/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120920.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, September 20, 2012, Vol. 16, No. 262 Headlines 1555 WABASH: Plan Filing Period Extended Until Oct. 28 17315 COLLINS: Has Access to Cash Collateral Thru Sept. 30 1881 CENTRAL: Voluntary Chapter 11 Case Summary AAA STORAGE: Case Summary & 5 Largest Unsecured Creditors AHERN RENTALS: Hearing on Exclusivity Periods Scheduled for Oct. 9 ALGECO SCOTSMAN: S&P Assigns 'B+' Corporate Credit Rating ALLEN FAMILY: Court OKs Settlement Agreement with MidAtlantic Farm ALLEN FAMILY: Wants Plan Filing Period Extended to Nov. 29 AMBAC FINANCIAL: 92 Policy Claims Not Eligible for Payment AMERICAN AIRLINES: Cuts Flights Due to Pilots Shortage AMERICAN AXLE: Completes Sale of $550 Million of 6.625% Sr. Notes AMERICAN HERITAGE: S&P Cuts Ratings on 2 Bond Series to 'BB-' AMKOR TECHNOLOGY: Moody's Affirms Ba3 CFR; Rates Sr. Notes Ba3 AMKOR TECHNOLOGY: S&P Rates $300MM Unsecured Notes 'BB' AMTRUST FINANCIAL: Defeats FDIC; Creditors Could Receive $300MM APOLLO HEALTH: Porzio Faces Malpractice Suit Over Failed Ch. 7 ARGO DIGITAL: Former Execs Accused of Defrauding Investors ARGO GROUP: S&P Gives 'BB+' Prelim Rating on Subordinated Debt ASP HHI: Moody's Assigns 'B2' Corp. Family Rating ATLANTIS OF JACKSONVILLE: Wants to Dismiss Chapter 11 Case ATP OIL: Has Court OK to Pay Funds Attributable to ORRIs and NPIs BIOMET INC: Moody's Assigns 'B3' Rating to Add-On Senior Notes BIOMET INC: S&P Assigns 'B+' Rating on $500MM Subordinated Notes BLAST ENERGY: Changes Trading Symbol to "PEDO" BRICKFIELD BUILDERS: Voluntary Chapter 11 Case Summary BROADVIEW NETWORKS: Can Employ EY LLP as Independent Auditor BROADVIEW NETWORKS: Can Hire Bingham as Regulatory Counsel BROADVIEW NETWORKS: Can Employ KCC as Claims and Notice Agent BROADVIEW NETWORKS: Can Employ Evercore as Investment Banker BROADVIEW NETWORKS: Can Employ WF&G as Bankruptcy Counsel BROADVIEW NETWORKS: Schedules of Assets & Debts Due Oct. 21 CDC CORP: Proposes Harshman Phillips as Tax Accountants CHAMPION INDUSTRIES: Fifth Third Forbearance to Expire Oct. 15 CHARLIE MCGLAMRY: Hearing on Exclusivity Extension Set for Oct. 2 CIRCLE STAR: Delays Form 10-Q for July 31 Quarter for Review CITIZENS CORP: FiData Can Employ Harwell Howard as Counsel COMMERCIAL MANAGEMENT: Case Trustee Seeks to Use Rent Til January COMMUNITY HOME: Seeks to Extend Plan Filing Period to Jan. 31 COMMUNITY HOME: Secured Creditors Want Chapter 11 Trustee COMMUNITY HOME: Files Amended Schedules of Assets & Liabilities COMMUNITY HOME: Challenging Edwards, Beher Claims CONTINENTAL COIN: Ch. 11 Trustee Liable for Virtue's Legal Fees COUNTRYWIDE HOME: 5th Circ. Affirms Class Cert. in Loan Fee Suit CRYOPORT INC: Shareholders Elect Three Directors to Board DALLAS ROADSTER: Plan Promises to Pay Creditors in Full DALLAS ROADSTER: J. Bennett White to Replace DeMarco as Counsel DALLAS ROADSTER: Can Employ Robert Dohmeyer as Valuation Expert DALLAS ROADSTER: Asks Court to Lift Restrictions on Cash Use DANIEL PETERSON: Wash. Appeals Court Rules on Citibank Dispute DARLING INT'L: Moody's Upgrade CFR/PDR to 'Ba1'; Outlook Stable DELPHI CORP: Claims-Trading Ruling Overturned on Appeal DEWEY & LEBOEUF: Ex-Partners Working on Dodgers Case Assert Claims DEWEY & LEBOEUF: Citibank Denies Conspiring Against Partners DEWEY & LEBOEUF: Sept. 20 Hearing on Appointment of Ch. 11 Trustee DICKINSON, MI: Fitch Cuts Rating on $24MM Notes to 'BB+' DIGITAL DOMAIN: Can Advance Up to $7.65-Mil. Per 3rd Interim Order DOLE FOOD: Moody's Reviews 'B1' Corp. Family Rating for Upgrade DYNEGY INC: Incurs $69 Million Net Loss in Second Quarter ECAST CORPORATION: Case Summary & 20 Largest Unsecured Creditors ELMIRA DOWNTOWN: Judge to Hear US Trustee's Case Dismissal Bid ELPIDA MEMORY: Bondholders Halt U.S. Asset Sales ELZA CONSTRUCTION: Case Converted to Chapter 7 Due to Inactivity EMISPHERE TECHNOLOGIES: Appoints Alan Rubino as President & CEO FOXCO ACQUISITION: Moody's Affirms 'B2' CFR/PDR; Outlook Stable FULLER BRUSH: Cleared to Auction Assets Next Month GELT PROPERTIES: Can Access Cash Collateral Until Oct. 3 GELT PROPERTIES: Taps Nochumson P.C. to Handle Craig Atkins Suit GLOBAL AVIATION: Noteholders to Receive Stock Under Plan GROUP 1: Moody's Corrects August 21 Rating Release GROUP 1: Moody's Affirms 'Ba2' Corporate Family Rating HALIFAX REGIONAL: Fitch Lowers Rating on $15.1-Mil. Bonds to 'BB+' HARDAGE HOTEL: Has Until Oct. 2 to File Plan of Reorganization HELLER EHRMAN: Settles $1MM Fee Dispute With Gregory Canyon HORIZON LINES: Amends Q2 Form 10-Q to Correct Classification HOWREY LLP: Level I & Contract Lawyers Form Group & Hire Counsel HOWREY LLP: Former Attorneys Face Potential Clawback Suits IA GLOBAL: UK Administrators Hand Back 2.4 Million Common Shares IMAGING3: Case Summary & 20 Largest Unsecured Creditors INDIANAPOLIS DOWNS: Gets $500M Bids from Centaur Gaming for Racino INDUSTRIAL DEVELOPMENT: Fitch Rates $66-Mil. Refunding Bonds 'B+' INFUSION BRANDS: Buys $1MM CD3 Note; Sells $2MM Note to Vicis INNER CITY: Hearing on Exclusivity Periods Set for Sept. 24 INOVA TECHNOLOGY: Had $117,600 Net Loss in July 31 Quarter JMR DEVELOPMENT: Plan Filing Exclusivity Extended to Oct. 4 KINDRED HEALTHCARE: Facility Expansion No Impact on Moody's CFR LDK SOLAR: Two Directors Re-Elected to Board LDK SOLAR: Incurs $254.3 Million Net Loss in Second Quarter LEE BRICK: David S. Hodges Approved as Financial Consultant LEE BRICK: Has Until Oct. 13 to File Plan and Disclosure Statement LEE BRICK: Bankr. Administrator Unable to Form Creditors Committee LEE BRICK: Amends Schedules of Assets and Liabilities LEFKARA GROUP: Attorney Regina Phillips Withdraws as Counsel LEFKARA GROUP: Files Schedules of Assets and Liabilities LEFKARA GROUP: Parsons Takes Plan Exclusivity LEHMAN BROTHERS: Sues JPMorgan to Unravel Derivative Transactions LEHMAN BROTHERS: Wilbur Ross Says Price for Navigator Is Fair LOCAL TV: S&P Cuts Corporate Credit Rating to 'B'; Outlook Stable MEDFORD VILLAGE: Sept. 24 Hearing on Lennar's Case Dismissal Bid MF GLOBAL: Former Trader Starts New Hedge Fund NEXSTAR BROADCASTING: Extends Employment of Pres. & CEO to 2016 NIELSEN FINANCE: S&P Gives 'BB-' Rating on $750MM Senior Notes NIFTUS LLC: Can Employ Copeland & Bieger as Chapter 11 Attorneys NIFTUS LLC: Can Employ Reed Smith as Special Counsel NIFTUS LLC: U.S. Trustee Has Not Appointed a Creditors Committee NORTH & HARLEM: Case Summary & 7 Unsecured Creditors OPDE US: Unit of Spanish Solar Firms Files for Chapter 7 OROMIN EXPLORATIONS: Recurring Losses Cue Going Concern Doubt PAR PHARMACEUTICAL: S&P Keeps 'B+' CCR on Term Loan B Upsizing PARAMOUNT RESOURCES: Moody's May Cut Unsec. Notes Rating to Caa2 PATHEON INC: Moody's Affirms 'B3' CFR/PDR; Outlook Stable PEREGRINE FINANCIAL: Wasendorf Son Sues U.S. Bank PIAZZA BELLA: Case Summary & 3 Unsecured Creditors PTC ALLIANCE: Moody's Assigns 'B2' CFR/PDR; Outlook Stable QUIGLEY CO: Bankruptcy Law Protects Parent Cos., Pfizer Says RADNET MANAGEMENT: S&P Rates $437.5MM Secured Credit 'B+' RHODE ISLAND HEALTH: Moody's Corrects August 28 Rating Release ROCKWOOD SPECIALTIES: Moody's Rates $750MM Sr. Unsec. Notes 'Ba2' ROCKWOOD SPECIALITIES: S&P Affirms 'BB+' CCR; Outlook Stable ROTHSTEIN ROSENFELDT: Gibraltar Agrees to $65-Mil. Deal RYLAND GROUP: Moody's Affirms B1 CFR; Rates Sr. Unsec. Notes B1 RYLAND GROUP: S&P Rates $250MM Senior Unsecured Notes 'BB-' SCHWAB INDUSTRIES: Fla. Court Won't Hear Family Members' Lawsuit SEP RIVERPARK: Case Reassigned to Judge Niles L. Jackson SEQUENOM INC: Completes Offering of $130 Million 5% Senior Notes SKY KING: Blames Direct Air for Chapter 11 Bankruptcy Filing SOTHEBY'S: S&P Rates New $300MM Senior Unsecured Notes 'BB' STRATEGIC PARTNERS: Moody's Withdraws 'B2' CFR/PDR SUMMIT WEALTH: SEC Charges Atlanta-Based Firm Over Ponzi Scheme THORNTON LLC: Case Summary & 11 Unsecured Creditors TRANSTAR HOLDING: Moody's Cuts CFR to B2; Rates Facilities Caa1 TRIGEE FOUNDATION: Voluntary Chapter 11 Case Summary TUCSON ELECTRIC: Fitch Lifts Issuer Default Rating From 'BB+' URBAN WEST RINCON: Court Orders Dismissal of Chapter 11 Cases WINDHAM & MCDONALD: Case Summary & 20 Largest Unsecured Creditors WINNERS CREATIVE: Voluntary Chapter 11 Case Summary * Home Valued at Filing for Stripping Off in Chapter 13 * Bankruptcy Court Proper Venue for Final Rulings on Tax Disputes * A&M Expands Public Sector Services Group * Spencer Cain Bankruptcy Pro Joins Vorys in Houston * Recent Small-Dollar & Individual Chapter 11 Filings ********* 1555 WABASH: Plan Filing Period Extended Until Oct. 28 ------------------------------------------------------ 1555 Wabash LLC seeks an extension of its exclusive period to propose a Chapter 11 plan and solicit acceptances of that plan through and including Nov. 28, 2012, and Jan. 28, 2013, respectively. The Debtor said it has been diligently pursuing the administration of the Chapter 11 case with a view toward formulating a prompt exit strategy. However, given the general overall economic concerns especially facing the real estate markets, it is impossible for the Debtor to propose a Plan and implement a Chapter 11 exit strategy within the existing exclusive periods. Furthermore, the Debtor said it has had discussions with third parties relating to a transaction that would involve the funding of a Plan. These third parties have conducted due diligence regarding the Debtor, the Property and the related financial issues and are in the process of formulating offer(s) that could be utilized in the implementation of the exit strategy from the Chapter 11 case. The Debtor requires further time for the discussions with these third parties to be completed. An agreed order signed by the bankruptcy judge on Aug. 31 extends until Oct. 28, the Debtor's exclusive period to propose a plan and until Dec. 13, the exclusive solicitation period. The order is without prejudice to the rights of the senior lender to assert that the Debtor has no capability of presenting a plan of reorganization that is confirmable under Sec. 1129 of the Bankruptcy Code. The entry of the order will not have any bearing on any issue in the Chapter 11 case, including, but not limited to, any issue relating to the senior lender's cashing of any check delivered by the Debtor. Meanwhile, a hearing on the Debtor's motion to use cash collateral has be continued to Oct. 30, 2012 at 10:00 a.m., according to a notice filed in Court. About 1555 Wabash 1555 Wabash LLC owns and operates a 14-story mixed use building located at 1555 South Wabash, in Chicago, Illinois. The property is comprised of 176 residential units plus 11,000 square feet of commercial space located on the first floor of the building. The property was originally developed as condominium units to be sold at designated sale prices to qualified buyers. Construction was generally completed as of the middle of 2009. Only 36 of the 100 sale contracts closed. As of the Petition Date, 1555 Wabash leased 115 of the remaining 140 residential apartment units -- roughly 82% -- to qualified tenants, while the commercial space is presently vacant. 1555 Wabash LLC filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 11-51502) on Dec. 27, 2011, to halt foreclosure of the property. Judge Jacqueline P. Cox oversees the case. David K. Welch, Esq., at Crane Heyman Simon Welch & Clar, serves as the Debtor's counsel. The Debtor scheduled $90,055 in personal property and said the current value if its condo building is unknown. The Debtor disclosed $51.6 million in liabilities. The petition was signed by Theodore Mazola, president of New West Realty Development Corp., sole member and manager of the Debtor. 17315 COLLINS: Has Access to Cash Collateral Thru Sept. 30 ---------------------------------------------------------- Judge Robert A. Mark of the U.S. Bankruptcy Court for the Southern District of Florida authorized 17315 Collins Avenue LLC, on a sixth interim basis, to use the cash collateral of 17315 CAM through Sept. 30, 2012, to pay for operating expenses and administration costs, in accordance with a budget. The Debtor granted in favor of 17315 CAM and as security a first priority postpetition security interest and lien in all of the Debtor's assets, to the same priority, validity and extent that 17315 CAM held a properly perfected prepetition security interest in the assets. The hearing on the further use of cash collateral is scheduled for Sept. 25, 2012, at 1:30 p.m. A copy of the cash collateral budget is available for free at: http://bankrupt.com/misc/17315COLLINS_6thcashcollbudget.pdf About 17315 Collins Avenue LLC 17315 Collins Avenue LLC owns and operates a luxury, beach-front condominium-hotel located in Sunny Isles Beach, Florida, commonly known as Sole on the Ocean. It filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 12-10631) on Jan. 10, 2012. The Debtor is the sole owner of the Project. WaveStone Properties LLC owns 100% of the membership interests in the Debtor and has no other businesses or assets. Thomas Feeley is the managing member of WaveStone. Judge Robert A. Mark presides over the case. Lawyers at Meland Russin & Budwick P.A. serve as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. Mr. Feeley signed the petition. 1881 CENTRAL: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: 1881 Central Avenue, LLC 18 Pinewood Avenue Albany, NY 12208 Bankruptcy Case No.: 12-12394 Chapter 11 Petition Date: Court: U.S. Bankruptcy Court Northern District of New York (Albany) Debtor's Counsel: Robert J. Rock, Esq. TULLY RINCKEY PLLC 441 New Karner Road Albany, NY 12205 Tel: (518) 218-7100 E-mail: rrock@1888law4life.com Scheduled Assets: $1,802,000 Scheduled Liabilities: $1,641,000 The Company's list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by Wensong Chen, president. AAA STORAGE: Case Summary & 5 Largest Unsecured Creditors --------------------------------------------------------- Debtor: AAA Storage Depot, LLC 1500 Jersey Street South Plainfield, NJ 07080 Bankruptcy Case No.: 12-32578 Chapter 11 Petition Date: September 13, 2012 Court: U.S. Bankruptcy Court District of New Jersey (Trenton) Judge: Raymond T. Lyons Jr. Debtor's Counsel: Andrew J. Kelly, Esq. KELLY & BRENNAN, P.C. 1011 Highway 71, Suite 200 Spring Lake, NJ 07762-2030 Tel: (732) 449-0525 Fax: (732) 449-0592 E-mail: akelly@kbtlaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its five largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb12-32578.pdf The petition was signed by Donna L. Clark, managing member. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Lawrence Franklin Clark and Donna Lisa Clark 11-13776 02/10/11 AHERN RENTALS: Hearing on Exclusivity Periods Scheduled for Oct. 9 ------------------------------------------------------------------ The Hon. Bruce T. Beesley of the U.S. Bankruptcy Court for the District of Nevada extended Ahern Rentals, Inc.'s exclusive periods filing and soliciting acceptances for the proposed plan of reorganization until the conclusion of the continued hearing scheduled for Oct. 9, 2012, at 2 p.m. The Debtor requested for an extension in its exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Nov. 30, 2012, and Feb. 1, 2013, respectively. As reported in the Troubled Company Reporter on July 27, 2012, Ahern Rentals stated, "The Debtor is in the process of formulating a Plan that would pay creditors the full amount of their claims against Debtor's estate, consistent with its intentions since the commencement of this Chapter 11 Case. Indeed, as permitted by this Court, the undisputed unsecured claims in this case have been reduced to about $3.0 Million." About Ahern Rentals Founded in 1953 with one location in Las Vegas, Nevada, Ahern Rentals Inc. -- http://www.ahern.com/-- now offers rental equipment to customers through its 74 locations in Arizona, Arkansas, California, Colorado, Georgia, Kansas, Maryland, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and Washington. Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain an extension of the Aug. 21, 2011 maturity of its revolving credit facility. Judge Bruce T. Beesley presides over the case. Lawyers at Gordon Silver serve as the Debtor's counsel. The Debtor's financial advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman Carson Consultants LLC serves as claims and notice agent. Counsel to Bank of America, as the DIP Agent and First Lien Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer. Attorneys for the Majority Term Lenders are Paul Aronzon, Esq., and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP. Counsel for the Majority Second Lienholder are Paul V. Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq., at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert LLP argue for certain revolving lenders. Attorneys for U.S. Bank National Association, as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard, Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland & Hart. In its schedules, the Debtor disclosed $485.8 million in assets and $649.9 million in liabilities. The Official Committee of Unsecured Creditors has tapped Covington & Burling LLP as counsel, Downey Brand LLP as local counsel, and FTI Consulting as financial advisor. ALGECO SCOTSMAN: S&P Assigns 'B+' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' long-term corporate credit rating to Baltimore-based Algeco Scotsman Global S.� r.l. (Algeco). The outlook is stable. "At the same time, we assigned a 'B+' rating to the proposed EUR1,050 million senior secured notes to be issued by subsidiary Algeco Scotsman Global Finance PLC and guaranteed by Algeco. The recovery rating on the notes is '4', indicating our expectation of an average (30%-50%) recovery in a payment default. We also assigned a 'B-' rating to the proposed EUR675 million senior unsecured notes to be issued by Algeco Scotsman Global Finance PLC and guaranteed by Algeco. The recovery rating on the notes is '6', indicating our expectation of negligible (0%-10%) recovery in a payment default," S&P said. "The ratings on Algeco reflect the company's significant position within the modular space leasing industry, its global footprint, the diverse end markets it serves, and its very low customer concentration and intermediate-term leases," said Standard & Poor's credit analyst Funmi Afonja. "Offsetting some of these strengths is the company's aggressive debt leverage, due largely to a history of debt-financed acquisitions, and its high exposure to the slowing economies of Europe and the U.S. that make up the majority of revenues and earnings. Despite near-term economic weakness in Europe and the U.S., we expect the company's financial profile to stay relatively stable, with weakness in those markets partly offset by profitable growth in the Asia Pacific region, Canada, and Latin America. We categorize Algeco's business risk profile as 'weak,' its financial risk profile as 'aggressive,' and its liquidity as 'adequate' under our criteria. The company does not publicly disclose financial information," S&P said. "Algeco is recapitalizing its balance sheet with new financings and converting some debt into equity. Algeco is entering into a $1,250 million asset-based revolving credit facility (not rated), EUR1,050 million senior secured notes and EUR675 million senior secured notes. The company will use proceeds largely to pay off existing debt and to cover transaction fees and expenses. At the same time, Algeco is acquiring Ausco Modular Holdings Ltd. (Ausco; not rated), a lessor of modular buildings in Australia and New Zealand. The terms of the sale of Ausco to Algeco are not publicly disclosed. Algeco is majority owned by TDR Capital LLP, which also owns soon-to-be sold Ausco," S&P said. "Pro forma for the proposed transaction, we expect operating margins (after depreciation and amortization) in the low teen percentage area, funds flow from operations (FFO) to total lease- adjusted debt to be about 10%, and lease-adjusted debt to capital in the mid-60% area. As a leasing company, Algeco can accommodate somewhat higher leverage relative to similarly rated industrial companies. Even so, Algeco carries a heavy debt load and has substantial goodwill due to a history of debt-financed acquisitions. Over the past seven years Algeco has successfully consolidated the global modular space market, completing several acquisitions with a combined enterprise value in excess of EUR2 billion. Our assessment of the company's financial profile leaves room for midsize tuck-in acquisitions. However, a large debt- financed acquisition could hurt the company's financial risk profile and our expectations for stable credit measures," S&P said. "Algeco is a global lessor of modular structures. Products include single-unit buildings and large-scale multistory permanent structures, used for various purposes including offices, classrooms, hospitals, restaurants, and retail stores, for example. The company engages in the leasing, sale, delivery, and installation of these products throughout Europe, North America, Latin America, and Asia Pacific. Algeco also provides portable storage solutions--a relatively small portion of its business," S&P said. "The most significant factors in our assessment of Algeco's overall business risk profile are market position, geographic diversity, end market diversity, and customer concentration. Algeco is the leading lessor of modular space in the world, and it holds the No. 1 or No. 2 position in all of the markets it serves. The company has operations in 37 countries. Algeco benefits from serving diversified end markets such as mining, manufacturing, government, commercial and residential construction, education, and diversified industrial companies. The company has a granular customer base with very low customer concentration. The ancillary services Algeco provides to its customers (maintenance, alarms, telemonitoring, etc.) and its relatively small storage business enhance the company's diversity. Algeco has lease terms that average two to three years and help support its relatively good operating efficiency. Algeco's closest competitor is Modular Space Corp. (not rated). Modular Space operates predominantly in North America and does not have nearly the global footprint and range of offerings that Algeco does," S&P said. "The outlook is stable. Pro forma for the financings and the sale of Ausco to Algeco, we expect the company to maintain its credit measures, with rising earnings in higher-margin, more profitable markets in Australia, Canada, and Brazil, despite earnings pressures from Europe and the U.S.," S&P said. "We believe that Algeco's growth strategy and diverse operations should help it weather near-term economic weakness in the U.S. and Europe, its two key markets. We could, however, lower our ratings if weakness in these markets or a more pronounced slowdown in the global economy pressure earnings more than we expect, or if the company pursues a large debt-financed acquisition, causing FFO to debt to fall to mid-single-digit percentage area," S&P said. "Although less likely, we could raise the rating if revenues and earnings growth exceed our expectations (causing FFO to debt to reach the midteen percent area) and operating margins (after depreciation and amortization) to rise to the high-teens percent area on a sustained basis," S&P said. ALLEN FAMILY: Court OKs Settlement Agreement with MidAtlantic Farm ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approved a settlement agreement entered among the Official Committee of Unsecured Creditors in the Chapter 11 cases of Allen Family Foods, Inc., et al., the Debtors, and MidAtlantic Farm Credit, ACA, as agent/nominee for the secured creditors in relation to the adversary proceeding against MidAtlantic Farm. As reported in the Troubled Company Reporter on Aug. 29, 2012, Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that the Debtor is on the cusp of filing a liquidating Chapter 11 plan which will be based in part on a settlement where the secured lender gave up $5 million. The report related that Allen said the liquidating plan will be a joint project of the company and the official creditors' committee. The plan would be filed within 30 days, the company said in a court filing. Secured debt when the Chapter 11 case began included $83.2 million on a term loan and revolving line of credit with MidAtlantic Farm Credit ACA, as agent. From the sale proceeds, $30 million was held aside to await the result of the lawsuit by the creditors against MidAtlantic. The settlement carved out $5 million for unsecure creditors, with the remainder going to the bank. The Bloomberg report disclosed that the bank also agreed to waive claims, so it won't share in any distribution to unsecured creditors as a result of a deficiency claim. About Allen Family Foods Allen Family Foods Inc. is a 92-year-old Seaford, Del., poultry company. Allen Family Foods and two affiliates, Allen's Hatchery Inc. and JCR Enterprises Inc., filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-11764) on June 9, 2011. Allen estimated assets and liabilities between $50 million and $100 million in its petition. Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as counsel to the Debtors. FTI Consulting is the financial advisor. BMO Capital Markets is the Debtors' investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Roberta DeAngelis, U.S. Trustee for Region 3, appointed seven creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' cases. Lowenstein Sandler PC and Womble Carlyle Sandridge & Rice, PLLC, serve as counsel for the committee. J.H. Cohn LLP serves as the Committee's financial advisor. ALLEN FAMILY: Wants Plan Filing Period Extended to Nov. 29 ---------------------------------------------------------- Allen Family Foods Inc., and its affiliated debtors ask the U.S. Bankruptcy Court to further extend their exclusive periods to file a chapter 11 plan or plans, and to solicit acceptances of the plan(s), through and including Nov. 29, 2012 and Jan. 29, 2013, respectively. A hearing on the request is scheduled Sept. 26. The Debtors contend that a fourth extension of the exclusive periods is warranted. The Debtors say they continue to focus on transferring operations on an ongoing basis to Harim USA, Ltd., following the successful sale of the Debtors' assets, and have, in consultation with the Committee, turned their attention to analyzing the full scope of claims that have been filed against their estates and drafting a plan of liquidation. To that end, the Debtors and the Committee are diligently evaluating the validity of each claim in an effort to ensure an accurate reconciliation of the Debtors' pre-petition and post- petition obligations. In particular, the Committee has resolved a sizable administrative expense claim filed by the Pension Benefit Guarantee Corporation. In consultation with the Committee, the Debtors will determine the most efficient means for bringing these cases to a conclusion once the claims reconciliation process has run its course and other administrative issues have been addressed and resolved. Finally, the Court recently entered the order approving a pivotal settlement between the Committee, the Debtors, and the Debtors' prepetition secured lenders led by MidAtlantic Farm Credit, ACA, regarding the validity of certain prepetition secured liens that allegedly encumbered a significant portion of the Debtors' remaining assets. Now that the MAFC Settlement Order has been entered, the Debtors and the Committee now have a clearer understanding of the asset pool that will be available to creditors holding both unsecured and priority claims, and, in light thereof, the Debtors are working with the Committee to formulate the proper course of action to effectuate distributions to various parties-in-interest. "The Debtors and the Committee anticipate filing a joint disclosure statement and joint plan of liquidation within the next 30 days, but are [seeking an extension] out of an abundance of caution because the Current Deadline to file a plan is August 31, 2012," according to the Aug. 22 filing by the Debtors. About Allen Family Foods Allen Family Foods Inc. is a 92-year-old Seaford, Delaware, poultry company. Allen Family Foods and two affiliates, Allen's Hatchery Inc. and JCR Enterprises Inc., filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-11764) on June 9, 2011. Allen estimated assets and liabilities between $50 million and $100 million in its petition. Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, in Wilmington, Delaware, serve as counsel to the Debtors. FTI Consulting is the financial advisor. BMO Capital Markets is the Debtors' investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Roberta DeAngelis, U.S. Trustee for Region 3, appointed seven creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' cases. Lowenstein Sandler PC and Womble Carlyle Sandridge & Rice, PLLC, serve as counsel for the committee. J.H. Cohn LLP serves as the Committee's financial advisor. AMBAC FINANCIAL: 92 Policy Claims Not Eligible for Payment ---------------------------------------------------------- The Circuit Court for Dane County, Wisconsin, approved a motion by the Wisconsin Commissioner of Insurance, acting as the Rehabilitator of the Segregated Account of Ambac Assurance Corporation, to commence making interim cash payments on policy claims submitted to the Segregated Account in an amount, in cash, equal to 25% of the permitted amount of each Policy Claim. To facilitate the Interim Cash Payment Order, the Rehabilitator has promulgated Rules Governing the Submission, Processing and Partial Payment of Policy Claims in accordance with the June 4, 2012, Interim Cash Payment Order. In accordance with the Policy Claim Rules, beginning in August 2012, policyholders that submit compliant Policy Claims by the end of a calendar month and which are permitted and approved by the Rehabilitator for payment are eligible to receive 25% of the amount of the permitted Policy Claim from the Segregated Account on or around the 20th day of the following month. As of Aug. 31, 2012, Ambac Assurance Corporation, as the management services provider for the Segregated Account, had received most of the Policy Claims relating to the period between March 24, 2010 and July 31, 2012, that it had expected. However, as of Aug. 31, 2012, it has not received Policy Claims relating to the Moratorium Period in respect of 80 CUSIPs which it had expected to receive. As these Moratorium Period Policy Claims were not received on or before the end of August 2012, they are not eligible for consideration for payment from the Segregated Account on Sept. 20, 2012. Instead, these Moratorium Period Policy Claims will be evaluated for payment upon receipt of compliant Policy Claims in accordance with the Policy Claim Rules. In addition, twelve Securities have not had Policy Claims submitted in respect of the period relating to the payment date falling in August 2012 and accordingly will also not be eligible for consideration for payment on Sept. 20, 2012. A copy of the Form 8-K is available for free at: http://is.gd/XY5ac8 About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Judge Shelley C. Chapman entered an order confirming the Fifth Amended Plan of Reorganization of Ambac Financial Group, Inc. on March 14, 2012. The Plan provides for the full payment of secured claims and 8.5% to 13.2% recovery for general unsecured claims. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). The Company's balance sheet at June 30, 2012, showed $26.61 billion in total assets, $30.36 billion in total liabilities and a $3.75 billion total stockholders' deficit. AMERICAN AIRLINES: Cuts Flights Due to Pilots Shortage ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMR Corp., the parent of American Airlines Inc., is being forced to reduce the flight schedule 2% this month and next because of a shortage of pilots. The pilots' union said its members aren't engaging in a job action. Last week, the bankruptcy court authorized AMR to impose contract concessions on the pilots. AMR's other eight unions negotiated and ratified contracts with fewer concessions. AMR will be putting about 4,000 mechanics and ground workers on furlough as the result of their unions' contract concessions. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AXLE: Completes Sale of $550 Million of 6.625% Sr. Notes ----------------------------------------------------------------- American Axle & Manufacturing, Inc., completed the closing of the sale of $550 million aggregate principal amount of 6.625% senior notes due 2022. The Notes are guaranteed on a senior unsecured basis by the Company and certain of AAM's current and future subsidiaries. The Notes were issued by AAM pursuant to an Indenture, dated as of Nov. 3, 2011, by and among AAM, the Guarantors and U.S. Bank National Association, as trustee, which governs the terms of the Notes. 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 HERITAGE: S&P Cuts Ratings on 2 Bond Series to 'BB-' ------------------------------------------------------------- Standard & Poor's Ratings Services lowered to 'BB-' from 'BB+' and removed from CreditWatch its long-term ratings on the California Municipal Finance Authority's education revenue bonds series 2006A and taxable education revenue bonds series 2006A-T, both issued on behalf of the American Heritage Education Foundation project. The outlook is negative. "The downgrade and negative outlook reflect the trustees' inability to obtain a waiver for the fiscal 2011 covenant violation and the ongoing acceleration risk," said Standard & Poor's credit analyst Robert Dobbins. "Furthermore, we believe acceleration risk will continue for the foreseeable future, while bondholders obtain and assess information they have requested and Heritage K-8 Charter School goes through its charter renewal process," added Mr. Dobbins. "The 'BB-' long-term rating reflects our view of the Heritage Foundation's poor financial performance in fiscal year 2011 and the subsequent weak maximum annual debt service coverage of 0.4x, according to our calculations, which triggered a covenant violation under the indenture. Although American Heritage is current on its bond payments, according to management, it did not meet its debt service coverage ratio covenant for fiscal year 2011. As a result, the bonds are now in a technical default, the remedy for which, per the indenture, is acceleration. The trustee has not yet initiated acceleration, and it is our understanding that the trustee will not do so, contingent upon receipt of positive results of the charter schools' request for waiver of the covenant violation (with 100% of bondholders approval required for the waiver). According to the trustee, thus far waiver forms have been returned by bondholders of approximately 57% of the aggregate principal amount of outstanding bonds," S&P said. AMKOR TECHNOLOGY: Moody's Affirms Ba3 CFR; Rates Sr. Notes Ba3 -------------------------------------------------------------- Moody's Investors Service rated Amkor Technology, Inc.'s $300 million new Senior Notes due 2022 Ba3 (LGD4, 50%) and affirmed Amkor's Ba3 Corporate Family (CFR), Probability of Default (PDR), and Senior Unsecured rating; the SGL-2 Speculative Grade Liquidity rating; and the negative outlook. Ratings Rationale Amkor will use proceeds of the new Senior Notes to refinance $225 million of approximately $275 million of primarily secured debt at its Asian subsidiaries, with up to $75 million remaining for general corporate purposes. The debt of the Asian subsidiaries matures between September 2012 ($4 million) and July 2017. Thus, the new Senior Notes issuance and related debt repayment is modestly liquidity enhancing since it extends the average maturity of Amkor's debt and provides up to $75 million of additional funding. The Ba3 Corporate Family Rating (CFR) reflects Amkor's business position as the second largest outsourced semiconductor assembly and test (OSAT) company in the world after market leader Advanced Semiconductor Engineering ($4.3 billion of OSAT revenues in 2011), with a broad portfolio of advanced manufacturing technologies for semiconductor chip finishing and testing. This leads to Moody's expectation of generally positive, though variable, free cash flow (FCF) even during industry troughs. Due to its large scale of operations, Amkor should benefit from the secular outsourcing trend in semiconductor production, as semiconductor companies increasingly outsource manufacturing as part of their "fabless" or "fab-lite" manufacturing models. Nevertheless, the assembly and test segment is capital intense and cyclical due to dependence on the semiconductor industry. Amkor goes through long periods of very high capital spending which usually leads to negative cash flow, as will be the case through early 2013. Moreover, Amkor has high revenue concentration to two key customers (Texas Instruments and Qualcomm). The Ba3 CFR anticipates financial leverage will be sustained under 3.0x total debt to EBITDA over time (Moody's adjusted). For the full year 2012, Moody's expects Amkor's revenues will be in excess of $2.7 billion but with negative free cash flow (FCF) of at least $100 million due to the weak cash from operations and the increased capital expenditures. In 2013, Moody's expects negative FCF of more than $100 million due to cash payments under an arbitration award and high capital spending, partially offset by gradually improving market conditions over the course of the year. The negative outlook reflects: 1) Moody's expectation of strain to Amkor's liquidity as the company is consuming cash for increased capital expenditures to support a key customer and to begin construction of a new production facility in Korea; 2) Moody's view that the final arbitration order in Amkor's patent dispute with Tessera could require Amkor to pay Tessera about $100 million in the first quarter of 2013 on top of the $20 million paid in August 2012; and 3) the uncertainty of longer term cash flows given the potential for an injunction on the disputed patent. (Tessera has already cancelled its license to Amkor for this particular technology.) Moody's expects Amkor will conserve cash in anticipation of the required payments under the arbitration award, and will refrain from further share repurchases. Moreover, Moody's expects that Amkor could take further steps to bolster liquidity, such as slowing the pace of capital expenditures or further increasing the size of the revolver. The rating could be downgraded if Tessera prevails in its effort to obtain an injunction. The rating could also be downgraded if Amkor makes further share repurchases prior to making the arbitration award payments or if Amkor fails to otherwise increase liquidity to cushion the cash impact of the arbitration award and a potential granting of Tessera's request for injunctive relief. The rating could also be downgraded if the ratio of debt to EBITDA (Moody's standard adjustments) approaches 4x, or if Amkor is unable to make steady progress restoring its EBITDA margin to historical level of around 24%. The rating outlook could be stabilized if either Tessera is not awarded an injunction related to the US patent or Amkor is able to settle this patent litigation for less than $50 million and Amkor begins to generate sustained annual free cash flow of at least $100 million and the ratio of debt to EBITDA (Moody's standard adjustments) is on course to decline below 2.5x. Amkor, based in Chandler, Arizona, is one of the largest providers of outsourced semiconductor assembly and test (OSAT) services for integrated semiconductor device manufacturers (IDM) as well as fabless semiconductor companies. Upgrades: Issuer: Amkor Technology, Inc. Senior Unsecured Regular Bond/Debenture, Upgraded to 50 - LGD4 from LGD4, 55 % Assignments: Issuer: Amkor Technology, Inc. Senior Unsecured Regular Bond/Debenture, Assigned a range of 50 - LGD4 to Ba3 The principal methodology used in rating Amkor was the Global Semiconductor Industry Methodology published in November 2009. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published in June 2009. AMKOR TECHNOLOGY: S&P Rates $300MM Unsecured Notes 'BB' ------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' issue-level rating to Chandler, Ariz.-based Amkor Technology Inc.'s $300 million senior unsecured notes due 2022. "We also assigned a '3' recovery rating to the senior unsecured notes, indicating a meaningful (50%-70%) recovery for lenders in the event of a payment default," S&P said. The 'BB' corporate credit rating on Amkor remains unchanged. The rating outlook is stable. "The rating on Amkor reflects Standard & Poor's expectation that the semiconductor packaging and test provider will preserve its significant financial risk profile and its competitive position through the typical industry cycle," said Standard & Poor's credit analyst David Tsui. "The semiconductor industry has experienced a decline from its cyclical peak in 2010 and near-term growth is expected to be modest, or in the low-single-digit percentage area year over year. We view the company's business risk profile as 'weak,' as we consider its operations more volatile than the broader semiconductor industry and with high capital expenditure requirements. We view the company's financial risk profile as significant, with debt to EBITDA of 2.8x as of June 30, 2012, pro forma for the debt issuance, but it is subject to considerable fluctuation over an industry cycle, and with a negative free operating cash flow (FOCF) of $49 million for the 12 months ended June 30, 2012." "We expect that the company's revenue in the second half of 2012 will be flat to up modestly by a low-single-digit percentage on a year-over-year basis. Demand for smartphones and tablets continues to build, albeit at a slower pace than originally anticipated, and the networking, computing, industrial, and consumer end markets build inventory to meet the demands of new consumer and enterprise product refreshes," S&P said. "We expect Amkor's margins to increase from current levels over the coming quarters as the company's capacity utilization improves, despite headwinds from higher input costs and pricing erosion. The company intends to use the proceeds from the $300 million senior unsecured notes issuance to repay approximately $225 million of outstanding foreign debt, using the remaining amount for general corporate purposes. As such, and pro forma for the note issuance, we expect debt to EBITDA to increase to the 2.8x area, from 2.6x at June 30, 2012. Our outlook allows capacity for debt leverage up to about 4x within the current rating," S&P said. AMTRUST FINANCIAL: Defeats FDIC; Creditors Could Receive $300MM --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AmTrust Financial Corp., a holding company for a failed bank, won a victory in the U.S. Court of Appeals over the Federal Deposit Insurance Corp. The ruling means that creditors will recover at least $100 million and might take home $300 million under the liquidating Chapter 11 plan approved in November by a confirmation order from the U.S. Bankruptcy Court in Cleveland. According to the report, AmTrust first defeated the FDIC in June 2011 when a U.S. district judge ruled that the FDIC failed to prove there was a commitment for the holding company to provide capital to the bank subsidiary that subsequently failed. Had the FDIC won, its priority claim for a commitment would have come ahead of all AmTrust unsecured creditors. The FDIC appealed and lost in the U.S. Court of Appeals in Cincinnati in a Sept. 14 opinion. The Sixth Circuit agreed there was no commitment. The report relates that bankruptcy law would have given the FDIC a priority claim only if there were a "commitment" to supply capital to a bank. There is a second lawsuit with the FDIC over the entitlement to a $200 million tax refund for 2009 that the Internal Revenue Service is yet to pay. The FDIC claims the right to collect all but $9 million of the refund. About $100 million already has been collected for distribution to creditors, according to Christopher Meyer, a bankruptcy lawyer for AmTrust from Squire Sanders (US) LLP. A victory over the FDIC in the tax- refund case may triple the creditors' pot, Meyer said in an interview. The report notes that the lawsuit over the refund has been fully briefed. The parties are awaiting a decision from the district court, according to Richard Gurbst, a Squire Sanders lawyer. If the FDIC loses the tax-refund case, it will have the largest unsecured claim in the bankruptcy, Meyer said. As a result, the FDIC would receive the largest distribution under the Chapter 11 plan. AmTrust Financial said the family of companies had assets of $11.7 billion and debt of $11.5 billion before the bank was taken over and transferred by the FDIC to New York Community Bank. At the start of the Chapter 11 case, the assets of the companies in bankruptcy included ownership of the non-bankrupt subsidiaries, $7.3 million in cash and $23 million of fixed assets at book value. Debt of the companies in bankruptcy included $169.5 million for borrowed money, with $99.5 million on senior notes and $51.6 million on subordinated notes. The appeal is Federal Deposit Insurance Corp. v. AmTrust Financial Corp.