/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120911.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, September 11, 2012, Vol. 16, No. 253 Headlines ABOUND SOLAR: Trustee Has Permission to Auction Assets AFA INVESTMENT: OK'd to Pay Bonuses to Non-Insider Key Employees ALKERMES INC: Moody's Upgrades CFR/PDR to 'B1'; Outlook Positive ALKERMES PLC: S&P Gives 'BB-' Corp. Credit Rating; Outlook Stable AMERICAN ARCHITECTURAL: Asks Court's Permission to Auction Assets AMERICAN REALTY: S&P Puts 'BB' CCR on Watch on Realty Income Deal AMERICAN AXLE: Inks $550MM Underwriting Agreement with JP Morgan AMERICAN WEST: Okayed to Pay $500,000 to Critical Vendors AMES DEPARTMENT: Proskauer Rose Approved as Substitute Attorneys AOT BEDDING: Moody's Assigns 'B2' Corp. Family Rating AOT BEDDING: S&P Gives 'B' Corporate Credit Rating; Outlook Stable AUTO CARE MALL: Bank Squares Off With U.S. Trustee on Receiver AUTO CARE MALL: Status Conference Set for Oct. 4 AUTO CARE MALL: Sec. 341 Creditors' Meeting on Wednesday BEALE STREET BLUES: No Ruling Yet on Mirage Revenues BEAU VIEW: Ordered to File Disclosure Statement & Plan by Sept. 28 BERNARD L. MADOFF: ABN Asks Judge to Give Broad Swap Protection BJ'S WHOLESALE: S&P Cuts CCR to 'B' on Refinancing, Dividend BLITZ USA: Delaware Judge Kevin Gross Appointed as Mediator CAESARS ENTERTAINMENT: Bank Debt Trades at 12% Off CAI INTERNATIONAL: S&P Retains 'BB' Corporate Credit Rating CAMTECH PRECISION: R&J Unit Wants More Time for Plan Negotiations CAPITOL BANCORP: Judge Marci McIvor Hancles Chapter 11 Case CAPITOL BANCORP: Can Employ KCC as Noticing and Balloting Agent CAPITOL BANCORP: U.S. Trustee Forms Five-Member Creditors Panel CARLTON HOTEL: South Beach Hotel Files to Stop Receiver CELL THERAPEUTICS: Unit Signs Logistics Agreement with Movianto CENTRAL FALLS, R.I.: Judge Confirms Chapter 9 Plan CHARLESTON ASSOCIATES: Stipulation Authorizing Cash Use Approved CHINA JO-JO DRUGSTORES: Receives Delisting Notice from NASDAQ CIRCUS & ELDORADO: Committee Can Hire XRoads as Financial Advisor CIT GROUP: Must Face Tyco's $190-Mil. Tax Claim, 2nd Circ. Says CLAIRE'S STORES: Selling Add'l $625-Mil. of 9% Sr. Secured Notes CLARE OAKS: Court Confirms Termination of Solicitation Period COLLECTIVE BRANDS: S&P Affirms 'B' Corp. Credit Rating; Off Watch CNO FINANCIAL: A.M. Best Raises Issuer Credit Rating to 'bb' COLONIAL BANCGROUP: Hedge Funds Can Finance Lawsuits COMPUTER GRAPHICS: Reports $109,000 Net Income in June 30 Quarter CONVERTED ORGANICS: Has 368.2 Million Common Shares Outstanding CPG INTERNATIONAL: S&P Affirms B CCR; Outlook Revised to Negative CPI CORP: Amends "Westfield Settlement Report" to Correct Dates DAYTOP VILLAGE: Garfunkel Wild Approved as Healthcare Counsel DAYTOP VILLAGE: Massey Knakal Approved as Real Estate Broker DCP LLC: Moody's Reviews 'B2' CFR, 'B1' PDR for Downgrade DEEP PHOTONICS: Wants to Hire Carl Welander as Accountant DELTA ENVIRONMENTAL: Wants to Convert Case to Chapter 7 Proceeding DEMCO INC: Meeting of Creditors Scheduled for Sept. 14 DEMCO INC: U.S. Trustee Appoints Three-Member Creditors' Panel DIGITAL DOMAIN: Needs Cash Quickly to Avoid Creditor Protection DRILL RIGS: Moody's Rates US$750MM Senior Secured Notes '(P)B2' DVORKIN HOLDINGS: Taps SBCGD as Bankruptcy Counsel DVORKIN HOLDINGS: U.S. Trustee Wants to Oust Management DVORKIN HOLDINGS: Files Schedules of Assets and Liabilities ELPIDA MEMORY: Bondholders Cleared to Question over U.S. Assets FLETCHER GRANITE: Court Approves Additional Work for Yoshida FLETCHER INTERNATIONAL: Fund Being Taken Over by Trustee FORT LAUDERDALE: Gets Interim OK for Genovese Joblove as Counsel FOXCO ACQUISITION: Moody's Rates 1st Lien Sr. Sec. Revolver 'B2' FTMI REAL ESTATE: Sec. 341(a) Meeting Scheduled for Sept. 21 FTMI REAL ESTATE: Can Employ Gamberg & Abrams as Bankr. Counsel GARDA WORLD: S&P Puts 'B+' CCR on Watch Neg on C$1.1B Mgt. Buyout GATEHOUSE MEDIA: Bank Debt Trades at 69% Off in Secondary Market GENE CHARLES: Section 341(a) Meeting Scheduled for Sept. 24 GENE CHARLES: Court to Convene Oct. 2 Hearing on Dismissal Motion GEO GROUP: S&P Gives 'BB' Rating on $100MM Incremental Term Loan GLOBAL AVIATION: Labor Contract Changes Win Support GLYECO INC: Extends Closing Dates of ARI & Enviro-Cool Pacts GMX RESOURCES: Less Than 50% of Noteholders Accept Exchange Offer GORDON PROPERTIES: Failure to Consolidate Was 'Clearly Erroneous' GRAYMARK HEALTHCARE: Lender Approves Acquisition of Foundation GRANITE DELLS: Plan Outline Hearing Continued Until Sept. 20 GSC GROUP: Lender's Defamation Claims Nixed in Asset Sale Row HALIFAX GROUP: Parties-in-Interest Want Case Dismissal/Conversion HANOVER INSURANCE: Fitch Affirms 'BB' Rating on Junior Debentures HARRY GREEN: Judge Dismisses Chapter 11 Bankruptcy Case HEALTHSOUTH CORP: Moody's Rates $250MM Sr. Unsecured Notes 'B1' HILAND PARTNERS: S&P Gives 'B' Corp. Credit Rating; Outlook Stable HOMELAND SECURITY: Trevor Stoffer Discloses 11% Equity Stake HOMELAND SECURITY: Thomas McMillen Discloses 13.8% Equity Stake HUBBARD PROPERTIES: Panel Dissolved at Assignee Creditor's Request HUDBAY MINERALS: Moody's Assigns 'B2' CFR/PDR; Outlook Stable HUSSEY COPPER: Wins Confirmation of 43% Liquidating Plan ICEWEB INC: Amends 38.9 Million Common Shares Prospectus IMAGEWARE SYSTEMS: Certified to Work on NuVola Cloud Platform INFUSION BRANDS: Engages Thomas Howell as New Accounting Firm INOVA TECHNOLOGY: Amends 375 Million Common Shares Prospectus IPS CORP: Moody's Withdraws 'B3' Corporate Family Rating JACKSONVILLE BANCORP: New COO to Get $200,000 Annual Salary JOHN SMITH: Arkansas Coach Files for Chapter 7 Bankruptcy JOURNAL REGISTER: Can Hire American Legal Claim Services JOURNAL REGISTER: Schedules Filing Deadline Moved to Nov. 5 JOURNAL REGISTER: Meeting to Form Creditors Panel Set on Thursday KEITH ALAN WATT: Files for Chapter 11 Bankruptcy Protection K-V PHARMACEUTICAL: Hologic Wants to Pursue Makena Claims LEGENDS GAMING: Meeting of Creditors Set for Wednesday LIBERTY HARBOR: Has Until Oct. 5 to Propose Plan of Reorganization LIGHTSQUARED INC: Lenders Object to $6MM Employee Incentive Plan LI-ION MOTORS: Authorized Common Shares Hiked to 400 Million LIONS GATE: Moody's Upgrades CFR/PDR to 'B1'; Outlook Stable LIQUIDMETAL TECHNOLOGIES: Issues 5.1-Mil. Shares to Noteholders LODGENET INTERACTIVE: Fails to Comply with $1.00 Bid Price Rule MARION AMPHITHEATRE: Court Dismisses Chapter 11 Case MEDFORD VILLAGE: Section 341(a) Meeting Scheduled for Sept. 27 MEDFORD VILLAGE: Secured Creditor Lennar Seeks Dismissal of Case MEDFORD VILLAGE: Judge Wizmur Terminates Involvement in Case NASSAU BROADCASTING: Gets Extension to File Payment Plan NEBRASKA EDUCATIONAL: Fitch Affirms 'B' Rating on $17-Mil. Bonds NEWLEAD HOLDINGS: Receives NASDAQ Notification Letter NEWPAGE CORP: Wants to Formulate Ch. 11 Plan After Mediation NEWPAGE CORP: Verso Paper Merger Retreat Inflicts Bond Losses PACIFIC RIM: Reports $0.6 Million Net Loss in Fiscal 1st Quarter PAR PETROLEUM: Appoints New Board of Directors & Officers PEAK RESORTS: Section 341(a) Meeting Scheduled for Wednesday PEAK RESORTS: Taps American Resort as Management Consultant PEAK RESORTS: HLO Can Employ Starr Associates as Special Counsel PEREGRINE FINANCIAL: Files Schedules of Assets & Debts PHIL'S CAKE: Tampa's Alessi Bakeries Files to Halt Foreclosure PHIL'S CAKE: Wants to Use Lenders' Cash Collateral PHIL'S CAKE: Sec. 341 Creditors' Meeting Set for Oct. 5 PINNACLE AIRLINES: Former Silver Airways Exec. Named SVP and CFO PRECISION DRILLING: S&P Cuts Rating on Senior Secured Debt to 'BB' RADIOSHACK CORP: Closing Date of Joint Venture Moved to Oct. 15 RCS CAPITAL: ABC Learning Out of Creditors Committee RESIDENTIAL CAPITAL: Foreclosure Review Could Cost Up to $250MM REVEL ENTERTAINMENT: Bank Debt Trades at 22% Off REYNOLDS GROUP: Moody's Lowers CFR/PDR to 'B3'; Outlook Stable REYNOLDS GROUP: S&P Lowers CCR to 'B' on Low Earnings Growth ROUNDY'S SUPERMARKETS: S&P Cuts CCR to 'B' on Weak Credit Metrics SAAB CARS: Creditors Demand Info on Ally's $61-Mil. Claim SAN BERNARDINO: City Council Approves Emergency Budget SAN BERNARDINO: Rust Consulting Approved Claims and Noticing Agent SEDONA DEVELOPMENT: Specialty Trust Wants Ch. 11 Trustee SKY GROWTH: Moody's Assigns 'B2' CFR/PDR; Outlook Stable SOLYNDRA LLC: Judge Clears to Poll Creditors on Chapter 11 Plan SOLYNDRA LLC: Reaches Deal on Payment of Tax Consulant Fees SOUTHEAST BANKING: Ch. 11 Trustee Seeks Case Conversion SPRINGLEAF FINANCE: Fitch Affirms Junk Rating on Sr. Unsec. Debt SUPERVALU INC: Store Closure No Impact on Moody's 'B3' CFR TERRABON INC: Files for Chapter 7 Bankruptcy Protection THOR INDUSTRIES: Sept. 17 Hearing on Tennessee Cash Collateral TONGJI HEALTHCARE: Had $25,000 Net Loss in Second Quarter TRIAD GUARANTY: Asks for Amendments to Insurance Dept. Order UNIGENE LABORATORIES: G. Mayes Named Pres. and General Counsel UNITED AMERICAN: Had $1.6 Million Net Loss in Second Quarter USG CORP: Fitch Affirms 'B-' Issuer Default Rating VALEANT PHARMACEUTICALS: S&P Retains 'BB' CCR; Outlook Stable VALENCE TECHNOLOGY: Gets OK to Use Cash Collateral Until Dec. 31 VIVARO CORP: Files for Chapter 11 Bankruptcy Protection VOICE ASSIST: William Osmundsen Named New CFO and Treasurer WALLDESIGN INC: Wants Until Oct. 30 to Propose Chapter 11 Plan WATERLOO RESTAURANT: Romano's Macaroni Acquires Four Franchisees WBG-PSS MERGER: Moody's Assigns 'B2' CFR/PDR; Outlook Stable WESTERLY HOSPITAL: S&P Lowers Rating on $8.6-Mil. Bonds to 'D' WOOTON GROUP: Proposes to Employ Jonathan Hayes as Counsel WOOTON GROUP: Seeks Access to Cash Collateral Until Dec. 31 * Moody's Says US Commercial P&C Insurance Outlook Remains Stable * Chadbourne Signs 20-Year Lease for New NY Headquarters * Lisa M. Goldberg Joins Foley & Mansfield * Jennings Strouss Gains Six New Attorneys * Large Companies With Insolvent Balance Sheets ********* ABOUND SOLAR: Trustee Has Permission to Auction Assets ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Abound Solar Inc. will have its assets sold at auctions this month and in October under authority granted last week by the U.S. Bankruptcy Court in Delaware. According to the report, the assets of the Longmont, Colorado- based company will be auctioned by a joint venture between Great American Group LLC and Branford Group. They will receive expense reimbursement up to $156,000 plus a fee of 60% of the so-called buyer's premium. If the assets are sold in bulk rather than piecemeal, the fee will be 5% of the gross sale price. About Abound Solar Abound Solar Inc. filed for Chapter 7 bankruptcy liquidation (Bankr. D. Del. Case No. 12-11972) on July 2, 2012. The company disclosed assets of $136.1 million and debt totaling $82 million. Abound Solar was awarded a $400 million loan guarantee from the U.S. Department of Energy in July 2010 to build a facility in Indiana and expand its Longmont facility. Abound borrowed about $70 million from the DOE loan guarantee. Abound halted production in February from the one plant in Colorado. A second was planned in Indiana. Abound Solar joined fellow panel makers Solyndra LLC and Evergreen Solar Inc. in the Delaware bankruptcy court. AFA INVESTMENT: OK'd to Pay Bonuses to Non-Insider Key Employees ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized AFA Investment Inc., et al., to offer and pay retention bonuses to non-insider key employees. As reported in the Troubled Company Reporter on Aug. 22, 2012, 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 (TSAs). 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 sought 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 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. ALKERMES INC: Moody's Upgrades CFR/PDR to 'B1'; Outlook Positive ---------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family Rating and Probability of Default Rating of Alkermes, Inc. to B1 from B2. At the same time, Moody's assigned a B1 to the proposed $375 million term loan and affirmed the SGL-2 Speculative Grade Liquidity Rating. Alkermes, Inc. is a subsidiary of Alkermes plc (collectively referred to as "Alkermes"). Following these actions, the rating outlook remains positive. Rating assigned: $375 million 1st lien senior secured term loan at B1 (LGD3, 49%) Ratings upgraded: Corporate Family Rating to B1 from B2 Probability of Default Rating to B1 from B2 Ratings upgraded and expected to be withdrawn at the close of refinancing transaction: $308 million 1st lien senior secured term loan to Ba3 (LGD3, 33%) from B1 (LGD3, 33%) $138 million 2nd lien senior secured term loan to B3 (LGD3, 81%) from Caa1 (LGD5, 85%) Rating affirmed: SGL-2 Speculative Grade Liquidity Rating Proceeds from the proposed $375 million 1st lien term loan will be used to refinance all of the company's existing debt. Moody's also upgraded the existing first lien term loan to Ba3 from B1 and the second lien term loan to B3 from Caa1. Upon the completion of the refinancing and final review of documentation, Moody's will withdraw the ratings on the existing first and second lien term loans. "The upgrade reflects successful integration of the Elan Drug Technologies (EDT) business, good revenue growth prospects, and deleveraging occurring as part of the refinancing transaction," stated Michael Levesque, Moody's Senior Vice President. "Continuation of the positive outlook reflects expectations of good revenue growth from Alkermes' key products, supported by the approval of Bydureon in January 2012, and the potential for future deleveraging," continued Levesque. Ratings Rationale The B1 Corporate Family Rating reflects Alkermes' limited size and scale relative to pharmaceutical peers, its high reliance on collaboration partners on key products, and its somewhat high debt/EBITDA of approximately 3.7 times pro forma for the refinancing using Moody's adjustments. The company still has high concentration among its top 5 products and its late-stage pipeline is concentrated in its schizophrenia candidate ALKS 9070. At the same time, the ratings are supported by Alkermes' proprietary drug delivery technologies, its high operating margins, good growth prospects over the next several years and a decreasing reliance on its key revenue driver Risperdal Consta. The outlook remains positive based on Moody's expectation that improving profitability and the potential for additional debt repayment will result in stronger credit metrics over time. The approval of Bydureon in type 2 diabetes and the commercial backing of the Bristol-Myers/AstraZeneca collaboration both contribute to the company's momentum. Moody's could upgrade Alkermes' ratings if debt/EBITDA is sustained below 3.0 with free cash flow to debt above 20%. Conversely, Moody's could downgrade the ratings if leverage is sustained above 4.0 times or if free cash flow to debt falls below 5%. Such a scenario could arise if one of Alkermes' key products is removed from the market or if the company engages in large debt-financed M&A. The principal methodology used in rating Alkermes, Inc. was the Global Pharmaceutical Industry published in October 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Alkermes, Inc. is a U.S. subsidiary of Dublin, Ireland-based Alkermes plc ("Alkermes"). Alkermes is a specialty biopharmaceutical company that develops long-acting medications for the treatment of central nervous system (CNS) disorders, alcohol and opioid dependence and diabetes. Alkermes was formed through the 2011 merger of Alkermes, Inc. and Elan Drug Technologies. For the twelve months ended December 31, 2011, pro forma revenues were approximately $500 million. ALKERMES PLC: S&P Gives 'BB-' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Ireland-based Alkermes plc. "In conjunction with this assignment, we withdrew our 'B+' corporate credit rating on Alkermes Inc., a wholly owned subsidiary of Alkermes plc. The outlook is stable," S&P said. "At the same time, we assigned a 'BB' issue-level rating to Alkermes Inc.'s proposed $375 million first-lien term loan. The first-lien term loan has a recovery rating of '2', indicating prospects for a substantial (70%-90%) recovery in the event of payment default. Proceeds from the $375 million first-lien term loan, along with a $75 million debt reduction, will refinance both the existing first- and second-lien debt. We will withdraw the 'BB' issue-level and '1' recovery rating on the existing first-lien term loan and will withdraw the 'B' issue-level and '5' recovery rating on the existing second-lien term loan upon the close of the $375 million first-lien term loan," S&P said. "The rating reflects Alkermes' success in integrating Elan Drug Technologies and the subsequent growth of Alkermes' expanded portfolio of products," said Standard & Poor's credit analyst Michael Berrian. "This yielded a financial performance in fiscal year ended March 2012 that exceeded our expectations. Pro forma revenue growth of 10% and EBITDA of $121 million resulted in continued free cash flow generation that is enabling Alkermes to reduce debt by $75 million. At June 30, 2012, leverage was 3.9x. Following the refinancing and debt reduction we expect leverage to decline further to 3.4x." "Our rating on Alkermes plc reflects a 'weak' business risk profile characterized by a relatively small portfolio of products, product concentration, the absence of scale, and susceptibility to the marketing priorities of their partners, and manufacturing concentration. The 'intermediate' financial risk profile reflects our expectation that leverage and funds from operations to total debt will improve to about 2.5x and about 35%, respectively, during the fiscal year ending March 31, 2013," S&P said. "Our stable outlook on Alkermes reflects our expectation of low- single-digit revenue growth in the fiscal year ending March 31, 2013 and high-single- to low-double-digit growth in the fiscal year ending March 31, 2014. We also expect the company to continue generating sufficient free operating cash flow that it will use for further debt reduction," S&P said. "We could raise the rating if Alkermes reduces leverage at a faster pace than we currently expect, and commits to preserving the stronger credit measures. This would arise from a combination of greater debt reduction and better-than-expected EBITDA growth because of higher sales of Vivitrol and recently launched Bydureon," S&P said. "We could lower the rating if revenues and EBITDA grow at a slower rate than we expect, possibly from decreased market acceptance of Vivitrol or slower-than-expected growth of Bydureon, Ampyra, or Invega Sustenna. In our opinion, this could result in leverage increasing to 4x or more, a level of financial risk that we consider aggressive," S&P said. AMERICAN ARCHITECTURAL: Asks Court's Permission to Auction Assets ----------------------------------------------------------------- Penny Stacey at The USGlass New Network reports that American Architectural Inc. has requested permission from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to sell its assets, including several outstanding subcontracts, via an auction process. The report, citing court documents, says the company had a backlog of approximately 13 subcontracts, with revenues in excess of $29 million, at the time of the bankruptcy filing. Seven of the projects have been completed, leaving six "that have work to be performed and will be available for sale at the auction." Among these is a $7.1 million project at Carnegie 57 in New York; a $3.9 million project at One World Trade Center; a $15.4 million on the Cablenet at One World Trade Center; a $6.2 million project at the World Trade Center Path Hall; a $3.8 million project at World Trade Center Tower 4; and a $685,000 project on the World Trade Center Path Hall Elevator. The report adds the company previously had been in negotiations with general contractor Skanska USA about the Path Hall project. "[AAI] has analyzed the cost of completing the subcontracts, the lack of adequate financing for the completion of all of these projects, the inability of [Diamond Indemnity Trust] to provide financial assistance under the surety bonds, and the overall existing debt, and have determined that a prompt sale of the assets as a 'going concern' is in the best interest of the debtors and their estates," the report quotes AAI as stating. The report relates Company officials said the only items not up for sale are its cash, pre-petition litigation claims, and claims under Chapter 5 of the bankruptcy code. "The debtors also believe that offering the assets for sale at the auction will greatly enhance their ability to reorganize the affairs," the report quotes the Company as noting. The report says, if the auction is approved and held, AAI officials say they intend to file a plan (upon the closing of an asset sale) for distribution of the proceeds from the sale. The report adds the court had not yet ruled on the motion. About American Architectural and Advanced Acquisitions Bensalem, Pennsylvania-based American Architectural, Inc., and Advanced Acquisitions, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D. Pa. Case Nos. 12-15818 and 12-15819) on June 15, 2012. Judge Magdeline D. Coleman oversees the case. Maschmeyer Karalis P.C. serves as the Debtors' general bankruptcy counsel. Douglas Ziegler LLC serves as accountants. American Architectural provides quality building enclosures. Advanced Acquisitions is the beneficial owner of a 98,000 square feet facility in Bensalem, which houses AAI's offices and manufacturing plant. AAI has 49 employees. AAI completed work on many high profile projects in New York including, the AOL/Time Warner facility at Columbus Circle, the Lincoln Center, the Museum of Arts and Design, the New York Historical Society, and the JetBlue Terminal 5 at JFK International Airport, to name just a few of noteworthy projects. Recently, AAI completed the east coast's largest canopy for Goldman Sachs and has recently closed its fourth major World Trade Center rebuild project. The petitions were signed by John Melching, president and CEO. The Debtors listed assets of $3,874,952 and liabilities of $2,912,684. AMERICAN REALTY: S&P Puts 'BB' CCR on Watch on Realty Income Deal ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB' corporate credit rating on American Realty Capital Trust Inc. (ARCT) on CreditWatch with positive implications following a proposal by higher-rated Realty Income Corp. to acquire the company and all of its outstanding shares. ARCT does not currently have any rated debt. "The CreditWatch placements follow the announcement that ARCT (BB/Stable/--) and Realty Income (BBB/Stable/--) have signed a definitive agreement under which Realty Income will acquire all of the outstanding shares of ARCT in a transaction valued at approximately $2.95 billion," said credit analyst Eugene Nusinzon. "We expect Realty Income to fund the acquisition by issuing $1.9 billion of its common stock to ARCT, assuming approximately $526 million of ARCT's secured debt, and immediately repaying approximately $574 million of ARCT's outstanding debt and related transaction expenses." "The boards of directors of both companies have approved the transaction. Pending shareholder approval (from both companies), we expect the acquisition to close during the fourth quarter of 2012 or early in the first quarter of 2013," S&P said. "The CreditWatch action reflects the likelihood that we would raise ARCT's corporate credit rating to that of Realty Income if the acquisition closes as expected. We would likely subsequently withdraw our corporate credit rating on ARCT based on our expectation that ARCT will be fully integrated into Realty Income. We plan to resolve the CreditWatch placement during the fourth quarter of 2012 or early in the first quarter of 2013 after the results of shareholder votes have been announced," S&P said. AMERICAN AXLE: Inks $550MM Underwriting Agreement with JP Morgan ---------------------------------------------------------------- On Sept. 4, 2012, American Axle & Manufacturing, Inc., a wholly owned subsidiary of American Axle & Manufacturing Holdings, Inc., and the subsidiary guarantors, entered into an underwriting agreement with J.P. Morgan Securities LLC, as the representative of the several underwriters, to sell $550 million aggregate principal amount of 6.625% senior notes due 2022 in an offering registered pursuant to the Securities Act of 1933, as amended. The Notes will be guaranteed on a senior unsecured basis by the Company and certain of AAM's current and future subsidiaries. A copy of the Underwriting Agreement is available for free at: http://is.gd/xpJ9jB About American Axle Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- manufactures, engineers, designs and validates driveline and drivetrain systems and related components and chassis modules for light trucks, sport utility vehicles, passenger cars, crossover vehicles and commercial vehicles. The Company's balance sheet at June 30, 2012, showed $2.44 billion in total assets, $2.83 billion in total liabilities and a $394.7 million total stockholders' deficit. * * * In January 2012, Fitch Ratings has affirmed the 'B+' Issuer Default Ratings (IDRs) of American Axle & Manufacturing. Fitch expects leverage to trend downward over the intermediate term, however, as the company gains traction on its new business wins. Looking ahead, Fitch expects free cash flow to be relatively weak, but positive, in 2012 with the steep ramp-up in new business and as the company continues to make investments in both capital assets and research and development work to support growth opportunities in its customer base and product offerings. Beyond 2012, free cash flow is likely to strengthen meaningfully as the new programs coming on line in the near term begin to produce higher levels of cash. AMERICAN WEST: Okayed to Pay $500,000 to Critical Vendors --------------------------------------------------------- The Hon. Mike K. Nakagawa of the Bankruptcy Court for the District of Nevada authorized American West Development, Inc., to honor and pay additional prepetition claims of certain critical vendors, in an aggregate amount not to exceed $500,000. About American West American West Development, Inc. -- fdba Castlebay 1, Inc., et al. -- is a homebuilder in Las Vegas, Nevada, founded on July 31, 1984. Initially, AWDI was known as CKC Corporation, but later changed its name. AWDI filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 12-12349) on March 1, 2012. Judge Mike K. Nakagawa presides over the case. Brett A. Axelrod, Esq., and Micaela Rustia Moore, Esq., at Fox Rothschild LLP, serve as AWDI's bankruptcy counsel. Nathan A. Schultz, P.C., is AWDI's conflicts counsel. AWDI hired Garden City Group as its claims and notice agent. American West disclosed $55.39 million in assets and $208.5 million in liabilities as of the Chapter 11 filing. James L. Moore, as future claims representative in the Chapter 11 case of American West Development, Inc., tapped the law firm of Field Law Ltd. as his counsel. The Court will convene a hearing on Sept. 25, 2012, to consider the confirmation of the Debtor's Plan which was hammered out with secured lenders owed $177.5 million. The lenders will take ownership and receive a new $49.6 million mortgage in return for existing debt. They will invest $10 million to be used as working capital to make payments under the plan. AMES DEPARTMENT: Proskauer Rose Approved as Substitute Attorneys ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Ames Department Stores' to employ Proskauer Rose LLP as substitute attorneys nunc pro tunc to May 14, 2012. The Debtors' former attorney, Dewey and LeBoeuf, filed for Chapter 11 protection on May 28, 2012. Proskauer Rose personnel's hourly rates are: Hourly Rate ----------- Partner $675 to $1,050 Of Counsel $640 to $825 Associate $295 to $750 Paraprofessionals $165 to $315 About Ames Department Stores Rocky Hill, Connecticut-based Ames Department Stores was founded in 1958. At its peak, Ames operated 700 stores in 20 states, including the Northeast, Upper South, Midwest and the District of Columbia. In April 1990, Ames filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. In Ames I, the retailer closed 370 stores and emerged from chapter 11 on Dec. 30, 1992. Ames filed a second bankruptcy petition under Chapter 11 (Bankr. S.D.N.Y. Case No. 01-42217) on Aug. 20, 2001. Togut, Segal & Segal LLP; Weil, Gotshal & Manges; and Storch Amini Munves PC; Cadwalader, Wickersham & Taft LLP. When the Company filed for protection from their creditors, they reported $1,901,573,000 in assets and $1,558,410,000 in liabilities. The Company closed all of its 327 department stores in 2002. Ames and its affiliates filed a consolidated Chapter 11 Plan, and a related Disclosure Statement explaining the Plan with the Court on Dec. 6, 2004. A full-text copy of Ames' Chapter 11 Plan is available at no charge at: http://bankrupt.com/misc/ames_chapter_11_plan.pdf and a full-text copy of Ames' Disclosure Statement is available at no charge at: http://bankrupt.com/misc/ames'_disclosure_statement.pdf A hearing to determine the adequacy of the Disclosure Statement explaining Ames' Plan has not yet been scheduled. AOT BEDDING: Moody's Assigns 'B2' Corp. Family Rating ----------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating to AOT Bedding Super Holdings LLC and a B1 rating to its proposed $1.233 billion Senior Secured Term Loan B. The rating outlook is stable. On August 5, 2012, Advent International announced that it agreed to acquire a majority interest in AOT, the parent company of National Bedding Co., the majority owner and licensee of Serta, and Simmons Bedding Co. for approximately $3 billion. At the completion of the transaction, the company will be renamed Serta Simmons Holdings, LLC. The transaction will be funded with a $1.2 billion senior secured term loan, $725 million senior unsecured bridge loan and $1.1 billion of equity (with roughly 2/3rd coming from Advent). Around $700 million of net debt will be repaid with the proceeds. The bridge loan, which matures in one year, is expected to be replaced by a senior unsecured bond prior to close. If the senior unsecured bond cannot be issued, the bridge loan will automatically be converted to an unsecured term loan or unsecured exchange note at the option of the holder. All of the existing ratings for both Serta and Simmons will be withdrawn at closing. "The transaction will leave AOT materially levered with debt to EBITDA of around 7.5 times," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. But Moody's thinks leverage will steadily decline to below 6 times by the end of 2013 owing to a combination of increased earnings and debt repayment. "However, revenue and earnings growth for the remainder of 2012 may be weaker than pro-forma growth generated in the first six months, despite the continued success of iComfort and the premium Beautyrest brands given increased competition," Cassidy said. "In addition, the longer term financial policies of Advent are vague," he noted. The following ratings were assigned: Corporate Family Rating at B2; Probability of Default Rating at B2; $1.233 billion Senior Secured Term Loan B due September 2019 at B1 (LGD 3, 37%); Ratings Rationale AOT's B2 Corporate Family Rating reflects its high financial leverage with debt to EBITDA over 7 times, but also its good cash generating abilities, solid scale with revenue over $2 billion and sizeable market share. While financial leverage is high for a B2 consumer durable company, Moody's thinks debt to EBITDA will be below 6 times by the end of 2013 as earnings increase and AOT pays down debt with excess cash flow (as defined). The ratings also reflect the volatility in profitability and cash flows experienced during the economic downturns and by the uncertainty in discretionary consumer spending, especially for middle and low income consumers. The rating is further constrained by the uncertain financial policies of Advent, whose long term plans for leverage are unclear. The ratings benefit from AOT's strong pro- forma operating margins with EBITA to revenue over 10% and good expected interest coverage of around 2 times. Serta and Simmons' strong market position, well known brand names, the recent strength of Serta's iComfort brand, and the mattress industry's historically strong fundamentals, anchor the rating. The stable outlook reflects Moody's view that AOT will steadily reduce and sustain debt to EBITDA below 6 times by the end of 2013 and that demand will remain strong for premium/specialty mattresses and slowly improve for mid tier mattresses. Ratings could be downgraded if AOT does not reduce and sustain debt to EBITDA to below 6 times by the end of 2013. Other key credit metrics which could drive a downgrade would be EBITA to interest approaching 1 time (currently around 2 times) or EBITA margins sustained well below 10%. AOT's ratings could be upgraded if its operating performance significantly improves on a sustained basis and financial leverage materially decreases. Key credit metrics necessary for an upgrade would be debt to EBITDA consistently around 4.5 times, maintaining low double digit EBITA margins and EBITA to interest sustained above 2.5 times. The principal methodologies used in this rating were Global Consumer Durables 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. AOT Bedding Super Holdings is the parent company of Simmons Bedding Company and National Bedding Company, which does business as Serta. Both Simmons and Serta manufacture, distribute and sell conventional bedding products, including mattresses and box springs, as well as specialty bedding products which include latex, gel and visco-elastic mattresses. Proforma revenue for the twelve months ended June 30, 2012 for the combined companies was approximately $2.2 billion. AOT BEDDING: S&P Gives 'B' Corporate Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Rating Services assigned its 'B' corporate credit rating to Hoffman Estates, Ill.-based AOT Bedding Super Holdings LLC, the existing parent company to Serta International Holdco LLC (B/Stable/--) and Simmons Bedding Co. (B/Stable/--). The outlook is stable. "At the same time, we assigned a 'B+' issue-level rating to AOT Bedding's proposed $1.233 billion senior secured term loan B due 2019. The recovery rating is '2', indicating our expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. We also assigned a 'CCC+' issue-level rating to AOT Bedding's proposed $725 million senior unsecured notes due 2020, with a recovery rating of '6', indicating our expectation for negligible (0% to 10%) recovery in the event of default. The company's proposed $225 million asset-based lending (ABL) facility due 2017 will not be rated. All ratings are subject to review upon receipt of final documentation," S&P said. "Advent International Corp. will use the new $1.233 billion term loan B and $725 million senior unsecured notes, along with $760 million new equity and $370 million of rollover equity from the company's current owners, to purchase a majority stake in the company for approximately $3 billion, refinance existing debt, and pay transaction fees. Upon the close of the transaction, AOT Bedding Super Holdings LLC will change its name to Serta Simmons Holdings LLC. Following the repayment of all debt at Serta International Holdco LLC and Simmons Bedding Co. at the close of this transaction, we will withdraw all our ratings on these two entities," S&P said. "The ratings on AOT Bedding reflect our view that the company has a 'weak' business risk profile and a 'highly leveraged' financial risk profile," S&P said. "Although we believe economic and retail conditions remain somewhat uncertain and the industry will experience some cost inflation over the near term, we believe AOT's credit measures will strengthen as profitability improves and the company repays debt," said Standard & Poor's credit analyst Rick Joy. "We could consider raising the ratings if the company is able to further strengthen its operating performance, repay debt, and improve credit measures," said Mr. Joy. "Alternatively, we could consider a lower rating if the company experiences operating difficulties, such that credit measures substantially deteriorate, the company's liquidity is materially pressured, or the company pursues a more aggressive financial policy, including debt- financed dividends." AUTO CARE MALL: Bank Squares Off With U.S. Trustee on Receiver -------------------------------------------------------------- August B. Landis, the Acting United States Trustee for Region 17, is opposing the request of Bank of Marin, a secured creditor of Auto Care Mall of Fremont, Inc., that seeks to (i) excuse a state court receiver from compliance with her duties as a custodian to turn over and account for estate assets, and (ii) grant authority for the state court receiver to exercise case administration powers vested exclusively in trustees appointed under applicable provisions of the Bankruptcy Code. Bank of Marin has asked the Bankruptcy Court to relieve Susan L. Uecker, the receiver for the Debtor's assets, from the turnover requirements under 11 U.S.C. Sec. 543. Bank of Marin also has asked the Court to grant the receiver authority to obtain credit and incur debt, and to terminate the automatic stay so the receiver can exercise all of her powers as set forth in a superior court order appointing the receiver. Bank of Marin said the Debtor's case mandates the retention of the receiver, and that the Debtor's bankruptcy filing must not stymie the Superior Court's desire to have an independent receiver take possession, custody and control of the real property. The bank said the Debtor is attempting to thwart the efforts of the Superior Court to address the Debtor's improprieties, including the Debtor's failure to pay all real property taxes, failure to account the tenant security deposits, and misuse of common area maintenance charges. Edwina E. Dowell, Esq., attorney for the Acting United States Trustee, argues the bank's request impermissibly seeks to allow the state court receiver to continue to act as a receiver for an indefinite period of time during the administration of the bankruptcy case. The motion also seeks to improperly cloak the state court receiver with power to obtain credit, use cash collateral, and incur debt. Those powers, Ms. Dowell argues, are expressly conferred upon, and are vested exclusively in, trustees appointed under controlling provisions of the Bankruptcy Code. After appropriate consideration of the best interests of all creditors of the estate, Ms. Dowell says the Bankruptcy Court should either (a) dismiss the bankruptcy case; (b) suspend all proceedings in the bankruptcy case until the receivership case has reached its conclusion, at which point the Court will be able to readily determine whether further bankruptcy proceedings are warranted; or (c) require the Receiver to account for and turn over all property of the estate to the trustee (or to the debtor- in-possession, if no trustee has been appointed). About Auto Care Mall of Fremont Auto Care Mall of Fremont, Inc., in San Jose, California, filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 12-56050) on Aug. 15, 2012. Judge Stephen L. Johnson presides over the case. The Law Office of Patrick Calhoun, Esq., serves as the Debtor's counsel. The Debtor scheduled $13,400,000 in assets and $11,119,045 in liabilities. A copy of the Company's list of its 11 unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/canb12-56050.pdf The petition was signed by Gina Baumbach, vice president. On May 18, 2012, at the behest of the secured lender, Bank of Marin, the Alameda County Superior Court of the State of California appointed Susan L. Uecker as receiver to the Debtor's real property commonly known as 40851-40967 Albrae Street, in Fremont, California. The Superior Court appointed the receiver to address the Debtor's mismanagement and misappropriation of the bank's cash collateral. The property is improved with four single story warehouse buildings totaling 38,226 square feet and is occupied exclusively with auto service related businesses. The property consists of 15 units, three of which are currently vacant. The property generates monthly rents totaling roughly $34,492 in addition to common area maintenance charges totaling $8,235. According to Bank of Marin, the Debtor owes the bank roughly $6.5 million under two prepetition promissory notes. The Debtor's Schedule D identifies a judgment lien against the property held by Bank of America to secure a $6 million claim scheduled by the Debtor as a non-contingent, liquidated, and undisputed held by Bank of America. The Debtor's Schedules D identifies non- contingent, liquidated and undisputed claims totaling $11.105 million that encumber the property, which the Debtor values at $7.4 million. Bank of Marin is represented in the case by: Neil J. Rubenstein, Esq. Craig C. Chiang, Esq. BUCHALTER NEMER P.C. 55 Second Street, Suite 1700 San Francisco, CA 94105-3493 Tel: 415-227-0900 Fax: 415-227-0770 E-mail: cchiang@buchalter.com AUTO CARE MALL: Status Conference Set for Oct. 4 ------------------------------------------------ The Bankruptcy Court has scheduled a Status Conference in the Chapter 11 case of Auto Care Mall of Fremont, Inc., for Oct. 4, 2012, at 9:30 a.m. at San Jose Courtroom 3099. Auto Care Mall of Fremont, Inc., in San Jose, California, filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 12-56050) on Aug. 15, 2012. Judge Stephen L. Johnson presides over the case. The Law Office of Patrick Calhoun, Esq., serves as the Debtor's counsel. The Debtor scheduled $13,400,000 in assets and $11,119,045 in liabilities. A copy of the Company's list of its 11 unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/canb12-56050.pdf The petition was signed by Gina Baumbach, vice president. On May 18, 2012, at the behest of the secured lender, Bank of Marin, the Alameda County Superior Court of the State of California appointed Susan L. Uecker as receiver to the Debtor's real property commonly known as 40851-40967 Albrae Street, in Fremont, California. The Superior Court appointed the receiver to address the Debtor's mismanagement and misappropriation of the bank's cash collateral. The property is improved with four single story warehouse buildings totaling 38,226 square feet and is occupied exclusively with auto service related businesses. The property consists of 15 units, three of which are currently vacant. The property generates monthly rents totaling roughly $34,492 in addition to common area maintenance charges totaling $8,235. According to Bank of Marin, the Debtor owes the bank roughly $6.5 million under two prepetition promissory notes. The Debtor's Schedule D identifies a judgment lien against the property held by Bank of America to secure a $6 million claim scheduled by the Debtor as a non-contingent, liquidated, and undisputed held by Bank of America. The Debtor's Schedules D identifies non- contingent, liquidated and undisputed claims totaling $11.105 million that encumber the property, which the Debtor values at $7.4 million. Bank of Marin is represented in the case by Neil J. Rubenstein, Esq., and Craig C. Chiang, Esq., at Buchalter Nemer P.C. AUTO CARE MALL: Sec. 341 Creditors' Meeting on Wednesday -------------------------------------------------------- The Office of the U.S. Trustee in San Jose, California, will hold a First Meeting of Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 case of Auto Care Mall of Fremont, Inc., on Wednesday, Sept. 12 at 10:30 AM at San Jose Room 268. Proofs of claim are due in the case by Dec. 11. About Auto Care Mall of Fremont Auto Care Mall of Fremont, Inc., in San Jose, California, filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 12-56050) on Aug. 15, 2012. Judge Stephen L. Johnson presides over the case. The Law Office of Patrick Calhoun, Esq., serves as the Debtor's counsel. The Debtor scheduled $13,400,000 in assets and $11,119,045 in liabilities. A copy of the Company's list of its 11 unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/canb12-56050.pdf The petition was signed by Gina Baumbach, vice president. On May 18, 2012, at the behest of the secured lender, Bank of Marin, the Alameda County Superior Court of the State of California appointed Susan L. Uecker as receiver to the Debtor's real property commonly known as 40851-40967 Albrae Street, in Fremont, California. The Superior Court appointed the receiver to address the Debtor's mismanagement and misappropriation of the bank's cash collateral. The property is improved with four single story warehouse buildings totaling 38,226 square feet and is occupied exclusively with auto service related businesses. The property consists of 15 units, three of which are currently vacant. The property generates monthly rents totaling roughly $34,492 in addition to common area maintenance charges totaling $8,235. According to Bank of Marin, the Debtor owes the bank roughly $6.5 million under two prepetition promissory notes. The Debtor's Schedule D identifies a judgment lien against the property held by Bank of America to secure a $6 million claim scheduled by the Debtor as a non-contingent, liquidated, and undisputed held by Bank of America. The Debtor's Schedules D identifies non- contingent, liquidated and undisputed claims totaling $11.105 million that encumber the property, which the Debtor values at $7.4 million. Bank of Marin is represented in the case by Neil J. Rubenstein, Esq., and Craig C. Chiang, Esq., at Buchalter Nemer P.C. BEALE STREET BLUES: No Ruling Yet on Mirage Revenues ---------------------------------------------------- Las Vegas Review Journal reports that no ruling had come from U.S. Bankruptcy Court Judge Mike Nakagawa on an issue that could prove critical for the B.B. King's Blues Club in The Mirage. The report relates Judge Nakagawa has said he would issue a written order by the end of Wednesday. According to the report, the issue involves whether The Mirage can subtract money from B.B. King's tabs that patrons charge to their rooms in order to pay down debts incurred prior to the club's Chapter 11 bankruptcy filing in February 2011. The Mirage had started doing this in June. The report notes B.B. King's attorney said that if this was allowed to continue, it would probably run out of money by mid- November. At that point, it would need a bailout from the Memphis-based parent company or close. Beale Street Blues Company Las Vegas LLC owns the B.B. King's Blues Club restaurant and live music club at the Mirage hotel- casino in Las Vegas. Beale Street filed a Chapter 11 petition (Bankr. W.D. Tenn. Case No. 11-21619) in Memphis, Tennessee, on Feb. 16, 2011. Jonathan E. Scharff, Esq., at Harris Shelton Hanover Walsh, PLLC, in Memphis, serves as counsel to the Debtor. Beale Street disclosed assets of $2.5 million and liabilities of $3.8 million. The Las Vegas club and restaurant is part of a Memphis-based group of B.B. King's clubs named for the music legend. The other B.B. King's -- which are not part of the bankruptcy -- are in Memphis, Nashville, Orlando and West Palm Beach, Fla. BEAU VIEW: Ordered to File Disclosure Statement & Plan by Sept. 28 ------------------------------------------------------------------ As reported in the TCR on Sept. 5, 2012, Beau View of Biloxi, LLC, according to its case docket, and the U.S. Trustee for Region 5 reached an agreement resolving the UST's second motion to dismiss or convert the Debtor's Chapter 11 case to one under Chapter 7 of the Bankruptcy Code. On Aug. 22, 2012, U.S. Bankruptcy Judge Katharine M. Samson approved the agreement between the parties, to wit: 1. On or before Sept. 15, 2012, the Debtor will pay all delinquent quarterly UST fees to the UST; 2. On or before Sept. 28, 2012, the Debtor will file a disclosure statement and a confirmable plan of reorganization; and 3. If the Debtor fails to comply with any terms of this order, the case will convert to a Chapter 7 proceeding without further notice or hearing. About Beau View of Biloxi Beau View of Biloxi, LLC, filed a Chapter 11 petition (Bankr. S.D. Miss. Case No. 12-50141) on Jan. 26, 2012. The Mandeville, Louisiana-based debtor disclosed that it is a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101 (51B) with assets and debts of $10 million to $50 million. Judge Katharine M. Samson presides over the case. J. Walter Newman, IV, Esq., at Newman & Newman, serves as the Debtor's counsel. The petition was signed by Richard L. Landry, III, designated representative. BERNARD L. MADOFF: ABN Asks Judge to Give Broad Swap Protection --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that ABN Amro Bank NV began the process last week for U.S. District Judge Jed Rakoff to decide how far the so-called safe harbor in bankruptcy stretches to protect financial institutions from suits by bankruptcy trustees that aren't expressly within the scope of the safe harbor. The decision is one of many that Judge Rakoff is deciding in the liquidation of Bernard L. Madoff Investment Securities Inc. According to the report, Madoff trustee Irving Picard filed suit in bankruptcy court, contending the bank's affiliate in Ireland was the subsequent recipient of $267 million initially paid out by the Madoff firm to a feeder fund. At the bank's request, Judge Rakoff removed the suit from bankruptcy court to decide threshold questions that could result in dismissal of the suit. The bank filed papers seeking dismissal near the end of last week. The report relates that the bank explained how it had swap transactions with a feeder fund and that the money traceable to Madoff was paid pursuant to the swap. The bank believes the safe harbor requires dismissal because in Section 546(g) of the U.S. Bankruptcy Code precludes a trustee from suing to recover a payment received in a swap. Although the trustee won't file his opposition papers until Sept. 25, Mr. Picard has already gone on record with technical arguments explaining why the bank isn't automatically entitled to dismissal on account of the swap. The report notes that Mr. Picard contends that the bank is being sued as a subsequent recipient of fraudulently transferred funds and that the so called safe harbor for swaps only protects an initial recipient. The bank says the distinction doesn't matter because Congress intended to give the widest possible protection to parties involved in swaps. The bank will be filing reply papers on Oct. 5 before Judge Rakoff decides who's right and who's wrong. Whoever wins, the issue is likely to be appealed to the U.S. Court of Appeals, joining other Rakoff decisions already on appeal. The case involving ABN Amro and swaps is part of Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, 12-mc-00115, U.S. District Court, Southern District of New York (Manhattan). 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. BJ'S WHOLESALE: S&P Cuts CCR to 'B' on Refinancing, Dividend ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on BJ's Wholesale Club Inc. to 'B' from 'B+'. The outlook is stable. "We also lowered the existing ratings on the company's first-lien term loan to 'B' from 'B+', and on the company's second-lien term loan to 'CCC+' from 'B-'. The recovery ratings on these loans remain unchanged at '3' and '6', respectively. We will withdraw the ratings on the existing facilities upon completion of the proposed refinancing," S&P said. "At the same time, we assigned a 'B' issue-level rating with a '3' recovery rating to the company's $1.2 billion first-lien term loan, and a 'CCC+' issue-level rating with a '6' recovery rating to the $400 million second-lien term loan," S&P said. "We do not rate the company's $900 million asset-based loan (ABL) revolving credit facility, of which about $395 million will be outstanding when the transaction closes," S&P said. "BJ's plans to use the debt facilities, together with about $282 million proceeds from a sale-leaseback transaction, to refinance existing term loans and pay a dividend of nearly $645 million to its shareholders," S&P said. "The ratings on BJ's reflect its 'fair' business risk profile and 'highly leveraged' financial risk profile. The proposed transaction adds a moderate amount of debt to an already highly leveraged balance sheet. At July 31, 2012, the pro forma ratio of total debt to EBITDA increases to the high-7x area from the high- 6x area before the transaction, while EBITDA coverage of interest weakens to about 1.8x from about 2x. In addition, increased interest expense, along with the higher rent payment resulting from the sale-leaseback, weaken BJ's cash flow generation," S&P said. "We anticipate that operational stability and modest profitability gains will drive modest improvement of these credit measures," said Standard & Poor's credit analyst Mariola Borysiak. "Because we view the company's financial policies as very aggressive and considering our view of its business risks, an upgrade could be possible if BJ's reduces leverage such that debt to EBITDA is sustained in the high- to mid-6x area. We could consider a lower rating if competitive pressures and operational inefficiencies result in meaningful loss of market share, leading to weaker profitability and EBITDA coverage of interest deteriorating below 1.5x," S&P said. BLITZ USA: Delaware Judge Kevin Gross Appointed as Mediator ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware appointed the Hon. Kevin Gross, Bankruptcy Judge for the District of Delaware, as mediator to conduct non-binding mediation concerning Blitz U.S.A., Inc. et al.'s plan-related matters. The Debtors and the Official Committee of Unsecured Creditors requested for the referral of the matter to mediation and appoint a mediator to assist the parties in resolving certain issues and impediments relating to a formulation and confirmation of a Chapter 11 Plan. The parties attending the mediation are: (i) the Debtors; (ii) the Committee; (iii) BOKF, NA doing business as Bank of Oklahoma, as agent for the Debtors' pre- and post-petition lenders; (iv) counsel to plaintiffs having filed product liability suits or claims against the Debtors; (v) Wal-Mart; (vi) Kinderhook Capital Fund II, L.P; (vii) Crestwood Holdings, Inc.; and (viii) the insurers under each of the Debtors' commercial liability policies, including, but not limited to (a) CNA, AXIS and affiliate insurers; (b) Liberty Surplus Insurance Corporation and Liberty International Underwriters, Inc., (c) Old republic Insurance Company; (d) ACE American Insurance Company; (e) Hartford Fire Insurance Company; (f) Risk Specialists Company of KY, Inc., Chartis Specialty Insurance Company, Lexington Insurance Company, AIU and certain other subsidiaries of Chartis Inc. A representative of the Office of the U.S. Trustee may also attend the mediation conference. The mediation conference will occur at a time and place to be designated by the mediator. About Blitz U.S.A. Blitz U.S.A. Inc., is a Miami, Oklahoma-based manufacturer of plastic gasoline cans. The company, controlled by Kinderhook Capital Fund II LP, filed for bankruptcy protection to stanch a hemorrhage resulting from 36 product-liability lawsuits. Parent Blitz Acquisition Holdings, Inc., and its affiliates filed for Chapter 11 protection (Bankr. D. Del. Case Nos. 11-13602 thru 11-13607) on Nov. 9, 2011. The Hon. Peter J. Walsh presides over the case. Blitz USA disclosed $36,194,434 in assets and $41,428,577 in liabilities in its schedules. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, represents the Debtors in their restructuring efforts. The Debtors tapped Zolfo Cooper, LLC, as restructuring advisor; and Kurtzman Carson Consultants LLC serves as notice and claims agent. SSG Capital Advisors LLC serves as investment banker. Lowenstein Sandler PC from Roseland, New Jersey, represents the Official Committee of Unsecured Creditors. The Chapter 11 case is financed with a $5 million secured loan from Bank of Oklahoma. Bank of Oklahoma, as DIP agent, is represented by Samuel S. Ory, Esq., at Frederic Dorwart Lawyers in Tulsa. In April 2012, Hopkins Manufacturing Corp. acquired the assets of Blitz USA's unit, F3 Brands LLC, a major manufacturer of oil drains, drain pans, lifting aids and automotive ramps. Blitz USA said in court documents the sale netted the Debtors $14.6 million, which was applied against secured debt. Blitz announced in June that it is abandoning its efforts to reorganize and instead is vowing to shut down operations by the end of July. CAESARS ENTERTAINMENT: Bank Debt Trades at 12% Off -------------------------------------------------- Participations in a syndicated loan under which Caesars Entertainment, Inc., is a borrower traded in the secondary market at 88.38 cents-on-the-dollar during the week ended Friday, Sept. 7, 2012, an increase of 0.64 percentage points from the previous week, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 525 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 1, 2018, and carries Moody's 'B2' rating and Standard & Poor's 'B' rating. The loan is one of the biggest gainers and losers among 181 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. --http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. Caesars reported a net loss of $281.10 million on $2.27 billion of net revenues for the quarter ended March 31 2012. The Company incurred a net loss of $666.70 million in 2011, and a net loss of $823.30 million in 2010. The Company's balance sheet at March 31, 2012, showed $28.40 billion in total assets, $27.56 billion in total liabilities, and $849.20 million in total equity. * * * As reported by the Troubled Company Reporter on Sept. 7, 2012, Fitch Ratings affirmed Caesars Entertainment's 'CCC' Issuer Default Ratings, and revised the outlook to 'negative' from 'stable'. The Outlook revision reflects Fitch's heightened concern regarding Caesars Entertainment Operating Company, Inc.'s near-to-medium term cash burn rate and potential covenant compliance pressure. These factors, combined with previously expressed concerns about weakening relative asset quality due to constrained capital reinvestment, more than offset the positive credit impact from recent transactions executed to push out its debt maturities meaningfully. CAI INTERNATIONAL: S&P Retains 'BB' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BBB-' issue-level rating on Container Applications Ltd.'s proposed senior notes after the deal was revised to $103 million from $100 million. "We initially assigned our ratings on June 13, 2012, but the transaction was delayed. The recovery rating on this issue is '1', indicating our expectation that lenders would receive a very high (90% to 100%) recovery in the event of a payment default. Container Applications Ltd. is a subsidiary of CAI International Inc. (CAI)," S&P said. The 'BB' corporate credit rating on San Francisco-based CAI reflects the company's significant position within the marine cargo container leasing industry and the relatively stable earnings and cash flow generated from a substantial proportion of its long-term leases. The ratings also incorporate the cyclicality and capital intensity of the marine cargo container leasing industry and CAI's substantial and increasing debt burden. Our ratings also reflect our view that the company's financial profile will improve gradually over the next two years following an increase in debt to finance the company's aggressive fleet expansion plans," S&P said. RATINGS LIST CAI International Inc. Corporate credit rating BB/Stable/-- Ratings Affirmed Container Applications Ltd. $103 mil. senior secured notes BBB- Recovery rating 1 CAMTECH PRECISION: R&J Unit Wants More Time for Plan Negotiations ----------------------------------------------------------------- R&J National Enterprises, Inc., a debtor affiliate of Camtech Precision Manufacturing, Inc., asks the U.S. Bankruptcy Court for the Southern District of Florida to extend its exclusive periods to file and solicit acceptances for a proposed plan of reorganization until Oct. 12, 2012, and Dec. 14, respectively. R&J said it needs additional time to negotiate with its creditors in relation to filing a consensual plan. About Camtech Precision Jupiter, Florida-based Camtech Precision Manufacturing, Inc., Avstar Fuel Systems, Inc., and R & J National Enterprises Inc. filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case Nos. 10-22760, 10-22762 and 10-22762) on May 10, 2010. Avstar, founded in 2007, designs, manufactures and overhauls carburetors and fuel injection systems for the aviation industry. Avstar is the holder of Federal Aviation Administration Parts Manufacturer Approvals for general aviation fuel systems. Avstar generates sales primarily from new product sales and overhauls of carburetors and servos for the general aviation industry. Bradley S. Shraiberg, Esq., at Shraiberg, Ferrara & Landau, P.A., in Boca Raton, Florida, serves as counsel to the Debtors. Carlos E. Sardi, Esq., and Glenn D. Moses, Esq., at Genovese Joblove Battista P.A., in Miami, Florida, represent the Official Committee of Unsecured Creditors. In its schedules, Camtech disclosed assets of $10.98 million and debts of $14.63 million. CAPITOL BANCORP: Judge Marci McIvor Hancles Chapter 11 Case ----------------------------------------------------------- Capitol Bancorp Ltd.'s Chapter 11 case was initially assigned to U.S. Bankruptcy Judge Walter Shapero. Jusge Shapero promptly ordered the transfer of the case to the docket of Judge Marci B. McIvor. The order was made on the basis that the Debtor has a companion case as defined in L.B.R. 1073-1(c) filed with the U.S. Bankruptcy Court for the Eastern District of Michigan on Aug. 9, 2012, and assigned to Judge McIvor. The practice of the Court, pursuant to L.B.R. 1073-1(a)(1)(E.D.M.), is to reassign all subsequently filed cases to the Judge to whom the first case is assigned. About Capitol Bancorp Capitol Bancorp Ltd. and Financial Commerce Corporation filed voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case Nos. 12-58409 and 12-58406) on Aug. 9, 2012. Capitol Bancorp -- http://www.capitolbancorp.com/-- is a community banking company with a network of individual banks and bank operations in 10 states and total consolidated assets of roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of FCC, with a number of CBC affiliates owning the remainder. FCC, in turn, is the holding company for five of the banks in CBC's network. CBC is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841, et seq., and trades on the OTCQB under the symbol "CBCR." Lawyers at Honigman Miller Schwartz and Cohn LLP represent the Debtors as counsel. In its petition, Capitol Bancorp scheduled $112,634,112 in total assets and $195,644,527 in total liabilities. The petitions were signed by Cristin K. Reid, corporate president. A hearing will be held on Sept. 18, 2012, at 10:30 a.m. to consider confirmation of Capitol Bancorp's prepackaged Chapter 11 plan of reorganization. CAPITOL BANCORP: Can Employ KCC as Noticing and Balloting Agent --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan has granted Capitol Bancorp Ltd. and Financial Commerce Corporation authorization to employ Kurtzman Carson Consultants LLC as their noticing and balloting agent. As reported in the TCR on Aug. 15, 2012, the Debtors said their engagement of an independent third party is the most effective and efficient manner by which to perform, among other things, the tasks of (i) transmitting certain notices to creditors and parties in interest in these cases, (ii) overseeing the administration of solicitation material, (iii) receiving, reviewing and tabulating ballots, and (v) performing other administrative tasks such as maintaining creditor lists and mailing addresses. The Debtors are retaining KCC pursuant to the parties' Engagement Agreement. Notwithstanding, to the extent that KCC's out-of- pocket costs and expenses relating to the Chapter 11 cases are expected to exceed $10,000 in any single month, the Debtors may compensate KCC in advance for such costs and expenses. Albert Kass, vice president of Corporate Restructuring Services of KCC, attested that the officers and employees of KCC (a) do not have any material adverse connection with the Debtors, the Debtors' creditors or any other party in interest or their attorneys and accountants, the United States Trustee or any person employed in the office of the United States Trustee; and (b) do not hold or represent an interest materially adverse to the Debtors' estates. In addition, KCC is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code. About Capitol Bancorp Capitol Bancorp Ltd. and Financial Commerce Corporation filed voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case Nos. 12-58409 and 12-58406) on Aug. 9, 2012. Capitol Bancorp -- http://www.capitolbancorp.com/-- is a community banking company with a network of individual banks and bank operations in 10 states and total consolidated assets of roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of FCC, with a number of CBC affiliates owning the remainder. FCC, in turn, is the holding company for five of the banks in CBC's network. CBC is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841, et seq., and trades on the OTCQB under the symbol "CBCR." Lawyers at Honigman Miller Schwartz and Cohn LLP represent the Debtors as counsel. In its petition, Capitol Bancorp scheduled $112,634,112 in total assets and $195,644,527 in total liabilities. The petitions were signed by Cristin K. Reid, corporate president. A hearing will be held on Sept. 18, 2012, at 10:30 a.m. to consider confirmation of Capitol Bancorp's prepackaged Chapter 11 plan of reorganization. CAPITOL BANCORP: U.S. Trustee Forms Five-Member Creditors Panel --------------------------------------------------------------- Daniel M. Mcdermott, U.S. Trustee for Region 9, appointed these persons to the Official Committee of Unsecured Creditors in the chapter 11 cases of Capitol Bancorp Ltd. and Financial Commerce Corporation. The Committee comprises of: 1. James H. Byrnes U.S. Bank National Association, as indenture trustee Global Corporate Trust Services One Federal St. 3rd Floor Boston, MA 02110 Tel: (617) 603-6442 Fax: (617) 603-6640 E-mail: james.byrnes@usbank.com 2. Alex T. Chang Bank of New York Mellon Trust Co., N.A., as successor trustee 101 Barclay Street New York, NY 10286 Tel: (212) 815-2816 Fax: (212) 724-5400 E-mail : Alex.Chang@bnymellon.com 3. Larry Barels, on behalf of Barels Charitable Remainder Trust 1321 State Street Santa Barbara, CA 93101 Tel: (805) 965-4346 Fax: (805) 965-4356 E-mail: larry.barels@gte.net 4. Steve Cimalore Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, DE 19890-1615 Tel: (302) 636-6058 E-mail: scimalore@wilmingtontrust.com 5. Earl Petznick Jr. 3920 East Sierra Vista Paradise Valley, AZ 85253 Tel: (602) 694-2555 Fax: (602) 252-0243 E-mail: epetznick@pinalfeeding.com About Capitol Bancorp Capitol Bancorp Ltd. and Financial Commerce Corporation filed voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case Nos. 12-58409 and 12-58406) on Aug. 9, 2012. Capitol Bancorp -- http://www.capitolbancorp.com/-- is a community banking company with a network of individual banks and bank operations in 10 states and total consolidated assets of roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of FCC, with a number of CBC affiliates owning the remainder. FCC, in turn, is the holding company for five of the banks in CBC's network. CBC is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841, et seq., and trades on the OTCQB under the symbol "CBCR." Lawyers at Honigman Miller Schwartz and Cohn LLP represent the Debtors as counsel. In its petition, Capitol Bancorp scheduled $112,634,112 in total assets and $195,644,527 in total liabilities. The petitions were signed by Cristin K. Reid, corporate president. A hearing will be held on Sept. 18, 2012, at 10:30 a.m. to consider confirmation of Capitol Bancorp's prepackaged Chapter 11 plan of reorganization. CARLTON HOTEL: South Beach Hotel Files to Stop Receiver ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Carlton Hotel LLC, a 67-unit hotel on Collins Avenue in the Art Deco district of Miami Beach, filed a Chapter 11 petition last week to prevent the secured lender from having a receiver appointed the next day by the foreclosure court. According to the report, the property is subject to a $15.2 million mortgage purchased by an affiliate of Baltoro Capital Management, the hotel said in a court filing. The hotel owner said Baltoro bought the mortgage for $9.6 million. The hotel blamed bankruptcy on the recessions and ensuing decline in tourism in Miami. Carlton Hotel LLC, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 12-31305) in Miami on Sept. 4, disclosing $8,100,000 in assets and $15,313,777 in liabilities. The Debtor is represented by Geoffrey S. Aaronson, Esq., at Aaronson Schantz P.A., in Miami. CELL THERAPEUTICS: Unit Signs Logistics Agreement with Movianto --------------------------------------------------------------- On Sept. 1, 2012, Cell Therapeutics, Inc.'s wholly-owned subsidiary CTI Life Sciences Ltd., entered into a Logistics Agreement with Movianto Nederland BV. Pursuant to the terms of the Agreement, Movianto has agreed to provide certain warehousing, transportation and distribution services and all related activities to CTILS and its affiliates for the Company's pharmaceutical product Pixuvri in certain agreed territories in Europe. The Services include receipt, unloading and checking, warehousing and inventory control, customer order management, distribution, transportation, lot number and expiry date control, returned goods processing, return and recall, product quality assurance, reporting, credit management and debt collection. The Agreement provides that in consideration of the Services, CTILS will pay Movianto (i) a service fee based on the number of Services provided by Movianto each month and (ii) a one-time information technology implementation fee, each as set forth in the Agreement. The Service Fee is fixed for a period of one year, and thereafter may not be increased more than once in any twelve month period. The Service Fee may be adjusted annually to reflect any increase or decrease in certain costs incurred by Movianto in supplying the Services in the normal course of business, including taxes, the cost of fuel and the cost of insurance, provided that such costs are reasonable. All other costs and expenses directly or indirectly connected to the provision of the Services will be borne by Movianto. Pursuant to the Agreement, CTILS has also granted Movianto a non-exclusive, non-assignable license to use certain technical information necessary for Movianto to complete its obligations pursuant to the Agreement. This license will terminate automatically in the event the Agreement is terminated for any reason; if the Agreement is terminated with respect to an individual product of the Company, this license will terminate automatically in relation to the termination of the Agreement with respect to the individual product. The Agreement has an initial term commencing, subject to written confirmation that the necessary services as set forth in the Agreement have been completed to CTILS's satisfaction, from the date of CTILS's receipt of a European Wholesale Dealer License by the Medicines and Healthcare products Regulatory Authority (MHRA) and continuing for a period of two years, or until terminated in accordance with the terms of the Agreement. Thereafter, the Agreement will be automatically renewed for successive one year periods, unless either party gives written notice of their intent to not renew no less than three months prior to such end of year period. Following the first year of the Agreement, the Agreement may be terminated at any time by CTILS subject to three months' prior written notice. Either party may terminate the Agreement upon the occurrence of certain events, including if the other party (i) defaults in the performance of any of its material obligations under the Agreement and fails to remedy that default within thirty days after notice from the non-defaulting party requiring it to do so or (ii) becomes bankrupt or insolvent or similar proceedings or arrangements occurs. In addition, CTILS may terminate the Agreement upon written notice to Movianto in the event of any change in the direct or indirect ownership of Movianto's business which CTILS considers prejudicial to, or in conflict with CTILS's interests. CTILS has agreed to indemnify Movianto from and against all losses, damages, costs, claims, demands, judgments and liability incurred by reason of a liability to a third party and arising out of (i) CTILS's breach of its duties, representations or warranties under the Agreement, (ii) product liability claims, or (iii) intellectual property right infringement claims, except to the extent that any such losses, damages, costs, claims, demands, judgments or liability are due to the actions, negligence or wrongful acts or omissions of Movianto. Movianto has agreed to indemnify CTILS from and against certain losses, damages, costs, claims, demands, judgments and liability incurred by reason of a liability to a third party and arising out of Movianto's breach of applicable laws and regulations or its duties, representations or warranties under the Agreement, except to the extent that any such losses, damages, costs, claims, demands, judgments or liability are due to the negligence or wrongful acts or omissions of CTILS. About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. Cell Therapeutics reported a net loss attributable to CTI of US$62.36 million in 2011, compared with a net loss attributable to CTI of US$82.64 million in 2010. The Company's balance sheet at June 30, 2012, showed $38.34 million in total assets, $39.83 million in total liabilities, $13.46 million in common stock purchase warrants, and a $14.95 million total shareholders' deficit. Going Concern Doubt Raised The report of Marcum LLP, in San Francisco, Calif., dated March 8, 2012, expressed an unqualified opinion, with an explanatory paragraph as to the uncertainty regarding the Company's ability to continue as a going concern. The Company's available cash and cash equivalents are US$47.1 million as of Dec. 31, 2011. The Company's total current liabilities were US$17.8 million as of Dec. 31, 2011. The Company does not expect that it will have sufficient cash to fund its planned operations beyond the second quarter of 2012, which raises substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Form 10-K for the year ended Dec. 31, 2011, noted that if the Company receives approval of Pixuvri by the EMA or the FDA, it would anticipate significant additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and are currently exploring alternative sources of equity or debt financing. The Company may seek to raise that capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, the Company has a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, it may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CENTRAL FALLS, R.I.: Judge Confirms Chapter 9 Plan -------------------------------------------------- Bill Donahue at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Frank J. Bailey on Thursday paved the way for Central Falls, R.I., to exit Chapter 9 bankruptcy, approving a five-year restructuring plan that would stabilize the city's finances through a mix of cuts to retiree pensions and increases in taxes. Bankruptcy Law360 says Judge Bailey confirmed the plan for the 19,000-person city, which filed for bankruptcy in August to revamp its pension obligations after tax increases and austerity measures failed to resolve millions of dollars in debt. As reported in the Troubled Company Reporter on July 20, 2012, the City of Central Falls, Rhode Island filed with the Bankruptcy Court a Second Amended Plan For The Adjustment Of Debts and an explanatory disclosure statement. The Chapter 9 Plan, if confirmed, will restructure the City's debt and its operations and put the City on a path towards fiscal stability. The Amended Plan also addresses and resolves the City's obligations to employees, retirees, and vendors. The Amended Plan does not impair the City's bond obligations. According to the Second Amended Disclosure Statement dated July 10, 2012, payment to holders of general unsecured claims and general unsecured convenience claims will be paid a distribution from a pool totaling $600,000 during the six-year plan horizon. The general unsecured convenience claims will be paid 35% of their allowed claim on or prior to June 30, 2013. Any balance remaining in FY 2013 claims pool will be added to the FY 2014 claims pool, and the general unsecured claims will share pro rata in the claims pool on or prior to the following payment dates: June 30, 2014, June 30, 2015, June 30, 2016 and June 30, 2017. In no event will the amount paid to any general unsecured creditor exceed 45% of the Allowed Claim. In the event there are monies remaining in the General Unsecured Creditor's Pool on June 30, 2017, after distribution as stated herein, such monies will be deposited in the City's Capital Fund. About Central Falls Central Falls is a city in Providence County, Rhode Island. The population was 18,928 at the 2000 census. Central Falls is the smallest and most densely populated city in Rhode Island. Central Falls sought bankruptcy protection under Chapter 9 of the U.S. Bankruptcy Code (Bankr. D. R.I. Case No. 11-13105) on Aug. 1, 2011. The Chapter 9 filing was made after former Rhode Island Supreme Court Judge Robert Flanders, who serves as state-appointed receiver for the city, was unable to negotiate significant concessions from unions representing police officers, firefighters and other city workers. The city grappled with an $80 million unfunded pension and retiree health benefit liability that is nearly quadruple its annual budget of $17 million. Judge Robert Flanders succeeded the role from retired Superior Court Associate Justice Mark A. Pfeiffer, who was appointed in July 2010. The Central Falls receivership, the state's first, has left the mayor and council without any power to govern. Judge Frank Bailey presides over the Chapter 9 case. Theodore Orson, Esq., at Orson and Brusini Ltd., serves as bankruptcy counsel to the receiver. The City of Central Falls, Rhode Island, on July 10, 2012, filed with the Bankruptcy Court a Second Amended Plan For The Adjustment Of Debts and an explanatory disclosure statement. The Chapter 9 Plan, if confirmed, will restructure the City's debt and its operations and put the City on a path towards fiscal stability. The Amended Plan also addresses and resolves the City's obligations to employees, retirees, and vendors. The Amended Plan does not impair the City's bond obligations. CHARLESTON ASSOCIATES: Stipulation Authorizing Cash Use Approved ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware, in an order dated Sept. 4, 2012, approved a stipulation between debtor Charleston Associates LLC and lender C-III Asset Management LLC, as special services of Bank of America, National Association, on the Debtor's use of cash collateral. The Debtor is authorized to use the rents and other income generated from its shopping center, which will constitute as cash collateral. The stipulation provides that the Debtor can use rental income and other income generated from its Shopping Center solely for the purpose of funding (i) ordinary and necessary costs of operating and maintaining the shopping center, and (ii) certain professional fees and expenses. As adequate protection of its interest in the cash collateral, BofA is granted liens in the assets of the Debtor's estates. In interim settlement of disputes between the parties with respect to the valuation of the Shopping Center, the Debtor agrees to make monthly payments of $225,000 to BofA. With respect to budgeted fees and expenses for the law firm of Neal Wolf & Associates, the allowed costs are those incurred in the adversary proceeding against City National Bank and RA Southeast Land Company, Adversary Proceeding No. 10-01452-lbr, pending in the U.S. Bankruptcy Court for the District of Nevada. The Debtor is indebted to BofA, its secured lender, in the amount of $64 million. All income generated from the Shopping Center, including all rent, is deemed to constitute cash collateral in which BofA has an interest. About Charleston Associates Based in Las Vegas, Nevada, Charleston Associates, LLC, is the successor by merger to Boca Fashion Village Syndications Group, LLC. The Debtor initially owned a 96-acre parcel of real estate in Las Vegas, Nevada and began developing a large community shopping center thereon. Situated at the northeast corner of the intersection of Charleston Boulevard and Rampart Boulevard, the entire shopping center was to be known as "The Shops at Boca Park." The Debtor developed Phases I and II (approximately 54 acres) into an operating shopping center whose tenants currently include Target, Petland, Vons, Famous Footwear, Ross, OfficeMax, and a number of other major national retailers and local retailers. The Debtor transferred developed portions of Phases I and II to affiliates, but retained and continues to own nearly nine acres of land in Phases I and II. Phase III encompassed approximately 41.72 acres. The Debtor divided Phase III into two parcels consisting of the approximately 18.28-acre parcel that is the Boca Fashion Village property, and an approximately 23.44-acre parcel of undeveloped land adjacent thereto. The Undeveloped Land, which remains largely unimproved, was subsequently the subject of a "friendly foreclosure" by City National Bank. The Debtor developed Boca Fashion Village into an operating shopping center whose tenants currently include The Cheesecake Factory, Gordon Biersch, Total Wine and More, Grimaldi's Pizzeria, Kona Grill, REI, Pink the Boutique, and many other national and local retailers. Boca Fashion Village consists of three in-line buildings containing 138,869 square feet of rentable area and an additional 3.74 acre site. The 3.74 acre site was formerly subject to a ground lease, but is currently owned by Quality Real Estate Management ("QREM"), and is being renovated to accommodate the opening of a Fry's Electronics, Inc. store, a "big-box" retail electronics store. Approximately 118,258 square feet, or 85.2% of the rentable area in Boca Fashion Village, is currently leased. In addition, there is a cellular tower located on the property that is currently leased to Nextel. Charleston Associates filed for Chapter 11 protection (Bankr. D. Del. Case No. 10-11970) on June 17, 2010. Judge Kevin J. Carey presides over the case. Neal L. Wolf, Esq., Dean Gramlich, Esq., and Jordan M. Litwin, Esq., at Neal Wolf & Associates, LLC, in Chicago, Ill., represent the Debtor as counsel. Bradford J. Sandler, Esq., and Kathleen P. Makowski, Esq., at Pachulski Stang Ziehl & Jones, LLP, in Wilmington, Del., represent the Debtor as Delaware counsel. In its schedules, the Debtor disclosed $92,348,446 in assets and $65,064,894 in liabilities. Attorneys at Brinkman Portillo Ronk, PC, represent the Official Committee of Unsecured Creditors as counsel. Thomas M. Horan, Esq., Steven K. Kortanek, Esq., and Ryan Cicoski, Esq., at Womble Carlyle Sandridge & Rice, LLP, in Wilmington, Del., represent the Committee as Delaware counsel. CHINA JO-JO DRUGSTORES: Receives Delisting Notice from NASDAQ ------------------------------------------------------------- China Jo-Jo Drugstores, Inc., disclosed that on Aug. 31, 2012, it was notified by The NASDAQ Stock Market LLC ("NASDAQ"), notifying it of its failure to maintain a minimum closing bid price of $1.00 over the then preceding 30 consecutive trading days for its common stock as required by NASDAQ Listing Rule 5550(a)(2). The Company has until Feb. 27, 2013, to regain compliance. The Company intends to actively monitor the bid price for its common stock between now and Feb. 27, 2013, and will consider available options to resolve the deficiency and regain compliance with the minimum bid price requirement. About China Jo-Jo Drugstores China Jo-Jo Drugstores, Inc., through its subsidiaries and contractually controlled affiliates, is a retailer and wholesale distributor of pharmaceutical and other healthcare products in the People's Republic of China. As of June 30, 2012, the Company has 65 retail pharmacies throughout Zhejiang Province and Shanghai. CIRCUS & ELDORADO: Committee Can Hire XRoads as Financial Advisor ----------------------------------------------------------------- The U.S. Bankruptcy Court for the has granted the Official Committee of Unsecured Creditors of Circus and Eldorado Joint Venture, et al. authorization to employ Xroads Solutions Group, LLC, as the Committee's financial advisor. As reported in the TCR on Aug. 15, 2012, XRoads will: i. assist and advise the Committee and its counsel in preparation for and participation in the upcoming confirmation hearing concerning the joint plan of reorganization; ii. advise the Committee and the Committee's counsel regarding financial, strategic and business issues concerning the Debtors and their Chapter 11 cases; iii. participate and advise the Committee in negotiations with the Debtors and other parties-in-interest; and iv. provide other ancillary financial advisory services in connection with these matters as the Committee or its counsel may from time to time reasonably request and which are customarily provided by financial advisors in similar situations. XRoads will be compensated at these hourly rates: Managing Principal/Principal(s) $595-$695 Managing Director(s) $495-$575 Director(s) $400-$490 Senior Consultant(s) $300-$395 Consultant(s) $260-$295 Associate(s)/Paraprofessional(s) $95-$195 Jeffrey R. Truitt, a principal of XRoads, attested that the firm does not have an interest adverse to the Debtor or the bankruptcy estate and is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Circus and Eldorado Circus and Eldorado Joint Venture and Silver Legacy Capital Corp. filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case Nos. 12-51156 and 12-51157) on May 17, 2012. Circus and Eldorado Joint Venture owns and operates the Silver Legacy Resort Casino, a 19th century silver mining themed hotel, casino and entertainment complex located in downtown Reno, Nevada. The casino and entertainment areas at Silver Legacy are connected by skyway corridors to the neighboring Eldorado Hotel & Casino and the Circus Circus Hotel and Casino, each of which are owned by affiliates of the Debtors. Together, the three properties comprise the heart of the Reno market's prime gaming area and room base. Silver Legacy Capital is a wholly owned subsidiary of the Joint Venture and was created and exists for the sole purpose of serving as a co-issuer of the mortgage notes due 2012. SLCC has no operations, assets or revenues. Eldorado Hotel & Casino and Circus Circus Hotel and Casino are not debtors in the Chapter 11 cases. The Company did not make the required principal payment of its 10.125% mortgage notes on the maturity date of March 1, 2012. The company also elected not to make the scheduled interest payment. As a result, an aggregate of $142.8 million principal amount of Notes were outstanding and accrued interest of $7.23 million on the Notes, as of March 1, 2012, is due and payable. The Debtors have entered into a Restructuring Support Agreement with Capital Research and Management Company, a holder of a substantial portion of the mortgage notes. A copy of the RSA dated March 15, 2012, is available for free at http://is.gd/diDPh3 The RSA contemplates a proposed plan will be filed no later than June 1, 2012. The plan will contain creditor treatments that have already been negotiated with and agreed to by creditor constituents. The Debtors will seek approval of the explanatory disclosure statement within 45 days after the Petition Date and obtain confirmation of the Plan 60 days later. Judge Bruce T. Beesley presides over the case. Paul S. Aronzon, Esq., and Thomas P. Kreller, Esq., at Milbank, Tweed, Hadley & McCloy LLP; and Sallie B. Armstrong, Esq., at Downey Brand LLP, serve as the Debtors' counsel. The Debtors' financial advisor is FTI Consulting Inc. The claims agent is Kurtzman Carson Consultants LLC. The Bank of New York Mellon Trust Company, N.A., the trustee for the Debtors' 10-1/8% Mortgage Notes due 2012, is represented by Craig A. Barbarosh, Esq., and Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pittman LLP. Circus and Eldorado Joint Venture disclosed $264,649,800 in assets and $158,753,490 in liabilities as of the Chapter 11 filing. The petitions were signed by Stephanie D. Lepori, chief financial officer. The Plan dated June 1, 2012, pays much of its debt in cash and the balance with new secured liens. August B. Landis, Acting U.S. Trustee for Region 17, appointed three creditors to serve in the Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases. Stutman, Treister & Glatt Professional Corporation represents the Committee. CIT GROUP: Must Face Tyco's $190-Mil. Tax Claim, 2nd Circ. Says --------------------------------------------------------------- Max Stendahl at Bankruptcy Law360 reports that the Second Circuit on Thursday refused to erase Tyco International Ltd.'s $190 million claim that its former subsidiary CIT Group Inc. had wrongly scrapped a tax benefits agreement after filing for bankruptcy. According to Bankruptcy Law360, a three-judge panel affirmed a December 2011 bankruptcy court decision that classified the claim as a creditor claim, rather than an inferior shareholder claim. CIT shareholders were wiped out by the bank holding company's 2009 bankruptcy filing. About CIT Group Bank holding company CIT Group Inc. and affiliate CIT Group Funding Company of Delaware LLC filed for Chapter 11 (Bankr. S.D.N.Y. Case No. 09-16565) on Nov. 1, 2009, with a prepackaged Chapter 11 plan of reorganization. Evercore Partners, Morgan Stanley and FTI Consulting served as the Company's financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel in connection with the restructuring plan. Sullivan & Cromwell served as legal advisor to CIT's Board of Directors. The Court validated the vote of CIT's impaired classes of creditors and confirmed the Plan on Dec. 8, 2009. The Plan provided for the conversion to equity or reinstatement of seven classes of debt issued primarily in the form of notes and debentures; one class of unsecured notes was exchanged for new debt. General unsecured creditors, including holders of claims arising from the rejection of executory contracts, were paid in full and deemed unimpaired. Holders of preferred and common stock, as well as subordinated claims, received no recovery. CIT emerged from bankruptcy protection on Dec. 11, 2009. * * * In February 2012, Moody's Investors Service upgraded CIT's Corporate Family Rating to B1 from B2, recognizing CIT's achievements in strengthening its liquidity profile by diversifying funding sources, extending debt maturities, and reducing the level of encumbered assets. Dominion Bond Rating Service also has upgraded CIT's ratings, including its Issuer Rating to BB (low) from B (high). CLAIRE'S STORES: Selling Add'l $625-Mil. of 9% Sr. Secured Notes ---------------------------------------------------------------- Claire's Stores, Inc., announced the sale of $625 million aggregate principal amount of additional 9.00% senior secured first lien notes due 2019. The notes were priced at 102.5% of the principal amount thereof, resulting in gross proceeds of $640,625,000. The notes will be of the same series as the Company's outstanding $500 million aggregate principal amount of 9.00% Senior Secured First Lien Notes due 2019. The terms of the notes, other than their issue date and issue price, will be identical to the previously issued notes. Settlement of the notes is scheduled to occur on Sept. 20, 2012. The Company intends to use the net proceeds of the issuance of the notes, together with cash on hand, to repay in full the term loan indebtedness under its senior secured credit facility. In addition, the Company intends to replace its existing senior secured revolving credit facility with an amended and restated 5-year $115.0 million senior secured revolving credit facility. The notes offering is conditioned upon the Company entering into the new senior secured revolving credit facility. The notes are being offered only to "qualified institutional buyers" in reliance on Rule 144A under the Securities Act of 1933, as amended, and outside the United States only to non-U.S. persons in reliance on Regulation S under the Securities Act. The notes have not been and will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. About Claire's Stores Claire's Stores, Inc. -- http://www.clairestores.com/-- operates as a specialty retailer of fashion accessories and jewelry for preteens and teenagers, as well as for young adults in North America and internationally. It offers jewelry products that comprise costume jewelry, earrings, and ear piercing services; and accessories, including fashion accessories, hair ornaments, handbags, and novelty items. Based in Pembroke Pines, Florida, Claire's Stores operates under two brands: Claire's(R), which operates worldwide and Icing(R), which operates only in North America. As of Jan. 31, 2009, Claire's Stores, Inc., operated 2,969 stores in North America and Europe. Claire's Stores also operates through its subsidiary, Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint venture with AEON, Co., Ltd. The Company also franchises 198 stores in the Middle East, Turkey, Russia, South Africa, Poland and Guatemala. The Company's balance sheet at July 28, 2012, showed $2.72 billion in total assets, $2.78 billion in total liabilities, and a $61.01 million stockholders' deficit. CLARE OAKS: Court Confirms Termination of Solicitation Period ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, on Aug. 28, 2012, granted Wells Fargo Bank, National Association, as master trustee, and Sovereign Bank, N.A.'s motion: i) confirming termination of Clare Oaks' exclusive period to solicit acceptances of any chapter 11 plan; or in the alternative, ii) terminating of the Debtor's exclusive solicitation period. As reported in the Troubled Company Reporter on Aug. 16, 2012, Sovereign Bank, N.A. and Wells Fargo Bank N.A. filed a Chapter 11 plan of reorganization for Clare Oaks. Under the Plan, holders of bonds issued prepetition, led by Sovereign Bank and Wells Fargo, as master trustee, will have an allowed secured claim in the amount of $75 million plus unpaid fees, will new bonds that will mature in 40 years. Holders of general unsecured claims expected not to exceed $1 million will receive a total of $50,000 plus 50% of any savings related to professional fee claims. Treatment of holders of equity interests is yet "to be determined". The Plan includes a term sheet under which The Sisters of St. Joseph of the Third Order of St. Francis, Inc., as landlord, will sell to the Debtor for $4.5 million the real estate currently leased by the Debtor. The $1.5 million will be paid in cash by the Debtor on the effective date, and the balance in the form in a note that is set to mature in 15 years. A copy of the Plan is available for free at: http://bankrupt.com/misc/Clare_Oaks_Plan_080912.pdf 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. COLLECTIVE BRANDS: S&P Affirms 'B' Corp. Credit Rating; Off Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Topeka, Kan.-based Collective Brands Inc. "At the same time, we removed the rating from CreditWatch with negative implications, where it was placed on May 3, 2012. The outlook is stable," S&P said. "We also assigned a 'B' issue-level rating with a '4' recovery rating to the new term loan. The '4' recovery rating indicates our expectation for average (30% to 50%) recovery of principal in the event of a payment default," S&P said. "Blum and Golden Gate are funding the transaction with financial sponsor common equity, the term loan, and the unrated revolver. This new revolver will replace the company's existing $300 million unrated revolving loan facility. The company is using the proceeds from the financing mainly to purchase $600 million in public stock. We expect Collective will repay its existing $480 million in senior secured term loan and $126 million in senior subordinated notes after the completion of the transaction by the end of 2012, at which time we will withdraw our ratings on both pieces of debt," S&P said. "The rating on global footwear retailer Collective reflects our expectation that the company's financial risk profile will remain highly leveraged and its business risk profile will remain vulnerable this year, despite efforts to improve merchandising and pricing and continue closing certain unprofitable Payless ShoeSource stores," said Standard & Poor's credit analyst Diya Iyer. "Collective is increasing total debt to EBITDA from 4.8x in the year ended July 28, 2012, to 5.7x pro forma for the deal, reflecting the Golden Gate and Blum acquisition. Pro forma debt includes the $275 million term loan, $75 million of drawn revolver, and other debt mainly related to pensions and leases. We expect interest coverage to decline to an estimated 2.1x from 2.9x before the transaction. We also expect credit metrics to improve slightly by year-end due to stronger back-to-school and holiday sales compared to 2011." CNO FINANCIAL: A.M. Best Raises Issuer Credit Rating to 'bb' ------------------------------------------------------------ A.M. Best Co. has upgraded the financial strength rating (FSR) to B++ (Good) from B+ (Good) and issuer credit ratings (ICR) to "bbb" from "bbb-" for the key life/health subsidiaries of CNO Financial Group, Inc. (CNO Financial) (Carmel, IN) [NYSE: CNO]. Concurrently, A.M. Best has upgraded the ICR and existing senior debt ratings to "bb" from "bb-" of CNO Financial. The outlook for these ratings is stable. Additionally, A.M. Best has assigned a debt rating of "bb" to CNO Financial's forthcoming issuance of $250 million senior secured notes due 2020. The assigned outlook is stable. (See below for a detailed listing of companies and ratings.) The upgrades reflect the favorable trends in CNO Financial's operating earnings, core product sales and risk-adjusted capitalization. In addition, A.M. Best acknowledges the significant progress made by CNO Financial's management in executing its strategic business plan. The growth in earnings has been attributable to CNO Financial's diverse revenue streams from its insurance subsidiaries. Improved revenue across several business segments - driven by agent growth, timely rate increases and the addition of new products - also have contributed to the group's higher profitability. CNO Financial's enhanced operating results, combined with its better investment performance, have facilitated growth in the insurance subsidiaries' risk-adjusted capitalization. A.M. Best notes that Bankers Life and Casualty Company, the group's lead operating entity, has seen considerable improvement in its capitalization over the past 12 to 18 months. The rating actions also reflect the success CNO Financial has had in focusing on markets where true competitive advantages are achievable while, at the same time, actively managing risk. This strategy included exiting/de-emphasizing non-core product lines through divestiture and/or reinsurance, considerable expense reductions and, most recently, initiating a recapitalization plan. A.M. Best views favorably CNO Financial's planned debt restructuring, which will enhance financial flexibility by reducing its cost of capital and improving its debt maturity profile. Moreover, A.M. Best believes the company's ability to maintain solid profitability and foster capital growth has better positioned CNO Financial with respect to its credit agreement. The recapitalization plan consists of four-year and six-year term loans for $250 million and $400 million, respectively, as well as a proposed private offering of $250 million of senior secured notes due 2020. CNO Financial plans to use the roughly $900 million in proceeds to pay off $224 million in outstanding borrowings under its existing credit agreement, repurchase up to all of its $275 million 9% notes and the majority (approximately $200 million) of its 7% convertible debentures. Although CNO Financial's debt-to-capital ratio would increase temporarily to roughly 20% on a pro forma basis, it would decline due to expected scheduled amortization. CNO Financial's interest coverage measures, which are currently sufficient, also will benefit from the ongoing debt paydowns. While sales in CNO Financial's life insurance and supplemental health lines have generally increased, A.M. Best has observed declining premium trends in the company's annuity operations. Persistent low interest rates are expected to keep annuity sales depressed in the near to medium term, consistent with some of the organization's competitors. A.M. Best notes that, despite the sluggish economy, CNO Financial has reported favorable persistency and has generally maintained its target spreads within its annuity business segment. Although CNO Financial's business profile has improved, A.M. Best remains concerned regarding the sustainability of earnings across key product lines given low interest rates and the likelihood of lower net investment income. While CNO Financial's investment portfolio has been de-risked in recent years, the potential for additional asset impairments remains given its exposure to commercial mortgages, commercial mortgage-backed securities (CMBS) and below investment grade bonds. A.M. Best notes that CNO Financial's direct mortgage loans are fairly well diversified and that the collateral underlying its CMBS portfolio is performing better than in prior years with respect to delinquencies and cumulative losses. A.M. Best also has affirmed the FSR of B- (Fair) and ICR of "bb-" of Conseco Life Insurance Company (CLIC) (Carmel, IN). The outlook for both ratings is stable. CLIC's ratings recognize its modest operating profitability and improvement in risk-adjusted capitalization, tempered by its declining premiums and decreasing net investment income as the business in CLIC runs off. A.M. Best believes it is important for management to continue to actively manage CNO Financial's legacy blocks of business, including the challenge of securing rerates, to facilitate profitability in these lines. Additionally, A.M. Best believes the level of support that CNO Financial will provide to CLIC in the future remains uncertain, noting that CLIC's current level of risk-adjusted capitalization is satisfactory for its ratings. The FSR has been upgraded to B++ (Good) from B+ (Good) and the ICRs to "bbb" from "bbb-" for the following key life/health subsidiaries of CNO Financial Group, Inc. The outlook for all ratings is stable. -- Bankers Life and Casualty Company -- Colonial Penn Life Insurance Company -- Bankers Conseco Life Insurance Company -- Washington National Insurance Company The following debt ratings have been upgraded: CNO Financial Group, Inc. -- to "bb" from "bb-" on $176.5 million 7.0% senior unsecured convertible debentures, due 2016 -- to "bb" from "bb-" on $64.0 million 7.0% senior unsecured convertible debentures, due 2016 -- to "bb" from "bb-" on $52.5 million 7.0% senior unsecured convertible debentures, due 2016 -- to "bb" from "bb-" on $275 million 9.0% senior secured notes, due 2018 The following debt rating has been assigned: CNO Financial Group, Inc. -- "bb" on $250 million senior secured notes, due 2020 COLONIAL BANCGROUP: Hedge Funds Can Finance Lawsuits ---------------------------------------------------- Patrick Fitzgerald at Dow Jones' DBR Small Cap reports that a federal bankruptcy September 7 backed a bid by a group of hedge funds to lend $15 million to the remnants of Colonial Bank's former parent to fund ongoing lawsuits against the Federal Deposit Insurance Corp. About The Colonial BancGroup Headquartered in Montgomery, Alabama, The Colonial BancGroup, Inc., (NYSE: CNB) owned Colonial Bank, N.A, its banking subsidiary. Colonial Bank -- http://www.colonialbank.com/-- operated 354 branches in Florida, Alabama, Georgia, Nevada and Texas with over $26 billion in assets. On Aug. 14, 2009, Colonial Bank was seized by regulators and the Federal Deposit Insurance Corporation was named receiver. The FDIC sold most of the assets to Branch Banking and Trust, Winston-Salem, North Carolina. BB&T acquired $22 billion in assets and assumed $20 billion in deposits of the Bank. The Colonial BancGroup filed for Chapter 11 bankruptcy protection (Bankr. M.D. Ala. Case No. 09-32303) on Aug. 25, 2009. W. Clark Watson, Esq., at Balch & Bingham LLP, and Rufus T. Dorsey IV, Esq., at Parker Hudson Rainer & Dobbs LLP, serve as counsel to the Debtor. The Debtor disclosed $45 million in total assets and $380 million in total liabilities as of the Petition Date. In September 2009, an Official Committee of Unsecured Creditors was formed consisting of three members, Fine Geddie & Associates, The Bank of New York Trust Company, N.A., and U.S. Bank National Association. Burr & Forman LLP and Schulte Roth & Zabel LLP serve as co-counsel for the Committee. Colonial Brokerage, a wholly owned subsidiary of Colonial BancGroup, filed for Chapter 7 protection with the U.S. Bankruptcy Court in the Middle District of Alabama in June 2010. Susan S. DePaola serves as Chapter 7 trustee. COMPUTER GRAPHICS: Reports $109,000 Net Income in June 30 Quarter ----------------------------------------------------------------- Computer Graphics International Inc. filed its quarterly report on Form 10-Q, reporting net income of $109,389 on $1.7 million of sales for the three months ended June 30, 2012, compared with a net income of $570,196 on $2.2 million of sales for the three months ended June 30, 2011. For the nine months ended June 30, 2012, the Company had a net loss of $402,184 on $4.7 million of sales, compared with net income of $2.7 million on $8.0 million of sales for the nine months ended June 30, 2012. According to the Company, the decrease in net sales for the three and nine month periods ended June 30, 2012, is primarily due to the overall market decline in the current Chinese real estate industry. The Company says its business is in transition from a majority of the real estate market to a full commercial CG industry, but it takes time to get new industry customers. Income before income taxes decreased to $112,999 for the three months ended June 30, 2012, from $702,583 for the three months ended June 30, 2011, representing a 84% decrease. Income before income taxes decreased to $(830,362) for the nine months ended June 30, 2012, from $3.6 million for the nine months ended June 30, 2011, representing a 123% decrease. According to CGII, the decrease was mainly due to the decrease in sales and increase in cost of sales and selling, general and administrative expenses. Income tax expense was $3,610 for the three months ended June 30, 2012, compared to income tax expense $132,387 for the three months ended June 30, 2011. CGII's income tax credit was $(428,178) for the nine months ended June 30, 2012, compared to income tax expense $865,894 for the nine months ended June 30, 2011. Balance Sheet The Company's balance sheet at June 30, 2012, showed $2.7 million in total assets, $1.3 million in total liabilities, and stockholders' equity of $1.4 million. Going Concern Uncertainty "The Company incurred a net loss of $402,184 for the nine months ended June 30, 2012, and had accumulated losses of $263,871 at June 30, 2012. These create an uncertainty about the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/H9813D Computer Graphics International Inc. is 3D digital visual service provider founded in 2006 based in China, specialized in providing one-stop-shop service and systems based on 3D image technology to domestic governments, real estate developers, game developers, the automotive industry and other commercial customers. The Company operates through its wholly-owned subsidiary Shenzhen Digital Image Technology Co., Limited. The Company's headquarters are located in Shenzhen, China. The Company was incorporated under the laws of the State of Nevada on Feb. 27, 2003, under the name AMP Productions, Ltd. ("AMP"), with the business purpose of developing, producing, marketing, and distributing low-budget feature-length films to movie theaters and ancillary markets. CONVERTED ORGANICS: Has 368.2 Million Common Shares Outstanding --------------------------------------------------------------- As previously disclosed on Jan. 3, 2012, Converted Organics entered into an agreement with an institutional investor whereby the Company agreed to sell to the investor twelve senior secured convertible notes. The initial January Note was issued on Jan. 3, 2012, in an original principal amount of $247,500. The remaining eleven January Notes will each have an original principal amount of up to $237,600. Each January Note matures eight months after issuance. The total face value of the twelve notes under this agreement will be $2,861,100, assuming each note is sold for the full face value, to the investor, of which there is no assurance. The January Notes are convertible into shares of the Company's common stock at a conversion price equal to 80% of lowest bid price of the Company's common stock on the date of conversion. Also, as previously reported on March 12, 2012, the Company entered into an agreement with two investors, pursuant to which the Company agreed to effect an additional closing under the Jan. 12, 2012, convertible note in which the Company issued the buyers new notes having an aggregate original principal amount of $550,000. As of Aug. 10, 2012, the total principal outstanding on these notes was $1,636,360. As of Sept. 7, 2012, the principal amount of the Notes is $1,671,560. From Aug. 10, 2012 until September, 2012, a total of $79,200 in principal had been converted into 47,316,174 shares of common stock and a note was sold for $114,400. Since the issuance of the Original Note and the addtional closing, a total of $445,500 in principal has been converted into 187,765,997 shares of common stock. The Note holders are accredited investors and the shares of common stock were issued in reliance on Section 3(a)(9) under the Securities Act of 1933, as amended. As of Sept. 7, 2012, the Company had 368,296,469 shares of common stock outstanding. About Converted Organics Boston, Mass.-based Converted Organics Inc. utilizes innovative clean technologies to establish and operate environmentally friendly businesses. Converted Organics currently operates in three business areas, namely organic fertilizer, industrial wastewater treatment and vertical farming. After auditing the 2011 results, Moody, Famiglietti & Andronico, LLP, noted that the Company has suffered recurring losses and negative cash flows from operations and has an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. Converted Organics reported a net loss of $17.98 million in 2011, compared with a net loss of $47.81 million in 2010. The Company's balance sheet at June 30, 2012, showed $7.05 million in total assets, $6.91 million in total liabilities and $140,006 in total stockholders' equity. CPG INTERNATIONAL: S&P Affirms B CCR; Outlook Revised to Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Scranton, Penn.