance in full within five years. Wells Fargo has sought relief from the automatic stay so that the Court could "test" the Plan at the confirmation hearing and decide whether the Debtor has met its burden of proof under Section 1129 of the Bankruptcy Code, or whether the Court should grant stay relief. About Horizon Village Horizon Village Square LLC (Bankr. D. Nev. Case No. 11-21034) owns the Vons-anchored Horizon Village Square Shopping Center near I-515 and Horizon Drive in Henderson. The property includes five retail buildings with nearly 43,000 square feet of space. Ten Saints LLC (Bankr. D. Nev. Case No. 11-21028) owns the 134- room Hampton Inn & Suites at St. Rose Parkway and Seven Hills Drive in Henderson. Beltway One Development Group LLC (Bankr. D. Nev. Case No. 11- 21026) owns the Desert Canyon Business Park at Russell Road and the Las Vegas Beltway. It has two buildings and 15 acres. Nigro HQ LLC (Bankr. D. Nev. Case No. 11-21014) owns an office building at 9115 W. Russell Road occupied by Bank of George, Infinity Plus LLC and Nigro Construction Inc. Todd Nigro said the four bankruptcies were caused by threatened foreclosures -- typically related to Wells Fargo Bank demanding payments to keep loan-to-value ratios at specified levels. Judge Mike K. Nakagawa presides over the cases. Lawyers at Gordon Silver serve as the Debtors' bankruptcy counsel. The bankruptcy petitions estimated assets and debts from $1 million to $10 million each for Nigro HQ; and from $10 million to $50 million in both assets and debts for Horizon Village, Ten Saints and Beltway One. The cases are not jointly administered. A fifth related business, Russell Boulder LLC, filed for bankruptcy (Bankr. D. Nev. Case No. 10-29724) on Oct. 19, 2010. It owns the 600-suite Siena Suites extended stay property at Boulder Highway and Russell Road. Edward M. Zachary, Esq., at Bryan Cave LLP, in Bryan Cave LLP, in Phoenix, Ariz., and Robert M. Charles, Jr., Esq., at Lewis and Roca LLP, in Los Vegas, Nev., represent Wells Fargo Bank, N.A., as counsel. HORNE INTERNATIONAL: Incurs $506,000 Net Loss in Second Quarter --------------------------------------------------------------- Horne International, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $506,000 on $974,000 of revenue for the three months ended June 24, 2012, compared with net income of $739,000 on $1.30 million of revenue for the three months ended June 26, 2011. The Company reported a net loss of $842,000 on $2.40 million of revenue for the six months ended June 24, 2012, compared with net income of $474,000 on $2.33 million of revenue for the six months eded June 26, 2011. The Company's balance sheet at June 24, 2012, showed $1.19 million in total assets, $2.48 million in total liabilities and a $1.28 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/ANwBqq About Horne International Fairfax, Va.-based Horne International, Inc., is an engineering services company focused on provision of integrated, systems approach based solutions to the energy and environmental sectors. The Company reported a net and total comprehensive loss of $121,000 on $5.68 million of revenue for the 12 months ended Dec. 25, 2011, compared with a net and total comprehensive loss of $1.04 million on $3.43 million of revenue for the 12 months ended Dec. 26, 2010. In its audit report accompanying the 2011 financial statements, Stegman & Company, in Baltimore, Maryland, expressed substantial doubt as to the Company's ability to continue as a going concern. The independent auditors noted that the Company has experienced continuing net losses for each of the last four years and as of Dec. 25, 2011, current liabilities exceeded current assets by $900,000. HOSTESS BRANDS: Teamsters Union Members Will Vote on Final Offer ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Teamsters union members at Hostess Brands Inc. will vote on a final offer from the baker of Wonder Bread that includes an 8% reduction in wages along with work-rule and benefit concessions. In a letter to employees, Hostess President and CEO Gregory F. Rayburn touted the agreement with the International Brotherhood of Teamsters, the result of months of negotiations, and said the IBT agreed to let its members vote on the company's final offer, according to Bankruptcy Law360. According to the Bloomberg report, although the union isn't recommending that workers vote for or against the contract, the Teamsters told their membership that "rejecting it outright means the loss of your jobs." The Teamsters will count votes by the Hostess workers on Sept. 14, the union said on its Web site. In a letter to the workers on the company's Web site, Hostess said the new contract proposal is supported by secured lenders. If accepted, Hostess said it will use the new Teamsters contract as a "blueprint" for agreements with the other unions, including the bakery workers' union. The Teamsters is the company's largest union. The Bloomberg report relates that Hostess said its offer will allow "efficiency in product deliveries" while giving union workers two seats on a new nine-member board. Although the offer includes an 8% wage cut under a five-year contract, Hostess said wages will rise by 3 percentage points in the second year and another percentage point in the fifth year. The report notes that Hostess told workers it may sell the Merita bread business. Consequently, workers at Merita will have whatever wages, work rules and benefits a buyer may seek to impose. After trial, the bankruptcy judge ruled in mid-May that Hostess could modify contracts with the Teamsters so long as the company made specified changes in the proposal for a new contract. According to the Bloomberg report, in a second ruling in late June, the judge said Hostess couldn't use the Chapter 11 reorganization to modify wages and benefits under union contracts that expired by their terms. As to contracts that ended on their own, the judge ruled that Hostess must use procedures required by nonbankruptcy labor law to modify the terms of employment and benefits for workers covered by expired contracts. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. HOSTESS BRANDS: Plan Filing Exclusivity Extended Nov. 6 ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended Hostess Brands, Inc., et al.'s exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Nov. 6, 2012, and Jan. 7, 2013, respectively. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. HOSTESS BRANDS: Interstate Brands Files Second Amended Schedules ---------------------------------------------------------------- Interstate Brands Corporation, debtor-affiliate of Hostess Brands, Inc., et al., filed with the U.S. Bankruptcy Court for the Southern District of New York second amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $185,414,799 B. Personal Property $1,302,241,073 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $861,224,775 E. Creditors Holding Unsecured Priority Claims $52,900,962 F. Creditors Holding Unsecured Non-priority Claims $28,085,395 ----------- ----------- TOTAL $1,487,655,872 $942,211,132 IBC Sales Corporation also filed amended schedules disclosing $219,731,555 in assets and $1,581,226,835 in liabilities. Copies of the amended schedules are available for free at: http://bankrupt.com/misc/HOSTESS_BRANDS_ibcsales_sal.pdf http://bankrupt.com/misc/HOSTESS_BRANDS_interstatebrands_sal.pdf About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. HORIYOSHI WORLDWIDE: Posts $572,900 Net Loss in Second Quarter -------------------------------------------------------------- Horiyoshi Worldwide, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $572,919 on $146,283 of revenue for the three months ended June 30, 2012, compared with a net loss of $685,260 on $38,003 of revenue for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $1.2 million on $462,844 of revenue, compared with a net loss of $1.1 million on $269,288 of revenue for the same period of 2011. The Company's balance sheet at June 30, 2012, showed $2.0 million in total assets, $1.3 million in total current liabilities, and stockholders' equity of $694,698. "As of June 30, 2012, our Company has accumulated losses of $4,908,259 since inception and has earned no net income since inception. Our Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending Dec. 31, 2012." A copy of the Form 10-Q is available for free at: http://is.gd/bWvPw6 Los Angeles, Calif.-based Horiyoshi Worldwide, Inc., is engaged in the design and production of the "Horiyoshi" and "Heroes & Demons" collections and the operation of its branded retail store in London, England. * * * As reported in the TCR on April 9, 2012, EFP Rotenberg, LLP, in Rochester, New York, expressed substantial doubt about Horiyoshi Worldwide'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 accumulated losses of $3,732,640 since inception. HOWREY LLP: Bankruptcy Will Rely on Contingency Fees, Ex-Partners ----------------------------------------------------------------- Lana Birbrair at Bankruptcy Law360 reports that Howrey LLP's trustee told a California bankruptcy court on Monday that paying off creditors will require the recovery of major contingency fees and going after ex-partners who received distributions when the firm was insolvent or took their unfinished business to new firms. In his first interim report, Bankruptcy Law360 relates, Diamond McCarthy LLP managing partner Allan B. Diamond said the firm has "tackled many complex issues and successfully advanced this bankruptcy case" since his appointment in October. About Howrey LLP Three creditors filed an involuntary Chapter 7 petition (Bankr. N.D. Calif. Case No. 11-31376) on April 11, 2011, against the remnants of the Washington-based law firm Howrey LLP. The filing was in San Francisco, where the firm had an office. The firm previously was known as Howrey & Simon and Howrey Simon Arnold & White LLP. The firm at one time had more than 700 lawyers in 17 offices. The partners voted to dissolve in March 2011. The firm specialized in antitrust and intellectual-property matters. The three creditors filing the involuntary petition together have $36,600 in claims, according to their petition. The involuntary chapter 7 petition was converted to a chapter 11 case in June 2011 at the request of the firm. In its schedules filed in July, the Debtor disclosed assets of $138.7 million and liabilities of $107.0 million. Representing Citibank, the firm's largest creditor, is Kelley Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton & Garrison. Representing Howrey is H. Jason Gold, Esq., a partner at Wiley Rein. The Official Committee of Unsecured Creditors is represented in the case by Bradford F. Englander, Esq., at Whiteford, Taylor And Preston LLP. In September 2011, Citibank sought conversion of the Debtor's case to Chapter 7 or, in the alternative, appointment of a Chapter 11 Trustee. The Court entered an order appointing a Chapter 11 Trustee. In October 2011, Allan B. Diamond was named as Trustee. INCOMING INC: Had $100,300 Net Loss in Second Quarter ----------------------------------------------------- Incoming, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $100,367 on $191,400 of revenue for the three months ended June 30, 2012, compared with a net loss of $61,746 on $437,274 of revenue for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $153,839 on $330,471 of revenue, compared with a net loss of $213,327 on $515,899 of revenue for the same period in 2011. The Company's balance sheet at June 30, 2012, showed $1.3 million in total assets, $847,569 in total liabilities, and stockholders' equity of $464,001. "As of June 30, 2012, the Company had a working capital deficiency of $241,205, and had an accumulated deficit of $5,686,817, since inception. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time. These factors raise substantial doubt that the Company will be able to continue as a going concern." MaloneBailey, LLP, in Houston, expressed substantial doubt about Incoming's ability to continue as a going concern, following their audit of the Company's financial statements for the year ended Dec. 31, 2011. The Company noted that the Company has suffered recurring losses from operations, which raises substantial doubt about its ability to continue as a going concern. A copy of the Form 10-Q is available for free at: http://is.gd/rgyWmz Incoming, Inc., headquartered in New York City, was incorporated in Nevada on Dec. 22, 2006. Its subsidiary North American Bio- Energies, LLC, operates a biodiesel production facility doing business as Foothills Bio-Energies in Lenoir, North Carolina. INFUSION BRANDS: Vicis Capital Discloses 91.1% Equity Stake ----------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Vicis Capital LLC disclosed that, as of Aug. 10, 2012, it beneficially owns 438,502,441 shares of common stock of Infusion Brands International, Inc., representing 91.1% of the shares outstanding. A copy of the filing is available for free at http://is.gd/AniPS0 About Infusion Brands Infusion Brands International, Inc. is a global consumer products company. Its wholly owned operating subsidiary, Infusion Brands, Inc. specializes in building and marketing profitable brands through international direct-to-consumer channels of distribution. On Dec. 16, 2010, as part of its quasi-reorganization in order to change its business model from that of an acquisition strategy to a singular operating model as a consumer products company which builds and markets brands internationally through direct-to- consumers channels of distribution, OmniReliant Holdings, Inc. entered into an agreement and plan of merger with Infusion Brands International, Inc., a Nevada corporation and the Company's wholly-owned subsidiary. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, the Company merged with and into Infusion Brands International, Inc., solely to effect a name change of the Company. Meeks International LLC, in Tampa, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant recurring losses from operations and is dependent on outside sources of financing for continuation of its operations and management is restructuring and redirecting its operating initiatives that require the use of its available capital resources. The Company reported a net loss of $6.94 million on $17.94 million of product sales in 2011, compared with a net loss of $16.07 million on $7.17 million of product sales in 2010. The Company's balance sheet at March 31, 2012, showed $7.25 million in total assets, $7.33 million in total liabilities, $25.13 million in redeemable preferred stock, and a $25.20 million total deficit. INFUSYSTEM HOLDINGS: CFO J. Foster Has Consulting Agreement ----------------------------------------------------------- On March 23, 2012, the board of directors of Infusystem Holdings Inc. appointed Jonathan P. Foster to the position of Chief Financial Officer of the Company. In connection therewith, the Company entered into a Consulting Agreement dated Aug. 14, 2012 with Mr. Foster, pursuant to which: (i) Mr. Foster will continue to serve as Chief Financial Officer as a consultant of the Company through March 16, 2013, which term is renewable under certain conditions for an additional six months at the Company's option; (ii) Mr. Foster will be paid $50,000 per month through the Term, including following termination under certain conditions; (iii) under certain events during Mr. Foster's service, or within 30 days of Mr. Foster's termination without cause, Mr. Foster will be paid $125,000; and (iv) the Company will reimburse Mr. Foster for legal expenses incurred in negotiating the Consulting Agreement and First Amendment. About InfuSystem Holdings InfuSystem Holdings, Inc., operates through operating subsidiaries, including InfuSystem, Inc., and First Biomedical, Inc. InfuSystem provides infusion pumps and related services. InfuSystem provides services to hospitals, oncology practices and facilities and other alternate site healthcare providers. Headquartered in Madison Heights, Michigan, InfuSystem delivers local, field-based customer support, and also operates pump service and repair Centers of Excellence in Michigan, Kansas, California, and Ontario, Canada. After auditing the Company's 2011 financial statements, Deloitte & Touche LLP, in Detroit, Michigan, said that the possibility of a change in the majority representation of the Board and consequent event of default under the Credit Facility, which would allow the lenders to cause the debt of $24.0 million to become immediately due and payable, raises substantial doubt about the Company's ability to continue as a going concern. The Company reported a net loss of $45.44 million in 2011, compared with a net loss of $1.85 million in 2010. The Company's balance sheet at June 30, 2012, showed $74.72 million in total assets, $35.52 million in total liabilities and $39.20 million in total stockholders' equity. INTELLIGENT COMMUNICATION: Has $474,800 Net Loss in 2nd Quarter --------------------------------------------------------------- Intelligent Communication Enterprise Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $474,836 on $107,915 of revenue for the three months ended June 30, 2012, compared with net income of $2.4 million on $0 revenue for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $670,203 on $107,915 of revenue, compared with net income of $1.2 million on $0 revenue for the same period of 2011. Results for the three and six month periods ended June 30, 2011, includes income from discontinued operations of $4.4 million. According to the regulatory filing, on May 10, 2011, the Company completed the sale of two subsidiaries, ICE Mobile Sdn. Bhd. and ICE Messaging Pte. Ltd., which comprised all of the Company's messaging business (iCEmms) operations, assets, and liabilities. Consideration received was $2.37 million in cash and return of 110 million shares of the Company's common stock, which had a fair value of $2.75 million as of the closing date. The buyer had previously acquired the 110 million shares of the Company's stock in a private transaction. These 110 million shares have been canceled and returned to the Company's authorized but unissued shares. The Company's balance sheet at June 30, 2012, showed $1.7 million in total assets, $1.1 million in total current liabilities, and stockholders equity of $588,772. "During the year ended Dec. 31, 2011, the Company sold its iCEmms division, which was its only revenue-producing division. The Company used cash received from the sale of its iCEmms division to retire debt and fund the iCEsync business, but the Company's intention is to raise additional equity to finance the further development of markets for its products and services until positive cash flows can be generated from its operations. However, the Company cannot assure that additional funds will be available to the Company when required or on terms acceptable to the Company, if at all. These conditions raise substantial doubt about the Company?s ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/JiZdPV Singapore-based Intelligent Communication Enterprise Corporation has continuing operations providing multimedia content and integrated media services. The iCEsync business using the Modizo.com platform is distributing video content to website visitors and attracting advertising revenue. * * * Peterson Sullivan LLP, in Seattle, Washington, expressed substantial doubt about Intelligent Communication'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 losses, and has negative working capital and an accumulated deficit at Dec. 31, 2011. INTERNATIONAL LEASE: Fitch to Rate Senior Unsecured Notes 'BB' -------------------------------------------------------------- Fitch Ratings expects to assign a rating of 'BB' to International Lease Finance Corp.'s (ILFC) benchmark size senior unsecured notes issuance under its shelf registration with an expected maturity of 2022. The expected debt issuance does not affect ILFC's existing long- term Issuer Default Rating (IDR) of ' BB' or debt ratings. The Rating Outlook for ILFC remains Stable. For further information on ILFC's existing ratings, please refer to Fitch's press release 'Fitch Affirms International Lease Finance Corp.'s IDR at 'BB'; Outlook Stable' dated Nov. 4, 2011. Fitch notes that the proposed issuance is consistent with ILFC's overall financing plans to repay near-term maturing debt obligations and for general corporate purposes. The notes are expected to rank equally in right of payment with existing senior unsecured debt. Covenants are expected to be consistent with previously issued senior unsecured debt including a limitation restricting ILFC's ability to incur liens to secure indebtedness in excess of 12.5% of ILFC's consolidated net tangible assets (excluding secured debt issued by certain non- restricted subsidiaries of ILFC). Rating Drivers and Sensitivities ILFC's ratings are constrained by the company's lack of profitability over the past two fiscal years, which has been caused by significant impairment charges on older aircraft, as well as the weighted average age of its fleet, which is older than Fitch-rated peers. Negative momentum for the ratings and Rating Outlook could result from additional impairment charges that are material in size, inability to access capital markets to fund debt maturities or purchase commitments, deterioration in operating cash flow or a meaningful increase in leverage. While positive rating momentum is not likely in the near term, over a longer-term time horizon, positive drivers could include consistent profitability, demonstrated funding flexibility and commitment to reduced leverage levels and clarity regarding ownership structure. ILFC is a market leader in the leasing and remarketing of commercial jet aircraft to airlines around the world. As of June 30, 2012, ILFC owned an aircraft portfolio with a net book value of approximately $35 billion, consisting of 933 jet aircraft. Fitch expects to assign the following rating: -- ILFC's proposed benchmark size senior unsecured notes 'BB'. Fitch currently rates ILFC and its related subsidiaries as follows: International Lease Finance Corp. -- Long-term Issuer Default Rating 'BB'; Outlook Stable; -- $3.9 billion senior secured notes 'BBB-'; -- Senior unsecured debt 'BB'; -- Preferred stock 'B'. Delos Aircraft Inc. -- Senior secured debt 'BB'. Flying Fortress Inc. -- Senior secured debt 'BB'. ILFC E-Capital Trust I -- Preferred stock 'B'. ILFC E-Capital Trust II -- Preferred stock 'B'. IRONSTONE GROUP: Had $42,100 Net Loss in Second Quarter ------------------------------------------------------- Ironstone Group, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $42,108 for the three months ended June 30, 2012, compared with a net loss of $28,431 for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $55,863, compared with a net loss of $41,615 for the same period of 2011. The Company's balance sheet at June 30, 2012, showed $1.1 million in total assets, $1.4 million in total liabilities, and a stockholders' deficit of $272,781. A copy of the Form 10-Q is available for free at: http://is.gd/rx3jRa San Francisco, Calif.-based Ironstone Group, Inc., and subsidiaries have no operations but are seeking appropriate business combination opportunities. At June 30, 2012, the Company had $1,003,120 in marketable securities, $4,218 in cash, and an investment in Salon Media Group, Inc., valued at $92,297. * * * Madsen & Associates CPA's, Inc., in Murray, Utah, expressed substantial doubt about Ironstone Group'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 does not have the necessary working capital for its planned activity. IZEA INC: Had $1.8 Million Net Loss in Second Quarter ----------------------------------------------------- IZEA, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $1.8 million on $1.2 million of revenue for the three months ended June 30, 2012, compared with a net loss of $589,956 on $845,901 of revenue for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $2.8 million on $2.8 million of revenue, compared with a net loss of $1.2 million on $1.8 million of revenue for the same period of 2011. The Company's balance sheet at June 30, 2012, showed $1.4 million in total assets, $3.5 million in total liabilities, and a stockholders' deficit of $2.1 million. The Company has incurred significant losses from operations since inception and has an accumulated deficit of $20.9 million as of June 30, 2012. Cross, Fernandez & Riley, LLP, in Orlando, Florida, expressed substantial doubt about IZEA'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 recurring operating losses and had an accumulated deficit at Dec. 31, 2011, of $18.1 million. A copy of the Form 10-Q is available for free at: http://is.gd/mq0vNk IZEA, Inc., headquartered in Orlando, Fla., believes it is a world leader in social media sponsorships ("SMS"), a rapidly growing segment within social media where a company compensates a social media publisher to share sponsored content within their social network. The Company accomplishes this by operating multiple marketplaces that include its platforms SocialSpark, SponsoredTweets and WeReward, as well as its legacy platforms PayPerPost and InPostLinks. JENNE HILL: Cambria Associates' John Schnure OK'd as Consultant --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri authorized Jenne Hill Townhomes, L.L.C. to employ John B. Schnure of Cambria Associates as a consultant. About Jenne Hill Columbia, Missouri-based Jenne Hill Townhomes, L.L.C., is a Missouri limited liability company that owns and operates a complex of high end townhomes in Columbia, Missouri. The Debtor filed for Chapter 11 bankruptcy (Bank. W.D. Mo. Case No.11-22129) on Dec. 22, 2011. In its schedules, the Debtor disclosed $14,131,453 in assets and $9,743,209 in liabilities. The petition was signed by Fredd Spencer, manager. Judge Dennis R. Dow presides over the case. Bryan C. Bacon, Esq., at Van Matre, Harrison, Hollis, and Taylor, P.C., in Columbia, Missouri, serves as the Debtor's counsel. Plan payments and distributions under the Plan will be funded by the Debtor's rental income from the Townhome Complex. Under the Plan, Wells Fargo is entitled to interest of $3.27% per annum on the 2008 note and 5.25% on the 2009 note. Wells Fargo's secured claim of $9,607,243 will be amortized over 25 years with interest at 5.5% per annum, which yields a monthly payment of $58,996. General unsecured claims in the aggregate amount of approximately $23,203 will be paid in full in cash within 30 days of the Effective Date of the confirmed Plan. KNIGHT CAPITAL: GETCO Owns 37.4% of Class A Common Shares --------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, GETCO Strategic Investments, LLC, and GETCO Holding Company, LLC, disclosed that, as of Aug. 6, 2012, they beneficially own 58,334,429 shares of Class A Common Stock, Par Value $0.01 Per Share, of Knight Capital Group, Inc., representing 37.4% of the shares outstanding. On Aug. 6, 2012, GSI purchased 17,413 shares of Series A-1 Cumulative Perpetual Convertible Preferred Stock and 70,087 shares of Series A-2 Non-Voting Cumulative Perpetual Convertible Preferred Stock from the Company in a private placement for an aggregate purchase price of $87.5 million. The purchase amount was funded by cash on hand at Getco Holding. A copy of the filing is available for free at http://is.gd/KfvZbM About Knight Capital Knight Capital Group (NYSE Euronext: KCG) -- http://www.knight.com/-- is a global financial services firm that provides access to the capital markets across multiple asset classes to a broad network of clients, including broker-dealers, institutions and corporations. Knight is headquartered in Jersey City, N.J. with a global presence across the Americas, Europe, and the Asia Pacific regions. At the start of trading on Aug. 1, Knight Capital installed a trading software to push itself onto a new trading platform that the New York Stock Exchange opened that day. But when Knight's new system went live, the firm "experienced a human error and/or a technology malfunction related to its installation of trading software." The error caused Knight to place unauthorized offers to buy and sell shares of big American companies, driving up the volume of trading and causing a stir among traders and exchanges. The orders affected the shares of 148 companies, including Ford Motor, RadioShack and American Airlines, sending the markets into upheaval. Knight had to sell the stocks that it accidentally bought, prompting a $440 million pre-tax loss, the firm announced Aug. 2. Knight Capital averted collapse after announcing Aug. 6 that it has arranged $400 million in equity financing with Wall Street firms including Jefferies Group, Inc., which conceived and structured the investment, as well as Blackstone, GETCO LLC, Stephens, Stifel Financial Corp. and TD Ameritrade Holding Corporation. Knight has said that the software that led to the Aug. 1 trading issue has been removed from the company's systems. The New York Stock Exchange nonetheless said Aug. 7 said it "temporarily" reassigned the firm's market-making responsibilities for more than 600 securities to Getco, the high-speed trading firm that also invested in Knight. "This event severely impacted the Company's capital base and business operations, and the Company experienced reduced order flow, liquidity pressures and harm to customer and counterparty confidence," the Company said in its quarterly report for the period ended June 30, 2012. "As a result, there was substantial doubt about the Company's ability to continue as a going concern." Following the event of Aug. 1, 2012, the Company has begun an internal review into such event and associated controls. The Company's balance sheet at June 30, 2012, showed $9.19 billion in total assets, $7.69 billion in total liabilities and $1.49 billion in total equity. KNIGHT CAPITAL: Jefferies & Company Owns 46% of Class A Shares -------------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Jefferies & Company, Inc., and its affiliates disclosed that, as of Aug. 6, 2012, they beneficially own 83,433,375 shares of Class A Common Stock, par value $0.01 per share, of Knight Capital Group, Inc., representing 46% of the shares outstanding. On Aug. 6, 2012, Knight Capital entered into a Securities Purchase Agreement with Jefferies and other investors, pursuant to which, among other things, the Company issued and sold 400,000 shares of preferred stock, par value $0.01 per share, in a private placement to the Investors in exchange for aggregate cash consideration of $400,000,000. A copy of the filing is available for free at: http://is.gd/YdQaO9 About Knight Capital Knight Capital Group (NYSE Euronext: KCG) -- http://www.knight.com/-- is a global financial services firm that provides access to the capital markets across multiple asset classes to a broad network of clients, including broker-dealers, institutions and corporations. Knight is headquartered in Jersey City, N.J. with a global presence across the Americas, Europe, and the Asia Pacific regions. At the start of trading on Aug. 1, Knight Capital installed a trading software to push itself onto a new trading platform that the New York Stock Exchange opened that day. But when Knight's new system went live, the firm "experienced a human error and/or a technology malfunction related to its installation of trading software." The error caused Knight to place unauthorized offers to buy and sell shares of big American companies, driving up the volume of trading and causing a stir among traders and exchanges. The orders affected the shares of 148 companies, including Ford Motor, RadioShack and American Airlines, sending the markets into upheaval. Knight had to sell the stocks that it accidentally bought, prompting a $440 million pre-tax loss, the firm announced Aug. 2. Knight Capital averted collapse after announcing Aug. 6 that it has arranged $400 million in equity financing with Wall Street firms including Jefferies Group, Inc., which conceived and structured the investment, as well as Blackstone, GETCO LLC, Stephens, Stifel Financial Corp. and TD Ameritrade Holding Corporation. Knight has said that the software that led to the Aug. 1 trading issue has been removed from the company's systems. The New York Stock Exchange nonetheless said Aug. 7 said it "temporarily" reassigned the firm's market-making responsibilities for more than 600 securities to Getco, the high-speed trading firm that also invested in Knight. "This event severely impacted the Company's capital base and business operations, and the Company experienced reduced order flow, liquidity pressures and harm to customer and counterparty confidence," the Company said in its quarterly report for the period ended June 30, 2012. "As a result, there was substantial doubt about the Company's ability to continue as a going concern." Following the event of Aug. 1, 2012, the Company has begun an internal review into such event and associated controls. The Company's balance sheet at June 30, 2012, showed $9.19 billion in total assets, $7.69 billion in total liabilities and $1.49 billion in total equity. KNIGHT CAPITAL: TD Ameritrade Holds 7.3% of Class A Shares ---------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, TD Ameritrade Holding Corporation disclosed that, as of Aug. 6, 2012, it beneficially owns 26,666,680 shares of Class A Common Stock, par value $0.01 per share, of Knight Capital Group, Inc., representing 7.3% of the shares outstanding. On Aug. 6, 2012, Knight Capital entered into a Securities Purchase Agreement with TD Ameritrade and the other parties pursuant to which, among other things, the Company sold, and TD Ameritrade purchased, 7,960 shares of Series A-1 Shares and 32,040 shares of Series A-2 Shares in a private placement for cash consideration of $40,000,000. A copy of the filing is available for free at http://is.gd/vuw7VK About Knight Capital Knight Capital Group (NYSE Euronext: KCG) -- http://www.knight.com/-- is a global financial services firm that provides access to the capital markets across multiple asset classes to a broad network of clients, including broker-dealers, institutions and corporations. Knight is headquartered in Jersey City, N.J. with a global presence across the Americas, Europe, and the Asia Pacific regions. At the start of trading on Aug. 1, Knight Capital installed a trading software to push itself onto a new trading platform that the New York Stock Exchange opened that day. But when Knight's new system went live, the firm "experienced a human error and/or a technology malfunction related to its installation of trading software." The error caused Knight to place unauthorized offers to buy and sell shares of big American companies, driving up the volume of trading and causing a stir among traders and exchanges. The orders affected the shares of 148 companies, including Ford Motor, RadioShack and American Airlines, sending the markets into upheaval. Knight had to sell the