(In re AmTrust Financial Corp.), 11-3677, U.S. 6th Circuit Court of Appeals (Cincinnati.) The lawsuit with the FDIC in the district court was Federal Deposit Insurance Corp. v. AmTrust Financial Corp., 10-1298, U.S. District Court, Northern District of Ohio (Cleveland). The Chapter 11 case is In re AmFin Financial Corp., 09-21323, U.S. Bankruptcy Court, Northern District of Ohio (Cleveland). About AmTrust Financial AmTrust Financial Corp. was the owner of the AmTrust Bank. AmTrust was the seventh-largest holder of deposits in South Florida, with $4.7 billion in deposits and 21 branches. In November 2008, the Office of Thrift Supervision issued a cease and desist order requiring AmTrust to improve its capital ratios. AmTrust Financial, together with affiliates that include AmTrust Management Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ohio Case No. 09-21323) on Nov. 30, 2009. The debtor subsidiaries include AmFin Real Estate Investments, Inc., formerly AmTrust Real Estate Investments, Inc. (Case No. 09-21328). G. Christopher Meyer, Esq., Christine M. Piepont, Esq., and Sherri L. Dahl, Esq., at Squire Sanders & Dempsey (US) LLP, in Cleveland, Ohio; and Stephen D. Lerner, Esq., at Squire Sanders & Dempsey (US) LLP, in Cincinnati, Ohio, served as counsel to the Debtors. Kurtzman Carson Consultants served as claims and notice agent. Attorneys at Hahn Loeser & Parks LLP serve as counsel to the Official Committee of Unsecured Creditors. AmTrust Management estimated $100 million to $500 million in assets and debts in its Chapter 11 petition. AmTrust Bank was not part of the Chapter 11 filings. On Dec. 4, 2009, AmTrust Bank was closed by regulators and the Federal Deposit Insurance Corporation was named receiver. New York Community Bank, in Westbury, New York, assumed all of the deposits of AmTrust Bank pursuant to a deal with the FDIC. AmTrust, nka AmFin Financial Corp., obtained confirmation of its Amended Joint Plan of Reorganization on Nov. 3, 2011. The plan was declared effective in December. APOLLO HEALTH: Porzio Faces Malpractice Suit Over Failed Ch. 7 -------------------------------------------------------------- Martin Bricketto at Bankruptcy Law360 reports that the former owners of Armanti Financial Services LLC have sued Porzio Bromberg & Newman PC in New Jersey for more than $4.4 million over a dismissed involuntary bankruptcy petition against Apollo Health Street Inc., which purchased the health care administrative services company in 2008. According to Bankruptcy Law360, the plaintiffs -- who had accused Apollo of breaching payment, licensing and lease agreements -- contend Porzio attorney Warren Martin Jr. improperly advised them to file the involuntary Chapter 7 petition in 2011 without performing the necessary due diligence over Apollo. ARGO DIGITAL: Former Execs Accused of Defrauding Investors ---------------------------------------------------------- Pete Brush at Bankruptcy Law360 reports that former executives of Argo Digital Solutions Inc., a defunct Florida marketing technology business, transferred company assets to a shell entity, obtained fresh capital and left original Argo investors with worthless positions, according to a derivative suit filed Friday in New York federal court. Argo CEO Jason M. Kates, Chairman Richard J. Sullivan and Senior Vice President David A. Loppert perpetrated the fraud after getting into disagreements with the investor-plaintiffs, who owned a large amount of the company's share capital, according to the complaint suit cited by Bankruptcy Law360. ARGO GROUP: S&P Gives 'BB+' Prelim Rating on Subordinated Debt -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'BBB-' senior unsecured debt and 'BB+' subordinated debt ratings to Argo Group US, Inc.'s (AGUS) recently filed debt securities shelf. "In addition, we assigned our 'BBB-' senior unsecured debt rating to AGUS' proposed up to $125 million 30-year senior unsecured notes issuance," S&P said. "The ratings on the senior unsecured debt notes reflect the counterparty credit rating on AGUS; the subordinated debt shelf rating reflects subordination to the senior notes as well. We expect the total consolidated financial leverage to remain relatively unchanged following the transaction, given our expectation that management is likely to use the majority of the proceeds of the AGUS senior notes issuance to repurchase other (higher coupon) securities outstanding. At June 30, 2012, Argo Group International Holdings, Ltd.'s consolidated financial leverage (including pension deficits as debt) stood at a moderate 21.4%," S&P said. "The group's consolidated operating results were within our expectations during the first half of 2012, with a total consolidated generally accepted accounting principles (GAAP) combined ratio of 100%. The operating results continue to reflect the group's high expense base, as seen in the group's consolidated expense ratio of 40% through the first six months of 2012. However, as the group pursues several strategies to lower its expense base, we expect management to bring its expense ratio down to more competitive levels over the next two to three years. We continue to expect the group to report a consolidated GAAP combined ratio of 100%-104% for full-year 2012, assuming a catastrophe load of approximately 5-6 points," S&P said. Ratings List Argo Group US, Inc. Counterparty credit rating BBB-/Stable/-- Ratings Assigned Senior unsecured BBB- (prelim) Subordinated debt BB+ (prelim) Senior unsecured BBB- ASP HHI: Moody's Assigns 'B2' Corp. Family Rating ------------------------------------------------- Moody's Investors Service assigned ratings to ASP HHI Acquisition Co., Inc. ("HHI") -- Corporate Family Rating, B2; Probability of Default Rating, B3; and the new $580 million of senior secured bank credit facilities, B2. The rating outlook is stable. Proceeds from the $505 million senior secured term loan, along with an additional equity investment of $272 million from affiliates of American Securities and management, will be used to fund the acquisition of HHI Holdings, LLC, pay related fees and expenses, and fund general corporate purposes. HHI Holdings is the largest North American manufacturer of forged components to the automotive industry. The $75 million senior secured revolving credit facility is expected to be unfunded at closing. The ratings of HHI Holdings, LLC will be withdrawn upon the close of the of this transaction and the repayment of HHI Holdings' existing rated debt facilities. The following ratings were assigned: Corporate Family Rating, B2; Probability of Default, B3; B2 (LGD3, 34%), for the new $75 million senior secured revolver due 2017; B2 (LGD3, 34%), for the new $505 million senior secured term loan due 2018. Rating Rationale HHI's B2 Corporate Family Rating reflects Moody's expectation that the company's strong operating performance and credit metrics experienced over the recent years will continue with higher levels of automotive production anticipated over the near-term. HHI maintains longstanding customer relationships and a strong competitive position within a limited number of forged auto parts suppliers in North America, where automotive retail sales are expected to continue to improve. The assigned ratings are balanced by the company's high end-customer concentration to the Detroit-3 and modest revenue base within the auto parts supplier industry which over-exposes the company to industry and regional cyclicality. The ratings also reflect the company's demonstrated capacity to support a number of shareholder distributions over the recent years. HHI is anticipated to have a good liquidity profile over the near- term supported by a $75 million revolving credit facility and expected free cash flow generation over the near-term. Pro forma for the acquisition, the revolving credit facility is expected to be unfunded with a small amount of letters of credit outstanding. Consistent with historical trends of either repaying debt or shareholder distributions, HHI's cash balances are expected to be maintained at nominal levels. The term loan facility is anticipated to have 1% annual amortization requirements with a bullet maturity in six years. Financial covenants are expected to include a total maximum leverage ratio test set to maintain adequate head room over the next year. Alternate liquidity is limited as essentially all of the company's assets secure the bank credit facilities. HHI's stable rating outlook reflects the company's strong credit metrics and market position in the forged parts segment of the North American automotive parts supplier industry, balanced by the company's high end-market customer concentrations. The outlook also incorporates the improved North American automotive industry fundamentals which are anticipated to continue over the intermediate-term. The rating could improve if HHI were to continue to maintain its strong niche market position, and revenue participation in the automotive and commercial vehicle industries' recovery resulting in EBIT margins maintained above 14%, Debt/EBITDA, approaching 3.0x, and maintain EBIT/Interest above 3.0x. Further customer and industry diversification could also result in positive ratings momentum. The outlook or rating could be lowered if North American automotive production levels decline, resulting in weaker profitability or a deterioration in liquidity. If operations were to weaken such that Debt/EBITDA were to increase over 4.5x or free cash flow generation was not realized, the company's rating and/or outlook could be lowered. The ratings or outlook also could be lowered if shareholder distributions are made resulting in leverage approaching the above thresholds. The principal methodology used in rating ASP HHI Acquisition Co., Inc. was the Global Automotive Supplier Industry Methodology published in January 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ASP HHI Acquisition Co., Inc. (HHI) headquartered in Royal Oak, MI is a full service supplier of highly engineered metal forging and machined components, wheel bearings, and powdered metal engine and transmission components for automotive and industrial customers. Operations are conducted through three subsidiaries: Forging Holdings, LLC, Bearing Holdings, LLC, and Gearing Holdings, LLC. Revenues for LTM June 30, 2012 were approximately $838 million. ATLANTIS OF JACKSONVILLE: Wants to Dismiss Chapter 11 Case ---------------------------------------------------------- The Atlantis of Jacksonville Beach, Inc., has asked the Bankruptcy Court for the Middle District of Florida to dismiss its Chapter 11 case. The hearing on the motion is scheduled for Sept. 28, 2012 at 2:00 P.M. About Atlantis of Jacksonville Beach The Atlantis of Jacksonville Beach, Inc., based in Atlantic Beach, Florida, filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 12-01553) on March 9, 2012. Judge Paul M. Glenn oversees the case. The Law Offices of Mickler & Mickler serves as the Debtor's counsel. Atlantis of Jacksonville Beach scheduled $10,000,000 in assets and $6,592,590 in liabilities. The petition was signed by Chris Hionides, president. Affiliate Shoppes of Lakeside Inc. filed for Chapter 11 (Bankr. M.D. Fla. Case. No. 10-05199) on June 15, 2010. Neptune Beach, Florida-based Shoppes of Lakeside holds title to and generates income from residential and commercial buildings and unimproved land in Duval County. The Debtor owns 45 commercial properties and 10 residential properties. The Law Offices of Mickler & Mickler represents the Debtor as counsel. The Company disclosed $39,894,050 in assets and $37,748,101 in liabilities. ATP OIL: Has Court OK to Pay Funds Attributable to ORRIs and NPIs ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas has authorized ATP Oil & Gas Corporation to pay (i) funds attributable to Overriding Royalty Interests in the ordinary course of business and (ii) funds attributable to "net profits interests." Prior to commencing the Chapter 11 cases, ATP transferred to various third parties undivided interests in specified oil and gas hydrocarbons produced from or attributable to ATP's working interest in designated oil and gas properties subject to federal leases. The conveyed oil and gas interests fall into three general categories: (1) net profits interests conveyed to third parties not involved in the operation of the property or production of the hydrocarbons; (2) net profits interests conveyed to vendors and service providers that participate in the operation of the subject properties; and (3) dollar-denominated overriding royalty interests conveyed to third parties not involved in the operation of the property or production of the hydrocarbons. These interests are all located in federal waters and such interests are subject to applicable federal law and, to the extent applicable, any adopted state law. Specifically, ATP has transferred NPIs in certain of the Debtor's proved producing federal oil and gas properties (a) to certain of its vendors in exchange for oil and gas property development services provided by the vendor in connection with the operation of the properties, and (b) to certain investors in exchange for cash proceeds. The NPI interests entitle the holders to receive a specified percentage of the net profits (generally defined as a certain percentage of revenues less applicable costs, such as operating expenses) attributable to the subject properties until they receive a specified dollar amount. In addition, ATP has also conveyed certain limited-term, dollar-denominated Overrides in various federal oil and gas properties. These Overrides entitle the holders thereof to receive a specified percentage of the gross proceeds attributable to ATP's interest in the hydrocarbons attributable to ATP's working interest in the specified properties until the holders of the Overrides receive a specified dollar amount, including a specified return. A copy of the Order is available at: http://bankrupt.com/misc/atpoil.doc191.pdf Schlumberger Technology Corporation, M-I L.L.C. d/b/a M-I Swaco, Smith International, Inc. and Wireline Control Services, LLC, filed a joint objection to Debtor's Emergency Motion. Curtis Kelly, Inc., GE Oil & Gas Logging Services, Inc., Great White Pressure Control, LLC, a division of Archer - The Well Company, Newpark Environmental Services, LLC, and Wood Group Production Services, Inc., filed a joinder to the joint objection of Schlumberger Technology Corporation, et al. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. The company disclosed $3.64 billion in assets and $3.49 billion in liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan, $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent, $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. ATP reported a net loss of $145.1 million in the first quarter on revenue of $146.6 million. Income from operations in the quarter was $11.8 million. For 2011, the net loss was $210.5 million on revenue of $687.2 million. BIOMET INC: Moody's Assigns 'B3' Rating to Add-On Senior Notes -------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Biomet, Inc.'s add-on 6.5% senior notes and a Caa1 to the company's new senior subordinated note offering. Proceeds are expected to refinance Biomet's 10% cash pay senior notes and a portion of its remaining 11.625% senior subordinated notes. The rating on the existing cash pay senior notes will be withdrawn once this transaction closes and assuming the notes are fully tendered. All other existing ratings, including the B2 Corporate Family Rating, remain unchanged. The rating outlook is stable. Ratings assigned: Biomet, Inc. $825 million add-on senior notes at B3 (LGD 4, 66%) $500 million new senior subordinated notes, due 2020 at Caa1 (LGD 6, 93%) Ratings unchanged with point estimate revision: Biomet, Inc. Corporate Family Rating at B2 Probability of Default Rating at B2 Speculative Grade Liquidity Rating at SGL-2 ABL revolver at Ba2 (LGD 2, 15%) Secured term loan at B1 (LGD 3, 35%) Secured cash flow revolver at B1 (LGD 3, 35%) Existing senior notes at B3 (LGD 4, 66%) Remaining senior subordinated notes at Caa1 (LGD 6, 93%) Rating to be withdrawn: Biomet, Inc. Cash pay senior notes at B3 (LGD 4, 66%) Ratings Rationale This transaction represents a refinancing of existing debt and therefore, with the exception of costs associated with the refinancing, will not result in incremental debt. Including savings from transactions in July, Biomet's annual cash interest expense is expected to decline by about 15%. "Biomet's leverage will remain high, especially if it separates its dental business, but we expect the company to be able to deleverage as it benefits from new product launches and trauma products acquired from J&J," said Diana Lee, a Moody's Senior Credit Officer. Biomet's B2 Corporate Family Rating largely reflects its very high leverage and overall weak financial strength ratios, which represent key credit risks. However, the rating also reflects the company's relatively large size compared to other B2 companies and opportunities associated with favorable demographics. Despite historical stability, Moody's expects the sector to see ongoing volume and pricing pressure because of the weak economy, as well as hospital cost savings initiatives and high levels of competition. The reconstructive market will continue to evolve to one where product innovation is more critical; thus Moody's anticipates higher R&D spending and potentially greater movement of market share in certain product lines over time. If the company does separate its 3i dental implant business, which accounts for about 9% of revenues and would likely result in higher leverage and even weaker credit metrics, Moody's does not expect an effect on ratings. Biomet should benefit from new product launches and the recent acquisition of Johnson & Johnson's (Aaa stable) Depuy trauma business, and Moody's expects leverage would gradually decline. The stable outlook reflects Moody's expectation that, although leverage remains very high and reconstructive use rates and pricing pressures continue, top-line growth rates will remain at least at market levels, supported by new product launches. A large debt-financed transaction, a recall action or material loss in market share that results in higher leverage or declining cash flow such that EBITA/interest approaches 1.0 time or debt/EBITDA exceeds 7.0 times, could result in a downgrade. If the company is able to demonstrate its ability to sustain at or above-market growth rates in core hips and knees and continue deleveraging such that debt/EBITDA and FCF/debt approach 5.0 times and 5%, respectively, and appear sustainable, the ratings could be upgraded. The SGL-2 rating reflects Moody's view that Biomet's liquidity will be good over the next year. Cash balances are adequate and free cash flow will remain modest, but the company should generally have sufficient internal cash to support operations. In addition, Moody's expects Biomet to have access to ample external facilities with limited financial covenants. However, substantially all of the company's assets are pledged to bank lenders. Moody's notes that the proposed transactions will not substantially change the capital structure of the company. However, the B3 senior notes currently benefit from the presence of substantial junior capital in the form of subordinated notes. If the amount of junior subordinated notes decreases materially or if the amount of secured debt, which is ahead of the senior notes increases, the B3 rating on the senior notes could be lowered to Caa1 even in the absence of a change in the CFR. The principal methodology used in rating Biomet, Inc. was the Global Medical Products & Device 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. Biomet, Inc., headquartered in Warsaw, Indiana, is a global manufacturer of orthopedic products and is among the leaders in the U.S. reconstructive market. A private equity consortium, consisting of the Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts and TPG, acquired Biomet for approximately $11.6 billion in July 2007. BIOMET INC: S&P Assigns 'B+' Rating on $500MM Subordinated Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned Warsaw, Ind.-based medical products manufacturer Biomet Inc.'s $500 million senior subordinated notes maturing 2020 its 'B-' issue-level rating (two notches below the 'B+' corporate credit rating on the company). "We also assigned this debt a recovery rating of '6', indicating our expectation of negligible recovery (0 to 10%) for noteholders in the event of a payment default," S&P said. "In addition, our 'B-' rating on the company's 6.5% senior unsecured notes following its proposed $825 million add-on to the issue remains unchanged. The recovery rating remains unchanged at '6'," S&P said. "Market conditions will determine the coupon on the senior subordinated notes. The senior subordinated notes will rank equally with the company's existing and future senior subordinated indebtedness, while the senior unsecured notes will rank equally with the company's existing and future senior unsecured indebtedness. We expect proceeds to fund the purchase of all of the company's 10% senior notes maturing 2017 and up to $500 million of the 11.625% senior subordinated notes maturing 2017. We do not expect the offering to meaningfully alter Biomet's outstanding debt, recovery prospects, or credit metrics, which include pro forma total adjusted debt to EBITDA of roughly 6x. Moreover, we believe debt leverage will remain consistent with the company's 'highly leveraged' financial risk profile (partially defined as adjusted debt to EBITDA of more than 5x)," S&P said. "The corporate credit rating on Biomet is 'B+' and the rating outlook is stable. The 'B+' rating reflects the company's 'satisfactory' business risk profile and 'highly leveraged' financial risk profile, according to our criteria. Biomet's satisfactory business risk profile reflects pricing pressure and the company's somewhat narrow focus in the orthopedic industry, in addition to the relatively stable nature of its industry, Biomet's relatively full orthopedic product offerings, and favorable long-term volume trends. The financial risk profile and corporate credit rating reflect our expectation for minimal debt reduction. Our fiscal 2013 forecast for adjusted funds from operations (FFO) to total debt is between 5% and 10%, well within the less-than-12% guideline for a 'highly leveraged' financial risk profile. In our opinion, this key debt protection measure will not improve because of our expectation of modest revenue growth and pricing pressure that will constrain EBITDA expansion and significant improvements in cash flow in fiscal 2013," S&P said. "Fiscal 2012 revenue growth of 3% in constant currency was consistent with our expectations. Constant-currency revenue growth improved to 5% in the May 2012 quarter, which we believe reflects improved industry growth and some market share gains for Biomet, likely related to the launch of new products and the near completion of the trend away from metal-on-metal hips. We believe revenue growth will remain in the low- to mid-single digits in fiscal 2013, slightly above our expectations for the industry. We believe EBITDA margins, including our usual adjustments, could remain relatively flat (excluding the impact of the Affordable Care Act 2.3% medical device tax), despite ongoing pricing pressures. We expect debt leverage to remain relatively flat in fiscal 2013," S&P said. RATINGS LIST Biomet Inc. Corporate Credit Rating B+/Stable/-- $1.825B 6.5% sr unsecd nts due 2020 B- Recovery Rating 6 New Rating Biomet Inc. $500M sr sub nts due 2020 B- Recovery Rating 6 BLAST ENERGY: Changes Trading Symbol to "PEDO" ---------------------------------------------- PEDEVCO Corp., d/b/a Pacific Energy Development, announced that its trading symbol on the Over-The-Counter Bulletin Board changes from "BESV" to "PEDO". The symbol change is occurring in connection with PEDEVCO's July 27, 2012, name change from Blast Energy Services, Inc., to PEDEVCO Corp., pursuant to the requirements of the Jan. 13, 2012, Agreement and Plan of Reorganization, by and between PEDEVCO, Blast Acquisition Corp., a wholly-owned Nevada subsidiary of PEDEVCO, and Pacific Energy Development Corp., a privately-held Nevada corporation, which Merger Agreement and transactions contemplated therein were also consummated on July 27, 2012. About Blast Energy Houston, Texas-based Blast Energy Services, Inc., is seeking to become an independent oil and gas producer with additional revenue potential from its applied fluid jetting technology. The Company plans to grow operations initially through the acquisition of oil producing properties and then eventually, to acquire oil and gas properties where its applied fluid jetting process could be used to increase the field production volumes and value of the properties in which it owns an interest. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, GBH CPAs, PC, in Houston, Texas, expressed substantial doubt about Blast Energy Services' ability to continue as a going concern. The independent auditors noted that Blast incurred a loss from continuing operations for 2011, and has an accumulated deficit at Dec. 31, 2011. The Company reported a net loss of $4.14 million for 2011, compared with a net loss of $1.51 million for 2010. The Company's balance sheet at March 31, 2012, showed $1.86 million in total assets, $3.98 million in total liabilities and a $2.11 million total stockholders' deficit. BRICKFIELD BUILDERS: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Brickfield Builders, Inc. 9945 Easthaven Houston, TX 77075 Tel: (713) 223-8400 Bankruptcy Case No.: 12-36894 Chapter 11 Petition Date: September 13, 2012 Court: U.S. Bankruptcy Court Southern District of Texas (Houston) Judge: Jeff Bohm Debtor's Counsel: Bennett G. Fisher, Esq. FISHER AND ASSOCIATES PC 909 Fannin Street, Suite 1800 Houston, TX 77010 Tel: (713) 223-8400 Fax: (713) 609-7766 E-mail: bgf@fisherlaw.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Howard Hosek, president BROADVIEW NETWORKS: Can Employ EY LLP as Independent Auditor ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized Broadview Networks Holdings, Inc., et al., to employ Ernst & Young LLP as independent auditor for the Debtors, nunc pro tunc to the Petition Date. EY LLP will provide these services: (a) The Core Audit Services under the Audit Engagement Letter, which include these services: i. Auditing and reporting on the consolidated financial statements of BVNH for the year ending Dec. 31, 2012; and ii. Reviewing BVNH's unaudited interim financial information before BVNH files its Form 10-Q as of and for the period ending Sept. 30, 2012. (b) The Non-Core Audit Services under the Audit Engagement Letter, which include these services: i. Other audit-related services outside the scope of the Core Audit Services, such as research and/or accounting consultation services related to periodic accounting consultations held with management and services associated with BVNH's reorganization filings, including, without limitation, services relating to incremental audit procedures regarding fresh start accounting and disclosures in interim and annual financial statements and procedures related to independence matters and Bankruptcy Court requirements, including any services required by bankruptcy employment and fee application requirements. With respect to the Core Audit Services, the fixed fee for the Core Audit Services has been pre-approved pursuant to Section 328(a) of the Bankruptcy Code and will not be reviewed under the standards of Section 330 of the Bankruptcy Code; provided that EY LLP will keep reasonably detailed time records for services of each of its professionals performing such services on a daily (rather than task) basis in half-hour increments and will submit, with its interim and final fee applications, together with the time record information, a narrative summary of services rendered and will identify each professional rendering services. As disclosed in the motion, EY LLP will charge the Debtors a fixed fee of $536,000 for all post-petition Core Audit Services provided. With respect to the Non-Core Audit Services, EY LLP will charge the Debtors, according to the following rate schedule: National Accounting Technical Partner $960 Partner $780 Senior Manager $680 Manager $540 Senior $440 Staff $250 To the best of the Debtors' knowledge: (a) EY LLP is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code; and (b) EY LLP does not hold or represent an interest adverse to the Debtors and their estates. About Broadview Networks Rye Brook, N.Y.-based Broadview Networks Holdings, Inc., is a communications and IT solutions provider to small and medium sized business ("SMB") and large business, or enterprise, customers nationwide, with a historical focus on markets across 10 states throughout the Northeast and Mid-Atlantic United States, including the major metropolitan markets of New York, Boston, Philadelphia, Baltimore and Washington, D.C. Broadview Networks and 27 affiliates on Aug. 22, 2012, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-13579) with a plan that will eliminate half of the debt under the Company's existing senior secured notes and lower interest expense by roughly $17 million annually. The Company's restructuring counsel is Willkie Farr & Gallagher LLP and its financial advisor is Evercore Group, L.L.C. Kurtzman Carson Consultants is the claims and notice agent. The restructuring counsel for the ad hoc group of noteholders is Dechert LLP and their financial advisor is FTI Consulting. BROADVIEW NETWORKS: Can Hire Bingham as Regulatory Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Broadview Networks Holdings, Inc., et al., to employ Bingham McCutchen LLP as special regulatory counsel for the Debtors, nunc pro tunc to the Petition Date. As reported in the TCR on Sept. 14, 2012, Bingham will provide advice regarding the Debtors' applications to regulatory authorities for approval of the transactions embodied in the Prepackaged Plan. The professionals who will be involved in providing services as special regulatory counsel to the Debtors have current standard hourly rates ranging between $390 and $890. Legal assistants that likely will assist in the chapter 11 cases have current standard hourly rates ranging between $200 and $300. To the best of the Debtors' knowledge, Bingham represents no adverse interest to the Debtors that would preclude Bingham from acting as counsel to the Debtors in matters relating to FCC and PUC regulatory issues, and that its employment will be in the best interests of the Debtors' estates. About Broadview Networks Rye Brook, N.Y.-based Broadview Networks Holdings, Inc., is a communications and IT solutions provider to small and medium sized business ("SMB") and large business, or enterprise, customers nationwide, with a historical focus on markets across 10 states throughout the Northeast and Mid-Atlantic United States, including the major metropolitan markets of New York, Boston, Philadelphia, Baltimore and Washington, D.C. Broadview Networks and 27 affiliates on Aug. 22, 2012, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-13579) with a plan that will eliminate half of the debt under the Company's existing senior secured notes and lower interest expense by roughly $17 million annually. The Company's restructuring counsel is Willkie Farr & Gallagher LLP and its financial advisor is Evercore Group, L.L.C. Kurtzman Carson Consultants is the claims and notice agent. The restructuring counsel for the ad hoc group of noteholders is Dechert LLP and their financial advisor is FTI Consulting. BROADVIEW NETWORKS: Can Employ KCC as Claims and Notice Agent ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Broadview Networks Holdings, Inc., et al., to employ Kurtzman Carson Consultants LLC to provide administrative bankruptcy services, and as Claims and Notice agent for the Debtors, nunc pro tunc to the Petition Date. The Debtors agree to pay KCC for its services, expenses and supplies at the rates or prices set by CC, and in effect as of the date of the Agreement in accordance with the KCC Fee Structure. About Broadview Networks Rye Brook, N.Y.-based Broadview Networks Holdings, Inc., is a communications and IT solutions provider to small and medium sized business ("SMB") and large business, or enterprise, customers nationwide, with a historical focus on markets across 10 states throughout the Northeast and Mid-Atlantic United States, including the major metropolitan markets of New York, Boston, Philadelphia, Baltimore and Washington, D.C. Broadview Networks and 27 affiliates on Aug. 22, 2012, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-13579) with a plan that will eliminate half of the debt under the Company's existing senior secured notes and lower interest expense by roughly $17 million annually. The Company's restructuring counsel is Willkie Farr & Gallagher LLP and its financial advisor is Evercore Group, L.L.C. Kurtzman Carson Consultants is the claims and notice agent. The restructuring counsel for the ad hoc group of noteholders is Dechert LLP and their financial advisor is FTI Consulting. BROADVIEW NETWORKS: Can Employ Evercore as Investment Banker ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized Broadview Networks Holdings, Inc., et al., to employ Evercore Group LLC as investment banker and financial advisor for the Debtors, nunc pro tunc to the Petition Date. As compensation for the services rendered by Evercore, the Debtors agree to pay Evercore a monthly fee of $150,000; a $3.2 million restructuring fee, payable upon consummation of any Restructuring; and a Sale fee equal to the sum of (a) 0.95% of the Aggregate Consideration with respect to such Sale, up to and including Aggregate Consideration of $340 million, plus (b) 5.0% of the Aggregate Consideration with respect to such Sale greater than $340 million. About Broadview Networks Rye Brook, N.Y.-based Broadview Networks Holdings, Inc., is a communications and IT solutions provider to small and medium sized business ("SMB") and large business, or enterprise, customers nationwide, with a historical focus on markets across 10 states throughout the Northeast and Mid-Atlantic United States, including the major metropolitan markets of New York, Boston, Philadelphia, Baltimore and Washington, D.C. Broadview Networks and 27 affiliates on Aug. 22, 2012, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-13579) with a plan that will eliminate half of the debt under the Company's existing senior secured notes and lower interest expense by roughly $17 million annually. The Company's restructuring counsel is Willkie Farr & Gallagher LLP and its financial advisor is Evercore Group, L.L.C. Kurtzman Carson Consultants is the claims and notice agent. The restructuring counsel for the ad hoc group of noteholders is Dechert LLP and their financial advisor is FTI Consulting. BROADVIEW NETWORKS: Can Employ WF&G as Bankruptcy Counsel --------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Broadview Networks Holdings, Inc., et al., to employ Willkie Farr & Gallagher LLP under a general retainer as bankruptcy counsel to the Debtors, nunc pro tunc to the Petition Date. The WF&G attorneys that are likely to represent the Debtors in these cases have current standard hourly rates ranging between $400 and $1,090. The paralegals that likely will assist the attorneys who will represent the Debtors have current standard hourly rates ranging between $120 and $310. About Broadview Networks Rye Brook, N.Y.-based Broadview Networks Holdings, Inc., is a communications and IT solutions provider to small and medium sized business ("SMB") and large business, or enterprise, customers nationwide, with a historical focus on markets across 10 states throughout the Northeast and Mid-Atlantic United States, including the major metropolitan markets of New York, Boston, Philadelphia, Baltimore and Washington, D.C. Broadview Networks and 27 affiliates on Aug. 22, 2012, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-13579) with a plan that will eliminate half of the debt under the Company's existing senior secured notes and lower interest expense by roughly $17 million annually. The Company's restructuring counsel is Willkie Farr & Gallagher LLP and its financial advisor is Evercore Group, L.L.C. Kurtzman Carson Consultants is the claims and notice agent. The restructuring counsel for the ad hoc group of noteholders is Dechert LLP and their financial advisor is FTI Consulting. BROADVIEW NETWORKS: Schedules of Assets & Debts Due Oct. 21 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has granted Broadview Networks Holdings, Inc., et al., a 45 day extension of the time to file the schedules of assets and liabilities and statements of financial affairs, which will provide the Debtors with a total of 60 days after the Petition Date to file Schedules and Statements. The requirement under Section 521 of the Bankruptcy Code and Bankruptcy Rule 1007(c) to file Schedules and Statements will be permanently waived upon confirmation of the Prepackaged Plan; provided that such confirmation occurs within 60 days after the Petition Date. About Broadview Networks Rye Brook, N.Y.