-based CPG International Inc. (CPG) to negative from stable. "At the same time, we affirmed the ratings on CPG, including the 'B' corporate credit rating. At the same time, we assigned a 'B' issue-level rating to CPG's proposed $355 million first-lien term loan. The recovery rating on the loan is '4', which indicates our expectation for average (30% to 50%) recovery in the event of a payment default," S&P said. "The company will use proceeds from the proposed term loan, along with additional debt and equity proceeds, to fund the recently announced acquisition of competitor TimberTech, a subsidiary of The Crane Group Cos. (not rated). Terms of the acquisition were not announced publicly," S&P said. "We revised the outlook to negative because we expect leverage will rise above 5x EBITDA and, to a lesser extent, to acknowledge the risks relating to integrating a relatively large acquisition," said credit analyst James Fielding. "The affirmation acknowledges CPG's 'adequate' liquidity profile and our expectation that CPG will continue to generate positive free cash flow, which would give the company the flexibility to bring leverage back down over time." "The negative outlook reflects the leveraged nature of the proposed acquisition and, to a lesser extent, risks associated with integrating TimberTech. We would lower our rating one notch if leverage continues to climb and is sustained above 6x EBITDA. This could occur if resin prices increase 20% or more and CPG is unable to raise its prices because of a more competitive sales Environment," S&P said. CPI CORP: Amends "Westfield Settlement Report" to Correct Dates --------------------------------------------------------------- CPI Corp. filed an amendment to its Form 8-K, which was originally filed with the Securities and Exchange Commission on Sept. 6, 2012, for the sole purpose of correcting erroneous dates included in the original filing. During the second quarter of fiscal 2012, CPI Corp. discontinued its Portrait Gallery from Bella Pictures operations. The Company had previously entered into leases for 19 retail stores at certain shopping centers owned and managed by Westfield, LLC. On Aug. 30, 2012, the Company entered into a Settlement Agreement and General Release with Westfield. Under the Agreement, the Company will pay Westfield the sum of $500,000, in five equal installments on or before Oct. 15, 2012, Dec. 15, 2012, Jan. 15, 2013, Feb. 15, 2013, and March 15, 2013, as consideration and final settlement of the leases. About CPI Corp. Headquartered in St. Louis, Missouri, CPI Corp. provides portrait photography services at more than 2,500 locations in the United States, Canada, Mexico and Puerto Rico and offers on location wedding photography and videography services through an extensive network of contract photographers and videographers. The Company reported a net loss of $56.86 million for the fiscal year ended Feb. 4, 2012, compared with net income of $11.90 million for the fiscal year ended Feb. 5, 2011. KPMG LLP, in St. Louis, Missouri, issued a "going concern" qualification on the consolidated financial statements for the period ended Feb. 4, 2012, noting that the Company has suffered a significant loss from operations, is not in compliance with the financial covenants under its credit agreement, and has a net capital deficiency, all of which raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at July 21, 2012, showed $61.04 million in total assets, $159.63 million in total liabilities, and a $98.59 million total stockholders' deficit. Bankruptcy Warning "Management is implementing plans to improve liquidity through improvements to results from operations, store closures, cost reductions and operational alternatives," the Company said in its quarterly report for the period ended July 21, 2012. "However, there can be no assurance that we will be successful with our plans or that our future results of operations will improve. If sales trends do not improve, our available liquidity from cash flows from operations will be materially adversely affected. There can be no assurance that we will be able to improve cash flows from operations, or that we will be able to comply with the terms of the Second Amendment. Therefore, there can be no guarantee that our existing sources of cash and our future cash flows from operations will be adequate to meet our liquidity requirements, including cash requirements that are due under the Credit Agreement and that are needed to fund our business operations. If we are unable to address our liquidity shortfall or comply with the terms of our Credit Agreement, as amended, then our business and operating results would be materially adversely affected, and the Company may then need to curtail its business operations, reorganize its capital structure, or liquidate." The Company further stated that should it not be able to sell its business by Dec. 31, 2012, it could be forced to seek additional financing, which may not be available, curtail its business operations or reorganize its capital structure, or be forced into bankruptcy. DAYTOP VILLAGE: Garfunkel Wild Approved as Healthcare Counsel ------------------------------------------------------------- Daytop Village Foundation Incorporated and Daytop Village Inc. sought and obtained approval from the Bankruptcy Court for authority to employ Garfunkel Wild, P.C., as special healthcare counsel to the Debtors, effective as of July 17, 2012. The Debtors said the retention of Garfunkel Wild is essential to the operation of their business and the effective and efficient administration of the Chapter 11 cases, particularly in light of the numerous healthcare and regulatory issues with which the Debtors are currently faced. Garfunkel Wild will, inter alia: a. provide regulatory advice to the Debtors and consult with the Debtors on healthcare and other non-bankruptcy related matters; b. provide continuing legal advice in connection with health care, regulatory, and other non-bankruptcy related issues; c. provide advice to the Debtors on matters relating to the patient care ombudsman; d. assist in providing non-bankruptcy, real estate, corporate and commercial assistance as may relate to the sale, lease or other disposition of assets of the estates, as such disposition relates to healthcare or regulatory issues; e. perform other non-bankruptcy related legal services and assistance desirable and necessary to the efficient and economic administration of these estates. The Debtors and Garfunkel Wild have agreed that the firm will be paid its customary hourly rates for services rendered, and that it will be reimbursed according to Garfunkel Wild's customary reimbursement policies. Garfunkel Wild's hourly rates for partners currently range from $400 to $510. The hourly billing rates of Garfunkel Wild's senior attorneys, associates and paralegals currently range from approximately $170 to $400. To the best of the Debtors' knowledge, Garfunkel Wild is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Daytop Village Daytop Village Foundation Incorporated, along with affiliate Daytop Village Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11436) on April 5, 2012, in Manhattan. In 1963, Father William O'Brien and Dr. Alexander Bassin founded the Daytop Lodge, a substance abuse treatment facility, in Staten Island. Today, Daytop is the third largest substance abuse agency operating in the State of New York and the only substance abuse agency operating world-wide under a contract with the Unites States State Department. It provides family-oriented substance abuse treatment for adults and adolescents. Through six residential facilities and eight outreach clinics in New York, Daytop offers individual treatment plans by providing professional counseling, medical, social and spiritual attention. Judge Shelley C. Chapman presides over the Chapter 11 cases. Lowenstein Sandler PC is the Debtors' counsel. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. The Debtors' Restructuring and Management Officer is Marotta Gund Budd Dezera LLC. The petition was signed by Michael Dailey, chief executive officer. Daytop Village Inc., as of Jan. 31, 2012 has $8.68 million in assets and $45.03 million of liabilities. DVF has $42.20 million in assets and $32.00 million in liabilities as of Jan. 31, 2012. Island Funding II, the DIP lender, is represented by Paul R. DeFilippo, Esq., at Wollmuth Maher & Deutsch LLP. Counsel to the prepetition lender Signature Bank is Stephen D. Brodie, Esq., at Herrick Feinstein LLP; and Joshua I. Divack, Esq., at Hahn & Hessen LLP. Counsel to the prepetition lender Hudson Valley Bank is James P. Blose, Esq., at Griffin Coogan Blose & Sulzer P.C. The Official Committee of Unsecured Creditors was formed April 17, 2012. Bendinger & Schlesinger, Inc., is the chair of the Committee. Alvarez & Marsal Healthcare Industry Group LLC is the Committee's financial advisor. Robinson Brog Leinwand Greene Genovese & Gluck P.C. is the Committee's counsel. Eric M. Huebscher was appointed Patient Care Ombudsman in the case. DAYTOP VILLAGE: Massey Knakal Approved as Real Estate Broker ------------------------------------------------------------ Daytop Village Foundation Incorporated and Daytop Village Inc. sought and obtained approval from the Bankruptcy Court to employ of Massey Knakal Realty of Manhattan LLC as real estate broker, effective as of July 30, 2012. Daytop Village has determined in its business judgment that it requires the assistance of an experienced real estate broker to assist with their marketing and disposition of its properties. MKR has extensive experience selling real estate in the New York area, and the knowledge of the market and depth of experience that MKR possesses will be invaluable to DVF's efforts to obtain the greatest possible value for the properties. MKR will (i) prepare and widely circulate marketing/sales materials to other brokers and prospective buyers or investors of the properties; (ii) promptly and widely list the subject properties for sale within the real estate brokerage community; and (iii) promptly disclose any information regarding prospective interest in the properties to DVF. MKR will be compensated by commission in connection with a sale of each property at a commission ranging from 1.5% to 5%. To the extent MKR is successful in procuring the sale of three or more of the properties, the commission payable to MKR will range from 1% to 4.5%. The commission will be earned and payable only upon and at the transfer of title for any of the properties, and will be payable solely from the proceeds of the sale. No commission or other compensation will be deemed earned or payable to MKR unless and until a sale contract satisfactory to DVF is executed, approved by the Court, the sale closes, and the purchaser pays the full purchase price for any of the Properties. About Daytop Village Daytop Village Foundation Incorporated, along with affiliate Daytop Village Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11436) on April 5, 2012, in Manhattan. In 1963, Father William O'Brien and Dr. Alexander Bassin founded the Daytop Lodge, a substance abuse treatment facility, in Staten Island. Today, Daytop is the third largest substance abuse agency operating in the State of New York and the only substance abuse agency operating world-wide under a contract with the Unites States State Department. It provides family-oriented substance abuse treatment for adults and adolescents. Through six residential facilities and eight outreach clinics in New York, Daytop offers individual treatment plans by providing professional counseling, medical, social and spiritual attention. Judge Shelley C. Chapman presides over the Chapter 11 cases. Lowenstein Sandler PC is the Debtors' counsel. Epiq Bankruptcy Solutions, LLC, is the claims and notice agent. The Debtors' Restructuring and Management Officer is Marotta Gund Budd Dezera LLC. The petition was signed by Michael Dailey, chief executive officer. Daytop Village Inc., as of Jan. 31, 2012 has $8.68 million in assets and $45.03 million of liabilities. DVF has $42.20 million in assets and $32.00 million in liabilities as of Jan. 31, 2012. Island Funding II, the DIP lender, is represented by Paul R. DeFilippo, Esq., at Wollmuth Maher & Deutsch LLP. Counsel to the prepetition lender Signature Bank is Stephen D. Brodie, Esq., at Herrick Feinstein LLP; and Joshua I. Divack, Esq., at Hahn & Hessen LLP. Counsel to the prepetition lender Hudson Valley Bank is James P. Blose, Esq., at Griffin Coogan Blose & Sulzer P.C. The Official Committee of Unsecured Creditors was formed April 17, 2012. Bendinger & Schlesinger, Inc., is the chair of the Committee. Alvarez & Marsal Healthcare Industry Group LLC is the Committee's financial advisor. Robinson Brog Leinwand Greene Genovese & Gluck P.C. is the Committee's counsel. Eric M. Huebscher was appointed Patient Care Ombudsman in the case. DCP LLC: Moody's Reviews 'B2' CFR, 'B1' PDR for Downgrade --------------------------------------------------------- Moody's Investors Service placed dcp LLC's rating on review for downgrade following the signing of a definitive agreement to sell the company to Guggenheim Partners, Mandalay Entertainment and Mosaic Media Investment Partners. Ratings Rationale The review will focus on the level of debt leverage, interest coverage, and liquidity post the closing of the transaction. If the transaction results in a material increase in debt without a corresponding improvement in EBITDA or the interest coverage or liquidity should deteriorate, the ratings could be downgraded. Under terms of the indenture, the secured notes contain a put option that would allow investors the option to accelerate repayment in the event of a change of control at 101. The notes can be called by the issuer but are subject to a make whole premium, which greatly exceeds the change of control put premium, until August 15, 2013. If all the notes are put or called, the existing ratings will be withdrawn. Incurrence of additional debt is limited by a Consolidated Total Debt Ratio at 5x with some allowed carve outs. dcp's B2 Corporate Family Rating (CFR) is reflective of the company's modest scale and its reliance on four annual events (The Golden Globes, American Music Awards, Academy of Country Music Awards, and Dick Clark's New Year's Rockin' Eve) and one FOX primetime reality dance competition (So You Think You Can Dance) for the most of its cash flow. Also considered is the company's current high debt-to-EBITDA leverage (estimated at 5.9x incorporating Moody's standard adjustments for lease expenses), limited revenue scale, Golden Globe's litigation, and modest free cash flow generation. The rating is supported by dcp's four core events that Moody's believes will continue to attract large audiences, contribute to the company's above average margins and are anticipated to be largely contractual with broadcast network counterparties. While a majority of dcp's cash flow is expected to be generated by its four core events, the company's revenue stream is relatively predictable as license agreements are typically long term in nature. Moody's anticipates that as its long-term licensing contracts expire for its important award shows, new ones will be negotiated which will result in increased fees. The non-renewal or a reduction of one of dcp's contracts could materially impact operating performance, as would the cancellation of its reality dance competition (which is in its ninth season) without an adequate replacement program. However, the company has increased its efforts to develop new alternative revenue streams that could help mitigate the impact of a loss or material decline in any one of its five main shows. The company has only a 50% economic interest in three of the shows and 100% of the other two shows. The following ratings are under review: Corporate Family Rating -- B2 Probability-of-Default Rating -- B1 Senior Secured Notes -- B2 (LGD 4, 65%) DCP Corp's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside DCP Corp's core industry and believes DCP Corp's ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. dcp LLC dba dick clark productions, Inc., is a private corporation with its headquarters in Santa Monica, California, develops and produces television programming for television networks, first-run domestic syndicators, cable networks and advertisers, primarily in the United States. Revenue for the twelve months ended March 31, 2012 was $96 million. DEEP PHOTONICS: Wants to Hire Carl Welander as Accountant --------------------------------------------------------- Deep Photonics Corporation asks the U.S. Bankruptcy Court for the District of Oregon for permission to employ Carl Welander as accountant. The professional services Carl Welander include preparing and reviewing Debtor's tax returns, reviewing and preparing Debtor's financial statements, and providing Debtor with other tax and accounting advice that may be necessary or appropriate in the bankruptcy case. The hourly rates of the firm's personnel are: Carl Welander, accountant $150 Mary Giles, accountant $57 Cindy Swenson, accounting admin. $25 Carl Welander has a prepetition claim against the Debtor in the amount of $485. Carl Welander has agreed to waive the claim to be retained as the Debtor's accountant in the bankruptcy case. To the best of Debtor's knowledge, the associates of Carl Welander no interest materially adverse to the interest of the estate or of any class of creditors or equity security holders About Deep Photonics Deep Photonics Corporation filed a Chapter 11 petition (Bankr. D. Ore. Case No. 12-35626) on July 20, 2012. Deep Photonics designs and manufactures innovative solid-state fiber lasers. The Debtor scheduled $75,111,128 in assets and $4,917,393 in liabilities. Bankruptcy Judge Trish M. Brown presides over the case. Timothy J. Conway, Esq., at Tonkon Torp LLP, serves as the Debtor's counsel. The petition was signed by Theodore Alekel, president. The U.S. Trustee has not appointed an official committee of unsecured creditors because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. DELTA ENVIRONMENTAL: Wants to Convert Case to Chapter 7 Proceeding ------------------------------------------------------------------ Corey Clairday at Poinsett County Democrat Tribune reports that Delta Environmental has decided to convert it Chapter 11 case to Chapter 7 liquidation proceeding because the Company was unable to get financing. According to the report, the city of Lepanto has been discussing ending their contract with Delta Environmental for months now. Owner Glen Eaton and Senior VP Bob Cordrick met with the council last month to discuss issues, talking about improvements they planned to implement, such as adding sprayers to trucks to clean spills. The report relates the city would not have been able to get out of their contract until the end of the year but was trying to get out by an earlier date. When city attorney Noyl Houston questioned whether or not a tentative agreement had been reached to terminate the city's contract by October 31, Mr. Eaton said he had only authorized his attorney to terminate Tyronza's contract by that date, not Lepanto's. DEMCO INC: Meeting of Creditors Scheduled for Sept. 14 ------------------------------------------------------ The U.S. Trustee for Region 2 will convene a meeting of creditors in DEMCO, Inc.'s Chapter 11 case on Sept. 14, 2012, at 10 a.m. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. The deadline to file a complaint to determine dischargeability of certain debts is set for Nov. 13, 2012. About DEMCO, Inc. West Seneca, New York-based DEMCO, Inc., aka Decommissioning & Environmental Management Company filed for Chapter 11 protection (Bankr. W.D. N.Y. Case No. 12-12465) on Aug. 6, 2012. Bankruptcy Judge Michael J. Kaplan presides over the case. Daniel F. Brown, Esq., at Andreozzi, Bluestein, Fickess, Muhlbauer Weber, Brown, LLP represent the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million. The petition was signed by Michael J. Morin, controller. DEMCO INC: U.S. Trustee Appoints Three-Member Creditors' Panel -------------------------------------------------------------- Tracy Hope Davis, the U.S. Trustee for Region 2, appointed three creditors to serve on the Official Committee of Unsecured Creditors in the Chapter 11 cases of Demco, Inc. The Committee comprises: 1. CTC Demolition Co., Inc. Attn: Jerome Farley 10 Strassberg Street Trenton, NJ 08690 Tel: (609) 610-5844 2. LVI Services Inc. Attn: Gregory DiCarlo 35 Corporate Drive, Suite 1155 Trumbull, Connecticut 06611 Tel: (203) 222-0584 3. Cambria Contracting Inc. Attn: David Wendt 5105 Lockport Road Lockport, New York 14094 Tel: (716) 625-6690 About DEMCO, Inc. West Seneca, New York-based DEMCO, Inc., aka Decommissioning & Environmental Management Company filed for Chapter 11 protection (Bankr. W.D. N.Y. Case No. 12-12465) on Aug. 6, 2012. Bankruptcy Judge Michael J. Kaplan presides over the case. Daniel F. Brown, Esq., at Andreozzi, Bluestein, Fickess, Muhlbauer Weber, Brown, LLP represent the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million. The petition was signed by Michael J. Morin, controller. DIGITAL DOMAIN: Needs Cash Quickly to Avoid Creditor Protection --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Digital Domain Media Group Inc., a provider of visual effects for the movie industry, said on Sept. 7 that it must "quickly access additional sources of liquidity" to avoid the need for "protection from its creditors." According to the report, the warning was issued in a statement where the company said its closing operations in Port St. Lucie, Florida, while continuing at facilities in California, Florida, and West Palm Beach, Florida. Earlier last week, the company announced a forbearance agreement with holders of the $35 million in senior secured notes that went into default in August. The noteholders agreed not to take action without first giving two days' notice. The report relates that the Port St. Lucie, Florida-based company said it's evaluating "alternatives," including a refinancing proposal from an institutional investor. There is also possibility of an equity investment from a customer, the company said. The company reported a $40.2 million operating loss and a $50.7 million net loss in the first half of 2012 on total revenue of $64.9 million. In 2011, there was a $75.1 million operating loss on total revenue of $98.6 million. The Bloomberg report discloses that the balance sheet was upside down on June 30, with assets of $205 million and liabilities totaling $214.9 million. Before trading was halted, the stock traded on the morning of Sept. 7 for 93.14 cents on the EDGX Exchange. Once trading resumed, the stock closed on Sept. 7 at 60 cents, a 39% decline. DRILL RIGS: Moody's Rates US$750MM Senior Secured Notes '(P)B2' --------------------------------------------------------------- Moody's Investors Service assigned a (P)B2 rating to the new USD750 million senior secured notes to be issued by Drill Rigs Holdings Inc., a subsidiary of Ocean Rig UDW Inc. Moody's also upgraded the group's probability of default rating (PDR) to B2, in-line with the B2 corporate family rating (CFR), as well as the rating on the USD500 million senior unsecured notes to Caa1. The outlook was revised from negative to stable. Moody's issues provisional ratings in advance of the final sale of securities. Upon closing of the transaction and a conclusive review of the final documentation, Moody's will endeavour to assign definitive ratings. A definitive rating may differ from a provisional rating. Ratings Rationale The rating actions follow the announcement by Ocean Rig of a planned debt refinancing. This comprises the issuance of the new notes to fully repay the USD488 million outstanding on the existing USD1.04 billion senior secured credit facility maturing in September 2013. Excess cash from the refinancing will be used for financing offshore drilling rigs. The affirmation of the CFR at B2, reflects the improvements in Ocean Rig's business profile, a continued strong ultra-deepwater market and improved liquidity post the refinancing, mitigated by very high current adjusted gross leverage of nearly 7.0x and higher than Moody's expectations. Over the last year, the company has announced numerous medium-term contract and letter of intent awards on its existing rigs and two of those under construction. This has resulted in all of the operational rigs apart from the Eirik Raude and one of the rigs under construction being contracted out through 2014, leading to a contract backlog of USD4.8 billion compared to USD1.8 billion at the time of the initial rating. The PDR has been upgraded one notch to B2, in-line with the CFR, to account for the removal in April from Ocean Rig's credit facilities of cross default clauses with DryShips Inc (unrated but which was constraining the PDR), and an expected family recovery rate of 50% as is typical for structures with both bank and bond debt. The (P)B2 rating on the new secured notes reflects that they will be secured by first liens on the Leiv Eiriksson and Eirik Raude and all other assets of Drill Rigs. However, the instrument rating is in-line with the CFR as access to funds from enforcement on the other seven rigs can only be gained through the parent guarantee from Ocean Rig, ranking the claims of the new notes on those rigs equal with the other credit facilities in relation to rigs that they do not have first lien security on and the unsecured bonds. The upgrade of the USD500 million unsecured bonds to Caa1 is in- line with Moody's loss-given default approach given the new capital structure and a PDR of B2. The new notes have standard high-yield incurrence covenants including those on restricted payments, debt incurrence and liens but no financial covenants. In H1 2012, revenue increased 81% year-on-year (YoY) as the two new drillships became operational. However, profitability was impacted by the transition of all the rigs, apart from the Poseidon, to new contracts that resulted in costs associated with idle times, acceptance testing, mobilisation and BOP upgrades as well as higher than expected operating costs on the Leiv Eiriksson, Corcovado and Mykonos. In consequence, adjusted gross leverage for the last-twelve months to 30 June 2012 is nearly 7.0x, higher than Moody's expected, and very high given the capital intensive, highly cyclical nature of the offshore contract drilling sector. Moody's expects this to fall towards 6.0x by year end 2012 as most rigs will be operating on the same contract throughout this time. However, the company is unlikely to deleverage in 2013 as it intends to draw down on a USD1.35 billion loan facility, that is currently in the process of syndication, to finance the delivery payments of the three rigs under construction. Moody's views Ocean Rig's liquidity as adequate for its short-term needs assuming the completion of the new notes issuance as outlined. This will both address next year's bank debt maturity and provide about an additional USD250 million in cash to the USD191 million already on the balance sheet as of H1 2012. Following the proposed refinancing, absent the USD177 million in yearly amortisation payments, the next debt maturities are not until 2016. Moody's assumes positive free cash flow in 2013, absent the USD1.3 billion in delivery payments for the new rigs, which Moody's expects to be financed with the loan currently under syndication. The stable outlook reflects Moody's view that the completion of the proposed financing will remove near-term liquidity risks, supported by the company's contract backlog and a positive operating environment outlook. The company's high leverage dampens the prospect of an early upgrade to the CFR. However, the CFR could face positive pressure if inter alia, the construction of the new rigs are completed on time and to budget, and adjusted gross debt to EBITDA is materially and sustainably below 4x. Conversely, the CFR could face downward pressure if adjusted gross debt to EBITDA stays above 6x on a sustained basis or if the conditions for a stable outlook are not met. The principal methodology used in rating Ocean Rig UDW Inc and Drill Rigs Holdings Inc was the Global Oilfield Services Rating Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. DVORKIN HOLDINGS: Taps SBCGD as Bankruptcy Counsel -------------------------------------------------- Dvorkin Holdings, LLC, asks the U.S. Bankruptcy Court for the Northern District of Illinois for permission to employ Michael Davis, Esq., and the members and associates of the law firm of Springer, Brown, Covey, Gaertner and Davis, LLC, as its attorneys. Springer Brown will: 1. consult with the Debtor concerning its powers and duties as debtor in possession, the continued operation of its business and the Debtor's management of the financial and legal affairs of its estate; 2. consult with the Debtor and with other professionals concerning the negotiation, formulation, preparation, and prosecution of a Chapter 11 plan and disclosure statement; 3. confer and negotiate with the Debtor's creditors, other parties in interest, and their respective attorneys and other professionals concerning the Debtor's financial affairs and property, Chapter 11 plans, claims, liens, and other aspects of the case; 4. appear in court on behalf of the Debtor when required, and will prepare, file and serve such applications, motions, complaints, notices, orders, reports, and other documents and pleadings as may be necessary in connection with this case; and 5. provide the Debtor other services as it may request and which may be necessary in the circumstances. The individuals presently designated to represent the debtor in possession and their hourly rates are: Michael J. Davis, Esq. $375 Thomas E. Springer, Esq. $375 Elizabeth A. Bates, Esq. $375 Joshua D. Greene, Exq. $285 Springer Brown has received a retainer in the sum of $50,000 for services in connection with the Debtor's Chapter 11 case prior to the filing of the case. To the best of the Debtor's knowledge, information and belief, the attorneys at Springer Brown are disinterested persons within the meaning of 11 U.S.C. Section 101(14) of the Bankruptcy Code. Dvorkin Holdings, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-31336) in Chicago on Aug. 7. The Debtor estimated assets of at least $10 million and debts of up to $10 million. Bankruptcy Judge Jack B. Schmetterer oversees the case. The petition was signed by Loran Eatman, vice president of DH-EK Management Corp. DVORKIN HOLDINGS: U.S. Trustee Wants to Oust Management ------------------------------------------------------- Patrick S. Layng, the United States Trustee for the Northern District of Illinois asks the U.S. Bankruptcy Court for the Northern District of Illinois to enter an order directing the appointment of a Chapter 11 trustee in the case of Dvorkin Holdings, LLC, citing as cause the gross mismanagement of the Debtor's affairs. Specifically, the UST cited that: -- there is a probability that creditors have lost confidence in Holdings' management; -- Holdings' corporate structure and its intercompany liabilities themselves call into question Holdings' ability to fulfill its fiduciary duty to creditors; -- there is a need for an independent third party to analyze Holdings' prepetition financial dealings. This will determine whether or not any fraudulent transfers or preferences exist. The U.S. Trustee believes that Holdings, through its subsidiaries or related entities, is primarily involved in commercial real estate investment and management. Holdings lists ownership interests in 40 partnerships and joint ventures, all of which are limited liability companies in its amended Schedule B. According to its amended Schedule H, Holdings is a codebtor or guarantor of the debt for 44 entities, most of which are also Nondebtor LLCs. According to the UST, in addition to the Dvorkin family's ownership in Holdings, public records indicate Mrs. Dvorkin occupies a significant management position in DH-EK Management Corp. According to the Illinois Secretary of State's website, Mrs. Dvorkin is the president of DH-EK, the company which employs Mr. Eaton and operates Holdings. The Secretary of State's website also indicates that Daniel Dvorkin serves as registered agent for both DH-EK and Holdings. Upon information and belief, Daniel Dvorkin played an important role in managing Holdings' business affairs prior to the commencement of the Debtor's case. The UST says Daniel Dvorkin is currently under indictment for his alleged involvement in a murder for hire plot. It appears that the alleged intended victim, who lives in Texas, was involved in a DuPage County lawsuit which resulted in a multimillion dollar judgment, according to Debtor's counsel, against Holdings and Daniel Dvorkin himself in February of this year. The Northern District of Illinois docket in case number 12 CR 00500, USA V. Dvorkin, indicates Daniel Dvorkin and Mrs. Dvorkin entered into a forfeiture agreement in which they pledged a parcel of real property in Lombard, Illinois in consideration of a $1,000,000 bond for Daniel Dvorkin. Holdings' counsel informed the UST that Mrs. Dvorkin terminated Daniel Dvorkin's relationship with Holdings approximately two weeks after his arrest, and then put Mr. Eatman in control of Holdings shortly before Holdings filed this case. Dvorkin Holdings, LLC, filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-31336) in Chicago on Aug. 7, 2012. The Debtor estimated assets of at least $10 million and debts of up to $10 million. Bankruptcy Judge Jack B. Schmetterer oversees the case. Michael J. Davis, Esq., at Springer, Brown, Covey, Gaetner & Davis, in Wheaton, Illinois, serves as counsel. The petition was signed by Loran Eatman, vice president of DH-EK Management Corp. DVORKIN HOLDINGS: Files Schedules of Assets and Liabilities ----------------------------------------------------------- Dvorkin Holdings, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division on Aug. 21, 2012, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Total Liabilities ---------------- ------------ ----------------- A - Real Property $650,000 B - Personal Property $69,244,843 C - Property Claimed as Exempt D - Creditors Holding Secured Claims $1,020,000 E - Creditors Holding Unsecured Priority Claims $0 F - Creditors Holding Unsecured Nonpriority Claims $8,276,750 ------------ ----------------- $69,894,843 $9,296,750 A copy of the SAL is available for free at: http://bankrupt.com/misc/dvorkin.doc21.pdf Dvorkin Holdings, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-31336) in Chicago on Aug. 7. The Debtor estimated assets of at least $10 million and debts of up to $10 million. Bankruptcy Judge Jack B. Schmetterer oversees the case. Michael J. Davis, Esq., at Springer, Brown, Covey, Gaetner & Davis, in Wheaton, Illinois, serves as counsel. The petition was signed by Loran Eatman, vice president of DH-EK Management Corp. ELPIDA MEMORY: Bondholders Cleared to Question over U.S. Assets --------------------------------------------------------------- U.S. Bankruptcy Judge Christopher S. Sontchi on Thursday cleared a group of Elpida Memory Inc.'s U.S. bondholders to depose a company representative in support of their challenge to the planned $2.5 billion sale of the Japanese chipmaker to Micron Technology Inc. Peg Brickley at Dow Jones' Daily Bankruptcy Review reports that bondholders are positioning themselves to take action in the U.S. if they don't like the ultimate price on the Japanese chip maker's proposed sale to Micron Technology. At a court hearing in Wilmington, Judge Sontchi denied Elpida's motion to quash the deposition, rejecting the company's argument that third parties can't be granted discovery in a Chapter 15 case, according to Bankruptcy Law360. About Elpida Memory Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is a Japan-based company principally engaged in the development, design, manufacture and sale of semiconductor products, with a focus on dynamic random access memory (DRAM) silicon chips. The main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM, Mobile RAM and XDR DRAM, among others. The Company distributes its products to both domestic and overseas markets, including the United States, Europe, Singapore, Taiwan, Hong Kong and others. The company has eight subsidiaries and two associated companies. After semiconductor prices plunged, Japan's largest maker of DRAM chips filed for bankruptcy in February with liabilities of 448 billion yen ($5.6 billion) after losing money for five quarters. Elpida Memory and its subsidiary, Akita Elpida Memory, Inc., filed for corporate reorganization proceedings in Tokyo District Court on Feb. 27, 2012. The Tokyo District Court immediately rendered a temporary restraining order to restrain creditors from demanding repayment of debt or exercising their rights with respect to the company's assets absent prior court order. Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo Court as Supervisor and Examiner in the case. Elpida Memory Inc. sought the U.S. bankruptcy court's recognition of its reorganization proceedings currently pending in Tokyo District Court, Eight Civil Division. Yuko Sakamoto, as foreign representative, filed a Chapter 15 petition (Bankr. D. Del. Case No. 12-10947) for Elpida on March 19, 2012. FLETCHER GRANITE: Court Approves Additional Work for Yoshida ------------------------------------------------------------ FGC Liquidation, LLC, formerly known as Fletcher Granite Company, LLC, obtained approval of an amended application to employ Yoshida & Sokolski, P.C. as tax return preparer. The Debtors filed an amended application to seek authorization for YSPC to prepare the Debtors' 2011 tax returns and to perform ancillary tasks related thereto for a flat fee of $4,500. In the original application, the Debtor sought approval to hire YSPC's employment to prepare the Debtors' 2008 and 2009 tax returns. David R. Yoshida, a member of the firm, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Fletcher Granite Westford, Massachusetts-based Fletcher Granite Company LLC -- http://www.fletchergranite.com/-- produced granite for buildings, bridges and road construction. Fletcher Granite filed for Chapter 11 bankruptcy protection (Bankr. D. Mass. Case No. 10-43884) on Aug. 2, 2010. David J. Reier, Esq., and Laura Otenti, Esq., at Posternak Blankstein & Lund LLP, serve as counsel to the Debtor. The Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million in its Chapter 11 petition. The U.S. Trustee has formed a five-member Official Committee of Unsecured Creditors. In November 2010, the judge approved a $7 million all-cash sale of Fletcher Granite's assets to stalking-horse bidder Nesi Realty LLC. The Debtor renamed itself to FGC Liquidation, LLC, following the sale. FLETCHER INTERNATIONAL: Fund Being Taken Over by Trustee -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a master fund named Fletcher International Ltd. will be taken over by a Chapter 11 trustee as the result of a hearing held last week in U.S. Bankruptcy Court in Manhattan. According to the report, creditors and the U.S. Trustee sought the trustee, contending the company was in the middle of an unnecessary fight for control between investors and the fund's manager. The fund manager, Fletcher Asset Management Inc., contended creditors would be best served by appointment of an examiner to perform an investigation. U.S. Bankruptcy Judge Robert E. Gerber disagreed and called for a trustee to take over. The report relates that there is also a dispute over whether investors in a feeder fund can force the master fund into an involuntary liquidation in Bermuda, where the master fund is incorporated. Fletcher International filed a lawsuit in bankruptcy court to stop the involuntary bankruptcy in Bermuda. The report notes that U.S. Bankruptcy Judge Robert E. Gerber signed a temporary injunction stopping liquidators appointed in the Cayman Islands from proceeding with proceedings in Bermuda. The Bloomberg report discloses that Judge Gerber will hold another hearing to decide whether the injunction should be extended beyond Sept. 25. The lawsuit to halt the Bermuda liquidation is Fletcher International Ltd. v. Fletcher Income Arbitrage Fund, 12-01740, in the same court. About Fletcher International Fletcher International, Ltd., filed a bare-bones Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-12796) on June 29, 2012, in Manhattan. The Bermuda exempted company estimated assets and debts of $10 million to $50 million. The bankruptcy documents were signed by its president and director, Floyd Saunders. David R. Hurst, Esq., at Young Conaway Stargatt & Taylor, LLP, in New York, serves as counsel. Fletcher International Ltd. is managed by the investment firm of Alphonse "Buddy" Fletcher Jr. Fletcher Asset Management was founded in 1991. During its initial four years, FAM operated as a broker dealer trading various debt and equity securities and making long-term equity investments. Then, in 1995, FAM began creating and managing a family of private investment funds. The Debtor is a master fund in the Fletcher Fund structure. As a master fund, it engages in proprietary trading of various financial instruments, including complex, long-term, illiquid investments. The Debtor is directly owned by Fletcher Income Arbitrage Fund and Fletcher International Inc., which own roughly 83% and 17% of the Debtor's common shares, respectively. Arbitrage's direct parent entities are Fletcher Fixed Income Alpha Fund and FIA Leveraged Fund, both of which are incorporated in the Cayman Islands and are subject to liquidation proceedings in that jurisdiction, and which own roughly 76% and 22% of Arbitrage's common stock, respectively. The Debtor currently has a single subsidiary, The Aesop Fund Ltd. FORT LAUDERDALE: Gets Interim OK for Genovese Joblove as Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida, according to Fort Lauderdale BoatClub, Ltd.'s case docket, entered an interim order authorizing the Debtor to employ Barry P. Gruher and the Law Firm of Genovese Joblove & Battista, P.A. as counsel. Naples, Florida-based Fort Lauderdale BoatClub, Ltd., owns a fully developed and operational marina facility formerly known as Jackson Marine Center in Fort Lauderdale. The marina, which has a 12-acre prime intracoastal waterway real estate, is being leased to G. Robert Toney & Associates Inc. doing business as National Liquidators, for $75,000 per month (reduced from the previous rate $160,000 per month). The Company filed for Chapter 11 protection (Bankr. S.D. Fla. Case No. 12-28776) on Aug. 2, 2012. Bankruptcy Judge Raymond B. Ray presides over the cases. Barry P. Gruher, Esq., at Genovese Joblove & Battista, P.A., represents the Debtor in its restructuring effort. The Debtor has scheduled assets of $13,483,209 and liabilities of $10,340,756. The petition was signed by Edward J. Ruff, president. The first meeting of creditors in the Debtor's Chapter 11 case was scheduled for Sept. 10. FOXCO ACQUISITION: Moody's Rates 1st Lien Sr. Sec. Revolver 'B2' ---------------------------------------------------------------- Moody's Investors Service assigned B2 ratings and LGD3 -- 49% assessments each to FoxCo Acquisition Sub, LLC's ("FoxCo") proposed $20 million 1st lien senior secured revolver and $715 million 1st lien term loan B. Proceeds from the proposed debt facilities will be used to refinance the existing 1st lien senior secured revolver, 1st lien senior secured term loan, and 13.375% senior notes as well as to fund a special dividend of approximately $153 million. Moody's also affirmed the B2 Corporate Family Rating (CFR) and B2 Probability of Default Rating (PDR). The rating outlook is stable. Assigned: Issuer: FoxCo Acquisition Sub, LLC $20 million 1st Lien Sr Secured Revolver due January 2017: Assigned B2, LGD3 -- 49% $715 million 1st Lien Sr Secured Term Loan B due July 2017: Assigned B2, LGD3 -- 49% Affirmed: Issuer: FoxCo Acquisition Sub, LLC Corporate Family Rating: Affirmed B2 Probability of Default Rating: Affirmed B2 (reflects new term loan being covenant lite, as proposed) Outlook Actions: Issuer: FoxCo Acquisition Sub, LLC Outlook is Stable To be withdrawn upon closing of the proposed transaction: Issuer: FoxCo Acquisition Sub, LLC $50 million 1st lien sr secured revolver due July 2014: B1, LGD3 -- 33% $515 million 1st lien sr secured term loan B due July 2015 ($339.4 million outstanding): B1, LGD3 -- 33% (assumes complete refinancing with new term loan) 13.375% sr notes due July 15, 2016 ($200 million outstanding): Caa1, LGD5 -- 86% Ratings Rationale FoxCo's B2 corporate family rating reflects moderately high leverage with a 2-year average debt-to-EBITDA ratio of 5.6x estimated for September 30, 2012 (including Moody's standard adjustments) and pro forma for the proposed dividend. Moody's expects the 2-year average debt-to-EBITDA ratio to improve to less than 5.2x by FYE2012 reflecting strong demand for political advertising in October and early November. The refinancing extends the earliest maturity 2 � years to 2017 and eliminates the high coupon senior notes (13.375% coupon). As a result, the transaction reduces annual interest expense, despite the increase in funded debt balances to $715 million from $539 million. In addition, all debt is pre-payable which Moody's believes is helpful in providing Oak Hill flexibility in exercising strategic options. Meaningful leverage reduction compared to the 2-year average debt-to-EBITDA ratio of 7.3x reported for 2010 was achieved through improved operating performance over the last two years in addition to debt prepayments. FoxCo grew EBITDA for FYE 2011 to more than $110 million (including Moody's standard adjustments) meaningfully higher than EBITDA of $72 million reported in FY2009, reflecting an improving economy and a recovery in advertising demand, especially for auto and retail sectors. Moody's notes that management achieved revenues of $333 million for FY2011 matching revenues for FY2010 despite the absence of significant political ad sales. With a focus on local markets, management was able to offset the expected loss of political revenues in FY2011 by growing core ad revenues and negotiating higher retransmission fees. Looking forward, Moody's expects the company to generate at least 14% revenue growth in 2012 given stronger than expected demand for political advertising. Beyond 2012, FoxCo will benefit from meaningful increases in retransmission revenues and related cash flow partially offsetting the absence of significant political revenues in 2013. Lack of national scale, a station portfolio with mostly Fox affiliates, and the potential for additional dividends constrain ratings. FoxCo faces increased competition for advertising dollars due to ongoing media fragmentation. Ratings are supported by good EBITDA margins enhanced by cost savings from its operating agreement with Local TV and its management contract with Tribune Company. Cash balances of a minimum $10 million over the rating horizon plus a minimum of 10% free cash flow-to-debt ratios provide good liquidity. The stable outlook reflects Moody's view that FoxCo will grow core advertising revenues as well as retransmission fees, net of retrans sharing or reverse compensation, and apply excess cash to reduce debt balances resulting in two year debt-to-EBITDA ratios improving from the initial 5.6x level (including Moody's standard adjustments) estimated for the proposed refinancing and dividend. The outlook also incorporates Moody's expectations that the company will maintain good liquidity and generate at least high single - digit percentages of free cash flow-to-debt ratios in the absence of subsequent dividends. Ratings could be downgraded if the company is not able to grow core revenues due to weak ad demand in key markets, reflecting economic weakness or lack of competitive Fox programming, and resulting in two-year debt-to- EBITDA ratios (including Moody's standard adjustments) increasing above 5.75x. Weakened liquidity, including low single-digit free cash flow, could also lead to a downgrade. Ownership by a financial sponsor and potential for additional dividends constrain ratings; however, ratings could be upgraded if management provides assurances they would operate the company consistent with the higher rating and if revenue growth and debt repayments result in trailing two-year debt-to-EBITDA ratios being sustained comfortably below 4.50x. FoxCo would also need to maintain good liquidity including expectations for high single-digit free cash flow-to-debt ratios. The principal methodology used in rating FoxCo Acquisition Sub, LLC was the Global Broadcast and Advertising Related Industry Methodology published in May 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Formed in July 2008 through the acquisition of eight stations from Fox Television Stations, Inc., FoxCo Acquisition Sub, LLC owns or operates 10 stations in DMA's ranked #17 to #57, including seven owned Fox affiliates and one owned CBS affiliate, plus two stations operated under Local Marketing Agreements with Tribune Broadcasting. Local TV Holdings, LLC, which is 95% owned by affiliates of Oak Hill Capital Partners, serves as FoxCo's parent company. The company maintains headquarters in Fort Wright, Kentucky and net revenue for the 12 months ended June 30, 2012 totaled $351 million. FTMI REAL ESTATE: Sec. 341(a) Meeting Scheduled for Sept. 21 ------------------------------------------------------------ The U.S. Trustee for Region 21 will convene a Meeting of Creditors under U.S.C. Sec. 341(a) in the Chapter 11 case of FTMI Real Estate, LLC, on Sept. 21, 2012, at 10:00 a.m. at 51 Southwest First Avenue, Room 1021, Miami, Fla. The deadline to file a complaint to determine dischargeability of Certain Debts is Nov. 20, 2012. Proofs of Claim are due by Dec. 20, 2012. About FTMI Real Estate FTMI Real Estate, LLC and FTMI Operator, LLC sought Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 12-29214) in Fort Lauderdale on Aug. 10, 2012. FTMI Operator, which operates a health care business The Lenox on The Lake, disclosed just $112,000 in assets and $31.98 million in liabilities. The LENOX -- http://www.thelenox.com-- is South Florida's, newest state-of-the-art Assisted Living and Memory Care community, which has a serene lakeside setting and wonderful waterfront vistas. FTMI Real Estate, a single asset real estate under 11 U.S.C. Sec. 101(51B), scheduled $19.64 million in assets and $28.93 million in liabilities. The Debtor owns The Lenox on The Lake facilities at 6700 Commercial Boulevard, in Lauderhill, Florida valued at $13 million. Secretary of Housing Urban Development has a $25.87 million claim secured by the property. FTMI REAL ESTATE: Can Employ Gamberg & Abrams as Bankr. Counsel --------------------------------------------------------------- On Aug. 23, 2012, the U.S. Bankruptcy Court for the Southern District of Florida granted FTMI Real Estate, LLC, interim authority to employ Gamberg & Abrams, in Plantation, Florida as attorneys for the Debtor, nunc pro tunc to the Petition Date. About FTMI Real Estate FTMI Real Estate, LLC and FTMI Operator, LLC sought Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 12-29214) in Fort Lauderdale on Aug. 10, 2012. FTMI Operator, which operates a health care business The Lenox on The Lake, disclosed just $112,000 in assets and $31.98 million in liabilities. The LENOX -- http://www.thelenox.com-- is South Florida's, newest state-of-the-art Assisted Living and Memory Care community, which has a serene lakeside setting and wonderful waterfront vistas. FTMI Real Estate, a single asset real estate under 11 U.S.C. Sec. 101(51B), scheduled $19.64 million in assets and $28.93 million in liabilities. The Debtor owns The Lenox on The Lake facilities at 6700 Commercial Boulevard, in Lauderhill, Florida valued at $13 million. Secretary of Housing Urban Development has a $25.87 million claim secured by the property. GARDA WORLD: S&P Puts 'B+' CCR on Watch Neg on C$1.1B Mgt. Buyout ----------------------------------------------------------------- Standard & Poor's Ratings Services placed all its ratings on Montreal-based Garda World Security Corp., including its 'B+' long-term credit rating on the company, on CreditWatch with negative implications. "The CreditWatch placement reflects Garda's announcement of a management buyout of C$1.1 billion, which is backed by private equity," said Standard & Poor's credit analyst Jatinder Mall. "The ratings on Garda reflect Standard & Poor's view of the company's satisfactory business risk profile and aggressive financial risk profile. The company has high leverage, weak cash flow protection measures, and liquidity that is potentially constrained by the modest cushion under the secured credit facilities' financial covenants. These weaknesses are mitigated in part by what we consider Garda's solid market position in its core businesses and high barriers to entry to the cash logistics segment," S&P said. "We will resolve the CreditWatch on Garda in the next three months. If the transaction were to be completed as announced and given that it will be funded by a private equity firm, the rating will be limited to the 'B' category as per our criteria," S&P said. "We would likely lower the ratings on Garda if the management buyout leads to deterioration in the company's credit metrics," S&P said. GATEHOUSE MEDIA: Bank Debt Trades at 69% Off in Secondary Market ---------------------------------------------------------------- Participations in a syndicated loan under which GateHouse Media, Inc., is a borrower traded in the secondary market at 30.71 cents- on-the-dollar during the week ended Friday, Sept. 7, 2012, a drop of 0.81 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on Feb. 27, 2014, and carries Moody's Ca rating and Standard & Poor's CCC- rating. The loan is one of the biggest gainers and losers among 181 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About GateHouse Media GateHouse Media, Inc. -- http://www.gatehousemedia.com/-- headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites. Gatehouse Media, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $2.86 million on $128.76 million of total revenues for the three months ended July 1, 2012, compared with a net loss of $5.06 million on $134.39 million of total revenues for the three months ended June 26, 2011. The Company reported a net loss of $16.23 million on $248.77 million of total revenues for the six months ended July 1, 2012, compared with a net loss of $23.25 million on $254.21 million of total revenues for the six months ended June 26, 2011. The Company's balance sheet at July 1, 2012, showed $487.40 million in total assets, $1.31 billion in total liabilities and a $823.09 million total stockholders' deficit. According to the Form 10-K for the year ended Dec. 31, 2011, the Company's ability to make payments on its indebtedness as required depends on its ability to generate cash flow from operations in the future. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond the Company's control. GENE CHARLES: Section 341(a) Meeting Scheduled for Sept. 24 ----------------------------------------------------------- The U.S. Trustee for Region 4 will convene a meeting of creditors under U.S.C. Sec. 341(a) in the Chapter 11 case of Gene Charles Valentine Trust on Sept. 24, 2012, at 1:00 p.m. at 4th Floor Wheeling Courthouse. The last day to oppose discharge or dischargeability is Nov. 23, 2012. Proofs of claims are due by Dec. 24, 2012. Governmental entities are required to submit proofs of claims by Feb. 5, 2013. About Gene Charles Valentine Trust A business trust created by investment advisor and broker-dealer agent Gene Charles Valentine sought Chapter 11 bankruptcy protection (Bankr. N.D. W.Va. Case No. 12-01078) in Wheeling, West Virginia on Aug. 9, 2012. The Gene Charles Valentine Trust owns commercial and real estate properties in West Virginia, the Financial West Group, the Peace Point Equestrian Center and the Aspen Manor. It estimated $10 million to $50 million in assets and up to $10 million in liabilities. Financial West Investment Group, Inc., doing business as Financial West Group -- http://www.fwg.com/-- is a firm with over 340 registered representatives supervised by 44 Offices of Supervisory Jurisdiction throughout the United States. Financial West Group is a FINRA, and SIPC member and SEC Registered Investment Advisor (over $1 billion under control) that offers a full range of financial products and services. Its corporate office 32 member staff is dedicated to providing registered representatives quality service and technology to allow them to focus on best servicing their investors needs. Aspen Manor -- http://www.aspenmanorresort-- is a resort that claims to be the "The Jewel of the Ohio Valley." Along with its architectural artistry, including hand-carved ceilings, the Manor is filled will original art, statues, historic furniture and artifacts. Bankruptcy Judge Patrick M. Flatley oversees the case. The Trust hired Mazur Kraemer Law Inc., as bankruptcy counsel. GENE CHARLES: Court to Convene Oct. 2 Hearing on Dismissal Motion ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of West Virginia will convene an evidentiary hearing on Oct. 2, 2012, at 9:30 a.m. in the L. Edward Friend II Bankruptcy Courtroom, located in the U.S. Courthouse, 1125 Chapline Street, Third Floor, Wheeling, West Virginia, to consider Gulf Coast Bank and Trust Company's Motion to Dismiss. As reported in the TCR on Aug. 24, 2012, Gulf Coast Bank & Trust Co. has lodged a request in Court seeking dismissal of the Chapter 11 bankruptcy petition filed by the Gene Charles Valentine Trust, saying the case was not filed in good faith with the intention of reorganizing the Debtor but rather for the sole purpose of delay as admitted in its filings before the Bankruptcy Court. Gulf Coast purchased from the Federal Deposit Insurance Corporation, as Receiver for Ameribank, Inc., the servicing rights and responsibilities on a promissory note dated Oct. 4, 2005, in the original principal amount of $3,960,000 that had been guaranteed by, and as a result of default is now held by, the United States Department of Agriculture Rural Development Program; a second promissory note dated Oct. 4,2005, in the original principal amount of $990,000; and a third promissory note dated Sept. 25, 2006, in the original principal amount of $500,000. The Gene Charles Valentine Trust, the Peace Point Farm Equestrian Facility, LLC, and Mr. Gene Charles Valentine pledged as collateral 12 tracts of real property comprising more than 600 acres of land located near Bethany, Brooke County, West Virginia, to secure the three loans. All of the real estate pledged as collateral for the loans is titled in the name of the Gene Charles Valentine Trust. Immediately following the sale of the loans by the FDIC to Gulf Coast on Sept. 21, 2009, the Valentine entities defaulted and have made no payments of principal or interest since that date. Gulf Coast sued in the Circuit Court of Brooke County for judgment on the notes and published notice of a deed of trust sale on the Brooke County real property. The Valentine Defendants filed a counterclaim and sought injunctive relief alleging, among other claims, that the FDIC and Gulf Coast had conspired to keep the Valentine Defendants from purchasing its own notes at the FDIC auction. The FDIC was joined as a party, the case was removed to the federal District Court for the Northern District of West Virginia, and after the FDIC moved for its dismissal and briefs were filed, Judge Frederick P. Stamp, Jr. issued an Order dismissing the FDIC and most of the claims brought by the Valentine Defendants in its Counterclaim. Judge Stamp set the case for mediation before Magistrate Judge Seibert, and the parties agreed to an outline of a settlement which during mediation the Valentine Defendants represented that they could consummate on or before the date of the deed of trust sale which had been continued until July 19,2012. The sale was subsequently postponed by Gulf Coast until Aug. 9, 2012, with the understanding that the Valentine Defendants would have until the close of business on the day prior to the deed of trust sale to comply with the settlement outline and the representations that Gene Charles Valentine had made to Gulf Coast and to Magistrate Judge Seibert. At 4:24 p.m. on Aug. 8, 2012, counsel for Gulf Coast received notice by e-mail that the Debtor would be filing bankruptcy, and the Voluntary Petition was filed on Aug. 9, approximately one hour prior to the scheduled time for the deed of trust sale. The bank contends the Gene Charles Valentine Trust: -- is not a "person" as defined under section 101(41) of the Bankruptcy Code and thus is not entitled to be a debtor under section 109(a) of the Bankruptcy Code; -- is not a "corporation" as defined under section 101(9) of the Bankruptcy Code and thus is not entitled to be a debtor under section 109(a) of the Bankruptcy Code; -- is not a "business trust" as defined by recognized precedent in the Northern District of West Virginia, as described by the terms of the Declaration of Trust of the Gene Charles Valentine Trust itself, and by the statements made by Gene Charles Valentine himself under oath in various litigation pending in the United States District Court for the Northern District of West Virginia and in the Circuit Court for Brooke County, West Virginia. About Gene Charles Valentine Trust A business trust created by investment advisor and broker-dealer agent Gene Charles Valentine sought Chapter 11 bankruptcy protection (Bankr. N.D. W.Va. Case No. 12-01078) in Wheeling, West Virginia on Aug. 9, 2012. The Gene Charles Valentine Trust owns commercial and real estate properties in West Virginia, the Financial West Group, the Peace Point Equestrian Center and the Aspen Manor. It estimated $10 million to $50 million in assets and up to $10 million in liabilities. Financial West Investment Group, Inc., doing business as Financial West Group -- http://www.fwg.com/-- is a firm with over 340 registered representatives supervised by 44 Offices of Supervisory Jurisdiction throughout the United States. Financial West Group is a FINRA, and SIPC member and SEC Registered Investment Advisor (over $1 billion under control) that offers a full range of financial products and services. Its corporate office 32 member staff is dedicated to providing registered representatives quality service and technology to allow them to focus on best servicing their investors needs. Aspen Manor -- http://www.aspenmanorresort-- is a resort that claims to be the "The Jewel of the Ohio Valley." Along with its architectural artistry, including hand-carved ceilings, the Manor is filled will original art, statues, historic furniture and artifacts. Bankruptcy Judge Patrick M. Flatley oversees the case. The Trust hired Mazur Kraemer Law Inc., as bankruptcy counsel. According to the case docket, the Trust has until Dec. 7 to file a Chapter 11 Plan and Disclosure Statement. GEO GROUP: S&P Gives 'BB' Rating on $100MM Incremental Term Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB' issue rating and '1' recovery rating to Boca Raton, Fla.-based The GEO Group Inc.'s $100 million incremental term loan A-3 due in August 2015. The incremental term loan A-3 was issued through the incremental debt provision under the company's existing senior secured credit facilities. The company used the proceeds to acquire 100% of the partnership interests in Municipal Corrections Finance L.P. (MCF), to repay MCF's 8.47% bonds due 2016, and to pay transaction- related expenses. Total debt is roughly unchanged because the MCF bonds were already included in GEO's consolidated financial statements as a variable interest entity. "All of our existing ratings on the private correctional and mental health facility owner and operator, including the 'B+' corporate credit rating, remain unchanged. Our long-term rating outlook is stable. We estimate total debt will remain unchanged at about $1.6 billion following the transaction," S&P said. "The corporate credit rating on GEO reflects our view that the company's business risk profile will remain 'fair' over at least the next one to two years, which principally reflects the company's dependence on a concentrated customer base from various levels of the U.S. government. The U.S. government's budget deficit issues heighten this risk. We believe ongoing budget issues will restrict meaningful organic growth through at least 2013," S&P said. "Our rating also reflects our view that the company's financial risk profile will remain 'highly leveraged' over at least the next one to two years. We forecast total debt to EBITDA will remain near 5.0x, funds from operations (FFO) to total debt will remain at about 12%, and EBITDA interest coverage will remain in the mid- 3x area through 2013. In our view, the company's financial policies are aggressive, primarily because we believe the company will continue to sacrifice balance sheet health in order to benefit shareholders. After two recent and sizable acquisitions, the company initiated a share repurchase program in July 2011 and, in February 2012, announced its intent to begin paying a quarterly dividend in September 2012. Since February the company has doubled the amount of the quarterly dividend to $0.20 per share, or about $50 million per year," S&P said. RATINGS LIST The GEO Group Inc. Corporate credit rating B+/Stable/-- Ratings Assigned The GEO Group Inc. Senior secured $100 mil. incremental term loan A-3 due 2015 BB Recovery rating 1 GLOBAL AVIATION: Labor Contract Changes Win Support --------------------------------------------------- Rachel Feintzeig at Dow Jones' Daily Bankruptcy Review reports that senior noteholders are urging a judge to clear Global Aviation Holdings Inc. to revamp five union contracts, a move that would cut the military transporter's expenses by more than $100 million. About Global Aviation Global Aviation Holdings Inc., based in Peachtree City, Ga., is the parent company of North American Airlines and World Airways. Global is the largest commercial provider of charter air transportation for the U.S. military, and a major provider of worldwide commercial global passenger and cargo air transportation services. North American Airlines, founded in 1989 and based in Jamaica, N.Y., operates passenger charter flights using B757-200ER and B767-300ER aircraft. World Airways, founded in 1948 and based in Peachtree City, Ga., operates cargo and passenger charter flights using B747-400 and MD-11 aircraft. Global Aviation, along with affiliates, filed Chapter 11 petitions (Bankr. E.D.N.Y. Case No. 12-40783) on Feb. 5, 2012. Global's lead counsel in connection with the restructuring is Kirkland & Ellis LLP and its financial advisor is Rothschild. Kurtzman Carson Consultants LLC is the claims agent. The Debtors disclosed $589.8 million in assets and $493.2 million in liabilities as of Dec. 31, 2011. Liabilities include $146.5 million on 14% first-lien secured notes and $98.1 million on a second-lien term loan. Wells Fargo Bank NA is agent for both. Global said it will use Chapter 11 to shed 16 of 30 aircraft. In addition, Global said it will use Chapter 11 to negotiate new collective bargaining agreements with its unions and deal with liabilities on multi-employer pension plans. On Feb. 13, 2012, the U.S. Trustee for Region 2 appointed a seven member official committee of unsecured creditors in the case. The Committee tapped Lowenstein Sandler PC as its counsel, and Imperial Capital, LLC as its financial advisor. The Hon. Carla E. Craig has extended the Debtors' exclusive period to file a Chapter 11 plan for each Debtor until Oct. 2, 2012, and the exclusive period to solicit acceptances of a Chapter 11 plan of each Debtor until Dec. 3, 2012. GLYECO INC: Extends Closing Dates of ARI & Enviro-Cool Pacts ------------------------------------------------------------ GlyEco, Inc., agreed with each of Enviro-Cool, LLC, and Antifreeze Recycling, Inc., to amend the closing dates on the preliminary agreements they previously entered for the purpose of finalizing the necessary financial audit, due diligence, and standard closing conditions. Pursuant to the amendments, the closing of the Enviro-Cool agreement will occur on or before Oct. 31, 2012, or on such other date as mutually agreed to by the parties. The closing date of the ARI preliminary agreement will occur on or before Sept. 30, 2012, or on such other date as mutually agreed to upon by the parties. The Company entered into a preliminary agreement with Enviro-Cool, dated May 23, 2012, pursuant to which the Company agreed to purchase from Enviro-Cool all of its assets and business in consideration for an aggregate purchase price of $2,292,000, consisting of 1,500,000 shares of the Company's unregistered common stock, $500,000 in cash, and the assumption or repayment of $292,000 of liabilities. The closing of the transaction was scheduled for on or before Aug. 31, 2012. The Company also entered into a preliminary agreement with ARI dated June 7, 2012, pursuant to which the Company agreed to purchase from ARI all of its glycol-related assets in consideration for an aggregate purchase price of $450,000, consisting of a combination of cash and shares of the Company's unregistered common stock, ratio to be determined with the cash portion not to exceed $95,000. The closing of the transaction was scheduled for on or before Aug. 31, 2012. About GlyEco, Inc. Phoenix, Ariz.-based GlyEco, Inc., is a green chemistry company formed to roll-out its proprietary and patent pending glycol recycling technology that transforms waste glycols, a hazardous material, into profitable green products. Jorgensen & Co., in Lehi, Utah, expressed substantial doubt about GlyEco'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 not yet achieved profitable operations and is dependent on the Company's ability to raise capital from stockholders or other sources and other factors to sustain operations. The Company's balance sheet at June 30, 2012, showed $1.1 million in total assets, $2.1 million in total liabilities, and a stockholders' deficit of $950,887. GMX RESOURCES: Less Than 50% of Noteholders Accept Exchange Offer ----------------------------------------------------------------- GMX Resources Inc. had received, as of immediately after 11:59 p.m., Eastern Time, on Sept. 6, 2012, tenders from the holders of approximately $24.8 million in aggregate principal amount, or approximately 48%, of its outstanding 5.00% Senior Convertible Notes due 2013 and approximately $36.9 million in aggregate principal amount, or approximately 43%, of its outstanding 4.50% Senior Convertible Notes due 2015 in connection with its previously announced exchange offers for the Convertible Notes, which commenced on Aug. 9, 2012. Holders tendering 2013 Notes will receive new Senior Secured Second-Priority Notes due 2018 and shares of the Company's common stock. Holders tendering 2015 Notes will receive New Notes. GMXR has extended the "Expiration Date" for the exchange offers to 5:00 p.m., Eastern Time, on Monday, Sept. 10, 2012, in order to allow additional time for the SEC to complete the qualification of the indenture governing the New Notes under the Trust Indenture Act. Based on the current amount of Convertible Notes tendered to date and notwithstanding the Company's minimum tender condition, the Company intends to accept all those notes that remain validly tendered and not validly withdrawn, subject to satisfaction or waiver of the other conditions of the exchange offers. Any Convertible Notes not tendered and purchased pursuant to the exchange offers will remain outstanding. Holders who have previously validly tendered and not withdrawn Convertible Notes do not need to re-tender their Convertible Notes or take any other action in response to the extension of the exchange offers. The Company has retained Global Bondholder Services Corporation to serve as the information agent. Requests for documents may be directed to Global Bondholder Services Corporation at (212) 430- 3774, or (800) 804-2200, or in writing to 65 Broadway, Suite 404, New York, NY 10006. About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. The Company's strategy is to significantly increase production, revenues and reinvest in increasing production. GMXR's goal is to grow and build shareholder value every day. GMX Resources' balance sheet at June 30, 2012, showed $394.79 million in total assets, $462.46 million in total liabilities and a $67.67 million total deficit. The Company reported net losses of $206.44 million in 2011, $138.29 million in 2010, and $181.08 million in 2009. * * * As reported by the Troubled Company Reporter on Aug. 16, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on GMX Resources to 'CC' from 'CCC+'. "The downgrade to 'CC' reflects the potential for a selective default on GMX's 4.5% senior convertible notes due 2015 -- $86.3 million outstanding as of June 30, 2012 -- due to certain aspects of GMX's exchange offer that would constitute a distressed exchange under our criteria," said Standard & poor's credit analyst Paul B. Harvey. "As part of the exchange offer for its 2013 and 2015 convertible notes, holders of the 2015 notes have the right to exchange $1,000 principle of existing notes for $700 principle of new senior secured second-priority notes due 2018. We view this as a distressed exchange." Holders of the existing 2015 notes, regardless of when purchased, would receive significantly less than the original face value that was promised, S&P said. GORDON PROPERTIES: Failure to Consolidate Was 'Clearly Erroneous' ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the bankruptcy judge made clearly erroneous findings of fact in a substantive consolidation case. Consequently, a U.S. district judge in Alexandria, Virginia, sent the case back to the bankruptcy judge for a new trial. According to the report, the case involved parallel bankruptcies of a company owning real estate and a subsidiary that managed real estate. The management company had virtually no assets, while the real estate company had more than sufficient assets to pay its debts along with all liabilities of the subsidiary, according to the Sept. 7 opinion by U.S. District Judge Leonie M. Brinkema. A condominium association had a claim for more than $400,000, based on successful lawsuits in state court. The bankruptcy judge refused to impose the doctrine of substantive consolidation where the debts and assets of the two companies would be combined. Judge Brinkema, the report adds, said that the bankruptcy judge failed to "fully evaluate equitable considerations" and didn't follow the rule that "courts will not be blinded by corporate forms," according to the report. The report relates that the dispute over substantive consolidation was returned for a new trial in bankruptcy court because the judge in the lower court misinterpreted a state-court ruling to mean that the two companies were legally separate. No creditor would be hurt by consolidation, Judge Brinkema said, because the real estate company had sufficient assets to pay both companies' creditors in full. The case is First Owners Association of Forty Six Hundred Condominium Inc. v. Gordon Properties LLC (In re Gordon Properties Inc.), 12-394, U.S. District Court, Eastern District of Virginia (Alexandria). About Gordon Properties Alexandria, Va.-based Gordon Properties LLC owns 40 condominium units in a high-rise apartment building with both residential and commercial units and two commercial units adjacent to the high- rise building. Gordon Properties' ownership of these condos represents about a 20% interest in the Forty Six Hundred Condominium project -- http://foa4600.org/-- in Alexandria. Gordon Properties also owns one of the adjacent commercial units, a restaurant. Gordon Properties sought Chapter 11 protection (Bankr. E.D. Va. Case No. 09-18086) on Oct. 2, 2009, and is represented by Donald F. King, Esq., at Odin, Feldman & Pittleman PC in Fairfax, Va. Gordon Properties disclosed $11,149,458 in assets and $1,546,344 in liabilities. Condominium Services filed its chapter 11 petition (Bankr. E.D. Va. 10-10581) on Jan. 26, 2010. It scheduled one creditor, the condominium association, with a disputed claim of $436,802.00. The association filed a proof of claim asserting a claim of $453,533.12. A second proof of claim was filed by the Internal Revenue Service for $1,955.45. According to its schedules, if both claims are allowed, it has a net deficit of about $426,900. CSI is wholly owned by Gordon Properties. In February 2012, Judge Mayer denied the motion of the association to substantively consolidate the chapter 11 bankruptcy cases of Gordon Properties and Condominium Services, Inc., the condominium management company. Gordon Properties and CSI opposed the motion. The two cases were previously administratively consolidated. GRAYMARK HEALTHCARE: Lender Approves Acquisition of Foundation -------------------------------------------------------------- On Aug. 31, 2012, Graymark Healthcare, Inc., and certain of its subsidiaries entered into the Second Amendment to Amended and Restated Loan Agreement with Arvest Bank and Oliver Company Holdings, LLC, Roy T. Oliver, Stanton Nelson, and the Roy T. Oliver Revocable Trust. The Amendment amended certain provisions of the Loan Agreement in connection with the Company's pending acquisition of the membership interests of Foundation Surgery Affiliates, LLC, and Foundation Surgical Hospital Affiliates, LLC, and provided for the prepayment of certain amounts under the Loan Agreement. Pursuant to the Amendment, Arvest also consented to the Foundation Transaction and waived certain conditions under the Loan Agreement in connection with the Foundation Transaction. The Amendment amended the Loan Agreement to provide that: * The Company will operate the sleep lab, surgical center and hospital businesses directly or indirectly through its subsidiaries consistent with normal industry practices and governing law and regulations, and will maintain all permits required or advisable to operate such businesses; * Beginning March 31, 2013, and on the last day of each quarter thereafter, the Company will maintain positive EBITDA, where EBITDA is defined as net income for the applicable period (1) plus the following to the extent deducted from net income (i) interest expense, (ii) all income tax expense, (iii) depreciation and amortization expense, and (iv) non-cash charges constituting intangible impairment charges, equity compensation and fixed asset impairment charges and (2) minus (i) any extraordinary items and (ii) one-time or non- recurring gains or losses associated with the sale or disposition of any business, asset, contract or lease; * None of Foundation Surgery Affiliates, Foundation Surgical Hospital Affiliates or any of their respective subsidiaries will be deemed borrowers under the Loan Agreement; * The Company will not make any acquisitions of or capital contributions to or other investments in any person or entity other than planned expansion of the sleep lab, surgery center and hospital businesses in which the Company and Foundation are currently engaged; * Beginning with the quarter commencing April 1, 2013, and thereafter for the term of the Arvest loan, based on the latest four rolling quarters, the Company will maintain a Debt Service Coverage Ratio of not less than 1.25 to 1; and * Beginning March 31, 2013, the Company will continuously maintain Minimum Net Worth determined on a quarterly basis. In addition, the Amendment provides that an event of default occurs if, on or after Jan. 1, 2013, the trading of the Company's stock is suspended for more than 30 days or the stock is delisted from any over-the-counter market on which it is then quoted or traded. In connection with the Amendment, Arvest required that the Company prepay, or cause to be prepaid, an aggregate of $1,184,808, representing all payments of principal and interest that would otherwise become due under the Loan Agreement for the period June 30, 2012, through Dec. 31, 2012, with the principal amount thereof to be paid applied immediately to indebtedness and the interest amount thereof to be held in a special, secured restricted account and applied by Arvest on the dates those interest payments become due, provided that Arvest may apply those interest amounts to indebtedness of the Company in the event of a default. On Aug. 31, 2012, Mr. Roy T. Oliver made the entire prepayment on behalf of the Company. In exchange for making the prepayment, Mr. Oliver received a reduction in the amount of his existing guarantee with Arvest under the Loan Agreement and a promissory note from the Company in the original principal amount equal to the prepayment. Mr. Oliver is currently the beneficial owner of approximately 14.5% of the Company's outstanding common stock. Mr. Oliver also has a non-controlling interest in City Place, LLC, the lessor under the lease of our corporate headquarters and offices. In addition, Stanton Nelson, the Company's Chief Executive Officer, currently serves as Executive Vice President of R.T. Oliver Investment Company, a privately-held company controlled by Mr. Oliver. A copy of the Amended Loan Agreement is available for free at: http://is.gd/ptiCje About Graymark Healthcare Graymark Healthcre, Inc., headquartered in Oklahoma City, Okla., provides care management solutions to the sleep disorder market. As of June 30, 2012, the Company operated 107 sleep diagnostic and therapy centers in 10 states. The Company's balance sheet at June 30, 2012, showed $20.8 million in total assets, $23.2 million in total liabilities, and a stockholders' deficit of $2.4 million. Going Concern Doubt As of June 30, 2012, the Company had an accumulated deficit of approximately $42.3 million and reported a net loss of approximately $7.2 million for the six months then ending. In addition, the Company used approximately $2.4 million in cash from operating activities from continuing operations during the six months ending June 30, 2012. Historically, management has been able to raise the capital necessary to fund the operation and growth of the Company, but the Company can give no assurance that it will be successful in raising the necessary capital to fund the Company's operations. During the three months ended June 30, 2012, the Company did not maintain the minimum cash balance required under the Company's loan agreement with Arvest Bank. In addition, the Company did not make the required principal and interest prepayment due to Arvest Bank on June 30, 2012. Furthermore, the Company is not currently in compliance with the minimum bid price requirement for continued listing on The NASDAQ Capital Market. Under a notice received from NASDAQ, the Company had until June 18, 2012, to regain compliance. The Company received a notice of delisting on June 19, 2012. The Company filed an appeal and went before a hearing with NASDAQ on July 26, 2012. If the Company is delisted from NASDAQ, that will be an event of default under the Company's loan agreement with Arvest Bank. Historically, the Company has been successful in obtaining default waivers from Arvest Bank, but there is no assurance that Arvest Bank will waive any future defaults. Given that the Company is not in compliance with certain covenants under the loan agreement with Arvest Bank, the associated debt has been classified as current on the accompanying consolidated condensed balance sheets. "These uncertainties raise substantial doubt regarding the Company's ability to continue as a going concern," the Company said in its quarterly report for the period ended June 30, 2012. "The consolidated condensed financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern." GRANITE DELLS: Plan Outline Hearing Continued Until Sept. 20 ------------------------------------------------------------ The Hon. Redfield T. Baum of the U.S. Bankruptcy Court for the District of Arizona, according to Granite Dells Ranch Holdings LLC's case docket, has continued until Sept. 20, 2012, at 10 a.m., the hearing to consider adequacy of the Amended Disclosure Statement explaining the proposed Chapter 11 Plan. The Chapter 11 Plan The Troubled Company Reporter reported on June 28, 2012, that the Plan provides for the continuation of the management and development of the property -- approximately 15,000 acres in Yavapai County, Arizona, near the city of Prescott. The Plan also provides that the operations of the Reorganized Debtor will be funded from revenues from mining and grazing leases, sale of parcels of the property, loans from third parties, and equity contributions made by participating investors and holders of Interests that elect to contribute additional capital and to participate. Under the Plan, priority Claims will be paid in full on the Effective Date or in installments over specified periods. Secured Claims will be paid in full, in installments over time and as parcels of the property are sold. Holders of Unsecured Claims will receive installments payments over eight years from the Unsecured Creditor Fund, to be funded by Debtor in the aggregate amount of $5 million. Holders of Investor Claims and holders of equity interest will be provided an election to participate in the funding of approximately $20 million over three years, to cover payments to creditors and other anticipated costs of development of the property. The Interests of Equity Holders who do not choose to participate in the funding of the Reorganized Debtor will be canceled and the Equity Holders will receive nothing on account of their Interests. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/GRANITE_DELLS_ds.pdf About Granite Dells Ranch Holdings Scottsdale, Arizona-based Granite Dells Ranch Holdings LLC filed a bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-04962) in Phoenix on March 13, 2012. Judge Redfield T. Baum PCT Sr. oversees the case. The Debtor is represented by Alan A. Meda, Esq., at Stinson Morrison Hecker LLP. The Debtor disclosed $2.22 million in assets and $157 million in liabilities as of the Chapter 11 filing. Cavan Management Services, LLC is the Debtor's manager. David Cavan, member of the firm, signed the Chapter 11 petition. Arizona ECO Development LLC, which acquired a $83.2 million 2006 loan by the Debtor, is represented by Snell & Wilmer L.L.P. The resolution authorizing the Debtor's bankruptcy filing says the Company is commencing legal actions against Stuart Swanson, AED, and related entities relating to the purchase by Mr. Swanson of a promissory note payable by the Company to the parties that sold a certain property to the Company. According to Law 360, AED sued Granite Dells on March 6 asking the Arizona court to appoint a receiver. Arizona ECO is foreclosing on a secured loan backed by 15,000 acres of Arizona land. The United States Trustee said that an official committee has not been appointed in the bankruptcy case of Granite Dells because an insufficient number of unsecured creditors have expressed interest in serving on a committee. GSC GROUP: Lender's Defamation Claims Nixed in Asset Sale Row ------------------------------------------------------------- Bill Donahue at Bankruptcy Law360 reports that Judge Paul G. Feinman on Thursday tossed Black Diamond Capital Management LLC's Mafia-themed defamation accusations out of a lawsuit stemming from the now-resolved bankruptcy of GSC Group Inc., in the latest twist for the often-contentious restructuring. Bankruptcy Law360 says Judge Feinman dismissed claims that a group of GSC's minority lenders defamed majority lender Black Diamond by making statements to a news reporter that allegedly compared the hedge fund to the Corleone family from "The Godfather." About GSC Group Florham Park, New Jersey-based GSC Group, Inc. -- http://www.gsc.com/-- was a private equity firm that specialized in mezzanine and fund of fund investments. Originally named Greenwich Street Capital Partners Inc. when it was a subsidiary of Travelers Group Inc., GSC became independent in 1998 and at one time had $28 billion of assets under management. Market reverses, termination of some funds, and withdrawal of customers' investments reduced funds under management at the time of bankruptcy to $8.4 billion. GSC Group, Inc., filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B. Solow, Esq., at Kaye Scholer LLP, served as the Debtor's bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's notice and claims agent. Capstone Advisory Group LLC served as the Debtor's financial advisor. The Debtor estimated its assets at $1 million to $10 million and debts at $100 million to $500 million as of the Chapter 11 filing. Since Jan. 7, 2011, the Debtors have been operated by James L. Garrity Jr., as Chapter 11 trustee for the Debtors. The Chapter 11 trustee tapped Shearman & Sterling LLP as his counsel, and Togut, Segal & Segal LLP as his conflicts counsel. No committee of unsecured creditors has been appointed in the case. The Chapter 11 trustee completed the sale of business in July 2011 and filed a liquidating Chapter 11 plan and explanatory disclosure statement in late August. The bankruptcy court authorized the trustee to sell the business to Black Diamond Capital Finance LLC, as agent for the secured lenders. Proceeds were used to pay secured claims. The price paid by the lenders' agent was designed for full payment on $256.8 million in secured claims, with $18.6 million cash left over. Black Diamond bought most assets with a $224 million credit bid, a $6.7 million note, $5 million cash, and debt assumption. A minority group of secured lenders filed an appeal from the order allowing the sale. Through a suit in state court, the minority lenders failed to halt Black Diamond from completing the sale. The Chapter 11 Trustee and Black Diamond have filed rival repayment plans for GSC Group. As reported in the TCR on Dec. 16, 2011, Hilary Russ at Bankruptcy Law360 related that the Chapter 11 trustee for GSC Group, Inc., reached a handshake deal on Dec. 13, 2011, ending a bitter dispute with Black Diamond that delayed a $235 million asset sale. Adam Goldberg, Esq., and Douglas Bacon, Esq., at Latham & Watkins, represent Black Diamond Capital Management, LLC, as counsel. Patrick J. Nash, Jr., Esq. and Paul Wierbicki, Esq. of Kirkland & Ellis LLP serve as counsel to Black Diamond Capital Management, LLC. HALIFAX GROUP: Parties-in-Interest Want Case Dismissal/Conversion ----------------------------------------------------------------- Parties-in-interest asked the U.S. Bankruptcy Court Eastern District of New York to: i) dismiss or convert the Chapter 11 cases of Halifax Group LLC, et al., to that under Chapter 7 of the Bankruptcy Code; or in the alternative, ii) modify the automatic stay pursuant to Section 362(d) of the Bankruptcy Code to permit creditors to enforce their rights as against the assets comprising of various parcels of real property. Creditor DLJ Mortgage Capital, Inc., wants case dismissal or the authorization to enforce its rights against the assets comprising of various parcels of real property located in Kings and Queens Counties. According to DLJ, the Chapter 11 cases of Debtors Loring Estates LLC and Edgewater Development Inc. must be dismissed because Thomas Kontogiannis, by his own admission, lacked the authority to act on behalf of these entities, and with respect to all of the Chapter 11 cases, they were commenced in bad faith. DLJ said, in its motion, that Mr. Kontogianni purportedly signed the Chapter 11 petitions with respect to Loring, Edgewater, and Group Kappa. Secured creditor Stout Street Fund I, LP, stated that Loring and Halifax filed their Chapter 11 petitions in bad faith, for the sole purpose of interfering with their creditors' ability to enforce the creditors' rights to collect debts that Loring and Halifax have not contested against secured collateral in which Loring and Halifax have no equity. Tracy Hope Davis, the U.S. Trustee for Region 2, will move before the Hon. Nancy Hershey Lord on Sept. 19, 2012, at 3 p.m. to enter an order dismissing the case or, in the alternative, convert the case to Chapter 7 of the Bankruptcy Code. About Halifax Group Long Island real estate developer Thomas Kontogiannis have sent five entities to Chapter 11. Halifax Group LLC filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 12-45736) on Aug. 6, 2012. Mr. Kontogiannis on Aug. 7 filed in bankruptcy court in Brooklyn (Bankr. E.D.N.Y.) Chapter 11 petitions for four entities: Debtor Case No. ------ -------- Loring Estates LLC 12-45757 Edgewater Development, Inc. 12-45759 Group Kappa Corp. 12-45761 Plaza Real Estate Holding Inc 12-45764 Each of the Debtors disclosed debt of $48.27 million to DLJ Mortgage Capital, Inc., on a bank loan. In October 2011, the U.S. District Court in Brooklyn sentenced Mr. Kontogiannis to 9 years imprisonment for leading a mortgage fraud conspiracy resulting in more than $98 million in losses. A meeting of creditors was scheduled for Sept. 10, 2012. HANOVER INSURANCE: Fitch Affirms 'BB' Rating on Junior Debentures ----------------------------------------------------------------- Fitch Ratings has affirmed the 'A-' Insurer Financial Strength (IFS) rating of The Hanover Insurance Company, the principal operating subsidiary of The Hanover Insurance Group (NYSE: THG). Fitch has also affirmed the following ratings for THG: -- Issuer Default Rating (IDR) at 'BBB'; -- Senior unsecured notes at 'BBB-'. The Rating Outlook is Stable. THG's ratings reflect adequate operating subsidiary capitalization and Fitch's belief that THG's operating subsidiaries will continue to generate reasonable internal capital over the intermediate term. GAAP operating leverage was estimated at 1.69x and net leverage was 4.42x at June 30, 2012. In recent years, THG has focused more rigorously on exposure management and rate adequacy. Fitch believes these changes reflect a more balanced risk appetite and position the company for improved profitability and underwriting stability over the intermediate term. The company may be challenged, however, to pare back expense levels following investments in technology and process improvements designed to drive growth. THG has successfully increased prices in homeowners insurance over the last two years and is experiencing an improving price environment in commercial lines. Importantly, THG is adjusting its pricing for a higher expectation of the weather impact. In the first six months of 2012 THG's calendar year combined ratio decreased to 101% from 107.6% for the same period in 2011, and compared to 105.1% and 100.6% for the full year 2011 and 2010, respectively. Catastrophe losses have been higher than normal for the past three years, impacting the combined ratio by 5.5 points in the first six months of 2012 and 10.0 points and 5.6 points for the full year 2011 and 2010, respectively. Growth in commercial lines has primarily been through renewal rights transactions and acquisitions where THG has focused on smaller, easy-to-integrate acquisitions. However, in 2011 THG's acquisition of Chaucer Holdings plc (Chaucer), at approximately $493 million, represented a significantly larger diversification effort. While the acquisition advances THG's specialty strategy and provides scale and diversification benefits, Fitch notes the uncertainty tied to entering a new market outside of the U.S. and ultimately meeting return objectives for the transaction given the cyclical and competitive nature of Chaucer's business. In addition, several credit factors deteriorated moderately post- closing, including an increase in financial leverage. Key ratings triggers that could lead to an upgrade include: underwriting and investment performance comparable to higher rated companies; moderate improvement in GAAP operating leverage and net leverage; and maintaining run rate holding company financial leverage ratio (FLR) below 25%. Key ratings triggers that could lead to a downgrade include: a material deterioration in THG's reserve adequacy, particularly regarding Chaucer; a material deterioration in underwriting or investment performance of the combined organization relative to peers; and GAAP operating leverage greater than 2.0x and net leverage greater than 4.75x for the combined organization. Fitch affirms the following ratings with a Stable Outlook: The Hanover Insurance Group -- IDR at 'BBB'; -- 7.5% senior notes due 2020 'BBB-'; -- 6.375% senior unsecured notes due 2021 at 'BBB-'; -- 7.625% senior unsecured notes due 2025 at 'BBB-'; -- 8.207% junior subordinated debentures due 2027 at 'BB'. The Hanover Insurance Company -- IFS at 'A-'. Citizens Insurance Company of America -- IFS at 'A-'. HARRY GREEN: Judge Dismisses Chapter 11 Bankruptcy Case ------------------------------------------------------- The Spokesman-Review reports that Post Falls Landing developer Harry Green's bankruptcy was dismissed by Chief Bankruptcy Judge Terry L. Myers, Liberty Bankers Life Insurance Company to proceed with foreclosure on the city center site along Spokane Street and the Spokane River. According to the report, the bankruptcy canceled an auction sale on the Mr. Green's property. The report relates the firm is seeking $8.2 million. Shelly Enderud, Post Falls interim city administer and finance director, said the city was pleased with the decision because it wants to see the city center developed into a vibrant corridor/Brian Walker, Coeur d'Alene Press. Harry Green filed for Chapter 11 corporate bankruptcy on Dec. 19, 2011. HEALTHSOUTH CORP: Moody's Rates $250MM Sr. Unsecured Notes 'B1' --------------------------------------------------------------- Moody's Investors Service assigned a B1 (LGD 4, 62%) rating to HealthSouth Corporation's (HealthSouth) proposed offering of $250 million of senior unsecured notes due 2024. Moody's understands that the proceeds of the offering will be used to repay amounts outstanding on the company's revolving credit facility, fund the call for a portion of the 7.25% notes due 2018 and 7.75% notes due 2022 and for general corporate purposes. HealthSouth's Corporate Family and Probability of Default Ratings of Ba3 remain unchanged given Moody's expectation that credit metrics will not be meaningfully impacted by this transaction. However, certain LGD assessments are being revised to reflect the reduction in the senior secured revolver and increase in the amount of senior unsecured notes in the capital structure. The rating outlook remains stable. Following is a summary of Moody's rating actions. Rating assigned: $250 million senior unsecured notes due 2024, B1 (LGD 4, 62%) Senior unsecured shelf, (P)B1 Ratings unchanged/LGD assessments revised: Corporate Family Rating, Ba3 Probability of Default Rating, Ba3 $600 million senior secured revolving credit facility expiring 2017, to Baa3 (LGD 1, 7%) from Baa3 (LGD 2, 10%) 7.25% senior unsecured notes due 2018, to B1 (LGD 4, 62%) from B1 (LGD 4, 67%) 8.125% senior unsecured notes due 2020, to B1 (LGD 4, 62%) from B1 (LGD 4, 67%) 7.75% senior unsecured notes due 2022, to B1 (LGD 4, 62%) from B1 (LGD 4, 67%) Speculative Grade Liquidity rating at SGL-2 Ratings Rationale The Ba3 Corporate Family Rating reflects HealthSouth's solid credit metrics and Moody's expectation that such metrics will continue to improve modestly as strong free cash flow will allow the company to grow its business without the use of incremental debt. Moody's also acknowledges HealthSouth's considerable scale and geographic diversification that should allow the company to adjust to or mitigate payment reductions more easily than many other inpatient rehabilitation providers. However, Moody's also considers risks associated with HealthSouth's reliance on the Medicare program for a significant portion of revenue and limited services in one niche of the post-acute continuum of care. The rating also reflects Moody's concerns with the uncertainty around the implementation of provisions of the healthcare reform legislation and the potential for greater Medicare reimbursement pressure starting in 2013. Moody's would need to gain additional comfort around the company's high exposure to Medicare and the potential for negative reimbursement changes prior to a ratings upgrade. However, if this was accomplished, the ratings could be upgraded if HealthSouth can sustain leverage below 3.5 times and interest coverage above 3.0 times. If Moody's expects debt to EBITDA to increase and be sustained above 4.5 times, either through unforeseen adverse developments in Medicare reimbursement, a significant debt financed acquisition, a change in appetite for shareholder initiatives, or a deterioration in operating performance the ratings could be downgraded. The principal methodology used in rating HealthSouth was the Global Healthcare Service Providers Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. HealthSouth is the largest operator of inpatient rehabilitation hospitals. As of June 30, 2012, the company operated 99 inpatient rehabilitation hospitals. The company also provides outpatient services through a network of 26 outpatient satellite clinics, located within or near the company's rehabilitation hospitals, and 25 hospital-based home health agencies. HealthSouth recognized approximately $2.1 billion of revenue in the twelve months ended June 30, 2012 before considering the provision for doubtful accounts. HILAND PARTNERS: S&P Gives 'B' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Hiland Partners L.P. "At the same time, we assigned an issue-level rating of 'B-' and a recovery rating of '5' to the partnership's and Hiland Partners Finance Corp.'s $350 million senior unsecured notes due 2020. The '5' recovery rating indicates that lenders can expect modest (10% to 30%) recovery if a payment default occurs. The outlook is stable," S&P said. "Our ratings on Enid, Okla.-based Hiland reflect its 'weak' business risk profile and 'aggressive' financial risk profile," said Standard & Poor's credit analyst Michael Grande. "Hiland is a natural gas gathering and processing and crude oil logistics limited partnership with a focus in the Bakken Shale and Mid- Continent regions of the U.S. Ratings reflect the partnership's limited scale and geographic diversity, significant exposure to volatile commodity prices, and high financial leverage. We believe Hiland's growing asset base in the oil-rich Williston Basin and a supportive owner only partly offset these risks." "The stable outlook on Hiland reflects our view that the partnership will have adequate liquidity to execute its growth strategy in the Bakken Shale region and reduce total debt to EBITDA to the 3.5x area by 2013. A ratings upgrade is unlikely during the next 12 to 18 months because of Hiland's small scale and limited geographic focus. However, we could consider an upgrade if the partnership expands its geographic footprint and keeps leverage at about 3x. We could lower the rating if Hiland's total debt to EBITDA remains at about 5x, and liquidity becomes constrained and its owner does not infuse additional capital," S&P said. HOMELAND SECURITY: Trevor Stoffer Discloses 11% Equity Stake ------------------------------------------------------------ In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Trevor Stoffer disclosed that, as of Aug. 28, 2012, he beneficially owns 1,169,905 shares of common stock of Timios National Corporation, formerly known as Homeland Security Capital Corporation, representing 11% of the shares outstanding. A copy of the filing is available for free at http://is.gd/Ofyz6x About Homeland Security Homeland Security Capital Corporation is an international provider of specialized technology-based radiological, nuclear, environmental disaster relief and electronic security solutions to government and commercial customers. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Coulter & Justus, P.C., in Knoxville, Tennessee, noted that Related Party Senior Notes Payable totalling $5.55 million are due and payable. As of Dec. 31, 2011, the Company has a net capital deficiency in addition to a working capital deficiency, which raises substantial doubt about its ability to continue as a going concern. The Company also reported a net loss of $3.98 million on $0 of net revenue for the year ended June 30, 2011. The Company's balance sheet at June 30, 2012, showed $9.03 million in total assets, $11.82 million in total liabilities, $169,768 in warrants payable, and a $2.96 million total stockholders' deficit. HOMELAND SECURITY: Thomas McMillen Discloses 13.8% Equity Stake --------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Thomas McMillen disclosed that, as of Aug. 28, 2012, he beneficially owns 1,476,280 shares of common stock of Timios National Corporation, formerly known as Homeland Security Capital Corporation, representing 13.8% of the shares outstanding. A copy of the filing is available for free at: http://is.gd/s3bDC4 About Homeland Security Homeland Security Capital Corporation is an international provider of specialized technology-based radiological, nuclear, environmental disaster relief and electronic security solutions to government and commercial customers. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Coulter & Justus, P.C., in Knoxville, Tennessee, noted that Related Party Senior Notes Payable totalling $5.55 million are due and payable. As of Dec. 31, 2011, the Company has a net capital deficiency in addition to a working capital deficiency, which raises substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $3.98 million on $0 of net revenue for the year ended June 30, 2011. The Company's balance sheet at June 30, 2012, showed $9.03 million in total assets, $11.82 million in total liabilities, $169,768 in warrants payable, and a $2.96 million total stockholders' deficit. HUBBARD PROPERTIES: Panel Dissolved at Assignee Creditor's Request ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida that the Official Committee of Unsecured Creditors in the Chapter 11 case of Hubbard Properties, LLC, is dissolved as of June 18, 2012. On June 11, Marketing Solution Publications, Inc., the assignee unsecured creditor, asked the Court to reconstitute or dissolve the Committee appointed. Specifically, the assignee asked that the Court, among other things: a. remove appropriate members of the Creditors Committee who no longer satisfy the requirements of 11 U.S.C. Section 1102(a)(1); b. add appropriate members to the Creditors Committee to satisfy the requirements of 11 U.S.C. Section 1102 (a)(4); or c. dissolve the Creditors Committee. The assignee unsecured creditor said that it is not in agreement with many of the actions taken by the Creditors Committee. The Court also ordered that counsel for the Creditors Committee, Phelps Dunbar, LLP, is relieved of all responsibility as counsel effective as of June 18, 2012. Phelps represented the Committee after Hill Ward & Henderson's attorneys representing the Committee left HWH and joined the law firm Phelps Dunbar LLP. About Hubbard Properties Hubbard Properties owns and operates a retail and entertainment complex, located in Madeira Beach, Florida, commonly known as the John's Pass Boardwalk. Investors Warranty of America, Inc. (IWA) claims that it is owed $28,404,980 secured by a mortgage on the Property and an assignment of rents and related security interests. Hubbard Properties, LLC, filed for Chapter 11 protection (Bankr. M.D. Fla. Case No. 11-01274) in Tampa, Florida, on Jan. 27, 2011. David S. Jennis, Esq., and James Allen McPheeters, Esq., at Jennis & Bowen, P.L., in Tampa, Fla., serve as bankruptcy counsel. The Debtor also tapped Bacon & Bacon, P.A., as special counsel; Tony Buzbee and The Buzbee Law Firm as special counsel in connection with the assessment and recovery of the Debtor's BP oil spill claim, Van Middlesworth and Company, P.A., as accountant; and Claims Strategies Group, LLC, as claim consultant. Phelps Dunbar LLP represents the Committee. The law firm of Hill, Ward and Henderson, P.A., previously represented the Official Committee of Unsecured Creditors as counsel. In its amended schedules, the Debtor disclosed $12.6 million in assets and $23.8 million in liabilities. HUDBAY MINERALS: Moody's Assigns 'B2' CFR/PDR; Outlook Stable ------------------------------------------------------------- Moody's Investors Service assigned Hudbay Minerals Inc. a B2 corporate family rating, B2 probability of default rating, B3 rating to its proposed $400 million of senior unsecured notes and SGL-3 speculative grade liquidity rating. The ratings outlook is stable. Ratings Rationale Hudbay's B2 corporate family rating is heavily influenced by its small scale, concentration of near term activity in one underground copper and zinc mine in Canada and sizeable execution risks associated with the company's three development projects, particularly the $1.5 billion Constancia copper mine in Peru and $700 million Lalor copper, zinc and gold mine in Canada. Despite recent softening of commodity prices and two of Hudbay's smaller mines (Trout Lake and Chisel North) reaching the end of their mine life in 2012, the company's low-cost position, stable production at its flagship 777 mine and initial production at Lalor should support a base of earnings until production at its new developments begin to ramp up more substantially in late 2014. While free cash flow will remain heavily negative through 2013, the company has substantial cash balances to fund this shortfall and Moody's expects Hudbay's adjusted Debt/ EBITDA will remain below 5x through this timeframe. Moody's believes Hudbay will require approximately $300 million to $400 million in additional resources to fully fund its two main development projects and to retain an acceptable liquidity buffer through 2014. The rating incorporates Moody's expectation that Hudbay will predominately fund any such requirement with equity or equity-like financing rather than debt. Hudbay's SGL-3 rating reflects Moody's expectation that the company will maintain adequate liquidity through the end of 2013. This expectation is supported by pro-forma cash balances of $1.9 billion (including proceeds from the notes issue and cash to be received from a recent streaming transaction) and access to a $300 million revolver (matures November 2014). Moody's expects these resources together with a modest amount of free cash flow from its existing operations will be sufficient to fund expected capex of roughly $1.8 billion for the new mine developments through 2013. While covenant headroom is currently ample, it will steadily reduce as the company consumes its cash balances (due to a net debt test) and as interest expense increases (due to the notes issue). Nonetheless, Moody's does not expect Hudbay's covenants will be problematic. The B3 rating on the senior unsecured notes incorporates their subordinated position relative to the company's $300 million secured revolver. The stable outlook reflects Moody's expectation that the company will continue to maintain discipline with respect to the use of debt in its capital structure and adjust or slow capital spending should market conditions deteriorate. Going forward, the ratings could be lowered if Hudbay experiences any significant operational difficulties, capital requirements for its development projects increase significantly, or if the company fails to maintain at least adequate liquidity. A downgrade would also be considered if Moody's expected Hudbay's adjusted Debt/ EBITDA to exceed 5x on a sustainable basis. Upward rating pressure is limited at this time due to the significant capital expenditures required over the next several years and the execution risk related to the development of its mines. The principal methodology used in rating Hudbay Minerals was the Global Mining Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. HUSSEY COPPER: Wins Confirmation of 43% Liquidating Plan -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Hussey Copper Corp. sold the business late last year for $107.75 million and secured the signature of the bankruptcy judge on a confirmation order last week approving the liquidating Chapter 11 plan. Unsecured creditors with $33.4 million in claims were shown in the disclosure statement as having a 43% recovery, as a midrange estimate. According to the report, the business was purchased by Libertas Copper, an affiliate of Patriarch Partners LLC. Confirming a plan was made possible from settlement with the Pension Benefit Guaranty Corp. regarding termination of pension plans. The PBGC ended up without claims in the bankruptcy. About Hussey Copper Hussey Copper Corp., based in Leetsdale, Pennsylvania, is one of the leading manufacturers of copper products in the United States. Hussey Copper was founded in Pittsburgh in 1848. The Company and its affiliates, which operate one manufacturing facility in Leetsdale and two facilities in Eminence, Kentucky, manufacture "a wide range of value-added copper products and copper-nickel products. The Company has more than 500 full-time employees. Hussey Copper Corp. filed a Chapter 11 petition (Bankr D. Del. Case No. 11-13010) on Sept. 27, 2011, with a deal to sell substantially all assets. Five other affiliates also filed separate petitions (Case Nos. 11-13012 to 11-13016). In its amended schedules, HCL Liquidation disclosed $80,760,296 in assets and $71,453,842 in liabilities as of the Chapter 11 filing. Mark Minuti, Esq., at Saul Ewing LLP, serves as counsel to the Debtors. Donlin Recano & Company Inc. is the claims and notice agent. The Debtors tapped Winter Harbor, LLC in substitution for Huron Consulting Services LLC. An official creditors' committee has been appointed in the case. The panel selected Lowenstein Sandler PC as counsel. The panel selected FTI Consulting, Inc. as restructuring and financial advisor. Hussey filed for bankruptcy with a deal to sell the assets to stalking horse bidder, KHC Acquisitions LLC, a unit of Kataman Metals LLC. US private equity firm Patriarch Partners beat Kataman at an auction and officially acquired Hussey on Dec. 16, 2011. The buyout firm of distressed debt mogul Lynn Tilton acquired Hussey for $107.8 million after a nine-hour, 34-round auction. Kataman is represented in the case by David D. Watson, Esq., and Scott Opincar, Esq., at McDonald Hopkins LLC, in Cleveland. Counsel to PNC Bank NA, as lender, issuer and agent for the Debtors' secured lenders, are Lawrence F. Flick II, Esq., Blank Rome LLP, in New York, and, Regina Stango Kelbon, Esq., at Blank Rome LLP, in Wilmington. Following the sale, Bankruptcy Judge Brendan L. Shannon approved the name change of Hussey Copper Corp. et al., to HCL Liquidation Ltd. ICEWEB INC: Amends 38.9 Million Common Shares Prospectus -------------------------------------------------------- Iceweb, Inc., filed with the U.S. Securities and Exchange Commission amendment no. 2 to the Form S-1 registration statemement relating to the sale by David Lane, Michael Schmahl, Kenneth Ikemiya, et al., of up to 38,996,445 shares of the Company's common stock, which includes 13,455,958 shares which are presently outstanding and 25,540,487 shares issuable upon the exercise of warrants with an exercise price of $0.15 per share. The prices at which the selling security holders may sell shares will be determined by the prevailing market price for the shares or in negotiated transactions. The Company will not receive any proceeds from the sale of these shares by the selling security holders. However, the Company will receive proceeds from the exercise of the warrants if they are exercised for cash by the selling security holders. The Company will bear all costs relating to the registration of these shares of its common stock, other than any selling security holders' legal or accounting costs or commissions. The Company's common stock is quoted on the regulated quotation service of the OTC Bulletin Board under the symbol "IWEB". The last reported sale price of the Company's common stock as reported by the OTC Bulletin Board on Sept. 5, 2012, was $0.08 per share. A copy of the amended prospectus is available for free at: http://is.gd/jyyFM0 About IceWEB Inc. Sterling, Va.