stocks that it accidentally bought, prompting a $440 million pre-tax loss, the firm announced Aug. 2. Knight Capital averted collapse after announcing Aug. 6 that it has arranged $400 million in equity financing with Wall Street firms including Jefferies Group, Inc., which conceived and structured the investment, as well as Blackstone, GETCO LLC, Stephens, Stifel Financial Corp. and TD Ameritrade Holding Corporation. Knight has said that the software that led to the Aug. 1 trading issue has been removed from the company's systems. The New York Stock Exchange nonetheless said Aug. 7 said it "temporarily" reassigned the firm's market-making responsibilities for more than 600 securities to Getco, the high-speed trading firm that also invested in Knight. "This event severely impacted the Company's capital base and business operations, and the Company experienced reduced order flow, liquidity pressures and harm to customer and counterparty confidence," the Company said in its quarterly report for the period ended June 30, 2012. "As a result, there was substantial doubt about the Company's ability to continue as a going concern." Following the event of Aug. 1, 2012, the Company has begun an internal review into such event and associated controls. The Company's balance sheet at June 30, 2012, showed $9.19 billion in total assets, $7.69 billion in total liabilities and $1.49 billion in total equity. KNIGHT CAPITAL: Stephen Schwarzman Owns 10.6% of Class A Shares --------------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Stephen A. Schwarzman and his affiliates disclosed that, as of Aug. 6, 2012, they beneficially own 11,607,339 shares of Class A Common Stock, par value $0.01 per share, of Knight Capital Group, Inc., representing 10.6% of the shares outstanding. A copy of the filing is available for free at http://is.gd/WlzWR0 About Knight Capital Knight Capital Group (NYSE Euronext: KCG) -- http://www.knight.com/-- is a global financial services firm that provides access to the capital markets across multiple asset classes to a broad network of clients, including broker-dealers, institutions and corporations. Knight is headquartered in Jersey City, N.J. with a global presence across the Americas, Europe, and the Asia Pacific regions. At the start of trading on Aug. 1, Knight Capital installed a trading software to push itself onto a new trading platform that the New York Stock Exchange opened that day. But when Knight's new system went live, the firm "experienced a human error and/or a technology malfunction related to its installation of trading software." The error caused Knight to place unauthorized offers to buy and sell shares of big American companies, driving up the volume of trading and causing a stir among traders and exchanges. The orders affected the shares of 148 companies, including Ford Motor, RadioShack and American Airlines, sending the markets into upheaval. Knight had to sell the stocks that it accidentally bought, prompting a $440 million pre-tax loss, the firm announced Aug. 2. Knight Capital averted collapse after announcing Aug. 6 that it has arranged $400 million in equity financing with Wall Street firms including Jefferies Group, Inc., which conceived and structured the investment, as well as Blackstone, GETCO LLC, Stephens, Stifel Financial Corp. and TD Ameritrade Holding Corporation. Knight has said that the software that led to the Aug. 1 trading issue has been removed from the company's systems. The New York Stock Exchange nonetheless said Aug. 7 said it "temporarily" reassigned the firm's market-making responsibilities for more than 600 securities to Getco, the high-speed trading firm that also invested in Knight. "This event severely impacted the Company's capital base and business operations, and the Company experienced reduced order flow, liquidity pressures and harm to customer and counterparty confidence," the Company said in its quarterly report for the period ended June 30, 2012. "As a result, there was substantial doubt about the Company's ability to continue as a going concern." Following the event of Aug. 1, 2012, the Company has begun an internal review into such event and associated controls. The Company's balance sheet at June 30, 2012, showed $9.19 billion in total assets, $7.69 billion in total liabilities and $1.49 billion in total equity. KNIGHT CAPITAL: Stephens Investments Owns 20-Mil. Common Shares --------------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Stephens Investments Holdings LLC and its affiliates disclosed that, as of Aug. 6, 2012, they beneficially own 20,000,010 shares of common stock of Knight Capital Group, Inc., representing 17% of the shares outstanding. A copy of the filing is available for free at http://is.gd/R0kxVc About Knight Capital Knight Capital Group (NYSE Euronext: KCG) -- http://www.knight.com/-- is a global financial services firm that provides access to the capital markets across multiple asset classes to a broad network of clients, including broker-dealers, institutions and corporations. Knight is headquartered in Jersey City, N.J. with a global presence across the Americas, Europe, and the Asia Pacific regions. At the start of trading on Aug. 1, Knight Capital installed a trading software to push itself onto a new trading platform that the New York Stock Exchange opened that day. But when Knight's new system went live, the firm "experienced a human error and/or a technology malfunction related to its installation of trading software." The error caused Knight to place unauthorized offers to buy and sell shares of big American companies, driving up the volume of trading and causing a stir among traders and exchanges. The orders affected the shares of 148 companies, including Ford Motor, RadioShack and American Airlines, sending the markets into upheaval. Knight had to sell the stocks that it accidentally bought, prompting a $440 million pre-tax loss, the firm announced Aug. 2. Knight Capital averted collapse after announcing Aug. 6 that it has arranged $400 million in equity financing with Wall Street firms including Jefferies Group, Inc., which conceived and structured the investment, as well as Blackstone, GETCO LLC, Stephens, Stifel Financial Corp. and TD Ameritrade Holding Corporation. Knight has said that the software that led to the Aug. 1 trading issue has been removed from the company's systems. The New York Stock Exchange nonetheless said Aug. 7 said it "temporarily" reassigned the firm's market-making responsibilities for more than 600 securities to Getco, the high-speed trading firm that also invested in Knight. "This event severely impacted the Company's capital base and business operations, and the Company experienced reduced order flow, liquidity pressures and harm to customer and counterparty confidence," the Company said in its quarterly report for the period ended June 30, 2012. "As a result, there was substantial doubt about the Company's ability to continue as a going concern." Following the event of Aug. 1, 2012, the Company has begun an internal review into such event and associated controls. The Company's balance sheet at June 30, 2012, showed $9.19 billion in total assets, $7.69 billion in total liabilities and $1.49 billion in total equity. KNIGHT CAPITAL: Stifel Financial Owns 4.9% of Class A Shares ------------------------------------------------------------ In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Stifel Financial Corp., disclosed that, as of Aug. 6, 2012, it beneficially owns 17,908,009 shares of Class A Common Stock, $0.01 par value, of Knight Capital Group, Inc., representing 4.9% of the shares outstanding. A copy of the filing is available for free at http://is.gd/hBjpEl About Knight Capital Knight Capital Group (NYSE Euronext: KCG) -- http://www.knight.com/-- is a global financial services firm that provides access to the capital markets across multiple asset classes to a broad network of clients, including broker-dealers, institutions and corporations. Knight is headquartered in Jersey City, N.J. with a global presence across the Americas, Europe, and the Asia Pacific regions. At the start of trading on Aug. 1, Knight Capital installed a trading software to push itself onto a new trading platform that the New York Stock Exchange opened that day. But when Knight's new system went live, the firm "experienced a human error and/or a technology malfunction related to its installation of trading software." The error caused Knight to place unauthorized offers to buy and sell shares of big American companies, driving up the volume of trading and causing a stir among traders and exchanges. The orders affected the shares of 148 companies, including Ford Motor, RadioShack and American Airlines, sending the markets into upheaval. Knight had to sell the stocks that it accidentally bought, prompting a $440 million pre-tax loss, the firm announced Aug. 2. Knight Capital averted collapse after announcing Aug. 6 that it has arranged $400 million in equity financing with Wall Street firms including Jefferies Group, Inc., which conceived and structured the investment, as well as Blackstone, GETCO LLC, Stephens, Stifel Financial Corp. and TD Ameritrade Holding Corporation. Knight has said that the software that led to the Aug. 1 trading issue has been removed from the company's systems. The New York Stock Exchange nonetheless said Aug. 7 said it "temporarily" reassigned the firm's market-making responsibilities for more than 600 securities to Getco, the high-speed trading firm that also invested in Knight. "This event severely impacted the Company's capital base and business operations, and the Company experienced reduced order flow, liquidity pressures and harm to customer and counterparty confidence," the Company said in its quarterly report for the period ended June 30, 2012. "As a result, there was substantial doubt about the Company's ability to continue as a going concern." Following the event of Aug. 1, 2012, the Company has begun an internal review into such event and associated controls. The Company's balance sheet at June 30, 2012, showed $9.19 billion in total assets, $7.69 billion in total liabilities and $1.49 billion in total equity. KRYSTAL INFINITY: May Use Cash, But Can't Pay $150,000 to Bank -------------------------------------------------------------- Krystal Infinity LLC at a hearing held Aug. 16 came away with a Court order granting the limousine maker interim authority to use its prepetition lender's cash collateral to pay necessary expenses according to a budget for the week ending Aug. 19. The order, however, prohibits the Debtor from paying the $150,000 adequate protection payment to East West Bank contained in the budget, and the Debtor may not pay any portion of the $19,863 payment earmarked for "Property Tax" that pertains to prepetition taxes. The Debtor's primary secured creditor is East West Bank. The Debtor owes EWB $5.3 million on an asset based revolving line of credit and $1.19 million on an equipment note. A further hearing on the Cash Collateral Motion will be held on Aug. 27, 2012 at 10:00 a.m. Objections are due Aug. 23. About Krystal Infinity Krystal Infinity LLC filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-19701) on Aug. 14, 2012, in Santa Ana, California. Krystal Infinity manufactures and sells stretch limousines, limousine vans, shuttle buses, limousine busses and hearses. Roughly 85% of Krystal Infinity's vehicle manufacturing work is completed in Mexico through an affiliate Krystal International. The business was acquired by the Debtor through a 11 U.S.C. Sec. 363 sale conducted by Krystal Koach, Inc. (Case No. 10-26547) in January 2011. Krystal Infinity estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. Bankruptcy Judge Catherine E. Bauer presides over the case. The Debtor is represented by Ron Bender, Esq., at Levene, Neale, Bender, Yoo & Brill LLP, in Los Angeles. KRYSTAL INFINITY: Hiring Levene Neale as Bankruptcy Counsel ----------------------------------------------------------- Krystal Infinity LLC filed papers in Court seeking formal approval of Levene, Neale, Bender, Yoo & Brill L.L.P. as bankruptcy counsel. The Debtor's business was acquired through a bankruptcy court approved Section 363 asset sale conducted by the Chapter 11 bankruptcy estate of Krystal Koach, Inc. The sale was consummated in January 2011. Edward P. Grech, Krystal Infinity's President and Chief Executive Officer, was a principal of KKI before the KKI asset sale was consummated. Levene served as bankruptcy counsel to KKI in connection with KKI's Chapter 11 bankruptcy case. The Debtor paid Levene the total sum of $151,046 prior to the bankruptcy filing in connection with preparing for and commencing the Chapter 11 bankruptcy case and in contemplation of and in connection with the Debtor's Chapter 11 case: -- $150,000 of that sum constitutes a prepetition retainer for Levene; and -- $1,046 was for the payment of the Chapter 11 filing fee. The Debtor paid the Retainer and $1,046 for the Chapter 11 filing fee to Levene out of the Debtor's operating funds: -- $25,000 of the Retainer was received on July 23, and -- $125,000 of the Retainer was received on Aug. 14 prior to the Petition being filed. In addition to the Retainer and in accordance with the Debtor's proposed cash collateral budget, the Debtor requests Court authority to pay to Levene a post-petition retainer of $100,000 during the week ending Sept. 16, 2012 and a second post-petition retainer of $100,000 during the week ending Oct. 7, 2012. The firm's hourly rates are: ATTORNEY HOURLY BILLING RATES -------- -------------------- David W. Levene $595 David L. Neale $595 Ron Bender $595 Martin J. Brill $595 Timothy J. Yoo $595 Edward M. Wolkowitz $595 David B. Golubchik $595 Monica Y. Kim $565 Beth Ann R. Young $565 Daniel H. Reiss $565 Irving M. Gross $565 Philip A. Gasteier $565 Jacqueline L. James $510 Juliet Y. Oh $510 Michelle S. Grimberg $510 Todd M. Arnold $510 Todd A. Frealy $510 Anthony A. Friedman $450 Carmela T. Pagay $450 Krikor J. Meshefejian $400 John-Patrick M. Fritz $400 Gwendolen D. Long $375 Lindsey L. Smith $300 Paraprofessionals $195 Ron Bender, Esq., founding and managing partner of the law firm of Levene Neale, attests his firm does not hold or represent any interest materially adverse to the Debtor or the Debtor's estate, and the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Krystal Infinity Krystal Infinity LLC filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-19701) on Aug. 14, 2012, in Santa Ana, California. Krystal Infinity manufactures and sells stretch limousines, limousine vans, shuttle buses, limousine busses and hearses. Roughly 85% of Krystal Infinity's vehicle manufacturing work is completed in Mexico through an affiliate Krystal International. The business was acquired by the Debtor through a 11 U.S.C. Sec. 363 sale conducted by Krystal Koach, Inc. (Case No. 10-26547) in January 2011. Krystal Infinity estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. Bankruptcy Judge Catherine E. Bauer presides over the case. The Debtor is represented by Ron Bender, Esq., at Levene, Neale, Bender, Yoo & Brill LLP, in Los Angeles. LIBERTY MUTUAL: Fitch Affirms Low-B Rating on Three Note Classes ---------------------------------------------------------------- Fitch Ratings assigned a 'BBB-' debt rating to Liberty Mutual Group Inc.'s (LMG) two new senior debt issuances that total $500 million. Additionally, Fitch has affirmed LMG's Issuer Default Rating (IDR) at 'BBB' and the insurance operating subsidiaries' (collectively referred to as Liberty Mutual) Insurer Financial Strength (IFS) ratings at 'A-'. The Rating Outlook is Positive. The affirmation of Liberty Mutual's operating subsidiary ratings are based on the company's established and sustainable positions in its chosen markets, benefits derived from the company's multiple distribution channels, improved core underwriting earnings, and good liquidity profile. Fitch also recognizes Liberty Mutual's moderately improved capital position and notes that recent accident year reserve estimates continue to develop favorably. Liberty Mutual Group, Inc.'s (LMGI) new debt issues, which total $500 million, will rank equally with LMGI's existing and future unsecured senior indebtedness and are irrevocably and unconditionally guaranteed, on a senior unsecured basis, by both Liberty Mutual Holding Company Inc. (LMHC) and LMHC Massachusetts Holdings Inc. Net proceeds from the offering are expected to be used to redeem upcoming maturing notes and for general corporate purposes. Fitch notes Liberty Mutual's financial leverage as of June 30, 2012 was 24.6% and on a tangible basis was 30.5%. The additional $500 million in debt will temporarily increase financial leverage, but with approximately $490 million in debt maturing in the next year the impact on long term financial leverage is negligible. The new debt does carry a lower coupon rate than maturing debt so that should modestly improve interest coverage which was 3.6 times (x) as of June 30, 2012 and the five year average from 20007-2011 was 4.2x. For the six months ended June 30, 2012, Liberty Mutual reported a GAAP combined ratio of 103.4% that was negatively affected from natural catastrophe losses by 6.5 percentage points. LMG has reported net earnings of $598 million for the first six months of 2012, or an increase of $413 million over the first half of 2011 primarily attributable to lower catastrophes and higher premiums. Over the past several years, LMG has gradually reduced the unfavorable margin between its underwriting results and those of its peers. LMG's commercial multi-line peers have utilized larger amounts of reserve releases than LMG in recent years, which has served to benefit its reported calendar-year results. LMG's accident-year underwriting results, excluding reserve development has improved relative to peers. Fitch believes that Liberty Mutual's capital position provides an adequate cushion against the operational and financial risks the company faces. At June 30, 2012, LMG's annualized ratio of GAAP net written premium to equity was considerably higher than peers at 1.8x; however, during the first six months of 2012, LMG's shareholder's equity increased by 5.6% to $18.6 billion from $17.6 billion at Dec. 31, 2011. Key rating triggers that could lead to an upgrade include: -- Improved performance in underwriting results with a combined ratio of approximately 100%; -- Operating leverage below 1.80x; -- Financial leverage below 25%. Key rating triggers that could lead to downward rating pressure include: -- A return to accident year underwriting results that trail large multi-line peers by a wide margin of 10 points on the combined ratio; -- Material weakening in the company's current reserve position, as measured by a return to a period of multiple years of material unfavorable reserve development; -- Another large acquisition in the near term, especially if the balance sheet was weakened through increased financial leverage. Fitch has assigned a 'BBB-' to the following debt issues: Liberty Mutual Group, Inc. -- $250 million 4.95% notes due 2022 at 'BBB-'; -- $250 million 6.5% notes due 2042 at 'BBB-'. Fitch has affirmed the following ratings with a Positive Outlook: Liberty Mutual Group, Inc. -- IDR at 'BBB'; -- Short term IDR at 'F2'; -- Commercial paper at 'F2'; -- $187 million 7.25% notes due 2012 at 'BBB-'; -- $260 million 8% notes due 2013 at 'BBB-'; -- $104 million 7.3% notes due 2014 at 'BBB-'; -- $239 million 5.75% notes due 2014 at 'BBB-'; -- $249 million 6.7% notes due 2016 at 'BBB-'; -- $500 million 4.95% notes due 2022 'BBB-'; -- $3 million 7.625% notes due 2028 at 'BBB-'; -- $231 million 7% notes due 2034 at 'BBB-'; -- $471 million 6.5% notes due 2035 at 'BBB-'; -- $19 million 7.5% notes due 2036 at 'BBB-'; -- $500 million 6.5% notes due 2042 'BBB-'. -- 600 million 5.0% notes due 2021 at 'BBB-'; -- $300 million 7% junior subordinated notes due 2067 at 'BB'; -- $700 million 7.8% junior subordinated notes due 2087 at 'BB'; -- $676 million 10.75% junior subordinated notes due 2088 at 'BB'. Liberty Mutual Insurance Co. -- IDR at 'BBB+'; -- $140 million 8.5% surplus notes due 2025 'BBB'; -- $227 million 7.875% surplus notes due 2026 'BBB'; -- $260 million 7.697% surplus notes due 2097 'BBB'. Ohio Casualty Corporation -- IDR 'BBB'; -- $20.4 million 7.3% notes due 2014 'BBB-'. Safeco Corporation -- IDR 'BBB'; -- $16.7 million 7.25% notes due 2012 'BBB-'. Fitch has affirmed the 'A-' IFS with a Positive Outlook for the following members of Liberty Mutual Inter-company Insurance Pool (LMIC Pool): -- Liberty Mutual Insurance Company -- Liberty Mutual Fire Insurance Company -- Employers Insurance Company of Wausau -- Liberty Insurance Corporation -- Wausau Business Insurance Company -- Wausau Underwriters Insurance Company -- LM Insurance Corporation -- The First Liberty Insurance Corporation -- LM General Insurance Company -- Liberty Mutual Personal Insurance Company -- Liberty Personal Insurance Company -- Liberty Lloyds of Texas Insurance Company -- Liberty Surplus Insurance Corporation -- Wausau General Insurance Company -- Liberty Mutual Mid-Atlantic Insurance Company -- Insurance Company of Illinois Fitch has affirmed the 'A-' IFS of the following ratings with a Positive Outlook for the following companies that participate in a 100% quota share with the LMIC Pool: -- Liberty County Mutual Insurance Company -- LM Property and Casualty Insurance Company -- Bridgefield Casualty Insurance Company -- Bridgefield Employers Insurance Company -- Liberty Insurance Underwriters Inc. Fitch has affirmed the 'A-' IFS of the following ratings with a Positive Outlook for the following members of Peerless Insurance Inter-company Insurance Pool (Peerless Pool): -- Peerless Insurance Company -- Peerless Indemnity Insurance Company -- America First Insurance Company -- America First Lloyd's Insurance Company -- Colorado Casualty Ins. Company -- Consolidated Insurance Company -- Excelsior Insurance Company -- Golden Eagle Ins. Corporation -- Hawkeye-Security Insurance Company -- Indiana Insurance Company -- Mid-American Fire & Casualty -- The Midwestern Indemnity Company -- Montgomery Mutual Insurance Company -- The Netherlands Insurance Company -- National Insurance Association -- The Ohio Casualty Insurance Company -- West American Insurance Company -- American Fire and Casualty Company -- Ohio Security Insurance Company -- Safeco Insurance Company of Illinois -- American Economy Insurance Company -- American States Insurance Company -- American States Preferred Insurance Company -- Safeco Insurance Company of Indiana -- Safeco National Insurance Company -- Safeco Insurance Company of Oregon -- American States Lloyds Insurance Company -- Safeco Lloyds Insurance Company -- First National Insurance Company of America -- General Insurance Company of America -- Safeco Insurance Company of America -- Safeco Surplus Lines Insurance Company -- American States Insurance Company of Texas Fitch has affirmed the 'A-' IFS of the following ratings with a Positive Outlook for the following companies that participate in a 100% quota share with the Peerless Pool: -- Liberty Northwest Insurance Company -- North Pacific Insurance Company -- Oregon Automobile Insurance Company LITHIUM TECHNOLOGY: Delays Form 10-Q for Second Quarter ------------------------------------------------------- Lithium Technology Corporation informed the U.S. Securities and Exchange Commission that it requires additional time to complete its quarterly financial statements and corresponding narratives for management's discussion and analysis for the period ended June 30, 2012. As a result of these factors, the Company has been unable to complete and file the subject Form 10-Q without unreasonable effort and expense. About Lithium Technology Plymouth Meeting, Pa.-based Lithium Technology Corporation is a mid-volume production stage company that develops large format lithium-ion rechargeable batteries to be used as a new power source for emerging applications in the automotive, stationary power, and national security markets. The Company was not able to file its annual report for the period ended Dec. 31, 2011, and quarterly report for the period ended March 30, 2012. For the nine months ended Sept. 30, 2011, the Company reported a net loss of $12.26 million on $6.06 million of total revenue. The Company reported a net loss of $7.25 million on $6.35 million of products and services sales for the year ended Dec. 31, 2010, compared with a net loss of $10.51 million on $7.37 million of product and services sales during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $8.83 million in total assets, $35.09 million in total liabilities and a $26.26 million total stockholders' deficit. Going Concern As reported by the TCR on April 8, 2011, Amper, Politziner & Mattia, LLP, Edison, New Jersey, after auditing the Company's financial statements for the year ended Dec. 31, 2010, noted that the Company has recurring losses from operations since inception and has a working capital deficiency that raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning The Form 10-Q for the quarter ended Sept. 30, 2011, noted that the Company's operating plan seeks to minimize its capital requirements, but the expansion of its production capacity to meet increasing sales and refinement of its manufacturing process and equipment will require additional capital. The Company raised capital through the sale of securities closing in the second quarter of 2011 and realized proceeds from the licensing of its technology pursuant to the terms of a licensing agreement and the sale of inventory used in manufacturing its batteries as part of the establishment of a joint venture in the fourth quarter of 2011, but is continuing to seek other financing initiatives and needs to raise additional capital to meet its working capital needs, for the repayment of debt and for capital expenditures. Such capital is expected to come from the sale of securities. The Company believes that if it raises approximately $4 million in additional debt and equity financings it would have sufficient funds to meet its needs for working capital, capital expenditures and expansion plans through the year ending Dec. 31, 2012. No assurance can be given that the Company will be successful in completing any financings at the minimum level necessary to fund its capital equipment, debt repayment or working capital requirements, or at all. If the Company is unsuccessful in completing these financings, it will not be able to meet its working capital, debt repayment or capital equipment needs or execute its business plan. In that case the Company will assess all available alternatives including a sale of its assets or merger, the suspension of operations and possibly liquidation, auction, bankruptcy, or other measures. These conditions raise substantial doubt about the Company's ability to continue as a going concern. LOGIC DEVICES: Had $143,900 Net Loss in June 30 Quarter ------------------------------------------------------- LOGIC Devices Incorporated filed its quarterly report on Form 10-Q, reporting a net loss of $143,900 on $393,300 of revenues for the three months ended June 30, 2012, compared with a net loss of $119,800 on $406,400 of revenues for the three months ended June 30, 2011. For the nine months ended June 30, 2012, the Company reported a net loss of $987,600 on $675,200 of revenues, compared with a net loss of $630,800 on $1.2 million of revenues for the nine months ended June 30, 2011. "For the quarter ended June 30, 2012, our net revenues of $393,300 were a 3% decrease from $406,400 in the same quarter of fiscal 2011. For the nine months ended June 30, 2012, our net revenues of $675,200 decreased 43% from $1,184,600 in the same period of fiscal 2011. These decreases are the result of older products continuing to decline while our newly introduced products have not begun to contribute any material revenues. More than half of the sales for the quarter and nine months ended June 30, 2012, were of older product previously considered obsolete." The Company's balance sheet at June 30, 2012, showed $2.7 million in total assets, $1.2 million in total liabilities, and stockholders' equity of $1.5 million. According to the regulatory filing, prior to fiscal 2011, the Company's cost reductions had allowed the Company to generate enough cash from operations to fund current operations and future capital expenditures. "To date, however, such reductions have not returned us to a state of liquidity. As our older products continue to produce less revenue and we have multiple new products being introduced, our capital requirements have increased, and we believe cash on-hand and cash from operations is not sufficient to meet these increased demands. We are currently working month-to- month to maintain adequate cash to continue operations." A copy of the Form 10-Q is available for free at: http://is.gd/vgaNwp Sunnyvale, Calif.-based LOGIC Devices Incorporated develops and markets high-speed digital integrated circuits that perform high- density storage and signal/image processing functions. The Company's products are used in the broadcast, medical, military, and consumer electronics markets. * * * As reported in the TCR on Jan. 3, 2012, Hein & Associates LLP, in Irvine, California, expressed substantial doubt about LOGIC Devices' ability to continue as a going concern, following the Company's results for the fiscal year ended Sept. 30, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and requires additional funds to maintain its operations. LSP ENERGY: Settles Turbine Failure Dispute With Insurers for $7MM ------------------------------------------------------------------ Lance Duroni at Bankruptcy Law360 reports that a host of insurers agreed Monday to fork over $7 million to LSP Energy LP to settle a dispute over coverage for a mechanical failure that helped tip the power plant operator into bankruptcy. Having already shelled out $17.8 million under an insurance policy, insurers led by Great Lakes Reinsurance (UK) PLC agreed to pay $7 million more for repairs and lost revenues resulting from a turbine failure at LSP?s plant in Batesville, Miss., according to a settlement motion filed in Delaware bankruptcy court obtained by Bankruptcy Law360. 