-based Broadview Networks Holdings, Inc., is a communications and IT solutions provider to small and medium sized business ("SMB") and large business, or enterprise, customers nationwide, with a historical focus on markets across 10 states throughout the Northeast and Mid-Atlantic United States, including the major metropolitan markets of New York, Boston, Philadelphia, Baltimore and Washington, D.C. Broadview Networks and 27 affiliates on Aug. 22, 2012, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-13579) with a plan that will eliminate half of the debt under the Company's existing senior secured notes and lower interest expense by roughly $17 million annually. The Company's restructuring counsel is Willkie Farr & Gallagher LLP and its financial advisor is Evercore Group, L.L.C. Kurtzman Carson Consultants is the claims and notice agent. The restructuring counsel for the ad hoc group of noteholders is Dechert LLP and their financial advisor is FTI Consulting. CDC CORP: Proposes Harshman Phillips as Tax Accountants ------------------------------------------------------- CDC Corporation asks the U.S. Bankruptcy Court for the Northern District of Georgia for permission to employ Harshman Phillips & Company, LLC as special tax accountants for matters relating to plan implementation and reporting requirements. Harshman Phillips will render these services: a. tax advice in connection with the transactions contemplated by the Joint Plan; b. tax advice in connection with implementation of the Joint Plan; c. tax reporting advice in connection with the establishment of the Liquidation Trust under the Joint Plan; and d. other appropriate specialized tax accounting services for Debtor. William C. Harshman, C.P.A., am a managing member of the firm, tells the Court that the hourly rates of the firm's personnel are: Partner $335 Manager $235 Para-Professional/Admin $50 To the best of Debtor's knowledge, the Harshman Phillips firm represents no interest adverse to Debtor or the estate in the matters upon which it is to be engaged. About CDC Corp Based in Atlanta, CDC Corp. (Nasdaq: CHINA) -- http://www.cdccorporation.net/-- is the parent company of CDC Software (Nasdaq: CDCS). CDC Software is based dually in Shanghai, China, and Atlanta and produces enterprise software applications, IT consulting services, outsourced applications development and IT staffing. The company's owners include Asia Pacific Online Ltd., Xinhua News Agency and Evolution Capital Management. CDC Corp., doing business as Chinadotcom, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011. James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA, in Atlanta, Georgia, serves as counsel. Moelis & Company LLC serves as its financial advisor and investment banker. Marcus A. Watson at Finley Colmer and Company serves as chief restructuring officer. The Debtor estimated assets and debts at US$100 million to US$500 million as of the Chapter 11 filing. The Official Committee of Equity Security Holders of CDC Corp. is represented by Troutman Sanders. The Committee tapped Morgan Joseph TriArtisan LLC as its financial advisor. The stock of CDC Software Corp. was sold for $249.8 million to an affiliate of Vista Equity Holdings. The Debtor won a bankruptcy judge's approval of a Chapter 11 plan under which shareholders are slated to receive as much as $6.10 a share. On July 3, 2012, the Debtor and the Official Committee of Equity Security Holders filed their First Amended Joint Plan of Reorganization for CDC Corporation that provides for the sale of all of the Debtor's assets, for the benefit of the Debtor's creditors and equity interest holders. Under the Plan, the Debtor's chief restructuring officer, Marc Watson, will act as the disbursing agent and reserve from the sale proceeds sufficient funds to pay all Allowed Claims in full, plus interest, that remain unpaid. CHAMPION INDUSTRIES: Fifth Third Forbearance to Expire Oct. 15 -------------------------------------------------------------- Fifth Third Bank, as administrative agent for lenders under Champion's Credit Agreement dated Sept. 14, 2007, as amended, entered into a Second Amended and Restated Limited Forbearance Agreement and Fifth Amendment to Credit Agreement dated Sept. 12, 2012, with Champion Industries, Inc., all its subsidiaries and Marshall T. Reynolds. The Agreement provides, among other things, that during a forbearance period commencing on Aug. 16, 2012, and ending on Oct. 15, 2012, the Lenders are willing to temporarily forbear exercising certain rights and remedies available to them, including acceleration of the obligations or enforcement of any of the liens provided for in the Credit Agreement. Champion acknowledged in the Forbearance Agreement that as a result of the existing defaults, the Lenders are entitled to decline to provide further credit to it, to terminate their loan commitments, to accelerate the outstanding loans, and to enforce their liens. Champion also agrees to the terms of a debt restructuring term sheet acceptable to Administrative Agent on or before Sept. 15, 2012. Champion is in discussions with the Administrative Agent regarding the restructuring debt term sheet but has not yet agreed to same. The Forbearance Agreement provides that the credit commitment under the Credit Agreement is $13,000,000 and provides for a $1,450,000 reserve against the Credit Agreement borrowing base. Champion is required to pay the Administrative Agent a nonrefundable forbearance fee of 0.10% upon execution of the Forbearance Agreement. At Sept. 12, 2012, the outstanding principal balance of Champion's obligations under the Credit Agreement totaled approximately $38.7 million. A copy of the Amended Forbearance Agreement is available at: http://is.gd/w9y66J About Champion Industries Champion Industries, Inc., is a commercial printer, business forms manufacturer and office products and office furniture supplier in regional markets in the United States. The Company also publishes The Herald-Dispatch daily newspaper in Huntington, WV. The Company's sales force sells printing services, business forms management services, office products, office furniture and newspaper advertising. Its subsidiaries include Interform Corporation, Blue Ridge, Champion Publishing, Inc., The Dallas Printing, The Bourque Printing, The Capitol, and The Herald- Dispatch. The Company reported a net loss of $3.97 million for the year ended Oct. 31, 2011, compared with net income of $488,134 during the prior year. The Company's balance sheet at July 31, 2012, showed $51.21 million in total assets, $51.98 million in total liabilities, and a $767,157 total shareholders' deficit. CHARLIE MCGLAMRY: Hearing on Exclusivity Extension Set for Oct. 2 ----------------------------------------------------------------- Charlie N. Mcglamry, et al., the U.S. Bankruptcy Court for Middle District of Georgia will convene a hearing on Oct. 2, 2012, at 10 a.m., to consider Charlie N. McGlamry's request for exclusivity extensions. Objections, if any, are due Sept. 25, 2012. The Debtors requested that the Court extend their exclusive periods to file and solicit acceptances for the proposed plans of reorganization until Dec. 5, 2012, and Feb. 4, 2013, respectively. According to the Debtors, they needed more time to prepare a financial plan that will form the basis of their Chapter 11 Plans. About Charlie N. McGlamry Centerville, Georgia-based real estate developer Charlie N. McGlamry filed a petition for Chapter 11 protection, along with his 14 companies, in Macon, Georgia on May 9, 2012. Over the past 44 years, Mr. McGlamry has managed to successfully develop numerous real estate developments in and around Houston County, Georgia. Mr. McGlamry continues to operate his real estate development business through sole proprietorship McGlamry Properties -- http://www.mcglamryproperties.com-- and USA Land Development Inc. Mr. McGlamry individually owns, through his sole proprietorship, approximately, 74 acres of undeveloped commercial property at the intersection of Russell Parkway and Corder Road in Houston County, Georgia. Mr. McGlamry established a number of single member limited liability companies and sole shareholder corporations to own and develop specific tracts of land. Mr. McGlamry and his affiliated companies sought joint administration of their Chapter 11 cases and have Mr. McGlamry's as the lead case (Bankr. M.D. Ga. Case No. 12-51197). Judge James P. Smith oversees the case. Cohen Pollock Merlin & Small, PC, serves as the Debtors' Chapter 11 counsel. Nichols, Cauley & Associates, LLC, serves as their accountant. Mr. McGlamry, as sole shareholder or member, signed Chapter 11 petitions for USA Land Development (Case No. 12-51198); Barrington Hall Development Corp. (12-51199); Bear Branch LLC; By- Pass/Courthouse LLC (12-51201); Chinaberry Place, LLC (12-51202); Eagle Springs LLC (12-51203); Elmdale Development, LLC (12-51204); Gurr/Kings Chapel Road, LLC (12-51205); Jaros Development LLC (12-51206); Lake Joy Development, LLC (12-51207); Old Hawkinsville Road, LLC (12-51208); South Houston Development, LLC (12-51209); The Villages at Nunn Farms, LLC (12-51210); and Houston-Peach Investments LLC (12-51212). Mr. McGlamry estimated up to $50 million in assets and up to $100 million in liabilities in his Chapter 11 filing. The Debtors tapped Cohen Pollock Merlin & Small, PC, as bankruptcy counsel. The proposed plan contemplates the creation of a liquidating trust and the appointment as plan trustee of Ward Stone, Esq. The plan also provides that non-exempted assets of the Debtor will be transferred to a liquidating trust. The trustee also will have the power to pursue any causes of action provided for under the bankruptcy code or state law against third parties. CIRCLE STAR: Delays Form 10-Q for July 31 Quarter for Review ------------------------------------------------------------ Circle Star Energy Corp. notified the U.S. Securities and Exchange Commission that it continues to finalize the financial statements to be presented in its quarterly report on Form 10-Q for the period ended July 31, 2012. The Company said its independent accountant at Consolidated Asset Management Limited and auditor, Hein & Associates LLP, require additional time to complete their review of the Company's financial statements. The Company is working diligently to finalize the review and anticipates filing within the extended filing period, pursuant to Rule 12b-25. About Circle Star Houston, Tex.-based Circle Star Energy Corp. owns royalty, leasehold, operating, net revenue, net profit, reversionary and other mineral rights and interests in certain oil and gas properties in Texas. The Company's properties are in Crane, Scurry, Victoria, Dimmit, Zavala, Grimes, Madison, Robertson, Fayette, and Lee Counties. The Company reported a net loss of $11.07 million on $942,150 of total revenues for the year ended April 30, 2012, compared with a net loss of $31,718 on $0 of total revenues during the prior fiscal year. The Company's balance sheet at April 30, 2012, showed $7.55 million in total assets, $5.79 million in total liabilities, and $1.75 million in total stockholders' equity. Hein & Associates LLP, in Dallas, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and has a working capital deficit which raise substantial doubt about the Company's ability to continue as a going concern. CITIZENS CORP: FiData Can Employ Harwell Howard as Counsel ---------------------------------------------------------- Judge Marian F. Harrison of the U.S. Bankruptcy Court for the Middle District of Tennessee has authorized debtor Financial Data Technology Corporation to employ Harwell Howard Hyne Gabbert & Manner, P.C. as its counsel. To the best of the Debtor's knowledge, H3GM is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. As reported in the Troubled Company Reporter on June 13, 2012, Judge Harrison authorized Gary M. Murphey, the trustee in the Chapter 11 case of Citizens Corporation, to employ H3GM, as his legal counsel, effective as of March 19, 2012. Franklin, Tennessee-based Citizens Corp. operates a mortgage brokerage business. Citizens Corp. filed for Chapter 11 bankruptcy (Bankr. M.D. Tenn. Case No. 11-11792) on Nov. 28, 2011. Judge George C. Paine, II, presides over the case. The Debtor employed Robert J. Mendes, Esq., at MGLAW, PLLC, as its counsel. Citizens listed assets and liabilities showing property worth $40.1 million and debt of $17.8 million. Lenders Tennessee Commerce Bank is represented by David W. Houston, IV, Esq., at Burr & Forman LLP. Citizens filed a reorganization plan offering to pay all creditors in full over time, including Tennessee Commerce Bank and other secured lenders owed $17.3 million. Unsecured creditors, owed a combined $81,000, would be paid off in equal installments over five years. On Feb. 27, 2012, the Court granted the request of lender Legends Bank for appointment of a Chapter 11 trustee. The Court held that an independent person must review many of the transactions involving CEO Ed Lowery, and its wholly owned subsidiary, Financial Data Technology Corporation. Marion Ed Lowery, a former owner of Peoples State Bank of Commerce of Nolensville and various other entities, is the subject of federal investigation and his ventures have ties throughout the Middle Tennessee banking community. He signed the Chapter 11 petition. COMMERCIAL MANAGEMENT: Case Trustee Seeks to Use Rent Til January ----------------------------------------------------------------- Brian F. Leonard, the Chapter 11 trustee of Commercial Management, LLC, filed late last month a motion to use rents generated by the Debtor's Buena Vista Apartments -- which rents constitute as cash collateral of U.S. Bank, National Association. The Chapter 11 Trustee intends to use the cash collateral to continue the Debtor's operations and to prosecute the plan of reorganization that has been filed in the case. The Trustee requests authorization to use cash collateral through Jan. 31, 2013. The Chapter 11 Trustee claims that U.S. Bank is adequately protected by th continued maintenance of the Debtor's property, the replacement of rentals received, and the equity cushion in the real estate on which U.S. Bank holds a mortgage, which equity cushion is estimated to be approximately $7 million to $8 million. The Chapter 11 Trustee says it must have access to the cash collateral to pay normal and customary operating expenses, as well as professional fees that are anticipated to be incurred in connection with confirmation proceedings in the filed Plan. The Trustee understands that USB will file a Plan of Reorganization in this case, and that the hearings on confirmation may be contested hearings. The Trustee estimates professional fees to be approximately $75,000 to $100,000. In addition, expert witnesses, which the Trustee estimates will cost an additional $20,000 to $60,000. The Chapter 11 Trustee also seeks authorization for extraordinary expenses related to litigation against a former tenant which the Debtor believes caused a fire in one of the Buena Vista units. The tenant has renter's insurance of $300,000 and the Trustee seeks authorization to hire David Lutz as special counsel to prosecute that claim. The Trustee believes the claim is meritorious and should be successful. The Trustee only seeks authorization to use $20,000 of cash collateral for the initial stages of that lawsuit, but believes ultimately the legal fees in that action may amount to $60,000. About Commercial Management Commercial Management, LLC, owns a 410-unit apartment complex located in Richfield, MN, under the trade name of Buena Vista Apartments. Buena Vista is 99% occupied and has approximately eight full time employees, and a small number of part-time employees. Buena Vista is managed by The Wirth Company. The appraised value of Buena Vista is $28 million. As of the Petition Date, secured creditor U.S. Bank claims the Debtor owes it $20.3 million. Commercial Management filed a Chapter 11 petition (Bankr. D. Minn. Case No. 12-42676) in its hometown in Minneapolis on May 2, 2012. Related entities that have pending bankruptcy cases are Jeffrey J. Wirth (Case No. 12-42368), Palmer Lake Plaza, LLC (Case No. 12-42266), Tomah Hospitality, LLC (Case No. 12-10894), and Tomah Hotel Properties, LLC (Case No. 12-10895). Judge Nancy C. Dreher presides over the case. Commercial Management tapped Neal L. Wolf and the law firm of Neal Wolf & Associates, LLC as bankruptcy counsel. The Debtor also hired the Law Offices of Neil P. Thompson, in Minneapolis, as local counsel. Brian F. Leonard, the Chapter 11 trustee, obtained approval from the U.S. Bankruptcy Court to employ David A. Lutz as special counsel. The Chapter 11 trustee's bankruptcy counsel can be reached at: Matthew R. Burton, Esq. LEONARD, O'BRIEN, SPENCER GALE & SAYRE, LTD. 100 South 5th Street, Suite 2500 Minneapolis, MN 55402 Tel: (612) 332-1030 COMMUNITY HOME: Seeks to Extend Plan Filing Period to Jan. 31 ------------------------------------------------------------- Community Home Financial Services, Inc., asks the Bankruptcy Court to extend the initial 120-day exclusive plan filing period until Jan. 31, 2013, and the 180-day plan solicitation period until March 31, 2013. Derek A. Henderson, Esq., representing the Debtor, submits there are issues regarding secured claims that are being litigated between parties. There is a mediation that is being scheduled. A plan cannot be proposed until after issues are resolved through litigation and/or mediation. Community Home Financial Services, Inc., filed a Chapter 11 petition (Bankr. S.D. Miss. Case No. 12-01703) on May 23, 2012. Community Home Financial is a specialty finance company located in Jackson, Mississippi, providing contractors with financing for their customers. CHFS operates from one central location providing financing through its dealer network throughout 25 states, Alabama, Delaware, and Tennessee. The Debtor scheduled $44,890,581 in total assets and $30,270,271 in total liabilities. Judge Edward Ellington presides over the case. COMMUNITY HOME: Secured Creditors Want Chapter 11 Trustee --------------------------------------------------------- Secured creditors Edwards Family Partnership LP (EFP) and Beher Holdings Trust (BHT) ask the bankruptcy Court for the appointment of a Chapter 11 trustee for the Debtor, Community Home Financial Services, Inc. Jim F. Spencer, Jr., Esq., at Watkins & Eager PLLC, representing the secured creditors, tells the Court that EFP and BHT have invested tens of millions of dollars in thousands of mortgage loans managed by Community Home Financial Services. The transactions are structured two ways: 1) by BHT/EFP lendingmoney to CHFS enabling CHFS to purchase mortgage loan portfolios upon which CHFS granted BHT/EFP a perfected security interest; and 2) by BHT/EFP directly purchasing mortgage loan portfolios under joint venture agreements with CHFS. In both scenarios, CHFS serviced the mortgages and collected the monthly payments from mortgagor borrowers. Under the loan documents and the joint venture agreements, Mr. Spencer states that CHFS was required to forward the mortgage proceeds to BHT/EFP; however, CHFS failed to do so. Specifically, beginning in January of 2011, CHFS withheld millions of dollars from BHT and EFP which necessitated BHT and EFP filing an emergency motion to appoint a receiver for CHFS. On May 23, 2102, after two days of trial before U.S. District Judge Carlton Reeves, at which Butch Dickson the principal of CHFS testified that he had taken millions of dollars in loan payments from both the loan transaction and the joint ventures and diverted the payments for other purposes, CHFS filed bankruptcy. Post bankruptcy, Mr. Spencer argues that CHFS has demonstrated that it cannot be trusted to run its business as a debtor in possession. It continues to play "hide the ball" with its collections on the loans it is servicing on a post petition basis. It has failed to explain what happened to thousands of dollars it had two days before bankruptcy, which the district court enjoined it from spending. More importantly, CHFS is servicing loans without a license, which is prohibited by Mississippi law. Mr. Spencer argues a trustee is necessary to protect the assets of the estate from further dissipation, and that a trustee is in the best interest of all creditors. Mr. Spencer notes that the Debtor's current management is the same management that operated CHFS on a pre-petition basis. Its management has engaged in pre- and post- petition misconduct which justifies the appointment of a Chapter 11 trustee. Mr. Spencer submits that CHFS's pre-petition misconduct alone justifies the appointment of a trustee. CHFS admits that it has diverted $2.3 million of BHT and EFP's cash collateral to insiders, most of which was diverted less than 10 days prior to filing this bankruptcy case. CHFS describes this diversion of funds as "loans;" however, competent management does not divert funds from its creditor and make loans to insiders at a time when it has been sued by that creditor for non-payment of promissory notes totaling in excess of $18 million. Competent management does not make "loans" to insiders two days before a scheduled trial on a motion to appoint a receiver over the company. Post- petition, CHFS has not compiled with this Court's interim order that was designed to protect not only CHFS's single largest creditor but all other creditors. When considered together, they demonstrate that the appointment of a Chapter 11 trustee is required. Edwards Family Partnership LP and Beher Holdings Trust are represented by: Jim F. Spencer, Jr., Esq. WATKINS & EAGER PLLC Post Office Box 650 Jackson, Miss. 39205-0650 Tel: (601) 965-1900 Fax: (601) 965-1901 E-mail: jspencer@watkinseager.com Community Home Financial Services, Inc., filed a Chapter 11 petition (Bankr. S.D. Miss. Case No. 12-01703) on May 23, 2012. Community Home Financial is a specialty finance company located in Jackson, Mississippi, providing contractors with financing for their customers. CHFS operates from one central location providing financing through its dealer network throughout 25 states, Alabama, Delaware, and Tennessee. The Debtor scheduled $44,890,581 in total assets and $30,270,271 in total liabilities. Judge Edward Ellington presides over the case. COMMUNITY HOME: Files Amended Schedules of Assets & Liabilities --------------------------------------------------------------- Community Home Financial Services, Inc., filed with the Bankruptcy Court for the Southern District of Mississippi its amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $57,000 B. Personal Property $46,228,699 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $30,271,339 ----------- ----------- TOTAL $46,285,699 $30,271,339 A copy of the schedules is available at: http://bankrupt.com/misc/COMMUNITY_HOME_sal_amended.pdf Community Home Financial Services, Inc., filed a Chapter 11 petition (Bankr. S.D. Miss. Case No. 12-01703) on May 23, 2012. Community Home Financial is a specialty finance company located in Jackson, Mississippi, providing contractors with financing for their customers. CHFS operates from one central location providing financing through its dealer network throughout 25 states, Alabama, Delaware, and Tennessee. The Debtor scheduled $44,890,581 in total assets and $30,270,271 in total liabilities. Judge Edward Ellington presides over the case. COMMUNITY HOME: Challenging Edwards, Beher Claims ------------------------------------------------- Community Home Financial Services, Inc., asks the Bankruptcy Court to amend the interim order on Edwards Family Partnership, LP and Beher Holdings Trust's motion to prohibit use of cash collateral. The interim order allowed (i) monthly payments to EFP/BHT on the Home Improvement Loans, and (ii) the establishment of escrow accounts for the six portfolio loans. The Interim Order allowed the parties to reserve all rights, claims and defenses. The Order is scheduled to expire on Sept. 30, 2012. Derek A. Henderson, Esq., representing the Debtor, informs the Court that on Aug. 24, 2012, CHFS filed an adversary proceeding styled Community Home Financial Services, Inc. and William D. Dickson v. Edwards Family Partnership, LP and Beher Holdings Trust, Adversary Proceeding No. 12-00091. The lawsuit challenges the extent and validity of claims of EFP and/or BHT regarding the Home Improvement Loans. The Debtor believes that the claims of EFP and/or BHT are not valid. If that determination is made and EFT and/or BHT do not have an allowed claim, then EFP and/or BHT does not have a lien pursuant to 11 U.S.C. Section 506(d). Further, the Debtor believes that even if EFP and/or BHT do have an allowed claim, any such claim is not secured by a perfected lien. If the Debtor is correct in either case, EFP and/or BHT are not entitled to adequate protection payments, Mr. Henderson argues. CHFS requests the Court to amend the Interim Order as follows: A. extend the Order until a determination has been made as to the extent and validity of liens and claims as to EFP and/or BHT; B. allow the Debtor to continue paying funds to escrow in regard to the six portfolio loans; C. allow the Debtor to pay on the 10th day of each month an amount equal to all principal payments collected on any loans for the previous month from the Home Improvement Loans to a Home Improvement Escrow Account to be established. A representative of EFP will have the right to view the balance of the escrow account via internet access; and D. EFP, BHT and the Debtor expressly reserve all claims, defenses and objections any party may have as to the others respective rights in the Home Improvement Loan Transaction, EFP joint ventures and BHT join venture and the entry of an order shall not be construed as a finding or adjudication of any facts or claims, defenses and objections. Community Home Financial Services, Inc., filed a Chapter 11 petition (Bankr. S.D. Miss. Case No. 12-01703) on May 23, 2012. Community Home Financial is a specialty finance company located in Jackson, Mississippi, providing contractors with financing for their customers. CHFS operates from one central location providing financing through its dealer network throughout 25 states, Alabama, Delaware, and Tennessee. The Debtor scheduled $44,890,581 in total assets and $30,270,271 in total liabilities. Judge Edward Ellington presides over the case. CONTINENTAL COIN: Ch. 11 Trustee Liable for Virtue's Legal Fees --------------------------------------------------------------- Bankruptcy Judge Geraldine Mund ruled that Nancy Zamora, the Chapter 11 Trustee for Continental Coin Corporation, is liable to Rodger Virtue for fees and costs that he has expended in the sum of $19,226.95 and to Hill, Farrer & Burrill LLP for fees and costs that it has expended in the sum of $7,313.44. No award is made directly to Waxler Carner & Brodsky LLP since that is covered by the award to Hill, Farrer & Burrill. The parties are embroiled in a lawsuit. On Dec. 16, 2011, the Chapter 11 Trustee filed a counter-claim against Mr. Virtue and his attorney Daniel J. McCarthy, and the law firm of Hill, Farrer & Burrill. The counter-defendants answered and then filed a motion to strike and for judgment on the pleadings. On April 30, 2012, the court entered its memorandum of opinion and order, dismissing claims 1, 2, 3, and 10 with prejudice and striking claims 4 through 9 with prejudice. The striking of claims 4-9 was pursuant to the anti-SLAPP statute, Cal. Code of Civ. Proc. Sec. 425.16, which also provides that the prevailing party would be awarded its attorneys' fees and costs. Mr. Virtue was ordered to file his motion for attorneys' fees and costs within 30 days of the entry of the order. On May 30, 2012 the counter-defendants filed their joint motion for attorneys' fees seeking $20,633.41. Hill Farrer was represented in part by Waxler Carner Brodsky, which billed them $5,047.50 for work on the anti-SLAPP motion. Hill Farrer sought $10,454.91 in fees and costs for its representation of Mr. Virtue (but not of itself). This was opposed by Ms. Zamora, who had filed an appeal on May 14, 2012. The cases before the Court are, Rodger Virtue Plaintiff(s), v. Hill Farrer & Burrill LLP, Liberty Mutual Insurance Company, Daniel J. McCarthy, Nancy Zamora, Zamora & Hoffmeier, APC Defendant(s); NANCY HOFFMEIER ZAMORA, Solely in her capacity as Chapter 11 Trustee for Continental Coin Corporation, Counter- Claimant and Plaintiff v. RODGER VIRTUE, an individual, Counter- Defendants, And DANIEL J. McCARTHY, an individual, HILL, FARRER & BURRILL LLP, a California limited liability partnership, and DOES 1-20, Defendants, Adv. Proc. No. 1:07-ap-01291-GM (Bankr. C.D. Calif.). A copy of the Ccourt's Sept. 13, 2012 Memorandum of Opinion is available at http://is.gd/owXOm2from Leagle.com. Continental Coin Corporation filed a voluntary Chapter 11 petition (Bankr. C.D. Calif. Case No. 00-15821) on July 19, 2000. The Debtor owned and operated a retail store that sold precious gems, jewelry, numismatic coins, gold bullion, precious metals and collectibles, and exchanged foreign currency. It also owned a mint facility that made decorative and commemorative coins, refined precious metals, and subleased office and retail space to 18 subtenants. The Debtor owned the leases for the Retail Store, Mint, and office space. Nancy Hoffmeier Zamora was appointed as Chapter 11 trustee on Aug. 31, 2001. COUNTRYWIDE HOME: 5th Circ. Affirms Class Cert. in Loan Fee Suit --------------------------------------------------------------- Jake Simpson at Bankruptcy Law360 reports that the Fifth Circuit on Friday denied Countrywide Home Loans Inc.'s bid to overturn the certification of a class of borrowers who claim they were charged illegal fees, ruling that the bankruptcy judge had properly defined the class. Bankruptcy Law360 says the appeals court rejected the appeal by Countrywide, which had sought to overturn the bankruptcy court's July 2010 class certification order. The lender was sued in 2009 by a group of borrowers who claim that Countrywide threatened to foreclose on their homes if they did not pay additional fees. CRYOPORT INC: Shareholders Elect Three Directors to Board --------------------------------------------------------- CryoPort, Inc., held its 2012 annual meeting of stockholders on Sept. 13, 2012. At the Annual Meeting, the Company's stockholders elected Adam M. Michelin, Karen M. Muller and Stephen E. Wasserman to the Board of Directors to serve until the Company's 2013 Annual Meeting of Stockholders. The shareholders also ratified the Audit Committee's selection of KMJ Corbin & Company LLP as the Company's independent registered public accounting firm for the fiscal year ending March 31, 2013. In addition, the shareholders approved an amendment to the Company's 2011 Stock Incentive Plan to increase the number of shares of the Company's common stock available for issuance thereunder by 3,000,000 shares and to increase the annual limitation of the number of shares granted to a Covered Employee in any fiscal year by 250,000 shares. About CryoPort Inc. Headquartered in Lake Forest, Calif., CryoPort, Inc. (OTC BB: CYRXD) -- http://www.cryoport.com/-- provides innovative cold chain frozen shipping system dedicated to providing superior, affordable cryogenic shipping solutions that ensure the safety, status and temperature of high value, temperature sensitive materials. The Company has developed a line of cost-effective reusable cryogenic transport containers capable of transporting biological, environmental and other temperature sensitive materials at temperatures below 0-degree Celsius. The Company reported a net loss of $7.83 million for the year ended March 31, 2012, compared with a net loss of $6.15 million during the prior fiscal year. The Company's balance sheet at June 30, 2012, showed $4.23 million in total assets, $1.96 million in total liabilities and $2.26 million in total stockholders' equity. KMJ Corbin & Company LLP, in Costa Mesa, California, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended March 31, 2012. The independent auditors noted that the Company has incurred recurring operating losses and has had negative cash flows from operations since inception. Although the Company has working capital of $4,024,120 and cash & cash equivalents of $4,617,535 at March 31, 2012, management has estimated that cash on hand, which include proceeds from the offering received in the fourth quarter of fiscal 2012, will only be sufficient to allow the Company to continue its operations only into the fourth quarter of fiscal 2013. These matters raise substantial doubt about the Company's ability to continue as a going concern. DALLAS ROADSTER: Plan Promises to Pay Creditors in Full ------------------------------------------------------- Dallas Roadster and IEDA Enterprises filed a disclosure statement in support of its plan of reorganization dated Aug. 15, 2012. The Debtor contemplates that its operations will permit all creditors to be paid in full. Essentially, the plan of reorganization will enable the Debtor to preserve the value of its going-concern while permitting payment of its claims in an orderly manner. The Plan is based on Dallas Roadster continuing its operations largely as it has in the past. Although the business is currently able to leverage only a fraction of the capital it had available to it a year ago, it has been in this situation before and has experience in how to overcome these types of obstacles Dallas Roadster will implement its Plan by continuing operations as it has in the past and by resuming its efforts to acquire new floorplan financing. During the time this bankruptcy case has been pending, Dallas Roadster's operating flexibility has been greatly hampered. For instance, Texas Capital Bank has imposed restrictions on Dallas Roadster concerning its ability to sell and purchase vehicles that have not been consistent with profit maximization. In January and February 2012, Dallas Roadster liquidated approximately $2,000,000 worth of vehicles to placate Texas Capital Bank. By doing so, Dallas Roadster was able to reduce its debt burden, but also lost the ability to leverage the capital represented by those vehicles. The Plan contemplates that the onerous restrictions imposed by Texas Capital Bank will be removed, thus providing Dallas Roadster with a greater opportunity to return to its previous profitability than has been available to it while its Bankruptcy Case has been pending. Dallas Roadster is currently selling 24-30 vehicles per month and operating on a cash-on-delivery basis. Upon re-establishing a floor plan loan and relationships with third party financing sources, Dallas Roadster will be able to grow its business and revenues as it has in the past. The plan documents note that Dallas Roadster has been in this position before and there are few barriers to its management team in implementing a profitable growth strategy. Dallas Roadster's most recent monthly operating report identified assets with a value of $5,665,722. The balance of its secured liabilities was reported to be $1,896,827. Thus, with a secured debt to total assets ratio of approximately 34%, Dallas Roadster should have viable options for attracting future capital. The hearing on the disclosure statement is scheduled on Oct. 1, 2012, at 10:30 a.m. A copy of the disclosure statement is available for free at: http://bankrupt.com/misc/DALLAS_ROADSTER_ds.pdf About Dallas Roadster and IEDA Enterprises Dallas Roadster Ltd. owns and operates an auto dealership with locations in both Richardson and Plano, Texas. IEDA Enterprises, Inc., is the general partner of Roadster. Dallas Roadster and IEDA Enterprises filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases. J. Bennett White, P.C., replaced DeMarco Mitchell, PLLC, as the Debtors' bankruptcy counsel. Dallas Roadster estimated $10 million to $50 million in assets. The Debtors' assets were placed under the care of a receiver on Nov. 16, 2011, pursuant to a state court action by Texas Capital Bank, National Association. No trustee has been appointed in the Chapter 11 cases. DALLAS ROADSTER: J. Bennett White to Replace DeMarco as Counsel --------------------------------------------------------------- Dallas Roadster and IEDA Enterprises ask the Bankruptcy Court that an order be entered substituting J. Bennett White, P.C., for DeMarco Mitchell, PLLC, as the Debtors' bankruptcy counsel. As a result, DeMarco Mitchell will withdraw as the Debtors' counsel and DeMarco Mitchell will be excused from further representation of the Debtors in this proceeding. Michael S. Mitchell, Esq., and Robert T. DeMarco, Esq., at DeMarco-Mitchell, PLLC, served as the Debtors' bankruptcy counsel. The Debtors selected J. Bennett White, Esq., for the reason that he has considerable experience in bankruptcy representation and Debtors believe that he is well qualified to represent them as debtors-in-possession in this proceeding. The professional services of J. Bennett White, P.C., are to include: a. giving Debtors legal advice with respect to their powers and duties as debtors-in-possession in the continued operation of their business and management of their property; b. preparing necessary applications, answers, orders, pleadings, reports, and other legal papers; and c. performing all other legal services for Debtors as debtors-in-possession which may be necessary. J. Bennett White will undertake this representation at the hourly rate of $300 per hour. The rates of other attorneys in the Firm range from $175 per hour to $225 per hour. The terms of employment also include an initial fee deposit in the amount of $25,000 which is to be replenished whenever funds are withdrawn as interim compensation. To the best of the Debtors' knowledge, J. Bennett White, P.C., is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Dallas Roadster and IEDA Enterprises Dallas Roadster Ltd. owns and operates an auto dealership with locations in both Richardson and Plano, Texas. IEDA Enterprises, Inc., is the general partner of Roadster. Dallas Roadster and IEDA Enterprises filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases. Dallas Roadster estimated $10 million to $50 million in assets. The Debtors' assets were placed under the care of a receiver on Nov. 16, 2011, pursuant to a state court action by Texas Capital Bank, National Association. No trustee has been appointed in the Chapter 11 cases. DALLAS ROADSTER: Can Employ Robert Dohmeyer as Valuation Expert --------------------------------------------------------------- The Bankruptcy Court has authorized IEDA Enterprise, Inc., and Dallas Roadster, Limited, to employ Dohmeyer Valuation Corp. as Business Valuation Expert. DVC will be required to render these services to the Debtor: A. value the Debtors' business enterprise, including without limitation the used car dealership and the leasehold lots; B. perform an insolvency analyses; C. perform present value and/or discount rate analyses; D. perform such other valuation tasks deemed necessary by the Debtors during the course of these bankruptcy cases; E. provide expert testimony and any necessary reports or documentation during ay trial or hearing regarding any of the foregoing. Robert Dohmeyer will be the primary individual rendering the valuation services. DVC will charge a flat fee of $2,500 for the valuation of the Debtors' business enterprise, including the leasehold properties, as well as a present value/discount rate analyses which amount will be payable upon completion of those services. For all other services DVC will charge an hourly rate of $225, which will be sought through appropriate fee applications filed and subject to further Court approval. About Dallas Roadster and IEDA Enterprises Dallas Roadster Ltd. owns and operates an auto dealership with locations in both Richardson and Plano, Texas. IEDA Enterprises, Inc., is the general partner of Roadster. Dallas Roadster and IEDA Enterprises filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases. J. Bennett White, P.C., replaced DeMarco Mitchell, PLLC, as the Debtors' bankruptcy counsel. Dallas Roadster estimated $10 million to $50 million in assets. The Debtors' assets were placed under the care of a receiver on Nov. 16, 2011, pursuant to a state court action by Texas Capital Bank, National Association. No trustee has been appointed in the Chapter 11 cases. DALLAS ROADSTER: Asks Court to Lift Restrictions on Cash Use ------------------------------------------------------------ IEDA Enterprise, Inc., and Dallas Roadster, Limited, ask the Bankruptcy Court to modify the order issued on March 29, 2012, authorizing the use of Texas Capital Bank's cash collateral. Specifically, the Debtors seek modification of the Final Cash Collateral Order in the form of a finding that the equity cushion in Texas Capital Bank's collateral, along with specified monthly payments, provides adequate protection for any further use of cash collateral. J. Bennett White, Esq., proposed counsel to the Debtors, submits that there is insufficient basis for establishing restrictions on use of cash collateral. The Final Cash Collateral Order asserts the existence of two loan facilities in favor of Texas Capital Bank: the Vehicle Note and the Real Estate Note. The only loan balances currently owed Texas Capital Bank are the Real Estate Note and the DIP Loan. At present, the balance owed on the Real Estate Note is roughly $1.62 million and roughly $275,000 is owed on the DIP Loan. Texas Capital Bank's collateral includes, among other things, the Debtors' inventory, notes receivable, and real estate. The Final Cash Collateral Order compels the Debtors to maintain inventory with a value of at least $800,000 and notes receivable in the amount of at least $1.3 million. As of July 31, 2012, the Debtors' notes receivable were slightly more than $1.4 million and its inventory slightly more than $1 million. In addition, the real estate securing Texas Capital Bank's claims has a value in excess of $3 million. Therefore, Mr. White argues that the equity cushion provided by Texas Capital Bank's collateral represents sufficient adequate protection for the Debtors to have unencumbered use of their revenues. Moreover, the Final Cash Collateral Order further provides adequate protection to Texas Capital Bank by requiring payment on the Real Estate Note in the amount of $8,500 per month and on the DIP Loan in the amount of $41,000 per month. Given the adequate protection provided by the equity cushion in Texas Capital Bank's collateral, Mr. White notes that the Final Cash Collateral Order contains an unduly restrictive budget approval process. Moreover, the limitations on Debtors' expenditures are not necessary to adequately protect Texas Capital Bank's interest; therefore, those restrictions should be eliminated. Mr. White adds that the Debtors' permitted use of cash collateral should be modified to permit the payment of the fee deposit negotiated between Debtors and proposed new counsel, including monthly replenishment of that fee deposit. Also, the Debtors have previously sought the services of an appraiser and an accountant, neither of whom has been approved as a professional to be employed by the Debtors. Currently, motions for approval nunc pro tunc are being prepared for filing. Should the employment of the professionals be approved, applications for payment of fees will also be submitted. The Debtors wish to include the potential payments to these professionals in their proposed budgets so that any compensation approved by the Court may be paid promptly upon approval without the necessity of having to wait until a subsequent budget is submitted for approval. Texas Capital Bank Reponds Texas Capital Bank submits that the proposed new counsel desires to completely rewrite the terms of the Final Cash Collateral Order which was consented and agreed to by the parties and approved by the Court, and eliminate significant rights, remedies and protections granted to TCB. This unprecedented request, without any legal or factual support, cannot be allowed and should be denied. Kenneth Stohner, Jr., Esq., at Jackson Walker, LLP, representing Texas Capital Bank, points out that the proposed new counsel does not cite any statute, rule or case for authority to support the extraordinary relief sought and TCB believes none exists. According to Mr. Stohner, the Debtors deliberately and voluntarily entered into the Final Cash Collateral Order. There were protracted negotiations between the Debtors and TCB in arriving at the agreed-upon terms of the Final Cash Collateral Order, and after having accepted and received the full benefits thereunder, the Debtors now move the Court to modify such order to remove TCB's bargained-for rights, remedies and protections. These modifications would deprive TCB of the full benefit of its agreement approved by the Court. Texas Capital Bank is represented by: Kenneth Stohner, Jr., Esq. Heather M. Forrest, Esq. JACKSON WALKER, LLP Dallas, TX 75202 Tel: (214) 953-6000 Fax: (214) 953-5822 E-mail: kstohner@jw.com About Dallas Roadster and IEDA Enterprises Dallas Roadster Ltd. owns and operates an auto dealership with locations in both Richardson and Plano, Texas. IEDA Enterprises, Inc., is the general partner of Roadster. Dallas Roadster and IEDA Enterprises filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases. J. Bennett White, P.C., replaced DeMarco Mitchell, PLLC, as the Debtors' bankruptcy counsel. Dallas Roadster estimated $10 million to $50 million in assets. The Debtors' assets were placed under the care of a receiver on Nov. 16, 2011, pursuant to a state court action by Texas Capital Bank, National Association. No trustee has been appointed in the Chapter 11 cases. DANIEL PETERSON: Wash. Appeals Court Rules on Citibank Dispute -------------------------------------------------------------- Following the initiation of nonjudicial foreclosure proceedings against their property, Daniel and Kristi Peterson filed suit seeking to enjoin a trustee's sale and alleging various statutory and common law causes of action. The trial court dismissed the Petersons' claims against Mortgage Electronic Registration System, Inc. pursuant to CR 12(b)(6) and, in a separate order, dismissed the Petersons' claims against Citibank N.A., as trustee, and American Home Mortgage Servicing, Inc., pursuant to CR 12(c) based upon principles of issue preclusion. Because the Petersons' failed to allege the existence of facts establishing a violation by MERS of the Washington Consumer Protection Act (CPA), chapter 19.86 RCW, the Court of Appeals of Washington, Division One, affirmed the trial court's order on the CR 12(b)(6) motion. In addition, the Court of Appeals determined that the Petersons' initial notice of appeal was insufficient to permit appellate review of the CR 12(c) order and, moreover, that their filing of a second notice of appeal indicating an intent to appeal from that order was untimely. Accordingly, the Court of Appeals granted the motion of Citibank and AHMSI to dismiss the appeal of the trial court's CR 12(c) order. The appellate case is, DANIEL C. PETERSON and KRISTI J. PETERSON, husband and wife, Appellant, v. CITIBANK, N.A., AS TRUSTEE ON BEHALF OF HOLDERS OF THE AMERICAN HOME MORTGAGE ASSETS TRUST 2006-4, MORTGAGE BACKED PASS-THROUGH CERTIFICATES SERIES 2006-4; NORTHWEST TRUSTEE SERVICES, INC.; AMERICAN HOME MORTGAGE SERVICING, INC.; AMERICAN BROKERS CONDUIT; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; ALL PERSONS UNKNOWN, CLAIMING ANY VALID SUBSISTING INTEREST, AND RIGHT TO THE POSSESSION IN THE PROPERTY DESCRIBED IN THE COMPLAINT ADVERSE TO PLAINTIFFS' TITLE, OR ANY CLOUD ON PLAINTIFFS' TITLE THERETO; and DOES I-X, INCLUSIVE, Respondents, No. 67177-4-I (Wash. App. Ct.). A copy of the Appeals Court's Sept. 17, 2012 Opinion is available at http://is.gd/AX17Kifrom Leagle.com. Daniel C. Peterson, in Gig Harbor, Wash., filed for Chapter 11 bankruptcy (Bankr. W.D. Wash. Case No. 10-19218) on Aug. 5, 2010. Bankruptcy Judge Samuel J. Steiner oversees the case. Jeffrey B. Wells, Esq., in Seattle, serves as Mr. Peterson's counsel. Mr. Peterson scheduled $1,351,175 in assets and $3,288,776 in liabilities. A list of the Debtor's 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb10-19218.pdf DARLING INT'L: Moody's Upgrade CFR/PDR to 'Ba1'; Outlook Stable --------------------------------------------------------------- Moody's Investors Service upgraded Darling International Inc.'s Corporate Family and Probability of Default Ratings to Ba1 from Ba2, its revolving credit facility to Baa3 from Ba1, and its senior unsecured notes