-based IceWEB, Inc., manufactures high performance unified data storage appliances with enterprise storage management capabilities. The Company's balance sheet at June 30, 2012, showed $3.1 million in total assets, $7.9 million in total liabilities, and a stockholders' deficit of $4.8 million. Sherb & Co., LLP, in Boca Raton, Florida, stated in their report on the consolidated financial statements of the Company for the years ended Sept. 30, 2011, and 2010, that the Company had net losses of $4.7 million and $7.0 million respectively, for the years ended Sept. 30, 2011, and 2010, which raise substantial doubt about the Company's ability to continue as a going concern. IMAGEWARE SYSTEMS: Certified to Work on NuVola Cloud Platform ------------------------------------------------------------- ImageWare Systems, Inc., announced certification on the NuVola Private Cloud Platform from Fujitsu Frontech North America Inc. The patented ImageWare multi-modal biometric management engine has been certified to allow rapid deployment of biometric security across NuVola Private Cloud Platform for the enterprise. "We are very excited to certify ImageWare on the NuVola Private Cloud Platform, as their core biometric management engine enhances a critical function of NuVola: Security," said Vic Herring, Vice President of Sales and Marketing, Cloud Infrastructure Solutions Group at Fujitsu Frontech North America. "Noting the market concerns over cloud layer security, we feel ImageWare provides NuVola further differentiation with the addition of their biometric engine." On May 15, ImageWare finalized and released version 2.0 of its flagship Biometric Engine. The engine provides superior integration with legacy identity management solutions and enterprise service bus technologies, and is the only patented agnostic, open-architecture biometric recognition software solution that works with virtually all existing security hardware, software and algorithms. "Working with Fujitsu and the NuVola Private Cloud Platform solution brings ImageWare to the private cloud with a global partner and a leading innovator in the IT space," said Jim Miller, President and CEO of ImageWare Systems. "Being certified on Fujitsu represents the full convergence of Fujitsu's leading server and storage technology, and our industry-leading multi- modal biometric management engine. We are proud to be part of the NuVola Private Cloud Platform and look forward to bringing cloud- ready biometric solutions directly to our customers." About ImageWare Systems Headquartered in San Diego, California, ImageWare Systems, Inc., is a leader in the emerging market for software-based identity management solutions, providing biometric, secure credential, law enforcement and enterprise authorization. Its "flagship" product is the IWS Biometric Engine. Scalable for small city business or worldwide deployment, the Company's biometric engine is a multi- biometric platform that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. The Company's identification products are used to manage and issue secure credentials, including national IDs, passports, driver licenses, smart cards and access control credentials. Its law enforcement products provide law enforcement with integrated mug shot, fingerprint LiveScan and investigative capabilities. The Company also provides comprehensive authentication security software. The Company reported a net loss of $3.18 million in 2011, compared with a net loss of $5.05 million in 2010. The Company's balance sheet at June 30, 2012, showed $7.80 million in total assets, $6.60 million in total liabilities and $1.19 million in total shareholders' equity. INFUSION BRANDS: Engages Thomas Howell as New Accounting Firm ------------------------------------------------------------- Infusion Brands International, Inc., hires Thomas, Howell, Ferguson, P.A., as its new independent registered public accounting firm, effective Sept. 1, 2012. Meeks International, Inc., the Company's former accounting firm, was acquired by Thomas Howell in a transaction pursuant to which MIL merged its operations into THF and the professional staff and partners of MIL joined THF as employees with Charlie M. Meeks becoming a partner of THF. As a result of the merger, MIL effectively resigned as the Company's independent registered public accounting firm on Sept. 1, 2012. The Board of Directors of the Company approved and ratified the engagement of Thomas Howell. The reports of MIL on the consolidated financial statements of the Company for the fiscal years ended Dec. 31, 2011, and Dec. 31, 2010, did not contain an adverse opinion nor a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except MIL's audit reports for the years ended Dec. 31, 2011, and 2010 stated that certain conditions raised substantial doubt about the Company's ability to continue as a going concern. 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 June 30, 2012, showed $6.70 million in total assets, $8.85 million in total liabilities, $30.85 million in redeemable preferred stock, and a $33 million total deficit. INOVA TECHNOLOGY: Amends 375 Million Common Shares Prospectus ------------------------------------------------------------- Inova Technology, Inc., filed with the U.S. Securities and Exchange Commission amendment no. 2 to the Form S-1 relating to the offering of up to 375,000,000 shares of common stock of the Company, in a self-underwritten direct public offering, without any participation by underwriters or broker-dealers. The shares will be sold through the efforts of the Company's officers and directors. There is no minimum number of shares to be sold under this offering. The Company's common stock is quoted on the OTC Bulletin Board under the symbol "INVA.OB". On Aug. 23, 2012, the last reported sale price for the Company's common stock was $0.01 per share. A copy of the amended prospectus is available for free at: http://is.gd/ASWDW8 About Inova Technology Based in Las Vegas, Nevada, Inova Technology, Inc. (OTC BB: INVA) -- http://www.inovatechnology.com/-- through its subsidiaries, provides information technology (IT) consulting services in the United States. It also manufactures radio frequency identification (RFID) equipment; and provides computer network solutions. The company was formerly known as Edgetech Services Inc. and changed its name to Inova Technology, Inc., in 2007. The Company reported a net loss of $1.24 million for the year ended April 30, 2012, compared with a net loss of $3.35 million during the prior year. The Company's balance sheet at April 30, 2012, showed $8.67 million in total assets, $19.81 million in total liabilities, and a $11.14 million total stockholders' deficit. MaloneBailey, LLP, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2012. The independent auditors noted that Inova incurred losses from operations for the years ended April 30, 2012, and 2011 and has a working capital deficit as of April 30, 2012, which raise substantial doubt about Inova's ability to continue as a going concern. IPS CORP: Moody's Withdraws 'B3' Corporate Family Rating -------------------------------------------------------- Moody's Investors Service has withidrawn all of the ratings on IPS Corporation including the B3 corporate family rating. The following ratings have been withdrawn: B3 corporate family rating; B3 probability of default rating; B1 (LGD3 30% from 31%) on the $68 million first lien term loan due July 2013; and Caa2 (LGD5, 86% from 85%) on the $50 million subordinated notes due June 2014 Ratings Rationale Moody's has withdrawn the rating because it believes it has insufficient or otherwise inadequate information to support the maintenance of the rating. The methodologies used in this rating were Global Manufacturing published in December 2010, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in July 2009. Headquartered in Compton, CA, IPS Corporation is a manufacturer of a wide range of adhesive cements and plumbing products primarily for the new residential, remodeling and commercial construction markets. IPS' products target professional contractors and are sold under a variety of brand names including Weld-On and Watertite, primarily through the wholesale channel. JACKSONVILLE BANCORP: New COO to Get $200,000 Annual Salary ----------------------------------------------------------- Jacksonville Bancorp, Inc., previously appointed Margaret A. Incandela as Chief Operating Officer of the Company and of the Company's wholly owned subsidiary, The Jacksonville Bank, subject to regulatory approval The Company, the Bank and Ms. Incandela entered into an Executive Employment Agreement dated Sept. 5, 2012. Ms. Incandela earns a base salary of $200,000, which may be increased from time to time at the sole discretion of the Company's board of directors, and she may earn an annual cash bonus of up to 33 1/3% of her base salary, which actual amount will be determined at the sole discretion of the Company's board of directors. Ms. Incandela is also entitled to participate in all medical and health care benefit plans provided by the Bank for its employees, and any current or future employee benefit plans and arrangements in which executive officers of the Company or the Bank are permitted to participate. The term of the Employment Agreement is three years, subject to automatic extension for additional one-year periods thereafter. If at any time during the first year of the initial term of the Employment Agreement, the Company completes a recapitalization involving the sale of at least $50 million in common stock, the Company has agreed to award Ms. Incandela, under the Company's current stock incentive plan, restricted shares of the Company's common stock or options to purchase shares of the Company's common stock, subject to applicable regulatory and shareholder approvals. Up to 1.5% of the aggregate number of shares issued in the recapitalization would be subject to that award, and the award would vest 20% upon closing of the recapitalization, and 40% upon each of the first and second anniversaries of such closing. During the term of the Employment Agreement and for a period of one year thereafter, Ms. Incandela has agreed not to compete with the Bank or the Company within the Jacksonville statistical metropolitan area, or solicit employees from the Bank or the Company. A copy of the Employment Agreement is available for free at: http://is.gd/ekL9vJ About Jacksonville Bancorp Jacksonville Bancorp, Inc., a bank holding company, is the parent of The Jacksonville Bank, a Florida state-chartered bank focusing on the Northeast Florida market with approximately $583 million in assets and eight full-service branches in Jacksonville, Duval County, Florida, as well as the Company's virtual branch. The Jacksonville Bank opened for business on May 28, 1999 and provides a variety of community banking services to businesses and individuals in Jacksonville, Florida. The Company's balance sheet at June 30, 2012, showed $583.0 million in total assets, $564.0 million in total liabilities, and shareholders' equity of $19.0 million. According to the Form 10-Q for the period ended June 30, 2012, the Bank was adequately capitalized at June 30, 2012. Depository institutions that are no longer "well capitalized" for bank regulatory purposes must receive a waiver from the FDIC prior to accepting or renewing brokered deposits. The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") generally prohibits a depository institution from making any capital distribution (including paying dividends) or paying any management fee to its holding company, if the depository institution would thereafter be undercapitalized. The Bank had a Memorandum of Understanding ("MoU") with the FDIC and the Florida Office of Financial Regulation that was entered into in 2008, which required the Bank to have a total risk-based capital of at least 10% and a Tier 1 leverage capital ratio of at least 8%. Recently, on July 13, 2012, the 2008 MoU was replaced by a new MoU, which, among other things, requires the Bank to have a total risk-based capital of at least 12% and a Tier 1 leverage capital ratio of at least 8%. "We did not meet the minimum capital requirements of these MOUs at June 30, 2012, and Dec. 31, 2011, when the Bank had total risk-based capital of 8.09% and 9.85% and Tier 1 leverage capital of 5.26% and 6.88%, respectively." JOHN SMITH: Arkansas Coach Files for Chapter 7 Bankruptcy --------------------------------------------------------- The Associated Press reports that Arkansas coach John L. Smith filed a Chapter 7 bankruptcy petition on Sept. 6, 2012, in the U.S. Bankruptcy Court in the Western District of Arkansas, for debts he incurred through real estate investments in Kentucky. Mr. Smith told The Associated Press in July he expected to make the filing but also was trying to avoid it. AP, citing court documents, Mr. Smith has assets of between $1 million and $10 million and debts of between $10 million and $50 million. The filing is preliminary and more details will be added to the record later. AP relates Mr. Smith discussed his dismal financial condition during the summer because he didn't want his situation to become a distraction when the No. 10 Razorbacks started playing games. The report relates athletic director Jeff Long told the AP that Smith had been candid about his financial situation and he didn't hold it against him, especially considering the economy. JOURNAL REGISTER: Can Hire American Legal Claim Services -------------------------------------------------------- Journal Register Company, which is in its second Chapter 11 bankruptcy since 2009, sought and obtained Court permission to employ American Legal Claim Services, LLC, as claims and noticing agent in the Debtors' chapter 11 cases. ALCS will assume responsibility for the distribution of notices and the maintenance, processing, and docketing of proofs of claim filed in the Debtors' cases. Journal Register said the selection of ALCS to act as the Agent has satisfied the Court's Protocol for the Employment of Claims and Noticing Agents under 28 U.S.C. Sec. 156(c), in that the Debtors have obtained and reviewed engagement proposals from at least two other court-approved claims and noticing agents to ensure selection through a competitive process. The Debtors also said, based on all engagement proposals obtained and reviewed, that ALCS's rates are competitive and reasonable given ALCS's quality of services and expertise. Prior to the Petition Date, the Debtors provided ALCS with a retainer of $15,000. ALCS will hold the retainer under the Engagement Agreement during these cases as security for the payment of fees and expenses incurred under the Engagement Agreement. Jeffrey L. Pirrung, the Managing Director of American Legal Claim Services, in Jacksonville, Florida, attests that: (a) ALCS will not consider itself employed by the United States government and shall not seek any compensation from the United States government in its capacity as the Agent in the cases; (b) By accepting employment in the cases, ALCS waives any rights to receive compensation from the United States government in connection with the Debtors' cases; (c) In its capacity as the Agent in the cases, ALCS will not be an agent of the United States and will not act on behalf of the United States; and (d) ALCS is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code with respect to the matters upon which it is to be engaged. About Journal Register Journal Register Company -- http://www.JournalRegister.com/-- is the publisher of the New Haven Register and other papers in 10 states, including Philadelphia, Detroit and Cleveland, and in upstate New York. The Company's more than 350 multi-platform products reach an audience of 21 million people each month. JRC is managed by Digital First Media and is affiliated with MediaNews Group, Inc., the nation's second largest newspaper company as measured by circulation. Journal Register, along with its affiliates, first filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 09-10769) on Feb. 21, 2009. Attorneys at Willkie Farr & Gallagher LLP, served as counsel to the Debtors. Attorneys at Otterbourg, Steindler, Houston & Rosen, P.C., represented the official committee of unsecured creditors. Journal Register emerged from Chapter 11 protection under the terms of a pre-negotiated plan. Journal Register returned to bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-13774) on Sept. 5, 2012, to sell the business to 21st CMH Acquisition Co., an affiliate of funds managed by Alden Global Capital LLC. The deal is subject to higher and better offers. Journal Register expects to complete the auction and sale process within 90 days. Journal Register exited the 2009 restructuring with $225 million in debt and with a legacy cost structure, which includes leases, defined benefit pensions and other liabilities that have become unsustainable and threatened the Company's efforts for a successful digital transformation. Journal Register managed to reduce the debt by 28% with the Company servicing in excess of $160 million of debt. Alden Global is the holder of two terms loans totaling $152.3 million. Alden Global acquired the stock and the term loans from lenders in Journal Register's prior bankruptcy. Journal Register disclosed total assets of $235 million and liabilities totaling $268.6 million as of July 29, 2012. This includes $13.2 million owing on a revolving credit to Wells Fargo Bank NA. Bankruptcy Judge Stuart M. Bernstein presides over the 2012 case. Neil E. Herman, Esq., Rachel Jaffe Mauceri, Esq., and Patrick D. Fleming, Esq., at Morgan, Lewis & Bockius, LLP; and Michael R. Nestor, Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner, Esq., at Young Conaway Stargatt & Taylor LLP, serve as the 2012 Debtors' counsel. SSG Capital Advisors, LLC, serves as financial advisors. American Legal Claims Services LLC acts as claims agent. The petition was signed by William Higginson, executive vice president of operations. Otterbourg, Steindler, Houston & Rosen, P.C., represents Wells Fargo. Akin, Gump, Strauss, Hauer & Feld LLP, represents the Debtors' Tranche A Lenders and Tranche B Lenders. Emmet, Marvin & Martin LLP, serves as counsel to Wells Fargo, in its capacity as Tranche A Agent and the Tranche B Agent. JOURNAL REGISTER: Schedules Filing Deadline Moved to Nov. 5 ----------------------------------------------------------- Journal Register Company, which is in its second Chapter 11 bankruptcy since 2009, won Court extension of the deadline for the Debtors to file schedules of assets and liabilities, schedules of current income and expenditures, schedules of executory contracts and unexpired leases and statements of financial affairs. The time within which the Debtors must file the Schedules and Statements is extended, pursuant to Rules 1007(c) and 9006(b) of the Federal Rules of Bankruptcy Procedure, for an additional 45 days to Nov. 5, 2012, without prejudice to the Debtors' rights to seek an additional extension upon cause shown. Pursuant to section 521 of the Bankruptcy Code and Bankruptcy Rule 1007(c), the Debtors ordinarily would be required to file the Schedules and Statements within 14 days after the Petition Date. However, the Court is authorized to extend the filing deadline for cause by Bankruptcy Rules 1007(c) and 9006(b). The Debtors said they require extra time to prepare and file their Schedules and Statements. The scope and complexity of the Debtors' businesses, couple d with the limited time and resources available to the Debtors to compile the required information, necessitate an extension of the deadline to file the Schedules and Statements. The Debtors noted they have thousands of potential creditors and operate an integrated, multi-regional business network comprised of many daily and weekly periodicals. Further, the nature and scope of the Debtors' operations require them to maintain voluminous records and intricate accounting systems. The complexity and diversity of the Debtors' businesses, the limited staff available to perform the required internal review of their financial records and affairs, the numerous critical operational matters that their accounting and legal personnel must address in the early days of these chapter 11 cases, the pressure incident to the commencement of the chapter 11 cases, and the fact that certain prepetition invoices have not yet been received or entered into their accounting systems provide ample cause justifying, if not necessitating, an initial 45-day extension of the deadline to file the Schedules and Statements. In addition, the Debtors said that focusing the attention of their key accounting and legal personnel on critical operational and chapter 11 compliance issues during the early days of the chapter 11 cases will help the Debtors make a smoother transition into chapter 11 and, therefore, ultimately will maximize the value of their estates for the benefit of creditors and all parties in interest. On Friday, the Bankruptcy Court issued orders approving various so-called First Day motions filed by the Debtors: -- Interim order signed authorizing the Debtors to continue insurance policies and agreements relating thereto and to honor certain prepetition obligations; -- Interim order signed authorizing (A) but not directing, the Debtors to pay certain pre-petition wages, compensation and employee benefits and continue payment of wages, compensation and employee benefits in the ordinary course of business; and (B) authorizing and directing applicable banks and other financial institutions to process and pay all checks presented for payment and to honor all funds transfer requests made by the Debtors relating to the foregoing; -- Interim order signed authorizing the Debtors to pay prepetition obligations of certain critical vendors and service providers; -- Interim order signed authorizing the payment of prepetition claims of shippers, warehousemen and other lien claimants and granting related relief; -- Interim order signed authorizing the Debtors to continue to honor customer programs in the ordinary course of business; -- Interim order signed authorizing the Debtors to pay prepetition sales and use taxes and related obligations; -- Interim order signed (A) authorizing the Debtors to (i) continue use of existing cash management system, bank accounts and business forms and (ii) open new debtor-in-possession accounts, and (B) extending the Debtors' time to comply with Section 345 of the Bankruptcy Code; -- Order signed authorizing the Debtors to (A) prepare a list of creditors in lieu of a formatted mailing matrix, (B) file a consolidated list of the Debtors' 50 largest unsecured creditors and (C) mail initial notices; and -- Order signed directing joint administration of the Debtors' related chapter 11 cases. About Journal Register Journal Register Company -- http://www.JournalRegister.com/-- is the publisher of the New Haven Register and other papers in 10 states, including Philadelphia, Detroit and Cleveland, and in upstate New York. The Company's more than 350 multi-platform products reach an audience of 21 million people each month. JRC is managed by Digital First Media and is affiliated with MediaNews Group, Inc., the nation's second largest newspaper company as measured by circulation. Journal Register, along with its affiliates, first filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 09-10769) on Feb. 21, 2009. Attorneys at Willkie Farr & Gallagher LLP, served as counsel to the Debtors. Attorneys at Otterbourg, Steindler, Houston & Rosen, P.C., represented the official committee of unsecured creditors. Journal Register emerged from Chapter 11 protection under the terms of a pre-negotiated plan. Journal Register returned to bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-13774) on Sept. 5, 2012, to sell the business to 21st CMH Acquisition Co., an affiliate of funds managed by Alden Global Capital LLC. The deal is subject to higher and better offers. Journal Register expects to complete the auction and sale process within 90 days. Journal Register exited the 2009 restructuring with $225 million in debt and with a legacy cost structure, which includes leases, defined benefit pensions and other liabilities that have become unsustainable and threatened the Company's efforts for a successful digital transformation. Journal Register managed to reduce the debt by 28% with the Company servicing in excess of $160 million of debt. Alden Global is the holder of two terms loans totaling $152.3 million. Alden Global acquired the stock and the term loans from lenders in Journal Register's prior bankruptcy. Journal Register disclosed total assets of $235 million and liabilities totaling $268.6 million as of July 29, 2012. This includes $13.2 million owing on a revolving credit to Wells Fargo Bank NA. Bankruptcy Judge Stuart M. Bernstein presides over the 2012 case. Neil E. Herman, Esq., Rachel Jaffe Mauceri, Esq., and Patrick D. Fleming, Esq., at Morgan, Lewis & Bockius, LLP; and Michael R. Nestor, Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner, Esq., at Young Conaway Stargatt & Taylor LLP, serve as the 2012 Debtors' counsel. SSG Capital Advisors, LLC, serves as financial advisors. American Legal Claims Services LLC acts as claims agent. The petition was signed by William Higginson, executive vice president of operations. Otterbourg, Steindler, Houston & Rosen, P.C., represents Wells Fargo. Akin, Gump, Strauss, Hauer & Feld LLP, represents the Debtors' Tranche A Lenders and Tranche B Lenders. Emmet, Marvin & Martin LLP, serves as counsel to Wells Fargo, in its capacity as Tranche A Agent and the Tranche B Agent. JOURNAL REGISTER: Meeting to Form Creditors Panel Set on Thursday ----------------------------------------------------------------- Tracy Hope Davis, the United States Trustee for Region 2, will hold an organizational meeting on Sept. 13, 2012, at 10:30 a.m. in the bankruptcy case of Journal Register, et al. The meeting will be held at: 80 Broad Street Fourth Floor New York, NY. 10004 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Journal Register Journal Register Company -- http://www.JournalRegister.com/-- is the publisher of the New Haven Register and other papers in 10 states, including Philadelphia, Detroit and Cleveland, and in upstate New York. The Company's more than 350 multi-platform products reach an audience of 21 million people each month. JRC is managed by Digital First Media and is affiliated with MediaNews Group, Inc., the nation's second largest newspaper company as measured by circulation. Journal Register, along with its affiliates, first filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 09-10769) on Feb. 21, 2009. Attorneys at Willkie Farr & Gallagher LLP, served as counsel to the Debtors. Attorneys at Otterbourg, Steindler, Houston & Rosen, P.C., represented the official committee of unsecured creditors. Journal Register emerged from Chapter 11 protection under the terms of a pre-negotiated plan. Journal Register returned to bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-13774) on Sept. 5, 2012, to sell the business to 21st CMH Acquisition Co., an affiliate of funds managed by Alden Global Capital LLC. The deal is subject to higher and better offers. Journal Register expects to complete the auction and sale process within 90 days. Journal Register exited the 2009 restructuring with $225 million in debt and with a legacy cost structure, which includes leases, defined benefit pensions and other liabilities that have become unsustainable and threatened the Company's efforts for a successful digital transformation. Journal Register managed to reduce the debt by 28% with the Company servicing in excess of $160 million of debt. Alden Global is the holder of two terms loans totaling $152.3 million. Alden Global acquired the stock and the term loans from lenders in Journal Register's prior bankruptcy. Journal Register disclosed total assets of $235 million and liabilities totaling $268.6 million as of July 29, 2012. This includes $13.2 million owing on a revolving credit to Wells Fargo Bank NA. Bankruptcy Judge Stuart M. Bernstein presides over the 2012 case. Neil E. Herman, Esq., Rachel Jaffe Mauceri, Esq., and Patrick D. Fleming, Esq., at Morgan, Lewis & Bockius, LLP; and Michael R. Nestor, Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner, Esq., at Young Conaway Stargatt & Taylor LLP, serve as the 2012 Debtors' counsel. SSG Capital Advisors, LLC, serves as financial advisors. American Legal Claims Services LLC acts as claims agent. The petition was signed by William Higginson, executive vice president of operations. Otterbourg, Steindler, Houston & Rosen, P.C., represents Wells Fargo. Akin, Gump, Strauss, Hauer & Feld LLP, represents the Debtors' Tranche A Lenders and Tranche B Lenders. Emmet, Marvin & Martin LLP, serves as counsel to Wells Fargo, in its capacity as Tranche A Agent and the Tranche B Agent. KEITH ALAN WATT: Files for Chapter 11 Bankruptcy Protection ----------------------------------------------------------- Richard Scheinin at Mercury News reports that businessman Keith Alan Watt has filed for Chapter 11 bankruptcy protection, citing foreclosure and the potential closing this fall of Le Petit Trianon. According to the report, Mr. Watt expects the bankruptcy to buy time for the hall, which has been home to dozens of South Bay arts groups for a quarter-century. Unable to meet payments on his $1.9 million mortgage, Mr. Watt had feared for its short-term survival. He now expects the court-supervised reorganization of his finances to last six to nine months or longer, freezing the foreclosure threat and assuring that all, or most, Trianon events will come off this season as planned. The report relates Susan B. Luce, his San Jose-based bankruptcy attorney, agreed. Ms. Luce, of the law offices of David A. Boone, said she expects to bring a reorganization plan to Mr. Watts' creditors for a vote in about a year. The report notes Ms. Luce raised the possibility that Mr. Watt might sell several of the other properties to raise cash to pay down some of his debts, which had led to several recent foreclosure filings against him. K-V PHARMACEUTICAL: Hologic Wants to Pursue Makena Claims --------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that K-V Pharmaceutical Co. creditor Hologic Inc. asked a New York bankruptcy judge Wednesday to lift the automatic stay so it could pursue its rights with respect to its first lien on K-V's biggest asset, preterm- birth drug Makena, saying the drug's value is declining. Hologic, a secured creditor, submitted the motion for relief from the stay to allow it to exercise its rights and remedies under an asset purchase agreement and license agreement as to its interests in the Makena assets and related property, Bankruptcy Law360 says. About K-V Pharmaceutical KV Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. K-V Pharmaceutical Company and certain domestic subsidiaries on Aug. 4 filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions Inc.) to restructure their financial obligations. K-V has retained the services of Willkie Farr & Gallagher LLP as bankruptcy counsel, Williams & Connolly LLP as special litigation counsel, and SNR Denton as special litigation counsel. In addition, K-V has retained Jefferies & Co., Inc., as financial advisor and investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The U.S. Trustee appointed five persons to serve in the Official Committee of Unsecured Creditors. LEGENDS GAMING: Meeting of Creditors Set for Wednesday ------------------------------------------------------ The U.S. Trustee for Region 5 rescheduled to Sept. 12, 2012, at 11 a.m., the meeting of creditors in the Chapter 11 cases of Louisiana Riverboat Gaming Partnership, et al. The meeting will be held at the U.S. Trustee's Office. Legends Gaming LLC, own gaming facilities located in Bossier City, Louisiana, and Vicksburg, Mississippi, operating under the DiamondJack's trade name. Legends Gaming LLC, and five related entities, including Louisiana Riverboat Gaming Partnership, filed Chapter 11 petitions (Bankr. W.D. La. Case No. 12-12013) in Shreveport, Indiana, on July 31, 2012, to sell the business for $125 million to Global Gaming Solutions LLC, absent higher and better offers. Legends Gaming acquired the business from Isle of Capri Casinos Inc., in 2006 for $240 million. After breaching covenant with lenders, the Debtors in March 2008 sought Chapter 11 protection, jointly administered under Louisiana Gaming Partnership (Case No. 08-10824). The Debtors emerged from bankruptcy in September 2009 and retained ownership and operation of two "DiamondJacks" hotels and casinos in Bossier City and Vicksburg. The Plan restructured $162.1 million owed to the first lien lenders and $75 million owed to secured lien lenders, which would be paid in full, with interest, over time. The Debtors' properties comprise 60,000 square feet of gaming space with 1,913 slot machines, 48 table games and 693 hotel rooms. Revenues in fiscal 2011 were $99.8 million in Louisiana and $39.7 million in Mississippi. As of July 31, 2012, first lien lenders are owed $181.2 million and second lien lenders are owed $114.7 million. Louisiana Riverboat Gaming Partnership disclosed $104,846,159 in assets and $298,298,911 in liabilities as of the Chapter 11 filing. Attorneys at Heller, Draper, Hayden Patrick & Horn serve as counsel to the Debtors. Sea Port Group Securities, LLC is the financial advisor. Kurtzman Carson Consultants LLC as is the claims and notice agent. The Debtors have tapped Jenner & Block LLP as special counsel. The Court authorized the Debtors to sell their assets at an Oct. 15, auction. Qualified bids are due Sept. 24. LIBERTY HARBOR: Has Until Oct. 5 to Propose Plan of Reorganization ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of New Jersey extended Liberty Harbor Holding, LLC, et al.'s exclusive periods to file and solicit acceptances for the proposed plan of reorganization until Oct. 5, 2012, and Dec. 7, respectively. About Liberty Harbor Jersey City, New Jersey-based Liberty Harbor Holding, LLC, along with two affiliates, sought Chapter 11 protection (Banrk. D. N.J. Lead Case No. 12-19958) in Newark on April 17, 2012. Liberty, as of April 16, 2012, had total assets of $350.08 million, comprising of $350 million of land, $75,000 in accounts receivable and $458 cash. The Debtor says that it has $3.62 million of debt, consisting of accounts payable of $73,500 and unsecured non- priority claims of $3,540,000. The Debtor's real property consists of Block 60, Jersey City, NJ 100% ownership Lots 60, 70, 69.26, 61, 62, 63, 64, 65, 25H, 26A, 26B, 27B, 27D. Affiliates that filed separate petitions are: Liberty Harbor II Urban Renewal Co., LLC (Case No. 12-19961) and Liberty Harbor North, Inc. (Case No. 12-19964). Judge Novalyn L. Winfield presides over the case. The petition was signed by Peter Mocco, managing member. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed three creditors to the Official Committee of Unsecured Creditors in the Chapter 11 cases of the Debtor. LIGHTSQUARED INC: Lenders Object to $6MM Employee Incentive Plan ---------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that a group of LightSquared LP's lenders objected Thursday to parent LightSquared Inc. and its affiliates' bid to implement a $6 million employee incentive plan, saying controlling equity owners Philip Falcone and his Harbinger Capital Partners LLC are improperly promoting the interests of equity. Bankruptcy Law360 relates that the ad hoc secured group of LP lenders asked U.S. Bankruptcy Judge Shelley C. Chapman to deny LightSquared's motion for an order approving the key employee incentive plan, which was filed Aug. 29. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, as the Company seeks to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties, prompting the bankruptcy filing. As of the Petition Date, the Debtors employed roughly 168 people in the United States and Canada. As of Feb. 29, 2012, the Debtors had $4.48 billion in assets (book value) and $2.29 billion in liabilities. LightSquared also sought ancillary relief in Canada on behalf of all of the Debtors, pursuant to the Companies' Creditors Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended, in the Ontario Superior Court of Justice (Commercial List) in Toronto, Ontario, Canada. The purpose of the ancillary proceedings is to request the Canadian Court to recognize the Chapter 11 cases as a "foreign main proceeding" under the applicable provisions of the CCAA to, among other things, protect the Debtors' assets and operations in Canada. The Debtors named affiliate LightSquared LP to act as the "foreign representative" on behalf of the Debtors' estates. Judge Shelley C. Chapman presides over the Chapter 11 case. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to UBS AG as agent under the October 2010 facility is Melissa S. Alwang, Esq., at Latham & Watkins LLP. The ad hoc secured group of lenders under the Debtors' October 2010 facility was formed in April 2012 to negotiate an out-of- court restructuring. The members are Appaloosa Management L.P.; Capital Research and Management Company; Fortress Investment Group; Knighthead Capital Management LLC; and Redwood Capital Management. Counsel to the ad hoc secured group is Thomas E. Lauria, Esq., at White & Case LLP. Philip Falcone's Harbinger Capital Partners indirectly owns 96% of LightSquared's outstanding common stock. Harbinger and certain of its managed and affiliated funds and wholly owned subsidiaries, including HGW US Holding Company, L.P., Blue Line DZM Corp., and Harbinger Capital Partners SP, Inc., are represented in the case by Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP. The Office of the U.S. Trustee has not appointed a statutory committee of unsecured creditors. LI-ION MOTORS: Authorized Common Shares Hiked to 400 Million ------------------------------------------------------------ Li-ion Motors Corp.'s board of directors unanimously approved an amendment to the Company's Articles of Incorporation to increase the authorized number of shares of common stock from 100,000,000 shares, par value $.001 per share, to 400,000,000 shares, par value $.001 per share, on July 20, 2012. On the same date the Company received the written consent from shareholders of its company holding a majority (75.69%) of the outstanding shares of the Company's common stock. The Company filed the amendment with the Secretary of State of Nevada on Aug. 30, 2012, after mailing a Definitive Information Statement to its stockholders and the amendment was effective Aug. 30, 2012. A copy of the amended Articles of Incorporation is available for free at: http://is.gd/eZUAWG Due to a default in the mortgage for the property, on or about Aug. 22, 2012, foreclosure and asset seizure actions were executed against Company assets located at its 158 Rolling Hill Rd, Mooresville, N.C. property. About Li-ion Motors Las Vegas, Nev.-based Li-ion Motors Corp. was incorporated under the laws of the State of Nevada in April 2000. The Company is currently pursuing the development and marketing of electric powered vehicles and products based on the advanced lithium battery technology it has developed. The Progressive Insurance Automotive X-Prize, competition was announced in April 2008 as a way to spur the development of clean, high-mileage vehicles, and is funded for a total of $10 million, which will be divided among three separate categories. The Company was the winner in its entry class. On Oct. 27, 2010, the Company received net proceeds of approximately $2.30 million from X-Prize and was recorded as other income in the Company's consolidated statement of operations for the year ended July 31, 2011. The Company does not currently have any arrangements for financing and it may not be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including investor sentiment. Market factors may make the timing, amount, terms or conditions of additional financing unavailable to it. These uncertainties raise substantial doubt about the ability of the Company to continue as a going concern. In its auditors' report accompanying the consolidated financial statements for the fiscal year ended July 31, 2011, Madsen & Associates, CPA's Inc., Murray, Utah, expressed substantial doubt about Li-on Motors' ability to continue as a going concern. The independent auditors noted that the Company did not have any revenue from vehicle sales in 2011, does not have cash flows to support its current operations and needs reserve to cover expenses in future periods as the Company continues to incur losses from operations. The Company's balance sheet at April 30, 2012, showed $2.14 million in total assets, $4.72 million in total liabilities and a $2.58 million total stockholders' deficiency. LIONS GATE: Moody's Upgrades CFR/PDR to 'B1'; Outlook Stable ------------------------------------------------------------ Moody's Investors Service upgraded Lions Gate Entertainment Inc.'s Corporate Family Rating (CFR) to B1 from B2 and Probability of Default Rating (PDR) to B1 from B2, and confirmed the B1 (LGD 3- 42%) rating on the company's senior secured 2nd lien notes due 2016. Its Speculative Grade Liquidity rating remains unchanged at SGL-3, and the rating outlook is stable. This action concludes the review for possible upgrade initiated on January 20, 2012. The company was placed on review for upgrade in January in part because of Moody's expectation of strong performance by the first Hunger Games film (released in March 2012) as well as the potential monetization of its equity interest in TVGuide Network which could aid debt reduction. "The box office success of the Hunger Games film exceeded our already high expectations, while the monetization of the TVGuide Network is more uncertain," stated Neil Begley a Moody's Senior Vice president. "Consequently, the upgrade is driven by increased visibility and anticipated stability of cash flows, and the expectation of material debt reduction as a result of the overwhelming success of the first film in the Hunger Games series and expected success of sequels," added Begley. The rating is also favorably impacted by the equity value from its recent acquisition of Summit Entertainment (B1 CFR) ("Summit"), and the continued growth momentum of its television production segment. The record-breaking box office performance of the first of four Hunger Games films (released in March, 2012) has significantly improved the company's cash flow generation and de-leveraging prospects. The initial box office performance for successful franchise book series is generally a good indicator of the film franchise's future releases' cash flows, and the success of this larger than typical Lionsgate budget series provides more visibility for Lionsgate's profitability and cash flow in the intermediate term, with the remaining three Hunger Games films slated for release in 2013-2015. In the past, the mixed performance of the company's film slate has resulted in volatile and often negative free cash flow generation and sustained high leverage, which weighed down its credit profile. Excluding the results from Summit, which is consolidated into Lionsgate's reported results, but has its own non-recourse financing, Moody's expects free cash flow to be around breakeven or moderately negative in the next two years as the company invests in the production of the next Hunger Games film (slated for release in November 2013). It is also impacted by its support of the working capital needs of both its own film slate as well as Summit's slate since the remaining costs for Summit's upcoming films (except for Breaking Dawn 2) will likely be advanced by Lionsgate, which will also bear the risk of any film losses on its unreleased films. However, Moody's expects Lionsgate to begin generating significant positive free cash flow in fiscal 2014 or at the latest fiscal 2015 and believe this will be sustained in the intermediate term as it profits from the Hunger Games franchise and steady growth in its television segment. We expect that it will apply free cash flow towards debt reduction and sustain average debt-to-EBITDA leverage of well under 5.0x over the next five years. Lionsgate's acquisition of Summit has been credit positive for the company from both a strategic and financial standpoint. We believe Lionsgate will benefit from Summit's experienced management team, which has significant expertise in larger budget theatrical film green-lighting, risk management and production, and has historically mitigated production risk through upfront coverage of costs to reduce the magnitude of potential losses on underperforming films, and its strong distribution capabilities, with a large number of contractual output deals in foreign territories. The acquisition of Summit will help diversify Lionsgate's revenue stream by adding the successful Twilight franchise to its current portfolio, and result in significant cost savings from overhead reduction and marketing and distribution synergies. The $412.5 million purchase price for Summit was funded primarily through cash on Summit's balance sheet, with Lionsgate putting up a moderate amount of cash and equity, and raising $45 million in incremental debt. The company also refinanced Summit's $500 million term loan facility at that time with a new one of equal size serviced and secured only by Summit's assets. Moody's anticipates the Summit term loan (under $300 million outstanding at 6/30/2012) to be paid down by at least another $150 million over the next 12 months, from the predictable and sizeable cash flows from the last Twilight film (releasing in November 2012). In addition to the added film production expertise, once the term loan is fully paid down, Lionsgate stands to benefit from the residual cash flows at Summit, and Moody's expects the company to bring in the Summit assets to support Lionsgate's debt at that point. Apart from steady growth in its television production business, the company has a 31.2% interest in the premium cable network EPIX, which now generates free cash flow and does not require additional investments from the company as it did a few years back. The company also stands to benefit from the potential sale of its 51% interest in the TVGuide Network, which it has shown strong interest in selling over the past year. As a result of the high investment in film and TV production which will cause moderately negative free cash flow over the next year, despite an improved credit profile, the company's primary source of liquidity will continue to be its revolving credit facility. Moody's anticipates the company will shortly refinance its current $340 million facility with a larger one, though the company's senior secured 2nd lien indenture limits indebtedness beyond $340 million unless certain borrowing base levels are met, which Moody's believes is unlikely in the near term. Moody's expects the company to maintain an adequate cash balance and adequate cushion under its financial covenants to ensure access to the revolver. The company's liquidity rating remains unchanged at SGL-3. Prior to the upgrade, the one-notch differential between the CFR and the rating of the second lien notes reflected the cushion provided by obligations that rank junior in the capital structure (including trade payables, participations and residuals, and subordinated convertible notes), which effectively provided lift to the rating. However, Moody's confirmed the B1 rating on the notes despite the CFR upgrade because Moody's anticipates a number of possibilities for changes to the capital structure which under most scenarios lead us to bring the rating on the notes back to B1 if it were to be upgraded along with the CFR upgrade. Moody's notes that even if the company refinances its current revolver with one of a larger size, it will like be limited to its current borrowing capacity of $340 million due to covenants in the senior indenture. Moody's is therefore only factoring in a $340 million revolver to assess the company's current capital structure and to determine the notching of its debt instruments. So while Moody's loss-given-default model results in an upnotching of the senior note rating, Moody's overode this outcome because of anticipated changes in the capital structure in the near term that may allow for an increased borrowing capacity, which would increase the amount of senior debt in the capital structure and effectively eliminate the upnotching on the notes, or a possible reduction in junior debt which provides the cushion providing a lift to the rating. The following is a summary of the rating actions: Issuer: Lions Gate Entertainment Inc. Corporate Family Rating, Upgraded to B1 from B2 Probability of Default Rating, Upgraded to B1 from B2 $436 million senior secured 2nd lien notes due 2016, Confirmed at B1 (LGD3-42%) Ratings Rationale The B1 Corporate Family Rating (CFR) reflects the inherent high risk and typical low margins associated with the film production business and the mixed performance of Lions Gate's film slate in recent years, which has led to sustained losses, negative free cash flow and high leverage. This is partially mitigated by the company's significant asset value as well as the success of the first film in the Hunger Games franchise and significant expected cash flows from the probable success of the remaining three sequels in the series, which are slated to be released through fiscal 2016. Moody's expects operating performance to improve as a result of the company's cost reduction initiatives as well as increasing contribution (to EBITDA) from TV program syndication revenues and the cable network businesses, which include TVGuide Network and EPIX. Though leverage is expected to remain high and cash flows breakeven or moderately negative through fiscal 2014 driven by heavy investments in film and TV, the B1 rating is prospective in nature as Moody's expects the company to generate significant positive cash flow thereafter and apply this towards debt pay down, reducing leverage to well below 5.0x by FY 2015, which Moody's has previously stated would lead to upward pressure on its B2 ratings. Despite the higher visibility for profits and cash flows provided by the Hunger Games franchise, the company's ratings are constrained by the potential for reinvestment of its profits in underperforming films and the absence of cash flow sweep requirements which enforce discipline for debt pay down, given the volatile nature of its businesses and high absolute levels of debt. Moody's anticipates the company will maintain an adequate liquidity profile over the next twelve months, remaining reliant on its revolving credit facility, but does recognize that if operating performance falls short of current expectations and the company has material negative free cash flow then Lions Gate's liquidity position could become pressured. As a result of its equity position in Summit Entertainment, whose assets do not support Lionsgate debt, Moody's evaluates Lionsgate's credit risk on a stand-alone basis. However, the company stands to benefit from the expected credit consolidation of Summit's EBITDA and positive cash flow, once the proceeds of its Twilight franchise are used to pay down the Summit term loan. Rating Outlook The stable outlook reflects Moody's expectation that the company will generate positive cash flow over the forward rating horizon as returns begin to flow from the significant television and film investments. The outlook also reflects Moody's expectation that management will use a portion of future free cash flows towards debt repayment and will take steps to strengthen its balance sheet and improve and sustain its credit metrics. Would Could Change the Rating - Up A rating upgrade is unlikely in the near term given the prospective nature of the current rating and low visibility on the revenues in later years, especially beyond the completion of the Hunger Games franchise. However, ratings could be upgraded if the company has more consistent film performance across its slate and demonstrates the ability to develop other successful film franchises, or the company diversifies its operations further and thereby reducing the impact from theatrical film performance contribution and volatility, such that it can generate sustainable positive free cash flow, and materially reduce absolute debt and sustain debt-to-EBITDA leverage of under 3.0x. Would Could Change the Rating - Down The company's ratings could be downgraded if operating performance falls short of current expectations and the company regresses to consistent negative free cash flow which in turn, would likely pressure its liquidity position without access to capital markets. Additionally, downward pressure might occur if the company engages in acquisitions that adversely impact cash flow, leverage and/or liquidity. A change in Moody's expectation of the company's ability and commitment towards debt reduction could also lead to a downgrade. Lion Gate's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Lion Gate's core industry and believes Lion Gate's ratings are comparable to those of other issuers with similar credit risk. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Lions Gate Entertainment Corp., domiciled in British Columbia, Canada (headquartered in Santa Monica, CA), is a motion picture studio with a diversified presence in the production and distribution of motion pictures, television programming, home entertainment, video-on-demand and digitally delivered content. LIQUIDMETAL TECHNOLOGIES: Issues 5.1-Mil. Shares to Noteholders --------------------------------------------------------------- Liquidmetal Technologies, Inc., completed on July 2, 2012, a private placement of $12.0 million in Senior Convertible Notes. On Aug. 30, 2012, the Company elected to make its first monthly installment payment under the Senior Convertible Notes in shares of Company common stock. Accordingly, on Aug. 31, 2012, the Company issued 5,059,163 shares of its common stock to the five holders of the Notes in satisfaction of the $1,240,000 monthly installment payment that will be due and payable on Oct. 1, 2012. This issuance of shares of the Company's common stock was made pursuant to the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended, including pursuant to Rule 506 thereunder. That issuance was made solely to "accredited investors" under Rule 506 and was made without any form of general solicitation and with full access to any information requested by the holders of the Notes regarding the Company or the securities offered in the private placement. On July 18, 2012, the Company filed a registration statement with the SEC registering the resale by the holders of the Notes of shares of Company common stock issuable pursuant to the Notes. The Registration Statement was declared effective by the SEC on Aug. 30, 2012, and at the time of effectiveness, the Registration Statement covered the resale of up to 36,892,194 Conversion Shares. Accordingly, as of Sept. 7, 2012, the maximum number of shares that the Company is permitted to elect to issue in satisfaction of installment payments under the Notes will be 36,892,194, including the shares issued on Aug. 31, 2012, and assuming that certain equity conditions set out in the Notes are satisfied at the times required in the Notes. About Liquidmetal Technologies Based in Rancho Santa Margarita, Calif., Liquidmetal Technologies, Inc., and its subsidiaries are in the business of developing, manufacturing, and marketing products made from amorphous alloys. Liquidmetal Technologies markets and sells Liquidmetal(R) alloy industrial coatings and also manufactures, markets and sells products and components from bulk Liquidmetal alloys that can be incorporated into the finished goods of its customers across a variety of industries. The Company also partners with third- party licensees and distributors to develop and commercialize Liquidmetal alloy products. After auditing the 2011 financial statements, Choi, Kim & Park, LLP, in Los Angeles, California, said that the Company's significant operating losses and working capital deficit raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at June 30, 2012, showed $3.02 million in total assets, $8.24 million in total liabilities and a $5.21 million total shareholders' deficit. LODGENET INTERACTIVE: Fails to Comply with $1.00 Bid Price Rule --------------------------------------------------------------- LodgeNet Interactive Corporation received a letter from The Nasdaq Stock Market, notifying the Company that for the last 30 consecutive business days, the bid price of the Company's common stock had closed below the minimum $1.00 per share requirement for continued inclusion on NASDAQ based on Listing Rule 5450(a)(1), and describing a timetable for bringing the Company into compliance with that rule. The Company's common stock remains listed on NASDAQ under the symbol LNET. The Company has been provided 180 calendar days, or until Feb. 27, 2013, to regain compliance, in accordance with Listing Rule 5810(c)(3)(A). If at any time before then, the Company's common stock has a closing bid price of $1.00 or more for a minimum of 10 consecutive business days, NASDAQ staff will notify the Company that it has regained compliance. If the Company has not met the requirements of Rule 5450(a)(1) by Feb. 27, 2013, but meets the continued listing requirement for market value of publicly held shares and all other applicable standards for initial listing on The Nasdaq Capital Market, then the Company may be eligible for an additional 180 day compliance period by submitting an application to transfer its securities to The Nasdaq Capital Market. In order to qualify, the Company will need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split if necessary. If it appears to NASDAQ staff that the Company will not be able to cure the deficiency during this second compliance period, or if the Company is otherwise not eligible, the staff will provide notice that the Company's securities will be subject to delisting. The Company intends to actively monitor the bid price for its common stock between now and Feb. 27, 2013, and will consider available options to resolve the deficiency and regain compliance with the NASDAQ minimum bid price requirement. About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET), formerly LodgeNet Entertainment Corp. -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. The Company reported a net loss of $631,000 in 2011, a net loss of $11.68 million in 2010, and a net loss of $10.15 million in 2009. The Company's balance sheet at June 30, 2012, showed $283.34 million in total assets, $439.32 million in total liabilities and a $155.98 million total stockholders' deficiency. * * * As reported by the TCR on Aug. 7, 2012, Moody's Investors Services downgraded LodgeNet Interactive Corp.'s Corporate Family Rating (CFR) to Caa1 from B3 and changed the Probability of Default Rating (PDR) to Caa2 from Caa1. The reason for the downgrade is due to poor first and second quarter financial results and Moody's expectations that they will not improve in the near term. In the Aug. 7, 2012, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on U.S. in-room entertainment and data services provider LodgeNet Interactive Corp. to 'CCC' from 'B-'. "The downgrade reflects LodgeNet's weak second-quarter operating performance resulting from a sharp reduction in its room base, which we expect will continue over the near term," said Standard & Poor's credit analyst Hal Diamond. MARION AMPHITHEATRE: Court Dismisses Chapter 11 Case ---------------------------------------------------- Marion Amphitheatre, LLC's Chapter 11 case has been dismissed. The Debtor has said in court filings that dismissal is more appropriate than conversion as there are no material assets available for distribution to creditors. The Debtor, a single asset real estate, said its secured lender is receiving relief from stay to foreclose on the only material asset of the bankruptcy estate. As a result, the Debtor cannot formulate or carry out the terms of a plan of reorganization. The dismissal order was entered in May. Wells Fargo Bank N.A. is owed on a promissory note in the principal amount of $4 million, secured by the Debtor's amphitheatre property in Marion County, South Carolina. According to the Debtor, Wells Fargo Bank appears to be entitled to relief from the automatic stay "for cause." The Debtor said that in an attempt to resolve the overarching issues in this matter, the Debtor has facilitated the acquisition of the Wells Fargo notes, mortgages, and all other loan documents associated therewith, which is expected to include individuals that are "insiders" of the Debtor, in exchange for (a) a cash payment to Wells Fargo; (b) a limited recovery pledge; and (c) a general release from the Debtor and Michael Guarco of any and all claims against Wells Fargo. About Marion Amphitheatre Marion Amphitheatre, LLC, filed for Chapter 11 bankruptcy (Bankr. D. S.C. Case No. 11-06980) on Nov. 9, 2011. Marion Amphitheatre scheduled assets of $26,235,309 and Scheduled Liabilities of $23,945,393. The petition was signed by Michael Guarco, Sr., manager-member. G. William McCarthy, Jr., Esq., at McCarthy Law Firm, LLC, in Columbia, South Carolina, serves as counsel to the Debtor. MEDFORD VILLAGE: Section 341(a) Meeting Scheduled for Sept. 27 -------------------------------------------------------------- The U.S. Trustee for Region 3 will convene a Meeting of Creditors under U.S.C. Sec. 341(a) in the Chapter 11 case of Medford Village East Associates, LLC, on Sept. 27, 2012, at 12:00 p.m. at Bridge View, Camden, N.J. Proofs of Claim are due by Dec. 26, 2012. Medford Village East Associates, LLC, filed a Chapter 11 petition (Bankr. D.N.J. Case No. 12-29693) in Camden on Aug. 8, 2012, estimating assets of at least $50 million and liabilities of just under $10 million. The Debtor owns properties in Medford Township, Mt. Laurel Township, Borough of Clayton, Borough of Barrington, Voorhees Township and the Midwest. The Debtor hired Maschmeyer Karalis P.C. as bankruptcy counsel and Hyland Levin, LLP as special counsel. The petition was signed by Stephen D. Samost, managing member. MEDFORD VILLAGE: Secured Creditor Lennar Seeks Dismissal of Case ---------------------------------------------------------------- U.S. Home Corporation d/b/a Lennar, a secured creditor of Medford Village East Associates, LLC, asks the U.S. Bankruptcy Court for the District of New Jersey for the entry of an order (I) dismissing the Debtor's case, or, in the alternative, modifying the automatic stay to permit Lennar to foreclose upon a 280 acre tract of land located along Route 70 in Medford, New Jersey and identified on the Medford Tax Map as Block 4107, Lot 1; Block 4108, Lot 1 and Block 808, Lots 1, 2.01, 2.02 and 6.03 and waiving the stay imposed by Rule 4001(a)(3) of the Federal Rules of Bankruptcy Procedure; and (II) determining that Debtor is a single asset real estate debtor pursuant to 11 U.S.C. Section 101(51B). Lennar cites that the Debtor filed its case in bad faith as a litigation tactic in a two-party dispute between Lennar and the Debtor and there is no ability to reorganize. In the event that the Court modifies the automatic stay in favor of Lennar, Lennar also seeks the entry of an order waiving the provision of Fed. R. Bankr. P. 4001(a)(3) for cause. Lennar also seeks a determination from the Court that the Debtor is a single asset real estate debtor pursuant to 11 U.S.C. Section 101(51B) because: (1) the Property is the Debtor's principal asset - raw land; (2) the Property represents substantially all of the Debtor's income (or potential source of income); and (3) the Debtor does not conduct any substantial business on the Property other than operating the property and activities incidental thereto. Medford Village East Associates, LLC, filed a Chapter 11 petition (Bankr. D.N.J. Case No. 12-29693) in Camden on Aug. 8, 2012, estimating assets of at least $50 million and liabilities of just under $10 million. The Debtor owns properties in Medford Township, Mt. Laurel Township, Borough of Clayton, Borough of Barrington, Voorhees Township and the Midwest. The Debtor hired Maschmeyer Karalis P.C. as bankruptcy counsel and Hyland Levin, LLP as special counsel. The petition was signed by Stephen D. Samost, managing member. MEDFORD VILLAGE: Judge Wizmur Terminates Involvement in Case ------------------------------------------------------------ Judith H. Wizmur, Chief Judge of the U.S. Bankruptcy Court for the District of New Jersey has recused herself from the Chapter 11 case of Medford Village East Associates, LLC. Pursuant to the Order of Recusal, dated Aug. 20, 2012, Judge Wizmur directed that all proceedings in connection with the Debtor's proceeding be transferred to the United States Bankruptcy Judge Gloria M. Burns. The docket entry did not give further details. Medford Village East Associates, LLC, filed a Chapter 11 petition (Bankr. D.N.J. Case No. 12-29693) in Camden on Aug. 8, 2012, estimating assets of at least $50 million and liabilities of just under $10 million. The Debtor owns properties in Medford Township, Mt. Laurel Township, Borough of Clayton, Borough of Barrington, Voorhees Township and the Midwest. The Debtor hired Maschmeyer Karalis P.C. as bankruptcy counsel and Hyland Levin, LLP as special counsel. The petition was signed by Stephen D. Samost, managing member. NASSAU BROADCASTING: Gets Extension to File Payment Plan -------------------------------------------------------- Marie Beaudette at Dow Jones' Daily Bankruptcy Review reports that a bankruptcy judge has granted Nassau Broadcasting Corp. a 60-day extension to file a creditor-repayment plan as it awaits regulatory approval to sell its radio stations. About Nassau Broadcasting Nassau Broadcasting Partners LP is a radio-station owner and operator. Three secured lenders -- affiliates of Goldman Sachs Group Inc., Fortress Investment Group LLC and P.E. Capital LLC -- filed involuntary Chapter 7 bankruptcy petitions (Bankr. D. Del. Case No. 11-12934) on Sept. 15, 2011, against Nassau Broadcasting Partners LP, the owner of 45 radio stations in the northeastern U.S. The lender group said in court papers that they are owed $83.8 million secured by all of Nassau's property. Involuntary petitions were also filed against three affiliates of Nassau, which is based in Princeton, New Jersey. The lenders said the stations aren't worth enough to pay them in full. Nassau Broadcasting in October won a Delaware bankruptcy court's blessing to convert its involuntary Chapter 7 bankruptcy -- pressed by creditors including Goldman Sachs Lending Partners LLC -- to a proceeding on its own terms in Chapter 11. NEBRASKA EDUCATIONAL: Fitch Affirms 'B' Rating on $17-Mil. Bonds ---------------------------------------------------------------- Fitch Ratings affirms approximately $17.5 million of education facility revenue bonds issued by the Nebraska Educational Finance Authority on behalf of Midland University (MU or the university), formerly known as Midland Lutheran College, at 'B'. The Rating Outlook remains Negative. SECURITY The bonds are a general obligation of the college, additionally secured by a cash-funded debt service reserve. KEY RATING DRIVERS OPERATIONS WEAK BUT IMPROVING: MU's rating reflects a stressed operating profile that is slowly improving due to enrollment growth in fall of 2011, recovery initiatives including ongoing expense controls and a successful debt reduction initiative completed in May of 2012. WEAK LIQUIDITY LIMITS FLEXIBILITY: MU's severely deteriorated financial cushion declined further in fiscal 2012 as a result of necessary operational support and will require multiple years of positive operating results to achieve any measure of unrestricted balance sheet resources. RECOVERY PLAN ONGOING: MU's enrollment strategy for addressing negative operating margins and rebuilding balance sheet resources over a period of three years via enrollment growth appears challenging yet reasonable based on a growing demand trend that began in fall 2011. What Could Trigger A Rating Action FURTHER RESOURCE DETERIORATION: MU's inability to sustain growth in enrollment related revenues would limit margin improvement and pressure the rating. Credit Profile MU's fiscal 2012 margin based on draft statements is anticipated to improve from fiscal 2011 - operating results, inclusive of unrestricted contributions, partially receivable in future years, are expected to be positive. Compared to the 2012 budget, draft operating results exceeded expected tuition (5.7% increase) and auxiliary revenues (7.5% increase). During the school year, the university received pledges of $5.3 million for unrestricted contributions, of which $1 million was realized in fiscal 2012. The remainder is expected to be realized in and beyond fiscal 2013. MU's rating will be negatively pressured if audited 2012 results are materially weaker than initially expected. MU's operations continue to feature relatively high tuition discounting as a result of pricing concessions made for the 324 students that transferred to MU from Dana College (Dana), which closed down in 2010. Regular increases in tuition (4.8% for fiscal 2013) and room and board charges (4.9% for fiscal 2013) partially offset the discounting. As the concessions for Dana transfer students expire, discounting is expected to normalize to about 50%, a level that Fitch views as still quite high. The fiscal 2013 budget reflects a continuing negative operating margin, which was previously forecasted by MU. However, Fitch expects improved results as unrestricted contributions materialize and expense controls continue to reduce operating deficits. Based on ongoing operational rebalancing efforts, MU projects that its operating margin will return to break-even by fiscal 2014. Noting the magnitude of recovery required by MU, Fitch considers the projection challenging to achieve in two years, despite the growth in student generated fees and potential contributions supporting fiscal 2013. Demand Trend Positive Based on current matriculations, MU expects enrollment growth in fall of 2012 to be similar to or better than fall 2011. MU had a 977 headcount for the 2011-2012 school year; in fall of 2011, MU experienced one of the largest freshman classes in five years. The university enrolled 366 new students, exceeding expectations of 265 students by a large margin (38%). For each of the past three fall semesters, freshman class sizes have exceeded expectations. MU expects to enroll 1,300 students by fall of 2014; given the successes of fall 2011 and 2012, Fitch notes that MU may be able to achieve its enrollment goal target by 2014. MU's investment in its marketing and recruitment efforts in the Omaha metropolitan market, strategic academic program initiatives and expansion of its athletic programs are targeted at improving the student experience and driving student demand. MU's ability to realize enrollment growth and maintain stable enrollment levels is critical to improving its credit profile. Meager Financial Cushion MU's liquidity position remains extremely weak. Available funds, defined as cash and investments not permanently restricted, totaled negative $4.7 million at May 31, 2012, declining from negative $1.5 million at May 31, 2011. A reduction in available funds was expected as the university drew upon reserves to manage operating losses. MU received $1.5 million in a gift during fiscal 2012 that is restricted for scholarships. MU also received $1 million of contribution pledges totaling $5.3 million during fiscal 2012 and expects to use these unrestricted funds for operations. MU expects $2.5 million of the outstanding pledges to be realized in fiscal 2013, which should diminish reliance on the endowment for operational support. MU borrowed $3.5 million during fiscal 2012 from its permanently restricted endowment pool ($8.25 million as of May 2012) for operations, with repayment scheduled to commence in fiscal 2014 from all available sources of revenue. MU remains extremely vulnerable to unexpected operating events as it has a very limited cushion to withstand revenue and or expenditure shocks. This underscores the university's need to sustain a positive trend in both demand and student generated revenues. Debt Burden Remains High MU's long-term debt of $19.6 million includes approximately $17.5 million of fixed-rate bonds and $2.1 million of notes and capitalized leases. The lender of MU's largest note ($3.6 million) forgave half of the note in fiscal 2012, reducing the outstanding payable to $1.8 million. The note forgiveness was not due to an inability to pay but a result of a proactive and committed board with strong local ties. While Fitch notes the debt reduction favorably, debt burden remains high. For fiscal 2012, annual debt service of $2.1 million amounted to nearly 10.7% of unrestricted operating revenue, down from 14% previously. Midland University, re-branded in 2010 from Midland Lutheran College, is a private, co-educational liberal arts college located in Fremont, Nebraska, approximately 35 miles northwest of Omaha. The college primarily serves undergraduate students, and has expanded its masters programs in education and professional accounting to include business administration, in fall of 2012. MU is affiliated with the Evangelical Lutheran Church in America. NEWLEAD HOLDINGS: Receives NASDAQ Notification Letter ----------------------------------------------------- NewLead Holdings Ltd. Receives NASDAQ Notification Letter Regarding Minimum Market Value of Publicly Held Shares Rule NewLead Holdings Ltd. disclosed that on Aug. 30, 2012 the Company received a written notification from The NASDAQ Stock Market LLC indicating that the Company is not in compliance with NASDAQ Listing Rule 5450(b)(3)(C) for continued listing on The NASDAQ Global Select Market because the Market Value of the Company's Publicly Held Shares ("MVPHS") was below $15,000,000 for the previous 30 consecutive business days. In accordance with the NASDAQ Listing Rules, the Company has been granted a 180-day compliance period to regain compliance with the requirements of the NASDAQ Listing Rules. The compliance period for the MVPHS requirement ends on Feb. 26, 2013. During the compliance period, the Company's common shares will continue to be listed and traded on The NASDAQ Global Select Market. Pursuant to its discussions with the NASDAQ, the Company intends to regain compliance with the MVPHS requirement by furnishing updated information regarding the Company's principal stockholders in a Form 6-K. It is anticipated that the information in such Form 6-K will show that the Company had maintained compliance with the MVPHS requirement as of Aug. 29, 2012. As of Aug. 29, 2012, the reference date for NASDAQ, we had 38,969,814 common shares that are expected to be considered as Publicly Held Shares by the NASDAQ of the total 309,339,711 common shares outstanding. About NewLead Holdings NewLead Holdings Ltd. -- http://www.newleadholdings.com-- is an international, vertically integrated shipping company that owns and manages product tankers and dry bulk vessels. NewLead currently controls 22 vessels, including six double-hull product tankers and 16 dry bulk vessels of which two are newbuildings. N ewLead's common shares are traded under the symbol "NEWL" on the NASDAQ Global Select Market. NEWPAGE CORP: Wants to Formulate Ch. 11 Plan After Mediation ------------------------------------------------------------ NewPage Corporation, et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Jan. 2, 2013, and Feb. 28, 2013, respectively. On Aug. 13, the Debtors filed the Chapter 11 Plan. The Debtors relate that they will file their disclosure statement after the mediation. A hearing on Oct. 16, at at 2 p.m. has been set. Objections, if any, are due Oct. 9, at 4 p.m. As reported in the Troubled Company Reporter on Sept. 6, 2012, Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that NewPage Corp. is stuck between conflicting demands from secured and unsecured creditors. According to the report, the papermaker filed a plan last month that satisfied neither the secured nor the unsecured faction. The bankruptcy judge responded by appointing a mediator. Mediation was scheduled to begin Sept. 4. The company said in a court filing last week that arriving at a "consensual plan" will be "no easy task." There will be an Oct. 16 hearing on the so-called exclusivity motion. If approved by the U.S. bankruptcy judge in Delaware, the deadline will be pushed out by four months to Jan.2. The report related that the plan NewPage filed in August contains an option under which there would be settlement of claims by the unsecured creditors' committee challenging the validity of liens held by first-lien lenders. Alternatively, the plan would forgo settlement, allowing a lawsuit on lien validity to continue after the company exits Chapter 11. NewPage has consistently said that unsecured creditors are "hopelessly out of the money" and there is no theory under which success in a suit would bring them a dividend under a Chapter 11 plan. The official committee contends that the lenders financed an acquisition in 2007 and a refinancing two years later that included fraudulent transfers. About NewPage Corp Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. NewPage Group, NewPage Holding, NewPage, and certain of their U.S. subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del. Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its subsidiary, Consolidated Water Power Company, is not a part of the Chapter 11 proceedings. Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage Port Hawkesbury Corp., brought a motion before the Supreme Court of Nova Scotia to commence proceedings to seek creditor protection under the Companies' Creditors Arrangement Act of Canada. NPPH is under the jurisdiction of the Canadian court and the court- appointed Monitor, Ernst & Young in the CCAA Proceedings. Initial orders were issued by the Supreme Court of Nova Scotia on Sept. 9, 2011 commencing the CCAA Proceedings and approving a settlement and transition agreement transferring certain current assets to NewPage against a settlement payment of $25 million and in exchange for being relieved of all liability associated with NPPH. On Sept. 16, 2011, production ceased at NPPH. NewPage originally engaged Dewey & LeBoeuf LLP as general bankruptcy counsel. In May 2012, Dewey dissolved and commenced its own Chapter 11 case. Dewey's restructuring group led by Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., moved to Proskauer Rose LLP. In June, NewPage sought to hire Proskauer as replacement counsel. NewPage is also represented by Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, NewPage disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. The Official Committee of Unsecured Creditors selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. NEWPAGE CORP: Verso Paper Merger Retreat Inflicts Bond Losses ------------------------------------------------------------- Krista Giovacco and Charles Mead at Bloomberg News report that NewPage Corp. bondholders, speculating the company needs no help in boosting earnings in a hobbled paper market, have seen the value of their holdings dwindle by $690 million since turning down a buyout offer in May from a rival controlled by Leon Black. The report relates that the largest U.S. coated-paper maker's $1.77 billion of 11.375% notes due December 2014 fell 4.5 cents Sept. 5 to 64 cents on the dollar. A day earlier Verso Paper Corp. said it ended merger discussions with the Miamisburg, Ohio- based company. That was the biggest drop since March and put the bonds, which touched 60 cents, further below the estimated 103 cents Verso offered in May. The report notes that NewPage, which filed for bankruptcy in September after posting 11 straight quarterly losses, is struggling to boost earnings as demand for coated paper has been declining about 5% to 6% annually, according to Moody's Investors Service. First-lien bondholders have been negotiating a plan of reorganization with the company after it said that unsecured creditors are "hopelessly out of the money." "First-lien holders should have taken that deal because the recovery value down the road is both lower and riskier because creditors will likely be compensated with a greater portion of equity," Kevin Cohen, a New York-based analyst at Imperial Capital LLC, said in a telephone interview. "They probably misjudged their negotiating power and the desperation, or the lack thereof, of Verso." According to the report, Verso ended attempts to negotiate an acquisition with NewPage and its creditors, saying it would instead focus on "internal growth projects," the company said in a Sept. 4 statement. New York-based buyout firm Apollo Global Management LLC controlled by Black purchased Verso, a former unit of International Paper Co., for $1.4 billion in August 2006. About NewPage Corp Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. NewPage Group, NewPage Holding, NewPage, and certain of their U.S. subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del. Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its subsidiary, Consolidated Water Power Company, is not a part of the Chapter 11 proceedings. Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage Port Hawkesbury Corp., brought a motion before the Supreme Court of Nova Scotia to commence proceedings to seek creditor protection under the Companies' Creditors Arrangement Act of Canada. NPPH is under the jurisdiction of the Canadian court and the court- appointed Monitor, Ernst & Young in the CCAA Proceedings. Initial orders were issued by the Supreme Court of Nova Scotia on Sept. 9, 2011 commencing the CCAA Proceedings and approving a settlement and transition agreement transferring certain current assets to NewPage against a settlement payment of $25 million and in exchange for being relieved of all liability associated with NPPH. On Sept. 16, 2011, production ceased at NPPH. NewPage originally engaged Dewey & LeBoeuf LLP as general bankruptcy counsel. In May 2012, Dewey dissolved and commenced its own Chapter 11 case. Dewey's restructuring group led by Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., moved to Proskauer Rose LLP. In June, NewPage sought to hire Proskauer as replacement counsel. NewPage is also represented by Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, NewPage disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. The Official Committee of Unsecured Creditors selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. PACIFIC RIM: Reports $0.6 Million Net Loss in Fiscal 1st Quarter ---------------------------------------------------------------- On Sept. 7, 2012, Pacific Rim Mining Corp. reported its financial and operating results for the three months ended July 31, 2012, reporting a net loss of US$(.06) million, compared to net income of US$0.2 million for the same period a year earlier. According to the news release, the income recorded for Q1 2012 is primarily a result of a gain on derivative liability of US$1.0 million, related to changes in the fair value of common stock warrants issued by the Company during recent private placement financings. "This unrealized income more than offset the expenses incurred during Q1 2012, which led to the comprehensive income of US$0.2 million recorded for the period. During Q1 2013, the gain on derivative liability was US$0.1 million, which was insufficient to offset the expenses incurred during the period, the result being a comprehensive loss for the period of US$(0.6) million." Consolidated Statements of Financial Position and Consolidated Statements of Loss and Comprehensive Loss for Q1 2013 were not provided in the news release. According to the news release, the Company has no source of revenue, and will require additional cash to continue to fund legal, exploration and administrative expenses. "As at July 31, 2012, the Company has working capital deficit of US$(0.9) million, has incurred losses since inception and has an accumulated deficit of US$90.4 million. The Company's ability to continue operations and exploration activities as a going concern is dependent upon its ability to obtain future financing. The Company will need to raise additional funds during fiscal 2013 to support exploration and administration expenses as well as costs pertaining to the Arbitration action. While the Company has been successful in obtaining financing in the past, there is no assurance that sufficient funds will be available to the Company, or be available on favourable terms in the future." A copy of the news release is available at http://is.gd/IZMIgi About Pacific Rim Mining Based in Vancouver, British Columbia, Canada, Pacific Rim Mining Corp. is an environmentally and socially responsible exploration company whose business plans and management talent focus on high grade, environmentally clean gold deposits in the Americas. Pacific Rim's most advanced asset is the vein-hosted El Dorado gold project in El Salvador, where the Company also owns several grassroots gold projects. The Company holds a joint venture option on the Hog Ranch epithermal gold project in Nevada and is actively pursuing additional exploration opportunities elsewhere in the Americas. Pacific Rim Mining Corporation's business activity is focused on three main priorities: resolution of the El Dorado project permitting impasse, exploration of the Hog Ranch gold project and generation of new project opportunities. The El Dorado project is the subject of an arbitration claim (the "Arbitration") (more thoroughly described in the Company's Q1 2013 MD&A and Fiscal 2012 MD&A) being heard at the International Center for the Settlement of Investment Disputes ("ICSID") at the World Bank. During Q1 2013 the Arbitration was given permission by ICSID to proceed, under the Investment Law of El Salvador, to its final phase wherein the merits of the claim will finally be addressed at ICSID headquarters in Washington, DC. Notwithstanding the ongoing legal action, the Company continues to seek a negotiated resolution to the El Dorado permitting impasse and to resuming its advancement of the El Dorado project. The Company holds an option to earn a 65% interest in the Hog Ranch gold property in Nevada. Based on the results of a surface exploration program conducted over the past year, during Q1 2013 the Company selected targets for, and recently received a permit to conduct, a Phase 1 drill program on the Hog Ranch property. Pacific Rim's shares trade under the symbol PMU on the Toronto Stock Exchange ("TSX") and on the OTCQX market in the US under the symbol PFRMF. For the fiscal year ended April 30, 2012, Pacific Rim recorded a loss of US$1.8 million, compared to a loss of US$3.8 million for the fiscal year ended April 30, 2011. The Company's balance sheet at April 30, 2012, showed US$6.9 million in total assets, US$1.8 million in total liabilities, and shareholders' equity of US$5.1 million. PAR PETROLEUM: Appoints New Board of Directors & Officers --------------------------------------------------------- Par Petroleum Corporation disclosed that its predecessor Delta Petroleum Corporation consummated its plan of reorganization on Aug. 31, 2012. The reorganized company, Par Petroleum, emerged from Delta's bankruptcy with a substantially delevered balance sheet. Pursuant to Delta's plan of reorganization, $265 million in long-term notes and substantially all other unsecured claims were converted into the common stock of Par Petroleum. Par Petroleum's common stock will be publicly traded on the over-the- counter (OTC) market under the trading symbol "PARR". Par Petroleum's only long-term debt is a $30 million delayed-draw term loan, of which $13 million was drawn on Aug. 31, 2012. Proceeds of the facility provided funding on Aug. 31, 2012 to two trusts for the payment of certain expenses relating to the administration of the Delta bankruptcy case. Proceeds will also be used for general corporate purposes. In addition, in connection with the transactions consummated pursuant to Delta's plan of reorganization, Par Petroleum partnered with Laramie Energy II, LLC ("Laramie"), an oil and gas operator. Laramie and Par Petroleum each contributed their respective assets in Mesa and Garfield counties, Colorado, to form a new joint venture called Piceance Energy, LLC. Laramie and Par Petroleum hold 66.66% and 33.34% ownership interests in Piceance Energy, respectively. Subsequently, Piceance Energy entered into a new $140 million credit agreement, and distributed approximately $74.1 million to Par Petroleum and $24.8 million to Laramie. The distributions are subject to adjustment per the joint venture transaction effective date of July 31, 2012. To implement Par Petroleum's new vision and direction, ownership has replaced the Company's former Board of Directors and has installed a new management team. In particular, five new individuals (introduced below) have been appointed to serve as Par Petroleum's Board of Directors, effective immediately, and the Board has appointed a new management team for Par Petroleum, led by John T. Young, Jr. as Par's Chief Executive Officer and R. Seth Bullock as Par's Chief Financial Officer. In addition, two members of the new Board, Jacob Mercer and William Monteleone, also will serve on the board of the joint venture Piceance Energy. "I speak for the entire management team when I express my excitement about joining Par Petroleum," said John T. Young, Jr., the new Chief Executive Officer. "I am confident in Par's future, and the Board and management team are looking forward to working with our joint venture partner Laramie Energy II, LLC to rebuild our energy business. I believe that the Company's improved capital structure and enhanced financial flexibility positions us well within our industry." As outlined in the Company's Third Amended Plan of Reorganization as confirmed by the United States Bankruptcy Court on Aug. 16, 2012, the Board members were designated by the new principal equity owners of Par. Par's new Board is comprised of Messrs. Jacob Mercer, William Monteleone, Michael Keener, L. Melvin Cooper and Benjamin Lurie. John T. Young, Jr. - Chief Executive Officer. Delta appointed Mr. Young as its Chief Restructuring Officer in November 2011, and appointed him as Chief Financial Officer in July 2012. Mr. Young also currently serves as Senior Managing Director at Conway MacKenzie, Inc., which the Company retained in late 2011 to assist with its strategic alternatives process. Mr. Young has served as Senior Managing Director at Conway MacKenzie, Inc. since December 2008. Mr. Young has substantial knowledge and experience providing restructuring advisory services, including interim management and debtor advisory, litigation support, post-merger integration, and debt restructuring and refinancing. Mr. Young's experience also includes serving in a multitude of advisory capacities within the energy and oilfield services industries as well as Lone Star Funds and KPMG Peat Marwick. Mr. Young is a Certified Public Accountant and received his BBA and MBA from Baylor University. R. Seth Bullock - Chief Financial Officer. Mr. Bullock currently serves as a Director at Conway MacKenzie, Inc. and has served in that capacity since joining Conway MacKenzie, Inc. in November 2011. From May 2010 through November 2011, he served as Managing Director at Kenmont Solutions Capital, a direct origination mezzanine fund focused on middle market companies in the energy, power and infrastructure sectors. From July 2007 through May 2010, Mr. Bullock served as Analyst at Kenmont Investments Management, a multi-strategy hedge fund focused on the energy, power and transportation sectors. Prior to Kenmont, he held positions of increasing responsibility with Koch Capital Markets, a division of Koch Industries, Inc. Prior to Koch, Mr. Bullock held positions of increasing responsibility with Arthur Andersen's Global Energy Corporate Finance Group. Mr. Bullock holds a BBA in Finance from Loyola University, New Orleans. He holds the Chartered Financial Analyst (CFA) designation. Jacob Mercer - Director. Mr. Mercer is a Senior Portfolio Manager at Whitebox Advisors having joined them in 2007. Previously, Mr. Mercer worked for Xcel Energy (XEL) as Assistant Treasurer and Managing Director. Prior to that, he worked at Piper Jaffray as a Senior Credit Analyst and Principal and at Voyageur Asset Management as a Credit Analyst. In addition, Mr. Mercer served as a Logistics Officer in the United States Army. Mr. Mercer holds a BA in both Business Management and Economics from St. John's University. He holds the Chartered Financial Analyst (CFA) designation. William Monteleone - Director. Mr. Monteleone is an Associate at Equity Group Investments (EGI) having joined in 2008. Previously, Mr. Monteleone worked for Banc of America Securities LLC where he was involved in a variety of debt capital raising transactions, including leveraged buyouts, corporate-to-corporate acquisitions and other debt financing activities. At EGI, he is responsible for evaluating potential new investments and monitoring existing investments. In addition to Par Petroleum, Mr. Monteleone serves on the Board of Directors of Wapiti Oil and Gas, LLC and Kuwait Energy Company. Mr. Monteleone graduated magna cum laude from Vanderbilt University with a bachelor's degree. Benjamin Lurie - Director. Mr. Lurie is an Associate at Equity Group Investments (EGI) having joined in 2011. Prior to joining the firm, Mr. Lurie worked at Lurie Investments evaluating and developing new and existing business opportunities ranging from technology to services to real estate. At EGI, Mr. Lurie is responsible for evaluating potential new investments and monitoring existing investments. He holds a master's degree in business administration from INSEAD, and a postgraduate certificate from the United Nations University. He received dual BAs from the University of Wisconsin-Madison. He holds the Chartered Financial Analyst (CFA) designation. Michael R. Keener - Director. Mr. Keener has over 30 years of experience in the energy sector. Since Jan. 2011, Mr. Keener has served as a Principal of KP Energy, providing mezzanine debt, private equity and direct asset ownership primarily with exploration and production companies in North America. Prior to joining KP Energy, Mr. Keener worked as a Managing Director in the energy team of Imperial Capital LLC from October 2009 until December 2011. From 2003 until their acquisition by Imperial Capital in October 2009, Mr. Keener served as Principal and Managing Director of Petrobridge Investment Management. From 1981 to 2003, Mr. Keener served in a number of roles in Royal Dutch Shell PLC including as Director and Vice President of Shell Capital and Financial Advisor to Shell Offshore. Mr. Keener also has served on the Board of Directors of Dune Energy (DUNR) since January 2012. Mr. Keener holds a degree in Business Administration from Bloomsburg University and a Masters of Business Administration from Loyola University. L. Melvin Cooper - Director. Mr. Cooper has over 25 years of experience in various accounting and financial roles. Currently, Mr. Cooper serves as the Senior Vice President and Chief Financial Officer of Forbes Energy Services Ltd (FES), a public company in the energy services industry. Prior to Forbes, Mr. Cooper served as Senior Vice President and Chief Financial Officer of Cude Oilfield Contractors, Inc. From 2004 to 2006, Mr. Cooper served as President of SpectraSource Corporation, a supplier of products and services to the new home building industry. Beginning in 1999, Mr. Cooper served as Senior Vice President and Chief Financial Officer of Nationwide Graphics, a printing and supply chain management company. Prior to Nationwide Graphics, Mr. Cooper served as President or Chief Financial Officer of various companies involved in telecommunications, nutritional supplements, water purification, scrap metal, drilling fluids, and natural gas marketing. Mr. Cooper also has served on the Board of Directors of Flotek Industries, Inc. (FTK) since October 2010. In 2011, Mr. Cooper earned the Board Leadership designation from the National Association of Corporate Directors. Mr. Cooper received a degree in accounting from Texas A&M University-Kingsville (formerly Texas A&I) in 1975 and is a Certified Public Accountant (CPA). In addition to its interest in Piceance Energy, Par Petroleum owns an interest in the Point Arguello unit offshore California, certain miscellaneous oil and gas assets and certain tax attributes, including significant net operating losses. About Delta Petroleum Delta Petroleum Corporation (NASDAQ: DPTR) is an independent oil and gas company engaged primarily in the exploration for, and the acquisition, development, production, and sale of, natural gas and crude oil. Natural gas comprises over 90% of Delta's production services. The core area of its operations is the Rocky Mountain Region of the United States, where the majority of the proved reserves, production and long-term growth prospects are located. Delta and seven of its subsidiaries sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 11-14006 to 11-14013, inclusive) on Dec. 16, 2011, roughly six weeks before the Jan. 31, 2012 scheduled maturity of its $38.5 million secured credit facility with Macquarie Bank Limited and after several months of unsuccessful attempts to sell the business. Delta disclosed $375,498,248 in assets and $310,679,157 in liabilities, which also include $152,187,500 in outstanding obligations on account of the 7% senior unsecured notes issued in March 2005 with US Bank National Association indenture trustee; and $115,527,083 in outstanding obligations on account of 3-3/4% Senior Convertible Notes due 2037 issued in April 2007. In its amended schedules, the Delta Petroleum disclosed $373,836,358 in assets and $312,864,788 in liabilities. W. Peter Beardsley, Esq., Christopher Gartman, Esq., Kathryn A. Coleman, Esq., and Ashley J. Laurie, Esq., at Hughes Hubbard & Reed LLP, in New York, N.Y., represent the Debtors as counsel. Derek C. Abbott, Esq., Ann C. Cordo, Esq., and Chad A. Fights, Esq., at Morris, Nichols, Arsht & Tunnel LLP, in Wilmington, Del., represent the Debtors as co-counsel. Conway Mackenzie is the Debtors' restructuring advisor. Evercore Group L.L.C. is the financial advisor and investment banker. The Debtors selected Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The petition was signed by Carl E. Lakey, chief executive officer and president. Delta Petroleum won confirmation of its reorganization plan at a hearing on Aug. 15. Laramie Energy II LLC is the plan sponsor. Delta Petroleum emerged from bankruptcy as Par Petroleum Corporation. At closing, Laramie and Par Petroleum contributed their respective assets in Mesa and Garfield counties, Colorado, to form a new joint venture called Piceance Energy, LLC. Laramie and Par Petroleum hold 66.66% and 33.34% ownership interests in Piceance Energy, respectively PEAK RESORTS: Section 341(a) Meeting Scheduled for Wednesday ------------------------------------------------------------ The U.S. Trustee for Region 2 will convene a Meeting of Creditors under U.S.C. Sec. 341(a) in the Chapter 11 case of Peak Resorts, Inc., on Sept. 12, 2012, at 10:00 a.m. at Syracuse, N.Y. Proofs of Claims are due by Jan. 28, 2013. Government Proof of Claim is due by Jan. 28, 2013. About Peak Resorts Peak Resorts, Inc., dba Greek Peak Mountain Resort, and four affiliates filed for Chapter 11 bankruptcy (Bankr. N.D.N.Y. Case Nos. 12-31471 to 12-31473, 12-31475 and 12-31476) in Syracuse on Aug. 1, 2012. The affiliates are Hope Lake Investors LLC, V.R.P.D. II L.P., REDI LLC, and A.R.K. Enterprises Inc. Peak Resorts owns 888.5 acres of real estate, including the "Greek Peak Mountain Resort", a four-season resort development located in Virgil, New York. The 888.5-acre property is located 8 miles from Cortland, New York and has the largest day trip area in Central New York state. REDI LLC owns 402.7 acres of adjacent property. Hope Lake Investors owns the Hope Lake Lodge & Cascades Indoor Water Park, a 151-room hotel and resort facility in Virgil, Cortland County. The Debtors have a total of 264 employees. Chief Bankruptcy Judge Robert E. Littlefield Jr. presides over the case. Lawyers at Harris Beach PLLC serve as the Debtors' counsel. The Debtors scheduled these assets and debts: Scheduled Assets Scheduled Liabilities ---------------- --------------------- Hope Lake $27,180,635 $48,800,528 Peak Resorts $12,991,230 $26,558,438 REDI, LLC $1,298,401 $3,851,808 The petitions were signed by Allen R. Kryger, president. PEAK RESORTS: Taps American Resort as Management Consultant ----------------------------------------------------------- Peak Resorts, Inc., et al., ask the U.S. Bankruptcy Court for the Northern District of New York for authority to employ American Resort Management, LLC, as management consultant to the Debtors. As management consultant, ARM will assist the Debtors with management of the Debtors' operations. ARM will provide these services: 1. Auditing the Debtors' cash control and reporting policies and procedures and making recommendations to bring practices in compliance with the policies and procedures. ARM will also be making recommendations to bring the policies and procedures in compliance with policies and procedures generally adopted and applied in the hotel and resort industy by businesses similar to the Debtors. 2. Providing advice and counsel to the Debtors in preparation of monthly budgets as required by the DIP Agreement. 3. Evaluating management and operations with the goal of increasing net cash flow from operations and providing recommendations for actions to be immediately implemented notwithstanding current resource constraints. Upon information and belief, ARM does not hold any interest adverse to the estates of the Debtors. As compensation for its services, ARM will be paid $6,000 per monthl plus reasonable and customary expenses. About Peak Resorts Peak Resorts, Inc., dba Greek Peak Mountain Resort, and four affiliates filed for Chapter 11 bankruptcy (Bankr. N.D.N.Y. Case Nos. 12-31471 to 12-31473, 12-31475 and 12-31476) in Syracuse on Aug. 1, 2012. The affiliates are Hope Lake Investors LLC, V.R.P.D. II L.P., REDI LLC, and A.R.K. Enterprises Inc. Peak Resorts owns 888.5 acres of real estate, including the "Greek Peak Mountain Resort", a four-season resort development located in Virgil, New York. The 888.5-acre property is located 8 miles from Cortland, New York and has the largest day trip area in Central New York state. REDI LLC owns 402.7 acres of adjacent property. Hope Lake Investors owns the Hope Lake Lodge & Cascades Indoor Water Park, a 151-room hotel and resort facility in Virgil, Cortland County. The Debtors have a total of 264 employees. Chief Bankruptcy Judge Robert E. Littlefield Jr. presides over the case. Lawyers at Harris Beach PLLC serve as the Debtors' counsel. The Debtors scheduled these assets and debts: Scheduled Assets Scheduled Liabilities ---------------- --------------------- Hope Lake $27,180,635 $48,800,528 Peak Resorts $12,991,230 $26,558,438 REDI, LLC $1,298,401 $3,851,808 The petitions were signed by Allen R. Kryger, president. PEAK RESORTS: HLO Can Employ Starr Associates as Special Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of New York has granted Hope Lake Investors, LLC, permission to employ Starr Associates LLP as special counsel. Specifically, Starr will represent the Debtors in connection with preparation and filing of the amended offering plan with the New York State Attorney General's Office to allow a bulk sale of 246 condominium unites as required by the FDIC. The Amended Offering Plan is pursuant to the Interim Order, entered Aug. 2, 2012, which authorizes the Debtors to obtain post petition financing from the FDIC, on a senior secured superpriority basis. To the knowledge of Allen R. Kryger, managing member of HLI, Starr does not hold any interest adverse to the estates of the Debtors and has waived its claim for prepetition fees. The Debtors have provided for the payment of a total of $3,000 for fees, in the Debtors' budgets, to cover part of the expected fees of said preparation and filing by Starr. HLI will adjust its budget to include the balance of the fees in the next budget and will seek approval of said payment by the FDIC and the Bankruptcy Court through the Debtor In Possession financing process. All fees and disbursement will be paid as an expense of administration upon further application to the Court by Starr. About Peak Resorts Peak Resorts, Inc., dba Greek Peak Mountain Resort, and four affiliates filed for Chapter 11 bankruptcy (Bankr. N.D.N.Y. Case Nos. 12-31471 to 12-31473, 12-31475 and 12-31476) in Syracuse on Aug. 1, 2012. The affiliates are Hope Lake Investors LLC, V.R.P.D. II L.P., REDI LLC, and A.R.K. Enterprises Inc. Peak Resorts owns 888.5 acres of real estate, including the "Greek Peak Mountain Resort", a four-season resort development located in Virgil, New York. The 888.5-acre property is located 8 miles from Cortland, New York and has the largest day trip area in Central New York state. REDI LLC owns 402.7 acres of adjacent property. Hope Lake Investors owns the Hope Lake Lodge & Cascades Indoor Water Park, a 151-room hotel and resort facility in Virgil, Cortland County. The Debtors have a total of 264 employees. Chief Bankruptcy Judge Robert E. Littlefield Jr. presides over the case. Lawyers at Harris Beach PLLC serve as the Debtors' counsel. The Debtors scheduled these assets and debts: Scheduled Assets Scheduled Liabilities ---------------- --------------------- Hope Lake $27,180,635 $48,800,528 Peak Resorts $12,991,230 $26,558,438 REDI, LLC $1,298,401 $3,851,808 The petitions were signed by Allen R. Kryger, president. PEREGRINE FINANCIAL: Files Schedules of Assets & Debts ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Peregrine Financial Group Inc. filed formal lists in bankruptcy court last week showing assets of $270 million and liabilities totaling $525.3 million. According to the report, the list of liabilities shows unsecured claims of $519.8 million, mostly owing to customers. The remainder of the debt is a few million each in secured claims and unsecured claims entitled to priority in payment from assets that don't belong to customers. The report relates that the filing at the week's end gives a picture of the funds the trustee located. The largest slug of assets is $249.5 million mostly held at banks and brokers. The lists don't break down what's customer property and what isn't. The report notes that the largest component of cash and securities is more than $100 million in segregated accounts at Jefferies Bache LLC. There is another $47.5 million in segregated accounts at JPMorgan Chase Bank NA. Assets also include $5.8 million in government bonds. Last week, the bankruptcy trustee for Peregrine started the process of making a first distribution of $123 million to futures customers from the $181 million in customer property in his possession. Customer property is that part of Peregrine's assets that may be distributed only to customers. There will be a hearing on Sept. 12 in U.S. Bankruptcy Court in Chicago to consider approval of the interim distribution. 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. PHIL'S CAKE: Tampa's Alessi Bakeries Files to Halt Foreclosure -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Phil's Cake Box Bakeries Inc., operating in Tampa under the fourth generation of the Alessi family, filed for Chapter 11 protection last week to prevent the secured lender from foreclosing on a production facility. According to the report, the company, which generated $11.9 million in sales last year, purchased the plant just when the economy faltered and sales declined. Known as Alessi Bakeries, the company listed assets of $20.8 million. Liabilities include $5.9 million owing to Zions National Bank, which was foreclosing. The Bloomberg report discloses that there is another $3 million owing to the Small Business Administration and $820,000 to trade suppliers, according to court filings. Phil's Cake filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-13635) in Tampa, Florida, on Sept. 5, 2012. PHIL'S CAKE: Wants to Use Lenders' Cash Collateral -------------------------------------------------- One day after filing for Chapter 11 relief, Phil's Cake Box Bakeries, Inc., asked the Court for authority, both on an interim and final basis, to use cash that constitute collateral to its pre-bankruptcy creditors. The Debtor said it needs access to the Cash Collateral to continue operating its businesses or manage its financial affairs, substantially in compliance with a budget. At different times, the Debtor executed loan agreements in favor of Southern Commerce Bank, N.A., Zions First National Bank, Heritage Bank, and Colson Services Corp., as successor in interest to the United States Small Business Association and the Florida Business Development Corporation: Amount Owed as of Lender the Petition Date ------ ----------------- Southern Commerce $1,600,000 ($660,000 relates to a line of credit) Zions $6,000,000 Heritage $250,000 Colson $3,000,000 BankAtlantic $43,000 SCB asserts that it has a first priority position with respect to accounts receivable and inventory. According to the Debtor, Zions may assert that it has perfected first position mortgage lien on the Debtor's Eagle Trail Facility, including any fixtures, including freezers and associated equipment located at the property. The Debtor asserts that Zions does not assert a lien on Cash Collateral. Heritage may assert that it has perfected first position mortgage liens on certain real property located in the vicinity of the Debtor's retail facility. The Debtor asserts that Heritage does not assert a lien on Cash Collateral. Colson may assert that it has perfected junior liens and security interest in the Eagle Trail Facility, including fixtures and equipment. The Debtor asserts that Colson does not assert a lien on Cash Collateral. BankAtlantic may assert liens on and security interests in certain items of equipment located at 1009 and 1017 N. Excelda Avenue. The Debtor asserts that BankAtlantic does not assert a lien on Cash Collateral. According to a cash flow forecast, the Debtor expects to burn $217,270 in the next four weeks through Sept. 29, for, among other things, payment of salaries and wages, equipment leases, utilities, taxes, and interest under the SCB loans. In exchange for the use of Cash Collateral, the Debtor proposes to provide the Secured Creditors with replacement liens identical in extent, validity and priority as such liens existed on the Petition Date. As additional adequate protection to SCB, the Debtor proposes to pay SCB on a monthly basis accrued interest on (i) the line of credit obligation; and (ii) the commercial loan obligation, Loan Number x125. SCB has filed in the case docket a Notice of Consent to Entry of Agreed Interim Bridge Order Authorizing Use of Cash Collateral. There's a hearing Sept. 13 at 10:45 a.m. in Tampa Bankruptcy Court on the Debtor's request to use cash collateral. The Court will also consider at the hearing the Debtor's request to pay prepetition salaries, wages and benefits. About Alessi's Bakeries Phil's Cake Box Bakeries, Inc., dba Alessi's Bakeries, Inc., is a family-owned bakery and catering business owned and operated in Tampa, Fla., by four generations of the Alessi family. The operations have grown from a small bakery delivering bread by horse and wagon, to the current 100,000 square foot manufacturing facility serving retail customers nationwide, with a retail location maintaining and continuing its historic traditions in Tampa. Alessi's operates from two locations: a manufacturing facility and a retail bakery. The Eagle Trail manufacturing facility is located at 5202 Eagle Trail Drive, Tampa. The Eagle Trail Facility is a 100,000 sq. ft. building which houses various production lines including five ovens, 40,000 sq. ft. of refrigerated space with four walk-in freezers and two coolers, and 20,000 sq. ft. of raw material and packing supplies warehouse space. Alessi's also operates a retail bakery facility, located at 2909 West Cypress Street, Tampa. Alessi's owns both locations. As of the Petition Date, Alessi's estimates that it has assets of roughly $14.5 million and liabilities of roughly $14.7 million. Alessi's filed for bankruptcy to address the over-leveraging due to the Eagle Trail Facility acquisition and the inability fully and timely to service debt during the period in which sales dropped. Alessi's filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 12-13635) on Sept. 5, 2012. Bankruptcy Judge K. Rodney May oversees the case. Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, P.A., serves as the Debtor's counsel. The petition was signed by Philip Alessi, Jr., president. PHIL'S CAKE: Sec. 341 Creditors' Meeting Set for Oct. 5 ------------------------------------------------------- The United States Trustee in Tampa, Florida, will convene a Meeting of Creditors under 11 U.S.C. Section 341(a) in the Chapter 11 case of Phil's Cake Box Bakeries, Inc., on Oct. 5, 2012, at 9:30 a.m. at Tampa, FL (861) - Room 100-B, Timberlake Annex, 501 E. Polk Street. Proofs of claim are due in the case by Nov. 19. About Alessi's Bakeries Phil's Cake Box Bakeries, Inc., dba Alessi's Bakeries, Inc., is a family-owned bakery and catering business owned and operated in Tampa, Fla., by four generations of the Alessi family. The operations have grown from a small bakery delivering bread by horse and wagon, to the current 100,000 square foot manufacturing facility serving retail customers nationwide, with a retail location maintaining and continuing its historic traditions in Tampa. Alessi's operates from two locations: a manufacturing facility and a retail bakery. The Eagle Trail manufacturing facility is located at 5202 Eagle Trail Drive, Tampa. The Eagle Trail Facility is a 100,000 sq. ft. building which houses various production lines including five ovens, 40,000 sq. ft. of refrigerated space with four walk-in freezers and two coolers, and 20,000 sq. ft. of raw material and packing supplies warehouse space. Alessi's also operates a retail bakery facility, located at 2909 West Cypress Street, Tampa. Alessi's owns both locations. As of the Petition Date, Alessi's estimates that it has assets of roughly $14.5 million and liabilities of roughly $14.7 million. Alessi's filed for bankruptcy to address the over-leveraging due to the Eagle Trail Facility acquisition and the inability fully and timely to service debt during the period in which sales dropped. Alessi's filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 12-13635) on Sept. 5, 2012. Bankruptcy Judge K. Rodney May oversees the case. Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, P.A., serves as the Debtor's counsel. The petition was signed by Philip Alessi, Jr., president. PINNACLE AIRLINES: Former Silver Airways Exec. Named SVP and CFO ---------------------------------------------------------------- Pinnacle Airlines Corp. has named Curtis J. Berchtold as senior vice president and chief financial officer. Mr. Berchtold was previously CFO at Silver Airways in Fort Lauderdale, Fla. His start date has yet to be determined. "We're excited to welcome Curt to the executive leadership team," said Pinnacle Airlines president and CEO John Spanjers. "He brings vast experience in airline operational and financial planning and analysis, and will take on a central role in Pinnacle's ongoing turnaround efforts." Mr. Berchtold succeeds Ted Christie, who resigned as Pinnacle's CFO in March. "I look forward to joining the experienced team of aviation professionals at Pinnacle and contributing to a successful reorganization and future growth," Mr. Berchtold said. Prior to his previous role as CFO for Silver Airways, Berchtold served as CFO at Corsair Aviation, as well as interim vice president of planning for Mesa Air Group during its restructuring. Berchtold earned a Bachelor of Business Administration in Finance from the University of Texas, Arlington and an MBA in Finance and Marketing from Indiana University. The term of his agreement establishes the initial annual base salary of Mr. Berchtold at $250,000, subject to review on an annual basis. Mr. Berchtold is eligible to participate in the Company's Annual Incentive Plan, and will participate in the Company's Long-Term Incentive Program. The Agreement provides that Mr. Berchtold is eligible to participate in the same benefit programs that the Company provides to its other employees or executive employees. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. The official committee of unsecured creditors tapped Morrison & Foerster LLP as its counsel, and Imperial Capital, LLC, as financial advisors. Pinnacle has the exclusive right to propose a reorganization plan until Jan. 25. PRECISION DRILLING: S&P Cuts Rating on Senior Secured Debt to 'BB' ------------------------------------------------------------------ Standard & Poor's Rating Services lowered its issue-level rating on Calgary, Alta.-based Precision Drilling Corp.'s senior unsecured debt to 'BB' from 'BB+'. "At the same time, Standard & Poor's revised its recovery rating assigned to the senior unsecured debt to '5' from '4'. The 'BB+' long-term corporate credit rating and stable outlook are unchanged," S&P said. "The rating action follows the US$300 million increase in the company's senior secured committed credit facility, which ranks senior to the rated debt, and now accounts for about 80% of our estimated enterprise value at the time of our simulated default for the company in 2017. As a result, we estimate the value remaining to cover the unsecured debt in a default scenario has decreased to about 12% of our estimated default enterprise value," S&P said. "Although our recovery analysis estimates diminished recovery prospects for senior unsecured debtholders, we believe the increased availability under its revolving credit facility has bolstered Precision's near-term liquidity position," said Standard & Poor's credit analyst Michelle Dathorne. "As the company continues to replace its lower value tier 3 drilling rigs with the higher complexity tier 1 and 2 rigs, we expect it will use the availability under its credit facility to bridge its cash flow shortfall. Despite our expectations of increasing debt throughout our 2012-2014 rating forecast period, we believe Precision's financial risk profile should continue to support the 'BB+' rating," Ms. Dathorne added. "The ratings on Precision reflect Standard & Poor's opinion of the company's participation in the cyclical and highly volatile oilfield services sector, the diminished cash flow generation profile associated with the persistently weak outlook for conventional natural gas exploration and production, and Precision's capital structure. We believe that offsetting these weaknesses are the company's good cost management, the size and geographic diversification of its drilling and service rig fleet, and the large number of rigs with deep drilling capabilities in the U.S. and Western Canada Sedimentary Basin (WCSB) markets," S&P said. "Precision operates in North America's principal oil and gas basins, notably the WCSB. The company also has land rigs in several high-growth markets in the U.S. With its current fleet consisting of 348 drilling rigs in Canada and the U.S., eight rigs in its international operations, 190 service rigs, and 19 snubbing units, Precision has one of North America's largest land drilling rig fleets. Although we expect the pace of tier 1 and 2 rig additions will lag the decommissioning of the company's tier 3 rigs, we believe the company will retain its market leading position in the WCSB," S&P said. "The stable outlook reflects Standard & Poor's expectation that Precision will maintain its financial risk profile, specifically its cash flow protection metrics, at levels we view as appropriate for the 'BB+' rating. We believe the company's accelerated pace of rig new buildactivity indicates a shift away from its historically moderate financial policies, because we expect this will generate negative free cash flow during our forecast period as Precision spends to reconfigure its rig fleet. In our opinion, the company should be able to temper possible market share erosion as it replaces its tier 3 rigs with the higher complexity tier 1 and 2 rigs, which are better suited to develop unconventional oil and gas resources. Based on the long-term contracts in place, we expect Precision should be able to maintain its fully adjusted funds from operations (FFO)-to-debt above 35%. In our view, the debt and cash-flow generation underpinning this metric supports the 'BB+' rating. If operating cash flow falls below our expectations, and FFO-to-debt decreases below 35%, we would lower the rating to 'BB'. We believe capital spending will remain elevated through our 2012 and 2013 forecast period, so we do not expect the company will be able to reduce debt levels and move its financial risk profile into the intermediate category, which would be required to support a 'BBB-' rating. Nevertheless, if Precision can maintain its fully adjusted FFO-to-debt in the 45%-50% range in a midcycle industry environment, we would raise the rating," S&P said. RADIOSHACK CORP: Closing Date of Joint Venture Moved to Oct. 15 --------------------------------------------------------------- A subsidiary of RadioShack Corporation entered into an amendment letter to that certain agreement, dated June 6, 2012, with a direct wholly-owned subsidiary of SMS Marketing Service (Asia) Co., Ltd., an affiliate of Hon Hai Precision Industry Co. Ltd. The Amendment Letter extends the proposed closing date of the Joint Venture Agreement to Oct. 15, 2012, and, in certain circumstances, Nov. 15, 2012. A copy of the Joint Venture Agreement is available for free at: http://is.gd/06ztGm About Radioshack RadioShack sells consumer electronics and peripherals, including cellular phones. It operates roughly 4,700 stores in the U.S. and Mexico. It also operates about 1,500 wireless phone kiosks in Target stores. The company also generates sales through a network of 1,100 dealer outlets worldwide. Revenues for the last 12 months' period ending June 30, 2012 were roughly $4.4 billion. Radioshack's balance sheet at June 30, 2012, showed $2.08 billion in total assets, $1.38 billion in total liabilities and $704.6 million in total stockholders' equity. * * * As reported by the TCR on Aug. 1, 2012, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Fort Worth, Texas-based RadioShack Corp. to 'B-' from 'B+'. "The downgrade of RadioShack reflects our view that it will be very difficult for the company to improve its gross margin in the second half of the year," said Standard & Poor's credit analyst Jayne Ross, "given the highly promotional nature of year- end holiday retailing in the wireless and consumer electronic categories. It is our belief that all segments of the company's business will remain under margin pressure for 2012 and into 2013." In the July 27, 2012, edition of the TCR, Fitch Ratings has downgraded its long-term Issuer Default Rating (IDR) for RadioShack Corporation to 'CCC' from 'B-'. The downgrade reflects the significant decline in RadioShack's profitability, which has become progressively more pronounced over the past four quarters. RCS CAPITAL: ABC Learning Out of Creditors Committee ---------------------------------------------------- On Dec. 1, 2011, Ilene J. Lashinsky, U.S. Trustee for Region 14, appointed a 3-member committee of unsecured creditors in the bankruptcy case of RCS Capital Development, L.L.C., et al. In its ruling of June 7, 2012, the Court granted summary judgment in favor of the debtor, RCS Capital Development, LLC, and against unsecured creditor ABC Learning Centres Limited and ABC Development Learning Centres (USA) Inc. and held that the claims of ABC were deemed paid in full. In light of that ruling, the UST has determined that ABC should be removed from the Committee. In view of the foregoing, the UST has reconstituted the unsecured creditors committee, which will consist of: 1. William Dutton 3801 E. Coolidge Phoenix, AZ 85018 Tel: (602) 677-2700 2. Kenneth Krynski c/o Scott Brown Lewis and Roca LLP 40 N. Central Avenue, 19th Floor Phoenix, AZ 85004 Tel: (602) 262-5321 About RCS Capital RCS Capital Development, LLC, et al., filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 11-28746) on Oct. 12, 2011. Michael W. Carmel, Esq., at Michael W. Carmel, Ltd., in Phoenix, Ariz., represents the Debtor as counsel. RCS's bankruptcy schedules reflect assets of US$57,038,210, of which the largest is a judgment in the approximate amount of US$57,000,000 against ABC Learning Centres Ltd., an Australia- based operator of childcare centers. RCS's bankruptcy schedules reflect liabilities of approximately of US$47,169,203, the most significant of which is the disputed US$41,000,000 claim of ABC. Judge Randolph J. Haines presides over RCS's case. RCS had various contractual relationships with ABC that resulted in litigation in Maricopa County. That litigation resulted in a US$50 million jury verdict against ABC and judgment (worth US$56,456,732 as of Nov. 15, 2011). Liquidators for ABC filed for recognition under Chapter 15 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware about two weeks after RCS obtained its verdict. Judge Kevin Gross entered an order on Nov. 16, 2010, that recognized the Chapter 15 proceeding. ABC liquidators contended in papers filed in Delaware that RCS violated the Chapter 15 order by continuing actions in Nevada to seize property in which the liquidators claimed an interest. At a hearing in U.S. Bankruptcy Court in Delaware on Oct. 4, 2011, the liquidators asked Judge Gross to rule that RCS violated the automatic stay. The liquidators also wanted RCS to be held in contempt, directed to return property and assessed with punitive damages. Judge Gross concluded the Oct. 4, 2011 hearing and said he would rule later. As reported by the Troubled Company Reporter on Oct. 17, 2011, Bill Rochelle, the bankruptcy columnist for Bloomberg News, noted that perhaps hoping to preclude Judge Gross from handing down an unfavorable ruling, RCS filed its own Chapter 11 petition on Oct. 12, 2011, in Phoenix. The Debtor's Fourth Amended Plan of Reorganization provides that City of North Las Vegas, holder of a $293,000 secured claim, will receive proceeds from the sale of property in West Ann Road, in North Las Vegas. The remaining proceeds of the property, estimated to be worth not less than $500,000, will be paid for the claims of other classes. With respect to Hill Crest Bank, a secured creditor, the Debtor would convey to Hill Crest the properties at South Valley View, and Simmons Properties to Hill Crest. Unsecured creditors other than ABC Learning Centres are impaired although they are expected to be paid in full using the remaining proceeds from the Ann Road Sale the Debtor's profit participation in the property at East Russell Road, in Las Vegas. ABC Learning's unsecured claim is unimpaired under the Plan. Owners of the Debtor will retain their equity interests. RESIDENTIAL CAPITAL: Foreclosure Review Could Cost Up to $250MM --------------------------------------------------------------- Joseph Checkler at Dow Jones' Daily Bankruptcy Review reports that Residential Capital LLC said it may cost $250 million for PricewaterhouseCoopers LLP to complete a government-mandated review of the mortgage servicer's home-foreclosure practices. 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. 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). REVEL ENTERTAINMENT: Bank Debt Trades at 22% Off ------------------------------------------------ Participations in a syndicated loan under which Revel Entertainment Group LLC is a borrower traded in the secondary market at 78.33 cents-on-the-dollar during the week ended Friday, Sept. 7, 2012, a drop of 0.35 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 750 basis points above LIBOR to borrow under the facility. The bank loan matures on Feb. 15, 2017, and carries Moody's Caa1 rating and Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 181 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Revel Entertainment -- http://www.revelresorts.com/-- owns Revel, a newly opened beachfront resort that features more than 1,800 rooms with sweeping ocean views. The smoke-free resort has indoor and outdoor pools, gardens, lounges, a 32,000-square-foot spa, a collection of 14 restaurant concepts, and a casino. Revel is located on the Boardwalk at Connecticut Avenue in Atlantic City, New Jersey. REYNOLDS GROUP: Moody's Lowers CFR/PDR to 'B3'; Outlook Stable -------------------------------------------------------------- Moody's Investors Service downgraded the corporate family and probability of default ratings of Reynolds Group Holdings Limited ("RGHL") to B3 from B2. The ratings outlook is stable. Additional instrument ratings are detailed below. Moody's took the following rating actions: Reynolds Group Holdings Limited - Downgraded Corporate Family Rating to B3 from B2 - Downgraded Probability of Default Rating to B3 from B2 The ratings outlook is stable. Reynolds Group Holdings Inc - Downgraded EUR 80M Senior Secured Revolving Credit Facility due 11/5/2014 to B1 (LGD 2, 27%) from Ba3 (LGD 2, 27%) - Downgraded US $120M Senior Secured Revolving Credit Facility due 11/5/2014 to B1 (LGD 2, 27%) from Ba3 (LGD 2, 27%) - Downgraded US $2,000M Senior Secured Term Loan due 8/9/2018 to B1 (LGD 2, 27%) from Ba3 (LGD 2, 27%) - Downgraded US $2,325M Senior Secured Term Loan due 2/9/2018 to B1 (LGD 2, 27%) from Ba3 (LGD 2, 27%) - Downgraded EUR 250M Senior Secured Term Loan due 2/9/2018 to B1 (LGD 2, 27%) from Ba3 (LGD 2, 27%) Reynolds Group Issuer Inc., Reynolds Group Issuer LLC, Reynolds Group Issuer (Luxembourg) S.A., - Downgraded US $1,500M 7.875% Senior Secured Notes due 8/15/2019 to B1 (LGD 2, 27%) from Ba3 (LGD 2, 27%) - Downgraded US $1,125M 7.750% Senior Secured Notes due 10/15/2016 to B1 (LGD 2, 27%) from Ba3 (LGD 2, 27%) - Downgraded EUR 450M 7.750% Senior Secured Notes due 10/15/2016 to B1 (LGD 2, 27%) from Ba3 (LGD 2, 27%) - Downgraded US $1,500M 7.125% Senior Secured Notes due 04/15/2019 to B1 (LGD 2, 27%) from Ba3 (LGD 2, 27%) - Downgraded US $1,000M 6.875% Senior Secured Notes due 02/15/2021 to B1 (LGD 2, 27%) from Ba3 (LGD 2, 27%) - Downgraded US $2,241.033M 9.875% Senior Unsecured Notes due 8/15/2019 to Caa2 (LGD 5, 79%) from Caa1 (LGD 5, 79%) - Downgraded US $8.95M 9.875% Senior Unsecured Notes due 8/15/2019 to Caa2 (LGD 5, 79%) from Caa1 (LGD 5, 79%) - Downgraded US $1,000M 8.500% Senior Unsecured Notes due 05/15/2018 to Caa2 (LGD 5, 79%) from Caa1 (LGD 5, 79%) - Downgraded US $1,500M 9.000% Senior Unsecured Notes due 04/15/2019 to Caa2 (LGD 5, 79%) from Caa1 (LGD 5, 79%) - Downgraded US $1,000M 8.250% Senior Unsecured Notes due 02/15/2021 to Caa2 (LGD 5, 79%) from Caa1 (LGD 5, 79%) Beverage Packaging Holdings (Lux) II S.A. - Downgraded EUR 480M 8.000% Senior Notes due 12/15/2016 to Caa2 (LGD 5, 79%) from Caa1 (LGD 5, 79%) - Downgraded EUR 420M 9.5% Sr. Subordinated Notes due 06/15/2017 to Caa2 (LGD 6, 96%) from Caa1 (LGD 6, 96%) Pactiv Corporation - Downgraded US $300M 8.125% Bonds due 06/15/2017 to Caa2 (LGD 6, 94%) from Caa1 (LGD 6, 94%) - Downgraded US $250M 6.400% Notes (approximately $16M outstanding) due 01/15/2018 to Caa2 (LGD 6, 94%) from Caa1 (LGD 6, 94%) - Downgraded US $276.79M 7.950% Bonds due 12/15/2025 to Caa2 (LGD 6, 94%) from Caa1 (LGD 6, 94%) - Downgraded US $200M 8.375% Notes due 04/15/2027 to Caa2 (LGD 6, 94%) from Caa1 (LGD 6, 94%) Ratings Rationale The downgrade of the corporate family rating to B3 from B2 reflects pro-forma credit metrics that are below forecasted levels and an expectation that future improvement may proceed more slowly than originally projected. Pro-forma debt to EBITDA is above 6.5 times and debt to revenue above 120% while free cash flow remains minimal relative to debt. RGHL has been negatively impacted by the soft economy, production inefficiencies at Graham and competition and one or more of these factors is expected to continue to drag on operating performance over the intermediate term. As outlined in the press release dated August 1, 2011, RGHL's credit metrics were stressed from a series of debt financed acquisitions and had little room for any negative variance in operating performance. The B3 corporate family rating reflects RGHL's weak pro-forma credit metrics, integration risk and limited operating history for the combined entity. The rating and outlook also reflect the company's lengthy raw material cost pass-through provisions, concentration of sales within certain segments and acquisitiveness/financial aggressiveness. Additionally, the company has a complex capital and organizational structure and is owned by a single individual. RGHL is still integrating a large acquisition (Graham Packaging in September 2011) and remains acquisitive. The company has only been operating as a combined entity since 2007 and approximately 20.0% of pro-forma revenues are from Graham. Strengths in the company's profile include its strong brands and market positions in certain segments, scale and high percentage of blue-chip customers. The company has strong brands and market positions and there are some switching costs for customers in certain segments. Many of RGHL's businesses had a history of strong execution and innovation prior to their acquisition and much of the existing management teams were retained. Scale, as measured by revenue, is significant for the industry and helps RGHL lower its raw material costs. The company also has high exposure to food and beverage packaging. RGHL also currently has adequate liquidity with approximately $1.2 billion in cash on hand. The rating outlook is stable reflecting an expectation that credit metrics will improve modestly, but remain within the rating category over the horizon. The rating could be downgraded if there is a deterioration in credit metrics, liquidity or the competitive and operating environment. The ratings could also be downgraded if the company undertakes any significant acquisition. Specifically, the ratings could be downgraded if debt to EBITDA increases to above 7.0 times, EBIT to interest expense declined below 1.0 time, and free cash flow to debt remained below 1.0%. The rating could be upgraded if RGHL sustainably improves its credit metrics within the context of a stable operating and competitive environment while maintaining adequate liquidity including ample cushion under financial covenants. Specifically, RGHL would need to improve debt to EBITDA to below 6.3 times, EBIT to interest expense to at least 1.4 times and free cash flow to debt to above 3.5% while maintaining the EBIT margin in the high single digits. The principal methodology used in rating RGHL was the Global Packaging Manufacturers: Metal, Glass, and Plastic Containers Industry Methodology published in June 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. REYNOLDS GROUP: S&P Lowers CCR to 'B' on Low Earnings Growth ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Reynolds Group Holdings Ltd. and its subsidiaries to 'B' from 'B+'. "We also lowered the issue-level ratings on the company's senior secured debt to 'B+' from 'BB-', and lowered the issue level ratings on its unsecured debt to 'CCC+' from 'B-'. The '2' and '6' recovery ratings, which remains unchanged, reflect our expectation for substantial (70% to 90%) recovery and negligible (0% to 10%) recovery, respectively, in the event of a payment default. The outlook is stable," S&P said. "The downgrades reflect Reynolds' still highly leveraged financial profile and lack of earnings growth and debt reduction to the extent we previously expected," said credit analyst Liley Mehta. "The ratings on Reynolds reflect Standard & Poor's assessment of the company's business risk profile as 'strong' and financial risk profile as 'highly leveraged'." "The outlook is stable. We expect credit measures to strengthen to the appropriate 6.5x we consider consistent with the rating. We could lower the ratings if Reynolds does not consistently generate positive free operating cash flow, or if liquidity erodes significantly, or if it were in danger of violating financial covenants. We could also lower the ratings if the company undertakes another large, debt-financed acquisition, which causes debt leverage to increase significantly," S&P said. "For us to consider a downgrade, EBITDA margins would have to deteriorate to about 17% on sales declines of 5% or more, based on our view of the company's adjusted debt levels. This would result in debt leverage of 7.5x or more. Cash flow could weaken to less than we currently anticipate if deteriorating economic conditions cause a significant slowdown in consumer spending or the company experiences heightened competition in any of its businesses or if raw material prices rise so sharply that the company is unable to pass on its higher costs to customers," S&P said. "Reynolds' current very aggressive financial policies and high debt leverage make an upgrade unlikely at this time. If earnings growth and debt reduction improved credit measures such that total debt-to-EBITDA was 6x, and funds from operations-to-total adjusted debt was 10% on a sustained basis, we could consider an upgrade. This would require the company to both improve operating results in the current difficult operating environment and to pursue its growth objectives in a manner that does not stretch the balance sheet," S&P said. ROUNDY'S SUPERMARKETS: S&P Cuts CCR to 'B' on Weak Credit Metrics ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Milwaukee-based Roundy's Supermarkets Inc., including the corporate credit rating to 'B' from 'B+'. The outlook is stable. "The downgrade comes after weaker-than-expected operating trends in the second quarter as a result of increased price competition and effective marketing programs from competitors. We expect these factors will lead to weaker performance and further credit metric deterioration," S&P said. "The rating on Roundy's reflects our view of the company's business risk profile as 'weak,' which we revised from 'fair,'" S&P said. "This change incorporates that weak economic conditions and new entrants into the industry, particularly discounters, will increase competition and weaken the company's operating performance and market presence," explained Standard & Poor's credit analyst Charles Pinson-Rose. "This is somewhat offset by the company's relatively good presence in its local markets. We view Roundy's financial risk profile as 'highly leveraged,' based on forecasted credit ratios." "Roundy's second-quarter operating trends, highlighted by a same- store sales decline of 3.3% and an EBITDA deterioration of about 7.6%, were below our expectations and weaker than most industry peers,' added Mr. Pinson-Rose. For the remainder of 2012, we anticipate further profit declines as the company takes price investments as a result of competitors more aggressive pricing strategies and marketing campaigns -- leading to lower sales and operating margins," S&P said. "The outlook is stable. This incorporates expected profit declines and credit metric deterioration, but we believe credit ratios will remain appropriate for the financial risk assessment and rating category. We also expect Roundy's to maintain adequate liquidity and generate positive discretionary cash flow. If the operating declines are meaningfully worse than expected and EBITDA was near $180 million, leading to leverage in the high-6x area and EBITDA coverage of interest below 2x, we would likely consider a lower rating. This could occur in 2012 if total revenue increased 1%, gross margins contracted 50 bps, and operating and administrative expenses increased about 3.2%," S&P said. "Conversely, given the company's operating trajectory and industry conditions, we do not expect to consider a higher rating in the near term. However, if it could improve leverage to the low-5x area and coverage to the mid-2x area, we may consider a positive rating action. For that to occur, EBITDA would need to improve to about $235 million, which we do not view as likely in the near Term," S&P said. SAAB CARS: Creditors Demand Info on Ally's $61-Mil. Claim --------------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that creditors of Saab Cars North America Inc. asked a Delaware bankruptcy judge Wednesday for an order forcing Ally Financial Inc. to disclose documents relating to the lender's $61 million claim and its seizure and sale of 900 vehicles, saying repeated requests have met with little success. Bankruptcy Law360 relates that according to the motion filed by SCNA's official committee of unsecured creditors, says Ally has failed to produce all the documents the committee needs to evaluate the claim and has not provided any information regarding the disposition of the sale proceeds. 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: City Council Approves Emergency Budget ------------------------------------------------------ Carolina Bolado at Bankruptcy Law360 reports that San Bernardino, Calif.'s city council on Wednesday passed an emergency budget that cuts 30 percent of the city's expenses and aims to slice $16.4 million off this year's expected $45 million budget shortfall that sent the city into Chapter 9 protection. 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. SAN BERNARDINO: Rust Consulting Approved Claims and Noticing Agent ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California authorized the City of San Bernardino, California, to employ Rust Consulting/Omni Bankruptcy, a Division of Rust Consulting, Inc., as claims, noticing and balloting agent. As reported in the Troubled Company Reporter on Aug. 28, 2012, the Debtor related that its potential creditor pool is vast, with over 200,000 people residing in the City and with over 5,000 parties expected to be on mailing matrix. Given the size of the City's mailing matrix, it would be impracticable and inefficient for the City and the Court to undertake the task of sending notices to the creditors and other parties-in-interest. Rust Omni will function as claims, noticing and balloting agent to, among other things, serve as the Court's notice agent to mail notices to the Debtor's creditors and parties. 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. SEDONA DEVELOPMENT: Specialty Trust Wants Ch. 11 Trustee -------------------------------------------------------- Specialty Mortgage Corporation, secured creditor and party in interest, as servicer for Specialty Trust, Inc. and others in the Chapter 11 cases of Sedona Development Partners, LLC, and The Club At Seven Canyons, LLC, asks the U.S. Bankruptcy Court for the District of Arizona to appoint a Chapter 11 trustee in the Debtors' cases. Specialty Mortgage, in its motion, says that cause exist in the appointment of a trustee because of the Debtors' inability to confirm a plan, Debtors' mismanagement and defaults in administering these estates, and upon information and belief, misappropriation of assets. Specialty Mortgage adds that the disintegrating features on the golf course, and ruined areas from unsupervised and uncontrolled cart use, attest to Debtors' failures that are clearly diminishing the value of the estate as a whole. Specialty is represented by: Andante Law Group of Daniel E. Garrison, PLLC Scottsdale Financial Center I 4110 North Scottsdale Road, Suite 330 Scottsdale, AZ 85251 Tel: (480) 421-9449 Fax: (480) 522-1515 E-mail: joe@andantelaw.com - and - Kristi A. Katsma Dickinson Wright, PLLC 500 Woodward, Suite 4000 Detroit, MI 48226-3425 Tel: (313) 223-3180 Fax: (313) 223-3589 E-mail: kkatsma@dickinsonwright.com About Sedona Development Partners Sedona Development Partners owns an 18-hole golf course and related properties, including luxury villas, a practice park, range house, tennis courts and related facilities in Sedona, Arizona, known generally as Seven Canyons. The Club at Seven Canyons, LLC, operates the golf course and related facilities for SDP. SDP is the manager and sole member of the Club. Sedona Development Partners filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 10-16711) on May 27, 2010. The Club at Seven Canyons filed a separate Chapter 11 petition (Bankr. D. Ariz. Case No. 10-16714). John J. Hebert, Esq., Philip R. Rudd, Esq., and Wesley D. Ray, Es., at Polsinelli Shughart PC, in Phoenix, Ariz., assist the Debtors in their restructuring efforts. Lender Specialty Trust is represented by Joseph E. Cotterman, Esq., and Nathan W. Blackburn, Esq., at Gallagher & Kennedy, P.A. Sedona disclosed $29,171,168 in assets and $121,679,994 in liabilities. Sedona Development Partners, LLC, and The Club at Seven Canyons, LLC, filed with the U.S. Bankruptcy Court for the District of Arizona on June 17, 2011, a second amended joint disclosure statement in support of their second amended joint pan of reorganization. The Debtors' disclosure statement was approved on June 28, 2011. A Sept. 4 hearing has been set to consider approval of the disclosure statements explaining the competing plans for debtors Sedona Development Partners, LLC, and The Club at Seven Canyons, LLC. One plan was filed by Specialty Mortgage and the second was filed by the Debtors. SKY GROWTH: Moody's Assigns 'B2' CFR/PDR; Outlook Stable -------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Sky Growth Acquisition Corporation, doing business as Par Pharmaceutical Companies, Inc., including a B2 Corporate Family Rating. Moody's also assigned a senior secured rating of B1 and a senior unsecured rating of Caa1. The rating outlook is stable. The ratings are being assigned in conjunction of the buyout of Par by TPG Capital, L.P. At the close of the transaction, the ratings being assigned to Sky Growth will be applicable to Par Pharmaceutical Companies, Inc. as these entities are merged. Ratings assigned: B2 Corporate Family Rating B2 Probability of Default Rating B1 [LGD 3, 33%] Senior secured revolving credit facility of $150 million expiring 2017 B1 [LGD 3, 33% Senior secured term loan of $980 million due 2019 Caa1 [LGD 5, 86%] Senior unsecured notes of $490 million due 2020 "Par's B2 rating reflects a niche portfolio of specialized generic products, offset by high financial leverage and somewhat limited revenue diversity compared to other generic drug companies," stated Michael Levesque, Moody's Senior Vice President. Ratings Rationale Par's B2 rating reflects its niche position in the US generic pharmaceutical market, where it ranks 5th behind four substantially larger and more diverse players. Par's specialty is likely to remain its extended release formulations which are less commodity-like than typical generic products, attracting fewer competitors and better pricing dynamics. Par's pipeline contains numerous upcoming launches, and like other generic companies Par will benefit from a plethora of upcoming patent expirations on branded products. The company has a good history of generating gross profit and positive operating cash flow, and its quality track record has been strong to date. Offsetting these strengths, Par's leverage is expected to remain approximately 5 times. This level is high given less revenue diversity than generic pharmaceutical peers, as well as the operating risks of the sector. Among these are high hurdles for FDA manufacturing standards, causing significant disruption for many of Par's peers. Moody's expect that Par will remain acquisitive. While additional revenue diversity would benefit the credit profile, leverage may remain elevated. The rating outlook is stable, reflecting Moody's expectation for steady growth in revenue and EBITDA through new product launches, but continuation of relatively high financial leverage. Moody's could upgrade Par's ratings if debt/EBITDA appears sustainable below 4.0 times and if revenue diversity improves. This scenario could emerge with ongoing launches of new generic products, reduction in debt levels while pursuing disciplined business development. Conversely, Moody's could downgrade the ratings if leverage is sustained above 6.0 times. Such a scenario could arise with a significant debt-financed acquisition or a major business disruption. The principal methodology used in rating Par Pharmaceutical Companies was the Global Pharmaceutical Industry Methodology published in October 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Woodcliff Lake, New Jersey, Par Pharmaceutical Companies, Inc. is a specialty generic and branded pharmaceutical company operating primarily in the United States. The company reported $926 million of total revenues in 2011. SOLYNDRA LLC: Judge Clears to Poll Creditors on Chapter 11 Plan --------------------------------------------------------------- Peg Brickley at Dow Jones' DBR Small Cap reports that failed solar power equipment maker Solyndra LLC September 7 won court approval to poll creditors on the Chapter 11 plan that will wrap up its final affairs after reaching a truce with the U.S. Department of Energy, a major creditor. About Solyndra LLC Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. The Official Committee of Unsecured Creditors of Solyndra LLC has tapped Blank Rome LLP as counsel and BDO Consulting as financial advisors. In October 2011, the Debtors hired Berkeley Research Group, LLC, and designated R. Todd Neilson as Chief Restructuring Officer. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. When they filed for Chapter 11, the Debtors pursued a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors were unable to identify any potential buyers, an orderly liquidation of the assets for the benefit of their creditors. Solyndra did not receive acceptable offers to buy the business as a going concern. Two auctions late last year brought in a total of $8 million. A three-day auction in February generated another $3.8 million. An auction in June generated $1.79 million from the sale of 7,200 lots of equipment. Solyndra filed a liquidating plan at the end of July and scheduled a hearing on Sept. 7 for approval of the explanatory disclosure statement. The Plan is designed to pay 2.5% to 6% to unsecured creditors with claims totaling as much as $120 million. Unsecured creditors with $27 million in claims against the holding company are projected to have a 3% dividend. SOLYNDRA LLC: Reaches Deal on Payment of Tax Consulant Fees ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a stipulation consenting Solyndra LLC, et al.'s use of cash collateral. The stipulation entered among the Debtor, tax consultants -- Duff & Phelps, LLC, and Versatax Consulting, Inc., and DIP Lender AEP DIP 2011, LLC, provides that: -- the lender agrees that if and to the extent Duff and Versatax obtain a recovery, by cash or otherwise, for the benefit of the Debtors' estates, they may recover payment of their outstanding fees and expenses from any cash and other benefits that they may generate for the Debtors' estates subject to the terms of any Court order entered in the cases authorizing the retention of Duff and Versatax; and -- the payment would only affect the rights of the DIP lender who would have a lien over any proceeds generated by Duff and Versatax's efforts. In this relation, the use of cash collateral will be pursuant to the Court's final order dated Sept. 27, 2011, authorizing the Debtors to (i)(i) obtain postpetition secured financing and (ii) utilize cash collateral; (iii) granting liens and superpriority administrative expense status. The Court amended the Sept. 27 DIP order on Feb. 22, 2012, and again on June 18, 2012. A copy of the motion and the stipulation is available for free at http://bankrupt.com/misc/SOLYNDRA_stipulation.pdf About Solyndra LLC Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. The Official Committee of Unsecured Creditors of Solyndra LLC has tapped Blank Rome LLP as counsel and BDO Consulting as financial advisors. In October 2011, the Debtors hired Berkeley Research Group, LLC, and designated R. Todd Neilson as chief restructuring officer. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. When they filed for Chapter 11, the Debtors pursued a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors were unable to identify any potential buyers, an orderly liquidation of the assets for the benefit of their creditors. Solyndra did not receive acceptable offers to buy the business as a going concern. Two auctions late last year brought in a total of $8 million. A three-day auction in February generated another $3.8 million. An auction in June generated $1.79 million from the sale of 7,200 lots of equipment. Solyndra filed a liquidating plan at the end of July and scheduled a hearing on Sept. 7 for approval of the explanatory disclosure statement. The Plan is designed to pay 2.5% to 6% to unsecured creditors with claims totaling as much as $120 million. Unsecured creditors with $27 million in claims against the holding company are projected to have a 3% dividend. SOUTHEAST BANKING: Ch. 11 Trustee Seeks Case Conversion ------------------------------------------------------- BankruptcyData.com reports that the Chapter 11 trustee assigned to the Southeast Banking case filed with the U.S. Bankruptcy Court a motion to convert the Chapter 11 case to a liquidation under Chapter 7. The trustee states, "Undeterred, the Trustee has continued to pursue alternative investors for the past three years, but has been unable to procure a viable alternative investor to date. Thus, given the inability to consummate the confirmed plan or proceed with an alternative equity infusion transaction, the Trustee now seeks to convert this case back to Chapter 7, as the most economical and appropriate vehicle for final resolution of this case." Southeast Banking Corp. was the holding company of Southeast Bank, N.A., and its sister institution, Southeast Bank of West Florida, and the direct or indirect parent of a number of subsidiary corporations and affiliates, active and inactive, which at various times conducted substantial business throughout the State of Florida and beyond. The businesses of SEBC and its affiliates consisted of banking, real estate investment and development, insurance, mortgage banking, venture capital, and asset investment. At the time of their failure the Banks had total assets of $10.5 billion and total deposits of $7.6 billion. Most of the assets were with SEBNA, which had 218 of the combined 224 branches and all but $100 million of the assets. Together, the two banks had approximately 6,200 employees, operating exclusively in Florida. On September 20, 1991, Southeast Bank filed a voluntary petition under Chapter 7 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 91-14561). Southeast Bank, N.A., was seized by federal regulators while Southeast Bank of West Florida was seized by state regulators on September 19, 1991. On September 20, 1991, SEBC's board of directors voted to authorize the filing of a voluntary Chapter 7 petition, and then promptly resigned along with all of SEBC's officers. Jeffrey H. Beck was the fourth Trustee appointed in the Debtor's liquidation proceeding. This bankruptcy case was converted to Chapter 11 on September 17, 2007, almost sixteen years after its initial filing. SPRINGLEAF FINANCE: Fitch Affirms Junk Rating on Sr. Unsec. Debt ---------------------------------------------------------------- Fitch Ratings has affirmed the long-term Issuer Default Rating (IDR) and senior unsecured debt ratings of Springleaf Finance Corporation (Springleaf) at 'CCC'. Fitch also affirms the preferred stock ratings of AGFC Capital Trust I at 'C/RR6'. Finally, Fitch has withdrawn the 'CCC' IDR assigned to Springleaf Finance, Inc. as the entity no longer exists. The rating affirmations are based upon Springleaf's continued weak operating performance, which limits upward rating momentum. The company continues to report operating losses as margins remain depressed and overall asset quality metrics, while moderately improving, remain at relatively high levels. Fitch does not expect the current volume of originations will be sufficient to overcome continued margin pressure in the immediate term. Fitch's affirmations are also based upon Springleaf's progress implementing a longer term funding plan. As of June 30, 2012, the company had approximately $1.3 billion of liquidity generated from proceeds from operations and securitizations completed during 2012. In addition, Springleaf generated $736 million of additional proceeds from another securitization transaction completed in August 2012. However, Fitch remains concerned with approximately $1.8 billion of upcoming debt maturities in 2013, as current cash resources will be used to satisfy debt maturities for the remainder of 2012. The repayment of debt for 2013 will largely be dependent on the successful execution of securitization or other funding activities during the remainder of 2012 and 2013. Fitch believes there is material execution risk associated with this plan, and barring meaningful access to the capital markets over the next several months, Springleaf may have insufficient flexibility to address its near-term maturities. Fitch expects credit costs will continue to pressure profitability, as delinquencies have stabilized, but remain elevated at 6.48% at June 30, 2012. Fitch acknowledges Springleaf's efforts to restructure its operations to move collections of 60+ mortgage delinquencies to a centralized process, which helped to stabilize asset quality metrics over the last year. However, a weak economic environment, high unemployment and depressed real estate values are expected to weight on the nonprime customer, thus preventing meaningful credit improvement in the near term. Leverage, as measured by debt to equity, is high relative to the risk characteristics of the balance sheet. Balance sheet leverage increased marginally to 8.98x at June 30, 2012, compared to 8.80x one-year prior as Springleaf's equity base was reduced by operating losses. Fitch does not anticipate material improvement in leverage over the near term at Springleaf, as operating losses will continue to hamper its equity base. Rating Drivers and Sensitivities Positive rating momentum could be driven by the stabilization of operating performance resulting in a return to profitability, an improvement in asset quality performance, successful execution of securitization or other funding activities during the remainder of 2012 and 2013, and a substantial reduction in leverage to previously targeted levels. Conversely, substantial deterioration of the unencumbered portfolio leading to further losses would likely generate negative rating momentum or may result in notching the senior unsecured rating below the current IDR. Should liquidity be insufficient to repay upcoming debt maturities, resulting in a debt restructuring this would likely lead to a restricted default on the IDR and all classes of debt. Fitch has affirmed the following ratings: Springleaf Finance Corp. -- Long-term IDR at 'CCC'; -- Senior unsecured debt at 'CCC/RR4'. AGFC Capital Trust I -- Preferred stock at 'C/RR6'. Fitch has withdrawn the following rating as the entity no longer exists: Springleaf Finance, Inc. -- Long-term IDR withdrawn at 'CCC'. SUPERVALU INC: Store Closure No Impact on Moody's 'B3' CFR ---------------------------------------------------------- Moody's Investors Service said that SUPERVALU INC.'s announcement that it will close approximately 60 underperforming or non- strategic stores this fiscal year including 38 in its retail food reporting segment and 22 Save-A-Lot locations will not affect SUPERVALU's B3 corporate family rating or its negative outlook. The last rating action on SUPERVALU, INC. was a downgrade of the company's corporate family rating and probability of default rating to B3 and change in outlook to negative on July 19, 2012. The principal methodology used in rating SUPERVALU INC. was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. SUPERVALU, INC., headquartered in Eden Praire, Minnesota, is the country's third largest supermarket chain. SUPERVALU operates 1,101 traditional supermarket stores under the Acme, Albertson's, Cub Foods, Farm Fresh, Hornbacher's, Jewel-Osco, Lucky, Shaw's, Shop'n Save, Shoppers Food & Pharmacy and Star Market banners. The company also conducts its retail food business through a total of 1,136 hard-discount Save-A-Lot food stores, including 939 Save-A- Lot stores operated by licensee owners. Additionally, the company's independent business provides supply chain services, primarily wholesale distribution to approximately 1,950 stores of independent retail customers in addition to its own stores. TERRABON INC: Files for Chapter 7 Bankruptcy Protection ------------------------------------------------------- Houston Bioenergy Company Terrabon Files for Chapter 7 Bankruptcy Protection Terrabon, a Houston-based bioenergy company, has filed for bankruptcy protection under Chapter 7 of the Federal bankruptcy laws. Under Chapter 7 proceedings, the company's operations cease and a trustee will be tasked with liquidating the company's assets for the benefit of creditors. "It is with great disappointment we disclosed Terrabon has been unable to obtain additional financing and must suspend operations," said Gary Luce, CEO of Terrabon. "This is a sad day for Terrabon's employees, partners, suppliers and vendors who never wavered from their robust support of our company and the technology we deeply believe in. We want to thank them and convey how deeply we appreciate their steadfast loyalty during our journey to become an additional source of alternative energy for the United States." Despite the increasing market excitement about Terrabon and its award-winning MixAlco(R) technology platform that converts low- cost, readily available, non-food, non-sterile biomass into renewable drop-in transportation fuels such as gasoline and jet fuel, the company could not obtain additional corporate funding to finish developing and engineering its first commercial-scale plant. Suspension of operations resulted in lay-offs of approximately 60 full-time employees, effective with the bankruptcy filing. About Terrabon Terrabon, Inc. -- http://www.terrabon.com/-- is a bioenergy technology company formed in 1995 to commercialize technologies developed by the Texas Engineering Experiment Station, a member of the Texas A&M University System. Terrabon planned to deploy these cutting-edge technologies through licensing and joint venture arrangements. THOR INDUSTRIES: Sept. 17 Hearing on Tennessee Cash Collateral -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Tennessee, according to Thor Industries, LLC's case docket, will convene a hearing on Sept. 17, 2012, at 9 a.m., to consider the agreed order authorizing the Debtor's use of Tennessee State Bank's cash collateral. As reported by the Troubled Company Reporter on May 24, 2012, Judge Marcia Phillips Parsons authorized Thor Industries to use TSB's cash collateral to fund general ongoing business operations in accordance with a budget. To secure the aggregate amount of all Cash Collateral used by the Debtor, Tennessee State Bank is granted (i) a replacement lien and security interest on all of the Prepetition Collateral and (ii) an additional postpetition lien and security interest, junior only to any valid and presently existing liens or security interests, in the property of the estate. Prior to the petition date, Thor Industries entered into a Loan Agreement with Tennessee State Bank to continue the development of Mountain Cove Marina, a related RV park, and a related campground facility, all located in Campbell County, Tennessee, on Norris Lake. In addition, certain property known as the Hickory Bluff Marina was pledged as additional Collateral to secure the loan of Tennessee State Bank and to insure the United States Department of Agriculture long-term financing of the development project. As of March 30, 2012, the total debt owing by Thor Industries to Tennessee State Bank was $8,471,899 while the appraised value of the Collateral of the development was $11,875,000. Thor Industries said it needs the cash collateral for the payment of its operating budgets and one additional capital expense. Thor Industries said it has no present alternative borrowing source from which it could secure additional funding to operate it business. Without the authority to use cash collateral, Thor Industries said it will be unable to continue its business operations and propose a plan of reorganization. Thor Industries said it will be seriously and irreparable harmed, resulting in significant losses to the Debtor's estate and its creditors. About Thor Industries Lake City, Tennessee-based Thor Industries, LLC, filed a Chapter 11 petition (Bankr. E.D. Tenn. Case No. 12-50625) in Greenville on March 30, 2012. The Debtor disclosed $11.97 million in assets and $10.0 million in liabilities as of the Chapter 11 filing. The Debtor owns the property in Mountain Lake Marina & RV Resort in Campground Road, Lake City, Tennessee, worth $11 million and securing an $8.52 million debt. The Debtor also owns a property Hickory Bluff Marina, in Camden County, Georgia, worth $875,000 and securing a $375,000 loan. Judge Marcia Phillips Parsons oversees the case. The petition was signed by R. Steven Williams, Sr., chief manager. TONGJI HEALTHCARE: Had $25,000 Net Loss in Second Quarter --------------------------------------------------------- Tongji Healthcare Group, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $24,868 on $744,256 of total operating revenue for the three months ended June 30, 2012, compared with a net loss of $84,228 on $594,672 of total operating revenue for the same period a year ago. The Company reported a net loss of $128,622 on $1.4 million of total operating revenue for the six months ended June 30, 2012, compared with a net loss of $22,885 on $1.2 million of total operating revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $13.7 million in total assets, $13.8 million in total liabilities, and a stockholders' deficit of $133,691. The Company has negative working capital of $11.8 million, an accumulated deficit of $710,363, and a stockholders' deficit of $133,691 as of June 30, 2012. A copy of the Form 10-Q is available at http://is.gd/9lbndY About Tongji Healthcare Based in Nanning, Guangxi, the People's Republic of China, Tongji Healthcare Group, Inc., a Nevada corporation, operates Nanning Tongji Hospital, a general hospital with 105 licensed beds. As reported in the TCR on April 18, 2012, EFP Rotenberg, LLP, in Rochester, New York, expressed substantial doubt about Tongji Healthcare Group'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 has negative working capital of $9.8 million, an accumulated deficit of $581,741, and a stockholders' deficit of $5,161 as of Dec. 31, 2011. TRIAD GUARANTY: Asks for Amendments to Insurance Dept. Order ------------------------------------------------------------ Under the terms of a Corrective Order issued by the Illinois Department of Insurance in 2009, Triad Guaranty Inc.'s mortgage insurer subsidiary, Triad Guaranty Insurance Corporation, is required to hold assets to support its Deferred Payment Obligation liability in a separate account pursuant to a custodial arrangement. As of Aug. 31, 2012, the aggregate amount of the DPO liability exceeded the cash and invested assets of TGIC that were available for segregation in a separate account. Accordingly, TGIC was not in compliance with this provision of the Order as of Aug. 31, 2012. As previously reported, TGIC has asked the Department to amend, modify or otherwise waive compliance with this provision of the Order. In addition, TGIC has also requested that the calculation of the carrying charge on the DPO prescribed in the Order be amended to limit the amount to a maximum equal to the actual aggregate net investment income that TGIC earns rather than an amount based on the effective rate earned by TGIC on its investments. The Company believes that neither proposed amendment affects the intent of the Order or TGIC's ability to continue to make payments consistent with its current practice. In response to TGIC's requests for these modifications to the Order, the Department has scheduled a public hearing on Sept. 10, 2012, and invited TGIC and its policyholders to provide testimony regarding these proposed amendments to the Order. In addition, the Department has also invited TGIC and its policyholders at the hearing to provide testimony as to whether TGIC should be permitted to continue to run-off its existing book of insurance business or whether the Department should implement a different regulatory approach. TGIC's failure to comply with the provisions of the Corrective Order or any other violation of the Illinois Insurance Code may result in the imposition of fines or penalties or subject TGIC to further legal proceedings, including the institution by the Department of receivership proceedings for the conservation, rehabilitation or liquidation of TGIC. In addition, the Department retains the inherent authority to institute those proceedings against TGIC for any reason and TGIC has previously agreed not to contest the taking of any such actions. Any such actions would likely lead the Company to institute a proceeding seeking relief from creditors under U.S. bankruptcy laws, or otherwise consider dissolution of the Company. The Company cannot predict whether the Department will approve the Order amendments that TGIC has requested or what action the Department may take as a result of the public hearing or otherwise. About Triad Guaranty Winston-Salem, N.C-based Triad Guaranty Inc. (OTC BB: TGIC) -- http://www.triadguaranty.com/-- is a holding company that historically provided private mortgage insurance coverage in the United States through its wholly-owned subsidiary, Triad Guaranty Insurance Corporation. TGIC is a nationwide mortgage insurer pursuing a run-off of its existing in-force book of business. The Company reported a net loss of $107.77 million in 2011, compared with net income of $132.09 million in 2010. The Company's balance sheet at June 30, 2012, showed $848.02 million in total assets, $1.61 billion in total liabilities and a $771.39 million deficit in assets. Going Concern The Company has prepared its financial statements on a going concern basis under GAAP, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. However, there is substantial doubt as to the Company's ability to continue as a going concern. This uncertainty is based on, among other things, the possible failure of Triad to comply with the provisions of the Corrective Orders and the Company's ability to generate enough income over the term of the remaining run-off to overcome its $771.4 million deficit in assets at June 30, 2012. Bankruptcy Warning The positive impact on statutory surplus resulting from the second Corrective Order has resulted in Triad reporting a policyholders' surplus in its SAP financial statements of $230.3 million at June 30, 2012, as opposed to a deficiency in policyholders' surplus of $801.5 million on the same date had the second Corrective Order not been implemented. While the implementation of the second Corrective Order has deferred the institution of an involuntary receivership proceeding, no assurance can be given that the Department will not seek receivership of Triad in the future and there continues to be substantial doubt about the Company's ability to continue as a going concern. The Department may seek receivership of Triad based on its determination that Triad will ultimately become insolvent, if Triad fails to comply with provisions of the Corrective Orders, or for other reasons. If the Department seeks receivership of Triad, TGI could be compelled to institute a proceeding seeking relief from creditors under U.S. bankruptcy laws, or otherwise consider dissolution of the Company. The consolidated financial statements that are presented in this report do not include any accounting adjustments that reflect the financial risks of Triad entering receivership proceedings or otherwise not continuing as a going concern. UNIGENE LABORATORIES: G. Mayes Named Pres. and General Counsel -------------------------------------------------------------- The Board of Directors of Unigene Laboratories, Inc., appointed Mr. Gregory T. Mayes, previously employed by the Company as its Vice President, Corporate Affairs and General Counsel pursuant to an Employment Agreement dated Sept. 12, 2010, to the offices of President and General Counsel. Additionally, Mr. Mayes has been appointed as a director of the Company to fill a vacancy on the Board, as of Sept. 5, 2012. The Company and Mr. Mayes entered into a First Amendment to Employment Agreement, dated as of the Effective Date, with respect to his appointment. Pursuant to the Amendment, as President and General Counsel, Mr. Mayes will have responsibility for all aspects of the Unigene Biotechnologies Business Unit, all legal oversight and administration of the Company's day to day business operations as well as those duties and responsibilities as may be assigned to him from time to time by the Chief Executive Officer of the Company or the Board. Also pursuant to the Amendment, on the Effective Date Mr. Mayes was granted options to purchase 600,000 shares of the Company's common stock, exercisable at the closing price per share on the Effective Date. One-third of those shares will vest and become exercisable on the six-month anniversary of the Effective Date, one-third will vest and become exercisable on the twelve-month anniversary of the Effective Date and one-third will vest and become exercisable on the eighteen-month anniversary of the Effective Date, provided that Mr. Mayes remains continuously employed by the Company from the Effective Date through those dates. Effective as of Sept. 5, 2012, the Company amended its By-laws to delete all references to the office of "President" and replace those references with "Chief Executive Officer", the office currently held by Mr. Ashleigh Palmer. 