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. MERCY MEDICAL: Fitch Affirms 'BB+' Rating on $75MM Rev. Bonds ------------------------------------------------------------- Fitch Ratings has affirmed the 'BB+' rating on the following bonds issued by Cuyahoga County, OH on behalf of Mercy Medical Center (MMC; fka CSAHS/UHHS-Canton, Inc.): -- $75,215,000 series 2000 hospital facilities revenue bonds. The Rating Outlook is Negative. Key Rating Drivers MEMBER OF LARGER HEALTH SYSTEM: Sisters of Charity of Health System (SCHS) is the sole corporate member of MMC. Although SCHS does not guaranty and is not obligated to pay debt service on MMC's obligations, Fitch views the close relationship as a key credit factor as SCHS would likely provide financial support to MMC if needed. SCHS provides support services such as information technology, managed care contracting, treasury services, and supply chain management. NARROWED OPERATING LOSSES: MMC's operating performance remains weak, however, operating losses narrowed in fiscal 2011 with a negative 5.9% operating margin, which continued to improve through the six months ended June 30, 2012 (the interim period) with a negative 4.3% operating margin. Operational improvements to date have been primarily due to cost control initiatives and staffing adjustments. DECLINING LIQUIDITY METRICS: Unrestricted cash and investments continued to decline for the fifth straight fiscal year due to weak operating cash flow, higher malpractice costs and capital spending from $66.4 million in fiscal 2011 to $60.1 million at June 30, 2012, equating to a weak 80 days cash on hand and 62.5% cash to debt. However, cushion ratio remains adequate for the rating category at 7.8 times (x). THIN DEBT SERVICE COVERAGE: Fitch's maximum annual debt service (MADS) coverage calculation by EBITDA resulted in a weak 0.9x in fiscal 2011 and 0.8x in fiscal 2010. However, per the master trust indenture, MADS coverage was 1.4x in fiscal 2011, compared to the covenant of 1.1x. Security The bonds are secured by a pledge of the gross revenues of the obligated group and a first lien mortgage of hospital property. What Would Trigger A Downgrade INABILITY TO STABILIZE PERFORMANCE: The failure to maintain improvements to operating profitability and continued declines in unrestricted liquidity metrics would result in downward rating pressure. Credit Profile The affirmation of the 'BB+' rating reflects MMC's relationship with SCHS and demonstration of a reduction in operating losses year to date. However, the Outlook remains Negative given MMC's overall weak financial profile and the challenges present to returning to operating profitability as well as the continued deterioration in its liquidity metrics. SCHS is the sole corporate member of MMC and MMC is included in SCHS's consolidated financial statements. Although SCHS is not legally obligated on MMC's bonds, the system has been deeply involved in hospital operations and MMC's chief executive officer is an employee of SCHS. SCHS has expanded the support services that it provides to its affiliate hospitals for which MMC pays a member assessment . Support services currently include information technology, strategic planning, construction management, contracting, treasury services, insurance and supply chain management. In fiscal 2010, SCHS waived the member assessment (approximately $4.5 million). At Dec. 31, 2011, SCHS had $419.5 million of unrestricted cash and investments which equates to 214.8 days of cash on hand, a 34.4x cushion ratio and 181.8% cash to long-term debt (including MMC's series 2000 bonds). MMC's service area was hit particularly hard during the economic downturn beginning in fiscal 2008 negatively impacting inpatient admissions starting in fiscal 2009. Additionally, MMC's bad debt expense increased from 4.3% of revenues in fiscal 2009 to 5.5% in the interim period. MMC's overall payor mix has weakened as commercial payors have decreased as a percent of revenues while Medicare and Medicaid increased. The service area is beginning to exhibit evidence of economic stabilization due in part to increased activity in the oil and gas industry. Although reduced, operating losses continued through fiscal 2011 and the six month interim period. Operating margin narrowed from negative 6.6% in fiscal 2010 to negative 5.9% in fiscal 2011 and continued to improve to negative 4.3% in the interim period. In addition to the above economic factors, fiscal 2011 operating profitability was negatively impacted by increased malpractice expense which exceeded budget by $5.5 million. The continued reduction in operating losses reflects management's implementation of cost control initiatives, including staffing adjustments. Additionally, management engaged a consulting firm in fiscal 2011 to identify and implement operational improvement initiatives. Identified initiatives include supply chain management, productivity enhancement and revenue cycle management. MMC has been one of the lowest cost providers in Ohio, therefore, a majority of the operational improvements are expected to come from revenue cycle and supply chain management. Fitch expects to see many of the initiatives begin to positively impact operations in the second half of fiscal 2012. MMC's fiscal 2012 budgeted operating margin is negative 3.6%. Despite a relatively low debt burden, with MADS equal to 2.8% of revenues, debt service coverage remains thin. Total debt of approximately $96 million as of June 30, 2012, is 100% fixed rate and includes $75 million of series 2000 bonds, $13 million of capital leases, and an $8 million loan from SCHS (reflecting MMC's line of credit draw). MMC does not have any swaps outstanding and has no plans to issue additional debt. For the fifth fiscal year in a row, MMC's unrestricted liquidity continued to decline to $60.1 million through June 30, 2012. Fitch is concerned that potential capital plans could further erode MMC's liquidity metrics if cash flow is not adequate to fund the contemplated projects. Capital plans under consideration include renovation and expansion of MMC's emergency department and an ambulatory surgical center joint venture. The emergency department renovation is expected to cost $15 million, of which approximately $4.5 million will be funded through restricted funds (including a $2 million contribution from SCHS) with the remainder funded through cash flow and philanthropy. Board approval is expected in November 2012. MMC has consistently maintained a solid secondary market position behind Aultman Health in its service area averaging 26.8% since fiscal 2008 and increasing to 27.7% through June 30, 2011. During the same period, Aultman's market share decreased from 43.2% to 39.5%. MMC's market position could strengthen as Aultman did not renew its contracts with United Health and Anthem. MMC's utilization trends continue to show modest signs of recovery after two years of declines. Fiscal 2011 admissions, observation stays, emergency room visits and outpatient visits increased 2.4%, 3.7%, 3.9% and 4.2%, respectively. Overall improvements continued in the interim period, however, admissions declined 1.5% as observation stays increased 8.3%. Fitch is maintaining the Negative Outlook pending further evidence of stability and improvement in MMC's operations. Should operational initiatives fail to continue to improve financial results or should liquidity metrics further decline, negative rating action is likely to occur. Mercy Medical Center, located in Canton, Ohio, is a teaching hospital with 473 licensed beds, of which 337 are staffed. Total operating revenues equaled $272 million in fiscal 2011. MMC covenants to provide annual disclosure within 120 days of the fiscal year end and quarterly disclosure within 45 days following the end of each fiscal quarter. Disclosure is provided through the Municipal Securities Rulemaking Board's EMMA system. MICRON TECHNOLOGY: Moody's Assigns 'Ba3' CFR/PDR; Outlook Stable ---------------------------------------------------------------- Moody's Investors Service assigned Ba3 ratings to Micron Technology, Inc. -- Corporate Family Rating (CFR), Probability of Default Rating (PDR), and senior unsecured debt (Ba3, LGD4-54%). Moody's also assigned a Speculative Grade Liquidity (SGL) rating of SGL-1. The rating outlook is stable. Assignments: Corporate Family Rating at Ba3 Probability of Default Rating at Ba3 Senior Unsecured Debt at Ba3 (LGD4-54%) Speculative Grade Liquidity Rating at SGL-1 Outlook: Stable Ratings Rationale The Ba3 CFR reflects Micron's modest leverage of under 2x debt to EBITDA (Moody's standard adjustments) and large cash position of about $2.2 billion, which is appropriate given the characteristics of the semiconductor industry, particularly the highly volatile memory segment. Micron's large cash position is needed to offset regular periods of negative free cash flow (FCF), which are caused by the memory segment's considerable volatility of unit average selling prices (ASPs), particularly in the DRAM segment, and large capital expenditures needed to maintain production cost competitiveness. The rating also reflects the potential challenges surrounding Micron's strategy of skipping the 25nm production technology node in DRAM. This may place Micron at a competitive disadvantage if it takes Micron longer than expected to develop the next generation technology production node. The stable outlook reflects Moody's expectation that DRAM and NAND markets will recover in 2013 resulting in growing revenues and improving margins such that Micron's operating margin (Moody's standard adjustments) will be on course to turn positive in calendar year 2013. Due to large capital expenditures, Moody's expects FCF to remain negative until at least late 2013, increasing outstanding debt. Due to some modest increases in debt, Moody's expects leverage to approach 2.4x EBITDA (Moody's standard adjustments) before declining to about 2x over the near term through EBITDA growth. Due to the large scheduled debt maturities in 2014 ($1.3 billion of maturing debt), Moody's expects Micron to reduce these maturities to less than $500 million by the middle of 2013. On July 2, 2012, Micron announced that it was acquiring Elpida Memory, Inc. and a majority interest in Rexchip Electronics Corp., which will increase Micron's manufacturing capacity by 50%. Although the acquisition is not expected to close until March 2013 at the earliest, Moody's believes that Micron will be successful in its bid. Nevertheless, Moody's estimates that the upfront purchase price, including potential Elpida capital expenditures and working capital funding provided by Micron, could approach $1.8 billion. Moreover, each of these steps involves execution risks, which could result in depressed margins and cash outflows. The SGL rating of SGL-1 reflects Micron's large cash balance of about $2.2 billion and limited interest burden due to the low coupon rate on Micron's debt, which is primarily comprised of convertible senior notes. Moody's notes that this very good liquidity and modest interest burden are important, due to the absence of a backup source of liquidity and because Micron's FCF is highly volatile, with brief periods of negative operating margins and extended periods of negative FCF, due to the industry's steep annual unit price depreciation, short product life cycles, and large required capital expenditures. The Ba3 senior unsecured debt rating is equal to the Ba3 CFR. This reflects Micron's largely unsecured capital structure, the absence of maintenance financial covenants, and despite the substantial amount of unsecured trade claims at the subsidiaries Moody's ranked these trade claims pari passu with the senior unsecured debt due to the issuing legal entity's substantial consolidated assets and revenues. Micron's ratings could be upgraded if Moody's believes that Micron's operating margins will exceed 5% over the course of a cycle due to a more balanced industry supply following the Elpida bankruptcy, Micron's stable or growing share of a growing NAND market, and Micron successfully executing production node transitions to lower unit production costs. Moreover, Moody's would expect Micron to demonstrate financial discipline by reducing leverage through a combination of EBITDA growth and debt repayments such that the ratio of debt to EBITDA (Moody's standard adjustments) is sustained below 1.0x. Noting that Micron has announced the acquisition of Elpida, Micron's ratings could be upgraded if Micron is successful in its bid and successfully integrates Elpida such that Moody's believes that Micron will generate materially higher profit levels. Ratings could be downgraded if Micron's operating performance is deteriorating as evidenced by ongoing negative operating margins or declining market share or if Moody's expects leverage to remain above 2.5x EBITDA (Moody's standard adjustments). Ratings could also be downgraded if Micron's bid for Elpida and Rexchip is unsuccessful. The principal methodology used in rating Micron was the Global Semiconductor Industry Methodology published in November 2009. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published in June 2009. Micron, based in Boise, Idaho, designs, manufactures, and sells DRAM, NAND Flash, and NOR Flash memory and semiconductor components for CMOS image sensors. MPG OFFICE: Said to Hire Adviser to Sell Biz or Seek Investment --------------------------------------------------------------- Eliot Brown, writing for The Wall Street Journal, reports real- estate executives with direct knowledge of the planning said MPG Office Trust Inc., formerly known as Maguire Properties Inc., has tapped real-estate adviser Eastdil Secured to search for firms to buy the company or make a significant cash investment. After years of struggling with too much debt and too few tenants, the largest office landlord in downtown Los Angeles is considering selling itself to the highest bidder, those executives said. WSJ says a company spokeswoman didn't respond to requests for comment. According to WSJ, the executives also said real-estate-investment giants including Brookfield Office Properties Inc. and Colony Capital LLC are considering bids, as are midsize companies such as Piedmont Office Realty Trust Inc. and Thomas Properties Group Inc. WSJ notes a sale isn't certain. MPG has previously sought so- called strategic alternatives without striking any deals. But if the company is sold, the move could reshuffle ownership of some of the most iconic office towers in the nation's second-largest city. MPG owns six towers in downtown Los Angeles, including the angled brown granite KPMG and Wells Fargo towers, as well as the 73-story U.S. Bank Tower, the tallest building west of the Mississippi River. 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. MONTE CRISTO: Case Summary & 3 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Monte Cristo Trust 6101 Via Escondido Dr Malibu, CA 90265 Bankruptcy Case No.: 12-17458 Chapter 11 Petition Date: August 20, 2012 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Alan M. Ahart Debtor's Counsel: Gilbert Azafrani, Esq. 1725 Oceanfront Walk #318 Santa Monica, CA 90401 Tel: (310) 428-2315 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-17458.pdf The petition was signed by Gilbert Azafrani, acting trustee. MSR RESORT: Selects $1.5B Singapore Fund Offer as Stalking Horse ---------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that MSR Resort Golf Course LLC asked a New York bankruptcy judge Friday for permission to enter into a stalking horse agreement with a group of Singapore sovereign wealth funds to set a purchase price floor for its assets at $1.5 billion. Paulson & Co.-owned MSR, which entered bankruptcy protection in February 2011, asked U.S. Bankruptcy Judge Sean H. Lane to authorize it to enter into a commitment letter with 450 Private Ltd. and C Hotel Mezz Private Ltd., affiliates of the Government of Singapore Investment Corp., according to Bankruptcy Law360. 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. MSR RESORT: Eastdil Secured Approved as Financing Broker -------------------------------------------------------- The Hon. Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York authorized MSR Resort Golf Course LLC, et al., to employ Eastdil Secured, L.L.C. to obtain post- emergence mortgage and mezzanine financing. 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. MSR RESORT: Paulson & Co. and Winthrop Give Up on 4 Resorts ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Paulson & Co. and Winthrop Realty Trust gave up on trying to retain ownership of the remaining four resorts they foreclosed in early 2011. Instead, they will sell the properties to secured lender Government of Singapore Investment Corp. for $1.5 billion, including $1.12 billion in cash and $360 million in debt. According to the report, after foreclosing last year, Paulson and Winthrop put all five resorts into bankruptcy in February 2011 to prevent foreclosure of $1 billion in mortgages and $525 million in maturing mezzanine debt. After selling Doral Golf Resort and Spa in Miami to Donald Trump, Paulson and Winthrop retained ownership of the Grand Wailea Resort Hotel and Spa in Hawaii; the La Quinta Resort and Club and the PGA West golf course in La Quinta, California; the Arizona Biltmore Resort and Spa in Phoenix; and the Claremont Resort & Spa in Berkeley, California. The report relates that the $1.12 billion in cash from the Singapore investment fund, known as GIC, will provide full payment for $850 million in mortgages along with $115 million in first- level mezzanine debt owing to MetLife Inc. Interest on the mortgages will be paid at the non-default rate. Gic's $360 million in second- and third-level mezzanine debt, along with interest, will be exchanged for ownership as part of the purchase price. The report notes that Gic will pay as much as $10.7 million of unsecured debt in full. The resorts' papers initiating the sale process were filed not long before midnight on Aug. 17. There will be an auction to determine whether another buyer will pay more. At a Sept. 10 hearing, the U.S. Bankruptcy Court in Manhattan will approve sale procedures. The hotels want other offers by Oct. 23 followed by an auction on Oct. 25. The sale to Gic would be approved and carried out through implementation of a Chapter 11 plan acceptable to Gic. The report adds that the existing owners will receive nothing on their $50 million in fourth-level mezzanine debt unless the auction brings a higher price. The agreement gives Gic the option of retaining Hilton Worldwide Inc. as hotel manager, or Gic can have the existing Hilton contract terminated by the bankruptcy court, in which case Gic will pay the damages in full. There is ongoing litigation in bankruptcy court, where the judge is near the point of deciding exactly how much Hilton would be owed were the contract terminated. The report notes that Gic became what the resorts called their "most vocal critic" by demanding a quick conclusion to the reorganization. To win a reprieve from Gic's opposition, the resorts agreed in September 2011 to pay interest each month and to file a plan paying Gic in full. Unless paid sooner, the settlement required beginning an auction process by Sept. 1 and confirming a plan by Dec. 15. According to the report, the resorts didn't make an interest payment on Aug. 1, prompting the lender to file papers in bankruptcy court allowing Gic to file its own plan. Allowing Gic to file a plan in the event of default was part of last year's settlement. When Trump agreed to buy the Doral property, the resorts said the price indicated the remaining four hotels would have a value sufficient for more than full payment on $1.5 billion in debt. 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. NATIVE WHOLESALE: Sec. 341 Creditors' Meeting Moved to Aug. 29 -------------------------------------------------------------- Tracy Hope Davis, U.S. Trustee for Region 2, will convene a meeting of creditors of Native Wholesale Supply Company on Aug. 29, 2012, at 2:00 p.m. at Buffalo UST - Olympic Towers. The meeting was previously set for March 26, 2012, at 1:30 p.m. About Native Wholesale Native Wholesale Supply Company is engaged in the business of importing cigarettes and other tobacco products from Canada and selling them within the United States. It purchases the products from Grand River Enterprises Six Nations, Ltd., a Canadian corporation and the Debtor's only secured creditor. Native is an entity organized under the Sac and Fox Nation and has its principal place of business at 10955 Logan Road in Perrysburg, New York. Native filed for Chapter 11 bankruptcy (Bankr. W.D.N.Y. Case No. 11-14009) on Nov. 21, 2011. The Chapter 11 filing was triggered to resolve an ongoing dispute with the United States government regarding up to $43 million in assessments made by the government against the Debtor pursuant to the Fair and Equitable Tobacco Reform Act of 2004 and the Tobacco Transition Payment Program and to restructure the terms of payment of any obligation determined to be owing by the Debtor to the U.S. under the Disputed Assessment. The issues pertaining to the Disputed Assessment resulted in two lawsuits, subsequently consolidated, now pending in the Federal District Court. Robert J. Feldman, Esq., and Janet G. Burhyte, Esq., at Gross, Shuman, Brizdle & Gilfillan, P.C., in Buffalo, N.Y., represent the Debtor as counsel. The Company disclosed $30,022,315 in assets and $70,590,564 in liabilities as of the Chapter 11 filing. The States of California, New Mexico, Oklahoma and Idaho have appeared in the case and are represented by Garry M. Graber, Esq., at Hodgson Russ LLP. No trustee, examiner or creditors' committee has been appointed in the case. NATIVE WHOLESALE: Has OK to Hire Phillips Murrah for Oklahoma Case ------------------------------------------------------------------ Native Wholesale Supply Company sought and obtained authorization from the U.S. Bankruptcy Court for the Western District of New York to employ Phillips Murrah, P.C., as special counsel. The Debtor is the defendant in an action pending in the District Court of Oklahoma County, State of Oklahoma. The Debtor's lead counsel in the Oklahoma Action is Phillips Murrah, who is and has been counsel to the Debtor on all matters involving the Oklahoma Action since its initiation in 2008. Phillips Murrah will: a. provide necessary information to the general counsel for the Debtor, including any and all information with respect to the Oklahoma Action; and b. assist the general bankruptcy counsel, if necessary, as needed, in connection with this Chapter 11 case. Phillips Murrah will be paid at these hourly rates: Legal Assistants $75-$95 Associates $125 Senior Partners $350 Marc Edwards, Esq., a member at Phillips Murrah, attested to the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Native Wholesale Native Wholesale Supply Company is engaged in the business of importing cigarettes and other tobacco products from Canada and selling them within the United States. It purchases the products from Grand River Enterprises Six Nations, Ltd., a Canadian corporation and the Debtor's only secured creditor. Native is an entity organized under the Sac and Fox Nation and has its principal place of business at 10955 Logan Road in Perrysburg, New York. Native filed for Chapter 11 bankruptcy (Bankr. W.D.N.Y. Case No. 11-14009) on Nov. 21, 2011. The Chapter 11 filing was triggered to resolve an ongoing dispute with the United States government regarding up to $43 million in assessments made by the government against the Debtor pursuant to the Fair and Equitable Tobacco Reform Act of 2004 and the Tobacco Transition Payment Program and to restructure the terms of payment of any obligation determined to be owing by the Debtor to the U.S. under the Disputed Assessment. The issues pertaining to the Disputed Assessment resulted in two lawsuits, subsequently consolidated, now pending in the Federal District Court. Robert J. Feldman, Esq., and Janet G. Burhyte, Esq., at Gross, Shuman, Brizdle & Gilfillan, P.C., in Buffalo, N.Y., represent the Debtor as counsel. The Company disclosed $30,022,315 in assets and $70,590,564 in liabilities as of the Chapter 11 filing. The States of California, New Mexico, Oklahoma and Idaho have appeared in the case and are represented by Garry M. Graber, Esq., at Hodgson Russ LLP. No trustee, examiner or creditors' committee has been appointed in the case. NORTHAMPTON GENERATING: Makes Fourth Exclusivity Request -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Northampton Generating Co. has been receiving extensions of exclusive plan-filing rights doled out in dribbles by the U.S. Bankruptcy Court in Charlotte, North Carolina. According to the report, with the most-recent four-week extension of so-called exclusivity to expire on Sept. 14, the company filed another motion seeking a four-week extension, to Oct. 15. There will be a Sept. 11 hearing on the latest exclusivity motion. About Northampton Generating Northampton Generating Co. LP is the owner of a 112 megawatt electric generating plant in Northampton, Pennsylvania. The plant is fueled with waste products, including waste coal, fiber waste, and tires. The power is sold under a long-term agreement to an affiliate of FirstEnergy Corp. Northampton Generating filed for Chapter 11 bankruptcy (Bankr. W.D.N.C. Case No. 11-33095) on Dec. 5, 2011. Hillary B. Crabtree, Esq., and Luis Manuel Lluberas, Esq., at Moore & Van Allen PLLC, in Charlotte, N.C., serve as counsel to the Debtors. Houlihan Lokey Capital, Inc., is the financial advisor. Northampton is asking that the period of exclusivity be extended to Sept. 14 and the time to solicit support extended to Nov. 13. The Debtor disclosed $205,049,256 in assets and $121,515,045 in liabilities as of the Chapter 11 filing. No request for the appointment of a trustee or examiner has been made, and no statutory committee or trustee has been appointed in this case. NORTHSTAR AEROSPACE: Taps Christopher Picone as Wind Down Officer ----------------------------------------------------------------- Northstar Aerospace (USA) Inc., et al., ask the U.S. Bankruptcy Court for the District of Delaware appointment and employment of Christopher L. Picone of Picone Advisory Group as wind down officer and director to act as an independent fiduciary on behalf of the Debtors during the wind down of the Debtors' affairs from and after the closing of the pending sale of assets. Mr. Picone will, among other things: a. finalize the Debtors final tax returns with Grant Thornton as tax accountant; b. finalize the Form 5500s and related matters for the Debtors defined benefit plans with the plan actuaries; and c. collect any outstanding accounts receivable not sold under the sale order. Subject to the Court's approval, the Debtors have to pay Mr. Picone on an hourly basis and reimburse Mr. Picone for reasonable and necessary out-of-pocket expenses incurred during the engagement, subject to a total fee cap of $35,000 (exclusive of reasonable out-of-pocket expenses). The Debtors also agreed to provide Mr. Picone with a $10,000 retainer upon the Court's approval of the application. To the best of the Debtors' knowledge, Mr. Picone does not hold or represent any interest adverse to the Debtors or their estates. About Northstar Aerospace Chicago, Illinois-based Northstar Aerospace -- http://www.nsaero.com/-- is an independent manufacturer of flight critical gears and transmissions. With operating subsidiaries in the United States and Canada, Northstar produces helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Its plants are located in Chicago, Illinois; Phoenix, Arizona and Milton and Windsor, Ontario. Northstar employs over 700 people across its operations. Northstar Aerospace, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington, Delaware, on June 14, 2012, to sell its business to affiliates of Wynnchurch Capital, Ltd., absent higher and better offers. Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel to the Debtors. The Debtors have obtained approval to hire Logan & Co. Inc. as the claims and notice agent. Certain Canadian affiliates are also seeking protection pursuant to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36, as amended. As of March 31, 2012, Northstar disclosed total assets of $165.1 million and total liabilities of $147.1 million. Approximately 60% of the assets and business are with the U.S. debtors. Northstar Aerospace USA Inc. and its Canadian parent won court approval on Tuesday to sell their assets to Illinois-based private equity firm Wynnchurch Capital Ltd. for $70 million. NORTHWEST PARTNERS: Fannie Mae Seeks Turnover of Cash Collateral ---------------------------------------------------------------- Fannie Mae asks the Bankruptcy Court for turnover or sequestration of its cash collateral presently held in Northwest Partners' attorney's trust account, and to not disburse or transfer the Cash Collateral without further Court order. Fannie Mae alleged that, after receiving default letters, the Debtor transferred $60,000 of the rents generated by the property to the Debtor's attorney. Fannie Mae contends the Debtor lacked authority under the loan documents to make any transfer after receiving the default letters. As such, the funds should be returned to the Debtor-in-Possession account, subject to the Fannie Mae's lien, and then turned over to Fannie Mae pursuant to the terms of the cash collateral order. Fannie Mae said the Debtor lost all authority to transfer rents generated by the property once Debtor received the default letter from Fannie Mae. Fannie Mae has a properly perfected security interest in these rents. The Debtor transferred $60,000 to its Debtor's attorney in violation of the loan documents. Fannie Mae's lien remains attached to the $60,000 and, as such, those funds are Fannie Mae's cash collateral. The Lender requests that the Court order the Debtor's attorney to return the $60,000 to the Debtor, subject to Fannie Mae's lien, and then turn the same over to Fannie Mae pursuant to the cash collateral order. Fannie Mae is represented by: Mark E. Konrad, Esq. Nishat Baig, Esq. SNELL & WILMER LLP 3883 Howard Hughes Parkway, Suite 1100 Las Vegas, Nev. 89169 Tel: (702) 784-5200 Fax: (702) 784-5252 About Northwest Partners Northwest Partners owns the 268-unit Austin Crest Apartment in Northwest Reno, Nevada. It filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case No. 11-53528) on Nov. 17, 2011. Judge Bruce T. Beesley oversees the case. The Debtor scheduled $13,513,361 in assets and $14,135,158 in liabilities. The petition was signed by Robert F. Nielsen, president of IDN I, the Debtor's general partner. OCALA FUNDING: $5.2-Mil. DIP Financing Approved on Final Basis -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida authorized, on a final basis, Ocala Funding LLC to obtain $5,200,000 of postpetition financing from O.F. Finance, LLC. As of the Petition Date, the Debtor was liable to the prepetition secured parties in respect of obligations under the prepetition Ocala facility Documents for (a) the aggregate principal amount of $1.75 billion on account of outstanding notes; and (b) unpaid fees, expenses, disbursements, indemnifications, obligations, and charges or claims of whatever nature. The Debtor would use the money to preserve the assets of the estate. The Debtor related that it was unable to obtain financing from sources other than the DIP lenders on terms more favorable than the DIP facility. As adequate protection from any diminution in value of the lender's collateral, the Debtor will grant the prepetition secured parties, among other things: -- prior to hiring special litigation counsel to represent the Debtor in any fraudulent transfer action, the Debtor will obtain approval of (i) the designee of Deutsche bank, AG, London Branch (DB); (ii) either the designee of BNP Paribas Mortgage Corporation (BNPP) or the designee of Federal Deposit Insurance Corporation, as receiver for Colonial Bank (FDICR-Colonial); -- upon any potential settlement or other resolution of any of the fraudulent transfer actions, the Ocala Deloitte Claim, or the Ocala Causes of action, approval of the prepetition secured parties will be required; and -- any proceeds of the fraudulent transfer actions and Ocala Deloitte claim or Ocala causes of action received during the pendency of the case, will first be used to satisfy and pay unpaid administrative claims and expenses of the case. About Ocala Funding Orange, Florida-based Ocala Funding, LLC, a funding vehicle once controlled by mortgage lender Taylor Bean & Whitaker Mortgage Corp., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-04524) in Jacksonville on July 10, 2012. Ocala Funding used to be the largest originator and servicer of residential loans. Ocala was created by Taylor Bean & Whitaker to purchase loans originated by TBW and selling the loans to third parties, Freddie Mac. In furtherance of this structure Ocala raised money from noteholders Deutsche Bank AG and BNP Paribas Mortgage Corp. and other financial institutions, as secured lenders through sales of asset-backed commercial paper. The Debtor disclosed $1,747,749,787 in assets and $2,650,569,181 in liabilities as of the Chapter 11 filing. TBW was forced to file for Chapter 11 relief (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009, amid allegations of fraud by Taylor Bean's former CEO Lee Farkas and other employees. Mr. Farkas is now serving a 30-year prison term for 14 counts of conspiracy and fraud for being the mastermind of a $2.9 billion bank fraud. Mr. Farkas allegedly directed the sale of more than $1.5 billion in fake mortgage assets to Colonial Bank and misappropriated more than $1.5 billion from Ocala. TBW's bankruptcy also caused the demise of Colonial Bank, which for years was TBW's primary bank. TBW and its joint debtor-affiliates confirmed their Second Amended Joint Plan of Liquidation on July 21, 2011, and the TBW Plan became effective on Aug. 10, 2011. The TBW Plan established the TBW Plan Trust to marshal and distribute all remaining assets of TBW. Neil F. Lauria, as CRO for TBW and trustee of the TBW Plan Trust, signed the Chapter 11 petition of Ocala. In its Chapter 11 Petition, Ocala estimated more than $1 billion in assets and debts. Ocala holds 252 mortgage loans with an unpaid balance of $42.3 million as of May 31, 2012. The Debtor also holds five "real estate owned" properties resulting from foreclosures. The Debtor also holds $22.4 million in proceeds of mortgage loans previously owned by it that are on deposit in an account in the Debtor's name at Regions Bank. It also has an interest in $75 million in cash, consisting of proceeds of mortgage loans previously owned by the Debtor, that are in an account maintained by Bank of America, N.A. as prepetition indenture trustee for the benefit of the Noteholders. The Debtor also holds a claim in the current amount of $1.6 billion against the estate of TBW. The largest unsecured creditors include the Federal Deposit Insurance Corp., owed $898,873,958; and Cadwalader, Wickersham & Taft LLP, owed $1,632,385. Judge Jerry A. Funk presides over the case. Proskauer Rose LLP and Stichter, Riedel, Blain & Prosser, serve as the Debtor's counsel. Neil F. Lauria at Navigant Capital Advisors, LLC, serves as the Debtor's Chief Restructuring Officer. OCALA FUNDING: Neil Luria Approved as Chief Restructuring Officer ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida authorized Ocala Funding LLC to employ Neil F. Luria as chief restructuring officer, and other support personnel. As reported in the Troubled Company Reporter on July 17, 2012, the Debtor filed court papers seeking formal approval of an engagement letter agreement with Navigant Capital Advisors, LLC, to provide the services of Neil F. Luria as chief restructuring officer and other support personnel. Mr. Luria is the trustee of the trust established under Taylor Bean & Whitaker Mortgage Corp.'s confirmed Chapter 11 plan. TBW, the managing member of Ocala, holds 100% of the economic equity interests of the Debtor. TBW is controlled by the Taylor Bean Whitaker Plan Trust. Mr. Luria and Edward R. Casas, a senior managing director at Navigant, will lead the Navigant team. Navigant also will provide an array of Administrative and Oversight Services. Charles Sweet -- a special member of Ocala and independent of TBW, the TBW Plan Trust, Navigant and the TBW Plan Trustee -- approved the Debtor's employment of Mr. Luria and Navigant, including, without limitation, the form and substance of the Agreement. The Debtor has agreed to pay Navigant and Mr. Luria during this Chapter 11 case: a. For the services of Messrs. Luria and Casas and the Administrative and Oversight Services, the Debtor will pay Navigant a Monthly Fee of: Period Monthly Fee ------ ----------- Date of execution through $75,000 per month the Effective Date First Three Calendar Months $75,000 per month Post Effective Date Subsequent 12 months (i.e., $50,000 per month Fourth through Fifteenth Calendar Months Post Effective Date) Thereafter $35,000 per month The Company agreed to pay Navigant a $175,000 retainer upon execution of the engagement. b. The Debtor will pay Navigant professionals hourly for services that are (i) not provided by Mr. Luria or Mr. Casas and (ii) not included in the scope of Administrative and Oversight Services. These Out of Scope Services will be billed at these hourly rates: Senior Managing Directors/ $825 - $895 Senior Advisors Managing Directors $695 - $825 Directors $550 - $695 Associate Directors $450 - $550 Managing Consultants $350 - $450 Consultants / Associates $245 - $350 Paraprofessionals $95 - $125 c. The Debtor will pay Navigant a deferred restructuring fee equal to 1% of the amount of asset and other recoveries received from divestitures transactions, litigation recoveries, negotiated settlements and negotiated claim reductions. d. The Debtor will indemnify Navigant. About Ocala Funding Orange, Florida-based Ocala Funding, LLC, a funding vehicle once controlled by mortgage lender Taylor Bean & Whitaker Mortgage Corp., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-04524) in Jacksonville on July 10, 2012. Ocala Funding used to be the largest originator and servicer of residential loans. Ocala was created by Taylor Bean & Whitaker to purchase loans originated by TBW and selling the loans to third parties, Freddie Mac. In furtherance of this structure Ocala raised money from noteholders Deutsche Bank AG and BNP Paribas Mortgage Corp. and other financial institutions, as secured lenders through sales of asset-backed commercial paper. The Debtor disclosed $1,747,749,787 in assets and $2,650,569,181 in liabilities as of the Chapter 11 filing. TBW was forced to file for Chapter 11 relief (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009, amid allegations of fraud by Taylor Bean's former CEO Lee Farkas and other employees. Mr. Farkas is now serving a 30-year prison term for 14 counts of conspiracy and fraud for being the mastermind of a $2.9 billion bank fraud. Mr. Farkas allegedly directed the sale of more than $1.5 billion in fake mortgage assets to Colonial Bank and misappropriated more than $1.5 billion from Ocala. TBW's bankruptcy also caused the demise of Colonial Bank, which for years was TBW's primary bank. TBW and its joint debtor-affiliates confirmed their Second Amended Joint Plan of Liquidation on July 21, 2011, and the TBW Plan became effective on Aug. 10, 2011. The TBW Plan established the TBW Plan Trust to marshal and distribute all remaining