to Ba2 from Ba3. The outlook is stable. This action was based upon the significant improvement in the company's scale, credit metrics, and diversification of its business following the successful integration of Griffin International. The upgrade also reflects Moody's expectation that the company can effectively manage operating performance given its cost structure and pricing mechanisms that help mitigate its exposure to volatile commodity markets. The upgrade also reflect's Darling's very good liquidity position and Moody's expectation that management will maintain a conservative financial policy given the inherent cyclicality of its core business. Ratings upgraded: Darling International Inc. Corporate Family rating to Ba1 from Ba2 Probability of Default rating to Ba1 from Ba2 $415 million revolving credit facility expiring in 2015 to Baa3 (LGD 2, 25%) from Ba1 (LGD 2, 29%) $250 million senior unsecured notes due 2018 to Ba2 (LGD 5, 77%) from Ba3 (LGD 5, 80%) Rating affirmed: Speculative Grade Liquidity Rating, SGL -- 1 The outlook is stable The Ba1 Corporate Family Rating reflects Darling's attractive profitability, strong cash flows, significant scale in rendering and recycling for the food industry, and its critical role in the waste handling process. Moody's expects flat to modest growth as the company's end products are in mostly mature markets (pet food, animal feed, and fertilizer), but that credit metrics will remain strong. Moody's believes opportunities for growth are greater in bio-fuels, a small portion of Darling's revenues today but an area of new capital investment. Furthermore, Moody's expects management to maintain a conservative financial policy, including modest leverage and careful consideration of any shareholder friendly activities. Given the company's very good liquidity position, supported by rapid cash build up, Moody's believes that the company is well positioned for future acquisition opportunities and investments on an opportunistic basis. The Ba1 rating also incorporates risks associated with the extraordinary volatility in related commodities, changes in raw material volumes, as well as the price of finished products. However, flexible pricing mechanisms offset some of the company's commodity exposure (approximately 75% of raw material volumes processed are subject to contracts which lock in Darling's profit margin). The company also lacks global geographic diversification and has some customer and raw material concentration. Furthermore, Darling's business can be adversely impacted by several factors outside its control including, animal disease, weather, regulation and trade disputes. The rating could be upgraded if Darling is able to increase its scale and global geographic diversification without materially weakening its credit metrics or operating performance. An upgrade would also require Moody's to become comfortable that management would continue to maintain a conservative financial policy, with strong credit metrics, given the company's exposure to volatility in the commodity market. Darling's ratings could be lowered if it's profitability, cash flow stability or liquidity deteriorate. Moody's could also downgrade the ratings if dividends or a large acquisition lead to credit metrics with debt-to-EBITDA exceeding 2.5 times on a sustained basis. The stable outlook reflects Moody's view regarding the strength and sustainability of Darling's credit metrics, including modest debt-to-EBITDA, which should permit the company to absorb small debt financed acquisitions in the future and/or volatility in the company's core business. The principal methodology used in rating Darling International Inc. was the Global Food -- Protein and Agriculture Industry Methodology, published September 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA, published June 2009. Darling International Inc. provides rendering, recycling and recovery solutions to the US food industry. Finished products, which are sold to producers of livestock, feed, oleo-chemicals, bio-fuels, soaps and pet foods, include meat and bone meal, bleachable fancy tallow, cookie meal, and yellow grease. Revenues for the twelve months ended June 30, 2012 were $1.7 billion. DELPHI CORP: Claims-Trading Ruling Overturned on Appeal ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a decision from August 2011 that bedeviled the claims-trading industry was overturned by the U.S. Court of Appeals in Manhattan. According to the report, reversal assures claim buyers that they're entitled to a refund of the purchase price, so long as the bankrupt company files anything approaching an objection to the claim that was bought. The case involved a claim against Delphi Corp. That Longacre Master Fund Ltd. purchased for $2.1 million, or 89 cents on the dollar. When Longacre bought the claim, Delphi had a Chapter 11 plan on file where unsecured creditors were to be paid in full. Although the plan was confirmed, it could never be implemented. The report relates that facing a loss on the purchased claim, Longacre contended the seller was obligated to repurchase the claim when Delphi objected to paying it. Delphi said the creditor received a so-called preference, which had to be repaid before the claim would be paid. The preference claim and the objection to the claim were eventually settled and withdrawn. Almost five years elapsed in the meantime before the claim was paid. The report notes that Longacre sued the seller in federal district court in New York, seeking interest on the purchase price for the years during which the claim was under objection. Longacre admitted it was obliged to repay the purchase price once the objection to the claim was resolved. The district court dismissed the suit, leading to the appeal that Longacre won on Sept. 14. The Bloomberg report discloses that the opinion by the U.S. Court of Appeals in Manhattan won't be officially reported. The unsigned opinion by the three-judge appellate panel held that a full-fledged objection to the claim wasn't necessary to invoke the seller's obligation to repurchase. The appeals court also reversed the district court on the question of whether the seller breached a warranty when representing that it knew of no basis for objection to the claim. The appeals court said the buyer was aware it received a payment within 90 days of bankruptcy. Since payments within 90 days of bankruptcy can and frequently are attacked as preferences, that was enough to represent a breach of warranty. The case is Longacre Master Fund Ltd. v. ATS Automation Tooling Systems Inc., 11-33413, U.S. Court of Appeals for the Second Circuit (Manhattan). About Delphi Corp. Based in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Delphi operates major technical centers, manufacturing sites and customer support facilities in 30 countries. The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represented the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is responsible for the post-Effective Date administration and eventual closing of the Chapter 11 cases as well as the disposition of certain retained assets and payment of certain retained liabilities as provided under the Modified Plan. Delphi Automotive PLC is UK-based company formed in May 2011 as a holding company for US-based automotive parts manufacturer Delphi Automotive LLP. Delphi Automotive LLP is the successor to the former Delphi Corporation. At the time of its formation, Delphi Automotive PLC filed an initial public offering seeking to raise at least $100 million. Bankruptcy Creditors' Service, Inc., publishes DELPHI BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-7000). DEWEY & LEBOEUF: Ex-Partners Working on Dodgers Case Assert Claims ------------------------------------------------------------------ Jennifer Smith, writing for The Wall Street Journal's Law Blog, reports that a team of former Dewey & LeBoeuf LLP bankruptcy lawyers who represented the Los Angeles Dodgers in the baseball club's bankruptcy sale entered into a stipulation with Dewey's estate that carves out an exception for the Dodgers group so that Dewey's proposed Partner Contribution Plan, if it goes forward, will not prevent the Dodgers group from pursuing damage claims against the law firm. WSJ reports that, according to a stipulation filed late last week in federal court, the four Dewey ex-partners -- Bruce Bennett, Esq., Sidney P. Levinson, Esq., James O. Johnston, Esq., and Joshua M. Mester, Esq. -- are pursuing damage claims for "fraud, misrepresentation, breach of fiduciary duty and other claims" against Dewey, members of the firm's executive committee and "certain other persons." The report notes all four had special pay deals with Dewey that, according to the filing, date back to 2011. Dewey is in settlement talks with the four ex-partners. WSJ notes the Dodgers group left Dewey in May to join Jones Day. The lawyers terminated their special agreements with the law firm on May 13, "based upon DL's material breaches of its obligations to the Individuals under the Agreements," according to the stipulation. WSJ further notes that when Dewey was on the ropes this spring, its leaders pointed to the $2 billion sale of the Dodgers, along with other high-profile work, as evidence that the firm was a going concern. Law Blog also reports that the Dodgers group are using the Dodgers' sale as leverage in a potential settlement with Dewey's estate, which has asked them to help collect fees from the case. The report notes Dewey had only collected about $9 million in fees as of March, and in the tumult surrounding the firm's failure blew through a final fee application deadline. WSJ relates Dewey's bankruptcy advisers are seeking judicial approval of a $71 million "clawback" settlement with hundreds of other ex-partners that offers immunity from future lawsuits in exchange for a cut of their earnings from 2011 and 2012. A hearing on the matter is set for Thursday. If approved, the Partner Contribution Plan would represent the most significant recovery yet for the firm's many creditors. According to the report, Mr. Bennett and the other lawyers could not be reached for comment on Monday. A spokesman for Jones Day declined to comment on the matter. Scott Ratner, Dewey's general insolvency counsel, did not return a request for comment Monday. About Dewey & LeBoeuf New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. DEWEY & LEBOEUF: Citibank Denies Conspiring Against Partners ------------------------------------------------------------ Lisa Uhlman at Bankruptcy Law360 reports that in a dispute with an ex-Dewey & LeBoeuf LLP partner who defaulted on a Citibank NA loan, the bank denied Wednesday that it conspired with Dewey to take advantage of partners in granting them capital contribution loans despite knowing of the firm's financial condition. About Dewey & LeBoeuf New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. DEWEY & LEBOEUF: Sept. 20 Hearing on Appointment of Ch. 11 Trustee ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in the Chapter 11 cases of Dewey & Leboeuf LLP, asks the U.S. Bankruptcy Court for the Southern District of New York to deny a request for the appointment of a Chapter 11 trustee or, in the alternative, an examiner. On Aug. 8, 2012, the Ad Hoc Committee of Retired Partners of LeBoeuf, Lamb, Leiby & MacRae asserted that the appointment of a trustee is befitting because (i) of the gross mismanagement by the prepetition management of the Debtor, well as continuing mismanagement by the Debtor's management postpetition; and (ii) the appointment is beneficial to all parties in interest. Alternatively, the Ad Hoc Committee, requested for the appointment of an examiner to investigate, report on, and pursue or settle avoidance claims under Sections 544, 547, 548 and 550, and any other claims arising out of the conduct of the Debtor, including former chairman Steven H. Davis, former executive director Stephen DiCarmine, former chief financial officer, Joel Sanders and other partners of the Debtor who were members of its management committees or otherwise had influence over the affairs of the Debtor. The Official Committee of Former Partners requested that the Court continue or deny without prejudice the request for the appointment of a chapter 11 trustee, but joins in the request for the appointment of an examiner. The Creditors Committee opposes the Motion in all respects, explaining the Ad Hoc Committee cannot sustain its burden to demonstrate the need for a trustee. According to the Creditors Committee, the motion appeared to be a litigation tactic, filed months into the case and as a reaction to the Debtor having secured commitments from approximately 430 former partners to pay approximately $72 million as part of the Debtor's proposed partner contribution settlement plan. Additionally, the Creditors Committee explained that the appointment of a chapter 11 trustee or examiner would provide no tangible benefit to the estate; would waste limited resources and could jeopardize the progress made toward moving this case forward toward the realization of near-term value for legitimate creditors. The Creditors Committee noted that the appointment of a trustee or examiner is an event of default under the final order (1) authorizing use of cash collateral, (2) granting adequate protection, and (3) modifying the automatic stay, dated June 13, 2012, as subsequently supplemented, permitting the secured lenders to terminate the ability of the Debtor to use any cash collateral and keep the case in Chapter 11. In a separate filing, JPMorgan Chase Bank, N.A., as administrative agent, to motion of Ad Hoc Committee of Retired Partners of Leboeuf, Lamb, Leiby & Macrae objected for the appointment of a trustee, or examiner, stating that the motion, filed just days before announcement of the Partner Contribution Plan (PCP), is nothing more than a tactical maneuver -- a preemptive strike on the merits of a settlement that is only now being presented to the Court for scrutiny. JPMorgan asserted that the movants must prove why an independent chief restructuring officer managing the wind-down and negotiation process, with the advice of other highly experienced professionals, is not competent to work with all parties in moving the case towards resolution. A hearing on Sept. 20, 2012, at 10 a.m. has been set. About Dewey & LeBoeuf New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. DICKINSON, MI: Fitch Cuts Rating on $24MM Notes to 'BB+' -------------------------------------------------------- Fitch Ratings has downgraded the rating on the following debt issued by the County of Dickinson, State of Michigan, on behalf of Dickinson County Healthcare System (DCHS): -- $24.1 million series 1999 to 'BB-' from 'BB+'. The Rating Outlook is Stable. SECURITY The bonds are secured by a pledge of net revenues, certain equipment, investment income, and bond funds under the indenture agreement. DCHS has a debt service coverage covenant of 1.25 times (x) and a debt service reserve fund. KEY RATING DRIVERS SIGNIFICANTLY WEAKENED FINANCIAL PROFILE: The rating downgrade to 'BB-' from 'BB+' was driven by DCHS's weakened financial profile led by a deterioration in unrestricted cash. Since fiscal 2010, unrestricted cash has declined to $12.7 million at June 30, 2012 from $19.8 million. This equated to 57.9 days cash on hand (DCOH) from 102.9 DCOH in 2010. ADDITIONAL BORROWING: Coupled with the decline in unrestricted cash and investments, DCHS intends to borrow approximately $9 million in USDA loans to fund the construction of a new medical office building (MOB). Pro forma cash to debt decreases to 34.4% from 59% and pro forma cushion ratio is very weak at 2.3x compared to Fitch's 'Below Investment Grade' median of 55.6% and 4.7x respectively. LIGHT DEBT SERVICE COVERAGE: Pro forma maximum annual debt service (MADS) coverage was a low 1.2x through the six months ended June 30, 2012. Further, the organization's debt burden is high measured by MADS as a percentage of revenue of 5.9%, which compared unfavorably against the median of 2.7%. LEADING MARKET POSITION: DCHS continues to maintain its dominant market position of 70% in its primary service area (PSA), which is improved from 68% in 2010. IMPROVED BUT STILL WEAK OPERATING PERFORMANCE: DCHS improved its profitability position through the six months ended June 30, 2012 as the organization recorded a negative 0.3% operating margin and 6.1% operating EBITDA margin. These metrics are improved from fiscal 2011's negative 3.5% operating margin and 4% operating EBTIDA margin. Management continues to implement various cost reductions, while attempting to grow top-line revenue to enhance DCHS's profitability. CREDIT PROFILE Organizational Overview DCHS is a 96-bed acute care hospital providing primary and secondary services located in Iron Mountain, on Michigan's Upper Peninsula. In fiscal 2011 (Dec. 31 year end), DCHS had total revenue of $82.7 million. Rating Downgrade to 'BB-' The rating downgrade reflects DCHS's weakened balance sheet coupled with a more leveraged debt position. Additionally, the organization continues to lose money from operations, which marks the fourth consecutive year DCHS has incurred losses in operating income. At June 30, 2012 (unaudited), DCHS had 57.9 DCOH, 2.3x pro forma cushion ratio, and 34.4% pro forma cash to debt, which was down from fiscal 2011's 76.9 days, 2.9x cushion, and 59% cash to debt position. Management indicates the decrease in unrestricted cash was due to $1.9 million of capital expenditures on various operational items including information technology. Management anticipates unrestricted cash balances to increase after meaningful use payments are received. Additionally, management intends to borrow approximately $9 million for the construction of a new MOB on the hospital's main campus. Management expects the new MOB will help solidify DCHS's primary care base in light of increased competition. DCHS's financial flexibility is more limited given the decline in liquidity and increased debt load, which is reflected in the current rating level. Despite having improved profitability through the six months ended June 30, 2012, DCHS is still operating at a loss and management expects to finish fiscal 2012 with a negative $326,000 operating income. Although operating performance has historically been poor, management reports that there have been no financial covenant violations. Other key credit concerns include its unfavorable payor mix and small revenue base. Stable Rating Outlook DCHS's rating is stable at the lower rating level and Fitch expects DCHS to continue to slowly improve its operating performance. Key Credit Strengths DCHS's key credit strengths continue to be its dominant market position, sole community provider status, and positive utilization trends in fiscal 2011. DCHS had an improved market share to 70% in fiscal 2011, up from 68% in 2010, and is designated as a sole community provider as its closest competitor is approximately 43 miles away. Bolstering the organization's improved market position is the positive trend in volumes for 2011 as inpatient admissions, surgeries, and outpatient visits all increased from prior year levels. Management indicates the positive trend is primarily due to DCHS's solid physician recruitment and successful hospitalist program. Outstanding Debt Profile All of DCHS's outstanding debt is fixed-rate and the system has no outstanding swaps. Overall, Fitch views DCHS's debt portfolio as conservative. In the fall of 2012, DCHS plans to borrow approximately $9 million in USDA loans for the construction of a new MOB on the origination's main campus. The USDA loans will be fixed rate. Total pro forma outstanding debt will be $37 million and aggregate maximum annual debt service of $5.4 million was provided by management. DCHS covenants to submit certain annual financial and utilization information to the MSRB's EMMA system. Disclosure to Fitch has been timely and extremely thorough and has occurred monthly. The disclosure includes a detailed management discussion and analysis, balance sheet, income statement, statement of cash flows, and utilization statistics; all of which have comprehensive comparative analyses. DIGITAL DOMAIN: Can Advance Up to $7.65-Mil. Per 3rd Interim Order ------------------------------------------------------------------ In a third interim dated Sept. 14, 2012, the U.S. Bankruptcy Court for the District of Delaware authorized Digital Domain Media Group, Inc., et al., to enter into the DIP Term Sheet Documentation, to use cash collateral and to obtain secured postpetition superpriority financing of up to $11,789,000 less the $4,137,000 advanced under the First Interim Order, for a maximum borrowing under the Third Interim Order of $7,652,000 from Hudson Bay Master Fund Ltd., in its capacity as DIP Agent on behalf of the DIP Lenders. The final hearing to consider the $20,083,000 financing package will be held on Oct. 1, 2012, at 12:00 p.m. The Debtors agree that no advances have been or will be made under the Second Interim Order, that the Second Interim Order will be void and of no force or effect ab initio as of the entry of the Third Interim Order, and that the terms of the Second Interim Order will not apply to any advances made under the First Interim Order or the Third Interim Order. The maximum amount to be advanced by the Lenders through and including Sept. 20, 2012, will be $1,990,000, to be disbursed solely to fund, in accordance with the amounts set forth in the approved budget: (i) vendor operational expenses, (ii) wages, and (iii) Debtor professional fees (provided that disbursements for Debtor professional fees will be further capped at $300,000; So long as the Bid Procedures Order, as entered on Sept. 12, 2012, is not (i) amended, modified, supplemented or otherwise revised to change the date of the Sale Hearing to a date later than Sept. 24, 2012, (ii) otherwise amended, modified, supplemented or otherwise revised in any manner that is not reasonably acceptable to the DIP Lenders, each in its sole discretion, or (iii) stayed vacated, on or after the hearing scheduled for Sept. 20, 2012, then the DIP DIP Lenders will make available the balance available under the Interim DIP Loan to fund amounts arising on or after Sept. 21, 2012. A copy of the third interim DIP order and DIP Term Sheet is available at http://bankrupt.com/misc/ddmg.3rdinterimdiporder.pdf About Digital Domain Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/ -- engages in the creation of original content animation feature films, and development of computer-generated imagery for feature films and transmedia advertising primarily in the United States. Digital Domain Media Group, Inc. and 13 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11 to sell its business for $15 million to Searchlight Capital Partners LP. The Debtors have also sought ancillary relief in Canada, pursuant to the Companies' Creditors Arrangement Act in the Supreme Court of British Columbia, Vancouver Registry. Port St. Lucie, Florida-based Digital Domain disclosed assets of $205 million and liabilities totaling $214 million. DDMG also announced that it has entered into a purchase agreement with Searchlight Capital Partners L.P. to acquire Digital Domain Productions Inc. and its operating subsidiaries in the United States and Canada, including Mothership Media, subject to the receipt of higher and better offers and Court approval. DDPI and Mothership, with studios in California and Vancouver, are focused on creating digital visual effects, CG animation and digital production for the entertainment and advertising industries and are led by recently promoted Chief Executive Officer Ed Ulbrich. Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. DOLE FOOD: Moody's Reviews 'B1' Corp. Family Rating for Upgrade --------------------------------------------------------------- Moody's Investors Service placed Dole Food Company Inc.'s ratings including its B1 corporate family rating on review for upgrade following its announcement that it has reached an agreement with ITOCHU Corporation of Japan (rated Baa1, stable) to sell its worldwide packaged foods and its Asia fresh produce business for $1.685 billion in cash. Net proceeds will be used to repay debt and for restructuring and other corporate purposes. Ratings Rationale The review will focus on the company's capital structure post sale, which Moody's expects to be lower levered than it is currently even after making still relatively large lease and pension adjustments, as well as management intentions for financial policy going forward. However the lower leverage will be considered in the context of a smaller, less diversified, potentially more volatile and lower margin business, which would need lower leverage to support the current rating. The review for upgrade assumes that no distributions to shareholders, or share buybacks are contemplated as a result of this transaction. Dole's existing B1 corporate family rating incorporates the company's weak credit metrics, along with the earnings and cash flow volatility from its exposure to commodity markets as well as the impact of such uncontrollable factors as weather and political regulations on key products. Nonetheless, Dole enjoys a leadership position in its industry segment and has good geographic diversity. The following ratings were placed on review for upgrade: Dole Food Company, Inc.: Corporate Family Rating B1 Probability of Default Rating B1 Senior Secured B2/LGD4 Senior Unsecured B3/LGD5 Solvest Ltd. Sr Sec Bank Credit Facility Ba2/LGD2 The principal methodology used in rating Dole was the Global Food - Protein and Agriculture published in 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 Westlake Village, California, Dole Food Company, Inc. is the world's leading producer of fresh fruit and fresh vegetables, with an expanding line of value-added products. Sales for the latest twelve months ending June 2012 were approximately $7 billion. Dole's chairman, David Murdock, and his affiliates beneficially own approximately 64% of the company's common stock. DYNEGY INC: Incurs $69 Million Net Loss in Second Quarter --------------------------------------------------------- Dynegy Holdings, LLC, filed with the U.S. Securities and Exchange Commission its quarterly reports on Forms 10-Q for the periods ended Sept. 30, 2011, March 31, 2012, and June 30, 2012, and its annual report on Form 10-K for the year ended Dec. 31, 2011. The Company recorded a net loss of $69 million on $290 million of revenue for the three months ended June 30, 2012, compared with a net loss of $115 million on $326 million of revenue for the same period during the prior year. For the six months ended June 30, 2012, the Company reported a net loss of $1.15 billion on $565 million of revenue, in comparison with a net loss of $195 million on $831 million of revenue for the same period during the previous year. Dynegy reported a net loss of $1.08 billion for the three months ended March 31, 2012, compared with a net loss of $80 million for the same period a year ago. The Company disclosed a net loss of $129 million for the three months ended Sept. 30, 2011, compared with a net loss of $22 million for the same period a year ago. The Company also reported a net loss of $324 million for the nine months ended Sept. 30, 2011, versus a net loss of $75 million for the same period during the prior year. Dynegy recorded a net loss of $940 million in 2011, a net loss of $242 million in 2010, and a net loss of $1.26 billion in 2009. The Company's balance sheet at June 30, 2012, showed $6.79 billion in total assets, $7.96 billion in total liabilities and a $1.16 billion member's deficit. A copy of the Q3 2011 Form 10-Q is available at: http://is.gd/MkAJtk A copy of the 2011 Form 10-K is available for free at: http://is.gd/stGvRW A copy of the Q1 2012 Form 10-Q is available at: http://is.gd/jfhbuY A copy of the Q2 2012 Form 10-Q is available for free at: http://is.gd/hQPjNh About Dynegy Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion. Dynegy Inc. on July 6, 2012, filed a voluntary petition to reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to effectuate a merger with Dynegy Holdings, pursuant to Holdings' Chapter 11 plan. A settlement, which has already been approved by the bankruptcy court, provides for Dynegy Inc. and Holdings to merge and for the administrative claim granted to Dynegy Inc. in the Holdings Chapter 11 case to be transferred out of Dynegy Inc. for the benefit of its shareholders. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. The financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors in Holdings' cases has tapped Akin Gump Strauss Hauer & Feld LLP as counsel. Dynegy Inc. is represented by White & Case LLP and advised by Lazard Freres & Co. LLC. ECAST CORPORATION: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: ECast Corporation dba E*Cast Corporation 4505 Falls of Neuse Road, Suite 600 Raleigh, NC 27609 Bankruptcy Case No.: 12-06564 Chapter 11 Petition Date: September 13, 2012 Court: U.S. Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: Travis Sasser, Esq. SASSER LAW FIRM 2000 Regency Parkway, Suite 230 Cary, NC 27518 Tel: (919) 319-7400 Fax: (919) 657-7400 E-mail: tsasser@carybankruptcy.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nceb12-06564.pdf The petition was signed by Peter Bechtel, sole director. ELMIRA DOWNTOWN: Judge to Hear US Trustee's Case Dismissal Bid -------------------------------------------------------------- Jason Whong at Stargazette.com reports that U.S. Bankruptcy Judge Paul Warren will hear on Sept. 27, 2012, the U.S. Trustee's request to dismiss the Chapter 11 bankruptcy filing of Elmira Downtown Arena LLC, also known as EDA. According to the report, Elm Arena LLC, which holds the mortgage on the arena and is in line to become the next owner, will also ask Judge Warren at the Sept. 27 hearing to order EDA not to use the arena or sell off any of the equipment inside. The report relates Elm Arena attorney David Rasmussen, Esq., will ask Judge Warren to order EDA not to use the arena or anything inside it because Elm Arena has received no assurances that it would be protected if EDA uses it. "There is substantial risk to the machinery, equipment, furniture and fixtures due to (EDA's) possession and negligent management and operation of First Arena," the report quotes Mr. Rasmussen as saying, noting that EDA has not yet asked the court for permission to pay employees who maintain the arena and its ice-making equipment. Other allegations in Elm Arena's motion include: -- EDA owes Elm Arena more on its mortgage on First Arena than the arena is actually worth. (Elm Arena bought the mortgage from Key Bank in August.) -- At the time of EDA's Aug. 16 bankruptcy filing, it owed $5.07 million and was in default on the original $5.7 million mortgage. Key Bank, which held the mortgage at the time, received no payments in June or July. -- EDA has not maintained the arena, making it worth less as each day passes. Meanwhile, the amount EDA owes Elm Arena increases because of nonpayment of the mortgage. -- Because EDA hasn't adequately insured the arena, Elm Arena bought its own insurance at a cost of more than $20,000 for a year. Based in Elmira, New York, Elmira Downtown Arena, LLC, filed for Chapter 11 protection on Aug. 16, 2012 (Bankr. W.D. N.Y. Case No. 12-21361). EDA is controlled by Michigan businessman Mostafa Afr. Judge Paul R. Warren presides over the case. Joshua P. Fleury, Esq., at Phillips Lytle LLP, represents the Debtor. The Debtor estimated assets of $100,000, and $500,000, and debts of between $1 million and $10 million. ELPIDA MEMORY: Bondholders Halt U.S. Asset Sales ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S.-based bondholders of Japan's Elpida Memory Inc. walked out of bankruptcy court with most of what they were seeking. Elpida filed a Chapter 15 petition in U.S. Bankruptcy Court in Delaware in March, a month after filing for bankruptcy at home. In April, the U.S. court recognized Japan as home to the so-called foreign main proceeding. As a result, the court in Japan ordinarily would administer the sale of the business and distributions to creditors, receiving assistance from the U.S. court if necessary. The report relates that bondholders filed papers in August in the Delaware court as part of a larger effort opposing Elpida's sale to Micron Technology Inc. The ad hoc bondholder group is composed of Linden Advisors LP, LIM Advisors, Owl Creek Asset Management LP and Taconic Capital Advisors LP. They asked in papers for the U.S. court to bar Elpida from selling or transferring U.S. assets. The report notes that U.S. Bankruptcy Judge Christopher S. Sontchi gave the bondholders the larger part of what they wanted. The company can't sell or transfer U.S. assets outside of the ordinary course of business without giving 21 days' notice to the bondholders. Judge Sontchi also made it clear that the bondholders are at liberty to file an involuntary bankruptcy petition against Elpida's U.S. units. The Bloomberg report discloses that the bondholders argued in the August court filing that the proposed sale to Micron for an estimated $1.8 billion at present value is for substantially less than Elpida's liquidation value. Elpida's filing in Japan was that country's largest in two years. 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. ELZA CONSTRUCTION: Case Converted to Chapter 7 Due to Inactivity ---------------------------------------------------------------- Based upon the filed operating reports that reflect essentially no activity by Elsa Construction LLC, the U.S. Bankruptcy Court for the Eastern District of Kentucky has ordered that the Debtor's case be converted to one under Chapter 7 of the Bankruptcy Code. About Elza Construction Based in East Bernstadt, Kentucky, Elza Construction LLC, aka Elza Reclamation, filed for Chapter 11 bankruptcy (Bankr. E.D. Ky. Case No. 11-60689) on May 10, 2011. Judge Joseph M. Scott, Jr., presides over the case. Maxie Higgason, Esq., at Higgason Law Office, serves as bankruptcy counsel. The Debtor disclosed $15,188,510 in assets and $6,443,334 in liabilities as of the Chapter 11 filing. The petition was signed by Paul Elza, the owner. Mr. Elza was designated by the Court as the Debtor's representative. The U.S. Trustee said that an official committee of unsecured creditors has not been appointed because an insufficient number of persons holding unsecured claims against Elza Construction LLC have expressed interest in serving on a committee. EMISPHERE TECHNOLOGIES: Appoints Alan Rubino as President & CEO --------------------------------------------------------------- Emisphere Technologies, Inc., appointed Alan L. Rubino to the position of President and Chief Executive Officer, effective Sept. 17, 2012. Mr. Rubino has also been elected to the Company's Board of Directors. The Employment Agreement provides for an annual base salary of $400,000, with eligibility to receive an annual bonus of up to $200,000. "Alan is a seasoned industry executive with major and emerging pharmaceutical company experience. Throughout his career, he has consistently demonstrated the ability to successfully launch and grow profitable pharmaceutical products and efficient businesses. His versatile experiences, extensive industry connections and business development network, and exceptional reputation make him ideally suited to secure Emisphere's commercial success," said Dr. Michael Weiser, a member of the Board of Directors. Mr. Rubino commented, "I was attracted to Emisphere by the broad potential of its Eligen Technology to improve therapeutic delivery of vital pharmaceutical products and the Company's goal to pursue an immediate commercial opportunity to create value by launching its market-ready Eligen Oral B12 product." Timothy G. Rothwell, the newly appointed Chairman of the Company's Board of Directors commented that, "[T]he Company has decided to commercialize its Eligen Oral B12 product to begin to realize the promise of the Eligen drug delivery technology, and also to acquire other products to create value for the Company and its shareholders. Alan Rubino is the right leader to help pivot to this new business strategy and achieve our goals. While we have decided to pursue a new course to reposition Emisphere into a viable commercial-stage entity, anchored by the Eligen Oral B12 product, we remain dedicated to further realizing the full potential and commercial value of our platform Eligen Technology. To that end, we will continue to work closely with existing partners and will also expand our efforts to attract new delivery system and product development/licensing partnerships as well. We believe that the new Emisphere business strategy will create new opportunities for growth." Dr. Weiser added, "[W]e're very fortunate to have Alan and Tim working together to lead Emisphere in charting this new course and direction. They have worked together closely in the past; they both have a reputation for the highest personal and business integrity, a proven track record of success, extensive business leadership experience and excellent business development networks throughout the industry. Alan and Tim are the right leaders to ensure the Company realizes its full potential and creates greater value for its shareholders." Mr. Rubino's career spans over 30 years at every level of the biopharmaceutical industry. Most recently, he was Chief Executive Officer and President of New American Therapeutics, Inc., where he and his team presided over a most successful venture that was focused on the acquisition, marketing, and ultimate sale of Denavir, a leading Rx topical therapeutic for HSV-1 cold sore treatment which delivered a substantial return to its investment partners. A major portion of Mr. Rubino's highly successful career includes his twenty-four years spent at Hoffmann-La Roche where he rose through the ranks to become a corporate officer and member of the US Executive Committee. He held a variety of key senior executive positions with broad general management responsibilities leading major business units and operations, marketing, business development, alliance management, human resources, and supply chain/manufacturing. He led many key top level executive initiatives and presided over numerous commercial product launches across a spectrum of therapeutic areas including the introduction of the world's first biological product in Roferon-A [alfa-interferon 2a]. Mr. Rothwell is the former Chairman of Sanofi-Aventis U.S., having also served as President and Chief Executive Officer. In his various roles at Sanofi-Aventis U.S., he was responsible for overseeing all domestic commercial operations as well as coordinating Industrial Affairs and Research and Development activities. A copy of the Employment Agreement is available at: http://is.gd/c9jPJC About Emisphere Cedar Knolls, N.J.-based Emisphere Technologies, Inc., is a biopharmaceutical company that focuses on a unique and improved delivery of therapeutic molecules or nutritional supplements using its Eligen(R) Technology. These molecules are currently available or are under development. The Company's balance sheet at June 30, 2012, showed $2.52 million in total assets, $64.86 million in total liabilities, and a stockholders' equity of $62.34 million. McGladrey and Pullen, LLP, in New York City, expressed substantial doubt about Emisphere'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 suffered recurring losses from operations and its total liabilities exceed its total assets. FOXCO ACQUISITION: Moody's Affirms 'B2' CFR/PDR; Outlook Stable --------------------------------------------------------------- Moody's Investors Service affirmed the B2, LGD3 -- 49% ratings assigned to each of FoxCo Acquisition Sub, LLC's ("FoxCo") $20 million 1st lien senior secured revolver and 1st lien senior secured tem loan that was upsized to $765 million from $715 million. Proceeds from the debt facilities will be used to fund a special dividend of approximately $200 million. Moody's also affirmed the B2 Corporate Family Rating (CFR) and B2 Probability of Default Rating (PDR). The rating outlook remains stable. Affirmed: Issuer: FoxCo Acquisition Sub, LLC Corporate Family Rating: Affirmed B2 Probability of Default Rating: Affirmed B2 $20 million 1st Lien Sr Secured Revolver due January 2017: Assigned B2, LGD3 -- 49% $765 million 1st Lien Sr Secured Term Loan B due July 2017: Assigned B2, LGD3 -- 49% Outlook Actions: Issuer: FoxCo Acquisition Sub, LLC Outlook is Stable Ratings Rationale FoxCo's B2 corporate family rating incorporates the increase in debt balances by $50 million to fund a larger special dividend of roughly $200 million. The upsized deal increases total leverage to 6.0x, above the 5.75x threshold for the current CFR rating, but Moody's expects leverage to improve to less than 5.75x by FYE2012 due to the strong demand for political advertising in October and early November. The refinancing extends the earliest maturity 2 1/2 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 $765 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. 