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 AMERICAN: Had $1.6 Million Net Loss in Second Quarter ------------------------------------------------------------ United American Petroleum Corp. filed its quarterly report on Form 10-Q, reporting a net loss of $1.6 million on $189,403 of total revenue for the three months ended June 30, 2012, compared with net income of $182,701 on $42,398 of total revenue for the same period last year. For the three months ended June 30, 2012, the Company accrued interest expense in the amount of $2.2 million related to outstanding note payables and a gain on embedded derivatives of $835,467. This compares to accrued interest expense in the amount of $73,778 and a gain on embedded derivatives of $503,366 for the three months ended June 30, 2011. The significant increase in our net loss between the comparable periods was directly related to the increase in interest expense for the three months ended June 30, 2012. For the six months ended June 30, 2012, the Company had a net loss of $5.7 million on $280,290 of total revenue, compared with a net loss of $2.1 million on $77,286 of total revenue for the corresponding period in 2011. The Company's balance sheet at June 30, 2012, showed $2.1 million in total assets, $725,680 in total liabilities, and stockholders' equity of $1.4 million. The Company has incurred a net loss and negative operating cash flows since inception through June 30, 2012. "These factors raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-Q is available at http://is.gd/lLISRb Austin, Tex.-based United American Petroleum Corp. is an exploration company engaged in the acquisition, exploration, development and production of oil and gas properties. Its principal business is the acquisition of leasehold interests in petroleum and natural gas rights, either directly or indirectly, and the exploitation and development of properties subject to these leases. Its primary focus is to develop its properties that have potential for near-term production. The Company also provides operational expertise for several third-party well owners out of its operation base in Austin, Texas. It currently has proved reserves in the State of Texas. * * * MaloneBailey, LLP, in Houston, Tex., expressed substantial doubt about United American Petroleum'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 has suffered losses from operations and has a working capital deficit. USG CORP: Fitch Affirms 'B-' Issuer Default Rating -------------------------------------------------- Fitch Ratings has affirmed USG Corporation's (NYSE: USG) ratings, including the company's Issuer Default Rating (IDR) at 'B-'. The Rating Outlook has been revised to Stable from Negative. The ratings for USG reflect the company's leading market position in all of its businesses, strong brand recognition, its large manufacturing network and sizeable gypsum reserves. Risks include the cyclicality of the company's end-markets, excess capacity currently in place in the U.S. wallboard industry, volatility of wallboard pricing and shipments and the company's high leverage. The revision of the Outlook to Stable reflects Fitch's expectation of improving profitability this year and in 2013, driven by a modest growth in demand and improvement in wallboard prices. Overall U.S. construction spending was strong during the first seven months of the year, advancing 9.3% compared with the same period last year. Spending was particularly robust for private commercial and residential construction, which grew 21% and 10.3%, respectively. USG's wallboard shipments have grown nearly 17% during the first half of 2012 compared with the same period last year. More importantly, significant pricing increases implemented by the company and the industry in early 2012 have so far held up. The Stable Outlook also reflects USG's strong liquidity position. As of June 30, 2012, the company had $745 million of liquidity comprised of $405 million of cash, $74 million of short-term marketable securities, $54 million of long-term marketable securities and $212 million of availability under its revolving credit facilities. While Fitch expects the company will continue to be free cash flow (FCF) negative, Fitch anticipates USG's liquidity position will remain healthy during the next 12-18 months. Fitch currently projects USG's overall liquidity will be between $650 million and $700 million by year-end 2012 and approximately $550 million to $600 million at the end of 2013. USG has no major debt maturities until 2016, when $500 million of senior notes become due. USG markets its products primarily to the construction industry, with approximately 21% of the company's 2011 net sales directed toward new residential construction, 23% derived from new non- residential construction, 53% from the repair and remodel segment (commercial and residential) and 3% from other industrial products. 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. Fitch projects home improvement spending will increase 4.5% in 2012 and grow 4% in 2013. Growth patterns in the intermediate term are likely to be below what the industry experienced during the previous housing boom and the early part of the past decade due to the slower growth in the U.S. economy and only moderately better housing market conditions. The fundamentals of the U.S. commercial real estate (CRE) market turned positive during second-half 2011, and the improvement has continued in 2012. The increase in demand, coupled with the low levels of new commercial construction in recent years, has fueled strong new commercial construction activity so far this year. Growth in new commercial construction activity will likely moderate during the second half of 2012 due to the slower growth in the U.S. economy, lingering problems of key European economies, and continued challenges in the CRE capital markets. Fitch currently projects private nonresidential construction will expand 13.1% in 2012 and 5% in 2013. While Fitch is currently projecting some improvement in the construction sector during 2012 and 2013, this level of activity is unlikely to result in much of an improvement in wallboard demand and industry capacity utilization rates. Fitch projects industry wallboard shipments will increase in the low- to mid- single-digit percentage range during 2012. Last year, major manufacturers announced that they were eliminating the practice of job quotes in 2012. In the past, job quotes provided pricing protection for customers, particularly for large projects. However, this practice also limited the effectiveness of price increases implemented by manufacturers. Most manufacturers announced that they are implementing a 30%-35% increase in wallboard prices effective in 2012. The manufacturers' pricing increases appear to be holding up. During the first quarter of 2012, USG reported a 19.5% year-over- year increase in average wallboard price. The strong growth in pricing continued during the second quarter, as USG reported an 18.4% year-over-year increase. Additionally, its average wallboard price grew $1.66 per thousand square feet, or 1.3%, sequentially from the first quarter of 2012 to the second quarter of 2012. USG's average wallboard price has gained roughly $27.68 per thousand square feet, or 26.5%, from the trough reported during the first quarter of 2008. While the company's operating results and credit metrics remain weak, USG has reported meaningfully higher EBITDA for the latest 12 month (LTM) period ending June 30, 2012 compared with the low levels achieved during the past four years. Fitch-calculated EBITDA for the LTM period ending June 30, 2012 was $184 million compared with $65 million during 2011 and $51 million during 2010. Debt to EBITDA improved to 12.6x during the June 30, 2012 LTM period from 35.4x during 2011. Interest coverage is currently at 0.9x compared with 0.3x during 2011. Fitch expects the company's leverage will decline below 9x and its interest coverage will be above 1x during fiscal 2012. Fitch anticipates these credit metrics will improve further in 2013. Future ratings and Outlooks will be influenced by broad economic and construction market trends, as well as company specific activity, particularly free cash flow trends and liquidity. USG's ratings are currently constrained in the near term due to the company's heavy debt load and high leverage. However, a positive rating action may be considered if the company improves its revenue and profitability levels, leading to consistent debt to EBITDA levels at or below 7x and interest coverage above 1.5x while maintaining at least $500 million of liquidity. On the other hand, a negative rating action may be considered if the projected improvement in the construction market does not materialize, leading to lower profitability and total liquidity falling below $300 million. Fitch has affirmed the following ratings for USG: -- IDR at 'B-'; -- Secured bank credit facility at 'BB-/RR1'; -- Senior unsecured guaranteed notes at 'B+/RR2'. In addition, Fitch has revised the following ratings for USG: -- Senior unsecured notes to 'B-/RR4' from 'CCC/RR5'; -- Convertible senior unsecured notes to 'B-/RR4' from 'CCC/RR5'. These revisions reflect a change in Fitch's estimation of USG's distressed enterprise value. Fitch believes that in the case of USG, it is likely that the company will reorganize in a default scenario as it did in 1993 and 2001 when the company filed for bankruptcy protection. Under this methodology, Fitch used a discounted mid-cycle EBITDA estimate and applied a multiple to determine the distressed enterprise value. Fitch had previously used the 'Liquidation Value Approach' in estimating the value that would be available to creditors and others in a default scenario. This approach involved discounting the book value of balance sheet assets of the company. Fitch's Recovery Rating (RR) of 'RR1' on USG's $400 million secured revolving credit facility indicates outstanding recovery prospects for holders of this debt issue. Fitch's 'RR2' on USG's unsecured guaranteed notes indicates superior recovery prospects. (Currently, $659 million of unsecured notes are guaranteed on a senior unsecured basis by certain of USG's domestic subsidiaries.) Fitch's 'RR4' on USG's senior unsecured notes that are not guaranteed by the company's subsidiaries indicates average recovery prospects for holders of these debt issues. VALEANT PHARMACEUTICALS: S&P Retains 'BB' CCR; Outlook Stable ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB-' issue-level rating and '1' recovery rating to Montreal-based pharmaceutical company Valeant Pharmaceuticals International Inc.'s proposed $1 billion term loan B due 2019. "The '1' recovery rating reflects our expectation of very high (90%-100%) recovery in the event of payment default," S&P said. "At the same time, we assigned our 'BB-' issue-level rating and '5' recovery rating to wholly owned subsidiary Valeant Pharmaceuticals International's proposed $2.25 billion of senior unsecured notes due 2020-2022. The '5' recovery rating reflects our expectation of modest (10%-30%) recovery in the event of payment default," S&P said. "All other ratings, including the 'BB' corporate credit rating, remain unchanged. The company will use proceeds from the term loan and unsecured note issuances to fund the $2.6 billion acquisition of Medicis Pharmaceutical Corp. (unrated). The remaining proceeds will be used to fund smaller tuck-in acquisitions and product rights purchases," S&P said. "The rating reflects our belief that Valeant remains committed to a 'significant' financial risk profile. The rating affirmation on Sept. 5, 2012 was based on a modest increase in adjusted pro forma leverage, which we calculate at approximately 4.5x. We believe the company will use its strong cash flows to reduce leverage to less than 4x within one year, in line with their stated financial policy of keeping leverage at 4x or less (per the credit agreement calculation). At this time, we view the acquisition as neutral to our view that Valeant has a 'fair' business risk profile. Our consideration of Valeant's business risk profile as fair reflects the benefits of a broader product portfolio, geographic diversification, and expanded pipeline it has achieved through multiple acquisitions over the past two years. While the acquisition of Medicis makes Valeant the largest U.S. dermatology company (pro forma on the basis of reported gross sales), it is also the second-largest acquisition in Valeant's history. We believe the benefits of the acquisition are offset by the potential for integration issues with Medicis and the potential challenges of managing a very large portfolio of small products given the high acquisition activity. In our opinion, the high level of acquisition activity increases the possibility that integration issues could jeopardize our base-case scenario," S&P said. RATINGS LIST Valeant Pharmaceuticals International Inc. Corporate Credit Rating BB/Stable/-- New Ratings Valeant Pharmaceuticals International Inc. $1 bil term loan B due 2019 BBB- Recovery Rating 1 Valeant Pharmaceuticals International Senior Unsecured $2.25 bil nts due 2020-2022 BB- Recovery Rating 5 VALENCE TECHNOLOGY: Gets OK to Use Cash Collateral Until Dec. 31 ---------------------------------------------------------------- The Hon. Craig A. Gargotta of the U.S. Bankruptcy Court for the Western District of Texas signed an agreed order between Valence Technology Inc., and Berg & Berg Enterprises, LLC, relating to the Debtor's use of cash collateral. On July 12, 2012, the Court entered a final order authorizing the Debtor's use of cash collateral. Pursuant to an agreed order extending the use of the cash collateral, the lender consents to the Debtor's use of cash collateral to continue its ordinary course of business operations and maintain the value of its bankruptcy estate until Dec. 31, 2012, unless extended under the terms of the final order. As adequate protection from any diminution in value of the lender's collateral, the Debtor will grant the lender adequate protection liens on all of the Debtor's assets, a superpriority administrative expense claim status, subject to carve out on certain expenses. As reported by the Troubled Company Reporter on July 16, 2012, Valence said it needs additional financing to maintain operations. Valence wants to use cash collateral while a loan is being negotiated. Robert Kanode, president and CEO, said in a court filing, "To meet its current liquidity requirements, Valence needed additional financing, either in the firm of debt or equity, to fund its operating and capital needs. Due to its historical operating results and its high level of existing debt, as well as other factors, Valence has so far been unable to secure the financing it needs." From $16 million in 2010, revenue climbed to $46 million in fiscal 2011. Revenue in fiscal 2012 was slightly down to $44 million. Although it has expanded its customer base and increased its revenue, it has experienced operating losses in the current and prior fiscal years. There's also a third party loan in the amount of $3 million in principal and interest maturing on July 31, 2012. Valence said its cash and cash equivalents were insufficient to fund its operating and capital needs, and thus was forced to seek bankruptcy protection. The Debtor owes $35 million in loans to affiliates of chairman Carl Berg, about $34 million in interest on those loans, and $3 million on a third-party loan. The company also owes about $9 million on two series of convertible preferred stock held by Berg affiliates and has $11 million in trade debt and accrued expenses. About Valence Technology Valence Technology, Inc., filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 12-11580) on July 12, 2012, in its home-town in Austin. Founded in 1989, Valence develops lithium iron magnesium phosphate rechargeable batteries. Its products are used in hybrid and electric vehicles, as well as hybrid boats and Segway personal transporters. The Debtor disclosed debt of $82.6 million and assets of $31.5 million as of March 31, 2012. Chairman Carl E. Berg and related entities own 44.4% of the shares. ClearBridge Advisors, LLC owns 5.5%. Valence expects to complete its restructuring during 2012. Judge Craig A. Gargotta presides over the case. The Company is being advised by Streusand, Landon & Ozburn, LLP with respect to bankruptcy matters. The petition was signed by Robert Kanode, CEO. VIVARO CORP: Files for Chapter 11 Bankruptcy Protection ------------------------------------------------------- Vivaro Corp., which specializes in the sale of international calling cards in the U.S., filed a Chapter 11 petition (Banrk. S.D.N.Y. Case No. 12-13810) on Sept. 5, 2012. The Debtor is represented by Frederick E. Schmidt, Esq., at Hanh V. Huynh, Esq., at Herrick, Feinstein LLP. See http://bankrupt.com/misc/nysb12-13810.pdf Vivaro filed for Chapter 11 bankruptcy protection with six other related companies, including Kare Distribution Inc. Stephanie Gleason at Dow Jones Daily Bankruptcy Review reports that Vivaro said on its Website the business is "profitable and cash-flow positive." It didn't provide a reason for entering Chapter 11. The report relates Vivaro in February announced "aggressive expansion plans" that included new products for customers in 10 states. "We are enhancing our offering and our presence; we are committed to maintaining the number one position as the provider of preference for long distance solutions. Through our distributor partnerships and our direct distribution network, we are confident that we will meet our objectives," the report quotes Vivaro President Gustavo M. de la Garza Ortega as stating. The report adds the expansion was part of an 18-month plan to "double Vivaro's presence and volume" in the U.S. Vivaro Corp. provides voice communications services between Mexico and the U.S. The Company sells prepaid calling cards to Hispanic customers in the U.S., under the Digame, Mi Carnal, El Chavo and Eroika brands. VOICE ASSIST: William Osmundsen Named New CFO and Treasurer ----------------------------------------------------------- The Board of Directors of Voice Assist, Inc., appointed William Osmundsen to serve as the Company's Chief Financial Officer and Treasurer. Mr. Osmundsen is a business financial professional with over 30 years of experience with both public and private companies. From July to September 2012, Mr. Osmundsen has served as Controller for the Company. For the past 10 years, Mr. Osmundsen has maintained a consulting business which provides financial management services to private and public companies in various industries. Mr. Osmundsen is a Certified Public Accountant (Inactive) in the State of California. The Company has entered into an Employment Agreement with Mr. Osmundsen, effective as of Sept. 1, 2012. Mr. Osmundsen will receive a monthly base salary of $6,000. He is eligible for an increase of $2,000 in his Base Salary when the Company's cash flow permits such an increase. The Agreement also provides to Mr. Osmundsen an option to purchase 300,000 shares of the Company's common stock at an exercise price of $1.00 per share. If, during the term of the Agreement, Mr. Osmundsen is terminated by the Company, Mr. Osmundsen will be entitled to an amount equal to his Base Salary up to the date of the termination. Donna Moore resigned from her position as CFO, Treasurer and Secretary of Voice Assist, effective on Aug. 31, 2012. Ms. Moore's resignation was not related to any disagreement or dispute with the Company's management or the members of the Board of Directors of the Company. On Sept. 6, 2012, Mr. Donald Sutherland resigned from his position as a director of the Company, effective immediately. Mr. Sutherland's resignation was not related to any disagreement or dispute with the Company's management or the members of the Board. On Sept. 1, 2012, the Board appointed Michael Metcalf, the Company's Chief Executive Officer, as Secretary of the Company. About Voice Assist Lake Forest, Calif.-based Voice Assist, Inc., operates a cloud- based speech recognition platform that supports speech recognition based enterprise services such as Customer Relationship Management (CRM), field force automation, as well as direct-to-enterprise services such as virtual assistants that unify communications and direct-to-consumer "safe driving" services that allow SMS, email, and social media messaging through a single personal phone number. In the auditors' report accompanying the annual report for the year ended Dec. 31, 2011, Mantyla McReynolds LLC, in Salt Lake City, Utah, expressed substantial doubt about Voice Assist's ability to continue as a going concern. The independent auditors noted that the Company has working capital deficits and has incurred losses from operations and negative operating cash flows during the years ended Dec. 31, 2011, and 2010. The Company reported a net loss of $10.24 million on $872,010 of revenues for 2011, compared with a net loss of $1.30 million on $1.26 million of revenues for 2010. The Company's balance sheet at June 30, 2012, showed $1.31 million in total assets, $860,454 in total liabilities and $449,812 in total stockholders' equity. WALLDESIGN INC: Wants Until Oct. 30 to Propose Chapter 11 Plan -------------------------------------------------------------- Walldesign Inc., asks the U.S. Bankruptcy Court for the Central District of California to extend its exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Oct. 30, 2012, and Dec. 31, respectively. This is the Debtor's second request for exclusivity extension. The Debtor explains that it needs additional time to wind down its affairs and address the remaining matters/issues in the cases. In this regard, the debtor has been evaluating potential claims it may have against the Debtor's insider, Michael R. Bello, and others. About Walldesign Walldesign Inc., incorporated in 1983, has been in the business of installing drywall, insulation, plaster and providing related services to single and multi-family construction projects throughout California, Nevada and Arizona for over 20 years. Customers include some of the largest homebuilders in the United States, such as Pulte, DR Horton, K. Hovnanian, Toll Brothers and KB Homes. In fiscal 2011, Walldesign generated more than $43.5 million in annual revenues. Walldesign, based in Newport Beach, California, said the global credit crisis that occurred in the third quarter of 2008 had a severe negative impact on its business: capital for construction projects dried up, buyers vacated the market for new homes and profit margins on new jobs eroded. Although it has significantly downsized its operations in an effort to remain profitable in the recessionary conditions, cash flow problems arose during this process. These problems slowed payments to vendors, precipitating collection lawsuits forcing it to seek Chapter 11 protection (Bankr. C.D. Calif. Case No. 12-10105) on Jan. 4, 2012. Judge Robert N. Kwan presides over the case. Marc J. Winthrop, Esq., Sean A. O'Keefe, Esq., and Jeannie Kim, Esq., at Winthrop Couchot, serve as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Michael Bello, chief executive officer. An official committee of unsecured creditors has been appointed in the case. The Committee tapped Jones Day as its counsel. WATERLOO RESTAURANT: Romano's Macaroni Acquires Four Franchisees ---------------------------------------------------------------- Romano's Macaroni Grill disclosed that it entered into a definitive agreement to purchase four Romano's Macaroni Grill locations from franchisee, Waterloo Restaurant Ventures, Inc. Three of the restaurants are located in the Bay Area of San Francisco, while the fourth is in the Seattle area. With the completion of this acquisition, Romano's Macaroni Grill parent company will own and operate 186 Romano's Macaroni Grill restaurants in the United States. "With the acquisition of these four restaurants, we gain a strong company-owned footprint in the Bay Area and the Pacific Northwest," said Norman Abdallah, Chief Executive Officer and President of Romano's Macaroni Grill. "It's a great opportunity for us to establish our brand presence in these dynamic markets." Waterloo Restaurant Ventures, Inc. filed for relief under Chapter 11 of the United States Bankruptcy Code. The acquisition by Romano's Macaroni Grill parent company originated in public auction. Closing is anticipated to occur at the end of September 2012. The Waterloo employees will be offered positions within the Romano's Macaroni Grill organization. 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. WBG-PSS MERGER: Moody's Assigns 'B2' CFR/PDR; Outlook Stable ------------------------------------------------------------ Moody's Investors Service assigned B2 Corporate Family and Probability of Default Ratings to WBG-PSS Merger Sub Inc. the company acquiring the Payless ShoeSource retail business of Collective Brands Inc. (B1/Review for Downgrade) and assigned a B1 rating to WBG-PSS' proposed $275 Million senior secured term loan. The rating outlook is stable. The assigned ratings are subject to the completion of the transaction and Moody's review of final documentation. On May 1, 2012, Collective announced it had agreed to be acquired by a consortium comprised of Wolverine World Wide (Ba3/stable), Blum Capital Partners and Golden Gate Capital in a transaction valued at approximately $2.0 billion. At closing, Wolverine will acquire Collective's Performance + Lifestyle Group and WBG-PSS will acquire the global Payless ShoeSource business. Proceeds from the proposed term loan and equity from Blum Capital and Golden Gate will be used to fund their portion of the acquisition price. Upon consummation of the transaction, WBG-PSS will be merged with and into Collective Brands, Inc with Collective as the surviving entity and the borrower. At that time, Moody's expects that it will resolve the review for downgrade of Collective Brands Inc.'s existing ratings and then withdraw those ratings once the acquisition is concluded. Ratings assigned: WBG-PSS Merger Sub Inc: - Corporate family rating at B2 - Probability of default rating at B2 - $275 million dollar senior secured term loan due 2019 at B1 (LGD 3, 41%) The ratings outlook is stable. Ratings Rationale WBG-PSS's B2 Corporate Family Rating takes into consideration Payless' recent trends of positive same store sales and improved operating margins at its domestic business, which reflects the benefit of the company's decision to return to its value-oriented focus to drive sales with its core customer. This initiative has significantly driven down markdowns compared to last year when it took high markdowns on higher priced product that did not resonate with its customer. The B2 CFR reflects the company's high financial leverage following the acquisition with debt/EBITDA (incorporating Moody's standard analytical adjustments) in excess of 6 times, the still low operating margins of its domestic Payless ShoeSource business and a strained economic situation for its core customer base. The rating is supported by the company's good overall liquidity profile, as Moody's expects the company will remain cash flow positive and will have access to a $250 million (unrated) asset based revolver. The ratings take into consideration Payless still strong brand equity notwithstanding recent operating challenges, its scale in the footwear retail segment, and a meaningful and growing international presence. The stable outlook reflects Moody's expectation the company will be able to continue its recent positive operating trends over the course of 2012 following strained results in 2011 and that the company will maintain a good liquidity profile. There is no scope for any acquisitions or shareholder friendly activities in the current rating. The B1 rating assigned to the company's term loan facility reflects the lift it receives from the sizeable amount of operating leases and trade payables in the capital structure as well as its first lien position on substantially all assets of the company, other than accounts receivable and inventory which are pledged on a first lien basis to the company's asset based credit facility. Ratings could be upgraded if WBG-PSS can sustain positive results from their domestic business while experiencing continued positive growth in their international markets. Quantitatively ratings could be upgraded if EBITA/interest expense is sustained above 1.75 times, and debt / EBITDA is sustained below 5.25 times. Ratings could be downgraded if the company's good liquidity profile were to erode, if recent positive trends in sales and margins were to reverse, or financial policies become more aggressive. Quantitatively, ratings could be lowered if debt/EBITDA is sustained above 6.25 times or if EBITA/interest expense fell below 1.25 times. Headquartered in Topeka, KS, Collective Brands operated more than 4,000 stores as of 7/28/2012 throughout the US, Canada and Central and South America under the "Payless ShoeSource" brand. Proforma revenues are approximately $2.4 billion. The principal methodology used in rating WBG-PSS Merger Sub Inc .was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. WESTERLY HOSPITAL: S&P Lowers Rating on $8.6-Mil. Bonds to 'D' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating to 'D' from 'C' on Rhode Island Health & Educational Building Corp.'s $8.6 million series 1994 bonds issued for Westerly Hospital. The outlook is not meaningful. "We lowered the rating due to notification that Westerly Hospital made only a partial payment on its semiannual debt service payment due July 1, 2012," said Standard & Poor's credit analyst Jennifer Soule. "The hospital made a $235,800 interest payment but it did not make the $795,000 sinking fund payment also due at that time," said Ms. Soule. "A notice to beneficial holders was released on Sept. 4, 2012, indicating that the Superior Court for Washington County, R.I. approved a proposal by Lawrence & Memorial Corp. to acquire Westerly Hospital and substantially all its assets. If the parties consummate the sale as currently planned, the transaction would provide for the full redemption price of 100% of the principal amount of the bonds outstanding plus interest accrued through that time. Once this payment is made and the bonds have been fully redeemed, Standard & Poor's will withdraw its rating on the bonds. A special master overseeing the financial affairs of Westerly Hospital announced a target closing date of Jan. 31, 2013, for the completion of the sale and the full redemption of the bonds," S&P said. WOOTON GROUP: Proposes to Employ Jonathan Hayes as Counsel ---------------------------------------------------------- Wooton Group LLC filed an amended application with the U.S. Bankruptcy Court for authority to employ the law firm of M. Jonathan Hayes as its general bankruptcy counsel. The Debtor desires to employ Hayes as its general bankruptcy counsel in accordance with the terms of the legal services Retainer Agreement. The firm, among other things, will: a. prepare the schedules and the additional forms required to begin the bankruptcy case; b. advice and assistance regarding compliance with the requirements of the United States Trustee; and c. advice regarding matters of bankruptcy law, including the rights and remedies of the Debtor in regard to its assets and with respect to the claims of creditors. Mr. Hayes attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Mr. Hayes will render services to the Debtor at his regular hourly rates, which may be subject to adjustment from time to time. Mr. Hayes will bill his time in this case at $385 per hour, associate Roksana Moradi at $265 per hour, associate Carolyn Afari at $165 per hour. About Wooton Group Beverly Hills, California-based Wooton Group LLC owns properties in Stockton and Fresno, California. Wooton Group filed a bare- bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-31323) in Los Angeles on June 19, 2012. The Debtor estimated assets of up to $50 million and liabilities of up to $10 million. The Law Office of M Jonathan Hayes, in Northridge, serves as counsel. WOOTON GROUP: Seeks Access to Cash Collateral Until Dec. 31 ----------------------------------------------------------- Wooton Group LLC asks the U.S. Bankruptcy Court for authority to use cash collateral of Investors Warranty of America, Inc., and Citizens National Bank through Dec. 31, 2012. The Debtors say the secured creditors are adequately protected and the use of cash collateral as proposed by the Debtor will preserve the Debtor's assets for the benefit of this estate and the creditors specifically including the secured creditors. Before the bankruptcy filing, Investors filed a lawsuit and was successful in getting a receiver appointed who is now in possession of the Debtor's two industrial buildings. The Debtor had advised Investors that it would not seek removal of the receiver but has now decided to seek removal since the proposed fees for the receiver to collect rent from one tenant is not warranted by a long shot. The Debtor has no employees and its only assets are $56,000 in the bank and the two real properties. The Debtor says that talks with Investors on a stipulation for access to cash collateral are ongoing. The receiver has advised the Debtor that he is owed $10,672 for his efforts and $1,600 for his attorney. The Debtor asserts that those amounts are unreasonable. To the extent the Debtor and the receiver mutually agree to an amount, the Debtor seeks permission to pay that amount. The Debtor says that the secured creditors are adequately protected. The Debtor intends to use cash collateral to pay property taxes, insurance and other limited expenses. The Debtor will make a monthly payment to Investors of $7,000 per month on the Angus property in Fresno, and $17,000 per month on the Navone property in Stockton. About Wooton Group Beverly Hills, California-based Wooton Group LLC owns properties in Stockton and Fresno, California. Wooton Group filed a bare- bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-31323) in Los Angeles on June 19, 2012. The Debtor estimated assets of up to $50 million and liabilities of up to $10 million. The Law Office of M. Jonathan Hayes, in Northridge, serves as counsel. * Moody's Says US Commercial P&C Insurance Outlook Remains Stable ----------------------------------------------------------------- The outlook for the US commercial P&C insurance industry remains stable, reflecting Moody's view that the benefit of sustained pricing improvement and the likelihood of further reserve releases across most lines in the next 12-18 months continue to counterbalance declining investment yields and macroeconomic weakness, Moody's Investors Service says in its new report, "US Commercial P&C Insurance -- Outlook Remains Stable." The rating agency has also recently published supporting commercial lines commentary, cited at the end of this announcement. "Pricing trends for US commercial insurers remain broadly positive and reserves remain slightly redundant across most lines," says Senior Vice President and co-author of the report, Alan Murray. "Nevertheless, accident year combined ratios remain in excess of 100% which, combined with declining investment yields, suggest the need for continued pricing improvement." Based on 2012 survey data from rated issuers, Moody's expects P&C insurance rates to continue to rise in 2012 for major commercial lines, including workers' compensation, commercial general liability, professional liability, commercial auto and commercial multiple peril. Together these lines represented 27% of net premiums written for the industry last year. Moody's expects the combined ratio to decline from 110% in accident year 2011 to about 107.5% this accident year, and to drop to 104% in 2013 if current trends hold, says Associate Analyst and co-author Jasper Cooper. Commercial insurers' reserves remain slightly redundant across most standard property, liability and specialty lines. However, recent accident years now appear barely adequate or modestly deficient, particularly in workers' compensation, indicating both the likelihood of reduced earnings windfalls from reserve releases beyond the coming 1-2 years, as well as the importance of sustained pricing improvement. Although underwriting results are poised to improve, commercial insurers continue to face headwinds and pricing will need to continue improving if they are to reduce accident year loss ratios to acceptable return levels. Additionally, sustained low interest rates and economic weakness continue to pressure investment returns and demand for commercial insurance. * Chadbourne Signs 20-Year Lease for New NY Headquarters -------------------------------------------------------- The international law firm of Chadbourne & Parke disclosed that it has signed a lease for a new headquarters office in New York City in a prime Midtown location. The deal is the largest lease transaction by a law firm in Manhattan in 2012 and one of the largest leases in the Manhattan market this year. The firm will begin moving operations to its new location at 1301 Sixth Avenue immediately and will complete its move once the demolition, redesign and build-out of its new offices are finished. The 20-year lease for more than 200,000 square feet includes two five-year options for renewal and expansion options on additional floors to allow for continued growth. Chadbourne is best known for major practices in renewable energy/project finance, corporate/M&A, tax, litigation and bankruptcy, among other practice areas, and for its focus on emerging markets. "We intend to design and build an office for the future, leveraging some of the key drivers for our clients and our lawyers efficiency, flexibility and technology. We will create a state- of-the-art workspace for our clients, our lawyers and our staff," said Chadbourne Managing Partner Andrew Giaccia. The firm's new space will be designed by Mr. Gensler, one of the world's leading architectural and design firms. Mr. Gensler has created innovative workplaces for 62 of the Global 100 companies and many of the most prominent U.S. and international law firms. "We're delighted to have closed this complex transaction. The deal allows us to take substantial space under attractive terms in the former headquarters of Dewey & LeBoeuf. 1301 Sixth Avenue is a premier office building in a prime location," said Mr. Giaccia. Chadbourne has led its national and international practice from its principal office in New York City since 1902, and the New York office is the largest of its 12 offices around the world. Consistent with its emerging markets strategy, the firm has opened offices in Sao Paulo and Istanbul in the past two years. The Chadbourne team that conducted the search for a new headquarters location and negotiated the lease was led by partner Richard Sonkin, head of the firm's Real Estate Committee. Chadbourne was represented by Newmark Grubb Knight Frank. About Chadbourne & Parke LLP Chadbourne & Parke LLP, http://www.chadbourne.com-- an international law firm headquartered in New York City, provides a full range of legal services, including mergers and acquisitions, securities, project finance, private funds, corporate finance, energy, communications and technology, commercial and products liability litigation, securities litigation and regulatory enforcement, special investigations and litigation, intellectual property, antitrust, domestic and international tax, insurance and reinsurance, environmental, real estate, bankruptcy and financial restructuring, employment law and ERISA, trusts and estates and government contract matters. Major geographical areas of concentration include Central and Eastern Europe, Russia and the CIS, the Middle East and Latin America. The Firm has offices in New York, Washington, DC, Los Angeles, Houston, Mexico City, London (a multinational partnership), Moscow, St. Petersburg, Warsaw, Kyiv, Almaty, Dubai and Beijing. On the Net: * Lisa M. Goldberg Joins Foley & Mansfield ------------------------------------------ Foley & Mansfield disclosed that attorney Lisa M. Goldberg has joined the firm's Miami office. Atty. Goldberg will serve clients in the areas of product liability, toxic and mass tort litigation and medical malpractice. Atty. Goldberg is licensed to practice in Florida, the U.S. District Courts of the Southern, Middle, and Northern Districts of Florida, and the U.S. Bankruptcy Court for the Southern District of Florida. She is a member of the Defense Research Institute (DRI), the American Bar Association and the Broward County Bar Association. Foley & Mansfield is a national law firm with more than 130 attorneys in offices from coast to coast. Foley & Mansfield has succeeded in becoming one of the nation's leading litigation law firms, serving clients ranging in size from multi-million dollar corporations to small businesses and their owners. * Jennings Strouss Gains Six New Attorneys ------------------------------------------ Jennings, Strouss & Salmon, PLC, is pleased to disclose that six attorneys have joined the firm's Phoenix office, expanding the firm's services to include Surety, Fidelity and Family Law. Jay M. Mann, Richard S. Wisner, Scott F. Frerichs, Andy J. Chambers and Patrick F. Welch are members of the firm's new surety and fidelity law practice, and bring additional experience in the areas of construction law and commercial litigation. Atty. Norma Izzo Milner leads the firm's family law and domestic relations practice. "Jay Mann, Dick Wisner and their team are Arizona's preeminent attorneys in the area of surety and fidelity law. They fit very well in the firm's overall plan for growth," states J. Scott Rhodes, managing attorney at Jennings, Strouss & Salmon, PLC. "Norma Izzo Milner has established herself as a leading practitioner in family law and domestic relations, especially in the areas of mediated and collaborative divorces. Atty. Norma's addition to the firm illustrates our commitment to evolve our services to meet the needs of the community." Jay M. Mann is chair of the firm's Surety and Fidelity Group. He is a frequent lecturer and author in the areas of construction, surety and fidelity law. Atty. Mann is also active in numerous professional and civic organizations, including the American Bar Association, where he serves as a Vice Chair of the Fidelity and Surety Law Committee, the State Bar of Arizona, the Maricopa Bar Association, as well as numerous other organizations focused on construction, surety and fidelity law. He earned a J.D., with honors, from Loyola University of Chicago and a B.A. from the University of Illinois. "Jennings Strouss is a high caliber firm with a reputation for quality client service," says Jay M. Mann, chair of the firm's new Surety and Fidelity Law Group. "We look forward to building on the Jennings Strouss legacy with the addition of these new legal services." Richard S. Wisner is special counsel in the Surety and Fidelity Group. He is recognized as a leader in the fidelity and surety field, and is the recipient of Lifetime Achievement Awards from the American Bar Association, Fidelity and Surety Law Committee ("FSLC") and the National Bond Claim Association. Mr. Wisner is a Past Chair of FSLC and currently serves on the Board of Directors of the Surety & Fidelity Claims Institute. Mr. Wisner earned a J.D. from DePaul University and a B.A. from Loyola University. Scott F. Frerichs is a member in the Surety and Fidelity group. He focuses his practice in the areas of commercial and construction litigation, personal injury defense, professional and products liability, and appellate law. Atty. Frerichs earned both a J.D., cum laude, and B.S. from Arizona State University. Andy J. Chambers is a member in the Surety and Fidelity group. He focuses his practice on fidelity law, commercial litigation, and surety and construction law. Atty. Chambers earned a J.D., cum laude, from the Washington College of Law at American University and a B.A. from the University of California, Santa Barbara. Patrick F. Welch is an associate in the Surety and Fidelity group. He focuses his practice in the areas of commercial litigation, construction, fidelity and surety, and employment. Atty. Welch earned a J.D. from the New England School of Law and B.A. from Connecticut College. Atty. Norma Izzo Milner is a member and leads the firm's Family Law and Domestic Relations practice, which includes collaborative divorce, mediation, arbitration, parent coordination, custody and child support. Ms. Izzo Milner has been appointed as a judge pro tempore for the Family Court Division and IV-D Court of the Superior Court of Arizona in Maricopa County. She also serves on the State Bar of Arizona Committee for Family Law Rules of Practice and Procedure and on the Board of Directors for the Maricopa County Bar Association. She earned a J.D. from Arizona State University and a B.A. from Northern Arizona University. "Jennings Strouss is a firm with a long history of providing top notch service to their clients," states Izzo Milner. "I look forward to being a part of such a dynamic team of attorneys." About Jennings, Strouss & Salmon Jennings Strouss & Salmon -- http://www.jsslaw.com/-- is one of the Southwest's leading law firms, providing legal counsel for nearly 70 years through its offices in Phoenix, and Peoria, Arizona; and Washington, D.C. The firm's primary areas of practice include bankruptcy, reorganization and creditors' rights; corporate, securities and finance; energy; family law and domestic relations; health care; intellectual property; labor and employment; litigation; real estate; sports and entertainment; surety and fidelity; tax; and trust and estates. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Holders' Working Assets Equity Capital Company Ticker ' ' ' ------- ------ ------ ------- --------- ABSOLUTE SOFTWRE ABT CN 129.7 (4.8) 1.7 ADVANCED BIOMEDI ABMT US 0.2 (1.9) (1.5) AK STEEL HLDG AKS US 3,901.0 (360.6) 129.6 AMC NETWORKS-A AMCX US 2,173.4 (959.1) 542.5 AMER AXLE & MFG AXL US 2,441.2 (394.7) 169.7 AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2) AMERISTAR CASINO ASCA US 2,058.5 (28.0) 42.5 AMYLIN PHARM INC AMLN US 1,998.7 (42.4) 263.0 ARRAY BIOPHARMA ARRY US 108.1 (85.8) 17.2 ATLATSA RESOURCE ATL SJ 886.5 (270.4) 21.8 AUTOZONE INC AZO US 6,148.9 (1,416.8) (623.1) BOSTON PIZZA R-U BPF-U CN 162.9 (92.3) (0.3) CABLEVISION SY-A CVC US 6,991.7 (5,641.6) (286.1) CAPMARK FINANCIA CPMK US 20,085.1 (933.1) - CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) CHENIERE ENERGY CQP US 1,873.0 (442.2) 117.0 CHOICE HOTELS CHH US 857.7 (11.2) 402.1 CIENA CORP CIEN US 1,915.3 (60.3) 710.4 CINCINNATI BELL CBB US 2,702.7 (696.2) (52.8) CLOROX CO CLX US 4,355.0 (135.0) (685.0) DEAN FOODS CO DF US 5,553.1 (3.1) 185.6 DELTA AIR LI DAL US 44,720.0 (1,135.0) (6,236.0) DENNY'S CORP DENN US 328.9 (2.8) (20.3) DIRECTV DTV US 19,632.0 (4,045.0) 520.0 DOMINO'S PIZZA DPZ US 424.6 (1,369.1) 52.9 DUN & BRADSTREET DNB US 1,795.6 (821.9) (655.6) E2OPEN INC EOPN US 29.7 (34.5) (32.5) ELOQUA INC ELOQ US 37.5 (9.6) (14.2) FAIRPOINT COMMUN FRP US 1,877.4 (184.4) 51.6 FIESTA RESTAURAN FRGI US 286.0 2.6 (14.7) FIFTH & PACIFIC FNP US 900.5 (175.5) 130.9 FREESCALE SEMICO FSL US 3,499.0 (4,498.0) 1,374.0 GENCORP INC GY US 874.0 (171.3) 47.3 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GOLD RESERVE INC GRZ CN 78.3 (25.8) 56.9 GOLD RESERVE INC GRZ US 78.3 (25.8) 56.9 GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 HCA HOLDINGS INC HCA US 27,132.0 (6,943.0) 1,690.0 HOVNANIAN ENT-A HOV US 1,624.8 (404.2) 881.0 HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8) HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8) HYPERION THERAPE HPTX US 9.6 (41.8) (31.4) INCYTE CORP INCY US 312.0 (217.2) 154.4 INFINITY PHARMAC INFI US 113.0 (3.4) 70.2 IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2 JUST ENERGY GROU JE CN 1,583.6 (245.9) (227.2) JUST ENERGY GROU JE US 1,583.6 (245.9) (227.2) LIMITED BRANDS LTD US 6,589.0 (245.0) 1,316.0 LIN TV CORP-CL A TVL US 839.2 (51.8) 52.7 LORILLARD INC LO US 2,576.0 (1,568.0) 881.0 MARRIOTT INTL-A MAR US 6,007.0 (1,124.0) (1,287.0) MERITOR INC MTOR US 2,555.0 (933.0) 279.0 MONEYGRAM INTERN MGI US 5,185.1 (116.1) (35.3) MORGANS HOTEL GR MHGC US 545.9 (110.1) (7.0) MPG OFFICE TRUST MPG US 2,061.5 (827.9) - NATIONAL CINEMED NCMI US 794.2 (354.5) 95.8 NAVISTAR INTL NAV US 11,143.0 (358.0) 1,585.0 NB MANUFACTURING NBMF US 2.4 (0.0) (0.5) NEXSTAR BROADC-A NXST US 566.3 (170.6) 40.2 NPS PHARM INC NPSP US 186.9 (45.3) 130.3 NYMOX PHARMACEUT NYMX US 2.7 (7.7) (0.9) ODYSSEY MARINE OMEX US 22.4 (29.3) (26.9) OMEROS CORP OMER US 10.1 (20.5) (8.7) PALM INC PALM US 1,007.2 (6.2) 141.7 PDL BIOPHARMA IN PDLI US 259.8 (161.1) 144.3 PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PRIMEDIA INC PRM US 208.0 (91.7) 3.6 PROTECTION ONE PONE US 562.9 (61.8) (7.6) QUALITY DISTRIBU QLTY US 454.5 (29.8) 60.7 REGAL ENTERTAI-A RGC US 2,306.3 (542.3) 62.5 RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) REVLON INC-A REV US 1,173.9 (665.6) 177.8 RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SALLY BEAUTY HOL SBH US 1,813.5 (202.0) 449.5 SINCLAIR BROAD-A SBGI US 2,160.2 (66.3) (1.4) TAUBMAN CENTERS TCO US 3,096.1 (295.3) - TEMPUR-PEDIC INT TPX US 865.5 (12.1) 258.9 THERAPEUTICS MD TXMD US 4.9 (0.7) 1.0 THRESHOLD PHARMA THLD US 86.3 (51.4) 71.2 UNISYS CORP UIS US 2,397.9 (1,190.0) 463.1 VECTOR GROUP LTD VGR US 885.7 (119.5) 248.2 VERISIGN INC VRSN US 1,942.0 (59.2) 858.0 VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) VRINGO INC VRNG US 3.7 (1.4) 2.1 WEIGHT WATCHERS WTW US 1,193.6 (1,784.6) (259.9) ZAZA ENERGY CORP ZAZA US 255.8 (24.3) 3.7 ********* 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 ***