assets of TBW. Neil F. Lauria, as CRO for TBW and trustee of the TBW Plan Trust, signed the Chapter 11 petition of Ocala. In its Chapter 11 Petition, Ocala estimated more than $1 billion in assets and debts. Ocala holds 252 mortgage loans with an unpaid balance of $42.3 million as of May 31, 2012. The Debtor also holds five "real estate owned" properties resulting from foreclosures. The Debtor also holds $22.4 million in proceeds of mortgage loans previously owned by it that are on deposit in an account in the Debtor's name at Regions Bank. It also has an interest in $75 million in cash, consisting of proceeds of mortgage loans previously owned by the Debtor, that are in an account maintained by Bank of America, N.A. as prepetition indenture trustee for the benefit of the Noteholders. The Debtor also holds a claim in the current amount of $1.6 billion against the estate of TBW. The largest unsecured creditors include the Federal Deposit Insurance Corp., owed $898,873,958; and Cadwalader, Wickersham & Taft LLP, owed $1,632,385. Judge Jerry A. Funk presides over the case. Proskauer Rose LLP and Stichter, Riedel, Blain & Prosser, serve as the Debtor's counsel. Neil F. Lauria at Navigant Capital Advisors, LLC, serves as the Debtor's Chief Restructuring Officer. OCALA FUNDING: Paul Steven Singerman OK'd as Litigation Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida authorized Ocala Funding LLC to employ Steven Thomas, and Thomas, Alexander & Forester, LLP; and Paul Steven Singerman as special litigation counsels. As reported in the Troubled Company Reporter on July 16, 2012, the Debtor sought permission to hire Thomas Alexander and Berger Singerman, LLP, as special litigation counsel in connection with Ocala's lawsuit against Deloitte & Touche. Steven W. Thomas, Esq., a partner at Thomas Alexander; and Paul Singerman, Esq., a partner at Berger Singerman, lead the engagement. Prior to the Petition Date, Deloitte & Touche LLP provided audit and related accounting and professional services to Taylor, Bean & Whitaker Mortgage Corp. on a consolidated basis for TBW and certain affiliates of TBW, including the Debtor. TBW is a member and the manager of the Debtor. In 2009, fraud was uncovered at TBW, resulting in cessation of TBW's business and, ultimately, the Debtor's business. On Aug. 24, 2009, TBW and certain of its affiliates (but not Ocala) filed voluntary Chapter 11 petitions. TBW confirmed a chapter 11 plan that, among other things, created a trust to hold and administer certain assets of TBW's chapter 11 estate. Under the terms of TBW's chapter 11 plan, any claims of TBW against Deloitte arising from or related to Deloitte's work as auditor for TBW are now held by the Taylor, Bean & Whitaker Mortgage Plan Trust. The Debtor and TBW each believe that they hold independent, although similar and perhaps related, claims against Deloitte. The Debtor and Thomas Alexander are parties to an Engagement Letter dated Sept. 23, 2011, pursuant to which the Debtor engaged Thomas Alexander to provide the Debtor with advice and assistance as counsel in investigating, evaluating, analyzing and, if appropriate, prosecuting the Debtor's claims against Deloitte and certain of Deloitte's affiliates. In addition, prior to the Petition Date, the Debtor and the TBW Trust retained Berger Singerman as local counsel to Thomas Alexander to litigate their respective claims against Deloitte. Thereafter, each of TBW and the Debtor sued Deloitte in the 11th Judicial Circuit in and for Miami-Dade County, Florida. That litigation is ongoing. Under the terms of the Engagement Letter with Thomas Alexander, the firm will be compensated for its services to the Debtor substantially as follows: a. The Debtor assigned to Thomas Alexander 35% of the gross proceeds of all recoveries, including but not limited to compensatory and punitive damages, restitution and/or insurance recoveries, in any way arising from or related to the Litigation, whether by settlement, litigation, arbitration or otherwise. b. The Debtor is obligated to pay all costs, disbursements and expenses incurred in connection with the Litigation, including those incurred by Thomas Alexander and by experts, consultants or local counsel retained by Thomas Alexander with the approval of the Debtor. Such costs, Disbursements and expenses shall be billed on a monthly or quarterly basis and payable upon receipt, and are not to be deducted from the Contingent Fee. TBW also engaged Thomas Alexander to represent it to investigate, evaluate and, if appropriate, prosecute TBW's claims against Deloitte and certain of Deloitte's affiliates. Mr. Thomas attests his firm does not represent or hold any interest adverse to the Debtor or to the Debtor's estate with respect to the Litigation. Due to the nature of the Debtor's relationship with TBW and the services that Deloitte performed, the claims of TBW and Ocala against Deloitte will require substantially similar efforts to prosecute. Ocala said retaining a single firm as local counsel to TAF to prosecute these claims will avoid duplication of effort and minimize total litigation costs. Berger Singerman's current hourly rates range from $225 to $625. The current hourly rate of Paul Steven Singerman, Esq., the attorney who will be principally responsible for representing the Debtor, is $625. The current hourly rates for the associate attorneys and of counsel who will work on these cases range from $425 to $475. The current hourly rates for the legal assistants and paralegals at Berger Singerman range from $75 to $200. About Ocala Funding Orange, Florida-based Ocala Funding, LLC, a funding vehicle once controlled by mortgage lender Taylor Bean & Whitaker Mortgage Corp., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-04524) in Jacksonville on July 10, 2012. Ocala Funding used to be the largest originator and servicer of residential loans. Ocala was created by Taylor Bean & Whitaker to purchase loans originated by TBW and selling the loans to third parties, Freddie Mac. In furtherance of this structure Ocala raised money from noteholders Deutsche Bank AG and BNP Paribas Mortgage Corp. and other financial institutions, as secured lenders through sales of asset-backed commercial paper. The Debtor disclosed $1,747,749,787 in assets and $2,650,569,181 in liabilities as of the Chapter 11 filing. TBW was forced to file for Chapter 11 relief (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009, amid allegations of fraud by Taylor Bean's former CEO Lee Farkas and other employees. Mr. Farkas is now serving a 30-year prison term for 14 counts of conspiracy and fraud for being the mastermind of a $2.9 billion bank fraud. Mr. Farkas allegedly directed the sale of more than $1.5 billion in fake mortgage assets to Colonial Bank and misappropriated more than $1.5 billion from Ocala. TBW's bankruptcy also caused the demise of Colonial Bank, which for years was TBW's primary bank. TBW and its joint debtor-affiliates confirmed their Second Amended Joint Plan of Liquidation on July 21, 2011, and the TBW Plan became effective on Aug. 10, 2011. The TBW Plan established the TBW Plan Trust to marshal and distribute all remaining assets of TBW. Neil F. Lauria, as CRO for TBW and trustee of the TBW Plan Trust, signed the Chapter 11 petition of Ocala. In its Chapter 11 Petition, Ocala estimated more than $1 billion in assets and debts. Ocala holds 252 mortgage loans with an unpaid balance of $42.3 million as of May 31, 2012. The Debtor also holds five "real estate owned" properties resulting from foreclosures. The Debtor also holds $22.4 million in proceeds of mortgage loans previously owned by it that are on deposit in an account in the Debtor's name at Regions Bank. It also has an interest in $75 million in cash, consisting of proceeds of mortgage loans previously owned by the Debtor, that are in an account maintained by Bank of America, N.A. as prepetition indenture trustee for the benefit of the Noteholders. The Debtor also holds a claim in the current amount of $1.6 billion against the estate of TBW. The largest unsecured creditors include the Federal Deposit Insurance Corp., owed $898,873,958; and Cadwalader, Wickersham & Taft LLP, owed $1,632,385. Judge Jerry A. Funk presides over the case. Proskauer Rose LLP and Stichter, Riedel, Blain & Prosser, serve as the Debtor's counsel. Neil F. Lauria at Navigant Capital Advisors, LLC, serves as the Debtor's Chief Restructuring Officer. OCALA FUNDING: Proskauer Rose Approved as Bankruptcy Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida authorized Ocala Funding LLC to employ Proskauer Rose, LLP as counsel. As reported in the Troubled Company Reporter on July 16, 2012, the primary attorneys anticipated to work on this engagement are Jeff Marwil, Esq., Paul Possinger, Esq., and Jeremy Stillings, Esq. Mr. Marwil is a partner at Proskauer with over 25 years of experience specializing in bankruptcy and creditors' rights. Mr. Marwil has extensive experience in serving as a court-appointed fiduciary, including as trustee for the Bayou Hedge Fund Litigation Trust and as receiver for the Church Extension of the Church of God. Mr. Possinger is a partner at Proskauer with over 18 years of experience specializing in bankruptcy and creditors' rights. Mr. Stillings is an associate at Proskauer with eight years of experience in bankruptcy and creditors rights. Proskauer will charge for its legal services on an hourly basis in accordance with its hourly rates: Partner $550 - $1,200 Senior Counsel $450 - $1,050 Associate $205 - $795 Paraprofessionals $100 - $315 Mr. Marwil's hourly rate is $975; Mr. Possinger's hourly rate is $850; and Mr. Stillings' hourly rate is $700. Also expected to devote significant time to representing the Debtor in the Chapter 11 Case is paralegal Melissa Hagan, whose hourly rate is $235. Mr. Marwil attests that Proskauer's partners and associates do not hold or represent any interest adverse to the Debtor and that Proskauer and each of its partners and associates is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code. About Ocala Funding Orange, Florida-based Ocala Funding, LLC, a funding vehicle once controlled by mortgage lender Taylor Bean & Whitaker Mortgage Corp., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-04524) in Jacksonville on July 10, 2012. Ocala Funding used to be the largest originator and servicer of residential loans. Ocala was created by Taylor Bean & Whitaker to purchase loans originated by TBW and selling the loans to third parties, Freddie Mac. In furtherance of this structure Ocala raised money from noteholders Deutsche Bank AG and BNP Paribas Mortgage Corp. and other financial institutions, as secured lenders through sales of asset-backed commercial paper. The Debtor disclosed $1,747,749,787 in assets and $2,650,569,181 in liabilities as of the Chapter 11 filing. TBW was forced to file for Chapter 11 relief (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009, amid allegations of fraud by Taylor Bean's former CEO Lee Farkas and other employees. Mr. Farkas is now serving a 30-year prison term for 14 counts of conspiracy and fraud for being the mastermind of a $2.9 billion bank fraud. Mr. Farkas allegedly directed the sale of more than $1.5 billion in fake mortgage assets to Colonial Bank and misappropriated more than $1.5 billion from Ocala. TBW's bankruptcy also caused the demise of Colonial Bank, which for years was TBW's primary bank. TBW and its joint debtor-affiliates confirmed their Second Amended Joint Plan of Liquidation on July 21, 2011, and the TBW Plan became effective on Aug. 10, 2011. The TBW Plan established the TBW Plan Trust to marshal and distribute all remaining assets of TBW. Neil F. Lauria, as CRO for TBW and trustee of the TBW Plan Trust, signed the Chapter 11 petition of Ocala. In its Chapter 11 Petition, Ocala estimated more than $1 billion in assets and debts. Ocala holds 252 mortgage loans with an unpaid balance of $42.3 million as of May 31, 2012. The Debtor also holds five "real estate owned" properties resulting from foreclosures. The Debtor also holds $22.4 million in proceeds of mortgage loans previously owned by it that are on deposit in an account in the Debtor's name at Regions Bank. It also has an interest in $75 million in cash, consisting of proceeds of mortgage loans previously owned by the Debtor, that are in an account maintained by Bank of America, N.A. as prepetition indenture trustee for the benefit of the Noteholders. The Debtor also holds a claim in the current amount of $1.6 billion against the estate of TBW. The largest unsecured creditors include the Federal Deposit Insurance Corp., owed $898,873,958; and Cadwalader, Wickersham & Taft LLP, owed $1,632,385. Judge Jerry A. Funk presides over the case. Proskauer Rose LLP and Stichter, Riedel, Blain & Prosser, serve as the Debtor's counsel. Neil F. Lauria at Navigant Capital Advisors, LLC, serves as the Debtor's Chief Restructuring Officer. OCALA FUNDING: Stichte Riedel Approved as Local Counsel ------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida authorized Ocala Funding LLC to employ Stichte, Riedel, Blain & Prosser as local bankruptcy counsel. As reported in the Troubled Company Reporter on July 16, 2012, Stichter Riedel has represented debtors in some of the largest Chapter 11 cases ever filed in the Middle District of Florida, including (a) Hillsborough Holdings Corp., f/k/a The Jim Walter Corporation, and its 32 subsidiaries, which had combined assets and liabilities of more than $3 billion; (b) Koger Properties, Inc., a New York Stock Exchange company at the time of filing with assets and liabilities of more than $500 million; The Koger Partnership, Ltd., a publicly traded limited partnership with assets and liabilities of more than $200 million; Bicoastal Corporation, f/k/a The Singer Company, a corporation with assets in excess of $500 million and over $2 billion in asserted claims; Lykes Bros. Steamship Co., Inc., the third largest U.S. Flag international shipping company with assets and liabilities in excess of $300 million; JumboSports Inc., a major national retailer of sporting goods with 59 stores in more than 20 states and assets and liabilities of more than $300 million; Wm. G. Roe and Sons, Inc., and Wm. G. Roe and Company, Inc., the largest packer and shipper of tangerines in Florida; The American Ship Building Company, a New York Stock Exchange company at the time of filing; and Trust America Service Corp., an American Stock Exchange company at the time of filing. Stichter Riedel has advised the Debtor that the current hourly rates for the attorneys proposed to be primarily responsible for actively representing the Debtor are: (a) Russell M. Blain (Shareholder) $460 per hour (b) Edward J. Peterson (Shareholder) $350 per hour Generally, Stichter Riedel's hourly rates are: (a) Shareholders $325 to $475 per hour (b) Associates $210 to $325 per hour (c) Paralegals $90 to $160 per hour Edward J. Peterson, III, Esq., attests that Stichter Riedel neither holds nor represents any interest adverse to the Debtor's estate; and Stichter Riedel is a "disinterested person" within the meaning of Sections 101(14) and 327(a) of the Bankruptcy Code and does not hold or represent an interest adverse to the estate. About Ocala Funding Orange, Florida-based Ocala Funding, LLC, a funding vehicle once controlled by mortgage lender Taylor Bean & Whitaker Mortgage Corp., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-04524) in Jacksonville on July 10, 2012. Ocala Funding used to be the largest originator and servicer of residential loans. Ocala was created by Taylor Bean & Whitaker to purchase loans originated by TBW and selling the loans to third parties, Freddie Mac. In furtherance of this structure Ocala raised money from noteholders Deutsche Bank AG and BNP Paribas Mortgage Corp. and other financial institutions, as secured lenders through sales of asset-backed commercial paper. The Debtor disclosed $1,747,749,787 in assets and $2,650,569,181 in liabilities as of the Chapter 11 filing. TBW was forced to file for Chapter 11 relief (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009, amid allegations of fraud by Taylor Bean's former CEO Lee Farkas and other employees. Mr. Farkas is now serving a 30-year prison term for 14 counts of conspiracy and fraud for being the mastermind of a $2.9 billion bank fraud. Mr. Farkas allegedly directed the sale of more than $1.5 billion in fake mortgage assets to Colonial Bank and misappropriated more than $1.5 billion from Ocala. TBW's bankruptcy also caused the demise of Colonial Bank, which for years was TBW's primary bank. TBW and its joint debtor-affiliates confirmed their Second Amended Joint Plan of Liquidation on July 21, 2011, and the TBW Plan became effective on Aug. 10, 2011. The TBW Plan established the TBW Plan Trust to marshal and distribute all remaining assets of TBW. Neil F. Lauria, as CRO for TBW and trustee of the TBW Plan Trust, signed the Chapter 11 petition of Ocala. In its Chapter 11 Petition, Ocala estimated more than $1 billion in assets and debts. Ocala holds 252 mortgage loans with an unpaid balance of $42.3 million as of May 31, 2012. The Debtor also holds five "real estate owned" properties resulting from foreclosures. The Debtor also holds $22.4 million in proceeds of mortgage loans previously owned by it that are on deposit in an account in the Debtor's name at Regions Bank. It also has an interest in $75 million in cash, consisting of proceeds of mortgage loans previously owned by the Debtor, that are in an account maintained by Bank of America, N.A. as prepetition indenture trustee for the benefit of the Noteholders. The Debtor also holds a claim in the current amount of $1.6 billion against the estate of TBW. The largest unsecured creditors include the Federal Deposit Insurance Corp., owed $898,873,958; and Cadwalader, Wickersham & Taft LLP, owed $1,632,385. Judge Jerry A. Funk presides over the case. Proskauer Rose LLP and Stichter, Riedel, Blain & Prosser, serve as the Debtor's counsel. Neil F. Lauria at Navigant Capital Advisors, LLC, serves as the Debtor's Chief Restructuring Officer. OLD SECOND BANCORP: Reports $1.25-Mil. Net Income in 2nd Quarter ---------------------------------------------------------------- Old Second Bancorp, Inc., filed its quarterly quarterly report on Form 10-Q, reporting net income of $1.25 million on $15.69 million of net interest and dividend income for the three months ended June 30, 2012, compared with net income of $1.01 million on $16.47 million of net interest and dividend income for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $1.72 million on $30.79 million of net interest and dividend income, compared with a net loss of $2.11 million on $33.01 million of net interest and dividend income for the same period in 2011. The Company recorded a $6.28 million provision for loan losses in the first half of 2012, which included an addition of $200,000 in the second quarter. The provision for loan losses in the first half of 2011 was $4.50 million, which included an addition of $500,000 in the second quarter of 2011. The Company's balance sheet at June 30, 2012, showed $1.986 billion in total assets, $1.916 billion in total liabilities, and stockholders' equity of $70.1 million. The Bank exceeded the general minimum regulatory requirements to be considered "well capitalized" and is in full compliance with heightened capital ratios that it has agreed to maintain with the OCC contained within the Consent Order with the OCC, dated May 16, 2011. However, as a result of continuing to be under the Consent Order, the Bank is formally considered "adequately capitalized". A copy of the Form 10-Q is available for free at: http://is.gd/IotzOM Old Second Bancorp, Inc., is a financial services company with its main headquarters located in Aurora, Illinois. The Company is the holding company of Old Second National Bank, a national banking organization headquartered in Aurora, Illinois and provides commercial and retail banking services, as well as a full complement of trust and wealth management services. The Company has offices located in Cook, Kane, Kendall, DeKalb, DuPage, LaSalle and Will counties in Illinois. PACIFIC MONARCH: Gibson Dunn OK'd as Reorganization Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, according to Pacific Monarch Resorts, Inc., et al.'s case docket, authorized the Debtors to employ Gibson, Dunn & Crutcher, LLP, as general reorganization counsel. As reported in the Troubled Company Reporter on July 6, 2012, the Debtor also requested for authorization to employ Stutman, Treister & Glatt P.C., as general reorganization counsel. The Debtors related that on May 24, 2012, Jeffrey C. Krause joined Gibson Dunn's Los Angeles office as partner in the firm's Business Restructuring and Reorganization Practice Group. Prior to joining Gibson Dunn, Mr. Krause was a senior shareholder of ST&G, the Debtors' general reorganization counsel. Given Mr. Krause's integral role in the cases, the Debtors seek to employ Gibson Dunn as joint general reorganization counsel with ST&G. Subject to Court's approval, Mr. Krause will continue to coordinate workflows among Gibson and ST&G to avoid duplication of their respective services. Gibson Dunns' legal fees are at varying rates ranging from $395 to $1,075 for attorneys. To the best of the Debtors' knowledge, Gibson Dunn is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Pacific Monarch Pacific Monarch Resorts, Inc., and its affiliated debtors operate a "timeshare business" business. The Debtors filed voluntary Chapter 11 petitions (Bankr. C.D. Calif. Lead Case No. 11-24720) on Oct. 24, 2011, disclosing $100 million to $500 million in both assets and debts. The affiliated debtors are Vacation Interval Realty Inc., Vacation Marketing Group Inc., MGV Cabo LLC, Desarrollo Cabo Azul, S. de R.L. de C.V., and Operadora MGVM S. de R.L. de C.V. Based in Laguna Hills, California, Pacific Monarch and its affiliates generate revenue primarily from the sale and financing of "vacation ownership points" in a timeshare program commonly known and marketed as "Monarch Grand Vacations," a multi-location vacation timeshare program that establishes a uniform plan for the development, ownership, use and enjoyment of specified resort accommodations for the benefit of its members. MGV is a nonprofit mutual benefit corporation whose members are timeshare owners, and it is administered by a board of directors elected by MGV members. As of the Petition Date, MGV owned Resort Accommodations within these resorts: Palm Canyon Resort (Palm Springs), Riviera Oaks Resort & Racquet Club (Ramona), Riviera Beach & Spa Resort - Phases I and II (Dana Point), Riviera Shores Beach (Dana Point), Cedar Breaks Lodge (Brian Head), Tahoe Seasons Resort (South Lake Tahoe), Desert Isle of Palm Springs (Palm Springs), the Cancun Resort (Las Vegas), and the Cabo Azul Resort (Los Cabos, Mexico). Future Vacation Accommodations are currently in the pre- development stage in Kona, Hawaii and Las Vegas, Nevada. Additionally, the Cabo Azul Resort has construction in progress on two buildings. The Pacific Monarch entities do not include the entities that actually own the timeshare properties that have been dedicated to use by the purchasers of timeshare points. The trusts that own the properties are not liable for the Pacific Monarch entities' obligations. MGV is not a debtor. Judge Erithe A. Smith presides over the jointly administered cases. Lawyers at Stutman, Treister & Glatt PC, in Los Angeles, serve as counsel to the Debtors. The petition was signed by Mark D. Post, chief executive officer and director. Houlihan Lokey Capital, Inc., serves as investment baker to the Debtors. Raymond J. Gaskill, Esq., represents the Debtors as special timeshare counsel. Greenberg, Whitcombe & Takeuchi, LLP, serves as the Debtors' special counsel for employment and labor matters. Lesley, Thomas, Schwarz & Postma, Inc., serves as the Debtors' tax and vacation ownership points accountants. White & Case LLP is the Debtors' special tax counsel. Attorneys at Brinkman Portillo Ronk, PC, serve as counsel to the Official Committee of Unsecured Creditors. Creditor Ikon Financial Services is represented by Christine R. Etheridge. Creditor California Bank & Trust is represented in the case by Michael G. Fletcher at Frandzel Robins Bloom & Csato, L.C. Marshall F. Goldberg, Esq. at Glass & Goldberg argues for creditor Fifth Third Bank. Creditor The Macerich Company is represented by Brian D. Huben, Esq. at Katten Muchin Rosenman LLP. Interested Party DPM Acquisition is represented by Joshua D. Wayser, Esq. at Katten Muchin Rosenman LLP. PATRICK FARMS: M.D. Ga. Court Confirms Reorganization Plan ---------------------------------------------------------- Chief Bankruptcy Judge John T. Laney, III, on Aug. 16 confirmed the Plan of Reorganization in the Chapter 11 cases of Patrick Farms Partnership, Gibbs Patrick Farms Inc., and Heritage Farms LLC. In a separate order on the same date, the Court directed the Debtors to file with the Clerk of Court, within 15 days of the date of the entry of the confirmation order, a report specifying the projected date for completion of substantial consummation as defined in ll U.S.C. Sec. 1101(2) describing the action to be taken to complete substantial consummation. If the projected date for completion of substantial consummation must be extended, the Debtors are directed to file a supplemental report specifying a new projected date, the progress made toward consummation of the Plan, the action remaining to be taken to complete substantial consummation and the reasons for the delay. Upon effective date of the Plan, the Debtors are to file a Final Report and Final Account in compliance with 11 U.S.C. Sec. 704(9), (b) file an Application for Final Decree, and (c) submit a proposed Final Decree. A copy of the Court's Aug. 16, 2012 Order is available at http://is.gd/N6KLE4from Leagle.com. Patrick Farms Partnership, in Omega, Georgia, and affiliates filed for Chapter 11 bankruptcy (Bankr. M.D. Ga. Case No. 10-71203) on Aug. 2, 2010. Judge John T. Laney III presides over the case. Austin E. Carter, Esq. -- acarter@stoneandbaxter.com -- at Stone and Baxter, LLP, serves as the Debtors' counsel. In its petition, Patrick Farms estimated $1 million to $10 million in both assets and debts. A list of the Company's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/gamb10-71203.pdf The petition was signed by James Gibbs Patrick, III, partner. PEREGRINE FINANCIAL: Wasendorf Pleads Not Guilty at Arraignment --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Russell R. Wasendorf Sr., the founder and former chief executive of Peregrine Financial Group Inc., pleaded not guilty at a three-minute arraignment on Aug. 17. He didn't oppose being held without bail. According to the report, with his assets frozen by a receiver and lacking funds to pay for private counsel, Mr. Wasendorf will be defended by a federal public defender. Trial is tentatively scheduled for the last week in Oct. He was indicted on Aug. 13 by a federal grand jury in Iowa on 31 counts of making false statement to the U.S. Commodity Futures Trading Commission. The indictment says the reports overstated the amount of segregated customer funds by tens of millions dollars. Precise amounts weren't given. Mr. Wasendorf already confessed to conducting a fraud for 20 years at Peregrine, a futures broker. The criminal case is U.S. v. Wasendorf, 12-cr-2021, U.S. District Court, Northern District of Iowa (Eastern Waterloo). About Peregrine Financial Peregrine Financial Group Inc. filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488) on July 10, 2012, disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier that day, 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 CEO 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 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. PLATINUM PROPERTIES: Has Until Oct. 25 to File Reorganization Plan ------------------------------------------------------------------ The Hon. Basil H. Lorch III of the Bankruptcy Court for the Southern District of Indiana extended, for the fourth time, Platinum Properties, LLC, et al.'s exclusive periods to file and solicit acceptances for the proposed plan of reorganization until Oct. 25, 2012, and Dec. 26, respectively. As reported in the Troubled Company Reporter on Aug. 8, 2012, in the foruth extension motion, the Debtors explained that they require additional time to negotiate with creditors to ascertain the viability of the alternative exit strategies. The Debtors have reached agreements, or expect to soon reach agreements, with the majority of their key creditors and terminating exclusivity at this stage of the Chapter 11 cases will imperil the Debtors' ongoing negotiations with its creditors. About Platinum Properties and PPV LLC Indianapolis, Indiana-based Platinum Properties, LLC, is a residential real estate developer. Platinum acquires land, designs the projects, obtains zoning and other approvals, and constructs roads, drainage, utilities, and other infrastructure of residential subdivisions. Platinum then sells the finished, platted lots. Platinum also has an ownership interest in several special purpose entities that in turn own, operate and manage individual projects. PPV LLC is a joint venture between Platinum and a non-debtor entity, Pittman Partners, Inc., each of whom hold an equity interest in PPV. PPV owned four projects directly and owns 100% of the membership interest of Sweet Charity Estates, LLC. Platinum Properties and PPV LLC filed for Chapter 11 protection (Bankr. S.D. Ind. Case Nos. 11-05140 and 11-05141) on April 25, 2011. Lawyers at Baker & Daniels LLP, in Indianapolis, Indiana, serve as the Debtors' bankruptcy counsel. Platinum Properties disclosed $14,624,722 in assets and $181,990,960 in liabilities as of the Chapter 11 filing. The U.S Trustee has not yet appointed a creditors committee in the Debtor's case. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. POWIN CORPORATION: Had $634,500 Net Loss in Second Quarter ---------------------------------------------------------- Powin Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $634,572 on $13.5 million of revenue for the three months ended June 30, 2012, compared net income of $54,993 on $12.7 million of revenue for the same period a year earlier. For the six months ended June 30, 2012, the Company had a net loss of $963,913 on $26.8 million of revenue, compared with net income of $79,485 on $23.7 million of revenue for the same period of 2011. The Company's balance sheet at June 30, 2012, showed $15.7 million in total assets, $8.9 million in total liabilities, and stockholders' equity of $6.8 million. "The Company sustained operating losses during the three and six months ended June 30, 2012. The Company's continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its shareholders or other sources, as may be required." "The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company's ability to do so." A copy of the Form 10-Q is available for free at: http://is.gd/LHf7NM Tualatin, Oregon-based Powin Corporation was formed as an Oregon corporation on Nov. 15, 1990, by Joseph Lu, a Chinese-American. Since its incorporation, Powin has grown into a large original equipment manufacturer ("OEM") utilizing six plants on two continents. Powin provides manufacturing coordination and distribution support for companies throughout the United States. More than 2,000 products and parts are supplied by Powin on a regular basis. PROTECTIVE LIFE: Fitch Puts 'BB+' Rating on $150-Mil. Debt ---------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to Protective Life Corp.'s (PL) new issuance of $150 million in 6% hybrid debt. Proceeds from the new debt issuance will be used to refinance the remainder of the company's outstanding trust preferreds, so Fitch does not view this as an increase in overall leverage. PL's financial leverage ratio was 31% as of June 30, 2012 compared to 28% at the end of 2011. The increase was driven primarily by a reduction in equity due to the new accounting rules related to deferred acquisition costs. There was no increase in debt in the first half of 2012. The new hybrid debt issuance, which will be due in 2042, will rank in priority of payment the same as the trust preferreds being refinanced. Based on Fitch's rating criteria, this hybrid debt issuance has not been assigned any equity credit. On May 16, 2012, Fitch affirmed PL's 'BBB+' Issuer Default Rating (IDR) rating, and the 'A' Insurer Financial Strength (IFS) rating of Protective Life Insurance Co., as well as other PL ratings. The Rating Outlook is Stable. The affirmations were based on Fitch's view that PL's operating results are in line with expectations. The key rating triggers that could result in an upgrade include continued recovery in earnings combined with growth in equity and surplus (particularly if accomplished through earnings). Ratings could be upgraded if financial leverage remains below 25% and TFC leverage falls into the 0.8x to 1.0x range. Ratings could also be positively affected if EBIT-based interest coverage rose above 9x. The key rating triggers that could result in a downgrade include: material declines in GAAP equity (that would drive financial leverage above 30%), or statutory capital (that would drive reported RBC below 300%), a downturn or weak growth in earnings, or a material reinsurance loss. Ratings could also be pressured if interest coverage fell below 5x. Fitch assigns a 'BB+' rating to the following: Protective Life Corp.'s -- $150 million in 6% subordinated notes due 2042. PULTEGROUP INC: Fitch Affirms Senior Unsecured Ratings at 'BB' -------------------------------------------------------------- Fitch Ratings has affirmed PulteGroup, Inc.'s (NYSE: PHM) Issuer Default Rating (IDR) and senior unsecured ratings at 'BB'. The Rating Outlook has been revised to Stable from Negative. The ratings and Stable Outlook for PHM reflect year-over-year improvement in operational and financial categories (especially net orders and gross profit margin) during recent quarters and better performance relative to its peers, a moderate housing recovery, broad geographic and product diversity, a long track record of adhering to a disciplined financial strategy and somewhat more recently an at times aggressive growth strategy. The merger with Centex in August 2009 further enhanced the company's broad geographic and product line diversity. Centex's significant presence in the entry level and first move-up categories complements PHM's strength in both the move-up and active adult segment. PHM's Del Webb (active adult) segment is perhaps the best recognized brand name in the homebuilding business. The company also did a good job in reducing its inventory and generating positive operating cash flow during the severe housing downturn from 2007 to 2011. The rating also takes into account the company's strong liquidity position as well as the successful execution of its debt repayment strategy following the merger with Centex in August 2009 and more recently. Subsequent to the merger the company repurchased $1.5 billion of senior notes through a tender offer. PHM also retired $898.5 million of debt in 2010 and $323.9 million of debt in 2011. The company's remaining debt maturities are well laddered with $96.5 million due to mature in August 2012, $180.6 million scheduled to mature in 2013 and $569.2 million due in 2014. PHM ended the June 2012 quarter with $1.310 billion of unrestricted cash and equivalents and $3.093 billion of senior notes. In addition, Fitch has taken into account PHM's significant ramp up in gross profit margins (excluding impairments) since the first quarter of 2009 (1,088 bps) and ongoing operational initiatives expected to generate further margin expansion. Those initiatives include a rising share of closings from recently acquired, typically lower cost land, favorable product mix benefiting from move-up and active adult closings, pushing design, engineering and purchasing activities out to field operations to drive local costs lower, and working to ensure proper balance of pre-sold vs. lower margin speculative sales (currently 75% pre-sold, 25% spec). 