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 9% free cash flow-to-debt ratios provide good liquidity. The principal methodology used in rating FoxCo's 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 Newport, Kentucky and net revenue for the 12 months ended June 30, 2012 totaled $351 million. FULLER BRUSH: Cleared to Auction Assets Next Month -------------------------------------------------- Marie Beaudette and Stephanie Gleason at Dow Jones' DBR Small Cap reports that a bankruptcy judge has cleared Fuller Brush Co., the century-old manufacturer best known for its door-to-door salespeople, to auction its assets next month, with its senior lender kicking off bidding. About Fuller Brush The Fuller Brush Company -- http://www.fuller.com/-- sells branded and private label products for personal care, commercial and household cleaning and has a current catalog of 2,000 cleaning products. Some of Fuller's retail partners include Home Trends, Bi-Mart, Byerly's, Lunds, Home Depot, Do-It-Best, Primetime Solutions, Vermont Country Store and Starcrest. Founded in 1906 and based in Great Bend, Kansas, The Fuller Brush Company, Inc., and its parent, CPAC, Inc., filed for Chapter 11 protection (Bankr. S.D.N.Y. Case Nos. 12-10714 and 12-10715) in Manhattan on Feb. 21, 2012. Fuller Brush filed for bankruptcy five years after the company was taken over by private equity firm Buckingham Capital Partners. Fuller, which has 180 employees as of the Chapter 11 filing, disclosed $22.9 million in assets and $50.9 million in debt. Fuller said it will be business as usual while undergoing Chapter 11 restructuring. But it said that while in reorganization, it intends to trim about half of the current catalog of cleaning products. Herrick Feinstein LP serves as the Debtors' bankruptcy counsel. The official committee of unsecured creditors has tapped the law firm of Kelley Drye & Warren LLP as counsel. The reorganization is being financed with a $5 million loan from an affiliate of Victory Park Capital Advisors LLC, the secured lender owed $22.7 million that plans to buy the business in exchange for debt. GELT PROPERTIES: Can Access Cash Collateral Until Oct. 3 -------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania authorized Gelt Properties, LLC, et al., to use cash collateral through Oct. 3, 2012. As adequate protection for the use of cash collateral on an interim basis, Vist Bank is granted valid, binding, enforceable and perfected replacement security interests in and replacement liens on all now owned or hereafter acquired property and assets of the Debtors that are proceeds, products, rents and profits thereof, in which the Lender was perfected pre-petition. The Court order the Debtors to pay Vist Bank $6,732. A further hearing on the use of cash collateral will be held on Oct. 3, 2012, at 11:00 a.m. About Gelt Properties Based in Huntington Valley, Pennsylvania, Gelt Properties, LLC, and affiliate Gelt Financial Corporation borrow money from traditional lenders and make loans to commercial borrowers. They also acquire and manage real estate. Gelt Properties and Gelt Financial filed for (Bankr. E.D. Pa. Case Nos. 11-15826 and 11- 15826) on July 25, 2011. Judge Magdeline D. Coleman presides over the cases. Albert A. Ciardi, III, Esq., Jennifer E. Cranston, Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., in Philadelphia, Pa., serve as the Debtors' bankruptcy counsel. The petitions were signed by Uri Shoham, the Debtors' chief financial officer. The Debtors' other professionals include: Eisenberg, Gold & Cettei P.C. as its special counsel to provide proper legal counsel to the Debtors with regard to defending against certain actions, Cohen and Forman as their special counsel to advise them upon all matters which may arise or which may be incident to the bankruptcy proceedings. Gelt Properties disclosed $4.73 million in assets and $4.84 million in liabilities as of the Chapter 11 filing. Its affiliate, Gelt Financial has scheduled $20.3 million in assets and $17.05 million in liabilities as of the Chapter 11 filing. On Sept. 15, 2011, a committee of unsecured creditors was appointed. Schoff McCabe, P.C. represents the Committee. Craig Howe, CPA, and Howe, Keller & Hunter, P.C., serve as the Committee's accountants. GELT PROPERTIES: Taps Nochumson P.C. to Handle Craig Atkins Suit ---------------------------------------------------------------- Gelt Properties, LLC, et al., in an amended application, ask the U.S. Bankruptcy Court for the Eastern District of Pennsylvania for permission to employ Nochumson P.C. as special counsel to represent the Debtor's interests in the pending Craig Atkins and Penco Appraisals, Inc. et al., legal matters. Prepetition, Nochumson has represented the Debtors in various legal matters, and as of the Petition Date, n outstanding fees were owed by the Debtors for the services. To the best of the Debtors' knowledge, Nochumson has no connection with the Debtors and is not an insider or affiliate of the Debtors. About Gelt Properties Based in Huntington Valley, Pennsylvania, Gelt Properties, LLC, and affiliate Gelt Financial Corporation borrow money from traditional lenders and make loans to commercial borrowers. They also acquire and manage real estate. Gelt Properties and Gelt Financial filed for (Bankr. E.D. Pa. Case Nos. 11-15826 and 11- 15826) on July 25, 2011. Judge Magdeline D. Coleman presides over the cases. Albert A. Ciardi, III, Esq., Jennifer E. Cranston, Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., in Philadelphia, Pa., serve as the Debtors' bankruptcy counsel. The petitions were signed by Uri Shoham, the Debtors' chief financial officer. The Debtors' other professionals include: Eisenberg, Gold & Cettei P.C. as its special counsel to provide proper legal counsel to the Debtors with regard to defending against certain actions, Cohen and Forman as their special counsel to advise them upon all matters which may arise or which may be incident to the bankruptcy proceedings. Gelt Properties disclosed $4.73 million in assets and $4.84 million in liabilities as of the Chapter 11 filing. Its affiliate, Gelt Financial has scheduled $20.3 million in assets and $17.05 million in liabilities as of the Chapter 11 filing. On Sept. 15, 2011, a committee of unsecured creditors was appointed. Schoff McCabe, P.C. represents the Committee. Craig Howe, CPA, and Howe, Keller & Hunter, P.C., serve as the Committee's accountants. The Debtors's amended Plan of Reorganization dated March 16, 2012, provides that all assets of the Debtors will be sold and liquidated, rented or leased, developed and maintained, in the ordinary course of the Debtors' business. The Debtors note that the proposed Plan envisions the utilization of management talents, commitment and an existing infrastructure to restructure existing debt, liquidate unprofitable properties and meaningfully shift focus to its growing REO portfolio. GLOBAL AVIATION: Noteholders to Receive Stock Under Plan -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Global Aviation Holdings Inc., the parent of World Airways Inc. and North American Airlines Inc., filed a proposed reorganization plan that hands ownership of the Company to secured noteholders owed $111.4 million. So that creditors can vote, there will be an Oct. 17 hearing in U.S. Bankruptcy in Brooklyn, New York, for approval of the explanatory disclosure statement. According to the report, unsecured creditors and second-lien noteholders are to receive nothing. In addition to the stock, senior secured creditors will take home a new $40 million, five- year second-lien note bearing interest at 3% that can be paid with more notes. The senior creditors will also receive whatever is left after a new $95 million first-lien loan pays off about $91 million in financing for the reorganization. The disclosure statement doesn't give a projected percentage recovery for senior noteholders. The plan would implement newly negotiated contracts with pilots, flight attendants and dispatchers designed to save $100 million over the five-year term of the agreements. The report relates that Global used the bankruptcy court to shed 17 of the 31 aircraft in the fleet when the bankruptcy began. The plan eliminates $168 million in debt for borrowed money, according to the disclosure statement. The plan is supported by holders of 80% of the first-lien notes and all of the lenders for the reorganization, according to the disclosure statement. The new union contracts require giving the workers' representatives 25% of the new stock, thus diluting the senior creditors' recovery. The labor agreements also put limits on debt of the reorganized company. The report notes there can be no more than $95 million in first- lien debt and $40 million of second-lien debt. No more than half of cash flow may be paid to creditors, and there must be a revolving credit of at least $20 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. GROUP 1: Moody's Corrects August 21 Rating Release -------------------------------------------------- Moody's Investors Service issued a correction to the August 21, 2012 rating release of Group 1 Automotive, Inc. Moody's Investors Service upgraded the corporate family and probability of default ratings of Group 1 Automotive, Inc. to Ba2 from Ba3. A stable outlook was assigned. Ratings upgraded: Corporate family rating upgraded to Ba2 from Ba3 Probability of default rating upgraded to Ba2 from Ba3 Ratings Rationale The upgrade to Ba2 recognizes continued improvements in Group 1's operating performance, resulting in strengthening of the company's quantitative credit profile. In addition, the majority of the risks surrounding Toyota, which represents around 30% of Group 1's new vehicle sales, from recalls to inventory disruptions from 2011's earthquake and tsunami in Japan, seem to have largely abated. "Group 1 continues to strengthen all aspects of its credit profile, with Debt/EBITDA reducing such that it should be around 4 times within the next couple of quarters and interest coverage as measured by EBIT/interest increasing such that it is now above 4 times," stated Moody's Senior Analyst Charlie O'Shea. "The company continues to operate in a highly-disciplined fashion surrounding its variable costs, and these efforts are resulting in increasing levels of profitability." The stable outlook reflects Moody's belief that Group 1 will continue to manage its cost structure such that its operating performance remains resilient even in the event of a downturn and credit metrics remain largely in balance. Ratings could be upgraded if debt/EBITDA was sustained below 3.75 times and EBIT/Interest was sustained above 4.25 times. Ratings could be downgraded if either negative trends in operating performance or financial policy decisions resulted in debt/EBITDA rising above 4.75 times or EBIT/Interest falling toward 3 times, or if the company's liquidity were to weaken. The principal methodology used in rating Group 1 was the Global Automotive Retailer 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. Group 1 Automotive, headquartered in Houston, TX, is a leading auto retailer with 159 franchises, and annual revenues approaching $7 billion. GROUP 1: Moody's Affirms 'Ba2' Corporate Family Rating ------------------------------------------------------ In a September 18, 2012 ratings release, Moody's Investors Service assigned ratings to Group 1 Automotive, Inc.'s shelf and affirmed the Ba2 corporate family and probability of default ratings. The outlook remains stable. Ratings assigned: Senior unsecured shelf rating at (P)B1 (LGD6, 92%) Subordinate shelf rating at (P)B1 (LGD6, 97%) Preferred shelf rating at (P)B1 (LGD6, 97%) Ratings affirmed: Corporate family rating at Ba2 Probability of default rating at Ba2 Ratings Rationale The Ba2 ratings recognize continued improvements in Group 1's operating performance, resulting in strengthening of the company's quantitative credit profile. In addition, the majority of the risks surrounding Toyota, which represents over 30 % of Group 1's new vehicle sales, from recalls to inventory disruptions from 2011's earthquake and tsunami in Japan, seem to have largely abated. The stable outlook reflects Moody's belief that Group 1 will continue to manage its cost structure such that its operating performance remains resilient even in the event of a downturn and credit metrics remain largely in balance. Ratings could be upgraded if debt/EBITDA was sustained below 3.75 times and EBIT/Interest was sustained above 4.25 times. Ratings could be downgraded if either negative trends in operating performance or financial policy decisions resulted in debt/EBITDA rising above 4.75 times or EBIT/Interest falling toward 3 times, or if the company's liquidity were to weaken. The principal methodology used in rating Group 1 was the Global Automotive Retailer 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. Group 1 Automotive, headquartered in Houston, TX, is a leading auto retailer with 159 franchises, and annual revenues approaching $7 billion. HALIFAX REGIONAL: Fitch Lowers Rating on $15.1-Mil. Bonds to 'BB+' ------------------------------------------------------------------ Fitch Ratings has downgraded the rating on the following North Carolina Medical Care Commission bonds issued on behalf of Halifax Regional Medical Center (HRMC): -- $15.1 million hospital revenue bonds, series 1998 to 'BB' from 'BB+'. The Rating Outlook is revised to Stable from Negative. SECURITY The bonds are secured by a pledge of gross receipts, a negative mortgage lien, and a debt service reserve. KEY RATING DRIVERS VOLATILE FINANCIAL PERFORMANCE: The downgrade to 'BB' from 'BB+' reflects HRMC's challenging fundamental credit characteristics including an unfavorable payor mix and rural service area, which have led to inconsistent operating performance. These pressures are not expected to wane over the near term. LOW DEBT BURDEN: HRMC's light debt burden allows for adequate debt service coverage at its rating level despite weak operating performance. No additional debt is planned. UNFAVORABLE PAYOR MIX: Much of HRMC's revenue growth in fiscal 2011 (Sept. 30 year end) and the 10 months ended July 31, 2012 (interim 2012) was the result of supplemental Medicaid funds rather than organic growth, and it remains exposed to a high level of government/self-pay revenues and bad debt expense. MIXED SERVICE AREA CHARACTERISTICS: While HRMC's position as a sole community hospital and market share leader is a credit strength, the service area's overall socioeconomic profile is generally unfavorable. STABLE BALANCE SHEET: HRMC's liquidity levels provide for some cushion against its operating performance, and related metrics are favorable for the rating category. Still, ongoing capital needs and pension funding requirements will likely limit meaningful balance sheet growth over the near term. CREDIT PROFILE The downgrade to 'BB' reflects HRMC's challenging environment as a rural provider that has suffered from soft clinical volumes on both an inpatient and outpatient basis. Volume declines are due in part to difficulty recruiting, retaining, and ramping up physicians, and have been further pressured by an economically challenged service area. These challenges are not uncommon for rural hospitals, and are more pronounced due to HRMC's relatively small revenue base. Through the 10-month interim period ended July 31, 2012, HRMC's total admissions declined 10.8%, total surgeries declined 0.8%, and births declined 5.5% over the same prior year period. HRMC had 47 active medical staff members, down from the 51 in fiscal 2011, and continues to experience challenges with physician recruitment and retention. HRMC's cash flow remains light, but due to its low debt burden, debt service coverage is solid for the rating level. Through the 2012 interim period HRMC produced an improved 0.6% operating margin ($614,000 operating income) and 4.4% operating EBITDA margin, ahead of a negative 0.2% operating margin and 3.6% operating EBITDA margin in 2011 (fiscal year end Sept. 30). This produced maximum annual debt service (MADS) coverage of 3.5x by EBITDA in interim 2012, ahead of prior fiscal year's 2.8x. However, HRMC has operating lease expense of approximately $1 million and adjusted coverage including the operating leases would reduce debt service coverage to 2.6x in the interim period. Fitch notes that much of the operating improvement in fiscal 2012 is due to funds received under a new Medicaid assessment program (GAP) enacted by the North Carolina legislature in fiscal 2012 and payments retroactive to fiscal 2011 were recognized in fiscal 2012. Including Medicaid disproportionate share funding, HRMC's recognition of net supplemental funding totaled $1.8 million in fiscal 2010, $2.9 million in fiscal 2011, and $2.9 million in fiscal 2012. HRMC is reliant on these supplemental funds for profitability, which is a credit concern. Fitch also notes that HRMC is challenged by the socioeconomic profile of its service area, which generally has unfavorable of unemployment, income, and poverty levels against state and national averages. This is borne out in a government-payor-heavy revenue mix, with a high 72% of gross revenues from Medicare/Medicaid and 17.3% bad debt as a percent of revenues in interim 2012. Some flexibility is provided by HRMC's balance sheet, which is relatively robust for its rating category. As of July 31, 2012, unrestricted cash equaled $23.9 million, equating to 97 days of cash on hand (DCOH), 14.5x cushion, and 107.4% cash to debt, all ahead of Fitch's non-investment-grade medians. HRMC's debt burden is low with debt to capitalization of 43.7% and MADS comprising 1.4% of revenue through the 2012 interim period. Total debt of $22.3 million is 100% fixed rate with no derivatives, and includes a $6.5 million direct bank placement (initial term to 2018). HRMC is now finishing its major capital project of a $6.5 million ambulatory and surgery department renovation/expansion, and its capital budget is $3.6 million in 2013 for routine needs. Fitch believes HRMC is stable at the 'BB' rating level and its balance sheet and low debt burden provides adequate cushion to its variable operating performance. HRMC is budgeting for a $511,000 operating income (0.5% operating margin) in fiscal 2013. HRMC is a 204 licensed-bed community medical center providing primary and secondary care services. The medical center is located in Roanoke Rapids, approximately 75 miles northeast of Raleigh. In fiscal 2011 HRMC had $107.6 million in total operating revenue. Disclosure to Fitch has been adequate with quarterly disclosure, although only audited annual disclosure is required in the bond documents. HRMC provides disclosure upon request to other third parties. Fitch notes that quarterly disclosure includes a balance sheet and income statements; however, a statement of cash flows and management discussion and analysis is not provided. HARDAGE HOTEL: Has Until Oct. 2 to File Plan of Reorganization -------------------------------------------------------------- The Hon. H. Christopher Mott of the U.S. Bankruptcy Court for the Western District of Texas extended Hardage Hotels I, LLC's exclusive periods to file and solicit acceptances for the proposed plan of reorganization until Oct. 2, 2012; and Nov. 16, respectively. The Debtors filed their request for an extension before the exclusive periods was set to expire on Sept. 2. The Debtor related that the secured creditors and the Official Committee of Unsecured Creditors did not oppose the requested extension. About Hardage Hotels Hardage Hotels I, LLC, filed for Chapter 11 bankruptcy (Bankr. W.D. Tex. Case No. 12-30443) on March 6, 2012. The petition was signed by Samuel A. Hardage, president. Hardage is a hotel and real estate development company headquartered in San Diego, California. Hardage operates seven hotels in seven states under the brand of "Chase Suites". The hotels are located in El Paso, Texas; Overland Park, Kansas; Newark, California; Kansas City, Missouri; Des Moines, Iowa; Lincoln, Nebraska; and Dublin, Ohio. Hardage operates the hotels under the "Chase Suites" name pursuant to franchise agreements with Hardage Hospitality, LLC. The Debtor has no employees -- all employees at the hotels are employed by non-debtor Hardage Hospitality, which provides hotel management services. The Debtor has outstanding secured debt of $34.2 million plus interest. The lenders are OneWest Bank, FSB; California First National Bank, N.A., and Security Bank of Kansas City. OneWest is the lender under a $5.74 million Dublin loan agreement, a $5.3 million Lincoln loan agreement, and an $11.5 million El Paso loan agreement. Hardage was forced to file for bankruptcy when Hardage reached an out-of-court restructuring of its debts with OneWest and then OneWest reneged on its commitment. In September 2010, OneWest filed a collection against Hardage and sought the appointment of a receiver over the El Paso property. A receivership order was entered but was vacated, although Hardage was ordered to make payments to OneWest. The parties then entered into a series of tolling agreements, under which Hardage paid OneWest $700,000 so that OneWest would not pursue any further action. Following negotiations, the parties signed a "final term sheet" on a restructuring on Dec. 2, 2011. But, according to the Debtor, OneWest reneged on the agreement. In November, OneWest sought foreclosure of, and a receiver for, the Dublin and El Paso properties. The Debtor on March 5, 2012, initiated a lawsuit against OneWest in the Superior Court of the State of California for the County of Los Angeles, Central District. The suit alleges several causes of action, including fraud and breach of contract. Judge H. Christopher Mott presides over the Chapter 11 case. The Debtor has tapped Haynes and Boone LLP as attorneys, and Transitional Finance Partners LLC as financial advisor. In its schedules, the Debtor disclosed $39,203,540 in total assets and $31,119,611 in total liabilities. No trustee or examiner has been requested or appointed in this Chapter 11 case. The Official Committee of Unsecured Creditors is represented by Brinkman Portillo Ronk, PC. HELLER EHRMAN: Settles $1MM Fee Dispute With Gregory Canyon ----------------------------------------------------------- Carolina Bolado at Bankruptcy Law360 reports that Heller Ehrman LLP on Monday settled a $1.2 million dispute with former client landfill operator Gregory Canyon Ltd. and its subsidiary Servcon- San Marcos Inc. over fees related to a landfill project. U.S. Bankruptcy Judge Dennis Montali signed off on the deal, in which Gregory Canyon agreed to pay the bankrupt law firm $775,000 for legal services Heller Ehrman provided the company between 1991 and 1999, according to Bankruptcy Law360. About Heller Ehrman Headquartered in San Francisco, California, Heller Ehrman, LLP -- http://www.hewm.com/-- was an international law firm of more than 730 attorneys in 15 offices in the United States, Europe, and Asia. Heller Ehrman filed a voluntary Chapter 11 petition (Bankr. N.D. Calif., Case No. 08-32514) on Dec. 28, 2008. Members of the firm's dissolution committee led by Peter J. Benvenutti approved a plan dated Sept. 26, 2008, to dissolve the firm. The Hon. Dennis Montali presides over the case. Pachulski Stang Ziehl & Jones LLP assisted the Debtor in its restructuring effort. The Official Committee of Unsecured Creditors is represented by Felderstein Fitzgerald Willoughby & Pascuzzi LLP. The firm estimated assets and debts at $50 million to $100 million as of the Petition Date. According to reports, the firm had roughly $63 million in assets and 54 employees at the time of its filing. The Court confirmed Heller Ehrman's Plan of Liquidation in September 2010. HORIZON LINES: Amends Q2 Form 10-Q to Correct Classification ------------------------------------------------------------ Horizon Lines, Inc., filed with the U.S. Securities and Exchange Commission an amendment to its quarterly report on Form 10-Q for the period ended June 24, 2012, to reclassify certain amounts in Item 1, Financial Statements, and Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations. During the second quarter of 2012, the Company entered into a Global Termination Agreement with Ship Finance International Limited whereby the Company issued $40.0 million aggregate principal amount of its Second Lien Senior Secured Notes due 2016 and warrants to purchase 9,250,000 shares of the Company's common stock to satisfy its obligations in connection with certain vessel leases. The Company classified the liability for the $40.0 million of Second Lien Notes issued to SFL as a long-term liability of discontinued operations on the Company's Condensed Consolidated Balance Sheet as of June 24, 2012, contained within the Form 10-Q. In addition, $1.3 million of interest expense related to the Second Lien Notes issued to SFL was recorded within net loss from discontinued operations on the Company's Unaudited Condensed Statement of Operations for the quarter and six months ended June 24, 2012. The Company has corrected an immaterial error in classification by including its obligation under the Second Lien Notes issued to SFL, and the related deferred income taxes, as part of continuing operations on the Unaudited Condensed Consolidated Balance Sheet as of June 24, 2012. The Company has also corrected an immaterial error in classification by including the interest expense associated with the Second Lien Notes issued to SFL within net loss from continuing operations on the Unaudited Condensed Statements of Operations for the quarter and six months ended June 24, 2012. The Company's restated balance sheet at June 24, 2012, showed $618.37 million in total assets, $617.59 million in total liabilities and $786,000 in total stockholders' equity. Horizon Lines originally reported $620.40 million in total assets, $619.62 million in total liabilities and $786,000 in total stockholders' equity. The amendment had no effect on the Company's statement of operations. A copy of the Form 10-Q, as amended, is available at: http://is.gd/NQtPWW About Horizon Lines Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the nation's leading domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. The Company provides express trans-Pacific service between the U.S. West Coast and the ports of Ningbo and Shanghai in China, manages a domestic and overseas service partner network and provides integrated, reliable and cost competitive logistics solutions. Horizon Lines reported a net loss of $229.41 million in 2011, a net loss of $57.97 million in 2010, and a net loss of $31.27 million in 2009. Refinancing The Company was not in compliance with the maximum senior secured leverage ratio and the minimum interest coverage ratio under its Senior Credit Facility at the close of its third fiscal quarter ended Sept. 25, 2011. Non-compliance with these financial covenants constituted an event of default, which could have resulted in acceleration of the maturity. None of the indebtedness under the Senior Credit Facility or Notes was accelerated prior to the completion of a comprehensive refinancing on Oct. 5, 2011. The Senior Credit Facility and 99.3% of the 4.25% Convertible Senior Notes were repaid as part of the refinancing. In addition, as a result of the completion of the refinancing, the short-term obligations under the Senior Credit Facility, the Notes and the Bridge Loan have been classified as long-term debt. As a result of the efforts to refinance the Company's debt and the 2011 amendments to the Senior Credit Facility, the Company paid $17.3 million in financing costs and recorded a loss on modification of debt of $0.6 million during 2011. * * * In June 2012, Moody's Investors Service affirmed Horizon Lines, Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating ("PDR") at Caa2 and removed the LD ("Limited Default") designation from the rating in recognition of the conversion to equity of the $228 million of Series A and Series B Convertible Senior Secured notes due in October 2017 ("Notes"). Moody's said the affirmation of the Corporate Family and Probability of Default ratings considers that total debt has been reduced by the conversion of the Notes, but also recognizes the significant operating challenges that the company continues to face. HOWREY LLP: Level I & Contract Lawyers Form Group & Hire Counsel ---------------------------------------------------------------- A group of 60 attorneys formerly employed by Howrey LLP and designated by the Debtor as either "Level I" or "contract" attorneys, has hired the law firm Dumas & Clark LLP and banded together for the purpose of protecting and advancing certain common interests and issues in lawsuits, claims and proceedings that are or may potentially be alleged or asserted by or against members of the group. According to a court filing, each member of the group has potential claims and rights under a contract or contracts with the Debtor. The members of the group acquired their various rights over time under the contract or contracts and under applicable law. The firm may be reached at: Cecily A. Dumas, Esq. Robert E. Clark, Esq. DUMAS & CLARK LLP 150 California St., Suite 2200 San Francisco, CA 94111 Telephone: 415-762-1640 E-mail: Cecily.dumas@dumasclark.com Robert.clark@dumasclark.com According to Jacqueline Palank, writing for Dow Jones' Daily Bankruptcy Review, the attorneys were once part of Howrey's intellectual property, litigation and other practices and now work at such firms as Cooley and Greenberg Traurig. According to the report, the trustee overseeing Howrey's liquidation, Allan Diamond, has told Bankruptcy Beat that he may sue Howrey's former partners to recover compensation paid out of the law firm's alleged profits. The report notes attorney Cecily Dumas told Bankruptcy Beat Monday that the lawyers she's representing were partners in name only. As Level One partners, the Howrey lawyers didn't hold equity in the firm and were contractually barred from sharing in the law firm's profits, instead receiving salaries. "I believe . . . that even though these individuals had the title of partner, they were not partners in the true sense and therefore are not subject to partner clawback claims," she said, according to DBR. No lawsuits have yet been filed. DBR also reports Ms. Dumas, who said she has represented former partners in the law firm bankruptcies of Brobeck Phleger & Harrison and Heller Ehrman, said the attorneys she's representing weren't necessarily part of Howrey's "inner circle" and didn't hold management roles. "They shared in the downside, but they didn't share in the upside," she said. About Howrey LLP Three creditors filed an involuntary Chapter 7 petition (Bankr. N.D. Calif. Case No. 11-31376) on April 11, 2011, against the remnants of the Washington-based law firm Howrey LLP. The filing was in San Francisco, where the firm had an office. The firm previously was known as Howrey & Simon and Howrey Simon Arnold & White LLP. The firm at one time had more than 700 lawyers in 17 offices. The partners voted to dissolve in March 2011. The firm specialized in antitrust and intellectual-property matters. The three creditors filing the involuntary petition together have $36,600 in claims, according to their petition. The involuntary chapter 7 petition was converted to a chapter 11 case in June 2011 at the request of the firm. In its schedules filed in July, the Debtor disclosed assets of $138.7 million and liabilities of $107.0 million. Representing Citibank, the firm's largest creditor, is Kelley Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton & Garrison. Representing Howrey is H. Jason Gold, Esq., a partner at Wiley Rein. The Official Committee of Unsecured Creditors is represented in the case by Bradford F. Englander, Esq., at Whiteford, Taylor And Preston LLP. In September 2011, Citibank sought conversion of the Debtor's case to Chapter 7 or, in the alternative, appointment of a Chapter 11 Trustee. The Court entered an order appointing a Chapter 11 Trustee. In October 2011, Allan B. Diamond was named as Trustee. HOWREY LLP: Former Attorneys Face Potential Clawback Suits ---------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that around 60 former Howrey LLP attorneys have joined forces and hired counsel to defend against potential clawback suits from the defunct law firm's Chapter 11 trustee, according to documents filed in California bankruptcy court Friday. Bankruptcy Law360 relates that the attorneys all have rights under contracts with the bankrupt firm and have tapped Dumas & Clark LLP to represent their interests, Cecily Dumas, an attorney for the group, said in a verified statement. About Howrey LLP Three creditors filed an involuntary Chapter 7 petition (Bankr. N.D. Calif. Case No. 11-31376) on April 11, 2011, against the remnants of the Washington-based law firm Howrey LLP. The filing was in San Francisco, where the firm had an office. The firm previously was known as Howrey & Simon and Howrey Simon Arnold & White LLP. The firm at one time had more than 700 lawyers in 17 offices. The partners voted to dissolve in March 2011. The firm specialized in antitrust and intellectual-property matters. The three creditors filing the involuntary petition together have $36,600 in claims, according to their petition. The involuntary chapter 7 petition was converted to a chapter 11 case in June 2011 at the request of the firm. In its schedules filed in July, the Debtor disclosed assets of $138.7 million and liabilities of $107.0 million. Representing Citibank, the firm's largest creditor, is Kelley Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton & Garrison. Representing Howrey is H. Jason Gold, Esq., a partner at Wiley Rein. The Official Committee of Unsecured Creditors is represented in the case by Bradford F. Englander, Esq., at Whiteford, Taylor And Preston LLP. In September 2011, Citibank sought conversion of the Debtor's case to Chapter 7 or, in the alternative, appointment of a Chapter 11 Trustee. The Court entered an order appointing a Chapter 11 Trustee. In October 2011, Allan B. Diamond was named as Trustee. IA GLOBAL: UK Administrators Hand Back 2.4 Million Common Shares ---------------------------------------------------------------- IA Global, Inc., on July 9, 2012, entered into a Termination and Release Agreement with Innovative Software Direct plc, its subsidiary Powerdial Services Limited, a UK company in administration, and the ISD Administrators in the United Kingdom, whereby 2,400,000 shares of common stock, which were held by the UK Administrators, were returned to the Company and cancelled in exchange for $2,100 in processing fees and a mutual release of liabilities. Simultaneously, the contemplated acquisition of Powerdial from ISD was terminated. The Company was and continues to be, an unsecured creditor of ISD for $150,000, which will most likely be written off. In addition, the company and UK administrator consider this transaction as null and void ab initio, as Powerdial went into forced administration before any indicia of ownership or consideration could pass, and therefore will not be included in the Company's consolidated financial statements. Settles with Former CFO On Sept. 5, 2012, the Company entered into a Termination and Release Agreement with Mark Scott, the Company's former Chief Financial Officer, which terminated all previous employment, consulting, release or other agreements of the parties, and released one another from any and all claims and liabilities, pending completion of settlement payments. Mr. Scott resigned from all positions with the Company on June 30, 2011. As previously reported on April 30, 2012, Mr. Scott had entered a claim totaling $167,598. Mr. Scott had also entered into previous settlement arrangements with the Company. Under the terms of the Scott Settlement Agreement, the Company will pay Mr. Scott an aggregate of $15,000 in four payments commencing Sept. 15, 2012, through Dec. 15, 2012. In addition, Mr. Scott will receive 200,000 shares of IA Global Stock. Director Resigns Mr. Mark Lev resigned as a member of the Board of Directors, effective as of May 11, 2012. Mr. Lev's resignation from the Board was not due to any disagreement with the Company relating to the Company's operations, policies or practices. About IA Global San Francisco, Calif.-based IA Global, Inc. (OTCQB: IAGI.OB) -- http://www.iaglobalinc.com/-- is a global services and outsourcing company focused on growing existing businesses and expansion through global mergers and acquisitions. The Company is utilizing its current partnerships to acquire growth businesses in target sectors and markets at discounted prices. The Company is actively engaging in discussions with businesses that would benefit from our business acumen and marketing expertise, knowledge of Asian Markets, and technology infrastructure. The Company's balance sheet at Dec. 31, 2010 showed $21.51 million in total assets, $19.14 million in total liabilities and $2.37 million in total stockholders' equity. As reported in the Troubled Company Reporter on July 20, 2010, Sherb & Co., LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has incurred significant operating losses, and has a working capital deficit as of March 31, 2010. IMAGING3: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Imaging3, Inc. 3200 West Valhalla Drive Burbank, CA 91505 Bankruptcy Case No.: 12-41206 Chapter 11 Petition Date: September 13, 2012 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Neil W. Bason Debtor's Counsel: Brian L. Davidoff, Esq. GREENBERG GLUSKER 1900 Avenue of the Stars, 21st Floor Los Angeles, CA 90067 Tel: (310) 201-7530 Fax: (310) 402-5026 E-mail: bdavidoff@greenbergglusker.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $10,000,001 to $50,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/cacb12-41206.pdf The petition was signed by Dean James, chairman and chief executive officer. INDIANAPOLIS DOWNS: Gets $500M Bids from Centaur Gaming for Racino ------------------------------------------------------------------ Lance Duroni at Bankruptcy Law360 reports that Indianapolis Downs LLC revealed Friday that it has received a $500 million bid for its combination horsetrack and casino from rival Centaur Gaming LLC, but the offer has already come under fire from major bondholder Fortress Investment Group LLC. Centaur, which escaped a bankruptcy of its own last year, submitted a bid of $500 million plus $1 on July 20 for the Indianapolis-area gaming complex, prompting the debtors to reopen an auction that had been canceled in favor of a stand-alone recapitalization, according Bankruptcy Law360. About Indianapolis Downs Indianapolis Downs LLC operates Indiana Live -- http://www.indianalivecasino.com/-- a combined race track and casino at a state-of-the-art 283 acre Shelbyville, Indiana site. It also operates two satellite wagering facilities in Evansville and Clarksville, Indiana. Total revenue for 2010 was $270 million, representing an 8.7% increase in 2009. The casino captured 53% of the Indianapolis market share. In July 2001, Indianapolis Downs was granted a permit to conduct a horse track operation in Shelvyville, Indiana, and started operating the track in 2002. It was granted permission to operate the casino at the racetrack operation in May 2007. The casino began operations in July 2010. Indianapolis Downs and subsidiary, Indianapolis Downs Capital Corp., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11046) in Wilmington, Delaware, on April 7, 2011. Indianapolis Downs estimated $500 million to $1 billion in assets and up to $500 million in debt as of the Chapter 11 filing. According to a court filing, the Debtor owes $98,125,000 on a first lien debt. It also owes $375 million on secured notes and $72.6 million on subordinated notes. Matthew L. Hinker, Esq., Scott D. Cousins, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP in Wilmington, Delaware, have been tapped as counsel to the Debtors. Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, is the conflicts counsel. Lazard Freres & Co. LLC is the investment banker. Bose Mckinney & Evans LLP and Bose Public Affairs Group LLC serve as special counsel. Kobi Partners, LLC, is the restructuring services provider. Epiq Bankruptcy Solutions is the claims and notice agent. INDUSTRIAL DEVELOPMENT: Fitch Rates $66-Mil. Refunding Bonds 'B+' ----------------------------------------------------------------- Fitch Ratings has assigned a rating of 'B+' to $66 million of Industrial Development Corporation (IDC) of the Port of Seattle special facilities revenue refunding bonds, series 2012 due April 1, 2030 (Delta Air Lines, Inc. Project). Proceeds from this offering, intended to be issued in one tranche with a bullet maturity of April 1, 2030, are expected to refund two series of notes that are currently outstanding ($59.3 million due 2030 and $5 million due 2020). Proceeds from the original issuance were used to finance the construction and installation of a two-bay wide-body aircraft maintenance hangar, cargo handling and ground service equipment (GSE) maintenance facilities at the Seattle-Tacoma International Airport (SEA) for Northwest Airlines, now part of Delta Air Lines (DAL). The rating takes into consideration the following factors: (i) DAL's credit quality (ii) the structure of the transaction (iii) Fitch's view on the likelihood of affirmation of this lease and ultimate recovery for bondholders in a potential restructuring. Unlike most airport revenue bonds which are viewed as unsecured claims of the airline, bondholders in this issue are secured by the lease between DAL and the Port of Seattle for the property which holds DAL's hanger facility. The issuing entity is the IDC of the Port of Seattle, but it has a limited obligation on the rated bonds. These bonds are serviced exclusively by the lease payments from DAL under its financing lease agreement with the IDC, and DAL also provides an unsecured guarantee, so ultimately recourse to DAL. Furthermore, the bond is secured by the original lease agreement between DAL and the Port of Seattle for the hanger facility, which enables the bond trustee to re-lease the facility to a new tenant if DAL decides to reject the lease in a potential bankruptcy. Accordingly, Fitch believes that recovery for bondholders in these notes would be higher than DAL unsecured debt (unrated) in the event DAL rejected this lease in a potential restructuring. While this supports recovery in a downside scenario, Fitch's base case view is that DAL would likely affirm this lease obligation in a potential filing (as it did before when Northwest filed in 2005) given the strategic importance of SEA to DAL. Although SEA is not a hub or major airport for DAL, it is an important gateway for the airline on the west coast and a profit center for its maintenance services. DAL currently operates several flights from SEA to most of its major hubs and five international destinations, including: Kansai/Osaka (KIX) and Narita (NRT) in Japan, Beijing (PEK) in China, Charles-de-Gaulle (CDG) in France, and to Amsterdam Schiphol (AMS) in The Netherlands. In addition, DAL has 100+ code share flights with its partner Alaska Airlines. DAL recently asked the DOT to shift its flight rights to Haneda (HND) for non- stop service from SEA instead of its Detroit hub. DAL has also made significant investments recently in upgrading the Delta Sky Club lounge in SEA. Importantly, DAL services its own wide-body maintenance at this hanger at SEA, and also 'in-sources' maintenance for other carriers at this location. SEA is the only maintenance facility for DAL in the region and there are currently no comparable facilities west of its hub at Minneapolis. There are also no comparable facilities at SEA for maintenance work for widebody aircraft. Alaska and Weyerhaeuser each maintain a hanger but only to service their own aircraft, which are smaller (narrowbody for Alaska, general aviation for Weyerhaeuser). So DAL's hanger facility is also the only one of its kind at SEA. United offers maintenance services but does not have a hanger and so can only provide repair work at the airstrip. Overall space remains somewhat constrained at SEA, specifically, with regards to hanger capacity, which improves the probability that the property could be re-leased in a downside scenario. Fitch has assigned the following rating to the Industrial Development Corporation (IDC) of the Port of Seattle special facilities revenue refunding bonds, series 2012 (Delta Air Lines, Inc. Project): -- $66 million due April 1, 2030 'B+'. Fitch currently rates DAL as follows: -- Issuer Default Rating (IDR) 'B+'; -- $1.225 billion senior secured revolving credit facility due 2016 'BB+/RR1'; -- $1.368 billion senior secured term loan due 2017 'BB+/RR1'; -- $500 million revolving credit facility (Pacific routes) due 2013 'BB+/RR1'; -- $248 million of senior secured term loan (Pacific routes) due 2016 'BB+/RR1'; -- $600 million senior secured first lien notes due 2014 'BB+/RR1'; -- $306 million senior second lien notes due 2015 'BB-/RR3' The Rating Outlook is Stable. INFUSION BRANDS: Buys $1MM CD3 Note; Sells $2MM Note to Vicis ------------------------------------------------------------- Infusion Brands International, Inc., on Sept. 12, 2012, purchased from CD3 Holdings, Inc., a promissory note in the principal amount of $1 million, which is due and payable on Oct. 15, 2012. Additionally, under the terms of the CD3 Note, on the CD3 Maturity Date, CD3 will pay the Company an additional $75,000 for reimbursement of legal fees, due diligence and other costs incurred by the Company. CD3 may prepay the CD3 Note, in whole or in part, without penalty, upon not less than three days' prior notice. Notwithstanding the foregoing, if CD3 consummates an equity or debt financing, all net proceeds realized by CD3 will be paid towards satisfaction of the CD3 Note. Upon an Event of Default, the entire unpaid principal amount under the CD3 Note will become due and payable. A copy of the CD3 Note is available for free at http://is.gd/YNICqu On Sept. 12, 2012, the Company sold to Vicis Captial Master Fund a promissory note in the principal amount of $2,000,000, which is due and payable on Oct. 15, 2012. Additionally, under the terms of the Vicis Note, on the Vicis Maturity Date, the Company will pay Vicis an additional $150,000 payment for reimbursement of legal fees, due diligence and other costs incurred by Vicis. The Company may prepay the Vicis Note, in whole or in part, without penalty, upon not less than three days' prior notice. Notwithstanding the foregoing, if the Company consummates an equity or debt financing, all net proceeds realized by the Company shall be paid towards satisfaction of the Vicis Note. Upon an Event of Default, the entire unpaid principal amount under the Vicis Note will become due and payable. A copy of the Vicis Note is available for free at http://is.gd/KYHg0A 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 following the financial results for the year ended Dec. 31, 2011. 