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 comparisons have been solidly positive on a consistent basis. However, month to month the statistics (single- family starts, new home, 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 early spring 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. As of June 30, 2012, PHM controlled 124,976 lots, of which 88.4% are owned and the remaining 11.6% are controlled through options. Total lots controlled represent an approximately 8.1-year supply of total lots based on LTM closings and the company owns 7.2 years of lots. The company's land position has historically been longer compared to other public homebuilders due to its Del Webb operations. PHM's active adult and certain master-planned communities can extend from five to seven years or longer during their build-out. During the past few years, the company has been relatively subdued in committing to incremental land purchases due to its sizeable land position. Of course, the acquisition of Centex in 2009 allowed the company to sharply increase its land position. Management estimates that 30% of its total lots controlled are fully developed. PHM expects to spend about $900 million on land and development this year. By comparison, the company spent $750 million on land and development in 2009, while Centex spent roughly $200 million. PHM expended $980 million on land and development in 2010 and $1 billion in 2011. (For perspective, PHM alone spent $4.6 billion on land and development in 2006.) The company continues to have meaningful development expenditures, largely due to its Del Webb active adult (retiree) operations. Fitch is comfortable with the company's land strategy given PHM's cash position, debt maturity schedule, proven access to the capital markets, and management's demonstrated discipline in pulling back on its land and development activities during periods of distress. Additionally, Fitch expects management to be disciplined with the uses of its cash, refraining from significant share repurchases or one-time dividends to its stockholders that would meaningfully deplete its liquidity position. PHM's future ratings and Outlook will be influenced by broad housing market trends as well as company specific activity, such as 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 and free cash flow trends and uses. A near-term positive rating action would be considered if the recovery in housing is significantly better than our current outlook and the company's credit metrics are meaningfully above our expectations. A negative rating action could be triggered if there is a shortfall in PHM's financials and there is a sharp drop in cash (below $700 million) as well as underperforming operating metrics. Fitch has affirmed the following ratings for PHM and revised the Rating Outlook to Stable. PulteGroup, Inc.: -- IDR at 'BB'; -- Senior unsecured debt at 'BB'. Centex Corp.: -- IDR at 'BB'; -- Senior unsecured debt at 'BB'. QUALTEQ INC: Hilco Real Approved as Trustee's Real Estate Advisor ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois authorized Fred C. Caruso, Chapter 11 trustee for Qualteq, Inc., to employ Hilco Real Estate, LLC as real estate advisors. The Court also approved the amended the fee structure for PricewaterhouseCoopers Corporate Finance LLC. As reported in the Troubled Company Reporter on July 31, 2012, Hilco will advise and assist the trustee in connection with these tasks: (a) meeting with the trustee to ascertain the trustee's goals, objectives, and financial parameters; (b) soliciting interested parties for the sale of certain real properties, and marketing the Properties for sale; (c) at the trustee's direction and on the Trustee's behalf, negotiating the terms of the sale of the Properties; and (d) identifying fair market rent associated with the Properties or other locations leased by the Debtors to their affiliates. Hilco will be paid according to this fee structure: Monthly Retainer * On Oct. 15, 2012, the trustee shall pay Hilco a fee of $50,000. * On Nov. 15, 2012, the trustee shall pay Hilco a fee of $100,000. * On Dec. 15, 2012, the trustee shall pay Hilco a fee of $50,000 Transaction Fees * Subject to Section 4(c)(ii) of the Engagement Letter, for each Property that is sold, Hilco will earn and be entitled to payment by the Trustee of a fee equal to 3.25% of the Gross Sale Proceeds from the sale of each such Property. * For each Property identified as a "Co-Marketed Property" that is sold, transferred, or otherwise disposed of during the Term in connection with a going concern transaction for which PwC CF is otherwise entitled to a Transaction Fee (as that term is defined by the PwC CF Engagement Letter), the Real Estate Transaction Fee shall be 4.00%; provided that one-half of the Real Estate Transaction Fee shall be payable by the Trustee to PwC CF and not Hilco. For the avoidance of doubt, Section 4(c)(ii) of the Engagement Letter applies only where the acquirer of the applicable Co-Marketed Property is also the acquirer (or an affiliate of such acquirer) of the assets acquired and/or liabilities assumed in a going- concern transaction for which PwC CF is entitled to a Transaction Fee pursuant to the PwC CF Engagement Letter. * To the extent the "value" of a Co- Marketed Property sold, transferred, or otherwise disposed of in connection with any other transaction is enhanced as a result of a bid or bids received from a third party procured by PwC CF, 50 basis points of the Real Estate Transaction Fee shall be payable by the Trustee to PwC CF and not Hilco. PwC CF, Hilco, and the Trustee shall mutually agree upon the "value" enhancement or, if such parties are unable to reach an agreement, resolved by the Bankruptcy Court after notice and a hearing. For the avoidance of doubt, Section 4(c)(iii) of the Engagement Letter shall not apply if a Real Estate Transaction Fee is payable to PwC CF pursuant to Section 4(c)(ii) of the Engagement Letter. * Hilco shall not be entitled to a fee for any Property sold, transferred, or otherwise disposed of as part of a "credit bid" by one or more of the Debtors' lenders, unless the Trustee is permitted to recover such fees pursuant to section 506(c) of the Bankruptcy Code. Crediting * For each $1 of Transaction Fees earned, $0.50 shall be credited against the Monthly Fees earned. Court Appearances * Hilco shall be paid $400 for each appearance in the Bankruptcy Court. In addition, the Trustee will reimburse Hilco for its travel and the reasonable, documented out-of-pocket expenses it incurs in connection with its services under the Engagement Letter. Ian S. Fredericks, Esq., vice president and assistant general counsel of Hilco Trading, LLC, the parent company of Hilco Real Estate, LLC, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The Court also ordered that, among other things: -- the PwC CF retention order is amended that PwC CF will be eligible to receive the real estate transaction fees provided that the fee will be subject to allowance and approval by the Court; and -- the gross sale proceeds used to calculate any real estate transaction fee payable to PwC CF will not included in aggregate consideration used to determine the transaction fee payable to PwC CF. About QualTeq Inc. South Plainfield, New Jersey-based QualTeq, Inc., engages in the design, manufacture, and personalization of plastic cards in the United States. The company manufactures magnetic, contact, and dual interface smart cards. Qualteq Inc. and 17 affiliated companies filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12572) on Aug. 14, 2011. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, serve as local counsel to the Debtors. K&L Gates LLP is the general bankruptcy counsel. Eisneramper LLP is the accountants and financial advisors. Scouler & Company is the restructuring advisors. Lowenstein Sandler PC is counsel to the Committee. Avadamma LLC disclosed $38,491,767 in assets and $36,190,943 in liabilities as of the Petition Date. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed four unsecured creditors to serve on the Official Committee of Unsecured Creditors. As reported in the Troubled Company Reporter on Feb. 23, 2012, Delaware Bankruptcy Judge Kevin J. Carey granted the request of Bank of America, N.A., to transfer the venue of the Chapter 11 cases to the U.S. Bankruptcy Court for the Northern District of Illinois. R & D DEVELOPMENT: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: R & D Development, LLC 3760 Amber Jack Bay 5450 Summerwood Yorba Linda, CA 92880 Lake Havasu, AZ 85403 Bankruptcy Case No.: 12-18641 Chapter 11 Petition Date: August 20, 2012 Court: United States Bankruptcy Court District of Arizona (Yuma) Judge: Randolph J. Haines Debtor's Counsel: Dean William O'Connor, Esq. DEAN W. O'CONNOR PLLC 2850 E. Camelback Suite 200 Phoenix, AZ 85016 Tel: (602) 956-9555 Fax: (602) 801-9070 E-mail: DWOConnor@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Richard Kyees, managing member. REOSTAR ENERGY: Hatcher & Harris to Defend Inglish Family Suit -------------------------------------------------------------- Reostar Energy Corporation, et al., ask the U.S. Bankruptcy Court for the Northern District of Texas for permission to employ Hatcher & Harris, P.C. as special litigation counsel, to defend a state court litigation against the Debtor in Cooke County, Texas. H&H has a significant amount of experience in complex business and oil and gas litigation matters in state court in the county where the litigation is pending. H&H will act as lead counsel in defending the Inglish Family Litigation. H&H will coordinate its efforts with the Debtors' bankruptcy counsel to prevent any duplication of effort to the fullest extent possible. The hourly rates charged by H&H will be $350 per hour for Belvin R. Harris who will be the primary lead counsel and for Jim Hatcher who may assist in the case to cover hearings or prepare witnesses or the like. The Debtor proposes to pay a $5,000 retainer to H&H upon approval of the application. To the best of the Debtors' knowledge, H&H does not represent or hold any interest adverse to the Debtors with respect to the matters on which H&H is to be retained as special litigation counsel. About ReoStar Energy Fort Worth, Texas-based ReoStar Energy Corporation is engaged in the exploration, development and acquisition of oil and gas properties, primarily located in the state of Texas. The Company owns roughly 9,000 acres of leasehold, which include 5,000 acres of exploratory and developmental prospects as well as 4,000 acres of enhanced oil recovery prospects. ReoStar filed for Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 10-47176) on Nov. 1, 2010. Bankruptcy Judge D. Michael Lynn presides over the case. Bruce W. Akerly, Esq., and Arthur A. Stewart, Esq., at Cantey Hanger LLP, in Dallas, represent the Debtors in their restructuring efforts. Greenberg Taurig, LLP, serves as special corporate/securities counsel. Reostar Energy disclosed $15.3 million in assets and $16.4 million in liabilities. ReoStar Energy's bankruptcy case is jointly administered with ReoStar Gathering, Inc., ReoStar Leasing, Inc., and ReoStar Operating, Inc. ReoStar Energy is the lead case. No trustee was appointed in the Debtors' cases. On Jan. 10, 2011, Michael McConnell was appointed as Chapter 11 examiner. ReoStar filed for bankruptcy a few weeks after BT and MK Energy and Commodities LLC, a Delaware Limited Liability Corporation comprised of two members, BancTrust International, Inc., and MK Oil Ventures LLC, accelerated a Union Bank note and issued a foreclosure notice. BTMK acquired full interest in ReoStar's $25 million line of credit from Union Bank. Earlier in 2010, BT and MK Capital expressed interested in investing in ReoStar and in acquiring the line of credit for that purpose. Roughly $10.8 million of the Union Bank loan were then outstanding, and Union Bank assigned the loan to BTMK for roughly $5.4 million. The Plan provides that holders of general unsecured claims in each of the Debtors will have 100% of the net proceeds from all estate actions, and 20% of their allowed claim amounts over 36 equal monthly payments, without interest. According to the July 20 Plan, BT & MK has an estimated unsecured claim of $185,000 against each of the Debtors only for voting purposes. Unsecured creditors are impaired. Holders of existing interests won't receive anything. New interests will be sold to Russco Energy LLC. RESIDENTIAL CAPITAL: Triaxx Wants Docs From Certificateholders -------------------------------------------------------------- Triaxx Prime CDO 2006-1, LLC, Triaxx Prime CDO 2006-2, LLC, and Triaxx Prime CDO 2007-1, LLC, have filed objections to the request of Residential Capital LLC and its affiliates for approval of two settlement agreements concerning 392 trusts that issued residential mortgage-backed securities. The Proposed RMBS Settlement is between the Debtors and certain institutional investors that hold Certificates. Triaxx is asking the Court to compel certain certificateholders to produce documents showing the dates and prices of their purchases to determine whether they are distressed debt investors. According to Triaxx, the proposed discovery from the Settling Certificateholders is relevant, inter alia, to whether the Proposed Settlement is a "fair and equitable resolution of the R&W Claims," whether it "prevent[s] a windfall" to the Settling Certificateholders, and whether it was the product of "arm's- length and exhaustive" negotiations. Triaxx's counsel, John G. Moon, Esq., at Miller & Wrubel P.C., in New York, tells the Court the Subpoena is not duplicative of either the investigation undertaken by the Chapter 11 Examiner or the subpoenas previously served by the Official Committee of Unsecured Creditors. 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. 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. ResCap is selling its mortgage origination and servicing businesses and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets. At the onset of the bankruptcy case, ResCap struck a deal with Nationstar Mortgage LLC for the mortgage origination and servicing businesses, and with Ally Financial for the legacy portfolio. Together, the asset sales are expected to generate roughly $4 billion in proceeds. According to Bloomberg News, following a hearing in June, the bankruptcy judge scheduled auctions for Oct. 23. A hearing to approve the sales was set for Nov. 5. Fortress Investment Group LLC will make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. will serve as stalking-horse bidder for the remaining portfolio of mortgages. 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: FHFA Defends Bid to Access Documents --------------------------------------------------------- The Federal Housing Finance Agency, as Conservator for the Federal Home Loan Mortgage Corporation, is asking the Bankruptcy Court to permit FHFA to obtain loan files relevant to the action styled Federal Housing Finance Agency, as Conservator for the Federal Home Loan Mortgage Corporation v. Ally Financial Inc. f/k/a GMAC, LLC et al. pending in the United States District Court for the Southern District of New York as Case No. 11- Civ. 7010. The Debtors objected, saying they will incur millions of dollars in expenses, and that employees necessary for the restructuring and preservation of estate assets will be distracted during the critical period in its Chapter 11 case. All of this expense and interference with the Debtors will not benefit them or any other creditor, and the sought discovery will most certainly be used against the Debtors and their interests by FHFA, explained counsel, Joel C. Haims, Esq., at Morrison & Foerster LLP, in New York. FHFA countered that the Bankruptcy Court that the Debtors and their non-debtor affiliates have imposed every imaginable roadblock to stop FHFA from prosecuting its claims against the Non-Debtor Affiliates and unrelated non-debtors. To prosecute FHFA's case and other cases before Judge Cote of the U.S. District Court for the Southern District of New York, FHFA requires discovery of certain basic -- but essential -- information on the loans in the securitizations at issue, Andrew K. Glenn, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, maintains. FHFA, he cites, has sought that information for years: long before the Petition Date or the filing of its case. Indeed, Mr. Glenn points out, as early as July 2010, FHFA, in its capacity as Conservator, served conservator subpoenas to certain of the Debtors and the Non-Debtor Affiliates that demanded production of, among other things, the same information FHFA seeks today. "That information has never been provided," he says. In connection with the FHFA Case, the Non-Debtor Affiliates allege that they do not possess the documents at issue, that the documents are property of the Debtors' estates and that the automatic stay precludes them from obtaining the documents from the Debtors, Mr. Glenn adds. Judge Cote has directed FHFA -- before moving to compel production from the Non-Debtor Affiliates in the FHFA Case -- first to seek from the Bankruptcy Court access to the information with the cooperation of Ally Financial, Inc., Mr. Glenn reiterates. FHFA maintains that it should be permitted to access the information it seeks. 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. 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. ResCap is selling its mortgage origination and servicing businesses and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets. At the onset of the bankruptcy case, ResCap struck a deal with Nationstar Mortgage LLC for the mortgage origination and servicing businesses, and with Ally Financial for the legacy portfolio. Together, the asset sales are expected to generate roughly $4 billion in proceeds. According to Bloomberg News, following a hearing in June, the bankruptcy judge scheduled auctions for Oct. 23. A hearing to approve the sales was set for Nov. 5. Fortress Investment Group LLC will make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. will serve as stalking-horse bidder for the remaining portfolio of mortgages. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RG STEEL: Union Agrees to $6.5 Million Settlement on Benefits ------------------------------------------------------------- Peg Brickley at Dow Jones' Daily Bankruptcy Review reports that RG Steel LLC and the union representing most of its nearly 4,000 workers have come to terms over the end of health care and benefits for those whose jobs are being wiped out in the company's collapse. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12-11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent and provides administrative services. RG Steel LLC sold the Sparrows Point steel mill to liquidator Hilco Industrial on Aug. 7 for about $72 million, Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Saul Ewing LLP serves as co-counsel. Huron Consulting Services LLC serves as its financial advisor. RG STEEL: Committee Joins Objection to Motion to Lift Stay ---------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of WP Steel Venture LLC, et al., filed with the U.S. Bankruptcy court for the District of Delaware a joinder to the Debtors' objection to motion to modify the automatic stay, or in the alternative, extend the automatic stay to the pending state court action. The motion was filed by Central West Virginia Energy Company, Massey Energy Company and Massey Coal Sales Company, Inc., According to the Committee, the movants have not sufficiently demonstrated cause for lift or modify the automatic stay. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. RG Steel LLC disclosed $1,293,320,461 in assets and $1,050,005,993 in liabilities as of the Chapter 11 filing. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent and provides administrative services. RG Steel LLC sold the Sparrows Point steel mill to liquidator Hilco Industrial on Aug. 7 for about $72 million, Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Saul Ewing LLP serves as co-counsel. Huron Consulting Services LLC serves as its financial advisor. RICHFIELD OIL: Had $864,900 Net Loss in Second Quarter ------------------------------------------------------ Richfield Oil & Gas Company filed its quarterly report on Form 10-Q, reporting a net loss of $864,906 on $229,037 of revenues for the three months ended June 30, 2012, compared with a net loss of $1.8 million on $137,544 of revenues for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $2.9 million on $448,898 of revenues, compared with a net loss of $3.1 million on $400,059 of revenues for the same period in 2011. The Company's balance sheet at June 30, 2012, showed $15.6 million in total assets, $6.0 million in total liabilities, and stockholders' equity of $9.6 million. The Company sustained a net loss for the six months ended June 30, 2012 of $2.9 million and a net loss for the year ended Dec. 31, 2011, of $9.6 million, and has an accumulated deficit of $25.5 million as of June 30, 2012. Mantyla McReynolds LLC, in Salt Lake City, Utah, expressed substantial doubt about Richfield Oil'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 from operations causing negative working capital and negative operating cash flows. A copy of the Form 10-Q is available for free at: http://is.gd/gmA93e Salt Lake City-based Richfield Oil & Gas Company is an oil and gas exploration and production company with ten projects in Utah, Kansas, Oklahoma and Wyoming. The Company is currently producing oil from four projects in Kansas. The Company is currently completing one well in Juab County, Utah which the Company refers to as the "Liberty #1 Well," and is in the completion stage of development. RITZ CAMERA: Taps Ernst & Young as Tax Service Provider ------------------------------------------------------- Ritz Camera & Image, L.L.C., et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Ernst & Young LLP as tax service provider. Among other things, EY LLP's services and hourly rates include: A. Tax Compliance Services -- preparation of the U.S. federal income tax form 1065, and state and local income and franchise tax returns for Ritz Camera. Partner $620 - $730 Executive manager $520 - $660 Senior Manager $500 - $590 Manager $420 - $520 Senior $250 - $390 Staff $120 - $210 B. Bankruptcy Tax Services -- work with the Debtors in developing an understanding of the Debtors' business objectives and strategies, including understanding the tax implications of any reorganization and restructuring alternatives the Debtors are evaluating that may result in a change in the equity, capitalization and ownership of the shares of the Debtors or their assets, including assistance with modeling the foregoing. Partner/Principal $850 - $990 Executive Director $710 - 890 Senior Manager $680 - $800 Manager $570 - $710 Senior $340 - $530 Staff $170 - $290 C. The Routine On-Call Services -- routine tax advise and assistance concerning issues as requested by the Debtors when the projects are not covered by a separate statement of work and do not involve any significant tax planning or projects. Partner/Principal $850 - $990 Executive Director $710 - $890 Senior Manager $680 - $800 Manager $570 - $710 Senior $340 - $530 Staff $170 - $290 The Debtors relate that EY LLP's fees for the services will not exceed $70,000. To the best of the Debtors' knowledge, EY LLP is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. An Aug. 28, 2012, hearing at 11:00 a.m. has been set. About Ritz Camera Beltsville, Maryland-based Ritz Camera & Image LLC -- http://www.ritzcamera.com-- sells digital cameras and accessories, and electronic products. It sought Chapter 11 protection (Bankr. D. Del. Case No. 12-11868) on June 22, 2012, to close unprofitable stores. Ritz claims to be the largest camera and image chain the U.S., operating 265 camera stores in 34 states as well as an Internet business. Ritz Camera intends to shut 128 locations and cut its staff in half. Included in the closing are 10 locations in Maryland and 4 in Virginia. Affiliate Ritz Interactive Inc., owner e-commerce Web sites that include RitzCamera.com and BoatersWorld.com, also filed for bankruptcy. RCI's predecessor, Ritz Camera Centers, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10617) on Feb. 22, 2009. Ritz generated $40 million by selling all 129 Boater's World Marine Centers. A group that included the company's chief executive officer, David Ritz, formed Ritz Camera & Image to buy at least 163 of the remaining 375 camera stores. The group paid $16.25 million in cash and a $7.8 million note. Later, Ritz sold a $4 million account receivable for $1.5 million to an owner of the company that owed the debt. In the 2009 petition, Ritz disclosed total assets of $277 million and total debts of $172.1 million. Lawyers at Cole, Schotz, Meisel, Forman & Leonard, P.A., served as bankruptcy counsel. Thomas & Libowitz, P.A., served as the Debtor's special corporate counsel and conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc., served as the Debtor's chief restructuring officer. Kurtzman Carson Consultants LLC acted as claims and noticing agent. Attorneys at Cooley Godward Kronish LLP and Bifferato LLC represented the official committee of unsecured creditors as counsel. In April 2010, the Court approved a liquidating Chapter 11 plan proposed by the company and the official creditor's committee. Under the Plan, unsecured creditors were to recover 4% to 14% of their claims. In the 2012 petition, RCI estimated total assets and liabilities of $50 million to $100 million. The Debtors owe not less than $16.32 million for term and revolving loans provided by secured lenders led by Crystal Finance LLC, as administrative agent. Attorneys at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims agent. WeinsweigAdvisors LLC's Marc Weinsweig has been appointed as Ritz's CRO. Mark L. Desgrosseilliers, Esq., and Ericka F. Johnson, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC. Crystal Finance, the DIP lender, is represented by Morgan, Lewis & Bockius and Young Conaway Stargatt & Taylor LLP. Roberta A. Deangelis, U.S. Trustee for Region 3, appointed seven creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee tapped Cooley LLP as its lead counsel, Richards, Layton & Finger, P.A. as its Delaware counsel, and PricewaterhouseCoopers LLP as its financial advisor. RITZ CAMERA: Taps Hilco Streambank to Sell Intellectual Property ---------------------------------------------------------------- Ritz Camera & Image, L.L.C., et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Hilco IP Services LLC doing business as Hilco Streambank as exclusive sales and marketing agent for the sale of certain intellectual property unrelated to the Debtors' core business. Hilco Streambank will, among other things; -- assist th Company's management in collecting and securing all available information and date concerning the assets; -- prepare marketing materials designed to advertise the availability of the assets for sale, assignment, license or other disposition; and -- develop and execute a sales and marketing program designed to elicit proposals to acquire the assets from qualified acquirers with a view toward completing one or more sales, assignments. licenses or other dispositions of the assets as of Sept. 6, 2012. Hilco Streambank will be retained and paid a commission based on a percentage of aggregate gross proceeds. If the aggregate gross procees are less than $100,000, Hilco Streambank will not earn any commission. If the aggregate gross proceeds are greater $100,000, Hilco Streambank will be paid a commission as (i) 10% of the amount of aggregate gross proceeds up to $500,000; plus (ii) 15% of the amount by which the aggregate gross proceeds exceed $500,000 up to $2,000,000; plus (iii) 20% of the amount by which the aggregate gross proceeds exceed $2,000,000. Hilco Streambank does not have an interest adverse to the Debtors, or their estates. A hearing on Aug. 28, 2012, at 11 a.m., has been set. About Ritz Camera Beltsville, Maryland-based Ritz Camera & Image LLC -- http://www.ritzcamera.com-- sells digital cameras and accessories, and electronic products. It sought Chapter 11 protection (Bankr. D. Del. Case No. 12-11868) on June 22, 2012, to close unprofitable stores. Ritz claims to be the largest camera and image chain the U.S., operating 265 camera stores in 34 states as well as an Internet business. Ritz Camera intends to shut 128 locations and cut its staff in half. Included in the closing are 10 locations in Maryland and 4 in Virginia. Affiliate Ritz Interactive Inc., owner e-commerce Web sites that include RitzCamera.com and BoatersWorld.com, also filed for bankruptcy. RCI's predecessor, Ritz Camera Centers, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10617) on Feb. 22, 2009. Ritz generated $40 million by selling all 129 Boater's World Marine Centers. A group that included the company's chief executive officer, David Ritz, formed Ritz Camera & Image to buy at least 163 of the remaining 375 camera stores. The group paid $16.25 million in cash and a $7.8 million note. Later, Ritz sold a $4 million account receivable for $1.5 million to an owner of the company that owed the debt. In the 2009 petition, Ritz disclosed total assets of $277 million and total debts of $172.1 million. Lawyers at Cole, Schotz, Meisel, Forman & Leonard, P.A., served as bankruptcy counsel. Thomas & Libowitz, P.A., served as the Debtor's special corporate counsel and conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc., served as the Debtor's chief restructuring officer. Kurtzman Carson Consultants LLC acted as claims and noticing agent. Attorneys at Cooley Godward Kronish LLP and Bifferato LLC represented the official committee of unsecured creditors as counsel. In April 2010, the Court approved a liquidating Chapter 11 plan proposed by the company and the official creditor's committee. Under the Plan, unsecured creditors were to recover 4% to 14% of their claims. In the 2012 petition, RCI estimated total assets and liabilities of $50 million to $100 million. The Debtors owe not less than $16.32 million for term and revolving loans provided by secured lenders led by Crystal Finance LLC, as administrative agent. Attorneys at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims agent. WeinsweigAdvisors LLC's Marc Weinsweig has been appointed as Ritz's CRO. Mark L. Desgrosseilliers, Esq., and Ericka F. Johnson, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC. Crystal Finance, the DIP lender, is represented by Morgan, Lewis & Bockius and Young Conaway Stargatt & Taylor LLP. Roberta A. Deangelis, U.S. Trustee for Region 3, appointed seven creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee tapped Cooley LLP as its lead counsel, Richards, Layton & Finger, P.A. as its Delaware counsel, and PricewaterhouseCoopers LLP as its financial advisor. SAAB CARS: Creditors Committee Taps MBAF CPAs as Financial Advisor ------------------------------------------------------------------ The Statutory Committee of Unsecured Creditors in the Chapter 11 case of Saab Cars North America, Inc., asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain MBAF CPAs LLC as financial advisor, nunc pro tunc Aug. 1, 2012. The Committee relates that it is negotiating with the Debtors the parameters of a consensual plan of liquidation. Under the Plan, all potential cause of actions would be transferred to a post- confirmation trust for the benefit of creditors. Recently, certain Bankruptcy Courts in the District, including this Court, have narrowed the subject matter jurisdiction of the Bankruptcy Court, post-confirmation, when the potential claim is not specifically identified in the Plan. For this reason, the Committee believes it is appropriate, prior to the transfer of the Debtor's assets to the trust, to identify potential causes of action and claims in a Plan. MBAF will, among other things, assist the Committee in the tasks associated with negotiating and implementing a plan of reorganization and evaluate financial claims involving parties-in- interest. The hourly rates of MBAF's personnel are: Directors/Partners $350 - $575 Managers/Senior Managers $185 - $335 Administrative Staff $135 - $175 To the best of he Committee's knowledge, MBAF is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Saab Cars N.A. More than 40 U.S.-based Saab dealerships have signed an involuntary chapter 11 bankruptcy petition for Saab Cars North America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30, 2012. The petitioners, represented by Wilk Auslander LLP, assert claims totaling $1.2 million on account of "unpaid warranty and incentive reimbursement and related obligations" and/or "parts and warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia Gentile & Associates, in New York, signed the Chapter 11 petition on behalf of the dealers. Donlin, Recano & Company, Inc. (DRC), has been retained to provide claims and noticing agent services to Saab Cars North America, Inc. in its Chapter 11 case. The dealers want the vehicle inventory and the parts business to be sold, free of liens from Ally Financial Inc. and Caterpillar Inc., and "to have an appropriate forum to address the claims of the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg News. Saab Cars N.A. is the U.S. sales and distribution unit of Swedish car maker Saab Automobile AB. Saab Cars N.A. named in December an outside administrator, McTevia & Associates, to run the company as part of a plan to avoid immediate liquidation following its parent company's bankruptcy filing. Saab Automobile AB is a Swedish car manufacturer owned by Dutch automobile manufacturer Swedish Automobile NV, formerly Spyker Cars NV. Saab Automobile AB, Saab Automobile Tools AB and Saab Powertain AB filed for bankruptcy on Dec. 19, 2011, after running out of cash. On Feb. 24, 2012, the Court, inconsideration of the petition filed on Jan. 30, 2012, granted Saab Cars North America, Inc., relief under Chapter 11 of the Bankruptcy Code. On March 9, 2012, the U.S. Trustee formed an official Committee of Unsecured Creditors and appointed these members: Peter Mueller Inc., IFS Vehicle Distributors, Countryside Volkwagen, Saab of North Olmstead, Saab of Bedford, Whitcomb Motors Inc., and Delaware Motor Sales, Inc. The Committee tapped Wilk Auslander LLP as general bankruptcy counsel, and Polsinelli Shughart as its Delaware counsel. SAN BERNARDINO, CA: Pivotal Hearing May Come at Year End -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that whether San Bernardino, California, is eligible for municipal bankruptcy may not be decided until late this year, if then, under a schedule laid down at an Aug. 17 hearing in U.S. Bankruptcy Court in Riverside, California. According to the report, the firefighter's union and other creditors wanted a more deliberate schedule leading to a hearing where the bankruptcy court is required to determine whether the city has satisfied conditions under state and federal law to qualify for municipal debt adjustment under Chapter 9 of the federal Bankruptcy Code. The report relates that U.S. Bankruptcy Judge Meredith A. Jury instructed the city to file papers by Aug. 31 explaining why San Bernardino qualifies for Chapter 9. Opponents' papers are due Oct. 24 in advance of a status conference on Nov. 5. There will also be a Sept. 21 hearing to resolve disputes if creditors contend the city failed to turn over relevant documents and information. The report notes that holding a status conference in November implies that a final hearing on Chapter 9 eligibility may not begin until Dec. It's possible the city and creditors may call multiple witnesses, requiring the judge to hold several days of hearings before all the evidence is taken. About San Bernardino San Bernardino, California, filed an emergency petition for municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 12-28006) on Aug. 1, 2012. San Bernardino, a city of about 210,000 residents roughly 65 miles (104 km) east of Los Angeles, estimated assets and debts of more than $1 billion in the bare-bones bankruptcy petition. The city council voted on July 10, 2012, to file for bankruptcy. The move lets San Bernardino bypass state-required mediation with creditors and proceed directly to U.S. Bankruptcy Court. The city is represented that Paul R. Glassman, Esq., at Stradling Yocca Carlson & Rauth. San Bernardino joins two other California cities in bankruptcy: Stockton, an agricultural center of 292,000 east of San Francisco, and Mammoth Lakes, a mountain resort town of 8,200 south of Yosemite National Park. SANDY CREEK: S&P Cuts Rating on $735-Mil. Secured Facility to 'B+' ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on Sandy Creek Energy Associates L.P.'s (SCEA) $735 million first-lien senior secured facility to 'B+' from 'BB-'. "We left the recovery rating at '3', indicating our expectation of a meaningful (50% to 70%) recovery if a default occurs. The outlook is negative," S&P said. Sandy Creek Energy Associates L.P. represents 575 MW (64%) of the 900 megawatt (MW) Sandy Creek coal plant currently under construction in Riesel, Texas. The expected commercial operation date is Spring 2013. Of the 575 MW, 251 MW (44%) is under 30-year power purchase agreements (PPA) with credit-worthy Texas wholesale power providers Brazos Electric Power Cooperative Inc. (Brazos: A-/Positive) (150 MW or 26%)and the Lower Colorado River Authority (LCRA: A/Stable)(100 MW or 17%). The remaining 324 MW (56%) is hedged only under short-term agreements. "The negative outlook on the ratings reflects uncertainty regarding the length of the construction delay and the amount of insurance proceeds and other liquidity that could be needed until operations begin," said Standard & Poor's credit analyst Matthew Hobby. "The outlook also reflects long-term concerns about the possibility of low power prices in the ERCOT market, which increases refinancing risk when the project's term loan matures in August 2015. In addition, the size of the termination payment that the project will pay on its forward starting swaps in 2015 is uncertain. We assume that the termination payment will be funded with debt, increasing refinancing risk. We could lower ratings if construction issues persist or if additional costs of complying with environmental rules appear likely. We would likely return the outlook to stable following successful commercial operations. A rating upgrade is not contemplated prior to commercial operation." SANTA YSABEL: Files List of 20 Largest Unsecured Creditors ---------------------------------------------------------- Santa Ysabel Resort and Casino filed with the U.S. Bankruptcy Court for the Southern District of California a list of its 20 largest unsecured creditors, disclosing: Creditor Nature of Claim Amount -------- --------------- ------ YAVAPAI-APACHE NATION All Personal Property $40,514,558 P.O. Box 1188 Camp Verde, AZ 86322 ICT Gaming Machines $9,485,696 Attn: Legal Department 9295 Prototype Drive Reno, NV 89521 San Diego County Bank Account $3,030,284 Office of County Counsel 1600 Pacific Highway, Rm 355 San Diego, CA 92101 IGT Participation and $767,900 Attn: Legal Department Wide Area 9295 Prototype Drive Reno, NV 89521 State of California Gaming Fees $146,851 Aristocrat Software Service $102,603 Contract CBS Outdoor Billboard Signage $101,745 Global Power Group, Inc. Generator $44,360 Konami Gaming Inc. Gaming Machines $93,277 Joseph M. Caballero Graphic Design $26,250 Cox Media Television and $20,920 Advertising U.S. Foods Food Supplies $13,333 John Farkash Space Lease $8,910 Cintas Corporation Uniforms, Rugs $47,181 Laundry Sysco San Diego, Inc. $4,852 Midwest Television, Inc. Radio Advertising $3,962 Heritage Operating, L.P. Propane $3,668 Global Cash Access, Inc. Credit Card Cashing $3,607 Service Internal Revenue Service 1099 Forms Penalty $2,650 Bally Technologies, Inc. $2,250 About Santa Ysabel Resort and Casino Santa Ysabel Resort & Casino -- http://www.santaysabelcasino.com/ -- operates a casino located off of Highway 79 in North San Diego County overlooking Lake Henshaw on tribal Indian reservation land in Santa Ysabel, California. The Casino is housed in a one-story, 37,000 square-foot building with 349 class III slot machines, four poker tables, six table games, and a restaurant and bar with 200- person seating capacity. The Casino employs roughly 120 people and is the largest employer in Santa Ysabel. The Casino is owned by the Iipay Nation of Santa Ysabel, formerly known as the Santa Ysabel Band of Mission (Diegueno) Indians, a federally recognized Indian tribe. The Casino is operated pursuant to the Indian Gaming Regulatory Act under title 25 of the United States Code. The Casino was funded with a primary loan from JP Morgan in the amount of roughly $26,000,000 and a secondary loan from the Yavapai Apache Nation in the amount of $7,000,000. In 2009 the YAN purchased the JP Morgan Debt. The Casino also has $1.3 million in unsecured trade debt. The Iipay Nation of Santa Ysabel, a federally recognized Indian Tribe, filed a resolution authorizing the Chapter 11 bankruptcy filing of Santa Ysabel Resort and Casino (Bankr. S.D. Calif. Case No. 12-09415) in San Diego on July 2, 2012. Judge Hon. Peter W. Bowie presides over the case. Ron Bender, Esq., at Levene, Neale, Bender, Yoo & Brill LLP, in Los Angeles, serves as counsel. Virgil Perez, the Santa Ysabel tribal chairman, signed the Chapter 11 petition. The Debtor disclosed $1,480,615 in assets and $54,826,695 in liabilities as of the Chapter 11 filing. SAUK TRAIL: Case Summary & 2 Unsecured Creditors ------------------------------------------------ Debtor: Sauk Trail Commons, LLC 22580 Telegraph Road Southfield, MI 48033 Bankruptcy Case No.: 12-59012 Chapter 11 Petition Date: August 17, 2012 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Phillip J. Shefferly Debtor's Counsel: Robert N. Bassel, Esq. P.O. Box T Clinton, MI 49236 Tel: (248) 677-1234 Fax: (248) 369-4749 E-mail: bbassel@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Nadim Hakim, principal. Debtor's List of two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wells Fargo Bank for portion likely $8,000,000 Salamon Brothers secured Mortgage.. c/o Anissa Hudy 12900 Hall Rd Ste 440 Sterling Heights, MI 48313 Washtenaw County tax claims $510,000 Treasurer 200 N Main St # 200 Ann Arbor, MI 48104 Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Investico 12-40376 01/08/12 SEARS HOLDINGS: William Harker Named SHO Board Chairman ------------------------------------------------------- William R. Harker was appointed Chairman of the Board of Directors of Sears Hometown and Outlet Stores, Inc. He will continue to serve as Chairman of the Board of Directors of SHO following the completion of the separation of SHO from Sears Holdings Corporation, which is expected to occur in third quarter 2012. Also, Mr. Harker resigned as Senior Vice President of Holdings, effective Aug. 15, 2012, but will serve as a consultant to Holdings. In addition, he is expected to continue to serve as a member of the Board of Directors of Sears Canada Inc. About Sears Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- is the nation's fourth largest broadline retailer with more than 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a 94% stake in Sears Canada and an 80.1% stake in Orchard Supply Hardware. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. Kmart completed its merger with Sears on March 24, 2005. The Company's balance sheet at April 28, 2012, showed $21.60 billion in total assets, $17.02 billion in total liabilities and $4.57 billion in total equity. Negative Outlook Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Ill.-based Sears Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with negative implications on Dec. 28, 2011. We are also lowering the short-term and commercial paper rating to 'C' from 'B-2'. The rating outlook is negative," S&P said. "The corporate credit rating reflects our projection that Sears' EBITDA will be negative in 2012, given our expectations for continued sales and margin pressure," said Standard & Poor's credit analyst Ana Lai. She added, "We further expect that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses." Moody's Investors Service in January 2012 lowered Sears Holdings Family and Probability of Default Ratings to B3 from B1. The outlook remains negative. At the same time Moody's affirmed Sears' Speculative Grade Liquidity Rating at SGL-2. The rating action reflects Moody's expectations that Sears will report a significant operating loss in fiscal 2011. Moody's added that the rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers. SIMCO SALES: Case Summary & 13 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Simco Sales, Inc. dba McClintock Shell fdba McClintock Union 76 8805 S. McClintock Dr. Tempe, AZ 85284 Bankruptcy Case No.: 12-18638 Chapter 11 Petition Date: August 20, 2012 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Allan D. Newdelman, Esq. ALLAN D NEWDELMAN PC 80 E. Columbus Ave. Phoenix, AZ 85012 Tel: (602) 264-4550 Fax: (602) 277-0144 E-mail: anewdelman@qwestoffice.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 13 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/azb12-18638.pdf The petition was signed by Michael Simpson, president. SKINNY NUTRITIONAL: Trim Provides Advance Loan of $270,000 ---------------------------------------------------------- Skinny Nutritional Corp. and Trim Capital LLC entered into an amendment to the Securities Purchase Agreement dated June 28, 2012, in order to accommodate the willingness of Trim Capital to make an interim loan of $270,000 to the Company in advance of the Second Closing. The closing of the Interim Loan occurred on Aug. 14, 2012, and on that date the Company received proceeds of $270,000 and issued the Purchaser a 15% Convertible Senior Secured Promissory Note in substantially the same form as the Initial Note sold under the Purchase Agreement. Pursuant to the Amendment, the Interim Note is deemed part of the "Initial Note' under the Purchase Agreement, serves to reduce the proceeds anticipated to be received at the Second Closing to $2,730,000 and is secured under the Security Agreement and IP Security Agreement. Additionally, the Company and Purchaser amended the Purchase Agreement to modify the matters for which the Company will seek stockholder approval to provide that the Company will seek stockholder approval of the following matters: (i) amendments to the Company's Restated Articles of Incorporation to (A) authorize a sufficient number of shares of Common Stock for issuance in the Trim Financing and, upon conversion of the Junior Preferred, for issuance pursuant to a new equity compensation plan and for other corporate purposes, and (B) authorize additional preferred stock of the Company and clarify and expand the authority of the Board to issue blank check preferred stock of the Company; (ii) the election of a Board; (iii) a new equity compensation plan; and (iv) the Trim Financing. A copy of the Amended SPA is available for free at: http://is.gd/rJoSeR About Skinny Nutritional Bala Cynwyd, Pa.-based Skinny Nutritional Corp. (OTC BB: SKNY.OB) -- http://www.SkinnyWater.com/-- has developed and is marketing a line of enhanced waters, all branded with the name "Skinny Water" that are marketed and distributed primarily to calorie and weight conscious consumers. The Company reported a net loss of $7.66 million in 2011, compared with a net loss of $6.91 million in 2010. The Company's balance sheet at March 31, 2012, showed $2.15 million in total assets, $4.62 million in total liabilities, all current, and a $2.47 million stockholders' deficit. In its audit report for the 2011 financial statements, Marcum LLP, in Bala Cynwyd, Pennsylvania, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company had a working capital deficiency of $3.17 million, an accumulated deficit of $45,492,945, stockholders' deficit of $1.74 million and no cash on hand. The Company had net losses of $7.67 million and $6.91 million for the years ended Dec. 31, 2011, and 2010, respectively. Additionally, the Company is currently in arrears under its obligation for the purchase of trademarks. Under the agreement, the seller of the trademarks may choose to exercise their legal rights against the Company's assets, which includes the trademarks. SPECIALTY PRODUCTS: Panel Can Hire Firms to Handle Medical Science ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized the Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases of Specialty Products Holding Corp., et al., to retain Motley Rice, LLC, Waters & Kraus LLP, and Simon Greenstone Panatier Bartlett, PC as special litigation counsels for any medical science issues that arise in connection with an estimation hearing in the proceedings. As reported in the Troubled Company Reporter on July 2, 2012, as special counsel, Motley Rice, et al., will, among other things, respond to and rebut the technical and scientific aspects of the Debtors' approach to estimation, as their contentions regarding the amount of asbestos released by their products, the differences among asbestos fiber types with respect to the propensity to cause mesothelioma, the type and extent of fiber exposures needed to cause mesothelioma. To date, Motley Rice has been paid the sum of $3,078 for reimbursement of expenses for round trip travel expenses incurred. Motly Rice has also been retained by the Committee as special conflicts counsel but has not been paid any sums to date for that representation. To date, Waters & Kraus has been paid the sum of $792 in June 2011 for reimbursement for expenses incurred as a consultant on estimation issues. Simon Green has not been paid any consulting fees. The Court ordered that: -- the special counsel firms will coordinate to the extent possible to ensure that there is no duplication in the services provided, including without limitation that only one lawyer from the special counsel firms will appear at any particular deposition. -- the aggregate to be budgeted for fees to be incurred by the special counsel firms will be the same as the aggregate amount budgeted for Debtors' special counsel, Evert Weathersby & Houff, related to estimation for the period July 15, 2012, through Jan. 31, 2013. As of May 31, 2012, the budget presented to the Court for fees attributable to the services to be rendered by Evert Weathersby & Houff related to estimation from July 15, 2012, through Jan. 31, 2013, was $1,330,000 in the aggregate. To the best of the Committee's knowledge, Motley Rice is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Specialty Products Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM, Inc., is a wholly owned subsidiary of RPM International Inc. The Company is the holding company parent of Bondex International, Inc., and the direct or indirect parent of certain additional domestic and foreign subsidiaries. The Company claims to be a leading manufacturer, distributor and seller of various specialty chemical product lines, including exterior insulating finishing systems, powder coatings, fluorescent colorants and pigments, cleaning and protection products, fuel additives, wood treatments and coatings and sealants, in both the industrial and consumer markets. The Company filed for Chapter 11 bankruptcy protection on May 31, 2010 (Bankr. D. Del. Case No. 10-11780). Gregory M. Gordon, Esq., Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve as bankruptcy counsel. Daniel J. DeFranceschi, Esq., and Zachary I. Shapiro, Esq., at Richards Layton & Finger, serve as co-counsel. Logan and Company is the Company's claims and notice agent. The Company estimated its assets and debts at $100,000,001 to $500,000,000. The Company's affiliate, Bondex International, Inc., filed a separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779), estimating its assets and debts at $100,000,001 to $500,000,000. STEREOTAXIS INC: Files Form S-1, Registers 2MM Common Shares ------------------------------------------------------------ Stereotaxis, Inc., filed with the U.S. Securities and Exchange Commission a Form S-1 relating to the offer and sale, from time to time, of up to 2,035,531 shares of the common stock, par value $0.001 per share, of Stereotaxis, Inc., issuable to Alafi Capital Company LLC, Sanderling Venture Partners VI Co-Investment Fund, L.P., Sanderling Ventures Management VI, et al., upon the exercise of warrants to purchase the Company's common stock held by those selling stockholders. The Company will not receive any proceeds from the sale of the shares, but, assuming exercise of all warrants to which the shares relate, the Company will receive up to $12,674,159 in proceeds from the exercise of the warrants prior to those sales, which proceeds would be used for general corporate purposes. The Company's common stock is listed on the Nasdaq Global Market under the symbol "STXS.' On Aug. 16, 2012, the last reported sale price for the Company's common stock on the Nasdaq Global Market was $1.76 per share. A copy of the prospectus is available for free at: http://is.gd/4mZQsv About Stereotaxis Based in St. Louis, Mo., Stereotaxis, Inc., designs, manufactures and markets the Epoch Solution, which is an advanced remote robotic navigation system for use in a hospital's interventional surgical suite, or "interventional lab", that the Company believes revolutionizes the treatment of arrhythmias and coronary artery disease by enabling enhanced safety, efficiency and efficacy for catheter-based, or interventional, procedures. For the year ended Dec. 31, 2011, Ernst & Young LLP, in St. Louis, Missouri, expressed substantial doubt about Stereotaxis' ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. The Company reported a net loss of $32.0 million for 2011, compared with a net loss of $19.9 million for 2010. The Company's balance sheet at June 30, 2012, showed $36.61 million in total assets, $50.09 million in total liabilities and a $13.47 million total stockholders' deficit. STOCKTON, CA: Calpers Justifies Not Taking Concessions ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the California Public Employees' Retirement System started a public relations counteroffensive against creditors of Stockton, California, who contends the city, should be ejected from municipal bankruptcy for not seeking concessions from Calpers, the largest creditor with a claim of $147.5 million. About Stockton, Calif. The City of Stockton, California, filed a Chapter 9 petition (Bankr. E.D. Calif. Case No. 12-32118) in Sacramento on June 28, 2012, becoming the largest city to seek creditor protection in U.S. history. The city was forced to file for bankruptcy after talks with bondholders and labor unions failed. Stockton estimated more than $1 billion in assets and in excess of $500 million in liabilities. The city, with a population of about 300,000, identified the California Public Employees Retirement System as the largest unsecured creditor with a claim of $147.5 million for unfunded pension costs. In second place is Wells Fargo Bank NA as trustee for $124.3 million in pension obligation bonds. The list of largest creditors includes $119.2 million owing on four other series of bonds. The city is being represented by Marc A. Levinson, Esq., at Orrick, Herrington & Sutcliffe LLP. The petition was signed by Robert Deis, city manager. Mr. Levinson also represented the city of Vallejo, Calif. in its 2008 bankruptcy. Vallejo filed for protection under Chapter 9 (Bankr. E.D. Calif. Case No. 08-26813) on May 23, 2008, estimating $500 million to $1 billion in assets and $100 million to $500 million in debts in its petition. In August 2011, Vallejo was given green light to exit the municipal reorganization. The Vallejo Chapter 9 plan restructures $50 million of publicly held debt secured by leases on public buildings. Although the Plan doesn't affect pensions, it adjusts the claims and benefits of current and former city employees. Bankruptcy Judge Michael McManus released Vallejo from bankruptcy on Nov. 1, 2011. STRATUS MEDIA: Incurs $3.4 Million Net Loss in Second Quarter ------------------------------------------------------------- Stratus Media Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $3.37 million on $71,666 of revenue for the three months ended June 30, 2012, compared with a net loss of $2.14 million on $0 of revenue for the same period during the prior year. The Company reported a net loss of $5.85 million on $231,208 of revenue for the six months ended June 30, 2012, compared with a net loss of $3.85 million on $0 of revenue for the same period a year ago. The Company's balance sheet at June 30, 2012, showed $3.71 million in total assets, $8.77 million in total liabilities, all current, and a $5.06 million total shareholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/vK4AqV About Stratus Media Santa Barbara, Calif.-based Stratus Media Group, Inc., is an owner, operator and marketer of live sports and entertainment events. Subject to the availability of capital, the Company intends to aggregate a large number of complementary live sports and entertainment events across North America and internationally. The Company reported a net loss of $15.83 million in 2011, compared with a net loss of $8.41 million in 2010. Goldman Kurland and Mohidin LLP, in Encino, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2011, citing recurring losses and negative cash flow from operations which raised substantial doubt as to the ability of the Company to continue as a going concern. SUPERMEDIA INC: To Combine With Dex Media in Merger of Equals ------------------------------------------------------------- Dex One Corporation and SuperMedia Inc. on Aug. 21 said their Boards of Directors have approved a definitive agreement under which Dex One and SuperMedia will combine in a stock-for-stock merger of equals, creating a national provider of social, local and mobile marketing solutions through direct relationships with local businesses. The combined company will be called Dex Media. According to Bloomberg's BusinessWeek, based on the closing stock prices of Dex One and SuperMedia on Monday, the new company would be worth $100 million. But shares of both existing companies jumped in heavy Tuesday morning trading, putting the total value of the new company at about $115 million. Bloomberg says shares of Dex One added 48 cents, or 39%, to $1.81, while SuperMedia shares gained $1.27, or 49%, to $3.85. Upon closing of the transaction, Dex One shareholders are expected to own roughly 60% and SuperMedia shareholders are expected to own roughly 40% of the combined company. The combined company will have over 5,800 employees, including more than 3,100 consultants who establish direct relationships with local business owners and offer a full suite of marketing solutions to help them retain and add customers. Initially, the combined company will have relationships with more than 700,000 businesses. According to the Companies' press statement, the business will benefit from improved operating scale, significant synergies and enhanced cash flow. On a pro-forma basis, for the full year 2011, the combined company would have reported $3.1 billion in revenue, $778 million in non-GAAP operating income (adjusted to exclude impairment charges of $1.8 billion) and $1.2 billion in non-GAAP adjusted EBITDA. Pro-forma cash from operations for the full year 2011 would have been $657 million, and non-GAAP free cash flow would have been $610 million. For the first half of 2012, the combined company would have reported pro-forma revenue of approximately $1.4 billion, $290 million in operating income and $586 million in non-GAAP adjusted EBITDA. First half 2012 pro- forma cash flow from operations for the combined company would have been $340 million and non-GAAP free cash flow for the period would have been $322 million. "We believe this merger is in the best interests of shareholders, lenders, customers, employees and consumers," said Alan Schultz, chairman of the board of directors of Dex One. "Dex One and SuperMedia are closely aligned with a solid value proposition for local businesses, and we expect the transaction to generate significant operational and financial synergies, which will create additional investor value." "Over the time we have spent together understanding each other's company and exploring the market opportunities, we have become more and more enthusiastic about the potential of Dex One and SuperMedia combined to more effectively help businesses grow using the full range of local media," added Douglas Wheat, chairman of the board of directors of SuperMedia. "We look forward to working together to help the new company realize that potential." "For the past two years, Dex One and SuperMedia have been on the same path of transformation, fully embracing digital media to help businesses grow through a complete suite of marketing solutions provided by our local consultants," said Peter McDonald, president and CEO of SuperMedia. "Our common goal over many decades has been to drive results for local advertisers. By joining together, we will have nationwide presence to increase market share and achieve operating and service efficiencies. Having spent time in my career at Dex One and SuperMedia, I know that the great attitudes, best thinking and best practices of the talented individuals at both companies will combine to enhance the value we deliver to our clients and investors." "The two companies fit well together. The combined scale and scope of the new company creates a powerful platform to penetrate more of the market and further improve our competitive position," said Alfred Mockett, CEO of Dex One. "This combination will accelerate the pace of the transformation each of us was pursuing independently, improve our financial condition and generate benefits for all constituencies." The combined company estimates it will realize $150 million to $175 million of annual run rate cost synergies by 2015 due to scale efficiencies; rationalization of duplicative solutions, products and vendor relationships; headcount reductions; and adoption of the most cost effective management and operating practices and technology platforms and systems from Dex One and SuperMedia. The combined company expects to incur $100 million to $120 million of one-time transition expenses to achieve these synergies. The combined company also will benefit from the application across a larger territory of the best of each company's social, local and mobile marketing solutions, combined with the advice of its marketing consultants, to create and maintain local business relationships. The combined company expects to preserve access to Dex One's remaining tax attributes and generate future attributes, in aggregate totaling as much as $1.8 billion, to offset income attributable to the combined company following the completion of the transaction. Under the terms of the definitive merger agreement, Alan Schultz, chairman of the board of directors of Dex One, will be chairman of the board of directors of the combined company. The president and CEO of SuperMedia, Peter McDonald, will become CEO. Alfred Mockett, Dex One's CEO, will continue to lead Dex One through the close of the transaction, at which point he will step down. Following the close of the transaction, the combined company's board of directors will include Schultz, McDonald, four additional members from the Dex One board, four additional members from the SuperMedia board and one independent director to be selected by the new board. The CFO of SuperMedia, Samuel (Dee) Jones, will become the CFO of the combined company. Under the terms of the agreement, Dex One and SuperMedia shareholders will exchange their shares for shares in Dex Media. Dex One shareholders will receive 0.20 shares for each Dex One share they own, and Super Media shareholders will receive 0.4386 shares for each SuperMedia share they own. Houlihan Lokey is acting as financial advisor to Dex One, and Kirkland & Ellis LLP is acting as its legal counsel. Morgan Stanley & Co. LLC and Chilmark Partners are acting as financial advisors to SuperMedia, and Fulbright & Jaworski L.L.P and Cleary Gottlieb Steen & Hamilton LLP are acting as its legal counsel. About SuperMedia Inc. Dallas, 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. 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 March 31, 2009. 