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. INNER CITY: Hearing on Exclusivity Periods Set for Sept. 24 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on Sept. 24, 2012, at 10 a.m., to consider Inner City Media Corporation, et al.'s request for extension in their exclusive periods. The Debtors are seeking extensions in their exclusive periods to file and solicit acceptances for the proposed chapter 11 plan until Oct. 19, 2012, and Dec. 18, 2012, respectively. According to the Debtors while they believe that the sale transactions approved by the Court represent the best way to maximize the value of their assets, the Debtors cannot know with certainty that the YMF Sale Transaction will obtain the requisite regulatory approval from the Federal Communications Commission, let alone before the expiration of the exclusive periods. Accordingly, out of an abundance of caution, the Debtors request an extension of their Exclusive Periods in order to preserve all of their options in case the YMF Sale Transaction cannot be consummated or cannot be consummated on a timely basis, and there is a resulting need to consider a chapter 11 plan process. The Debtors related that on Feb. 23, 2012, the Court approved the proposed sale transaction with YMF Media LLC. On Aug. 30, 2012, in an ex parte bridge order, the Court extended the Debtors' exclusive periods until the time as the Court has entered a final order determining the motion for exclusivity extension. About Inner City On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit Facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. INOVA TECHNOLOGY: Had $117,600 Net Loss in July 31 Quarter ---------------------------------------------------------- Inova Technology Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $117,598 on $6.47 million of revenue for the quarter ended July 31, 2012, compared with a net loss of $92,294 on $5.04 million of revenue for the same quarter during the prior year. 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 July 31, 2012, showed $7.65 million in total assets, $18.83 million in total liabilities and a $11.18 million total stockholders' deficit. Going Concern The Company has an accumulated deficit and negative working capital and is in default on the majority of its notes payable as of July 31, 2012. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. "Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations," the Company said in its quarterly report for the period ended July 31, 2012. "However, there is no assurance that profitable operations or sufficient cash flows will occur in the future." MaloneBailey, LLP, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2012. The independent auditors noted that Inova incurred losses from operations for the years ended April 30, 2012, and 2011 and has a working capital deficit as of April 30, 2012, which raise substantial doubt about Inova's ability to continue as a going concern. A copy of the Form 10-Q is available for free at: http://is.gd/OHuE52 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. JMR DEVELOPMENT: Plan Filing Exclusivity Extended to Oct. 4 ----------------------------------------------------------- The Hon. Edward A. Godoy of the U.S. Bankruptcy Court for the District of Puerto Rico granted JMR Development Group Corp. an extension until Oct. 4, 2012, of its exclusive period to file the proposed chapter 11 plan. The Debtor, in its July 6 motion, stated that it needed more time to conclude negotiations with Built Rite Enterprises of NY, Inc. The Debtor is negotiating to obtain postpetition (exiting) financing for the completion of the construction of its hotel and casino facilities. JMR Development Group Corp. filed a Chapter 11 petition (Bankr. D. P.R. Case No. 11-07907) on Sept. 16, 2011, in Ponce, Puerto Rico. CPA Luis R. Carrasquillo & CO., P.S.C serves as financial accountant. The Debtor scheduled assets of US$12,732,474 and debts of US$48,587,611. An affiliate, JMR Tourist Development Group Corp. sought Chapter 11 protection (Case No. 11-07911) on the same day. KINDRED HEALTHCARE: Facility Expansion No Impact on Moody's CFR --------------------------------------------------------------- Moody's Investors Service commented that Kindred Healthcare, Inc.'s proposed $200 million expansion of its existing senior secured credit facilities has no impact on the company's ratings. Moody's understands that Kindred is seeking to increase availability under its revolving credit facility (not rated by Moody's) by $100 million. Moody's also understands that the company's term loan would be increased by $100 million, the proceeds of which would be used to reduce amounts outstanding under the revolver. Therefore, Moody's expects no meaningful change in the company's funded debt levels or related credit metrics as a result of this transaction. However, certain loss estimates are being revised based on the application of Moody's Loss Given Default methodology and the expected changes in committed amounts. Ratings unchanged/LGD assessments revised: Senior secured term loan due 2018, to Ba3 (LGD 3, 41%) from Ba3 (LGD 3, 39%) Senior unsecured notes due 2019, to B3 (LGD 5, 82%) from B3 (LGD 5, 81%) Corporate Family Rating, B1 Probability of Default Rating, B1 Speculative Grade Liquidity Rating, SGL-2 Kindred's B1 Corporate Family Rating reflects Moody's expectation that the company will continue to operate with considerable leverage. Additionally, while Moody's anticipates that the company will focus on reducing leverage, reimbursement pressures will limit revenue and EBITDA growth and constrain cash flow. Furthermore, the rating incorporates Moody's consideration of risk associated with the high reliance on the Medicare program related to the company's long-term acute care (LTAC) hospitals. However, Moody's also considers the scale and diversity of the company and its position as the largest post-acute care service provider with a significant presence in both the skilled nursing and LTAC hospital businesses. Moody's could upgrade the ratings if leverage is expected to be reduced and sustained below 4.5 times as a result of continued growth, operational improvements and/or debt repayment. Additionally, Moody's would have to gain comfort in longer term reimbursement stability in order to take a positive rating action. If the company is unable to mitigate negative reimbursement developments impacting its operations, earnings and cash flow, Moody's could downgrade the ratings. For example, Moody's could downgrade the ratings if leverage is expected to increase and be sustained above 5.0 times. The principal methodology used in rating Kindred Healthcare Inc. 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. LDK SOLAR: Two Directors Re-Elected to Board -------------------------------------------- LDK Solar Co., Ltd., announced the results of its annual general meeting held on Sept. 17, 2012, at the Company's office in Hong Kong. At this year's AGM, shareholders approved all of the resolutions proposed in the AGM notice, including the adoption of the 2011 annual report, and the re-election of class II directors, Tong Xingxue (President and COO) and Xiang Bing (independent director). The total number of members of the board of directors of the Company remains at six. KPMG was reappointed as the Company's outside auditors for the fiscal year 2012. About LDK Solar LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province, People's Republic of China, is a vertically integrated manufacturer of photovoltaic products, including high-quality and low-cost polysilicon, solar wafers, cells, modules, systems, power projects and solutions. LDK Solar was incorporated in the Cayman Islands on May 1, 2006, by LDK New Energy, a British Virgin Islands company wholly owned by Xiaofeng Peng, LDK's founder, chairman and chief executive officer, to acquire all of the equity interests in Jiangxi LDK Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin Industrial Limited. KPMG in Hong Kong, China, said in a May 15, 2012, audit report, there is substantial doubt on the ability of LDK Solar Co., Ltd. to continue as a going concern. According to KPMG, LDK Solar has a net working capital deficit and is restricted to incur additional debt as it has not met a financial covenant ratio under a long-term debt agreement as of Dec. 31, 2011. These conditions raise substantial doubt about the Group's ability to continue as a going concern. The Company's balance sheet at March 31, 2012, showed US$6.63 billion in total assets, US$5.96 billion in total liabilities, US$228.21 million in redeemable non-controlling interests and US$447.32 million in total equity. LDK SOLAR: Incurs $254.3 Million Net Loss in Second Quarter ----------------------------------------------------------- LDK Solar Co., Ltd., reported a net loss available to the Company's shareholders of US$254.34 million on US$235.36 million of net sales for the three months ended June 30, 2012, compared with a net loss available to the Company's shareholders of US$185.16 million on US$200.10 million of net sales for the sme period a year ago. The Company's balance sheet at June 30, 2012, showed US$6.40 billion in total assets, US$5.95 billion in total liabilities, US$254.44 million in redeemable non-controlling interests and US$192.17 million in total equity. The Company ended the second quarter of fiscal 2012 with US$296.2 million in cash and cash equivalents and US$523.4 million in short-term pledged bank deposits. "For the second quarter of 2012, our revenue was within the expected range as we saw wafer shipments increase sequentially," stated Xiaofeng Peng, Chairman and CEO of LDK Solar. "Industry- wide competition and demand constraints continued to drive price declines across the entire solar supply chain and negatively impacted our margins and profitability. "Turning to the third quarter, our outlook remains cautious as we expect to see continued near-term challenges facing our industry. We remain closely focused on managing costs and operating expenses through streamlining manufacturing operations, reducing production costs and improving utilization. "We continue to believe that some markets such as China will begin to see improved demand in the second half of this year and expect growth opportunities in this market to continue to expand over the next several years," concluded Mr. Peng. A copy of the press release is available for free at: http://is.gd/cr3zSR About LDK Solar LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province, People's Republic of China, is a vertically integrated manufacturer of photovoltaic products, including high-quality and low-cost polysilicon, solar wafers, cells, modules, systems, power projects and solutions. LDK Solar was incorporated in the Cayman Islands on May 1, 2006, by LDK New Energy, a British Virgin Islands company wholly owned by Xiaofeng Peng, LDK's founder, chairman and chief executive officer, to acquire all of the equity interests in Jiangxi LDK Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin Industrial Limited. KPMG in Hong Kong, China, said in a May 15, 2012, audit report, there is substantial doubt on the ability of LDK Solar Co., Ltd. to continue as a going concern. According to KPMG, LDK Solar has a net working capital deficit and is restricted to incur additional debt as it has not met a financial covenant ratio under a long-term debt agreement as of Dec. 31, 2011. These conditions raise substantial doubt about the Group's ability to continue as a going concern. LEE BRICK: David S. Hodges Approved as Financial Consultant ----------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of North Carolina, according to Lee Brick & Tile Company's case docket, authorized the Debtor to employ David S. Hodges as financial consultant. Mr. Hodges will perform financial consulting services in the form of accounting review, budgeting, projections and financial advice. The hourly rate of Mr. Hodges is $175. Mr. Hodges received $5,000 retainer from the Debtor prepetition. He was paid $3,547 for work done prepetition and is holding $1,453 from the retainer. To the best of the Debtor's knowledge, Mr. Hodges represent no adverse interest to the Debtor. About Lee Brick Sanford, North Carolina-based Lee Brick & Tile Company filed a bare-bones Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-04463) on June 15, 2012, in Wilson on June 15, 2012. The Debtor scheduled $27,851,968 in assets and $14,135,140 in liabilities. Lender Capital Bank is owed $13.0 million, of which $6.5 million is secured. Lee Brick -- http://www.leebrick.com/-- began its operations in 1951 after Hugh Perry and 10 local businessmen from Lee County decided three years prior to invest in the business of brickmaking. In the late 1950's Hugh Perry bought out the investing partners, making Lee Brick a solely owned and operated family company. Hugh Perry named his son Frank president in 1970, which he served until 1999 and currently serves as CEO. Since 1999 Don Perry succeeded his father and serves as the company's president. Frank Perry, along with his sons Don and Gil, and brother-in-law JR (rad) Holton have helped guide the family business through revolutionary changes in brick manufacturing that few people in the ceramic industry could have ever anticipated. Judge Randy D. Doub presides over the case. Kevin L. Sink, Esq., at Nicholls & Crampton, P.A., serves as the Debtor's counsel. The petition was signed by Don W. Perry, president. LEE BRICK: Has Until Oct. 13 to File Plan and Disclosure Statement ------------------------------------------------------------------ The Hon. Randy D. Doub of the U.S. Bankruptcy Court for the Eastern District of North Carolina, in an amended order, extended until Oct. 13, 2012, Lee Brick & Tile Company's exclusive period to file chapter 11 plan and disclosure statement. The Court previously extended the Debtor's exclusive period to file plan until Sept. 13. About Lee Brick Sanford, North Carolina-based Lee Brick & Tile Company filed a bare-bones Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-04463) on June 15, 2012, in Wilson on June 15, 2012. The Debtor scheduled $27,851,968 in assets and $14,135,140 in liabilities. Lender Capital Bank is owed $13.0 million, of which $6.5 million is secured. Lee Brick -- http://www.leebrick.com/-- began its operations in 1951 after Hugh Perry and 10 local businessmen from Lee County decided three years prior to invest in the business of brickmaking. In the late 1950's Hugh Perry bought out the investing partners, making Lee Brick a solely owned and operated family company. Hugh Perry named his son Frank president in 1970, which he served until 1999 and currently serves as CEO. Since 1999 Don Perry succeeded his father and serves as the company's president. Frank Perry, along with his sons Don and Gil, and brother-in-law JR (rad) Holton have helped guide the family business through revolutionary changes in brick manufacturing that few people in the ceramic industry could have ever anticipated. Judge Randy D. Doub presides over the case. Kevin L. Sink, Esq., at Nicholls & Crampton, P.A., serves as the Debtor's counsel. The petition was signed by Don W. Perry, president. LEE BRICK: Bankr. Administrator Unable to Form Creditors Committee ------------------------------------------------------------------ The Bankruptcy Administrator for the Eastern District of North Carolina notified the U.S. Bankruptcy Court that it was unable to appoint an official committee of unsecured creditors in the Chapter 11 case of Lee Brick & Tile Company. The Bankruptcy Administrator noted that it has not received sufficient indications of willingness to serve on a committee. About Lee Brick Sanford, North Carolina-based Lee Brick & Tile Company filed a bare-bones Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-04463) on June 15, 2012, in Wilson on June 15, 2012. The Debtor scheduled $27,851,968 in assets and $14,135,140 in liabilities. Lender Capital Bank is owed $13.0 million, of which $6.5 million is secured. Lee Brick -- http://www.leebrick.com/-- began its operations in 1951 after Hugh Perry and 10 local businessmen from Lee County decided three years prior to invest in the business of brickmaking. In the late 1950's Hugh Perry bought out the investing partners, making Lee Brick a solely owned and operated family company. Hugh Perry named his son Frank president in 1970, which he served until 1999 and currently serves as CEO. Since 1999 Don Perry succeeded his father and serves as the company's president. Frank Perry, along with his sons Don and Gil, and brother-in-law JR (rad) Holton have helped guide the family business through revolutionary changes in brick manufacturing that few people in the ceramic industry could have ever anticipated. Judge Randy D. Doub presides over the case. Kevin L. Sink, Esq., at Nicholls & Crampton, P.A., serves as the Debtor's counsel. The petition was signed by Don W. Perry, president. LEE BRICK: Amends Schedules of Assets and Liabilities ----------------------------------------------------- Lee Brick & Tile Company filed with the Bankruptcy Court for the Eastern District of North Carolina amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $11,421,000 B. Personal Property $16,430,786 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $14,035,158 E. Creditors Holding Unsecured Priority Claims $32,308 F. Creditors Holding Unsecured Non-priority Claims $68,537 ----------- ------------ TOTAL $27,851,968 $14,136,003 In the original schedules, the Debtor scheduled $27,851,968 in assets and $14,135,140 in liabilities. Lender Capital Bank is owed $13.0 million, of which $6.5 million is secured. About Lee Brick Sanford, North Carolina-based Lee Brick & Tile Company filed a bare-bones Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-04463) on June 15, 2012, in Wilson on June 15, 2012. Lee Brick -- http://www.leebrick.com/-- began its operations in 1951 after Hugh Perry and 10 local businessmen from Lee County decided three years prior to invest in the business of brickmaking. In the late 1950's Hugh Perry bought out the investing partners, making Lee Brick a solely owned and operated family company. Hugh Perry named his son Frank president in 1970, which he served until 1999 and currently serves as CEO. Since 1999 Don Perry succeeded his father and serves as the company's president. Frank Perry, along with his sons Don and Gil, and brother-in-law JR (rad) Holton have helped guide the family business through revolutionary changes in brick manufacturing that few people in the ceramic industry could have ever anticipated. Judge Randy D. Doub presides over the case. Kevin L. Sink, Esq., at Nicholls & Crampton, P.A., serves as the Debtor's counsel. The petition was signed by Don W. Perry, president. LEFKARA GROUP: Attorney Regina Phillips Withdraws as Counsel ------------------------------------------------------------ M. Regina Phillips, Esq., has requested the U.S. Bankruptcy Court for the Southern District of New York that she be withdrawn an attorney of record for debtor Lefkara Group LLC. Richard Tanenbaum, Esq., will remain counsel of record for the Debtor. About the Debtor On April 25, 2012, three creditors filed an involuntary Chapter 11 case against New York City-based Lefkara Group LLC (Bankr. S.D.N.Y. Case No. 12-11702. Judge Stuart M. Bernstein presides over the case. Petitioners' were represented by Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, in New York City, as counsel. The creditors who signed the Chapter 11 petition were 42-05 Parsons LLC, Leonard J. Strandberg & Associates, and Montrose Surveying Co. LLP. LEFKARA GROUP: Files Schedules of Assets and Liabilities -------------------------------------------------------- Lefkara Group LLC has filed with the U.S. Bankruptcy Court for the Southern District of New York its schedules of assets and liabilities. In its schedules, the Debtor disclosed: Name of Schedule Assets Liabilities ---------------- ------ ----------- A - Real Property $6,000,000 B - Personal Property $0 C - Property Claimed as Exempt D - Creditors Holding Secured Claims $7,908,226 E - Creditors Holding Unsecured Priority Claims $0 F - Creditors Holding Unsecured Nonpriority Claims $1,198,624 ---------- ---------- Total $6,000,000 $9,106,850 About the Debtor On April 25, 2012, three creditors filed an involuntary Chapter 11 case against New York City-based Lefkara Group LLC (Bankr. S.D.N.Y. Case No. 12-11702. Judge Stuart M. Bernstein presides over the case. Petitioners' were represented by Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, in New York City, as counsel. The creditors who signed the Chapter 11 petition were 42-05 Parsons LLC, Leonard J. Strandberg & Associates, and Montrose Surveying Co. LLP. LEFKARA GROUP: Parsons Takes Plan Exclusivity --------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has, upon motion of 42-05 Parsons LLC, terminated the exclusive period in which only debtor Lefkara Group LLC may file and solicit a Plan of Reorganization in its Chapter 11 case. Parsons is authorized to file a plan and disclosure statement and is also authorized to complete the necessary construction of the Debtor's mixed-use condominium project located at 42-05 Parsons Boulevard, Flushing, New York, and obtain the 421-a tax benefits in accordance with the loan documents between Parsons and the Debtor. Any expenditures by Parsons in furtherance of the Project and the Tax Benefits as contemplated by the Court Order will be reflected as additional loans by Parsons to the Debtor. The Bankruptcy Court also excused Mr. Michael Mattone, the state court receiver, from the turnover requirements set forth in Sections 543 of the Bankruptcy Code pending confirmation of a plan. About the Debtor On April 25, 2012, three creditors filed an involuntary Chapter 11 case against New York City-based Lefkara Group LLC (Bankr. S.D.N.Y. Case No. 12-11702. Judge Stuart M. Bernstein presides over the case. Petitioners' were represented by Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, in New York City, as counsel. The creditors who signed the Chapter 11 petition were 42-05 Parsons LLC, Leonard J. Strandberg & Associates, and Montrose Surveying Co. LLP. LEHMAN BROTHERS: Sues JPMorgan to Unravel Derivative Transactions ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Lehman Brothers Holdings Inc., the reorganized investment bank, and the official creditors' committee filed a lawsuit in bankruptcy court to unravel myriad derivative transactions with JPMorgan Chase Bank NA and affiliates. According to the report, Lehman had 10 master agreements with JPMorgan entities to cover derivative trades with several Lehman subsidiaries. The Lehman parent guaranteed the transactions. In the suit filed in the New York bankruptcy court on Sept. 14, Lehman contends that JPMorgan incorrectly calculated claims by using incorrect termination dates and failing to net out trades properly. Lehman also contends that JPMorgan violated bankruptcy set off rules by netting out what JPMorgan owed one Lehman entity against sums owed by another Lehman entity. The report relates that the lawsuit seeks to disallow JPMorgan derivative claims, in part for failure to produce documents supporting the claims. The complaint also seeks affirmative recoveries from JPMorgan entities that on balance owe Lehman. The amount Lehman seeks to recover isn't disclosed. The largest of the JPMorgan claims involved in the lawsuit is $2.2 billion. The Lehman holding company and the brokerage subsidiary began their bankruptcies in New York in September 2008. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December and implemented in March, with a first distribution in April. The Bloomberg report discloses that Lehman will make a second distribution on Oct. 1. Lehman's brokerage subsidiary is under control of a trustee appointed under the Securities Investor Protection Act. The Lehman brokerage has yet to make a first distribution to non-customers. The new lawsuit is Lehman Brothers Holdings Inc. v. JPMorgan Chase Bank NA (In re Lehman Brothers Holdings Inc.), 12-01874, U.S. Bankruptcy Court, Southern District of New York (Manhattan). About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. LEHMAN BROTHERS: Wilbur Ross Says Price for Navigator Is Fair ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that WL Ross & Co. says that $110.2 million is a fair price for 34% of the stock of Navigator Holdings Ltd. Elliott Management Corp. argued the price is too low and should include a control premium. A hearing on whether Ross can buy the Navigator stock was scheduled for a Sept. 19 hearing before the bankruptcy judge in the liquidation of the defunct brokerage Lehman Brothers Inc. The sale was negotiated by Lehman brokerage trustee James W. Giddens. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. Lehman is set to make its first payment to creditors under its $65 billion payout plan on April 17, 2012. About WL Ross & Co. Headquartered in New York, WL Ross & Co. LLC -- http://www.wlross.com/-- is a part of Invesco Ltd., since October 2006, that invests in and restructures financially distressed companies. The company manages assets for institutional investors in the United States, Europe and Asia. It is dedicated to private investments and fund management for institutional investors and family offices. It has sponsored alternative investments, including private equity funds, co-investment vehicles and hedge funds in the steel, textile, coal, automotive and financial services. LOCAL TV: S&P Cuts Corporate Credit Rating to 'B'; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Newport, Ky.-based Local TV LLC and operating subsidiary Local TV Finance LLC (which S&P analyzed on a consolidated basis) to 'B' from 'B+'. The rating outlook is stable. "In addition, we revised our recovery rating on the company's senior secured debt to '2' from '1' (90% to 100% recovery expectation) and lowered our ratings on the senior secured debt to 'B+' from 'BB', in accordance with our notching criteria for a '2' recovery rating. The senior secured debt consists of a $250.8 million term loan (including the $70 million addition) and an undrawn $15 million revolving credit facility due 2015," S&P said. "We also revised our recovery rating on Local TV Finance LLC's senior unsecured notes to '6', indicating our expectation of negligible (0% to 10%) recovery for noteholders in the event of a payment default, from '5' (10% to 30% recovery expectation). The issue-level rating on the debt was lowered to 'CCC+' (two notches below the 'B' corporate credit rating) from 'B', in accordance with our notching criteria for a '6' recovery rating," S&P said. "The revision of the recovery ratings reflects our inclusion of more debt at default than we used in our previous simulated default scenario, which results in a lower estimated recovery for lenders," S&P said. "The corporate credit rating on Local TV is based on our expectation that the company will be able to maintain adequate liquidity despite its high leverage," said Standard & Poor's credit analyst Jeanne Shoesmith. "We consider the company's business risk profile 'fair' (based on our criteria), reflecting the company's leading news ratings in its markets and EBITDA margin that compares favorably with its peers'. Local TV's pro forma ratio of lease-adjusted debt to EBITDA of 6.8x (6.5x lease-adjusted debt to trailing-eight-quarter average EBITDA) underpins our view of the company's financial risk profile as 'highly leveraged.'" MEDFORD VILLAGE: Sept. 24 Hearing on Lennar's Case Dismissal Bid ---------------------------------------------------------------- Dow Jones Newswires reports that the owners of New Jersey development Medford Village said in court documents that it belongs in Chapter 11, despite creditor Lennar Corp.'s arguments that the project's filing was made in "bad faith." The 280-acre project by developer Stephen Samost called the Miami home builder's bad faith allegations "disingenuous at best," the Dow Jones report says, citing documents filed with the U.S. Bankruptcy Court in Camden, New Jersey. "The record ultimately shows that the debtor properly and adequately exercised state-court remedies available to it before filing its bankruptcy petition to reorganize its affairs. In short, these improper-conduct contentions have no merit and must be rejected in their entirety," the report quotes Medford as saying. According to the report, late last month, Lennar asked the Court to dismiss Medford's bankruptcy case so it can execute a foreclose judgment and move forward with a sheriff's sale of the Medford project. According to the report, Lennar had argued that the bankruptcy filing is "a litigation tactic in a two-party dispute between Lennar and the debtor, and there is no ability to reorganize." It added that Medford filed for bankruptcy "on the eve of the sheriff's sale." The dispute that led to the foreclosure judgment dates back to 2006, when Lennar gave Medford a $6 million deposit secured by the mortgage on the Medford property. The report relates Lennar said it entered into an agreement to buy and develop the property. But the deal, worth $80 million, fell apart amid the turmoil in credit markets, which constituted a default. Lennar said it sought foreclosure judgment, which it was granted in 2010. Medford challenged that judgment, but it was confirmed March 30, 2012. Medford also said in its response, filed Monday, that it is contesting Lennar's $6 million claim, calling the deposit nonrefundable, the report notes. The report says a hearing on the matter is scheduled for Sept. 24, 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. MF GLOBAL: Former Trader Starts New Hedge Fund ---------------------------------------------- Bloomberg News' Kelly Bit reports that Daniel Bystrom, former head of equity derivatives trading at MF Global Inc., and Neil Boyarsky plan to start Hawksfield Capital LLC, a New York-based equity volatility hedge fund, by the end of this month. Hawksfield Capital will start with $10 million to $20 million of Messrs. Bystrom and Boyarsky's own money, as well as capital from friends and family, Mr. Bystrom said in a telephone interview, according to Bloomberg. "The fund will deliver returns that are uncorrelated and often negatively correlated to the returns of the typical hedge-fund strategy," Mr. Bystrom said, according to the report. "The opportunity set expands dramatically in times of higher volatility, when most other asset classes are not performing well." Hawksfield's prime broker is Goldman Sachs. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- was one of the world's leading brokers of commodities and listed derivatives. MF Global provided access to more than 70 exchanges around the world. The firm was also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Chapter 11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has retained Capstone Advisory Group LLC as financial advisor. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. NEXSTAR BROADCASTING: Extends Employment of Pres. & CEO to 2016 --------------------------------------------------------------- Pursuant to authorization from the Compensation Committee, Nexstar Broadcasting, Inc., entered into an addendum to the Executive Employment Agreement with Perry A. Sook, the Company's president and chief executive officer, dated as of Jan. 5, 1998, as amended. The addendum extends the term of Mr. Sook's employment with the Company until Dec. 31, 2016, with automatic renewal provided for successive one-year periods, subject to earlier termination under specified circumstances. The amendment modifies Mr. Sook's base salary: Period Base Salary ------ ----------- From Jan. 1, 2013, through Dec. 31, 2013 $1,200,000 From Jan. 1, 2014, through Dec. 31, 2014 $1,300,000 From Jan. 1, 2015, through Dec. 31, 2015 $1,400,000 After Dec. 31, 2015 $1,500,000 In addition, Mr. Sook will be eligible to receive an annual bonus based on, among other things, whether the Company achieved the economic targets established by the Compensation Committee for that fiscal year and any other goals established for him by the Compensation Committee. Period Bonus ------ ------------ From Jan. 1, 2013, through Dec. 31, 2013 $1,200,000 From Jan. 1, 2014, through Dec. 31, 2014 $1,300,000 From Jan. 1, 2015, through Dec. 31, 2015 $1,400,000 After Dec. 31, 2015 $1,500,000 In addition, Mr. Sook was granted options to purchase 1,000,000 shares of the Company's Class A Common Stock at the market closing price of $9.60 per share on the date of grant. Of these options, 400,000 were granted under the Company's 2012 Incentive Equity Plan, but will be forfeited if stockholder approval of the Company's 2012 Incentive Equity Plan is not obtained within 90 days after the Effective Date. A copy of the Addendum is available for free at: http://is.gd/Vf3ROt About Nexstar Broadcasting Group Irving, Texas-based Nexstar Broadcasting Group Inc. currently owns, operates, programs or provides sales and other services to 62 television stations in 34 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama, New York, Rhode Island, Utah and Florida. Nexstar's television station group includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches approximately 13 million viewers or approximately 11.5% of all U.S. television households. The Company reported a net loss of $11.89 million in 2011, a net loss of $1.81 million in 2010, and a net loss of $12.61 million in 2009. The Company's balance sheet at June 30, 2012, showed $566.34 million in total assets, $736.93 million in total liabilities and a $170.58 million total stockholders' deficit. * * * As reported by the Troubled Company Reporter on Aug. 30, 2010, Standard & Poor's Ratings Services raised its corporate credit rating on Nexstar Broadcasting Group to 'B' from 'B-'. The rating outlook is stable. "The 'B' corporate credit rating reflects S&P's expectation that Nexstar's core ad revenue will continue growing modestly in 2010 and 2011," said Standard & Poor's credit analyst Deborah Kinzer. The EBITDA growth resulting from the rebound in core advertising, combined with political ad revenue from the 2010 midterm elections, should, in S&P's view, enable Nexstar to reduce its leverage significantly by the end of the year. NIELSEN FINANCE: S&P Gives 'BB-' Rating on $750MM Senior Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating and '5' recovery rating to the $750 million of proposed senior notes due 2020 to be issued by co-borrowers Nielsen Finance LLC and Nielsen Finance Co. Both entities are wholly owned entities of parent company The Nielsen Company B.V., a subsidiary of ultimate parent Nielsen Holdings N.V. (BB/Stable/--). "The '5' recovery rating indicates our expectations of modest (10% to 30%) recovery for debtholders in the event of a payment default. The company plans to use the proceeds, in part, to redeem its $325 million of 11.5% senior notes due 2016 and repay its $500 million of 8.5% fixed-rate senior secured term loan due 2017. We will withdraw our ratings on the 2016 notes and 2017 term loan when that transaction closes," S&P said. "At the same time, we revised our recovery rating on Nielsen's senior secured debt to '1', indicating our expectation of very high (90% to 100%) recovery for lenders in the event of a payment default from '2' (70% to 90% recovery expectation) and raised our issue-level rating on this debt to 'BBB-' (two notches higher than our 'BB' corporate credit rating on the company) from 'BB+', in accordance with our notching criteria for a recovery rating of '1'. The anticipated repayment of the 2017 senior secured term loan will result in a lower senior secured debt balance and thus greater recovery prospects for senior secured debt holders, in our opinion," S&P said. All other ratings, including the 'BB' corporate credit rating on parent Nielsen Holdings N.V., were affirmed. The outlook is stable. "The ratings on parent company Nielsen Holding N.V. reflect our expectation that the company will keep reducing leverage, although we expect leverage to be high over the near term," said Standard & Poor's credit analysts Tulip Lim. "Our rating also reflects our expectation that operating performance will remain stable, given Nielsen's significant sources of recurring revenue and its strong market position. We expect revenue to grow at a low- to mid-single-digit percentage rate on a constant-currency basis this year. These factors, and Nielsen's strong market positions in its two principal businesses, underpin our assessment of its business risk profile as 'satisfactory,' based on our criteria. We view the company's financial risk profile as 'aggressive' because of its still-high leverage," S&P said. NIFTUS LLC: Can Employ Copeland & Bieger as Chapter 11 Attorneys ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Virginia has authorized Niftus, LLC, to employ the firm of Copeland & Bieger, P.C., as counsel for the Debtors. As reported in the TCR on June 21, 2012, the firm's hourly billing rates are: $300 per hour for attorneys; and $75 per hour for paraprofessionals The firm represented the Debtor pre-bankruptcy as legal counsel relating to a lawsuit filed in Bland County, Virginia, by First Century Bank, N.A. In August 2011, the firm received $3,000 as retainer in connection with the representation. Robert T. Copeland, Esq., a member of the firm, says neither the firm nor its members have any interest adverse to the Debtor or the bankruptcy estate. Mr. Copeland also said his firm is waiving any fees and expenses that might be outstanding for services rendered prior to the petition date. About Niftus Niftus, LLC, filed a bare-bones Chapter 11 petition (Bankr. W.D. Va. Case No. 12-71123) on June 11 in Roanoke, Virginia. Niftus, a management consulting services provider from Bluefield, Virginia, estimated assets of up to $50 million and debts of less than $10 million. Chief Judge William F. Stone Jr. oversees the case. Copeland & Bieger, P.C., serves as the Debtor's counsel. NIFTUS LLC: Can Employ Reed Smith as Special Counsel ---------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Virginia has authorized Niftus, LLC, to employ the firm of Reed Smith, LLP, as special counsel to the Debtor, effective July 23, 2012. Reed Smith will maintain records and, subject to further order of the Court, compensation and expenses will be allowed pursuant to 11 U.S.C. Section 330. About Niftus Niftus, LLC, filed a bare-bones Chapter 11 petition (Bankr. W.D. Va. Case No. 12-71123) on June 11 in Roanoke, Virginia. Niftus, a management consulting services provider from Bluefield, Virginia, estimated assets of up to $50 million and debts of less than $10 million. Chief Judge William F. Stone Jr. oversees the case. Copeland & Bieger, P.C., serves as the Debtor's counsel. NIFTUS LLC: U.S. Trustee Has Not Appointed a Creditors Committee ---------------------------------------------------------------- W. Clarkson McDow, Jr., the United States Trustee for Region 4, has not appointed an unsecured creditors committee in the Chapter 11 case of Niftus, LLC. According to the statement, the number of persons eligible or willing to serve on such a committee is presently insufficient to form an unsecured creditors committee. The United States Trustee will appoint an unsecured creditors committee upon the request of an adequate number of unsecured creditors About Niftus Niftus, LLC, filed a bare-bones Chapter 11 petition (Bankr. W.D. Va. Case No. 12-71123) on June 11 in Roanoke, Virginia. Niftus, a management consulting services provider from Bluefield, Virginia, estimated assets of up to $50 million and debts of less than $10 million. Chief Judge William F. Stone Jr. oversees the case. Copeland & Bieger, P.C., serves as the Debtor's counsel. NORTH & HARLEM: Case Summary & 7 Unsecured Creditors ---------------------------------------------------- Debtor: North & Harlem Plaza Investments, LLC 6440 N. Hamlin Avenue Lincolnwood, IL 60712 Bankruptcy Case No.: 12-36441 Chapter 11 Petition Date: September 13, 2012 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Donald R Cassling Debtor's Counsel: Ethan Ostrow, Esq. BROWN, UDELL, POMERANTZ & DELRAHIM, LTD. 1332 North Halsted Street, Suite 100 Chicago, IL 60642 Tel: (312) 475-9900 Fax: (312) 475-1188 E-mail: eostrow@bupdlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its seven largest unsecured creditors is available for free at: http://bankrupt.com/misc/ilnb12-36441.pdf The petition was signed by Haresh Shah, manager. OPDE US: Unit of Spanish Solar Firms Files for Chapter 7 -------------------------------------------------------- Melanie Turner, writing for the Sacramento Business Journal, reports that OPDE U.S. Corp., the West Sacramento-based U.S. subsidiary of a Spanish solar company, filed for Chapter 7 bankruptcy on Sept. 5 after failing to find a buyer for the solar power it planned to produce. The report says the Company, which has recently closed its doors, listed fewer than 50 creditors, between $100,000 and $500,000 in assets and between $1 million and $10 million in liabilities, according to court documents filed in U.S. Bankruptcy Court for the Eastern District of California in Sacramento. The report notes OPDE U.S. several years ago planned to build a 20-megawatt power plant on Port of West Sacramento property. OROMIN EXPLORATIONS: Recurring Losses Cue Going Concern Doubt ------------------------------------------------------------- Davidson & Company LLP, in Vancouver, Canada, expressed substantial doubt about Oromin Explorations Ltd.'s ability to continue as a going concern, following its audit of the Company's financial position and results of operations for the fiscal year ended Feb. 29, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and has no current source of revenue. The Company reported a net loss of C$8.2 million on C$0 revenue for the fiscal year ended Feb. 29, 2012, compared with a net loss of C$9.8 million on C$0 revenue for the fiscal year ended Feb. 28, 2011. The Company has incurred net losses to date. Its accumulated deficit as of Feb. 29, 2012, was C$50.1 million. The Company has not yet had any revenue from the exploration activities on its property. At Feb. 29, 2012, the Company's balance sheet showed C$81.0 million in total assets, C$286,256 in total current liabilities, and total equity of C$80.7 million. A copy of the Form 20-F is available at http://is.gd/XifNKz A copy of the Form 20-F/A containing the revised Independent Auditors' Report of Davidson & Company on the Company's consolidated financial statements for the fiscal year ended Feb. 29, 2012, expanding upon the "Emphasis of Matter" paragraph to comply with Public Company Accounting Oversight Board ("PCAOB") standards regarding the description of the Company's going concern uncertainties is available at http://is.gd/cPx7Vk Vancouver, Canada-based Oromin Explorations Ltd. is a British Columbia company in the business of exploring its resource properties. The Company was incorporated pursuant to the Company Act (British Columbia) on Jan. 25, 1980, under the name "Maple Leaf Petroleum Ltd.". The Company's principal activity during the last three financial years has been financing and carrying out exploration on the Oromin Joint Venture Group ("OJVG") Property in Senegal. In July 2009 the Company also drilled an unsuccessful test well on the Santa Rosa Property in Central Argentina. PAR PHARMACEUTICAL: S&P Keeps 'B+' CCR on Term Loan B Upsizing -------------------------------------------------------------- Standard & Poor's Ratings Services said all of its preliminary ratings, including its preliminary 'B+' corporate credit rating, on Woodcliff Lake, N.J.-based pharmaceutical company Par Pharmaceutical Companies Inc. remain unchanged following a change to deal terms. The changes include the $75 million upsize to the term loan B, lowered pricing, and an expected improvement to EBITDA beginning in 2013 following a just-announced favorable study result. The additional proceeds from the term loan will be used for general corporate purposes, including acquisitions. The issue rating on the term loan B remains preliminary 'B+'. "The recovery rating remains at preliminary '3', indicating our expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default," S&P said. "The rating on Par reflects our assessment that the company has a 'weak' business profile (as per our criteria) because of its position as the fifth-largest generic pharmaceutical company and its lack of scale compared with other larger generic companies. We also believe that Par has an 'aggressive' financial risk profile. Despite pro forma leverage of 5.3x as of June 30, 2012, we expect that EBITDA growth and the use of some free cash flow for debt reduction will bring leverage to less than 5x over the next year. Par is a manufacturer and marketer of a broad portfolio of generic drugs," S&P said. RATINGS LIST Par Pharmaceutical Companies Inc. Corporate Credit Rating B+(prelim)/Stable/-- $1.055B sr secd term loan B B+(prelim) Recovery Rating 3(prelim) PARAMOUNT RESOURCES: Moody's May Cut Unsec. Notes Rating to Caa2 ---------------------------------------------------------------- Moody's Investors Service said that the proposed expansion of Paramount Resources Ltd.'s secured credit facility to C$600 million from C$300 million, if completed as contemplated, will cause a downgrade of the company's senior unsecured notes rating to Caa2 from Caa1, but will not impact Paramount's B3 Corporate Family Rating. Paramount Resources Ltd. is a Calgary, Alberta-based exploration and production company that produced approximately 18,200 barrels of oil equivalent per day (net) in the twelve months ending June 30, 2012. Production was 80% natural gas. PATHEON INC: Moody's Affirms 'B3' CFR/PDR; Outlook Stable --------------------------------------------------------- Moody's Investors Servic affirmed the ratings of Patheon, Inc., including the Corporate Family Rating and Probability of Default Rating of B3, and changed the rating outlook to stable from negative. The stabilization of the rating outlook reflects the significant improvement in EBITDA over the past two quarters, leading Moody's to believe that Patheon will be able to generate annual EBITDA of at least $75-$80 million (excluding any non- recurring items such as consulting fees) on a go-forward basis. Moody's views this as the level of EBITDA necessary to cover Patheon's fixed charges (interest, taxes and capital expenditures) and generate break-even free cash flow. The change in outlook to stable also reflects the view that Patheon will maintain adequate liquidity over the next twelve months (signified by the SGL-3 rating) characterized by cash and available borrowing capacity of at least $60 million in each quarter and no financial maintenance covenant tests. Ratings affirmed: $75 million ABL facility due April 2014, B2 (LGD 3, 43%) $280 million Senior Secured notes due April 2017, B3 (LGD 3, 46%) Corporate Family Rating, B3 Probability of Default Rating, B3 Speculative Grade Liquidity rating of SGL-3 The rating outlook was changed to stable from negative. Ratings Rationale The B3 Corporate Family Rating reflects Patheon's low returns on invested capital and sustained negative cash flow, as well as broader challenges in the contract manufacturing industry, including overcapacity. Further, the significant fixed costs of the business lead to high operating leverage and margins that are extremely sensitive to revenue and product mix. This characteristic, as well as the risk of project cancellations inherent in the contract manufacturing industry, lend a measure of volatility to both revenues and profitability. Factors supporting the rating include Moody's expectation for adjusted debt to EBITDA of less than 5.0 times and continued progress by the new management team in improving the company's operating performance. The ratings are also supported by the company's leading market position in the pharmaceutical contract manufacturing arena and Moody's expectation that demand from pharmaceutical companies for contract manufacturing services will be sound over the long-term. Moody's could downgrade the ratings if it believes that interest coverage (as defined as EBITDA less capital expenditures to interest expense) will be sustained below 1.0 times, or that free cash flow will remain negative (exclusive of unusual items such as severance). Any concern about the company's ability to refinance or extend its ABL could also lead to a downgrade. Moody's could upgrade the ratings if the company is able to continue to improve profitability, reduce earnings volatility and sustain debt to EBITDA that is below 4.0 times and interest coverage that is above 1.5 times, with sustained positive free cash flow. The principal methodology used in rating Patheon Inc. was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Patheon Inc., headquartered in Mississauga, Ontario, Canada is a leading provider of commercial manufacturing and pharmaceutical development services ("PDS") of branded and generic prescription drugs to the international pharmaceutical industry. Patheon's stock is publicly traded on the Toronto Stock Exchange, and the company files with the SEC. JLL Partners, a private equity firm, owns approximately 56% of the company's restricted voting shares. For the twelve month period ended July 31, 2012 Patheon reported revenues of $721 million. PEREGRINE FINANCIAL: Wasendorf Son Sues U.S. Bank ------------------------------------------------- Jacob Bunge, writing for Dow Jones Newswires, reports that the son of Peregrine Financial Group Inc. chief Russell Wasendorf Sr. filed a lawsuit against U.S. Bank, a unit of U.S. Bancorp, Peregrine's bank, charging it failed to properly supervise the movement of customer funds. In the suit, the son, Russell Wasendorf Jr., president of Peregrine, and his wife also allege that Mr. Wasendorf Sr. had help in covering up the years-long fraud that shook the U.S. futures industry. According to Dow Jones, the lawsuit raises questions about a May 2011 audit of Peregrine by the National Futures Association, an independent regulatory body. During the audit, Peregrine staff asked U.S. Bank to supply account information directly to NFA auditors, which showed the firm held about $7.2 million in a customer account, according to e-mails previously reviewed by The Wall Street Journal. Three days later, the NFA received a fax delivered via email that showed Peregrine account's balance at $218.7 million, according to the emails. Before that fax, the lawsuit says, a woman identifying herself as Hope Timmerman told NFA auditors that the $7.2 million account balance was "erroneous" and a "corrected confirmation" showing the larger figure "would be faxed shortly." The lawsuit doesn't specify how Mr. Wasendorf Jr. came by the information. Dow Jones reports a spokesman for U.S. Bank said Monday Mr. Wasendorf Jr.'s lawsuit was "entirely without merit" and "an outrageous attempt by the Wasendorfs to deflect the blame and the financial obligations from the collapse of Peregrine caused by Mr. Wasendorf Sr.'s criminal activity and the failure of their own management and internal controls." Dow Jones says Nick Iavarone, Esq., Mr. Wasendorf Jr.'s attorney, declined to comment. 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. PIAZZA BELLA: Case Summary & 3 Unsecured Creditors -------------------------------------------------- Debtor: Piazza Bella Centro LLC 1101 Valencia Drive Escondido, CA 92025-6733 Bankruptcy Case No.: 12-12602 Chapter 11 Petition Date: September 13, 2012 Court: U.S. Bankruptcy Court Southern District of California (San Diego) Judge: Margaret M. Mann Debtor's Counsel: Cecilia Chen, Esq. LAW OFFICE OF CECILIA CHEN 1901 1st Avenue, Suite 217B San Diego, CA 92101 Tel: (858) 633-0171 E-mail: cchen@cclegalgroup.com Scheduled Assets: $2,621,756 Scheduled Liabilities: $2,064,485 A copy of the Company's list of its three unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/casb12-12602.pdf The petition was signed by Angelo G. Moulios, manager. PTC ALLIANCE: Moody's Assigns 'B2' CFR/PDR; Outlook Stable ---------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating and a B3 Probability of Default Rating to PTC Alliance Holdings Corporation. Moody's also assigned a B2 rating to the company's $225 million Senior Secured Term Loan B due 2018. Proceeds from the term loan facility will be used to pay a shareholder dividend, to fund future growth initiatives and for general corporate purposes. The rating outlook is stable. The following ratings/assessments were affected by this action: Corporate Family Rating assigned at B2; Probability Default Rating assigned at B3; and, Senior Secured Term Loan B due 2018 rated B2 (LGD3, 36%) This is a newly initiated rating and is Moody's first press release on this issuer. Ratings Rationale The B2 corporate family rating reflects PTC Alliance Corporation's modest size relative to other steel companies, its reliance on a few top customers for a material portion of its sales, exposure to the cyclicality of the steel industry, and Moody's expectations that the company will generate limited free cash flow due to its plan to invest in additional capacity to diversify its tubular product offering. These factors are somewhat balanced by the company's adequate liquidity, healthy operating margins, significant barriers to entry, leading position in niche markets, strong blue chip customer base and moderate debt leverage. PTC was formed in 2000 by the merger of Pittsburgh Tube company and J.H. Roberts Industries. The company's strategy is to pursue niche areas of the steel fabrication industry by employing leading technologies. The company's business remains susceptible to the volatility of the steel industry and the end markets, like auto and construction. PTC is controlled by Black Diamond Management, a private equity firm, since 2003. The company filed a voluntary bankruptcy in 2006 to restructure its balance sheet, and again in 2009 due to the severe recession, which led to the elimination of union contracts, closure of unprofitable facilities and a lower cost structure. The stable outlook presumes the company will carefully balance its leverage and other credit metrics with its growth strategy and maintain adjusted debt-to-EBITDA below 4.0x and EBIT-to-Interest above 2.5x. An upgrade in the near-term is not likely given that PTC's scale remains a limitation. However, the ratings could experience upward pressure if the company continues to grow organically, maintains or reduces its financial leverage, sustain its current margins, generates positive free cash flow, and executes well on its expansion strategy. Leverage exceeding 4.0x, larger debt-financed acquisitions, an adverse change in its liquidity position, EBIT- to-interest expense trending below 2.5x or a substantial decline in demand from its end markets may result in negative rating pressure. The principal methodology used in rating PTC Alliance Holdings Corp. was the Global Steel 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. PTC Alliance Holdings Corporation, headquartered in Wexford, PA, is a leading manufacturer of welded and cold drawn mechanical steel tubing and tubular shapes, fabricated parts, precision components and chrome-plated rod. PTC's major end markets include construction and agricultural equipment, automotive and heavy truck components and industrial machinery. PTC generated $432 million in revenue for the 12-month period ending June 30, 2012. QUIGLEY CO: Bankruptcy Law Protects Parent Cos., Pfizer Says ------------------------------------------------------------ Juan Carlos Rodriguez at Bankruptcy Law360 reports that Pfizer Inc. has asked the U.S. Supreme Court to overturn an appeals court ruling that the company must face asbestos litigation related to a bankrupt subsidiary, arguing federal bankruptcy law offers protection for parent companies in these situations. Bankruptcy Law360 relates that the subsidiary, Quigley Co. Inc., filed for Chapter 11 bankruptcy in 2004 while facing an estimated 160,000 asbestos suits. Plaintiffs then went after Pfizer directly, but the bankruptcy court entered an injunction enjoining asbestos claims against Pfizer during Quigley's bankruptcy. About Quigley Co. Quigley Co. was acquired by Pfizer in 1968 and sold small amounts of products containing asbestos until the early 1970s. In September 2004, Pfizer and Quigley took steps that were intended to resolve all pending and future claims against the Company and Quigley in which the claimants allege personal injury from exposure to Quigley products containing asbestos, silica or mixed dust. Quigley filed for bankruptcy in 2004 and has a Chapter 11 plan and a settlement with Chrysler. Quigley filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 04-15739) on Sept. 3, 2004, to implement a proposed global resolution of all pending and future asbestos- related personal injury liabilities. Lawrence V. Gelber, Esq., and Michael L. Cook, Esq., at Schulte Roth & Zabel LLP, represent the Debtor in its restructuring efforts. Elihu Inselbuchm Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it disclosed $155,187,000 in total assets and $141,933,000 in total debts. In April 2011, the bankruptcy judge approved a plan-support agreement with Pfizer and an ad hoc committee representing 30,000 asbestors claimants. A May 20, 2011 opinion by District Judge Richard Holwell concluded that Pfizer was directly liable for some asbestos claims arising from products sold by its now non-operating subsidiary Quigley. RADNET MANAGEMENT: S&P Rates $437.5MM Secured Credit 'B+' --------------------------------------------------------- Standard & Poor's Ratings Services assigned RadNet Management Inc.'s $437.5 million senior secured credit facility its issue- level rating of 'B+' (one notch higher than the 'B' corporate credit rating on the company) with a recovery rating of '2', indicating its expectation of substantial (70% to 90%) recovery for lenders in the event of a payment default. Existing ratings on the company, including the 'B' corporate credit rating, were affirmed. "We believe that the new term loan will repay a portion of the outstanding revolver balance, and that the increase in incremental debt outstanding will be minimal," S&P said. "The ratings on Los Angeles-based RadNet Management Inc., the wholly owned operating subsidiary of RadNet Inc., reflect its 'weak' business risk profile and 'highly leveraged' financial risk profile," according to Standard & Poor's Ratings Services' criteria. "RadNet operates in a fragmented and highly competitive industry that has been hurt by the weak U.S. economy, and faces reimbursement risk," said Standard & Poor's credit analyst Cheryl Richer. "To diversify its revenue base, RadNet expanded into ancillary businesses; they do not yet materially contribute to product diversity or EBITDA. The "highly leveraged" financial profile has been stretched by acquisitions; adjusted debt leverage was 5.7x for the 12 months ended June 30, 2012." "RadNet has considerable dependence (in California) on an affiliated entity, Beverly Radiology Medical Group III (BRMG), for its professional staffing, and partnership arrangements with other ancillary businesses that are owned by BRMG, such as Breastlink Medical Group. The CEO of RadNet Inc. owns about 14% and 99% of RadNet and BRMG, respectively. Because of the interdependence and common ownership among RadNet, RadNet Inc., and BRMG, we view them as a consolidated entity," S&P said. "As of June 30, 2012, RadNet operated 237 diagnostic imaging centers in seven states, primarily California and the east coast. Its growth strategy relies heavily on acquisitions, which have contributed meaningfully to its growth over the years. In November 2011, RadNet acquired the majority of CML for about $38 million, increasing its Maryland and Delaware presence from 61 to 77 centers, and giving it a new platform in Rhode Island. A single business focus is incorporated into RadNet's 'weak' business risk profile, as well as high capital intensity and relatively low barriers to entry. While RadNet is subject to variable fees from third-party payors, its concentration in certain geographies improves its negotiating power with private insurers. Medicare exposure, at about 20% of revenues, is manageable. Capitated managed care contracts (15% of revenues) provide revenue stability, albeit with relatively low margins. Although the diagnostic imaging sector has performed worse than the aggregate health care industry, RadNet appears to be taking market share. The majority of sites offer multimodality imaging services, a key point of differentiation from competitors. Over the longer term, organic demand should increase because of the aging population and the benefits of imaging itself, aiding the diagnosis of an increasing variety of diseases," S&P said. RadNet has been acquisitive, contributing to the "highly leveraged" financial risk profile. Acquisition spending totaled $41 million for the 12 months ended June 30, 2012, requiring RadNet to draw on its revolving credit facility; $60 million was outstanding on the revolver at June 30, 2012. While ongoing debt-financed acquisitions provided growth opportunities, they contributed to sustained aggressive debt leverage. RHODE ISLAND HEALTH: Moody's Corrects August 28 Rating Release -------------------------------------------------------------- Moody's Investors Service has issued a correction to the August 28, 2012 rating release on Rhode Island Health and Education Building Corporation Bond Issue, Series 2009E. Revised release is as follows: Moody's Investors Service has confirmed the City of Woonsocket's (RI) underlying rating of B2 and has revised the outlook to negative, affecting $225 million in long-term debt. This rating had been placed on review for downgrade on May 24, 2012 following a downgrade due to the continued deterioration of the city's school operating financial position and severely weakened liquidity position. Concurrently, Moody's has also confirmed the B2 underlying rating on the Rhode Island Health and Education Building Corporation Bond Issue, Series 2009E, for which the city is the sole obligor. All outstanding debt is secured by the city's general obligation, unlimited tax pledge. Summary Ratings Rationale The city has successfully resolved its liquidity crisis after a state-appointed budget oversight commission accelerated state aid, allowing Woonsocket to meet debt service payment at due dates. However, the city remains pressured given an existing accumulated deficit due to ongoing structural imbalance in school operations. The B2 rating reflects the city's depleted financial position and strained liquidity; persistent budgetary structural imbalance, including underfunding of the local pension plan; a high debt burden; and a moderately-sized tax base with low socioeconomic wealth levels. The negative outlook reflects the challenges that the city faces in renegotiating with its collective bargaining units to make substantial operating expenditure cuts while simultaneously raising revenues to eliminate the fiscal 2013 budget gap and obtain structural balance. Strengths - Improvement in general fund financial management practices and oversight - Demonstrated willingness to increase revenues in a difficult economic environment - State appointed budget oversight commission Challenges - Persistent deficits in school operations - Structurally imbalanced budget in the current fiscal year - History of failed attempts to enact supplemental tax increases - Increasing fixed costs and long-term liabilities - Weak liquidity - High debt burden Outlook The negative outlook reflects the challenges that Woonsocket faces in making substantial operating expenditure cuts, which could require negotiations with its collective bargaining units, while simultaneously raising revenues to eliminate the fiscal 2013 budget gap and obtain structural balance. What Could Make The Rating Go UP - Improved liquidity and reduced reliance on cash flow borrowing - Progress toward successful elimination of the accumulated deficit in the School Fund - Improved funding of long-term liabilities What Could Make The Rating Go DOWN - Ongoing structural imbalance in General Fund or School operations - Inability to eliminate the 2013 budget gap through expenditure reductions or tax increases - Significant deterioration of liquidity, including the inability to place cash flow notes - Decline in pension funding status Principal Methodology The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. ROCKWOOD SPECIALTIES: Moody's Rates $750MM Sr. Unsec. Notes 'Ba2' ----------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Rockwood Specialties Group, Inc.'s new $750 million Senior Unsecured Notes due 2020. Moody's also affirmed Rockwood's other ratings (Ba1 Corporate Family Rating [CFR]). Proceeds from the new notes will be used for general corporate purposes, which may include acquisitions, capital expenditures and repayment of debt. The rating outlook is stable. The following summarizes the ratings: Rockwood Specialties Group, Inc, Ratings assigned: Sr Unsecured Notes due 2020 to Ba2 (LGD5, 82%) Sr Unsecured Shelf Registration -- (P)Ba2 Ratings affirmed: Corporate Family Rating -- Ba1 Probability of Default Rating -- Ba1 Speculative Grade Liquidity Rating -- SGL1 Sr Sec Revolving Credit Facility due 2016 to Ba1 (LGD3, 38%) from Ba1 (LGD3, 45%)* Sr Sec Term Loan A due 2017 to Ba1 (LGD3, 38%) from Ba1 (LGD3, 45%)* Sr Sec Term Loan B due 2018 to Ba1 (LGD3, 38%) from Ba1 (LGD3, 45%)* Outlook is Stable. * Ratings could be upgraded should the company not proceed with the Talison acquisition and use proceeds to pay down secured term loan debt. Ratings Rationale Rockwood's Ba1 Corporate Family Rating (CFR) is supported by its business profile, size ($3.6 billion in revenues), relatively stable earnings, attractive margins, and positive free cash flow through the business cycle. The company has a diverse set of inorganic chemical businesses that provide diversification of revenues and have relatively little exposure to volatile petrochemical feedstock prices. Rockwood has significant debt balances ($1.77 billion as of June 30, 2012) as well as elevated cash balances ($343 million for Rockwood Holdings, Inc and subsidiaries). Leverage and net leverage metrics including Moody's standard analytical adjustments are strong for a Ba1 chemical company (2.8x Debt/EBITDA and 2.4x Net Debt/EBITDA, respectively), but Moody's would expect this given the peak of the industry cycle conditions being experienced by its titanium dioxide (TiO2) business. The aforementioned debt levels include the $507 million of debt at its 61% owned titanium dioxide joint venture which is fully consolidated on Rockwood's balance sheet. The debt-financed acquisition of Talison Lithium Limited (Talison) for CAD724 million (approximately US$745 million) announced in August (and expected to close in the fourth quarter) is a modest credit negative. Rockwood's strong credit metrics prior to the acquisition, elevated cash balance and demonstrated ability to generate free cash flow should enable it to return credit metrics to near investment grade levels within the next four quarters, despite an elevated valuation multiple. Talison will provide a high quality lithium source, sufficient reserves at its Australian mine to support future growth in lithium demand and exposure to Asian markets (Talison has a large market share in China). Talison reported AUD10.5 million and AUD34.0 million in EBITDA on sales of AUD35 million and AUD120 million, respectively, for the three months and fiscal year ended June 30, 2012. Higher annual profits are expected in fiscal year 2013 as a result of recent capacity expansion which nearly doubled its effective capacity and higher sales prices in effect on Sept. 18. Over the next several years, Rockwood will have the opportunity to make investments in Talison to build capacity for lithium derivative chemicals. The rating outlook is stable. Further positive rating action (to an investment grade rating) will depend on management's financial strategy. If management moves to an unsecured capital structure and formally adopts or targets financial metrics that would support an investment grade credit rating, Moody's would likely raise the company's rating. Moody's could downgrade the company's ratings if debt financed acquisitions caused Retained Cash Flow/Debt to fall below 15% and Debt/EBITDA to rise above 3.5x on a sustainable basis. The ratings on the existing senior secured credit facilities were affirmed, but could be upgraded if the company fails to complete the Talison acquisition as planned and uses the proceeds from the new notes to pay down its secured term loans. The principal methodology used in this rating was Moody's Global Chemical Industry rating 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. Rockwood Specialties Group, Inc. (Rockwood), headquartered in Princeton, New Jersey, is a wholly owned subsidiary of Rockwood Holdings, Inc. (Holdings). Rockwood produces of a variety of specialty chemicals and advanced materials, including pigments, additives, surface treatment chemicals, ceramics, and lithium for use in businesses ranging from life sciences to automotive manufacturing. Rockwood operates through five business segments: Lithium, Surface Treatment, Performance Additives, Titanium Dioxide Pigments and Advanced Ceramics. Kohlberg Kravis Roberts & Co. L.P., its former equity sponsor, owns approximately 9% of Holdings' shares (the remainder are publicly held), and occupies two of the seven seats on the board of directors. Revenues were $3.6 billion for the twelve months ended June 30, 2012. ROCKWOOD SPECIALITIES: S&P Affirms 'BB+' CCR; Outlook Stable ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on Rockwood Specialties Group Inc. (Rockwood), including its 'BB+' corporate credit rating. "At the same time, we assigned our 'BB' issue rating and our '5' recovery rating to the company's proposed $750 million senior unsecured notes. The '5' recovery rating indicates our expectation for modest recovery (10%-30%) in the event of a payment default. The outlook is stable," S&P said. "We expect the company will use proceeds from the proposed debt issue to fund the planned $732 million acquisition of Australia based lithium producer, Talison Lithium Ltd., and for general corporate purposes," S&P said. "The ratings on Princeton, N.J.-based Rockwood Specialties Group Inc. reflect our assessment of the company's financial risk profile as 'significant' and business risk profile as 'satisfactory'," said credit analyst Paul Kurias. "Our assessment of Rockwood's financial risk profile includes an expectation for a continuation of moderate financial policies." "The stable outlook reflects our expectations that Rockwood will be able to maintain its elevated EBITDA margins even in a scenario of weak economic conditions in key markets. Still, we expect Rockwood will continue its recent trend of growth at rates well above GDP rates in its markets benefiting from its diverse portfolio of specialty businesses, some of which have growth drivers that are not linked to GDP growth. Importantly, we assume management will support credit quality. At the current ratings, we do not anticipate any significant improvement in credit quality. An upgrade in the next year is unlikely given our expectation that the company will focus on integrating its Talison acquisition during that time. We could lower ratings if the ratio of FFO-to- total debt weakened to below 20% with no prospect of immediate recovery. This could happen if debt levels increased meaningfully to support higher-than-expected outlays for acquisitions. We believe such a scenario would include a moderate increase in debt in combination with a revenue decline exceeding the 5% decline considered in our downside scenario, and EBITDA margins dropping below 20%," S&P said. ROTHSTEIN ROSENFELDT: Gibraltar Agrees to $65-Mil. Deal ------------------------------------------------------- Maria Chutchian at Bankruptcy Law360 reports that the trustees for a bankrupt feeder fund and law firm of convicted Ponzi schemer Scott W. Rothstein sought approval for an amended $65 million settlement with a bank Rothstein used in his scam, according to a Monday court filing. Bankruptcy Law360 relates that Robert Furr, Chapter 7 trustee for Banyon 1030-32 LLC, and Herbert M. Stettin, the Chapter 11 Trustee for Rothstein Rosenfeldt Adler PA, have agreed to an injunction enjoining and permanently barring them from any claims against Gibraltar Private Bank and Trust Co. and its directors and officers. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. RYLAND GROUP: Moody's Affirms B1 CFR; Rates Sr. Unsec. Notes B1 --------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the proposed $250 million senior unsecured notes due 2022 of The Ryland Group, Inc., proceeds of which will be used for general corporate purposes, including potential repayment of the existing indebtedness. In the same rating action, Moody's affirmed the company's B1 corporate family and probability of default ratings, B1 rating for its existing senior unsecured notes and convertible senior notes, P(B1) senior unsecured shelf rating, and SGL-2 speculative grade liquidity assessment. The rating outlook is stable. The following rating actions were taken: Proposed $250 million senior unsecured notes due 2022, assigned B1 (LGD4, 52%); Corporate family rating, affirmed at B1; Probability of default rating, affirmed at B1; Existing senior unsecured notes, affirmed at B1 (LGD4, 52%); Existing convertible senior notes, affirmed at B1 (LGD4, 52%); Speculative grade liquidity assessment, affirmed at SGL-2; Stable rating outlook. Ratings Rationale The B1 corporate family rating reflects Moody's expectation that Ryland's key credit metrics will continue improving over the next 12 to 18 months, supported by the rising new orders, closings and revenues as well as by the stability and improvement in average selling prices in certain key markets. Despite this improvement, key credit metrics will remain weak for the rating in the intermediate term, as the homebuilding industry's expected strengthening remains limited by high unemployment, weak consumer confidence, and elevated foreclosure activity. In addition, the company's debt leverage position is elevated and is rising further, pro forma for the proposed note offering, to an adjusted 71% homebuilding debt to capitalization from 66% in July 2012. Additionally, Ryland's cash flow from operations will be negative and cash balances will decline from land purchases and land development expenses as the company replenishes its inventory position. In the fourth quarter of 2011 and in the second quarter of 2012, Ryland was profitable and generated $1 million and $6 million of net income, respectively. In Moody's view, the company is well positioned to reach sustainable profitability in the near term and, as a result, could benefit from the reversal of the deferred tax asset reserve. The rating also considers Ryland's solid liquidity position, bolstered by its unrestricted cash and investments position of $666 million at June 30, 2012, absence of any bank debt covenants with which to comply, and limited off- balance sheet exposure as well as its disciplined operating philosophy. The stable rating outlook reflects Moody's expectation that Ryland will maintain capital structure discipline even as it pursues emerging growth opportunities. Additionally, Moody's outlook incorporates improving credit metrics over the intermediate term. The ratings could be lowered if the company were to continue to underperform its peer group, if adjusted debt leverage were to exceed 65% on a sustained basis, and/or if liquidity weakens such that cash and equivalents fall below $300 million without a backup revolver in place. The ratings could be considered for an upgrade when the company restores its profitability on a sustainable basis and improves debt leverage to below 50% while maintaining strong liquidity. The principal methodology used in rating Ryland was the Global Homebuilding Industry Methodology published in March 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Founded in 1967 and headquartered in Calabasas, CA, The Ryland Group, Inc. is a mid-sized homebuilder with revenues and consolidated net income for the last twelve months ended June 30, 2012 of $990 million and ($19) million, respectively. RYLAND GROUP: S&P Rates $250MM Senior Unsecured Notes 'BB-' ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating and '4' recovery rating to The Ryland Group Inc.'s proposed $250 million senior unsecured notes due 2022. "Our '4' recovery rating indicates our expectation for an average (30%-50%) recovery in the event of default," S&P said. "The notes will be guaranteed, jointly and severally, by substantially all of Ryland's direct and indirect wholly owned homebuilding subsidiaries. Ryland's proposed notes will rank equally with its $880 million of existing senior unsecured notes. The company intends to use the net proceeds from the issuance for general corporate purchases. The company's next debt maturity is in January 2015, when $126 million 5.375% senior notes mature. We believe the company will ultimately use the additional liquidity raised through this offering to fund new investments. As a result, debt-to-EBITDA will remain elevated and high for the rating due to the additional debt burden, but in line with our expectations given the company's recently stronger operating performance and profitability," S&P said. "Our ratings on Ryland reflect an 'aggressive' financial risk profile, which reflects EBITDA-based metrics that remain weak for the rating. We view Ryland's business risk profile to be 'fair' because of the company's less-capital-intensive land strategies, which result in a shorter years supply and predominately developed supply of land. Even so, we expect the company will need to invest in land to meet anticipated demand beyond 2013. While profitability is improving, it remains weak for the rating. However, community count growth and better absorption should support volume growth, and we expect Ryland to improve its margins and profitability in 2012 and 2013," S&P said. "Ryland's ample cash position, relative to its near-term capital needs, remains an important ratings support, absent access to a committed revolving credit facility. Proceeds from the new debt issue will bolster cash, which would otherwise decline in 2013 as the company builds up inventory. We would lower ratings if operating results do not improve as expected and if key credit metrics are not on an improving trajectory, such that we believe adjusted debt-to-EBITDA will reach the 6x area in 2013. We would also lower the ratings if liquidity weakens significantly. An upgrade is unlikely over the next 12 months because we expect Ryland leverage to remain elevated," S&P said. RATINGS LIST The Ryland Group Inc. Corporate Credit Rating BB-/Stable New Rating The Ryland Group Inc. $250 million senior notes due 2022 BB- Recovery rating 4 SCHWAB INDUSTRIES: Fla. Court Won't Hear Family Members' Lawsuit ---------------------------------------------------------------- District Judge John E. Steele in Fort Myers, Florida, dismissed a lawsuit among family members over allocation of the proceeds from the sale of Schwab Industries, Inc., citing lack of personal jurisdiction. In the lawsuit, David Schwab, Jerry Schwab, Donna Schwab, Plaintiffs, v. Mary Lynn Hites, also known as Mary Lynn Schwab, Defendant, Case No. 2:11-cv-638-FtM-29DNF (M.D. Fla.), Jerry and Donna are husband and wife and parents to plaintiff David and defendant Mary Lynn. The parties were stock owners in the family business, Schwab Industries, which conducted business through various subsidiaries in Ohio and Florida. Jerry owned 46%, David owned 27%, Donna owned 6%, and Mary Lynn owned 20% of Schwab Industries. On Feb. 28, 2010, Schwab Industries filed a voluntary Chapter 11 bankruptcy petition. On May 28, 2010, an order was entered in the Bankruptcy Case that authorized the sale of substantially all of the assets of Schwab Industries. Pursuant to a sale under 11 U.S.C. Sec. 363, Oldcastle Materials, Inc., a Delaware corporation with offices in Florida, purchased certain Schwab Industries assets. To compliment its acquisition of assets, Oldcastle offered to buy, and Jerry, Donna, and David agreed to sell, their personal goodwill to Oldcastle. The Complaint alleges that although Mary Lynn had no goodwill to offer, she was a "seller" under the goodwill agreement. The Personal Goodwill Purchase Agreement required David to enter into an Executive Employment Agreement, David and Donna to enter into a Consulting Agreement, and Jerry, David, Donna, and Mary Lynn to enter into a Non-Compete Agreement. The Personal Goodwill Agreement specified a purchase price of $1,000,000 to be paid in annual installments of $200,000 per year, for five years. The Non-Compete Agreement specified a purchase price of $2,762,500 which was divided as follows: $300,000 in the first, second, and third years; $662,500 in year four; and $1,800,000 in year five. Neither agreement specifies how the payments would be allocated among the sellers. The Amended Complaint alleges that at the time Jerry, Donna, David, and Mary Lynn entered into the Personal Goodwill Agreement and the Non-Compete Agreement, the Schwabs did not have a mutual agreement as to how the monies earned on the contracts would be allocated amongst themselves. However, because the parties determined that it was imperative that the transaction with Oldcastle be consummated immediately, the parties agreed to determine the proper allocation of the proceeds in accordance with the relative personal goodwill and value of the non-compete agreement of the parties, equity, and fairness after the Oldcastle contracts were consummated but before the first payment was due. David, Jerry, Donna, and Mary Lynn appointed Ronald Manse, CPA as the "Seller's Agent" to receive the payments due under the two contracts in escrow. On June 23, 2011, Mr. Manse received the first payment under both the Personal Goodwill Agreement and the Non-Compete Agreement. The parties still had no agreement as to the allocation of the proceeds. On July 7, 2011, Mary Lynn, through counsel and via e-mail, directed Mr. Manse to refrain from making any distributions to the parties unless she received 25% of the funds. Mr. Manse distributed the first payment in four equal shares without specific authorization from David, Jerry, or Donna. David, Jerry, and Donna demanded that Mary Lynn return the proceeds to them and the defendant refused. The plaintiffs commenced the lawsuit in the Circuit Court for the Twentieth Judicial Circuit of the State of Florida, in and for Lee County, Civil Division, entitled David Schwab, Plaintiff v. Mary Lynn Hites, case number 11-CA-003276. Mary Lynn removed the action to the District Court on Nov. 7, 2011. The Defendant seeks to dismiss the Complaint pursuant to Fed. R. Civ. P. 12(b)(2) because she is a resident of Ohio and the District Court does not have either specific or general personal jurisdiction over her. A copy of the Court's Sept. 14, 2012 Opinion and Order is available at http://is.gd/pC6tbcfrom Leagle.com. About Schwab Industries Dover, Ohio-based Schwab Industries, Inc., produced, supplied and distributed ready-mix concrete, concrete block, cement and related supplies to commercial, governmental and residential contractors throughout Northeast Ohio and Southwest Florida. The Company filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ohio Case No. 10-60702) on Feb. 28, 2010. The Parkland Group, Inc., provided restructuring services and designated Laurence V. Goddard as Chief Restructuring Officer. Hahn Loeser & Parks LLP served as bankruptcy counsel. Brouse McDowell, LPA, served as special counsel. Garden City Group, Inc., served as claims, noticing and balloting agent. The Company estimated its assets and liabilities at $50 million to $100 million. SEP RIVERPARK: Case Reassigned to Judge Niles L. Jackson -------------------------------------------------------- The Chapter 11 case of SEP Riverpark Plaza, L.L.C., has been reassigned to Judge Niles L. Jackson of the U.S. Bankruptcy Court for the Western District of Oklahoma. The involvement of Judge Sarah A. Hall in the case is terminated. Oklahoma City, Oklahoma-based SEP Riverpark Plaza, L.L.C., aka Riverpark Plaza Apartments, filed for Chapter 11 bankruptcy protection (Bankr. W.D. Okla. Case No. 10-16832) on Nov. 11, 2010. According to its schedules, the Debtor disclosed $19.17 million in total assets and $12.03 million in total liabilities. On Jan. 13, 2011, Judge Sarah A. Hall authorized the Debtor's employment of Hiersche Law Firm as its bankruptcy counsel. SEQUENOM INC: Completes Offering of $130 Million 5% Senior Notes ---------------------------------------------------------------- Sequenom, Inc., has completed its offering of $130.0 million aggregate principal amount of 5.00% Convertible Senior Notes due 2017 in a private offering, including $20.0 million aggregate principal amount of notes sold pursuant to the full exercise of an over-allotment option previously granted to the initial purchasers. Sequenom intends to use the net proceeds from this offering to fund the commercialization of the MaterniT21 PLUS laboratory- developed test, as well as for other general corporate purposes, which may include research and development expenses, capital expenditures, working capital and general administrative expenses. On Sept. 12, 2012, Sequenom announced the pricing of $110.0 million Convertible Senior Notes due 2017. On Sept. 13, 2012, Jefferies & Company, Inc., and J.P. Morgan Securities LLC exercised in full their over-allotment option to purchase an additional $20.0 million aggregate principal amount of Convertible Notes. The offering closed on Sept. 17, 2012. The aggregate net proceeds to the Company from the offering were approximately $124.6 million, after deducting the Initial Purchasers' discounts and commissions and estimated offering expenses payable by the Company. About Sequenom Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. The Company reported a net loss of $74.15 million in 2011, a net loss of $120.84 million in 2010, and a net loss of $71.01 million in 2009. The Company's balance sheet at June 30, 2012, showed $161.05 million in total