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 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 by the Troubled Company Reporter on Dec. 27, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on SuperMedia 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 to Caa3 from Caa1 based on Moody's view that a debt restructuring is likely. Moody's expects ultimate recoveries will be about 50%. SUNPEAKS VENTURES: Had $474,100 Net Loss in Second Quarter ---------------------------------------------------------- Sunpeaks Ventures, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $474,109 on $987,356 of revenues for the three months ended June 30, 2012, compared with a net loss of $111,901 on $48,000 of revenues for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $817,403 on $1.5 million of revenues, compared with a net loss of $139,191 on $71,599 of revenues for the same period in 2011. The Company's balance sheet at June 30, 2012, showed $1.3 million in total assets, $2.4 million in total liabilities, and a stockholders' deficit of $1.1 million. According to the regulatory filing, the Company has a history of incurring net losses and at June 30, 2012, has an accumulated net loss totaling $1.2 million. At June 30, 2012, the Company held cash of $8,545. "These conditions give rise to substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/bQWfz3 Silver Spring, Maryland-based Sunpeaks Ventures, Inc., operates through one operating segment which distributes hard-to-find and specialty drugs to the healthcare provider market throughout the United States, while functioning as an aggregator of real-time market demand for these products. The Company also owns and sells a specialized over-the-counter multivitamin product called Clotamin. Clotamin is specifically designed for use by patients on Warfarin, a blood thinner that has a known interaction with the vitamin K present in standard over-the-counter multivitamins. SUNRISE REAL ESTATE: To Amend 2011 Report for Accounting Errors --------------------------------------------------------------- Sunrise Real Estate Group, Inc., concluded after an internal review that the previously issued consolidated financial statements for the year ended Dec. 31, 2011, contained in the Company's annual report on Form 10-K should no longer be relied upon because of an error in the Annual Report, and that those financial statements will be restated to make the necessary accounting corrections and the Company completed the summary of the revisions to the financial statements. Furthermore, the financial statements contained in the quarterly report on Form 10-Q for the quarter ended March 31, 2012, should no longer be relied upon to the extent that those financial statements contain financial results at Dec. 31, 2011. The error was a miscalculation in the Company's underwriting sales revenue and cost of sales under SFAS 66. The Company has determined that the error materially affected the accuracy of the consolidated statements and as such has agreed on restating the financial statements to adjust for the error. The Company will file an amendment to the Annual Report and Quarterly Report. On May 24, 2012, the Company's independent accountants, Kenne Ruan, CPA, P.C., advised Sunrise Real Estate that they identified an error on the consolidated financial statements for the year ended Dec. 31, 2011. About Sunrise Real Estate Headquartered in Shanghai, the People's Republic of China, Sunrise Real Estate Group, Inc. was initially incorporated in Texas on Oct. 10, 1996, under the name of Parallax Entertainment, Inc. On Dec. 12, 2003, Parallax changed its name to Sunrise Real Estate Development Group, Inc. On April 25, 2006, Sunrise Estate Development Group, Inc. filed Articles of Amendment with the Texas Secretary of State, changing the name of Sunrise Real Estate Development Group, Inc. to Sunrise Real Estate Group, Inc., effective from May 23, 2006. The Company and its subsidiaries are engaged in the property brokerage services, real estate marketing services, property leasing services and property management services in China. In its report accompanying the 2011 financial statements, Kenne Ruan, CPA, P.C., in Woodbridge. CT, USA, noted that the Company has significant accumulated losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at March 31, 2012, showed US$33.19 million in total assets, US$25.87 million in total liabilities and US$7.32 million in total shareholders' deficit. SWISHER HYGIENE: Gets NASDAQ Non-Compliance Notice -------------------------------------------------- Swisher Hygiene Inc., a leading provider of essential hygiene and sanitation products and services, disclosed that on Aug. 15, 2012 it received a letter from NASDAQ indicating that it is not in compliance with the filing requirements for continued listing under NASDAQ Listing Rule 5250(c)(1) since its Form 10-Q for the quarter ended June 30, 2012 will not be timely filed as a result of the company's continuing work on matters resulting from the previously disclosed audit committee investigation and procedures performed by the company's external auditors. Swisher Hygiene notes of the following information relating to the delayed filing: -- NASDAQ -- As previously reported, Swisher Hygiene Received non-compliance letters from NASDAQ on April 11, 2012 and May 15, 2012 in connection with its not timely filing its Form 10-K for the year ended Dec. 31, 2011 (the "Form 10-K") and Form 10-Q for the quarter ended March 31, 2012 respectively. Pursuant to the August 15, 2012 letter from NASDAQ, Swisher Hygiene has until September 26, 2012 to file all delinquent filings, including the June 30, 2012 Form 10-Q, and is required to submit an update to its original plan to regain compliance with NASDAQ's filing requirements for continued listing by August 30, 2012. Swisher Hygiene intends to submit an update to its original plan by August 30, 2012. During the process of regaining compliance with NASDAQ, Swisher Hygiene expects that its common stock will continue trading on NASDAQ under the symbol "SWSH." -- Canadian Securities Law Compliance/Toronto Stock Exchange -- Swisher Hygiene has been noted in default of the continuous disclosure requirements by the securities regulators in several provinces of Canada for certain failures stemming from the non- compliance described above, including the failure to timely file its annual financial statements for the year ended December 31, 2011 and related information, and for publicly acknowledging that certain of its previously filed financial statements may no longer be relied upon. In connection with these defaults, Swisher Hygiene previously applied to the Ontario Securities Commission (the "OSC"), as its principal Canadian securities regulator, for a temporary order prohibiting its directors and officers from trading in the securities of Swisher Hygiene for as long as these defaults remain outstanding. If a management cease trade order is granted, it is not expected to affect the ability of persons who are not directors or officers of Swisher Hygiene to trade in the securities of Swisher Hygiene. In the absence of a management cease trade order, and in the event that the continuous disclosure defaults have not been remedied, the Canadian securities regulators may issue a general cease trade order against Swisher Hygiene. The shares of Swisher Hygiene's common stock trade on the TSX under the symbol "SWI." SYMS CORP: Ch. 11 Plan Harms Creditor Setoff Rights, IRS Says ------------------------------------------------------------- Brian Mahoney at Bankruptcy Law360 reports that the Internal Revenue Service said Friday that a Delaware bankruptcy judge should reject the Chapter 11 reorganization plan of Syms Corp. and its subsidiaries because the plan would bar creditors from asserting post-confirmation setoff rights. Under the proposed plan, creditors will waive their setoff rights if they don't assert a setoff claim on or before the confirmation date, the IRS, as cited by Bankruptcy Law360, said in its objection. But that stipulation doesn't protect creditors from setoff claims that may come to light in the post-confirmation stage and runs. About Filene's Basement & Syms Corp. Massachusetts-based Filene's Basement, also called The Basement, is the oldest off-price retailer in the United States. The Basement focuses on high-end goods and is known for its distinctive, low-technology automatic markdown system. Filene's Basement first filed for Chapter 11 bankruptcy protection in August 1999. Filene's Basement was bought by a predecessor of Retail Ventures, Inc., the following year. Retail Ventures in April 2009 transferred the unit to Buxbaum. Filene's Basement, Inc. and its affiliates filed for Chapter 22 (Bankr. D. Del. Case No. 09-11525) on May 4, 2009, represented by lawyers at Pachulski Stang Ziehl & Jones LLP. Epiq Bankruptcy Solutions serves as claims and notice agent. The Debtors disclosed assets of $236 million, including real estate of $97.7 million, and liabilities of $94 million, including $31.1 million owing on a revolving credit with Bank of America NA as agent. In addition, there were $11.1 million in letters of credit outstanding on the revolver. The 2009 Debtor was formally renamed FB Liquidating Estate, following the sale of all of its assets to Syms Corp. in June 2009. Pursuant to the Liquidating Plan confirmed in January 2010, secured creditors in the Chapter 11 case have been paid in full, and holders of priority, administrative and convenience class claims have received 100% of their allowed claims. As reported by the Troubled Company Reporter on Dec. 20, 2010, Alan Cohen, Chairman of Abacus Advisors LLC and Chief Restructuring Officer for FB Liquidating Estate disclosed that a second distribution of dividend checks to Filene's unsecured creditors amounting to 12.5% of approved claims has been made, bringing the cumulative distributions on unsecured claims to 62.5%. On Nov. 2, 2011, Syms Corp. placed itself, Filene's Basement and two other units in Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-13511 to 11-13514) after a failed bid to sell the business. The two units are Syms Clothing Inc. and Syms Advertising Inc. Judge Kevin J. Carey presides over the case. Lawyers at Skadden Arps Slate Meagher & Flom LLP serve as the Debtors' counsel. The Debtors tapped Rothschild Inc. as investment banker and Cushman and Wakefield Securities, Inc., as real estate financial advisors. Syms shuttered its namesake and Filene's Basement outlets upon the bankruptcy filing and tapped a joint venture of Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC to run the going-out-of-business sales. The sale may continue until Jan. 31, 2012. Filene's Basement estimated $1 million to $10 million in assets and $50 million to $100 million in debts. The petitions were signed by Gary Binkoski, authorized representative of Filene's Basement. The official committee of unsecured creditors appointed in the 2011 case has retained Hahn & Hessen LLP as legal counsel. Holders of equity in Syms Corp. pushed for an official shareholders' committee and separation of the Syms and Filene's Basement bankruptcy estates. Gordon Brothers and Hilco are represented by Goulston & Storrs, P.C. and Ashby & Geddes, P.A. SYNAGRO TECHNOLOGIES: S&P Downgrades CCR to 'CCC' Over High Debt ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered all of its ratings on Houston, Texas-based Synagro Technologies Inc. by one notch, including the corporate credit rating to 'CCC' from 'CCC+'. The outlook is negative. "The downgrade of Synagro reflects the company's 'highly leveraged' financial risk profile and 'weak' liquidity," said credit analyst James Siahaan. "The company no longer has any headroom under its total leverage covenant, and required an equity contribution of $0.5 million from its financial sponsor during the second quarter in order to maintain compliance." "The negative outlook reflects our expectation that Synagro's liquidity is likely to remain weak during the next few quarters, characterized by a lack of headroom under financial covenants and limited ability to borrow under the revolving facility. We would lower the ratings in the event of a payment default or if Synagro engages in a financial restructuring in which it voluntarily restructures or repurchases its debt in such a way that results in anything less than full and timely repayment. While less likely, we could raise the ratings if earnings and cash flow strengthen markedly and rapidly, leverage declines, and liquidity improves significantly," S&P said. TALON THERAPEUTICS: Issues 60,000 Pref. Stock to Warburg, et al. ---------------------------------------------------------------- Talon Therapeutics, Inc., previously entered into an Investment Agreement with Warburg Pincus Private Equity X, L.P., and Warburg Pincus X Partners, L.P., and Deerfield Private Design Fund, L.P., Deerfield Private Design International, L.P., Deerfield Special Situations Fund, L.P., and Deerfield Special Situations Fund International Limited. On Aug. 17, 2012, pursuant to the terms of the Investment Agreement, as amended, the Company issued and sold to the Purchasers an aggregate of 60,000 shares of its Series A-3 Convertible Preferred Stock at a price per share of $100, for aggregate proceeds of $6,000,000. Following the issuance and sale of the 60,000 shares, the Purchasers have the right under the Investment Agreement, but not the obligation, to purchase up to 510,000 additional shares of Series A-3 Preferred, at a price per share of $100, at any time on or before Aug. 9, 2013, the first anniversary of the Company's receipt of marketing approval from the U.S. Food and Drug Administration for its Marqibo product candidate. About Talon Therapeutics Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc. (TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical company dedicated to developing and commercializing new, differentiated cancer therapies designed to improve and enable current standards of care. The company's lead product candidate, Marqibo, potentially treats acute lymphoblastic leukemia and lymphomas. The Company has additional pipeline opportunities some of which, like Marqibo, improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity. Effective Dec. 1, 2010, Hana Biosciences Inc. changed its name to Talon Therapeutics Inc. The name change was effected by merging Talon Therapeutics, Inc., a wholly-owned subsidiary of the Company, with and into the Company, with the Company as the surviving corporation in the merger. The Company's balance sheet at June 30, 2012, showed $18.38 million in total assets, $10.89 million in total liabilities, $22.22 million in series B convertible preferred stock, and $14.73 million in total stockholders' equity. The Company reported a net loss of $18.82 million for the year ended Dec. 31, 2011, compared with a net loss of $25.98 million during the prior year. BDO USA, LLP, in San Jose, California, issued a "going concern" qualification on the financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and net capital deficiency that raise substantial doubt about the Company's ability to continue as a going concern. TALON THERAPEUTICS: Joseph Landy Discloses 92.3% Equity Stake ------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Joseph P. Landy, Warburg Pincus X Partners, L.P., Warburg Pincus X, L.P., et al., disclosed that, as of Aug. 17, 2012, they beneficially own 263,730,894 shares of common stock of Talon Therapeutics, Inc., representing 92.3% of the shares outstanding. Mr. Landy previously reported beneficial ownership of 264,321,291 common shares or a 92.4% equity stake as of July 3, 2012. A copy of the amended filing is available for free at: http://is.gd/sU2V36 About Talon Therapeutics Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc. (TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical company dedicated to developing and commercializing new, differentiated cancer therapies designed to improve and enable current standards of care. The company's lead product candidate, Marqibo, potentially treats acute lymphoblastic leukemia and lymphomas. The Company has additional pipeline opportunities some of which, like Marqibo, improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity. Effective Dec. 1, 2010, Hana Biosciences Inc. changed its name to Talon Therapeutics Inc. The name change was effected by merging Talon Therapeutics, Inc., a wholly-owned subsidiary of the Company, with and into the Company, with the Company as the surviving corporation in the merger. The Company's balance sheet at June 30, 2012, showed $18.38 million in total assets, $10.89 million in total liabilities, $22.22 million in series B convertible preferred stock, and $14.73 million in total stockholders' equity. The Company reported a net loss of $18.82 million for the year ended Dec. 31, 2011, compared with a net loss of $25.98 million during the prior year. BDO USA, LLP, in San Jose, California, issued a "going concern" qualification on the financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and net capital deficiency that raise substantial doubt about the Company's ability to continue as a going concern. TARGETED MEDICAL: Had $2.8 Million Net Loss in Second Quarter ------------------------------------------------------------- Targeted Medical Pharma, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $2.8 million on $1.4 million of revenues for the three months ended June 30, 2012, compared with a net loss of $571,531 on $2.4 million of revenues for the same period last year. For the six months ended June 30, 2012, the Company had a net loss of $3.8 million on $2.8 million of revenues, compared to a net loss of $1.5 million on $4.4 million of revenues for the same period of 2011. The Company's balance sheet at June 30, 2012, showed $11.2 million in total assets, $12.7 million in total liabilities, and a stockholders' deficit of $1.5 million. "The loss for the six months ended June 30, 2012, was $3,800,740, which increased the accumulated deficit to $(7,899,352). As a result, the Company is dependent upon further financing, development of revenue streams with shorter collection times and accelerating collections on our physician managed and hybrid revenue business models." As reported in the TCR on July 19, 2012, EFP Rotenberg, LLP, in Rochester, New York, expressed substantial doubt about Targeted Medical'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 losses for the year ended Dec. 31, 2011, totaling $4,177,050 as well as accumulated deficit amounting to $4,098,612. "Further the Company appears to have inadequate cash and cash equivalents of $147,364 as of Dec. 31, 2011, to cover projected operating costs for the next 12 months. As a result, the Company is dependent upon further financing, development of revenue streams with shorter collection times and accelerating collections on our physician managed and hybrid revenue streams." A copy of the Form 10-Q is available for free at: http://is.gd/4teIzL Los Angeles, Calif.-based Targeted Medical Pharma, Inc., is a specialty pharmaceutical company that develops and commercializes nutrient- and pharmaceutical-based therapeutic systems. TECHNEST HOLDINGS: MaloneBailey Succeeds Wolf as Accountants ------------------------------------------------------------ AccelPath, Inc., formerly known as Technest Holdings Inc., dismissed Wolf & Company, P.C., as its independent accountant, effective as of Aug. 10, 2012. This change in independent accountant was approved by the Company's Board of Directors. The reports of Wolf on the Company's financial statements for the years ended June 30, 2011, and 2010, contained no adverse opinion or disclaimer of opinion, and those reports were not qualified or modified as to uncertainty, audit scope or accounting principles, other than the expression of doubt that the Company can continue as a going concern in its report on the financial statements for the year ended June 30, 2011. In connection with its audit of the Company's financial statements for the year ended June 30, 2011, Wolf advised the Company's Board of Directors and management, by letter dated Oct. 13, 2011, that it noted certain deficiencies involving internal control over financial reporting that it considered to be material weaknesses under standards of the Public Company Accounting Oversight Board. Specifically, Wolf advised the Company's Board of Directors and management that it considered the following two items to be material weaknesses: 1) Lack of accounting resources (including the lack of centralized accounting and lack of formally documented policies and procedures); and 2) Inadequate segregation of duties due to limited staff. On Aug. 10, 2012, the Company's Board of Directors engaged MaloneBailey, LLP, as its independent accountant to audit its financial statements for the fiscal year ending June 30, About Technest Holdings Bethesda, Md.-based Technest Holdings, Inc., has two primary businesses: AccelPath, which is in the business of enabling pathology diagnostics and Technest, which is in the business of the design, research and development, integration, sales and support of three-dimensional imaging devices and systems. Following the fiscal 2011 results, Wolf & Company, P.C., in Boston, Massachusetts, expressed substantial doubt about Technest Holdings' ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations, has negative cash flows from operations, a stockholders' deficit and a working capital deficit. The Company reported a net loss of $2.9 million on $450,000 of revenues for the fiscal year ended June 30, 2011, compared with a net loss of $325,000 on $0 revenue for the fiscal year ended June 30, 2010. The Company's balance sheet at March 31, 2012, showed $5.29 million in total assets, $6.55 million in total liabilities and a $1.25 million total stockholders' deficit. TELETOUCH COMMUNICATIONS: Sells Radio Division to DFW for $1.5MM ---------------------------------------------------------------- Teletouch Communications, Inc., and its wholly owned subsidiary, Teletouch Licenses, Inc., on the one hand, and DFW Communications, Inc., on the other hand, entered into an Asset Purchase Agreement. Under the terms of the APA, the Company agreed to sell, assign, transfer and convey to DFW substantially all of the assets of the Company associated with the two-way radio/public safety equipment business, those assets including, among other things, certain related accounts receivable; inventory; fixed assets; supplies used in connection with the business; the Company's leases, permits and titles, including certain FCC licenses held by the Company; and goodwill and going concern value of the business segment. DFW also assumed certain obligations, permits and contracts related to the Company's business. Subject to certain working capital adjustments, DFW agreed to pay, at closing, as consideration for the assets of the Company an amount in cash equal to approximately $1,469,000, $168,000 of which is allocated to certain designated suppliers' payments and $300,000 of which is allocated to real estate and goodwill. The parties to the APA further designated approximately $767,000 for working capital purposes, such amount consisting of, among other things, aged accounts receivable and inventory as of the effective date of the APA. This includes a working capital adjustment provision that provides for no more than $200,000 of post-close working capital adjustments to be charged to the Company in the event of any material accounts receivable or inventory deficits. The disposition of the Company's assets closed on Aug. 14, 2012, having been reviewed and approved by the Company's Board of Directors on Aug. 10, 2012. "The decision to divest our two-way radio division is another step in the ongoing transition of Teletouch to large scale wholesale distribution of cellular and consumer electronics products, and was made after concluding that this business unit was no longer aligned with the Company's long-term growth strategy," said Teletouch President and COO T. A. "Kip" Hyde, Jr. "The sale of these assets supports our disciplined approach to capital allocation and effective use of working capital, with the proceeds being used to pay down debt, while we focus on growing our core wholesale distribution business." Hyde continued, "Although two-way radio services and the direct sale of public safety equipment is no longer core to Teletouch, we believe this business has the potential for strong growth, which led us to seek out a buyer that is focused in these areas. Now as part of DFW Communications, this group will be led by a solid leadership team, bringing long-term value for the business, its customers and partners." A copy of the Asset Purchase Agreement is available at: http://is.gd/pAJXvf About Teletouch Teletouch Communications, Inc., offers a comprehensive suite of wireless telecommunications solutions, including cellular, two-way radio, GPS-telemetry and wireless messaging. Teletouch is an authorized provider of AT&T (NYSE: T) products and services (voice, data and entertainment) to consumers, businesses and government agencies, as well as an operator of its own two-way radio network in Texas. Recently, Teletouch entered into national agency and distribution agreements with Sprint (NYSE: S) and Clearwire (NASDAQ: CLWR), providers of advanced 4G cellular network services. Teletouch operates a chain of 26 retail and agent stores under the "Teletouch" and "Hawk Electronics" brands, in conjunction with its direct sales force, customer care (call) centers and various retail eCommerce Web sites including: http://www.hawkelectronics.com/and http://www.hawkexpress.com/ Through its wholly-owned subsidiary, Progressive Concepts, Inc., Teletouch operates a national distribution business, PCI Wholesale, primarily serving large cellular carrier agents and rural carriers, as well as auto dealers and smaller consumer electronics retailers, with product sales and support available through http://www.pciwholesale.com/and http://www.pcidropship.com/among other B2B oriented Web sites. As reported by the TCR on Sept. 1, 2011, BDO USA, LLP, in Houston, Texas, noted that the Company has increasing working capital deficits, significant current debt service obligations, a net capital deficiency along with current and predicted net operating losses and negative cash flows which raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Feb. 29, 2012, showed $18.35 million in total assets, $24.81 million in total liabilities, and a $6.45 million total shareholders' deficit. THOMPSON CREEK: Inks Copper Sales Agreement with Glencore --------------------------------------------------------- Terrane Metals Corp., a wholly owned subsidiary of Thompson Creek Metals Company Inc., entered into a Copper Concentrate Sales Agreement with Glencore Ltd. whereby Terrane, among other things, agreed to sell to Glencore copper-gold-silver concentrate produced by Terrane at its Mt. Milligan mine, which is currently under construction in British Columbia, Canada. The term of the Glencore Agreement commences on the date the Mine begins commercial production, and terminates at the end of the third full calendar year thereafter. During the initial partial year of the term and the first full calendar year thereafter, the annual quantity of concentrate which Glencore will purchase from Terrane will be 30% of annual production in each such year, and approximately 40,000 DMT in each of the two calendar years thereafter. Payment for the concentrate will be based on the agreed copper, gold and silver content of the parcels delivered to Glencore pursuant to the terms of the Glencore Agreement, less smelting and refining charges and certain other deductions, if applicable. Pricing will be determined by reference to specified published reference prices during the applicable quotation periods set forth in the Glencore Agreement. The copper smelting and refining charges will be negotiated in good faith and agreed by the parties for each contract year based on terms generally acknowledged as industry benchmark terms. The gold and silver refining charges are as specified in the Glencore Agreement. Glencore will make a 90% provisional payment for concentrate no later than twenty-five business days after the bill of lading date. The provisional payment will be based on Terrane's weights and assays, and on metals pricing, at the time of shipment. Final settlement will be made within five business days after Terrane has submitted its final invoice to Glencore after all final prices and weights and assays have been determined in accordance with the Glencore Agreement. About Thompson Creek Metals Thompson Creek Metals Company Inc. is a growing, diversified North American mining company. The Company produces molybdenum at its 100%-owned Thompson Creek Mine in Idaho and Langeloth Metallurgical Facility in Pennsylvania and its 75%-owned Endako Mine in northern British Columbia. The Company is also in the process of constructing the Mt. Milligan copper-gold mine in central British Columbia, which is expected to commence production in 2013. The Company's development projects include the Berg copper-molybdenum-silver property and the Davidson molybdenum property, both located in central British Columbia. Its principal executive office is in Denver, Colorado and its Canadian administrative office is in Vancouver, British Columbia. More information is available at http://www.thompsoncreekmetals.com * * * As reported by the TCR on Aug. 14, 2012, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Denver- based molybdenum miner Thompson Creek Metals Co. to 'CCC+' from 'B-'. "These rating actions follow Thompson Creek's announcement of weaker production and higher cost expectations through next year," said Standard & Poor's credit analyst Donald Marleau. In the May 9, 2012, edition of the TCR, Moody's Investors Service downgraded Thompson Creek Metals Company Inc.'s Corporate Family Rating (CFR) and probability of default rating to Caa1 from B3. Thompson Creek's Caa1 CFR reflects its concentration in molybdenum, relatively small size, heavy reliance currently on two mines, and the need for favorable volume and price trends in order to meet its increasingly aggressive capital expenditure requirements over the next several years. TRAFFIC CONTROL: Statewide Holdings Rise as Winning Bidder ---------------------------------------------------------- The U.S. Bankruptcy court for the District of Delaware authorized Traffic Control and Safety Corporation, et al., to: -- sell their assets pursuant to an asset purchase agreement with Statewide Holdings, Inc., dated April 19, 2012, as amended; and -- assume and assign executory contracts and unexpired leases. As reported in the Troubled Company Reporter on July 23, 2012, the auction was canceled after no other party submitted a bid that would rival the stalking horse offer by the company's lenders. Second-lien creditors have signed a deal to buy the company in exchange for $20 million of the junior secured debt. In addition, they will assume the first-lien obligations of about $18.5 million, pay expenses of the Chapter 11 case, and provide $500,000 toward expenses not paid with financing for the reorganization. When the sale is completed, the second-lien lenders will waive the remainder of their claim. About Traffic Control Traffic Control and Safety Corporation and six subsidiaries filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-11287) on April 20, 2012. TCSC is the largest independent provider of safety services and products in California and Hawaii. Formed by Marwit Capital Partners II, L.P., in June 2007, TCSC has 430 full- time employees and serves state and local agencies, public works organizations, general contractors, the motion picture industry, and provide services at special events. TCSC estimated assets of up to $50 million and debts of up to $100 million as of the Chapter 11 filing. Toomey Industries, Inc. disclosed $10,322,077 in assets and $67,844,144 in liabilities as of the Chapter 11 filing. Judge Kevin J. Carey presides over the case. Latham & Watkins LLP serves as the Debtors' bankruptcy counsel and Young Conaway Stargatt & Taylor LLP as Delaware counsel. Broadway Advisors, LLC serves as financial advisors, and Epiq Bankruptcy Solutions LLC as the claims and notice agent. The Debtors are authorized to i) use cash collateral in which the First Lien Lender has an interest, (ii) obtain postpetition financing from Fifth Street Finance Corp. and other entities in the maximum amount of $12,775,000. The Debtors canceled auction with only its biggest lender bidding for the assets. Roberta A. Deangelis, U.S. Trustee for Region 3, appointed five unsecured creditors to the Official Committee of Unsecured Creditors. The Committee tapped Potter Anderson & Corroon LLP as its counsel and GlassRatner Advisory & Capital Group LLP as its financial advisor. TRIDENT MICROSYSTEMS: Trade Creditors Expect Big Payout ------------------------------------------------------- Trident Microsystems filed with the U.S. Bankruptcy Court a Joint Chapter 11 Plan of Liquidation and related Disclosure Statement. Katy Stech at Dow Jones' DBR Small Cap reports that Trade creditors of Trident Microsystems Inc. can expect to recover at least 90% of what they're owed thanks to the pool of money that the dormant California technology manufacturer amassed after selling its business units during its bankruptcy case. BankruptcyData relates that according to the DS, "The Plan constitutes a separate chapter 11 plan of liquidation for each of the Debtors. The Plan provides for the formation and creation of the TMI Trust, which will hold, directly or indirectly, the TMI Trust Beneficial Interests for the sole purpose of liquidating and distributing the assets of TMI. The Plan further provides for the appointment of the Plan Administrator to liquidate and distribute the assets of TMFE. At the outset, the Debtors and the Cayman Liquidator, in an effort to solicit a plan of liquidation that would be agreeable to all of the Debtors's Creditors and Equity Holders, have engaged in extensive discussions with the relevant stakeholders - most critically, the Creditors Committee, the Equity Committee, NXP and the IRS - to bring about consensus on certain contentious issues relating to the formulation and consummation of the Plan. In doing so, the Debtors, the Cayman Liquidator and their respective advisors held productive meetings with each of the relevant parties relating to resolution of (i) the Intercompany Claims, (ii) the IRS Claim and (iii) potential claims against NXP and the related 2004 Motion. And, although it does not appear that a consensual agreement between all of the parties is possible, the Debtors, the Cayman Liquidator and the Equity Committee have set forth the terms of a settlement, which such terms resolve for, or carve-out, all material litigation issues, eliminate the uncertainty, time delay and substantial costs that may be posed by litigating these complex, cross-border issues and, most critically, provides the Class 2.A. Creditors with a substantially enhanced recovery than that which they would be entitled to under the Bankruptcy Code's priority of payment regime." About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $310 million in assets and $39.6 million in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. Pachulski Stang Ziehl & Jones LLP represents the Official Committee of Unsecured Creditors. The Committee tapped to retain Fenwick & West LLP as its special tax and claims counsel, Imperial Capital, LLC, as its investment banker and financial advisor. Dewey & Leboeuf as represents the statutory committee of equity security holders. The statutory committee tapped to retain Campbells as Cayman Islands counsel, and Quinn Emanuel Urquhart & Sullivan, LLP as its conflicts counsel. TW TELECOM: Moody's Raises Rating on $430MM Bond to 'Ba3' --------------------------------------------------------- Moody's Investors Service has upgraded the ratings of tw telecom holding inc.'s senior secured facilities, which includes $80 million Revolver due 2014 and $465 million (originally $474 million) Term Loan due 2016, each to Baa3 (LGD2, 16%) from Ba1 (LGD2, 18%); and the ratings of $430 million Senior Notes due 2018 to Ba3 (LGD4, 58%) from B1 (LGD4, 62%). Following the full repayment of the Term Loan B tranche due January 2013 there is less senior secured debt within tw telecom's capital structure, thereby increasing the potential recovery for the remaining debt instruments. Issuer: tw telecom holdings inc. Upgrades: US$80M Senior Secured Bank Credit Facility, Upgraded to Baa3 (LGD2, 16%) from Ba1 (LGD2, 18%) US$474M Senior Secured Bank Credit Facility, Upgraded to Baa3 (LGD2,16 %) from Ba1 (LGD2, 18 %) US$430M 8% Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 (LGD4, 58%) from B1 (LGD4, 62%) Issuer: tw telecom inc. US$373.75M 2.375% Senior Unsecured Conv./Exch. Bond/Debenture, Upgraded to LGD5, 89 % from LGD6, 90% Ratings Rationale TWTC's Ba3 corporate family rating reflects the Company's successful track record of revenue growth and management's conservative financial policies, while recognizing the challenging position as a competitive communications provider. Moody's expects TWTC to operate at adjusted debt/EBITDA leverage in the 2.8x range (as per Moody's standard adjustments) over the next year, with moderate free cash flow generation, as the business remains highly capital intensive. Despite elevated levels of capital spending and relatively high leverage, the Company's strong operating performance driven by consistent revenue growth in the enterprise segment and strong margins due to TWTC's significant fiber infrastructure are positive for the ratings. The Company's results reinforce its differentiated business model that relies on a fiber-rich network with direct connections to major customers, eliminating the need to rely on incumbent carriers for a critical portion of its last mile connections.TWTC continues to have success targeting its medium to large enterprise customers rather than small-medium size business customers, and the Company's stake is built on near- nationwide operating scale in 75 markets in the U.S. Structural Considerations The individual debt instrument ratings are rated based on the probability of default, which is Ba3, as well as the expected loss given default of the individual debt instrument. In accordance with Moody's LGD Methodology, the senior unsecured convertible debentures rated B2 (LGD-5, 89%) issued at the parent company, tw telecom inc., are expected to bear greater loss absorption relative to the liabilities at tw telecom holdings inc. The Ba3 (LGD-4, 58%) rating of the senior unsecured notes issued at tw telecom holdings inc. is in line with the CFR. The instrument is guaranteed by the Company and Holdings' subsidiaries. The Term Loan and Revolver issued at tw telecom holdings inc. are rated Baa3 (LGD-2, 16%), 3 notches above the CFR. Both instruments are senior to the unsecured notes, secured on a first lien basis, and guaranteed by the Company and Holdings' subsidiaries. The maturity on $474 million of the original Term Loan B had