assets, $59.03 million in total liabilities, and $102.02 million in total stockholders' equity. SKY KING: Blames Direct Air for Chapter 11 Bankruptcy Filing ------------------------------------------------------------ John Chambliss at The Ledger reports that Frank Visconti blamed passenger-jet airline Direct Air for the bankruptcy filing of his company, Sky King Airlines. Sky King provided planes, pilots and crews to Direct Air, and Mr. Visconti said his company is owed nearly $1 million dollars for that service. "They owed us a significant amount of money when the fuel company cut us off," the report quotes Mr. Visconti as saying. The report relates Direct Air abruptly canceled all of its flights, including service to Lakeland Linder Regional Airport, on March 12. The discount airline filed for Chapter 11 bankruptcy a few days afterward. Direct Air officials blamed "rising fuel costs and other operating expenses." The report relates Mr. Visconti said the company's owners asked him to address some restructuring issues that weren't handled properly during its first bankruptcy. "The previous team did not have a lot of experience," the report quotes Mr. Visconti as noting. "We're renegotiating terms with about all our vendors (owners of aircraft)." The report relates Gene Conrad, Lakeland Linder airport director, said the company continues to pay its lease on time. The report adds Sky King stopped its maintenance service on jets more than a year ago. Now, the tail enclosure is used by Florida Modification Specialists. Lakeland Linder currently leases hangar space to Florida Modification. Sky King Airlines provides charter-jet service in Lakeland. This is the second time in two years that Sky King landed in bankruptcy. It came out of its first reorganization effort in June 2011. SOTHEBY'S: S&P Rates New $300MM Senior Unsecured Notes 'BB' ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' senior unsecured debt rating and '5' recovery rating to New York City- based Sotheby's proposed $300 million senior unsecured notes due 2022. "The company has indicated that it will use net proceeds from the 144A offering to redeem or repurchase any and all of the outstanding (about $80 million as of June 30, 2012) 7.75% senior unsecured notes due June 15, 2015, and for general corporate purposes, including the potential repayment of other existing debt," S&P said. "The 'BB+' corporate credit rating and stable outlook on Sotheby's remain unchanged and reflect our assessment that the company's business risk profile is 'fair' and its financial risk profile is 'intermediate.' We base our opinion of the company's business risk on its leading position as one of the two largest auctioneers in the highly volatile global auction markets and its experienced management team, countered by the very seasonal nature of its operations and the swings in its profitability. We view the company's financial risk profile as intermediate given its expected credit metrics, moderate financial policies, sizable cash balances, and positive cash flow generation. Lease-adjusted total debt was about $583 million at June 30, 2012," S&P said. RATINGS LIST Sotheby's Corporate Credit Rating BB+/Stable/-- New Ratings Sotheby's Senior Unsecured $300 mil. nts due 2022 BB Recovery Rating 5 STRATEGIC PARTNERS: Moody's Withdraws 'B2' CFR/PDR -------------------------------------------------- Moody's Investors Service withdrew all ratings of Strategic Partners Inc. The following ratings were withdrawn: Corporate Family Rating at B2 Probability of Default Rating at B2 $30 million senior secured revolver due 2015 at B1 (LGD 3, 37%) $175 million senior secured term loan due 2016 at B1 (LGD 3, 37%) The stable rating outlook was also withdrawn Ratings Rationale The rating action reflects that all of Strategic Partners' rated debt was repaid following its acquisition by Partners Group, Avista Capital Partners and management. The principal methodology used in rating Strategic Partners, Inc. was the Global Apparel Industry Methodology published in May 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. Headquartered in Chatsworth, California, Strategic Partners, Inc. designs, manufactures and distributes medical uniforms, accessories, medical footwear and school uniforms through owned and licensed brands including "Cherokee", "Dickies" and "Classroom". SUMMIT WEALTH: SEC Charges Atlanta-Based Firm Over Ponzi Scheme --------------------------------------------------------------- The Securities and Exchange Commission on Sept. 19 announced charges against a private fund manager and his Atlanta-based investment advisory firm for defrauding investors in a purported "fund-of-funds" and then trying to hide trading losses by creating new private funds to make money to pay back the original fund investors in Ponzi-like fashion. The SEC is seeking an emergency court order to freeze the assets of Angelo A. Alleca and Summit Wealth Management Inc. and prevent further investor losses, which are estimated to be $17 million among approximately 200 clients. "Alleca told Summit Wealth clients that he was investing their money in funds, but instead he was rolling the dice in the stock market without success," said Bruce Karpati, Chief of the SEC Enforcement Division's Asset Management Unit. "Rather than fess up about his trading losses, Alleca tried a cover up by creating new funds. Instead of winning back the money, he just compounded his fraud by suffering further losses." After receiving a tip, the SEC initiated an examination of Summit Wealth. As SEC examiners noticed something was amiss at the firm, they immediately coordinated with SEC enforcement attorneys to gather and assess evidence. "SEC examiners and attorneys acted swiftly after receiving a tip about possible wrongdoing at the firm, and have mounted an aggressive effort to put a stop to Alleca's fraud before more investors are harmed," said William P. Hicks, Associate Director of the SEC's Atlanta Regional Office. According to the SEC's complaint filed late Tuesday in federal court in Atlanta, Alleca and Summit Wealth Management offered and sold interests in Summit Fund, which they told their clients was operating as a fund-of-funds -- meaning they were investing their money in other funds and investment products rather than directly in stocks and other securities. The fund-of-funds investment strategy is intended to diversify investor money and minimize exposure to risks. However, Alleca instead engaged in active securities trading with his clients' money, and he incurred substantial losses. He concealed the Summit Fund trading losses from investors and provided them false account statements. The SEC alleges that when it came time to meet redemption requests from Summit Fund investors, Alleca created at least two hedge funds to raise money from Summit Wealth clients -- Private Credit Opportunities Fund LLC and Asset Diversification Fund LP. Alleca's plan was to cover up the losses that he had incurred in Summit Fund by illegally transferring profits from the new funds in a Ponzi-like fashion in order to meet earlier redemption requests. However, Alleca's plan backfired when those successive funds incurred further trading losses. Alleca continued to issue false account statements to investors in Summit Fund as well as the additional funds in order to hide the actual losses on their investments. The SEC's complaint charges Alleca, Summit Wealth Management, and the three funds with violations of the antifraud provisions of the federal securities laws. The SEC examiners who conducted the examination of Summit Wealth are H. Edward McConnell, David T. McClellan, Claudette Williams, Satyan Singh, and Donna C. Esau in the SEC's Atlanta Regional Office. The subsequent investigation was conducted jointly by the Atlanta office and the Asset Management Unit, particularly John G. Westrick and Stephen E. Donahue. THORNTON LLC: Case Summary & 11 Unsecured Creditors --------------------------------------------------- Debtor: Thornton LLC 2530 Crawford Avenue, #102 Evanston, IL 60201 Bankruptcy Case No.: 12-29113 Chapter 11 Petition Date: September 13, 2012 Court: U.S. Bankruptcy Court District of Colorado (Denver) Debtor's Counsel: Lee M. Kutner, Esq. KUTNER MILLER BRINEN, P.C. 303 E. 17th Avenue, Suite 500 Denver, CO 80203 Tel: (303) 832-2400 E-mail: lmk@kutnerlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its 11 largest unsecured creditors is available for free at http://bankrupt.com/misc/cob12-29113.pdf The petition was signed by Jay Brown, manager. TRANSTAR HOLDING: Moody's Cuts CFR to B2; Rates Facilities Caa1 --------------------------------------------------------------- Moody's Investors Service downgraded Transtar Holding Company's corporate family and probability of default ratings to B2 from B1 and downgraded the ratings on Transtar's existing credit facilities by one notch. Concurrently, Moody's assigned B1 ratings to Transtar's proposed $345 million first lien credit facilities and a Caa1 rating to the company's proposed $165 million second lien credit facility. Proceeds from the proposed credit facilities along with cash will be used to refinance Transtar's existing debt and fund a $91 million distribution to shareholders (the "transaction"). Rating Rationale: The downgrade of the corporate family rating to B2 reflects the company's high leverage and shift to a more aggressive financial policy. The proposed dividend represents just under half of the original equity invested in the company by Friedman Fleischer & Lowe, LLC ("FFL") and management during the December 2010 acquisition of the company. Pro forma for the transaction, Transtar's lease-adjusted Debt/EBITDA for the twelve months ended June 30, 2012 would increase to nearly 6.5 times from about 5.2 times. The B1 ratings on Transtar's existing and proposed first lien facilities are one notch higher than the company's B2 Corporate Family Rating, reflecting the company's B2 probability of default rating, a loss given default assessment of LGD3, 33%, and a significant level of junior support in the capital structure in the form of second lien debt. The facilities are secured by a first priority lien on substantially all assets of the borrower and guarantors, and a pledge of 65% of the stock in foreign subsidiaries. The Caa1 ratings on the existing and proposed second lien term loans reflect the more junior position in the capital structure, leading to a loss given default assessment of LGD5, 85%. The stable outlook reflects the expectation for continued modest growth in revenue and earnings while maintaining good liquidity. The outlook also incorporates the expectation that Transtar could continue to make small, bolt-on acquisitions to augment organic growth. Free cash flow is expected to remain positive, with excess cash flow used for debt reduction and credit metric improvement. A ratings downgrade could be triggered by material deterioration in operating performance, more aggressive financial policies such as dividends or large acquisitions outside of expectations, or a deterioration in liquidity. A downgrade could result if debt/EBITDA were to rise above 6.5 times on a sustained basis or if EBITDA-Capex/Interest approaches 1.25 times. A ratings upgrade could be triggered by sustained growth in revenue and earnings while maintaining good liquidity. The company would also need to demonstrate the willingness to sustain a conservative financial policy, including the use of free cash flow for debt reduction. Quantitative metrics include debt/EBITDA sustained under 5.0 times and EBITDA-Capex/interest over 2.0 times. Ratings assigned: -- $50 million first lien revolving credit facility expiring 2017 at B1 (LGD 3, 33%) -- $295 million first lien term loan expiring 2018 at B1 (LGD 3, 33%) -- $165 million second lien term loan due 2019 at Caa1 (LGD 5, 85%) Ratings downgraded: -- Corporate Family Rating to B2 from B1; -- Probability of Default Rating to B2 from B1; Ratings downgraded; will be withdrawn upon completion of the transaction: -- $50 million first lien revolving credit facility expiring 2015 to B1 (LGD3, 33%) from Ba3 (LGD 3, 33%); -- $240 million first lien term loan due 2016 to B1 (LGD3, 33%) from Ba3 (LGD 3, 33%); -- $135 million second lien term loan due 2017 to Caa1 (LGD5, 85%) from B3 (LGD 5, 85%) The principal methodology used in rating Transtar was the Global Distribution and Supply Chain Services Methodology published in November 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Transtar Holding Company is a distributor of automotive aftermarket driveline replacement parts, kits and components sold to the transmission repair and remanufacturing market. The company also supplies autobody refinishing products to professional aftermarket automotive refinishers and autobody repair shops. Net revenue for the latest twelve month period ended June 30, 2012 exceeded $500 million. TRIGEE FOUNDATION: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Trigee Foundation Inc. dba Minnesota Terrace Apartments ta Oasis Realty Service P.O. Box 90717 Washington, DC 20090 Bankruptcy Case No.: 12-00624 Chapter 11 Petition Date: September 13, 2012 Court: U.S. Bankruptcy Court District of Columbia (Washington, D.C.) Judge: S. Martin Teel, Jr. Debtor's Counsel: Jeffrey M. Sherman, Esq. LERCH, EARLY & BREWER 3 Bethesda Metro Center, Suite 460 Bethesda, MD 20814 Tel: (301) 841-3843 E-mail: jmsherman@lerchearly.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Johnnie Mae Durant. TUCSON ELECTRIC: Fitch Lifts Issuer Default Rating From 'BB+' ------------------------------------------------------------- Fitch Ratings has upgraded the Issuer Default Rating (IDR) of Tucson Electric Power Company (TEP) one-notch to 'BBB-' from 'BB+' with a Stable Rating Outlook. The short-term IDR and securities ratings were also upgraded one-notch, as follows: -- First mortgage bonds to 'BBB+' from 'BBB'; -- Secured bank facility to 'BBB+' from 'BBB'; -- Unsecured industrial revenue bonds to 'BBB' from 'BBB-'; -- Unsecured pollution control revenue bonds to 'BBB' from 'BBB-'; -- Unsecured notes to 'BBB' from 'BBB-'; -- Short-term IDR to 'F3' from 'B'. Approximately $1.6 billion of debt securities are affected by the rating action. TEP is a wholly-owned subsidiary of UNS Energy. Key rating drivers include: -- Stable earnings and cash flows -- Pending 2012 GRC with the ACC; -- Nearing the end of a five-year non-fuel base rate freeze; -- Adoption of a more flexible leverage covenant in bank agreement; -- High leverage (including capital lease obligations); and -- Exposure to changes in environmental rules and regulations; The ratings upgrade and Stable Outlook reflects TEP's relatively strong performance at the end of its five-year non-fuel base rate freeze ending this year. Fitch assumes a reasonable outcome in the utility's pending 2012 GRC which will provide a tailwind for increased earnings in 2013 and 2014. A constructive outcome in TEP's pending 2012 General Rate Case (GRC) should permit an adequate rate of return on investment on recent rate base additions and recovery of higher operating expenses incurred over the last few years. TEP's capital structure remains burdened by high levels of debt and a large capital expenditure program affords little opportunity to decrease leverage. However, TEP has made progress in improving its debt profile as it has reduced its exposure to variable rate debt. For the LTM ending June 30, 2012, TEP's variable rate debt comprised 15.9% of total long-term debt, as compared to 26% for 2010, including capital lease debt. 2012 GRC filed; Partial Decoupling Requested: On July 2, 2012 TEP filed its 2012 GRC with the ACC and requested a nonfuel base rate increase of $128 million dollars predicated on an 10.75% ROE for rates effective no later than Aug. 1, 2013. Notably, TEP's filing includes a request for a Lost Fixed Cost Recovery (LFCR) mechanism and an Environmental Compliance Adjustor (ECA). The LFCR is a partial revenue decoupling mechanism which is designed to recover non-fuel costs associated with the implementation of energy efficiency or distributed generation programs. The ECA is a recovery mechanism designed to recover compliance costs associated with environmental regulations, primarily for pollution control upgrades on TEP's coal fired generation fleet. Fitch notes that the LFCR is not weather normalized and expects a decision by August of next year. Solid Operating Performance: For the LTM period ending June 30, 2012 TEP's EBITDA coverage ratios trended flat at 4.0x as compared to 4.1x for 2011. Similarly, TEP's FFO coverage ratios approximated 3.9x and 3.8x over the same time periods. Leverage for the LTM ending June 30, 2012, as measured by Debt to EBITDA, was high at 4.4x. Coverage Metrics Expected to Improve: Over a five-year forecast period, Fitch projects that TEP's EBITDA coverage ratios could reach 5.9x reflecting rate base additions and new rates. In the intermediate term, TEP is forecasted to be modestly Free Cash Flow negative due to increased capital spending needs associated with emissions compliance and transmission investments. Going forward, leverage ratios are also expected to show modest improvement as TEP amortizes its capital lease obligations. Debt to total capitalization is expected to decline to 58% in 2014 from 65% currently. Fitch includes capital lease obligations in its debt leverage calculations; approximately two-thirds of TEP's capital lease obligations mature by 2015. Increased Capital Expenditure Needs: TEP plans to spend $1.8 billion on capital expenditures through 2016, and capital expenditures are expected to average $350 million per annum. Capital expenditures associated with environmental compliance investments and transmission projects account for the bulk of increased capital spending levels. Additionally, capital expenditures for solar projects are expected to average $30 million per annum. Going forward, the majority of capital expenditures are covered by operating cash flows and Fitch projects TEP to be modestly FCF negative. Manageable Maturities: Debt maturities at TEP are manageable and mainly consist of capital lease obligations. As of June 30th 2012, TEP had $365 million of capital lease obligations on the balance sheet of which $258 million amortizes by 2015. Sufficient Liquidity: TEP's $386 million secured bank facility includes a $200 million revolving credit facility used to meet day-to-day working capital requirements and a $186 million secured letter-of-credit facility that supports outstanding tax-exempt bonds. TEP's secured bank facility matures in November 2016 and is secured by a First Mortgage Bond indenture. As of June 30, 2012, TEP had total available liquidity of $82 million including $32 million of cash and cash equivalents and $50 million of available borrowing capacity under its secured revolving credit facility. In November of 2011, TEP amended its $200 million secured credit agreement and extended the maturity by two years to 2016. TEP's revolving credit facility contains a maximum debt to capitalization covenant ratio of 70%, and as of June 30, 2012 TEP was in compliance with a debt to capitalization ratio of 65.1%. Fitch notes that TEP has limited headroom in their capital structure under their leverage covenant. What could lead to a credit rating upgrade? -- None anticipated in the near term. What could lead to a credit rating downgrade? -- An outcome in the 2012 GRC which limits TEP's ability to earn an adequate and timely return on invested capital. URBAN WEST RINCON: Court Orders Dismissal of Chapter 11 Cases ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California has granted the motion of Urban West Rincon Developers II, LLC, and Rincon Developers Phase II, LLC, for the dismissal of the Debtors' Chapter 11 cases. As reported in the TCR on June 15, 2012, after hearing on July 26, 2011, the Court approved the amended motion to approve compromise of controversy under which the Debtors resolved various conflicts between themselves and SP4 Rincon II Lender, LP, and SP4 Rincon II Partner, LP. After entry of a court order dated July 29, 2011, approving a compromise allowing Debtors some 90 days to complete a sale of their interests in ORH II, the Debtors failed to deliver the agreed, confidential settlement payment owed to SP4 Rincon II Lender, LP, and SP4 Rincon II Partner, LP, by the stipulated, court-approved Oct. 6, 2011 deadline. The Debtors lost their respective interests in ORH II, the entity that owns the underlying real property on which the Phase II project is to be built in a duly-noticed public foreclosure sale of their limited partnership interests under the California Uniform Commercial Code, which was conducted on Oct. 17, 2011. The estates have no remaining assets. San Francisco, California-based Urban West Rincon Developers II, LLC, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Calif. Case No. 11-30924) on March 9, 2011. Heinz Binder, Esq., and Roya Shakoori, Esq., at the Law Offices of Binder and Malter, serves as the Debtor's bankruptcy counsel. WINDHAM & MCDONALD: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Windham & McDonald Construction Company, Inc. 1245 Big Orange Road Cordova, TN 38018 Bankruptcy Case No.: 12-29792 Chapter 11 Petition Date: September 13, 2012 Court: U.S. Bankruptcy Court Western District of Tennessee (Memphis) Judge: Jennie D. Latta Debtor's Counsel: John L. Ryder, Esq. HARRIS SHELTON HANOVER WALSH, PLLC One Commerce Square, Suite 2700 Memphis, TN 38103-2555 Tel: (901) 525-1455 E-mail: jryder@harrisshelton.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/tnwb12-29792.pdf The petition was signed by Douglas Windham, president. WINNERS CREATIVE: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Winners Creative Group, LLC 6401 E. Thomas Road Scottsdale, AZ 85251 Tel: (480) 917-0001 Bankruptcy Case No.: 12-20390 Chapter 11 Petition Date: September 13, 2012 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Charles G. Case, II Debtor's Counsel: Michael T. Reynolds, Esq. REYNOLDS & REYNOLDS, PLLC 125 E. Coronado Road Phoenix, AZ 85004 Tel: (602) 253-6141 Ext: 203 Fax: (602) 252-4133 E-mail: michael@reynoldsazlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Fred Wagenhals, manager. * Home Valued at Filing for Stripping Off in Chapter 13 ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a U.S. district judge in Boston ruled on Sept. 17 that to decide whether a Chapter 13 plan can strip off a completely unsecured mortgage, the property must be valued as of the petition date, not the date for confirmation of the plan. According to the report, when an individual filed in Chapter 13, the property was worth more than the first mortgage. By the time her plan was up for approval at a confirmation hearing, the value had dropped, and the home was worth less than the first-mortgage debt. Using confirmation as the valuation date, the bankruptcy judge confirmed a plan stripping off the second mortgage utilizing Section 1322(b)(2) of the Bankruptcy Code. The subordinate mortgage was treated as an unsecured claim. The bank appealed and won in a 13-page opinion by U.S. District Judge F. Dennis Saylor IV in Boston. The report relates that looking at Section 506(a)(1) of the Bankruptcy Code, Judge Saylor said valuation must be performed "in light of the purpose of the valuation." He followed what he characterized as a majority of courts in picking the filing date. The Bloomberg report discloses that Judge Saylor said that using the filing date will disincline parties "from improperly delaying or accelerating the proceeding." The case is TD Bank NA v. Landry, 12-40009, U.S. District Court, District of Massachusetts (Boston). * Bankruptcy Court Proper Venue for Final Rulings on Tax Disputes ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a bankruptcy judge has the right to make final rulings in disputes over federal taxes despite the Supreme Court's Stern v. Marshall ruling last year. According to the report, U.S. District Judge Brian M. Cogan in Brooklyn concluded in a Sept. 15 opinion that a refund claim involves a dispute over "public rights" where the bankruptcy court is competent to issue a final judgment. He said that Stern involved a bankruptcy counterclaim under state common law. The report relates that Judge Cogan mentioned that tax disputes are resolved in the U.S. Tax Court and the Federal Court of Claims, which are both Article I tribunals like bankruptcy courts. The Bloomberg report discloses that he said that rulings by those two courts are "reviewed under ordinary appellate standards," including the rule that findings of fact are not set aside except for "clear error." The case is U.S. v. Bond, 11-5608, U.S. District Court, Eastern District of New York (Brooklyn). * A&M Expands Public Sector Services Group ------------------------------------------ Alvarez & Marsal has expanded its Public Sector Services group with the addition of senior directors Michael Imber (New York), Nicholas Srebrow and Scott Tullio (Washington, D.C.); and directors Daniel Richardson, Robert Noll and John Rust (Washington, D.C.). "As economic uncertainty persists, federal, state and local government entities are striving to increase accountability, innovate operations and seek alternative approaches to manage capital," said Bill Roberti, managing director at A&M and head of the firm's Public Sector Services group. "A&M offers public sector entities leadership driving fiscal and operational transformation, insight and expertise supporting financial regulatory economic assessment and implementation, and assistance in broad fiscal and market reform, drawing upon A&M's restructuring heritage and operational experience with financial institutions," he added. "This group of senior professionals brings deep experience in improving the performance of public sector entities, and will make outstanding contributions to clients of A&M." With more than 25 years of experience, Mr. Imber brings a blend of commercial and public sector expertise to A&M. Specializing in bankruptcies, workouts and middle-market finance, his recent public sector engagements have included serving as financial adviser to the Nassau County Interim Finance Authority and providing financial advisory services to a Midwestern city. He has also served as the financial adviser to several major municipal transit authorities in restructuring concession contracts with a distressed media company, and was most recently a principal at Grant Thornton, LLC in its State & Local Government Advisory Services practice. Mr. Srebrow brings a broad technical background in the areas of homeland security, human capital, strategic planning, facilitation and information technology to A&M. Prior to joining the firm, he served as a vice president at LIST Innovative Solutions, supporting the company's growth in the Federal market space. Additionally, his extensive client experience includes the Office of Personnel Management, the Department of Defense, the Department of Homeland Security (Customs and Border Protection, U.S. Secret Service, Transportation Security Administration), the Federal Aviation Administration, the Securities and Exchange Commission, Environmental Protection Agency, the Federal Trade Commission and the U.S. Agency for International Development. For over 14 years, Mr. Tullio has served in advisory and operational roles for commercial, non-profit and government organizations. He brings experience in merger and acquisition due diligence, portfolio analysis, shareholder value analysis, financial crisis simulation, capital markets advisory support, corporate finance, and strategy. He also has specialized expertise across several functional domains, including financial risk management, strategic planning, crisis management and communications, business transformation and organizational design. Prior to joining A&M, he was a principal with Booz Allen Hamilton, where he led the Commercial Financial Services business for the Strategy and Organization Team. Mr. Richardson has over 14 years of experience in strategy and acquisitions and capital investment as a principal and consultant. He has advised large financial services clients on crisis and risk management activities at a C-suite level. He previously served as a principal at Kidd & Company in its private equity practice, where he sourced, researched, and invested in a range of different businesses globally, including engagements involving risk analyses and mitigation strategies for U.S., EU, Brazil, and Africa-based companies and operations. For the past 13 years, Mr. Noll has dedicated his time and energy in serving public sector and multinational corporations in financial services and technology as a client and consultant. His primary focus has been in the areas of strategy and operational risk, commercial intelligence, analytics, compliance, security, crisis management, business continuity / disaster recovery and continuity of government. Mr. Noll has worked and performed on client sites in numerous domestic and international engagements (Americas, Europe, Asia, Middle East and Africa). Prior to joining A&M, he served as a Senior Federal Executive for the U.S. Congress and directed a comprehensive $250 million dollar "all hazards" investment portfolio. With more than 18 years of financial services and management consulting experience, Mr. Rust brings significant expertise in economic impact analysis, portfolio management, shareholder value analysis, financial crisis simulation, capital markets advisory support, credit risk management and modeling, corporate finance and strategy, and merger and acquisition due diligence. He also specializes in several functional domains, including advanced financial market risk analysis techniques, strategic planning and organizational design, and data analytic tool development and implementation. Prior to joining A&M, he served on the Board of Directors for the CFA Society of Washington from 2006-2008, and he was a senior associate with Booz Allen Hamilton, where he led the Civil and Commercial Financial Services group for the Decision Analytics Team. About Alvarez & Marsal Alvarez & Marsal -- http://www.alvarezandmarsal.com/-- is a professional services firm with expertise in guiding underperforming companies and public sector entities through complex operational, financial and organizational challenges. The firm excels in problem solving and value creation, and brings a bias toward executing solutions with a distinctive hands-on approach to serving clients, management and stakeholders. Founded in 1983, Alvarez & Marsal draws on its strong operational heritage to provide specialized services, including Turnaround and Management Advisory, Crisis and Interim Management, Performance Improvement, Creditor Advisory Services, Corporate Finance, Dispute Analysis and Forensics, Tax Advisory, Business Consulting, Real Estate Advisory and Transaction Advisory. A network of experienced professionals in locations across the U.S., Europe, Asia and Latin America, enables the firm to deliver on its proven reputation for leadership, problem solving and value creation * Spencer Cain Bankruptcy Pro Joins Vorys in Houston ---------------------------------------------------- Jeremy Heallen at Bankruptcy Law360 reports that Vorys Sater Seymour and Pease LLP has hired a former Spencer Crain Cubbage Healy & McNamara PLLC shareholder who specializes in bankruptcy and insolvency law to lead that practice group in Houston, the firm announced Monday. Thomas H. Grace joined Vorys Sater as a partner Sept. 4, the firm said. His practice will focus on "all facets of insolvency and bankruptcy matters," it said. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Sparizione Management, LLC Bankr. N.D. Calif. Case No. 12-56522 Chapter 11 Petition filed September 1, 2012 See http://bankrupt.com/misc/canb12-56522p.pdf See http://bankrupt.com/misc/canb12-56522c.pdf represented by: W. Austin Cooper, Esq. LAW OFFICES W. AUSTIN COOPER E-mail: austincooperlaw@yahoo.com In re Shanty Holdings, LLC Bankr. N.D. Ga. Case No. 12-72061 Chapter 11 Petition filed September 1, 2012 See http://bankrupt.com/misc/ganb12-72061.pdf represented by: Michael C. Famiglietti, Esq. FAMIGLIETTI LAW FIRM E-mail: lexres@bellsouth.net In re Daltex Fence, Inc. Bankr. N.D. Tex. Case No. 12-44943 Chapter 11 Petition filed September 1, 2012 See http://bankrupt.com/misc/txnb12-44943.pdf represented by: Warren V. Norred, Esq. LAW OFFICE OF WARREN NORRED E-mail: wnorred@norredlaw.com In re Dale Hiles Bankr. D. Ariz. Case No. 12-19702 Chapter 11 Petition filed September 2, 2012 In re Kris Basel Bankr. D. Ariz. Case No. 12-20212 Chapter 11 Petition filed September 11, 2012 In re Ramon Cuellar Bankr. D. Ariz. Case No. 12-20228 Chapter 11 Petition filed September 11, 2012 In re Andria Grable Bankr. C.D. Calif. Case No. 12-40900 Chapter 11 Petition filed September 11, 2012 In re It's My Hair Extensions Inc. aka Steve Neely aka It's My Hair Bankr. C.D. Calif. Case No. 12-31002 Chapter 11 Petition filed September 11, 2012 See http://bankrupt.com/misc/cacb12-31002.pdf represented by: Richard E. Dwyer, Esq. Law Office of Richard Dwyer E-mail: attorneyricharddwyer@gmail.com In re Vincent Pignotti Bankr. C.D. Calif. Case No. 12-20738 Chapter 11 Petition filed September 11, 2012 In re Murray Greengrass Bankr. S.D. Calif. Case No. 12-12507 Chapter 11 Petition filed September 11, 2012 In re Francisco Dominguez Bankr. D. Colo. Case No. 12-28864 Chapter 11 Petition filed September 11, 2012 In re Greenpark Residences Inc. Bankr. M.D. Fla. Case No. 12-13891 Chapter 11 Petition filed September 11, 2012 See http://bankrupt.com/misc/flmb12-13891.pdf represented by: Dion R. Hancock, Esq. Dion R Hancock, P.A. E-mail: attorneydionhancock@gmail.com In re Roland Kringle Bankr. M.D. Fla. Case No. 12-05991 Chapter 11 Petition filed September 11, 2012 In re Pleasant Place, Inc. Bankr. N.D. Fla. Case No. 12-10384 Chapter 11 Petition filed September 11, 2012 See http://bankrupt.com/misc/flnb12-10384.pdf represented by: Sharon T. Sperling, Esq. Law Office of Sharon T. Sperling E-mail: sharon@sharonsperling.com In re YK Entertainment LLC Bankr. N.D. Ga. Case No. 12-72857 Chapter 11 Petition filed September 11, 2012 See http://bankrupt.com/misc/ganb12-72857.pdf represented by: Terriea L. Williams, Esq. The Williams Law Group E-mail: terrieawilliams@gmail.com In re Meadowlark Plaza LLC Bankr. D. Kans. Case No. 12-22484 Chapter 11 Petition filed September 11, 2012 See http://bankrupt.com/misc/ksb12-22484p.pdf represented by: Joel Pelofsky, Esq. Berman DeLeve Kuchan and Chapman LLC E-mail: jpelofsky@bdkc.com In re Michael Bazzi Bankr. E.D. Mich. Case No. 12-60627 Chapter 11 Petition filed September 11, 2012 In re AFSB, LLC dba Break Time Bankr. D.S.C. Case No. 12-05639 Chapter 11 Petition filed September 11, 2012 See http://bankrupt.com/misc/scb12-05639.pdf represented by: Rose Marie Cooper, Esq. Cooper Law Firm E-mail: cooperlawsc@gmail.com In re Tylex, LLC dba All Star Liquor and Wine dba For Your Eyes Only dba 21 & Up Bankr. D.S.C. Case No. 12-05640 Chapter 11 Petition filed September 11, 2012 See http://bankrupt.com/misc/scb12-05640.pdf represented by: Rose Marie Cooper, Esq. Cooper Law Firm E-mail: cooperlawsc@gmail.com In re Larry Nunley Bankr. E.D. Tenn. Case No. 12-14639 Chapter 11 Petition filed September 11, 2012 In re Todd Hildebrand Bankr. D. Wyo. Case No. 12-20909 Chapter 11 Petition filed September 11, 2012 In re Joan Curran Bankr. C.D. Calif. Case No. 12-13434 Chapter 11 Petition filed September 12, 2012 In re Odell Young Alternative School, Inc. Bankr. C.D. Calif. Case No. 12-31071 Chapter 11 Petition filed September 12, 2012 See http://bankrupt.com/misc/cacb12-31071.pdf represented by: Robert B. Rosenstein, Esq. ROSENSTEIN & HITZEMAN E-mail: robert@rosenhitz.com In re Christopher Petersen Bankr. C.D. Calif. Case No. 12-41019 Chapter 11 Petition filed September 12, 2012 In re Jesus Diaz Bankr. C.D. Calif. Case No. 12-41098 Chapter 11 Petition filed September 12, 2012 In re Katrina Wilhelm Bankr. N.D. Calif. Case No. 12-12485 Chapter 11 Petition filed September 12, 2012 In re Raymond Slack Bankr. S.D. Fla. Case No. 12-31820 Chapter 11 Petition filed September 12, 2012 In re Jean Wilnot Bankr. S.D. Fla. Case No. 12-31840 Chapter 11 Petition filed September 12, 2012 In re Garfield Bradshaw Bankr. S.D. Fla. Case No. 12-31863 Chapter 11 Petition filed September 12, 2012 In re Trans-World Investment Co. Bankr. E.D. Mich. Case No. 12-60745 Chapter 11 Petition filed September 12, 2012 See http://bankrupt.com/misc/mieb12-60745p.pdf See http://bankrupt.com/misc/mieb12-60745c.pdf represented by: Peter Francis Schneider, Esq. Schneider Miller, P.C. E-mail: pschneider@schneidermiller.com In re Laurence Mitrenga Bankr. S.D. Miss. Case No. 12-51902 Chapter 11 Petition filed September 12, 2012 In re 1216 Hinsdale Realty LLC Bankr. E.D.N.Y. Case No. 12-46597 Chapter 11 Petition filed September 12, 2012 See http://bankrupt.com/misc/nyeb12-46597.pdf Filed as Pro Se In re Duke Falcon's Restaurant LLC Bankr. E.D.N.Y. Case No. 12-75539 Chapter 11 Petition filed September 12, 2012 See http://bankrupt.com/misc/nyeb12-75539.pdf represented by: Roy J. Lester, Esq. LESTER & ASSOCIATES E-mail: rlester@rlesterlaw.com In re Commack Fish & Seafood Restaurant Corp Bankr. E.D.N.Y. Case No. 12-75549 Chapter 11 Petition filed September 12, 2012 See http://bankrupt.com/misc/nyeb12-75549.pdf represented by: Douglas A. Durnin, Esq. E-mail: durninlaw@optonline.net In re Archie Watkins Bankr. W.D.N.C. Case No. 12-20148 Chapter 11 Petition filed September 12, 2012 In re Cynthia Watkins Bankr. W.D.N.C. Case No. 12-20148 Chapter 11 Petition filed September 12, 2012 In re JK Landscapes, Inc. Bankr. W.D. Okla. Case No. 12-14532 Chapter 11 Petition filed September 12, 2012 See http://bankrupt.com/misc/okwb12-14532p.pdf See http://bankrupt.com/misc/okwb12-14532c.pdf represented by: J. John Hager, Jr., Esq. THE LAW OFFICE OF J. JOHN HAGER, P.C. E-mail: john.hager@coxinet.net In re Jefferson Funeral Home Inc. Bankr. W.D. Okla. Case No. 12-14536 Chapter 11 Petition filed September 12, 2012 See http://bankrupt.com/misc/okwb12-14536.pdf represented by: Philip A. Hurtt, Esq. BRANCH & HURTT LAW FIRM, P.C. E-mail: oklaw@coxinet.net In re Keith Stone Bankr. D. Ariz. Case No. 12-20452 Chapter 11 Petition filed September 13, 2012 In re Everardo Rubio Bankr. C.D. Calif. Case No. 12-41284 Chapter 11 Petition filed September 13, 2012 In re Bethel Apostolic Community Church Of Pittsburg, Calif. Bankr. N.D. Calif. Case No. 12-47578 Chapter 11 Petition filed September 13, 2012 See http://bankrupt.com/misc/canb12-47578.pdf represented by: Mark A. McLaughlin, Esq. Law Offices of McLaughlin and Wildman E-mail: nmclaug226@sbcglobal.net In re Carnegie Fund LLC Bankr. S.D. Calif. Case No. 12-12599 Chapter 11 Petition filed September 13, 2012 See http://bankrupt.com/misc/casb12-12599.pdf represented by: Kenneth C. Noorigian, Esq. E-mail: kcnlaw@noorigian.com In re LiquidBreaker, LLC Bankr. S.D. Calif. Case No. 12-12559 Chapter 11 Petition filed September 13, 2012 See http://bankrupt.com/misc/casb12-12559.pdf represented by: John L. Smaha, Esq. Smaha Law Group, APC E-mail: jsmaha@smaha.com In re Lucille Gooding Bankr. S.D. Calif. Case No. 12-12577 Chapter 11 Petition filed September 13, 2012 In re Thomas Loftin Bankr. N.D. Fla. Case No. 12-50448 Chapter 11 Petition filed September 13, 2012 In re A-1 Pipe Cleaning Services, Inc. Bankr. S.D. Fla. Case No. 12-31898 Chapter 11 Petition filed September 13, 2012 See http://bankrupt.com/misc/flsb12-31898.pdf represented by: Barry S. Mittelberg, Esq. E-mail: barry@mittelberglaw.com In re Arie Van Straalen Bankr. D. Idaho Case No. 12-41276 Chapter 11 Petition filed September 13, 2012 In re Gregory Pisarek Bankr. E.D. Pa. Case No. 12-18697 Chapter 11 Petition filed September 13, 2012 In re Joyce Pisarek Bankr. E.D. Pa. Case No. 12-18697 Chapter 11 Petition filed September 13, 2012 In re Julius Shuagis Bankr. W.D. Pa. Case No. 12-70832 Chapter 11 Petition filed September 13, 2012 In re Senges Hermanos Inc. Bankr. D.P.R. Case No. 12-07213 Chapter 11 Petition filed September 13, 2012 See http://bankrupt.com/misc/prb12-07213.pdf represented by: Maria Soledad Lozada Figueroa, Esq. MS Lozada Law Office E-mail: lcdamslozada@gmail.com In re Belinda Merritt Bankr. W.D. Tenn. Case No. 12-12607 Chapter 11 Petition filed September 13, 2012 In re United Commercial Cast Stone, Inc. Bankr. E.D. Tex. Case No. 12-42505 Chapter 11 Petition filed September 13, 2012 See http://bankrupt.com/misc/txeb12-42505.pdf represented by: Bill F. Payne, Esq. The Moore Law Firm, LLP E-mail: lgarner@moorefirm.com In re M/121, L.P. Bankr. N.D. Tex. Case No. 12-35934 Chapter 11 Petition filed September 13, 2012 See http://bankrupt.com/misc/txnb12-35934.pdf represented by: Richard G. Grant, Esq. E-mail: rgrant@rgglaw.com In re Jim Wempe Bankr. W.D. Wash. Case No. 12-19420 Chapter 11 Petition filed September 13, 2012 In re Edward Thomas Bankr. C.D. Calif. Case No. 12-31261 Chapter 11 Petition filed September 14, 2012 In re Silvia Roney Bankr. S.D. Calif. Case No. 12-12626 Chapter 11 Petition filed September 14, 2012 See http://bankrupt.com/misc/casb12-12626.pdf represented by: Andrew H. Griffin, III, Esq. LAW OFFICES OF ANDREW H. GRIFFIN, III E-mail: Griffinlaw@mac.com In re Silvia Roney Bankr. S.D. Calif. Case No. 12-12626 Chapter 11 Petition filed September 14, 2012 In re Brian Finley Bankr. N.D. Ind. Case No. 12-13031 Chapter 11 Petition filed September 14, 2012 In re Finley Properties, LLC Bankr. N.D. Ind. Case No. 12-13032 Chapter 11 Petition filed September 14, 2012 See http://bankrupt.com/misc/innb12-13032.pdf represented by: Daniel J. Skekloff, Esq. SKEKLOFF, ADELSPERGER & KLEVEN, LLP E-mail: djs@sak-law.com - and ? Scot T. Skekloff, Esq. SKEKLOFF, ADELSPERGER & KLEVEN, LLP E-mail: sts@sak-law.com In re Timothy Behrendt Bankr. D. Nev. Case No. 12-20576 Chapter 11 Petition filed September 14, 2012 In re Ruby Rani, Inc. Bankr. D. N.J. Case No. 12-32676 Chapter 11 Petition filed September 14, 2012 See http://bankrupt.com/misc/njb12-32676.pdf represented by: Shmuel Klein, Esq. LAW OFFICE OF SHMUEL KLEIN E-mail: shmuel.klein@verizon.net In re GMJS Pharmacy, Inc. dba Laven Pharmacy Bankr. E.D.N.Y. Case No. 12-46649 Chapter 11 Petition filed September 14, 2012 See http://bankrupt.com/misc/nyeb12-46649.pdf represented by: Jennifer T. Opoku-Asare, Esq. ASARE LAW FIRM LLC E-mail: jenasare@gmail.com In re 5680 Realty Corp. Bankr. E.D.N.Y. Case No. 12-75602 Chapter 11 Petition filed September 14, 2012 See http://bankrupt.com/misc/nyeb12-75602.pdf represented by: John H Hall, Jr., Esq. PRYOR & MANDELUP, LLP E-mail: jh@pryormandelup.com In re Safe Filters and Hydraulics, Inc. Bankr. E.D.N.C. Case No. 12-06608 Chapter 11 Petition filed September 14, 2012 See http://bankrupt.com/misc/nceb12-06608.pdf represented by: Grieg R. Alley, Esq. ALLEY, REGISTER & MCEACHERN E-mail: griegalley@bellsouth.net In re Rubber One Recycling, LLC Bankr. M.D.N.C. Case No. 12-51313 Chapter 11 Petition filed September 14, 2012 See http://bankrupt.com/misc/ncmb12-51313.pdf represented by: Edwin H. Ferguson, Jr., Esq. FERGUSON, SCARBROUGH, HAYES, HAWKINS E-mail: ehfafd@fspa.net In re Emission Solutions, Inc. Bankr. E.D. Tex. Case No. 12-42530 Chapter 11 Petition filed September 14, 2012 See http://bankrupt.com/misc/txeb12-42530.pdf Filed as Pro Se In re Carmen Martinez Bankr. W.D. Tex. Case No. 12-31757 Chapter 11 Petition filed September 14, 2012 In re Luis Martinez Bankr. W.D. Tex. Case No. 12-31757 Chapter 11 Petition filed September 14, 2012 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Carmel Paderog, Meriam Fernandez, 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 ***