been extended to December 2016. The Revolver remains undrawn as of June 30, 2012. What Could Change the Rating - Up Given the operating pressure on competitive telecom providers, further upward momentum is unlikely at this time. However, further upward rating pressure could develop if earnings growth leads to stronger free cash flow generation such that TWTC's free cash flow exceeds 10% of its total adjusted debt, and the Company's leverage (Moody's adjusted Total Debt-to-EBITDA) can be maintained below 2.5x. What Could Change the Rating - Down The rating and/or outlook is likely to come under pressure if TWTC's operating performance deteriorates due to increasing competition, changes in the regulatory environment or persisting weakness in the economic environment beyond Moody's current expectations, such that free cash flow turns negative or leverage cannot be maintained below 3.5x. Additionally, if continuous stock buybacks deplete cash balances, ratings could be pressured. The principal methodology used in rating TW Telecom was the Global Communications Infrastructure Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. UNIGENE LABORATORIES: Terminates VP Investor Relations, 4 Others ---------------------------------------------------------------- Unigene Laboratories, Inc., has implemented contingency cost- saving initiatives, including an organizational realignment and a reduction of its full-time headcount by four personnel. Pursuant to the organizational realignment, on Aug. 13, 2012, the Company entered into a separation agreement and general release with Ms. Jenene Thomas, the Company's former Vice President of Investor Relations and Business Administration. Ms. Thomas' employment with the Company will terminate on Sept. 28, 2012. In consideration for her release of any and all claims against the Company and benefits accrued during the term of her employment, the Company has agreed to provide Ms. Thomas with the following lump sum payments: (i) $32,682 to be paid on Aug. 20, 2012, with respect to unpaid salary; (ii) $77,250 to be paid on Aug. 20, 2012, representing four months of severance compensation in accordance with her employment agreement; and (iii) $16,044 to be paid on Aug. 15, 2012, representing accrued vacation pay. Pursuant to the terms of the separation agreement and to the extent Ms. Thomas is eligible for and has elected COBRA continuation coverage in accordance with the Company's COBRA continuation health coverage policies, the Company is obligated to pay the full monthly premiums associated with such coverage on behalf of Ms. Thomas through Feb. 28, 2013. Furthermore, the Company agreed to accelerate the vesting of 412,050 existing unvested stock options on Sept. 28, 2012, and extended the exercise period on 513,450 existing stock options, inclusive of the 412,050 options for which vesting was accelerated, from 90 days post-termination to Sept. 27, 2013. Also on Aug. 13, 2012, the Company announced the promotion of Brian Zietsman, the Company's Executive Director of Finance, to Chief Financial Officer, effective immediately. There will be no changes to Mr. Zietsman's compensation as a result of the promotion. As a result of Ms. Thomas' departure, in addition to his other responsibilities, Mr. Zietsman will be responsible for the Company's Investor Relations function. Pamela Cantor, Vice President of Human Resources and Business Administration, will be responsible for the Company's Business Administration function. About Unigene Unigene Laboratories, Inc. OTCBB: UGNE) -- http://www.unigene.com/ -- is a biopharmaceutical company focusing on the oral and nasal delivery of large-market peptide drugs. Unigene reported a net loss of $17.92 million in 2011, a net loss of $27.86 million in 2010, and a net loss of $13.38 million in 2009. The Company's balance sheet at June 30, 2012, showed $11.69 million in total assets, $77.56 million in total liabilities and a $65.87 million total stockholders' deficit. Grant Thornton LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 financial results. The independent auditors noted that the Company has incurred a net loss of $17,900,000 during the year ended Dec. 31, 2011, and, as of that date, has an accumulated deficit of approximately $189,000,000 and the Company's total liabilities exceeded total assets by $55,138,000. Bankruptcy Warning Under the Company's amended and restated March 2010 financing agreement with Victory Park Management, LLC, so long as the Company's outstanding note balance is at least $5,000,000, the Company must maintain a minimum cash balance equal to at least $2,500,000 and its cash flow must be at least $2,000,000 in any fiscal quarter or $7,000,000 in any three consecutive quarters. "Without additional financing, we will not be able to maintain a minimum cash balance of $2,500,000, or maintain an adequate cash flow, in order to avoid default in periods subsequent to September 30, 2012," the Company said in its quarterly report for the period ended June 30, 2012. "As a result, we will be in default under the financing agreement, which would result in the full amount of our debt owed to Victory Park becoming immediately due and payable. Even if we are able to raise cash and maintain a minimum cash balance of at least $2,500,000 through the March 2013 maturity date, there is no assurance that the notes will be converted into common stock, in which case, we may not have sufficient cash from operations or from new financings to repay the Victory Park debt when it comes due. There can be no assurance that new financings will be available on acceptable terms, if at all. In the event that we default, Victory Park could retain control of the Company and will have the ability to force us into involuntary bankruptcy and liquidate our assets." UNITED COMMERICAL: Case Summary & 8 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: United Commerical Holdings LLC 14541 Brookhurst Street, Suite A-2 Westminster, CA 92683 Bankruptcy Case No.: 12-19899 Chapter 11 Petition Date: August 20, 2012 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Charles W. Daff, Esq. LAW OFFICES OF CHARLES W. DAFF 2009 N Broadway Santa Ana, CA 92706 Tel: (714) 541-0301 Fax: (714) 569-0515 E-mail: cdaff@epiqtrustee.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 eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-19899.pdf The petition was signed by John Viet Quoc Vo, shareholder. VIEW SYSTEMS: Amends 2010 Annual Report to Correct Error -------------------------------------------------------- View Systems, Inc., filed with the U.S. Securities and Exchange Commission an amended annual report on Form 10-K/A for the year ended Dec. 31, 2010, to correct a revenue recognition error uncovered in the audit of the Company's financial statements for the year ended Dec. 31, 2011. In conjunction with the correction and restatement to the Company's financial statements for the year ended Dec. 31, 2010, the Company is also correcting and restating its financial statements included in Forms 10-Q filed for the quarterly periods ending March 31, 2011, June 30, 2011, and Sept. 30, 2011. The Company's restated statement of operations for the year ended Dec. 31, 2010, reflects a net loss of $555,145 on 726,234 of net revenues, compared with a net loss of $513,353 on $768,026 of revenues as origanilly reported. The Company's restated balance sheet at Dec. 31, 2010, showed $1.16 million in total assets, $1.64 million in total liabilities and a $480,564 total stockholders' deficit. The Company previously reported $1,160,346 in total assets, $1,361,427 in total liabilities, and a stockholders' deficit of $201,081. A copy of the amended Annual Report is available for free at: http://is.gd/7R7idx About View Systems Baltimore, Md.-based View Systems, Inc., develops, produces and markets computer software and hardware systems for security and surveillance applications. The Company reported a net loss of $368,329 on $576,735 of net revenues for the nine months ended Sept. 30, 2011, compared with a net loss of $294,065 on $722,042 of net revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $1.48 million in total assets, $1.82 million in total liabilities, and a $339,294 total stockholders' deficit. As reported in the TCR on March 15, 2011, Robert L. White & Associates, Inc., in Cincinnati, Ohio, expressed substantial doubt about View Systems' ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company had a net loss of $513,353 for the year ended Dec. 31, 2010, and has an accumulated deficit of $22,837,787 at Dec. 31, 2010. VISUALANT INC: Board of Directors Approves Bylaws Amendment ----------------------------------------------------------- The Board of Directors of Visualant, Incorporated, approved the amended and restated bylaws of the Company which replace the Company's previous bylaws in their entirety. The Board has recommended that the Bylaws be submitted to the stockholders of the Company for approval, although that approval is not required either under the Company's previous bylaws or the Nevada General Corporation Law. The Company's previous bylaws were adopted by a predecessor of the Company in 1998 and were outdated. The amended and restated Bylaws reflect current corporate practices and current Nevada statutory provisions. Among the provisions in the amended and restated Bylaws that were not in the previous bylaws are a provision governing the submission of notice of stockholder business to be brought before an annual meeting of stockholders and a provision governing the nomination of directors, including nominations by stockholders. A copy of the Amended Bylaws is available for free at: http://is.gd/gxhwQY About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on October 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant reported a net loss of $2.39 million for the year ended Sept. 30, 2011, compared with a net loss of $1.14 million during the previous year. The Company's balance sheet at June 30, 2012, showed $6.84 million in total assets, $7.03 million in total liabilities, $28,350 in noncontrolling iterest, and a $220,669 total stockholders' deficit. The Company anticipates that it will record losses from operations for the foreseeable future. As of June 30, 2012, the Company's accumulated deficit was $13.1 million. The Company has limited capital resources, and operations to date have been funded with the proceeds from private equity and debt financings. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The audit report prepared by the Company's independent registered public accounting firm relating to the Company's financial statements for the year ended Sept. 30, 2011, includes an explanatory paragraph expressing the substantial doubt about the Company's ability to continue as a going concern. The audit report prepared by the Company's independent registered public accounting firm relating to its financial statements for the year ended Sept. 30, 2011, includes an explanatory paragraph expressing the substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Securities Purchase Agreement dated June 17, 2011, with Ascendiant Capital Partners, LLC, will terminate if the Company's common stock is not listed on one of several specified trading markets (which include the OTCBB and Pink Sheets, among others), if the Company files protection from its creditors, or if a Registration Statement on Form S-1 or S-3 is not effective. If the price or the trading volume of the Company's common stock does not reach certain levels, the Company will be unable to draw down all or substantially all of its $3,000,000 equity line of credit with Ascendiant. The maximum draw down amount every 8 trading days under the Company's equity line of credit facility is the lesser of $100,000 or 20% of the total trading volume of the Company's common stock for the 10-trading-day period prior to the draw down multiplied by the volume-weighted average price of the Company's common stock for that period. If the Company stock price and trading volume decline from current levels, the Company will not be able to draw down all $3,000,000 available under the equity line of credit. "If we are not able to draw down all $3,000,000 available under the equity line of credit or if the Securities Purchase Agreement is terminated, we may need to restructure our operations, divest all or a portion of our business, or file for bankruptcy," the Company said in its quarterly report for the period ended June 30, 2012. VWR FUNDING: Moody's Rates $750 Million Notes Offering 'Caa1' ------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to the proposed $750 million notes offering of VWR Funding, Inc. The proceeds of the offering will be used to repay the existing 10.25% senior unsecured notes due 2015. All other ratings remain unchanged, including the B3 Corporate Family Rating and Probability of Default Rating and the B1 on the senior secured credit facility. The rating outlook remains positive. Ratings assigned: Proposed $750 million Senior Unsecured Notes, Caa1 (LGD 4, 69%) Ratings to be withdrawn upon repayment: $713 Million 10.25% Senior Notes due 2015, rated Caa1 (LGD 5, 73%) Ratings Rationale VWR's B3 Corporate Family Rating reflects the company's high leverage and modest interest coverage and free cash flow relative to debt. The ratings are supported by VWR's good scale and market position as the #2 global life science distributor (behind Thermo Fisher, Baa1) as well as the stability of revenue and profitability. The company has demonstrated consistent revenue growth and improved profit margins driven both by organic growth and acquisitions. While the company's acquisition strategy has added to its global scale and geographic diversity, it increases the complexity of the organization and could pose some business practice compliance risk, particularly in emerging markets. Moody's could upgrade the ratings if VWR continues to grow revenue and EBITDA such that the rating agency expects adjusted debt to EBITDA to be sustained below 6.5 times and free cash flow to remain above 3% of total adjusted debt. If Moody's expects sustained negative free cash flow or leverage to rise above 8 times either due to deterioration in EBITDA, acquisitions or shareholder payouts, the ratings could be downgraded. Further, material deterioration in liquidity could also lead to rating pressure. The principal methodology used in rating VWR Funding, Inc. was the Global Distribution & Supply Chain Services Industry Methodology 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. VWR Funding, Inc., headquartered in Radnor, Pennsylvania, is a global leader in the distribution of laboratory scientific supplies, including chemicals, glassware, equipment, instruments, protective clothing, and production supplies. Services include technical services, onsite storeroom services and laboratory and furniture design, supply and installation. The company serves customers in the pharmaceutical, biotechnology, medical device, chemical, technology, food processing and consumer product industries, as well as governmental agencies, universities and research institutes, and environmental organizations. For the twelve months ended June 30, 2012, VWR reported revenues of approximately $4.2 billion. VWR FUNDING: S&P Rates New $750MM Senior Unsecured Notes 'B-' ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' issue-level and '5' recovery rating to Radnor, Pa.-based laboratory products distributor VWR Funding Inc.'s proposed $750 senior unsecured notes. "The '5' recovery rating indicates our expectation for modest (10% to 30%) recovery for senior unsecured lenders in the event of a payment default. The 'B-' rating on the notes is one notch lower that our 'B' corporate credit rating on VWR, in accordance with our notching criteria for a recovery rating of '5'. We affirmed all ratings, including our corporate credit rating. Our rating outlook remains stable," S&P said. "The interest rate on the new notes will be determined by market conditions, but we expect the transaction to save approximately $20 million in annual interest expense per year," said Standard & Poor's credit analyst John Bluemke. "It should be nearly debt- neutral, and the interest savings will not be big enough to alter our view of VWR's liquidity or financial risk profile." "Our ratings on VWR overwhelmingly reflect its 'highly leveraged' financial risk profile, because of its exceptionally heavy leveraged buyout (LBO)-related debt burden, growing preferred stock (which we treat as debt), and exposure to the improving, but still weak, global economy. Madison Dearborn Partners LLC (MDP) acquired VWR in 2007, markedly increasing debt and debt-like obligations. Given nearly $3 billion of debt, $120 million of operating lease obligations, and viewing MDP's preferred investment as debt, adjusted debt is about $5.1 billion. This level of adjusted debt is unlikely to change over the next few years, because we expect accretion of the pay-in-kind (PIK) preferred stock to offset scheduled bank loan amortizations. We view VWR's business risk profile as 'satisfactory,' reflecting its scale and the industries barriers to entry, as well as its narrow business focus," S&P said. WATERLOO RESTAURANT: Authorized to Sell Certain Restaurant Assets ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Waterloo Restaurant Ventures, Inc.. to sell certain assets free and clear of liens, claims and encumbrances. As reported in the Troubled Company Reporter on July 16, 2012, the Debtor revealed in a court filing that it is marketing its assets in order to maximize the value of the assets while still operating as Romano's Macaroni Grill franchises. The Court also ordered that: -- the Debtor to consummate without further Court approval all sales transactions of the restaurant equipment pursuant to that certain sellers agreement by and between Rosen Systems, Inc. -- the Debtor and Rosen Systems provide to counsel for Allan and Beverly Sebanc, trustees of the Sebanc Family Trust and Kenneth D. McCloskey, trustee of the McCloskey Family Trust and counsel for Eastridge Shopping Center a comprehensive report regarding the sale of the restaurant equipment that includes, but is not limited to, (i) who was permitted on the premises of the closed locations, including the identity of any contractor retained by a purchaser of restaurant equipment; (ii) who purchased the restaurant equipment; (iii) who removed the restaurant equipment from the closed locations; (iv) the identity of any person or contractor retained by a purchaser of restaurant equipment who participated in the disconnection of the restaurant equipment at the closed locations from any electrical, gas, or plumbing source; (v) any applicable insurance policies maintained by any persons. About Waterloo Restaurant Waterloo Restaurant Ventures, Inc., operator of 12 Romano's Macaroni Grill restaurants, filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-31573) in Dallas on March 8, 2012, to pursue a sale of the business. The Debtor has 12 stores are in California, Oregon and Washington. The Italian-style casual dining chain said there was a "dramatic decrease in sales in the majority of the franchises" the company owns. Some were generating negative cash flows from operations. Judge Barbara J. Houser presides over the case. Waterloo is represented by Rochelle McCullough, LLP. In its schedules, Waterloo listed $22,912,226 in total assets and $17,455,176 in total liabilities. As of April 5, 2012, the Office of the U.S. Trustee has not appointed an official committee of unsecured creditors. ZOOM TELEPHONICS: Had $210,800 Net Loss in Second Quarter --------------------------------------------------------- Zoom Telephonics, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $210,860 on $3.8 million of sales for the three months ended June 30, 2012, compared with a net loss of $326,069 on $3.2 million of sales for the comparable period last year. For the six months ended June 30, 2012, the Company had a net loss of $325,128 on $7.8 million of sales, compared with a net loss of $610,671 on $6.0 million for the same period of 2011. The Company's balance sheet at June 30, 2012, showed $5.0 million in total assets, $1.7 million in total current liabilities, and stockholders' equity of $3.3 million. According to the regulatory filing, management does not believe the Company has sufficient resources to fund its normal operations over the next 12 months unless sales or gross margin improves significantly or the Company raises capital. As reported in the TCR on April 9, 2012, Marcum LLP, in Boston, Massachusetts, expressed substantial doubt about Zoom Telephonics' 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 had recurring net losses and continues to experience negative cash flows from operations. A copy of the Form 10-Q is available for free at: http://is.gd/KJZkpz Located in Boston, Massachusetts, Zoom Telephonics, Inc., designs, produces, markets, sells, and supports broadband and dial-up modems, Wi-Fi(R) and Bluetooth(R) wireless products, and other communication-related products. ZYTO CORP: Reports $31,200 Net Income in Second Quarter ------------------------------------------------------- ZYCO Corp filed its quarterly report on Form 10-Q, reporting net income of $31,270 on $1.4 million of revenues for the three months ended June 30, 2012, compared with a net loss of $66,238 on $1.2 million of revenues for the same period a year earlier. For the six months ended June 30, 2012, the Company had net income of $96,854 on $2.5 million of revenues, compared with a net loss of $397,390 on $2.0 million of revenues for the same period in 2011. The Company's balance sheet at June 30, 2012, showed $1.2 million in total assets, $3.9 million in total liabilities, and a stockholders' deficit of $2.7 million. Going Concern As of June 30, 2012, and Dec. 31, 2011, the Company had an accumulated deficit of $8.0 million and $8.1 million, respectively. As of June 30, 2012, and Dec. 31, 2011, the Company's current liabilities exceeded its current assets by $823,054 and $1.0 million, respectively. "These factors raise substantial doubt about our ability to continue as a going concern." Hansen, Barnett, & Maxwell, P.C., in Salt Lake City, Utah, expressed substantial doubt about ZYTO'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 an accumulated deficit, and negative working capital. A copy of the Form 10-Q is available for free at: http://is.gd/5ONpYk Lindon, Utah-based ZYTO Corp.'s operations consist of the manufacturing and distribution of biocommunication devices and software designed to facilitate communication between computers and the human body. * Fitch Says 31 U.S. Issuers at Risk of Repeat Default ------------------------------------------------------ Fitch Ratings has identified 31 U.S. issuers that have previously defaulted on debt and are at risk for a future default based on their low speculative-grade ratings in a report published Aug. 21. Fitch used an Issuer Default Rating (IDR) of 'B-' or lower to screen historical defaulters for potential repeat offenders. Within Fitch's U.S. High Yield Default Index there are 50 issuers that have already defaulted twice or more since 2000, with two issuers defaulting three times. Distressed debt exchanges (DDEs) were the most common source of the first defaults, and bankruptcies were most frequently the cause of subsequent defaults. The average time between these 'round trip' defaults was about 34 months, but this average declined to 14 months in the 24 instances that a DDE was the source of the initial default. Companies with more than one default within a several-year period provide useful examples of the primary reasons why initial attempts at successful reorganization fail. Key drivers of second defaults are failure to resolve operating cost issues or sufficiently reduce debt. Second defaults are also frequent for issuers in industries that are in a deep cyclical trough or chronic decline. Chapter 22 is the informal name for a second Chapter 11 bankruptcy filing. Fitch notes that compared to Chapter 7 liquidation, a second bankruptcy or another DDE may provide issues with the chance to preserve greater value for creditors, employees and other constituencies through the restructuring process. Debtors and creditors will pursue the default option that maximizes value based on their opinion of future cash flow and business prospects. The full report 'Chapter 22 Bankruptcies and Other Repeat Defaults' is available at http://www.fitchratings.com/. * Fitch Says US High Yield Default Rate Falls Back to 2% in July ---------------------------------------------------------------- The trailing 12-month U.S. high yield default rate slipped back to 2% from 2.2% in June, according to a new report from Fitch Ratings. The month's lone default, the bankruptcy filing of Patriot Coal, pushed the year-to-date issuer count to 20 and the par value of bonds affected by defaults to $10.2 billion. The two metrics compare with 10 issuer defaults on $4.7 billion in bonds over the same period in 2011. Despite low activity in June and July, Fitch expects the default rate to move higher and end the year in a range of 2.5%-3%. Fitch finds that the high-risk pool of 'CCC' or lower rated bonds trading at 80% of par or lower remains significant at $55 billion. Nearly all 2012 defaults have come from this troubled group. The par weighted default rate for this tier hit a year-to-date 15% in July. Examining the entire pool of bonds rated 'CCC' or lower, Fitch finds that this slice of the market is growing larger in 2012. At the end of July, these issues represented 21% of market volume ($221.7 billion), up from 19% ($196.8 billion) at the beginning of the year. The 'CCC' share has now risen for three consecutive months and is at its highest level since May 2010. The weighted average recovery rate stood at 57.5% of par on defaults through July. The senior secured recovery rate was 79.1%, and the senior unsecured rate was 33.2%. * Syracuse, N.Y. Seeks Legal Expert's Opinion for Info Purposes --------------------------------------------------------------- Fitch Ratings in an Aug. 9 article said it believes the city of Syracuse's objective for requesting a legal expert's opinion on municipal bankruptcy is only informational and it is unlikely that the city will pursue bankruptcy in the near future. "We also expect the number of cities that express an interest in bankruptcy procedures to increase, presenting challenges to bondholders," Fitch said. Fitch noted that Syracuse Mayor Stephanie Miner told The Wall Street Journal that she has asked an outside legal expert to prepare a legal memorandum about the process of municipal bankruptcy, according to an article on August 7. "We contacted the mayor to discuss the city's goals in this inquiry and what steps the city has taken. Our conclusion, based on this discussion, is that the city's objective at this time is informational only. No credit factors indicate that bankruptcy is a real possibility in the near future," Fitch said. "We expect other cities to express an interest in bankruptcy procedures more frequently as the fiscal stress drags on and that this presents a challenge to bondholders. Some distressed governments that inquire about bankruptcy will exhibit a modicum of financial flexibility, satisfactory reserves, revenue-raising options, or potential for spending cuts. These should be distinguished from governments that inquire after exhausting options and making public statements conveying the possibility of a bankruptcy filing. "We expect informational requests and bankruptcy filings to be less frequent in states that provide intervention mechanisms for local governments. The New York State Financial Control Board, for example, was founded in 1975 and has been effective in helping towns to avoid bankruptcy," according to Fitch. "As the number of local governments that inquire about bankruptcy rises we will continue to monitor the situations and report back," Fitch added. * All Chapter 13 Payments May Go to Debtor's Lawyer --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that there is no rule making a Chapter 13 plan automatically in bad faith if all payments under the plan go to the bankrupt's lawyer, a panel for the U.S. Court of Appeals in New Orleans ruled on Aug. 16, reversing the district court. The case involved an elderly individual whose only income was $1,060 a month in Social Security benefits. She owned a home worth $55,000 with a $40,600 mortgage requiring monthly payments of $327. According to the report, she had more than $7,000 in credit card debt. Her bankruptcy lawyer in effect made a loan to cover filing fees. The plan called for the lawyer to receive a $2,800 fee under a so-called no-look local rule, where the requested fee is permitted unless someone objects. The report relates that the bankruptcy court confirmed the plan over an objection from the Chapter 13 trustee, who appealed to the district court and won, overturning approval of the plan. The district judge would have sent the case back to the lower court directing the bankruptcy judge to make a finding that the plan was per se in bad faith, because all of the bankrupt's payments under the plan would have gone to the lawyer. The Bloomberg report disclosed that writing for the three-judge court, Circuit Judge Patrick E. Higginbotham reversed and ruled that the plan was properly confirmed. He said that the bankruptcy judge didn't abuse his discretion in concluding that the fee was reasonable. He also said there is no per se rule making a plan in bad faith if all payments go to the lawyer. The case is Sikes v. Crager (In re Crager), 11-30982, U.S. Court of Appeals for the Fifth Circuit (New Orleans). * Legal Name Not Required on UCC Financing Statement ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a U.S. district judge in Illinois ruled on Aug. 17 there is no requirement in the Uniform Commercial Code that a person's legal name, or name on a birth certificate, must appear on a financing statement for the resulting security interest to be valid in bankruptcy. According to the report, the bankruptcy judge voided a security interest when the financing statement listed the debtor's name as "Bennie A. Miller," a variant of names the bankrupt used. His birth certificate said "Ben Miller." U.S. District Judge Michael P. McCuskey interpreted the Illinois UCC as only requiring use of a "correct name," not the person's legal name. The Bloomberg report disclosed that for imposing a requirement not contained in the UCC, McCuskey reversed the bankruptcy court and held the security interest valid. The case is State Bank of Arthur v. Miller (In re Miller), 12-02052, U.S. District Court, Central District Illinois (Urbana). * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Sept. 13-14, 2012 AMERICAN BANKRUPTCY INSTITUTE 9th Annual Complex Financial Restructuring Program Four Seasons Hotel, Las Vegas, Nev. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Sept. 13-15, 2012 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Southwest Bankruptcy Conference Four Seasons Hotel, Las Vegas, Nev. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Sept. 19-20, 2012 AMERICAN BANKRUPTCY INSTITUTE 38th Annual Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganizations New York University School of Law, New York, N.Y. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 4, 2012 AMERICAN BANKRUPTCY INSTITUTE Nuts & Bolts: Bankruptcy Fundamentals for Young and New Practitioners Charles Evans Whittaker Courthouse, Kansas City, Mo. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 5, 2012 AMERICAN BANKRUPTCY INSTITUTE 32nd Annual Midwestern Bankruptcy Institute & Consumer Forum Kansas City Marriott Downtown, Kansas City, Mo. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 5, 2012 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy 2012: Views from the Bench Georgetown University Law Center, Washington, D.C. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 8, 2012 AMERICAN BANKRUPTCY INSTITUTE 5th Annual Chicago Consumer Bankruptcy Conference University of Chicago Gleacher Center, Chicago, Ill. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 18, 2012 AMERICAN BANKRUPTCY INSTITUTE International Insolvency & Restructuring Symposium Parco dei Principi Grand Hotel & Spa, Rome, Italy Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 26, 2012 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program San Diego Marriott Marquis and Marina, San Diego, Calif. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Nov. 1-2, 2012 AMERICAN BANKRUPTCY INSTITUTE Corporate Restructuring Competition Wharton University of Pennsylvania, Philadelphia, Pa. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Nov. 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 12, 2012 AMERICAN BANKRUPTCY INSTITUTE Detroit Consumer Bankruptcy Conference [Location Undetermined] Contact: 1-703-739-0800 ; http://www.abiworld.org/ Nov. 26, 2012 BEARD GROUP, INC. 19th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Nov. 29-30, 2012 MID-SOUTH COMMERCIAL LAW INSTITUTE 33rd Annual Bankruptcy & Commercial Law Seminar Nashville Marriott at Vanderbilt, Nashville, Tenn. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Nov. 29 - Dec. 1, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Dec. 4-8, 2012 AMERICAN BANKRUPTCY INSTITUTE ABI/SJUSL Mediation Training Symposium St. John's University, Queens, N.Y. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Feb. 20-22, 2013 AMERICAN BANKRUPTCY INSTITUTE VALCON Four Seasons Las Vegas, Las Vegas, Nev. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Apr. 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ Apr. 18-21, 2013 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800 ; http://www.abiworld.org/ June 13-16, 2013 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Mich. Contact: 1-703-739-0800 ; http://www.abiworld.org/ July 11-13, 2013 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Hyatt Regency Newport, Newport, R.I. Contact: 1-703-739-0800 ; http://www.abiworld.org/ July 18-21, 2013 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Aug. 8-10, 2013 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hotel Hershey, Hershey, Pa. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Aug. 22-24, 2013 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nev. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ Nov. 1, 2013 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Atlanta Marriott Marquis, Atlanta, Ga. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Dec. 2, 2013 BEARD GROUP, INC. 19th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Dec. 5-7, 2013 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Terranea Resort, Rancho Palos Verdes, Calif. Contact: 1-703-739-0800 ; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. Last Updated: Aug. 15, 2012 (8:00 a.m.) ********* 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 ***